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Home My WebLink AboutCO 228• • Index Conservation Order 228 McArthur River Field 1. March 16, 1987 Unocal Application for an exception 2. March 19, 1987 Notice of Hearing and Affidavit of Publication 3. May 12, 1988 Unocal request for an admin approval 4. September 11, 1990 Unocal's request for emergency exception of Rule 2 CO 228 5. October 16, 2003 Unocal's request for Administrative Approval (CO 228.006) 6. June 30, 2008 Unocal's request to cancel C0228-001 7. January 26, 2010 Unocal's request for Administrative Approval for an exception to spacing requirements to drill and produce the TBU M-10 Middle Kenai Gas Pool well (CO 228.007) Conservation Order 228 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage, Alaska 99501-3192 Re: THE APPLICATION OF UNION ) OIL COMPANY OF CALIFORNIA ) (Unocal) on behalf of the ) Trading Bay Unit Working ) Interest Owners requesting) amendments to Conservation) Order No. 80 regarding the) McArthur River Middle ) Kenai Gas Pool. ) Conservation Order No. 228 McArthur River Field McArthur River Middle Kenai Gas Pool April 17, 1987 IT APPEARING THAT: 1. Unocal, by letter dated February 16, 1987, requested amendments to Conservation Order No. 80 and the estab- lishment of pool rules to facilitate development of the McArthur River Middle Kenai Gas Pool. 2. Notice of public hearing was published in the Anchorage Daily News on March 19, 1987. 3. No protests were filed with the Commission. FINDINGS: 1. The Steelhead Platform has been placed on location, and is being prepared to develop the McArthur River Middle Kenai Gas Pool. 2. The proposed redefined McArthur River Middle Kenai Gas Pool consists of non-marine fluvial sands. The verti- cal limits of the pool may be defined in the Trading Bay Unit State G-2 well. 3. Top of the D-1 sand represents the approximate midpoint of the proposed redefined pool. 4. An empirical relationship between well spacing and ultimate recovery cannot be established due to the large vertical section and lenticular nature of the reservoir. 5. Though not quantifiable, ultimate recovery of gas will be enhanced as well density is increased. 6. A vertical differential pressure of as much as 1860 psi may be expected across the McArthur River Middle Kenai Gas Pool. Conservation Ord~L No. 228 April 17, 1987 Page 2 7. Gas recovery efficiency may be reduced if low pressure and high pressure intervals are in communication through a wellbore. NOW, THREREFORE, IT IS ORDERED THAT Rule l(b) of Conservation Order No. 80 is repealed and reenacted to read: The McArthur River Middle Kenai Gas Pool is defined as the accumulation of gas occurring within an interval that is stratigraphically equivalent to the interval in Trading Bay Unit State G-2 between the measured depths of 2762 feet and 6515 feet. IT IS FURTHER ORDERED THAT the rules hereinafter set forth for the development and production from the McArthur River Middle Kenai Gas Pool, as defined above, apply to the following area: Township 8 North, Range 13 West, Seward Meridian Sections 4 through 8: Section 9: Section 16: Sections 17 through 20: Section 29: Section 30: All W\, NE\ W% All NW\ NE\ Township 8 North, Range 14 West, Seward Meridian Section 1: Section 12: All E%, NW~ Township 9 North, Range 13 West, Seward Meridian Section 9 : S~ Section 14: SW\ Sections 15 through 17: All Section 18: S% Sections 19 through 22: All Section 23: W~ Section 26: W% Sections 27 through 34: All Section 35: NW~ Township 9 North, Range 14 \.ves t , Seward Meridian Section 24: Section 25: Section 36: EJ.2 E1, ....2 NE~ Conservation Orde~ No. 228 April 17, 1987 Page 3 Rule 1 Well Spacing Ten (10) acre drilling units are established for the McArthur River Middle Kenai Gas Pool at the point of penetration of the D-l sand interval. Rule 2 Production Intervals Production intervals of the McArthur River Middle Kenai Gas Pool with more than 1000 feet (true vertical) between the bottom and top perforations shall not be in communication within the same wellbore. Rule 3 Administrative Approval Upon request, the Commission may administratively amend this order as long as the operator demonstrates to the Commission's satisfaction that sound engineering practices are maintained and the amendment will not result in physical waste. DONE at Anchorage, Alaska, and dated April 17, 1987. c. C2~({# Alaska Oil and Gas Conservation Commission ---I {JO 1 Lonni~¡\:~ ,l ~~~~~~r Alaska Oil and Gas Conservation Commission úJ.V ~v. w. Barn\vell, Commissioner Alaska Oil and Gas Conservation Commission • • ~~~H ~ _. ~~~~ SEAN PARNELL, GOVERNOR ~$~~.~ u , Lsist~-7~ ail ~ ~ / 333 W. 7th AVENUE, SUITE 100 ADMINISTRATIVE APPROVAL: CO 228.07 Mr. Shannon Martin Union Oil Company of California P.O. Box 196427 Anchorage, AK 99519-6247 Re: The request of Union Oil Company of California, operator of the Trading Bay Unit (TBU), for an Administrative Approval granting an exception to the well spacing requirements of Conservation Order 228 to drill and produce the TBU M-10 Middle Kenai Gas Pool well. Dear Mr. Martin: The Alaska Oil and Gas Conservation Commission (Commission) hereby approves Union Oil Company of California (UNOCAL)'s request for an exception to the well spacing requirements of Conservation Order 228 (CO 228) to drill and produce the TBU M-10 Middle Kenai Gas Pool well. The Commission received UNOCAL's request for Administrative Approval Pursuant to Rule 3 CO 228 for exception to the well spacing requirements of CO 228 on January 21, 2010. TBU M-10 will be a horizontal gas production well with a surface location 1,052 feet from the north line and 464 feet from the west line of Section 33, T9N, R13W, Seward Meridian (S.M.) and a projected bottom hole location of 156 feet from the south line and 1,563 feet from the west line of Section 28, T9N, R 13W, S.M. TBU M-10 will target the D-2 reservoir sand in the Tyonek Formation. The proposed TBU M-10 well and existing gas production well TBU M-03 will both be open to the D-2 reservoir sand within a 10-acre block, in violation of the well spacing requirement established by Rule 1 of CO 228. An exception to Rule 1 is necessary to allow drilling and regular production of the TBU M-10 well from the D-2 reservoir sand. The productive interval of TBU M-10 open to the D-2 reservoir sand will be located entirely within Segment C of State of Alaska lease ADL 18730, established with the Alaska Department of Natural Resources on September 4, 2003. Segment C of State lease ADL 18730 is jointly owned by UNOCAL (48.8%) and Marathon Alaska Production Company (51.2%), and it lies within the boundaries of the TBU and the Grayling Gas Sands Participating Area (PA). UNOCAL is the operator for the TBU and the Grayling Gas Sands PA. ' CO 228.07 • • January 28, 2010 Page 2 of 2 Because of sand and water production problems, existing well TBU M-03 is not efficiently draining the gas reserves with the D-2 reservoir sand. The horizontal TBU M- 10 production well will more efficiently recover these reserves. A spacing exception to allow drilling and regular production from the TBU M-10 well will not result in waste or jeopardize the correlative rights of adjoining or nearby owners. Rule 3 of CO 228 allows the Commission to administratively amend the order as long as the operator demonstrates to the Commission's satisfaction that sound engineering practices are maintained and the amendment will not result in physical waste. The Alaska Oil and Gas Conservation Commission hereby authorizes the drilling and regular production of the TBU M-10 well pursuant to Rule 3 of CO 228. DONE at Anchorage, Alaska and dated January 28, 201 n .~ Daniel T. Seamount, Jr. K. Orman Chair Co ssioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The Commission shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10-days is a denial of reconsideration. If the Commission denies reconsideration, upon denial, this order or decision and the denial of re- consideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the Com- mission mails, OR 30 days if the Commission otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by in- action, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the Commission grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on re- consideration will be the FINAL order or decision of the Commission, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision on re- consideration. As provided in AS 31.05.080(b), "[t]he questions reviewed on appeal are limited to the questions presented to the Commission by the application for reconsideration." In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. • • Mary Jones David McCaleb Cindi Walker XTO Energy, Inc. IHS Energy Group Tesoro Refining and Marketing Co. Cartography GEPS Supply & Distribution 810 Houston Street, Ste 2000 5333 Westheimer, Ste 100 300 Concord Plaza Drive Ft. Worth, TX 76102-6298 Houston, TX 77056 San Antonio, TX 78216 George Vaught, Jr. Jerry Hodgden Richard Neahring PO Box 13557 Hodgden Oil Company NRG Associates Denver, CO 80201-3557 408 18th Street President Golden, CO 80401-2433 PO Box 1655 Colorado Springs, CO 80901 Mark Wedman Schlumberger Ciri Halliburton Drilling and Measurements Land Department 6900 Arctic Blvd. 2525 Gambell Street #400 PO Box 93330 Anchorage, AK 99502 Anchorage, AK 99503 Anchorage, AK 99503 Baker Oil Tools Ivan Gillian Jill Schneider 4730 Business Park Blvd., #44 9649 Musket Bell Cr.#5 US Geological Survey Anchorage, AK 99503 Anchorage, AK 99507 4200 University Dr. Anchorage, AK 99508 Gordon Severson Jack Hakkila Darwin Waldsmith 3201 Westmar Cr. PO Box 190083 PO Box 39309 Anchorage, AK 99508-4336 Anchorage, AK 99519 Ninilchick, AK 99639 James Gibbs Kenai National Wildlife Refuge Penny Vadla PO Box 1597 Refuge Manager 399 West Riverview Avenue Soldotna, AK 99669 PO Box 2139 Soldotna, AK 99669-7714 Soldotna, AK 99669-2139 Richard Wagner Cliff Burglin Bernie Karl PO Box 60868 PO Box 70131 K&K Recycling Inc. Fairbanks, AK 99706 Fairbanks, AK 99707 PO Box 58055 Fairbanks, AK 99711 North Slope Borough PO Box 69 Barrow, AK 99723 I~'~~~~I~~i° ~~ ,~ ~u° • Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Monday, February 01, 2010 1:47 PM To: 'Aaron Gluzman'; caunderwood@marathonoil.com; 'Dale Hoffman'; Fredric Grenier; 'Gary Orr'; Jerome Eggemeyer; 'Joe Longo'; 'Lamont Frazer'; Marc Kuck; 'Mary Aschoff; Maurizio Grandi; P Bates; Richard Garrard; 'Sandra Lemke'; 'Scott Nash'; 'Tiffany Stebbins'; 'Wayne Wooster'; 'Willem Vollenbrock'; 'William Van Dyke'; Woolf, Wendy C (DNR); (foms2 @mtaonline.net); (michael.j.nelson@conocophillips.com); (Von.L.Hutchins@conocophillips.com); alaska@petrocalc.com; Anna Raff; Barbara F Fullmer; bbritch; Becky Bohrer; Bill Walker; Bowen Roberts; Brad McKim; Brady, Jerry L; Brandon Gagnon; Brandow, Cande (ASRC Energy Services); Brian Gillespie; Brian Havelock; Bruce Webb; carol smyth; Charles O'Donnell; Chris Gay; Cliff Posey; Crandall, Krissell; Dan Bross; dapa; Daryl J. Kleppin; David Boelens; David House; David Steingreaber; 'ddonkel@cfl.rr.com'; Deborah J. Jones; doug_schultze; Elowe, Kristin; Evan Harness; eyancy; Francis S. Sommer; Fred Steece; Garland Robinson; Gary Laughlin; Gary Rogers; Gary Schultz; ghammons; Gordon Pospisil; Gorney, David L.; Gregg Nady; gspfoff; Hank Alford; Harry Engel; Jdarlington (jarlington@gmail.com); Jeff Jones; Jeffery B. Jones (jeff.jones@alaska.gov); Jerry McCutcheon; Jim White; Jim Winegarner; Joe Nicks; John Garing; John S. Haworth; John Spain; John Tower; John W Katz; Jon Goltz; Joseph Darrigo; Julie