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5/21/03 ConservOrdCvrPg.wpd
STATE OF ALASKA
ALASKA OIL AND GAS CONSERVATION
3001 Porcupine Drive
Anchorage, Alaska 99501-3192
Re: THE APPLICATION OF UNION )
Oil Company of California )
to establish spacing rules )
and commingling of product-)
ion of oil bearing sands )
below the Hemlock oil pool )
in Trading Bay Field with )
other pools in the field. )
Conservation Order No. 252
Trading Bay Field
Undefined zone below
the Hemlock oil pool
May 7, 1990
IT APPEARING THAT:
1. Union Oil Company of California (Unocal) submitted an appli-
cation dated March 21, 1990 requesting rules governing well
spacing and commingling of production of oil bearing sands
underlying the Hemlock oil pool in the Trading Bay Field with
production from other pools in the field.
2. A notice of public hearing was published in the Anchorage
Daily News on March 23, 1990.
3. A public hearing on the matter was held April 23, 1990 in the
offices of the. Alaska Oil and Gas Conservation Commission,
3001 Porcupine Drive, Anchorage, Alaska. Testimony was
presented in support of the petition.
FINDINGS:
1. Oil bearing sands underlie the Hemlock oil pool in strata
that appears to correlate with the West Forelands Formation.
2. Insufficient information is available to delineate these oil
bearing sands as a separate pool.
3. The areal extent of the oil bearing sands appears to be
approximately 160 acres.
4. More than one well will be required to drain the accumulation
because of the high clay content of the reservoir sands.
5. Wellbore commingling of produced fluids from these sands with
production from overlying pools will promote the prudent
development of the sands.
6. Conservation Order 93A concluded that allocation of produced
fluids to their respective pools in Trading Bay Field is no
longer of any benefit to reservoir management, ultimate
recovery, or the prevention of waste.
Conservation Order No. 252
Page 2
May 7, 1990
CONCLUSIONS:
1. Unlimited well spacing in the oil bearing sands underlying
the Hemlock oil pool will benefit reservoir management,
improve ultimate recovery and prevent waste.
2. Wellbore commingling of produced fluids from the oil bearing
sands underlying the Hemlock oil pool with production from
other oil producing intervals within the field will enhance
ultimate recovery and prevent waste.
3. Correlative rights will be protected if the wellbore is not
open to production within 500 feet of a lease boundary
marking a change in ownership.
NOW, THEREFORE, IT IS ORDERED:
1. Conservation Order 93 is amended by adding a new rule to
read:
Rule 13. Spacing rules for oil bearing sands below Hemlock
Oil Pool.
Unlimited well spacing is allowed for wells drilled to oil
bearing sands underlying the Hemlock oil pool, except that no
well may be open to produce these sands closer than 500 feet
to a lease boundary marking a change in ownership.
2. Rule 3 of Conservation Order 93 (as amended by C.O. 93A) is
further amended to read:
Commingling in the wellbore of produced fluids from the
Trading Bay Middle Kenai B, C, D, E, and Hemlock oil pools,
and those oil bearing sands which overlie the Middle Kenai
'B' oil pool and those oil bearing sands which underlie the
Hemlock oil pool is permitted. Total well production need
not be allocated to each pool and productive sand.
Done at Anchorage ~~~~ C'.' V. Chatterton, Chairman
d Gas Conservation Commission
David ]~. ~Joh~ioner
~~ Fl~~~~~.~a~~~~rvati°n C°mmis si°n
L~ie C. Smi~~ommissioner
Alaska Oil and' Gas Conservation Co~ission
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STATE OF ALASKA
ALASKA OIL AND GAS CONSERVATION COMMISSION
Re: UNOCAL application to )
commingle production of those )
oil bearing sands which )
underlie the Trading Bay )
Field, Hemlock Oil Pool. )
)
APPEARANCES:
FOR THE COMMISSION:
ALSO PRESENT:
PUBLIC HEARING
MR. CHAT CHATTERTON, CHAIRMAN
MR. LONNIE SMITH, MEMBER
MR. DAVID JOHNSTON, MEMBER
MR. ROBERT PROVINCE, UNOCAL
MR. DUANE GRUBERT, UNOCAL
MR. ROBERT WARTHEN, UNOCAL
MR. RON KIES, UNOCAL
MR. RUSS DOUGLASS, AOGCC
MR. ROBERT CRANDALL, AOGCC
April 23, 1990
2:00 p.m.
Alaska Oil and Gas Conservation
Commission
3001 Porcupine Drive
Anchorage, Alaska
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PROOEED I NG S
MR. CHATTERTON: Sood afternoon.
For the record
I am Chat Chatterton, Chairman of the Oil and Gas Conservation
Commission, and we are at $001 Porcupine Drive, Anchorage, in the
conference room of the Alaska Oil and Gas Conservation
Commission.
We are here in response to a request by Union Oil Company
for an exception to some commingling regulations that now exist.
And the time I believe is about 2:05, the afternoon of --
what date?
MR. SMITH: 23rd.
MR. CHATTERTON: The 23rd of April, 1990.
Lonnie, would you -- oh, before we go, why, let me
introduce the people at the head table here. To my right, your
left, is Commissioner David Johnston, and to my immediate left is
Commissioner Lonnie Smith, and at my far left is Meredith Downing
with the R & R Court Reporters, who will be recording the
proceedings at this session.
Without further adieu, why, we'll read into the record
the notice of this meeting. Lonnie?
