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Home My WebLink AboutCO 609Ima Pr®'~ect t~r~ler Fil C e ®ver f~aae XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct ins ection of the file. Order Fil ® ~, e Identifier Organizing (aone> RES AN Color Items: ^ Greyscale Items: ^ Poor Quality Originals: ^ Other: NOTES: BY: Maria Project Proofing BY: Maria Scanning Preparation BY: aria .wo-,aea Illilllllilllfll!I , Re.~~„ee,e, IIIIIIIIIVIillllll DIGITAL DATA OVERSIZED (Scannable) ^ Diskettes, No. ^ M/aps: ^ Other, No/Type: A ~yOther Items Scannable by v/ a Large Scanner ~ X N ~ ~j ~ 'r OVERSIZED (Non-Scannable) ^ Logs of various kinds: ^ Other:: Date: ~ a-- /s/ Date: 1 Isl x30= + Date: = TOTAL PAGES (Count does not include cover sheet) , / /sl Production Scanning Stage 7 Page Count from Scanned File: ~ (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: V YES NO BY: Maria Date: 1 ~..,I'~ D ~ lsl ~^ / ~ ~~ Stage 7 If NO in stage 1, page(s) discrepancies were found: YES NO BY: Maria Date: /s/ Scanning is complete at this point unless rescanning is required. III II'I II IIf ~I I I ~II ReScanned BY: Maria Date: /s/ Comments about this file: o~a„~~,~kea Illlilllllllilllltl 10/6/2005 Orders File Cover Page.doc ~~ INDEX CONSERVATION ORDER NO. 609 Beaver Creek #19 1) June 13, 2008 Marathon's request for a Spacing Exception BC-19 2) June 19, 2008 Notice of Hearing, affidavit of mailing, a-mail list, bulk mailing list CONSERVATION ORDER NO. 609 • :7 FILE CHECKED FOR CONFIDENTIALITY MATERIALS 11/24/2008 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 for an order granting exceptions to the well spacing requirements of 20 AAC 25.055(a)(2) and 25.055(a)(4) to allow drilling, completion, testing, and regular production of the proposed Beaver Creek Unit No.19 gas development well, which would be within 1,500 feet of a property line where the owner is not the same and the landowner is not the same on both sides of the line, would be drilled to and completed in a pool on a governmental section with other wells that have been drilled to and completed in the same pool, and would be within 3,000 feet of other wells in the Beaver Creek Unit that are producing from or capable of producing from the same pool. Conservation Order No. 609 Docket No. 08-33 Beaver Creek Unit # 19 Gas Development Well November 24, 2008 NOTICE CLOSING DOCKET BY THE COMMISSION: The Commission has the closed the Docket in the above captioned matter. ENTERED AND EFFECTIVE at Anchorage, Alaska and this 24th day of November, 2008. BY DIRECTION OF THE COMMISSION • 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 for an order granting exceptions to the well spacing requirements of 20 AAC 25.055(a)(2) and 25.055(a)(4) to allow drilling, completion, testing, and regular production of the proposed Beaver Creek Unit No.19 gas development well, which would be within 1,500 feet of a property line where the owner is not the same and the landowner is not the same on both sides of the line, would be drilled to and completed in a pool on a governmental section with other wells that have been drilled to and completed in the same pool, and would be within 3,000 feet of other wells in the Beaver Creek Unit that are producing from or capable of producing from the same pool. Conservation Order No. 609 Docket No. 08-33 Beaver Creek Unit # 19 Gas Development Well November 24, 2008 IT APPEARING THAT: Marathon Oil Company (MOC), by letter dated June 13, 2008, and received that same day by the Alaska Oil and Gas Conservation Commission (Commission), requests an order providing for an exception to the well spacing requirements of 20 AAC 25.055(a)(2) and 25.005(a)(4) to allow drilling, completion, testing, and regular production of the proposed Beaver Creek Unit No. 19 gas development well (BC-19 well) in the Beaver Creek Unit, Beluga /Upper Tyonek Participating Area, Kenai Peninsula Borough, Alaska.' 2. On June 19, 2008, pursuant to 20 AAC 25.540, the Commission published in the ANCHORAGE DAILY NEWS notice of the opportunity for a public hearing on July 29, 2008. 3. No comment on or protest to the application or request for a hearing was received.. 4. The public hearing was vacated on July 15, 2008. FINDINGS: MOC is the operator of the Beaver Creek Unit and will be the operator of the BC-19 well, which will be within the Beaver Creek Unit, Beluga /Upper Tyonek Participating Area, Kenai Peninsula Borough, Alaska. 2. The BC-19 well is proposed as a deviated gas delineation well with a surface location 1,200 feet from the north line (FNL) and 1658 feet from the west line (FWL) of Section 34, T7N, R10W, ~ MOC's application expressly references only 20 AAC 25.055(a)(4). Because an exception to 20 AAC 25.055(a)(2) is also required for the proposed BC-19 well, the Commission is treating the application as a request for an exception to that provision, as well. • • Seward Meridian (S.M.); the projected bottom hole location is 2,740 feet FNL and 1,175 feet FWL of Section 34, T7N, R10W, S.M. 3. The BC-19 well will target the gas reservoir that can be discontinuous in the Lower Beluga Formation. 4. The BC-19 well will be within 1,500 feet of a property line where the owner is not the same and the landowner is not the same on both sides. 