STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive

Anchorage Alaska 99501-3192

Re:THE APPLICATION OF ARCO Alaska, Inc.             )  Conservation Order No. 439
for an order granting an exception to the spacing   )
requirements of 20 AAC 25.055(a)(1) to              )
provide for the drilling of the Meltwater           )  Meltwater South #1
South #1 exploratory oil.                           )
                                                       January 12, 1999
IT APPEARING THAT:

1. ARCO Alaska, Inc. (AAI) by letter dated December 2, 1998, requested an exception to the well spacing provisions of 20 AAC 25.055(a)(1). The exception would allow drilling the Meltwater South #1 exploratory oil well to a bottomhole location that is closer than 500 feet to a quarter section line.

2. The Commission published notice of opportunity for public hearing in the Anchorage Daily News on December 5, 1998 pursuant to 20 AAC 25.540.

3. No protests to the application were received.

4. AAI in a letter dated January 11, 1999 made a minor revision to the surface and bottomhole locations of the well.

FINDINGS:

1. The Meltwater South #1 exploratory oil well will be drilled as a deviated hole from a surface location of 1112' from the north line, 2605' from the west line of Section 33, T7N, R7E, Umiat Meridian (UM) to a bottomhole location 113' from the south line, 884' from the east line, Section 32, T7N, R7E, UM.

2. Offset landowner the State of Alaska, Department of Natural Resources has been duly notified. AAI is the owner of all offsetting governmental quarter sections.

3. An exception to the well spacing provisions of 20 AAC 25.055(a)(1) is necessary to allow the drilling of this well.

CONCLUSION:

Granting a spacing exception to allow drilling of the Meltwater South #1 exploratory oil well will not result in waste nor jeopardize correlative rights.

NOW, THEREFORE, IT IS ORDERED:

AAI's application for exception to the well spacing provisions of 20 AAC 25.055(a)(1) for the purpose of drilling the Meltwater South #1 exploratory oil well is approved.

DONE at Anchorage, Alaska and dated January 12, 1999.

Robert N. Christenson, P. E., Chairman
Alaska Oil and Gas Conservation Commission

Camillé Oechsli, Commissioner
Alaska Oil and Gas Conservation Commission

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

Conservation Order Index