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Home My WebLink AboutCO 082Conservation Order Cover Page XHVZE This page is required for administrative purposes in managing the scanning process. It marks the extent of scanning and identifies certain actions that have been taken. Please insure that it retains it's current location in this file. Conservation Order Category Identifier Organizing RESCAN Color items: [] Grayscale items: [] Poor Quality Originals: [] Other: NOTES: DIGITAL DATA [] Diskettes, No. [] Other, No/Type OVERSIZED (Scannable with large plotter/scanner) ~items OVERSIZED (Not suitable for plotter/scanner, may work with 'log' scanner) [] Logs of various kinds [] Other BY: ROBIN ~ Scanning Preparation TOTAL PAGES ~--~'~ (~ / IS/ BY: ROBIN~ Production Scanning Stage I PAGE COUNT FROM SCANNED DOCUMENT: PAGE COUNT MATCHES NUMBER IN SCANNING PREPARATION: YES NO Stage 2 IF NO IN STAGE 1, PAGE(S) DISCREPANCIES WERE FOUND: YES ~ NO (SCANNING IS COMPLET"~*",~,'~"~-IIS POINT UNLESS SPECIAL ATTENTION IS REQUIRED ON AN INDIVIDUAL PAGE BASIS DUE TO QUALITY, GRAYSCALE OR COLOR IMAGES) General Notes or Comments about this Document: 5/21/03 ConservOrdCvrPg.wpd STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS Alaska 0il and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99504 Re: The motion of the Alaska Oil ) and Gas Conservation Committee to ) hear testimony to establish pool ) rules to govern the operation of ) the Kenai Gas Field. ) Conservation Order No. 82 Kenai Field Sterling Gas Pools 3, 4, 5.1, 5.2, 6 Tyonek Gas Pool 1 December 3, 1969 IT APPEARING THAT: 1. The Alaska Oil and Gas Conservation Committee moved to hear testimony by the operator to establish proper pool rules for the Kenai Field. 2. Notice of the hearing was published in the Anchorage Daily News on October 7, 1969. 3. A public hearing was held in the Ben Crawford Memorial Building, Anchorage, Alaska, on October 30, 1969. Testimony was presented in response to the motion, and affected and interested parties were heard. The hearing was continued until November 6, 1969, in order that additional testimony could be presented. 4. Notice of Continuance of public hearing was published in the Anchorage Daily News November 4, 1969. 5. The public hearing was resumed in the Ben Crawford Memorial Building, Anchorage, A~aska, on November 6, 1969. Additional testimony was presented. AND IT F'URTHER APPEARING THAT: 1. Gas pools should be defined in this field. 2. To conform to currently accepted geological formation nomenclature published by the Alaska Geological Society, the pools designated in the testimony as various Upper Kenai Gas Pools and Middle Kenai Gas Pool should be named various Sterling Gas Pools and Tyonek Gas Pool respectively. 3. Existing 320-acre spacing should be continued in each pool, but exceptions must be granted for certain existing wells. CONSERVATION ORDER NO. 82 Page 2 December 3, 1969 4. Testimony was insufficient to support a pool rule allowing any pay open to the well bore to be less than 3,000 feet from any pay in the same pool in any other well capable of producing therefrom. 5. Continued production and water encroachment may necessitate more than one key well bottom hole pressure survey in a calendar year. 6. This conservation order should set forth all current pool rules for the Kenai Field. NOW, THEREFORE, IT IS ORDERED that the area described as follows is affected by this order: T~ RllW.~ S.M... I I Section 3: Lot 4, SW¼NW¼, W~SW~ Sections 4, 5, 6, 7, 8: All Section 9: N½, SW¼, W½SE¼ ' ' SW¼NW¼ NW¼SW¼ Section 16: N~NW~, , Sections 17 and 18: All Section 19: Lot 1, NE¼NW¼, NE¼ Section 20: N½NW¼, SW¼NW¼ Section 2:' 'iSection Section 12: Section 13: T4N, R12W, S~M. Section 1: 'All i I ,E~E~ 'E½NE¼. All Lots 5 ±brough 12, easterly 2.50 acres of Lots 13 FiE! i i I I i i i through 16, E½NW¼NE¼, ~.x, E~W~SE~NE~,E~WxNW~SE¼, I I I I , ENE~, E½NW¼ !lying EESW~NE¼, EENW~SE¼ All of W' ' westerly of coastline T5N, RliW, S.M. ' ' All of Kenai River Section 17: Lots 8 and 9, NW¼.5W¼, S~SW~, lying within SW¼, SW¼SE¼ Section 18: SE¼SE¼ Section 19: Lots 2, 6 through 13, SE¼, E'~E~SE~SW~,: : ~ NE¼, All SE¼NW¼, NE¼SW¼, S½SW¼ lying westerly of coastline Section 20: S½, NW¼, SW¼NE¼, NW¼NE¼ ~'~w' SW¼ ' ' ' ' W~SE~ SE~SE~ Section 28: NW¼NW¼, ~.,,~, , , Sections 29 and 30: All Section 31: Lots 3 through 10, E½, All that portion lying westerly of coastline Sections 32 and 33: All ' ' SW¼ : ' Section 34: NW~NW~, S½NW¼, , W~SE~ TsN,..Ri ZlW,. S Section 25: SE¼NE¼, E½SE¼ Section 36: E½ CONSERVATION ORDER NO. 82 Page 3 December 3, 1969 Rule 1. Definition of Pools. (a) The Kenai Sterling Gas Pool 3 is defined as the accumulation of gas common to and which correlates with the accumulation found in the interval 4,175' to 4,374' in the KU 21-6 well. (b) The Kenai Sterling Gas Pool 4 is defined as the accumulation of gas common to and which correlates with the accumulation found in the interval 4,412' to 4,558' in the KU 21-6 well. (c) The Kenai Sterling Gas Pool 5.1 is defined as the accumulation of gas common to and which correlates with the accumulation found in the interval 4,576' to 4,859' in the KU 21-6 well. (d) The Kenai Sterling Gas Pool 5.2 is defined as'the accumulation of gas common to and which correlates with the accumulation found in the interval 4,880' to 5,213' in the KU 21-6 well. (e) The Kenai Sterling Gas Pool 6 is defined as the accumulation of gas common to and which correlates with the accumulation found in the interval' 5,250' to 5,520' in the KU 21-6 well. (f) The Kenai Tyonek Gas Pool 1 is defined as the accumulation of gas common to and which correlates with the accumulation found in the interval 9,155' to 9,890' in the KDU No. ! well. Rule 2. Well Spacing_. A drilling unit for each pool