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. 407-85

REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on January 21, 1992, 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 verified application of Snyder Oil Corporation, to establish two 40-acre drilling and spacing units for production from the Codell and Niobrara Formations underlying an undrilled 80-acre 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. On December 19, 1983, the Commission authorized Order No. 407-1 to be issued, which 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 fro m the Niobrara formation in certain lands and to allow the downhole commingling of production from the Codell and Niobrara Formations. The S1/2 SE1/4 of Section 13, Township 4 North, Range 66 West, 6th P.M., Weld County, Colorado lies within the area spaced by these orders.

5. No wells have been drilled in the S1/2 of the SW1/4 of said Section 13 to establish production from the Codell or Niobrara Formations.

6. Based on the facts stated in the verified application, and having been heard by the Director as Hearing Officer on January 16, 1992, and with additional testimony presented at the time of hearing, the Commission should approve the request and amend Order Nos. 407-1 and 407-10 and establish two 40-acre drilling and spacing units consisting of the SW1/4 SE1/4 and the SE1/4 SE1/4 of said Section 13 for the commingled production of oil, gas and associate d hydrocarbons from the Codell and Niobrara Formations.

O R D E R

NOW, THEREFORE IT IS ORDERED, that the unit consisting of the S1/2 of the SE1/4 of Section 13, Township 4 North, Range 66 West, 6th P.M., Weld County, Colorado be segregated into two 40-acre drilling and spacing units consisting of the SW1/4 SE1/4 and the SE1/4 SE1/4 for the commingled production of oil, gas and associated hydrocarbons from the Codell and Niobrara Formations underlying these lands, and that Snyder Oil Corporation be designated the operat or for the unit consisting of the SW1/4 SE1/4 of said Section 13.

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 January 21, 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 February 14, 1992 ORDERS\407-85 ??