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Home My WebLink AboutCO 234Conservation Order Cover Page XHVZE This page is required for administrative purposes in managing the scanning process. It marks the extent of scanning and identifies certain actions that have been taken. Please insure that it retains it's current location in this file. Conservation Order Category Identifier Organizing RESCAN [] Color items: [] Grayscale items: [] Poor Quality Originals: [] Other: NOTES: DIGITAL DATA [] Diskettes, No. [] Other, No/Type OVERSIZED (Scannable with large plotter/scanner) [] Maps: [] Other items OVERSIZED (Not suitable for plotter/scanner, may work with 'log' scanner) [] Logs of various kinds [] Other BY; Scanning Preparation 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 (SCANNING IS COMPLETE AT THIS POINT UNLESS SPECIAL ATTENTION IS REQUIRED ON AN INDIVIDUAL PAGE BASIS DUE TO QUALITY, GRAYSCALE OR COLOR IMAGES) General Notes or Comments about this Document: 5/21/03 ConservOrdCvrPg.wpd STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage, Alaska 99501-3192 Re: THE APPLICATION OF UNOCAL ON) BEHALF OF THE TRADING BAY ) UNIT WORKING INTEREST OWNERS) requesting commingling of ) produced fluids from the ) Middle Kenai "G" and West ) Foreland Oil Pools in the ) McArthur River Field ) Conservation Order No. 234 McArthur River Field Middle Kenai "G" and West Foreland Oil Pool October 30, 1987 IT APPEARING THAT: · Unocal by letter dated October 2, 1987 requested an order allowing for the commingling of produced fluids from the Middle Kenai "G" and West Foreland OiI~' Pool of the McArthur River Field. · Notice of public hearing was published in the Anchorage Daily News October 15, 1987. · · Unocal submitted Exhibit "B" as a supplement to subject application dated October 26, 1987 which consisted of additional engineering testimony regarding increased oil recovery and the prevention of waste. No protests were filed with the Commission. FINDINGS: · The Middle Kenai "G" Oil Pool and the West Foreland Oil Pool are defined in Conservation Order No. 80. 2. Both pools have been produced separately since 1969. · A waterflood for' the Middle Kenai "G" Oil Pool was approved and implemented in 1974. · A waterflood for the West Foreland Oil Pool was approved January 23, 1987~ and water injection is planned to begin in the last quarter of 1987. · Production to date has been through wells completed singly in only one of the pools, or dually with separate tubing strings for each pool. Conservation No. 234 October 30, 198 ~ P age 2 · · · · 10. Ilo Wells completed for commingling would contain an isolation packer between the pools. Current average static reservoir pressure of the Middle Kenai "G" and West Foreland Oil Pool is 3200 psi @ 8850' ss and 2900 psi @ 9850' ss respectively. Commingling will allow completions through which both zones may be logged (surveyed) or treated without pulling tubing. Gas lifting a single tubing string is expected, in most~ cases, to increase production due to more optimum valve settings and use of varied tubing sizes. Estimated incremental recovery per commingled completion over and above a dual completion is 200,000 STB of oil from the Middle Kenai "G" pool. .~.~ By unitization of the TraHing Bay Unit, effective February 27, 1967, the correlative rights and equities of the working interest owners are protected, and royalty interests in the Middle Kenai "G" and West Foreland oil pools are owned 100% by the State of Alaska. Correlative rights will not be adversely affected by commingling of production from these pools. CONCLUSIONS: · Commingling of the Middle Kenai "G" and West Foreland Oil Pools may result in recovery of hydrocarbons which otherwise would not be recovered and can be accomplished without inducing waste and without adversely affecting protection of correlative rights. · Allocation of produced fluids can be accomplished with production logging at regular intervals. · Isolation packers between the pools may be used to prevent crossflow in the event of a prolonged shutdown. · Waterflood operations may also minimize crossflow by minimizing pressure differential between the two pools. NOW, THEREFORE, IT IS ORDERED THAT: 1. Commingling of production from the Middle Kenai "G" and West Foreland Oil Pools in the McArthur River Field is permitted. Conservation Ort'~_r No. 234 October 30, 1987 Page 3 · . · Reservoir pressures and productivity indices of the respective pools shall be determined using acceptable petroleum engineering practices prior to regular commingled production. Appropriate production logs shall be run upon initial completion and biannually thereafter to determine proper allocation of produced fluids with results reported to the Commission. Upon application by the operator, alternative completion, production, and testing practices may be approved by administrative order. DONE at Anchorage, Alaska, and dated October 30, 1987. Lonn~fe C Smith, Alaska Oil and O~a~s Conservation Commission~ W. W. Barnwell, Co~iss"i0ner Alaska Oil and Gas Conservation Co~ission ALASKA OIL AND GAS CONSERVATION COMMISSION WALTER J. HICKEL, GOVERNOR .... 3001 PORCUPINE DRIVE ANCHORAGE, ALASKA 99501-3192 PHONE: (907) 279-1433 TELECOPY: (907) 276-7542 June 18, 1992 ADMINISTRATIVE APPROVAL NO. 234.1 Re: The application of Union Oil Company of California, operator of the Trading Bay Unit (TBU), to waive production logging requirements for TBu wells M-25, M-27, M-28, M-29, G-32 & K-30RD.' Mr. Robert T. Anderson Manager, Lands Alaska Region UNOCAL Corp. P. O. Box 190247 Anchorage, AK 99502-0247 Dear Mr. Anderson: Your application of June 8, 1992 for a waiver of production logging requirements of Conservation Order No. 234 for TBU wells M-25, M-27, M-28, M-29, G-32 & K-30RD was received June 10, 1992. A review of relevant data indicates current allocations are adequate to assign production/injection volumes to the appropriate pools. The Commission hereby waives the biannual production logging requirements of Conservation Order No. 234 for TBU wells M-25, M-27, M-28, M-29, G-32 & K-30RD. This waiver may be reconsidered' should a change in well conditions warrant. Sincerely, Russell A. Douglass Commissioner BY ORDER OF THE COMMISSION Kevin A. Tabler Land Manager Alaska Business Unit Unocal Corporation ~ Oil & Gas Operations 909 West 9th Avenue, P.. dox 196247 Anchorage, Alaska 99519-6247 UNOCAL COMM ~ COMM COMM RES ENG SR ENG SR ENG i ENG ASST June 22, 1995 FG~ ASST SR GEOL [ GEOL ASST. l r..,...,.,L ASS!!