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Home My WebLink AboutDIO 014Image Project Qrcler File Cover Page XHV7_E 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. © ~ ~ ~ Order File Identifier Organizing (done) RESCAN ^ Calor Items: ^ Greyscale Items: Poor Quality Originals: ^ Other: NOTES: BY: Projecf Proofing BY: Date: ~, a~=~.,,~eeae~ iiiiiminiuuii OVERSIZED (Scannable) ^ Maps: ^ Other Items Scannable by a Large Scanner OVERSIZED (Non-Scannable) ^ Logs of various kinds: .,iiuauuii~iuu v~P Y Scanning Preparation x 30 = + =TOTAL PAGES ~~ ~/D (Count does not include cover sheet) l ^ ^ I BY: Maria Date: ~s~ U ~/ Production Scanning ' ~ IIIIIIIIIIIIII IIIII Stage 1 Page Count from Scanned File: _~ (Count does include cover sheet) Page Count Matches Number in Scanning Pre aration: YES NO BY: Maria Date: ~ a `~.. I V Isl Stage 7 If NO in stage 1, page(s) discrepancies were found: YES NO BY: Maria Date: ~s~ Scanning is complete at this point unless rescanning is required. III 111111 I IIII II III ReScanned III IIIIIIIIIII IIIII BY: Maria Date: Comments about this file: ~wo-sided IIIII~IIIIIIIIIIIII DIGITAL DATA ^ Diskettes, No. ^ Other, No/Type: Date: /s/ o~a,~,~~e~~ed iiiuumuiuuu 10/6/2005 Orders File Cover Page.doc Disposal Injection Order #14 Houston Gas Field 1. May 13 1998 2. May 1998 3. May 5, 1998 4. May 15, 1998 5. May 18, 1998 6. June 11, 1998 7. June 15, 1998 8. June 17, 1998 9. June 19, 1998 10. July 14, 1998 11. September 27, 2004 GRI's Application for AIO Notice of Hearings and Affidavit of Publication AOGGC's ltr to GRI Re: Houston 1,2, and 3 Water Disposal GRI's ltr to AOGCC re: Houston Gas field Sub-surface Transfer of Water from Coal Seams to a deeper Saline -water-bearing Sandstone GRI's request for a well spacing AOGCC ltr to GRI: regarding subsurface transfer of water from coal seams and GRI response GRI Justification for ten-acre spacing inter-office e-mail GRI's disposal zone and water production Ltr from AOGCC to GRI re: return of sundry Applications Proposal to amend underground injection orders to incorporate consistent language addressing the Mechanical Integrity of wells Disposal Injection Order #14 r • STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage, Alaska 99501-3192 Re: The APPLICATION OF GRI, Inc. ) Disposal Injection Order No. 14 ("GRI") for approval to pump formation ) waters derived from coal seams into a deeper ) Houston Gas Field sandstone interval ) Houston Gas Well No. 3 June 30, 1998 IT APPEARING THAT: 1. By correspondence dated May 15, 1998, GRI requested authorization from the Alaska Oil and Gas Conservation Commission to pump formation waters produced from the dewatering of coal seams into a deeper sandstone interval with higher salinity formation water without first producing the water to the surface. The production perforations and underlying receiving zone perforations are within the same well. 2. °GRI filed the application on an area basis for the Houston Gas Field; however, information supplied within the application is specific only to the Houston No. 3 well. 3. The Commission requested additional information June 11, 1998. GRI provided the requested information on June 12 and 19, 1998. 4. The Commission published notice of opportunity for public hearing in the Anchorage Daily News on May 27, 1998 and in the Frontiersman on May 27, 1998. 5. The Commission did not receive any protest or request for a public hearing. FINDINGS: GRI is the operator of the Houston Gas Field. There are no other operators within aone- quarter mile radius of the Houston No. 3 well. 2. Surface owners within aone-quarter mile radius of Houston No. 3 have been duly notified of the proposed operation. 3. The Rosetta. No. 3 well is within one-quarter mile of Houston No. 3. Rosetta. No. 3 has been plugged and abandoned in accordance with 20 AAC 25.105. 4. Logs from Houston No. 3 may be used to define the disposal and confining zones proposed for subsurface disposal of fluids in the Houston Gas Field. The proposed disposal zone is an unnamed sand in the basal portion of the Tyonek Fm. between the measured depths of 1886 feet and 2030 feet in the Houston No. 3. The lithology consists of fine- to coarse-grained arkosic sandstone grading toward the base to lithic quartz-pebble conglomerate. 6. The production interval is between the measured depths of 1338 feet and 1856 feet in the Houston Gas Field Page 2 Disposal Injection Order No. 14 Houston No. 3. 7. The proposed confining zone consists of Tyonek Fm. claystones between the measured depths of 1856 feet and 1867 feet in Houston No. 3. 8. Industry standard interpretation of cement bond logs obtained by GRI indicates Houston No. 3 is adequately cemented to provide isolation between the intended disposal zone and the base of freshwater aquifers in the area. 9. Houston No. 3 surface casing consists of 505 feet of 7 inch, 231b. per foot casing cemented in place. The production casing consists of 2030 feet of 4.5 inch, 10.75 lb. per foot casing cemented to surface. The well is not equipped with tubing. 10. GRI collected water samples during the drilling of the Houston 1, 2 and 3 wells. These water samples and samples taken from adjacent oil and gas wells and coal exploration holes indicate the base of freshwater with salinity greater than 10,000 parts per million is about 800 feet below ground level in this vicinity. 11. The formation water salinity gradient in the Houston Gas Field increases with depth. 12. Water derived from coalbed methane gas production will be gravity separated in the well and the water will be pumped into the basal receiving zone using a subsurface pump. 13. The subsurface pump will be positioned in a packer that will confine injection pressure to the proposed receiving interval. 14. Total water volume to be pumped is estimated at 200,000 barrels. The rate of water production from the coal seams is expected to decline with time. 15. The average rate of the subsurface pump will be about 1130 barrels of water per day and maximum anticipated is 1400 barrels per day. Average bottom hole pressure is expected to be 1250 psi; maximum pump pressure will be 1550 psi. 16. Accepted fracture theory for sandstone buried at shallow depth, similar depth to the interval for disposal operations in Houston No. 3, require pump rates significantly higher than those anticipated with the intended pumping equipment to propagate fractures in the receiving zone. Shallow depth fracture orientation is normally horizontal. 17. Integrity of the system will be monitored based on production rates of gas and water, wellhead pressure and pump operation parameters. Operating wellhead pressure is not expected to exceed 100 psi and shut-in pressure due to a gas column may be as high as 800 psi. CONCLUSIONS: There are freshwater aquifers to a depth of 800 feet underlying the Houston Gas Field. 2. Fluids authorized for disposal under this order in the Houston Gas Field will consist of coal seam formation waters generated from coalbed methane production operations. 3. Permeable strata that reasonably can be expected to contain the total volume of disposal fluids anticipated for this project are present in a basal sandstone of the Tyonek Formation Houston Gas Field ~ ~ Page 3 Disposal Injection Order No. 14 in the Houston Gas Field. 4. Disposal pressure and fluids will be isolated within the wellbore to the interval below the pump packer. 5. Confming lithology, cement isolation of the wellbore and operating conditions, will confine movement of disposal fluids within appropriate receiving intervals. 5. Pumping operations are not expected to induce fractures in the receiving formation at the low rate and rated pump pressure. 7. Mechanical system integrity and surveillance data will be monitored continually using gas rate performance, indications of water production at surface with the gas, wellhead pressure and pump performance. S. Disposal operations will not inject fluids into, through or above a freshwater source. 9. The underground disposal of produced water, without first producing the water to the surface, is an environmentally preferred alternative that reduces the risk of movement of fluids into sources of freshwater. 10. Waiver of the tubing and pressure test requirements of 20 AAC 25.412 will not result in an increased risk of movement of fluids into a freshwater source. 11. The proposed operation conforms to all other regulatory requirements for subsurface disposal of produced formation waters. 12. The. proposed disposal injection operations in the Houston Gas Field will not cause waste, jeopardize correlative rights, impair ultimate recovery, or affect overlying freshwater aquifers. NOW, THEREFORE, IT IS ORDERED THAT: Rule 1 Authorized Infection Strata for Disposal. Waters derived as a by product of coalbed methane production in the Houston No. 3 well may be injected without first being brought to the surface, in conformance with this order, into a basal Tyonek Formation sandstone unit which occurs between the measured depths of 1886 and 2030 feet in Houston No. 3. This project may be further conditioned by administrative action after review of injection performance. Rule 2 Demonstration of System Integrity System integrity will be demonstrated by continual monitoring of gas rate and water rate at surface, wellhead pressure and pump performance characteristics. Rule 3 Well Integrity Failure Whenever water rates produced at surface, operating pressure observations or pump operations Houston Gas Field Disposal Injection Order No. 14 Page 4 indicate pressure communication or leakage of any casing or packer, the operator must immediately cease injection and notify the Commission no later than the first working day following the observation, obtain Commission approval of a plan for corrective action and obtain Commission approval to continue disposal. Rule 4 Surveillance Surveillance will consist of gas rate observations, water rate or volume produced at surface, wellhead pressure observation and pump performance characteristics. Rule 5 Administrative Action Upon request, the Commission may administratively revise and reissue this order upon proper showing that any changes are based on sound engineering practices and will not allow waste fluids to escape from the disposal zone. DONE at Anchorage, Alaska and dat ~~`r d G' ~~~ ~~ ti~ 1 O~L,t~y~.,p.L.~.t Camille Oechsli, Commissioner AS 31.05.080 provides that within 20 days after receipt of written notice of the entry of an order, a person affected by it may file with the Commission an application for rehearing. A request for rehearing must be received by 4:30 PM on the 23rd day following the date of the order, or next working day if a holiday or weekend, to be timely filed. The Commission shall grant or refuse the application in whole or in part within 10 days. The Commission can refuse an application by not acting on it within the 10-day period. An affected person has 30 days from the date the Commission refuses the application or mails (or otherwise distributes) an order upon rehearing, both being the final order ofthe Commission, to appeal the decision to Superior Court. Where a request for rehearing is denied by nonaction of the Commission, the 30 day period for appeal to Superior Court runs from the date on which the request is deemed denied (i.e., 10th day after the application for rehearing was filed). Kobert N. l;hrlstenson, r.>t;. Lommissloner ~_.r. ~.~.~, , x}$11 .. ~ i t F~af j i- i s~ ~ ! 