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DIO 001
Kenai Gas Field 1. June 27, 1985 UIC Permit Application KU D-1 2. January 20, 1987 Unocal's Injection Application Kenai Gas Field 3 January 30, 1987 Unocal's detailed internal audit of 1985 and 1986 injection pressures 4. January 30, 1987 Notice of Hearing and affidavit of publication 5. March 19, 1987 Unocal's ltr re: KU WD #1 Permit No. AK- 2D0217-E 6. September 27, 2004 Proposals to amend underground injection orders to incorporate consistent language addressing the mechanical integrity of wells 7. March 8, 2010 E-mail re: Marathon and commercial disposal through G&I facility Disposal Injection Order 1 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage, Alaska 99501-3192 Re: THE REQUEST OF UNOCAL ) COMPANY to dispose of ) non-hazardous oil field) wastes by underground ) injection in well ) KU WD-l, Kenai Gas ) Field ) Disposal Injection Order No. 1 Kenai Unit Kenai Gas Field February 18, 1987 IT APPEARING THAT: 1. Unocal Company (Unocal) requested on January 20, 1987 the Alaska Oil and Gas Conservation Commission to authorize the continued use of KU WD-1 as a disposal well in the Kenai Unit, Kenai Gas Field. Unocal will inject non-hazardous waste fluids generated by normal drilling and production operations. 2. Notice of an opportunity for a public hearing on March 11, 1987 was published in the Anchorage Daily News on January 30, 1987. 3. No protest or request for a public hearing was timely filed. Accordingly, the Commission will, in its discretion, issue an order without a public hearing. FINDINGS: 1. Unocal, as operator of the Kenai Gas Field, currently is authorized by EPA permit AK-2DO217-E issued ir_ conformance with the Safe Drinking Water Act as amended 42 USC 300f et sew to inject non-hazardous liquid wastes into well KU WD-1, Kenai Gas Field. Disposal Injection Order No. 1 February 18, 1987 Page 2 2. All aquifers below 1300 feet within the Kenai Gas Field Boundary, and one-quarter (4) mile beyond, are exempted under 40 CFR 147.102(b)(1)(C) for Class II injection activities. 3. Permeable strata, that will accept injected fluids, are present below 2700 feet in well KU WD-1. 4. A series of confining strata are present above 2700 feet in well KU WD-1 that will prevent upward movement of the injected waste fluids into non-exempt aquifers. 5. The strata into which fluids are to be injected will accept fluids at injection pressures which are less than the fracture pressure of the injection strata and their confining formations. 6. To ensure that waste fluids are confined to injection strata, the mechanical integrity of KU WD-1 will be demonstrated periodically and monitored routinely for disclosure of possible abnormalities in operating conditions. 7. KU WD-l is constructed and and has been tested in conformance with the requirements of 20 AAC 25.412. CONCLUSIONS: The geologic sequence present at the well site and maintenance of the mechanical integrity of well KU WD-1 will prevent movement of injected waste fluids into non-exempt aquifers. NOW, THEREFORE, IT IS ORDERED THAT: Non-hazardous oil field waste fluids may be injected in conformance with Alaska Administrative Code Title 20, Chapter 25, for the purpose of disposal into the Sterling formation below the measured depth of 2700 feet in well KU WD-1. Disposal Injection'Order No. 1 February 18, 1987 Page 3 DONE at Anchorage, Alaska and dated February 18, 1987. A ®IL ~~~ ~~ -~ - ~. 'i~~~: a ~ ~~}'"~~ o - - ~,~ ~ ~ ~ , ~ ~® ~ G, ~~ S,M ,J~' 4G. ~~TI®~j CO~~ Lonnie (:. Smith, commissioner Alaska Oil and Gas Conservation Commission ~. W. W. Barnwell, Commissioner Alaska Oil and Gas Conservation Commission Alaska Oil and Gas Conservation Commission ~ 7 Marathon & commercial disposal ugh G&I facility ~ Page 1 of 2 Maunder, Thomas E (DOA) From: Stebbins, Tiffany A. [tastebbins@marathonoil.com] Sent: Tuesday, March 09, 2010 9:27 AM ,_.~,~ ~~° To: Maunder, Thomas E (DOA) Cc: Regg, James B (DOA) ~ ~ `-_ `Q Subject: RE: Marathon & commercial disposal through G&I facility Tom, Thanks for responding to the subject. If we do begin third party disposal, I will add a line item to capture the volumes on our annual DIO reporting. C'J ti~~am.~, CJ ~~ Regulatory Compliance Representative Marathon Oil Corporation Phone 907-565-3043 Ce11907-529-0522 Fax 907-565-3076 From: Maunder, Thomas E (DOA) [mailto:tom.maunder@alaska.gov] Sent: Monday, March 08, 2010 2:03 PM To: Stebbins, Tiffany A. Cc: Regg, James B (DOA) Subject: RE: Marathon & commercial disposal through G&I facility Tiffany, Commission Disposal Injection Orders (DIOs) authorize the Operator to dispose of Class II waste. We have not made any distinction regarding whether the injected waste is solely produced by the Operator or results from some third party's well operations. If third party waste is accepted, it is incumbent on Marathon to be satisfied that the waste is indeed Class II and meets the requirements of the DIO. In your annual report it may be appropriate to have a third party line item where such volumes can be listed. Call or message with any questions. Tom Maunder, PE AOGCC From: Regg, James B (DOA) Sent: Monday, March 08, 2010 11:45 AM To: Maunder, Thomas E (DOA) Subject: FW: Marathon & commercial disposal through G&I facility Jim Regg AOGCC 333 W.7th Avenue, Suite 100 Anchorage, AK 99501 3/9/2010 Marathon & commercial disposal ugh G&I facility ~ Page 2 of 2 907-793-1236 From: Stebbins, Tiffany A. [mailto:tastebbins@marathonoil.com] Sent: Monday, March 08, 2010 11:00 AM To: Regg, James B (DOA) Subject: Marathon & commercial disposal through G&I facility Hi Jim, We are considering commercial disposal. Would we need to convert our current disposal permit to a commercial disposal permit even if we intend to only dispose of approved Class II exempt wastes. Thanks, Regulatory Compliance Representative Marathon Oil Corporation Phone 907-565-3043 Ce11907-529-0522 Fax 907-565-3076 3/9/2010 ~~ ~~~`,~ I I ~ i~ ~ t ~ , , d\ , , "•. , ~ ~~ FRANK H. MURKOWSKI, GOVERNOR .tee .,>i~~ .y,.,,.~ ~ ...i ,ffi ~ tam ~r ~ ~ i ~~~ O~ ~ ~ r{ 333 W. T" AVENUE, SUITE 100 COIQSERYA'1`IO1~T CO1rII-IISSIOIQ ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 ' FAX (907) 276-7542 September 27, 2004 Proposals to Amend Underground Injection Orders to Incorporate Consistent Language Addressing the Mechanical Integrity of Wells The Alaska Oil and Gas Conservation Commission ("Commission"), on its own motion, proposes to amend the rules addressing mechanical integrity of wells in all existing area injection orders, storage injection orders, enhanced recovery injection orders, and disposal injection orders. There are numerous different versions of wording used for each of the rules that create confusion and inconsistent implementation of well integrity requirements for injection wells when pressure communication or leakage is indicated. In several injection orders, there are no rules addressing requirements for notification and well disposition when a well integrity failure is identified. Wording used for the administrative approval rule in injection orders is similarly inconsistent. The Commission proposes these three rules as replacements in all injection orders: Demonstration of Mechanical Integrity The mechanical integrity of an injection well must be demonstrated before injection begins, at least once every four years thereafter (except at least once every two years in the case of a slurry injection well), and before returning a well to service following a workover affecting mechanical integrity. Unless an alternate means is approved by the Commission, mechanical integrity must be demonstrated by a tubing/casing annulus pressure test using a surface pressure of 1500 psi or 0.25 psi/ft multiplied by the vertical depth of the packer, whichever is greater, that shows stabilizing pressure and does not change more than 10 percent during a 30 minute period. The Commission must be notified at least 24 hours in advance to enable a representative to witness mechanical integrity tests. Well Inte rity Failure and Confinement Whenever any pressure communication, leakage or lack of injection zone isolation is indicated by injection rate, operating pressure observation, test, survey, log, or other evidence, the operator shall immediately notify the Commission and submit a plan of corrective action on a Form 10-403 for Commission approval. The operator shall immediately shut in the well if continued operation would be unsafe or would threaten contamination of freshwater, or if so directed by the Commission. A monthly report of daily tubing and casing annuli pressures and injection rates must be provided to the Commission for all injection wells indicating well integrity failure or lack of injection zone isolation. Administrative Actions Unless notice and public hearing is otherwise required, the Commission may administratively waive or amend any rule stated above as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in fluid movement outside of the authorized injection zone. The following table identifies the specific rules affected by the rewrite. Affected Rules Injection Order "Demonstration of "Well Integrity "Administrative Mechanical Failure and Action" Integrity" Confinement" Area In'ection Orders AIO 1 -Duck Island Unit 6 7 9 AIO 2B - Kuparuk River Unit; Kuparuk River, Tabasco, Ugnu, West Sak 6 ~ 9 Fields AIO 3 -Prudhoe Bay Unit; Western Operating Area 6 ~ 9 AIO 4C -Prudhoe Bay Unit; Eastern Operating Area 6 ~ 9 AIO 5 -Trading Bay Unit; McArthur River Field 6 6 9 AIO 6 -Granite Point Field; Northern Portion 6 ~ 9 AIO 7 -Middle Ground Shoal; Northern Portion 6 ~ 9 AIO 8 -Middle Ground Shoal; Southern Portion 6 7 9 AIO 9 -Middle Ground Shoal; Central Portion 6 ~ 9 AIO l OB -Milne Point Unit; Schrader Bluff, Sag River, 4 5 8 Kuparuk River Pools AIO 11 -Granite Point Field; Southern Portion 5 6 8 AIO 12 -Trading Bay Field; Southern Portion 5 6 8 AIO 13A -Swanson River Unit 6 ~ 9 AIO 14A -Prudhoe Bay Unit; Niakuk Oil Pool 4 5 8 AIO 15 -West McArthur 5 6 9 • Affected Rules Injection Order "Demonstration of "Well Integrity "Administrative Mechanical Failure and Action" Inte 'ty" Confinement" River Unit AIO 16 - Kuparuk River Unit; Tarn Oil Pool 6 7 10 AIO 17 - Badami Unit 5 6 8 AIO 18A -Colville River Unit; Alpine Oil Pool 6 7 11 AIO 19 -Duck Island Unit; Eider Oil Pool 5 6 9 AIO 20 -Prudhoe Bay Unit; Midnight Sun Oil Pool 5 6 9 AIO 21 - Kuparuk River Unit; Meltwater Oil Pool 4 No rule 6 AIO 22C -Prudhoe Say Unit; Aurora Oil Pool 5 No rule 8 AIO 23 - Northstar Unit 5 6 9 AIO 24 -Prudhoe Bay Unit; Borealis Oil Pool 5 No rule 9 AIO 25 -Prudhoe Bay Unit; Polaris Oil Pool 6 g 13 AIO 26 -Prudhoe Bay Unit; Orion Oil Pool 6 No rule 13 Disposal Injection Orders DIO 1 -Kenai Unit; KU WD-1 No rule No rule No rule DIO 2 -Kenai Unit; KU 14- 4 No rule No rule No rule DIO 3 -Beluga River Gas Field; BR WD-1 No rule No rule No rule DIO 4 -Beaver Creek Unit; BC-2 No rule No rule No rule DIO 5 -Barrow Gas Field; South Barrow #5 No rule No rule No rule DIO 6 -Lewis River Gas Field; WD-1 No rule No rule 3 DIO 7 -West McArthur River Unit; WMRU D-1 2 3 5 DIO 8 -Beaver Creek Unit; BC-3 2 3 5 DIO 9 -Kenai Unit; KU 11- 17 2 3 4 DIO 10 -Granite Point Field; GP 44-11 2 3 5 • • Affected Rules Injection Order "Demonstration of "Well Integrity "Administrative Mechanical Failure and Action" Integrity" Confinement" DIO 11 -Kenai Unit; KU 24-7 2 3 4 DIO 12 - Badami Unit; WD- 1, WD-2 2 3 5 DIO 13 -North Trading Bay Unit; S-4 2 3 6 DIO 14 -Houston Gas Field; Well #3 2 3 S DIO 15 -North Trading Bay Unit; S-5 2 3 Rule not numbered DIO 16 -West McArthur River Unit; WMRU 4D 2 3 5 DIO 17 -North Cook Inlet Unit; NCIU A-12 2 3 6 DIO 19 -Granite Point Field; W. Granite Point State 3 4 6 17587 #3 DIO 20 -Pioneer Unit; Well 1702-15DA WDW 3 4 6 DIO 21 - Flaxman Island; Alaska State A-2 3 4 7 DIO 22 -Redoubt Unit; RU D1 3 No rule 6 DIO 23 -Ivan River Unit; IRU 14-31 No rule No rule 6 DIO 24 - Nicolai Creek Unit; NCU #5 Order expired DIO 25-Sterling Unit; SU 43-9 3 4 7 DIO 26 - Kustatan Field; KF 1 3 4 7 Stora a Injection Orders SIO 1 -Prudhoe Bay Unit, Point McIntyre Field #6 No rule No rule No rule SIO 2A-Swanson River Unit; KGSF #1 2 No rule 6 SIO 3 -Swanson River Unit; KGSF #2 2 No rule 7 Enhanced Recove In'ection Orders EIO 1 -Prudhoe Bay Unit; Prudhoe Bay Field, Schrader No rule No rule 8 Bluff Formation Well V-105 ~~ • Affected Rules Injection Order "Demonstration of "Well Integrity "Administrative Mechanical Failure and Action" Integrity" Confinement" EIO 2 -Redoubt Unit; RU-6 5 g g 02-902 (Rev. 3/94) Publisher/Original Copies: Department Fiscal, Department, Receiving