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Home My WebLink AboutDIO 027 A• Image Project Urder File Cover Page XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. ~~a°~A Order File Identifier Organizing (done> ~,.e,aea iuuiumiiuuu RESCAN DIGITAL DATA ^ Color Items: ^ Diskettes, No. ~Greyscale Items: P ~ ^ Other, No/Type: Q ^ Poor Quality Originals: ^ Other: NOTES: BY Date: ae,~,.~eeaea uiiuiiiui~iiiiii OVERSIZED (Scannable) ^ Maps: ^ Other Items Scannable by a Large Scanner OVERSIZED (Non-Scannable) ^ Logs of various kinds: ^ Other:: /s/ P Project Proofing / f , III II~IIIIIIII II III BY: Maria Date: ~ ~s! Scanning Preparation x 30 = + =TOTAL PAGES 3 (Count does not include cover sheet) ~/~/~ BY: Maria Date: Q !s! Y Production Scanning III IIIIII IIIII II III Stage 1 Page Count from Scanned File: ~ I (Count does include cov sheet) Page Count Matches Number in Scanning P/reparation: YES NO BY: Maria Date: ~] / /© !s1 ~n / ((( ' r l P Stage 1 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 II iI Il I II II I I III ReScanned II I II II II I ~ III I I III BY: Maria Date: ~s~ Comments about this file: Quality Checked III II~III IIIII~I III 10/6!2005 Orders File Cover Page.doc L~ INDEX Disposal Injection Order 27A Iliamna #1 1. September 17, 2004 2. September 17, 2004 3. September 22, 2004 4. September 23, 2004 5. October 4, 2004 Letter from operator to Tom Maunder Commissions response to letter (located in Confidential Room) Operator letter re: amending DIO 27 Various a-mails and note to file e-mail to Jim Rose re: requirement for temperature survey Disposal Injection Order 27A ~ ~ STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue, Suite 100 Anchorage Alaska 99501 Re: THE APPLICATION OF PELICAN HILL OIL AND GAS Inc. for disposal of Class II oil field wastes by underground injection in the Tyonek Formation in the Iliamna No. 1 Well, Section 31, T9N, R14W, S.M. Disposal Injection Order No. 27A Tyonek Formation Iliamna No. 1 Well Originally Issued September 16, 2004, Corrected and Amended October 4, 2004 IT APPEARING THAT: 1. By correspondence dated August 6, 2004 and received by the Alaska Oil and Gas Conservation Commission ("AOGCC") that same day, Pelican Hill Oil and Gas Inc. ("Pelican Hill") requested the Commission issue an order authorizing underground injection of non-hazardous Class II oil field waste fluids into the Tyonek Formation within the Iliamna No. 1 ("Iliamna 1 ") well bore. The Iliamna 1 well is located in Section 31, T9N, R14W, Seward Meridian ("S.M."), on the west side of Cook Inlet, Alaska. 2. Notice of opportunity for public hearing was published in the Anchorage Daily News on August 11, 2004 in accordance with 20 AAC 25.540. 3. The Commission did not receive any public comments, protests or a request for a public hearing. 4. Pelican Hill submitted additional information to the Commission on September 3 and 10, 2004 in support of its application. 5. Disposal Injection Order No. 27 was issued on September 16, 2004. 6. In response to a letter from the applicant on September 17, 2004 reporting an error in the original order, the Commission is providing Disposal Injection Order No. 27A to supersede and replace Disposal Injection Order No. 27. Disposal Injection Order 27~ ~ Page 2 of 7 Iliamna No. 1 October 4, 2004 7. On September 22 and 23, 2004, Pelican Hill submitted additional information to the Commission concerning this operation. FINDINGS: 1. Location of adjacent wells (20 AAC 25.252 (cam There are no wells with surface locations within cone-quarter mile radius of the Iliamna 1 well. The nearest wells are Cities Service's West Foreland State A No. 1 ("WFS A-1") well, located about 1-1/4 miles to the south and Shell Oil Company's Kustatan Ridge State No. 1 ("KRS 1"), about 1-1/2 miles to the north-northeast. The nearest water well registered with the Alaska Department of Natural Resources is a 273-foot deep domestic water well located about 1-1/2 miles to the southeast at Unocal's Trading Bay Facility camp. 2. Notification of Operators/Surface Owners (20 AAC 25.252 (c22) and 20 AAC 25.252 (c)(3)) Pelican Hill is the operator of the Iliamna 1 well. There are no other operators within a one-quarter mile radius of the proposed disposal injection well. The sole surface owner within aone-quarter mile radius of the Iliamna 1 well is the Kenai Peninsula Borough. A letter of non-objection was received from the Borough on Dec. 9, 2003, in support of Pelican Hill's original application for disposal injection within the Iliamna 1 well. The original application was dated December 8, 2003. 