STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

333 West Seventh Avenue, Suite 100

Anchorage Alaska 99501

ADMINISTRATIVE APPROVAL NO. DIO 26.002

Re: Request to Increase Injection Rate in Kustatan Field Well #1

Mr. Ted Kramer
Production Manager – Alaska Division
Forest Oil Corporation
310 K Street, Suite 700
Anchorage, AK 99501

Dear Mr. Kramer:

By letter dated September 30, 2003, Forest Oil Corporation (“Forest”) requested authorization to increase the injection rate in Kustatan Field Well No. 1 (“KF 1”). The subject well is a Class II disposal well supporting production from the Osprey platform. An earlier Administrative Approval (DIO 26-001) was granted August 15, 2003 to add shallower disposal perforations in order to accommodate the produced water volume from Osprey Platform.

Disposal injection into the well was limited to 2 barrels per minute (bpm) until Forest had performed a step rate test and acquired a temperature survey within 30 days of initiating injection into the new perforated intervals. Forest has complied with the requirements of DIO 26-001.

Review of the temperature log information provided by Forest indicates that the injected fluids appear to be satisfactorily contained in the formations accessed by the new perforations. An analysis of the step rate test data does not indicate that a fracture propogates as the injection rate is increased from 2 to beyond 3 bpm.

Based on information provided by Forest, and the analyses of it, the Commission approves Forest’s request to increase the injection rate. This approval is subject to the following conditions:

1. The allowable injection rate is increased to 3 bpm.
2. In order to further investigate confinement with the perforated intervals, Forest must perform a warm-back temperature survey within 60 days of increasing the injection rate.
3. Forest should contact the Commission with the proposed logging procedure prior to performing the survey.

DONE at Anchorage, Alaska and dated October 10, 2003.

Sarah Palin
Chair

Daniel T. Seamount, Jr.
Commissioner

Randy Ruedrich
Commissioner

BY ORDER OF THE COMMISSION

Disposal Injection Order Index