3001 Porcupine Drive
Anchorage Alaska 99501-3192
Re:THE APPLICATION OF MARATHON OIL COMPANY  )     Conservation Order No. 408
   for an order exempting fields in the Cook)
   Inlet area from the requirements of      )     Marathon Operated
   20 AAC 25.280.                           )     Cook Inlet Fields

                                                  January 15, 1998


1. Marathon Oil Company ("Marathon"), operator of several Cook Inlet oil and
   gas fields, submitted an application on November 5, 1997, requesting
   exemption from the requirements of 20 AAC 25.280(a) for wells in following
   fields and pools:

FIELD                                POOL

Beaver Creek                         Beaver Creek

Kenai         Kenai Unit             Sterling 3.0
                                     Sterling 4.0
                                     Sterling 5.1
                                     Sterling 5.2
                                     Sterling 6.0

              Cannery Loop Unit      Beluga
                                     Deep Tyonek
                                     Upper Tyonek

Sterling                             Undefined

Trading Bay                          G-NE/Hemlock-NE
                                     NTBU Undefined

2. Notice of public hearing was published in the Anchorage Daily News on
   November 14, 1997.

3. The Commission received a protest and request for hearing regarding
   the petition from Cook Inlet Region, Inc. on November 26, 1997.

4. A hearing was held at the Commission's office on December 18, 1997.


1. An operator of an oil and gas well must file an Application for Sundry
   Approvals (Form 10-403) and receive Commission approval prior to
   performing well service operations (i.e., perforating or reperforating
   casing, well stimulation, pulling tubing, altering casing, and repairing
   wells). 20 AAC 25.280(a).

2. Current well activity in the Cook Inlet area is dominated by the types
   of sundry operations set forth in 20 AAC 25.280(a).

3. Marathon, as a principal Cook Inlet operator, has routinely conducted
   sundry well operations within the aforementioned Cool Inlet fields for
   the past 30 years.

4. Information regarding the current well condition, proposed well operations,
   bottom-hole pressure, and well control program must be submitted with an
   Application for Sundry Approval.  20 AAC 25.280(b).

5. The operator must submit a complete well record, with copy of daily reports
   and tests, after completing well service operations on a Report of Sundry
   Well Operations (Form 10-404) within 30 days after completing the operations.
   20 AAC 25.280(d).

6. The operator must maintain well records and reports for at least five years.
   20 AAC 25.280(c) and 20 AAC 25.070.

7. The Commission has primacy for all Class II injection wells in the state.

8. Well service operations on injection wells sometimes prompt additional
   requirements such as mechanical integrity tests.  Additional requirements
   are specified on the commission approved Application for Sundry Approvals.

9. Commission inspectors routinely inspect drilling operations and well
   service operations to ensure compliance with regulations.

10. Marathon conducts an annual average of 10 sundry well operations within
    wells in its Cook Inlet fields.

11. Most of the fields operated by Marathon are adjacent to populated areas
    on the Kenai Peninsula.

12. The Applications for Sundry Approvals is part of the public record in
    non-confidential well files.

13. The Application for Sundry Approvals is the only routinely filed well
    document that provides advance notice of an operator's intention to
    undertake sundry operations including modifications or repairs of wells.


1. Marathon conducts a few standard and routine sundry well operations in
   fields it operates in the Cook Inlet area each year.

2. Marathon's record of performance shows a history of safe and responsible
   sundry well operations.

3. Marathon's sundry well operations in its Cook Inlet fields, while few
   in number each year, are likely to generate public interest because of
   their proximity to population centers.

4. Eliminating the requirements of 20 AAC 25.280(a) and (b) for all
   development wells in Marathon operated fields in the Cook Inlet area
   will not significantly reduce filing or result in administrative
   efficiencies for either the operator or the AOGCC because of the small
   number of operations undertaken on an annual basis by Marathon.

5. In order to administer the Class II UIC program, Form 10-403 must be
   required prior to workovers on all service wells (i.e., gas injection,
   water injection, and waste disposal).

6. The location of Marathon's Cook Inlet operations engenders a concern to
   maintain as complete as possible public record of subsurface activities
   on these properties.


The November 5, 1997 request of Marathon Oil Company for exemption from the
requirements of 20 AAC 25.280(a) is denied.

DONE at Anchorage, Alaska and dated January 15, 1998.
David W. Johnston, Chairman
Alaska Oil and Gas Conservation Commission
Robert N Christenson, P.E., Commissioner
Alaska Oil and Gas Conservation Commission
Cammy Oechsli, Commissioner
Alaska Oil and Gas Conservation Commission

Conservation Order 408
January 15, 1998
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