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Home My WebLink AboutCO 309Conservation 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 (done) 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: ~~ MARIA Scanning Preparation TOTAL PAGES ' .'."~.__~ BY: ~ARIA DATE: /C~'.~ ..~_~'~,S, '{~.~ 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 • • INDEX CONSERVATION ORDER NO. 309 McCoy #1 1.) October 6, 1992 Far North Oil & Gas requests for Spacing Exception 2.) October 9, 1992 Far North Oil & Gas requests for Spacing Exception 3.) October 30, 1992 Notice of Hearing, Affidavit of Publication 4.) December 2, 1992 Affidavit of Dwain Gibson 5.) December 3, 1992 Affidavit of James White 6.) December 3, 1992 Transcript 7.) December 29, 1992 Letter from Ely & Havenlock Re: Request for extension of Time 8.) December 31, 1992 Supplement Letter from Far North Oil & Gas 9.) March 3, 1993 Request for Rehearing 10) March 15, 1993 Letter from AOGCC to James White regarding re-hearing Conservation Order No. 309 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage Alaska 99501-3192 Re: THE REQUEST OF FAR NORTH ) OIL AND GAS INC. to establish) an exploratory gas drilling ) unit for the McCoy Prospect ) No. 1 well. ) Conservation Order No. 309 Rev. Far North Oil and Gas, Inc. McCoy Prospect No. 1 Exploratory Oil Well February 3, 1993 Revised March 18~ 1993 IT APPEARING THAT: I · Far North Oil and Gas, Inc. (FNOG) submitted an application dated October 9, 1992 requesting the establishment of a drilling unit for gas exploration. . Notice of public hearing was published in the Anchorage Daily News on October 30, 1992 pursuant to 20 AAC 25.540 and in the Alaska Administrative Journal on November 9, 1992. e A hearing was held at 3001 Porcupine Drive, Anchorage, Alaska at 9:00 am on December 3, 1992. The hearing record was held open until January 4, 1993 and closed at the end of the day. FINDINGS: I · The McCoy Prospect No. 1 Well (MP No. 1) is a re-entry of the Unocal Ninilchik No. I Well (UN No. 1) drilled from a surface location 1429 feet from the east line (FEL) and 143.7 feet from the south line (FSL) of Section 6, Township I South (TLS), Range 13 West (R13W), Seward Meridian (SM). 2, The UN No. 1 was drilled to a depth of 12,350 feet measured depth and subsequently abandoned in 1962. Se On July 19, 1985, FNOG requested an exception to 20 AAC 25.055(a)(1) in order to re-enter the UN No. 1 to explore for oil. Conservation Or~'=~_ ~o. 309 Rev. March 18, 1993 Page 2 4~ e e 7~ e Se 10. 11. 12. 13. 14. FNOG is the leaseholder of record of the McCoy Lease, a nominal l l7-acre tract of fee simple land comprising parts of Sections 5, 6, and 7, TlS, R13W, SM and which included the surface location of the UN No. 1 well. Conservation Order No. 211 (August 19, 1985) granted the requested spacing exception for an exploratory oil well. On September 13, 1985, FNOG submitted an application for a permit to drill the MP No. 1 well (i.e., to re-enter the UN No. 1 well) to a depth of 3850 [3480] feet measured depth. The FNOG application for permit to drill was approved October 4, 1985. During the 1985/1986 winter season, MP No. 1 was operated by FNOG, which reported that it had re-entered the UN No. 1 well, perforated casing, run tubing and packer, installed a hanger and production tree, swabbed the well, and briefly flared fluids. No completion report was filed. No evidence was presented that the well was ever tested in accordance with Commission regulations. On January 5, 1987, FNOG designated Alaskan Crude Corporation (ACC) as operator of MP No. 1. The Commission approved the change in operator for MP No. 1 on January 9, 1987. The Commission requested a completion report for MP No. I from ACC on October 3, 1987, May 22, 1991 and January 7, 1992. ACC did not respond to these inquiries. In 1990, ACC entered bankruptcy proceedings; subsequently, its assets and liabilities were purchased by James W. White. FNOG designated Intrepid Production Company as operator of MP No. 1 on July 21, 1991. Intrepid Production Company has not furnished a bond in accordance with 20 AAC 25.025 and is prevented from assuming operatorship until these bonding requirements are satisfied. Conservation Ord~ .40. 309 Rev. March 18, 1993 Page 3 15. 16. 17. 18. 19. 20. FNOG has authorized James W. White or R. Colins to act as agent for FNOG in matters relating to the McCoy well (December 31, 1992 correspondence). A completion report and associated materials for MP No. 1 were filed January 4, 1993 by James W. White. Commission records show that the MP No. 1 has been shut in since December 1985, approximately seven years. In support of their application, a representative of FNOG on December 3, 1993 stated that they wish to reclassify the MP No. 1 as an exploratory gas well. 20 AAC 25.055 establishes a governmental section as the statewide drilling unit for gas exploration. MP No. 1 does not comply with the spacing limitation of 20 AAC 25.055(a)(2) which requires a well exploring for gas to be at least 1500 feet from the drilling unit boundary. CONCLUSIONS: · The Unocal Ninilchik No. 1 well has been re-entered as McCoy Prospect No. 1 to a depth of 3850 [3480] feet. . The MP No. 1 completion report and associated materials filed January 4, 1993 by James W. White on behalf of FNOG satisfy the reporting requirements of 20 AAC 25.070 and 25.071. · Intrepid Production Company, as the designated operator of the MP No. I well, must post a bond acceptable to the Commission under 20 AAC 25.025 prior to continued operations at MP No. 1. e FNOG must apply for exception to the provisions of 20 AAC 25.055(a)(2) prior to the continuation of activity at MP No. 1, and in conjunction with reclassification of the well as a gas exploratory well. Application requirements are set forth in 20 AAC 25.055(b). Conservation Or ~ .40. 309 Rev. March 18, 1993 Page 4 e By virtue of 20 AAC 25.055(a)(2), Section 6, TlS, R13W, SM is a gas drilling unit. NOW, THEREFORE, IT IS ORDERED: The application of Far North Oil and Gas, Inc. to establish a gas drilling unit in Section 6, TlS, R13W, SM is hereby denied on grounds that the unit already exists pursuant to 20 AAC 25.055(a)(2). It is further ordered that FNOG apply for an exception to the spacing provisions of 20 AAC 25.055. DONE at Anchorage,. Alaska and dated February 3, 1993 and revised March 18~ 1993. Alaska Oil and Gas Conservation Commission STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage Alaska 99501-3192 Re: THE REQUEST OF FAR NORTH ) OIL AND GAS INC. to establish) an exploratory gas drilling ) unit for the McCoy Prospect ) No. 1 well. ) Conservation Order No. 309 Far North Oil and Gas, Inc. McCoy Prospect No. 1 Exploratory Oil Well February 3, 1993 IT APPEARING THAT: I · Far North Oil and Gas, Inc. (FNOG) submitted an application dated October 9, 1992 requesting the establishment of a drilling unit for gas exploration. e Notice of public hearing was published in the Anchorage Daily News on October 30, 1992 pursuant to 20 AAC 25.540 and in the Alaska Administrative Journal on November 9, 1992. 3~ A hearing was held at 3001 Porcupine Drive, Anchorage, Alaska at 9:00 am on December 3, 1992. The hearing record was held open until January 4, 1993 and closed at the end of the day. FINDINGS: I · The McCoy Prospect No. 1 Well (MP No. 1) is a re-entry of the Unocal Ninilchik No. I Well (UN No. 1) drilled from a surface location 1429 feet from the east line (FEL) and 143.7 feet from the south line (FSL) of Section 6, Township 1 South (TLS), Range 13 West (R13W), Seward Meridian (SM). 2~ The UN No. I was drilled to a depth of 12,350 feet measured depth and subsequently abandoned in 1962. e On July 19, 1985, FNOG requested an exception to 20 AAC 25.055(a)(1) in order to re-enter the UN No. I to explore for oil. Conservation Orde~ No. 309 February 3, 1993 Page 2 4~ 5~ 6~ e e e 10. 11. 12. 13. 14. FNOG is the leaseholder of record of the McCoy Lease, a nominal 117-acre tract of fee simple land comprising parts of Sections 5, 6, and 7, TlS, R13W, SM and which included the surface location of the UN No. I well. Conservation Order No. 211 (August 19, 1985) granted the requested spacing exception for an exploratory oil well. On September 13, 1985, FNOG submitted an application for a permit to drill the MP No. I well (i.e., to re-enter the UN No. 1 well) to a depth of 3480 feet measured depth. The FNOG application for permit to drill was approved October 4, 1985. During the 1985/1986 winter season, MP No. 1 was operated by FNOG, which reported that it had re-entered the UN No. I well, perforated casing, run tubing and packer, installed a hanger and production tree, swabbed the well, and briefly flared fluids. No completion report was filed. No evidence was presented that the well was ever tested in accordance with Commission regulations. On January 5, 1987, FNOG designated Alaskan Crude Corporation (ACC) as operator of MP No. 1. The Commission approved the change in operator for MP No. 1 on January 9, 1987. The Commission requested a completion report for MP No. I from ACC on October 3, 1987, May 22, 1991 and January 7, 1992. ACC did not respond to these inquiries. In 1990, ACC entered bankruptcy proceedings; subsequently, its assets and liabilities were purchased by James W. White. FNOG designated Intrepid Production Company as operator of MP No. I on July 21, 1991. Intrepid Production Company has not furnished a bond in accordance with 20 AAC 25.025 and is prevented from assuming operatorship until these bonding requirements are satisfied. Conservation Orde~~ No. 309 February 3, 1993 Page 3 15. 16. 17. 18. 19. 20. FNOG has authorized James W. White or R. Colins to act as agent for FNOG in matters relating to the McCoy well (December 31, 1992 correspondence). A completion report and associated materials for MP No. 1 were filed January 4, 1993 by James W. White. Commission records show that the MP No. 1 has been shut in since December 1985, approximately seven years. In support of their application, a representative of FNOG on December 3, 1993 stated that they wish to reclassify the MP No. 1 as an exploratory gas well. 20 AAC 25.055 establishes a governmental section as the statewide drilling unit for gas exploration. MP No. 1 does not comply with the spacing limitation of 20 AAC 25.055(a)(2) which requires a well exploring for gas to be at least 1500 feet from the drilling unit boundary. CONCLUSIONS: · The Unocal Ninilehik No. 1 well has been re-entered as McCoy Prospect No. 1 to a depth of 3480 feet. e The MP No. 1 completion report and associated materials filed January 4, 1993 by James W. White on behalf of FNOG satisfy the reporting requirements of 20 AAC 25.070 and 25.071. · Intrepid Production Company, as the designated operator of the MP No. 1 well, must post a bond acceptable to the Commission under 20 AAC 25.025 prior to continued operations at MP No. 1. · FNOG must apply for exception to the provisions of 20 AAC 25.055(a)(2) prior to the continuation of activity at MP No. 1, and in conjunction with reclassification of the well as a gas exploratory well. Application requirements are set forth in 20 AAC 25.055(b). Conservation Ora~ .... No. 309 February 3, 1993 Page 4 e By virtue of 20 AAC 25.055(a)(2), Section 6, TlS, R13W, SM is a gas drilling unit. NOW, THEREFORE, IT IS ORDERED: The application of Far North Oil and Gas, Inc. to establish a gas drilling unit in Section 6, TlS, R13W, SM is hereby denied on grounds that the unit already exists pursuant to 20 AAC 25.055(a)(2). It is further ordered that FNOG apply for an exception to the spacing provisions of 20 AAC 25.055. DONE at Anchorage, Alaska and dated February 3, 1993 David W.. Johnsto~k, Chairman Alaska O~ Conservation Commission 'Russell A. Douglass, Cos~missioner Alaska Oil and Gas Conservation Commission ALASKA OIL AND GAS CONSERVATION CO~I~IISSION . March 15, 1993 WALTER J. HICKEL, GOVERNOR 3001 PORCUPINE DRIVE ANCHORAGE, ALASKA 99501-3192 PHONE: (907) 279-1433 TELECOPY: (907) 278-7542 (4O James W White 5500 Gulf Blvd South Padre Island, TX 78597 Dear Mr White: We are in receipt of your March 2, 1993 letter requesting a re-hearing of the petition addressed. in Conservation Order No. 309 (CO309), and will respond to each of the concerns and objections you raise in the order they appear in your correspondence. "Finding #17 is in error. The McCoy unit's well has been basically shut in,since the spring of 1986." Far North Oil and Gas, Inc. filed form 10-404 (Monthly Report of Drilling and Workover Operations) for the period 11/85-3/86 describing activities it undertook at the McCoy Prospect #1 well site. The information on these forms was compiled and