AO.FELYI STATE OF ALASKA NOTICE TO PUBLISHER ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED ORDER AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF AO-02 514016 ADVERTISEMENT MUST BE SUBMITTED. WITH INVOICE SEE BOTTOM FfIR lNVO1CE ADDRESS F AOGCC AGENCY CONTACT DATE OF A.O. R 333 West 7th Avenue, Suite 100 ° Anchorage, AK 99501 PHONE Pc M 907-793-1221 DATES ADVERTISEMEYT REQUIRED: o Journal of Commerce October 3, 2004 301 Arctic Slope Ave #350 Anchorage, AK 99518 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL [NSTRUCT[ONS: 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 undersigned, a notary public this day personally appeared ATTACH PROOF OF PUBLICATION HERE. who, being first duly swom, 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 swom to before me This _ day of 2004, Notary public for state of My commission expires Public Notices Subject: Public Notices From: Jody Colombie <jody_colombie@admin.state.ak.us> Date: Wed, 29 Sep 2004 13:01:04 -0800 To: undisclosed-recipients:; BCC:- Cynthia B Mciver <bren_mciver@admin.state.ak:us>, Angela Webb angle_webb%~i.admin.statz.ak.us>, Robert E Nlintz <robert_rnintz~ci;la~v.state.ak.us>, Christine Hansen <e.hansen(a'ioacc.state.ok.us>, Terrie Hubble <hubbletl~c~~bp.com%, Sondra Stewman <StewmaSD@BP.com>, Scott & Cammy Taylor <staylar~~L~alaska.net=>, stanekj <stanekj@unocalcom>, ecolaw <ecotaw@trustees.org>, roseragsdale <roseragsdale@gci.net>, trmjrl <trmjrl@aal.com>, jbriddle <jbriddle@marath<moil.com>, rockhill <rockhill(t%aoga.org>, shaneg <shaeeg@e~ergreengas.com>, jdarlington ~jdarlitt~ton~forestoil.com>, nelson <knelson@petroleumnews.carn>, cboddy <cboddy(a'usibelli.com ~, Mark Dalton <mark.dalton@hdrinc.com>, Shannon Donnelly ~ Shannon.donnelly@onocophillips.corti ~, "Mark P. Worcester" <mark.p.Worcester@on~ocophillips.cain>, "Jcrr~~ C'. D~~thlefs" <ferry.c.dethlefs@conocophillips.eom>, Bob <bob@inletk~eper.org>, wd~~ ~~:wdvr«~dnr.stat~.ak.us>, tjr <tjr@dnrstate.ak.us>, bhritch <bbriteh@alaska.net>, mjnelson <mjnelson(~~pun•ingertz.com ; Charles O'Donnell <charles.o'donnell@veco.com> "Randy L: Skillern" <SkilleRL~BP.com>, "Deborah J. Tones"'<JonesDf@BP.com>,'"Pau1 G. Hyatt" <hyattpg@BP.com=>, "Steven R. Rassberg" <RossbeRS@BP.com>, Lois <lois@inletkeeper,org>, Dan Bross <kuacnews(~c;k-uac.org-~, Gordon Pospisil <PospisG@BP.cinn>, "Francis S. Sommer" ~=SammerFS~c;BP.com=>, R'[ikel Schultz ' <IV1ikel.Sc~ultz@BP.com>, "Nick V~. Glover" <~lover'vTW@;BP.com>, "Daryl J. Kleppi~" <KleppiDE@BP.com>, "Janet D. Platt" <P1attJD~a7BP.com>, "Rosanne M. Jacobsen" <JacobsRM@BP.com>, ddonkel <ddonkel@cfl.rr.com>_Collins Mount collies_mount@revenue.state.ak.us>, mekay <mckay<<L;gci.net>, T3arbara F Fullmer <barbara.f.fullmer@conocophillips.com>, bocastwf <bocastwf@bp.com , Charles Barker . <barke@iusgs.gov>, d~~u~;_schultze <doug_schult~e@xtocnergy°.com>, Hank Alford <hank.alford~{7 esxonmubiS.com%, i~Iark Kovac <yesnol@gci.net=~, ~spfoff <gspfoff@auxorapbwer.com>, Gregg Nady <gregg.nady@sh~ll.com>, Fred Steece <fred.steece a>,state.sd.us>, rcrotty <rerc~tty@chLm.com~ jejcines <jejones~c~aurorapo~ver_com>, dapa <dapa@alaska.net>; jroderick <jroderick@ci.nct=~, eyancy <-eyancti(~LSeaI-tite.net==, "James M. Ruud" <fames.m.ruud@conocaphillips.com>, Brit Lively <'mapalaska~ak.net>, <jah@dnr.siate.ak.us>, Kurt E Olson..<kurt olsoe@egis.state.ak.us%, buonoje <buonoje@bp.com>, l~lark Hanley<mark hanley@anadiirkc~.com>, loren_leman <brenlemanl~i;gov.state.ak.us=>, Julie Houle <juke_houl@dnr.state.ak.us> John W Katz <jwkatz~i;sso.org>, Suzan J Hill <suzan hill@dee.state.ak.us ~, tablerk <tablerk@unocal.eom %, Brady •~ brad@;aoga.org>, Brian Havelock<be@dnr.state.ak.us=y, bpapp <bpopp@borough.kenai.ak.us%. Jim White <jimwhiter~iaatx.rr.com>, "John S. Haworth" <jt~hn.s.haworth~_L~ex~onmobit.com=>, many <marty(c%rkindustrial.com= , @aelmons <ghammons~u;-aol.com ~, rmclean rmclean(ci~pofiox.al~~5ka.nc;t%; mkm72U0 ~~n1km7?00(aaol.com>, Brian Gillespie <ifl~rng@uaa.alaska.edu>. David L Boolens<dhoelen.@!aurorapower.com>, Todd Durkee <TDITRK~E(wIu'~1G.eom>, Gary Schultz <gary~schultz!c"idnr.state.ak.us>, ~~%a~ne Ranvier <RANCIER@petro-canada.ca->, Bill Mi11er <Bil'1_?Viiller~;?~toalaska.com%, Brandon Gagnon <bgagnon@brenala~v.coFn=>, Paul 't~inslow <pmwinslowr~Lforestoil.com--~, Garry Catron <eatroe~@bp.c~~tn~-', Sharmaine C'c~poland <cop~l~sv~cv-bp.com>, Suzanne Allexan <callexan@helmenergy.com~, Kristin Dirks`<kristin_dirks@dnr.state.ak.us>, Itaynell Zeman ~kjzeman@marathonoil.com>, Jolm Towel- <John.Towerriveia.doe.gov~, Sill Fowler <Bill_Fowler(u;anadarko.COM>, Vaughn Swartz <vaughn.swartz(arbccm.com~, Scott Cranswick l of 2 9/29/2004 1:10 PM Public Notices <scott.cranswick@mms.gov>, Brad McKim <mekimbs~a BP.com> Please find the attached Notice and Attachment for the grogosed amendment of underground injection orders and the Public Notice Hapgy Valley #1Q. .Jody Colombie ' Content-Type: appticatian,~msword Mechanical Integrity proposaLdoc ' Content-Encoding: base64 __ ___ __ __ _ _ _ _ _ _ _ __ I _ I Content-Type: applcationimsword '' MechanicatIntegrity of Welis Notice.doc Content-Encoding: base64 Content-'T'ype: appiication~msword HappyV alley 10_HearingNotice.doc Content-Epcoding: base64 2 of 2 9/29/2004 1:10 PM Public Notice Subject: Public Notice From: Jody Colombie yody Colombie@admin.state.ak.us> Date: Wed, 29 Sep 2.004 12:55:26 -0800 To: legal@alaskajournal. corn Please publish the attached Notice on October 3, 2004. Thank you. Jody Colombie Content-Type: application/msword 'Mechanical Integrity of Wells Notice.doc i Content-Encoding: base64 __ Content-Type: application/msword 'Ad Order form.doc- Content-Encoding: base64 lofl 9/29/2004 1:10 PM Citgo Petroleum Corporation Mary Jones David McCaleb PO Box 3758 XTO Energy, Inc. IHS Energy Group Tulsa, OK 74136 Cartography GEPS 810 Houston Street, Ste 2000 5333 Westheimer, Ste 100 Ft. Worth, TX 76102-6298 Houston, TX 77056 Kelly Valadez Robert Gravely George Vaught, Jr. Tesoro Refining and Marketing Co. 7681 South Kit Carson Drive PO Box 13557 Supply & Distribution Littleton, CO 80122 Denver, CO 80201-3557 300 Concord Plaza Drive San Antonio, TX 78216 Jerry Hodgden Richard Neahring John Levorsen Hodgden Oil Company NRG Associates 200 North 3rd Street, #1202 408 18th Street President Boise, ID 83702 Golden, CO 80401-2433 PO Box 1655 Colorado Springs, CO 80901 Kay Munger Samuel Van Vactor Michael Parks Munger Oil Information Service, Inc Economic Insight Inc. Marple's Business Newsletter PO Box 45738 3004 SW First Ave. 117 West Mercer St, Ste 200 Los Angeles, CA 90045-0738 Portland, OR 97201 Seattle, WA 98119-3960 I Mark Wedman Schlumber er 9 David Cusato ! Halliburton Drilling and Measurements 200 West 34th PMB 411 6900 Arctic Blvd. 2525 Gambelt Street #400 Anchorage, AK 99503 Anchorage, AK 99502 Anchorage, AK 99503 Baker Oil Tools Ciri Jill Schneider 4730 Business Park Blvd., #44 Land Department US Geological Survey Anchorage, AK 99503 PO Box 93330 4200 University Dr. Anchorage, AK 99503 Anchorage, AK 99508 Gordon Severson Jack Hakkila Darwin Waldsmith 3201 Westmar Cr. PO Box 190083 PO Box 39309 Anchorage, AK 99508-4336 Anchorage, AK 99519 Ninilchick, AK 99639 James Gibbs Kenai National Wildlife Refuge Penny Vadla PO Box 1597 Refuge Manager 399 West Riverview Avenue Soldotna, AK 99669 PO Box 2139 Soldotna, AK 99669-7714 Soldotna, AK 99669-2139 Richard Wagner Cliff Burglin Bernie Karl PO Box 60868 PO Box 70131 K&K Recycling Inc. Fairbanks, AK 99706 Fairbanks, AK 99707 PO Box 58055 Fairbanks, AK 99711 Williams Thomas North Slope Borough Arctic Slope Regional Corporation PO Box 69 Land Department Barrow, AK 99723 PO Box 129 Barrow, AK 99723 [Fwd: Re: Consistent Wording for Injection Ord~Well Integrity ... Subject: [Fwd: Re: Consistent Wording for Injection Qrders - From; John Norman <john_norrnan@admin,state.ak.us> Date: Fri, 0'1 Oct 2004 11:09:26 -0800 To: Jady J Colambie <Jody colombe@admn.state.ak.tis> more • Well Integrity (Revised)] ------- Original Message -------- Subject:Re: Consistent Wording for Injection Orders -Well Integrity (Revised) Date:Wed, 25 Aug 2004 16:49:40 -0800 From:Rob Mintz <robert mintz(a~law.state.ak.us> To:jim reg~(aadmin.state.ak.us CC:dan seamount a,admin.state.ak.us, john norman(u~admin.state.ak.us Jim, looks good, but I still think maybe it would be good to include the following sentence or something like it in the well integrity and confinement rule: "The operator shall shut in the well if so directed by the Commission." My thinking is that otherwise, an operator might argue that the Commission can only require the well to be shut in by going through an enforcement action, issuing an order after notice and opportunity for hearing, or meeting the strict requirements for an emergency order under the regulations. The proposed language makes clear that it is a condition of the authorization to inject, that the operator must shut in the well if directed by the Commission after a notification of loss of integrity, etc. »> James Regg <jim regg(~iadmin.state.ak.us> 8/25/2004 3:15:06 PM »> Rob -Thanks for the review; here's a redraft after considering your comments. I have accepted most of the suggested edits; also attached is response to questions you pose (responses are embedded in the comments, using brackets [JBR - ...] to set apart from your questions). Jim Regg Rob Mintz wrote: Jim, I have some questions about the draft language, which are shown as comments on the first document attached. Based on my current guesses about what the answers will be to my questions, I also have some suggested edits, which are shown as redlines on the second document attached. i »> James Regg <jim re~g(aadmin.state.ak.us> 8/17/2004 4:33:52 PM »> Please delete previous version (email sent 8/9/04); I found another inconsistency in the injection orders regarding well integrity that I have integrated into the proposed fix. Attached is a proposal for consistent language in our injection orders addressing 3 rules related to well integrity: - "Demonstration of Tubing/Casing Annulus Mechanical Integrity" - "Well Integrity Failure" - "Administrative Actions". This proposal includes input from all Sr. staff (except Jack). If you agree with the approach, I'll work with Jody to prepare the public notice. Main points - Demonstration of Tubing/Casing Annulus Mechanical Integrity - standardizes the wording used for mechanical integrity demonstrations, and establishes abililty to grant alternate methods (e.g., temp survey, logging, pressure monitoring in lieu of pressure testing 1 of 2 10/2/2004 4:07 PM [Fwd: Re: Consistent Wording for Injec.Orders -Well Integrity ... - specific to AIO 2C for Kuparuk, there is wording that is more appropriately included in Well Integrity Failure (i.e., more frequent MITs when communication demonstrated) - establishes more frequent MIT schedule for slurry injection wells (every 2 yrs) which is consistent with our current practice (but not addressed in regulations) Well Integrity Failure - retitles to "Well Integrity Failure and Confinement"; inserted language regarding injection zone integrity (see DIO 25 and 26) - consistent language regardless of type of injection (disposal, EOR, storage); - eliminates requirement for immediate shut in and secure; allows continued injection until Commission requires shut in if there is no threat to freshwater; - eliminates delay in notifying Commission after detect leakage or communication ("i.e., "immediately notify"); - removes language about notifying "other state and federal" agencies; - requires submittal of corrective action plan via 10-403; - requires monthly report of daily injection rate and pressures (tubing and all casing annuli); this is a requirement we currently impose when notified of leak or pressure communication; - notice and action not restricted to leaks above casing shoe as stated in several DIOs Administrative Actions - adopts "Administrative Actions" title (earlier rules used "Administrative RelieF'); - consistent language regardless of type of injection (disposal, EOR, storage); - uses "administratively waive or amend" in lieu of terms like "revise", "reissue", etc.; - adds geoscience to "sound engineering principles"; - language is more generic regarding fluid movement out of zone; existing versions mention varying combinations of protecting "freshwater", "aquifers", "USDWs"; "risk of fluid movement"; "fluid escape from disposal zone" Jim Regg _.. . '' John K. Norman <John Norman(a)admin.state.us> Commissioner I Alaska Oil & Gas Conservation Commission 2 of 2 10/2/2004 4:07 PM [Fwd: Re: Consistent Wording for Injection Orde~JVell Integrity ... • Subject: [Fwd: Re: Consistent Wording