The URL can be used to link to this page

Home My WebLink AboutCO 102 ) " Image Project Order File Cover Page XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. C 0 () a Order File Identifier Organizing (done) 11II1III11111111111 o Two-sided RES CAN DIGITAL DATA o Color Items: o Greyscale Items: o Diskettes, No. D Other, No/Type: o Poor Quality Originals: o Other: NOTES: f Date:,' ;;"O.(J b . BY: ( Maria) Project Proofing I Date: ~ '().p. f] h 4- X 301=' I:lO Date::i á(J D 0 BY: (, Maria) Scanning Preparation BY: (<;t Maria_J Production Scanning o Rescan Needed 1111111111111111111 OVERSIZED (Scannable) o Maps: o Other Items Scannable by a Large Scanner OVERSIZED (Non-Scannable) o Logs of various kinds: o Other:: mP 151 111111111111111111 mJ 151 + d-.~ = TOTAL PAGES ; 4 3> (Count does not include cover 5 lee~) Ij\AJ 151 r V ~ 1111111111111111111 Stage 1 Page Count from Scanned File: 14-~ (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: V YES BY: ('.Maria) Date: 3/d-D éJ (¡;, Stage 1 If NO in stage 1, page(s) discrepancies were found: YES BY: Maria Date: Scanning is complete at this point unless rescanning is required. ReScanned BY: Maria Date: Comments about this file: NO 151 vvtiD NO 151 11111I11I1111111111 111111-11111111111 151 Quality Checked 1IIIII1111111111111 10/6/2005 Orders File Cover Page.doc 1. April 24, 1971 2. May 26, 1971 3. May 1971 4. May 26,1971 5. May 27, 1971 6. June 2, 1971 7. June 2, 1971 8. June 3, 1971 9. June 4, 1971 10. June 15, 1971 11. July 6, 1971 12. July 8, 1071 13. July 9, 1971 14. July 16, 1971 15. July 5, 1973 ) / Index Conservation Order 102 Notice of Hearing and Affidavit of Publication Memoradum Subpoenas Transcript of hearing Letter from Rock Island Oil Company to Mobil Letter from Mobil to Kaloa re: selling casinghead gas Letter from Mobil to Tyonek Management Corporation Letter from Mobil to AOGCC Letter from AOGCC to Mobil re: visitors interested in gas in the Cook Inlet Letter from Amoco to AOGCC re: supplemental information for record of MGS and Granite Point hearings Letter from Joint Interest to Kaloa re: selling casinghead gas Native Village of Tyonek to Mobil re: supply of gas Mobil offer to sell gas to many different companies Letter from Rock Island to Mobil regarding selling Mobil's share of the casing head gas being produced from the Granite Point platform Letter from Amoco to AOGCC re: emergency flaring of excess gas Conservation Order 102 ) 1 STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage~ Alaska 99504 Re: THE MOTION OF THE ALASKA ) OIL AND GAS CONSERVATION COMMITTEE ) to hold a hearing to consider ) issuance of an order or orders~ ) effective July l~ 1972, restricting ) the flaring or venting of casinghead ) gas from the referenced oil pool ) to the amount required for safety ) Conservation Order No. 102 Granite Point Field Middle Kenai Oil Pool June 30, 1971 IT APPEARING THAT: 1. The Oil and Gas Conservation Committee published a notice of public hearing in the Anchorage Daily News on April 24, 1971, pursuant to Title 11, Alaska Administrative Code~ Section 2009. 2. A public hearing was held on May 26, 1971 in the City Council Chambers of the Z. J. Loussac Library, 5th Avenue and F Street, Anchorage, Alaska, at which time operators, subpoenaed witnesses, and affected and interested parties were heard. The hearing record was held open through June 4, 1971 and additional information was received. 3. Conservation Order No. 100, permitting the flaring of casinghead gas in excess of the maximum amount that can be beneficially utilized, expires June 30, 1971. FINDINGS: 1. There is a growing shortage of natural gas in the contiguous 48 states and Hawaii, and natural gas is being sold at increasingly higher prices in both intrastate and interstate markets. 2. There are increasing needs for natural gas in the village of Tyonek and Greater Anchorage Area and Kenai Peninsula Boroughs, on both interruptible and uninterruptible bases. Specific needs are those of the Native Village of Tyonek, Inc., Chugach Electric Association, Inc., the City of Anchorage Municipal Light and Power Department, and Alaska Public Service Corporation. 3. Alaskan gas is being exported to Japan, and there are potential markets for Alaskan gas in the contiguous 48 states and Hawaii. 4. The Jones Act has impeded utilization of Alaskan gas elsewhere in the United States. s. Substantially all fuel requirements on the oil-producing platforms of the Granite Point Field are now met by casinghead gas. :¡; 1 e "'" 1- 2. Effective at 7:00 A.M., ADST, July 1, 1972, the flaring or venting of casinghead gas from the Granite Point Field is prohibited, except for the amount necessary for adequate safety flares and except in emergencies. 1. Casinghead gas in excess of the maximum amount that can be beneficially utilized may be flared until 7:00 A.M., ADST, July 1, 1972. NOW, THEREFORE, IT IS ORDERED THAT: 3. A hearing is required to determine the amount of gas necessary for adequate safety flares. 2. Except in cases of emergency, the flaring or venting of gas after 7:00 A.M., ADST, July 1, 1972 in excess of the amount required for safety will constitute waste as waste is defined in AS 31.05.170(11). 1. One year is a reasonable period of time in which to complete arrangements for use of excess casinghead gas currently being flared. CONCLUSIONS: 11. Expert opinions differ as to the effect on ultimate recovery of a restriction in the rate of production or injection under a fluid injection project, but it is not proven that any such restriction will reduce ultimate recovery from the referenced pool and thereby cause waste. A fluid injection project is in operation in the Granite Point Field. 10. Restricting the flaring or venting of casinghead gas produced from each of the three platforms in the referenced field to a volume necessary for an adequate safety flare will conserve gas. 9. There was insufficient testimony as to the minimum amount of gas necessary for a safety flare. 8. During 1970, 8,415,694,000 cubic feet, or 86% of the gas produced from the Granite Point Oil Field was flared. 7. The Oil and Gas Conservation Committee has been concerned with the flaring of casinghead gas from the referenced field since 1967 and has held several public hearings to determine the progress of eliminating gas flaring in excess of the amount beneficially used. 6. The casinghead gas and the entrained liquids now being flared could be beneficially utilized. There are uses for interruptible casinghead gas, and alternative fuels exist in the event the supply of gas is interrupted. Conservation Order No. 102 Page 2 June 30, 1971 1 ) 1,·,111., _--'. .- o.€C~~~~<~· Alaska Oil and Gas Conservation Committee /~¿,fS~·øc Homer L. Burrell, Chairman Alaska Oil and Gas Conservation Committee Con-currence: Olt dL. ¡( /t¡~·1 Thomas R. Marshall, Jr., Executive Secretary Alaska Oil and Gas Conservation Committee DONE at Anchorage, Alaska. and dated June 30, 1971. 3. The commencement, nature and termination of all emergencies requiring flaring of casinghead gas in excess of the amount required for safety flares shall be reported to the Committee within 96 hours after occurrence. Conservation Order No. 102 Page 3 June 30, 1971 ",-",/ ~ #15 \, \~ .. ). \: ~; Amoco Production Company P. O. Box 779 Anchorage, Alaska 99510 File: WMJ-369-986.5l1 .~ II [ß ~ { c [(.' ...< 0' (l,r'-':!- 1\' 't. .'>" Q X, '("~ f',¡.:" ..,,.,,,,--,'''II!!.Si'( \ L- l,\\ ( ¡ 6 t.l ,I DlR I o S I C.-GËÕl~ -lc~' ÈÑG I ;. iT--ÈÑG I - ----2-.-ËÑG-l- '---r3-f~G I "". -r-'4-'Ë}f3 I . ....-- r--:S-"ÈNëfi --rT'GEõC-¡- . ...... -r'-2- GEOt 1 ¡ ·....·1'-3· GEót-l- '. . --.---..-.. ¡.. ~ Urf ~v II e.-.c1 ;~R~V 1 !, OyJ q.vS I~~~~-~l Þ J JJ1 5' /7 3~JNFËS:'C I I', ~ FILE: r , ,j July 5, 1973 " Mr. Hamer L. Burrell, Director Division of Oil and Gas Department of Natural Resources State of Alaska 3001 Porcupine Drive Anchorage, Alaska 99504 Dear Sir: Afp(t c-<~ Ct '-4 ,f,,, Re: Emergency Flaring of Excess Gas We have confirmed with Collier Carbon and Chemical Corporation that ,their Kenai plant is shut down as a result of a fire and explosion of undisclosed nature. Repairs are underway and a plant turnaround i$ in progress in con- junction with the accident. Collier anticipates having the plant in opera- tion July 14, 1973. Repairs to the equipment involved in the explosion will not be finalized until that date at the earliest according to Collier's rep- resentative. .In accordance with Alaska Oil and Gas Conservation Regulations, Section 2012, 1969, knoco Production Company and Shell Oil Company respectfully request that the Alaska Oil and Gas Conservation Committee issue an emergency order for 15 days to allow the flaring of the excess gas at the joint Amoco and Shell shore facilities in a quantity equal to that which would have normally been delivered to the Collier plant as sales gas. Should this emergency situation be corrected and normal gas sales to Collier resumed prior to ex- piration of the emergency order, we will notify you immediately. Yours very truly, 9JWJ c .~~tJ-1/Ú-¿fiJ '-¡John C. Schillereff Supervisor in Charge Amoco Production Company -/ ;'. ./) J-! 7~/. ¿J" C:7(Cc- j/\j.-'2-~'}J- K. W. LaGrone Division Superintendent Shell Oil Company m,D IE © IE ~ W .lE )ì .J\\ I~ JUL 5 1973 DIV1SiGi~ vf ü!l AND GAS ANCHORAG~ .~ "-I STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS Alaska Oi I and Gas Conservation Committee Re: Emergency Order July 5, 1973 Conservation Order Fi Ie 102 Granite Point Oi I Field Because of fire and explosion at the Col I ier Carbon and Chemical Corporation plant, Amoco Production Company and Shel I Oi I Company applied for the referenced order by letter dated July 5, 1973 requesting the emer- gency flaring of excess casinghead gas equal in volume to that which would normally be del ivered to the Col I ier plant. The gas wi I I be flared at the joint Amoco - Shel I faci I ities on the east shore of Cook Inlet. Pursuant to Alaska Administrative Code Section 2012 permission is hereby granted to flare excess casinghead gas in an amount equal to the normal sales volume to the Col I ier Chemical Company until 7 AM A.D.S.T. July 21, 1973 or unti I normal gas sales are resumed to Col I ier Chemical Company if this occurs at an earl ier date. Thomas R. Marshal I Jr. Executive Secretary Alaska Oi I and Gas Conservation Committee 3001 Procupine Drive Anchorage, Alaska 99501 #14 ... ') ) Bock Island OB Cbmpany r-r-- DIVISION OF KOCH INDUSTRIES INC ~rntC:¡>! ~9 July 16, 19?1 Hobil Oil Corp. P.O. Pouch 7-003 Anchorage, Alaska 99510 Attent4,on: Mr. V. B. Porter Dear V Ð.nce : ::.~ i , ..... 'J::,' "'.~ He are currently concicJel'ing your,offer to sell Mobil's share of the casing head gas being produced from your Granite Po~l.nt ·platform. As soon as a. dec5.s:i.on is reached ¥j(:: ¡,Jill be in touch ""1ith you. Yours very truly, f ¡fc'l',:,¿(?J lJ/~:0~ i \ \ I Reginald H. Elkins Alaska Division Xgr. ... - - - _.~ ---- -, - ..--.-... ______,..___.___.'__...~________.____._.____ .___.___.,.... .'"____,~_.__._ __.._____."..._ __,..____ _._._ _.. __._____·w _._.____.._ __.______. _ .... ._._ _ . .. -.."-" ..._- . .-- ....." -.. - . _ .__ _,_ ~u _....... _. '___'_."._..._ _ ~0 n r'\ nr--.'ø, '1'1n #13 ~",,---- ) ) 1\11 ()~, ~ ~ o)~ ~ c; () r~) () ~'~(~ 'H' ~ Û¡ ~'1 POST OFFICE POUCH 7-003 ANCHOFlAGE, ALASKA 90501 July 9, 1971 .. " , r Gcntlcll1Cn: Mo[)il Oil CorporaHon offers to sell a certain qua,ntity of casing head gas '\vhich is currently being produc ed £1'011.1. au l' Granite Point platfornl. located in the Cool\: Inlet of ll..1aska in Secti.on 13, 1'10N, R12"\V, S. M. The £fas \vhich·\vc· offer for sale is that v¡hich is in exceSE; of our needs ~, for platforn1 and shoresite fuel-l'cquircrncHts and a sn1a.1l indµstrial . sale to Atlantic Richfield COlnpanY. The expected rate of Pl··öc1uction of such excess gas through Tll.id-1984 is dc>.pictecl or: the attached graph . in the hatcherc1 area. Mobil is o'\'\incr of 75 percent of the gas and tb.at quantit.y is hel'cby tendered £02' sale. Union Oil Con1.pany 01 Califol'llia is o\vner of 25 percent. This offer is ID.ade .on beha.lf of 1vlobi1 only. Mobil \vill consider offers to purcha.s ü· the gas ,under one of hvo options', which are: 1.. LOVl pressure casing head gas (50 psig) on our pla.tforrn to be delivered to a co"ropTcssOT purchased and installed by purchaser provided such cornpressol' ins.tallation is approved by 1\1obil 2nd Mobil '\vill opera.te the cOlnpl'eSSOl' for purchaser. Under this Option ¡¡'1~ the purchaser \vill install and n1aintétÎn, 2.t his' sole expense, a pipc:1.ine necessary to move the gc·\,s f1'on1 the p12tfol':;n to shore. The price to the purchascr for the lo\v-pl'cssure, ra\il, unc1chyc1rated ." _casing head ga sunder Option# 1 will be 1-1 /2 ç per mcf pIn s l' eirn- . bUrSenlE:nt to :Nlobil of necessary cOlnpressoT operating costs. Under this option} the purchaser must a1so n1ake 800 nlcf per day of gas available to Atlantic Richfield at 11. 8ç per me£. '. :.',- -.....---' --- -- - ---- . - -----_._-_._---~._-_._---_.__._----_._----~------------------,-,_._---- ~.~-_.- -.---------..-- ----- ----- -------.. ----..-. - , . .'..- .---- ,.. .~. ~·w ". , " - ~ - .I;rl Y '}. ~ lj I L ) ) 2. Stripped and dehydrated 'casing head gas delivered at about 500 psig to our shoresite locatcclin SecLion 28, TIIN, RI2"YV, S. M. on the "west side of the Cook Inlet. It should be understood that the ~tripping of th9 liquids £rorn the gas \vill reduce propor'tionately 'the vohune of gas depicted on the attached grapl¡. The price to a ..purchas'cr under this Option {f2 will be 15ç per rnc£ at the shoresitc if the total an10unt of excess gas is taken. The price fOi- less than the total quantity available will be required to be negotiated. . . . .. . . ' . . Since the gas here offered for sale is casing head 'gas, Mobil cannot avoid·certain interruptions in delivery as nl.ay be occasioned £1'0111. tirne ,to .t.iIne by the needs of oil production and mechanical equipnlent failure 'and repair. ' If you are interested or desirous of purchasing this gas £ron1 Mobil Oil . Coi'poration, please reply to the undersigned. " Your s ve'ry truly, " ... nffJ/ " v. B. Porter Joint Interest & Gas IJevc19plncnt Administrator _ ',Alaska Division' . .. "-.-- - ' I ,- . .. .~..... '\..I " /' ,- " '" ~.. - -. -. - ....- , ' \ . \ - -.. . ..- - ..- ~ . .- ... -_. -.-..--.--. . --_._, ---- ----.-. ---~_.__. .~.® /"' 14 RJ tJ . , \;.. q. r., 13 '.'. ¡~ 1.1 ...t . ¡;j 12 t:ì ~'.~ :'i ;,. .. 11 ~~j .. f' - d ::1 mv ~o ¡~ . I· f:}% ~·V ~: J . gn~· H ~ . t¡ .:5 . 8 ~~1.~' ......... ~) , d Dj r-t/;' . ..,.' 7 ....: :~ n . $: t:1~. , 6[.'· .~J. r.....! . . ? i1% :) n. . 37 5 !(.·í . ~ [:-I/;:. : A ti ~. <-;. r.L% ~ (~ ~ H / .;:) ~' j H 2 ,;¡ !t, - t¡ ì ~ ',~ .. :,t I h H ;"¡ o tl~-,--..I"~,!,,,"!IT~-· '"':' ';-'T'(':;¡'-"'~:2~'"'::i~J!;':'~'/.Y..:.!.~~~'~':.:i:f:.c;:·;t.t;~¥~~=t-:¿;:;!1J·j'''''''''''~~t.....L:.;.:~~·~~~'"'";.J!,;..;.r·~kc:'¿4~~~.,¡,;.;f:)~{;:..,~2·~f-~"'~~·-::;,'f.J.J'.~'::;.5·_..d·1:¿;·':~'?~L:...<:C.~Þ;"'--;:~'±'-" 71 72 73 74 75 76 77 78 79 80, 81 82' 83 34' 85· .86' 87 I YEAR '- ! I PL ATFOR fA & .. SHOR E S TE USE ~ .,. ////.. .. - / ,/ ' ,/Ä;SU;Ú7//-/ -' - LES :. GAS SA ;.. .... GAS ., .~ f ,\ .~ ~ ! MOBIL. OIL CORPORA GRANITE POINT F'EL·D t f t ¡ r-'\. f\~.' .. f ( , ~ ~ \ . 1 ~ 1 '-./ ~ ''J ~. .\, ...\\ '\ " I \ .' ) ') , ,/ ./",/'~' DISTRIBUTION LIST: ).,/ Mr. Einol' T.Meining - Port Nikiski, Alaska v Mr~ Jack Moore - Anchorage, Alasl<:a v M . R. W·. Arrnstrong, Tesoro Petroleunl Conlpany - Sail Antonio, Texas "./ Mr. Jalnes Hendershot, North Star Fuel - Anchorage, Alaska ",,- Mr. Dale Teel, .. \.-" - Mr. Bernard J. A.nchorage Natural G~s Corporation - Anchorage, Alaska Perry, So. California Edison Conlpany, Los ,Ang~les, Calif. V'. Mr. W. B. Wood, Pacific Lighting Service Conlpany - Los Angeles, Calif. I ¡;./ Mr. S. L. Lindsey, Petrolane Gas Services, Inc. - Anchorage, Alaska f.../ Mr. Ken l-linchey - Anchorage, A.laska J.,- Mr. Risher 1'hornton Aztec Gas l:>rocessing - Midland, Texas J.../ Mr. Michitata Ueno, Mitsui Toatsu I\:agaku - Tokyo, Japap.. .. --. i V Mr. Masalni Suzuki, SUlnitorno Shoji l~aisha - Osaka, Japan j../ Mr. Bill McBean, McBean and Associates - Calgary Cana·cIa 1/' Mr. D. B. Houge, Cleary PetroleUlYl Corpœ éltion - Oklahonl.a City, OJ.d.aholna l..-- Mr. Gerald Ganopole - Anchorage, Alaska c.--- Mr. R. W. Eakins, Rock Island Oil Cornpany - Anchorage, Alaska ~/,... Mr. Kirk Stanley Anchorage, Alaska l I El .Paso Natural Gas Cornpany -\,El Paso, Texas Mr. Bill Howard, Marathon Oil COlnpany - Anchorage, AJ,aska V 6/5'/-/ I ./)/i/VE - /JIve /10 Rr166 / ,4 ¿/J.:5):/J --------------~._------ -.-.----------------- __ _ ___ ______ ____ __ .__4__~____ _ ~ __ _._._ _.. __. _ __ - -~ ,.-..-. - ,--. -.. ,.--. .. -,.- . ,-."- ". ._-~". -....., ,-- -- . _.-. .-..- .....-. ---. .." -..- ~ CIV #12 ) ) t!¿,: --;Þ;;r / . ~étb..J . ?-:/ç-71 @J · .~-.". /-{w .//)Ç , /~/. . NATIVE VILLAGE OF T)'ONEJ(/ ALASI(}\ INCORPORATED TYONEK, ALASKA 99682 MANAGEMENT Or--f-ïCE:: 1615 "C" STREET - fWOM 246 ANCHORAGE, ALASKA 99501 . , . PRESIDENT SERAPHIM STEPHAN, Sn. COUNCIL. HARRY BARTCLS, SH. FFU?D BrSMAHI(, SR. LECON CHUlrr SAVA STEPHAN, JR. TERHY STEP'ljAN DAVID TniNTON '\ July 8, 1971 VICE PRESIDENT DANIEL. STANDIFER SEC:HETARY !THEASU RER ADAM KROTO '-, ATTORNEYS . MCCUTCHEON & GFWE:NING Mr. Vance B. Porter Mobile Oil Co. Joint Interest and Gas Development Administrator A1asJ;\:a Division . , .~' . T' '" ~~ ~..... ~""."i, '~ '. .: ,:'.\'..... Dear Mr. Porter, I have been unable to provide you with a definite y~~ or no resporise to your June 2, 1971 proposal to supply, gas. 'As you know, Tyonck is faced wi th a c1ifficul t problem to which there· äre' sevel'al alterriativc solutions, one of which is the purchase of the casinghead . \ \ gas from Mobil. However, election to use cas~~ghead. g~s) under your . . . June 2, 1971 proposal, would require Tyonek to purchase the specified quantity of gas ovcr five years, r~gardless of what is done with the powel' plant in the future. . . The Vill~ge is proceedi~g as rapidly as possible to review alternative solutions; until that is done, Tyonek is not In a position to indicate that it Hill take the specified amount of. gas, or to indicate that it definitely will not be interested in obtaini~g casi?ghead. g~s. .-.--.---. --".--' .~ .' Sincerely, '. ~ud_________._______frv':-----:t _e~~~~1#k___- -~~-B-:~-~-S d' - t~~r~i - ~!i{~~ (j) ~,-"- -....---...-....-.. #11 . ,//.. <,.,,:..: ././ '~~;:: :·~{:;:S~·. :_, ' . I' ...~ '..~;.\ ": ...,.,0' ;-:''' ; i' , .', .' \-¡... :,........... ..- ..' .~ ...~. ~ ~, . ~ " " ~ "~", I, .... .. :.... . ... .,,' .~:. ;..' :>·:~;./'k¥P , , . "'. ~.~. ,<. ~. ~" : . ) ~-~.yu ~~ L_ n::~ F> o .., t-E:' (:'.'\ ¡..1-~~ :'::;/"1& _____.._.._ - Ofr-íC;" L :=!L"=: coPy ~l-.~ '·.1~'_,__,_.__. \.... . ()) \:~ : ( '. . . - .' .... -'.' July 6 t 1971 . . 0'... _ " ". . ., ':. t,r ~ . ' ,. ,10 I .', , ' .''>. :.'-; ..... ., " .. '..... ......' '. 'II:" \ ·f·: :',' ....'.. ,\ , . rIve) íI c· '.- '}., "" -, 1~ .;, Co' C·"n.-71 ~),. J J,- _t.... J.fj,<:,. -''''ò .J., ,-,). ,l. , K"aloa BuD.ding , 16 ·f:') C St:tcct . A.ncl101>ë'1.gc l~.laska. Corporation, . . I'~:~'. .,'. 9950): .,- ¡... " " .' .. ." . , , ;- .. . Attçn.Hon: lvf.r~ Lynn F\. B ¡:'¡.XtlBtt Gencl'él1 ll:ZtDage::c l-Iati.v'e VîJ.J.age of TyolJok . . . , GerineDlc'il:' " ,~ ..,. ~. RClel'ønce i~) n.J.é2.de (:0 rny lettBJ:' to you of .)\111<: 2t 19'11 o:[fcI'ing to ·8e11 ctls5,ng heild gaB to the Nat1.\"c Village; of rfyon.ck.. rI'he equipn:'1ent "~'·lr1 J:-"JJr"lc: }'::-:>""1;-('(:'(' "'.'",", (11·(.-fr..'jo·r~-lf. 1" r. \,r1":' <:·'1¡··;....'·i7 J'tlr'Ì'lfl"C J!~c''''f~Dl(l C1. . J."..... ....tI".J ~ 1..:.",'-lt.......I.- " l c:...J........ t .~....,,~............ VJ.. t,.. .J... ;' \.-," t,.."\"'~.:',¡:oI,J'J ,.'_ ...-:":...... W'" .\,_ ~LJ. .¡".....t'.._ . ton1pany alono oiL if v/c supplY'..~)oth Y?\l and A.tJ.anHc. HichficJ.d~ "._. I - . Yo' "1"'\0" . f,> ~ I") r',.. l·O "'. C rìl~ r to 1"1 ,... 0 t.t ':> :to 11'"'' "·11') C',::.. ('11'~ <:<,' "\ (" ('\"11,-:, £01' '-' .J., '-..-.. \... ~.:.. l· . J- . _, ]I l J. "'.. J.~ J.. (", .. ..' (:',~....' .3. . c...· ..!. \.".... " J_ ~~ "... J.~ .,.. .! L ,.,. \..-... .. .obté'..i.n.iD.g funds and eq1...1ipInent dU7:'ing 19't'1 ve1'y tight if achicva't)lc ~t -:.>11 Yr)" Or CO''1'''''<:''~' '1}1r'~C'>~·'r,.t·""1~{] t1}').(· \;r·'" X-(;'1'='~' .-.r-f· y)1...,;.....,·,~~(~¡i::'\(·('>1-r ,..,. (.\ ..,.~ '\. ~!.. """'I ~I......J.. ".)\..:..., U ~.,:..t~,..J;.,.) l·ç,.~_~t .... .r..."l. ('~ _a\.__..~J e,... c~.,·· . ...:l).~J·..I..V .,~-(".....,,,,~..) t.o h3.VC a c:h.étr:J.c:e of. iIl~1 taIling cql.IJ.pr.o,(:nJ. thi f.) yeal~ t.· If YOli ha.ve ·not¡·cpli.8d to OUT of.fc:\: v1Ìthin 24 hOU~t$ aftcl' récüipt of this lcHeJ.',. \vt'>.\vill aS8U1:n.c. tha.t you ha\re c1eclb1ecl Oì..ll' offer and \Vc \vill 'p:r:ocecd \vi th .'the l1Gees S2.TY \VO rkQ ,- . , . ,Y 01..11' ð vc:cy tl'uly, .' \ Ol:iginal Sjgncc1 By \ I ., V. n. POHTEH. t .', v. B. 'POJ~t(~l' Joint Intc1..c::~t ê~D,d G,~~s D 8VB 1. 0 D:cn, (:~i-l t A. c1 Illlni s tl' a to r A.l<:!.5 ]\:2, ~ l)i -\lÎ s ion: -. . , ~ ........... VHP!skJ1. . ;...-'~..~ ;.... -.... .....:: . . . . bee: E. F. Griffin - Union Oil Company , __ R'" IJel'atrovich - Bureau of Indian A.ffairs R" A. Srni th USGS . , . ' - . . . ....~.. ())... . '.. .~ . ~ - ~ .--. -- - . -. -~ -... .. - .. --.. ... -- - --. -. - -.-...-~.-. .·...r '. '\, , . - #10 · I~ ~ ~ ; ,t,..' .1 I ' ( ,\ ,\~. ~", DIR q.; ~ ,. ~.,' I C f';F.OI. i~: / \ l· (. ?" \ (, ~ . _ c' rNG t__' \(" , (~ I J fNG " \C.. I ( !'''' .' (\ I \ . -, 2 E NG I' (' Amoco Production Comp81V I 3 ENG /I;!; I ) po \ ", ,- I Serurlty !.de Budding f 4 tNG " Dp.l1ver. Cf)lnr~do 80/0:? . . r ,S F~IG - . --r ï GEOl I~- -T-:}' GEOC I ¡- '---T --3 GEOl 'I'-~ i June 15, 1971 I Rf\i~1 I DRAFT- File: AMR-1034-986. 511 I sEë~- COÑfÊR: Re: Supplemental Informatio:"\-FïLE~-- for Record of MGS and Granite Point Hearings May 25 and 26, 1971 , _"~~"- ~ po-.;. ~~o'é'Ò) ..........---~ , Mr. Horner L. Burrell, Chairman Alaska Oil and Gas Conservation Committee Division of Oil and Gas 3001 Porcupine Drive Anchorage, Alaska 99504 Dear MrÐ Burrell: Amoco asked for and was given permission to supplement the record in the hearing held May 25, with respect to the Middle Ground Shoal Field and the hearing held-May 26, on the Granite Point Field, and to amplify our answers to Mr. Marshall's questions directed toward establishing whether or not there were any known dry gas reserves which could be developed from any of the platforms operated by Amoco in these two fields. As we understand the purpose of Mr. Marshall's questions, he desires evidence in the record upon which the Committee could base a finding that dry gas reserves are available which could be used to supplement or "back-up" the casinghead gas reserves and solve the problem of interruptibility presented by the casinghead gas supply. Neither actual tests nor inference from log analyses indicates the presence of any dry gas reserves at or in the immediate vicinity of the two platforms operated by Amoco in the Granite Point Field or the Dillon Platform, in the southernmost end of Middle Ground Shoal Field. Baker Platform, the northernmost platform in the Middle Ground Shoal Field,is located upon Lease ADL 17595. The Department of Natural Resources, in its capacity as lessor, has already determined that gas in commercial quantities has been dis- covered under this lease" This determination has been af,firmed by the Supreme Court of Alaska. ¡~frfjVF[) JUM 1 g 1971 X -t. It "" J ~ DiVll:ilON OF OIL AND GAS ANc;HORAQ/S /~ 7- ...,,;,',;," ";:' \""'11""'" """_,"".~ \,~,,,\., ". ",~".-t, .., . , .. ~ ....,.,,,; ~:}. ·'~··"'r!'-~"', ." .'-.,~ ' " ".' "'. ..:. .'·"r,,:,,"I"":"'>II"'~,,"., ':. ';",,,,,,,,.,,,,,,,,,,~,~,,,.p, ",';,~ ¡'~'''''\~'. ,. e""': ..,,~.,..~~\,_.1. ,. ,., .' ,,11,- "'''',·'Ch' ., ""'''''~'\t.''''"'''''''\.¡'IIjI"~·.'I·.'~''''''I'I',.....,,,,.~.,"r','.' '"I,;'''"''' ',~"I'~~,,,.,Y,~\"". ,0.,,_ '" ","'LI',' "'I.;\"I."~''''I'''''·\".'¡''''''' ""." "''I''''''',' "'''1,,,,~,'. .."."" ",~ ·'~'1,'11"\''''~,''''''''''.''''.._'''''''''''''' ' ",4 ':"" ",:w,~"'J _\, '." ,,~,,~;".. ,.._...",À" 1 .,.", '~;.;. I I' \ Mro Homer L. Burrell June 15, 1971 Page 2 There are two basic reasons why this dry gas reserve should not be used as a source qf "back-up" gas. The first is that we feel we have a better use for this gas as future platform fuel. The second is that these offshore dry gas reserves are subject to much of the same interruptibility problems as is the casinghead gas. Fuel will be needed for lease operations in the near future, and these reserves are considered to offer a reliable econom- ical and efficient means of supplying such fuel. If these reserves can be used for lease fuel, the economic life of the oil producing operation may be substantially extended and the ultimate recovery of oil materially increased. While the problem of interruptibility is a serious one, and one which materially reduces the value of the casinghead gas, it is a problem which we can better solve by the use of on- shore dry gas reserves. The one problem for which we as yet have no solution is that presented by the difference between the highest price we can hope to receive for this casinghead gas and the cost we must incur to make this gas available to any potential purchaser. If we could dehydrate the casinghead gas, extract the liquid hydrocarbons from it and sell them, and transport the residue to market at a price which was competitive with the price of already available dry gas and would allow us to "break even" on the total operation, the problem of interruptibility and any ot,her problems could be solved without any need for development of any additional offshore dry gas reserves. All of our studies and discussions of the various possibilities for securing a market for the casinghead gas have taken into account the fact that these onshore dry gas reserves are avail- able. Since they are, and they are entirely adequate to provide the necessary "back-up" gas, we feel the question of whether there are or might be additional dry gas reserves, either on- shore or offshore, which also might be developed is academic in these hearings. Development of additional dry gas producing capacity will not help solve any of the problems of marketing casinghead gas presently being flared. In fact, by increasing the available supply of dry gas at a time when there is already a more than adequate supply available, such development would be more likely to compound the problems and make residue 9as derived from casinghead gas even less competitive than it now is. cc: H. W. F. L. H. A. Yours. Verrr,11Y, ~3 ) ..,U. j 7 ¡: r . . , 1, ' ". f'VrO Patterson - Ph1-1 J.ps - Denver ".~ ,; ~~:~~ : i~~;~~i~ ~~~~~reld - Anchorage ,)UN 18 1971 DIVISION OF OIL AND GA '2. r/ L A.NCHOR.AGP\ S '-'''' "'~H,,,,,,,", ,.,.",. ,'",,,., """',,.....~ ~.,.,"" "., ".""".",..."""......."'I."..""..".."'"'~,,,,._,, ...... ..."....,t.J. , "., ..",.iI,..","!",...,,,,,,,,,,..,,,.. ".....,1."...." ....,..",.,.. \ .."_" .. ^' . ( 4 ( CI-IEWICAL &. GEOLOO¡CIlL L-'\DORATOlUES c 2603 ARCTIC BOULEVARD ANCHORAGE, ALASKA 99503 GAS ANALYSIS REPORT ~ Company-.-1l~~i!_ º.~!_ ~<?_~2_<?E.~~iOI~___ _Date February 13, 1971 lab. No. A-822-2 'Nell No.__Gl~~1)i:t~_I:oJn~___~_tª:tfo:rrn location_ Cooper compressor Field___g_~1ºi teJ.2J..!1~_ __Formation_ County__ Depth State__.Al.~~1c3 _Sampling point Second interstagc-Aftcr dchydratol-;- line pressure__-=-_psig; Sample pressure_360 psig; Temperature_~O F; Container number 16 Remarks SaI!ill.le taken :Eebruary 11. 1971 by Mr. CarlO.!.... Paw1isch. Component Mole % or Volume % Oxygen ........,........................ ........................ Nitrogen ..."