STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

333 West Seventh Avenue, Suite 100

Anchorage Alaska 99501

Re:

THE APPLICATION OF ConocoPhillips Alaska, Inc. for an order granting an exceptionto spacing requirements of Rule 3 of Conservation Order432B to provide for the drilling and operation of the Kuparuk River Unit 3F-19A production well.

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Conservation Order No. 514.000

Kuparuk River Field
Kuparuk River Unit
Kuparuk River Oil Pool
Kuparuk River Unit Well 3F-19A

March 5, 2004

IT APPEARING THAT:

1. ConocoPhillips Alaska, Inc. (“CPAI”), by letter dated January 16, 2004 and received by the Alaska Oil and Gas Conservation Commission (“Commission”) that same day, requests exception to the well spacing provisions of Rule 3 of Conservation Order No. 432B (“CO 432B”) to allow drilling and operation of the Kuparuk River Unit (“KRU”) 3F-19A oil production well to a location within the same governmental quarter section as another well capable of producing from the Kuparuk River Oil Pool.

2. Notice of opportunity for public hearing was published in the Anchorage Daily News on January 29, 2004 pursuant to 20 AAC 25.540.

3. No protests to the application or requests for hearing were received.

FINDINGS:

1. The KRU 3F-19A production well will be drilled as a deviated hole with a surface location 124 feet from the east line and 37 feet from the south line of Section 19, T12N, R9E, Umiat Meridian (“UM”) to a bottomhole location 816 feet from the east line and 302 feet from the north line of Section 19, T12N, R9E, UM. This bottomhole location lies near the center of State Lease ADL 25632, and more than 500’ away from the nearest lease or unit boundary.

2. Well spacing in Section 19, T12N, R9E, UM is regulated by Rule 3 of Conservation Order 432B (“CO 432B”), which supersedes statewide spacing requirements of 20 AAC 25.055. Rule 3 of CO 432B states in part:

“Not more than one well may be drilled on any governmental quarter section or governmental lot corresponding to it...”

As proposed, KRU 3F-19A requires an exception to Rule 3 of CO 432B, as it will be the third wellbore open to the Kuparuk Oil Pool within the northeast governmental quarter section of Section 19.

3. The location of the KRU 3F-19A well was selected as the most favorable structural position to recover oil reserves in the Kuparuk River Formation that are not recoverable with the current well pattern.

4. Offset landowners, owners and operators within 1,000 feet of the anticipated injection interval of the KRU 3F-19A well have been notified.

CONCLUSIONS:

1. An exception to the well spacing provisions of Rule 3, CO 432B is necessary to allow the drilling and operation of the KRU 3F-19A production well.

2. Granting the requested spacing exception for the KRU 3F-19A well will promote more efficient recovery of oil reserves and will not result in waste or jeopardize the correlative rights of adjoining or nearby owners.

NOW, THEREFORE, IT IS ORDERED:

CPAI’s application for exception to well spacing provisions to allow the drilling and operation of the KRU 3F-19A production well is approved.

DONE at Anchorage, Alaska and dated March 5, 2004.

John K. Norman, Chair
Alaska Oil and Gas Conservation Commission

Daniel T. Seamount, Jr., Commissioner
Alaska Oil and Gas Conservation Commission


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