1 y, ~~ ~ ' ~ ,' , ,' j '' ` % ? ~ ~ ~ ~ ~ ~-+ ! ,r' FRANK H. MURKOWSKI, GOVERNOR ~-7RA OIL A1QI) ~`irA.S .'j 333 W. 7TM AVENUE, SUITE 100 CORSERQAiiO1s COr~II-7SIO~ ; ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 ' FAX (907) 276-7542 September 27, 2004 Proposals to Amend Underground Injection Orders to Incorporate Consistent Language Addressing the Mechanical Integrity of Wells The Alaska Oil and Gas Conservation Commission ("Commission"), on its own motion, proposes to amend the rules addressing mechanical integrity of wells in all existing area injection orders, storage injection orders, enhanced recovery injection orders, and disposal injection orders. There are numerous different versions of wording used for each of the rules that create confusion and inconsistent implementation of well integrity requirements for injection wells when pressure communication or leakage is indicated. In several injection orders, there are no rules addressing requirements for notification and well disposition when a well integrity failure is identified. Wording used for the administrative approval rule in injection orders is similarly inconsistent. The Commission proposes these three rules as replacements in all injection orders: Demonstration of Mechanical IntegritX The mechanical integrity of an injection well must be demonstrated before injection begins, at least once every four years thereafter (except at least once every two years in the case of a slurry injection well), and before returning a well to service following a workover affecting mechanical integrity. Unless an alternate means is approved by the Commission, mechanical integrity must be demonstrated by a tubing/casing annulus pressure test using a surface pressure of 1500 psi or 0.25 psi/ft multiplied by the vertical depth of the packer, whichever is greater, that shows stabilizing pressure and does not change more than 10 percent during a 30 minute period. The Commission must be notified at least 24 hours in advance to enable a representative to witness mechanical integrity tests. Well Integrity Failure and Confinement Whenever any pressure communication, leakage or lack of injection zone isolation is indicated by injection rate, operating pressure observation, test, survey, log, or other evidence, the operator shall immediately notify the Commission and submit a plan of corrective action on a Form 10-403 for Commission approval. The operator shall immediately shut in the well if continued operation would be unsafe or would threaten contamination of freshwater, or if so directed by the Commission. A monthly report of daily tubing and casing annuli pressures and injection rates must be provided to the Commission for all injection wells indicating well integrity failure or lack of injection zone isolation. .. Administrative Actions Unless notice and public hearing is otherwise required, the Commission may administratively waive or amend any rule stated above as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in fluid movement outside of the authorized injection zone. The following table identifies the specific rules affected by the rewrite. Affected Rules Injection Order "Demonstration of "Well Integrity "Administrative Mechanical Failure and Action" Integrity" Confinement" Area Injection Orders AIO 1 -Duck Island Unit 6 7 9 AIO 2B - Kuparuk River Unit; Kuparuk River, Tabasco, Ugnu, West Sak 6 ~ 9 Fields AIO 3 -Prudhoe Bay Unit; Western Operating Area 6 ~ 9 AIO 4C -Prudhoe Bay Unit; Eastern Operating Area 6 ~ 9 AIO 5 -Trading Bay Unit; McArthur River Field 6 6 9 AIO 6 -Granite Point Field; Northern Portion 6 ~ 9 AIO 7 -Middle Ground Shoal; Northern Portion 6 ~ 9 AIO 8 -Middle Ground Shoal; Southern Portion 6 ~ 9 AIO 9 -Middle Ground Shoal; Central Portion 6 ~ 9 AIO 1 OB -Milne Point Unit; Schrader Bluff, Sag River, 4 5 g Kuparuk River Pools AIO 11 -Granite Point Field; Southern Portion 5 6 8 AIO 12 -Trading Bay Field; Southern Portion 5 6 8 AIO 13A -Swanson River Unit 6 ~ 9 AIO 14A -Prudhoe Bay Unit; Niakuk Oil Pool 4 5 8 AIO 15 -West McArthur 5 6 9 Affected Rules Injection Order "Demonstration of "Well Integrity "Administrative Mechanical Failure and Action" Integrity" Confinement" River Unit AIO 16 - Kuparuk River Unit; Tarn Oil Pool 6 7 10 AIO 17 - Badami Unit 5 6 8 AIO 18A -Colville River Unit; Alpine Oil Pool 6 7 11 AIO 19 -Duck Island Unit; Eider Oil Pool 5 6 9 AIO 20 -Prudhoe Bay Unit; Midnight Sun Oil Pool 5 6 9 AIO 21 - Kuparuk River Unit; Meltwater Oil Pool 4 No rule 6 AIO 22C -Prudhoe Bay Unit; Aurora Oil Pool 5 No rule 8 AIO 23 - Northstar Unit 5 6 9 AIO 24 -Prudhoe Bay Unit; Borealis Oil Pool 5 No rule 9 AIO 25 -Prudhoe Bay Unit; Polaris Oil Pool 6 g 13 AIO 26 -Prudhoe Bay Unit; Orion Oil Pool 6 No rule 13 Dis osal Injection Orders DIO 1 -Kenai Unit; KU WD-1 No rule No rule No rule DIO 2 -Kenai Unit; KU 14- 4 No rule No rule No rule DIO 3 -Beluga River Gas Field; BR WD-1 No rule No rule No rule DIO 4 -Beaver Creek Unit; BC-2 No rule No rule No rule DIO 5 -Barrow Gas Field; South Barrow #5 No rule No rule No rule DIO 6 -Lewis River Gas Field; WD-1 No rule No rule 3 DIO 7 -West McArthur River Unit; WMRU D-1 2 3 5 DIO 8 -Beaver Creek Unit; BC-3 2 3 5 DIO 9 -Kenai Unit; KU 11- 17 2 3 4 DIO 10 -Granite Point Field; GP 44-11 2 3 5 Affected Rules Injection Order "Demonstration of "Well Integrity "Administrative Mechanical Failure and Action" Integrity" Confinement" DIO 1 I -Kenai Unit; KU 24-7 2 3 4 DIO 12 - Badami Unit; WD- 1, WD-2 2 3 5 DIO 13 -North Trading Bay Unit; S-4 2 3 6 DIO 14 -Houston Gas Field; Well #3 2 3 5 DIO 15 -North Trading Bay Unit; S-5 2 3 Rule not numbered DIO 16 -West McArthur River Unit; WMRU 4D 2 3 5 DIO 17 -North Cook Inlet Unit; NCIU A-12 2 3 6 DIO 19 -Granite Point Field; W. Granite Point State 3 4 6 17587 #3 DIO 20 -Pioneer Unit; Well 1702-15DA WDW 3 4 6 DIO 21 - Flaxman Island; Alaska State A-2 3 4 7 DIO 22 -Redoubt Unit; RU D 1 3 No rule 6 DIO 23 -Ivan River Unit; IRU 14-31 No rule No rule 6 DIO 24 - Nicolai Creek Unit; NCU #5 Order expired DIO 25 -Sterling Unit; SU 43-9 3 4 7 DIO 26 - Kustatan Field; KFl 3 4 7 Stora a Injection Orders SIO 1 -Prudhoe Bay Unit, Point McIntyre Field #6 No rule No rule No rule SIO 2A- Swanson River Unit; KGSF #1 2 No rule 6 SIO 3 -Swanson River Unit; KGSF #2 2 No rule 7 Enhanced Recove In'ection Orders EIO 1 -Prudhoe Bay Unit; Prudhoe Bay Field, Schrader No rule No rule 8 Bluff Formation Well V-105 C~ C~ Affected Rules Injection Order "Demonstration of "Well Integrity "Administrative Mechanical Failure and Action" Integrity" Confinement" EIO 2 -Redoubt Unit; RU-6 5 g 9 02-902 (Rev. 3/94) Publisher/Original Copies: Department Fiscal, Department, Receiving Ao.FRM STATE OF ALASKA NOTICE TO PUBLISHER ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED ORDER AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF AO-02 5'14016 ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE SEE BOTTOM FOR INVOICE AOORESS F AOGCC R 333 West 7`h Avenue, Suite 100 ° Anchorage, AK 99501 "` 907-793-1221 AGENCY CONTACT DATE OF A.O. PHONE cr i ,~~ -~ ADVERTISEMENT REQUIRED: o Journal of Commerce 301 Arctic Slope Ave #350 Anchorage, AK 99518 October 3, 2004 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: AFFIDAVIT OF PUBLICATION United states of America State of division. ss Before me, the undersigned, a notary public this day personally appeared who, being first duly sworn, according to law, says that he/she is the of Published at state of in said division and and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2004, and thereafter for consecutive days, the last publication appearing on the day of .2004, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This _ day of 2004, REMINDER INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED W ITH THE INVOICE. ATTACH PROOF OF PUBLICATION HERE. Notary public for state of My comrnission expires _ Public Notices • • Subject: Public Notices From: Jody Colombe <jody_colombie@admin.state.ak.us> Date: Wed, 29 Sep-2004 13:01:04 -0800 To undisciased'-recipients:; BCC:: Cynthia B Mciver <bren mciver@admin.state.akus>, Angela ~~`ebb <ange_webb@adrnin.state.ak.us>, Robert E Mintz <robert_mintz~c~?la~v.state.ak.us=>, Christine Hansen <c.hansen@iagec.state:ok.us?, Terre Hobble <hubbletl@`bp.ann>. Sondra Ste~t~man <StewmaSD@BP.EOm> Scott & Cammy Taylor <staylar@laska.net~, stanekj <stanekj@unocal.com>, ecolaw <ecolaw@trustees.org5, r©seragsdale <roseragsdale@ci.net>, trmjrl <trmjrl@a©l.com>, jbriddle <jbriddle@rnarathonail.com>, rockhill <rockhill@oga.org>, shaneg <sharieg@evergreengas.eom> jdarlington <jdarlington@f~restoil.com -, nelson <knelson@etroletrmnews.com>, cboddy ~cboddy@usibelli.com>, Mark Dalton <mark.daltan@hclrinc.com>, Shannon Donnelly <Shannon.donnelly~ei;conocophillips.com>, "Mark P. Worcester" <mark,p.warcester@canocophiiips.eam>, "Jerry C. Dethlefs" erry.c.dethlefs@conocaphillps.com>, Bob <bob@inletkeeper.org>, tivd~~ <v~dv~adnr.state_ak.us>, tjr <tjr@dnr.state.ak.us>, bbritch <bhritch@laska.net>, mjnelson <mjnelson~a?pur-vinger-tz.com>, Charles O'Donnell. <charles.o'donnel@veco.com>, "Randy L. Skilern" <SkilleRL@BP.com> "Deborah J. Jones" <JonesD6@BP.cam>, "Paul G. Hyatt" <hyattpg@BP.com>, "Steven R. Rassberg" <RossbeRS@BP.com>, Lois <lois@inletkeeper~arg>, I?an Bross <kuacnews@kuac.org>,;~ordon Pospisil <PospisG@BP.com@"Francis 5.5©mmer" <SammerFS(aBP.com>, _~likel Schultz <Mikel.Sch~ltz(~,`BP.com ~, "Nick W.Glover" <Gloverl@cL.BP.com>, "Daryl J. Kleppin" <KleppiDE@BP.cont~, ",lanetD. Platt" <PlattJD@BP.eom=-,"Rosanne ~~L Jacobsen" <JacobsRM@BP.com>, cldunkel <ddonke@cfl.rr.com>, Collins Mount <collns mount@revenue.state.ak.us>, mckay <mekay@gci.net>, Barbara F Fullmer <Barbara.f.fullmer@conoeophillips.com>, bocastwf <boeastwf(~z;bp.com->, Charles Barker <barker@usgs.gov?, dottg_schultze <doug_sehultze@xtc~enerjy.com>, Hank Alford <hank.alford a~exxonmobil.com>, Mark Kovac <yesnol@;gci.net~=. gspfoff gspfoff@aurorapower.com>, Gregg Nady <gregg.nady~u;shell.cum>, Fred Steece <fred.steece@state.sd.us>, rcrotty <rerotty@eh2mcom>, jejones ; jejones~aaurorapo~ver.com>, dapa <dapa@alaska.net=, iroderick <jroderick@gci.net>, eyancy <eyancy«USeal-tite.net>, "James Nl. Ruud" ~ -fames.m.ruud~ci.c~}nocophillips.c~rm>, Brit Lively <mapalaska(~ak.net=~, fah <jah(a~dnr.siate.ak.us= , Kurt E Olsen <kurt oIsort@legis.state.ak.us~%, buonoje ~~buonoje(a~bp.com>, Mark Hanley <m@ hanley@anadarko.com>, loren_Ieman Toren lemanlagov.state.ak.us>, Julie Houle<juli~e_houle@dcrr.state.ak.us>John ~V Kati <jwkatz(~iaso.org>, Suzan J Hill <suzan_hill.@dec.state,ak.us>, tablerk <tablerk@nocal.cc~in>, Brady <:brady@~aaga.org>, Brian Haveiack <b~h@dru-.state.ak.ns>, bpagp <bpopp@orou~h.kenai.ak.us%, Jim White ~' <}imwhite@satx.rr.eom>; "Johrt S. H~worth" <~,~~,~.s.haworth~~i;exxonmobil.com>, marry <marty(2rkindttstrial.com>, ghammons <ghamons@aol.com=>, rmclean <rmclean(~pobox.alaska.net>, mkm7?t?0 <mkm7?OCl@~aol.corn= ,Brian Gillespie ~ifbmg@uaa.alaska.edu>, David L Boelens <dboelzns~a a~orapower.com>, Todd Durkee <TDLTRKEE@KMG,com>, CTary Schultz ~~ gary_schultz@dnr.state.ak.us>, Wayne Ranvier ~RANCIER(~7petro-canada.ca>, Bill yfiller <Bi11 Miller(axtoalaska.com=>, Brandon Gagnon <bgagnon@~,brenalati~~.com ~, Paul Winslow <pmwtnslow@forestoiLcom>, Garry Catron <catrongr-~:~bp.com >, Shannain~ Copeland <copelasv(Lbp.com==, Suzanne Allegan <sallexan@helmenergy.com>, Kristin Dirks <kristindirk@;dnr.state.ak.us>, Kaynell Zeman <k@ernan(a~rnarathonoil.conv, John To~~~er ~.Iohn.Tower@eia.doe.gov~, Bill Fowler <Bili_Fowler@nadarko.CQM>, Vaughn Swartz <vaughn.s~~artz@rbccm.com>, Scott Cranswick 1 of 2 9/29/2004 1:10 PM Public Notices • • ~ ` <scott.cranswick@mms.gov>, Brad McKim <mckimbsCBP.com> Please find the attached Notice and Attachment for the proposed amendment of underground injection orders and the Public Notice Happy Valley #10. Jody Colombie Content-Type: applicaton,'msward !.Mechanical Integrity proposal.doc Content-Encoding: base64 Mechanical Integrity of Wells Notice.doc Content Type: appicatior~im word Content-Encoding: base64 Content-hype: appTication/msword I-IappyValleylO~HearingNotice.doc Content-Encoding: base64 2 of 2 Pudic Notice 1 Subject: Public Notice From: Jody Colombie <jody Colombie@admin.state.ak.us> Date: Wed, 29 Sep 2004 12:55:26-0800 Toc legal@alaskajournal.com Please publish the attached Notice on October 3, 2004. Thank you. Jody Colombie Mechanical Integrity of Wells Notice.doc Content-Type: application/msword Content-Encoding: base64 ....._..._._............._.......... __ __ _ _ __ .Content-Type: application/msword Ad Order form.doc Content-Encoding: base64 __ __ _ _ _ __ 1 of 1 9/29/2004 1:10 PM Citgo Petroleum Corporation Mary Jones David McCaleb PO Box 3758 XTO Energy, Inc. IHS Energy Group Tulsa, OK 74136 Cartography GEPS 810 Houston Street, Ste 2000 5333 Westheimer, Ste 100 Ft. Worth, TX 76102-6298 Houston, TX 77056 Kelly Valadez Robert Gravely George Vaught, Jr. Tesoro Refining and Marketing Co. 7681 South Kit Carson Drive PO Box 13557 Supply & Distribution Littleton, CO 80122 Denver, CO 80201-3557 300 Concord Plaza Drive San Antonio, TX 78216 Jerry Hodgden Richard Neahring John Levorsen Hodgden Oil Company NRG Associates 200 North 3rd Street, #1202 408 18th Street President Boise, ID 83702 Golden, CO 80401-2433 PO Box 1655 Colorado Springs, CO 80901 Kay Munger Samuel Van Vactor Michael Parks Munger Oil Information Service, Inc Economic Insight Inc. Marple's Business Newsletter PO Box 45738 3004 SW First Ave. 117 West Mercer St, Ste 200 