...... .... ................................ ........................ Car bo n d i 0 x ide . .. ,.................................................... ... .. . .. .. .. . . . . .. . .- Hydrogen sulfide....,............... ........ ........................ ........ ................ o 1.86 0.16 . .,. .............................................................. Methane ' .. ....... .... ...................................................... 76.47 Ethane : 8.82 Propane. '. . ..........'.... ..,................................................................................~......~ ~ ~:: ~ ~:: :~: ::::: ~:::::: :-;¡:8~· Iso.butane ..,......,......................... ........... ................ ........ ........ ........ 1.49 N.butane ., .'.' '.... ....................,....................................................' 2.30 I so· pe n t a ne " ,..,..................................................... ......................... 0 · 41 N-pentane. .,........,... ..................................................................... 0.37 Hexanes ,.......... .................................... ........................_ 0.20 He.12tal1es & highc~..................................,...... ........................ 0,05 ........................ -. .................... ........................ Total...... ........................ 100.00 GPM of pentanes & higher fraction. ,..................., ........ ,.............. Gallons per MCF 2.159 ~~tL o. 7~"~_ 0,150 0.134 0.082 0.023 3,757 0.389 Gross btuicu. ft. @60° F. & 14.7 psia (dry basis) . ....................., Specific gravity (calculated from analysis).............. ........................ Specific gravity (measured).. .. "'.'. .,............................................... 1295 -õ7ï5g- 0.761 Remarks:__ ACCEPTED Date ' ( /rg /1 J , \ ALASKA Oi.L and GAS CONSEHVAT10N COMMIT~rfE (J +- (t.1.. .Ç1L It' V t t. cr ~ct.t . :4'" EXHIBIT - - I ~ \ ¡ ¡ \ i ,... r,Cl\ f;' ~'\ Iv·\'", -'- '...... -....-...' ........,\..~,-...,..-¡"._,þo.,. 'Ii =..~___ \ r \1 ._.._". ._.__._..._.__._~.."""7:;::::::.-::::.;::-:..::J e ¡"j 'i-:' tC fl, 113 I('dV¡:~;¡(')\\¡ or: 0[1, A)'m GA.:") . , ' ·.AHCJi(JRAG~ i . '-{ ~! ~, #9 ¡ o/ .". ,," .... . ". . .".-.-." ...~--_. .') ~~ & C~ I .: F ~~]~ _~ffi~ , . . --------..'.-.- "..- -. :....".':._.'-~-' .- ¡ ." WILLIAM A. EGAN, GOYf.?.'iOl 3001 PORCUNNE DRIVE - ANCIlORAGE 9950<1 !- ;.., r-r;,.\' I r·-" ì..· . f~J:.. ·........1..:..1 Y J:....J Jl):\) -;} f~~~' I . h ([~ ¡.tUì~ . ", t.) .a. '. T· ~ r......' ,., ,....'~-·7)·~ 1"'¡-}',)1c .J'_':"'J.,¡.~ . -:_J.. L. -. f¡J> Æ fin i~ TlE.']fRii IE N'Jf ® IF' N i\\'Jr OJ TIE.A\. JI..· Ii~ U~ § QJ) liJ [¡ G (8 i1~ § . June /1 t 1971 . ., \ \ \ DIVISIOU OF OIL MID GAS ,;:,:. : -,~,;CcEPttr1:'~1~11l ~i . f¡J~,::~,(), /Ö L ...' .... : 'oa~e~ ,. ~ / . ". 'þ- OILO\'ld GÞ-;1EE.l \ .., ~l.~~~\ O~· ~~~c-~'.v . \ CONSE~~ ~v ~ . - ~ ~~.~.4,yt A. E.)l.\-\\~\1' ~ .~ ~ '~l~ . '. - f\LE, -,-;:;:-~'..,-- . In response to a request l)f,·5>rr. Tri -r1íc Oil and Gäs Conse.rvation Comm.ittee II,carinE on Case 10~', ~. ."~ a hurried check of :i.nfor¡~~ation on visitors \-]ho have indicated an inter.es t in gas in t.he Cook Inlet arc [I. .. '."'" . . ..... 1. 2. " ',3. 4. 5. . 6. 7. . . 8. 9. 10. 11. 12. _ .. 13. .: ,14. 15. - . . . -.....--. -.. -.--.-. - ....,.... ,··-~·16" '17. ~~~..':::. .. . . . Re: Oil and Gas Conservation Committee Cases 102 and 105 - ~ 1-h:. P. J" 'l'rimble ~ Hobil Oil Cor~oration 'Pouch 7-003 Jillchorage) Alaska 99501 '~- ,. , . · J.Ir. Os car E. Sv] êll1 . Amoco Production Company Security Life Building Denver) Colorado, 80202 :. Gen t 1cmcH : . . I Our files indicate that in many cases more than one individual ,·lÎth a company has contacted Olll·· office regarding a. gas availability project or ë:malYfiis and \'le have attempted to consolidate these. The files shm·, that; at ·least 37 different people have been in our office on these matters. Due to incomplE?:te records vle are unable to give a comprehensive listing iil the' time \'le have available. .' . - - N a'me Location Einor T. Heining Jack Hoare Robert H. Armstrong 'James Hendershot Dale 'fecI Bernard J. Perry~ \-7. B. "lood & John S. L. Lindsey Ken Hinchey nobert Sharpe Rishe,r. Thornton Hichitata Ueno* Nasmni Suzukii~ Hill HcBean Donald B. .Houge & James Caylor Gish & Dane Jerry Ganapole Port Nikiski, Alaska 1 Ancho~a8e, Alaska San A~tonio, Texas Anchorage, Alaska Anchorage, Alasl;-.a 1.0$ Angeles, Calif Bergquist Los Angeles, Calif~ .Anchorage, Alaska AÎchorage, Alaska Anchorage, Alaska NidlD.nd, Texas Tokyo, Japan . .Tokyo, Japan Calgar.y, Canada ..... .'. Oklahoma City, Okla.. Anchorage, Alaska 'Ancho~age, Alaska . +tt.',~ ' 2.0 . (/íFI). fompany Self Self Tesoro Petroleum Co. North Star }'uel Anchorage Natural Gas Co. So. Calif. Edison Co. Pacific Li~lting Service Co. Petrolane Gas Services, Inc. Self City of Anchora£c Aztec Gas Processing .Toyo Koatsu Industries, Inc. Sumi tomo Shoj i Kaisha McBean and Assoc. Cle~ry Petroleum Self Ûnidentifi~d. cljp~ts Mr. ? ..L ,Mr. Oscar -... .. ... L. =!.~:..~ ) -2- ) Jt.I!:l~ ~4, 19ì1. c..' Sr..¡.::.n J Name I.ocatlon -------- ComI~:2.l. " Rock I~)lancJ Oil Co. Unidentifie.d clients -Ii . Uüno '~ril\'c1 BU~\.1kl l\1:e be~,i~ved to ùc. port of a group of: lOot" so compnrd.et; \lho ,·¡cre "lOrking on .a methanol pruject to use Cook Inlet gas. CD 'I'he folloHinp. represcnt[ltives discussed gas availability but our records ¿tr0 not complete enough to determine. if they "lere interested in buying, clc\'clopint, ~. selling Ol~ just studying. / ,/. Alaskan Pet r'~lcum ncvclop. Co. Ltd. 'I'ré.lnS\·lcs tern Çonsolidated Pipeline Co. El Paso Natural Gas Co. ,.. _.... , , , " , . . . .. -. . .. --"'-- _._-~--- . . ---- ------ ------ - -..--- ...----.-- - ..----- ---- ------- -. . .- -...- -.. -- -------. .... :_----- ----- ., 18. HOtlgc l' '·lill:i.mns &. R. \oJ. Elld.ns \-lic1d.t a & ^n~horagc 19. Kirk Stanley . Anchoraßc, Alaska ,. 1. ..1tU1 j: chi Tsuhoi "2. l.e\,¡ i s ~~ogers Houston, Texas 3. Albert T. C. Rutr,ers Cålr;al'Y .11. R. s. Lemon 'El I' as 0, Texas V J " cry t r u _ y yçnl r S t ,........',.... ;......'.'...~..:'~~..;~'"...,...:.~'.. "/¡ p/ a ~ /.1 --,"t!-(~-,<"',\--" O;~!i ?ïi}~::< ". {.c~ It: /)(.// L'Þ 1 ')' ~-:/ L,. 7:;/"- i' " \ ..: -.. ,:,.., . : '., ;',. .( "" .:' I "'" . (. \,.. ~.I... .-~. ,,'r ·v· k< ~:",\\~.,:::,'<::~~:; ,,~"'\~':.-':.,:~::~:::-~::~::::~::~:j .t'''':\ O. K. GJ.lbrcth, Jr. . . \,.··.r ..~~....'\ .\.....-;- '\ II',' /"" "~... -" ~) .'-'. . .. ., ..' '" ,'" ...~...:"', ....,:"' \ t, " I / . ",... ~:: ..: :ç /' '\ '\ CI1J.c[ Petrolcum hngJ.11c.cr "', ' . '. // .,- \>";¡j"'/,"". ¡: ,. ....~... ... . l" .... ~. ,1."'- -... ..t." ",.... ... ""\. '" ~:~ ~..._",'\\ ~ )"'\~" ';' / .......< ,.....:."'...r' \.".T.. '.\.. to"'" '", '1;'-\,.;00,1 '\ ·l':i::(:;i~213~X~:7.~~~ :~:~~~~:~~~:,: .>'--' ~·:~~S:~·:~;:;.:\ 1.....y/:. ),... .,,1' -........ ,....,.t...... ~, ,..- ........\.. . ./#..., JI"" ,""""'.... ...--..'\ ," ~ J \ ( :~-~'i f~~:SJ~~;t~;: ~i~~"~.~~~_:. -., -.' :-:~::::~~1j!.{~;r- - .) . \ \'" ... 1"" ., .... ,.' -. ~,' . . ".. , . 1 1 \' ~~~)A':;;V:::("~)},·~ ..t': ;i:,,':,5;'Ð,r~<-~1 . J .- ::FL \>··'/~'··~,·:~~~·:·"·(::,~~,·~::~r<:!.: -~~~: /~.:.~<:.~.,(~).;~~::.~~~.~:/ (/~) ,J \ .. \' "'" -'. i. .,. .,.-:~' ~".,:;","....é..,...~ (r.f I ~- . '. ..'!.... --. ._. _' _.' __ '_M·. ..__,_ " " ,.. _M __...... _.._ '."_' #8 ) ') Mobil Oil Corporation POST OFFICE POUCH 7-003 ANCHORAGE, ALASKA 99501 June 3, 1971 . Mr. Lynn P. Bartlett Tyonek Management Corporation Kaloa Building Anchorage, Alaska RECEIVED i r " ,j U ¡J'~ 19 .J (J 71 N..:tive V;iJ. ANCí~S~~~ TyoI1ek Dear Mr. Bartlett: In response to your request for a gas analysis report of the stripped and dehydrated casing head gas at Granite Point, I have attached such report. It should be recognized that this analysis will vary from time to time depending mainly upon ambient temperatures on the platform. Yours very truly, .," /;) /? I j/ b j(:vµr V. B. Porter Joint Interest and Gas Developments Administrator VBP/ms Attachmen t ACCEPiED (..1... h / Da,e~ \L cod G~S E Þ.L~S~A ON co~\,Tf~ tOV CONSER'f~ \~ 5r' v * t.. \ 'ð. C ~ .t VI £. ~ \.\\,ð f\ =-------- \\ _______ ~ I 0 " \;, -~. ~ ('j or"''.: ~.:~' ¡,~¡r~~ :~: r, 1 r r~ t./ ~ ': ; 1. ~~: ~): '\1 ¡ ~~ I ':) }"\.: '~J : ~.~~ r r. .'t\ >~D t'~ I~ \~ Al"'¡CI-IORAGn ' ~ 1 ~ ,,-( #7 ') ) I' / .I Mobil Oil Corporation POST OFFICE POUCH 7-003 ANCHORAGE, ALASKA 99501 June 2, 1971 I DIR lif- ' I C.-·GEot-.r~ l -i-t, ENG ..Iaft~l ¡"'j ENG IW, .-1--'2 ENG······I~ -, --r.-·--3· E'NG. "Til.. /, fj\ ---T-4 fNG \ir . '·'r··s ENG!---- ·--T 1 GEOL \ K' ... -"1" 2, GFOL I L . -r3_.GEOL-·!~_ '--1 REV ¡=!- \ DK'AFT \ -T-?~c -.-'-1--- ·CÖ-NFER: '-"FTLE: (0, JO:¡:- . Tyonek Management Corporation Kaloa Building 1675 C Street Anchorage, Alaska 99501 Attention: Mr. Lynn P. Bartlett General 1vlanager Native Village of Tyonek Gentlen1en: Mobil Oil Corporation, on its own behalf, offers to sell casinghead gas as may be available from the Mobil- Union Granite Point platform to the Native Village of Tyonek under one of the three options herein set out. 1. Raw and untreated cR$in.ghead gÇts. at 20 psi Qr,l~ss for a price of 6. 2¢ per mcf delivered at the shoresite. 2. Stripped and dehydrated casinghead gas at 500 psi for a price of 37. 2¢ per mcf delivered at the shoresite with a take or pay provision covering 1000 mcf per day. 3. Stripped and dehyàrated casinghead gas at a pressure· suitable to operate your turbine for a price of 60¢ per mcf delivered at your turbine with a take or pay provision covering 1000 mcf per day. These options state intent and further terms of a contract would have to be negotiated. The service will be interruptable and the needs of Atlantic-Richfield Company with \vhorn we have a current gas supply agreen1ent will take precedence. Our current forecast indicates that the gas in quantities suitable to your needs rnay be available only through about 1976, but we cannot guarantee any tern1 of contract. ACCEPTED " If , o ~.,I~.,....- , I I! I JI ~ I !, ! ¡ - IÌ ;/ C.O. FILE lh-,,·,,~,·w,:: , Date c,( Ift/1/ !I ¡ ALASK;~ Oil and GAS 1 CONSEfiVATION C'~'·' n,'!TTF'¡:: If (>- C (: .( I 'kJ. ~ ~ft~lf! wc:l j; '* .,1 - EXHI8:T --_._~..~..__ I: ~ "\ ¡~ ~:~l. q .k~" "'_ :j -,,'" '''..,::-::~.~-",,~:':... "'''.._." .... ,.... .:..::Jr+e 1-11 I S P r''' 11''' r- ¡:, ,j r "\ C:, iC:: V h'" n o , n ¡f\~ -JL~. g ~.', ...' . " '.. DIVISION OF CJIl AND GAS ANCHORAGi1 I v-/ <j Tyonek Management Corporation ') - 2 - ) June 2, 1971 j , Under Option 1, service can COHlmence imlnediate1y. It is e~timated that service under Option 2 or 3 can COI11lnence on or before January 1, 1972. We ask that you reply to this offer on or before June 14,1971. An affirmative reply frOlTI you on Option 2 or 3 by this date should allow sufficient HIne to obtain the funds, equipment and supplies required in time to l11ake the service available as stated. Should you require more time, please inform me of the minÌInumtime within which you can arrive at a firm decision. Yours very truly, ¡/g¡;~ V. B. Porter Joint Interest and Gas Development Adlninistrator Alaska Division VBP/skn o f', ~,;.,~ (~ !,c.: :'.1~: '..~", l. \/ r- f' tJ , .;, JiJ\:-í.la !)!VIH0N or (]!L l\HD GAS - At'<!cr'¡ORAGr! L c.-1 ~I #6 ,~ ) Mobil Oil Corporation ) POST OFFICE POUCH 7-003 ANCHORAGE, ALASKA 99501 ALASKA E ac P DIVISION I DìR /"1' P. JOSEPH TRIMBLE _L~: -:GEOl ~ /' Genere' Attorney I C. ENG 1- :.. o ç.¡ /( ~ (Ç r '1, ._ . '--~~~N~_- _ \-ZGI~1'~r~ S r '}~¡'l'\ I i fB----.E.NG-- .t(') , -'-'--, ~_ ENG IMM : . 1~~{~:; ,_~CCEPTED '. , I 4 fJ\JG- ""la' .; ~ht' -". Date",,, ~~ ~ J I I 5. ENG r'- ,..-#r-'-- '. ", ..... '¡ I 1 GEOLli"' Mr. Thomas R. Marshall, Jr. , :-',.. ALASf<A OIL and GAS . ~2-·GEOl·'1 ¿.- Executive Secretary ~ CONSERVATiON, COMM'T1JE .J;--à' GEOl'1¡;) Alaska Oil and Gas Conservation Committee ,:,:' 4tC..f'..f J .r",. +. "~'O II · .! i I REV-'~" 3001 Porcupine Drive a , _ - _ ,- Y' f £XHlar. ' L; I DRÄï:r-/- Anchorage, Alaska 99504 */02- . ;J__.L_..,'~~~-· L_ C.O. FILE .'~: CONFER: , ., ~ £;¿ ^.--., Dear Mr. Marshall: I,_-¡;::-'-:'~ ~-,,,,,. -- - . -.' ,.,;:"jfILEIC.O./ðz..,., RE: GRANITE POINT FIELD MIDDLE KENAI OIL POOL; CONSERVATION FILE NO. 102 In further response to your question of whether we feel these hearings are conducive to stimulating gas marketing opportunities, we enclose a proposal sub- mitted to us by Rock Island Oil Company on May 27, 1971. Rock Island proposes essentially to act as a middleman between Mobil and its existing markets or prospective markets. This proposal would require that Mobil buy back gas at a price of 25 cents per MCF that it is presently using free of cost for operations at its shore facility. Additionally, the value of this gas for royalty purposes would be established at 2 cents per MCF. It is conditioned upon Atlantic-Richfield canceling its contract with Mobil to purchase gas at comparable pressure for 15 cents and purchase it from Rock Island Oil Company for 40 cents per MCF. Since Atlantic-Richfield would be taking this gas at the Granite Point shore facility through its company-owned line, there is no transportation cost included in the 40-cent price required for sale to Atlantic-Richfield. Delivery of gas to the Tyoneks would, however, require additional transportation cost to Rock Island; and, therefore, it is assumed that the MCF price to the Tyoneks would necessarily be considerably higher. As is obvious from this proposal, no market additional to those already in existance has been created by this proposal. And, further, it is difficult for Mobil to believe that Atlantic-Richfield would cancel its eXisting contract to purchase gas at a maximum of 15 cents in order to buy this ga s from Rock Island at 40 cents, since the point of delivery, pressure, and quality of the gas to be delivered under its agree- ment with Mobil are comparable. It is also difficult to believe that the Tyoneks would purchase an interrupt- able short-term supply of gas at these prices when they can obtain the same gas from RECE'VFD JUN 2,,, '1971 rt~ ~'?' DIVISION Of Oil AND GAS ANCHORAGÐ I o-t 3> # ,"'" ) ) Mr. Thomas R. Marshall, Jr. Page 2 May 28, 197 1 Mobil at lesser prices or obtain a long-term uninterruptable supply of gas from the Beluga Gas Field at lesser prices. In answer to your question, this proposal by Rock Island speaks for itself. We respectfully request that this statement and the attachment be included in the record of this hearing. Yours very truly, )~."'-- ~ ~ ~ePh Trimble rz attachment RECflVfD JU N 2 "., '1971 DIVISION OF Oil AND GAS ANCHORACHì 1-a-f3 #5 ) . Ro~~t ~s~81nQ' ~D~ COU'ü<~~Jau"i~" =~ .:ì DIVISION OF .,Oct )NDUSTRIES'INC u;:oct·a . ," May 27, 1971 Mr. Vance Porter D1vls1.onManBger Mobi.l 01.1 Company- ~ew York Life Building , Anchorage, Alaska 99501 , Dear Hr. Porter: If ¡-¡obil can supply QS w5.th a. minimum of 2,350,000. cfd (onshore) and Atlantic' Richf'5,cld Company will let us use thei.r line for delivery, Rock Isla.nd is prepared to set up a plant at Granite Point, dehyd~ate, compress and strip liqui.ds and. deliver dry gas to the Tyonek gènerator and Atlanti.c Richfi.e1d Company at 275 PSI. . Rock Island 1.5 prepared to deliv~r thi;s g~s ,~ithin 3-L Illonths after Hobil gives us the go-ahefld. vJe a.re prepared to pay ~1obil 2¢/mcf and \-;1.11 take it at a mi.ninmm pressuro of 10 PSI. The li.qui.ds stri.pped out \-rill be given back , to Hobj,l (approximatel~" 20 bid) i~!1 ~ stab1.1ized state. Any liquid storage ,;ill be furnished by Mobil. . .. __ I I Mobil must let us set the plant on thei.r property. Also Rock Island \d.ll h~ve to rely on Hobll 01' the Tyoneks to provide a small amount of .e~ectricity to run our lights and instruments. 'He can provide Atlant:tc R5chfield 800,00J cfdat l¡O¢finCr, Nobtl 300~QOO crd at 2S¢ per mef and the Tyoneks 1,250,000 cfd. The Tyone~ price w'lllhave to'be negotiated. . I Sincerely, (I~/hJ. uL Regi.nald \'1. Elkins Alaska Di.V'i 81. on l-íanagel" \ II \'. l : , R..EC'E 1 V f.Q JU~ 2- 1971 ~ . DIVISION OF OIL AND GAS ANCHORAGD P. O. BOX 1228 D ANCHORAGE, ALASKA 99501 I] ·r. TELEPHONE: 907-279-9913 ..-.. -.. ....: ...: ::'. .. ...-...:. . ........ ...~... .~ .~..:...~_.~ ..... .:-~_.~._... ~.~.:~ 5'''-; ;-:- ,r: . . --.,...-.,.. ,'.-...... ..-.""'...... ~-...... .......- .-......" . ' . . . ø., #4 f j-fJ( /,Ji.._ (~...tlc I J a 5~/J G.¡/,f. O. o· ,.J. U ~·1 · '\ ðJ;,."> ,.¡I,I......"'~ STAT! OF ALASKA DEPARTMENT OF r',$,ô11JRAl RF.<';OURCEi DIVIS'ON Of:~i~ A!'H,) GAS 3001 Porcupine Drive ~ ~.r.., Aj.'" MM May 26, 1971 T~~s(" ~', ó' t HEARING CONSERVATION FILE NO. 102 OFF ICE F I L E '" ~., 4", '/ _" ..._.._.-',..... ), ), May 26, 1971 H EAR I N G CONSERVATION ORDER NO. 102 Granite Point Field Middle Kenai Oil Pool STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS Alaska Oil and Gas Conservation Committee -2- 1971. Gas Conservation Committee. Published in the Anchorage Daily News on April 24, Signed by Thomas R. Marshall, Jr., Executive Secretary of the Alaska Oil and 3. Will more waste be caused than prevented by an order restricting production of oil to a rate whereby all produced casinghead gas is beneficially utilized or is required for a safety flare? 2. Will the flaring or venting of casinghead gas after June 30, 1972 in excess of the amount required for safety constitute waste, as "waste" is defined in AS 31.05.l70(11)? 1. Can excess casinghead gas be marketed, injected into any reservoir or pool, or otherwise beneficially utilized by July 1, 1972? Evidence will be sought as to, but not limited to, the following: heard. operators of the referenced pool and affected and interested parties will be Loussac Library, 5th Avenue and F Street, Anchorage, Alaska, at which time after as the hearing may be continuêd, in City Council Chambers of the Z. J. The hearing will be held at 9:00 A. M., May 26, 1971 and so long there- for safety. venting of casinghead gas from the referenced oil pools to the amount required of an order or orders, effective July 1, 1972 restricting the flaring or to Title 11, Alaska Administrative Code, Section 2009, to consider issuance The Alaska Oil and Gas Conservation Committee will hold a hearing pursuant Granite Point Field, Middle Kenai Oil Pool. tion Committee to read the Notiee of Hearing, Conservation file No. 102, This is a meeting of the Alaska -- hearing of the Alaska Oil and Gas Conserva- MR. BURRELL: Good morning, ladies and gentlemen. I'm Homer Burr~ll. PRO C E E DIN G S ,P To my left is Mr. Thomas Marshall, Jr., who is Executive Secretary and Chief Petroleum Geologist; to his left, going around the table in that direc- tion, is Mr. Gilbreth, who is a member of the Oil and Gas Conservation Committee and Chief Petroleum Engineer; to his left Lonnie C. Smith, Petroleum Engineer; to his left John Levorsen, Petroleum Geologist; Gar Pessel, Geologist; John Miller, Petroleum Engineer; Karl VonderAhe, Petroleum Engineer; and Harry Kugler, Petroleum Geologist. To my right Bob Hartig and John Norman of the Attorney General's Office. There were several items read into the record yesterday which, if without objection, I will ask that they be incorporated into the record. They are statements from the Honorable Hollis M. Dole, Assistant Secretary of the Interior, various statements in articles from the Oil Daily, local papers and other publications with respect to the shortage of gas in the south 48. If anybody objects, I will read them in again, otherwise we will consider them incorporated into the record. Are there any objections~ If anyone missed them and wants to hear them, I would be happy to stand here and read them. Without any objection they shall be incorporated into the record. We have several people under subpoena as of yesterday, and they have been excused until further recall. Their remarks, in most cases, were requested to be incorporated in the record for today. These remarks were those of Robert E. Sharp, City Manager of the City of Anchorage, Bill Schoephoester, representing Chugach Electric Association; Reggie Elkins, representing Rock Island Oil Company; Lynn Bartlett, representin~ the Native Village of Tyonek; and I believe that these were the only remarks that we would request to have incorporated into the records at this time. Any objections to these remarks being incorporated into the record? If there is -3- any objection to these remarks being incorporated into the record, we would be happy to go to a phone and get these people back because they are subject to recall. Would anybody like to have them back to hear their remarks or for cross-examination? I'll hold you open on this if you want to request it at a later date. Yes, sir? JOE TRIMBLE: I request that the statement of Dale Teel be incorporated into the record, also. MR. BURRELL: There is no objection to the statement of Dale Teel being incorporated into the record. In fact, the Chair may by its own motion question Mr. Teel again. At this time I believe the Division of Oil and Gas -- I should say the Alaska Oil and Gas Conservation Committee -- has an exhibit of its own, or rather three exhibits. If I could have Mr. John Miller explain and he will introduce the Committee Exhibits 1 and 2. MR. MILLER: This is a tabulation of the accumulated oil and gas production for the Granite Point Field, Middle Kenai Oil Pool since the beginning of production in April of '67 through March '71. I will read off the figures for those in the back who can't read them because of the small print. The cumulative oil production 38,359,000 bbls, and the estimated value of this oil production, and this is based on the royalty oil payments to the State, what the operators have paid the State for our royalty oil and we took that value and multiplied it times the cumulative production, $114,206,000.00. The cumulative produced gas is 35,520,275 MCF. That is broken down as reported to us by the operators as utilized and flared. 8.9 percent of the produced gas or 3,151,142 MCF was utilized in various ways by the operators and the balance, 32,369,133 MCF, or 91.1 percent was flared. This is a chart based -4- -5- on heat content of the gas from the Granite Point Oil Field. We realize there is no market for the gas at this point and for comparison of a gas flared we compared it with, on a heating value basis, with heating 011, which is so nearby and would be in competition with the gas. And on this basis we have come up with the values -- dollar values and on a direct BTU basis we have come up with the equivalent heating value. The heating value of gas in BTU's per cubic foot for separator gas at Granite Point is 1,389, the heating value of a barrel of oil in BTU's per barrel is 5,752,549 BTU's per barrel. The volume of gas in cubic feet, equivalent to one barrel of crude oil on a straight BTU basis is 4,149 cubic feet. Based on March production, we'll call it, gas flared was 14,684 MCF per day. The heating value of this then would be 20.396 billion BTU's per day. The oil BTU equivalent to this gas is 3,539 barrels per day. Now here again, we have equated this to the average price of oil, this is the field crude oil posting (current), and I realize that you all have different figures for your values, but we are plotting this to competitive commodity which is being sold nearby. The dollar value of the gas flared then in dollars per day (currently) is $11,519. Future estimated total gas to be flared in MMCF and in MM cubic feet is 34,550 and this was an estimate taken from curves submitted by the operators at the Juneau hearing. The oil BTU equivalent to all this future gas that is predicted to be flared, is 8,327,308 barrels and the equivalent dollar value is $27,105,388. This is the same curve that we submitted as an exhibit yesterday. It's the Alaska Pipeline Company sales and forecast of sales up to the year 1990. This point is 65 billion cubic feet per year out here at 1990. -6- MR. BURRELL: Without objection, the exhibits will be entered into the record as Exhibits 1, 2, and the last one number 3. Are there any objections? MR. SWAN: There are no objections. Excuse me, Oscar Swan, Amoco Production Company. We do not have any objections to these exhibits, but I would like to ask some questions, if I might. MR. BURRELL: Mr. Miller is available for questioning. I'm sorry ---- yesterday I forgot to mention it. MR. SWAN: Yesterday I had -- I would have ---- Mr. Miller, in referring to -- I guess this is the Committee's Exhibit No.2, second page -- you show a value there of 27 million dollars, roughly for the dollar value of the amount of the heating oil that it would take to produce the same results as flaring this gas. MR. MII.LER.: In BTU' s, right. MR. SWAN: And this ls, in effect, the dollar value of the gas at the point at which it is consumed. MR. MILLER: Righ t . MR. BURRELL: Any further questions, Mr. Swan? MR. SWAN: No, sir. MR. BURRELL: Does anybody else have any question of Mr. Miller? We had, as I stated previously, several peoµle under subpoena here yesterday and their remarks have been entered into the record, in most cases, previously. We have Mr. Teel, who will be here at 10:00 o'clock, for further questioning. Are there any of the people who were subpoenaed who would like to make a statement at this time, in addition to the remarks that have been previously entered into the record? In that case, who else would like to make a statement -- any of the operators have anything they would like to say about this? .