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Home My WebLink AboutCO 234 A e e Image Project Order File Cover Page XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. e 0 d3Lf A Order File Identifier Organizing (done) o Two-sided 1111111111111111111 o Rescan Needed 1IIIIII111111111111 RESCAN DIGITAL DATA OVERSIZED (Scannable) o Maps: D Other Items Scannable by a Large Scanner D Color Items: D Greyscale Items: D Diskettes, No. D Other, No/Type: D Poor Quality Originals: OVERSIZED (Non-Scannable) o Other: D Logs of various kinds: NOTES: BY: Garia ) Date /; hi CJ 7 Date ¥rID7 D Other:: /,/ ú1f 1111111111111111111 mP = TOTAL PAGES J /P (Count does not include cover sheet) /s/ /s/ Project Proofing BY: ~ Scanning Preparation BY: Date: 11111111111/11 "III = + Production Scanning Stage 1 Page Count from Scanned File: J 7 (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: V YES ~ Date: h14/07 If NO in stage 1, page(s) discrepancies were found: YES NO /,/ M1 P NO BY: Stage 1 BY: Maria Date: /s/ 1111111111111111111 Scanning is complete at this point unless rescanning is required. ReScanned /1111111111111 11111 BY: Maria Date: /s/ Comments about this file: Quality Checked 111111111I111111111 10/6/2005 Orders File Cover Page. doc • • Index Conservation Order 234A McArthur River Field 1. June 22, 1995 Unocal's request to modify CO 234A, Rule 3 waivering production logging requirements 2. April 27, 2007 Unocal's request for temporary suspension of well tests Dolly Varden Platform 3.---------------- Various e-mail's regarding Admin Approval CO234A- 2 4. September 25, 2013 Hilcorp's request for Administrative Approval requiring production logging to determine the production allocation between pools to be waived. (CO 234A-003) Conservation Order 234A . . ST A TE OF ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage , Alaska 99501-3192 Re: The Application of Unoca1 on behalf) of the Trading Bay Unit Working ) Interest Owners requesting ) commingling of produced fluids ) from the Hemlock, Middle Kenai ) "G", and West Foreland oil pools in) the McArthur River Field. Conservation Order No. 234A McArthur River Field Hemlock Oil Pool Middle Kenai "G" Oil Pool West Foreland Oil Pool December 21, 1993 IT APPEARING THAT: 1. By letter dated May 27, 1993, Union Oil Company of California (Unocal) applied for an order allowing commingling of production from the Hemlock, Middle Kenai "G", and West Foreland oil pools. 2. Notice of public hearing was published in the Anchorage Daily News on June 9, 1993. 3. No protests were filed with the Commission. 4. Unocal submitted a Supplemental Engineering Report dated October 27, 1993 containing information relating to the scope of commingling plans, reservoir pressure, allocation methods, crossflow control and waste prevention. FINDINGS: 1. The Hemlock, Middle Kenai "G" and West Foreland oil pools are defined in Conservation Order No. 80. 2. Conservation Order 234, issued October 30, 1987, allows commingling of the Middle Kenai "G" and West Foreland Oil Pools. 3. Unocal's proposed allocation method will be based on production logs. Alternative engineering methods such as historical productivity relationships, individual pool well testing or incremental perforating and testing will be used should well bores become inaccessible to production logging tools. Conservation Order No. 234A December 21, 1993~ . Page 2 4. Unocal will evaluate commingling opportunities on a case by case basis. Completion techniques may include single or dual strings depending on local conditions. 5. Average reservoir pressure is estimated at 3120 psig in the Middle Kenai "G", 3430 psig for the Hemlock and 3290 psig for the West Foreland oil pools respectively. 6. Waterflood operations were implemented in February 1969 in the Hemlock oil pool, November 1973 in the Middle Kenai "G" oil pool and December 1987 for the West Foreland oil pool. Each pool waterflood is still in operation. The current injection to production ratios are 1.0 in the Hemlock, 1.5 in the Middle Kenai "G" and 3.0 in the West Foreland oil pools. 7. Estimated additional recovery from commingling ranges from 200,000 to 442,000 barrels of oil for each well. A total of 1. 8 million barrels is targeted for recovery by wellbore commingling. 8. Crossflow is not expected to be significant because flowing pressure will be well below reservoir pressure for each pool. Static crossflow may occur but is expected to be minimal because reservoir pressures are relatively close to each other and water injection ratios are higher in the lower pressure pools. 9. The working interest owners of the Trading Bay Unit have integrated their interests through unitization. The royalty owner is the State of Alaska and royalty rate is uniform throughout the three pools. CONCLUSIONS: 1. Commingling the Hemlock, Middle Kenai "G", and West Foreland oil pools may result in recovery of hydrocarbons which otherwise would not be recovered. 2. Produced fluids can be allocated to their respective pools by production logging at periodic intervals or by alternative engineering methods should the well bore become inaccessible. 3. Correlative rights are not jeopardized. 4. Commingling production from the Middle Kenai "G", Hemlock and West Foreland oil pools will not cause waste. 5. Maintaining higher injection ratios in the lower pressure pools and utilizing isolation completion equipment where appropriate will reduce the potential for crossflow between the pools. Conservation December 21, Order No. 1993. 234A . Page 3 NOW, THEREFORE, IT IS ORDERED THAT Rule 1. Conservation Order 234 is repealed and replaced by this order. Rule 2. Commingling of production from the Hemlock, Middle Kenai "G" and West Foreland oil pools in the McArthur River Field is permitted. Rule 3. Production logs shall be run within 2 months after initial completion to determine proper allocation of produced fluids. Additional logs should be run after significant changes to well mechanical configurations or abnormal, unexpected changes in well production characteristics. Results and copies of all logs will be filed with the Commission. Rule 4. Upon proper application, the Commission may administratively waive the requirements of any rule stated above or administratively amend this order as long as the change does not promote waste, jeopardize correlative rights, and is based on sound engineering principles. DONE at Anchorage, Alaska and dated Dec þ¿ /~\ c~ ;~ I!