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Home My WebLink AboutCO 432 B Index Conservation Order 432B Kuparuk River Unit 1) September 4, 2002 Phillips Alaska Inc. request for pool area expansion for DS 3S 2) October 31, 2002 Phillips Alaska Inc. revised request for pool area expansion for DS 3S 3) September 27, 2002 Notice of Public Hearing, Affidavit of Publication 4) April 1, 2003 ConocoPhillips submittal of proposed pressure survey plan for 2003 Conservation Order 432B STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Re: THE APPLICATION OF ) ConocoPhillips Alaska, Inc. for an ) order to expand the affected area for ) pool rules for development of the ) Kuparuk River Oil Pool, Kuparuk ) River Field, North Slope, Alaska ) Conservation Order No. 432B Kuparuk River Field Kuparuk River Unit Milne Point Unit Kuparuk River Oil Pool December 12, 2002 IT APPEARING THAT: 1. By application dated September 4, 2002 ConocoPhillips Alaska, Inc., formerly known as Phillips Alaska, Inc., seeks to expand the affected area of Conservation Order No. 432A and Area Injection Order 2A, to accommodate Kupamk River Oil Pool development at Drill Site 3S in the Kuparuk River Unit ("KRU"). 2. Notice of opportunity for public hearing was published in the Anchorage Daily News on September 27, 2002. 3. No comments concerning the application or timely requests for a public hearing were ' received. FINDINGS: 1. Operator ConocoPhillips, Inc. ("CPA") is the operator of the Kuparuk River Oil Pool within the Kupamk River Unit. 2. Oil Pool The Kuparuk River Oil Pool in the Kupamk River Field is defined as the accumulation of oil that is common to and correlates with the accumulation found in the Atlantic Richfield Company West Sak River State No. 1 well between the depths of 6,474 and 6,880 feet. The justification for the expansion of the pool centers on the discovery in the exploration wells Palm #1 and #lA, which were drilled during the 2001 winter season. 3. Affected Area For The Kuparuk River Oil Pool Rules a. Conservation Order 349A dated December 23, 1996 describes the affected area to which the Kuparuk River Oil Pool rules apply. b. Conservation Orders 432 and 432A (dated July 22, 1998 and August 11, 1999 respectively) incorrectly referred to the affected area described in CO 349 (dated Conservation Order 432B December 12, 2002 Page 2 December 16, 1994 and repealed by CO 349A on December 23, 1996). The correct reference should have been to CO 349A. C. Conservation Order 471, dated May 29, 2002 defines the Borealis Oil Pool in the Kuparuk River Formation within the Prudhoe Bay Unit ("PBU"). CO 471 contracted the following sections from CO 349A: T12N-R10E Sections 13, 24; T12N-R11E Sections 18, 19, 20, 29, 30, 32, and 33; T11N-R11E Sections 3,4,9,10,11,14,15,24, and 25. 4. Proposed Expansion CPA requests expansion of the affected area to include the following sections: T12N, R7E Sections 1,2,11,12,13,14,15,16,21,22,23, and 24. o Strati~ra~}h.v The Kupamk River Formation is a sequence of clastic sediments deposited on a shallow marine shelf during Neocomian (Early Cretaceous) time, about 140-120 million years ago. The formation is divided into Upper and Lower Members. These two Members are comprised of 4 Units, in ascending order, Units "A", "B", "C", and "D". The "A" and "C" units are the pay-bearing intervals in a major portion of the field. The Kupamk River "C" Unit is composed of sandstones with subordinate conglomerates and lesser shales. "C" sediments were deposited in a variety of marginal marine environments. In general, conditions were marine to the east, within and beyond the KRU. In the west, evidence from secondary cements as well as trace fossils suggests a nearby source of fresh water and a shoreline. The Unit is divided into four intervals, "C 1" through "C4". Intervals are successively younger upward, and axes of deposition shift successively southwest with time. Throughout the larger part of the KRU, "C" sand deposition and trends are controlled by syndepositional, northwest-trending normal faults. Within the DS 3S area, the Palm #1 and #IA wells penetrated reservoir quality sands in the Hauterivian Kuparuk River "C4" interval at a depth of approximately 5750-5800 feet TVD. The Kupamk River "A" Sand was found to be absent through truncation by the Lower Cretaceous Unconformity (LCU) and the "C 1" through "C3" intervals are absent because of non-deposition in the area. The Kuparuk "C4" sand reservoir is comprised of bioturbated, fine to medium-grained sandstone with variable amounts of glauconite, clay pellets, and siderite cement. It is separated from the underlying Miluveach mudstones by the regional LCU. A transgressive surface of erosion marks the contact between "C4" sandstones and overlying mudstones of the Kalubik Formation. The "C4" interval in the area is interpreted to represent transgressive shoreface deposits on the flank of the Kuparuk trough. Accommodation and preservation of these shoreface deposits was created in part by deep-seated northwest-southeast trending normal faults. Conservation Order 432B December 12, 2002 Page 3 The gross reservoir thickness logged in the Palm #1 and lA wells ranges from 30 feet to 35 feet, with a corresponding net-to-gross ratio of approximately 0.73. A 15% porosity cutoff from wire line log derived porosity data Log model is used to count net pay. Average pay porosity ranges from 19% to 21%. Calculated log model water saturations for the Palm #1 and #lA wells are 12% and 13% respectively. Permeability ranges from less than 1 md to almost 1000 md. Fine scale (inches) changes in siderite composition and concentration play a dominant role in determining sandstone reservoir quality. Average permeability determined from well testing at Palm #lA is approximately 100 md. Seismic mapping indicates that the gross thickness of the "C4" reservoir ranges from 7.5 feet to 35 feet in the DS 3S area. 6. Structure The top reservoir lies at a depth of 5750' to 5800' TVD subsea in the DS 3S area. The oil-water contact in the main Kuparuk reservoir is at-6570' subsea and is approximately 800' down structure from the Drill Site 3S area. The DS 3S extension of the Kuparuk River Oil Pool is largely located west of a series of closely spaced north- south trending normal faults that, prior to the drilling of the Palm and Palm lA exploratory wells, had coincided with the western limit of Kuparuk River Unit production. The western portion of the DS 3S extension of the Kupamk River Oil pool is moderately faulted and gently dipping. 7. Pool Limits The western, northern and southern limit of the "C4" sand in the DS 3S area is based on seismic mapping techniques. Additional drilling will be required to more accurately define the boundaries. The thickness and areal extent of the "C4" sand towards the east is also uncertain. However, pressure communication between the "C4" in the DS 3S area and the main Kuparuk reservoir located approximately three miles apart is suggested because of the existence of similar reservoir pressures- approximately 650 psi above original. 8. Fluid Contacts There is no evidence of free gas accumulation or an oil water contact within the DS 3S extension of the Kupamk River Unit, Kupan~ River Oil Pool. 9. Fluid Properties Reservoir fluid properties are estimated from fluids recovered during RFT sampling on the Palm #1 well and a cased-hole test of the Palm #lA well. The range of AP1 gravities from these samples is 24-26° and solution GOR is approximately 485 SCF/STB. Paraffin and asphaltene content is low. The fluid sample measurements show similarities to crude properties in the main Kuparuk River Field, Kuparuk River Oil Pool. 10. Hydrocarbon Recovery CPA estimates approximately 74 million barrels oil ("MMBO") originally in place ("OOIP") in. the Drill Site 3S area that will be developed with 20 wells. An enhanced recovery process will be initiated within six months after first production. Studies conducted by CPA resulted in selecting the alternating cycling of water and miscible gas ("MWAG") process. The MWAG process yielded greater recoveries than other processes evaluated which included primary, waterflood, miscible injection ("MI") and lean gas flood. Recovery is expected to be 36 MMBO or about 48% of the OOIP including primary, waterflood and enhanced recovery. Estimated recoveries from simulation studies of the DS 3S area are primary- 20%, waterflood- 20% and MWAG - 6-8%. As a comparison, ongoing MWAG processes in the main Conservation Order 432B December 12, 2002 Page 4 Kupamk reservoir "C" sands to the east have experienced incremental oil recovery of 8%-12% OOIP over base waterflood recoveries. 11. 12. The miscible injectant will initially be the same as that currently used in the KRU Large Scale EOR Project. It is manufactured at Kuparuk Central Production Facility ("CPF- 1") and CPF-2 by blending lean gas from the KRU's production facilities with solvent (i.e., light hydrocarbon liquid streams) from the PBU and KRU. The final phase, lean gas injection, is expected to maximize recovery of the light hydrocarbon liquids that were injected into the reservoir as part of the MWAG stream. The source of the lean gas will likely be KRU's CPF-2. However, other potential gas sources will be considered. Development Plan DS 3S development involves the addition of one new drill site to the Greater Kuparuk Area ("GKA"), along with required ancillary and support facilities. The drill site is designed to accommodate a total of 26 wells on 20-foot centers. Plans to develop the DS 3S area on nominally a 160-acre well spacing are consistent with Rule 3 of Conservation Order No. 432A dated August 11, 1999. The project will include 12 producer and 8 injector wells. The Palm lA exploration well will be completed as a producer. The Drill Site will tie into the existing GKA infrastructure at DS 3G and utilize existing Central Production Facility 3 (CPF-3) to process produced fluids. A new 8-inch water injection line runs from DS 3G to 3S and an 8-inch MI injection line runs from KRU DS 3F past DS 3G to DS 3S. The facilities are designed for daily operations to require minimal operator presence. All data gathering and routine operations are to be accomplished remotely from CPF 3 or DS 3S control room. Facilities to be installed at the drill site include production, test, water injection and MI injection lateral piping and headers; test separator for well testing; and instrumentation, control, and communication equipment. Testing can take place remotely through a divert valve system, which redirects the flow from the production header to the test separator. A 4.8 mile road will connect the new drill site to the existing road system is routed from DS 3G to DS 3S. Production is currently scheduled for start-up during 4th quarter 2002. Initial injection support would commence no later than six months after first production. Well Design and Completion CPA will construct two types of wells to develop the Drill Site 3S area. Injectors and producers will be constructed with either long string or top set completions. A long string completion will employ 30" conductor casing to approximately 75 feet, 9-5/8" surface casing set below the base of the West Sak Formation, 7" production casing run from surface through the Kuparuk River Formation. Top set completions will employ 30" conductor casing to approximately 75 feet, 9-5/8" surface casing set below the base of the West Sak Formation, with 7" Conservation Order 432B December 12, 2002 Page 5 intermediate casing mn from surface to just above the Kupamk River Formation with a 3-1/2" production liner set through the production interval. Production wells will be equipped with 3-1/2" tubing and completions will include down hole "jewelry" that will allow the use of artificial lift, including hydraulic jet pump, hydraulic piston pumps, lift gas, or plunger lift systems to be installed as needed. Initially, gas lift is planned. 13. Reservoir Surveillance Plans Reservoir surveillance plans adhere to the requirements of CO 432A. CONCLUSIONS: 1. The Kuparuk River Oil Pool rules apply to the affected area described in CO 349A, as modified by CO 471. 2. There is sufficient data to support expansion of the affected area for Kupamk River Oil Pool rules to include the Drill Site 3S area. Expansion under this order will prevent waste, protect fresh water, protect correlative rights, and ensure greater ultimate recovery. 3. It is appropriate to incorporate the affected area into this order. NOW, THEREFORE, IT IS ORDERED: 1. This Conservation Order supersedes Conservation Order 432A, dated August 11, 1999, and Conservation Order 349A, dated December 23, 1996. The findings, conclusions and administrative record for Conservation Orders 432A and 349A are adopted by reference and incorporated in this decision. 2. The affected area of this conservation order is expanded to include T12N, R7E Sections 1,2,11,12,13,14,15,16,21,22,23, and 24. 