BEFORE THE OIL AND GAS CONSERVATION COMMISSION

                                                                  OF THE STATE OF COLORADO

IN THE MATTER OF THE UNDERGROUND                                               )                     CAUSE NO. 1

DISPOSAL OF WATER BY INJECTION IN                                                )

THE LONETREE FIELD, ADAMS COUNTY,                                               )                     ORDER NO. 1-90

COLORADO                                                                                            )

REPORT OF THE COMMISSION

                        This matter came on for hearing before the Commission on October 31, 2000 at 8:30 a.m. in Suite 801, the Chancery Building, 1120 Lincoln Street, Denver, Colorado, on the application of Tyler Rockies Exploration, Ltd. for a permit to dispose of produced water into the Cowell No. 1 Well located in the NE¼ NW¼ of Section 31, Township 3 South, Range 59 West, 6^th P.M.

FINDINGS

                        The Commission finds as follows:

                        1.  Tyler Rockies Exploration, Ltd. (“Tyler”), 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.  On March 22, 2000, Tyler submitted to the Commission an application pursuant to Rule 325. for a permit to dispose of produced water into the Cowell No. 1 Well located in the NE¼ NW¼ of Section 31, Township 3 South, Range 59 West, 6^th P.M.  Tyler gave notice as per Rule 325.g. to each surface owner and owner as defined in §34-60-103(7), C.R.S., within one-quarter (1/4) mile of the proposed well and to owners and operators of oil and gas wells producing from the proposed injection zone within one-half (1/2) mile of the disposal well or to owners of cornering and contiguous units where injection will occur into the producing zones, whichever is the greater distance.

                        5.  On March 30, 2000, Ronald D. Funk submitted a protest to the application filed by Tyler, stating his concern that his mineral rights in the S½ of Section 30, Township 3 South, Range 59 West, 6^th P.M. will be damaged by the proposed injection of produced water.

                        6.  On May 22, 2000, Tyler, by its attorney, filed with the Commission a verified application for an order authorizing the disposal of produced water into the Cowell No. 1 Well located in the NE¼ NW¼ of Section 31, Township 3 South, Range 59 West, 6^th P.M.  Tyler proposed that the produced water be injected into the “J” Sand Formation at a depth of 6,239 feet to 6,270 feet.

                        7.  Testimony and exhibits presented by Tyler at the hearing described the geology in the area around the Cowell No. 1 Well and indicated the likely flow of injected water will be to the south and east of the Cowell No. 1 Well, not toward Mr. Funk’s lands to the north.

                        8.  Testimony and exhibits presented by Tyler at the hearing indicated injection will not adversely affect correlative rights of adjacent mineral owners if injection is restricted to two and one-half (2½) million barrels of produced water.

                        9.  The Applicant agreed to be bound by oral order of the Commission.

                        10. Based on the facts stated in the application and the testimony and exhibits presented at the hearing, the Commission finds that the request for a permit to dispose of produced water into the Cowell No. 1 Well, located in the NE¼ NW¼ of Section 31, Township 3 South, Range 59 West, 6^th P.M., should be allowed, with an injection volume limited to two and one-half (2½) million barrels of produced water.

ORDER

                        NOW, THEREFORE IT IS ORDERED, that the Director shall be authorized to approve the application of Tyler Rockies Exploration, Ltd. to inject produced water into the “J” Sand Formation, at a depth of 6,239 feet to 6,270 feet, through the Cowell No. 1 Well located in the NE¼ NW¼ of Section 31, Township 3 South, Range 59 West, 6^th P.M.

                        IT IS FURTHER ORDERED that the Director shall condition permit approval to limit the injection volume  to two and one-half (2½) million barrels of produced water.

                        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 November 2000, as of October 31, 2000.

                                                                        OIL AND GAS CONSERVATION COMMISSION

                                                                           OF THE STATE OF COLORADO

                                                                        By____________________________________________

                                                                                          Patricia C. Beaver, Secretary

Dated at Suite 801

1120 Lincoln Street

Denver, Colorado 80203

November 13, 2000