for Injection Orders - We1I Integrity (Revised}] From: John Norman <john norman a~adminatate.ak.us> . Date: Fri, O1 Oct 2004 11:08:55 -0800 To: Jody J Calombie <jody colombeCadmin.state.ak.us> please print all and put in file for me to review just prior to hearing on these amendments. thanx ------- Original Message -------- Subject:Re: Consistent Wording for Injection Orders -Well Integrity (Revised) Date:Thu, 19 Aug 2004 15:46:31 -0800 From:Rob Mintz <robert mintz(culaw.state.ak.us> To:dan seamount(a~admin.state.ak.us, jim regg(a~admin.state.ak.us, john norman(c~admin.state.ak.us Jim, I have some questions about the draft language, which are shown as comments on the first document attached. Based on my current guesses about what the answers will be to my questions, I also have some suggested edits, which are shown as redlines on the second document attached. »> James Regg <jim regg(aadmin.state.ak.us> 8/17/2004 4:33:52 PM »> Please delete previous version (email sent 8/9/04); I found another inconsistency in the injection orders regarding well integrity that I have integrated into the proposed fix. Attached is a proposal for consistent language in our injection orders addressing 3 rules related to well integrity: - "Demonstration of Tubing/Casing Annulus Mechanical Integrity" - "Well Integrity Failure" - "Administrative Actions". This proposal includes input from all Sr. staff (except Jack). If you agree with the approach, I'll work with Jody to prepare the public notice. Main points - Demonstration of Tubing/Casing Annulus LVlechanical Integrity - standardizes the wording used for mechanical integrity demonstrations, and establishes abililty to grant alternate methods (e.g., temp survey, logging, pressure monitoring in lieu of pressure testing - specific to AIO 2C for Kuparuk, there is wording that is more appropriately included in Well Integrity Failure (i.e., more frequent MITs when communication demonstrated) - establishes more frequent MIT schedule for slurry injection wells (every 2 yrs) which is consistent with our current practice (but not addressed in regulations) Welt Integrity Failure - retitles to "Well Integrity Failure and Confinement"; inserted language regarding injection zone integrity (see DIO 25 and 26) - consistent language regardless of type of injection (disposal, EOR, storage); - eliminates requirement for immediate shut in and secure; allows continued injection until Commission requires shut in if there is no threat to freshwater; -eliminates delay in notifying Commission after detect leakage or communication ("i.e., "immediately notify"); - removes language about notifying "other state and federal" agencies; - requires submittal of corrective action plan via 10-403; - requires monthly report of daily injection rate and pressures (tubing and all casing annuli); this is a requirement we currently impose when notified of leak or pressure communication; - notice and action not restricted to leaks above casing shoe as stated in several DIOs Administrative Actions 1 of 2 10/2/2004 4:07 PM [Fwd: Re: Consistent Wording for Injec>~rders -Well Integrity ... - adopts "Administrative Actions" title (earlier rules used "Administrative Relief'); -consistent language regardless of type of injection (disposal, EOR, storage); - uses "administratively waive or amend" in lieu of terms like "revise", "reissue", etc.; - adds geoscience to "sound engineering principles"; - language is more generic regarding fluid movement out of zone; existing versions mention varying combinations of protecting "freshwater", "aquifers", "USDWs"; "risk of fluid movement"; "fluid escape from disposal zone" Jim Regg John K. Norman <John Norman(a~admin.state.us> Commissioner Alaska Oil & Gas Conservation Commission _ __ __ 'Content-Type: application/msword .Injection Order language - questions.doc Content-Encoding: base64 Content-Type: application/msword ,Injection Orders language edits.doc Content-Encoding: base64 2 of 2 10/2/2004 4:07 PM • Standardized Language for Injection Orders Date: August 17, 2004 Author: Jim Regg Demonstration of Tubing_/Casing Annulus Mechanical Integrity The mechanical integrity of an injection well must be demonstrated before injection begins, after a workover affecting mechanical integrity, and at least once every 4 years while actively injecting. For slurry injection wells, the tubing/casing annulus must be tested for mechanical integrity every 2 years. The MIT surface pressure must be 1500 psi or 0.25 psi/ft multiplied by the vertical depth, whichever is greater, must show stabilizing pressure and may not change more than 10% during a 30 minute period. Any alternate means of demonstrating mechanical integrity must be approved by the Commission. The Commission must be notified at least 24 hours in advance to enable a representative to witness pressure tests. Well Irate rity Failure and Confinement The tubing, casing and packer of an injection well must demonstrate integrity during operation. The operator must immediately notify the Commission and submit a plan of corrective action on Form 10-403 for Commission approval whenever any pressure communication, leakage or lack of injection zone isolation is indicated by injection rate, operating pressure observation, test, survey, or log. If there is no threat to freshwater, injection may continue until the Commission requires the well to be shut in or secured. A monthly report of daily tubing and casing annuli pressures and injection rates must be provided to the Commission for ail injection wells indicating pressure communication or leakage. Administrative Actions Unless notice and public hearing is otherwise required, the Commission may administratively waive or amend any rule stated above as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in fluid movement outside of the authorized injection zone. • Standardized Language for Injection Orders Date: August 17, 2004 Author: Jim Regg Demonstration of Tubin 1Casing Annulus Mechanical Integrity The mechanical integrity of an injection well must be demonstrated before injection begins; at least once every four years thereafter (except at least once evezv two years in the case of a slurry injection well?, and. before returnin~a t~~ell to sen~ice. foilo~vin~ a workover affecting mechanical integrity, ~..;.' ~t 1 ~• ~* ~~ ~ ~~_~~ ~•*~ ~i~ -•*~ vw.x vuv~,. ~~ Unless an alternate means is approved by the Commission mechanical integrity must be demonstrated by a tubing pressure test using a ~ ?vl~~-surface pressure c~f~-k~ 1500 psi or 0.25 psi/ft multiplied by the vertical depth, whichever is greater, t11at m~~shows stabilizing pressure that does" not change more than 10°=x-percent during a 30 minute period. .. The Commission must be notified at least 24 hours in advance to enable a representative to witness pressure tests. Well Inte rite Failure and Confinement Except as otherwise provided in this rule Tthe tubing, casing and packer of an injection well must d~~-~~~r~-maintain integrity during operation. ~~Thenever any pressure communication, leakage or lack of injection zone isolation is indicated by iniection rate. operating pressure obsen~ation test survey, log or other evidence, tThe operator shall immediately notify the Commission and submit a plan of corrective action on a Form 10-403 for Commission approval, ` _ -- , ,. « ,~ max., > inje~~f=~,- •~~°. ~p~~~'""~~~r°°°„s.° .~'~•,~~,~~+~„~ ~-~~* .,.~~ The operator shall shut in the well if so directed by the Commission. The operator shall shut in the well without awaiting a response from the Commission if continued operation would be unsafe or would threaten contamination of freshwater ~'~......~U~zo~-r-~:~u...,. t'.~ .. ill t~. ~ '' Until~corrective action is successfully v ,~aiut tza ~n ~c,~~a~a. completed, Aa monthly report of daily tubing and casing annuli pressures and injection rates must be provided to the Commission for all injection wells indicating pressure communication or leakage. Administrative Actions Unless notice and public hearing is otherwise required, the Commission may administratively waive or amend any rule stated above as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in fluid movement outside of the authorized injection zone. [Fwd: Re: [Fwd: AOGCC Proposed WI Languag~ Injectors]] Subiect: [Fwd: Re: [Fwd: AOGCC Proposed WI Language for Injectors)) From: WllltOn Aubert <winton aubert@adinin.state.ak.us> Date: Thu, 28 Oct 2004 09:48:53 '-0800 To: Jady J Colombie <jacly_calombe@admin.state.akus> This is part of the record for the Nov. 4 hearing. WGA -------- Original Message -------- Subject: Re: [Fwd: AOGCC Proposed WI Language for Injectors] Date: Thu, 28 Oct 2004 09:41:55 -0800 From: James Regg <jim regg@admin.state.ak.us> Organization: State of Alaska To: Winton Aubert <winton aubert@admin.state.ak.us> References: <41812422.8080604@admin.state.ak.us> These should be provided to Jody as part of public review record Jim Winton Aubert wrote: FYI. -------- Original Message -------- Subject: AOGCC Proposed WI Language for Injectors Date: Tue, 19 Oct 2004 13:49:33 -0800 From: Engel, Harry R <Enge1HR@BP.com> To: winton aubert@admin.state.ak.us Winton... Here are the comments we discussed. Harry *From: * NSU, ADW Well Integrity Engineer *Sent: * Friday, October 15, 2004 10:43 PM *To: * Rossberg, R Steven; Engel, Harry R; Cismoski, Doug A; NSU, ADW Well Operations Supervisor *Cc: * Mielke, Robert L.; Reeves, Donald F; Dube, Anna T; NSU, ADW Well Integrity Engineer *Subject: * AOGCC Proposed WI Language for Injectors Hi Guys. John McMullen sent this to ws, it's an order proposed by the AOGCC to replace the well integrity related language in the current Area Injection Orders. Listed below are comments, not sure who is coordinating getting these in front of Winton/Jim. Overall, looks okay from an Operations perspective. We do have a few comments, but could live with the current proposed language. Note the proposed public hearing date is November 4. The following language does not reflect what the slope AOGCC inspectors are currently requiring us to do: "The mechanical integrity of an injection well must be demonstrated before injection begins, at least once every four years thereafter (except at least once every two years in the case of a slurry injection well), and * before* ** I of 3 10/28/2004 11:09 AM [Fwd: Re: [Fwd: AOGCC Proposed WI~uage for Injectors]] r return'.ng a well to service following a workover affecting mechanical integrity." After a workover, the slope AOGCC inspectors want the well warmed up and on stable injection, then we conduct the AOGCC witnessed MITIA. This language requires the AOGCC witnessed MITIA before starting injection, which we are doing on the rig after the tubing is run. Just trying to keep language consistent with the field practice. If "after" was substituted for "before", it would reflect current AOGCC practices. It would be helpful if the following language required reporting by the "next working day" rather than "immediately", due to weekends, holidays, etc. We like to confer with the APE and get a plan finalized, this may prevent us from doing all the investigating we like to do before talking with the AOGCC. "Whenever any pressure communication, leakage or lack of injection zone isolation is indicated by injection rate, operating pressure observation, test, survey, log, or other evidence, the operator shall* immediately*_** notify the Commission" This section could use some help/wordsmithing: "A monthly report of daily tubing and casing annuli pressures and injection rates must be provided to the Commission for all injection wells indicating well integrity failure or lack of injection zone isolation." Report content requirements are clear, but it's a little unclear what triggers a j well to be included on this monthly report. Is it wells that have been reported to the AOGCC, are currently on-line and are going through the Administrative Action process? A proposed re-write would be: "All active injection wells with well integrity failure or lack of injection zone isolation shall have the following information reported monthly to the Commission: daily tubing and casing annuli pressures, daily injection rates." Requirements for the period between when a well failure is reported and when an administrative action is approved are unclear. This document states "the operator shall immediately notify the Commission and submit a plan of corrective action on a Form 10-403". If we don't plan to do any corrective action, but to pursue an AA, does a 10-403 need to be submitted? The AOGCC has stated they don't consider an AA as "corrective action". Let me know if you have any questions. Joe -----Original Message----- From: Kleppin, Daryl J Sent: Wednesday, September 29, 2004 1:37 PM To: Townsend, Monte A; Digert, Scott A; Denis, John R (ANC); Miller, Mike E; McMullen, John C Subject: FW: Public Notices FYI -----Original Message----- From: Jody Colombie [ mailto:jody colombiec~admin.state.ak.us ] Sent: Wednesday, September 29, 2004 1:01 PM Subject: Public Notices Please find the attached Notice and Attachment for the proposed amendment of underground injection orders and the Public Notice Happy Valley #10. Jody Colombie «Mechanical Integrity proposal.ZIP » «Mechanical Integrity of Wells Notice.doc » 2 of 3 10/28/2004 11:09 AM Unocal Oil & Gas Divi~ Unocal Corporation P.O. Box 190247 Anchorage, Alaska 99519-0247 Telephone (907) 276-7600 Ui110CAL76 Environmental Group Alaska District March 19, 1987 EPA Region X 1200 Sixth Avenue Seattle, Wa. 98101 Attn: Mail Stop 409 RE: KU WD ~~1 Permit No. AK-2D0217-E ~~~ „~~ CO'~..,.,, I SR~t:,.; ~~ ~6~% :i ~IYW SFi'G~Li., ~~•~ a AS;~.4. aTA'T TECs~*? ~+TF~°i-1'ECHJ ~s=•1LE:~ Pursuant to requirements of the above permit, please find attached EPA Form number 7520-8. The available data for this injection well is for the month of February, 1987. On February 18, 1987, the Alaska Oil and Gas Association issued _:~~~` I.