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CO 098 B
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. (~ ~ Conservation Order Category Identifier Organizing RESCAN [] Color items: [] Grayscale items: [] Poor Quality Originals: [] Other: NOTES: DIGITAL DATA [] Diskettes, No. [] Other, No/Type OVERSIZED (Scannable with large plotter/scanner) ~ Maps: [] Other items OVERSIZED (Not suitable for plotter/scanner, may work with 'log' scanner) Logs of various kinds [] Other BY: ROBIN Scanning Preparation TOTAL PAGES _ ~_~ BY: ROBIN MARIA Production Scanning Stage I PAGE COUNT FROM SCANNED DOCUMENT: PAGE COUNT MATCHES NUMBER IN SCANNING PREPARATI(~N: _~YES ~ NO Stage 2 IF NO IN STAGE 1, PAGE(S) DISCREPANCIES WERE FOUND: ~ YES ~ NO (SCANNING IS C~T 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: 5/21/03 ConservOrdCvrPg.wpd STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99504 Re: THE MOTION OF THE OIL AND GAS ) CONSERVATION COMMITTEE to hear ) testimony to determine pool rules ) for the Prudhoe Bay Sadlerochit ) Oil Pool. ) Conservation Order No. 98-B Prudhoe Bay Field Prudhoe Oil Pool March 12, 19 71 IT APPEARING THAT: 1. The Alaska Oil and Gas Conservation Committee moved to hear testimony to determine pool rules for the Prudhoe Bay Sadlerochit Oil Pool, now regulated by Conservation Order #83-B which expires March 12, 1971. 2. Notice of public hearing was published in the Anchorage Daily News on December 24, 1970. 3. A public hearing was held in the Sydney Laurence Auditorium, Anchorage, Alaska, on February 9, 1971. Testimony was presented in response to the motion. Affected and interested parties were heard. 4. The hearing was continued until the close of business on February 16, 1971. Additional statements were received, 5. The complete record of Conservation File No. 83-B was made part of the record. AND IT ~3RTHER APPEARING THAT: 1. The Sadlerochit Formation contains very porous, fine- to medium-grained, well-sorted quartz sandstones which are not separated from each other by impermeable rocks of sufficient thickness to constitute a permeability barrier. 2. Oil is found over a wide area in the Sadlerochit Formation, and an oil reservoir with an associated gas cap exists. 3. The extent of the hydrocarbon-bearing sands of the Sadlerochit Formation has been determined in limited areas. AGO 10031498 CONSERVATION ORDER ~ . 98-B Page 2 March 12, 1971 4. The "Oxytoma Formation" has been renamed the Sag River Sandstone and it is hydrocarbon-bearing over substantially the same area as the Sadlerochit Oil Pool. 5. The Shublik Formation is hydrocarbon-bearing over substantially the same area as the Sadlerochit Oil Pool. 6. The fluids in the Sag River Sandstone, the Shublik Formation and the Sadlerochit Formation could be in communication, but the Sadlerochit Formation contains the largest quantity of hydrocarbons. 7. It may be uneconomical to develop and deplete the oil and gas reserves in the Sag River Sandstone and the Shublik Formation unless downhole commingling with the Sadlerochit Oil Pool is permitted. 8. The vertical limits of the Sadlerochit Oil Pool should be redefined to include the Sag River Sandstone and the Shublik Formation, and a different name assigned to the pool. 9. The permeability and pressure communication in the Sadlerochit Formation is such that a well should drain 640 acres. 10. A distance of 1,000 feet between wells might result in a poor drainage pattern where not more than one well is permitted on a governmental section, and a well 500 feet from a property line where ownership changes might impair correlative rights. 11. Completion of a well in the smallest governmental section in the defined pool area will not adversely affect correlative rights. 12. Conventional casing and cementing procedures are unsafe if thawing occurs because thawing of the permafrost during production might cause sufficient subsidence and frictional drag to result in collapse of the casing within the upper 500 feet, and it is necessary to either prevent thawing of the adjoining permafrost or to permit movement of the surface casing. 13. Either prevention of thawing or permitting movement of the upper portion of the surface casing is safe and technologically sound; however, other methods may likewise be safe and sound, and continued surveillance by the Committee of all techniq~ues will be necessary to ensure maximum safety in future operations. 14. To obtain the high production rates anticipated it may be necessary to produce through the tubing-casing annulus, in which case any uncemented portion of the production casing below the shoe of the next shallower casing string may not give adequate protection against underground waste in the event of casing failure. 15. Installation of downhole automatic shut-in valves below the base of the permafrost, and adequate blowout prevention equipment and practices might prevent an uncontrolled flow of oil or gas. AGO 100~1499 CONSERVATION ORDER ~ . 98-B Page 3 March 12, 1971 16. To properly regulate and operate the reservoir, performance must be carefully monitored, and bottomhole pressure and gas-oil ratio test data must be obtained soon after production commences. 17. Gas is dissolved in the oil and will be produced with the oil, and the flaring or venting of gas may constitute waste. 18. Unitization of the pools within the ?rudhoe Bay Field would conserve natural resources, prevent waste, and secure other benefits including that of eliminating unnecessary operations, thereby minimizin~ adverse effects upon the ecology. NOW, THEREFORE, IT IS ORDERED THAT the rules hereinafter set forth apply to the following described area: Sections 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 23, and 24. .T.~ 10N.,~ g~.13 E.,_ U. M.. Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, and 24. T.~I0 N~_ ~. %4~.~p. M. Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17,18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 33, 34, 35, and 36. T_. 10 N., R.~_15 E., U._M. Ail T._ iON., ~. 16 E., U. M. Sections 5, 6, 7, 8, 17, 18, 19, 20, 29, 30, 31, and 32. Sections 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 23 and 24. Ail Ail All Sections 29, 30, 31, and 32. Ail Ail T..~ !2__N.~,~R. 13,,,,E,,.,.,,, u. M. All T. 12 N~_,_.R. 14 E.,.~..M. Sections 3, 4, 5, 6, 7, 8, 9, 10, 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. AGO 10031500 CONSERVATION ORDER ~" · 98-B Page 4 March 12, 1971 T. 12 N., R. 15 E., U. M. Sections 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. Sections 13, 14, 15, 16, 21, 22, 23, 24, 25, 26, 27, 28, 33, 34, 35, and 36. T. 13 Nt, R. 11 E., U. M. Sections 17, 18, 19, 20, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, and 36. T. 1.3 ~.~ R. 12 E., U. M. Sections 25, 26, 27, 28, 2~, 30, 31, 32, 33, 34, 35, and 36. T.. 13 N.z R. 13 E.~ Il._ M. Sections 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, and 36. Rule 1. Pool Definition. The Prudhoe Oil Pool is defined as the accumulations of oil that are common to and which correlate with the accumulations found in the Atlantic Richfield - Humble Prudhoe Bay State No. 1 well between the depths of 8,110 and. 8,680 feet. .Rule 2; ....... Well~.Spacing. Not more than one well may be completed in this pool in a governmental section or governmental lot corresponding thereto, nor shall any well be completed in this pool in a governmental section or governmental lot corresponding thereto which contains less than 575 acres, nor shall any pay opened to the well bore be closer than 1,500 feet to a property line where ownership changes or be closer than 3,000 feet to any pay in the same pool opened to the well bore of another well. Rule 3. Casing and Cement~ing ~Requir~_ments_. (a) Casing and cementing programs shall provide adequate protection of all fresh waters and productive formations and protection from any pressure that may be encountered. (b) Wells shall be protected from damage caused by permafrost thawing by the use of refrigeration and/or insulation or by the use of slip Joint casing. (c) For proper anchorage and. to prevent an uncontrolled flow, a string of casing shall be set at least 500 feet below the base of the permafrost section, but not below 2,700 feet unless a greater depth is approved by the AGO 10031501 CONSERVATION ORDER 0 98-B Page 5 March 12, 19 71 Committee upon a showing that no potentially productive pay exists above the proposed casing setting depth, and sufficient cement shall be used to fill the annulus behind the pipe to the base of the permafrost section. (d) Installation of a permafrost string of slip Joint casing above the casing string required by (c) without cementing through the expected zone of subsidence may be permitted. (e) Production casing shall be landed through the completion zone and cement shall cover and extend to at least 500 feet above each hydrocarbon- bearing formation which is potentially productive. In the alternative, the casing string may be set and adequately cemented at an intermediate point and a liner landed through the completion zone. If such a liner is run, the casing and liner shall overlap by at least 100 feet and the annular space behind the liner shall be filled with cement to at least 100 feet above the casing shoe, or the top of the liner shall be squeezed with sufficient cement to provide at least 100 feet of cement between the liner and casing annulus. Cement must cover all potentially productive intervals behind the liner. (f) No well shall be produced through the annulus between the tubing and the casing unless a cement sheath extends from the top of the pay to the shoe of the next shallower casing string. (g) Casing or liner, after being cemented, shall be satisfactorily tested to not less than 50 per cent of minimum internal yield pressure or 1,500 pounds per square inch, whichever is less. Rule 4. Blowout Prevention Equ~ipmen_t _and Practice. (a) Before drilling below the casing string required by Rule 3(c), all drilling wells shall have three remotely controlled blowout preventers, including one equipped with pipe rams, one with blind rams and one bag type. The blowout preventers and associated equipment shall have 5,000 psi working pressure rating and 10,000 psi test pressure rating and shall be installed prior to penetrating the Sag River Sandstone. Ail such equip- ment shall include a drilling spool with minimum three-inch side outlets (if not on the blowout preventer body), a minimum three-inch choke manifold, or equivalent, and a fill-up line. Ail equipment shall have a minimum working pressure capable of withstanding formation pressures reasonably expected in this area at the depth being drilled, with adequate safety factors. The drilling string shall contain full-opening valves above and immediately below the kelly during all circulating operations with the kelly. Two emergency valves will be conveniently located on the drilling floor with rotary subs for all connections in use, one valve to be an "inside blowout preventer" of the spring-loaded valve type and the second to be of the manually-operated ball valve type, or any other type which will perform the same function. (b) Ail blowout preventer rams, kelly valves, emergency valves and choke manifolds shall be tested to the manufacturers' recommended working pressure when installed or changed and at least once each week thereafter. An AGO 10031502 CONSERVATION ORDER~~' . 98-B Page 6 March 12, 1971 operator may request approval of blowout prevention equipment rated at a higher working pressure than that required by (a). In this event the operator will not be required to test the blowout prevention equipment to a pressure in excess of that which would be required for the equipment under (a) provided the approved drilling permit includes a statement of the operator's intent to test at the lower pressure. Bag-type preventers shall be tested to the recommended working pressure when installed and to 50% recommended working pressure once each week thereafter. Test results shall be recorded on written daily records kept at the well. (c) Ail blowout prevention equipment shall be adequately protected to ensure reliable operation under the existing weather conditions. Ail blowout prevention equipment shall be checked for satisfactory operation during each trip. The use of blowout prevention equipment shall be in accordance with good established practice and all equipment shall be in good operating condition at all times. Rule 5. Automatic Shut-In Equipmen_t. Upon completion, each well shall be equipped with a suitable safety valve installed below the base of the permafrost which will automatically shut in the well if an uncontrolled flow occurs. Rule~ 6,. Bottj0.mhole Pressure Survey.. Prior to initial sustained production from each well, a maximum buildup bottomhole pressure test shall be taken. A key well bottomhole pressure survey shall be taken between 90 and 120 days after commencement of sub- stantial production and each 90 days thereafter. Bottomhole pressures obtained by a static buildup pressure survey, a 24-hour shut-in instantaneous test or a multiple flow rate test will be acceptable. The datum of the test and other details will be determined by the operators subject to approval by the Committee. The test results shall be reported on reservoir pressure report form P-12 which shall be filed with the Committee by the fifteenth day of the month following the month in which each test was taken. Rule 7. Gas-Oil Ratio Tests. Between 90 and 120 days after substantial production starts and each six months thereafter a gas-oil ratio test shall be taken on each producing well. The test shall be of at least 12 hours duration and shall be made at the producing rate at which the operator ordinarily produces the well. The test results shall be reported on gas-oil ratio test form P-9 within fifteen days after completion of the survey. The Committee shall be notified at least five days prior to each test. Rule 8. Gas Venting~ prFlari~ng. The venting or flaring of gas is prohibited except as may be authorized by the Committee in cases of emergency or operational necessity. AGO 10031503 CONSERVATION ORDER NO. 98-B Page 7 March 12, 1971 DONE at Anchorage, Alaska, and dated March 12, 1971. Thomas R. Marshall, Jr., Executive Secretary Alaska Oil and Gas Conservation Committee Concurrence: Homer L. Burre%l, Chairman ~- Alaska Oil and Gas Conservation Committee O. K. Gilbreth, Jr., Member Alaska Oil and Gas Conservation Committee AGO 10031504 II, EI'ARTMENT Oi~ NATURAl. i[ES()UItCES O/V/SION OF 01~ A~ ~AS 300I POrCUPInE O~IVE-~CHO~ACE 9950~ CoilservaLion ALASKA OIL AilD GAS CONSEDW^TTn;'',,,,-,..v,, COH?';iT'FEE March 29, 1977 A D M I N I S 1' R A T I V E A P P R 0 V A L ii O. g8-B.8 ,Re: Request to flare 9as for purposes of commissioning Gathering Centers 1 and 2 and related fl are systems, Prudhoe Bay Fi eld. Also request for permission to inject de-gassed crude oil into the Sadlerochit Reservoir during the early commissioning phase of Gathering Center No. 1. F. O. Venn Prudhoe Bay Fields Manager BP Alaska Inc. P. O. Box 4-1379 Anchorage, Alaska 99503 Dear Mr. Venn' An application to flare gas for the purpose of commissioning the referenced facilities was received on February 14, 1977. ~'~o volumes were specified due to absence of initial operating experience. The same appli'cation included a request to inject de-gassed crude oil into the Prudhoe Oil Pool during the early commissioning phase of Gathering Center Ho..1. !'he abow} requests are approved as an operational necessity pursuant to Rule 8 of Conservation Order I~o. 98-B. , This approval will apply until stable production is achieved., The operator is required to furnish the committee with a monthly report of 'the volumes flared and the volumes injected during the approval period. The comnlittee will review these reports monthly and may impose volume restrictions at anytime, Sincerely, /~ Thos. R. r.;arshall, Jr.' Executive Secretary AGO 10031505 Conservation ALASKA OIL AND GAS CONSERVATION COMMITTEE January 25, 1977 Re: Commi s'sioning and testi:ng of Prudhoe Bay Field Fuel Gas 'Unt t, Prudhoe Bay Field Central Compression Plant., Flow Station No. l, Flow Station No. 2 and related' flare systems, Prudhoe Bay Field Mr. Robert A. Crosky North Alaska Operations Manager A t 1 ant i c R i ch fi e 1 d Comp any P. O. Box 360 Anchorage, Alaska 9gSlO Dear Mr.. Crosky: An application t:o flare gas for the purpose of purging, con~nissioning, and testing of the referenced' facilities was received on January 18, 1977. No volumes were specified due to lack of initial o.perating experience. The above request is approved, as an. operational .necessity pursuant to Ru.l.e 8 of Conservation Order No. 98-B. 'This approval supercedes AA gS-B.4 and the same is hereby terminated. Initially any hydrocarbon fl.Utds that will be injected', into the Prudhoe Oil Pool as a result of the captioned ope'rations will be done utilizing NGI well No. 8. Other injection wells may be utilized as volumes increase. This approval will apply until '7:00 AM September 15, 1977, .by which ti:me it is anticipated that stable production will be achieved. The operator is required to furnish the committee with a monthly report of the volumes flared during the approval period. The comnittee will review these 'reports monthly and may impose volume restrictions at any tim. T.hos. R. Marshall, Jr. 'Ex.ecuttwe Secretary AGO 10031510 Conservation ALASKA OIL AND CAS CONSERVATION COMMI~EE November 15, 1976 Re.: Flaring of gas for purposes of safety and operational necessity at the Crude Oil Topping Plant in the Prudhoe .Bay Oil Field Mr'. Robert A. Crosky North A1 as ka Operations Manager Atlantic Richfield Company P. O. Box 360 Anchorage, Alaska ggSlO Dear t4r. Crosky: An. application to .maintain a .400 MCF/D safety flare and to. intermittently flare, gas as an. operational, n.ecess.i ty, such as for main. tenance o.r repair of equ. tpment, was recelved on 'SePtember 28, 1976, ne above request is approved as .an operational necessity pursuant to Rule 8 of Conservatt'on Order No. 98-B s.ubject to the following res tri cti OhS: (]) The c.ommenc~ent and nature of all ermergency situations requiring flaring of gas shall be reported to the Com~itte.e within 24 hours. (2) The com~mncement and nature of all o~rational neces.si ty situations requiring the flaring of gas that exceed 3 days tn duration shall be reported to the committee with:in 4 days. (3) Commencing with the calendar quarter beginning January 1, 1977, the operator shall report in writing to the C.ommittee the number of days and volume of gas flared or vented in excess of the volume required for safetY flare and. the reason for the flaring or. venting. The report shall be. submitted within 30 days followirng each calendar qu. arter. AGO 10031530 R. A. Crosky -2- November 15, 1976 (4) Any flaring or venting of gas in excess of 15 days per calendar quarter other than that required for safety flare shall require Committee approval. Any flaring of gas over the amount required for a safety flare in excess of 7 1/2 days during the period from November 15, 1976 until January l, 1977 will require a written administrative approval from the Con~nttt~. Sinc~rely, Thomas R. Marshal 1, ~lr. Executive Secretary TRPI:b~ AGO 10032531 JAY S. HAMMONO, GOVERNOR ALASKA OIL AND GAS CONSERVATION COMMITTEE October 14, 1976 ADMINISTRATIVE APPROVAL N O. 98-B.5 Re' 'Commissioning and testing'of compressors and gas treating facilities related to the Crude Oil Topping Plant and the Fuel Gas Pipeline System Mr. Robert A. Crosky North Alaska Operations Manager Atlantic Richfield Company P. O. Box 360 Anchorage, Alaska 99510 Dear Mr. Crosky' An application to intermittently flare gas for the purpose of purging, commissioning, and testing of the referenced facilities was received on September 28, 1976. No volumes were specified due to lack of initial operating experience. The above request is approved as an operational necessity pursuant to Rule 8 of Conservation Order No. 98-B. This approval will expire at 7'00 AM, November 15_,.._]~Z~6..~. The operator is required to furnish the committee w~th a monthly report of the volumes flared during the approval peri od. The committee will review these reports and may illlpOSe volume restrictions at any time. · Sincerely, Thos. R. Marshall, Jr. Executive SeCretary AGO 10031533 ALASKA OIL AND GAS CONSERVATION COMMITTEE October. 11, 1976 A D M I N ! S T R A T I V E A P P R O V A L~ N O. 98-B.4 Re: Commissioning and testing of PrUdhoe Bay Field Fuel Gas Unl.t, Prudhoe Bay Field Mr. Robert .A. Crosky North Alaska Operations Man~ger Atlantic Richfield Companyv' P. O. Box 360 Anchorage, Alaska 99510 Dear Mr..Crosky: An application to flare gas for the purpose of purging, commissioning,. and testing of the Prudhoe Bay Field Fuel Gas Unit was received on September 29', 1976. No volumes were specified due to lack of initial operating experience. The above request is approved as an operational necessity pursuant to Rule 8 of Conservation Order No. 98-B. I This approval will apply until 7:00. AM, Ma~r~h_b__?-..l_~L~.~., after which the committee wi11 consider extending this approval, if necessary, specifying volumes. The operator Is required to furnish the · committee with a monthly report of the volumes flared during the approval period. The committee wlll review these reports monthly and may impose volume restrictions at any time. S I nce re i y, Thos. R. Marshall, Jr. Executive Secretary Trd.~:bJm AGO 1003153z+ ALASKA OIL AND GAS CONSERVATION COHMITTEE October I, 1976 A O M I N I $ T R A T I V E A P P R O V A L N O. 98-B.3 Re: Safety Pilot for Prudhoe Bay Field Fue! ~as Unlt, Prudhoe 0it Pool, Prudhoe Ba.yOtl Fie'Id Fir. Robert A. Crosk¥ North Alaska Operations Manager Atlantic Rlch¢leld Company P. O. Box 360 Anchorage, Ataska ~.:510 :0ear Rr. Crosk¥: An appl leal ion to use gas up to an average .of .6.O0 ~lqCF/O on a monthly basis t.o maintain a .safety flar.e or' flares at the Prudhoe Bay F~etd Fuel Gas Unit ~a.s received on September The purpose of thi:s use :Is .to prevent .a safety hazzard in .the. event, of a plant upset tha. t could create exptoslon and f'fre .r'l.sk caused by t'he accumu l.a t t on of combu s t i b '1 e :hyd roca r~bons. The above, request 'i s approved, as .an. operattonat necess i ty pursuant to . Rule 8 of Conservation Orde'r ~lo. 98-B. S incerel y, Thos. R. l~ars.hatl, Jr. Exe. cut i ve 'Secret.ary AGO 10031538 tit i / / WlLLIAt~ A. EGA~I, GOVERNOR DIVISION OF OIL AND GA5 t/3001 PORCUPINE DRIVE --- ANCHORAGE 99504 ALASKA OIL AND GAS CONSERVATION COMMITTEE ~ · January 25, 1974 A D M I N I S T'R A T I V E A P P R O V A L N O. 98-B.2 Re: Production test of BP Well #C-3, Prudhoe Oil Pool, Prudhoe Bay Field. Mr. G. D. Taylor Acting Manager Operations BP Alaska inc. P. O. Box 4-3179 Anchorage, Alaska 99503 Dear Mr. Taylor: An application to conduct a test utilizing the C-3 well was received on January 17, 1974 followed by a schedule of the amounts of casinghead gas to be flared throughout the test period. The approximate amount of gas to be flared during the test is 27 MMSCF/D. The purpose of this test is to commission the Fuel Gas Treatment Plant. '[he applicant also requests permission to flare I to 2 MMSCF/D for ap- proximately seven days on an intermittent basis in order to commission power station generators. The above request is approved as an operational necessity pursuant'to Rule 8 of Conservation Order 98-B. Sincerely, 'Thomas R. Marshall, Jr. Executive Secretary AGO 10031560 DEPART~IENT OFN~ ATUR~kL' ~ DIVISION OF OIL AI~D GAS Ol ?ORCU?IN£ DRIVE --~ ANCHORAG£ 99504 ALASKA OIL AND GAS CONSERVATION COMMll-~EE August I~, 1973 A D M I N i S T R A T I V E A P P R 0 V A L N O. 98-B.I Re: Production test of D.S. #1-1 well, Prudhoe Oil Pool, prudhoe Bay Field. Mr. Robert E. Wycoff Regional Manager Atlantic Richfield Company P. O. Box 360 Anchorage, Alaska 99501 Dear Mr. Wycoff: An application to conduct a production test utilizing the D.S. #1-1 ~Jell', the flowline system and additional facilities to be instal led especially for the test was received on June 13, 1973 followed by a schedule of the amounts of casinghead gas.to be flared throughout the test period. The maximum amount of.gas to be flared during the test is 64,800 met. The purpose of this~test is to verify and improve the separator design technique and to gain operating experience with large diameter two phase flow in pipelines. The test utilizes the topping plant since it is the only facility available for handling produced fluids. The above request is approved as an operational necessity pursuant to Rule 8 of Conservation Order 98-B. Thomas R. MarShall, Jr. Executl ve Secretary RESOLUTIONS ADOPTED ANNUAL MEETING INTERSTATE OIL COMPACT COMMISSION December 7, 1982 New Orleans, Louisiana I, W. Timothy Dowd, Executive Director of the Inter- state Oil Compact Commission, do hereby certify that the following are true and correct copies of resolutions adopted by the Commission at its annual meeting in New Orleans, Louisiana, on the 7th day of December, 1982. - EXeCu~iy~ D-irehto~ RESOLUTION CONCERNING OUTER CONTINENTAL SHELF REVENUE SHARING WHEREAS, the Interstate Oil Compact Commission, composed of thirty oil and natural gas producing states and six asso- ciate member states, has historically 'recommended policies which would serve to assure conservation of oil and gas re- sources through maximum development and use thereof; and WHEREAS, the range of resources on the Outer Continental Shelf and the various development activities, including oil and gas leasing, exploration and production, are of concern to the nation as a whole; and WHEREAS, it is a national priority to reduce dependency on imported oil and gas through accelerated development of domes- tic OCS petroleum reserves; and WHEREAS, it is in the national interest to continue sup- port for state management of ocean and coastal resources; and WHEREAS, these ocean and coastal management programs pro- vide a statutory framework which ensures full and effective state participation in the federal OCS oil and gas leasing pro- gram; and WHEREAS, this participation assures rapid and efficient access to the OCS for exploration and production of oil an gas resources; and WHEREAS, a share of those revenues derived from offshore oil and gas resources should be reinvested in those state ocean and coastal resource programs which provide for said manage- ment; and - 2 - WHEREAS, OCS revenue sharing will not place increased burdens on the oil and gas industry through new severance, excise, or other taxes; and WHEREAS, there currently exists legislation before the Congress that would provide for OCS revenue sharing. NOW, THEREFORE, BE IT RESOLVED that the Interstate Oil Compact Commission supports the concept that OCS oil and gas revenues received by the federal treasury from OCS leasing and royalties be distributed equitably to coastal states so that they may maintain their ability to participate with the federal government in OCS leasing/development decisions and to provide funds to be used by them for coastal management, related marine programs, and amelioration of impacts attributable to OCS acti- vities. - 3 - RESOLUTION CONCERNING TERTIARY OIL PRODUCTION WHEREAS, the Interstate Oil Compact Commission continues to support the conservation and development of domestic energy resources and a decrease in reliance on foreign oil supplies; and WHEREAS, the United States still continues to import a large percentage of its crude oil supplies, much of which is from politically unstable areas of the world; and WHEREAS, reputable studies conclude that the United States has 300 billion barrels of oil in place after completion of conventional recovery techniques, of which between 25 and 45 billion barrels (an amount approximately equal to proven domes- tic reserves) are recoverable by tertiary recovery methods; and WHEREAS, the production of tertiary oil requires substan- tial additional capital investment over conventional production methods; and WHEREAS, the technology and expertise to develop tertiary oil production are still in their infancy, and increased field application of tertiary techniques is needed, to improve ter- tiary technology and expertise, to increase the response, and to reduce the cost of tertiary oil production; and WHEREAS, the windfall profit tax, which has deprived in- dustry of capital needed to develop appropriate tertiary oil production, has largely made such production uneconomical; and - 4 - WHEREAS, the Department of Energy had a tertiary financial incentive program which was extremely successful in stimulating such production; and WHEREAS, the initiation of tertiary oil production pro- jects has severely decreased since the expiration of such in- centive program; and WHEREAS, a financial incentive program similar to the DOE program is needed to stimulate the development of tertiary oil production; and WHEREAS, a properly structured program could create a positive revenue impact for the U.S. Treasury in addition to producing other benefits for the nation as mentioned above. NOW, THEREFORE, BE IT RESOLVED by the Interstate Oil Com- pact Commission that the Crude Oil Windfall Profit Tax Act of 1980 should be amended to provide for a financial incentive program to stimulate tertiary oil production and that such program be funded by a credit against the Windfall Profit Tax for certain defined allowed expenses incurred in the develop- ment of appropriate tertiary recovery projects, with allowed expenses not to exceed an appropriate specified maximum for any one project. - 5 - RESOLUTION ON SURPLUS DELIVERABILITY OF NATURAL GAS WHEREAS, the United States continues to import foreign fuels at high levels; and WHEREAS, these imports are largely composed of oil which is being used in the nation's industrial sector because of the prohibition in the Fuel Use Act against the use of natural gas as industrial fuel; and WHEREAS, there now exists a substantial surplus of deliv- erable domestic natural gas; and WHEREAS, the Fuel Use Act's said prohibition is contribut- ing significantly to this domestic gas deliverability surplus; and WHEREAS, such surplus has caused both severe curtailment of production from existing wells and the inability of some new wells to obtain any market at all; and WHEREAS, this situation threatens to cause premature aban- donment of gas wells and their reserves, thereby resulting in physical waste, and it restrains the exploration for and devel- opment of new reserves; and WHEREAS, use of natural gas for industrial purposes in lieu of other fuels has a positive advantage in terms of pre- serving environmental quality. NOW, THEREFORE, BE IT RESOLVED by the IOCC that the Fuel Use Act should be amended to allow use of natural gas as an industrial fuel. - 6 - RESOLUTION CALLING FOR A MORE SIMPLE AND EFFECTIVE SYSTEM FOR THE VERIFICATION OF MINERAL ROYALTIES WHEREAS, many years ago the Interstate Oil Compact Com- mission began a constructive effort to assure uniformity of oil and gas production data reporting among the producing states as an essential element to efficient conservation and reduction of the paperwork bur den; and WHEREAS, comparability of data is essential to effective management of oil production and royalty collection by the federal government and the states; and WHEREAS, the Department of Energy has reported to the IOCC the vital need for such uniformity of production data as a base for emergency planning by that Department; and WHEREAS, this Commission and the Western States Land Com- missioners are actively establishing uniformity and eliminating duplication in the reporting and verification of oil and gas production; and WHEREAS, establishment of such uniformity in production, transportation and refining reports so that the auditing pro- cedures essential to state and federal lease management and collection of taxes will result in the greatest common effi- cency, thereby placing the least possible burden on both the industry, and public conservation and land management agencies; and - 7 - WHEREAS, preliminary cooperative audits conducted by the states and the Minerals Management Service have already resul- ted in increased efficiency and recovery of royalties for the federal government itself and on behalf of the states and in- dian tribes; and WHEREAS, states participating in such cooperative programs concerning federal royalties are assisting the Department of Interior in the execution of its duty to recover federal roy- alties but now receive no financial reimbursement for the cost of their assistance; and WHEREAS, It is the position of the Department of the In- terior that federal legislation is essential to ensure that the states can be fully compensated and these programs effectively expanded; and WHEREAS, such federal legislation can also provide for establishment of a uniform data-base and more effective royalty and production reporting, thereby improving federal-state coop- eration in both conservation and royalty accounting NoW~, THEREFORE, BE IT RESOLVED that the IOCC strongly urges its member states to communicate to each state's delega- tion in Congress the urgent importance of adopting legislation containing the following elements: 1. A continuing program for cooperative audits, inspec- tions, enforcement~ and collection of federal and In- dian mineral royalties; - 8 - 2. Monthly payments to the states and tribes of their share of royalties; 3. Increased civil penalties to be shared with the states or tribes concerned for violations of applicable laws and lease provisions; 4. The sharing of interest on late payments with states and tribes; and 5. Reimbursement of states and tribes for their costs incurred in these cooperative efforts. - 9 - RESOLUTION ON PREVENTION OF OILFIELD THEFT WHEREAS, the theft of crude oil and oilfield equipment adversely affects production and conservation; and WHEREAS, there is a clear need to monitor the trafficking in stolen oilfield equipment that crosses state lines; and WHEREAS, the Petroleum Industry Security Council is a non- profit private entity dedicated to recovery of stolen oil- field equipment, working in cooperation with federal and state law enforcement agencies; and WHEREAS, the private sector initiative of the PISC has re- suited in the recovery of some $200,000 worth of stolen equip- ment. NOW, THEREFORE, BE IT RESOLVED by the Interstate Oil Com- pact Commission that the Petroleum Industry Security Council be commended for providing a needed service to oil producing and consuming states. -10- A~ta'n ficR";.;,bfieldCompany North Ameri~/-n Producing Division North Alask~ ~trict Post Office Box 360 Anchorage, Alaske 99510 Telephone 907 277 5637 November 1, 1977 Mr. Hoyle Hamilton State of Alaska Department of Natural Resources Division of Oil and Gas 3001 Porcupine Drive Anchorage, Alaska 99501 ..-:-Nc- ~ r-' ® E,:2 L (3EOf_ Subject' Post Yield Behavior of 10-3/4" j ] .... i~"R-AFT .......... 45.5# K55 BTC Casing l .......... [ ...... ~c .... j ....... Dear Hoyle' i F~U~:: ~ Atlantic Richfield Company has recently proposed ~o ~ss~ 10~/4'' 45.5~ K55 BTC casing as the surface casing in its field develop- ment plans of the Prudhoe Bay Kuparuk River ~Oil PRgl .... Surface p i pe requirements i~]~'6"'"~'~'~'~'~"['"~"~6'"'~'"~6:~6~'~a~'~""6~""'[6~serva ti on ::'.~, Order 98-A Rule 3C which states: "The'surface casing shall have minimum post yield strain properties of 0.9% in tension and 1.26% ,. in compression." In a letter dated July 7, 1977, I outlined to ...... you our approach of how we proposed to 9rove that the subject ,(;, ,~:',~ ., casing ~ou]d ~eet the requirements of Rule 3C. The ~ork described ~n that ]ette~ has been completed. The computer simulation work outlined in the July 7 letter was performed by' PrototYpe DevelOpment Associates, Santa Ana, California under the dir6ction'of Dr. G. R. Wooley, Atlantic Richfield ProdUction Research Center, Plano,'Texas. Both PDA and Dr. Wooley were involved in the computer simulation analysis of the 13-3/8" 72# N80 BTC connection presently used in surface pipe of Prudhoe Bay development wells. Enclosed is a copy of the technical report prepared by PDA. Also enclosed is a summary report prepared by Dr. Wooley describing the major findings of the PDA analysis in less technical terms. The nominal strain limits of the 10-3/4" 45.5# K55 BTC casi.ng was determined to be 3.43% in tension'and 3.22% in compression. Due to the large safety factors calculated and previous experience with the 13'-3/8" connection, no destructive tests are planned. RECEIVED ' ...... 8 ',,, i . ',~ ¢' ,, AGO 10031545 Mr. Hoyle Hamilton November 1, 1977 Page 2 If you are in need of further information or discussion, please feel free to call at any time. Sincerely, District Drilling Engineer FMB/MLW/am Enclosures CC' G. R. Wooley T. K. Perkins F. J. Schuh M. L. Waggoner L. M. Sellers J. A. Rochon AGO 10031546 B P ALASKA ! N C. R C' !VED P.O. BOX 4-1379 3111 - C - STREET ANCHORAGE, ALASKA 99503 TELEPHONE (907) 279-0644 [)ivisior~ o',' Oil ~;*.d~s ~' Conservation e'er '~' -e -~,/., c_.o %¢' The Alaska Oil and Gas Conservation Con~ittee Division of Oil and Gas Conservation Department of Natural Resources State of Alaska 3001 Porcupine Drive Anchorage, Alaska 99501 Attention: Mr. Thomas R. Marshall, Jr., Executive Secretary Gentleman: BP Alaska, as operator for the western portion of the Prudhoe Bay Field, hereby makes application for permission to flare natural gas in such quantities as are reasonably necessary ~-~-'~"l"~ses of and s~g 9p of BP Alaska facilities. Implicit in this application is a r__~t for permission ~.~r~,,.e,. ~~..~.~9~ in conjunction with the flare system at each gathering center,~'~ will be done in normal operations after start-up. Attached is a sunmary of activities for start-up of the BP Alaska - operated facilities at Prudhoe Bay. As is indicated therein, a certain amount of flaring is necessary during conm~ssioning and testing of the ' facilities and until stable operations permit the transmission of produced gas to the Atlantic-Richfield Central Compression Plant. With regard to the flare system installed at each gathering center, from time to time we have met with you and discussed the design aspects of the flare system. We have attached for your files a copy of the final BP Alaska North Slope Project Flare System Design Manual, dated September 8, 1976. This is an updated version of the design manual which was presented to you at a conference held at our offices on June 27, 1974. Safe operation of the flare system dictates a pilot and continuous purge gas rate which is estimated to be 0.813 ~scfd at each gathering center. As we gain experience with the operation of the production facilities we will be able to confirm this 1rate, and also develop with you then any further clarification on flaring under plant upset conditions (as de- scribed in the Flare Design Manual) as you may require. In order to come on stream in a timely manner at.~GC~l~, and to prevent the waste of produced crude oil prior to its acceptance by Alyesk~, the attached program contemplates the ~ of ~de~,s~eC~c~_~_d~e' oil to the Sadlerochit Res, s~ee~,i~r~ during the early cc~m~ssloni.ng phase of Gathering Center No. 1. Y?~.........a.p~,,r~al ~fo~r th~__i~~y AGO 10031506 ~s -2- After conmissioning the necessary support systems (Steps 1-10 above), Well D-3 will be produced through the oil separator trains to the gathering center tanks. Well D-3 will initially be produced through the test separator bank and key operating data will be measured. A temporary pumping unit will take suction from the tanks and return the de-gassed crude oil through Well D-1 's flowline into the formation. Oil production rates will be in the range of 10,000 barrels per day. At this stage the associated gas will be flared in the burn pit at an estimated rate of 7 MMscfd. Thereafter Well D-3 will be diverted to cc~mission Production Bank C followed by Bank A. A second well will be selected for production, placed on stream in the same way and allowed to warm up. Well D-3 will then ~be shut-in and the second well will be used to ccmmission another production separator bank. This procedure will be repeated until a production availability of 150,000 barrels per day is developed. Throughout this period with one well at a time flowing, the associated gas will be flared in the burn pit at the gathering center, because it is of insufficient volume to ccm~ission the gas compression and Indair flare systems. At this point Gathering Center No. 1 will be capable of meeting initial production requirements of the Trans Alaska Pipeline. It is POssible to continue to commission wells and inject the crude oil, thus proving up the total production availability of all Gathering Center No. 1 wells. It is also possible to ccmmission the flare systems, the TEG regeneration systems, the gas ccmpression systems and the dehydration systems, using dry gas frcm the gas transit system.~ The situation at the time will guide our activities although it is our intent to send gas to the ARCO Central Cc~pression Plant at the earliest date that both Gathering Center No. 1 and the Central Cc~pression Plant are ready. Gather'.~ng Center No. 2 The sequence of cc~ssioning is much the same as that outlined above for Gathering Center No. 1. We plan that at the time of cc~ssioning Gather- ing Center No. 2, the crude oil transit system will be in service and Alyeska Pump Station No. 1 will be in operation, hence there will be no need to return produced fluids to the formation.' After each well is brought on stream and tested, it will be switched to a production bank and remain on production with the processed crude passed on to Alyeska Pump Station No. 1. When gas volumes are sufficient, both the Indiar Flare System and the gas cOmPression/dehydration systems will be cc~ssioned and placed in service. We expect to commence to produce quantities of crude oil from Well D-3 on April ~ and expect the commissioning sequence described above to continue ~~g~ approximately mid-September ~1977. AGO 10031507 -2- We are prepared to discuss any of the aspects of this application with the Com0ittee in more detail if you so desire. Sincerely, F. J. Venn ~ds Prudhoe Bay Manager Attachment AGO 10031508 STARD-UP PRfX~RAM SI3MMAR~ BP ALASKA INC. PRUDHOE BAY FACILIT~ Two groups of facilities concerned with the production of oil are scheduled to be cc~pleted and placed in service during 1977 in the BP operated area of the P~_~hoe Bay Field. They are Well Pads D, E, F, G, H, J, M, N, with their associated flowlines and Gathering Center No. 1 and Gathering Center No. 2, with their associated gas and oil transfer lines. Key dates are: Facility Mechanical Ck~upletion Ready For Service Gathering Center No. 1 Gathering Center NO. 2 4-1-77 5-1-77 7-1-77 8-1-77 Well Pads andWells Well Pads D, E, F and G, containing a total of 24 wells, are connected to Gathering CenterNo. 1. At thepresent time wells on thesepads are being perforated and made ready for production. Well Pads H, J, M and N contain a total of 24 wells which will be connected to supply crude oil to Gathering Center No. 2 initially. The GC-2 well pads are scheduled to be ready byJulyl, 1977.1 Gathering Center No. 1 BP's commissioning program prepares the GC-1 facility for service in readiness for Alyeska Pump Station No. 1 starting to pump oil. This is accc~plished by producing a well or wells through the facility then returning the de- gassed crude to the formation. The injection well will initially be Well D-1 (23-11-13). Our conm%tssioning program calls for placing in service the following systems, essentially in the sequence listed: . 2. 3. 4. 5. . 7, 8. 9. 10. 11. 12. 13. 14. 15. Electrical Systems Instrument Air Systems Potable Water System Diesel Fuel System Fire and Gas Protection Systems Fire Water System Fuel Gas System MEG Heating Systems Oily Water System Relief System, including Burn Pit Crude Oil Separator Banks (Test Bank and 4 Production Banks) Oil Cooling Water System Indair Flare System Gas TEG Regeneration System Gas Dehydration and Compression Systems AGO 10031509 /~lant~RichfieldCompany ' North Ama ,van Producing Divisio. ..., Alaska 1~.~" "ion & Producing Oper"ions , . Post Oft,,, _..)x 360 Anchorage, Alaska 99510 Telephone 907 277 5637 Robert A. Crosky North Alaska Operations Manager January 18, 1977 Oil & Gas Conservation Committee Division of Oil & Gas Conservation Department of Natural Resources State of Alaska 3001 Porcupine Drive Anchorage, AK 99501 Attention- Mr. Thomas R. Marshall, Executive Secretary. Subject. Gentlemen: Prudhoe Bay Field Start-up Operations ;"i ,.~ ~.~ '~ '! ,¢. ,, t~I~ ¢, ,,,,,, ,,,~., .,,, Attached is a summary of Atlantic Richfield Company's Start-up Plans for'the East Side of the Prudhoe Bay Field. As shown, some flaring will be required to commission, test and gain operating experience with the. facilities needed to produce the field. Accordingly, Atlantic Richfield Company hereby requests the Committee's approval to flare such volumes of gas as will reasonably serve the'purposes of commissioning, testing and gaining operating experience with the Prudhoe Bay Field facilities, including Flow Station No..i, the Central. Compression Plant,'the Field Fuel Gas Unit, Flow Station No. 2 and related flare systems. Please notice that the approval we seek covers the Field Fuel Gas Unit and would, therefore, supersede Administrative Approval No. 98-B.4. This is because the start-up of the Field Fuel Gas Unit will be later than contemplated when such approval was issued and because the commissioning and operation of all these facilities will be interrelated during 'the start-up operations. This request applies only to sl;art-'Ul~ opera'tions. It is necessarily stated the exact timing and' volumes for such flaring are not .specified due to the lack of operating experience and AGO 10031511 Oil & Gas Conservation Committee January 18, 1977 Page 2 the many variables involved. The operating experience to be gained from such operations will permit more specific requests to be made with respect to permanent operations. Meanwhile, we would have no objections if the Committee were to require periodic reporting of the volumes flared during start-up operations, and reserve the authority to impose more specific restrictions on the basis of such reports. Further, we would be pleased if representatives of the Division of Oil & Gas Conser- vation were to witness the start-up.operations from time to time. As also shown in the attached summary, some injection of fluids may be necessary during the start-up operations. Accordingly, Atlantic Richfield Company hereby requests the Committee's permission to inject such fluids as may be required for start-up purposes. We will remain available in case you desire any further information. Very truly yours, TIC RICHFIELD COMPANY Operations Manager ~ RAC: j.ob Attachments AGO 10031512 PRUDHOE BAY FACILITIES STARTUP Below are the estimated Facility startup dates and a brief description of activities. February. 