reported'by Dr. J.R. Lietzke, comptroller of Far North Oil and Gas, Inc., who certified that the Information was true and correct. These forms were received by the Alaska Oil and Gas Conservation Commission (Commission) April 3, 1986; and monthly reports for the period January, 1986 through March, 1986 indicate no activity at the well site. Where Information supplied by you, subsequent to the December 3, 1992 headng, conflicts with that reported by Dr. Lietzke, we feel the Information supplied by him Is accurate. This decision is based on testimony offered at the hearing in which your representative Informed us lhat no "raw data" currently exists relative to well work at the McCoy Prospect #1 (pp. 27 and 28 headng transcript). Information supplied by Dr. Lietzke supports Finding 17. "Conclusion #1 is in error and is objected to [because it] does not reflect the evidence presented to the AOGCC that the well was re-entered to a depth in excess of 3480 feet." Conclusion 1 and Finding 6 both contain a transposition error. The appropriate value for the total measured depth of the McCoy Prospect #1 well is 3850 feet. Conclusion 1 and Finding 6 of CO309 will be corrected to show that the well was re-entered to a depth of 3850 feet. "Conclusion #t is in error on 2 counts and is objected to." We assume you are referring to Conclusion 3 which deals with the bond status of Intrepid Production Company. The bond posted by Alaskan Crude Corporation (ACC) in order to qualify as an operator on Alaska state lands was Issued in favor of the Commission, and will not be released until all aspects regarding abandonment for the active ACC wells are addressed or a new operator qualifies to assume those responsibilities. The bond posted by ACC currently is encumbered by outstanding obligations. This bond cannot be used to Indemnify a third party. ~.,~. .... , ~ · · James W White March 15, 1993 Page 2 "Conclusion #8 is objected to, it does not reflect and ignores the evidence of facts contained in the SUPPLEMENT TO THE DEC.3 HEARING TO ESTABLISH A 20AAC2S.055 GAS DRILLING UNIT WITH #1 WELL DEVELOPMENT REPORT accepted by the AOGCC to comply with 20AAC25.070." There is no Conclusion 8; we assume you refer to Finding 8. Information filed by Dr. Lielzke Indicates the well was swabbed and "flared briefly" in December, 1985~ He also reports no activity at the well site from January through March of 1988. The Commission requires certain evidence to establish the productive potential of a gas well. Commission regulations, 20 AAC 25.225 Potential of Gas Wells, require all gas wells to be tested by the multi-point back-pressure method and the results reported to the Commission. "Conclusion #1t is objected to. The assertion that Alaskan Crude did not respond to the inquiries of October 3, 1987 may 22 [sic], t99t and January 1992 is flat wrong on 2 counts, and therefore is objected to." There is no Conclusion 11; we assume you refer to Finding 11. Finding 11 enumerates the dates on which the Commission made the specific request to ACC for a completion report for the McCoy Prospect #1 well. That ACC did not respond to these requests is a statement of fact. "Conclusion #12 should be corrected and revised to reflect that James W. White, as agent for Intrepid Production Company, bought only ACC lease assets and all ACC's rights, titles, interests and obligations that ACC had as operator for Intrepid." There is no Conclusion 12; we assume you refer to Finding 12. Finding 12 Is based on testimony offered by your representative at the December 3, 1992 hearing (pp. 25, 26 and 27 hearing transcript), wherein the transfer of assels between bankrupt ACC and yourself, and proposed actions to address attendant obligations, are discussed. "Conclusion#14 statement that Intrepid Production Company has not furnished a bond in accordance with 20AAC25.025 is Incorrect. Intrepid Production Company Is the owner of the 20AAC25.025 bond currently posted and in place for all wells formally operated by ACC and therefore Intrepid should not be prevented from assuming ACC's operatorship and performing the duties of operator." ,. There is no Conclusion 14; we assume you refer to Finding 14. Please refer to our discussion of what we assume to be your objections to Conclusion 3. After careful consideration of each objection In your letter, we find none to be substantive. Your request for a re-hearing is denied. Yours very truly, Russell A Douglass Commissioner rpc/jo To: Alaska Oil and Gas Conservation Commission (AOGCC) 3001 Porcupine Dr. Anchorage, Alaska 99501 Attention: Mr. David Johnston, Chairman of the Commission Fax MAILED March 2, 1993 9O7 276 7542 Gentlemen This letter is a timely request for a re-hearing to address certain Findings and Conclusions objected to by the affected parties that are contained in the February 3, 1993 Conservation Order #309 The affected parties object to Finding# 17. Finding # 17 is in error. The McCoy unit's well has been basically shut in since the spring of 1986. Conclusion#1 is in error and is objected to. Conclusion#1 does not reflect the evidence presented to the AOGCC that the well was re-entered to a depth in excess of 3480 feet. Conclusion#1 is in error on 2 counts and is objected to. 1 .) Intrepid Production Company already owns and has a bond posted that satisfies the requirements of 20AAC25. 025 to be operator and 2.) Therefore Intrepid should be now authorized by the AOGCC to perform it's duties as operator Conclusion #8 is objected to, it does not reflect and ignores the evidence of facts contained in the SUPPLEMENT TO THE DEC. 3 HEARING TO ESTABLISH A 20AAC25.055 GAS DRILLING UNIT WITH #1 WELL DEVELOPMENT REPORT accepted by the AOGCC to comply with 20AAC25.070. The Conclusion #8's statement that .... "re-entered the UN NO.1 Well .... and briefly flared fluids" should be corrected and amended. Well completion report filed with the AOGCC reported that: "(8.)(13.) The well was flared continuously for about 5 days and from then intermittently through February. The well made a lot of gas and produced water. During the blow down process the well did begin to produce less water but did not dry up. the well was probably producing water from other intervals due to poor casing annulus seal. The well had shut-in surface pressure in excess of 1400 psig during the period the well was being flared. (8.)(14.) The well maintained a continuous sustained stabilized surface pressure in excess of 700 psig while flowing through a 112" choke setting. The well's surface pressure would generally stabilize within an hour at what ever the choke setting was altered to during all intervals of sustained flow test periods. RECEIVED MAR - 8 Alaska Oil & Gas Cons. Commtss~o~ Anchorage (8.)(15.) The positive results of the gas flow test reasonably proved that the well did. produce gas in" paying auantities' and had the potential to produce gas in excess of 1,000 MCF gas per day. No 4 point test were made. The DNR's Division of Oil and Gas declined to witness any gas flow test that were being conducted at that time" Conclusion#11 is objected to. The assertion that Alaskan Crude did not respond to the inquiries of October 3, 1987 may 22, 1991 and January 1992 is flat wrong on 2 counts, and therefore is objected to. 1. The U.S. Trustee in Bankruptcy for ACC, as operator of the ACC estate made demonstrated valid attempt to work on the well and to flow test the well to bring it in compliance with AOGCC regulations prior to the termination date of : ADL#359242, Dec. 1, 1990. 2. Intrepid Production Company July 24, 1991; bought all rights, titles and obligations that ACC had as operator of the McCoy Unit and it's well. Intrepid has made demonstrated valid attempt to obtain the authority to bring the McCoy Unit and it's well into compliance. Clearly both ACC, and later Intrepid have made demonstrated valid attempts to respond to the inquiries of Conclusion#Il Conclusion#12 is in error and is objected to. Conclusion#12 should be corrected and revised to reflect that James W. White, as agent for Intrepid Production Company, bought only ACC lease assets and all ACC's rights, titles,interests and obligations that ACC had as operator for Intrepid. Conclusion#14 is in error and is objected to. Conclusionf114 statement that Intrepid Production Company has not furnished a bond in accordance with 20AAC25.025 is incorrect. Intrepid Production Company is the owner of the 20AAC25.025 bond currently posted and in place for all wells formally operated by ACC and therefore Intrepid should not be prevented from assuming ACC's operatorship and performing the duties of operator. Please find attached the Bank of America's computer printout of the ownership attested to by Ms. Janet Holland, the bank's Branch Manager, showing currant ownership status that James White Inc. (Intrepid production Company)owns the $200,000 CD# 100010032 currently posted and in place as the 20AAC25.025 operator bond covering the following wells: 1. Mike Pelch #1 2. McCoy fl l 3 Katallafll 4. Burglin 33-1, F-2 and F-3 /~/ //- ? Sincerely y_.o. ur -~_rs~.~~_ ' ("'~.Ja'mes_W. White and as agent for the affected pa.ies;the operator and the wells' owners oz/oi/93 I.IA~?~l~'9.~ 12:I'~u,.~,~BAHK OF AHERICA 907 263 3Z71 COD ' Account: 1000.1.0032 CJ~LL HAIN BR Portfolio: 108259 Name: Name: Addr: City: S01 JAM~S W~ITE INC 02 ' ITF STATE OF ALASKA 03 4845 NORTHWEST KAHNEETA DR PORTLAND OR 97229 ReX Tax ID Number E 92-009598§ Bus Phone 907-333-6502 907-333-6502 't .' Home Phone: 907-333-6502 Current Balance: Accrued Interest: Maturity Date: Term: Rate: Date Last Anniv~ Balance Last Anniv: Date Last Interest: Amount Last Interest~ Date Next Interest: Amount Next Interest: Date Next Payou%~ 200,000.00 150.69 03/24/93 33 DAYS 2.7500 o2/19/93 200,000.00 02/19/93 497.26 03/24/93 497.26 Interest Paid 1993: Interest Paid 1992: Interesb PaidAnniv: When Paid: How Paid~ S~ecial Payout: Original Amount: Date Issued: Date Cancelled: Date Last Transaction: Date Last Changed: Date Last Updated: 994.S2 6,600.02 .00 AT MATURITY INTEREST CHECK 200,000 · 00 '04/22/6S 04/22/88 02/22/93 · 02/26/93 CODES ' ' , stanch Number~ Class Code: Responsibility code, Accounb Type Code~ Miscellaneous code: Term: Haturity Code: Contract Code: Handling code: Interest Reporting code: Warning: O1 Rate: 2.7500 22 Rate Code= 097 Inte=est code, (Z) EXACT 365/36'5 120 Compounding Code=. SIMPLE 000 When Paid: AT MATURITY 33 DA~S How Paid~ INTEREST AUTO RENEWABL~ Special Payout: NON-NEGOTIABLE Credit to AcCount: Withholding Code: NONE YES Dormant Code: NO' · CALL'MAIN BR Check Name Modifier~ Collate=al Pledge Code: 0 P. i/l AS of March 1, 1993 Title of Certificate ~100010032 is in' the name of James :~ite Inc. Ja~Yet L Holland AV~ & Branch .Manager Far North Oil & Gas, Inc. 4845 NW Kahneeta Dr. Portland, Oregon 97229 Phone (503) 690-8173 Fax (503) 629-8747 December 31, 1992 Alaska Oil & Gas Conservation Commission (AOGCC) 3001 Porcupine Drive Anchorage, Alaska 99501-3192 Re: Supplement to the December 3, 1992 hearing to establish a 20 AAC 25 Gas Drilling Unit for the McCoy Well. Dear Commissioners: In accord to Alaska Statute 31.05 and Alaska regulations 20 AAC 25 to protect their correlative rights, Far North Oil & Gas(FNOG), by and for itself, and for James W. White, Peninsula Pipeline Company, Entrepid Production Company, and their respective stockholders and creditors, the McCoy well's working interest and royalty interest owners, citizens of Anchorage who use electricity who are all effected parties, as their agent and at their request, requested the December 3, 1992 AOGCC hearing to establish a gas drilling unit for the McCoy well. The 20 AAC 25 oil exploration drilling unit all located in the S.E. quarter section of governmental section 6, Township 1 South, Range 13 West, S,M. contained only 160 acres. Therefore because gas was descovered instead of oil, it was necessary in accord to 20 AAC 25 to enlarge the existing section 6's SE quarter section's 160 acre oil exploration drilling unit to the required 640 acre governmental section 6 and convert the existing oil exlploration drilling unit to a 640 acre gas drilling unit. This letter is to confirm that either James W. White or R. Colins, an attorney, are authorized to act as agent and have the authority to represent of Far North Oil & Gas pertaining to any and all matters relating to the McCoy well and or the December 3, 1992 AOGCC hearing. The 160 acre oil exploration drilling unit 20 AAC 25, SE quarter section of section 6, contains approximately 85 acres of the McCoy fee lease and approximately 75 acres of Alaska State lease ADL # 359242. Please send copies of any written correspondence regarding the expansion of the McCoy unit to the address shown above. Sijlc~. rely, ng , P.E., Director, Far North Oil & Gas, Inc. P, EGEIVED JAN - 7 ~99~ Oil & ~as cons, ~nchorage Far North Oil & Gas, Inc. 4845 NW Kahneeta Dr. Portland, Oregon 97229 Alaska Oil & Gas Conservation Commission State of Alaska - ~. - 3001 Porcupine Drive Anchorage, Alaska 99501-3!92 F R 0 .