5. The BC-lA, BC-12, and BC-13 wells are on the same governmental section as the proposed BC-19 well and have been drilled to and completed in the same pool that the proposed BC-19 well will be drilled to and completed in. 6. The BC-19 well will be within 3,000 feet of the BC-lA, BC-10, BC-11, BC-12, BC-13, and BC- 16RD wells, which are also within the Beaver Creek Unit, Beluga /Upper Tyonek Participating Area and produce from the Lower Beluga Formation and penetrate Upper Beluga and Sterling Formation sands that are capable of producing gas. 7. The BC-14 well penetrates the Beluga and Sterling Formations, but is not productive in the Lower Beluga. 8. The BC-4, BC-5, and BC-6 wells are within 3,000 feet of the BC-19 well, but produce oil from the Tyonek Formation or are productive for gas in the Sterling Formation; these wells will not be drilled to and completed in the Lower Beluga Formation. 9. The BC-9 is a dual completion well in the Sterling Formation (BC-9S) and the Lower Beluga Formation (BC-9L). After adding perforations in the Upper Beluga, water from the Upper Beluga covered the Lower Beluga performations, damaging the Lower Beluga formation, and all Lower Beluga gas production ceased. The formation damage in the Lower Beluga cannot be economically remediated. 10. The BC-19 well will produce gas from the Lower Beluga; if the well is not drilled and completed, that gas will be left behind because of the failure of the BC-9L completion. 11. By certified mail, MOC sent notice of the application for an order granting an exception to the well spacing requirements of 20 AAC 25.055 to all owners, landowners, and operators of all properties within 3,000 feet of the anticipated productive intervals of the proposed BC-19 well. CONCLUSIONS: 1. Exceptions to the requirements of 20 AAC 25.055(a)(2) and 25.055(a)(4) are necessary to allow drilling, completion, testing, and regular production of the BC-19 well. This well is needed to recover gas reserves-i. e., from Lower Beluga Formation reservoir-that will otherwise be left behind because of the failure of the BC-9L well completion. 2. Granting a spacing exception to allow drilling, completion, testing, and regular production of the BC- 19well will not result in waste or jeopardize the correlative rights of adjoining or nearby owners. Conservation Order No. 609 Effective November 24, 2008 Page 2 of 3 NOW, THEREFORE, IT IS ORDERED: The Commission grants MOC's application for exceptions to the well spacing requirements of 20 AAC 25.055(a)(2) and 25.055(a)(4) to allow drilling, completion, testing, and regular production of the BC-19 well. Because the properties affected by this spacing exception are wholly within the Beaver Creek Unit, Beluga /Tyonek Participating Area, MOC may proceed with regular production as long as it complies with the Beaver Creek Unit, Beluga /Tyonek Participating Area agreements and all other legal requirements. ENTERED at Anchorage, Alaska, and dated N .~ c ,~;~~ .; ~~ _ ~~-r~~. <~ ~ v ~~ h !ti~"~~ „. ~' ~~ , ,~. ram -•~9~,, . ~. ~~~~.. Gas Conservation Commission Cathy P. F rster, Commissioner Alaska Oil and Gas Conservation Commission RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The Commission shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10-days is a denial of reconsideration. If the Commission denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the Commission grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the Commission, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision on reconsideration. As provided in AS 31.05.080(b), "[t]he questions reviewed on appeal aze limited to the questions presented to the Commission by the application for reconsideration." In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Conservation Order No. 609 Effective November 24, 2008 Page 3 of 3 . Page 1 of 1 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Monday, November 24, 2008 9:53 AM Subject: co 609 Beaver Creek #19 Spacing Exception Attachments: co609.pdf BCC:'Aaron Gluzman'; caunderwood@marathonoil.com; 'Dale Hoffman'; Fridiric Grenier; 'Joe Longo'; 'Lamont Frazer'; Marc Kuck; 'Mary Aschoff; Maurizio Grandi; P Bates; Richard Garrard; 'Sandra Lemke'; 'Scott Nash'; 'Steve Virant'; Tom Gennings; 'Willem Vollenbrock'; 'William Van Dyke'; Woolf, Wendy C (DNR); 'Aleutians East Borough'; 'Anna Raff ; 'Barbara F Fullmer'; 'bbritch'; 'Bill Walker'; 'Brad McKim'; 'Brandon Gagnon'; 'Brian Gillespie'; 'Brian Havelock'; 'Brit Lively'; 'Bruce Webb'; 'buonoje'; 'Cammy Taylor'; 'Cande.Brandow'; 'carol Smyth'; 'Cary Carrigan'; 'Charles O'Donnell'; 'Chris Gay'; 'Cliff Posey'; 'Dan Bross'; 'dapa'; 'Daryl J. Kleppin'; 'David Brown'; 'David Hall'; David House; 'David L Boelens'; 'David Steingreaber'; 'ddonkel'; 'Deborah J. Jones'; 'doug_schultze'; 'Eric Lidj i '; 'Evan Harness'; 'eyancy'; 'foms2@mtaonline.net'; 'Francis S. Sommer'; 'Fred Steece'; 'Garland Robinson'; 'Gary Laughlin'; 'Gary Rogers'; 'Gary Schultz'; 'ghammons'; 'Gordon Pospisil'; 'Gregg Nady'; 'gregory micallef ; 'gspfoff ; 'Hank Alford'; 'Harry Engel'; 'jah'; 'James Scherr'; 'Janet D. Platt'; 'jejones'; 'Jerry McCutcheon'; 'Jim Arlington'; 'Jim White'; 'Jim Winegarner'; 'Joe Nicks'; 'John Garing'; 'John S. Haworth'; 'John Spain'; 'John Tower'; 