°° ;~,~,~r covering the Unocal operated WD ~~l disposal well the in Kenai Gas Field. Effective March 1, 1987, Unocal will be reporting injection pressure to the AOGL'C under the said Disposal Order, 'and will cease reporting to the EPA under Permit No. AK-2D0217-E. lew/2678p attachment cc: C.V,~Chatterton - RAC Very truly yours, ~, ~~-~"~ Candace Lockw d _, Environmental Department ~~E1~ ~~ R ~t55pp"'- /~ a:it?! `~° ~"~ ,$ ~id5 uUit5. i;,Gli1tn15Sls3! ~ z,K~ Oil Anct~;~; ~~e ALASKA OIL AND GAS CONSERVATION COMMISSION MONTHLY INJECTION REPORT 20 AAC 25.432 N N OIL COMPANY OF CALIFORNIA (UNOCAL) KENAI GAS FIELD February 1987 Name of Operator Field and Pool Month and Year of Injection 1. WELL 2. API NUMBER 3. 4. FIELD 5. TUE3ING P RESSURE CASING P RESSURE DAILY AVERAG E INJECTION TOTAL MONTH LY INJECTION NO. 50- ~ Q & POOL DAYS 6. MAX 7. AVERAGE 8. MAX .AVERAGE 10. LIQUID 11. GAS 12. LIOUID 13. GAS ~ CODE IN PSIG PSIG PSIG PSIG (BBL) (MCF) (BBL) (MCF) v OPER W D #1 133-20345 D 448057 ;28 1075 1075 _p_ _a 645 _0_ 18,048 _a RE~E ~~ E~ 3 19$1 ~~ mi Com ion ~~ Oil & A Cons. e h orag I hereby certify that the foregoing is true and correct to the best of my knowledge 14. ~ ~ ~'~ Signed ~, ^ Roy D. Roberts Title .Ep> i~rrmnt~l Fn;lil2f'r Date l~ ~ _ TOTAL 18, 048 ~~ .J Form 10-406 Rev. 12-1-85 INSTRUCTIONS ON REVERSE SIDE Submit in Duplicate v~..~ ~ v~ i ~uw~v ~ C,O ALASKA OIL AND GAS CONSERVATION COMMISSION MONTHLY INJECTION REPORT 20 AAC 25.432 N N OIL COMPANY OF CALIFORNIA (UNOCAL) KENAI GAS FIELD J Name of Operator Field and Pool Month and Year of Injection 1. WELL 2. API NUMBER 3. ~ 4. FIELD 5. TUC3ING P RESSURE CASING P RESSURE DAILY AVERAG E INJECTION TOTAL MONTH LY INJECTION NO. 50- Q & POOL DAYS 6. MAX 7. AVERAGE 8. MAX .AVERAGE 10. LIQUID 11. GAS 12. LIQUID 13. GAS U CODE IN PSIG PSIG PSIG PSIG (BBL) (MCF) (BBL) (MCF) OPER W D #1 133-20345 D 448057 ; 31 1, 030 780 _(~- _p_ 588 _0. 18, 239 _0.. RE E1V E© ~ 2 3 ~ga~ ~agk2t Oil Gas Guns. Gam..... _,t~n ! pgchorage he foregoing is true and correct to-the best of my knowledge I hereby certify that t 14. / ~~'' ~/' ~j~~ Signed R 0. Roberts Title Fnvi~tTJt`Atd1 F11gir~r __ __ Date ~ ~~~~~ TOTAL 8 ?.39 Form 10-406 Rev. 12-1-85 INSTRUCTIONS ON REVERSE SIDE Submit in Duplicate UNI~TATES ENVIRONMENTAL PROTECTION AGENC A WASHINGTON, DC 20460 IftiJECTION TELL PAOidITORI~dG REPORT form Approved OMB No. 2000-0042 Approval expires9-30-86 YEAR 9 MONTH MONTH MONTH Injection Pressure (PSI) FPbrUa. Minimum t 20 . Average 2 1, 075 . 3. Maximum 1, 075 Injection Rate (Gal/Min) Minimum 1 8.8 . Average 2 19. 3 . 3. Maximum 2 lar Pressure (PSI) A nnu Minimum 1 --- . era e 2 A --- . v g 3. Maximum --- n Volume (Gal) ti I o njec Total Monthl 1 758, 016 y . 2. Yearly Cumulative 1, 524, 054 (F°) T emperature Mirn m 1 mu . A a e 2 ver g . 3. Maximum H p m 1 Mi i . n mu A verage 2. 3. Maximum Other l Pit G 16 926 rave Beaver Creek 2 4 t Fi ld i G { ' k ~ > 4k': '~' as e Kena r~ -~'~.a r , Name and Address of Permittee Union Oil Company of Calif. P.O. Box 190247, Anch, Ak. 99519 Permit Number AK2D0?.17-E Name and Official Title (Please type or print/ ~y D . Roberts-EnvironiTlental Signature gineer ~~~ ` ~ ~~, f~~.~ ~ Date Signed G ~ }~/ r r~ / EPA Form 7520-B (2-84) CORRECTFA UN TATES ENVIRONMENTAL PROTECTION AGENC T A ir.V~B"°'~ WASHINGTON, DC 20460 IWJECTI0f41 lIVELL N~ORlITORI~IG REPORT Form Approved OMB No. 2000-0042 Approval expires9-30-86 YEAR 1987 MONTH MONTH MONTH Injection Pressure (PSI) JanU 1. Minimum 460 2. Average 780- 3. Maximum Injection Rate (Gal/Min) i Minimum . Average 2 19. 3 . 3. Maximum Annular Pressure (PSI) Minimum t . Average 2 --- . 3. Maximum °- Injection Volume (Gal) Monthly Total 1 766 038 . 2. Yearly Cumulative 766 038 erature (F°) Tem p Minimum 1 . Average 2 . 3. Maximum H p Minimum 1 . Avera 2 e . g 3. Maximum Other Gravel Pit 127 260 Beaver Creek 507 024 Kenai Gas Field 1 4 4~, r,... ~. .,.. r ._,. Ull u - - ., Name and Address of Permittee Union Oil Company of Calif. P.O. Box 190247 Anch. AK 99519 Fermit Number AK?.DO?.17-E Name and Official Title /P/ease type or print/ Ro D. Roberts Signature n ~ ¢~ ~- ' Date Signed .; EPA Form 7520-8 (2-84) ~ 4 v r • • Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of UNION OIL COMPANY OF CALIFORNIA (Unocal) for an order authorizing the underground disposal by in- jection of non-hazardous oil field waste fluids at the Kenai Gas Field. The Alaska Oil and Gas Conservation Commission has been requested by letter from Unocal dated January 20, 1987 to issue an order in conformance with 20 AAC 25.252. The order would authorize the disposal of non-hazardous liquid waste by injection into well KU-W.D. No. 1 and well KU-14A. These wells would be used for disposal of non-hazardous oil field waste fluids by injection into the Sterling Formation at the Kenai Gas Field, Kenai Peninsula, Alaska. A person who may be harmed if the requested order is issued, may file a written protest, prior to February 16, 1987, with the Alaska Oil and Gas Conservation Commission, 3001 Porcupine Drive, Anchorage, Alaska 99501 and request a hearing on this matter. If the rotest is filed timel and raises a substantial and material issue crucia to t o ommission s etermination, a earin on t o matter wi e e at t e a ove a ress at AM on Marc , in con ormance wit 5.5 I ~a earing is to e e intereste parties may con irm this by calling the Com- mission's office, (907) 279-1433, after February 16, 1987. If no such rotest is timel filed, the Commission will considerr t~ issuance o t e or er wit out a earing. w ~ ~-~ ~- W. W. Barnwell Commissioner Alaska Oil & Gas Conservation Commission Published January 30, 1987 STATE OF ALASKA ADVERTISING ORDER NO. AD!/ER~'ISING ~.~ .t~ ®RVE~ A®. ~,t~-~~:. ~.'-~j-rt(y. 3di~~~~ .~c".~€_~2z ~', ,,![~'..7~ A EN~a.~^-:..L~4.~`I. -i.. v'ci~F. s:a .,t~.E ii..7.~~.s~~i',': ~~y ~~~~~ F .a-', rt_~ a n T< i f ~$~v1~ R ~_="~.~?-`f~`:=-'~Yf,."' y .;~...~.a°S~+F°'u"y ~f~~y3 ~jr'° ~~~~ "• _ ~'' PHONE rj7t~~ ~ ~,~~ ~ M {907) DATES ADVERTISEMENT REQUIRED: 0 `y1 'r !'a f` ~~^~ . y,,~y., ii ... {rv „-i.4 c~ ('t eL7..!_:+iS~ `.3~~ ~ v?~i'7 i3'iJ4 _.cLG.~L. ~,TC S '..3 >e 3. LiJIS ~_VS;, y5 ~ 9e^,~q~~ (e (iy~fj-, i.lr6~TG-i.B-~'Y ~6ip ~ JF_4~ I U ~'-'~1~'r'L6s''~.+~, u.~r~°.. 9. ..~.°4.i..i? J~~`.~. ~ ~~ I.r`.S. B ~ I SPECIAL INSTRUCTIONS: H E R AFFI®AVIT ~F I'IJLICATI~N UNITED STATES OF AMERICA ~ E ~ ~ N D E ~ - STATE OF ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE A I THE ADVERTISING ORDER NUI±~IBER. ~., DIVISION. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. ' BEFORE ME, THE UNDERSIGNED, A NOTARY PU BLIC THIS DAY Notice ofPUblicHearing / PERSONALLY APPEARED _~L~,~-off. WHO, A-TTACI ~asl a ou nd has ~TION HERE. Conservation Commission. BEING FIRST DULY SWORN, ACCORDING TO LAW SAYS THAT ui ' N e i ppco e 'n V of , v IO o l_ a N , HE/SHE IS THE OF CALIFORNIA (Unocap for an order authorizing- the under- ground disposal by (njection of non-hazardous oil fieltl .waste fluids at the Kenei'Gas Field: PUBLISHED AT IN SAID DIVISION TheAlaskaO.llendGasConser- vation Commission has beeh ~~ Y AND ST TE O requested by letter from Uno- cal dated January 20, 198T #o issue an order in conformance A F AND THAT THE with 20 AAC 25:252. The order woultl euthoize ihe'd(sposal of non-hazardous liquid waste. by ADVERTISEMENT OF WHICH THE ANNEXED IS A TRUE COPY WAS > > injection into well KU•W.D. No. 1 and well KU=14A. These wells would be used for dispose) of non-hazardous oil'-filed waste PUBLISHED IN SAID PUBLICATION ON THE DAY OF fluidsbyinjectionintotheSter- ling Formation at the Kenai Gas Field, Kenai Peninsula, 19 ~~, AND THEREAFTER FOR ~ i Alaska. '! A person who may. be harmed if the requested order is issued, may file a writteh protest; pri- CONSECUTIVE DAYS, THE LAST PUBLICATION APPEARING ON THE '.t°heAlaskaroil and GasBCons rh vation Commission, 300t Portu= pine Drive, Anchorage, Alaska 99501 and request a hearing on DAY OF 19~, AND THAT THE .this matter If the protest is . .. filed timely and raises a- sub- stantial and materia6 issue cru- RATE CHARGED THEREON IS NOT IN EXCESS OF THE RATE cial to the Commission's teeer• m(nation, a nearing. on the matter will be held. at the above address at 9:00 AM` on CHA ED PRI~ E INDIVIDUALS. March 11, 1987, in conformance witn2oAAt2ss40.lfahearng is to be held, interested parties ~ may confirm this by calling-the ~ 1433, after Februairy 16~1987~if ' no such protest is 4imely filed, i SUBSCRIBED AND SWORN TO BEFORE ME the Commission -w111 consider ffie issuance of the order with- t ~ ~ THIS DAY OF ._Y "v -.;- _ 19~.f . out~a hearing. ~ /s/ W.W. Barnwell ';~+ t i,' + Commissioner ~ , ~~ ,' ~" Alaska Oil & Gas Conservation i Commission NOTARY PUBLIC FOR STATE OF ~'~ ~ Pub: January 30, 1997 ` MY COMMISSION EXPIRES ~~>tsca®~l~ ""~A~ ~ AO i -oe-sse2 ~2-901 (Rev. 6-85) PUBLISFIER ~3 Unocal Oil 8~ Gas Divis~ Unocal Corporation P.O. Box 190247 Anchorage, Alaska 99519-0247 Telephone (907) 276-7600 ~f~~.76 Alaska DistrictMT. Robert 5. Burd Director, Water Division US EPA Region 10 1200 Sixth Ave. Seattle, WA 98101 Gentlemen: January 3U, 1987 Mr. Bill Lamareaux Regional Supervisor AK Dept. of Environmental 437 E. St., Suite 200 Anchorage, AK 99501 -. ~T.(. ~ _.._.. ~t, l,. ;st~. roe ~~,AA~~_ l ~i,•'i i~`•li~ rv3 f~[i G~e 1~~l:A L ~!( V _ _. _. __ -- _ -- _~~ ~~s~!~_~ EP~t a fl~,~ST _F~~I'~ fi~'S7` STA 1' T~Ct ST'Al' ~'ECf ~~„ _- Conservatiori A detailed internal audit of 1985 and 1986 injection pressures for our Waste Disposal well, VID 4~1, in the Kenai Gas Field has just been completed. The audit revealed that maximum injection pressure numbers -vere incorrectly reported for October, November and December in 1985, and for January through April and June through October in 1986. Of these months, the permitted pressure limitation was exceeded in October through December 1985 and in February, March, April and August of 1986. A further investigation of records indicates: that the during November and December 1985 and in the four months in 1986, when limitations were exceeded, workover drilling fluids' were being injected. The excessive pressures were probably due to plugging of the perforations and formation by suspended solids. The plugged perforations would prevent the transmission of~pressure to the formation in this situation, thereby rendering the higher surface pressure not in correspondence -with formation pressures. Pressures encountered would therefore be higher on the inside of the well bore but substantially lower past the well bore and into the formation. Also, during the winter of 1985-1986 severe cold weather conditions had rendered our company-owned pumping unit inoperative. In order to continue .field operations, a pump truck from a local contractor was used- to inject waste waters. Under the extremely cold conditions this positive displacement triplex pump could not be operated at a slow enough rate to prevent the excessive. pressures. A combination of the workover fluid, high pressure pump, extreme sub-zero temperatures and lack of communication between personnel and contractor led to the incidences described above. To satisfy permit requirements and determine tfte effect, if any, the excessive injection pressures had on the formation a step-rate test and temperature survey were run in December, 1986. The results of the temperature survey clearly indicated that: the fluids injected during the step-rate test remained within the authorized injection intervals. There was no evidence that previous injection pract'c~ d affected the confining shale zone. During the step-rate test, aRr>~Idtrlll ~ e and ressure of 6.95 bpm and 1,180 psi were reached. P ~,~ ~ ~ p 31987 Alaska OD & Anchorage0ommisslon ~ • In order to prevent reoccurrence of the above situation, several corrective measures have been taken. Field personnel have been briefed in detail concerning the permit limitations, and associated penalties and consequences of non-compliance. A better fiiinS/recorrd keeping system has been instituted. Vibration dampeners have been installed on our meters to record pressures more accurately. A filter-system design for VDU #1 is being worked on, to minimize amounts of suspended solids injected. Copies of corrected monthly reports for respective monti~s are attached. The minimum and average injection pressure numbers derived from the audit differed from, tf~ose previously reported in some instances. However, since none of the minimum or average numbers exceeded the maximum allowable limit they have not been corrected. Should you have any questions, please feel free to give me a call. Very truly yours, G. A. Graham NKS/GAG/drm 096EiCi-~7 cc: C.V."