~/I TELE( OPYTRANSMITTAL SHEET Pie. se notify receiving party when this transmission is received. FROM: Far North Oil & Gas, Inc. Dr. James A. White, P.E. 4845 NW Kahneeta Dr. Portland, Oregon 97229 Phone: (503) 690-8173 FAX: (503) 629-8747 TO: Commissioners Alaska Oil & Gas Conservation Commissioners Phone: _ (907) 27~-1433 Fax Number: (907) 276-7542 DATE:.. 111/~3 'rIME: 11:44 PM Number of Pages Being Transmittecl (Including this sheet) .2. A copy of this material is being sent to you via regular mail: X Yes, A~dition~l Message NO. Supplement to the December 3, 1992 hearing to establish a 20 AAC 25 Gas Drilling Unit for the McCoy Well.. Dear AOGCC; Please add this supplemental infora%ation to the DecOr 3, 1992 hearing. Please call me if you have any 'questions. Jamms A. White, D.gng., P.E. P. F l C: Iq P. O02 . . Far North Oil & Gasp Inc. 4845 NW Kahneeta Dr. Portland, Oregon 97229 HI, one (503) 690.8173 Fax {503) 629-8747 December 31, 1992 Alaska Oil a Gas Conservation Commission (AOGCC) 3001 Porcupine Drive Anchorage, Alaska 99501-3192 Supplement to the December 3, 1992 hearing to establish a 20 AAC 25 Gas Drilling Unit for the McCoy Well. Dear Commissioners: In accord to Alaska Statute 31.05 and Alaska regulations 20 AAC 25 to protect their correlative rights, Far North 0il & Gas(FNOG), by and for itself, and for James W. White, Peninsula Pipeline Company, Entrepid Production Company, and their respective stockholders and creditors, the McCoy well's working interest and royalty interest owners, citizens of Anchorage who use electricity who are all effected parties, as their agent and at their request, requested the December 3, 1992 AOGCC hearing to establish a gas drilling unit for the McCoy well. The 20 AAC 25 oil exploration drilling unit all located, in the S.E. quarter section of governmental section 6, Township ! South, Range 13 West, S,M. contained only 160 acres. Therefore because gas was descovered instead of oil, it was necessary in accord to 20 AAC 25 to enlarge the existing section 6's SE quarter section's 160 acre oil exploration drilling unit to the required 640 acre goverD_~ental section 6 and convert the existing oil exlploration drilling unit to a 640 acre gas drilling unit. This letter is to confirm that either James W. White or R. Colins, an attorney, are authorized to act as agent and have the authority to represent of Far North Oil. & Gas pertaining to any and all matters relating to the McCoy well and or the December 3, 1992 AOGCC hearing. The 160 acre oil exploration drilling unit 20 AAC 25, SE quarter section of section 6, contains approximately 85 acres of the McCoy fee lease and approximately 75 acres of Alaska State lease ADL ~ 359242. Please send copies of any written correspondence regarding the expansion of the McCOy unit to the address shown above. SinecUre ly.~ //' ' . //w~Ja~es A. White, D. Eng., P. E., Director, Pa~ North Oil & Gas, Ina. ROBERT C. ELY JOHN E. HAVELOCK LAW OFFICES ELY & HAVELOCK 608 WEST FOURTH AVENUE, SUITE 21 ANCHORAGE, ALASKA 99501 TELEPHONE AREA CODE 907 276-1916 FACSIMILE (907) 258-9053 29 December 1992 David Johnston, Chairman Alaska Oil & Gas Conservation Commission 3001 Porcupine 'Drive Anchorage AK 99501 DEC 3 1 1992 Alasl~a Oil .& Gas Cons. CommiS~'tot~ ..... ~ hnchorag~ R.E: Application/Far North Oil & Gas Company, Inc., to expand · .~ '. ~. emstmg 1/4 section exploratory oil unit to a fi.ill section gas unit consisting of Section 6, TIS, RI3W', SM Dear Chairn~an Johnston, This will confirm our client James W. White's oral request to you yesterday to extend th.e time for him, as an affected party, to supplement the record, file well completion data, and evidence of notification of adjacent mineral owners until 15 days following receipt by him of a copy of the transcript of the December 3, 1992 hearing and decision on the above designated matter. Your kind consideratio:n of this request will be very much appreciated. ,~s ve~ ..... PS: I enclose the original of the affidavit of J'ames W. White, a copy oi: which was submitted at th.e hearing. cc' .l.W. White 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION In regards to: ESTABLISHMENT OF A GAS DRILLING UNIT FOR THE MCCOY PROSPECT NUMBER ONE WELL PUBLIC HEARING COMMISSION MEMBERS: DAVID JOHNSTON, CHAIRMAN LEIGH GRIFFIN, COMMISSIONER RUSS DOUGLASS, COMMISSIONER 3001 Porcupine Drive Anchorage, Alaska December 3, 1992 9:00 a.m. RECEIVED DEC 2 9 1992 ~laska Ou a uas L,o,~. uommisSJJlli Anchorage 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 T~BLE OF CONTENTS WITNESSES: Dennis Morgan Rip Collins Robert Ely EXHIBITS: 1 (affidavit, Duane Gibson) 2 (affidavit, James W. White) 3 (Applicant's packet of information) 4 (letter, October 3rd, 1987) 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272-3022 ANCHORAGE, ALASKA 99501 6 12 24 7 7 13 20 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 P R O C E E D I N G S MR. JOHNSTON: Okay. I'd like to go on record, please. I'd like to call this hearing to order. I note the time is approximately ten after 9:00, the date is December 2nd, 1992. We are located at the Alaska Oil and Gas Conservation Commission Offices located at -- Oh, excuse me, December 3rd. My watch is set wrong. We're located at the -- the Commission offices located at 3001 Porcupine, Drive, Anchorage, Alaska. I'd like to begin by introducing the head table. My name is David Johnston, I'm Chair of the Commission. To my right is Commissioner Leigh Griffin. To my left is Commissioner Russ Douglass. And to my far left is Meredith Downing of R & R Court Reporters who will be making a transcript of these proceedings. At this time I'd like to establish the purpose of this hearing by asking Commissioner Douglass to read into the public record the notice that was provided. MR. DOUGLASS: Notice of Public Hearing, State of Alaska, Alaska Oil and Gas Conservation Commission. Regarding the request of Wesley Weichmann on behalf of Far North Oil and Gas, Incorporated, to establish a gas drilling unit for the McCoy Prospect Number One Well. Notice is hereby given that Wesley Weichmann on behalf of Far North Oil and Gas, Incorporated, by letter dated October 9th, 1992, has requested establishment of a gas drilling unit per AOGCC Conservation Order 211, dated August 19th, 1995. This 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 272-7515 ~ 27~'~°~laska 0il & Gas Co'ns. ANCHORAGE, ALASKA 99501 Anchorage 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 drilling unit would serve as a vehicle for development of any resources related to the McCoy Prospect Number One Well, located 144 feet from the south line and 1489 feet from the east line of section six, township one south, range 13 west, Seward Meridian. And that's the surface location. A hearing on this matter will be held in conformance with 20 AAC 25.540 in the Oil and Gas Conservation -- Conservation Commission office, 3001 Porcupine Drive, Anchorage, Alaska, at 9:00 a.m. on December 3rd, 1992. All interested parties -- persons and parties are invited to present testimony. Signed Russell A. Douglass, Commissioner, Alaska Oil and Gas Conservation Commission. Published October 30th, 1992. MR. JOHNSTON: Thank you. These proceedings will be held under -- under our hearing procedures regulations, specifically 20 AAC 25.540. Those regulations provide for sworn testimony or unsworn statements. In our deliberations, greater weight will be given to sworn testimony. As you approach the -- the .Commission, we ask that you state your name and who you will represent. Those people desiring to be considered expert witnesses in this matter must state their qualifications. The Commission will then rule as to whether we will consider you an expert witness in these matters. At the conclusion of the sworn testimony, unsworn oral statements will be -- will be asked for. We will also accept 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 NEST THIRD AVENUE 1135 NEST EIGHTH AVENUE 272- 7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 written statements or written comments. Members of the audience will not be permitted to ask questions directly of the individuals testifying. If you do have a question, we ask that you write those questions down, forward it to the Commission, and we will ask that question if we feel that it is -- that it is helpful. A written trans- -- transcript will be prepared and made a part of the public record in this matter. At this time I would like to ask that those people testifying please identify themselves. We do have a sign-in sheet that indicates at this point there is one person that does desire to testify. If we could have that person stand and identify himself, please? MR. MORGAN: I'm Dennis Morgan representing Phillips, and -- well, that's all. MR. JOHNSTON: Okay. Thank you. We note that the applicant has not arrived at this -- at this time. Generally the applicant is asked to go first. I can only assume that the applicant is delayed at this juncture, so in order to keep the -- the hearing on schedule, I guess we'll depart a little bit from common practice and ask that you provide your testimony to us at this time. If you would please come to the table in front of us here? If you would please state your name and who you're with again? MR. MORGAN: 810 N STREET 277-0572 FAX 274-8982 I'm Dennis Morgan with Phillips R COURT R , ORT S oo? .EST T,,RD AVE,U 2 9 199 272-7515 272-3022 ANCHORAGE, ALASKA 99501 ~~ sion 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Petroleum Company. MR. JOHNSTON: Mr. Morgan, do 'you wish to be considered an expert witness in this matter? MR. MORGAN: No, I don't. MR. JOHNSTON: Okay. Thank you. Do you wish to provide a sworn statement or an unsworn comment? MR. MORGAN: An unsworn comment. MR. JOHNSTON: Okay. Please proceed. MR. MORGAN: The comment that I was -- was to make, I've been asked to appear by our land department who was unable to attend, is that Phillips at this current time does not have any agreements with Far North regarding this -- this area. MR. JOHNSTON: You do not have any -- any agreement to develop this area as -- as an oil or gas well? MR. MORGAN: That's correct. MR. JOHNSTON: Okay. Do you have any willingness to join into such an agreement? MR. MORGAN: I would not be qualified to comment on -- make a comment on that from our land department's perspective. MR. JOHNSTON: Okay. Thank you. MR. DOUGLASS: I have a quick question. Do you essentially have off setting property or mineral rights, ownership? MR. MORGAN: We acquired a leasehold to the north 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 '24 25 of the Far -- Far North acreage in a lease sale I believe last year or the year before last. MS. GRIFFIN: Have you been approached by Far North about an agreement? MR. MORGAN: I don't know the answer to that. MS. GRIFFIN: Okay. MR. JOHNSTON: Okay. Any other question? Any other questions? Okay. Thank you, Mr. Morgan. At this time I guess it would be appropriate to enter into the record two affidavits that we received this morning on behalf of Far North. If I could ask Commissioner Douglass to read these into the record? And I believe ..... MR. DOUGLASS: To read these ..... MR. JOHNSTON: ..... we should probably mark these exhibits, McCoy Exhibits One and Two. MR. DOUGLASS: Fine. (McCoy Exhibits i and 2 marked) MR. DOUGLASS: Does it matter which -- which one I read first? 810 N STREET 277-0572 FAX 274-8982 Gibson ..... MR. JOHNSTON: Why don't you go with Duane MR. DOUGLASS: Okay. MR. JOHNSTON: ..... as Number One? MR. DOUGLASS: Regarding application of Far North R & R COURT REPORTERS DEC 291992 1007 NEST THIRD AVENUE' 1135 NEST E,J.