(/h/~~D <-~~ Tuckennan Babcock, Commissioner Within 20 days after receipt of written notice of entl)' of this order a person affected by it may file with the Commission an application for rehearing. The Commission shall grant or refuse the application in whole or in part within 10 days. The Commission can refuse an application by not acting within the 10 day period. An affected person has 30 days from the datc that thc Commission's refusal of the application or order upon rehearing (both being the final order of the Commission) is mailed or otherwisc distributed to appeal the decision to the superior court. Where a request for rehearing is denicd by nonaction of the Commission, the 30 day period for appeal to superior court runs from the date on which the request is deemed denied (i.e., 10th day after the application for rehearing was filed). ALASKA OIL AND GAS CONSERVATION COMMISSION p~ :!3 ~ i &-z 10/ 7, TONY KNOWLES.l¥ovERNOR / ;' i I 3001 PORCUPINE DRIVE ANCHORAGE. AlASKA 99501-3192 PHONE: (907) 279-1433 FAX: (907) 276-7542 cS·- ~~~~Œ (ITJ'~~~~~~ ADMINISTRATIVE APPROVAL NO. 234A.Ol Re: The application of Union Oil Company of California, operator of the Trading Bay Unit (TBU), for a waiver ofthé production logging requirements of Conservation Order No 234A, Rule 3. Mr. Kevin Tabler, Land Manager UNOCAL Corp. P. O. Box 196247 Anchorage, Ak 99519~6247 Dear Mr. Tabler: Your application dated June 22, 1995 contains a request to waive the requirements of Rule 3, Conservation Order No. 234A (CO 234A) for Trading Bay Unit (TBU) wells K~3RD and K- 19RD, and for all future' wells "subject to CO 234A in which the Working Interest Owncrs agree on the rcsulting allocation". This request is made following attcmpted production logging ofTBU well K-IORD. The K~IORD well, originally a Hemlock producer, was converted to a commingled G~ZonelHemlock producer through the addition of G-Zone perforations. Due to a mechanical configuration that contributed to unstable commingled fluid flow, production logging of this well yielded inconclusive data inappropriate for commingled production allocation. Rather than production logging, you propose using well test data (before and after commingling) as the primary method of allocating commingled production for wells that the Working Interest Owners determine to be unsuited for production logging. You propose to hold the initial allocation constant until production characteristics of a well changes substantially and requires reallocation. If the well test produces uncertain results, an alternate approach such as production logging will be pursued. The Alaska Oil and Gas Conservation Commission (AOOCC) finds that your commingled production allocation proposal for the K~3RD and K-19RD wells will not promote waste, jcopardize correlative rights and is based on sound engineering principles. The Commission, however, reserves the right to approve this methodology on a case-by-case basis for other wells with unstable commingled fluid flow characteristics. Accordingly, Rule 3 of CO 234A is hereby waived for the K-3RD and K-19RD wells. Rule 3 of CO 234A may be waived on a case-by-case basis for other wells. . ~1r~1rŒ (ffi~ ~~~~[K{~ . AI~ASIiA. OIL AlQ) GAS CONSERVATION COMMISSION SARAH PALIN, GOVERNOR 333 W. 7th AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 ADMINISTRATIVE APPROVAL NO. CO 234A.002 Mr. Hal Martin Optimization Engineer Chevron North America PO Box 196247 Anchorage, AK 99519-6247 Re: Request for Temporary Suspension of Well Tests, Dolly Varden Platform, Trading Bay Unit, McArthur River Field Dear Mr. Martin: On April 27, 2007, the Alaska Oil and Gas Conservation Commission ("Commission") received a letter from Chevron North America Exploration and Production ("Chevron"), requesting a temporary waiver of the well testing requirements of 20 AAC 25.230(a) for the Dolly Varden Platform. The requested waiver would be retroactive to April 1, 2007, and potentially continue through November 30, 2007. Chevron's request for a waiver is approved according to the conditions below. Chevron's request states that it was necessary to remove the gross production separator from service on March 31, 2007, due to a leak in the separator vessel. After the gross production separator was removed from service, production was routed to three test separators. Due to capacity limitations, testing of individual wells is not possible while the gross production separator is down without shutting in other wells and the gas-lift compressor. Efforts to assess the vessel's condition and determine what repairs are necessary or whether the vessel must be replaced are underway, but the vessel is not likely to be returned to service until sometime between July and November 2007. Beginning in April 2007 and continuing until the repair or replacement is complete, individual wells cannot be tested to allocate production. Instead, Chevron proposes to monitor gross production from the platform and individual well characteristics, and to allocate from April through November monthly production for each well based on the average of the last three well tests for each well to determine prorated shares of gross and net oil production. CO 234A.002 June 1,2007 Page 2 of2 . . Rule 4 of CO 234A allows the Commission administratively to waive the requirements of any rule or amend the order so long as the change does not promote waste, does not jeopardize correlative rights, and is based on sound engineering principles. An administrative approval amending C0234A is appropriate for a temporary waiver of individual testing requirements of 20 AAC 25.230(a) with respect to the wells on Dolly Varden Platform, because the Commission has determined that such a waiver will not promote waste, will not jeopardize correlative rights, and is based on sound engineering principles. Accordingly, the Commission temporarily waives individual well testing as required by 20 AAC 25.230(a) for the wells on the Dolly Varden Platform according to the following conditions: 1. this administrative approval expires on November 30, 2007; 2. Chevron shall inform the Commission each month in writing of the status of the efforts to return the gross production separator vessel to service until the vessel is returned to service; and 3. after the gross production separator vessel is returned to service, monthly well testing shall resume, and production from each affected well shall be re- allocated based on the average of the last three well tests prior to April 1, 2007, and the first three well tests after the gross production separator vessel has been returned to service. Revised production reports reflecting this re- allocation must be filed with the Commission within 30 days after each well has been tested three times after the gross production separator vessel has been returned to service. As provided in AS 31.05.080, within 20 days after written notice ofthis 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 rehearing. A request for rehearing is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. A person may not appeal a Commission decision to Superior Court unless rehearing has been requested. horage, Alaska and dated June 1,2007. ~ Daniel T. eamount, Jr. Commissioner ~LíL4- Commissioner Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, 10 83702 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Ivan Gillian 9649 Musket Bell Cr.