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Home My WebLink AboutCO 274Conservation 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. C~-'~/r_ Conservation Order Category Identifier Organizing RESCAN [] Color items: [] Grayscale items: [] Poor Quality Originals: [] Other: NOTES: DIGITAL DATA OVERSIZED (Scannable with lame plotter/scanner) [] Diskettes, No. [] Other, No/Type [] Other items OVERSIZED (Not suitable for plotter/scanner, may work with 'log' scanner) ~arious kinds [] Other BY; ,~' MARIA Scanning Preparation TOTAL PAGES Production Scanning Stage I PAGE COUNT FROM SCANNED DOCUMENT: ~----~" "~ PAGE COUNT MATCHES NUMBER IN SCANNING PREPARATION: YES NO Stage 2 IF NO IN STAGE 1, PAGE(S) DISCREPANCIES WERE FOUND: __ YES __ NO MARIA . ' DATE: '7~/-~.-~ / (SCANNING IS COMPLETE AT THIS POINT UNLESS SPECIAL ATTENTION IS REQUIRED ON AN INDIVIDUAL PAGE BASIS DUE TO QUALFrY, GRAYSCALE OR COLOR IMAGES) General Notes or Comments about this Document: 5/21/03 ConservOrdCvrPg.wpd • INDEX CONSERVATION ORDER NO. 274 Walkpa Field Hearing 1. January 18, 1991 North Slope Borough request for hearing Endicott Field 2. February 1, 1991 Notice of Public Hearing 3. March 7, 1991 Exhibit Map 1, 2, 3, 4, 5, 6, 7, 8, 9 4. March 7, 1991 Transcript of Hearing 5. October 22, 2010 North Slope Borough Application for Pool Rules Amendment CONSERVATION ORDER NO. 274 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage Alaska 99501-3192 Re: THE APPLICATION OF THE ) NORTH SLOPE BOROUGH ) to present testimony for ) classification of a gas pool and ) prescribing pool rules for ) development in the Walakpa area. ) Conservation Order No. 274 Walakpa Field Walakpa Gas Pool April 12, 1991 IT APPEARING THAT: I · By letter dated January 18, 1991 the North Slope Borough requested a public hearing to present testimony for establishing pool rules for development in the Walakpa area. 2, Notice of public hearing to be held on March 7, 1991 was published in the Anchorage Daily News and the Anchorage Times on February 1, 1991. · A hearing covering the matter of the applicant's request was held in conformance with 20 AAC 25.540 at the office of the Commission, 3001 Porcupine Drive, Anchorage, Alaska 99501 at 9:00 a.m. March 7, 1991. FINDINGS: 1. A Lower Cretaceous sandstone, commonly referred to as the Walakpa Sandstone, has been shown to contain hydrocarbon gas in an area 19 miles southwest of Barrow in the Walakpa No. I and No. 2 exploratory wells in T20N, R19W, UM. 2. The vertical limits of the gas accumulation may be defined in the Walakpa No. 3 well which appears to include a typical and representative section of the Walakpa Sandstone. Conservation Orde'~-No. 274 April 12, 1991 Page 2 3. The areal extent of the Walakpa gas accumulation has not been established. Evidence suggests that a combination of stratigraphic and structural elements form the trapping mechanism. Additional drilling will be necessary to delineate the areal extent of the field. 4. The proposed development area for the Walakpa gas accumulation is a portion of lands with subsurface rights conveyed to the North Slope Borough from the federal government in 1984. The Barrow Gas Fields Transfer Act conveyed the subsurface rights for all gas to the North Slope Borough and for all liquid hydrocarbons to the Arctic Slope Regional Corporation in this area. 5. The closest change of subsurface ownership is approximately one mile from the southern boundary of the Walakpa development area. 6. The objective of this development is to generate another source of gas for the community of Barrow. The pools of the Barrow Gas Field, as currently developed, have deliverability to meet peak demand with no margin for downtime. 7. A development of four to nine wells is expected to provide an average supply of 4MMCF/day to meet present and future deliverability of gas for the Barrow area. 8. Surface features in the Walakpa development area greatly constrain the locations available for well sites. 9. The operator proposes to develop on 640-acre spacing if proper well sites are available. 10. Barrow Gas Field development wells equipped with tubing and packer have experienced production problems caused by hydrate formation. Similar production problems are expected in the Walakpa wells if produced through tubing without communication between the tubing/casing annulus. l l. Packerless completions, which allow production up the tubing/casing annulus, have been used in Barrow gas wells throughout their production life. Conservation Ordei- No. 274 April 12, 1991 Page 3 12. Annular production discourages hydrate formation by reducing flow velocity (as compared to tubing production) for similar volumes of gas. 13. Annular production simplifies removal of well liquids which may collect in the wellbore and adversely affect production. 14. Excessive hydrostatic pressure on the gas sands during casing/cementing operation may increase formation damage. 15. Initial reservoir pressure measured at Walakpa No. 2 was 1069 psi at 2606 feet true vertical depth. 16. Gas from the Walakpa Sandstone was tested in the Walakpa No. 1 and Walakpa No. 2 wells. Rates of 400 MCF/D and 2.2 MMCF/D were tested respectively. 17. The operator proposes to equip each well with an automatic surface shut-in valve for safety and operational reasons. 18. Ice-bearing permafrost depth is approximately 900 feet in the Walakpa area. 19. The characteristic lithology in the proposed development area between the base of the ice-bearing permafrost and the top of the Walakpa Sandstone is primarily siltstone and shale with minor discontinuous sandstones. 20. There is no evidence that an underground source of drinking water exists within the Walakpa development area. CONCLUSIONS: I · It is appropriate to define a gas pool and establish pool rules for development in the Walakpa area. 2. Drilling units of less than 640-acres in the development area will provide flexibility for well site locations. Conservation Ordetr No. 274 April 12, 1991 Page 4 e e e Installation of production tubing without a packer to allow annular production of gas from this pool is appropriate. For proper anchorage, surface casing should be set and cemented at least 200 feet below the base of ice-bearing permafrost. Installation of automatic surface safety valves is appropriate to prevent uncontrolled flow of gas. NOW, THEREFORE, IT IS ORDERED THAT the rules hereinafter set forth apply to the following described area referred to in this Order as the affected area: UMIAT MERIDIAN T20N R20W T20N R19W Sections 11, 12, 13, 14, 23, 24, 25, 26, 35, 36. Sections 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36. RULE 1 FIELD AND POOL NAME The field is named the Walakpa Gas Field. The hydrocarbons contained within the Lower Cretaceous Walakpa Sandstone constitute a single reservoir named the Walakpa Gas Pool. RULE 2 POOL DEFINITION The Walakpa Gas Pool is defined as the accumulation of gas which is common to and correlates with the accumulation found in the Walakpa No. 3 well between the measured depths of 2367 and 2396 feet. RULE 3 WELL SPACING a) Nominal 160-acre drilling units are established for the pool within the affected area. Each drilling unit shall conform to governmental Conservation Order No. 274 April 12, 1991 Page 5 b) quarter sections. No more than one well may be drilled into and produced from each drilling unit. The pool may not be opened in a well closer than 1000 feet to any other well opened in the pool. The pool shall not be opened in any well closer than 1500 feet to the exterior boundary of the affected area or closer than 1500 feet from a boundary where ownership changes. Upon application by the operator accompanied by substantiating data based on engineering and geological principles, the Commission may administratively approve modifications to well spacing. RULE 4 CASING AND CEMENTING REQUIREMENTS a) Surface casing to provide for proper anchorage to the surrounding formation, to prevent uncontrolled fluid flow, and to protect the well from the effects of permafrost thaw-subsidence or freeze-back loadings, shall be set at least 200 measured feet below the base of the ice-bearing permafrost. Sufficient cement shall be used to fill the annulus behind the casing to the surface. b) Alternate means for maintaining the integrity of the well from the effects of permafrost thaw-subsidence and freeze-back may be administratively approved by the Commission upon application and presentation of data which show the alternatives are appropriate, based upon accepted engineering principles. RULE 5 COMPLETION PRACTICE Wells may be completed without a packer. The Commission may administratively approve alternate completion methods where appropriate. RULE 6 GAS VENTING OR FLARING a) The venting or flaring of gas is prohibited except as may be authorized by the Commission for facility safety, operational necessity, and in cases of emergency. b) As an operational necessity, bottom-hole accumulated liquids may be purged from wells by periodic tubing blowdowns of brief duration. Conservation Order No. 274 April 12, 1991 Page 6 The estimated blowdown volume will be recorded and reported monthly as required under 20 AAC 25.235(b). RULE 7 AUTOMATED SHUT-IN EQUIPMENT All wells which are capable of producing hydrocarbons must be equipped with a Commission approved fail-safe automatic surface safety valve (SSV) system capable of preventing an uncontrolled flow. DONE at Anchorage, Alaska and dated April 12, 1991 David W' J~ns~on, Chairman Conservation Alaska ~s Commission Lonme C. Sm~th~omm~ss~oner Alaska Oil and Gas Conservation Commission Russell A. Douglass, Coihmissioner Alaska Oil and Gas Conservation Commission • • O 6 SEAN PARNELL, GOVERNOR ALASKA OIL A" GAS 333 W. 7th AVENUE, SUITE 100 CONSERVATION COMMISSION ANCHORAGE, ALASKA 99501 -3539 PHONE (907) 279 -1433 FAX (907) 276 -7542 ADMINISTRATIVE APPROVAL Conservation Order 274.001 Mr. Matthew Dunn, Director Dept. of Capital Improvement Program Management North Slope Borough P.O. Box 3507 Barrow, AK 99723 RE: Conservation Order No. 274 Request for Administrative Approval Rule 3: Well Spacing Walakpa Field Walakpa Gas Pool Dear Mr. Dunn: In accordance with Rule 3 of Conservation Order No. 274.000 (CO 274), the Alaska Oil and Gas Conservation Commission (Commission) hereby GRANTS the North Slope Borough (NSB)'s request for administrative approval revising well spacing requirements for the Walakpa Gas Pool of the Walakpa Field. Rule 3 of CO 274 establishes nominal 160 -acre drilling units for the Walakpa Gas Pool, and it requires that each drilling unit conform to a governmental quarter section. In addition, Rule 3 specifies: (1) no more than one well per drilling unit, (2) a distance of at least 1000 feet between wells open to the pool, and (3) a 1500 -foot setback from the external boundary of the Affected Area. Rule 3(b) of CO 274 allows administrative approval for modifications to well spacing. CO 274 was issued by the Commission April 12, 1991. At that time, nearly all production wells were vertical or moderately inclined. Improvements in drilling and completion technology have since made horizontal, extended -reach production wells commonplace. A single, long horizontal well is now drilled in lieu of several older - style, vertical or inclined production wells. These horizontal wells are placed and oriented in accordance with reservoir and fault trends, rather than governmental section lines, rendering older spacing rules, such as Rule 3, obsolete. NOW, THEREFORE, IT IS ORDERED THAT the rule governing production operations in the Barrow Field as described in Rule 3 of CO 274 is revised as follows: CO 274.001 • November 19, 2010 Page 2 of 2 Rule 3 Well Spacing Within the Affected Area established by CO 274, there shall be no restrictions as to well spacing except that no pay shall be opened in a well within 1500 feet of an external property line where the owners and landowners are not the same on both sides of the line. The Commission may administratively approve modifications to well spacing as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. DONE at Ancho e, Alaska and date 19, 2010. Jo o an ., ��`-' Cathy P Foerster in oner T +� �� ''� Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The Commission shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the Commission denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the Commission grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the Commission, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision on reconsideration. As provided in AS 31.05.080(b), "ftlhe questions reviewed on appeal are limited to the questions presented to the Commission by the application for reconsideration." In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. • • Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Friday, November 19, 2010 11:17 AM To: foms2 mtaonline.net ); (michael.j.nelson@conocophillips.com (Von. L. Hutchins@conocophillips.com); AKDCWelllntegrityCoordinator; Alan Dennis; alaska @petrocalc.com; Anna Raff; Barbara F Fullmer; bbritch; Becky Bohrer; Bill Penrose; Bill Walker; Bowen Roberts; Brad McKim; Brady, Jerry L; Brandon Gagnon; Brandow, Cande (ASRC Energy Services); Brian Gillespie; Brian Havelock; Bruce Webb; carol smyth; caunderwood; Chris Gay; Cliff Posey; Crandall, Krissell; dapa; Daryl J. Kleppin; Dave Matthews; David Boelens; David House; David Stein reaber; ddonkel cfl.rr.com; Deborah J. Jones; Delbrid e, Rena E (LAA); Dennis 9 @ 9 Steffy; Elowe, Kristin; eyancy; Francis S. Sommer; Fred Steece; Garland Robinson; Gary Laughlin; Gary Rogers; Gary Schultz; ghammons; Gordon Pospisil; Gorney, David L.; Greg Duggin; Gregg Nady; gspfoff; Harry Engel; Jdarlington Qarlington @gmail.com); Jeanne McPherren; Jeff Jones; Jeffery B. Jones Qeff.jones @alaska.gov); Jerry McCutcheon; Jill Womack; Jim White; Jim Winegarner; Joe Nicks; John Garing; John Katz; John S. Haworth; John Spain; John Tower; Jon Goltz; Judy Stanek; Julie Houle; Kari Moriarty; Kaynell Zeman; Keith Wiles; Kim Cunningham; Larry Ostrovsky; Laura Silliphant; Marilyn Crockett; Mark Dalton; Mark Hanley (mark.hanley @anadarko.com); Mark Kovac; Mark P. Worcester; Marquerite kremer; Michael Dammeyer; Michael Jacobs; Mike Bill; Mike Mason; Mikel Schultz; Mindy Lewis; MJ Loveland; mjnelson; mkm7200; nelson; Nick W. Glover; NSK Problem Well Supv; Patty Alfaro; Paul Decker (paul.decker @alaska.gov); Paul Figel; PORHOLA, STAN T; Randall Kanady; Randy L. Skillern; rob.g.dragnich @exxonmobil.com; Robert Brelsford; Robert Campbell; Rudy Brueggeman; Ryan Tunseth; Scott Cranswick; Scott Griffith; Scott, David (LAA); Shannon Donnelly; Sharmaine Copeland; Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); Sondra Stewman; Steve Lambert; Steve Moothart; Steven R. Rossberg; Suzanne Gibson; tablerk; Tamera Sheffield; Taylor, Cammy O (DNR); Temple Davidson; Teresa Imm; Terrie Hubble; Thor Cutler; Tina Grovier; Todd Durkee; Tony Hopfinger; trmjr1; Valenzuela, Mariam; Vicki Irwin; Walter Featherly; Will Chinn; Williamson, Mary J (DNR); Yereth Rosen; Aaron Gluzman; Bettis, Patricia K (DNR); Dale Hoffman; David Lenig; Gary Orr; Jason Bergerson; Joe Longo; Lara Coates; Marc Kuck; Mary Aschoff; Matt Gill; Maurizio Grandi; Ostrovsky, Larry Z (DNR); Richard Garrard; Sandra Lemke; Talib Syed; Tiffany Stebbins; Wayne Wooster; William Van Dyke; Woolf, Wendy C (DNR); Aubert, Winton G (DOA); Ballantine, Tab A (LAW); Brooks, Phoebe; Davies, Stephen F (DOA); Fisher, Samantha J (DOA); Foerster, Catherine P (DOA); Johnson, Elaine M (DOA); Laasch, Linda K (DOA); Maunder, Thomas E (DOA); McIver, Bren (DOA); McMains, Stephen E (DOA); Norman, John K (DOA); Okland, Howard D (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Saltmarsh, Arthur C (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Shartzer, Christine R (DOA) Subject: co640 (Nikaitchuq OP17 -02), co233 -001 (South Barrow Gas Field), co274 -001 (Walakpa Field), aio2b -059 (KRU 2T -02) Attachments: co640.pdf; aio2b- 059.pdf; co274- 001.pdf; co233- 001.pdf Jody J. Colombie ,Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 (907)793 -1221 (phone) (907)276 -7542 (fax) 1 Mary Jones David McCaleb XTO Energy, Inc. IHS Energy Group George Vaught, Jr. Cartography GEPS P.O. Box 13557 810 Houston Street, Ste 200 5333 Westheimer, Suite 100 Denver, CO 80201 -3557 Ft. Worth, TX 76102 -6298 Houston, TX 77056 Jerry Hodgden Richard Neahring Mark Wedman Hodgden Oil Company NRG Associates Halliburton 408 18 Street President 6900 Arctic Blvd. Golden, CO 80401 -2433 P.O. Box 1655 Anchorage, AK 99502 Colorado Springs, CO 80901 Bernie Karl CIRI K &K Recycling Inc. Land Department Baker Oil ho o fs P.O. Box 58055 P.O. Box 93330 795 94 Fairbanks, AK 99711 Anchorage, AK 99503 Anchorage, A AK 99515 -4295 North Slope Borough Jill Schneider Gordon Severson P.O. Box 69 US Geological Survey 3201 Westmar Circle Barrow, AK 99723 4200 University Drive Anchorage, AK 99508 -4336 Anchorage, AK 99508 Jack Hakkila Darwin Waldsmith James Gibbs P.O. Box 190083 P.O. Box 39309 P.O. Box 1597 Anchorage, AK 99519 Ninilchick, AK 99639 Soldotna, AK 99669 Kenai National Wildlife Refuge Penny Vadla Cliff Burglin Refuge Manager 399 West Riverview Avenue 319 Charles Street P.O. Box 2139 Soldotna, AK 99669 -7714 Fairbanks, AK 99701 Soldotna, AK 99669 -2139 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 � - - _, -. NORTH SLOPE BOROUGH Department of Capital Improvement Program Management P.O. Box 350 Barrow, Alaska 99723 Phone: 907 - 852 -2611 or 907 - 852 -0489 Fax 907 - 852- 907 - 852 -0257 Matthew C. Dunn, Director October 22, 2010 Mr. Daniel T. Seamount, Chairman Alaska Oil and Gas Conservation Commission OCT 2 5 2010 333 West 7 Avenue, Suite 100 Anchorage, AK 99501 Naska Oil $t gas GOQS. C$ RE: North Slope Borough Anotz qa p � Barrow and Walakpa Gas Fields Application for Pool Rules Amendments Dear Chairman Seamount: In accordance with the Commission's regulations and the existing Pool Rules, enclosed are the North Slope Borough's (NSB) applications for amendments to the existing Pool Rules for the Barrow Gas Field (Conservation Order 233) and the Walakpa Gas Field (Conservation Order 274). The NSB is the operator of the Barrow and Walakpa Gas Fields and owns 100% of the rights to the gas in both fields. The NSB is requesting modifications to the existing Pool Rules to allow for unlimited well spacing in both gas fields and to allow for packerless completions and use of uncemented slotted liners in the Barrow Gas Field. The pool rules for the Walakpa Gas Field already allow for packerless completions and use of uncemented slotted liners in that field. Both Conservation Orders provide that the Commission may administratively approve modifications to well spacing. Rule 5 of Conservation Order 233 provides that the Commission may also administratively approve modifications to completion practices. The NSB requests that the Commission administratively approve the modifications to the Pool Rules outlined in the enclosures to this letter. Supporting engineering and geologic information is also enclosed to support these requests. The NSB is planning to drill two new horizontal gas wells in the East Barrow gas field and four new horizontal wells in the Walakpa gas field. These new horizontal wells will require individual well spacing exceptions if unrestricted well spacing is not approved in both fields. Likewise, the completion design for these new wells includes a liner top packer with an uncemented slotted liner across the gas sands in each well and that no packer is run on the tubing string in each well. This 1 • • completion design requires an exception to the Barrow gas field pool rules or a modification of the pool rules. The NSB believes that amendments to the existing Fool Rules are the most expeditious way to proceed in this situation. Petrotechnical Resources Alaska (PRA) has been retained by the NSB to provide technical and management services for this project and is authorized to represent the NSB before the Commission. If you have any questions concerning this application please contact me immediately. We are making plans to barge the rig and heavy equipment to Barrow this coming summer and spud our first new gas development well as early as September 2011. Sinc re y, Matt Dunn, Director CIPM Enclosures CC: Tom Walsh, PRA William Van Dyke, PRA 2 ENCLOSURE #1 Barrow Gas Field Request to Amend Rule 3 and Rule 5 of Conservation Order 233 The North Slope Borough (NSB) requests that Rule 3 of Conservation Order 233 be amended to read as follows: RULE 3 WELL SPACING. a) The spacing of all wells drilled and completed within the affected area prior to the date of this Order is approved. b) Unrestricted well spacing is established for the pool within the affected area for all wells to be drilled and completed subsequent to the date of this order. There shall be no restrictions as to well spacing except that no pay shall be opened in a well within 1500 feet of an external property line where the owners and landowners are not the same on both sides of the line. c) Upon application by the operator accomplished by substantiating data based on engineering and geological principles, the Commission may administratively approve modifications to well spacing. The NSB requests that Rule 5 of Conservation Order 233 be amended to read as follows: RULE 5 COMPLETION PRACTICE. Wells may be completed without a packer. The Commission may administratively approve alternative completion methods where appropriate. Justification for the Requests The amendments proposed above will allow the operator greater flexibility in placing new wells as the pool is developed and will help to maximize ultimate recovery from the pool. The rules will not (1) diminish ultimate recovery from the pools, (2) promote waste, (3) jeopardize correlative rights, or (4) increase the risk of movement of fluids into fresh water. Correlative rights will be protected by requiring a 1500 foot set back from the external property lines where the owners and landowners are not the same on both sides of the line. Well spacing is governed by 20 AAC 25.055 unless specific pool rules are adopted under 20 AAC 25.520. Well spacing requirements were incorporated into the pool rules that were appropriate when vertical wellbores were used to develop the pool. The proposed use of long horizontal wellbores requires an amendment to the current rule. The NSB believes that horizontal wells completed with liner top packers and uncemented slotted liners across the face of the pay sand are the best way to complete the new wells. This will add significant productivity to the fields and continue development of the pools in a cost effective manner. In addition, the use of packerless completions is the current production practice in both fields and from an operational practice is the best way and a proven way to produce the pools given 3 • • the potential for gas hydrates to form in the tubing sting or even at the bottom of the wellbore. With no packer in place methanol can be circulated down the tubing and down the tubing by inner casing string annulus to remove hydrate plugs. This production practice has worked successfully for decades in the field. Commission staff has ready access to the well logs, well files and the production/pressure history of the wells in the Barrow and Walakpa fields. Geologic information on the pools was provided when the Barrow Gas Field pool rules were adopted in 1987 and the Walakpa Gas Field pool rules were adopted in 1991. None of those data and materials is enclosed again with this application. The Barrow and Walakpa gas sands are relatively thin and relatively tight. Horizontal wells completed with uncemented slotted liners in the pay zone should provide for much higher well flow rates at much lower pressure drawdowns across the sand face relative to vertical wellbores completed with cemented /perforated liners across the producing sand face. Fewer horizontal wells are needed to provide the same gas deliverability relative to vertical wellbores. However, horizontal wellbores require an amendment to the well spacing requirements in both the Walakpa and Barrow gas fields. The use of uncemented slotted liners requires an amendment to the Barrow gas field pool rules since that rule was written with conventional well completion technology in mind. The use of uncemented slotted liners in horizontal wells along with a liner top packer has proven to be a successful completion technology for these types of wells. Both the Walakpa and Barrow gas sands are competent sands. Little sand production has been experienced to date from the producing wells and little to no sand production s expected from the proposed wells. The new horizontal wells in the East Field will replace several of the existing damaged and /or mostly depleted gas wells in that field. In the future, new wells may be drilled in the South Field as well. Studies have indicated that the East Field is being re- charged with natural gas at least in part by dissolution of natural gas hydrates that overlie parts of the field. The new wells are designed to take advantage of this phenomenon. END 4 • 0 ENCLOSURE #2 Walakpa Gas Field Request to Amend Rule 3 of Conservation Order 274 The North Slope Borough (NSB) requests that Rule 3 of Conservation Order 274 be amended to read as follows: RULE 3 WELL SPACING. a) The spacing of all wells drilled and completed within the affected area prior to the date of this Order is approved. b) Unrestricted well spacing is established for the pool within the affected area for all wells to be drilled and completed subsequent to the date of this order. There shall be no restrictions as to well spacing except that no pay shall be opened in a well within 1500 feet of an external property line where the owners and landowners are not the same on both sides of the line. c) Upon application by the operator accomplished by substantiating data based on engineering and geological principles, the Commission may administratively approve modifications to well spacing. Justification for the Requests The amendments and additions proposed above will allow the operator greater flexibility in placing new wells as the pool is developed and will help to maximize ultimate recovery from the pool. The rules will not (1) diminish ultimate recovery from the pools, (2) promote waste, (3) jeopardize correlative rights, or (4) increase the risk of movement of fluids into fresh water. Correlative rights will be protected by requiring a 1500 foot set back from the external property lines where the owners and landowners are not the same on both sides of the line. Well spacing is governed by 20 AAC 25.055 unless specific pool rules are adopted under 20 AAC 25.520. Well spacing requirements were incorporated into the pool rules that were appropriate when vertical wellbores were used to develop the pool. The proposed use of long horizontal wellbores requires an amendment to the current rule. The NSB believes that horizontal wells completed with a liner top packer and uncemented slotted liners across the face of the pay sand are the best way to complete the new wells. This will add significant productivity to the fields and continue development of the pools in a cost effective manner. In addition, the use of packerless completions is the current production practice in both fields and from an operational practice is the best way and a proven way to produce the pools given the potential for gas hydrates to form in the tubing sting or even at the bottom of the wellbore. With no packer in place, methanol can be circulated down the tubing and down the tubing by inner casing string annulus to remove hydrate plugs. This production practice has worked successfully for decades in the field. 5 The Barrow and Walakpa gas sands are relatively thin and relatively tight. Horizontal wells completed with uncemented slotted liners in the pay zone should provide for much higher well flow rates at much lower pressure drawdowns across the sand face relative to vertical wellbores completed with cemented/perforated liners across the producing sand face. Fewer horizontal wells are needed to provide the same gas deliverability relative to vertical wellbores. However, horizontal wellbores require an amendment to the well spacing requirements in both the Walakpa and Barrow gas fields. The use of uncemented slotted liners requires an amendment to the Barrow gas field pool rules since that rule was written with conventional well completion technology in mind. The use of uncemented slotted liners in horizontal wells along with the use of a liner top packer has proven to be a successful completion technology for these types of wells. Both the Walakpa and Barrow gas sands are competent sands. Little sand production has been experienced to date from the producing wells and little to no sand production is expected from the proposed wells. The new horizontal wells in the Walakpa Field will add to the existing well set. They will provide significant new deliverabilit to the field. p � Y END 6 r 44 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION PUBLIC HEARING MARCH 7, 1991 9:00 A.M. NORTH SLOPE BOROUGH WALAKPA POOL RULES 3001 PORCUPINE DRIVE ANCHORAGE, ALASKA BOARD MEMBERS PRESENT: DAVID JOHNSTON, CHAIRMAN LONNIE C. SMITH, MEMBER RUSSELL A. DOUGLASS, MEMBER 810 N STREET, 8,UITE 10t 277.0572 R & R COURT REPORTERS 8,09 w. 3RD AVENUE 1007 W, 3RD AVENUE 277.8543 272-7318, ANCHORAGE, ALASKA 998,01 1135 W. 8TH AVENUE 272.3022 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 RECEIVED 2 6 1991 ~as~ u~ & Gas Cons. Commi~io Anchorage PROCEEDINGS COMMISSIONER JOHNSTON: Okay. I'd like to call this public hearing to order. The time is approximately 9:05 on March the ?th, 1991. The location is the offices of the Alaska Oil and Sas Conservation Commission located at 3001 Porcupine Drive, Anchorage, Alaska. My name is David Johnston. I'm chairman of the Commission. To my right is Commissioner Russ Douglass. To my left is Commissioner Lonnie Smith. And to the far left over here is Meredith Downing of R & R Court Reporters, who will be making a record of these proceedings. At this time I'd like to ask Commissioner Douglass to read into the record the public notice of this hearing? COMMISSIONER DOUGLASS: Notice of public hearing, State of Alaska, .Alaska Oil and Gas Conservation Oommission. "Regarding the Application of the North Slope Borough for a public hearing to present testimony for classification of a gas pool and prescribing pool rules for development in the Walakpa area. "Notice is hereby given that the North Slope Borough has petitioned the Alaska Oil and Gas Conservation Commission, hereinafter the Oommission, to issue a conservation order setting forth pool rules for the development of a gas pool in the Walakpa area, 19 miles southwest of Barrow. The hearin~ R & R COURT REPORTERS alO N STREET, SUITE 101 BOg W. -IIRD AVENUE 1007 W. 811~D AVENUE 11:lB W, 8TH AVENUE JaT?,OB?