~HT, J.I, A~F..,NI~E~8 272-7515 272-3022 ANCHORAGE, ALASKA 99501 Anchorage 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Oil and Gas Company, Incorporated, to have 640 acre gas production units established in section six, township one south, range 13 west, Seward Meridian. State of Alaska, Third Judicial District. Duane Gibson, being first duly sworn, deposes and says: 1. "I was present at the site of McCoy Prospect Number One throughout the winter of 1985/1986 and regularly witnessed the well flow gas and gas being flared. "Further affiant saith not. Duane Gibson signed." "Subscribed and sworn to me -- or to -- to before me this "notarized on September 18th 2nd day of December 1992, ..... MR. JOHNSTON: That's -- that's the ..... MR. DOUGLASS: No, that's ..... MR. JOHNSTON: ..... expiration date. MR. DOUGLASS: ..... that's the expiration date -- date, I'm sorry. So that's subscribed and sworn to ..... MR. JOHNSTON: No, wait a minute. I think that goes to the -- to the J.W. White affidavit. MR. DOUGLASS: Okay. I didn't have them in sequence. Okay. That would be Exhibit One. Now, Exhibit Two, regarding application of Far North Oil and Gas Company, Incorporated to have 640 acre gas production units established in section six, township one south, range 13 west, Seward Meridian, State of Alaska, Third Judicial District. James W. White, being first duly sworn, deposes and says: 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272 - 3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Number one, "I provide this affidavit -- affidavit for use by the Oil and Gas Conservation Commission in the above cited proceeding.: Number two, "In 1985/1986, I was C.E.O. and president of Far North Oil and Gas, Incorporated, and responsible for re-entry of Ninilchik Number One Well as authorized by Conservation Order Number 211.: Number three, "Upon re-entry, oil was not found, but gas was." Number four, "From early December 1985 throughout the early winter of 1986, I caused repeated testing and flowing of the well to occur in order to ensure that hydrocarbons had been discovered in this -- in the well. During the period I observed the testing and flowing and witnessed larger quantities of natural gas being produced." Number five, "Photographs of the well in place on the Ninilchik -- Ninilchik bluff and of the gas being flared have been provided to the Commission." "Further affiant saith not. James W. White signed." "Subscribed and sworn to before me this 3rd day of December, 1992." MR. JOHNSTON: Thank you. I believe it would be appropriate at this time to -- to state for the record that a review of the well file shows no evidence that this well has ever been tested, and -- and specifically we would refer to the RE6EIV£D R & R COURT REPORTERS DEC 9 1992 810 N STREET 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 277-0572 272-7515 272-3022 ~askaOit&GasCons. Com~ FAX 274-8982 ANCHORAGE, ALASKA 99501 Anchorage 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 10 requirements under 20 AAC 25.25 -- or, excuse me, 25.225, which requires that all gas wells be tested by multi-point back pressure methods before commencement of regular production. We see no evidence in the well file that a test of this nature was ever performed. We also note for'the record that this well is out of compliance. The Commission has asked for a completion report on this well. We asked for it in -- initially in October 3rd, 1987. We received no reply. We again asked for information in May 22nd, 1991. We received no reply. We asked a third time for information on January 7th, 1992. Again we received no reply. The Commission does have concerns about this well. We have -- the well file does not reflect that the well was ever completed. We can assume that -- that the operations may have been shut down. In that case, there are procedures that are required in the event that the operations were in fact shut down. Those shut downs procedures last for approximately one year. After that the applicant or the operator must proceed to abandon the well. In the event that the well was completed, the applicant does need to come forward with that statement to verify that in fact the well is completed. I do not believe the Commission will take any further action on this well until we receive appropriate information to bring the well file current in this matter. 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 11 to hear. Do you have any other statements? MR. DOUGLASS: No, that's -- covers what I wanted MS. GRIFFIN: Do you want to say anything about that? Do you want to say anything about that? MR. JOHNSTON: We also note that in the affidavit signed by James W. White with reference to point four, "photographs of the well in place on the Ninilchik bluff and of the gas being flared have been provided to the Commission," the Commission has not received any such photographs. At this point I would like to recess the hearing for ten minutes, and -- to give the applicant additional time to make himself present. So I would like to go off the record. I note the time is approximately 23 after the hour. (Off record) (On record) MR. JOHNSTON: Okay. I'd like to go on -- back on record. I'd like to note that during our recess that the applicant did in fact show. At this time I'd like the -- to invite the applicant to take the seat before us at the small table? MR. COLLINS: Thank you. MR. JOHNSTON: If you would -- if you would please state your name and who you represent? MR. COLLINS: Yes. My name is Rip Collins. I'm RECEIVED R & R COURT RE PORT E R ~ 810 N STREET 1007 WEST THIRD AVENUE 1135 WEST EIGHTH A~F~Jg 2 9 1992 277' 0572 272' 7515 272-3022 . . FAX 274-8982 Alaska Oil & Gas Cons. Commlssl ANCHORAGE, ALASKA 99501 Anchorage 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12 an attorney. I'm representing the applicant, Far North Oil and Gas Company. MR. JOHNSTON: Before you proceed, Mr. Collins, ..... MR. COLLINS: Certainly. MR. JOHNSTON: ..... do you wish to be considered an expert witness in this matter? MR. COLLINS: I'd have to say no. MR. JOHNSTON: Okay. Do you wish to offer sworn testimony or unsworn statements? MR. COLLINS: We have presented in some affidavits which are copies, the originals are on the way, ..... MR. JOHNSTON: We -- we received the appli- -- or the affidavits this morning, and we have read them into the record. MR. COLLINS: All right. Right. And we have -- in the packet we've supplied some photographs. Unfortunately, they are xerox. I have at least one color photograph which is in your packet there. The other color photographs likewise are on their way. MR. JOHNSTON: Okay. I would like to then mark the -- the packet of information that Mr. Collins just provided us McCoy Exhibit Number Three, and I note that it does contain xerox copies of the photographs that we referred to earlier. (McCoy Exhibit 3 marked) 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272-3022 ANCHORAGE, AEASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 13 MR. COLLINS: Thank you. MR. DOUGLASS: It also has copies of Exhibits One and Two in there as well. MR. JOHNSTON: Yes. And it does. As Commissioner Douglass mentioned, it contains copies of Exhibits One and Two, which are the affidavits. MR. COLLINS: Thank you. Well, basically -- may I proceed now? MR. JOHNSTON: Again, ..... MR. COLLINS: Oh, I'm sorry. MR. JOHNSTON: I -- I require an answer to my question as to whether you want to be sworn in? Are you offering sworn testimony or an unsworn statement? MR. COLLINS: Unsworn. MR. JOHNSTON: Okay. Thank you. Please proceed. MR. COLLINS: All right. Thank you. Basically what we're seeking is the continuation of the Conservation Order Number 211, which was issued on the 19th of August of '85, that -- concerning section six. That as you know back in about '62 Union Oil placed a well on this unit, and then it was subsequently closed. Based upon the Order Number 211, and granting permission to re-open this well, it was re-opened, and a discovery of hydrocarbon -- hydrocarbons was -- was discovered in the way of natural gas, and we want and seek permission to develop this well 810 N STREET 277-0572 FAX 274-8982 RE,EEIV D R & R COURT REPORTERS T,,R 2 l [tt 272- 7515 272-3022 ,Alaska Oil & Gas Cons. Con]miss ANCHORAGE, ALASKA 99501 Anchorage 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 14 for the production of natural gas. That will necessitate another exception, or a continuation of the -- of the Conservation Order Number 211 to allow this well to go into production. Also, because of the nature of the -- the hydrocarbon in the nature of the natural gas, we would require then the additional area of 640 acres rather than a quarter section. The addition of the 640 acres lies within the State property. No other persons would be involved in the extension of the 640 acres other than the State. And if this Commission grants the exception so that this well can be developed as a gas well, that pursuant to 20 Alaska Administrative Code 25.517 and 520, then we would make the appropriate applications and prepare and supply all of the documentation as required by those sections. So basically what we're seeking at this point if a continuation of the exception granted in order number 211 and the application for the additional 640 acres from the quarter section that is now provided. That's about my application. MR. JOHNSTON: Okay. Thank you, Mr. Collins. Could you identify the principal officers of the Far North Oil and Gas for us? MR. COLLINS: That is Wesley Weichmann, W-e-i-c- h-m-a-n-n. what is ..... ? MR. JOHNSTON: And Mr. Weichmann is -- what -- 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 15 North. MR. COLLINS: He's with -- he's president of Far MR. JOHNSTON: He is president of Far North? MR. ELY: No. No, vice president. MR. COLLINS: Oh, I'm sorry. MR. JOHNSTON: Pardon me? MR. ELY: i. He's a vice president. MR. COLLINS: Vice president. MR. JOHNSTON: Okay. He's -- he's a vice president of Far North. MR. ELY: And James A. White is president. MR. COLLINS: James A. White is president. MR. JOHNSTON:' Okay. James A. White. Okay. Did James A. White assume the presidency from his father, James W. White? MR. COLLINS: That's correct. MR. JOHNSTON: Okay. Mr. Collins, are you aware that this well is currently out of compliance? MR. COLLINS: You mean the distance from the property lines and ..... ? MR. JOHNSTON: No. I'm specifically referring to information that is lacking in the well file. MR. COLLINS: No, I was not aware of that. MR. JOHNSTON: Okay. In -- the Commission in October, on October 3rd, 1987, requested information from the EIVED R & R COURT REPORTERS DEC 2 9 1992 810 N STREET 1007 WEST TH]RD AVENUE 1135 WEST EIGHTH AVENUE 277-0572 272-7515 272-3022 A~as~ Oil& GasOons. Oommiss FAX 274-8982 ANCHORAGE, ALASKA 99501 ~ChOrag~ 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 16 operator. That information was -- had to do with providing a proper well completion report and a well status. That information was not received by the Commission. We again requested that information May 22nd, 1991. Again we received no response from the applicant -- or, excuse me, from the operator. A third request was issued on January 7th, 1992, for that same information. Again, no response. Can you give us any compelling reason why the Commission should not proceed with an order to abandon this well? MR. COLLINS: The only thing that I could think of is that -- that Far North is presently in bankruptcy, that there has been a plan submitted to the Bankruptcy Court for a reorganization. And from what I have been informed, the plan as put forth has very good prospects of being approved by the Bankruptcy Court. I am at a loss other than that as to why this information was not provided. MR. JOHNSTON: Do you have any knowledge relative to the well's status? MR. COLLINS: Not personally, no. And all I -- all I have is the fact that -- that gas was discovered in commercial quantities, and that's about all I can tell you at this point. MR. JOHNSTON: You -- you indicated that -- you just stated that gas was discovered in commercial quantities. 