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Home My WebLink AboutCO 030 Conservation Order Cover Page XHVZE This page is required for administrative purposes in managing the scanning process. It marks the extent of scanning and identifies certain actions that have been taken. Please insure that it retains it's current location in this file. O~~ Conservation Order Category Identifier Organizing RESCAN [] Color items: [] Grayscale items: [] Poor Quality Originals: [] Other: NOTES: DIGITAL DATA [] Diskettes, No. [] Other, No/Type OVERSIZED (Scannable with large ploff.~r/scanner) [] Other items OVERSIZED (Not suitable for plotter/scanner, may work with 'log' scanner) [] Logs of various kinds [] Other BY: ~MARIA Scanning Preparation TOTAL PAGES Production Scanning Stage 1 PAGE COUNT FROM SCANNED DOCUMENT: ~_~ PAGE COUNT MATCHES NUMBER IN SCANNING PREPARATION: ~. YES NO BY: Stage 2 ~ MARIA DATE: ~ '--~ /S IF NO IN STAGE 1F PAGE(S) DISCREPANCIES WERE FOUND: YES ~ NO (SCANNING IS COMPLETE AT THIS POINT UNLESS SPECIAL ATTENTION IS REQUIRED ON AN INDIVIDUAL PAGE BASIS DUE TO QUALITY, GRAYSCALE OR COLOR IMAGES) General Notes or Comments about this Document: 5/21103 ConservOrdCvrPg.wpd STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF MINES AND MINERALS ALASKA OIL AND GAS CONSERVATION COMMITTEE 3001 Porcupine Drive Anchorage, Alaska RE: THE APPLICATION OF THE UNION ) OIL COMPANY OF CALIFORNIA, operator ) of the Kenai Gas Field, to make per- ) manent the temporary exception to ) Section 2061.2 of the Alaska Oil and ) Gas Conservation Regulations~ Title ) 11, AAC granted by Conservation Order) #16 ) Conservation Order #30 October 21, 1966 IT APPEARING THAT: 1. The Union Oil Compan~ of California, operator of the Kenai Unit, sub- mitted on October 7, 1966, a request that the Alaska Oil and Gas Conserva- tion Committee issue an order in accordance with the procedures described in Title 11, Section 2061.3 making permanent the 320 acre gas field spac- ing in the Kenai unit. 2. Notice of the..hearing was published in the Anchorage Dally News on October 10, 1966. 3. The hearing was held in the Division of Mines and Minerals office build- ing in Anchorage, Alaska on October 21, 1966 at which time testimony in support of the application was presented and opportunity for comment and further testimony was given. AND IT F~tTHER APPEARING that after due consideration an exception to Section 2061.2 of the.Alaska Oil and Gas Conservation Regulations should be permanently allowed..'This order is subsequent to the issuance of Oonser- vation Order #16 Which permitted temporary 320 acre gas well spacing in the Kenai Gas Field. Conservation Order #30 October 21, 1966 Page 2 NOW, THEREFORE, IT IS ORDERED that the permanent well spacing pattern for the Kenai Gas Field is 320 acres per well. DONE at Anchorage and Juneau, Alaska and dated October 21, 1966. Thomas R. Marshall, Jr., Executive Secretary Alaska Oil and Gas Conservation Committee Concurrence: ~~s_~ka Oil and Gas Conservation Committee :Charles F,: Herbert' ~Member ' Alaska Oil and Gas Conservation Committee Karl L. VonderAhe, Member Alaska Oil and Gas Conservation Committee Union Oil Company of California 2805 DENALI S T R E ET ~ ANCHORAGE. ALASKA 99503 November 15, 1966 Mr. Thomas R. Marshall, Ir. Executive Secretary Alaska Oil & Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska Dear Tom: REQUEST FOR 320 ACRE SPACING ORDER KENAI GAS FIELD Pursuant to your request, transmitted herewith are two exhibits supporting the permanent 320 acre spacing pattern for the Kenai Gas Field. Exhibit 1 is a structure contour map showing the configuration of the field, all surface well locations and bottom hole locations of directed wells. Exhibit 2 is a diagrammatic cross section between the Kenai Unit 33-30 and Kenai Unit 33-32 wells depicting the lenticularity of the reservoir sands. This section demonstrates the need of spacing closer than 640 acres in order to efficiently