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April 22, 2008 --- Vol. 14, No. 44April 2008

DNR rejects 23rd POD for Point Thomson, terminates unit

The Department of Natural Resources has rejected a proposed 23rd plan of development for Point Thomson and terminated the unit.

DNR Commissioner Tom Irwin said today in a prepared statement that the proposed 23rd plan of development for the Point Thomson unit “is not an appropriate remedy” for ExxonMobil’s failure to submit an acceptable 22nd plan of development.

Irwin said the 23rd plan of development “does not serve the State’s best interests or meet the legal standards in DNR’s regulations.”

Irwin said he did not approve the 23rd plan of development and has terminated the Point Thomson unit.

He said he “could not risk further delay in development of these valuable resources” by accepting the 23rd POD.

“In light of the history of this unit, I did not trust the appellant’s commitment to follow through” with the 23rd plan.

Irwin said that while the 23rd plan would have resulted in production of 10,000 barrels per day of gas condensates, it “did not include a commitment to produce any gas from this unit.”

The decision is on remand by Judge Gleason in December. Irwin noted that the judge “affirmed DNR’s rejection of the 22nd” POD “and found that DNR had the authority to terminate the unit,” but found that appellants’ “due process rights may have been violated because they did not have adequate notice that the unit would be terminated.” DNR was directed to give appellants a fair opportunity to present alternate remedies to termination.

Irwin said he carefully reviewed the record of the unit and all evidence from the remand proceeding in making his decision.

Appellants have 20 days to request reconsideration. DNR has until June 15 to have a decision back to Judge Gleason.

Editor’s note: see story in April 27 issue of Petroleum News, available online to subscribers at noon, Friday, April 25, at www.petroleumnews.com.

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