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272' 7515 272'3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 17 Are you -- are you aware that the well file on record here in the Commission reflects that the well was never properly tested? MR. COLLINS: No, I was not aware of that, sir. MR. JOHNSTON: Okay. Our regulations, specifically 20 A.A.C. 25.225 require a well to be tested by a multi-point back pressure method before significant production. That is the method that we employ to determine whether there are commercial quantities of oil and gas or not. Basically any evidence that you bring forth to suggest that there are hydrocarbons would be less valuable to the Commission in making any decision along these lines. What we really require is a proper well test. And so from the standpoint of making any statements relative to the commercial viability of any discovery that may or may not exist in the McCoy Prospect Number One well, this Commission could not support any such claims unless actual ..... MR. COLLINS: Documentation, yes. MR. JOHNSTON: ..... evidence is provided via a proper well test. MR. COLLINS: Yes. I was relying upon the affidavits that have been submitted, but I -- I understand the Commission's position. MR. JOHNSTON: You -- you asked for a continuation of Conservation Order 211. I would like to note for the record that Conservation 211 was -- was predicated on the RECEIVED R & R COURT REPORTERS ~77-057~ 27~-7515 27~'~°~Jas~ Oil&GasCons. CommJssJol FAX Z74-898~ ANCHORAGE, ALASKA 99501 Anchomge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 18 well being an oil exploratory well, so I think the Commission will have difficulty continuing Conservation Order 211, if in fact the applicant is proposing that this is now a gas well. And it is my understanding that that is the request that is being made at this time, is that correct? MR. JOHNSTON: That's correct. MR. JOHNSTON: Okay. MR. COLLINS: Perhaps I should clarify that. We're not, I guess, asking that the order itself be continued, but that we're asking for the same type of an exception. MR. JOHNSTON: An exception to? MR. COLLINS: The -- the distance from the boundary, the southern boundary. MR. JOHNSTON: Very good. Our regulations, specifically 20 A.A.C. 25.055, which establishes drilling units and well spacing requirements on a statewide basis, establishes a governmental section as the drilling unit for a gas -- or for a well exploring for gas. It appears that what Far North is seeking here is application of the statewide rules. In other words, you are asking for section six to be declared the -- the drilling unit for this particular well, is ..... MR. COLLINS: That's correct. MR. JOHNSTON: ..... that not right? We would note that under the -- the statewide 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGIJT}I AVENUE 272- 7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 19 regulations, such a unit already exists. It appears to us what you really are seeking is an exception to the distance that a well can be placed next to the border ..... MR. COLLINS: Boundary. Boundary. MR. JOHNSTON: ..... of a drilling unit. In this particular case, the well, in order to comply with statewide regulations, would have to be placed 1500 feet from the section line, and what you're asking is an exception to that? MR. COLLINS: That's correct. MR. JOHNSTON: Okay. We would note that if that is in fact the request then, that there are procedures for asking for the spacing exceptions. Those procedures are articulated under section (b) of 20 A.A.C. 25.055. We would ask, therefore, that the applicant follow those prOcedures to seek an exception to the spacing requirements. MR. COLLINS: All right. MR. JOHNSTON: However, I also indicated earlier in this record before you arrived that the Commission would take no further action on the well until we -- until the well is brought back into compliance. Basically our review of the well file shows that the well was entered sometime in -- during the -- during 1985/86 time frame, but other than that, we have no information. We are left with two conclusions: 810 N STREET 277-0572 FAX 274-8982 REEEIVED . OU.T DEC?.'91997- 1007 WEST THIRD AVENUE 1135 UESTA~,~:~~S CO~S.comm~sS~' 272- 7515 272-~022 Anchorage ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 20 One, that the operation was shut down, which in that case the -- the well must be abandoned after a one-year period of -- of being shut down. The other is that the well wasn't completed, and the applicant has been delinquent in filing the completion report. So therefore the Commission will take no action on this matter until the -- the well file is brought current. And, in fact, we would establish a requirement of 30 days on that. MR. COLLINS: That it be complied with within 30 days? MR. JOHNSTON: Within 30 day. Or we will ..... MR. COLLINS: And that's the well completion report and the well status report? MR. JOHNSTON: And the information specifically requested in the -- the October 3rd, 1987, letter to the operator at that time, which was Alaska Crude Corporation. MR. COLLINS: Alaska Crude Corporation? MR. JOHNSTON: Yes. MR. ELY: I don't think that exists. MR. JOHNSTON: And I think it would be appropriate to enter that letter into the Exhibit. We will mark it Exhibit -- or McCoy Exhibit Number Four. (McCoy Exhibit 4 marked) MR. COLLINS: Would it be possible for me to get a copy of that ..... 810 N STREET 277- 0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272 - 3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 21 MR. JOHNSTON: It certainly would. MR. COLLINS: ..... at the conclusion? MR. JOHNSTON: Yes. MR. COLLINS: Thank you. MR. JOHNSTON: Lacking -- lacking a -- lacking the information that we have requested in those letters, the Commission can only arrive at one conclusion, and that is in fact that the operations were shut down some time in 1986, and therefore, the well is subject to immediate abandonment. So I would caution the applicant to take this request very seriously. MR. COLLINS: Yes. I shall expend my best efforts to see that it is done, certainly within the 30 days. MR. JOHNSTON: Thank you. Do you have any questions? MS. GRIFFIN: No. MR. JOHNSTON: Do you have any questions? MR. DOUGLASS: It looks like we've got it on the record. MR. COLLINS: My apologies for arriving late. I notice that there was one other speaker that had asked to speak. Could I have a brief summation as to maybe what he might have MR. JOHNSTON: said? basically said that they ..... 810 N STREET 277-0572 FAX 274-8982 The representative from Unocal MR. DOUGLASS: It was Phillips. R & R COURT REPORTERS 1007 WEST TH]RD AVENUE 272-7515 ANCHORAGE, ALASKA 99501 1135 WEST E]JI~I~[~/IO~I~ Gas Cons. Commi 272-3022 Anchorage 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 22 Phillips. MR. JOHNSTON: Or, excuse me, from -- from MR. COLLINS: From Phillips, yeah. MR. JOHNSTON: From Phillips. Basically indicated that at this time Phillips has no agreement with Far North to develop any of this property. MS. GRIFFIN: Did you want to address this? (Off record discussion by Commission) MR. JOHNSTON: Okay. At this time I would like to take another recess for about five minutes ..... MR. COLLINS: Thank you. MR. JOHNSTON: ..... to allow time for the -- the Commission to consult with one another to determine if we have any additional questions. MR. COLLINS: All right. Thank you. MR. JOHNSTON: Thank you. I note the time is approximately 12 minutes to 10:00 o'clock. (Off record) (On record) MR. JOHNSTON: I would like to go back on record. I note the time is approximately 10:00 o'clock. Mr. Collins, I guess for purposes of clarification, so we all understand one another, is it fairly clear in your mind what the Commission desires at this juncture from Far North Oil and Gas? 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272- 3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 23 MR. COLLINS: Yes, I -- I think it's pretty clear as to what is going to be required. I would have no further questions or statements I guess on the subject, except that ..... MR. JOHNSTON: Okay. So just to summarize, basically the Commission will require the well file to be brought into compliance, and that further action on this -- on -- on your petition will not be forthcoming until we receive that well information, that assuming that we do obtain the information that we have requested, then the applicant will then proceed along the lines to request and seek a spacing exception for this particular well, and that you will proceed the procedures outlined in 20 A.A.C. 25.055, ..... MR. COLLINS: 055. MR. JOHNSTON: ..... paragraph (b). MR. COLLINS: (b). All right, Mr. Johnston. MR. JOHNSTON: At this time, Mr. Collins, we have no further questions of you. MR. COLLINS: consideration. Thank you very much for your MR. JOHNSTON: I would like to take this opportunity to ask if there are other members in the audience that would like to make any statements at this time? MR. ELY: Yes, I would, Mr. Johnston. My name is Robert Ely. I've registered on behalf of James W. White and Intrepid Production Company. As ..... R'E"(EIVED R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST J~[~G~i~ OiL& Gas Cons. 272- 7515 272- 3022 AVENU~,ncho raga ANCHORAGE, ALASKA 99501 810 N STREET 277-0572 FAX 274-8982 On 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 24 White? MR. JOHNSTON: You are representing Mr. James W. MR. ELY: Correct. MR. JOHNSTON: Okay. Mr. Ely, do you wish to be considered an expert witness in this matter? MR. ELY: No. MR. JOHNSTON: Do you wish to offer sworn testimony or an unsworn statement? MR. ELY: Unsworn statement. MR. JOHNSTON: Thank you. Please proceed. MR. ELY: As the Commission is aware, I have represented James W. White, and I've represented also Intrepid Production Company, and as the Commission -- and we have discussed at considerable length, the Commission's desire to see the various wells that Alaskan Crude Corporation was responsible for as operator brought into compliance. As the Commission is aware, Mr. White as the principal of Intrepid Production Company has been working with the Commission, as have I, to try to qualify Intrepid as the successor to Alaskan Crude. I believe we have made considerable progress since we've started. Your most recent letter on the subject I think was helpful. And it is hoped that Intrepid will be able to essentially succeed to the former Alaska Crude Company -- Crude Corporation's bond and be able to be qualified as operator. I think as Mr. White and I have both reported to the Commission, as soon as Intrepid has 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 NEST THIRD AVENUE 1135 NEST EIGHTH AVENUE 272- 7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 25 qualified, their first order of business will be to bring all those reports that are deficient in line. Far North was succeeded in '86 or '87 by Alaskan Crude Corporation as the operator of this well, and was no longer responsible for the compliance reports that -- that you're requesting at this time. And as you're aware, eventually it got into financial problems and went into bankruptcy. As you're aware, Intrepid Production Company a year ago acquired the -- the operation -- the operatorship assets of Intrepid Production Company, which -- or of Alaskan Crude, which included the residual rights to the bonds -- the bond that was posted, a statewide operator's bond. The Commission's objection to transferring that bond to Intrepid at this point revolve around two leases on the North Slope that have casings I believe implanted in -- in pads on them, and the Commission has indicated that -- that the -- the operator's obligations with respect to those -- those leases would probably be released if the casings could be cleaned up as required by the P and A requirements of the Commission. The status of those two leases is currently before Judge Cutler on administrative appeal in Palmer, and she may or may not rule 'on a request for reconsideration that I filed asking her to reconsider her decision not to extend those two leases, and it's expected that sometime quite soon she will either rule, or the -- on the request I've made, or -- and that they will be extended, 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVEN~EO ~_ B 1992 272-7515 272-3022 Alaska 0ii & "' uas Cons, Oommi ANCHORAGE, ALASKA 99501 Anchorage ;sion 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 or it will be clear they're not going to be extended. I would assume if they're not extended that -- that -- that the permission that you requested in your recent letter from the Alaskan Crude's trustee in bankruptcy to do the P and A work on those two leases will be Sought and that the P and A will -- work will be done. That then leaves for Intrepid dealing with its obligations with respect to some -- some Katella properties that Alaskan Crude was formerly the -- responsible for as the operator. And I guess the Commission probably knows more than I know about the status of the new owners of the Katella properties and whether they -- they apparently so far have not been interested in designating Intrepid as -- as the successor operator. We would hope that they would designate somebody and separately qualify so that the -- the obligations under the -- the old bond can be cleared up so that -- so that Intrepid can qualify. And all of this is a kind of a preamble to my concern that this 30 day deadline is -- is not practical. The problem has been known to the Commission for some time. I think that -- that Mr. White and I have been working diligently to try to clear up the problem, and I think the Commission has been trying to cooperate consistent with its obligations under the statutes and regulations to effect that. But I think it's unlikely that there will be an