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Home My WebLink AboutCO 432 A• • Index Conservation Order. 432A Kuparuk River Unit 1.) June 14, 1999 ARCO Alaska Inc. request variance exception 2.) July 8, 1999 Notice of Public Hearing, Affidavit of Publication Conservation Order 432A STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage, Alaska 99501 Re: THE APPLICATION OF ARCO Alaska, ) Inc. for a variance from 20 AAC 25.230(b) ) pertaining to the frequency of required well ) tests in wells producing to a common ) flowline (i.e., twinned production wells) and ) consolidating Conservation Orders 193,203, ) 209, and 229 into Conservation Order 432. ) Conservation Order No. 432A Kupamk River Field Kuparuk River Oil Pool August 11, 1999 IT APPEARING THAT: 1. By letter dated June 14, 1999, ARCO Alaska, Inc. CAAI") requested a variance from 20 AAC 25.230(b) to change the frequency of required well tests in situations where wells share a common flowline (i.e., twinned production wells). 2. The Commission published notice of opportunity for public hearing in the Anchorage Daily News on July 8, 1999. 3. The Commission received no protests, comments or requests for a public hearing. 4. A correction to Conservation Order (CO) 432 is required to reflect all orders previously issued for the Kuparuk pool that were consolidated into CO 432 on July 22, 1998. FINDINGS: 1. During consolidation of Kuparuk pool conservation orders in July 1998, CO's 193, 198, 203, 209, and 229 were inadvertently omitted and CO 198 was inadvertently included on the list of those rules consolidated. 2. 20 AAC 25.230(b) currently states "Production from each well must be measured to determine the quantities of oil, gas and water, using equipment and techniques acceptable to the commission. Production from a property or unit may be measured as a whole, if individual well test facilities acceptable to the commission are employed to test each well at least once each 30 days to assure accurate allocation to each well." 3. AAI proposes to drill infill development wells on production pads and produce them through a common flowline connected to the neighboring well. The procedure is called twinning production wells. The operator estimates 10-12 new twinned wells per year will be subject to the testing procedure. 4. A twinned production well will save capital and operating cost by reducing the amount of equipment required for producing the well and lessen the need to shut-in each well monthly to conduct separate tests. 5. Reduced costs to connect wells to facilities may allow marginal reserve projects to be drilled and developed. 6. The operator plans to commingle production from twinned wells downstream of the wellheads and test the combined flow stream at least monthly. A separate well test will be done periodically, every six months, to validate allocation parameters for the twinned wells. Conservation Order No. 43'z~ August 11, 1999 Page 2 7. Surveillance of the twinned wells will continue in a manner similar to individual wells with combined performance being evaluated to identify problems. CONCLUSIONS: 1. CO 193, 203,209 and 229 all modified Rule 4 of CO 173, Kuparuk River Oil Pool, and should be included into CO 432. 2. CO 198 should not be included in the orders consolidated under CO 432 on July 22, 1998. 3. Under 20 AAC 25.230(g), the commission may approve a variance from the production measurement requirements of the section and allow changes to well tests frequency where appropriate. 4. Production allocation based on well test contribution is an acceptable method for prorating volumes to wells in oil and gas operations. 5. Well decline is reasonably predictable in the Kuparuk River Oil Pool and problems with twinned wells will be evident by abnormal decline or step changes in performance. 6. Less frequent tests on twinned production well will not cause waste, harm correlative fights or decrease ultimate recovery. NOW THEREFORE, IT IS ORDERED the requirements of Conservation Order 173 as modified by Conservation Orders 190, 193, 203,209, 229, 230, 262, 276 and 348 and related administrative approvals are hereby consolidated and reissued under this order. The findings, conclusions and administrative record for Conservation Orders 173, 190, 203,209, 229, 230, 262, 276 and 348 are adopted by reference and incorporated in this decision. These rules apply to the area as described in Conservation Order 349, issued December 16, 1994 and Rule 10 is added to provide a variance from 20 AAC 25.230(b) for the frequency of well tests for twinned production wells. Rule 1. Name of Field (Ref. CO 173) The name of the field shall be the Kuparuk River Field. (Source CO 173) Rule 2. Definition of Pool (Ref. CO 173) The name of the pool in the Kuparuk River Field shall be the Kuparuk River Oil Pool and is defined as the accumulation of oil that is common to and correlates with the accumulation found in the Atlantic Richfield Company West Sak River State No. 1 well between the depths of 6,474 and 6,880 feet. (Source CO 173) Rule 3. Well Spacing (Ref. CO 173, & 182) Not more than one well may be drilled on any governmental quarter section or governmental lot corresponding to it nor may any well be drilled on a governmental quarter section or governmental lot corresponding to it which contains less than 125 acres, nor may the pool be opened in a well bore that is closer than 500 feet to any property line nor closer than 1,000 feet to the pool opened to the well