STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive

Anchorage Alaska 99501-3192

Re:THE APPLICATION OF BP                  )  Conservation Order No. 365
EXPLORATION (ALASKA) INC.                 )
for an order granting                     )
an exception to spacing                   )  BP Exploration (Alaska), Inc.
requirements of Title                     )  Sourdough No. 3
20 AAC 25.055 to provide                  )
for the drilling of the BP                )
Sourdough. No. 3                          )
exploratory oil well                      )
                                             December 5, 1995

IT APPEARING THAT:

1. BP Exploration (Alaska), Inc. submitted an application dated November 13, 1995 requesting exception to 20 AAC25.055(a)(1) to allow drilling the BP Sourdough No. 3 exploratory oil well closer than 500 feet to a drilling unit boundary.

2. Notice of hearing was published in the Anchorage Daily News on November 17, 1995 pursuant to 20 AAC 25.540.

3. No substantive protests to the applications were received.

FINDINGS:

1. The BP Sourdough No. 3 well as proposed will be a straight hole drilled from a surface location 2245' from the south line and 212' from the west line of Section 29, T9N, R24E, Umiat Meridian.

2. Offset owner Chevron U.S.A. has been duly notified.

4. An exception to 20 AAC 25.055(a)(1) is necessary to allow drilling of this well.

CONCLUSION:

Granting a spacing exception to allow drilling of the BP Sourdough No. 3 exploratory oil well as proposed will not result in waste nor jeopardize correlative rights.

NOW, THEREFORE, IT IS ORDERED:

BP Exploration (Alaska), Inc.'s application for exception to 20 AAC 25.055 for the purpose of drilling the Sourdough No. 3 well is approved as proposed.

DONE at Anchorage, Alaska and dated December 5, 1995.

David W. Johnston, Chairman
Alaska Oil and Gas Conservation Commission

J. David Norton, Commissioner
Alaska Oil and Gas Conservation Commission

Tuckerman Babcock, Commissioner
Alaska Oil and Gas Conservation Commission

Conservation Order Index