STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

333 West Seventh Avenue, Suite 100

Anchorage Alaska 99501

ADMINISTRATIVE APPROVAL NO. 443.01

Mr. Chip Alvord
Alpine Drilling Team Leader
ConocoPhillips Alaska, Inc.
P.O. Box 100360
Anchorage, AK 99510-0360

Re: Spacing Exception for Colville River Unit CD1-46 Well

Dear Mr. Alvord:

On June 1, 2004, the Alaska Oil and Gas Conservation Commission (“Commission”) received correspondence from ConocoPhillips Alaska, Inc. (“CPAI”) dated May 28, 2004 requesting a waiver of spacing requirements for drilling and operation of the Colville River Unit (“CRU”) CD1-46 service well. On July 1, 2004, the Commission received a revised request for exception from CPAI dated June 29, 2004. This well will lie entirely within state leases ADL 025559, ADL 372095 and ADL 372096, and more than 500 feet from any property lines where ownership changes. The productive interval of CRU CD1-46 will lie within the Alpine Oil Pool, and will approach within approximately 421 feet of existing well CRU CD1-37, which is also open to the Alpine Oil Pool.

Conservation Order 443 (“CO 443”) governs the Alpine Oil Pool within the Colville River Unit. An exception to the spacing requirements of Rule 3 is required, as CRU CD1-46 will open the pool within 500 lineal feet of existing well CRU CD1-37.

Rule 10 of CO 443 states: “Upon proper application or its own motion, the Commission may administratively waive the requirements of any rule stated above 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.” Administrative approval is appropriate for a waiver of well spacing requirements specified in CO 443. Notice and public hearing are not required for this spacing exception application as CRU CD1-46 will be located entirely within unitized State leases ADL 25559, ADL 372095 and ADL 372096, and within the Alpine Participating Area (“PA”). The well will lie more than 500 feet from the boundary of the Colville River Unit and the boundary of the Alpine PA. Correlative rights will not be jeopardized.

The Commission has determined drilling and operation of the CRU CD1-46 well will not promote waste, will not jeopardize correlative rights, will enhance ultimate recovery, will not result in an increased risk of fluid movement into freshwater, and is based on sound engineering and geoscience principles. The Commission hereby approves the drilling and operation of the Colville River Unit CD1-46 well as proposed.

DONE at Anchorage, Alaska and dated July 13, 2004.

The Alaska Oil and Gas Conservation Commission

John K. Norman, Chair
Commissioner

Daniel T. Seamount, Jr.
Commissioner

cc: Ms. Dora I. Soria, ConocoPhillips Alaska, Inc.


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