~ ,I -7- MR. SWAN: Mr. ---- MR. CREWS: Mr. Chairman, my name is Ralph Crews and I would like to enter my appearance on behalf of Amoco. Along with Mr. Swan, I would like to ask the Chairman if I might be excused at approximately 10:00 o'clock to make a report to the State Bar Convention which is being held ---- MR. BURRELL: Your request has been noted and accepted. MR. CREWS: Thank you. MR. SWAN: Mr. Chairman, Oscar Swan, appearing on behalf of Amoco Production Company and other companies in the Chakachatna group who operate the two northernmost platforms in the Granite Point Field. At this time I would like to move that the Committee incorporate into the record the testimony of the hearing yesterday. That evidence, particularly with respect to the marketing problem, all presumed that we were going to market the Middle Ground Shoal Gas ---- would try to market the Middle Ground Shoal gas and the gas from the northern two platforms at Granite Point as a package, and I don't think that there is any need to repeat all that testimony at this hearing. The witnesses were cross-examined quite extensively, although Shell is not interested in Granite Point, except as -- to the extent that the gas it might produce as a part of the package, they have been trying to sell along with everybody else. Their witnesses are available for cross-examination today if the Committee desires, or if anyone else does. Mr. Giles, of course, is available and will testify in this hearing. I would also state that my opening statement is directed primarily to marketing and I see no reason to repeat it here. So I move at this time that the complete record be incorporated even though some of it may not be relevant to the hearing, but I don't know how we can separate it at this state. -8- MR. BURRELL: Mr. Swant the complete record of the hearing or just the marketing aspects, or something you would like to delineate? MR. SWAN: I puzzled last night trying to see how we could separate it and I really don't think we can. I think the part that is irrelevant is scattered through the record so much that I would rather make the complete record a part of the hearing, and if we ever have to, we can sit down and decide what was really not pertinent to this hearing today. MR. BURRELL: Excuse me, Mr. Swan, would this include your introduc- tory remarks for the record, also? Including the Chair's response to those remarks? MR. SWAN: Both relevant and irrelevant. MR. BURRELL: Without objection, the record of the hearing yesterday on Conservation File No. 105 is incorporated into this record of 102. MR. SWAN: Thank yout sir. I do have one witness, Mr. Giles, and he has testified in the previous hearing and his qualifications have been admitted, may they again be admitted. MR. BURRELL: His qualifications are accepted. I'll ask Mr. Marshall to swear him in. MR. MARSHALL: Will you raise your right hand. In the matter now at hearing, do you swear to tell the truth, the whole truth, and nothing but the truth, so help you God? MR. GILES: I do, sir. MR. MARSHALL: Will you be seated, please. MR. GILES: Going to question one in the Notice of this hearing, as it pertains to that part other than marketing, the question was this: "Can the excess casinghead gas be injected into a reservoir or pool by -9- July 1, 19721" The answer is yes, it can. However, there will be no benefit to the current oil production or ultimate 011 recovery by doing this because there just is not enough gas available to do any beneficial good. And the injection of the gas will, once again, as we presented to you yesterday at the Middle Ground Shoal hearing, do four things. It will congest platform space, but we could put the compressors on the two platforms. It will increase total investment and I will get into that in more detail later. It will reduce the profits accordingly, and finally it will initiate a hazardous condition with the injection of high-pressure gas on the platform. I have two exhibits on the board. The left-hand exhibit, which is the same identical map that was presented to this Committee at the March 4, 1971 hea'ring at Juneau, and I'm merely going to show it again for orientation and whatever benefit it may serve today. The single exhibit I really have for this hearing is on the right-hand side of the front board, and we call this Chakachatna Exhibit No.1. Here is the amount of gas that we have available in surplus quantities, as of July 1, 1972 and what it would cost to inject this gas I refer you to this Chak Exhibit No. 1 which shows that the maximum future gas production after we start the water injection project, this summer, will be in the realm of 13.5 million cubic feet per day at the end of 1972. And this ties in with the forecast that we had presented to this Committee in a different set of exhibits at the March 4 hearing in Juneau. The current fuel usage today on our Anna and Bruce platforms is about 4.1 million cubic feet per day. which also includes that used at the shore facility in East Forelands. and sending about one million cubic feet a day out to the platform Dillon from East Foreland facilities. And this 4.1 million a day will increase to 6.5 million cubic feet per day when we get the four water flood pumps in operation this summer. We have used an operational flare of 50 cubic feet per barrel, and at the time of maximum gas production, in late 1972, this operational flare would amount to 290 MCF a day. So adding together the 290 MCF a day operational flare and the expected fuel usage of 6.5 million cubic feet per day, subtracting that total from the 13.5 million cubic feet per day we find that we have approximately 6.7 million cubic feet per day to compress and inject, at that time. The compressor costs that we estimate to inject this amount of excess gas will approximate -- or would be at least one million dollars. This is just capital cost of the compression, and does not include the operating costs of the compressors. Question No. 3 dealt with: "Will more waste be caused than prevented by an order restricting production of oil to a rate whereby all the produced casinghead gas would be beneficially utilized or is required for a safety flare?" More waste will be caused than prevented, very definitely. Because of a loss in current income, a loss in present worth of future income, a loss in ultimate oil recovery, and as we pointed out yesterday, we will have an inefficient use of existing equipment which would be oversized for operating at the reduced oil rate. Now for Granite Point. on July 1, 1972, Chakachatna Exhibit No. 1 shows that the producing rate would be at 5900 barrels of oil ~rd~. MR. SWAN: Excuse me, Mr. Giles. I don't think you pointed out that this exhibit applies -- yes, it does apply, to only the Anna and Bruce platforms operated by the Chakachatna. MR. GILES: That is correct. 5900 barrels a day from Anna and Bruce. And at that time, the gas-producing rate would be 12,685 MCF per day as -10- -11- taken right off this exhibit. The current fuel usage today is 4.1 million cubic feet per day. If we subtract from that the million cubic feet a day that is sent now to Dillon -- we subtract this because Dillon, at that time under that type of an order, would supply its own fuel, then we end up with approximately 3.1 million cubic feet per day fuel usage. We have to add to that the fuel for powering the four water injection pumps, which would be 2.4 million cubic feet per day, when the conversions are made this summer. Well, that now brings us to a total of almost 5.6 million cubic feet per day. Allowing for an operational flare of some 50 cubic feet per barrel, we reach a figure of 5.8 million cubic feet per day, which would cover operational flare and all fuel needs we can anticipate at that time. Under such a restriction order, we would shut-in the highest gas/oil ratio wells first and, therefore, we rationalize that the average GaR for Anna and Bruce at that time would be 1500 cubic feet per barrel. Dividing the 1500 cubic feet per barrel into the 5.8 million cubic feet per day gives us an oil rate under pressure restriction order in July 1, 1972 of approximately 3800 barrels of oil per day. Gentlemen, 3800 barrels a day total from Anna and Bruce will not generate enough income to offset the operating costs and we would have to shut the platform down. We are out of business. So the current income loss would be what we are producing in July 1, 1972 of 5900 barrels a day times what we use, $3.10 a barrel, or $18,290 a day loss. The oil companies share for the Chakachatna group would be about $15,500 a day, and the State's share of this loss would be $2800 a day, which is equivalent to about $84,000 for the first month of the loss. The cumulative oil production to July 1, 1972, is expected to be about 25.3 million barrels of oil, from Anna and Bruce. The loss of remaining reserves would be on the order of 30-50 -12- million barrels of oil, and this fits the range of expected ultimate recovery as a result of the flood that was given at the waterf100d hearing in August of 1969, on Granite Point. So this future income loss converted to dollars would be 93 - 155 million dollars and the State's share, approximately 15 1/2% covering royalty and taxes, would be 14 - 24 million dollars. The oil companies' share would be 79 - 131. million dollars and no matter who's share you are talking about, this is a tremendously sizeable loss in anyone's view. The only other point which I want to touch upon is the point which I mentioned yesterday at the hearing on Middle Ground Shoal, that we have movable clays within the oil reservoirs that seem to be very sensitive, or sensitive to interrupted flow of oil exposure to some type of water, and we see this by the wells which would produce at lower rates following a shut-in period. This would concern us under any restrictions. I believe that is all I have to say -- MR. SWAN: Mr. Giles, this last point which you mentioned about the movable clays which seem to be picked up after a well has been shut down or restricted -- if a platform were to be shut down for an extended period simply because it couldn't take operating costs, and later an attempt were made to restore production, would these movable clays perhaps have caused damage which would prevent ever getting back to full production? MR. GILES: We foresee that it would. Because at that time, July 1, 1972, we should have been in operation with our waterflood for some 11 months, anyway. MR. SWAN: We have nothing further for Mr. Giles. He's available for cross-examination. -13- MR. GILES: Yes. MR. BURRELL: And have you again, in the case of Middle Ground, been negotiating since 1965 and, in the case of Granite Point, you have been negotiating since 1967, to sell this gas? MR. GILES: This is correct. MR. BURRELL: Have these negotiations been comparable to your efforts for waterflood? We have a letter from you in our file in 1968, advising that Granite Point -- that is, your portion of Granite Point, would be under waterf100d in 1969. This is now 1971 and you still aren't under waterflood~ Are efforts to market the gas in the same category? MR. GILES: No, the -- we have had problems which I thought were explained in pretty good detail in the March 4 hearing on the waterflood operations. We had vibration problems with the Vendor's pumps for this high-pressure water injection program. This has now been corrected and we are going to be all geared-up in another month or rwo. We are moving as fast as we possibly can, and we always have on the waterflood program to get it going. I'm pleased to say that we think this has been corrected and we are going to be in full swing this summer. MR. BURRELL: We have a few questions for Mr. Giles. Mr. Giles, have you been negotiating to sell this gas or is the same testimony as gi'ven yesterday which is incorporated into the record applicable to your efforts to market this gas? MR. GILES: The evidence presented yesterday is applicable to this hearing. MR. BURRELL: Granite Point Field went on production in 1967, is that correct? ,1 -14- Now on the marketing aspectt perhaps we need to touch on the slightly different matter. We talked about it at a great length yesterday and many questions were raised as to, well, aren't you banging down doors to sell this excess casinghead gas and, in reality, you can't go around banging down doors to get a market for this type of gas when you are trying to compete,with good clean dry gas well gas? This is, in a sense, wet low-pressure cruddy gas to try to compete, and I think the Committee has to recognize that we have apples and oranges when we are talking about casinghead gas and dry gas well gas. We are ready and willing to sell the casinghead gas, but it takes two to tango, the prospective marketer and the producer. MR. BURRELL: Mr. Giles, what would you consider a bona fide market -- mainly, would you consider that to consist of a written offer from a prospective purchaser with adequate guarantees of performance, and agreement as to price and all that. What would you consider an adequate market -- what would you consider adequate evidence of a market? Would it necessitate a written offer on terms acceptable to you? MR. GII.ES: In my judgment, it would take a written proposal. Not just talk, but something that is written down -- that you can sink your meat hooks into, and negotiate certain aspects of it that are not appealing. MR. BURRELL: Would you consider it to be a bona fide offer only if the terms were acceptable to you? MR. GILES: No. A valid offer would be a firm written proposal that we could then evaluate as to its merits. MR. BURRELL: Have you received any such written proposals? MR. GILES: We have not. ) -15- MR. BURRELL: Sears & Roebuck has shoes on sale -- they don't have a written offer for those shoes. Do you think there is a market for those shoes? MR. GILES: But you know what the price of those shoes are. MR. BURRELL: Do you have a price established for your gas? MR. GILES: No, we will entertain any price. MR. BURRELL: You will entertain any price? MR. GILES: That is right. We will consider any written offer and we'll talk about top offers, but we want something in writing that we can again sink our meat hooks into. MR. BURRELl.: ~'¡ould you accept an offer which would pay for your costs for delivering the gas and little, if anything, more? MR. GILES: We would certainly consider such a proposition. MR. BURRELL: Consider~ as opposed to accept. MR. GILES: Right. I'm not a gas marketer, Mr. Burrell. Amoco would definitely consider such an offer. MR. BURRELL: In your earlier remarks, just a few minutes ago, you mentioned that there would be a loss in ultimate recovery if production was restricted. Is your reliance on that the record of yesterday's testimony -- or, more specifically, the references you gave us as to various Oil and Gas Journal and other articles. MR. GILES: Yes, and I think they should be brought forward or included in the testimony. way. MR. BURRELL: You have never received a written proposal for the use of this gas? MR. GILES: That talks price and everything else, no. Not in that -16- MR. BURRELL: They are already included in the records. I just wanted to clarify that issue. I don't have any more questions. Does anyone else have any questions? Mr. Gilbreth? MR. GILBRETH: Mr. Giles, the current situation with respect to reservoirs in Granite Point Field and Middle Ground Shoal Field are somewhat different, are they not? The state of depletion and the secondary recovery program for which they are each subjected. MR. GILES: They are different. MR. GILBRETH: In the part of the field -- Granite Point Field -- which you are testifying, the Granite Point Platform, as a matter of fact, it is still operating under a fluid expansion system, is it not? MR. GILES: Is is. MR. GILBRETH: It's not sUbject to pressure maintenance or waterflood at this point. MR. GILES: That is correct. Except we do have two line wells that are injecting water. We have formed a buffer between the two competitive properties. MR. GILBRETH: Between the Amoco leases and the Mobil leases? MR. GILES: Yes, sir. MR. GILBRETH: Do you consider that the reservoir underlying the Amoco leases is rate sensitive at this point? MR. GILES: No. MR. GILBRETH: As a matter of fact, I believe your testimony indicated that you planned to start injecting water in August of this year, and it will take some time for the effect of the injection program to be felt -- will it not? -17- MR. GILES: It will. MR. GILBRETH: Yesterday in the testimony, information was given to the effect that the ultimate recovery is going to depend upon the rate at which water is injected. In the case of this field, Mobil has been injecting for quite some time an.d you have not. Do you think there will be a d.ifference in the ultimate recovery between your properties and Mobil's properties? MR. GILES: I don't see this, no. MR. GILBRETH: Due to pressure maintenance, I take it. MR. GILES: No, I don't see it. MR. GILBRETH: Do you plan to inject at the same rate that Mobil does? MR. GILES: Not necessarily. We will inject at the rate -- the optimum rate that we can put water into the ground in these 10 red arrowed injection wells. Each well will take a different amount of water. MR. GILBRETH: Isn't this in contradiction to the testimony yesterday to the effect that each operator is going to be injecting at his own rate and whatever his wells will take? MR. GILES: And whatever his wells will take, right. MR. GILBRETH: Then the recovery is not really sensitive to the overall injection, is it? It is what each well will take. MR. GILES: That's correct. MR. GILBRETH: Alright, if the wells in Granite Point then were restricted, if you knew that the wells were going to be restricted 12 months from now, could you not regulate your injection program to take this into consideration? MR. GILES: Yes, we could. MR. GILBRETH: And do you think that this would result in a decrease in ultimate recovery of several million dollars? I think that is what you just testified. -18- MR. GILES: It would approach it, yes. MR. GILBRETH: It would approach it. Is it your plan to build pressure back-up above saturation pressure in the well? MR. GILES: We would hope to. MR. GILBRETH: That is your plan? MR. GILES: Yes. MR. GILBRETH: So that at least from a purely theoretical standpoint the GOR's would drop 70 - 80%? MR. GILES: Yes. MR. GILBRETH: Which would, by the same token, allow you to increase productivity, would it not? MR. GILES: Well, we are restricted to the provisions outlined in your question no. 3. In other words, no excess gas flare, essentially. Then as I pointed out, we would be reduced in rate to a point to where we could not generate enough income to offset the operating costs. We would be done. MR. GILBRETH: Let me get just a little bit technical with you here. Will not the gas/oil ratios increase as your flood front hits your producing wells? MR. GILES: We show increase in gas/oil ratios until we essentially have fill-up. MR. GILBRETH: t~at is your average producing ratio now? MR. GILES: I would say in the order of 1600 cubic feet per barrel. MR. GILBRETH: And what is the solubility of that oil? MR. GILES: 950 cubic feet per barrel. MR. GILBRETH: Soon after you start getting results you would expect the producing GOR to drop to something in that order of magnitude, would you not? MR. GILES: Yes. MR. GILBRETII: Have you taken that into consideration in the calculations that you presented here? MR. GILES: Yes, we have. MR. GILBRETH: Alright. You indicate from this business of having clays in the reservoir when oil production is shut down that there is a very good likelihood of damage when the wells are opened up. I believe in previous testimony you've indicated that the Granite Point reservoir is considerably different from the others, because it is going to require such a high pressure and it is tight. Do you have any information that shows that you have this clay problem present? Or that any damage has yet occurred? MR. GILES: May I counsel for a moment? MR. GILBRETH: Yes, sir. MR. GILES: We find no specific outstanding example at Granite Point. But we do suspect that this could happen -- we do suspect that movable clays could be subject to causing a restriction involuntarily. MR. GILBRETH: Well, from time to time it is necessary to shut down producing wells in an oil field and I'm sure you have had a bunch of these shut-downs. You haven't seen the damage occur yet? MR. GILES: Not any outstanding, no. MR. GILBRETH: Alright, sir. You mentioned that if the Item No.2 and 3 restrictions that were mentioned in the call of hearing, came to pass that the production of your platforms would drop below the economic limit of some 3800 barrels a day, I believe you said? MR. GILES: Yes. MR. GILBRETH: Yesterday the curve you presented on your Middle Ground Shoal Platform indicated an economic limit of about 1200 barrels a day per -19- J: .~ -20- platform. Is this an indication that the Granite Point Platform is that much more expensive to operate? MR. GILES: Yes, we, of course, lack knowledge as to what will be the true maintenance cost of the high-pressure water injection pumps. This will be a factor that increases our estimate of an economic limit at Granite Point, compared to Middle Ground. MR. GILBRETH: In other words, you are figuring that it is at least 50% more expensive than it is at Middle Ground? MR. GILES: On that order of magnitude. MR. GILBRETH: You mentioned, also, that if the production was restricted that there would be a loss in ultimate recovery on future revenue, I believe you said. Would this not be simply a deferral of income to be recovered in the future and the only real loss would be in the present worth aspect? MR. GILES: There is no present worth aspect in this analysis on Granite Point because the present worth of 0 future income after July 1, 1972 is O. MR. GILBRETH: You are figuring then that the platform will flatly be abandoned? MR. GILES: That's what we foresee under the type of provision included in question 3 of the notice. MR. GILBRETH: Could you make available to us, or can we rely on an economic limit of 3800 barrels a day for these two platforms to do our own calculations? MR. GILES: No, I would think the economic limit would be a little higher than that. .~ -21- MR. GILBRETH: Could you give us a figure that we can rely on for calculations to see what the effects would be? MR. GILES: Well, we have estimated under our waterflood operation for Anna and Bruce at Granite Point that our economic limit will be reached at about a rate of 2500 barrels a day per platform. Or, as I said, we don't really know what kind of maintenance cost we are going to be looking at for these high-pressure water injection costs. We have estimates, of course, and that is still into the 2500 barrels of oil per day per platform. Mr. Gilbreth, we can foresee that even with unrestricted rates, we will decline in oil rate at Granite Point, after the waterf100d starts, to a level of production that would be rather close -- alarmingly close to an uneconomical situation. Talking about the end of '72, we would be in a rate of 5700 barrels a day or so. Even if it went to 5000, the so-called theoretical limit, we would not shut the platforms in under that situation, because we know that we are going to get a waterflood response. We certainly have expectancy of this. But to illustrate this point in a different way, any restriction upon the oil rate would, in our opinion, if you just consider the cost of present producing operations and ignore finding costs -- we expect to reach a break even condition shortly before we reach the economical limit, but if you put oil rate restrictions on us, the loss in present worth of future income might not allow us to even reach the break even situation for our producing operation. MR. GILBRETH: Well, I know that the -- any delay in income is certainly going to be detrimental from an economic standpoint. Looking from a conserva- tion standpoint, however, the recovery could conceivably be enhanced. This, again, would depend upon your economic damage or what it can do. We haven't -22- touched on anything about any possible supplemental gas supply in the Granite Point Field -- has your company analyzed or determined if you should have other gas that might supplement casinghead gas for possible market? MR. GILES: We have testified previously that there are no shallow gas sands, to our knowledge, in Granite Point. MR. GILBRETH: You haven't tested the sands -- any shallow sands? MR. GILES: We haven't found any that warrant testing. MR. GILBRETH: Alright. I would like to ask you if you are now actively negotiating with anyone on the sale of the produced gas from Granite Point. MR. GILES: We have no palm-in-hand written proposals, no. MR. GILBRETH: You are not considering any right now? MR. GILES: We haven't received any firmin-hand proposals. We always have the door open. MR. GILBRETH: The door is in Denver, though, isn't it? And the market up here. Isn't it necessary for somebody to go down to Denver to tell them they want to buy some gas here? MR. GILES: It costs 8¢ to write a letter, but it can still get to Denver and then we can go seriously from that point on. MR. SWAN: Mr. Giles, don't we use air mail stamps? MR. GILES: Excuse me, ll¢. MR. GILBRETH: Well, we know that gas contracts have been consummated in the last year or two in the vicinity for additional gas, people buying dry gas, at prices in the neighborhood of competitive gas here. I asked the question yesterday if you people had talked to Homer Electric, Tesoro or someone like that, and there is no knowledge that you have. These people have been looking for gas. I know that Tesoro is paying a terrific price for gas -23- because they couldn't get it, and t question if -- in my own mind -- if the people who are trying to sell gas are really trying to sell it or just there if somebody comes in, fine. It seems to me that there may not be enough effort exerted toward trying to get rid of the gas, trying to sell it. MR. GILES: Mr. Gilbreth, the way you just said this, you said that Tesoro, for example MR. GILBRETH: Yes, sir. ~m. GILES: -- is looking for that type of gas. Apparently they had told you this. Why don't they come and see Amoco about it, if they are really looking for our type of gas? MR. GILBRETH: Why didn't Amoco go see them? MR. GILES: What do we have but a wet low-pressure, lousy gas compared to a dry gas well gas. MR. GILBRETH: And will you ever have anything but a low-pressure lousy gas at which you can't sell until a field is depleted if you don't try to sell it? MR. GILES: But it takes two to tango, again. MR. GILBRETH: That's right, and wetre sure dancing around. I'll ask you, is it necessary to keep more than one safety flare burning on each of your platforms in Granite Point? MR. GILES: No. MR. GILBRETH: At a time. That's all I have for right now. MR. BURRELL: Mr. Giles, are you aware of the provision that the Title 38 of Alaska Statutes provides for reduction of royalty, when it is necessary to recover additional oil or where economics becomes a problem after pub lie hearing? -24- MR. GILES: I vaguely recall this, yes. MR. BURRELL: Well, there is such a provision which provides that in case where -- I don't recall the language and I don't have it with me, but it essentially provides where economics are such that further production is doubtful or uneconomic, the operator may apply for a public hearing to seek a reduction in royalty. Should this uneconomic situation which you indicated could exist in the near future, depending on what type of an order results from this hearing, should this uneconomic situation result, would Amoco be willing to make such an application for reduction in royalty, in order to be able to continue their production? MR. GILES: We would certainly look at this. Would the State be willing to take, not only less oil income, but less royalty? MR. BURRELL: We are talking about less royalty. That's the purpose of the statute. Less is better than none. MR. GILES: Less is better than none, but quizzically I wonder if you're using very good judgment here because you are talking about losing the valuable income of oil, for the dubious benefit of eliminating the flare. MR. BURRELL: Not at the value the oil has. We are talking about deferring the income rather than eliminating it. MR. GILES: Now you get into present worth dollars then. MR. BURRELL: Whose present worth dollar? MR. GILES: Yours and ours. MR. BURRELL: Well, of course, we have to put the pencil to that. MR. GILES: You mean if we see present worth dollar losses and you get a portion of this, you would see it, too. MR. BURRELL: It's all relevant. Does anyone else have a question of Mr. Giles? Mr. Marshall? -25- MR. MARSHALL: Mr. Giles, we have, as you said -- or Easy had said here tangoed all the way around this marketing effort as discussion, but actually in view of the variable composition -- in the gas composition problems -- you have the transportation problems that crop up when you talk about the utilization of casinghead gas, it really seems to me it would be highly unusual if any prospective purchaser would come to you with a firm dollars and cents price for gas, because he would want to resolve these other problems of transportation, for one thing. He would have as many questions on composi- tion. We know this because they come to us and ask about them, and I think really where the good faith effort is shown is in the initiation of the contact. I think if they contact you they are telling you: "We want to talk, we want to negotiate about this price for gas", and I WÐuld like to ask you, can you cite an instance where you have taken the initiative in approaching a would-be marketer? MR. SWAN: Mr. Marshall, I think I answered that yesterday. I know of my own knowledge, because our gas sales man has consulted me as an attorney, on the forms and contracts he might be able to work out, and we have made these contacts; in fact, it is my recollection that we have contacted Tesoro about the possibility of getting gas up there to use, that we have contacted Anchorage Natural, that