STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Procupine Dr.

Anchorage Alaska 99501-3192
Re:Show cause as to whether any action              )   Conservation Order No. 321
is necessary to prevent or to assist in             )
preventing waste, to insure a greater               )   Oil and Gas Conservation
ultimate recovery of oil and gas, or                )   Commission
to protect correlative rights of persons            )	
owning interests in the Pt. McIntyre                )   Pt. McIntyre oil Field
oil field                                           ) 
                                                        October 8, 1993
IT APPEARING THAT:

1. The Alaska Oil and Gas Conservation Commission upon its own motion scheduled a public hearing for presentation of show cause testimony as to whether any action is necessary to prevent or to assist in preventing waste, to insure a greater ultimate recovery of oil and gas, or to protect correlative rights of persons owning interests in the Pt. McIntyre oil field.

2. Notice of hearing was published in the Anchorage Daily News on August 7, 1993 pursuant to 20 ACC 25.540.

3. The hearing was held on September 9, 1993 in the Z. J. Loussac Library, Minicipal Assembly Chambers, 3600 Denali Street, Anchorage, Alaska.

4. Testimony was presented by representatives of ARCO Alaska Inc, BP Exploration (Alaska) Inc, Exxon Corporation and the State Department of Natural Resources Division of Oil and Gas.

FINDINGS:

1. ARCO Alaska Inc. has been designated operator of the Pt. McIntyre oil field by working interest owners ARCO Alaska Inc., BP Exploration(Alaska) Inc., and Exxon Corporation.

2. Conservation Order No. 317, which prescribes pool rules for development of the Pt. McIntyre oil field, concluded that the unitized management, operation and further development of the Pt. McIntyre and Stump Island oil pools is reasonably neccesary to effectively carry on pressure maintenance and enhanced oil recovery operations to maximize ultimate recovery.

3. The State of Alaska and the working interest owners have not agreed to integrate their interests to provide for the unitized management, development and operation for all of the proposed area of development for the Pt. McIntyre oil field.

4. ARCO Alaska Inc. and BP Exploration (Alaska) Inc. filed a joint petition dated September 8, 1993 requesting the Commission to order expansion of the Prudhoe Bay Unit to include a proposed Pt. McIntyre Participating Area.

5. ARCO Alaska Inc. and BP Exploration (Alaska) Inc., testified that a compulsory unitization hearing is appropriate to prevent waste, insure greater ultimate recovery and protect correlative rights.

6. Exxon Corporation testified in support of the joint petition to expand the Prudhoe Bay Unit to include a Pt. McIntyre Participating Area.

7. Although still participating in ongoing negotiations as observers, ARCO Alaska Inc. and BP Exploration (Alaska) Inc. believe that an impasse has been reached in efforts to voluntary integrate the interests of the working interest owners and the State of Alaska.

8. The State of Alaska, through its Department of Natural Resources, testified that voluntary efforts to unitize the Pt. McIntyre oil field are still underway.

9. Exxon Corporation testified that voluntary efforts to unitize the Pt McIntyre oil field are still underway.

CONCLUSION:

The question as whether any action is necessary by the Commission, acting on its own motion, to prevent or to assist in preventing waste, to insure a greater ultimate recovery of oil and gas, or to protect correlative rights of persons owning interests in the Pt. McIntyre oil field is rendered moot by the petition of ARCO Alaska Inc. and BP Exploration (Alaska) Inc.

NOW, THEREFORE, IT IS ORDERED that the application of ARCO Alaska Inc. and BP Exploration (Alaska) Inc. filed pursuant to AS 31.05 for the stated purpose of forming the Pt McIntyre participating area and expanding the Prudhoe Bay Unit are is accepted and a hearing on this matter was held in a manner prescribed by the Commission under its statutory and regulatory authorities within 30 days of proper notice.

DONE at Anchorage, Alaska and dated October 8, 1993.

David W. Johnston, Chairman
Alaska Oil and Gas Conservation Commission

Tuckerman Babcock, Commissioner
Alaska Oil and Gas Conservation Commission

Russell A. Douglass, Commissioner
Alaska Oil and Gas Conservation Commission

Conservation Order Index