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                                             )                     ORDER NO. 1V-88

OIL CORPORATION, WELD COUNTY, COLORADO                                    )                                 (1-211)

REPORT OF THE COMMISSION

                        This cause came on for hearing before the Commission on September 25, 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 why Snyder Oil Corporation, was not in violation of Orders 493-2 and 407-67, Rules 6 and 7 issued by the Oil and Gas Conservation Commission, and why it should not invoke the provisions of §34-60-121 C.R.S., as amended, providing for penalties for violations of the Rules and Regulations of the Commission.

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 December, 1993 and January, 1994, Snyder Oil Corporation completed and produced three (3) wells, the Gurtler No. 24-11J, located in the NE¼ SW¼, the Gurtler No. 24-12J, located in the NW¼ SW¼, and the Gurtler No. 24-13J, located in the SW¼ SW¼, all in Section 24, Township 3 North, Range 65 West, 6th P.M., for production from the Sussex, Codell and Niobrara Formations without prior approval from the Colorado Oil and Gas Conservation Commission.  NOAVs were issued May 30, 1995.  Permits were not submitted or approved until July, 1995.  Further review of Commission records indicates that commingling of production occurred without proper notification to all interest owners of an approved allocation method.

                        5.  Testimony presented by staff at the time of hearing, indicated that a meeting was held with Snyder Oil Corporation on September 18, 1995, in which information was presented to show that the Sussex Formation had been completed as a separate formation and as such produced for three months.  Additional information was also presented to indicate how the allocation formula was derived, to show what ownership Snyder Oil Corporation purchased in the Codell Formation, and to describe how Snyder Oil Corporation made subsequent payments to mineral owners based on the reallocation of production and the corrected net revenue interest.

                        6.  Staff recommends that Snyder Oil Corporation be found in violation of Order Nos. 493-2 and 407-67, Rules 6 and 7, for recompleting without prior permit approval, commingling without prior approval, and commingling without owner notification.  Staff recommends that a fine of four thousand dollars ($4,000) be assessed for violation of Rule No. 6 of Order Nos. 493-2 and 407-67, recompleting without prior permit approval, for the three wells described in Finding No. 4, for a total penalty of twelve thousand dollars ($12,000).

O R D E R

                        NOW, THEREFORE, IT IS ORDERED, that Snyder Oil Corporation is hereby found in violation of Order Nos. 493-2 and 407-67, Rules 6 and 7, for recompleting without prior permit approval, commingling without prior approval, and commingling without owner notification, for the three (3) wells, the Gurtler No. 24-11J, located in the NE¼ SW¼, the Gurtler No. 24-12J, located in the NW¼ SW¼, and the Gurtler No. 24-13J, located in the SW¼ SW¼, all in Section 24, Township 3 North, Range 65 West, 6th P.M.

                        IT IS FURTHER ORDERED, that Snyder Oil Corporation is hereby assessed a penalty in the amount of twelve thousand dollars ($12,000) for violation of Order Nos. 493-2 and 407-67, Rule No. 6, recompleting without prior permit approval.  The penalty shall be payable within thirty (30) days of the date the order is entered.

                        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 September 25, 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 28, 1995