#5 Anchorage, AK 99507 Jack Hakkila PO Box 190083 Anchorage, AK 99519 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Cliff Burglin PO Box 70131 Fairbanks, AK 99707 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 . . David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Schlumberger Drilling and Measurements 2525 Gambell Street #400 Anchorage, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Darwin Waldsmith PO Box 39309 Ninilchick, AK 99639 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669-7714 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 Mona Dickens Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 Soldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 North Slope Borough PO Box 69 Barrow, AK 99723 C0234A-002 Admin Approval Cook Inlet . . Subject: C0234A-002 Admin Approval Cook Inlet From: Jody Colombie <jody_colombie@admin.state.ak.us> Date: Fri, 01 Jun 2007 14:44:39 -0800 To: undisclosed-recipients:; BCC: Cynthia B Mciver <bren_mciver@admin.state.ak.us>, Christine H <c.hansen@iogcc.state.okus>, Terrie Hubble <hubblet1@bp.com>, Sond an <StewmaSD@BP.com>, stanekj <stanekj@unoca1.com>, trmjrl <trmjr1@ao .com>,jdarlington <jdarlington@forestoi1.co elson <knelson@petroleumnews.com>, Mark Dalton <markdalton@hdrinc.com> annon Donnelly <sh elly@con illips.com>, "Mark P. Worcester" <markp.worces @conocophillips.com, ob@' etkee .org>, tjr <tjr@dnr.state.ak bbritch <bbritch@alaska.net>, mjnelson <mjn 0 purvingertz.com>, Charles O'Donnell <charles.o'donnell@veco.com>, "Randy L. Skillern" <Skille .com>, "Deborah J. Jones" <JonesD6@BP.com>, "Stev R. Rossberg" <RossbeRS BP.com>, Lois <lois@inletkeeper.org>, Dan Bros uacnews@kuac.org>, Pospisil <PospisG@BP.com>, "Francis S. Sommer" <SommerFS .com>, Mikel Schultz e1.Schultz@BP.com>, "Nick W. Glover" <GloverNW@BP.com>, , 1 J. Kleppi I <KleppiD P. >, "Janet D. " <PlattJD om>, "Rosanne M. Jacobsen" <Jac RM@BP. e nke .IT.com>, mckay < gc , Barbara F Fullmer <barb .fullmer 0 phillips. doug_schultze <doug_s x com>, Hank Alford <h ord@exxo bi1.com>, Mark Kovac <yesnol@gcl.net>, gsp 0 gspfoff@aurorapower.com>, Gregg Nad <gregg.nady@shel1.com>, Fred Steece <fred.steece@state.sd.us>, rcrotty <rcrotty@ch2m.com>, jej <jejones@aurorapower.com>, dapa <dapa@alaska.net>, eyancy <eyancy@seal-tite.net>, "James M. Ruud" <james.m.ruud@conocophillips.com>, Brit Lively <bl@mapalaska.com>, jah <jah@dnr.state.ak.us>, buonoje <buonoje@bp.com>, Mark Hanley <mark_hanley@anadarko.com>, Julie Houle <julie_houle@dnr.state.ak.us>, John W Katz <jwkatz kadc. , tablerk <tablerk@unoca1.com>, Brady <bra rg>, Brian Havelock <beh@dnr. . e <jimwhi satx.rr.com>, "John S. Ha ohn.s.haworth xonmobi1.com <marty dustria1.co hammons <ghammons@ao1.com>, rmclean < an@pobox.alaska.ne, 7200 <m O@ao1.com>, Brian Gillespie <itbmg@uaa.alaska.edu>, David L Boelens <db ns@aurorapo .com>, Todd Durkee <todd.durkee@anadarko.com>, Gary Schultz <gary _sch dnr.state.ak.us>, Wayne Rancier <RANCIER@petro-canada.ca>, Brandon Gagnon <bgagnon@bre law. com>, Paul Winslow <pmwinslow@forestoi1.com>, Sharmaine Copeland <copelasv bp.com>, Kristin Dirks <kristin_dirks@dnr.state.ak.us>, Kaynell Zeman <kjzeman@ honoi1.com>, John T r <John.Tower@eia.doe.gov>, Bill Fowler <Bill_Fowler@ana .COM>, Scott Cransw <scott.cr @ ov>, Brad McKim <mckimbs@BP.co James Scherr <james.s Lawlor <Tim_Lawlor@ak.blm.gov>, da Kahn <Lynnda_ @fws.gov>, Dethlefs <Jerry.C.Dethlefs@conoco ips. rockett@aoga.org, Tamera Sheffield <sheffield@aoga.org>, Jon Goltz <Jon.Goltz@cono hillips.c Roger Belman <roger.belman@conocophillips.com>, Mindy Lewis <mlewis@brenal .com>, Kari Moriarty <moriarty@aoga.org>, Patty Alfaro <palfaro@yahoo.com>, Gary Rogers <gary _rogers@revenue.state.ak.us>, Arthur Copoulos <Arthur _ Copoulos@dnr.state.ak.us>, Ken <klyons@otsint1.com>, Steve Lambert <salambert@unoca1.com>, Joe Nicks <news@radiokenai.com>, Jerry McCutcheon <susitnahydronow@yahoo.com>, Bill Walker <bill-wwa@ak.net>, Paul Decker <paul_decker@dnr.state.ak.us>, Aleutians East Borough <admin@aleutianseast.org>, Marquerite kremer <marguerite_kremer@dnr.state.ak.us>, Mike Mason <mike@kbbi.org>, Garland Robinson <gbrobinson@marathonoi1.com>, Cammy Taylor <cammy_taylor@dnr.state.ak.us>, Thomas E Maunder <tom_maunder@admin.state.ak.us>, Stephen F Davies <steve_davies@admin.state.ak.us>, Keith Wiles <kwiles@marathonoi1.com>, Deanna Gamble <dgamble@kakivikcom>, James B Regg 10f2 6/1/2007 2:45 PM C0234A-002 Admin Approval Cook Inlet . . <jimJegg@admin.state.ak.us>, Cat erster <cathy_foerster micallef <micallef@clearwire.net>, t <1 lliphant@ Steingreaber <david.e.steingreaber@exx . om> <Robert.Campbell@reuters.com>, Steve Moothart <steve_moot <anna.raff@dowjones.com>, Cliff Posey <cliff@posey.org>, M <Meghan.Powe asrcenergy.com>, Temple Davidson <1temple Featherly <W <jps@stateside.com>, Cody Rice <C Harry Engel < @bp.com>, Jim WI Rader <matt ra dnr.state.ak.us <art saltmarsh e.ak. us> Brue an <ru Frank n <sfrankl om , Mi i <WQuay@chevron.com>, "Alan Birnbaum <\"\"Alan J BJl <alan_birnbaum\"@law.state.ak.us>, Randall Kanady <R¡mdal.. ady@conocophillips.com>, MJ Loveland <N1878@conocophillips.com>, Dave Roby <dave_roby@admin.state.ak.us> Jody Colombie <iody colombieCG}admin.state.ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration Content-Type: applicationlpdf'· C0234A-002.pdf . Content-Encodmg; base64 20f2 6/1/20072:45 PM 0 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 71h Avenue, Suite 100 Anchorage, Alaska 99501 Re: THE APPLICATION OF HILCORP ALASKA, LLC for Administrative Approval amending Rule 3 of Conservation Order 234A to allow for an alternative method of determining production allocation between pools in certain commingled wells. Conservation Order No. 234A.003 Trading Bay Unit McArthur River Field Hemlock Oil Pool Middle Kenai "G" Oil Pool West Foreland Oil Pool October 17, 2013 By email received September 25, 2013, Hilcorp Alaska, LLC (Hilcorp) requested administrative approval to amend Rule 3 of Conservation Order 234A (CO 234A) to allow for an alternative method of determining production allocation between pools of wells configured in such a way as to prevent the use of production logging. In accordance with Rule 4 of CO 234A, the Alaska Oil and Gas Conservation Commission (AOGCC) hereby GRANTS Hilcorp's request to amend Rule 3. The existing Rule 3 of CO 234A states: Production logs shall be run within 2 months after initial completion [as a commingled producer] to determine proper allocation of produced fluids. Additional logs shall be run after