3. In addition to statewide requirements under 20 AAC 25 (to the extent not superseded by these rules or other conservation orders), the following rules apply to the Kupamk Oil Pool within the following affected area: Conservation Order 432B December 12, 2002 T9N, R6E, U.M. SECS. 1,2,11,12,13, and 14. T9N, R7E, U.M. SECS. 1,2,3,4,5,6,7,8,9,10,11,12,13, 14,15,16,17 and 18. T9N, R8E U.M. SECS. 1,2,3,4,5,6,7,8,9,10,11,12,13, 14,15,16,17, and 18. T9N, R9E, U.M. SECS. 1,2,3,4,5,6,7,8,9,10,11,12,15, 16,17and 18. T9N, R10E U.M. SECS. 1,2,3,4,5,6,7,8,9,10,11 and 12. T 1 ON, R6E, U.M. SECS. 1,2,3,4,9,10,11,12,13,14,15,16,21, 22,23,24,25,26,35 and 36. T 1 ON, R7E, U.M. ALL. T 1 ON, R8E, U.M. ALL. T 1 ON, R9E, U.M. ALL. T10N, R10E, U.M. ALL T10N, R11E, U.M. SECS. 5,6,7,8,17,18,19 and 20. T11N, R6E, U.M. SECS. 25,26,35 and 36. T11N, R7E, U.M. SECS. 1,2,3,4,9,10,11,12,13,14,15,16, 17,18,19,20,21,22,23,24,25,26,27,28,29, 30,31,32,33,34,35 and 36. T1 IN, R10E, U.M. ALL Page 6 T 12N, R7E, U.M. SECS. 1,2,11,12,13,14,15,16,21,22,23,24,25,26,35 and 36. T 12N, R8E, U.M. ALL T 12N R9E U.M. ALL T12N, R10E, U.M. SECS. 1,2,3,4,5,6,7,8,9,10,11,12,14,15,16,17, 18,19,20,21,22,23,25,26,27,28,29,30,31,32,33, 34,35 and 36. T12N, R1.1E, U.M. SECS. 3,4,5,6,7,8, and 31. T 13N, R8E, U.M. SECS. 13,14,23,24,25,26,27,28,33,34,35 and 36. T 13N, R9E, U.M. ALL T13N, R10E, U.M. ALL T13N, R11E, U.M. SECS. 7,8,16,17,18,19,20,21,28,29,30, 31,32, and 33. T 14N R9E U.M. SECS. 1,2,3,4,5,6,7,8,9,10,11,12,13,14, 15,16,17,18,20,21,22,23,24,25,26,27, 28,29,32,33,34,35 and 36. T14N, R10E U.M. TllN, R8E, U.M. ALL TllN, R9E, U.M. ALL SECS. 15,16,17,18,19,20,21,22,27,28,29, 30,31,32,33,34 and 35 T 15N, R9E U.M. State lands within SECS. 25,26,27,31, 32,33,34,35, and 36. T11N, R11E U.M. SECS. 5,6,7,8,16,17,18,19,20,21,22,23,26,27,28, 29,30,31, 32,33,34,35 and 36. Conservation Order 432B December 12, 2002 Page 7 Rule 1. Name of Field Oief. CO 173) The name of the field shall be the Kupamk River Field. (Source CO 173) Rule 2. Def'mition of Pool 0tef. CO 173) The name of the pool in the Kuparuk River Field shall be the Kuparuk River Oil Pool and is defined as the accumulation of oil that is common to and correlates with the accumulation found in the Atlantic Richfield Company West Sak River State No. 1 well between the depths of 6,474 and 6,880 feet. (Source CO 173) Rule 3. Well Spacing 01ef. CO 173, & 182) Not more than one well may be drilled on any governmental quarter section or governmental lot corresponding to it nor may any well be drilled on a governmental quarter section or governmental lot corresponding to it which contains less than 125 acres, nor may the pool be opened in a well bore that is closer than 500 feet to any property line nor closer than 1,000 feet to the pool opened to the well bore in another well except that: (Source CO 173) In Sections 5, 6, 7, 8, 15, 16, 21, and 22, TllN, R10E, U.M., an unrestricted number of wells may be drilled. (Source CO 182) Rule 4. Casing and Cementing Requirements (Ref. CO 173~ 190, 193~ 203, 209, and 229) (a) Casing and cementing requirements are as specified in 20 AAC 25.030, CASING AND CEMENTING, except as modified below. (Source CO 173) (b) For proper anchorage and to prevent an uncontrolled flow, a conductor casing shall be set at least 75 feet below the surface and sufficient cement shall be used to fill the annulus behind the pipe to the surface. (Source CO 173) (c) For proper anchorage, to prevent an uncontrolled flow, and to protect the well from the effects of permafrost thaw-subsidence and freeze back, a string of surface casing shall be set at least 500 measured feet below the base of the permafrost section but not below 2700 feet true vertical depth. Sufficient cement shall be used to fill the annulus behind the casing to the surface. (Source CO 173, CO 193, 203, 209 & 229 - authorized depths of surface casing for various Drill Sites are detailed on following table) 1) Drill Pad 2Z Kupamk River oil pool wells may be drilled to a maximum depth of 3250 feet true vertical depth before surface casing is set so long as drilling fluid densities are monitored and maintained at 10.0 pounds per gallon. (Source CO 190, modified by AA 190.01 - 190.15) 2) Drill Pad 2X and 2C Kupamk River oil pool wells may be drilled to a maximum depth of 2975 feet true vertical depth before surface casing is set. (Source CO 190, modified by AA 190.01 - 190.15) Conservation Order 432B December 12, 2002 Page 8 3) In the event that geologic conditions are not as anticipated, the Commission may change the maximum depth for setting surface casing by administrative action, provided a recuest, in writing, is timely submitted. (Source CO 190) Authorized Surface Casing AA No. Drill Sites Depth Pursuant to Rule 4(c) CO 190 AA 190.1 1F 3350' TVD AA 190.4 2Z 3450' TVD AA 190.6 2K 3000' TVD AA 190.7 2K 3452' TVD AA 190.10 3G 3500' TVD AA 190.11 lA 3900' TVD AA 190.12 3R 4200' TVD AA 190.13 1H 4100' TVD AA 190.14 1H 4400' TVD AA 190.15 1Y 4400' TVD Authorized Surface Casing Conservation Drill Sites Depth Pursuant to CO 173 Order Rule 4(c) and 20 AAC 25.035(b) CO 193 2A, 2B, 2D, 2F, 2G, 2H, 2V 3200' TVD CO 203 IL, IQ, IR, 2E, 2U, 2W, 3B, 3800' TVD 3C CO 209 IR, 2A, 2H, 2T, 3A, 3B, 3C, 4150' TVD 3F, 3.1, 3K, 3M, 3N, 30, 3Q CO 229 2M, 3H 3700' TVD (d) The surface casing, including connections, shall have minimum post-yield strain properties of 0.9% in tension and 1.26% in compression. (Source CO 173) 1) The only types and grades of casing, with threaded connections, that have been shown to meet the requirements in (d) above and have been approved for use as surface casing are the following: (A) 13 3/8 inch, 72 pounds/foot, L-80, Buttress; (B) 13-3/8 inch, 72 pounds/foot, N-80, Buttress; (C) 10-3/4 inch, 45.5 pounds/foot, K-55, Buttress; 2) The Commission may approve other types and grades of surface casing upon a showing that the proposed casing and connection can meet the post-yield strain requirements in (d) above. This evidence shall consist of one of the following: (A) Full scale tensile and compressive tests, (B) Finite element model studies; or, (C) Other types of axial strain data acceptable to the Commission. Conservation Order 432B December 12, 2002 Page 9 (e) (f) Other means for maintaining the integrity of the well from the effects of permafrost thaw-subsidence and freeze back may be approved by the Commission upon application. (Source CO 173) The Commission may approve alternative completion methods (to 20 AAC 25.030(b)(4) and (5)) upon application and presentation of data that shows the alternatives are based on accepted engineering principles. Such alternative designs may include: (Source CO 173) 1) Slotted liners, wire wrapped screen liners, or combinations thereof, landed inside of open hole and may be gravel packed; 2) Open hole completions provided that the casing is set not more than 200 feet above the productive zone. Rule 5. Automatic Shut-In Equipment (Reft CO 173 & 348) (a) Each well shall be equipped with a Commission approved fail-safe automatic surface safety valve system (SVS) capable of preventing uncontrolled flow by shutting off flow at the wellhead and shutting down any artificial lift system where an over pressure of equipment may occur. (Source CO 348) (b) The safety valve system (SVS) shall not be deactivated except during repairs, while engaged in active well work, or if the pad is manned. If the SVS cannot be returned to service within 24 hours, the well must be shut in at the wellhead and at the manifold building. (Source CO 348) 1) Wells with a deactivated SVS shall be identified by a sign on the wellhead stating that the SVS has been deactivated and the date it was deactivated. (Source CO 348) 2) A list of wells with the SVS deactivated, the dates and reasons for'deactivating, and the estimated re-activation dates must be maintained current and available for Commission inspection on request. (Source CO 348) (c) A representative of the Commission will witness operation and performance tests at intervals and times as prescribed by the Commission to confirm that the SVS is in proper working condition. (Source CO 348) Rule 6. Safety Flares (Reft CO 173) Repealed by 20 AAC 25.235. Rule 7. Gas-Oil Ratio Tests (Reft CO 173 & 262) Repealed by Conservation Order 262, dated October 23, 1990. Rule 8. Pressure Surveys (Reft CO 173~ 230, 276 & 432) (a) A bottom-hole pressure survey shall be taken on each well prior to initial sustained production. (Source CO 230) Conservation Order 432B December 12, 2002 Page 10 (b) The operator shall obtain pressure surveys as needed to effectively manage hydrocarbon recovery processes subject to an annual plan outlined in (d) of this rule. (Source CO 432) (c) Bottom-hole pressures obtained by a static buildup pressure survey, a 24-hour shut-in instantaneous test, a multiple flow rate test or an injection fall-off test will be acceptable. Calculation of bottom-hole pressures from surface data will be permitted for water injection wells. (Source CO 230) (d) Data from the surveys required in this rule shall be filed with the Commission by April 1 of the subsequent year in which the surveys are conducted. Along with the survey submittal, the operator will provide a proposed survey plan for the upcoming year. Reservoir Pressure Report, Form 10-412, shall be utilized for all surveys with attachments for complete additional data. Data submitted shall include, but are not limited to, rate, pressure, time, depths, fluid gradient, temperature, and other well conditions necessary for complete analysis of each survey being conducted. The pool pressure datum plane shall be 6,200 feet subsea. (Source CO 230, 432) (e) Results and data from any special reservoir pressure monitoring techniques, tests, or surveys shall also be submitted as prescribed in (d) of this rule. (Source CO 230) (f) Upon application by the operator, the Commission in its discretion may administratively approve exceptions to this rule. (Source CO 230) Rule 9. Productivity Profiles (Re/CO 173, 276 & 432) (a) During the first year of production, a production survey shall be run in each well that has multiple sand intervals open to the well bore. (Source CO 173) (b) Subsequent surveys shall be run in wells that exhibit uncharacteristic changes in performance. Subsequent surveys shall also be required in wells which have had remedial work performed to change the production profile unless the remedial work results in only one sand interval being open to the well bore. (Source CO 173,276) (c) All completed production surveys taken during a calendar year be filed with the Commission by April 1 of the subsequent year. The Commission may request data be provided in advance of an annual submittal if required. (Source CO 173,432) (d) By administrative order, the Commission shall specify additional surveys should it be determined that the surveys submitted under (a) and (b) are inadequate. (Source CO 173) Conservation Order 432B December 12, 2002 Page 11 Rule 10. Production Well Tests (Reft CO 432A) (a) A well test must be performed on each active producing well at least once every 30 days. (b) Twinned production wells commingled through the same surface flowline, must be tested at least once every 30 days as a combined production stream and the individual wells must be tested separately at least once every six months or more often if the combined well test indicates uncharacteristic performance. DONE at Anchorage, Alaska and dated December 12, 2002. Cammy Oech~ Taylor, Chair Alaska Oil and Gas Conservation Commission Daniel T. Seamount, Jr., Commissioner Alaska Oil and Gas Conservation Commission Michael L. Bill, P.E., Commissioner Alaska Oil and Gas Conservation Commission AS 31.05.080 provides that within 20 days after receipt of written notice of the entry of an order, a person affected by it Month file with the Commission an application for rehearing. A request for rehearing must be received by 4:30 PM on the 23rd day following the date of the order, or next working day if a holiday or weekend, to be timely filed. The Commission shall grant or refuse the application in whole or in part within 10 days. The Commission can refuse an application by not acting on it within the 10-day period. An affected person has 30 days from the date the Commission refuses the application or mails (or otherwise distributes) an order upon rehearing, both being the final order of the Commission, to appeal the decision to Superior Court. Where a request for rehearing is denied by non-action of the Commission, the 30-day period for appeal to Superior Court runs from the date on which the request is deemed denied (i.e., l0th day after the application for rehearing was filed). John Katz State of Alaska Alaska Governor's Office 444 North Capitol St., NW, Ste 336 Washington, DC 20001 Daniel Donkel 2121 North Bayshore Drive, Ste 1219 Miami, FL 33137 SD Dept of Env & Natural Resources Oil and Gas Program 2050 West Main, Ste 1 Rapid City, SD 57702 Alfred James 107 North Market Street, Ste 1000 Wichita, KS 67202-1822 Christine Hansen Interstate Oil & Gas Compact Comm Excutive Director PO Box 53127 Oklahoma City, OK 73152 Citgo Petroleum Corporation PO Box 3758 Tulsa, OK 74136 Conoco Inc. PO Box 1267 Ponca City, OK 74602-1267 Mir Yousufuddin US Department of Energy Energy Information Administration 1999 Bryan Street, Ste 1110 Dallas, TX 75201-6801 Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 Gregg Nady Shell E&P Company Onshore Exploration & Development PO Box 576 Houston, TX 77001-0576 Michael Nelson Purvin Gertz, Inc. Library 600 Travis, Ste 2150 Houston, TX 77002 Paul Walker Chevron 1301 McKinney, Rm 1750 Houston, TX 77010 G. Scott Pfoff Aurora Gas, LLC 10333 Richmond Ave, Ste 710 Houston, TX 77042 G. Havran Gaffney, Cline & Associations Library 1360 Post Oak Blvd., Ste 2500 Houston, TX 77056 David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 William Holton, Jr. Marathon Oil Company Law Department 5555 San Fecipe St. Houston, TX 77056-2799 T.E. AI~rd ExxonMobil Exploration Company PO Box 4778 Houston, TX 77210-4778 Texico Exploration & Production PO Box 36366 Houston, TX 77236 CorryWoolington ChevronTexaco Land-Alaska PO Box 36366 Houston, TX 77236 W. Allen Huckabay Phillips Petroleum Company Exploration Department PO Box 1967 Houston, TX 77251 Chevron USA Alaska Division PO Box 1635 Houston, TX 77251 Donna Williams World Oil Statistics Editor PO Box 2608 Houston, TX 77252 Chevron Chemical Company Library PO Box 2100 Houston, TX 77252-9987 Shelia McNulty FinancialTimes