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Glodes Corners Road Field and Muck Farm Field

May 19, 1999

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
NOTICE OF NEGATIVE DECLARATION
NOTICE OF PUBLIC HEARINGS
PROPOSED WELL SPACING AND INTEGRATION OF INTERESTS

PROPOSED ACTION: NYSDEC proposes to establish field-wide rules for the spacing of oil and gas wells, and to order the integration of interests within the resulting spacing units, in the Glodes Corners Road Field and the Muck Farm Field (the "fields") located in the Towns of Pulteney and Prattsburgh, Steuben County, New York. (DEC Project No. DMN 99-1). Please consult the maps of these fields for a more precise description of each (see Document Availability, below).

BACKGROUND AND PURPOSE OF ACTION: Columbia Natural Resources, Inc., 900 Pennsylvania Avenue, PO Box 6070, Charleston, WV 25362-0070 attn: Mr. Lee Robinson (Columbia) is conducting an exploration and drilling program and developing producing wells in the fields. To date, several wells have been drilled 7,000 to 8,000 feet to the Ordovician Trenton-Black River Formations and significant discoveries of natural gas have been realized. Further drilling and testing will be necessary to further define reservoir extent. Columbia has proposed production units in the two fields which may or may not represent the reservoir volume likely to be drained by each well. Furthermore, certain production units contain unleased parcels where the right to develop the oil and/or natural gas has not been conveyed to Columbia.

Since geologic conditions in these fields appear to make the statewide minimum well-spacing requirements inadequate for protecting correlative rights and promoting the efficient and economic development of the resource, NYSDEC proposes to order new well-spacing requirements for these fields. An order establishing field-wide spacing rules will serve to configure production units for each of the existing wells and will include procedures for establishing spacing units for future wells. In addition, integrating ownership interests within the proposed spacing units appears to be necessary to protect correlative rights. All ownership interests identified for existing production units and proposed spacing units will be integrated so that the costs and proceeds attributable to development within each unit can be disseminated. The objective of the proposed action is to achieve greater ultimate recovery of the resource and to provide all owners their fair and equitable share of the proceeds derived from the sale of the hydrocarbons.

SEQRA STATUS: The Final Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program, dated July 1992, provides a detailed description of well drilling and well spacing and establishes the basis for environmental reviews and approvals of Department actions subject to the Oil, Gas and Solution Mining Law. The Department, as lead agency, has reviewed the establishment of field-wide well spacing rules and the integration of interests within units for the Glodes Corners Road Field and the Muck Farm Field in accordance with the criteria set forth in 6 NYCRR §617.7, and determined that the proposed action would not have any significant adverse environmental impact. A Notice of Determination of Non-Significance Negative Declaration was prepared on March 23, 1999.

HEARINGS: Public Hearings pursuant to 6 NYCRR §550.4 will be held at the Steuben County Civil Defense Building, State Route 54 (Bath-Hammondsport Road), Bath, NY 14810 to receive sworn testimony from the public on the Proposed Action. Any evidence that the Proposed Action would not protect correlative rights or promote the efficient and economic development of the resource must be presented at this time. Separate hearing sessions are scheduled for each field involved in the Proposed Action as follows:

Muck Farm Field : 7:00 PM June 21, 1999 and 10:00 AM June 22, 1999.
Glodes Corners Road Field : 2:00 PM and 7:00 PM June 22, 1999.

Testimony is to be given at one session for each field. Please be sure you testify at the session scheduled for the field you are interested in.

The Assigned ALJ (below) will hold the record of each hearing open until July 6, 1999, to receive via sworn affidavit evidence in opposition to that which was presented during each hearing. Be sure that affidavits list the proper field in their title. The Assigned ALJ will thereafter issue rulings for each field determining whether or not any further proceedings are required and, if so, who will participate and what issues will be addressed.

Issues will be resolved pursuant to Sections 23-0301, 23-0501, and 23-0901(subdivisions 1, 2 and 3) of the Environmental Conservation Law and 6 NYCRR Parts 550 and 553. The Assigned ALJ may employ procedures from 6 NYCRR Part 624 (Permit Hearing Procedures) deemed appropriate to the proceedings as shall be indicated.

This hearing location is reasonably accessible to persons with a mobility impairment. Interpreter services are available to deaf persons, at no charge. Requests for an interpreter must be made to the Assigned ALJ at least 5 business days before the hearing.

DOCUMENT AVAILABILITY: All non-proprietary documents relevant to the Proposed Action are available for inspection at the following locations:

NYSDEC Region 8 Headquarters, 6274 East Avon-Lima Rd., Avon, NY 14414-9519 [Contact: Randy Nemecek, 716 226-2466]; NYSDEC Region 8 Sub-Office, 7291 Coon Rd., Bath, NY 14810 [Contact: Scott Berg, 607 776-2165]; Town of Prattsburgh Town Offices, PO Box 427, Prattsburgh, NY 14873; Town of Pulteney Town Offices, PO Box 214, Pulteney, NY 14874; NYSDEC Division of Mineral Resources, 50 Wolf Road, Room 290, Albany, NY 12233-6500 [Contact: Thomas E. Noll, 518 457-3682]; and at the NYSDEC Office of Hearings and Mediation Services (address below). Documents that are available include: (1) for each field, a map showing the outlines of the proposed units; (2) for the Glodes Corners Road Field, a NYSDEC-proposed stipulation between NYSDEC and Columbia; (3) for the Glodes Corners Road Field; a Columbia-proposed stipulation between NYSDEC and Columbia; and (4) for the Muck Farm Field, an executed stipulation between NYSDEC and Columbia, dated May 18, 1999, provisions of which are proposed for the final field-wide spacing order. Additional information will be presented at the hearing.

__________/s/__________
Frank Montecalvo,
NYSDEC Office of Hearings and Mediation Services,
50 Wolf Road, Room 423, Albany, NY 12233-1550
[Telephone: 518-457-3468].

Daniel E. Louis
Chief Administrative Law Judge

Albany, NY
May 19, 1999

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