significant changes to well mechanical configuration or abnormal, unexpected changes in well production characteristics. Results and copies of all logs shall be filed with the commission. Hilcorp is redeveloping the McArthur River Field to increase production rates and ultimate recovery. In an effort to increase production, Hilcorp is converting wells from gas lift to electric submersible pump (ESP). The configuration of a well completed with an ESP makes it impossible to run a production log to determine how much fluid is coming from each pool and thus makes compliance with Rule 3 impossible. For wells that will be commingled and completed with an ESP Hilcorp proposes to use well tests conducted before and after commingling commences as the basis for the allocation for that well. This allocation will remain constant until the production characteristics of the well indicate a revision to the allocation is necessary. Rule 4 of CO 234A states: Upon proper application, the Commission may administratively waive the requirements of any rule stated above or administratively amend this order as long CO 234A.003 • October 17, 2013 Page 2 of 3 as the change does not promote waste, jeopardize correlative rights, and is based on sound engineering principles. Amending Rule 3 will increase production by not requiring a waiver every time an ESP lifted well is commingled. The proposed change does not jeopardize correlative rights since Hilcorp is 100% owner of the entire field and the royalty rates are the same for all pools. Finally, the production optimization method and production allocation method proposed by Hilcorp is based on sound engineering principles. Now therefore it is ordered: Rule 3 of Conservation Order 234A is amended to read as follows: Rule 3. A. Production logs shall be run within 2 months after initial completion to determine proper allocation of produced fluids. Additional logs shall be run after significant changes to well mechanical configuration or abnormal, unexpected changes in well production characteristics. Results and copies of all logs shall be filed with the AOGCC. B. For wells completed with an electric submersible pump, or otherwise completed in a manner that makes it impossible to get a production logging tool to all of the perforated intervals in the well, the allocation shall be based on well tests conducted before and after the well is commingled. This allocation shall remain in effect for the life of the well unless the production characteristics change substantially and indicate a revision to the allocation methodology is necessary. The operator must get AOGCC approval before implementing a new allocation method for these wells. C. In order to monitor well production characteristics by April 1 sc of each year the operator shall submit to the AOGCC a list of all well tests conducted on the commingled wells during the previous calendar year that shows the name of the well, date of test, wellhead pressure, oil rate, gas rate, water rate, gas oil ratio, and water cut. DONE at Anchorage, Alaska and dated October Cathy P. Foerster Chair, Commissioner Commissioner CO 234A.003 October 17, 2013 Page 3 of 3 TION AND APPEAL 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 AOGCC grants for good cause shown, a person affected by it may file with the AOGCC 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 AOGCC 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 AOGCC 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 AOGCC mails, OR 30 days if the AOGCC 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 AOGCC grants an application for reconsideration, this order or decision does not become final. Rasher, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise 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 AOGCC 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. • Singh, Angela K (DOA) From: Colombie, Jody J (DOA) Sent: Thursday, October 17, 2013 11:53 AM To: Singh, Angela K (DOA); Ballantine, Tab A (LAW); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Colombie, Jody J (DOA); Crisp, John H (DOA); Davies, Stephen F (DOA); Ferguson, Victoria L (DOA); Fisher, Samantha J (DOA); Foerster, Catherine P (DOA); Grimaldi, Louis R (DOA); Hunt, Jennifer L (DOA); Johnson, Elaine M (DOA); Jones, Jeffery B (DOA); Laasch, Linda K (DOA); Bender, Makana K (DOA); Mumm, Joseph (DOA sponsored); 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); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Turkington, Jeff A (DOA); Wallace, Chris D (DOA); (michael j.nelson@conocophillips.com); AKDCWellIntegrityCoordinator; Alexander Bridge; Andrew VanderJack; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Barron, William C (DNR); Bill Penrose; Bill Walker; Brian Havelock; Burdick, John D (DNR); Cliff Posey; Colleen Miller; Crandall, Krissell; D Lawrence; Daryl J. Kleppin; Dave Harbour; Dave Matthews; David Boelens; David Duffy; David Goade; David House; David Scott; David Steingreaber; Davide Simeone; ddonkel@cfl.rr.com; Donna Ambruz; Dowdy, Alicia G (DNR); Dudley Platt; Elowe, Kristin; Evans, John R (LDZX); Francis S. Sommer, Frank Molli; schultz, gary (DNR sponsored); ghammons; Gordon Pospisil; Gorney, David L.; Greg Duggin; Gregg Nady; gspfoff; Jacki Rose; Jdarlington oarlington@gmail.com); Jeanne McPherren; Jones, Jeffery B (DOA); Jerry McCutcheon; Jim White; Jim Winegarner; Joe Lastufka; news@radiokenai.com; Easton, John R (DNR); John Garing; Jon Goltz; Jones, Jeffrey L (GOV); Juanita Lovett; Judy Stanek; Houle, Julie (DNR); Julie Little; Kari Moriarty; Keith Wiles; Kelly Sperback; Kiorpes, Steve T; Klippmann; Gregersen, Laura S (DNR); Leslie Smith; Lisa Parker; Louisiana Cutler; Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark P. Worcester; Kremer, Marguerite C (DNR); Michael Jacobs; Mike Bill; mike@kbbi.org; Mikel Schultz; Mindy Lewis; MJ Loveland; mjnelson; mkm7200; knelson@petroleumnews.com; Nick W. Glover; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Pioneer; Randall Kanady; Randy L. Skillern; Randy Redmond; Rena Delbridge; Renan Yanish; Robert Brelsford; Robert Campbell; Ryan Tunseth; Sandra Haggard; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer; Moothart, Steve R (DNR); Steven R. Rossberg; Suzanne Gibson; Sheffield@aoga.org; Tania Ramos; Ted Kramer, Davidson, Temple (DNR); Terence Dalton; Teresa Imm; Thor Cutler; Tim Mayers; Tina Grovier (tmgrovier@stoel.com); Todd Durkee; Tony Hopfinger; trmjrl; Vicki Irwin; Walter Featherly; yjrosen@ak.net; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Anne Hillman; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; David Lenig; David Martin; Perrin, Don J (DNR); Donna Vukich; Eric Lidji; Erik Opstad; Gary Orr; Smith, Graham O (PCO); Greg Mattson; Heusser, Heather A (DNR); Holly Pearen; James Rodgers; Jason