MR. SMITH: Yes. The notice of the public
hearing was published in the Anchorage Daily News on March the
23rd, 1990. "State of Alaska, Alaska Oil and Gas Conservation
Commission. Reference: The UNOCAL application to commingle
production of those oil bearing sands which underlie the Trading
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Bay Field, Hemlock Oil Pool.
"UNOCAL in correspondence dated March the 21st of 1990
has applied for an order allowing commingled production of those
oil bearing sands which underlie the Trading Bay Field, Hemlock
0il Pool with production from other defined oil pools in the
field.
"A hearing on the matter will be held at the Anchorage --
Alaska Oil and Gas Conservation Commis- -- Commission, 3001
Porcupine Drive, Anchorage, Alaska, 99501, at 2:00 p.m. on April
the 2$rd, 1990, in conformance with AS 31.05.100(a). Lonnie
Smith, Commissioner."
MR. CHATTERTON: Thank you, Lonnie.
Bob, how many -- who do you have planning to testify?
MR. WARTHEN: Mr. Commissioner, we have --
Mr. Chairman, we have two expert witnesses to testify today. We
have Mr. Duane Grubert, who's a petroleum reservoir engineer with
Union Oil Company, and'we have Mr. Ron Kies, a petroleum
geologist also with Union Oil Company.
Both of the -- both of these individuals have testified
previously and have been designated as expert witnesses, s'o
perhaps you might want to swear them in and we can begin?
MR. CHATTERTON: Bob, with all -- all due
respect, why, they have not been sworn in or qualified as expert
witnesses to testify in -- in this hearing, and so we will ask
you to go through that song and dance again for us -- our
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consideration. But .....
MR. WARTHEN: Very good.
MR. CHATTERTON: ..... without any further adieu,
Lonnie, would you like to swear the two witnesses in, please?
MR. SMITH: Would you stand, please?
RON KIES
DUANE SRUBERT
having first been duly sworn, testified as follows:
MR. SMITH: Thank you.
MR. CHATTERTON: Thank you. Thank you, Lonnie.
All right. You may proceed, and you may state your
qualifications as -- at the beginning of your testimony if you
like.
MR. KIES: My name is Ron Kies. I work for
UNOCAL Oil Corporation. I've been a petroleum geologist for the
past eight years. The last two years I've been involved with
Cook Inlet development work, primarily the Trading Bay Field, the
Monopod Platform. Prior to this time I was involved with
exploration work both on the North Slope in the Beaufort and
Bering Seas. And prior to working for UNOCAL I graduated with a
masters from San Diego State University.
MR, 8RUBERT: My name is Duane Srubert, .....
MR. CHATTERTON: Thank you. Just a moment. Any
objections?
MR. JOHNSTON: I have no objection.
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MR. SMITH: No.
MR. CHATTERTON; All right. Very good. Ron,
we'll -- we'll sure recognize you as an expert witness in the
matters before us at this hearing. Thank you.
MR. GRUBERT: My name is Duane Grubert. I'm a
petroleum engineer for Union 0il Company. I've been working for
the company for seven years, working exclusively on the Cook
Inlet for about two and a half years. Prior to that my work
involved the oil fields of California involving primarily gravel
pack, sand control completions.
My education in the petroleum discipline was at Stanford
University. I received my bachelor of science degree there in
1983.
MR. CHATTERTON: Thank very much. And we will
accept you as an expert witness in the matters before us. You
may proceed.
MR. KIES: Recently with the drilling of Trading
Bay State number A-28 redrill from the Monopod Platform UNOCAL
drilling the Hemlock oil pool and set casing. And at that time,
because we had encountered the Hemlock oil pool in an up dip
position in the thrust -- subthrust fault block to the northeast
of the platform, it was decided to go ahead and extend the well
and examine and test the West Foreland Formation below the
Hemlock.
The West Foreland is unconformally -- rests on the
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duracic (ph) Talkeetna Formation and is disconformally overlain
by the Hemlock Formation. It's an interval in the .....
Exhibit Four is the type log from Trading Bay State A-28
redrill which shows the West Foreland Formation from 9079 to 9857
measured depth in the Trading Bay State A-28 redrill well.
This oil pool prior to this time has not been encountered
in any of the wells in Trading Bay Field either in the subthrust
block in which this well is located, or in the main producing
portion of the field called the two-A fault block. It's .....
Our purpose here today is to define this as an oil pool
for the purposes of commingling with the Hemlock Formation so
that we could take advantage of this newly discovered resource.
I'll just review quickly a little bit of the geology.
Exhibit One is a structure map of the subthrust block of the
Trading Bay Field. It's a compressional fault block between the
Trading Bay fault to the east -- excuse me, to the west, and the
Texaco fault to the east.
This compressional block is very steeply dipping. It has
dips from 30 to 65 degrees, and locally the beds are overturned
where they're in contact with -- with the Trading Bay fault. So
it's a very steep dipping fault block.
Our well, which I'll point out, was the first well to
come significantly up dip within the subthrust fault block. For
this reason, we decided to again extend into the West Foreland
and what we encountered was a section of West Foreland which
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looked prospective for oil production.
Exhibit Two is a cross section, A-A-prime through the
well, showing the general structural configuration. And as you
can see, it's a very steep easterly dip to this portion of the --
of the subthrust reservoir.
Exhibit Three is a stratigraphic cross section which ties
the A-28 redrill well to the TS four well to the north. I'll
point out the TS four. TS four is the well that indicated that
there was a number of sands below the Hemlock Formation which
could be productive if they were encountered far enough up dip.