Houle; Kari Moriarty; Kaynell Zeman; Keith Wiles; Laura Silliphant; Marilyn Crockett; Mark Dalton; Mark Hanley (mark.hanley@anadarko.com); Mark Kovac; Mark P. Worcester; Marquerite kremer; Michael Jacobs; Mike Bill; Mike Mason; Mikel Schultz; Mindy Lewis; MJ Loveland; mjnelson; mkm7200; nelson; Nick W. Glover; NSK Problem Well Supv; Patty Alfaro; Paul Decker (paul.decker@alaska.gov); PORHOLA, STAN T; Rader, Matthew W (DNR); Raj Nanvaan; Randall Kanady; Randy L. Skillern; Rob McWhorter; rob.g.dragnich@exxonmobil.com; Robert A. Province (raprovince@marathonoil.com); Robert Campbell; Roberts, Susan M.; Rudy Brueggeman; Scott Cranswick; Shannon Donnelly; Sharmaine Copeland; Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); Sondra Stewman; Steve Lambert; Steve Moothart; Steven R. Rossberg; Suzanne Gibson; tablerk; Tamera Sheffield; Taylor, Cammy O (DNR); Ted Rockwell; Temple Davidson; Teresa Imm; Terrie Hubble; Thor Cutler; Todd Durkee; Tony Hopfinger; trmjr1; Walter Featherly; Williamson, Mary J (DNR); Winslow, Paul M; Aubert, Winton G (DOA); Ballantine, Tab A (LAW); Brooks, Phoebe; Crisp, John H (DOA); Darlene Ramirez; Davies, Stephen F (DOA); Foerster, Catherine P (DOA); Grimaldi, Louis R (DOA); Johnson, Elaine M (DOA); Jones, Jeffery B (DOA); Laasch, Linda K (DOA); Mahnken, Christine R (DOA); Maunder, Thomas E (DOA); McIver, Bren (DOA); McMains, Stephen E (DOA); Noble, Robert C (DOA); Norman, John K (DOA); Okland, Howard D (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Saltmarsh, Arthur C (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA) Subject: Admin Approval CO 228.07 Attachments: S45C-210020113360.pdf Joa'y J Colombie Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 (907)793-1221 (phone) (907)276-7542 (fax) (s~~ Ll ~J 11\\ c; ~d ¡-k ,-01 ;L_\.1i C~J) 11 UT\ ¡ ¡ ! _i__:¡ ¿.-,. ......... f ,.=. ~ f ffi\:~~~~~t~ -~ / / FRANK H. MURKOWSK', GOVERNOR \-._~) A./A~KA. OIL AND GAS CONSERVATION COMMISSION 333 W. ]1H AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 ADMINISTRATIVE APPROVAL NO. 228.06 Re: The application of Union Oil Company of California, operator of the Trading Bay Unit (TBU), to drill and complete the TBU M-16RD Middle Kenai Gas Pool production well. Mr. Kevin Tabler Land/Government Affairs U nocal Alaska POBox 196247 Anchorage, AK 99519-6247 Dear Mr. Tabler: Your application of October 16, 2003, for a permit to drill and complete the TBU M- 16RD well requires exception to spacing requirements set forth in Rule 1 of Conservation Order No. 228. The drilling and completion of the TBU M-16RD well is expected to provide additional gas recovery from the Middle Kenai Gas Pool in the TBU. The Alaska Oil and Gas Conservation Commission hereby authorizes the drilling and completion of the TBU M-16RD well pursuant to rule 3 of Conservation Order No. 228. DONE at Anchorage, Alaska and dated October 28,2003. c Daniel T. Seamount, Jr. Commissioner BY ORDER OF THE COMMISSION - " (~ÇAk~NE.r DEC 0 L1 2003 - I- i / I TONY KNOWLES, GOVERNOR @c-:l~c-;J-e @ _ 1. _ I, ~ F Á,~fÆ~~~fÆ ~ AI~ASKA. OIL AND GAS CONSERVATION COMMISSION 333 W. -rrn AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAJ< (907)276-7542 ADMINISTRATIVE APPROVAL NO. 228.05 Re: The application of Union Oil Company of California, operator of the Trading Bay Unit (TBU), to drill and complete the TBU M-12 Middle Kenai Gas Pool production well. Mr. Shannon Martin Project Landman Unocal Alaska POBox 196247 J\nchorage,AJ( 99519-6247 Dear Mr. Martin: Your application of August 29, 2001, for a pennit to drill and complete the TBU M-12 well r~quires exception to spacing requirements set forth in Rule 1 of Conservation Order No. 228. The drilling and completion of the TBU M-12 well is expected to provide additional gas recovery from the Middle Kenai Gas Pool in the TBU. The Alaska Oil and Gas Conservation Commission hereby authorizes the drilling and completion of the TBU M-12 well pursuant to rule 3 of Conservation Order No. 228. DONE at J\nchorage, Alaska and dated September 7,2001. (flANvN--04U ~ 9~ ~ M. ~ ~~yC6echsli Taylor Daniel T eamount, Jr. Julie M. Heusser Chair Commissioner Commissioner BY ORDER OF THE COMMISSION .~~ ..;r. ~~ ()X¿ 1;;:~ <:-,~~,:",.:,~..-r~\'\';';·"::,;.r.~ ".f~¡- ~ ~-"\:: \ ! (.t.¿,:~þ ~~ ?_ ".o..J. ., f':. ~'!'\ , ..~ \ I;· .... ! , / J : t¡.. {:'.~ :'l\ ,iT ¡.j < \ I : I I \:0:-...... ~ (~ ....'.. I' . J'~.\....., \ ,.,-'>, .I r ,'(-., "i>:t,..-<,.-/ ;;,'\~() '~;:.i~~~;,~ !\I,: \;~~y~.~~;~) \ ~'¿~")'.", ,..,....,.. .. ,', ft " ~/; ~ .~ ¿?' If!? ~\' -<:~;?~'.~:~{;;~~.! S .,~ {.' I ~ '¡ .<, ..:. '..,: I'. II . ." ~ .'I...!, '... ":..{I~ ,., . .. "".. ~ .-' '. '. 1. ' , > '. '.. I l,...· '-' I "' :·:~~~~~if.;¡J~::~;~:j -- ~ TONY KNOWLES, GOVERNOR ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 PORCUPINE DRIVE ANCHORAGE. ALASKA 99501-3192 PHONE: (907) 279-1433 FAX: (907) 276-7542 SèPtember 11. 1997 ADMINISTRATIVE APPROVAL ~O. 228.04 Re: The application of Union Oil Company ofCalifomia. operator of the Trading Bay Unit (TBU). to drill and complete the TBD M-16 ~'fiddle Kenai Gas Pool production well. \ Ir. Rick D. Cross. Sf. Landn1an L nocal Alaska Resources L 0;OCAL Corporation POBox 196247 Anchorage. AK 99519-6247 Dear Iv1r. Cross: Your application of August 12.1997. for a permit to drill and complete the TBU Ivl-16 well requires exception to spacing requirements set forth in Conservation Order No. 228. The drilling and completion of the TBU M-16 well is expected to provide additional gas reco\"ery from the ~'liddle Kenai Gas Pool in the TBD. The Alaska Oil and Gas Conservation Commission hereby authorizes the drilling and completion of the TBU M-I6 \vell pursuant to rule 3 of Conservation Order No. 228. \ ~ ~ Robert N. Christenson. P.E. Commissioner -~, .-- TONY KNOWLES, GOVERNOR ALASKA. OIL AND GAS CONSERVATION COHMISSION 3001 PORCUPINE DRIVE ANCHORAGE, ALASKA 99501-3192 PHONE: (907) 279-1433 FAX: (907) 276-7542 ADMINISTRATIVE APPROVAL NO. 228.03 Re: The application of Union Oil Company of California, operator of the Trading Bay Unit (TBU), to drill and complete the Trading Bay Unit M-9 Middle Kenai Gas Pool production well. Mr. Kevin Tabler, Land Manager Alaska B usiness Unit UNOCAL Corp. P. O. Box 196247 Anchorage, AI< 99519-6247 Dear Mr. Tabler: Your application of July 15 1996 for a permit to drill and complete the Trading Bay Unit M-9 well requires exception to spacing requirements set forth in Conservation Order No. 228. The drilling and completion of the Trading Bay Unit M-9 well is expected to provide additional oil recovery from the Middle Kenai Gas Pool in the Trading Bay Unit. The Alaska Oil and Gas Conservation Commission hereby authorizes the drilling and completion of the Trading Bay Unit M-9 well pursuant to Rule 3 of Conservation Order No. 228. DONE at Anchorage, Alaska and dated July 22, 1996. (. ftf~~.~ IT~kerman Babcock Commissioner David W.. Johnston Chairman~ BY ORDER OF THE COMMISSION BY ORDER OF THE COMMISSION dlf/3.AA22.8 Sincerely" ~/ {)(\'/ ,..... - ~ (~~ / .'~,1 L;~~ie' ~~t~i"t~ Commissioner On September 24, 1990 representatives of Unocal and Marathon met with the Commission to discuss the exception. During the course of the meeting pressures of the perforated and proposed intervals were discussed along with the depletion strategy. The Commission has determined that the pressure differential, between the top (proposed) production interval and the current producing intervals is not enough for significant cross flow should the well be shut-in for a short period of time. It is also apparent that recovery will be enhanced. Therefore, the Commission hereby approves an exception to Rule 2 of Conservation Order 228 to allow the well M-3 completion with more than 1000' (true vertical) between the bottom and top perforations to be in communication in the well bore. Should a shutdown duration longer than one week be imminent, the operator shall install a plug in the isolation packer below the D-3B interval to alleviate excessive cross flow. By letter dated September II, 1990 Unocal requested exception to Rule 2 of Conservation Order No. 228 for well M-3. The exception would allow more than 1000 feet of true vertical depth separation between production intervals to be in communication in the M-3 wellbore. Dear Mr. Anderson: Robert T. Anderson Manager, Lands Alaska Region Unocal Corporation P. O. Box 190247 Anchorage, AK 99519-0247 Re: Exception of Rule 2, Conservation Order No. 228, for v¡ell H-3. 228.3 1'1 o. APPROVAL September 26, 1990 ADM I N 1ST RAT I V E - - - Telecopy No. (907)276-7542 BY ORDER OF THE COMMISSION dlf/3.AA228 L _"c> _.,,-. ....~-_.......- -d-~... ß,incerely t //---ì ".' /~ ' '\ '/; /. .~., -- " , / j ~.. , .. -. ~. ! -, / 1/.____ J /..' // '. / . __ .~........ ! J í ? / .,,; ^ _ ......j , / 'I ... ',/4/,/ ,'/Y', " \ '~ . ,I ''.., _---'. / ,~ ."/>'..¡ . á:--v. Cha-tterton Chairman We have received Unocal's application of March 9, 1990 for vertical expansion of the McArthur River Middle Kenai Gas Pool. On behalf of Unocal and the Working Interest Owners of the Trading Bay Unit you have requested an amendment to Conservation Order (C.O.) 228. Supplementary data was submitted to the Commission on March 30, 1990 and the issue discussed with unit representatives at that time. The Commission has reviewed your request and determined that sound engineering practices will be maintained and the amendment will not result in physical waste. Therefore the Commission hereby repeals Rule l(b) of C.O. 80 as amended by C.O. 228 and reenacts the rule to read: Rule 1. Definition of Pools. (b) The McArthur River Middle Kenai Gas Pool is defined as the accumulation of gas occurring within an interval that is stratigraphically equivalent to th@ interval in Trading Bay Unit K-2 between the measured depths of 1,780 feet and 10,128 feet. Dear Mr. Anderson: Robert T. Anderson Manager, Lands Alaska Region Unocal Corporation P. O. Box 190247 Anchorage, AK 99519-0247 Re: Vertical expansion of the McArthur River Middle Kenai Gas Pool. 228.2 ADM I N 1ST R _A T I V ~ _ A P ,_P R, 0 V A L NO. Telecopy No. (907)276-7542 April 2, 1990 t-1ay 12, 1988 Telecopy No. (907)276-7542 ADM I N 1ST RAT I V E A J PRO V A L N O. 228.1 Re: Auxiliary Casing and Cementing Requirements, l1cArthur River Field, Trading Bay Unit. Robert T. Anderson District Land Manager Alaska District Unocal Corporation P. O. Box 190247 Anchorage, AI< 99519-0247 Dear Mr. Anderson: We have received your letter of May 12, 1988. On behalf of Unocal and the Working Interest Owners of the Trading Bay Unit you have requested an amendment to Conservation Order (C.O.) 228. The Commission has reviewed your request a.nd determined that sound engineering practices will be maintained and the amendment will not result in physical waste. Therefore the Commission hereby amends C.O. 228 by adding Rule 4 to read: Rule 4 Auxiliary Casing and Cementing Requirements \~erever gas bearing strata are expected to exist above a true vertical depth of 2000' t an auxiliary casing string must be set and cemented in accord with 20 AAC 25.030(d)(2) before drilling into the expected gas bearing strata. Before drilling out, this auxiliary casing string must be equipped with blowout prevention equipment installed and tested inconrormance with 20 AAC 25.035(a). The auxiliary casing string is in addition to and not in lieu of the surface casing string required by Rule 2(a) of c.o. 80. (I. ìerelyy-:: / /~ ) / . ~/'.'/." I 11/ //rcco , . / (~?t;4~)· c:- V. Chatter.