~ a?7.es4a 27~.751B aTa.aoa~ ANCHO~OE, A~S~ eeB01 l0 ]! ]4 ]6 ]7 18 20 21 22 24 25 will be held at the Alaska Oil and Conservation Commission, 3001 Porcupine Drive, Anchorage, Alaska, 99501, at 9:00 a.m. on March ?th, 1991, in conformance with 20 AAC 25.540. All interested persons and parties are invited to give testimony. "Signed Russell A. Douglass, Commissioner, Alaska Oil and Sas Conservation Commission. Published February 1st, 1991." COMMISSIONER JOHNSTON: Thank you. These -- the procedures will be held in accordance with Commission regulations, specifically 20 AAC 25.540. Those regulations specify that sworn testimony or unsworn statements may be provided. The Commission, of course, in its deliberations will be giving greater weight to sworn testimony. As you come up to present your testimony, we ask that you provide your name and state who you represent. For those people that wish to be considered an expert witness, we ask that you state your qualifications. The Commission will then rule as to whether we would consider you an expert witness in these matters. The order of testimony will have the applicant going first, followed by any other people wishing to testify. With the Commission's approval, the applicant may cross examine those other witnesses. At the conclusion of the sworn testimony, excuse me, unsworn oral statements or written comments will be accepted by the Commission. R & R COURT R£PORTIrR$ 810 N STREET, SUITE 101 BOg W. SRD AV~NU~ 1007 W. ~RD AVENUE I1~S W, 8TH AVENUE 277.0572 277.854~ ~7~-7B15 272.3022 ANCHORAGE, A~S~ 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 The Commission will be asking questions throughout the proceedings. Members of the audience, however, are not permitted to ask questions directly of the -- any of the witnesses. However, you may ask your -- or you may write your question down and indicate who it should be directed to. And if you would then provide that written question to Diane Fleck on our staff -- Diane, if you would stand up7 -- she will then bring those -- the -- those questions up to us and we will review them, and if in our opinion we feel that the commi- -- the question is helpful, the Commission will then ask that question of the witness. A written transcript of the proceedings will be prepared and made a part of the public record. At this time I would like to have those individuals that will be providing sworn testimony to be sworn in by Commissioner Douglass. COMMISSIONER DOUGLASS: And Diane just ran off with my list of names. COMMISSIONER SMITH: Well, where is the ..... COMMISSIONER JOHNSTON: Well, if those people wishing to -- to present sworn testimony, if you'd please stand? And if you would identify yourself for the record? MR. CROUCH: William Crouch. MR. GLENN: Richard Glenn. RIC~[ARD K. GLENN R & R GOURT R£PORT£RS 810 N STREET, SUITE 101 BOg W, 3RD AVENUE 1007 W, 3RD AVENUE ANCHORAGE, A~S~ g3501 !135 W. 8TH AVENUE 2?2.3022 l0 12 13 14 16 17 ]8 19 20 2! 22 23 24 25 WILLIAM J. CROUCH having first been duly sworn under oath, testified as follows: COMMISSIONER DOUGLASS: Okay. Let the record show that William Crouch and Richard Glenn have been duly sworn in and will be presenting testimony today. COMMISSIONER JOHNSTON: Okay. Why don't you please step up to the front -- or to the table here to proceed with your -- your testimony. MR. GLENN: These are extra exhibits. COMMISSIONER JOHNSTON: Okay. We -- why don't you go ahead and submit -- submit them to -the Commission. PUt them up here on the -- the side table here? COMMISSIONER DOUGLASS: Just put them in the chair, that will be fine. COMMISSIONER SMITH: I'd like one full set here for the official record. May I ask, are these in any way different than the copy you provided us already? MR. GLENN: No. COMMISSIONER SMITH: Okay. MR. GLENN: The only difference is that there's only one copy of Exhibit Number Five, since it's a hand-drawn support figure. It's on the wall and you've already received that. COMMISSIONER SMITH: Yes. COMMISSIONER JOHNSTON: Right. R & R COURT REPORTERS 810 N STREET, SUITE 101 S09 W. 3RD AVENUE IOO7 W. 3RD AVENUE 11-~B W. STH AVENUE 277.057~ ~77.8543 272.7515 27~-30~2 ANCHORAGE, ALASKA 99B01 10 ]1 12 13 ]4 16 17 19 2O 21 22 23 24 the ..... COMMISSIONER SMITH: The cross section for MR. GLENN: The log correlations. COMMISSIONER SMITH: Okay. We'll use that as the official exhibit for number five. Did you supply an Exhibit Two-B? MR. GLENN: Yes. COMMISSIONER SMITH: Okay. MR. GLENN: I'm not sure if I gave you an Exhibit Number Eight, so why don't You take that? COMMISSIONER SMITH: Okay. As long as we're on the exhibits, may I ask you, Glenn ..... MR. GLENN: Richard. My name's Richard Glenn. COMMISSIONER SMITH: Richard. I'm sorry. The listing shows a possible topographic map? MR. GLENN: Yes. COMMISSIONER SMITH: Did you supply that? MR. GLENN: We have it here if ..... COMMISSIONER SMITH: Okay. MR. GLENN: ..... if the Commission would like to look at it, but the -- much of the topographic information is also supplied on Exhibit Number Three. COMMISSIONER SMITH: Okay. We'll -- we'll just wait then on that one. Okay. COMMISSIONER JOHNSTON: Okay. Richard, if you R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W. 3RD AVENUE 1007 W. 3RD AVENUE 11;35 W. 8TH AVENUE 277-0572 277-8$4:~ 272-7BIS 272-:~022 ANCHORAGE, ALASKA 99501 ]0 ]4 ]6 17 19 20 2] 22 23 24 7 would go ahead and proceed by stating your name and who you'~e affiliated with? MR. GLENN: My name is Richard Glenn, and I work for Arctic Slope Consulting Group as a geologist. I'm -- I have a bachelor of science degree in geology, and I've defended my master's thesis in geology and a master degree is pending. And I'm also a Ph.D. candidate at the University of Alaska Fairbanks. I've worked for Arctic Slope Consulting Group since 1985 as a geologist, and all of my geologic experience for Arctic Slope Consulting Group has been centered on North Slope geology. I've worked at the Barrow Gas Fields since 1988. I've assisted them in geologic matters starting with the Barrow Gas Fields proper and now moving into the Walakpa area. COMMISSIONER JOHNSTON: Okay. Thank you. Do you -- okay. Lonnie? COMMISSIONER SMITH: All right. COMMISSIONER JOHNSTON: Okay. The Commission will accept your testimony as expert testimony in this -- in this matter. MR. GLENN: I'd like to make some discussion about the Exhibits, in order to let the Commission know that they have a full and complete set of exhibits. Exhibit Number one is a location map of the Barrow area, including Barrow and the Walakpa area, showing the boundaries of the Transfer Act R 8¢ R COURT REPORTERS 810 N STREET, SUITE 101 S09 W. 3RD AVENUE 1007 W. 3RD AVENUE 113B W. 8TH AVENUE 277-0572 277.8543 272-7515 272-3022 ANCHORAGE, ALASKA 99501 ]0 ]2 14 ]¸6 17 19 20 2! 22 24 25 lands. Exhibit Number Two is an area map, eight and a half by 1! sheet showing what we call on the map the Walakpa Development area, and today we will propose a name for that development area. Exhibit Number Three is a structure map whose contours represent the top of the Walakpa sandstone. Exhibit Number Four is a cross section based on log correlation, seismic interpretation of all the significant stratigraphic units. Exhibit Number Five, of which there's only one copy is a -- is a hand-drawn log correlation of the Walakpa sand. COMMISSIONER SMITH: Exhibit Number Seven? MR. GLENN: Exhibit Number Six is what we -- what we call here our possible topographic map exhibit, and if the Commission needs it, we have several -- or one or 'two copies of the inch to the mile topographic maps, however, this information is also supplied on Exhibit Number Three. COMMISSIONER SMITH: Glenn, I'm sorry, I think there's a -- you said Exhibit Number Six? MR. GLENN: Yes. COMMISSIONER SMITH: Is what now? MR. GLENN: If the Commission desires, we have a topographic map that ..... COMMISSIONER SMITH: This one is listed as R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W. 3RD AVENUE 100'7 W. 3RD AVENUE 1135 W. STH AVENUE 277-0572 277.8543 272-7515 272-3022 ANCHOF~GE, ALASKA 99501 10 11 12 14 15 16 17 ]9 2O 24 Exhibit Number Six ...... COMMISSIONER DOUGLASS: No, Exhibit Five. COMMISSIONER SMITH: ..... the well schematic? MR. GLENN: Oh, okay. That's Exhibit -- you have that as Exhibit Number Six? The down-. .... your ..... COMMISSIONER JOHNSTON: You indicated in MR. GLENN: ..... hole schematic. Okay. COMMISSIONER JOHNSTON: ..... submittal that a possible topographic ..... MR. GLENN: Yes. provided. COMMISSIONER JOHNSTON: ..... map would be MR. GLENN: Okay. I'm -- I made a mistake. COMMISSIONER JOHNSTON: Right. MR. GLENN: Exhibit Number Six then is a down hole schematic of a proposed completion design for our new gas field. Exhibit Number Seven is a lithologic chart which represents again the significant stratigraphic units of the development area. Exhibit Number Eight, equipment schematic showing the hardware to be used in the completion of the wells above service. And Exhibit Number Nine is a -- is a curve that discusses or concerns gas/methane hydrate equilibrium 810 N STREE~ SUITE101 277.0572 R & R COURT REPORTERS Bo9 w. 3RD AVENUE 1007 W..'~RD AVENUE !15B W. 8TH AVENUE 277-8B4~ 272.TBIB 272.:~022 ANCHORAGE, ALASKA 99B01 10 ]! !2 !4 16 17 18 !9 20 2! 22 24 10 conditions for the area. I wanted to introduce you to these exhibits to make sure that the Commission had a copy of everything that we'll be discussing today. COMMISSIONER SMITH: I still have a point of confusion with Exhibit Two. You list it on your sheet, Exhibit Two, and you have Two-B. MR. GLENN: Yes. COMMISSIONER SMITH: But they're one and the same, is that it? MR. GLENN: Yes, that's ..... COMMISSIONER SMITH: There isn't a Two and a Two-B? MR. GLENN: No. That's a point of confusion. brought about by our drafting and ..... COMMISSIONER SMITH: Okay. MR. GLENN: ..... for -- for purposes of this hearing, we'll consider Two-B to be Exhibit Two. COMMISSIONER SMITH: Okay. COMMISSIONER JOHNSTON: Thank you, Richard. MR. GLENN: And for the record I'd -- I'd like to say that there are several copies of each of these exhibits here for the Commission's use. COMMISSIONER JOHNSTON: Thank you. MR. GLENN: The first thing we'd like to do R & R COURT REPORTERS 81o N STREET, SUITE 101 509 W. 3RD AVE:NUE 1007 W. 3RD AVENUE 1135 W. 8TH AVENUE 277-0572 277.8543 272-7515 272-3022 ANCHORAGE, ALASKA 99501 10 ]! !2 !3 !4 !6 17 18 !9 20 2! 22 23 24 11 at this hearing is to propose a name, a field name for our development area. We -- on all of these figures, you can see reference to the Walakpa Development Area, and we propose that this development area be named Walakpa Gas Field. And for purposes of development, this -- we're trying to restrict this area to the -- the box that's outlined in Exhibit Number Three, and all our discussions of development schedules, well spacing, will be limited to this area. COMMISSIONER JOHNSTON: So are you saying that the -- the limits of the pool that you're defining as the Walakpa I assume Gas Pool would be within the limits designated by that box? MR. GLENN: Yes. Our proposed development is going to take place within this area, but we do -- we would like to reserve the right to expand or contract this area as our developments -- developments sees fit. But for right now this is the area which we're concerned with. It's approximately five miles by eight miles. Five miles in a north/south direction and eight miles in an east/west direction. Forty square miles. The reservoir which we're concerned with here is the Walakpa Gas Sand. It's Lower Cretaceous in age, Neocomian on the basis of foram- -- foraminifera data that was evaluated in Walakpa Number Two gas well. It's unconformity sand which truncates the Jurassic Kingak formation, and is overlain by 810 N STREE~ SUITE101 277-0572 R &: R COURT REPORTERS 509 w. 3RD AVENUE 1007 W. 3RD AVENUE !135 W. 8TH AVENUE 277-8543 272-7515 272-3022 ANCHORAGE, ALASKA 99501 l0 ]1 14 ]6 ]7 ]8 ]9 20 2! 22 23 24 12 the pebble shale. The Walakpa Sas Sand is considered to be the basal unit of the pebble shale. One of the primary concerns of the North Slope Borough in developing this field was the lateral continuity of the sand, and although it was encountered in One -- Walakpa Number One and Walakpa Number Two, which were drilled by the federal government early 1980s and late ?Os, the -- the development program needed to show a lateral continuity of this sand before any development could begin. And we did this by seismic interpretation and well log analysis, much of which is shown in Exhibit Number Five, which is an acoustic log correlation of the Walakpa Gas Sand. If I could, I'll walk over to the Exhibit. You can see, outlined in yellow is the gamma ray signature of the Walakpa Sas Sand with a char- -- above which is a characteristic shale unit which aids in the correlation. The top of the pebble shale is marked by this gamma ray marker zone, again shaded in green. And beneath the unconformity, the Lower Cretaceous unconformaties, Jurassic age Kingak shale, and the correlation signatures are outlined in blue and green shades also. COMMISSIONER JOHNSTON: Could you show us the location of those wells on the -- the base map? MR. GLENN: Okay. This is a north/south log correlation going south from the ARCO Brontosaurus Number One R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W. 3RD AVENUE 1007 W. 3RD AVENUE 1135 W. 8TH AVENUE 277-0572 277-8543 272-7515 272.3022 ANCHORAGE, ALASKA 99501 l0 l! 12 14 ]6 17 18 19 20 21 22 23 24 25 13 Well through Walakpa Number Two, Number Three, Number One, north to NSB Number Three and north further to NSB Number Six located right here. It's -- it's identified by a line, A-A' on the Exhibit Number Three. We are -- we are confident that the Walakpa Gas Sand is continuous in a north/south extent between -- at least within our development area. And the thing that needs to be proven and will be shown probably by our development is its east/west extent. And we're confident again that its east/west extent is -- is just as continuous as its north/south extent. The Walakpa Gas Sand is composed of a basal conglomaritic layer and a middle massive sand stone and an upper fine grained sand stone and laminated~ silt stone. And it's overlain by again the organic rich pebble shale. All of which is neocomian in age. Although we -- we believe there is lateral continuity of the Walakpa Gas Sand, there are several faults in the area, which -- two of which can be seen on the -- on the cross section, Exhibit Number Four. These faults are picked from seismic interpretation. They don't have very much offset, around 40 feet, and they don't -- they're -- they're not continuous throughout the development area. They -- the displacement on the faults dies out to the east. COMMISSIONER SMITH: And what's in the 810 N STREE~ SUITE]O! Z??-0572 R & R COURT REPORTERS 509 w. SRD AVENUE 100? W. 3RD AVENUE 1155 W. 8TH AVENUE 277-8543 272-7515 272.3022 ANCHORAGE, ALASKA 9950; 10 11 14 16 17 19 20 2! 22 24 14 vicinity of these faults, relative to the area we're talking about? MR. GLENN: These faults occur in the development area between -- one of them -- one of them is between Walakpa Number One and Number Two, and the other one is just north of Walakpa Number One. The displacement on the faults is -- is minor, and again 'the structure, the over-all regional structure of the Walakpa area leads us to believe that they're -- the displacement is above any spill point of the gas, so that if there's gas on the north -- on the south side, there's probably gas on the north side. However, this may not be true, and the location of these faults within our development area may affect our -- our well locations and hence our well spacing. Also, the Walakpa Sand is shown to become siltier and thinner to the north between Walakpa Number Two and Walakpa Number One. You can see a decrease of almost 50~. And further to the north it becomes even thinner, and the -- and 'the lateral continuity of this sand north of Walakpa Number One is in question. It's questionable We see the lower Cretaceous sand as far north as -- as the Barrow area, but to demonstrate any kind of lateral continuity between the Walakpa Development Area, Walakpa Gas Field, and the Barrow area would be difficult. Hence I've R & R COURT REPORTERS 810 N gTREET, ~UITE 101 BOg W, 3RD AVENUE 1007 W. 3RD AVENUE !13E W. 87H AVENUE 277-0372 277-8543 272.751B 272.3022 ANCHORAGE, ALASKA 99801 ]0 1! ]2 14 16 17 18 19 20 2! 