STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive

Anchorage Alaska 99501-3192

Re:THE APPLICATION OF MARATHON                  )  Conservation Order No. 384
OIL COMPANY for an order granting               )
an exception to spacing requirements of         )  Marathon Oil Company
Title 20 AAC 25.055 to provide for the          )  Kasilof State No. 1
drilling of Kasilof State No. 1 exploratory     )
gas well.                                       )
                                                   November 6, 1996
IT APPEARING THAT:

1. Marathon Oil Company submitted an application dated October 7, 1996 requesting exception to 20 AAC 25.055(a)(2) to allow drilling the Kasilof State No. 1 exploratory gas well to a producing location that is closer than 1500 feet to a drilling unit boundary.

2. Notice of opportunity for public hearing was published in the Anchorage Daily News on October 17, 1996 pursuant to 20 AAC 25.540.

3. No protests to the application were received.

FINDINGS:

1. The Marathon Kasilof State No. 1 well as proposed will be a deviated hole drilled from a surface location 520' from the south line and 1340' from the west line of Section 28, T3N, R12W, Seward Meridian (SM) to a bottom-hole location 3606' from the south line and 5062' from the east line of Section 30, T3N, R12W SM.

2 Marathon Oil Company is operator of all drilling units adjacent to the proposed Kasilof State No. 1 location.

3. An exception to 20 AAC 25.055(a)(2) is necessary to allow drilling of this well.

CONCLUSION:

Granting a spacing exception to allow drilling of the Marathon Kasilof State No. 1 well as proposed will not result in waste nor jeopardize correlative rights.

NOW, THEREFORE, IT IS ORDERED:

Marathon's application for exception to 20 AAC 25.055 for the purpose of drilling the Kasilof State No. 1 well is approved as proposed.

DONE at Anchorage, Alaska and dated November 6, 1996.

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

Tuckerman Babcock, Commissioner
Alaska Oil and Gas Conservation Commission

Conservation Order Index