~~~ Chairman BY ORDER OF THE CO~1ISSION dlf/3.AA228 C ALASSA OII, AI~TD GAS 333 W. 7th AVENUE, SUITE 100 C01~5T' RQATIOI~T COMI~II5SIOIQ ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 CANCELLATION ADMINISTRATIVE APPROVAL NO. CO 228.001 Mr. Tim Brandenburg, Drilling Manager Union Oil Company of California P.O. Box 196427 Anchorage, AK 99519-6427 RE: Cancellation of Administrative Approval CO 228.001 Trading Bay Unit, McArthur River Field, Middle Kenai Gas Pool Rule 4 Dear Mr. Brandenburg: Pursuant to Union Oil Company of California's (Unocal's) request, dated June 30, 2008, the Alaska Oil and Gas Conservation Commission (AOGCC) hereby cancels Administrative Approval CO 228.001, which required that an auxiliary casing string, in addition to the surface casing string required by CO 80, Rule 2(a), be set and cemented before drilling into gas-bearing strata expected above a true vertical depth of 2000' in the Trading Bay Unit, McArthur River Field. This requirement was in response to the blowout and fire that occurred in December 1987. Administrative Approval CO 228.001 was issued on May 12, 1988 at the request of Unocal and the Working Interest Owners of the Trading Bay Unit. Since late 1987, 18 wells have been drilled from the Steelhead Platform, and 1 well has been drilled from each of the King Salmon and Grayling Platforms. None of the wells has encountered drilling or well control problems with any naturally occurring, shallow gas-bearing formations; nor have any wells encountered strata that could have been charged due to the blowout. An extensive series of investigative wellbore tests conducted in the TBU M-25 well did not identify any gas anomalies in the area of the Steelhead Platform as a result of the blowout. Unocal intends to set the surface casing of future wells at 1450' true vertical depth which is above the SZ-11 sand, the shallowest identified potentially producible gas- bearing horizon. Setting a casing at this depth is the standard practice in the McArthur River Field; doing so will insure that potentially productive sands will not be penetrated until casing is set and the blowout preventer stack is installed. Mr. Tim Brandenburg ~ • August 21 , 2008 Page 2 of 2 Eliminating the auxiliary casing is consistent with the requirement that sound engineering practices be maintained meeting the casing and cementing requirements of 20 AAC 25.030(a), the general design requirement of 20 AAC 25.030(b)(1), or the specific design requirement of 20 AAC 25.030(c)(3). This change will not result in waste, risk the contamination of fresh water or safety, or jeopardize correlative rights. DONE at Anchorage, Alaska, and dated August 21, The Alaska Oil and Gas Conservati~ l~ Cathy P Foerster Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for reconsid- eration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for re- consideration must set out the respect in which the order or decision is believed to be erroneous. The Commission shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Fail- ure to act on it within 10 days is a denial of reconsideration. If the Commission denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the Commission grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the Commission, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission other- wise distributes, the order or decision on reconsideration. As provided in AS 31.05.080(b), "[t]he questions reviewed on appeal are limited to the questions presented to the commission by the application for reconsideration." In computing a period of time above, the date of the event or default after which the designated period begins to run is not in- cluded in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. ~ ~ Mary Jones David McCaleb Cindi Walker XTO Energy, Inc. IHS Energy Group Tesoro Refining and Marketing Co. Cartography CEPS Supply & Distribution 810 Houston Street, Ste 2000 5333 Westheimer, Ste 100 300 Concord Plaza Drive Ft. Worth, TX 76102-6298 Houston, TX 77056 San Antonio, TX 78216 George Vaught, Jr. Jerry Hodgden Richard Neahring PO Box 13557 Hodgden Oil Company NRG Associates Denver, CO 80201-3557 408 18th Street President Golden, CO 80401-2433 PO Box 1655 Colorado Springs, CO 80901 John Levorsen Mark Wedman Baker Oil Tools 200 North 3rd Street, #1202 Halliburton 4730 Business Park Blvd., #44 Boise, ID 83702 6900 Arctic Blvd. Anchorage, AK 99503 Anchorage, AK 99502 Schlumberger Ciri Ivan Gillian Drilling and Measurements Land Department 9649 Musket Bell Cr.#5 2525 Gambell Street #400 PO Box 93330 Anchorage, AK 99507 Anchorage, AK 99503 Anchorage, AK 99503 Jill Schneider Gordon Severson Jack Hakkila US Geological Survey 3201 Westmar Cr. PO Box 190083 4200 University Dr. Anchorage, AK 99508-4336 Anchorage, AK 99519 Anchorage, AK 99508 Darwin Waldsmith James Gibbs Kenai National Wildlife Refuge PO Box 39309 PO Box 1597 Refuge Manager Ninilchick, AK 99639 Soldotna, AK 99669 PO Box 2139 Soldotna, AK 99669-2139 Penny Vadla Richard Wagner Cliff Burglin 399 West Riverview Avenue PO Box 60868 PO Box 70131 Soldotna, AK 99669-7714 Fairbanks, AK 99706 Fairbanks, AK 99707 Bernie Karl North Slope Borough Williams Thomas K&K Recycling Inc. PO Box 69 Arctic Slope Regional Corporation PO Box 58055 Barrow, AK 99723 Land Department Fairbanks, AK 99711 PO Box 129 Barrow, AK 99723 //q/~~~ ~ ~~ad/~ • . Page 1 of 1 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Friday, August 22, 2008 11:07 AM Subject: CO 228-001 MGS Cancellation and S104-001 Pretty Creek Attachments: co228-001 cancelled.pdf; sio4-001.pdf BCC:'Dale Hoffman'; Fridiric Grenier; Joseph Longo; 'Lamont Frazer'; 'Mary Aschoff ; Maurizio Grandi; P Bates; 'Scott Nash'; Tom Gennings; 'Willem Vollenbrock'; 'Aleutians East Borough'; 'Anna Raff ; Arion, Teri A (DNR); 'Arthur Copoulos'; 'Barbara F Fullmer'; 'bbritch'; 'Bill Walker'; 'Brad McKim'; 'Brandon Gagnon'; 'Brian Gillespie'; 'Brian Havelock'; 'Brit Lively'; 'Bruce Webb'; 'buonoje'; 'Cammy Taylor'; 'Cande.Brandow'; 'carol Smyth'; 'Cary Carrigan'; caunderwood@marathonoiLcom; 'Charles O'Donnell'; 'Chris Gay'; 'Christian Gou-Leonhardt'; 'Cliff Posey'; 'Dan Bross'; 'dapa'; 'Daryl J. Kleppin'; 'David Brown'; 'David Hall'; David House; 'David L Boelens'; 'David Steingreaber'; 'ddonkel'; 'Deborah J. Jones'; 'doug_schultze'; 'Eric Lidji '; 'Evan Harness'; 'eyancy'; 'foms2@mtaonline.net'; 'Francis S. Sommer'; 'Fred Steece'; 'Garland Robinson'; 'Gary Laughlin'; 'Gary Rogers'; 'Gary Schultz'; 'ghammons'; 'Gordon Pospisil'; Gould, Greg M (DEC); 'Gregg Nady'; 'gregory micallef ; 'gspfoff ; 'Hank Alford'; 'Harry Engel'; 'jah'; 'James Scherr'; 'Janet D. Platt'; 'jejones'; 'Jerry McCutcheon'; 'Jim Arlington'; 'Jim White'; 'Jim Winegarner'; 'Joe Nicks'; 'John Garing'; 'John S. Haworth'; 'John Spain'; 'John Tower'; 'John W Katz'; johnny.aiken@north-slope.org; 'Jon Goltz'; 'Julie Houle'; 'Kari Moriarty'; 'Kaynell Zeman'; 'Keith Wiles'; knelson@petroleumnews.com; 'Krissell Crandall'; 'Kristin Dirks'; 'Laura Silliphant'; 'Lois'; 'Lynnda Kahn'; 'mail=akpratts@acsalaska.net'; 'mail=fours@mtaonline.net'; 'Marilyn Crockett'; 'Mark Dalton'; 'Mark Hanley'; 'Mark Kovac'; 'Mark P. Worcester'; 'Marguerite kremer'; 'marty'r 'Matt Rader'; 'Meghan Powell'; Melanie Brown; 'Mike Bill'; 'Mike Mason'; 'Mikel Schultz'; 'Mindy Lewis'; 'MJ Loveland'; 'mjnelson'; 'mkm7200'; 'Nick W. Glover'; NSK Problem Well Supv; NSU, ADW Well Integrity Engineer; 'Patty Alfaro'; 'Paul Decker'; 'Paul Winslow'; Pierce, Sandra M (DNR); 'Randall Kanady'; 'Randy L. Skillern'; 'rcrotty'; Rice, Cody J (DNR); 'rmclean'; 'Rob McWhorter '; rob.g.dragnich@exxonmobil.com; 'Robert Campbell'; 'Robert Fowler'; 'Robert Province'; 'Roger Belman'; 'Rudy Brueggeman'; 'Scott Cranswick'; 'Shannon Donnelly'; 'Sharmaine Copeland'; 'Sondra Stewman'; 'Sonja Frankllin'; 'Stan Porhola'; 'stanekj'; 'Steve Lambert'; 'Steve Moothart'; 'Steven R. Rossberg'; 'tablerk'; 'Tamera Sheffield'; 'Temple Davidson'; 'Terrie Hubble'; 'Tim Lawlor'; 'Todd Durkee'; Tony Hopfinger; 'trmjrl'; 'Walter Featherly'; 'Walter Quay'; 'Wayne Rancier'; Birnbaum, Alan J (LAW); Crisp, John H (DOA); Davies, Stephen F (DOA); Fleckenstein, Robert J (DOA); Foerster, Catherine P (DOA); Grimaldi, Louis R (DOA); Johnson, Elaine M (DOA); Jones, Jeffery B (DOA); Laasch, Linda K (DOA); Mahnken, Christine R (DOA); Maunder, Thomas E (DOA); McIver, C (DOA); McMains, Stephen E (DOA); Noble, Robert C (DOA); Norman, John K (DOA); Okland, Howard D (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Saltmarsh, Arthur C (DOA); Scheve, Charles M (DOA); Seamount, Dan T (DOA); Smith, Chasity R (DOA); Williamson, Mary J (DOA) Attachments:co228-001 cancelled.pdf;sio4-OOl.pdf; Jody J. Colombie Special Assistant to the Commission Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 (907) 793-1221 Direct Line (907) 276-7542 Fax 8/22/2008 .~7 • Chevron • Shannon W. Martin Union Oil Company of California Land Representative 3800 Centerpoint Drive, Suite 100 Anchorage, AK 99503 Tel 907 263 7872 Fax 907 263 7898 Email smartin@chevron.com RECEIVED VIA U.S. MAIL DELIVERY Email: dan.seamount@alaska.gov January 26, 2010 Commissioner Dan Seamount Alaska Oil & Gas Conservation Commission 333 W. 7`" Avenue Anchorage, Alaska 99501 JAN 2 7 2010 Al~tks 0~ & bat Cans. Commission Am~lttrwgt Re: Union's January 21, 2010, Request for Administrative Approval Pursuant to Rule 3 CO 228 Trading Bay Unit, Steelhead Platform, M-10 Well Dear Commissioner Seamount: On January 21, 2010, Union Oil Company of California ("Union") submitted to the Alaska Oil & Gas Conservation Commission a Permit to Drill Well M-10 from the Steelhead Platform in the Trading Bay Unit. At this same time, Union submitted a request for Administrative Approval pursuant to Rule 3 of Conservation Order 228 which provides: Upon request, the Commission may administratively amend this order as long as the operator demonstrates to the Commission's satisfaction that sound engineering practices are maintained and the amendment will not result in physical waste. The purpose of this .letter is to provide additional support for granting the Administrative Approval previously sought. Rule 1 of Conservation Order 228 establishes 10 acre drilling units for the McArthur River Middle Kenai Gas Pool at the point of penetration of the D-1 sand interval. The TBU Well M-3 wellbore is open to production (though not likely producing) from the D2 and is separated from the planned trajectory of Well M-10 by 357' at 6884' MD of the planned M-10 D2 trajectory. Prior to May 2007, Well M-3 was producing gas from the GGS A-6 and B-2 sands. At that time Well M-3 was flowing at a low gas rate and was loading up with water. Union added perforations in the D-2 in order to increase the gas rate and help unload water. However, due to fill in the well the lower part of the D-2 sand (some of the best looking sand) was not able to be perforated in Well M-3. After the perforating was done the well was unloaded and returned to pre-loading up rate (no incremental gas rate from the D-2 sand was seen). The well flowed for the next year before having loading-up issues again. In November 2008, the D-2 sand was re-perforated and perforations were added in the C-2 sand in Well M-3 in hopes of getting the gas rate high enough to unload water. Unfortunately the gas rate did not increase to a rate high enough to prevent water load up. Based on the production plot it is clear that Well M-3 is not efficiently draining the D-2 resource in this area of the field. Request for Administrative Approval, Rule 3, CO 228 Trading Bay Unit, Steelhead Platform, M-10 Well Page 2 Well M-10 is a planned horizontal well that will target the D-2 sand. The well is planned to cut the total vertical section of the sand to maximize recovery. The advantages of a horizontal well in a low pressure gas sand is that the increased kh exposed to the wellbore allows higher gas rates with lower drawdowns and ultimately should result in low abandonment pressures and maximum resource recovery. Enclosed is a log section from Well M-3 showing the perforations in the D-2, a wellbore schematic of Well M-3, and a natural gas production curve of Well M-3. For the foregoing reasons, Union respectfully requests Administrative Approval pursuant to Rule 3 of Conservation Order 228 in connection with the drilling of Well M-10. Please contact the undersigned with any questions regarding this request, or, for technical questions, please contact Mr. Gary Orr, Petroleum Engineer at 263-7800. Very truly yours, c'""` ~ `, _ _. ~~~ Shannon W. Martin cc: Gary Orr, CVX Steve Davies, AOGCC (steve.davies@alaska.gov) Enclosures Union Oil Company of California veww.chevron.com {•_': M-03 - 5-07 -Added Perf's -~- - ~,,~ : c~ - - D1 ~~'~~ to D-2 and -- unloaded well. ' __ After unloading . _ well the well ~ ', returned to normal decline rate. No _- seen incremental - i f D 2 d on o - pro uct sand . --- - - - i l 11-08 - ' _ Reperforated the D-2 and added 5-09 Unlo aded _ = perforations in the 1 well - '_:.._ +-- ------- - 2 d - - san . C- ill ff + i d - - uct on st o -- Pro -- projected decline -, t -- e. ~ - ra - ~ - - ~-- .