4 18 - Complete purging the FS #1 fuel system and~i~troduce gas into the fuel system. Pruge with gas to the flare tips and light the flare pilots. It is necessary to put gas into the fuel system and light the flare early to cQmmission the gas compressor t~ ..................................... March 11'25 - Introduce sufficient crude oil from DS #1 into FS #1 to establish operating levels. After the crude oil circulation has been stabilized within FS #1, COTU crude oil feed will be diverted through FS #1. All associated gas will remain at FS #1 and dead oil will be going to the COTU. The volume of gas associated with COT crude is +10 M~CFD. March 15 - April 1 - Start FS #1 compressor and send the 10 MMCFD associated gas plus 30 MMCFD of Field Fuel Gas to the CCP. Start the CCP low stage compressor and discharge the above 40 MMCFD to the FFGU. NGI Well #7 will produce Field Fuel Gas requirements above the 10 MMCFD associated gas produced with the crude oil. April 1-15 - Start a high stage compressor at the CCP and inject the 40 MMCFD forward flow from FS #1 into an injection well. Increase the gas production from NGI #7 and if necessary produce other wells to make up 'this 40+ MMCFD into the Field Fuel System. June 1-15 - Light the safety flare at FS #2. Run cc~pressor .................... ~bines. June 15 -.July 15 - Start crude Oil flow to FS #1 and on to Alyeska. Start sufficient compressor capacity at CCP to inject all gas associated with crude delivered to Alyeska from A.R. Co. and BP. .July 1-15 - Start crude oil flow to FS #2 and on to Alyeska. RECE VED JA'N 9 DJvi,~km ~ ~ ~ ~.~, tb~rvattort AGO 10031513 SUMMARY OF EARLY STARTUP PLAN The plan is to produce, oil from DS #1 through FS #1 to the COTU. The crude oil shipping pumps will be used to maintain near design oil flow rates in the oil train and move the produced oil to the COTU. Flow Station gas will be recycled through the compressor and dehydrator to improve dehydration. FFGU gas will be added to the produced gas going to the CCP to keep the gas temperature above the hydrocarbon dew point. One low stage CCP compressor will then compress this gas which will discharge to feed the FFGU, Gas from NGI #7 well will make up the balance of field fuel requirements. After this part of the plan is operating satisfactorily, the gas will be compressed by the high stage compressor at the CCP and injected into the formation. The NGI #7 well will then supply all of the gas t© the FFGU. AGO 10031514 Produc:i, ior~ from 1)S 1 wi].], be rout.::d th.',:¢)ugh {'.tlc! ].2::li. nc~ to the ' 'o06 thc: c)i.], and gas :[nl.e~: Nani:{c)].d ]}uilding (4906) . !n .:., will be combined with f. he ship. Cng puR~p rec:yc:lc~ ~low (100 HI, ID max.) .... ~. Th '-:~ S i'" a%or sheuld be operated anc~ sent to the tlt) Separa~o~ e ~i.. ah app}coxima'Lel, y 300 Ds:i.g, l'.l~i.?, pressure hein~ "sci:" by i~a>:imum ~]'~j.}')pinc; pnmp disc:ha, re~-- e:.~-k(:.r {:Nc,. tip sc;para't:or at: 300 ps.i.g (:l..). ~I}.) oil (pi. us {:t~e crude rec'fc:~,.' s(-.}.-eam) w:[1.], flow {:brough the normal seoara'hor level control valve (!522-L14AV). To J. nc:rease ~orwa~d flow 'L:hrou~h IP cOmpressc)r, ~IP gas wilL1 be forced t:hrou(jh %o t:he :[P separat:or. '.['his will be done by c:onnec[::[ng [he tip gas scrubber back-pressure con'troller (1521--P32IC) 'ho the HP' Scrubber liquid pot level c:ontrel valve (1521-I,21V) ,thereby m[0c:[ng ii: a pressure oonhrol valve. This .valve will pass approxima'tel, y 15 .~'.~P-ICFD under ooeratin~ mede, so it should be mc)re -khan adequa'ke ~or the *. , .~. 9 HHCPD (J-) that would be ex.pecked a{: {:.he }IP separa't:or. }IP oil will flow '{:.brough i:he crude h¢::a{:er/cooler, 'ko '[:he separa'[:or level control valLve, 'and i:o 'L:he :lip separa'l:or. the en'hrance '[:o '[:he IP separa[:or, gas from fihe t.IP scrubber liquid pot will recombine w:[(:h i:he oil s'hream from t:he tip separator. Thus, ~he orig:[nal, wells'[:ream and pump' recycle will eh'her :[.P separa'hor. i At the IP separater, gas and oil will be separa'hed. 'IP s0para'hor c)ff--gas wJ. ll be 10 NNCFD (:!.l). Oil wil:l, pass 't:~rough '[:he seDa. ra't:or ].evel control valve, and c)n to '~he {:rea'L:er and orucle .. surge 't:ank, as usual.. t~ased on a {rea'[:er and crude surge ~ank GOR o:~.: 20 each, STV compressor ne'h suc'kion'~low will be app:coxima'[:ely .50 HNC. FD. Thus, {:he STV compressor will Nave a :[."orward flow of abc)u~. 3% - 4% o.f design 21ow (15 Z.~HCFD). ]-}o'hh .t~}l. ow S{:a'[:ion compressor anhi--surge' valves are sized :/for 100% recycle. }.~c:forc: e.n~:Ci:cinc',.~ the :.[P such:i.on .... ~crubhc~:c, :[P separa'hor o:Ef-gas. will c:omhir~e w:i_th (1) STV'comprc,.ssor fc)rward ~].ow ('.5 HHCFD), (2) a recyc:le ~;'hrc.~ai~ ~:rom [:)~e NP gas (:o~di'[::[c.)ning train/ thc '.i'i'~c.: c.~cls rc:c:.ycl.,.: s'L:.x:¢:~u~[ i:'r¢)m '[:hc,. Ht-? c.]a:3 co~'ldi't:ioni, nc.j t'.rain 'L:o th{', :IP :",(.:.r~hh.,:'c will t.~(': c'..~:(:a[:¢,(i [:¢) ~r'Li:r.';[.c:al].y ']~:i..nLa:i.}~ £1(.')w-.- .~:~{:c~ {.:hro~g.}.'~ '['.t~,,.,. (.~:1; c:c)r~dil:.ion~ ~(.~ 'l:rai. n, t..t~u,n }.).~:c')vid:i.]'~g .for t.~o;~:; w.~..]:l, t.c:.~ ~ t.[~k(~n imr~'ledi[~i'.ely upsl'.re~m, c):[:' the residue gas h{.~s~t:er .(P&:[I) ].50:L0---S~c:. 40) . AGO 10031515 3us[: up~;L:l:c:am ( .~. ~4 .leatc,r .1.5--].3].4 i'.here azI. ,o 2 which can bo used~ oho. a eo~ro~;J.on te~;'L: ~()J.l'~L~ 'L'.]~e .. 2:' ].i. ne (2"-A--]5-522].) %o l:lle :rP flare hcad(:~. It: ~;uggo. st:ed thal: 't:hc~;c~ liner; bc~ c:o:~:~c~c:'t:ed ini'.c~ ;~ line (10"-AB--t5-24) aiid 'L:tie fiucl g~ls liquid ].:ine (2:'-t~--].5--].9) . The fuel gas liquids en{-er i:t~c~ reaiducl gas liquid ii. ne ~lirougii a d" ~;eld-O'-].(~t. It j.s~ sugges[:ed that a "'hoe" accomodat:e 'hhe 4" rec:yc:].c~ ].i.'n{,., as well. as t:he o.>:ishing 2:' line from t:he fuel gas scrubber. }.:'low in t'he jumper line c:an be controlled by a manual control valve locaLecl near 'hhe residue gas head:er [::[.e--i.~l poinh... 'J'he ne'k forward gas fi.ow CCP (10 NMCFI)) will 1thus fi. ow '[:]lrough %.lie residue gas heal-.er 15-1318. The gas recycle stream to the IP scrubbe, r oz~ans a discussion on IP compressor discharge pressure. Design mole weight %o the IP compressor is over 30, bu'k this operat:iitg scheme wi'll reduce mo].e we.igh'h '[:c) approx.iina'[:ely 24. Preliminary calculations wi'kb a mc)].e weight of 24 indica'he IP c:omp'.ressor discharge ~"s f 405 psia a't: 100% ~")',', ' 5 pre .... utes o .:,~.ecd_ anct 90 ..Ps:La a't: 2.0:''''3<, speed_. IP compressor discharge pressu:ce should he a.,s high as possible so ~ha-h the CCP' firs'k s'hage c:ompressor can boos'k the total s%ream to SU.LfiCfLen'h preosure 'ko feed ~he FI. GE 'J.'o iricrea, se velocity in tile ].arge 42" gas linc %0 "the 'CC'~, thereby ~ ~' ~ 0 i'.'iMCFD decreasing heat lo .... :, and subsequen'k ].iqu~d drop--ou'k, 30-,~ (or. lllo~e) c)f fuel. gas from i:he FJ.'GU c:0ll].d be 'recycled t'.t~]7ough 'hhe :L-esJ. dtte 9as heaters and corabined wii:h 'khe ne't: :[orward flow of 10 }I,..k,}}I}.,'"'"' Dallas Gas Engineer:Lng has made computer runs which show '[:lla 10 MMCJ:."I) flow arriving a.'t{ 'Ltte. CCP att 30© F on a 0© }}' day and res.idne gas heat:a:c d:;.scharge i:empara'hure of iL40© F. If we add 30 NHCFD o.f fuel gas, arrJ.va]. '[-.emperakure a'h t:he COP would be 97© F, oi:her fac't:ors be:lng '[:he same. The fuel gas .recyc].e s'L:re, am wi].l be 't:akar~ fr(.nn i-.ha 6:: fuel. gas ].:Lne wh-iOh feeds 't:he Plow 5t:.ah.i:on .(6:'-1)'15-4003), 'j?h:i.s or "warming", gas s'k:r, eam-khen passes 't:hrough t:wo con'hrc)l valves which ack %0 main~cain pressure and 'kempera'kure of the primary :[.c,c..'.d pressu't:'c :i.s ~tdcqu~:t',e. (.;ivclr~ 'l.)l.'[[', i:ypc o.[7 fuel gas pressure, 30 - 40 HHCFD can be reccycled Lhrough t'.he )flow · S~' ' ' ~" i d u s c r ,.~ti:ion zc .... e ga heal: . AGO 10031516 'J.']i:i.s £'ual gas rec.:ye:I.e.: strc:~m w.i.].! 1~ ].'ouL:c:d 'L'.c) residuc~ ga~;. . hc.~at:er, i.e. , 3~'--1304,.~ throucIti. ].ine, 4"--}3-15--~{)19. '.i.'h~s gas ,..:iZ! be sent t~eat:c>r bec:auac: J.'L: will be rc,.].~t['.i.vc,.!y cold, a fac:k which would .- . ~ ....blended wit'.}~ gas cause liqui, d f~].].--ou[: if i'[: v:e e ~c) ,.~.. c:omi]~ ' ~ _ . Thu~; t'.]~c 1.'low St:akion ne't forward flow of 10 N~iCFD will be flowing i'.hrc)ugh 15-1314 and the fnel gas rcc:yclo, s't:ream through 15-].304. ?he 'hwo s't:reams will h.:~ combino, d [.t~d sen% ['.o 'Lhc: Ce;~t.r~]. ].)].~t]'~L: for comzrcssi()n and fed [to.) t'.he ]..'t:'Gti. I[: is s;ug~fes'hed l:ha'h the Flow S%ation gas c:o~ldj_'tioning 't:raJ. n pressure could floa'h on C('.P suction pressure, '[:hus ~]li. mJ.n~Ling [Low flow c:o~hrol problems with the 2~." residue gas bac::~ pressure conl:rol valve, 1510-P428V Addition of .~.uel gas '[:o the t,'low S'ha't.:[on res.~.¢~ue gas stream also has an undesirable effec:'h: reduction of mole weigh'[:. ~'he reduc[ion in mole weigh'h a-h the CiCP suc't:ion fur'hher accen'hua'hes tthe problem of making sufficien'h head on '[:he CCP firs'[: s'hage . .. eh, t...l, low Stat:ion and Central compressor 'ho feed.'h, he Ft,'GU, I3' ' .... ' Plan'[: .compressor head capallili'hies are presen[:].y .belong explored. Thus, gas will be senh t:o '[:he CC'P for compression and feed to' the FFCU. ' Field fue}L demands over ~tnd above 'hhe 10 ?iHCFJ) produced gas w:[ll be me'6 by feed from '[:he gas cap. Oil. w:Lll be pumped 'L:o. 275'-- 30C)psig by the crude boos't:er and shippi~:g pumps, and rou'ked '[:o the inle'h manifold t)~ "purge oil" line (~L2"-]~-15-.-63C)7). I~'rom t:he purge oil line tNe "dead~' crude ertL!ers 12:'-..~1t--15-~309. A'L: 'Lhis point the crude ~J..~L1 ei'hhe:c comb:[ne w:i.t.t~ iztcom:[ng flow :[rom DS ].~ or enL-:er ' c '~' 'hhe 16" line 'ho DS 1 where i'L will. bc~ rou't:c-~d '[:o 't:l~e e>:,[.~.j, ng 6. feed line .[:o {:.he COT. The "l.)a[:h of ].ea, sh res:[s'h[~nce:} wi!l. be t:he COT (50 - 60 psi drop for 13,000 BO:fPD)t so this flow mus'h be oc)n-h, rolled a'[: {:he COT 'wi{:tl back--pressure on 'hhe COT inlet separa'[:or, a manual conhrol valve, or perhaps, by level. in ~:he COT .c:rude surge 'hank, The remainder of i:he dead cruc~e stream in 15.--4906 w:[1], combine wi'kb i]'~com:i, ng flow from ])S 1 and eniser the HP separa'L:or. AGO 10031517 PRUDHOE BAY FI~.D STAR~-UP TEAM EkRLY STAR~-UP PLAN 1~,000 BPo i0 ~v~FP_ D 11,000 BPD ,.q _. (4") RESIDUE /NJ. ~ .L I ~E O~ ~PP~G MIT FLCW STATION ~.1 3 ~ld Fuel i~, ~000 BPD GASOLINE 43 ~ld. (24") -,_ 5.0 -_told (42,,[ CEL~ COMPR. PL~ 8 ~nld Fuel 42 told Plt. Pipe C~%S LIQUIDS AtlanticRichfieldCompany North Am,,,,,',~ ¢al;,Producing Division North AI~ , DiStrict Post Office Box 360 Anchorage, Alaska 99510 Telephone 907 277 5637 I DIR January 3, 1977 ALASKA OIL & GAS CONSERVATION COMMITTEE Division of Oil & Gas Conservation 3001 Porcupine Drive Anchorage, AK 99501 c. ENG I ENG I 2 £NG Gentlemen: Beginning 12/29/76, the Crude Oil Topping Plant operated by Atlantic Richfield Company, Prudhoe Bay, Alaska, experienced operating difficulties which necessitated exceeding the 400 MCFD average allowable flare as defined in Rule 8 of Conservation Order No. 98-B. While introducing a new production well into our system, substantial gas surging was encountered in our gas/oil separators. The safety pressure regulators opened to prevent excessive pressure build-up causing considerable inconsistency in entire plant operations. Included in this upset was surging of the feed gas to our gas compressor, causing failure at one point of a belt driven water pump, and at another point, delayed failure of one of two magnetos on this same compressor's driver. Repairs were completed on 1/3/77 with around~h~clock efforts to minimize down time and flaring. Average daily flare in excess of permit was 1,008 MCFD for five (5) days. Respectfully submitted, Robert F. Bryant COT-Utilities Supervisor RFB/lsm RECEIVED dAN-6 19'/7 Division of Oil and Gas Consenmtion AGO 10031529 02-001B STATE of ALASKA ,: [.)EPART,qEI.~T OF HATUF~,L RESOURCES ~)ivision of 0il and Gas Conservation TO: J'~ Fi les, to be fi led Conservation Order DATE : October 27, 197i3 FROM: Thon'~s R. ilarshatl, Jr. SUBJECT: Conversation with Operator Con- Chief Petroleur~ t~e°l°gist-";~V~x,r~ cernin9 Crude Oil Toppin9 Plant and -,,~,~ Fuel Gas Pipeiine System On October 14, 1976, ~.ir. Lewis Burdon with Atlantic Richfield Company called and re- ported that the l~v pressure compressor and the gas treatment 'facilities at the top- ping plant which were instal Jed to transport casinghead gas to the Prudhoe Bay Field Fuel Gas Unit are operational. The request made by the operator on September 28th for a'n administrative approval to commission these new transportation and trea~n~nt facilities was discussed. ~e did not agree that ~.~o months was necessary to commis- sion this rather minor amount of equipn~nt for the plant and therefore reduced approval ti~ for the administrative approval under Administrative Approval to thirty days. We also required the operator to furnish us with monthly report of the volun~s flared because of commissioning operations for the con~ressor and gas treatment facilities which are related to the fuel gas pipeline system. On October J5th Hr. Burdon called again and mentioned a problem of starting the compressor because of backpressure against the compressor. To alleviate this problem a bypass was instal l{~zd to start the engine and it would require several hours of flaring until the problem could be taken care of. In the meantime, Prudhoe Topping Unit No. 2 was shut down to 50~ of capacity. AGO 10031532 AtlanticRichfieldCompany North Ameri" , Producing Division~' Alaska Expl~. ,ion & Producing Operations ~ Post Office Box 360 Anchorage, Alaska 99510 Telephone 907 277 5637 Robert A. Crosky North Alaska Operations Manager September 29, 1976 Alaska Oil & Gas Conservation Committee State of Alaska, Dept. of Natural Resources Division of Oil & Gas 3001 Porcupine Drive Anchorage, AK 99501 (~t~ ~ c0~ ~-) Attention: Mr. Thomas R. Marshall, Jr., Executive Secretary Subject: Prudhoe Bay Field Fuel Gas Unit Gentlemen: The Prudhoe Bay Field Fuel Gas Unit should be com- missioned within the near future. To that end, we hereby apply for the following administrative approvals pursuant to Rule 8 of Conservation Order 98-B: 1. Safety Pilot. Your approval is requested to use up to an average of 600 MCF/D on a monthly basis for the purpose of maintaining a safety flare or flares. 2. St~rtup add ,'Shakedown". Approval is requested to flare 'such volumes as will reasonably serve the purposes of commissioning, testing and gaining operating experience with the Prudhoe Bay Field Fuel Gas Unit prior to the startup of other facilities that will be dependent upon this unit for fuel. The other facilities include those vital to the production of the field, plus the first four pump stations of the Trans-Alaska Pipeline. Pending initial operating experience, the volumes that must be flared for this purpose can not be determined. 3. Upsets. Approval is requested to flare volumes as may from time to time result from such events as opera- tional upsets that could create risks of explosions and fires; provided, however, that if any such flaring continues for a period of five days and could be safely stopped by a cessation of the source operations, the Committee's approval will be requested to continue such flaring. Your early attention to the foregoing will be appreciated, and we remain available in case you desire any further information. truly yours, RAC:job AtlantlcRi~;hfieldCompany NorthAmeric.r °roducingDivisio~ AlaskaExplo.~,. .~n& ProducingOpor~ions Post Office Box 360 Anchorage, Alaska 99510 Telephone 907 277 5637 Robert A. Crosky North Alaska Operations Manager September 28, 1976' Alaska Oil & Gas Conservation Committee State of Alaska, Dept. of Natural Resources Division of Oil & Gas 3001 Porcupine Drive Anchorage, AK 99501 k~ q~'G~ c01 Subject. Application for Administrative Approvals ~r,~~' pursuaqt to Conservation Order 98-B. Gentlemen. Your earliest possible attention to the requests con- tained in this 'letter are needed and will be appreciated. We have verbally kept you advised of the progress of our ongoing efforts to reduce flaring from the crude oil topping plant to the level of a 400 MCF/D s'~-~ p~-i~~-Y--b~e~i~i'Rlly using all produced gas in excess of that volume. This requires the completion of the Prudhoe Bay Field Fuel Gas Pipeline .S%s~e_~m and a com- pressor and related facilii~'e's'~l--~-&-'"~iant. The pipeline system has already been purged and is being pressured up with gas. Deliveries to BP Alaska Inc. are imminent. Every feasible action, is being taken to. complete the compressor and related facilities at the earliest possible date. For example, personnel have been "borrowed" from other projects and a 24-hour construction schedule is in force. It is hoped that the compressor and additional dehydration capacity will be available by October 15, perhaps as early as October 10o (You will recall that certain key items needed for these facilities required long delivery periods and some of those were recently deZayed even further by causes beyond the control of our Company.) Accordingly, you are respectfully requested to'issue . administrative approvals and an emergency order pursuant to Rule 8 of Conservation Order 98-B as follows- 1.' In order to commission and gain operating experience with the aforesaid facilities, prudent operations will likely require some intermittent flaring during a "'shakedown" period for such things as testing, improving, repairing and/or modifying the facilities. A period o o o Alaska 0il & Gas Conservation Committee September 28, 1976 Page 2 ending sixty days following the startup of the compressor should be sufficient for this purpose. (Note that this does not contemplate sixty days of continuous flaring, but a sixty day period during which intermittent flaring may be necessary.) The exact volumes, if any, to be flared are not predictable. 2. Following the sixty day "shakedown" period, we request your approval to flare such volumes as may from time to time result from such events as operational upsets that could create risks of explosions and fires; provided, however, that if any such flaring continues for a period of five days and could be safely stopped by a cessation of th~ source operations, the Committee's approval will be requested if the operator desires to continue such flaring. 3. An emergency order is requested to permit the continuation of flaring from the COT plant up to and~ including October 15 to the extent the gas therefrom can not be used pending tthe availability of the com- pression and additional ~'dehydration capacities pre- viously mentioned. ~(In fact, flaring has already been reduced by the aforesaid deliveries being made to pressure up the pipeline system.) This emergency order is justified because, among other reasons, the subject operation is the source of some 5,000 MCF/D of gas that is being beneficially used in ways that are essential to the continuation of vital operations in the field -- including, for example, the heating of quarters occupied by approximately 2,000 workers. As stated earlier, your earliest possible attention will be appreciated and we will remain available to provide you with any .additional information you may desire. ~, ~Very truly yours, /~) R. A. 'Crosky RAC. job AGO 10031541 I)I'~I~AltTMI';NT ()F NA'UUI{AL itl~SOUitCES Division of Oil and Gas 3001 Porcupine Drive, AnchOrage, Alaska 99501 JA J" S. HAMMOIVO, July 20, 1976 G. D. Taylor Manager Operations BP Alaska, Inc. P. O. Box 4-1379 Anchorage, Alaska 99509 Re' Casing Design in the Permafrost Interval Dear Mr. Taylor: Your letter of June 28, 1976, stated that five of your Prudhoe Bay wells had 13 3/8" surface casing strings through the permafrost which included 68 lb/ft, N-80 buttress casing. These wells are A-7, C-5, C-6, C-7 and C,8. Based on your studies you submit that 13 3/8", 68.1b/ft, N-.80 buttress casing satisfies Rule 3(c) of Conservation Orders No. 98A, No. 98B, and No. 83C. The.above Rule 3(c) states that surface casing through the permafrost shall have minimum pOst-yield strain properties of 0.9% in tension and 1.26% in compression. Arco's May 1~975 report, "Prudhoe Bay Field Permafrost Casing. and Well Design for Thaw Subsidence Protection", describes results of full scale strain limit tests on 13 3/8", 72 lb/ft, modified N-80 (t. IN-80) buttress casing and' of a finite element model calibrated from the tests. Results of Arco's tests and studies indicated 13 '3/8", 72 lb/ft, MN-80 buttress casing exceeded requirements of Rule 3(c). One of the prime reasons that controlled yield or modified MN-80 casing ~was specified in the Arco tests was to preclude the practice of manufac- turer'S substitution 'for N-80, with higher steel grades which, due to physical prol)erties, fail in Arctic al)i)lica'tions. Therefore, approval of N-80 grade casing i:or surface casing through the permafrost requires assurance that other grades have not been subStituted for N-80. ~OLLI1 IOzv "t776-A li]IIiU7'E FHOM (.)Ut'i S1A'I'F. 70 O[Jt? NATION- 1970" AGO 10031542 G. D. Taylor'~''~' -2- ~'~,'' July 20, 1976 H. ti. Hami 1 ton Your studies using Arco's finite element model denlonstrated that failure strain in compression for 13 3/8", 68 lb/ft, MN-80 buttress casing was 4.2%. Results of finite model calculations shown in Table III-1 of the above mentioned Arco report alludes that failure strain in~ tension for the same casing exceeds that of 13 3/8", 72 lb/ft, MH-80 .buttress. casing. Our analysis supports this point. Based on these studies, 13 3/8", 68 lb/ft, MN-80 buttress casing adequately meets the requirements of Rule 3(c) of Conservation Orders No. 95A, No. 98B, and No. 83C. Sincerely, Hoyle H~ Hamilton Acting Director. AGO 10031543 BP ALA ,KA INC. 3111 - C - STREET ' hZE'L'EPI~ION~'19071 2~9~b64~ ' i :'--" .' ,' ~,~r~ ~ ~,.-~ Mr. O. K. Gilbreth Director Division of Oil and Gas Department of Natural Resources State. of Alaska 3001 Porcupine Drive Anchorage, Alaska 99504 MAILING At. .5: P.O. BOX 4-1379 ANCHORAGE. ALASKA 99509 June 28, 1976 Dear Mr. Gilbreth: ..Subject:_ Cas..ing DeAign in the Permafrost Interval In the Field Rules of January 9, 1976, Rule 3 of Conservation Order No. 98-A states that the surface casing should have minimum post-yield strain properties of 0,9% in tension and 1,26% in compression. The ARCo report of May, 1975 entitled "Prudhoe Bay Field Permafrost Casing and Well Design for Thaw Subsidence Protection" describes the tests on 72 lb./ft., 13-3/8 inch N-80~BUttress casing and shows how it adequately meets this standard.__'~/~_~ ~ ~.~-~O A number of our wells are completed with 68 lb./ft., 13-3/8 inch N-80 Buttress casing as the surface string. These wells are: A-7 (12-26,11-13), C-5 (41-25-11-13), C-6 (41-30-11-14), C-7 (31-24-11-13) and C-8 (33-18-11-14). In.order to confirm that this 68 lb,/ft, casing meets the requirement, we have carried out studies using the finite element program employed by ARCo and referred to in their report. The input data were the same except for the slightly reduced wall thickness. We did not model the tensile loading condition'because we are confident that it will meet the requirement, based on the fact that ARCo's work demonstrated that a reduction in wall thickness from the 72 lb./ft, condition would increase the tensile strain capacity of the casing. For the '72 lb./ft, condition the tensile strain in the casing at failure was found to be 3,4%, compared with the minimum required figure of 0.9% and therefore comfortably meeting the standard. In compreSSion, the analysis demonstrated that the failure strain was 4.2% for the 68 lb./ft, case compared with the requirement of 1.26%. We submit therefore that 13-3/8 inch, 68 lb./ft.¥Buttress casing adequately meets the Field Rules. /v'--go '? , Very truly yours, BP ALASKA INC. G. D. Taylor Manager Operations DBLW:vjy cc: Drilling Superintendent District Drilling Engineer File -' Permafrost: Casing Strain (13-3/8" 68#) AGO 10031544 ', PRUDHOE BAY FIELD PROPOSED WELL COMPLETIONS THROUGH THE PERMAFROST INTERVAL BP Alaska Inc. October, 1975 (1) INTRODUCTION There are three main areas in which the presence of thick permafrost can impact the integrity of well completions:- . . . · Internal freezing: Casing strings can be damaged by high pressures developed during the freezing and associated expansion of fluid left in casing/casing annuli. (2) (.3.) External freezing: High pressure can develop in the casing/open hole annulus and the adjacent thawed permafrost during the freeze-back following thaw caused by drilling and suspension of a well or during a shut-in period during or after the production life of the well. These external freeze'back pressures ma~ cause damage to some surface casing strings. - Thaw subsidence ; If, during the production life of the well, a large thaw radius, is developed, there is the potential for subsidence of the thawed permafrost which could impose casing strains which are large enough to cause failure of some surface casing connections. __ INTERNAL FREEZING The vast majority of instances of damage to casing occurring in the permafrost interval has been caused by this effect. the early Prudhoe Bay wells, most of the casing/casing annuli were cemented. A fairly high proportion of these wells suffered collapsed casing caused by the freezing of pockets of fluid left in the casing/casing annulus. Most of the coilapsed BP Alaska Prudhoe Bay development wells have had the collapsed .. casing strings removed. Some 15 BP Alaska development wells have cemented casing/casing annuli through the permafrost and have not suffered collapse. Two reliable methods of eliminating this problem have been developed; these are: (a) To completely empty the~casing/casing annulus of the water base mud and then back fill the annulus with oil (generally residual oil). This technique was used in twelve of the BP Alaska Prudhoe Bay development' Wells. (b) To displace the mud out of the casing/casing annulus using a viscous oil-based fluid such as Arctic-pak. This technique is described in more detail in Reference 1. (This technique will be generally used in the future for placement of non-freezable fluid in most of the casing/ casing annuli in BP Alaska Prudhoe Bay wells.) EXTERNAL FREEZING References 1.and 2 give details of field experimental test data and of theoretical models for simulating and predicting this effect. The published data indicate that many of the ligher-weight 20" and 18~" surface casing 'strings installed in Prudhoe Bay wells are at risk to collapse damage caused by external freezing pressures. The information gained from our field experience indicates that this problem is probably not as severe as the published data suggest. During the latter part of 1974, workovers of three BP Alaska refrigeration-type wells were performed (BP Wells D-I, D-3 and D-5). Ail three of these wells were completed with:- (a) A 20" 94 lb./ft. HZ40 and 133 lb./ft. K-55 combination surface string '(c) (.d) to approximately 2300i BKB. A 16" circulation string with diesel in the 16" x 20" and 13~" x 16" annuli. An intermediate string of 13~" 68 lb./ft. K-55 casing. A production string of 102" 55.5 lb./ft. K-55 casing. The conclusions drawn from these workovers were:- (a) In two of the wells (D-1 and D-3) the 20" 94 lb./ft. H-40 surface casing'had been damaged. Much of this damage may have been caused by external freezing pressures. No damage of 20" 133 lb./ft. K-55 surface casing which was installed below approximately 1400 ft. BKB was seen. (b) Damage of the 20" surface casing string and 0f the light-weight 16" circulatiOn string did not impact the integrity of the 13~" intermediate string. (c) Damage to the 10~" and 13~" casing strings was caused by internal freezing of fluids in the casing/casing annuli. With the possibl~ exception of the two wells mentioned above (BP Wells D-1 and D'3), no evidence of collapse of surface casing caused by external freezing has been seen in any BP Alaska Prudhoe Bay wells. The 18§" and 20" surface casing strings in Wells F-2, F-4, F-5, F-6 and N-3 were examined during and after the workovers to remove collapsed 13~" casing and found to be undamaged. Probably -- 3 the presence of cement in the casing/casing annulus backed up the surface~ casing and prevented any collapse due to external freezing. Discussion of the impact of external freeze-back on the various BP Alaska development wells is given in a later section. THAW SUBSIDENCE -~. Whether thaw subsidence caused by the development of a thaw bulb around a hot oil-producing well completed through thick permafrost will result in forces sufficiently large to cause damage to casing has concerned the industry since before the discovery of the Prudhoe Bay Field. Testimony presented'at the 1969 Prudhoe Bay Field Rules Hearings indicated that within the Prudhoe Bay area the possibility of casing damage caused by thaw subsidence was limited to.the upper 500 feet, i.e. the "first" gravels. Below this depth, the formations were deposited prior to the Pleistocene glaciations, do not contain excess ice and will not cause large down-drag forces upon thaw. The Field Rules written after the 1969 hearings reflect this testimony and call for the protection of the casing from damage caused by permafrost thawing, by insulation, refrigeration, or the use of slip joints. BP Alaska carried out a thaw subsidence test by circulating two wells (19-10-15A a~d 19-10-15B) from April, 1970 to April, 1971 with hot diesel (Reference 3). A thaw radius of approximately 10 to 15 ft. was achieved around each of these wells, This is equivalent to the thaw bulb developed around a conventionally completed uninsulated producing well in two to five years. The measurement of the casing strains in this thaw test was not sufficiently accurate to quantify the strains caused by thaw. Qualitative indications were that these strains were small, i..e. less than 0.1 percent. In late 1970, BP Alaska also carried out experiments on the development wells completed for refrigeration. These . experiments proved that refrigeration was not a practical solution to the problem. During 1971, BP Alaska funded the development of the dual wall insulated tubing concept which is now known as General Electric Thermocase. One 2000 ft. string of 9~" x 5½" Thermocase was built and run in a Prudhoe Bay well completed for flow testing, The concept was found to be mechanically feasible and offered a practical means of insulating the permafrost from the hot produced oil, which resulted in a greatly reduced radius of thaw. --'5 -- Atlantic Richfield and Exxon have performedla l~rge-scale thaw subsidence field test at Prudhoe Bay by hirculating hot fluid in five wells drilled on a 23 ft. spaced five-spot pattern for 22 months ending in June, 1975. BP Alaska has been kept fully informed throughout the planning and execution of the field test and its associated studies. The results of these studies are contained in a dossier which Atlantic Richfield presented to the State of Alaska, Division of Oil and Gas in June, 1975 (Reference 4). BP Alaska Position The ARCo/Exxon work has resulted in a far better understanding of the thaw subsidence problem. These studies have shown that thaw subsidence can result in casing strains higher than minimum yield. Casing strings are commercially available which can withstand these strains without failure of the connections.- -The studies, together with a geologic appraisal of the first gravels, have also shown that the thaw subsidence strains which could be developed in the upper 500 ft. are not sufficient to cause casing failure. We agree with the main conclusions of the ARCo presentation to the Division of Oil and Gas and we support the position that the 13~" 72 lb /ft. N-80 surface casing string is adequate to withstand the maximum thaw subsidence strains that could be generated around a conventionally completed oil producing well at Prudhoe Bay. Computations have been performed using the program described in Reference 5 to predict the thaw radius around insulated and uninsulated BP Alaska production wells at Prudhoe Bay. The results for wells completed with 7" production tubing are shown in Figures 1 and 2. For the uninsulated completion as shown, sustained fluid production of 15,000 bbls./day will result in the thaw profiles shown in Figure 2. The thaw profile achieved after 20 years could, undgr the '~orst case" lithological and pore pressure conditions, result in casing strains of 0.7% compressive and 0.5% tensile. The thaw subsidence field test and associated computer studies indicated an approximatei__linear relationship between the thaw subsidence strains and the radius of thaw. The use of 7" x 10~" T~rmoc~se I reduces the average thaw radius over 20 years production from 40 ft.~ to less than 10 ft. At 1600 ft., the radius of thaw is reduced from 48 feet to 16 feet, i.e. by a factor of 3, thus the "worst case" thaw subsidence strains would be reduced by a factor of 3 from 0.7% compressive to 0.23% compressive and from 0.5% tensile to 0.17% tensile. These strains are less than 50% of the strainJat yield. Thus, satisfactory post-yield strain behavior of the surface casing and connection is not required for those wells in which we intend to run insulated tubing. . In two early BP Alaska Prudhoe Bay development wells, 132" K-55 Seal-Lock casing is'-installed cemented inside 20" or'18§" surface casing. BP Alaska has · performed compressive tests on 132" Seal-Lock casing connections. These tests indicated that, provided that the correct make-up torque was used, the . · connection would withstand strains of up to 2% before failure. However, under or over torquing of the connection results in a strain performance of only 0.5% b~fore failure of the connection. Accordingly, we do not consider the 132" K-55 ~Seal-Lock connection to have an adequate post-yield strain performance to withstand the "worst case" thaw subsidence strains. We have established the following criteria to decide which of the Prudhoe Bay development wells require insulation to protect them against damage by thaw subsidence:- (i) The production casing string must not experience thaw subsidence strains which would approach the minimum yield of the casing by an adequate safety factor. (ii) It is preferable, although not mandatory, that one other competent casing string be installed across the permafrost interval. (£ii) This other string should either: (~) H~ve a post-yield strain performance giving adequate design factors ~n compression and tenSion over'the calculated '~orst case" th~w s~bsidence straining' or (b)' Not be Subjected to post-¥.ield .th~~.s~bs~dence. S.tr~ins,~ ThiS latter provision can be achieved by using insulation such as · Thermocase I in order to reduce the radius of thaw to a level where the --r7 . thaw subsidence strains are insign~fi~:ant, or by allowing the thaw subsidence strains to be taken up by a third outermost casing string which is not cemented to the next inner string. The completion designs presently proposed for BP Alaska Prudhoe Bay development wells incorporate a requiKement for two competent casing strings across the permafrost interval. -8- COMPLETIONS FOR BP ALASKA PRUDHOE BAY WELLS Application of the previously mentioned criteria for insulation requirements, and consideration of the internal and external freezing problems results in the following completions for the 72 BP Alaska first-phase development wells: (i) An approximately 2000 ft. string of 7".x 10~" Thermocase I will be run in the 26 BP development wells which have 18~" or 20" Buttress or 8-round connection casing installed as surface strings and only one string of casing (13~" 68 and 72 lb./ft. N-80) installed inside. The 18~" and 20" casing strings are not adequate to withstand the "worst case" thaw subsidence strains without potential failure of the connection. The use of insulation eliminates the potential for damaging casing strains caused by thaw subsidence. The 26 wells fall into three groups (see Figure 3): (a) Wells having 132" casing cemented inside 18~" or 20" surface casing. Because the 132" x surface casing annuli are cemented, there is no danger of external freezing causing collapse of the surface casing. (b) Wells in which the 132" casing suffered collapse due to the presence of freezable fluid in the cemented 13~" x surface casing annulus. The 132" casing has been, or will be, removed; the 13~" stub will be patched back to surface with 72 lb. N-80 13~" Buttress casing with high density Arctic-pak or a non-convecting equivalent in the 13~" x surface casing annulus (6 wells). The placing of high density Arctic-pak will greatly reduce the potential for damage to the surface casing caused by external' freezing. There is no danger of internal freezing causing-casing damage, -9- (c) Wells having 13~" casing over the permafrost interval inside ,os,, ~o~ or 20" surface casing with diesel or residual oil in the casing/ caSing annulus (12 wells). The 13~" casing in these wells is undamaged. · There is a potential for external freezing pressure to cause damage to the surface casing strings in some of these wells. This potential can be greatly reduced by placing high density Arctic-pak in the 13~" x surface casing annulus and the feasibility of this is being investigated. There is no danger of casing damage caused by internal freezing. (ii) Approximately 2000 ft. of ~" 8~" J2 x - Thermocase I will be installed in the two wells (BP Wells F-1 and N-i) in which an intermediate 13~" Seal- Lock K-55 casing is cemented inside 20" surface casing and in BP Well J-2 where, below 931', the 132" 68 lb./ft. K-55 Seal-Lock casing string is exposed to thaw subsidence strains. The use of insulation eliminates the potential for development of damaging casing strains caused by thaw subsidence. There is no danger of external freezing causing surface casing collapse because the 13~" x surface casing annulus is cemented. " (iii) Insulation is not required for thaw subsidence protection in those development wells which have 132" N-80 Buttress casing installed as the surface string through the permafrost. In past discussions with the State of Alaska, Division of Oil and Gas, we have proposed completing these wells with 7" x 10~" Thermocase insulated tubing over the permafrost. These completions would have had only one casing string across the permafrost, but would not have been subjeCted to significant thaw subsidence strains. The results of the" recent thaw subsidence investigations have demonstrated that these wells with 13~" 72 lb./ft. N-80 Buttress casing ca~e safely completed ~n~" 9§" without insulation. This allows the installation of a ~ or - 10 - tie-back string which is, as our criteria state, a preferable, as-well as a more economical, completion. The early wells in this group (BP Wells C-4, C-5, C-6, C-7, C-8 and A-7) have 13~" 68 lb./ft. N-80 Buttress casing installed in the surface string over part of the permafrost interval. It is our intention to confirm that this Buttress casing, which is slightly lighter than the tested 72 lb./ft. · casing, has adequate post-yield strain performance to withstand the "worst case" thaw subsidence strains. These wells will be completed with a 10~" or 92" tie-back string from the 9§" PBR to surface, with Arctic-Pak or an oil base equivalent in the 10~ /13~ annulus, and 7" tubing (see Figure 5). This applies to all development wells drilled since, and including, C-4 (March, 1973). Some 31 of the 72 first-phase wells fall into this group. The 13~" s6rface casing strings are not at risk from external freezing. There is no danger of damage caused by internal freezing· (iv) BP Well C-3 also will not be insulated. .Here, 13~" Buttress casing is installed inside 18§" surface casing v~th residual oil in the casing/ casing annulus. After deepening the well for oil production, a 10~" or . 9~" tie-back string will be run and set in the PBR at the top of the 9§" liner (see Figure 5). The post-yield strain performance of the 18~" 139 lb./ft. K-55 Buttress . surface casing string is not known, hence the casing could possibly be damaged by the "worst case" thaw subsidence strains. Two inner casing strings, (13~" and 10~" tie-back) will be present, the 18§" string is not cemented to the 13~" string and so its condition does not affect the safety of the well. . · (~) The refrigeration type wells which have suffered collapse damage (B~3, D~I, D~3 a~d D~5) w~ll be patched back to surface with 1~'~' 72 lb./ft. N-80 Buttress casing and also an inner string of'10~'' casing - 11 - (five ~el?.~, see Figure 6). The 13~" x 20" and 10~" x 13~" annuli will be filled-with Arctic-pak or equivalent. Insulation for thaw subsidence protection will not be required. It is known that in two of these wells the 20" surface casing has been damaged. The 20" 94 lb./ft. H-40 surface casing in the remaining wells have a potential for damage caused by external freezing pressures. Collapse of the 20" casing would not impact the integrity of the 132" casing nor will the effects of thaw subsidence straining of the 20" casing be imparted to the 132" string. There will be two inner casing strings present, and thus the condition of the 20" surface casing string does not affect'the safety of the well. (vi) Insulation for thaw subsidence protection is not required in the undamaged refrigeration-type completions (BP-Wells B-i, B-2, B-4, D-4 and J-3, see Figure 7). The two competent strings are the 10~" and the 132" casings. In these wells, the 13~" Seal-Lock string is not tied to the 20" surface casing because the annular space contains diesel, thus the "worst case" thaw subsidence strains will not be experienced by the 132" casing. The 20" 94 lb./ft. H-40 surface casing is at risk from damage by thaw subsidence strains and external freezing.pressures. However, there are two inner casing strings and the condition of the 20" surface casing string does not affect the safetYof the well. '(vii) There are two wells (BP Wells M-1 and J-l) which do not meet the criteria for uninsulated production (see Figure '8), in that all casing/casing annuli are cemented, and so thaw subsidence casing strains could be . experienced in all strings. Both of these wells would require special configurations of insulated tubing which have not been developed. We are"currently assessing the feasibility of these special configurations. A possible alternative would be to assign a limited production life to theSe Wells in order' to limit the thaw radius an~ hence the thaw subsidence strains. CONCLUSIONS The BP Alaska development wells currently being drilled and those planned for the future in the Prudhoe Bay Field have 13~" 72 lb./ft. N-80 Buttress casing installed as the surface casing string. It is intended that these wells will be completed without insulation for thaw subsidence protection. Insulated tubing (7" x 10~" Thermocase I) will be installed through the pehnafrost interval in the 26 BP Alaska development wells which have 18~" or 20" surface string and 132" production casing through the permafrost interval. Insulated tubing (5½" x 8§" Thermocase I) will be installed in the three BP . Alaska development wells, in which 13~" 68 lb./ft. K-55 Seal-Lock casing can experience thaw subsidence strains. Ten wells wilI have three casing strings through the permafrost interval (10~", 132" and 18§" or.20'' casings). The 132" string is not cemented to the surface casing through the permafrost interval, thus thaw subsidence strains will not be imposed on the 132" casing string. Insulated tubing will not be . run in these wells. Two wells wonld require special configurations of insulated.tubing. The~ feasibility of these strings is under investigation. - 13 - REFERENCES (1) Perkins, T. K., W0oley,. G. R. and Ng, F. W.; "Solutions for Some Problems Resulting from Refreezing of Permafrost Around a Well Bore". American Petroleum Institute, Paper N,umber 364-A presented at the 1975 Annual Meeting, Division of Production, API April 5 - 7, 1975. . Perkins, T. K., Rochon, J. A., and Knowles, C. R., "Studies of Pressures Generated upon Refreezing of Thawed Permafrost around a Well-Bore". Journal of Petroleum Technology, October, 1974, Volume XXVI, page 1159. (2) (3) (4') Davies, B. E., and Boorman, R. D., "Field Investigation of Effect of Thawing Pei~nafrost around Well-Bores at Prudhoe Bay". SPE Preprint Number 4591, presented at the 48th Annual Fall Meeting of the Society of Petroleum Engineers, September 30 - October 3, 1973. Atlantic Richfield report: "Prudhoe Bay Field, Permafrost Casing and Well Design for Thaw Subsidence Protection". Authors T. K. Perkins, J. A. Rochon, R. A. Ruedrich, F. J. Schuh and G. R. Wooley, May, 1975. . . (5) Merriam, R., Wechsler, A., Boorman, R and Davies, B, "Insulated Hot Oil Producing Wells in Permafrost". Journal of Petroleum Technology, March, 1975, Volume XXVII, page 357. - 14 - RADIUS OF THAW OVER PERMAFROST (STANDARD SOIL PARAMETERS) THERMOCASE T_ (20 YRS. CONTINUOUS PRODUCTION L~} 15000 B/D) II. DEPTH (F T.) !00 200 300 400 500 600 700 800 9OO !000 I100 1200 1300 1400 FREEZE/THAW TEMP. C~ 50 FT.=$1.5°F+ I°F FREEZE/THAW TEMP. ~) 1900 FT. = 30.5°F-.+ I°F SURFACE'-'~ (72~)(55.5~'J-~ 5~) RADII 0.2653' I 0.2911 0.4067' 0.4479' 0.5145' 0,5573' 0.7292' 2050'--" '~' 2150''-~ ~ 0.3617' 2350,._~ 0.4010' 9~/~' (47~) HEAT FLOW ACROSS THERMOCASE INSU- LATION 31.25 BTU/HR/FT CASING SCHEMATIC 1500 1600 1700 1800 I Y 5 YEARS · YEARS YE BASE OF PERMAFROST i900 I I I I 5 I0 15 20 RADIUS OF THAW I I 25 30 35 FIG I RADIUS 'OF THAW OVER PERMAFROST (STANDARD SO IL PARAME T'ERS) NO INSULATION (20 YRS. CONTINUOUS PRODUCTION ~ 15000 B/D) -- DEPTH (FT.) I00 200 300 400 500 6OO 700 80O 9OO I000 !!00 1200 30O 1400 1500 1600 1700 1800 1900 I YE 0 FREEZE/THAW TEMP.~ 50 FT.= 31.5°F~.l°F FREEZE/THAW TEMP. ~ 1900 FT. = 30.5°F_+ i°F SURFACE'-~ ?" (72 ~(4 0~-)(261~) 0.2615' 0.2917' 0.3681" O. 4010' 0.5145' O. 5573' O. 7292' AT FLOW ACROSS ANNULI IS 360 BTU/HR. CASING SCHEMATIC yO YEARS BASE OF PERMAFROST RADIUS OF THAW i i I I I t I I0 20 30 40 §0 60 70 FIG 2 I ] J I J I I I I, ! I ! ! J I. I I I ] } ] ! i J J GROUP (o) WELLS REQUIRING ,7,, THERMOCASE [ GROUP (b) 'GROUP(c) $0" CONDUCTOR /DIESEL MIXTURE IN I0 $/4"x I$ ;5/8" ANNULUS D 1:5 $/8" x SURFACE CASING ANNULUS x I0 $/4" THERMOCASE TO APPROX. 2000' .3 $/8" 68 LB/FT K55 SEAL LOCK CASING . 18 5/8" OR 20" SURFACE CASINGw TO APPROX. 2350' BKB. 9 5/8" CASING "26 LB/FT MN-80 TUBING ~0" CONDUCTOR RESIDUAL/DIESEL MIXTURE IN I0 3/4"x I$ 3/8" ANNULUS DENSITY ARCTIC-PAK IN 13 3/8"x SURFACE CASING ANNULUS 3/8" 7Z LB/FT N-80 BUTTRESS CASING CASING PATCH IDUE Or DIESEL IN THE 15 3/8"x SURFACE CASING ANNULUS MIXTURE ) lO 3/4, 13 3/8" ANNULUS "x I0 3/4" THERMOOASE Z TO APPROX. ZOO0' BKB. 13 $/8 CASING 18 5/8" or ZO" SURFACE CASING SURFACE CASING TO APPROX. Z350' BKB. 5/8" CASING ~7" 26 LB/FT MN-80 TUBING 8 WELLS F-3, H-Z, H-4, m'2, M-3 N-Z, N-3, ANDN-5 6 WELLS F-2,4,5,6, H-3, AND N-6 LEGEND CEMENT MULTI -LAYER INSULATION 12 WELLS A-I,2,3,4~5,6, C-1~2 F-7~ H-5, J-5 AND M-4 FIG 3 I J I I J I J I I I J I J I J ! ,1 ! I I J I ! I I (ii) WELLS REQUIRING 5 I/2"x8 5/8" THERMOCASE 30" CONDUCTOR I/2"x 8 5/8" THERMOCASE /DIESEL MIXTURE I 8 5/8"x I0 3/4" ANNULUS LEGEND CEMENT RESIDUAL OIL/DIESEL PACKER FLUID MULTI-LAYER INSULATION ARCTIC PAK OR EQUIVALENT ESEL IN 103/4"xl3 3/$" CASING ANNULUS 3/4" 55.5 LB/FT N-8OCASI 13 3/8" CASING PATCH 20" 94LB/FT H-40 SURFACE CASING TO 9.31'BKB. CEMENTED 15 3/8"xZO" CASING ANNULUS 3/8" 68 LB/FT K-55 SEAL- LOCK CASING-- 20" CASING TO APPROX. 