bore in another well except that: (Source CO 173) In Sections 5, 6, 7, 8, 15, 16, 21, and 22, T1 IN, R10E, U.M., an unrestricted number of wells may be drilled. (Source CO 182) Conservation Order No. August 11, 1999 Page 3 Rule 4. (a) (b) (c) Casing and Cementing Requirements (Ref. CO 173, 190, 193,203,209, and 229) Casing and cementing requirements are as specified in 20 AAC 25.030, CASING AND CEMENTING, except as modified below. (Source CO 173) For proper anchorage and to prevent an uncontrolled flow, a conductor casing shall be set at least 75 feet below the surface and sufficient cement shall be used to fill the annulus behind the pipe to the surface. (Source CO 173) For proper anchorage, to prevent an uncontrolled flow, and to protect the well from the effects of permafrost thaw-subsidence and freeze back, a string of surface casing shall be set at least 500 measured feet below the base of the permafrost section but not below 2700 feet true vertical depth. Sufficient cement shall be used to fill the annulus behind the casing to the surface. (Source CO 173, CO 193, 203,209 & 229 - authorized depths of surface casing for various Drill Sites are detailed on following table) 1) Drill Pad 2Z Kuparuk River oil pool wells may be drilled to a maximum depth of 3250 feet true vertical depth before surface casing is set so long as drilling fluid densities are monitored and maintained at 10.0 pounds per gallon. (Source CO 190, modified by AA 190.01- 190.15) 2) Drill Pad 2X and 2C Kuparuk River oil pool wells may be drilled to a maximum depth of 2975 feet true vertical depth before surface casing is set. (Source CO 190, modified by AA 190.01 - 190.15) 3) In the event that geologic conditions are not as anticipated, the Commission may change the maximum depth for setting surface casing by administrative action, provided a request, in writing, is timely submitted. (Source CO 190) Authorized Surface Casing AA No. Drill Sites Depth Pursuant to Rule 4(c) CO 190 AA 190.1 1F 3350' TVD AA 190.4 2Z 3450' TVD AA 190.6 2K 3000' TVD AA 190.7 2K 3452' TVD AA 190.10 3G 3500' TVD AA 190.11 lA 3900' TVD AA 190.12 3R 4200' TVD AA 190.13 1H 4100' TVD AA 190.14 1H 4400' TVD AA 190.15 1Y 4400' TVD Authorized Surface Casing Conservation Drill Sites Depth Pursuant to CO 173 Rule Order 4(c) and 20 AAC 25.035(b) CO 193 2A, 2B, 2D, 2F, 2G, 2H, 2V 3200' TVD CO 203 IL, lQ, IR, 2E, 2U, 2W, 3B, 3C 3800' TVD CO 209 1R, 2A, 2H, 2T, 3A, 3B, 3C, 3F, 4150' TVD 3J, 3K, 3M, 3N, 30, 3Q CO 229 2M, 3H 3700' TVD Conservation Order No. 432~ August 11, 1999 Page 4 (d) The surface casing, including connections, shall have minimum post-yield strain properties of 0.9% in tension and 1.26% in compression. (Source CO 173) 1) The only types and grades of casing, with.threaded connections, that have been shown to meet the requirements in (d) above and have been approved for use as surface casing are the following: (A) 13 3/8 inch, 72 pounds/foot, L-80, Buttress; (B) 13-3/8 inch, 72 pounds/foot, N-80, Buttress; (C) 10-3/4 inch, 45.5 pounds/foot, K-55, Buttress; 2) The Commission may approve other types and grades of surface casing upon a showing that the proposed casing and connection can meet the post-yield strain requirements in (d) above. This evidence shall consist of one of the following: (A) Full scale tensile and compressive tests; (B) Finite element model studies; or, (C) Other types of axial strain data acceptable to the Commission. (e) Other means for maintaining the integrity of the well from the effects of permafrost thaw- subsidence and freeze back may be approved by the Commission upon application. (Source CO 173) (f) The Commission may approve alternative completion methods (to 20 AAC 25.030(b)(4) and (5)) upon application and presentation of data that shows the alternatives are based on accepted engineering principles. Such alternative designs may include: (Source CO 173) 8. During consolidation of Kuparuk pool conservation orders in July 1998, CO's 193, 198, 203, 209, and 229 were inadvertently omitted and CO 198 was inadvertently included on the list of those rules consolidated. 1) slotted liners, wire wrapped screen liners, or combinations thereof, landed inside of open hole and may be gravel packed; 2) open hole completions provided that the casing is set not more than 200 feet above the productive zone. Rule 5. (a) (b) Automatic Shut-In Equipment (Ref. CO 173 & 348) Each well shall be equipped with a Commission approved fail-safe automatic surface safety valve system (SVS) capable of preventing uncontrolled flow by shutting off flow at the wellhead and shutting down any artificial lift system where an over pressure of equipment may occur. (Source CO 348) The safety valve system (SVS) shall not be deactivated except during repairs, while engaged in active well work, or if the pad is manned. If the SVS cannot be returned to service within 24 hours, the well must be shut in at the well head and at the manifold building. (Source CO 348) 1) 2) Wells with a deactivated SVS shall be identified by a sign on the wellhead stating that the S¥S has been deactivated and the date it was deactivated. (Source CO 348) A list of wells with the SVS deactivated, the dates and reasons for deactivating, and the estimated re-activation dates must be maintained current and available for Commission inspection on request. (Source CO 348) Conservation Order No. 432~ August 11, 1999 Page 5 (c) A representative of the Commission will witness operation and performance tests at