STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive

Anchorage Alaska 99501-3192
Re:THE APPLICATION OF STEWART             )  Conservation Order No. 364
PETROLEUM COMPANY for an order            )
granting an exception to the spacing      )  Stewart Petroleum Company
requirements of Title 20 AAC 25.055       )  West McArthur River Unit No. 4
for the Stewart West McArthur River Unit  )
No. 4 exploratory oil and gas well.       )
                                             October 4, 1995

IT APPEARING THAT:

1. Stewart Petroleum Company submitted an application dated August 23, 1995 requesting exception to 20 AAC 25.055(a)(2) and 20 AAC 25.055(a)(3) to allow drilling the Stewart West McArthur River Unit No. 4 exploratory oil and gas well to within 500 feet of a section line.

2. Notice of an opportunity of public hearing was published in the Anchorage Daily News on August 30, 1995 pursuant to 20 AAC 25.540.

3. Phillips Petroleum Company by correspondence dated September 14, 1995, filed a protest to the proposed spacing exception.

4. By correspondence dated September 28, 1995, Phillips Petroleum Company withdrew their protest.

FINDINGS:

1. Stewart Petroleum's West McArthur River Unit No. 4 (WMRU 4) well as proposed will be a deviated hole drilled from a surface location 2026' from the south line and 1974' from the west line (FWL) of Section 16, T8N, R14W, Seward Meridian (SM) to a bottom-hole location 1088' from the north line and 200' FWL of Section 22, T8N, R14W, SM.

2. The WMRU 4 well has the dual purpose of serving as a delineation well for Lower Tyonek gas reserves present in an undefined gas pool in the nearby Phillips Petroleum Company West Foreland No. 1 (WF 1) gas well and as a Hemlock Fm. exploratory oil well.

3. The proposed Lower Tyonek gas target horizon in the WMRU 4 is more than 3000' from the WF 1 well and more than 1500' from the exterior boundary of the West McArthur River Unit. The WF 1 well is located in Section 21 T8N, R14W, SM, the WMRU 4 well bottom hole location is proposed for Section 22 T8N, R14W, SM.

4. The external boundary of the West McArthur River Unit does not conform to section lines along the western side of the Unit and traverses through a portion of Section 21 T8N, R14W, SM.

5. Phillips Petroleum Company operates lease A-035017 which has a common boundary with the West McArthur River Unit and contains the WF 1 well.

6. Offset owners Cook Inlet Region Incorporated, Phillips Petroleum Company, and Union Oil Company of California have been duly notified.

CONCLUSIONS:

1. The WMRU 4 well as proposed will not conflict with statewide spacing requirements relative to existing wells.

2. An exception to 20 AAC 25.055(a)(3) is necessary to bring the WMRU 4 well into compliance with statewide rules governing well spacing and drilling units.

NOW, THEREFORE, IT IS ORDERED:

Stewart Petroleum Company's application for exception to 20 AAC 25.055 for the West McArthur River Unit No. 4 well is approved.

DONE at Anchorage, Alaska and dated October 4, 1995.

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

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

Conservation Order Index