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Home My WebLink AboutCO 179Conservation 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. /--7-~- Conservation Order Category Identifier Organizing Ido.~,l RE~AN VColor items: [] Grayscale items: [] Poor Quality Originals: [] Other: NOTES: DIGITAL DATA OVERSIZED (Scannable with large [] Diskettes, No. / plotter/scanner) '[~ Maps: [] Other, No/Type [] Other items OVERSIZED (Not suitable for plotter/scanner, may work with 'log' scanner) [] Logs of various kinds [] Other BY: ROBIN ~ Scanning Preparation BY; ROBIN Production Scanning Stage 1 PAGE COUNT FROM SCANNED DOCUMENT: I I~ PAGE COUNT MATCHES NUMBER IN SCANNING PREPARATION: YES NO Stage 2 IF NO IN STAGE 1, PAGE(S) DISCREPANCIES WERE FOUND: ~ YES ~ NO (SCANNING IS COMPLETE AT THIS POINT UNLESS SPECIAL ATTENTION IS REQUIRED ON AN INDIVIDUAL PAGE BASIS DUE TO QUALITY, GRAYSCALE OR COLOR IMAGES) General Notes or Comments about this Document: 5/21/03 ConservOrdCvrPg.wpd STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage, Alaska 99501 Re: THE APPLICATION OF KATALLA ) TERTIARY RECOVERY CORP. for ) an exception to 20 AAC 25.055) and for the adoption of field) rules for the Katalla Field. ) Conservation Order No. 179 Katalla Field Katalla Pool. April 28, 1982 IT APPEARING THAT: I · Katalla Tertiary Recovery Corp., by correspondence dated March 2, 1982, requested the Alaska Oil and Gas Conservation Commission to grant an exception to the statewide spacing regulations contained in 20 AAC 25.055 and to adopt special field rules for the Katalla Field. · Notice of a public hearing was published in the An,chorage Times on March 9, 1982. · A public hearing was held on April 7, 1982 at the Municipality of Anchorage Assembly Room, 3500 East Tudor Road, Anchorage, Alaska. Testimony was presented by the applicant and there were no oral or written statements received. 4. The hearing was held open until April 21, 1982. FINDINGS: · · · · Natural oil seeps discovered in the Katalla Area in 1896 attracted the attention of oil explorationists. Oil was first discovered by drilling in the Katalla area in 1902 and oil was produced from the Katalla Field from about 1904 to 1933. Exploratory and development wells were drilled in the area without spacing regulations and the exact location of 18± successful wells is not certain. The location of the successful oil wells appears to be confined to a surface area of about 90 acres. Conservation Order No. 179 · · · · · 10. 11. 12. The 90 acres appear to be within the boundaries of "Oil Claim No. 1", a 151.17 acre parcel that was patented in 1909 and recorded in 1913. Mineral Survey 599 and Oi! Claim No. I appear to be synonymous. The oil accumulation in the Katalla Field appears to occur in fracture porosity and the successful wells found oil in the interval occurring from 360± to 1800± feet below the surface. There is little subsurface information on this field and the available information does not appear adequate for the establishment of a permanent well spacing rule. Katalla Tertiary Recovery Corp. requests permission to exploit the Katalla Field by drilling ten new wells in the area of the originally developed field without spacing restrictions. Some of the existing wells in the field are still leaking oil and gas in small quantities but this may still be due to natural seepage. For safety and to prevent further seepage to the surface, the production casing should be cemented to the surface. The nature of the accumulation indicates that low pressure blowout prevention equipment should prove adequate. The adoption of pool rules for the Katalla Field eliminates the need to grant an exception to the state- wide spacing regulation. NOW THEREFORE IT IS ORDERED THAT the rules hereinafter set forth apply to the following described area: Oil Claim No. I as recorded in Book 3 of Deeds, page 439, Cordova Recording Precinct and located principally in the NW '- Section 31, T19S, R6E, CRM RUle' i,' Name~°f the Field The field will continue to be known as the Katalla Field· Rule" 2,' 'Definiti°n. of POol The Katalla Oil Pool is defined as the accumulation of oil that is common to and occurs between the depths of 360 feet and 1800 feet under Oil Claim No. 1. -2- Conservation Order No. 179 Rule 3. Well Spacing There is no spacing requirement for wells drilled on Oil Claim No. I except that the pool cannot be opened to a wellbore that is closer than 500 feet to the exterior boundary of Oil Claim No. 1. A total of ten wells may be drilled without spacing restrictions. With the data obtained from the wells, the Alaska Oil and Gas Conservation Commission will either admin- istratively continue the unlimited spacing rule, upon request, or call for a public hearing to determine the correct spacing for the further development of the pool. Rule 4. Blowout Prevention Equipment Before drilling below the conductor casing, a flow diverter system must be installed, capable of diverting the flow of any hydrocarbons or other fluids from the wellbore through a minimum 4" diverter line. This diverter system shall include either an annular type (1000 psi WP) preventer or two ram type (1000 psi WP) preventers. Rule 5. casin~, and Cementin~ Requirements (a) For proper anchorage and to prevent an uncontrolled flow, a conductor casing shall be set at least 80 feet below the surface and sufficient cement shall be used to fill the annulus behind the pipe to the surface. (b) To provide suitable and safe operating conditions, to confine liquids to the wellbore, to prevent migration of fluids, to assure control of pressures encountered and to protect strata bearing fresh water, a production casing shall be set through or just above the productive interval and shall be cemented to the surface. Ru i e' 6 _Logging__Requi~r eme n t s The operator shall log the portion of the hole below the Conductor casing by a complete gamma ray-neutron log. Rule'7 Administrative Discretion Because of the paucity of subsurface information as of th-e date' of this order, the Commission by Administrative Order, may amend any rule contained in this order should waste appear imminent or correlative rights be in jeopardy. -3- Conservation Order No. 179 DONE at Anchorage, Alaska and dated April 28, 1982 C. V. Chairman Alaska Oil and Gas Conservation Commission HarrY.W. Kullen"' -~' nd Gas 12onservat ion 12ommi ss ion . Lonn~e 12. 12ommi ss ioner Alaska Oil and (las 12onservation 12ommission -4- Katalla Oil and Gas 2'he Chugach National Forest is responding to an operating plan filed for drilling from private land into the oil and gas estate held by Chugach Alaska Corporation on the east Copper River Delta, near the Katalla River. There is no drilling proposed on Chugach National I:;orcst, but equipment must be transported across the National Forest lands to private land. History and Background Numerous oil and gas seeps along the Gulf of Alaska coast, in the Katalla- Controller Bay area led to the discovery and development of the Katalla oil field, the first con-maericial field in Alaska. Between 1900 and 1930, forty-four wells were drilled in the Katatla area. Twenty-eight of these xverc drilled in the Katalla field; 18 produced. Most of the past producing wells were located xvithin a 60 acre tract. In the 1960s two more wells (dry holes) were drilled along the Bering River, for a total of 4-6 onshore wells. A small refinery operated on site, from 1911 until 1933. The refined products were marketed locally to the fishing fleet. A total of 154,000 barrels xvas produced over 30 years. Oil and gas mining claim patents were issued for 400 acres near the head of Katalla Slough in the early part of the century. In 1905, tl.~ere 'was an "oil boom" going on at Katalla; by 1907 some 5 to 10 thousand people jammed into Katalla. Severe storms in the fall of 1907, destroyed the breakwater and dock, and probably contributed to the abandonment of Katalla as a railroad terminal. The loss of the railroad'was a turning point. Katalla had a brief economic rebirth in the 1920s after the oil-land leasing law passed. The early 1930s hit hard at oil production, although the Chilcat Oil Company at Katalla, continued to pump and refine for local consumption. The last day of oil production was on Christmas Day, 1933, when the refinery caught fire and burned. (The Copper Spike by Lone E Janson). The refinery was never August 200I rebuilt. According to the USGS Bulletin of 1937, "It ',vas considered undesirable to replace the building and equipment, because the outlook was not encouraging for the profitable operation of the property." The old townsite has since all but disappeared. Oil continued to seep to the surface, generating interest and investigations as to the source. Twenty-three other wells were drilled along the coastal plain of the Gulf of Alaska between Controller Bay and a point just east of D~a] Bay. No producible hydrocarbons were found in any of these xvells (Risley and others, 1992). Thirteen wells have been drilled offshore in the Gulf of Alaska, to date. No producible hydrocarbons were discovered in any of these exploratory wells. Geophysical exploration in the Gulf of Alaska has produced 116,015 ~rfiles of common-depth-point (CDP) data and 10,075 miles of high resolution data (HILl)). The Minerals Management Service, Alaska Outer Continental Shelf (OCS) Region has collected 31,099 miles of CDP and 3,911 miles of HDR data. The petroleum industry has also collected 13,349 flight-line ~rfiles of gravity and magnetic data. None of this data has resulted in any producing wells. Under the 1982 Chugach Natives, Incorporated, Settlement Agreement, Chugach Alaska Corporation, holds the exclusive right to all the oil and gas deposits in what is referred to as the "Katalla Oil and Gas area" on the Copper River Delta. Chugach Alaska Corporation's fights include the right to construct and maintain, under reasonable regulation, structures necessary to enable the full enjoyment thereof, so long as a well capable of producing in paying quantities has been completed by midnight December 31, 2004. If a well has not been established by this time, all rights, title and interests of Chugach Alaska Corporation revert to the United States. Any fields discovered remain property interests of Chugach Alaska Corporation so long as oil and gas is produced in paying quantifies. Kataila Oil and Gas Page 2 of 2 Current Situation Mr. Bill Stevens of Cassandra Energy Corporation has entered into a lease option agreement with Chugach Alaska Corporation and, as an agent of Chugach Alaska Corporation, has negotiated for access xvith other owners of private land near Katalla Slough. He has proposed moving heav7 equipment and drilling equipment into the area by shallow draft barge and then crossing a parcel of National Forest to access an existing road which xvould alloxv him to access private property fi'om which the drilling xvould take place. 'l'he Cordova Ranger District is currently requesting public comment on the drilling proposal to determine the scope of the proiect and to surface any significant issues relative to the proposal and the area in order to complete an EA/EIS. The .Alaska National Interest Lands Conservations .Act (AN II,CA) authorized reasonable access to pfivate lands. The access route established in '1983 (folloxvs a historic route -"<>id wagon road") across National Forest to patented lands has been altered by changes in the fiver. The Chugach National Forest is responding to the request for new access. Forest Plan Revision The Forest is worldng towards completion of Forest Plan revision. The Record of Decision is expected to be signed this fall. Chugach Alaska Corporation's reserved rights constitute valid existing rights and are provided for in all alternatives. More Information Chuck Frey, Planning Staff Officer, Chugach National Forest, 907/271-2557, Carol Huber, Forest Geologist, Chugach National ])'<)rest, 907/271-2541, or Bob Behrends, Cordova District Office, 907/424-4729. Selected Katalla References Bruns, Terry R., Plafkcr, (;corgc, 1975, Prcliminary Structural Map of Part of thc ( )ffshorc Gulf of ,\laska Tertiary Province, ()1; 75-508, United States l)cpartmcnt of thc Interior, (;cological Survey, Menlo Park. Nelson, S. W. ct al, 1984, Mineral Resource Potential of thc Chugmch National I;orcst, Alaska, Map MI'; 1645- ,\, United States l)cpartmcnt of thc Interior, (;cological Survey, ,\laska. .}ansons, U. ct al, 1984, Mineral ()ccurrcnccs in thc Chu.~ach National I;orcst, Sot.thccntral Alaska, MI,A 5- 84, United States l)cpartmcnt of thc Intcrior, Bureau of Mi,~cs, Alaska. Kachad(~orian, Reuben, 1960, I ';nginccring (; cology of thc I<atalla Area, Map Mi; 1-308, Alaska, United States l)cpnrtmcnt t~f thc Interior, (;cological Survey, Alaska Miller, I). J., 1951, Prdimina~.'y Report on the (;coh~gy and ()il Possibilities of thc Katalla District, Alaska, ()I;R-50, United States l)cpartmcnt o£ tine }ntcri{~r, (; cological Survcy, ,\laslm. Miller, 1). J., 1959, (;cology of Possible Petroleum Provinces in Alaska, Bull. 1094, Unitcd States 1)cpartmcnt {~f thc Interior, (; cological Survey, Alaska, pp 37-47. Miller, I)..}., 1975, (;cologic Map and Sections of thc (;cntral Part of thc Katalla l)istrict, Alaska, Map MI;-722, 2 sheets, United States 1)cpartmcnt of the Interior, (;cological Survey, Rcston, Va - 1981 (reprinted) Platker, George, Bruns, T. R., Carlson, T. R., Moinia, B. F.. Scott, E. W., Kahler, Rodger, and Wilson, Charles, 1978, Petroleum Potential, Geologic Hazards, and Technology 'for Exploration in the Outer Continental Shelf of the Gulf of Alaska Tertiary Province, OF 78-490, United States Department of the Interior, Geological Survey, Menlo Park Platker, George, 1967, Geologic Map of the Gulf of Alaska Tertiary Province, Alaska, Map !-484, United States Department of the Interior, Geological Survey, Washington D.C. , 1975, Interim Report on Petroleum Resource Potential and Geologic Hazards in the Outer Continental Shelf of the Gulf of Alaska Tertiary Province. OF 75-592, United States Department of the Interior, Geological Survey, Menlo Park. Turner, Ronald F. (Ed.), Risley, David E., Martin, Gary C., Lynch, Maurice B., Flett, Tabe O., Larson, John A., Horowitz, Warren L., 1992, Geological Report for the Gulf of Alaska Planning Area, OCS Report MMS 92-0065, U.S. Department of the Interior, Minerals Management Service Alaska OCS Region, Anchorage. Alaska. Katalla Oil and Gas Comment Form: Please fold and mail to the address on the back. Name: Address: Phone Number: e-mail: Katalla Project Cordova Ranger District P.O. Box 280 Cordova, AK 99574 '01/1999 APl NUMBER PERMIT 033-10008-00 100-050 053-10009-00 100-051 033-10010-00 100-109 033-10011-00 161-030 033-10011-01 161-052 035-10002-00 100-052 043-20001-00 177-005 043-20002-00 177-027 057-10001-00 100-053 057-20001-00 177-006 057-20002-00 177=051 057-20003-00 181-055 059-20001-00 175-072 061-10001-00 163-014 061-20001-00 172-002 069-10001-00 100-054 069-10002-00 100-055 069-10003-00 100-056 069-10004-00 100-057 069-10005-00 100-058 069-10006-00 100-059 069-10007-00 100-060 069-10008-00 100-061 069-10009-00 100-062 069-10010-00 100-063 069-10011-00 100-064 069-10012-00 100-065 069-10013-00 100-066 069-10014-00 100-067 069-10015-00 100-068 069-10016-00 100-069 069-10017-00 100-070 069-10018-00 100-071 069-10019-00 100-072 069-10020-00 100-073 069-10021-00 100-074 069-10022-00 100-075 069-10023-00 100-076 069-10024-00 100-077 069-10025-00 100-078 069-10026-00 100-079 069-10027-00 100-080 069-10028-00 100-081 069-10029-00 100-082 069-10030-00 100-083 069-10031-00 100-084 069-10032-00 100-085 069-10033-00 100-086 069-10034-00 100-087 069-10055-00 100;088 069-10036-00 100-089 ALASKA WELLS BY APl FINAL DATE OPERATOR WELL NAME PHILLIPS KERR PHILLIPS KERR PHILLIPS KERR STANDARD OIL STANDARD OIL ALASKA NATIVE LOUISIANA LAN LOUISIANA LAN U S NAVY TEXACO INC CHEVRON USA I CHEVRON USA I LOUISIANA LAN GULF OIL CORP GULF OIL CORP ALASKA DEV CO ALASKA DEV CO ALASKA DEV CO ALASKA DEV CO ALASKA DEV CO ALASKA DEV CO ALASKA DEV CO ALASKA DEV CO ALASKA DEV CO ALASKA DEV CO UNKNOWN ALASKA PETROL ALASKA PETROL ALASKA PETROL ALASKA PETROL ALASKA PETROL CUNNINGHAM, C CUNNINGHAMt C ALASKA PETROL ALASKA COAL 0 ALASKA COAL 0 ALASKA COAL 0 AMALGAMATED D AMALGAMATED D AMALGAMATED D AMALGAMATED D AMALGAMATED D ST ELIAS OIL ST ELIAS OIL ST ELIAS OIL ST ELIAS OIL ST ELIAS OIL ST ELIAS OIL ST ELIAS OIL CHILKAT OIL C CHILKAT OIL C SULLIVAN 2 SULLIVAN 1 SULLIVAN STRAT 1 CHAIX HILLS 1 CHAIX HILLS 1-A WATER WELL DOYON LTD 2 DOYON LTD 3 GRANDSTAND TEST 1 TULUGAK 1 TIGLUKPUK 1 COBBLESTONE 1 DOYON LTD 1 SANDY RIV FED 1 PORT HEIDEN UNIT 1 A B C NO. 1 GO NO. 2 O0 NO. 3 NO. 103 NO. 104 NO. 105 NO. 108 NO. 102 NO. 110 NO. 111 NO. 112 NO. 113 NO. 114 NO. 106 (C. CNNGHAM NO. 1) NO. 107 (C. CNNGHAM NO. 2) NO 101 (ALSO RATHBUN NELL) NO. 115 (A. C. O. CO. NO. 1) ALASKA COAL OIL CO 2 ALASKA COAL OIL CO 3 NO. 4 NO. 5 NO. 6 NO. 7 NO. 8 NO. 9 NO. 11 NO. 12 NO. 13 NO. 14 NO. 1.5 NO. 16 NO. 17 NO. 18 HD 12t056 10,013 4,837 10,017 10t121 454 9,123 13,533 3~939 16,457 15,797 11,512 11~044 13,068 15,015 270 550 1,000 9OO 4OO 7OO 8OO 1~000 580 1,710 280 1~500 1,500 1,600 300 1,700 1,040 272 25O 690 1,000 200 645 1,100 1,810 1,130 903 9OO 2,265 740 9O3 1,000 TVD 12~056 10,013 4,837 9,123 13,533 31939 16,457 15,650 11,298 10t836 14,709 STATUS COMPLETED P&A 3/21/1957 P&A 12/28/1955 P&A 5/19/1954 P&A 11/10/1961 P&A 3/03/1962 P&A 1952 P&A 5/16/1977 P&A 9/13/1977 P&A 8/08/1952 P&A 12/31/1977 P&A 12/12/1978 P&A 3/11/1982 P&A 8/04/1976 P&A 12/03/1963 P&A 9/14/1972 P&A 1901 P&A 1904 P&A 1904 1-OIL 1903 1-OIL 1904 1-OIL 1904 P&A 1904 P&A 1904 P&A 1904 P&A 1904 P&A 1903 P&A 1903 P&A 1903 P&A 1904 P&A 1906 P&A 1908 P&A 1904 P&A 1904 P&A 1906 P&A 1917 P&A 1917 P&A 1917 1-OIL 1912 1-OIL 1912 P&A 1912 1-OIL 1912 P&A 1913 1-OAS 1917 1-OIL 1-OIL 1-OIL P&A P&A 1-OIL 1'0iL 1-OIL 7/09/1918 9/07/1918 6/00/1919 1920 1920 1920 1920 1921 PAGE CURRNT DATE OF STATUS CUR STATUS 73 P&A 12/00/1933 P&A 12/00/1933 P&A 12/O0/1933 P&A 12/O0/1933 P&A 12/OO/1933 P&A 12/00/1933 P&A 1920 P&A 12/00/1933 P&A 12/OO/1933 P&A 12/00/1933 P&A 12/00/1933 P&A 12/00/1933 P&A 12/00/1933 /01/1999 ALASKA WELLS BY APl PAGE 7q APl NUMBER 069-10037-00 '069=100~8=00 069-10039-00 069-100q0-00 069-100~1-00 069-100~2=00 069-100~3-00 069-100h~-00 069-100q5-00 069-100h6-00 069-100~7-00 069-20002-00 069-20003-95 069-'2000~-95 069-20005-95 069-20006-95 069-20007-95 069-20008-95 069-20009-95 069-20010-95 069-20011-95 073-20001=00 083-10001-00 083-10002-00 083-20001-00 '089-20001-00 089-20002-00 089-20003-00 089-2000h-00 "089-20005-00 089-20006-00 089-20007-00 089-20008-00 PERMIT 100-090 100-09i 100-092 100-093 100-09q 100-095 100-096 100-097 100-098 161-041 161-051 185-124 185-125 185-126 185-127 185-128 185-129 187-130 185-131 185-132 185-133 177-052 162-003 100-099 18q-100 169-120 170-057 17q-O1q 175-002 176-085 177-06q 178-005 179-001 179-080 180-0q5 180-0h6 180-090 180-100 180-101 182-019 181-069 181-119 181-1h0 182-208 18~-025 193-1q9 194-00q 19q-015 196-008 198-25~ 173-002 089-20009-00 089-20010-95 089-20011-00 089-20012-00 089-200th-95 089-20015-00 089-20015-95 089-20017-00 089-20018-00 089-20019-00 089-20020-00 089-20021-00 089-20023C00 089-2002h-95 089-20025-00 089-20026-00 093-20001-00 OPERATOR CHILKAT OIL C CHILKAT"OIL C" CHILKAT OIL C CHILKAT OIL C CHILKAT OIL C CHILKAT OIL C CHILKAT OIL C ST ELIAS OIL ALASKA GULF S RICHFIELD OIL RICHFIELD OIL ALASKAN CRUDE ALASKAN CRUDE ALASKAN'CRUDE" ALASKAN CRUDE ALASKAN CRUDE ALASKAN CRUDE ALASKAN CRUDE ALASKAN CRUDE ALASKAN CRUDE ALASKAN CRUDE CHEVRON USA I UNION OIL CO UNKNOWN ARCO ALASKA I MOBIL OiL COR ' HUMBLE OIL AN EXXON CORP MOBIL OIL COR ExxoN CORP EXXON CORP EXXON CORP MOBIL OIL COR EXXON CORP EXXON CORP EXXON CORP SOHIO ALASKA EXXON CORP' EXXON CORP EXXON CORP PHILLIPS PETR BP EXPLORATIO EXXON CORP EXXON CORP UNION OIL CO BP EXPLORATIO ' BP EXPLORATIO BP EXPLORATIO BP EXPLORATIO BP EXPLORATIO ' AMOCO PRODUCT WELL NAME NO. 19 No. 2d NO. 21 NO. 22 NO. 23 NO. 2~ NO. 25 NO. 10 (ALSO NO. 109) JOHNSON 1 BERING RIV UNIT 1 BERING RIV UNIT 2 KATALLA KS-01 KATALLA KS-O2XX KATALLA KS-O3XX KATALLA KS-OqXX KATALLA KS-OSXX KATALLA KS-O6XX KATALLA KS-O7XX KATALLA KS-O8XX KATALLA KS-O9XX KATALLA KS-IOXX EAGLE CK 1 NENANA 1 TOTATLANIKA CK. ? TOTEK HILLS 1 W STAINES ST 18-09-23 E MIKKELSEN BAY ST 1 ALASKA ST A 1 W STAINES ST 2 PT THOMSON UNIT ' 1 PT THOMSON UNIT 2 PT THOMSON UNIT 3 STAINES RIV ST 1 PT THOMSON U~IT 4 ALASKA ST B lXX ALASKA ST C 1 CHALLENGE IS 1 PT"THOMSON UNIT 6XX ALASKA ST D 1 ALASKA ST D 2XX P.T.UN.N.STAINES RV.1 ALASKA ISLAND 1 ALASKA ST F 1 ALASKA ST G 2 E DE K LEFFINGWELL 1 YUm'ON GOLD 1 SOURDOUGH 1XX SOURDOUGH 2 SOURDOUGH 3 RED DOG 1 CATHEDRAL RIV UNIT I FINAL DATE MD TVD STATUS COMPLETED 1,q65 1-OIL 1922 1,220 1-OIL 1922 1,750 1-OIL 1922 1,280 1-OIL 1923 1~160 1-OIL 1925 2,350 PeA 1926 2,005 P&A 1932 1,613 P&A 1917 190 P&A 1930 6,175 6,175 P&A 11/02/1961 6,019 6,019 P&A 1/20/1962 1,838 1,838 SI 10/01/1986 12,0h9 11,974 P&A 12/01/1978 3,062 3,062 P&A 3/06/1962 q0 PaA 1920 3~590 3~590 P&A 10/08/1984 13,329 13,329 SUSP 8/13/1970 15,205 15,205 P&A 6/16/1971 1~,206 lh,206 P&A 9/06/1975 13~171 13~169 P&A 5/26/1975 13,298 13,298 P&A 12/08/1977 lq,117 14,117 P&A 8/12/1978 lh,125 13,151 P&A 7/04/1979 13~238 1~.225 SUSP 7/21/1979 15,07q 13,19q P&A 12/20/1980 13,761 13,2q3 P&A 7/lq/1981 13~587 13~09q P&A 3/17/1981 13,050 13,050 P&A 2/16/1982 14~266 12~928 SUSP 5/06/1982 15,222 ' 13,093 SUSP 6/08/1982 lq,316 13,173 P&A 5/30/1982 16,505 1~,3q0 P&A 8/19/1983 lq~824 1~82~ P&A 8/08/198q 12,800 1~,667 P&A 1/29/199q 12,600 12,562 P&A h/27/199q 12~435 12~q25 SUSP 4/24/1996 19,q00 12,379 SUSP q/02/1999 lq,301 lq,301 P&A 8/13/197q CURRNT DATE OF STATUS CUR STATUS P&A 12/00/19~3 P&A 12/00/1933 P&A 12/00/1933 P&A 12/00/1933 P&A 12/00/1933 EXPIR 7/01/1987 EXPIR 7/01/1987 EXPIR 7/01/1987 EXPIR 7/01/1987 EXPIR 7/01/1987 EXPIR 7/01/1987 EXPIR 7/01/1987 EXPIR 7/01/1987 EXPIR 7/01/1987 P&A 5/01/1973 P&A 11/05/1986 EXPIR 3/11/1982 EXPIR 11/lq/1982 CANC 10/12/1982 P&A 8/28/1988 EXPIR 2/01/1996 tI ALASKA DEPT. OF ENVIRONMENTAL CONSERVATION TRIP REPORT - KATALLA - 5/20/92 Jane Tonkin Bob Behrends and Dixon Sherman of the U.S. Forest Service (Cordova Ranger District) and I flew to Katalla, leaving Cordova airport about 8:45 AM. Weather clear, light wind, about 50 degrees F. Arrived Katalla 9:30 AM, landed on airstrip near old town. Forded Katalla River, crossed wetlands, and walked up USFS road to camp. Welches plan to build bridge over the Katalla River (at least 120' wide) for easier access. Unauthorized pioneer road had been built within last few months across wetlands, USFS road had been cleared and worked over with a cat recently as well. As USFS road use permit had not been finalized (no bond posted), USFS personnel were concerned by premature use, legal action may follow. Arrived Katalla work camp 11:30 AM. One caretaker is on site. Camp drinking water and septic systems non-operational at this time. About 40 large wooden boxes (6'x 6'x 6', est) placed along camp road are labeled' "Black Magic" Ben Gel Caustic Potash, Barite, Lime, and Concrete · , , · Ail boxes are full and in varying stages of decay, apparently have been exposed to weather for several years· No boxes appear to be leaking at this time. (Later at the drilling rig, we found instructions for mixing these materials as part of the drilling process, so perhaps these are drilling mud ingredients?)