and equitably develop the gas reserves within these lenticular sands and to provide uniform withdrawal of all entrapped gas. Spacing of 320 acres will further minimize the loss of gas in updip sand wedges that cannot be reached by any spacing greater than the present 320 acre s. We respectfully request that you issue a permanent 320 acre spacing order for the Kenai Gas Field. Very truly yours, ( · Edwi~ ~, East District Development Geologist EHE/lm encl. FORM 401 ANC (REV. 3/66) PUBLIC HEARING October 21, 1966 Re: Union Oil Company of California - Kenai Gas Field Petition for Perma- nent 320-Acre Well Spscing. A public hearing was held at the State Division of Mines and Minerals Building, 3001 Porcupine Drive, Anchorage, Alaska, on October 21, 1966, for the purpose of hearing testimony concerning the petition of Union Oil Company of California to make permanent 320-acre well spacing in the Kenai Gas Field. Attached herewith is a copy of notes taken at subject hearing. Speakers indicated throughout are as follows: MR. EAST MR. HARTMANN MR. MARSHALL MR. KUGLER MR. GILBRETH MR. VONDERAHE Edwin H. East Union Oil Company of California R.C. Har tmann Union Oil Company of California ThOmas R. Marshall, Petroleum Supervisor Division of Mines and Minerals H. W. Kugler, Petroleum Geologist Division of Mines and Minerals O. K. Gilbreth, Petroleum Engineer Division of Mines and Minerals K. L. VonderAhe, Petroleum Engineer Division of Mines and Minerals Mr. Morris L. Lowman of Marathon Oil Company was present. Public Hearing Kenai Gas Field Petition for Permanent 320-Acre Well Spacing Page 2 Kenai Gas Field 320-acre spacing hearing held in the Mines and Minerals office in Anchorage on October 21, 1966. MR. MARSHALL: I will call this meeting to order. This will be in regard to the application of Union Oil Company of California, operator of the Kenai gas field, to make permanent the exception to Section 2061.2 of the Alaska Oil and Gas Conser- vation Regulations~ Title 11~ Alaska Administrative Code granted by Conservation Order No. 16. My name is Tom Marshall. Mr. James A. Williams, chairman of the Alaska Oil and Gas Conservation Committee~ is not present nor is Mr. Charles Herbert. Karl VonderAhe~ the other member of the Conservation Committee is here. Mr. Kugler and Mr. Gilbreth, our engineering and geological advisors~ are present. We are now ready to hear testimony on the part of Union Oil Company of California to support their application that the 320-acre spacing in the Kenai field be made permanent. Are you ready with your presentation? MR. EAST: Yes, this is Ed East speaking for Union Oil Company of California, the operator of the Kenai field. It is our position to ask at this time that the , temporary 320-acre spacing order for the Kenai gas field be made permanent. The reasons we are asking for this permanent hearing--excuse me--order are that with our information to date~ the additional drilling done~ we have found that the lenticulartty of the sands are as suspected as shown up and (pause) I'm at sort of a loss here-- MR. MARSHALL: No problem, Ed. MR. EAST: Being supersensitive about speaking on tape--And essentially~ we initiated the request for temporary spacing on our basis of six or seven wells knowing that from day to day and the sands coming and going we have found~ to reit- erate slightly~ that our additional, drilling of six wells has confirmed this; Public Hearing Kenai Gas Field Petition for Permanent 320-Acre Well Spacing Page 3 namely with the 33-32 well where the B-3 sand has diminished from the antici- pated thickness of 75' to 10'. And this was one of the most dramatic instances. The loss of sand was calculated to cut the estimated reserves of the field ap- proximately 15%. Again demonstrating the lenticular nature of the producing sand bodies, we have additional information on the productivity of three of the crestal wells which I'll have Mr. Hartmann describe. MR. HARTMANN: Basically, three wells in our pattern whichi.