3. Geologic information on disposal and confining zones/ Potential impact on an adjacent producing_well. (20 AAC 25.252 (c (4)) Pelican Hill proposes to conduct disposal operations in the Iliamna 1 well in the Tyonek Formation interval between 3,126' and 3,147' measured depth. This interval consists of sandstone, and it correlates to a silty sandstone interval between 3,472' and 3,492' feet in the KRS 1 well, but is difficult to correlate directly in WFS A-l . The porosity of this target injection layer is estimated to be about 26 percent based on the sonic log from KRS 1 and the neutron-density logs recorded in Iliamna 1. Openhole well logs from KRS 1 and WFS A-1 indicate formation waters below about 2,200' measured depth exceed 10,000 ppm total dissolved solids ("TDS"), based on the RWa method for calculating TDS content from wireline log data endorsed in the US Environmental Protection Agency's ("EPA") publication "Survey of Methods to Determine Total Dissolved Solids Concentration" (KEDA Project No. 30-956). This was later confirmed when Iliamna 1 was swabbed in and formation water was recovered from the interval between 3,126'and 3,147'measured depth. Testing of the formation water for chlorides yielded a measurement of 40,000 ppm. Upper confinement will be provided by interlayered mudstone and siltstone occurring from 2,988' to 3,058' and from 2,940' to 2,978' measured depth. Lower confinement Disposal Injection Order 27~ Iliamna No. 1 October 4, 2004 Page 3 of 7 will be provided by the mudstone and siltstone occurring from 3,182' to 3,234' and from 3,254' to 3,304' measured depth in the well. 4. Iliamna 1 Lois (20 AAC 25.252~c)(5)) The logs of the Iliamna 1 well are on file at the AOGCC. 5. Casin Description Well Iliamna 1 (20 AAC 25.252 (c)(6)(A)) There are two strings of casing as follows: Surface Casing: 9-5/8", 32 pound per foot, H-40 casing, Shoe Depth 560', cemented with 280 cubic feet of cement. Production Casing: 5-'/z", 15-1/2 pound per foot, K-55 casing, shoe depth 3,517', cemented with 472 cubic feet of lead (13.1 ppg) and 287 cubic feet of tail (15.8 ppg)• 6. Demonstration of Mechanical Integrity and Disposal Zone Isolation (20 AAC 25.252 (c)(6)) A cement quality log is available for Iliamna 1, and it demonstrates the existence of adequate bonding across the upper and lower confining intervals to ensure disposed fluids are appropriately isolated. Prior to initiating disposal operations, Pelican Hill will perform a pressure test of the tubing x casing annulus as required by 20 AAC 25.412(c). 7. Disposal Fluid Type Source Volume and Compatibility with Disposal Zone (20 AAC 25.252 (c)(7)) The wastes planned for disposal in this well consists of drilled cuttings and freshwater-based drilling mud generated during drilling of the Iliamna 1 well. Given the relatively limited amount of fluid and cuttings to be disposed, compatibility of the fluids and cuttings with the formation waters of the storage interval is not likely to affect the storage capacity of the injection zone. 8. Estimated Injection Pressure (20 AAC 25.252 (c (8)) The operator originally estimated that average injection pressure will be 800 psig and the maximum injection pressure will be 1,000 psig. A step rate test done September 22, 2004, indicated a rate of 2 barrels per minute (2,880 barrels per day) at 860 psi using clean water as the fluid. The operator now estimates that the maximum injection pressure will exceed 1,000 psig. However, based on the step rate test, the Disposal Injection Order 27~ ~ Page 4 of 7 Iliamna No. I October 4, 2004 Commission finds that the maximum injection pressure is unlikely to greatly exceed 1,000 psig. 9. Evaluation of Confining Zones (20 AAC 25.252 (c Disposed wastes will be prevented from upward migration by interlayered mudstone and siltstone occurring from 2,988' to 3,058' and from 2,940' to 2,978' measured depth in Iliamna 1. These two confining intervals total 108' gross thickness, of which 94' (87%) is mudstone or siltstone. Downward migration will be prevented by the mudstone and siltstone occurring from 3,182' to 3,234' and from 3,254' to 3,304' measured depth in the well. The gross thickness of these two underlying