· An old wooden plank road, built over typar, runs from the camp to the drilling rig area. The drilling rig looks as if someone just turned it off .in the early 80's and walked away - everything is still in place for drilling, now rusted - the Welches have indicated they intend to start up where the process left off. The drill rig itself is located on a wooden platform over standing water (muskeg). No oil noted around drill rig, other than stains of old spills on wood below rig. Only tanks observed that might be used for collected oil were to the west side of the camp, and these tanks would need to be checked carefully as they are rusted and could have questionable integrity. Near drilling rig is an old oil wellhead (a 1908 date is stamped on the metal) that Del Welch has indicated he would like to use as a disposal well (if that's the right term) to pump oil into when he gets the well "currently" being drilled back into production. Some oil residue noted around old well, which could be due either to the presence of the well or an adjacent seep. Vegetation below this old well had a "burned" appearance at leaf ends, almost as if they'd been overfertilized. We found the main oil seeps on a small slope below the drill rig. Ail seeps appear natural. The oil is a fine grade, almost looked like refined motor oil. Oil is bubbling up and pooled in numerous locations down the hillside, ~ freshwater ponds and depressions in ~he ground. I estimate I saw 100- 200 gallons of oil in pools, may be much more soaked into swampy-looking areas. Grass grows well around and even through oil ponds. Back in the woods, I found what may have been additional old well development. While we found no oil or sheen in streams or rivers, it wouldn't be surprising to find oil entering streams if oil built up in this area for a while and then was flushed by a heavy rain event. Piles of partially-buried drums noted near airstrip, ones I inspected appear empty. After takeoff from Katalla, we overflew the proposed deep harbor loading area. Consists of a small spit directly south of the old town of Katalla, appears prone to.weather (no weather breaks between loading site and the Gulf of Alaska). Old railroad trestles are seen on the beach leading to the spit - apparently there was a large dock in the area in the old days, torn out by winter storms. I recently discussed possible oil transportation and loading procedures with Craig Welch, who said they hadn't reached that stage of planning yet. Numerous photos of the area were taken. Returned Katalla airstrip 3:00 PM, returned Cordova 4:30 PM. KATALLA TERTIARY RECOVERY, CORP. P.O. BOX 3836, ANCHORAGE, ALASKA 99510 TELEPHONE (907) 243-3554 October 12, 1982 C. V. Chatterton, Chairman Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Alaska 99501 Re' KTR Corporation Dear Mr. Chatterton' Please be informed that Katalla Tertiary Recovery Corporation has negotiated a revised 'farm out agreement affecting the acreage on which i.t plans to seek application to drill. The change of primary importaoce is the release from the October 1, 1982, spud date, with the obl. igation to drill five holes by July 1, 1983, still prevailing. Thank you for your cooperation and your attention to this mat- ter. SincerelY, W±lliam H. Stevens President cc' Lonnie C. Smith, Commissioner Harry ~'¢. Kugler, Commissioner H. RUSSEL HOLLAND GEORGE TREFRY CHRIS JOhANSEN HSLLANm AlUm TREFRY ATTORNEYS AT LAW 506 WEST SIXTh AVENUE,SUITE 6 ANCHORAGE~ ALASKA 99SOI TELePhone [907] 272-4471 POST OFFICE BOX 2085 ANCHORAGE, ALASKA 995J0 June 22, 1982 C. V. Chatterton, Chairman Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Alaska 99501 Re' Application of Katalla Ter- tiary Recovery Corporation for Special Field Rules .Our File No. 612.5.2 Dear Mr. Chatterton' For purposes of updating your files on the above-referenced matter, we enclose herewith a copy of the amended farm out agreement which was entered into on June 7, 1982, between Bill Stevens and the own- ers of the Katalla property. There are a number of substantive changes in this farm out agreement, including the time before whiCh drilling must be started and the allocation of working inter- ests. As you will also note, the farm out agreement has now been structured in such a fashion that the ground which is to be de- veloped initially will coincide exactly with the Commission's spac- ing order. Sinc. erely yours, /____. ...... H. Russel Holland HRH/ms --,~-~ encl. cc' KTR Corporation RECEIVED JUN 2 1982 Alaska Oil & Gas Cons. Commission Anchorage ! AMENDED FARM OUT AGREEMENT THIS AGREEMENT is made and entered into on the ~ day of~..,.~t.!/ .... ~- ' , 1982, between TEXAS & DELAWARE CORPORATION, -' ~ a Texas ~orporation, ("TDC"), with offices at 10830 Northcentral Expressway, Suite 1'75, Dallas, Texas 75231, and TMT CORPORATION, a Colorado corporation, ("TMT"), with offices at 7006 South Alton Way, Building A, Englewood, Colorado 80112, (TDC and TMT being re- ferred to collectively herein as "Farmors") and WILLIAbl H. STEVENS, whose address is 4708 Malibou, Anchorage, Alaska 99S03, (herein re- ferred to as "STEVENS"). Farmors and STEVENS are sometimes herein referred to collectively as the "Parties". This Agreement reflects the assignment of the original Farm Out Agreement of June 3, 1981, between Farmors and C. E. Sauve to STEVENS, which assignment was executed on September 3, 1981, in accordance with the original Farm Out Agreement. This Agreement further reflects the postponement of certain drill.ing dates provided in the original Farm Out Agreement as well as cer- tain substantive changes in the original Fa'tm Out Agreement which have been negotiated between Farmors and Stevens. The following is the entirety of the Agreement between the Parties and shall be deemed fully substituted in place of the original .Farm Out Agreement of June 3, 1981. Article I Subject Property TMT and TDC represent, but do not warrant, that each is the owner of an undivided fifty per cent (S0%) interest in and to the oil and gas that may be'produced, saved, and marketed from the following described properties' -1- JUIV 1982 Alaska 011 & ~as Cons. Com~isslon Anchorage Tract One Oil Claim No. 1, described in patent dated the 3rd day of June, 1909., from the United States of America to the Alaska De- velopment Company, and recorded ~iay 30, 1913, in Book 3 of Deeds, page 439, Cordova Recording Precinct (formerly Kayak Recording Precinct), and containing 151.17 acres of land,-more or less ("Oil Claim No. 1"); and Tract Two Redwood Oil Claims Nos. 11 and 12, as' described in patent dated the 21st day of July, 1924, from the United States of America to Chilkat Oil Company and record- ed September 30, 1924, in Book 3 of Deeds, page 595, Cordova Recording Precinct (for- merly Kayak Recording Precinct) and con- taining 314.829 acres of land, more or less ("Redwood Claims Nos. 11 and 12"); (the "Subject Property"), subject to the following: (1) an oil payment in favor of Standard Oil of California ("Standard") in the amount of $500,000.00, 'which-amount is payable out of seven and a half per cent (7.5%) of the proceeds derived from the gross oil and/or gas production from or allocated to the Subject Property from any-and all wel.ls drilled on the Subject Property (the "Stand- ard Oil Payment"); and (2) all rights retained by Standard in a deed dated June 28, 1973, from Standard to Arabian Shield Develo.p- ment Company. Article II .Earning Rights By the drilling of ten (10) shallow wells in accordance h'erewi-th, STEVENS shall have earned and shall be entitled to an as- signment of the rights as herein provided as to the entirety of the Subject.Property. A. First Ten Wells on 90 Acres. By drilling ten (10) "Shallow Wells" '(as and where defined in Paragraph III.A of this Agreement) pursuant to Paragraph III of this Agreement, STEVENS shall earn and shall be entitled to receive an assignment, without warranty of title, express or implied, from Farmors of a one hun- dred per cent (100%) working interest in all of the oil and/or gas that may be produced, saved, and marketed from the old Katalla Oil- field (90 acres to be described as hereinafter provided) down to a depth as follows' (1) from the surface of the earth down to 100 feet below the stratigraphic equi- valent of the 'greatest depth drilled with respeCt to acreage to be included in said 90 acres, but not to exceed 1,800 feet; or (2) from the surface of the earth down to 100 feet below the bottom of the pro- ducing horizon with respect to said 90 acres, but not to exceed 1,800 feet. B. Obligations as to First Ten Wells. The interest earned a~d to he assigned to STEVENS as to said 90 acres shall be subject to the following' (1) the overriding royalty of C. E. Sauve equal to two and a ]~alf per c~nt (2.5%) of eight-eighths (8/8ths) of the gross oil and/or gas that may be produced, saved, and marketed from the said 90 acres, free and clear of all costs of drilling, completing, equipping, and operating all oil and/or gas wells that may be drilled on the said 90 acres pursuant to this Agreement. The said overriding royalty was originally re- served in favor of Farmors and was duly assigned by-Farmors to C. E. Sauve by assignment dated June 30, 1981. (2) the Standard Oil Payment described in · Paragraph I of this Agreement in the amount of $500,000.00 payable out of seven and a half per cent (7.5%) of eight-eighths (8/8ths) of the gross oil and/or gas that may.be produced, saved, and marketed from the said 90 acres, free and clear of all costs of drilling, completion, equipPing and operating all °il and/or gas wells that may be drilled on the Subject Property pursuant to this Agreement; (3) the reservation, in favor of Farmors, in equal shares, .of an oil payment equal to ~t~enty-five per cent (25%~) of ninety-two and a half per cent (92.5%) of the gross oil and/or gas that may be' produced, saved, and marketed from the said 90 .acres, free and clea~r of all costs of drilling, completion, equipping, and op- erating all oil and/or gas-wells that may. be drilled on the Subject Property pursuant to this Agreement until the . Standard Oil Payment is liquidated, after which this reserved oil~payment shall be twenty-five per cent (25%) of eight- eighths (8/Sths) of such production. -4- C. Additional Shallow Wells on 90 Acres. If addition- al shallow wells are drilled on the 90 acres ident'ified pursuant to Paragraph III.A, the production from such additional wells on said 90 acres, if any, shall be sub'ject to the payments specified in Par- agraph II.B(1) throUgh II.B(3). D. Interest Earned and Obligations Outside the 90 Acres. By drilling ten (10) shallow wells within the 90 acres, as hereina- bove specified, STEVENS shall earn and shall be entitled to receive an assignment, without warranty of title, express or implied, from Farmors of a fifty per cent (50%) working interest in all of the oil and/or gas that may be produced, saved, and marketed from the entirety Of the Subject Property outside the said 90 acres down to a depth as follows' (1) from the surface of the earth down to 100 feet below the stratigraphic equi- valent of the greatest depth drilled with respect to acreage to be included - in said 90 acres, but not to exceed 1,800 feet; or (2) from the surface of the earth dOwn to 100 feet below the bottom of the pro- ducing horizon with respect to said 90 acre's, but not to exceed 1,800 feet. The interest earned and to be assigned to STEVENS as to the entirety of the subject property ~outside said 90 acres shall be subject to the following' (1) its proportionate part of the overrid- ing royalty of C. E. Sauve equal to two and a half per cent (2.5%) of eight-eighths (8/8ths) of the gross -5- oil and/or gas that may be produced, salved, and marketed from the Subject Property outside said 90 acres, free and clear of all costs of drilling, completion, equipping, and operating all oil and/or gas wells that may be drilled on the Subject Property out- side said 90 acres pursuant to this Agreement; (2) its proportionate part of the Stand- ard Oil Payment described in Article I of this Agreement in tke amount of $500,000.00, payable out of seven and a half per cent (7.5%) of eight- eighths (8/Sths) of the gross oil and/or gas that may be produced, saved, and marketed from the Subject. Property outside said 90 acres, free and clear of all costs of drilling, completion, equipping, and operating all oil and/or gas wells that may be drilled on the Subject Property out- side said 90 acres pursuant to this Article III Agreement. E.arning Obligations~-'~ A. Initial Wells. On or before J~ 1, 1982, STEVENS shall commence or cause to be commenced the actual drilling of ten (10) shallow wells provided for in Paragraph II of this Agreement, at a location and/or locations to be agreed upon by the Parties, -6- all'of which shall be within the old Katalla Oilfield located up- on Oil Claim No. 1 and further located within 90 acres within said Oil Claim No. 1, which acreage shall be agreed upon by the Parties and located by metes and bounds or other appropriate description which shall be made an addendum to this Amended Farm Out Agreement. STEVENS shall thereafter prosecute the drilling of the shallow wells ~diligently, without unnecessary delay, and in good and workmanlike manner to the depths hereinafter specified in this Paragraph III.A. For the purposes of this Agreement, a "Shallow ~Tell" is one that shall be drilled to any producing horizon between the' surface of the earth and 1,800 feet below the surface of the earth. Alt of the ten (10) Shallow Wells must be completed as commercial producers of oil and/or gas or plugged and abandoned as dry holes, as the case may be~_w~in a period of eighteen (18) mo'nths from and after ' 1,~19'82, or from and after the date of commencement of actual drilling of the first Shallow Well, whichev- er is so~ner. The first five (5) of the ten (10) Shallow Wells, however, must be completed either as commercial producers of oil and/or gas or plugged and abandoned as dry holes, as the case may be, within a 'period of ~ine (9) months from and after July 1, 1982, or fr'om and after the date of commencement of the first Shallow Nell, whichever is the S~oner. B. Costs of Initial Wells. STEVENS or his assignees shall bear all of the costs of drilling, testing, reworking, deep- ening, plugging back, or completing and equipping (including, with- out limitation, the actual costs of'gathering lines and tankage within the field, and/or other necessary production facilities), and operating costs on the ten (10) Shallow Wells that are to be drilled pursuant to Paragraph III.A of this Agreement. C. Failure to Drill. The only consequence of STEVENS' failure to drill the ten (10) Shallow Wells as provided for in this Article III'.shall be the automatic termination of this Agreement in its entirety. There shall be no other penalties of ~any kind or character. Article IV Assignment Upon completion of the obligation wells as provided for in Article II of this Agreement, and drilled pursuant to the terms set out in Article III of~ this Agreement, and provided that the well or wells have been drilled in accordance with all of the terms and conditions of~ this Agreement, Farmors shall furnish to STEVENS ~and his successors in interest, Upon STEVENS' written request, an as- signment (without warranty of title, expressed or implied) on a form to be approved by Farmors' attorneys, o~ the interest earned by STEVENS, to wit: a one hundred per cent (100%) working interest in the 90 acres identified pursuant to Paragraph III.A, and a fifty per cent's(50%) working ~interest in the Subject Property outside the said 90 acres, subject to. the obligations described in Article II of this Agreement. There shall be no merger between the terms of the Assignment and this Agreement, and this Agreement shall survive execution and delivery of all Assignments to be made pursuant to this Agreement. STEVENS' request for an assignment must be made within thirty (30) days from and after the completion of the ten (10) Shal- · low Wells drilled Pursuant to Article II of this Agreement. If such written request is not made timely, STEVENS shall relinquish to Farmors any and all rights and interest that STEVENS may have earned under the terms of this Agreement in the Subject Property and this Agreement shall terminate. -8- Article V Subsequent Operations A. Operating Agreement. If and when an Assignment to STEVENS is made pursuant to Paragraph IV and/or V.B of this Agree- ment, and if operations are to be undertaken as to which Farmors retain a working interest in the Subject Property, an operating agreement shall be entered into by and between STEVENS, as opera- tor, and Farmors, as non-operators,~said operating agreement to be in a form substantially similar to the A.A.P.L. Form 610, Model Op- erating Agreement--1977 and COPAS Accounting Procedure for Joint Operations as Recommended by the Council of Petroleum Accountants Societies of North America (suggested sample copies here attached a's "Exhibit B" and "Exhibit C", respectively), and said operating agreement a~d accounting procedure for joint operations, after all det~ailed items thereof have been mutually agreed to by and between operator and non-operators, shall then become effective. It is contemplated by' the parties to this Agreement that the detailed terms of~the operating agreement and the joint operating procedure shall be satisfactory to both non-operators and operator and based upon the present prevailing standards in use in the~industry at this time. STEVENS, as operator, shall conduct any drilling oper- ations undertaken on the Subject Property, but may do so through a corporation controlled by him. In the~event of any conflict or inconsistency between the terms of the hereinabove referred to op- erating .agreement and this Agreement, this Agreement shall control. B. Optional' Deep Well.. Within one (1) year from and after the completion of the ten (10) Shallow Wells (drilled in ac- cordance with and pursuant to Article III of this Agreement) as productive of oil and/or gas or plugged and abandoned as dry holes, as the case may be, STEVENS shall ~ave the option to drill and com- -9- 'JUN 2 ]982 41aska 011 & Oas Cons. Ancfiorage C°rnr~iasio~ plete a Deep Well to a depth sufficient to properly test and pene- trate the geological ~formation known as the "Split Creek Sandstone Formation", or to a total depth of 6,000 feet below the surface of the earth, whichever is the lesser depth. If STEVENS elects, with- in the time herein specified, to drill said Deep Well, he shall bear all of the costs of said well incurred into the tanks, carry- ing TDC and-TMT free and clear of any and all costs thereof into the tanks, if commercially productive, or through plugging and aban- donment if a dry hOle. In the event STEVENS elects to drill the Deep ~ell and drills the same in a'ccordance with the terms of this paragraph, then STEVENS shall be entitled to receive an assignment from Farm- ors of an undivided fifty per cent (50%) working interest in all of the oil and/or gas that may be produced, saved, and marketed from the Subject Property below 1,800 feet and down to a depth of 1~00 feet below the bottom of the producing horizon, or, if a dry hole, from 1,800 feet below the surface of the earth down to 100 feet below the stratigraphic equivalent of the greatest depth drilled. The interest hereby earned and to be assigned to STEVENS shall be subject to the following: (1) its proportionate part of the overrid- ing royalty of C. E. Sauve equal to two and a half per cent (2.5%) of eight-eighths (8/Sths) of the gross oil and/or gas that may be produced, saved, and marketed from the Subject Property outside said 90 acres, free and clear of all costs of drilling, completion, equipping, and operating all oil and/or gas wells that may be drilled on the Subject Property out- side said 90 acres pursuant to this Agreement; (2) its proportionate part of the stand- ard Oil PaYment described in Article I of this Agreement in the amount of $500,000.00, payable out of seven and a half per cent (7.5%) of eight- eighths (8/Sths) of the gross oil and/or gas that may be produced, saved, and marketed· from the Subject Property oUtside said 90 acres, free' and clear of all 'costs of drilling, completion, equipping, and operating all oil and/or gas wells that may be drilled on the Subject Property out- Side said 90 acres pursuant to-this - Agreement. Article VI Conduct of Operations A. Stevens shall properly tes-t, to Farmors' satisfac- tion, all formations, sections, Zones, or other reservoirs in which, in the opinion of F.armors, the.presence of oil and/or gas is indicated. B. Farmors' representatives shall-have full access to the Subject property and to the derrick floor of all wells at all times and~shall have access to and be furnished with all informa- tion on drilling progress. -11- C. Prior to the commencement of any well, STEVENS shall coordinate the drilling, coring, testing, and logging pro- gram for that well'with Farmors. D. STEVENS shall notify Farmors~' representative, at least twenty-four (24) hours in advance, o.f the running of all logs, the testing and coring of all formations, the drilling into known or expected producing horizons, and the drilling through an unexpected showing of oil or gas so that Farmors' representatives may be present to witness such operations. E. STEVENS shall complY with all of the geological requirements of Standard, which