REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on June 24, 1996, 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 Stromquist No. 4 Well to be recompleted at an exception location in the SE% SW% of Section 24, Township 2 North, Range 69 West, 6th P.M., for production from the Codell and Niobrara Formations and to commingle with production from the "J" Sand Formation and to approve the proposed allocation method.

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. 407-1 0 and 407-13, the Commission amended Order No. 407-1 to include production from the Niobrara Formation in certain lands and to a llow the downhole commingling of production from the Codell and Niobrara Formations, including Section 24, Township 2 North, Range 69 West, 6th P.M.

5. This matter was heard by the Hearing Officer who recommends approval based upon the testimony presented at the administrative hearing that commingling of production is necessary to avoid multiple wellhead facilities by allowing an existing well to be recompleted for production from shallower zones.

6. An order of the Commission should be entered allowing the Stromquist No. 4 Well to be recompleted in the SE1/4 SW1/4 of Section 24, Township 2 North, Range 69 West, 6th P.M., for production from the Codell and Niobrara Formations for the 80-acre drilling and spacing unit consisting of the S% SWY4 of Section 24 and for the unspaced "J" Sand Formation drilling and spacing unit to be designated as the SW% of said Section 24 and approve the proposed alloca tion method.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 407-1 and 407-10 shall be amended to allow the Stromquist No. 4 Well to be recompleted in the SE1/4 SW1/4 of Section 24, Township 2 North, Range 69 West, 6th P..M., for production from the Codell and Niobrara Formations for the 80-acre drilling and spacing unit consisting of the S1/2 SW1/4 of Section 24 and for the unspaced "J" Sand Formation drilling and spacing unit to be designated as the SW1/4 of said Sec tion 24 and approve the proposed allocation method.

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 3rd day of July 1996, as of June 24, 1996.

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 July 31 1996