REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on August 22, 1995, 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 for order to allow the directionally drilled Lower Latham No. 35-14B Well with a surface location in the NW1/4 SW1/4 and a bottom hole location in the SE1/4 SW1/4 in Section 35, Township 5 North, Range 65 West, 6th P .M. to be produced at an exception location, for production from the Codell and Niobrara Formations, for an 80-acre drilling and spacing unit. 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 35, Township 5 North, Range 65 West, 6th P.M.

5. The Lower Latham No. 35-14B Well was drilled in October, 1993 and not all of the contiguous and cornering landowners have executed waivers for the exception location. On May 23, 1995, the Commission staff issued a Notice of Alleged Violation which provided the Applicant reach agreement with offset operators or file for hearing to receive Commission approval for exception location, since the well was directionally drilled and completed October 26, 19 93 and first produced November 2, 1993.

6. Testimony presented at the hearing indicated that the closest directional survey point to the top of the producing interval is 30 feet out of the producing window, as defined by Cause No. 407. The top perforation is estimated at 40 feet further from the closest survey point for a total exception of 70 feet.

7. The Commission should approve the request to allow the Lower Latham No. 35-14B Well to be produced at an exception location.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 407-1 and 407-10 shall be amended to allow the directionally drilled Lower Latham No. 35-14B Well with a surface location in the NW1/4 SW1/4 and a bottom hole location in the SE1/4 SW1/4 in Section 35, Township 5 North, Range 65 West, 6th P.M.to be produced at an exception location 893 feet FSL and 1830 feet FWL, for production from the Codell and Niobrara Formations, for the 80-acre drilling and spacing uni t consisting of the E1/2 SW1/4 of Section 35.

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 , 1995, as of August 22, 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 20, 1995 ??