requirements are set forth in Ex- hibit A, attached to and by this reference incorporated into this Agreement. Farmors shall have the same rights as Standard pursu- ant to Exhibit A, and-all references in Exhibit A to Standard shall~ be deemed to be references also to Farmors. F. In the event a well is completed as non-productive of oil or gas, or as not capable of producing oil or gas in pay- ing quantities, STEVENS shall plug and abandon that well, but not until Farmors, if they or either of them elect, have had a reason- able opportunity to run a velocity survey to the bottom of the hole, at its or their sole expense, and to take over that' well pursuant to Article VIII of this Agreement. Notification of plug- ging and abandonment shall be given to Farmors at least seventy- two (72) hours (exclusive of Saturdays, Sundays, and holidays) prior to commencement of the plugging and abandonment. G. In the event STEVENS plugs and abandons any well to be drilled under the terms of this Agreement, STEVENS shall do so in accordance with all laws, rules, and regulations established by the State of Alaska and the United States. Ail abandonment proce- dures will be in accordance with acceptable industry standards -12- prevailing at the time, or if there are no applicable abandonment rules or regulations applicable at the time, then STEVENS shall pay for al~ damage, if any, to the surface that may result from STEVENS' dril-ling operations. H. STEVENS shall conduct all operations under this Agreement in a proper and workmanlike manner and in. accordance with all applicable laws and regulations of the State of Alaska and of the United States. STEVENS shall indemnify Farmors, and each of them, from any and all risk, liability, expense, and claim of every kind and character that might arise out of or incident to STEVENS' operations under this Agreement. I. STEVENS shall procure and furnish to Farmors copies of Workmen's Compensation, Comprehensive General Liability, and Comprehensive Automobile Public Liability, Employer's Liability In- surance coverage in amounts determined to be sufficient by Farmors. Ail insurance obtained by STEVENS pursuant to~ this Paragraph VI.I shall name Farmors as additional insureds and shall require fif- teen (15~ days' advance notice to Farmors in the event of any ma- terial change or of cancellation in the coverage. Article VII Payments Farmors shall continue to pay any and all shut-down hy- drocarbon royalty payments and similar payments that may be required to maintain the Subject Property in force and effect and shall fur- nish STEVENS with statements for such payments. STEVENS, promptly upon receipt of such statements, shall reimburse Farmors for all such payments. Farmors shall not be held liable in damages for failure to properly make such payments if such failure were the result of ~a mistake, clerical error, or oversight. There are no such payments known to Farmors to be an obligation in conjunction with the Subject Property. In conSideration of the terms and conditions of this Amended Farm Out Agreement, Stevens shall pay the sum of Sixty Thousand Dollars ($60,000.00) to Farmors--Thirty Thousand Dollars ($30,000.00) to TDC and Thirty Thousand Dollars ($30,000.00) to TMT. Such payment shall be due and payable' in full no later than the date upon which the first shallow well is spudded. ally.] [The balance of this page has been left blank intention- APPROVED' -13-A- Article VIII Take-Over of Wells Prior to STEVENS' plugging or abandoning any'of the wells to be drilled pursuant to Articles III or V of this Agreement, STEVENS shall notify Farmors of his intention to do so. Farmors shall have seventy-two (72) hours (exclusive of Saturdays, Sundays, and holidays) after receipt of such notice to determine whether they or either of them desire to take over the well or wells that are proposed to be abandoned. In the event Farmors elect to take over any well, the Farmors shall pay STEVENS. the reasonable salvage value of any and all salvageable matieral and equipment (except surface casing in place), less the reasonable cost of salvaging said equipment then existing in the well or wells or upon the drill site. STEVENS shall relinquish and assign to the Farmors any and all rights,.titles, and interests to which STEVENS may be entitled in the well and drill site under the terms of this Agreement. Ail operations on any such wells from and after the date of take-over by Farmo~s shall be at Farmors' sole cost, risk, and expense. Article IX Relationship of Parties Farmors shall-have no control over the operations to be conducted by STEVENS pursuant to this Agreement. Those operations are to be conducted at STEVENS' sole risk, and the expense of those operations shall be borne as provided in this Agreement. None of those operations shall be considered as joint operations, it being expressly understood that this Agreement does not consti- tute or provide for any type of partnership or joint venture as between the Parties. -14- Article X Notices · A. Ail notices and other inform'ation required under the terms of this Agreement to be furnished to Farmors' representatives shall be furnished to the following' to TDC's Representatives' to TMT's RePresentatives' JACK'A. CRICHTON (or) CLYDE C. HARTER 10830 Northcentral Ex- pressway, Suite 175; Dallas, Texas 75251 (214) 692-?872 RAYMOND M. THOMPSON 7006 South Alton Way, Building A; Englewood, Colorado 80112 (303) 773-'6990 JACK CRICHTON and ?~YMOND M. THOMPSON are appointed the representatives of TDC and TMT, respectively. TDC and TMT reserve the right to replace their representatives and, upon exercise of that right, shall furnish STEVENS with the name, address, and tele- phone number~of the new representative. B. Ail notices and other information required under the terms of this Agreement to be furnished to STEVENS shall be fur- nished to him as follows' WILLIAM H. STEVENS 4708 Malibou AnChorage, Alaska 99503 (907) 243-3554 C. Ail notices and correspondence required or permitted under this Agreement, except that required by Article VI of this Agreement, shall be deemed to have ~been properly, given when depos- ited in the United States mail, postage affixed, and addressed to the Party to whom the notice is directed at the address for that Party set forth in the first paragraph of this Agreement. A Party may change his or its address for purposes of receiving notice by giving notice of ch'ange of address to the other Parties in accord- ance with Paragraph X.A or X.B, as indicated. Article XI Assignment This Agreement shall not be. assigned in whole or in part by STEVENS without the prior written consent of Farmors, except to a corporation controlled by STEVENS (Katalla Tertiary Recovery Corp., "KTR"). F~armors understand that STEVENS (or KTR) intends 'to assign the working interest as to the said 90 acres identified pursuant to Paragr~aph III.A and to be earned by drilling the said ten (10)-shallow wells to a limited partnership formed to finance such drilling and development of the said 90 acres on the condition that any such assignee must engage STEVENS and/or KTR to conduct the drilling operations upon said 90 acres. Such assignment is ap- proved bp Farmors. Article XII Lesser Interest Clause In the event that Farmors own less than an undivided one hundred per cent (100%) interest in the Subject Property, then the rights earned by STEVENS, the overriding royalty reserved to Farm- ors and assigned to Sauve, and the Parties' respective shares of gross production of oil and/or gas shall'be reduced in the propor- tion that the Farmors' actual interest bears to the entire undivid- ed one hundred per cent (100%) interest in the Subject Property. -16- Article XIII General A. Time is of the essence in fulfilling the terms and provisions of this Agreement. B. No agent or representative of any Party has the au- thority to make, and the Parties hereto shall not be bound by, any statement, representation, promise, or agreement not specifically set forth or referred to in this Agreement. No changes, amend- ments, or modifications of this Agreement shall be valid unless re- duced to writing and signed by the Parties and attached to this Agreement as an addendum hereto. C. Nothing in' this Agreement shall be construed so as to be in violation of applicable state and/or federal regulations. D. This Agreement shall be binding upon and shall in- ure to the benefit of the Parties hereto and to their respective heirs, devisees, successors, legal representatives, .and assigns. EXECUTED as of the date first above written.. TEXAS & DELAWARE CORPORATION (Farmor) TMT CORPORATION (Farmor) . President ATTEST. , / // -~ 4,/ /' , ,? ?. ,~..,; ~ .!_ . , J.?.;'? '..~,...-"~ ~-2..(..,'T.-.~ Secretary.. /Z.~.~_.~'~TL'~..,.~(~ WITNESS: ~/! / .... "" I WILLIAM H. STEVENS -17 - RECEIVED JUN 2 1982 Alaska Oil & Gaa THIS IS TO CERTIFY that on this ~4~[day of 1982, before me, the undersigned authority, personally F~pp~are~ JAqK A. ~RI~HTON, to me known and known to me to be the /~/~z~.~~..~ of TEXAS & DELAWARE CORPORATION, the corporation n~med in-th'~ within and foregoing AMENDED FAPu~I OUT AGREEMENT; and he acknoWledged to me that he had in his official capacity afore- said executed said instrument as the free-act and deed of said corporation for the uses and purposes therein set forth, having full power and authority so to do. WITNESS my hand and official seal the day and year in this certificate first above written. . / /~ My Commission Expires'~/~/~.~ STATE OF COLORADO ) ) SS. COUNTY OF THIS IS TO CERTIFY that on this [{ day of ~'~)o~ , 1982, before me, the undersigned authority, personally aPpeared p~YMOND M. THOMPSON, to me known and known to me to be'the r].;~.7.c~.~j~'.~}c?~c-& of TMT CORPO~TION, the corporation named ih the Within and foregoing ~ENDED FA~ OUT AGREEMENT; and he acknowl- edged to me that he had in his official capacity aforesaid execut- ed said instrument as the free act and deed of said corporation for the uses and purposes therein set forth, having full power and authority so to do. WITNESS my hand and official seal the day and year in this certificate first above written. . ~ ~-, ~ Notary Public My Commission Expives'~-~.~/-(~,~ STATE OF ALASKA ) ) SS. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this Pu~bl day of ~ 19-82, before me, the undersigne'd, a Notary' ic in an~Jfor th'e State of Alaska, duly commissioned and sworn as such, personally appeared WILLIAM H. STEVENS, to me known and known to me to be the individual named in and who executed the within and foregoing AMENDED FARM OUT AGREEMENT; and he acknowledged to me that he ex- ecuted said instrument freely and voluntarily, with full knowl- edge of its contents, for the uses and purposes therein set forth. WITNESS my hand and official seal the day and('yea~'}in this certificate first above wrilz.-t~n./ ~.. / .~u Notary PublLc~~~ .~ska JU~]~82 ~.Iy Commission Expires:,.~/'l~/~A .... ..... Anchorage - 18 - d I-o' ~f~ ' R4E 0 R5E RGE KATALLA OIL, FIELD 113 /I'll we/Is/ Katollo hQm PANOI L d KATdU. LA ~T.-I STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OFOIL AND GAS ANCHORAGE, ALASKA KATALLA FIELD SCALE I'. - 54- RTE BERING RI~/, UNIT NO, I T 16 S r 'T Katalla Field Katalla Undefined Oil Pool Gulf of Alaska Various Operators Location Sec. 36, T19 & 20S, R5 & 6E, Copper River Meridian Dis COvlery Well Alaska Development Co. No. 1 Di~scovery Date 1902 Deepest Test Chilkat Oil Company No. 24 - 2350' Producin9 Formation Katalla 550-2350 Oi 1 Pool Katalla Undefined Type Wel 1 Oil Producer Method of Operation Abandoned Reservoir Data Oil Gravity - Degrees API Othe'r Data No. of Wells Approximately 32 in 1934 41-45 NA Production Data 'The Katalla Field produced 154,000 barrels from 18 of the 30 some odd wells spudded from 1902 through 1930. A small refinery was built in 1911 and placed in operation in 1912. The refinery was partially destroyed by a fire in 1933 and the wells never produced after that date. See page '8 for yearly production from 1902 through 1933 as estimated by the U.S. Geological Survey. 10 11 13 14 15 16 17 18 lg 20 21 22 23 ALASKA OIL AND GAS CONSERVATION COMMISSION Request for Acception: 20AAC 25.055 BY: KATELLA TERTIARY RECOVERY CORPORATION Borough Assembly Chambers 3500 Tudor Road Anchorage, Alaska 810 N STREET, SuITE 101 277.O572-277-O573 April 7, 1982 9:00 o'clock a.m. R & R COURT REPORTERS 509w. 3RD AVENUE 277-8~43 007 W. 3RD AVENUE 272-7515 10 l! 12 14 16 17 18 19 2O 21 22 23 24 25 P R O C E E D I N G S MR. CHATTERTON: Ladies and gentlemen, we will bring these proceedings to order and so we can get on with the business before us. First of all, I'd like to introduce the people that you see before you up here. To my immediate right is Commissioner Lonnie Smith; to my immediate left is Commissioner Harry Kugler; to my far left is our Court Reporter and her name is Candy Dubois; and to my far right is, from the AG's office, Ann Precyna and I'm Chat Chatterton and will be conducting the proceedings. This is a hearing. This is a hearing that will be conducted and under Title 20 of the AlaSka Administrative Code, Chapter 25, Section' 540, particular A and B of that. I would, like to make you all aware of roughly what this regulation says, as ~far as this hearing is concerned. It, in effect, will ask for all persons that are wishing to testify will be sworn in. Each witness shall state his or her name for the record and who they represent. The applicant will be asked first to -- asked first to present his testimony in this hearing and any person wishing to make an oral statement may do so at the conclusion of the formal testimony. And any person wishing to make a written statement will be permitted to do so after the conclusion of any oral questions. I would point out that members of the audience are not permitted, in any way, shaPe or form, to cross-examine any of the witnesses. We d° have -- I may have 810 N STREET, SUiTE ~01 277~O572-277-O~73 R & R COURT REPORTERS ~O9 W, 3RD AVENUE 277-8~43 ANCHO~AGE,~{.ASKA 99~O1 1OO7 W, 3RD AVENUE 272-7515 10 13 14 15 17 18 19 20 21 22 23 put it in an unhandy place -- a tablet with a pen, right up there that if you have questions that you would like to be asked, you may write those out; you may give them to Harry Kugler here and after our screening of~ them, while we will consider asking those questions for you. But there will be no interplay between the audience and any of the people testifying. So staying with this, we will now officially open the hearing and I will.ask Commissioner Kugler to read -- state the purpose and the timing and notice and so forth for the record. MR. KUGLER: This concerns the application of Katella Tertiary Recovery Corporation, dated March 2nd, 1980, requesting an acception to 20AAC 25.055, the state-wide well spacing regulation and the adoption of field rules for the drilling of oils in the abandoned Katella Oil Field. This was advertised in the Anchorage Times on March the 19th, 1982. MR. CHATTERTON: Very fine, thank you. Mr. Holland, do you wish to' proceed? MR. HOLLAND: Yes, sir, I do. Thank you. If it please the Commission, we have presented in advance, this morning, a set of questions and'answers that I will be asking to our two witnesses, Mr. Stevens and Mr. Goff. At this time, I would call Mr. William Stevens, ask that he be sworn and we wil.l' read the prepared testimony into the record. MR. CHATTERTON: Okay. 810 N STREET. SUITE ~01 277-0572-277-O573 R & R COURT REPORTERS ~O9 W. 3RD AVENUE 277-8~43 ANCHORAGE. ALASKA 99~O1 1OO7 W. 3RD AVENUE 272-7535 10 11 13 14 15 16 17 18 19 20 21 22 23 24 25 to testify also? MR. KUGLER: Mr. Holland, is Mr. Goff going MR. HOLLAND: Yes, sir. MR. KUGLER: Ail right, could we swear them both at the same time? MR. HOLLAND: Please'do, sir. MR. KUGLER: Okay. MR. CHATTERTON: Would you step forward, gentlemen? Harry? MR. KUGLER: Would you raise your right hand? In the matter now at hand, do you solemnly swear to tell the truth, the whole truth and nothing but the truth so help you God? MR. GOFF: I do. MR. STEVENS: I do. MR. CHATTERTON: Thank you. WILLIAM STEVENS testifies as follows on: BY MR. HOLLAND: A DIRECT EXAMINATION Please state your name, address and the party for whom you are testifying in these proceedings? My name is William H. Stevens. I reside at 4708 Malibu, in Anchorage, Alaska. I'm appearing here today for Katella Tertiary Recovery Corporation. 810 N STREET. SUITE 101 277-O572-277'O573 R & R COURt REPORTERS 509 W. 3RD AVENUE 277-8543 ANCHORAGE,~LASKA 99501 1OO7 W. 3RD AVENUE 272-7515 10 11 12 13 14 15 17 18 19 20 21 22 24 -5- Please give the Commission a brief resume of your back- ground as it relates to the oil industry in the state of Alaska and elsewhere? I've been employed in the oil field service industry for 20 years, 15 of them in Alaska. My primary field and area of interest is drilling fluids and formation evaluation. I'm currently employed in this area by a major drilling fluid supplier, which in a service company capacity, has been active in the exploration for oil on the North Slope and the development of the Prudhoe Bay Oil Field. More generally, between 1961 and 1963, I worked on seismic crews in Texas,.Mississippi, Louisiana, Oklahoma and six other states. I worked as a mud logger for Baroid between 1964 and 1966. I came to Alaska in 1967, working in the Alaska bush as a mud logger until 1974. During that time, I probably analyzed and evaluated more subsurface than anyone else performing similar work in Alaska. In my present work, I write drilling fluid programs which are employed by major oil companies operating'in Alaska. I've attended 12 technical and management schools over the last eight years, including a drilling fluid sales and engineering program, lasting ten. weeks and a drilling engineering school lasting seven'weeks. R & R COURT REPORTERS 810 N S:FREEt. SUITE 101 '' 509 W. 3RD AVENUE 277-0572 - 277-O573 277-8543 1007 W, 3RD AVENUE 272-7515 1 Q 2 3 4 A 5 6 7 8 9 Q 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 What is your relationship to the applicant here, Katella Tertiary Recovery Corporation, which with your permission I will refer to as KTR? I'm the founder of KTR. I'm currently the president and sole stockholder of the company. I propose to operate the Katella field through this business and legal entity which was incorporated last years -- last year under the laws of the State of Alaska. Are there any other persons'who you have presently identified who will be active in the operation of KTR with you? Mr. Kelly Goff, who will also testify here today, will be involved in this project. Mr. Goff has extensive experience, both in Alaska and Outside, as a drilling supervisor. Mr. Goff will be describing our proposed equipment and casing program for the Commission. Please tell the Commission how you became interested in the Katella field and what your present relationship is to the owners of the field? ACtually, I became interested in the Katella field by coincidence. I had read extensively abOUt the areas of Alaska such as Katella which seem to have potential for producing oil. I mentioned this interest to a local acquaintance of mine, who as it developed, not only had a close relationship with the owners of the Katella field 810 N STREET, SUiTE 101 277-0572-277-0573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 1007 W. 3RD AVENUE 272-75i5 10 16 17 18 20 28 but who also informed me that the property might be available for further development. To make a long story short, my informant, Mr. C.E. Sauve of Anchorage, negotiated a farm out agreement for the Katella field from it's present owners, Texas-Delaware Corporation of Dallas, Texas, and TMT Corporation of Englewood, Colorado I've taken an assignment of that farm out agreement and have had ongoing negotiations relative to it with representatives of the land owners. The farm out agreement is a rather typical one, pursuant to which the operator will earn a working interest in the property by drilling wells. In this instance, the agreement calls for the drilling of ten shallow wells, intended to tap'the original Katella field. Can you please give the Commission a brief history of the ownership of the Katel.la field? The Katella field is, as I will describe in greater detail below, located upon property known as Oil Claim Number One, which was originally patented in 1909 by the United States' government to Alaska Develop- -- Development Company. While the early records are both hard to find and difficult to work with, it appears that the claim, early on, came to be owned by Chilkat Oil Company, which as discussed below, operated the property from some time, having acquired the same from St. Elias 810 N STREET, SUITE 101 277-0572-277-0573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 ANCHORAGE, ALASKA 99~O1 1007 W, 3RD AVENUE 272-7515 10 12 13 14 15 17 18 19 20 22 23 24 A Oil Company in 1919. After the refinery, which Chilkat had operated near Katella, Alaska, burned, the property was not further produced. And in 1937, Chilkat Oil Company conveyed the Katella field property to Standard Oil Company of California. By various intervening conveyances of title, Texas & Delaware Corporate and TN- -- TMT Incorporated came to own the entire property as tenants in common. In the course of your investigation of the Katella property, have you learned anything about the ownership of the property surrounding the Katella field? I've ascertained, as a result of discussions with representatives of the Chugach National Forest, that Oil Claim Number One is, for all practical purposes, totally surrounded by Chugach National Forest and there- fore, the land surrounding the Katella field is owned by the United States' government. I've also been informed by counsel that there is a possibility that the State of Alaska may own the bed to the Katella slew, which is adjacent to the oil claim -- to Oil Claim Number One and, indeed, used -- used to encroach upon the property prior to the 1964 earthquake. Also, counsel has informed me, that Chugach Natives IncOrporated have unsettled native claims in the surround area. 810 n STREET. SUITE 101 277-O572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 ANCHORAGE, ALASKA 99~O1 1OO7 W. 3RD AVENUE 272-7515 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Turning to the subject of the Katella field itself, is there located on Oil C'laim Number One, a proven oil field? And if your answer' is in the affirmative, please state the basis for so testifying. The existence of a proven oil pool on Oil Claim Number One is documented, although the same is not, I am informed not officially been recognized by the State Oil and Gas Conservation Commission. One of the best all-round descriptions of the Katella field is'contained in a Bureau of Mines report of investigations entitled, Oil and Gas Seeps in Alaska, Northcentral Gulf of Alaska, prepared under the auspices of the United States' Department of the Interior by Donald P. Blasko, a petroleum engineer in 1976. I've submitted, with my prepared testimony for the Commission's review, a copy of the first 12 pages of Mr. Blasko's monogram. Beginning at page four, there are -- there is'a detailed description of the Katella field, which includes a descriptive table of the wells drilled in the Katella vicinity between 1901 and 1931. Table I is divided between wells drilled in the Katella field and others in the general vicinity. All of the producing wells were on Oil Claim Number One. Table II, which appears at page nine of this subject report, is a compilation of the productions figures for 810 N STREET. SUITE 277-O572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 ANCHORAGE.