3001 Porcupine Drive

Anchorage Alaska 99501-3192

(ALASKA) INC. for a waiver of the gas-oil )
ratio limitations of 20 AAC 25.240 for ) Badami Oil Field
the Badami Oil Pool. ) Badami Oil Pool
August 27, 1998


1. By letter dated July 6, 1998, BP Exploration (Alaska) Inc. ("BPXA") submitted an application requesting a waiver to the gas-oil ratio limitations of 20 AAC 25.240 for the Badami Oil Pool.

2. The Commission published notice of an opportunity for public hearing in the Anchorage Daily News on July 23, 1998.

3. The Commission did not receive any protest or a request for public hearing.


1. BPXA is the operator of the Badami Oil Pool; the working interest owners are BPXA and Petrofina Delaware, Incorporated.

2. Commission regulation, 20 AAC 25.240, prohibits production of an oil well if the gas-oil ratio ("GOR") of the well exceeds the original solution GOR of the reservoir by more than 100%.

3. Exceptions from the GOR limitation are allowed for pools where an additional recovery project is in operation, if the produced gas is being returned to the same pool or if acquisition of pool performance data is necessary to establish an optimum reservoir management program.

4. The Commission issued Conservation Order 402, dated August 22, 1997, to provide initial rules to begin development of the Badami Oil Pool on the North Slope of Alaska.

5. At the time the Commission issued Conservation Order 402, BPXA had not yet fully developed plans for enhanced oil recovery ("EOR") operations in the pool.

6. On June 1, 1998, BPXA applied to the Commission for approval of EOR operations in the Badami Oil Pool. BPXA plans for EOR operations include produced gas reinjection, waterflood and miscible gas injection.

7. The Commission issued Area Injection Order 17, dated August 26, 1998, approving the injection of water, gas and miscible injectant for EOR operations in the Badami Oil Pool.

8. The owners of the Badami Oil Pool have committed to return all gas less that used for fuel to the pool from onset of production and begin a waterflood within four months of production start up. Miscible gas injection is planned to start in early 1999.

9. The owners of the Endicott Oil Pool have agreed to sell gas and miscible injectant to the Badami Oil Pool owners for EOR operations. The Commission issued Administrative Approval 202.38, dated August 10, 1998, allowing a gas offtake rate of up to 25 MMSCF per day to supply the Badami Oil Pool with fuel gas and source gas for EOR operations.

10.BPXA plans to obtain additional pool performance data to evaluate and optimize EOR operations.


1. The operator has committed to gas injection and a waterflood project in the Badami Oil Pool.

2. Granting a variance from the GOR limitations of 20 AAC 25.240 will not cause waste, jeopardize correlative rights or impair ultimate recovery so long as EOR operations are begun in a timely manner.

3. Conservation Order 402 may be amended and reissued to allow a variance to the GOR limitations of 20 AAC 25.240.

NOW, THEREFORE, IT IS ORDERED that Conservation Order 402 be amended to include a waiver of the GOR limitations of 20 AAC 25.240 and that the terms and conditions of Conservation Order 402 be reissued as Conservation Order 402A. The findings, conclusions and administrative record for Conservation Orders 402 are adopted by reference and incorporated in this decision. The rules set out below now apply to the affected area as described in Conservation Order 402.

Rule 1 Field and Pool Name

The field is the Badami Field. Hydrocarbons underlying the affected area and within the herein defined interval of the Canning Formation constitute a single oil and gas reservoir called the Badami Oil Pool.

Rule 2 Pool Definition

The Badami Oil Pool is defined as the accumulation of hydrocarbons common to and correlating with the interval between the measured depths of 9,500 feet and 11,500 feet in the Badami No. 1 well.

Rule 3 Well Spacing

Nominal 20-acre well spacing is established for the pool within the affected area. No well bore may be open to the pool within 500 feet of the external boundary of the affected area, or within 700 feet of another well capable of producing from the same pool.

Rule 4 Administrative Action

Upon proper application or its own motion, the Commission may administratively waive the requirements of any rule stated in this order or administratively amend this order as long as the change does not promote waste, jeopardize correlative rights, or compromise ultimate recovery and is based on sound engineering principles.

Rule 5 Gas-Oil Ratio Limitation

Wells producing from the Badami Oil Pool are exempt from the gas-oil-ratio limits of 20 AAC 25.240(b) so long as the provisions of 20 AAC 25.240(c) apply.

DONE at Anchorage, Alaska and dated August 27, 1998.

David W. Johnston, Chairman

Robert N. Christenson, P.E., Commissioner

Camille Oechsli, Commissioner

Conservation Order Index