REPORT OF THE COMMISSION

This cause came on for hearing before the Commission on October 19, 1992, 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 for an order to amend Cause Nos. 499-5, 232-68, 407-103 and 493-13 to allow a well to be located at an exception location for production from the Dakota, "J" Sand, Codell, Niobrara, Sussex and Shannon Form ations and to allow the downhole commingling of production from the Dakota, "J" Sand, Codell, Niobrara, Sussex and Shannon Formations.

FINDINGS

The Commission finds as follows:

1. Snyder Oil Corporation as applicant herein, are interested parties 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. 499-1, the Commission established 320-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Dakota Formation, identical to the 320-acre drilling and spacing units previously established for the "J" Sand Formation required by Cause No. 232, with the permitted well to be located in the NW1/4 and the SE1/4 of the section and no closer than 990 feet to the boundaries of the quarter section, for c ertain lands, including Section 25, Township 2 North, Range 68 West, 6th P.M. Subsequent orders included additional lands, allowed the permitted well to be located in any of the quarter sections and approved the downhole commingling of production from the Dakota Formation with production from the "J" Sand Formation, Codell, Niobrara and Sussex Formations.

5. In Cause No. 232, the Commission established 320-acre drilling and spacing units for the production of gas from the "J" Sand in the Wattenberg Field with one well allowed for each unit to be located in the NE1/4 and SW1/4 and no closer than 990 feet to the boundaries of the quarter section. On August 21, 1979, the Commission issued Order No. 232-20 which allowed a second well to be drilled on each 320-acre unit, including Section 25, Township 2 Nort h, Range 68 West, 6th P.M.

6. 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.

7. In Order No. 493-2, the Commission established 80-acre drilling and spacing units for the production of oil, gas and associated hydrocarbons from the Sussex 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 and the downhole commingling of production from the Sussex, Codell and Niobrara Formations shall be allowed.

8. This matter was heard by the Hearing Officer who recommends approval based upon the testimony presented at the administrative hearing that the Dream Acres subdivision and the Lower Platte Canal are in the NW1/4 of Section 25 and that various buildings are located on the subdivision lots. The surface owners at the above location for the proposed well have agreed to the proposed location.

9. No objections to the application were received and an order of the Commission should be entered allowing a well to be drilled at an exception location 900 feet FSL and 1070 feet FEL in the SW1/4 NW1/4 of Section 25, Township 2 North, Range 68 West, 6th P.M., for production from the Dakota, "J" Sand Formations, Codell, Niobrara, Sussex and Shannon Formations.

10. Engineering testimony presented indicated that prudent production engineering practices would allow commingled production from the Dakota, "J" Sand, Codell, Niobrara, Sussex and Shannon Formations resulting in increased recovery of reserves and no irremediable reservoir damage.

ORDER

NOW, THEREFORE, IT IS ORDERED, that Order Nos. 499-5, 232-68, 407-103 and 493-13 shall be amended to allow a well to be drilled and completed at an exception location 1550 feet FNL and 660 feet FWL in the SW1/4 NW1/4 of Section 25, Township 2 North, Range 68 West, 6th P.M., for production from the Dakota, "J" Sand, Codell, Niobrara, Sussex and Shannon Formations and further allow the downhole commingling of production from the Dakota, "J" Sand, Codell, N iobrara, Sussex and Shannon Formations.

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 , 1992, as of October 19, 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 October 28, 1992 ??