shall consist of any two adjacent governmental quarter sections within the same section. Not more than one completed well shall be allowed in any drilling unit. No pay open to the well bore will be less than 3,000' from the pay in the same pool in any other well capable of producing therefrom. Rule 3. Casinq and Cementin.g. Requirements. (a) Surface casing shall be landed at not less than 1,200' or more than 2,000' and cement shall be circulated to the surface. (b) Product~i~on casing shall be landed through the completion zone and cement shall cover and extend to at least 500' above each potentially productive sand interval. The use of multi-stage cementing procedures shall be permitted. Alternatively a casing string shall be adequately cemented at an intermediate point and a liner landed through the completion zone. If a liner is run, the annular space behind the liner shall be filled with cement to at least 100' above the casing shoe or the top of the liner shall be squeezed with sufficient cement to provide at least 100' of cement between the liner and casing annulus. Cement must cover all potentially productive intervals behind the liner. Casing and well head equipment shall be hydrostatically tested to not less than 2,000 pounds per square inch pressure. CONSERVATION ORDER NO. 82 Page 4 December 3, 1969 Rule 4. Computed Bottom Hole Pressure Surveys. A key well bottom hole pressure survey shall be taken in each pool upon Committee request; however, such surveys shall not be required more often than twice in any calendar year. Bottom hole pressure may be computed from surface measurements taken with a dead weight tester provided, however, than an approved bottom hole measuring device shall be run when the accuracy of the computed bottom hole pressure is questionable. The time, length and kind of survey, number and location of wells, datum and other details will be determined by the operator subject to Committee approval. IT IS FURTHER ORDERED THAT: Conservation Order No. 30 is hereby revoked. A spacing exception is granted for~well KU 21-6 which well is completed in the Kenai Sterling Gas Pool 5.1 and 6 and in the same drilling unit as well KU 14-6 which is completed in Kenai Sterling Gas Pool 6. Commingling of production from the Kenai Sterling Gas Pool 4 and the Kenai Sterling Gas Pool 5.1 in well KU 33-32 is allowed. A spacing exception is granted to complete the well KU 21X-32 in the same pool or pools as the well KU 33-32 at a distance of .not less than 2,000' from the pay open to the KU 33-32 well bore in the same pool. DONE at Anchorage, Alaska, and dated December 3, 1969~ Thom-~s R: M-~rsh~ec reta ry Alaska Oil and Gas Conservation Committee Concurrence: Homer L. Burrell, Chairman Alaska Oil and Gas Conservation Committee O. t(. G i I~etl~, Jr., M'ember Alaska Oil and Gas Conservation Committee UNITE"", - ....... ~S DEPART M ENT .'-;-ER I OR GEOLOGICAL SURVEY IN R~PLY REFER more properly confo:'[~ with c:.;:i[;"-":;",~.,...,;~ ..... S~:i'i'?''',.,,~ ,~,",",;';'~'ition~;... The history of this situation as obtJ. i~.ad f=cm our r~:,::3::gs is as fo!lo~,;s: .,,~. ....~'"~...,,.4 c ....... , ~,,O,:,,TCi,;,;.?., ,..,,. ..... 1~'o~.) iF~Ci~.~OS all ~ot~'"":',ti~',.:l ;~:;,u,~ ': ...... ¢~ witliin the '~A'~ gas zone, ~,i~iicll consists of z?.':;'Jc:::ot:;~ gas s~".;'~ $~:i'in;;;er.s on a 320 acre spacing pattezn using multiple ~,:,~ii ~n::~d dual coinplotic::i tack;~z(~u,2S. Suc'h ~c~io'[% t''~'''*~¥~,~, de2i?j'j~blo [:t) l::,',~:3;::~:.u better co;.~roi of tho ' ~ ....... =~,,,,o~ fro::% t;','a field a%a decrease as follo~¢'s: 5.2 6 P r.-.: {',,, fl , DIV1SION OF 011, AND OAS CgS'~ '3''''~'~''~ ~ ~ ~' ~' ~' ~ ........ ' ...... : SfI\Ir. MENT. IN SUPPORT OF DIS1ANCE t!,XCLPIION 1-'OR KENAI UNIT 21X-32 AND DISTANCE BET!./v;EEN 'WELLS I1X! '.l.'tlE KEN~! GAS FIELD /' If//.:- / Geologic testimony presented in public hearing on October 30, 1969 supported our request for closer distance between wells completed in the same pool, based · on anticipated additional sand development, completion in intervals with no water present and, as necessary, flexibility wi'hit needed tolerance in reaching deeper objectives with upper completion possible if lower intervals are not pro-- ductive. Specifically at this time and point, loss of sand and presence of gas and 'water in pools north and northeasterly from. the 43-32 drilling pad, show that the best available geologic target for ~In.e area occurs at a 21. X-32 location. These data establish that an exception to allow closer distance between completion inter- vals in Kenai Unit 21X-32 should be allowed. . November 6, 1969 NOTICE OF CONTINUANCE OF PUBLIC HEARING STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS Conservation File No. 82 Re: Continuance of the hearing held October 30, 1969 on the motion of the Alaska Oil and Gas Conservation Committee to hear testimony to define the pools within the Kenai Gas Field and to establish rules to govern the operation of these pools pursuant to Title 11, Alaska Administrative Code, Section 2004. The referenced hearing will be continued at 9:30 a.m. November 6, 1969 in the first floor meeting room of the Ben Crawford Memorial Building, Third Avenue and Eagle Street, Anchorage, Alaska. Publish November 4, 1969 Thomas Ro Marshall, Jr. Executive Secretary Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99504 EMERGENCY ORDER STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS Alaska Oil and Gas Conservation Committee Re: EMERGENCY ORDER November 3, 1969 Conservation File No. 82, Union Oil Company of California, Kenai Unit Well No. 21X-32, Bottom Hole Location 2,350' East, 290' South-West of the corner of Section 32, Township 5 North, Range 11 West, Seward Meridian. The Union Oil Company of