confining intervals totals 104', of which 84' (82%) is mudstone or siltstone. The thickness of these confining zones and their high mudstone and siltstone content will be sufficient to confine injected wastes to the proposed interval. Open hole well logs from KRS 1 and WFS A-lindicate formation waters below about 2,200' measured depth exceed 10,000 ppm total dissolved solids, about 950' above the target injection interval. The large vertical separation from overlying freshwater, combined with low injection pressures, low injection rates, and the limited amount of disposed fluids and cuttings ensure fractures will not propagate through the confining intervals. 10. Standard Laboratory Water Analysis of the Disposal Zone (20 AAC 25.252 (c (10~ Iliamna 1 was drilled with casing. Consequently, open hole well logs are not available. Iliamna 1 was swabbed in and formation water was recovered from the interval between 3,126' and 3,147' measured depth. A sample of formation water was tested for chlorides, and it measured 40,000 ppm. 11. Freshwater Exemption (20 AAC 25.252 (cLl l }~ A freshwater aquifer exemption is not required because total dissolved solids of the formation water exceed 10,000 ppm in the target injection zone. 12. Mechanical Condition of Wells Penetrating the Disposal Zone within % Mile of Iliamna 1 (20 AAC 25.252 (cam) There are no wells within aone-quarter mile radius of the Iliamna 1 well. CONCLUSIONS: 1. The application requirements of 20 AAC 25.252(c) have been met. 2. A freshwater aquifer exemption is not required. Disposal Injection Order 27~ ~ Page 5 of 7 Iliamna No. 1 October 4, 2004 3. Waste fluids will be contained within appropriate receiving intervals by the confining lithologies in the Tyonek Formation, cement isolation of the well bore and operating conditions. 4. Disposal injection operations in the Iliamna 1 well will be conducted at rates and pressures below those that will fracture the confining zone. 5. Evaluation of surveillance and operational performance data will reasonably assure there is no fracturing of the confining zone. 6. Surveillance of disposal volumes, daily monitoring of operational parameters, and demonstration of mechanical integrity will reasonably ensure continued mechanical integrity of the well and that waste fluids are contained within the disposal interval. 7. Disposal injection of Class II wastes into well Iliamna 1 will not cause waste, jeopardize correlative rights, impair ultimate recovery, or contaminate freshwater. NOW, THEREFORE, IT IS ORDERED THAT this order supersedes Disposal Injection Order No. 27, and that the following rules are adopted: RULE 1: Authorized Infection Strata for Disposal Injection of authorized fluids for purposes of underground disposal of oil field wastes is permitted, subject to these rules, into the Tyonek Formation between 3,126' and 3,147'measured depth in the Iliamna 1 well. RULE 2: Authorized Fluids Fluids authorized for injection in the Iliamna 1 well are: 1. drilling and completion fluids 2. drilling mud 3. tank bottoms 4. rig wash 5. precipitation accumulating within containment areas 6. Other fluids suitable for disposal in a Class II well and approved by the Commission on a case-by-case basis. The total volume of disposed waste fluids and cuttings may not exceed 8,000 barrels without prior approval of the Commission. RULE 3: Demonstration of Tubing/Casing Annulus Mechanical Integrity The mechanical integrity of the 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 Disposal Injection Order 27~ , Page 6 of 7 Iliamna No. 1 October 4, 2004 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. RULE 4 Well InteErity 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 the injection well indicating well integrity failure or lack of injection zone isolation. RULE 5: Surveillance Operating parameters including disposal rate, disposal pressure, annulus pressures, step rate test results and volume of fluids and solids pumped must be monitored and reported according to requirements of 20 AAC 25.432(1). The operator shall conduct a baseline step rate test prior to initial injection. An initial report of operations must be provided after one month of injection. The operator shall obtain a temperature log immediately after cessation of disposal injection activities. A final report of operations must be provided 30 days after completion of all disposal