~are...~th~ee~ad- jacent wells to date since general withdraw from the field which was approximately May of this year. The performance of the three wells have been not at all con- sistent with the others. One of the wells, namely 43-6, has been performing as anticipated. Withdraw in the neighborhood of 10 to 12 million feet a day with a normal drawdown p~esents no problem. A neighboring well, KU 21-7, in the same zone with accepted drawdown will just barely make 7 to 8 million a day. The third well mentioned, 21-6 well, will produce at that volume but along with pro- duction tends to draw in large amounts of sand and formation material, this being the only well in the field that we have noticed this behavior to date. We have no reason to believe completion breakdown. We have dry water shut-offs on either side of the completion along with excellent cement bond logs and we can attribute the samd production strictly to formation character. This seems to be'our most dramatic physical evidence of large differences between adjacent wells that are completed within the same zones. MR. EAST: In summation, then we might say, Tom, that we feel that the 320- acre spacing we have gone to, has helped us to reach these reserves. We still see problems even with 320 spacing as Bob has just mentioned, that we do appar- ently have some permeability barriers that we haven't anticipated. We don't know Public Hearing Kenai Gas Field Petition for Permanent 320-Acre Well Spacing Page 4 exactly whether it's cementation factor in the sands or whether it's the lensing out of the sands, but this one B-3 sand indicates that we do not have a real com- mon reservoir there. There is some obstruction so we feel that the 640-acre spacing would not suffice and the 320 has allowed us to better drain the reservoir and would again to mention we wish to make this a permanent order. MR. MARSHALL: Bob~Hartmann, would you please delve into the production his- tory aspect. I believe you mentioned you had some material in that line. MR. HARTMANN: History-wise, pressure-wise, in the overall picture, our total volume withdraw has not to date and especially prior to our large scale delivery to Swanson River been significant. It is becoming more and more significant. We, as our best guess, have estimated that our volume withdraw based on a 640-acre drainage area around the #14-6 well, which was the first well drilled and the first well to produce and the well that has produced the most from the field. The with- draw based on a 640 acre out of that particular sand is less than 5% to date of the total estimated volume. In order to establish any reliable basis for reserve estimates from cumulative production, it is generally accepted that a figure ap- proaching 10% is a good starting place. You begin to see your pressure decline and your withdraw patterns. Even in our hardest pulled well, we have not yet approached this according to our estimation. We have noticed within this well generally a start of a decline although it's been a sporadic withdraw until just recently based primarily on summer versus winter demands in Anchorage-- MR. GILBRETH: Which well is this, Bob Hartmann? MR. HARTMANN: This would be the first well, the discovery well in the field ~whieh~has been produced the longest and consequently has produced the most. We certainly are interested in obtaining reserve estimate>based on performance f~om our own economic reasons--How much more can we produce out of this field and how much Public Hearing Kenai Gas Field Petition for Permanent 320-Acre Well Spacing Page 5 can we sell? To date, we feel we've just not had sufficient history to provide us with this particular answer. (Pause) I don't know if this is what you're after, Tom. Could you possibly specify a little more? MR. MARSHALL: I was interested in just a general statement of the production history; and you have satisfied that as far as I'm concerned, Bob. Do