STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

333 West Seventh Avenue, Suite 100

Anchorage Alaska 99501

Re:

THE APPLICATION OF Marathon Oil Company (“Marathon”) for an order granting an exception to the spacing requirements of 20 AAC 25.055(a)(2) to provide for the drilling and testing of the Susan Dionne #2 exploratory well to an undefined gas pool.

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Conservation Order No. 465

Susan Dionne #2
Exploratory Well

February 14, 2002

IT APPEARING THAT:

1. Marathon Oil Company ("Marathon") by letter dated December 13, 2001, and received by the Commission on January 9, 2002, requested an exception to the well spacing provisions of 20 AAC 25.055(a)(2). The exception would allow the proposed Susan Dionne #2 exploratory well to be drilled and test produced at a bottom hole location that is closer than 1,500 feet to a property line where ownership changes.

2. The Commission published notice of opportunity for public hearing in the Anchorage Daily News on January 15, 2002, pursuant to 20 AAC 25.540.

3. No protests to the application were received.

FINDINGS:

1. The Susan Dionne #2 well will be drilled as a directional hole from a surface location 110 feet from the south line (FSL), 1,450 feet from the east line (FEL) of Section 6, T1S, R13W, Seward Meridian (SM) to a bottomhole location of 564 feet FSL and 2,150 feet FEL of Section 32, T1N, R13W, SM.

2. An exception to the well spacing provisions of 20 AAC 25.055 (a)(2) is necessary for the drilling of this well.

CONCLUSIONS:

1. Granting a spacing exception to allow drilling and testing of the Susan Dionne #2 well promotes efficient development and will not result in waste.

2. Marathon’s application for exception to the well spacing provisions of 20 AAC 25.055 (a)(2) for the purpose of drilling and testing the Susan Dionne #2 well is approved.

3. Granting this spacing exception is reasonably necessary to provide Marathon with an opportunity to establish the volume of gas reserves in the general area.

NOW, THEREFORE, IT IS ORDERED

Marathon's application for exception to the well spacing provisions of 20 AAC 25.055 (a)(2) for the purpose of drilling and testing the Susan Dionne #2 well is approved. If the well proves capable of hydrocarbon production, regular production will not be permitted until the Commission establishes a drilling unit for the pool and issues an order integrating the interests of owners within the drilling unit, absent voluntary integration by the owners.

DONE at Anchorage, Alaska and dated February 14, 2002.

Cammy Oechsli Taylor, Chair
Alaska Oil and Gas Conservation Commission

Daniel T. Seamount, Jr., Commissioner
Alaska Oil and Gas Conservation Commission

Julie M. Heusser, Commissioner
Alaska Oil and Gas Conservation Commission


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