2100' BKB. 5/8" CASING PATCH 5/8" 47LB/FT N-SOCASING~ I/7"ITLB/FT MN-80 TUBING~_ 2 WELLS F-I AND N- I I WELL J-2 FIG ,, (iii) RECENT AND FUTURE WELLS WHICH REQUIRE INSULATION FOR SUBSIDENCE DO NOT PROTECTION.. ,, (iv) DEEPENED FUEL GAS SUPPLY WELL. NO INSULATION REQUIRED FOR THAW SUBSIDENCE PROTECTION. (ALL 2.0" 94 LB/FT CONDUCTOR TO APPROX. 80' BKB. 3/4" 55.5 LB/FT K-55 TIE-BACK STRING 5/8" PBR AND SEAL AS,~ 9 5/8" 47LB/FT N-80 BUTTRESS CA,~ 7" 26LB/FT MN-80 TUBIN( 153/8" N-8OBUTTRESS CASING TO APPROX. 2600' :51 WELLS WELLS DRILLED FROM C-4 ONWARDS) I WELL C-3 50" CONDUCTOR 3/8" 68 LB/FT K-55 BUTTRESS CASING 18 5/8" K-55 BUTTRESS TO 2503'(96.5, 109.5,159 LB/FT) LEGEND CEMENT ...,,;',:: !,~ i~.. ,, ARCTIC PAKOR EQUIVALENT ~ RESIDUAL OIL RESIDUAL OIL/DIESEL PACKER FLUID FIG 5 J J J ] J I J J I I ] ] I ] ] (v) REPAIRED REFERIGERATION-TYPE WELLS. NO iNSULATION REQUIRED FOR THAW PROTECTION. SUBSIDENCE CONDUCTOR $/8" 72. LB/FT N-B0 BUTTRESS CASING LEGEND CEMENT A RCTIC PAK OR EQUIVALENT RESIDUAL OIL/DIESEL PACKER FLUID . 5/8"0R I0 3/4" CASING 9 5/8" PBR AND SEAL ASSEMBLY I0 $/,q."AND 13 3/8" CASING PATCHES 9 5/8" 2:0" SURFACE CASING TO APPROX. 2.300' BKB 5/8" 47LB/FT CASING --7" 26LB/FT MN-BO TUBING 4 WELLS B-3~ D-I~ D-3~D-5 FIG 6 (vi) I ! I ! ! J i UNDAMAGED REFRIGERATION-TYPE WELLS. ! I I I I I NO INSULATION REQUIRED FOR THAW ,I I I I i I I i I SUBSIDENCE PROTECTION. -..-------- $0" CONDUCTOR~ ............. 3/4" 55.5 LB/FT K-55 CASING 15/8" 61 AN068 LB/FT K-55CASING LEGEND CEMENT DIESEL OR KENPAK DIESEL RESIDUAL OIL/DIESEL PACKER FLUID CEMENT IN 5/4"x 13 3/8" ANNULUS DIESEL OR KENPAK IN I0 ~/4" X 13 5/4"ANNULUS THROUGH PERMAFROST 16"CIRCULATION STRING TO APPROX. 2800' 20" SURFACE CASING TO APPROX. 2500'BKB.' 26LB/FT MN-80 TUBING- $ WELLS B-I~ B-4, D-4 2. WELLS B-2 AND FIG '7 I I I I I ! ! I ! (vii) WELLS FOR WHICH SPECIAL ! ! I I I I I CONFIGURATIONS OF INSULATED I I I I I I I ! I TUBING WOULD BE REQUIRED. LEGEND ICEMENT $0" CONDUCTOR 20" CONDUCTOR CEMENTEO ANNULI 9 5/$"x 13 3/8" 13 3/8"x 20" ?"x 9 5/8 9 5/8"x 13 3/8" ?--0" SURFACE CAS lNG TO 950' BKB. I$ $/8"68 AND 61 LB/FT K-55 CASING 9 5/8" 47 LB/FT N-80 CASING 1:5 3/8" 61LB/FT K-55 SURFACE CASING TO 928' BKB. 29 LB/FT N-80 X-LINE CASING CASING PATCH I WELL d-I i WELL M-I FIG 8 In the Matter of the application of the Atlantic Richfield Company for an exception to Rule 2 of Conservation Order No. ~8-B to permi, t the drilling of two well. s per governmental section on forty sections in the Prudhoe Oil Pool. December 4, 1974 1 2 3 .. 6 8 10 11 18 · . . ~.1 .. PUBLIC HEARING STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DivISION OF OIL AND GAS In the Matter of the application of the Atlantic ) Richfield Company for.an exception to Rule 2 of ) Conservation Order No. 98-B to permit the drilling ) of two wells per governmental section on forty ) sections in the Prudhoe-.Oil.Pool. ) COMMITTEE MEMBERS: APPEARANCES: Anchorage, Alaska Loussac Z J Library . 427 F Street December 4., 1974 9:30 a.m. Tom Marshall Homer Burrell, Chairman Hoyle ~amilton -. John Scott, Legal Division, Atlantic Richfield Company Paul Norgaard, District Engineer,' Atlantic Richfield's North Alaska Dis- trict. ~oward Slack, Vice President, Atlanti~ Richfield Company, and Resident Manag~ of Atlantic Richfield's Producing Di- vision's Alaska Regions. Glen Taylor, BP Alaska. Judd Miller, Jr., Production Manager, Western Division Exxon Company U.S.A. Bob Swetnam,.District Sand man, Phill: Petroleum Company. Cliff Richard, Amerada Hess Corporati~ Bob Kubik~ Mobil Oil Corporation. · R & R COURT REPORTERS B2~ ~Nr. BTH AVENUE, SUITE 5 50g W. ~RD AVENUE 277-0572 - 277~573 27~9322 ANCHO~GE. A~S~ ggSOl ,ps 1 9. $ 5 $ ? 10 11 1~- _ 15 15 15 . 17 ~5 . . o. APPEARANCES (continued): Clyde Cotton, Exploration Supervisor, Alaska Operations, Getty 0il Company. Jerry Sawyer, Consultant, Placid Oil Company. R ~ R COURT REPORTERS S25 ~Af. BTH AVENUE, SUITE 5 ~09 1ff. 3RD AVENUE 277-0572 -- 277~573 274-9322 ANCHO~GE. A~S~ 99501 O' 1 5 6 "7 8 9 10 11 ].2 1,3 14 15 16 1'7 18 19 20 21 25 MR. BURRELL: Good morning ladies and gentlemen. This is a hearing of the Alaska Oil and Gas- Conservation Committee.. My name is Homer Burrell, I'm Chairman. To my right is Tom Marshall, who is Executive Secretary and a member of the Committee. To.my left is Hoyle Hamilton, Chief Petroleum Engineer for the Division of Oil and'Gas. He is also a member of the Committee. This hearing was called for two purposes. One, it was in response to Atlantic Richfield's re- quest and secondl'y,'it was on the motion of the Committee, it- self. The application of Atlantic Richfield was for an exceptic to Rule·2 of Conservation Order number 98-B to permit the drilli of two wells per governmental section on forty sections in the Prudhoe oil pools in the Prudhoe Bay Field. They also requested _ footage Spacing changes for these exception wells. Upon its own motion, the Alaska Oil and Gas Conservation Committee indi- cated it would seek information as to why an exception to Rule 2 of that Conservation Order should not be changed to permit 320 acre spacing within the entire 'pool and would also inquire as to the progress of unitization negotiations for the field. The fo.otage spacing proposed by Atlantic Richfield for the forty sections is 2,000 feet between wells, to the same pool, the Prudhoe Pool, and 1,000 feet between a well and a property line where ownership changes. *This hearing is held pursuant to Title II, Alaska Administratio~i~Code -- The Alaska Admin- istrative Code, Section 22.540 andnoti ce of it was published R · R COURT REPORTERS 825 W. 8TH AVENUE. SUITE 5 509 W. 3RD AVENUE 277~572 - 277-0573 274-9322 ANCHO~GE, A~S~ 9950~ --2-- *'-.9 r. . 1 2 3 4 5 6 ,/ 8 9 10 11 12, 15 .. 15 18 ~-0 ~-1 0 --3-- ' in the Anchorage Daily News on November 2, 1974. Before procee= I would ask, since this is being recorded on at least two tape recorders, I'll have to check the audience to see if there's any more going, I'd ask that whoever speaks please identify him- self to the record so that the young lady can benefit from the identity of the epeaker, when she gets this typed up. I would add something with respect to why the Oil and Gas Conservation Committee made its request with respect to this hearing. Our primary concern is first, getting information as to why the 320 acre spacing would or would not be a good idea for the en- tire pool from the standpoint of reservoir mechanics. Secondly we're interested in c6'~relative rights of those people who woulc not have 320 acre spaces under the proposal. And furthermore, we'.re interested in correlative rights if they don't have time tO build their facilities, drill, their wells, etcetera, prior to production without unitization. We feel it could be a serio~ problem there which might impair production if it's not unitiza- tion, or might require efforts by the State under either /ts conservation -- Oil and Gas Conservation Statute, or under provJ sio'ns of the lease, or under legislation we have yet to see to require unitization. That is our primary interest. And having so'stated, I would ask Atlanti~ Richfield to go ahead with thei] presentation as the applicant. And I would also state that aftE the hearing is over, that -- I don't mean after the hearing is over, after the testimony and questions from the C~mmittee are R & !~ COURT REPOI~TERS AVENUE. SUITE 5 ~09 W. 3RD A~NUE · 77-0572 - 277-0573 274-9322 AN~O~GE. A~S~ 99501 ing, i- 1 2 $ . :8 · 9 .- 11 . . I§ 15 17 . ~.0 -. -21 · , 0 · . -4- ... over with, we would welcome questions or statements from people in the audience. If there are going to be statements relating to the subject matter of the hearinq,.we would ask that they be qualified as an-expert ·witness. ~f'.you want to ask qUestion: we prefer they be asked of the Committee so we can avoid un- necessary or redundant questions to the applicant. And that's all I have to say. Atlantic Richfield may commence if they wis] MR. SCOTT: Mr. Chairman, members of the Committee, I'm John Scott from the legal division of Atlantic Richfield Company. We will present two witnesses toda' who will cover all three of the matters raised by your order an call·: of the hearing. The one matter raised by our application and the two matters raised ·by your own motion. The first witne~ will be Mr. Paul Norgaard, District.Engineer for Atlantic Rich- field Company's North Alaska District. The second witness will be Dr. Howard Slack, our Vice President and resident Regional Manager here in Alaska. Mr.' Paul Norgaard will be speaking as a technical witness, an expert witness. I assume, unless you voice some objection, that you will accept him in that capacity on the basis of his prior appearances before you as you've done before. He is a petroleum engineer with a great deal of experi. ence in Alaska. And being very familiar with the Prudhoe Bay Field, I can assure you he's no less qualified than the last time he appeared before you. Of course, Dr. Slack is appearing as a manager and officer, and as we all know, managers~ don't R ~¢ R COURT REPORTERS 277'-0572 -- 277-0573 2?4-9322 ANCHO~G~ A~S~ 99501 *{ . .'7 8 9 10 11 /2 16 17 18 . © -5- have to be qualified -- (GENERAL LAUGHTER) --'I'm not sure I said that exactly right. So with that, I wil2 present to you Mr. Paul Norgaard. MR. BURRELL: Unless there's an ob- jection, we'll accept Mr. Norgaard's qualifications as an expert witness, since he's previously so qualified. MR. NORGARRD: This is Paul Norgaar( speaking now in the testimony. Atlantic Richfield Company, as operator for itself,and Exxon Company, U.S.A., has requested an exception*to~Rule 2 of Conservation Order No. 98B; as Mr. Bur rel**justso stated. This order, if approved, would permit drill: completion, and production of two wells per governmental sectioI on forty selected sections. The sections are:** 1 through ... ' ., 4, 11 and 12, Township 10 North, Range 14 East. Sections 25 an( 26, 33 through 36, Township 11 North, Range 14 East. Sections I through 12, 14 through 18, Township 10 North, Range 15 East. And Sections 26 through 36, Township 11 North, Range 15 East. MR. BURRELL: M~. Norgaard, excuse me. Mr. Marhall called to my attention that we forgot to swear · you in. Since you've only read your application to date, I don think there's room for chicanery, so if you would stand, Mr. Marshall will swear you in. MR° MARSHALL: In the matter now aG hearing, do you swear to tell the truth, the whole truth and R & R COURT REPORTERS 825 W. 8TH AVENUE. SUITE 5 509 W. 3RO AVENUE ;~??-0572 - 277-0573 ~74-932Z ~CHO~GE. A~S~ 99501 ng, 1 2 $ 4 6 ,/ 8 9 10 11 12 13 1§ 15 Ir/ 18 nothing but the truth, so help you God? MR. NORGAARD: I do. MR. MARSHALL: Thank you. You may be seated. tion. .. MR. BURRELL: sorry for the interru MR. NORGAARD: A.R.Co., as operator of the eastern half of the proposed.unit for the Prudhoe Bay Field, drilled sixteen development wells during 1970 and 1971 and then discontinued development drilling. Now, with the pipeline approval and initial production expected during 1977, we have resumed development drilling with one rig. We will add a second rig sometime this winter. ~he plans we are currently following are for the full development of our operating area,. are based on a unitized operation. The location and timing of all wells and all surface facilities currently being designed and installed are based on a unitized operation. Unitization discussions are now in progress and A.R.Co. is actively support these di- -- these discussions. We expect the unit to be forme¢ before the start of prOduction. Thus, our requested exceptions to the current field rules covers our drilling plans to start of production. Our development plan for the eastern half of the proposed unit has been formulated durinq the past several vears. The surface facilities will be transported to the Slope durinq the summer barqe season of 1974, '75, '76 and '77. We'll R & R COURT REPORTERS 825 W. ~'H AVENUE. SUITE 5 50g W. ~RD AVENUE ~'77-0572 -- 2~7-057~ ~74-9322 'ANCHO~GE. A~S~ 9950i .ng 1 4 § $ ,/ 8 9 10 11 12 0 16 ,. .. · 1'/ 18 , 19 look at the overall schedule in a few minutes. Our development drillin~ plan, as mentioned earlier, beqan last summer and qrow~ to a two-development rig, one or-two workover rig.*program by thc summer of 1975. This development drilling program does require an exception to Rule 2 of Conservation 98-B. as indicated In the followinq discussion, I will first cover A.R. Co.'s de- velopment plan as it relates to well location and then discuss the effect of our surface facilities installation schedule on our drilling program and thus,, in turn, on our requested excep- ,tion. First, our plan provides for*initial development wells to be drilled where the qross oil column is more than 200 feet~ thick. Studies have indicated that these wells will be long life, good productivity wells. Oil columns thinner than 200 feet lying both upstructure and downstructure of this core area will probably be drilled later. The number and location of the~ wells Will depend on future studies and on the early production performance of the field.- Next, well tests, analyses of these tests, and studies using*a radial numerical simulator indicate that initial production rates of 10 to 15 thousand barrels per day can be expected from the wells drilled within this 200 foot thick oil column. Exhibit numbcr 1~ which I'll show you in a moment, summarizes the test data taken in the A.R.Co. operated area since the last Field Rules Hearing. Can somebody catch a light or two if they know where? (.Witness showing slide.) On · this -- W~.ii, the two wells that have been tested are drill site re R ~: R COURT 825 W. 8~ A~NUE. $UITE ~ 509 W. 3RD AVENUE 277-0572 ~ 277-0573 274-9322 ~CHO~GE. A~S~ 99501 8 9 10 11 I3 14: 15 16 1'/ '19 21 24: O . 1-1 and 'our drill site' 1-3 well. The two wells that are current actiVe in our operating area in association with the ~Prudhoe topping unit. I won't cover all the data there, I think you can see it. And we will provide you with a copy of it followin¢ the hearinq. The imDortant factor is missinq. (Witness readju~ slide.) Is on the right hand side, and there's a productivity indices~ 18 and 28, these are verv similar to the indeces that have been shown at Dast Field Rules Hearinq fo~ Sadlerochit well Can we go ahead and have* the'lights.again?- Thank.you.· Since.th have been only a limited number of production tests, our studie~ cannot be considered precise. However, we are confident that the 10 to 15 thousand .barrel per day, production rate from these wells is a reasonable expectation. The surface facilities for the Prudhoe Bay Field to be installed in'the A.R.Co' operated area, will be barged throuqh the summer -- well, they began last summer and will continue through the summers of 1975, '76, · and '77. On the next exhibit, which I'll show in one second, ~I have shown a simplified schedule of these surface facilities and their installation. (Witness Showing slide.). You'll see · that the facilities have been broken in to three ~rouDinqs -- .. 'three major q~ouDin~s. We have the central compression plant area, the flow stations and the pipeline system. These have been further broken in to three sub-divisions, increments, if you will, I won't deal with the central injection Dlant,'I won't qo in to details of the central injection plant or the ly ts Se .~re R 8~ R COURT REPORTERS 825 ~V. 81'H AVENUE. SUITE: 5 509 ¥~'. 3RD AVENUE 277~57Z -- A77~573 274-9322 .'' ~CHO~GE. A~S~ 9,SOl ' . - ~ .,. ,,. .** ,,. . . '~...'*~ . ~',. ._ .... . 1 $ 5 6 8 9 10 11 12 13 1~t 15 16 1'/ 18 19 20 21 23 "~.~ DiDeline system, since they don't directly affect our request. However, the flow stations, do affect the request and I will discuss them very brieflv. You can see on Flow Station 1, we are currently desiqninq, fabricatinq and will be shiDDinq this increment summer barqe season of 1975. This then will be erectE and installed on the Slope and should be operational by mid 197( Flow Station 2, which we are currently workinq on in the desiqn purchase area, will follow Flow-Station 1 one year later. Flow Station 3 will then follow one year later. Thus, at production startup in mid 1977, we will have two flow stations operational Flow Stations 1 and 2. These two flow stations are desiqned to Drocess 360 thousand barrels of production. At startuD we therefore· will have desiqn capability of 720 thousand barrels per day in our operating areas.. This, combined with BP's will give the field a processing capacity of 1.2 plus or minus'milli~ barrels Der dav by mid 1977. This will then increase to a maxi- mum of aDDroximatel¥ 2 million barrels Der day of Drocessinq caDacitv by mid '78. Could I have the liqhts aqain, please? I need to see what I forqot. Let's now look at the well re- quirements to provide this 360 thousand barrels Der dav of capacity for Flow Stations 1 and 2 at startuD in mid 1977. I'v( already discussed-our 10 to 15 thousand barrel Der day exDecta- tion for our -- a well's initial rate. Assuminq an averaqe of 13 thousand barrels a ~av, 27+ wells will be required for each flow station to provide 360 thousand barrels Der day of design R · R COUR~ REPORTERS B25 W. 8TH AVENUE. SUITE 5 509 W. 3RD AVENUE .. 277-C)572 -- 277~573 274-9322 5 6 ? 8 9 10 11 /2 13 ,15 16 1'7 18 19 20 21 capacity. We cannot complete 27 wells within the core area, 200 foot of the field and comply with the existinq spacinq rule of 1 well Der qovernmental section. We, therefore, are reGuestii an.exception to this rule, 2 wells Der Governmental section. Exhibit 3, which I'll show in a moment also, shows the excep- tions -- the.location of the exceptions we're requestinq. Let me trouble someone one more time. This will be the last time. Thank you. In red, we have the areas or the sections where are current plan calls for two wells Der qovernmental section withi~ the Flow Stations 1 and 2 areas. The central area between the two dark black lines, is the area in which we'll produce in to Flow Station 1. The eastern area will Go in to Flow Station 2, and the'western area Goes in to Flow Station 3. Additionally, in pink, we have requested exception for these sections. This is to provide some flexibility. We can use flexibility for several reasons. An example for today, we will be drillinq .on the west bank of the Sag River and we currently are drilling on the west bank of the Saq River. We choose not to drill on the east bank of the Saq River until the river has frozen and/o] we have a bridqe. Thus, we will' not be in a position to drill on the east bank of the Saq River until the winter season of "'75-'76. Since we don't know precisely how lonq it will take to drill wells, we could wind up not havinq a particular locati, to drill a well-in towards the end of "75. Also, we don't know exactly when the river will freeze up so we can qo across it. R & R COURT REPORTERS · 25 W. 8TH A%/'~NUE. SUITE iS 509 W. 3RD AVENUE 277-0572 -- ~77-0573 ~74-9322 ANCHO~G~ A~ ~n 1 2 3 4 5 6 8 9 10 11 .- 15 18 19 ~-0 © Thus, to qive us some flexibility, we.do prefer to have some sections available to us to drill two wells per qovernmental .. section where we currently do not plan tO drill these wells. The area shown in yellow is in the Flow Station 3 area, as I've indicated. We will be drillinq in this area prior to oroductio] startup in order to have the 360 thousand barrels per-day~..produc capacity by mid '78. We do need to begin development drilling in 'this area prior to production startup and we need to drill two wells per governmental section in those selected sections. Our-drillinq plan calls for that. I guess that's all. Could you turn the lights back on? Thank you. In summary, I am requesting only spacing exceptions required prior to production startup in mid '77 since unitization is expected before that time. Atlantic Richfield has prepared a detailed plan of de- velopment based on a unitized operation. This plan provides . for startup production from only Flow Stations 1 and 2 and 360 thousand barrels per day from each of these flow stations. At least 27 wells are required to provide 360 thousand barrels of processinq capacity for each of these flow stations. These wells cannot be completed and comply with the existinq sDacinq order of one well Der qovernmental section. Therefore, we are requestin~ two wells per qovernmental section in the forty selected sections. We are recuestinq exceptions beyond our immediate needs to provide some flexibility to our plan. Let me qo on then to your first ~uestion which you stated in your R & R COURT REPORTERS ~25 w. 8TH AVENUE, SUITE 5 509 W. '~RD AVENUE 277-0572 - 277~573 274-9322 ANCHO~G~' A~S~ 99501 :ion 1 2 3 5 $ ? -8 9 10 12 15 16 1'/ 18 19 2O 21 22 23 2'~ 25 -12- Notice of Public Hearinq where vou will seek information as to why an exception of Rule 2 of Conservation Order 98-B should not be chanqed to permit 320 acre sDacinq for the entire Prudhoe Bay Pool~ Atlantic Richfield Company has no objection to Prudhoe Bay Pool sDacinq of 300 -- of two wells Der ~overn- mental section. In fact, we seriously considered requestinq such an exception. We chose to limit our request, however, to startuD well requirements based on our current Dlan of develop- ment. We wanted to qive maximum assurance to all Prudhoe Bay Pool owners that this plan, which was discussed.with them, woul, not be chanqed without further discussions. That ends mv testi. mony. MR. BURRELL: Thank you, Mr. Norgaa Either Mr. Norgaard Or Mr. Scott, what is your' procedure? How would you prefer it? Would you prefer questions of Mr. Norgaar, at this time, or would you prefer we wait? MR. SCOTT: We prefer entirely to · your pleasure on that, Mr. Chairman. - ... 'MR. BURRELL:. Well, why don't we · · let yougo ahead with your entire presentation. MR. SCOTT: Fine. MR. BURRELL: Because something we might have asked Mr. Norgaard might be covered by Mr. Slack. MR. SCOTT: Very good. MR. SLACK:. Mr. Chairman, members R 6: R COURT REPORTERS · 2~ w. ~rH. AVENUE. SUITE ~5 ~09 W. :~RD AVENUE 277-0'~72 - ~77~573 274-932Z ~CHO~G~ A~S~ ~501 :d. ,/ 1 2 3' 4 5 6 ? 8 9 10 11 12 13 14 · 15 16 1'/ 18 -.. 19 2O 21 24 -13- Of the ~Dmmittee, my name is Howard Slack. I am a Vice Preside] of Atla~t_ic Richfield Company and Resident Manager of our Pro- ducing ~ivision's Alaska Regions, .I Wish to report to you this morning ~n the progres that is being made toward unitizing the Prudhoe Kay Field. To that end, I will review activities in two are~, actual operations and secondly, unitization neqotia- tions. First, reqardin~ operations, BP and Atlantic Richfield ComDan¥ aqreed at an earlv date in anticipation of unitization to sub-~ivide the field into two.approximately 'Equal operating- without regard to lease ownership. BP and Atlantic Richfield Company~ointly prepared an initial field-wide development plan which czdLIed for wells to be drilled on all sections within the 200 foo~ qross isopach line. This Dlan was reviewed and aDpro' bV all ~ners in the prospective unit area. For the BP operate~ area ~.inludes the A.R.Co.-Exxon and the Mobil-PhilliDS-socA~ acreaqe ~s well as BP acreaqe. BP has requested and has receiw spacin~ exceptions on the A.R. Co.-Exxon acreage as well as on their c~m. - · MR. BURRELL: Excuse me, Mr. slack. Mr. Marshall again reminds me we forgot to swear you in. If. you cou3~ stand and be sworn? We miqht make it retroactive, to. (GENERAL LAUGHTER) MR. MARSHALL: Please raise your right h~t. In the matter now at hearinq, do you Swear to tell the tru'~, the whole truth and nothing but the truth,so help vo~ R 6: R COURT REPORTERS 277-0572 -- 277~573 27~9322 AN~O~GE. A~S~ 9950~ ~t ~eas 'ed 1 2 3 5 6 8 9 10 11 12 13 14 15 16 17 19 20 21 23 God? start over? -14- MR. SLACK: I do. MR. MARSHALL: Thank vou. MR. SLACK: Would you like me to MR. BURRELL: No. Please proceed. MR. SLACK: For the Atlantic Rich- field ~operated area, which.includes the A.R.Co.-Exxon, BP, and the Mobil-Phillips-SOCAL leases, our plan provides for wells to be drilled on the A.R.Co.-Exxon and BP leases, and we are, as you've just heard, today requesting spacing exceptions on the BP leases as well as'on the A.R. Co.-Exxon leases. The concept of unitized operation is also being followed in the design, and installation of surface facilities. BP is designing and building a central power plant ~hich will supply electrical power for both operating areas. /~R.Co. is designing and building a central compression plant to compress all gas from the Prudhoe Bay Pool for injection. Additionally, both operato are sizing and locating production facilities to process the 'total volume of produced, fluid from the Prudh0e Bay Pool. All of these plans have been coordinated between the two operators. Some specific examples are the sizing and location.of oil and gas gathering, lines, flow stations and qatherinq centers, the power plant, and the central compression plant° In addition to this coordination between the operators, all the Prud. hoe Ba' R 8r R COURT REPORTERS ~,77.,0572 -- 277~573 274-9322 ANCHO~E. A~ 9~501 ! 3 4 5 6 ? 8 9 10 11 12 ...... 14 15 15 1'/ 19 ~-0 '~-1 © -. Pool'owners have been contacted at appropriate times regarding thise plans and other plans for the development and operation of the field. Routine meetings of the Operations Subcommittee have been held to keep all companies abreast of field activities and periodic meetings of the Environmental Subcommittee have also been held. Additionally, the two operators have been fur- · nishing, on a routine basis, all the owners with basic log, core, test, and fluid property data as it comes available. Als( all non-Operator requests for information that have been receiv( have received the prompt attention of the operators. Now, for the second point regarding unitization negotiations, I would like to briefly review this effort since its inception five years aqo.. You may recall the two Letters of Intent were siqne4 'The first, by the principal field owners, A.R.Co., Exxon, and BP, and the second, by all of the owners in the prospective are~ These two documents were submitted durinq the Dast Field Rules Hearings. Now followinq the siqninq of these two documents, pre-unitization committees were formed and progress was rapid. Work was directed toward obtaining fair and equitable treatment for all. As it became a~Darent durin~ the end of 1970 that the pipeline construction would be delayed, unitization discussions slowed. Substantial effort, however, continued as evidenced by the many meetinqs of the various subcon~ittees. These sub- committees include the Accounting, Tax, and Reservoir, as well as the Operations and Environmental subcommittees mentioned ear. R & R COURT R£PORTE~R$ 825 W. 8TH AVENUE. SUITE 5 50~ W. ~RD AVENUE 2"7,-0572 -- 277-0573 ~74-9322 ANCHO~G~ A~S~ ggsoI _ .. O ! 2 3 4 5 6 ? 8 '9 ., 10 11 .13 . 15 16 17 18 19 20 -,-: 21 .2,5 -16- Toward the end of 1970, it also became apparent that the major · problem confronting unitization was an equitable relationship between the gas cap and the oil rim, the two participatlng area: established in the Letter of Intent. Now.these two DarticiDatil areas were established because of the .difficulty of equatinq the relative, value of the gas cap and the oil rim in forming a sinqle participating area. With the establishment of the two participating areas agreement must'be reached on a procedure whiCh will DroDerlv credit each DarticiDatin~ area with its liquid and qas production. Now, since the bulk of the Prudhoe Bay Pool reserves will be produced throuqh common facilities, 'this becomes a complex problem of identifvinq condensate in a predominantly oil-stream and solution and free qases of near identical composition. Additionallvo costs for each facility, and in some cases only portions.of a facility, must also be allocated. Now, since 1970 work has been continuing to resolve ., this problem. Naturally, prior to the granting of the pipeline ~ .. ~perm~t., work---and--.progress Were' at a' reduced· _. rate. However, proposals were exchanged and discussions were held on several occasions between the end of 1970 and the grant .of the permit -- the pipeline permit early in 1974. Now, follo the approval of the pipeline permit, unitization work accelerat It was recognized that there was much work to be done and sub- stan~ial effort was needed ~mmediately. However, the establis5 ment of a proper relationship between the gas cap and the oil R &: R COURT REPORTERS 8~'~S W. 8TH AVENUE, SUITE ~ BOO W. 3RD AVENUE 277-0572 - 277-0573 274-9322 ANCHORAGE. ALASKA 99501 Lng ~ing ,~d. , ., 5 $ ? 9 10 11 13 -, 15 17 .18 ~0 . z -17- .. . rim continued to be the essential and major requirement in unitizing the Prudhoe Bay Pool. Since the Management Committee of all owners of the Prudhoe Bay Pool had charged the major interest owners in late 1970 with preparing a recommended gas cap oil rim relationship, discussions were reinitiated by A.R.C¢ BP, Exxon, and Sohio in January of this year and many meetings have been held. On six occasions meetings were.held at the sen: management level. Additionally, six meetings of technical people were interspersed with the management meetings. Also, during the year five proposals have been exchanged and differen¢ in positions contained in these proposals have narrowed sub- stantially. The problems are complex, as indicated earlier, but progress to date makes us optimistic that agreement will soon be reached. A measur~ of this complexity is the time expended. A fair estimate of'just Atlantic Richfields' time committment to these 1974 discussions and proposals is. 12,000 .. man-hours. I would prefer not t° discuss the content of these proposals or the discussions in any further detail, since any public comment on private negotiations could run t-he risk of impeding progress. And certainly, we are anxious to complete the current efforts and move forward with the other unitization issues. To this end the Prudhoe Bay Management Committe% which includes all owners in the prospective unit area, has been in- vited to a meeting next week to review past unitization discus- sions and future unitization scheduling. An estimate of future -. R & R COURT REPORTERS · R~ W. ~H AVENUE, SUITE ~ BO9 W. ~RD AVENUE R77~572 --277~573 274-9322 or es 1 2 4 6 8 9 10 11 12 13 14 15 · 16 18 19 20 21 .24 progress and thus timing for'completing these negotiations and for submitting the Unit Agreement and Operating Agreement is hazardous to predict, part.icularly when considering that 13 companies will be participating in the negotiations. Atlantic Richfield's timetable, however, calls for sufficient progress to request a unitization hearing early in 1976. In summary, the two operators' plans have been coordinated and are designed for a unit operation. Work has progressed steadily toward resolution of the proper relationship between the gas cap . and the oil rim. Progress has been substantial and the differer have been greatly narrowed. Atlantic Richfield is optimistic that these negotiations will soon be completed and discussions can move 'to the other issues that must be resolved prior to . preparing the final documents. Finally, a meeting of the Management Committee Of all Prudhoe Bay Pool owners has been called to discuss unitization status and schedule. And that concludes my formal testimony, Mr. Chairman. MR. BURRELL: Thank vou, Mr. Slack. .. . MR. SCOTT: Mr. Chairman? · MR. BURRELL: Mr. Scott? MR. SCOTT: One Other matter. I have here 3 duplicates of the slides presented by Mr. Norga~rd in a form that will be more convenient for your record, and I'd like to submi~ them to you. MR. BURl{ELL: I'd like to ask Mr. R & R COURT Ri'PORTERS 82~ W. 8TH AVF-.NUE. SUITE ~$ 509 %q. 3RD AVENUE 277-0572 - 277-0573 274-9322 ANCHORAGE. A~S~ 9950i ces © 1 2 3 5 6' 8 9 10 11 12 .. 15 18 ~-0 ~-1 © Norgaard, were.these that are beinq offered as exhibits, were these prepared, under your direction? bR. NORGAARD: Yes. MR. BURl{ELL: Are you qoinq to offe them as Atlantic Richfield's Exhibits A, B, C? MR. SCOTT: Well, they're already labeled A.R.Co.'s Exhibits 1, 2, 3, if that's -- MR. BURRELL: We'll accept them. MR. BURRELL:. We'll enter those in the record as A.R.Co.'s Exhibits 1o 2 and 3. (HEARING EXHIBITS #1, 2o 3 marked .. for identification.) MR. BURRELL: in the order in whic they were presented on the board -- on the slide screen. Do you have anvthin~ else, Mr. Scott? MR. SCOTT: That concludes our MR. BURRELL: That concludes A.R.C¢ testimony? . ' .,. .MR. SCOTT: That's correct. MR. BURRELL: Direct testimony?. MR. SCOTT: That's correct. MI{. BURRELL: Mr. Hamilton, do you have some questions of either of the witnesses? MR. HAMILTON: This is Hamilton speaking. I address this qUestion to Mr. Norqaard. It's my R 8¢ R COURT REPORTERS 8~'~ W. ~ AVENUE. SUITE 5 509 W. 3RD AVENUE 277-057Z -- 277-0~573 274-9322. ~CHO~GE. A~S~ 99501 © 1 2 3 · 5 6 8 .9 10 11 1§ . . I$ 17 18 .. lg ~.0 ~-1 understanding that you're planning for a startup of production of approximately 1.2 million barrels a day, is that correct? MR. NORGAARD: We're -- production is beinq planned compatible with Alveska's capabilities, yes. MR. HAMILTON: And BP earlier testi fie~ in.February that they plan to take 1/2 of that offtake from their oDeratinq area. Is this consistent to your plans? MR.. NORGAARD: Yes, sir. MR. HAMILTON: Has vour company made any studies relatinq to the'well density in the Prudhoe Bav Oil Pool that you could comment on? . . MR. NORGAARD:' Yes, we have. We've made studies that are -- carry a wide ranqe of reservoir manaqe. ment Dlans from natural depletion to full pressure mainentance. And these wells that we are reauestinq, the exceptions that we are asking for are compatible with all of these plans that we've studied. . . * · .MR. HAMILTON: In these studies hav~ you come up with any maximum rate that the pool might sustain with the particular density of wells? MRoL.Norgaard: We have not specific~ addressed that question, but naturally as fall out from the StuE we can make observations. And I would say today that the maxim rate'from the field that we have seen, would be in excess of an* rate that we would'recommend takinq from the field. R & R COURT REPORTERS 525 W. BTH AVENUE, SUITE 5 509 W. S~D AVENUE 277-01572 -- 277-0573 274-9322 ~CHO~GE.'A~ 9950~ lly [Y, 1 2 § 6 ,/ 8 9 10 11 12 13 1'~ 15 16 1'/ 18 19 20 21 22 23 2,~ 25 -21- MR. ~AMILTON: ~We're talkinq todav~ about 320 acre sDacinq or two. wells Der section. Can you possi ~foresee an even denser spacinq necessary? MR. NORGAARD: Yes, we do. But as in our first application, which we withdrew, we did seek excep- tions which would have put wells on 160 acre sDacinq. And we definitely see 160 acre sDacina as required in a reasonable period of time. I can't define reasonable other than just bracke*c it saying 5 to 7 years, something in that range. And we definitely see the need for 160 acre sDacinq and it may be that wi~h additional studies, with additiOnal data and with reservoir performance itself, we could go to even closer spacin! MR. BURRELL: He hasn't given up. ~e wants to.regroup. This is Burrell, and I have a question. Paul, as I understood your remarkS, you said a rate of 1.2 mill barrels a day on July 1, 1977, at.*~ star,up. Did you mean that or would be the throughput ra~e,_'/did you mean that would be the -- you would have the wells and field facilities on line so you could make that rate? Or what exactly did you mean? MR. NORGAARD.: This is Paul Norgaar. We mean that when Alyeska savs that the line is capable of taki 1.2 million barrels a day, we will have it there, which at this point in time is mid 1977. For simplicity, I may have said .July 1, 1977. That's -- that's the concept. We will have the 1.2 million barrels per day of processing capicity available R & R COURT RE:PORTE:RS 825 W. 8TH AVENUE, SUITE 5 E0g ~r. 3RD AVENUE 277-0572 - 277-0573 274-9322 ANCHO~GE. A~S~ 99~01 1¥ on in the field when the pipeline is commissioned. MR. BURRELL: The reason I asked this is we:re wearinq another hat. We make revenue forecasts . for the State and we've got 9 months before it gets up to 1.2 million. That's shake-down-time for these various production facilities as w~ll as pumpinq stations and pipeline valves, terminal at Valdez and everythinq else. -' MR. NORGAARD: Please include our _ .. facilities. ~.' ', ~' ;~ ,i ~. . '.~ _'.~ ..~.~ -..'MRi BURRELL: I thouqht I did. I -. . think they miqht need a little shake-down.. And I just wanted to verify what you said. Is it -- as I ,~derstand it, that .- ._ you think you can. if Alveska's readv to aet it, vou can throw . . 1.2' million in to the line mid'19777 yes, sir. . . _ Mr. Marshall? MR~. .NORGAARD: This is our plan, . . . . .. . ~ MR. BURRELL: Okay. Thank you. .. MR. MARSHALL: I'm Tom Marshall speaking. I have one question for Paul Norgaard. Paul, have your well spaqing studies that you just referred to, have .' they been coordinated with all the other 13 operators -- or companies rather, involved in the field? MR. NORGAARD: This is Paul Norgaa again. We, naturally, went ahead and did many studies. And I~ 8~ R COU~T REPORTERS' 825 W. 8TH AVENUE. SUITE 5 509 W. 3RD AVENUE 277-0572 -- 277-0573 ~7~9322 ~CHORAGE. A~5~ 99501 9 10 11 13 14 15 16 17 18 19 20 21 23 24 -23- most of our studies, independently. We have reviewed these -- or Dortions of these studies with all 13 comDanieso yes. Does that answer your question? MR. MARSHALL: Yes. Does -- do these studies which you referred to -- are they dependent -- that is the development of further studies on let's say, well spacing, are they developed -- dependent on development of the field? In other words, do you need to acquire more data from the field before let's say, you talk in terms of 160 acre spaci g? What -- what in essence then is preventinq you from appl¥inq for 160 acre spacing at this time? MR. NORGAARD: Let me say in the -- any reservoir simulation study that is conducted without Droduction histor~ to. match, there are different interDrE · of its Validity. Every technical person has certain background certain understandinq that qives him a confidence level of the study. Naturally, iust within our own company, there are dif- · ferences of opinion, 'of confidence levels of our study. We are confident -- Engineering and I believe our Management, is confi dent that we can today design and predict the 160 acre spacinq requirement qiven a reasonable time frame. We can't predict the exact day at which we need 160 acre spacinq, but we can say we're confident that 160 acre spacinq is required within a reasonable time frame. MR. MARSHALL: In other words, R · R COURT REPORTERS 8~'~ W. ~ AVENUE. SUITE ~$ ~O9 w. 3RD AVENUE 2;J'7-057.2 - 277-0573 274-9322 A~CHORAGE. A~L~SKA. gDSO! 1 5 6 8 9. 10 11 12 - 15 17 18 ~-0 21 -24- your -- your application for 160 acre sDacinq will be deDendent on acquirinq more reservoir performance data? And Droduction data? MR. NORGAARD: Certainly reservoir performance data will improve confidence level. I believe I misinterpreted your'question. The reason or the application -- the timing, for requesting 160 acre spacing, I believe, is really a unit decision, a unit matter. And it's best handled with the unit submission. MR. MARSHALL: Yes. This -- you're answerinq my question, I believe. Well, the underl¥inq purpose of it is, of course, that the unitization procedure, I believe, usually encompasses -- I'mean addresses itself at least to the matter, of well spacinq in a development plan, and it aDPears to me that our present hearinq tOday and possibly another futur~ hearinq on 160 acre spacinq would have somehow, rather magically been taken care of, let's sav, had unitization been a fact toda, And what I'm qettin~ at is for this reason and several other .. reasons which we haven't qotten in to, it appears that the earl~ the unitization, the less administrative problems we are qoinq to have with the Prudhoe Bav Field and, of course, I think the~ no one that disputes the underlying value of unitization as a conserva.tion measure. I notice in a letter which was written by a Mr. E. M. Benson on -- in 1969, on October the 29th, that he laid out a time table for unification, final form and execut~ R · R COURT REPORTERS 825 W. ~H AVENUE, SUITE 5 509 W. 3RD A~NUE 277~572 -- 277~573 274-9322 AHCHO~ A~$~ er e's 5 6 7 8 9 10 11 12 1§ - 15 17 18 . ~-0 © -25- of'April 1, 1970. And, you know, we know that the pipeline de- lay has been a factor,.but this was an executed unit aqreement in 1970 and -- and I would like to .hear a comment from you as to wh¥,J, in 1974, we still have many, unresolved problems. Our -- is unitization becoming more difficult as time goes on? MR. NORGAARD: I that -- that's an extremely difficult question to answer. MR. MARSHALL: I realize that. MR. NORGAARD: Everyone is ,the room · would answer it a little differently. We, firs~ of all, you indicated that it's very desirable to unitize early. And cer- tainly, we agree with that. I'm sure all companies -- all owne: s of the Prudhoe Bay Pool agree with that. It is desirable to unitize as early as possible. On the other hand, it's very important,..that all get a fair and equitable treatment in formin( the unit. * And in a unit as complex as the Prudhoe Bay Field, this is a monumental task. And it is a task that we addressed ourselves to early in 1969 and with anticipation of early pro- duction, were given a time table. Naturally, as you said, that time table did change as the pipeline was delayed. We now, aqain, have given ourselves a time table which Dr. Slack and this is I believe a realistic time table, certainly one tha we desire and hopefully, it will be acceptable to yourselves and acceptable to the other companies involved in the Prudhoe Bay Pool. Beyond that, I really don't know that I can answer R ~ R COURT REPORTERS IB2~ W. ~TH AVENUE, SUITE 5 ~Og W. :~RD AVENUE 2.?7-0572 -- 277~573 274-9322 ANCHO~GE. A~S~ 99501 1 2 3 4 6 ,./ 8 9 10 11 12 13 14 .. 15 -. _ 1'; . . . 18 19 20 24 0 ,. , your ~uestion more fully. MR. MARSHALL Thank vou. I had one ouestion of -- of Dr. Slack. Concerning your time table, you mentioned that you felt that your company would be in a pos. tion in earlF 1976 for a unitization hearing. Would you clarif' what hearing -- what type of hearing that would be, Dr. Slack? MR. SLACK: It's our plan that by early in '76, and by that we did mean the first quarter in '76, that we would have agreement amongst the 13 companies. And thai they, as a unit, would be asking for a hearinq before your Com- mittee. So that by that we would infer that agreement would be reached bv the end of 1975 MR. MARSHALL: . Would Vou expect a precise time table to -- that is, for further unit.'-- neqotiatiol to sDrinq out of your meetin~ this coming week with the other .13 operators? Would that be one matter on your agenda? · . MR. SLACK: It certainl¥ would be. · . ' _.. ~ MR. SCOTT~ Mr. Chairman, I -- Mr -. Marshall, if I may make one comment? I've been doing a bit' of · · arithmetic about Mr. Benson's prediction in 1969..- You could sa, that he predicted that it would be about -- that the unit agree ment Would be completed a year and a half ahead of the pipeline schedule at that time, and in that sense, our prediction hasn't changed a bit I don't think. We're saying essentially the same thing now. And I think, again, I'm merely magnifYing, what Mr. R & R COURT ~EPORTERS 82E W. 8TN A~NUE, SUITE 5 509 W. 3RD AVENUE 277~572 - 277-0573 274-9322 ANCHO~GE, A~$~ 9950! ' 1 2 3 5 6 ? 8 9 10 11 12 13 15 16 17 18 19 2O 21 22 23 2~ Norgaard has already stated, that the time table for all of thi is tied to the. completion of the pipeline and I hate to over .simplify things, but that probably hits the nail on the head as to the -- the real reason for the apparent long delay. MR. BURRELL: Thank you. Mr. Hamil~ have you regrouped? MR. HAMILTON: I have another questJ for Mr. Norgaard. This is Hamilton speaking. I assume that at startup that you'll have a qas injection capacity to handle the produced gas volumes to be injected in to the gas cap? MR. NORGAARD: That certainly is our plan. I miqht elaborate on that a little bit. On the schedule tha.t you have, you have the increment 1 and increment 2 in 'the ,central compression plant. They are to be installed and operable bv mid '77 and that will process gas from over a million and a half.-feet, 6f oil production, solution gas. .... '..~. MR. HAMILTON: So have you made anv studies -- well· first of all, back up a minute· since a.qas sales line for the Prudhoe Bay Field is somewhat uncertain as far as timing right now, also the route, have you made any stud on what the affect would be to the reservoir for prolonged gas reinjection say; beyond a 3 year period? Something longer thaz that? MR. NORGAARD: Yes, that ha~ been part. of our different reservoir management schemes that we' eval~ R & R COURT REPORTERS 825 W. 8TH AVENUE, SUITE 5 509 Wo ~RD AVENUE 277-0572 - 277-0~,73 274-9322 ANCHORAGE. ALASKA 99501 on · on ~S .., ated ._' 8 9 I0 .11 12 13 1,~ 15 16 1'/ 18 19 20 21 · . 24 25 -28- We have evaluated early and late qas sale. MR. HAMILTON: And do you foresee any adverse affect for a prolonged period of reinjection in cas~ the gas sales line isn't available? MR. NORGAARD: It's difficult to define "adverse." No, we don't see anythinq that is very -- thi is obviously detrimental'to the reservoir. MR. HAMILTON: Mr. -- Dr. Slack, you mentioned that next week you'll have a manaqement meetinq reqardinq your unitization efforts. Do you foresee an activa- tion of most of the committees shortly after this meeting? % · MR. SLACK: Ye~*, I -- I would cer- tainly anticipate that that would occur. MR. HAMILTON: Getting back to Mr. Norgaard again. In your reservoir studies, I think you mention¢ that you have looked at possible schemes of pressure maintenanc( and so forth. .Have you -- have your studies indicated a -- vet5 much of a response from the Aquifer? - MR. NORGAARD: Would you define "ye: much"? MR. HAMILTON: Well, I'll put it th~ way. In order to keep the pressure sufficiently high or not to drop the pressure extremely low, one way or the other, would it reouire injection of water in the Aquifer? MR. NORGAARD': Well, we see pressur( R & R COURT' REPORTERS ~25 w. ~ AVENUE. SUITE "~ ~og W. ~RD AVENUE 277.05?2 - 277-0573 274-9322 · ~NCHOR,.AGE. ALASKA ~gSO! 1 2 3 4 $ 6 ,/ 8 9 10 11 12 13 14 15 16 1'/ 18 19 : 21 24 -29- declining without augmenting the natural.water encroachment witl source water, yes. MR. ~AMILTON: Do you think the -- the ultimate operation of the field would require water injecti¢ in the Aquifer? MR. NORGAARD: Well, you must -- having done the studies that you have done, you must realize the data on the Aquifer is very sparse. And that before making · a prediction on that, it'd be awfully nice to have some produc- tion history. MR. HAMILTON: Yes. MR. NORGAARD: And I believe that with our studies today, it would indicate that augmenting the Aquifer is desirable. But here is a line where I guess I feel the simulation study without history begin to run the of being able to make a deicison on it. It's a 'little case, in my opinion, than looking at well spacing. .. MR. HAMILTON: If it was necessary, or you felt it was the proper type management for the reservoir to inject water up there, what time frame are you looking at for getting something installed in that type of an environmen~ an operating? MR. NORGAARD:-' To design, build transport and ship the facilities to the Slope, it would be in the order of 4 -- 4 years, possibly 5 years. R ~: R COURT REPORTERS · · 2~S %%'. 