~LASKA 99501 1OO7 W, 3RD AVENUE 272-7515 ,( 10 11 lg 13 14 16 17 18 19 gO gl 24 A the Katella field, based upon information located by Mr. Blasko in the archives of the Bureau of Mines. Table II indicates that in the 21 years, between 1912 and 1933, the Katella field produced approximately 150 thousand barrels of oil. As a result of declining production and a fire which destroyed the Chilkat Refinery, the field was abandoned in 1933 and has not been produced, to our knowledge, since that time. How do we know that the Katella field is located within the confines of Oil Claim Number One? Naturally, no one can be 100% Certain that wells drilled off of Oil Claim Number One would fail to encounter producible hydrocarbons. The question which must be answered is.whether or not there is communication between oil which might be found somewhere off Oil Claim Number One and what we are referring to as the Katella field. I believe there is persuasive evidence that the Producing area, which I refer to as the Katella field, is -- is confined to the boundaries of Oil Claim Number one. Firstly, the data assembled by Mr. Blasko and reported in his Table Number I referenced above, indicate that all of the wells drilled in the surrounding area were plugged and abandoned. Second, all of the other literatu~ with which I am familiar indicates that the only producing wells in the vicinity were located on Oil 810 N STREET. SUITe 101 277-O572-277-O573 R & R COURT REPORTERS 509 W, 3RD AVENUE 1007 W. 3RD AVENUE 277-8543 272-751~ 16 17 18 Claim Number One. Thirdly, we can also deduce from facts which are known, that had wells in the surrounding area been capable of producing, they would have been Produced. With a refinery and an apparent demand for gasoline and related products in the Cordova area and considering the production from the subject property was decreasing in the late 1920's and early '30's, it is highly improbable, had there been any other -- had there been other wells drilled in the area that were capable of production, that they would not have been produced or additional wells drilled if the operators of the refinery had any reason to believe that additional production could have been generated by so doing.. Finally, the nature Of the host formation from which the Katella oil was produced suggests that the pool is localized -- is a localized, shallow geologic anomaly. According to Raymond M. Thompson, a geologist and president of'TMT Corporation, one of the owners of the field -- of the Katella field, the host rock for Katella oil is a fractured shale, having for all practica purposes, zero permeability and zero porosity. In other words, the Katella field production comes from oil held in the cracks and fissures within the shale. ~The fact that oil from the Katella field was produced from fairly widely varying depths from wells located 810 N STREET. SUiTE 101 277-O572-277-0~73 R & R COURT REPORTERS ~O9 Wi3RD AVENUE 277-8~43 ANCHO~AGE~LASKA 99~O1 1OO7 W. 3RD AVENUE 272-7~1~ 10 11 19. 13 14 15 17 18 19 20 21 A within a very small area, some 90 acres. It is entirely consistent with the foregoing, especially because of the low pressures anticipated in the Katella field, crude oil -- even high gravity oil such as is produced from the Katella field, will not travel any significant distant to a well bore. In the latter regard, once production is commenced, we anticipate employing gas produced from the field to assist production. Produced gas will be reinjected into the field and/or used to assist in lifting the oils -- lifting the oil from the wells. In the application now being considered by the Commission you have requested relief from the State's spacing limitations s° as to permit unrestricted spacing. Are you also requesting relief from the State's setback requirement of 500 feet? No, not at this time, anyway. We anticipate that the first ten holes -- ten wells, called for by my -- by our farm out agreement, will be placed more or less centrally on the property to penetrate what we believe to be the core area of the Katella field. Depending upon the results of these wells, itlmay or may not be appropriate to consider stepping out towards the periphery of the property. At that time, we would, of course, have the experience of dealing with the centrally 810 N ~T~EET, SU[TE 101 Z77-O572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 AN~HO~AG~,~L. ASKA 99~O1 1007 W. 3RD AVENUE 272-7515 10 11 13 14 17 18 19 20 2¸5 A O. located wells and will have a better idea of how closely one can approach the perimeter of the property without causing drainage to the adjacent property, .should the Katella field, contrary to present information, extend beyond the boundaries of Oil Claim Number One. Your several referenced to declining production from the Katella field cause me to inquire .why you believe it would be worthwhile to redrill the area. I certainly cannot guarantee you that if KTR is permitted to redrill the Katella field that oil in paying quantitie will be discovered. I assure you, however, there is oil there. We know oil is there because of an examinatio~ of.the old wells. We have good reason to believe that the area has been repressurized because of the continued existence of oil seeps on the property which have been noted by Mr. Blask°, as well as myself[ Why is KTR proposing the drilling of new wells rather than the reworking of the old wells? The short answer'to that is that they are old wells. It appears that the'last productive well in the Katella field was drilled and Completed in 1925. Two other wells, one in 1925 and one in 1931, were drilled to over 2,000 feet but were plugged and abandoned. The original discovery well on the property was completed on 1903 and was produced until 1933; thus the range of 810 N STREET. SUITE 101 277-O572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 1OO7 W, 3RD AVENUE 277°8543 272-7515 10 11 14 15 17 19 20 21 24 A ages of the wells in question is from 57 to 79 years. While the surface casing of some of the wells appears not to be in too bad shape, we think the risks of endeavoring to rework wells that are this old are too great,, both from the standpoint of safety and of economics. There is no way of predicting what kind of conditions one will encounter in re-entering wells this old. We fear that KTR'could easily spend more money trying to rehabilitate these wells than it would spend drilling new wells using modern equipment and know how. Why have you requested the Commission to authorize unrestricted spacing within the Katella field? There are several reasons having to do with the nature of the reservoir and economics. As I have stated above, all of the available information, indicates that the oil in the Katella field is produced from a shallow, shale formation between approximately 360 feet and 1800 feet below the surface. The fact that the producing zone is so shallow and it is not capped by totally impervious overlaying strata necessarily mean that the field pressures 'are very low as compared to those which are experienced in deeper reservoirs. In large measure, this is simply a function of the down pressure of the· overlaying rock and the surface seeps which release pressure at Katella. The implications of low pressure 810 N STREET. SUITE 105 277-0572-277-0573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 ANCHORAGE.~LASKA 99501 1'007 W. 3RD AVENUE 272-7515 10 11 12 13 15 16 17 18 19 20 21 22 23 24 are that the oil simply will not migrate any great distance to a well bore from which it can be lifted to the surface. Also the fact that the host rock, the shale, is virtually impermeable and has a near zero porosity, together with low pressure, means that there is little opportunity for the storage of oil or the movement of oil within the formation except within the fracture zones; in other words, one has to drill into · the fractures to produce oil. In a more typical formation 'that is with reasonable permeability, porosity and greater pressures, a single well would drain a much larger area than is possible, where the movement of oil , to a well bore is dependent upon fissures. On the sUbject of economics, it is simply not feasible to go into the Katella field, having to have known (ph) the logistics of such an undertaking, for the purpose of drilling a single well. The expense of taking necessary facilities including' a drilling rig into the Katella field are. such that an oper.ator must be in a position, if the first well is successful, to drill the other -- the ten or more wells deemed appropriate to produce the property. I might also mentior that there was some surface leakage around the' old Katella wells. Based upon what we know about the Katella field, it'is believed that relief wells, near the old 810 N STREET, SUITE 277-O572-277-O573 R & R COURT REPORTERS 509 W, 3RD AVENUE 277-8543 ANCHORAGE, ALASKA 99501 1007 W. 3RD AVENUE, \ 10 11 12 13 14 17 18 19 20 21 wells, will be necessary to dissipate the localized pressure which is causing some surface contamination. Drilling a single well or even two or three wells, does not, we think, have any real possibility of stemming the seepage which has already -- which has been observed recently. Q Does this complete your testimony? A Yes. However, I will be glad to answer any questions the Commissioners might have. MR. CHATTERTON: Lonnie? MR. ~SMITH: Do you want to hold the questions on this now or could we. have the other or go ahead and ..... MR. KLUGER: The other man might answer some of the questions. MR. CHATTERTON: I think we ought to have the other testimony and then we'll -.- we'll proceed. Thank you. NORTON KELLY GOFF testified as follows on:. DIRECT EXAMINATION BY MR. HOLLAND: A A Mr. Goff, you understand that you've already been sworn? Yes, uh-hmmm. Please state your name and address and the party for whom you are testifying in these proceedings. My name is Norton Kelly ~off. .My address is SRA Box 545, R & R coURT REPORTERS 810 N STREET. S.UITE 101 ~O9 W~3RD AVENUE 277-0572-277-0573 277-8~43 i ANCHO~AGF~LASKA 99501 %007 W, 3RD AVENUE 272-7515 10 I1 12 13 14 15 17 18 19 20 21 22 A A -17- Anchorage, Alaska and I'm here representing Katella Tertiary Recovery. Please give the Commission a brief resume of your back- ground as it relates to the oil industry in the state of Alaska. I've been employed in the petroleum industry for 31 years with two years out for military service. I started in 1950 with Empire Drilling Company out of Caspar, Wyoming. I was a driller at age 19; a toOk pusher at 22 and a drilling superintendent at age 29. I have worked in Wyoming, Montana, Colorado, New Mexico, Oklahoma and Texas. From late 1962 until 1968, I worked in various capacities out of Long Beach, California, including tool pusher and drilling consultant. Beginning in 1968, I worked winters in Alaska until 1972 when it appeared that the pipeline was not going to go. At that time, I moved to Calgary, Canada, working for McCulloch Corporation as a drilling superintendent until the fall of 1973. In 19- -- in the fall of 1973, I returned to Alaska with the start up of the pipeline again and the increase in drilling in Alaska. To date, until 1976, I worked as a tool pusher and a drilling consultant and in 197- -- September of 1976, I went to work for ARCO Oil & Gas, a subsidiary of Atlantic Richfield, which is now ARCO Alaska Incorpora 810 N STREET. SUItE 101 277.O572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 AN~HO~A~E. AL,.ASKA 99~O1 1OO7 W. 3RD AVENUE 272-7515 :ed. 12 1¸4 15 17 21 22 23 A And at this time, I'm still employed by ARCO Alaska Incorporated in the Prudhoe Bay unit on the North Slope. In Alaska, I worked in Southeast Alaska, the Aleutian Chain and the Kenai Peninsula, as well as the North Slope. I am, therefore, familiar with remote operations such as the Katella venture. Over the past nine years, I have attended numerous technical and management schools such as the following: Louisiana State University, Drilling' Pressure Control for the Prevention of Oil md Gas Well Blowouts; Preston More Drilling and Technical School at Norman, Oklahoma; Schlumberger Sc.ho'ol of Logging'Analysis Interpretation, Houston, Texas; Haliburton Energy Institute, Duncan, Oklahoma; Modern Well Completion Practice; Atlantic Rich'field Company Supervised Training Program, Dallas, Texas and the University of Oklahoma, IEDC Blowout Prevention Training Program. What is your relationship to the applicant here, Katella Tertiary Recovery Corporation; that is, KTR? I am vice president of KTR. It is also our expectation that I will supervise the drilling operation for KTR. Have you had an opportunity to review the prepared testimony of William H. Stevens presented earlier today? And if so, do you concur in the technical aspects of that testimony? 8~0 N STREET. SUITE ~01 277-0572-277-0~73 R & R COURT REPORTERS ~O9 W. 3RD AVENUE 277-8~43 IOO7 W, 3RD AVENUE 272-7515 1 A 2 3 Q 4 5 6 A 7 8 9 15 Q 19 A 10 11 12 13 14 16 17 18 20¸ 21 22 23 24 25 I have reviewed the drafted testimony and I do concur with it. Would you please describe for the Commission, the casing program which KTR anticipates using for redrilling the Katella field? We anticipate a slim hole program set in approximately 80 foot of seven and five-eighths, 20 pound L-80 buttress casing and -- which will be cemented -- cemented with Class G cement from .the shoe to surface. We expect to set five and a half casing in a six and three quarter inch ho'le between the depths of 350 feet and 1,800 feet. This casing will also be cemented with Class G cement, up to the surface for wells 1,000 foot or less and to -- within 800 feet of the surface with one -- wells 1,800 foot deep or more. Do you plan to install blowout prevention equipment on the~wells in the Katella field and if so, what type of equipment do you propose to use? Despite the fact that the pressures in the Katella field are very low, we will be installing blowout prevention equipment. We propose to use equipment such as described in Figure 2.C.2 of the February, 1978, publication of the API Recommended Practices for Blowout Prevention Equipment. Systems. More specifically, we propose to use a six inch, two thousand pound Duke manual, double gate 810 N STREET. SUITE 101 277-O572-277-0573 R & R COURT REPORTERS ~09 W. 3RD AVENUE 277-8~43 1OO7 W. 3RD AVENUE 272-7515 1 3 A 4 5 6 7 8 9 10 11 12 13 Q 14 A 15 16 17 18 19 20 21 22 A 23 24 25 · BOP preventer with appropriate rams and choke manifold. How will waste disposal be handled at Katella? We would hope to use the evaporation method of waste disposal, due to the low volumes that are going to be left on the surface. We recognize, however, that weather conditions may be such, in the area, that it will be necessary to make other arrangements for waste disPosa If evaporation will not work -- will not suffice and is the project is successful, a waste disposal well will be drilled. If the project is not successful, remaining liquid fluids or wastes on the surface will be injected into a -- a well before plugging and abandoning. How will access to the Katei~la field be accomplished? We have secured from the United States'Department of Agriculture,. Chugach.National Forest, a surface access permit which will get us from the tide waters to the drill site. Transportation to the Katella airport, · across the river, will be furnished with the -- or supplied through a work boat on the Claim Number One side of the river. What sort of communications are available at Katella? There are no°public communications available at Katella. We arranged '-- we will arrange fOr a side-band radio communications via ALASCOM with Anchorage. We are endeavoring to arrange for an FM line also. 810 N STREET, SUiTE 101 277-0572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 IO(2)7 W. 3RD AVENUE 272-7515 10 11 12 13 14 15 16 17 18 19 20 gl -21- A start? minute. Does this com- -- complete your testimony? Yes. However, I will also be glad to answer any questions the Commissioners have. Thank you, sir. MR. CHATTERTON: Lonnie, would you like to MR. SMITH: Yeah. Get organized here for a MR. HOLLAND Would you prefer to have both witnesses up here at the present.time? MR. CHATTERTON: That, Mr. Holland, I think it might be appropriate. I was just going to suggest that. MR. SMITH: Well, I might ask -- this is Lonnie Smith -- a question of Mr. Goff here. With reference to your disposal of waste, are you referring to an open pit type thing for water? Is that the main thought there? MR. GOFF: At this time we -- to be more specific on this thing. We are planning for the slim hole operation to use tWo methods of handling our drilling fluids and that is.earth pits and steel pits. There will also be a waste pit there to handle excess fluids from the drilling. What I'm proposing is that due to the high partic- -- you know, the rain in that area is enormous so to use an evaporation method as we do in the South is almost totally out of the question. So what we're proposing, that any'excess fluids left in these 810 N STREET. SUITE 101 277-0572-277-0573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 A~CHORA~E,~LASKA 99~01 1007 W. 3RD AVENUE 272-7515 10 11 12 1,3 14 15 16 17 18 19¸ 20 21 22 23 24 25 pits on the surface, if the field is producible, we're going to drill an injection well anyway and we'll dispose of them that way If the field is not producible, well then what we'll do, we'll inject it into one of the wells before leaving the site and before plugging and abandoning that particular well. Of course that -- it also includes backfilling of the pits and returning the terrain to an acceptable environmental situation. MR. SMITH: Have you -- do you anticipate lining, any of these pits or -- or how do you propose to make them impermeable, you know, from the standpoint of loss of fluids? MR. GOFF: Yes. We plan on using what we call pit liners, which is a common use in the State now and not only for waste fluids but also liners for fuel tanks, et cetera. MR. SMITH: Have you made any application or talked with the Department of Environmental Conservation concerning requirements for the disposal of waste? MR, GOFF: No, I have not. MR. SMITH: Well, I just -- I think you'll find that necessary to have a permit for this, other than the' drilling, per se, 'and in some cases, what you do with the fluids from the drilling operation. And a question then about the.-- you mentioned a disposal well. Do you have in mind the possibility of -- I mean possibly disposing of it in this same formation or -- or ..... 810 N STREET. SUITE 101 277-O572-277-O573 R ~ R COURT REPORTERS ~O9 W, 3RD AVENUE 277-8543 A~CHORA~E~LASKA 99~O1 1OO7 W, 3RD AVENUE 272-7515 10 11 12 13 14 15 16 17 18 19 20 21 25 MR. GOFF: No, sir. We will -- from the study of lithology from where we're at, will determine where to place the disposal well and, of course, it will be broUght before the -- back to the Commission for 'approval before we drill any such , well or dispose of any fluids below the surface. MR. SMITH: Well, I think that's all the questions I have at.this time on that casing program thing. I think we'll address any further specific questions. You covered the main ones on the program and. I think we'll address any others on the applications to -- for a permit. But I have further questions that might be better addressed, to the other gentleman, Mr. Norton is it? MR. GOFF: Stevens. MR. SMITH: Stevens, I'm sorry. With regard to a development plan, are you -- you mentioned -- you know, you talked about ten wells --'you have to drill ten wells and you're going to drill them within the narrow confines on this lease. Do you already have an idea in mind where you're going to drill those wells and what kind -- some development or operational plan? MR. STEVENS: .It would -- yeah, pretty much. It's based on the -- the histories of the older wells and ease of using the terrain of the land as it is. In other words, it's a small area and the question was -- that we were faced with was whether to be 150 or 250 feet from -- from an old well, you 810 n STREET, SUITE 101 277-O572-277-O573 R & R.COURt REPORTERS 509 W. 3RD aVENUE 277-8543 1OO7 W. 3RO AVENUE 272-75~5 10 11 12 15 16 17 18 19 20 21 22 23 25 know, it's kind of a small well; kind of a small problem. It's -- they'll be placed probably within 200 feet of the older wells. That would be my -- that's what I'd anticipate and preferably the best producing or the ones that had the best production records or the ones that show signs of -- of some pressure now causing them to -- to leak. MR. SMITH: You mentioned earlier that you have -- you negotiated a farm out agreement from Mr. Sauve, is it? MR. STEVENS: Through -- yes, that's correct. MR. SMITH: Will Mr. Sauve have any direct activity in the development? MR. STEVENS: No. His posture in this is -- is one of holding and overriding royalty. He has no -- .no influence in it whatsoever. MR. SMITH: I'm just starting over from the. front of this, kind of looking thrQugh it to prepare questions. If any of you all have questions,, well feel free. MR. KUGLER: I got a -- in this interim, Mr. Goff, what kind of a logging program do you plan on these wells? Are you going to have Schlumberger down there? MR. GOFF: Well, at this time that's still open for discussion with'Bill here. We'll decide on that at the time whether or not we feel like we can just open a hole and produce it. i will say this here, probably 60% of the wells 810 n STREET. SUiTE 101 277-O572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 1007 W, 3RD AVENUE 272-7515 10 11 12 13 14 15 17 18 19 20 22 23 ¸25 will be logged. MR. KUGLER: We h~ve a regulation that all wells have to be logged. Are you aware of that? MR. GOFF: Then all wells will be logged. No, sir, I was not. MR. 