PO Box 25089 Houston, TX 77265-5089 Shawn Sutherland Unocal Revenue Accounting 14141 Southwest Freeway Sugar Land, TX 77478 Kelly Valadez Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 James White Intrepid Prod. Co./Alaskan Crude 4614 Bohill SanAntonio, TX 78217 Doug Schultze XTO Energy Inc. 3000 North Garfield, Ste 175 Midland, TX 79705 Robert Gravely 7681 South Kit Carson Ddve Littleton, CO 80122 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Richard Neahdng NRG Associates President PO Box 1655 Colorado Springs, CO 80901 John Levorsen 200 North 3rd Street, #1202 Boise, ID 83702 Kay Munger Munger Oilln~rmation Se~ice, lnc PO Box 45738 Los Angeles, CA 90045-0738 John F. Be~quist Babson and Sheppa~ PO Box 8279 Long Beach, CA 90808-0279 Samuel Van Vactor Economic Insight Inc. 3004 SW First Ave. Portland, OR 97201 Thor Cutler OW-137 US EPA egion 10 1200 Sixth Ave. Seattle, WA 98101 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Tim Ryherd State of Alaska Department of Natural Resources 550 West 7th Ave., Ste 800 Anchorage, AK 99501 Richard Mount State of Alaska Department of Revenue 500 West 7th Ave., Ste 500 Anchorage, AK 99501 Jim Arlington Forest Oil 310 K Street, Ste 700 Anchorage, AK 99501 Duane Vaagen Fairweather 715 L Street, Ste 7 Anchorage, AK 99501 Williams VanDyke State of Alaska Department of Natural Resources 550 West 7th Ave., Ste 800 Anchorage, AK 99501 Julie Houle State of Alaskan DNR Div of Oil & Gas, Resource Eval. 550 West 7th Ave., Ste 800 Anchorage, AK 99501 Cammy Taylor 1333 West 11th Ave. Anchorage, AK 99501 Robert Mintz State of Alaska Department of Law 1031 West 4th Ave., Ste 200 Anchorage, AK 99501 Susan Hill State of Alaska, ADEC EH 555 Cordova Street Anchorage, AK 99501 Ed Jones Aurora Gas, LLC Vice President 1029 West 3rd Ave., Ste 220 Anchorage, AK 99501 Trustees for Alaska 1026 West 4th Ave., Ste 201 Anchorage, AK 99501-1980 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 John Harris NI Energy Development Tubular 3301 C Street, Ste 208 Anchorage, AK 99503 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Rob Crotty CIO CH2M HILL 301 West Nothern Lights Blvd Anchorage, AK 99503 Schlumberger Drilling and Measurements 3940 Arctic Blvd., Ste 300 Anchorage, AK 99503 Mark Dalton HDR Alaska 2525 C Street, Ste 305 Anchorage, AK 99503 Jack Laasch Natchiq Vice President Government Affairs 3900 C Street, Ste 701 Anchorage, AK 99503 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Mark Hanley Anadarko 3201 C Street, Ste 603 Anchorage, AK 99503 Judy Brady Alaska Oil & Gas Associates 121 West Fireweed Lane, Ste 207 Anchorage, AK 99503-2035 Arlen Ehm 2420 Foxhall Dr. Anchorage, AK 99504-3342 Greg Noble Bureau of Land Management Energy and Minerals 6881 Abbott Loop Rd Anchorage, AK 99507 Rose Ragsdale Rose Ragsdale & Associates 3320 E. 41st Ave Anchorage, AK 99508 Thomas R. Marshall, Jr. 1569 Birchwood Street Anchorage, AK 99508 Jeff Walker US Minerals Management Service Regional Supervisor 949 East 36th Ave., Ste 308 Anchorage, AK 99508 Paul L. Craig Trading Bay Energy Corp 5432 East Northern Lights, Ste 610 Anchorage, AK 99508 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Jim Scherr US Minerals Management Service Resource Evaluation 949 East 36th Ave., Ste 308 Anchorage, AK 99508 Richard Prentki US Minerals Management Service 949 East 36th Ave., 3rd Floor Anchorage, AK 99508 Chuck O'Donnell Veco Alaska,Inc. 949 East 36th Ave., Ste 500 Anchorage, AK 99508 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 Jim Ruud Phillips Alaska, Inc. Land Department PO Box 100360 Anchorage, AK 99510 Kristen Nelson IHS Energy PO Box 102278 Anchorage, AK 99510-2278 Perry Markley Alyeska Pipeline Service Company Oil Movements Department 1835 So. Bragaw- MS 575 Anchorage, AK 99515 Jordan Jacobsen Alyeska Pipeline Service Company Law Department 1835 So. Bragaw Anchorage, AK 99515 Robert Britch, PE Northern Consulting Group 2454 Telequana Dr. Anchorage, AK 99517 David Cusato 600 West 76th Ave., #508 Anchorage, AK 99518 Jeanne Dickey BP Exploration (Alaska), Inc. Legal Department PO Box 196612 Anchorage, AK 99518 Tesoro Alaska Company PO Box 196272 Anchorage, AK 99519 J. Brock Riddle Marathon Oil Company Land Department PO Box 196168 Anchorage, AK 99519-6168 Kevin Tabler Unocal PO Box 196247 Anchorage, AK 99519-6247 Sue Miller BP Exploration (Alaska), Inc. PO Box 196612 Anchorage, AK 99519-6612 BP Exploration (Alaska), Inc. Land Manager PO Box 196612 Anchorage, AK 99519-6612 Dudley Platt D.A. Platt & Associates 9852 Little Diomede Cr. Eagle River, AK 99577 Bob Shavelson Cooklnlet Keeper PO Box 3269 Homer, AK 99603 Shannon Donnelly Phillips Alaska, Inc. HEST-Enviromental PO Box 66 Kenai, AK 99611 Peter McKay 55441 Chinook Rd Kenai, AK 99611 Kenai Peninsula Borough Economic Development Distr 14896 Kenai Spur Hwy #103A Kenai, AK 99611-7000 Penny Vadla Box 467 Ninilchik, AK 99639 James Gibbs PO Box 1597 Soldotna, AK 99669 Claire Caldes US Fish & Wildlife Service Kenai Refuge PO Box 2139 Soldotna, AK 99669 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 John Tanigawa Evergreen Well Service Company PO Box 871845 Wasilla, AK 99687 Charles Boddy Usibelli Coal Mine, Inc. 100 Cushman Street, Suite 210 Fairbanks, AK 99701-4659 Richard Wagner PO Box 60868 Fairbanks, AK 99706 Cliff Burglin PO Box 131 Fairbanks, AK 99707 Harry Bader State of Alaska Department of Natural Resources 3700 Airport Way Fairbanks, AK 99709 Bernie Karl K&K Recyclinglnc. PO Box 58055 Fairbanks, AK 99711 North Slope Borough PO Box 69 Barrow, AK 99723 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 Senator Loren Leman State Capitol Rm 113 Juneau, AK 99801-1182 ConocOPhillips James R. Hand Supervisor- Drillsite Petroleum Engineering Greater Kuparuk Area ConocoPhillips Alaska Inc. ATO- 1276 PO Box 100360 Anchorage AK 99510-0360 Phone (907)263-4027 Fax: (907)265-6133 April 1,2003 Ms. Sarah H. Palin, Commissioner Alaska Oil and Gas Conservation Commission 333 West 7th Ave. Suite #100 Anchorage, Alaska 99501-3539 Re: Kuparuk River Oil Pool- Proposed Pressure Survey Plan for 2003 Dear Ms. Palin, In compliance with Rule 8, Conservation Order No. 432, ConocoPhillips Alaska, Inc., operator of the Kuparuk River Oil Pool, is hereby submitting the proposed pressure survey plan for 2003. There were 191 pressure surveys reported for the Kuparuk River Oil Pool to the AOGCC in 2002. In 2003, we expect to conduct approximately 180 pressure surveys which inclUdes initial surveys for new wells prior to initial sustained production. If you have any questions concerning this data, please contact Robed Christensen at (907) 659-7535. Sincerely, Supervisor- Drillsite Petroleum Engineering Greater Kuparuk Area ConocoPhillips November 18, 2002 Alaska Oil and Gas Conservation Commission Cammy Taylor, Chair 333 W. 7th Ave Suite 100 Anchorage, AK 99501 RECEIVED NOV 2 2 2002 N~sk; 0il & Gas Oons. Commission Anchorage Attention: Commissioner Seamount Subject: A request for a variance in packer setting depth for Drill Site 3S (Palm) ~a L- ~,~'~ ¥' injectors under AAC 25.412 (b) Dear Commissioner Taylor: With this letter, ConocoPhillips Alaska requests a Drill Site 3S (Palm) variance in the 200 feet measured depth limit between the packer and the formation top specified in statewide AOGCC regulations. Specifically, we request that CPA be permitted to set injector packers up to 350 feet measured depth above the formation top in Drill Site 3S (Palm) injection wells. The following discussion is provided to support this request: 20 AAC 25.412 (b) states: "... The packer must be placed within 200 feet measured depth above the top of the perforations, unless the commission approves a different placement depth as the commission considers appropriate given the thickness and depth of the confining zone." In the Drill Site 3S (Palm) development area, the Kuparuk formation is found between 5700 and 5900 feet vertical depth. Overlying the Kuparuk is the Lower Kalubik, Upper Kalubik, and HRZ confining intervals which are thick sequences of shales and claystones with no known reservoir potential. The Drill Site 3S (Palm) injection wells are planned with a 7" long/production string with 3.5" tubing. To maintain the regulation of 200 feet measured depth maximum spacing between packer depth and formation top, the injector packer setting depth is planned for 100 feet measured depth above the anticipated top of formation. With this configuration, the available logging interval between the tubing tail (approximately 30 feet below the packer setting depth) and formation top would be limited to ~- 70 feet measured depth; therefore on previous wells, CPA has chosen to perform a cement bond log on the drilling rig prior to running the 3.5" tubing completion. In an effort to lower the development program drilling costs, we are requesting that CPA be permitted to set injector packers up to 350 feet measured depth above the formation top. With a longer interval in which to illustrate a hydraulic barrier exists behind the 7" casing, it becomes practical to run the cement bond logs after the drilling rig runs the completion and moves off of the well. It is also proposed to plan the cement top in the 7" annulus to be raised by an equal distance (250 feet) in order to maintain the same interval of cemented 7" annulus above the packer and therefore the same level of security against an annulus leak path behind the 7" (around and above the packer). The first well on which CPA proposes to apply a 350 feet measured depth rule is injection well 3S-09. Nabors 7ES is scheduled to spud this injector on December 07, 2002. 3S-09 will be used as the example for this concept. The planned completion strategy of 3S-09 is essentially analogous to all planned completions for Drill Site 3S (Palm) injectors. Please refer to the attached wellbore diagram. Illustrating the application of a 350 feet measured depth rule in the 3S-09 injection well, the packer would most likely be placed at a measured depth of 8903 to 9003 feet. The prognosed top for the Kuparuk formation in 3S-09 is 9253 feet measured depth (5734 feet vertical depth). The top of cement will be designed at 8203 feet measured depth, 1050 feet measured depth above the top of the Kupamk target interval. The formation top for the Lower Kalubik, Upper Kalubik, and HRZ intervals in 3S-09 are forecasted to be 9135, 8942, and 8702 feet measured depth, respectively. In the above completion scenario, the packer is set in the shale/claystone sequence overlying the Kuparuk reservoir and 700 feet below the top of cement. Also, the distance between the tubing tail and Kuparuk formation top would be +/- 320 feet. In this case, CPA would run a cement bond log below the tubing tail to confirm cement quality after the drilling rig runs the completion and moves off of the well. In summary, two primary risks are introduced by taking this action. One risk is the increased exposure for an annulus leak path in the event of a leak in the 7" casing below the packer. The other risk is a reduced interval length to be bond logged, which could create difficulties in demonstrating a hydraulic barrier above the pay zone. To mitigate the risks of increasing the distance between the packer and the top perforation by 250 feet, CPA proposes to increase the length of the cement column above the pay zone by an equal amount. We believe that a 350 feet measured depth exception for Drill Site 3S (Palm) provides protection to resources equivalent to what is provided under 20 ACC 25.412 (b) and serves to facilitate drilling operations. Adoption of this practice will ultimately decrease development drilling costs on the Drill Site 3S (Palm) project. We respectfully request consideration of this proposal and look forward to your favorable reply. If you have further questions, please call me at 265-1606. Sincerely, Daniel E. Hensley Palm Surveillance Engineer KRU - 3S-09 InJ --,.tor Proposed Completion Schematic Single Completion 16"x30" insulated conductor @ ~ r~ +/-109'MD MN TAM 9-5/8" Port, i~ Collar Stnd r~ Grade BTC r~ Threads (+/- 1000' MD/I'VD) Surface csg. r~J 9-5/8-40# L-80 -,, r~ BTC (3589' MD / 2612' TVD) Casing point 100' above the C80 sand ConocoPhillips 3-1/2" FMC Gen V tubing hanger, 3-1/2" L-80 EUE8RD pin down. Special Drift 2.91" 3-1/2", L-80, 9.34¢ EUE8RD Spaceout Pups as Required. Special Drift 2.91" 3-1/2" Camco DS Landing Nipple with 2.875" ID No-Go profile set @ +/- 500' MD. Use of port collar at the discretion of the drilling team. RECEIVED NOV £ 2002 Alaska 0il & Gas Cons. c0mmismm Anchorage Top of Cement ~ 8203' MD 8702' MD 3-1/2" x 1-1/2" 'MMG' GLM w/DCR Dump Kill Valve (3000 psi casing to tubing shear). 6' L-80 handling pups installed on top and bottom of mandrel. 1 Joint 3-1/2", L-80, 9.3# EUE 8rd Mod Tubing. HRZ 8942' MD Upper Kalubik 9135' MD Lower Kalubik 9253' MD Kuparuk Target 3-1/2" Camco 'DS' nipple w/2.813" No-Go profile 1 Joint 3-1/2", L-80, 9.3# EUE 8rd Mod Tubing. 6' Handling Pup Joint 3-1/2", L-80, 9.3# EUE 8rd Mod Tubing. Baker '80-40' PBR. Baker 7" x 3-112" 'SAB-3' Permanent Packer set ~ 8903' MD (350' MD above top planned perf). Minimum ID through the packer 3.00". 6' Pup Joint 3-1/2", L-80, 9.3# EUE 8rd Mod Tubing. 3-1/2" Camco 'D' nipple w/2.75" No-Go profile. 