8'rH AVENUE. SUITE 5 BO9 W. :~D AVENUE 277-0~S72 - 277-0~73 274-9322 ANCHO~OE. A~S~ 99501 8 9 10 11 12 14 I$ 17 18 19 ~-0 ~.1 MR. HAMILTON: I see. I think that's all the questions I have. MR. BURRELL: This is Burrell again Dr. Slack, I have two or three questions for you about some of your. direct testimony. I think you commented that the operator~ were exchanging geological and reservoir information among them- selves and likewise, when the..non-operators requested this info] mation the operators gave those requests prompt attention. Did you give them the data along with the attention? MR. SLACK: It would be my under- standing that that was certainly the case, Mr. Chairman. I may ask Paul to'comment on that. He'd be more directly involve, in that. ~ MR. NORGAARD: This is Paul Norqaar¢ · . , . The data distribution does flow through me. And. we have provide all of the companies with routine log, core, tests, etcetera, date without their requests. On a routine' basis, we have just provided them with it as quicklv as it comes in to our hands. .. It is other information such as budgets, thin~s such as that that we provide on request.. MR. BURRELL: Thank you. I think that answers that bit of the question. I don't want to get in to any sensi[ive areas that might affect negotiations, therefor( I'm going to ask some questions and if you feel you cannot answ~ them, please say.so. And don't identify the Companies if you i~ ~ R C:OURT REPORTERS 825 W. B'rH AVENUE, SUITE ~ ~09 W. ~RD AVENUE ~77~57~ - Z77-0~73 274-9322 ANCHO~GE, A~ 99501 give me an answer. I don't want to know which of the five proposals in involved or anything. The first question would be is can you tell me whether or not it is Drobabl¥ or if it's de- termined it's going to be a grass roots unit, ie. from the lowest most producing formation to the top? That is all three identified pools? MR. SLACK: Yes, that still is the intent, as was stated in the Letter of Intent. That it be a' grass roots unit. Although we do recognize the imperativeness of getting the permotriassic-uhit uhi~ized. ~But~%'s ~ill 'the intent'~f0r a~ qrass roots MR. BURRELL: Secondly, has a unit boundary been agreed, to? Or is that still a matter that is open to further discussion? That is, the surface boundary, the exterior limits of the unit area? MR. SLACK: May I refer that to my qualified technicaI witness? MR. BURRELL: Sure. MR. NORGAARD:c This is Paul Nor~aa~ . We did provide you with the unit boundary in the draft of the unit agreement. I guess that was in 1970, yes, 1970. MR. BURRELL: Yes, that's riqhto MR. NORGAARD: Late 1970'. And we have not had any additional discussions amongst all the unit owners since that point in time, so I think that brin~s vou R ~ R CQURT REPORTERS ~2~ W. ~H AVENUE. SUITE ~ 509 W. 3RD AVENUE 277-0572 -- 277-0S73 274-~322 ANCHORAGE. ABSKA 99501 · ? 8 10 11 12 13 · '" 16 .. 1'/ 18 19 20 21 -32- to date on the thinkinq of the'unit participants concerning the unit boundaries. MR. BURRELL: Then I'll point out, as you know, the boundaries of the Lisburne Pool do not coincid( with the unit boundaries. Which means either the unit*should be changed -- the unit boundaries should be changed or the pool boundaries should be Changed~ Has this escaped vour attention? Were-you aware of this. MR. NORGAARD: I guess I'd have to admit I was aware of it, I hadn't realized that it caused a _ problem. MR. BURRELL: Well, the general philosophy in a unitization is that the entire reservoir is sup- posed to be -- reservoir, reservoirs, are supposed to be unitiz~ And it seems as though one or the other is wrong. Will this matter be discussed at the management meeting next week,, or do you have any knowledge of that? -* .. MR. *SLACK: I don't believe it's presently on the aqenda for the manaqement meetinq this week. But it certainly could be added and we will certainly consider the need for discussion of this at that time. MR. BURRELL: I Doint out that currently driilinq or the incomDleted wells.and wells that are proposed to be drilled to the Lisburne eastern portion of the field may ver~.well chanqe the boundary of Lisburne Pool anyhow R & R COURT RE:PORT£RS 277~572 - 277~573 274-9322 ANCHO~G~ A~S~ 99501 de · ,. .. . · · .O 1 4: § 6 ? 8 9 10 11 12 13 -14: 15 17 18 19 20 21 24: so this may be unnecessary at this time. But at the time that the final unit boundary is submitted to us, I think that we wou~ want to know that it covers the pools. We're going to have to move one or the other is.what I'm saying. Do you think that you can give a unified position after next week's management meeting as to one, whether it's a grass roots unit or not, two, as to its boundaries? MR. SLACK: Well, as I stated in mv testimonvo these thinqs are rather.hazardous to predict since there are so many comDanies that are involved. We certainly will -- will be doing our best at that time to reach agreement on as many of these thinqs as we possibly can. I'm afraid that the best answer I can give you.~at this time, Mr. Chairman. MR. BURRELL: I'll go back to one other thing before 1 come back to that. And that is you men- tioned the discussion as to two participating areas, one for the gas cap and one for the oil rim. As far as I know that's associated gas cap. These participating areas presumably~ with- out delving deePl~ in to this, would be -- relate between the working interest owners and not as to the royalty owner. Is that the correct interpretation of -- MR. NORGAARD: Yes, I'm certain tha~ MR. BURRELL: Back to where I was correct. a minute ago. We've thought about.holding this hearing record R & R COURT REPORTERS ANCHO~GE, A~S~ 99501 °.. 1 4 $ 6 ? 8 9 10 11 14 15 16 18 ~.1 -34- .' open briefly for a few days, a few weeks to see if we could get and answer from the management committee, even if it's an-answe] that-you can't answer at. the next week's meeting on those two questions I raised. Do you think it would be possible to get an.answer even if it is we can't aqree or can't make up our mind or it will take further discussions? MR. SLACK: Yes. MR. BURRELL: I realize when I say that, I know that's the answer I'll probably get, but I thought I'd try anyhow. Do you have the two questions? MR. SCOTT~ Tell you what we'd like to 'do is caucus and answer that one durina your intermission later on. one right now? minute break. MR. BURRELL: Well, shall we take _ MR. SCOTT: Fine. MR. BURRELL: Let's take a five . (OFF THE RECORD) R & R COURT REPORTERS 825 W. 8T'H A'V~NUE. SUITE · 509 W. ~RD AVENUE Z77..OS72 - 277~73 ~74-9322 ANCHO~GE. A~S~ 99501 8 9 10 1! .. 12 (_) i4, 15 . 19 20 21 24 © ,--35- '(ON THE RECORD) MR..BURRELL: We'll reconvene the hearing now. We had a question and there was a caucus on over here in responge to our question. MR. SLACK: Yes, Mr. Chairman. Thi: is Howard Slack again. We were a little hesitant in replying immediately to your request for keeping the hearing open in so far as it might affect our'operations and not reaching a n on the spacing aspect of the hearing which was really the main reason the hearing was set up in the first place. However, we -- we would.be agreeable to having the hearing record remain open until after our management meeting next week. And at that time, supplying you with a written statement of the decisions reached on the two questions which you raised. If the record could then immediately be closed thereafter, so that we may have the decision on the spacing exception. - MR. BURRELL: Dr. Slack, two things -. I'd add one question, to that and that is -- it is Mr. Marshall' question actually, could we have a new agenda, or the new sched le I should say?' The new schedule for unitization, accompli thereof? Whatever you -- if you come up with a new unitization schedule, like you indicated to Mr. M~rShall you thought you would do, -- MR. SLACK: That's right. MR. BURRELL: -- could we be provid, d R & R COURT RE:PORTE'RS 828 W. 8TH AVENUE, SUITE:, '~ ~$Og W. 3RD A~NUg 277~572 - 277-0573 274-9322 AHCHO~GE. A~S~ 9950~ ! 5 $ ? lO 11 19. 15 · . 15 17 .. with that information? -36- MR. SLACK: We would -- we would make that a part, too, of our written -- MR. BURRELL: That's three question or ~w MR. SLACK: Three questions. MR. BURRELL: -- request for infor- mation. And you tell us when you want the -- when you'd have your answer to us, and that's the day we'll close the hearing unless somebody has some other thoughts or subsequent testimony What day do you want -- pick a date. Next Friday's the 13th. MR. SLACK: That's 'a good date. -. ...... MR. BURRELL: Friday the 13th to close the -- Could we -- MR. SLACK: Wait a minute. No. · MR. SCOTT: Do it the first Tuesday following the 12th, whatever that works out. MR. SLACK: First Tuesday following the 13th. MR. BuRRELL: That'd be the 17th. MR. SLACK: 17th. MR. BURRELL: 'Now, that's Tuesday. 17th of December, 4:30-' local time? Anchorage local time. R 8~ R COURT REPORTERS ~2~ w, 8TH, AVENUE. SUITE 5 509 W. 3R~ AVENUE 277-0572 -- 277=0573 274-9322 ANCHORAGE. ALASKA 99501 1 2 3 4 5 6 8 9 10 11 12 15 14 15 16 17 ., · . 18 19 20 '21 -37- MR. BURRELL: Fine. Fair enough? MR. SLACK: Fair enough. MR. BURRELL: Keep the hearing reco open until then. Does that complete your comments and respecti~ questions? questions? MR. SCOTT: It does. .~LR. BURRELL: Do you have any more MR. HAMILTON: No. MR..BURRELL: Marshall, do you · . have any more questions? . MR. MARSHALL:. No. MR. BURRELL: I don't either. Is there anybody in the audience who wants to make a statement? '.I: so, will you come forward and identify themselves and use the microphone right where those two chairs are. MR. TAYLOR: My name is Glen Taylor and I'm here on behalf of2BPAlaska. Management doesn't have to be qualified to answer technical questions and lawyers just have to. be qualified to read, so I'll read my statement. MR. BURRELL: Excuse me, Mr. Taylor are you going to testify or rea~ a statemen[. MR. TAYLOR: I'm going to read a statement. R & R COURT REPORTERS · 2~ W. BTH AVENUE, SUITE 5 509 W. 3RD AVENUE 277.0~72: - 277-0573 27A-9322. ANCHORAGE, Al. ASEA 99501 MR, BUP~RELL: Thank you. MR. TAYLOR:' Mr. Chairman, members of the Committee, as I said, I'm Glen Taylor, I'm appearing on behalf of BP Alaska. And we wish to submit a statement indicatJ BP Alaska's position with regard to the Atlantic Richfield's request for an exception to Rule 2 of Conservation Order 98-B concerning well spacing in the Prudhoe Pool. We also wish to submit a statement supporting Atlantic Richfield's comments concerning unitization of the pool. We believe these statement~ . are appropriate, as BP Alaska is the operator for Sohio for lea~ included in the Atlantic Richfield request. Sohio, as you know is a major 'leaseholder in the field, and BP Alaska is the pro- western- posed operator for the '/part of"the Prudhoe BaY Field,~ The..i~i objective of the two proposed unit operators is for each to establish a productive potential of 60~,000 barrels per day before late 197'7 for the anticipated initiaI~ throughput of the pipeline of 1.2 million barrels per day. We believe that this Offtake rate can be techniCally justified, as can considerably . higher rates as additional pipeline capacity becomes available. TO achieve this productive potential, applying sound reservoir and production engineering practices, more than one well per section will initially be required in the central part of the field. We believe that approval of the Atlantic Richfield re- quest~to drill two wells in any of a number of sections, while keeping these wells at least 2,000 feet apart, will neither be R ~ R COURT REPORTERS 277~72 -- 277-0~73 ~74-9322 ng es ial ? 8 9 10 11 15 18 · _~ .© -39- wasteful nor-.detrimental to recovery, 'but will enable them the flexibility to follow' and modify as necessary a sensible unitiz ~d development scheme from both economic and reservoir management viewpoints. (Interruption by lady coming in to room.) MR. BURRELL: The lady's looking for Margaret Wolfe. MR. TAYLOR: The results of our stu ies to date based'upon our drilling,, coring and testing results leads us to the flew that a denser spacing will ultimately be required over a large part of the field. Our drilling program and that of Atlantic Richfield have acknowledged this, although we have approached.the question, of well locations in a differeht practical manner. This point, that there is a need to make provision for further development,-has been made in our previou~ well spacing requests. It is made again now in the context that we would welcome the State's own proposal for a fieldwide ble of two wells per section, but would consider that this is only an intermediate requirement in an overall efficient field ment plan. Atlantic Richfield has, at your request, addressed the subject of the progress of unitization negotiations, y our plans for efficiently developing the field as a field, r than the development of a number of individual leases, is an indication of our commitment to effecting unitization prior to he commencement of production. BP Alaska has been distributing in R & R COURT REPORTERS B2~ W. 8TH AVENUE. ~;urI'E ~ ~O9 W. 3RD AVENUE Z77-0572 -- 277-0573 274-9322 ANCHO~GE. A~S~ 99501 1 2 3 ,t 5 6 '7 8 9 10 -11 12 15 15 17 . 18 : . 19 2O ~.1 © -40' good faith all relevant data frOm our drilling operations to all potential unit participants. Operational and related matte have been regularly discussed with all these companies. It is It is clearly not a simple matter to effect a unit agreement fo the Prudhoe Pool; nothing of th~s magnitude has been attempted before and the establishment 'of equitable participation, terms i a very difficult task. Although delays in the issuance of the pipeline permit removed the immediate incentives which were evidenced in the 1969-1970 unitization progress, work did con- tinue on these problems and the incentives have now returned. During this year BP/Sohio, Arco, and Exxon have made considerab progress in identifying and attempting to propose equitable approaches to the problems which most concern their relative po sitions as principal participants. We consider it timely that . ~he other companies will be apprised of these efforts next week as further progress towards establishing unitization terms acce table to all participants. We share with Atlantic Richfield their concern as to publicly discussing these sensitive issues while negotiations are in progress between the companies. We want to keep the State informed as progress is made; at this time we can only give our assurance that we are now working as quickly as possible towards completing a unitization agreement that all companies can present to the State, and we have every expectation that this will be possible well in advance of any produCtion from the field. I'd be glad to submit a copy of -- R & R COURT REPORTERS B2~ W. BTH AVENUE, SUITE ~ ~09 W. :~RD AVENUE ANCHOP. AGE, ALASKA 9950! 1 2 3 4 5 6 '7 9 10 11 12 13 14 15 16 1'/ 18 19 2O 21 22 23 24 this for' the record. -41- MR. BURRELL: We'd appreciate havin< a copy for the record. It's a lot easier for transcript time. Does anybody have any questions? Thank you Mr. Taylor, thank you very much, sir. Is there anybody eise in the audience who cares to make a statement or testify? MR. MILLER: Mr. Chairman, I'm Judd Miller, Jr. I am Production Manager for the Western Divis of Exxon Company U.S.A. And I have with me Tom Krueger, an attorney on our staff in Los Angeles. I believe I'll plead the same qualifications as Dr. Slack. Mr. Chairman, members of the Alaska Oil and Gas Conservation Committee, I am Judd Miller, Jr Production Manager, Wester Division, Exxon Company, U.S.A. I am appearing before you as the representative for Exxon Company U.S.A., so-lessee with Atlantic Richfield of the Prudhoe Bay Leases, to introduce into the record a statement of Exxon's position regarding A~lantic Richfield's request for an exceptio] to Rule 2, ConservatiOn Order No. 98-B. Exxon fully supports A.R.Co.'s request for selected 320 acre exceptions. We have made many s..ophisticated reservoir studies of the Prudhoe Bay Pool since the initial field rules were adopted in 1971 and are convinced by these studies that A.R.Co's proposed development i needed if the field is to have adequate producing capacity when the Alyeska line is ready for production. We are further con- vinced that efficient producing rates will not be exceeded with R & R COURT REPORTERS B2~$ IM. B'TH AVENUE. SUITE ~ ~09 W. 3RD AVENUE 277-0~7Z - 277-057:~ 2?4~9322 ANCHORAGE. ALASKA, 99501 on .:: f ! this'program, and that additiOnal field development, to at leas 160 acre spacing, will ultimately be needed. Therefore, in 3 response to your question, we would have no objection to changi! g the existing spacing rules to permit 320 acre spacing fieldwide ~owever, as we are anticipating a unitized operation, we regard any change in the existing spacing rule as an interim measure ? until unitization, at which time revised spacing rules could be proposed by the unit owners. Regarding your question as to the progress of unitization, Exxon endorses the objective of unitization prior to production start-up and strongly supports 11 efforts to achieve that objective. Throughout the development Prudhoe, and particularly for the past year, Exxon has devoted substantial manpower towards this goal. We will continue our commitment to this effort, as well as our support-of appropriat unitization committees which encourage similar involvement _ · . by all the prospective unit owners. We fully recognize that th~ . 17 success of this effort is dependent on the commitment and good faith efforts of every owner.~ Based on the past efforts of all owners, we are optimistic that such commitment will continue and that unitization will be achieved in the time frame outline, by Atlantic Richfield. An. d that concludes my statement. MR. BURRELL: Thank you, Mr. Miller Do you have any questions? Thank you very much, sir. Could we have two copies of that for the record? MR. MILLER: Yes, sir. 82B W. Bm A~NUE. SUITE ~ ~0~ ~o ~RD ~"1 1 2 3 5 6 '7 8 10 11 12 13 '" 1't 15 :'16 -' 1'7 18 19 20 21 2'1 25 MR. MARSHALL: How about 3 copies? MR. MILLER: Do you need more? MR. BURl{ELL: That's fine. Does anybody else wish to make a statement or testify? MR. SWEATNAM: My name is Bob Sweat- nam, Phillips Petroleum Company, District Land man in Anchorage. Mr. Chairman, members of the Committee, I'd like to read a state ment on behalf of Phillips in to the record. Phillips Petroleu~ Company owns interests in oil and gas leases located within, the Prudhoe Bay oil pool and is a party signatory to agreements for unitization dated August 6, 1969, and October 29, 1969, which have been introduced in prior hearings before this Commission. Atlantic Richfield Company is designated as the operator for the easterly portion of the Prudhoe Bay oil pool and has sub- mitted its application and testimony reflecting its judgment as to the necessity for spacing .exceptions in the area covered' by its application. Phillips prefers a development plan~-follo~ ing a regular 320 acre pattern,i however we recognize that a com- promise between reservoir development objectives and drilling economies may be necessary. We accept Atlantic Richfield's representations and testimony that in its judgment as operator, the requested spacing is required in order to maximize early production from the' Prudhoe Bay oil pool for the benefit of the working interest owners therein and the State of Alaska, and accordingly Phillips Petroleum Company does not oppose the R & R COURT REPORT£RS 8~ Wo 8TH AVENUE, SUITE 5 ~0g W. ~RD AVENUE Z77~57Z - 277~573 274-932Z ANCHO~GE. A~SKA 99501 5 6 ? 8 9 10 11 12 13 14 15 16 1.'/ 18 19 20 21 24 25 application. With respect to unitization, we are disappointed -. that more progress has not been made toward completion of a ~ef~ · nitive unit agreement and a. definitive unit operating agreement We strongly urge that all of the affected companies and the Sta' of Alaska set completion of these' documents· in the year 1975 as a firm goal. Any questions, Tom? MR. BURRELL: Thank you, Mr. Sweatn~ MR. MARSHALL: No. MR. BURRELL: Thank you very much. MR. RICHARD: Mr. Chairman, my name is Cliff Richard, representing Amerada Hess Corporation. I am the Project Coordinator for the Prudhoe Bay Field for thatcom- pany. "Shaw", sir? . . MR. BURRELL: Excuse me, was that MR.'RICHARD: Richard, R-I-C-H-A-R-i. - . MR. BURRELL: Thank you. MR.. RICHARD: I have a question I would like to direct to you.' Since the hearing has been'held open until December 17th, would it be possible to provide, a statement after -- MR. BURRELL: Yes, sir. With the hearing record held open until December 17th, that means an, can submit anything they want°to that's relevent to the matter f R & R COURT REPORTERS AVENUE, SUITE 5 ~Og W. SRD AVENUE 2~?..0"~72 - 277.0573 .2T&-g322 ANCHO~GE. A~S~ g9501 1 2 3 4 5 6 ? 8 9 .. 10 1]. 12. 13 14 15 16 18 3. 2O 24 25 -45- this hearing. MR. RICHARD: Okay, thank you, sir. Amerada Hess Corporation will submit a statement following -- MR. BURRELL: Submit a written stat~ ment between now and then? Thank you very much, sir. Are there more? MR. KUBIK: Gentlemen, I'm with MobJ Oil Corporation, my name-is Bob Kubik,' and I'd like to read a statement. MR. BURRELL: Could you spell your last name, sir? Mi{. KUBIK: K-U-B-I-K. MR. BURRELL: Thank you. MR. KUBIK: In the notice for today public hearing, the Committee.stated that it would seek informa' as to why an exception to Rule 2 of Conservation Order 98-B sho~ n6t be .changed to permit 320 acre spacing for the entire Prudho~ Oil Pool and that it would inq6ire as to the progress of unitiz; ~ion negotiations for the Prudhoe Bay Field. Mobil supports 320 acre spacing for the entire Prudhoe Oil Pool. We recognize that 320 acre spacing will be required to efficiently develop the Prudhoe Oil Pool and sustain production rates. In regard to the Conservation Committee's inquiry as to the status of unitization, Mobil is not aware of signifiCant progress between mid 1972 and the.start of construction on the TAPS pipeline. R & R COURT REPORTERS 82B W. NH AVENUE, SUITE B ~09 W~ ~RD';KVENuE 277~572 -- 277~573 274-9322 ~CHO~GE. A~ 99501 ' . . $ ion .ld 3 5 6 ,./ 8 9 10 11 12 13 1't 15 16 1"/ · -* 19 20 21 22, 23 -46' .. Indications are that the unitization effort will commence'in earnest now that the pipeline is underway. Mobil's planning the Prudhoe Oil"Pool has been made with the full expectation there will be a field-wide unit. We believe 'that a unit will result in the maximum benefit to all concerned, including the State.and the participants. It is Mobil's aim that an equitable unit be acComplished as soon' as possible, and no later than the MR. BURRELL: Thank you, Mr. Kubik. MR. KUBIK: I have copies of that° MR. BURRELL: Could we get some MR. MARSHALL: I want at least 3. MR. KUBIK: As many as you want. · MR. BURRELL: Do we have anybody end of 1975. from you? else who wants to make a statement or testify? Apparently not -- oh, there's two more. MR. COTTON: My name is Clyde Exploration Supervisor for Alaska Operations for Getty Oil pany. And we would like to, in view of holding the meeting Open, submit a written statement rather than an oral one today~ and we will do so by the 17th of December. MR. BURRELL: Thank you, Mr. MR. SAWYER: Mr. Chairman, members of the Board, my name is Jerry Sawyer, Consultant representing R & R COURT REPORTERS B2~ W. ~'H AVENUE. SUITE 5 50~ W. :~RD AVENUE 277-0572 - Z77-0.'S73 274-9322 ANCHO~G~ A~S~ ~501 2 5 6 ,/ 8 9 10 11 12 13 1'~ 15 16 1'*/ 18 19 2O 21 22 25 -47- PlaCid Oil Company. In light that t~e hearing is being held open, placid would like to defer. 'making a formal statement until after the management meeting next~.w~ek. MR. BURRELL: Thank you very much, Mr. Sawyer. Is there anybody else who cares to make a statemen Or testify? Last call. Now, is there anybody that wants to make -- to ask any questions of any of the witnesses who have previously testified? If so, I'd like you to direct it through the Committee. I gather nobody here has anything else to say, then, and I'm going to adjourn the hearing unless somebody' tell me otherwise. Adjourned. Thank you. ('OFF THE RECORD) R & R COURT REPORTERS B25 W. 8TH AVENUE. SUITE t5 BO9 W. ~RD AVENUI: ANCHO~GE. A~S~ 9950~ 3 § 6 ? 8 9 10 11 12 13 1'~ 15. 16 1'/ 18 19 20 21 22 23 CERTIFICATE I, Robyn Gerrard, Notary Public, in and for the State of Alaska, and Electronic reporter for R & R Court Reporters, do hereby certify: That the Public Hearing of the Department of Natural Resources Division of 0il and Gas was taken before me on the 4th day of December',. 1974, beginning at the hour of 9:30 a.m, at the Loussac Z J Library, 427 F Street, Anchorage, Alaska. That this hearing, as heretofore annexed,, is a true and correct transcription of the testimony of said hearing, taken by me electronically and thereafter transcribed by me: I am not a relative or employee or attorney or counsel of any of the parties,.nor am I financially interested in this action. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal this 5th day of December, 1974. Not~ l~~i o~ f~Or~Al~a's k a My commission expires: 10/4/78 R & R COURT REPORTERS 825 W. ~ AV]ENUE, SUITE 5 509 W. :3RD AVENUE 277-0572 -- 277~573 274-9322 ~CHO~G~ A~S~ 995oi · , .'. .,. . ... , 8-10-15 .6-10-15 Tost Dat~ 7/29/72 . , '.. . .. . .IF? 1650 1530 EXHIBIT ATLANTIC RIQ4FIELD CO~,~ ... , . . i:low Tests oJ Prudhoe' Bay Sadle~chit Oil 1~/~11~ Choke'Size · , · ,,. .. 1,360 (]OR (scY/-s ) 696 32/~4 P~roductivit.Z Index 28' 18 PRUDHOE BAY FIELD A.R.Co. OPERATING AREA CONSTRUCTION AND 'DEVELOPMENT SCHEDULE 7-1-77 STARTUP CENTRAL GAS INJECT!ON PLANT INCREMENT (I) 3, UNITS 6 FIELD FUEL GAS UNIT INCREMENT (2) 5 UNITS INCREMENT (3) 4 UNITS FLOW STATIONS · .FLOW STATION FLOW STATION FLOW STATION PIPELINE SYSTEM (I) suPPORTS '(2) GATHERING LINES (3) FLOW LINES EXHIBIT i ii 1973 1974 I 1975 1976 1977 1978 I FABR!CATE I BJ INSTALL FABRICATE B~ INSTALL FABRICATE ,, ,B~ INSTALL . . i FABRICATE BJ INSTALL i I~ i - F~'BRICATE BI INSTALL FABRICATE 81 INSTALL" -. i'FABR~CATE B! INSTALL MANUFACTURE INSTALL i ' I MANUFACTURE Si , INSTAL,~ BP _OPERATING '" AREA I i ii ARCo OPERATING AREA ':~!;. .... -;,%- ... / /? · ,:!: ?\ - ~ --~_ :: -::. :::: :::;,::::: _+_:,,.,. AtlantlcRichfleidCon~ y + *R~ :: ~' .~', RUDHOE OIL PO~: ? / ('~"' REQUESTED SPACING EXCEPTIONS ~ ~ .... ' ---1 '?:": ' ?.~:,:,':~:,,_.:_ ' V ,. ..... . -._._..,,.,,: i- : A R-Co - E.~._'×ON , . ARCo-- E~ XON ' A .R.Co- - F',-,'xON - ..? ..'. AR. Cc- E×XC:..'-.: BP ALASKA INC. P.O. BOX 4-1379 3111 - C - STREET ANCHORAGE, ALASKA 99503 TELEPHONE (907) 279-0644 January 17, 1974 JAI' ? 1974 Mr. Homer L. Burrell Chairman, Conservation Committee Division of Oil & Gas Department of Natural Resources 3001 Porcupine Drive Anchorage, Alaska 99504 Dear Mr. Burrell: /' I ,' ~ . ,. . . ---~ SEC Request to 'Flare Gas While Commissioning 'Fuel 'Gas Treatment Plant Further to the conversation between our Mr. B. E. Davies and Mr. O. K. Gilbreth of January 11, 1974 we hereby request an administrative exception to Conservation Order 98B to permit the flaring of gas and condensate as an operational necessity. This gas and condensate will be produced from our fuel gas supply well, BP Well C-3 (17-11-14), which is perforated in the gas cap over[Ying the Prudhoe Oil Pool in the Prudhoe Bay Field. It is our intention to begin commissioning of the. Fuel Gas Treatment Plant situated at Pad C in the week beginning January 28, 1974. In order to allow for orderly commissioning and initial operation of the plant it will be necessary to flare this gas and some of the condensate. Following the completion of commissioning of the Fuel Gas Treatment Plant, gas will be passed to the Prudhoe Bay Central Power Station where it will be used for generating electricity. Except during Phase I of the following schedule, condensate will be injected into BP Well C-4 (18-11-14) as permitted by Conservation Order 118 of March 8, 1973. The following lists the proposed sequence of events for commis- sioning of the Fuel Gas Treatment Plant: 1. Two days of intermittent operation after initial introduction of gas into the plant. Gas flow rate 3MMSCF per day. Gas consumed 6MMSCF. During this phase the condensate will be flared. 2. One day flowing at 3MMSCF per day. Gas consumed 3MMSCF. 3. One day flowing at 6MMSCF per day. Gas consumed 6MMSCF. 4. One day flowing at 9MMSCF per day. Gas consumed 9MMSCF. 5. Following routine shutdown of the plant, flow for one day at 3MMSCF. 6. Following emergency shutdown of the plant, flow for one day at 3MMSCF per day. Gas consumed 3MMSCF. 7. Perform routine shutdown of plant. ,, The commissioning operation is estimated to take eight to ten days, and during this operation approximately 27MMSCF of gas will be flared together with approx- imately 400 bbls of condensate. AGO 10031561 ~$ Request to Flare Gas While Commissioning Fuel Gas Treatment Plant Page 2 Shortly after completion of commissioning of the Fuel Gas Treatment Plant, gas will be supplied to the power stations in order to commission the gen- erator turbine. It is probable the operation of these turbines will, in the initial stages, be intermittent as various faults are discovered and corrected. In order to permit relatively steady operation of the Fuel Gas Treatment Plant during this period we also request permission to flare gas at intermittent times during this period when the power station is not able to accept gas. During such occasional periods of flaring, the gas flow rate will be 1 to 2MMSCF/D. The commissioning time for the power station generators is estimated to be approximately seven days. Very truly yours, BP ALASKA INC. hw Acting Manager Operations JAIl 1 ? i)l¥1SiON Oi: OiL AND [i [S AtlariticR[ch~ieldCompany North Ame'~can Producing Division North Ala~'" District Post Office Box 360 Anchorage, Alaska 995'10 .......~,/ Telephone 907 277 5637 /!.,,.. ,;,, July 23, 1973 Mr. O. K. Gilbreth State Division of Oil and Gas Department of Natural Resources 3001 Porcupine Drive Anchorage, Alaska 99504 Dear Mr. Gilbreth' c,o. Subject' Two Phase Flow Test Further to my letter of June 12, 1973 concerning the above subject, the following is the additional infor- mation you requested. . The maximum amount of gas to be flared during the test is 64,800 mcf. This is broken down as follows over the 2S-day period. Rate in Gas Days BOPD (mcf) 3 1,000 2,400 8 2,000 12,800 4 3,000 9,600 4 4,000 12,800 4 5,000 16,000 2 7,000 ' '11,200 25 64,800 e F. laborating more on the nature of the test, it is a production test utilizing the D. S. #1-1 well and flowline system and additional facilities to be installed separately for the test. It is being run in the vicinity of the Crude Oil Topping Unit since it is the only existing facility available for han- dling the produced fluids. The test is not directly associated with the Crude Oili'~Fdp~'i"~'~-'ii"~i'~'"'-6-9','i"i'~§'ii'ii'il .............. ,jut,. 5 DiViSION Of: 01~ AND GAS ANCHORAGe AGO 10031563 Mr. O. K. Gilbreth Page 2 July 23, 1973 As stated in my letter of June 12, 1973, from this test we hope to verify and improve the separator design technique. Additionally, we are looking for aspects which are not now included in the tech- nique. Since the industries' operating experience with large diameter two phase flow in pipelines is limited, it is possible that producing through this test facility will bring to our attention additional aspects of two phase flow that should be considered in design. If I can be of further assistance, please call. Very truly yours, RDA: aep Oil Corporation FEB 1. 6 1971 ~-"~:-~,-,:,.,.,::..,:.~-.y_10. ~ 9'7 z -i-,~ r~'.,o-'/--J CCEP'I"ED A.c.o~o. Date_ Z/n:,/7/~ 7' O~OL I' "] ' ill Mr. Thomas Marsbai. i., Sr. Ii 'm.×e cutive Secretary ': ....... "' Anchorage, Alaska 9950l .~.._~:~. .:--~ _-. --L ' Dear Mr. Marshall: At the Prudhoe Bay Field Rules Heari.ng of Fe'bruary 9, 1971, the Committee indicated concern that the area to which the Prudhoe Bay Field Sadlerochit Oil Pool Rules be applied should not be substantially different from the area encompassed by the proposed prUdhoe Bay Unit. In view of the Committee's concern, we believe i.J: is perti.nen[ to include in the Record Of the February 9 Hearing data from the Mobil-Phillips-. SOCAL #33-11~12 well, even though ~hi.s well wa.~ completed after the' mid-year 1970'k:ut-off" date for initial consideration, of data for Unit mapping. We hereby submit the following data pertaining to said well for inclusion in the Record of said hearing. The SadLerochit was drill stem tested in this well and flowed water-free oil. a{: the surface. This information has "i.' ' ' been considered proprietary and has not been released to the Prudhoe .'.. "" Bay Pre-unitization Committees. .However~ we hope that the information included here will be sufficient to assist in your decisions regarding the Sad[erochit Oil Pool Rules area. The surface and bottom hole Locations are as follows: Surface Location - Z000' Fl,IL and 1500' ,tV.EL~ Sec. 33-11N--1ZE Bottom hole location - 179.49' S a.nd 694.86' W of Surface Location If you desire additiona~ information on this we[k, we will be pleased to' · ALaska Division .. . ' . discuss this matter with you. ,.. ', '; ;!" , . ... ': . . · · . ,I "'I' ,, , ,, GRAYLOC SYSTEMS OF WELl. OO¢'J~f'tx()L RO'FARY SWIVELS P, O,' BOX 2291 HOt. Alaska Department of Naturs Division of Oil & Gas 3001 Porcupine Drive Anchorage, Alaska 99502 STATE OF ALASKAHEARI ,rage, ary 18, 1971 POOL' aentlemen~ J J g ~:ot.I In the interest of preventing li~M.,t:~.:,i:',.;':..~.,:?,':~; ~.',.~.'~. [;I've d~'velopment of new J I ~Ev j ~ j B'ffA'~f--J? , in the above noted hearing, )u ~J,'~ ~".!,~' In~ STAT~ENTS BY .... '"" ' .... (Re~ Items $ t~n~ough 8 ~..~ [::.~.:,:, ~.,~,t'.LJJ...c>:t' 'bl't~ hearing) Tes bimon~ by John Soo'~ leg~].. ~,.~orr,,c~,~],. :~'~>'z" ,;~:.;l~utio Richfield Co. (Item '7) Rule 4. . ing floor with rotary subs fo~~o a.t;!. ~'~' ,~., '~"':" ,, ,,.~ ~.,,, ..................... :i,,'~,.~ us~')~ one valve to be &n 'i'nside blowout preventer'~' oI t::t~ [~.!.','~.',~l'.~.J.!,.l"[!..~,.'ht:~(iG~;~ valve ·type and the second to be a ~nually~,oper~.'8~d ".:.~:;.t ',~.,.:: ~;:,,,! .... LJ,,,,.:.. 't~:~;l..l '~.~lve or equivalent .,~ .!:i ~,s peot ful ...... ~iC~'~ ~ '' 7 t;o,rrest M~ ]Zoore . · , , , obil OiJ Corporation February 11, 1971 POST OFFICE POUCH 7-003 ANCHORAGE, ^LASKA ggS01 · Mr. Thomas Marshall, Jr. ]Executive Secretary Alaska Oil & Gas Conservation Committee 300]. l~orcupine Drive Anchorage, Alaska 99501 Dear Mr. Marshall: At the Prudhoe Bay Field Sadlerochit Oil Pool Rules Hearing held on February 9, 1971, you asked a question With reference to Mo'bil's E:~,d~.ibil:' .13, concerning intermingling of fluids (that is Water and oil.) if prod',,cti, on £rom the Sadlerochit were commingled with tliat from the Shublik and Sag River in cases where perforated intervals were near oil/water con.-. tacts in one or the other of these in. tervals. Mobil's witness answc:rc,.d to the effect that:.it should be necessary to examine each well before the int:crvals l:o be perforated were determined. In any evenk, good oil :field pratt:ices dictate the necessity to perforate in a manner Lo sure the recovery of the m. aximum amount of hydrocarbons will's. water production. We wish to amplify the answer requested a.~ tt'~.at time to help insure that there is no misunderstanding. Certainly, any a. well is perforated and produced from an interval near a wet:er/oil toni:act, l:l~.ere i. sla danger of water production either from. thc natural. water in£1ux and rnove~.aa, ent: of the water table or water coning, It emphasized, with reference to Mobil's exhibi~ B that this sib~aI:i, ou (that is the possible production of water) exists even if only Sadlerocl~.i.t were perforated ~or production. The perforating of the Shublik an.d Iliver intervals Would not add to this potential problem. In fac'l:, ability to perforate and commingle all three intervals could rcduc(..~ t:he danger of wet:er production by enabling a.n operator to obtain thc desired . oil rates without the necessity for perforating so near the oil/water co.n. tacl:~ It is also'noted ttlat Mobil's prepared testimony presented at the I:>rudl'~oe Bay Sadlerochit Oil Pool Ilules hearing pointed out three possible mci:hods by which communication bctwveen the Sadlerochit, Shublik an.d Sag could exist. Where any of these conditions do, in fact, exist, i.t is not;ad that: the cmnnaingling or interxningling of fluids from these reservoirs would occur regardless 'of whether the zones were. perforated and zningled in a wellboreo i¥Ii$101'1 OF OIL A~,tD GAS,." D A~}iO~Gg , , Mr. Thomas Marshall, Jr. - 2. - February 1i, 1'971 , Following the answer to the aforementioned question, the comment was made to the effect that it might be advisable to consider each well in- dividually and allow commingling only on an adn,inistrative basis. The extension of the.existing vertical del/.neal:i, on for I:l~e Sad].erochit Oil Pool to include the Shublik and Sag River zom;.s ;ts was recommended by Mobil' and others at the February 9 hearing would in effect make the recommended interval the equivalent of one over-;ill ',',;one for produ, cl;ion purposes. The selection of. perforated intervals would then create, in effect, the same decisions/as would be effected if o~dy' I:he Sa. dlerochit interval . . were being considered. It is not normal, prac~i'ce to require an operator to get administrative approval as t:o I:he selection of perforated intervals within a single zone. Therefore, i.t is belier'ed I:hat if the Sadlerochit Oil Pool Vertical Delineation is extended k:, i. iiclude the Shublik and Sag River intervals~ there shouldbe no ~nore necessi, i:y for requiring ad- ministrative approval for specific perforal;ed i'nt:ervals in this case than would be the case where fl'~e only p:roduci:i'~;'e i. nterva.1 was the Sadlerochit. In view of the above, we respectively' :reques[ that; l:he Commission revia, e the existing definition for tl~e vertical de].htea, tion I:o include the Shublik and Sag River as was recommended in t'l~e Mobil I:e~timony and allow com~rdngling of',these zones in the wellbore. It is requested that fl~is letter and ~'~e confien.i:s t:hereo£ be included as C' o a part of flxe record of tl~e I~rudh°e Ba'y' l?i. eld oadlerochi~ Oil Pool ~ules Hearing held off'Febma~.9,... 1971..~".. . ', , . ~ $ ',.,,. , , . , . ,1 '~ , % ,. ~ , , '., ..,., , Yours very truly, , ..... .... . ,l//z-Il ,,,,', C. ,C. 'Woodruff ', ...,,:" ~ ." . · .','~ Di'vision Engineer .' ':~,'.Ala~Jk¢'Di~'iaion:, ',',i "..,.' ' ; · , . ,, .: .'. ',.., .. ~. RF.-Ct- ! v u DIVISION OF OIL AND GAS , . ANCHORAGE ALASKA OIL & GAS CONSERVATION COMMITTEE HEARING FEBRUARY 9, 1971 " Thi~ hearing ~overed the Pool Rules for Conservation Order No. 's 83,~[ and 83-~. The Conservation Order 83 ~1~ covering the Lisburne Pool was not affected by this hearing. ~ _(. ,CONSERVATION FILE NO. 98 . , · . . AGO · 'i 10031547 I PRUDHOE BAY FIELD RULES HEARING February 9, 1971 ATLANTIC RICHFIELD COMPANY EXHIBITS I T~v°~:~ AGO 10031548 .Operator- Well ARCO · 21-12-13 4-10-1~5 24-10-15 7-10-14 8-10-15 10-11-14 35-11-12 26-11-12 28-12-11 BP Exhibit 1 ltlantic Richfield Company Field Rules Hearing February 9~ 1971 CORE DATA SADLEROCHIT OIL POOL CO~ PRUDHOE BAY FIELD Average ~~~ ................ NQm er of Poros i ty Permeabi 1 i ty _ Sampl es (~%') (md) 21.5 341 116 23.1 484 296 21.8 363 265 23.2 196 185 24.4 400 350 23.8 188' 124 19.1 34 15 24.8 , 26* 35 22.7 159 72 24-10-14 ** 22.5 218 317 31-10-16 ** 21.2 240 350 9-11-13 ** 22.5 ~ 315 478 33-11 - 13 ** 21.4 169 288 32-12-13 ** 24.1 177' 105 27-11-14 23.6 351 175 Placid 3-10-13 Socal 29-12-11 25-10-14 26-12-12 3-11-11 5-10-13 21-11-12 7-11-12 TOTAL SADLEROCHIT Mobi 1 21.3 105' 97 18.1 17' 18 24.1 24O 5O 21.3 155 157 18.3 31 48 22.2 160 157 20.6 144 87 17.3 16 28 22.4 265 3814 NOTES' (1) (2) (3) Cores w/less than 1 md permeability are excluded Porosities are arithmetic averages Permeabilities are arithmetic average of Kair except where indicated Permeability values include Klinkenberg factor Whole core measurements included in averages Sidewall cores only AGO 100315~9 0 ~Operator ARCO BP ARCO Mob i 1 ARCO Mob i 1 Mobil Well 7-10N-14E 27-11N-14E- IO-11N-14E · 3-11N-lIE 28-12N-lIE 21-11N-12E 7-11N-12E Test No. DST #1 DST #2 DST #3 Flow #1 Flow #4 Flow #6 DST #1 2 DST #13 DST #14 DST #1 5 OHDST #4 WSO · Flow #1 OHDST #8 #9 OHDST #1 Flow #1 DST #1 Date 6/25/69 6/27/69 6/28/69 6/26/69 6/28/69 7/01/69 6/01/68 6/08/68 6/15/68 6719/68 6/20/69 1/13/69 12/3/69 7/10/69 '7/11/69 2/31/68 2/20/09 6/.14/70 Exhibit 2 Atlantic Richfield Company -' il ACCEPTED , /i SADLEROCHIT OIL POOL II ,, ,,ALASKA OILand GAS /I JJ cot-'"~,-':,nqo;i cot,~',~n-'rz~ H E.X _._.;T~;. BHP (psig' Test 'Interval Gauae DebthJj-~ 06(~pF'~auge T~pe_ ~a~ture @ Datum MD. SS MD SS ' _ .... o_~}z_ I~ of 9000'SS 9095-9100 9020-9025 9060 9082-86 9007-9011 9075 9076-86 9001-9011 9085 8985 4475 9000 4480 9010 4465 4482 4480 4461 8700-60 8666-8726 8562 8700-9000 .8666-8966 8549 .8700-9000 · 8666-8966 8588 8528 4303 198 4456 8515 4301 208 4439 8524 4303 200 4456 8656-70 ' ' 8615-8629 8580 8615-44 8574-8603 8524 8625-50 8584-8609 8589 8210-50 8169-8209 8172 8539 4297 180 4447 8483 4321 i 179 4467 8548 4318 180 8131 4281 180 44~ 8987-9022 8917-8952 9015 8.945 8993-95 8923-8925 8949 8879 8960-70 8890-8900 8902 8832 4433 4398 4423 4456 4447 4483 8943-60 8874-8891 '- 8960 8891 8993-9000 8924-8931 8992. 8923' 4413 4433 4461 4467 8937-60 8875-8898 8957 8895 8875-8940 8813-8878 8822 8760 4443 4378 2O0 4476 4457 9029-9113 8809-8892 9014 8794 4380 236 4447 Operator Wel 1 Date of Sampling Sampled interval (MD) .... (SS) Sampling Depth (MD) .... (ss.) " Temperature (oF) Sampling Pressure (psi). Reservoir Temperature (OF) Bubble Point Pressure Formation Volume Factor - Flash (RVB/STB) Formation Volume Factor - Differential-(RVB/RDB) Solution GOR (SCF/STB) Viscosity @ Bubble Point (cp) Flash Oil Gravity (PAPI) RESERVOIR FLUID ANALYSIS SADLEROCHIT OIL POOL PRUDHOE BAY FIELD Exhibit 3 Atlantic Richfield Company' Field Rules Hearing February 9, 1971 ARCO BP Mobi 1 Bp BP P1 acid BP 4-1 Oil 5 27-11-14 26-12-12 1-11-12 1-11-12 3-10-13 4-11-13 7/16/68 8750-65 8692-8707 8640 8582 185 4317 6/30/69 11)25/69 6/12/70 6/23/70 6/14/70 8/24/70 8700-9000' 8892-8984 8966-9008 8822-87 9008-58 9854-10020 8666-8966 8845-8937 8922-8964 8779-8844 8936-8986 8753-8894 8564 8878 8894 8754 8700 9800 8530 '8831 8850 ~710 8628 8707 198 200 217 216 200 216 4250 4400 ~400 4323 4287 4314 200 4321 1.390 1.419 810 0.81 27.7 201 4492 1.325 1.356 65i 1.06 26.8 185 4295 1.399 1.447 850 0.69 28.4 200 200 220 200 4320 a262 4087 4263 1.334 1.342 1.307 1.353 1.353 1.350 1.338 1.368 673 675 595 684 1.22 0.99 1.34 0.92 27.0 27.6 25.2 27.0 RESERVOIR FLUID COMPOSITION DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD ~Component Exhibit 3A Atlantic Richfield Company Field Rules Hearing February 9, 1971 _ - , ,, -- .... Dole ~ ALASKA OIL end GAS CONS~VATION COMMITTEE , C.O. FILE f ?Y. ,. BP 27-11-14 MOL Percent Helium .O1 Carbon Dioxide 9.11 Nitrogen 0.45 Methane 44.13 Ethane 5.11 Propane 3.03 iso-Butane 0.83 n-Butane 1.35 iso-Pentane 0.76 n-Pentane 1.16 Hexanes 1.54 Heptanes plus 32.52 Heptanes plus Gravity (°AP !) Molecular Weight 26.7 270 AGO 10031552 Co~mponent Nitrogen Carbon Dioxide Methane Ethane Propane Iso-Butane N-Butane Iso-Pentane N-Pentane Hexane Heptanes Plus GAS CAP FLUID COMPOSITIONAL DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD Exhibit 4 Atlantic Richfield Company Field Rules Hearing February 9, 1971 ACCEPTED Date~ ALA$~(A OiL crud GAS CONSEF-~VA'I'IO~',~ COMMITTEE __ C.O, FILE: ARCO- ~ u_~nble 30-~1-14 M)I e' Ferd'efit: Separator Gas - Separator L~quid 0.67 0.07 12.21 5.80 77.67 23.26 5.42 6.54 2.35 7.11 0.31 1.62 0.69 5.59 0.16 2.61 0.20 3.96 0.11 7.36 0.21 36.08 Heptanes Plus Gravity (oAPI) Molecular Weight Gas Speci fi c Gravity H2S, ppm .758 47.8 137 ~I o O3 ~! Exhibit" 5 Atlantic Richfield Company Field Rules Hearing February 9, 1971 ~erator BP Well Location 31-10N-16£ FORMATION WATER DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD' Sampl i ng Sample Date Source Perforated Interval Sample MD SS Poi nt 10-10-69 DST #2 9208-9390 9144-9326 Surface Total Salinity Solids Measured Resistivity M L_~_qj.L~ ~ ohm-m. OF S.~ 18168 213§1 0.358 75 1.021 5 ):,. 0 o o ACCEPTED Dq, , ALA'-" ..... ;'". '=~,~ OAS WELL TEST DATA SADLEROCHIT OIL. POOL PRUDHOE BAY FIELD Exhibit 6 Atlantic Richfield Company Field Rules Hearing February 9, 1971 Ope ra to r ARCO ARCO BP BP Well Location 4-10-15 D.S. #1-2 (7-10-15) 27-11-14 4-11-13 Test Date 1/68 3/70 6/69 8/70 Perforations Interval, SS 8(~2~-8757 8686-869 5 Net Feet 132 l0 8666-8966 8753-8894 106 110 Oil Rate BOPD 8750 3872 21000 23700 GO' S.CF/,STB 610. 820 . 837 722 Water Cut % Oil FWHP FBHP Gravity Speci fi c P.I. Psig_ Psi,~ o API BOPD/ps i/ft.. 1160 4018 28.7 .23 1150 3610 28.2 .60 0 775 3445 27.7 .25 0 875 3546 26.0 .33 2_0 97' ! AGO 10031556 ,, , . o'oI~ AGO 10031557 AGO 10031558 AGO 10031559 L_ PRUDHOE BAY FIELD RULES HEARING February 9, 1971 ATLANTIC RICHFIELD COMPANY EXHIBITS Exhibit 1 ~tlantic Richfield Company Field Rules Hearing February 9~ 1971 · . CORE DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD Operator- Well ARCO 21-12-13 4-1'0-15 24-10-15 7-10-14 8-10-15 lO-11-14 35-11-12 26-11-12 28-12-11 BP Average Average Number of Porosity Permeab i 1 i ty Sampl es L., (%) (md) 21.5 341 116 23.1 484 296 21.8 363 265 23.2 196 185 24.4 400 350 23.8 188' 124 19.1 34 15 24.8 ~ 26* 35 22.7 159 72 24-10-14 ** 22.5 218 317 31-10-16 ** 21.2 240 350 9-11-13 ** 22.5 315 478 33-11-13 ** 21.4 169 288 32-12-13 ** 24.1 177' 105 27-11-14 23.6 351 175 Placid 3-10-13 Socal 29-12-11 25-10-14 Mobi 1 26-12-12 3-11-11 5-10-13 21-11-12 7-11-12 TOTAL SADLEROCHIT 21.3 105' 97 18.1 17' 18 24.1 24O 5O 21.3 155 157 18.3 31 48 22.2 160 157 20.6 144 87 17.3 16 28 22.4 265 3814 NOTES: (2) (3) Cores w/less than 1 md permeability are excluded Porosities are arithmetic averages Permeabilities are arithmetic average of Kair except where indicated Permeability values include Klinkenberg factor Whole core measurements included in averages Sidewall cores only Op.era.tor ARCO BP ARCO Mob i 1 ARCO Mob i I Mobil Well , 7-10N-14E 27-11N-14E- lO-11N-1.4E ' 3-11N-liE 28-12N-11E 21-11N-12E 7-11N-12E Test No. DST #1 DST #2 DST #3 Flow #1 Flow #4 Flow #6 DST #1 2 DST #13 DST #14 DST #1 5 Date 6/25/69 6/27/69 6/28/69 6/26/69 6/28/69 7/01/69 6/01/68 6/08/68 6/15/68 6/19/68 RESERVOIR PRESSURE DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD Test 'Interval MD SS 9095-9100 9082-86 9076-86 9020-9025 9007-9011 9001-9011 8700-60 8700- 9000 8700-9000 ' 8666-8726 · .8666-8966 8666-8966 8656-70 ' ' 861 5-8629 861 5-44 8574-8603 8625-50 8584-8609 8210-50 8169-8209 OHDST #4 6/20/69 8987-9022 891 7-8952 WSO. 11/13/69 8993-95 8923-8925 Flow #1 12/3/69 8960-70 8890-8900 OHDST #8 7/10/69 8943-60 8874-8891 #9 '7/11/69 8993-9000 8924-8931 12/31/68 8937-60 8875-8898 12/20/69 8875-8940 8813-8878 OHDST #1 Flow #1 DST #1 6/.14/70 9029-9113 8809-8892 §auge _ MD 9060 '9075 9085 8562 8549 8588 8580 8524 8589 ' 8172 9015 8949 '8902 '8960 8992. 