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Shell denied water status

DENVER— In a ruling issued July 22, 2014, the Colorado State Engineer’s Office made an initial determination that SWEPI LP (Shell Oil) provided insufficient information to warrant that produced water withdrawn from their Seibert, State, and Fortune wells be declared non-tributary. Non-tributary water designation would have given Shell ownership and free use of all produced water at their well sites. Recognizing instead that the produced water is tributary requires Shell to augment that amount from their water rights on the Huerfano River. Further, a tributary designation suggests any accident or spill could contaminate area groundwater. The Seibert and Fortune wells have been designated by Shell to be the validation production wells for the Farisita and Gardner Federal Units, huge 25,000 acre tracts in the upper Huerfano Valley. The State well resides within the northwest corner of the Farisita Federal Unit two miles southwest of Gardner. The Seibert sits about 3 miles west of Farisita, and the Fortune well is located west of mile marker 29 on Hwy 69 within

the Muddy Creek drainage above Gardner. Ralf Topper, Senior Hydro-geologist, and Matthew Sares, Chief of Hydro-geological Services for the Colorado Division of Water Resources, signed the ruling citing several flaws in the report submitted by Shell’s consultant AMEC Environmental & Infrastructure, Inc. They stated that their “staff echoes many of the concerns submitted by others during the public comment period”, notably CHC(Citizens for Huerfano County), the Huerfano County Water Conservancy District, Emil McCain, and Joseph Edes.” Chief among those concerns were: 1) AMEC did not adequately address the complex geology of the area with respect to faulting and igneous intrusions, i.e. dikes, and their role in groundwater flow. 2) AMEC did not adequately demonstrate that the Niobrara geological layer in the Subject Wells where oil extraction is to take place was hydrologically isolated from the Niobrara where it outcrops (or comes to the surface) and from the natural stream system. 3) AMEC did not accept the more detailed US Geological Survey published mapping delineating the Niobrara outcrops on the western margin of the basin and instead doubted their existence without doing the necessary fieldwork to back up their assumptions. 4) AMEC provided the State Engineer’s Office with unsubstantiated conclusions by using data that was not site-specific. Shell has an opportunity to ask for a hearing in front of the State Engineer’s Office within 30 days dating from the ruling to dispute these findings. The company must first present detailed reasons justifying such a hearing. Persons and entities who submitted written comments in support may be present at such a hearing to add further evidence. CONTACT: CHC (Citizens for Huerfano County) P.O. Box 544, La Veta, CO 81055 citizensforhuerfanocounty@gmail.com Jeff Briggs, President 719-746-0155, cell 503-758-4320