intervals and times as prescribed by the Commission to confirm that the SVS is in proper working condition. (Source CO 348) Rule 6. Safety Flares (Ref. CO 173) Repealed by 20 AAC 25.235. Rule 7 Gas-Oil Ratio Tests (Ref. CO 173 & 262) Repealed by Conservation Order 262, dated October 23 1990. Rule 8. Pressure Surveys (Ref. CO 173, 230, 276 & 432) (a) A bottom-hole pressure survey shall be taken on each well prior to initial sustained production. (Source CO 230) (b) The operator shall obtain pressure surveys as needed to effectively manage hydrocarbon recovery processes subject to an annual plan outlined in (d) of this rule. (Source CO 432) (c) Bottom-hole pressures obtained by a static buildup pressure survey, a 24-hour shut-in instantaneous test, a multiple flow rate test or an injection fall-off test will be acceptable. Calculation of bottom-hole pressures from surface data will be permitted for water injection wells. (Source CO 230) (d) Data from the surveys required in this rule shall be filed with the Commission by April 1 of the subsequent year in which the surveys are conducted. Along with the survey submittal, the operator will provide a proposed survey plan for the upcoming year. Reservoir Pressure Report, Form 10-412, shall be utilized for all surveys with attachments for complete additional data. Data submitted shall include, but are not limited to, rate, pressure, time, depths, fluid gradient, temperature, and other well conditions necessary for complete analysis of each survey being conducted. The pool pressure datum plane shall be 6,200 feet subsea. (Source CO 230, 432) (e) Results and data from any special reservoir pressure monitoring techniques, tests, or surveys shall also be submitted as prescribed in (d) of this rule. (Source CO 230) (f) Upon application by the operator, the Commission in its discretion may administratively approve exceptions to this rule. (Source CO 230) Rule 9. Productivity Profiles (Ref. CO 173,276 & 432) (a) During the first year of production, a production survey shall be run in each well that has multiple sand intervals open to the well bore. (Source CO 173) (b) Subsequent surveys shall be run in wells that exhibit uncharacteristic changes in performance. Subsequent surveys shall also be required in wells which have had remedial work performed to change the production profile unless the remedial work results in only one sand interval being open to the well bore. (Source CO 173, 276) (c) All completed production surveys taken during a calendar year be filed with the Commission by April 1 of the subsequent year. The Commission may request data be provided in advance of an annual submittal if required. (Source CO 173, 432) Conservation Order No. 435.~ August 11, 1999 Page 6 (d) By administrative order, the Commission shall specify additional surveys should it be determined that the surveys submitted under (a) and (b) are inadequate. (Source CO 173) Rule 10. Production Well Tests (a) A well test must be performed on each active producing well at least once every 30 days (b) Twinned production wells commingled through the same surface flowline, must be tested at least once every 30 days as a combined production stream and the individual wells must be tested separately at least once every six months or more often if the combined well test indicates uncharacteristic performance. DONE at Anchorage, Alaska and dated August 11, 1999~._.h R.N. Christenson, P.E., Chairman .... D-avid W7 ~o~ ~ioner ~ AS 31.05.080 provides that within 20 days after receipt of written notice of the entry of an order, a person affected by it may file with the Commission an application for rehearing. A request for rehearing must be received by 4:30 PM on the 23ra day following the date of the order, or next working day ifa holiday or weekend, to be timely filed. The Commission shall grant or refuse the application in whole or in part within 10 days. The Commission can refuse an application by not acting on it within the 10-day period. An affected person has 30 days from the date the Commission refuses the application or mails (or otherwise distributes) an order upon rehearing, both being the final order of the Commission, to appeal the decision to Superior Court. Where a request for rehearing is denied by nonaction of the Commission, the 30-day period for appeal to Superior Court runs from the date on which the request is deemed denied (i.e., 10~ day after the application for rehearinl~ was filed). ~2 Affidavit Ad # Run Dates ED Po # of Publication Price per Account day 113827 07/08/99 DN 0201 4002 $82.50 $82.50 STOF0330 STOF0330 STATE OF ALASKA THIRD JUDICIAL DISTRICT Eva Kaufmann, being first duly sworn on oath deposes and says that 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 the above dates 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 individuals. Legal Clerk Y---~-~. ~'~'~~~ .... Subscribed and sworn to me beforethis date: Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska MY COMMISSION EXPIRES: ~~ ~/~,~Z~O Notice of Public Hearing STATE 'OF A'LASKAr Alaska Off and Gas Conservation Commission Re: Kuparuk River Pool, Kuparuk River' Unit, North .~Slope Alaska , I '!.ARCO A!a~ka, Inc..by app ication r~ceived June ~16,' 1999, rectuested a ,vari- ance from 20 AAC .25.230(b) pertaining to the frequency of required well testir~g Jn ~some' unique' situatiOi~s, ilamely we, lis which sha~e o .Common fi0w. line (twinned ?p~'bduCt on Wbl $) ,'," ?.~' person 'wE'01 moy":be '~;'~'"""....:'-" " ';'-: ""':' ;;.",;"..' ' ': ':',. '."'