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• Image Project Order File Gover 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. ©~ Order File Identifier Organizing (done> RE AN Color Items: ^ Greyscale Items: ^ Poor Quality Originals: ^ Other: NOTES: BY: - Maria _ Projecf Pro~o-fi-ng~~ BY: ( Maria ) ,.o.=aaa iiuimumiuii DIGITAL DATA ^ Diskettes, No. ^ Other, No/Type: Date: Date: Scanning Preparafion x 30 = BY: Maria Date: ~/ Production Scanning aa,~.~~ee~~ iiiumuiiuu OVERSIZED (Scannable) ^ M s: Other Items Scannable by a Large Scanner ~L~ its OVERSIZED (Non-Scannable) ^ Logs of various kinds: ^ Other:: 7 /s/ /s/ ~ ~ 1 _ + =TOTAL PAGES tU 7 (Count does not include cover sheet) , /~ /~ /s/ V~ IIIIIIIIIIIIIIIIIII Stage 1 Page Count from Scanned File: (count does include cov r sheet) Page Count Matches Number in Scanning Preparation: ~~YES NO BY: Maria Date: ~/~~ ~ D /s/I/ V Stage 1 If NO in stage 1, page(s) discrepancies were ound: YES NO BY: Maria Date: iii Scanning is complete at this point unless rescanning is required. ReScanned III II~~II I~III II III BY: Maria Date: /s/ Comments about this file: Quality Checked III IIIIII III Ilil II 10/6/2005 Orders File Cover Page.doc ~ ~ INDEX Disposal Injection Order 29 Happy Valley #5 1. October 2004 Unocal's Application for an Disposal Injection Order for Deep Creek Unit Happy Valley #5 2. November 15, 2004 Notice of Hearing, Affidavit of publication, a-mail Distribution list, bulk mailing 3. November 29, 2004 Unocal Ltr re: Potential Waste of Resources by Disposal Injection in the Happy Valley #5 Well in the Deep Creek Unit 4. December 1, 2004 AOGCC's ltr to Unocal re: application 5. December 7, 2004 Unocal's withdraw of Application Disposal Injection Order 29 ~5 j L.ti' December 7, 2004 Mr. Robert P. Crandall Alaska Oil & Gas Conservation Commission (AOGCC) 333 West 7th Avenue,. Suite 100 Anchorage, Alaska 99501 DEEP CREEK UNIT -HAPPY VALLEY #5 WELL DISPOSAL INJECTION ORDER APPLICATION WITHDRAWAL REQUEST Dear Mr. Crandall: Faye W. Sullivan Regulatory Affairs Coordinator Te1907.263.7685 Fax 907.263.7698 Ce11907.223.4419 e-mail sullifw@unocal.com R~~ DE ~/V~ A/as,~~ ~'.~ p 20 'Q ©~l~ r. ©4 ~n~~e ~°~~ CQ~~ . Ae ssion Union Oil Company of California, dba Unocal, submitted a Disposal Injection Order Application to the Alaska Oil and Gas Conservation Commission (AOGCC) on November 2, 2004, for the Happy Valley #5 (HV-5) well. The HV-5 well is installed on the Happy Valley "A" Pad, located within the Deep Creek Unit approximately seven miles southeast of Ninilchik, Alaska. Unocal respectfully requests that the AOGCC withdraw this Disposal Injection Order Application for the HV-5 well and vacate the December 16, 2004 scheduled hearing. Unocal may resubmit the application at a future date if and when data becomes available which better demonstrates that waste injected at HV-5 will not affect gas resources in the vicinity or up-dip of the HV-5 wellbore. If you have any questions or need additional information, please call me at (907) 263-7685. Sincerely, ~ ~ ~ ~~ Faye W. Sullivan Cc: Jody Colombie, AOGCC Unocal Alaska /Union Oil Company of California 909 W. 9'" Ave, P.O. Box 196247 Anchorage, AK 99519-6247 ~ 4 FRANK H. MURKOWSKI, GOVERNOR December 1, 2004 Mr. Gary Eller Unocal Alaska PO Box 196247 Anchorage, AK 99501 Dear Mr. Eller: Union Oil Company of California ("Unocal") submitted to the Alaska Oil and Gas Conservation Commission ("Commission") an application for disposal injection order using well Happy Valley No. 5 within the Deep Creek Unit. Unocal requested approval for the injection of Class II oil field wastes into the Beluga Formation between 4,311 feet and 4,541 feet measured depth. A hearing on Unocal's application has been set for December 16, 2004. Happy Valley No. 5 was suspended after drilling to 4,541 feet measured depth because of severe mud losses. The Commission has identified concerns and deficiencies with the confinement analysis, and construction of Happy Valley No. 5 as presented in Unocal's disposal injection order application. Outlined below are the specific concerns and areas where this application is deficient: Confinement Anal~per 20 AAC 25.252(bl and (c)(9) Unocal has indicated that mud losses are common during drilling of wells in the Happy Valley field. Happy Valley No. 5 experienced anomalous and severe losses preventing drilling below 4,541 feet measured depth, and preventing mud logs, open-hole logs, and cuttings analysis while drilling through the Beluga Formation. The lack of relevant information forces an analysis of injection zone and confinement to be based on extrapolation from offset wells and speculation. Analysis of the confining layers based on information solely from offset wells would be precedent setting and inconsistent with the rigorous engineering and geologic reviews of injection well specific information on which the Commission relies for decisions about injected fluid confinement. For this reason alone, the Commission finds it difficult imagine how it could approve disposal in this well. We note that the application also provides no modeling of fracture propagation, and only unsubstantiated hypotheses about fracturing in the confining zones. ~ ~ Mr. Gary Eller December 1, 2004 Page 2 of 2 Well Construction per 20 AAC 25.252(b) and 25.030(c)(3) A conservative review of disposal well construction is necessary where fresh water and underground sources of drinking water have been documented. The Commission (with EPA Region 10 concurrence) established an exemption in the Happy Valley area of all aquifers below 1,800 feet as outlined in Aquifer Exemption Order No. 11. Happy Valley No.S is constructed with surface casing set at 920 feet measured depth (cemented to surface) and intermediate casing set at 4,330 feet measured depth (top of cement determined from cement mapping tool at 2,400 feet). An estimated 900 feet of formation is unprotected by the shallow setting depth of the surface casing. Given the speculation about confinement and receiving interval for waste injection, it appears the shallow surface casing does not meet the intent of a conservative. well design for disposal injection. Unocal must provide additional information and justification for the Commission to continue its review of this application. A significant part of the public hearing scheduled for December 16 will be directed at evidence provided by Unocal to support a Commission finding that disposal injection into Happy Valley No. 5 will not initiate or propagate fractures through the confining zones. Should you have questions about the Commission's concerns, please contact either Bob Crandall at 793-1230 or Jim Regg at 793-1236. incerely, Daniel T. Seamount, Jr. Commissioner ~3 • i UNOCAL °-Alaska November 29, 2004 Mr. Bob Crandall Alaska Oil & Gas Conservation Commission (AOGCC) 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 J. Gary Eller Advising Completion Engineer Unocal Alaska Tel 907-263-7848 Cell 907-351-1313 Fax 907-263-7847 E-mail: ellerg@unocal.com ~' Re: Potential Waste of Resources by Disposal Injection in the Happy Valley #5 Well in the Deep Creek Unit Dear Mr. Crandall: The use of the Happy Valley #5 (HV-5) well as a Class II disposal injector in the open hole interval below the 7" casing shoe (4,331' to 4,541' MD, 4,029' to 4,183' TVD) will not in any way waste State natural gas resources. The rocks in this interval can be demonstrated through well test and log data to be devoid of gas resources capable of being produced in any quantity. The open-hole interval in well HV-5 is comprised, in part, of a series of sands that have been termed the BLG-45 sand package by Unocal. This series of sands was tested for natural gas in the Happy Valley #8 well at a location approximately 100 ft updip and 4,100 ft west of the BLG- 45 penetration point in HV-5 (see attached Cross Section Base Map, Figure 1). The HV-8 well failed to flow gas from two perforated intervals within this sand series. The impetus for testing the BLG-45 sand series in the HV-8 well was provided by some small gas shows within this interval; well log data across this interval was not particularly suggestive of a gas accumulation. There are other unnamed Beluga sands that are known to occur below the BLG-45 series within the interval exposed below the 7" casing shoe in the HV-5 wellbore (see attached Structural Cross Section, Figure 2). These sands are wholly devoid of mud log gas shows or open-hole well log signatures that might be suggestive of a gas accumulation in all wells at all points on the Happy Valley structure. Other wells that penetrate the BLG-45 and underlying sand series attest to the absence of a gas accumulation within the proposed injection interval. These other wells, including HV-10, HV-11, HV-2 and HV-3 show decreasing gas shows in a downdip direction toward the HV-5 wellbore (see again the attached Structural Cross Section, Figure 2). Thus, it is highly unlikely that a gas accumulation is present anywhere within the proposed injection interval. Union Oil Company of California / Unocal Alaska 909 West 9th Avenue, Anchorage, Alaska 99501 http://www.unocal.com • Mr. Bob Crandall, AOGCC November 29, 2004 Page 2 These data conclusively demonstrate that wastes injected into the proposed Beluga section within the HV-5 wellbore pose no threat to any potential or known gas resources in the. vicinity or updip of the HV-5 wellbore. Please contact me if I can be of further assistance. Si cerely, ~° ~~. ~~ ~ ,.