From this information again it was decided that we should
penetrate the -- the Hemlock and -- and look for some Nest
Foreland reservoirs. And that's A-28 to the left.
Because of reservoir quality concerns and the somewhat
subjective call on if it was productive or not, we, of course,
put the well on test. And Duane can review a little bit about
those test results and describe the -- the production
characteristics that we have so far on the -- on the Nest
Foreland.
MR. GRUBERT: This well is very important to us
in that it is exploiting the West Foreland at Trading Bay Field
for the first time. And in terms of our desire to commingle the
zone with other zones, I think this is a classic example of where
commingling serves to allow greater production from the field.
After really an exhaustive effort to make the West
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Foreland productive, we've ended up with a 50-barrel per day
producer, which given the cost of drilling the well is not at all
economic to justify future development. However, in concert with
the Hemlock production that we anticipate is producible from this
same well bore, we can leave that 50 barrels per day on and allow
it to be produced.
The way we have to look at it at this point, since we
have limited data on the West Foreland producibility, is that we
cannot drill wells for the West Foreland alone; however, there
should be no reservoir problem with keeping these perforations
open when we go and take our Hemlock completion.
So this has been a relatively recent event for us, and
again we have about a 50-barrel oil per day producer here, and
anticipate to get significantly higher rates from the Hemlock.
But we are requesting to leave these perforations open to
commingle the two and we want to set this precedent for the
record to allow commingling of the West Foreland with the Hemlock
or with the other zones.
MR. CHATTERTON: What would be the areal extent
roughly between the -- of this accumulation between the Trading
Bay Fault and Texas -- Texaco Fault?
MR. KIES: Approximately, if you could look for
scales here, this is 250 feet, so the entire width of that block
is only 2,000 feet at its widest.
MR. CHATTERTON: And the areal extent of the
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indicated pool limits?
MR. GRUBERT: The green. The green.
MR. CHATTERTON: That's the green -- the green
line?
MR. KIES: Yes. Right. The indicated -- the
pool limits that we have delineated here are indicated in dark
green on the map.
MR. CHATTERTON: And -- and roughly how many
acres?
MR. KIES: Roughly 27- -- excuse me. The acreage
on that is roughly -- have to -, I have to refer .....
MR. GRUBERT: Maybe the oil in place number would
be more relevant. We -- we're figuring with the limited data we
have about .....
MR. CHATTERTON: No, I'd say .....
MR. KIES: He -- he needs f .....
MR. CHATTERTON: ..... not right now, .....
MR. GRUBERT: Okay.
MR. CHATTERTON: ..... that isn't more .....
MR. KIES: I just need the .....
MR. CHATTERTON: ..... relevant. I'll get to
that.
MR. GRUBERT: Okay.
MR. CHATTERTON: Don't try and guess how my brain
works.
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MR. GRUBERT: No, no.
MR. KIES: Jesus. What was that areal extent?
That's only the .....
MR. SRUBERT: You can back it out.
MR. KIES: Yeah, I can .....
MR. OHATTERTON: Well, .....
MR. KIES: ..... 40 acres?
MR. CHATTERTON: What's the size .....
UNIDENTIFIED: (Indiscernible)
MR. KIES: No, it's .....
MR. CHATTERTON: ..... of the section .....
MR. KIES: ..... bigger than that.
MR. CHATTERTON: ..... there? We can -- we can
guess if -- if you show me the outline of the section, .....
MR. KIES: Let me show you the outline there.
MR. CHATTERTON: ..... or the quarter section, I
can pretty well guess myself.
MR. KIES: This is one section, so it's
about .....
MR. CHATTERTON: Oh, it's one section. Okay.
MR. KIES: ..... it's about a quarter section.
MR. CHATTERTON: You're about 160 acres, yeah.
MR. KIES: Right.
MR. CHATTERTON: Okay. Fine. Is the -- about
the areal extent of this indicated pool. All right. Very, very
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good.
MR. KIES: Yeah.
MR. CHATTERTON: And under current .....
MR. KIES: We .....
MR. CHATTERTON: ..... Am I right, under current
regulations, why, you -- that would permit you to drill one well
to this pool, is that correct? 160-acre spacing for an oil -- ?
or is there something else that ..... ?
MR. WARTHEN: That's -- that's correct.
MR. KIES: That is correct, .....
MR. CHATTERTON: That is .....
MR. KIES: ..... under the -- under .....
MR. CHATTERTON: ..... correct, right.
MR. KIES: ..... the present pool rules.
MR. CHATTERTON: And you do not believe one well
will adequately drain this accumulation, is that right?
MR. KIES: That is correct. We feel given the
reservoir quality of the rocks, it will require a tighter spacing
than 160 acres to come -- come anywhere near draining .....
MR. CHATTERTON: Right.
MR. KIES: ..... the oil in place within this
block.
MR. CHATTERTON: Have you made an estimate of
that spacing? Of that density?
MR. KIE$: No, we haven't. And I think it has a
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lot to do with how you want to -- we have not made an estimate of
that .....
MR. CHATTERTON: Okay.
MR. KIES: ..... spacing, no.
MR. CHATTERTON: Have you made an estimate of the
acre feet?
MR. KIES: Yes, we have.
MR. CHATTERTON: Well, if -- if Duane's going to
touch on these, .....
MR. KIES: Um-hm.
MR. CHATTERTON: ..... well, we can wait for that
later on. Okay. Bob?