.; '~' ,'r. ' '~' .... =.., , .,~;;=:.,.. ,,, ...... ,~ .'. · ,_,... ,,. · .",~ ,.,;~; ...... Alaska Oil','and Gas Conser-' I ?,ration ' Cam missio,n, 3001 !Porcupine Drive,, "A,ndhor- age, Alaska 99501, and 'reclu.est a'hearing on this imatter. If the pK0test i~.JJ :.~ mew filed and roise~, d. J .~Ub'stogti'i~,l and. mote~,i'.q"l '~..?,..'.'. ~ o~",'.., to:' .. 'f~, ~o~: il "'"'?'7."'r,, :'7'; ...... ,~*','.' ',O be ::, he,,Id, ,~,ot,, ,t,~e',; 'obov~,"/I ,','address',"at, ,9':0'0':!:AM: on// ..;A U'g ust ,'.1011999/.I n :.canto r m: JJ lanc'e~:~vifflt~20 AAC 25.5140.;': If JJ 'a he'or'ig.g...~ is' to.'.be... ',held, IJ intereste'd 'parties may '(;on- JJ firm ..tfli$.i",,by cctlling ;:theJJ c0mr0"i's'sioh's ,office,, (907)Il 279-1433 after July 23,1 999. Il 'f 'nO.;protest is ,fJled~ theII COmmission Will' ,cOflsider the..issuance of 'the 'order ,,withobt,a hearing,, . ' '.. <If': you ar, e,a :person wi,th a disability WhO may need a special .modification in ,,'order, to comment or 'to ,'affend::the.. public hearing, P ease ¢,0,ntact D bna Fleck at 793~122("n'o,'later, than A~g,uSt'4,:1999~ ".." '.' 'AO,C ',Pub,: July 8, i999. ' Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Kuparuk River Pool, Kuparuk River Unit, North Slope Alaska. ARCO Alaska, Inc. by application received June 16, 1999, requested a variance from 20 AAC 25.230(b) pertaining to the frequency of required well testing in some unique situations, namely wells which share a common flowline (twinned production wells). A person who may be harmed if the requested order is issued may file a written protest prior to 4:00 PM July 23, 1999 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 August 10, 1999 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 July 23, 1999. If no protest is filed, the Commission will consider the issuance of the order without a hearing. If you are ape. rson with a disability who may need a special modification in order to comment or to attend the public hearing, please contact Diana Fleck at 793-1221 no later than August 4, 1999. . , stenson, P.E. Chairman Published July 8, 1999 ADN AO# 02014002 DRI / MCGRAW HILL RANDALL NOTTINGHAI~ 24 HARTWELL LEXINGTON M_A 02173 PIRA ENERGY GROUP LIBRARY 3 PARK AVENUE (34TH & PARK) NEW YORK NY 10016 OVERSEAS SHIPHOLDING GRP ECON DEPT 1114 AV OF THE AMERICAS NEW YORK NY 10036 NY PI/BLIC LIBRARY DIVE GRAND CENTRAL STATION P O BOX 2221 NEW YORK NY 10163-2221 ALASKA OFC OF THE GOVERNOR JOHN KATZ STE 518 444 N CAPITOL NW WASHINGTON DC 20001 OIL DAILY CAMP WALSH 1401 NEW YORK AV NW STE 500 WASHINGTON DC 20005 ARENT FOX KINTNER PLOTKIN KAHN LIBRARY WASHINGTON SQ BLDG 1050 CONNECTICUT AV NW WASHINGTON DC 20036-5339 US MIN MGMT SERV CHIEF OCS STATS & INFO 381 ELDEN ST MS 4022 HERNDON VA 20170-4817 LIBRARY OF CONGRESS STATE DOCUMENT SECTION EXCH & GIFT DIV 10 FIRST ST SE WASHINGTON DC 20540 U S DEPT OF ENERGY PHYLLIS MARTIN MS EI823 1000 INDEPENDENCE SW WASHINGTON DC 20585 TECHSYS CORP BR3LNDY KERNS PO BOX 8485 GATHERSBURG MD 20898 US GEOL SURV LIBRARY NATIONAL CTR MS 950 RESTON VA 22092 DPC DAi~IEL DONKEL 1420 NORTH ATLAi~TIC AVE, DAYTON BEACH FL 32118 STE 204 SD DEPT OF ENV & NATRL RESOURCES OIL & GAS PROGP~AM 2050 W MAIN STE #1 RAPID CITY SD 57702 AMOCO CORP 2002A LIBRARY/INFO CTR P 0 BOX 87703 CHICAGO IL 60680-0703 ILLINOIS STATE GEOL SURV LIBP~ARY 469 NATURAL RESOURCES BLDG 615 E PEABODY DR CHAMPAIGN IL 61820 LINDA HALL LIBRARY SERIALS DEPT 5109 CHERRY ST K~NSAS CITY MO 64110-2498 ALFRED JAMES III 107 N MARKET STE 1000 WICHITA KS 67202-1811 MURPHY E&P CO ROBERT F SAWYER P 0 BOX 61780 NEW ORLEANS LA 70161 UNIV OF ARKANSAS SERIALS DEPT UNIV LIBRARIES FAYETTEVILLE AR 72701 CROSS TIMBERS OPEP. 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JIM ARLINGTON 310 K STREET STE 700 ANCHOKAGE AK 99501 YUKON PACIFIC CORP JOHN HORN VICE CHM 1049 W 5TH AV ANCHORAGE AK 99501-1930 PRESTON GATES ELLIS LLP LIBRARY 420 L ST STE 400 ANCHORAGE AK 99501-1937 ALASKA DEPT OF LAW ROBERT E MINTZ ASST ATTY GEN 1031 W 4TH AV STE 200 ANCHORAGE AK 99501-1994 GAFO GREENPEACE P/~4ELAMILLER 125 CHRISTENSEN DR. #2 ANCHOP~AGE AK 99501-2101 DEPT OF REVENUE OIL & GAS AUDIT FP./LNK PARR 550 W 7TH AVE STE 570 ANCHORAGE AK 99501-3540 BA=KER OIL TOOLS ALASKA AREA MGR 4710 BUS PK BLVD STE 36 ANCHORAGE AK 99503 HDR ALASKA INC MARK DALTON 2525 C ST STE 305 ANCHORAGE AK 99503 KOREAN CONSULATE OCK JO0 KIM CONSUL 101 BENSON STE 304 ANCHORAGE AK 99503 N-I TUBULARS INC 3301 C STREET STE 209 ANCHORAGE AK 99503 ANADARKO MARK HANLEY 3201 C STREET STE 603 ANCHORAGE AK 99503 ALASKA OIL & GAS ASSOC JUDY BRADY 121 W FIREWEED LN STE 207 ANCHORAGE AK 99503-2035 AK JOURNAL OF COMMERCE OIL & INDUSTRY NEWS ROSE RAGSDALE 4220 B STREET STE #210 ANCHORAGE AK 99503-5911 DEPT OF NATURAL RESOURCES DIV OF OIL & GAS BRUCE WEBB 3601 C ST STE 1380 ANCHOP~AGE AK 99503-5948 DEPT OF NAT~ RESOURCES DIV OIL & GAS WILLIAM VAN DYKE 3601 C ST STE 1380 ANCHORAGE AK 99503-5948 DEPT OF NATURAL RESOURCES DIV OF OIL & GAS JULIE HOULE 3601 C ST STE 1380 ANCHORAGE AK 99503-5948 DEPT OF NATURAL RESOURCES DIV OF OIL & GAS JAMES B HAYNES NATURAL RESRCE MGR 3601 C ST STE 1380 ANCHORAGE AK 99503-5948 DEPT OF NATURAL RESOURCES DIV OF OIL & GAS TIM RYHERD 3601 C ST STE 1380 ANCHORAGE AK 99503-5948 DEPT OF NATURAL RESOURCES PUBLIC INFORMATION CTR 3601 C STREET STE 200 ANCHORAGE AK 99503-5948 DEPT OF NATURAL RESOURCES DIV OF OIL & GAS JIM STOUFFER 3601 C STREET STE 1380 ANCHORAGE AK 99503-5948 FINK ENVIRONMENTAL CONSULTING, INC. 