Los Angeles, CA 90045-0738 Portland, OR 97201 Seattle, WA 98119-3960 Mark Wedman Schlumberger David Cusato Halliburton Drilling and Measurements 200 West 34th PMB 411 6900 Arctic Blvd. 2525 Gambell Street #400 Anchorage, AK 99503 Anchorage, AK 99502 Anchorage, AK 99503 Baker Oil Tools Ciri Jill Schneider 4730 Business Park Blvd., #44 Land Department US Geological Survey Anchorage, AK 99503 PO Box 93330 4200 University Dr. Anchorage, AK 99503 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 Williams Thomas North Slope Borough Arctic Slope Regional Corporation PO Box 69 Land Department Barrow, AK 99723 PO Box 129 Barrow, AK 99723 [Fw¢: Rye: Consistent Wording for Injection ~rs -Well Integrity ... Subject: [Fwd: Re: Consistent Wording for Injection Orders - From: John Norman <john_norman@admin.state.ak.us> Date: Fri, 01 Oct 2004 11:09:26 -0800 To; Jody J Colombie <jody colambie@admin.state.ak.us> more Well Integrity (Revised)] ------- Original Message -------- Subject:Re: Consistent Wording for Injection Orders -Well Integrity (Revised) Date:Wed, 25 Aug 2004 16:49:40 -0800 From:Rob Mintz <robert mintz(a~law.state.ak.us> To:jm regg(aadmin.state.ak.us CC:dan seamount(u~admin.state.ak.us, john norman cr,admin.state.ak.us Jim, looks good, but I still think maybe it would be good to include the following sentence or something like it in the well integrity and confinement rule: "The operator shall shut in the well if so directed by the Commission." My thinking is that otherwise, an operator might argue that the Commission can only require the well to be shut in by going through an enforcement action, issuing an order after notice and opportunity for hearing, or meeting the strict requirements for an emergency order under the regulations. The proposed language makes clear that it is a condition of the authorization to inject, that the operator must shut in the well if directed by the Commission after a notification of loss of integrity, etc. »> James Regg <jim regg(c%admin.state.ak.us> 8/25/2004 3:15:06 PM »> Rob -Thanks for the review; here`s a redraft after considering your comments. I have accepted most of the suggested edits; also attached is response to questions you pose (responses are embedded in the comments, using brackets [JBR - ...] to set apart from your questions). Jim Regg Rob )/lintz wrote: Jim, I have some questions about the draft language, which are shown as comments on the first document attached. Based !i on my current guesses about what the answers will be to my questions, I also have some suggested edits, which are shown as redlines on the second document attached. »> James Regg <iim re~n(aadmin.state.ak.us> 8/17/2004 4:33:52 PM »> Please delete previous version (email sent 8/9/04); I found another inconsistency in the injection orders regarding well integrity that I have integrated into the proposed fix. Attached is a proposal for consistent language in our injection orders addressing 3 rules related to well integrity: - "Demonstration of Tubing/Casing Annulus Mechanical Integrity" - "Well Integrity Failure" - "Administrative Actions". This proposal includes input from all Sr. staff (except Jack). If you agree with the approach, I'll work with Jody to prepare the public notice. Main points - Demonstration of Tubing/Casing Annulus Mechanical Integrity - standardizes the wording used for mechanical integrity demonstrations, and establishes abililty to grant alternate methods (e.g., temp survey, logging, pressure monitoring in lieu of pressure testing 1 of 2 10/2/2004 4:07 PM [Fwd: Re: Consistent Wording for Injection ~rs -Well Integrity ... -specific to AIO 2C for Kuparuk, there is wording that is more appropriately included in Well Integrity Failure (i.e., more frequent MITs when communication demonstrated) ~ -establishes more frequent MIT schedule for slurry injection wells (every 2 yrs) which is consistent with our current I practice (but not addressed in regulations) Well Integrity Failure - retitles to "Well Integrity Failure and Confinement"; inserted language regarding injection zone integrity (see DIO 25 and 26) - consistent language regardless of type of injection (disposal, EOR, storage); - eliminates requirement for immediate shut in and secure; allows continued injection until Commission requires shut in if there is no threat to freshwater; - eliminates delay in notifying Commission after detect leakage or communication ("i.e., "immediately notify"); - removes language about notifying "other state and federal" agencies; - requires submittal of corrective action plan via 10-403; - requires monthly report of daily injection rate and pressures (tubing and all casing annuli); this is a requirement we currently impose when notified of leak or pressure communication; - notice and action not restricted to leaks above casing shoe as stated in several DIOs Administrative Actions - adopts "Administrative Actions" title (earlier rules used "Administrative Relief'); - consistent language regardless of type of injection (disposal, EOR, storage); - uses "administratively waive or amend" in lieu of terms like "revise", "reissue", etc.; - adds geoscience to "sound engineering principles"; - language is more generic regarding fluid movement out of zone; existing versions mention varying combinations of protecting "freshwater", "aquifers", "USDWs"; "risk of fluid movement"; "fluid escape from disposal zone" Jim Regg John K. Norman <John Norman(a~admin.state.us> '' Commissioner Alaska Oil & Gas Conservation Commission 2 of 2 10/2/2004 4:07 PM [Fwd; Re: Consistent Wording for Injection ~rs -Well Integrity ... • Subject: [Fwd: Re_Consistent;Wiordng for Injection Orders - We11 Inte~-ity (Revised)] From: John 1Vorrnan <john_norman@adminatate.ak.us> Date: Fri, O1 Oct 2004 11:08:55 -0800 To;~ Jody J ~glombie <Jody_colombie@admin.state.ak.us> please print all and put in file for me to review just prior to hearing on these amendments. thanx ------- Original Message -------- Subject:Re: Consistent Wording for Injection Orders -Well Integrity (Revised) Date:Thu, 19 Aug 2004 15:46:31 -0800 From:Rob Mintz <robert mintz~,law.state.ak.us> To:dan seamount(a~admin.state.ak.us, jim regg(aadmin.state.ak.us, john normannaadmin.state.ak.us Jim, I have some questions about the draft language, which are shown as comments on the first document attached. Based on my current guesses about what the answers will be to my questions, I also have some suggested edits, which are shown as redlines on the second document attached. »> James Regg <jim regg~ admin.state.ak.us> 8/17/2004 4:33:52 PM »> Please delete previous version (email sent 8/9/04); I found another inconsistency in the injection orders regarding well integrity that I have integrated into the proposed fix. Attached is a proposal for consistent language in our injection orders addressing 3 rules related to well integrity: - "Demonstration of Tubing/Casing Annulus Mechanical Integrity" - "Well Integrity Failure" - "Administrative Actions". This proposal includes input from all Sr. staff (except Jack). If you agree with the approach, I'll work with Jody to prepare the public notice. Main points - Demonstration of Tubing/Casing Annulus Mechanical Integrity - standardizes the wording used for mechanical integrity demonstrations, and establishes abililty to grant alternate methods (e.g., temp survey, logging, pressure monitoring in lieu of pressure testing - specific to AIO 2C for Kuparuk, there is wording that is more appropriately included in Well Integrity Failure (i.e., more frequent MITs when communication demonstrated) - establishes more frequent MIT schedule for slurry injection wells (every 2 yrs) which is consistent with our current practice (but not addressed in regulations) Well Integrity Failure - retitles to "Well Integrity Failure and Confinement"; inserted language regarding injection zone integrity (see DIO 25 and 26) - consistent language regardless of type of injection (disposal, EOR, storage); - eliminates requirement for immediate shut in and secure; allows continued injection until Commission requires shut in if there is no threat to freshwater; - eliminates delay in notifying Commission after detect leakage or communication ("i.e., "immediately notify"); - removes language about notifying "other state and federal" agencies; - requires submittal of corrective action plan via 10-403; - requires monthly report of daily injection rate and pressures (tubing and all casing annuli); this is a requirement we currently impose when notified of leak or pressure communication; - notice and action not restricted to leaks above casing shoe as stated in several DIOs Administrative Actions 1 of 2 10/2/2004 4:07 PM [Fwd: Re: Consistent Wording for Injection ~rs -Well Integrity ... ~ W - adopts "Administrative Actions" title (earlier rules used "Administrative Relief'); - consistent language regardless of type of injection (disposal, EOR, storage); - uses "administratively waive or amend" in lieu of terms like "revise", "reissue", etc.; - adds geoscience to "sound engineering principles"; - language is more generic regarding fluid movement out of zone; existing versions mention varying combinations of protecting "freshwater", "aquifers", "USDWs"; "risk of fluid movement"; "fluid escape from disposal zone" Jim Regg John K. Norman <John Norman(D,admin.state.us> `. Commissioner Alaska Oil & Gas Conservation Commission __ Content-Type: application/msword 'Injection Order language - questions.doc'. Content-Encoding: base64 __ Content-Type: application/msword ',Injection Orders language edits.doc Content-Encoding: base64 :........................_..__..... . 2 of 2 10/2/2004 4:07 PM ,,, • • Standardized Language for Injection Orders Date: August 17, 2004 Author: Jim Regg Demonstration of Tubin /Casing Annulus Mechanical Integrity The mechanical integrity of an injection well must be demonstrated before injection begins, after a workover affecting mechanical integrity, and at least once every 4 years while actively injecting. For slurry injection wells, the tubing/casing annulus must be tested for mechanical integrity every 2 years. The MIT surface pressure must be 1.500 psi or 0.25 psi/ft multiplied by the vertical depth, whichever is greater, must show stabilizing pressure and may not change more than 10% during a 30 minute period. Any alternate means of demonstrating mechanical integrity must be approved by the Commission. The Commission must be notified at least 24 hours in advance to enable a representative to witness pressure tests. Well Integrity Failure and Confinement The tubing, casing and packer of an injection well must demonstrate integrity during operation. The operator must immediately notify the Commission and submit a plan of corrective action on Form 10-403 for Commission approval whenever any pressure communication, leakage or lack of injection zone isolation is indicated by injection rate, operating pressure observation, test, survey, or log. If there is no threat to freshwater, injection may continue until the Commission requires the well to be shut in or secured. A monthly report of daily tubing and casing annuli pressures and injection rates must be provided to the Commission for all injection wells indicating pressure communication or leakage. Administrative Actions Unless notice and public hearing is otherwise required, the Commission may administratively waive or amend any rule stated above as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in fluid movement outside of the authorized injection zone. L~ Standardized Language for Injection Orders Date: August 17, 2004 Author: Jim Regg Demonstration of Tubing/Casing Annulus Mechanical Irate rite The mechanical integrity of an injection well must be demonstrated before injection begins, at least once every four nears thereafter (e~ccept at least once every two years in the case of a slurry infection well}, and. before returning a «•ull to sen~ice follo~vin~ a-f~r• a workover affecting mechanical integrity ~' ~~* 1:.,,..* ~~ ;.