'John W Katz'; johnny.aiken@north-slope.org; 'Jon Goltz'; 'Julie Houle'; 'Kari Moriarty'; 'Kaynell Zeman'; 'Keith Wiles'; knelson@petroleumnews.com; 'Krissell Crandall'; 'Kristin Dirks'; 'Laura Silliphant'; 'Lois'; 'Lynnda Kahn'; 'mail=akpratts@acsalaska.net'; 'mail=fours@mtaonline.net'; 'Marilyn Crockett'; 'Mark Dalton'; 'Mark Hanley'; 'Mark Kovac'; 'Mark P. Worcester'; 'Marguerite kremer'; 'Matt Rader'; Melanie Brown; 'Mike Bill'; 'Mike Mason'; 'Mikel Schultz'; 'Mindy Lewis'; 'MJ Loveland'; 'mjnelson'; 'mkm7200'; 'Nick W. Glover'; NSK Problem Well Supv; NSU, ADW Well Integrity Engineer; 'Patty Alfaro'; 'Paul Decker'; 'Paul Winslow'; Pierce, Sandra M (DNR); 'Randall Kanady'; 'Randy L. Skillern'; 'rcrotty'; Rice, Cody J (DNR); 'rmclean'; 'Rob McWhorter '; rob.g.dragnich@exxonmobil.com; 'Robert Campbell'; 'Robert Fowler'; 'Robert Province'; 'Roger Belman'; 'Rudy Brueggeman'; 'Scott Cranswick'; 'Shannon Donnelly'; 'Sharmaine Copeland'; 'Sondra Stewman'; 'Sonja Frankllin'; 'Stan Porhola'; 'stanekj'; 'Steve Lambert'; 'Steve Moothart'; 'Steven R. Rossberg'; 'tablerk'; 'Tamera Sheffield'; 'Temple Davidson'; 'Terrie Hubble'; 'Tim Lawlor'; 'Todd Durkee'; Tony Hopfinger; 'trmjrl'; 'Walter Featherly'; 'Walter Quay'; 'Wayne Rancier'; Birnbaum, Alan J (LAW); Crisp, John H (DOA); Davies, Stephen F (DOA); Fleckenstein, Robert J (DOA); Foerster, Catherine P (DOA); Grimaldi, Louis R (DOA); Johnson, Elaine M (DOA); Jones, Jeffery B (DOA); Laasch, Linda K (DOA); Mahnken, Christine R (DOA); Maunder, Thomas E (DOA); McIver, C (DOA); McMains, Stephen E (DOA); Noble, Robert C (DOA); Norman, John K (DOA); Okland, Howard D (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Saltmarsh, Arthur C (DOA); Scheve, Charles M (DOA); Seamount, Dan T (DOA); Smith, Chasity R (DOA); Williamson, Mary J (DOA) Attachments:co609.pdf; Jody J. Colombie Special Assistant to the Commission Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 (907) 793-1221 Direct Line (907) 276-7542 Fax 11 /24/2008 Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 Soldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 North Slope Borough PO Box 69 Barrow. AK 99723 David McCaleb Cindi Walker IHS Energy Group Tesoro Refining and Marketing Co. GEPS Supply & Distribution 5333 Westheimer, Ste 100 300 Concord Plaza Drive Houston, TX 77056 San Antonio, TX 78216 Jerry Hodgden Richard Neahring Hodgden Oil Company NRG Associates 408 18th Street President Golden, CO 80401-2433 PO Box 1655 Colorado Springs, CO 80901 Schlumberger Ciri Drilling and Measurements Land Department 2525 Gambell Street #400 PO Box 93330 Anchorage, AK 99503 Anchorage, AK 99503 Ivan Gillian Jill Schneider 9649 Musket Bell Cr.#5 US Geological Survey Anchorage, AK 99507 4200 University Dr. Anchorage, AK 99508 Jack Hakkila Darwin Waldsmith PO Box 190083 PO Box 39309 Anchorage, AK 99519 Ninilchick, AK 99639 Kenai National Wildlife Refuge Penny Vadla Refuge Manager 399 West Riverview Avenue PO Box 2139 Soldotna, AK 99669-7714 Soldotna, AK 99669-2139 Cliff Burglin Bernie Karl PO Box 70131 K&K Recycling Inc. Fairbanks, AK 99707 PO Box 58055 Fairbanks, AK 99711 //~~~ed ,~ !//Z `~/P -.LLo% �'Wz i STATE OF ALASKA s NOTICE TO PUBLISHER ADVERTISING ORDER NO. ADVERTISING ORDER INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE A O_02814054 /'1 SEE BOTTOM FOR INVOICE ADDRESS F R AQGCC 333 W 7th Ave, Ste 100 AGENCY CONTACT Jod Colombie DATE OF A.O. June 18 2008 ° M Anchorage, AK 99501 907-793-1238 PHONE - PcN DATES ADVERTISEMENT REQUIRED: o Anchorage Daily News PO Box 149001 Anchora e AK 99514 g ~ June 19, 2008 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED tN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed Type of Advertisement Legal® ^ Display Classif ied ^Other (Specify) SEE ATTACHED SEND INVOICE IN TRIPLICATE TO AOGCC, 333 W. 7th Ave., Suite 100 Anchors e AK 99501 PAGE 1 OF 2 PAGES TOTAL OF ALL PAGES$ REF TYPE NUMBER AMOUNT DATE COMMENTS 1 VEN z Aim 0291 0 FIN AMOUNT SY CC PGM LC ACCT FY NMR DIST LIQ ~ 08 02140100 73451 2 REQUISITION BY: r ~' I s ~~' ~ DIVISION APPROVAL: 02-902 (Rev. 3/94 Publisher/Original Copies: Department Fiscal, Department, Receiving AO.FRM • ~ Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of Marathon Oil Company for an exception to the spacing requirements of 20 AAC 25.055(a)(4), for the drilling, completion and regular production of a development gas well, within 3000 feet of wells capable of producing from the same interval. Marathon Oil Company (MOC), by a letter dated and received June 13, 2008, requests the Alaska Oil and Gas Conservation Commission (Commission) issue an order for an exception to the spacing requirements of 20 AAC 25.055(a)(4) to drill the Beaver Creek No. 19 development gas well in the Beaver Creek Unit, Beluga /Upper Tyonek Participating Area, within 3000 feet of wells capable of producing from the same interval. The proposed surface and bottomhole location of the well is as follows: Beaver Creek No. 19 Surface Location: 1200 feet from the north line (FNL) and 1658 feet from the west line (FWL) of Section 34, T7N, R1 OW, Seward Meridian (S.M.). Bottomhole Location: 2740' (FNL) and 1175' (FWL), of Section 34, T7N, R10W, S.M. The Commission has tentatively scheduled a public hearing on this application for July 