__ Mr. David W. Johnston, Chairman ~-'g%~/r":f~:CR"' ..... AK Oil And Gas Conservation Commission:_~:=7_ ........ ~ 3001 Porcupine Drive Anchorage, AK 99501-3192 Re: Request to Modify Conservation Order No. 254A Hemlock~ Middle Kenai "G"~ and West Foreland Oil Pools~ McArthur River Field Dear Chairman Johnston: Union Oil Company of California (UNOCAL) and Marathon Oil Company (Marathon), as Working Interest Owners in the Trading Bay Unit and the McArthur River Field seek a waiver of Rule 3 of Conservation Order No. 234A, pursuant to Rule 4 of the same order. Specifically, we ask that the AOGCC waive the requirement of production logs in instances where UNOCAL and Marathon agree to use acceptable alternative methods of determining production allocation, such as well test data. Conservation Order No. 234A, which was granted in December 1993, provided for the downhole commingling of all WlPAs (G-Zone, Hemlock and West Foreland). This commingling Order concluded that production allocation could result from periodic production logging or alternative engineering, methods should the well bore become inaccessible. As a result, Rule 3 of said Order stipulates that production logs shall be run within 2 months of completion in order to allocate production between WlPAs. King Salmon Platform Well No. K-10RD was the first well to downhole commingle G- Zone and Hemlock after Order No. 234A was granted. A production Icg was attempted once the G-Zone in Well K-10RD was open to production. This log failed to provide accurate allocation information about the G-Zone production due to the instability of the well in general and the proximity of the new G-Zone perforations to the end of the tubing. As the logging tools moved up the hole and neared the end of the tubing, the tool readings were influenced by the change in fluid flow characteristics in the well bore (turbulence around the end of the tubing). As the top of the logging tool assembly entered the 3-1/2" tubing, the tool affected the flow as well by acting like a downhole choke. An interpretation of the data was therefore impossible with these production upsets. RECE IVED JUN 2 8 1995 Alaska 0il & Gas Cons. Commission Anchors. ;;~, Mr. David W. Johnston, Chairman AK Oil and Gas Conservation Commission Request to Modify C.O. No. 234A Page Two Based on this experience, UNOCAL and Marathon agreed that the production from other wells of this type should be allocated based on the well test data (before and after results) rather than continuing to expend money running inconclusive production logs. This was recently the case on K-3RD and K-19RD, where the incremental production was allocated to the new productive interval added. The allocated percentage, by commodity (oil, water, gas), that each WlPA contributed to a well's total production is held constant until production characteristics of that well change substantially and require reallocation. We therefore seek a waiver of Rule 3 for wells K-3RD and K-19RD, as well as for any commingling project subject to CO 234A in which the Working Interest Owners agree on the resulting production allocation. Well test data would be our primary method of allocation, unless the Working Interest Owners determine that significant uncertainty in the results require an alternate approach, such as production logging. A waiver of this Rule 3 is possible in that it will not promote waste, and as the royalty interests are the same between WI?As, no correlative rights are jeopardized. Our experience, using sound engineering principles, has demonstrated that this is the prudent course of action to take. We therefore ask that the AOGCC concur by waiving the requirements set forth in Rule 3 of CO 234A. V~ry truly yours, "-'Kevin A. Tabler CONCURRED this2~Zday of June, 1995 MARATHON OIL COMPANY 0il & Gas Cons. C0mmiSSi0tt Alaska Region Unocal North Americar~' Oil & Gas Division ~, ~OMM Unocal Corporation P.O. Box 190247 C-OMM ~'~ Anchorage, Alaska 99519-0247 R~ EN~ Telephone (907)276-7600 UNOCAL Octo~r 27, 1993 XECHI Mr. Jack Hartz Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Alaska 99501-3192 Subject Supplemental Engineering Report Application to Commingle Production Middle Kenai "G", Hemlock, and West Foreland Oil Pools. Tradh~g Bay Unit McArthur River Field Cook Inlet, Alaska Gentlemen: In response to your letter dated June 29, 1993, and on behalf of the Working Interest Owners, Union Oil Company of California (Unocal), as operator of the Trading Bay Unit, submits the attached requested additional information concerning the application to commingle the Middle Kenai "G", Hemlock, and West Foreland Oil Pools in the Trading Ba.v Unit, McArthur River Field. If you have any questions, please contact me at (907) 263-7675. RE( EIVED 0CT 2 9 199 ,~,Jaska Oil & Gas Cons, Anchorage Sincerely, Union Oil Company of California Hal Martin Sr. Petroleum Engineer Supplemental Engineering Report for Application to Commingle Production Zone, Hemlock, and West Foreland Oil Pools Trading Bay Unit McArthur River Field 0/27/9z L Scope of the Commingling Plan It is the intent of the Working Interest Owners (Union Oil Company of California and Marathon Oil Company) of the Trading Bay Unit to effectively and efficiently maximize the recovery of the Middle Kenai "G", Hemlock, and West Foreland Oil Pools as they continue to decline and