=,;,r~ -;= ~ •~,~~ ~*• E ~ *~ v tTnless an alternate means is approved by the Commission mechanical integrity must be demonstrated by a tubing pressure test using a ~ -surface pressure ofn~~e 1500 psi or 0.25 psi/ft multiplied by the vertical depth, whichever is greater, that to-shows stabilizing pressure that doesa~ not change more than 10° $-percent during a 30 minute period. =4~ .. - . The Commission must be notified at least 24 hours in advance to enable a representative to witness pressure tests. Well Irate rg_ity Failure and Confinement EYCept as othen~:•ise l,ravided in this rule Tthe tubing, casing and packer of an injection well must c~e~sn~~t-~-maintain integrity during operation. «Thenever any pressure communication leakage t?r lack of infection zone isolation is indicated by infection rate o ep ratingpressure olrser<,-ation, test, survey loh or other evidence the operator nshall immediately notify the Commission and submit a plan of corrective action on a Form 10-403 for Commission approval; i'~'~'~r;"" .'+; '• ~'' .~ +• ~_ .+ •' The operator shall shut in the wcl.l i.f so directed by the Commission The operator steal l shut in the well without awaiting a response ti•orn tl~e Commission if continued c~eration would be unsafe or would threaten contamination of freshwater .Until corrective action is successfully completed. Aa monthly report of daily tubing and casing annuli pressures and injection rates must be provided to the Commission for all injection wells indicating pressure communication or leakage. Administrative Actions Unless notice and public hearing is otherwise required, the Commission may administratively waive or amend any rule stated above as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in fluid movement outside of the authorized injection zone. *[Fwc~i., Re< [Fwd: AOGCC Proposed WI Lan for Injectors]] • Subiect: [Fwd: Re: [Fwd: AOGCC Proposed WI Language for Injectors]] From: Winton Aubert <Winton_aubert@admin.state.ak.us> Date: Thu, 28 Oct 2004 09:48:53 -0800 To: Jody J Colombie <jody colombie~,?a admin.state.ak.us> This is part of the record for the Nov. 4 hearing. WGA -------- Original Message -------- Subject: Re: [Fwd: AOGCC Proposed WI Language for Injectors] Date: Thu, 28 Oct 2004 09:41:55 -0800 From: James Regg <jim regg@admin.state.ak.us> Organization: State of Alaska To: Winton Aubert <winton aubert@admin.state.ak.us> References: <41812422.8080604@admin.state.ak.us> These should be provided to Jody as part of public review record Jim Winton Aubert wrote: FYI. ': -------- Original Message -------- Subject: AOGCC Proposed WI Language for Injectors Date: Tue, 19 Oct 2004 13:49:33 -0800 From: Engel, Harry R <Enge1HR@BP.com> To: winton aubert@admin.state.ak.us i Winton... Here are the comments we discussed. Harry *From: * NSU, ADW Well Integrity Engineer *Sent: * Friday, October 15, 2004 10:43 PM *To: * Rossberg, R Steven; Engel, Harry R; Cismoski, Doug A; NSU, ADW Well Operations Supervisor *Cc: * Mielke, Robert L.; Reeves, Donald F; Dube, Anna T; NSU, ADW Well Integrity Engineer *Subject: * AOGCC Proposed WI Language for Injectors Hi Guys. John McMullen sent this to us, it's an order proposed by the AOGCC to replace. the well integrity related language in the current Area Injection Orders. Listed below are comments, not sure who is coordinating getting these in front of Winton/Jim. Overall, looks okay from an Operations perspective. We do have a few comments, but could live with the current proposed language. Note the proposed public hearing date is November 4. The following language does not reflect what the slope AOGCC inspectors are currently requiring us to do: "The mechanical integrity of an injection well must be demonstrated before injection begins, at least once every four years thereafter (except at least once every two years in the case of a slurry injection well), and * before*_** I of 3 10/28/2004 11:09 AM [Fwd: Re: [Fwd: AOGCC Proposed WI Lan for Injectors]] • ~ .' ., " return'.ng a well to service following a workover affecting mechanical integrity." After a workover, the slope AOGCC inspectors want the well warmed up and on stable injection, then we conduct the AOGCC witnessed MITIA. This language requires the AOGCC witnessed MITIA before starting injection, which we are doing on the rig after the tubing is run. Just trying to keep language consistent with the field practice. If "after" was substituted for "before", it would reflect current AOGCC practices. It would be helpful if the following language required reporting by the "next working day" rather than "immediately", due to weekends, holidays, etc. We like to confer with the APE and get a plan finalized, this may prevent us from doing all the investigating we like to do before talking with the AOGCC. "Whenever any pressure communication, leakage or lack of injection zone isolation is indicated by injection rate, operating pressure observation, test, survey, log, or other evidence, the operator shall_* immediately*_** notify the Commission" This section could use some help/wordsmithing: "A monthly report of daily tubing and casing annuli pressures and injection rates must be provided to the Commission for all injection wells indicating well integrity failure or lack of injection zone isolation." Report content requirements are clear, but it's a little unclear what triggers a well to be included on this monthly report. Is it wells that have been reported to the AOGCC, are currently on-line and are going through the Administrative Action process? A proposed re-write would be: "All active injection wells with well integrity failure or lack of injection zone isolation shall have the following information reported monthly to the Commission: daily tubing and casing annuli pressures, daily injection rates." Requirements for the period between when a well failure is reported and when an administrative action is approved are unclear. This document states "the operator shall immediately notify the Commission and submit a plan of corrective action on a Form 10-403". If we don't plan to do any corrective action, but to pursue an AA, does a 10-403 need to be submitted? The AOGCC has stated they don't consider an AA as "corrective action". Let me know if you have any questions. Joe -----Original Message----- From: Kleppin, Daryl J Sent: Wednesday, September 29, 2004 1:37 PM To: Townsend, Monte A; Digert, Scott A; Denis, John R (ANC); Miller, Mike E; McMullen, John C Subject: FW: Public Notices FYI -----Original Message----- From: Jody Colombie [mailto:jody colombie@admin.state.ak.us Sent: Wednesday, September 29, 2004 1:01 PM Subject: Public Notices Please find the attached Notice and Attachment for the proposed amendment of underground injection orders and the Public Notice Happy Valley #10. Jody Colombie «Mechanical Integrity proposal.ZIP » «Mechanical Integrity of Wells Notice.doc » 2 of 3 10/28/2004 11:09 AM X10 TONY KNOWLES, GOVERNOR ALASFiA OIL A11TD GAS COI~TSERQATIOI~T COMI~IISSIOIIT July 14, 1998 Mr. David W. Lappi GRI, Inc. 4900 Sportsman Drive Anchorage, AK 99501 Dear Mr. Lappi: 3001 PORCUPINE DRIVE ANCHORAGE, ALASKA 99501-3192 PHONE: (907) 279-.1433 FAX: (907) 276-7542 Your request to pump formation waters derived from coal seams into a deeper interval without producing. the water to the surface was requested and approved for the Houston Gas well No. 3 by Disposal Injection Order No. 14. Accordingly, we are returning the enclosed three Applications for Sundry. Approvals for the Houston 1, 2 & 3 wells. We also understand that you do not plan to use the Houston No. 1 and No. 2 for subsurface disposal. Si -~ David Johnston Chairman\ Enclosures ~ 9 '98-06-19 13 40 +1 907 248 7278 LAPP RESOURCES P.1 w GRI, Inc. 4900 Sportsman Drive Anchorage, Alaska USA 99502-4169 Telephone: 1 (907) 248-7188 a-mails lapres~alaska.net Facsimile: 1 (907) 248-7278 FA,X TRANSMISSION SHEET DATE ~ ~ TOTAL # OF PAGES TO C~ ATTENTION _ FAX NUMBER FROM REGAR j PLEASE,~CJONTtA_CT US IF YOU HAVE QUESTIONS ON THIS FAX. 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I•~ ~~ Lappi conversation Subject: Lappi conversation Date: Wed, 17 Jun 1998 10:09:47 -0800 From: davefjohnston@admin.state.ak.us (David W Johnston) Internal Organization: DOA-AOGCC To: Camille Oechsli <cammy_oechsli@admin.state.ak.us> , Robert Christenson <robert Christenson@admin.state.ak.us> Dave Lappi called me yesterday to inquire about the status of his disposal orders for the Houston gas field. He stressed his need for the surface disposal order because he has already has produced water to the surface, which is being held in a surface containment area measuring 100 ft by 100 ft by 10 feet deep. Also, the Houston 1 and 2 wells are drilled only to the producing coal seam, no deeper. Consequently, the subsurface water transfer. option is not feasible for Houston 1 and 2. He must produce water to the surface in order to dewater the coal in these wells. He does not believe expanding the disposal zone to include sand layers higher in the section will solve his problem. Apparently, he wants to maintain flexibility in well depth (i.e., he doesn't necessary want to drill all wells with a rat hole below producing formation) and is concerned about charging up coal seams lower in section that he may later want to produce. As his development currently stands, he wants approval to use Houston 3 for subsurface water transfer as well as for disposing produced waters and other wastes from Houston 1 and 2. i of 1 7/14/98 8:28 AM ~ 7 GRI, Inc. 4900 Sportsman Drive Anchorage, Alaska USA 99502-4169 Telephone: 1 (907) 248-7188 a-mail: lapres@alaska.net Facsimile: 1 (907) 248-7278 June 15, 1998 Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive (~ Anchorage, AK 99501 a~ I V I I~ A L Attn: The Commissioners Re: Justification for Ten-Acre Spacing -Houston Gasfield, Houston Coalbed Gas Pool Dear Commissioners: The Houston Coalbed Gas Pool currently has a minimum 40-acre spacing requirement for production wells. This spacing was set prior to drilling our three production wells. Our drilling since January this year showed more than 100 feet of coal exists per 1000 feet of section, giving about 200 feet of coal in each well. It was anticipated prior to drilling that our wells would encounter only 40 feet of coal per 1000 feet of section. Given the greater coal thickness in our wells (more than double what we anticipated), we believe that it is now appropriate to reduce the well spacing. The greater coal thickness means that our wells could each produce for a much longer period of time by producing one set of seams at a time. As the production from one set of seams declines, new seams can be perforated and the production rate from the well maintained. This will allow for a greater ultimate recovery of gas from all the seams than sizing the production equipment for the maximum possible production rate from all seams, leading to a shorter well life and lower ultimate recovery of gas. A smaller well spacing will also allow us to equip the field for production more economically and with less environmental impact, and reduce the number of access roads, power lines, and flow lines needed for a given volume of production. Given the large number of coal seams in the wells, aten-acre well spacing would also allow for simultaneous production from multiple seams at different depths. For example, five seams could be produced in one well from 1500 to 2000 feet, while in another well, five more seams could be produced from 1000 feet to 1500 feet. Sincerely, . ~~• ` David W. Lappi -President ~~~ _~ 199 Alaska Cil $ Gay Cc;ns. ~c~mm~sslQa~ ~t~eharaya Exploration and Development ~~ JUN-11-'98 THU 17:59 ID: LAPP RESOURCES INC TEL N0:1 907 248 7278 #340 P01 ---- - GRI, Inca 4900 Sportsman Drive Anchorage, Alaska USA 99502-4169 Telephone: 1 (907) 248-7188 a-mail: lapres~alaska.net Facsimile: 1 (907) 248-7278 June 11, 1998 The Alaska Oil and Gas Conservation Commission 3041 Porcupine Drive Anchorage, AK 99501 } ~~ 1 ' °~'39~ Attn: The Commissioners ~~4sska Coil El<G~ C~ns~ 0~~'`~`~isso~"a ~.., ~,~ ~~e~ age Re: Houston Garfield Injection and Subsurface Transfer of Water from Coal Seams to a deeper Saline-water-bearing Sandstone Dear Commissioners: Thank you for your letter of today's date raising a number of questions. The following are answers to those questions. 1. Which well(s) does GRI, Inc. intend to use for disposal operations of surface fluids? GRI proposes to use Houston 3 to dispose of surface fluids. 