29, 2008 at 9:00 a.m. at the Alaska Oil and Gas Conservation Commission, at 333 West 7tn Avenue, Suite 100, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the Commission no later than 4:30 p.m. on July 7, 2008. If a request for a hearing is not timely filed, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold the hearing, call 793-1221 after July 10, 2008. In addition, written comments regarding this application may be submitted to the Alaska Oil and Gas Conservation Commission, at 333 West 7tn Avenue, Suite 100, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on July 21, 2008, except that, if a hearing is held, comments must be received no later than the conclusion of the July 29, 2008 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the Commission's Special Assista ,Jody Colombie, at 793-1221, no later than July 23, 2008. °~~ . . Daniel T eamount, Jr. Chair • Anchorage Daily News Affidavit of Publication 1001 Northway Drive, Anchorage, AK 99508 PRICE OTHER AD # DATE PO ACCOUNT PER DAY CHARGES 505229 06/19/2008 -02814054 STOF0330 $222.44 $222.44 $0.00 STATE OF ALASKA THIRD JUDICIAL DISTRICT Christine Clark, being first duly sworn on oath deposes and says that she is an advertising representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on the above dates and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Lt~i,4rE( fft' R.~ . . ~,. ~ . r v .,i y ~~L~~ r ~.Z.i~~ www ~ ~ ~~ ~,,~ .; -f;: ,~, f j. r F r OTHER OTHER OTHER OTHER GRAND CHARGES #2 CHARGES #3 CHARGES #4 CHARGES #5 TOTAL $0.00 $0.00 $0.00 $0.00 $222.44 Notice of Public Hearing STATE OF Ai.ASKA r Alaska Oil pnd Gas Conservation Canmiesiipn Re: The application Of Marathon Ail Company for an exception to the spacing requirements of 20 AAC 25.055(a)(4), for the drilling, completion and regular roduction of a development gas well, within 3000 ' feet of wehs capable of producing from the same interval. Marathon oil Company (MOC}, by a letter dated and recaivedfJttne 13, 2008,. requests the Alaska Oil and Gas Conservation Commission (COmmiss)on) issue an order for an exce ion to the spacing requirements of 20 AAC 25:055(a (4) to drill tfpie Beaver Creek No: 19 development gas well in the Beaver Creek. Unit, Beluga /Upper Tyonek ., Participating Area; within 3000 feet of wells; capable of producinS from the same interval: The pr used surface and bottomhole location of the well is as follows: Beaver Creek N0. 19 Surtace location: 1200 feet from the north line (PNL} and 1658 feet from the west line (FWrJ Of Section 34, T7N, R10W, Seward Meridian (S.MJ. , Bottomhole location: 2740' (FNL) and 1175' (FWU, of Section34, T7N, R10W; S.M. The Commission has tentatively scheduled a , public hearing on this appACatiat for July 29, 200g at 9:00 a.m..at the Alaska Oil and. Gas Conservation Commission, at 333 West 7th Avenue; Sraite 100, ' Anchora8e, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filedwith the Commrssromno later than 4:30 p.m: on July 7, 2008. I(a request for a hearing is not timery filed, d1e Commrssion may consider the issuance of an order without a hearing. To learn if the Commiss)on will hold the hearing, Cat1793-1'221 after Juiy 10, X008. In addition, written comments regarding this application may be submitted to the Alaska Oil and Gas Conservation Commission, at 333 west 7th Avenue, Suite 100, Anchorage, Alaska 99501: Comments must be received no later than 4:30 p.m. pn July 21; 2008, except that, if a hearthg is held, comments must be 7eceivetl no later Phan the conclusion of the July,29, 2008 hearing. , If, because of a disability, special accommodations maybe needed to comment Or attend the hearing, contact the Commission's Special Assistant, Jody Colombie, at 793-1221, no laterthan July 23, 2008. DenieL T: Seamount, Jr: Chair AO-02814054 Published: June 19, 2008 Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska MY COMMISSION EXPIR S: /~`) _ . ~~ ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED /~ 0_02814054 ` ORDER AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF 1 / ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE SEE`BOTTOM FOR INVOICE ADDRESS F AO~rCC AGENCY CONTACT DATE OF A.O. R 333 West 7th Avenue. Suite 100 ° Anch~rage_ AK 9951 PHONE PCN M 907-793-1238 - DATES ADVERTISEMENT REQUIRED: o Anchorage Daily News June 19 2008 , PO Box 149001 An h ra e AK 99S 14 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN c o g ~ ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Account # STOF0330 AFFIDAVIT OF PUBLICATION United states ofAmerica REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. division. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. Before me, the undersigned, a notary public this day personally appeared ATTACH PROOF OF PUBLICATION HERE. who, being first duly sworn, according to law, says that he/she is the of Published at in said division and state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2008, and thereafter for consecutive days, the last publication appearing on the day of , 2008, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This day of 2008, Notary public for state of My commission expires • Mary Jones David McCaleb Cindi Walker XTO Energy, Inc. IHS Energy Group Tesoro Refining and Marketing Co. Cartography GEPS Supply & Distribution 810 Houston Street, Ste 2000 5333 Westheimer, Ste 100 300 Concord Plaza Drive Ft. Worth, TX 76102-6298 Houston, TX 77056 San Antonio, TX 78216 George Vaught, Jr. Jerry Hodgden Richard Neahring PO Box 13557 Hodgden Oil Company NRG Associates Denver, CO 80201-3557 408 18th Street President Golden, CO 80401-2433 PO Box 1655 Colorado Springs, CO 80901 John Levorsen Mark Wedman Baker Oil Tools 200 North 3rd Street, #1202 Halliburton 4730 Business Park Blvd., #44 Boise, ID 83702 6900 Arctic Blvd. Anchorage, AK 99503 Anchorage, AK 99502 Schlumberger Ciri Ivan Gillian Drilling and Measurements Land Department 9649 Musket Bell Cr.