8957 8822 9014 Depth ss 8985 9000 9010 8528 8515 8524 8539 8483 8548 8131 8.945 8879 8832 8891 8923 8895 8760 8794 Exhibit 2 Atlantic Richfield Field Rules Hearing Febmuary 9, 1971 Company BHP @ Gauge Depth 4475 4480 4465 43O3 4301 43O3 4297 4321 4318 4281 4433 4398 4423 4413 4433 4443 4378 4380 Temperature OF ,, 198 2O8 2OO 180 i179 180 180 2O0 236 BHP (psig~ @ Da tum of 9 000' SS 4482 4480 4461 4456 4439 4456 4447 4467 44~-~: 44~ 4456 4447 4483 4461 4467 4476 4457 4447 Exhibit 3 Atlantic Richfield Company Field Rules Hearing February 9, 1971 RESERVOIR FLUID ANALYSIS SADLEROCHIT OIL ROOL PRUDHOE BAY FIELD operator Wel 1 Date of Sampling Sampled interval (MD) .... (SS) Sampling Depth (MD) ." " (ss) " Temperature (OF) Sampling Pressure (psi) Reservoir' Temperature (OF) Bubble Point Pressure Forma'tion Volume Factor - Flash (RVB/STB) Formation Volume Factor - Differential (RVB/RDB) Solution GOR (SCF/STB) Viscosity @ Bubble Point (cp) Flash Oil Gravity (°API) ARCO 4-10-15 7/16/68 8750-65 8692-'8707 8640 8582 185 4317 185 4295 1.399 1.447 850 - 0.69 28.4 BP 27-11-14 6/30/69 8700-9000 8666-8966 8564 8530 ' 198 4250 200 4321 1.390 1 .~.19 810 0.81 27.7 Mobil 26-12-12 11"/25/69 8892-8984 8845-8937 8878 8831 200 4400 201 4492 1.325 1.356 651 1.06 26.8 BP BP Placid BP 1-11-12 1-11-12 3-10-13 4-11-13 6/12/70 6/23/70 6/14/70' 8/24/70 8966-9008 8822-87 9008-58 9854-10020 8922-8964 8779-8844 8936-8986 8753-8894 8894 8754 8700 9800 8850 ~710 8628 8707 217 216 200 216 4400 4323 4287 4314 200 200 220 200 4320 ~262 4087 4263 1.334 1.342 1.307 1.353 1.353 1.350 1.338 1.368 673 - 675 595 684 1.22 0.99 1.34 0.92 27.0 27.6 25.2 27.0 Exhibit 3A At.lantic Richfield Company Field Rules Hearing February 9, 1971 RESERVOIR FLU ID COMPOSITION DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD Component BP 27-11-14 MOL Percent Helium .O1 Carbon Dioxide 9.11 Nitrogen 0.45 Methane 44.13 Ethane 5.11 Propane 3.03 iso-Butane 0.83 n-Butane 1.35 iso-Pentane 0.76 n-Pentane 1.16 Hexanes 1.54 Heptanes plus 32.52 Gravity (°AP I) Molecular Weight Heptanes plus 26.7. 27O Exhibit 4 Atlantic Richfield Company Field Rules Hearing February 9, 1971 GAS CAP FLUID COMPOSITIONAL DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD Comp. onent Nitrogen Carbon Dioxide Methane Ethane Propane Iso-Butane N-Butane Iso-Pentane N-Pentane Hexane Heptanes Plus Heptanes Plus Gravity (oAPI) Molecular Weight Gas Specific Gravity H2S, ppm ARCO-Humble lO-11-14 Mole Percent Separator Gas - Separator Li§ui__d 0.67 0.07 12.21 5.80 77.67 23.26 5.42 6.54 2.35 7.11 0.31 1.62 0.69 5.59 0.16 2.61 0.20 3.96 0.11 7.36 0.21 36.08 .758 47.8 137 Exhibit" 5 Atlantic Richfield Company Field Rules Hearing February 9, 1971 Operator BP FORMATION WATER DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD' Well Location Sampl i ng Sample Date Source Perforated Interval Sample MD ° SS Point 31-10N-16E 10-10-69 DST #2 9208'9390 9144-9326 Surface Total Salinity Sol ids MqlL . :_ Mg/.L 18168 21351 Measured Resistivity ohm-m OF Sp..Gr.t 0.358 75 1'.0215 ,Operator ARCO ARCO BP BP Well Location 4-10-15 D.S. #1-2 (7-10-15) 27-11-14 4-11-13 Tes% Date 11/68 3/70 6/69 8/70 WELL TEST DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD Perforations Interval, SS 8625-8757 8686-8695 8666-8966 8753-8894 Net Feet 132 10 · 106 llO Oil Rate BOPD 8750 3872 21000 23700 S.CF/STB 610 82O 837 722 Water Cut % FWHP Psig_ ll60 ll50 FBHP Psig 4018 3610 Exhibit 6 Atlantic Richfield Company Fi eld Rules Hearinp February 9, 1971 Oil Gravity Specific P.I. o API BOpD/psi/ft. 28.7 .23 28.2 .60 0 775 3445 27.7 .25 0 875 3546 26.0 .33 · '" ~ ': ~ :'; :'BP!' ALASKA INC', ': """ ' · '.:OPiE'RA~ToRS FOR"TH.E STANDARD 'OIL ~¢O.'OF 01~,!O · · · · : ~ : '"l'~i.ld Rul.s'Hearing TeStimony .... .,. '- - I I ~ .... I1111 $ADLEROCHIT OIL POOL .:" :,~... ' llr i'.I I .i : I :: ' ' . i: ' i I : ~ . j : : ' : ' ~I I I : ' *:; .' .'r .: r. : '. ': -F~t~uafy 9. 1971 ' : . · .: . II I : I II : : I I : I . '. ...:_.:. .- ..: . . 1. ..... .. . . .. · . . .. . .. .. ..- .... · · , . . _ . . . . J.. r. · .r r:' · . r .I. PUBLIC HEARING - PRUDHOE BAY FIELD ~February 9, 1971 Call to Public Hearing with respect to Conservation Order No. 83-B, Sadlerochit Oil Pool l * Introductory Statement * 1. Area to be Affected by the Orders * 2. Vertical Definition of the Pools 3. Well Spacing Including Footages to Lease and Property Lines and Acreage Spacing 4. Casing and Cementing Requirements 5. Bottom-Hole Pressure Survey Requirements 6. Gas-Oil Ratio Test Requirements 7. Methods of Preventing Uncontrolled Flows 8. Administrative Approvals, if~any 9. Plans for Disposition of Produced Gas 10. Plans for Reservoir Pressure Maintenance; and * 11. Plans for Unitization Testimony included in this volume. February 9, 1971 STATE OF ALASKA H~ARING - PRUDHOE BAy SADLEROCHIT POOL INTRODUCTORY STATEMENT Mr. Chairman, Members of the Alaska Oil and Gas Conservation Committee, I am F. Harlan Flint, attorney for BP Alaska Inc. It will be my purpose to make an opening statement in relation to certain testimony that will be presented at this hearing. In the interest of an orderly presentation, the avoidance of duplication and the organization of materials to be presented, the pre-unit . participants have attempted to coordinate their efforts in the preparation of the matters to be presented to you today. In the course of the hearing you will be hearing from representatives of~several companies who will offer testimony on items listed in the. call of the hearing. You will recall that at the hearing for the establishment of temporary rules in the Kuparuk River and Sadlerochit Oil Pools conducted by this committee on November 13 and 14, 1969, the parties presenting testimony were unable to provide as much evidence as you would like to have had available to you for use in the formulation of pool rules. This derived from two sources. First, it was very early in the exploration and development of this great region and the data aVailable to the individual companies were very limited. Second, there were compelling reasons for the operators in the area not to divulge information acquired by them which at that time was protected under the State Statutes regarding confidentiality and had unique importance in the competitive conditions that existed. The passage of time, the progress that has been made in the development of the Field and the availability of more data makes it possible for us to Provide you now with a substantial amount of information which we trust will assist you in the performance of your responsibility to review the existing pool rules and adopt permanent pool rules. The testimony to be presented and which I will outline will, in large measure, support the retention of exiSting rules. The extent to'which changes will be recommended will be made evident in the course of these · . presentations. For reasons that will be touched on later, the presentation I ~m outlining will be directed exclusively to Conservation Order 83-B, .dealing with the Sadlerochit Oil Pool. May I now outline the order of presentations. It is intended that these presentations will generally follow the eleven items upon which testimony was elicited in the published notice of this hearing. The first witness will be D. B. Walker, a geologist employed by BP-Alaska Inc., who will present evidence regarding the area to be affected by Conservation Order 83-B. Following Mr. Walker will be two witnesses employed by Mobil Oil Corporation, who will testify in support of the co-mingling within a common well bore of the Sag River Sandstone (formerly called the Oxytoma Formation), the Shublik Formation and the Sadlerochit Formation. Those two witnesses will be H. N. Porter, a'petroleum engineer, and J. F. Vitcenda, a geologist. · The next witness will be B. C. Anderson, a reservoir engineer, employed by Atlantic Richfield Company, who will provide the Committee with engineering data on the Sadlerochit Oil Pool. The next several items within the call of this hearing cover elements of the pool rules, including well spacing, casing and cementing, bottom hole pressure survey requirements, gas/oil ratio test requirements, methods of preventing uncontrolled flows and administrative approvals. Mr. John Scott, attorney for Atlantic Richfield Company, will present the case on these items. Testimony on the disposition of produced gas will be given by R. F. Cox, Resident Manager of Atlantic Richfield Company. -Mr. scott will comment on reservoir pressure maintenance, and finally, I will offer a statement on the Progress of Unitization. Upon the completion of the above described testimony on the Sadlerochit Pool, counsel for the Standard Oil Company of California will address himself to the call of this hearing insofar as it applies to Conservation Order 83-A, which established temporary pool rules for the Kuparuk River Oil Pool. I had previously mentioned the desire of the operators in the Prudhoe Bay Field to disclose substantially more information than could be presented to you in the 1969 hearings. I am sure it will be obvious to you that there are still some data and there continue to be some areas of the Field that require strict confidentiality. However we are confident that this hearing will provide a sound evidentiary base for the pool rules already in effect and a good basis of information which will be useful to the Committee in the performance of its responsibility to protect the public interest in this great Alaskan resource. February 9, 1971 STATE OF ALASKA HEARING - PRUDHOE BAY SADLEROCHIT POOL GEOLOGIC TESTIMONY Mr. Chairman and members of the Alaska Oil and Gas Conservation Committee, at.this hearing I am presenting geologic testimony on behalf of the groups involved in pre-unitization negotiations. Following the previous hearing in November 1969 to establish field rules to apply to the Prudhoe Bay Field, field rules for the Prudhoe Bay Sadlerochit Oil Pool were issued on January 12, .1970. We intend at this present hearing to present testimony with regard to the areal definition of the p001 affected by these rules. This is to establish whether any revision to the extent of the pool, as previously established, is necessary. At the last hearing BP presented testimony describing the geology of the Prudhoe Bay area. That testimony will not be repeated at this time, but we do present a generalized stratigraphic column to review the vertical sequence of the formations and to indicate the minor changes in terminology which have been introduced. Exhibit A is this generalized stratigraphic column. The minor changes in terminology have been made largely as a result of informal discussions of the North Slope Stratigraphic Committee of the Alaska Geological Society. Considering the section from the top downward, an additional formation name, that of the pleistocene to Recent Gubik Formation, has been added. Its thickness is believed to be 200 to 500 feet in the Prudhoe Bay area. The remaining portion of the beds previously ascribed to the Tertiary Sagavanirktok Formation, consisting of gravels, sands, silts and clays, remains as described in the testimony presented in the previous hearing. The naming of the Upper Cretaceous formations in the area now allows for facies differences. The upper part of this interval is referred to as Prince Creek Formation/Schrader Bluff Formation undifferentiated. The former name applies to coal measures - sandstone lithology and the latter name is applied if the sediments are of a more marine aspect. The underlying Upper Cretaceous mudstones and siltstones have been correlated wi%h the Seabee Formation and these-overlie an as yet ~named Lower -Cretaceous shale. Where seen beneath an unconformity,"other Lower Cretaceous rocks are still officially unnamed. In the west this interval contains the Kuparuk River Sands but over the major part of the Sadlerochit pool area these are absent due to truncation. The Kuparuk River Sands have been discussed in a paper included with the Proceedings of the North Slope Seminar published by the Pacific Section of A.A.P.G. in 1970. The Jurassic beds are still referred to as the Kingak Shale. The Triassic and Permian beds are shown on an expanded scale in Exhibit B. The sandstone lying beneath the Kingak Shale and above the shublik Formation in the Prudhoe Bay Field, which was previously termed the Oxytoma sandstone, has been more correctly renamed as the Sag River Sandstone. The type section was defined in the previously mentioned Proceedings of The North Slope Seminar as the interval 8440' to 8482' in the Atlantic Richfield-Humble well Sag River State No. 1. This fine grained, glaUconitic sandstone varies in thickness throughout the Prudhoe Bay Field from approximately 20 feet to 60 feet. The Shublik Formation consists of varYing lithologies of limestone, shales and sandstones with distinctive phosphatic beds. It varies in thickness from approximately 40 feet to 200 feet. The Sadlerochit sandstone is comprised of sandstones and conglomerates in varying proportion together with minor interbedded shales. 'The sandstones consist principally of detrital quartz and chert together with pyrite, siderite and some clays. The Geological Subcommittee formed by companies involved in pre-unitization negotiations has picked the top of this sandstone at 8206 feet in Prudhoe Bay State No. 1 and the base at 8673 feet in the same well. ThroUghout the field area this base is at present picked at the lowest limit of significant sand development. The Sadlerochit sandstone has been seen to vary in thickness through the field area from approximately 450 feet to 630 feet. The Sadlerochit sandstone and the underlying shales are referred to as the Ivishak Member of the Sadlerochit Formation. A sandstone which is present in places beneath the Sadlerochit shales is known as the Echooka Member. The previous unofficial grouping of the Sag River Sandstone, Shublik Formation and Sadlerochit Formation into the Prudhoe Bay Group is no longer applicable. The Pennsylvanian - Mississippian succession can be Subdivided on an arbitrary basis into an upper predominantly carbonate section termed the Lisburne Group and a lower shale and sandstone section ~ermed the Kayak Shale. In the Prudhoe Bay area the Kayak Shale and Kekiktuk Conglomerate rest unconformably on the "Argillites". This testimony is only concerned with Conservation Order No. 83-B and consequently only with the Sadlerochit Oil Pool. We~now intend to present data concerning the areal extent of this pool so that it might be determined whether any change is necessary in defining the area to which the field rules apply. Exhibit C is a structure contour map drawn on the top of the Sadlerochit sandstone in the Prudhoe Bay field area. This map was drawn by the Geological Subcommittee formed by the companies involved in pre-unitization negotiations. The map was most recently updated by that Subcommittee in July, 1970. ~ · The map is based on well da~.'~ and the interpretation of the gcophysical · data available to those companies. It is, therefore, a compromise interpretation and does not necessarily represent the views of any one of the companies, but is a map initially acceptable to all parties. One .ar~a, indicated by shading, in the southwest has not yet been fully resolved and further work is necessarY to. interpret the st£ucture in that area. On this map is shown the outline of the area to which Sadlerochit Pool field rules currently, apply. Wells in ti]e area are indicated as either having encountered oil in the Sadlerochit sandstone, not having encountered oil in the Sadlerochit sandstone, or for which data has not been released. The map shows a structure culminating in a high centered on the area around Prudhoe Bay State No. 1 and truncated on the east by an easterly dipping uncOnformity surface. This structure has a predominant flank dipping gently to the south and southwest, with average dips of the order of one and half degrees. The structure also dips gently to the west from the high Prudhoe Bay State No. 1 area. The north and northwest flanks of the structure are poorly defined and are shown to be faulted. The northwest striking linear trend to the west is faulted along its southwestern margin. It must be appreciated that the present well data are too sparse and the seismic control inadequate for delineating details of the structure. These will be revealed as additional wells are drilled. The map also shows the currently interpreted limits of the oil and gas accumulations in the Sadlerochit sandstone. In the eastern area the downdip limit of the gas cap is shown, this gas cap extends through the crestal area. The downdip and updip limits of the oil column are also shown, the updip limit being determined from the intersection of the gas-oil contact and the base of the Sadlerochit sandstone. In the western area the downdip limit of the gas cap is shown and also the downdip limit of the oil column. In the western part of the field oil completely underlies the gas cap. These gas-°il contacts and oil-water contacts have been established from tests and wireline logs in individual wells. The contacts have been detarmined by the members of the Reservoir Engineering Subcommittee formed by the companies involved in pre-unitization negotiations. The contacts in wells have generally been established by averaging the interpreted picks of the individual companies involved. For initial studies it was accepted that in the east a level plane at 8572 feet sub-sea approximated the gas-oil contact and in the west a level plane at 8775 feet sub-sea is initially acceptable. The oil-water contacts were found to vary throughout the'field area and as yet the reason for this is not apparent. The agreed oil-water contacts for the wells were treated as a surface which could be contoured for estimating the distribution of the oil column. This contoured surface, prepared by the Reservoir Engineering Subcommittee is presented as Exhibit D and requires no further comment except to restate that it is purely empirical in nature and was acceptable to the companies involved. This map was used to construct the oil-water contact traces on the structure contour map (Exhibit C). To illustrate further the structure and fluid contacts of the Sadlerochit sandstone in the area, two cross sections have been prepared, approximately west to east and south to north across the field area. These sections have been dra%~ on the same horizontal scale as the previously presented structure map although they are expanded at the well. points to include the well logs. To indicate the' structure and log characteristics, a vertical scale of 1" = 100' has been used which gives the sections a vertical exaggeration of forty to one. Exhibit E is the west to east cross section through Atlantic Richfield- Humble's North-West Eileen #1, Mobil/Phillips' West Kuparuk, MObil/ Phillips/Socal's 7-11-12 (original) and Kuparuk State No. 1, BP's 09-11-13, Atlantic Richfield-Humble's Prudhoe Bay State #1 and BP's 31-11-16. The resistivity logs for ~]ese wells are shown for the Permo-.Triassic interval and the immediately overlying beds. The Sag River Sandstone, Shublik Formation and Sadlerochit sandstone are correlated through the area. In the east the position of the unconformity is shown'truncating t~e Sadlerochit sandstone. The cross section has been left blank near the area which was indicated to be as yet unresolved structurally. The electric logs indicate the distribution of permeable beds, and the fluid contacts have been placed on the diagram to conform with the map (Exhibit D) for the oil-water contact and with the defined gas-oil contacts. The south-north cross section (Exhibit F) is constructed following the same principles used to construct the west to east section. This south to north cross section passes through Atlantic Richfield-Humble's Put River State (7-10-14) , BP' s 32-11-14, BP's 27-11-14 and Atlantic Richfield-Humble's Prudhoe Bay State No. 1. This section indicates the main south flank of the eastern culmination extending up to the Prudhoe Bay State No. 1 area, and also, a fault between the wells Put River State No. 1 and 32-11-14 is indicated downthrowing to the south. This fault interpretation was necessary to satisfy the well data and has some confirmation in seismic data. To return to Exhibit C, the structure contour map on the top of the Sadlerochit sandstone, the area to which the field rules in Conservation Order No. 83-B apply for the Sadlerochit Oil Pool is outlined on this map. In light of the results of the co-operative studies of the extent of the pool which we have presented here, and realizing that our knowledge of the area is far from complete, we do not at this time request any change in the area to which these field rules apply. This concludes the testimony concerning the areal extent of the Sadlerochit Oil Pool and I wish to thank you gentlemen for your attention. Februa.~y 9, 1971 STATE OF ALASKA HEARING - PRUDHOE BAY SADLEROCIiiT POOL PLANS FOR UNITIZATION hearing on November 13, 1969 a letter of intent, previously submitted to eleven companies, was presented to the State. This letter outlined a proposed ~mnitization of the Pe~{~o-Triassic hydrocarbon accumulations as defined by the Pru~oe Bay State No. 1 well. The letter was agreed to by all parties shortly after the hearing. A copy of the letter of intent is attached to this submission for your records and basically outlines an agreed to basis of unitization. In the fall of 1969 the Steering Con~ittee convened and the Subcommittee structure was organized. This organization is shown on the attached plat BP No. 1 and the area to be unitized initially is shov~ on Exhibit No. 2. Since that date the subcon~mittees and various task forces attached to the subcommittees have been meeting on an almost continuous basis and a great deal of progress has been made. In order to illustrate the amount of effort that is being devoted to unitization, the attached Table shows the approximate man hours that have been applied to the effort of negotiating the terms and conditions to be implemented. It must be realized that in light of the sparseness of data and the enormous size of this pool, it is imperative that every consideration be given to the possible factors and future events that may.effect unitization This, unfortunately, requires time. However, definite progress has been made and every effort is continuing to lead to as early an unitization as possible in order to optimize the development of the field and to protect the envir?nment of the North Slope. It was felt that a report on the specific progress by con~littees and subconm~ittees would not assist the Coir~nittee at this time, however, we wou].d like to point out certain areas of progress. The Legal Subcommittee has prepared a draft Unit Agreement which has been Co~.~,'.m_~.~{~e. ~,.hey are currently discussed with the Oil & Gas Conservation ~ '*-~ ~ ' working on an Operating Agreement° The Geological Sub~conmmittee has prepared geological maps and has reached agreement on the interpretations for the majority of the field. It is hoped that complete resolution will be possible in the near future. We would especially like to indicate to the Committee that, although unitization has not been completed, benefits are already being derived from pre-unitization efforts. The Environmental Subco_mmittee is actively engaged in studies to protect the ecology and to conserve the resources of the area. The Operations Subcommittee is coordinating operations on the Slope to minimize surface usage and disturbances. In addition, the guiding principle behind the pre-unitization negotiations is to develop a plan of unitization that will optimize conservation and protect correlative rights in accordance with the State Statutes. /; . ./ ,... -~. · , ,, "%. \ O(:tol.,e].' 29, JflO9 Sl:and:trd Oil Co:v. pany of Ca]ilo'mia. --~ _ ]?. O. ]_,ox 3,J95 San I,'rancisco, California 9:1120 ]?hil]Jps Pet]'oleum Co]nlmUy 1300 3. ecurity Life ]:,uilding DO]IV(:]?, Colorado 80202 Att¢ hi. ion ?;'Ir. C. \V. Corbett. Mobil Oil Corporation 612 Flower Street Los Angeles, California 90054 ltunt ])etrolcum Corporal:ion 2900 .F,.rst. ~xnt:~.on..] ~ank '" " ]~ttflomg Dallas, Texas ,z ~o 02 Am er ada- }Ies s ~ X P. O. ]-,o: 20,1:0 Tulsa, ()hlahoma 74102 Getty 0~1 Company P. O. ]3ox ]:'104 tlouston, Texas 77001 Louisiana I,,.uct & Ex])lorat/on Co P. O. ]3ox 60350 ,c_; ~.,-' o-i,-, , New Or]cnn , Lo.,~o.,,na 70160 M arnt hon Oil Comi)any 539 S(,uth hi ].,'ind]ay, O]tio -158-'!0 Proposed Cooperative Dcvelopn~e,,;t ]~rudh,'.~e. ].,, y Field 'YOU (;:t¢:]l ]l:'tVc' 1%'011 [t!i'lli:-;;i.:'Ct with by Ittl(~ }K'[WOCIi. . []'tO tll'tcl~'l'::;i¢¢'l"d,, ~ , ]Ot),~t,~'~, , l~a~;c 2 Oclo!;cr 29, ]9(;9 oil and gas in[:crva] ,sand body '..vllJch xx'as encounLercd ~n []~e ]?rt?d]~oc StaLe No. 1Well between thc dcl'~tl~s of S,0GG feel subsea and thc top of thc ca~:!:,onatd formation at 8,747 feel: sui0sea (]~cre/naftcr called '(Pcrmo- Triassic"). ~ou each hereby are given ail opporh~nfi:y to join with us the unitization project v:hieh is thc sul_~jcci: matter of that letter, wfi:h the . each separate Permo-Triassic reservoir under]yJng the unit area, ~V]ICI1 ' r-. ,- ack,ned, will constituLe a Sel~arat. c oil rim m~d a separate gas cap l)artJcil)ating area or area(s). The 1)robable first fl~tial parLi- cipating area(s) lie East of the lfl~e lal0eled on Exl-~fl0it A-1 aiiached ~ , hereto as "Particfpating Area"; such are,.(s) may'10e adjusted at the v, paragraph 2 of the ]otter of August 6, ~69; times provjc,.:.d in 2. lhe plat att-.._.cned ho:reto as Exhil0il: A-lv,,ill 10e and hereby is su!0siu- tuted for the plat attached as Exhibit A to the aforesaid letter; 3~ lha.t such letter shall be and is hez-ei0y amended to include each of y6u as a p,.r~y hereto ~, ~d, the santo force and effect as if sum ]_otter, as so amended had 10sen executeo a~m/o~, accepted by you and by a~.I of us; e l.he letter of August 6, 1969, as herein amended and ratified, is to Le construed solely as a commitmen~ on the part of each party to said ]etl.er to negotiate in good ~¢~.~]~ ~,,;~h the other parties to achieve un~.t.- ization in aeeordanm with the principles set forth therein. Such 1et- tot shall not commit any party to ~he execution of any document which proves unacceptable to it. Neitl~e~' shall the execution of this letter (or the ]eLi. er of August 6, 1969) be conshtued as a waiver by any lmrty of :my lega], or equitable right whic]~ it otherwise would have; provided that nothing herein shall be construed ~o negate or relieve ]}P, Atlanfic or IItm~ble of any co~nmfimenLs undertaken in or pur- suant l:o the leiter of Augttst 6, 1969; any ,,co]o,,~c,,,1, seismic, well or tel,tied information concorning tho ]ands within the unit: area, as s]lown on ]~xhibft. A-l, whid~ we may :-hake avail:d01e to you pt~rst,a~l: to toward formation of tho unit shall bo held co~[idc~tti:ti by you and . ~ot be (lisc']oscd l~y you to anyone who has not ac. cel~icd ii,is letter prior to eonstm~n):tt/on of llte Unit Azreeiucnt, or April 1, 15)70, v.,l~Jc]~'vc'r Js ]atcr, w;t!':ou~ our ]9(;9 April 2 ]970 ];~ is anticipated [-h,,u p~d:~]~a announccmcnt of the m~it wi].l be made aa [:he 1;'Je]d !~uiea ]aearin[f on Novc:mI)er ]3/:h. Pre-unit eOml~ fl[ ces are being form cd and recomm en. dation for handling- of ]mpo,:~.anf: mattera; w~].l be fort.])coming- If you .q,o-.r,e to jo~n wi~h us, and v,'H:h such of the o~ber addressees .. this ]e~ter as agTee to join Jn the tmdertakh~g described-h~ said le~.~z, as hereSn amended, please so indicate by exeetd:lng and by return~t~g copy of this letter to each of the undersigimd. We woukl appreciate your reply to this letter by November :10, buL in att5, e,.e,,.t, not later than January i, 1970. Yours: very truly, ATLANTIC ]~ICI-IFIELD CO?~ftOANY t~. O. Box 2819 Dallas, Texas 75221 139 O]'L COI~PO]~A:i'ION 13y · 620 ]?ifth Avenue New York, New York ~0020 Oc{ (;ba]' © 9, _if)~'" ACC];; ])'.I']':D AND AG]ti:: ED '.i?O Thi s (laI, of , ]969 STANDAI2D OIL COMPANY OF CALl], 135, I~HILLI]?S t E I~]-,OLI:,UI~ C025 -]PANTY OIL COi'~PORATION tIUN'[~ PETP~OLEUM COR]?ORA'FION A~'~iEJ-IADA--iII'E SS GE'J'TY OIL CO},I])ANY By ]'~OUiS)ANA LAND iMA}..~A J. II.O:N O]i]-, COMPANY Tole'2;-. , -'-2.12 753 23.l$ T. F. S~.: .i _')'. a',,,' Auto,st 6, 196.9 /317 Oil Coq)oration 620 Fifth Avenue New York, New York 10020 Humble Oil & Refining Company P. O. Box 2180 Houston, Texas 77001 Proposed Cooperative Development Pradhoe Bay Field Gentl em on: In order to promote conservation, t'o increase ultimate recovery, to eliminate unnecessary dr]ll.~ ~, to avoid waste, and to in. sure each participant a reasonable o~portunity to recover its fair share of the oil and gas in place, it appears desirable to us that ~i~e oil and gas interval sand body which Was'e,mom~e~'~ ' + ,~oclc._. in ] ~ J'~ '. Pruc nee Bay Sc.te No. 1 Well betxveen the depths of S, 050 feet subsea and the top of the-- carbonate formation at 8,747 feet ' ~ SllO~ OR ~S determined by reference to dual induction io~ of said well dated March D, 1D68, and furnished the parties ])ereto underlying the trait grea out- lined on the plat attached hereto as ~;xa,o~.~ A be developed, operated and proau~ed as ~ ~qe unit area had been included in a single lease, Acq coza]ns]3, we propose that nppropri~- ,~,.e ic~al, and unitization comrniti:ees be appoin[ed to con~mence work immediately after the ne:dc competitive State ]ease sale (expected about September I1, i969) to agree on definitive forms of a Unitz~" ~'- ....... ce],e,~ and a Unit Opera''~' [.n,~ Ag'reement which would, among other things' 1. Estab].ish separate participating areas 'for the oil rim and the gas cap each with sepa- rate ownerships w/thin thc unit area based on -2- oil ori/,.inally in place hud ~;as ori2-inally in pl:~cc with each tract in each partici- 1)nting' area l)cm~5 ailocatc,~ its appropriate t)erceniagc of production under the Unit .~,c, xx'~i each tract workin~ iht-crest A[~rccmcnt · ' ~ owner benrin~ tl~e royalties, ovcr~ ro5 ,.t~ties and productiou 1)ayments on tion allocated to the particular tract and other lease burdons applicable to such tract. Any lease covering lands within the area proven to be productive in the same sand interval and subsequently acquired by any party hereto may be added to the unit the same basis. Each. participant shall take its share of the oil and gas in kind and separately shall dispose of its share of the ' production. In any e~.en~ ti~c oe~.enc of discovery royalty on production allocated to tl~e lease on wMch pzmdJme Bay State No. 1 well was er~l~d shall be shared equM. ly by Itumble and Atlantic' Richfield. . tn].cla~ separate determination 2 Make' '~' ~ of oil and gas originally in place underlying separately owned tracts included within the unit area outlined on Exhibit A, by April l, 1970,. based on data available as of September 30, 1969 and another separate de[ermination of oil and gas ; originally in place underlying sep~.r~el,, oxxmed tracts included wiflfin the unit area ~[ .......... E~fl)it A, by 3anuary 1, 1573, utilizing dat~ available as of July 1, 1972. A final and 'separate determination of oil and gas or/gSna!iy in place underlying the separately owned tracts included within the unit area will be made by ffanua~3' 1, 1976. 3. Each party shall consult with other parties hereto ss to location and projected depths to be drilled on all wells projected for completion in the sul)jcct sand in order to assure an orderly dcveiop- mcnt of thc field in accordance with sound cng-i- netting principles..Notwithstanding anything herein At. lan~icF~ichiieldCom?any -3- to the contrary, each party at its; solo risk, co.~_;t: and exlm'nr-.-'.c shall bo free lo (_~veloi) its own Ica;cos with WlirtLOVCl' drill ii, E; or activi[y itaione sees ,tr.. It is con that the unit agrccmen[ at;d tho unit opcrat, in7 a.grccmcnt.makc appr°pri.at-e i~vcstmen6 adjustment as to such prior however, tho unit shall not be uecessarily obligated to pay for wells not a~eed u[mn by the above consultation. ~.. ti~o oil r a Permit the o~;mers of _v.- i.m. participating area to store, at their sole cost, risk and expense, sO!ut, ion gas in the gas cap or in anoflmr appropriate sand uudcrlying the . unit arca. Since a given well ~i'f~ult:meodsl.' may produce oil, solution g'as, and gas cap g'as, a formula will be mc~uc~ed in the operating,,~*~--'~°~ ment setting out a med~od of separately measuring and accounting for such products where that condition occur2.' . 5. Provid6 ~or possible expansion of the . ~ rpa~.,.~ oil unit area and revision of d~e oart~c' *;',~ rim and gas cap areas, on the basis of oil and gas respectively origiualiy in place, with provisiong for handl i.n~ investment adju stmenis, prior production.and other relevant ' ~* expansion and revision. 6. Provide for more than one Operator, with BP being one of the operators. 7. Ih-ovide for formulas that will allocate the relative production from the gas cap and the oil rim. 8. The participants in the oil rim partici- pating area agree to thc objective of development of the field as quickly as is economically prudent so as to permit each such participa~c a level of Atlantic ~ichlicldCo!ap,'~nY -4- offtakc not 1,_,h:r '~ ..... Jar, uar:: 1976 or t-least three pcrccnL 6,.,') aummlty of tho oil oriF;ina!ly in i)l.:~ce under thc !cases prescutly ox~ncd or t.o bo obtained by each of the partiCil)at~ts within the unR area. All tho foregoing is subject to valid rules and reg'ulations of' the o~,_~te ~.c~:al,¢~- Agency having jurisdiction and to applicable laws, rules and regnlations of rite Sta~. of Alaska and the Government of fl-m United States.. If the above is in accordance with your understand- · ~ please execute and ret-urn to us one copy of ltlo, ~his letter. " Yours very truly, T.F. Bradshaw · : ACCEPTED AND AGREED TO 1969 TFB/sa PRE-UNIT ORGANIZATION B.P. NO. PROPOSED PRUDHOE BAY UNIT MANAGEMENT COMMITTEE l STEER IN G COMMITTEE I ENVIRONMENTAL GAS CONSERVATION SUBCOMMITTEES iRESERVOIR ENGINEERING I ACCOUNTING i i, GEOLOGICAL PLANNING TAX LAND AND TABLE .._ e~_ngs of S~fbcommittees to Date A~proximate Man t{ours on Me ~' Sub cormmit tee Ac count ing 11 Enviromnental 12 Field/Dev. Planning 7 Gas Conservation 5 Geological 10 Operations 12 Reservoir Eng. 15 Land and Legal 12 Tax 8 No. of Formal Meetings Time Man/Hours 1,900 I,i00 2 , 300 6,500 7,000 1,20u 42,500 7,200 600 In addition to the above major subco~umittee meetings and preparatory work, various small task forces have been conducting work on an almost continuous basis. STATE OF ALASKA HEARING - PRUDHOE BAY SADLEROCHIT OIL POOL ENGINEERING DATA Testimony of B. C. Anderson At the previous hearing, the Alaska Oil and Gas Committee requested certain reservoir data from the Sadlerochit Oil Pool. Some data were released at that time and we have additional data that we would like to present now. Exhibit 1 gives core data for 23 wells cored in the Sadlerochit Forma- tion. These are all the core data that have been processed. Average porosity and permeability data are shown for the entire cored interval in each well. Porosities were measured either by the Boyle's Law or resaturation method and samples were averag.ed arithmetically for pur- poses of this testimony. Cores with less than 1 md. permeability.were excluded from both porosity and permeability data. Air permeabilities are' reported except where it is indicated that the Klinkenberg correc- tion has been made. The average permeabilities given on the exhibit are arithmetic averages of the well samples. Exhibit 2 shows reservoir pressure data available from seven of the ten wells shown on the BP geological cross sections. These data rep- resent eithe"r static shut-in tests or the projection of buildup data to an infinite shut-in time. The exhibit shows the perforated inter- val, the test depth or the depth of the bottom hole pressure bomb, the measured static bottom hole pressure at the test depth, the recorded temperature at the test depth, and the static bottom hole pressure corrected to a 9,000' ss datum. This datum is roughly the base of the oil column. The data given here is very representative. The averag~~' Engineering Data Page 2 reservoir pressure at the 9,000' ss datum for the 7 wells on Exhibit 2 is 4460 psig. An average of 57 pressure tests in 20 wells is 4462 psig. If the Committee desires a tabulation of the type shown on Exhibit 2 for the 57 available tests, then on your request we will compile this data and get it to the Committee before the official close of this hearing. Exhibit 3 shows the PVT analyses of seven reservoir fluid samples taken from the Sadlerochit Oil Pool. In addition to the perforated interval, the sampling depth, recorded temperature, laboratory determined bubble point pressure, flash f(~rmation volume factor, differential formation volume factor, solution gas-oil ratio, oil viscosity at bubble point conditions, and oil gravity are given. We feel that the BP 27-11-14 analysis is probably the most representative analysis available for the bulk of the oil column. The 27-11-14 well is centrally located areally and the well was selectively perforated over an interval of 300'. With these perforations, the fluid sample was a composite of the major portion of the oil column. The flash formation volume factor of the BP 27-11-14 well sample reported is 1.390 rvb/stb. Out of 7 available PVT analyses, the shallowest short interval sample was taken from 8692-8707' ss (a 15 foot interval) in ARCO's 4-10-15 well and gave a flash formation volume factor o'f 1.399. The deepest interval was from 8936-8986' ss (a 50 foot interval) in Placid's 3-10-13 well which gave a flash formation volume factor of 1.307. Engineering Data Page 3 Exhibit 3A shows a compositional analysis of the reservoir'fluid sample taken from the BP 27-11714 well.. Exhibit 4 shows compositional analyses of produced gas cap fluids from the ARCO-Humble 10-11-14 well. This is our Prudhoe Bay State #1 well. The data includes analysis of separator gas, separator liquid, specific gravity of the separator gas and hydrogen su.lphide content of the gas. Exhibit 5 shows formation water data for the Sadlerochit Pool, Al- though other samples of formation water have been taken, the data reported for the sample from the BP 31-10-16 well is very representa- tive data. This test produced formation water to the surface. The exhibit shows the water salinity in Mg/L sodium chloride, the total solids, measured resistivity, and specific gravity of. the sample. Exhibit 6 shows representative test data for four development wells in the Sadlerochit Oil Pool. Other tests have been made but most were for other purposes and are not representative of the initial capacities of development wells. Data of a general nature includes the well lo- cation, date of the test, the perforated interval and net feet of perforations open. Specific data concerning these tests being report- ed include the oil rate, gas-oil ratio, water cut, flowing wellhead pressure, flowing bottom hole pressure, oil gravity, and specific productivity index calculated from the test. These four wells were tested at different rates and under different conditions. We feel that they are capable of similar rates under similar test conditions as indicated by the specific P.I.'s. STATE OF ALASKA HEARING - PRUDHOE BAY SADLEROCHIT OIL POOL STATEMENTS BY LEGAL COUNSEL (Re: Items 3 through 8 on the call of the hearing) John Scott Mr. Chairman, Members of the Alaska Oil and Gas Conservation Committee, I am John Scott. I am appearing before you as legal counsel for Atlantic Richfield Company. I will suggest some minor changes to three of the rules contained in Conservation Order 83-B. Additionally, some very general statements and observations regarding Items 3 through 10 on the call of this hearing will be made. II tern 3] First, let me comment briefly on Item 3, "Well Spacing". At the first Prudhoe Bay Field Rules Hearing held in November of 1969, Atlantic Richfield Company requested 640-acre spacing for the Prudhoe Bay Field. In the case of the Sadlerochit Formation, our spacing proposal was supported by all industry representatives who expressed their position at the hearing. In testimony, we supported our proposal on the basis that the field was in an early stage of development and more data was needed. We requested wide spacing to prevent the drilling of unnecessary wells until the field could be developed to a point where its limits could be properly defined and data could be gathered that would enable us to determine proper spacing for the field. The desirability of early wide spacing for the Sadlerochit reservoir is consistent with the concepts presented by the Interstate Oil Compact Commission in their booklet titled, "General Rules and Regulations for the Conservation of Oil and Gas", published in 1969. We, therefore, have no objections to the continuation of the present 640-acre spacing rules provided by Conservation Order #83-B for the Prudhoe Bay Sadlerochit Oil Pool, and request no substantial change in the basic spacing rules. Accord- ingly, we stand on the record of our previous testimony presented at the November, 1969 Prudhoe Bay Field Rules Hearing insofar as concerns the justification for 640-acre spacing for the Sadlerochit Oil Pool. We will, however, suggest one minor change to Rule 2 of Order #83-B, namely, that the figure 600 acres be changed to 575 acres. Since the earth's longitudinal lines converge as they approach the North Pole, governmental sections on the western edge of each range decrease, in size below the uSual 640-acre section as you move northward. We request this change to Rule 2 in order to accommodate drilling on the smallest governmental section in the Prudhoe Bay Field Rules area which smallest section contains approximately 577 acres. This change would, we believe, avoid some undesirable administrative inconvenience. [Items 4, 5 & 6] Regarding Items 4, 5 and 6 on'the call of the hearing (per- taining to casing and cementing requirements, bottom-hole pressure survey requirements, and gas-oil ratio test requirements), we have nothing to present or suggest except that the existing rules remain as they are. [I tern 7] Regarding Item 7 on the agenda for this meeting (covering "Methods of Preventing Uncontrolled Flows") we do suggest one change the result of which will be to require automatic shut-in equipment to be installed below the base of the permafrost, rather than just 200 feet below the surface. More specifically, we recommend that Rule 5 of Conservation Order 83-B be changed to read as follows: "Upon completion, each well shall be equipped with a suitable safety valve installed below the base of the permafrost which will auto- matically shut-in the well if an uncontrolled fl ow occurs." This change will reflect the actual practice of the North Slope operators and, I believe, the desires of the committee as reflected by recently proposed statewide rules. We will further suggest that Rule 4 of .Conservation Order 8'3-B be changed so as to reflect language contained in your recently proposed statewide rules (namely, llAAC 51.095). The proposed change in Rule 4 would also allow the use of higher working pressure blowout preventers than required for formation control without the requirement for unnecess- arily high test pressures. Specifically, we suggest that Rule 4 be changed to read as follows: "Rule 4. Blowout Prevention Equipment and Practice. (a) Before drilling below the casing string required by Rule 3(c), all drilli remotely controlled blow one equipped with pipe r and one bag type. API S working pressure - 10,00 shall be installed prior Triassic formation. All include a drilling spool side outlets (if not on a three-inch minimum (or and a fill-up line. All minimum workin, g pressure formation pressures reas area at the depth being factors. T.he dritling s above and one below the operations with the kel will be conveniently lo with rotary subs for al valve to be an "inside spring-loaded valve typ the manually-operated b (b) All blowout preven emergency valves and ch tested to the manufactu pressure when installed once each week thereaft approval of BOP equipme pressure than that req the operator will not equipment to a pressur would be required for (a) provided the appro a statement of the ope the lower pressure. B tested to the recommen installed and to 50% r once each week thereaf recorded on written da (c) All blowout prev quately protected to the existing weather venter equipment shal operation during each preventer equipment s good es tablished prac be in good operating ng wells shall have three out preventers, including ams, one wi th blind rams eries 1500 (5,000 pound 0 pound test pressure) to penetrating the Permo- such equipment shall with three-inch minimum the blowout preventer body), equivalent) choke manifold, equipment shall have a capable of withstanding onably expected in this drilled wi th adequate safety tring will co~ntain o-ne val've kelly during all circulating ly. Two emergency valves cated on the drilling floor 1 connections in use, one blowout preventer" of the e and the second to be of all valve type. ter rams, kelly valves, oke manifolds shall be rers' recommended working or changed and at least er. An operator may request nt rated at a higher Working ired by (a). In this event e required to test the BOP in excess of that which he equipment specified under ed drilling permit includes ator's intent to test at g-type preventers shall be ed working pressure when commended working pressure er. Test results shall be ly records kept at the well. enter equipment shall be ade- insure reliable operation under conditions. All blowout pre- 1 be checked for satisfactory trip. The use of blowout hall be in accordance with tice and all equipment shall condition at all times." [I tern 8] The next item on the call of the hearing, Number 8, covers the subject of "Administrative Approvals". On that subject, we have no change to suggest or other comment to make. [Items 9 & 10] Regarding Items 9 and 10 on the agenda for this hearing (covering "Plans for Disposition of Produced Gas" and "Plans for Reservoir Pressure Maintenance"), I will call on Mr. Ralph Cox, Resident Manager of Atlantic Richfield Company in Alaska. Mr. Cox will be speaking to you, not as a scientific or technical witness, but in his management capacity. Therefore, it should not be necessary for him to enumerate his technical qualifications. STATE OF ALASKA HEARING - PRUDHOE BAY SADLEROCHIT OIL POOL PLANS FOR DISPOSITION OF PRODUCED GAS Statement By R. F. Cox Our current field development plans with regard to the Sadlerochit Reservoir include plans which are directed towards the conservation of produced gas in accordance with Rule 8 which provides "The venting or flaring of gas is prohibited except as may be authorized by the Committee in cases of emergency or operational necessity". Immediately f(~llowing the State Lease Sale late in 1969, the ll parti- cipating companies formed a Pre-Unitization Gas Conservation Subcommit- tee to study gas handling and gas utilization. More recently, The Ralph M. Parsons Company has been employed to make studies and recommen- dations regarding gas handling facilities for the Prudhoe Bay Field. The studies will cover various alternatives for process design, gas gathering, compression and injection equipment. Consideration will be given to several different combinations of injection and/or sales programs. This study will evaluate the feasibility of various gas gathering systems and central compression plants with facilities that can be converted from injection to transmission purposes should this prove to be desirable. This is only a brief summary of a great deal of work that is under way which will provide the basis for specific detailed plans for conser- vation and beneficial use of the North Slope gas reserves. While it is recognized that our statement does not provide specific plans for disposition of produced gas, we do hope this Committee recognizes that Plans for Disposition of ProdUced Gas Page 2 it is impractical for the operators to be any more specific at this time. In the meantime, Rule 8, as written and adopted by the Alaskan Oil and Gas Committee for Prudhoe Bay Field, effectively prevents waste and we see no reason for changing this Rule. STATE OF ALASKA HEARING - PRUDHOE BAY SADLEROCHIT OIL POOL PLANS FOR RESERVOIR PRESSURE MAINTENANCE Statement By R. F. Cox Plans for optimizing recovery are dependent upon many factors which are currently unknown and could be contingent on the actual reser- voir performance under producing conditions. Plans for projects, whether required for the whole pool or only spec- ified portions, will be based on injecting the necessary volumes of fluids, if and when the reservoir performance studies so dictate, to optimize oil recovery consistent with good reservoir management. Reservoir simulation work is being, and will continue to be, carried out. The results of these studies should indicate the possible vol- umes of injection fluids and injection points that may be required to increase recovery under various reservoir voidage rates and producing mechanisms. The results of the simulation work will become more reliable as the field is fully defined and further data is generated. John Scott [Conclusion] That concludes Company. Alaska, appears the presentation by Atlantic Richfield I yield to Mr. Harlan Flint, Attorney for BP Inc., who will comment on the final item that on the agenda for this hearing, namely, "Plans for Unitization". MOBIL OIL CORPORATION TESTIMONY POOL RULE HEARING PRUDHOE BAY SADLRROCHIT OIL POOL CONSERVATION FItg NO. 98 FEBRUARY 9, 1971 P.J. Trimble Alaska Division Attorney Mobil Oil Corporation INTRODU~ION In November, 1969, a hearing was held to establish pool rules for the Prudhoe Bay Field. At this hearing, BP Alaska, Inc., submitted a definition of three pools for consideration. One of these pools was 'called "The Prudhoe Bay Sand pool". It was defined as the accumulation of oil and/or gas common to and which correlates with the accumulation found in the Atlantic Richfield/Humble Prudhoe Bay State #1 well between the depths of 8,110 feet and 8,680 feet. BP Alaska, Inc., described the accumulation in the interval as consisting of three formations, which they called the Oxytoma, Shublik and Sadlerochit. The Oxytoma formation has subsequently been renamed the Sag River Sandstone and will be referred to by this name. throughout the remainder of this testimony. Little data was presented at the previous hearing on the Sag River and Shublik formations. As a result, the Conservation Order No.83-B that was issued following the hearing established field rules for the Sadlerochit formation only. It was noted in the Order that there was insufficient evidence to define the Sag River Sandstone as an oil pool. The Shublik formation was not mentioned by name in this Order, but it was stated that the Sag River and, Sadlerochit formations were separated by 40 to 150 feet of shales, limestone and phosphate rocks which may consti- tute a Permeability barrier. We feel that there now is sufficient data to Justify expanding the interval covered by the existing Sadlerochit field rules ~to include the Sag River and Shublik formations. We will present Engineering and Geologic testimony to substantiate this position. (1) 2/8/7! RESERVOIR ENGINEERING TESTIMONY H.N. Porter Alaska Division Reservoir Engineer Mobil Oil Corporation Mr. Chairman, it will be the purpose of my testimony to show that the Sag River and Shublik Formations are hydrocarbon-bearing over a wide area as indicated by well test results and to state reasons why we recon~nend that these formations be included with the Sadlerochit Field Rules and that downhole commingling of production be allowed. At this time we would like to submit Exhibit ~, which is essentially the same as BP A'laska's Exhibit ~, showing the location of wells where the Sag River and Shublik have been tested. The colored triangles on the map indicate that a test was made at the location; green to show Sag River tests @nd redto show Shublik tests. Tests that recovered hydrocar- bons are indicated by a solidly-colored triangle and tests that did not are shown by a colored outlinedtriangle only. Sag River Tests The Sag River sandstone has been tested in eleven wells. Ten of these tests yielded hydrocarbons rangingfrom traces to a recovery of 63 barrels of oil in one well and 2~million cubic feet per day of gas flow in another. One test showed no hydrocarbon recovery. Shublik Tests The Shublik has been 'tested in five wells. Three wells recovered oil ranging from a few barrels to a flowing rate of 2500 barrels per day. Another well flOWed gas at low rate. One test showed no hydrocarbon recov- ery. Compa?