'KUGLER: Well, I'm -- you're -- then I assume you're planning a logging operation? MR. GOFF: Certainly. MR. KUGLER: Great. One other question. Do you plan any wells below 1800 feet? MR. GOFF: Not.at this time. No wells -- all the Wells will be drilled between zero depth and 1800 foot for this venture. MR. KUGLER: Okay. I got a question for Mr. Stevens. We have a lease here of approximately 151 acres. MR. STEVENS: Yes, sir. MR. KUGLER: And with a 500 foot standback. Approximately how many acres does that leave for you to drill in? MR. GOFF: Sixty. MR. KUGLER: Sixty? MR. STEVENS: It would take ..... MR, KUGLER: It takes a big chunk out of there. MR. STEVENS: ..... roughly a .third. MR. KUGLER: And do you have this oil claim 810 N STREET. SUITE 101 277-O572-277-0573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 1007 W. 3RD AVENUE 272-7515 10 11 12 la 14 15 16 17 18 19 20 21 22 2a 25 well enough staked out down there so that you know you're 600 or 500 feet back from the property line? MR. STEVENS: The -- well, at this time, the boundaries are marked out by the Chugach National Forest. MR. KUGLER: Uh-hmmm. MR. STEVENS: There's corners present there. It has to be surveyed in based on the corners, as near as we can see right now. MR. KUGLER: Uh-hmmm. MR. STEVENS: The Chugach National Forest has it all -- actually they muSt have surveyed it out themSelves. MR KUGLER: Well, our regulations require that your -- on your permit to drill, that you'll need a registered survey of the location of the well. MR. STEVENS: We do have a registered survey of the 151 acres and then we'll put the wells -- or we'll have another survey done ..... MR. KUGLER: Good. 'MR. STEVENS: ..... for well location. MR. KUGLER: You know it's part of our obligation here 'is to proteCt the relative rights of the'offset operators or -- since there's no operators, the mineral owners so we'd need to know for sure, you know, the -- where your locations are with reference to this oil claim, since it is not a -- does not fit in with the town range system. It sits 810 N STREET. SUITE 101 277-0572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 1007 W. 3RD AVENUE 272-75~ 10 1! 12 13 14 15 17 18 19 20 cock-eyed to it. That's all I have. MR. SMITH: Along that same line, I think it should be made aware if you -- since the offset from the lease line will be 500 feet, if you attempted -- if you asked for an application for a well on that line, which would certainly be possible, there's also other regulations governing directional control and location of the bottom hole of the well and it could be that if you're pushing the line, that offset land owner could request a directional survey that we'd have to make you comply with, which could be expensive so it's just something You should consider if you haven't, to verify the bottom hole location. Yes? MR. GOFF: May i addresS the board? We're quite aware of that and of the limitation of the 500 foot -- the 501 foot limit. The field basically will pertain to the 90 acre field within the 153 itself, the existing pool. And all the wells will be drilled in that existing pool. If, at a later date that we decide to go closer to the boundaries, we will apply to the Commission again for permits to do that. .MR. CHATTERTON: Gentlemen, I'll -- I'll give these -'- the Other two Commissioners a chance to think of.some more questions and -- and try a couple on you. Basically, what -- what I hear Mr. Goff -- I'll probably call you Kelly before I' get through -- what I hear you say there is that you figure you have an oil pool, an area of about 90 acres, and you're planning STREET. SUITE t01 277-O572-277-O573 IR COURT REPORTERS 509 W. 3RD AVENUE 277-8543 1OO7 W. 3RD AVENUE 272-7515 10 I1 13 14 15 17 18 19 20 21. 25 to drill ten wells, at least initially, so that's roughly about a ten acre anomaly -- almost ten acre spacing density. Would you ever consider going to a tighter spacing than that? MR. GOFF: Yes, we're applying, actually but I don't think it's been stipulated for, five acre spacing is what we're asking for. That's what we're asking the board to consider. MR. CHATTERTON: Okay. So that, you could drill up to five acre spacing within the 90 acres productive limit as you anticipate why you could drill up to the order of 17 or 18 wells? MR. GOFF: That is c°rrect. MR. CHATTERTON: Thank you. MR. HOLLAND: For the record, if I might, the application was, I belieVe, submitted as unrestricted. MR. CHATTERTON:. I understand. MR.~ KUGLER: Yeah. MR. HOLLAND: Which would in substance, I believe, let the fellows space their wells as they saw fit. MR. CHATTERTON: I understand. MR, HOLLAND: But, as Mr. Goff indicates, the thinking, I believe, is something like five acres. MR. KUGLER: Okay. Could we be specific on this? Unrestricted or five acres? MR. HOLLAND: Unrestricted. 810 N STREET, SUITE 101 277-O572 - 277;O573 R & R cOuRT REPORTERS 509w. 3RD AVENUE 1OO7 W. 3RD AVENUE 277-8543 272-751 ~5 1! 17 18 21 MR. SMITH: ~11, I might point out that this would be quite precedent setting because unrestricted, we in the past, has been limited to defined field areas within a unit or a particular lease and. if this is, in fact, prove to be all within this lease, which I don't think you can really say or know. It -- there is some evidence that it is or was 80 years ago -- 50 --but I'm not so sure that the Commi'ssion, at this -- initially would be willing to go that far. So could you, in fact, live with the five acre spacing? MR. HOLLAND: Let me try and clarify'. Ail that I was' trying to say was that the application that was submitted was for unrestricted, MR. KUGLER: Yes. MR. HOLLAND: Mr. Goff is prepared to say -- I can see him just chafing -- five acres is fine. I but out at this point. MR. KUGLER: Well, so that we know where we stand here, the request is for five ac.res spacing. How would you gentlemen feel. that if __ if the board so found that we would maybe permit ten wells at five acre spacing with the provision that you reappear before the board and that we have another hearing then as to proceed from then? MR. GOFF: And what would be the time delay? MR. KUGLER: Very nominal. I'd say 30 da~.s. MR. STEVENS: After the original ten wells? 8~O N STREET, SUItE 101 277-0572-277-0573 R & R COURT REPORTERS 509 W, 3RD AVENUE 1OO7 W. 3RD AVENUE 277-8543 272-7515 10 11 12 13 16 18 19 20 21 22 23 24 25 MR. KUGLER: After you've drilled ten wells, that we refind out because we have essentially no data now. Aften ten wells, we'll have ten wells data and we will be much better prePared to rule at that time. MR. STEVENS: Yes. MR. HOLLAND: Say your nods out loud. MR. STEVENS: Yes. MR. CHATTERTON: May I ask this question of both of you gentlement. Have both of you or either of you been on location of the field? MR. STEVENS: Yes. MR. GOFF: Yes, sir. MR. CHATTERTON: Kelly, you have too? MR. GOFF: Many times. MR. CHATTERTON: Okay. What -- what I guess that I wondered about was your referral to.the Katella airport. MR. GOFF: Okay, there is a small, utility airstrip at -- down at the old Katella township, and we plan on using that airstrip there as our base of operations; although, we are on the other side of the river -- not as a base operation but our transportation point. We'll have a work boat at the river to transport us from one side of the river to the other, is all I'm saying. MR. CHATTERTON: I'm trying to remember where that strip is. Is it on a beach? 810 N STREET. SUITE ~O1 277-0572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 ANCHO~AG£,ALASKA 99~O1 1OO7 W. 3RD AVENUE 272-7515 10 11 13 14 1¸5 ¸17 18 19 20 21 22 town there. MR. GOFF: It's right -- right on the edge of MR. CHATTERTON: About a Super Cub strip? MR.'GOFF: Yeah, you can get an Otter in there or a Beaver or a Super Cub or a 180. MR. CHATTERTON: It's improved since I was there. Okay. MR. GOFF: It all depends on how good a pilot you are, I guess, but We've been going in and out of there'with those type craft. MR. CHATTERTON: Okay, thank you. MR. SMITH: How do you propose 'to get your equipment in there? MR. GOFF: By barge. We have seCured from the Chugach National Forest a staging area on the claim side of the river to do this.. MR. CHATTERTON: A follow'up on that and I realize maybe we're straying a little bit but we are vitally interested. Has there been any depths run on the Katella slough since the earthquake? Do you know whether you can get -- well, particularly coming over.the bar there, can you get a barge in? MR. STEVENS: It doesn't -- it doesn't look that way as far as depth. MR CHATTERTON: You said it. does not look 810 N STREET. SUITE.IO1 277-O572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 1OO7 W. 3RD AVENUE 277-8543 272-75~5 · 10 11 13 14 15 16 17 18 19 20 21 23 that way? MR. STEVENS: No, it doesn't look like you could at this point but again we don't how much tides really affect it. MR. CHATTERTON: I understand. MR. GOFF: Maybe -- I have some information on it that Mr. Stevens is not aware of it 'that I haven't been able to get with him on -- I've been working with Mr. Dick Borr (ph) who is an operator out of Cordova and they have a barge service and we have looked at that. And all the equipment will have to be moved in on the tides and out on the tides. MR. CHATTERTON: Sure. Okay, thank you. MR. SMITH: Mr. Stevens, you made a statement that -- as regards to the low pressures anticipated that the crude oil will not travel any significant distance to a.well bore. That doesn't seem to -- what do you mean by significant ~distance? What, in your mind, to you mean by that in that statement? I mean, obviously, you're expecting these well bores to be -- this area to be recharged. MR. STEVENS: I would anticipate the fracture system would be -- would be local; that any one well bore would -- would come in contact with. It would .probably have more vertical play than it would horizontal. I would doubt 'that actually there'd be oVer 150 to 200 feet in the fracture system there. That"s somewhat based on the old wells. They 810 N STREET. SUITE 101 277-O572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 1007 W. 3RD AVENUE 272-7515 10 12 13 14 15 17 18 lg 20 21 22 23 -33- could drill a well within 150 to 200 'feet of another well and not contact anything at the same depth; may go 200 feet deeper before they contacted a fracture. MR. SMITH: Do you -- do you anticipate the oil that your planned recovery -- that will come from unrecovere( oil as left there since the early production for from recharged or redistribution of oil in the area. Do you know or have a feel for that? MR. STEVENS: I -- I would -- I don't really have a fee'l for it. I would guess that it's been recharged from deeper but I really don't have a feel for that. The -- the gas pressure or any increase in pressure from the time the field was abandoned would have come from below, certainly. MR. SMITH: Your reference to pressure, is there any evidence in the earlier data -- I'm .sorry, I haven't completely reviewed Mr. Blasko's earlier testimony either but -- I mean document but was there any evidence of initial'flowing of any of the wells? MR. STEVENS: There's one relatiVely credible -- there's.another figure that there's -- I can't substantiate anywhere. The wells were plugged and I think there were four wells or five wells,. I'm not sure --'plugged in 1905 and reopened in 1910 and one of'them, in the first 24 hours of production, flowed 720 barrels of oil. Based on any records from that, you know, after that point, it's like it had a real 810 N STREET. SUitE 101 277-O572-277-O573 R & R COURT REPORTERS 509 W, 3RD AVENUE 277-8543 $007 W. 3RD AVENUE 272-7515 10 11 12 13 14 15 16 17 18 19¸ 20 21 2g 23 24 -34- I guess you'd say thin skinned situation of pressure was there and then it was depleted immediately. I doubt if -- I doubt if we encounter anything like that now because of the prevalence of the seeps that are there. MR. SMITH: Of course, the seeps are only evidence that there is enough pressure to push it to the surface something to the surface so there possibly you will encounter some amounts of pressure. Do you have any idea of what range? MR. STEVENS: I would -- I would not anticipate much more than the -- than a normal gradient, actually. We're going to be prepared to handle more but I actuallY don't anticipate mUch more. MR. SMITH: You mentioned that you had expected to use the gas on the lease. Is that for heating' purposes and that sort of thing? Is that what you planned? MR. STEVENS: No, it would be -- what we intended it use it for was to enhance the production either by -. by injecting it into -- back into the formation and keeping whatever pressure is there present~ in the formation or by using it in a gas-lift method of production. MR. SMITH: In either case you'd require compression equipment, is that true? MR. STEVENS: Yes. MR, SMITH: And probably dehydration equipment of. some sort? You mentioned reinjection. Then your plan on 810. N STREET. SUITE 101 277-0572-277-0573 R& R COURT REPORTERS 509 W. 3RD AVENUE 277-8~43 1OO7 W. 3RD AVENUE 272-7515 10 I1 12 13 14 15 16 17 18 19 21 22 23 24 25 -35- reinjection would be into the -- back into the same reservoir? MR. STEVENS: In reference to the gas? MR. SMITH: Yeah. MR. STEVENS: Yes, into the bottom of the same reservoir, right. Which we'd anticipate to be, from all records, no deeper than 1800 feet. This would-- this would have to be after we've proven or after it's a proven situation that there's something that's economically commercial there. I suppose, at that point, we would come back before the Commission and make particular reference or ask for whatever allowances are necessary for that injection well. MR. SMITH: I would anticipat,e myself that by your opening this key of nails~ so to speak, by recommencing operations on that lease that the -- maybe it's only potential liability of the older wells there, there's a possibility that you may be required to do some things.with those older wells, especially if they continue to seep or if it increases due to your activities or if We -- if it's considered unsafe in some way once you commence activity there, do you -- do you want to address that, either one of you? MR. STEVENS: Well, we've -- we discussed this ..... MR. HOLLAND: I might address, if it's not inappropriate, Mr. smith. It is my understanding and I have correspondence in my file indicating that the owners of the 810 N STREET. SUiTE 101 277-O572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 1007 W. 3RD AVENUE 272-7515 ( 10 11 12 13 14 15 16 17 18 19 20 gl 22 property, TMT Corporation and Texas-Delaware, have assumed the responsibility for the -- basically have assumed the responsibility for the old wells. It is further my understandinc that -- that in so doing, that the present owners of the property have an arrangement with the former owners, Standard, whereby the cost of clean up of those old wells, should it be required, can in effect be offset against a production payment that'is owed by the present owners to Standard. In any event., it is my belief that the owners of the property 'are at least cognizant of this situation; that some arrangements have been made for it and our discussion -- yesterday I guess it was -- that we perceived that -- that you would ask this question and that something could come along in the future that would require our peoples attention and we're prepared to work out whatever is necessary with the owners of the property to take care of the problem. ,, MR. CHATTERTON: Lonnie, I know you got some other questions to follow up but. I think right there is the point that I wanted to make or -- Mr. Stevens, in your direct testimony, you made the statement that the field was abandoned. Now, I understand.how statements can be made and they walked away and the field was abandoned. But I think -- I. would like to ask you this, is there anY evidence that, in normal oil field terminology, that any .of the wells were abandoned -- had ever .been abandoned other than in the strict sense of what a 810 N STREET. SUITE 101 277-O572 - 277~0573 R & R COURT RePORTeRS 509 W. 3RD AVENUE 277-8543 A~CHORAG£.ALASKA 99501 1OO7 W. 3RD AVENUE 272-7515 10 I1 12 13 14 15 16 17 19 20 21 22 23 24 prudent oil operator would abandon a well? Not that he abandoned a child but I mean did he abandon the well or the wells? MR. STEVENS: About the only strict, hard core evidence possibly is, I would assume, is the way that they dropped the rod in those -- in those wells that had been pumping Would you -- would you agree with that? 'MR. GOFF: If I may address the board? MR. CHATTERTON: Yes. MR. GOFF: The methods that were used certainly were not t'o standards that we require today. We have -- I should have a piece of paper that they documented that they set this plug or that plug or this well was abandoned. All we can go back-- what we've been able to ascertain is the fact that these wells Were plugged and abandoned. Now I cannot give you a well for well, .verbatim, on that. MR. CHATTERTON: I understand. MR. GOFF: However, I will agree that those procedures they used in those days are different than what we use today and certainly will not meet your speculation (sic) -- I mean your requirements but we -- the only indication that we have that -- to call it an abandoned field is that from records that we received from the prior owners. MR. CHATTERTON: Would it be a fair evaluation on the part of either or both of you that the records are 810 N STREET. SUITE 101 277-O572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 ANCHO~AGEAL. ASKA 99~01 104:)7 W. 3RD AVENUE 272-7515 10 11 12 ~ 13 14 15 16 17 18 19 20 21 22 23 24 25 unclear but there is, and because of that, there is a possibilit' that one or more wells were never technically abandoned in any form or fashion other than they might have closed the -- dropped the rods or something like that and walked off? MR. GOFF: We can't deny that fact it exists. MR. STEVENS: No. It's probably true. MR. GOFF: Yeah. Yes, sir, we could stipulate that that possibly could be the situation. MR. CHATTERTON: That it could possibly be a situation? MR. GOFF: Yes, sir. MR. CHATTERTON: These wells .were produced by a pump from a jackline central power plant, is that correct? MR. GOFF: That is correct, yes, sir. MR. CHATTERTON: Okay. MR. GOFF: Mr. Chatterton, we would like to stipulate 'to this here, as long as we're in that operation there and the Commission deem necessary to come on and inspect this stuff and through a negotiation between the Commission and the owners and the delegation of what you see fit is the responsibility of that field, we will work very closely with you in any' way we can to put this thing in order so that it is acceptable not only to the Commission but to all the particular parties that are interested in that area. We will work very closely with everybody on this. .R & R COURT REPORTERS 810 N STREET. SUITE 101 , .~509 W. 3RD AvENuE 277-O572 - 277-O573 277-8543 1OO7 W. 3'RD AVENUE 272-7515 10 11 12 13 14 15 16 17 18 19 20 81 22 '23 MR. CHATTERTON: Thank you. Lonnie? MR. SMITH: Yeah, Mr. Stevens, you mentioned that -- in your statement about it being worthwhile to redrill the area that -- that you're confident that oil in paying quantities will be discovered, what do you mean by paying .quantities there? What's your definition there or what are you hanging your hat on for paying quantities? MR. STEVENS: Well, I think a break-even situation would have to be probably 30 to 40 barrels a day. MR. SMITH: Per well? MR. STEVENS: Per well. MR. SMITH: And --well, before we'd asked some questions about the gas and that's why we -'- once before but this~ -- I want to point out that in the prOduction of oil and gas both that you will be expected to accurately measure the quantities, you know, regardless of the disposition of them and where and how but the oil, water and gas, we will need an accurate measurement on and there's different ways of accomplishing that, 'of course, but I'want to be sure you recognize that. Do you have any plans already as to how you may go about this? MR. GOFF: The study 'for the injection of the gas will'be made after the drilling and the logging of the ten wells and a Study of the flow patterns, by drawing one well down against another well. When this study is completed, then 810 N STREET, SUITE 101 277-O572-277-O573 COURT REPORTERS ~og'w. 3RD AVENUE 277-8543 . 1OO7 W. 3RD AVENUE . 272-7515 10 11 12 13 14 15 ¸16 17 18 19 20 21 22 23 25 we'll be going back into the gas injection or secondary or tertiary type recoveries and all fluids,, regardless whether water or whatever, we will document for the State. MR. SMITH: A problem that occurs and that comes to mind there is that you have to be sure and address is that approval to drill ten wells doesn't give you approval to produce the oil and flare the gas until you make up your mind on those wells somewhere or another. I mean, we're going to -- there may be other exceptions required or Particular attention given to how to measure and cope with this oil, water and/or gas and what you do with it in -- you know, until you can decide the overall project. And so I anticipate some problems there and I don't know if you have or not but I want to bring that out that is -- we -- our present regulations don't allow for flaring of gas and regardless of the quantity, really, so you might consider our regulations on that aspect, unless you. already have and you haven't addressed that in this -- any of this testimony MR.. CHATTERTON: Let me interrupt right there because he -- his questioning leads on .to a question for me, which I think the record should have of-- that should be on the record. You have already testified, gentlemen, that you both have been on scene so this question, I think, is quite valid' Can you tell me t°- -- well, let me put it -- are -- is oil and natural gas being produced in the Katella oil field 810 N STREET, SUITE 1'O1 277-0572-277-O573 R & R COURT REPORTERS 509 W. 3RD AVENUE 277-8543 ANCHORAGE~[.ASKA 99501 IOO7 W, 3RD AVENUE 272-751~ '8 10 11 12 13 14 15 16 17 19 20 21 22 23 24 today? MR. GOFF: Being produced? MR. STEVENS: (Shakes head negatively) MR. GOFF: Would you define -- is anybody producing -- any operator producing it, is what you're saying? MR. CHATTERTON: Perhaps we -- we've got to get the semantics. Is oil and natural gas coming from beneath the surface, to the surface, to the atmosphere today in Ka- -- at Katella? MR. GOFF: In some degree, yes, sir. MR. CHATTERTON: Thank you. It is a producing oil field even though somebody's not taking adVantage of it? MR. GOFF: Well, I'm not saying it's a producin, oil field. I'm saying that there ..... MR. CHATTERTON: It's produced -- it's producin, fluids? MR' GoFF: ..... What I'm saying is you asked ths question is there oil and gas reaching the surface in the Katella oil pool and the answer to that question, yes, that is a fact. MR.. CHATTERTON: Thank you. MR. SMITH: Well, I might further clarify on that. With reference to producing there, you're talking about seepage as a normal terminology of seepage or leaks either from the wells or around the wells or through the formation? 