you have any-- either you or Ed have any further statements at this time? If not, we will ask if there's any questions of your testimony by our group here. MR. EAST: I don't have any other statement, Tom. MR. HARTMANN: I don't. MR. GILBRETH: I'd.like to ask if do you have any interference tests or any- thing of that nature that might show area of drainage or interference between wells. MR. HARTMANN: We have not to date conducted any interference tests specifical- ly. We have inferred interference of some sort based on again these three wells~ , £ndicating that their performance is not at all consistent one with the other and we have based the concept and/or idea of interference on this. However, specifi- cally going out and running interference tests, no, we have not. MR. MARSHALL: For the sake of the transcriber~ Mr. Gilbreth asked the question and Don Hartmann-- MR. HARTMANN: Bob Hartmann. MR. MARSHALL: Bob Hartmann-- MR. HARTMANN: Texaco's not yet bought Union-- (laughter) MR. MARSHALL: Let us in the future identify ourselves before we speak to make it easier for the girl doing the transcribing. (Pause) Are there any other ques- tions? MR. VONDERAHE: I have none~ Tom. VonderAhe. MR. GILBRETH: I'd like to ask another. Gilbreth. Do you see anything at this time that leads you to believe that this field could be satisfactorily drained on Public Hearing Kenai Gas Field Petition for Permanent 320-Acre Well Spacing Page 6 640-acre spacing? MR. HARTMANN: I--that's a hard question to answer. I think a spacing closer than 640 would allow us to drain it more effectively. It's just based on perfor- mance at this time. On 640-acre spacing, we could conceivably miss -- gas on per- meability lensing -- conceivably we could miss a significant amount of the reserves. 320 would probably give us a better shot at a lot of these reserves. I feel that 320 acres would be a more effective drainage pattern than 640. MR. GILBRETH: This is Gilbreth, again. Do you feel that in the light of our statute which requires us to determine whether an unnecessary number of wells are drilled, drilling up this field on 320 acres would result in an unnecessary number of wells? MR. HARTMANN: I feel that it would not. Hartmann answering. For several reasons. No. 1: our management is very adverse to drilling wells when they don't have to and certainly we are not in the position to recommend just drilling wells for the sake ofi'drilling wells and we would not propose drilling wells if we felt that we could economically drain the field without drilling the wells. This gets into some pretty refined economics at this point, and I figure not too satisfactory for tape recorder to (laughter) justify. MR. EAST: This is East speaking. Basically~ we are drilling now; we have about a dozen wells and we have 'seen no damage! ~f you want to use the word, or effect of one well has to the other. We have seen no loss of -- we're not losing any gas from one well based'on this 320-acre spacing; and the minute we see any- thing like that~ certainly we wouldn't go ahead, and program additional wells~ if we found that we were sufficiently draining part of the field with a well already drilled. With the dozen wells we have drilled and they've all been producing, we P~btic~Hearing. i Kenai Gas Field Petition for Permanent 320-Acre Wetl~Spacing Page 7 have .... MR. HARTMANN: Yes. MR. EAST: Seen no interference between wells other than this lack of communi- cation you see there (indicating)~ which is just the opposite; so with the 320 we hay% it hasn't hurt us in the least. MR. GILBRETH: This is Gilbreth again. Had you gone to 320 do you feel that it was satisfactory planning? Is this a magic number~ or 160 a better number~ or 80? MR. EAST: 160 or 80~ what-have-you. I feel can onl~ be determined by experi- ence. Maybe at a later date in specific sands as we increase the density of wells in the field~ of course~ we'll know more about it geologically. Conceivably~ there