~1 '~~ J*'~ary Eller Advis~g Compl on Engineer Union Oil Company of California / Unocal Alaska 909 West 9th Avenue, Anchorage, Alaska 99501 http://www.unocal.com r HV7 , ~ HAPPY V U 31-Z~ ~--~----~- ~ HU3 ~ NV10 ~ ~ ' 21 ~ ' ~=' ~ _~ ~ _~ HVB RED ~ - ._~ 1 ~ - H1/ 1 1 i +~ , H V H_V_4_ __ - -~ - = H VS ~~ ~ - - MTL_HV_~f5_Inj~rder HV9 r -314 ~~ i i i HV~ r -, - _" ~_~: .;~. _ ~ ;_~ ~ _~__ ~ r Happy Valley Field Kenai Peninsula, Alaska Cross Section Base Map BLG-45 Sand Tops Posted � LLo% 7wz STATE OF ALASKA ~ NOTICE TO PUBLISHER • ADVERTISING ORDER NO. ADVERTISING ORDER INVOICE MUST BE IN TRIPLIC( TE SHOWING ADVERTI) ING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION PART2 OF THIS FORM WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE /~ 0.02514021 /"'~ SEE BOTTOM FOR INVOICE ADDRESS F R AQ(7CC 333 W 7th Ave, Ste 100 AGENCY CONTACT Jod Colombie DATE OF A.O. November 12 2004 ° M Anchorage, AK 99501 PHONE PCN DATES ADVERTISEMENT REQUIRED: o Anchorage Daily News PO Box 149001 Anchorage, AK 99514 November 15, 2004 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed Type of Advertisement X Legal ^ Display ^ Classified ^Other (Specify) SEE ATTACHED SEND INVOICE IN TRIPLICATE TO AOGCC, 333 W. 7th Ave., Suite 100 Anchora e AK 99501 PAGE 1 OF 2 PAGES TOTAL OF ALL PAGES$ REF TYPE NUMBER AMOUNT DATE COMMENTS 1 VEN s Axle 02910 3 4 FIN AMOUNT SY CC PGM LC ACCT FY NMR DIST LIQ ~ OS 02140100 73451 2 3 `\ n 4 1 REQUISITIONED BY: ~°s.... DIVISION APPROVAL: Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of Union Oil of California ("UNOCAL") for a Disposal Injection Order to allow the underground disposal by injection of Class II oil field wastes into the Happy Valley #5 well, located in Section 22, Township 2 South, Range 13 West, Seward Meridian. Unocal by application dated November 2, 2004 and received by the Commission on November 3, 2004 has requested the Commission issue an order in conformance with 20 AAC 25.252 to allow the underground disposal by injection of Class II oil field wastes into the Beluga Sand intervals between the measured depths of 4,311 feet and 4,541 feet in the Happy Valley #5 well. The Unocal Happy Valley #5 is a suspended exploration well directionally drilled from the Happy Valley drillsite to bottomhole location 825 feet from the East Line and 2412 feet from the south Line of Section 22, T2S, R13W S.M. The Commission has tentatively set a public hearing on this application for December 16, 2004 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on December 1, 2004. If a request for a hearing is not timely filed, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please ca11793-1221. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on December 15, 2004 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the December 16, 2004 hearing. If you are a person with a disability w: attend the public hearing, please contact >rder to comment or to Published Date: November 15, 2004 ADN AO# 02514021 nchora a Dail News ~ 11~15~zoa1 g y Affidavit of Publication 1001 Northway Drive, Anchorage, AK 99508 PRICE OTHER OTHER OTHER OTHER OTHER GRAND AD # DATE PO ACCOUNT PER DAY CHARGES CHARGES #2 CHARGES #3 CHARGES #4 CHARGES #5 TOTAL 343374 11/15/2004 02514021 STOF0330 $178.12 $178.12 $0.00 $0.00 $0.00 $0.00 $0.00 $178.12 STATE OF ALASKA THIRD JUDICIAL DISTRICT Teresita Peralta, being first duly sworn on oath deposes and says that 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 form) of said newspaper on the above dates 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 to me before this date: !+ . ~ . G~ ~~ `t Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska , MY COMMISSION EXPIRES: 1 .. _ , ,, . ~ F `` "~ r '`:. ~ F ~' ..~ ~- ~ : .~=' : , ,;a ..,, `' ,, ±`~ ~~,. .. ~f: ~~~~t;ltfl~P!(«~ Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The applicati4yi of Union Oil of California ("UNOCAL") f~` a Disposal InieCtion Order td a0ow the undel-ground disposal by iniection of Class 11 oil field wastes into the Happy Valley #5 well, located in Section 22. :Township 2 South, Ranee 13 West, Seward Meridian. Unocal by application dated November 2, 2004 and ~ received by the Commission on November 3, 2004. ;~ has requ~isied the Commission issue qqn order in conformdhce with' 20 AAC 25.252 to allow the Un- derground disposal by iniection: of Class II oilfield i wastes.anto the Beluga Sand intervals between the measured depths of 4,319 feet and 4,541 feet in the Happy Valley #5 well. The Unocal Happy Valley #5 is a suspended exploration well directionally drilled from the Happy Valley drillsite'to battomhoie loca- tion 825 feet from the EasT Line and 2412 "feel from The south Line of Section 22,?25, R13W S.M.: The Commission has ientativeiv Set a public hear- ing on this application for December 16, 2004 at 9:00-am at the Alaska Oifand Gds Ctlnservotion; Commission.ot333 WesT 7th Avenue, Suite 100, An-'' chorp(age, Alaska 99501. A person mar request that the tentatively scheduled hearing be held by fPHne a written request with the. Commission no later Than 4:30 pm on pecember 1,.2004. If a request fbr a hearing is net timely filed, the Commfssion:maY consider. the issuanceof an br= der without a hearing. To learn .if the'Comrnissioq will hold the public hearing, please Eciti 793.122E 9n addition, a persori may submit written-com- ments regarding this application to the Alaska Oil and'Gas Conservation Commission'at 333 West 7th. Avenue, &uite 100, Anchorage, Alaska 94501: Writ- ten comments must be received no Iptec than 4:30 pm drr December 75, 2004 except That if The Com- mission decides Td` hold a public hearing, written protesf or" comments must'be tetetved no later than the eanclasion of The Deceiber Ib, 2004'bear- ing. If you are a person with a-disabllitY who may need.. special accommodations in.order to comment onto. attend the public hearing, please cdntact 1odY Co- lombie at 793-1221. John K. Morman Chairman. ADN AO# 02514021 Publish: November l5, 2004 RE: Notice Subject: RE: Notice From: legalads <legalads@adn.com> Date: Fri, 12 Nov 2004 13:54:56 -0900 To: Judv C~~l~~mhie <jody_ct~lombie~~i;admi~state.ak.us-= Hi Jody: Following is the confirmation information on your legal notice. Please let me know if you have any questions or need additional information. Account Number: STOF 0330 Legal Ad Number: 343374 Publication Date(s): November 15, 2004 Your Reference or PO#: 02514021 Cost of Legal Notice: $178.12 Additional Charges Web Link: E-Mail Link: Bolding: Total Cost to Place Legal Notice: $178.12 Your Legal Notice Will Appear On The Web: www.adn.com: ~ixXX Your Legal Notice Will Not Appear On The Web: www.adn.com: Thank You, Kim Kirby Anchorage Daily News Legal Classified Representative E-Mail: legalads@adn. com Phone: (907) 257-4296 Fax: (907) 279-8170 From: Jody Colombie Sent: Friday, November 12, 2004 10:21 AM To: legalads Subject: Notice «File: Ad Order form.doc»«File: HV5 DIO public notice.doc» Please publish on Monday. 1 of 1 11/12/2004 3:18 PM 02-902 (Rev. 3/94) Publisher~ginal Copies: Department Fiscal, Departm~eceiving AO.FRM STATE OF ALASKA NOTICE TO PUBLISHER ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLI( ATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION PART 2 OF THIS FORM WITH ATTACHED COPY OF A 0.02514021 " ORDER ) / ~ ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE SEE B©TTOM FOR INVOICE ADDRESS F AOGCC AGENCY CONTACT DATE OF A.O. R 333 West 7'h Avenue, Suite 100 ° Anchorage, AK 99501 PHONE PCN M 907-793-1221 DATES ADVERTISEMENT REQUIRED: o Anchorage Daily News November 15 2004 , PO Box 149001 Anchora AK 99514 e THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS g , ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: AFFIDAVIT OF PUBLICATION United states of America REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. division. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. Before me, the undersi ned, a nota g ry public this day personally appeared ATTACH PROOF OF PUBLICATION HERE. who, being first duly sworn, according to law, says that he/she is the of Published at in said division and state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the 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, Notary public for state of My commission expires 02-901 (Rev. 3/94) AO.FRM • 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 j6 //~ Barrow, AK 99723 CO` ~./~~ ~ Notice ~ ~ Subject: Notice From: Jody Colombie <jody colombie@admin.state.ak.us> Date: Fri, 12 Nov 2004 10:20:13 -0900 "I'o: un~i~~Yosed-reci~iienis:; BCC: ~~ngela Webb <angi~_webb@admin.stat~.ak.us -, Cynthia B ~1civ~r t~renmcivercradmin.statc.