2. Is GRI, Inc. proposing to use the same injection zone for the subsurface transfer of water and other injection operations? Yes, we propose to use the same injection zone. 0 ~ I G I I V ~ L 3. Please provide the name, description, depth, and thickness of the formation into which the f luids are to be injecteat; and provide appropriate geological data on the injection zones and conf fining zones, including lithologic description and geologic name. The injection zone is an unnamed sand encountered near the bottom of Houston 3 betwcen 1886 feet and the well's total depth at 2030 feet. The lithology consists of fine to coarse-grained arkosic sandstone from 1886 feet to 1960 feet, grading to lithic quartz-pebble conglomerate with multi-colored pebbles up to one inch in diameter from 1960 feet to 2030 feet (TD). The full thickness of this sand was not penetrated in this well, however it is at least 144 feet thick at Houston 3. The Rosetta 3 electric log shows this sand is in excess of 250 feet thick. Rosetta 3 is approximately 2000 feet northwest of Houston 3. Geological data available to us on the injection zone described above indicates that the injection zone has a high porosity, high water saturation, and little matrix. Our available geological information includes the geologist's log, cuttings samples, and cased-hole wireline logs including density, neutron, and natural gamma tools. An infectivity test has not been conducted but we believe that the Exploration and Development JUN-11-'98 THU 18:00 ID: LAPP RESOURCES INC TEL N0:1 907 248 7278 #1340 P02 lithology and thickness of the zone makes it a good horizon for injection Purposes. The confining zone is found at the top of the injection zone in the form of a fining upward sequence over a 30-foot interval from 1886 to 1856 feet. This fining upward sequence culminates in a coal swamp environment of deposition, which comprise our lowermost productive horizons. This fining-upward sequence is composed of light brown to greenish-gray siltstone and claystone with some thin interbedded sandstones. The natural gamma log values range from 30 to 45 in clean sands in the injection zone, to 40 increasing to a peak of 80 in the fining- upward sequence. The neutron and density logs show decreasing porosity and increasing density upward through the fining-upward sequence indicating decreased permeability and porosity. 4. Your well casing information describes the Houston 3 well with the subsurface pump that GRI, Inc. proposes to use for the subsurface transfer of water. Is GW proposing this well design for the wells disposing of fluids from the surface? If so, is GRI, Inc. proposing to use the well as both a producer and for disposal? If not, why isn't there a proposal for a dedicated injector equipped with proper tubing and packer as provided for in regulations? GRI, Inc. will use this well design for all wells disposing of fluids from the surface. If any change to our design is proposed, it will be submitted to the Alaska Oil and Gas Conservation Commission for review and approval. GRI, Inc. is proposing to use each well so equipped as both a production well and for injection into the permitted injection zone. S. Xow will the fluids at the surface reach the subsurface pump at the rate of one barrel per minute for an average of 1130 barrels per day? Will the well be equipped with a surface pump? Please describe thoroughly what the surface operation will look like. While injecting surface fluids down the borehole, the gas production rate in the production/injection well will be reduced, if necessary, to allow surface fluids to reach the pump. The maximum design pump rate is 1130 barrels per day. Surface fluids and subsurface transfer fluids together will not exceed the maximum pump rate capability. One barrel per minute is an approximate instantaneous figure, and 0.784 barrels per minute is the more exact average figure for any 24-hour period. The well will not be equipped with a surface pump. The well will be equipped with a 20I-iP electric motor and drive head, driving a 7/8" diameter centralized sucker rod string rotating in the wellbore. A diagram and photograph of a typical installation is attached (see figures 2 and 3). Our 2 JUN-11-'98 THU 18:01 ID: LAPP RESOURCES INC TEL N0:1 907 248 7278 r • #1340. P03 .._______.____^,._ wellhead, drive head, and electric motor will be housed in a small weatherproof shelter. Surface fluids will arrive from other wells or surface sources via buried tow-pressure HDPE pipeline. 6. nth respect to the subsurface transfer of water, is there an estimated maximum amount to be injected daily? The maximum amount to be injected from subsurface transfer of water could initially be 1130 barrels per day, however as our coal seams dewater, the amount produced and disposed of will reduce, we hope to very low levels. 7. Please provide the Commission with evidence and data to support a finding that both proposals will not initiate or propagate fractures through the confining saves The maximum pressure output of the pump is limited to 3350 feet of head in fresh. water (1560 pounds per square inch). This pressure is insufficient to propagate significant fractures within the injection zone. Our injection depth is at Least 140 feet below our first confining layer (i,e., we are injecting into the middle of a very thick sand interval). Our injection rate and pressure is insufficient to propagate fractures of anywhere near this magnitude. In addition, in a horuontally layered medium at this depth, the planes of least resistance are horizontal, not vertical. 8. Please provide an analysis of the water within the formation into which fluid injection is proposed If the analysis GRI, Inc. has already provided addresses the specific disposal zone, please identify the disposal zone. Water from the prvpvsed disposal was analyzed and the results. previously submitted, a copy of which is attached. Our proposed disposal zone is identified on the annotated log submitted on June 5, 1998 to the attention of]1?r. B. Wondzell. 9. Will all the proposed wells in the Houston Ga~eld be equipped with a subsurface pump? Will some water still come to surface? Only wells drilled into the disposal zone will be considered for possible productio~njection completions. Wells that do not reach the disposal zone will be completed with conventional downhole pumps, and the water transferred by pipeline to a permitted injection location. Any water produced to surface will be re-injected via an injection well. 10. Please explain why some documents use GRI, Inc. and other documents use Growth Resources, Inc. The Commission understands they are two separate entities. RESOURCES INC TEL N0:1 907 248 7278 #1340 P04 • • GRI, Inc. is the owner and operator of the Houston Coalbed Gas Project. GRI, Inc. is a wholly owned subsidiary of Growth Resources N.L., which is a public company based in Perth, Western Australia, and listed on the Australian Stock Exchange (www.asx.com.au). Growth Resources N.L. has approximately 1,200 shareholders. Growth Resources' stock exchange symbols are GRE (ordinary shares), GREOA (twenty cent options), and GREOB (forty cent options). In Alaska, companies operating within the state must have a name reflecting "company" status, and the name must contain one of the following: Inc., Incorporated, Co. Company, Ltd., or Limited. In order to register to do business within the State of Alaska, Growth Resources N.L. (the parent company) had to register its name to Growth Resources, Ltd. instead of Growth Resources N.L. Therefore, Growth Resources N.L. and Growth Resources Ltd. are the same (parent) company, and GRI, Inc. is the wholly owned subsidiary company that is the owner and operator of the Houston Coalbed Gas Project. I am not aware of any occasion, on which we have used the name Growth Resources, Inc. David Lappi and Steve Thomas (both directors of GRI, Inc.) look forward to meeting with you at your earliest convenience. Sincerely, ~/ v' David W. Lappi President 4 JUN-11-'98 THU 18:02 ID: LAPP RESOURCES INC TEL N0:1 907 248 7278 PCP BENEFITS Capital costs are of the order of 50 % to 25 % of those of conven- tional units, depending on size, because of the simplicity and small size of the drivehead. Operating costs are also much Tower. Clients quote energy saving of up to 60 and 75 °/a as compared to equiva- lent conventional units. The PCP is an efficient pump. The drive system is also efficient because the sucker rods are only rotated. They are not lifted and lowered. Installation cost is minimal ;the entire system can be installed by the service rig crew. transportation costs are also mini mal, the complete system can be delivered in a pick-up truck. Sand is handled efficiently thanks to the resilience of the stator material and the pumping mechanism. Gas presence will not gas lock the pump, but free gas at the pump sue tion will take up pump capacity, as it will with any pump, and cause apparent pump inefficiency. Positive displacement rate is control led by speed and is not a function of / v;ou/!'t.'l'a,~l~l/nrrrrll~~h,•nnyrrl,u/r .' lAHI('N7f// I ~ll /rl/1 /ll' .. ~~_~~ pressure, altltouyh pressure affects efficiency. Wide production range (or each model -recommended speeds range from 25 to 500 rpm which is a ZO '1 range in production rates. This range can be achieved without any change of equipment. ftod fall restrictions are eliminated in heavy oil and deviated wells. Atsence ctt pUll<i(Wn~ in the forma- tion near the bore hole wiN genera- te less sand production from uncon- solidated sand reservoirs. Constant flow production makes instrumenta- tion easier Cunss:urr ,r~rss on rod string with minimal stress fluctuation decreases the risk of fatigue failure. Small "FUUtpcint", and limited over- all ground space makes PCP perfectly suited to rnultiwell locations and off shore production platforms. "w I> ,t:~... of the drive system <or,trasts v~ith the monumental beam unit amd makes PCP compati- blc with agricultural irrigation. 1..:,~~ „u,s„ and little visual impact makes the PCP ideal for urban areas. .'Ahyy.' ,f'a r •tT t.~gt , .'~ ~~: J;. #340 PO5 Kt)DU QIL WEtI PUMPS 3 JUN-11-'98 THU 18:03 ID:LAPP RESOURCES INC TEL N0:1 907 248 7278 #340 P06 ~TP 1000 SPECIFICATIONS soo 400 I 200 I 100 ROTOR PUMP ASSEMBLY TOTA! LENGTH 3.460 m ]]'3.0" No. OF STAGES (2) 15.8 LENGTH Of HELIX 3.260 m 10'8,3" HEaO CAPaBIlITY 1000 m 3]50 ft CREST TO CREST DIAM (i) 57.2 mm 2.252" DISPLACEMENT 263.5 CC HERO DIAM i]) 57,5 mm ~ 2.05" CAPACITY PER APM 0.379 m3/d 2.38 bOd THREAO ]"3/8 API 1" rod VOLUME AT 500RPM ]89 m3/d 1189 bDd 0,0, ]20 mm 4,72" STATOR STOP BUSHING No. OF ELEMENTS ] STANO-OFF LENGTH p,3 m 1 (~ LENGTH 2.930 m 9'6.6" 0.0, ]09 mm 4.]0' THREA05 4~ NU male BFPO M3/0 (fJ Largest of the tvo Is rotor 0.0. (21 Stage aeflned as eQUlvalent to one oltch length of stator PERFORMANCE CHART JUN-1 1-'98 THU 18:04 ID: LAPP RESOURCES INC TEL N0:1 907 248 7278 #340 P07 _ F.1~'S Nt~RTH~~N T~~TlNG ~.A8~1~~T4RiES, lNC. ~ 3330 r10'JS't'9rAL AVF.AVE F~.IkEAM1K.: J..~aS!i~'.997Ut (907)450.3115 • FAX a36-3725 a 6005 SCMOO~ i'fREE:'; ~.I:CNb1PGE At_ASKA, 9954 {4071 5t9-7006 ~ FAX $44.1016 ~ PGUCH°.~:7.~? r 96'L'NOE BQY. AU.S~~A S97`iA f9~7) Bag-2'fd5 • FAK 649.21QIS r - .~....-__._.. GI2I TnC. T:epart Ddt~3: 05/.11/98 ~19G0 Sportsman Drive 31riChoraq~ ?.Y. 95502 Attn: Dave Lappi. Q~,~r. Lab # : F'.7 i ~ 4 :: Locati~r.;':-rojacr.~ - Your Sample IU: #1 S.~mp1e Matrix: 'Rate: C~mmente: rate Arrived: OSi06/99 i?ate 5$mpled: 05/04/98 Time SamF;lc~d: - CollectFd ~y: n Lappi NiRL = Method Keporting Limit + b`lag PePin~.tiors B ~e?ow Regulatory Min. _: ~ .~Ice.'e P.egt.:latory h?ar.. Dxg¢st D~~e i,ab# hiethociraz'dm6[~zz Lr.`.: S. ~'.~>.s.i'r_,-, ~ A1RL PreFere3 Anaiyzrsd F.'7?45 SA;25iC-~ ~B.Lir :.y a:=, az':.'. ~~~ L lE0?t 0.:; OS/'JS;'9s ~lb•LJ4'J'~. TOt11 iJ:t. _.C~; : @7 ~`~.;.4:? ,,. `L i~yt .r _.":50 G5:`C£3! 98 -~ ,r P.aportea L2bOz•al:nr.~ .~~ . r • TONY KNOWLES, GOVERNOR ALA5S-A OIL A1QD GAS COI~TSERQATIOI~T COMI~IISSIOI~T June 11, 1998 David W. Lappi GRI, Inc. 4900 Sportsman Drive Anchorage, AK 9902-4169 CONFI~Z~::A.(3N COPY THIS 1S THE ORIGINAL, FOR YOUR RECORDS, OF A FACSIMILE TRANSMI N SENT' TA YOU ON ~ /~/ ~~ 3001 PORCUPINE DRIVE ANCHORAGE, ALASKA 99501-3 1 92 PHONE: (907) 279-1433 FAX: {907) 276-7542 Dear Mr. Lappi: You have filed applications for approval of subsurface transfer of water from coal seams in the Houston 1, 2 and 3 wells and approval of an area injection order for the Houston Gas Field.. Both these applications require that you comply with the provisions of 20 AAC 25.252. The Commission has a number of questions. 1. Which well(s) does GRI, inc. propose to use for disposal operations of surface fluids? 2. [s GRI, Inc. proposing the same injection zone for the subsurface transfer of water and other injection operations? 