#5 2525 Gambell Street #400 PO Box 93330 Anchorage, AK 99507 Anchorage, AK 99503 Anchorage, AK 99503 Jill Schneider Gordon Severson Jack Hakkila US Geological Survey 3201 Westmar Cr. PO Box 190083 4200 University Dr. Anchorage, AK 99508-4336 Anchorage, AK 99519 Anchorage, AK 99508 Darwin Waldsmith James Gibbs Kenai National Wildlife Refuge PO Box 39309 PO Box 1597 Refuge Manager Ninilchick, AK 99639 Soldotna, AK 99669 PO Box 2139 Soldotna, AK 99669-2139 Penny Vadla Richard Wagner Cliff Burglin 399 West Riverview Avenue PO Box 60868 PO Box 70131 Soldotna, AK 99669-7714 Fairbanks, AK 99706 Fairbanks, AK 99707 Bernie Karl North Slope Borough Williams Thomas K&K Recycling Inc. PO Box 69 Arctic Slope Regional Corporation PO Box 58055 Barrow, AK 99723 Land Department Fairbanks, AK 99711 PO Box 129 Barrow. AK 99723 /7~a,~ c/ Page 1 of 1 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Wednesday, June 18, 2008 12:15 PM Subject: Beaver Creek #19 Spacing Exception Public Notice Attachments: BCU_19 Spacing Exception.pdf BCC:'Aleutians East Borough'; 'Anna Raff; Arion, Teri A (DNR); 'Arthur Copoulos'; 'Barbara F Fullmer'; 'bbritch'; 'Bill Walker'; 'Brad McKim'; 'Brandon Gagnon'; 'Brian Gillespie'; 'Brian Havelock'; 'Brit Lively'; 'Bruce Webb'; 'buonoje'; 'Cammy Taylor'; 'Cande.Brandow'; 'carol Smyth'; 'Cary Carrigan'; caunderwood@marathonoil.com; 'Charles O'Donnell'; 'Chris Gay'; 'Christian Gou-Leonhardt'; 'Cliff Posey'; 'Dan Bross'; 'dapa'; 'Daryl J. Kleppin'; 'David Brown'; 'David Hall'; David House; 'David L Boelens'; 'David Steingreaber'; 'ddonkel'; 'Deborah J. Jones'; 'doug_schultze'; 'Eric Lidji '; 'Evan Harness'; 'eyancy'; 'foms2@mtaonline.net'; 'Francis S. Sommer'; 'Fred Steece'; 'Garland Robinson'; 'Gary Laughlin'; 'Gary Rogers'; 'Gary Schultz'; 'ghammons'; 'Gordon Pospisil'; Gould, Greg M (DEC); 'Gregg Nady'; 'gregory micallef ; 'gspfoff ; 'Hank Alford'; 'Harry Engel'; 'jah'; 'James Scherr'; 'Janet D. Platt'; 'jejones'; 'Jerry McCutcheon'; 'Jim Arlington'; 'Jim White'; 'Jim Winegarner'; 'Joe Nicks'; 'John Garing'; 'John S. Haworth'; 'John Spain'; 'John Tower'; 'John W Katz'; johnny.aiken@north-slope.org; 'Jon Goltz'; 'Julie Houle'; 'Kari Moriarty'; 'Kaynell Zeman'; 'Keith Wiles'; knelson@petroleumnews.com; 'Krissell Crandall'; 'Kristin Dirks'; 'Laura Silliphant'; 'Lois'; 'Lynnda Kahn'; 'mail=akpratts@acsalaska.net'; 'mail=fours@mtaonline.net'; 'Marilyn Crockett'; 'Mark Dalton'; 'Mark Hanley'; 'Mark Kovac'; 'Mark P. Worcester'; 'Marguerite kremer'; 'marty'r 'Matt Rader"; 'Meghan Powell'; Melanie Brown; 'Mike Bill'; 'Mike Mason'; 'Mikel Schultz'; 'Mindy Lewis'; 'MJ Loveland'; 'mjnelson'; 'mkm7200'; 'Nick W. Glover'; NSK Problem Well Supv; NSU, ADW Well Integrity Engineer; 'Patty Alfaro'; 'Paul Decker'; 'Paul Winslow'; Pierce, Sandra M (DNR); 'Randall Kanady'; 'Randy L. Skillern'; 'rcrotty'; Rice, Cody J (DNR); 'rmclean'; 'Rob McWhorter '; rob.g.dragnich@exxonmobil.com; 'Robert Campbell'; 'Robert Fowler'; 'Robert Province'; 'Roger Belman'; 'Rudy Brueggeman'; 'Scott Cranswick'; 'Shannon Donnelly'; 'Sharmaine Copeland'; 'Sondra Stewman'; 'Sonja Frankllin'; 'Stan Porhola'; 'stanekj'; 'Steve Lambert'; 'Steve Moothart'; 'Steven R. Rossberg'; 'tablerk'; 'Tamera Sheffield'; 'Temple Davidson'; 'Terrie Hubble'; 'Tim Lawlor'; 'Todd Durkee'; Tony Hopfinger; 'trmjrl'; 'Walter Featherly'; 'Walter Quay'; 'Wayne Rancier'; 'Dale Hoffman'; Fridiric Grenier; Joseph Longo; Maurizio Grandi; Tom Gennings; 'Willem Vollenbrock'; Birnbaum, Alan J (LAW); Crisp, John H (DOA); Davies, Stephen F (DOA); Fleckenstein, Robert J (DOA); Foerster, Catherine P (DOA); Grimaldi, Louis R (DOA); Johnson, Elaine M (DOA); Jones, Jeffery B (DOA); Laasch, Linda K (DOA); Mahnken, Christine R (DOA); Maunder, Thomas E (DOA); McIver, C (DOA); McMains, Stephen E (DOA); Noble, Robert C (DOA); Norman, John K (DOA); Okland, Howard D (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA}; Roby, David S (DOA); Saltmarsh, Arthur C (DOA); Scheve, Charles M (DOA); Seamount, Dan T (DOA); Smith, Chasity R (DOA); Williamson, Mary J (DOA) Attachments:BCU_19 Spacing Exception.pdf; 6/19/2008 Page 1 of 1 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Wednesday, June 18, 2008 12:15 PM Subject: Beaver Creek #19 Spacing Exception Public Notice Attachments: BCU_19 Spacing Exception.pdf BCC:'Aleutians East Borough'; 'Anna Raff; Arion, Teri A (DNR); 'Arthur Copoulos'; 'Barbara F Fullmer'; 'bbritch'; 'Bill Walker'; 'Brad McKim'; 'Brandon Gagnon'; 'Brian Gillespie'; 'Brian Havelock'; 'Brit Lively ; 'Bruce Webb'; 'buonoje'; 'Cammy Taylor'; 'Cande.Brandow ; 'carol smyth'; 'Cary Carrigan'; caunderwood@marathonoil.com; 