~~k.us> Please publish. _ -_ _ _ 'Content-Type: application/msword HVS DIO~ubtic_notice.doc '; Content-Encoding: base64 _ _ _ __ 1 of 1 11 / 12/2004 10:21. AM Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of Union Oil of California ("UNOCAL") for a Disposal Injection Order to allow the underground disposal by injection of Class II oil field wastes into the Happy Valley #5 well, located in Section 22, Township 2 South, Range 13 West, Seward Meridian. Unocal by application dated November 2, 2004 and received by the Commission on November 3, 2004 has requested the Commission issue an order in conformance with 20 AAC 25.252 to allow the underground disposal by injection of Class II oil field wastes into the Beluga Sand intervals between the measured depths of 4,311 feet and 4,541 feet in the Happy Valley #5 well. The Unocal Happy Valley #5 is a suspended exploration well directionally drilled from the Happy Valley drillsite to bottomhole location 825 feet from the East Line and 2412 feet from the south Line of Section 22, T2S, R13W S.M. The Commission has tentatively set a public hearing on this application for December 16, 2004 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on December 1, 2004. If a request for a hearing is not timely filed, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please ca11793-1221. In addition, a person may submit written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on December 15, 2004 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the December 16, 2004 hearing. If you are a person with a disability w: attend the public hearing, please contact Published Date: November 15, 2004 ADN AO# 02514021 . ~.~ 1~~ D/L~/~ _ __ _..y. _. __u _ __ _ ~ ~.- order to comment or to Notice of Hearing Subject: Notice of Hearing From: Jody Colombie <jody colombie@admin.state.ak.us> Date: Fri, 12 Nov 2004 10:20:54 -0900 To: undise~osed-recipients:, BCC': Robert E Mintz ~=rt_~hcrt_mintz~i~la~~~.stat~.ah.u~=~, Christir~~ Harlsc-il ~c.hansen<<<:i~~~~c~.stat~.ok.u~~-, -['errie }fubhle °~-hubhlctl~ri:bp.c~~m>. S~~ndra Stc~~~i~~an ;Step-~~maSD~crBP.com>, Scott ~~ C'ammv ~I-a~~lor ~=stavlor~ualaska.nct~==, stanckj <stanekj~u;unocal.com -, ecola~~~ "ecola~~~~~iin~stee~.org?. roscragsdale <roscragsdale@~rci~'.net==, tr~~ljrl ~trn~jrl r~i~aoLcum= , jt~riddlc ~=jbriddle~a'marathof~oil.c<>m-°_ ruckhill <rockhill~uao~a.c~r~-', shane~~ ~shane~~f~r~t~-ergreenga~.c~~ir~= . jdarlingt~~n <;jclarlirl~~t~n~u.torestofl.ct~m~. ncls~m knelsun'c~;petroletlmne~~~s.eoi~~:-, cboddv <cboddyu;usibclli.con~ ~, `Viark Dalton <-mark.dalton~lulrinc.com>, Shannon Donnelly ~-shanni~n.dunncll~~~i-conocophillips.com' . "'~'Iark P. 1'~~orCeSter" _--mark.~.~~~or~~ster~a c~noei~phillips.c~~i~1>, ~~Ic17-~~ C. Dcthlefs~~ ~~-jeny.c.dethlets~~t~conocophillips.eom: ~, Bob ~bob(~inletkceper.or~r=. ~ti~d~~ ~~_ti~°d.~~t.dnr.state.ak.us=~, tjr <tji-@dnr.~t~it~.~lku~ =. bhritch ~'L,brit~h~cial~~ska.net='. mjnelson <_mjn~lson~~i purvin~erti.com=~, C'harles(3'Donnell ~-eharles.o'donnelli~! ~ cco.com%. "Randti~ L. Skillern" =SkillcRL(~~ BP.~om ~, "Deborah J. Jones" JonesD6~u.BP.com=~ "Paul G. Hyatt" ~ -hvattp~iu;BP.com -. ~~SteVC'n R. Rossberg~~ <RossbeRSlu:BP.com>. Lois ="lois(u.inletkeepcr.org>, Dan Bross ~~ktzacnews~a:~kuar.ur~- ,Gordon Puspisil '=PospisG(iBP.cK>>7~~ _ "Francis S. Sommer" ~~-SommcrFS~u,BP.com:, 1~~tikcl Schultz ~1~Jikcl.Schultz(~i;BP.com-=. "l~ick~~'. Glo~~er" -~~-Glo~~erN~~~~ciBP.co~7~= "Daryl J. Kleppin~~ -:KleppiDl-;I~iBP.~orl~'=. "Janet D. Platt" ~~~=PlattJD~'BP.com:~, ~~Rosannc ~'l~i. Jacoh~c~n" -JacobslZlJ(u BP.com=-, ddonkel '-ddonkel<<i cfil.rr.com= ,Collins Mount ~collins_nx>unt~u:rc~~enue.state.ak.us==. mcka~~ <~_il~cka~r(crgci.nct>, Barbara F Fullmer ~E~~a~hara.f.tulln~er<<~~coni~eophillihs.com=, boeast~~~f~bocastti-~flc~bp.eom>, C"l~arles Barker <b~~rkerC;usgs.vo~ =~, dou~schulbc ~=-dou~schultre~xtoener~.;v.com>, Hank ~~lford <h~mk.alfrn-d~.~zcx~onnwbil.eom>. 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Haworth" <-john.s.ha~~~urth~ri-e~xi~mT~obil.con~=, m~u~ty --marty~rcirkindustriaLcom==, ghammons <~:ghamn~ons!c~.aoLcom- . rm~l~an <~rmclean~pobo~.alaska.net>, mkm72t1(1 <rnkm72(N)lu?aoLcom= ~, Bruin Gillespie <itbmb~uaa.alasku.odu=>, Da~~id L Boclcns <dboclens~a::aurorapower.com =, Todd Durkee <TDURKE~~a.KMG.com -. Gary Scht~ly ~ nary schulti(u;dnr.stat~.ak.us-~~_ «'ati~ie Railci~r <RANCIFIZ~ci;petro-Canada ~,a=~. Bill !Idler ~'-Bill It~liller(a;xtoalaska.com=~, Brandon Ga<~non ~~ bga~~non'~Lbrenala~~-.com='. Paul ~~%inslow <pm~winslo~~(utorestoil.com>. Gat~t-y Catron eatron~~r@bp.eom ~_ Sharmainc C'upcland ~~ copcJ~~s~~~c~;bp.cum->. Kristin Dirks <kristin_dirks~~r:dnr.statc.ak.us= , Ka~~~rll Zeman ~=kjrcman~u;marathonoil.com~-°. Joh~l To~~~~er <John.To~wcr(a,'cia.doe.gov>, Brll Fow icr <Bill_Fo~~ ler~u anadarko.CO!~J=~~, Vaughn Sin artz -vau~~hn.swartz@rbccm.com>, Scott Cranswick <scott.cranswi~k~zi,~~~ms.~ov>, Brad R~IcKii1~ <mckimhs<<i~.BP.com-, Ste~~e Lambe <Iambes@unocal.com=~ 1 of 2 11/12/2004 10:21 AM Notice of Hearing • _._ __ __ Content-Type: application/msword 'HVS DIO~ublic_notice.doc ,Content-Encoding• base64 2 of 2 11/12/2004 10:21 AM Notice Subject: Notice From: Jody Colombie <jody colombie@admin.state.ak.us> Date: Fri, 12 Nov 2004 10:21:39 -0900 'I'o: L~~~al .ads ;~~nch~~ra~rc Daily News <legalads~adn.co~r~-~ Please publish on Monday. __.. __ Content-Type: application/msword IAd Order form.doc Content-Encoding: base64 ___._._ __ Content-Type: application/msword HV5_DIO~ublic_notice.doc Content-Encoding: base64 __ lofl 11/12/2004 10:21 AM *1 a • UNOCAL zb -~Alwska APPLICATION FOR A DISPOSAL INJECTION ORDER DEEP CREEK UNIT, HAPPY VALLEY #5 „~~.~: OCTOBER 2004 • • • APPLICATION FOR A DISPOSAL INJECTION ORDER. DEEP CREEK UNIT, HAPPY VALLEY #5 WELL ~~~'~ '' ~ ~IJi~. OPERATED BY UNION OIL COMPANY , This application was prepared in accordance with the requirements of Alaska Oil and Gas Conservation Commission (AOGCC) Statute 20 AAC 25.252, Underground Disposal of Oil Field Wastes and Underground Storage of Hydrocarbons effective November 7, 1999. Introduction Union Oil Company (Unocal) is applying for a disposal injection order to allow for the underground disposal of oil field .wastes in the Deep Creek Unit (Section 22, T2S, R13W, Seward Meridian). The injection order would. approve disposal of Class II oil field wastes via injection through the Unocal Happy Valley #5 well into- Beluga Sand intervals from 4,311 to 4,541 feet MD. The Happy Valley #5 well is a suspended exploration well which will be converted to a Class II well suitable for the disposal of oil field wastes as defined in 40 C.F:R. 144.6(b) (USEPA, 1998): Unocal has performed analyses that demonstrate that the proposed disposal operation will not allow the movement of oil field wastes from the Beluga Sand into sources of freshwater. Deea Creek Unit • The Unocal Happy Valley #5 well in the Deep Creek Unit (DCU) is located on the Kenai Peninsula approximately six miles east of the city of Ninilchik (see Figures 1 and 2). Twelve other wells have been drilled in the DCU besides the Unocal Happy Valley #5 as of October 27, 2004. Two of these have been permanently abandoned, one has been proposed as a Class II~UIC.disposal candidate, four have been suspended pending further evaluation, and five await installation of a gas pipeline. There are currently no producing wells in the DCU. Table 1 summarizes the status of wells within the DCU as of October 2004. Table 1 -Wells Within the Deep Creek Unit Well Spud Date Perforated Interval MDR Perforated Interval SSTVD' Current Status Standard Oil Dee Creek #1 3/19/1958 N/A N/A Plu ed and abandoned Su erior Oil Ha Valle #31-22 9/9/1963 NIA N/A Plu ed and abandoned Unocal NNA #1 12/17/2001 6,182' - 9,647' 5,495' - 8,954' Class II dis osal candidate Unocal Ha Valle #1 6/17/2003 7,978' -10,730' 6,374' - 8,826' Awaitin as i eline Unocal Ha Valle #2 7/15/2003 6,784' -10,052' 5,673' - 8,90T Awaitin as i eline Unocal Ha Valle #3 2/3/2004 9 228' -10 678' 7 922' - 9,365' Sus ended Unocal Ha Valle #4 2/6/2004 8,854' - 9 888' 8,057' - 9 070' Sus ended Unocal Ha Valle #5 2/8/2004 4 330' - 4541' 3 288' - 3 443' Class II dis osal candidate Unocal Ha Valle #6 4/7/2004 10 854'-10 882' 8 728' - 8 756' Sus ended Unocal Ha Valle #7 6/15/2004 9 998' -10 018' 7 999' - 8 018' Sus ended Unocal Ha Valle #8 7/20/2004 5 235' - 8 581' 2 73T - 5 695' Awaitin as i eline Unocal. Ha Valle #9 9/13/2004 N/A N/A Not et erforated nocal Ha Valle #10 9/27/2004 N/A N/A Not et erforated L~ 1 -The "perforated interval" specified for well HV-5 is actually the open-hole interval below the 7-inch casing shoe. Disposal Injection Order Application - HV-5.doc November 2, 2004 Application for a Disposal Injectio~rder -Union Oil Company • Page 2 of 7 • Local, low-cost disposal of up to 3,000 barrels per day of produced water and drilling mud slurry is necessary to have economic production