approach an economic limit. In the effort to economically manage these maturing reservoirs as well as the unpredictable changes in well bore mechanical conditions, the flexibility afforded through commingling will ensure maximum development of these oil pools through existing or future well work. Otherwise, the work may be either economically unjustifiable or would become available after the overall field economics force cessation of operations. Given the above dynamics of continued Trading Bay Unit Field development, long range commingling plans are not within the scope of the application. Current dual completions will not be modified unless mechanical conditions warrant. However, there are several existing or planned wells outlined below which would be affected in the near term by the approval to commingle. Well Status/Proposal Incremental Oil Recovery D-3RD2 Currently a marginal Hemlock producer. 442 MBO Workover recommended to shut off selected Hemlock benches and add "G" Zone production. G-21 Currently idle. Redrill proposed with 200 MBO "G" Zone benches and horizontal Hemlock Bench 1 completion. OCT 2 ~ 199~ OJj& Gas Cons. Supplemental Engineering Report Application to Commingle Production Trading Bay Unit McArthur River Field October 27, 1993 Well Status/Proposal Incremental Oil Recovery G-33L Currently a West Foreland producer. 220 MBO Recommended addition of perforations in Hemlock Bench 7. G-37 New well proposed as a "G" Zone and 350 MBO horizontal Hemlock Bench 1 completion. K-10RD Currently a Hemlock producer. 220 MBO Recommended to add "G" Zone production. K-26 New well proposed as a Hemlock/"G" Zone 350 MBO commingled single well. Total Incremental Reserves 1,782 MBO Several other wells have been preliminarily identified with regard to current completion configuration as potential commingling candidates, although the evaluation is incomplete at this time. These wells include D-43RD, K-1RD, K-3RD, K-25, K-30RD, G-25, and G-32. Supplemental Engineering Report Application to Commingle Production Trading Bay Unit McArthur River Field October 27, 1993 H. Reservoir Pressures The Trading Bay Unit wells were shut-in from August 20 - 23, 1993. Reservoir pressure surveys completed during this shut down for the "G" Zone, Hemlock, and West Foreland Oil Pools are summarized below. Trading Bay Unit Reservoir Pressures Middle Kenai G 3,120 2,900-3,300 8,850 0.353 Hemlock 3,430 3,200-3,700 9,350 0.367 West Foreland 3,290 NA 9,650 0.341 It is important to note that waterflood injection-to-production ratios are currently averaging 1.5 for the "G" Zone, 1.0 for the Hemlock, and 3.0 for the West Foreland. These ratios indicate that reservoir pressure gradients should continue approach equality with time. HI. Allocation Methods The principle method of allocation for commingled production will be through production logging. Exceptions to this method will be addressed on a case by case basis using the best available and most reasonable technology. In the event the well bore is unaccessible with production logging tools, down hole access with any tool is usually limited as well. Historical productivity relationships between the reservoirs within the specific well would then be used. Reperforation of a specific well will be in step-by-step fashion between oil pools so that the incremental response can be measured and allocated, should production logging be unavailable afterwards. Supplemental Engineering Report Application to Commingle Production Trading Bay Unit McArthur River Field October 27, 1993 4 IV. Waste Prevention and Crossflow Control As mentioned earlier, the commingling of the "G" Zone, Hemlock, and West Foreland Oil Pools will prevent waste by enabling the Working Interest Owners to maximize the recovery of hydrocarbons from the Trading Bay Unit. Crossflow between any of the three producing oil pools should not occur during production since flowing bottom hole pressures for the wells in the field will normally range between 1500 psi and 2800 psi, depending on the productivity of the particular well. During periods of well shut-in, though, the potential exists for crossflow. Due to the relative closeness of static bottom hole pressures as outlined above, however, the significance of crossflow should be minimal, if any. ALASKA OIL AND GAS CONSERVATION COMMISSION June 29, 1993 'WALTER J. HICKEL, GOVERNOR 3001 PORCUPINE DRIVE ANCHORAGE, ALASKA 99501.3192 PHONE: (907) 279-1433 TELECOPY: (907) 276-7542 Kevin Tablet, Land Manager Unocal Corporation 909 West 9th Avenue P.O. Box 196247 Anchorage, Alaska 99519-6247 Subject: Trading Bay Unit, McArthur River Field -- Application to Commingle Middle Kenai "G,, West Foreland and Hemlock Oil Pools. Dear Mr. Tabler, As a follow up to our conversation today, the AOGCC staff will need additional information to proceed with the application for commingling the Middle Kenai "G", West Foreland and Hemlock pools in the Trading Bay Unit, McArthur River Field. The information needed is similar to that required for C.O. 234 and is necessary to support findings and conclusions relative to commingling Hemlock with the Middle Kenai "G" and West Foreland Pools. In particular we will need to know Unocars current plans and estimates regarding: 1. increased oil recovery estimates for the pool(s), 2. recent reservoir pressure at datum levels in each pool or estimates, 3. prevention of waste including potential for and ability to control crossflow between pools, 4. impact on enhanced recovery plans, i.e., will voidage be an issue to consider in managing production from the commingied pools, 5. alternate allocation methods to be Used when production logs are not practical, 6. scope of the commingling plan, i.e., · the wells expected to be commingied, · the wells expected to remain dual completed if any. Please contact myself or Bob Crandall if you have any questions regarding this request. ~Jarc k Hartz, / Reservoir Engineer :r~ printed