California petitioned the Alaska Oil and Gas Conservation Committee on October 31, 1969 for approval to spud the referenced well, which does not conform to spacing requirements of Section 2061(c) of the Alaska Oil and Gas Conservation regulations, in that it lies approximately 2,290' from the nearest gas well completed in the same pool (Kenai Unit Well Noo 33-32). A public hearing to establish field rules for this field was commenced on October 30, 1969 and will be continued November 6, 1969 in the first floor meeting room of the Ben Crawford Memorial Building, Third Avenue and Eagle Street, Anchorage, Alaska An emergency order is hereby granted pursuant to and in accordance with Section 2012 of the Alaska Oil and Gas Conservation Regulations permitting the drilling of the referenced well at the operator's risk° This emergency order expires November 17, 1969o Thomas R. Marshall, Jr. Executive Secretary Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99505 AFFIDAVIT OF PUBLICATION STATE OF ALASKA, ) THIRD JUDICIAL DISTRICT, ) ss. ... ?:~rLz__.L..£~mke .................. I~ing first duly sworn on oath deposes and says that .... :;:},.~.~. .... is the...~_e__.~-{~.l-_..-{~--e..-z'-.k-., of the Anchorage News, a daily news- paper. That said newspaper has been approved as a legal news- paper by the Third Judicial Court, Anchorage, Alaska, and it is now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all of said time was printed in an office maintained at the aforesaid place of publication of said news- paper. That the annexed is a true copy of a ...~?.~.~?~'.l.....~g.~:~.o...e.. as it was published in regular issues (and not in supplemental form) of. said newspaper for. a period of ......... 0~-]G-. insertions, commencing on the .... 7- ..... day of ..0.C.~.Q~L~.',IT. ..... ,~19 .... .~'~and ending on the ..... ..~.. .......... day of f ....0~ !'~O.b ~.,~..Z,. .......... , 19__.,.~.~ oth dates inclusive, and that such newspaper was regularly disfributed to its subscribers dur- ing all of sa,id 'period. That the full amount of the fee charged for the foregoing publication is the sum of $ ~.~,*~ which amount has been paid in full at the rate of 25¢ per line; Mini- mum charge $7.50. Subscribed~ sworn to before me this ...~.. day of ..... ~ 9.5.g.. the State of Alaska, Third DiviSion, Anchorage, Alaska (/~Y COMMISSION EXPIRES ..... .//...., NOT~CE OI~"PtJBI.J,C I.iI,',ABING ' a~souac~:s DIVISION .OP 0IL AND GAS Alaska 0il and Gas Conse,rvation ' ~"Comniittee ' " Conservation File No.' 82 ' , , [Re: Tl~e' motlo~ of the ~la~ka Oil ~and Gas' Conservation Committee j hea~ 'testimony to define the pools J wighin ~he 'Kenai Gas Field and ~o establish:., rules, to govern 'fl~e op- J'eration 0f the~b po.ols pursuant Title"'" 11,' '~l~sk~ Administrative Co~e,:.. See~iqn 2004. . A '~ea~iug o~ ~his matt~i' will be l held at 9:30 a.m., October 30, 1969, 'J in file. basement of the Ben Craw- .J ford Memorial Building, Third Ave. ~nu.e. alid. Eagle Street, Anchorage, .JAlask'a }a~ which time ~he operator may' rrose'n~.~es~imony and affected and interested Par~ies will be heard. , . ,~ , , .Thomas R. ~arshall, Executive Secretary Alaska Oil a~d Gas C0nse~va~ioa 300~. PorcuPin~ Drive ... ~Chorage, Alaska 99504 Publish: OctOber 7, Legal NotiCe No. 2134. STATE OF ALASKA, ) THIRD JUDICIAL DISTRICT, ) ss. being first duly sworn on oath deposes and says ~hat...?J.l~.a ..... is the /.4?~/.;~.~...j.j. li:..e.~]._c of the Anchorage News, a daily news- paper. That said newspaper has been approved as a legal news- paper by the Third Judicial Court, Anchorage, Alaska, and it is now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all of said time was printed in an office maintained at the aforesaid place of publication of said news- paper. That the annexed is a true copy of a .].;,.e.,%a.l...N.a.tLa.e...2] 92 as it was published in regular issues (and not in supplemental form) of said newspaper for. a period of .... ..0..~..~ ...... insertions, commencing on the ....4. ....... day of...::"! .0..V...e. .m..'~..e. ~..,'19 ..... .6, 9and ending on the .........4 .......... day of of ..l.?..0.v...e..~?.~.~.~ ........ , 19 .... ~.~ both dates inclusive, and that such newspaper was regularly distributed to its subscribers dur- ing all of said period. That the full amount of the fee charged for the foregoing publication is the sum of $ 8.75 which amount has been paid in full at the rate of 25¢ per line; Mini- mum charge $7.50. Subscribe nd sworn to before ibe~n methi~ 4 ,~,,~ November, ~9.~ ~9 .. ,...'.....................,, Notar~ Public in and ~or the State of Alaska, Third Division, Anchorage, Alaska MY COMMI~ION EXPIRES ....... NOT/CE OF' CONTINUANCE ~ OF PUBLIC IUfiAIliNG :' ~'I'ATE OF ALASK~ DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GA~ ConserVation File No. Re: Continuance ~ the hearing held ~ October 30, 1969 on the moron of ] the Alaska Off and Gaz Conse~a. ~ tion Committee to hear testimony, ~ to define the pools wlt~ ~he [ Kenai Gas Field and to establish] ~ rules to govern the operation [ these pools pursuant to ~ltle 14 J Alaska A~lntstra~ve Code, Sec. ~The referenced hearin~ w~ l~ntinued 'at 9'30 a m ~r ...... bel 1969 In the tir~ flo~r .... v~moer I~ the Be- ~-- -~eetingr°°ml I~uumng, ~htrd Avenue ~ Eagle '~tree~ Anchorage~ ~ask~ ~, Executive Secreta~ ~, , Alaska Off ~d G~ ~ , ~ s~vaflon Co~ittee t ouuz ~orcup~e Drive ~' ~chorage, ~ka 99~04 :Publish: ;November 4~ 1~. ' Le~ No~ N0. , ,. ,, NOTICE OF PUBLIC HEARING STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF'OIL AND GAS Alaska Oil and Gas Conservation Committee Conservation File No. 82 Re: The motion of the Alaska Oil and Gas Conservation Committee to hear testimony to define the pools within the Kenai Gas Field and to establish rules