of gas and conservation of resources from wells within the DCU. Permit Application The following summarizes the contents of the Happy Valley #5 permit application as they apply to the requirements found in 20 AAC 25.252 (c). Complete language for 20 AAC 25.252 is included in Appendix A of this document. (1) Location plat. Figure 3 shows the location of wells (i.e., disposal and storage wells, abandoned or other unused wells, production wells, dry holes, or any other wells) within one-quarter mile of the Happy Valley #5 well. The surface location of all of the Happy Valley wells lies within one- quarter mile of Happy Valley #5 since they were all drilled from the same gravel pad. However, the top of the proposed disposal interval in well Happy Valley #5 is 4,311 feet MD (4,014 feet TVD). Happy Valley wells #2, #3, #4, and #7 all lie within one-quarter mile of Happy Valley #5 at the depth of 4,014 feet TVD, as shown in Figure 3. The other Happy Valley wells reach this depth beyond one-quarter mile from the Happy Valley#5. (2) List of operators and surface owners. • Union Oil. Company is the sole operator within pone-quarter mile radius of the Happy Valley #5 well. There are two surface owners within pone-quarter mile radius of the Happy Valley #5 well: the Ninilchik Native Association Inc. and Ms: Loretta J~. Throop. (3) Notification of operators and surface owners. The attached affidavits (Attachment 1) certify that Ms. Loretta J. Throop and the Ninilchik Native Association, Inc., the sole surface owners within pone-quarter mile radius, have been provided a copy of this application for the disposal of Class II oil field wastes in the Happy Valley #5 well. (4) Geologic Data. The proposed injection interval in well Happy Valley #5 is Beluga Formation sands that occur from 4,311 to 4,541 feet MD (4,014 to 4,183 feet TVD). The proposed open-hole injection interval is likely comprised of predominantly poorly consolidated sandstone interbedded with siltstone and claystone with lesser amounts of thin, interbedded ash and coals. These observations are made by correlating the proposed injection interval in Happy Valley #5 with offset wells Happy Valley #1, #2, #3, and #4, as illustrated in the structural cross-section shown in Attachment 2. It is not possible to determine the exact strata which comprise the proposed injection interval in Happy"Valley #5 since that interval was neither logged with convention open-hole logging tools or mud logs, as severe mud losses in the 6[ -inch hole section prevented any drill cuttings from reaching the surface. (Prior to encountering this thief zone, 7-inch casing was successfully run and cemented to 4,300 • feet MD in Happy Valley #5 without any notable losses.) The proposed injection interval is overlain by more interbedded sand, silt, .shale, clay and coals of the Beluga formation. Disposal Injection Order Application - HV-5.doc November 2, 2004 Application for a Disposal Injection Order -Union Oil Company • Page 3 of 7 • Fine-grained, low permeability lithologies such as clay, shale and siltstone predominate,. suggesting that vertical migration of injected fluids through matrix permeability is likely impossible. Additionally, there are numerous thin clay layers and coal seams that are expected to provide excellent barriers to fracture propagation beyond the injection interval. The lack of open-hole logs in Happy Valley #5 makes it difficult to determine precisely where the mud losses were going; the best we can do is speculate based on lithologies observed in the offset wells. Attachment 2 shows clearly the presence of some thick sand bodies near the base of the proposed injection interval, as seen in wells Happy Valley #2 and #4. It is possible that similar sands in Happy Valley #5 broke down and took the mud losses. Beluga sands are known to be loosely consolidated, and once broken or fractured would be unlikely to heal. An alternate hypothesis is that the mud was lost to natural fractures within coal seams. The cross section (Attachment 2) shows the presence of numerous thin (i.e. 2 to 5 feet thick) coal seams within the injection interval, but it is impossible to determine if these are in fact the mud thief zones. (5) Logs. No open-hole logs were run in well Happy Valley #5. The open-hole logs from other Happy Valley wells used to construct the structural cross-section in Attachment 2 have previously been submitted to the AOGCC. (6) Demonstrating mechanical .integrity of casing and tubing. • The Happy Valley #5 wellbore is constructed in a manner that is consistent with the requirements of 20 AAC 25.412. Along with this disposal injection application, Unocal is submitting a sundry application to install 3%z" tubing in Happy Valley #5 to facilitate Class II disposal operations. A proposed wellbore schematic diagram and a description of the construction of the Happy Valley #5 well are shown in Attachments 3 and 4. In accordance with 20 AAC 25.412(b), the 3%-inch tubing planned in well Happy Valley #5 is rated to a burst pressure of 10,160 psi, which is substantially higher than the maximum anticipated injection pressure of 1,200 psi. The existing packer is located at 4,180 feet MD, which is 131 feet above the uppermost portion of the proposed disposal interval. Schlumberger's Slim Cement Mapping Tool (SCMT) was run in the Happy Valley #5 well in October 2004 to determine the adequacy of the cement sheath in the 7-inch casing. The log was run from the top of the packer at 4,180 feet MD up to 700 feet MD. .The SCMT shows that cement quality is excellent up to a depth of 2,400 feet MD. This is easily sufficient cement to prevent movement of fluids behind the 7" casing from the disposal interval at 4,311 to 4,541 feet MD. A copy of the SCMT log in well Happy Valley #5 is included as Attachment 5. The procedure for testing the mechanical integrity of the casing and tubing after receiving the disposal injection order is provided in Attachment 6. As per 20 AAC 25.412(e), notice of a mechanical integrity test will be made prior to beginning injection to allow a representative of the Commission to witness the test.. Furthermore, as per 20 AAC 25.420(a), Unocal shall provide the Commission with 10 days notice before beginning injection operations into the Happy Valley #5. n U Disposal Injection Order Application - HV-5.doc November 2, 2004 Application for a Disposal Injectio~rder -Union Oil Company • Page 4 of 7 • (7) Description of oil field wastes to be injected. This Class II well will be primarily used for the injection of formation fluids (ex: produced water, natural gas condensates, etc.) from nearby gas production wells, with a secondary purpose being the disposal of exempt drilling and workover wastes. Unocal requests permission to dispose of approved Class II fluids from other Unocal operated fields as well.. These fluids are completely compatible with fluids in this formation.. Typical Class II wastes requested for injection include: drilling, completion, workover, and production fluids, glycol. dehydration. wastes, rig wash, drilling mud slurries, tank .bottoms, NORM scale, precipitation within containment areas, and other approved Class II wastes. The above listed Class II wastes would be generated from drilling, completion, workover, and production operations. Current projections estimate that a maximum of 3,000 barrels per day of fluids will be injected. (8) Estimated pressure. The estimated average injection pressure will be 400 psig and maximum anticipated injection pressure will be 1,150 psig. The engineering basis for these estimates is discussed in the next section, "Evaluation of confining zones". (9) .Evaluation ~of confining zones. , Severe mud losses were encountered during the drilling of well Happy Valley #5 beginning at 4,400' MD (4,080' TVD) with full loss of mud circulation occurring at 4,433' MD (4,104 • TVD). Estimated pressure applied to the formation when circulation was lost was 10.1 ppg EMW. Prior to drilling through this loss interval, aleak-off test was achieved to 12.1 ppg EMW at a depth of 4,370' MD (4,058' TVD). The mud losses were so severe that drilling operations had to be suspended after drilling to a total depth of 4,541 feet MD. The interval from 4,330 to 4,541 feet MD was left uncased, and it is into this interval that Unocal proposes to conduct disposal operations. Evaluation of the confining layers in Happy Valley #5 consists of examination of numerous leak-off tests that were conducted in the vicinity of the proposed disposal interval. The evaluation shows that there exists a trend of surprisingly weak Beluga formations overlain by substantially stronger Beluga formations at a depth of 4,000 to 4,100 feet TVD. The uncased portion of well Happy Valley #5 cuts through a particularly weak formation which accounts for the substantial mud losses during drilling. Offsetting leak-off test data in wells Happy Valley #3 and #1 verify that substantially stronger formations exist just 30 to 90 feet above these