STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

333 West Seventh Avenue, Suite 100

Anchorage, Alaska 99501

Re: THE APPLICATION OF Phillips Alaska, ) Conservation Order No. 464
Inc. ("Phillips") for an order granting )
an exception to the spacing requirements of ) KRU 3H-16A
Rule 3 of Conservation Order 432A to provide ) Development Well
for the drilling and testing of the Kuparuk )
River Unit development well to a bottom hole ) January 28, 2002
location that is closer than 500 feet of the )
property line of the Kuparuk Participating Area. )

IT APPEARING THAT:

1. Phillips Alaska, Inc. ("Phillips") by letter dated November 8, 2001 and received by the Commission on November 16, 2001, has requested an order allowing a spacing exception in accordance with 20 AAC 25.055 for the proposed Kuparuk River Unit 3H-16A development oil well. The projected bottom hole location of this well may fall within 500 feet property line of the Kuparuk Participating Area.

2. The Commission published notice of opportunity for public hearing in the Anchorage Daily News on November 20, 2001, pursuant to 20 AAC 25.540.

3. No protests to the application were received.

FINDINGS:

1) The surface location of the well is 1107' FNL, 4997' FEL, Section 12, T12N, R8E, U.M. The projected bottom hole location for this well will be 2378' FNL, 2387' FEL, Section 10, T12N, R8E, U.M.

2) Rule 3 of Conservation Order 432A governs well spacing in this portion of the Kuparuk River Oil Pool.

3) An exception to the well spacing provisions of Rule 3, Conservation Order 432A is necessary for the drilling of this well.

CONCLUSION:

Granting a spacing exception to allow drilling of the Kuparuk River Unit 3H-16A oil well promotes efficient development and will not result in waste nor jeopardize correlative rights.

NOW, THEREFORE, IT IS ORDERED:

Phillips's application for exception to the well spacing provisions of Rule 3, Conservation Order 432A for the purpose of drilling and completing the Kuparuk River Unit 3H-16A well is approved.

DONE at Anchorage, Alaska and dated January 28, 2002.

Cammy Oechsli Taylor, Chair
Alaska Oil and Gas Conservation Commission

Julie M. Heusser, Commissioner
Alaska Oil and Gas Conservation Commission

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