on recycled paper b y C'O. #12844 STOF0330 AO-08-5745 AFFIDAVIT STATE OF ALASKA, ) THIRD JUDICIAL DISTRICT. ) Afton J. Basden being first duly sworn on oath deposes and says that he/she is an advertising representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on June 9, 1993 OF PUBLiCATiON --~otice Of Public Hearing · STATE OF ALASKA Alaska,Oil and Gas * Conservation Commission Re: The application of UNION OIL COMPANY OF CALIFOR- NIA (Unocal) to commingle 'pr~uction ,from the McArthur River Field, Trading Bay Unit, ~Mlddle Ken.al "G,, Hemlock, and West Foreland Oil Pools. UNC~CAL Corporation by let- ter 'dated May~ 27, .1993 has requested an order, to allow downhole commingling of pro- dectlon from the McArthur River Field,;Trading Bay Unit, Middle Kenai "G", Hemlock, and West Foreland Oil Pools, .in.. conformance, to the provi- sions of 20 AAC 25.215(b). A Person ;ho may be harmed ,i'f the requested re;der is issued may file a wrlffen protest prior to 4:00 PM'june 24, 1~93 with [' the. Alaska Oil and Gas consor- /ration commission; 3OOl. Por. r cupine Drive/Anchorage, AK / 99501, and request a hearing on /..the ,maffer. If..the protest is /timely filed:and ;raises a sub-' / {t:antlal, and. rnaterial issue ! C~uClal:. to th'e Commission's. :'.determination, a hearing on Jhe matter will be held at the above, address at 9:00 am on I July,..13;.. 1993 .in conformance with' 20.AAC 25.540. If a hear- lng, Is' to be' .held, interested parties m~y confirm this by Ca Ing .'.the Commission's of- fice,. (907) .279,1433 after June 24, 1.993;' if n6 protest, is .filed, the'CommiSsion will consider t:he'.;iS~ence. 6~ ,the. or.der with- ' ~'t;a h~'arln~: 'i ' '": ...... ""'?s/RusSell A; 'DouglaSs =COmmissioner' , ,':', Al'aSka"O I'.and. Gas'. ". . Conservat on Commission P..~u b i i__S_ll_ _ ~l..Un .e 9; 1993 ' and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private i nd ivid~r~s. Subscribed and sworn to before me this~:.~..[':..~day o~~~.'.~,.... .......... Z: the State of Alaska. Third Division. Anchorage. Alaska MY COh4MISS[ON E.X, HR£S ......... . .c~.:..~.'x~. a~,. ~ ........... 19 ...... J UN 1 5 199i5 Alasl~a .0ii .& Gas Cons. Commissio~ ~Anchorage Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of UNION OIL COMPANY OF CALIFORNIA (Unocal) to commingle production from the McArthur River Field, Trading Bay Unit, Middle Kenai "G", Hemlock, and West Foreland Oil Pools. UNOCAL Corporation by letter dated May 27, 1993 has requested an order to allow downhole commingling of production from the McArthur River Field, Trading Bay Unit, Middle Kenai "G", Hemlock, and West Foreland Oil Pools, in conformance to the provisions of 20 AAC 25.215(b). A person who may be harmed if the requested order is issued may file a written protest prior to 4:00 PM June 24, 1993 with the Alaska Oil and Gas Conservation Commission, 3001 Porcupine Drive, Anchorage, Alaska 99501, and request a hearing on the matter. If the protest is timely filed and raises a substantial and material issue crucial to the Commission's determination, a hearing on the matter will be held at the above address at 9:00 am on July 13, 1993 in conformance with 20 AAC 25.540. If a hearing is to be held, interested parties may confirm this by calling the commission's office, (907) 279-1433 after June 24, 1993. If no protest is filed, the Commission will consider the issuance of the order without a hearing. Russell A. Douglass Commissioner Alaska Oil and Gas Conservation Commission Published June 9, 1993 Unocal Energy Resour~ ivision Unocal Corporation 909 West 9th Avenue, P.O, Box 196247 Anchorage, Alaska 99519-6247 Telephone (907) 263-7602/276-7600 Facsimile 263-7698 UNOCALe Kevin A. Tabler Land Manager Alaska May 27, 1993 Mr. Russell Douglass Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Alaska 99501-3192 Cook Inlet Area State of Alaska Trading Bay Unit Application to Commingle Middle Kenai "G", West Forelands and Hemlock Formations Dear Mr. Douglass' Pursuant to the provisions of 20 AAC 25.215(b), Union Oil Company of California (Unocal) as Operator of the Trading Bay Unit and on behalf of the Working Interest Owners, hereby requests a Conservation Order to allow for the commingling of Middle Kenai "G", West Foreland and Hemlock Oil Pools in the McArthur River Field, Trading Bay Unit. As the field reaches its economic limit, enhanced recovery and sustained Unit production become the focal points to prudent and efficient operations,, thereby maximizing field hydrocarbon recovery and preventing economic waste. Utilizing existing wellbores--when possible--will greatly enhance the economic viability of full field development and eliminate limitations on platform slot availability for drilling activities. Commingling of production under CO #234 for the Middle Kenai "G" and West Foreland Oil Pools has demonstrated the effectiveness of this practice in these zones and would be further augmented and enhanced by the ability to use common wellbores for any combination of Middle Kenai "G", West Foreland or Hemlock production. The allocation of production between the Middle Kenai "G", West Foreland and Hemlock Oil Pools in commingled wells will be based upon production logging, except as may be requested by the Commission or deemed necessary by the Operator, to test single pool production after isolating production from the other zone. This Conservation Order would allow the commingling of Middle Kenai "G", West Foreland and Hemlock Oil Pool production where deemed appropriate by the Working Interest Owners. Furthermore, alternative completions such as single or dual production wells will continue to be utilized as required to maintain good production practices. ~ ~ (~ E IV E D JUN - 1 1995 Alaska Oil & Gas Cons. Cornrn[ssio~ Anchorage Mr. Russell Douglass Application to Commingle Middle Kenai "G" West Forelands and Hemlock Formations Page Two There are only two affected Lessees in the Trading Bay