weak zones. In all, the evaluation .provides reasonable confidence that fractures will not propagate through the confining zones that might enable the oil field wastes to enter freshwater strata. Figure 4 shows leak-off test data gathered from four Happy Valley wells over the interval from 4,000 to 4,110 feet TVD. The vertical bars show the total length of. Beluga formation that was exposed for each leak-off test. The upper end of the vertical bar typically represents the casing shoe. while the lower end represents the total depth drilled prior. to conducting the leak-off test. For instance, the test conducted in well Happy Valley #3 (i.e. the-green line in Figure 4) identified the leak-off point to be 15.5 ppg equivalent mud weight (EMW). The interval that was open to leak-off during this test was the interval from 4,014 • to 4,055 feet TVD with the casing shoe being at 4,014 feet TVD and the depth drilled being 4,055 feet TVD. For well Happy Valley #5, three different curves are presented. The Disposal Injection Order Application - HV-5.doc November 2, 2004 Application for a Disposal Injection Order -Union Oil Company • Page 5 of 7 . uppermost curve is the first leak-off test that was conducted after drilling out of the 7-inch casing shoe; the second curve is a leak-off test that was conducted after a cement squeeze operation; and the last being the point where full mud returns were. lost. Figure 4 illustrates the trend of rapidly decreasing formation integrity over a relatively short vertical section: There is a reasonable expectation of achieving aleak-off test in excess of 15 ppg EMW above 4,020 feet TVD. In wells Happy Valley #3 and #1, leak-off tests of 15.5 ppg and 17.3 ppg EMW were achieved. Below 4,020 feet TVD the formation integrity rapidly diminishes. The leak-off test in well Happy Valley #4 was 13.9 ppg EMW, and the highest leak-off achieved in-well Happy Valley #5 is 12.1 .ppg EMW. On the right-hand side of Figure 4 the 7-inch casing shoe in well Happy Valley #5 is graphically depicted as occurring at 4,028 feet TVD. Figure 5 summarizes Unocal's assessment of confining strengths in well Happy Valley #5. Primary vertical containment for injected fluids is provided by the strong Beluga intervals tested in wells Happy Valley #3 and Happy Valley #1 at a depth of 4,014' TVD. Maximum allowable injection pressure in Happy Valley #5 is the equivalent of 90% of the measured leak-off pressure in well Happy Valley #3, which is the weaker of the two. leak-off tests at 4,014 feet TVD. Average injection pressure is calculated by assuming that injection occurs, at least initially, into the formation at 4,104 feet TVD where full returns were lost. Unocal estimates the average injection pressure to be 400 psi and the maximum injection pressure to be 1,150 psi assuming 8.5 ppg injection fluid density. Other containment intervals exist to help protect freshwater aquifers in the event that the primary containment fails. For instance, in the event that the primary containment fails, the secondary containment zone at 2,936 feet TVD would serve to protect freshwater aquifers. Failure of the primary containment interval would be accompanied by a notable injection pressure anomaly. Specifically, a trend of increasing injection pressure followed by an abrupt decrease in injection pressure could signify that the containment interval at 4,014 feet TVD has potentially been breached. If an unexplained pressure anomaly occurs during disposal operations, Unocal. will cease disposal and conduct diagnostics to determine whether a failure has occurred. For instance, athrough-tubing temperature or tracer log could be run to determine whether there is fluid movement behind the 7-inch casing. (10) Standard Laboratory water analysis. No water sample is available from the Beluga Formation in the .Happy Valley area. Formation water salinity calculations were made in the Unocal. NNA #1 and the Standard Oil Deep Creek Unit #1 wells which penetrate the same structure as the Happy Valley #5. A plot of calculated formation water salinity is presented in Attachment 7. This is the same formation water salinity profile .that was submitted in Unocal's Aquifer Exemption application of August 4, 2004. The estimated TDS of waters in the Beluga Formation at Happy Valley #5 at 4,014 to 4,183 feet TVD is 5,000 to 6,000 ppm. (11) Freshwater exemption. The freshwater aquifer exemption application for the Deep Creek Unit prepared in accordance with 20 AAC 25.440 was submitted to the AOGCC on August 4, 2004. In that application, Unocal requested that the depth of the aquifer exemption interval in the Happy Valley area be set at 1,800 feet TVD. The proposed disposal interval in Happy Valley #5 is Disposal Injection Order Application - HV-5.doc November 2, 2004 Application for a Disposal InjectionT3rder -Union Oil Company ~ Page 6 of 7 substantially below that. The entire length of the Happy Valley #5 wetlbore also lies within the acreage specified for exemption. (12) Well report for disposal zone. Figure 3 shows that four wells penetrate the Beluga. Formation at 4,028 feet TVD, the top of the proposed disposal interval, within one-quarter mile of Happy Valley #5. These four are the Happy Valley #2, #3, #4, and #7 wells. The construction of each of these wellbores in the vicinity of the proposed disposal interval is discussed below. Happy Valley #2 was spudded July 2003. A wetlbore schematic is presented in Attachment 8. In well Happy Valley #2, the proposed disposal interval is isolated by a 3%2" liner set from 2,996 to 10,215 feet MD. A SCMT log -was run in this 3%2-inch liner on August 13, 2003. The top of cement was identified at 3,600 feet MD (3,400 feet TVD); therefore cement is adequate over the entire proposed disposal interval.. The 31/z-inch casing run in well Happy Valley #2 is rated to a burst pressure of 10,160 psi and. a collapse pressure of 10,530 psi. This is easily sufficient to withstand any loads imparted by disposal into well Happy Valley #5. Happy Valley #3 was spudded February 2004. A wetlbore schematic is presented in Attachment 9. In well Happy Valley #3, the proposed disposal interval is isolated by a 7- • inch intermediate casing string set from 4,256 feet MD (4,014 feet TVD) to surface, which is at the top of the proposed disposal interval in well Happy Valley #5. No cement evaluation log was run in the 7-inch intermediate casing string, but records indicate that a good cement job was achieved with no losses encountered during cementing. The 7-inch casing shoe in well Happy Valley #3 was subsequently tested to leakoff with 15.5 ppg equivalent mud weight (EMW). .This leakoff test of the 7" casing shoe exceeds the maximum anticipated pressure that will be applied during disposal operations in well Happy Valley #5. Therefore, cement is adequate in Happy Valley #3 to prevent upward migration of disposal fluids out. of the proposed disposal interval. The 7-inch casing run in well Happy Valley #3 is rated to a burst pressure of 7,240 psi and a collapse pressure of 5,410 psi. This is sufficient to withstand any loads imparted by disposal into .well Happy Valley #5. The 3%- inch casing in Happy Valley #3 is rated to a burst pressure of 10,160 psi and a collapse pressure of 10,530 psi, which is also sufficient to withstand any loads imparted by disposal into well Nappy Valley #5. Happy Valley #4 was spudded February 2004. A wetlbore schematic is presented in Attachment 10. In well Happy Valley #4, the upper portion of the proposed disposal interval is isolated by a 7-inch intermediate casing string set from 4,079 feet MD (4,044 feet TVD) to surface. No cement evaluation log was run in the 7-inch intermediate casing string, but records indicate that a good cement job was achieved with no losses encountered during cementing. The 7-inch casing shoe in well Happy Valley #4 was subsequently tested to leakoff with 13.9 ppg equivalent mud weight (EMW). This leakoff test of the 7" casing shoe nearly equals the maximum. anticipated pressure that will be applied during disposal operations in well Happy Valley #5. Therefore, cement is expected to be adequate in Happy Valley #4 to prevent upward migration of disposal fluids out of the proposed disposal interval. The 7-inch casing run in well Happy Valley #4 is rated to aburst pressure of 7,240 psi and a collapse pressure of 5,410 psi. This is sufficient to withstand any loads imparted by disposal into well Happy Valley #5. The 3'h-inch casing in Happy Valley #4 is rated to a burst pressure of 10,160 psi and a collapse pressure of 10,530 psi, which is also sufficient to withstand any loads imparted by disposal into well Happy Valley #5. Disposal Injection Order Application - HV-5.doc November 2, 2004 Application for a Disposal Injection~rder-Union Oil Company ~ Page 7 of 7 Happy Valley #7 was spudded February 2004. A wellbore schematic is presented in Attachment 11. In well Happy Valley #7, the top of the proposed disposal interval is isolated by a 9] -inch intermediate