22 24 questioned -- on the cross section you can see question marks on the northward extent of the Walakpa Gas Sand. COMMISSIONER SMITH: Would you describe the difference between Exhibit Five -- Four and Five? MR. GLENN: Exhibit Four is a structural cross section based on well log correlation and seismic interpretation. Exhibit Number Five is strictly a log correlation of the sand, more designed to show the similarities of -- of this interval in each of the wells going from Brontosaurus north to Walakpa Number One. Exhibit Number Four covers a greater north/south extent than Exhibit Number Five. I think -- I gave you Exhibit Number Five to show you the evidence by which we correlate this sand. One line of evidence. The trapping mechanism of our sand is prc~:.'~'!:~ly a combination of a structural and stratigraphic trap. The sand becomes thinner and siltier to the north and may lose its lateral continuity to the north, which would be a stratigraphic trap. Also the -- at the crest of the structure is the Iko Bay Fault, which may be a structural trap. And this structure also crests around the NSB-Three area. So a combination of these two is inferred to occur, trap -- becoming -- becoming the trap of our reservoir. The -- the over-all structure again can be seen on R & R COURT REPORTERS 81o N STREET, SUITE 101 509 W. 3RD AVENUE 1007 W. 3RD AVENUE 1135 W. 8TH AVENUE 277.05'72 277.8543 272.7515 272.3022 ANCHORAGE, ALASKA 99501 l0 12 14 ]6 l? 2O 2! 22 23 24 16 Exhibit Number Three. COMMISSIONER SMITH: So although on Exhibit Number Three you show a large areal structure there and you show on the Exhibits Four and Five, some degree of continuity of the sand over a large area, that doesn't mean that it's continuous? MR. GLENN: Right. The -- the structure on Exhibit Number Three is the -- is the Lower Cretaceous unconformity, and in each of the wells that's shown on Exhibit Number Three, we can see the Walakpa Sand, but it may not be present in all areas in between. COMMISSIONER JOHNSTON: Richard, could you by using Exhibit Number Three generally go through your trapping explanation again and show us the locations of those faults and -- and how the -- the Walakpa Sand grades out? MR. GLENN: Okay. Exhibit Number Three shows the Barrow and Walakpa area as well as the surrounding area with NPRA wells drilled, West Dease, Tulageak, Yuyanak, and the ARCO Brontosaurus well, as well as the Barrow Gas Fields and all the wells we've drilled or plan to drill in Walakpa Gas Field. 'And the contours on this map are the contours of the Lower Cretaceous unconformity. The sand -- the Walakpa Gas Sand has been identified in the ARCO Brontosaurus well, Walakpa Number Two well, and by the way, Number Three and Four drilled in this development 810 N STREE~ SUITE101 277-0572 R & R COURT REPORTERS 509W. 3RD AVENUE 1007~3RD AVENUE 1155~8TH AVENUE 277-8543 272.7515 272-5022 ANCHORAGE, ALASKA99501 10 12 ]4 ]6 17 19 20 2] 22 23 24 25 17 program, Walakpa Number One Well, and it's been tentatively identified in NSB Three. It's present in all of the Barrow area, and it may be present in much greater thickness to the east in the Kuyanak area, in the Kuyanak well, although the correlation of the LeU sand from Walakpa eastward to Kuyanak is tentative. This sand -- it's open to interpretation whether or not this sand is indeed the Lower Cretaceous unconformity sand. It may be an underlying Jurassic sand. 00MMISSIONER SMITH: Is this sand productive? Shown to be productive at each one of these points? MR. GLENN: No. At the ARCO Brontosaurus Well, *the Walakpa sand is water wet. Similarly, the thick Jurassic or Cretaceous sand in the Kuyanak well is wet. However, in Walakpa Number Two and Walakpa Number One, encompassing a structural leap of about 500 feet, both -- in both wells the Walakpa sand tested gas. In NSB Three, the interval was not investigated for gas potential. It looks like if -- if it was gas bearing, it's probably silt- -- too silty to produce. And they overlooked it and instead tried to investigate the Barrow Gas Sands. However, in the Barrow Gas Fields area, many of the -- many of the gas wells are completed also in the Walakpa Sand where the Lower Cretaceous unconformity has truncated down into the Lower Jurassic. So as long as they're completing in R & R COURT REPORTERS 810 N STREET, SUITE 101 BOg W. ~IRD AVENUE 1007 W. 3RD AVENUE 11:~B W. 8TH AVENUE 277.0572 277.8543 272-7515 272-3022 ANCHORAGE, ALASKA 99501 l0 !2 !4 16 17 !9 2O 2! 22 24 18 the Barrow Sand, they have -- they opened up to the Lower Cretaceous sand as well. In summary then, we got a gas/water contact somewhere between the Brontosaurus and Walakpa wells. A fluid/gas contact. We don't know where it is, so for the purposes of our program, which is the development of this area for gas resources to the Barrow community, we needed to be confident that we picked an interval that had gas. We didn't want to be exploring for a gas/water contact. So we stayed updip of Walakpa Number Two and drilled our wells. That is why our development area is -- is concentrating on this area between Walakpa Number Two and Walakpa Number One. COMMISSIONER JOHNSTON: And the location of the faults that you were describing, the ones with the 40-foot throws? MR. GLENN: Yes. The faults aren't shown on this -- the -- the scale of the -- the structure map is too large to show the offset of the faults. They are instead shown on Exhibit Number Four. And you can see -- you can see each of these faults north and south of Walakpa Number One, and also the Iko Bay Fault north of NSB Number Three. This fault is of large enough lateral extent and offset to be shown on the structure map, and it's the east/west line shown in Exhibit Number Three. COMMISSIONER SMITH: And for 'the record, R & R COURT REPORTERS 8to N STREET, SUITE 101 EOe W, SRD AVENUE 1007 W, ~IRD AVENUE II:SB W, eTH AVENUE :R77.0BT~ ;~77.1~EI4:~ ~7~.TSIB ~7~.~0~ ANCHORAOE, A~ ~9B01 l0 ]! 14 15 16 18 19 2O 21 22 24 19 what's the disposition of Walakpa Number One? MR. GLENN: Walakpa Number One tested gas, but was abandoned. Walakpa Number Two was also -- also tested gas and it was suspended. And in our development program we plan to rework Walakpa Number Two and use it for a gas well. The Walakpa Sand is similar to many of the Lower Cretaceous sands found on the North Slope. It's the last gas of classic deposition from a source to the north before sedimentation began in the Lower Cretaceous from the south during the Brooks Range herogeny. And like its counterparts in the Prudhoe Bay area, it -- it's a regional sand. It's laterally -- laterally continuous within an area but it doesn't extend -- it's not pervasive throughout the North Slope. These shelf sands occur in isolated areas throughout the North Slope, but within these isolated areas, they're shown to be relatively continuous. And for purposes of our development, this Lower Cretaceous sand is interpreted to be continuous in our area, and we'll prove that out with our drilling. However, In order to -- in order to most effectively develop the area, we need to be in control of spacing, well spacing. These changes in permeability, these small faults, and also the east/west lateral continuity of the sand may be a controlling factor on our well locations, as well as, as you'll see on Exhibit 2-B -- I hope you've made a 810 N STREE~ SUITEI01 R & R COURT REPORTERS BOg~3RD AVENUE IO0?~3RD AVENUE ~13BW, STH AVENUE ANCHORAGE, ALASKA99501 ]0 14 16 l? 18 ]9 2O 2! 22 24 25 transparency? 20 COMMISSIONER SMITH: Well, I think it's a good point here to make a correction on -- again on the Exhibit Two, because we have on the -- on the screen Exhibit Two, and then you have a 2-B? MR. GLENN: Yes. COMMISSIONER SMITH: Okay. All right. MR. GLENN: They both show the -- the same area. One of them shows the structure contours, that's Exhibit Two. Exhibit 2-B shows the well locations as well as the lakes in the development area. This the -- the next most controlling factor that -- that may effect our well spacing. As you can see, much of the area is covered by lakes. And it may be hard to keep a regular spacing on a large scale, say a 640-acre spacing in an area that's so predominantly covered by lakes. Therefore we're asking for 160-acre spacing for the Walakpa Gas field. This doesn't mean that all of our well will be set on 160-acre spacing. This provides though us the opportunity to locate our wells with respect to the lakes, the structure, and the permeability variations that we may encounter to most effectively develop this reservoir. And this well spacing request is only limited to the area designated on Exhibit 2-B, Walakpa Gas Field. 810 N STREE~ SUITE101 R & R COURT R£PORT£RS 509 W. 3FID AVENUE 1007 W. ~IFID AVENUE 1135 W. 8TH AVENUE ~77.8543 27~.7515 272.3022 ANCHORAGE, AI. ASKA 99501 ]0 ]! ]2 ]4 ]6 ]7 19 20 21 22 23 24 25 21 COMMISSIONER JOHNSON: Are all these wells being proposed as straight holes or ..... ? MR. GLENN: Yes. The -- the nature -- well, it's a shallow gas sand. To slant for a 2,000-foot depth sand, you -- it would be pretty hard to kick out. As you can see on Exhibit One and also as a bit of background, the North Slope Borough owns the subsurface rights to the entire development area as well as a great area surrounding it, so there -- there aren't any correlative rights problems within our development area. These -- these - - the rights to the Walakpa Gas Field as well as to the east and south Barrow Gas Field were 'transferred to the North Slope Borough by the federal government in 1984 in what was called the Barrow Gas Fields Transfer Act. COMMISSIONER SMITH: You've shown on your Exhibit Three that these formations possibly extend off shore. Is there any leased acreage off shore to your knowledge? MR. GLENN: No, the -- the State owns the first three miles, and off shore from that there is no leased acreage as of now. The map that we show in Exhibit Three doesn't pr°3ect any structure off shore, but it -- it probably could be inferred that something similar extends off shore. COMMISSIONER SMITH: I think -- Yeah, I think a combination of your cross section and your map does infer that strongly. It still may not be productive. That's yet to R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W. 3RD AVENUE 1007 W. 3RD AVENUE !135 W. 8TH AVENUE 277.0572 277.8543 272-7515 272.3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 be seen. 22 MR. GLENN: That's right. I've provided the geologic introduction to the Walakpa Gas Sand, and now I -- I think Bill Crouch will describe our drilling and completion programs. If you have any questions though on the geology, I'll be happy to answer them. COMMISSIONER JOHNSON: Okay. What -- what kind of thickness are you indicating in the Walakpa Sand and over your project area? MR. GLENN: The sand ranges in thickness between Walakpa Number Two and Number One from about 20 to 30 feet. We've drilled already Walakpa Number Three and Number Four, and we've got a net pay thickness of around 25 feet. COMMISSIONER JOHNSON: And -- and is there any evidence to indicate that this gas accumulation may be part of a larger reset- -- oil reservoir where this is perhaps just the gas cap? Could you speak to that a little? MR. GLENN: A lot of the -- the cores of Walakpa Number Two and Number One showed some oil stain, which indicated 'that oil had once been at that position. However, the composition of the gas is very light, and again the ARCO Brontosaurus Well is water-wet. We have no evidence for any oil present in the Walakpa Gas Field. COMMISSIONER JOHNSON: Do you see the -- any presence of any structural barriers located to the south? R & R COURT REPORTERS STREET, SUITE lOi 1~09 W..~IRD AVENUE 1007 W. 3RD AVENUE ll3S W. STH AV£NUE 277-0S72 277.8B43 272.7515 272.3022 ANCHORAGE, ALASKA 99B0! 10 ]! ]4 ]6 ]7 19 20 2] 22 23 24 23 MR. GLENN: No. COMMISSIONER SMITH: Was theme any evidence of oil in any of the indigenous formations there in the North Slope Number Three Well on up to the north? MR. GLENN: As far as I know, no. COMMISSIONER JOHNSON: The Exhibit Three shows me that there's a very large structure up there of which this pro3ect area only occupies a very small portion of it. I guess what I was trying to ascertain earlier by my questions relative to the location of these faults is why is your pro3ect area 3ust confined to that small area? Is -- is there some structural control or stratigraphic control that would limit the size of this pool 3ust to that small area? MR. GLENN: No. The -- the area is sitting on the flank of a very large structure as you've described. And the only reason why we're restricting our efforts to this area is because we're in between two wells that have tested gas. To do any exploration for the North Slope Borough would be -- wouldn't be prudent. We need -- the -- the over-all goal of this pro3ect is to supply natural gas to the community of Barrow and not for a profit or for exploration, but for health and safety of the community, so to do that with the least amount of gamble and the -- the most sure way was to test the area up in -- or between Number One and Number Two. The sand probably extends to the east, and it may get R & R COURT REPORTERS STREET, SUITE I01 $09 W. 3RD AVENUE 1007 W. 3RD AVENUE 113B W. 8TH AVENUE 277-0572 277.8543 272-7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 ]2 14 16 17 19 20 2! 22 24 24 thicker. Our eastern-most wells will show -- show us whether or not that -- that bears out. But we couldn't prior -- you know, prior to determining that, we can't explore to the east and -- and promise the Borough gas. Hence we're developing t'. ~ restricted area around the Walakpa One and Two wells. COMMISSIONER JOHNSON: Do you have any evidence to suggest that this -- the Walakpa gas accumulation that you're talking about here may be or may not be in pressure communication with the South Barrow or East Barrow Fields? MR. GLENN: We have no evidence, no. I believe though that there's probably several permeability barriers between the Walakpa Gas Field area and the Barrow Gas Field area. COMMISSIONER JOHNSON: And could you describe those permeability -- permeability barriers? MR. GLENN: We see a lateral change in lithology. The Walakpa Sand becomes siltier and thinner to the north, and if you extrapolate this thinning and-- and silt- -- silting, then you'll see that probably north of Walakpa Number One the reservoir potential of the Walakpa Sand is very low. It's not an area to develop. I think it's typical of the Lower Cretaceous Sands that their -- their best development is a little bit offset from the structural high portion. These -- these are shelf sands and they become the R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W, 3RD AVENUE 1007 W. 3RD AVENUE 1135 W, 8TH AVENUE ANCHORAGE, A~$~ 99301 10 12 13 !4 15 !6 17 !8 !9 20 21 22 23 24 25 25 thickest and the cleanest a little bit off structure, on the flanks of their depositional environment. COMMISSIONER SMITH: Do you have any evidence to suggest that the faults which you've indicated are sealing faults? MR. GLENN: The seismic drive faults shown in Exhibit Number Four are not sealing faults. They are -- north of Number Four -- I mean, north of the faults, north of at least one of the faults we've found gas as Walakpa Number One shows. And the offset on them is -- is relatively minor, so that we think that gas is migrating around on the eastern side of these faults where -- where the displacement goes to zero. However, the Iko Bay fault may be a trap, and that's the large laterally continuous fault shown on Exhibit Number Three and on Exhibit Number Four. COMMISSIONER SMITH: That's the huge one running all the way across? MR. GLENN: Yes. COMMISSIONER SMITH: That's quite a fault. MR. GLENN: I think the Iko Bay Well was -- was trying to play out using this fault as a trap. COMMISSIONER JOHNSON: Any other questions? COMMISSIONER SMITH: No. COMMISSIONER JOHNSON: Okay. Thanks, Richard. We may have additional questions for you as we ..... 810 N STREE~ SUITE101 277-0572 R & R COURT REPORTERS Bo9 w. 3RD AVENUE lO0? W. :~RD AVENUE l!3B W. 5TH AVENUE 277.8543 272.7515 272.3022 ANCHORAGE, AI..ASKA 99501 l0 14 16 20 2! 