STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

333 West Seventh Avenue, Suite 100

Anchorage Alaska 99501

Re:

THE APPLICATION OF Union Oil Company of California (“UNOCAL”) for an order granting an exception to the spacing requirements of 20 AAC 25.055 (a)(2) to provide for the drilling and production of the Swanson River Unit 241-16 gas development well.

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Conservation Order No. 522.000

Swanson River Unit 241-16
Drilling and Production

July 20, 2004

IT APPEARING THAT:

1. Union Oil Company of California (UNOCAL) submitted an application dated May 27, 2004 requesting exception to the well spacing provisions of Title 20 AAC 25.055(a)(2) to allow drilling the Swanson River Unit (SRU) 241-16 gas development well to a location that is within 1500 feet of a property line between two landowners;

2. Notice of opportunity for public hearing was published in the Anchorage Daily News on June 1, 2004 pursuant to 20 AAC 25.540; and

3. No protests to the application or requests for hearing were received.

FINDINGS:

1. The SRU 241-16 gas development well is proposed to be deviated with a surface location 985 feet from the west line and 2219 feet from the north line of Section 15, T8N R9W, Seward Meridian (SM) and a bottomhole location 565 feet from the east line and 1214 feet from the north line of Section 16, T8N R9W, SM.

2. The proposed producing interval of the SRU 241-16 well would be located in lease A-028077 with the Bureau of Land Management as landowner and 475 feet from its boundary with lease A-028406, of which Cook Inlet Region, Inc. is landowner.

3. Offset landowners, owners and operators within 3,000 feet of the anticipated producing interval of the SRU 241-16 well have all been notified.

4. The location of the SRU 241-16 well was selected as a favorable structural position for recovery of undefined Tyonek Formation gas reserves that can not be efficiently recovered from a non exception location.

5. An exception to the well spacing provisions of Title 20 AAC 25.055 (a)(2) is necessary to allow the drilling of the SRU 241-16 gas development well.

CONCLUSIONS:

Granting a spacing exception to allow drilling and production of the SRU 241-16 gas development well will not result in waste or jeopardize the correlative rights of adjoining or nearby owners, landowners and operators.

NOW, THEREFORE, IT IS ORDERED:

UNOCAL’s application for exception to the well spacing provision of 20 AAC 25.055(a)(2) for the purpose of drilling and producing SRU 241-16 gas development well is approved.

By Order of the Commission at Anchorage, Alaska, this 20th day July 2004.

John K. Norman, Chair
Alaska Oil and Gas Conservation Commission

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


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