could be exceptional cases where we wouldn't have to go to closer spacing. However~ I don't think that it's meaningful to say anything more on that now. MR. GILBRETH: Does your company plan to obtain or make field tests to see if there is ~interference, or if there is communication even on this 320 spacing? MR. HARTMANN: This is Hartmann. There has been conversation of this in the past. It has been discussed and considered; however~ there has been no action taken as of yet. It's a tentative thing at this point. More specifically~ we are interested in why the 21-7 well is not p~rforming as expected. This is of concern to us and why the 21-6 well is making the amount of formation material that it is, and we have discussed running interference tests primarily in the 21-7 well. MR. MARSHALL: This is Marshall speaking. Ed,~iI'd like to ask you, have you found any new evidence of faulting in your structural picture in drilling these additional wells? MR. EAST: No~ we haven't. This is Ed East speaking. Tom~ as far as'~I cam Public Hearing Kenai Gas Field Petition for Permanent 320-Acre Well Spacing Page 8 tell~ we've not found it necessary to fault any of these wells at all. (Pause) It used to be quite a simple structure--one of the most simple that we've run across in the Cook Inlet -- MR. HARTMANN: Structurally~ except one of the most stratigraphic. MR. EAST: We have to have one thing going for us. (Laughter) MR. KUGLER: This is Kugler speaking. Ed, what--do you have any idea what the confining contour is now (pause) structurally? MR. EAST: The gas-water contact. Ira's not on here~ is it? (Indicating) It's about here (indicating)~ Harry. MR. KUGLER: About minus 4160. MR. EAST~ Yeah~ coming about~ well~ minus 40--let's see--would be for -- MRo HARTMANN: This varies with each particular zone -- MR. EAST: Uh uh -- MR. KUGLER: It does. MR. EAST: Maximum is B-2, or is it? MR. HARTMANN: I'm not sure~ Ed. I know this B-1 is good here (indicating) and. the B-2 and B-3 are either wet or very close to being wet here (indicating). I thought B-1 extended especially on this side (indicating) -- P~. KUGLER: B-1 is your lowest? MR. HARTMANN: Pardon? MR. KUGLER: B-1 is your lowest sand? MR. HARTMANN: Sand~ no~ the C-1 -- MR. KUGLER: C-i? MR. EAST: C-1. MR. HARTMANN: C-1 or C-27 MR. EAST: Well, about (indicating)~ this is about it~ Harry. Public Hearing Kenai Gas Field Petition for Permanent 320-Acre Well SpaCing Page 9 MR. KUGLER: And if the Committee were to see fit to make 320-acre spacing permanent, could you give us some idea of your future development plans? MR. EAST: Yes -- MR. HARTMANN: They are somewhat indicated right on this particular map (indi- cating). MR. EAST: This was one of the proposals for 67. Here are the, Harry, the logs -- one, two~ three, four, five, six, seven, eight, nine -- MR. HARTMANN: I think these are the immediate proposed wells and these were other possible locations as the need arose. MR. KUGLER: I see. MR° EAST: These are the modules, well basically there are six on here. Five, six -- oh, seven, there's the seventh well. This hasn't been firmed up though, Harry. I don't think we'll drill that many. MR. MARSHALL: This is Marshall speaking. I believe that we're .probably through the main body of testimony here, and I would suggest unless anyone has any speci- fic questions, that we terminate the hearing. Does this meet with your agreement? I see you raising your finger. MR. GILBRETH: I had a question or two~ but they can go off the record. MR. MARSHALL: All right, then~ we will adjourn this hearing at quarter to eleven. DEPARTMENT,, OF. NATU~L. ' ," RESOURCES reVISION OF MINES AND M/NERALS Alaska 0il an4 Gas Conservation Committee . . ,RE:' Unto~ Oil:"C~pan~ o~ Call- ,/ ',, ,f0r~ia--Kenai' Gas, Field 'Petition,, for :Per~ahent/320 ',, ', Acre Well,Spacing , Notice , is hereby given. ,that ~he UniOn Oil C'ompany~0~ California has p~ti,tigned ,the Alaska 'Oil and Conservation. Committee to !s- su~ 