to govern the operation of these pools pursuant to Title 11, Alaska Administrative Code, Section 2004. A bearing on this matter will be held at 9:30 a.m., October 30, 1969, in the basement of the Ben Crawford Memorial Building, Third Avenue and Eagle Street, Anchorage, Alaska, at which time the operator may present testimony and affected and interested parties will be heard. Alaska Oil and Gas Conservation C omm i t t e e 3001 Porcupine Drive Anchorage, A1 aska 99504 Publish October 7, 1969 TO; F- Thomas R. Marshall, Jr. Petroleum Supervisor FROM: Harry W. Kugler /~:~: Petroleum Geologist DIVISION OF MINES ARq) MINERALS DATE : July 8, 1968 SUBJECT: Kenai Gas Field The Kenai Gas Field has been developed using the "module'~ concept for identifying different groups of sands in a multiple reservoir. A so-called "Kenai Deep:' group of sands or "D" sands have also recently been opened to production. Since our rules and regulations define a pool as being almost synonomous with "module," as used in the Kenai Field, it is recommended that a public hearing on the Kenai Gas Field is necessary to define pools, among other things, and make legal the development practices in this field. Historically, a letter from Union Oil Company of California, dated April 8, 1965, requested a temporary order "to develop the Kenai Gas Zone of the Kenai Gas Field as a spacing of 320 acres per well." A report submitted with the letter brought out the following points: le 2~ Six wells have been drilled, spaced at no less than one well per 640 acres. Demand for gas to repressure the Swanson River Field necessitates additional development of the Kenai Field. o The closer well spacing will increase both deliverability and the ultimate production by maximizing the recovery of gas in lenticular sands. 4. Unfavorable surface conditions dictate drilling from "islands." 5, The combination of a directional drilling program from islands and the shallow depth of the zone makes it impractical to comply with the statutory 640-acre spacing pattern. 6. The productive interval in the field is the Kenai Gas Zone. , The porosity is from 15 to 35 per cent and the permeability is between 350 and 3,000 md. 8~ Correlations within the Kenai Gas Zone are fair to good and indicate significant stratigraphic variations, including the lenticular nature of the sands. Another letter from Union dated April 9, 1965, proposed that the several individual sands be subdivided into six producing modules consisting of enough sand thickness to provide each completion with Kenai Gas Field - 2 - July 8~ 1968 an optimum producing capacity. "This concept will also permit selectivity of productive horizons m~imizing conservation of reservoir energy by producing the shallow !owar pressure sands into the low pressure Alaska Pipeline gathering system and the deep higher pressure sands into the high pressure Swanson River Field gathering system." Dual completions, with each producing from ~o modules, were proposed and the plan would "provide for the possibility of two or more wells being drilled to essentially the s~e bot~um-~.o~= location, but being produced from alterna- t~e modules such that the oYoposed 320-acre spacing, oattern will not be violated." The modules were numbered one through six and each module contained two or three sands which were individually lettered. The relationship between the modules and the sands can be correlated with a cross section by C. F. Johnson, which is in this office. The request was advertised April 9, 1965, and Conservation Order #16 was dated April 21, 1965. This order stated that gas wells may be drilled to the Kenai Gas Zone within~the limits of the Kenai Unit on a spacin~ pattern of 320 acres per gas well and to continue in force for a period of not more than 18 months. On October 7, 1966, Union requested that an order be issued "establishing a permanent field sRaaing in the Kenai Gas ~e!d at 320 acres p.er gas we!l.~' A hearing was held October 21, 1966, and seven modules (?) were mentioned. Two exhibits were presented at a later date (November 15, 1966) and Conservation Order #30 stated: "Now, therefore, it is ordered that the permanent well spacing pattern for the Kenai Gas Field is 320 acres per well." " Development locations in the Kenai Gas Field have been permitted based on a 320-acre spacing pattern for each module. The public is 'not aware of this because modules (or pools) have not been defined in any of our Conservation Orders° Many of the producing wells and one of the locations currently permitted for drilling are in violation of the existing rules until'pools are defined. The discovery of a deeper pay, the "D" sands, further complicates the situation. The relationship of the sands and the modules are as folloWs: Module -' Sands 1 A-i, A-2, A-5 2 A-6,. A-.7, A-8 3 A-9, A-10, A-Ii 4 ' B-!, B-2 5.1 B-3, B-4 5.2 B-5 6 C-l, C-2 Kenai Deep D Kenai Gas Field -3- July $, 1968 It is recommended that a hearing be held to establish field rules for the Kenai Gas Field. The main purpose will be to define pools. A meeting with Union Oil Company of California should be held to let them prepare testimony establishing and defining pools. We should indicate that the term "module" will not be used in the resulting conservation order. Annual pressure surveys, should ba required. Gas oroduction practices should be clarified, if necessary, because this ~aaring will probably sat the standard for gas field practices in Alaska. may INTRODUCTION OF TESTIMONY -. TO SUPPORT THE APPLICATION FOR FIELD RULES I<.ENAI GAS FIELD CONSERVATION ORDER 82 PRESENTED BY WAYNE RODGES, LANDHAN UNION OIL COMPANY OF CALIFORNIA AT A PUBLIC HEARING, OCTOBER 30, 1969 IN ANCHORAGE, ALASKA Since the discovery of the Kenai Gas Field in November 27, 1959, development has proceeded consistent with the best conservation and engineering practices and in compliance with the 320 acre spacing established by Conservation Order 30. Today, there are 18 producing gas wells in the Fie!d. Following the motion of the Alaska Oil and Gas Conservation Committee to hear testimony to define the pools within the Kenai Gas Field and to establish rules, to govern the operation of these pools, Union Oil Company of California as Operator for the Kenai Unit submitted to the Committee proposed Field Rules to be added to the previously established spacing order~ I will now read into the record the proposed Rules for operation of the Kenai Unit: PROPOSED KENAI GAS FIELD RULES The rules hereinafter set forth apply to the following described area: T4N, RllW, S.M. Section 3' Lot 4, SW¼NW¼, u..t. cuz.