MR. KIES: That's .....
MR. WARTHEN: I think, Mr. Commissioner, that we
felt at the time that when we made this here discovery in the
West Foreland, that since this is a long narrow band so to speak
between the Monopod and platforms further to the northeast, it
would appear that two wells could drain this accumulation. I
don't know at this juncture whether we could drill those two
wells -- or one additional well from the Monopod or if we could
use the spur in a drilling capacity, since that platform has no
drilling capabilities right now. So we still are investigating
that possibility.
MR. CHATTERTON: Okay.
MR. WARTHEN: I think though initially we feel
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that two wells could drain this -- this feature in the West
Foreland.
MR. CHATTERTON: Now, I presume that in no way
could you develop this accumulation with two wells drilled solely
and completed in the -- in the -- this -- these oil -- these oil
bearing horizons, is that right?
MR. WARTHEN: That's correct. Not for this
entity by itself.
MR. CHATTERTON: So it's got to piggy-back on an
existing or yet to exist wells?
MR. WARTHEN: That's correct.
MR. CHATTERTON: Thank you. Any other questions?
MR. SMITH: Not now.
MR. CHATTERTON: Okay.
proceed, Duane, if you like?
MR. SRUBERT: Okay.
the most important thing here.
Not right now.
Thank you.
You may
I think we've hit on really
This feature herein the
subthrust block will never be fully or properly exploited,
because it is as unproductive as -- it -- it is as small as it is
and as unproductive as it is. And as you pointed out, the only
way you're going to see West Foreland production here will be in
conjunction with, for example, a Hemlock well where we just
deepen and take the West Foreland with it in a commingled
completion.
We've been bouncing around an oil in place estimate of
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about 30 million for the West Foreland, so it is a significant
accumulation in that respect. The areal extent is rather limited
compared to the other reservoirs in the other over-lying sands.
However, we would like to be able to develop as much of this as
we can. We know the resource is there, and unless commingling is
allowed, we would never drill a well to this asset. And unless
commingling is allowed, none of that oil will be produced.
MR. SMITH: And what was the oil number again?
The in-place?
recover?
MR. GRUBERT:
MR. SMITH:
Thirty million barrels.
Thirty million?
MR. GRUBERT: As a preliminary number.
MR. SMITH: And how much would you expect to
MR. GRUBERT: It would really depend on the
Hemlock development, and it's too early to get a good feel for
that. The quality of the rock here is poor, and perhaps a 5~
recovery estimate wouldn't be unreasonably low, if you were going
to try just to get this horizon developed. However, economically
you would never do that.
For this particular portion of the field, I foresee maybe
two, possibly three eventual Hemlock wells that could also
exploit the West Foreland. And based on the rates we've seen,
we're talking in the neighborhood, unless we see something
better, of about 150,000 barrels of West Foreland oil per well.
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So on the order of half a million barrels of oil is -- is really
the issue that will be exploited if we can commingle, and it will
just be left behind if we cannot.
MR. SMITH: Okay. And would you propose to.do
any testing between the zones here at all on such a well?
MR. GRUBERT: On the well that we've already
drilled to this zone, we have a good figure for production from
the West Foreland alone, and on this particular well, I don't see
foresee that we would do a lot of diagnostic testing in the
first, let's say, year of production. But if a well in the
future was to be produced with the original intent of having both
zones completed, again it would be as the other commingled wells
are, prudent on our part to production log the well on about an
annual basis, just to clarify where the production really is
coming from.
The other thing that is particularly convenient with a
West Foreland commingled completion is that we foresee this will
be the bottom set of perforations in any well. There's nothing
below us here, and in the event that the West Foreland does water
out or does create any problems, it is easy to abandon those
perforations just by spotting sand or cement; whereas in a
different set of commingled perforations, for example, a D/West
Foreland, the upper set of perforations are often difficult and
expensive to eliminate. Here the West Foreland is really a
convenient set of perforations to be able to exclude in the
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future if you have to.
reservoir rock?
MR. SMITH: Okay.
MR. CHATTERTON: Dave?
MR. JOHNSTON: Could you briefly describe the
MR. KIES: In -- the -- the West Foreland is a
poorly sorted, volcanic wacky at -- at this location, which is
kind of in keeping with the -- the general reservoir quality that
was seen throughout the Cook Inlet. It's large -- the large
amount of clay matrix material is responsible for the -- the low
porosity which we see in this well, and a number of wells in the
immediate area.
MR. JOHNSTON: You said -- in -- earlier you said
this was steeply dipping and in some places overturned?
MR. KIES: Yes. When we looked at the dip meter
data, actually the FMS data on the A-28, we discovered that
there's a small amount of over-turning locally on the down-thrown
side of the Trading Bay Fault. It -- we weren't able to see this
over-turning on the -- the Hemlock or the West Foreland, but
we've seen it on the shallower zones, the D and the E zones above
the Hemlock. This is because we pierced the Trading Bay Fault,
and we went from the -- the up-thrown side down into the -- the D
and E zones, and it's just below this that -- it's just below the
Trading Bay Fault that we see the over-turning.
It's just -- again it stresses the -- the high degree and
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-- of steep dips and structural complexity which characterize
this block, to make it difficult to -- it's very important that
we use very few well bores as -- as few well bores as possible to
deplete the block, because it is so narrow and elongated.
MR. JOHNSTON: The -- the fault that cuts the
accumulation at a 45 degree angle about mid way up through it,
what kind of throw do you have on that?