we have had, if not direct discussions with Chugach, discussions with people in an attempt to get a part of the gas to them; and I don't think that Mr. Gilbreth has properly stated what the records said. We have made these contacts. Now, we haven't got anything far enough along so I have drafted a contract to present to these people, but we have talked to them. We haven't just sat and waited behind our door down in Denver. ~~ -26- MR. MARSHALL: In other words, you have shown initiative, too. MR. SWAN: I think we have. Yes, sir. MR. MARSHALt: One other point -- you mentioned the licruddy" gas supply. Just because something has some detrimental aspects to it does not mean it cannot be sold, and we can use the case of crude oil. You do sell your lower gravities of your crude oil. You sell at a lower price and it is not as desirable as a higher API gravity, but it is sold. I would not like to have the handle tied onto casinghead gas that it is not valuable, and I'm sure tha t you ---- MR. GILES: I did not mean it that way, and it can be cleaned up for a price. MR. BURRELL: Mr. Giles, as you have indicated, or rather Mr. Swan has, I believe most recently when he referred to yesterday's record. He indicated you have approached some of the prospective purchasers of this gas. Could you provide us with approximate dates of these contacts? The names of the people whom you have contacted, and could you provide us with copies of any rare correspondence between you and them? You need not do so at this moment, we will hold the record open if you would like to do so at a later date. Question: Can you do so? MR. SWAN: We can do so. Do you have the rundown we made right there? MR. BURRELL: Yes, I sure do. Would you like to read it for the record? MR. SWAN: It's pretty long. MR. BURRELL: Would you like to submit it for the record? MR. GILES: It's about ten pages -- don't read it~ (laughter) MR. BURRELL: We may want this after all. -27- MR. GILES: I know it's serious -- I'm not belittling that at all. Apparently I'm not getting my thoughts across to you and I'll quit being facetious in your views in these things. They are serious and I mean them to be serious, but I think it would be better to submit this to you. MR. SWAN: Mr. Chairman, I have here a memorandum - it is an intercompany memorandum - addressed to Mr. R. B. Giles, who is a witness. It's signed by A. H. Barrett, who, for the record, is our gas salesman in Denver. It lists a number of wells just by date beginning with August 22, 1966, running through April 30, 1968. The memorandum was dated May 3, 1968, so it couldn't have gone beyond that and then is supplemented by, beginning after that, by an unsigned supplement, but it does come from the same man, and that takes us down to February 18, 1971. And I think Mr. Giles is right, I don't think there is any purpose gained by reading it :f..nto the record, but I would like to offer it as evidence of at least what our gas man says he's been doing down there. There are, as he says, ten pages of just short memorandums, of a letter to so- and-so, of a phone call, or something like this. MR. BURRELL: Well, first, Mr. Swan, we are delighted to know that you really do have a gas man. There was some serious question about that as I understand. MR. SWAN: I haven't read this recently. I would make one comment. Our gas man -- he is a good gas salesman. You may not believe it, but some- times he uses some big words where a little word would have done better. I MR. SWAN: I think you need it. MR. BURRELL: Would you like to read it? MR. GILBRETH: This is a serious matter here. -28- hope you will read some of these notes with a little understanding. MR. BURRELL: Rather than read that in the record, could I ask you a question about it before you introduce it, and that is, does it state the approximate date and to whom the inquiry was directed, or from whom it was received, and the essence of the conversation, or a brief summary of it, or something to that effect? MR. SWAN: Well, here's a typical -- one of the notes -- August 27, 1970. Koch Industries, Inc. needs flared gas from GP Field at Nikiski, also would like to lease or otherwise utilize a second line from GP. Representatives will be in touch. This, April 30, 1970, replying to Olympic, Inc., informing them we do not, and his language gets . . . . . . . . .. We do not have natural gas there that can be available to compete with offers they now have. This Koch Industries, I believe, am I right, they are the Rock Island ---- MR. BURRELL: A parent of Rock Island, right. MR. SWAN: So, as the gentleman had testified yesterday, they had been in touch. This is the type of information it has. And it does have the dates that the contact was made, and -- MR. BURRELL: Let the record reflect we have Chakachatna Exhibits I and 2 on the board and this is the alternate Chakachatna Exhibit 3. MR. SWAN: Chakachatna Exhibit 3 -- now, as I say, this was brief and it was made for our use. If questions are raised in your mind after you have read it, and you want further details, we can give them to you. MR. GILBRETH: Hr. Swan, is this limited only to Granite Point or does it include Middle Ground Shoal, also? MR. SWAN: All of our marketing efforts have been for a package, Mr. Gilbreth, since we have had this suit. We haven't tried to sell part of it. -29- MR. BURRELL: Unless there is objection, could this be entered into the record of yesterday's hearing, also? MR. SWAN: Yes, sir. I'm sorry it didn't turn up yesterday. MR. MARSHALL: Pardon me, Mr. Giles, did you intend that the large map be entered as an exhibit? I believe you were just putting that up for a reference. MR. GILES: I was just tacking that up for a reference. You have the exhibi t. MR. BURRELL: Let us cha.nge the record of the respective exhibits. The one on the right, the Granite Point platforms Anna and Bruce is Chakachatna Exhibit 1. The information in Mr. Swan's hand is Chakachatna Exhibit 2. MR. SWAN: Mr. Giles called my attention to the fact that this is the only copy we got. May we Xerox this or withdraw it from the record, Xerox it, and return it to you? MR. BURRELL: That will be acceptable. Are there any other questions of Mr. Giles? MR. BURRELL: Could you please come up to the table, sir, and identify yourself for the record. MR. BARTLETT: Lynn Bartlett with the Native Village of Tyonek. There was one question with regards to Mr. Giles' testimony. Perhaps I didn't understand the question. Perhaps I don't understand the geographical situation in this area, but perhaps you can clarify it for me. You said there were no shallow gas sands that had any interest in Pan Am. Does that include any of the wells that are situated up onshore on the Tyonek Reservation? MR. GILES: No, that comment meant out in the water under the platforms, reachable from a platform. You mi~ht recall that we drilled the Kaloa Well originally? -30- MR. BARTLETT: Right. Mr. Swan had made the remark that you were going to market this -- if at all, you were going to market this gas as a package. Did I understand that? MR.. SWAN: Yes, sir, that has been our effort. We feel that a package is certainly more attractive to a purchaser than selling it piecemeal. On the other hand, as I stated yesterday, if we can't bargain the package, we'll market any part of it. MR. BARTLETT: And, by package, do you mean the Middle Ground Shoals and the onshore -- if there was any gas delivered onshore, does it include that? In other words, I'm thinking of Mobil and Pan Am. Or are you talking solely about Amoco's packaging and marketing? MR. SWAN: At present, sir, I don't think there's any connection that can get out to Granite Point platforms to the west side and I'm informed -- maybe Mr. Giles can answer this better -- we have looked at the possibility, I don't know what the cost might be, but really, this gas as a package, if we market a part of it, it still would not be marketing only Granite Point gas or Middle Ground Shoal gas, it would be marketing a total part of that package because our lines which connect them must make them a package. MR. GILES: Mr. Bartlett, I think maybe I can help you a little bit here. Our gas from Bruce and Anna goes to the East Foreland, and we don't have anything that goes to the west side. MR. BARTLETT: I understand -- I'm with you there. What I was wondering when you say market as a package, you are speaking solely for Amoco marketing its gas and not any kind of cooperative arrangement between any -- is Chakna- chatna a group? -31- MR. CILES: Yest there is -- MR~ BARTLETT: Mobil? MR. GILES: No, Chakachatna is -- Amoco is the operator of the foursome an.d we havè three partners, Atlantic Richfield, Skelly and Phillips. MR. BARTLETT: I see. MR. GILES: They comprise the Chakachatna group. MR. BARTLETT: When you talk about marketing this package, you are talking about Chakachatna or are you talking about Amoco? MR. GILES: We are really talking about Chakachatna, because we partly because we have to all agree to this. MR. SWAN: Actually, we're also talking about Shell, because we have had a cooperative effort with them. MR. GILES: Yes, Shell is involved. MR. BARTLETT: Thank you very much. MR. BURRELL: Mr. Swan, you said just a minute ago that Amoco is willing to market as a package or any part thereof. This is not directly contrary to Mr. Hendershot's previous testimony given yesterday? MR. SWAN: I believe Mr. Hendershot's testimony is -- it is my contention that Mr. Hendershot misunderstood what we said, what we were trying to tell him. This isn't the first time there has been a failure of communication. Our purpose was trying to tell him that we had, at that time we really thought we had a market that was about to gel and we didn't want him to be in the position of having negotiated and have it all set up and then find out that he had no gas. MR. BURRELL: We appreciate the concern for Hr. Hendershot, but following the evident failure of your negotiations, which according to Mr. Hendershot -32- who is making the deal with you, did you notify Mr. Hendershot that your deal had collapsed and it was now available? MR. SWAN: Sir, we haven't given up yet. MR. BURRELL: That is not the answer to my question. Did you notify Mr. Hendershot~ MR. SWAN: We didn't write him another letter. We left it at, if knowing these conditions, was he interested in further negotiations? And we never heard another word from him. MR. BURRELL: And the reason you didn't, perhaps, was because you told him you were involved in negotiations for the whole package and you never notified him that your package deal had fallen. MR. SWAN: As I say, apparently he didn't understand our letter as it -- as we intended him to. I don't know who's to blame for the failure of communi- cation. MR. BURRELL: Mr. Swan, let me understand your letter, sir. Your letter told him that you were not interested in selling him a portion of it because you were then negotiating a full package. Isn't that a fair summary of your letter? MR. SWAN: No, we said that if we could sell it all we would, and that we were negotiating and that we did have a real possibility of negotiating a market for all of it and if we did, that would make it unavailable to him. ~m. BURRELL: That's correct -- I understand that. Then your package transaction fell apart and was not consummated -- did you then notify Mr. Hendershot that a portion of it was now available? MR. SWAN: Sir, I don't consider that that marltet has completely fallen. We are still talking to those people, to the same people, and we still have a ) -33- HR. GILES: His letter to us was dated January 23, 1969 and the response by Mr. Swan was in February of 1969. MR. BURRELL: I won.' t argue about that -- I won't argue about the record. Does anybody else have any questions of Mr. Giles? If not, I will excuse Mr. Giles, subject to recall. I would interrupt the operator's testimony at this time -- we've asked Mr. Teel to come in and out of courtesy to him, after dragging him away from the office, ask him to come up and testify at this time. MR. BURRELL: Hr. Swan? MR. SHAN: You did -- our exhibits have been accepted -- have they not? MR. BURRELL: Yes, sir, they were accepted. We will also give them back to you for Xeroxing. Mr. Teel, thank you very much for coming in. I will ask Mr. Marshall to swear you in. MR. MARSHALL: Please stand and raise your rip,ht hand. In the matter now at hearin~, do you swear to tell the truth, the whole truth, and nothing but the truth, so help you God? MR. BURRELL: Thank you. HR. GILES: That was 1969, Hr. Burrell. MR. BURRELL: His testimony, I believe, was '68. chance of putting together. a market. And as I said yesterday, maybe we are crazy to be optimistic after this long a time, but we still are optimistic. MR. BURREI.L: Mr. Hendershot's testimony was the negotiations that he carried out were in 1968 and you told him. then that you wouldn't sell him a portion of it because you were attempting to negotiate a whole package. Some- thing to that effect. And now, three years later, you are still attempting to negotiate the whole package, is that correct? MR. SWAN: Certainly. -34- This severance does not require a person to produce books, papers or records or to testify in response to an inquiry not pertinent to some question lawfully for the Department or courts for determination. No natural ------ on the account of any transaction, matter or thing concerning which, in spite of his objection, he may be required to testify or produce evidence, documentary or otherwise for the Department or courts, or in obedience to its subpoena. However, no person testifying subpoena for the Department or courts, on the ground or for the reason the testimony of evidence, documentary or otherwise required, tend or tend to incriminate him or subject him to a penalty or a forfeiture. MR. TEEL: I do. MR. BURRELL: Mr. Teel, would you recite again for the record your capacity in the various corporations that you represent, and your capacity with each. MR. TEEL: There are only two corporations, one is the Alaska Pipeline Company, I'm Vice President and General Manager of that company, and I'm President of its subsidiary, Alaska Public Service Corporation, formerly known as Anchorage Natural Gas Corporation, which are one an.d the same. MR. BURRELL: Thank you, Mr. Teel. Mr. Teel, I should read to you, for the record, AS 31.05.070 which is, I know you are aware of it, but I want it in the record -- it is entitled, "Attendance B.nd Testimony of Witnesses". Paragraph A: The Department may summon witnesses and may require production of records, books and documents for examination at a hearing or investigation conducted by it. No person may be excused from attending and testifying or from producing books, papers and records before the Department or a court, or from obedience to the ) -35- speak as to all fields which you may have been involved in negotiations so as attendance at this point in future days, would you like to waive for -- to in order to avoid any requirement for continual counsel on this in order MR. BURRELL: I would ask that, with your permission, we would consult MR. TEEL: We have had discussions. MR. BURRELL: You have had discussions? gotten close enough to call the developments negotiations. we had various conversations going back several years, but we really have not MR. TEEL: I would say we have not really reached a negotiating stage any of the Cook Inlet oil fields? More specifically, Granite Point Field. engaged in any negotiations with any of the producers of casinghead gas for of any of the corporations which you represent -- have you in the past or now MR. BURRELL: I would ask you, sir, whether or not you have, on behalf MR. TEEL: I was. You were provided a copy of this at the time the subpoena was served? to testify in court. of disobedience to his subpoena issued by the court or for the refusal and give his testimony. The court may find for contempt as in the case Department and produce the records, books and documents for examination and to tell him to comply with the subpoena and to attend before the issued by the Department or refuses to testify as to any matter regarding which he may be interrogated, any court of record in the State upon application to the Department may issue an attachment of the person Paragraph B: If a person fails or refuses to comply with the subpoena is exempt from prosecution and punishment for perjury in so testifying. -36- }ffi. BURRELL: Nothing else. There is nothing else in writing on any we aren't dragging you back every day? It is up to you. I would like the current inquiry entered into the records on the hearings yesterday, which is still open, Conservation File No. 105, and for the hearings scheduled for the next two days, if you have no objection. MR. TEEt: I have no objection. MR. BURRELL: Then your answers in this testimony -- your testimony as requested will be entered into the record for all four days. MR. TEEt: Alright. MR. BURRELL: So, I'll rephrase the question then and eliminate the specific reference to Granite Point Field. Have you been in negotiations with any of the producers, you or the corporations you represent, any of the producers of gas -- casin~lead gas and oil from these fields -- with a view towards taking or somehow using or utilizing or purchasing of any of the casinghead gas? MR. TEEL: I don't think it's fair to describe the conversations as negotiations, but the subject has been discussed. The subject of casinghead gas has been discussed. MR. BURRELL: Is there a proposal between you, by you, or to you from any of these producers? MR. TEEt: Again, I don't think it's fair to describe it as a proposal, but a conversation has taken place. MR. BURRELL: Is there anything in writing? MR. TEEt: I believe there is, of sometime back, a record regarding the what I call the Middle Ground Shoal or Granite Point, yes. I think nothing else. -37- MR. BURRELL: Could you give us the subjects of these memorandums? MR. TEEL: Well, the primary interest we have had in the gas that I'm talking about from the Middle Ground Shoal or Granite Point, was the possibility of it being used for power generation by Chugach Electric. That is the primary opportunity that I've seen. MR. BURRELL: How did you playa part in that? In using gas for Chugach Electric? MR. TEEL: Purchasing gas for Chugach Electric? Purchase? We had a gas supply available to Chugach Electric for roughly five or six years where they're burning oil and we tried, I think very persistently, to convince that company that they should be burning gas. We have offered to try to give them field on the casinghead gas or any field other than Middle Ground and Granite Point? MR. TEEL: That is my recollection. MR. BURRELL: Is that correct, sir? MR. TEEL: That's my recollection. MR. BURRELL: Could you give me an approximate date of this correspondence to which you refer? MR. TEEL: There was some last year, and there can well have been in prior years. Most of the conversations were by long distance telephone or in my office. MR. BURRELL: Do you have memorandums, interoffice memorandums, or memorandums in the files in respect to these conversations? MR. TEEL: There are some. They are not very well coordinated -- it was kind of a part time project, just ideas developed, never prosecuted very we 11 . -38- a firm supply of dry gas which could be substituted by the -- what I call flare gas on an if and when available basis. At an advantageous price. MR. BURRELL: Were you seeking then to supply the dry gas to solve an interruptibility problem, or were you seeking to purchase the casinghead gas? MR. TEEL: I was trying to sell gas, however I could, and I didn't feel that I could offer the dry gas at a sufficiently attractive price to get their interest and, in fact, I had not been able to do so, and I felt the casinghead gas might solve the problem since I thought it might be delivered there cheaper. MR. BURRELL: In other words, you were negotiating for the casinghead gas? Negotiating may be too strong a word. MR. TEEL: It is too strong a word -- we were discussing it. MR. BURRELL: You were discussing the possibility of purchasing casing- head gas to provide Chugach Electric for power generation at Bernice Lake, I presume? MR. TEEL: That is right. MR. BURRELL: For power generation, with the understanding that in the event of interruptibility you would back it up with your dry gas, that you have available. MR. TEEL: That is correct. MR. BURRELL: Could you tell us what the current status of these negotiations is? ~m. TEEL: I really don't know. I haven't heard in the last three or four months what the situation is. MR. BURRELL: 'veIl, what is the status, though? The status is dead silence? ) MR. TEEL: I feel that it is open. MR. BURRELL: You would purchase it then on reasonable terms? MR. TEEL: Yes, I would. MR. BURRELL: Does this contradict yesterday's testimony? You said that you had absolutely no use for it whatsoever, or did I not understand? MR. TEEL: I don't believe I said that yesterday. I said we had a supply of gas for our primary market from our producers over the long pull. That is true~ we do. MR. BURRELL: I see. Well, could we have the record reflect the fact that you are interested in purchasing flared gas? MR. TEEL: We are interested in it if we can sell it. If we can't sell it, we have no use for it. MR. BURRELL: That is true of anything, I belie,ve. Nobody wants to buy something they can't sell unless they want to use it themselves. MR. TEEL: I think I should clarify for the record that we actually have two contracts for gas. One is to serve the Anchorage market area and another one to serve a market area north of Kenai. They are separate contracts, and we do have certain flexibility in the second contract on the North Kenai Road which is not so easy in the basic contract. -39- but we have talked to the people who own the gas. MR. BURRELL: Do you still consider the door open as to purchasing flare gas? MR. TEEL: The status is pretty much dead silence until I heard yesterday that Chugach was rather interested in obtaining a standby supply if they can get the flare gas at an attractive situation. MR. BURRELL: Are you still negotiating for the flared gas? MR. TEEL: Oh, I'm not still negotiating. I don't think I ever negotiated, ) -40- MR. BURRELL: Your basic contract restricts your right to -- I shouldn't say right -- restricts your option to something in the respect to purchasing other gas. Is that a fair stwmary of the contract? MR. TEEL: It contemplates our supply as regards to dedicate and to serve certain markets, the Anchorage area market. MR. BURRELL: In other words, those who are supplying your primary contract have a right to meet the price of any additional gas which you might otherwise require and thereby MR. TEEL: Not being a lawyer, I would think that perhaps is a fair description. MR. BURRELL: And thereby prevent you from acquiring that additional gas? By simply meeting the cost. Is that a fair MR. TEEL: I think that would be fair. Again, I'm not a lawyer. MR. BURRELL: What I want -- MR. TEEL: Those exact words do not appear, but I think that is fair. ~m. BURRELL: And you currently have the door open, but there is nothing much going on right now with respect to the gas currently being delivered at East Foreland from the Middle Ground Shoal and a portion of that from Granite Point? MR. TEEL: That is correct. MR. BURRELL: And just to reiterate one more time, you are not now and you have not in the corporations which you represent, are not engaged in any negotiations with the producers of gas -- of the casinghead gas -- from the other fields in the Cook Inlet? MR. TEEL: No negotiations as such. -41- HR. BURRELL: Have you had discussions? MR. TEEL: We have had discussions. MR. BURRET..L: The discussi.ons have been related to prospective purchase by you of that gas? MR. TEEL: I think purchase may be a fairly strong word. MR. BURRELL: Are you going to steal it? MR. TEEL: We might trade it. MR. BURRELL: Might trade it? MR. TEEL: That is right. If it were available in suitable quantity and economic advantage. MR. BURRELL: In the event that there will be some transaction involving disposition of the gas by producers from fields other than Granite Point and Middle Ground, you would be involved? MR. TEEL: Yes. MR. BURRELL: The negotiations or discussions have been along that line? MR. TEEL: Yes. MR. BURRELL: Are there any memorandums on these discussions? }ffi. TEEL: No, definitely. MR. BURRELL: They are all oral? MR. TEEL: They are all oral. MR. BURRELL: ~~at's the approximate date of these discussions? MR. TEEL: Oh, in the past one or two months. }ffi. BURRELL: One or two months. Have you any idea when the next step may be taken with respect to these discussions? t~ere do we stand now? Are they idle or are they going to be reopened, or do you have any feeling for that? -42- MR. BURREIJL: Right. Could you give me an idea of the timing on this? From these discussions, do you plan to do this next week or next year or 10 years from now? MR. TEEt: I think it is pretty hard to predict when. MR. BURRELL: Well, in the discussions, was there any discussion of the time involved? MR. TEEt: No, I don't believe that the time period was set. MR. BURRELL: I don't mean a time period firmly set -- was there any feeling on your part whether they meant next week or next year or 10 years from now? 