operatOr to do this compliance work within 30 days, 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 and I don't think that Far North as the -- as the leaseholder -- I don't think leaseholders generally do the compliance reporting. It's operators, and if we could get that Intrepid operatorship problem cleared up, it would be easy I think to get those compliance reports in. And I would -- I would like to request that rather than a 30 day time limit which doesn't -- which is not realistic and doesn't seem to relate to anything that I've talked about, that we could tie it to something else. And I don't know exactly how you do that, you know. I guess -- I guess we could tie it to a reasonable time to do what was requested in your most recent letter, if those two leases on the Slope are determined not to be continued. I don't know how to deal with -- with Yakutat. The -- the guy over there keeps talking to -- to my client about making a decision one way or another. I don't know, Commissioner Johnston, whether you know anything about his intention, whether he intends to qualify as separate operator or whether he's not communicating with you. But if those could be resolved, then I think these reports could be -- could be promptly provided.f In terms of how much documentation exists, we have been in- -- Mr. White, who acquired the assets of -- of Alaskan Crude, was informed by the Alaskan Crude trustee in bankruptcy that he has no records, so there is no raw data to be used to fill in R & R COURT REPORTERS RECEIVED 810 N STREET 1007 WEST THIRD AVENUE 277-0572 272-7515 FAX 274-8982 ANCHORAGE, ALASKA 99501 1135 NEST EIGHTHB~I~E2 9 1992 272-3022 Alaska Oil & Gas Cons. Commis$io Anchorage 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 28 those reports. And I guess I should -- you know, at some point we're going to have to talk with your man, Mr. Crandell here, about what can be provided that will give the Commission sufficient comfort. But as far as we know, there are no -- here are no files, there are no records. There is no information that Alaskan Crude compiled that available through the bankruptcy trustee, and so even -- even if -- if Intrepid were today authorized to be operator and went to work on this problem, I don't know how complete those reports would be and how satisfactory they would be. It's -- it's a problem that's not of White's or Intrepid's making, or the Commission's making. Sometimes I guess in these bankruptcy situations, records just no longer exist. And I guess, you know, at some point some new data can be gathered concerning these wells that Intrepid would succeed to as operator and some current information could be provided, but in terms of historical data, I doubt that -- that'there is anything that any of us can do about that. I would like -- did I hear you say that in the Commission's opinion a 600 -- the 640 acre gas unit now exists pursuant to this regulation, so that that portion of the request that Mr. Collins made is not ..... MR. JOHNSTON: The state ..... MR. ELY: ..... not necessary? The only thing that's necessary is -- is to pursue this exception? 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272- 3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 29 MR. JOHNSTON: Statewide regulations establishes a governmental section ..... MR. ELY: Right. MR. JOHNSTON: ..... as the drilling unit for an exploratory gas well. MR. ELY: Are you satisfied that -- that the requirement in the order that a hydrocarbon pool has been discovered? If the well proves capable of hydrocarbon production, are -- are you satisfied based on the -- the affidavits and the photographs that -- that that is -- that requirement of Order 211 has been met? MR. JOHNSTON: We ..... MR. DOUGLASS: It's not the question. MR. JOHNSTON: Pardon me? MR. DOUGLASS: Go ahead. I don't see that that is a question for the Commission, being that they've ..... MR. ELY: It does- -- it ..... MR. DOUGLASS: ..... or the hearing before us. It's not a ..... MR. ELY: It doesn't say in the order ..... MR. JOHNSTON: Yeah. MR. ELY: ..... that gas in commercial quantities. I know that before commercial production can start that commercial quantities gas has to be demonstrator through the regulations, but Order 211 seems to say that you just have to R & R COURT REPORTERS 810 N STREET 1007 NEST THIRD AVENUE 1135 WEST EIGHTB~/~i}~I~'9 1992 277-0572 272-7515 272-3022 FAX2~-8982 ~S~ Oil& 6asCons. CommisSiOn ANCHORAGE, ALASKA 99501 A~cho~ge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 30 demonstrate that hydrocarbons have been produced. But if -- but the point of 211 was at that point the Commission would then establish unit. You're saying that a unit exists by virtue of the regulation, ..... MR. JOHNSTON: So ..... MR. ELY: ..... so we're just talking about the exception at this point. MR. JOHNSTON: I would note that the -- that the particular date on this Conservation Order was 1985. The regulations that are currently in existence are dated 1986. Those regulations establish the governmental section as the general drilling unit ..... MR. ELY: Uh-huh. MR. JOHNSTON: ..... for a gas -- or for a well exploring for gas. MR. ELY: So that took the ..... MR. JOHNSTON: Accordingly ..... MR. ELY: ..... place of the require- . .... MR. JOHNSTON: ..... the Commission feels that as a general matter, a drilling unit has been established. We make no -- no claims whatsoever regarding the producibility of this particular well. The information that you've provided us leads us to no conclusion relative to this particular well. MR. ELY: So your earlier remarks with respect to 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272-3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 31 I am not the lawyer for the Chapter 11. providing information necessary to demonstrate that gas in commercial quantities is what is required, what ..... MR. JOHNSTON: We would specifically ..... MR. ELY: ..... what was that? MR. JOHNSTON: ..... require a proper well test. MR. ELY: All right. MR. JOHNSTON: Mr. Ely, ..... MR. ELY: Yes? MR. JOHNSTON: ..... I -- I would like to -- for -- for the record, I would like to have you clarify the relationship between James W. White and the applicant here in this -- this petition, Far North Oil and Gas? MR. ELY: James W. White at the time that 211 was issued and the time that Far North as operator as well as leaseholder entered this well in '85/'86, James W. White was C.E.O. and president of Far North, and was principally involved in the work at the well site. Subsequently, I believe in connection with separation and divorce from his wife, he ceased being involved as management of the corporation, and all of his stock passed into the hands of others, I think principally his wife and -- and son, James A. White. And as you are aware, the corporation thereafter went into Chapter 11. His son is still the president of the corporation and the principal person involved in the Chapter 11. Thomas Yerbich is. R & R COURT REPORTERS RECEIVED 810 N STREET 1007 NEST THIRD AVENUE 277-0572 272-7515 FAX 274-8982 ANCHORAGE, ALASKA 99501 1135 NEST EIGHTH ~E ~ 9 t992 272-3022 Alaska OJJ & Gas Cons. Comnllss~c Anchorage 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 32 However, I, acting for James W. White, who is a significant creditor of the corporation, since the corporation itself did not present a plan of reorganization, I on behalf of a major creditor, the largest single creditor, did present a plan, and that plan is the one that Mr. Collins referred to that is moving through the -- the Bankruptcy Court. MR. JOHNSTON: So is it my understanding then at this particular time other than being a significant creditor to Far North Oil and Gas, James W. White has no legal relationship with Far North Oil and Gas? MR. ELY: That's correct. MR. JOHNSTON: Thank you. MR. ELY: With respect to the spacing exception, I guess I had assumed that the request that Mr. Collins was making to continue the exception was granted in connection with 211 for the -- the larger unit. I thought that that could be just adopted rather than having to comply with these provisions of .055(b) that you cited? MR. JOHNSTON: Well, we earlier had noted that Conservation Order 211 specifically exempted this well from the spacing requirements of 20 A.A.C. 25.055(a)(1). That provision addresses an oil well, not a gas well, so we would not extend this particular conservation order to the gas well. It appears to us that the most expedient way of resolving this matter is for the applicant, Far North Oil and Gas to seek a spacing exception 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272- 3022 ANCIJORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 33 to our regulation, 20 A.A.C. 25.055 for a gas well. MR. ELY: As was done with respect to the oil well before? that. MR. JOHNSTON: That's correct. MR. ELY: Ail right. I -- I guess I understand Well I guess that -- that leave the problem I was talking about before, the reasonable or unreasonableness of -- as a practical matter. I don't think it's unreasonable if -- if there were really an operator in place and there were data in filing cabinets to meet a 30-day requirement, but I think that that's -- you know, what you all know and what I know about the situation, there isn't any information, and there isn't anybody that -- you know, the standard person, the operator who provides this kind of thing to the Commission doesn't exist, and you're as aware as I am of -- of why that's -- that's the case. And I guess I would appreciate some flexibility about that time or -- or a different standard than 30 days as a measure of -- of compliance. And -- and again state that certainly my clients are eager to comply and -- and want to perform the obligations of an operator with respect to the wells that Alaskan Crude formerly was the operator of, and have diligently battled the State with respect to the Division of Natural Resources with respect to the status of those North Slope leases, and have made one-third progress, and I think your recent letter is a way to resolve the other two-thirds of R:F EIVED R & R COURT REPORTERS 810 N STREET 1007 WEST THIRD AVENUE 1135 NEST EIGHTH AVL~C 277-0572 272-7515 272-3022 Alasl~a Oil & Gas Cons. Commis FAX 274- 8982 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 34 that problem, but it's going to take a little while longer, so I would appreciate any -- any suggestion ..... MR. JOHNSTON: Yeah, I ..... MR. ELY: ..... you might have about how we might satisfy you and coming in here with -- with the -- the forms and filing them out and saying "no data exists," is not very helpful. It -- it fills your file with the reports, but ..... MR. JOHNSTON: Quite -- quite honestly, ..... MR. ELY: ..... how are we going to do that? MR. JOHNSTON: ..... Mr. Ely, I'm somewhat confused as to why you are expressing this concern given the fact that at this juncture Mr. White, by your own admission, has no legal relationship to Far North Oil and Gas ...... MR. ELY: Because Intrepid has ..... MR. JOHNSTON: ..... It appears to me ..... MR. ELY: ..... been designated as the operator. MR. JOHNSTON: Intrepid has not been designated as the operator ..... MR. ELY: Well, by -- by Far North ..... MR. JOHNSTON: ..... by this Commission. MR. ELY: ..... Oil -- by Far North Oil and Gas. MR. JOHNSTON: But they have not complied with all the provisions of a -- of a designation of operatorship to the satisfaction of the.Commission, so at this particular point, again, there is no relationship that has been legally established 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272- 3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 35 between James W. White and Far North Oil and Gas. MR. ELY: Well, I guess there -- there is a legal relationship between James -- between Intrepid and Far North in that one has been designated by the other as its choice of operator. The fact that the operator has had some problems complying with the Commission is a different relationship, but I think that -- that ..... MR. JOHNSTON: What I would like to note then is that in order for that operator, Intrepid, to satisfy the requirements of a designation of operator, he must post a bond. That operator has failed to do that. MR. ELY: We're both familiar with ..... MR. JOHNSTON: Yes. MR. ELY: ..... the -- the status of that. But that's why I am concerned, why my client is concerned about this 30-day requirement, because .as between him and Far North, Mr. White's company, Intrepid, is going to have to comply with whatever requirement the Commission poses. MR. JOHNSTON: Well, I believe the burden at this particular point is on