STATE OF ALASKA
ALASKA OIL AND GAS CONSERVATION COMMISSION
3001 Porcupine Drive
Anchorage Alaska 99501-3192

        Re: THE APPLICATION OF ARCO   )         Conservation Order No. 419
           ALASKA, INC. for an order granting   )
           an exception to spacing requirements     )
           of 20 AAC 25.055 to allow drilling        )          ARCO Alaska, Inc.
           the KRU 2N-329 development oil well  )          KRU 2N-329
           adjacent to the western boundry of the   )
           Kuparuk River Unit.                              )

                                                                                    April 24, 1998

IT APPEARING THAT:

1. ARCO Alaska, Inc. submitted an application dated April 3, 1998 requesting exception to the well spacing provisions of 20 AAC 25.055(a)(3) to allow drilling the ARCO KRU 2N-329 development oil well to a location within 500 feet of a quarter section line, and just outside the western boundry of the Kuparuk River Unit.

2. The Commission published notice of opportunity for public hearing in the Anchorage Daily News on April 9, 1998 pursuant to 20 AAC 25.540.

3. No protests to the application were received. FINDINGS: 1. The KRU 2N-329 oil development well will be drilled as a deviated hole with a surface location 89 feet from the north line and 880 feet from the east line of Section 3, T9N R7E, Umiat Meridian (UM) to a bottomhole location 805 feet from the south line and 2497 feet from the west line of Section 33 T10N R7E, UM.

2. Offset owners BP Exploration (Alaska), Inc., Chevron USA Inc., Mobil Oil Corporation and the State of Alaska have been duly notified.

3. An exception to the well spacing provisions of 20 AAC 25.055 (3) is necessary to allow the drilling of this well.

CONCLUSION:

Granting a spacing exception to allow drilling of the ARCO KRU 2N-329 development well will not result in waste nor jeopardize correlative rights.

NOW, THEREFORE, IT IS ORDERED:

ARCO Alaska, Inc.'s application for exception to the well spacing provisions of 20 AAC 25.055(a)(3) for the purpose of drilling the KRU 2N-329 well is approved.

DONE at Anchorage, Alaska and dated April 24, 1998.

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

__________________________________________
Cammy Oechsli, Commissioner
Alaska Oil and Gas Conservation Commission

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