Unit and the correlative rights and equities of these Working Interest Owners are protected through Unitization and the provisions of the Trading Bay Unit Operating Agreement. Royalty ownership is uniform throughout the Middle Kenai "G", West Foreland and Hemlock Oil Pools and is owned by the State of Alaska. A small overriding royalty interest exists in ADL-18716 of the Hemlock Oil Pool. Wireline production logging is planned for the commingled wells. The production logging will be based upon state-of-the-art practices utilized on an industry-wide basis. These techniques are currently being utilized in the field today. This information will allow for proper allocation of production between pools. The production allocated to each pool will be reported monthly to the Alaska Oil and Gas Conservation Commission on form 20 AAC 25.230 MONTHLY PRODUCTION REPORT. A well with commingled Hemlock/West Foreland Pool production will be shown on the Trading Bay Unit, MONTHLY PRODUCTION REPORT as two individual wells, one producing from the Hemlock Pool and the other producing from the West Foreland Pool. This method of allocating commingled production to individual pools is currently being utilized on Trading Bay Unit wells G-32, M-25, M-28, M-29 and K-30. Future reporting will be consistent with past practices. In an effort to reduce the administration of this proposed Conservation Order, it is further requested that upon application by the operator, alternative completion, production and testing practices be approved by Administrative Order. In conclusion, commingling of the Middle Kenai "G,, West Foreland and Hemlock Oil Pools will result in recovery of hydrocarbons which otherwise would not be recovered and can be accomplished without inducing waste and without adversely affecting protection of correlative rights. Allocation of prcduced fluids can. be accomplished with production logging. Should you require any additional information regarding this application, please do not hesitate to contact the undersigned. Very Truly Yours, UNION OIL COMPANY OF CALIFORNIA By c'~.~._~-, z.,~ Ke~in A. Tabler Attorney-in-Fact ~ ~ ~ E ~V ~.. J UN - ~ 199,~ Alaska 0il & Gas Cons. Commiss~0~" Anchorage Robert T. Anderson Manager, Lands Alaska Region Unocal North America; Oil & Gas Division ~. Unocal Corporation P.O. Box 190247 Anchorage, Alaska 99519-0247 Telephone (907) 276-7600 UNOEAL June 8, 1992 State of Alaska Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, AK 99501-3192 CONSERVATION ORDER NO. 234 McArthur River Field Middle Kenai "G" and West Foreland Oil Pools Gentlemen: Commingling of production from the Middle Kenai "G" Oil Pool and the West Foreland Oil Pool is permitted in the McArthur River Field under Conservation Order No. 234 and currently applies to six wells: Steelhead wells M-25, M-27, M-28 and M-29; Grayling well G-32; and King Salmon well K-30RD. All are producers except for M-27 which is a water injector. Conservation Order No. 234 states that "Appropriate production logs shall be run upon initial completion and biannually thereafter to determine proper allocation of produced fluids..." Aisc, "Upon application by the operator, alternative completion, production, and testing practices may be approved by administrative order." Union Oil Company of California, as operator of the Trading Bay Unit, requests that the biannual logging requirement be waived so long as well conditions remain unchanged. When significant changes occur that warrant a revised allocation of fluids, production logs will then be run. Obtaining production logs biannually is not currently possible in some wells and is neither practical nor necessary for proper allocation of fluids. The correlative rights and equities of the working interest owners are protected as a result of unitization in February, 1967, and royalty interests in both pools are owned solely by the State of Alaska. ~ E¢ E IV E D JUN 10 1992 Alaska 0il & Gas Cons. C0mmissi0~ Anchorage Conservation Order No. 234 June 8, 1992 Page -2- STEELHEAD PLATFORM Wells M-25, M-28 and M-29 have been artificially lifted by downhole jet pump since initial completion. Production logging is not possible with this producing configuration and there is presently no other means of producing the wells. The sub-operator plans to install gas lift capability for these wells sometime during 1993. Production logging will then be possible. Summarized below is the current basis for allocating fluids from the six wells. Well M-25: Based on cased-hole drill stem tests of each zone performed in late 1987, the Middle Kenai "G" zone is allocated 14% of the total fluid which is assumed to be 100% oil. The West Foreland receives 86% of the total fluid and all of the water production. Gas is allocated based on equivalent gas-oil ratios for the two pools. Well M-27: Allocation of injected fluids in this well since March, 1991 has been based on the amount of perforated interval in each zone as a percentage of the total perforated interval in the well. A recent production Icg now indicates that 97% of the injected water is entering the West Foreland zone. Through-tubing work to improve G-zone injectivity is now being studied. Well M-28: This well has commingled production from the Middle Kenai "G", West Foreland and Undefined zones. Production from the Undefined pool began in June, 1990. The other zones were completed in January, 1992. Allocation to the Undefined zone is based on production tests prior to perforating the other zones. The balance of the well's production is allocated by ratio of perforated interval. The Undefined zone receives a constant rate of oil and gas (175 BOPD and 123 MScfd) and all of the well's water up to 93 BWPD. The remaining production (oil, water and gas) is allocated 66% to the G-zone and 34% to the West Foreland. Well M-29: Commingled production began in July, 1991 with allocation of fluids based on the ratio of the product of