~son With the SadleroChit ' Liquid Gravity: Gravities of liquids recovered from the Sag RiVer (2) 2/8/71 ranged from 26.5° to 38.00 API. Liquid gravities from the Shub!ik r~.mnged from 27ol° to 27.4°API. These compare to a typical Sadlerochit gravity of approximately 28° API o This camparison can be only approximate because the Sadlerochit gravity varies depending upon depth and proximit~' to the gas/oil and oil/water contacts° It i~ expected that the liquids from the Sag River and Shublik vsx~y in a similar fashion. Bottom Hole Pressure.: The Sag River~ Shublik and Sadlerochit exhibit similar pressure g~adients with depth. Representative shut-in pressures fr~m tests of these intervals indicate an average pressure gradient of 0.507 psi/ft, for the Sag River and 0.500 psi/ft, for the Shublik. These compare with a representative gradient of 0.500 psi/ft, for the Sadlerochit. These data indicate that pressures of these formations are cor~patible. Gas,-Oil Ratios: Producing gas-oil ratios on Shublik and Sadlerochit · tests were similar. Areal Extent: As this Exhibit shows.~ the Sag River and Sh. ub!ik m.~e hydrocarbon-bearing over a large area. The overall distance between wells Which tested hydrocarbons in the Sag River is approximately 25 '~e overall distance between wells which tested hydrocarbons in th.e Shub!ik formation is approximately 10 miles. However: this Exhibit s'.how's th,at no wells have tested the Shublik ~ the eastern portion of the Field. ?k~om ot.~ evaluation of the Sb,ublik for~,~tion~ we expect it to be (3) 2/8/7~ bearing in this portion of the Field also. Economic and Op_e_rational Considerations These results show that these formations are hydrocarbon-bearing over a large area substantially the same as the Sadlerochit. We believe that it will be uneconomic to fully develop and deplete the Sag River and Shublik unless they are developed with the Sadlerochit. Probably there are limited locations where these formations can be economically drilled on their but we believe that full development over the area cannot practically be accomplished this way. Therefore, inclusion of these formations with the Sadlerochit operations should result in greater overall reserves for the area. We believe that inclusion and commingling of the Shublik and Sag River with the Sadlerochit will have no detrimental effect on the Sadlero- chit reservoir performance. If there is inter-formation co~nunication, the intervals should be produced as an entity for maximum efficiency and conservation. Industry efforts to unitize the Prudhoe Bay Field have included the Sag River and Shublik formations with the Sadlerochit. We believe that the Field Rules should include them also. (4) 2/8/71 GEOLO~IC~ TESTIMONY JoF. Vitcenda Alaska Division Production Geologist Mobil Oil Corporation Sag River and Shublik Formations Mr. Chairman, I will present testimony indicating three methods in which the Sag River and Shublik productive intervals could be in pressure and fluid communication with the Sadlerochit sand pool in the Prudhoe Bay area. The first method to be discussed is applicable to both the Sag River and Shublik zones. It is by means of displacement of these zones against theSadlerochit sand along non-sealing faults. The second two methods apply primarily to the Shublik productive zone. They are: (1) through vertical fracture conm~uqication and (2) through stratigraphic contact. I~t's consider the first method. I would like at this time to submit Exhibits B and C. Exhibit B is a structural section similar to BP Alaska's north-sOUth section'(Exhibit F). It goes'.across the fault shown between'the'ARc0/Hum~l~ Put Rtver' #1 well' and the BP Alaska, Inc.~. 32-11~14 well. The' l~lne.'0f ae¢t!~n~~ ~hg~a0n Exhibit C. The purpose of Exhibit B is to illustrate the method by which the Sag River and Shublik come in fault contact with the Sadlerochit Sand~ which may lead to pressure commanication between the formations, suggesting a common reservoir system. The Sag River - Shublik interval varies from approximately 90 feet on the east side of the field thickening to about 250 feet on the west in the vicinity of the SOCAL/Mobil 33-29E well. This thickening occurs mainly within the Shublik inter~al. The rate of thickening increases west of TllN, R13E. Exhibit B illustrates the Juxtaposition of the Sag River and Shublik inter~al against the Sadlerochit sand along the fault mapped on Exhibit C. The major faults shown on Exhibit C are based primarily on geophysical evidence~ other smaller faults have not been mapped. Similarity of the Sadlerochit oil/water contacts in the wells on either side of the fault suggests that this is not a sealing fault, thus allowing pressure con~nunication and fluid migration. The same situation occurs ~wherever there is sufficient displacement along a fault such aS to place the Sag River and/or Shublik porosity in contact with the Sadlerochit sand; that is, wherever fault displacements range from approximately 100 to 600 feet. The first figure could place the Sag River and Shublik in contact with the upper part of the Sadlerochit, while the latter could place these formations in contact with the lower portion of the Sadlerochit sand. Exhibit c illustrates areas where this situation occurs along mapped faults, but the concept is applicable along any fault with sufficient displacement~ Now we will consider the other two methods by which we believe the productive Shublik zones could be in conmmunication with the Sadlerochit sand. These are throl~h lateral or vertical stratigraphic changes which place the productive zones in virtual sand-to-sand or lime-to-sand contact with the Sadlerochit, and through fractures which may permit vertical (6) 2/8/71 communication between the Sadlerochit and the overlying productive zones. To illustrate these points I would like to submit Exhibit D. This is a west-to-east correlation section hung on the top of the Sag River sand. It includes wells from SOCAL/Mobil 33-29E on the west through the Mobil/ Phillips North Kuparuk well in Section 26, T12N, R12E to the Prudhoe Bay #1 well on the east--a distance of some 20 miles. The wells are relative- ly spaced, not to scale. This section illustrates the log character and correlation of the formations from the west to the east and h°w the formations tie to the Prudhoe Bay #1 well. The tops of the formations are those selected by the unit Geologic Subcommittee. Based on core data from the Mobil/PhillipS/SOCAL #7-11-12 well, which cored the complete interval, there is no obvious evidence of an unconfor- mity. between the Shublik and the Sadlerochit in the western area. Bedding both above and below the contact is conformable. Core descriptions indicate that the Shublik is made up of sandstones, limestones with some phosphatic sands, and inter-bedded limestone, silt- stone, and shale. Phosphatic minerals become increasingly abundant toward the middle part of this formation. This phosPhate is a characteristic feature of the Shublik. It occurs both in granular and nodular form and also as a cementing and replacement mineral It has a marked effect on radioactive logs, and it is this log response that has been used in select- ing the log top of the SadleroChit, although the lower sandy unit of the Shublik may more properly be related to the Sadler°chit sand. Referring again to Exhibit D; the sand at the top of the Sadlerochit in the Mobil/Phillips North Kuparuk well has characteristics con, non to 'both the Shublik sands to the west and the Sadlerochit sands to the east. It : (7) 2/8/71 is tripolitic, similar to typical Sadlerochit sand, and phosphatic, similar to Shublik sands. This suggests the possibility of a facies change and/or on-lap of the Shublik from the west onto the higher por- tions of the Prudhoe Bay structure. In any event, there is evidently sand-to-sand or lime-to-sand contact of the formations. This is the second method of possible comunication. Shublik core analyses show porosities ranging up to 28% with an av- erage of approximately 5%. ~ The same core data shows permeabilities / ranging up to a maximum of 5.80 millidarcies, but it is typically less than 1/I0 millidarcy. Porosities and permeabilities seem to be as var- iable as the lithology. It should be noted, however, that core analyses can not normally measure fracture permeability. Fractures have been noted in the cores. These fractures are important in providing permea- bility and could provide vertical con~nunication with the underlying Sadlerochit. Fractures, then, are the third possible method of con~nunica- tion. In su~ry, Mr. Chairman, we have indicated how the Shublik produc- tive units are in stratigraphic contact with the Sadlerochit sand and could be in vertical fracture comunication also. We have shown how the Sag River and Shublik are in fault contact wi~h the Sadlerochit sand across .apparently non-sealing faults. We conclude, therefore, that one could expect pressure and fluid com- n~nication between the Sag River, Shublik and Sadlerochit formations where any of these conditions exist. 2/8/71 SUMMATION By: P.J. Trimble Alaska Division Attorney Mobil Oil Corporation By the preceding testimony, we believe the following points have been sub st ant iat ed: 1. The Sag River and Shublik formations are hydrocarbon-bearing over essentially the same area as the Sadlerochit. 2. We believe it will be uneconomic to fully develop and deplete the Sag River and Shublik unless they can be developed and commingled downhole, with the Sadlerochit. 3. Unitization efforts are considering all three intervals for determination of equities. .4. It is in the interest of efficiency and conservation to pro- duce these formations as an entity. Failure to allow down- hole commingling probably will result in a decreased recovery of the State's natural resources. 5. It appears that the Sag River and Shublik could be in com- munication with the Sadlerochit under certain conditions. Therefore, we recomend that the existing Prudhoe Bay Sadlerochit Field Rules be amended to permit downhole commingling of production from the Sadlerochlt, Shublik and Sag River intervals. We further recon~nend that the vertical limits of the presently defined Sadlerochit Sand Pool be expanded to include the Sag River and Shublik for- mations: to wit, the intervals from 8110 feet to 8680 feet, as exhibited in the Prudhoe Bay #1 well: that the present Sadlerochit Field Rules apply to all, and that 'the combination be given an inclusive name, such as the Prudhoe Bay Pool or some other appropriate name. (9) 2/8/71 ' QUALIFICATIONS FOR EXPERT WITNESS DONN) I am a Senior Production Engineer with Mobil Oil Corpora- tion. I received a B.S. in Industrial Engineering in 1954. After nine years' experience in the oil industry in Venezuela and Oklahoma, I re- ceived an M.So in Petroleum Engineering at the University of Southern California in 1964. I have been employed by Mobil since 1964 and have been assigned to the Alaska Division, working on the Prudhoe Bay Field, since 1969. I ha~v~ worked on the Prudhoe Bay Unit Reservoir Engineering Subcommittee since its inception. I am a member of the Society of Petroleum Engineers and a past member of the Board of Directors of the San Joaquin Valley section of this 'organ- ization. I was the author of a paper in 1968 and Co-author of a paper in 1965. Both papers were presented at national meetings of the Society of Petroleum Engineers. · QUALIFICATIONS _~0R EXPERT WITNESS (H.N. PORTER) I am the Alaska Division Exploitation Engineer for Mobil Oil Corporation, and have been assigned to this position since October, 1969. In this capacity, I sUPer~ise all reservoir engineering work for Mobil's Alaska Division, which includes the Prudhoe Bay Field. I graduated from the University of California at Berkeley in 1953 with a Bachelor of Science degree in Petroleum Engineering. I joined Mobil in 1953, served a .term in the military, then returned to Mobil. in ].955. Since then, I have been engaged in various engineering assignments for Mobil in California, and have been in a supervisory capacity since ].966. I am a Registered Petroleum Engineer in the State of California, and am a member of the Society of Petroleum Engineers. QUALIFICATIONS FOR EXPERT WI~SS I am Division Production Geologist for the Alaska Division of Mobil Oil Corporation. I was assigned to this position in the latter-part of 1969, and am responsible for the geologic evaluation of Mobil's' producing opera- ~.tions in Alaska~. My formal education consisted of a course of studies at the University of Wisconsin leading to the Bachelor of Science degree which was granted by the University in 1956. Upon completion of post-graduate work at the University of Wisconsin, I was granted the Master of Science degree in Geology in 1958. As continuing education, I have completed numerous short courses associated with petroleum geology. My professional background consists of 13 years of varied geological experience in the employ of Mobil Oil Corporation. In these 13 years, I have alternated between~ Production Geology and Exploration Geology in the Rocky Mountain area and in Alaska with a short period in the Mid-Continent area~ During the past four years I have been working in variouS geologic provinces of Alaska, both as an Exploration geologist and, more recently, in Production GeOlogy again. Over the past two years I have concentrated on the geology of the North Slope and Prudhoe Bay. I have been Mobil's representative on the Prudhoe ~Bay Unit .Geologicat~.~Subcommittee since its in- ception. ~ · My professional affiIiations ~include membership, in the. American Associ~a- tion of Petroleum Geologists, the Wyoming Geological Association, and the Pacific Section of the AAPG. I am also a Registered Geologist in the State of California. . MOBIL OIL CORPORATION TESTIMONY POOL RULE HEARING PRUDHOE BAY SADLEROCHIT OIL POOL CONSERVATION FILE NO. 98 FEBRUARY 9, 1971 RESERVOIR ~WGINEERING TESTIMONY By' H.N. Port er Alaska Division Reservoir Engineer Mobil Oil Corporation ~r. Chairman, it will be the purpose of my testimony to show that the Sag River and Shublik Formations are hydrocarbon-bearing over a wide area as indicated by well test results and to state reasons why we recon~nend that these formations ~e included with the Sadlerochit Field Rules and that downhole conraingling of production be allowed. At this time we would like to submit Exhibit A, which is essentially the same as BP Alaska's Exhibit C showing the location of wells where the Sag ~River and Shublik have been tested. The colored triangles on the map indicate that a test was rode at the location; green to show Sag River tests and red to show Shublik tests. Tests that recovered hydrocar- bons are indi'cated by a solidly-colored triangle and tests that did not are shown bY a colored outlined triangle only. Sa~ River Tests .~ The Sag River sandstone has been tested in eleven wells. Ten of these tests yielded hydrocarbons ranging from traces to a recovery of 63 barrels of oil in one well and 2~ million cubic feet per day of gas flow in another. One teSt showed no hydrocarbon recovery. Shub]ik Tests The Shublik has been tested in five wells. Three wells recovered oil ranging from a few barrels to a flowing rate of 2500 barrels per day. Another well flowed gas at low rate. One test showed no hydrocarbon recov- ery. ..Comparison With the Sadlerochit L~i.quid Gravity: Gravities of liquids recovered from the Sag River (2) 2/8/71 INTRODUCTION By~ 2.J. Trimble Alaska Division Avtorne~' Mobil Oil Corporation In November, 1969, a hearing was held to establish pool rules for the Prudhoe Pay Field. At this hearing, BP Alaska, Inc., submitted a definition of three pools for consideration. One of these pools was called "The Prudhoe Bay Sand Pool!'. It was defined as the accumulation of oil and/or gas con, non to and which correlates with the accumulation found in the Atlantic Richfield/Humble Prudhoe Bay State #1 well between the depths of 8,110 feet and 8,680 feet. BP Alaska, Inc., described the accumulation in the interval as consisting of three formations, which they called the Ox.vtoma, Shublik and Sadlerochit. The Oxytom formtion has subsequently been renamed the Sag River Sandstone snd will be referred to by this name throughout the remainder of this testimony. Little data was presented at the previous hearing on the Sag River and Shublik fozmations. As a result, the Conservation Order No.83-B that was issued following the hearing established field rules for the Sadlerochit formation only. It was noted in the Order that there was insufficient evidence to define the Sag River Sandstone as an oil pool. The Shublik formation was not mentioned by nsme in this Order, but it was stated that the Sag River and Sadlerochit fomations were separated by 40 to 150 feet. of shales, limestone and phosphate rocks which may consti- tute a permeability barrier. We feel that there now is sufficient data to Justify expanding the interval covered by the existing Sadlerochit field rules to include the Sag River and Shublik formations. We will present Engineeri~ and Geologic testimony to substantiate this position. (1) ( ranged from 26.5° to 38.0°API. Liquid gravities from the Shub!ik ramged from 27.1° to 27.4°API. These con,pare to a t~pical Sadierochit gravity of approximately 28°API. This comparison can be only approximate because the Sadlerochit gravity varies depending upon depth and proximity to the gas/oil m~d oil/water contacts, It is expected that the liquids from the Sag River and Shublik vary in a simJ_lar fashion. Bottom Hole Pressuz~: The Sag River~ Shub].ik and Sadlerochit exhibit si.mil-ar pressure gradients with depth. Representative shut-in press~,='es f~om tests of these intervals indicate an average pressure gradient of 0.507 psi/ft, for the Sag River and 0.500 psi/ft, for the Shub].ik. These compare with a representative gradient of 0.500 psi/ft, for the Sadlerochit. These data indicate that pressures of these for~a'tions are compati'ble ~ Gas'Oil Ratios: Producing gas-oil ratios on Shublik and Sadlerochi't tests were similar~ Aze}al Extent: As this Exhibit shows~ the Sag Rive~~ and Shub!ik are .hydrocarbon-bem"ing over a 1.arge area, The overall distmnce between wells which tested hydrocarbons in the Sag Pal.vet is approximately 25 tulles ~ ~f. he overall distance between wells which 'tested hydrocm~bons in the Shubiik for~l.ation is approximately !0 miles. However~ this Exhibit, shows that: no wells have tested the Shublik in the eastern portion of the Fie].d E:~?om our e~aluation of the Shublik formation, we expect it to be hyd~ocarbon (3') S/8/7.! bearing in this portion of the Field also. Economic and O~erational Considerations These results show that these formations are hydrocarbon-bea~ing over a la~ge area substantially the same as the Sadlerochit. We believe that it will be uneconomic to fully develop and deplete the Sag River and Shublik unless they are developed with the Sadlerochit. Probably there are l~r~ted locations where these formations can be economically drilled on their own~ but we believe that full development over the area cannot practically be accomplished this way. Therefore, inclusion of these formations with the Sadlerochit operations should result in greater overall reserves for the s~ea. ~' We believe that inclusion and commingling of the Shublik and Sag River with the Sadlerochit will have no detrimental effect on the Sadlero- chit ~servoir performance. If there is inter-formation co~mm~nication, the intervals should be produced as an entity for maximum efficiency and conservation. Industry efforts to unitize the Prudhoe Bay Field. have included the Sag River snd Shublik formations with the Sadlerochit. We believe that the Field Rules should include them also. ( 4 ) 278/71 By- J.F. Vitcenda Alaska Division Production Geologist Mobil Oil Corporation GEOLOGICAL TESTIMONY ~.ag River and Shublik Formations Mr. Chairman, I will present testimony indicating three methods in which the Sag River and Shublik productive intervals could be in pressure and fluid communication with the Sadlerochit sand pool in the Prudhoe Bay a~a. The first method to be discussed is applicable to both the Sag River and Shublik zones. It is by means of displacement of these zones against the~Sadlerochit sand along non-sealing faults. The second two methods apply primarily to the Shublik productive zone. They are: (1) through vertical fracture conm~mication and (2) through stratigraphic contact. Let's consider the first method. I would like at this time to submit Exhibits B and C. F~hibit B is a structural section similar to BP Alaska's north-sOUth section (Exhibit F). It goes.'.aeross the fault shown between'the~ARc0/Hum~l~ Put P~ve~'#1 well' and the. BP Alaska, Inc,, 32-11-14 well, ri'he' l'.~.e.:0f se, cti,~n.' ~,, ~.5..(~. on Exhibit C. The purpose of Exhibit B is to illustrate the method by which the Sag River and ShUblik come infault contact with the Sadlerochit sand, which may lead to pressure conmmnlcatlon between the formations, suggesting a common reservoir system. The Sag River - Shublik interval varies from approximately' 90 feet on ,, the east side of the field thickening to about 250 feet on the west in the vicinity of the SOCAL/Mobil 33-29E well. This thickening occurs mainly within the Shublik interval. The rate of thickening increases west of TllN, R13E. Exhibit B illustrates the Juxtaposition of the Sag River and Shublik interval against the Sadlerochit sand along the fault mapped on Exhibit C. The major faults shown on Exhibit C are based primarily on geophysical evidence: other smaller faults have not been mpped. Similarity of the Sadlerochit oil/water contacts in the wells on either side of the fault suggests that this is not a sealing fault, thus allowing pressure conm~nication and fluid migration. The same situation occurs 'wherever there is sufficient displacement along a fault such as to place the Sag River and/or Shublik porosity in contact with the Sadlerochit sand; that is, wherever fault displacements range from approximately 100 to 600 feet. The first figure could place the Sag River and Shublik in contact with the upper part of the Sadlerochit, while the latter could place these formations in contact with the lower portion of the Sadlerochit sand. Exhibit C illustrates 'areas where this situation occurs along mapped faults, but the concept is apPlicable along any fault with sUfficient displacement. Now we will consider the other two methods by which we believe the productive Shublik zones could be in communication with the Sadlerochit sand o These are through lateral or vertical stratigraphic changes which place the productive zones in virtual sand-to-sand or lime-to-Sand contact with the Sadlerochit, and through fractures which may permit vertical (6) co~7:?,unication between the Sadlerochit and the overlyir~4 productive To illustrate these points I would like to submit Exhibit D. ~nis is a west-to-east correlation section h,ang on the top of the Sag River sand. It includes wells from SOCAL/Mobil 33-29E on the west through_ the Mobil/ Phillips North Kuparuk well in Section 26, T12N, R12E to the Prudhoe Bay #1 well on the east--a distance of some 20 miles. The wells are relative- ly spaced, not to scale. This section illustrates the log character and correlation of the formations from the west to the east and how the formations tie to the P~dhoe Bay #1 well. The tops of the formations are those selected by the Unit Geologic Subcommittee. Based on core data from the Mobi'l/Phillips/SOCAL #7-11-12 well, which cored the complete interVal, there is no obvious evidence of an unconfor- mity between the Shublik and the Sadlerochit in the western area. Bedding both aboVe and below the contact is conformable. Core descriptions indicate that 'the Shublik is made up of sandstones, l~mestones with some phosphatic sands, and inter-bedded limestone, silt- stone, and shale. Phosphatic minerals beco~ increasingly abundant toward the middle part of this formation. This phosphate is a characteristic feature of the Shublik. It occurs both in grs_~ular and nodular foz~n and al.so as a cementing and replacement nfl.neral. 'It has a marked effect on radioactive logs, and it is this log response that has been used in select- lng the log top' of the Sadlerochit, although the lower sandy unit of the , Shublik may more properly be related to the Sadlerochit sand. Referring again to Exhibit D_; the sand at the top of the Sadlerochit in the Mobil/Phillips North Kupa~k well has characteristics common to 'both the Shublik sands to the west and the Sadlerochit sands to the east. It (7) /8/71 is tripolitic, similar to typical Sadlerochit sand, and phosphatic, similar to Shublik sands. This suggests the possibility of a facies change and/or on-lap of the Shublik from the west onto the higher por- tions of the Prudhoe Bay structure. In any event, there is evidently sand-to-sand or lime-to-sand contact of the formations. This is the second method of possible comunication. Shublik core analyses show porosities ranging up to 28% with an av- erage of approximately 5%.. The same core data shows permeabilities ranging up to a maximum of 580 millidarcies, but it is typically less than 1/10 millidarcy. Porosities and permeabilities seem to be as var- iable as the lithology. It should be noted, however, that core analyses can not normally measure fracture permeability. Fractures have been noted in the cores. These fractures are important in providing permea- bility and could provide vertical comunication with the underlying Sadlerochit. Fractures, then, are the third possible method of comunica- tion. In s~ry, Mr. Chairman, we-have indicated how the Shublik produc- tive units are in stratigraphic contact with the Sadlerochit 'sand and could be in vertical fracture comunication alSo. We have shown how the Sag River and Shublik are in fault contact wi'~h the Sadlerochit sand across .apparently non-sealing faults. We conclude, therefore, that one could expect pressure and f_].uid com- munication between the Sag River, Shublik and Sadlerochit formations where any of these conditions exist. 2/8/71 SUMMATION By: P.J. Trimble Alaska Division Attorney Mobil 011 Corporation By the preceding testimony, we believe the following points have been subst ant iated: 1. The Sag River and Shublik formations are hydrocarbon-bearing over essentially the same area as the Sadlerochit. 2. We believe it will be uneconomic to fully develop and deplete the Sag River and Shublik unless they can be developed and commingled downhole, with the Sadlerochit. 3. Unitization efforts are considering all three intervals for determination of equities. 4. It is in the interest of efficiency and conservation t° pro- duce these formations as an entity. Failure to allow down- hole commingling probably will result in a decreased recovery of the State's natural resources. 5. It appears that the Sag River and Shublik could be in com- mmaication with the Sadlerochit under certain conditions. Therefore, we recon~nend that the existing Prudhoe Bay Sadlerochit Field Rules be amended to permit downhole commingling of production from the Sadleroch~t, Shublik and Sag River intervals. We further reconm~end that the vertical limits of the presently defined Sadlerochit Sand Pool be expanded to include the Sag River and Shublik for- mations: to wit, the intervals from 8110 feet to 8680 feet, as exhibited in the Prudhoe Bay #1 well: that the present Sadlerochit .Field Rules apply to ali., and that the combination be given an inclusive name, such as 'the Prudhoe Bay Pool or some other appropriate name. (9) 2/8/71 QUALIFICATIONS FOR EXPERT WITNESS I am a Senior Production Engineer with Mobil Oil Corpora- tion. I received a B.S. in Industrial Engineering in 1954. After nine years' experience in the oil industry in Venezuela and Oklahoma, I re- ceived an M.S. in Petroleum Engineering at the University of Southern California in 1964. I have been employed by Mobil since 1964 and have been assigned to the Alaska Division, working on the Prudhoe Bay Field, since 1969. I hav~ worked on the Prudhoe Bay Unit Reservoir Engineering 'Subcommittee since its inception. I am a member of the Society of Petroleum Engineers and a past member of the Board of Directors of the San Joaquin Valley section of this 'organ- iZation. I was the author of a paper in 1968 and co-author of a paper in 1965. Both papers were presented at national meetings of the Society of Petroleum Engineers. QUALIFICATIONS FOR EXPERT WITNESS (H.N. PORTER) I am the Alaska Division Exploitation Engineer for Mobil 0il Corporation, and have been assigned to this position since October, 1969. In this capacity, I supervise all reservoir engineering work for Mobil's Alaska Division, which includes the Prudhoe Bay Field. I graduated from the University of California at Berkeley in 1953 with a Bachelor of Science degree in Petroleum Engineering. I Joined Mobil in 1953, served a .term in the military, then returned to Mobil in 1955. Since then, I have been engaged in various engineering assignments for Mobil in California, and have been in a supervisory capacity since 1966. I am a Registered Petroleum Engineer in the State of California, and am a member of the Society of Petroleum Engineers. QUALIFICATIONS FOR EXPERT WITNESS (J.F.WTCEN A) I am DiVision Production Geologist for the Alaska Division of Mobil Oil Corporation. I was assigned to this position in the latter, part of 1969, and am responsible for the geologic evaluation of Mobil's' producing opera- ~.tions in Alaska. My formal education consisted of a course of studies at the University of Wisconsin leading to the Bachelor of Science degree which was granted by the University in 1956. Upon completion of post-graduate work at the University of Wisconsin, I was granted the Master of Science degree in Geology in 1958. As continuing education, I have completed numerous short courses associated with petroleum geology. My professional background consists of 13 years of varied geological experience in the employ of Mobil Oil Corporation. In these 13 years, I have alternated between' Production Geology and Exploration Geology in the Rocky Mountain area and in AlaSka with a short period in the Mid-Continent area. During the past four years I have been working in various geologic provinces of Alaska, both as an Exploration geologist and, more recently, in Production Geology again. Over the past two years I' have concentrated on the geology of the North Slope and Prudhoe Bay. I have been Mobil's representative .on the Prudhoe ~Bay' Unit .Geological~Subcommittee since its in- Ception. · ~v professional affiliations .inClude membership, in tha American Assoc~.a- tion of Petroleum Geologists, the Wyoming Geological Association, and the Pacific Section of the AAPG. I am also a Registered GeologiSt in the State of California. MOBIL 0IL CORPORATION TESTIMONY POOL RULE HEARING PRUDHOE BAY SADLER~H~ OIL POOL CONSERVATION FILE NO. 98 FEBRUARY 9, 1971 By: P.J. Trimble Alaska Division Attorney Mobil Oil Corp. oration INTRODUCTION In November, ]969, a hearing was held to establish pool rules for the Prudhoe Bay Field. At this hearing, BP Alaska, Inc., submitted a definition of three pools for consideration. One of these pools was called "The Prudhoe Bay Sand Pool". It was defined as the accumulation of oil and/or gas common to and which correlates with the accumulation , . found in the Atlantic Richfield/Humble Prudhoe Bay State #1 well. between the depths of 8,110 feet and 8,680 feet. BP Alaska, Inc., described the accumulation in the interval as consisting of three formations, which they called the Oxytoma, Shublik and Sadlerochit. The Oxytoma formation has subsequently been renamed the Sag River Sandstone and will be referred to by this n~ne throughout the remainder of this testimor~¥. Little data was presented at'the previous hearing on the Sag River and Shublik formations. As a result, the Conservation Order No.83-B that was issued fOllowing the hearing established field rules for the Sadlerochit formation only. It was noted in the Order that there was insafficient evidence to define the Sag River Sandstone as an oil pool. ~e Shublik formation was not mentioned by name in this Order, but it was stated that the Sag River and. Sadlerochit formations were separated bY 40 to 150 feet of shales, limestone and phosphate rocks which may consti- tute a permesbility barrier. We feel 'that there now is sufficient data to Justify expanding the interval covered by the existing Sadlerochit field rules 'to include the Sag River ~d Shublik formations. We will present Fmgineering and Geologic testimony to subStantiate this position. (1) 2/8/7~ RESERVOIR ENGINEE~RING TESTIMONY H.N. Porter Alaska Division Reservoir Engineer Mobil Oil Corporation Mr. Chairman, it will be the purpose of my testimony to show that the Sag River and Shublik Formations are hydrocarbon-bearing over a wide area as indicated by well test results and to state reasons why we recommend that these formations be included with the Sadlerochit Field Rules and that downhole commingling of production be allowed. At this time we would like to submit Exhibit A, which is essentially the same as BP Alaska's Exhibit C, showing the location o'f wells where the Sag River and Shublik have been tested. The colored triangles on the map indicate that a test was made at the location; green to show Sag River tests and red to show Shubllk testS. Tests that recovered hydrocar- bons are indicated by a solidly-colored triangle and tests that did not are shown by a colored outlined triangle only. Sag River Tests ~. The Sag River sandstone has been tested in eleven wells. Ten of these tests yielded hydrocarbons ranging from traces to a recovery of 63 barrels of oil in one well and 2~ million cubic feet per day of gas flow in another. m One test showed no hydrocarbon recovery. Shublik Tests The Shublik has been tested in five wells. Three wells recovered oil ranging from a few barrels to a flowing rate of 2500 barrels per day. Another well flowed gas at low rate. One test showed no hydrocarbon recov- ery. Comparison With the Sadlerochit Liquid Gravity: GraVities of liquids recovered from the Sag River (2) 2/8/71 ranged from 26.5° to 38.0°API. Liquid gravities from the Shubtik ranged from 27o 1° to 27 ,4°API . These compare to a typical ~.d.~.er,~c..,~ gravity of approximately 28° /LPI. This comparison can be only approximate because the Sadlerochit gravity varies depending upon depth and proximity to the gas/oil and oil/water contacts. It is expected that the liquids fr. om the Sag River and Shublik vary in a similar fashion. Bottom Hole Pressure: ~i~e Sag River, Shublik and Sadlerochit exhibit similar pressure gradients with depth. Representative shu.t-in pressm::es fz'om tests of these intervals indicate an average pressure gradient of 0.507 psi/ft, for the Sag River and 0.500 psi/ft, for the Shublik. ~Ihese conpa~e with a representative gradient of 0.500 psi/ft, for the Sadlerochit. These data indicate that pressures of these fo~ma'tions are compatible. Gas-Oil Ratios: P~,oducing gas-oil ratios on Shublik and Sadlerochi't tests were sinzilar. Areal Extent: As this E~.htbit shows, 'the Sag River and Shublik are hydrocarbon-bearing over .a large a~ea. The overall distance between. wells which tested hydrocarbons in the Sag River is approximately 25 mi les, ~'te ove~'~all distance between wells which tested hydrocmrbons in the Shublik fo.~ation is approxi~'~tely 10 miles. However, this Exhibit shows 'that no we_].,ls have tested the Shublik i~ the eastern po~tion of the Field, .~¥om ouz" evaluation of the Shublik formation~ we expect it 'to be hyd:?oc~mrbon (B) bearing in this portion of the Field also. Economic and Ope~rational Considerations These results show that these formations are hydrocarbon-bearing over a large area substantially the same as the Sadlerochit. We believe that it will be unecono~ic to fully develop and deplete the Sag River and Shublik unless they are developed with the Sadlerochit. Probably there are limited locations where these formations can be economically drilled on their own~ but we believe that full development over the area cannot practically be accomplished this way. Therefore, inclusion of these formations with the Sadlerochit operations should result in greater overall reserves for the area.. We believe that inclusion and con~ngling of the Shublik and Sag River with the Sadlerochit will have no detrimental effect on the Sadlero- chit r~servoir performance. If there is inter-formation comunication, the intervals should be produced as an entity for maximum efficiency and conservation. Industry efforts to unitize the Prudhoe Bay Field have included the Sag River and Shublik formations with the Sadlerochit. We believe that 'the Field Rules should include them also. (4) 2/8/71 GEOLOGICAL TESTIMONY By: J.F. Vitcenda Alaska Division Production Geologist Mobil Oil Corporation Sag River and Shublik Formations Mr. Chairman, I will present testimony indicating three methods in which the Sag River and Shublik productive intervals could be in pressure and fluid communication with the Sadlerochit sand pool in the Prudhoe Bay area. 1~e first method to be discussed is applicable to both the Sag River and Shublik zones. It is by means of displacement of these zones against theSadlerochit sand along non-sealing faults. The second two methods apply primarily to the Shublik productive zone. They are: (1) throug~ vertical fracture conm~mication and (2) thrm~gh stratigraphic contact. Let's cOnsider the first method. I would like at this time to submit Exhibits B and C. Exhibit B is a structural section similar to BP Alaska's north-soUth section '(EXhibit F). · . It goes'across the fault shown between'the'.ARc©/HumDla'~ut R~ver' #1 well and the. BP Alaska, Inc,, 32-11-14 WeII, The' llne.'ef ~,. n' Exhibit C. ~fne purpose of Exhibit Bis to illustrate the method by which the Sag River and Shublik cmne in fault contact with the Sadlerochit sand, which ~)~,y lead to pressure conm~mication between the formations, suggesting a conmlon reservoir system. ~ne Sag River - Shublik interval varies from approximately' 90 feet on , 'the east side of the field thickening to about 250 feet on the west in the vicinity of the SOCAL/Mobil 33-29E well. This thickening occurs mainly within the Shublik interval. The rate of thickening increases west of TllN, R13E. Exhibit B illustrates the Juxtaposition of the Sag River and Shublik interval against the Sadlerochit sand along the fault mapped on Exhibit C. The major faults shown on Exhibit C are based primarily on geophysical evidence; other smaller faults have not been mapped. Similarity of the Sadlerochit oil/water contacts in the wells on either side of the fault suggests that this is not a sealing fault, thus allowing presst~re conmmmication and fluid migration. The same situation occurs wherever there is sufficient displacement along a fault such as to place the Sag River and/or Shublik porosity in contact with the Sadlerochit sand; that is, wherever fault displacements range from approximately 100 to 600 feet. The first figure could place the Sag River and Shublik in contact with the upper part of the Sadlerochit, while the latter could place these formations in contact with the lower' port.ton of the Sadlerochit sand. Exhibit C illustrates 'areas where this situation occurs along mapped faults, but the concept is applicable along any fault with sufficient displacement. Now we will consider the other two methods by which we believe the productive Shublik zones could be in communication with 'the Sadlerochit sand. These are through lateral or vertical stratigraphic changes which place the productive zones in virtual sand-to-sand or lime-to-Sand contact with the Sadlerochit, and through fractures which may permit vertical (6) 2/8/71 communication between the Sadlerochit and the overlying productive zones. To illustrate these points I would like to submit Exhibit D. This is a west-to-east correlation section hung on the top of the Sag River sand. It includes wells from SOCAL/Mobil 33-29E on the west through the Mobil/ Phillips North Kuparuk well in Section 26, T12N, R12E to the Prudhoe Bay #1 well on the east--a distance of some 20 miles. The wells are relative- ly spaced, not to scale. This section illustrates the log character and correlation of the formations from the 'west to the east and h°w the formations tie to the Prudhoe Bay #1 well. The tops of the formations are those selected by the Unit Geologic Subcommittee. Based on core data from the Mobil/Phillips/SOCAL #7-11-12 well, which cored the complete interval, there is no obvious evidence of an unconfor- mity between the Shublik and the Sadlerochit in the western area. Bedding both above and below the contact is conformable. Core descriptions indicate that the Shublik is made up of sandstones, limestones with some phosphatic sands, and inter-bedded limestone, silt- stone~ and shale. Phosphatic minerals become 'increasingly abundant toward the middle part of this formation. This phosPhate is a characteristic feature of the Shublik. It occurs both in granular and'nodular form and also as a cementing and replacement mineral. It has a marked 'effect on radioactive logs, and it is this log response that has been used in select- ing the log top of the Sadlerochit, although the lower sandy unit of the Shublik may more properly be related to the Sadler°chit sand. Referring again to Exhibit D, the sand at the top of the Sadlerochit in the Mobil/Phillips North Kuparuk well has characteristics con, non to both the Shublik sands to the west and the Sadlerochit sands to the east. It ; (7) ' 2/8/71 is tripolitic, similar to typical Sadlerochit sand, and phosphatic, similar to Shublik sands. This suggests the possibility of a facies change and/or on-lap of the Shublik from the west onto the higher por- tions of the Prudhoe Bay structure. In any event, there is evidently sand-to-sand or lime-to-sand contact of the formations. This is the second method of possible comunication. Shublik core analyses show porosities ranging up to 28% with an av- erage of approximately 5%. The same core data shows permeabilities ranging up to a maximum of 580 millidarcies, but it is typically less than 1/10 millidarcy. Porosities and permeabilities seem to be as var- iable as the lithology. It should be noted, however, that core analyses can not normally measure fracture pemeability. Fractures have been noted in the cores. These .fractures are important in providing permea- bility and could provide vertical comunication with the underlying Sadlerochit. Fractures, then, are the third possible method of comunica- tion. In summary, Mr. Chairman, we have indicated how the Shublik produc- tive units are in stratig~'aphic contact with the Sadlerochit 'sand and could be in vertical fracture comunication also. We have shown how the Sag River and Shublik are in fault contact wi6h the Sadlerochit sand across .apparently non-sealing faults. We conclude~ therefore, that one could expect pressure and fluid com- munication between the Sag River, Shublik and Sadlerochit formations where any of these conditions exist. (8) 2/8/71 SUMMATION P.J. Trimble Alaska Division Attorney Mobil Oil Corporation By the preceding testimony, we believe the following points have been sub st ant iated: 1. The Sag River and Shublik formations are hydrocarbon-bearing over essentially the same area as the Sadlerochit. 