injection activities. RULE 6: Notification of Improper Class II Infection The operator shall immediately notify the Commission if it learns of any improper Class II injection. Additionally, notification requirements of any other State or Federal agency remain the operator's responsibility. RULE 7: Administrative Action 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. Disposal Injection Order 27~ Iliamna No. I October 4, 2004 Page 7 of 7 RULE 8: Other Conditions Operations must be conducted in accordance with AS 31.05 and Title 20, Chapter 25 of the Alaska Administrative Code unless specifically superseded by Commission order. Failure to comply with an applicable provision of AS 31.05, Title 20, Chapter 25 of the Alaska Administrative .Code, or a Commission order may result in the revocation or suspension of this authorization. -DONE at Anchorage;.Alask~ and dated N and Gas Conservation Commission Daniel . Seamount, r., Commissioner Alaska Oil and Gas Conservation Commission 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 ]0 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 of the 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). DIO 27A Subject: DIO 27A From: Jody Colombie <Jody_colombieCadmin.state.ak.us> Date: Wed, 06 Oct 2004 13:52:02 -0800 To: undisclosed-reciiiients:; BCC: Cynthia B Llri~~er <bren_mciver~admin.state.ak.us>, Robcl-t E Mintz <robert mintzCla~~~.state.ak.us>, Chri~tirte Hansen <c.hansenr~i~io~cc.state.ok.us>, Terrie Hubble <huhbletl ~ hC~.con~= ,Sondra Stewman ~-StewmaSD~$P.con~ =. Scott & Cammy Taylor <staylor~:ala5ka.net>, stanekj <stanekjrcc::unocaLcom~>, ea~la~~~ --ccoIaw@,trustees.or~>, roseragsdale <roseragsdalcrugci.net>,trmjrl <trmjrl!~c~aol.com-=, jbriddlc ~jhriddic~marathonoil.core>,rockhill <roekhill(u.auga.org>, shaneg' haneg~~~c~~~rgrecngas.c~>>ii~, ldarlingtun <jdarlingtuniwforestoil.com%. nelson <knelsun~~etrolcurnne~a~s.com>, cboddy <cboddy@iisibelli.com>, Mask Dalton <nlark.dalton~u hdrinc.com=-. Shannon Donnelly <shannon.donnellyCconocophillips.com>, "Mark P. Worcester" <mark.p.woreesterCconocophil1ips.cor~>, "Jerry C. Dethlefs" °=jcrry.c.dethlefs@conoeophillip~.com>, Bob <bob@inLctkecper.org--. ~~~dv <wd~°(cr,dru~.statc.ak.us>, tjr ~tjr a~dnr.state.ak.us>, bbritch <=bbritch u~alaska.net~. mjnelson <n~jn~lson<«;}~urvingertz.com>, Charles O'Donnell <charles.o'donnell@,veco.com>, "Randy L. Skillern" <SkillcRl,r~BP.com>, "Deborah J. Jones" <JonesD6 a BP.com>, "Paul G. Hyatt" <hyattpg c~BP.com >. "Steven R. Rossberg" <RossheRS~~ BP.com>, Lois <Iois@inletkeeper.org=, Dan Bross <kuacnews~.~i~kiaac.or~~->, Gorden Pospisil <Pos~~isG(a~BP.com>, "Francis S. Sommer" ~ _So~nmerFS~u,:BP.com~ ~, 1~-1 ikel Schultz <Mikel.Schultz(u BP.com>, "Nick W. Glover" <G1o~~erl~W@BY.co~~~-=, "Daryl J. KIeC~}~in" <KleppiDE~BP.com>, °Janet D. Platt" <PlattJD@I3Y.com>, "Rosanne M. Jacobsen" <JacobsRM@BP.corn>, ddonkel <ddonkel@cfl.rr.coi7~>. Collins ~~lount <Collins_mount@revenue.state.ak.us>. mckay <rr~ekayi~i.gei.net~=. Barbara F Fullmer barbara.f.fullmer@conocophillips.con~=, bocastwf ~hocastw~f~bp.com>, Charles Barker <barker@usgs.gov>, doug_schultze <doug scht~Itzc~uxtoenergy.com>. Hunk Alford <ha~~k.alford@exxonn~obil.com>, Mark Kovac ~vesnul~~eci.net>, gspt~~tfi~ <gspfoff~u~aurorapower.com>, Cregg I'v`ady <<T~ egg.nadyC'shell.com>, Fred St~~c~ <fred.steeee~r)state.sd.us>, rerotty <~-rcrotty@ch?mcom>, jej~~nes <j~j~,n~s~~i-~iur~~rahower.com>, dapa <dapa@alaska.net>, jroderick <jroderick~a gci.net>, eyancy <eyanc~ '~%~ea1-tite.net>, "James 1~1. Ruud° <james.m.ruud~eonoeophillips.com>, Brit Lively <mapalask~irci,~ik.net>, jab <jah@dnr.state.ak.us>, Kurt E Olson <k~rt_olson@.legis.state.ak.us= , buonoje ~-buonojc(~r~,bp.eom-~=. Mark Hanley <mark_hanley@anadarho.corn>, Loren lem~n~ ~~loren Icman~~r~o~~.state.~3k.us=. Julie I-Ioul< <julie_houle c~.dnr.state.ak.us>,:John W Katz <jwk~~tr~~tsso.~~rg=>, Saran .I Hill <snzan hill~dec.state.ak.us>, tablerk <tableri.