Bergerson; Jennifer Starck; jill.a.mcleod@conocophillips.com; Jim Magill; Joe Longo; King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Marc Kuck; Steele, Marie C (DNR); Matt Armstrong; Matt Gill; Franger, James M (DNR); Bettis, Patricia K (DOA); Peter Contreras; Pollet, Jolie; Richard Garrard; Ryan Daniel; Sandra Lemke; Pexton, Scott R (DNR); Peterson, Shaun (DNR); Pollard, Susan R (LAW); Talib Syed; Wayne Wooster; Woolf, Wendy C (DNR); William Hutto; William Van Dyke Subject: co234a.003 (Hilcorp) Attachments: co234a.003.pdf 0 • Jody j. Colombie Special Assistant Alaska Oil and Gas Conservation Commission 333 W. 7t" Avenue Anchorage, Alaska 99501 (907) 793-1221 (907) 276-7542 Easy PeelO Labels Use Avery® Template 51600 l Bend slang line to AVERY® 5960TM Feed Paper ® expose Pop-up EdgeTM � Dan Marlowe Operations Engineer Hilcorp Alaska, LLC Post Office Box 244027 Anchorage, AK 99524-4027 ttiquettes faciles a peter ; A Repiiez a la hachure afin tie ; www.averycom Utilisez le abarit AVERY® 51600 Sens de reveler le rebord Pop-up- ' 1-800-GO-AVERY 9 � eharaementi Easy Peet® Labels & Bend aforig line to Use Avery® Template 51600D feed Paper expose Pop-up EdgeTr" David McCaleb Penny Vadla IHS Energy Group 399 W. Riverview Ave. GEPS Soldotna, AK 99669-7714 S333 Westheimer, Ste.100 Houston, TX 77056 George Vaught, Jr. Post Office Box 13557 Denver, CO 80201-3557 Richard Neahring Jerry Nodgden NRG Associates Mark Wedman Nodgden Oil Company Halliburton 408 18`" St. President 6900 Arctic Blvd. Golden, CO 80401-2433 Post Office Box 1655 Anchorage, AK 99502 Colorado Springs, CO 80901 Bernie Karl CIRI Baker Oil Tools M Recycling Inc. Land Department h Post Office Box 58055 Post Office Box 93330 795 E. 94` Ct. Fairbanks, AK 99711 Anchorage, AK 99503 Anchorage, AK 99515 4295 North Slope Borough Box Planning Department Richard Wagner Gordon Severson Post Office BPost Office Box 60868 3201 Westmar Cir. Barrow, AK9972369 Fairbanks, AK 99706 Anchorage, AK 99508-4336 lack Hakkila Darwin Waldsmith James Gibbs Post Office Box 190083 Post Office Box 39309 Post Office Box 1597 Anchorage, AK 99519 Ninilchik, AK 99639 Soldotna, AK 99669 kiclueittes f;aciles Al peter ; 3 Fiepliez a la hachure afin de ; www.avery.com 0 Sens de •- -�- • •— .•. o�.rn,. #4 Colombie, Jody J (DOA) From: Roby, David S (DOA) Sent: Wednesday, September 25, 2013 9:14 AM To: Colombie, Jody J (DOA) Subject: FW: Sundry application for TBU D-11, PTD 168-073 Jody, Is this email a sufficient application for an admin approval? If so, please docket it and assign it to me. If not, I'll ask them to send in a letter. Thanks, Dave Roby (907) 793-1232 From: Dan Marlowe [mailto:dmarlowe@hilcorp.com] Sent: Wednesday, September 25, 2013 8:07 AM To: Roby, David S (DOA) Cc: Schwartz, Guy L (DOA); Bettis, Patricia K (DOA); Ted Kramer; Juanita Lovett; Larry Greenstein Subject: RE: Sundry application for TBU D-11, PTD 168-073 Dave, Hilcorp Alaska, LLC (Hilcorp) requests that Rule #3 of Conservation Order 234A (CO 234A) requiring production logging to determine the production allocation between pools be waived, by means of Rule #4, for the Trading Bay Unit (TBU) D- 11 well and all future TBU wells. Hilcorp is 100% owner and operator of the TBU wells and plans to convert this well as well as many others over time to Electric Submersible Pumps (ESPs) from gas lifted wells to increase production and improve efficiency of operations. As the downhole configuration of an ESP installation negates the ability to run production logging tools across the different sets of perforations, Hilcorp proposes to use well test data (before and after commingling) as the primary method of allocation for commingled production from the TBU wells. We propose to hold the initial allocation percentages of oil, water, and gas constant until the production characteristics of the well change substantially and require a reallocation of production between pools. A waiver of this Rule #3 is possible in that it will not promote waste, and as the royalty interests are the same between pools, no correlative rights are jeopardized. Our experience, using sound engineering principles and the downhole limitations of ESP installations, has demonstrated that this is the most prudent course of action to take. We therefore ask the AOGCC to concur by waiving the requirements set forth in Rule #3 of CO 234A and allow allocation percentages be determined by well test data performed before and after the commingling of production. Dan Marlowe Hilcorp Alaska, LLC Operations Engineer Office 907-283-1329 Cell 907-398-9904 Fax 907-283-1315 Email DMarlowe(a-)hilcorp.com Hilcorp A Company Built on Energy From: Roby, David S (DOA) [mailto:dave.roby@alaska.gov] Sent: Tuesday, September 03, 2013 10:27 AM To: Dan Marlowe Cc: Schwartz, Guy L (DOA); Bettis, Patricia K (DOA) Subject: Sundry application for TBU D-11 Dan, Part of the work proposed by your sundry application is to perforate a new pool and thus turn the subject well into a commingled producer. In the McArthur River Field commingled production involving the Hemlock, Middle Kenai "G" and West Foreland oil pools is authorized by CO 234A. Rule 3 of this order states: "Production logs shall be run within 2 months after initial completion to determine proper allocation of produced fluids. Additional logs should be run after significant changes to well mechanical configurations or abnormal, unexpected changes in well production characteristics. Results and copies of all logs will be filed with the Commission." Clearly with an ESP pump set above the perforated intervals a production log will not provide any useful information for allocation of production between the pools. The previous operator of this field, UNOCAL Corp., had asked for a blanket waiver of this requirement for future wells, but via administrative approval CO 234A.001 the AOGCC approved the request for only two specific wells and stated "Rule 3 of CO 234A may be waived on a case -by -case basis for other wells." This administrative approval is still in effect. As such, we will need an application from Hilcorp for a waiver of the production logging requirement of CO 234A Rule 3 and a proposal for an alternative method of production allocation between the pools for the subject well. Regards, Dave Roby Sr. Reservoir Engineer Alaska Oil and Gas Conservation Commission (907) 793-1232 -:#3 [Fwd: Dolly Varden Platform Gross separator.air Plan] . Subject: [Fwd: Dolly Varden Platform Gross Separator Repair Plan] From: Dave Roby <dave_roby@adrnin.state.ak.us> Date: Mon, 11 Jun 200708:33:04 -0800 To: Jody Colornbie<jodysêòlornbie@a4rn.in.state.ak.us> Jody, Please file this ernail in the C0234A-2 file. Thanks, Dave -------- Original Message -------- Subject:Dolly Varden Platform Gross Separator Repair Plan