BEFORE THE OIL AND GAS CONSERVATION COMMISSION

                                                              OF THE STATE OF COLORADO

IN THE MATTER OF THE VIOLATION OF THE RULES                 )                    CAUSE NO. 1

AND REGULATIONS OF THE OIL AND GAS                                  )

CONSERVATION COMMISSION BY SNYDER OIL                         )                    ORDER NO. 1V-84

CORPORATION, WELD COUNTY, COLORADO                             )                                (1-206)

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission on August 21, 1995 at 8:30 a.m., in Suite 801, The Chancery Building, 1120 Lincoln Street, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Snyder Oil Corporation to allow the directionally drilled UPRC No. 9-6I6 Well with a surface location in the NW¼ SW¼ and a bottom hole location in the SE¼ NW¼ in Section 9, Township 4 North, Range 66 West, 6th P.M., to be produced at an exception location 2015 feet FNL and 1512 feet FWL, for production from the Codell and Niobrara Formations, for the 80-acre drilling and spacing unit consisting of the E½ NW¼ of Section 9.

FINDINGS

                        The Commission finds as follows:

                        1.  Snyder Oil Corporation 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. 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.  Subsequent orders of 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, including Section 9, Township 4 North, Range 66 West, 6th P.M.

                        5.  The UPRC No. 9-6I6 Well was originally drilled in April, 1994 but the hole was lost.  The Applicant re-drilled the well as part of a continuous operation with verbal approval from the Commission.  Upon Commission request, the Applicant shut-in the subject well on March 9, 1995.  The Applicant has filed this application in response to the Notice of Alleged Violation dated May 23, 1995 which provided that the Applicant either reach agreement with offset operators or file for Commission approval for the exception location.  The Well was completed April 8, 1994 and first produced April 12, 1994.  The permit was received on January 25, 1995 after COGCC staff requested it.

                        6.  Testimony presented at the hearing indicated that following data review, the producing interval was calculated to end approximately 212 feet from the unit boundary with the rest of the hole even closer.  This well at its furthest point is 212 feet from the unit boundary.

                        7.  The Application, as submitted, was protested by HS Resources, Inc. stating that the above well has trespassed on HS Resources, Inc. minerals who are the leasehold owners of the contiguous tract to the exception location.

                        8.  After testimony from both parties and staff, the Commission finds Snyder Oil Corporation in violation of CRS §34-60-102, §34-60-105 and Order No. 407-1 and recommends a fine of twenty thousand dollars ($20,000).  This penalty should be payable within thirty (30) days of the date the order is entered.

                        9.  The Commission should continue this matter to the September hearing so that the Applicant and Protestant may attempt to reach agreement on the alleged infringement of correlative rights.

O R D E R

                        NOW, THEREFORE, IT IS ORDERED, that Snyder Oil Corporation is hereby assessed a penalty in the amount of twenty thousand dollars ($20,000).  The penalty shall be payable within thirty (30) days of the date the order is entered.

                        IT IS FURTHER ORDERED, that the Commission shall continue this matter to the September hearing so that the Applicant and Protestant may attempt to reach agreement on the alleged infringement of correlative rights.

                        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 , 1995, as of August 21, 1995.

                                                                        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

September 14, 1995