'an~ order in acc0rdahce With the ~pro.eedures, described iff' the AAC Title '11~ Seett0n 2061.3,f0r the pose of 'having snd z~equest. Place o£., filing, isl 3001.Porcupine .Drl~e', Anchorige, Alaska. I£ such ,Protest' is .,: timely filed, .hearing 'on the .matter"will b'e. h~ld. at,the a.bove address.at !O:00 'a.m.,: October 21 1966~ at which proteslants, and tothers may be heard. If .no l~ro- test !s. timely fl!ed,.the Committee {rill c0~sider ~he issuance of the order 'wi,thout ,a hearing., , ,. ThOmas R, ,Marshall, Jr. ',.." , Ex'eeutive Secretary' ,' 1' , · Alaska, oii and Gas Conservation ' 'committee '" ' ~ , .~ 3001 ' P0rcuPine ' Drive . ::,,,: A:nchorage,,,A!aska: . , , ,A'nchOra~e Daiiy'"Ne~s'"' ' '"'" ,Pub;:"" 'O'c',tobler' :I0;.' 1985 , No'. t2~i,, ' '~:' ., AFFID, V'IT OF PUBLIC .TION STATE OF ALASKA, ) THIRD JUDICIAL DISTRICT, ) ss. .... P- a-~--r-i~ -±-a- .- ~e~ ye.r. ........ being first duly sworn on oath · She deposes and says that ................ is the ....... ~X.~.g.~..8.~... St[ fl~k Anchorage News, a daily news- paper. That said newspaper has been approved as a legal news. paper by the Third Judicial Court, Anchorage, Alaska, and it is now and has been published in the English language continually as a daily newspaper in Anchorage, Maska, and it is now and during Il of said time was printed in an office maintained at the aforesaid piece of publication of said news- paper. That the annexed is a true copy of a .... as it was published in regular issues (end not in supplemental form) of said newspaper for period of .......... ~ ...... insertions, commencing on the of ..... Q.c.t ............ ,19d6.., and ending on the ...... ICi ........ day of of ......Oc.t ............... , 19~6...' both dates inclusive, and that such newspaper was regularly .d~stributed to its subscribers dur- ing all of sa,id period. That the fuji amount of the fee charged '~0r ~he foregoing publication is ~hesum of $ . 4.00 which a?noglnt ha,s been paid in full at 'i'!}? rate o~ $1.50 per square. ~vt~t~inm3m charge $7.50. One in- #426 ~o~c~ o~ ~,usuc D~AB~NT OF NA~RAL ~o~ Al~a ~ .a~ G~s C~atton~ U~oa O~ ~~ of California{ has ~~ ~ A~ Oil and{ Gas Cous~at~n-Commt~ to s~ an order ~ a~r~nce with the{ TIt~ 11, $~o~ ~1.{ for ~s pur- ~mm ~' ha~g the t~rj~ 3~j tO~ ~ .Coame~ ~t&~ ~, ~ate~ Par~es w~ may the. re'quested, order allo~ed ~ days f~m the date ~ ~ p~bll~a~o~ a p~teSt .dud ~est ~or heari~. Plac~ o~, f~ Is 3~1 Po~upine ~'~, tim~ filed, ~ hearing on tbs m~tt~ ~1 be held at the above ad~r~ ~-'I0:~ ~.m., ~ober 21, 1966, 'at ~hieh prote~anis others m~ bg ~.h~ar& If '~ p~.~ ta~ ts ~mel~ ~'.the c~mit~e w~l consider the t~uance of ~e order ~,th~ut a ~r~. , Thomas R. M~shall, Ir. ~x~ufl~ Secretary '' Alaska ~ and Gas Conservation ~1 ~upin~ Driv~ ~ ,Anchorage, ~Anchor~ BIlly New~ }Pub.: ~ber 10, ', No., 4~ , Union Oil Company of California 2805 DE NALI STREET ~ ' ANCHORAGE, ALASKA 99503 October 7, 1966 Mr. Thomas R. Marshall, Jr. Executive Secretary Alaska Oil & Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska Dear Mr. Marshall: Union Oil Company of California, as Operator for Marathon Oil Company, Atlantic Richfield Company, Standard Oil Company of California, Western Operations, Inc., and itself in the Kenai Unit, requests that the Alaska Oil and Gas Conservation Committee issue an order in accordance with the procedures described in AAC Title 11, Section 2061.3, establishing a permanent field spacing in the Kenai Gas Field at 320 acres per gas well. The requested order would exempt the field from the spacing requirements of AAC Title 11, Section Z061.2. This order, if granted, would replace the temporary 320 spacing order awarded the Kenai Gas Field April 21, 1965. The above-mentioned owner s of committed working interests within the Participating Area have given their approval to submit this petition. Very truly yours, Union Oil, Co. ~ California ~. :?'L ~'~em~a n EDBL/lm cc: W. I. Linton FORM 401 ANC {REV. 3/66)