2. We believe it will be uneconomic to fully develop and deplete the Sag River and Shublik unless they can be developed and commingled downhole, with the Sadlerochit. 3. Unitization efforts are considering all three intervals for determination of equities. .4. It is in the interest of efficiency and conservation to pro- duce these formations as an entity. Failure to allow down- hole commingling probably will result in a decreased recovery of the State's natural resources. 5. It appears that the Sag River and Shublik could be in com- mmnication with the Sadlerochit under certain conditions. Therefore, we recon~end that the existing Prudhoe Bay Sadlerochit Field Rules be amended to permit downhole commingling of production from the Sadlerochtt, Shublik and Sag River intervals. We further recon~nend that the vertical limits of the presently defined Sadlerochit Sand Pool be expanded to include the Sag River and Shublik for- .mations: to wit, the intervals from 8110 feet to 8680 feet, as exhibited '~.n the Pr~dhoe Bay #! well: that the present Sadlerochit Field Rules apply to all, and that the combination be given an inclusive name, such as 'the Prudhoe Bay Pool or some other appropriate name. (9) 2/8/71 QUALIFICATIONS FOR EXPERT ~SS (K.A. DUNN) I am a Senior Production Engineer with Mobil Oil Corpora- tion. I received a B.S. in Industrial Engineering in 1954. After nine years' experience in the oil industry in Venezuela and Oklahoma, I re- ceived an M.S. in Petroleum Engineering at the University of Southern California in 1964. I have been employed by Mobil since 1964 and have been assigned to the Alaska Division, working on the Prudhoe Bay Field, since 1969. I ha~v~~ worked on the Prudhoe Bay Unit Reservoir Engineering Subcommittee since its inception. I am a member of the Society of Petroleum Engineers and a past member of the Board of Directors of the San Joaquin Valley section of this organ- ization. I was the author of a paper in 1968 and co-author of a paper in 1965. Both papers were presented at national meetings of the Society of PetroleUm Engineers. QUALIFICATIONS FOR EXPERT WITNESS I am the Alaska Division Exploitation Engineer for Mobil Oil Corporation, and have been assigned to this position since October, 1969. In this capacity, I supervise all reservoir engineering work for Mobil's Alaska Division, which includes the P~dhoe Bay Field. graduated from the University of California at Berkeley in 1953 with a Bachelor of Science degree in Petroleum Engineering. I joined Mobil. in 1953, served a .term in the military, then returned to Mobil in ].955. Since then, I have been engaged in various engineering assignments for Mobil in California, and have been in a superviSory capacity since 1966. I am a Registered Petroleum Engineer in the State of California., and sm a member of the Society of Petroleum Engineers. QUALIFICATIONS FOR EXPERT WITNESS (J.F.VITCENDA) I am Division Production Geologist for the Alaska Division of Mobil Oil Corporation. I was assigned to this position in the latter, part of 1969, and am responsible for the geologic evaluation of Mobil's' producing opera- ~tions in Alaska. '~ My formal education consisted of a course of studies at the University of Wisconsin leading to the Bachelor of Science degree which was granted by the University in 1956. Upon completion of post-graduate work at the University of Wisconsin, I was granted the Master of Science degree in Geology in 1958. As continuing education, I have completed numerous short courses associated with petroleum geology. My professional background consists of 13 years of varied geological experience in the employ of Mobil Oil Corporation. In these 13 years, I have alternated between Production Geology and Exploration Geology in the Rocky Mountain area and in Alaska with a short period in the Mid-Continent area. During the past four years I have been working in various geologic provinces of Alaska, both as an Exploration geologist and, more recently, in ~oduction Geology again. Over the past two years I have concentrated on the'geolo~j of the North Slope and Prudhoe Bay. I have been Mobil's representative1 on the Prudhoe .Bay Unit Geological~ ~Subcommittee since its in- ception. My professional affiIiations .include membership in the American Associa- tion of Petroleum Geologists, the Wyoming Geological Association, and the Pacific Section of the AAPG. I am also a Registered Geologist in the State of California. PRUDHOE'BAY 'FIELD RULES HEARING _ i . · February 9, 1971 ATLANTIC' RICHFIELD COMPANY ......... '"' TESTIMONY"AND EXHIBITS STATE OF ALASKA HEARING - PRUDHOE BAY SADLEROCHIT OIL POOL ENGINEERING DATA Testimo~ns of B. C~ Anderson At the previous hearing, the Alaska Oil and Gas Commit'cee requested certain reservoir data from the Sadlerochit Oil Pool. Some data were released at that time and we have additional data that we would like to present now. Exhibit 1 gives core data for 23 wells cored in the Sadlerochit Forma- tiono These are all the core data that have been processed. Average porosity and permeability data are shown for the entire cored interval in each well. Porosities were measured either by the Boyle's Law or resaturation method and samples were averaged arithmetically for pur- poses of this testimony. Cores with less than I md. permeability were excluded from both porosity and permeability data° Air permeabilities are reported except where it is indicated that the Klinkenberg correc- tion has been made. The average permeabilities given on the exhibit are arithmetic averages of the well samples. Exhibit 2 shows reservoir pressure data available from seven of the ten wells shown on the BP geological cross sections. These data rep- resent either static shut-in tests or the projection of buildup data to an infinite shut-in time° The exhibit shows 'the perforated inter- vai, the test depth or the depth of the bottom hole pressure bomb, the measured static bottom hole pressure at the test depth, the recorded temperature at the test depth, and the static.b?ttom hole pressure corrected to a 9,000' ss datum. This datum is roughly the base of the oil column. The dat,a 9iven here is ~very representative~ The average Engineering Data Page 2 reservoir pressure at the 9,000' ss datum for the 7 wells on Exhi 2 is 4460 psig. An average of 57 pressure tests in 20 wells is / 4462 psig. If the Committee desires a tabulation of the type shOwn on Exhibit 2 for the 57 available tests, then on your request we will compile this data and get it to the Comnittee before the official close of this hearing. Exhibit 2 shows the PVT analyses of seven reservoir fluid samples taken from the Sadlerochit Oil Pool. In addition to the perforated interval, the sampling depth, recorded temperature, laboratory determined bubble point pressure, flash formation volume factor, differential formation volume factor, solution gas-oil ratio, oil viscosity at bubble point conditions, and oil §ravity are given. We feel that the BP 27-11-14 analysis is-probably the most representative analysis available fOr the bulk of the oil column. The 27-11-14 well is centrally located areally and the well was selectively perforated over an interval of 300'.} With these perforations, the flui.d sample was a composite of the major portion of the oil column. The flash formation volume factor of the BP 27-11-14 well sample reported is 1.390 rvb/stb. Out of 7 available PVT analyses, the shallowest short interval sample was taken from 8692-8707' ss (a 15 foot interval) in ARCO's 4-10-15 well and gave a flash formation volume factor o'f 1.399. The deepest interval was from 8936-89'86' ss (a 50 foot interval) in Placid's 3-10-13 well which gave a flash formation volume factor of 1.307. , Engineering Data Page 3 Exhibit 3A shows a compositional analysis of the reservoir fluid sample taken from the BP 27-11~14 well~ Exhibit 4 shows compositional analyses of produced gas cap fluids from the ARCO-Humble 10-11-14 well. This is our ?rudhoe Bay State #1 well. The data includes analysis of separator gas~ separator liquid, specific gravity of the separator gas and hydrogen sulphide content of the gas. Exhibit 5 shows formation water data for the Sadlerochit Pool. Al- though other samples of formation water have been taken, the data reported for the sample from the BP 31-10~16 well is very representa- tive data. This test produced formation water to the surface. The exhibit shows the water salinity in Mg/L sodium chloride, the 'total solids, measured resistivity, and specific gravity of. the sample Exhibit 6 shows representative test data for four development wells in the Sadle'rochit Oil Pool. Other tests have been made but most were for other purposes and are not representative of the initial capacities of development wells. Data of a general nature includes the well lo- cation, date of the test, the perforated interval and net feet of perforations open. Specific data concerning these tests being report- ed include the oil rate, gas-oil ratio, water cut, flowing wellhead pressure, flowing bottom hole pressure.~ oil gravity, and specific productivity index calculated from the test. These four wells were tested at different rates and under different Eonditions. We feel that they are capable of similar rates under similar test conditions as indicated by the specific STATE OF ALASKA HEARING - PRUDHOE BAY SADLEROCHIT OIL POOL~ STATEMENTS BY LEGAL COUNSEL (Re: Items 3 through 8 on the call of the he.aring) John Scott · Mr. Chairman, Members of the Alaska Oil and Gas Conservation Committee, 'I am John Scott. I am appearing before you as legal counsel for Atlantic Richfield Company. I will suggest some minor changes to three of the rules contained in Conservation Order 83-B. Additionally, some very general statements and. observations regarding Items 3 through 10 on the call of this hearing will be made. [I tern 3] "Well Spacing" -First, let me comment briefly on Item 3, . At the first Prudhoe Bay Field Rules Hearing held in November of 1969, Atlantic Richfield Company requested 640-acre spacing for the Prudhoe Bay Field. In the case'of the Sadlerochit · ., Formation, our spacing proposal was supported by all industry representatives who expressed their position at the hearing. In testimony, we supported our proposal on the basis that the field was in an early stage of development and more data was needed. We requested wide spacing to prevent the drilling of · unnecessary wells until the field could be developed, to a point where its limits could be properly defined and data could be gathered that would enable us to determine proper spacing for the field. The desi.rability of early wide spacing for the Sadlerochit reservoir is consistent with the concepts presented by the Interstate Oil Compact Commission in their bookle~ titled, "General Rules and Regulations for the Conservation of Oil and Gas", published in 1969. We, therefore, have no objections to the continuation of ~he present 640-acre spacing rules provided by Conservation Order #83-B for the Prudhoe Bay Sadlerochit Oil Pool, and request no substantial change in the basic spacing rules~ Accord- ingly, we stand on the record of our previous testimony presented at the November, 1969 Prudhoe Bay Field Rules · Hearing insofar as concerns the justification for 640-acre spacing for the Sadlerochit Oil Pool. We will, however, suggest one minor change to Rule 2 of Order #83-B, namely, that the ~figure 600 acres be changed ~o 575 acres. Since the earth's longitudinal lines converge as they approach the North Pole~, governmental sections on the western edge of each range decrease in size below the usual 6~O-acre section as you move northward. We request ~his change to Rule 2 in order to accommodate drilling on · the smallest governmental section 'in the Prudhoe ~ay Field Rules area which smallest section contains approximately 577 acres. This change would, we believe~ avoid some undesirable administrative inconvenience° [Items 4, 5 & 6] Regarding Items 4, 5 and 6 on the call of the hearing (per- taining to casing and cementing requirements~ bottom-hole pressure survey requirements, and g.as-oil ratio test requirements), we have nothing to present or suggest except that the existing rules remain as they are. , (I [I tern 7] Regarding Item 7 on the agenda for this meeting (covering "Methods of Preventing Uncontrolled Flows") we do suggest one change the result of which will be to require automatic shut-in equipment to be installed below the base of the permafrost, rather than' just 200 feet below the surface. More specifically, we recommend that Rule 5 of Conservation Order 83-B be changed 'to read as follows°~ "Upon completion, each well shall be equipped with a suitable safety valve installed below the base of the permafrost which will auto- matically shut-in 'the well if an uncontrolled fl ow occurs." , .This change will reflect the actual practice of the North Slope operators and, I believe, the desires of the committee as refiected by recently proposed statewide rules. We will further suggest that Rule 4 of .Conservation Order '_ '8~ B be changed so as to reflect language contained in your recently proposed statewide rules (namely, llAAC 51.095). The.proposed change in Ru,le 4 would also allow the use of higher working pressure blowout preventers than required for formation control without the requirement for unnecess- arily high test pressures. Specifically, we suggest that Rule 4 be changed to read as follows' "Rule 4. Blowout Prevention Equi_pment and Practice. (a) Before drilling below the casing string required~ by Rule remotely one equipped with pipe rams, and one bag type. API Series working pressure - i0,000 pound shall be installed prior to pen Triassic formation. All such e include a drilling spool with t side outlets (if not on the blo a three-inch minimum (or equiva and a fill-up line. Alt equipm 3(c), all drilling wells shall have three controlled blowout preventers, including one with blind rams minimum working pressure capabl formation pressures reasonably area at the depth being drilled factors. The drilling string wi above and one below the kelly du operations with the kelly,. Two will be conveniently located on i500 (5~000 pound test pressure) etrating the Permo- quipinent shall hree-inch minimum wout preventer body), lent) choke manifold, ent shall have a e of withstanding expected in this with adequate safety Il contain one valve ring all circulating emergency valves the drilling floor with rotar'y subs for all connections in use~ one valve to be an "inside blowout preventer" of 'the spring-loaded valve type and the second to be of the manually-operated ball valve (b) All blowout preventer rams, emergency valves and choke manif tested to. the manufacturers' rec pressure when installed or chang once each week thereafter. An o approval of BOP equipment rated pressure than that required by ( the operator will not be requir equipment to a pressure 'in exce would be .required for the equip (a) provided the approved drill a statement o~f the operator's i the lower pressure. Bag,-type p tested to the recommended worki inst&lled and to 50% recommende once each week thereafter. 'Test recorded on written daily records type kelly olds sh ommende ed and perator at a hi a), In ed to te ss of th ment spe ing perm nten~; 'to reventer ng press d workin result kept val yes , all be d working at 1 east may request gher working this event st 't'he BOP at whi ch cified under it includes res t at s shal I be ure when g pressure s shal I be at the well. (c) All blowout preventer equipment shall quately protected to insure reliable operat the existing weather conditions. Ail blowo venter equipment shall be checked for saris operation during each trip. The use of blo preventer equipment shall be in accordance good established practice and be in good operating condition be ade- i on under ut pre,- factory wout wi th all equipment shall at all times°" [I tern 8] The next item on the call of the hearing, Number 8, covers the subject of "Administrative Approvals". On that subject, we have no change to suggest or other comment to make. [Items 9 & 10] Regarding Items 9 and 10 on the agenda for this hearing (covering "Plans for Disposition of Produced Gas" and "Plans for Reservoir Pressure Maintenance"), I will call on Mr. Ralph Cox, Resident Manager of Atlantic Richfield Company in Alaska° Mr. Cox will be speaking to you, not as a scientific or technical witness, but in his management capacity. Therefore, it should not be necessary for him to enumerate his technical qualifications. STATE OF ALASKA HEARING - PRUDHOE SAY' SADLEROCIiiT OIL POOL .PLANS FOR DISPOSITION OF PRODUCED GAS Statement By R. Fo Cox Our current field deveiopmenl~ plans with regard to the Sadlerochi~ Reservoir include plans which are directed towards the conservation of produced gas 'in accordance with Rule 8 vcnich provides "The venting or flaring of gas is Prohibited except as may be authorized by the Committee in cases of emergency or operational necessity". , Immediately follow:lng the State Lease Sale late in 1969, the 11 parti- cipating companies formed a Pre-Unitization Gas Conservation Subco~l'lit- tee to study'gas handling and gas utilization~ ~iore recently, The , Ralph M. Parsons co~nPany has been employed to make studies and recommen- dati.ons regarding.gas handling facilities for the Prudhoe Bay Field. The ,studies' 'will c°¥er Various alternativ'es for process design~ gas . §a~t~ering, compress.~On and injection equipment., Consideration will be ,,, given to several d~.f. fe'rent combina~i'ons of' injection and/or sales Programs T.his study]Will evaluate the feasibility of various gas gathering systems and'Central compression plants wi th facilities that can be converted from injection to transmission purposes should this prove to'.be ~des i rable, This isonlya brief summary of a great deal of work that is under way which will p:rov'ide the basis for specific detailed plans for conser- vation and benefiCial use of the North Slope .gas reserves. While it is recognized that.our'Statement does not provide specific plans for · disposition of produced gas,' we do hope this Co~'ldttee recognizes that , , : , Plans for Disposition of Produced Gas Page 2 it is impractical for the operators to be any more specific at this time. In the meantime, Rule 8, as written and adopted by the Alaskan Oil and Gas Committee for Prudhoe Bay Field, effectively prevents waste and we see no reason for changing this Rule. STATE OF ALASKA HEARING - PRUDHOE BAY SADLEROCHIT OIL POOL PLANS FOR RESERVOIR PRESSURE IvLqINTENANCE Statement By R o F. Cox Plans for op~timizing recovery are dependent upon many factors which are currently unknown and could be contingent on the actual reser- voir performance under producing conditions. Plans for projects, Whether required for the whole pool or only spec- ified portions, will be based on injecting the necessary volumes of fluids, if and when the reservoir performance studies so dictate, to optimize oil recovery consistent with good reservoir management. Reservoir simulation.'.work is being~ and will continue to be, carried out. The results.~of 'these studies should inaica~e the possible vol- umes of injection.....ftuids and injection points that may be required to increase rec.overy~ under various reservoir voidage rates and producing mechanisms. The r,. eS ]u,l .ts of the simulation work will become more reliable as the field is fully defined and further da~a is generated Atlantic Richfield Company Field Rules Hearing ~ebruary 9~ !971 . CORE DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD Operator - Well ARCO 21-12-13 4-10-15 24-10-15 7-10-14 8-10-15 lO-ll-14 35-11-12 26-11-12 28-12-11 BP 24-10-14 31-10-16 9-11-13 33-11-13 32-12-13 27-11-14 Placid 3-'10-13 S°cal 29-12-11 25-10-14 Mobi 1 26-12-12 3-11-11 5-10-13 21-11-12 7-11-12 TOTAL SADL EROCHIT Average Porosity 21.5 23.1 21.8 23.2 24.4 23.8 19.1 24.8 22 .-7 22.5 21.2 22.5 21.4 24.1 23.6 21.3 18.1 24.1 21.3 18.3 22.2 20.6 17.3 22.4 Average Permeab i 1 i ty (md) 341 484 363 196 400 188* 34' 26* 159 218 240 315 169 177' 351 105' 17' 240 155 31 160 144 16 265 Number of Samples ll6 296 265 185 35O 124 15 35 72 317 350 478 288 105 175 97 18 50 157 48 157 87 28 '3814 NOTES: Cores w/less than 1 md permeability are excluded Porosities are arithmetic averages Permeabilities are arithmetic average of Kair except where indicated Permeability values include Klinkenberg factor Whole core measurements included in averages Sidewall cores only · · ~' ".-'~'"-?q~'~ ....... ~r;~..S~. : ' .'.'.: [.':' '" '~)';~?r:l .....H].~lrl an F1 ~ n't, Attorney fo, Bo .. · , ~ . , .... ~ ,~1,, ,1 · ' . . ' :1 ':,~,r1~1, ,'.;1 . ;' ,. ' .' · . . ' .' , '," i"~rTM 1'],~,',' [~ ~,?~?.~'.~'~?~,~',i:,,:?,~',~ /'?', . . ' · ..~ ' -e '~'.~'~m' .'.' T ' r~ '"': .1,~,.~...~ ~., .,~...,~ ?~ 3 . - ...... ...... . .......... ,,....~...~..,~.~.?~,. ...... C,.Omment on the inal igem that "' ]' ' ' "'" '"~:'"'""" '"' ':'":":"~'::""""'"'m'"":" '~'::"":'"'~'~:~;'~"'~'~6~t""'"'"~'"~"'"~'"~'~t~'~'"~ 'k?C'~,,,,,' .,:,~,, ", ~ ,' · ',- ,, .,, , , ,'., ~.'.. ,, ,,.,,, .,~, ,~ ,~u~ .~,.~,'~ ~,},,.:,?:'~,~?, ?,"~:~,~? .,,, >,.,.,, ,,:,,:,,,' ,,,~, ?...',: ,,. ,. ,, , ,, ,, ,, :,,, ¥~,:,, ,, · , ,,, ,,, ,,,~,,,: ',',, ,~/,,,. ,'?L.'~:',,',~?'~,"::~L-~,::?:":.',,'>':~,~,~',~?','.,,: ~, ",~:,, .'~ ,,' ,1 · ,, · :, ~ ,':', ',~' ']~. ,,? h'~',,,: ', ",,, '. ",,,j,, ','~ ',,', ' ,1 ~?~>"'" ?~:',.',~,[ .......... . ' :' ' ' .......~..'....:~..?.~?.....'?:,...~?....:~.:.:..~ ? .---~ ..... · , .' ,... . I ' b,., D~pera tot ~RCO Well 7-10N-14E BP 27-11N,14E. ARCO lO-11N-I.4E Mobil "3-11N-lIE ~RCO 28-'12N-11E Test No. DST #1 DST #2 DST #3 Flow #1 Flow #4 Flow #6 DST #1.2 .DST #13 DST #14 DST #l 5 · · Date 6/25/69 6/27/69 6/28/69 6/26/69 6/28/69 7/01/69 6/01/68 6/08/68 6/15/68 6/19/68 RESERVOIR PRESSURE DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD 'Test 'Interval MD SS 9095-9100 9082-86 9076-86 9020-9025 9007-9011 9001-9011 870O-60 8700- 9000 8700-9000 m 8666-8726 .8666-8966 8666-8966 8656-70 8615-44 8625-50 8210-50 8615-8629 8574-8603 8584-8609 8169-8209 Gauge MD 9060 9075 9085 8562 8549 8588 8580 8524 8589 8172 Depth SS 8985 9000 9010 8528 8515 8524 8539 8483 8548 8131 OHDST #4 6/20/69 8987-9022 8917-8952 9015 8.945 WSO. 11/13/69 8993-95 8923-8925 8949 8879 Flow #1 12/3/69 8960-70 8890-8900 '8902 8832 Exhibit 2 Atlantic Richfield Company Field Rules Hearing February 9, 1971 BHP @ Gauge Temperature _ Depth °F 4475 4480 4465 4303 4301 4303 4297 4321 4318 4281 4433 4398 4423 198 2O8 2OO 180 179 180 180 BHP {psig) @ Datum of 9000'SS 4482 4480 4461 4456 4439 4456 4447 4467 4454 4466 4456 4447 4483 OHDST #8 7/10/69 8943-60 8874-8891 8960 8891 4413 4461 #9 '7/11/69 8993-9000 8924-8931 8992. 8923' 4433 4467 Mobil 21-11N-12E OHDST #1 12/31/68 8937-60 8875-8898 8957 8895 4443 200 4476 Flow #1 12/20/69 8875-8940 8813-8878 8822 8760 4378 4457 .. Mobil 7-11N-12E DST #1 6/.14/70 9029-9113 8809-8892 9014 8794 4380 236 4447 oo Exhibit 3 Atlantic Richfield CompapGv Field Rules Hearing February 9, 1971 Operator Wel 1 Date of Sampling Sampled interval (MD) .... (ss) Sampling Depth (MD) .... (ss) " Temperature (OF) Sampling Pressure (psi) ARCO '4-10o15 ?/16/68 8750-65 8692-8707 8640 8582 .185 4317 RESERVOIR FLUID A~g. LYSIS SADLEROCHIT OIL POOL PRUDHOE BAY FIELD BP Nobit BP BP Placid BP 27-I1-14 26-12-12 1-11-12 1-!t-12 3-!0~13 4-11-13 I1725/69 8892-8984 8845-8937 8878 883! 200 4400 6/12/70 8966-9008 8922-896~ 8894 8850 2]7 4400 6/30/69 8700-9O00 8666-8966 8564 8530 198 4250 6/23/70 6114/70 8/24/70 8822-87 9008-58 985~-10020 8779-8844 8936-8986 8753-8894 8754 8700 9800 ~710 8628 8707 2i6 200 216 ~323 4287 4314 Reservoir Temperature (OF) ' Bubble Point Pressure For~Jtion Volume Factor ~ Flash (RVB/ST2) Formation Volun, e Factor - Differential (RV~/RDB) Solution GOR (SCF/STB) Viscosity ~ Bubble Point (cp) Flash Oil Gravity (°API) 1~5 --4295 1.399 1.~7 850 0.69 28.4 2O0 4321 i °390 1.419 810 0.8i 27.7 20! ~492 l .325 l ~6 65! 1 26.8 200 4320 i. 33J t ~353 673 l ~22 27.0 200 220 200 ~262 4087 4263 i.342 !.307 i.353 i.350 I~338 i.368 675 595 684 0.99 1.34 0.92 27.6 25~2 27.0 Exhibit 3A Atlantic Richfield Company , Field Rules Hearing February 9, 1971 RESERVOIR FLUID COMPOSITION DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD ~Cgmponent Helium ~Carbon Dioxide Ni tro§en Methane Ethane Propane iso-Butane n-Butane i.so-Pentane Hexanes ~ Heptan'es plus Heptanes plus Gravity (°AP I) Molecular Weight BP 27-11-14 MOL Percent ,O1 9,11 '0,45 44,13 5,11 3,03 0,83 1,35 0,76 1,16 1,54 32,52 26,7 27O Exhibit 4 Atlantic Richfield Company Field Rules Hearing February 9, 1971 GAS CAP FLUID COMPOSITIONAL DATA SADLEROCHIT OIL POOL PRUDHOE BAY FIELD Co.~onent Nitrogen Carbon Di. oxide Methane Ethane Propane Is o-Bu ta ne N-Butane Iso-Pentane N-Pentane Hexane Heptanes Plus ., Heptanes Pl us Gravity (oAPI) Mol ecula r..$~e i §h t Gas Specific. Gravity · . H2S, ppm ~' ARCO-Humble iO-ll-14 Mole Perce~t Separator Gas - Separator 0.67 0.07 1 2.21 5.80 77.67 23.26 5.42 6.54 2.35 7.11 0.31 1 ~62 0.69 5.59 0.16 2.61 0.20 3.96 O.11 7.36 0.21 36 ,,08 .758 47.8 137 _Operator · BP Wel 1 Location Sampling Sample Date Source FORMATION WATER DATA mm SADLEROCHIT OIL POOL PRUDHOE BAY FI ELD ' · . . , · Perforated Interval Sample MD ' SS Po int 31-10N-16E Total Salinity Sol ids Ma/_L. __ . Mg/.L. 10-10-69 DST #2 9208-9390 9144-9326 Sur'face 18168 21351 · Exhibif'5 Atlantic Richfield Company Field Rules Hearing February 9, 1971 Measured Resistivity ohm-m OF Sp. Gr. 0.358 75 1'.0215 · ~,rator . a. RC.a ' 'CO ~ BP Well Location 4-10-15 D'.S. #1-2 (7-~0-1S) 2~-~1-14 Zt-ll-13 . Test Date 11/68 3/70 6/69 8/70 WELL TEST DATA Perforations Interval, SS SADLEROCHIT OIL POOL PRUDHOE BAY FIELD Net Feet Oil Rate BOPD 8625-8757 8686-8695 8666-8966 8753a8894 132 8750 lo 3872 106 21000 1t0 23700 .. _ -. . . . 6i0 820 837 722 Water Cut % FWHP Psi____9.~ 1i60 1150 775 875 FBHP 40t8 36!0 3445 3546 Exhibit 6 Atlantic Richfield Company Field Rules Hearing February' 9, 1971 Oil Gravity Specific P.I. o API BOPD/p~ i / f_t..__ 28.7 .23 28.2 .60 27.7 .25 26.0 .33 MOBIL OIL CORPORATION TESTIMONY POOL RULE HEARING PRUDHOE BAY SADLEEOCHIT OIL POOL CONSERVATION FILE NO. 98 FE~RUARY 9, 1971 F.J. ~¥in'~ le Alaska Division Attormey Mobil Oil Corporation INTRODUCTION In November, 1969, a hearing was held to establish pool rules for the Prmdhoe Bay Field. At this hearing, BP Alaska~ Inc., sub~'tted a definition of three pools for consideration. ~e of these pools was called "~7~e Prudhoe Bay Sand Pool". It was defined as 'the accumulation of oil and/or gas common to and which correlates with the accumulation found in the Atlantic Richfield/Humble Prudhoe Bay State #1 well between the depths of 8,110 feet and 8,680 feet. BP Alaska, Inc., desc~dbed the accunmlation in the interval as consisting of tbx~e fo'~mma'tions~ w?~ch they called the Oxytoma, Shublik and Sadlerochit. The Oxyto~ fo~nation has subsequently been renamed the Sag River Sandstone amd will be refe~£0ed to by this home.throughout the remainder of this testimony. Little data. was presented at the previous hearing.on the Sag River. and Shublik formations. As 'a z~sult~ the Conservation Order Nq~83-B that w~s issued following the hearing established field rules f'br the Sadlerochlt icrmation only, It was noted in the Order t.hat there was insufficient evidence to define the Sag' Iqiver Sm'~dstone as an oil pool~ , The Shublik formation was not. mentioned by name in this @.~der~ but it was Stated that the Sag Pd. ver 'and. Sadlexmchit'fo=nations were separated by 40 to 150 feet of shales, limestone and phosphate' rocks which nmy cons'ti- ,.' 'tute a permeability barrier. We feel that there now is sufficient data to Justify expanding the interval covered by the existing Sadlerochit field rules to include 'the ~ River and Shublik lo,nations. We ~ill present Emgineerdmg m~.d Geologic testimony to subStantiat.e this position,- (I) RES~~ ~G.INEE. R~G~~0~ H.N. Porter Alaska Division Reservoir Engineer Mobil 0il Corporation I. Mr. Chairman, it will be the purpose of my testimony to show' that the Sag River and Shublik Formations are hydrocarbon-bearing over a wide area as indicated by well test results and to state reasons why we recommend that these formations be included with the Sadlerochit Field Rules and that downhole commingling of production be allowed. At this time we would like to submit Exhibit A_, which is essentially. ~the same as BP AiasMa's' tfixhibit C, showing the. location of wells where the Sag River and Shubllk have been tested. The colored triangles on the map indicate that a test was made at the location; green to show Sag River tests and red to show Shublik tests. Tests that recovered hydrocar- bons are indicated by a solidly-colored triangle and tests that did not are shown by a colored outlined triangle only, Sag River Tests The Sag River sandstone has been tested in eleven wells. Ten of these tests yielded hydrocarbons ranging from traces to a recovery of 63 barrels of oil in one well and. 2~ million cubic feet per day of gas flow in another. One test showed no hydrocarbon recovery. Shublik Tests The Shublik has been tested in five wells. Three wells recovered oil ranging from a few barrels to a flowing rate of 250Q barrels per day. .. Another well flowed gas 'at low rate. One test showed no hydrocarbon recov- ery. Comparison With the Sadlerochlt Li~quid Gravlty: Gravities of liquids, recovered from the 'Sag River . (2) 2/8/71 ranged from 26.5° to 38.00 APi. Liquid gravities lA'om the Snubilk ranged ~h~mn 27.1° to 27.4°API. These campare to a ~i~,a± Sadierochit gravity of approximately 28°API, This comparison can be only approxJ~nate because the Sadlerochit gravity varies depending upon depth and proximity to the gas/oil and oil/water contacts, it is expected that the liquids from the Sag River and Shublik vary in a similar fashion. Bottom Hole Pressure: The Sag River, Shublik and Sadlermchit exhibit · simila~' p~essure gradients with depth. Representative shut-in pressures from tests of these intervals indicate an averag~ p.~ssure gradient of 0.507 psi/ft, for the Sag River and 0.500 psi/ft, for the Shublik. These compaz~ with a representative gradient of 0.500 psi/ft, for the Sadlerochit. ~%ese data indicate that pressures of these fox, nations cm'npatible. Gas-Oil Ratios: Ih?oduClng gas-oil ratios on Shublik smd Sadle~w~chit~ tests were sit,Ilar. Areal Extent: As this Exhibit shows, the Sag River ~.z~ hym~ocarbon-bea~ lng over .a large area ~l~e overall distance between wells which tested b~yd~carbons ~ the Sag River is approxJm~tely 25 miles. ~.~e overall distsu~ce between wells Which tested '~ydrocarbons in the Shub!lk formation is approximately 10 miles. However~ tkls Exhibit shows that no wells have tested the Shubiik .in' the eastern portion of the Field, Bk, om our evaluation of. the Sh~blik formati~n~ we expect it. to be ~\~droc~bon · ~.. bearing in this portion of the Field also. Economic and Ope_ra_tional Considerations These results show that these formations are hydrocarbon-bearing over a large area substantially the same as the Sadlerochit. We believe that it will be uneconomic to fully develop and deplete the Sag River and Shublik unless they are developed with the Sadlerochit. Probably ~. there, are limited locations where these formations can be economically drilled on their own, but we believe that full development over the area cannot practically be accomplished this way. Therefore, inclusion of these formations with the Sadlerochit operations should result in greater overall reserves for the area. We believe that inclusion and commingling of the Shublik and Sag River with the Sadlerochit will have no detrin~ntal effect on the Sadlerc- chit reservoir performance. If 'there is inter-formation communication, the intervals should be produced as an entity for maximum efficiency and conservation. · Industry efforts to unitize the Prudhoe Bay Field have included the Sag River and Shublik formations with the Sadlerochit~ We believe that the Field Rules should include them also. (4) 2/8/71 By' J.F. Vitcenda Alaska Division P~c~duction Mobil Oil. Corporation GEOLOGICAL TESTI~C~'Y S'ag.~ ~i¥'er and Shublik Formations Fh~. ~'~airmar~, I will present testinmny ~dicat~mg three n~-chods ~'~ which the S~ ~ver ~d &ublik pr~uctiv'e ~te~s could be ~ pr~ess~e ~d fluid communication ~th the Sadleroc~t s~d pool ~ the Px"u~oe ~y ~a. ~e first method to be discussed is applicable to both the S~ ~ver m'~d Shublik zones, It is by .me~s of ~sp~ce~ent of these zones ag~'lst the Sadlermchit samd ~o~ non-seallr~ fa~ts, ~e second two meth~s apply' pr~r~i~ to the ShUblik pr~uctive zone, ~'~ey ~' (1) t~Tou~'l ve~icai t~act~ complication ~d (2). thro~'~ 'strati~aphic contact.; . . Let's Consider the first method,, I would like at this time to sub~,dt ~.~hibits B arid C. ~'hibit B is a ...... structural section simi. l~ to BP Alaska s no~h-south section'(EXhibit . It g~s' .across the fault sho~' be'tWeerl' the' ~Co/t-~l~Put {f{iv'e.:~'~ ~1 wall' amd the BP Alaska., ~c, ~ 32~11~,1~.. we.Il, TI~' l~e'~-~,~ ''~' ~act~,:~r~'"" "~' 2~'', ,,~.. ~.~..1~':'~ :~ ~ Exhibit The purpose of Exhibit B is to illustrate the n~thod by whiclh "the,o,'~ ~.' ~ River m"~d Shublik come in fault contact with the Sadlerochit s~':d~ ~hich n~ay' lead to pressure communication between the formati, ons~ suggesting a co~non reservoir: system. .-, ~he Sag River Shublik inter-vel v~ies 2¥c~s, app~'oxirr~tely 90 feet on the eas'~ side of the field thicke~r~ 'to, about 250 feet on the ~est in the (.s). vicinity of the SOCAL/Mobil 33-29E well. This thickening occurs mainly within the Shublik interval. The rate ~f thickening increases west of TllN, R13E. Exkibit B illustrates the Juxtaposition of the Sag River and Shublik interval against the Sadlerochit sand along the fault mapped on Exhibit C. The major faults shown on Exhibit C are based primarily on geophysical evidence: other smaller faults have not been mapped. Similarity of the Sadlerochit oil/water contacts in the wells on either side of the fault suggests that this is not a sealing fault, thus allowing pressure conm~nication and fluid migration~ The same situation occurs wherever there is sufficient displacement along 'a fault such as to place the Sag River and/or Shublik porosity in contact with the Sadlerochit sand; that is, wherever fault displacements range from approximately 100 to 600 feet. The first figure could place the Sag River and Shublik in contact with the upper part of the Sadlerochit, while the latter could place these .formatlons in contact with the lower portion of the Sadlerochit sand. Exhibit C illustrates areas where this situation occurs along mapped faults, but the concept is applicable along any fault with sufficient displacement. Now we will consider the other two methods by which ~we believe the productive Shublik zones could be in communication with the Sadlerochit · sand. These are through lateral or vertical stratigraphic changes which place the productive zones in virtual sand-to-sand or lime-to-sand contact with the Sadlerochit, and through fractures which may. permit vertical · .. (6) ca~nunication between the Sadlerocnit and the overlyiF6 productive zones. To illustrate these po~ts i would like to sub~t E~',{hibit D. T~is is a west-to-east co,elation section h~g on the top of the S~ River sm~d. it includes wells ilem ~~obil 33-29E on the west thro'~ vlne MoOi!/ Phillips No~h Kup~ well ~ ~ction 26~ Ti2N~ R12E to she ~oe ~y ~i well on the east--a dist~ce of so~ 20 ~tes. ~he wells ~e relative- ly spaced, not to scale. This section illustrates the log ch~acter mhd coz~etation of the fo~s~tions fz~n the west to the e~t ~d how the fo~e'tions tie to the Pz'm~oe ~y ~1 well. The t~s of the fo~setions ~ those selected by the Unit Geologic Subc~m~ttee. , ~sed on coze data ~ the MObil~illips/SOC~ /~7-i1~12 well~ '~{hich co~d the co~lete inte~l~ there is no O0~ous e~d.ence of an '~'monfo~ .... ~ty between the SheOlik ~d the Sadlerochit in the weste~ ~'ea~ both above ~d belOW the contact is confo~'w~kble. Co~ descriptions indicate tlhat the Shu['}tik is ~de up of s.m~'~dsto.aes~ limestones ~th some phosphatic sm~ds, ~d inter-bedded limestone~ silt.- stone~ ~d shale ~osph~tic minerals beco~"e increas~.giy abund~t ,, the middle p~e of this .fo~ti°n. T~'~is phosp~'~te is a cha~acteristic feature of the Shublik. It occ~'s both in ~utar and nodul~ also as a cement~ ~d .~placement ~eral. It has a ~ked effect on radioactive logs~ m~d it is this log ~sponse that 'has been used in select-- , ~ the log top of the ~dle~chit~ altho~ the lower sm~qy ~it of the Shublik ~y mo~m .p~perly :be ~lated to the Sadlerochit s~d. Refe~ again to E~ibit D~ the .s~d at the top of the Sa~erochit in the Mo'Oil~.llips No~h Kup~ w~l]. has ct~'acte~=istics co~m~on to 'both the Shubl~ s~ds to the west ~d the ~dlerochit sm"~ds to the e, am~'t. Et . , (7) is tripolitic, similar to typical Sadlerochit sand, and phosphatic, similar to Shublik sands. This suggests the possibility of a facies change and/or °n-lap of the Shublik from the west onto the higher por- tions of the Prudhoe Bay structure. In any event, there is evidently sand-to-sand or lime-to-sand contact of the formations. This is the second method of possible con~nunicatlon. Shublik core analyses show porosities ranging up to 28% with an av- erage of approximately 5%. The same core data shows permeabilltles ranging up to a maximum of 580 millidarcies, but it is typically less than 1~10 millidarcy. Porosities and perm~abilities seem to be as var- iable as the llthology. It should be noted, however, that core analyses can not normally measure fracture permeability. Fractures have been noted in the cores. These fractures are important in providing permea- bility and could provide vertical conm~cation with the underlying Sadlerochit'. ~ractures, then, are the third possible method of communica- tion. In sum~, Mr. Chairman, we have indicated how the Shublik produc- tive units are 'in stratigraphic contact with the SadlerOchit sand and could be in vertical fracture commmmication also. We have shown how the Sag River aud Shublik are in~ fault contact with the Sadlerochit sand across apparently non-sealing faults. We conclude, therefore, that' one could expect pressure and fluid com- munication between the sag River, Shublik ~and~ Sadlerochit formations where any of 'these c6nditions exist.. -(8) 2/8/71 By: P.J. Trimbie Alaska ' D_~vlo.~,l ~ At~ ozmey Mobil Oil Corporation By the preceding testimony, we believe the fo!lowi~ poi-ats have been substant ia'ted' 1. The Sag River and Shublik for~mt$ons sine hydrocarbon-bearing over essentially the same area as the Sadlerochit~ 2. We believe it will be uneconomic to ful]~¥ develop arid deplete the Sag River and Shublik unless they can be developed ,mad co~ngled downhole, with the Sadleroclmit. Unitization .efforts are considerlng'all th~e inte~vals for deter~minati°n of equities. ~. It is in the~lnterest of efficiency and conservation to pro- duce these fox, nations as an entity. Fallux~ to allow' down- hole, ce~nlngling :. probably wlll r~sttlt in a decreased recove~.~ of the State's ~tural resources. It appears" that 'ithe Sag River, $~d Shublik could be in cor~ mmmlcation 'with the Sadlerochit trader cer~:;amin conditions,, ~eref'ore, we reco~nend tl~at the existing Prudhoe Bay Sadlerochit ~eld Rules be awended to pernx[t downhole commingling.; of production the Sadlerochit, S'hubl~k and Sag River intervals. We further recommend: that the ve~*cical llmits of the presently defined Sadlerochit Sand Pool be ek~m~ded to include the ,Sag River and Shublik for- mations' to wit, the ilntervals from 8110 feet to 8680 feet, as e~zibited in the Prudhoe Bay #1 Well: that the. p~esent Sadlerochit .Field Rules ~pply to all, and that .the combination be given an inclusive name ~. such as the Prudhoe Bay Pool or soma other approp~late nau~ ,, ', · QUALIFICATIONS FOR EXPERT WIT F SS oVrmENSA) I am Division Production Geologist for the Alaska Division of Mobil 0il Corporation, I was assigned to this position in the latter-part of 1969, 'and am responsible for the geologic evaluation of Mobil's' producing-opera- '~tions in Alaska. "... My formal education consisted of a course of studies at the University of Wisconsin leading to the Bachelor of Science degree which was granted by the University in 1956. Upon completion of post-graduate work at the University of Wisconsin, I was granted the Master of Science degree in Geology in 1958. As continuing education, I have completed numerous short . courses associated with petroleum geology.. My professional background consists of 13 years of varied geological experience in the employ of Mobil Oil Corporation. In these 13 years, I have alternated between Production Geology and Exploration Geology i~ the Rocky Mountain area and in Alaska with a .short pe~±od in the Mid-Continent area° D~/ing the past four years I have been working in various geologic p.~mvinces of Alaska, both as an Exploration geologist and~ more recently~ in Production Geology again. Over the past 'two years I have concentrated on the geology of' the North Slope and Prudhoe Bay. I have been Mobil's representat~'ve on !the Prudhoe ..Bay Unit Geological~ Subcon~n[ttee since its in- ception. My professional affiliations .include membership in the American Associa- tion of Petl;oleum Geologists~ the Wyom~ Geological Association~ and the Pacific Section of the A~PG. I am als0 a Registered 'Geologist in the State of California. QUALIFICATIONS FOR EXPERT WITNESS (H.N. PORTER) I am the Alaska Division Exploitation Engineer for Mobil Oil Corporation, and have been assigned to this position since October, 1969. In this capacity, I supervise all reservoir engineering work for Mobil's Alaska Division, which includes the Prudhoe Bay Field. I graduated from the University of California at Berkeley in 1953 with a Bachelor of Science degree in Petroleum Engineering. I Joined Mobil in 1953, served a term in the military, then returned to Mobil in 1955. Since then,. I have been engaged in various engineering assignments for Mobil in C~lifornia, and have been in a supervisory capacity since 1966. I am a Registered P~etroleum Engineer in the State of California, and am a member of the.' Society of Petroleum ~Engineers. i a~a a Senior t%~oduc'uion ~2~i'aeer ~.{iti'~ ~ ...... ................... tion. I ~eceived a B.$. in Industrial E~ineePJ.~ in i~}62~.. An::et yemPs' experience In the oil indust:~y in Venezuela f~"td O.~i~"~o~r~: i celved ~q H '~ .... . o. in Petrole~ i~'k~g~eeFing r~t the UnivePs~L%x o:[' California in 196~ I have been employed by iVbb:.tl since 1.96~ ,m"d been assi~n, ed {-;o Zhe Alaska Division, woP~2 on 'ti~e fh':udhoe Bay since 1969. I have ~orked cm ~he P~udr~oe lk~/ [}ru%t .o...,. .......... , ..... ~.~ . Subca'r~ttee since its inception, Z am a mer~er of the Society of Pe'tzmEe~m'~ Es~ineeP,s m"~d a ~,~,.~u of the ~'~ of DirectoPs of the Sm'~ 3oaq't~n Valley section of 't'~n'i4; iza'uJ, or~. ! w~ 'the author of a papeF ~ 1968 amd co.-.at~thcm' of' a. ~'~a'~-"e''~ in 1965. ;Both papePs ~e~ pPesented az n~t, ior~l _~',,,:':,,:~""~: ::.~..