STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

333 West Seventh Avenue, Suite 100

Anchorage Alaska 99501

Re:

THE APPLICATION OF Union Oil Company of California (“UNOCAL”) for an order granting an exception to the spacing requirements of 20 AAC 25.055(a)(2) to provide for the drilling and production of the Swanson River Unit KGSF No. 7A gas storage well.

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Conservation Order No. 539

Swanson River Unit KGSF No. 7A
Drilling and Production

November 1, 2004

IT APPEARING THAT:

1. Union Oil Company of California (UNOCAL) submitted an application dated August 23, 2004 requesting exception to the well spacing provisions of Title 20 AAC 25.055(a)(2) to allow drilling the Swanson River Unit (SRU) KGSF No. 7A, gas storage well to a location which is within 1500 feet of a property line between two landowners;

2. Notice of opportunity for public hearing was published in the Anchorage Daily News on August 30, 2004 pursuant to 20 AAC 25.540; and

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

FINDINGS:

1. The SRU KGSF No. 7A gas storage well will be drilled as a vertical hole with a surface location 425 feet from the east line and 1999 feet from the south line of Section 28, T8N R9W, Seward Meridian (SM).

2. The proposed storage interval of the SRU KGSF No. 7A well will be located within 1500 feet of the boundary between lease A-028399 with the Bureau of Land Management as landowner and lease A-028406 with Cook Inlet Region, Inc. as landowner.

3. Offset landowners, owners and operators within 3,000 feet of the anticipated storage interval of the SRU KGSF No. 7A well have been notified.

4. The location of the SRU KGSF No. 7A well was selected on the basis of anticipated favorable structural position and stratigraphic conditions for recovery of stored gas reserves

5. An exception to the well spacing provisions of Title 20 AAC 25.055 (a)(2) is necessary to allow the drilling of the SRU KGSF No. 7A gas storage well.

CONCLUSIONS:

1. Drilling and producing the SRU KGSF No. 7A gas storage well will not cause waste or jeopardize correlative rights.

NOW, THEREFORE, IT IS ORDERED:

UNOCAL’s application is granted.

DONE at Anchorage, Alaska and dated November 1, 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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