'Charles O'Donnell'; 'Chris Gay'; 'Christian Gou-Leonhardt'; 'Cliff Posey'; 'Dan Bross'; 'dapa'; 'Daryl J. Kleppin'; 'David Brown'; 'David Hall'; David House; 'David L Boelens'; 'David Steingreaber'; 'ddonkel'; 'Deborah J. Jones'; 'doug_schultze'; 'Eric Lidji '; 'Evan Harness'; 'eyancy'; 'foms2@mtaonline.net'; 'Francis S. Sommer'; 'Fred Steece'; 'Garland Robinson'; 'Gary Laughlin'; 'Gary Rogers'; 'Gary Schultz'; 'ghammons'; 'Gordon Pospisil'; Gould, Greg M (DEC); 'Gregg Nady'; 'gregory micallef; 'gspfoff; 'Hank Alford'; 'Harry Engel'; 'jah'; 'James Scherr'; 'Janet D. Platt'; 'jejones'; 'Jerry McCutcheon'; 'Jim Arlington'; 'Jim White'; 'Jim Winegarner'; 'Joe Nicks'; 'John Garing'; 'John S. Haworth'; 'John Spain'; 'John Tower'; 'John W Katz'; johnny.aiken@north-slope.org; 'Jon Goltz'; 'Julie Houle'; 'Kari Moriarty'; 'Kaynell Zeman'; 'Keith Wiles'; keelson@petroleumnews.com; 'Krissell Crandall'; 'Kristin Dirks'; 'Laura Silliphant'; 'Lois'; 'Lynnda Kahn'; 'mail=akpratts@acsalaska.net'; 'mail=fours@mtaonline.net'; 'Marilyn Crockett'; 'Mark Dalton'; 'Mark Hanley'; 'Mark Kovac'; 'Mark P. Worcester'; 'Marquerite kremer'; 'marty'r 'Matt Rader'; 'Meghan Powell'; Melanie Brown; 'Mike Bill'; 'Mike Mason'; 'Mikel Schultz'; 'Mindy Lewis'; 'MJ Loveland'; 'mjnelson'; 'mkm7200'; 'Nick W. Glover'; NSK Problem Well Supv; NSU, ADW Well Integrity Engineer; 'Patty Alfaro'; 'Paul Decker'; 'Paul Winslow'; Pierce, Sandra M (DNR); 'Randall Kanady'; 'Randy L. Skillern'; 'rcrotty'; Rice, Cody J (DNR); 'rmclean'; 'Rob McWhorter'; rob.g.dragnich@exxonmobil.com; 'Robert Campbell'; 'Robert Fowler'; 'Robert Province'; `Roger Belman'; 'Rudy Brueggeman'; 'Scott Cranswick'; 'Shannon Donnelly'; 'Sharmaine Copeland'; 'Sondra Stewman'; 'Sonja Frankllin'; 'Stan Porhola'; 'stanekj'; 'Steve Lambert'; 'Steve Moothart'; 'Steven R. Rossberg'; 'tablerk'; 'Tamera Sheffield'; 'Temple Davidson'; 'Terrie Hubble'; 'Tim Lawlor'; 'Todd Durkee'; Tony Hopfinger; 'trmjrl'; 'Walter Featherly'; 'Walter Quay'; 'Wayne Rancier'; 'Dale Hoffman'; Fridiric Grenier; Joseph Longo; Maurizio Grandi; Tom Gennings; 'Willem Vollenbrock'; Birnbaum, Alan J (LAW); Crisp, John H (DOA); Davies, Stephen F (DOA); Fleckenstein, Robert J (DOA); Foerster, Catherine P (DOA); Grimaldi, Louis R (DOA); Johnson, Elaine M (DOA); Jones, Jeffery B (DOA); Laasch, Linda K (DOA); Mahnken, Christine R (DOA); Maunder, Thomas E (DOA); McIver, C (DOA); McMains, Stephen E (DOA); Noble, Robert C (DOA); Norman, John K (DOA); Okland, Howard D (DOA); Paladijcz@ Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Saltmarsh, Arthur C (DOA); Scheve, Charles M (DOA); Seamount, Dan T (DOA); Smith, Chasity R (DOA); Williamson, Mary J (DOA) Attachments:BCU_19 Spacing Exception.pdf; 6/19/2008 ~~ • M Marathon MARATHON Oil Company. June 13, 2008 Mr. Art Saltmarsh Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, #100 Anchorage, AK 99501-3539 Alaska Asset Team United States Production Organization P.O. Box 3128 Houston, TX 77253 Telephone 713-296-3302 Fax 713-499-8504 ~c~ JUN ~ ~ 2008 Ai~~k~ t~iJ ~a~ ~,~ , Ar~c~~tar~~ ~`~~tali~siot~ RE: Location Exception Application Marathon Oil Company Beaver Creek Unit -- Beluga/LTpper Tyonek Participating Area Beaver Creek No. 19 Well Kenai Peninsula Borough, Alaska Dear Mr. Saltmarsh: Marathon Oil Company respectfully requests the following location exception for the referenced well: Surface Location: 1200' FNL & 1658' FWL, Section 34, T7N, RlOW, S.M. Targets: Estimated Top of Lower Beluga Production: Lower Beluga Productive Interval @ 7283' MD, 7020' TVD 2740' FNL & 1175' FWL, Section 34, T7N, R10W, S.M. Bottom Hole: Estimated @ 8945' MD, 8682' TVD 2740' FNL & 1175' FWL, Section 34, T7N, R10W, S.M. The Beaver Creek No. 19 (BC-19) is to be drilled as a development well within the Beaver Creek Participating Area targeting Lower Beluga gas sands in the Federal Lease A-028083 and A-028118. The primary reason for drilling the BC-19 is to regain Lower Beluga production that was lost when the Beaver Creek No. 9L (BC-9L) died in November 2004 and any additional smaller gas accumulations present in the Lower Beluga at the BC-19 location. The BC-9 is a dual string completion well that is completed in the Sterling Formation (BC-9S) and the Lower Beluga Formation (BC-9L). The BC-9L was completed in the Lower Beluga in September 1994. The BC-9L was producing from the Lower Beluga at a rate of 5.3 MMcf/d when an Upper Beluga interval was added in January 2004. Although the rate increased to over 14.6 MMcf/d with the addition of the Upper Beluga, the Upper Beluga perf interval began to produce water that eventually caused the well to die in November 2004. As a result, the Lower Beluga perf intervals were covered with Upper Beluga water until August 2006 when a patch was set over the Upper Beluga perf interval. Once the patch was set over the Upper Beluga perf interval, there were several attempts to bring the Lower Beluga back on production without success. Considering the Beluga Formation's sensitivity to water, it is Marathon's opinion that the water from the • • Location Exception Application June 13, 2008 Marathon Oil Company Page 2 Beaver Creek Unit -- Beluga /Upper Tyonek P.A. Beaver Creek No. 19 Well Kenai Peninsula Borough, Alaska Upper Beluga