6' Pup Joint 3-1/2", L-80, 9.3# EUE 8rd Mod Tubing. Baker 3-1/2" WL Re-entry Guide wi shear out sub. Tubing tail +1- 320' above top planned perforation. C Sand Perfs (to be done after rig moves oft) Production csg. 7" 26# L-80 BTCM (+/- 9486' MD) TD @ 9,486' MD / 5921' TVD (200' MD below Miluveach) ConnocoPhillips Alaska, Inc. MD Inc Azim. SSTVD 'I'VD N/S E/W (fi) (Deg) (Deg) (fi) (fi) (fi) (fi) 0.00 0.00 0.00 -56.10 0.00 0.00 N 0.00 200.00 0.00 0.00 143.90 200.00 0.00 N 0.00 700.00 10.00 41.00 641.37 697.47 32.85 N 28.55 1700.13 50.00 41.86 1490.00 1546.10 398.68 N 354.52 1846.60 55.86 41.89 1578.25 1634.35 485.67 N 432.50 2517.96 55.86 41.89 1955.00 2011.10 899.34 N 803.52 3310.93 55.86 41.89 2400.00 2456.10 1387.95 N 1241.75 3589.00 55.86 41.89 2556.05 2612.15 1559.29 N 1395.42 3688.71 55.86 41.89 2612.00 2668.10 1620.73 N 1450.52 6338.49 55.86 41.89 4099.00 4155.10 3253.44 N 2914.90 8216.68 55.86 41.89 5153.00 5209.10 4410.73 N 3952.87 8701.38 55.86 41.89 5425.00 5481.10 4709.38 N 4220.73 8941.94 55.86 41.89 5560.00 5616.10 4857.61 N 4353.68 9134.39 55.86 41.89 5668.00 5724.10 4976.20 N 4460.04 9246.66 55.86 41.89 5731.00 5787.10 5045.37 N 4522.08 9252.00 55.86 41.89 5734.00 5790.10 5048.67 N 4525.03 9285.86 55.86 41.89 5753.00 5809.10 5069.53 N 4543.74 9486.00 55.86 41.89 5865.31 5921.41 Y (ft) X 5192.85 N 4654.35 E 5999097.06 N E 5993919,00 N 476285.94 E E 5993919.00 N 476285.94 E E 5993951,76 N 476314.60 E E 5994316,56 N 476641,72 E E 5994403.30 N 476719,98 E E 5994815,79 N 477092,31 E E 5995303,00 N 477532.09 E E 5995473,85 N 477686,30 E E 5995535,12 N 477741.60 E E 5997163,18 N 479211.15 E E 5998317.17 N 480252.78 E E 5998614.97 N 480521,59 E E 5998762,78 N 480655.01 E E 5998881.02 N 480761.74 E E 5998950,00 N 480824.00 E E 5998953.29 N 480826.97 E E 5998974,09 N 480845,74 E 480956,74 E DLS (°/lOOft) 0.00 0.00 2.00 4.00 4.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 V.S. (ft) 0.00 0.00 43.52 533.50 650.33 1206.01 1862.35 2092.51 2175.03 4368.24 5922.81 6323.99 6523.11 6682.40 6775.32 6779.74 6807.77 6973.42 3S-09 (wp03) Comment SHL Begin Dir in 12-1/4" Hole Increase in Dir Rate @ 4.0°/100ft B. Permafrost End Dir T. West Sak B, West Sak 9-5/8" Csg Pt .,. Drill 8-1/2" Hole C-80 (K-10) C-40 (K-3) Top Morraine Top HRZ Base HRZ K-1 TARGET Kuparuk Miluveach Total Depth L. RECEIVED NOV ?.. Alaska 0il & Gas Cons. L;0mm~ss~or: Anchorage STATE OF ALASKA NOTICE TO PUBLISHER ADVERTISING ORDER NO. INVOICI~ ~T BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO.~ i^'-,'~TIFIED ADVERTISING ~F,D^~ ~F PUBL,O^T,ON <P*.T2 OF ~.S ~O.~)W,~. ~.~ ~ O~ AO'02314017 ORDER ADVERTISEMENT MUST BE SUBMI~ED WI~ I~OICE F AO~ AGENCY CO.ACT DATEOFA.O. " 333 W 7~ Ave, Ste 100 Jody Co]ombie September 26, 2002 o ~chorage, ~ 99501 PHONE PeN M - (907~ 793 -1221 ~ ~chorage D~ly News September 27, 2002 o P O Box 149001 ~chorage, ~ 99514 ~.~ m~m~ s~. ~.~ ~USL~ Lm~S ~US~ S~ em..~o ~. ~ EN~ ON THE DATES SHO~. SPECIAL INSTRUCTIONS: Accost ~STOF0330 Adve~isement to be published w~ e-m~led Type of Advedisement X Legal ~ Display ~ Classified ~Other (Specie) ,. SEE ATTACHED PUBLIC HE~NG I ITOTALOF I S.E~D.INVDICE ~N.?~IpL!CATE I AOGEC, 333 W. ?th Ave., Suite 100 PAGE 1OF ALL PAGES$I ,..L,. ':,,.:'~. :.'..' .'"?~; "." .:' TO' :.~:;~.'..: :': '.-.~.'... :' ";? '. ~ ~ Anchorage: AK 99501 2 PAGES REF ~PE NUMBER AMOUNT DATE COMMENTS 1 VEN 2 A~ 02910 FIN AMOUNT SY CC PGM LC ACCT FY NMR DIST LIQ 1 03 02140100 ?3540 .... 2 3 ..... ~,, ,,, 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: Kuparuk River Oil Pool Area Expansion and Kupamk River Unit Area Injection Order Expansion Phillips Alaska, Inc. by applications dated September 4, 2002, has applied to expand the affected area of the Kupamk River Oil Pool defined in Conservation Order No. 432A. The current affected area for the Kupamk River Oil Pool is set forth in Conservation Order No. 349A (with certain area contracted per Conservation Order No. 471 defining the Prudhoe Bay Unit Borealis Oil Pool). Phillips Alaska, Inc has also requested expansion of Area Injection Order #2, which established rules for enhanced recovery operations within several pools in the Kupamk River Unit. The Commission proposes to consolidate and clarify rules governing development and operation of the Kupamk River Oil Pool and Area Injection Orders governing Kupamk River Unit. The following acreage has been requested for inclusion within the Kupamk River Oil Pool Area and within Area Injection Order #2A. Umiat Meridian T12N-R7E Section 1, 2, 11, 12, 13, 14, 15, 16, 21, 22, 23, 24. The Commission has tentatively set a public hearing on this application for October 29, 2002 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30'pm on October 17, 2002. If a request for a hearing is not timely filed, the Commission will consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th AVenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pmon October 28, 2002 except that if the CommiSSion decides to hold a public hearing, written comments must be received no later than 9:00 am on October 29, 2002. If you are a person with a disability who may need a special modification in order to comment or to attend the pu..ll!ic hearing, please contact Jody Colombie at 793-1221 before October 15, 2002. ~ Dan Seamount, Commissioner Oil and Gas Conservation Commission Published Date: September 27, 2002 AO #0231017 Anchorage Daily News Affidavit of Publication 1001 Northway Drive, Anchorage, AK 99508 9/30/2002 AD # DATE PO ACCOUNT 584492 09/2712002 02314017 STOF0330 PRICE OTHER OTHER PER DAY CHARGES. CHARGES ..~2 $186.32 $186.32 $0.00 $0.00 OTHER OTHER OTHER GRAND CHARGES#3 CHARG~ CHARGES~ TOTAL $0.00 $0.00 $0.00 $186.32 STATE OF ALASKA THIRD JUDICIAL DISTRICT Amy Heath, 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 newsp.aper in Anchorage, Alaska, and it is now and during all saidtime 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. Subscribed and sworn to me before this date: Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska MY COMMISSIO_.N E X. PIRES: {~,~>~ ~~~ .... .~o~.' '---" ~ ~_ ~'''' "m 9 I' "Notic"e of Public Hearing' , ' STATE OF ALASKA ' . 'AlaSka Oil.and. Gas Conservation Commission ' R'e:- :'KuparUk River Oil Pool Area Expansion and Kuparuk R'Jver Unit Area Injection Order Expansion ~, . , ,,,'r.,.",'..' ,, Phillips Alaska, Inc. by applications dated Sep- tember 4, 2002, has applied to expand .the affected area of the Kuparuk River Oil Pool defined, in Con- servotion Order No. 432A. The current affected area for the Kuparuk Ri'vet Oil Poo. I is set forth in Conservation. Order No. 349A (with.ce. rtain area contracted per Conservation' Order N0. 471 defin- ing thePrudhoe BayUnit BorealisOll Pool). Phil- lipS 'Alaska, Inc has also requested expansion of Ar'ea 'l'niection Order #2, ~hich eSfablish~ed rules 'for enhanced recovery 'operations within seve~ral .pools in the Kuporuk River Unit. The commiSsion proposes to consolJ'date and'clarify rules goverm lng development and' operation Of the Kuparuk River Oil Pool an'd"A~ea' Ini'ectio6 Orders govern- Kuparuk Rivet'Unit. ' ' The'f011owing acreage has been re'quested for inclusion within the Kuparok River Oil Pool Area and Within Area I nlection Order #2A. . Umiat. Meridian T12N~R7E Section.I, 2, il,' 12, 13, 14, 15, 16, 21',~. . i 22, '23, 24....' ' ':. , , , The Commission has tentatively set'a public hearing on this application for October 29,.2002 at 9:00 am at the. A. aska O I andGas Conservation Commission at 333 West'.Tth Avenue; suite. 100, An-' chorage, A aska 99501. A person' may request that the tentatively scheduled hearing be held by. filing a written request with the commission no later .;than 4~30 pm o~'Oct0ber 17, 2002.' If a reqUest for a heari'ng is.not timely filed, ihe Commission. Will consider the'issuance of an Order without a' hearing. 'To 'learn if the. Commis: 'simon will hold the public hearing, please call .793-1221. ' ~ In additi0n, a person may sUb'rfllit Written comments regarding this application t0ithe Alaska Oil and Gas Conservation' Commissi'0n'a, 333 West 7th Avenue, Suite 100, Anchorage, Aldska 9950]. .Written comments must be received:nb later than 4:30 pm On. October 28, 2002.excePt that' if the Commission decides to h'old a public hearing,' wri't- ten comments must be received, no later than 9:00 am on October 29; 2002. , ,, , If.you area .person with a disability who may need a special.modification in order to comment or to attend the public hearing,, p.lease contact Jody Colombie at 793~1221 before October 15, 2002'. , Dan Seamount, Commissioner' Oil and Gas Conservation COmmission Publish:September 27,. 2002: ~ . . Re: Advertising Order Subject: Re: Advertising Order Date: 26 Sep 2002 11:49:42 -0800 From: Amy Heath <aheath@adn.com> To: Jody Colombie <jody_colombie~admin.state.ak.us> __ Account Number: STOF0330 Legal Ad Number: 584492 (Public Notice) Run Dates: September 27, 2002 Total Amount: $186.32 Thanks Jody! :) Please let me know if I can help you with anything else. Amy L. Heath __ Legal Customer Service Representative Phone: (907) 257-4296 Fax: (907) 279-8170 Office Hours 8:00am - 5:00pm aheath@adn.com On Thursday, September 26, 2002, Jody Colombie <jody_colombie@admin.state.ak.us> wrote: > >Amy: > >Please publish the attached Notice. Jody 1 of 1 9/26/2002 1:11 PM STATE OF ALASKA NOTICE TO PUBLISHER ADVERTISING ORDER NO. ADVERTISING INVOICi' ST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO~"' ~RTIFIED ^FF,D^.,, AO'02314017 ORDER ~VERTISEME~ MUST SE SUBMI~D WITH INVOICE · : ",: :" SEE. B ~;~J~.~ DR~[~ ; AOGCC AGENC~ CO~A~ ~ATE O; ~.0. a 333 WeSt 7m Avenue, Suite 100 Jodv Colombie Sentembcr Z6. ~00~ o ~cho~gc, ~ 99~01 ~HOn~ PC~ M - (907~ 793 -1ZZ] ~ATE~ AD~RTISEMENT ~QUI~D: T ~choragc D~ly News September 27, 2002 o P O Box 149001 ~choragc, ~ 99514 wnE ~TEmAL BE~EN ~E ~L[ LINES MUST BE P~N~D IN I~ ENTI~ ON ~E DA~S SHOWN. SPECIAL INSTRUCTIONS: Acco=t ~STOF0330 AFFIDAVIT OF PUBLICATION United states of ATe,ca REMINDER ~tate of ss INVOICE MUST BE IN TRIPLICATE AND MUST ~EFERENCE THE ADVERTISING ORDER NUMBER. division. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMI~ED WITH THE INVOICE. Before me, the undersigned, a nota~ public this day personally appeared ATTACH PROOF OF PUBLICATION HERE. who, b~ing first duly sworn, according to law, says that he/she is the of Published at in said division and state of and that th~ adve~isement, of which the annexed is a true copy, was published in said publication o~ th~ day of 2002, and thereafter for ~ consecutive days, the last publication appearing on th~ ~ day of ,2002, and that th~ rate char~ed thereo~ is not in ~xcess of the rat~ char~ed private i~dividuals. Subscribed a~d sworn to b~fom m~ This ~ day of 2002, Nota~ public for state of My commission expires 02-901 (Rev. 3/94) AO.FRM Page 2 PUBLISHER John Katz State of Alaska Alaska Governor's Office 444 North Capitol St., NW, Ste 336 Washington, DC 20001 Daniel Donkel 2121 North Bayshore Drive, Ste 1219 Miami, FL 33137 SD Dept of Env & Natural Resources Oil and Gas Program 2050 West Main, Ste 1 Rapid City, SD 57702 Alfred James 107 North Market Street, Ste 1000 Wichita, KS 67202-1822 Christine Hansen Interstate Oil & Gas Compact Comm Excutive Director PO Box 53127 Oklahoma City, OK 73152 Citgo Petroleum Corporation PO Box 3758 Tulsa, OK 74136 Conoco Inc. PO Box 1267 Ponca City, OK 74602-1267 Mir Yousufuddin US Department of Energy Energy Information Administration 1999 Bryan Street, Ste 1110 Dallas, TX 75201-6801 Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 Gregg Nady Shell E&P Company Onshore Exploration & Development PO Box 576 Houston, TX 77001-0576 Michael Nelson Purvin Gertz, Inc. Library 600 Travis, Ste 2150 Houston, TX 77002 Paul Walker Chevron 1301 McKinney, Rm 1750 Houston, TX 77010 G. Scott Pfoff Aurora Gas, LLC 10333 Richmond Ave, Ste 710 Houston, TX 77042 David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 G. Havran Gaffney, Cline & Associations Library 1360 Post Oak Blvd., Ste 2500 Houston, TX 77056 William Holton, Jr. Marathon Oil Company Law Department 5555 San Fecipe St. Houston, TX 77056-2799 T.E. Al~rd ExxonMobil Exploration Company PO Box 4778 Houston, TX 77210-4778 Texico Exploration & Production PO Box 36366 Houston, TX 77236 Corry Woolington ChevronTexaco Land-Alaska PO Box 36366 Houston, TX 77236 W. Allen Huckabay Phillips Petroleum Company Exploration Department PO Box 1967 Houston, TX 77251 Chevron USA Alaska Division PO Box 1635 Houston, TX 77251 Donna Williams World Oil Statistics Editor PO Box 2608 Houston, TX 77252 Chevron Chemical Company Library PO Box 2100 Houston, TX 77252-9987 Shawn Sutherland Unocal Revenue Accounting 14141 Southwest Freeway Sugar Land, TX 77478 Kelly Valadez Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 James White Intrepid Prod. Co./Alaskan Crude 4614 Bohill SanAntonio, TX 78217 Doug Schultze XTO Energy Inc. 3000 North Garfield, Ste 175 Midland, TX 79705 Robert Gravely 7681 South Kit Carson Drive Littleton, CO 80122 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 John Levorsen 200 North 3rd Street, #1202 Boise, ID 83702 Kay Munger Munger Oil Information Service, Inc PO Box 45738 Los Angeles, CA 90045-0738 John F. Bergquist Babson and Sheppard PO Box 8279 Long Beach, CA 90808-0279 Samuel Van Vactor Economic Insight Inc. 3004 SW First Ave. Portland, OR 97201 Thor Cutler OW-137 US EPA egion 10 1200 Sixth Ave. Seattle, WA 98101 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Robert Mintz. State of Alaska Department of Law 1031 West 4th Ave., Ste 200 Anchorage, AK 99501 Julie Houle State of Alaskan DNR Div of Oil & Gas, Resource Eval. 550 West 7th Ave., Ste 800 Anchorage, AK 99501 Ed Jones Aurora Gas, LLC Vice President 1029 West 3rd Ave., Ste 220 Anchorage, AK 99501 Richard Mount State of Alaska Department of Revenue 500 West 7th Ave., Ste 500 Anchorage, AK 99501 Williams VanDyke State of Alaska Department of Natural Resources 550 West 7th Ave., Ste 800 Anchorage, AK 99501 Tim Ryherd State of Alaska Department of Natural Resources 550 West 7th Ave., Ste 800 Anchorage, AK 99501 Jim Arlington Forest Oil 310 K Street, Ste 700 Anchorage, AK 99501 Duane Vaagen Fairweather 715 L Street, Ste 7 Anchorage, AK 99501 Cammy Taylor 1333 West 11th Ave. Anchorage, AK 99501 Susan Hill State