permeability multiplied by thickness (kh) for each reservoir. The permeability data were derived from an impulse test in conjunction with tubing - conveyed perforating activities. Consequently, all produced fluids are allocated 55% to the G-zone and 45% to the West Foreland. RECEIVED J UN 1 0 1992 Alaska 0il & (~as Cons. C0mmission Conservation Order No. 234 June 8, 1992 Page -3- GRAYLING PLATFORM Well G-32 was commingled in June, 1991 and was production logged in September, 1991. Oil, water and gas production is allocated 67.2% to the G-zone and 32.8% to the West Foreland. KING SALMON PLATFORM Well K-30RD was commingled in March, 1988. Production logs were subsequently run in April, 1988, September, 1989, and December, 1990. Well conditions have remained stable since then. Produced fluids are allocated 63% to the G-zone and 37% to the West Foreland. Based on the foregoing, Union Oil Company of California respectively requests an administrative order be issued waiving the biannual logging requirement contained in Conservation Order No. 234. Sincerely, UNION OIL COMPANY OF CALIFORNIA Unocal- Unit Operator EJO:bdb Robert T. Anderson / RECEIVED JUN 1 0 1992 Alaska 0il & Gas Cons. C0rm~iss~o~ Anchorage Robert T. Anderson District Land Manager Alaska District UNOCAL ) October 2, 1~87 Unocal Oil & Gas Di~' Unocal Corporation RO. Box 190247 Anchorage, Alaska 99519-0247 Telephor~e (907) 276-7600 Mr. C. V. Chatterton Alaska 0il and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Alaska 99501-3192 APPLICATION FOR A CONSERVATION ORDER TO COMMINGLE PRODUCTION FROM THE McARTHUR RIVER FIELD, TRADING BAY UNIT, MIDDLE KENAI "G" AND WEST FORELAND OIL POOLS Dear Mr. Chatterton: Pursuant to the Alaska 0il and Gas Conservation Commission, Regulation 20 AAC 25.215(b), Union Oil Company of California (UNOCAL), as Operator of the Trad- ing Bay Unit, and on behalf of the Working Interest Owners, request a Conser- vation Order to allow the following: le The commingling of production from the McArthur River Field, Trading Bay. Unit, Middle Kenai "G" and West Foreland Oil Pools in common wellbores. 2. The allocation of production between the Middle Kenai "G" and West Fore- land Oil Pools in commingled wells will be based upon production logging, except as may be requested by the Commission or deemed necessary by the Operator, to test single pool production after isolating production from the other zone. This Conservation Order would allow the commingling of Middle Kenai "G" and West Foreland Oil Pool production where deemed appropriate by the Working Interest Owners. Furthermore, alternative completions such as single or dual production wells will continue to be utilized as required to maintain good production practices. Attached, please find Exhibit A comprising engineering testimony related to this request. OC'I" 0 2'!.987 Mr. C. V. Chatteron -2- October 2, 1987 Through unitization and the applicable provisions of the Trading Bay Unit Operating Agreement, effective as of February 27, 1967, the correlative rights and equities of the affected Working Interest Owners are protected, and are therefore not addressed in this application. Royalty interest in the Middle Kenai "G" and West Foreland oil pools are owned 100% by the State of Alaska. Personnel from UNOCAL and Marathon, as operator and suboperator respectively in the Trading Bay Unit, are available to meet with you concerning any ques- tions you may have or additional data you may require. Very truly yours, UNION OIL COMPANY OF CALIFORNIA By: A~t~rrney-' innFdaecr~:°n / EXHIBIT A REi EIVED OCT 0 2 ~/ Oil & Gas Cons. Commisslorl Anchorage ENGINEERING REPORT IN SUPPORT OF COMMINGLING MIDDLE KENAI "G" AND WEST FORELAND OIL PRODUCTION This engineering report is submitted by Union Oil Company of California (UNOCAL) Trading Bay Unit operator, to support a request for a Conserva- tion Order to allow the commingling of production from the Middle Kenai "G" and West Foreland Oil Pools. Currently, the production from these pools are produced in dual completions isolating individual pool production, or in single pool completions. It is proposed that production from the Middle Kenai "G" and West Foreland Oil Pools be produced through commingled completions in select Trading Bay Unit wells to maximize oil recovery. This proposal is requested as an al- ternative to dual completions of these zones. It is believed that oil production will be maximized and resources conserved through the commingled completions for the following reasons: The commingled completion will provide easy access to both zones for reservoir monitoring and remedial activities. Anticipated activities would include, but are not limited to, wireline production logs, perforations, and coiled tubing activity. In conventional dual com- pletions such activities are impossible in the short string due to problems with interference from the long tubing string. To date, the majority of the Middle Kenai "G" completions in the Trading Bay Unit have been short string completions in dual producing wells. The Trading Bay Unit working interest owners believe that significant benefit and incremental reserve recovery would result from the improved access provided by the commingled completion. It is emphasized that production logging and reperforation are proven reservoir management and reserve recovery enhancement techniques in the Trading Bay Unit. Additionally, it is anticipated that coiled tubing activities to improve conformance may prove useful in the future. These treatments may include water shut-off and acid stimulations. e It is .believed that the commingled completions will provide flexibil- ity to produce both the Middle Kenai "G" and West Foreland Oil Pools in locations where dual completions are not viable. An example of this would be the completion of a new well where greater Middle Kenai "G" potential exists than that seen in the West Foreland. In this instance, only the Middle Kenai "G" would be completed for production. West Foreland production would be foregone to prevent Middle Kenai "G" production impairment as would result with a dual completion of both zones. 