that was in contact with the Lower Beluga perf intervals resulted in formation damage that cannot be economically remediated. As a result, BC-19 will be drilled to produce the Lower Beluga gas that was lost once the BC-9L ceased to produce. A location exception is required because the Lower Beluga productive intervals of the BC- 19 well will be within a 3,000 foot radius of wells capable of producing from the same Lower Beluga reservoirs, as shown in Exhibit "A." The wells currently producing from the Lower Beluga reservoirs within a 3,000 foot radius of the BC-19 well location are Beaver Creek No. lA (BC-lA), No. 10 (BC-10), No. 11 (BC-11), No. 12 (BC-12), No. 13 (BC- 13), and No. 16RD (BC-16RD). The Beaver Creek No. 14 (BC-14) is also within 3,000 feet of the same Lower Beluga intervals in BC-19, but is not productive in the Lower Beluga intervals. The Beaver Creek No. 4 (BC-4), No. 5 (BC-5), and No. 6 (BC-6) are also within 3,000 feet of the Lower Beluga intervals in BC-19, but are either Tyonek oil wells (BC-4 and BC-5) or are productive in the Sterling/Tyonek formations and will not be completed in the Lower Beluga in the future. There are no other wells, productive or non- productive, that penetrate the Lower Beluga within 3,000 feet. This spacing exception is necessary to efficiently drain the Lower Beluga reservoirs that often have limited drainage areas due to the discontinuous nature of Lower Beluga sands and can no longer be produced from BC-9L. Attached is a plat showing the BC-19 surface location and well paths from the Beaver Creek Pad 3. The Lower Beluga will be penetrated by the vertical section of the BC-19 well path and is shown on the attached plat. Also attached is apre-drill directional survey for the BC-19 well. Furthermore, the parties listed on Exhibit "B" are entitled to notice of this application and have been duly notified. Should you have any questions related to land or ownership issues, please contact Charles Underwood at 907-565-3044, or for questions regarding the technical aspects of this application, please contact Scott Szalkowski at 713-296-3390. Sincerely, ~. Dave O. Martens Subsurface Manager AAT Oil and Gas Development Attachments: Exhibit A Plat Exhibit B Notification List Directional Survey Affidavit -Geological Affidavit -Land • • AFFIDAVIT Comes now Christine D. Gay, and first being duly sworn upon his oath, states and deposes as follows: 1. That I am over the age of 21 years and mentally competent to make this affidavit. 2. That I am knowledgeable and fully informed concerning the facts contained in this affidavit. 3. That for approximately the past three years I have worked for Marathon Oil Company (MOC) assisting the Alaska Land Department. 4. That I assisted in preparing a notification list for a Location Exception application for the Marathon Beaver Creek No. 19 Well (BC-19) with a surface location in Section 34, T7N, R10W, S.M. and bottom hole location in Section 34, T7N, R10W, S.M. That on or about June 13, 2008 Marathon employees mailed notice of the BC-19 Well Location Exception application to all of the mineral owners, working interest owners, and overriding royalty owners within a 3,000 foot radius of the proposed well location by certified mail, return receipt requested. A list of these noticed owners is attached to this affidavit as Exhibit "B." The postal return receipts will be made available for inspection by proper parties. These notices were mailed to their last known address or record address, and I believe that we have mailed the notice letters to good current addresses. In view of the foregoing facts, affiant herein states and deposes that Marathon, as operator of the proposed BC-19 Well, has made a reasonable and diligent effort to identify, locate and contact all parties legally due notice of the said Location Exception application. sayeth not. D. Gay (aff ant) Date STATE OF ALASKA ) )ss. THIRD JUDICIAL DISTRICT ) This certifies that on ~ ~ , 2008, before me, a notary public in and for the State of Alaska, duly commissioned and sw ,personally appeared Christine D. Gay of Marathon Oil Company, known to me to be the person described in, and who executed the foregoing affidavit, who then after being duly sworn according to law, acknowledged to me under oath that she executed same freely and voluntarily for the uses and purposes therein mentioned. WITNF`~S~yh~~~icial seal the day and year in this certificate f above 'tten. ~~ ,~~, . ° ,~;r a° • ,,y ~~ mk!, ~D °i`~~ ~q ~Gi~ ~, .. •• `' ®~ p ^ NOTARY PUBLIC n a r Alaska ~,, ,. ' ~~~, ~ My Commission Ex /3' ~~ r 31~.~ ~.~,~ ,s'~~~~1)) )~~~~1,, • Exhibit "B" • Marathon Oil Company Beaver Creek Unit -Beluga/Upper Tyonek PA Beaver Creek No. 19 Well Location Notification List Name Line 2 Address Cit State Zi Marathon Oil Company Attn: Chris Ga PO Box 196168 Anchorage AK 99519-6163 Bureau of Land Management Anchora e Field Office Mr. Greg Noble, Branch Chief 6881 Abbott Loop Road Anchorage AK 99507 Cook Inlet Region, Inc. Attn: Kim Cunningham 2525 C Street. Suite 500 Anchorage AK 99509-3330 Paul Geiger 8022 Hill Dr. Sebastopol CA 95472-2733 Peter Geiger 15560 Sterling Heights Dr. Brookings OR 97415-9579 Kirkpatrick Walkowski Watkins Trust -Doris L. Ervin c/o Wellspring Grou 10900 NE Fourth St., Ste. 920 Bellevue WA 98004 Estate of John R. Donnell Attn: Maureen Nahas Donnell 300 Park Monceau Palm Beach FL 33480-5113 • AFFIDAVIT Comes now D. Scott Szalkowski, and first being duly sworn upon his oath, states and deposes as follows: 1. That I am over the age of 21 years and mentally competent to make this affidavit. 