___ _. ~ .. -. ~~ -. -- .. .b ..-..+ ~. n~ n. ~. .Y ti ~. ,v. .-a ~~. ~i ~_ 13 1l 15 16 1' 18 13 ~J • l 20" Casing p< 2661'-261 MAX HOLE ANGLE =33° @ 5002' RKB to TBG Head = 74.4' KB to MSL = 160' ~ ~ Steelhead M-03 Schematic as of 4/1/09 CASING AND TUBING DETAIL SIZE WT GRADE CONN ID TOP BTM. 20" 133 X-56 .18.730" Surface 937' 16" 75 K-55 15.240" Surface 1451' 13-3/8" 61 K-55 12.515" Surface 2453' 13-3/8" 68 K-55 12.412" 2453' 2712' 10-3/4" 55.5 N-80 9.760" Surface 153' 10-3/4" Sl L-80 9.850" 153' 536' 9-5/8 47 N-80 BTC 8.681" 536' 7268' Tubin 4-1/2" 12.6 L-80 3.958" Surface 3085' JEWELRY DETAIL NO. De th Len th ID Item 1. 436' 5.20' 3.958" Flow Cou lin 2. 441' 8.64' 3.958" GLM 3. 450' 5.19' 3.958" Flow Cou lin 4. 455' 6.09' 3.813" SCSSV 5. 3,044' 1.61' 3.813" X Ni le 6. 3,090' 3.85' 6.00" SC-I L Packer (8.5" OD 7. 3,099' 2.14' 6.380" Slidin Sleeve 8. 3,124' 0.78" 4.98" XO 9. 3,185' 101.30' 4.950 5-1/2" OD Screens 10. 3,290' 4.57' 3.725" Sna Latch and SC-1L Packer (Pkr 6" ID; 8.5" OD) 11. 3,299' 2.13' 6.380" Slidin Sleeve 12. 3,324' .77' 4.950" XO 13. 3,360' 101.37' 4.950" 5-1/2 OD Screens 14. 3,462' 4.14' 3.00" Sna Latch and Model D Packer 8.5" OD I5. 5032' 12.4' 6.00" BWH Packer 16. 6600' S' 6.00 BWH Packer CURRENT PERFORATION DATA (MD) Zone To Btm Date S f Comments A-6 3,202' 3,278' 9/17/93 12 B-2 3,370' 3,430' 9/15/93 12 B-2 3,440' 3,450' 9/15/93 12 C-1 4,178' 4,226' 3/27/09 6 C-2 4,326' 4,334' 11/18/08 6 C-2 4,348' 4,364' 11/18/08 6 D-2 4,955' 5,001' 5/9/07 6 Re erfed 11/18/08 1001' (DIL) Cement Plug: 5002' - 6600' - 8/6/93 Cement Plug: 7169' - 7283' - 8/2/90 M-03 Actual Schematic Revised 4/1/2009 CVK PBTD =5002" TD = 7291' ~#6 Chevron June 30, 2008 • Mr. John Norman Commissioner Alaska Oil & Gas Conservation Commission 333 W. 7th Avenue Anchorage, Alaska 99501 Re: Conservation Order 228, Rule 4 Dear Commissioner Norman, ~1U!~ 3 0 20Q~ Alaska iii ~ ~~~ duns, Col~missgn ~l~u~;cragp Union Oil Company of California requests that Rule 4 of Conservation Order 228 be rescinded through the Alaska Oil and Gas Conservation Commission's Administrative Approval process. The Steelhead Platform experienced a blowout and fire while drilling the M-26 well in December of 1987. In response to the blowout, Union Oil Company requested Rule 4 be added to Conservation Order 228. Administrative Approval to add Rule 4 was granted on May 12, 1988. See Attachments 1 & 2. Of the existing Trading Bay Unit production platforms, the Steelhead is located nearest the structural high of the McArthur River Anticline. Therefore, it represents the most likely location to encounter abnormally pressured strata within the Grayling Gas Sands. A total of eighteen wells have been safely drilled from Steelhead since the M-26 blowout. Sufficient data has now been obtained to characterize and understand the shallow gas hazard in the vicinity of the Steelhead Platform. Abnormally pressured strata do not appear to exist. The additional casing string required by Rule 4 is not necessary to safely drill from the Steelhead Platform. Conventional well designs that include a single surface casing complete with BOP equipment installed would provide sufficient secondary well control while drilling below suspected gas bearing strata. Attached is a summary evaluation of drilling and geological data assembled from multiple sources and drilling records. Should you have any questions regarding this request, please don't hesitate to contact Jim Rose at 907-263-7637 Sin I ~mr Timothy C. Brandenburg Drilling Manager TCB: sk Attachments: 1. May 12, 1988 Letter from Unocal to AOGCC 2. May 12, 1988 Administrative Approval No. 228.1 3. Summary Engineering Evaluation of Steelhead Shallow Gas Hazards and CO 228 Rule 4 Cc: File Timothy C Brandenburg Union Oil Company of California Drilling Manager P.O. Box 196427 Anchorage, AK 99519-6247 Tel 907 263 7657 Fax 907 263 7884 Email brandenburgt@chevron.com Union Oil Company of California / A Chevron Company Page i of i Unrr,nl vu & Gas Owr• r~~a al CCrGryra~or r 5 7~a fa...:~ Arr h vu, r,l 7 W i3 ft`r~; U~O~CAL;~`. •ua i2, 1?ii:i Mr. Chat 4r. t:hattprtrn 4lahortT.Andercon AlaSk] 3i1 ~nC) ti'g5 SonS~t'Vatlon ;Asti L mi 14'ra.c,>r Na=kar ,'r ,. CQIGmIi. a0t7 3~l'+1 ~0^C11p_ ine Crve unClitJL'ri.r_~P,., ~:( 9951-~i.9~~ Mcut?TFift N1'vER =ir1.l.' Stakes of r~l~ska A~,C;Ii~']i:~c:n t'or wr:r=Rent lu Culrservatlun arc~_~ r~~,mbcr 7?~ ~ ~°ur M l':h~-terCun: .-." 1 ., ~ _.. I~ r; ... ... ~ . ~ . r~i': 1 Lrv,on n,.. Cu u,r<n;~ {If Calirur*^ia «~nuc.al}, as cpr.^at,;r o° the Tr-F.f~~a ~a~ (,hir_ and nn ..~t~.~lf ~f tl~~ Works x~ _rltere;* ;ancrs, r~_~.rl;r. =1,u the ui1 ,~ ;,. n:F'lS_ivd.,~,'tr} I.rr.itil9ril~ ~4.-RI1~!~Str.°iP.l'4@ li~7r04i~ pT.'.X:r^.55 ttl A!'Y~"^' f`t)rt5?T'vd- r i:;~ ,vTCt_` FJCt, ~cS =:'+ :~'~' r[; B ?~~ S ':ci~.7N.y: Nr I_le ## auxi t i ar•~ l:~girr and (:~il~ it i r•~y Rpqu ` r?RCnt~ 'n~^wcYVer gas r..=.3ri~ ~ sanl~ am exFf.^.~Q.i to a..xist a:~:wr. ~ lra.~e +,=rti~a 7 d~uth ~Y 1CGr1~, a, suxliary ras_ng st«trg •n:tt t,e s~° and r_rmentorJ in accnrd wiF., ~[; ,~aC ~G V":~`.d}l~) hcYr.,re trilling :nto t~'e exprrt:ed g;~s h=a_inr~ sl'uta. RefurF d.illiii) lk.L thf_5 a:Axili.ury GaS:.nt~ 5tr1liC1 •o.r5 ut, _q~xuPo"d ~Yith hi7wilUt prrsr=_ncicn egn~p~ent inst~lla~, and te3Lcd ir, ccn- ormarr~{: Wi#n ~+ KQ.s; 2', r13~(~), Tli~ auxi I.i~ry _•ainq str:~,~ is in ariri- tinn a=>;: ^a:. -gin liPla _P the ~=~rPare Ca:>iny Strinr~ required hy' zul? 1 of F'ersnnnel from ~.na^al, Mar~th:~~a anC !Y~:I'~ as l;~r;rator and sI.~U-~p~rarr~rs :~- s~,eCty ly ;~ ttr., Trai :-r 3Gy Untt 4r> a'oailab_e '.I~ neet with yrx: z~nc~rnim._, any r~IJ =inns ' yuu may h;zvc, Your revvr7iJlr. conl_ar~-anon ~P =1ils aFpl#..^.~ti~rl is r?.ue=ted, ~Y~rJ truly }•ou_s, 'C~T:tlrib yf- ~ :•.r ,fti~'''Yf -- ~ ' I #l::ne:.t T. ~rrdcr5r~n oo: ~?~t.ho~r di.i on~;any, a~Yy'lr. J7nes ARC1 Alaska, Inr.,, ,~rstr Kcw•in Attachment 1: Letter to AOGCC requesting the addition of Rule 4 • • (~~t?Il Ltb~~4~ A >7 ~1 1 ti.__L S `x FI ,~ T :f b` ~:.,_A F P B p ',' fs L ~; r). 22f . 1 I.C. Atxxili;ar-i ~.=sinQ arts C°~1L`ttt,,p, R~~ctu;rr:m~itCt,, t~iC.~pthur l2i.y~t• Fic 1d, Ti•ytsli.~g i?a~ 'ecaic. [t<5bert T~ luadersrnl ~lstrict Land ti~rtRg~r A1ask~ t)i_st~-ict Ui,c~cal Ctrp~ratiflr~ P. G. ~srr, 191)247 ~~~chirzge, e~i{ 99519-0241 JCaT" F'F. eSslCtfir.3(ltls wie hstVr~ recet•ed your Setter uL ld7yt2, i4f~8. tYr, bela~li of CTanvcal rt,~d t~s: 4fnr~Cita~ l:atcr~~bt thrtior5 ~f th~L Tra~lin~ B,a~~ E;a~ir 'r~t1 1-uve rt~citieAtrti ~:a 7T13i1C[RP.*:;- t;~ OnnR~r~rati~tt Or~1cr {C. (:~.) "2 s, 2'nP ':f3nunl .aivn has rc;ri~w~s.. vn.:r. i'eque~•t a~~d det~r'tal.n~r! that. ~ , ~~und rn~itaeetiti~ gracticr?~ will i~t, ;'npinCa9ne~3 dttn I_hk: ~YLn.F•~islwert[ L•Fili t]i7C r~sL;lt i:i Pha33c:Ffi. wa:Sta. TLiz~•e~[,rs~ the ~OLVni~SSLUit I,r:reL,}r .R.t~cnds t:.i,}, :'~i3 ~,v ailtilu~ ~„lr_ /~ ?~ul~ ~`._ Auxiiie,Y}~ t,.:siu~ :ind ?a~u~~,icing hequi_rcm,~nra ;,'t,Fr~'t~'~'r pz~ UF~ring a?:rFta e,ra rxp~cteil to r:ct~t :boti~sa a r,-u~ •y~rriee,l dc~th of .'ttt}t7' , <nt r~axsi<tr•~ t_r,ain~ ^tri,x u,us ~_ bc~ ~ t: end C~~e„t`~u in see^urst „ith i. ;? f~tli, 2S.i)3G~~1}{'S h++~ucc= L~'ii11u ";=~a ?-hflek~,e::t~.d ~;~r, ~tiaY•-a~ stixha. ;sei„re driiLi,r•a uut, ;.h~g tucc~iarw ~ .sinb atr.itah. c~:ar;r ~t ~=auipzcast with t5lntasstatJprevF.:?r:iou e{.;~tiou~:nt an:t.•~1.1eci ~;r-d tc:,r_ed i_a c=,n-n2:;,:ar,c_r_ with ?{? ?L;C ",.'J3 a (t,1 T2a~ a;txillLy c nor. a~ s"rir.. i ~, i:~ x.t stds:itic:~ , r~nrl rr~ i,~ lieu ut c_Fe~: ~utlr,c.... c~nin~ [ri:, rec~uirPd ;~} I.,11~± '~(:l! ,,r i;.C. ~s0_ M~s~rel,;l ~..---; ,: ~ . ~' `J~ _ ~ - CIxH iYtOr, n BY (?N€aGic {lI~ Cf~L rOtl.3ISSIt)ri Attachment 2: Administrative Approval of Conservation Order 228, Rule 4 Chevron Engineering Evaluation of the Steelhead Shallow Gas Hazard and the Effects of Conservation Order 228, Rule 4 Objective Conservation Order 228, Rule 4 was implemented in May of 1988 in response to the Steelhead M-26 blowout. The objective of this report is show that Rule 4 compliant well designs are not necessary to safely drill wells from the Steelhead Platform or other platforms in Trading Bay Unit. Executive Summary Shallow gas is present in the vicinity of the Steelhead Platform. That hazard naturally exists and was not substantially changed by the M-26 blowout in December of 1987. The pressure gradient near the Steelhead Platform is at or near normal. Drilling records indicate that the pressure gradient is manageable during drilling operations with primary well control methods utilizing mud densities in the 9.0-9.4 ppg range. Evaluation of the events leading up to the M-26 blowout indicate that the blowout was induced by human error and could have been prevented by applying standard and accepted drilling practices After the successful drilling of 18 post M-26 blowout wells, the shallow gas hazard near the Steelhead has been thoroughly characterized and is well understood. Based on data now available, well designs compliant with conservation Order 228, Rule 4 are not necessary to safely drill from the Steelhead Platform. Brief Steelhead History The 48 slot Steelhead Platform was set in 1986/1987. It is located close to the structural high of the McArthur River Anticline in approximately 185' of water. The first well (M 1) was completed in August of 1987. In December of 1987 the platform experienced a blowout and fire while cementing the intermediate casing of the 4t" well (M- 26). The necessary repairs and relief well drilling were completed in 1989. In response to the M-26 blowout (and at the request of Union Oil Company (see Attachments 1 and 2)), the AOGCC amended Conservation Order 228 by adding Rule 4 as follows: "Wherever gas bearing strata are expected to exist Above a true vertical depth of 2000', an auxiliary casing string must be set and cemented in accord with 20 AAC 25.030J(dJ(2J before drilling into the expected gas bearing strata. Before drilling out, this auxiliary casing string must be equipped with blowout prevention equipment installed and tested in conformance with 20 AAC 25.035 (aJ. The auxiliary casing string is in addition to and not in lieu of the surface casing string required by Rule 2(aJ of Conservation Order 80." Chevron • Engineering Evaluation of the Steelhead Shallow Gas Hazard and the Effects of Conservation Order 228, Rule 4 The amendment was enacted on May 12, 1988. Union Oil Company currently operates 3 platforms in Trading Bay Unit that are affected by Rule 4. They are the Grayling, King Salmon, and Steelhead. Gas bearing strata are not believed to exist above 2000' TVD in the vicinity of the Dolly Varden Platform. A total of 18 wells have been drilled from Steelhead since M-26. Well designs subsequent to M- 26 were modified to be compliant with CO 228, Rule 4. Engineering Evaluation of the Steelhead Shallow Gas Hazard The McArthur River Field is formed by a large anticline. The Grayling Gas Sands are the shallowest reservoir quality strata over the structure and they extend from approximately 500' TVD ss to approximately 8500' TVD ss. The reservoir strata extending to 2000' TVD all fall within the "SZ" series of sands and coals. Figure 1 is a representative structure map at the SZ11 horizon showing the location of the platforms. • • Chevron Engineering Evaluation of the Steelhead Shallow Gas Hazard and the Effects of Conservation Order 228, Rule 4 O pqO O h N O O H O O O CD Q H O O O CpV 4 0 w 0 d 0 N U yO O O O N U O O O L ~'.