casing string set from 4,331 feet MD (4,030 feet TVD) to surface. No cement. evaluation log was run in the 9] -inch intermediate casing string, but records indicate that a good cement job was achieved with no losses encountered during cementing. The 9] -inch casing shoe in well Happy Valley #7 was subsequently tested to 12.5 ppg equivalent mud weight (EMW). This was not a full leak-off test but merely a formation integrity test, therefore this does not represent the full strength of the 9] -inch casing shoe. This test of the 9] -inch casing shoe in Happy Valley #7 exceeds the average anticipated pressure during disposal operations in Happy Valley #5. It is reasonable to conclude that the cement is adequate in Happy Valley #7 to prevent upward migration of disposal fluids out of the proposed, disposal interval. The 9] -inch casing run in well Happy Valley #7 is rated to a burst pressure of 5,750 psi and a collapse pressure of 3,090 psi. This collapse rating of the 9] -inch casing is of some concern. As long as there is adequate internal hydrostatic column to help resist collapse loads, the 9] -inch casing should be sufficient to withstand any loads imparted by disposal into well Happy Valley #5. It should be pointed out that the 9] -inch casing is also lapped by the 7-inch liner up to a depth of 4,182 feet MD (3,907 feet TVD), which will offer added collapse resistance across the disposal interval. The 7-inch drilling liner in Happy Valley #7 covers the entire proposed disposal interval in Happy Valley #5. The cement in this 7-inch drilling .liner is poor, so there is potential for external pressure being applied on the 7-inch liner due •to disposal .operations in Happy Valley #5. However, the 7-inch drilling liner is rated to a' burst pressure of 7,240 psi and a collapse pressure of 5,410 psi, which is sufficient to withstand any. loads imparted by disposal into well Happy Valley.#5. Prevention of Waste . One of the charges of the AOGCC is to prevent waste of resources within the State. The proposed injection interval in Happy Valley #5 lies between Beluga sands that exhibited gas shows and were tested in well Happy Valley #8. The structural cross section (Attachment 2) shows the position of -those tested sands relative to the proposed injection interval. In -Happy Valley #8, the Beluga sand approximately 100 feet above the proposed injection interval was tested tight and the sand approximately 100 feet below flowed gas. However, Happy Valley #5 is approximately 180 feet downdip of Happy Valley #8. There are no demonstrable gas shows within the proposed injection interval in Happy Valley #5 or its stratigraphic equivalents in any of the offset wells, suggesting that there is no chance that injection will in any way jeopardize potentially gas-bearing zones within the immediate area. It is very unlikely that fluids disposed of in the proposed injection interval will be able to migrate up or down by way of fracture or matrix permeability to jeopardize the adjacent gas-bearing strata. Unocal attests that no waste of natural resource of the State of Alaska will. occur. by approval of the proposed disposal interval in the Happy Valley #5 well. In addition, injection of drilling wastes -into the formations penetrated by the Happy Valley #5 well will not compromise any of the known gas-bearing reservoirs in the Happy Valley field. Conclusion Unocal trusts that this application meets the requirements for a Disposal Injection Order as outlined in 20 AAC 25.252. Disposal Injection Order Application - HV-5.doc November 2, 2004 t List of Tables and Figures F Figure 1 -Cook Inlet Regional Overview Figure 2 -Happy Valley #5 and Local Vicinity Figure 3 -Wells within One-Quarter Mile. of the Happy Valley #5 Figure 4 -Leak-Off Test Data at (4,000' TVD in the Happy Valley Area Figure 5 -Happy Valley #5 Fluid Containment Calculations Attachments Attachment 1 - Affidavit of Notification of Surface Owners Attachment 2 - Structural Cross section Attachment 3 - Schematic Diagram of the Happy Valley #5 (Proposed) Attachment 4 - Description of Wellbore Construction for Happy Valley #5 .Attachment 5 - Slim Cement Mapping Tool (SCMT) Log in Happy Valley #5 Attachment 6 - Mechanical Integrity Test Procedure Attachment 7 - Formation Water Salinity Diagram, Deep Creek Unit Attachment 8 - Wellbore Schematic Diagram, Happy Valley #2 Attachment 9 - Wellbore Schematic Diagram, Happy Valley #3 Attachment 10 -Wellbore Schematic Diagram, Happy Valley #4 Attachment 11 -Wellbore Schematic Diagram, Happy Valley #7 Appendices Appendix A -Complete Text of 20 AAC 25.252 • ca c~ '~ r„ •m~ ~ 1 BRUCF. ~ ~ --~ ~ ------ ri_~ ~ ^ c c~ 9 10 11 12 7 8 9 10 11 16 15 14 ~1~3 18 17 16 I 15 i 14 21 22 23 ~ 24 19 20 21 22 23 1 S14 W 1-5-13W _ : ,,.~, 28 27 26 25 30 ~'~ 29 28 27 26 f NI NILCHIK ~ e. . , 33 ~ ~, 3~ 35 ~~ 36 ,/f 31 / 32 33 34 35 __ l j _.. ~ ~;,, ". ~-., 4 3 ~ °~ 2 '....~, `, ~ 1 6 5 4 3 2 f i~ ~~ 9~ 10_ 11 ~ 12 ^- ; j7 8 9 10 11 ~ "~ ' ~ ~ :~ 16 15 14 13 18 17 16 15 14 2 14W S 2S13W . _ 21 22 23 24 19 ^, 20 21 22 HV 5 23 ,, _ <~ 28 27 26 25 30 X29 28 27 2 6' 33 34 35 36 31~ 32 33 34 35 UNOCAL 76 1 0.5 0 1 Miles Alaska State Plane Zone 4, NAD27 HV5 Local Vicinity.mxd HAPPY VALLEY 5 Local Vicinity October 2004 c~ c c~ w cQ c Leak Off Test Data ±4,000' TVD Happy Valley Area 4000 4010 • 4020- 4030 ,~ 4040 0 4050 4060 2 4070 F 4080 4090 4100 4110 0 I i` ° y * . - - __ _ -- -- _ - - --~ ~ ~~ x ,~ : , a~ ~ _ ~ U a t a~ ca c _ ~ I ~ , ~HV-1 I HV-3 I H V m , =. -4 Sri c ; , ~ ~- ~~ a~ ~ ~HV-5 (1st LOT) m a > .~ a~ ~HV-5 (2nd LOT) a -a ~ ° ' ~, = a = 0 • HV-5 (Lost Returns) °- 2 4 6 8 10 12 14 Equivalent Mud Weight (EMW), ppg 16 18 ~J 20 • • • c~ Happy Valley #5 Fluid Containment Calculations 9-5/8", 40 • ppf, L-80 casing at 918' MD • 970' MD/TVD, 21.4 ppg LOT 1064' MD/TVD, 20.4 ppg LOT 2,400' MD, 2,393' TVD Top of cement per SCMT log, Oct-04 Secondary Containment - 2,936' TVD Well HV #2: LOT = 13.6 ppg EMW SUMMARY: Primary Containment Rating = 15.5 ppg EMW at 4014' ND Secondary Containment Rating = 13.6 ppg EMW at 2,936' TVD Proposed Injection Interval (MD) = 4,311' to 4,541' Proposed Injection Interval (TVD) = 4,014' to 4,183' Average Injection Pressure = 400 psi Maximum Injection Pressure = 1150 psi Note: All calculated pressures above assume an 8.5 ppg average fluid density. Severe mud losses were encountered in well Happy Valley #5 beginning at 4,400' MD (4,080' TVD) with full loss of mud circulation occurring at 4,433' MD (4,104 TVD). Estimated pressure applied to the formation when circulation was lost was 10.1 ppg EMW. Prior to drilling through this loss interval, a successful leak-off test was achieved to 12.1 ppg EMW at a depth of 4,370' MD (4,058' TVD). Primary vertical containment for injected fluids is provided by the interval tested in well Happy Valley #3 at a depth of 4,014' TVD. A leak-off test of this interval of HV-3 was 15.5 ppg EMW. The same interval was tested in well HV-1 to 17.3 ppg EMW at 4016' TVD. In the event the primary containment fails, the secondary containment zone at 2,936' TVD protects freshwater aquifers. Failure of the primary containment interval would be accompanied by a notable pressure anomoly. If such an anomaly occurs, a through tubing temperature or tracer log can be run to verify there is no vertical fluid movement behind the 7" casing. Primary Containment - 4,014' TVD Well HV #3: LOT = 15.5 ppg EMW at 4256' MD __ Well HV #1: LOT = 17.3 ppg EMW at 4325' MD L-80 casing at 4331' MD, 4028' TVD _ ~ ~ TD = 4,541' MD, 4,183' TVD • ' Proposed Injection Zone - 4311' to 4541' MD, 4014' to 4183' TVD ' ~ LOT = 12.1 ppg EMW at 4370' MD, 4058' TVD k ~ Lost circulation = 10.1 ppg EMW at 4433' MD, 4104' TVD "-` ' Estimated Injection Pressure = (10.1 ppg - 8.5 ppg)(0.052)(4104') = 341 psi (approximately 400 psi) ~; Maximum Injection Pressure = 90% of LOT in HV #3 =(0.90)(15.5 ppg) = 14.0 ppg _ (14.0 ppg - 8.5 ppg)(0.052)(4104') = 1148 psi (approximately 1150 psi) • • D r. r. s 3 c~ 3 .~ AFFIDAVIT OF SERVICE BY MAIL STATE OF ALASKA ) )ss. THIRD JUDICIAL DISTRICT ) J. Gary Eller, an employee of Unocal, Anchorage, Alaska, being duly sworn, states that on ~o~-ew.~Q~- 2 , 2004, he mailed a copy of the "Application for a Disposal Injection Order for the Happy Valley #5 Well in the Deep Creek Unit" to: Ms. Loretta J. Throop 6621 Cloudcroft Lane Anchorage, AK 99516-4484 • ~.aP _ /' SUBSCRIBED AND SWORN to before me thi~ day oP~[- ~--~ , 2004. ,~~ ~° ,®easa®a®,~~~ Notary Public in and for Alaska ~; ~.~ O-~p~~~ ,~ My commission expires: ~ '~ -~ ~' ~~:®~ ~ ~~~~ ~a~: °~ - ~ ~`~ pe'1e~T~ OF ,Pe® , '~_fi~h leo~ea®®a ;inn .. ~ ~ AFFIDAVIT OF SERVICE BY MAIL STATE OF ALASKA ) )ss. THIltD JUDICIAL DISTRICT ) J. Gary Eller, an employee of Unocal, Anchorage, Alaska, being duly sworn, states that on ~ uy~.w.