~~iunoeal.conr ~, Brady <brady~ru;aaga.org>; Brian Havelock <beh@dnr.state.ak.us>, bpopp <bpopp~cUborough.kenai.ak.us>, J im ~~'h ite <jimwhiteCaatx.rr.corn>, "John S. Haworth" <johna.haworthLexxonmot~il.com>, many, <marty@rkindustriaLcom>, ghammons ~ghammons@aol.com>, rmclean <i~nclean@pobox.alaska.net>, mkm7200 <mkm72~0@aoLcom>, Brian Gillespie <ifbmg@uaa.alaska.cdu>, David L Boelens <dboelens@aurorapower.com- -, Todd I~t~rkee <TDURKEE~I~:I~~IG.com>, Gary Schultz <gary_schult7ndnr.state.ak.tis=, ~~~~ati-~~~ Rancicr <RANCLER~petro-canada.ca>, Bill Miller <Bill_Miller(u;stoalaska.com ~. Brandon C;agnun <bgagnon@brenalaw.com>,Paul Winslow ~pmwinslo~~~rcti~restoil.com >. Garr~~ Can-~>n ~~catrongr~bp.com>, Shalmaine Copeland <copelas~ rrib~~.eom>, SUZanne Allexan sallexan@helmenergy.com>, Kristin Dirks <kristin dirk~r~~~]nr.stat~.ak.us= . havrnell Zeman <kjreman@marathonoil.com>, John Tower <John.Tower@eia.doe.~~ov>, Bill Fo~~~ der <Bill_Fowler@anadarko.COM>, Vaughn. Swartz waughn.swartz~rbccm.com>; Scott Cranswick 1 of 2 10/6/2004 1:52 PM DIO 27A <scott.cranswick amms.gcw>, Brad McKim <mckimbs@BP:com> Content-"f~~pc: applicationlmsl~~~~i~d D I ~027A.doc Content-Encoding: ba5e6~ 2 of 2 10/6/2004 1:52 PM Citgo Petroleum Corporation PO Box 3758 Tulsa, OK 74136 Kelly Valadez Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 ~ Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Kay Munger Munger Oil Information Service, Inc PO Box 45738 Los Angeles, CA 90045-0738 .Mark Wedman Halliburton 6900 Arctic. Blvd. Anchorage, AK 99502 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 Soldotna, AK .99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 Robert Gravely 7681 South Kit Carson Drive Littleton, CO 80122 Richard Neahring ' NRG Associates ', President PO Box 1655 Colorado Springs, CO 80901 Samuel Van Vactor Economic Insight Inc. 3004 SW First Ave. ' Portland, OR 97201 Schlumberger Drilling and Measurements 2525 Gambell Street #400 Anchorage, AK 99503 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Jack Hakkila PO Box 190083 Anchorage, AK 99519 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Cliff Burglin PO Box 70131 Fairbanks, AK 99707 North Slope Borough PO Box 69 Barrow, AK 99723 David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, ID 83702 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 David Cusato 200 West 34th PMB 411 Anchorage, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Darwin Waldsmith PO Box 39309 Ninilchick, AK 99639 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669-7714 Bernie Karl K&K Recycling Inca PO Box 58055 Fairbanks, AK 99711 1~l i~ ~ ~4/~/O~ ~5 Temperature Log • Subject: Temperature Log From: Thomas Maunder <tom maunder@admin.state.ak.us> Date: Mon, 04 Oct 2004 09:08:35 -0800 To: Jim Rose <jimrose@dejazzd.com> CC: Jim Regg <jim_regg@admin.state.ak.us> • x`03 - ~'1 ~1 Jim, Jim Regg and I have talked regarding your request of last Thursday regarding removing the requirement for the temperature survey. The requirement was placed in the order to provide confirmation regarding the placement of the waste. We believe that the temperature log should be run to provide that confirmation. Sorry for the delay in getting back to you. I was not in the office on Friday. Also, you might check the date stamp on your fax machine. The copy of your fax I have shows it being sent on September 20, not September 30. Please call with any questions. Tom Maunder, PE AOGCC 1 of 1 10/4/2004 9:37 AM FROM :PFL.ICAN HILL OIL 8 GAS • FAX N0. :907 277 1402 ~ep. 20 2004 12:41PM P1 Pelican Mill Oil ~ 6as, InG. 4141 B Sheet, Suite 205 Arschorage, AK 99503 907-277-1401, Telephone 907-277-1402, Fax Fnx To: AOC~GC ~~~~~ Attn: Mr. Thomas Maunder From: Jim Rose Fax: 276-7542 Done ~ September 30, 2004 Tots! Pages- 2 REF E fp~ L> C Vim`°• ,~~ ~f ~ ~. Vii,, r'~? ~E;?~f'~'~ FROM :PFL•ICAN HILL OIL 8 GAS • FAX N0. :907 277 1402 ~ep. 20 2004 12:41PM P2 Pelican Hill Qil and Gas, Inc 4141 IB, Street, 5urte 2~5 Anchorage, AK 99503 907-277-1401, Telephone ~o~-Zn-Yao2, Fox .~ Mr. Thomas Maunder Alaska Dil and Ges Conservation Commission 333 West Seventh Avenue, Suite / pp Anchorage, Alaska 99501 9/30/44 Rey Pelican Hill (7il and Gas, Inc Illiamna No.1, APD 2p3-172, API 50-133-20527-00, Disposal injection Order No. 27, Rule 5: Surveillance. Dear Mr. Maunder, Pelican Hill Oil and Gas requests a variance from Rule: 5 of Disposal Injection Order No. 27 as pertaining to a required temperature survey. Pelican Hill Dil and Gas plans to plug the subject well at th® completion of the current fi&{ injection operations. Therefore, additional injection becomes extremely unlikely and the temperature Survey data will be of little value. Pelican Hill Oil and Gas requests that the aforementioned requirement for apost-injection temperature survey be removed from Disposal injection