~.~v,, Section 4, 5, 6, 7, 8: All ' SW¼ ~ ~ · W~SE~ Section 9 N~-, , Section 16: N~x~u~ ~ ~ SW~;NW~ NW~SW~ Section ]7 and 18: All Secti.on 19' Lot 1 NE~ ~ , ~NW~, NE~- Sect ion 20' N~-NW~ ~ , SW~-NW¼ T4N, R12W, S.M. Section 1: Section 2: Section 11: Section 12: Section 13: All E~-E½ E~ ~ -~NE~ All Lots 5 thru 12, easterly 2.50 acres of Lots 13 thru 16, E-~NW.~-NE~, E~-E.~., E.!.u-~.q~,~.!..x~ E~W~'' . ~,,~,.,,,E~', ~' ~',~W~;SE~ , E~'SW~NE~', E'~NW~SE~', AIl of W~NE~, E'~NW~ lying westerly of coastline Page 2 T5N, RllW, S.M. Section 17: Section !8: Section 19: Sc~ct ion 20: Section 28: Lots 8 & 9, NW¼SW¼, S-~SW¼, All of Kenai River lying wi thin SW¼, SWC-SE¼ SE¼SE¼ 1SW~- NE~- All Lots 2, 6 thru 13 ~-SW;, S~SW~, lying westerly of coastline SE~NW~, NE S~-, NW~, S W~.NE~, NW-~ NE ~NW~ SW~ W.~SE¼ NW~NW~., S-~ , , , ~-S E~' Sections 29 and 30: All Section 31: Lots 3 thru 10, E-~-, All 'that portion lyin9 westerly of coastline Sections 32 and 33: All Section 34: NW¼NW¼, S~.NW~-,~ ~ SW¼, ~.-~SE~'~ ~ TSN, R12W, S.M. Section 25' SE¼NE¼, E-tSE~-= ~ Section 36: E½ Rule 1. Definition of Pools (a) The Kenai Field Upper Kenai Gas Pool 3 is defined as the accumulation of gas in the inter'val that correlates with the interval 4175' to 4374' in the KU 21-6 well. (b) The Kenai Field Upper Kenai Gas Pool 4 is defined as the accumulation of gas in the interval that correlates with the interval 4412' to 4558' in the KU 21-6 well. (c) The Kenai Field Upper Kenai Gas Pool 5.1 is defined as the accumulation of gas in the interval that correlates with the interval 4576' to 4859' in the KU 21-6 well. (d) The Kenai Field Upper' Kenai Gas Pool 5.2 is defined as the accumulation of gas in the interval that correlates with the interval 4880' to.5213' in the KU 21-6 well. (e) The Kenai Field Upper Kenai Gas Pool 6 is defined as the accumulation of gas in the interval that correlates with the interval 5250' to 5520' in the KU 21-6 well. Rule 2. Rule 3. Rule 4. Page 3 (f) The Kenai Field Middle l<enai Gas Pool "D" is defined as the accumulation of gas i'n the interval that correlates with the interval 9155' to 9890' in the KDU //i well. Well Spacing The permanent well spacing pattern for the Kenai Gas Field is 320 acres per we]] for each Pool defined in this order, Distance Between Wells No gas well shall be completed in a Pool less than 1980' from another gas well completed in the same pool. Casing and Cementin'g Requirements (a) Surface casing shall be landed at not ]ess than 1200' and cement shall be circulated to the surface. Casing and control equipment shall be hydrostatically tested to not less than 1,000 pounds per square inch pressure before drilling the shoe. (b) Production casing shall be landed through the completion zone and cement shall cover and extend to at least 500' above each potentially productive sand interval. The use of multi- stage cementing procedures shall be permitted, Alternativel'y, a casing string shall be adequately cemented at an intermediate point and a liner landed through the completion zone. If a liner is run, the annular space behind the liner shall be filled with cement to at least 100' above the casing shoe or the top of the liner shall be squeezed with sufficient cement to provide at least 100' of cement between the liner and casing annulus. Cement must cover all potentially productive intervals behind the liner. Cas ng and well head e~,.~ip~ent shall be hydrostat, ical ly Page 4 Rule 5. Rule 6. Rule 7. Rule 8. tested to ,lot less than 2,000 pounds per square inch pressure. Computed Bottom Hole Pressure Surveys A key well computed bottom hole pressure survey using surface measurements taken with a dead we[ght tester shall be made in each Pool upon Committee request; provided, however-, such surveys shall not be required more often than once in any calendar year. The time and length of survey, number and locations of wells, datum and other details will be determined by the Operator and. approved by the Committee. Spacing Exception Granted An exception to 320 acre spacing is granted for- well KU 21-6 which well is completed in the same Pool(s) and in the same 320 acres as well KU 14-6. Commingling Allowed Commingling of pr-oduction from 'the Upper Kenai Gas Pool 4 and the Upper Kenai Gas Pool 5.1 in the same well bore in well KU 33-32 is allowed. Administrative Approval Upon request of the applicant and a showing that the affected parties have been notified of such request, the Committee may authorize the drilling of any well at any location, or any other operation, activity or project consistent with reasonable conservation and engineering practices. Page 5 In support of these Rules, expert geologic and engineering testimony will be presented by Mr. Graydon H. Laughbaum, Jr. and Mr. James Church. Mr. Laughbaum has been previously established as an expert on February 27, 1969 in Conservation Order 71, McArthur River Field Hearing, and I request he again be accepted as