'Ñhat pattern of feel did you have for what they were talking about? MR. TEEL: My feeling is that it is not practical to get the gas over to our area. It is not economically practical, but if it should be and it has got to be researched and studied with studies that are not in progress as far as I know, they may be. We are not actively studying -- MR. BURRELL: You are not studying the possibility of transporting the gas from, say, across the Cook Inlet? MR. TEEt: We are not. MR. BURRELL: Do you know anybody who is? MR. TEEL: No, I don't. MR. BURRELL: Have you heard of anybody who is? MR. TEEL: Well, I presume that the people who own the gas may be, but I -- that's a presumption, so I don't know. MR. BURRELL: 'vould you be willing, assuming that the economics could be worked out, would you be willing to enter into some such trade? MR. TEEL: I think we are always open to make a business arrangement fact. MR. TEEL: I feel like the subject is still active. Quite new, in ; -43- if it is profitable, and I think that if it turned out to be profitable we would be willing, yes. MR. BURRELL: Well, this proposed trade would no doubt involve some deferral of production of gas well gas. Is that a fair assumption? MR. TEEL: I think it would be fair, yes. MR. BURRELL: I have no further questions of Mr. Teel -- does anybody else? Mr. Gilbreth? MR. GILBRETH: Mr. Teel, there was an exhibit entered by Pan American in response to questions that were asked about their contacts with various people and various companies trying to establish market for the gas from Middle Ground Shoal. I have just been looking at this while you were testifying and I noticed two or three or four references here to your company where contact apparently had been as far back as November 19, 1968, where they say that there was an inter-company letter indicating that Anchorage Natural Gas Company is no longer interested in the gas at our facility, and no further negotiations are planned. Then leading on up into late 1970 there apparently were some contacts between your company and some of the interested owners in 1970 and on into February 1971. As I understand your testimony as far as your company is concerned this is dead, so far as trying to negotiate for the casinghead gas into East Forelands? MR. TEEL: I don't think I said it was dead -- I think I said it had not been -- very little activity until the words yesterday came that there might be an interest in casinghead gas. We've had nothing recent that would show there's an interest. MR. GILBRETH: Well, then, the contacts that were made with your company ) -44- MR. GILBRETH: I was referring -- I referred here to a reference made here in this exhibit. Pan American presented a letter to you February 17, 1971 informing you that they were still interested in marketing East Forelands onshore flare gas. I assume that you -- MR. TEEL: I didn't answer that letter. No, we talked to people from Denver, the man from Mr. Bear's office with us last fall, and a man from Arca. My recollection is that they were very willing to sell a little bit or hoped to sell all of it. They were very interested in anything that we put together. We explained the problem that we have got to have an outlet for the gas and we had not, in that situation, there is really nothing to pursue. MR. GILBRETH: Are your contractural arrangements such that to take on more gas you have to have an outlet for it? To contract for more you have to have an outlet for it? MR. TEEt: I-- MR. GILBRETH: Do you not have enough flexibility in your contracts to MR. TEEL: We have the flexibility, but the truth is we don't have a market worth talking about on the north road. We could sell it to a few bars, trailers, school and a church. MR. GILBRETH: Is there any connection between that series of outlets and your other main line? late in February 1971, apparently you have chosen not to act upon it, or attempt to negotiate or anything? MR. TEEL: We've not had anything to pursue, but we know that the matter has come to a head and regardless of these hearings or anything, Chugach is going to have a new power plant installed and they have got to have fuel for it. -45- MR. TEEL: Not physically owned by us, but there is a relationship. MR. GILBRETH: If gas were to be placed into the north road section of your system, this would just back out gas back at the platform, would it not? MR. TEEL: Well, we hope so, but that's not really worked out. MR. GILBRETH: But I -- MR. TEEL: We think something will be reasonable on that line. MR. GILBRETH: That would be the practical effect, wouldn't it? MR. TEEL: I cannot speak to the other side of the contract. That would be our hope. rm. GILBRETH: I see. MR. TEEL: And that is controlled by the operators, of course. MR. GILBRETH: Yes. That's all I have. MR. BURRELL: Does anybody else have any questions of Mr. Teel? Mr. Teel, I would ask you if you would voluntarily place into the record all memorandums, letters, documents and correspondence that you may have in your files or have any access to, with respect to potential use of casinghead gas. MR. TEEL: Will do so. ~1R. BURRELL: I would appreciate it. What would be convenient for you in the way of time? MR. TEEL: I would like as long as possible. I don't know where it all is. MR. BURRELL: How much time is as long as possible? MR. TEEL: You have certainly until the end of this week, don't you? }ffi. BURRELL: Nope, we can give you more than that if you need it. MR. TEEL: I'd like additional time. MR. BURRELL: How about the end of next week? Which will be -- do you have a calendar? , -46- rate base company of the public utilities? MR. TEEL: Yes, it is. MR. TRIMBLE: What is the present rate that the consumer pays in the Anchorage area for gas? MR. TEEL: There are many rates. They're all and part of the public record. A typical rate, for instance, at 80¢ for what we call schedule 1-1, Schedule C, is about 90¢. For smaller customers the average runs upwards of a dollar, for the very smallest it probably averages around $1.50. MR. TRIMBLE: $1.50. Now, as a rate base company, are you allowed to make a certain percentage above your capital cost or something -- is this how this works? MR. TEEL: Typical of all utilities, I believe. MR. TRIMBLE: Typical of all uti1iti.es. Do you have a rate somewhere between 80¢ and $1.50? What is your current contract rate if you care to answer that you're paying for dry gas? }ffi. TEEL: I think the last annual price was 19.2¢ of the calendar year finished in 1970. MR. BURRELL: Thank you very much. Mr. Trimble has a question. Mr. Trimble, would you like to come up? MR. TRIMBI..E: I'm Joe Trimble, attorney for Mobil. Is your company a MR. TEEL: That's fine. MR. BURRELL: June 4? Close of business June 4th? MR. TEEL: Alright. MR. BURRELL: We'll hold the record of this hearing open until then inasmuch as we have requested that you submit that for evidence. MR. TEEL: I accept. -47- MR. TEEL: Yes. MR. TRIMBLE: The State has introduced an exhibit, I believe it's State Exhibit 2 which shows that this casinghead gas is worth 81¢ MCF. What would the rate t if you. can give me a number, what would you have to charge for this 80¢ rate gas if this value had any real meaning as the State has shown ? MR. TEEl.: I can't do that in my head. I don't think the gas is worth anything. MR. TRIMBLE: You don't think it's worth anything? MR. TEEL: Not so far. In the sense that you're speaking of. You have to go get it in its present quality, so we haven't been able to find a way to sell it. I assume that we could get it pretty much at zero cost. MR. TRIMBLE: If you could get it at zero cost, it might be worth something to you? MR. TRIMBLE: So, ta,king in the figure of 20¢ that you're paying for the gas in your transmission cost -- MR. TEEL: May I retract that. That's another number. I'd have to cal- culate. I don't recall the exact average, actually contract price, including the quantity and (unintelligible) is calculated. You pay 24¢ for the first 8 billion, and l6¢ for the excess over that on our main supply and the total, as I recall, is 17.3, so is then a trifle under 20¢ but not exactly 19¢. MR. TRIMBLE: While using that as a ballpark number, then taking into account your transportation cost, your distribution cost here, and the city and the administrative costst you're entitled to make a certain percentage of profit above and beyond those costs for the sale of this gas, is that correct? ) -48- get this on tape. MR. TRIMBLE: When you say just as good as oil, do you mean you would have to sell it cheaper than dry gas that you presently have available? Þffi. TEEL: Yes. MR. TEEL: Well, as I mentioned earlier, Chugach Electric is burning oil in that vicinity and felt that this gas was as good as oil. MR. BURRELL: Excuse me, could you speak up a bit? hTe would like to MR. TEEL: We hope, but we haven't been able to go from there even. MR. TRIMBLE: Have you run the economics of what it would cost to get this gas from the Granite Point Field on the west side to a market, 1f there we re a marke t? MR. TEEL: No, we have not. Not from Granite Point. MR. TRIMBLE: The only discussions that you have had then have been of the east side of the Inlet. MR. TEEL: That is correct. MR. TRIMBLE: Have you run any economics on the cost of a two-way market if there were marketing? MR. TEEL: Not in the sense of the whole stream, just that part which we could handle with existing facilities. ~. TRIMBLE: You have run an economic study then on a portion of the stream. MR. TEEL: I doubt if you could say it is an economic study. We felt like, if you could get it at essentially no cost, we might be able to adjust our system to accommodate it, and make our own money if we were able to sell it in nearby vicinities. MR. TRIMBLE: Is there a market in the nearby vicinities? ~ -49- ~t. TRIMBLE: Does it take a cheaper price compared to what they are now spending for oil? MR. TEEL: The price they are paying for oil is rather obscure because they~ in turn, trade steam for oil as I understand their contract. They supply steam out of their plant to the refinery which supplies them oil and r'm not able to accurately determine what the separation costs are. MR. TRIMBLE: Thank you. That's all I have. MR. BURRELL: Thank you, Mr. Trimble. Mr. Teel t did you at the time think the Committee's qUéstions were directed towards requiring you to pay more for casinghead gas than dry gas? MR. TEEL: No. I hope not. MR. BURRELL: They were not. I would like to point out the so-called 80¢ per BTU figure that was cited by Mr. Trimble -- 80¢ per MCF figure cited by Mr. Trimble is based solely on BTU value compared with 011. Have you any questions, Mr. Gilbreth? MR. GILBRETH: I wanted to ask one question, Mr. Tee1, in this regard. In the City of Anchorage right now, I am a single-family residential user and pay approximately $1.35 per MCF of gas. Can you tell me how many BTD' s r'm getting on an MCF of gas delivered in Anchorage? MR. TEEL: Approximately one million. MR. GILBRETH: Approximately one million, so I'm paying $1.35 a million BTU's in Anchorage for energy. MR. TEEL: Yes. MR. GILBRETH: Would not fuel oil give me approximately the same BTU's for approximately the same cost, or you being a gas man, maybe a little higher? MR. TEEL: Now, oil's gone up in the last couple of years, up nearly 10% -50- and we had some advantage before that increase. MR. GILBRETH: Alright, then, fuel oil would be a little bit higher than $1.35 per million BTU. HR. TEEL: Yes. MR. GILBRETH: That's all I have. MR. BURRELL: Does anybody else have any questions of Mr. Teel? Does anybody in the audience have any questions of Mr. Teel? Mr. Teel, we thank you very much, sir, for coming here and maybe we can excuse you from the rest of the hearing. MR. TEEL: Do I get 48¢ for this showing? (laughter) ~ffi. BURRELL: Let's take a break until 11:00 o'clock. (BREAK) MR. BURRELL: We'll reconvene this hearing at this time. I have a couple of announcements. One, if there is a Mr. Suzuki here he is supposed to call operator 55 in Fairbanks, and I have a note for him if he wants to come up and get it, it's here. Secondly, Mr. Swan has indicated that the Chakachatna Exhibit 3, is that right? Chakacha,tna Exhibit 2, the memorandum on previous conversations; he would like the record to reflect that it was submitted at our request, not voluntarily by Amoco, but again without objection by Amoco because if there was we could probably reach this thing by subpoena. I believe you would like the record to reflect that and your interest in cooperating with this Committee in expediting this hearin~. We are ready for the next witness, whoever wants to testify at this time. MR. TRIMBLE: I'm Joe Trimble, from Mobil, and this is Vance Porter. He has previously testified before the Committee and we request that you accept his qualifications. MR. BURRELL: We recognize his qualifications and his expertise is accepted. Tom, will you swear him in? MR. MARSHALL: Please raise your right hand. In the matter now at hearing, do you swear to tell the truth, the whole truth and nothing but the truth, so help you God? MR. PORTER: I do. My name is Vance B. Porter and I'm employed by Mobil Oil Corporation as Joint Interest and Gas Development Administrator of Mobil's Alaska Exploration & Producing Division located in Anchorage. Mobil is operator for State Lease #ADL 18761, which contains a southern portion of the Granite Point Field. The lease is jointly owned with Union Oil Co. of California. Testimony, including exhibits, were presented at the Gas Usage Hearing held on March 4, 1971 in Juneau. To prevent repetition and thereby shorten the proceedings I request that the -- my testimony presented on March 4 be incorporated into this hearing by record. MR. BURRELL: Without objection, Mr. Porter's March 4 testimony is incorporated into the records at this hearing. MR. PORTER: I would like to hand to the Committee a copy of Mobil's Exhibit A which was submitted in Juneau. This is merely for your reference, we've incorporated it by reference. By mid-1972 we expect to be producing a total of about 10 million cubic feet per day, of which about 3 million cubic feet will be utilized for fuel safety flares, liquid recovery or sold. Sales anticipated here are to Atlantic Richfield for use on its Spark platform and shore site. The proposed initial minimum contract quantity of sales is 800 MCF per day. They advise us that this should rise somewhat in future years. They are currently thinking gas at a rate of 200 MCF per day, at about 45 psi pressure. The daily volume -51- -52- be physically possible to inject this excess gas into shallow water bearing This, then, is the amount of gas about which we are concerned. Now, it may saleable residue gas excess to our needs comes down to 10 billion cubic feet. flared losses due to compressor down time, the total estimated volume of (3) compressor fuel; (4) shrinkage due to liquid extraction, and (5) necessary the late 1970's; (2) a probable increase in Atlantic Richfield's requirements; not be effective in handling the small daily volumes to be produced after for (1) the fact that equipment size for handling current daily volumes will feet of raw gas in excess of our need and minimum sales. Now, after allowing that from mid-'72 until the early 1980's we will have about 16 billion cubic in more detail, particularly after the economics involved. I've stated have been spoken of at previous hearings, but I would like to go into them to dispose of or otherwise utilize all or a portion of the excess gas. These zation. It is realized that .it is physically possible to undertake projects to which the gas could be put that could be considered to be benefici.al utili- and I will speak of that need later in my testimony. I know of no other use gas to fuel the electric generator belonging to the Native Village of Tyonek, this excess gas is suitable. I am, of course, aware that there is a need for try sale of gas to Atlantic Richfieldt I know of no existing market for which otherwise beneficially utilized by July 1, 1972?1I Outside of our limited indus- "Can casinghead gas be markete,d or injected into any reservoi,r or pool or the Notice of Héaring for Conservation Order No. 102. The first query was, cubic feet. I shall provide testimony on each of the three queries listed in after mid-1972 is about 16 million cubic feet -- I beg your pardon, 16 billion in the graph. The total gas, in the raw state, to be produced above our needs of gas available will decline rapidly after mid-1972, as shown by the top line -53- sands underlying the Granite Point Platform, or to inject the gas into the producing horizons, or into a well that could be drilled onshore. All three of these actions would, in my opinion, be nothing more than disposal projects, because little or none of the gas could be recovered. I stated at Juneau these projects may also present safety hazards and, in addition, injection into the producing reservoir would decrease oil recovery, thereby incurring waste. However, the cost of each disposal method has been estimated and the results were (1) disposal into water bearing sands under the platform would cost 1,700,000 to 2 million dollars; (2) disposal into the producing horizon would cost from 1,600,000 to 1,900,000 dollars plus a decrease in oil recovery; and (3) disposal onshore would cost from 2,700,000 dollars to 3,000,000 dollars, including a new well drilled for this purpose. All three disposal schemes would offer little or no return on investment and could not be considered as of any way preventing waste. Nowt it would be physically possible to move the excess 10 billion cubic feet to the Beluga Gas Field some 16 1/2 miles from the Granite Point shore site, and inject it for storage to be produced at some time in the far distant future. A project such as this would cost 2,200,000 dollars to 2,500,000 dollars. This is 22 to 25 cents per thousand cubic feet in present day money, and to break even on present day value of money basis would require that the gas be sold at several times the cost stated above. I cannot give you an exact figure because the timing of the sales is, of course, uncertain. Now if some market or means of storage could be obtained on the east side of the Cook Inlet for surplus casinghead gas, it would probably be physically possible to tie our Granite Point platform into Amoco's nearest platform for further transport to the site of utilization. -54- This would cost about 4 million dollars or 40 cents per thousand cubic feet. Cost of handling past Amoco's platform is not included in this -- this is just to Amoco's platform. I would now like to refer to the use of gas to generate electric power for the Native Village of Tyonek. It would~ of course, be possible to deliver gas to the generators located on the Moquawkie Indian Land. This would cost from one million dollars to 1,200,000 dollars. If the requirement were 1,200 MCF a day, the price per MCF of gas would have to be in the 47 - 56 cent per MCF range to just break even. This estimate considers the time value of money. Further, this would not provide a constant source of gas as it's necessary for power generation~ as the service would be interruptible when the platform or compressor is down. This has been discussed with the representative of the Native Village of Tyonek. Now, if a firm market were to become available where gas could be taken at the shore site, the entire volume of gas surplus to our needs could be delivered at about 500 psi for an investment or cost in the range of 800,000 dollars to one million dollars, or about 8 - 10 cents per thousand cubic feet. This figure does not include royalty, severance tax, or cost of money. I know of no such market, and the cost of transporting the gas from the shore site would probably preclude the development of such a market. Based on the fore- going, my answer to the first query is that I foresee no viable market for the casinghead gas other than our sale to Atlantic Richfield, and the other disposition of the gas is uneconomic and would not constitute beneficial utilization. Query No.2 in the Notice asks if waste, as defined in AS 31.05.070(11) would occur if flaring of casinghead gas continues. The answer to this query -55- is negative. All of the casinghead gas being withdrawn from the reservoir is being more than replaced by injected water, thereby preventing underground waste of hydrocarbon natural resources. The water injection program was wisely and properly authorized by the Committee under Subchapter 6 of the Oil and Gas Conservation Regulations and Statutes. The recovery of crude additional to that which would have been recovered by primary depletion means or by gas injection will timely be obtained. Flaring of the casinghead gas, surplus of fuel needs, liquid recovery requirements and the limited market does not constitute waste and it is currently approved by the Committee. One justification for the Committee's prior rulings is in Subchapter 4, Section 2159 of the Regulations which authorizes the granting of gas credit for water injection. Rules such as this are necessary because in some fields production of gas is secondary to crude production if no underground waste is occurring, and Granite Point is such a case. AS 31.05.170(11) says that waste means physical waste and sets out ni'ne specific actions to be included in the definitions. None of these nine specifics are being violated on State Lease ADt 18161. The third query was, "Hill mere waste be caused than prevented by an order restricting production of oil to a rate whereby all produced casinghead gas is beneficially utilized or is required for a safety flare?" My answer to this query is affirmative. It should be realized that it is difficult to quantify the waste that would occur; however, it is obvious that any reduction in oil rate would serve to lengthen the life of the Granite Point Field. The physical life of the wells, equipment, platform and flow lines is finite. The Cook Inlet environment is harsh. The design life of the platform was ) -56- MR. BURRELL: Thank you, Mr. Porter. How many billion MCF did you say you estimated you would be flaring in the remaining active years? MR. PORTER: 16 billion in the raw state. MR. BURRELL: 16 billion in the raw state. MR. PORTER: This is from mid-'72. MR. BURRELL: This is from your platform, the one you're talking about right now? MR. PORTER: Yes. oil reserves in jeopardy of being lost. In summary, my answer to the first two queries is negative, and to the third my answer is positive, and this concludes my testimony. for at least from 20 to 25 years and currently it is in good condition, but we have and do measure a certain amount of deterioration. We do provide cathodic protection, but it is repairable only in the summer months. Frequent recoating of exposed surfaces is provided. We have experienced and repaired casing leaks in certain of the wells. It is my opinion that any action taken to lengthen the producing life of the Granite Point Field carries the innate risk of physical waste because at some time the platform and a pertinent well and equipment will deteriorate to the point that safety considerations will force abandonment. Now, if it were ordered that oil production be reduced to a rate commensurate with gas utilization, and the platform were to become unserviceable at the time of currently forecasted abandonment, then I have estimated that some five to six million barrels of oil may be wasted amounting to about $18 million in gross lease revenue. As I stated, this sort of loss cannot be quantified at this time, but it is true that any orders that would extend the life of Granite Point Field places -57- MR. BURRELL: And I gather from your testimony that you don't think there's any future market for this gas, period? MR. PORTER: Our studies have indicated that to put the gas into a saleable condition at the shore site, under pressure, and deliver it to whatever market may become available, and I really know of no such market. We just can't compete, say with gas field gas. Beluga is the closest reserve. MR. BURRELL: Then I gather that the thrust of your testimony is that it is your opinion that, or I should say, that based on what you know now it is Mobil's intent now to flare this 16 billion cubic feet. MR. PORTER: With the Committee's approval. MR. BURRELL: Right. I mean that's Mobil's intent, based on what they know now. MR. PORTER: Yes, sir, unless some market that I can't foresee at this time becomes available to us. MR. BURRELL: And you don't think that is included in the definition of waste in AS 3l.05.170(11)? You said you didn't think it did. MR. PORTER: No. It is not currently and it is approved by the Committee. In some instances the production of gas, as I stated, is secondary to the production of oil. In remote areas such as this, this is the reason we have this order that I refer to, the regulation to recog- nize the fact that gas production, if no physical waste is occurring in the reservoir, is secondary to oil production. This is such a case. MR. BURRELL: Are there any further questions at this time? Mr. Marshall? MR. MARSHALL: Mr. Porter, did I understand you to say it would y -58- take $800,000 to bring casinghead gas from the Granite Point platform to the Granite Point shore facility? MR. PORTER: Under pressure, yes, sir. I think I made a range of $800,000 to one million. :ffi{. MARSHAI.L: What size pipeline would that entail? MR. PORTER: It would utilize -- we have a dual flow line, a duel eight inch line currently installed between the platform and the shore site, one of which is being used to transport the oil to shore and one of which is being used. to transport gas to shore. This would envision putting it through currently available lines. But in the event the oil line became unserviceable for some reason, the gas supply to shore would have to cease until it was repaired. MR. MARSHALL: Well, what physically would the $800,000 be spent on? I mean not in inventory, but if a gas line is already there, what is the $800,000 for? MR. PORTER: Just a moment, Mr. Marshall, I'll refer to my notes here -- One thousand HP gas compressor on the platform for $400,000, vapor compressor gas dehydration unit, platform piping and shore site piping, amounting to $90,OOOt for a total capital investment of $490,000. This is for the low side. Plus $25,000 per year in increased operating cost. This comes to $800,000 on a low estimate, but we realize that the price of these things can fluctuate when you get down to actual installation. }1R. MARSHALL: Yes, and what would be the delivered pressure, then, to shore facility of that gas? MR. PORTER: This anticipates 500 1bs. MR. MARSHM~L: In testimony given yesterday it was revealed that there -59- Point shore facility to the Albert Kaloa well belongs to Atlantic Richfield and you have no control over it~ it seems to me in listening to statements made yesterday from the Tyonek's and from you and from Rock Island, that there might be some conceivable way that the three of you can get some gas over to the Tyoneks, to the shore I should say. You and Arco and the sir. I think Atlantic Richfield -- they are the people who put the line in and own part of the well. MR. MARSHALL: Yes. Thank you, Mr. Porter. MR. GILBRETH: Mr. Porter, realizing that the line from the Granite is a three inch ID welded pipeline running from the Granite Point shore faci,lity to the Albert Kaloa well. Have you investigate.d any economics of injecting surplus casinghead gas into the Albert Kaloa well, and what is the condition of that well at this time? MR. PORTER: We have no interest in that well; however, it is my understanding that the well produced some volumes of gas for perhaps three weeks after it was placed on production and then watered out or sanded up. This indicates to me that the reservoir present in that well is of very lim,ited size and that I don 1 t know how much gas could be put away in it, but with the water production coming from the well, it is my estimation it would be the same as the three type disposal projects that I spoke of. We would be putting the gas in a water-bearing sand. MR. MARSHALL: I see, but the fact seems to remain that the economic studies of the productivity of the Albert Kaloa well would justify a three inch line from the well to the Granite Point shore facility. MR. PORTER: This was before the well was placed on production~ yes, ,~ Tyoneks and Rock Island. Rock Island wants to extract liquids, they can't do anything with the tail gas. You have the casinghead gas and can't do anything with it. Arco has the lines and the Tyoneks need the gas. It looks to me like a bunch of people going down their separate ways and maybe you could get together and create a market here. I understand the Tyoneks are paying a thousand dollars a day for fuel for thei.r generators. Couldn't you payout a rather sizeable investment to get rid of this gas that way? MR. PORTER: The economics of our compressing and transporting the gas to the Tyonek Village I discussed in my testimony. Now as regards to as you statedt a cooperative effort to move gas under pressure to the generating plant -- I didn't speak to that in my testimony because it was just yesterday afternoon after the hearing that I was called upon by representatives of Rock Island. This resulted in saying that we will consider such efforts. I'm sort of in the position Mr. Teel was in -- I can't dignify this session preceded and ended by a hand shake as being negotiations. MR. GIl.BRETH: Sure. HR. PORTER: But there may be something to result from this. I have no eVa1\lation of such a project, at this time, because it just occurred last night. MR. GILBRETH: I see. I believe at the hearing in Juneau -- MR. PORTER: Pardon me, sir, I also can't say that such arrangements will result in a physical movement of gas. MR. GILBRETH: Sure. I realize that. In the testimony in Juneau I think you made the statement that -- we have made contact with the Village of Tyonek and explained to them that we do have some surface gas available. Our technical people will meet with them shortly to explain to them the situa- tion. That this is with casinghead gas