Date:Thu, 31 May 200720:14:31 -0500 From:Martin, J. Hal <Hal.Mmiincmchevron.com> To:Torn Maunder (AOGCC) <torn rnaundercmadrnin.state.ak.us>, Dave Roby (AOGCC) <dave roby(2ì2adrnin.state.ak.us> CC:Paul Winslow (Forest) <prnwinslow(2ì2forestoil.com>, Greenstein, Larry P <Greensteinlp(2ì2chevron.com>, Cole, David A <dcole(2ì2chevron.com>, Bindon, Phil E <BindonP(2ì2chevron.com>, Santiago, Johnny T <santiagoj(2ì2chevron.com>, Bartolowits, Paul D <bartopd(2ì2chevron.com> Tom and Dave, Per my conversation with Dave today, I am e-mailing this update to you. As I mentioned to Dave, if you require a more formal letter please let me know and I will essentially put the words below in a letter to you. As we committed to you in Union Oil Company of California's (Union Oil) letter to you on April 27, 2007, the purpose of this letter is to communicate to you the outcome of the inspection of the gross production separator and the plan forward for it's repair so that the temporarily suspended well testing on the Dolly Varden Platform, Trading Bay Unit, McArthur River Field can be restored. The gross production separator was cleaned and inspected around mid-May. The failure on the underside wall of the separator has been attributed to erosion -- most likely caused by nozzle discharge proximity. During the inspection, another area of the separator was found to have wall thinning that warrants repair. The plan forward includes 1) internal sandblasting, 2) cutting out the two areas to be repaired (each section approximately 4' x 5' in size), 3) replacing and welding in new sections and nozzles, 4) inspect and hydrotest the separator, 5) internally coat the separator, and 6) return the separator to service. Assuming our partner, Forest Oil, approves the AFE shortly after receiving it and also the sourcing of materials and manpower to do the work is not unusually delayed, Union Oil expects the work to be completed within the September/October 10f2 6/11120079:24 AM [Fwd: Dolly Varden Platform Gross separator.air Plan] . 2007 timeframe. I will correspond with you if something impacts this plan. Otherwise, I plan to send you a note when the gross production separator is restored to service (and well tests resumed) on the Dolly Varden Platform later this year. Let me know if you have any questions. Thanx, Hal9rf.artin Optimization Engineer MidContinentlAlaska Business Unit Chevron North America Exploration and Production 909 West 9th Avenue Anchorage, AK 99501-3322 Tel 907 263 7675 Fax 9072637847 hal. martin@2chevron.com David Roby <dave roby(2ì2adrnin.state.ak.us> Reservoir Engineer Alaska Oil and Gas Conservation Commission 20f2 6/11/2007 9:24 AM [Fwd: Re: Dolly Varden Platform Gross sepaWRepair Plan] . Subject: [Fwd: Re: Dolly Varden Platform Gross Separator Repair Plan] From: Dave Roby <dave _roby@admin.state.ak.us> Date: Mon, 11 Jun 2007 08:33:49 -0800 To: Jddy Cdlombiè<jody'Scolombie@admin.state.ak.us> Jody, Please file this email in the C0234A-2 file. Thanks, Dave -------- Original Message -------- Subject:Re: Dolly Varden Platform Gross Separator Repair Plan Date:Mon, 11 Jun 2007 08:32:22 -0800 From:Dave Roby <dave roby(Q!admin.state.ak.us> Organization:State of Alaska To:Martin, J. Hal <HaI.Martin(Q!chevron.com> CC:Thomas Maunder <tom maunder(Q!admin.state.ak.us> References:<BB24B90FCC97884A84E7BA 7FOC52D4 7601 OEE7BC(Q!HOU 150NTXC 1 MC.hou 150.chevrontexaco.net: Hal, Thanks for the information. At the end of your email you state that you will only correspond with us again on this matter if something impacts the plan or when the equipment has been returned to service. I want to point out that condition 2 of Administrative Approval C0234A-2 which was signed on June 1 st, the day after you sent the email below, requires a monthly update on the status of the repairs. So please send us an update on the repair status around the end of each month until the equipment is returned to service. If something materially changes or would otherwise impact the repair plan and schedule outlined below please notify us as soon as possible. Thank you, Martin, J. Hal wrote: Tom and Dave, Per my conversation with Dave today, I am e-mailingthisupdatetoyou.AsImentioned to Dave, if you require a more formal letter please let me know and I will essentially put the words below in a letter to you. As we committed to you in Union Oil Company of California's (Union Oil) letter to you on April 27, 2007, the purpose of this letter is to communicate to you the outcome of the inspection of the gross production separator and the plan forward for it's repair so that the temporarily suspended well testing on the Dolly Varden Platform, Trading Bay Unit, McArthur River Field can be restored. The gross production separator was cleaned and inspected around mid-May. The failure on the underside wall of the separator has been attributed to erosion -- most likely caused by nozzle discharge proximity. During the inspection, another area of the separator was found to have wall thinning that warrants repair. The plan forward includes 1) internal sandblasting, 2) cutting out the two areas to be repaired lof2 6/11/2007 9:24 AM [Fwd: Re: Dolly Varden Platform Gross sepa.Repair Plan] . (each section approximately 4' x 5' in size), 3) replacing and welding in new sections and nozzles, 4) inspect and hydrotest the separator, 5) internally coat the separator, and 6) return the separator to service. Assuming our partner, Forest Oil, approves the AFE shortly after receiving it and also the sourcing of materials and manpower to do the work is not unusually delayed, Union Oil expects the work to be completed within the September/October 2007 timeframe. I will correspond with you if something impacts this plan. Otherwise, I plan to send you a note when the gross production separator is restored to service (and well tests resumed) on the Dolly Varden Platform later this year. Let me know if you have any questions. Thanx, J{a{ 9dartin Optimization Engineer MidContinent/Alaska Business Unit Chevron North America Exploration and Production 909 West 9th Avenue Anchorage, AK 99501-3322 Tel 907 263 7675 Fax 907 263 7847 hal. martín@chevron.com David Roby <dave roby(Q!admin.state.ak.us> Reservoir Engineer Alaska Oil and Gas Conservation Commission 20f2 6/11/20079:24 AM FW: Dolly Varden Platform Well Testing Suspended Temporarily . . Tom, Per your earlier request, here is a PfD for the Dolly oil system. See Phil's comment below. Thanx, Hal from: Bindon, Phil E Sent: Friday, April 13, 2007 8:45 AM To: Martin, J. Hal Cc: Santiago, Johnny T; Myers, Chris S; Bartolowits, Paul D; Lee, John R Subject: RE: Dolly Varden Platform Well Testing Suspended Temporarily Hal, See the attached flow diagram showing the separators, with #5 marked as under repair. Content-Description: V-F-OOlO.pdf Content- Type: application/octet-stream Content-Encoding: base64 I of 1 6/4/2007 10:45 AM . . ~_.".