an expert without presenting his qualifications at this hearing. I will now read the qualifications of Mr. Church. Mr. James Church received a B.S. degree in Petroleum Engineering from the New Mexico Institute of Mining and Technology, Socorro, New Mexico in June 1960. He has completed graduate work at California State Co.liege at Fullerton, and is currently attending classes at the University of Alaska, at Anchorage toward his master's degree. He '.,as attended seven industry sponsored schools in specilized areas of production and reservoir engineering, and is a member of the Society of Petroleum Engineers of AIME. Mr. Church has nine years engineering experience in the oil industry. He worked for Texaco, Inc. from june 1960 to February 1965. From June 1960 to June 1962 he was assigned as a field engineer at Andrews, Texas. He then went to Pecos, Texas as Area Petroleum Engineer. In December, 1963, he was transferred to Hobbs, New Mexico, as a reservoir engineer where he worked with reservoirs in West Texas and Southeastern New Mexico. He was acting Chairman of two engineering subcommittees, and represented his employer in three others. In October 1964 he was transferred to Midland, Texas as a valuation engineer. He was responsible for all development drilling valuations in his assigned district. Page 6 Mr. Church joined the Fluid Packed Pump Division of Armco Steel Corporation at Los Angeles, California, in February 1965 as a product engineer. He joined Un:on Oil Company of Californ;a in June 1966 as a reservoir engineer at Santa Fe Springs, California. He transferred to the Offshore Department in March, 1967 where he was involved with construction of the Grayling Platform. He came To Alaska in June 1967 as Production Engineer for the Grayling Platform. At present he is Product on and Reservoir Engineer for the Kenai Gas Field. I reqLJest you ackn'awledge Mr. Church as an expert. GEOLOGIC TESTIMONY TO SUPPORT THE APPLICATION FOR FIELD RULES UPPER KENAI GAS POOI..S 3, 4, 5.1, 5.2 AND 6, AND MIDDLE KENAI "D" ~I~AS POOL KENAI UNIT CONSERVATION ]?ILE NO. 82 PRESENTED BY .GRAYDON H. LAUGHBAUM, JR., DISTRICT DEVELOPMENT GEOLOGIST UNION OIL COMPANY OF CALIFORNIA AT A PUBLIC HEARING - OCTOBER 30, 1969 -ANCHORAGE, ALASKA GEOLOGIC T. iiSTIMONY The following geologic testimony is presented to support field rules for the Kenai Gas Field, Upper Kenai Gas Pools 3, 4, 5.1, 5.2 and 6, and the Kenai Gas Field Middle Kenai "D" Gas Pool within the Kenai Unit area shown on Exhibit I. Exhibit I is a current structure map on Top Upper ]<ena. i Gas Pool 4, a principal objective in the field. The exhibit is at a scale of 1" = 1000'. The Kenai Structure, as mapped by information from drilling to date, is a relatively simple asymetrical ani. icline. The axis of the anticline trends approximately N 03© W. The axis shifts easterly with depth. Flank dip varies from 4 to 6© 0n o the east, and tip to 14 on the west. Exhibit II is a current structure map on Top Middle Kenai "D" Interval, drawn on the base of a coal, approximately 160 feet above the top of the Kenai Gas Field Middle Kenai "D" Pool. This contour point was selected because it has dis- tinct continuity across the structure in the Middle Kenai interval. Map scale is 1" --- 1000'o May I direct your attention to Exhibit III, a composite electric log of the Union Kenai Unit 21-6 and Kenai Deep Unit No. 1, 'which illus- trates the productive Kenai Gas Field Upper and Middle Kenai gas pools. As defined in our proposed field rules, the stratigraphic limits of the Kenai Gas Field Upper Kenai gas pools correlate 'with the follow- ing intervals by drilled depth in the directed well, Kenai Unit 21-6: Upper Kenai Gas Pool 3 4175-4374 Upper Kenai Gas Pool 4412-4558 {' Upper.Kenai Gas Pool 5.1 Upper Kenai Gas Pool 5.2 4576-4859 4880-5213 Upper Kenai Gas Pool 6 5250-5520 The stratigraphic limits of the Kenai Gas Field Middle Kenai "D" Gas Pool correlate with the interval 9155-9890, drilled depth, in the directed well, Union Kenai Deep Unit No. 1. Exhibit IV is a northwest-southeast structure section which extends across the central part of the field and includes Kenai Unit 21-6 and Kenai Deep Unit No. 1. T.he Middle Kenai "D" Gas Pool occurs in the upper part of the Middle Ground Shoal member of the Tyonek Formation of the Kenai group. The "D" Gas Pool is composed of loose to firm, silty to pebbly sand and sandy conglomerate interbedded with. siltstone and coal. Varia- tions in sand thickness and amount of clay in the .sands affect produc- tivity. Loss of sa. nd, a possible upstructure permeability barrier and presence of gilsonite in the "D'" Pool resulted in no fluid recovery on the northeast flank of the structure in Kenai Deep Unit No. 3 (21-5). The area of accUmulation for the Middle Kenai "D" Gas Pool is not yet. defined. The projected downdip limit is at or below -8800 feet on the Top "D" Interval Structure Map, Exhibit II. The Upper Kenai, Kenai Gas Pools 3, 4, 5.1, 5.2 and 6 occur uncon- formably above the Middle Kenai Beluga Formation which overlies the the Tyonek Formation. The pools occur in the lower member of the Sterling Formation of the Kenai group. The base of the Upper Kenai Gas Pool 6 is approximately 4100 feet, vertical interval, above the top of the Middle Kenai "D" Gas Pool. The Upper Kenai G~s Pool 6 is composed of friable to unconsolidated sand to clayey sand, with minor interbedded siltstone and coal. Analysis of available conventional cof-e data from Kenai Unit 14-4 and Kenai Unit 41-19 resulted in perm- eability values which ranged from 118 to 392 millidarcies, and porosity values from 29.9% to 37.7%. Data from drilling to date indicates loss of sand in the lower part of the pool, due to silting-out, occurs in the northeast area of t~e