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ARCH PETROLEUM ANNOUNCES RAILROAD COMMISSION DECISION

 FORT WORTH, Texas, May 26 /PRNewswire/ -- Arch Petroleum Inc. (NASDAQ: ARCH) announced that the Railroad Commission of Texas (RRC) had amended its interim order regarding field rules in the Keystone Ellenburger Field, Winkler County, Texas.
 Previously, as an incentive to encourage water production, the RRC had allowed operators to produce a bonus allowable of 1/2 mcf of natural gas per barrel of water produced from the Ellenburger formation. The RRC's revised interim order, which expires in May 1994, will now require producers to accumulate all such bonus allowables for sale at a later date. This temporary delay does not affect the producers' gas well and casinghead gas allowables, which presently total 2,388 mcf per day for wells operated by Arch in the Keystone Ellenburger Field.
 Following a series of lengthy hearings in 1991-1992, the RRC issued an interim order implementing a reservoir management program designed to reduce pressure in the Ellenburger reservoir through production of large volumes of water in order to optimize recovery of remaining oil and gas reserves. In sworn testimony before the RRC, representatives of the billionaire Bass family's Bass Enterprises Production Company estimated remaining recoverable oil reserves of approximately 42 million barrels and recoverable gas reserves of approximately 450 bcf of natural gas. Subsequent to the RRC's issuance of the interim order in September 1992, Pennzoil Petroleum Company acquired the interests of Chevron U.S.A. Inc. in the field. In a recent hearing, Pennzoil substantially endorsed the Bass plan and Bass's projections of recoverable reserves.
 Arch President Larry Kalas stated, "Arch intends to continue diligent implementation of the RRC's order. We are currently producing over 30,000 barrels of water per day which will allow Arch to bank over 15,000 mcf per day. We will continue to consider every appropriate technique to maximize recovery of the very significant hydrocarbon reserves that we all believe remain."
 Kalas also stated that Arch's December 1992 sale of a volumetric production payment of 18.3 bcf of natural gas from the Keystone Ellenburger Field to Enron Reserve Acquisition Corp. was made pursuant to an extensive agreement which included provisions for amending the delivery schedule for gas.
 Arch Petroleum Inc. is an independent oil and gas exploration and production company headquartered in Fort Worth, with interests in producing properties in Texas, New Mexico, Oklahoma, Louisiana and North Dakota. Arch Production Company is its wholly owned subsidiary. Arch participates in natural gas transmission through its interests in Saginaw Pipeline Company L.C. and Onyx Gathering Company, L.C.
 -0- 5/26/93
 /CONTACT: Randall W. Scroggins, vice president of Arch Petroleum Inc., 817-332-9209 or 800-772-8558/
 (ARCH)


CO: Arch Petroleum Inc. ST: Texas IN: OIL SU:

PS -- NY011 -- 2325 05/26/93 09:24 EDT
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Publication:PR Newswire
Date:May 26, 1993
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