3, For the reasons stated in numbers 1 and 2 above, Middle Kenai "G" and West Foreland Oil Pool recovery would be maximized by increasing the number of effective production locations in the reservoir without requiring additional and often redundant wellbores. The utility of wellbores from the Trading Bay Unit Platforms must be maximized to increase recovery due to limitations on the slots available for drilling activities. Prudent reservoir management practices will be employed in maximizing oil recovery in these reservoirs from commingled producers. Practices to as- sist in reservoir management include, but are not limited to the follow- ing: · Where borehole conditions permit, it is planned that individual sand pressures be obtained during open hole logging with formation test tools in the Middle Kenai "G" and West Foreland reservoirs. This information will prove valuable in identifying differences between individual sand and total reservoir pressures which will be utilized in reservoir management to increase recovery and minimize crossflow potential between zones. It is anticipated that development drilling activities will allow this data to be accumulated through 1991. · Wireline production logging is planned for the commingled wells. This information will allow allocation of production between both in- tervals. The production logging will be based upon state-of-the-art practices utilized on an industry-wide basis. Additionally, this in- formation can be verified by isolating the West Foreland production as mentioned in number #3 below. The correlative rights and equities of the Middle Kenai "G" and West Foreland Oil Pools will be protected in the commingled wells as the working interest ownerships in both pools are the same. Finally, the royalty interests in both pools are owned 100% by the State of Alaska. JUN-29-93 TUE 13:i1 UtiOCC~L- ¢~MCHOR~GE ! NO, 907263?698 ?, 02 SUPPL~MENTAL ENGINEERING REPORT IN SUPPORT OF COMMINGLING MIDDLE KENAI "G" AND WEST FORELAND OIL PRODUCTION This supplemental engineering report is submitted by Union Oil Company of California (UNOCAL), Trading Bay Unit Operator, to support a request for a con- servation order to allow the commingling of production from the Middle Kemai "G" and West Foreland Oil Pools. Curreatly, production from these pools are produced in dual comple:ions isolating individual pool production or in single completions. Incremental RecoM~rX It is believed that commingled G-Zone and West Foreland completions will result in increased oil recovery from the shallower G-Zone, At this time~ the G-Zone reservoir is developed in three single and eleven dual completions with deeper pools, Currently, remedial wireline activities such as production logging and re~erforating are only possible in..the three single G-Zone completions, In ~he dually completed wells the shallower G-Zone is inaccessible due to possible in- terference between the wtreline tools amd the t~bing string u~ed to produce the deeper interval. Remedial work such as reperforating can increase field recovery by removiD~ skin damage which results in i~dividual well production decline exceeding average field decline. Examples of skin damage mechanisms ~n which reperforating is effective include migrating fin~s, near w~llhore scale formation, and perforation tunnel collapse. An example of the increased recovery due to reperforating is illustrated om Fig- ure l, an oil production decline curve for Well D-32. Beginning in mid-19?8, Well D-32 produ~tio~ began to decline at a 22% e~pone~tial rate. ~n early 1981 the well began to decline at a rate in excess of 74%. Reperforation in late 1982 returned the well to a level equivalent to an extensio~ of the previous 22% decline rate, Incremental production, which resulted from ~he reperforation work, is cross hatched in the years 1983 through 1985 as ~he differenc~ b6tween the actual production during that period le~$ the 74% decline production. This results in an incremental 486,000 $TBO during this three year period. A similar analysi~ was performed in dually completed Wells G-30 and K-30. In these wells it ha~ no~ been possible to reperfora~ ~he G-Zone. Figure 2 is the oil production decline curve for Well G-30. In this well, a workover was per- formed in early 1978 which significantly increased the wells productivity. Un- fortunately, following the workover production declined a~ a 58% annual ~ate for 2 yea~s bgfore leveling out at approximately 300 BOPD. This analysis a~sumes that reperforation activity would have kept production at approxima£ely a 22% ~ecline level. The incremental production ~hat would have been gained through reperforation acttvitie~ is defined as ~he difference between the 22% decline rate less actual production from January 1978 to January 1983. This productio~ is estimated at 389,000 STBO. in Well K-30, a workover and raper'foration was performed i~ mid-1978. The de- cline curve for this well is shown on Figure 3. Following the wo~kover, the well production declined at approximately a 44% rate un~il mid-1982. Again, JUN-29-93 TUE 13:12 UNOCAL - NOHOR GE · NO, 9072637698 ... ... .. P, 03 this analysis assumes that reparforation activities would have maintained a 22% decline rate in this well. Incremental production to be gained through reperfo- ration is represented as the difference betwee~ a 22~ decline rate and actual well production from January 1978 through June 1982. This difference is 199,O00 STBO. Incremental production to be gained in the G-Zone through commingling will be dependent upon individual wells productivity and overall field performance. It should be noted that average field decline for the years 1978 through 1983, as shown on Figure 4, was actually 11% per year. The