of Alaska, ADEC EH 555 Cordova Street Anchorage, AK 99501 Trustees for Alaska 1026 West 4th Ave., Ste 201 Anchorage, AK 99501-1980 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Mark Hanley Anadarko 3201 C Street, Ste 603 Anchorage, AK 99503 Rob Crotty C/O CH2M HILL 301 West Nothern Lights Blvd Anchorage, AK 99503 Baker Oil Tools 4730 Business Park Blvd., #-44 Anchorage, AK 99503 Schlumberger Drilling and Measurements 3940 Arctic Blvd., Ste 300 Anchorage, AK 99503 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Mark Dalton HDR Alaska 2525 C Street, Ste 305 Anchorage, AK 99503 John Harris NI Energy Development Tubular 3301 C Street, Ste 208 Anchorage, AK 99503 Judy Brady Alaska Oil& Gas Associates 121WestFireweed Lane, Ste 207 Anchorage, AK 99503-2035 Arlen Ehm 2420 Foxhall Dr. Anchorage, AK 99504-3342 Greg Noble Bureau of Land Management Energy and Minerals 6881 Abbott Loop Rd Anchorage, AK 99507 Jeff Walker US Minerals Management Service Regional Supervisor 949 East 36th Ave., Ste 308 Anchorage, AK 99508 Rose Ragsdale Rose Ragsdale & Associates 3320 E. 41st Ave Anchorage, AK 99508 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Paul L. Craig Trading Bay Energy Corp 5432 East Northern Lights, Ste 610 Anchorage, AK 99508 Jim Scherr US Minerals Management Service Resource Evaluation 949 East 36th Ave., Ste 308 Anchorage, AK 99508 Chuck O'Donnell Veco Alaska,Inc. 949 East 36th Ave., Ste 500 Anchorage, AK 99508 Richard Prentki US Minerals Management Service 949 East 36th Ave., 3rd Floor Anchorage, AK 99508 Thomas R. Marshall, Jr. 1569 Birchwood Street Anchorage, AK 99508 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 Jim Ruud Phillips Alaska, Inc. Land Department PO Box 100360 Anchorage, AK 99510 Kristen Nelson IHS Energy PO Box 102278 Anchorage, AK 99510-2278 Perry Markley Alyeska Pipeline Service Company Oil Movements Department 1835 So. Bragaw - MS 575 Anchorage, AK 99515 Jordan Jacobsen Alyeska Pipeline Service Company Law Department 1835 So. Bragaw Anchorage, AK 99515 Robert Britch, PE Northern Consulting Group 2454 Telequana Dr. Anchorage, AK 99517 David Cusato 600 West 76th Ave., #508 Anchorage, AK 99518 Jeanne Dickey BP Exploration (Alaska), Inc. Legal Department PO Box 196612 Anchorage, AK 99518 Jack Laasch Natchiq Vice President Government Affairs 6700 Arctic Spur Road Anchorage, AK 99518 Tesoro Alaska Company PO Box 196272 Anchorage, AK 99519 J. Brock Riddle Marathon Oil Company Land Department PO Box 196168 Anchorage, AK 99519-6168 Kevin Tabler Unocal PO Box 196247 Anchorage, AK 99519-6247 Sue Miller BP Exploration (Alaska), Inc. PO Box 196612 Anchorage, AK 99519-6612 BP Explomtion(Alaska),lnc. Land Manager PO Box 196612 Anchomge, AK 99519-6612 Dudley Platt D.A. Platt & Associates 9852 Little Diomede Cr. Eagle River, AK 99577 Bob Shavelson Cooklnlet Keeper PO Box 3269 Homer, AK 99603 Shannon Donnelly Phillips Alaska, Inc. H EST-Enviromental PO Box 66 Kenai, AK 99611 Kenai Peninsula Borough Economic Development Distr PO Box 3029 Kenai, AK 99611 James Gibbs PO Box 1597 Soldotna, AK 99669 Claire Caldes US Fish & Wildlife Service Kenai Refuge PO Box 2139 Soldotna, AK 99669 Penny Vadla Box 467 Ninilchik, AK 99669 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 John Tanigawa Evergreen Well Service Company PO Box 871845 Wasilla, AK 99687 Richard Wagner PO Box 60868 Fairbanks, AK 99706 Cliff Burglin PO Box 131 Fairbanks, AK 99707 Harry Bader State of Alaska Department of Natural Resources 3700 Airport Way Fairbanks, AK 99709 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 North Slope Borough PO Box 69 Barrow, AK 99723 Senator Loren Leman State Capitol Rm 113 Juneau, AK 99801-1182 PHILLIPS Alaska, Inc. A Subsidiary of PHILLIPS PETROLEUM COMPANY Post Office Box 100360 700 G Street Anchorage, Alaska 99510 Telephone 907 265-6806 Chris Alonzo, Drill Site 3S Coordinator October 31,2002 Ms. Cammy Oechsli Taylor Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 RECEIVED OCT 1 2OO2 Nasla 0il.& Gas Gons. C0mmlssl~n Anchorage Re: Kuparuk River Oil Pool Area Expansion for Drill Site 3S - Revision Dear Commissioners: By this letter, Phillips Alaska, Inc. (PAl) is seeking to expand the area of the Kuparuk River Oil Pool described in Conservation Order No. 432 (via Order No. 349A) to include the area encompassed by ongoing development activities at Kuparuk River Unit Drill Site 3S. This document is a revision only to the requested confidentiality of information submitted in the previous application dated September 4, 2002 and is identical to the original application in all other aspects. The Drill Site 3S Project is located Northwest of existing Kuparuk River Unit Drill Site 3G (Figure 1) and is in pressure communication with the main Kuparuk River Field. The Drill Site 3S project consists of a single drill site with developable acreage located partially outside the current Kuparuk River Unit (KRU) boundaries. An application to expand the Kuparuk River Unit boundary to include the proposed development acreage and expand the Kuparuk Participating Area (KPA) was filed with the Alaska Department of Natural Resources on July 2, 2002 and is currently under review (Figure 2). PAl anticipates the KRU and KPA expansion will be comj~leted prior to initiation of production at Drill Site 3S currently scheduled for 4"' quarter 2002. Detailed geophysical, geologic and engineering information describing the expansion area associated with Drill Site 3S development is provided in Attachment A, portions of which PAl considers confidential. The majority of acreage associated with Drill Site 3S development is currently included in the existing Kuparuk River Oil Pool described in Conservation Order No. 432 (via 349A) as depicted on Figure 2 and Figure 3. No changes to this Order other than increasing the Kuparuk River Oil Pool area is requested. Therefore, based on the data in this application PAl requests approval for the following area to be added to those described in Conservation Order No. 432 (via Order No. 349A) for the Kuparuk River Oil Pool (Figure 3). Phillips Alaska, Inc. is a subsidiary of Phillips Petroleum Company UMIAT MERIDIAN T12N-R7E Section 1,2, 11, 12, 13, 14, 15, 16, 21,22, 23, 24. We appreciate your work on this application and would be happy to answer any related questions. I can be reached at 265-6822 or calonzo@ppco.com via email. Sincerely, Drill Site 38 Coordinator Attachments Page 2/5 Figure 1 KRU Drill Site 3S Location Alpine Unit 35 NPRA Nuiqsit I Kuparuk River Unit Page 3/5 Figure 2 KRU and KPA Expansion Areas Current KRU Pool Rule Area T14.-~gE [ ~ T11iN - R[7E R7E :f'j.,~ [ , i : mm m m m ~I~8E ! ~'9N-',ROE Legend ~ UIC Exemption Area ~ Area injection Order No 2A F----J c ...... tion Order No 349A ~ Kuparuk River Unit ~ Proposed 8th Kuparuk River Unit Expansion Areas r----1 KuparuK Participating Area ~ Kuparuk Participating Area 8th Expansion Proposed 9th Expansion Kuparuk Participating Area Tract Numbers T14N - Area4 ~, :, PHILLIPS Alaska, A Sub~idiRr¥ 3S Development 8-12-02 3_lan katJMonthlylAug/200~E xhll)l~ Page 4/5 Figure 3 Drill Site 3S Development Proposed KRU Pool Rule Area Expansion PHILLIPS Alaska, Inc. . . , ~ .:'.~ , -:..,:: _,~' ,,.,,. 3S Development RTE KRU Pool Rules Expansion Area Request III II III II IIi I T12N -R Tll N - R7E T11N - T13N -R8E ADL026524 i ADL02552: 3H ADL02 ADL0: ADL~)546 3G ADL025547 i2'N R8E ADL025548 ,DL02563 Page 5/5 Attachment A - Kuparuk River Oil Pool Area Expansion Attachment A I. Introduction The information presented in this Attachment A supports the Application before the Alaska Oil and Gas Conservation Commission (AOGCC) for expansion of the area described in Conservation Order No. 432 (via Order No. 349A) for the Kuparuk River Oil Pool in the area surrounding development at Kuparuk River Unit Drill Site 3S. The scope of this information includes a discussion of geological and reservoir properties, PAl's plans for reservoir development and surveillance, well planning, facilities installation and project scheduling and portions are considered confidential. PAl is presenting this information on behalf of the Greater Kuparuk Area (GKA) Working Interest Owners (WlOs). This information will enable the Commission to issue decision and findings to expand the area identified by proposed development at Drill Site 3S under existing Pool Rules established for the Kuparuk River Oil Pool by Conservation Order No. 432 (via Order No. 349A). Road, pad and pipeline construction and facility installation were initiated at Drill Site 3S during the first quarter of 2002 with on pad construction in progress. Development drilling and initial production is scheduled for start-up during the fourth quarter of 2002. Kuparuk River Unit (KRU) facilities will be employed to process production and supply miscible injectant to Drill Site 3S. The Kuparuk Participating Area will be expanded and operated in accordance with Kuparuk River Unit Operating Agreements. The Drill Site 3S area to be developed is leased from the State of Alaska. A portion of the Drill Site 3S development is located within the present boundaries of the Kuparuk River Unit. PAl, on behalf of the Greater Kuparuk Area WlOs, filed an application ("8th Unit and 9th Participating Area Expansion Application") with the Commissioner of the Department of Natural Resources on July 2, 2002 to expand the Kuparuk River Unit and Kuparuk Participating Area to include the Drill Site 3S development area. The interests of the Drill Site 3S area WlOs will be integrated within the Kuparuk Participating Area of the Kuparuk River Unit. Costs and production will be allocated in accordance with the Kuparuk River Unit Operating Agreement. The KPA Area and Cost working interests in the Drill Site 3S area are as follows: Page 1 Attacnment A - Kuparuk River Oil Pool Area Expansion Area Cost Phillips Alaska, Inc. 0.551667 0.55745573 BP 0.391920 0.39603247 Unocal 0.049506 0.03960480 Mobil (Heritage) 0.003648 0.00364800 Chevron 0.001086 0.00108600 Exxon 0.002173 0.00217300 Total 1.000000 1.00000000 II. Geology Introduction In this section, the geologic data supporting the Drill Site 3S expansion area application to the Commission is discussed. Geoloqic Interpretation of the Drill Site 3S Area Within the Drill Site 3S area, exploration wells Palm #1 and #lA were drilled during the 2001 winter season. Both wells penetrated reservoir quality sands in the Kuparuk C4 interval. As expected, the Kuparuk A sand was absent being fully truncated in this area. The Hauterivian C4 sandstone, identified in the Palm wells, is separated from the underlying Miluveach mudstones by the regional Lower Cretaceous Unconformity. A transgressive surface of erosion marks the contact between C4 sandstones and overlying mudstones of the Kalubik Formation. The C4 interval in this area is interpreted to represent transgressive shoreface deposits on the flank of the Kuparuk trough. Accommodation and preservation of these shoreface deposits was created in part by deep seated northwest-southeast trending normal faults (Figure A-l). The Kuparuk C4 sand reservoir is comprised of bioturbated, fine to medium-grained sandstone with variable amounts of glauconite, clay pellets, and siderite cement (Figure A-2). The western, northern and southern limit of the C4 sand in the Drill Site 3S area is based on amplitude versus thickness mapping (Figure A-3). The thickness and areal extent of the C4 sand towards the east is poorly defined at this time, however pressure communication does exist with the main Kuparuk reservoir with the Palm #1 and #lA reservoir pressure approximately 650 psi above original, indicating a continuous permeable sand body through the area (Figures A-4 and A-5). No GOC was observed in the Palm #lA well which is structurally high and well testing indicated solution GOR. No OWC was observed in either exploration well with very Iow (<15%) water saturation calculated from well log Page 2 Att nment A- Kuparuk River Oil Pool Area Expansion resistivity. The oil water contact in the main Kuparuk reservoir is at-6570' subsea and is approximately 800' down structure from the Drill Site 3S area. In summary, data from the Palm #1 and #lA exploration wells and seismic mapping provides evidence of reservoir continuity extending the north western limit of peripheral Kuparuk C4 sand pay within the Drill Site 3S area and west of existing Kuparuk Drill Site 3G. This Kuparuk C4 Sand correlates with the accumulation found in the Atlantic Richfield Company West Sak River State No. 1 Well per Rule 2 of Conservation Order No. 432 dated July 22, 1998 as applied to the Kuparuk River Field, Kuparuk River Oil Pool. III. RESERVOIR DESCRIPTION This section summarizes reservoir description in the Drill Site 3S area based on 3D-seismic top Kuparuk amplitude mapping, two well penetrations, sidewall core data and one production test. Sidewall core and log data provides the foundation for much of the rock property information presented in this section. Sidewall cores were collected from the Palm 1 exploration well. A cased hole test of the Palm #lA provides the basis for the fluid information. A full logging suite of LWD GR/Resistivity, porosity and CMR logs was completed on both Palm 1 and lA wells. Reservoir Description The mapped gross reservoir interval in the Drill Site 3S area is approximately 7.5' to 35' thick. The Palm #1 and #lA wells penetrated a range of gross reservoir intervals from 30' to 35' thick, with a corresponding net-to-gross ratio of approximately 0.73. Log model net pay is calculated using a 15% porosity cutoff on log derived porosity data. Average porosity ranges from 19% to 21%. Calculated log model water saturations for the Palm #1 and #lA wells are 12% and 13% respectively (Figure A-6). Permeability