Order No. 27. Please let me know if you have any questions. I can be reached at 277-1401. Best Regards, Jim Rase ~ 4 DIO 27 Corrected -Notes t • DISPOSAL INJECTION ORDER N0.27 NOTE TO FILE September 23, 2004 At approximately 4:30 pm on September 23, 2004, I spoke with John Norman concerning Pelican Hill's correction, requested amendment and additional information concerning Disposal Injection Order No. 27 ("DIO 27"), which governs disposal operations in the Iliamna No. 1 well. DIO 27 was issued on September 16, 2004. On September 17, 2004, Pelican Hill notified the Commission via letter of issues with the order that needed clarifying. They are: 1. The perforation interval presented in Finding Number 3 of the order was incorrect. DIO 27 states that~Iliamna No. 1 was perforated from 3166' to 3181' measured depth. This figure was stated in both the order and in the Notice of Opportunity for Public Hearing. The actual perforated interval ranges from 3126' to 3147' measured depth. The 3166' to 3181' interval stated in the order and was derived from Pelican Hill's letter of re- application dated August 6, 2004. The actual perforated interval of was reported to the Commission via letter dated September 10, 2004, but was overlooked by me. 2. The maximum injection pressure limit of 1,000 psi should be removed from the order. DIO 27 Finding 8 states that "The estimated average injection pressure will be 800 psig, and the maximum injection pressure will be 1,000 psig. Injection rate expected to be 1 to 2 barrels per minute." Pelican Hill reported that the injection pressure is unknown at present, but is expected to be substantially higher than 1,000 psi. Since the order was issued, pelican hill conducted a step rate test using water at a rate of 2 bpm that had a pump pressure of 860 psi. This tends to support the 800 - 1,000psi operating range, but we have not put an upper boundary on pressure based on what we currently know. The values in DIO 27 for the estimated average injection pressure, the maximum expected injection pressure, and the expected injection rate were taken directly from the text of Pelican Hill's original application submitted on December 8, 2003. [Pelican Hill's letter of re-application dated August 6, 2004, contains the statement: "The original application dated December 8, 2003 is being re- submitted in its entirety. Nothing has changed regarding the information originally submitted by Pelican Hill."] 3. The maximum amount of allowable waste should be increased to 8,000 barrels. Pelican Hill originally estimated 3,000 barrels, DIO 27 allows 5,000 barrels, but Pelican Hill would like that maximum ceiling raised to 8,000 barrels. Page 1 of 2 9/23/2004 6:10 PM DIO 27 Corrected -Notes • John and I discussed the correction and amendments. We both agreed that they would not substantially alter the intent of DIO 27, and so Pelican Hill should be allowed to continue operations until a corrected and amended order is issued. I then sent Arlen Ehm and Jim Rose, Pelican Hill's local representatives, the following email: -------- Original Message -------- Subject: Iliamna 1 Disposal Injection Order Amendment Date: Thu, 23 Sep 2004 17:04:45 -0800 From: Stephen Davies <steve_davies@admin.state.ak.us> Organization: State of Alaska To: Arlen Ehm <arlen.ehm@alaska.net>, 'Jim Rose' <jimrose@ak.net> CC: John Norman <john norman@admin.state.ak.us>, Daniel Seamount <dan_seamount@admin.state.ak.us>, Tom Maunder <tom_maunder@admin.state.ak.us>, John Hartz <jack_hartz@admin.state.ak.us> Arlen and Jim, The AOGCC has received your correction, additional information, and requested amendment concerning Disposal Injection Order No. 27. Because the correction and amendment will not substantially change the findings, conclusions or rules of the order, you are authorized to continue operations under Disposal Injection Order No. 27 until the corrected and amended order is issued. I will be out of the office on September 24 and 27. If you have any questions, please contact the Commission at 793-1223. Sincerely, Steve Davies Petroleum Geologist Alaska Oil and Gas Conservation Commission Telephone: (907) 793-1224 Fax: (907) 276-7542 Steve Davies September 23, 2004 Page 2 of 2 9/23/2004 6:10 PM Iliamna 1 Disposal Injection Order Amendment • Subject: llianu~a I Disposal injection Order Amendment From: Stephen Davies <ste~~e da~~ies!