810 N STREET. SUITE 101 277.0572-277-0573 R & R COURT REPORTERS ~09 W. 3RD AVENUE 277.8~43 ANCHORAGE, ALASKA 99~O1 1007 W. 3RD AVENUE 272-7515 10 11 13 14 15 16 17 18 19 20 21 22 23 24 MR. GOFF: Mr. Smith, in all honestly ..... MR. SMITH: Is that what you mean, Mr. Goff? MR. GOFF: ..... there is one well there that I know of that at this time you can get petroleum fluids at the surface and also a small quantity of gas. There is also seepage in the area -- a great amount of seepage. MR. SMITH: Okay. Now this one well you speak of ..... MR. GOFF: Both gas and oil. MR. SMITH': ..... you're talking about you can get fluids from it and gas from it and from the -- internally from the well from the -- from inside the casing? MR. GOFF: Yes, sir. MR. SMITH: By -- you mean, it flows from it or you have 'to sample from it? MR. CHATTERTON: It weeps? Weeps? .MR.STEVENS: It weeps. MR. SMITH: OKay. MR. STEVENS: There'.s an initial build up which dissipates in about 30 seconds -- a minute maybe. MR. KUGLER: Further to Mr. Smith's question there, do you anticipate using all your prodUced gas as field -- I mean as lease fuel or gas ..... MR. GOFF: Let me answer it to the be'st -- I don't -- I'll answer this to the best I can but we anticipate 810 N STREET. SUITE 101 277-0572-277-0573 R & R COURT REPORTERS ~O9 W, 3RD AVENUE 277-8~43 ANCHOrAGe, ALASKA 99~O1 1OO7 W. 3RD AVENUE 272-7515 10 11 12 13 14 15 16 17 18 19 20 23 24 -43- using the gas for reinjection to keep the field pressurized as long as we possibly can and also use it for a gas-lift if necessary and use it for surface facilities, engines, camps, et cetera. MR. KUGLER: Do you anticipate a greater volume of gas than will be used in the ..... MR. GOFF: No, sir. MR. KUGLER: ...... Fine. MR. CHATTERTON: Another question. Is it fair to say that at Katella, quote, unquote, Katella oil field, that with respect to oil and gas, today and for years past, waste is occurring?' MR. STEVENS: Through -- you mean ..... MR. CHATTERTON- Either of you may ansWer or both. MR. STEVENS: ..... Through -- through leakage MR. CHATTERTON: Is the oil or gas that was mentioned here a bit ago by Mr. Golf, is it being used beneficial MR. GOFF: Excuse me, go ahead. MR. STEVENS: No, at this time it is'not. MR. CHATTERTON: Is it -- does your plans to go into the Katella field and operate it, would such operations potentially mitigate -- help mitigate the waste that you suggested is now occurring? Would you operations, being on the 810 N STREET. SUITE 101 277-0572-277-0573 R & R COURT REPORTERS '509 W. 3RD AVENUE 1OO7 W. 3RD AVENUE 277-8543 272-7515 ly? 10 11 12 13 14 15 16 17 18 19 20 21 22 25 i' i -44- scene operating, would -- would ..... MR. GOFF: Would it reduce this hazzard or this waste? MR. CHATTERTON: ..... Would it reduce this? MR.STEVENS: Definitely. MR. GOFF: Yes, sir. MR. CHATTERTON: Thank you. MR. SMITH: I'd like to ask a question of Mr, St- -- well, either one of you, really. With regard to your anticipated development and production technique, do you anticipate the use of or propose the use of any technique other than ordinary, primary recovery techniques to produce the oil from this reservoir? MR. STEVENS: I would -- I would anticipate it would be a secondary ,- is that what you were -- there would be a secondary recovery program, I would -- I would suspect, based on maintaining' as much pressure by reinjecting the gas. That -- that would be our ultimate plan. MR. SMITH: Okay. Well, the name of your company and some elaboration on it in the press has led people to believe, I think, there may be a tertiary recovery thing anticipated here and that you don't really plan or anticipate any exotic method of development of production here. MR. STEVENS: No, not exotic, no. MR. GOFF: May I? 810 N STREET, SUITE 101 277-0572-277-0573 R & R COURT REPORTERS---- 509 W, 3RD AVENUE 277-8543 1OO7 W, 3RD AVENUE 272-7515 10 1! 12 13 14 15 16 17 18¸ 19 20 21 22 23 24 25 MR. SMITH: Yes. MR. GOFF: That -- at this time, basically what we have said is how we're going to produce the field. To clarify the reasoning for the tertiary, it means the third time around. I think that Bill has ascertained that the fact that since he's been involved in this, that this is the third attempt at this field. He's going to put on line to make it economically produce and the third time is a charm. MR. SMITH: Okay. Well, that -- that's quite in line with the reasoning there but that's not exactly what tertiary means in the technical sense as producing a reservoir but ..... MR. GOFF: Sir, the word tertiary hasn't anY- thing to do with how we're going to produce the reservoir. It merely means -- it does mean third and it was -- and when he decided on this name for this corporation was he has ascertained this from the fact that he had been attempting to produce that field twice before so it has nothing to'do with how this field's going to be operating, It's just a name, that's all. MR. SMITH: Fine. MR. KUGLER: The Commission certainly hopes that the third time is a charm, I can tell you that. MR. SMITH: Well, as I perceive it, it is simply.an in field drilling program of an old -- old area and a primary production and.possible application of secondary 810 N STREET. SUiTE 101 277.0572-277-O573 R & R COURT REPORTERS ~09 W. 3RO AVENUE 277-8~43 1OO7 W. 3RD AVENUE 272-7515 10 11 12 1¸3 14 15 16 17 18 20 21 22 23 recovery through pressure maintenance if possible. Go ahead. MR. CHATTERTON: Mr. Goff? MR GOFF: Yes, sir. MR. CHATTERTON: I was not overly happy to hear you say you were going to use manual preventers. Along that line and~ just again to -- because of my own interest I guess, have you thought about typical angular preventer or diverter for one thing? Have you thought about rotating head and drilling with air rather than mud? It certainly will help you situation on waste disposal and things of that natUre. MR. GOFF: Yes, sir, we have, Mr. Chatterton. I believe, due to the high water content of this area, that we're not going to be able to use air and rotating heads. Also, on this.preventer system, if the Commission likes, we will use hydraulic block preventers (ph). I knew this question wou!d come up and we are willing to use hYdraulic equipment. And' when I spoke of a six inch double gate, what this will probably be is a combination diverter system. It'll be two single gates with a spool between and naturally a braden (ph)head below; therefore, we have our diverter system running blind rams on top, five rams below, this will allow us for any stripping operations. We could close the bottoms; change the top ones out, et cetera. It will be -- since this was written, my communications with the suppliers, it will be, if it makes the Commission feel better, two single gates with a spool operating R & R COURT REPORTERS 810 N STREET. SUITE 101 309 W. 3RD AVENUE 1~7 W. 3RD AVENUE 277.O572-277-O~73 . 27,7-8~43 272-7~1~ ANCHOrAGE. ALAsKA 99~O1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 -47- in between as a diverter system and they will be hydraulically operated. MR. CHATTERTON: Okay. You don't plan an angular preventer? MR. GOFF: No, sir. We do not plan an angular preventer. MR. CHATTERTON: Okay, thank you. Gentlemen, we -- we Would like -- before we release you from --from it, we'll keep you under oath. We'd like to take about a three or four or five minute break, if you don't mind and have you come back before us. (Off the record) (On the record) MR. CHATTERTON: Thank you, we're on the record again. We'll reconvene. Gentlemen, I have one request of you, through .your attorney. We will keep the record open on this hearing for two weeks, beyOnd today. We would like to, within that per- -- time period, have furnished to us the documentation that takes us from the ownership of Standard of California throUgh you, the 'third people, and also any documentation you have as to an agreement between, the People you have the farm in from and Chevron regarding liability of existing wells there. MR. HOLLAND: Mr. Chairman -- excuse me. MR. SMITH: No, go ahead. MR. HOLLAND: I have no expectation of any 810 N STrEET, SUITE 10~ 277.057Z-277-0573 R & R COURT REPORTERS 509 W, 3RD AVENUE 277-8543 ANCHORAGE. ALASKA 99~O1 1OO7 W. i3RD AVENUE 272-75~5 10 11 12 13 14 15 16 17 1¸8 19 20 21 difficulty coming up with the first two items within two weeks; we will certainly make an'effort to cover the third item~in two weeks. I'm not sure that we've got 100% of the pieces on that in our files right now. MR. CHATTERTON: I understand. MR. HOLLAND: If we do, we'll have all of it in three we- -- in two weeks. MR. CHATTERTON: Okay. , MR. HOLLAND: And if we have a problem, I will alert you to what it is and we'll work it out. MR. CHATTERTON: All right, very fine.~ Is that satisfactory with the Commission? MR. SMITH: Yes, I think so. I have'another question. MR. CHATTERTON:. We have another question. · MR. SMITH: Would -- Mr. Stevens do you have any objection to a field requirement to run -- if you an- -- if you encounter pressure and I anticipate you will encounter some and I think you do too, at least on some of the initial wells, some. reservoir pressure data -- bottom hole pressure in the individual, wells, would.you -- sooner or later, I think, you're going to have to establish some of the normal field -- oil field development, geologic and engineering data, in order to fully exploit this reservoir. MR. STEVENS: Right. 810 N STREET, SUItE 101 277.O572-277-O573 R & R COURT REPORTERS 509 W, 3RD AVENUE 277-8543 A~CHO~AGE,~LASKA 99201 1OO7 W. 3RD AVENUE 272-7515 10 11 13 14 17 1¸8 19 20 -49- MR. SMITH: And so I think we would require some pressure data be obtained on the wells, if that's possible. MR. STEVENS: Yes, sir. MR. sMiTH: So you have no objection to that? MR. STEVENS: No objection. MR. SMITH: Okay. MR. CHATT.ERTON: Has the well run dry? MR. KUGLER: The well's run dried. MR. CHATTERTON: Thank you gentlemen, very, very much. MR. STEVENS: Thank you. MR. GOFF: Thank you. MR. HOLLAND: Thank you. MR. CHATTERTON: Are there any others that wish to provide formal testimony in this hearing? Anyone wishing to offer any oral statements? I did point out that there is a pad and a pen over there, it belongs to the State of Alaska, on that bench right over next to Kelly. I'f you have any questions that you would wish the Commission to consider asking of the applicants, why you could write'those down and hand them into us. I see nobody making any rush for the paper. I guess what we come right now to is there anything else to come before us in this matter? MR. HOLLAND: We have nothing, Mr. Chairman. MR. CHATTERTON: Thank you. Then I believe -- 810 N STREET. SUITE 101 277-O572-277-O573 R & R COURT REPORTERS ~O9 W. 3RD AVENUE '277-8~43 1007 Wi3RD AVENUE 272-751~ 11 14 15 17 18 19 20 24 -50- Commissioners? MR. SMITH: I move that we adjourn. MR. CHATTERTON: We are so adjourned. The hearing is closed. Thank you. (END OF PROCEEDINGS) 810 N STREET.$UITE101 277-0572-277-0573 R &R COURT REPORTERS 509 W. 3RD AVENUE 277o8~43 1OO7 W. 3RD AVENUE 272-7515 C E R T I F I C ~' E UNITED STATES OF A/~RICA ) ) SS. STATE OF ALASKA ) I, CANDICE DUBOIS , Notary Public, in and for the State of Alaska, residing at Anchorage, Alaska, and Electronic reporter for R & R Court Reporters, do hereby certify: Alaska Oil and Gas Conservatio~ That the annexed and foregoing c~~~ of Commission was taken before me on the 7th day of April. , 1982 begir~ at Borough Assembly Room the hour of 9:00 o'clock sin at the office of 3500 Tudor Road Anchorage, Alaska, 'pursuant to Notice to take the f~r~ bf said witness on hearing behalf of Katella Tertiary Recovery Corporation; .That the above-named witness, before eymmination, was duly sworn to testify to the truth, the whole truth, and nothing but the truth; That this ~, as heretofore annexed, is a trua and correct transcription of the testimony of said witness, taken by me electronically and thereafter transcribed by me: That the deposition has been ret~ned by me for the purpoSe of filing with the ~ ..... Alaska Oil and Gas _~_~__~.~onservatlon Commission ~t, Anchorage, Alaska, as is req!~red by law. I am not a relative or employee or attorney or counsel of any of. the parties, nor am I financ~lly interested in this action. IN WITNESS ~qEREOF, I .have 'hereunto set my hand and affixed my seal this 19th day of April , 1982. Notary Public in and for Alaska My Con. fission expires' _8-28-84 , R & R COURT REPORTERS $10 N Street 509 W. 3rd Ave. 277-0572 277-0573 Anchorage, Alaska 99501 ADVERTISING ORDER ,~chor a2~te Tires 820 ~."i.'. Fm~.rtl.x Aven'ue ' ' · ' Alaska f" 9v501 NOTICE TO PUBLISHER !il iNVOICE MUST BE iN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISE- MENT MUST BE SUBMITTED WITH INVOICE. DEPT NO. ,Z~.laska Oil & C~s (~.,nservation Co:.:~T~i ss ion 390 i PorcuF ine I':r ire ~mehora~:~, Alaslm 99501 VENDOR NO. 2. PUBLISHER DATE OF.A.O. DATES ADVERTISEMENT REQUIRED: i'arch 9, 1982 A.O. NO. THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. BILLING ADDRESS: A F FID AVl T-O F-PU B LI CATION UNITED STATES OF AMERICA STATE OF A1 nqkn ,,, \ ss · Th~ ~cl DIVISION. BEFORE ME, THE UNDERSIGNED, A NOTARY PUBLIC THIS DAY PERSONALLY APPEARED 12~85 ~. Mo,qS WHO, BEING FIRST DULY SWORN, ACCORDING TO LAW, SAYS THAT HE/SHE IS THE_ T.¢,~] C1 ¢.rk OF PUBLISHED AT Anchorage IN SAID DIVISION Third Alaska AND STATE OF. AND THAT THE ADVERTISEMENT, OF WHICH THE ANNEXED IS A TRUE COPY, WAS PUBLISHED IN SAID PUBLICATION ON THE q~h DAY OF March 198Z, AND THEREAFTER FOR. None CONSECUTIVE DAYS, THE LAST PUBLICATION APPEARING ON THED.th DAY OF March 198,Z AND THAT THE RATE CHARGED THEREON IS NOT IN EXCESS OF THE RATE CHARGED PRIVATE INDIVIDUALS. 4 1/2 inches 1 times $18. '~1 SUBSCRIBED AND SWORN TO BEFORE .ME THISlcth ' DAY o~rch 19 82 NOTARY4 "UBLIC///STA:TE O~,. MY COMMISSIOh~-~XPIRES October 20, 1984 REMINDER- ATTACH INVOICES AND PROOF OF PURLICATION. ! NotiCe of, PubliC N~.rln; . ',, ' STA~E OF,ALASKA ,! Al',ik~'°.li?dog. i.. conservation.commisSion R£':' ¥lie ~Tertlory ,R~OwrY ~r~' , ,'dOt~ Mar~ ~",,l~2;~*,:r~'. . ' ,~uestln~ an ~([~,to.,~.,l . "well. :,..'~ClQg, 2 regulation, ' a~gth~:a~tlo~, of flel~ I' Notice' Is. hereby given t~at K~fall~'t :'Ti'¢tlary Recovery ICo¢p.'~as':re~ueste~ the Alaska Oil a~d:.~as ~nservatlon Com- : mlsslon,'~'~sue-'an order grant- Jng-.'~.'exce~tion' 'to 't~e s~te- wide s~clng regulations state~ In 20 AAC 25.055 for the drilling of oll ~lls.ln the Katalla OII Pleld. The establishment of flel~ rules for further development In the a~ndone~ field has also been requested. . Katalla . Tertiary. Recovery Corp. pro~ses to ~evelop the ~atalla .reservoir, found be- tween.360 leaf an~ 1,8~ feet, wlt~.ad~ltlonal"drllllng since the old wells cannot be ~fely teen. feted an~ re=uests unrestricted s~clng In'the ~+ minus acre f~l~. · ' ·" Notice 'Is 'fuither given that a gubll¢ hearing will be held at l 9:00 .A'M Wednesday., April 7,/ 1982 In the Munlcl~lity of An- I ~horage As~mbly R~m, 3~1~ ~ cast Tudor, R~a~; Anchorage ~ Alaska. AIl'~terested ~rsom I an~ ~artles' ar~nVIte~ to glv~ J testimony;' .. ,t." . ' I H~r~W. KuCe. Co~lssloner Alaska OII ~ Ga~ Conservation Commission 'Ao.0, '..., .' ,, .,; ,~: ,,, .,' . ~Pub:i M~. 9~ 198~ ,,, ,: ~,~=,' ,APR 1 1.982 ~.tnc.hora.qe 8136 Bureau of Mines Report of Investigations/1976 Oil and Gas Seeps in Alaska North-Central Gulf of Alaska UNITED STATES DEPARTMENT OF THE INTERIOR AGO 852204 ' OIL AND GAS SEEPS IN ALASKA North-Central Gull' of Alaska by Donald P. Blasko'l ABSTRACT The Bureau of Mines investigated two areas of oil and gas seeps in the north-central Gulf of Alaska--KatallaRiver to Bering River and Cape Yakataga to Yakutat Bay to determine (1) whether previously reported seeps are still active, (2) the characteristics of the seeping hydrocarbons, and (3) the amount of bitumen contained in the drainage leaving the seeps and entering the Gulf of Alaska. Thirteen separate oil seeps, six bitumen deposits, and eight gas seeps were located, sampled, and analyzed. The oils ranged fromm 35.2° to 14.1° AP1 gravity and had sulfur contents from 0.53 to 1.31 wt-pct. Bitumen samples had AP1 gravities from 2.4° to 14.6° and sulfur contents from 0.28 to 0.88 wt-pct. Gas samples had specific gravities ranging from 0.577 to 0.883 and caloric values from 724 to 1,427 Btu/cu ft. A total of 63 water samples obtained from .seep locations and seep drainages were anJlyzed by atomic absorption spectrophotometry for ionic content and by solvent extraction for hydrocarbon content. Although some of the water at the oil seeps had a bitumen content as high as 246,000 rog/l, the amount of hydrocarbons actually reaching the Gulf of Alaska averaged <0.2 rog/1. INTRODUCTION As part of an ongoing program in mineral resources and environmental evaluation, the Federal Bureau of Mines conducted field investigations during June, July~ and August of 1973 and 1974 around the Gulf of Alaska° The investigations were aimed at locating and sampling oil and gas seeps to establish the occurrences, document the locations, and sample and analyze the seep oil and gas. This report deals with oil and gas seeps in two separate areas of the north-central Gulf of Alaska' (1) the area between the Katalla River and the Bering River, (2) the area between Cape Yakataga and Yakutat Bay. The area 1Petroleum engineer. AGO 85220~ between the Katalla River and Bering River contains the abandoned Katalla oil- field~ the first productive field in the State of Alaska. The Cape Yakataga to Yakutat Bay area contains some of the more spectacular and prolific seeps in the Gulf of Alaska. The results of similar oil and gas seep investigations conducted on the Alaska Peninsula, western Gulf of Alaska, are being published in a separate report. The entire area between the Katalla River and Yakutat Bay is located in what is geologically referred to as the Gulf of Alaska Tertiary province. Active oil and natural gas seeps have been reported on upland areas between the Copper River and Lituya Bay since the turn of the centruy. Alaska's first commercially productive oilfield near Katalla was established because of oil seeps. Oil and gas seeps still abound today. Although some old seeps have'gone dry, their locations can still be found. At one time or another, oil seeps have been reported in the Mirror Slough area, Nichawak area, Miller Hills area, and at the head of Katalla Slough. Gas seeps are also prevalent in that area along the shores of Bering Lake and Bering River. The Katalla oilfield still has seeps of crude oil throughout, and gas seeps are also found. Seep areas on .Bering River and Bering Lake were easily spotted from the air by their characteristic white scum spots. SAMPLING PROCEDURES At each seep, an attempt was made 'to obtain enough of a sample of the oil at the site to perform a routine distillation analysis. Failing this, an oil-water sample was obtained. Regardless of whether oil or oil-water was obtained,, additional samples of water were obtained at intervals in the drainage of the seep. These samples were then analyzed routinely for cation- anion qualities. In addition, values were obtained for total dissolved solids and pH. Of prime interest was the value for the oil content of the water, expressed in milligrams per liter. When a seep was located, the sampling procedure was to locate the mouth of the drainage stream and take the first water sample from the mouth of the creek.. Then, two to five additional water samples were obtained upstream from the mouth of the creek at indiscriminate intervals, depending on the length, of drainage between the seep and the mouth. Normally, a sample of drainage water was obtained in agitated or freely flowing current,~ and another was taken in a calm, standing pool. The seep fluid was then sampled. If possible, enough free oil was skimmed off the top to constitute an oil sample for analysis. If it appeared that insufficient oil was present for a free- oil sample, an oil-water sample was taken. The last sa~n~ple taken would be upstream of the seep area, far enough removed to be out of the influence of the seep. The purpose of sampling from the mouth of the creek upstream to the seep, rather than sampling the seep first and progressing downstream, was to insure that representative samples were obtained. Sampling the seep first ~ould agitate the collected bitumen in the ~seep area; this ~ould allow addi- tional bitumen to flow into the drainage, which would not normally occur under undisturbed or natural conditions. Subsequent downstream sample collection could then result in an unrepresentative amount of oil in the drainage water. ~BO 852206 The amount of liquid sample obtained was usually 1 gallon. Samples were obtained by immersing the entire sample receptacle, ~,here possible, into the stream or pond, with the top of the receptacle opening resting on the surface of the water. The fluid ~as then allowed to drain into the receptacle. This resulted in collecting surface water to a depth of approximately 1 inch° Gas samples ~.