ranges from less than 1 md to almost 1000 md. Fine scale (inches) changes in siderite composition and concentration play a dominant role in determining sandstone reservoir quality. Average permeability from well testing at Palm #lA is approximately 100 md. Top reservoir lies at a depth of 5750' to 5800' TVD subsea. Rate and Pressure History The oil accumulation within the Drill Site 3S area was discovered during the 2001 winter exploration program with the drilling of the Palm #1 exploration well from an ice pad. Well logging in addition to sidewall coring and repeat formation testing (RFT's) confirmed the presence of a hydrocarbon saturated C4 Sand with similar rock properties to the main Kuparuk C4 Sand Reservoir. Pressure analysis indicated the reservoir to be approximately 650 psi over pressured confirming the accumulation is in communication with injectors in the main field. Page 3 Attachment A - Kuparuk River Oil Pool Area Expansion A sidetrack (Palm ¢1A) was drilled to the NE of the Palm ¢1 well using the existing well bore to confirm areal extent of the accumulation. Well logging in Palm ¢1A confirmed the presence of hydrocarbon saturated C4 Sand and the well was completed for flow testing and pressure build-up analysis. Well testing operations were initiated in April with the well producing an average final rate of 2350 bpd of 26° APl oil at 350 psi surface pressure and 3580 psi reservoir pressure (Figure A-7). Approximately 14,000 bbls of crude were produced during the seven-day flow period and the final build-up lasted over 11 days with down hole data collection. Pressure build-up analysis confirmed the presence of a high quality reservoir with a constant pressure boundary (Figure A-8). Original reservoir pressure in the Drill Site 3S area was estimated at approximately 2950 psi. The measured pressure from RFT data in Palm ¢1 and pressure build-up analysis on Palm ¢1A was approximately 3600 psi and was approximately 650 psi over pressured proving both wells are in communication with the main Kuparuk Reservoir (Figures A-8 and A-9). At this time, this communication is believed to occur from injectors located on the western boundary of Drill Site 3G or Drill Site 3H, which may be linked up via the A Sand truncation LCU surface or through thin laterally continuous C sands. Reservoir Fluid Properties Reservoir fluid properties are estimated from fluids recovered during RFT sampling on the Palm ¢1 well and a cased-hole test of the Palm ¢1A well. The range of APl gravities from these samples was 24-26° and solution GOR was -485 SCF/STB. Paraffin and asphaltene content were Iow. These Drill Site 3S fluid samples are in line with crude properties in the main Kuparuk River Field. IV. Reservoir Development This portion of the application includes a discussion of the recovery process selection and the development and management strategies that are planned with the Drill Site 3S development. Recovery Process Selection Screening analysis resulted in a decision to initially pursue a recovery process involving altemating cycles of water and miscible gas (MWAG), which is currently used in the main Kuparuk River Field. Development Approach The scope of the Drill Site 3S development project involves drilling approximately 19 additional wells (re-using Palm lA exploration well) in the Kuparuk C4 Interval. Development of this area is planned from a new Kuparuk extension Drill Site which will tie into the existing GKA infrastructure at DS 3G and utilize Page 4 Attacnment A - Kuparuk River Oil Pool Area Expansion existing Central Production Facility 3 (CPF-3) to process produced fluids. The development would consist of a single gravel pad, a 4.8 mile long gravel road, pipelines, buried power line, on-pad facilities and approximately 20 total development wells (12 producers and 8 MWAG injectors), re-using the Palm #lA exploration well which was preserved on the pad (Figure A-10). Production is currently scheduled for start-up during 4th quarter 2002. Initial injection support would commence no later than six months after first production. No Horizontal and/or high angle wells are planned at this time. In areas of thin pay or poor continuity high angle wells may be required. First year incremental production from the planned drill site following full development is estimated at 16 MBPD of oil (Figure A-11). Well Spacin_q Plans are to develop the Drill Site 3S area on nominally a 160-acre well spacing per Rule 3 of Conservation Order No. 432 dated July 22, 1998 as applied to the Kuparuk River Field. Stimulation Plans The affects of siderite and glauconite on vertical and horizontal permeability in the Kuparuk C4 Sand in the Drill Site 3S area makes producer propped hydraulic fracture stimulations desirable. Presently a portion of the producers at Drill Site 3S are proposed for fracturing. Injection well fracturing is not planned on initial completion. However, if injectivities are poor or if injection logs indicate significant portions of the reservoir are not accepting injectant, injectors will be stimulated with high-pressure breakdowns. Artificial Lift Drill Site 3S completions will include down hole jewelry that will allow the use of artificial lift, such as hydraulic jet pump, hydraulic piston pumps, lift gas, or plunger lift systems to be installed as needed. Current artificial lift plans are to use lean gas for artificial lift followed by MI lift when MI is introduced into the reservoir in this area. A single gas line is available to carry either lean gas or MI gas to Drill Site 3S. V. Facilities Introduction This portion of the application summarizes the injectant sources that will initially be used at Drill Site 3S. Discussion of the pads, roads, drill site facilities and other infrastructure is also presented below. Page 5 Attachment A - Kuparuk River Oil Pool Area Expansion General Overview Drill Site 3S production will be commingled with Kuparuk production in surface facilities prior to final processing and ultimate custody transfer. Sharing existing production facilities is possible due to existing spare liquid capacity at Kuparuk's CPF-3. Economical development is contingent upon utilization of these facilities. Drill Site 3S will make maximum use of the existing Kuparuk River Unit (KRU) infrastructure. This maximizes reserves and minimizes the environmental impacts. The miscible injectant employed at Drill Site 3S will initially be the same injectant as that currently used in the KRU Large Scale EOR Project. This injectant is manufactured at Kuparuk's CPF-1 and CPF-2 by blending lean gas from the KRU's production facilities with solvent (i.e., light hydrocarbon liquid streams) from the Prudhoe Bay Unit (PBU) and KRU. The light liquid hydrocarbons from the PBU are NGLs from the Central Gas Facility (CGF). The light liquid hydrocarbons from the KRU consist of scrubber liquids from artificial lift gas compression systems at CPF-1 and CPF-2, NGLs from CPF-1 and naphtha from the Topping Plant. After completing the MWAG recovery process, plans are to eventually inject lean gas into the Kuparuk River Oil Pool to maximize recovery of the light hydrocarbon liquids that were injected into the reservoir as part of the miscible injectant stream. The source of the lean gas will likely be Kuparuk River Unit's CPF-2. However, other potential gas sources will also be considered. Pads and Roads Drill Site 3S development involves the addition of one new drill site to the Greater Kuparuk Area (GKA), along with required ancillary and support facilities. Drill Site 3S is 4.8 miles west of existing KRU Drill Site 3G. The drill site is designed to accommodate a total of 26 wells on 20-foot centers. A road connecting the new drill site to the existing road system is routed from Drill Site 3G to Drill Site 3S. One triple span bridge was required along the roadway to cross Kalubik Creek. Pipelines Cross-country pipelines include a 16-inch common line from Drill Site 3S to KRU Drill Site 3G, where it ties into the existing common lines and flows to CPF-3. A new 8-inch water injection line runs from Drill Site 3S to 3G and an 8-inch MI injection line runs from Drill Site 3S past 3G to KRU Drill Site 3F. This pipeline accelerates MI injection at the 3G Drill Site. Pipelines were generally offset from gravel roads by at least 450 feet, are 7' above the tundra and coated with an Page 6 Attacnment A - Kuparuk River Oil Pool Area Expansion anti-reflective finish. This pipeline work was completed from an ice road during winter 2002. Power Line Electrical power will be transmitted from Drill Site 3G to Drill Site 3S over a new buried 34.5 kV power line installed in the tundra beneath the roadway in winter 2002. Drill Site Facilities The design premise for Drill Site 3S facilities is for daily operations to require minimal operator presence. All data gathering and routine operations are to be accomplished remotely from CPF 3 or Drill Site 3S control room. Facilities to be installed initially at the drill site include: · Production, test, water injection and MI injection lateral piping headers · Test separator for well testing · Instrumentation, control, and communication equipment. and Testing can take place remotely through a divert valve system, which redirects the flow from the production header to the test separator. VI. Drilling & Well Design Introduction The information below discusses activities related to drilling and completing Drill Site 3S wells. Discussion is also presented on safety systems. Casing & Cementing Casing and cementing plans for Drill Site 3S wells are consistent with AOGCC Regulation 20 ACC 25.030. All casing and cementing requirements will adhere to Rule 4 of Conservation Order No. 432 dated July 22, 1998 as applied to the Kuparuk River Field. Automatic Shut-in Equipment All automatic shut-in equipment requirements will adhere to Rule 5 of Conservation Order No. 432 dated July 22, 1998 as applied to the Kuparuk River Field. Page 7 Attachment A - Kuparuk River Oil Pool Area Expansion VII. Reservoir Surveillance Introduction This section provides data regarding reservoir surveillance. Reservoir Pressure Measurements All Pressure measurements requirements will adhere to Rule 8 of Conservation Order No. 432 dated July 22, 1998 as applied to the Kuparuk River Field. Productivity Profiles All productivity profiles requirements will adhere to Rule 9 of Conservation Order No. 432 dated July 22, 1998 as applied to the Kuparuk River Field. Hydraulic propped fracture stimulations will limit the usefulness of production and injection logs. Surveillance logging will be used to monitor injection in wells that have not previously been stimulated with hydraulic propped fracture stimulations. VIII. Summary The KRU working interest owners are first and foremost committed to a safe and environmentally sound operation. The proposed drilling program at Drill Site 3S meets or exceeds all requirements specified in the Commission's rules and regulations. Drill Site 3S facilities are designed to operate safely and efficiently. All well and facility designs meet or exceed the standards specified by state or national codes, the recommended practices of the relevant advisory organizations, and/or the time-proven practices of prudent operators. Plans are to make maximum use of the existing KRU infrastructure, thus minimizing environmental impacts while .maximizing reserves for the Greater Kuparuk Area. Page 8 PHILLIPS Alaska, Inc. A Subsidiary of PHILLIPS PETROLEUM COMPANY Post Office Box 100360 700 G Street Anchorage, Alaska 99510 Telephone 907 265-6806 Chris Alonzo, Drill Site 3S Coordinator September 4, 2002 Ms. Cammy Oechsli Taylor Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Re: Kuparuk River Oil Pool Area Expansion for Drill Site 3S Dear Commissioners: By this letter, Phillips Alaska, Inc. (PAl) is seeking to expand the area of the Kuparuk River Oil Pool described in Conservation Order No. 432 (via Order No. 349A) to include the area encompassed by ongoing development activities at Kuparuk River Unit Drill Site 3S. The Drill Site 3S Project is located Northwest of existing Kuparuk River Unit Drill Site 3G (Figure 1) and is in pressure communication with the main Kuparuk River Field. The Drill Site 3S project consists of a single drill site with developable acreage located partially outside the current Kuparuk River Unit (KRU) boundaries. An application to expand the Kuparuk River Unit boundary to include the proposed development acreage and expand the Kuparuk Participating Area (KPA) was filed with the Alaska Department of Natural Resources on July 2, 2002 and is currently under review (Figure 2). PAl anticipates the KRU and KPA expansion will be com,~leted prior to initiation of production at Drill Site 3S currently scheduled for 4"' quarter 2002. Detailed geophysical, geologic and engineering information describing the expansion area associated with Drill Site 3S development is provided in Attachment A which PAl considers confidential. The majority of acreage associated with Drill Site 3S development is currently included in the existing Kuparuk River Oil Pool described in Conservation Order No. 432 (via 349A) as depicted on Figure 2 and Figure 3. No changes to this Order other than increasing the Kuparuk River Oil Pool area is requested. Therefore, based on the data in this application PAl requests approval for the following area to be added to those described in Conservation Order No. 432 (via Order No. ,.~ ,,~ .. 349A) for the Kuparuk River Oil Pool (Figure 3). ,.