`.^J L. ~~3J L .JIJ . .... L~4:.. . _... L vJ7. a~~J_J LLL.... LL9 _._ To SZ11 ST TVDsubsea Map _ ~ - - ~ fm'`~` °Z Bench 1:12F~000 i-p.~•nnnarr~ Conrov~~n.. ~:_• 5211£T 100 72 J~~7S Figure 1, McArthur River Field structure map at the SZ11 horizon Chevron Engineering Evaluation of the Steelhead Shallow Gas Hazard and the Effects of Conservation Order 228, Rule 4 As mentioned, M-1 was the first well drilled from Steelhead. Initial shallow open hole log interpretation of M-1 indicated the presence of shallow gas in the SZ4, SZ6, SZ8, and SZ10 sands. Unfortunately, the data is somewhat questionable due to hole rugosity. Figure 2 is a section of the open hole log from the M-1 wellbore. 20" S; S: S: S~ Si S~ S~ S~ SZ SZ SZ SZ SZ SZ SZ SZ1 I ikM-U1 MD 4 00 U AMMA 100 00 MD Lf` ' 0 0 00 ,z._ _URH4- - ~_g5 663 P 0. 700 HOE -- - - - - - - - zo• sHOe 0, :OCT - ' 80 ' ~ szocr - ~ - - --- ZI :1 CT - 3 ~ _ _ _ ----- -- --- - ~ _ - -- -- - ,~, SZ soo 2CT _ - - _._ _ ._--- _ ~~ Z: 3CT ~ - L = ~ ST ~ ._ _ -_ __- - _ _.-- ~ sraci 4 SZ£ szasT SZ~ 4CT szacr Z4 5CT 6ST szscr szasr Z° 1100 ZE ~S iCT ---' - ~ SZ6S6 s'zscr SZ6 1200 7CT 3ST - _ I SZ7 S28ST SZ8 3S SZBSB o Z O 3CT s acr 1300 ZS ICT _- 1 - ~ ecT Z9~ 1400 iCT ~ - - _ - ,,~,~~ SZ11 - 1500 - __ 1581 -- SHOE ICT CT CT CT ST CT CT ST 56 ~T ,.T iT i6 :T ;T iCT Figure 3: Steelhead M-1 open hole logs. The red arrows indicate gas accumulations pre-blowout (KB = 160' AMSL) Chevron Engineering Evaluation of the Steelhead Shallow Gas Hazard and the Effects of Conservation Order 228, Rule 4 Figure 4 is a table of the mud densities and corresponding depths of the 15+ three Steelhead wells. M-Ol M-02 M-25 TVDSS Mud Mud Mud (ft) Density Density Density (PP9) (PP9) (PP9J 870 8.7 8.8 8.7 1050 8.7 8.9 8.8 1085 8.8 8.9 8.8 1130 8.8 9.0 8.9 1225 8.8 9.0 8.9 1480 8.8 9.2 9.1 1600 8.8 9.3 9.1 1740 8.8 9.4 9.2 1820 8.9 9.4 9.2 Figure 4, Tabulated mud densities for the first 3 wells drilled from Steelhead As can be seen in Figure 4, the strata appear to be normally or near normally pressured. The gradual increase in mud densities with depth is likely attributable to the increasing drill solids content of the spud mud as drilling continued. This is a natural tendency and is generally accepted (to a limit) as it contributes to hole stability. Nowell control issues were noted during the drilling of these 3 wells through the intermediate casing point. The design of the shallow portion of the M-26 well was not substantially different than that of M-1, M-2, or M-25. Form 10-401 for M-26 was submitted on or about October 16, 1987. It indicates a planned set depth of the intermediate casing at 1900' TVD. Interestingly, plans to deepen the intermediate casing setting depth to 2235' TVD were received by the AOGCC and were noted on the approved PTD issued on November 1 1, 1987. There were no well control incidents noted during the drilling of the surface or intermediate hole sections M-26. The intermediate hole section of M-26 reached a TVD of 2232' with a mud density of 9.4 ppg though records indicate the mud density was 8.8 ppg at 2052' TVD. The blowout was initiated by under balancing the wellbore during primary cementation of the intermediate casing. Records indicate that 200 bbls of un-weighted fluids were pumped ahead of the cement to facilitate mud removal and improve cement bond. It is estimated the lighter column of fluid Chevron Engineering Evaluation of the Steelhead Shallow Gas Hazard and the Effects of Conservation Order 228, Rule 4 reduced overall hydrostatic pressure gradient by 0.5 to 0.7 ppg. It is reasonable to conclude that the kick and subsequent blowout were induced by human error. After the M-26 blowout was controlled, additional efforts were undertaken to determine if any of the shallow strata were charged by the blowout. The M-25 wellbore was de-completed and several of the shallow sands were drill stem tested with negative flow results. Depth (Interval) Remarks 1117'-1122' (SZ6) Slight blow with 930' water column 1184'-1189' (SZ7) No gas flow 1236'-1241' (SZ8) No blow, no flow 1295'-1300' (SZ9) Good blow then liquid returns (perforated 120 psi under-balance) Figure 5 shows the mud densities used to drill the M-26 and M-26 relief wells. M-26 Mud M-26 Relief TVDSS Density Well Mud (ft) (ppg) Density (ppg)** 870 8.6 8.5 1050 8.8 8.6 1085 8.8 8.7 1130 8.8 8.7 1225 8.8 8.8 1480 8.8 8.9 1600 8.8 8.8 1740 8.8 8.7 1820 8.8 8.7 ** MW adjusted to account for 54' lower RKB (+98' vs. +152') Figure 5, Tabulated mud densities for the M-26 and M-26 Relief Wells Simply based on the M-25 DST information and Table 5, it doesn't appear that the blowout changed the pressure gradient of the shallow strata in the vicinity of M-25 or the M-26 relief well Perhaps the most compelling information supporting the predictable nature of the shallow gas hazard is the lack of well control problems during the drilling of the 18 successful wells since the M-26 well. M-17 was the most recent well drilled from Steelhead. It was completed in December, 2007. Interestingly, mechanical problems delayed primary cementation of the surface casing at •' Chevron Engineering Evaluation of the Steelhead Shallow Gas Hazard and the Effects of Conservation Order 228, Rule 4 742' TVD SS for approximately 23 hrs. The hole maintained a column of 9.4 ppg mud with no gas noted on connections, circulation, or bottoms up. The casing was cemented successfully when the necessary repairs were completed. The intermediate section was drilled, cased, and cemented uneventfully. Figure 6 is a graphical representation of multiple Steelhead well casing points. Interpretation of seismic, log, and drilling data generally concludes that the SZ1 1 is the shallowest of the potentially productive, gas bearing, Grayling Gas Sands. Note that post M-26 well designs incorporate an intermediate casing set at or above the SZl 1 Sand. Steelhead Well Name 0 0 O N N ~ O N O ~ M O ~ ~ N r O -600 'e -s o sz ~ sz -s s ao 79 -8 8 -1000 N -1200 D - - 91 95 97 ~~''~ 13tH1307 -1293 -1303 Y;2p ~ -+.312 -1299 -17_92 04 -1400 t a d -lsoo ^ Surface Casing Depths laoo De ths ^ Intermediate Casin - g p o SZ11 Sand Tops ~, 2 - 000 -2200 _ - __ _ Figure 6, Comparison of Steelhead Casing Depths and SZ11 Tops Chevron Engineering Evaluation of the Steelhead Shallow Gas Hazard and the Effects of Conservation Order 228, Rule 4 Figure 7 is a table summarizing the mud densities used while drilling some of the Steelhead Wells. Surface Facility and Well SZ1 1 Depth Casing Depth Name (ft TVD ssl Ift TVD ssl Surface Hole Intermediate Section Mud Casing Density Depth (@ TD, ppC1) (ft TVD ssl Intermediate Hole Section Mud Density Mud Density @ 2000' TVD (@ TD, ppC1) (PPg) Steelhead M-O1 -1291 -610 8.7 -1885 8.8 NA Steelhead M-02 -1295 -575 8.9 -1635 9.4 9.4 Steelhead M-25 -1297 -627 8.8 -1748 9.2 9.3 Steelhead M-26 -1290 -624 8.8 -2068 9.4 8.8 Steelhead M-09* -1312 -677 8.9 -1290 9.4 9.5 Steelhead M-16* -1292 -606 9.1 -1017 9.5 9.4 Steelhead M-13* -1318 -793 9.1 -1287 9.0 9.2 Steelhead M-7* -1303 -766 9.0 -1260 9.2 9.4 Steelhead M-28* -1281 -829 8.9 -1283 8.9 9.4 Steelhead M-27* -1283 -819 9.1 -1249 9.2 9.2 Steelhead M-30* NA -878 9.1 -1277 9.1 9.3 Steelhead M-12* -1304 -700 9.2 -1331 9.4 9.3 Steelhead M-17* -1345 -742 9.3 -1238 9.3 9.3 * Post M-26 Blowout Figure 7, Tabulated Steelhead Casing Shoe Depths and Mud Densities And finally, Figure 8 shows a circle projected to 2000' TVD encompassing all the Steelhead well penetrations. The area of the circle is approximately 68 acres. It is unlikely that abnormally pressured strata above 2000' TVD are present but yet unidentified. s Chevron Engineering Evaluation of the Steelhead Shallow Gas Hazard and the Effects of Conservation Order 228, Rule 4 -ne nn SRI Circle Diameter is Approximately 1935' at 2000' ND Area = 68 Acres All Wells are Plotted to 2000' TVD te0p 5170 1?00 w7o wo Asa s7o aso ? soo ~- ,70 0 .~ -zo 470 EDO MO Figure 8, Circular Area Encompassing all the Steelhead Well Penetrations at 2000' TVD v . ~~ Chevron Engineering Evaluation of the Steelhead Shallow Gas Hazard and the Effects of Conservation Order 228, Rule 4 Conclusions Over the years, a substantial amount of work has been done in an attempt to understand the shallow gas hazards in the vicinities of the Grayling, Steelhead, King Salmon, and Dolly Varden Platforms. Some of this work was done prior to setting the platforms but the majority has been done since drilling commenced. The data indicates that the shallow strata in the vicinity of the Steelhead Platform are not abnormally pressured to any substantial extent. However, the G-10 and M-26 blowouts, both of which were the result human error, stand as proof that drilling hazards exist. Trading Bay Unit and McArthur River field in particular, are mature oil and gas development areas. The shallow gas hazards have been identified, evaluated, and appear to be well understood. Rule 4 of Conservation Order 228 was implemented in response to the M-26 blowout. However, 18 wells have been successfully drilled since the M-26 blowout without a well control incident. Conservation Order 228, Rule 4 is unnecessarily restrictive and adds substantially to drilling costs while providing limited additional security. Conventional well designs can allow wells to be drilled safely without the additional casing string as required by Rule 4 of Conservation Order 228. #5 "~ Unocal Alaska Union Oil Company of Ca,,~ 909 West 9th Avenue, P.O. Box 196247 Anchorage, Alaska 99519-6247 Telephone (907) 276-7600 Fax (907) 263-7698 UNOCALe Kevin A. Tabler, Manager Land/Government Affairs October 16, 2003 Mr. Steve Davies Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 APPLICATION FOR SPACING EXCEPTION Trading Bay Unit, Steelhead Platform, M-16 RD ADL-18730 ADL-17594 Dear Mr. Crandall:- Union Oil Company of California (Unocal) hereby submits this Application for Spacing Exception to drill the referenced "M-16 RD" well in the Trading Bay Unit. Our anticipated spud date is November 1,2003. In accordance with 20 AAC 25.005 (a), a Permit to Drill and associated filing fees will be submitted later this week. The M-16 RD well is situated within the same governmental section as the M-9 well and other wells, requiring