Far North Oil and Gas and not on Intrepid. We are seeking the -- this data now from the lessee, which is our understanding is Far North Oil and Gas. We have attempted in prior days to obtain this data from the -- from the operator, Alaska Crude Corporation and have been unsuccessful in obtaining that. At this juncture, it is our R & R COURT REPORTERS R'EEEIVED 810 N STREET 1007 WEST THIRD AVENUE 277-0572 272-7515 FAX 274-8982 ANCHORAGE, ALASKA 99501 ,, 11~5 WEST EIGHTH AVCO 2 9 199P- 272-3022 AJasNa .Oil & Gas Cons. Commi,' Anchorage 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 36 decision to -- to proceed to obtain this data directly from the lessee who is ultimately responsible. MR. ELY: Do you believe that the data that's required can be provided by Far North Oil and Gas without any access to records, to past history? MR. JOHNSTON: As -- as the owner of the lease, I would hope that they have had that access, and have some understanding of what has been done in that particular well, ..... MR. ELY: But I'm sure they have ..... MR. JOHNSTON: ..... so therefore we feel it is -- is reasonable to request this information to be submitted to the -- to the Commission within a 30-day time frame. MR. ELY: Well, I guess I would reiterate my request that -- that either the time frame be lengthened or that a different standard than days be established, but we'll abide with what -- I'm sure Far North will live with whatever the Commission determines. MR. JOHNSTON: Well, again, I have to reiterate my confusion as to why James W. White or Intrepid through you would make a request to delay the submittal of this information. The request is being directed at Far North Oil and Gas, the lessee. MR. ELY: Well, I -- I think I explained that, Mr. Commissioner, that the agent that Far North will use for 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007' WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272- 3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 37 doing that is Intrepid Production Company, and so that's why I would ask it. MR. JOHNSTON: Do you have any further questions. MR. DOUGLASS: I have a question. MR. ELY: Sure. MR. DOUGLASS: You -- you alluded to the fact that in 30 days essentially they're not going to have any chance of -- of getting information, that if I read you correctly, you say it does not exist? MR. ELY: I guess within 30 days ..... MR. DOUGLASS: And ..... MR. ELY: ..... we could -- we could pro- -- fill out some forms and provide whatever information Far North knows of, but here has to be -- it depends on how much more information is required. And maybe if we had 120 days and Intrepid were the operator, we couldn't provide any more information, and maybe that's -- maybe the issue is how are we going to provide the information in these reports with no data. It's going to be pretty skimpy. MR. DOUGLASS: Well, if the data doesn't exist now, and -- and not -- it's not going to exist within 30 days, why do you need an extension for -- for longer than that if it doesn't exist anyway? MR. ELY: I guess maybe that's the problem, I guess. I'm asking for flexibility with respect to how much data REEEIV' D R & R COURT REPORTERS 277-0572 272-7515 272-3022 Alaska Oil & Gas Cons. Commiss FAX 274-8982 ANCHORAGE, ALASKA 99501 Anchorage 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 38 can be provided, which is not the subject of this proceeding. MR. JOHNSTON: Well, I guess at this juncture we would ask the applicant Far North Oil and Gas to attempt to comply with the data submittal information. If the information does not exist, they can make those claims. MR. ELY: Okay. And -- and we should work with Mr. Crandell~ ~ · ~ MR. JOHNSTON: The applicant Far North Oil and Gas should work with Mr. Crandell in satisfying the data submission requirements of the Commission. MR. ELY: Very well, we will -- we will attempt to do that as best we can, or Intrepid will as the agent of -- of Far North. MR. JOHNSTON: At this particular juncture, we would ask that that information come to us by the properly designated operator or the lessee. That until Intrepid has been accepted as a proper operator by the Commission, Intrepid has no standing before the Commission in this particular matter. MR. ELY: I realize that. MR. JOHNSTON: Okay. Do you have any questions? MS. GRIFFIN: No. MR. JOHNSTON: Any questions? Thank you, Mr. Ely, we have no further questions. MR. ELY: I thank the Commission. MR. JOHNSTON: Thank you. 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007' WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272- 7515 272 - 3022 ANCHORAGE, ALASKA 99501 -, 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 39 Again I'd like to extend an opportunity for any other members of the audience if they have any other statements they would care to make at this time? Any written comments? There being none, I would like to recess this hearing. We will keep the hearing record open for 30 days pending submittal of the information that has been requested. At -- at the end of the 30-day period, we will then close the record in this matter. At this time I would like to go off record. I note the time is approximately 25 minutes after 10:00 o'clock. The date again is December 3rd, 1992. Thank you. (END OF PROCEEDINGS) 810 N STREET 277-0572 FAX 274-8982 REEEiVED DEC 2 9 1992 AJasl~a ,0il & Gas Cons, Commission ~,nch'orage R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272 - 7515 272- 3022 ANCHORAGE, ALASKA 99501 10 11 12 13 14 15 16 17 19 2O 22 23 24 25 CERTIFICATE UNITED STATES OF AMERICA STATE OF ALASKA ) ) ss ) I, Meredith L. Downing, Notary Public in and for the State of Alaska, residing at Anchorage, Alaska, and Electronic Reporter for R & R Court Reporters, Inc., do hereby certify: THAT the annexed and foregoing Public Hearing regarding request of Wesley Wichman on behalf of Far North Oil and Gas, Inc., to establish a gas drilling unit for the McCoy Prospect Number One was taken before me on the 3rd day of December, 1992, commencing at the hour of 9:00 o'clock a.m., at the offices of the Alaska Oil and Gas Conservation Commission, 3001 Porcupine Drive, Anchorage, Alaska, pursuant to Notice; THAT this Transcript, as heretofore annexed, is a true and correct transcription of the testimony given at said Public Hearing, taken by me and thereafter transcribed by me; THAT the original of the Transcript has been lodged with the Alaska Oil and Gas Conservation Commission, 3001 Porcupine Drive, Anchorage, Alaska; THAT I am not a relative, employee or attorney of any of the parties, nor am I financially interested in this action° IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal this 12th day of January, 1992. Not~ry Public iff ~hd-~or Alaska My Commission Expires: 7/3/94 SEAL 810 N STREET 277-0572 FAX 274-8982 R & R COURT REPORTERS 1007 WEST THIRD AVENUE 1135 WEST EIGHTH AVENUE 272-7515 272-3022 ANCHORAGE, ALASKA 99501 Alaska Oil & Gas Conservation Co~m±ssion (AOGCC) 3001 Porcupine Drive Anchorage, Alaska 99501-3192 Far North Oil & Gas, Inc. DATE~ October 6, 1992 SUBJI~CTs Application by Par North Oil & Gas, InC. requesting the establishme~t of a Gas Drilling Unit per ADGCC Conservation Order 211 dated August 19, 1985. Gent 1 emen: Far North 0il & Gas, Inc., is an owner of equity in the McCoy #1 well situated in a~ oil exDloration unit consisting Of the 160 acre Southwest quarter o~ Section 6, Township 1 South, and Range 11 West, S.M., and states gas has been discovered in the McCoy #1 well bore. Far North Oil & Gas, Inc. therefore requests that the AOC~tC establish a Gas Drilling Unit in accordauce with Conservation Order 211, Alaska Statu%es and Regulations 20 ACC 25, and Alaska Statute 31.05, to consist of Section 6, Township 1 South, Range 13 West, S.M. (640 acres). The A~C's prompt attention tO this request would be greatly appreciated. S.~ncerely, Far North 0il & Gas, Inc. s78 2~O0001FEET 35' s79 / ;' I I/ s80 KENAI (A-5) SE QUADRANGLE ALASKA-KENAI PENINSULA BOROUGH 1:25 000-SCALE SERIES (TOPOGRAPHIC) 32'~30" i I ' "7 _. _ // ~F s82 I I I I s83 151° 30k- ..-T- (,~%~° 07' 30" I / L24oooo --t FEET / .,// / / / / ~64 6662 October 4, 1985 Mr. James W. !~hite President & CEO Far North Oil and Gas, Inc. P. O. Box 876 Kenai, Alaska 99611 Re: McCoy Prospect No. 1 Far North Oil & Gas, Inc. Permit No. 85-208 Sur. Loc. !44;FSL, 1489'FEL SE cr Sec. 6, TlS, R13W, SM. Btmho!e Loc. 131'FSL, 1663'FEL SE cr Sec. 6, TlS, R13W, SM. Dear Mr. White: Enclosed is the approved application for permit to re-enter the above referenced well to a depth of 3850 feet. ~The permit to drill does not indemnify you from the probable need to obtain additional permits required by law from other governmental agencies prior to commencing operations at the well site. To aid us in scheduling field work, please notify this office 24 hours prior to commencing installation of the blowout prevention equipment so that a representative of the Commission may be present to witness testing of the equipment before the surface casing shoe is drilled. ~.~here a diverter system is required, please also notify this office 24 hours prior to commencing equipment installation so that the Commission may witness testing before drilling below the shoe of the conductor pipe. Ve tr ,~'--y~? rs, f C. . Chatterton Chairman of Alaska Oil and Gas Conservation Conv, ission BY O~J~ER OF THE COI~MISSION be Enclosure cc: Department of Fish & Game, Habitat Section w/o encl. Department of Environmental Conservation w/o encl. Mr. Doug L. Lowery IN ?,E: APPLICATION OF F,'kR NORTH OiL & ) GAS COMPANY, iNC. q"O HAVF... 640 ACRE GAS ) PRODUCTION LrN!T$ ESTABLI$I.-tED IN ) SECTION 6, TIS,, RI3W~ SW ) STATE OF ALAS'KA THIRD JUDICIAL DtSTg,ICT Dwain Gib,on, beir~g first duly sworrt, d-~pose~ and say,: t. 1 ,,,;as pre~ent at th, site of McCoy Prospect No, i throughout winter of' 1985-I986 and regularly witr~essed th, 'o/ell t'low gas and gas b¢tng flared. FUB.Tt-I'ER AFFIANT SAYETH NAUGtqT, Ig4AIN GIBSON 1992. AND SWORN' to before n'~e this~o%""J clay of De.,ee, mber, Not~y ,Public for '.ALAS~ My Commission Expire,~: q- '~ ~: "_._.c3 t= ........ James A. White, P.E., D. Eng. 4845 NW Kahneeta Dr. Portland, Oregon 97229 February 14, 1992 Ralph E. Duerre, Esq. Burr, Pease & Kurtz, P.C. 810 N. Street Anchorage, Alaska 99501 Re: ~~_ct No, ! Dear Ralph' I am the Chief Executive Officer of Far North Oil & Gas, Inc., the leasee of the McCoy oil and gas property. The skies appear to be clmring for Far North Oil & Gas., Inc. Far North is moving toward resolving matters with your client. A.s a first step, we need to receive from Mr. McCoy documentation required by paragraph 9 of the August 1985 lease. Please work with him to come up with the requisite papers so that the matter of back rentals can be resolved. Many thanks, 2. RESERVED RIGH ., ha St~t~, for lt~alf and ethan, r~rv~ ail righ~ ~V ~mn~ to ~ b~ ~t~ limiting t~e ~Ii~ o~ the fo~mg ~t~, ~u~ ~ ri~t$ tn~u~e: (1) me right to exolom f~ oil, ~ ~ ~iated ~~ ~ ~T~ml a~/or ~yfi~i the,ll~ I~:' , ' ~ rt~t tO ~i~ or 9~t e~ ind ri~h~f~ for any la~ui Pu~, including ~thout I~mlt~iQn I~t~ su~: ' ,. (41 ~ H~t to dis~ of I~d within the le~d area for ~lL sitaa and ~11 ~ of ~ll drilled {~ or th~h the I1~ ami to e~lm f~ ~ ~ oil. ~ a~ i~m~ w~ in'~d from Iln~s not within the lel~ iai: and ~'~ ~mtion~ under tni~lea~, ' . . 4. EXTENSION OF PRIMARY TERM, .(ii B~ Sus~fllion of O~rationl. tf;'prior to the mxpir~loq of the ~tma~ ~. the S~tl dl~ Or a~ in writing su~nsi~ Of all o~mtions on or p~u~ion f~m the le~ lmm, the primm~ te~ shill ~ ~ ~in9 the mri~ of sus~si~ to t~e priml~ tim originally ~tied. For pur~ of this substrata, any tu~ntion ot o~ritt~t or p~u~ion ~ui~ by any ~ipulation ~l I ~ of this lel~ ~all not ~ ~nstdl~ i su~nsion un,er any o~er by. or ~th . {b) By Fo~ ~aieu~. if ~he..Sta~ .d~rmin~ that. prior, to ~he expir~iom of t~e pd~ ~erm, La~ h~ ~n p~t~ of t~ ~nditi~t 32 from ~dorming any act which ~-ul'd'extend ~yond the pri~ the pri~ term, tl~ ~ill ~ exmn~,.bg~dainq the ~rl~ o~ di~iliw to the orima~ term originally ~fied'. ~~ . ' ~/~0 ~, 5,~.~E~ENSION BEYOND PRIMARY TERM. {aS By P~umion. ~is I~ ~all ~ ext~ l~6'~ti~lly if and f~ ~ (bi BY Come,smut ~o Aoora~ Unit. ~it learn shall ~ extefl~d mutommti~ilv if It is ~mmi~ed to I ~ni~~nt /Ip~m~ by ~ St~e. anO ~hall ~in in full for~ :nd eff~ ~ long ~s it ~maint ~mmt~ed ~o su~ · unit a~nt. (Cf By Oriltinq. (1} If drilling h~ ~mmen~a as et th. date on which this lea~ otne~i~ ~uld exolre and is condn~fl ~~~n~. this lea~ ~all c0q~.inuq_~.~)~.,.