MR. KIES: We are missing about 450 feet of
section, so we interpret that to have around 400 feet of -- of
throw. It could be slightly greater, be- -- along the course of
its trajectory, but we feel it's a -- it's a reasonable -- a
reasonable estimate.
Because of the steep nature of the dips in the subthrust
block, we rely entirely on dip meter data, the old well data, to
-- as a guide. Geophysical information is of limited use. So
it's -- it's difficult to delineate it other than where we have
fault -- or well control.
MR. JOHNSTON: And the accumulation extends
across that fault so it's not sealing?
MR. KIES: We at the present time feel it is not
a sealing fault.
UNIDENTIFIED:
MR. JOHNSTON:
MR. CHATTERTON:
That's right.
I have no further questions.
Not quite two years ago in a --
in a matter of commingling, downhole commingling, the Commission
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concluded from the testimony that was given at that hearing, that
the allocation of produced fluids to their respective pools is no
longer of any benefit to reservoir management, ultimate recovery,
or the prevention of waste. And, of course, this was referring
to the Trading Bay Field, and -- and at that time it was not --
did not have the -- the sands below the Hemlock in mind.
Would -- would you say that that statement still is valid
even after we've seen this -- these sands below the Hemlock?
MR. GRUBERT: Yes, this really hasn't changed
anything, and that comment is very important, that as we saw at
the previous hearing today regarding the A zone, when our
discussion there started .....
MR. CHATTERTON: Regarding what?
MR. GRUBERT: Remember the A zone ..... ?
MR. CHATTERTON: No, I don't know anything about
MR. GRUBERT:
the A zone.
different direction.
Okay. I'll -- I'll take this
In discussion of the pools in the past two or three
years, the re-interpretation of geologic data and the acquisition
of new geophysical data has gotten the picture clearer that we do
have extensive faulting, and that the pools are not as relevant
to reservoir management as we had previously thought. We
continue to in-house think of the reservoir in terms of pools.
However, the actual end recovery from the field will not be
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changed by regarding them as pools or not. It's more of an
accounting process now than it is a reservoir management tool in
that the pools have become very unimportant.
MR. CHATTERTON: Yeah. Is that because of
different ownerships in the pools or ..... ?
MR. GRUBERT: No, the ownerships are consistent
throughout .....
MR. CHATTERTON: All the same?
MR. GRUBERT: ..... the whole field.
MR. CHATTERTON: Okay.
MR. GRUBERT: Luckily. And it's more a matter
that we are now recognizing that there is juxtaposition of some
sands of a given pool against sands in a different pool, and that
basically the pressures throughout the field move in concert in
their decline.
MR. CHATTERTON: Right. We -- we heard -- we've
heard in -- in another matter, why, we've heard testimony given,
it was not -- it was not -- it was not under oath, but that
within the Hemlock zone, for example, why, cross flow between
beds could occur. I presume you're going to have a different
pressure existing in some of these sands from say what the over-
lying Hemlock or middle Kenai. Do you expect that if a well were
shut in, for example, or didn't have a high draw-down, that you
would have cross flow?
MR. GRUBERT: At the Trading Bay Field, that's a
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relatively minimal consideration, because we do not have a very
efficient water-flood system in that the water going into a given
sand communicates to many different sands. And in a situation
such as you're describing, if you truly do have segregation of a
sand from another sand, that would be a significant problem in
some cases.
But here, since everything is basically at -- in the same
system in that pressures can affect different sands, even though
they were intended for one sand only, basically the whole field
moves in -- in a pressurewise (sic) it moves together, and that
we would not expect significant cross flow here.
MR. GHATTERTON: If cross flow did occur, would
you expect it to minimize the ultimate recovery?
MR. GRUBERT: The only way that cross flow could
really significantly reduce recovery would be if you had a very
active emphasis on water flooding a given sand, and then
subsequently started to develop some other sand, so that one body
could be mainly water saturated due to your injection, and then
you're exposing the oil to that water. That would be a negative
situation.
However, at the Trading Bay Field, we've worked,
especially in the last three years, to concurrently develop all
of the zones for this reason, and that the entire field zonewise
should die together rather than complete development of a given
zone and then begin another horizon. And that's a large factor
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in that is to avoid that situation.
MR. CHATTERTON: So actually, why, opening these
sands below the Hemlock to production, why, probably is a good
move, because you let it .....
MR. GRUBERT: That's true.
MR. CHATTERTON: ..... pressures decline more
uniformly.
MR. GRUBERT: That's true. IF you were to
complete just the Hemlock here and then ten years down the road
open the West Foreland, which it then at that point should have a
higher pressure, you might run into reservoir trouble with cross
flow.
MR. CHATTERTON: Thank you. Your application
mentioned something about establishing pool rules for what I
guess you were going to define as the West Forelands Pool, and --
and you -- for -- and you wanted those established for basically
I guess to accomplish commingling.
What about -- it's probably here, but I don't see it --
what -- what -- did you need also pool rules to establish spacing
to ..... ?
MR. GRUBERT: We would prefer to see pool rules
allow unlimited spacing in the West Foreland right away, even
though we do not have any current development going on, with the
exception of this one well.
So the -- the critical problem for us right now in terms
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of timing is the commingling issue, and we definitely want to
have that incorporated into any rule about the West Foreland.
The spacing issue, it would be to our advantage to handle
that now rather than to have to pursue it later.
MR. CHATTERTON: Okay.
MR. SRUBERT: We would like that to occur.