and equipment might be necessary to -60- make it usable to the T'yonek Vi.llage, but if this contact has been made maybe that is a typographical error. Can you tell me, have you pursued meeting with the Tyoneks or discussing with them? MR. POærER: Yes, sir, I testified this morning that we had discussed this situation existing there with -- I stated a representative of the Native Village of Tyonek, but actually it was Mr. Bartlett, and present at the meeting was a representative of the BIA, I believe. MR. BARTLETT: I sure don't recall that meeting, but I know we have had -- MR. PORTER: We sat in your office. MR. BARTLETT: Uh -- is that Mr. Peterson? MR. PORTER: Perhaps it was. MR. BARTLETT: Then it was a BIA representative. MR. GILBRETH: In other words, you have since the hearing in Juneau pursued further in the matter the possibility of selling gas to the Tyoneks. MR. PORTER: Now, this is true -- the substance of our conversation was explaining how much was available, what ~~ould be involved in making a -- it transportable to the Native Village. I think that is what Mr. Bartlett testified yesterday, that we realized it would have to be stripped, dehydrated and compressed at considerable cost to make it available to the generation plant. MR. GILBRETH: You heard the City Manager speak yesterday about a bid proposal that the City of Anchorage has out. Does your company anticipate trying to make any gas available to prospective purchaser, if it can be done? MR. PORTER: Of course. MR. GILBRETH: Are you now negotiating, actively negotiating, with anyone regarding possible sale of gas? -61- -62- MR. PORTER: No, sir, just our brief contact last evening with Rock. Island. MR. GILBRETH: Has your company made any effort to develop any dry gas reserves in the vicinity that might be used as a back-up supply to cure the interruptibility problem? MR. PORTER: NOt sir, we've had one gas well on the Moquawkie land -- the Moquawkie No.1, which became depleted and we abandoned it. Just last fall we drilled two new wildcat wells in the vicinity, both of which were dry. We feel at the current time we don't see any prospect there. MR. GILBRETH: I wonder if you could -- do you have any idea right now of what kind of an interruptibility you have in interruptible history, say, in the last year? Can you give us any idea of how interruptible it is? ~1R. PORTER: Well, we have always gotten gas to shore in sm.all quantities, with separator pressure. In other words, gas that we used on our shore site and gas that Atlantic Richfi.eld is currently t.aking comes to shore with 50 pounds separator pressure at the platform. The total volume of about one million a day arrives at the shore site at 45 pounds. We -- Well, you know the ice crises last winter when the tankers couldn't come in, fortunately we had some storage onshore where we were never forced to shut in the platform, but we did restrict production. MR. GILBRETH: Does all of your produced gas go to shore through one of the lines now? MR. PORTER: No, sir. We cannot make it all availab Ie to shore, only about one million cubic feet a day, and with modifications -- rather extensive modifications to our gas lift compressors -- we could ffiæte approxi- mately 1.8 million available at the shore, but a total investment of 800 thousand -63- MR. GILBRETH: Is this 100%? to a million dollars, as I testified, would be required to get the total volume to shore. MR. GILBRETH: I see. That -- just looking at your graph here, you are showing the present production something on the order of 10 million cubic feet a day or 9 1/2, and using about two, so installing one or moving one to shore, does this mean that you are flaring just roughly six or seven million cubic feet per day on the platform? MR. PORTER: Yes, I think that is -- MR. GILBRETH: I see. I believe you cited AS 31.05, the section with the definition dealing with waste. You are aware that one portion of that statute provides that unnecessary above-ground destruction of oil and gas constitutes waste, are you not? MR. PORTER: To which section are you referring to, sir? Oh, I think it's Section B. MR. GILBRETH: Yes, Section B, under No. 11. Hind, should there be any market or any possible sale in this, there is no question but what that will constitute waste under that paragraph, that portion of the statute. MR. PORTER: I'm not saying that we are or would refuse any markets that would be to our advantage -- I've never said that. MR. GILBRETH: I didn't -- I'm not putting words into your mouth. I just want to get out the fact, though, that the burning of gas can or cannot be defined as waste under that statute. MR. PORTER: I thought it said unnecessary or excessive surface loss of destruction of oil and gas. If there is no market, this is necessary, and excessive? þ -64- MR. GILBRETH: Let's say the line goes to West Foreland, then it would come by your property, would it not? MR. PORTER: Probably. MR. GILBRETH: And it would be possible to get into that line in all probability. Can you tell us then, your figures that you presented, what kind of a cost did you have to extract or dry up the gas up to your onshore facilities? MR. PORTER: I stated that it would take an investment or cost in the neighborhood of 800,000 to one million dollars to move our total gas to shore at 500 pounds. MR. GILBRETH: That would have it at the shore facilities? MR. PORTER: Yes. MR. PORTER: I would presume the line would go to West Foreland? MR. GILBRETH: Well, where the reserves are now. All the reserves. MR. PORTER: I don't MR. PORTER: I was going to say there is only so much -- you can't burn any more than that. So excessive, I don't know why that is used. MR. GILBRETH: The -- bids for the City of Anchorage will apparently lead to the -- to a third party, the opportunlty to bring gas on either side of the Inlet. If prospective suppliers to the City of Anchorage were to move gas from the west side of Cook Inlet to the City of Anchorage, would it not come in the close vicinity of your onshore property? MR. PORTER: I would presume that it would. It is rather -- MR. GILBRETH: Considering the gas supplies that are developed, it would almost have to, wouldn't it? -65- problems. ~ffi. GILBRETH: Sure. I realize that, and assuming that somebody could take it right at the site. MR. PORTER: I might state here, too, that our -- the gas quality that we have would not meet the specifications that were tendered yesterday by Mr. Sharp. However, I realize that he said there might be some changes possible. MR. GILBRETH: Does your company plan to attend any of the meetings where they 8.re going to discuss quality? MR. PORTER: Well, I just heard of the meeting yesterday, and I think we could make someone available. MR. GILBRETH: I just wondered if you had enough interest in it to attend the meetings to try to get the standards lowered to where you might be able to sell it. Were you present yesterday when testimony was offered for the Middle Ground Shoal reservoir? You heard the testimony, did you not, particularly that of r.lr. Giles regarding the waste that some authorities feel will occur when production is restricted or injection is restricted in a fluid injection project? HR. PORTER: Yes. MR. GILBRETH: Did you hear that? Do you agree with the conclusions that Mr. Giles reached? MR. PORTER: I understand the conclusions and, as a former reservoir engineer, I am aware of the work that went in on both sides of this, pro and Alright, I'ro sorry. I di.dn' t understand. But then this, of course, assumes that we had no line MR. GILBRETH: MR. PORTER: -66- con. I personally feel that each individual field and reservoir is a separate problem. To generalize -- you know, as to say that everywhere, in all the fields in the world. -- if you can restrict your rate of water injection and production before you lose oil, I don't think it can be generalized, but in specific instances it can. I am aware of the fact that, and we have recently experienced this problem, that when thi,s injected water gets to a well there is a tendency for the well to not produce at its former rate of production. Mr. Logan, of Shell, testified as to the theories he had -- they had -- as to why this occurred. I can't disagree with Mr. Logan's theory and I cannot disagree with Mr. Giles. I have personally no experience or have not run simulator models necessary to arrive at a definitive answer for Granite Point Field. I personally have the feeling that restriction of rate would result because in most waterfloods some of the oil 1s produced by a viscous drag which means you have got to keep that water whistling through those permeable zones or it will dry out some more. So I would be inclined to say yes as concerns Granite Point. There may be a loss of recovery if rates are restricted. MR. GILBRETH: In Granite Point, do you have the extremely high permeable streaks that you find in some of these other reservoirs where they have found losses to occur that way? ~m. PORTER: Yes, sir, the Middle Kenai Reservoir is part layered and heterogeneous. MR. GILBRETH: Isn't it true, though, that it's rather tight and there's not many permeable streaks in it? MR. PORTER: No, this is right -- now, say it's relative. We have run, from time to time, injection profiles into the wells and we do find that -67- MR. GILBRETH: You had a good thief zone! MR. PORTER: Yes, sir, and we are going to tl~ to do something about it. MR. GILBRETH: Have you had any experience since initiating your fluid inject:i.on program in Granite Point Field, whereby it's been necessary to shut in the producing wells -- for any of the producing wells -- for any appreciable period of time. Three or four days or a week, and then placed them back on production to observe the effect on production? MR. PORTER: May I consult with -- MR. GILBRETH: Feel free to do so. MR. PORTER: Yes, apparently we did shut in some wells here last winter when we were restricted in rate due to tanker shortage. These wells were not producing water and the wells came back. We have evidence that leads us to believe that if you shut in a well that was producing water, its rate of production would be severely affected. MR. GILBRETH: Is this as a result of wells that had been shut in and were producing water? You say that you have evidence. MR. PORTER: Yes, we have evidence. 1'fR. GILBRETH: You also heard Hr. Giles and Hr. Logan, I believe it was, who testified about the clay problem they have in Middle Ground Shoal. Have certain strata are taking more injection water than others in certain wells. MR. GILBRETH: Significantly higher, in the order of 50 - 100 times as much, or 3 - 4 times as much. MR. PORTER: Yes, sir, in one particular well we've noted that the current injection into that well at the ti.me the survey was taken was 4,200 barrels of water per day. 1700 of this is going into an interval of three to five feet. -68- MR. PORTER: Well, based on our experiences with this one well, I think I don't see the difference in this well and the rest of the reservoir so I will have to assume that this is a problem allover. MR. GILBRETH: Alright. In your opinion, is it necessary to keep more than one safety flare burning on a platform? MR. PORTER: Well, this would depend on the production facilities that you have, but I would answer your question, say, one on the platform and one on the shore site are necessary. ~1R. GILBRETH: I don't believe there's been any detailed testimony, and you may not be in a position to give any, about past efforts to market gas. I note in. the 120 day progress report that has previously been filed with the Committee that, I believe your company mentioned one time in the first or second report -- I don't have the information right at hand, that you were discussing a market with some other people. Have you continued, throughout the time, to do this? Are you making efforts to contact other people? MR. PORTER: Can you tell me the approximate date of the report of which that was mentioned? I might not have seen the report. zone? is an indication that this is a problem in the Middle Kenai Reservoir. MR. GILBRETH: Is it prevalent throughout the reservoir or some localized MR. PORTER: Yes, we have one well that we attempted to stimulate with some surfactant treatment and the well never did come back at any rate of production, and from work done our our field research lab in Dallas, there you found evidence of that being detrimental on your leases? ) MR. GILBRETH: As I say, I don't have it here --- I would think it would have been -- uh -- I believe in your November - December 1968 report you made the notation that you had supplied information to prospective purchasers and there is no mention made after that of any contacts or any negotiations or anything else. That was November - December 1968. MR. PORTER: It might ha.ve been.. This -- I don't personally knrn;,y who that letter referred to as being the contact, but we have supplied information on volume available versus the time, essentially the curve that I submitted in Juneau, and you see there before you to, I believe, to Rock Island and perhaps that was what was referred to there, and there have been no developments on that except a telephone -- some telephone conversations and our contact yesterday I mentioned previously. Then, too, there was a letter written from Rock Island to us concerning a telephone conversation. Now, this may be what this is referred to. There was another gentleman, perhaps a month and a half ago, called at my office and I gave him the same thing as to the volumes that would be available. MR. GILBRETH: I believe that is all I have. MR. BURRELL: Mr. Porter, in your capacity as a former reservoir engineer, in following the thesis started on by Mr. Giles yesterday in that restriction of the injection rate to the production rates will probably or possibly result in lessening the ultimate recovery -- I wonder if you could list some of the criteria which you think might affect that result, i.e. the type of injection program -- whether it is spot or line drive? How about the type of drive mechanism in the reservoir, how about the porosity and permeabilities in formations, and what are the criteria? MR. PORTER: Gravity segregation, sir. -69- -70- MR. BURRELL: Is the primary factor? MR. PORTER: This 1s one thing to be considered. MR. BURRELL: Do any of these others that I mentioned -- that I was just reaching out into the air for -- do any of these others have a bearing on it? What criteria do you think would affect the area of Mr. Giles' thesis? MR. PORTER: Moving from field to field? MR. BURRELL: Just that one, gravity segregation, or do you think of any othe rs? IYffi.. PORTER: One gravity segregation in the particular point of Granite Point unless it is so full of steam with high pressure and high volume water injection, is an indication that you wouldn't get water into a lot of these less permeable strata. MR. BURRELL: Inasmuch as there was a call in the March 4 hearing in Juneau you were in contact with the Native Village of Tyonek and inasmuch as following yesterday's date he.ar:lng, even before today' s hearing you were conta.cted by Rock Island Company, do you think that these hearings are conducive to negotiations? "MR. PORTER: Well, I have a problem of understanding why every time we have a hearing somebody comes up with a possible market, such as in Juneau the fellows in Canada had 1.7 million dollars ready to lay on the line and couldn't afford an airplane ticket to come to Juneau. I don't know why these things occur at the hearings. MR. BURRELL: I don't either. I would like your opinion. Do you think they are conducive to negotiations or not? '.\Te 've heard about t~.¡o, that is excluding the people from Calgary, as a result of the two last hearings. MR. PORTER: I've yet to see any of these rumors of possible market -71- or leases come to any definite proposal or uses. MR. BURREI.L: I understand, but do you think that the contact wi th the Native Village of Tyonek was in the rumor category and do you think that last night's contact with Rock Island was in the rumor category? HR. PORTER: That was not in the rumor category. MR. TRIMBLE: If I may speak of this, Mr. Burrell, we have affirmatively tried to seek out the Tyonek Village to sell them gas, and we do get from you, generally, statements of so-called markets with money and what have you. \ve are in the business as an oil company, as is every other company to make a profit. We aren't flaring 10 billion cubic feet of gas for the sole purpose of flaring the gas. If we could dispose of the gas, we certainly would dispose of it -- that gas. The only market that we see available is the Tyoneks. We saw a market available with Arco and we sought out those markets. The Tyonek Village is still looking into the utilization of our gas -- it's a dead issue. We sought them out, they didn't come looking to us. We have formerly sold them gas, but to say whether these hearings are conducive, I think we al,..rays get some rat coming out of the woodwork every time you have a hearing. But he usually goes back into the woodwork as soon as the hearing is over. I don't know why they appear at this time -- like the telegrams, like Rock Island. We contacted Rock Island, or they contacted us some two years ago, and we gave them the information which they sought, and yesterday afternoon they approach us again about buying some gas from us. We want to sell the gas, we don't want to make 50¢ an MCF for the gas. We would rather dispose of the gas so that we don't have to come back before this Committee every 90 days and present additional testimony of why we are flaring the gas. We would just as soon not be flaring the gas. So whether -72- Porter? MR. SMITH: This is Lonnie Smith. Mr. Porter, have you made any estimates similar to Amoco's of the effect on the oil production rate on your platform should curtailment of the utilized gas hecome reality? MR. PORTER: Yes, Mr. Smith, I have. I agree, yes, they might. Thank you. Does anyone else have any questions of Mr. MR. PORTER: MR. BURRELL: these are conducive or not, I can't say. Nothing has ever come of any realistic value. MR. BURRELL: Thank you very much, sir. I would like the record to reflect these offers did not originate from the Committee. We are not funded to offer markets for the gas. MR. TRIMBLE: I think Mr. Gilbreth, yesterday, stated that he has hundreds of people coming into your office seeking purchases of gas and why they would come to your office rather than the people who have the ' gas, I don't know. MR. BURRELL: But you can probably suspect? MR. TRIMBLE: No, no, I can't. MR. GILBRETH: If I might interject, most of them come in and tell us that the companies have been putting so many stumbling blocks in the road that there is no chance to even negotiate. There is no real reason for them to come to us first, and I don't think they should come to us at all. MR. TRIMBLE: I agree. If they had a sincere effort to purchase gas MR. BURRELL: Well, on the other side of the coin, would you concede that if they did have a sincere effort and met some of these stumbling blocks, they might come to us? If -- this is a hypothetical question. ) -73- we may still have some increase in gas production over the next half year or year. Yes, the GOR should stabilize. MR. SMITH: Okay. Thank you. It should continually decrease to approach the solution gas? Yes, we haven't seen this effect in all of our wells, so ~m. SMITH: MR. PORTER: would be on the order of 19 - 22 hundred barrels per day. NR. SMITH: I would presume that the reservoir aspects presented by Amoco of GOR performance would hold true in your end of the reservoir, is that true, gen.erally speaking, rising? Even though I understand that you are already injecting -- relatively speaking -- what is your GaR now? MR. PORTER: I think our current GOR (platform) is in the neighborhood of 1500 to 1. I will have to check this against the records, but I think the graph there shows that we are producing some 10 million, approximately, and compared to an oil production of around (indiscernable) HR. SMITH: Your GaR is still increasing then, isn't it? MR. PORTER: Our GOR at the moment is -- we've seen a slight reduction in the last two - three weeks, in total GOR. now, our current estimate from an economic limit MR. PORTER: We are currently producing 65 - 66 hundred barrels of oil per day and if such order were to go into effect in mid-'72 we would be reduced to 3,000 to 3,100 barrels per day. MR. SMITH: Relative to an economic limit to yoU!' platform, how does that stack up? MR. PORTER: Our r1R. SMITH: And what kind of rates or rate drops did you get? ~fuat producing rate do you have now? -74- HR. BURRELL: Does anybody else have any questions of Hr. Porter? Mr. Bartlett? Mr. Bartlett is the general manager of the Native Village of Tyonek. MR. BARTLETT: Very briefly, Mr. Porter, you mentioned. cost. I got a little bit confused here with the one figure of 800,000 and then I recall a figure of one million to 1.2 million for cost of pressuring the gas onshore. Did I make an error? MR. PORTER: To get the total stream to shore at 500 pounds in the range of $800,000 to one million. dollars. MR. BARTl,ETT: I see. '\/hen you calculate that or estimations of this cost -- was that based on compressing on the platform and driving the gas to shore? Or was that MR. PORTER: We would have to install a compressor, yes, sir, on the platform to get the total stream to shore. MR. BARTLETT: '.Jould there be a possibi.lity of not compressing on the platform and still getting the stream ashore? MR. PORTER: Most or not the full stream. MR. BARTLETT: Apparently what capacity -- what amount could be gotten to shore without compressing on the platform? MR. PORTER: Our current estimates are that we could move approximately three million cubic feet of gas ashore if we lowered the pressure ashore to 30 psi, without affecting our oil operations on the platform. As I understand it, you are presently selling gas to Arco? They are taking low pressure gas. They are taking low pressure gas -- that's at what pressure? MR. BARTLETT: MR. PORTER: MR. BARTLETT: -75- the platform in order to move the total gas to shore. Now, as for taking the gas that we can currently move ashore at low pressure on shore and stripping it, dehydrating it, and compressing it -- no, we haven't considered MR. PORTER: Well, we would have to place additional compressors on on shore? Would cost be that high? MR. BARTLETT: Have you looked into the possibility of compressi.ng MR. PORTER: Yes, sir. compression equipment on the platform? given here of around 800 to one million dollars that is for putting the MR. BARTLETT: I see. So let me ask you -- the figures that you have this isn't current equipment, this would be equipment after modifications. be the maximum that we could deliver with our current equipment. I think -- move about 1.8 million cubic feet of gas ashore at 250 pounds, and this would gas lift compressor, and in takeoff between compressor stages, we could we would have to make some rather extensive modifications to our current million a day to shore at about 300 pounds. In a long term arrangement pressor. But under emergen.cy conditions we could move approximately one this compressor all the time because it would no longer be a standby com- that we have a standby compressor on the rig and we wouldn't want to run MR. PORTER: Yes, sir, with modifications. Well, let me explain first shore any high pressure gas? apparatus that you have on your platforms -- of you delivering to Granite MR. BARTLETT: I see. Is there an.y possibility of -- with the present million to shore. MR. PORTER: 45 pounds currently because we are only moving about one " -76- it, though. MR. BARTLETT: Let me see if I understand correctly. Bear with me because I don't understand the engineering significance. But you can take ashore three million at 20 psi, and if you were to take that ashore at tha.t pressure and then process there, would it interfere in. any way with your oil production apparatus on the platform? MR. PORTER: No, sir, it wouldn't. We might have a space problem on our shore site in putting in the equipment, but it could probably be accommodated. MR. BARTLETT: You were talking about modification costs of around one million dollars and if you went that route would you be able within the needs that you presently have and Arca presently has, would there be a residual gas available for Tyonek? MR. PORTER: From the stream? Yes, sir. Atlantic Richfield's current need is for approximately 800 MCF a day, as make-up gas for their Spark platform -- now this will increase in the future as their produced gas becomes less and less. We ourselves require in the neighborhood of 300 MCF per day. So there would be extra gas available if it were moved ashore and if facilities were put in to clean it up and compress it. MR. BARTLETT: Now-- MR. PORTER: As Areo's needs increase, I presume that they would have to speak to this, but for sure I would presume that their need might increase up into the neighborhood of 1.2 to 1.3 million per day. MR. BARTLETT: Is there presently a contract with them so that they would have first call on that gas? MR. PORTER: We have a letter agreement which was signed in early March -77- of this year and in the ensuing time we have been negotiating a more long term contract. This has not been executed fully as yet, but what this contract envisions is us modifying our gas lift compressor and delivering to shore, gas at 250 pounds for further transport to their platform. MR. BARTLETT: With your apparatus just as it is today, is there a possibility that you could deliver pressured gas -- in other words, higher than 50 pound gas today to Tyonek, if they wanted it? MR. PORTER: Only by the use of our standby compressor. And this would be on a short period emergency basis -- we would not run that compressor full time. MR. BARTLETT: What are you delivering onshore right now? MR. PORTER: Approximately one million a day at 45 pounds. MR. BARTLETT: Let me ask again, I think I heard but you presently haven't gone through the economic analysis to see what it would cost to compress and dehydrate that gas onshore if you brought three million onshore at 20 psi. MR. PORTER: Not that we have not, but from other considerations we would presume that it would -- well, frankly, I can't answer your question. I don't believe we can run an analysis, an economic analysis because we can never envision doing this ourselves. We would much prefer that if someone wanted the gas they could install the equipment. We are not interested particularly in that, but we can supply gas. MR. BARTLETT: If you ran that three million ashore, then, there would be sufficient gas for both Arco, you and Tyonek with some residual, wouldn't that be so? MR. PORTER: No, sir, I don't believe so. At this time, I believe -- -78- oh, yeah, on a three million, yes, sir. MR. BARTLETT: Right. As I add up the figures that you gave earlier, let's say 250 pound ga.s, you could bring ashore about 1.8 million, 800,000 of which you by letter of intent have committed to Arco and 300,000 you need, which lea~e about 700,00 for Tyonek -- which wouldn't fit its needs. MR. PORTER: That is correct. MR. BARTLETT: If you went to the three million at 20 psi, then those needs of Tyonek could be satis fied if the gas could be pressured and stripped. MR. PORTER: Yes, sir, Mr. Bartlett, and I think you will recall that we discussed this in your office. This would be for a period of some five to six, possibly seven years.. A sufficient volume would be available. MR. BARTLETT: That figure that you have of the costs of moving ashore pressured gas, you use a figure of one million dollars -- does that include stripping or is that just for -- stripping and dehydration, or just for pressurization? }fit. PORTER: 'That is to provide dry deliquefied gas to shore. I think I answered this in Mr. Marshall's question -- it includes the vapor compressor gas dehydration unit and the necessary piping on the platform and shore site. MR. BARTLETT: I may not have understood that question. MR. BURRELL: Mr. Porter, I wonder if you can tell me a little bit about these compressors you have on your Granite Point platform, -- what kind they are, are they the same, are they identical? MR. PORTER: No, sir, they are different compressors. MR. BURRELL: Tell me about your one that you use regularly and then the standby. -79- basis it could supply the gas under substantially more pressure to shore. }ffi. PORTER: To shore? MR. BURRELL: Yes, sir. MR. PORTER: Yes. MR. BURRELL: What percentage of reduction, 50% -- or just roughly? MR. PORTER: No, that is close. MR. BURRELL: And, if you did put your standby compressor on a regular MR. PORTER: It will get us by in a fix, yes, sir. HR. BURRELL: I mean it will bear the burden, so to speak? J:1R. PORTER: It will be at reduced volume, of course. MR. BURRELL: But at the platform? I beg your pardon? MR. PORTER: It will keep the platform running. MR.. BURRELL: But at reduced volumes? when your regular one goes down to produce the oil? And what about your standby? It is also a reciprocating and 350 horsepower plant. And your first one is 650. 