field. The Upper Kenai Gas Pool 5.2 overlies Gas Pool 6, separated by a silt- stone bed up to 50' thick. The Upper Kenai Gas Pool 5.2 is character- istically made up of fine-grained sand grading to coarse sand and con- glomerate at the base. Drilling shows that the upper interval of the pool is not developed in the east part of the structure. No core data is available in Gas' Pool 5.2. The Upper Kenai Gas Pool 5.1 occurs above Gas Pool 5.2, and is sep- arated from Pool 5.2 by a siltstone interval. Gas Pool 5.1 is comprised of siltstone, silty to coarse sand, and minor coals. Values from analysis of conventional cores inKenai Unit 14-4 and Kenai Unit 41-19 ranged from 762 to 10,250 millidarcies permeability and 33.3% to 38.9% porosity. Average permeability was 3949 millidarcies and porosity 36.1%. Sand in the upper interval of the pool is missing in the northeast and southwest parts df the structure fn the Kenai Unit 33-32 and Kenai Unit 43-12. Upper Kenai Gas Pool 4 overlies Pool 5.1 'with separation of pools established by a siltstone bed. Slightly silty to medium-grained sands, interbedded with siltstone and minor coal, comprise Upper Kenai Gas Pool 4. Date. available from two conventional core samples the Kenai Unit ].4-4 showed a porosity of 37.8% and average perm- eability of 2818 millidarcies. Acharacteristic of the Upper Kenai Gas Pool 4 is that all individual sands in the pool vary greatly in thick- ness from well to well. Data. show that sand in the lower part of the pool is not developed on the crest of the structu.re or in the upper part of the po°l on the northeasterly and west flanks ana ~outh plunge of the structure. Upper Kenai Pool 3 is stratigraphically above Pool 4. Siltstone and coal beds occur below the base of Upper Kenai Pool 3. The Pool is comprised of clayey to medium-grained sand interbedded with silt- stone and coal. A.n erratic pattern of sand deposition is evident through- out the field area. Sand pinchout varies within the 9ooland occurs on the crest or on the flanks of the structure. No conventional core data is available in Pool 3. The approximate area of gas accumulation for the Upper Kenai gas pools has been determined by cores, log analysis, drill stem test data, and production data. The projected maximum limit of accumulation occurs at or below the -4200 contour on the structure map, Top Upper Kenai Gas Pool 4, Exhibit i. Detailed mapping of individual pools, based on well data acquired to date, shows that the vertical subsea limit of accumulation varies with each pool. The Kenai Gas Field, Upper Kenai Gas Pool 3, 4, 5.1, 5.2, 6 and Middle Kenai "D" Gas Pool are six separate and distinct pools. Stratigraphic separation, variable lithology, and accumulation limit difference support the applicant's request to establish separate pools. Erratic and u~pre- dictable sand deposition and areal lithology changes, typical, of contin- ental deposition, support that established 320 acre spacing should be applied to separate pools and confirm our request for closer distance between completion intervals in order to provide' needed tolerance to reach the best geologic target. Loss of anticipated sand development establishes that exceptions to field rules to allow.' closer spacing in Section 6 and commingling of pools in Ke. nai Unit 33-32 should be granted. All exhibits presented in this testimony were either prepared by me or under my supervision. 5 ENGINEERING TESTIMONY TO SUPPORT THE APPLICATION FOR FIELD RULES UPPER KENAI GAS POOLS 3, 4, 5.1, 5.2 AND 6, AND MIDDLE KENAI "D" GAS POOL KENAI UNIT CONSERVATION FILE NO. 82 PRESENTED BY j. E. CHURCH, PRODUCTION ENGINEER UNION OIL COMPANY OF CALIFORNIA AT A PUBLIC HEARING - OCTOBER 30, 1969 - ANCHORAGE, ALASKA ENGINEERING TESTIMONY INTRODUCTION The purpose of my testimony is to support Union's application for field rules and pool definitions for the Kenai Gas Field. Pressure data will be presented to show that the ~arious pools, previously called modules, are separate reset- voirs, and have been operated as such. Comment will also be made on Union's proposed' field rules for pressure surveys, mh~imum distance between wells, and casing cementing programs. The Kenai Gas Field is operated as two participating' areas l~ereafter referred to as Kenai Unit and Kenai Deep Unit. The Kenai Unit encompasses the Upper Kenai gas pools 3, 4, 5.1, 5.2 and 6. The Kenai Deep Unit refers to the Mid- die Kenai "D" gas pool. Gas production from each well completion is metered individually. Present development of the Kenai Unit consists of 15 producing wells. Of these, 10 are dual completions with the pools segregated by casing packers and 5 are single cbmpletions. There are three completions in Pool 3, four in Pool 4, one in Pooi 4 and 5.1 (commingled), eight in Pool 5.1, two in Pool 5.2 and seven in Pool 6, for a total of 25 producing completions. In addition, one non-commercial Pool 6 completion is shut-in and one is abandoned. Specific well completions are shown in Appendix A. Development of the Deep Unit consists of three wells. Two are equipped with a Single tubing string and flow line. The other has two strings of tubing and two flow lines to facilitate handling of production from the well. Page 2 Exhibit V is a tabulation showing (1) pressure datx.