3. Please provide the name, description, depth, and thickness of the formation into which the fluids are to be injected and provide appropriate geological data on the injection zone and confining zones. including lithologic description and geologic name. 4. Your well casing information describes the Houston 3 well with the subsurface pump that GRI, Inc. proposes to use for the subsurface transfer of water. Is GRI proposing this,well design for the wells disposing of fluids from the surface'? If so, is GRI, Inc. proposing to use the well as both a producer and for disposal? If not, whi• isn't there a proposal for a dedicated injector equipped with proper tubing and packer as provided for in the regulations? ~. How will the fluids at the surface reach the subsurface pump at the rate of 1 barrel per minute, for an average of 1130 barrels per day? Will the well be equipped with a surface pump? Please describe thoroughly what the surface operation will look like. 6. With respect to the subsurface transfer of water, is there a<i estimated maximum amount to be injected daily? 7. Please provide the commission with evidence and data to support a finding that both proposals will not initiate or propagate fractures through the confining zones. 8. Please provide an analysis of the cater within the formation into which fluid injection is proposed. If the anal}•sis GRI. Inc. has already provided addresses the specific disposal zone. please identifi~ the disposal zone. 9. Will all the proposed wells in the Houston Gas Field be equipped kith a subsurface pump? Will some water still come to the surface? 10. Please explain why some documents use GR1, Inc. and other documents use Groc~th Resources,. Inc.'? The Commission understands they arc t~r~o separate entities. ~5 I' IN 7 -17-' '7t7 I Ut 11:51 1 ll : LHF'F' KtSUUKC;tS 1 NC: I tL NU : 1 `J' ~" r 248 "1278 #316 P01 GRI, Inc. 4900 Sportsman Drive Anchorage, Alaska USA 99502-4189 Telephone: 1 (907) 248-7188 a-mail: lapres~alaska.net Facsimile: 1 (907) 248-7278 May 18, 1998 The Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, AK 99501 Attn: The Commissioners Re: Houston Garfield Spacing Reduction Dear Commissioners: GRI, Inc. has drilled three wells in the Houston Gas Field. Based on the drilling results from these three holes, we believe that sufficient coal and gas reserves exist in the field to justify a reduction in well spacing from 40 acres per well to 20 acres per well. In addition, a reduction in well spacing will allow us to place more wells on production with fewer miles of roads and gas gathering system, resulting in greater operating economies. David Lappi and Steve Thomas (both directors of GRI, Inc.) are both available to answer any question that you may have on this proposal. sincerely, David W. Lappi President _,._ OR{GlNAL ;~~a Exploration and Development ~ 4 MAY-15-'98 FRI 12:56 ID:I,~P RESOURCES INC TEL N0:1 907 ti313 P01 GRI, inc. ~ ~ G ~ /~ 4900 Sportsman Drive ~'-1 Anchorage, Alaska USA 99502-4169 Telephone: 1 (907) 248-7188 a-mail: lapres~alaska.net Facsimile: 1 (90T) 24&7278 May 15, 1998 The Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, AK 99501 Attn: The Commissioners Re: Houston Garfield Subsurface Transfer of Water from Coal Seams to a deeper Saline-water-bearing Sandstone Dear Commissioners: GRI, Inc. is proposing acost-effective solution to water handling issues in coalbed gas wells. We are proposing to pump water down the wells (to a more saline-water-bearing sandstone at TD), instead of up to the surface to dewater our coal seams and initiate gas flows. This avoids the cost and environmental risk associated with handling, storing and disposing of produced saline water at the surface. We will put arod-driven progressing cavity pump, powered by an electric motor at the surface, near TD in the well. A packer will isolate the production zone from the wellbore below the packer. We have held several discussions with your technical staff on this matter and now wish to meet with the Commission to explain in detail this practice. David Lappi and Steve Thomas (both directors of GRI, Inc.) look forward to meeting with you at your earliest convenience. Sin rely, . .~ ~ / , David W. Lappi President ~°~~' 10 E uc7S NOLS f~~yh~~~9e Cor~me~rf Exploration and Development ~3 <~ TONY KNOWLES, GOVERNOR vtav ~. 19yR ALASSA OIL A1~D GAS COI~TSERQATIOI~T COMl-IISSIOI~T 3001 PORCUPINE DRIVE ANCHORAGE. ALASKA 99501-3192 PHONE: (907) 279-1433 FAX: (90~) 276-7542 Dave Lappi President GRI. Inc. 4800 Sportsman Drive ,Anchorage AK 9902-~ 169 Re:Houston I. ~. and ~--Water disposal Dear iVtr. Lappi: The Commission has reviewed vour proposal to dispose water from ~•our coalbed methane wells. Before taking am~ further action on vour request, the Commission will require the information outlined under 20 AAC 25.252(c). Please submit this information at ~•our earliest convenience. The Commission is also evaluating whether or not vour proposal is subject to regulation under Alaska~s Underground Injection Control Program. We have not ~~et made a determination is this matter. - EN • Notice of Public Hearing STATE OF ALASKA Oil and Gas Conservation Commission Re: The application of GRI, Inc. for an area injection order allowing the underground disposal of Class II wastes in .the Houston Gas Field, located near the town of Houston,. Alaska. GRI, by letter dated May 13, 1998, has requested an area injection order allowing the disposal of water, mud slurries, ground cuttings, and workover fluids produced during drilling, testing and workovers of wells within the Houston Gas Field, or from nearby exploratory or production wells. A person who may be harmed if the requested order is issued may file a written protest prior to 4:00 PM June 12, 1998 with the Alaska Oil and Gas Conservation Commission; 3001 Porcupine Drive, Anchorage, Alaska 99501, and request a hearing on the matter. If the protest is timely filed and raises a substantial and material issue crucial to the Commission's determination, a hearing on the matter will be held at the above address at 9:00 AM on June 29, 1998 in conformance with 20 AAC 25.540. If a hearing is to be held, interested parties may confirm this by calling the Commission's office, (907) 279-1433 after June 12, 1998. If no protest is filed, the Commission will consider issuance of the order without a hearing. If you are a person with a disability who may need a special modification in order to comment or to attend the public hearing, please contact Diana Fleck at 279-1433 no later than June 22, .1998. Camille 0echsli Commissioner Published May 27, 1998 ADN AO 02814047 Published May 27, 1998 Frontiersman AO 02814048 ORIGINAL Notice of Public Hearing STATE OF ALASKA Oil and Gas Conservation Commission Re: The application of GRI, Inc. for approval of the subsurface transfer of water from coal seams to a deeper formation. GRI, by letter dated May 15, 1998, has requested Commission approval to pump fluids from coal seams into a deeper and more saline. sandstone formation in the Houston Gas Field, located near the town of Houston, Alaska. A person who may be harmed if the requested order is issued may file a written protest prior to 4:00 PM June 12, 1998. with the Alaska Oil and Gas Conservation Commission, 3001 Porcupine Drive, Anchorage, Alaska 99501, and request a hearing on the matter. If the protest is timely filed and raises a substantial and material issue crucial to the Commission's determination, a hearing on the matter will be held at the above address at 9:.00 AM on June 29, 1998 in conformance with 20 AAC 25.540. If a hearing is to be held, interested parties may confirm this by calling the Commission's office, (907) 279-1433 after June 12, 1998. If no protest is filed, the Commission will consider issuance of the order without a hearing. If you are a person with a disability who may need a special modification in order to comment or to attend the public hearing, please contact Diana Fleck at 279-1433 no later than June 22, 1998. ~~ Camille Oechsli Commissioner Published May 27, 1998 ADN AO 02814049 Published May 27, 1998 Frontiersman AO 02814050 ORIGINAL f~~a°~'~~~t~~+~~r~~~rnan/Valley Sun Newspapers Alaska's ,5esl~~~r~ah Town Newspaper j7j 1 East PSI::L~-flower Court Wasilla, AK 99654 (!;'0'?} 37E-~2"1.~~ (907) 694-6318 (907) 352-2277 Faa AFFIDAVIT OF PUBLICATION UPI":[TED S i',~1TE5 ~JF AMERICA ST~'iB CIF' ALA!;K:A Tf-II:F:Cr I)Ti-'1SION. >r~f~~r{IF.r ~,1E, Tll1E Ui~iDi/RSIGNEU, A NOTARY PUBLIC THIS DAY [~~?R~s>ON.AL[.Y APPEARED KARI SLEIGHT WHO, BEING FIRST DU:[;Y SwVt)1~'V, ACCORDING TO LAW, SAYS THAT SHE IS THE P~J~3~ISH[ER OF TI-IE FRONTIERSMAN NEWSPAPER PUBLISHED AT d~'~.~LLA IiV SAID DIVISION THREE AND STATE OF ALASKA AND T':f-[AT T3-IL ;~~I;~~EIZTISEMENT, OF WHICH THE ANNEXED IS A TRUE C'O,`t''~', `~~AS Pli 13LISHED ON THE FOLLOWING DAYS: 1~';IA,.S' 2'1, 19~-8 APvT:D THAT THE RATE CHARGED THEREIN IS NOT IN EXCESS OF I'Hl::!l?.~I~ (.:IIA.RtJED PRIVATE INDIVIDUALS. S'CJ~~3C12[BED AND SWORN TO BEFORE ME I'fi[S~ 2T['H 1:)AY OAF MAY 1998. NOTAR~~" I'UBL[C FOR STATE OF ALASKA F:E; ;r~:;37 P.O-~C12814t)~ 0 M .., ~ ~,, OFFICIAL SEAL TAMMY J. CARLSON 1 i ® NOTARY P1~11C,SUITE OP ALASItA My Comrtl. E>s~es 3-20-02 NdTICE OF PUBLIC HEARING STATE OF ALASKA Oii and Gas Conservation Commission' Re; The application of GRI; ' Inc.. for approval of the sub-= surface tra6~sfe> of water from coal seams"to a tleeper for- mation: GRI, by letter dated May i5, 1998, has requested Com- mission approval to pump flu- ids from coal seams into a -_.. i deeper and more patine sand- stone formation in the Hous- ! ton Gas: Field, located near the town of Houston, Alaska. A person who may be harmed if the requested order is is-`' sued may file a writtenprotest prior to 4:00 P:M, June f 2; ; 1998 with theAlaska Oil and ' Gas Conservation Commis sign, 300f Porcupine Drive; Anchorage, Alaska 99501,. and request a hearing on the' matter. If theprotest is timely:. filed and raises a substantial and material issue crucial to the Commission's determinat(on, 'a hearing on he matter wilt be held atthe-above address' at 9:00 A.M: onJune 29,1996 in conformance with 20 AAG 95.540. If a hearing is to be held, interested parties may confirm this by calling. the Com-° mission's office, (907) 279- 1433 after'June t2, 1998: If•- no protesF is'filed, the Com- mission wilt consider issuance. of the order withouTa hearing If you are a person with a dis- abilitywhomay need a special modification in order to com- mentor to attend the public hearing, please contact Diana Fleck at 279-1433 no late( than June 22, 1998: Camille Oechsli Commissioner AO-02814050 Publish: May 27, 1998 FR7387 f .__ J`_' iA r ~l ,. r~ I !.l S:A.~l~ . . ~,~ h~ ~ ~.{ I _ ,•`t ~~ 1 ~ ,vl _ "" .,`TA7E G~ At.ASY~A ; ~ ~ ~i4 acv~~ns~rac ,s~o~R ~r ___ I--._ _ __~_-.-. .VER.T~Str1G I t ~ „,..._ -..__._._.~-- ~ ~~3Eh~l.,r G,:iV;A+::T ;GAT. ~~,:i;. '• J ,`,~, ~4~"~`Ut°~.il~ ~~1'~ its` ~3Ctr'} a~., j ~ .~l.a.? E'7C~ . ~'~! ~ ~ ~ r~tV ~ ~TE~+~J:_n~.1FFf~ Tpr,,,4l;GIEu; ~.,.~„., T ~- ~ ~SfE F4_?N5i "iCP~u. ~..~.._~.__~ -- -- ~ i j ~ ~ ~ ~ ~ ~ I I~~ ~ I ~ R ~~`~` ~~~ _ _ , . ~ 6~ ;N ;~F'?PL4~ ~"= _ - -~r ~Ef'E~E~CE 1 i 2~~?T~rE-~3 '4VE (~4 _..... ;:. ~~1140 STOF0330 ~• $6301814049 AFFIDAVIT OF PUBLICATION STATE OF ALAS[CA, ) ' "°s"t`aex°~` o~~~ ~•' Oil ana Cos COnse7watiMt THIRD JUDICIAL DISTRICT. ) taBlmiSSiDlr Eva M. Kaufmann Pte, The agplfcaf;arr a caf, tnc. for approval of file sJp- ................................................... 3UrfaCe fY6115fe( Or water" }ram being first duly sworn on oath coal sears to ddeeper forma-- flan: de oses and sa s that he she is p Y / 6a,; by IMtlr dares MaS~ i5, i99~, has reape3tea Commi~~'. an advertising representative of ~!~, °o r°~ ;n ©~"" ~' ~' the Anchorage Daily News, a , and mo.e sa+i++e sanciafane tdr• daily newspaper. That said motion in ire Flopstan Gas irieia, located near nre fawn p-. newspaper has been approved Houston, Alaska. A person Wtw may be harrrt- b the Thlid UdlClal Court, Y J ed if the reauasted order is dSSUed. mf4Y file p. wriflea pr¢• Anchors e, Alaska, and it nOW a lest pridr to d:DO PM June 12.- h k OiI d ith Al 1998 . a and has been published in the an e as a w t Gas Conservaripn Gommisston, ' English language continually as a PgrcuDiae Orlve, Anchor- ~Ol age.'Alaeka.l9507, and reauesf daily newspaper in Anchorage, igahearins;an the matfer. 