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Chemung SRA 1; Hardy 1447-A; Root 1514; Hakes 1; Reed 1; Soderblom 1 (Fortuna Energy, Inc.)

April 4, 2008




The Department of Environmental Conservation (the "Department") hereby gives notice, pursuant to Environmental Conservation Law ("ECL") § 23-0901(3), that a public hearing will be held at the time and place stated below to address compulsory integration of interests in the following natural gas wells:

Well Data
Well Name Town County API Number
Chemung SRA 1 Catlin Chemung 31-015-22960-00-00
Hakes 1 Corning Steuben 31-101-23054-00-00
Hardy 1447-A Catlin Chemung 31-015-22919-01-00
Reed 1 Corning Steuben 31-101-23055-00-00
Root 1514 Catlin Chemung 31-015-22975-00-00
Soderblom 1 Big Flats Chemung 31-015-23134-00-00

Well Operator: Fortuna Energy Inc., 203 Colonial Drive, Suite 101, Horseheads, New York 14845 (Contact: Ms. Janice Hart).

Project Description and Departmental Action Proposed: All six natural gas wells were permitted, drilled and spaced prior to 2005, and are currently producing natural gas from the Ordovician Trenton-Black River formations. The Chemung SRA 1, Hardy 1447-A and Root 1514 units are located in the Wilson Hollow Field. The Hakes 1, Reed 1, and Soderblom 1 units are located in the Quackenbush Hill Field.

Department staff proposes to issue compulsory integration orders for the six natural gas well spacing units pursuant to ECL article 23 as it existed prior to amendments adopted in 2005 (see Laws of New York 2005, chapter 386). Consistent with the Second Interim Decision of the Assistant Commissioner in Matter of Terry Hill South Field (June 7, 2007 [available online at]), Department staff propose that uncontrolled mineral rights owners in the six units be integrated as either non-participating owners or royalty owners. Uncontrolled owners are mineral interest owners in a spacing unit who have not entered into a voluntary lease or participation agreement with the well operator.

Uncontrolled owners identified in the six units will receive by mail a copy of this notice and a draft compulsory integration order for the unit in which they hold an interest. Postmarked by April 30, 2008, the well operator will provide each uncontrolled owner a statement showing the costs expended and the revenues received to date for the well in the unit. Uncontrolled owners who seek additional information should contact the well operator at the address above (Contact: Mark Scheuerman). The well operator will be responsible for notifying the Department of any changes in ownership, lease status or acreage calculations. In addition to filing any objection to the terms of integration, as discussed below, uncontrolled owners should contact the well operator to identify any updates in ownership information, lease status, acreage calculations or any other information stated in documents provided by the well operator.

Please take notice that any uncontrolled owner objecting to the terms of integration proposed in the draft integration order, including to their status as either a non-participating owner or royalty owner as proposed in the draft order, must file a timely petition for party status, as described below. Please take further notice that any uncontrolled owner who fails to file a timely petition for party status shall be integrated into the spacing unit pursuant to the terms as proposed in the draft integration order.

Please take further notice that any person with mineral interests within the established unit boundaries who have not been included as uncontrolled owners in the proposed integration orders, but who believe that they should be so included, must also file a timely petition for party status. The petition for party status must provide the appropriate tax parcel identification for the parcel in which the person claims a mineral interest, the basis for the belief that the person is an uncontrolled owner in a unit, and indicate whether the person seeks integration as a non-participating owner or royalty owner.

SEQRA Status: Department staff published a Final Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program in July 1992. On September 1, 1992, Department staff issued a SEQRA (ECL article 8) findings statement concluding that the conduct of compulsory integration hearings pursuant to ECL article 23 would have no significant impact on the environment. Department staff, on behalf of the Department as lead agency, determined that these proceedings are being carried out in conformance with the conditions and thresholds established for compulsory integration hearings in the GEIS and the findings statement. Accordingly, no further action is required under SEQRA (see 6 NYCRR 617.10[d][1]).