~,.. .... of the of Pet~m~lem'n MOBIL OIL CORPORATION TESTIMONY POOL RULE HEARING PRUDHOE BAY SAD!,EROCHIT OIL POOL CONSERVATION FILE NO. 98 FEBRUARY 9, 1971 P.J. Trimble Alaska Division Attorney Mobil Oil Corporation INTRODUCTION In November, 1969, a hearing was held to establish pool rules for the Prudhoe Bay Field. At this hearing, BP Alaska, Inc., submitted a definition of three pools for consideration. One of these pools was ~called "The Prudhoe Bay Sand Pool". It was defined as the accumulation of oil and/or gas con, non to and which correlates with the accumulation found in the Atlantic Richfield/Humble Prudhoe Bay State #1 well between the depths of 8,110 feet and 8,680 feet. BP Alaska, Inc., described the accumulation in the interval as consisting of three formations, which the.y called the Oxytoma, Shublik and Sadlerochit. The Oxytoma formation has subsequently been renamed the Sag River Sandstone and will be referred to by this name through°ut the remainder of this testimony. Little data was presented at the previous hearing on the Sag River and Shublik formations. As a result, the Conservation Order No.83-B that was issued following the hearing established field rules for the Sadlerochit formation only. It was noted in the Order that there was insufficient evidence to define the Sag River SandstOne as an oil pool. The Shublik formation was not mentioned by name in this Order, but it was stated that the Sag River and. Sadlerochit formations were separated by 40 to 150 feet of shales, limestone and phosphate rocks which may consti- tute a permeability barrier. We feel that there now is sufficient data to Justify expanding the interval covered by the existing Sadlerochit field rules 'to include the Sag River and Shublik formations. We will present Engineering and Geologic testimony to substantiate this position. (1) 2/8/71 RESERVOIR ENGINEERING TESTIMONY By' H.N. Porter Alaska Division Reservoir Engineer Mobil Oil Corporation Mr. Chairman, it will be the purpose of my testimony to show that the Sag River and Shublik Formations are hydrocarbon-bearing over a wide area as indicated by well test results and to state reasons why we recomend that these formations be included with the Sadlerochit Field Rules and that downhole commingling of production be allowed. At this time we would like to submit Exhibit A, which is essentially the same as BP Alaska's Exhibit C, showing the location o'f wells where the Sag River and Shublik have been tested. The colored triangles on the map indicate that a test was made at the location; green to show Sag River tests and red to show Shublik tests. Tests that recovered hydrocar- bons are indicated by a solidly-colored triangle and tests that did not are shown by a colored outlined triangle only. Sag River Tests 'The Sag River sandstone has been tested in eleven wells. Ten of these tests yielded hydrocarbons ranging from traces to a recovery of 63 barrels of oil in one well and 2~ million cubic feet per day of gas flow in another. One test showed no hydrocarbon recovery. Shublik Tests The Shublik has been tested in five wells. Three wells recovered oil ranging from a few barrels to a flowing rate of 2500 barrels per day. Another well flowed gas at low rate. ery. Comparison With the Sadlerochit __ , One test showed no hydrocarbon recov- Liquid Gravity' Gravities of liquids recovered from the Sag River (2) 2/8/71 rs~Nsed from 26.5© to 38.00 API. Liquid gravities from the Sidubiik ranged from 27.1© to 27.4°API. These compare to a t,~ica! Sadierochit gravity of approximately 28°API. This comparison cs~ be only approximate because the Sadlerochit gra~-ity varies depending upon depth and proxi~mit,~ to the gas/oil and oil/water contacts. It is expected that the liquids from the Sag River and Shublik vary in a similar fashion. Bottom Hole Pressure: ~he Sag River.~ Shublik end Sadlerochit exhibit si~la.r pressure gradients with depth. Representative shut~.in pressures from tests of these inte~als indicate ~ average pressure ~adient of 0.507 psi/ft, for the Sag River ~d 0.500 psi/~, for the Shublik. '~ese co~e with a representative ~adient of 0.500 psi/~, for the Sadlerochtt, '~ese data indicate that p~ssures of these for~.tions are co~atible ~ Gas-Oil Ratios: Producing gas-oil ratios on Shublik ~d Sadlerochit tests were similar. ,A~eal Extent: As this F~hibit shows~ the Sag River ~d Shubiik ~e hydroc~'"bon-b~i~ over a l~ge area. '~e overall distance be'tween wells which tested hydroc~bons in the Sag River is approximately 25 miles, ".~e overall dIst~ce between wells which 2ested hy~oc~"bc, n.s tn the Shublik fo~atfon is a~prox~tely 10 ~les. However~ 'this Exhibit shows that no wells have ~ested ~he ~ublik in the easte~ potion of the Field From ou:~ evaluation of the Shublik fo~tlon~' we expec~ it to be hy~:.'oce~bon (3) 2/8/7-.i be~mr~ng in this portion of the Field also. Economic and Operational Considerations These results show that these formations are hydrocarbon-bearing over a large area substantially the same as the Sadlerochit. We believe that it will be uneconomic to fully develop and deplete the Sag River and Shublik unless they are developed with the Sadlerochit. Probably. there are l~mited locations where these formations can be economically drilled on their own, but we believe that full development over the area Cannot practically be accomplished this way. Therefore, inclusion of these formations with the Sadlerochlt operations should result in greater overall reserves for the area. We believe that inclusion and commingling of the Shublik and Sag River with the Sadlerochit will have no detrimental effect on the Sadlero- chit reservoir performance. If there is inter-formation comunication, · the intervals should be produced as an entity for maximum efficiency and conservation. Industry efforts to unitize the Prudhoe Bay Field have included the Sag River an.d Shublik formations with the Sadlerochit. We believe that the Field Rules should include them also. ( 4 ) 2/8/71 GEOLOGICAL TESTIMONY By. J.F. Vitcenda Alaska Division Production Geologist Mobil Oil Corporation Sag River and Shublik Formations Mr. Chairman, I will present testimony indicating three methods in which the Sag River and Shublik productive intervals could be in pressure and fluid communication with the Sadlerochit sand pool in the Prudhoe Bay area. The first method to be discussed is applicable to both the Sag River and Shublik zones. It is by means of displacement of these zones against theSadlerochit sand along non-sealing faults. The second two methods apply primarily to the Shublik productive zone. They are: (1) through vertical fracture conm~unication and (2) through stratigraphic contact. Let's consider the first method. I would like at this time to submit Exhibits B and C. Exhibit B is a structural section similar to BP Alaska's north-south section ~(Exhibit F). It goes/across the fault shown betWee~'theARCo/Hum~%~ Put ~tver~ #1 well and the. BP Alaska, Inc.~ 32-11~14 well. The' 1,ine.'Of~act~en,'~ ~hgk~aon Exhibit C. The purpose of Exhibit B is to illustrate the method by which the Sag River and Shublik come infault contact with the Sadlerochit Sand, which may lead to pressure con~nunication between the formations, suggesting a con, non reservoir system. · The Sag River - Shublik interval varies from approximately 90 feet on ,, the east side of the field thickening to about 250 feet on the west in the vicinity of the SOCAL/Mobil 33-29E well. This thickening occurs mainly within the Shublik interval. The rate of thickening increases west of TllN, R13E. Exhibit B illustrates the Juxtaposition of the Sag River and Shublik interval against the Sadlerochit sand along the fault mapped on Exhibit C. The major faults shown on Exhibit C are based primarily on geophysical evidence: other smaller faults have not been mapped. Similarity of the Sadlerochit oilZwater contacts in the wells on either side of the fault suggests that this is not a sealing fault, thus allowing pressure communication and fluid migration. The same situation occurs 'wherever there is sufficient displacement along a fault such as to place the Sag River and/or Shublik porosity in contact with the Sadlerochit sand; that is, wherever fault displacements range from approximately 100 to 600 feet. The first figure could place the Sag River and Shublik in contact with the upper part of the Sadlerochit, while the latter could place these formations in contact with the lower port,on of the Sadlerochit sand. Exhibit C illustrates areas where this situation occurs along mapped faults, but the concept is applicable along any fault with sufficient displacement. Now we will consider the other two methods by which we believe the productive Shublik zones could be in communication with the Sadlerochit sand. These are through lateral or vertical stratigraphic changes which place the productive zones in virtual sand-to-sand or lime-to-Sand contact with the Sadlerochit, and through fractures which may permit vertical 2'/8/7]., communication between the Sadlerochit and the overlying productive zones. To illustrate these points I would like to submit Exhibit D. This is a west-to-east correlation section hung on the top of the Sag River sand. It includes wells from SOCAL/Mobil 33-29E on the west through the Mobil/ Phillips North Kuparuk well in Section 26, T12N, R12E to the Prudhoe Bay #1 well on the east--a distance of some 20 miles. The wells are relative- ly spaced, not to scale. This section illustrates the log character and correlation of the formations from the west to the east and h°w the formations tie to the Prudhoe Bay #1 well. The tops of the formations are those selected by the Unit Geologic Subcommittee. Based on core data from the Mobil/Phillips/SOCAL #7-11-12 well, which cored the complete inter~al, there is no obvious evidence of an unconfor- mity between the Shublik and the Sadlerochit in the western area. Bedding both above and below the contact is conformable. Core descriptions indicate that the Shublik is made up of sandstones~ limestones with some phosphatic sands, and .inter-bedded limestone, silt- stone, and shale. PhoSphatic minerals become increasingly abundant toward the middle part of this formation. This phosphate is a characteristic feature of the Shublik. It occurs both in granular and nodular form and alSo as a cementing and replacement mineral. It has a marked effect on radioactive logs, and it is this log response that has been used in select- ing the log top of the Sadlerochit, although the lower sandy unit of the Shublik may more properly be related to the Sadlerochit sand. Referring again to Exhibit D; the sand at the top of the Sadlerochit in the Mobil/Phillips North Kuparuk well has characteristics comon to both the Shublik sands to the west and the Sadlerochit sands to the east. It (.7) 2/8/71 is tripolitic, similar to typical Sadlerochit sand, and phosphatic, similar to Shublik sands. This suggests the possibility of a facies change and/or on-lap of the Shublik from the west onto the higher por- tions of the P~udhoe Bay structure. In any event, there is evidently sand-to-sand or lime-to-sand contact of the formations. This is the second method of possible communication. Shublik core analyses show porosities ranging up to 28% with an av- erage of approximately 5%. The same core data shows permeabilities ranging up to a maximum of 580 millidarcies, but it is typically less than 1/10 millidarcy. Porosities and permeabilities seem to be as var- iable as the lithology. It should be noted, however, that core analyses can not normally measure fracture pemeability. Fractures have been noted in the cores. ~hese .fractures are important in providing permea- bility and could provide vertical communication with the underlying SadlerochIt. Fractures, then, are the third possible method of comunica- ti°n. In s~ry, Mr. Chairman, we have indicated how the Shublik produc- tive units are in stratigraphic contact with the Sadlerochit sand and could be in vertical fracture comunication alSo. We have shown how the Sag River and Shublik are in fault contact wi6h the Sadlerochit sand across .apparently non-sealing faults. We conclude, therefore, that one could expect pressure and fluid com- n~nication between the Sag River, Shublik and Sadlerochit formations where any of these conditions exist. 2/8/?1 SUMMATION By: P.J. Trimble Alaska Division Attorney Mobil Oil Corporation By the preceding testimony, we believe the following points have been substantiated: 1. The Sag River and Shublik formations are hydrocarbon-bearing over essentially the same area as the Sadlerochit. 2. We believe it will be uneconomic to fully develop and deplete the Sag River and Shublik unless they can be developed and commingled downhole, with the Sadlerochit. 3. Unitization efforts are~ considering all three intervals for determination of equities. .4. It is in the interest of efficiency and conservation to pro- duce these formations as an entity. Failure to allow down- hole commingling probably will result in a decreased recovery of the State's natural resources. 5. It appears that the SagRiver and Shublik could be in com- munication with the Sadlerochit under certain conditions. Therefore, we recon~nend that the existing Prudhoe Bay Sadlerochit Field Rules be s~aended to permit downhole commingling of production from the Sadlerochit, Shublik and Sag River intervals. We further recon~nend that the vertical limits of the presently defined Sadlerochit Sand Pool be expanded to include the Sag Ri.ver and Shublik for- mations: tow it, the intervals from 8110 feet to 8680 feet, as exhibited in the Prt~dhoe Bay #! well: that the present Sadlerochit.Field Rules apply to all, and that 'the combination be given an inclusive name, such as the Prudhoe Bay Pool or some other appropriate name. (9) 2/8/71 QUALIFICATIONS FOR EXPERT WITNESS (~.^. D~) I am a Senior Production Engineer with Mobil Oil Corpora- tion. I received a B.S. in Industrial Engineering in 1954. After nine years' experience in the oil industry in Venezuela and Oklahoma, I re- ceived an M.S. in Petroleum Engineering at the University of Southern California in 1964. I have been employed by Mobil since 1964 and have been assigned to the Alaska Division, working on the Prudhoe Bay Field, since 1969. I hav~ worked on the Prudhoe Bay Unit Reservoir Engineering Subcommittee since its inception. I am a member of the Society of PetrOleum Engineers and a past member of the Board of Directors of the San Joaquin Valley section of this organ- ization. I was the author of a paper in 1968 and co-author of a paper in 1965. Both papers were presented at national meetings of the Society~ of Petroleum Engineers. QUALIFICATIONS FOR EXPERT WITNESS (H.N. PORTER) I am the Alaska Division Exploitation Engineer for Mobil Oil Corporation, and have been assigned to this position since October, 1969. In this capacity, I supervise all reservoir engineering work for Mobil's Alaska Division, which includes the Prudhoe Bay Field. I graduated from the University of California at Berkeley in 1953 with a Bachelor of Science degree in Petroleum Engineering. I Joined Mobil in 1953, served a ~term in the military~ then returned to Mobil in 1955. Since then, I have been engaged in various engineering assignments for Mobil in California, and have been in a supervisory capacity since 1966. I am a Registered Petroleum. Engineer in the State of California, and am a member of the Society of Petroleum Engineers. QUALIFICATIONS FOR EXPERT WITNESS I am Division Production Geologist for the Alaska Division of Mobil Oil Corporation. I was assigned to this position in the latter, part of 1969, and am responsible for the geologic evaluation of Mobil's' producing opera- ~tions in Alaska. ~ My formal education consisted of a course of studies at the University of Wisconsin leading to the Bachelor of Science degree which was granted by the University in 1956. Upon completion of post-graduate work at the University of Wisconsin, I was granted the Master of Science degree in Geology in 1958. As continuing education, I have completed numerous short courses associated with petroleum geology. My professional background consists of 13 years of varied geological experience in the employ of Mobil Oil Corporation. In these 13 years, I have alternated between' Production Geology and Exploration Geology in the Rocky Mountain area and in Alaska with a short period in the Mid-Continent area. During the past four years I have been working in various geologic provinces of Alaska, both as an Exploration geologist and, more recently, in Production Geology again. Over the past two years I have concentrated on the geology of the North Slope and Prudhoe Bay. I have been Mobil's representative .on the Prudhoe .Bay Unit Geologicalm~'Subcommittee since its in- ception. My professional affiIiations .include membership, in the. American Associa- tion of Petroleum Geologists, the Wyoming Geological Association, and the Pacific Section of the AAPG. I am also a Registered Geologist in the State of California. ; ~"",' , · , .. -,. , ' '2; '. 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' . · · .','-;,i PUBLIC HEARING - PRUDHOE BAY FIELD February 9, 1971- Call to public Hearing with respect to Conservation Order No. 83-B, Sadlerochit Oil Pool * Introdu'ctoryStatement * 1. Area to be Affected by the Orders * 2. Vertical Definition of the Pools 3. Well Spacing Including Footages to Lease and Property Lines and Acreage Spacing 4. Casing and Cementing Requirements 5. Bottom-Hole Pressure Survey Requirements 6. Gas-Oil Ratio Test Requirements 7. Methods of Preventing Uncontrolled Flows 8. Administrative Approvals, if any 9. Plans for Disposition of Produced Gas 10. Plans for Reservoir Pressure Maintenance; and * 11. Plans for Unitization Testimony included in this volume. Februa.ry 9, 1971 · STATE OF ALASKA HEARING - pRUDHOE BAY SADLEROCHIT POOL INTRODUCTORY STATEMENT Mr'. Chairman, Members of the Alaska-Oil and Gas Conservation Committee, I am F. Harlan Flint, attorney for BP Alaska Inc. It will be my purpose. to make an opening statement in relation to certain testimony that Will be presented at this hearing. In the interest of an orderly presentation, the avoidance of duplication and the organization of materials to be presented, the pre-unit participants have attempted to coordinate their efforts in the preparation of the matters to be presented to you today. In the course of the hearing you will be hearing from representatives of several companies who will offer testimony on items listed in the call of the hearing. You will recall that at the hearing for the establishment of temporary rules in the Kuparuk River and Sadlerochit Oil Pools conducted by this committee on November 13 and 14, 1969, the parties presenting testimony were unable to provide as much evidence as you would like to have had available to you for use in the formulation of pool rules. This derived from two sources. First, it was very early in the exploration and development of this great region and the data available to the individual companies were very limited'. Second, there were compelling reasons for the operators in the area not to divulge information acquired by them which at that time was protected under the State Statutes regarding confidentiality and had unique importance in the competitive conditions that existed. The passage of time, the progress that has been made in the development of the Field and the availability of more data makes it possible for us to provide you now with a substantial amount of information which we trust will assist you in the performance of your responsibility to review the existing pool rules and adopt permanent pool rules. The testimony to be presented and which I will outline will, in large measure, support the retention of existing rules. The extent to which changes will be recommended will be made evident in the course~of these ~ presentations. For reasons that will be touched on later, the presentation I am outlining will be directed exclusively to Conservation Order 83-B, dealing with the Sadlerochit Oil Pool. May I now outline the order of presentations. It is intended that these presentations will generally follow the eleven items upon which testimony was elicited in the published notice of this hearing. The first witness will be D. B. Walker, a geologist employed by BP Alaska Inc., who will present evidence regarding the area to be affected by Conservation Order 83-B. Following Mr. Walker will be two witnesses employed by Mobil Oil Corporation, who will testify in support of the co-mingling within a common well bore of the Sag River Sandstone (formerly called the Oxytoma Formation), the Shublik Formation and the Sadlerochit Formation. Those two witnesses will be H. N. Porter, a petroleum engineer, and J. F. Vitcenda, a geologist. The next witness will be B. C. Anderson, a reservoir engineer, employed by Atlantic Richfield Company, who will provide the Committee with engineering data on the Sadlerochit Oil Pool. The next several items within the call of this hearing cover elements of the pool rules, including well spacing, casing and cementing, bottom hole pressure survey requirements, gas/oil ratio test requirements, methods of preventing uncontrolled flows and administrative approvals. Mr. John Scott, attorney for Atlantic Richfield Company, will present the case on these items. Testimony on the disposition of produced gas will be given by R. F. Cox, Resident Manager of Atlantic Richfield Company. Mr. Scott will comment on reservoir pressure maintenance, and finally, I~ will offer a statement on the Progress of Unitization. Upon the completion of the .above described testimony on the Sadlerochit Pool, counsel for the Standard Oil Company of California will address himself to the call of this hearing insofar as it applies to Conservation Order 83-A, which established temporary pool rules for the Kuparuk River' Oil Pool. I had previously mentioned the desire of the operators in the Prudhoe Bay Field to disclose substantially more information than could be presented to you in the 1969 hearings. I am sure it will be obvious to you that there are still some data and there continue to be some areas of the Field that require strict confidentiality. However we are confident that this hearing will provide a sound evidentiary base for the pool rules already in effect and a good basis of information -which will be useful to the Committee in the performance of its responsibility to protect the public interest in this great Alaskan resource. February 9, 1971 STATE OF ALASKA HEARING - PRUDHOE BAY SADLEROCHIT POOL GEOLOGIC TESTIMONY M~. Chairman and members of the Alaska Oil and Gas Conservation Committee, at this hearing I am presenting geolOgic testimony on behalf of the groups involved in pre-unitization negotiations. Following the previous hearing in November 1969 to establish field rules to apply to the Prudhoe Bay Field, field rules for the Prudhoe Bay SadleroChit Oil Pool were issued on January 12, 1970. We intend at this present hearing to present testimony with regard to the areal definition of the pool affected by these rules. This is to establish whether any revision to the extent of the pool, as previously established, is necessary. At the last hearing BP presented testimony describing the geology of the Prudhoe Bay area. That testimony will not be repeated at this time, but we do present a generalized stratigraphic column to review the vertical sequence of the formations and to indicate the.minor changes in terminology which have been introduced. Exhibit A is this generalized stratigraphic column. The minor changes in terminology have been made largely as a result of informal discussions of the North Slope Stratigraphic Committee of the Alaska Geological Society. Considering the section from the top.downward, an additional formation name, that of the Pleistocene to Recent Gubik Formation, has been added. Its thickness is believed to be 200 to 500 feet in the Prudhoe Bay area. The remaining portion of the beds previously ascribed to the Tertiary Sagavanirktok Formation, consisting of gravels, 'sands, silts and clays, remains as described in the testimony presented in the previous hearing. The naming of the Upper Cretaceous formations in the area now allows for facies differences. The upper part of this interval is referred to as Prince Creek Formation/Schrader Bluff Formation undifferentiated. The former name applies to coal measures - sandstone lithology and the latter name' is applied if the sediments are of a more marine aspect. The underlying Upper Cretaceous mudstones and siltstones have been correlated with the Seabee Formation and these'overlie an as yet unnamed Lower Cretaceous shale. Where seen beneath an unconformity, other Lower Cretaceous rocks are still officially unnamed. In the west this interval contains the Kupar'~[ River Sands but over the major part of the Sadlerochit pool area these are absent due to truncation. The Kuparuk River Sands haVe been discussed in a paper included with the Proceedings of the North Slope Seminar published by the Pacific Section of A.A.P.G. in 1970. The Jurassic beds are still referred to as the Kingak Shale. The Triassic and Permian beds are shown on an~expanded scale in Exhibit B. The sandstone lying beneath the Kingak Shale and above the Shublik Formation in the Prudhoe Bay Field, which was previously termed the Oxytoma sandstone, has been more correctly renamed as the Sag River Sandstone. The type section was defined in the previously mentioned Proceedings of The North Slope Seminar as the interval 8440' to 8482' in the Atlantic Richfield-Humble well Sag River State No. 1. This fine grained, glauconitic sandstone varies in thickness throughout the Prudhoe Bay Field from approximately 20 feet to 60 feet. The Shublik Formation consists of varying lithologies of limestone, shales and sandstones with distinctive phosphatic beds. It varies in thickness from approximately 40 feet to 200 feet. The Sadlerochit sandstone is comprised of sandStones and conglomerates in varying proportion together with minor interbedded shales. The sandstones consist principally of detrital quartz and chert together with pyrite, siderite and some clays. The Geological Subcommittee fo~ed by companies. involved in pre-unitization negotiations has picked the top of this sandstone at 8206 feet in Prudhoe Bay State No. l~and the base at 8673 feet in the same well. Throughout the field area this base is at present picked at the lowest limit of significant sand development. The Sadlerochit sandstone has been seen to vary in thickness through the , field area from approximately 450 feet to 630 feet. The Sadlerochit Sandstone and the underlying shales are referred to as the Ivishak Member of the Sadlerochit Formation. A sandstone which is present in places beneath the Sadlerochit shales is kno~ as the Echooka Member. The previous unofficial grouping of the Sag River Sandstone, Shublik Formation and Sadlerochit Formation into the Prudhoe Bay Group is no longer applicable. The Pennsylvanian - Mississippian succession can be subdivided on an arbitrary basis into an upper predominantly carbonate section termed the Lisburne Group and a lower shale and sandstone section termed the Kayak Shale. In the Prudhoe Bay area the Kayak Shale and Kekiktuk Conglomerate rest unconformably on the "Argillites". This testimony is only concerned with Conservation Order No. 83-B and consequently only with the Sadlerochit Oil Pool. We now intend to present data concerning the areal extent of this pool so that it might be determined whether any change is necessary in defining the area to which the field rules apply. Exhibit C is a structure contour map drawn on the top of the Sadlerochit sandstone in the Prudhoe Bay field area. This map was drawn by the Geological Subcommittee formed by the companies involved in pre-unitization negotiations. The map was most recently updated by that Subcommittee in July, 1970. The map is based on well data and the interpretation of the geophysical data available to those companies. It is, therefore, a compromise interpretation and does not necessarily represent the views of any one of the companies, but is a map initially acceptable to all parties. One area, indicated by shading, in the southwest has not yet been fully resolved and further work is necessary to interpret the structure in that area. On this map is shown the outline of the area to which Sadlerochit Pool field rules currently apply. Wells in the area are indicated as either having encountered oil in the Sadlerochit sandstone, not having encountered oil in the Sadlerochit sandstone, or for which data has not been released. The map shows a structure culminating in a high centered on the area around prUdhoe Bay State No. 1 and truncated on the east by an easterly dipping unconformity surface. This structure has a predominant flank dipping gently to the south and southwest, with average dips of the order of one and half degrees. The structure also dips gently to the west from the high Prudhoe Bay State No. 1 area. The north and northwest flanks of the structure are poorly defined and are shown to be faulted. The northwest striking linear trend to the west is faulted along its southwestern margin. It must be appreciated that the present well data are too sparse and the seismic control inadequate for delineating details of the structure. These will be revealed as additional wells are drilled. The map also shows the currently interpreted limits of the oil and gas accumulations in the Sadlerochit sandstone. In the eastern area the downdip limit of the gas cap is shown, this gas cap extends through the crestal area. The downdip and updip limits of the oil column are also shown, the updip limit being determined from the intersection of the gas-oil contact and the base of the Sadlerochit sandstone. In the western area the downdip limit of the gas cap is shown and also the downdip limit of the oil column. In the western part of the field oil completely underlies the gas cap. These gas-oil contacts and oil~water contacts have been established from tests and wireline logs in individual wells. The contacts have been determined by the members of the Reservoir Engineering Subcommittee formed by the companies involved in pre-unitization negotiations. The contacts in wells have generally been established by averaging the interpreted picks of the individual companies involved° For initial studies it was accepted that in the east a level plane at 8572 feet sub-sea approximated the gas-oil contact and in'the west a level plane at 8775 feet sub-sea is initially acceptable. The oil-water contacts were found to vary throughout the field area and as yet the reason for ~lis is not apparent. The agreed oil-water contacts for the wells were treated as a surface which could be contoured for estimating the distribution of the oil column. This contoured surface, prepared by the Reservoir Engineering Subcommittee-is presented as Exhibit D and requires no further comment except to restate that it is purely empirical in nature and was acceptable to the companies involved. This map was used to construct the oil-water contact traces on the structure Contour map (Exhibit C). To illustrate further the structure a~d fluid contacts of the Sadlerochit sandstone in the area, two cross sections have been prepared, approximately west to east and south to north across the field area. These sections have been drawn on the same horizontal scale as the previously presented structure map although they are expanded at the well points to include the well logs. To indicate the structure and log characteristics, a vertical scale of 1" = 100' has been used which gives the sections a vertical exaggeration of forty to one. Exhibit E is the west to east cross section through Atlantic Richfield- Humble's North-West Eileen #1, Mobil/Phillips' West Kuparuk, Mobil/ Phillips/Socal's 7-11-12 (original) and Kuparuk State No. 1, BP's 09-11-13, Atlantic Richfield-Humble's Prudhoe Bay State #1 and BP's 31-11-16. The resistivity logs for these wells are shown for the Permo-Triassic interval and the immediately overlying beds. The Sag River Sandstone, Shublik Formation and Sadlerochit sandstone are correlated through the · area. In the east the position of the unconformity is shown truncating the Sadlerochit sandstone. The crOss section has been left blank near the area which was indicated to be as yet unresolved structurally. The electric logs indicate the distribution of permeable beds, and the fluid contacts have been placed on the diagram to confo~n with the map (Exhibit D) for the oil-water contact and with the defined gas-oil contacts. The south-north cross section (Exhibit F) is constructed following the same principles used to construct the west to east section. This south to north cross section passes through Atlantic Richfield-Humble's Put River State (7-10-14), BP's 32-11-14, BP's 27-11-14 and Atlantic Richfield-Humble's Prudhoe Bay State No. 1. This section indicates the main south flank of the eastern culmination extending up to the Prudhoe Bay State No. 1 area, and also, a fault between the wells Put River State No. 1 and 32-11-14 is indicated downthrowin9 to the south. This fault interpretation was necessary to'satisfy the well data and has some confirmation in seismic data. To return to Exhibit C, the structure contour map on the top of the Sadlerochit sandstone, the area to which the field rules in Conservation Order No. 83-B apply for the Sadlerochit Oil Pool is outlined.on this map. In light of the results of the co-operative studies of the extent of the pool which we have presented here, and realizing that our knowledge of the area is far from complete, we do not at this time request any change- in the area to which these field rules apply. This concludes the testimony concerning the areal extent of the Sadlerochit Oil Pool and I wish to thank you gentlemen for your attention. Februa.ry 9, 1971 oJ.~l:, OF i'~ASKA ilEARiNG - PRUDitOE BAY SADLEROCfiIT POOL PLANS FOR UNITIZATION At the hearing on November 13, 1969 a letter of intent, previously submitted to eleven companies, was presented to the State. This letter outlined a proposed ~m~itization of the Pe~o-Triassic hydrocarbon accumulations as defined by the PruJ~hoe Bay State No. i well. The letter was agreed to by all parties shortly after the hearing~ A copy of the letter of intent is attached to this s~emission for your records and basically outlines an agreed to basis of unitization~ In the fall of 1969 the Steering Con~ittee convened and the Subcommittee structure was organized. This organization is shown on the attached plat BP No. 1 and the area to be unitized initially is sho~,,~ on Exhibit-No. 2. Since that date the subcommittees and various task forces attached to the subcommittees have been meeting on an almost continuous basis and a great deal of progress has been made. In order to illustrate the amount of effort that is being devoted to unitization, the attached Table shows the approximate man hours that have been applied to the effort of negotiating the terms and conditions to be implemented. It must be realized that in light of the sparseness of data and the enormous size of this pool, it is imperative that every consideration be given to the possible factors and future events that may effect unitization This, unfortunately, requires time. However, definite progress has been made and every effort is continuing to lead to as early an unitization as possible in order to optimize the development of the field and to protect the envir?nment of the North Slope. II Ii II ,:':.. II It was felt that a report on the specific progress by con~nittees and subcommittees would not assist the Committee at this timer however, we would like to point out certain areas of progress. .~ubcomm].~tee has prepared a draft Unit Agreement which has been The Legal ~ '~' ~ Co.~n~_~t~e. They are currentiv discussed with the Oil & Gas Conservation .... '~ ~ working on an Operating Agreement. The Geological S~}conn'~ittee has prepared geological maps and has reached agreement on the interpretations for the majority of the field. It is hoped that complete resolution will be possible in the near future. We would especially like to indicate to the Com~ittee that, although unitization has not been completed, benefits are already being derived from pre-unitization efforts. The Environmental Subcommittee is actively engaged in studies to protect the ecology and to conserve the resources of the area. The Operations Subcommittee is coordinating operations on the Slope to minimize surface usage and disturbances. In addition, the guiding principle behind the pre-unitization negotiations is to develop a plan of unitization that will optimize conservation and protect correlative rights in accordance with the State Statutes. I"',~:;t C;~i(';.: I 'r; ILl I~;~.lli::;. T(:.'( '. 7:.,.,:21 'l-c, lci¢!-~t,~.:' 2 i;; 7.17 (-.,'181 IL !.:. t. el;:;on, Jr. Vice P.c:.id.: n! O(;Lo]_,c].' 29, ]900 ]. ml]}l),_q I)eLroloum Co]nl)a',~Y 1.300 '- ,3,;cur fry Lifo Denv(:r, Co]o~:ado 80202 Attention ?4r. C. W. Corbet~ Mobil Oil Corporation 61.2 Flower o . ,- Los ?-..nge]es, California 90054 Hunl; ]?ctroloum Corl)oration 2900 First National ]2ank ]3ui!ding , 70_02 Dallas Texas ~9 Am er. ada- He s s P.. O. ]3ox 2040 Tulsa, (),-:]~ ho;ha 74102 GeLty Oil Com]:,any P. O. ~ox 1:104 , ~cxas 77001 Ilou s L:3 n ' ~' Louisia'na J.,and & Ex])]orat:ion Co. P O. ]:,~x C;0350 New Orleans Louisiana 70!60 Tvlarathcm Oil Company oo9 Sout]~ Find]ay, Ol',io dSSdO Proposed Cooperative~ Dex;elopmcnt l'rudhoe ]Ia', Field 'YOtt C,2:t(_:]i ]~:.'tVO, been by 2.1l¢] b('[\\'('.CIi []'tO tti,~clc,~'.qig't~cd, Oc[ober 29, lf)69 oil and i_;a.s interval sand body v,,l.~ich was encountered St.:~(:e No. 1Well between lhe dep[hs of 8,0C;~ fce~ subsea and the top of the c. arbon:~t.c~ formation at-o°, 74'7 feet ,~,-,~,~,~ ~ ~,~ ~],~.~. e~nfter( -,-,-' 'cal]ed. .'~Permo- T~'iassic:~'). You each ]~oreby are given an opportunfl:y to join with us the unitization project whic. h Js the su]~jcct matter of that letter, with the understand')nt~ "' that. , ._ I e~.mo Tz~a ......c reservoir underJyJng the unit are,~ each sepa','ate ) ' _ .'~ ~oi . ~ --, when defined, will consLitu(:e a separate oil rim and a separat:e gas cap l)artJcip:~ting area or area(s). The probable first i~tial parLi- .... 3 A-1 aliached cipating area(s) lie East: of the ]mreto as '~J?artic:~patin~j; Ares."; such area(s) may-be adjusted at: the times provided in paragTaph 2 of the letter of August G, ~Gg; 2. fhe p]at ai.tacned ]~,..::et.c) as Exhibit A-lwill ]se and hereby is substa- tuted fox' tJ~e plat a~.~.mh~d as ]-'2x]'fibit A to the aforesaid lebw. r- 3~ -.~--.~: - ended to include each of lha.t such letter shall be and Js ]~,.:~y am ..~'ou as a l)ar~y heret.o x,']d~ tho same force and u~..et~-~ as if sum' ]_ebLcr,~ ~ TM as so amended, had been executed and/or accepted by you and by alt of us; , lbo letter of August 6 ,a~,a ~;~ as herein ...... ,,~.-~: and ratified is to be construed solely as a commJtmenl on the part of each party to ' ' ]otter to ' -"" negotaat, e in good faith wi(:h the other parties to achieve unit- jzatJon Jn aceordanm with the pri~ciplcs set forth therein. Such !et- ter shall not commit any '-, .....~ cn~ which ._ pa.rc) to ~'" cxecution of any docum~' '- proves unacceptable to it. Neitl~e~' shall the execution of this letter (or the ]e,.t.( ~. of Aui,;ust 6 1969) be col~sfruod aS a waiver by any party of any legal or equitable -r~ght whit. Jr i~ otherv,'ise would have; prov]aod thnt nothing herein M-ml] be eon ....... c. cl to neg'ato or relieve ]~1.), Atlan[ie or Hvm]blo of any co~n]n]t.moJ_Ls undo]-tal-con in or pur- suant i:o 'Lhe ]e(tcF Of Au~ttst 6, 19(49; e any geo]of,;J¢'.a], seismic, well or related information eone.a ]ands witl~Ju the unit area, as shown on Exhil~it A-l, which we may ~-nake ava/]able ['o you 1)ursuani: to thfs ] ..... ' ' ' -. · toward formation of the unf~ f;l~a]l bo held co~tfidc~ti:ti by you and ~ot be disclosed l~y yott [o anyone who has no[ nceepted'i]~is letter t:,rior to COt~:~Ln)~l~:ttfOn C)f ilte Unit A/;rce]uent, or Al)ri] 1, ]970, x'.'hicJ~('x'cr Js ]ator, wj[:l':ou/ our xvl'it[uu 29, ]969 O,r 1,.rexent timcta]4e ?,ntici'jt;af.e;:; Ii-mt the Unit A. grec~nent and U'nJt Oper'ttJ~g A[~rc. emcni, will be fa ffnal form and executed o~ or before April ~ 1970 1[ Js a~c~l:~at:eui],,,,, ~-" ~, . ])ti,.)JlC [[I-!})Otii]CC]TiC]]~ ~J. ~.JIC lli.]b will l.,e made a~ [:he Field l~uies ..... l-,~,at.'~:~' on November oomn~j{.{c, cs arc 10c, jug formed ,,r,~ recommendation for 1 .... ncllmo oz ilnl)O:,:i,:m[: matters will loe forthcoming. If you ao-,--,,., _ t-.e to join with us, and. with such of the other addressees of , this let!:er as agTce to join in the undertaking described Jn sam letter, aS ]lelyoJll alii ended, p]ease so indicate by exccul:ing and by returning copy of this letter to each of the undersignmd. 4- - *We would apl~reciate your reply to this ]e~tc,..: by November 10, but in an.,v evcni: not la.tc:r than January i, 1970. ~Xom .... very iruly, t~. O. ]Box 2819 Dallas, Texas 75221 BP O]'L C ~ ~ '-'"~"-- ' O]., ]~ O~',,~ l ION By · 620 Fifth Avep. ue New '~.o_:k New York ]0020 IlUMBI,E OIL & REF.!NiNG COhiPANY lIousto~, .l'(.'x:ts 77001 This (la), of , i969 S'fANDAI2D OIL COMPANY OF CALIFORNIA I:~III]-,LI]?S ]_:~];;'f]~OLEUM C02(IPAN-Y By MO~I]L OIL CORI~ORATION By HUN'[' PETIIOLEUM CORPORATION By AM. EI:IADA--IIE SS By G]ilT'i"Y OII, CO>,II"ANY By -' f(~ ' A 'r ~ ~ 'r ].,()~}~,::),~N~', ]bAND &', g'J.A]~A.J IlO.tx 0I'~ CO3'I]?ANY .:%.' 5:". <' -~ ........ : ,: ,..,.. ~ ...... ., ., . .~., ...~ ~ ,,..,~.~?, ' 't"' ~"~.' "' :' ."'.'-~. '>-'"-~'~"'-:: "',':,"-, '"':'-"..-':~ AREA ,,,,UNIT AREA, · " :,.,.. g ,c.-,,,, · /, '~,-,':-': .'?'F? chileldComi,'a nY,.. Aup. F~st 5, 1969 BP Oil Co?.]}o].'ation 620 l,'ifth Avenue New York, New York 10020 Htunble Oil & Refining Company P. O. Box 2180 Houston, Texas 77001 Re: Proposed Cooperative Development Prudhoe Bay Field Gentlemen: In order to promote conservation, t'o increase ultim'ate recovery, to eliminate unnecessary dri]Hng, to avoid waste, and to insure each part. icipant a rcasonab!o opportunity to recover its fair share of the oil and gas in place, it appears desirable to us that the oil and gas interval sand body which was 'm~countered in . Pruch,oe Bay State No. I XVei! bet~vcen the depths of S, 0~O feet subsea and thc top of the- carbonatezor}na~on' at 8,747 feet subsea as determined by reference to dual induction log of said well dated March 9, 1968, and furnished th.e parties hereto underlying tae mu~ area out- lined on the plat attached hereto as'Exhibit A bo developed, operated and produced as if O~e ~mit area had been inc]udcd in a single lease, Ac~ co~clm~]~, we oropose that am)rob)ri, ate legal, anm unitization committees be appointed to commence work immediately after the next competitive State ]ease sa]e (e:q}eeted about September 11, 19{39) to agree on definitive forms of a Unit ' ~ ..... - '~ and a Unit Operating Agreement which would, o,ner things' among "' 1. Establish separate participating areas 'for the oil rim and the gas cap each with sepa- rate ownerships vcithin thc unit area based on At!dnlic:;ichli¢;dComp;~nY -2- oil ori,,""nllv in l)lacc and ,ms ,3,, ~ ,, _ ,ri,~,.',,ai!y in p]:tcc with c..2c]l tract, in each partici- pz~ '" . ........ :, .....,-.-,-'o,~ 'iatc pcrccr~ia~;c o[ production under A[,rcc~,,(.,,,. m~d with each. tract working' interest OV,~lOr }JCal'" *rr .. . ~-t,a, thc royalties, royalties and production pa}m~cnts on produc-- tion allocated to thc particular tract and other lease burdens applicable'to such tract. Any lease TM ' -: o- lands within thc Exhibit A area proven to bo p;oductive in the same sand interval and subsequently acquired by any party hero[o may be added the same basis, Each participant shall take its s]mrc of rite oil and gas in kind and separately shall dispose of its share el the ' bcl~e~ of production. In any event thc discovery royalty on production allocated to the lease on wmcn Pru~me ~ "State No. 1 well was drilled shall be shared equally by thtmble and Atlantic' Richfield. 2. Make initial separate determination of oil and gas originally in place underlying separatgly owned tracts included within the unit area outlined on Exhibit A, by April 1,' 1970, . based on data available as of September 30, 1969 and another separate de/ermination of oil and gas originally in p~ac underlying separately owned tracts; included within the unit area outlined on E~ibit A, by January 1, 1973 u,.fi~zms data- available as of July 1, 1972. A final and separate determination of oil and gas originally in place underlying the separately owned tracts included within the unit area will be made by January 1, 1976. S. Each party snail cons,dr with other - "' ~ hereto as to location and pr%ceded deoths to be drilled on all wells projeeteci for completion in the subject sand in order to assure m~ orderly deveiop- merit of thc field in accordance with sound cng4- noering principles. Notwithstanding anything herein AtlnnlicRichlicldCom?any - ;3 - to the coutrary, each part.y at ira solo risk, cost and expense shall be free to develop its own ]cases with activity it alone sccs fit. it is contcn~platcd stmonc ac to such prior exl)cnd;tures, adju .... ,~ . however, tim unit tubal! uot be uecessarily obligated to pay for wells not agx'eed u~n by the above consultation. 4. Permit the ov,mers of thc oil rim particinatin~ area to ...... at their sole cost, risk and expense, solution gas in thc gas cap or in another appropriate sand underlying unit area. Since a given well simultnneodsly may produce off, solution gas, and gas cap gas, a formula will be included m the .... ~-~o. agree- . ' O1~O * ~ method of ment sett-,:o out a sesarate!y measur' and accounting for such products where that condition occurk,' . 5. Provid~ {0r possible expansion of the unit area and revision of the pattie;~*~"~ oil rim and o-o~, cap arc~ on m~ basis of oil and gas respectively originally in place, with provisions for handling investment adjusanents, prior production, and other relevant mat'mrs-upon ~Vlo~O~, expansion and "~ '~'~ 6. Provide for more than one Operator, with BI) being one of the operators. 7 I~-ovide for formulas that will aAoca~e the relative production from the gas cap and the oil rim. 8. The participants in the oil rim partici- pating area agree to the objective of dcvelol)ment of the field as quickly as is economically prudent so as to permit each such participant a level of Arian Iic~ticl ilicld Compa ny -4- offtal.:c not late? than Jar, uary, 197G ofatleast ?~r:.] auuuallv of the oil ru-i,,'inailv three :,ercen[ ' ~ .... leases presently owned or to ooca,uea by of tho ]c~i)auts wi the area. All the forcgoin,% is subject to valid rules and rcg'ulations o£ the ~mte Reg~fia{ory A~,~nv having jurisdfction and to applicable laws, rules and re[Talatfons of the State of Ai~.ska and the Government of the U~itcd States. If the above ~s m. accordance w~.n your · o- please execute and re~rn to us one copy of 1~o, this letter. " Yours very ? T.F. Bradshaw · .. ACCEPTED AND AGREED TO ::,:. this (.-" "~'" day of _~.- .... - ..... -- BP OIL~O, RPORATION /.~ .i- ~') HU>,{ I~E OIL 1969 ,..1, :/'.:/ TFB/sa EXIi' lB IT ~; PRE-UNIT ORGANIZATION B.P. NO. PROPOSED PRUDH.OE BAY UNIT MANAGEMENT COMMITTEE I STEERING COMMITTEE · SUBCOMMITTEES GAS CONSERVATION ENVIRONMENTAL RESERVOIR ENGINEERING GEOLOGICAL FIELD DEVELOPMEN'I' PLANNING OPERATIONS TAX ,I ACCOUNTING '1 i LAND AND LEGAL TABLE ~pro>~'imate Man Hours on Meetings of Subcommittees to Date Subcor~a]_ttee No. of Formal [~eetiu. gs Accounting 1! Enw'[ rorm~enf, a! 1-2 Field/Dev. Planning 7 Gas Conservation 5 Geological 10 Operations 12 Reservoir Eng. 15 Land and Legal 12 Tax 8 Time Man/Hours 1,900 1~.I00 2,300 6,500 7,000 1,200 42,500 7,200 600 In addition to the above major subcommittee meetings and preparatory work~ various small task forces have been conducting work on an almost continuous basis.