°ChattertonA- AOGCC R~CEIV~D ~; ~ ~; p 31967 Alaska Oil & Anchora~eCommission ALASKA OIL AND GAS CONSERVATION COMMISSION MONTHLY INJECTION REPORT 20 AAC 25.432 N N OIL COh1PANY OF CALIFORNIA (UNOCAL) KENAI GAS FIELD Aril 19 6 Name of Operator Field and Pool Month and Year of Injection 1. WELL 2. API NUMBER 3. ~ 4. FIELD 5. TUf31NG P RESSURE CASING P RESSURE DAILY AVERAG E INJECTION TOTAL MONTH LY INJECTION NO. 50- Q & POOL DAYS 6. MAX 7. AVERAGE 8. MAX .AVERAGE 10. LIQUID 11. GAS 12. .LIQUID 13. GAS U CODE IN PSIG PSIG PSIG PSIG (BBL) (MCF) (BBL} (MCF) OPER W D #1 133-20345 D Kenai Gas N'~f 1360 900 -0- -0- 232 -0- 6850 -0- Field ~ n RECEIVE D ~° ~ ~, Alaska it & Gas Cons. mmission Anchorage I hereby certify that the foregoing is true and correct to the best of my knowledge 14. ~ ' ~"~'~'~' . Signed • y D. Roberts Date S~B~~6 Title -FI11f.12~fIt1~'.ntd)^ELl J 1_[1Pel= TOTAL 6950 J Form 10.406 Rev. 12.1-85 INSTRUCTIONS ON REVERSE SIDE Submit in Duplicate JINI L VI I\LI\.JI\I\ ALASKA OIL AND GAS CONSERVATION COMMISSION MONTHLY INJECTION REPORT 20 AAC 25.432 N N OIL COMPANY OF CALIFORtJIA (UNOCAL) KEtdAI GAS FIELD June 1986 Name of Operator Field and Poo l Month and Year of Injection 1. WELL 2. API NUMBER 3. 4. FIELD 5. TUf31NG P RESSURE CASLNG P RESSURE DAILY AVERAG E INJECTION TOTAL MONTH LY INJECTION NO. 50- ~ Q .~ U & POOL GODE DAYS IN OPEA 6. MAX 7 PSIG . AVERAGE PSIG S. MAX PSIG .AVERAGE PSIG 10. LIQUID (BBL) 11. GAS (MCF) 12. LIQUID (BBL) 13. GAS (MCF) W D #1 133-20345. D 448057 30 1100 800 -0- -0- 133 -0- 3999 -0- RE~~I ED ;;~ `~ ~ 0 3 987 Oil & Gas Can .Commission I hereby certify that the foregoing is true and correct to the•best of my knowledge Signed Y~~~-~• ~d~~-''~'~' Roy 0. Roberts Titte -Envityrrr>erttaL_Erx3ineer Date 7/ 11 /86 Form 10.406 Rev. 12-1-85 INSTRUCTIONS ON REVERSE SIDE 14. TOTAL 3999 Submit in Duplicate ALASKA OIL AND GAS~CONSERVATION COMMISSION MONTHLY INJECTION REPORT 20 AAC 25.432 N~jJ OIL COh1PANY OF CALIFORNIA (UNOCAL) KENAI GAS FIELD Name of Operator . Field and Pool Month and Year of Injection 1. WELL 2. API NUMBER 3. ~ 4. FIELD 5. TUE3ING P RESSURE CASING P RESSURE DAILY AVERAG E INJECTION TOTAL MONTH LY INJECTION NO. 50- Q & POOL DAYS 6. MAX 7. AVERAGE 8. MAX .AVERAGE 10. LIQUID 11. GAS 12. LIOUID 13. GAS U CODE IN PSIG PSIG PSIG PSIG (BBL) (MGF) (BBL) (MCF) OPER W D #1 133-20345 D 448057 ~1 110Q 800 _0_ _p_ 136 _p_ 4221 _a RE~~I ~ED r:.~ ~; o X987 A; !tia Gii & Gas G ns. Commission (archo ~e I hereby certify that the foregoing is true and correct to the best of my knowledge 14. Roy D. Roberts -~ ~~~ Title _)=tly.irpl'Tf~ntdLFflgine~r Date_ ___ TOTAL 4221 J Form 10.406 Rev. 12-1.85 INSTRUCTIONS ON REVERSE SIDE Submit in Duplicate STATE OF ALASKA ALASKA OIL AND G.AS CONSERVATION COMMISSION MONTHLY INJECTION REPORT 20 AAC 25.432 UNION OIL CC}~1PANY OF CALIFORNIA (UN OC',AL) I~NAI GA.S FIELD Name of Operator Field and Pool 1 WELL API NUMBER 3 2 . 4. FIELD 5. TUBING P RESSURE CASING P RESSURE DAILY AVERAG . NO. . 50- ~ Q & POOL DAYS 6. MAX 7 . AVERAGE 8. MAX .AVERAGE 10. LIQUID ,~ CODE IN PSIG PSIG PSIG PSIG (BBL) v ~ OPER WD #1 133-20345 D 448057 31 "1190 800 -0- -0- 126 August, 1986 Month and Year of Injection NJECTION TOTAL MONTHLY INJECTIC 11. GAS 12. LIQUID 13. GAS (MCF) (BBL) (MCF) -0- I 3930 I -0- I~E~~~ ED z- ~ ~ 0 31987 A!a 4:a Oii & Cas Co s. Commission I hereby certify that the foregoing is true and correct to the best of my knowledge Signed y~''r U .~L~~~-i ROY ROBERTS Environmental Engineer 'Septert~er 16, 1986 Title ____ Date~________ 14. 3930 TOTAL Hit»r~r~ vIL Hldu uf~J I~UIVJL'tSvl~I IVIV I~UIVIIV11551UN MONTHLY INJECTION REPORT 20 AAC 25.132 IIJJSIIJ QL COPIPANY OF CALIFORNIA (UNOCAL) KENAI GAS FIELD Nance of Operator. Field and Pool Month and Year of Injection 1. WELL 2. API NUMBER 3. ~ 4. FIELD 5. 1U[31NG P RESSURE CASING P RESSURE DAILY AVERAGE INJECTION TOTAL MONTH LY INJECTION NO. 50- Q i~ POOL DAYS 6. MAX 7. AVERAGE 8. MA`; .,. AVERAGE 10. LIQUID 11. GAS 12. LIQUID 13. GAS U CODE. IN PSIG PSIG PSIG PSIG (BBL) (MCF) (BBL) (MCF) OPER W D #1 133-20345 D 448057 130 1030 200 -0- -0- 282 -0- 8,465 -0- RE EKED ~~~~ o3198T Q-laska•Oil & G a Cans. Commissio horage I hereby certify that the for e going is true and correct to the best of my knowledge 14 f J Signed <'U•, ~. T~~.~:;~~ ' R Y 0. Roberts er'~ /- Title --Ef1y11~ITtk'~1t.c3LFl1glrx~Pr Date ~~, ~ ~~rl TOTAL 8,465 t Form 10-406 Rev. 12.1.85 INSTRUCTIONS ON REVERSE SIDE Submit in Duplicate ALASKA OIL AND GAS CONSERV/~TION COMMISSION MONTt-ILY INJECTION REPORT 20 AAC 25.432 N N OIL COh1PANY OF CALIFORNIA (UNOCAL) KENAI GAS FIELD Name of Operator Field and Pool 1. WELL 2. API NUMBER 3. 4. FIELD 5. TURING P RESSURE CASING P RESSURE DAILY AVERAG NO. 50- ~ Q & POOL DAYS 6. MAX 7 . AVERAGE 8. MAX .AVERAGE 10. LIQUID ~ CODE IN PSIG PSIG PSIG PSIG (BBL) V OPER W D #1 133-20345 D 448057 ; 31 1005 250 -0- -0- 266 I hereby certify tha/t~the foregoing is true and correct to the-best of my knowledge Signed _~~~~`~~~~-~i~~ Roy D. I~~erts i~ i~G Title -Efluittdl~irx~r Date Form 10.406 Rev. 12-1.85 INSTRUCTIONS ON REVERSE SIDE October 1986 Month and Year of Injection NJECTION TOTAL MONTHLY INJECTIC 11. GAS 12. LIQUID 13. GAS (MCF) (BBL) (MCF) -o- I 8222 -a ~~~~~ ~D r- ;: ~ 0 31957 . ~_~~ s Goymission Oii & Gay ~ ~~P 14. TOTA L Submit in DuplicatF . ., ..l~n Unocal Oil 8~ Gas Divisi~ WC" . ~,~~/ ~ Unocal Corporation f~ ~ " ~~u ~~ P.O. Box 190247 ~ r } A-~~~ ~ ~' ~ Anchorage, Alaska 99519-0247 ~: `.~ ~' ~,~- ~ ~ ~" ~, i7 ,: ~ ~ f r;'relephone (907) 276-7600 ~ ~~ is a_ UN CAL 76 -_ E ~ -~ G. a. Graham January 20, 1987 - -_ District Operations Manager ~ ~ -- Alaska District ~-y F~~ ~ j a~-. . _. ' Li4~~s.1dd:;:id4~t ~r1Gti0r ae Dear Mr. Chatterton: Mr. C. V. Chatterton, Chairman Alaska Oil and Gas Conservation Comm. 3001 Porcupine Drive Anchorage, Ak. 99501 INJECTION APPLICATION _ AS FIELD, KENAI P~~~I~NSULA , ALASKA Attached is the Kerlai Gas Field Injection Application. Union Oil Company of California, DBA UNOCAL, as operator of the Kenai Gas Field, requests that an injection order be issued to authorize the continued use of WD ~>El as a disposal well and to utilize KU 14-4 as a new disposal well, to inject rron-hazardous waste fluids generated during normal drilling, workover, and production operations. This application is submitted in accordance with the regulations set forth in 20 AAC 25.252. The Sterling formation is currently taking fluids injected into WD ~~1 through perforations from 3030'-3160', 3178'-3193', and 3235'-3250'. Injection into KU 14-4 will be accomplished in two phases. In Phase I, it is proposed to inject into the existing perforations open in the Sterling B-1 and B-2 gas sands from 4194'-4250'. The B-1 and B-2 sands watered out in late 1980. Phase II would be initiated after injection it Phase I is no longer possible. In Phase II, it is proposed to abandon the perforation from Phase I and inject into the Sterling formation through perforations fram 3156'-3180', 3198'-3244', 3296'-3318', 3333'-3354', and 3370'-3437'. Attachment 5 contains the casing diagram for WD ~~l and for KU 14-4, Phase I and II. C.V. Chatterton Alaska Oii & Gas Conservation Commission Disposal activities within the Kenai Gas Field are in compliance with Alaska Oil and Gas Conservation Commission Regulations and the Alaska Department of Environmental Conservation Regulations and will continue to operate in compliance with said regulations and orders. Very truly yours, G. A. Graham District Operations Manager ~. ~, t;,tit_1 ~~: ~ , .._ .~ ~ b Uui:Y:+U~St®i~ LETTER OF APPLICATION FOR AN INJECTION ORDER KENAI GAS FIELD, KENAI PENINSULA, ALASKA UNION OIL COMPANY OF CALIFORNIA A SUBSIDIARY OF UNOCAL ~~ ,~-~ ti~ ~ . ~ -. _:,,,~-,,gin. Al~~ka ~~;i ~ .. ~, .~ , , „...~ . ~.,;s;twra~e KENAI GAS FIELD INJECTION APPLICATION KENAI PENINSULA, ALASKA ~._'. ~-, , ,; s`~ ~ , . 20 AAC 25.252 (c)(1) ~I~S~t~ Ci +~ t~aS i;t;ilas ~ivaxi ~i;;~:~j~IY Arrch~ra~a Attachment No. 1 shows the location of all wells in the Kenai Gas Field, including well No. WD #1, the existing disposal well dr~d KU 14-4, the proposed disposal well. For this application, Unocal will use an area extending 1/4 mile (1320') radially from the bottomhole location of WD 4~1, whose center point is located 606' N and 2297' W of the SE corner, Section 31, T5N, R11W, SM and an area 1/4 mile (1320') radially from the bottom hole location of KU 14-4, whose center point is located 1177.03'N and 4489.35'W of the SE corner, Section 4, T4N, R11W, SM. 20 AAC 25.252 (c)(2) Union Oil Company of California, a subsidiary of Unocal Corporation, Marathon Oil Company, a subsidiary of USX Corporation, and Chevron USA are co-owners in tree Ker~iai Gas Field, with Unocal operating the field. Attachment No. 2 lists all operators and surface owners within one-quarter mile radius of each proposed disposal well. ~0 AAC 25.252 (c)(3) Attachment No. 3 is an affidavit showing that the operators ar~d surface owners within one-quarter mile radius of each proposed disposal well have been provided with a copy of this application. 20 AAC 25.252 (c)(4) Attachment No. 4 contains the geological information for the Kenai Gas Field, Kenai Peninsula, Alaska. 20 AAC 25.252(c)(5) Logs for individual wells are on file with the Alaska Oil and Gas Conservation Commission. Attachment No. 4 includes dual induction logs for WD 4~1 and KU 14-4. 2U AAC 25.252(c)(6) Attachment No. 5 is the casing diagram for well WD ~~1 and the proposed disposal well KU 14-4, Phase I and II, in the Kenai Gas Field. • 20 AAC 25.252(c)(7) & (8) Attachment No. 6 is a water analysis of fluid injected into WD ~~l during April, 1986. Unocal is currently permitted under ADEC permit 48423-D6015 for the infection into WD 441 of a maximum of 5,000 barrels/day and 150,000 barrels/year of non-hazardous waste fluids associated with the drilling, production and workover operations of oil and natural gas wells. The injection of any hazardous waste, as defined under 40 CFR 261, is prohibited. Based on the geological data presented, and the step-rate test dated December 18, 1986, Unocal requests a maximum surface injection pressure of 1500 psig for Well WD 44i. WD 441 will likely operate with an average surface injection pressure between 800-900 psig, but higher pressures will be needed to dispose of fluids prior to periodic well bore cleanout operations. KU 14-4 will operate with are average surface injection pressure between 500 to 1200 psig. The maximum disposal pressure will be adjusted based on step-rate tests to be performed after the well is put in service. 20 AAC 25.25'L(c)(9) The injection pressure for fluid disposal will be maintained at a pressure which will prevent injection or formation water from entering freshwater strata. A step rate test was performed on WD 441 December 18, 1986. Attachment No. 7 is a summary of that test showing that a fracture was .induced ir7 the formation at an estimated surface pressure of 1090 psig. Estimated fracture gradients within the KU 14-4 area vary from 0.67 to 0.78 psi/ft at the B-1 sand depth. The maxium operating surface pressure will be determined by a step-rate test conducted after the well is placed on injection. 20 AAC 25.252(c)(10) Attachment No. 4 contains information as to formation water and salinity for wells WD 441 and KU 14-4. 