1550. 1550. And the standby, do you find that adequate MR. BURRELL: MR. PORTER: MR. BURRELL: MR. PORTER: MR. BURRELL: MR. PORTER: To supply our gas at high pressure, yes. MR. BURRELL: That is your reciprocating engine? MR. PORTER: Yes. It's a Cooper-Bessemer. I don't know what the specs are. I don't need the specs. 1650 horsepower. That's the one you use regularly. r-ffi.. PORTER: MR. BURRELL: MR. PORTER: MR. BURRELL: -80- Thank you. Is there anybody else who wishes to testify? MR. PORTER: NR. BURRELL: MR. PORTER: That is correct, Hr. Burrell. 11R. BURRELL: Thank you. I don't have any further questions. Does anybody have any questions for Hr. Porter? Hr. Porter, thank you, si r . compressor to increase the pressure that is going to shore? MR. PORTER: Yes. Þ1R.. BURRELL: In other '(<lords, you ha.ve the facilities to compress your gas going to shore. MR. PORTER: That is right, and we could do this on an emergency basis only. This is what we envision with Atlantic Richfield, if their platform goes down. We can supply them enough emergency pressure gas to get started back up again. With our standby compressor. MR. BURRELL: You say it is an emergency only, you don't want to run it on a regular basis? MR. PORTER: Correct. You can't get it tied up delivering gas under contract to someone because then it would not be a standby for us. MR. BURRELL: I understand that. In the event that it were tied up delivering gas to somebody when your regular compressor went down, you would be unable to produce your platform -- is that correct? Right. 50 pounds. Could you use, your standby pressure -- your standby MR. BURRELL: :r-ffi.. PORTER: MR.. BURRELL: MR. PORTER: No, not under substantially more pressure. 250 pounds with the Clark, but we aren't compressing it, the gas that is going ashore, today, at all. It's leaving the platform at separator pressure. -81- MR. SWAN: I have a brief closing statement, and I promise not to repeat anything I said yesterday, unless somebody has additional testimony. MR. BURRELL: Does anybody have any additional statements they wish to make? This record is open through the close of business on June 4, which would be 4:30 local time. MR. SWAN: The Commi,ttee has asked some questions here that I think should be answered and that is whether -- or one question in particular -- whether this -- these hearings tend to accomplish the purpose that we are all trying to ac,complish, that is, get the gas sold. And Hr. Gilbreth has referred to these hundreds of people who come through looking for gas. First, I wonder, Mr. Gilbreth, if you kept a record similar to the record we kept of these contacts where we could check these people out, and find out if they are bona fide prospects. ~m. GILBRETH: I think we could probably run back through our logs and see who has been in the office. MR. SWAN: We would appreciate knowing who these people are. I think the obstacle that they are talking about that we put in their way is that we let them know that they aren't going to get this gas for nothing or a price that amounts to stealing it. And I think that is the only obstacle that any company has put in their way, and I think, quite frankly, that these hearings have encouraged some of these people to feel that they are going to get the operators in a position where they can, in effect, steal their gas, and we don't like this. And I think we have negotiated -- I realize these negotiations have taken a long time and I think Mr. Teel made a good point, that a lot of this has been just discussion because we are too far apart to even get to the point of saying I think we can make a deal, let's sit down and talk the final details. There has been a time or two where we thought we were that close, and I still think we are going to get there. I think, also, we've studied these. I know Amoco, both as an individual company and in concert with our partners in the Chakachatna group, have brainstormed this problem. Some of the things we have brainstormed I would like to tell you about. You think we were making light of the problems, but you never know what comes out of these brainstorm sessions. We are still brainstorming and we may get an idea, this is another thing that leads us to have a little hope, and if we get a good idea we follow it up with studies. We have been doing it and we are going to keep on doing it, but at least speaking for An~co I know you all are getting tired of hearing us say that we a.re ready to sell it. I'm getting a little tired of these people who we never see, who say we are putting stumbling blocks in their way. I don't think we are and I'd like to talk to some of them. I'd like to see them, here, now. The gentleman we had here yesterday, I think, I don't put him in that class. These are people we have known about and we've talked to all of these, and they may be trying to get something for nothing, too, but I think we've made them realize that they won't do that, they are still willing to talk so those are possibilities. Now, I didn't repeat anything -- I said yesterday. MR. BURRELL: No, Mr. Swan, you did indicate that you felt there may be an impediment to sales to these prospective purchasers· which was the fact that they perhaps were trying to "steal" the gas. Let me ask you a question. Would you give it away rather than flare it? MR. SWAN: I think I said yesterday if we could find a purchaser who would take it on a basis that would give us back the cost of getting -82- it to him or who could come get it and himself make the expenditure -- either way it's made, we'd be willing to make the expenditure to get it there. I think, like Mr. Trimble said, we're -- we'd like to get this problem solved and if that's the solution that would be satisfactory to the State, as Mr. Giles said, "7e not onlY'vould consider it, r think we could recommend to you that you agree that this was the proper thing to do. Now, not to you, to the Departme,nt of Natural Resources in its other capacities. This to me would not be waste, because if you're getting back what it takes to get it utilized, then it's no longer waste. But, I think that we would have to have some reasonable assurance that this prospective purchaser is not going to push us into the position that we made a substan- tial expenditure. We're talking about millions of dollars, that we've made a substantial expenditure and then he goes off and leaves us high and dry. I think it has to be a real offer and we wouldn't come to you with anything e.lse but what we thought was a real offer. MR. BURRELL: It would be fair then for the record to reflect that, speaking for Amoco at least, that you would not insist -- would not require any profit whatsoever for the utilization of this gas, but merely your cost in delivering it. MR. SWAN: We'd like to have, and I don't think we could ask for a guarantee but at least a reasonable assurance that we get our cost back. Of course, I think if we have that reasonable assurance of getting our cost back, we have a chance, we might make some money. This is what we still keep working. MR. BURRELL: I wonder if that aspect of working on it might not be the impedimen t . MR. SWAN: I don't think so. I think it's the other way around. I -83- -84- think they wa.nt to take our gas production at a loss. They want to make us pay them for disposing of our property. MR. BURRELL: I don't have any further questions. Does anybody have any questions, or would anybody like to make a statement or testify? If not, we'll adjourn. , Ò ._~....__Ef I t .c +' c I .ct.. - .,-.~-'''''''''''':''''''':'''''~''~'''. -..-"'--...,... ACCEPTED Date. )/J.~/C¡$ ALASKA OIL and G'~~I!1 CONSERVATiÜN ~.'¡rl-"'·"!ï.:'E '..'" j i", CALCULATED VALUE OF GAS FLARED Co...,,~e'C.. EXHIB: 2- C.O. FILE ~ J9~ j _.J GRANITE POINT OIL FìELD Cook Inlet, Alaska ..:::---.=:.:... ":",...,~-~~....,.....,,,,:,,,,,,,,,-,,,~,,,,,,::;:,,,,,,,,,,,,,,..,_,_,,_, - - ~asis: Heat Content Heat Value of Gas - BTU/CF 1,389 Heat Value of Oil - BTU/Bb1. 5,763,549 Volun1e (CF) Gas Equal to One Bbl. Crude (Heat Basis) 4,149 Current Gas Flared - MCF/D (March 1971) 14,684 Heat Value of Gas Flared - Billion BTU/n 20.396 Oil BTU Equivalent to Gas Flared - Bbl./D 3,539 Average Price of Oil - $/Bb1. (March 1971)* $3.255 Dollar Value of Gas Flared - $/D (March 1971) $11,519 Future Future Estimated Total Gas to be Flared - MMCF ** 34,550 Oil BTU Equivalent to Future Gas to be Flared - Bbl. 8,327,308 Dollar Value of Future Gas to be Flared $27,105,388 * Field Crude Oil Posting at Pipeline Connection as of 3/31/71. ** Gas Volumes from Operators' Exhibits submitted for Conservation File No. 100 on March 4, 1971. I te ""t I~ \ J'a u ,~ '0 X '0 TO 1h INCH 046 1323 n+.e::; 7 X 10 INCHES "'''DIE I. U...Ao . KEUFFEL . ESSER CO. /!"0-~. ~~~~J ;--. . -, .... ~ l··..: 1 - _~-.-J ._~~ G~ ALASKA PI P ELlNE COMPANY ANNUAL GAS SALES HISTORY, 8 FORECAST Ii ¡ Iii II" 11,1 1,1 "lli II' Ii "I' ¡ I II II ! Ii ii! Iii I ! II I I I I II II I ! I III ! ii " I/Y"" /' .;; --. ~ - ~'- ~ --) .~. ( : ; \ '.'; 70 I II I : II'I'! I ¡ I' I! i ¡ ¡ I "! I I I ! I I I ,I : i II I 0~1 i!!, ~1'- Ii) I :¡, w. . () ,," -: 2~ J:', ¡ II"'-- '" ,-= r:' ... - ~. . J\" ~, ¡;..¡ ~ ~ ;- ~~ ~ ~ ~ )( ~J f:j. __ ~ ~I ~'r.:r ~) -. rf1 '. -' ,r) "(J I \ ;,~ .~ ~~ liL J\ ., <V'ç' ...... .." ~ .¡;~; rì~ ':;f... . \ ~ J,' :rV ~ : 1 I \" ! ,. ,J t!~ ¡i S-" j ; : \ \ 1 ¡ I, I .J ':--. ~'··ht "~kl~j~~-~ . 'j ¡ I I"~ I ¡ii I Ii! / I:' /' il; / I!¡ I:: V , I:!. . / í , II !:II ~r IW I p".! II:: I , 1 lal! !::! Ii" ) " ,,:, '!L- I JJ ¡ !TIr DlJllL 1 i. I!'! I ! t j ! i I , ',! '.' ¡ ! I. Ii II Ii' i /', ¡ i, I' " ¡ ¡+tttt. ; I'. ii' I !I! ill-4+- 1,li,I!lil! tî~I-m~tìr'll !:¡I I I olll III III III!. I ill I v 10 f.O f'- Q') ø 0 - C\I ~ to W tOW <D............. 601 - : I -. - - ·11 .~. ;þ II II I ,! :' ! I 50 ú.. (,) ::E ~ :!: I 4() C/) !¡! LaJ ,.. ..J ~\. ~ ¡&"\ C/)C.j C/) ~ 30: .J i <{ ·1' ::J :. Z 1.11 I I Z --+-W- ! ~ 20 1!1 I ~ I! I I! ¡ !! ¡ 1'1 II . I I I I ! II I I' !II II I ¡ I - ..J\ I / I ./,¡I þ. I / ~/ I 1/1 I / / / II / / ¡I; I , II I I I /' i / I I J' ,;' I II ! I .~ .---- .. ~. .....~J Î I I i I ! Î ¡¡I I! ¡ ¡ I I II I, I . I ' I II . I I I !! I II ! II II I I I i I t¡¡ II I I I ,I 11.1, ~ f'- Q') m 0 ~ C\I ~ ~ 10 ~ ..... ..... ..... Q') - Q') Q') Q') Q') - - I' ·1 I I ! i ! I ¡ I I i I II I ¡ I ¡II I i III <D ..... cD m Q') co co C8 ¡Ii ii, ¡ II .11 ! i I I Ii I I I I Ii o en - I I I ¡ I II i I I ,I ¡Ii /I II ill' ! III II I II ~ rt Je RANITE POINT PLATFORMS ANNA 8 BRUCE fOO,OOOí-:-~---~ ,.- I r-' ,.'---~-- ,--- I I -'-..,- , " -1 'T- -,---¡--- T- 1-- I ----~---- , . I: , .' ~___~__p ..:---'----t:--~-~..-L~~--;,:---..--:--..- __ _J1______ ___ J---- -]L-:. .-~ -.~-j--_ ___1_ -~___L. __~_j~__..__'___~___ : __._ ---t-- ._. __L_ ~___ _____j_ .-+_L_~__L_~--~- L.~ ' , , : :: ¡;':'! : . I:: I·, ' ! ! : I' i· : l. I ¡ :,. I :, 'i!" ~: --:.--- --- "r-- -~-: ----;~-:---~-r-·~~J-·'-~---i-·-·-·+~---f--~~·-;--·--· .--..;.-. ------1 : ---,.-+-.-..---.+---~ --'+--:--"!-- . i .------'- --- - 1-- --:-- -¡--.-'--.-! '---C'- .-+ ~'~---r----- ~ - - --. -, --;-~-: ----: ---~-- -t----- -1-- : - -- -- - '1- ....:- ---.-- ..., .. , . , : 'I ."." , " I I 'I ,I I I' I" ¡ I I - - L._;.. u~u;~u-_~~~I- ;~~~~.~ ui~ n_'m~jl:::='u~ -...mJnuII i~:~ JJ=_:~:jl·.=.T:n~1~~~~..·1· ~- -.... -.... h:::-.:.]~=~.:u.. .. .11···_u_·_~=rt~:~~_ ·:¡·::I:~_~-: -- . .·~i~_n'_·n I ' I : I , 1 ¡ '~':: I : , 'I 'I, I f I " ! 5 0,000'-+ '-T..ltIJj-~LI]-' .-.I-·-,--t=~n_¡:U :,-~~.... tLi·~~im=T-_~~T·¡TI~t"u ~u·~t~un~_[t__j~.n~-1.TLf1~~· . ¡ ~. l~<:}; , Iii , I l I j' I, ' I I j , I " I ,,' , f : I ,·1 I I" I I I I I: ;. ! .., , ! I I I I: j ¡ \ I :,' , : I ,·-1, 'I I. ····...1.-·""-·····1 '...-.., -. -...--I.....-......'.!.-.-- -··-¡...·r-·' , '-, "'.",- "·'."'·''''--''"1,-''-'''1'' .. .. I· ·1' .... ....... ..... , ... -1 t ' , ' I 1 I :, I , " 'J" :: i ,I , , 'I .: I':" ,- -.- -' , .. ,... :-':-- --- -. m~-T:~--I I . 'I I ' " ," I' " " .: I! ,I 1"1' , " "i i,: ..-. ;__1_+ +-hL l·u..j.i.Lu-, . ,nL_tuu'~-.~u-u.l+.c. H-i·i" [--L-'-:'--h--+-c---h:- +~--,;-++.- i I 1 1 i I I , " '. 'I'" I . I I 'I'" i ¡ I: 1 ' !.,i-.-: '._..i_;. '''n. _;_: . I. . . ,_ ..: I _' . . .. :. .' . ¡. : 'i '.': ; ". . I,' , I- : : I I," -,.." ·t·'--·-·'-~I"··'-····'··'I···--.·.l-._I"'-'I--T."- '~'!'II I"",'·' " . 'I " " 'I ': I' 'I :., , I I ' I, I ! .' 1: " i , ' I I I ,I: ,, ·1':, I. I , I J I 'I ! I· I,!· .:' , . I .~~,º-f.J~.-.T--: t--·j··-·..-.L.... ;.--. . - n,' ---- <---- --'-1' --- ----. ~..J._.__ - ---t- .~ -___ _____,: - - ...'....._¡:__..:, __._J .':'.;.._.,..,_:_~.__.___.,:...~_ _.: _.! i:. .. . ~: :..1 " I. '. +1, .,! i; i :. 'I Ii'" I I I' I I :. :- 1- .'~ ,-- T' -.~. ne- ----I --.-. T-;-'-r"'" '--1---:-', , : I' I I' I' I I I "" I I' : I ':: '.,,; I ,'I I: I : i , : ¡ : , : ':' Ii· ' ·1." i I '! I 'I' I I I.: ' j' I :, I i 'I :, I, ' I ': I ,', . : ¡ . i : .1 : , i !; i ,.: I , '! I.. 'I. i - ---- ~ - j r .1. I -',t'·--..·,!···, -.".---.-,-,~L~··~-t'-···_··· :.! ¡ ..".-....:. 1'-·'-"'11-- '.,.. ·,··..il, --. .1' 1...1. ~.... .,:..,! i.,.. .11··: .!.. ¡ I " . ¡ . , i, , I ¡ I ' .. ¡ .... -, .... . ,. ¡"~--:-'T-' .. '-:1 --- I, "I'~' I 1'11':11 I'll"': 'If.I...¡1 ! '1,1','::,1".." I I I I I I, Iii I ' I' : I' I' : : ' , I' o¡ 'II I I I hi ' 'l. I I I " I I I I I I I I ' , , " , i ,I ! )k 1-, I.' , ..i.' I :"" 'I' .11 :I·I·,, I : I I I ,) I I ,[ I I' --r-!" TT --! - -++ _ -J. ii, 1 I BOP D : - I ,I I: l i' 'I 'I, ,...1', , I I m, I' _ ~ ..-I - I' I i I I : -.. -:-'- _ -+- ,I : I I I' II I I I 1 I : : 1 I I I I I -- I 'I : , I , I I -r-- I ,I , I I I I '. I ' I . , I" 1 I I;-t- I' 01000 '¡--;T- --' -- ---- :-..1-- ...1 --oJ-I--] -I ,~". u -L. -..j~: - ,r + --i _,,_-1 . L ." --+--1--- - ~,-t. -.- . -j --1--,-. _un, -:__:L"",-+-I_>_._-¡ u i--- '~ l' i' 1 I· L, ,. I 1,1 I, I I '~I l "- I: 1" : i I l 'I i' I 'i I I I ' ! I I I " I I ./ I I I I I I I . I I ,--- J-.----~._--,--.:T- -"I-~I '-I---~7~--o.l-I-I·-,-_-·t >r--:-;·-~~_·~-;-, ------- ~- }Sf:----:-----;-¡-.- +I--'r-;--~-"II----r!----',-~r--I ;--;----. ~ï----~I-·--~-Î-·-~---IT- ,~ - --r Þ 1,1, II I J . ¡ R 1 , ' j , "I It 'I j ¡-- ----1- -t"--- ........1-.--·-'1 ~ .j. h___...ø_ -"'T"I·---I--_____.~._I"'"~-.....-J_-----~.f'"6-~.--..... -_._~ -or- ·--.,.-.......··--1···- -1--j-. _.~..._-- ---..- ...l,..___)_. .¡-_.--~---.__..- --f-- .;____ !..._.... _J_ , 'I I' I t I I' I 1 ,. , I I ' , I' I I I I ' I. j I '.,." . I , . I :' , .. ' .. ' I I . I I'" I II I 'I"" I .. " I , :' ,.~, " , ."" 1 I ' I ' ',I , I I " I -i~.' .-~.-_....:.;...: \' ~ . \"J..,-~~-rl':'':'''~~-l____-+-- --. _1- L--: ----'...;..--..-. --. ,--.- . ---~ -~ -- .__ ~ - _. .__ - ~_.J __"" __ 1.- :. .-'---- ___ _. J __: _...._ __ ¡ ! ... ¡ ';:. 1 . \¡ip! : . ¡:: ,:. I ,I .. I;. ' I I' ¡ i Ii: ! 1 -- - , I I I : I I .uL~_~_·rl·j__:_J__,1J___!·)!·_ln__~._ !..- J .~_:,______L,.. -J ·-~---:l--L--·-I---i-~-~ --L--r-'~ l~_~__.__~_.___ --~L--L ~ li=_~ - - ~ ---~---:-~-·-+--·I--- f~-- _:__...1__ :. : I . : i ..; .. If:' · : , : : I I ! ' I : I I 'I,:! I - I I I : 1 I ,1 -;..... -'-:'1· ;":!--;-- '-r+1-:-;! : ~. 'I" ,,, 'I'. ! '. .--- T- Ii' I . , :" -- -1 . I : . ,,-' : i J - , 1- - i " .. : - - ' .. ,- - . I - I . 'I' I' I I I I ' , , 'I I I I I , I 5 .0OOo;~ -or, ·:--f_L~r-::'-",-,-".j.,-:"-.t,-~-:l-'-~-'_~'L- -,..!--_.""~..--' "'¡-...+---. - i--·-· ___J "- . --T -- ~----J -. ,- --r - --- - . T --., - -~"-- -.---.... -. i .-- '-----t-- -- - L. .- I. ,- ,---- -----: ----.;- . .-- -, - _.1.._ ~..~--- __1_ -.-1-:'. I' , .. ,., , I' I'" , ' I' I. " , I, I I I 1 "I I I I : ,I I -~-\--¡-:-,.¡:;-L-~_~-¡n::r::t' ~-' -~ f----i-~-" L- Lnn I: ' -, I. I·· j ¡ ..! I: i ,I . I : -:-1, : ; " ,. .." r I' . I: ·1' ·1 I;' I I· I I 'I I I I , I I' " I ...., J__L:.L:..., ',: :L...;~....~_~_._._L"___I'·___~_·_+_"':__~_·· _-L-..I--_.---+ - ¡--.~..-- - -~-'---t- -r-------T---rl - ;---. ·_'-'---1- -.-~..--- ....----" -j...--- -- -- ._;_""__L_____~_" -__.1_._---¡1 -.+.- I¡ I II I !' I I· I', . i : : i f I I' I I I ' ! ,I I, :' i " I : , . :" ; I ' : : ' I, I I I ' I I I I' I I I I, " ' I, I I _ I I " , .. I . I, ',' I' , I I I I I I I I -....r·:-f-··--·-_L- i'-i-- 1-,.·,·-·1..... .. ". !'-...+ .,.1... - 1- ,. _I .: - --I r -, - -- ,- , -, .I¡---.rl_- i - '¡ - -1/ ¡-I ' :1::1': ",!, 'I': :,' , I 'I' i :', , , I, j ' I'~' ..: ",., I I' :' ,,', , I 'i I I I I I 'I' , I' ,I I " I I ' I' I' I'" , I· , - , ,I ", I I . ~~~i---:,-~·..:.·¡· . ': L. ,·:.!.L__~ 1+,. J..!..:-~ .-.'---.--)--- ·-:-----t·------ ~- - -:-~ -~ - .--.- - -- -j--·-f--------l .-~J-- 1_-.- --·--tl---- ~-- ----- .-- -L..J-- L_..~___ t__._ --- ).__I_.L.è_~ -~l~ -~1--¡>1' I : 'I ' .'. ¡ I I' I \ I . I I: I, ' I 'I 'I, ' ,I i I I I I 'I! I I I < r.: I : \ ,. ,,:: , 'I , : ' : I '" I ' I 'I I I I I, \, -I I I " : ;,. ' : I I :,' : I 'I I: I I I I' 'I 'I 'I 1 ,', ':: ' I I , I __~_¡_~...:J__:.: ,i: _____ '._ _ ___ __.' _' ,. I I . I I. :.... ... .,. ..1 . 1 I' ;: I.: : ,. i :.. .:. . 11, ' ~. :. ~ : . I I I , I I I I, ., I , I I I' ,- - I . . I :...1., .. ¡ 1_ ..' '. ~. ··--:\:-:-1---: ··,,:1 '.-r--I.C,-Ç:,EP. . ,",' I·," !, I : ' I : I· I, I ' 'I I I I 'I ; , I I , .. II: ii, I '.j:' \ I 'I"!: " II"'I' I ' 'I" I 'I I ' , I : 1'1 " ,I;, b .;: : I: I II ¡¡I'. :. :. 1 " : ¡ I : ii" ~" " : I ¡ I '. ~ . I; I . i' ¡ . I .1 f, ··1"'. I, ", ·1' ·1 " , 'I I I ';. I ' I " 'I I I ¡' I I I' , ".' ,; I' I I : , . ", i " -. . I I I J ' " ~' . . ' " , ¡" , . . I I ~ I I I ~ I ' . . I , , ' "Qri-.... -;--.- 'I I' " '.;'.'--'--''''1'J.-rf-·r·-r, ,.+-.-...-r"'."-'I'---'-:'--- . -.¡...-; .--¡------- -r-----..+-'''·-t-----T''~----- ->.-- j--.-,......-'-.-.-4-.- '.--I-,__L-~I·--"1 ------!,...""1-..,;..:~~. ·æ' --" -!S~'·Ä-þ1· .' 20 '1'·'1 'II" '1'[ '-1-··· I ''''I'' '" 1 1 ' I ' I, . .,.: ~ ·Ä ' I· f, "·1'· ; ,: " ".., :.., "".. : " I' I I I, I I' I ' ; ! : 1 " I .,.' ..." "f·, - ,".. I, I ' 'j I. I I " .. I.. I' , I I I I I I I I I I I I I I " .: I" ,I ~ t:,' ,.1 " 'I l' I _I· . 'i,1 '. I , ',' ·1· , I .." I " I. ] I " II I' I I : . . I I ':, I. " C· . b:~·.RVlI.trlf'1"1:~', ,. ii' .!.. ,I :I! ,I I :-, .: . ··1 . , : ' I ..' . I I '. I': I . I ,. t, I ,I i . Q :~ f' ·t;\I: !,,!,i, I: ,[",' i ,,' " "I I,.,." I" " ,I I I'" I, ! Ii': ,. I' , ' 1 i ~ _11 :II·;¡,. :1., 'i,ll, ,'It!I.,! :,.1., ' 'i 1 "I 1'1 I' 'I I ',:. ,'I' ~...,., -. ,.. ': ¡ 1'1 I :' " ", '.' ,,' "I" , " , ' , ' I' i I' , ' , , 1 "'.-..1·-7-,-'·;.-·-.1-+.'+1'"',-'-.--'.-';'i'~ ·1,,-.-1 ,- ....,t_-,~,:.-;J~-I-I-:--,T.:..· .j f--¡--T-r;"- -~- ¡-"1-:, ; "..-.. :'·[·'--"·'·1"· _ ,.'" :-~.:,---..,-I....- .. r",-,:.IIt;;~C'4'''t.E-X' ¡'" "I ' '''' ',I I I' 11,1" , "., I I .,' , " ..' ï ' I \.:..'1--~ ~ , ~ ¡·f j'i" 1,1: "~,I .. ., ' I' I:, II : I 'I', i' 1.;'1'; I 1'1; I,' MMCFD ¡I' ,II . ,I I I Iii [ I 'I "I, 'I" I" , " I , II, ... i· . I' ,: !, , I,. U'M' I, ' I' "I ", I', '.'1 'I " ~'I ,"! I'! I , I ,.. .: ~~·I···· I I . , , I I I i, ;. I : "I 1 ì I . 111'\ : ~lL" , , , GAS " " ," ~I " .....,.. I ,', , , , ...., rl - 1f :' j I ; ¡ :-1· . I ; I .,.", ~ A 't' ." I, I !. I' I ¡ I ., : : ~ I· :)1 C I ~ ¡ I 'I' ' :1 I'" .! ., ' ¡ '~~ . '"-!--... ':, ':. ,I' I'·,' "I" I ,'I, I' , " ¡ , I I . I t, I· ¡. , I,,! I I ' :' , . I '. , I ··f " I j , I: I I I: ' ¡ I' , ,11 , i Ii ¡ ; i·· ;' !; ,'i' ' ;: ; i; .. ~ : : ¡ : :'" 1 , 1 : 1't-~:-- ,I; ,¡ i: ¡ ;! T: 'i! !: I : ' I I': : I : I .! Ii:' I : I : I :i ¡ i ' , 000. ,II) [, II I ili~.LJ.. _u~ _~_.l t II~ I.~ ,.1, _114-> I, II.~.~!, I 1 , J.. 10 ô ex: ~ b:: () i ~ f.L (j Ii ;! tï: ,; L.; l' ~ t;: ö ,.,: ~ t Ó a: ~ b:: (; a:: ~ t;: () i ~ t ô ~ t;: ó t ü [I: ~ t ó ~ uJ ::;: :5 UI ,.oJ -;;, :5 uJ ll.l ~~ :) uJ uJ 3 ~ :5 uJ lJJ ::: ::5 uJ (1.1 :~ :) uJ lJJ <~ :.5 L1.I lU ::: :3 w L1.I :5 l1l WI L1.I uJ -:( :;¡ uJ L1.I :;¡ o ¿ --" (f) 0 ~ -...., (/') W ? -) U) u .").. -.., c.t') Q ~, '") (j) D ..>:: ~., U) 0 ~ '-') U) 0 .... --¡ (fJ C -") (J) a u) C ? ...., C/) Q Þ"") I 9671 - 68 I ~;---I __7 97 5 -I-;~-I --., 7 -.--[ ï 8 ·-¡···---~;--l 80 ! _~-'8 I 82 r 83 2.000 GOR ,000 --I--. I --~> '~-"-'.'-.--..,. , , ~.,...-- : .. ¡ . ! -~~ I ; -'1 ' ! ' ' -- I I -I ¡ 985 -1'- '!-- I --'··-'"T- , I 84 -- -.:) WI o .--.--.-- 74 -----,..------- I r--;- ! -'~-~~1~ ¡ :___.....:____._1__ ___"':-1__:-. I I ,- ¡ ---- i 73 : I I I ·'0 I I 1--- 72 ~ ~. 7 I i o o o :t: oJ, ., I' :..J o o $ c: o Z L\ Z o <. '" 6 In X W a o u I; o Q. "- ~ u "- II: Õ :.:: u o 1- U1 ~ Mffi fG) 0.. ~~~ (; f , ~ ©g ~ z ~ ~j II: o ¡: -<: II: VI W .J U >- U r u z '." <: '" x (/J r I- z o I >- ID VI 0: <; W ~ >- ~. Z bJ ~ t-- "<t o Z GRANITE POINT OIL FIELD Cook Inlet, Alaska OIL AND GAS PRODUCTION, APRIL 1967 THRU MARCH 1971 Oil Gas Estimated Value Based on Cumulative Production Payments for Royalty Oil Produced Utilized Flared lj~ Pool (Thousand Bbls.) . (Thousand Dollars) (MCF) (MCF) (%) (MCF) (~) Middle Kenai 38,359 $114,206 35,520,275 3,151,142 8.9 32,369,133 91.1 ~ - f ~ (-t o ç.F ; (e f, / e. ACCEPTED ' Date ¥l. 'I t(1 ALASKA OIL and GAS ~, CONSERVATION COMM~TTEE CotJ(~ ff..e. EXHIBIT~ / ,--:, C.O. FILE */fJb-- t I 1 '1 P ~o--__.--.. . .. -_·""·_"",",'·""'__""'__~~""______oÞ':'" #3 '--- ~~ ..~.- co ?;¡rr'l'T 21: (();'~SER_~'7¡\~r L 0:-1 ~; ';0.'7' r.,'" ¿.....l.1 v.....J OIT ~,'.' ~ r:'é" ß. ¿,J...:l.,;v.....:. ~ Con:;:e~·vgi;10n r:tlc. N{ì.. 105 Middle Gro~TI¿ Shoal Piûld }:~{;S "ittl ~ ~f}}.f ~ liCit i rID';, tIE '¡p'; ~ ~~¡:¡J ~'l;.'I Cìil Pöols CQ~80~~~:~ian r:13 }!D~ 102 G~znitø P~int Fiold Hic1dle Kenai. Oil C()i:1Z~~\lD.tivn ALASKA :;TATI: 01~ "O(io1 .~ 103 If UD Pool Ie' loti 11ile K'J Tr2ding B&y Field Hiëd10 Kcm3.i tiE n , £1å ifEif Oil P'Jole H:~Jlcek Oil Pool BGH till Oil Po~)l tl.emlcck ¡~E Oil P-Qol Con9~lvaCion Fila NV4 H2i\.rthuY.' Rivor Field Hiddle Kó'~n,zd fiG'! Oil Ueml~k Oil Pocl U~t Foreland Oil ) ) ) 't, ) , , J ) ) } } ) ) ) ) ALAS';::.A OIL J:11E 017 l':OT! eN 'j:'lill ~,~ ~....... tv C0?1:'lrJ.'7EE CO}JS~RVATIC:-7 c¡'S }~~ :D ~..G8-U¡:¡\1e~ c:::)s..1 3 :7, {~ri ~ to ii -¡:: a -c i 11 ~_~ r. " .. hGld t\ce of g~G ~1le of ;~1 o~dcr ~ffect1~~ c!."'~da oil ¿~o¿uc1~Z crcr~tiono in ~rtain Cook thz t'anUilt (if Inlet 0:11 ficld~ az !ìl-:-C~Íjüc.cd 1'001 SUBPOENA D.U'..E TE!r',¡,. TO Lou'S.Gac .I. C1'l~.bara of tho Z Côuneil cœ·:u:.::m::D to $.¿pe;~t' in trLO City f. '1~'! -,""- ....~. YOU and 21 2SjI '-I.:'\:; 25 ~_n ....... Al~.$kß)o Aücl1orzz:e~ Street A....~.:nuü l'..nd 11y 5th Y..ib rt;,::y ) the t'fjÎcron.cød as ~Jv¡n."~afta't· $0 long ~nd ~-" "ì.. " t\Q at 9:00 o9cloe1: 1971 ,,,p:> ¿.. 'J ) in Ali'wka of th~ Stntø of bc1:H~Œf Chl to tnstify r:.:::.y 'be ccnti:n\.'icd;) 1~ 2; ~ ¡.-1..Ð.:;:} GAS CONSERVATION !1:::l::-1r¡B~ ;J h~ _"' ~<!- COHHI'l'TEr:: lùm ny.~k,,4~ }1(tt¡¡cr 1..9 E~1:"t"G1J. C"ne.ix!$n I~R..1I.. OI1~ ... .. ..... ... u.o .,.. ..... ... NtIiI ... .. ... ..... _ .. __ .... .....-.............- - ~ - - - ~ - - - - ~ ~ ~ - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~. ~ ~ ~ ~ ~ ~ ~ ~ ~ - ~ ~ ~ ~ (j¡'i ðubpQena tmnRi:¿'2d the 8f;¡ l-v~d ~h~t I ~.: tUl"i1 h2rclJy .. .. to thereof ,...,"'.....oy dc;liwri'ð.g ;1 copy -rE t 1- -¥ "'.- ~--.... ]) AL;-s the <\ m1a ~ttendLraeð t~~ f~a fer even day~g ¡1~ to -~'t i ~¡; ?) ~ ~... t .... ~- u,/ .........~"" .--i .......:..-....... ! 1:: L: /Vii - 2.:f¡ ~~¿,....-,. ",~.,J, (\ pï ::' '~_-""'''''' .:: -.. .-:- ... ...:-.... c¡-? r¡.... "....._~,. -""'\ r ~ . U ...i."............... ..." _,.... __, C' --...,.~,..",.. <: r7.ç-() vC.... Ÿ ....'-"--'WI' v____-'.,~:__--- - A ---/ C(' '9 To'èD.J. ~ ('. i~ all Courta. øQ :"__~"1JI'. I R~l~~ governing ~~e ~¿ffiiuistration of ~..¿;.~~;ø the c~-:b.:d oy . , J"~ J. .......... -~_ ~·F···\ ::l.lc ,...~ ~ { /1:.1 f-, :r t~ ~ - D,/Œ7:D ~. ~')- ¡~: :l. c e r;::: ~ \t.~ 1 C ,:; rJ:l. CC3 "':0 td ~...., ~"'-'.:;:' á.i" ....;.. ~~.¡.) A~ : V /t:i. Z; 1,7C2:-; L£-..? '" ~7;;' ,! . r-o ..... --- /, '7.~ $ -,!¡,' r-x '¡+~ \tA ~ 2(1_ /.7:7 / Rules govêrr~8 the as~rti3tration of all 1~~I!:{f~~e ~~.J.~c.:.r;e ?~csc::ibe¿ by t.he Courts f..::":-¡ '/ÝN~ ~ 2.:c.a by tC'D.d~¡:-L-¡g to him the fee for each r-AT"1t v.c.J.;¡ s attendance and the e_81{~fç; -7:1::. "þy dßlive~lng a copy thereof to i. he ¡:'.::b y return thz.t. I served t.he ennez~d ßubpoena en ~ - - - - - ~ - ~ ~ ~ - ~ - ~ - - ~ ~ ~ ~ ~ - ~ - - ~ ~ ~ ~ ~ - ~ ~ ~ - - ~ n1_.~_r::Ç¿L~cçc> HOille~ L. Burrell . Chai l'O"ffi.:'1U J;LAffiZA. OIL .li~ID CULS COiiSEIrv ATION CO}~iITTEE t:-1.=~:JQ h -3 ;~r it1.;;O 1:0 ['.r~.!! ~s ...1 :;y 'be continued., to t.~'l$t:tfy on 'behalf of b'L¡e State of Alaska in 23, 19710 t:Z 9 C0 v cleek A M~ ; and so leng b~erc8it~r ~e the xcf¡3renced L i ~ ~\J~::Y , 5th AV2;:~UC. éS:"'~d ~M Street :; Anchor3gc Ii Ala3ka~ on Y~y 25 26. 27 and YCJ !:.:rc~ C0:':·11~·;J ¡::D to ;:.ppe¡:z.r in the City Ccrm"lcil Cha:;¡bers of tht: z J LOi,W~H1C r-'I,-1 ....... r.·~1n! ~') ~ ~þ.''''~'''~~ ...._........L~..I.... StmPOENA COí1aervô.tion Ncl.:rthur River Field 1!l:ldàle ~:(Zt.1~1. 'tG1T Oil Hemlock 011 Pool W~st Foreland Oil Pool }'col cr....:f'''J. 'l- ~...,¡.,.. Inlet oi2 fi'J;lds Pi.O¿ucinz G~8~~tio~1S in cartain prcèuc:.;d ;:¡jJ the result of crude oil oi: £i.1 Qr¿,~~ ..-" D.f Zcc¡:i:¡g ^",., ~ ~....... use. of gD5 . .... "'! &.lc..-,--..:~ ~"~2. ..:l 0'1 ...~. 71IE 'j .J.~,," ~~ ~""'Jo¿; CGl'·~~;:sr\.\,1 i:..7:::C~~': l-lOTIO}! to c()~ì.31.dQr is(.n]£mc~ CC}:-::ir¡TJZE ~~- v!...) ... ) " I ~, j 1 ¡ " ) ) ) .. ¡ ) ) ) ) ) ) 104 NE Oil ReQloc1¿ ~ili EC"£;11o-ck , ,..-.1 '.,;)1 Hiddle ¿111~1 'I: 'D' o (~'il~Ct4vati0:J. :/ilc Point CZ4ttite H:1.ddle K0IWi c Con.sc r\7f.l. t: C!'i. lfid!112 G ...._ :- "-;¡ ~-"_ ~ i:- ¿o,,-..;..·~; .-""i; C) l~: 11~;1 '0'1 '} ...., ~ ;...u.} Field ':\ f f ~.", , ¡.};, M ~ c}'\11 ~ ¡~ù. 102 Fie ld Oil Pool Con5GrJatiùn rile No~ 103 Tkadinß E2Y Field Kenai \'BII ~ He" Oil Poclß û:tl Pool 11 i)O 1 Oil Fool T! 11e ~!o. J f-CrOtl'..1(}. '~" j: , eft ?:tlc [-·re" Sl~0Bl J ; (:: ~? ~ ! 0.,., .,' ,..r1~·0""'---¡' ¡li.-i1~ ÞLASJ!J~ OIL f~ASKÞ.. ..- OIL ST Pu.'""E OJ:¡" þJ{Q GAS CONSEffl.NfION A1J:$i.ZA. co~~:\rrr"rEE ~"'''''¿ ..~ ~-r¡"'~ø"/ CO~1~~irT~EE G¿\,,5 C01\SERVI~TION A,\ü f.\Ll~S?J;,. OIL STA.'I'E OF Þ~\STJ.l1. 105 Field ~ n t ~ry ; iJ j:\ ~-.:.. rOO ]~s :'02 l~'ilc: 1'10 ti S¡-lOtll 'i/", 'v C:~l COi1.ZE riTû ti01.1 Nid¿le. Gro..md rfGS ",t\u ~ .~~ ·,,:1 f ¡ _ ~ ..~ ? -0'; J: , .:.u.~... '-.:t If é- . 'D :_ ~;oJ "'1' ld oil :.L e Kenai Oil Pool Cor.scJ:vê.ticm. File. No. 103 Trading B~y Field Y..iddle Kenai ItD n ) .arrd HE" Oil Poo19 H:zrnlock Oil Pool "GH NE Oil Pool }lcmlocl: .' . ?oiat CO?'}'S~~v~t:Lor~ Granite Nidcl1c 11 "e ) ... ) ) ) ""' ) ) ) ) , ) ) ) ) ) ) OIL !JJl~SF:.Þ~ C F TirE I:LOTIO~'1 TI-U: Rc COUj1ITTEE to CŒ'Ísr;::~v l-iTICN rSD G Þ,..S :1. :;; S t;",:?.. r: éC ~ofis1..