MR. CHATTERTON: If the spacing, well spacing and
commingling can be satisfactorily addressed by a means other than
establishing pool rules, do you still need the designation of
West Forelands Pool?
MR. SRUBERT: No. We would continue to use that
designation in our shop, .....
MR. CHATTERTON: All right.
MR. SRUBERT: ..... but we would not need it.
MR. CHATTERTON: All right. The sands beneath
the Hemlock zone in the Trading Bay field appear to be equivalent
to -- to those sands in the McArthur River field known as the --
and defined as the West Foreland sands, is that correct?
MR. SRUBERT: Yes.
MR. WARTHEN: Correct.
MR. CHATTERTON: If we were to issue an order
here that provided for the commingling of production from bearing
sands occurring in the Trading Bay field beneath the Hemlock
zone, and the only spacing requirement would be to stay at least
500 feet from the boundary of the unit, does that satisfy all of
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your needs?
MR. KIES: Yes, it would. Yeah, it does.
MR. WARTHEN: Mr. Chairman, was that 500 feet
from the unit or 500 feet and/or 500 feet from different
ownership? Well, regardless, we're -- that would be okay. That
would be acceptable.
MR. CHATTERTON: No, I think the unit -- the unit
agreement governs pretty much -- I don't know whether you'll have
to establish a participating area for this or .....
MR. WARTHEN: Well, we have no established unit
here, so .....
MR. CHATTERTON: Oh, you don't have .....
MR. WARTHEN: No.
MR. CHATTERTON: ..... an established ..... ?
MR. WARTHEN: Not at Trading Bay field.
But .....
MR. CHATTERTON: Then you'd .....
MR. WARTHEN: ..... there is .....
MR. CHATTERTON: ..... better not let .....
MR. WARTHEN: ..... a unit .....
MR. CHATTERTON: ..... me get away with your
boundary. You'd better say property.
MR. WARTHEN: Well, I was assuming the unit
boundary to be the unit at North Trading Bay unit to the east. I
thought perhaps that was what you were referencing to. And
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property ownership is owned by the same two parties well outside
of this here accumulation.
MR. CHATTERTON: Oh, I -- I know. Yeah. Well,
from the lease boundary?
MR. WARTHEN: That would be acceptable.
MR. CHATTERTON: Would the same -- if I used that
word singular, "lease," does that do it, or -- or do you need
"leases"? I think you do, don't you?
MR. WARTHEN: I think we .....
MR. GRUBERT: Leases, we .....
MR. WARTHEN: ..... need "leases".
MR. GRUBERT: ..... need "leases". Yeah.
MR. CHATTERTON: Yeah. Right.
MR. GRUBERT: We need "leases".
MR. WARTHEN: Right.
MR. CHATTERTON: Okay. We can figure some way
around that, can't we?
MR. SMITH: I think so.
MR. CHATTERTON: It's not Germane to this
hearing, but this is an approach that was proposed on another
matter this morning which seemed to meet with your approval.
MR. WARTHEN: That's correct, sir.
MR. CHATTERTON: Okay. Anything else? Anybody
Got any more questions?
MR. SMITH: No.
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MR. CHATTERTON: Anybody got any more to offer?
MR. WARTHEN: For the record, Mr. Chairman, we do
have a report here with the appropriate exhibits that were on
display during the hearing today, and a text as well as a cover
letter for your perusal. And I will provide those to
Mr. Douglass.
MR. CHATTERTON: Thank you, Bob, very much.
Appreciate it.
MR. WARTHEN: We have no further testimony, sir.
MR. KIES: No further testimony.
MR. CHATTERTON: Anyone from the staff have --
have any comments?
MR. CRANDALL: The thing that's interesting to me
about this is that over at North Trading Bay Unit, the -- the
West Foreland over there is pretty fairly over-pressured. You
don't see anything like that over in here now?
MR. KIES: We thought we did initially, because
we had so much trouble drilling through the West Foreland. It
turns out that there's a fracture system immediately above the
West Foreland in those clays before you get into the .....
MR. CRANDALL: Right.
MR. KIES: ..... the Hemlock, so .....
MR. CRANDALL: Are (ph) you washed out from that?
MR. KIES: Well, our drilling problems were
primarily related to the -- the intense fracturing that occurred
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in that clay stones.
MR. CRANDALL: That's tough.
MR. KIES: So we don't seem to have the same
over-pressuring that we did at North Trading Bay field.
MR. CRANDALL: This would be a good unit to drill
a horizontal well, or at least a well parallel to the bedding
plane then?
MR. WARTHEN: They can .....
MR. CRANDALL: It's a good -- it's a good heavy
crack (ph) in West Foreland.
MR. KIES: That's -- that's why as -- as we go
into this now that we know it's there, and we can tie it with the
Hemlock production, we can design well pores that have a tail end
that -- that if anything would be having a down the bedding plane
orientation to accommodate that kind of completion.
MR. CRANDALL: But you were able to establish
that the -- the gradient in the West Forelands is something
around .45 .....
MR. GRUBERT: Yes.
MR. CRANDALL:
MR. GRUBERT:
..... (indiscernible)?
Um-hm.
MR. KIES: Yes.
MR. CHATTERTON: If there's nothing else to come
before us, why thank you, gentlemen, very, very much, and we'll
ad3ourn this hearing on -- at approximately 2:45 p.m. Thanks a
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lot.
MR.
WARTHEN: Thank you.
GRUBERT: Thank you.