~.,.,,~., Phillips Alaska, Inc. Is a subsidiary of Phillips Petroleum Company UMIAT MERIDIAN T12N-R7E Section 1,2, 11, 12, 13, 14, 15, 16, 21,22, 23, 24. We appreciate your work on this application and would be happy to answer any related questions. I can be reached at 265-6822 or calonzo@ppco.com via email. Sincerely, Drill Site 3S Coordinator Attachments Page 2/5 Figure 1 KRU Drill Site 3S Location Alpine Unit 35 NPRA Nuiqsit Kuparuk River Unit Meltwater Page 3/5 Figure 2 KRU and KPA Expansion Areas Current KRU Pool Rule Area L . Legend UIC Exemption Area Area Injection Order No 2A Conse~ation Order No 349A Kuparuk River Unit Proposed 8tl~ Kuparuk River Unit Expansion Areas Kuparuk Participating Area Kuparuk Participating Area 8th E×pans~on Proposed 9th Expansion Kuparuk Participating Area Tract Numbers PHILLIPS Alaska, Inc. A Subsidiary of PI..IILL, IPS PETROLEUM COMPAN~t 3S Development 8-12-02 3_lankatlMonthlylAugl2OO~Exhlblt Page 4/5 Figure 3 Drill Site 3S Development Proposed KRU Pool Rule Area Expansion 3S Development i ADL02=r~24::i AD,L025523~ KRU Pool Rules Expansion Area Request I'IIII, I T12N- R: 'Tll N - ,2 ADL02~31 ,:,.~ ADL~)546 3A(~ 3G ADL026547 "T~2N - R8E AD'L025548 ,DL02563 ADL021~,43 Page 5/5 PHILLIPS Alaska, Inc. A Subsicliary of PHILLIPS PETROLEUM COMPANY Post Office Box 100360 700 G Street Anchorage, Alaska 99510 Telephone 907 265-6806 Chris Alonzo, Drill Site 3S Coordinator September 4, 2002 Ms. Cammy Oechsli Taylor Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Re: Kuparuk River Unit Area Injection Order Expansion for Drill Site 3S Project 20 AAC 25.4O2 Dear Commissioners: Phillips Alaska, Inc. (PAl) is pursuing development of the Kuparuk C4 Sand at Kuparuk River Unit Drill Site 3S. PAl initially briefed the Commission on Drill Site 3S development activity during an August 27, 2002 meeting. The Drill Site 3S development requires expansion of the area currently approved for enhanced recovery operations in Kuparuk River Unit (KRU) Area Injection Order #2A. PAl submits this application to expand the KRU Area Injection Order affected area to include the Drill Site 3S development area, consistent with 20 AAC 25.402 (a). Approval of the application would permit these operations to be conducted within the existing Kuparuk River Field, Kuparuk River Oil Pool (KRKROP). This letter provides the technical details sUpporting this application. The 1. . , 1 1 8. 9. 10. 11. following attachments are submitted pursuant to 20 AAC 25.402 (c): Plat with location of all existing wells that penetrate the injection zone within one- quarter mile of the area covered by this application. List of operators and surface owners within one-quarter mile of the proposed injection operations. Affidavit showing that operators and surface owners within one-quarter mile of the area affected by the Kuparuk River Unit Area Injection Order were provided a copy of the September 4, 2002 application. Full description of the proposed operation. Description, depth, and name of the pOol to be affected. Description of the formation into which fluids are to be injected and the associated confining zones. Type well log. Casing description and proposed method for testing injection well casing. Injection fluid data. Estimated injection pressures. Evidence and data to support a commission finding that injection wells will not initiate or propagate fractures through the overlying strata. Phillips Alaska, Inc. is a subsidiary of Phillips Petroleum Company 12. Analysis of the water within the formation. 13. Reference to freshwater exemptions issued under 20 AAC 25.440. 14. Incremental increase in ultimate hydrocarbon recovery. 15. Mechanical condition of each well that has penetrated the proposed injection zone within a one-quarter mile radius of a proposed injection well. I appreciate your work on the Kuparuk River Unit Area Injection Order expansion application and would be happy to answer any related questions. I can be reached at 265-6822 or calonzo@ppco.com via email. Sincerely, Chris Alonzo Drill Site 38 Coordinator cc: Chris Ruff, DNR Kuparuk River Unit Area Injection Order Expansion 'Page 2/25 Kuparuk River Unit Area Injection Order Expansion Attachment I 20 AAC 25.402 (c)(1) Plat of Wells Penetrating Injection Zone The attached map (Attachment lA) shows all existing wells that penetrate the injection zone within the Kuparuk River Unit Area Injection Order in the Drill Site 3S expansion area as of September 1, 2002. The map also shows the Kuparuk River Unit (KRU) and the Kuparuk Participating Area (KPA) proposed expansion areas for the Drill Site 35 project as filed with the Alaska Department of Natural Resources on July 2, 2002. In addition, the map shows proposed Drill Site 3S development wells (with their expected initial service) scheduled for drilling during late 2002 and 2003. Initial well location and service plans may change as net pay and well performance data are gathered. The total number, type and locations of wells ultimately drilled into the Drill Site 3S area will also be a function of net pay and Well performance data. KHn~r.k Riv~.r [init ArA~ Ini~.~.tic~n Order I::x[~ansion Pa.qe 3/25 Attachment lA Drill Site 3S Area Wells I I 2 Miles I · ' 1,o mi i ii ii i B II · · °15 KALUEIK CRE El " · ,,17 '14 "~ · 7 ~J; '6 · .19 18 -'" PALM lA · . 22, F~ALM 1 3 · · · ,23 2,0 2 · · I II I I II II II II I I II I1'1 · I "24 , ,,_ · m, mi rib mm, lB .'ii :.~.~" ;~.i".:ii. 'ii';::'"..'~!?~a~.':i~.:.:.' .,,,,,: :'-,'":::"~: '-...:.:: .? .!. :i..::.i.i:i'!:..?:v .': ~':"i !?::': '"' :' :";:'.:?::,?!:.":.i',?: ~ .~.~....~.~..~...~..i:.;...;~i.........':.:".i:::.,...:.:'."..~, , ..... ?.:..,...,..;....?. :..?...... !!.'!..~.. Proposed KRU Kuparuk River Unit Area Injection Order Expansion Page 4/25 Kuparuk River Unit Area Injection Order Expansion Attachment 2 20 AAC 25.402 (c)(2) Operators and Surface Owners within One Quarter Mile of Injection Operations Operator: Phillips Alaska, Inc. Attention: Dan Kruse ATO-1220 P.O. Box 100360 Anchorage, AK 99510-0360 Surface Owner: State of Alaska Department of Natural Resources Attention: Chris Ruff P.O. Box 107034 Anchorage, AK 99510 Kuparuk River Unit Area Injection Order Expansion Page 5/25 Kuparuk River Unit Area Injection Order Expansion Attachment 3 20 AAC 25.402 (c)(3) Affidavit of Chris J. Alonzo Regarding Notice to Surface Owners Chris J. Alonzo, on oath, deposes and says: 1. I am the Drill Site 3S Coordinator at Phillips Alaska, Inc., the designated operator of the Kuparuk River Unit (which will include the Drill Site 3S expansion area). 2. On September 4, 2002, I caused copies of the Kuparuk River Unit Area Injection Order Expansion Application to be provided to the surface owner and operator of all land within a quarter mile of the unit as listed below: State of Alaska Department of Natural Resources Attention: Chris Ruff P.O. Box 107034 Anchorage, AK 99510 Phillips Alaska, Inc. Attention: Dan Kruse ATO-1220 P.O. Box 100360 Anchorage, AK 99510-0360 STATE OF ALASKA THIRD JUDICIAL DISTRICT SUBSCRIBED AND SWORN to before me this 4th day of September, 2002. NOTARY PUBLIC IN AND FOR ALASKA My Commission Expires: %i I~'],O~' Kun~ruk River tJnit Are~ Iniection Order ExDansion 'Page 6/25 Kuparuk River Unit Area Injection Order Expansion Attachment 4 20 AAC 25.402 (c)(4) Description of the Proposed Operation An expansion of the Kuparuk River Unit (KRU) Area Injection Order area is needed to develop KRU Drill Site 3S. The expected scope of the current development project involves drilling approximately 19 new wells (and re-using exploration well Palm #lA) to develop 36 MMBO associated with an estimated 74 MMBO original oil in place (OOIP) as delineated by existing exploratory wells and seismic mapping in the Kuparuk C4 Sand interval of the Kuparuk River Field, Kuparuk River Oil Pool. Field Development Development wells will be drilled from a single new drill site. Initial development drilling operations are planned to start during the fourth quarter 'of 2002. The drilling program will initially focus on developing the main portion of the reservoir and testing the periphery. Well performance data and improved seismic calibrations acquired from the initial development wells will help guide the extent of the overall development drilling program. Exploratory drilling targeting other zones within the Drill Site. 3S area will be conducted concurrently with development drilling operations. Successful exploratory drilling results could alter existing plans by (1) changing the location and target interval of the initial development wells and (2) expanding the scope of the project to include additional wells. An expanded project scope would likely invOlve additional development drilling phases and may require additional areal expansion of the proffered Kuparuk River Unit Area Injection Order. Recovery Mechanism ' One of the most critical aspects to the Drill Site 3S deVelopment is the recovery process. Screening analysis resulted in a decision to initially pursue a reCovery process involving alternating cycles of water and miscible gas (MWAG). Following are the main reasons for this selection: 1. Ongoing MWAG processes in the main Kuparuk reservoir C sands have expected incremental recovery of 8% to 12% OOIP over base water flood recoveries. . Enriched natural gas is miscible with DS 3S fluids at reservoir conditions. (Henceforth in this document, enriched natural gas will be referred to as "MI" for Miscible Injectant.) Numerical simulation indicates that alternating cycles of water and MI provide higher recoveries than any other competing recovery process (i.e., primary drainage, water flood, MI flood, and lean gas flood). For example, simulation work indicates MWAG process is expected to increase recovery by approximately 7% OOIP compared to water flood, alone. Kuparuk River Unit Area Injection Order Expansion Page 7/25 1 MI is currently piped to offset Kuparuk DS 3F and is transportable to DS 3S for a relatively small premium. Additional upside is captured at DS 3G, which will have access to MI following pipeline construction at DS 3S. e Injecting MI at Drill Site 3S would have no appreciable recovery impact on existing GKA developments. Although employing MWAG at Drill Site 3S would delay the rate of Kuparuk EOR expansion, recovery would essentially remain unchanged as the forecasted number of Kuparuk drill site expansions would remain unchanged. In addition, injecting MI at Drill Site 3S would have near-term rate benefits at Kuparuk. This is because Drill Site 3S would be more efficient at storing gas than older Kuparuk EOR drill sites. Injecting MI at Drill Site 3S would therefore result in less MI recycle. Since GKA production is limited by gas handling facilities, less MI recycle translates into higher production rates. Si Initially pursing MWAG is imperative if this EOR process is to be employed. Drill Site 3S MI supply is dependent on existing GKA infrastructure. The MWAG floods in some portions of CPF-3 area are relatively mature. Delaying implementation of MWAG at Drill Site 3S would therefore jeopardize this project's EOR reserves,' as critical GKA infrastructure may not be available in the future to transport MI. (Other potential uses of the GKA MI distribution system include de-bottlenecking production/injection lines and providing high pressure lift gas). After the cumulative target slug size of MI has been injected into the formation, pressure support will be maintained with water injection. Current plans are to eventually inject lean gas into the reservoir to help recover light liquid hydrocarbons (used to manufacture MI) that will be trapped in the reservoir by the MWAG process. Iniectant Sources The miscible injectant employed at Drill Site 3S will initially be the same injectant as that currently used in the KRU Large Scale EOR Project. This injectant is manufactured at Kuparuk's CPF-1 and CPF-2 by blending lean gas from the KRU's production facilities with solvent (i.e., light hydrocarbon liquid streams) from the Prudhoe Bay Unit (PBU) and KRU. The light liquid hydrocarbons from the PBU are NGLs from the Central Gas Facility (CGF). The light liquid hydrocarbons from the KRU consist of scrubber liquids from artificial lift gas compression systems at CPF-1 and CPF-2, NGLs from CPF-1 and naphtha from the Topping Plant. Kuparuk River Unit Area Injection Order Expansion Page 8/25 Fluid and Cost Allocation Drill Site 3S production will be commingled with other Kuparuk River Unit Drill Sites prior to final processing and ultimate custody transfer in accordance with the Kuparuk River Field Pool Rules. The interests of the Drill Site 3S area WIOs will be integrated within the Kuparuk Participating Area of the Kuparuk River Unit. Costs and production will be allocated in accordance with the Kuparuk River Unit Operating Agreement. The KPA Area and Cost working interests in the Drill Site 3S area are as follows: Area Cost Phillips Alaska, Inc. 0.551667 BP 0.391920 Unocal 0.049506 Mobil (Heritage) 0.003648 Chevron 0.001086 Exxon 0.002173 0.55745573 0.39603247 0.03960480. 