STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

333 West Seventh Avenue, Suite 100

Anchorage Alaska 99501

ADMINISTRATIVE APPROVAL NO. DIO 26.001

Re: Request to Extend Injection Interval in Kustatan Field Well #1

Mr. Paul White
Drilling Manager – Alaska Division
Forest Oil Corporation
310 K Street, Suite 700
Anchorage, AK 99501

Dear Mr. White:

By letter dated August 15, 2003, Forest Oil Corporation (“Forest”) requested authorization to add perforations and extend the injection zone in Kustatan Field Well No. 1 (“KF 1”). The subject well is a Class II disposal well supporting production from the Osprey platform. An unexpected volume of water, and the inability to keep pace with disposal of produced water led Forest to seek approval to add perforations to the well. Attempts to add deeper perforations were unsuccessful.

Confinement and fracture analyses done as part of the DIO 26 concluded that any fracture should be confined to within 220 feet of the injection interval using conservative estimates of injected fluid, pressures, and rates. Temperature surveys indicate that fluids injected to date have been confined to the authorized injection zone. The proposed injection interval as requested by Forest would be approximately 120 feet below the base of fresh water (determined from logs; reference DIO 26 conclusion 5). The Commission believes that injection of produced water only with controlled rates and pressures can be accomplished in a manner that protects fresh water.

Based on information provided by Forest, and the analyses performed in compliance with the previously approved DIO 26, the Commission approves Forest’s request to perforate KF 1 from 6270 to 6370 feet, and 6385 to 6475 feet (all measured depths). This approval is subject to the following conditions:

1. The well must pass a mechanical integrity test as required by Rule 3 of DIO 26.
2. A baseline step rate test must be performed prior to sustained injection.
3. Forest must perform a temperature survey within 30 days of initiating disposal into the new interval(s).
4. Injection must not exceed 2 barrels per minute until the Commission is satisfied the disposed water is isolated deeper than the base of fresh water calculated to be 6150 feet (MD) in the well.

DONE at Anchorage, Alaska and dated August 15, 2003.

Randy Ruedrich
Commissioner

BY ORDER OF THE COMMISSION

DATED at Anchorage, Alaska and dated August 15, 2003.

Disposal Injection Order Index