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. 407 Order No. 407-80

REPORT OF THE COMMISSION

TO ALL INTERESTED PARTIES AND TO WHOM IT MAY CONCERN:

This cause came on for hearing before the Commission on November 18, 1991 at 8:30 a.m., in Room 101, State Education Building, 201 East Colfax, Denver, Colorado, after giving Notice of Hearing as required by law, on the application of Snyder Oil Corporation for an order granting an exception location to the permitted well location as provided for in Cause No. 407, for production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formations underlying these lands.

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. On December 19, 1983, the Commission authorized Order No. 407-1 to be issued which, among other things, established 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Codell Formation. The units consist of the E/2 and W/2 or the N/2 and S/2 of each quarter section with the permitted well located in the center of a quarter-quarter section with a 200 foot tolerance and the option to drill a second well in the undrilled quarter-quarter section. Subsequent orders included production from the Niobrara Formation underlying certain lands and allowed for the downhole commingling of the Codell and Niobrara Formations, including Section 9, Township 4 North, Range 65 West, 6th P.M., Weld County, Colorado.

5. Snyder Oil Corporation requested waivers as required by Cause No. 407, from all continuous and cornering owners to the 80-acre drilling and spacing unit consisting of the W/2 of the SW/4 of said Section 9.

6. Waivers were signed by approximately thirty-five owners. Twelve waiver letters were returned undeliverable. Seven working

interest owners objected in writing to the Commission and one owner filed a protest with the Commission.

7. Based on the facts stated in the verified application, and considering the topographic obstruction of a reservoir in the permitted well location, as provided for in Cause No. 407, the Commission should enter an order allowing a well to be drilled 2270 feet FSL and 920 feet FWL in the NW/4 SW/4 of Section 9, Township 4 North, Range 65 West, 6th P.M. for production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formations.

O R D E R

NOW, THEREFORE IT IS ORDERED, that an exception to the permitted well location as provided for in Cause No. 407 is hereby granted for a well to be drilled 2270 feet FSL and 920 feet FWL in the NW/4 SW/4 of Section 9, Township 4 North, Range 65 West, 6th P.M., for production of oil, gas and associated hydrocarbons from the Codell-Niobrara Formations.

IT IS FURTHER ORDERED, that if a commercial well shall be completed at the location set forth above, the Commission shall, upon application of any interested person, take such action as will offset any advantages which the person securing the exception may have over other producers by reason of drilling the well as an exception, including suitable provisions to prevent the production from the well drilled as an exception of more than its just and equitable share of the oil and gas in the pool.

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 , 1991, as of November 18, 1991.

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 December 11, 1991 1579I