BEFORE THE OIL AND GAS CONSERVATION COMMISSION OF THE STATE OF COLORADO
IN THE MATTER OF THE PROMULGATION AND 2ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE WATTENBERG GAS SPACED AREA AND THE CODELL AND NIOBRARA SPACED AREA, WELD COUNTY, COLORADO	) ) ) )	CAUSE NO.   232,499,407,493 ORDER NO.   232-67,499-4, 407-101             and 493-11

REPORT OF THE COMMISSION

                                  This cause came on for hearing before the Commission on July 20, 1992, in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing, as required by law on the verified application of Snyder Oil Corporation, for an order to amend Cause No. 499-1 to allow a well to be located at an exception location for production from the Dakota Formation, to allow the well to be recompleted to the "J" Sand, Codell, Niobrara, Sussex and Shannon Formations, and further, to allow the downhole commingling of production from the Dakota, "J" Sand, Codell, Niobrara, Sussex  and Shannon Formations.

FINDINGS

                                  The Commission finds as follows:

                                  1.  Snyder Oil Corporation as applicant herein, are interested parties 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. 499-1, the Commission established 320-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Dakota Formation, identical to the 320-acre drilling and spacing units previously established for the "J" Sand Formation required by Cause No. 232, with the permitted well to be located in the NW1/4 and the SE1/4 of the section and no closer than 990 feet to the boundaries of the quarter section, for certain lands, including Section 25, Township 1 North, Range 68 West, 6th P.M.

                                  5.  In Cause No. 232, the Commission established 320‑acre drilling and spacing units for the production of gas from the "J" Sand in the Wattenberg Field with one well allowed for each unit to be located in the NE1/4 and SW1/4 and no closer than 990 feet to the boundaries of the quarter section.  On August 21, 1979, the Commission issued Order No. 232‑20 which allowed a second well to be drilled on each 320‑acre unit, including Section 25, Township 1 North, Range 68 West, 6th P.M.

                                  6.  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, including Section 25, Township 1 North, Range 68 West, 6th P.M.

                                  7.  This matter was heard by the Hearing Officer who recommends approval based upon the testimony presented at the administrative hearing.

                                  8.  No objections to the application were received and an order of the Commission should be entered allowing a well to be drilled at an exception location in the SW1/4 of Section 25, Township 1 North, Range 68 West, 6th P.M., for production from the Dakota Formation.

                                  9.  Engineering testimony presented indicated that prudent production engineering practices would allow commingled production from the various reservoirs resulting in increased recovery of reserves and no irremediable reservoir damage.

ORDER

                                  NOW, THEREFORE, IT IS ORDERED, that Order No. 499-1 shall be amended to allow a well to be drilled and completed at an exception location in the SW1/4 of Section 25, Township 1 North, Range 68 West, 6th P.M., for production from the Dakota Formation and further allow the recompletion and downhole commingling of production from the Dakota, "J" Sand, Codell, Niobrara, Sussex and Shannon Formations.

                                  IT IS FURTHER ORDERED, that should a commercial well be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantage which the person securing the exception may have over other procedures by reason of the drilling of the well as an exception location.

                                  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 , 1992, as of July 20, 1992.

                                                                        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

August 22, 1992