~ere obtained by completely filling a stoppered bottle with available water and irmnersing ~he top of the inverted bottle in the water surrounding the gas seep. Gas bobbles then enter the opening in the bottle, displacing the water in the bottle. The bottle was stoppered while the top of the inverted bottle was still immersed in the water, thus preventing atmospheric contamination and loss of the gas sample. ~ing to the large number of samples obtained and the commercial cost of analysis~ duplicate samples were not sent to different laboratories to establish indisputable results. ANALYTICAL PROCEDURES The water analyses contained in this report resnlted as a secondary benefit d'erived from the primary objective of the analysis--determining how much oil was present in the water. The water analyses were obtained by atomic absorption spectrophotometry. The oil content of the water was determined by Solvent extraction as described in the appendix. The oil was analyzed 'by routine distillation. The distillation recovers up to the point of thermal cracking. As a further explanation, '300° end point (E.P.) gasoline is good-grade gasoline.; the 392° E.P. gasoline is regular- grade gasoline; and the 500° E.P. distillates include diesel fuels, fuel oils, etc. Ail of the gas analyses were .performed by the Bureau's Helium Operations in Amarillo, Tex.~ utilizing standard gas-analysis methods. KATALLA RIVER TO BERING RIVER Hydrocarbon Exploration Petroleum exploration had its beginning in the Gulf of Alaska near Katalla in 1901. During that year, Alaska Steam, Coal, and Petroleum Syndicate drilled a well in the Katalla Slough to 270 feet. This first well in the Controller Bay area was abandoned after the drilling tools were lost. In 1902, the same company started another well in the area. Oil was struck at about 370 feet. The well was deepened to 550 feet during 1903, but production was from the shallower depth. This was the discovery well in the Katalla field. E>~loration activity continued in this area during the early 1900's; wells were drilled on the east shore of the Bering River, on Chilkat Creek, near the mouth of Chilkat Creek, near Point Hay, on the west shore of Bering Lake, on Mirror Slough, and near Nichawak Mountain. Yearly drilling activity took place until 1925. A total of 44 wells were drilled between 1900 and 1930 in the Katalla area. Almost all the 44 drilled ~ells had oil shows, some had gas sho~s, and 18 produced oil co~nnercially at one time or another· Of the wells abandoned, drilling troubles such as caving holes and lost tools were the most prevalent causes. Some difficulty ~,~as encountered in drilling wells· in the mudflats off the mainland. In some cases, the drill pipe never drilled out of mud. Production from the Katalla field in the first decade of the 1900's ~as great enough that a small refinery was built to process the crude oil. From 1911 until 1933, the refinery operated under different owners (usually the major holder of wells in the Katalla field). The refined products were marketed locally to the fishing fleet in the area, although the demand was much greater than the supply. The refinery burned do~vn in 1933 and production ceased in the Katalla field. A test well was started in 1969 about 3 miles west of the old Katalla field just offshore of the rm~uth of the Katalla River. It was abandoned at a depth of 421 feet when the drilling barge became damaged by a storm. This was the only drilling to take place in the Katalla-Bering River area since 1962. During that year, Richfield Oil Co· (now Atlantic Richfield Co.) plugged and abandoned the Bering River Unit No. 2 after drilling to 6,019 feet. No hydrocarbon shows were encountered in that wel. 1. The previously mentioned wells were the only petroleum exploratory wells drilled on the Gulf of Alaska shorelands between Seward and the Bering Glacier, and the Katalla field was the only commercially productive area in the whole of the Gulf of Alaska region. Pertinent data regarding the wells drilled in the area between the Copper River and Cape Suckling (Cordova quadrangle) are given, in table 1. Katalla Oilfield The abandoned Katalla oilfield is located in portions of ~1/4 sec 31, T 19 S, R 6 E, Copper River Meridian. The field can be located in the U.S. Geological Survey topographic map series on the Cordova quadrangle. The Katalla field, which is patented and privately owned, is surrounded by lands of the Chugach National Forest. The field itself is approximately 3-1/4 miles southeast of the abandoned town of Katalla. Cordova, 50 miles to the northwest, is the closest inhabited to~zn. The oilfield lies in a southwest-dipping saddle between a 1,O15-foot unnamed mountain bordering the Gulf of Alaska to the south and 1,700-foot Mount Hazelet to the north. Drainage from Oil Creek, which originates on the 1,015-foot mountain., and from Arvesta Creek, which originates on Mount Hazelet is to the head of Katalla Slough, southwest of the saddle. The other side of the saddle to the northeast opens up the Redwood Bay lowlands. The geology of the Katalla area as well as the geologic potential of the Katalla oilfield has been described in previous publications.~ The discovery well in the Katalla field was drilled in 1902 as a result of the discovery of oil seeps at the head of Katalla Slough in 1896. ~Hiller D. J. Geology of the Katalla District, Gulf of Alaska Tertiary Province, Alaska. U.S. Geol. Survey Preliminary Rept. No. 206, 1961, 2 maps. __. Preliminary Report on the Geology and Oil Possibilities at the Katalla District, Alaska. U.S. Geol. Survey Open File Rept. No. 50, 1951, 66 pp. · Geologic and Topographic Hap and Sections of the Katalla Area, Alaska. U.S. G~ol. Survey War Hiner. Inv. 1945, 1 map. Plafker, G. Geologic Hap of the Gulf of Alaska Tertiary Province, Alaska· U.S. Geol. Survey Misc. Geol. Inv. 1-484, 19%7, 1 map. AGO 8522:08 TABLE 1. - Wells drilled between the Copper River and Cape Suckling Company Wel 1 1 Location Spudded KATALLA OILFIELD Alaska Petrolcum No. 1 and Coal Co. (110). Alaska Steam Coal A ...... and Petroleum Syndicate. D~ ............... No. 1.. NE1/4 sec 1, T20S, R5E. SW1/4NE1/4 sec 36, T 19 S, R 5 E. NE1/4 sec 36, T19S, R5E. Do ............... No. 2 ........ do ......... Do ............... No. 3 ........ do ......... Do ............... B ............ do ......... Do ............... C ............ do ......... Amalgamated. No. 4~ ....... do ......... Development Co. Do ............... No. 5 ........ do ......... Do ............... No. 6 ........ do.. ~ ...... Do ............... No. 7.. NE1/4 sec 36, T 19 S, R5 E. Chilkat Oil Co ..... Do ............... No. Do ............... No. Do ............... No. Do ............... No. Do ............... No. Do ............... No. Do ............... No. Do .............. No. St. Elias Oil Co.. Do .............. No. 8 ........ do ......... No. t6. Sec 36, T 19 S, R5 E. 17 ....... do... ....... 18 ....... do ......... 19 ....... do ...... '... 20 ....... do ......... 21 ....... do ......... 22 ....... do ......... 23 ....... do ......... 24 ....... do ......... 1903 1901 1902 1903 1904 1904 1904 1912 1912 1912 1912 1913 1920 1920 1921 1922 1922 1922 1923 1925 1925 No. 25 ....... do ......... Aug. 1931 No. 9 ........ do ......... 1917 109 .... NWl/4 sec 31, 1917 T 19 S, R6 E. No. 11. Sec 36, T 19 S, 1918 R 5 E. No. 12 ....... do ......... 7/27/18 No. 13 ...... do ........ [I Sept. 1918 No 14 ....... do ........ I 3uly 1919 See footnotes at end of table. ITotal Completed depth, feet Status 1903 1901 1903 1904 1904 1904 1904 1912 1912 1912 1912 1913 1920 1920 1921 1922 1922 1922 1923 1925 1926 1932 1917 1917 1918 9/7/18 June 1919 1920 903 900 2,265 :Plugged and abandoned. Do. Oil well discovery (abandoned in 1933). Oil well (abandoned in 1933) · Plugged and abandoned. Do. 'Do. Oil 'well (abandoned in 1933). Do. Plugged and abandoned. Oil well (abandoned in 1933). Oil well (abandoned in 1918). Oil well (abandoned in 1933). Do. Do. Do. Do. Do. Do. Do. Plugged and abandoned. Do. Do. Do. Oil well (abandoned in 1933). Do. Do. Plugged and abandoned. AGO 852,209 TABLE 1. - Wells drilled between the Copper River and Cape Suckling--Continued Company Well 1 Location Spudded OTHER AREAS Total Completed depth~ feet Status Alaska Coal Co ..... No. 1 Sec 11, T 19 S, (115). R 4 E. Do ............... No. 2 ..... do ......... (116). Do ....... ~ ........ No. 3 ........ do ......... Alaska Gulf Johnson Syndicate. No. 1 (118). Alaska Petroleum No. 2 and Coal Co. (111). Do ............... No. 3 (112). Do ............... No. 4 (ll3). Do ............... No. 5 (114). Alaska Steam Coal No. 103 and Petroleum Syndicate. Do ............... No. 104 Do .............. .. No. 105 I No 108 Atlantic Richfield Bering Co. River unit No. 1. Do ............... Bering River unit No. 2. Clarence No. 1 Cunningham. (106). Do ............... No. 2 (107). Panoil--Arabian Katalla Shield. state No. 1. .Rathbun ............ 101 .... Unknown ............ No. 102 ~1/4 sec 4, T 19 S, R 8 E. SE1/4 sec 22, T 19 S, R5 E. ..... dO ......... SE1/4 sec 26, T 19 S, R 5 E. Sec 30, T 19 S, R 7 E. 66' N, '3,000' E fr SW1/4 sec 32 T 18 S, R 7 E. SW1/4 sec 22, T 19 S, R 7 E. Sec 5, T 20 S, R6 E. ..... do ......... 1,785' S, 550' W NE1/4 sec 33, T 19 S, R5 E. NWl/4 sec 15, T 18 S, R6 E. Sec 16, T 19 S, R 7 E. 1Based on Copper River meridian. Unrecorded. 19ll 1911 1911 1930 1903 1904 1905 1907 1904 1904 1904 1904 9/9/61 11/19/61 1904 1904 8/16/69 1905 1903 1917 1911 1911 1930 1904 1904 1906 1907 1904 1904 1904 1904 11/2/61 1/20/62 1904 1904 8/21/69 1906 1903 65O 8O0 1,000± 6,175 ,01 (2) 42 58 Plugged and abandoned. Do. Do. POo Do. Do. Do. Do. Do. Do. Do. Do. moo Do. Do. Do. ~,GO 8522'10 In a report prepared in 1922,s a Bureau of Mines engineer who visited the Katalla oilfield described the field operations as follows: "About thirty-five wells have been drilled in the Katalla oil field. Of this number, 20 have been drilled on the patented claim of 151 acres, which claim has been the only place of petroleum prosperity and production in Alaska, since the withdrawal of entry of oil lands on November 5, 1910.. "Some of tine wells drilled years ago on other claims discovered oil but wlnether in economic quantities remains to be determined by further tests. The writer recently visited several of these oil wells and saw ample evidence of the discovery of petroleum. "Tine Chilkat Oil Company own the patented claim and operate the thirteen producing'wells located on it. These wells are being pumped by steam, and the production of about 1,O00 barrels a month of 44 degrees Baume gravity paraffin-base petroleum is piped to the small refinery, owned and operated by the same company, and located about half of mile to the west on Katalla Slough. "The oil production from this claim from 1904 to 1919, inclu- sive, was 56,000 barrels. For 1920 it was 10,745 barrels, valued at.$77,479.46, and for 1921 it was 10,280 barrels, valued at $82,454.55. The above values are based upon the receipts from sale of refined products. The production per well varies from 15 to 240 barrels per month. The better wells are pumped regularly every day, but the oil is allowed to accumulate in the smaller ones which are pumped about once a week. The producing wells vary in depth from 366 feet to 1,500 f~eet. One well was completed to a depth of 2,300 feet, but showed no oil and was abandoned. "Ail of the wells drilled on the patented claim, both producing and abandoned, are rather closely grouped and Would all fall w. ithin a forty-acre tract. '.'Even the deepest well drilled did not penetrate the shale .which seems 'to be the only rock outcropping within the limits of the producing area and from the crevices of which the oil finds its way by seepage into the wells. There seems to be no relation in the different wells as to the horizon at which these oil-carrying crev- ices will be encountered. The drilling of a new well and the encountering of petroleum at greater depths does not seem to affect or be affected by the adjoining wells, some of which produce oil from a much shallower depth. George, H. C. Preliminary Report on the Alaska Oil Fields. BuMines 1922, 18 pp.; available upon request from.D.P. Blasko, Bureau of Mines., Anchorage, Alaska. '- AGO 8,5221 ,, "All of the wells of this field have been drilled with standard tools. Well No. 19 on the patented claim was completed at a depth of 1,500 feet during the writer's recent trip to the Kate!la oil field. This well has 8-inch casing to 900 feet and a 6-inch perfo- rated liner to 1,500 feet, where the principal producing horizon occurs. This well, like all of the others in the Katalla oil field, was drilled ~¢ith standard tools and, like the other wells, it was not cemented, as no water occurs in the formation. T~¢o or three hundred feet of 10-inch casing is used as a conductor and also serves to keep out the surface water. This ~¢ell with its proportion of overhead costs about $10,000.00. "Refining as conducted at Katalla is a simple fire-still procesS where operations are directed towards producing the maximum amount of distillate. The residuum from the refining process is kept in tanks for treatment at a later date, with improved methods and equipment. "An idea of the proportion of the different refined products is obtained from the statement of oil sales of the Chilkat Oil Company for 1921, as follows' :Gasoline ....... 51~671 gallons Distillate .... 249,212 " Diesel oil ...... 8,269 " Kerosene ........ 8,814 "Ail of the refined products, run into 100-gallon steel drums, are disposed of along the Alaska coast to operators of gas boats, canneries and mining companies. A 30-ton gas boat makes a trip with a load of about sixty 100-gallon drums about once a week, deliVering at Cordova and various canneries along the coast. "In this way, the refined product is readil'y handled, entrance being made to the slough and wharf at the ~refinery at high tide and loading being don~ between tides, and the load being taken out on the next tide. Handling the refined products in this way costs five cents per gallon delivered at Cordova or other wharfs in the same general region. "The maximum number of men required in the operations of the Chilkat Oil Company is sixteen. This includes operation of sa~cmill, rig building, drilling, pt,mping and refining." According to figures found in the archives of the Bureau of Mines office in Juneau, Alaska, the total production from the Katalla field between 1904 and 1933 was 153,922 barrels of oil valued at $736,501 (table 2). There are no records of gas production. TABLE 2. - Hydrocarbon production from the Katalla field Year Oil: bbl [ Value ~ Year .. Oil, bbl V'a~ue i9'04 ............... 500 $1,000 1920 ................ 10,746 $53,730 ~905 ............... - - 1921 ' 10,280 51,400 1906 ............... - - 1922 ................ 10,047 30,000 1907 ............... 1,~eo 3,000 1923 ................ 10,653 26,633 1905 ............... 5oo 1,000 1924 ................. ?,299 36,500 ~909 ............... - - 1925 ................ 7,963 34,000 19~0 ' 5o0 1,000 1926 ................ 7,600 38,000 1911 ............... 500 1,000 1927 ................ 6,245 32,60O 1912 ............... 4,057 20,255 1928 ................. ~,470 35,000 ~913 ............... 6,000 30,000 1929 ................ 5,226 36,000 1914 ............... 6,000 30,000 1930 ................ 4,611 27,50O 1915 ................ 6,500 32,500 1931 ................ 4,290 23,00C 1916 ............... 4,555 22,775 1932 ................ 3,410 18,20C 1917 ............... 7~300 36,500 1933 ................ 3~774 20:20£ 1918 ............... 7,543 37,715 Total .......... "'1'53,92'2 ~3~,50] ?~9 ............... .: 10,853 ..... 56,9~3 ... A search for oil seeps in the Katalla field is very difficult. Dense growth or regrowth of vegetation hampers visibility as well as mobility. The marshy, grassy ~etland character of most of the field area is worsened during periods of rainy weather, which are frequent. Oil and gas seeps in the Katalla field have been reported by Miller and Plafker..~- It was not possible to determine if all the oil,saturated locations suspected of being seeps were actually oil seeps or the remains of previous spillages of oil and/or grease from industrial operations in the field years ago. A good portion of the field area is a marshy, poorly drained wetland. However, the water eventually drains either into Oil Creek or Arvesta Creek, both of which empty into the Katalla Slough. On close examination, this m'arsh exhibited a sheen indicative of oil or hydrocarbon cover. Without lengthy surveillance, it was impossible to determine if the sheen or oil originated from oil seeps, leaking wells, or from previous industrial opera- tions. It is possible that the sheen is the result of all these factors. One of two locations were found that were unquestionably oil 'seeps or the remains of previous seeps. Again, it was impossible to determine if these seeps ~ere active or dormant because of the steady runoff and agitation of the surrounding ~,'ater caused by the rains. For lack of attendant gushing oil fluid from these locations, it was assumed, but not proven, that these seeps were dormant. It was impossible co obtain a sample of fluid for hydrocarbon analysis from around suspec'ted seeps throughout the marshland because \of the rainfall and inadequate methods and equipment for skim samples. ~Work cited in footnote 2. AGO 8S2213 lO ii The search for active natural gas seeps in the Katalla field was inci- dental to the search for oil seeps, but more successful. T~o such seeps were discovered by locating the distinctive gurgling sound of the gas surfacing through the water cover. On one occasion, the exact location of the gas seep was elusiYe, but a search continued within the radi6s of the gurgling sound. Finally, a group of frogs was observed concentrated in one spotl Closer observation revealed that the frogs were hopping in and out of a hole about 6 inches deep and half filled with water. It was from this hole that the gas was escaping. The gas from the located seeps had no odor. However, the inclement weather could have dispersed the vapors and interfered with the sense of smell. High winds at the time made futile any attempts to determine if the gas was f 1 ammab le. As far as can be determined, the wells in the Katalla field were shut in and abandoned in 1933 after the refinery burned down. There are no records indicating that any wells were plugged; indeed, there is evidence that they were not plugged. It was difficult to locate the old wells. Dense regrowth of vegetation hid some of the wells so that they were not visible until only a few steps away. Maps from old reports could be utilized at best only as general direction finders in locating wells. The wooden derricks and wellplatforms have collapsed and are in various stages of deterioration. The surface casing is surrounded by wood beams and lengths of rusting pipe along with other rubble. Most of the well casings are surrounded by pools of water and/or oil. It was difficult to tell whether this oil was industrial oil, old oil, Or fresh seep oil. At wells that were possible to investigate closely, there did not seem to be any active seepage of either oil, water, or gas from around the casing. In fact, the condition of the surface casing was surprisingly good. No corrosion or deterioration at the 's6rface level was detected. At two of the wells located, there was a very definite fresh petrolic odor resembling that of kerosine. At one well, the odor is accompanied by evidence of fresh oil on the water surrounding the Qel!o The amount of oil \ on the water was more than a sheen, but.not enough to constitute a sample. It could not be determined if the oil was oozing up from outside the casing, leaking through the casing, or coming from a leaking waive. On approaching the site of the second well, a very strong gaseous odor was noted some distance before the well was actually spotted. Upon reaching the well, the surface area around the casing was thoroughly inspected to determine if any leaks or seeps were prevalent. None were spotted. A "sniffing" check was then made around all valves, cYnnections, etc., of the well itself. A check was made of a horizontal pipe attached to the casing about 4 feet above ground level and protruding about 2 feet' from the well. The gas was emanating a distance of about 6 inches from the mouth of the pipe, ,AGO 85221,~ lI FIGURE 1;- Katalla oilfield Scale I" = apprex 480' LEGEND · -- Local,on of oil well (~-- Waler somple location -'~ -- Gas sample location ~,-- 0~1 sample location A GO 8522 !5 12 obviously under pressure. The weather at the time was inclement--raining and windy--yet~ the gas odor about the mouth of the pipe was vivid. No attempt was made to light or flare the escaping gas owing to a lack of additional assistance should the act go awrY. No attempt was made to either tighten or loosen any of the rusty valves on the wellhead for the same precautionary reason. The odor of the gas~would seem to indicate that heavier fractions are prevalent and could be extracted. The locations of what appeared to be old well sites were found, but no wellhead equipment was located. The sites were identified by deep, large pools of stagnant water and/or oil-soaked tussocks of marshy grass and debris. Because of the lack of wellhead equipment normally surrounding a well site, it was decided that these were either seep areas or well sites that had been abandoned completely. During 1972, the company holding the patent on the land on which the Kat'alla oilfield is located systematically sampled the drainage area of the oilfield. Water.samples were taken from the creeks above, nears and below areas of suspected seeps and well leakage (fig. 1). Analyses of water from this activity are found in tables 3-5.~ It is significant that the oil content of samples obtained in Katalla Slough wa~s less than that of those taken from the rapidly running water of Arvesta and Oil Creeks. This would indicate that the oil is broken up and dispersed by the running water. Another interesting aspect observed in the field was that the profuse growth of long grass .(species unknown) acted as a barrier that collected the bitumen flowing through the swamp to the. drainage creeks. This bitumen is readily identifi- able by the characteristic rainbow Sheen. A sample of crude oil was taken from the casing of well No. 24 (fig. 1). Analysis is given in table 6. The muck and water on ~he surface of the oil were cleaned out prior to sampling. Results indicate that light gasoline fractions were missing, supposedly owing to atmospheric exposure. Other characteristics of the crude oil tended to substantiate the potential quality of the reservior oil. Several natural gas seeps have been observed in the area of the Katalla oilfield. A sample of gas bubbling up through a distinct marshy area was obtained and analyz~ed (fig. 1). Results are given in table 7. KgdJOk ..ISI,a-hd' Borough ~)llclts prolae~a'ls :mr' the .