20 AAC 25.252 (c) (11) In,ection in WD #1 and KU 14-4 will occur below 3000'. All aquifers below 1300' within the Kenai Gas Field Boundary, and 1/4 mile beyond, are exempted ,~ for Class II activity. (Refer to Attachment No. 4 for geologic confining zones above 3000' and below 1300'.) Attachment No. 8 is a copy of 40 CFR 147.102 (b)(1)(C) referencing the Federal Exemption. 20 AAC 25.252(d) The Kenai Gas Field operator will monitor all disposal wells in accordance with the regulations of the Alaska Oil ~ Gas Conservation Commission. The monitoring program includes continued determination of disposal rates with flow meters. Injection volumes along wits.} tubing anc casing pressures are recorded daily. Unocal, as Operator will submit reports as required under this section for the Kenai Gas Field. 20 AAC 25.252(e) Unocal request a waiver of both requirements under this section. Limitations of the disposal equipment will not allow pressures to exceed 70% of the minimum yield strength of the casing-tubing and changes of 200 psi between readings occur on a frequent basis due to injection practices, thus making reporting impractical and a burden to both parties. As noted in section 20 AAC 25.402(c)(11) aquifers below 1300' within the Kenai Gas Field are exempt. 20 AAC 25.252(h) The wells within the Kenai Gas Field are shown on Attachment No. 1. To the best of Unocal's knowledge, all listed wells were constructed, and where applicable, abandoned in compliance with the requirements of the Alaska Oil and Gas Conservation Commission Regulations. ~r, ... r` '.: "i ^y . r + ,... ,~. r.+~ 4 ~:v:. }4G.yl.r ~ Attachment No. 2 20 AAC 25.402 (2) Listed below are the operators and surface owners within one-quarter mile radius of each proposed disposal well: Cook Inlet Region Inc. P.O. Drawer 4-N Anchorage, Ak. 99509 Leonard & Evelyn Keener P.O. Box 2521 Kenai, Ak. 99611 Kenai Peninsula Borough Box 850 Soldotna, Ak. 99669 State of Alaska Department of Natural Resources P.O. Box 70:4 Anchorage, Ak. 99510-0734 Mr. Doyle Jones Marathon Oil Production Co. P.O. Box 102380 Anchorage, Ak. 99510 Timothy Bruce Keener 106 Willow Street Kenai, Ak. 99611 Mr. Joe Dygas Bureau of Land Management 4700 E. 72nd Avenue Anchorage, Ak. 99507 Mr. W.J. Vasilauskas Chevron USA P.O. Box 5043 San Ramon, Ca. 94583-0943 I' R 12 W 19 [' KDU-7 (KU 42-30) ( 30 T E ~ „w,,,~_ KU 33-30 ~ N S/TE 33 -30 1 - }- KU 44-30~+ { I rc.°~ ~~" 31 `_ SITE 34-3/ ~ WD-I KU 3431 l -- I KU 1 I-6 20 e II W Attachment No. 1 21 29 28 ~` 33 KU 14-31 21-6 i3-8 6 14X_8) KUII-17 }- ~ 6 KU 43-6 KU 13-6 KBU 23X 1 S/TE .~3-/ - 6 Kru a3-sx 5 ~ KU 43-6A I0.t33-1 '. ~ I I KTU 13-5 "~''' KDU- I KU 24-5 et Z W KDU-8 /TE/4 ~ ~ {, {~ i + KU 14 KU 21-7 KBU ` ~ I S/TE4/- ~ •KDU-2(21-8) M KUII-8 KBU 31= KDU-4 KU 43-12 KDU-4RD (13-7)+~ T- 4,' ~ -- 13 +, R12W IB <DU-3(21-5) 17 o Apo iooo zooo F® RIIW .~ _L ~ ~~' m z D 4 / C z S?E /4-4 .~ ~ KU 14-4 I ~- ~i 16 unMsn KENAI GAS FIELD KU44-IB KU 41-19 S/TE 4/-/9 Attachment No. 2 20 AAC 15.402 (2) Listed t,eloav are the operators and surface owners within one-quarter mile radius of each proposed disposal well: Cook Inlet Region Inc. P.O. Drawer 4-N Anchorage, Ak. 99509 Leonard & Evelyn Keener P.O. Box 2521 Kenai, Ak. 99611 Kenai Peninsula Borough Box 850 Soldotna, Ak. 99669 State of Alaska Department of Natural Resources P.O. Box 7034 Anchorage, Ak. 995:10-0734 Mr. Doyle Jones Marathon Oil Production Co. P.O. Box 102380 Anchorage, Ak. 99510 Timothy Bruce Keener 106 Willow Street Kenai, Ak. 99611 Mr. Jce Dygas Bureau of Land Management 4700 E. 72nd Avenue Ancf~orage, Ak. 99507 Mr. W.J. Vasilauskas Chevron USA P.O. Box 5043 San Ramon, Ca. 94583-0943 Attachment No. 3 STATE OF ALASKA ) )ss Third Judicial District ) AFFIDAVIT Candace Lockwood, being first duly sworn on oath, deposes and says: That I am an employee of Union Oil Company of California (Unocal). That on tfie ~ ~'~ day of January, 1987, I caused to be mailed a true and correct copy of this application to the following operators and surface owners: Cook Inlet Region Inc. P.O. Drawer 4-N Anchorage, Ak. 99509 Leonard & Evelyn Keener P.O. Box 2521 Kenai, Ak. 99611 Kenai Peninsula Borough Box 850 Soldotna, Ak. 99669 State of Alaska Department of Natural Resources P.O. Box 7034 Anchorage, Ak. 99510-0734 Mr. Doyle Jones Marathon Oil Production Co. P.O. Box 102380 Anchorage, Ak. 99510 Timothy Bruce Keener 106 Willow Street Kenai, Ak. 99611 Mr. Joe Dygas Bureau of Land Management 4700 E. 72nd Avenue Anchorage, Ak. 99507 Mr. W.J. Vasilauskas Chevron USA P.O. Box 5043 San Ramon, Ca. 94583-0943 by placing said copy in the United States Mail with postage prepaid and certified at Anchorage, Alaska. r°~ Candace Lockwoo SUBSCRIBED AND SWORN to before me this ~d?x~Q day of January, 1987. ~9~ ~~ Nota Public in and for Alaska My commission Expires: ~~~ Attachment No. 4 GEOLOGUMMARY AND SHALLOW FORMATION WArtR SALINITY STUCY - KENAI UNIT WD ~~1, SECTION 31, TSN, R11NJ, SM KENAI GAS FIELD, ALASKA A shallow formation water salinity study was conducted in Union's, KU '~VD ~~1 well, located in the Kenai Gas Field, Alaska. The. purpose of this study was to determine the formation water salinities in the relatively shallow sand interval which underlies the Pleistocene glacial deposits and overlies the Pliocene .Lower Sterling Formation gas reservoirs. In addition, a subsurface evaluation was conducted to determine the stratigraphic relationship of the freshwater aquifers and the disposal well sands in the Kenai Gas Field. Results and Coinclusions: The sandy interval in KU WD 4~1, between 460' to 3273' (TVD) contains calculated equivalent salinities ranging from 1100 to 2600 ppm ~daCl. (Plate 1.) It is belsieved these calculated salinities represent a minimum baseline in equivalent ppm NaCl. In addition, the cement bond log (CBL) indicates good cement between the seven-inch (7") liner and the formation, indicating that "channeling of injected fluids behind pipe" into other intervals is not occurring. Annual temperature logs in KU WD ~~1 show the fluids are being injected only into the perforated intervals in KU WD ~~1. - Plates 2 and 3 (north-south and east-tivest geologic cross-sections) show the lateral continuity of the impermeable shale intervals. These shale intervals act as upper and lower confining impermeable units in the sand-rich Sterling Formation. The shales vary in thickness from three to 40 feet. The data available is therefore conclusive that the shales are areally widespread and prevent vertical fluid communication between sandstones. Plate 4 shows the stratigraphic relationship of the freshwater aquifers and impermeable claystone intervals in the Pleistocene strata overlying the Sterling Formation. The freshwater aquifers are generally fluvial channel sands bounded by lacustrine claystdnes. A major unconformity lies at the base of the Pleistocene strata (Top Pliocene Sterling Formation). This unconformity also acts as a barrier between the freshwater zone and the more highly saline Sterling Formation sands. Procedures and Methods: Only a Dresser Atlas Dual Induction Focused Log and Acoustic Cement Bond Log were run in KU WD ~~1. The sediments below the base of the glacial deposits (at 417' MD, Annotated Log, Plate 1) are in the upper and middle part of the Sterling Formation. These sediments are sands, siltstones, shales and occasional thin-bedded coals.. The sands are highly unconsolidated and generally uncemented. Shaded intervals on the Type Log indicate impermeable shale zones. Waste water is currently being injected in these Sterling Formation sands at the base of the wellbore from 3030'-3160', 3178'-3193', and 3235'-3250'. .. ~. • . ~".fir . ~., . ~ -~ ^~~~__ .<.~."" ~ ".' ~ ~ Log analysis of the DIFL in KU WD ~~1 indicates the shallow focused resistivity reading is consistently higher than the deep induction curve. This suggests the shallow focused curve is reading closer to the. true Rxo value, the flushed zone resistivity of the formation. No hydrocarbons are present in this interval. Using Schlumberger's Chart Sl~l-1 (Exhibit A), and assuming the average porosity of those sands to be 35% (based on detail log analysis of the Sterling Formation Gas Reservoirs), Rtiv values in these sands were determined. Maximum bottom hole temperature in the well was 100°F. Using a 35°F mean surface temperature, the thermal gradient in this well was calculated to 1.96°F/100'. By plotting both the Rw and formation temperature values on Schlumberger's Temperature and Resistivity Chart Gen. 9 (Exhibit B), an estimate of the formation waters' salinity was derived and is shown on the accompanying Type Log, KU WD ~~1. (Plate 1.) Also included is a detailed well completion schematic for the Union, KU-PJD ~~1 well (Exhibit C). Geologic Summary: The Sterling Formation of Pliocene Age is currently the disposal interval for the injected fluids in KU-t~JD ~~1 in the Kenai Gas Field. This formation is over 3500 feet thick in the area with the lo4rer +1100 feet containing commercial gas producing reservoirs. The Sterling Formation is made up of a thick sequence of massive sandstones and conglomeratic sandstones with impermeable interbeds of mudstone, siltstones and thin coals. This sequence was deposited by moderately large, meandering streams which were part of the main drainage system of the Cook Inlet Basin. These moderately large stream courses deposited point bar sands and flood p-lain silts and muds. The point bar sands are typically fining upward sequences of significant thickness and lateral continuity as are the interbeds of mudstone and siltstones. .~ A low angle unconformity occurs at the base of the Pleistocene strata (Quaternary glacial deposits), thus separating these deposits from the top of the Pliocene Sterling~Formation. The-glacial deposits consist of 'poorly to moderately consolidated fluvial channel sands and gravels with interbeds of glacio-lacustine claystones. KDK/pg ~, _ 766D ~~ June 20, 1985 l C Attachments: Plate 1: Annotated Type Log, KU WD ~61~ Plate 2: North-South Structural Cross Section, the Glacial and Sterling Formation Intervals Plate 3: East-West Structural Cross-Section, the Glacial and Sterling Formation Intervals Plate 4: North-South Structural Cross Section, Pleistocene Freshwater Aquifers and Impermeable Claystone Intervals in the Pleistocene Strata Exhibit A: Schlumberger Chart Stijl-1~ Exhibit B: Schlumberger Chart Gen. 9~ Exhibit C: Well Completion Schematic for KU-4~JD X61 Well ~ CONC R: R. Warthen District Development Geologist a C. - R'AT[RSArUR:\TIOV ~,,.~.~~ Saturation Determination (Clean Formations) ' ~ ~ :- ~ ~~ ~ m o~0 SZ m 5 •' ~ 30 10.000 .oas F R fi.cco 6 .Oi 2000 2 5 20 6.000 - . 4000 ~ 3 3,000 - 1000 800 2.000 8 .02 - 4 600 t0 5 a00 1.000 600 t 0 _ 03 6 300 g - 600 - 7 200 6 400 t2 .04 .. 9 5 300 .OS 10 100 80 a 2C0 14 .O6 60 16 15 40 3 tC0 60 t8 .08 30 60 20 •1 - 20 20 2 - a0 25 30 30 10 g 20 25 2 35 40 6 ~ i t0 30 6 .3 0.62 FR= 8 6 ' ~z.ts s a 40 .4 5 3 .5 4 2 50 .6 3 t 1.0 ~ 2 4 . . - 70 - .. . ,, ._ _ - .2 - 80 _ - ~ ._ 3.0 ~ ~• • ~ Ra-FpR„, _- ~ R ~ ©Schlum0erger ' - ~ - -~ • This nomograph solves the Archie water~saturation e ,anon ~ - ~ - FR . It should be used in clean •`. - , (nonshaly) formations only. [f Ro (resistivity when I,, J% water sat urated) is known, a straight Gne from the known ~ • • value through the measured R, value gives water saturation, 5,.. [f Ru is not known, it may be determined by connecting ' - .. • the formation water resistivity, Rw, with the formatio n resistivity factor, Fk, or porosity, ~. • - EXA~IPL~: RW = 0.05 :'•m at fo:ma:ca ..., ~,cratv:_ ... ~ °. Coro (pR = ~) -. . ~ = lO it•m -- - Thus, ~, = 31.6010 . . .. - Sw-1 - ~ ~ ' . 75 EXHIBIT 'A - Ii~SfC'~1,~rEKI.AL ~~~ Resistivity I~IomoQrapn for I~TaCI Solutions C , C This nomosraph may be used to estimate the resistivity of a water sample at a given temperature ~~•hen [he salinity (NaCI concentration) is known, or to estimate the salinity when resistivity and temperature are known. It may also be used to convert resistivity from one temperature to another temperature. E,`Cr1itiIPLE: Resistivity of a water sample is 0.3 ~•m at 3S°C; what is its resistivity at 3S'C? Draw a line connecting the 2S'C point with the 0.3 ~•m R point. This indicates a salinity of 20,000 ppm. Pivoting about this salinity point yields a water sample resistivity of O.13 n•m at SS°C. R Conversion approximated by: ~•m .C1 Tomperoture RZ-R~ (T,+6.77, ``'`D'"°F F C or y 50 10 R, = R T~ +'I •~ l •°C Concentration ~ .C2 . ~ (T_ +21 S / ~ g/kg gr~gal so ~ or cCv 24°C ~ .C3 ppm(x1000) or75°F as 300 T ?7500 70 20 - 200 13000 +~ .CS 10000 + .C6 100 i 7r 80 - 80 =-- 5000 ~ AS 30 60 - 000 -+- 0 1 90 y '_000 40 ~ , 100 30 cCCO 40 20 000 50 10 ~' g ~- 500 60 ~- 400 6 150 _ ~ ~ : - 300 200 4 3 200 .. 