(END OF PROCEEDINGS)
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28
C E R T I F I C A T E
UNITED STATES OF AMERICA )
) ss
STATE OF ALASKA )
I, Meredith L. Downing, Notary Public in and for the
State of Alaska, residing at Anchorage, Alaska, and Electronic
Reporter for R & R Court Reporters, Inc., do hereby certify:
THAT the annexed and foregoing Public Hearing before the
Alaska Oil and Gas Conservation Commission was taken before me on
the 23rd day of April, 1990, commencing at the hour of 2:00
o'clock p.m., at the offices of the Alaska Oil and Gas
Conservation Commission, 3001 Porcupine Drive, Anchorage, Alaska,
pursuant to Notice.
THAT the witnesses, before examination, were duly sworn
to testify to the truth, the whole truth, and nothing but the
truth;
THAT this Transcript of Public Hearing, as heretofore
annexed, is a true and correct transcription of the testimony
given at said Public Hearing, taken by me and thereafter
transcribed by me;
THAT the original of the transcript has been lodged, as
required, with the Alaska Oil and Gas Conservation Commission,
3001 Porcupine Drive, Anchorage, Alaska.
THAT I am not a relative, employee or attorney of any of
the parties, nor am I financially interested in this action.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed my seal this 15th day of May, 1990.
Not~ ~ubiic in an~--f~aska
My Commission Expires: .. 5/3/9.4
SEAL
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Unocal Oil & Ga~( sion
Unocal Corporatioh
P.O. Box 190247
Anchorage, Alaska 99519-0247
Telephone (907) 276-7600
UNO I L
April 23, 1990
Robert T. Anderson
Manager, Lands
Alaska Region
Mr. Chat Chatterton
Alaska Oil & Gas Conservation Commission
3001 Porcupine Drive
Anchorage, AK 99501-3192
TRADING BAY FIELD
State of Alaska
Application for Commingling Order
for the West Foreland Pool
Dear Mr. Chatterton:
Union Oil Company of California (Unocal), as Operator of the Trading Bay Unit, and on
behalf of the Working Interest Owners, requests an order to establish the commingling of
production of those oil bearing sands which underlie the Trading Bay Field; Hemlock Oil
Pool with production from other defined oil pools in the Field.
The West Foreland Pool Definition'
From 9079' to 9857' (drilled depth)
Please find attached an engineering and geologic report that provides supporting
information for the commingling of the West Foreland Pool with other zones in the Trading
Bay Field. It is requested that the attachments hereto be held confidential. Personnel
from Unocal and Marathon, as Operator and sub-Operator respectively in the Trading Bay
Unit, are available to meet with you concerning any questions you may have or additional
data you may require.
Pursuant to the aforementioned commingling of the West Foreland Pool with other zones,
we respectfully request administrative approval to commingle this pool as defined.
RAP:rms
Attachment
Very truly yo~qrs,
,:;;',''''
Robert A. Province
Landman
R"ECEI'VED
EXHIBIT A
GEOLOGIC AND ENGINEERING REPORT
The stratigraphy of the Trading Bay Field area is comprised of several hundred
feet of Recent and Quaternary fluvio-glacial gravels and clays that are
underlain by 7000'-10,000' of nonmarine Tertiary sediments. These Tertiary
sediments, which belong to the Kenai Group and West Foreland Formation are
comprised of often regionally discontinuous units of sandstone, conglomerate,
coal, siltstone, and claystone. Unconformably, underlying the Tertiary
sediments, is an unknown thickness of Lower Ourassic Talkeetna Formation
volcanics and volcaniclastics.
The West Foreland 0il Pool of the West Foreland Formation, Eocene in age,
occurs unconformably below the Hemlock Oil Pool. The West Foreland Oil Pool
is composed of clayey and silty sands, pebbly sands, and conglomerate,
interbedded with siltstone and minor coals. This unit is characteristically
tuffaceous. The sands vary in continuity through the structure due to
changing lithology and pinchout. Exhibit IV, the type log, and Exhibit III, a
stratigraphic section, show the lithologic variability throughout the unit.
The structure of the Trading Bay Field area is characterized by east-west
compression, north-south extension, and right lateral strike-slip faulting.
Two major near-vertical strike-slip faults cross the mapped area from
south-southwest to north-northeast. The most documented of these is the
Trading Bay Fault, although it is difficult to determine the extent of lateral
movement. The sense of movement ls belleved to be rlght lateral, largely
based on theoretical rock mechanics, considering the maxlmum compressional
direction appears to be east-west. Also, correlations across the Tradlng Bay
Fault from Trading Bay Field to the Northwest Feature of McArthur Rlver Field
to the south are often better than correlations straight across the fault.
This also supports right lateral movement.
In the Trading Bay Field there is a high-angle reverse component of motion to
the Trading Bay Fault that is probably more apparent movement than actual and
is due to juxtaposition of the Trading Bay anticline next to a structural low
on the east side of the fault. Consequently, the fault has often been
referred to as a thrust fault. To the north near the Spurr Platform, the
reverse sense of movement diminishes to nearly zero, and actually changes to
normal throw in the upper part of the section. To the south on the Northwest
Feature of McArthur River Field the throw is about half that seen in the
Trading Bay Field area.
The Trading Bay Subthrust Block is a wedge-shaped, proven-productive fault
block situated beneath and east of the Trading Bay Fault and on the upthrown
(west) side of the near-vertical Texaco Fault (Exhibits I and II). Both the
Trading Bay and Texaco Faults are high-angle, up to the west reverse faults,
with approximately 1000'-2400' of vertical uplift of the Trading Bay Fault and
200'-800' of vertical uplift on the Texaco Fault. The boundaries of the
Subthrust Fault Block are controlled by fault plane maps of the Trading Bay
and Texaco Faults. Numerous cross faults exist in the block.