~rc~-. of mfra R~ Det~l~'.E~ulpment ~ltoble~r u~ In In~l~s of ~ a~ ele~rl~l Clrcul~ or eval~fl~ ~lve~ ~ In~- laflon a~.bulldlng ~m~n~ ~r h~f' Ion; SyStem. musf~ '.'~fable a~d: should Includ~ SUitable ~mera .with ap~rt~ ate-len~s,..video ~erder an~ pre~ntatl~n'unlt~. Unl~ must'.~ ,~ry o~.or have t~:o~- flon of using either ~e~.~ or ~.:~wer,.No.[e~'.?~qn.one~y ~.~provla~ w~vn me ~ummem as well as fhe. n~esMry ~t- reties, tabs'or ofher If ems nec-' I~ry for a com~lefely uMble ~etecflon' system. Pro,aMis ~ust ~ recelv~ In Kodiak Is- 'la~d Borough. Office nor lafer fh~n 4 p.m., 19 March, 1982. Ad, dress ~uestlons and pro~ ,Is to K~lak Island Borough, P.O. Box 12~, Kodlak~' AK ~615. Affn: David L'..Waldron, Facll- I~ C~rdlnafor. (~7) ~4~3. P~O. 15~ , ~ '" ' 'l ~,, :, i.',. '? ,,,,, i'~' i 'OF ALASKA %" ";' '' ' ........ "1 ' ~ ~';" '1 "." I. "..: :.',,A,~gskaOI arid 'Gas. '. ,..' AAC 25.055, the statewlde well spacing regulation, and..the '.adoption. of. field rules for the dri'lllng' of wells In the abandoned Ka-. talla Oil.Field. :Katal'la .. Tertiary'. Corp. proposes to develop, the Katalla' reservoir, found be- tween 360 feet and 1,800. feet, with additional drilling since the old wells cannot be safely 'reen- tered and requests unrestricted spacing' n' the 90'+ m nus. acre field. Notice Is. further given that a public hear. lng will be held at 9:00' AM Wednesday, April 7, 1982 In the Municipality of An- chorage Assembly Room, 3500 East Tudor Road, Anchorage, AlasR~. All Interested ~ersons and ~artles are Invited to give testimony. . . ".."~;o~i~ljS~on_e'~:. ,." ...'.. ':.' Al_aSka'~Oll &..Ga~_i~.i'?'. '., ~' .'~;on~erv~tlO~ CbmmlS$1on , .;" Invitation ,For:' Bids '.',' , ,, P ~oj ?;C.T.: .',~ ,~ ,. Notice of PubliC Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of Katalla Tertiary Recovery Corp., dated March 2, 1982, requesting an exception to 20 AAC 25.055, the statewide well spacing regulation, and the adoption of field rules for the drilling of wells in the abandoned Katalla Oil Field. Notice is hereby given that Katalla Tertiary Recovery Corp. has requested the Alaska Oil and Gas Conservation Commission to issue an order granting an' exception to the statewide spacing regulations stated in 20 AAC 25.055 for the drilling of oil wells in the Katalla Oil Field. The establishment of field rules for further development in the abandoned fi eld has al so been requested. Katalla Tertiary Recovery Corp. proposes to develop the Katalla reservoir, found between 360 feet and 1,800 feet, with additional drilling since the old wells cannot be safely reentered and requests unrestricted spacing in the 90+ acre field. Notice is further given that a public hearing will be held at 9:00 AM Wednesday, April 7, 1982 in the Municipality of Anchorage Assembly Room, 3500 East Tudor Road, Anchorage, Alaska. All interested persons and parties are invited to give testimony. Harry W. Kugler Commi s s i oner Alaska Oil & Gas Conservation Commission H. RUSSEL HOLLAND GEORGE TREFRY }~DLLANI~ AND TREFR¥ ATTORNEYS AT LAW 506 WEST SIXTH AVENUE,SUITE ANCHORAGE~ ALASKA 99501 March 2, 1982 .Alaska Oil and Gas Conservation 3001 Porcupine Drive Anchorage., Alaska 99504 · Commission MAILING ADDRESS: POST OF'FICE BOX 2085 ANCHORAGE, ALASKA 99510 Re' Katalla Tertiary Recovery Corp. Application for Exemption Gentlemen· Submitted herewith for filing and review by the Commission is the orig~a.~..0__f.Katalla Tertiary's "Application for~.Exemptionf~ fromT'20~AAG~25.,0SS'('~)~d~Y~'d~pti'oni'Of_.Special.:..~ieldLRUle~Z. ~ of the three exhibits accompanying this filing is the orig- inal of the "Notice of Application"; this notice ~s intended to serve also as F_'ger, tifi¢a:ion_of, mailing, to the addressees named thereon. We understand that there is no filing fee. .ever, should anything further be required. Please advise, ~10 W - Any correspondence, the address indicated, above on behalf of cant herein. .. H. RuSsel H~'iand -'~ X HRH/ms ~) encls. notices, etc., should be directed to us at our client, the appli- B~ORK THK ALASKA OIL ~ GAS CONSERVATION COMMISSION In the Matter of the Applica- tion of KATALLA TERTIARY RE- COVERY CORP. for Establish- ment of Special Field Rules Docket No. APPLICATION FOR EXEMPTION FROM 20 AAC 25.055(e) AND FOR ADOPTION OF SPECIAL FIELD RULES .. KATALLA' TE.RTIARY~RECOVER¥~"CORP'. (hereinafter referred to as "Katalla Corporation"), on behalf of WILLIAM-..H~;~-.'STBVENS (" S t evens") an. di.~..[iT..E...~..A..S,,.:[: ~,...,.,.D.,.E.~L.E_.[ARE'' CORPORAT! ON..2._a.nd T~.IT. cQ....RPO..R~. TI ON (hereinafter referr'ed to as [~OWne'r.15."), hereby applies to the Alaska Oil and Gas Conservation Commission (hereinafter "Commission") for an exemption from the operation of the ~tatewide. Spacing[:regula- · tions contained in 20 AAC 25.055 and for the adoption of ZsPecial.' for the F, atalla oilfield. In support of this application, and pursuant to 20 AAC 25.055(b) and .520, 'the undersigned respectfully represents to the Commission as follows' (1) Katalla Corporation is an Alaska corporation, of which Stevens is the controlling stockholder. Stevens is the as- signee of~ farm out agreemen~3entered into on June 3, 1981, be- tween C. E. Sauve and the Owners as regards property described as , · -1- Oil Claim No. 1, described in patent dated the 3rd day of June, 1909, from the United States of America to the Alaska Development Company, and recorded ~Iay 30, 1913, in Book 3 of Deeds, page 439, Cordova Recording Precinct (formerly Kayak Recording Precinct), and contain- ing 151.17 acres of land, more or less ("Oil Claim No. 1"). (2) The names and addresses of the Owners and operators of lands within the nearest governmental quarter sections directly and diagonally offsetting the above-described property are' RICHARD WARREN Resource Department Chugach National Forest United. States Department of Agriculture 2221 East Northern Lights Boulevard Anchorag.e, Alaska 99504 KAY BROI~ ' Attn .~_ van Allen~~ Division of Mi~r~i~'~-& Energy Management Alaska Department of Natural Resources 5S5 Cordova Street 'Anchorage, Alaska 99501 CARL A. PROPES, JR. Chugach Natives, Inc. 912 East 15th Avenue Anchorage, Alaska 99501 The State of Alaska, Division of ~inerals & Energy Man- agement is notified of this application for the reason that Katalla Slough either'encroaches upon or is in close proximity to the above-described property and is presumably a navigable water- way, the bed of which would be owned by the State of Alaska. Chugach Natives, Inc., does not appear to be the owner of any prop- erty in the vicinity of the Katalla oilfield; ]however, Chugach Na- tives, Inc., has filed a selection under the Alaska Native Claims Settlement Act which includes the lands surrounding the above- described property. (3) Attached hereto as "Exhibit A" is a plat delineat- ing the pr6perty for which an exemption and field rules are sought. Please note that this exemption is sought as to Hineral Survey 599 (the same being the above-described property), only. (4) There is no known, extant plat or survey which pre- cisely locates the numerous wells drilled upon the above property from which oil was produced from various dates as early as 1902 until 1933. However, there is attached hereto as "Exhibit B" a schedule of well data for the Katalla District, compiled by Taylor & Associates in 1968 as a part of its report entitled: "Geology and Oil Possibilities--Katalla District--Alaska". (5) As further detailed in the report of Taylor & Asso- ciat'es, Inc., .the Katalla Field is a recognized oil pool covering approximately ninety acres and wholly located within the above- described property which consists of one ]hundred fifty-one (151) acres of fee land. That 'the Katalla Field is located within the exterior boundaries of Oil Claim No. 1 is further verified by the report of ¥i. A. ver l~'iebe, entitled: "Oil Possibilities of Sourly- eastern, Alaska", dated October, 1923, which indicates that other wells drilled outside the Katalla Field and off the subject prop- ,,!,~ .... · :~!::.i:':.,', !J::! ~':' ! :': ~??C,.'. [,:,,;::~:'.::' :'.,:~ ,"'.: A60 852281 erty were either dry or had only minimal showings of hydrocarbons. The available data further indicate that the vertical extent of the Katalla Field is between 360 feet and 1,800 feet. It is in- tended that the Katalla Field rules would limit drilling to Oil Claim No. 1 and to the upper 1,800 feet thereof. ." (6) Unrestricted spacing for the Katalla Field is sought and is necessary~for two reasons' (a) Pressure in the Katalla Field is very · low; and (b) Despite the extant low pressures, some surface leakage around old wells now on the property is evident, and it is believed that relief wells near these old wells will be necessary to relieve the localized pressure causing surface contamination. (It is the opinion of the Applicant that the old wells can- not be economically reworked nor safe- ly produced. (7) Notice of the within application was mailed, post- age paid and registered, to the adjacent property owners or poten- tial property owners at the addresses noted above on this 2nd day of ~arch , 1982. A copy of the notice (which covered -4- a complete copy of this application) is annexed hereto as "Exhib- it C". WHEREFORE Applicant respectfully requests that the Com- mission exempt ~-~ineral Survey 599 from application of 20 AAC 25.055(e) and adopt appropriate field rules permitting unrestrict- ed well spacing for the said property which encompasses the Katalla Field. i ./: DATED this day of ,,l',/'~,~./d . , 1982. KATALLA TERTIARY RECOVERY CORP. ,, / ,..~/ /',~9 ,' ,, ,,'"{ Z ..',~ ~",' ~, ~?IL'~A~ H. STEVENS, 'President Verification WILLIAM H. STEVENS says on oath that he has read the foregoing document and believes all statements made in the docu- ment are true. -~,' . .. ,...~?~~.,.... % ......, .,,~/:~.. UBSCRIBED AND SWORN TO before me this ,.j-~7~Q.day of 1982, at Anchorage, Alaska. ~ ~) ~Otary Public in and~ fo~sk'a' My Commission Expires ~."~/1 ~/'~.~'"~ -5- 852283 , Suqv[y~'S CEnT,FiCAT[ .......... s ....................................... .,,. s ......... ,~;~. , ..... .s ...... __~ ~-~.,,,..~._.._ ",I~'[''''':~~.,.,. ,,.~ ,-..' .....~..~ ~ ...... ~.~ ....... ~..,,, · .... ,-.,.. TRYCK' NYMAN CLAIM riO. I, USMS 599 CLAIM t40. II ~L 12, USMS 1425 KATALLA, ALASKA · KA?ALLA DISTRICT ;-~ WELL DATA - Co=.paay end Well :la--e Locx:ion Year ' To~-I D~p;h Section W~II A C3a1 Co. :+al Co. (No. 111) Compan~ not kccun ASC and ?~ · ASC and PS ~Well ASC azd ?S [:{~. 103) ASC a:d PS ASC an~ PS (1;~. 105) ASC a~d PS (:;~. loB) Alaska Petty!au: and Coal Co. Nc. 3 .. FIGURE 3 Katalla Fie!~ ?: a.'. a 1 ! a SiDugh Ka%alla Raver Eas~ Shore of Bering Eiver Katalla Field ,, _ _ Ckilk~% Creek ~{ear Mouth of Chilk~t Creek Chilkat Cre~k Hitcher Creek 1932-1903 19D3 !93~ 190~ 1904 19o~ 19o4 19o~ 190h- 27O 550 About lOOO !710 ~O 58O About 900 Not knovn Not known About ~00 Abcu~ 650 About 800 About lO00? About 1500 Dli~ocene, Ka:a!!a Fo. ,, . Qua:ernary unconsol- idated deposi:s ,, Oligoeene , Emtalla Fm. of Oil Discoverf Yell of oil 3: 366 1~92.L Produced O~l at 733 ft. Abandoned s: !izit ~f ~ri!~ . lng equiymung. Emal! sk3= Of oil re,or:ed Produced !)!2-1~33 ~;ot known; probably alan- domed a: shal!o'; ~e~th 7~ot knowm; pro~ably ~Lam- domed at ~ha!lo~ depth Abandon~, l. mst tools Abam~oned. tools lost? Sho~ of oil and gas te~ted for proauction? Sho~ o£ oil; not tested for production Abandoned ;; "' L L D A T A Coal Co.:lo.5 (:]~. No. 2('- .... ~16) Alaska ~. 3 (N~ 117) Co. (ao. AnalEa:ated Eevelopmen% A=alcaza%ed Deve!opzent Co.-(No. 6) ' . S%. Elias Oil Co. St. Elias Oil Co. (.So. FIGURZ 3 Pag'- 2 :]ear ?~int Eu}- :lear '.lea % ~hore 3erin~ Lake MirrDr . ,, ,, Ko'- al! a Fie!~ ,, :]ear Katal!a Field · . i)!1-1917 !9!2 19!2 1912 '. ~913 1917 :;o= k n o:'n ;.'~out 1793 16D9 IOLO 272 About 250 690 About !O00 About !00 About 1100 . 1~10 1613 ~uaternary uncon$ol- ida;e4 deposits :4iocene or Oligocene, Kata~la Fcr~a%ion 31igocene -~[a% m!l a U~per Eocene, Tokun Fcr"-~tion Oiigocene. Kaza!la Lower Tertiary ? ,, ,, Oligocene, Ka%alla F~-. ,, ,, . ,, . . ,, · . . ,, A~anion~a ~t ;nallo'~ !~%h Abandoned at ~th ct' se'z- eral hundred feet Abandone~ at depth ~r:~- ably exceeding 150~ Abandone4 Abasd~e~; sho~ of fl! Oil between ~00 and ~73 ft. produced 1912 - 1~2 Oil at 650 ~nd 830 f:; pro- duced 1912'- 1~33 Abandoned. tools los~ Oil ~t 300-h~O ft. ?ro- duced 1912 - 1933 %' 700-800 ft.; ly in 191~' Abandoaed; small a=ou:t$ of oil mt 6~O and 1OOD gas at 350 ft. Abandoned, caving. amounts of oil at 1~30 amd 1613 ft., :f gas at ~60, ZgO, ~60 an! i · . ~. [ L_-:~:i ;n } Y.~:r "e :: i c.~ 'ene'- r a'.e i I St. EliasOilCo. (-:i~. I!)]Kat~_ila Fieli' St. EliasOil Co.(:;~. 17) .... 'St. EliasOil C9.(No.13) .... Chi!~.a~ Oil Co. (:15. 17) " <h22~: Oil . ChilkstOil ~o. (l;). 20 " C:i!k{tOil ~. ([;~. Cnilk~ Oil Co. (ilo. 2~ " C~i!~it Oil Chilkat 9il 20. (:;G. 2) " Al~sktn ~ul{' Richfield Oi'l Cor~. :1o. I :;eir Z/tinE Li~e ~n 3erin~ ~iv~r I~2C I)29 !921-i92~ 19~2 1922 192~ 192S-!926 · 1931-1932 1933 1962 903 . 91igo:eue, Ka:all Fr... Oil at 33), h3O pr;iuc~d !)I~ - 1935 Oil at 635 a~d 77; ft.: gas Akandoned, .sn~':s and gas Oil at 3~5, 5!0 ft.; prgduced l~SD - Protuced !929 - Pr~duc~t !72! - 1}33 Produced 1922 - Produ:ed 1922 - 1933 Produce~ 1922 - Produced 192~? - 193~ Produced !gz~ - 19~] .( Akandoaed Abandoned. Shg~ of ~03 ~6~ 1202 1259 1160 2353 6175 Tertiary ,, Dry Hole Dry Mole BEFORE TI!E ALASKA OIL & GAS CONSERVATION CO,Xl)IISSION In the Matter of the Applica- tion of KATALLA TERTIARY RE- COVERY CORP. for Establish- ment of Special Field Rules Docket No. NOTICE OF APPLICATION ,, TO: RICHARD WARREN Resource Department Chugach National Forest U.S. Department of Agriculture 2221 East Northern Lights Boulevard Anchorage, Alaska 99S04 KAY BROWN, Director Attn: Bill van Allen Division of Minerals & Energy Management Alaska Department of Natural Resources SSS Cordova Street Anchorage, Alaska 99S01 CARL A. PROPES, JR. Chugach Natives, Inc. 912 East lSth Avenue Anchorage, Alaska 99S01 YOU ARE HEREBY NOTIFIED that Katalla Tertiary Recovery Corp., pursuant to 20 AAC 2S.055(b) and .520, has filed the above styled application'for exemption from 20 AAC 25.055(a) and for the establishment of field rules. A complete copy of said application is appended hereto for your information. PLEASE BE ADVISED that the foregoing application for ex- emption will be handled by the Commission in accordance with 20 AAC 25.540. /~ DATED at Anchorage., Alaska, this ~.-.. day of ~z .... , 1982. I{OLLAND AND TREFRY Attorneys for Applicant Location No. Com~ag~ and well name or number Alaska 'Steam Coal & Petroleum Syndicate (ASC&PS) (A) ASC&PS TABLE 4,--Wells drilled for petroleum in the Katalla area, Alaska, through 1969. Total depth__ Location Year Feet (Metres.} Formation penetrated Katalla field .... 1901 270 (82.4) ........ do ........ 1902-3 550 (167.8) 3 ~sc&Ps (2) J/ Alaska Petroleum & Coal Co. 1 Near head of (110) Katalla Slough-- 1903 5~2/ Alaska Petroleum & Coal Co. 2 Katalla River ..... 1903 (111) · 6 Company not known (102) ....... East shore of Bering River ........... 1903 7 ~SC&PS (3) Katalla field ..... 1904 : 8 ASC&PS (B) ........ do ........ 1904 9 ASC&PS (C) ........ do ........ 1904 10 A$C&PS (103) Chilkat Creek .... ~ 1904 11 ASC&PS (104) Near mouth of Chilkat Creek--- 1904 t2 ASC&PS (105) ........ ~o ........ 1904 13 ASC&PS (108) MAtcher Creek .... 1904 14~1/ Alaska Petroleum & Coal Co. 3 (112) Near Katalla .... 1904 15 Clarence Cunningham 1 (106) Near Point Hey --- 1904 16. Clarence Cunningham 2 (107) ........ do ....... 1904 1~/ Alaska Petroleum & Coal Co. 4 (113) Near Katalia ..... 1905-6 .1~/ Rathbun well (101) 19 211_/ 121_/ 23 24 2j~/ 26 27 28 29 3O 31 ........ do ........ 1903 1,000± (305±) 1,710 (521.6) 280 (85,4) 580 (176,9) 900± (274.5±) 400± (122±) 650~ (198.2±) 800± (244-+) 1,000-+ (305-+) 35 36 37 38 39 40 41 42 43 44 Results and remarks 45 1,500_+ (457.5-+) ,- Katalla Formation-~ ........ ' Abandoned; tools lost. Show of oil. do, Discovery of well at Katalla field; struck flow of oil at 366 ft (111,6 in 1902. Produced intermittently, 1902-33. do Oil at 700 ft (213,5 m). Produced intermittently 1912-33. Abandoned at limit of drilling equip- .do meat. Small shows of oil reported. quaternary unconsolidated deposits 'do Katalla Formation. .do .............. do 'do do do do do' Quaternary unconsolidated - Tokun Formation Katalla Formation. Abandoned. Abandoned. Produced 1912-33. Not known; probably abandoned at shal- low depth. ,Do o Abandoned; tools lost. Abandoned; tools lost~ Shows of oil -and gas. Shows of oil and gas; not tested for production ? Show of .oil; not tested for production. West shore of Bering Lake --- 1905-6 1,700± (518.5±) Eocene, Tokun(?) Formation Alauka Petroleum & Coal Co. 5 Near Katalla (114) Slough ....... 1907 1,600 (488) Alaska Coal Oil Co. 1 (115) --- M/trot Slough --- 1911-17 1~040 (317.2) Alaska Coal Oil Co. 2 (116) ........... do Alaska Coal Oil Co. 3 (117) .......... do ........ 250±' (76.2) Amalgamated Dmv~lopma~ C~, (4) latalla field --- 1912 Amalgamated Development Co. (5) ........ do ....... 1912 Amalgamated Development Co. (6) .' ........ do ....... 1912 Amalgamated Development CO. (7) ; ....... do ....... 1912 Amalgamated Development Co. (8) ......... do ....... 1913 Abandoned Abandoned at shallow depth. Abandoned at depth of several hundred feet (metres).. Abandoned a% depth p~obably exceeding 1,~00 ft (457.5 m). Katalla'Formation ......... Orca Group(?) Abandoned; small flow of gas in 1945. .do' ~bandoned. Abandoned. Shows of oil and gas at 710 ft (216.6 m). Abandoned .......... . ..... . 690' (250.4!)_ Katatta Formation ' Oil b~tween 400 and 50~ iC (122 152.5 m); produced 1912-33. 1,000_+ (305_+) ,do lOC.* i(30.5+) 'do 645 - (196.7) ,do ......... v 1,100_+ (335,5-+) ,do, St. Elias Oil Co. (9) ,do ....... 1917 1,810 (552) Oil at 650 and 800 ft (198.2 and 244 m); produced 1912-22. Abandoned, tools iost. Oil at 300 to 450 ft (91.5 to 137.2 m); produced 1912-33. ,do¸ Small amount of ail'between 700 and 800 . ft (213.5 and 244 m); produced brief~ in 1917. Abandoned; small amounts of oil at 650 and 1,000 ft (198.2 and 305 m); gas at 350 ft (106.8 m). St. Elias Oil Co..(109) Near Katalla Field 1917 1,613 (491.2) St. Elias Oil Co. (11) ........ Katalla Field --- 1918 1,130 (344.6) St. Elias Oil Co. (12) ,do ....... 1918 903 (275.4) St, Elias Oil Co. (13) ,do ....... 1918-19 900 (274.5) 'do .do 'do' ¸do Abandoned, caving. Small amounts of oil at 1,050, 1,230, and 1,613 ft (320.2, 375.2, and 492 m), gas at 260, 290, 460, and 1,520 ft (79.3, 88.4, 140,3, and 463,6 Oil at 490 and 590 to 1,000 ft (149.4 and 180 to 305 m), gas at 380 and 475 ft (115.9 and 144.9 m); produced 1918-33. Oil at 330, 430, and 590 ft (100.6, 131.2, and 180 m); produced 1918-33. Oil at 635 and 770 ft (193.7 and 234.8 m), gas at 637 ft (194.3 m); produced 1919-33. Elias Oil Co. (14) ................ do ....... 1919-20 2,265 Chilkat Oil Co. (16) Katalla Field .... 1920 740? Chilkat Oil Co. (17) do ...... "- 1920 903 ! Chllkat Oil Co. (18) ...... ~-do ........ 1921 1,000 Chilkat Oil Co. (19) .do ........ 1921-22 1,465 Chilkat Oil Co. (20) ........ do ........ 1922 1,202 Chilkat Oil CO. (21) .do ........ 1922 1,751 Chllkat 011 Co. (22) 'do ........ 19237 1,280 Chilkat Oil Co, (23) .do ........ 1925 1,160 Chilkat Oil Co, (24) Chilkat.Oii Co. (25) Alaska Gulf Syndicate Johnson 1 (111) Richfield Oil Corp. RAchfield Oil Corp. .d6 ....... 1925-26 2,350 Near Katalla Field 1931-32 2,005 Nichawak-Mountain 1930 190 East side Bering River ......... 1961 6,175 Near outlet of Bering Lake --~ 1961-62 6,019 (690.8) ,do, (225.7?) Miocene and(or) Oligocene, Katalla Formation (275.4) (305) (446.8) (365.6) (534) (390.4) (353.8) (716.8) (611.5) do, do do do do do, do. do do. do, do, (58) (1,883.4) (1,835,8) Abandoned; shows of oil and gas, Oil at 365, 510, and 740 f't (11!.3, 155.6, and 225.7 m); produced *1920-33.- Produced 1920-33. Produced 1921-33. Produced 1922-33. ProdUced I922-33. Produced 1922-33. Produced 19237-33. Produced 1925-33. Abandoned. Abandoned. Show of gas. Abandoned. Dry and abandoned. Dry and abandoned. 1/ - Outside area of the geologic map. Katalla Proj e ct Proposed Oil & Gas Drilling by Cassandra Energy Corporation . . . : '..' ..'. : ." .- ' _ " .... ,.opper River. _~ ' .' : ",~ ~\ ' ' ~.~ I ' ' ) ' .. ' .,,...:'5 / ~,~, - f./ /~/ - - ~- ,~ ' ~, . . - .~* · · ~ . - ' ~ ~ ' · . ~' ,-----_ ~ · ' :'"' .' ' · .- · · ' --.- .'. =- ...... :~--':.: . - . ' x..;-: ?.:.:-~'-:: ':;~:~ : ~....~:'_-~. ~: ..... - "' ' "' ' ' .... . . · ... .. .... '. '-. :.. i .--..- · ..... '- · :. -' :.': :. '..-'..":-:-:.-:'-' '. -.- - · ' - -. ...... ' -:.:' ' '..:..;-..-.'-.::.. ": :' '-:.::'-'..:.. ;-.:"': :::-'::::'.'-'".:.-':':.::--.-:=-" ~e:':s~;~:~.6-~;~2"i:~-::::.:--.-':.':":.:' -. :.-'---:- -- · . .. :. ::. . . '-.' · ...-.-..._..:. -. : :.--.'{..:.'.. ':. :.. :.. :.._..:. :.. :._..:.::-...:.,, _-.'- ::._'. :::-:_.: ".. ~': :-:' .' "' '..'. :_ ::_-~: '":- _.. ..,:.._. ::. :.,: : :-:::-..- The entire area is within lhc Copper River Delta Fish mid Wildlife Management Arca. Katalla Area Overview Chugach National Forest · ' . ',.;I:.~,! i', I .,~l I!lll:, IFc': '. ' ' :~' ~:l,: III, I : ii ..'/.~ /-~-~'.~ " · ." 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':: I "~ ...... !'"' i !': -': t,i' ]:'i, :?!:: il' !iii ?i '; ,'., :.,.!, Fi'; ..'r' ! · ."l'.l;' ,, ]:'.: .31 '.~'. :,..';!."11 i'l.,.,I :.!, I ', ,'.:i.; 'I: '".. ~; ' · I II 0 .5 1 1.5 .~ MILES CZI Other Ownership rr~ Chugach Alaska Corporation (CAC) Katalla Area Oil and Gas Rights [ZZI National Forest I Large Cemetery Z2 Water '^" Stream At Katalla Road (Proposed location) At' Old Wagon Road /~/ Trail Wells Drilled between 1901 & 1932 -GPS Locations '~' Abandoned Oil Well t} Dry Hole, shows ofoil & gas ~ Dry Hole, shows of gas ~k Dry Hole, shows of oil Wells Drilled between 1901 & 1932 -Approximate Locations Abandoned Oil Well Dry Hole, shows ofoil & gas Dry Hole, shows of gas Dry Hole Proposed Drilling Site (Jessica Stevens #1) Proposed Bottom Location 1983 Drillh~g Platform RIG 1 Buildh~g Old Refh~ery August 21,2001