~,,»;,","" Dolly Varden Separator #5 Status and Well Test Update . . Tom, As we discussed this AM, I wanted to give you an update on the status of the Dolly Varden Separator #5 evaluation/repair and the consequential impact on our inability to test wells. I discussed the status of the separator evaluation today with the facility engineer and the platform foreman. The bulk of the solids have been cleaned out of the separator. The plan is to hydroblast the walls of the separator to get past the surface rust/debris to be able to do an evaluation. The problem now is that the contractors we normally get to do the work (ASRC or Peak) are already tied up working on plant turnarounds until late May/early June. Once we get the vessel hydroblasted, it is expected that an inspection, evaluation, and plan forward should be completed within 1-2 weeks. This means that our current outlook puts the plan forward in mid/late June and the repair guesstimate 1-5 months later, depending on what is uncovered. Our facility guys are continuing to look for a contractor who can do the hydroblasting work and shorten the time frame to plan forward. I think that my direction now should be to submit the request for well testing variance approval next week as Dave Roby mentioned earlier. let me know if you agree or have any other thoughts/issues on the subject. Others -- comments? Thanx, HaC 9dartin Optimization Engr Chevron 909 W. 9th Avenue Anchorage, AK 99501 Tel 907 263 7675 Fax 907 263 7847 hal.martin@chevron.com 1 of I 6/4/2007 10:45 AM RE: Dolly Varden Platform Well Testing Suspended Temporarily . . Tom and Dave, I was out yesterday and am now seeing your e-mails. I have just forwarded your comments/requests to our facility folks to get their input. I should have something for you next week. Thanx, Hal From: Thomas Maunder [mailto:tom_maunder@admin.state.ak.us] Sent: Thursday, April 12, 2007 11:03 AM To: Dave Roby Cc: Martin, J. Hal Subject: Re: Dolly Varden Platform Well Testing Suspended Temporarily Dave, Thanks for messaging Hal with the process requirements. All production form the Trading Bay Unit platforms is combined onshore for separation and custody transfer metering. Tom Dave Roby wrote, On 4/12120079:49 AM: Hal, Our regulations, 20 AAC 25.230(a), specify that well testing facilities and allocation methods must be acceptable to the commission and that each well must be tested at least monthly. Since you will be unable to perform monthly well testing you will need to get approval from the Commission to vary fÌom the requirements of this regulation. It will be a simple process for us to grant this approval, but we will need a "formal" application from you in order to kick off the process. Please send a letter containing the information in your email below and any additional details that you have at this time about the problem that has occurred, how it will be fixed, and the allocation method you will use. The letter should be addressed to John K. Norman the Chairman of the AOGCC. Also, it is unclear to me how the custody transfer metering is being done. Is production from the three test separator systems being combined and metered through the regular custody transfer meter or are the well test allocation meters now being used for custody transfer purposes? Ion 6/4/2007 10:41 AM RE: Do,y Varden Platform Well Testing Suspended Temporarily . . Thank you, Dave Reservoir A.1aska. Oil. and. Gas COIJ,r:3C':c\:'i3tì.oll CornrniE3E3J.on 907-793-1232 Thomas Maunder wrote: Hal, Sorry I did not get back to you sooner. Do you have any updated information on repair of the main separator? Do you have a simple drawing of how the 3 test separators are hooked up? Are specific wells dedicated to each separator? Look forward to your reply. Tom Maunder, PE AOGCC Martin, J. Hal wrote, On 41312007 9:43 AM: Tom, The reason for this e-mail is to inform you that well testing has been suspended temporarily on the Dolly Varden platform and our plan to allocate production based on the last test from each of the Dolly Varden producers until normal operations are restored. On Saturday (3/31), we shut-in our gross separator on the Dolly Varden Platform due to a leak in the belly area of the vessel body. This means that all of our production is now routed through the platform's 3 test separators/header and individual well tests are now not possible. Here is our current repair outlook: 1. The vessel is currently being prepared/cleaned out for inspection. 2. Results of the vessel inspection and a more definite plan forward for repair is expected by or before the week of April 16. 3. Preliminary estimates of separator down time are from 1 to 5 months, depending on extent of repair necessary. We will still monitor gross production off of the platform and individual well characteristics (ESP parameters and gas lift/pressure charts) to help us trouble shoot and resolve well issues that may arise during this period. Again, the primary compromise in this situation is our ability to get individual gross and net oil numbers. I will inform you of the updated plan when it becomes available. let me know if you have any questions/concerns as well as any additional issues or reporting processes that we need to address or include at this time. 20f3 6/4/2007 10:41 AM *2 . . Chevron =- J. Hal Martin Optimization Engineer MidContinent; Alaska Chevron North America Exploration and Production P.O. Box 196247 Anchorage, AK 99519-6247 Tel 907 263 7675 Fax 907 263 7847 Email HaI.Martin@chevron.com F{ECEIVED APR 2 7 2007 April 27, 2007 Alaska Gil & Gas Cons. Commission Anchorage Commission Chair John K. Norman Alaska Oil and Gas Conservation Commission 333 W 7th Ave, Suite 100 Anchorage, Alaska 99501-3539 REQUEST FOR TEMPORARY SUSPENSION OF WELL TESTS DOLLY VARDEN PLATFORM TRADING BAY UNIT McARTHUR RIVER FIELD Dear Mr. Norman: Union Oil Company of California (Union Oil) requests permission to vary from 20 AAC 25.230(a) and temporarily suspend well tests on the Dolly Varden Platform, Trading Bay Unit, McArthur River Field. The reason the well tests have been suspended is because of the shut-in of the gross production separator on March 31, 2007 after it began leaking from the belly area of the vessel body. To maintain total production levels, production has been routed through the remaining three test separators. It is anticipated that restoring the gross production separator to service (after repair or replacement) will be between early July and late November of this year, depending on the results of the upcoming inspection and evaluation. Therefore, the time frame for suspended well tests is potentially from April through November. Until well testing can be restored, Union Oil