REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on July 18, 1994, in Room 610, State Services Building, 1525 Sherman Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified application of Snyder Oil Corporation for an order to extend the spaced area for the Shannon Formation as established by Order No. 496-1 in Weld County, Colorado.

FINDINGS

The Commission finds as follows:

1. Snyder Oil Corporation as applicant herein, is an interested party in the subject matter of the above-referenced hearing.

2. Due notice of the time, place and purpose of the hearing has been given in all respects as required by law.

3. The Commission has jurisdiction over the subject matter embraced in said Notice, and of the parties interested therein, and jurisdiction to promulgate the hereinafter prescribed order.

4. In Order No. 496-1, the Commission established 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Shannon Formation. Wells shall be located in the center of the 40-acre tract or quarter-quarter section with a tolerance of 200 feet in any direction and the downhole commingling of production from the Shannon, Codell and Niobrara Formations shall be allowed. Subsequent Order No. 496-2 included additi onal lands under the provisions of Order No. 496-1.

5. In Order No. 407-1, the Commission established 80-acre drilling and spacing units for the production of oil and/or gas and associated hydrocarbons from the Codell Formation. Wells shall be located in the center of the 40-acre tract or quarter-quarter section with a tolerance of 200 feet in any direction. In Order Nos. 407-10 and 407-13, the Commission amended Order No. 407-1 to include production from the Niobrara Formation in certain lands and to allow the downhole commingling of production from the Codell and Niobrara Formations.

6. Testimony was heard by the Hearing Officer that indicates that the Shannon Formation is a common source of supply for oil, gas and associated hydrocarbons, in addition to the area set forth in Order No. 496-1 and subsequent orders, for the following described lands in Weld County, Colorado, to-wit:

Township 4 North, Range 66 West, 6th P.M. Section 16: W1/2 SW1/4 Section 30: W1/2 SE1/4

7. The existing locations, drilling and/or producing wells in the area described in Finding 6 herein, should be the permitted wells for the units upon which each is located.

8. No objections to the application were received and the Hearing Officer recommended the application be approved based upon the geological and engineering testimony presented at the administrative hearing.

9. At the time of administrative hearing the parties agreed to be bound by the verbal order of the Commission in this matter.

O R D E R

NOW, THEREFORE, IT IS ORDERED, that the area set forth in Finding 6 herein shall be subject to the following rules and regulations which shall apply hereafter to a well drilled, completed or recompleted in the Shannon Formation underlying lands described herein, in addition to other applicable rules and regulations and orders of the Commission, if any, heretofore adopted and not in conflict herewith.

Rule 1. Eighty (80) acre drilling and spacing units shall be and the same is hereby established for the production of oil and/or gas from the Shannon Formation underlying the following described lands in Weld County, Colorado, to-wit:

Township 4 North, Range 66 West, 6th P.M. Section 3: N1/2 SW1/4 Section 4: N1/2 SE1/4 Section 5: E1/2 SW1/4; N1/2 NW1/4 Section 16: W1/2 SW1/4 Section 30: W1/2 SE1/4

Township 5 North, Range 66 West, 6th P.M. Section 28: E1/2 NE1/4; E1/2 NW1/4; E1/2 SW1/4; W1/2 SE1/4 Section 29: E1/2 NW1/4 Section 32: E1/2

Rule 2. Said units and permitted well locations shall be in accordance with the provisions of Order No. 496-1.

Rule 3. Dual completion and downhole commingling shall be allowed as to both oil and gas in the Shannon, Codell, and Niobrara Formations in wells drilled, or to be drilled in the area described above in Rule 1.

IT IS FURTHER ORDERED, that the existing well locations, drilling and/or producing wells in the W1/2 SW1/4 of Section 16 and the W1/2 SE1/4 of Section 30, both in Township 4 North, Range 66 West, 6th P.M., shall be the permitted well locations for the units upon which they are located.

IT IS FURTHER ORDERED, that the provisions contained in the above order shall become effective forthwith.

IT IS FURTHER ORDERED, that the Commission expressly reserves its right, after notice and hearing, to alter, amend or repeal any and/or all of the above orders.

ENTERED this day of , 1994, as of July 18, 1994.

OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO

By Patricia C. Beaver, Secretary

Dated at Suite 380 1580 Logan Street Denver, Colorado 80203 July 28, 1994 ??

(496#6)