~oer 2 , 2004, he mailed a copy of the "Application for a Disposal Injection Order for the Happy Valley #5 Well in the Deep Creek Unit" to: • Ninilchik Native Association Attn: Sandy Lee 701 W. 41S` Ave., Suite 201 Anchorage, AK 99503 SUBSCRIBED AND SWORN to before me this day of /`.i ~il , 2004. ~ &~ ®OQ '~ `' PI~~LiG ~~ --- Qc ~'~D~®'Oe~soF ~;P'° A~~~ Notary Public in and for Alaska My commission expires: -~ ~a--QS • _. _. ~v~s:~~- l~~5~~~~~~ f r1 b ". UHF ^)~ ~¢.e,-`/-°""'""! _wviJ i..._~~1'~ Oeb~ 1-MMMef-xeel Current Statua xheeYll 7xs.e rQT E~ ,TOhI DeMln~ FEET Try UDTCDMP :50 S8 x.d~ 1-N~nFM-xeN ~'"' H V5 Current States q~rM~ E ------"L~In al.--------- E. xnrr.a r~ xtMNT.e ~' UNIOYY aEI~ Oettl ZleteN CI Ta N~YwI 7Da.e FILT x! M Ogth~ -MN•1 FffT TYON TLGS 0 Zee Feet MD ND r r.. ~ , ,,.~,.---,,,.., _. . _..... Attachment 3 • • ~~ UNOCAL76 Well Name: Happy Valley #5 Field: Deep Creek Unit State: Alaska PROPOSED r 1 ~J L' 50-231-20018 ACC: 204-007 1264' FSL, 1299' FEL Sec. 22, T2S, R13W, S.M. -THF: 25.64' tubing hanger installed e cxn - 3" Bowen cxn Conductor: 16", 82.77 ppf, K-55 to 103' Surface Casing: 9~8', 47 ppf, L-80, BTC to 920' Cmnt with 42 bbl of 12.8 ppg lead and 27 bbl of 15.8 ppg tail "G". LOT = 20.4 ppg EMW Baker 708-40 SC-2 retrievable packer at 4180' XN Nipple @ 4206' ID = 2.813", no-go = 2.75" Wireline Re-entry Guide at 4218' 7" casing above packer is loaded with 9 ppg acker fluid Intermediate Casing: 7", 26 ppf, L-80, BTC-Mod to 4330' Cmnt with 90 bbl of 12.8 ppg LiteCrete lead and 19 bbl of 15.8 ppg "G" tail. LOT = 12.1 ppg EMW Directional Data: max hole angle = 43.1 deg max doglegs: 3.9 deg/100 ft at 957' Oaen Hole: 6%." open hole 4330' - 4541'. Left 4.0 deg/100 ft at 3796' hole full of 9 ppg WBM on 3/31/2004. TD = 4,541' Attchmnt 3 - HV-5 proposed schematic.xls Drawn by: JGE November 2, 2004 D '+ Q 3 <D 3 '+ A ~ ~ Attachment 4 Well Happy Valley #5, Deep Creek Unit Description of Wellbore Construction Surface Casing • 95/8" OD, 47 ppf, L-80, BTC casing from surface to 920' MD. o Burst rating - 6,870 psi o Collapse rating - 4,750 psi o Pipe body yield -1,086,000 lbs o Joint yield -1,122,000 lbs • Cemented with 42 bbl of 12.8 ppg lead and 27 bbl of 15.8 ppg tail o Borehole = 12'/4" diameter o Cement returns to surface on February 10, 2004 o .Formation leakoff test of 21.4 ppg EMW on February 14, 2004 after drilling to 970' MD. A second leakoff test was performed to 20.4 ppg EMW after drilling to 1,064' MD. Production Casing • 7" OD, 26 ppf, L-80, BTC casing from surface to 4,330' MD. • o Burst rating - 7,240 psi o Collapse rating - 5,410 psi o Pipe body yield - 604,000 lbs o Joint yield - 641,000 lbs • Cemented with 90 bbl of 12.8 ppg lead and 19 bbl of 15.8 ppg tail o Borehole = 8'/2" diameter o Cemented with no losses on February 18, 2004 o Formation leakoff test of 11.2 ppg EMW on March 25, 2004 after drilling to 4,361' MD. o The 7" casing shoe was squeezed with 20 bbl of cement on March 25, 2004. After drilling out to a depth of 4,361', another leakoff test was conducted to 12.1 ppg EMW on March 26, 2004. o Schlumberger SCMT log run on October 20, 2004. Top of cement identified at X2,400' MD. Production Tubing (Proposed) • 3'/2" OD, 9.2 ppf, L-80, non-upset IBT-Mod tubing with special clearance couplings run to 9,586' MD o Burst rating - 10,160 psi o Collapse rating - 10,530 psi o Joint yield -159,0901bs o Tubing annulus loaded with 8.5 ppg KCl brine with corrosion inhibitor • Baker 70B-40 SC-2 packer and seal assembly at 4,180' MD (existing) • • Baker model "E" anchor seal assembly ,__. Attachment 5 ~~-~ /~ ,, ,, ... . . ~ 1 r ~ ~ ~ ~ / ~ ~ ~ ~ ~ • r ~ ~ ~ Slim Cement Map Tool ~ N ctS J '~ a Surface: 1264 FSL & 1299 FEL Elev.: K.B. 738.5 ft T ~ N ~ z G.L. 716 ft I j j O D F 737.5 ft U ~ . . T f3 ._ T ~ c a~ a o U Permanent Datum: GROUND LEVEL Elev.: 716 ft j Y = m = ~ ~ Log Measured From: KB 22.5 ft above Perm. Datum I a o ~ Drilling Measured From: KB " o ` API Serial No. Section Township Range o ~ ~ m ~ .°~ ~ U 50-231-20018 22 2S 13W Lo ing Date 20-Oct-2004 Run Number 1 Depth Driller 4330 ft Schlumberger Depth 4180 ft Bottom Log Interval 4180 ft ,I Top Log Interval 700 ft j Casing Fluid Type Water w/ corrosion inhibitors Salinity ~, Densit 91bm/ ai I Fluid Level SIT/CASING/TUBING STRING Bit Size 8.500 in From To Casing/Tubin Size 7.000 in ', Weight 26 tbm/ft + Grade L-80 I From 0 ft To 4330 ft Maximum Recorded Temperatures Logger On Bottom Time 20-Oct-2004 23:00 Unit Number Location 2207 Kenai Recorded By K. Bo er Witnessed B Shane Hauck D Z 3 c~ rt A ATTACHMENT6 Happy Valley #5, Deep Creek Unit Mechanical Integrity Test Procedure Class II Disposal Well Objective: Perform a mechanical integrity test on the 7" casing in the Happy Valley #5 well as per the regulations of 20 AAC 25.412(c). Procedure: 1. Notify AOGCC representative of intent to perform MIT within 24 hours. If applicable, cease disposal operations into the Happy Valley #5 well for several hours prior to MIT to allow temperatures and pressures to stabilize. 2. RU test pump with methanol source onto the 7" casing. RU a 2-pen chart recorder or SPIDR gauge to allow MIT to be recorded. When AOGCC representative arrives, pressure test 7" casing to 1,500 psi for a minimum of 30 minutes. (Note: Once the 7" casing if full it should take approximately 0.5 bbl to pressure up to 1,500 psi. Contact Completion Engineer if excessive volume is needed to reach 1,500 psi.) 4. When MIT is complete, maintain annulus pressure of 1,500 psig. Document successful MIT test on appropriate AOGCC form and mail to Completion Engineer. n U J. Gary Eller August 9, 2004 D .. .. 3 c~ .+ V • 1000 2000 3000 4000 .. d w t • a m ~ 5000 6000 7000 aooo 9000 • Calculated Formation Water Salinity Deep Creek Unit 0 0 Chlorides, ppm 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 • • ~ i • • • • • • • • ~' •~ - I -- - -- --- - - - __ _ • I • • • • ~ • - --- ~I ~ ~- - _- i ~~ I • I ~ i i I O '• • NNA #1 (SP) •NNA #1 (Rwa) ~i • • Deep Creek #1 (SP) • Deep Creek #1 (Rwa) '~ O NNA #1 T-5 Sample TDS ~~ 1 II ~~ i• Attachment 8 V N 0 CA ~ 76 S. Kenai Gas Project Happy Valley #02 • Completion Status C. Jewel Detail 1. 78' of 13-3/8" conductor (driven to refusal) 2. 9-5/8" surface casing @ 1,046' MD/1,046' VD cemented to surface 3 SFO-1 CI Menthol Injection Port @ 2,503' MD - ID 2.992" (drifted to 2.87") Operating pressure = tbg pressure + 1,500 psi 4 HMC hanger/ZXP packer w/4" x 10' production seal bore in middle @2,886- 2,996' 5 7" intermediate casing @ +- 3,081' MD /+- 2,936' VD -- cemented to +/- 200' below 9-5/8" shoe 6. Estimated TOC in 8-1 /2" hole @ 3,600' 7. BX Nipple @ 6,725' 8. BX Nipple @ 7,845' 9 BX Nipple @ 9,275' 10. BX Nipple @ 9,757; xx plug set ~ calc Garb dump bailed to +/- 9,496. Tag fill @ 9356' MD on 5/24/04 Bit sizes = 12-1/4", 8-1/2" and 6-1/8" CASING DETAIL Perforations SIZE WT GRADE CONN TOP BOTTOM 13-3/8" 68 K-55 BTC 0' 78' 9-518" 47 L-80 BTC 0' 1,046' 7" 26 L-80 BTC (KC) 0' 3,081' 3 1/2" 9.2 L-80 IBTC(ABMod 8 IBTC) 2,996' 10,215' TUBING DETAIL SIZE WT GRADE CONN TOP BOTTOM 31/2" 9.2 L-80 IBTC (AB Mod) 0' 3,014' • TD=10,225'MD/9,812'VD Attchmnt 8 - HV-2 Wellbore schematic.doc Revised by: JGE Date MD TVD 10/20/03 6,784-6,824' 6,406-6,445' 9/30/03 7,131-7,171' 6,746-6,786' 9/30/03 7,181-7,191' 6,795-6,805' 9/9/03 9,050-9,070' 8,642-8,662' 8/15/03 9,318-9,348' 8,909-8,938 8/15/03 9,534-9,564' 9,123-9,153 (isolated) 8/14/03 9,809-9,866' 9,397-9,454' (isolated) 8/14/03 10,012-10,052' 9,600-9,640' (isolated) REVISED: August 23, 2004 Drawn By: DED, RKB to GL =16.50' Attachment 9 UNOCAL 1: 50-231-20016 ~GCC: 203-222 77' FSL, 1294' FEL c. 22, T2S, R13W, S.M. -GL: 25.0' ~ lift threads - 3%:" IBT :e cxn - 2%:" Bowen cxn IBT-Mod • Baker "H" chemical injection nipple at 2530' with 1/4", 0.049" wall SS chemical injection line Baker in-line ZXP packer at 4157' Well Name: Happy Valley #3 Field: Deep Creek Unit State: Alaska Conductor: 16", 82.77 ppf, K-55 to 44' Surface Casinca: 9%", 47 ppf, L-80, BTC to 1023' Cmt with 62 bbl of 12.8 ppg lead and 34 bbl of 15.8 ppg tail "G". Intermediate Casino: 7", 26 ppf, L-80, BTC-Mod to 4256' Cmt with 68 bbl of 12.8 ppg LiteCrete lead and 16 bbl of 15.8 ppg "G" tail. -81: 9228' - 9254' (5/27/2004, 3 spf) -100: 9612' - 9622' (5/27/2004, 3 spf) r~ L_J Plugs: Halliburton Fasdrill composite bridge plug at 9899' (5/27/04). CIBP at 11,280' (3/11/04) Directional Data: max hole angle = 27.1 deg max dogleg <3 deg/100 tt Attchmnt 9 - HV-3 wellbore schematic.xis -130: 9965' - 9994' (4121/2004, 6 spf) -140: 10,154' - 10,168' (4/23/2004, 6 spf) -155: 10,640' - 10,678' (4/11/2004, 6 spf) Production Casino: 3%:", 9.2 ppf, L-80, IBT-Mod casing to 11,342' Baker in-line ZXP packer at 4157' Cemented with 194 bbl of 12.0 ppg PBTD = 11,280' Litecrete, overdisplaced cmt by TD = 11,345' 20 bbl Drawn by: JGE August 24, 2004 v 3 lD 3 .