OVERVIEW OF OIL & GASEXPLORATION, DEVELOPMENT and

STATE REGULATION

February 18, 2012

Debbie Baldwin – Environmental ManagerColorado Oil and Gas Conservation Commission

2OIL AND GAS WELLS OF COLORADO

COGCC, Oct 17,2008

46,953

22,500

24,500

26,500

28,500

30,500

32,500

34,500

36,500

38,500

40,500

42,500

44,500

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COLORADO MONTHLY ACTIVE WELL COUNT02-07-12

Weld 49.0%(2262)

Garfield 28.0% (1323)

Las Animas 2.0% (85)

Yuma 3.0%(148)

La Plata 2.0%(99)

Rio Blanco 2%(109)

Mesa 3.0%(127)

All Others 9.0%(506)

COLORADO OIL AND GAS 2011DRILLING PERMITS BY COUNTY

as of 01-09-12

Colorado Oil and Gas Conservation Commission Mission Statement

• Oil and Gas Conservation Act states that the Commission’s mission is to:

Foster the responsible, balanced development, production, and utilization of oil and gas in a manner consistent with protection of public health, safety, and welfare, including protection of the environment and wildlife resources.

• C.R.S. 34-60-102(1)(a)(I).

GREAT SOURCE OF INFORMATION

COGCC Public Websitewww.cogcc.state.co.us

• Denver Office Phone Number: (303) 894-2100

• Statewide Complaint Line: (888) 235-1101

Hydraulic Fracturing Information

Highlights of Disclosure Rule:

• Operators must complete the chemical disclosure registry form and post it within 60 days after the conclusion of a hydraulic fracturing treatment.

• Operators must include all chemicals, hazardous and non-hazardous, in the fracturing fluid. They must also include concentrations of each chemical.

• Location: www.FracFocus.org website(Ground Water Protection Council and the Interstate Oil and Gas Compact Commission).

FracFocus website

FracFocus website: wells can be located by zooming in on map, clicking on markers

FracFocus website: well identifying information and frac fluid contents displayed by clicking icon

OIL & GAS WELLSDRILLING AND COMPLETION

Engineering Staff - Overview• Areas - Based on drilling activity

- Geologic Basins• Responsibilities

– Form 2 – Application for Permit to Drill– Casing and cement design– Ground water & hydrocarbon isolation– Well completion reports– Cement bond log evaluation– Geophysical log review– Workover operations, casing repairs, remedial cementing – Intent to plug and abandon well– Subsequent plugging and abandonment report– Under Ground Injection (UIC) Class II well permitting– Bradenhead and MIT Programs– Administer orphan well plugging and reclamation

Form 2 Application for Permit to Drill Casing and Cementing Plan

CEMENT PRODUCTION CASINGTo isolate hydrocarbons to producing formations by cement and steel casing.

GROUND SURFACE

WELLHEAD

19

CEMENTSURFACE CASING

CEMENTPRODUCTION CASING

PRODUCING FORMATIONS

CEMENTED CONDUCTOR

AQUIFER(S)

Production Casing cemented steel

DenverArapahoe

OIL AND GAS PRODUCTION

Field Inspection Group - Overview• Over 12,000 inspections in 2011• Complaints (housekeeping, spills, trash, debris, dust)• Drilling operations (noise, lighting, secondary containment)

• Cementing and Completion operations (noise, lighting, containment, bradenhead monitoring, green completions)

• Routine (status, signs & tank labels, equipment inventory, spills)• Class II Underground Injection Control (UIC) wells• Mechanical integrity tests (MIT)• Interim and final reclamation• Stormwater best management practices (BMP)• Permit conditions of approval (COA)

· Implement CDPHE-WQCC GW Standards & Classifications.· Permit & oversee the management of E&P Wastes.· Approve & oversee Site Investigation and Remediation· Respond to complaints alleging impacts to public health safety

and welfare and the environment (water & soil).· Conduct studies to establish baseline and current conditions prior

to or during O&G development and monitor to detect changes· Environmental review of O&G locations – Form 2A.

Environmental Group - Overview

900 SERIES RULES - Management of E&P Waste• Rule 901 - General

• Rule 902 to 905 – Pits: permitting (Form 15 & Form 2A), lining, O&M, closing

• Rule 906 – Spills/releases: reporting, cleanup, surface owner notification

• Rule 907 – Managementreuse/recycling plans, tracking, disposal methods,

produced water, drilling fluids, oily wastes, frac fluid, etc

• Rule 908 – Centralized E&P Waste Management Facilities

• Rule 909 – Site Investigation, Remediation, Closure

• Rule 910 – Cleanup Concentrations

· Samples collected by the COGCC, Operators, other agencies· Studies by COGCC to establish Baseline and Current Conditions· Samples Collected in response to complaints and requests· Samples required by Orders of the Commission (Cause 112) · Samples required by Rules (317B, 318A.e.4., 608, 908)· Samples required for Site Investigation and Remediation activities· Analytical results from >6,000 water wells & >6,500 oil and gas wells.· COGA’s voluntary water well sampling program.

GROUND WATER PROTECTIONINVESTIGATIONS & MONITORING

North Park Basin

North Park Basin

North Park Basin

North Park Basin

North Park Basin

South Park Basin

South Park Basin

South Park Basin

South Park Basin

South Park Basin

Canon City EmbaymentCanon City EmbaymentCanon City EmbaymentCanon City EmbaymentCanon City Embayment

San Luis Basin

San Luis Basin

San Luis Basin

San Luis Basin

San Luis Basin

Piceance BasinPiceance BasinPiceance BasinPiceance BasinPiceance Basin

HugotonHugotonHugotonHugotonHugoton

Raton BasinRaton BasinRaton BasinRaton BasinRaton BasinSan Juan Basin

San Juan Basin

San Juan Basin

San Juan Basin

San Juan Basin

Paradox Basin

Paradox Basin

Paradox Basin

Paradox Basin

Paradox Basin

Uintah Basin

Uintah BasinUintah Basin

Uintah Basin

Uintah Basin

Sand Wash BasinSand Wash BasinSand Wash BasinSand Wash BasinSand Wash Basin

Denver Julesburg BasinDenver Julesburg BasinDenver Julesburg BasinDenver Julesburg BasinDenver Julesburg Basin

• Blue – water samples• Green – oil/gas well samples

· Properly drilling, completing (including fracing), operating, and P&A oil & gas wells to ensure and maintain isolation of productive zones from GW & SW.

· Properly storing, treating, reusing/recycling, transporting, and disposing of wastes.

· Properly installing and maintaining associated equipment & E&P waste management facilities.

· Rapid response to and thorough remediation of impacts from spills and releases.

GROUND WATER PROTECTION

· Collect samples from water wells, soil or other media for field and laboratory analyses.

· Collect samples of gas, oil, condensate, produced water, flow back, or other wastes from nearby oil and gas wells.

· Compare analytical results to background and water regional water quality.

· Compare stable isotopic signatures and composition of gas samples to determine source.

· Review operational information for oil & gas wells and waste management

· If we verify a complaint:

· Operator must remediate impacts to meet standards.

· Operator must mitigate impacts.

COMPLAINT RESPONSE