STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive

Anchorage Alaska 99501-3192

Re:THE APPLICATION OF BP               )  Conservation Order No. 374
EXPLORATION (ALASKA)                   )
INC. for an order granting)
an exception to spacing                )  BP Exploration (Alaska), Inc.
requirements of Conservation           )  MPK-38
Order 173 to provide for               )
the drilling of the BP                 )
MPK-38 development oil well.           )
                                          March 4, 1996

IT APPEARING THAT:

1. BP Exploration (Alaska), Inc. submitted an application dated February 10, 1996 requesting exception to the well spacing provisions of Conservation Order 173 to allow drilling the BP MPK-38 development oil well to a producing location within 500 feet of a property boundary in Section 03 T12N R11E Umiat Meridian (UM).

2. Notice of opportunity for public hearing was published in the Anchorage Daily News on February 15, 1996 pursuant to 20 AAC 25.540.

3. No protests to the application were received.

FINDINGS:

1. The BP MPK-38 well as proposed will be a deviated hole drilled from a surface location 3549' from the south line (FSL) and 1943' from the east line (FEL) of Section 3, T12N, R11E, UM to a proposed producing location 2641' FSL and 249' FEL of Section 3 T12N, R11E, UM.

2. Offset owners Oxy USA, Inc. and Arco Alaska, Inc. have been duly notified.

3. An exception to the well spacing provisions of Conservation Order 173 is required for the BP MPK-38 development oil well.

CONCLUSION:

Granting a spacing exception to allow drilling of the BP MPK-38 well as proposed will not result in waste nor jeopardize correlative rights.

NOW, THEREFORE, IT IS ORDERED:

BP Exploration (Alaska), Inc.'s application for exception to the well spacing provisions of Conservation Order 173 for the purpose of drilling the MPK-38 well is approved.

DONE at Anchorage, Alaska and dated March 4, 1996.

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

Tuckerman Babcock, Commissioner
Alaska Oil and Gas Conservation Commission

Conservation Order Index