~0[.cp and effect until ninety (~] days liter ~tlon of ~uc~ drilling and for m Ion~% aml, and il tu~ Dr~uc;ion ~a~ at any time, t~it lea~ s~all not terminate il drilling or re~rktflg o~rat~onl am comme~ on ar~l within (6) months after cessation of production and thereafter are prosecuted witn reasonable delian,: if such drilling or ~rRiqg o~rations ~ult [n t~a Dr~uc~ion of oil or gas. thiB loam shall remain in.full for~ and affe~ .as long as al. or ~s is pr~u~ in ~ q~ntiti~ from ~ha toned area. . ' ~ {d) BY ShutAn Produmian. If them is a ~il ca,able of oroducing oil or gat in oaying quantitie~ on the lea~d area, thil I~ ~all not exoir~ ~u~ Les~e fails to Dr~u~ the ~me unless t~e ~tate ~ivel notice to Les~ mll~ing I masonaDle tl~. whic~ shill not ~ le~ than ~ix (6} mon~l, after suc~ no~ic~ to ol~ the well on a or~ucing ttatul, an~ La~e fail~ to do ~: If ~r~u~ng status i$ e~tlbli~ ~thin the time allo~, this lea~ is extended only for ~o long thereatter as oil or gas it or~u~ In Dav~ng ~uantitie~ f~om the le~ area. (eS BY Sut~n~ton of O~rat~on~ or Pr~uction, This lea~ shall not exDtre ~u~ of any sus~nsion of o~tlonl on or pr~umi~ ~m the lea~ a~a il the tu~n~on ~t m~e un~r an~ or,er by. or with t~e written con~nt of. the Stata. Upon rem~l of tu~ lus~nsion, ~l ~all ha~ a reasonable time, ~ich ~all not ~ le~ than six (6) monthl alter noti~ that the ~u~nsion has ~en mmo~, tO resume o~rations or Om~u~ion. F~ ouroo~ of this ~uboamgraDh, any sut~ntion o{ o~rationt or or~uction r~uir~ by any stipulation m~o a ~ of ~is lea~ shall not be ~n~ider~ a tut~nsion under any or,er by, or with the written ~n~nt o~. the State. if) By For~ Ma{eum. If the State demrminet tha~ Lessee has ~en Dmvented byanyef the con~itionls~cifled in Par~mpn 32 from ~orming an a~ w~ich would extend the II~ ~vond the prima~ term. this lea~ s~all not expire during the te~ of disabili~ plus a reasonable time t~eteaft~, which ~aJl not ~ le~ than ~ixw (~) days, for Les~e to resume ooerations or pr~uction. RENTALS. (al Les~e shall O~ annual rental to the State in accor~an~ wit~ the following rental ~edull: {1} For the first year. Sl .~ per a~e or fra~ion thereof: (2J For t~e se~nd year. $1.~ ~r acre or fraction thereof: {3) For the third year, S2,00 per acre or fraction t~ereof: [4) For t~e fourth year, S2.50 ~r ~re or framion thereof: ~ (51 For the fifth year lad following yearn. ~.~ ~r acre: provided that the State may increa~ the annual rental rata al provided by ~aw u~n extension of this lea~ ~yond the prima~ term. {b) Annual rental paid in ~van~ i~ a Credit on the rovalw or net profit share due under this lea~ fat that yea~. (cS Les~e shall Day tho annual rental to t~e State (or any deposito~ designate~ by the State with at least sixW {~) day=~ noti~ to Le~el in ~van~. on or ~fore the annu~ anniwrsaw date o( this lease. The State is not r~uired to give notim that rentals are due by billing Los~. and no bill ne~ ~ ~nt bY the State to Las2ee. If ~he State's {or depos~tow'sl office is not o~n for business on the annual anni~ date of this le~~e~or Davment is extended to include the next day on which said office i$ o~n for butinen. If the annual rental is not ~id timely, t~is lea~tom~i~lly termlnatel at [o ~th ~arties at 11:59 p.m.. Alaska Standara T~, on the da~ by which the rental Oay~t w~ to ha~ ~n o~.' 7. SHARE OF NET PROFIT. Les~e will pay to the State~.~7~ of th;net profit defied by Le~ from thitle8~. For pu~sel of shit Par~a~, ~lculation of the net profit shall ~ domrmtn~ in ac~rdan~ with 11 AAC 83.201 thtoug~ 11 AAC 83.295 as those mgUlltion~ exi~ on the eifecti~ date of this laa~ ~ .............. : ..... ~, n a u · ~ ,~ ....... /~Ola~. The m~unt of [ntem~ to ~ earned on t~o net profit share d~lopment account pursuant to 11 AAC 83.212 will ~ the a~rm~ of thl prime rate,.of t~a Citibank. NA New York: Chase Manhattan Bank, NA New York;and the Bank of A~rica, NT and SA ~n Frlnci~o, p~admg during the month. ROYALTY ON PRQDUCTION. (al Ex,pt for oil.gat and ~ciate~ ~ubstancas u~ on the lea~d ama ior de~lop~en~ and (1) On oH, twenty (20) ~r~nt in amoun~ or v~lue of the ell ~d, remove~, or sold from the le~ed area, {2) On gas, twenty (~) ~r~nt in amount or ~lue of the gat ~o. r~mo~ or told from the laa~ ar~a or u~ on t~ le~ ama far th~ extra,ion of natural gasoline or other oroductl t~erefrom, (~) On associate~ subs(ances, t~nty (20) perc~n~ ~n.amount or value of the associated,substan~s ~d~ remand, or ~ld from the lea~ ami. ALASKA OIL AND GAS CONSERVATION COMMISSION DECEMBER 3~ 1992 PUBLIC HEARING MCCOY PROSPECT NO. 1 WELL SIGN IN PLEASE NAME & COMPANY (PLEASE PRINT ) Yes Do You Plan to Testify? No IN RE: APPLICATION OF FAR NORTH OIL & GAS COMPANY, INC. '['O HAVI~ 640 ACRE GAS PRODUCTION UNITS ESTABLISHED IN SECTION 6~ TIS., Ri3W, SW ) ) ) ST ATE OF ALASKA THIRD JUDICIAL, DISTKICT ') Dwain Gib,on, being first duly sworn, deposes and says: !. I was present at the site of McCoy 'Prospect No, I throughout the winter of 1985-t986 and regularly wtmessed tl~e well flow ga,, and gas being flared. FU~TH'EI:~ AFFIANT SAYETH NAUGHT, DWAIN GIBSON 1992. SUBSCRIBED AND SWORN to before, me this ~_~ day of December, Notary Public for'ALASKA My Commission Expir~: ._2.~z.) , RECEIVED DEC - 7 1992 AJaska OJJ & Gas Cons. Commission ~.ncborage iSTATE FARM1 DWAIN GIBSON INSURANCE AGENCY, INC., Agent Auto - Life - Health - Home and Business .... ~: P.O. Box 910 Kenai, Alaska 99611 Phone: Off: 907-283-7116 Res: 907-283-7098 ' IN RE: APPLICATION OF FAR NORTH OIL & ) GAS COMPANY, INC. TO HAVE 640 ACP,.E GAS ) PRODUCTION UNITS ESTABLISHED IN ) SECTION 6, TLS., RI3W, SW ) · 1, -- -. ,, il, ) STATE OF ALASKA ) THIRD JUDICIAL D~STRI'CT ) James W, White, being first duly sWorn, deposes and says: 1, I provide this affidavit for use by the Oil & Gas Conservation Commission in the above cited proceeding, 2, in I985,.86, I was Clio and president of Far North Oil & Gas, Inc. and responsible for reentry of Ninilchik No, 1 well as authorized by Conservation Order No. 211, 3. Upon reentry oil was not found but gas was, 4, From early December 1985 throughout the early winter of 1986 1 caused repeated testing and flowing of' the well to occur in order to ensure that hydrocarbons had been discov,red in the well. During the period I observed the testing and flowing and witnessed larger quantities of' natural gas being produced. 5, ?ho'tographs of thc well in place on the NinilchJk bluff and of the gas being flared have been provided to the Commission. FURTHER AFFIANT SAYETH NAUOHT, ' /,,' eSW, Whit~-~'~ - SUBSCRSBED AND SWORN To before me this _~day of December, 1992. Notary Public for Texas My Commission Expires: CZ) DEPT. OF MATURAL RESOURCES CONT. submerged land for the purpose of log storage. The proposed permit site consists of Alaska ~detand Survey 1172, located within Section 19. Township 77 South, Range 84 East, Cop per River Meridian. The prOposed action will grant the applicant exclusive use of the improvements placed on fl~e site for a term of 5 years, Con~~n O~er 217~~d '~u~ 19, 1985. This driffiflg ,u,a~ ~ ~ ...... ' ' '~~ab~' - - tha ~uth li~ end 1489' ~~e ea~ Iiflo of Socteon 6, TlS, R13W, Seward Meridian (surface). Anyone wishing to comment on the proposed action must submit them in writing to the Southeast Regional Office, 400 Willoughby Avenue, Suite 400, Juneau, Alaska 99801. To be considered comments must be received by (30 days from date of publication). Further information concernin; the proposed action can be obtained by calling Bruce Johnson at 465-3400. Andrew W. Pekovich, Regional Manager, Department of Natural Resources, Division of Land, Southeast Regional Office, 400 Willoughby Avenue, Suite 400, Juneau, ALaska 99801, Telephone: (907)465-3400. Published: October 1992 Alaska Oil end Gas Conservation Commission Re: The request of Wesley Wiechmann on behalf of Far North Oil and Gas, Inc. to establish a gas drilling unit far '(he McCoy Prospect No. ~ well. Notice is hereby given that Wesley Wiechmann on behalf of Far North Oil and Gas, Inc. by letter dated October 9, 1992 has rectuestecl establishment of a Gas Drilling Unit per AOGCC A hearing on this matter will be held in conformance with 20 AAC 25.540 in the Oil and Gas Conservation Commission office 3001 Porcupine Dr. Anchorage, Alaska at 9:00 am on December :3, 1992. All interested persons and parties are invited to present testimony. Russei! A. Douglass Commissioner Alaska 0il and Gas Conservation Commission DEPT. OF CORRECTIONS Electronic Monitoring Equiprneet and Service The Department of Corrections, Division of Community Corrections, has issued a Request For Proposals (RFP) for an imdividual and/or agency to provide eleclronic monitoring equipment and rnonit~xing services for a six {6) month pile1 project in Anchorage, Alaska. Dependent on the results of the pilot project, the suca;essful offerof's contract may be extended for an additional three years dependent on funding and upon the needs of the Department of Corrections. Proposals will be received for the above specified services until November 25, 1992. if you are interested in receiving a copy #12812 STOFO 3 A0-08-5723 AFFiDAViT STATE OF ALASKA, ) THIRD JUDICIAL DISTRICT. ) Eva M. Kaufmann 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 10/30, 1992 OF PUBLICATION Notice of Public Hearing. ,-'STATE OF,ALASKA ~..'.' ~., Alaska,;Oil,~:and Gas" t: ~Conse~vati°n:;'iC0m m issi°1~,?> u i Re: The request' ~f' wesley i Wiechmann on,behalf of ,Far i:';ii~O~:th Oil and,GaS, Inc~, to ,~stablish ages drilling unit for ~:~,he McCOy Pros~ct No. , . ~ ,,:~,~;], ~, ,, . , N'°ti,~e is'.hereby given 'th'at ' W~IeY, ,W~Chmann on ~half ,~t~F, er',N~h Oil ,a,n~ Gas, inc., bY,~,le/ter~d'~ed October 9, has' 'requeSted establ shment of':"a Gas'Drilling' Unit~ per AOGCC- Conservation Order 2,~]',,dat~ A~ust ]9, 1985. This d~illng,unit would serve es a Vehicle for, development of ,,,F~sources related tothe ~c' :~Oy:,Prospect No. ~ Well Iocat- '~d~ 144' from'the SOUth, line 'and ;~' from, the ,east ine of .'~Sec'ti~ 6, T,IS; Ri3W, Seward ~eridian (surface).,, 'A,~'hearin'g, on 'thi~ matter WIll' ~e~'.bel.d,, i,O~' confOrmance w~ith '[~,~AAC 25',.540~:, in, ,t~e, oi ,~,' Co~servat~0n,: corn m iss'ion ; :,:o'ffice, 300~,,pOrcuplne D~. I ~h0E,age,, Al~aska,:at 9 00 am on Dee'ember 3~ i 9,92;, plll,'interesf- ',~d:,~': pe~$on,S,',:~nd,',~,,.part,ies are :,,~ ,:[',,,' ,, and that such newspaper was regularly distributed to its subscribers during ali 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. signed ~'.~L ~ Subscribed and sworn to before me this ..C~.. day of~.~,'~J~~ "~~tary Pui:'~in':i: for the State of Alaska. Third Division. Anchorage, Alaska MY COMMISSION EXPIRES MY COMMISSION EXPIRES ......... J.~l,y..~,. ]~.~ ............... 19 ...... RECEIVED NOV - 4 1992 Alaska 0ii & Gas. Cons, 6ommissio~ Anchorage Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re~ The request of Wesley Wiechmann on behalf of Far North Oil and Gas, Inc. to establish a gas drilling unit for the McCoy Prospect No. 1 well. Notice is hereby given that Wesley Wiechmann on behalf of Far North Oil and Gas, Inc. by letter dated October 9, 1992 has requested establishment of a Gas Drilling Unit per AOGCC Conservation Order 211 dated August 19, 1985. This drilling unit would serve as a vehicle for development of any resources related to the McCoy Prospect No. 1 well located 144' from the south line and 1489' from the east line of Section 6, TlS, R13W, Seward Meridian (surface). A hearing on this matter will be held in conformance with 20 AAC 25.540 in the Oil and Gas Conservation Commission office 3001 Porcupine Dr. Anchorage, Alaska at 9:00 am on December 3, 1992. All interested persons and parties are invited to present testimony. Russell A. Douglass Commissioner Alaska Oil and Gas Conservation Commission Published October 30, 1992 DATE~ Far North Oil & Gas, Inc. 4~4§ NW Kahneeta Poaland, Oregon 97229 PhOne (5~3) 690-6173 Fax (503) 6~9-87¢7 300! ~orcuDine Drive AnChorage, Alaaka 995~1-3192 Far North Oil & Oas, Inc. Octobeg 9, 1993 Application by Far ~orth Oil & Gas, I~c. req~/es~ing the estab%£shment of & Gas Drilling Unit Der AOGCC Conservation Order Zll dated August 19, 1985. Gentlemen~ Far North Oil & Gas, Inc., is an owner of equity in the McCoy #1 w~ll situated in an oil exploration unit $on$istin~ of the 160 acre goutheast ~u&rter ~ ~a~t~O~ ~, TOwnShip ~ South, and Range I~ West, S.M., a~%d statem gas has been discovered in tbs ~cCoy #1 well bore. Far North 0il & Gas, Inc. therefore reque$=$ Dhat the AOGCC establish a ~aS Drillfng Unit in accordance with Conservation Order 211, A~aska S~a%u~e8 31.0s and Regulation! ~0 ACC 25, to consist of Section 6, TOwn,hiD [ So,Dh, Range 1_1 West, S.M. {640 aCre~). The AOGCC'~ prompt attention to this request would be greatly appreciated, Sincerely, Far ~o~th 0tl & Gas, Inc.