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Al~CHORRXGE AK 99517 GER3%LD GANOPOLE CONSULT GEOL 2536 ARLINGTON Ai~CHORAGE AK 99517-1303 DAVID CUSATO 600 W 76TH AV #508 A/~CHORAGE AK 99518 ASRC CONRAD BAGNE 301 A/~CTIC SLOPE AV STE 300 kNCHOP~AGE AK 99518 SCHLUMBERGER DARREN AKLESTAD 1111 E 80TH AV ANCHOP~AGE AK 99518 Ai~vLANI) SPIELM3tN 651 HILANDER CIRCLE AlqCHOP~AGE AI{ 99518 HALLIBURTON ENERGY SERV MARK WEDMAN 6900 ARCTIC BLI~D AlqCHORAGE kK 99518-2146 OPSTAD & ASSOC ERIK A OPSTAD PROF GEOL P 0 BOX 190754 ANCHOP~AGE AK 99519 JACK 0 HAKKILA P 0 BOX 190083 ANCHOP~AGE AK 99519-0083 ENSTAR NATURAL GAS CO RICF_ARD F BARNES PRES P 0 BOX 190288 Ai~CHOP~AGE AK 99519-0288 MAI~ATHON OIL CO OPEP~ATIONS SUPT P O BOX 196168 ANCHOP~AGE AK 99519-6168 MARATHON OIL CO BP~kD PENN P 0 BOX 196168 ANCHORAGE AK 99519-6168 I/NOCAL P 0 BOX 196247 ANCHORAGE AK 99519-6247 UNOCAL KEVIN TABLER P 0 BOX 196247 ANCHORAGE AK 99519-6247 EXXON COMPANY USA MARK P EVANS PO BOX 196601 ANCHORAGE AK 99519-6601 BP EXPLORATION (ALASKA) INC MR. DAVIS, ESQ P 0 BOX 196612 MB 13-5 ANCHORAGE AK 99519-6612 BP EXPLORATION (ALASKA) INC BOB WILKS MB 5-3 P O BOX 196612 ANCHORAGE ~tK 99519-6612 BP EXPLORATION (AJ=ASKA) INC INFO RESOURCE CTR MB 3-2 P O BOX 196612 ANCHORAGE AK 99519-6612 BP EXPLORATION (ALASKA) INC PETE ZSELECZKY LAND MGR P O BOX 196612 ANCHORAGE AK 99519-6612 BP EXPLORATION (ALASKA) INC SUE MILLER P O BOX 196612 M/S LR2-3 ANCHORAGE AK 99519-6612 BP EXPLORATION (ALASKA), INC. M_ARK BERLINGER MB 8-1 PO BOX 196612 ANCHORAGE AK 99519-6612 AMERICA/CANADIAN STRATIGRPH CO RON BROCKWAY P O BOX 242781 ANCHORAGE AK 99524-2781 AMSI/VALLEE CO INC WILLIAM O VALLEE PRES PO BOX 243086 ANCHORAGE AK 99524-3086 L G POST O&G LAND MGMT CONSULT 10510 CONSTITUTION CIRCLE EAGLE RIVER AK 99577 DIANA FLECK 18112 MEADOW CRK DR EAGLE RIVER AK 99577 D A PLATT & ASSOC 9852 LITTLE DIOMEDE CIR F_JtGLE RIVER AK 99577 PINNACLE STEVE TYLER 20231 REVERE CIRCLE EAGLE RIVER AK 99577 DEPT OF NATI/R3%L RESOURCES DGGS JOHN REEDER P O BOX 772805 EAGLE RIVER AK 99577-2805 COOK INLET VIGIL JAMES RODERICK P O BOX 916 HOMER AK 99603 COOK INLET KEEPER BOB SHAVELSON PO BOX 3269 HOMER AK 99603 RON DOLCHOK P O BOX 83 KENAI AK 99611 DOCUMENT SERVICE CO JOHN P2LRKER P O BOX 1137 KENAI AK 99611 PHILLIPS PETR ALASKA OPERATIONS MANAGER J W KONST P O DRAWER 66 KENAI AK 99611 KENAI PENINSULA BOROUGH ECONOMIC DEVEL DISTR STAN STEADM. AN P O BOX 3029 KENAI AK 99611-3029 PENNY VADLA P O BOX 467 NINILCHIK AK 99639 BELOWICH COAL CONSULTING MICI4_AEL A BELOWICH HC31 BOX 5157 WASILLA AK 99654 JAMES GIBBS P O BOX 1597 SOLDOTNAAK 99669 PACE SHEILA DICKSON P O BOX 2018 SOLDOTNA A_K 99669 KENAI NATL WILDLIFE REFUGE REFUGE MGR P 0 BOX 2139 SOLDOTNA AK 99669-2139 ALYESKA PIPELINE SERVICE CO VALDEZ CORP AFFAIRS SANDY MCCLINTOCK P O BOX 300 MS/701 VALDEZ AK 99686 VALDEZ PIONEER P O BOX 367 VALDEZ AK 99686 VALDEZ VANGUARD EDITOR P 0 BOX 98 VALDEZ AK 99686-0098 UNIV OF ALASKA FAIRBANKS PETR DEVEL LAB DR V A KAMATH 427 DUCKERING FAIRBANKS AK 99701 NICK STEPOVICH 543 2ND AVE FAIRBANKS AK 99701 RICK WAGNER P 0 BOX 60868 FAIRBANKS AK 99706 JACK HAKKILA P O BOX 61604 FAIRBA/qKS AK 99706-1604 C BURGLIN P O BOX 131 FAIRBANKS A_~ 99707 FAIRBANKS DAILY NEWS-MINER KATE RIPLEY P 0 BOX 70710 FAIRBANKS AK 99707 FRED PRATT P O BOX 72981 FAIRBANKS AK 99707-2981 DEPT OF NATURAL RESOURCES DIV OF LAND REG MGR NORTHERN REGION 3700 AIRPORT WAY FAIRBANKS AK 99709-4699 K&K RECYCL INC P O BOX 58055 FAIRBANKS AK 99711 ASRC BILL THOMAS P 0 BOX 129 BARROW AK 99723 RICHARD FINEBERG P O BOX 416 ESTER AK 99725 I/NIV OF ALASKA FBX PETR DEVEL LAB SHIRISH PATIL 437 DICKERING FAIRBANKS AK 99775 UNIVERSITY OF ALASKA FBKS PETR DEVEL LAB DR AKANNI LAWAL P O BOX 755880 FAIRBANKS AK 99775-5880 SENATOR LOREN LEMAN STATE CAPITOL RM 113 JUNEAU A_K 99801-1182 DEPT OF ENVIRON CONSERV SPAR CHRIS PACE 410 WILLOUGHBY AV STE 105 J-U-NF_J%Ui~ 99801-1795 SNEA(P) DISTR FR3~NCE/EUROPE DU SUD/AMEKIQUE TOUR ELF CEDEX 45 992078 PARIS LA DEFE FRANCE *1 ARCO Alaska, Inc. Post Office Box 100360 Anchorage, Alaska 99510-0360 Telephone 907 276 1215 J. Scott Jepsen Manager Kuparuk Development ATO 1220 Phone 263-4348 Fax 265-6133 June 14, 1999 Mr. Robert Christenson Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Alaska 99501 Dear Mr. Christenson, The operators of Kuparuk River Unit, ARCO Alaska, Inc, request a variance pertaining to the frequency of required well testing in some special situations (i.e. twinned production wells). As required now, every production well must be tested at least once every 30 days and results submitted to the AOGCC as stated in Article 3 Section 20 AAC 25.230 Part (b) of the Production Practices Regulations. 25.230 Part (b) states: "Production from each well must be measured to determine the quantities of oil, gas, and water using equipment and techniques acceptable to the commission. Production from a property or unit may be measured as a whole, if individual, well-test facilities acceptable to the commission are employed to test each well at least once each 30 days to assure accurate allocation to each well." In order to add more wells to Kuparuk's base production (more infill production wells), we have been looking at new ways to reduce costs. One way when drilling new wells is to twin the new infill well's production line to an existing flowline of an adjacent well. This will realize substantial savings in the well's overall cost and allow several marginal reserve targets to be drilled. Normal facility/.flowline costs would drive the project