will monitor gross production off the platform as well as individual well characteristics (ESP parameters and gas lift/pressure charts) to troubleshoot well production issues that may arise. Monthly production for each well will be allocated based on averaging the last three well tests as appropriate for each well and then applying each well's prorated share of gross and net oil production to the Dolly Varden Platform production. The following information is provided to support the request for the variance by explaining the need to suspend well testing as well as the work done as of this time and current plan forward to restore normal operations. MidContinent! Alaska Chevron North America Exploration and Production www.chevron.com . . Commission Chair John K. Norman Alaska Oil and Gas Conservation Commission April 27, 2007 Page 2 Operationally, the Dolly Varden Platform is fluid separation capacity constrained without the gross production separator. Although production from a well can be isolated and directed to one of the remaining three test separators, doing so would necessitate the shutting in of 3-5 other producers given the capacity constraint of the other two test separators. As a result of shutting in 3-5 gas lift producers, the gas lift compressor would then be shut down to prevent gas flaring. The end result is that the two ESP wells on the platform are the only wells that can be tested and would require all the other gas lifted producers to be shut-in. Following the shut-in of the gross production separator on March 31,2007, I have maintained communication with Tom Maunder and Dave Roby through e-mail and phone conversations concerning this situation. The separator was opened up and the bulk of the solids removed by mid-April. The effort for much of April has been applied to locating a contractor available to hydro blast clean the interior walls of the separator to prepare it for inspection. The plan forward is to hydro blast clean the interior walls of the gross production separator next week, then perform an inspection on the vessel, evaluate the results, and develop a repair or replacement solution before the end of May. At that point, a more definitive estimate of time to restore well testing on the Dolly Varden Platform will be understood and communicated to you. Thank you for your consideration and if you have any questions regarding this, please contact me at 263-7675. Sincerely, ~A(h* Hal Martin cc: Tom Maunder, AOGCC Dave Roby, AOGCC Paul Winslow, Forest Oil Company MidContinent/Alaska Chevron North America Exploration and Production www.chevron.com 4:f1 ~ .. . Unocal Corporation . Oil & Gas Operations 909 West 9th Avenue, P. . ox 196247 Anchorage, Alaska 99519-6247 \-- .~...-.._- ~ COMM f June 22, 1995 COMM COMM I RES ENG I SR ENG I SR ENG I ENG ASST I ENG ASST I SR GEOL I GEOl ASSTL I-=~;r;:'- ! Gh;l ASST¡ UNOCALe Kevin A. Tabler Land Manager Alaska Business Unit Mr. David W. Johnston, Chainnan Bf~H~2~~j AK Oil And Gas Conservation CommissiOItEJ)..E ___ L . 3001 Porcupine Drive Anchorage, AK 99501-3192 Re: Request to Modify Conservation Order No. 234A Hemlock. Middle Kenai "G". and West Foreland Oil Pools. McArthur River Field Dear Chairman Johnston: Union Oil Company ofCalifornÍa (UNOCAL) and Marathon Oil Company (Marathon), as Working Interest Owners in the Trading Bay Unit and the McArthur River Field seek a waiver of Rule 3 of Conservation Order No. 234A, pursuant to Rule 4 of the same order. Specifically, we ask that the AOGCC waive the requirement of production logs in instances where UNOCAL and Marathon agree to use acceptable alternative methods of determining production allocation, such as well test data. Conservation Order No. 234A, which was granted in December 1993, provided for the downhole commingling of all WIPAs (G-Zone, Hemlock and West Foreland). This commingling Order concluded that production allocation could result ITom periodic production logging or alternative engineering methods should the well bore become inaccessible. As a result, Rule 3 of said Order stipulates that production logs shall be run within 2 months of completion in order to allocate production between WIP As . King Salmon Platform Well No. K-lORD was the first well to downhole commingle G- Zone and Hemlock after Order No. 234A was granted. A production log was attempted once the G-Zone in Well K-lORD was open to production. This log failed to provide accurate allocation information about the G-Zone production due to the instability of the well in general and the proximity of the new G-Zone perforations to the end of the tubing. As the logging tools moved up the hole and neared the end of the tubing, the tool readings were influenced by the change in fluid flow characteristics in the well bore (turbulence around the end of the tubing). As the top of the logging tool assembly entered the 3-1/2" tubing, the tool affected the flow as well by acting like a downhole choke. An interpretation of the data was therefore impossible with these production upsets. R E ( E I V E D ,¡UN 28 1995 f,lasl<a Oil & Gas Cons. Commission . k , .~ '. . Mr. David W. Johnston, Chairman AK Oil and Gas Conservation Commission Request to Modify C.O. No. 234A Page Two Based on this experience, UNOCAL and Marathon agreed that the production ITom other wells of this type should be allocated based on the well test data (before and after results) rather than continuing to expend money running inconclusive production logs. This was recently the case on K-3RD and K-19RD, where the incremental production was allocated to the new productive interval added. The allocated percentage, by commodity (oil, water, gas), that each WIPA contributed to a well's total production is held constant until production characteristics of that well change substantially and require reallocation. We therefore seek a waiver of Rule 3 for wells K-3RD and K-19RD, as well as for any commingling project subject to CO 234A in which the Working Interest Owners agree on the resulting production allocation. Well test data would be our primary method of allocation, unless the Working Interest Owners determine that significant uncertainty in the results require an alternate approach, such as production logging. A waiver of this Rule 3 is possible in that it will not promote waste, and as the royalty interests are the same between WIP As, no correlative rights are jeopardized. Our experience, using sound engineering principles, has demonstrated that this is the prudent course of action to take. We therefore ask that the AOGCC concur by waiving the requirements set forth in Rule 3 of CO 234A. CONCURRED thisZ1Zday of June, 1995 MARATHON OIL COMPANY /4Æeæ.5 J: ~ BY:~ Title: ' G /?J~1J6eR RECE\\JED jUN 28 1995 ¡\\',iSKí.ì 0\\ & Gas, c~:s. commission .;;.\.HvnG¡(