a spacing exception in accordance with 20 AAC 25.055 (a)(4) and if the results of the M-16 RD well are successful, will be within 3000' of a well capable of producing from the same pool. This regulation provides in pertinent part, "not more than one well may be drilled to and completed in that pool on any governmental section; a well may not be drilled or completed closer than 3,000 feet to any well drilling to or capable of producing from the same pool." At the date of this mailing, in accordance with 20 MC 25.055 (d)(l), notice of our intent to drill has been sent by certified mail to all owners, landowners, and operators of all outlying properties within 3,000 feet of the M-16 RD well. A copy of this application (landowner notice) along with a certified mailing receipt has been attached to this application. Additionally, the owners and the landowner (State of Alaska) are the same on both sides of all property lines associated with this well. "-' Pursuant to 20 AAC 25.055 (d)(2), enclosed is a plat, identified as Exhibit "A", which shows the location of the well for which the exception is sought and all adjoining properties. Also enclosed, Exhibit "A-I" identifies the owners, landowners and operators associated with ~he lease (ADL-18730) and adjoining lease (ADL-17594). Pursuant to 20 AAC 25.055 (d)(3), an affidavit is enclosed stating the undersigned is acquainted with the facts and verifying that all facts are true. It is requested that the Alaska Oil and Gas Conservation Commission approve an exception to Rille 1 through administrative approval under Rille 3 of Conservation Order 228 for the drilling of the proposed M-16 RD well. If you require additional information regarding the M-16 RD well, please contact.Mr. Skip Coyner, drilling engineer at 263-7690, or you may contact the undersigned at 907- 263-7600. Enclosures cc: Marathon T9N R13W ~--~-------~-- I I I M+ I 29 27 ') M-19RD ~DL-17594 I I , , , , I I , I , I I I 32 33 34 14 ~ .I M-~4RJ ~-02 . I I I , I I , I I I . ~------~-------------~--------------------r------------------________________________________--,-___ Exhibit A .--- '- EXHIBIT "A-I" LEASE LANDO~R OWNERS OPERATOR ADL-18730 State of Alaska (Sections 26 Wl/2, 27,28,33,34 T9N-RI3W) Unocal, Unocal Marathon P.O. Box 196168 Anc., Ak 99519-6168 ADL-17594 State of Alaska (Sections 16, 17 S/2,NE/4, 20,21,29,30,31,32 T9N-R13W) Unocal, Unocal Marathon P.O. Box 196168 Anc., Ak 99519-6168 --"~- -' VERIFICA TION OF APPLICATION FOR SPACING EXCEPTION COOK INLET, ALASKA ADL-18730 ADL-17594 M-16 RD well I, KEVIN A. TABLER, Manager, Land and Government Affairs, Union Oil Company of California, do hereby verify the following: I am acquainted with the application submitted for the drilling of the M-16 RD well in the Trading Bay Unit. I have reviewed the application submitted for the exception to 20 AAC 25.055 (a)(4) and all facts therein are true. I have reviewed the plat attached to said application, and it correctly portrays pertinent and required data. DATED at Anchorage, Alaska this 16th day of October, 2003. -~~.j~ ~J:¡ A. Tabler Mgr., Land & Govt. Affairs STATE OF ALASKA ) ) ss ) 1HIRD JUDICIAL DISTRICT SUBSCRIBED TO AND SWORN before me this 16th day of October, 2003. ~\\\\\\'" "IIIIIII/¡¿ ~J. A. 8}: ~.;, ~ * ~ :............~~ ~ ~ .:..~~.. ~ ~ § ..... · d"" .. iA:.. Iii ~ ~....¡. \, ~ æ i~()TþJl~i I I.v.\. PUBLIC/1f' ~~ ·0 I::. Å"o£!' eP~··...~ó. 1". 'J!f:o".~~ ~ '" l"i·ör:°þ..\.'t-- wnllllllll"\\\~ ~~~_ CLik,-~k JUoTARY PUBLIC IN AND FOR THE STATE OF ALASKA . My Commission expires: ~... 1'/ - 0" Exhibit A 14 ~--~---------¡--- I I I I I I I I , I I I I , I I I I . ~------~~------------~--~--~--------r------------------_______~_____________________--.-___ I I I , ( M/-~4R..j ~-02 : ~ 33 32 --'------,------~----_._----------- ,.\DL-17594M - 19 R D 27 29 T9N R13W ¡ '~ EXHIBIT "A-I" LEASE LANDOWNER OWNERS OPERATOR ADL-18730 State of Alaska (Sections 26 Wl/2, 27,28,33,34 T9N-R13W) Unocal, Unocal Marathon P.O. Box 196168 Anc., Ak 99519-6168 ADL-17594 State of Alaska (Sections 16, 17 S/2,NE/4, 20,21,29,30,31,32 T9N-RI3W) Unocal, Unocal Marathon P.O. Box 196168 Anc., Ak 99519-6168 '~ VERIFICATION OF APPLICATION FOR SPACING EXCEPTION COOK INLET, ALASKA ADL-18730 ADL-17594 M-16 RD well I, KEVIN A. TABLER, Manager, Land and Government Affairs, Union Oil Company of California, do hereby verify the following: I am acquainted with the application submitted for the drilling of the M -16 RD well in the Trading Bay Unit. I have reviewed the application submitted for the exception to 20 AAC 25.055 (a)(4) and all facts therein are true. I have reviewed the plat attached to said application, and it correctly portrays pertinent and required data. DATED at Anchorage, Alaska this 16th day of October, 2003. ~~<J~ ~in A. Tabler Mgr., Land & Govt. Affairs STATE OF ALASKA ) ) ss ) THIRD JUDICIAL DISTRICT SUBSCRIBED TO AND SWORN before me this 16th day of October, 2003. ~\\\\\\\'IIíIIJI/I//¡¡ ~J. A. 87: I~ ~ ~~ :...~"·.....øiA~~ ~ 9'.~..~sIon Ð.~.:.~ ~ §..::> . cf" -~ . .c:.. ~ §"") .. ~ '10 ·.r ~ æ¿ [ÑOTARY\ ~ ~ w\ PUBLIC/ *~ ~'T" . ~ · ~ i!li:: ~tP~·.~eb. 14.'l.~.-'·~~ §§ -",~ ~ "i·Öf:·~'-"'~ ~IIIIIIIIII \\\\\\\~ ~~-r4. Cll~ iOTrn-PUBLIC IN AND FOR THE STATE OF ALASKA My Commission expires: .;J..- I L./ - 0 " Check type of mail or service: Affix Stamp Here (If issued as a ~ Certified eJ Recorded Delivery (International) certificate of mailing, [J COD [J Registered or for additional f\/' n / 0 Delivery Confirmation ~ Return Receipt for Merchandise copies of this bill) jnf~_=---U- Q~~---- B ~:~:~Nam.,s..",I:d::n::::s:Onfinn.tion P..mg. ~::~~1~~~:g ~:.~\~~: 7 0_01_ ~~Ù ~~j~~5~~5_~86~9 ~i~ __~" ¡~---ßQ;¿LR- i dd Ie ~~uD~-________ 2 _______ __ ___q_____ _ _>_______ _ _________ ____________ -j~-arû~__DL L___ _-_2D_--mY \C1(ol[oß 4 _____.____________________.__ ___________~~_ ______________ ___ ____.A·[L~ 4· \~__ --.---.-.----------~º_5J-.q - { oj (()~----____ Name and Address of Sender Insured Value Due Sender DC SC I SH RD RR if COD Fee Fee Fee Fee Fee ~=--===JJ') --------.-- /--=-=~==------ 3 ___ ______._u____ _______"..__. ____.____ .---_. -_.- -----_.~._-- ..----- ---- :( --- __.,....____...._... ._....___.,_._.d.._.____, ____.______ -_._~-----_.__.._--_. " .,(. --'------------:':';,:-- -'---7='-:-,.~ 5 ..-,.--- -_._._..._--._--_.._---_._-_.---_.__..----~-----------.- 6 ( ~----------------~---- / -~--- -~-~ ~.~------~=.-~.-~=-==~-==-=~~~~==~-~; / _~~_______ ______________________ ~ \.S'" /__ 11 J -.... .-.-.- --....-....-.-.........-....------ . -. --..--.-.....---..-.-....-..--..--..---....--....-...-....-.--..--.--...-..--. -----.------.--.--.-.--------..------Í-----------.--..---.--- .I / ----1------.-.------.-..--.----.-- I' / . -...._,_._...,..._._.-.__._.,_....~--_..._----_..__......--.-.-----.----.-----.--,.---.--.---"..--,.---.--..._-- .-.-.--.--....- 12 13 ....__...,,_..__.~,..__,_.___._.".....,,_,_._.."....._.._._.__....._._···___._______.___._______...___...._.__..r_..__._.._"_.__.~._____....._.___.~.__._._...,.._.__~_ -----.--..---------.-.-.-.-.-.---.-.-...,.---...---- 14 "--~......._-_....-..-._.... ._._..--_....._~_.__._---_._.__.__._.._--_..._._--_.__.-..,..-..--..,--.....-.--,-..--.-.-.--.-.-----...- ----~-_._.- 15 rõtàTNum-bër-õt Piecês---···--:¡:õtãrÑum"bër of Pieces -.-----..-...-.- postmãster, Per (Name of receiviñg employee) Listed by Sender Received at Post Office ---.-----------..-- ! I «-- The full declaration of value is required on a I domestic and International registered mail. The maximum Indemnity payable for the reconstruction of nonnegotiable documents under Express Mail document reconstruction Insurance Is $500 per piece subject to additional limitations for multiple pieces lost or damages in a single catastrophic occurrence. The maximum Indemnity payable on Express Mall merchandise Insurance is $500, but optional Express Mall Service merchandise Insurance Is available for up to $5,000 to some, but not all countries. The maximum Indemnity payable Is $25,000 for registered mail. See Domestic Mail Manual R900, S913. and 5921 for limitations of coverage on insured and COD mail. See International Mall Manual for limitations of coverage on International mall. Special handling charges apply only to Standard Mail (A) and Standard Mall (B) parcels. Complete by Typewriter, Ink, or Ball Point Pen PS Form 3877, August 2000 u.s. .. I. - ., e . CERTIFIED MAIL RECEIPT " . (Domestic Mail Only; No Insurance Coverage Providèd) ..--:1 LtJ I:(J rr /:....- ~'~ I :';1 ~ f JJ I:(J I:(J LtJ Postage $ /..~....,.f:;~~ /(,};..'f' ~~-d /0['/' ~ -,{~ .t- Po (} (~ lJJ· ~.'\ \ d: .:?ù,~ ;;; \ ¿,;,vf{f ~/ \'~~~~.~~'~/' Certified Fee LtJ CJ CJ CJ Return Receipt Fee (Endorsement Required) Restricted Delivery Fee (Endorsement Required) CJ ru fT1 Sent To a J. Brock Riddle aM -·ši¡'ëët~ApTNò.;-- Marathon Oil Company or PO Box No. ~ ·-ëiiÝ.-šfåtë:zip¡;{ P.O. Box 196168 Anchorage, AK 99519-61 ..l¡¡.,..IMI:I'I'.¡-.'.',.I:,..'....¡'I' :t:I..:r:l.'L:T¡."'{..'ttr.'II."1'.'Ioll!'l.t. Total Postage & Fees $ #4 -. Unocal North American Oil & Gas Division Unocal Corporation P.O. Box 190247 Anchorage, Alaska 99519-0247 Telephone (907) 276-7600 - ___."_u_ . .. '. '~ ~~~~~~: ..t} . Q '. ..... ¡: j'" .., \[0 t~ I. £:. ~ ~ ~ \..-i , --ERFU'-' ~ ¡-~i--~~j--u_~ i -- E1<fL-;~~~. ~j ~~~~·t -;. i \ ¡::1~1G-7\sSt·-T-¡ -'~ ~j ¡ SR GEO~~ GEOL A~? ILl . 1.3EOL ,~SST\ : ~\. ST AI' ]"~S~ \ : STAT TELH I , tFI~E _ l_, UNOCAL. Robert T. Anderson Manager, Lands Alaska Region September 11, 1990 Mr. Lonnie C. Smith Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Alaska 99501-3192 RECEIVED TRADING BAY UNIT MCARTHUR RIVER FIELD STATE OF ALASKA EMERGENCY EXCEPTION OF RULE 2 CONSERVATION ORDER NO. 228 SEP 11 1990 Alaska Oil & Gas Cons. comro\ssion Anchorage Dear Mr. Smith: Union Oil Company of California (Unocal») as the Operator of the Trading Bay Unit, McArthur River Field, and on behalf of the working interest owners, for purposes of developing the Middle Kenai Gas Pool for production, requests the following Emergency Exception of Rule 2 of Conservation Order No. 228: More than 1,000 feet (true vertical) between the bottom and top perforations shall be in communication within the same wellbore in Well M-3 Steelhead Platform for purposes of economically developing lower sand intervals for gas production. Specifically, permission is requested to perforate the interval from 5,170'-5,210' to be produced with the existing perforations from 6,723'-6,735' and 6,810'-6,870'. A wel/bore schematic is attached. Justification for granting this exception is based on economic reserve development within the aforementioned wellbore. By perforating both intervals of interest and producing commingled, dual completion costs and subsequent recompletion costs will be held to a minimum allowing for increased reserve development from this wellbore. Pressures within the two intervals of interest are similar as determined during the open-hole logging phase of the drilling operation. A formation testing device on 7/27/90 indicated a pressure of 1,920.4 psig at 5,188', 2,052.5 psig at 6,729', and 2,031.0 psig at 6,842'. It is anticipated that there will be no crossflow "i~' '-' Mr. Lonnie C. Smith September 11, 1990 Page Two of gas from the lower zones to the upper zone under producing conditions. The static crossflow potential will be minimized by reducing shut-in times for this well. Personnel from Unocal and Marathon, as Unit Operator and Sub-operator of the Steelhead Platform, respectively, are available to meet with you concerning any questions you may have or additional data you may require. Pursuant to the aforementioned exception, we respectfully request administrative approval to proceed with the completion and commingling of this well as planned. Very truly yours, ~ct- T ¡jY1c4/~ -b.