~1(~z to h~ úT":: n_~~ ,., &:,;.,. fi 0 :/1 1J8e of gas ·~1....~ \"~A~ aifc::cting O::GOZ- .'3.D. of crude oil iù c6¡;tain ~e[nlt ';jf ?~od~ing opeTritions tl1e ??cd~".CGd ;;.z I~l~t oil £i~lds Coo1-.~ Pool L~O~ n.i \y~?r 1:'i81d "a' Oil ~Œ 0 :tl ConsQrvatio~ Fi~lc r. ..~ 10 Pool XcAzthar l1id,11c~ "!.~. TI~rJlvck I Pool West Fa aland Oil """ ~: :.1 [i.:¡. Oil ..,.. .~ l'OO..ì. S'JEPOE;..JA SCITGLTZ J L. TQ Loussnc J z t11G ~'-l~~be¡-s of th~ City Council to E.ppe er in ~ou PM CGl-1H.Arm ED and 27 26 25 rfuy en A~ k fil.é1Sa.:- ~ t Ancl1.or age Street UF' A"vcr~uc. and 5th Li.br ~;ry ~ referenced the th~re~.fter co SO lCl'1g al1;j M. CO o'cleck A" 9 .:¡:~ 1.071 'J 23 Alaska in i:.!¡a State of behalf of ou te$f:i.fy to 03 ~or1\:irrl1e.d) way ¡-. ~ il. 1:' L¡ C~ ,-.carinS3. t1-..:;. c c; COHHITTEE AlID GAS CONSERVATION By£?-4~--, .n¡Jm~ C J,.,. lS¡;:xreJ..l ell. D.i ¡:¡:.zn ~ASKA OIL - - ~ ~ ~ - ~ ~ - - ~ - ~ ~ ~ - ~ ~ ~ ~ ~ ~ ~ ~ ~ - ~ ~ ~ ~ ~ ~ ~ - - - - - - - ~ ~ - - ~ - ~ ~ ~ - ~ ~ ~ ~ ~ - ~ ~ ~ ~ ~ - ~ ~ - ~ ~ ~ ~ ~ - tho .a:lnc:¡::ed s:.¡bpo~na on. thG:'f: I cGlVed ~c~u:cn h8 Z'cby I to thereof py ¿aliver~1g a copy r 5clluLfz.. ~ _ , -. - _.,~.- A . \ .-/ L -. '>. the day9$ attendance ~llid fOi: each th>$ fee. tendering ~o hiE bY 2r11 ~--J. 1. ::ci Ø72~ ~21vlcc FC~3 ~\7 ':?~·¡~vQl ~ '._ . _ -! _D. ('-, .~",..,. ~ ,,~C' S ----/ ~ ^ \-' '. r _ \I J..\""'~~ '\ _./".¿I. ~_ (J --; r.' .- .'~ - ... ¡... 7 a ç ...o;"ú..l. v_" 'v. /. (J ..4 Courts. cll of Rules Zcvc~uing th~ administr~tion /~~~ by the cribc a ?¡-c~; :-~: :: =- s r~3 -3 7 177/ . -J _., (·1' I .¡.. t¿ k.1. : D:~~;=D ---- ~v' OIL AND GAS conSERVATION COHI'ITT'l'2E ÞJ..r\SKA 105 Field .'" II II" ~ 1; J .;.:, Pool:] :~~) 102 NLASKA COl1sGrvatie:n I'i.lú No.. Hlddlc Ground Shonl 11GB liA" ~ liE II lie II "ì:",. ¿mG ':C Oil STATE OF ~ Fie Id IZBl1.~i Oil Pool i03 ()":"i 71 I ;:; Point Conse t~l rr~: GrWtite Hiddle In' ~ Ie Pool ) , J ) ) \ .I ) ) ) ) ) ) ) ) ) KLASKA OIL TIlE O? }m7ION TITE Rc CO!:~:!ITTEE to CO?TSERV!:¡rON !J:iD GAG h~nring to considsr i8st¡~nCe hold a the use of gas &~ order affecti~g of ~esult of crude oil e.g tile pro¿uced in œrtain producing ope~~tions fields Inlet oil Cook Pool SU:a:?OENA S?~J\.? RO :3ERT E TO LOüSG2C J the Z of to appear in the City CCi.,¡"!lcil ChéX:bers CO?::'l1~TDED l~1.E YOU and 27 26. M"y 25 en Alaska i Anchorage. Street, UF; and Avonua 5th L=='b~ary, the l'crarence.d as and so lcrag thel"~aft:ar H. It A. at 9:00 o'clock 19719 28» in Alaska. of the State of beh:llf to t~9tify on con tL'1.uad ~ be r:.zy hC.2::ings hcat':lngs these COHHITTEE ~ iJÄffi.(A OIL þ~l) Gl..3 CŒ:ISERV ATIOH .-.. 1b·a¡~ Chairman By - - ~ - ~ ~ - - ~ - ~ - ~ - - ~ - ~ - ~ ~ - - ~ - - - ~ - ~ ~ - - ~ - - - ~ - - - - ~ - - ~ ~ - ~ ~ ~ - ~ ~ ~ ~ - - - ~ - ~ ~ - ~ ~ ~ - ~ ~ - ~ ~ ~ - - subpoena on return that I served the annexed hereby ! a coµy thereof to deli verlng "by /~ð8~rfr fE~..'¿-ffA--1'r: the govarnir,g the adminißtr~tion of all Courts /VL Cr:J~.ot:7e ConBcrvetion File No Tr 2-d ing B ú.y Field l1iddle Ken~i fll1" ~ Ð.nd IIEff Oi.l Pools Hemlock Oil Pool tlet} NE Oil Pool Hemlock KE Oil Pool Co~servation File No~ 104 McÞ..rthur River Field 11iddl~ Kenai "GIi Oil HGmlock Oil Pool \\'est Foreland Oil and fee for each day' 51 a.ttendance by tendarlng to him tha the Rules ð {;) / tf.7/." î+e~ ~lcagQ prescribed by Df2TID /!/( 7' 2; ~ S c::-V'ic.a Pees Travel $ .~-.-.-.,....... ì">r:>g C .~ c-/\ - ....~.. vJ..~ y /4' ¿.!oJ Total $ .f7~ c:-o .:;I. \ I him and """'- ~ {~O:'·:rr·~'o:?¡EE CO¡,j~;EF.Vi\TI(J7-~ Gt~ ASD OTI ......... IJ....ASY.;.\ f':J~\SK..A STlt.TE OF OIL [lL/..S!(J::' r¡~I.m (YF ~ :;)7'1 c.'~ Tr:I: ~~i:~ It ~ ft¡) t \I r... \. 5 1J001$ rool CO';¡:~3::' rV'~!..t£.Cl1; T!Jtt{1ii1f~¡ ¡}·~;l fli-a~il@: }~n;¿:t ~~d r:E!-~ ()il }1fj;~:Jl{) c;.1{ {}il Hi} i t NE to CO::'îi·ITrî~~?:~~ i..~~;j:-:sr~}::/ !;..·r.¡G~~ ~(~:;~~it';.~ tc, ..",.... -....:...~~.ì .(.' w )-,~: : 1) ~1'):¿ the. £';ff~ctinß .~.T>¡.-"~~~ vJ....·_ o!. ::. ·C;a; ()~ of 2:(: ¡¡ u1 t; t.ð ~ '~)~::~UCCG ~rtii.in. in ~~c¿uc1nJ O~O~~tiv7~ 104 Oil li{{;t~\lv.clt :m C~~_13~~~\lDt:f..C~~ 1~c ~ Î~!,~~¿\:;,Jt!"lt.)~'"¡ lli~IÇ;~ )}~:tclit füd~le xcn~l rCf Oil 1"Ot}1 0:1.1, Pô-c·l J?i~ fieldo Inlet 0:11 Ceo!.:. ?t¡)ol Hçr;¡,lûck O:~l Pool ~,,¡~t Fvrcl£E~d Oil :Pool SUB1l0L1Ú\ EU:ll;S !-"~G¡¡: ,.....-~ :..U' i",cu.s¡;l1C :J \;:h z; Z C1 t7 C.çuüeil Ctuz.tr;b~ 1'3 0 ~ t11u f~ ...¡.... G.?;;Jt;a~ A.12 Cœ-¿;:\~':D2D to ~!.-'-:"" ;,.,v~) a..~d ';,"-.1 ""¡ r, , ,tv 2-L;ly 25 01i i~~1J3.zkQi Â'a<;hox age> S Ct'tJ.,.'Z> t Hp Ø't'f--f~ ~.......'¥ ¡tí. vc~uç~ 5th 1·/::b':::~";,.-1 ~ rt ~ L'0 If] l"CD.cca tho ~-z tl1_a}:&~t~-r !:rrd~ $0 lúng ~~, CO o'cloak AIJ (1 ;.1 (It 19 71 ~ ç'.~ .;:.V~ of Alü;Jka in tho St&.î;4;l :!"'4lZ ;,¡,.¡." .;. to tal1t1fy on Dct:h;"J.f cc.:1t::!.n.ccd, DC t::.rJ ¡~w:~::::..~:;û ,. ~:~ ~~.~,~,.-; (~0 .-~.....'\,j.""" ...,....vr.-l 8, ~Ic~~r¡~"'). ~~;;..tt~''''''' CO:':'iI'r'1<EE ,-,,, /,~ ¿ ¡/ ~(?O ~J~:;¡~-,=--,.Ä'-'-" "'-~7\--' l¡,J~Tj--\JX L Si Lt.;;¡-re:ll Ccnf:!8tvati.o-:-l Filt~ No ~ 105 l~licld¡o Ground S1~~al 1?101d l~f~J.S tfl~"f:!;; 1'3;1 ç '!Ci;~. q::jt¡: tiE ~~1';" D £r.;¡d HGH Oil 11ôol:,; Cw1.21t~~¡::::ti:j¡: l?:tl:2 ?·:Oo 102 G~~~lt~ ?oint Pi~ld rl;.,3.ð:La K,,~¡a¡i Oil Peal Vile No 103 l?ie 1i1 ~;B ) '\ .l ) ) (:!':~i1:i..dc. ~ i.~g·¡iX1C0 ) ~ J , ) "". ,~ ~~ . rt t.,S..... ~.... r~....~ ) J"<··......~,.t:"; ~,{'i ) ·...40 ","u':': >¡;¡._. ) ) ) ) ...,.,.....::.-.\.~ ~;;-~D C¡~~S CO!>!~)B~tO~i~~1"!ON OIL 1~.t1,r{;,¡\ Ch ~1.i l"h1S.t1. - - ~ ~ ~ ~ ~ ~ ~ ~ - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ on I ~aZ'viZd tl~ tmn~<2d Gtí.'bp{'i~n~ t:í.! ßt ~et:~.¡~ h;: rc'b~'" ¡ to t.heracf &~l:tv,et:'ií.:~ ü c.opy ,_by KEtr&IE ELk/A/5 ",. .1- -r"'.·-À'" .. _U -, ,.._....-, . -,.~ .,......". ;.-" thQ all COUJ:tn ~.nd g~vc~ning e1~ üŒ~L~3tr~t1cn of ./~Ctff:~f..ee ~,_·l;?:~üddnCC €.¡3.c.h dZl t (~ the f~f!l for R~lee ~o- hit¡ the by túncl:acii.1ß ::i~ a.r;c p~~jJc~:lbcd by C;:lÛ ,"::.:¡ . ,~t_.?L.. ijT"~:?~ !"'~"H" ~ tf \/ ,. .¡¡;......- IJ fj -- ,.. II- ~..j,-~ Y - - - .1,'1'.1.1" ,---- , .. - :::;;> ..tL.. $,,-..-2... r·~· æ .t. -Z ) d. '. _ I ._', Y __ ..._ - __" , Di~T::D : St..:.r..¡ica Ts: ~";J(.!l ~c;;;TO./icC9 ~' 0 tcl ,<;[ I.t ~~ '~, ~-...,.. l:JwÞ.SKA 011, f\KD G.A3 CONSERvATION COrrHITTEE STATE o 1! 1J..ASr:.i\ l~~::; : TIre HOri'IO¡¡ 0:-." T}I2 Þ:LASK..ó;' 0 IL } CC'Q3cr;7atim:1 F1~le ;":0 I> 105 J,: " IrIiddlo Ground Shalll F:te Id } ;\2T,) Ciw COXSERVATIGN C0-:ì~··~1~TEE to ) l~!GS 1! " i i f1B1 if j "."" ¡ I H:oI1 liE I.../-\, ~ ';.~-' ~ " tr~'p .-_,-,'", 1""1 JI,-'i Ii Oil POOl3 ) 1'1 :1 ~ ~i..'.~~ V ., - ~ . :l {:2[~ri~J to c~~r~8 i è:.::.~ 1_~~Ul:.uC6. '- CDItS G ~':l;;l '1:.:1. ('<:-1- ~--l ~ "'~_ __.... i'~ ,) . ~ ---- 'E-" '"I.'....I_:_~ / J,..to.o~_ ~fJ¿ ~~ Crauite l'oint FJ.cld ./ o[ "';....... o1..-de~ affectinG the tlGC of gas ) 11iddle Kenai Oll Pool -':""'-,,,, ) CC~Berv:5.tion File. i'¡O ~ 103 p¡,oclucc::d Q.8 the t..~.zult of crode oil ) 1"1: acling Bay Field in! cart~in ) ï-ücldle Kenai fiB It , He:! ~ HD". ¡;Jl:oduc:ii:1 G operations ) B..~d Itr;> H Oil Pools ~ --, ) ECi:1,nlück Oil Pool J Cook Il'llet oil fields ) tli"''' If£ Oil Pool v :- _'.A ,- ... .-"'" - .. A . I . ""_I. f_'" ~....., - \.IÌJ""" ~ ) Hi~"ffilcck HE Oil Peol Conzervation File No~ 104 HeA.rthu'.r. Ri"'vêt' ¡?:ield Hiddle lCenni lI..,n Oil Pool u !ip¡¡;lock Oil Pool ~.¡ ~6 t Foreland Oil Pool SUBPOENA I I í t":;./-'., " j~~l':ES R. HENDERSHOT ..\.I. yo'a tlItE CO~<:1.AITDED to 2.ppcrir in the City CO'i.!t1cll C'n¿z:ibe rs 'Of the z. J. tOUGS êL(Z ! L:J;~al)1 ~ 5th A VCJ.-ï. t!C and "FH Streètjr An".horaßc¡; A1~zka I Ol"l/¡'1ay ~f: 26, 2ï~ <' IÍoJ) ~na .r.t:" 19 71 ~ 9:00 o'clock A.. í ~v~ .r.t M.. 11 ! an.d so 10lrig thèrasÎtcr as the, r.eferenced ¡~Q.~:;:lt:g9 ~a1 be cont:t:1.ued iI to testify on behalf of thß State· of Alaska in iliC5C 1~:.)::æings e ä!wKA OIL AÑ'û GAS C07:TSZR7ATION CONHITTEE By--l~ (L-ee . .. ,. -(- t¡C'I:~¡~ L~ Lu.rrC.l.J. . Chai~.:ULl. - - - - - - - - - - - - - - - - - - - - - .... - - - - - - - - - - - - - .... - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - -r l1carcby XC:U::!l that .. 8ü¡ved the a111J.c¿ü:¡:1 Bu'bpCC¡¡a e11 ... .i. ~,/vl"E,~ .. It. ;{~ 'f,R'€- ((. Sf! ð7::: I ~ di~liVêrlng a copy thereoi to 'DY h~rJ ud by tcrt¿:crii1g to hi:¡¡ tr.3 fee ro¡: e~c.h day t S attcnd;mce and the t1:!.laage p¡,c3cr:1.bcd by the RuleD govcrnir:g tha adrd.nist-ra.tton of .all Courts. DiCED I . f!d72-1 /.[1.?~ ;/~ ? f.f~.,:.oe. I. S Q ¡:vi CG 17828 :i1 ?r r.:.vel $ SCl.""Viœs A '11 .'5 q v Lotal $-.71 tf Ite. ~ 10 #2 10.;7 I'4Q..M. t' 3 .~} ..~y ~.. '~. ~ ..~. (~ :.)' f~ r:· r' ~.::' ;,., (,~. :.~~, ·:11. ft \ \f,:,(; ,r, r ,'~ ,:,:; :;i, .:':~~ ~:. ~ )~. ~:'~; \"'~ ~.~ (',' ,,: :'.~ ;;'? i'.:" ~ i.1 ;:,~'1. t c. ~ ,:, L-:,. t t\ ;..~) ~~; t. t~. ~~: '-:.... ::~. :";.: ,.,~ -.? i.. ..~~ ..: ,~. .:... t "', . '~.J:I.- ~'I;"I...-~C,t."\~':j~:~~'~(!.~". rll.~J.~·~'~ ::01" ~.': ," .~. ·"f;.....~,j,... ~l ;·~i~·"':r t~·~}.¿:~~::...·~·,~'- I\:.~ r.. t.~~. :;". :,':' J" C ~'~\ :~~ "~~.~ ":~':l. .~ r: ~~: ,~~ L.-, \. Y j~ t:) r . ~ . ~ ~ l_·(~·i. (.~ ....~' 1;,; t~ C~ .: (: ':, '... i""' i ,j ~~ ~ \:T' " p:r D\~ "i.1C C.ì~ :~: :.:noL rn!,~:;t r.:enti ::'.~ '.)[ 3.~·~;'~I!~~~:':'.~~~~··~;.~~~ _(~~~.~.~_~~~~~.,~~j..!~ ~". t::..: .~~..('jr: c~r~..'.t ,¡.-i('.:~, 1 f. \. ~ ". ~. r~...., t\.11 \.~~, I! .~~:~\·.S;"~·:~; j~ 5:,..~ _1..?~0:¿A .... !·~'.~·:~l ....\·~·~:;C\, :.~\ j.(~ \,~,¡ r\ r"',e [: ~~··i t1l l~ '(~.:iOIl ~Ji 1. r: ,: (:,~~ '1 i f' Crn: i ~'1 t(1 Ó :t~!~ .,,~~ ::~ \~.~~:~ t?~l. j~, ()r.\ . ~I~j <f) 1.:: t1 t 0 lì.-n.l·l~:S ~Lt:-, ,j,l.l t~íJ{..~ ~'c !:,-~:,lc: t t;·~) ll.J. t 1.(: r~ ~ ...; '" Dak8r CO~Dressor to ~,' ~\:.; s~ o :C }." :t tt t:..f () 1~L1 ::J .f 1 ~-L ï.:' ~.:'~ r'ì}~ () !.. .'·1. ('\ 'j;1 '"' r;~ () \l ,¿.~ f~ ¿11-~ t, ,~) L~ Co! ~l·..'".;. t ~ ,.'.~ :") ;:; !.~" () "í.... r;.""-. ¡.J on:; ~', ;}"y Ppn /.:,~~ nn:..ì ~: )\"XH::,] ;d.r' !~~¿Ç¿~L?'f...;~~~_.lf:.61 - Pm:' ,\':-,(:'L~:1c.an rí.~C'J¡'::'uK~Dded ::\Qvit~?, gD.3 to bc;·-;.ch b"\C;lW;ß !~ . c~:}? ~1,olt£,t:i(;¡1 ;.~:_~~.;':~) a biLtt); st\!.d.y Dr: .';',rocer:;s:l.r:··': >:G~ -. P.A;';PS ¿,;,nd ~::\S 01;c:cted P.t;:¡ ~\r;er:!.cT:-l tc, cor:.c:uc.t f(~,:'-;:I·" :3 . ~g:,~~~..-J}';'LJ:~2'(:Z 2.. EPY:,I;~.~;~~~~~"l:..~"d~2§.?,·- .h.laaka Oil and GnB Consç:"r"wH..ion Cor:~·¡¡dttee gl::bcd,ul~,d a hca.ring on the. benc:f:tcial urm of 't<CS ~~[1í:)t. Ti;æ~ lu::::ar,ln': d';lt~'.~~ \;a,s poot'"oned until \.)et(,;b~~r. 16. l~H)'l" nri.d fU1"t1':.~~r' to ~i::1.nn;::n~y 1(, \' J..9CF~.. Cc:';::n:Lttec ¡J~¡p-;::·l$(.!d fJ.:u·Ii'"ot1.11r.::, a!,·~nn'-se::-;'.ünte \,:¡£~re dev(!l(')pi,n~)\: trlth Un:Î,on 0:1.1 CCir:'~pnr.~y (;f C·~tliforTjj,a aDd furth:::¡ thnt }?hiJ.Jir's P¡;;:trol(~œ.':l CCr!:'r'arlY \o7ould Ct.,r;~þl{~te. a ntudy' i~l ¿5 d~;\!.yt$ t.o <.h~ tcrt~:¡:Lnc a. ~~gJi pnreh,:1S~~ rn.."oposa 1. Cü·~'::;¡d t tc'e cI,Tnt:!.nucd t})¡;:~ besr:í..l1:~ to ::\'0'1:':11 10,;, 1968.>·,·..,/ ¿. ~?'/~~."/'~ . ¿ ¿: 1. 5~Y.~Y5~~..2~~_L.!,'2.§_~'. -, ~~:s~:~: ~:;: ~':~~~;;~;~:~f;;~~:~; ~ ~;~;~~h ~~~~~:~::~~ ~~;~n~: e'\r~~;¡~:P~~D~i ~::or~ h~18 deV"elcrpeÔ. irl.tE:t',in revi~~,ions f.rom ti;~.!e to tim~!~ Fo'r Y'OU't" U.S(.;' jx~ prei?ar.~}t:[on of your pJ~l!~tici.pation in the :'Een,e.ficial U${;~ of Gas'l h(!ar~h1g! Hay D, 1968.. t.'uJ.,..I.n;¡.r:'·; >rr ~ 7't~, I) ò {;:l.~t<~,~; H E it 0 R A ¡; D U 1 .... ."., .-".....-.,.... ..-.,.....",...,.,...'.........., -~".....~,.,",... --..~......_", ,...'''' Al.AS~<¡). OIL and GAS CONSERVATiCf'J c':)r'\I~MITTEE I G\/'(IVP, '* Ct\'I kQcL.~.¢I1..'tA..EXHIBIT 2- =#= /0 'L- Ga~~ D:tspos1 t:ton.! ~O~ FilE 1!·T:tddl¡~: Cround SF~"liÌl,.._ .,....._ '7 ð~Î ~1! and Gt'a'1i'~;i:~ l'o:lr~f'" '- n'"'" '.'.". .ç;gg}:,,}.:.n.~~~'~t_~_i~ l{,!~.f~: l:.~_. ~it (~ ~ (),S,,_.._._., ",:, 1: Jtile ~ .~.;¡i}}··'277"·~993. 3 H,a.y .3, 1968 c 0<Y 1 ACCEPTED Dote rs1~b/71 ......,..... ,_........~Ir'''......._._. /: I. ,;/..- _~,L ,..,(.~.J«..~ ) ,^",,~.,Q.,.8:-/,( ~ ...... ~ 1\-. ) ) ) 1"ile ~ }~JIE-·277-993. 3 - 2 .- liay 3 J 1968 7 . ~.~:~~~J~~~?:r~.:?~~.~,~_,J5!~~1. -. Union t1greed to back out Kenai ga.s und in,j cc t ·¡'1GS and GP gas into bHanson [~iver Fi.eld at r.!:"sps and S!~S t1XpenfH:.~. Esti17:~ted rrr.oduce.r cost 17.4¢/>:'CF t" com- press 'bC~lCh gas to 1100 PSI and dehydrate 2 Ibs. -'¡":!:J. ter /Hl'lClr . 8 . J¿J;.,Çl~~.~~_~~.R .1.1.'_J....:.Q.º.? .- Union pr0?osc.d to uurcha$C ~ms and Gl' gas. Copy of proposal furnished TulnB Gas Sales group. 9. ~:~;}J.:\Jr~"_}_LJ..2~.ª. ,-. l'.an At.1crican plant stì.dy compluted. Study revf~aled plant unattractive. 10. .~~:.e~~I.~~;~~_!..!._,,}2.~!_º__- Bruce Bat<:?;3, Ph ill:1.ps ~ phoned re.ques ting meeting to 1 ..' .-.- _ ~ ~ _, _ ,._ _._ _ _." _ _. _."¡ ........ ~ .. ~~ 'II .... __ I~~, .,.,".. "'\f"......_~.. .. .. 'L.$..¿.,Q...........O&;., .."......'...í.;.....'-J'...::II...&. ,-u p\...:...........':,t;....a\.:..;;. ""'V'V.I,'\o .&.j¡,.~.'-" f~c..-.'W'. 11. .Ð1lRl!.:1~!.._~_~~_,_3:..?2~ª.~· Br.u.ce nates apDcar(~d to di.acu!~s a. proposal to purchase sas wh.ich he vJOuld offer for h1$ r¡~anagcment i s approval, providing YB were receptive. 12 . !~~3.Ç:.'ti}~.}.:Y!?.ª- Cornpaned Phillips .and Uni.on deal. Discerned Union t 3 deal equal to 01~ sU1)~!lrj.r!1" ~~(:'O!~()'Gl.fe[;l,11y t() Pbill::!.p$ deal. Elected to go with Union because anticipated deli-v cry d::1te ()nc year f!t~rlier.. 13. ~ú\RS~ll.. 5 .Lj:.~.§_§. Apprised Union ¡oTa ~Tere ready to contract ha.$,~d 01'1 their prcpoR~l to ptJ:rc,hnse.. Antic1pat(~d fÜ1é11 draft. In-- forced partners accordingly. 1ft. ]~\ß.ÇlI 19 ,__!??!~ª- .t\.t.lant:i..c telephoned to ndvir~e they· 'tJ€:t'e checl';jn.g eco- no::¡ics to dectde if t"iH:~Y cauL! m<.::.I:.e .an offet' to pur- chase our f!:a8 for in} ectiol1 i.nto S,,¡:ansou }tivar' ~ Received Ie. t tel" l'~~a!:c.:l 22 conf ir:.n:!.l1g tül(~phol1:1:1 call which ,::~sked u::;¡ not to contre..ct \-r1 tb lJn.1.on Hut'll w'e had considered their proposal. 15. A1."'~:!l~.J2J~ª- - }!et '....1 th Atle.ntic in L08 .At;~.eles, i:xpL1.ined that: re.serves ,,¡ere not adequ.:ite to í:"',ntertain constl"uc.tion of a. j oint plant unrj 3GÐu.rcd tha t 1::1;;luage.·.lcnt -("IdS not interested in ~westin~ additional ~oney to ~ispoBe of the :;:J.r::: to ~~-:\T~~;180n j,~i\ic:r ~}ec.:1·.we tr::2.011; S <..k,,1l., r\:..·ovicl~~d for ret\n"DÜf_~ ','r}8J:-,<~ tb[¡~t, ~)g1.Hll~t i:c:.i.ly, ":.:a!l t:~c o"..~ly adVa!1tn?,~ in .:\tla~1t1c:! Ð o~~fer. oV0rsli,:1zÎo,:,'e,1 hy t,h~ ~.:11s'- adv.antD.f;\.:3 of out' íl;vin:;-: to :~:(ik~ an ndd:ttioi"\al invest-' ment in cc¡.:pressors ~ plant., etc. 16 _ :.\~~~IJ__.~~',,_~??_ª- Atlantic' $ telcr:hone cnlJ. f.~ayi.r;:-'; tIle)"' ng:rce<'!\·/ith our. r(~scrve. ns t {';"'::1 t·:~. ~-: it h(; t'i:',;' l:.he 1. ~ pr...'1p.:>sal. I:.~)',~ ¡,; LÙ¡ 1 A tla!\ tic coul.(: 'i:':'¡~h', "Pi,: rc ~ .~-~ ~i cd e:': t j~ ,:~l: :2ùïJ!3 (. ~i.~, 1: 0 r .1.; ~J (~c·- t ion into ~3:,.TLH1S:0n }: tv (:1~ 'J i '.:',:lO~' 'C ';>,¡ j, en [; cc;:-, ~-; C:t~ ~.; ~:'c.;'~ ',U: '", ('~ f 1_~ 1.1 i l.::t1 ~!..i \.'~. (; J,:t cat 1. t') II to .r ".1 :;." r1 1;:;i 'l ~..~(~ 1':(1, i ,~~1~; t: [; .' .~.~ '1'.. .~: .:.." tl :'~, i v (':1" . '-~7 3ø/7 C·'.r1. C] i!\ .:J. S 1 ç 11 P. d h"Ç' .1··.. Un.ion 1..nfom~d thr!t th0.i.r ma'n~lr:e:m(~nt \V'ould not rtp'prcvc contrac.tt!lii{ pur8u~nt to Ol.'.r April 4 pur-· cha.se inr:~t!'l~rlC'nt~. t'ut it '·mu1.d [!.qrf~e totL~, 01,11.- ~ation to install facilities at reduced cost of returned r:as if "re a~~r0.e tQ forego payment of 2¢/ l'{CF until aalE~s to third pf.'lrties, as set out in thf' c.ontract.f C.o!e~r¡onced rot \~h1c.h t:b:1€: pa)""f.'.ent 'WOll1d rel(~te. to tl:c gas $olcl: to thirù parties. !'1ay 3!! 1968 - 3 -- ) AHB:dct Þ..ttac:hL:ìCnt L'?:~:'}}:;_ ;}º .~,._.~:.~~Ê~ n 1.7. Fila': A1Œ·"2.77·,·t)93" 3 ) ) ) dated May 3 May ~, 1968 - Received a letter/from Union Oil Co. of California, together with a personal note whice accompanied a contract draft, revised consistent with our wire to Mr. Griffin of May 1, 1968, that their revised proposal is under consideration. May 13, 1968 - Transmitted copy of May 3 letter from Union and Xerox of draft to Chak group. Response to Union deferred until issuance of an order from Alaska Oil & Gas Conservation Committee resulting from the "Beneficial Use of Gas" hearing which reconvened Nay 9. September 11, 1968 - Letter from Alaskan Oil & Refining Co. transmitting plat refinery of the area to be used for construction of their PXXRX at Kenai, Alaska. September 11, 1968 - Telephone conversation with Frank Cahoon, Alaskan Oil & Refining Co., concerning our proposal for their refinery. Gas available at a point not more than 150' downstream of the initial gas condensate separator at East Foreland production Facility at 150 psig and with a Btu value in excess of 1000 September 27, 1968 - Sinclai.r Oil & Gas Co. apprised us that the Nissho Co. of Tokyo desires to buy approximately 430MMCFjD from Alaskan ARea. Also asked us what steps we plan to take in determining the feasi- bi]..ity of making said gas available to such a market. September 30, 1968 - Our reply to Sinclair that the Nissho Co. is aware that our gas is available for sale. With additional development of new gas reserves, something may be worked out that would include our gas. October 2, 1968 - ì~e requested A. M. Roney to make cursory investigation to decide if an ammonia plant of optimum capacity to handle the gas production anticipated from NGS and GP Fields is economically practicable. November 19, 1968- Letter from Piper to Krebi11 that Anchorage Natural Gas Corp. is no longer interested in ~he gas at our facility and n& further '1017 ) ') negotiations are planned. December 20, 1968 - Alaska Oil & Refining Co. of Midland, Texas telephoned regarding negotiating a gas sale for Pan Am's share of production the MGS and GP Fields. Projected gas avåilable for sale in 1969 will approximate 20 :MMCF/d, with reserves apprrnximating 60 BCF. December 18, 1968 - Received speed letter from Northern Gas Co., Inc. requestin copy of report prepared by Pan Am of casinghead gas production, along with gas analyses. A local market for much of the product available can be developed. ... ",,... - ..... . .,-. ... :ï.~û!. i..l1e.il1 \:I'd.:::> loin.:. d.i..e. !J1..ü(;.t:;:::¡::¡ -.Jauua..L.j ..LV, ..L::JV;J l'\1VL.J..l....Lèu \...IV. , Ll1d. L we. .Lit V.L updating reserve and production data for MGS and GP Fields. JaHuary 23, 1969 - Northern Gas & Oil Co, Inc. making effort to develop a supply of propane in Alaska & may be able to use some of the casinghead gas now being flared by Pan Am from GP and MGS Fields. They would likê to have an "estimate" of a reasonable price for the gas plus a rough estimate of how long the volumes might be available and the realîability of gas supply. February 4, 1969 - Transmitting revised schedule of gas anticipated producible from GP and MGS to Alaska Oil & Refining Co. of Midland Texas February 18, 1969 - We informed Northern Gas & Oil Co., Inc., preliminary info. ~~..'\t t;,·" , , J ~J_F'" I ;:\} '. VirJP . v' . r .,1", _ ,\, } ~"' "\ ¡ Improbably that an agreement can be worked out --;.;;hi:::h \vould be ; I satisfactory to both parties. We would want contract to state we could interrupt and cease deliveries at unpredictable intervals ~;'\ , .\) '- (Vi........." f, ,-' \ \.~. ?ç), _\.u- >( 'j~) r\" ". '. \-0 VJ:v,} \: ~I\ ~\.. \~ ~þ;,~:.l':'( ,'^' 9-CJ·' 'd¡J.v ", t..F)\~ . ~". ~,,~l ~r 1 10 ".,.' <:i!arc 1 .. , \ at any time. Plus \ ( all gas available. all gas available. the contract would not cover the purchase of We're attempting to secure a single market for 1969 - Cryogenic Enterprises, Ltd. proposed pro~ect to serve Fairbanks with natural gas. We have no production in Big Lake area ,«;.¡here interest lies. We requested to be kept advised of their progr:ess. s-o/7 ) ) March 26, 1969 - Letter from Cryogenic Enterprises x» Ltd. informing us that Mr. Sparling met with Krebill and confirmed information received as to where gas might be available. They decided market must be supplied by LNG or LPG until gas is more accessible to Fairbanks XE or someone else's pipeline is nearer. April 20, 1970 - letter from Olympic Inc. advising that they have a client who is in need of 560 billion cubic feet of natural gas over 20 year period commencing in 18 months. Requesting if we can - - --- SUPpLY L.:J .Dl..1' pe.t: year: April 30., 1970 - Replying to Olympic Inc. inf orming them we do not 500 BCF of natural gas reserves which can be made available to compete with offers they now have, if offers are from Union Oil or Phillips We can supply SRRx±~n part of the gas from Section 3, T7N-R12W, Kenai Borough, Alaska on an "as is, where is, when available" basis for about 10¢/MCF flared August 27, 1970 - Koch 'Industries Inc. needs/gas from GP Field at Nikishki. Also would like to lease or othenvise utilize the second li.ne from GP Platforms to Nikishki. Representatives will be in touch. { December 23, 1970 - Letter to Phillips regarding the excess gas being produced ~ and flared at Chak onshore treating facility. Anchorage Natural Gas Corp. proposed exchanging excess gas to Phillips for LNG. ~ "- Will appreciate receiving the buy and sell prices Phillips plans ~ , to propose. ~ -------- February 5, 1971 - M&M Contractors and Nikiski Marine Corp. representatives ~ visit~d Anchorage office to discuss possible gas sale. Will in toucn with us as will Rockf Island Oil Company. ~O{7 ) ") August 14, 1970 - Letter from Houser, Phillips, stating they are aware of the ,.----'- benefits from a producing standpoint of negotiating with Anchorage Natural Gas Co., however, various proposals raise some serious questions under the new Alaska Public Utilities Commission Act. As soon as their position on this matter is clarified, they will let us know their position. February 12, 1971 Letter from J. C. Schillereff to Anchorage Natural Gas Co. informing them that the Denver Division office is better able to help them with future sale possibilities. the East Foreland onshore flare gas. Set date prior to reoruary 17, :i9ìl - LetLer frulli A. Ïi. Dê:l.LLel.l. l.U Aw.,:,11u.Lcigt:: :ï.~C\.i..u.J..a.:;" Ga..::> vu. informing them that we are still interested in marketing March 1 to hear XÈR from them if they have any firm proposal. ;r February 18, 1971 - Letter from A. H. Barrett to Phillips Petroleum Co. asking \ for a reply to our letter of December 23, 1970. Requesting ._--,~-_._,._--- -:::. .~ reply to such letter in the form of a proposal prior to the ) ha~ring on March 4. 70-/7 #1 I ft ~ ~ Publish April 24, 1971 elL. f: /#r --Jd/.) Thomas R. Marshall, Jr. Executive Secretary Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99504 3. Will more waste be caused than prevented by an order restricting production of oil to a rate whereby all produced casinghead gas is beneficially utilized or is required for a safety flare? 2. Will the flaring or venting of casinghead gas after June 30, 1972 in excess of the amount req,uired for safety constitute waste, as "waste" is defined in AS 31.05.l70(11)? 1. Can excess casinghead gas be marketed, injected into any reservoir or pool, or otherwise beneficially utilized by July 1, 1972? Evidence will be sought as to, but not limited to, the following: The hearing will be held at 9:00 A. M. }1ay 26, 1971 and so long thereafter as the hearing may be continued, in City Council chambers of the Z. J. Loussac Library, 5th Avenue and F Street, Anchorage, Alaska, at which time operators of the referenced pool and affected and interested parties will be heard. The Alaska Oil and Gas Conservation Committee will hold a hearing pursuant to Title 11, Alaska Administrative Code, Section 2009, to consider issuance of an order or orders, effective July 1, 1972, restricting the flaring or venting of casinghead gas from the referenced oil pool to the amount required for safety. Re: Granite Point Field Middle Kenai Oil Pool Conservation File No. 102 STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES Alaska Oil and Gas Conservation Committee NOTICE OF PUBLIC HEARING ") ) ') AFFIDAVIT Sl'A TE OF ALASKA, THiRD JUDICIAL DISTRICT, ss. _ _ J~lar.Y__~___~hªJ5:~ ___ _ '__ _ _________.___. being first duly sworn on oath C'h deposes a.nd says that___~___~______. is the....Le.g;a1_.Clerk_... of the Anchorage News, a daily news- paper. That said newspaper has been approved as a legal news- paper by the Third Judicial Court, fß,nchorage, Alaska, and it is now and has been published in the English language continually as a daily newspaper in Anchorage, .Alaska, and it is now and during all of said time was printed in an office maintained at the aforesaid place of publication of said news- paper. That the annexed is a true lie gal Notice 8038 copy of a ._._...___.:.________________...___. as it was published in regular issues (and not in supplemental form) of said newspaper for. a period of._____Qne______ insertions, . h 24 d commencmg on t e _..________. ay of _...~:~J?T_~~_____.____, 19 .?~. , and ending on the____24_...._____ day of IOf "."p:rj).________._ __ ___, 19.71..., both dates inclusive, and that such newspaper was regularly distributed to its subscribers dur- ing all of sa,id period. That the fui! amount of the fee charged ror the foregoing publication is I f $ 16.25 h· Ine sum 0 W Ich alììount has been paid in full at the rate of 25¢ per line; Mini- nìUI,1 charge $7.50. ,/1 //,1./, L.·-·// J . G.;!-/,f // / ..~.-:v/ / ~/ J>~/ ~-.: - -~:.z,<- - - - -- -- - ~ :"-- ---~~ Subscribed ~ sworn to before ~/ (,!8 'rh!s ...__:~ day of..!::p~~1-_______, 71 _~._o4_~_u~.___... n~¿4~:I""=. Notary Public in and fll "be State of Alaska, Third Division, Anchorage, Alaska .i2:.:~':'.~::..'·~9.?¿ OF PUBLICÄ ~ION 11'"'''' .~O~~,'.~.œ'¡~...:!:.~............i, , ,..,.:",ST...... ~,','. ~,' ,.....,QF"',, "A\LAS,I. ....., ..l',~. ':!,' ' ' DElPAŒm"MiEN'I' . or ' N4'J)~~,:~$Ót1RqES" .,'. " ' M81~a.OiJJ. anti ',Gu' C011JSe~aij~11" , . "ø~~~t~~,,'· , Con$'er~~i~~I,;;~~'&····.~O.\ .lte: 'Granft¡e "iROi"~eld' Middle. ~e~":ô~Poù ThêAias~:9~:.,,~,~{.:¡~u)$~$,~,~~. UOln. COntmitte~'~.;;!~Old,a,Ih~~~gl ~~,SUa:nJt;'~.~~tl~ "111\'åœas~:' ~lri:~ lS.ltMt!ilVeCo¡de-~ "SeCl;tOñ'~09"~~:to' '.'r,..· id.'" . "1',.' , , '" . '. ' . ". ,I ,,~Ø"·I s et".issU:8l1CI~"OfandIl4erollt,'ord~ilis..: eflt\eêlti~,e:,;J~~l.!:'~e!~esf¡ . I' 'gtih'J! fLari11g:':or" Y'~1?~~g"of,~,',.' '4 :;g~S ' fro~.,'t¡1)~'r¢~~*~cie!d·ød[,\, ·'.the I amount, requn-ed :tor '$sf.. . '. ¡. Th . h ;1;';,.. ,..,,11\';'.,. e ,e,ar...../ð' -ww. be"hè1a:' "9:00 A.M., M'ay26. J97'1'è.ndl,~~o , long therela£ter I\stb;e' hè..t1ng~·:iåy: ,be' continued. .ir¡), :~i~CØun:çÞ;~;(!1ÌÎambler¡, I of the Z. J.I:i~I~!,¡,i,~I'~~." I5ItJh Ayenue ,and lI' Stre'et.. . ,Anclþo11age' 'Æl,a,slœ) ~t', WlhicŒ1' ,"time oper8itors of ,the .re¡ferel1iCed ,po~(: '$Jd afltectèid and mte'rested: pal'~i:~ ~ be heatd., Eviden,ce will be,'sought as' to,~ut- nor; limited to. the,follQIWirig:,',\!, ' I. 1. Oan ~xcesls. CI9:$i~'head gas';, be m'a~ke~ed, i\l1Je<;l~ed' into any- reser. vo~r or pool, or· o~herw1se bene· I :fic'lall~ utilized by ¡JWI}" 1. 19721 , . , I" '" , 2; Will ,'t~&: ,ft¡a,ri'ntI~{ó'~' v,enlttnf"i\~' 'casdng~'~ad 'g1as :~~¡~"iTune" 30:1)'1972 ,1'11 e'~c~:s,o¡£' th~~:1~9ul1Jt, l'ß'ct#~l1e~ ;~:r, . slà~ety co'ns'ti:tute'waslì~~:as , WiastE!:~~ is defined I' in AS '81:[05 ' 1170(111~?: ",'.' '. "",' ,.~ ~\', :,: ' ,'. , I , I, .: ::',' ,I 8. ,WiH ,m~1'e waSlte : be~'aus,ed ,th~n preve,nted , bY, an ,order restr1C.ting prordtiC!tiono:fo![ ,to å 118 te " wller~;, by aJ:li~roøu,ced,cas1I11ghe~d, gas"is bene:~i!aJ[Y utl:11zed o,r is requ1r~:I, for 1I;.':,Safe1ty flve,? ,', I :,')'Whomas' R. Mia,rSlhaÜ Jr ~xecu.tiveSecrßltary ) . . AiliasJœOf¡J. anc1Gas' Co!\1seJ.'Vla.tlion COmmiltte&; 300,1 . Porc'l1phie~ Drt'V& . I Aoohorage), . Aa:aska. 99504 ~~: ~JIl2&. 187'1 ,Lea1d' N~. ·-"eoæ!· I -f-t, ~ "3 " , -, ":'. '~I".~~