IN THE MATTER OF THE PROMULGATION AND ESTABLISHMENT OF FIELD RULES TO GOVERN OPERATIONS IN THE CODELL-NIOBRARA SPACED AREA, WELD COUNTY, COLORADO Cause No. 232, 407 Order No. 407-166 AREA AND THE WATTENBERG GAS SPACED, ) 232-121

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on November 21, 1994, in Room 318, State Centennial Building, 1313 Sherman Street, Denver, Colorado, after giving Notice of Hearing, as required by law on the application of Snyder Oil Corporation, for an order to amend Cause No. 407 to allow a well to be recompleted at an exception location for commingled production from the Codell, Niobrara, and "J" Sand Formations.

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. 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 21, Township 4 North, Range 64 West, 6th P.M.

5. In Cause No. 232, the Commission established 320-acre drilling and spacing units with said units to consist of the N1/2 and S1/2 or the E1/2 and W1/2 of a governmental section for production from the "J" Sand Formation and with the authorized well to be located in the NE1/4 and the SW1/4 of each section no closer than 990 feet from the boundaries of the quarter section. By Order No. 232-20, the Commission authorized the drilling of a second well for each 320-acre drilling and spacing unit with the additional well to be located no closer than 990 feet from the boundaries of the quarter section upon which it is located, including Section 21, Township 4 North, Range 64 West, 6th P.M.

6. Order Nos. 407-66 and 232-47 issued April 16, 1991, among other things, allowed the recompletion, downhole commingling and approval of allocation methods for production from the "J" Sand, Codell, and Niobrara Formations, including Section 21, Township 4 North, Range 64 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 that an exception to the permitted well location is necessary to avoid multiple wellhead facilities by allowing an existing well to be recompleted for production from shallower zones.

8. An order of the Commission should be entered allowing the Travellers No. 21-8I4 "J" Well to be recompleted at an exception location 1648 feet FNL and 990 feet FEL in the SE1/4 NE1/4 of Section 21, Township 4 North, Range 64 West, 6th P.M., for production from the Codell and Niobrara Formations, for the 80-acre drilling and spacing unit consisting of the E1/2 NE1/4 of Section 21, and to allow the downhole commingling of production from the Codell and Niobrara Formations with production from the "J" Sand Formation, for the 320-acre drilling and spacing unit consisting of the N1/2 of Section 21.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 407-1 and 407-10 is hereby amended to allow the Travellers No. 21-8I4 "J" Well to be recompleted at an exception location 1648 feet FNL and 990 feet FEL in the SE1/4 NE1/4 of Section 21, Township 4 North, Range 64 West, 6th P.M., for production from the Codell and Niobrara Formations, for the 80-acre drilling and spacing unit consisting of the E1/2 NE1/4 of Section 21, and to allow the downhole commingling o f production from the Codell and Niobrara Formations with production from the "J" Sand Formation, for the 320-acre drilling and spacing unit consisting of the N1/2 of Section 21.

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 , 1994, as of November 21, 1994.

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 December 21, 1994 ??

(232#121)