to being uneconomic. Predicting the total number of new infill wells to be twinned is difficult because each new target (and facility hookup) will be looked at and analyzed separately. Many new infill wells will have their own production lines if it makes sense economically. A best guess as to the project scope would be approximately 10- 12 new-twinned wells per year, but is only an estimate. ARCO Alaska, Inc. is a Subsidiary of AtlanticRichfieldCompany Mr. Robert Chris~,~son Alaska Oil and Gas Conservation Commission June 14, 1999 Page 2 In the case of twinned wells only, we are proposing that the wells be tested together as one production stream each month and production allocated based on separate well tests done on a less frequent basis. At a minimum, there would be separate well tests done every 6 months, or more often if substantial changes are seen in the combined production rate. Driving our request for the variance are two factors: 1) Increased production by not having to shut-in each well for 18-24 hours to get stabilized separate tests and 2) limited manpower resources to do the separate well tests each month. In general, we feel that most Kuparuk wells decline predictably so that we would be able to manage the two wells as one production stream with less frequent updating of the individual well contributions. Production problems in one well would be picked up by a step change in the overall rate and further separate well tests could pinpoint corrective actions. For clarity, Attachment 1 shows the proposed verbiage to Conservation Order 432. Please contact Carey Farmer if you have any questions or comments at 265-6896. Scott Llepsen Kuparuk Development Manager JSJ/gs Attachments Attachment 1 Proposed Verbiage Conservation Order 432 Rule 10. Well Tests a) Well tests will be performed on each active producing well at least once every 30 days. b) For twinned wells producing through the same surface flowline, the combined well stream will be tested at least once every 30 days and the individual wells will be tested at least once every 6 months or more often if the combined well test indicates uncharacteristic performance. STATE OF ALASKA ALASKA Oil, AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage. Alaska 99501 THE APPLICATION OF ARCO Alaska, Inc. to change Rules 8 and 9 of Consc~'ation Ordcr 173 regarding pressure and production profile surveys. ) Conscrx,ation Order No. 432 ) Kupamk Rivcr Ficld ) Kuparuk River Unit ) Kuparuk River Oil Pool JuN 22. 1998 IT APPEARING THAT: By letter datcd May 11. 1998. ARCO Alaska. Inc. CAAI") rcqucstcd changes to thc requirements of Rules 8 and 9. Conservation Ordcr 173. AA1 requested Rule 8(b) bc ctmngcd to climinatc a specified number of pressure survey, Rule 8(d) be changed to rcquirc prcssurc survey reports annually rather than quarterly, and Rule 9(c) bc changed to require productivity survey rcports annually rather than quarterly. 2. Thc Commission rcqucstcd clarification of thc application on May 2 I..I 9!98. 'l'hc Commission published notice of opportunity for public hearing in the Anchoragc Dailx' News on May .o. 1998. 4. ,kAl clarificd and corrected their original request with a letter dated May 28. 1998. 5. Thc Commission received no protest or request for public hearing. FI N DINGS: 1. 'Various conservation orders and administrative approvals havc modified Conservation Order 17.3. Rule 8 of Conservation Order 173 was repealed and rccnactcd by Conservation Order .,,.,0 on May 6, 1987. Conservation Order '~' . .... ~.~() was amended by Conscrvation Order 276 on August 6. lqql Rule 9 of Conscr~'ation Order 173 was amcnded by Conscrvation Order '276 on August 6, 1991. although thc requirements of Rule 9(c), Conservation Order 173. have not bccn modified since the talc was adoptcd on May 6. 1981. Dcvclopmcnt activity in thc Kupamk River oil pool is mature and data rcquircmcnts have c. hm~gcd since initial development started in 1981. Conscrvation Order No. 432 July 22. 1998 Pagc 2 (~. ,&Al is rcsponsiblc tbr rcscrvoir management, development planning and data gathcrmg on bchalf of the working intcrcst owncrs of thc Kuparuk Rivcr Unit. 7. Since 1c)78, AAI has conducted approximatcly l.865 pressure surveys in the Kuparuk R~vcr oil pool. 8. Thc numbcr of productivit-5.' profile surveys will not change only the reporting frequency will be altcrcd. CONCLUSIONS: 1. Data requirements arc best dctcmuncd by the technical needs of the owncrs, operators and regulator>.' bodies responsible tbr oil and gas dcvclopmcnt, appraisal and rcgulation. A significant number of pressure surveys havc been obtained in tiao Kuparuk River oil pool so that pressure rcsponsc in thc pool is better understood todav than when Rule 8(b) was established. Because of thc maturity of thc Kupamk River oil pool and thc large number of existing pressure surveys, Rule 8(b) can be chm~ged to allow more operator discretion in sclccting which wells need prcssure surveys and where in the pool those data are required without compromising reservoir mmmgement. 