22 24 26 MR. SLENN: Okay. COMMISSIONER JOHNSON: ..... as we proceed here, but right now we'd like to move on to Bill. MR. CROUOH: My name is William Orouch. I'm with Allen and Crouch Engineers from Casper, Wyoming. We represent the North Slope Borough. We have a contract to provide petroleum engineering for them. I graduated from Tulsa University in 1951 with a B.S. in petroleum engineering. I'm a registered professional' engineer in Alaska, Wyoming, Montana, and Colorado. I've worked for a number of small independent companies and I've been in private practice for about 21 years. COMMISSIONER SMITH: No problem. COMMISSIONER JOHNSON: Okay. The Commission accepts you as an expert witness in this matter. Thank you. MR. OROUCH: Richard mentioned that we had finished two of our wells that we propose to drill this season, and before we take that exhibit down, I might mention that they both look good. The sand is real clean. It looks like it's going to be a real nice producer. We have number three on test right now, and, of course, as soon as we get the results on that, we'll -- we'll provide the Commission with a four-point test and right now I -- the only thing I can tell you about it is that he's testing on one rate. It's making between three and 400,000 a day with a minimal pressure drop. R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W. 3RD AVENUE 1007 W. 3RD AVENUE 1135 W, 5TH AVENUE 277-0572 277-8543 272-7515 272.3022 ANCHORAGE, ALASKA 99501 l0 12 14 ]6 ]9 20 22 23 24 25 27 We're working right now with -- with top hole pressure so we kind of have to see what he's going to come up with. When I say "he," one of our engineers, John Thanto who's in -- in Barrow. But it does look good. And this is -- will be part of my testimony as to how we completed it and the -- and why we think possibly it is good, not only because of the sand, but the -- but the way we're doing it. Exhibit Number Six is just a schematic of our down hole completion method. The numbers are not from any particular well. They're arbitrary. We have set our nine and five-eighths surface, I show 200 feet on that. Or I show plus or minus 200 feet. We've been setting 300 feet below the bottom of the permafrost. We would like to -- to ask that we be allowed to -- to use that 200-foot figure. We have no indication that we've ever had a problem with the new permafrost cements that are available, and we think that if we can just get below say 200 feet, it would be adequate protection. In this area, if we were to get too much further below the permafrost as we move up-dip in our discovery area, we're very possibly going to be setting surface almost down to the top of our pay zone, and we -- we don't want 'to do that if we can help it. As you see, we run seven-inch production casing Fi & Fi COUFIT REPORTERS 810 N STREET, SUITE 101 509 W. 3RD AVENUE 1007 W. 3RD AVENUE 1135 W. STH AVENUE 277-0570 277-8543 272-7515 272.3022 ANCHORAGE, ALASKA 99501 l0 ]4 16 19 2O 22 24 25 28 through the pay sand. We try to get about 100 feet below the bottom of the pay. We have an F.O. tool, a full opening tool in the string, and this allows us to pump Arctic Pack between the seven-inch and the nine and five-eighths. I'd like to discuss that a little bit. We had set this up to have a minimum of 500 feet of cement above our pay zone, and these first two wells in compliance with the request by the Commission, we have brought econo-lite cement, which is a light-weight cement to the bottom of the surface pipe, or as close to it as we can get. We're afraid that this is going to present some problems and we would -- we would like to be relieved of that requirement and 3ust put our 500 feet of cement above the pay zone and leave drilling mud in that space between the top of the 500 feet and the bottom of the surface pipe. In support of that, I'd like 'to jump to Exhibit Number Seven, which is a stratigraphic table. The purpose of this is to show that between th~ bottom of our surface pipe and the top of our -- our pay zone, we have shales and hard silt. We have nothing in this space between the surface pipe and the top of the pay to indicate that there's any -- any permeability or any porosity, where there would be a possibility of a leak-off in the event we had a bad cement 3ob. We -- we can't see anything that would indicate that there's a -- that there would ever be a possibility of that. R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W. 3RD AVENUE; 1007 W. 3RD AVENUE 1135 IN. 8TH AVENUE 277-0572 277-8543 272-7515 272-3022 ANCHORAGE, ALASKA 99501 10 13 14 16 17 19 20 2] 22 23 24 25 29 This was further demonstrated several years ago when the people that were doing this work in Barrow in order to pump their Arctic Pack in between the nine and five-eighths and the seven-inch, they just pumped it down the annular space. I -- I talked to them. I asked them where it went. They didn't know. They just stayed after it and -- and it required a considerable amount of pressure. We have reason to believe from looking at some of the results in NSB Four that that mud went all the way to the top of the Barrow sandstone before it left the well bore. So that again would -- would indicate that there's nothing in there that -- that would take any mud or take any gas if there were a gas leak. Of course (ph), our casing is 23 pound N-80. It has a -- it has a collapse of 4,070 psi, and it has an internal yield of 6,340 pounds. We have a bottom hole pressure in this area in the neighborhood of plus or min'us 1,000 pounds, so we feel we're well protected from any damage to the pipe from pressure or -- we -- and we don't expect to have to frac these wells, we don't think we'll have to stimulate them, so there shouldn't be any undue pressure on the pipe. And, again, we. would -- we would like to be relieved of having to pump that additional cement above the 500 feet. We've had to change our methods a little bit, and, of course, as you go along with something like this, that's -- R & R COURT REPORTERS 81o N STREET, SUITE: 101 509 W. 3RD AVE:NUE: 1007 W. 3RD AVE:NUI=' !135 W. 8TH AVE:NUE: 277-0572 277-8543 272-7515 272-3022 ANCHORAGE:, ALASKA 99501 10 12 14 15 ]6 17 19 20 2! 22 24 25 3O that's bound to happen. We have a closed mud system. We don't have pits. We don't -- we don't even have an area of disposal. We have to keep it in tanks. On Number Three when we pumped our Arctic Pack, we had some contamination from the Arctic Pack in the mud through the F.O. Tool. This doesn't sound like anything real serious, but as it turned out, it is, because we have mud that's contaminated with diesel and other impurities. We -- we can't drill with it. We had to do something with it~ so we've got it in storage. So what we did on Number Four, we lowered that F.O. tool in order to cut short our displacement on our Arctic pack and not bring Jt around ~nto the mud system. That way we shouldn't have any contamination. Now, by lowering that F.O. tool, of course, that just puts us closer to the top of the -- the cement, and we feel like that if we were to get cement up into that F.O. tool during the primary cement job, there's a good possibility we could plug it. I know that people have circulated that, they circulate .it through the tool to clean it up. There again we're taking a chance on contaminating our mud. We also have to trip into the hold with drill pipe to shift that tool. And it's -- it would just account for a lot of extra work and -- and hazard. I think if we were to plug that tool, we'd end up with a perforating job in order to get our Arctic Pack in R & R COURT REPORTERS 810 N STREET, SUITE 101 BOg W. 3RD AVENUE 1007 W. 3RD AVENUE !13B W. STH AVENUE 277-0372 ~77-8343 ~'72-7615 2?2-30:'2 ANCHORAOE, A~S~ 99501 10 ]! ]2 ]4 ]6 ]7 ]8 19 20 2] 22 24 31 place. And after you've perforated that casing, we have a squeeze job in order to seal it. We then would have to go in and drill it out. I don't think in our thinking anyway that it's worth that when we feel that a normal cement job with the 500 plus feet above the pay would be adequate. And -- and we ask your indulgence in the -- having that option to not put the Econo Lite in there. Are there any questions before I go on on that? COMMISSIONER SMITH: But you are capable of putting it in? You have in these two wells? MR. CROUCH: We had in these two wells, yes, COMMISSIONER SMITH: And so if you can -- you have demonstrated that you can complete these wells and bring cement all the way up to the seal of the sur- -- surface casing? MR. CROUCH: We are not sure where that cement went. This Econo Lite -- we know it's in there. We put it in there. We calculated how much should be in there to fill it to the bottom of the surface, but in order to stay with our program and, of course, out there where we're working, it's -- you have to follow it fairly closely. So we've ha~ to run our bond log before any kind of curing has taken place, and to be real honest, it's a real ratty looking log, and we couldn't even pick a top of that Econo Lite cement. We could -- we R & R COURT REPORTERS STREET, SUITE IO1 BOg W. ~RD AVENUE 1OO? W. -~RD AVENUE 11SB W. STH AVENUE ANCHORAGE, ALASKA 99501 10 1! 12 14 15 16 17 19 20 21 22 23 24 25 32 could pick the top of the 500 feet, and if we were to run it now, we probably could see it after it's set, but it's a -- it's a type of cement that it just doesn't show on a bond log until it's completely cured and it -- it doesn't show. And when we turn in our report, and you get the logs and you look for it, I'm afraid you're not going to find it. You will just have to verify that we did pump it by our tickets and everything, because ..... So in answer to your question, again, we're not sure how high it came. It didn't -- apparently didn't get to the F.O. tool, because we didn't see cement when we circulated our Arctic Pack. COMMISSIONER SMITH: Well, the -- in spite of the -- you know, the casing design as being adequate, which we expect it to be adequate, you know, 'the cement has its special purposes in -- for holding the casing and protecting the casing and backing it up and making it stronger and over the - - over time element and sealing formations as well, and so there's a good reason to -- to have good cement 3obs and to demonstrate it some way or other. .And we might need to be more specific on the requirements of the cement bond log then in the future. Do you think if we -- if you ran cement bond logs, took the full cure time before you ran them then that 'tk,:~:~'~".::.% - - it would show adequately? R & R COURT REPORTERS 810 N STREE~ SUITE 101 BO9 ~ 3RD AVENUE 1007 ~ 3RD AVENUE 1135 ~ 8TH AVENUE 277-0B72 277.8543 272.7515 ~72-3022 ANCHORAGE, A~S~ 99501 10 11 12 14 16 19 20' 2! 22 24 25 33 MR. CROUCH: I don't know. I don't know that they would with that Econo Lite. We've not had that much experience with it. However, in talking with Halliburton they indicated that they didn't expect us to see any kind of a bond with that Econo Lite. Apparently it's -- well, I guess that's where it gets its name. It's -- it's exceptionally light for cement ..... COMMISSIONER SMITH: It's low density (ph). MR. CROUCH: ..... which we wanted because the way we're completing these and what we've seen happen in Walakpa Number Two and also Number One, there was an extensive amount of skin damage caused from cement, from mud. I think I mentioned when I was here about a month ago that they think -- I think the skin damage on Number Two was ?0. They think it would have been seven times as good a well without it or whatever -- whatever they estimated. We're trying to avoid that, so this is another reason that we're trying to avoid putting any more head because of cement. We fell like we've got enough with -- with nine-five mud and -- and the cement that, of course, we need to run to cover our pay. So we would like to not have to do that. We would like to be able to hold that head off. And again I say we're testing that well right now, but it looks like it's going to be a good well. It's not going to require any stimulation, and we think it -- that's in part -- 810 N STREE~ 8UI?EIO! ~77.0B72 R & R COURT REPORTERS 50gW.~RD AVENUE IO0?W,~RD AVENUE 113BW, STH AVENUE ~77-8543 27a.7515 ~72-3022 ANCHORAOg, ALASKA OOB01 l0 ]2 14 16 l? 19 20 21 22 23 24 34 of course, that's a beautiful sand, but also we think by keeping it clean and holding our head down, our hydrostatic head, has been a big help. As far as running the bond log after the curing time, whatever that may be on the Econo Lite, the way we have to complete these, we're working on ice pads, we're working on -- off ice roads. We don't have a work-over unit. We have the drilling unit. We have to take advantage of it when it's on a particular hole. The way we're completing the --'the wells as you can see from 'this schematic, as soon as we get our pipes set, get our production logs run, have our Arctic Pack put in place, we reverse the hole, we displace the mud in the hole with diesel and run a tubing -- tubing Vann gun, and this is what we're perforating with. And the Vann gun is a permanent part of the bottom of that tubing. We run it in, we locate it across the pay zone. The Christmas tree's installed, the piping is -- in installed, ready to produce. And then the rig is moved off, and we don't perforate until the rig is -- is completely off the well. In fact in Number Three we didn't perforate it until we had our house in place. We -- we didn't want to take a chance on breaking a valve off or whatever by putting your house on. So the rig is gone by the time we perforate. It may be only three days. I expect -- they set pipe on Number Four two nights ago I guess. We could very possibly be perforating R & R COURT REPORTERS 810 N STREET. SUITE 101 509 W. 3RD AVENUE 1007 W. 3RD AVENUE 1135 W. 8TH AVENUE 377.0573 ~77.8Ei43 272.7811B 270.3022 ANCHORAGE, ALASKA ggB01 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 35 that tomorrow. And it just -- there -- there would be no way that I can think of that we'd be able to do that. We have to run that log when the hole is open and when we're rigged up on the hole with the rig. It just -- it just wouldn't work to be able to come back later. COMMISSIONER SMITH: So what you're saying is the cementing technique, or bringing the cement up all the way isn't accommodated by your completion technique or design. There are other ways of accomplishing it obviously. Settin~ the pipe above the pay, getting good cement all the way up, run the bond log to verify and then either completion the zone with a liner or however you -- an open hole or however you chose, but there-- there's a lot of other options there, is that right? MR. CROUCH: Right. Right. MR. CROUCH: And I suppose you might go to something like that if we insisted on cement all the way up. It would ..... MR. CROUCH: Well, COMMISSIONER SMITH: You might reconsider your completion technique? MR. CROUCH: Probably not. If you insist that we run that cement all the way up, we'll do it. I mean, we will remain ..... COMMISSIONER SMITH: Yeah. F! & FI ¢OUFIT I~E;PORTI=Fi$ 810 N BTREET, SUITE 101 BOg W. :~RD AVENUE 1007 W, :~RD AVENUE 11~B W, 8TH AV~NU~ 277.057~ ~77.854~ 272.7515 ~7~.