80 ` `_ `' ~ . 2 • ~ 100 100 250 -{- 120 140 300 160 180 400 200 220 240 500 260 2 .3 .4 .5 .6 .8 1.0 _ 1 50 2 .8 a0 .6 30 3 4 _ 20 4 - .3 1 5 .2 6 _ ~ ~ 10 . • ~$tMumOerget 20 Gen-9 5 EXHIBIT B Unocal Oil & Gas Div Unocal Corporation P.O. Box 190247 Anchorage, Alaska 99519-0247 Telephone (907) 276-7600 • UN®CAL76 Alaska District October 3, 1986 T0: R. D. Roberts FROM: K. D. Kiloh SHALLOW FORMATION WATER SALINITY STUDY KENAI UNIT 14-4, SECTION 4, T4N, R11W, SM KENAI GAS FIELD, ALASKA Attachment No. 4 As per your request, a shallow formation water salinity study was conducted in Union's KU 14-4 well, located in the Kenai Gas Field, Alaska. The purpose of this study was to determine the formation water salinities in the relatively shallow, sandy interval from 1069' (the 11-3/4" casing shoe) to 4262', the base of the water productive B-2 sand in the Lower Sterling Formation gas sand • ~ interval. In addition, an east-west geologic cross section was constructed to show the lateral continuity of the impermeable shale/siltstone intervals which prevent vertical migration of the injected fluids. Results and Conclusions: Formation evaluation in the interval from 1069' to 3942' in KU 14-4,-indicates the sand zones contain formation waters having equivalent salinities ranging from 1100 to 2700 ppm NaCl. These salinity values are supported by water analyses from the B-1 and B-2 gas sands that contain 1100 ppm NaCl from a January 1983 test. During a November 1960 production test in the B-3 gas sand, formation water was produced, and analyzed. The results from this test were 1100 ppm NaCl (63 grains/gallon). The calculated salinities resulting from this study represent at best, a baseline minimum in equivalent ppm NaCl. Factors such as mud cake thickness and the flushed zone fluids in the borehole environment affect the Rxo measuring device (16-inch normal on the Induction-Electrical log), resulting in a lower recorded resistivity than the true Rxo value. Also, the presence of bivalent ions such as magnesium, calcium and potassium, etc., in the formation waters will affect salinity calculations giving a lower equivalent ppm NaCl value than is actually present. • T0: R. D. Roberts FROM: K. D. Kiloh October 3, 1986 Page Two • Procedures .and Methods: A Schlumberger Induction-Electrical log and Sonic log were run in KU 14-4. Sonic porosities were not used in this study because field-wide studies indicate they are too high (37 to 42%). Log analysis indicates the sediments from 1069' to 5039' (Plate 1) are sandstones, siltstone/shale, and occasional thin-bedded coals. The sands are unconsolidated and generally uncemented. The B-1 and B-2 sands are recommended for Phase 1 injection since open perforations are present and these sands are not gas productive. Sands ~~1 through ~~5 are recommended for Phase 2 injection. Both proposed injection zones are colored light green on the annotated log and cross section. Subsequent injection phases will involve uncolored sands ~k6 through ~~16. The orange-colored intervals on the log and cross section (Plate 2) indicate impermeable shale/siltstone units which will. prevent vertical communication of the injected fluids. Plate 2 shows. the lateral continuity of the impermeable shale/siltstone intervals which vary in thickness from 5 to 29 feet. This section runs from Union, WD4k1 to Union, KU 14-4. In evaluating the Induction-Electrical log, it was noted that the 16-inch normal curve was consistently reading higher resistivity measurements than the induction curve. This suggests that the 16-inch normal curve is reading closer to a true Rxo measurement, and did not require a borehole correction. Using Schlumberger's Chart Sw-1 (Exhibit A), and assuming the average porosity of those sands to be 35% (based on detail log analysis of the Sterling Formation gas reservoirs), Rw values in these sands were determined and are indicated on Plate 1. Maximum bottom hole temperature in this well is 124°F. Using a 35°F mean surface temperature, thermal gradient in this well was calculated to be 1.74°F/100 feet. By plotting both the derived Rw and formation temperature values at specific depths in the wellbore on Schlumberger's Temperature and Resistivity Chart Gen. 9 (Exhibit B), an estimate of the formation waters' equivalent salinity was derived and is shown on the annotated log for KU 14-4. KDK/pg 1965D Attachments: Plate 1: Annotated Type Log KU 14-4 Plate 2: East-West Structural Cross Section, The Glacial and Sterling Formation Intervals Exhibit A: Schlumberger Chart Sw-1 Exhibit B: Schlumberger Chart Gen. 9 CONCUR: • ~ ar en `strict De opment Geologist R'.4TLR SATURATION Saturation Determination • ~ (Clean Formations) ~ ~~ R, ~• Sl•m m 5 30 to,000 .008 % FR s,ooo s s,ooo .01 2000 20 2s a,ooo 3 1000 3,000 S 800 2,000 4 600 .02 10 5 400 1,000 300 18 800 10 .03 6 600 ~ 200 6 400 12 8 , .04 9 5 300 i~ 14 .OS 10 80 4 200 .~ 60 16 .08 15 40 3 80 18 30 60 20 •1 20 20 2 40 25 30 10 20 25 30 g .2 35 6 40 5 1 10 30 4 • .8 8 .3 0.62 s FR = 2.15 .6 4 40 .4 5 3 .5 2 .4 50 .6 .3 1 .8 6 60 1.0 2 .4 70 80 .2 90 2.0 1 .1 100 _ . .08 ~v = 3.o Ro ° Fa RW R ©Schlumberger - R - FR W ' This nomograph solves the Archie water saturation equation Sµ' - It should be used in clean ` (nonshaly) formations only. If Ro (resistivity when 100% water saturated) is known, a straight line from the known Ro value through the measured R, value gives water saturation, SW. If Ro is not known, it maybe determined by connecting the formation water resistivity, RW, with the formation resistivity factor, FR, or porosity, ~. EXAMPLE: Rµ, = 0.05 S2•m at formation temperature (Q = 20% (FR = 20) R, = 10 12 • m Thus, ~ = 31.6% SW-, EXHIBIT A 75 • • • Resistivity Nomograph fog NaCI Solutions BASIC 1L~TLRIAL This nomograph may be used to estimate the resistivity of a water sample at a given temperature when the salinity (NaCI concent ration) is known, or to estimate the salinity when resistivity and temperature are known. It may also be used to con vert resistivity from one temperature to another temperature. EXAMPLE: Resistivity of a water sample is 0.312•m at 25°C; what is its resistivity at 85°C? Draw a line connecting the 25°C point with the 0.3 S2•m R point. This indicates a salinity of 20,000 ppm. Pivoting about this salinity.point yields a water sample resistivity of 0.13 Sl•m at 8s°c. R Conversion approximated by: ~'m __ ~T,+6.77) ° RZ R~ s~; F (Ar .01 Te Fpera Cre p T +6.77 z ° ° 50 t0 or T +21.5 ,°C Concentration R~ = R, ' , •02 TZ + 21.5 g/kg gr/gal so or @ 24°C .03 ppm(x1000) or75°F 20 300 17500 .oa 70 200 13000 .05 10000 06 80 100 80 5000 .08 30 fi0 4000 0.1 90 3000 40 100 30 2000 40 20 •2 1000 50 10 .3 60 8 - 500 .4 150 400 6 .5 300 8 4 80 3 200 .8 2 1.0 200 100 100 1 8 50 2 250 120 40 .6 30 3 140 .4 20 300 3 4 160 5 .2 8 180 8 400 200 10 220 240 5~C1 26l) `Schlumberger 2t) Gen-9 EXHIBIT B 5 PHASE I KU 14-4 W.O. PRESENT 11-3/4", 42#, H-80 CASING AT 1,069' PHASE II PROPOSED 4-1/2" Tubing 7/8", 6.4#, N-80 Tubing "XA" Sleeve at +2,480 Perm. Paker at ±2,500 3156'-3180', 3198'-324 3296'-3318', 3333'-3354 33 70'-343 7 Baker Sleeve at 4, 1 1 1' ~ Baker `~G-22' locator at 4, 147' Baker Model °D" Packer at 4, 148' r n D at +4,000 . _ ~ Retainer at ±4, 160 ~ ~ Baker Mule Shoe at 4, 158' 4,194' - 4,250' STERLING B-1 8~ B-2 SANDS RETAINER AT 4,500' 4825'-27' 4885'-4926' RETAINER AT 5,043' 7", 23# ~ 26#, S-95, J-55 8~ N-80 CASING AT 5,102' D w z 0 ttachment No. 5 9-5/8', 47~, N-80 Driven to 180' /2', 12.6, N-80 Buttress Tubing )1'-1,503' Squeezed A' Sleeve at 2,115' WC Perm. Packer at 2,147' "X' Nipple at 2,162' W/L ReEntry Guide at 2,174' l ~k. g 30'"-3,160' Ope~~ ~ w i .... .. <a .. »r_ 7$'-3,193' d~~en ;~~ ~~ 35'-3,250' Open D. at 3,252' (Top of Cement) ~ 29f, N-80 Casing at 3,278' *See Packer Schematic For Further Dimensions uNOCa~~ KENAI GAS FIELD 'WASTE DISPOSAL INJECTION WELL ~F1 W.O. .. ~ ~_ attachment No. 6 APP 2 ~ 1986 ~.~ _°~~ CHEMICAL 8c GEOLOGICAL LABORATORIES ~'F~~~NC. P.O. BOX 4-1276 TELEPHONE ANC ~•*°^~~~ Anchorage, Alaska 99509 (907) 562-2343 e~ AFP 181986 WATER ANALYSIS REPORT Ak Environmenta- Group OPERATOR TJnion Oil Co?rx~anv DATE 4J2/86 LAS NO. 2474 WELL NO. Disposal Well LOCATION ----- FIELD Kenai Gas Field FORMATION -- - COUNTY ---- INTERVAL --- STATE Al asks SAMPLE FROM Prnc3n~c-~3 raatPr Tn~~-tPr3 ini-n WD #l, Kenai Gas Field REMARKS & ONCLUSIONS: ~G~ ' Cations mg/i meg/i Sodium ............. 1012 44.04 Potassium ........... 7h 1 _95 Calcium ............. 92 4 _ 59 Magnesium .......... 22 1 _ R1 Iron ................ 0.42 --- Total Cations ......... 5? ~~L Total Anions .......... ~.2 3g Total dissolved solids, mg/1 .......... 3005 Specific resistance @ (i8° F.: NaC1 equivalent, mg/1 .............. 2885 Observed .......... 2 = 6 ohmmeters Observed pH ....................... 7.7 Calculated ......... 2.4 ohmmeters - WATER ANALYSIS PATTERN Scale Sample above described MEQ per Unit_ Na Ca Mg Fe Anions mg/i meg/i Sulfate .............. --- --- Chloride ............. LS00 42..30- Carbonate ........... ---- --- Bicarbonate ......... 61~ ~ 0 OA Hydroxide ........... ---- --- ' C1 10 Na HCO' S Ca SO' 1 Mg CO' 0 Fe C1 HCOa SO' CO' (Na value in above graphs includes Na, K, and L1) NOTE: Mg/1 =Milligrams per Ilter Meg11= MIIligram equivalent per liter Sodium Chloride equivalent=by Dunlap & Hawthorne calculation from components ~~~ v' iJ ),/' • Attachment No. 7 Union Oil Compar~f California um~n December 31, 1986 TG: C. H. CASE FROM: S. L. TREM RE: WD-1 STEP RATE TEST AND TEh4PERATURE SURVEY J~~I 5 I987 ~. ~~ . Locxvvoo On December 18, 1986, a step rate test was run on well WD-l. The folownc~ volumes and pressures were recorded: RATE CUMULATIVE VOLUME FINAL PRESSURE 0.413 BPPf 37 bbls 90 psi 1.106 BPM 87 bbls 990 psi 2.078 BPM 193 bbls 1050 psi 3.290 BPM 249 bbls 1100 psi 4.900 BPM 347 bbls 1150 psi 6.950 BPM 500 bbls 1180 psi Dynamic temperature surveys were run before and after the test. The first dynamic survey was run while the well was injecting at 1.25 BPM, prior to the step rate test; the second dynamic survey was run while the well was in a fractured state, at a rate of 3 BPM. A total of 2500 barrels of cold (35°F) water was injected prior to the second cJynamic survey. The well-was then shut in for six hours and a static temperature survey was run. This survey (Run r'~4) clearly showed the zones which took water: 3030' to 3100', 3145' to 3160', 3180' tc 3195', and 3230' to 3250'. The confining shale zones were not broken down by the fracture; there is no evidence that the injected water broke into any fresh water zones. SLT/ejj/0308r Attaci~ment ' ~ ~ KENAl GAS FIELD IUD-1 Steu Rate Test Calculation of Fracture Gradient Fracture Pressure = 1090 psig (wellhead) Fluid Gradient (fresh water} = 0.433 psi/ft Top Perf. Depth: 3030' Fracture Gradient = (1090 + 14.7) + (0.433)(3030) 303G' = 0.797 psi/ft 5LT/e,ji0308r/~ i2-~1-8b 12 KEN AI GAS FIELD WELL WD-1 STEP RATE TEST December 18th - 19th, 1986 1100 .