4 A change to Rule 8(d) will affect only the reporting frequency of Kuparuk Pool prcssure sur¥cvs from quartcrly 'to m~nual reports: Commission oversight will not be compromised 5. Rule 9(c) will changc only thc rcporting 'ffcqucncy of Kuparuk Pool productivity profile survcvs from quarterly to annually: Commission ovcrsight will not bc compromised. Amending Rulcs 8(b), 8(d) and O(c) to eliminate a spccificd number of pressure su~w'cx' and to require prcssurc and productivity survey reports annually rather than quarterly will not cause wastc, .icopardizc corrclativc rights or harm ultimate recovery of hydrocarbon rcsourccs. Consolidating thc rulcs and amendments affccting CO 173 into a new order will eliminate confusion concerning which rules are in effect and icad to more efficicnt managcmcnt of thc reservoir. . A nc,~v order consolidating the rcquirements of Conser~'ation Order 173 and its subsequcnt modifications will not causc wastc, .jeopardize correlative rights or harm ultimatc rccovcr).' of hydrocarbon rcsourccs. NOW THEREFORE, IT IS ORDERED the requirements of Conservation Order 173 as modified by Conservation Orders 190. 198,230, 262, 276 and 348 and rclatcd ach'ninistrativc approvals arc hereby consolidated and reissued under this order. The findings, conclusions and ach'ninistrative record tbr Conservation Orders 173~ 190, 198.230, 262. 276 and 348 are adopted bv reference and incorporated in this dccision. These mits apply to thc arca as dcscribcd in Conscrvation Ordcr 349. issued Dcccmbcr 16..1994. ('onscrvation Order July 22. Page '3 Rulc l Name of Field (Rcf. CO 173/ 'l'hc name of thc ficld shall bc thc Kupan.~k Rivcr Field. (Source CO 173) Rule 2. Definition of Pool _(Rcf. CO 173) Thc namc of thc Pool in thc Kuparuk Rix. ct Field shall bc thc Kuparuk River oil pool and is defined as thc accumulation of oil that is cormnon to and correlates with thc accumulation tbund m thc Atlantic Richfield Company Wcst Sak River State No. 1 well bcrwccn thc dcpths of 6.474 and 6.880 feet. (Sourcc CO 173) Rule 3. Well Spacing (Rcf. CO 173, 182, & 198) Not more than one well may bc drilled on any governmental quarter section or governmental lot corresponding to it nor may any well bo drilled on a governmental quarter Scctio~I or governmental lot corresponding to it which contains less than 125 acres, nor may the Pool bc opcncd in a xvcll bore that is closer than 500 tizet to any property linc nor closer than 1.000 t'cct to thc pool opcncd to thc well bore in another well except that: (Source CO 173) in thc area described in Conse~w'ation Ordcr No. 198B. except for thosc govcrnmcntal quarter sections adjacent to thc Kuparuk River Unit boundary, four wells may bc drilled pcr govcmmcntal quartcr scction {Source CO 198). and 2) in Sections 5.6.7.8, 15, 16, 21. and 22, TI IN. RIOE, U.M., an unrcstricted number of wells may be drilled. (Source CO 182) and Cementing Rcquircmcnts (Rcf. CO 173 & lC.)()) {a) ('asing and cementing rcquircmcnts arc as specified in 20 AAC 25.030, CASING AND ('FMENTING. except as modified below. (Sourcc CO 173) (b) For proper anchorage and to prcven'[ an uncontroilcd flow. a conductor casing shall bc set at least 75 t:bct bclov,' thc surface and sut:ficicnt cement shall be used to fill thc annulus bchmd thc p~pc to thc surface. (Source CO 173) For propcr anchorage, to prevent an uncontrolled flow, and to protcct the well from thc cffccts of pcm~afrost thav,'-subsidencc and frcczc back, a string of surface casing shall bc set at least 500 ~ncasurcd fcct below thc basc of thc pcrmafrost section but not below 2700 feet true vcrtical depth. Sufficient ccment shall be used to fill the annulus behind thc casing to thc surthcc. (Source CO 173) Drill Pad 2Z Kuparuk River oil pool wells may be drillcd to a maximum depth of 3250 f'cct tmc vertical dcpth betbrc surface casing is sct so long as drilling fluid densities arc monitored and mamtaincd at I0.() pounds per gallon. (Source CO 190. modified by AA 190.01 - 190.15) Conservation Order No. 432 July 22. l~O~o8 Page 4 2) Drill Pad 2X and 2C Kuparuk Ri,~cr oil pool xxclls may bc drilled to a maximum depth of 2975 feet tree vertical deptt~ before surthce casing is set. (Source CO loll. modified by AA I c)0,01 - I c)(). 15) 3) In tile event that geologic conditions are not as anticipated, tile Commission may change the maximum depth ibr setting surface casing by administrative action, provided a request. in x~'riting, is timely submit-ted. (Source CO 190) (d) The surface casing, including connections, shall have minimum post-yield strain propcmcs of 0.9% in tension and I -~,~o, ..~.,.o in compression. (Source CO 173) 1) Thc only typcs and grades of casing, with threaded connections, that have bccn shown to mcct thc rcquircmcnts m (d) above and have been approvcd for usc as surface casing arc the t'ollowmg: (A) 13 3/8 inch, 72 pounds/lc)et. L-SO, Buttress: (B) 13-3/8 inch, 72 pounds/fbot, N-80, Buttress: (C) 10-3/4 inch. 45.5 pounds/toot, t<-55. Buttress'. 2) Thc Commission may approve other types and gradcs of surface casing upon a showing that the proposed casing and conncction can meet thc post-yield strata rcquircmcnts in (d) aboxe. This cvidencc shall consist of one of thc following: (A) full scale tensile and compressive tests: (B) finite element model studies' or, (C) othcr types of axial strain data acceptable to thc Commission. (c) Other mcm~s tbr maintaining the integrity of thc xvcll from thc cffizcts of pcm~affost tha~'- subsidence and fl'cczc back may bc approved by thc Commission upon application, (Source CO 173) Thc Commission may approve alternative completion methods (to 20 AAC 25.03()(b)(4) and (5)) upon application and presentation of data that shoxvs thc alternatives arc based on accepted cnginccring principles. Such alternative designs may includc: (Source CO 173) 1) slotted liners, wire wrappcd screen liners, or combinations thereof: landed inside of opcn hole and may bc gravel