~0~ ANCHORAGE, A~8~ ~gg01 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. CROUCH: ..... in compliance with the Commission's wishes. But again I -- I hope you don't, because the type of completion that we're -- we're attempting, it -- obviously we've been able to do it. We've done it on two, but we were very uncomfortable with that F.O. tool when we did it, so -- it seems like where we are everything takes so much longer to do. If we were on dirt and we had a pulling unit where we could sail in and out of the hole with a tubing or whatever, it wouldn't be so bad. Blat out there where we are and the weather conditions and with a drilling rig and drilling rigs are notorious for being poor completion tools, it seems like it takes them forever to do anything, to run their pipe and -- so it's possible that that F.O. tool could be plugged and the cement could be set up in it. Enough to -- at least enough to contaminate it to the point where we couldn't open it by the time we could get in 'the hole with drill pipe and get the thing open. So it -- it makes us very uncomfortable I guess is what I'm saying. It's not -- it's not something we absolutely can't live with, because we've shown that we can, but again I'd say we would really prefer not to. COMMISSIONER DOUGLASS: Bill, how long did it -- you mentioned the Econo Lite not setting up apparently as quick as the -- the lower section of cement. What kind of time is involved before you would expect to see that top on 810 N 8TRE:E:T, SUITE: 101 80g W, ~RD AVENUE 1007 W. SRD AV~NUK 11S8 W. 8TH AV~NU~ ~77-057~ 277.054~ ~7~.7515 ANCHORAOE, ALA8~ ggB01 ]0 12 14 16 ]7 19 2O 2! 22 24 25 37 a -- on a bond log? MR. CROUCH: I'm not real sure when you would see it. The working time on Econo Lite is not any greater really than regular permafrost cement. The strength time is -- is real poor. It -- it just drags on forever. We're talking about not hours but days, and I think it may -- it meets -- it reaches maximum compressive strength in something like nine days. So it's -- it's just not a high strength cement. It's -- and consequently it doesn't show when you run the bond log. You can't tell the -- can't hardly tell it's even there. So I -- I don't really know how long it would take before you'd see it. And I'm not sure what it would look like after you ran it, because we've never used it before. This is a Halliburton blend, and they recommended it when we talked to them about trying to hold down the hydrostatic head as possibly -- as low as we co'uld. And this is -- this is a cement that they use for that purpose. And -- and I can't even tell you where it's most popular. I don't know where they're running it, but they -- they certainly didn't have any trouble -- we got it up here without any problem. And so I -- I guess I'll just have to plead ignorance. I don't know that much about it, except it is lighter. COMMISSIONER DOUGLASS: Okay. COMMISSIONER JOHNSON: Have you encountered any fresh water sands out there? R & R COURT REPORTERS 810 N STREET, SUITE 101 SOe W. ;~RD AVENUE 1007 W, -~RD AVENUE 11~5 W, STH AVENUE 277.0572 277-854~ 272.7515 272-:~022 ANCHO~AO~, A~S~ ggS01 l0 ]2 14 16 17 19 20 2] 22 23 24 25 38 MR. CROUCH: No, none that we -- none that we know of, and we haven't really seen anything that -- that would be any kind of an aquifer. I don't -- I think possibly I should direct that to Richard, because he knows more about the geology or the stratigraphy than I do, but I don't think there's anything in the permafrost, and there's certainly nothing that looks like a water sand that -- between the bottom of the permafrost and the top of our pay. COMMISSIONER SMITH: Well, your proposed completion technique is with the 'tubing in place and with no packer, and would you -- do you want to expand on that from the standpoint of the production aspect and Exhibit A? MR. CROUCH: Right. Right. I -- that was the next step. We've found that -- let me see, possibly I should go to -- well, before I take this exhibit down, of course, with the Vann guns, in order to space that Vann gun properly to get it across our pay zone, it would be -- well, I'm not going to say impossible, but it would be certainly hard to have a packe~ in the hole while you did that. Of course, the main reason that we don't Pun packers and 'that we ask to be relieved of that -- that one ~egulation and which we have been up to now -- excuse me, up to now, and -- but we would like to continue, that's AAC 25.200(d), we found in the Ba~ow field, and the people before us have found that in o~der to p~oduce R & R COURT REPORTERS 810 N STREET, SUITE t01 509 W, 3RD AVENUE 1007 W. 3RD AVENUE 1135 W. 8TH AVENUE 277-0572 277.8543 27~-7515 272-3022 ANCHORAGE, ALASKA 99501 l0 ]! ]2 14 ]6 17 19 20 2] 22 23 24 25 39 these wells without hydrate freezing, we have to produce them up the annulus. They -- they have a tendency to freeze in the tubing or form hydrates, and I have some exhibits to show that will go into that a little bit. So that's the main reason that we don't want to run a packer. While we have this exhibit, if you'll notice we also have a string of stainless steel tubing attached to the tubing, and it goes down just above the top of the pay zone. We have that in there in order to lubricate methanol down hole to prevent any hydrate formation. And there again with a packer it would be very awkward. We'd have to have a specJ.~l packer with special ports and just -- just another reason to not want to r'un a packer. If we go to -- if we go to -- I'll skip to Exhibit Nine while we're talking about packers and hydrate formation and -- Last summer the North Slope Borough contacted Dr. Kelly at the University in Fairbanks and they formed an advisory committee to, oh, if you will kind of look over our shoulder, see what they thought of the -- the geology and -- and our completion methods. This was composed of about 15 different people from all over Alaska and all over the country. This chart is -- is taken from that advisory committee's report. This was prepared by Dendy Sloan who is a professor at the Colorado School of Mines and has done extensive amount of work with hydrates. R & R COURT REPORTERS 810 N STREET, SUIT£ 101 509 W. -'~RD AVENUE 1007 W. :~RD AVENUE 1155 W. 8TH AVENUE 277-0572 277-854:3 272.7515 272-3022 ANCHORAGE:, ALASKA 99501 10 12 14 ]6 ]7 ]9 20 2] 22 23 24 4O This is one of the problems that we have, and it's a real bad problem ~n the Barrow area. Fortunately we're going to be relieved of that a little bit in the Walakpa area because our bottom hole temperature is running between 70 and 72 degrees, where we have encountered temperatures, for example, in NSB Six, a bottom hole temperature of only 48 degrees. But anyway, this -- the straight line that cuts through those curves is representative of the geothermal gradient in the Barrow Field. And as you can see, they call this the hydrate envelope, and this is the part of the curves that are on the right-hand side of your -- of your geothermal gradient. And any place within that curve, or that envelop, you're subject to hydrate formation, and it can form not only, we found it, it will form back in the formation, it will form in the tubing, it will form ~n the bottom of 'the casing. The dashed line is Walakpa Number Two, and as you can see, by having a higher bottom hole temperature, it lessens the size of that envelop and possibly wc wouldn't have any problems with hydrates except at high rates of prod'uction, which they discovered they did have when they were testing that well back in the late 70s or early.80s. They froze it off, but they were producing it up the tubing. We found that you go through the tubing, of course, you get into a higher velocity. It has a tendency to carry those hydrates higher. R &~ R COURT REPORTERS 81o N STREET, SUITE 101 BOg W. 3RD AVENUE 1007 W. 3RD AVENUE 113B W. 8TH AVENUE 277.0572 ;277.854~ 272.7515 272.3022 ANCHORAGE, AI.ASKA ~9501 10 1! 12 13 14 15 16 17 18 19 2O 21 22 24 25 41 It also has a cooling effect, and going through that -- that Vann gun would probably have a cooling effect. And this is 3ust another reason that -- that we -- we appreciate the relief from having to comply with the packer requirement. We -- we found that we just can't produce these wells with any kind of continuity with -- with that kind of an assembly. Some of the wells in -- in South Barrow, NSB Six, NSB Four and Five, and East Barrow 19 had heat strings in them. They put those in there several years ago and the purpose of that was they ran an extra string of four-inch casing. They pumped hot glycol down between the four-inch and the seven- inch, back up between the four-inch and the two-inch tubing. the idea was to heat that formation, or heat the hole down towards the bottom. It also had a permanent packer in it where they had to produce through 'the tubing. As it turned out, by the time you pump hot glycol through 1200 feet of permafrost, you've lost all your heat, or all your effective heat. So that part didn't work. Being stuck with the packer, you had to produce up the tubing, and they had freeze ups. I know Number Six froze up once, and it ...... it took two weeks to thaw it. And if you'll possibly remember, we asked that we be able to perforate that tubing above the packer so we could have annular flow, and, of course, the Commission granted our request and we were -- we R & R COURT RE, PORT;RS 810 N ~TRE:~'T, ~UITE 101 BOg W, ~RD AVE:NU~' 1007 W. ~RD AV~NU~ 11~B W, 8TH AVENU; 277.0572 277.854~ ~7~.751B ~7~.~0~ ANCHORAGe, A~S~ 99501 l0 ]6 ]7 20 21 22 23 24 42 are able to produce that well now up the casing where before we 3ust -- we 3ust couldn't do it. We -- we were limited to the point where it wasn't hard- -- hardly even worth turning it on. So that -- that's our argument for -- or our request, not really an argument, that we be relieved of the -- of the packer plan. COMMISSIONER SMITH: Bill, in any of those wells, and Number Six, I -- or -- have you ever used larger than two and three-eighths tubing for completion? MR. CROUCH: Yeah. There's two and seven- eighths tubing in a lot of the South Barrow Field wells. In fact, I think there's two and seven-eighths tubing in East Barrow 19 that had the yeast -- or had the heat string. And I'm not sure about NSB Six. I'd -- I'd have to look. But I think some of the old wells that Husky drilled and completed back in the ?Os have three and a half tubing' in them. We've never really had a real problem in the South Field because there -- there are no packers there, of course, and we haven't had to pull those as hard as we have here in the last say two years, which is really the reason that we're in Walakpa drilling right now, because they came just awful close to having not enough gas. So we've had to pull the wells harder than we normally would. And -- and that's why we've frozen some of those southern wells off. But the South R & R COURT REPORTERS 810 N STREET, SUITE 101 BOg W, 3RD AVENUE 1007 W, 3RD AVENUE !135 W, 8TH AVENUE 277.0B72 277-8843 27~-TBIB 272.:B022 ANCHORAGE, ALASI(A 99B01 10 ]1 12 13 ]4 15 16 17 18 19 20 21 22 23 24 43 Field -- the -- the three or four wells that I mentioned are the only ones that I know of that have had -- ever had packers in them, and they have various sized tubing. But we -- we produce all of them up the annulus. We seem to have a natural separation program by doing that, too. With the permafrost your velocity is low. The -- what little moisture that we have, which is enough obviously to freeze this off, has a tendency to fall out when the gas comes up the annulus and hits the cold permafrost. And we don't ever have to bring it up high enough to where it causes a problem, so that helps. That helps us produce. It's sort of a built-in refrigeration unit I guess. But we 3ust found that that's -- that's the only practical way to produce these wells in the ..... COMMISSIONER SMITH: Bill, am I right in ..... MR. CROUCH: ..... Barrow area. COMMISSIONER SMITH: ..... thinking that -- that the moisture content, or freezing from -- from water being -- being involved is different than freezing from the hydrates? The -- the hydrate is from the methane gas? MR. CROUCH: Right. Water would com- -- it does compound it. And, of course, the hydrate formation, the -- the composition -- it has some water in it, but it's not a -- not a water base fluid or -- or ice, whatever. Yo~ can -- you can tell the difference when you blow it out. R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W. ~RD AVENUE 1007 W. 3RD AVENUE 1135 W. 5TH AVENUE 277.0572 277-8543 272.7515 272-3022 ANCHORAGE, ALASKA 99501 ]0 12 14 16 ]7 ]9 20 2! 22 23 24 25 44 You've probably seen it. Hydrate ice is just like popcorn. It will just -- when it starts to thaw, you can hear it, where ice -- ice is just -- there's a big difference, so -- But water does -- water does compound the problem. We don't expect any water in -- in Walakpa. It doesn't -- in fact the log calculations are extremely low. I think they're down in the, what, lower 30s and -- and 20s on water saturation, which is real good. And I -- that was a question that we had when I was here before. We were talking about Number One and Number Two -- Walakpa Number One and Number Two and water. And I went back and reviewed those tests that they'd made and there's -- there's no mention of water at all. However, they did freeze Number Two off in the tubing, probably in the wellhead. But they were flowing .it at about three million a day, and I think that.the pressure drop is what caused that problem. But there's -- there's no indication that there's any water in it at all. And -- of course, it's too early for us 'to know with our testing, but we'll -- we'll find out. But I would be real surprised if there's hardly any moisture at all in this. This is Exhibit Number Eight. It's a well schematic. Now this is a rea]. rough picture of what we plan to do. We double-valved the tubing, and we double-valved the annulus R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W. 3RD AVENUE 1007 W. 3RD AVENUE 1135 W, 8TH AVENUE 277-0572 277-8543 272-7515 272-3022 ANCHORAGE, ALASKA 99501 l0 14 16 17 19 20 2! 22 23 24 45 that we produce through. This field will be remotely controlled from the South field and the automatic and remote control valve that I've shown here will probably be more than one. We'll have a high- low shut-off -- automatic shut-off valve, probably have a remote control shut-off valve, and this will be our safety measures to shut the well in in case we do ever have any kind of a problem with -- with the line. And it really -- that's -- that's about al/ this represents is 3ust roughly how we plan to hook it up. COMMISSIONER SMITH: So that automatic surface valve there really constitutes a surface safety valve? MR. CROUCH: That's right. That's right. That's -- that's what's in place in all the -- all the other wells in -- in the South Barrow and East Barrow Field now. They have this surface safety valve, and we'll continue with that. Plus a remote controlled shut-off valve. COMMISSIONER SMITH: Then you recommend that that's what these wells have? MR. CROUCH: Yes. Yes. COMMISSIONER SMITH: Because our state-wide rule has the option for covering the wells, other than those off shore with surface and subsurface safety valves, but in this case it looks like it would be a recommendation that they have a surface safety' valve only? 310 N STREE~ SUITEI01 277-0572 R &: R COURT REPORTERS 509 w. 3RD AVENUE 1007 W. 3RD AVENUE !135 W. 8TH AVENUE 277-8543 272-7515 272-3022 ANCHORAGE, ALASKA 99501 10 ]1 12 14 ]6 17 19 20 2] 22 2S 24 25 46 MR. CROUCH: We would like to ask that, yes. I believe that's pretty much my presentation, unless there are more questions, or if there are more that -- more things that we need to cover in -- in forming pool rules. I'm not that familiar with -- with how you do that, but whatever it is, we'll be glad to follow it. COMMISSIONER JOHNSON: Thanks, Bill. I think it might be appropriate at this time to take a short break and then the Commission can huddle to see what other additional questions we may have to ask of the two witnesses here. So with that, I note the time is approximately 10:24. We'll break for approximately ten. minu'tes or so. MR. CROUCH: .All ipigh't. (Off record) (On record) COMMISSIONER JOHNSON: Okay. If we can 9o back on record, the time is approximately 10:41. We had 3ust prior to the break -- to the break, Bill Couch was providing testimony. I believe you had basically concluded with your testimony' and opened it to any questions that the Commission may have? MR. CROUCH: That's correct. COMMISSIONER JOHNSON: I -- I guess I do have one question relative to the tubing and the packer requirement. You're indicating that the --'that you .... one of R & R COURT REPORTERS 810 N STREET, SUITE 10! S09 W. SRD AVENUE 1007 W. SRD AVENUE 113B W. 8TH AVENUE 277-0572 277-8543 272-7515 272-3022 ANCHORAGE, ALASKA 99501 l0 14 16 20 2! 