three examples analyzed for incremental production may be regarded as conservative in that production may have stabilized at a decline rate closer to 1i% following reperforation. Based upon the three examples previousl2 discussed, and the historic success of roper- rotation activities in the Trading Bay Unit, an average incremental recovery per commingled completion is conservatively estimated at 200,000 ST~O for the G-Zone reservoir. Prevention of Waste The commingling of G-Zone and West Foreland production will result in a preven- tion of waste through the ability to produce zones which would be uneconomical in dual completions. An example of this situation would be a new well drilled through the Wast Fore- land. In this example, it is assumed that good producible saturations are found in the G-Zone, but significantly less hydrocarbon productive potential is found in the West Foreland. The average incremental completion cost between a single G-Zone and a dual G-Zone/West Foreland completion is estimated at $500,000. Ignoring all taxes and operating expenses, and assumtmg a $15 per barrel oil price, approximately 33,000 barrels of oil would be required to pay out the creme'ntal completion cost. When taxes and operattn~ expenses are considered the reserves necessary to payout the incremental completion costs would increase somewhat. The final reserve value required for an economic West Foreland completion would not be excessive. The ~ecision t~ complete in the Foreland would be controlled by G-Zone considerations, and not the West Foreland potential. The restrictions which would be placed on the G-Zone completion in ~he dual alternative might result in the decision to complete the well as a single G-Zone producer. In other words, ~he We~t Foreland potential did mot Justify the possible risks to the G-Zone associated with the dual completion. In this situation, a commingled completion would result in the most efficient use of t'he wellbore by recoverin$ not only G-Zone reserves, but also the West Foreland oil whose production would be foregone in the single G-Zone completion. JAB/J t/RE20/00 'p U B L I S H E ,. · -. -oF ALASKA :.~RTlSlNG .~RDER Anchorage Daily ~k~s P. O. Box 149001 Anchorao~e, Alaska 99514-9001 A!asP~ Oil & Gas Conservation Commission 3001 Porcupine Driv~ Ancl~orage, AK 99501 ADVERTISING ORDER~NO. A0- AGENCY CONTACT JDATE OF A.D. Pat Old~iburg ~tober 13, 1987 PHONE (90~ 279-1433~ DATES ADVERTISEMENT REQUIRED: October 15, 1987 SPECIAL INSTRUCTIONS: AFFIDAVIT OF PUBLICATION UNITED STATES OF AMERICA STATE OF ,~~'/~ ~ DIVISION. ss BEFORE ME, THE UNDERSIGNED, A NOTARY PUBLIC THIS DAY PERSONALLY APPEARED ~~ .,~fOo WHO, BEING FIRST DULY SWORN, ACCORDING TO LAW, SAYS THAT PUBLISHED AT ~~~ IN SAID DIVISION ~)~ 19 ~'~,, AND THEREAFTER FOR ---' CONSECUTIVE DAYS, THE LAST PUBLICATION APPEARING ON THE --"-- DAY OF " 19-- , AND THAT THE RATE CHARGED THEREON IS NOT IN EXCESS OF THE RATE SUBSCRIBED AND SWORN TO BEFORE ME THIS __~DAY OF~ ,~-,_;"~'"~."v-.~'~:'-,. 19~.~.'~ NOTARY PUBLIC F~ S~TE OF ~%_%%. " MY COMMISSION EXPIRES .~ co~.~' 02.901 (Rev. 6-85) PUBLISHER REMINDER ,, INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER.' A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. ATTACH PROOF OF PUBLICATION HERE. ' Notice of Public Hearlng-'~-'m STATE OF ALASKA A,aska OI, and Gas- ' 'ii Conservation, .C,o,m..ml~l?..,n . 'i Re; The application of UNIOH · OIL COMPANY OF CAt. IFOR- NIA (Unocal) to commingle ! I~edu~lon from the McArthur ~ River Field, Trading Bay Unit, . Middle Kenal "G" and West Foreland OII Pools. UNOCAL - -~ ' Corporation, by letter dated October 2, 1987, has re- quested an order to allow com- Ingling of production from the I; McArthur River Field, Tradin~ Bay Unit, Middle Kenai "G ! ~ and West Forelands OII Pools. · A perso~ Who may be harmed If the requested order Is issued ~ ~ may file a written Drotest prior .. to October 30, 1987, with the ~ Alaska OII and Gas Conserva. . tlon Commission, 3001 Porcu- 'pine Drive, Anchorage, Alaska 99501, and request a hearing on the matter. If the protest Is ' timely filed, and raises a sub- . stantlal and material Issue cru- cial to the Commlssoln's deter- ruination, a hearing on the. mailer will be held at the above address at 9:00 AM on . November 23, 1987, in confor- mance with 20 AAC 25.540. If a hearing Is to be held, Interested parties may confirm this by ': calling tbe Commission's office, . (907) 279-1433, after October30, ' 1987. If no prol3er protest I~ filed, the Commission will con- sider the Issuance of t~e order without a hearing... /s/Lo~nle C. Smith ' Commissioner "~ Pub: October 15,1~7 '. AO~)~-55~4 .' . ' Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re.. The application of UNION OIL COMPANY OF CALIFORNIA (Unocal) to commingle production from the McArthur River Field, Trading Bay Unit, Middle Kenai "G', and West Foreland Oil Pools. UNOCAL Corporation, by letter dated October 2, 1987, has requested an order to allow commingling of production from the McArthur River Field, Trading Bay Unit, Middle Kenai "G" and West Forelands Oil Pools. A person who may be harmed if the requested order is issued may file a written protest prior to October 30, 1987, with the Alaska Oil and Gas Conservation Commission, 3001 Porcupine Drive, Anchorage, Alaska 99501, and request a hearing on the matter. If the protest is timely filed, and raises a substantial and materi- al issue crucial to the Commission's determination, a hearing on the matter will be held at the above address at 9:00 AM on November 23, 1987, in conformance with 20 AAC 25.540. If a hearing is to be held, interested parties may confirm this by calling the Commission's office, (907) 279-1433, after October 30, 1987. If no proper protest is filed, the Commission will consider the issuance of the order without a hearing. Lonnle C. Smith Commissioner Alaska Oil & Gas Conservation Commission Published October 15, 1987