.
Dips in the Trading Bay Subthrust Fault Block range from 30 to 65 degrees to
the east and southeast, as interpreted from dipmeter dips, Formation
Microscanner (FNS), and structural mapping. This steep easterly to
southeasterly dip forms the south boundary of the Subthrust Block oil
accumulations.
The A-28RD well was the first well to establish oil production in the Nest
Foreland in Trading Bay Field. The overall producing interval in the Nest
Foreland in this well is 9392' MD to 9668' MD.
ENGINEERING
The West Foreland Zone at the Trading Bay Field has been put on production in
A-28RD. This is the first time the formation has been produced in the field
with the exception of DSTs performed during early development.
This initial completion will most likely yield additional West Foreland
development. The zone has never been defined in the Trading Bay Field, It is
requested that no limitation be placed on well spacing for this zone, and that
commingling with any other productive zone be allowed in order to maximize oil
recovery and prolong the productive life of the field.
Although little data exists relative to long term performance of the Nest
Foreland, it is clear that the zone is not overpressured, and that no
adversely high gas ratios exist in the A-28RD wellbore. Thus, no problems
with commingling should be experienced.
It is proposed to allow the A and West Foreland Zones to be commingled with
oil production from any other zone on the Monopod at Trading Bay Field. This
circumstance is already in effect for the B, C, D, E and Hemlock Zones at
Trading Bay Field.
Given that:
1. Trading Bay Field is in a late stage of development.
2. All zones still have development potential.
Flexibility of well completions must be afforded to maximize longterm
well utility.
4. Investment must be minimized to continue development of the Trading
Bay Field Monopod Platform.
Ownership of produced oil and gas in all pools on all subject acreage
will not be affected by commingling production.
It appears that commingled oil production would increase ultimate field
recovery.
1. Commingled production extends expected life and usefulness of
producers by:
e
a. eliminating the risk of losing one production string for
mechanical reasons in a dual string noncommingled completion;
b. allowing through-tubing profile modifications and stimulation of
all zones completed with a single string;
c. allowing for coiled tubing cleanouts of all intervals completed
with a single string;
d. gaining these benefits without being forced to drill two single
string producers; and
e. eliminating abandonment of productive sands during well
recompletions when shifting emphasis to a new zone.
2. A single string completion allows for wireline production profiles to
be run across all zones:
a. estimates of production volume breakdowns for individual sands
in multiple zones is no less accurate in a commingled producer
than would be similar estimates for a single string zone
producer.
Gas lifting a single tubing string vs. two strings should increase
production rates by allowing optimization of gas lift valve settings.
Summary of Benefits
With single string commingled zone completions:
- No compromise would be made as to data on individual sand production.
Well life and thus ultimate field recovery would be increased by
eliminating potential for future mechanical problems.
Existing productive intervals would not have to be permanently
abandoned when new zones are added.
Remedial well work is afforded to all subject intervals, thus
increasing well life and ultimate recovery.
Lowered investment allows marginal projects to be implemented and the
recovery of otherwise excluded reserves.
Increased well life and recovery extends the viable life of the
Monopod, increasing the chance for new development to take place.
Ownership interests for the subject property will not be affected in
any case by commingling.
5 /-'r =~ ~-7'-
/I
Notice of Public Hearing
STATE OF ALASKA
Alaska Oil and Gas Conservation Commission
Re: UNOCAL application to commingle production of those oil
bearing sands which underlie the Trading Bay Field, Hemlock
Oil Pool.
UNOCAL in correspondence dated March 21, 1990 has applied
for an order allowing commingled production of those oil bearing
sands whi.ch underlie the Trading Bay Field, Hemlock Oil Pool with
production from other defined oil pools in the field.
A hearing on the matter will be held at the Alaska Oil and
Gas Conservation Commission, 3001 Porcupine Drive, Anchorage,
Alaska 99501, at 2:00 pm on April 23, 1990 in conformance with
AS 31.05.100(a).
Lonnie C. Smith
Commi s s ioner
Alaska Oil & Gas Conservation Commission
Published March 23, 1990
Robert T. Anderson
Manager, Lands
Alaska Region
Unocal 011 & Ga~ ,sion
Unocal Corporatior,'
P.O. Box 190247
Anchorage, Alaska 99519-0247
Telephone (907) 276-7600
UNOCAL
March 21, 1990
Alaska Oil and Gas
Conservation Commission
3001 Porcupine Drive
Anchorage, AK 99501
Attn: Chat Chatterton
Dea.r Mr..Chatterton:
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TRADING BAY FIELD
State of Alaska
Application for the Establishment
of Pool Rules and Commingling
Order for the West Foreland Pool
Union Oil Company of California hereby makes application for the
establishment of pool rules and spacing order for the West Foreland
Pool, Trading Bay Field.
An order for the commingling of the West Foreland Pool with other
zones in the Trading Bay Field will increase ultimate recovery
rates, thereby extending the economic unit of the Field without
sacrificing data quality, operational safety or environmental
goals.
Your favorable consideration of this application is respectfully
requested.
Union will submit its recommendation for pool rules in the near
future prior to the Public Hearing.
Very truly yours,
Robert A. Province
Landman
RAP:rms