0.00364800 O.00108600 0.00217300 Total 1.000000 1.00000000 Injection Area The proposed area of injection, which correspOnds to the proposed Kuparuk River Participating Area expansion and possible upside C4 Sand development, is depicted in Attachment 4A. Kuparuk River Unit Area Injection Order Expansion Page 9/25 Attachment 4A Proposed KRU Area Injection Order Expansion Area 3S Development KRU AIO Expansion Area Request T12N - R' TltN -R7E , ', ' T13N-R8E ~1 'ADL025524 , ADL025523L, ADL~4& (~ ,3G ADL025647 ,DL025631 T 1'1 N - ADL025548 ' ADL02,~43 Kuparuk River Unit Area Injection Order ExpanSion Page 10/25 Kuparuk River Unit Area Injection Order Expansion Attachment 5 20 AAC 25.402 (c)(5) Description and Depth of Pool to be Affected The Kuparuk Formation is defined and described in publicatiOns. It is a sequence of clastic sediments deposited on a shallow marine shelf during Neocomian (Early Cretaceous) time, about 140-120 million years ago. The Kuparuk Formation is divided into Upper and Lower Members. These two Members are comprised of 4 Units, in ascending order, Units A, B, C, and D. The A and C units are the pay-bearing intervals. The following descriptions refer to the Kuparuk Formation in the general area of the Kuparuk River Field. The Kuparuk C Unit is composed of sandstones with subordinate conglomerates and lesser shales. C sediments were deposited in a variety of marginal marine environments. In general, conditions were more .marine to the east, within and beyond the KRU. In the west, evidence from secondary cements as well as trace fossils suggests a nearby source of fresh water and a shOreline. The C Unit is divided into four intervals, C-1 through C-4. Intervals are successively younger upward, and axes of deposition shift successively southwest with time. Throughout the larger part of the KRU, C sand deposition and trends are controlled by syndepositional, northwest-trending normal faults. , Within the Drill site 3s area, exploration wells Palm #1 and #lA were drilled during the 2001 winter season..Both wells penetrated reservoir quality sands in the Kuparuk C4 interval at a depth of approximately 5750-5800 feet TVD. As expected, the Kuparuk A sand was absent being fully truncated by the LCU in this.area, Kuparuk River Unit Area Injection Order Expansion page 11/25 Kuparuk River Unit Area Injection Order Expansion Attachment 6 20 AAC 25.402 (c)(6) Description of the Formation The proposed injection zone is the Kuparuk C4 Sand within the Kuparuk River Field Oil Pool. This zone lies between 5752' and 5786' tvd subsea in the Palm #lA well (Attachment 7). The Hauterivian C4 sandstone, identified in the Palm exploration wells in the Drill Site 3S area, is separated from the underlying Miluveach mudstones by the regional Lower Cretaceous Unconformity. A transgressive surface of erosion marks the contact between C4 sandstones and overlying mudstones of the Kalubik Formation. The C4 interval in this area is interpreted to represent transgressive shoreface deposits on the flank of the Kuparuk trough. Accommodation and preservation of these shoreface deposits was created in part by deep seated northWest-southeast trending normal faults. The. Kuparuk C4 sand .reservoir is comprised of bioturbated, fine to medium- grained sandstone with variable amounts of glauconite, clay pellets, and siderite. cement. Kuparuk River Unit Area Injection order Expansion Page 12/25 Kuparuk River Unit Area Injection Order Expansion Attachment 7 20 AAC 25.402 (c)(7) Log of Drill Site 35 Type Well PALM_lA ~PHILLIPS Alaska, Inc. 501032036101 ~ A Subsidiary c~ PHILLIPS PETROLELIVl COMPANT LOCATION FIELD LAT: 70.394305 NORTH ALASKA TIGHT HOLE LONG: -150.195639 DRILLED DEPTH ZONE: ASP 4 9222 X: 475954.67 ELEVATION KB ,,Y:, 59~)3842.4 CORE.PERMHORZ_I OH. BIT_SIZE_ 'i o.~ MO 8 -- ' -- --IN .... 1~ PAT3, PERM_NN_I"~f/' ~-I SP ~.2 MD 2000 O~ OH, NPI-II S_MWD_/A_ 1 OH.ROP_MWD_R_I ~ O~ n- ~ --~;-"'-- o 5oo ~PHR ~ SSTVE Depth OH.RPM_MWD_R_I Iii Iii ( OH,OT_MWD_R_ 1 FEET tl FEET ~),2- - -~HMTvl- -- ~00~ OH.GR_I oH, RPF_). MWO_.R. 1 OH. RHOB_MWO_R_I 0 (~API lr300.2 OHMM 2.006 2 (~/C~ .. . . .. :'.. . ~ .. ~ :. ~.~,~ -. .............. ........ ~. . · ~ ....... _- "i ' ' ..... ...... - ................., ' , " " ...., ..... · ..... ' ........ .~..~ .- .~ ...... I .-I.- ~- ~,- .... , i ..... - ~ ' - ~--'--_ ," "" .- ...... "'~;' _ ~ 5 ......... .~. .... .... ~, ......... ........... i ...........~ .I.... i ........ 3 ~ ' ........... ~ I ..... "-' "- ~ ~':~ · ~1~t' ..... ~ ' ...I ............... ? ............. i ........ I ................... Kuparuk River Unit Area Injection Order Expansion Page 13/25 Kuparuk River Unit Area Injection Order Expansion Attachment 8 20 AAC 25.402 (c)(8) Casinq Description and Proposed Method for Testing Casing The proposed casing programs for a typical Drill Site 3S well resembles the casing programs employed in the Kuparuk River Unit (KRU) completions. Standard Casin.q Proaram As in KRU wells, conductor casing will be set below 75 feet to provide anchorage and support for the rig diverter assembly. Insulated 16 inch by 30 inch conductors with spill containment vessel are planned. Planned surface casing size is 9-5/8 inch (L-80, 40 pound). Surface casing will be set below the base of the West Sak interval, effectively casing off the permafrost, Ugnu, and West Sak formations. Following setting of surface casing, two options are proposed for completing Drill Site 3S wells. A 7 inch (L-80, 26 pound) long string set through the Kuparuk formation back to surface with 3Y2" (L-80, 9.3 pound) tubing or 7 inch (L-80, 26 pound) top set above the Kuparuk interval back to sudace and a 31/2 inch (L-80, 9,3 pound) liner set through the Kuparuk. Leak off testing will be completed priOr to drilling the Kuparuk interval to determine if the formation above the Kuparuk has integrity to handle the high reservoir pressures found in the area. The liner across the Kuparuk interval is then tied back to surface with a string of 3Y2" tubing inserted into a seal bore or polished bore receptacle (positioned above the top pay zone perforation). This provides a tubing annulus with isolation and pressure integrity (see diagrams shown in Attachment 8A). Each of these well tYpes may be completed for either production or injection service. Drilling and Completion plans for future Drill Site 3S wells may vary with time as experience and knowledge are gained. The proposed method casing testing method for Drill Site 3S injectors is to follow the requirements of 20 AAC 25.412 (c & d). Sufficient notice of pressbre tests will be given so that a Commission repreSentative may witness the test. Kuparuk River Unit Area Injection Order Expansion Page 14/25 , Kuparuk River Unit Area Injection Order Expansion Attachment 8A 20 AAC 25.402 (c)(8) 30' x 16' 62.6# @ +/- 110' MD (Insulated) 3S Pad Development Proposed Completion Schematic Surface csg. 9-518" 40.0# L-80 BTCM Longstring Case FutureProduction Perforations csg. 7" 26.0~ L-80 BTCM 3S Pad Development Proposed Completion Schematic Topset Case 30" x 16' 62.6# @ +1- 110' MD (Insulated) Surface csg. 9-5~8' 40.0# L-80 BTCM intermediate csg. 7' 26.0# L-80 BTCM Future Perforations Production Uner 3-1/2" 9.3# L-80 SLHT ,Kuparuk River Unit Area Injection Order Expansion Page, 15/25 Kuparuk River Unit Area Injection Order Expansion Attachment 9 20 AAC 25.402 (c)(9) Injection Fluid Analysis The vast majority of the MI initially employed at Drill Site 3S will originate from Kuparuk River Unit's CPF-2. During late 2003/2004 timeframe, both MI and water will be employed to provide pressure support and maximize sweep. After completing the MWAG recovery process, plans are to eventually inject lean gas into the Drill Site 3S area to maximize recovery of the light hydrocarbon liquids that were injected into the reservoir as part of the miscible injectant stream. The source of the lean gas will likely be Kuparuk River Unit's CPF-2. However, other potential gas sources will also be considered. The initial water injection source will be CPF-3 produced water. Fresh water collected in well cellars from snowmelt may also be injected for short time periods to minimize road traffic dUring the caribou calving season. The average MI and lean gas compoSition produced at the Kuparuk CPF-2 facility during 2000 is presented below. Also shown below is a CPF-3 produced water analysis. Maximum MI/lean gas and water injection rates into the Drill Site 3S area are estimated at 22 MMSCFPD and 24 MBWPD, respectively. There is no evidence from laboratory core flood experiments or compositional studies that indicate the fluids proffered for long-term injection would pose any appreciable compatibility problems for Kuparuk C4 Sand or its confining zones. Short periods of fresh water injection are also not expected to cause any' appreciable compatibility problems. If injectors do incur damage from fresh water injection, remedial treatments (e.g., acid stimulations, high pressure breakdowns, etc.)can be employed. KuDaruk River Unit Area Injection Order Expansion Page 16/25 Miscible Injectant & Lean Gas Composition Supplied by the Kuparuk River Unit's CPF-2 Component CO2 N2 C1 C2 C3 i-C4 n-C4 i-C5 n-C5 C6 C7 C8+ Lean Gas MI (Mole %) (Mole %) 0.89 0.5 0.27 0.3 81.37 69.6 8.79 6.7 5.10 5.0 0.92 2.2 1.99 6.3 0.30 2.0 0.28 2.5 0.07 2.1 0.01 1.8 0.00 1.0 C, PF-3 produced Water Analysis Component Concentration Sulfate ' 159 Sulfide 12 Bicarbonate 1,920 Aluminum <0.15 Ammonia 20 Barium 35 Boron 18 CalCium 137 Chloride 13,131 Chromium <0.06 Fluoride < 10 IOdide 12.6 Iron 0.74 Lithium 1.2 Manganese <0.003 Magnesium 99 Phosphorus <0.5 Potassium 60 Silicon 20 Sodium 8,800 Strontium 6.7 Kuparuk River Unit Area Injection Order Expansion Page 17/25 Kuparuk River Unit Area Injection Order Expansion Attachment 10 20 AAC 25.402 (c)(10) Estimated Pressures The maximum MI and water injection pressures available at the plant will be 4,400 psi and 3000 psi, respectively. Due to pressure losses in the distribution system, actual maximum wellhead pressures will vary. Injection wells may also be choked to avoid exceeding injection targets. MI and water wellhead injection pressures are expected to range from 3,400 - 3,600 psi and 2500- 2800 psi, respectively. K.n~ruk River Unit Area Iniection Order ExDansion Page 18/25 Kuparuk River Unit Area Injection Order Expansion Attachment 11 20 AAC 25.402 (c)(11) Fracture Information The estimated maximum injection pressures for enhanced recovery wells will not initiate or propagate fractures through the overlying confining strata, which might enable the injection or formation fluid to enter freShwater strata. Although bottom-hole pressures may exceed the formation parting pressure during enhanced recovery operations (i.e., water and MI injection), the Kuparuk C4 Sands in the Drill Site 3S area are overlain by approximately 600' of confining shales, which act as an impermeable barrier. These confining layers provide a substantially greater barrier than necessary to contain fractures within the Kuparuk interval, These confining shale zones, comprised of -180 feet of Kalubik Shale, -170 feet of HRZ and -250 feet Torok Shale, are the same shales that overly the main Kuparuk River Field Oil Pool and have proven over time to limit fracture growth from injection activity. Hydraulically propped fracture stimulations are planned for a portion of Drill Site 3S producers. The-600' of confining shales and mudstones also provide a substantially greater barrier than necessary to contain these fracture stimulations Kuparuk River Unit Area Injection Order Expansion Page 19/25 Attachment 13A KRU UIC Exemption Area PHILLIPS Alaska, Inc. A ~4J13~3t el PHILLIPS P'E~ROLEUM COMPANY 3S Development T12N - R' '.,, Tll - E T11N - .i~.' '.-'" T 1 ..* N -R8E ADL02552; Q , ADL~646 3G ADL025547 ADL025548 UlC ExemptionAre. Ama Injection Order Ne 2A Conservation Order No 34gA Kuparuk River Unit Propoled 8th KuPan. lk River Unit ExpaneionArea Kuparuk Pel~ictpatlng Area KFA 8th Expanlion KFI~ 9~h Expansion Tract Numberl KuDaruk River Unit Area Iniection Order Expansion Page 22/25 Kuparuk River Unit Area Injection Order Expansion Attachment 14 20 AAC 25.402 (c)(14) Incremental Hydrocarbon Recovery The Kuparuk C4 Sand was tested in the Palm #lA exploration well. Fluids recovered from this test and from RFT sampling in Palm #1 indicated this interval contains 24-26° . ,APl gravity crude with a solution GOR of approximately 485 SCF/STB. There is no evidence that this zone is in contact with a gas cap and the water oil contact is approximately 600 feet down structure. Simulation results indicate that an MWAG process with a cumulative 15% hydrocarbon pore volume slug of MI would provide an overall recovery factor of approximately' 48%. OOIP. This recovery factor is approximately 6-8% OOIP higher than that obtained from waterflood and more than 20% OOIP higher than that obtained from primary depletion. Kuparuk River Unit Area Injection Order Expansion Page 23/25 Kuparuk River Unit Area Injection Order Expansion Attachment 15 20 AAC 25.402 (c)(15) Mechanical Condition of Existing Penetrations There are no current active wells within a one-quarter mile radius of the Drill Site 3S area. One exPloratory well (Palm #1) and a sidetrack (Palm #lA) were drilled to evaluate the area during the winter of 2001. The Palm #lA sidetrack well (re-named 3S-26) was completed for future injection service following a brief' period of pre- production. The schematic of this well is shown on Attachment 15A. Older exploration well penetrations in the area (Colville 1 and Kalubik Creek 1) have been PlUgged and abandoned as per AOGCC regulations (20 AAC 25.112). All casing strings were cut three feet below the original ground level with well abandonment markers installed as per 20 AAC 25.120. The well cellars were removed and the remaining holes back filled to ground level with gravel. V ....... b D; .... I In;+ ~,..-.n In;nnH~n ('trri,'-r I:::vn,-ne|nn Paoe 24/25 Attachment 15C Palm #lA (3S-26) Well Bore Schematic PHILLIP$ Alaska, Inc. PHIL LiPS PETROL El.JlA O3N~,~JqT KRU 3S-26 n3~'0'3~1 D 1 NIPPLE c_.,~i~J c TOR I=RCOUC1~N . TUBING Size 2.~T~ Thread WELD BI"CM Thread E IJE~Cl Comenent Mandre VIv Cn'nt General Nobas Note Oo~criplierp ICO'DS' NIFPLE 2. B'~', NO ~3 BAKER CMU ~.~L. ID fig E,U~EVE W~2519 'D,S; PROFILE? clcw,~l 4~ D¢Ol BAKER ~ A~E~E~E~LY .~JHED I~E RECEPTACLE V~q 2 SEAL ~L 2.81~' BDRE SET ~ FL~ pa~,LANCEO 193 Toc~.1 _~a- ~olop G~ ~ ~t ~'2~" of ~n slao~a~ tubing ~t~ .=LI ~. DR~:DPPED 4¢ta"_rt WHEN FIRED'I I0 2 O.C~O 2A40 ID O.OCe KuDaruk River Unit Area Iniection Order Expansion Page 25/25