~i~adrnin.state.ak.us=~ Date: Thu, ?3 ~e)~ SOU-) 1 ':0-3:4~ -OSOi) To::~rlen l~hm ~ _ar(en.c~hm(«'alaska.nef=, 'Jim Rose' ~jirTiroSer~i,akne-t> CC: John Norman -=johnnorrn~jn!~r)aclmin.;tatc.akus=•_ Uanicl Scatnount ~=dan ~eamount~u;~adminstate.ak.us>. Tom ~~taunder <tom_urtund~i ciadrnin.state.~ilc.us>, John Hartz_~jack harts u)adrninstate.al:.us= Arlen and Jim, The AOGCC has received your correction, additional information, and requested amendment concerning Disposal Injection Order No. 27. Because the correction and amendment will not substantially change the findings, conclusions or rules of the order, you are authorized to continue operations under Disposal Injection Order No. 27 until the corrected and amended order is issued. I will be out of the office on September 24 and 27. If you have any questions, please contact the Commission at 793-1223. Sincerely, Steve Davies Petroleum Geologist Alaska Oil and Gas Conservation Commission Telephone: (907) 793-1224 Fax: (907) 276-7542 1 of I 9/23/2004 6:05 PM Iliamna No 1 • • subject: Iliamn,l ~0 1 Front:.}ii7i IZc~~c -~:jimros~!uaknct> Datc: Tlni, ? ; Se}?'~)0-l 1 ~:?9:1-~ -000 `1"0: steee davies~~iadrnin.tate.~ku ('C: ':glen Lslnii' <=arlen.~hir~(u-~alaska_net.> Steve, Arlen forwarded me a message that you were asking for an analysis of the formation water we swabbed in from the perfs at 3126-3147. We did a chlorides test on the water and it was 40,000ppm. I passed that on to Tom in a conversation but I think he was on his way out the door. Also, we did a step rate test on the well yesterday and the formation took 2 BPM of fresh water at a surface pump pressure of 860 psi....better than indicated or expected. Jim 1 of 1 9/23/2004 4:01 PM Iliamna 1 -Formation Water Test • • Subject: Ilianu~a 1 - [~orn~ation ~~Vater Trst Nrom: Stephen L)avic~ ~~"~t~~~ da.vies~u~admin.st<ite.ak.u~== Date: Thu, ?3 Seh 2iil-l 05:;9:1 -0800 To: ~'lrlcn Fhm <arl~n.chrr~r~i:~alaska.net=, Arlen, In Jim Rose's letter of 9/22/04, he notes that Pelican Hill swabbed the Iliamna lwell in across the perforations from 3126' - 3147', and that formation water and sand were recovered. Did you happen analyze the formation water? If so, could you provide AOGCC with the results? Thanks, Steve Davies 1 of 1 9/23/2004 4:05 PM ~3 Pelican Hill Oil and 6a~ 4141 B. Street, Suite 205 Anchorage, AK 99503 907- 277-1401, Telephone 907-277-1402, Fax ~~~uV~',ir~,~ Mr. Steve Davies ~ E~ C~ V C Q Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue, Suite 100 CEP `~ ~ ~~Q4 Anchorage, Alaska 99501 Alaska Oil & Gas Cans, Commissiar~ s/22/o4 Anchorage Re: Pelican Hill Oil and Gas, Inc Illiamna No.1, APD 203-172, API 50-133-20527-00, Class II Injection Order No. 27, Issued 9/16/04 Dear Mr. Davies, I am in receipt of your 9/17/04 letter and would like to respond to your questions as follows: Findings, Pg 2, No.3: 1. The perforated interval of 3,126-3,147 was chosen because it showed some tendency for Neutron and Density crossover (and thus an indication of gas) on one of the early versions of the logs. We swabbed the well in and recovered formation water and sand. There was no indication of gas. These are the correct perfs and represent the intended injection interval. 2. I don't presently have any way to confirm the perforated interval although I am confident they are as indicated. 3. Please see the attached log clip showing the perforated interval. Findings, Pg 3, No. 8 The original application had some estimates of injection pressure based on information that is unknown to me. I did pump into the formation with the injection pump at a constant 4 GPM and charted the results (see the attached pressure chart). I can't quantitatively determine much from this exercise but it seems to indicate that we will likely exceed 1000 psi injection pressure. Rule 2, Pg 5: I think there is presently about 3,500 bbls waste. The increase in volume from "slurrying" depends, in part, on the efficiency of the process and how well the formation tolerates the injection of solids. I don't have any way to predict this at present. My feeling is that we should be able to stay under 5,000 bbls in total but I don't want to get close and have to scramble to secure approval for an increase. Please amend the Order under Rule 7 and allow up to 8,000 bbls for waste injection. Best Regards, ~~ti^~_ .~--.