STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive

Anchorage, Alaska 99501-3192
Re:THE REQUEST OF BP EXPLORATION           )  Conservation Order No. 334
(ALASKA) INC. for an order amending        )
Rule 4(c) of Conservation Order            )  Endicott Field
No. 202 to allow an extended surface       )  Endicott Oil Pool
casing setting depth.                      )
                                              April 19, 1994
IT APPEARING THAT:

1. BP Exploration (Alaska) Inc, operator of Duck Island Unit, submitted a request dated February 3, 1994 to amend the Endicott Field Rules, Conservation Order No. 202 (CO No. 202), Rule 4 (c), Casing and Cementing Requirements, for all remaining wells to be drilled in the Endicott Field, Duck Island Unit.

2. Notice of the request was published in the Anchorage Daily News on February 25, 1994.

3. No protests were filed with the Commission.

FINDINGS:

1. Structural casing is driven or jetted to a sufficient depth below the mud line to ensure support of drilling fluid returns to the surface for all wells drilled on the Main Production Island (MPI) and the Satellite Drilling Island (SDI).

2. A diverter is installed on the structural casing while drilling surface hole.

3. Conductor casing is not required in wells drilled after June 2, 1986, on the Main Production Island (MPI) and the Satellite Drilling Island (SDI) per CO No. 216.

4. Surface casing cannot be set below 2700' TVD per CO No. 202, approved on November 22, 1988.

5. The build portion of a directional well drilled on the MPI and the SDI is above 4500' TVD.

6. Key seats may develop if drilling the build portion of a well below surface casing.

7. Experience at Prudhoe Bay shows higher or equal formation leakoff tests result by setting surface casing deeper than 2700' TVD.

8. Information from previously drilled MPI and SDI Endicott wells indicates zones to 4500' TVD are safely drilled using a diverter on the structural casing with a mud weight of 9.0 to 9.5 ppg.

9. No hydrocarbon intervals have been encountered above 4500' TVD while drilling wells on the MPI and SDI.

10. The surface casing setting depths were extended below 2700' TVD in the Prudhoe Bay and Kuparuk River Fields with no resulting problems.

CONCLUSIONS:

1. On the Endicott MPI and on the SDI the structural casing has served as the diverter string while drilling surface hole since June 2, 1986.

2. Surface hole can be safely drilled to depths of 4500' TVD in the Endicott Field using a diverter installed on structural casing.

NOW, THEREFORE, IT IS ORDERED THAT:

Rule 4(c) of CO 202 is amended to read as follows:

Surface casing adequate to provide for proper anchorage, for preventing uncontrolled flow, and to protect the well from the effects of permafrost thaw-subsidence and/or freeze-back loading, shall be set at least 500 measured feet below the base of the permafrost, but not below 4500 feet true vertical depth.

DONE at Anchorage, Alaska and dated April 19, 1994.

David W. Johnston, Chairman

Russell A. Douglass, Commissioner

Tuckerman Babcock, Commissioner

Conservation Order Index