packed: 2) open hole complctions provided that thc casing is set not more than 200 f~ct abovc the productive zone. Rule 5. Auton~atic Shut-ln Equipment (Ref. CO 173 & 348) (a) Each xxcll shall bc equipped with a Commission approved fail-safe automatic surface safctv valvc svstcm (SVS) capable of prcvcnting uncontrolled flow bv shutting off flow ar thc wcllhcad and shutting dovvn any artificial lift system x~:here an over pressure of cquipmcnt may occur. (Source CO 348) ('onscrx'atlon Order No. 432 July 22, 1998 ?age 5 Thc safety '~'al~c s,.'stcm ISVS) shall not tlc deactivated except during rcpmrs, xqulc engaged in activc x~cll work, or if thc pad is marmcd. If thc SVS cannot bc returned to scrvicc within 24 hours, tiao well must bc shut m at the xx'cll head and at thc manilbld building. /Sourcc ('O 348) 1) Wells with a deactivated SVS shall bc ~dcntificd bx' a sign on the xvcllhcad stating that thc SVS has bccn deactivated and thc date it was deactivated. (Source CO 348) 2) A list o£ wells with tile $V$ deactivated, the datcs and rcasons tbr deactivating, and thc cstimatcd rc-activation datcs must bc maintaincd current and availablc for Commission inspcction on request. (Source CO 348) (c) A rcprcscntativc of thc Comnaission will witness opcration and pcrtbrmancc tests at intervals and times as prescribed by thc Commission to confirm that thc SVS is in propcr working condition. (Source CO 348) Rulc 6. Safctv [:larc~_(Rcf. CO 173) Rcpcalcd by 20 AAC 25.235. Rule 7. Gas-Oil Ratio Tests (Rcf. CO 173 & 262) Repealed by Conservation Order 262, dated October 23 1990. _[~..t.!.1_c._5 .............. ._P. rc6s_s_u~_'c_'_~ur__y_?,x_~'5_t'Rcf. CO 173. 230. 276 & 4.32) (a) A botrom-l~olc pressure survey shall bc taken on each xxcll prior to initial sustained production. (Source CO 230) (b) "['hc opcrator shall obtain pressure surveys as ncedcd to effectively manage l'wdrocarbon r¢covcrv processes subjcct to an annual plan outlined in (d) of this rule. (Source (70 432) Bottom-hole prcssurcs obtained bra static buildup pressure survey, a 24 hour shut-in instantaneous tcst, a multiple flow rare test or an n'licction fall-off test will bc acccptablc. Calculation of bottom-hole pressures from surfacc data will be permitted fbr water injection wells. (Source CO 230) Data from the survcvs required in this rule shall bo filed with thc Commission by April I of the subsequent 5.'car in which thc surveys are conductcd. Along with thc survcv submittal, tho opcrator will provide a proposed StlI~rev plan for thc upcoming >'car. Rcscrvoir Pressure Report, Form 10-412, shall bc utilized for all survcvs with attachments fbr complete additional data. Data submitted shall include, but arc not limited to. rare, prcssurc, time. depths, fluid gradient, tcmperaturc, and other xvcll conditions ncccssarv for complctc analysis of each survcv being conducted. Thc pool pressure datum plane shall bc 6,200 feet subsca. (Source CO 230, 432) (c) Rcsults and data from any special reservoir pressure monitoring techniques, tests, or surveys Conservation Order No. 432 JuN 22. 1998 Page shall also be submitted as prescribed in (d) of this rule. tSourcc (70 230t (t') Upon applicanon by the operator, thc Commission m its discretion may admmisrrati~ civ approve cxccptions to this rule. ~Source CO Rulc 9. Producti,,irv Profiles (Rcf. CO 173. 276 & 432) (a) During thc first vcar of production, a production surxcv shall be run ~n each xxcll that has multiplc sand intcrYals opcn to thc xvcll bore. (Source CO 173) (bi Subscqucnt surveys shall be run in xvclls that exhibit uncharacteristic changes in pcrt'ormancc. Subscqucnt surd, cvs shall also be required in wells which have had remedial work pcrtbrmcd to changc thc production profilc unless the remedial work results in only one sand intcrval bcing open to thc x,~cll bore. (Sourcc CO 173. 276) (c) All complctcd production survcvs taken during a calendar year be filcd v, ith thc Commission bv April I of the subscqucnt >'car. Thc Commission may rcqucst data bc providcd in advance of an mmuat submittal if required. (Source CO 173. 432) (d) By administrative order, thc Commission shall spccifs.' additional survcys should it bc dctcrmincd that thc surveys submitted under (a) m~d (bi arc inadequate. (Source CO 173) DON E at Anchorage, Alaska and dated ' ..~;i ..... . :':" ....... ',~"<'"}~5 Dawd W. Johnston. Uha~rman "~ . .... , .5~ ', 'B, ' t' ~ "' ',h , , " ......... ,~P" '~5 .~C~" .2 C am il 1 c O e c 1~ s I ~ (.. o mm ~ s s ~ o n c r ..-kS 31.05.080 provides that within 20 days alter receipt of written notice of the entrw of an order, a person atlbcted by il may lid x~ ith the Commission an application tbr rehearing..,k request tbr rehearing must be received by 4:30 PM on the 23rd day Ibllowmg tile date ol'thc order, or ncxl working day ifa holiday or weekend, to be timely filed. The Commission shall grant or relhsc lhe application m whole or m part within 10 days. Thc Commission can relhse an application by not acting on ii within the 10-day period, . kn a/t~ctcd person ires 3() days ti'om the date thc Commission rel~ses the application or mails (or olhe~vise distributes) an order upon rehearing, both being the ilnal order of tl~e Commission. lo appeal thc decision to Superior Corm. Where a request lbr rehearing is denied by nollactioll of the Commission, lhe 30 day period tbr appeal to Superior Ct)uN nl~ls Ii'om the date on which the request is deemed denied (i.e., 10th day alter thc application tbr rehearing was filed3.