- Jim Rose Attachments: Iliamna No. 1 Perf Breakdown Chart, Iliamna No. 1 log clip. ray/ ' -~ _1 I~•T- ~! C -- 'I ~~ ~,~nnn1A rU~ l $5 ~ 3100 $~° G ~ - - ~ ~~ b ~ Comb 4 i ;~ '',Sandstone Neutron Por. y 6 ~ i ~ i 3150 I ~ ' f i s 86~ ,~-r-- --- density ~ ~~ I ~ ~ ~ ~~.~~ ~~ 3200 i -,__ _,-..:~«... '. . N ~ ~~~ ~~ ~ . ` I I I 1 N ~ 7 I i ~, ~_ I ~Y~ ~~+..~ 6 AM 5 :- -- -- - _, _ ~, r - -- ~ ~ _ ~ ~ F ~ 1, _-i~ r -- - i__~ '-~ ~, ~ t 8 ~ ~ . ~ _ __ - ` i r , 'r -_f- _- - ~---_ ~ Sp O +-- p0. , _ - t - ~ " Spp ~, -, .~~~ qS ~~ .- r r ,. x 4ppp ~. ._ _~ - `~~ ~ ~ _ / - -- -__ 5 .- O / ~/ ~~G ~~ r _~ - - ~3ppp ~~ / `/. ~~GO ~ ~ r f _ _ 2$00 ~ ~\ \\ ,\'. ~p _ ~~ _ - _ 2ppp ~ ~ O ~/ '~~ X00 /~. ~;~ _ ~Sp ~ ~ \ //~ // j ~ ~~i ~~ / ~'~ _ - app `%~ ,,~ ~ ~` ;, ""~~~ / _~ ~` ~- ~ ~` ~ ~`~' ! ~ ~CRAPHIC CCN ROLS CORPORATION ~~~ ~ . ~-' ~~ ~~ ~-'- ~_ 7 ~ ~N n~~ \\\~ ~ - `_ _ 1 i \ . , __._.. ` ~j \. , - - OHART N0. x`90 MP-6000 ~r TT o o-o o __o ~cn o~A ~ , `~- _ METER _ ~ /~ I I ~ o O ~ _ _ -y I ~ f L I {-. _ J~ - i i -~. ! ~ j l } ~~_~ ~ `~ __._,_ OHART PUT ON TAKEN OFF ~ ~ j i ~ ~ O O O ~O Ou-~- M M ~+ ~ ~ ~i ' ~ 1 ~,~~ ~ ~~ O ~ ~ _p ~,n, '~' LOOATION ~ ~T__'_C~`! ~_~-_ ~T< ; ~~ ~ ~~ ~~ ~ I ~ -N- ~ ~, ~'~. i V`- i ` ` ~ ~ ~ REMARKS ~ ;, ~~~ i ~ i i ~ ~~ ~ ~~ ~ ~_ _.. ~~ ~~ ~ ~ ~~ o x~ f ~ ~~~ `~ ~ ~~ ~~ ~,, Opp! ~ ~ ' ~ a~' ~ ~ V ~ ~~ ~ ~ ~~~ ~ ~ ` pp9/ "~ __ ~~ it \\ O~'J ~ % // / / ,( ~ i~~ • '~ -' '', ,~c„~ ~ ~ fi pp0~'_ ~_ ~ o~' / ~ / ~ J p --~ ~ _C,' ~ / _ v -, ~ i~ ~ ~ ,~ ~ ~,P ~\ pOS~ _, ~=` _ ` t _ ,rte / r ~ f % ~` odd ~ ecr b - - Op ~ v _~~ ~, _ p -- ppSy~ ~ ~ ~ ~ ~ ~ -- - 8 ~ _ _ _ `_ - _: , ~ b ,_ _ __ _ __ _ S -"0% 7.WZ M w ALASKA OIL & GAS COO S2R6 7540N COMMISSION FAX 9 PHONE 907-279-7433 FACSIMILE TRANSMITTAL SHEET FROM: DATE: i ~) ~~, C COMPANY: ~ : ( („~J ~"' TOTAL NO. OF PAGF,S 1N UDING COVER: FAX NUMBER: SENDER'S REFF.RENC:I~ rvuman,.. PHONE NUMBER: YOUR REFERENCE NUMBER: RE: L" URGENT ^ FOR REVIEW ^ PLEASIr COMMENT ^ PLEASE REPLY ^ FLEASE RECYCLE NOTES/COMMENTS: f r ~; :._ / d l ~~ ~ ~~ ~ AOGCC 333 WEST 7TH AVENUE, SU]TE 700 ANCHORAGE, AK 99507-3935 4471 Pelican Hill Oil and 6a 4141 B. Street, Suite 205 Anchorage, AK 99503 907-277-1401, Telephone 907-277-1402, Fax A ~~~i~~~~,~~~ Mr. Thomas Maunder Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 9/17/04 ~~~~~ V ~V ~~~' ~. s ZQQ~ At~~k~ Oil ~ C~~ G~~s= Commis~i9t! Anehor~ge Re: Pelican Hill Oil and Gas, Inc Illiamna No.1, APD 203-172, API 50-133-20527-00, Class II Injection Order No. 27, Issued 9/16/04 Dear Mr. Maunder, I reviewed the subject disposal permit and would like to clarify a couple issues. Findings, Pg 2, No. 3, The subject well was perforated from 3,126' to 3,147' MD/TVD, 4 spf. This represents the intended injection zone. The confusion arises from the original application dated 12/8/04. The data submitted by letter dated 9/3/04 shows the revised perforations (although with a typographical error). Please amend the permit to show this revision. Findings, Pg 3, No. 8, The estimated injection pressure is unknown at this time. I expect the injection pressure to be substantially higher than 1,000 psi. I can estimate injection pressure after the step rate test. Please amend the permit by removing the 1,000 psi maximum injection pressure limit. Rule 2, Pq 5, Although I expect that the total amount of waste injected into the well will be less than 5,000 bbls, we will likely have to add a substantial amount of water and bentonite to slurry the waste thus facilitating the injection. Therefore, the total amount of fluid injected into the well may necessarily exceed 5,000 bbls. Please amend the permit to allow a total fluid injection of up to 8,000 bbls. Please feel free to call at 907-277-1408 if you would like to discuss any of these issues. I may be out of the office but will be checking in for messages. Best Regards, Jim Rose Attachments: Iliamna No. 1 Completion Sketch Iliamna No. 1 ~~,~~t ~~. p'^~~ ~~ a «r~ Completion Schematic ~~ti~L~~~~~ Trading Bay, Alaska Rig: Water Resurces No.7 ELEV 204' AMSL Sec 31 Twp 9N Rng 14W Spud: Nov 4, 2003 RT 12.5' 1578' FNL 2480' FEL 14 3/4" Hole 13 318, 54.4 ppf, R-3, Casing @ 88' 12 1 /4" Hole Surface Casing 9-5/8", 32.3 ppf, H-40 9 5/8" casing cmtd to surface BTC Casing @ 560' Note: All referenced depths MD/TVD From RT 7 7/8" Hole Baker 450-237 HS packer @ 3,027' Profile Nipple @ 3,069' WLEG @ 3,082' Perfs 3,126'-3,147', 4 SPF 5 1 /2" 15.5 ppf, K-55 BTC Casing ~ CIBP @ 3,528' PBTD @ 3,528' TVD/MD Bit Jim Rose