STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive

Anchorage Alaska 99501-3192

Re:THE APPLICATION OF ARCO Alaska, Inc.            )  Conservation Order No. 440
for an order granting an exception to the spacing  )
requirements of 20 AAC 25.055(a)(1) to             )
provide for the drilling of the Meltwater          )  Meltwater North #2
North #2 exploratory oil to an undefined           )  Kuparuk River Unit
pool in the Southwestern portion of the            )
Kuparuk River Unit.                                )
                                                      January 7, 1999
IT APPEARING THAT:

1. ARCO Alaska, Inc. (AAI) by letter dated December 3, 1998, requested an exception to the well spacing provisions of 20 AAC 25.055(a)(1). The exception would allow drilling the Meltwater North #2 exploratory oil well to a bottomhole location that is closer than 500 feet to a quarter section line.

2. The Commission published notice of opportunity for public hearing in the Anchorage Daily News on December 9, 1998 pursuant to 20 AAC 25.540.

3. No protests to the application were received.

FINDINGS:

1. The Meltwater North #2 exploratory oil well will be drilled as a deviated hole from a surface location of 1788' from the north line (FNL), 74' from the west line of Section 16, T8N, R7E, Umiat Meridian (UM) to a bottomhole location 1788' (FNL), 408' from the east line, Section 17, T8N, R7E, UM.

2. Offset owners BP Exploration (Alaska), Inc.; UNOCAL Alaska Resources; Mobil Oil Corporation and Chevron USA, Inc. and offset landowner the State of Alaska, Department of Natural Resources, have been duly notified.

3. An exception to the well spacing provisions of 20 AAC 25.055(a)(1) is necessary to allow the drilling of this well.

CONCLUSION:

Granting a spacing exception to allow drilling of the Meltwater North #2 exploratory oil well will not result in waste nor jeopardize correlative rights.

NOW, THEREFORE, IT IS ORDERED:

AAI's application for exception to the well spacing provisions of 20 AAC 25.055 (a)(1) for the purpose of drilling the Meltwater North #2 exploratory oil well is approved.

DONE at Anchorage, Alaska and dated January 7, 1999.

Robert N. Christenson, P. E., Chairman
Alaska Oil and Gas Conservation Commission

Camillé Oechsli, Commissioner
Alaska Oil and Gas Conservation Commission

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

Conservation Order Index