22 24 47 the reasons anyway why you did not want to have the -- the requirement of a packer being installed is it would allow you to produce up the annulus which would remedy some of your freezing problems that you've experienced in the East Barrow Field I guess it was. Why -- I guess I would like to pursue -- pursue with you the idea of using a larger diameter tubing and a packer. Would -- would a larger diameter tubing alleviate freezing problems? MR. CROUCH: Possibly some, but the way we produce these, it still wouldn't solve our problem. As that moisture condenses and falls back into the -- the bottom of the casing, we're able to go out periodically and pop the tubing open and blow that mist out. And that's what it is, is a mist. However, it does -- if it isn't blown out, it will build up to the point where you have an accumulation. It reduces your bottom hole pressure because of the hydrostatic head, and it's the only way that we feel that we can keep the wells clean. And, of course, again as I said, even going up a big -- big tubing, if .it were 'too big, then we wouldn't be able to get the velocity that we'd need to unload it. We very possibly could still have a freezing problem in the tubing' if we tried to produce it at high rates. And when I say high rates, I mean rates that are as high as what we're able to R & R COURT REPORTERS STREET, SUITE: 101 B09 W. :~RD AVENUE 1007 W. :SRD AVENUE 11:~B W, 8TH AVENUE ANCHORAGE, ALASKA 99501 l0 14 16 17 19 20 2] 22 24 48 produce up the annulus. So I -- I would -- in answer to your question, I would have to say, yes, if you go bigger and bigger, you reduce the problem, but we still feel that you would have a problem, and the way we're -- we're doing it now -- we have a problem now, but we've -- we've reduced it to the point where we can live with it. COMMISSIONER JOHNSON: Okay. How much of a moisture problem do you expect in the Walakpa wells? MR. CROUCH: We don't expect to have as much of a problem down here where we are now as we did in the East Field and South Field. For one thing, we're producing from a different formation. It looks a lot cleaner. The water saturation calculates to be lower, and, of course, as I mentioned, we have a higher bottom-hole temperature which -- which really is -- is going to be a big help to us. So we don't expect problems, although we do know that there is hydrates present. We do know from the tests 'that Husky made you can freeze them off if you produce them too hard at that tubing, which is what they did. And that well, Walakpa Two has two and seven-eighths tubing in it. It doesn't have small tubing in it. So -- but they did -- they did freeze it off during their productions tests. COMMISSIONER DOUGLASS: Bill, have you -- or, Richard, either one, have you determined an initial reservoir R & R COURT REPORTERS 810 N STREET, SUITE 101 BOg W. 3RD AVENUE I007 W. 3RD AVENUE 1135 W, 8TH AVENUE 277-0$72 277-8S4~ ~7~-7S1B 272.:~02~ ANCHORAGE, ALASKA 99501 ]0 13 ]4 15 16 ]7 ]8 ]9 20 2! 22 24 25 49 pressure? MR. CROUCH: We haven't. We will. We're going to move our wire line unit down there while we still have an ice road. COMMISSIONER DOUGLASS: Uh-huh. MR. CROUCH: And we're going to do some extensive testing, hopefully this -- still this winter or within the next month. We need it for our own purposes. You need it, you -- you require it ..... COMMISSIONER DOUGLASS: Yes, it's required. MR. CROUCH: ..... and it's something that we want. They had a bottom hole pressure in that Walakpa Two of 1069 at 2606. We're working with surface pressures, and we're not -- we're not seeing anything that high yet. We're looking at -- in the -- oh, possibly 1,000 pounds. I don't know whether it's because we still have some completion fluid in the hole. But we run a bottom hole bomb in there, we'll -- we'll know that. And we do intend to do that. COMMISSIONER DOUGLASS: Okay. And we'll -- we'll need that. Bottom hole pressure and a -- and a datum ..... MR. CROUCH: COMMISSIONER DOUGLASS: ..... that we can establish. MR. CROUCH: Right. We'll. establish datum and 810 N STREE~ SUITEI01 277-0572 R &: R COURT REPORTERS 509 W. 3RD AVENUE 1007 W. 3RD AVENUE 277-8543 272-7515 ANCHORAGE, ALASKA 99501 1133W. 8TH AVENUE 272.3022 ]0 ]4 16 ]7 ]8 ]9 20 2] 22 23 24 25 we'll correct everything to that and, of course, like I say', we intend to do some extensive testing. We want to get some good four points on all of them as we -- hopefully as we go. This -- this has been a question that a lot of people have asked us. "How can you set up a four-well drilling program and just go from one to the other until you know what you've got?" Well, we've got a lot of confidence in the geologists I guess. But as it's turned out, 'they were well- founded to have that kind of confidence, because it's turning out just like we had hoped it would. So the tests we're making now are just something to just show that we do have a gas well, but we will ..... COMMISSIONER DOUGLASS: And, you know~ the ..... MR. CROUCH: ..... (indiscernible, simultaneo'us 50 speech) tests. COMMISSIONER DOUGLASS: ..... testing of gas wells is also required. MR. CROUCH: What's that? COMMISSIONER DOUGLASS: Testing of gas wells is also required by ..... MR. CROUCH: Yes~ that's what I say. We -- we'll get the complete tests just as soon as we possibly can. COMMISSIONER DOUGLASS: How about gas sample? Have you taken a sample and -- and assayed the sample? R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W. 3RD AVENUE 1007 W. 3RD AVENUE 1135 W. 8TH AVENUE 277-0572 277-854:~ 272-7515 272-:~022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 51 MR. GLENN: The Commission ..... MR. CROUCH: I don't know. MR. GLENN: ..... the -- the gas was sampled from Wa!akpa Number Two and we have evacuated cylinders to sample each of our wells. They'll -- the chemistry will be analyzed by the USGS in a 3oint pro3ect they're working on with me. COMMISSIONER DOUGLASS: Okay. Well, we'd like to see what you get ..... MR. GLENN: You'll -- you'll -- I'll furnish ..... COMMISSIONER DOUGLASS: ..... (indiscernible, simultaneous speech) required ..... MR. GLENN: ..... you with every -- all the information. available. COMMISSIONER DOUGLASS: ..... as soon as it is MR. GLENN: We're using it for hydrate stability calculations, figuring out the exact composition of the gas to determine what temperature the hydr~.te forms at. MR. CROUCH: That Exhibit that I had on the hydrate curve, the reason for the three curve~ are three different compositions of gas, and this is partly what Richard's talking about. COMMISSIONER SMITH: With regard to looking R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W. 3RD AVENUE 1007 W. 3RD AVENUE 1155 W, 8TH AVENUE 277-0572 277.8543 272-7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 16 17 18 19 2O 21 22 23 24 52 towards development of some of these rules, for the definition of a pool, vertical definition, we normally require or have a type from one of the wells that you use as your base and give us the in- -- the production interval in that well, and then we use that as the base, and then any future wells that are correlated with that one, or may be. Would you like to specify which well would be your type well and the log from that well and what the pay interval would be in that well? MR. CROUCH: Would you want to ..... MR. GLENN: Exhibit Number Three's log. MR. CROUCH: Well, yeah, we've got ...... COMMISSIONER DOUGLASS: Well, we've got Number ..... MR. CROUCH: ..... I was going to say ..... COMMISSIONER DOUGLASS: ..... Three on Exhibit Five that you correlated already ..... MR. GLENN: Yeah, I've -- I've got a ..... COMMISSIONER DOUGLASS: ..... if -- if 'thatl would be ..... MR. GLENN: ..... with my things here, I've got a suite of logs for Number Three I could leave with you. It would take some -- if -- what you're saying is it will take some written description of -- description of the pay zone interval and ..... ? COMMISSIONER SMITH: Well, like the -- the 810 N STREE~ SUITE101 277-0572 R 8¢ R COURT REPORTERS 509 w. 3RD AVENUE 1007 W. 3RD AVENUE !135 W. 8TH AVENUE 277.8543 27;2-7515 272-3022 ANCHORAGE, ALASKA 99501 ]0 11 12 14 16 17 18 19 20 2] 22 23 24 53 Rule Two for the current Barrow Gas Pool there, you know, we've stated here that the South Barrow Gas Pool and East Barrow Gas Pool are defined as the accumulations of gas which are common to and which -- which correlate with the accumulations found in the North Slope Borough's Number 13, North Slope -- Slope Borough South Barrow Number 13 Well, between the measured depths of 2210 and 2472. That ..... MR. GLENN: Okay. We can do that. COMMISSIONER SMITH: ..... pins it down very specifically that anyone then can in the future correlate with that interval. MR. CROUCH: Do we have a complete set of logs on -- on Number Two? MR. GLENN: Not here. MR. CROUCH: Probably not. I mean, I was going to suggest Walakpa Two might be the best since it's probably going to be the -- the furtherest south well that we have, or the closest to the border, but it may not be representative of the kind of wells that we hope we get in the others, maybe we ought to say Number Three. MR. GLENN: I can furnish you with at a later 'time with a description like you just gave me. COMMISSIONER SMITH: Okay. COMMISSIONER JOHNSON: Okay. So we'll be using the Walakpa Number Three as the type well for the R & R COURT REPORTERS 810 N STREET, SUITE 10! 509 W. SRD AVENUE 1007 W. 3RD AVENUE 113S W. 8TH AVENUE 277-05'72 277-854~ 272-7515 272.3022 ANCHORAGE, ALASKA 99501 10 1! 12 13 14 15 16 17 18 ]9 2O 21 22 23 24 25 54 accumulation? Richard? That's fine. MR. CROUCH: Does that sound all right, MR. GLENN: I don't see any problem with that. COMMISSIONER JOHNSON: Okay. And can you give us the depth in Walakpa Number Three that the Walakpa sands would be found? MR. GLENN: These are Kelly Bushing depths. If you wanted depth from surface you just subtract around 12 feet. From around 2370 -- I'm working off a two-inch log. I can get the five-inch log to get a more accurate -- but about 2370 to 2396. COMMISSIONER JOHNSON: Okay. If in your review of the five-inch log you wish to modify those depths, would you please contact and let us know? MR. GLENN: I'm looking at it right now. COMMISSIONER JOHNSON: Bill, have you estimated how much -- or have a rough estimate of how much gas you have in this accumulation? Any ideas? MR. CROUCH: I did before we even started drilling one time, and this is rough, I took the area between Number One and Number Two, a mile wide, and we're talking about something in excess of 30 billion cubic feet in pi. ace. Now, when we get pressures, good, reliable pressures, R & R COURT REPORTERS 810 N STREET, SUITE 101 S09 W. 3RD AVENUE 1007 W. 3RD AVENUE 113B W. 8TH AVENUE 277-0572 277-854~ 272-7515 272-3022 ANCHORAGE, ALASKA 99501 ]0 !2 !4 !6 !7 !8 !9 20 2! 22 23 24 55 I'll be able to do some reservoir work and probably make some volumetric calculations. By then we will have drilled Number Five and Number Six, which will expand our area a little bit. I'll just have to make it within the area that wc know and then we probably won't have these on production until at earliest a year from now. So we won't be able to make any material balance calculations that would really pin it down, but I can make some volumetric calculations, and -- and we'll be happy to furnish that information to you as we go along. COMMISSIONER JOHNSON: We'd appreciate that MR. CROUCH: .All right. COMMISSIONER JOHNSON: ..... when you have them. MR. CROUCH:~ Would be happy to do that. COMMISSIONER JOHNSON: What -- well, thi~ may be a little bit premature, but what kind of rates do you expect to produce these wells? MR. CROUCH: We have a demand in Barrow, in Barrow and the DEW Line and Marrow (ph), a peak demand of a little over 5 million a day. The average is more in the neighborhood of 4 million, and that's -- that's what we'll produce them at. We -- we'll never exceed the demand, because obviously we don't have any place to put it, but we can -- we can size a lot of our equipment and our gathering systems, R & R COURT REPORTERS 810 N STREET, SUITE 101 509 W. :~RD AVENUE 1007 W. 3RD AVENUE 113B W, 8TH AVENUE 277-0572 277-854:~ 272-7515 272.3022 ANCHORAGE, ALASKA 99501 ]0 ]! 14 16 17 ]8 ]9 2O 2! 22 23 24 56 whatever, because of knowing that demand, and the number -- the magic number that I used, and I don't know that we'll ever reach it, is 10 million a day, and this will be from nine wells. So I would say that probably the hardest we'd pull them will be a million a day. COMMISSIONER JOHNSON: So do you feel that this accumulation may satisfy Barrow's needs for quite some time? MR. CROUCH: We think this will put them back in the gas business for a long time. And from what we've seen, from the size and the geology, the thing could really' be huge. If -- if we will out this area of interest, that's going to be big, because we're on 640s, and, of course, we intend to -- to keep them on 640s even though we did ask for the 16Os, mainly because of convenience when we're out there and we don't really now what we're going to run into reservoir-wise or topographically with these lakes, but if we -- and we will probably -- in all probability if these wells continue to look like the first two that we've drilled, I doubt that there will ever be at least -- Well, I shouldn't say there may never be, because I don't know what they will do with it, but we'd probably in our program won't drill any more than the eight wells. That will be more than enough gas for the -- the village and there 3ust would be no reason to, R & R COURT REPORTERS 810 N STREE~ SUITE 101 509 ~ 3RD AVENUE 1007 ~ 3RD AVENUE 1135 ~ 8TH AVENUE 277-0572 277.8543 272-7515 272-3022 ANCHORAOE, A~S~ 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 57 unless someone wanted to just explore it and expand or delineate the -- the reservoir. Which would be nice. It CC~M~SSIONER JOHNSON: Now, getting back to the -- to the ownership of this -- of this area, as I understand it, it -- the subsurface oil and gas rights would be owned by the Arctic Slope Regional Corporation or -- No, excuse me, ..... Borough. MR. GLENN: No. COMMISSIONER JOHNSON: ..... North Slopo MR. GLENN: Subsurface gas rights belong to the North Slope Borough. COMMISSIONER JOHNSON: That's right. MR. GLENN: The -- if there's oil present, it belongs to Arctic Slope Regional Corporation. COMMISSIONER JOHNSON: Okay. And this is all a matter of -- matter of public record with the BLM, is that correct? MR. GLENN: This is -- yeah, this is -- 'this was an act of Congress. COMMISSIONER JOHNSON: Okay. And your closest change of ownership is how many miles away? MR. CROUCH: Two miles from Number Two I think, isn't it, Richard? R & R COURT RE:PORTE:RS 81o N STREET, SUITE 101 509 W, :~RD AVENUE 100'; W. ~RD AVENUE 11:~5 W. eTH AVENUE 277.0572 277'854~i 27~.TSIE ~72.3022 ANCHORAGE, A~8~ 99501 10 12 ]4 16 17 18 ]9 20 2] 22 23 24 25 58 MR. GLENN: Yeah. MR. CROUCH: South. MR. GLENN: This way. About two miles south of Walakpa Number Two, and the ownership there changes from the -- well, the surface belongs to Arctic Slope Regional Corporation, surface and subsurface outside of these transfer act lands we call them. COMMISSIONER JOHNSON: Any questions? COMMISSIONER SMITH: Bill, based on this 160- acre spacing and knowing that you may shift the wells around because of the surface topography and things, do you have a number in mind for how far of a stand-off there should be between wells? How close they should be allowed? MR. CROUCH: Well, I would hate to see us ever have to drill 160 or even a 320 the way it looks. The reason we asked for that was -- was to 3ust -- in the event we drilled a well and it was bad or we -- we didn't feel like we had it completed right or whatever, we could -- we could off- set it within that 160, assuming that it didn't produce. I would think -- let's see, 16Os, that would be a half mile, wouldn't it, between -- between wells, is that right? So ..... COMMISSIONER SMITH: So you would have no problem if we set a minimum of 1,000 feet between wells? MR. CROUCH: Oh, no. R~RCOURTR£PORT£R$ 810 N STREE~ SUITE 101 BOB ~ 3RD AVENUE 1007 ~ 3RD AVENUE 1135 ~ 8TH AVENUE 277-0572 277-8543 272.7515 272.3022 ANCHORAGE, A~S~ 99501 10 11 12 13 14 16 17 18 19 20 21 22 23 24 25 59 COMMISSIONER SMITH: Okay. MR. CROUCH: No. No, not at all. MR. GLENN: I've got a better pick on the ~,~.'