ð Robert T. Anderson R~ ~~ RTA/cl/da Attachment RECEIVED SEP 11 1990 Alaska Oil & Gas Cons. Commission Anchorage · ',-, TRADING BA Y UNIT STEELHEAD PLATFORM VELL M-3 '-, Proposed COMpletion cnMPI FTInN STRING 0' -5050' 4.5"'1 12,6# N-80) Butt Mod. ----=.J \ I Flow Coupling (3.863' ID) OtiS XXO InJ Nipple (3.813'" X ProfiLe) Flow Coupling (3.863' ID) OtiS Series 10 SCSSV (3.813'" X Profile) Flow Coupling (3.863' ID) ~ L ~ 937' 20'1 133#1 Butt. Csg. L ~ 1452' 16') 75#=) Bu;;t , CSQ. L ~ 2712' 13-3/8') 61/68ft K -55 Csg. 0'-535' 10--3/46) 55,5#) N-80 BTC 535'-7269" 9-5/8') 47#)_ N-SO CS >Z~ UPPER PACKER ASSEMBLY 5050' 0;;15 9-5/8' x 5' PerMo.neni; po.cker w/SBE OtiS 'X' nipple (3.8136 Profile) 0;;15 'X' nipple (3.8136 ProfiLe) WL Re-entry guide ~ - D-3B - PFRFnRA TlnNS Intervo.l 5170'-5210' 6723'-6735' 6810'-6870' Zone FT D-3B 40 D-16A 12 D-16BC 60 SPF 6 , Phase 600 Phasing , - Do. te Proposed 8/27/90 8/27/90 ~ :8: 6600' LO~ER PACKER ASSEMBLY 0;;15 9-5/8' x 5' PerMo.nent Po.cker w/SBE OtiS 'X' nipple (3.8136 Profile) 0;;15 'XN' nipple (3,813' ProfileJ 3,725' NoGo) VlL Re-eni;ry guide ~ D-16A RE(EIVED - - D-16BC SEP 11 1990 Alaska on· & Gas Cons. commission Anchorage - ~ PBTD @ 7169' TD @ 7283' Revision Do. ;;el 8/27/90 Revised By: KWB/nef Reo.sonlNew\J eUCoMpletJon PrevIous . Revision: Nöne_';···· #3 -- Unocal Oil & Gas Divit Unocal Corporation ~ P.O. Box 190247 Anchorage, Alaska 99519-0247 Telephone (907) 276-7600 ~J<::=êí!~1 .~ t CO L'ifv1 I !'c'or)¡CJ], ¡ ~ ¡ ,:":;::-: '':' é:' \} ('~ I.D I' ,""" ..., ~ JIti I ;-;;~ ::'J--røl . I ¡ ~~. ;--\ :- ; - i-I UNOCALe May 12, 1988 Robert T. Anderson District Land Manager Alaska District Mr. Chat V. Chatterton Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Ak 99501-3192' : S T /,\;( T ::~ C ",'-; fST At tE C;;, --; 0- Fi LE: ;.Lc~' J..::~ > f McARTHUR RIVER FIELD Trading Bay Unit State of Alaska Application for Amendment to Conservation Order Number 228 Dear Mr. Chatterton: Union Oil Company of California (Unocal), as operator of the Trading Bay Unit and on behalf of the Working Interest Owners, request thru the Oil and Gas Conservation Commission 's Administrative Approval process to Amend Conserva- tion Order No. 228 to add rule #4 as follows: Rule 114 Auxiliary Casing and Cementing Requirements Wherever gas bearing sands are expected to exist above a true vertical depth of 2000 I, an auxiliary casing string must be set and cemented in accord with 20 AAC 25.030(d)(2) before drilling into the expected gas bearing strata. Before drilling out this auxiliary casing string must be equipped with blowout prevention equipment installed and tested in con- formance with 20 AAC 25.035(a). The auxiliary casing string is in addi- tion and not in lieu of the surface casing string required by Rule 2 of Conservation Order 80. Personnel from Unocal, Marathon and ARCO as operator and sub-operators re- spectively in the Trading Bay Unit, are available to meet with you concerning any questions you may have. Your favorable consideration of this application is requested. Very truly yours, ~~ Robert T. Anderson ./ KAT:bdb cc: Marathon Oil Company, Doyle Jones ARCO Alaska, Inc., Jeff Kewin m b #2 ~~. '- Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of UNION OIL COMPANY OF CALIFORNIA (Unocal) to amend Conservation Order No. 80 for the purpose of developing the Grayling Gas Sands. By letter dated February 16, 1987, Unocal, as operator of the Trading Bay Unit and on behalf of the Working Interest Owners, has requested changes to Conservation Order No. 80. The purpose of the proposed changes is for the development of the Grayling Gas Sands. A person who may be harmed if the requested order is issued may file a written protest, prior to April 4, 1987, with the Alaska Oil and Gas Conservation Commission, 3001 Porcupine Drive, Anchorage, Alaska 99501 and request a hearing on this matter. If the protest is filed timely and raises a substantial and material issue crucial to the Commission's determination, a hearing on the matter will be held at the above address at 9:00 AM on May 6, 1987, in conformance with 20 AAC 25.540. If a hearing is to be held, interested parties may confirm this by calling the Com- mission's office, (907) 279-1433, after April 4, 1987. If no such protest is timely filed, the Commission will consider the issuance of an order without a hearing. ç~J fJµ Lonnie C. Smith Commissioner Alaska Oil & Gas Conservation Commission Published March 19, 1987. STATE OF ALASKA ADVERTISING ORDER See l~iféÞ- cL:f_..feJ 7. -.// "77· c< F 0- ð r 08-5586 -~. F R o M Anchorage Daily Net-1S P. O. Box 149001 Anchorage, Alaska 99514-9001 T o p U B L I 5 H E R Alaska Oil & Gas Conservation Conmission 3001 Porcupine Drive t: r ç \ \l F f) Anchorage, Alaska 99501, ~~ \_~" t~ \ ' b·" - ~ - -~ \) '.",~' , :j~<a UH & l;;~:~ ;,-'...'¡;~-:: t't i1¡-!I~-:(:;nf} ~ i.. -' . . _ . . AFFIDAVIT OF PUBLICATION UNITED STATES OF AMERICA STATE OFt1~-- ~ ss DIVISION. BEFORE ME, THE UNDERSIGNED, A NOTARY PUBLIC THIS DAY PERSONALLY APPEARED ;::::;,~~ WHO, BEING FIRST DULY SWORN, ACCORDING TO LAW, SAYS THAT HE/SHEISTHE~~ OF~~ PUBLISHED AT ~~F7~ IN SAID DIVISION ~ AND STATE OF ~ AND THAT THE ADVERTISEMENT, OF WHICH THE ANNEXED IS A TRUE COPY, WAS PUBLISHED IN SAID PUBLICATION ON THE 11~ DAY OF ~~ 1R.KL AND THEREAFTER FOR ,t) CONSECUTIVE DAYS, THE LAST PUBLICATION APPEARING ON THE /~AYOF ??Í~./~ 19?1,ANDTHATTHE RATE CHARGED THEREON IS NOT IN EXCESS OF THE RATE CHARGED PRIVATE INDIVIDUALS.. ~_~A'~-/ SUBSCRIBED AND SWORN TO BEFORE ME TH IS .a3 DAY OF ~"'~s---:ç- ~'- 19 ~"\ ~ \~""~""-~ ~-.~:... ,~~:.--~-:~~----- NOTARY PUBLIC FOR STATE OF ~\( b MY COMMISSION EXPIRES "ComøìissionExpiresJnly3,t., 02-901 (Rev. 6·85) PUBLISHER .,..- --. ~-~-----..- "'-~ ADVERTISING ORDER NO. ~~ AD- AGENCY CONTACT Galyn Evans DATE OF A.a. ~Arch 17, 1981 PHONE (907) 279-1433 DATES ADVERTISEMENT REQUIRED: March 19, 1987 SPECIAL INSTRUCTIONS: :,S\:"·: ~ REMINDER- INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. A CERTIFIED COPY OFTHIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. ATTACH PROOF OF PUBLICATION HERE. Notice of "Public Hearing c 5"TA1:I£OF~At.ASKAc "~'::f=~~ ·liiFtlieëi~JiatlØn.M__ OILCÐMPAN'l:'.OF ~eALI;aR- - N IA -<Ul19'CëIlltci~amernleoöSé!r- \(atIC)l'l.Ot~.No; «I tor the purþO$é,ofc 'developing ·the Grayling Git$ Sand$~ , . . ~ BYlefte1:, d~e~fFebruaN J6,' .1~t~Unocal~asoperëltor-of the Tracllng" Bay' Urlit and on behälf .ofthe"Wor:Iérng Interest own- ers¡ ltas requested chani;jes to ~atlonOrderNø.80.The purpose of theproþosed- cI1a~ istorti1t:! development 'Ofc~(;~ély~I~~~a~s:..,d:. .,.~~' ".. A ~~(Mkwflo·.I1'1ay beharllied ifthè'reqUØSf4!Ciorder is Issueø, rnayffl.e a written Pl'ótest' 'iðf" 't0Am-1I 4, 19&7 with the A OUaM Gas Conservation . - . "!lssloni 3001Porcupine .DrIW~ Anchorage, Aiaska9950f.iifJd nl9uesf~ahe¥lng onthiSlrillf- :ct~:.lf",..pro;test is flfed;fiin~ .éa~ ¿,i!I.~"::"'~~.ubst.ntiåJ:~. material 'lssue·cruciaI1o fttê . Commrssion'sdeterrnlnati.;. Ilear~l. on tflematter will'. held at the above addréšS-at 9;110 AM on . May 6, 1m, iii conformance, with 20 AAt 2S.540~ If a . hearing· Is to be ~idlClnterested parties. may CQi1ffrm. this, bY. ca. U..i.!lq;,JIt . ~~~=r~~~!J=~~" nôsç protest r: tilÍl~IY' Ìli~ thìt. ~misson will . consklèr ,tIIØ'i~e of the order willi- c~a~nl. -. Is/LonnIe e.srn"" Commissioner .. ..... ... ..... · ~,:,::~& GasconservatfÖn F jI.().(Ø.;5586 . PUb~~rch19, 1987 #1 '- Unocal Oil & Gas Divisia Unocal Corporation P.O. Box 190247 Anchorage, Alaska 99519-0247 Telephone (907) 276-7600 --' e,-W , '--:It: ; --- cö' -'-.:.-~~~~~~_!, ',. -" ..- - ;= . ~ n" ._____ , ¡ . . UNOCALe ,- , .~ March 16, 1987 '-" - '. . "t \\S\ ! c.", ;-.>~;OO \~+jJ~~~;j'}~!I\ h::'Lr:· ì t,..L.....· ,.-; Robert T. Anderson District Land Manager Alaska District ~~" }?-~ LO- ,/,.,~ c,. · .pf;o'" Þ Mr. C. V. Chatterton Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Alaska 99501-3192 McARTHUR RIVER FIELD TRADING BAY UNIT COOK INLET AREA Application for Amendments to Conservation Order No. 80 - Grayling Gas Pooling and Well Spacing Dear Mr. Chatterton: Reference is made to our letter of February 16, 1987 requesting amendment to Conservation Order No. 80, Grayling Gas Pooling and Well Spacing. Please be advised that Operator withdraws is request and that Attachments 2, 3, 5.1, 5.2, 5.3 be held confidential. ~ ~ ¡~ ? ~ Very truly yours, UNION OIL COMPANY OF CALIFORNIA Operator By: ~;e!7~4:~/f Robert T. Anderson / / ,I 32071 ~FrFI\l=D ~J ~- ~ ll= Î ...! k . í "'.... L~ .~ L i V L > "--r 1 ? iJ,iaska UJi & Ciô.S Cons~ Commission ,L\nGh:)r:Jge /~ .. Unocal Oil & Gas Divisio' Unocal Corporation P.O. Box 190247 Anchorage. Alaska 99519-0247 Telephone (907) 276-7600 ~. _0" ---vf7r:' .-" '~\ UNO[AL~ ~f/~ February 16, 1987 . -. t _~_ __ _~_ .__~ __ _ ___--l Robert T. Anderson District Land Manager Alaska District () . C.o. '-'.. t: · }~¥' Mr. C. V. Chatterton Alaska Oil and Gas Conservation Convnission 3001 Porcupine Drive Anchorage, Alaska 99501-3192 McARTHUR RIVER FIELD TRADING BAY UNIT COOK INLET AREA Application for Amendments to Conservation Order No. 80 - Grayling Gas Pooling and Well Spacing Dear Mr. Chatterton: Union Oil Company of California (Unocal), as operator of the Trading Bay Unit and on behalf of the Working Interest Owners, for the purpose of developing the Grayling Gas Sands for gas sales from the newly installed Steelhead Plat- form, request the following amendments to Conservation Order No. 80, McArthur River Field Rules: (1) Graylinq Gas Pool Definition We request that Rule l(b), definition of the McArthur River Middle Kenai Gas Pool, more commonly referred to as the Grayling Gas Sands, be amended to group all of the intervals currently believed to be capable of produc- ing gas into a single pool. To achieve this, Rule l(b) should be amended to read: The McArthur River Middle Kenai (Grayling) Gas Pool is defined as the accumulation of gas common to, and which correlates with, the accumulation found in the lk1ion Trading Bay Unit No. G-18 well between the measured depths of 3270 feet and 8585 feet. Exhibi t A is a Geologic and Engineering Report that provides supporting information for grouping the Grayling Gas Sands into a single pool for production and reporting purposes. Ï"ir-r'\f-- c',,;' .r- ~ ¡ j '\/ ... ¡ ì ~·~·.....~I LV ('- ,.... ..- r- :- ~ (: ~. } ~.) E, '~.- 4ias:,é Oi; &. k;,::: C~ms (;li;-¡¡;Ii:::~:::" A j] ~t~:: ~~: '1 E /. .-.'/...~. --- ~--' , - '"-,, (2) Well Spacinq We request that in consideration of the limits of conventional directional drilling technology, a general waiver of the spacing requirements for a gas well set forth in 20 AAC 25.055.(4) be granted and included as a Rule in the Conservation Order. The working of the proposed rule could be: Wells drilled to develop gas from the Middle Kenai (Grayling) Gas Pool may be drilled and completed on a spacing pattern closer than 3000 feet to any well drilling to, or capable of producing from, the same pool. Exhibit 8 is an Engineering Report that provides supporting documentation for spacing requirements for development of the Grayling Gas Sands. Through unitization and the applicable provisions of the Trading Bay Unit Op- erating Agreement, effective as of february 27, 1967, the correlative rights and equities of affected interest owners are protected, and are therefore not addressed in this application. It is requested that Attachments 2, 3, 5.1, 5.2, 5.3 hereto be held confiden- tial. Personnel from Unocal and Marathon, as operator and sub-operator respectively in the trading bay Unit, are available to meet with you concerning any ques- tions you may have or additional data you may require. Very truly yours, 32071 UNION OIL COMPANY OF CALIFORNIA Operator By: ~~kj RECEIVED FES 2 4 1987 Alaska Oll & Gas Cons Comm' . - An I . .ISSlon chorage ,-,. "-' ¡; : ~,- ~.. ~ ~ .