1f the prdtbst° .s timely filed an4 Alaska, and it is now and dUring rdibes o sgbstantial and material issue crucialta Jhe, al I said time was printed in an nearimn5sso~n the ~rcta1etf8r "witl~y2, office maintained at the aforesaid rrelo- at The above. address at 9:00 -AM on June 79, 1998 iR place of publication of said rarrformancs with 20 AAr newspaper. That the annexed is 25.540. If a hearing is To be beta, -JnteresTed parries may - a copy of an advertisement as it calling 'fha confirm this by cprrrmipslon•s office, 190» was ublished in re ular issues p g 779-f439 after June 12, 1998..tf t10..protest is filed, the Cams (and not in supplemental form) of t»issi°" w"' t°nsiaer 'sp"a"ce ; said new paper On s of tyre Order without a hearing. if vas' area person wrtp a - 7 p 1998 T'1ay 2 / disability wha may ne•d a special fTrodifitatfan in order„ r - ixp CClm meet or ip attend the, public hearing, please cortTacT liciod ~Ffeck df ~%9•t433 no ~ iatBC i{ign June 22, 1998. ylcami IleAechsl i pmrtifissftmer AQ,t1297KM9' Pub:: May 27, 1!9& and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged. for the foregoing publication is not in excess of the rate charged private individuals. ~' ~~ signed _ ~.~ Subscribed and sworn t before me this Tim:'. day oP~-~L.L./~.~.,~. 19.~a Nota Public in an the State of Alaska. Third DNislon. Anchorage, Alaska MY COMMISSION EXPIRES ,~~....~......... y~r,?oco ~~1263 STOF0330 AO-02814047 $69.03 AFFIDAVIT OF PLiBLICATION STATE OF ALASKA, THIRD JUDICIAL DISTRICT. ; Eva T'I. Kaufmann ................................................... being first duly sworn on oath deposes and says that he/she is an advertising representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental farm) of said newspaper on T~'Iay 27 , 1998 and that such newspaper was regularly distributed to its subscribers during all of said period. That the. full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. C T Subscribed and swo me this ~. day ol~~~,I.l,!Q.,: 19<...~ /, ' Notary Public in a or the State of Alaska. Third Dfvislon. Anchorage, Alaska MY COMMISSION EXPIRES al~ffce os i'uklit ffeaf9de 61AiE OR ALASKA . 3!NN pad 0as t'bnser~otian Cominissiow-,.. Re': Th!` anpifcatton of GR1, Y95f. tar an area injectipp erdRr dNOwing the -undergroroatd dis- pOSQI of Hass If wgsles in the tfovston Gas Ftaki,' located nenr the fawn. of ~HOtrsign,. Ai ska. GRI, kW letter ,Rf~ 13.. 1448, has requesta~ pn orea iniectioa order dNarofrrG the disposal of water; rrlod slur- r~s, groutM cuttings, aeul v~rkaver fluids, produced dbrin9. drtliln4, ~testih9, and vxxirovers. of wens within the Housfon GasRield,`brfromi nearby eMPlaraterY.Or pfadUC- tion y~fls. -A •pMlDn who may be harm-. ed'if the requested order i~ ifli>arl, rrfav fil¢ a'Written`:prt*'~ TBStpriorto4:00 PM June 12,'. 1498 With- The Alaska Oi# and'. Caas Conservation Commission, 3081'. Porcuaine Drive, knchor- age; Alpskcu 44301, aad reapd~ ahear(rre an the matter. it ihq: protest is timeiv filed and, raises a soilsiantkrt and mpieri9l Issue crucial to the gpmwtiesien's- deterrHieunt;an,a _.hearing dh ih0 mailer will be held at the ahove address;ce 4;W AAd on Jvne 24, f9>~'An conforrna++te vr+`Ri -, xa 7kAt p5,S40. i£ a: b2aFt ig iD 19e held, interested partlea, fIIpY catfirm fhia by calliile itie Cortiltti€siont' office, ~4 .274.1133 after June 1A 7498. If ho arotest €6 flfgdi the mission will tons7dil' of the order Without a ~,:; It vaH area per9r~', . ~ disabitiiv wtw may ~' p apeCial nwd~ication iq t0 Calxnent. cr to att6raps, .pilClft hAgrpt9, please C Diaxw FIeCf: at 279-1433 ~ later than June 22, 1498. /s~amille Oechsli 't ~CC~hrhi3&IOI~r.. Ap R~81401d' ......I~~?......~.........~.~ODb ~~~°~:~~~~.~I~~rs~anNalley Sun Newspapers Aii:~ska's ,5esh~rral! Town Newspaper "~~ 1 East P~IaSfla~,vca- Court Wasilla, AK 9964 {~07) 3?6-52:?~ (907) 694-6318 (907) 352-2277 FaY AFFIDAVIT OF PUBLICATION LIPd~~'ED S~CATES r~F AMERICA S"]'1!.'T'E OAF' ~f.I,ASKA TH:IF.D DI~'LSION. EiE'iFOR;E I~~L, TFIE UNDERSIGNED, A NOTARY PUBLIC THIS DAY PEa~ ~iON.AL;LY APPEARED KARI SLEIGHT WHO, BEING FIRST L-1J:LY SwVO:RN, ACCORDING TO LAW, SAYS THAT SHE IS THE P'{~:~~ISII It. OF THE FRONTIERSMAN NEWSPAPER PUBLISHED AT ti~'rA.SrLLA IN SAID DIVISION THREE AND STATE OF ALASKA AND T`E-L~T TI=IT; .ADg~ EIZTISEMENT, OF WHICH THE ANNEXED IS A TRUE COP ', ~rhJAS PUBLISHED ON THE FOLLOWING DAYS: A,P~1~1 THAT "THI: RATE CHARGED THEREIN IS NOT IN EXCESS OF T.HC; u2?. PRIVATE INDIVIDUALS. S ~;~Ef:sCRI(BED AND SWORN TO BEFORE ME T'H[~'~ 2"r'"['II DAY Q~F MAY 1998. NO'"ff~lt`r ?Pi.BL[C FOR STATE OF ALASKA F'E:°.~88 ~.O-G281=I0~8 ccrc a ee~er„~glcge' OFFICIAL SEAL TAMMY J. CARLSON ~ PiOTARY PUBtJCSTATE Of ALASKA My Cornet. Expires 3-20-02 NoncE of Puauc HEARING STATE OF ALASKA Oil and Gas Conservation :Commission Re: The application of GRf Inc: fior an -area injection or- der allowing the underground ' disposal of Class It wastes in the Houston Gas Field, -o- cated near the town of Hous- ton, Alaska GRI, by .letter dated May 13, - 1998, has requested. art area injection order allowing. the disposal of water, mud slur- ries, ground cuttings; and: workover fluidsproduced dur- ing drilling, testing and,.: workovers of wells within fhe :Houston. Gas Field,. or from nearby exploratpry oFpro- , ductidn wells. A person who may be harmed if the requested order is is- sued may file a written protest prior td 4:00 P. M. June 12, 1998 with the Alaska Oil and = Gas Conservation Commis-''` Sion, 300tPorcupine Drive, Anchorage,. Alaska 99501,.,; and request a hearing on the matter: If the protest is timely filed and raises a substantial and material. sue cnx5al to the Commission's tleterrnination; a hearing on the matter will be held at the-above address at 9:00 A.M. on June 29, 1998' in conforrnance with 20 AAC 25.540. If a hearing is to be held, interested parties may confirm. this by calling 4he Com- mission's office, (907):279- ~ 1433 after June 12; 1998: 1f no protest is filed; `the Com- mission will consider issuance f of the order without ahear- ing. If you area person with a disc' ability who-may need a special;; modification in order to com- mentor to attend the public,; hearing please contac4 Diana Fleck at 279-1433 no later than June 22, 1.998. Camille Oechsli Commissioner AO-02814048 Publish: May 27, 1998 FR7388 MRY-20-98 WED 02 19 PM AO~~CC , ~ STATE OF ALASKA AD'NER'T`ISING _- OFtt)ER F ~ ~ . M 3FJt31 Aa~upli~ae t7rz~e ~nchc>'zage, ~ 99501 T ~.~. .~.,_-~__ O P Fzantier.srnari u 5751 ~. i~4ay~la~rer Cocu't g Aas$11a, A~ 99654 r~ s rl ~ ra I ~--~ FAX N0. 907 276 7542 r' P. 03 G~ORpER N0.' AO• ~ze~~v~s ~ I~iaalm F3eck 5120/98 Pi1pNE ~ ""--'~' "~ (90279-1433 est. 22~, 1'~p 27, 199$ AFFIDAVIT CAF PUBLICATIQN UN{TED.STA't"ES OF' AMERICA STATE OF _.._._ _.~_ ss DIVISION. 6EFOfiE ME, SHE UNpIsRSrGNED, A NOTARY PUBLIC THIS DAY i ~' PERSONALLY APPEARED __~ _ _.._ WHO, ,BEING. FIRST DULY SWORN, ACCORDING TO LAW, SAYS THAT HEISWE IS THE _____.. -_ -~ OF .~ _~__,,,,,~ PUBLISHED AT X__ _' _ IN SAID DIVISION .~~w„`_ ANq STATE OF _ANp THAT THE ADVERTISEMENT, QFWHICH THE ANNEXEp IS A TRUE COPY, WAS PUBLISHED IN SAID PUBLICATION ON THE ~_.,,r. _ DAY OF 19,~, AND THEREAFTER FOR __ CONSECUTIVE DAYS, Tlilm LAST PUBLICATION APPEARPNG ON THE _ dAY pF '19~, ANb THAT THE RATE CNARGE'D THEREON IS NOT IN EXCESS OF THE RATE CHARGED PRIVATE iNDIVIgUALS. SUBSCRIBED ANp SWORN TO BEFORE ME THIS _.. DAY OF ._.. _. 19,.~ 02.90'1 (Rev. 8.05) NQTgRY PUB~.IC FOR STATE OF.~ ~_ MY COMMISSION EXPIRES _„-„ ~~~ REMINDER-~-- 9NVOPCE MUST BE IN TRIPLPCATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER, A CERT1Ff ED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST 8E 5U8MITTEO W1TM THE INVOICE. ATTACH PROOF OF PUBLICATION HERE. PUB~ISH~R ~~ GRI, Inc. 4900 Sportsman Drive Anchorage, Alaska USA 99502-4169 Telephone: 1 (907) 248-7188 a-mail: lapres@alaska.net Facsimile: 1 (907) 248-7278' May 13, 1998 Via Certified Mail Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, AK 99501-3192 RE: Application for Area Injection Order Houston Gas Field, Alaska Dear Commissioners: Enclosed please find the above referenced application. If you need additional information, please contact me at 248-7188. Thank you. Sincerely, s~ ~' '' e David W. Lappi President ~, ,- t ~ x Exploration and Development ~ ~ Alaska Oil and Gas Conservation Commission Application for Area Injection Order: Houston Gas Field GRI, Inc. May 13, 1998 Section: Letter of Application for Injection (20AAC 25.252(a)) Location/Plat Maps (20 AAC 25.252(c)(1)) Operator and Surface Owners (20 AAC 25.252(c)(2)) Affidavit of Notice to Surface Owners and Operators (20 AAC 25.252(c)(3)) Geological/Reservoir Information Concerning Injection Zone (20 AAC 25.252(c)(4)) Well Log for Houston 3 (20 AAC 25.252(c)(5)) Well Casing Information (20 AAC 25.252(c)(6)) Injection Fluid (20 AAC 25.252(c)(7)) Average/Maximum Injection Pressures (20 AAC 25.252(c)(8)) Fracture Information (20 AAC 25.252(c)(9)) Formation Information (20 AAC 25.252(c)(10)) Aquifer Exemption (20 AAC 25.252(c)(11)) Mechanical Integrity (20 AAC 25.252(d) through (g)) Mechanical Integrity of Other Wells within'/4 Mile Radius (20 AAC 25.252(h)) Attachments Attachment A Location/Plat Map Attachment B Affidavit of Notice to Surface Owners and Operators Attachment C Geological and Completion Information Attachment D Well Casing Diagram Attachment E Formation Fluid Letter of Application for Injection (20 AAC 25.252(a) GRI, Inc. is requesting an Injection Order for the Houston Gasfield to enable the injection of water, mud slurries, ground cuttings, and workover fluids produced during drilling, testing, and workovers of wells within the field, or from nearby exploratory or production wells. If fluids with significant solids content are injected, these materials will be processed before injection to limit plugging and fracturing in the injection zone. At this time, the Houston 3 well intersects the proposed injection interval between approximately 1890 and 2030 feet. Location/Plat Maps (20 AAC 25.252(c)(1)) Location information is enclosed in the form of a geological plan drawing for the Houston Gas Field showing the Houston Gas Field. An asbuilt surveyed plan drawing of the Houston 1, Z, and 3 well locations has been submitted under a separate cover. Aside from the Houston 2 well, there are no other wells within '/4 mile radius of Houston 3. The Houston 1 well lies outside the'/4 mile radius. No structure maps exist for the area as no operator has conducted detailed seismic surveys. The Rosetta 1 through 4A wells drilled in the area, and the recent Houston 1, 2, and 3 wells indicate the Tertiary coal-bearing section is relatively flat-lying. Operator and Surface Owners (20 AAC 25.252(c)(2)) The interested parties within'/a mile radius surrounding the Houston 3 well are: aerator: GRI, Inc. Surface Owners: 9-J Corp. P.O. Box 770456 Eagle River, AK 99577 The Alaska Railroad Corporation 327 Ship Creek Avenue Anchorage, AK 99501 R ~..~ _.