~val in the type log. On Kelly Bushing depths it goes from 2368 to 2395 for the pay zone. COMMISSIONER SMITH: What will you consider the datum there? MR. GLENN: That's -- the datum is sea level, but -the -- tkese are Kelly Bushing depths, so you -- you would subtract Kelly Bushing elevation, and you would be from -- working from the surface, or you subtract -- you'd be working from sea level if you subtract the Kelly Bushing elevation. COMMISSIONER JOHNSON: And that was at 12 feet? MR. GLENN: No, the Kelly Bushing elevation is 57 feet. It sits ..... COMMISSIONER JOHNSON: Oh, I'm ..... MR. GLENN: ..... 12 feet above the ground. COMMISSIONER JOHNSON: Okay. That sounds ..... COMMISSIONER SMITH: Well, I think the datum isn't it, Russ, where you -- like. it's an average in the pay ..... COMMISSIONER DOUGLASS: You're talking about MR. CROUCH: The mid point? 810 N STREE~ SUITE101 277.0572 R 8¢ R COURT REPORTERS 15o9 w. -'~RD AVENUE !007 W. 3RD AVENUE 277.8543 272.7515 ANCHORAGE, ALASKA 99501 1135 W, 8TH AVENUE 272-3022 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 to ..... ? 60 COMMISSIONER DOUGLASS: ..... mid-pressure ..... COMMISSIONER SMITH: ..... (indiscernible) ..... COMMISSIONER DOUGLASS: ..... datum as opposed COMMISSIONER SMITH: Yeah. Yeah, reservoir pressure datum is what I was thinking of terms with, that's right. MR. CROUCH: Probably -- probably the middle of the purse. COMMISSIONER DOUGLASS: Well, I -- for the over-all accumulation ..... MR. CROUCH: Yeah. COMMISSIONER DOUGLASS: ..... it's -- it's to pick a datum that ..... MR. CROUCH: Oh, well, ..... COMMISSIONER DOUGLASS: ..... you correct all your pressures back for all your wells. I figured ..... MR. CROUCH: Well, if we said COMMISSIONER DOUGLASS: ..... (indiscernible). MR. CROUCH: ..... Number Three, like ..... COMMISSIONER DOUGLASS: Well, it -- that doesn't -- it -- just Number Three doesn't ..... MR.. CROUCH: Yeah. We'll ..... COMMISSIONER DOUGLASS: ..... have to be the criteria for setting the -- the reservoir pressure datum. R & R COURT REPORTERS 81o N STREET, SUITE 101 BOg W. 3RD AVENUE 1007 W. 3RD AVENUE 1135 W. STH AVENUE 277.0572 277-8343 272-7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 61 MR. GLENN: Okay. MR. CROUCH: Yeah. COMMISSIONER DOUGLASS: Yeah, the datum would just be an average datum that -- that you would feel comfortable with in -- in the area of -- of question, such as you could just say 2600 feet might be a good ..... MR. CROUCH: Oh, yeah, I see. COMMISSIONER DOUGLASS: ..... a good datum point ..... pressure. MR. CROUCH: Right. COMMISSIONER DOUGLASS: ..... for -- for MR. CROUCH:. Possibly we'll go to Number Two since it's going to be the lowest well, and correct everything to it so we'll have the same datum to work with. that's it, ..... COMMISSIONER DOUGLASS: Yeah. That's -- MR. CROUCH: Yeah. COMMISSIONER DOUGLASS: ..... to establish a datum and then all the ..... would take ..... MR. CROUCH: Everything else would ..... COMMISSIONER DOUGLASS: ..... the pressures you MR. CROUCH: ..... be corrected to that. COMMISSIONER DOUGLASS: ..... would be 810 N BTREE~ ~UITEI01 ~77.0B72 R & R COURT RI'PORTERS 5og w. :~FID AVENUE I007 W, :~tlD AVENUE ~77. SB4:B ;ZT2.?SlS ANCHOnA(~E, A~S~ gOB01 113BW. 8TH AVENUE 272.3022 10 1! ]2 14 15 16 17 19 20 21 22 24 25 corrected to ..... datum. MR. CROUC;ifi[: R;i U.h% · COMMISSIONER DOUGLASS- . .... that particular MR. CROUCH: Right. COMMISSIONER SMITH: Bill, you've indicated that -- in your testimony that -- and your preference for the completion techniques and production methods, that you would be occasionally venting or flaring gas, venting gas to clear the -- the tubular annulus, and as you know, we -- we have a rule -- we need a rule I guess to cover that if that's your plan. Is that true? MR. CROUCH: That's the way it's been done, and this would be the way ..... COMMISSIONER SMITH: Yeah. MR. CROUCH: ..... we'd like to do it. It's just a very short duration blow, but it is a blow, and incidently the operators that keep track of the time that they've blown it, and that's always available. I don't know whether it's included on their records or the things they submit to the State or not. COMMISSIONER SMITH: I think that -- you know, I think things -- something like that should be reported as a footnote on the production report or something like that, you know, ..... R 8¢ R COURT REPORTERS 810 N STREKT, BUITE 101 BOg W, 3RD AVENUE 1007 W. 3RD AVENUE 1135 W. 8TH AVENUE ANCHORAGE, A~$~ 99301 10 11 12 13 14 16 17 18 19 2O 21 22 23 24 6S MR. CROUCH: Uh-huh COMMISSIONER SMITH: ..... as to how many times you blow it and what kind of duration, and, you know~ at least it gives some kind of feel for -- for what kind of venting is going on. I'm not sure we've ever previously addressed this as a -- as a requirement or anything. I think it would just be prudent operations to, especially since you have the information, to ..... MR. CROUCH: Yeah, I see no problem with it. I -- I think it probably would be, because they do keep a record of it. COMMISSIONER SMITH: Yeah. MR. CROUCH: Now, whether they've ever given it to anybody, I don't know. But that would be no problem. We could, certainly do that. COMMISSIONER SMITH: I don't think of anything else right now. COMMISSIONER JOHNSON: Okay. I want to thank you, Bill and -- and Richard, for your testimony. I believe we've concluded our questions 'that we may have for you at this time. I would like to ask if 'there is anybody else present that would want to provide testimony or an oral statement? Do we have any written questions from anybody? Okay. Hearing no requests to make an oral statement, 810 N STREET, SUITE 101 277-0572 R &: R COURT REPORTERS 509 w. 5RD AVENUE 1007 W. 5RD AVENUE 1155 W. 8TH AVENUE 277-8545 272,7515 272.5022 ANCHORAGE, ALASKA 99501 ]0 ]! 14 ]6 19 20 2] 22 23 24 or receiving no additional w~itten questions from the audience, I would like to conclude this public hearing. time is approximately 11:03. The meeting is concluded. (END OF PROCEEDINGS) R & R COURT REPORTERS 810 N STRE:E:T, SUITE: 101 509 W. 3RD AVENUE: 1007 W, 3RD AVE:HUE: 1135 W. 8TH AVENUE: 277-0572 277-8543 272.7515 272.3022 ANCHORAGE:, ALASKA 99501 The 64 ]0 12 ]4 16 17 19 20 2] 22 23 24 25 65 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 regarding NORTH SLOPE BOROUSH WALAKPA POOL RULES was taken before me on the ?th day of March, 1991, commencing at the hour of 9:00 o'clock a.m., at the offices of , Anchorage, Alaska, pursuant to Notice to take said Deposition of said Witness on behalf of ~; THAT the witnesses, before testifying, 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 taken at said Hearing, 'taken by me and thereafter transcribed by me; THAT the original of the Transcript has been lodged 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 25th day of March, 1991. '~d~ rY Public in and, fo: Alaska /3/94 SEAL R 8¢ R COURT REPORTERS 810 N STREET, SUITE 101 BOg W. 3RD AVENUE 1007 W. 3RD AVENUE 1135 W. 8TH AVENUE 277.0572 277-8543 272.7515 272-3022 ANCHORAGE, ALASKA 99501 ALASKA OIL AND GAS CONSERVATION COMMISSION PUBLIC HEARING MARCH 7. 1991 NORTH SLOPE BOROUGH WALAKPA POOL RULES SIGN IN PLEASE NAME & COMPANY (PLEASE PRINT ) DO YOU PLAN TO TESTIFY OR COMMENT? �3 TO L.C.M.F. LIMITED l Engineers- Surveyors- Planners 723 w. 6th Avenue Anchorage, Alaska 99501 Phone 274-1543 Alaska Oil & Gas Commission GENTLEMEN: WE ARE SENDING YOU [] Shop drawings OATE I JOB NO. March 4, 1991 I 91-101 ATTENTION David Johnston RE Barrow Gas Field ~ Attached [] Under separate cover via hand carry [] Prints [] Plans [] Samples the following items: [] Specifications [] Copy of letter [] Change order [] i COPIES DATE NO. DESCRIPTION 1 Exhibit 1 map for North Slope Borou~h's hearing scheduled for March 7, 1991. THESE ARE TRANSMITTED as checked below: [] For approval ~ For your use ~ As requested [] For review and comment [] FOR BIDS DUE [] Approved as submitted [] Approved as noted [] Returned for corrections 19 [] Resubmit [] Submit [] Return copies for approval copies for distribution corrected prints [] PRINTS RETURNED AFTER LOAN TO US REMARKS I\L~,L I V L., · AL. sk~ O!! & G~s Cons. Commissioe , Anchorage COPY TO. SIGNED: I~ If enclolures are not mi noted, kindly notify us at once. Scott Hattenburg WILLIAM J. CROUCH WILLIAM W. ALLEN BERNARD W. ALLEN (1921-1985) ALLEN & CROUCH PETROLEUM ENGINEERS P.O. BOX 976 CASPER, WYOMING 82602 February 26, 1991 ALLEN BUILDING 102 RIVER CROSS RD. PHONE: 307/234-3571 307/234-8562 Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Ak 99501 Attn: David W. Johnston, Chairman Dear Mr. Johnston: Enclosed is a list of the items to be addressed by the Barrow Gas Field group during the hearing of March 7, 1991. We are also sending part of the exhibits to be presented. The remaining exhibits will be delivered to you from the Anchorage office. If you need any additional information prior to the hearing, please give us a call. Very truly yours, W. J. Crouch, P.E. Allen & Crouch, Petroleum Engineers Encls. WJC/gd WILLIAM J. CROUCH WILLIAM W. ALLEN BERNARD W. ALLEN (1921-1985) ALLEN & CROUCH PETROLEUM ENGINEERS P.O. BOX 976 CASPER, WYOMING 82602 ALLEN BUILDING 102 RIVER CROSS RD. PHONE: 307/234-3571 307/234-8562 NORTH SLOPE BOROUGH BARROW GAS FIELD AOGCC HEARING, MARCH 7, 1991 WALAKPA AREA SUBJECTS TO BE ADDRESSED AND EXHIBITS: 1. Exhibit No. 1: Area map, field name. 2. Exhibit No. 3. Exhibit No. 2~ Proposed present area of interest map, pool designation. 3: Walakpa Sand Structural contour map. 4. Exhibit No. 4: Walakpa Sand Cross section. 5. Exhibit No. 5: Walakpa Sand Well Correlation Chart. · Drilling and completion programs: Exhibit No. 6: Downhole Schematic. Exhibit No. 7: Lithology Chart. · Surface installations and producing program: Exhibit No. 8: Equipment Schematic. Exhibit No. 9: Critical hydrate formation curves· n,: n-: T,21.N ~,. WALA¢',PA DEVf:L _... ' '^ ', 7 8~ , ~W,~LAKPA ~~ 14 13 18 17 2200 , Legend ~ DRY WELL ~ EXISTING WELL '~,'~"~," ~:",' 0 PROPOSED LOCATION OF WELL .:"..::.:. :: .(:. ~ ............ ........... ....... .. ........... ., ............ STRUCTURE CONTOUR {SUBSEA) ¢000 ~ r'"'"' ~o.oo,c c~o~ ~,o~ ,,~ E X H I B I T 2 SCALE 1" = 8,21~ feet (2,50~meters) ~C?lC S~O?~ CONSUltaNt G~OU~, INC, DATE: 2/2~/91 Engineers · Architects · Scientists · Su~eyors BY: CEB,RKG 301 D~nner Avenue Anchorage, Al~sk~ 99518-3035 Telephone: (907) 349-5148 F~x: (907) 349-4213 T.20. 14 13 18 17 16 13 ~A~AX~ ~ ~ 23 24- (19~ 23 WALA KP3~ 3 ~A P/~, 6 26 25 2 26 , .... AREA OF INTEREST - SLOPE CONSULTING GROUP, INC. ,~01 Oanner Avenue An~tX~oqe. Ala.ka Telephone: (907) ,]49-5148 WAIJkKPA GAS FIELD · EXHIBIT 2B BASE:MAP: USGS Barrow AS,A6 SCALE: 1" = 8,21.3 feet (2,503meters) DATE: 2/2,3/91 BY: CEB,RKG EAMI~I'I' NU. b DOWNHOLE SCHEMATIC NOT TO SCALE '%% -, STRATIGRAPHIC TABLE OF THE WALAKPA DEVELOPMENT AREA MAX. ! MIN. DEPTH'DEPTH LITHOLOGY FORMATION AGE sandstone, shale and 100- 50 conglomerate Oubik Formation Quaternary~' i light grey silty : ' claystone with rare, Nanushuk Group : >__ , I C~' ' , thin (0-10 ft.) silly E' sand layers 1000- 400 ~ I I i grey shale with carbonaceous Torok Formation Q o silty beds 2200- 1 600 -, : .-4- I fissile fo blocky carbonaceous black 'pebble shale' o shale Z ti) , o 2550- 2020 o light brown-grey silty ' sandstone, massive Walakpa Sand sandstone, and basal' i conglomerate~i 2580- 2040 I I I dark brown-grey shale with thin Upper Kingak c_. (<10 fi) silty beds Formation c c 2780- 2240 : o Total Depth Drilled STRATIGRAPHIC TABLE OF ARC'['IC SLOPg CONSULTING GROUP, INC. THE WALAKPA DEVELOPMENT AREA Engineers · Architects ° Scientists ° Surveyors Date' Scale: Drwn by: 2/26/91 None SKW EXHIBIT 7 MAX. MIN. DEPTH'DEPTH LITHOLOGY FORMATION AGE sandstone, shale and conglomerate GubJk Formation Quaternary 100- 50 light grey silty claystone with rare, Nanushuk Group thin (0-10 ft.) silly sand layers 1 000- 400 i grey shale with carbonaceous Torok Formation n o silty beds 2200- 1 600 -, fissile fo blocky carbonaceous black 'pebble shale' o shale Z o 2550- 2020 o light brown-grey silty sandstone, massive Walakpa Sand sandstone, and basal conglomerate 2580- 2040 dark brown-grey shale with thin Upper Kingak c._ c- C (<10 ft) silty beds Formation 2780- 2240 o Total Depth Drilled EXHIBIT NO. 8 WELL SCHEMATIC VALVE GAS WELL CONTROLLER/RTU GAS FLOW ~ MONITORING' EQUIPMENT ....... (J ---~- F LOW EXHIBIT NO. 9 ,q 0 (')0 010 020 030 °O 1 6 12 .... __k_LJ_ !_. k_.~ .... \ 'i.'em_.pera'Lu.:re (Celsi_u.s) -8 -4 0 4 8 12 1.6 ~ k~ l_A___t_~ i. LL_.L_LM~_..L I ~ .... L_~ ..L-_--LI ...... -_L,._L_L.L_LLc_] GeoLhermal Gradien[ (~0°C/km) KPA NO1. 2 040 0~0 060 070 O80 0.90 1.00 -0oooo 100% Methane ooooo 97%C1; 3%C2 ~~z~ 97%C1; 2mC2; (c~) - 0.5%C3; 0.5gN2 Effec[ of Gas Composi'Lion on 1 E. DENDY SLOAN, JR. NORTH SLOPE BOROUGH SCIENCE ADVISORY COMMITTEE HydraLe 'Thiclcn. ess .. Pc r-f ~ - 2 r Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of The North Slope Borough for a public hearing to present testimony for classification of a gas pool and prescribing pool rules for development in the Walakpa Area. Notice is hereby given that the North Slope Borough has petitioned the Alaska Oil and Gas Conservation Commission (hereinaf..ter~ the Commission) to issue a conservation order setting forth .pool rules for the development of a gas pool in the Walakpa Area,', 19 miles ,. southwest of Barrow. The hearing will be held at the Alaska Oil and Gas Conservation Commission, 3001 Porcupine Drive, Anchorage, Alaska 99501 at 9:00 am on March 7, 1991 in conformance with 20 AAC 25.540. All interested persons and parties are invited to give testimony. Russell A. Douglass Commissioner Alaska Oil and Gas Conservation Commission Published February 1, 1991 �1 I' NORTH SLOPE BOROUGH DEPARTMENT OF INDUSTRIAL DEVELOPMENT RO. Box 69 Barrow, Alaska 99723 Phone: 907/852-8711 BARROW GAS FIELDS SERVICE AREA TEN KUPARUK INDUSTRIAL CENTER RO. Box 1120 Pouch 340044 Pouch 340065 Barrow, AK 99723 Prudhoe Bay, AK 99734 Prudhoe Bay, AK 99734 907/852-7779 907/659-2635 907/659-2900 January 18, 1991 JERRY WILT, Director Mr. Lonnie C. Smith, Commissioner ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage, Alaska 99501 RE: WALAKPA FIELD HEARING Dear Mr. Smith: In accordance with Regulation AAC 25.540, the North SloPe Borough, Barrow Gas Fields, requests a public hearing before the Alaska Oil & Gas Commission. The purpose of the hearing will be to establish pool rules, including drilling, completion and producing practices in the Walakpa Field, located mainly in T20N,R19W. At the present time we are moving drilling equipment into the area to start drilling the first of four wells this winter. Since we~ have had to resolVe several differences with the AOGC on an' individual well basiS, we feel it prudent to set some basic ground ruleS as soon as possible. We would appreciate your assistance in scheduling a public hearing as soon as possible. The program is of critical importance to this community. If you have any questions, please contact me at your earliest convenience. Sin_cere~ ~Wilt, Director ~Department of Industrial Development CC' Allen & Crouch Alan Hartig/NSB Attorney Richard Glen/ASCG Howard Morse/BGFDP RECEIVED JAN 2 t991 Alaska 0ii & Gas Cons. Comm'tssio[ Anchorage