~ : ~ 1'~~'-_ ...-- = ::" ::." -'-- i' ..... a.--.- "-- htZ.S~{Z- O~~ ( ;. (;. v ~~ . " ¡-;--_"!.;::-,~";.",,,,7 \..; ,. " ii,. _~ _-. ~- _ Þ.r;2:~ = :': ~ = EXHIBIT A Geologic and Engineering Report in Support of Single Pool Designation This Geologic and Engineering Report is submitted by Union Oil Company of California (Unocal), Trading Bay Unit Operator, to support an amendment to Conservation Order No. 80, Rule 1 (b), that will establish a single producing pool designation for the Grayling Gas Sands, Upper Middle Tyonek Formation, Trading Bay Unit, Cook Inlet, Alaska. Currently, the Grayling Gas Sands are catergorized as two pools: (1) the Middle Kenai ttD" Pool, as defined in Conservation Order No. 80, Rule l(b), and (2) The Middle Kenai "Undefined" Pool, which includes the remaining Grayling Gas Sands. The Grayling Gas Sands are located within the upper middle Miocene Chuitna and Middle Ground Shoal Members of the Tyonek Formation, part of the Kenai Group. In the vicinity of the Steelhead Platform, these fluvial, non-marine rock sequences, are proj ected to occur at depths between approximately 2500' and 6500' sub-sea. At tachment 1, a type log constructed from log sections from several wells, and Attachment 2, a north-south cross-section across the apparent crest of the McArthur River Field structure, are presented to illustrate the vertical limits of the Grayling Gas Sands and to demonstrate that the Sands are one continuous sequence comprised of a common gas acumulation. The Tyonek Formation was informally subdivided into Zones A through G to facilitate correlation and Exhibit A Page 2 .~ --- production needs during the mid-1960s by participants in the Trading Bay Unit. Zones A - C lie approximately within the formally designated Chuitna Member, and Zones D - G lie approximately within the Middle Ground Shoal Member of the Tyonek Formation. The Grayling Gas Sands occur within Zones A - D; Zones E and F have not been found to contain commercial quantities of gas to date. The Tyonek G-Zone has been oil productive since late 1967. A similar depositional environment is evident throughout the sequence, that being a low to moderate energy, alluvial fan/meanderbe1t regime. Many of the sand/shale sequences are overlain by distinctive coal beds signifying low energy, swampy conditions. There are no significant -----------.---------- stratigraphic changes within the sequence that would support the classification of separate P001~'Th~ sands are generally thin (30 to 50 feet) and may not persist laterally in all directions; however, sufficient opportunities for communication among the sands are likely (due to the ~_m_ relatively thinner nature of the coal and shale intervals and the presence of faults). As a result, field-wide gas/water contacts can be expected for several sands in succession. Without additional data obtained from drilling and producing Stee1head gas wells, any separate pool classifications within the Grayling Gas Sands section at this time can only be arbitrary. The principal McArthur River Field structure is an assymetric anticline, which is oriented approximately N20oE, sub-parallel to several other -" Exhibit A Page 3 structures in the Cook Inlet. The axis of the anticline shifts eastward about 4301 for each one thousand feet increase in depth. Formed in re- sponse to regional compressive stresses, the structure is truncated and bisected by several normal faults, which could provide traps for hydro- carabons. The enclosed structure contour map (Attachment 3) exhibits the top of the D-l sand, located near the middle of the Grayling Gas Sands section, and was chosen to display the general character of the structure and the areal accumulation limit of proven gas contained within the McArthur River Field. The "XiS" mark the wellbore intercepts of the D-l sand and show the distribution of data from which the map was derived. As can be seen, intercepts are concentrated near existing platforms. Future wells drilled from the Steelhead Platform will greatly aid further definition of this structure. As further evidence that the Grayling Gas Sands represent a common accumulation of gas, Table 1, attached, is a summary of gas compositions obtained from the testing and/or production of TBU Wells G-14, G-18DPN, D-10, D-18, and K-20. The gas composition does not vary significantly over the wide range of sampling depths within the Grayling Gas Sands. The high percentage of methane and absence of heavier components (propanes +) indicates the Grayling Sands gas accumulations are likely derived from the coal beds within the Tyonek Formation and are not likely associated with oil accumulations. Exhibit A Page 4 ~ ~-' In order to efficiently and economically produce the Grayling Gas Sands, commingling of production from sands that alone may be uneconomical for a single completion, but economical as a group, will be necessary. A single pool classification will allow that flexibility and will likely result in the production of gas that might otherwise have been left in place, thus helping to maximize ultimate gas recovery. In summary, the Grayling Gas Sands appear to be a common accumulation of gas contained within a single general structure. While separate reservoirs are likely to exist, there are insufficient geological and engineering data to define such reservoirs initially. Finally, classification of the Grayling Gas Sand as a single pool will prevent waste, and will promote maximum ultimate recovery of gas through commingling of production from several sand intervals. F~Er_· Ff\/FrJ _1... ....¡..- r E 2 2 .~~ ':r.,...- , '....... ¡. .- .i;. ,_, '-: i AJa3:(2- o¡~ 8; G:s G8r;s~ CCrf::T;!~=-··- PJ1:h:~3~? ·/ . . '- '- :<Ç(~:": .a'...;.....~ .- -"'... -~ ..----- -:- ... ·_i /J: - "-~~- EXHIBIT B AjaG~<a Oil & ."'\ < í.;¡¿¡S _"" I :...... '..;J¡;::-;;:.~ =- ;~;-: An::-:c::~:-'!:; Engineering Report in Support of Well Spacing Amendment This Engineering Report is submitted by Union Oil Company of California (Unocal), Trading Bay Unit Operator, to support an amendment to Conservation Order No. 80, McArthur River Field Rules, that will allow spacing of gas wells closer than 3000' within the proposed single Grayling Gas Sand pool. Conservation Order No. 80 does not currently address gas well spacing and, therefore, Sec tion 20 AAC 25.055 of the Alaska Administrative Code, applies. Referring to Attachment 3, the areal accumulation limit of the Grayling Gas Sands is approximately one (1) mile wide by four (4) miles long encompassing an area of about 3300 acres. The Steelhead Platform is positioned in the center of the gas accumulation near the top of the general structure. The shallow depths of the gas zones make it impossible to maintain the 3000' spacing criteria and still obtain sufficient deliverability to deplete the reserves in a reasonable period of time. The proposed Steelhead Platform drilling program has been developed to yield the greatest number of individual sand penetrations within the Grayling Gas Sands interval for each well. Optimum flexibility in selecting initial completion and subsequent recompletion intervals will be provided, which in turn will promote increased ultimate recovery by main- >II -- Exhibit B Page 2 taining maximum deliverability above the economic limit for the longest possible time. Attachment 4 demonstrates the proposed well courses. Low, medium, and high-angle wells (utilizing standard "build and hold" directional drilling techniques) will effectively locate withdrawal points along the axis of the s true ture . The S-shaped wells are designed to provide adequate horizontal departure for withdrawal points along the east and west flanks of the structure and still penetrate the highest number of sands possible within the productive area. To demons tra te this s tra tegy, shallow, medium, and deep structure maps, with penetration points for each type of well, are included as Attachments 5.1, 5.2, and 5.3. Actual well courses and locations will be similar to those shown. Slight pattern adjustments are expected to compensate for individual sand characteristics within the targeted completion intervals. Each mapped sand interval will not be indiscriminately completed at every penetration point. The number of completions within each sand interval will depend upon the gas accumulation area, extent of lateral discon- tinuities (faults, shale-outs, etc.), evidence of water drive, reserve volume of sand layers, and deliverability requirements. The decreased spacing of withdrawal points on the crest of the structure that results from platform development is particularly suited for maximum recovery of gas. Economic deliverability can be maintained longer from a number of "clustered" crestal producers than from regular pattern producers should a water-drive mechanism become apparent during reservoir depletion. ~' ,31 "'- Exhibit B Page 3 The need to depart from the spacing requirements of 20 AAC 25.055 while developing shallow gas sands from a central surface location (i.e., offshore platform) has been demonstrated in Conservation Order No. 68, which refers to Phillip Petroleum's "cluster" spacing for the development of the North Cook Inlet Gas Field, Cook Inlet, Alaska. The initial drilling program will focus on the development of the Deep "D" Sand (D-16). Efficient utilization of wellbores will be enhanced by dual completions, with the short string completions targeting the Middle and Upper "D" and Lower "c" sands (C-4 through D-6). Although 24 slots are available for gas development, reservoir performance and recompletion efficiency will determine the ultimate number of wells needed. Possible locations of the first six wells in the D-16 Sand are shown on Attachment 5.3, and are equivalent to a 640-acre spacing pattern. As can be readily seen in Attachments 5.1 and 5.2, adhering to a 3000' spacing limit in shallower intervals would severely restrict the number of possible withdrawal points, thus restricting deliverability. This would shorten the economic life of the Steelhead Platform and decrease ultimate recovery. Inclusion of the proposed well spacing rule in the McArthur River Field Rules is essential to allow full development of the Grayling Gas Sands reserves from one platform. R ,,- ,- - 1 '/ r- r'\ ~l' ~ 1 r-!! iLl- ' ~:..; F E B 2 .~~ 192-: Alas~<a. Oil & Gas Gens. ~~ú~T:=:~'J:1 II ..." ¡..,,~., (1 '3 r\¡ i\.ll ~"'"' ~ ..... -;.., NAME Lonnie C. Smith Bob Warthen Bob Anderson Roy Priest Vicky Lytle Russ Douglass John Barnes Wil Kirchner Glenn Dehekker Bill Van Alen Rich Drumheller Chat Chatterton Bill Barnwell '-~' -'-- MEETING MARCH 16, 1987 COMPANY AOGCC Union Union Union Union AOGCC Marathon Marathon Marathon AOGCC Marathon AOGCC AOGCC " S.S. DEPTH (FT .) 0- -1000- -2000- -3000- -4000- -5000- -6000- -7000- '~, A T T A C H MEN T ¢.....J GRA YllNG GAS SANDS PROPOSED WELL COURSES Legend L :Low Angle Well, 13° M :Medium Angle Well, 37° H :High Angle Well, 55° S :S-Shaped Well (L) (S) (S) (S) (M) (TYPE OF (H) WELL) o I 2000 I 4000 I 6000 HORIZONTAL KICKOFF (FT.)