~= Margaret Bryant 104 Ridgefield Avenue Stephens City, VA 22655 Kenneth & Marcia Conn P.O. Box 940165 Houston, AK 99694 Houston Church of Christ Attn: Mr. Donald J. Heath P.O. Box 940075 Houston, AK 99694 Pat & Gloria McMahan, Latrelle Lamon, Betty Danford 2124 Campbell Place Anchorage, AK 99507 Michael L. Mikkelsen & Thomas F. Baird P.O. Box 940331 Houston, AK 99694 Scott & John Pope HC 30 Box 5329AG Wasilla, AK 99654 Affidavit of Notice to Surface Owners and Operators (20 AAC 25.252(c)(3)) An affidavit is enclosed as Attachment B. GeologicaVReservoir Information Concerning Injection Zone (20 AAC 25.252(c)(4)) A description of the geologic zone where the proposed injection will occur is enclosed as Attachment C. Also included in Attachment C is pertinent completion information for Houston 3. Well Log for Houston 3 (20 AAC 25.252(c)(5)) Logs for the Houston 3 well have been submitted under a separate cover in accordance with 20 AAC 25.071(a) and (b). Well Casing Information (20 AAC 25.252(c)(6)) Houston 3 is cased as shown on Attachment D. The casing was cemented in accordance with 20 AAC 25.030. Since our injection pump in this design is at the bottom of the well, the casing above the pump will not be subjected to pumped injection pressures. The wellbore pressures during injection will normally be close to atmospheric, or at most hydrostatic pressures. Injection Fluid (20 AAC 25.252(c)(7)) Wastes will include natural precipitation, produced water, mud and earth slurries, ground cuttings, pipe scale, gas dehydration wastes, equipment rinse water, and workover fluids produced during drilling, testing, production, and workovers of wells drilled by the Company or others in the Houston Gasfield and surrounding areas. Other wastes, as permitted by State or Federal regulation, may be injected during the project. Maximum Injection Rate: 1 barrel per minute Average Daily: 1130 barrels per day Average/Mazimum Injection Pressures (20 AAC 25.252(c)(8)) The average bottom hole injection pressure is expected to be about 1250 psi, with little to no fluid in the borehole. The maximum bottom hole injection pressure is a combination of the pressure of the head of water in the 2030 foot well (950 psi), plus the downhole pump maximum head which is 3300 feet, or 1550 psi, giving a total bottom hole pressure of 2500 psi. Fracture Information (20 AAC 25.252(c)(9)) The disposal zone is a thick, clean, porous, and permeable salt-water bearing sandstone near the base of the Tertiary section, which is much less competent than the overlying units. As a poorly cemented unit, traditional fracture analysis by computer modeling is unreliable and has not been attempted. We believe that the formation will accept our injected fluids without significant fracture development or growth. Formation Information (20 AAC 25.252(c)(10)) The bulk of the injection fluids will be saline formation waters from the overlying Tertiary Tyonek formation. Laboratory analyses of water from various levels in the wells are included in Attachment E. These analyses show that the overlying waters are less saline than the injection zone. Aquifer Exemption (20 AAC 25.252(c)(11)) There is no exemption listed in 40 CFR 147 (b) (1) for the Houston Gasfield. The proposed injection zone is a saline water bearing sandstone with a salinity of 18,000 mg/1 and a total dissolved solids content of 18,100 mg/l. Mechanical Integrity (20 AAC 25.252(d) through (g)) Our injection pump is at the bottom of the well, which means that the wellbore pressure will be less than the formation pressure at any given level. We will also be producing gas :7 .. . from several perforated coal zones in the same well. A mechanical integrity check of the casing will ensure that other fluids do not invade aquifers. Mechanical Integrity of Other Wells within'/4 Mile Radius (20 AAC 25.252(h)) No other wells have been completed to or through the injection interval within 1/4 mile. Houston 2 is cased and cemented to a depth of 1680 feet. Attachments Attachment A Location/Plat Map Attachment B Affidavit of Notice to Surface Owners and Operators Attachment C Geological and Completion Information Attachment D Well Casing Diagram Attachment E Formation Fluid 1501 `00' ~~ Q Z J N ~- „~' Wiliov`' C~ ~Pek m t ~ Willow ~ D ~ \ r ~ N ~ 9 ~~ Houston Gasfield ~~o :.: ~0 1 ~- ------- t.T ^ Fps ^ ~ River Susitha ~ 4,4A ----- -J - ~ Rosetta 1,2 4, , Houston MOUNTp-N,.:- ~` _ .. - ~~~ E - - J ~ ~ ~~ ~,~` ~~E Beaver Lakes GP$ State 1 \~~~ Pittman ___ Wasll~~ - __--_~ Lucile Lake Big Lake -- 61 ° 30' 0 5 10km ~ E --r LEGEND Intrusive rocks Tsadaka Formation -conglomerate, sandstone, siltstone Arkose, conglomerate, sandstone, siltstone, shale ~,. ' ~' Granodiorite, quartz diorite, diorite Valdez (?) Group • metawacke, metasiltstone, argillite McHugh Complex • Metamorphosed siltstone, greywacke, arkose, conglomerate sandstone, greenstone TF Talkeetna Formation -Volcanic breccia V~~ Metamorphic, gabbrioc, and untramafic rocks Faults Excised State oil and gas lease l - .1 State shallow gas lease application • Drillhole Knik j X ~ P~ P ~ ~ ~-~ Birchwood GROWTH RESOURCES N.L. HOUSTON GAS FIELD GEOLOGICAL PLAN WITH DRILLHOLE LOCATIONS AND LEASED AREA ~~ ,~ i Eagle River E :.-~„~ LO FIGURE 4 :7 Attachment B Affidavit of Notice to Surface Owners and Operators 20 AAC 25.252(c)(3) State of Alaska Third Judicial District I, David W. Lappi, declare and affirm as follows: 1. I am a corporate officer of GRI, Inc. I have personal knowledge of the matters set forth in this affidavit. 2. On May 13, 1998, the following surface owners within '/a mile radius of the Houston 3 well were sent a copy of a Class II injection permit application to the Alaska Oil and Gas Conservation Commission, dated May 13, 1998. Operators: GRI, Inc. 4900 Sportsman Drive Anchorage, AK 99502-4169 There are no other oil and gas operators within the area in question. Surface Owners: 9-J Corp. P.O. Box 770456 Eagle River, AK 99577 The Alaska Railroad Corporation 327 Ship Creek Avenue Anchorage, AK 99501 Margaret Bryant 104 Ridgefield Avenue Stephens City, VA 22655 Kenneth & Marcia Conn P.O. Box 940165 Houston, AK 99694 Houston Church of Christ Attn: Mr. Donald J. Heath P.O. Box 940075 Houston, AK 99694 Pat & Gloria McMahan, Latrelle Lamon, Betty Danford 214 Campbell Place Anchorage, AK 99507 Michael L. Mikkelsen & Thomas F. Baird P.O. Box 940331 Houston, AK 99694 Scott & John Pope HC 30 Box 5329AG Wasilla, AK 99654 Dated at Anchorage, Alaska this 13th day of May, 1998. David W. Lappi -President Subscribed and affirmed before me at Anchorage, Alaska on May 14, 1998. Notary Public in and for The State of Alaska My commission expires: Attachment C: Geological and Completion Information Geological Information Criteria for selecting a disposal zone for the Houston Gasfield included: • Thick porous and permeable sands near the base of the Tertiary section. • Laterally extensive sand body to accept fluids. • Saline formation water (18,000 mg/1 NaCI) in the disposal zone. • Sufficient dirty sandstone, siltstone and claystone overlying the sand to ensure substantial vertical confinement. • Adequate cement jobs confirmed by short-spaced density tool logs and cement bond logs in Houston 3, and also in nearby wells to ensure mechanical integrity. • Limited access by the general public as the well is on otherwise vacant private land. The Houston 3 wellsite fills these criteria. In particular, the sands below 1890 feet show high neutron porosity and low natural gamma counts indicating clean, porous sands. Completion Information A ten-inch hole was drilled to 525 feet and 505 feet of centralized seven-inch 23 lb. per foot casing using butt-welded joints was set and cemented in place. A 6'/a inch hole was drilled to 2030 and 4'/i inch centralized 10.75 lb. per foot flush- jointed threaded casing was set and cemented in place. Open hole logs were run to a depth of 1655 feet, and cased hole logs were run from 1610 to 2000 feet. Short-spaced density logs and cement bond logs were run over the entire well to evaluate the adequacy of the cementing jobs. The float shoe was drilled out and the well perforated at five coal zones to evaluate gas potential. The well is currently shut in, awaiting downhole water disposal permitting and a downhole pump. ~OUSTON #3 WELL SCHEIV~rIC CASING DETAIL 10" Conductor @ 20' Set in 12" Hole Welded Joints 7" Surface Casing @ 505' 23 Ib/ft set in 10" Hole Welded Joints 4'/z" Production Casing @ 2030' 10.75 Ib/ft set in 6'/4" Hole Flush Joints (VFJ threads) Perforations @ 4spf 1338-1342 1358-1362 1507-1512 1820-1826 1848-185G Attachment E: Formation Fluid The following water samples have been collected from the Houston 1, 2, and 3 wells. Sample 1 was collected on 5/4/98 from Houston 3 from the open hole below the casing shoe at 2030 feet after drilling out the cement shoe, but before perforating. Depth: 2,030 feet Salinity: 18,000 mg/1 Total Dissolved Solids: 18,100 mg/1 Sample 2 was collected from Houston 2 from perforations at 842-852 feet. Depth: 842 to 852 feet Salinity: 17,000 mg/1 Total Dissolved Solids: 17,400 mg/1 Sample 3 was collected on March 22, 1998 from Houston 1 from the open hole below surface casing. At that time the hole was drilled to TD of 1680 feet. Depth: >500 feet Salinity: 16,000 mg/1 Total Dissolved Solids: 14,300 mg/1 Sample 4 was collected from the Houston 1 from a depth of 500 feet. Depth: 500 feet Salinity: 910 mg/1 Total Dissolved Solids: 2,800 mg/1 Sample 5 was collected on January 22, 1998 from a coal seam in Houston 3 at 225 feet during drilling. Depth: 225 feet Salinity: 1,200 mg/1 Total Dissolved Solids: 12,000 mg/1 The laboratory result sheets are attached. ' 7` / ~ -~ NORT~iERN TESTING LABORATORIES, INC. ~ 3330 INDUSTRIAL AVENUE FAIRBANKS, ALASKA 99701 (907) 456-3116 • FAX 456-3125 ~ ~ 3605 SCHOON STREET ANCHORAGE, ALASKA 99518 1907) 349-1000 • FAX 349-1016 ~ POUCH 340043 PRUDHOE BAY, ALASKA 99734 1907) 659-2145 • FAX 659-2146 1 r GRI Inc. 4900 Sportsman Drive Anchorage AK 99502 Attn: Dave Lappi Report Date: 05/11/98 Date Arrived: 05/06/98 Date Sampled: 05/04/98 Time Sampled: - Collected By: D Lappi MRL = Method Reporting Limit Our Lab #: F177845 Location/Project: - Your Sample ID: #1 Sample Matrix: Water Comments: * Flag Definitions B = Below Regulatory Min. H = Above Regulatory Max. Digest Date Lab# Method Parameter Units Results * MRL Prepared Analyzec F177845 SM2520-B Salinity as NaCl mg/L 18000 0.2 05/06/9£ SM2540-C Total Dissolved Solids mg/L % / 18100 1250 05/08/9£ Reported ~: Cindy L. Christian Laborator Director _~ " ~~ ~ ~ ~'; ~~~ ~ o NORT HER N TESTING ~ARORATORIE~, INC. 3330 INDUSTRIAL AVE"JUE FAIRBAfJKS. ALASKA 99701 19071 456-3116 • FAX 456-3125 3005 SCHOCfi STREET ANCHORAGE, ALASKA 99518 (907) 349-1000 • FAX 349-1016 ?OUCH 340043 FRUDHOE BAY, ALASKA 99734 1907) 659-2145 • FAX 659-2146 GRI Inc. 4900 Sportsman Drive Anchorage AK 99502 Attn: Dave Lappi Report Date: 05/11/98 Date Arrived: 05/06/98 Date Sampled: 04/28/98 Time Sampled: - Collected By: D Lappi MRL = Method Reporting Limit Our Lab #: Location/Project: Your Sample ID: Sample Matrix: Comments: F177846 #2 Water * Flag Definitions B = Below Regulatory Min. H = Above Regulatory Max. Digest Date Lab# Method Parameter Units Results * MRL Prepared Analyzes F177846 SM2520-B Salinity as NaCl mg/L 17000 0.2 05/06/9f SM2540-C Total Dissolved Solids ~ ~ ~' - ~~ L,' ~6~-~.. Reported B Cindy L. Christian Laborator Director mg/L 17400 1250 05/08/9f -~-=~ NOR~~IERN ~F~TING LARORATORIE~ INC. ~!! ~ 3330 INDUSTRIAL AVENUE FAIRBANKS, ALASKA 99701 !907) 456-3116 • FAX 456-3125 u 8005 SCHOON STREET ANCHORAGE, ALASKA 99518 (907) 349-1000 • FAX 349-1016 r ! ~ POUCH 340043 PRUDHOE BAY, ALASKA 99734 !907) 659-2145 • FAX 659-2146 GRI Inc. 4900 Sportsman Drive Anchorage AK 99502 Attn: Dave Lappi Our Lab #: F177847 Location/Project: - Your Sample ID: #3 Sample Matrix: Water Comments: Report Date: 05/11/98 Date Arrived: 05/06/98 Date Sampled: 03/22/98 Time Sampled: - Collected By: D Lappi MRL = Method Reporting Limit * Flag Definitions B = Below Regulatory Min. H = Above Regulatory Max. Digest Date Lab# Method Parameter Units Results * MRL Prepared Analyzes --------------------------------------------------------------------------------------------- F177847 SM2520-B Salinity as NaCl mg/L 16000 0.2 05/06/9E SM2540-C Total Dissolved Solids mg/L 14300 1000 05/08/9f ,, ~ i~ / ~ -1 -~ ~ °`. Reported Cindy L. Christian Laboratory Director ~~' ~~~ ~ ~ ~~~ L~~oR~~o~~ES ANC. ~.~~~-~ ~ORT~E~~ ~~ G , I ~ ~ 3330 INDUSTRIAL AVENUE FAIRBANKS. ALASKA 99701 (907) 456-3116 • FAX 456-3125 ~ ~ 8005 SCHOON STREET ANCHORAGE, ALASKA 99518 19071 349-1000 • FAX 349-1016 1 ~ ?OUCH 340043 °RUDHOE BAY, ALASKA 99734 1907) 659-2145 • FAX 659-2146 GRI Inc. 4900 Sportsman Drive Anchorage AK 99502 Attn: Dave Lappi Our Lab #: F177848 Location/Project: - Your Sample ID: #4 Sample Matrix: Water Comments: Report Date: 05/11/98 Date Arrived: 05/06/98 Date Sampled: Time Sampled: - Collected By: D Lappi MRL = Method Reporting Limit * Flag Definitions B = Below Regulatory Min. H = Above Regulatory Max. Digest Date Lab# Method Parameter Units Results * MRL Prepared Analyzes F177848 SM2520-B Salinity as NaCl mg/L 910 0.2 OS/06/9 SM2540-C Total Dissolved Solids mg/L 'J ~ C~~~- . Reported Cindy L. Christian Laboratory Director 2800 250 05/08/9 • ~ ~~ ~ ~~ _ ~ ~' RAT RIES INC. -~ Ill O R ~ ~l E R l~ ~ E~T1 ~1 G LARO 0 , ~ ~ 3330 INDUSTRIAL AVENUE FAIRBANKS, ALASKA 99701 (907) 456-3116 • FAX 456-3125 ~, ~~ o '-005 SCHOGN STREET ANCHORAGE, ALASKA 99518 !907) 349-1000 • FAX 349-1016 ?OUCH 340043 °RUDHOE BAY. ALASKA 99734 !9071 659-2145 • FAX 659-2146 u GRI Inc. 4900 Sportsman Drive Anchorage AK 99502 Attn: Dave Lappi Our Lab #: F177849 Location/Project: - Your Sample ID: #5 Sample Matrix: Water Comments: Report Date: 05/11/98 Date Arrived: 05/06/98 Date Sampled: Time Sampled: - Collected By: D Lappi MRL = Method Reporting Limit * Flag Definitions B = Below Regulatory Min. H = Above Regulatory Max. Digest Date Lab# Method Parameter Units Results * MRL Prepared Analyzec --------------------------------------------------------------------------------------------- F177849 SM2520-B Salinity as NaCl mg/L 1200 0.2 OS/06/9F SM2540-C Total Dissolved Solids mg/L 12000 250 05/08/9E Reported F~y~: Cindy L. Christian Laborator~Director