Public Hearing: A legislative hearing to receive unsworn comments about the proposed integration orders will be held at 1:00 PM on Monday, June 23, 2008, at the Horseheads Holiday Inn Express, 2666 Corning Road, Horseheads, New York 14845 (Contact telephone for directions: 607-739-3681). Written comments may also be submitted to the Office of Hearings and Mediation Services, at the address below, in advance of the legislative hearing. All persons, organizations, corporations, or government agencies that may be affected by the outcome are invited to attend the hearing and to submit oral or written comments. Interpreter services will be made available to deaf persons, at no charge, upon written request to the administrative law judge ("ALJ") at least five business days prior to the date of the hearing. The hearing location is reasonably accessible to persons with a mobility impairment.

Issues Conference: A pre-adjudicatory hearing issues conference will be held at the Horseheads Holiday Inn Express, 2666 Corning Road, Horseheads, New York 14845 (Contact telephone for directions: 607-739-3681), immediately following the legislative hearing and continuing at 9:00 AM on Tuesday, June 24, 2008, if necessary. The purpose of the issues conference is to define, narrow, and resolve, if possible, the proposed issues for adjudication. Any persons requesting party status must appear or be represented at the issues conference in order that all proposed issues may be fully discussed.

Party Status: All persons wishing to participate in the issues conference and at any subsequent adjudicatory hearing, including uncontrolled owners challenging the proposed terms of their integration, must file a written petition requesting party status, pursuant to 6 NYCRR 624.5(b) (also see 6 NYCRR 624.4[c]). The petition must fully identify the proposed party together with the name(s) of the person(s) who will act as the proposed party's representative(s), the proposed party's interest in the proceeding, any interest relating to the statutes administered by the Department relevant to the proposed action, whether the request is for full party status or amicus status, and the precise grounds for opposing or supporting the proposed integration orders. Mere opposition to the proposed integration orders is not a sufficient basis to be granted party status. Please see 6 NYCRR 624.4 and 624.5 for further information on party status and identification of issues.

Petitions for full party status must demonstrate that substantive and significant issues exist concerning the proposed integration orders. Please see 6 NYCRR 624.4 and 624.5 for further information about requesting full party status and identifying issues for adjudication.

All petitions requesting full party or amicus status to participate in the issues conference and adjudicatory hearing (if an adjudicatory hearing is deemed necessary) must be received at the Office of Hearings and Mediation Services at the following address no later than 4:00 PM on Wednesday, May 28, 2008. Telefaxed or emailed copies will be accepted, provided a hard copy is sent by first class mail and postmarked no later than May 28, 2008. Petitions must be submitted to: James T. McClymonds, Chief Administrative Law Judge, New York State Department of Environmental Conservation, Office of Hearings and Mediation Services, 625 Broadway, Albany, New York 12233-1550 (Telephone: 518-402-9003).

All persons filing petitions for party status must also send a copy of their petition at the same time and in the same manner to: Jennifer Hairie, Esq., Associate Attorney, New York State Department of Environmental Conservation, Office of the General Counsel, 625 Broadway, 14th Floor, Albany, New York 12233-1500 (Telephone: 518-402-9507); and to the well operator's representative, Thomas S. West, Esq., The West Firm PLLC, 677 Broadway, 8th Floor, Albany, New York 12207-2990 (Telephone: 518-514-1193).

Document Availability: All filed documents, including the draft integration orders for the spacing units for each well listed above and copies of the spacing unit maps, are available for inspection during normal business hours at New York State Department of Environmental Conservation, Horseheads Suboffice, 276 Sing Sing Road, Suite 1, Horseheads, New York 14845 (Telephone: 607-739-0809, Attn: Joy Brewer [appointment recommended]), and at the Office of Hearings and Mediation Services at the Albany address above. Copies of the spacing unit maps are also available on the Department's website at: (Reed, Hakes, Soderbom); and (Root, Hardy, Chemung SRA1). A copy of 6 NYCRR part 624 may be obtained from the Office of Hearings and Mediation Services at the address above, or online at

Statutory and Regulatory Provisions: ECL article 1 (General Provisions); article 3, title 3 (General Functions); article 8 (State Environmental Quality Review); article 23 (Mineral Resources); and 6 NYCRR part 550 (Mineral Resources); part 617 (State Environmental Quality Review); and part 624 (Permit Hearing Procedures).

James T. McClymonds
Chief Administrative Law Judge

Albany, New York
April 4, 2008

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