~m, (2) original reservoir pressure at datum, (3) original pressure difference between pools and its gradi- ent value, and (4) computed gas gradient between each of the Middle Kenai Gas Pools. The original pressure gradients between pools are the same order of magmitude as the ggobaric gradient in the area, as illustrated in exhibit V, column 5. From this, it is concluded that each of the pools, is a separate entity. The Kenai Unit wells were dually completed to (1) segregate production from the various pools until after it is measured at the surface, (2) to permit pressure measurements in the various pools, and (3) to provide more manageable produc- ing units. To achieve maximum field deliverability from the minimum number of wells, it is necessary to selectively produce gas from the individual pools to maintain a proper pressure balance as they decline. This need arises from (1) the multiple pool configuration, (2) unequal pool volumes, and (3) controlled producing rate from any given well consistent with sound engh~eering principles and prudent practice. Potential producing capacity in one well cannot be used to offset lesSer potential in another well. Pool segregation is required to maintain proper control of pressure decline in the pools. PRESSURE SURVEYS Bottom hole pressures are currently computed from surface pressure measure- ments using the Cullander-Smith method. The accuracy of this method was check- ed by comparing measured, and computed subsurface pressures from 36 surveys. Page 3 The average of the measured values was 2030.5 psia and the average of the corn- puted values was 2031.4 psia. The difference was 0.9 psia, or 0.04 percent. Approximately 65 percent of the surveys agreed within +_ 0. $ percent, and all were within +- 1.5 percent. It was concluded that computed values are at least as accurate as measured pressures, and are possibly more accurate for most wells due to fewer seurc~.s of error in the measurement. Annual key well pressure surveys are recommended to determine average reset- voir pressure in each pool. DISTANCE BETWEEN WELLS A minimum distance of 1980 feet' between wells will provide needed flexibility in developing the field, and will reduce the risk of drilling a poor or non-commercial well. Such flexibility will become increasingly important as development proceeds toward the edges of the field. It is desirable to stay as far as possible from the wedge area of the gas-water contact to reduce the risk of water coning and sub- sequent high water production. The latter would result in premature well abandon- ment which would result in loss of otherwise recoverable reserves and economic waste. It is necessary to directionally drill wells in the field from gravel fill islands be- cause much of the ground surface is swamp. In drilling to deeper objectives, the upper pools must be available for completion if the lower intervals 'are not develop- ed or are not productive. In directed wells, convergence of the well bore back to the drill site results in penetrations of the shallow pools at a greater density and at less distance betwveen existing and potential completion intervals in the same Page 4 t pool than would otherwise occur. Based bn geologic and engineering studies, the requested distance between wells completed in the same pool will.opti- mize field development, and will provide needed flexibility in drilling to deeper objectives. A distance of 1980' between gas wells on 320 acre spacing conforms with industry 'standards and is consistent with distance between wells for other spacing patterns. Statewide rules require a minimum distance of 3000' be- tween wells on 640 acre spacing. Since the maximum distance between wells :.. · is automatically reduced with spacing, it is reasonable to reduce minimum distance also'.. CASING AND CEMENTING The proposed field rules to govern casing and cementing practices for the Kenai Gas Field are ade. quate to protect all porous zones. It is normal prac- rice on Kenai Unit wells to circulate cement to surface on both the surface and production casing strings. On Deep Unit wells, intermediate casing is normally set through all the Upper Kenai Sands and cemented to surface. Production casing is cemented to approximately 500 feet above the shoe of the intermediate casing. The liner, if one is run, is cemented over its entire length and at least 100' above the shoe of the casing with cement being circulated back into the casing. The liner lap is tested to 3000 psi. prepared the exhibits presented with this testimony. 24 3O 29 2O Z2 27 RIIW £XHIBIT T AL ASKA STRUCTURE CONTOUR TOP U~R KENAI GAS KENAI GAS FIELD ,, ~ . ,,, - .-F 22' A . 4- i EXHIBIT TI STRUCTURE CONTOUR TOP MIDDL, E NF..'NA1 ' [,)' ~NTERVAL KEN&I GAff, K£NAI UNIT ...... ,L1.';,t-.~...;,, ,, EXHIBIT III ENCI, OSED IN POCKET APPENDIX A KENAI GAS FIELD WELL COMPLETIONS BY SITE AND POOL SITE/WE LL NO. UOMPLETION TYPE Site 33-30 COMPLETED POOLS KU 33-30 Single 5.1 KU 44-30 Dual 4 and 6 Site 43-32 KU 33-32 Dual KU 21-5 Dual Site 34-3]. 4-5.1 and 6 3 and 5.1 KU 34-31 Single 6 KU 11-6 Dual 3 and 4 KU 21-6 Dual 5.1 and 6 Site 33-1 KU 33-1 Single Site 14-6 5.1 Site 14-4 KU 14-4 Single Site 41-19 KU 41-19 KU 44-18 P&A Shut -in Non -commercial * Equipped with two tubing strings. Site 41-7 ' KU 43-6 Dual 5.1 and 6 KU 43-6A Dual 4 and 5.2. KU 43-7 D'ual 5.1 and 6 KDU 2 Single "D" KDU 4 Single * "D" KU 14-6 Single 6 KU 21-7 Dual 5.1 ,-md 5.2 KU 43-12 Dual 3 and 5'. 1 KDU 1 Single "D" Pool Kenai Unit 3 4 5.1 5.2 6 Kenai Deep Unit D (1) Pressure Datum (Subsea) EXHIBIT V -3700 -3960 -4025 -4125 -4565 -8910 PRESSURE DATA KENAI GAS FIELD KENAI PENINSULA BOROUGH, ALASKA (s) (2) (3) (4) Original Pressure (6) Difference Original Difference In Gradient Between Computed Gas in Datum Original Datum Pools Gradient Between Datum Pressure* Pressure (4) (2) Pools (feet) (psia) (psi) (psi/foot) (psi/foot) 1740 260 115 0.442 ' 0.038 1855 65 100 1884 29 0.446 0.038 46 0.460 0.045 1930 440 208 0.473 0.045 2138 4346 *Estimated by extrapolating a plot of "P/Z vs. Cumulative Production" to zero cumulative production. Note- Computed geobaric gradients from sea level to pressure datum are 0.470 for pool 3, 0.468 for pools 4, S.1, 5.2, and 6, and 0.488 for the "D" pool. JEC:mgl 10-21-69