~- O UNOCALO 50-231-20017 ~: 203-223 1270' FSL, 1297' FEL Sec. 22, T2S, R13W, S.M. RT-THF: 23.54' RT-GL: 22.8' lift threads - 3'/2" IBT cxn - 2%z" Bowen cxn IBT-Mod • • 9.2 ppf, L-80, Baker "H" chemical injection nipple at 2471' with 1/4", 0.049" wall SS chemical injection line Baker in-line ZXP packer at 3926' Halliburton composite Fasdrill bridge plug at 9260' (7/6/2004) XN Nipple @ 10,480' ID = 2.813", no-go = 2.745" Pluos: Halliburton Fasdrill composite bridge plugs at 9260' i~ 9356' (7/6!04) Directional Data: max hole angle = 16.8 deg max dogleg <3 deg/100 ft Attchmnt 10 - HV-4 wellbore schematic.xls Well Name: Happy Valley #4 Field: Deep Creek Unit State: Alaska Conductor: 16", 82.77 ppf, K-55 to 103' Surface Casino: 9%d', 47 ppf, L-80, BTC to 978' Cmnt with 47 bbl of 12.8 ppg lead and 27 bbl of 15.8 ppg tail "G". Top job with 4.8 bbl "G" cmt. Intermediate Casino: 7", 26 ppf, L-80, BTC-Mod to 4079' Cmnt with 74 bbl of 12.8 ppg LiteCrete lead and 17 bbl of 15.8 ppg "G" tail. '-80a: 8854' - 8874' (716/2004, 3 spf) '-80b: 8879' - 8894' (7/6/2004, 3 spf) '-81:8925' - 8945' (7/6/2004, 3 spf) '-91:9202' - 9216' (7/6/2004, 3 spf) -100: 9277' - 9306' (4/17/2004, 6 spf) -105: 9362' - 9398' (4/14/2004, 6 spf) -140: 9858' - 9888' (4/16/2004, 6 spf) XN Production Casino: 3'/s", 9.2 ppf, L-80, IBT-Mod casing to 10,602' Baker in-line 2:XP packer at 3926' Cemented with 178 bbl of 12.0 ppg PBTD = 9,260' Litecrete TD = 10,620' Drawn by: JGE July 14, 2004 D rt n 3 ~D 3 .+ i UNOCAL 50-231-20022 CC: 204-106 • • 1319' FSL, 1190' FEL Sec22, T2S, R13W, S.M. -THF: 22.5' lift threads - 3%i' EUE 8rd cxn - 2%:" Bowen cxn eduction Tubing: 3'/:", 9.3 ppf, L-80, EUE 8rd Mod to 6764' - Annulus loaded with fresh water (no inhibitor added) Chemical injection sidepocket mandrel at 2488' (Matto SFO-1C-I) with 1/4", 0.049" wall SS chemical injection line Locator sub at 6731' Baker 80-40 seal assembly 13' of 4.00" OD seals Muleshoe at 6764' Directional Data: max hole angle = 37.4 deg at 6161' KOP = 1868' max dogleg = 3.9 deg/100' at 4713' Attchmnt 11 - HV-7 wellbore schematic.xls PBTD = 10,205' TD = 10,274' Well Name: Happy Valley #7 Field: Deep Creek Unit State: Alaska Conductor: 185/8", 87.5 ppf, K-55 to 80' Surface Casino: 138/8", 68 ppf, K-55, BTC to 1008' Cmnt with 81 bbl of 12.8 ppg lead and 52 bbl of 15.8 ppg tail "G" Intermediate Casino: 9%8", 40 ppf, L-80, BTC to 4331' Cmnt with 189 bbl of 12.8 ppg LiteCrete lead and 43 bbl of 15.8 ppg "G" tail. na Liner: 7", 26 ppf, L-80, BTC-Mod 4182'-6910' er liner hanger at 4182' with ZXP liner-top packer it with 52 bbl of 12.0 ppg LiteCrete lead and 10 bbl of 15.8 ppg "G" tail. -80: 9998' - 10,018' (6 spf, 8/24/04) uction Liner: 3%', 9.3 ppf, L-80, EUE 8rd Mod liner from 6726' - 10,272' r ZXP packer, Flexlock liner hanger & 80-40 sealbore at 6726' ented with 103.5 bbl of 12.0 ppg LiteCrete Updated by: JGE 9 a Y 20 AAC 25.252 ~ APPENDIX A UNDERGROUND DISPOSAL OF OIL FIELD WASTES AND UNDERGROUND STORAGE OF HYDROCARBONS. (a) The underground disposal of oil field wastes and the underground storage of hydrocarbons are prohibited except as ordered by the commission under this section. In response to a letter of application for injection filed by an operator, the commission will issue an order authorizing the underground disposal of oil field wastes that the commission determines are suitable for disposal in a Class II well, as defined in 40 C.F.R. 144.6(b) as revised as of July 1, 1998, which is adopted by reference, or the underground storage of hydrocarbons. An order authorizing disposal or storage wells remains valid unless revoked by the commission. (b) The operator has the burden of demonstrating that the proposed disposal or storage operation will not allow the movement of oil field wastes or hydrocarbons into sources of freshwater. Disposal or storage wells must be cased and the casing cemented in a manner that will isolate the disposal or storage zone and protect oil, gas, and freshwater sources. (c) An application for underground disposal or storage must include (1) a plat showing the location of all proposed disposal and storage wells, abandoned or other unused wells, production wells, dry holes, and any other wells within one-quarter mile of each proposed disposal or storage well; (2) a list of all operators and surface owners within aone-quarter mile radius of each proposed disposal or storage well; (3) an affidavit showing that the operators and surface owners within aone-quarter mile radius have been provided a copy of the application for disposal or storage; (4) the name, description, depth, and thickness of the formation into which fluids are to be disposed or stored and appropriate geological data on the disposal or storage zone and confining zones, including lithologic descriptions and geologic names; (5) logs of the disposal or storage wells, if not already on file, or other similar information; (6) a description of the proposed method for demonstrating the mechanical integrity of the casing and tubing under 20 AAC 25.412 and for demonstrating that fluids will not move behind casing beyond the approved disposal or storage zone, and a description of (A) the casing of the disposal or storage wells, if the wells are existing; or (B) the proposed casing program, if the disposal or storage wells are new; (7) a statement as to the type of oil field wastes to be disposed or hydrocarbons stored, their composition, their source, the estimated maximum amounts to be disposed or stored daily, and the compatibility of fluids to be disposed or stored with the disposal or storage zone; (8) the estimated average and maximum injection pressure; (9) evidence to support a commission finding that the proposed disposal or storage operation will not initiate or propagate fractures through the confining zones that might enable the oil field wastes or stored hydrocarbons to enter freshwater strata; (10) a standard laboratory water analysis, or the results of another method acceptable to the commission, to determine the quality of the water within the formation into which disposal or storage is proposed; (11) a reference to any~licable freshwater exemption issued in a~iance with 20 AAC 25.440; and (12) a report on the mechanical condition of each well that has penetrated the disposal or storage zone within cone-quarter mile radius of a disposal or storage well. (d) The mechanical integrity of a disposal or storage well must be demonstrated under 20 AAC 25.412 before disposal or storage operations are begun, after a well workover affecting mechanical integrity is conducted, and at least once every four years. To confirm continued mechanical integrity, the operator shall monitor the injection pressure and rate and the pressure in the casing-tubing annulus during actual disposal or storage operations. The monitored data must be reported monthly on the Monthly Injection Report (Form 10-406). (e) If an injection rate, operating pressure observation, or pressure test indicates pressure communication or leakage in any casing, tubing, or packer, the operator shall notify the commission by the next working day and shall implement corrective action or increased surveillance as the commission requires to ensure protection of freshwater. (f) The commission will require additional mechanical integrity tests if the commission considers them prudent for conservation purposes or protection of freshwater. (g) Modifications of existing or pending disposal or storage operations will be approved by the commission, in its discretion, under 20 AAC 25.507, upon application containing sufficient detail to evaluate the proposed modification. No modification will be approved unless the applicant proves to the commission that the modification will not allow the movement of fluids into sources of freshwater. (h) If wells, including freshwater wells or other borings, are located within cone-quarter mile radius of the disposal or storage well, are a possible means for oil field wastes or hydrocarbons to move into sources of freshwater, and are under the control of (1) the operator, the operator shall ensure that the wells are properly repaired, plugged, or otherwise modified to prevent the movement of oil field wastes or hydrocarbons into sources of freshwater; or (2) a person other than the operator, the commission will not issue an order under (a) of this section to the operator until the operator presents evidence to the commission's satisfaction that the person who controls the wells has properly repaired, plugged, or otherwise modified the wells to prevent the movement of oil field wastes or hydrocarbons into sources of freshwater. (i) The commission will publish notice of the disposal or storage application and will provide opportunity for a hearing in accordance with 20 AAC 25.540. (j) If disposal or storage operations are not begun within 24 months after the approval date, the injection approval will expire unless an application for extension is approved by the commission. (k) The annular disposal of drilling wastes approved under 20 AAC 25.080 is an operation incidental to drilling a well and is not a disposal operation subject to this section. (I) This section does not apply to underground disposal that is regulated under 40 C.F.R. 147.101 by the United States Environmental Protection Agency. History - Eff. 4/2/86, Register 97; am 11/7/99, Register 152 Authority - AS ~`.fl5.~~3