2. That I am knowledgeable and fully informed concerning the facts contained in this affidavit. 3. That for approximately the past two and a half years I have worked as a geologist for Marathon Oil Company (MOC) on the Alaska Asset Team. My responsibilities have included geology of the Cook Inlet/Kenai Peninsula Areas. 4. That I have been responsible for the geological work related to a Location Exception application for the Marathon Beaver Creek No. 19 Well (BC-19) with a surface location in Section 34, T7N, R10W, S.M. and bottom hole location in Section 34, T7N, R10W, S.M. 5. The Beaver Creek No. 19 (BC-19) is to be drilled as a development well within the Beaver Creek Participating Area targeting Lower Beluga gas sands in the Federal Lease A-028083 and A-028118. The primary reason for drilling the BC-19 is to regain Lower Beluga production that was lost when the Beaver Creek No. 9L (BC-9L) died in November 2004 and. any additional smaller gas accumulations present in the Lower Beluga at the BC-19 location. The BC-9 is a dual string completion well that is completed in the Sterling Formation (BC-9S) and the Lower Beluga Formation (BC-9L). The BC-9L was completed in the Lower Beluga in September 1994. The BC-9L was producing from the Lower Beluga at a rate of 5.3 MMcf/d when an Upper Beluga interval was added in January 2004. Although the rate increased to over 14.6 MMcf/d with the addition of the Upper Beluga, the Upper Beluga perf interval began to produce water that eventually caused the well to die in November 2004. As a result, the Lower Beluga perf intervals were covered with Upper Beluga water until August 2006 when a patch was set over the Upper Beluga perf interval. Once the patch was set over the Upper Beluga perf interval, there were several attempts to bring the Lower Beluga back on production without success. Considering the Beluga Formation's sensitivity to water, it is Marathon's opinion that the water from the Upper Beluga that was in contact with the LowerBeluga perf intervals caused irreparable formation damage to the once productive Lower Beluga perf intervals. As a result, BC-19 will be drilled to produce the Lower Beluga gas that was lost once the BC-9L ceased to produce. A location exception is required because the Lower Beluga productive intervals of the BC-19 well will be within a 3,000 foot radius of wells capable of producing from the same Lower Beluga reservoirs, as shown in Exhibit "A." The wells currently producing from the Lower Beluga reservoirs within a 3,000 foot radius of the BC-19 well location are Beaver Creek No. lA (BC-lA), No. 10 (BC-10), No. 11 (BC-11), No. 12 (BC-12), No. 13 (BC-13), and No. 16RD (BC- 16RD). The Beaver Creek No. 14 (BC-14) is also within 3,000 feet of the same Lower Beluga intervals in BC-19, but is not productive in the Lower Beluga intervals. The Beaver Creek No. 4 (BC-4), No. 5 (BC-5), and No. 6 (BC-6) are also within 3,000 feet of the • • Affidavit to Location Exception Application June 13, 2008 Marathon Oil Company Page 2 Beaver Creek Unit -- Beluga /Upper Tyonek P.A. Beaver Creek No. 19 WeII Kenai Peninsula Borough, Alaska Lower Beluga intervals in BC-19, but are either Tyonek oil wells (BC-4 and BC-5) or are productive in the 5terling/Tyonek formations and will not be completed in the Lower Beluga in the future. There are no other wells, productive ornon-productive, that penetrate the Lower Beluga within 3,000 feet. This spacing exception is necessary to efficiently drain the Lower Beluga reservoirs that often have limited drainage areas due to the discontinuous nature of Lower Beluga sands and can no longer be produced from BC-9L. Furth fia ayeth not. D. Szalko i (affiant) Date STATE OF TEXAS ) )ss. COUNTY OF HARRIS ) This certifies that onJ UnL (3 , 2008, before me, a notary public in and for the State of Texas, duly commissioned and sworn, personally appeared D. Scott Szalkowski of Marathon Oil Company, known to me to be the person described in, and who executed the foregoing affidavit, who then after being duly sworn according to law, acknowledged to me under oath that he executed same freely and voluntarily for the uses and purposes therein mentioned. WITNESS my hand and official seal the day and year in this certificate first above written. NOTARY PUBLIC in and for Texas o~ww A ~~~ My Commission Expires: o a- ~e~ • aZD t 1 MGTM+f lpUC ElAtE OF 1EXM eowues~oN ExH~:: 02-12-2011 C ~~ ~~ rn m 0 0 0 0 0 0 • 304800E E 322000E E ~ 441000F N 2419000E N cc xr o I KILOMETRES 0 O.Sp MILES IN. sv~lul.: Nlxt'n'1'~Ix 1' n:.t'IYtly A-028120 A-028083 I U.S.A. U.S.A. I Cook Inlet Region, Inc. Cook Inlet Region, Inc. Mazathon Oil Co. 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MARATHON OIL COMPANY Beaver Creek Unit Boundary BEAVER CREEK UNIT - - - - Lower Tyonek PA BEAVER CREEK NO. 19 - - - - Sterling PA LOCATION EXCEPTION -EXHIBIT A - - - - Beluga/Upper Tyonek PA Lease Line JUNE 2008