-. _~ ~ 1000 a v W (n 07 W 900 a w e0o X00 ESTIMATED FRACTURE PRESSURE = 1,090psi 1.0 2.0 3.0 4.0 5.0 6.0 7.0 WATER INJECTION RATE (BPM) i C \_ 132:0502 u Attachment No. 8; FEDERAL REGULATIONS made a part of the applicable UIC pro- gram under the SDWA for the State of Alabama. This incorporation by reference was approved by the Director of the Fed- eral Register on June 25, 1984. (1) Code of Alabama 1975, §§ 9-17-1 through 9-17-110 (1980 and Supp. 1983); (2) State Oil and Gas Board of Ala- bama, Oil and Gas Report 1 (supple- mented) (1981), General Order Pre- scribing Rules and Regulations Governing the Conservation of Oil and Gas in Alabama (Order No. 76-100) as amended by Board Order No. 82-96 (May 14, 1982) amending Rule E-4). (b) The Memorandum of Agreement. between EPA Region IV and the Alabama Oil and Gas Board, signed by the EPA Regional Administrator on June 16, 1982. (c) Statement of Lega! Authority. "State Oil and Gas Board has Authority to Carry Out Underground Injection Con- trol Program Relating to Class II Wells as Described in Federal Safe Drinking Water Act -Opinion by Assistant Attorney General," May 28, 1982. (d) The Program Description and any other materials submitted as part of the application or as supplements thereto. §147.51 State-administered program - Class I, III, IV and V wells The UIC program for Class I, III, IV and V wells in the State of Alabama is the program administered by the Alabama Department of Environmental Manage- ment, approved by EPA pursuant to Sec- tion 1422 of the SDWA. Notice of this approval was published in the Federal Register on August 25, 1983 (48 FR 38640); the effective date of this program is Augus[ 25, 1983. This program consists of the following elements, as submitted to EPA in the State's program application: (a) Incorporation by reference. The re- quirements set forth in the State statutes and regulations cited in this paragraph are hereby incorporated by reference and made a part of the applicable UIC pro- gram under SDWA for the State of Ala- bama. This incorporation by reference was approved by the Director of the Federal Register on June 25, 1984. (1) Alabama Water Pollution Control Act, Code of Alabama 1975, §§22-22-1 through 22-22-14 (1980 and Supp. 1983); (2) Regulations, Policies and Proce- dures of the Alabama Water Improve- ment Commission, Title I (Regulations) Rev. December 1980), as amended May 17, 1982, to add Chapter 9, Underground Injection Control Regulations (effective June 10, 1982), as amended April 6, 1983 (effective May 11, 1983). (b) The Memorandum of Agreement between EPA Region IV and the Alabama Department of Environment Management signed by the EPA Regional Administra- tor on May 24, 1983. (c) Statement of Legal Authority. (1) "Water Pollution-Public Health-State has Autl-,ority to Carry Out Underground injection Contro) Program Described in Federal Safe Drinking Water Act- Opinion by Legal Counsel for the Water Improvement Commission," June 2b, 1982; (2) Letter from Attorney, Alabama Water Improvement Commission, to Regiona! Administrator, EPA Region IV, "Re: AWIC Response to Phillip Tate's (U.S. EPA, Washington) Comments on AV'JIC's Firal Application for Class I, III, IV, and V UIC Program," September 21, 1982; (3) Letter from Alabama Chief Assistant Attorney General to Regional Counsel, EPA Region IV, "Re: Status of Independent Legal Counsel in Alabama Water Improvement Commission's Underground Injection Control Program," September 14, 1982. (d) The Program Description and any other materials submitted as part of the application or as supplements thereto. Subpart C-Alaska § 147.if30 State-administered program. [Reserved] §147.101 EPA-administered program. (a) Contents. The UIC program for the State of Alaska is administered by EPA. This program consists of the UIC program requirements of 40 CFR Parts 124, 144, and 146, and additional requirements set forth in the remainder of this subpart. Injection well owners and operators, and EPA, shall comply with these requirements. ' (b) Effective date. The effective date of the UIC program for Alaska is: June 25, 1984. §147.102 Aquifer exemptions. (a) This section identifies any aquifers or their portions exempted in accordance with §§144.7(b) and 146.4 of this chapter at the time of program promulgation. EPA may in the future exempt other aquifers or portions, according to applica- ble procedures, without codifying such ex- emptions in this section. An updated list of exemptions will be maintained in the Re- gional office. (b) The following aquifers are exempted in accordance with the provisions of §§144.7(b) and 146.4 of this chapter for Class II injection activities only: C (1) The portions of aquifers in the Kenai Peninsula, greater than the indicat- ed depths below the ground surface, and described by a '/a mile area beyond and lying directly below the following oil and gas producing fields: (A) Swanson River Field-1700 feet. (B) Beaver Creek Field-1650 feet. (C) Kenai Gas Field-1300 feet. (2) The portion of aquifers beneath Cook Inlet described by a '/a mile area beyond and lying directly below the fol- lowing oil and gas producing fields: (A) Granite Point. .,.~~ (B) McArthur River Field. (C) Middle Ground Shoal Field. (D) Trading Bay Field. (3) The portions of aquifers on the North Slope described by a '/< mile area beyond and lying directly below the Ku- paruk River Unit oil and gas producing field. §147.103 Existing class I, II (except en- - hanced recovery and hydrocarbon storage and III wells authorized by rule Maximum injection pressure. The own- er or operator shall limit injection pressure to the lesser of: (a) A value which will not exceed the operating requirements of §144.28(f)(3)(i) or (ii) as applicable; or (b) A value for well head pressure cal- culated by using the following formula: Pm=(0.733-0.433 Sg)d where ~~ ~ 'ey .X ,. ,. _ , ~ ,, _,,~~t `3:1 ~. ~tnc^tc~. _ .. 3. Environment Reporter [Sec. 147.103(b)1 t 52 ~~ • ~ ~~ UIC PERMIT APPLICATION KU WD-1, KENAI GAS FIELD KENAI PENINSULA,ALASKA UNION OIL COMPANY OF CALIFORNIA ~~~~-~ ~~ ., ~u~.;,s~~issiat~ Alaska u,; ' ~ Union Oil and Gas~ision: Western Region Union Oil Company~5f California P.O. Box 6247, Anchorage, Alaska 99502 Telephone: (907) 276-7600 ~ um%n June 24, 1985 ' Mr. Gerald Opatz Environmental Protection Agency Region X ' 1200 Sixth Avenue Seattle, WA 98101 ' Dear Mr. Opatz: . RE. UIC PERMIT APPLICATION; KENAI UNIT WD-l, ' KENAI GAS FIELD Enclosed is a complete Underground Injection Control Permit Application for Well KU WD-1, an .existing Class II, type 'D' Produced Fluid Disposal Well. WD-1 is currently being operated under 40 CFR 144.21 (b) (authorized by rule) and Alaska Department of Environmental Conservation Waste Disposal Permit ~~8423-DB015. ' Union Oil Company of California requests a single well permit allowing us to continue disposal operations. All operations associated with WD-1 have been, and will continue to be performed in compliance with the Alaska 0i1 and Gas Conservation Commission (AOGCC), the Alaska Department of Environmental Conservation (ADEC), and the Bureau of Land Management (BLM). Attachment A-l contains applicable AOGCC and BLM regulations. Injection in WD-1 is occurring below 3000'. All a uifers below 1300' q within the Kenai Gas Field Boundary, and l/4 mile beyond, are exempted ' for Class II activity, as allowed under 40 CFR 147.102 (b), (1), (C). Union Oil requests a waiver of the injection pressure. limitation described under 40 CFR 147.103 (b). Included within this permit is ' geological, construction and engineering data to verify that a contamination of non-exempt underground sources of drinking water would not be possible. We, therefore, request the surface injection pressure ' limitation be raised to 1500 psi. During the interim prior to granting this request, Union Oil will continue to operate in compliance with applicable regulations. • • Mr. Gerald Opatz Environmental Protection Agency Page two Your immediate action to this application will be appreciated. If there are any questions or need of assistance, do not hesitate to contact Larry Cutting or Candy Lockwood at (907) 276-7600. Very truly yours, Gerry A. Graham cc: Harold Scott - EPA, Seattle, WA C.V. Chatterton - OCGCC, Anchorage, AK r i~ roan i+noroveo. umv no. ct~w~wt. txoires y-:fu-en Form UNI TATES ENVIRONMENTAL PROTECTION AGENC I. EPA iD NUMBER j UNDERGROUND INJECTION CONTROL T/A c 4 PERMIT APPLICATION EPA (Col%ted under the authority of the Sete Drinking U UIC Water Act, Sections 1421, 1422, 40CFR 144 READ ATTACHED INSTRUCTIONS BEFORE STARTING FOR OFFICIAL USE ONLY Applieationapproved .Date Received mo dey yssr mo dey veer Permit/Well Number Comments 11. FACILITY NAME AND ADDRESS III. OWNER/OPERATOR AND ADDRESS Facility Name Owner/Operator Name Kenai Gas Field Union Oil an of California Street Address Street Address Kalifonsky Beach Road 909 W. 9th Avenue, P.0. Box 6247 City State 21P Code City State ZIP Cody Kenai Peninsula Boron h AK Anchora AK 99502 IV. OWNERSHIP STATUS (Mark it J V. SIC CODES ® A. Federal ^ s. state ^ c. Private 1311 (Crude Petroleum, Natu al Gas) ^ D. Public ^ E. Other (Exp/ainJ 1 VI. WELL STATUS /Mark 'x'J Date Started ® A. ^ B. Modification/Conversion ^ C. Proposed ~ 8 2~82r Operating VII. TYPE OF PERMIT REQUESTED (Mark 'x' and specify ilrequiredJ Number of Exist- Number of Pro- Name(s) of field(s) or project(s) ® ^ A. Individual B. Area ing wells posed wells 1 - Kenai Gas Field, Kenai Unit WD-1 VIII. CLASS AND TYPE OF WELL (see reverse/ A. Class(es) B. Type(s) C. If class is "other" or type is code 'x,' explain D. Number of wells per type (if area permit) (enter codes/J (enter code(s)) II D IX. LOCATION OF WELL(S) OR APPROXIMATE CENTER OF FIELD OR PROJECT X. INDIAN LANDS (Mark 'x'J A. Latitude B. Longitude Township and Range Deg Min Sec Deg Min Sec Twsp ang Sec .Sec Feet from Line Feet from Line ^ Yes ®No I 5N 11W 31 SE 606 S 2297 E XI. ATTACHMENTS (Complete the following questions on a separate sheet(s) and number accordingly; see instructions) FOR CLASSES I, II, III (and other classes) complete and submit on separate sheet(s) Attachments A - U (pp 2-6) as appropriate. Attach maps where required. List attachments by letter which are applicable and are included with ` your application: XII. CERTIFICATION l certify under the Pena/ty of /aw that /have personally examined and am familiar with the I information submitted in this document and all attachments and that, based on my inquiry of _, those individua/s immediately responsible for obtaining the information, l believe chat the information is true, accurate, and complete. / am aware that there are significant Pena/ties for , submitting fa/se information, including the possibility of fine and imprisonment. (Ref. 40 CFR 144.32) 'i A. Name and Title (Type or Print) B. Phone No. (Ares Code and No.J Gerry A. Graham, District Operations Manager -Alaska ~ (907) 276-7600 ". ~C. Signature D. Date Signed dip e++sG ~~ ~/v~ EPA Foes 7120-612-84- ~ • • I~ ii i~ Introduction This application is for an existing Class II, Type "D" Produced Fluid Disposal Well, KU WD-1, located within the Kenai Gas Field, Kenai Peninsula, Alaska. WD-1 is currently injecting waste fluids into three Sterling formations, subsurface depths from 3030' - 3160', 3178' - 3193', and 3235' - 3250'. All aquifers below 1300' have been exempted as possible underground sources of drinking water (USDW) within the area of review (40 CFR 147.102 (b),(1),(C)). It is requested that the surface injection pressure limitation, under 147.103 (b) be waived by the Director. Several studies have been conducted on WD-1 in response to concern over possible contamination of shallow fresh water by the injection fluids. As a result of these studies, WD-1 is currently permitted for the disposal of two types of fluid; produced fluid from the field's productive gas wells, and those wastes directly associated with drilling activities. The injection of any hazardous waste, as defined under 40 CFR 261, is prohibited. Attachment G contains a geologic summary and shallow formation salinity ' study. With regard to possible contamination of shallow USDW, the study presents four conclusions. First, the minimum salinity levels from depths between 460' to 3273' (TVD) range from an undrinkable 1100 to 2600 ppm (see Plate 1, annotated type log, WD-1). There currently are no wells within the vicinity for the production of drinking water below ' 400', and considering the level of salinity, more economically abundant sources of fresh water will continue to be available elsewhere. The second point is the confirmation that individual lithologic intervals are not in communication through the wellbore of WD-1. A cement bond log ran on WD-1 demonstrates good cement between the 7" liner and the wellbore. Annual temperature logs demonstrate the disposal fluids are only being injected into the perforated intervals of WD-1 and no channelling behind pipe is occurring again confirming the isolation of lithologic units. ' Included within Attachment G are two cross-sections; north-south, and ~ • • east-west, demonstrating the lateral continuity of the numerous shale ' sequences between the point of injection and 1300'. These shales act as impermeable layers confining the zone of injection and preventing ' vertical fluid communication. Finally, as demonstrated by Plate 4, a large structural nonconformity lies at the base of the Pleistocene Strata. This nonconformity acts as a barrier between zones of fresher water and the more saline Sterling waters. The contamination of shallow USDW is unlikely considering the geology within the area of review. Directly following is a calculation of the radius of disposal fluid ' invasion and resulting pressure increase for the present injection zones of WD-1. The study yields an estimated 125' lateral radial invasion with a minute 15 psi increase in the injected zone within 5 years. These seemingly small results are due to the relatively small volumes that are ' disposed of in WD-1. The injected volumes are unlikely to disturb any non-exempt USDW lying 1700' shallower. Following are required attachments for existing Class II activity within the area of review. Union Oil Compan~ California um~n June 20, 1985 T0: L. 0. Cutting FROM: M. R. Starzer Calculations of Depth of Fluid and Pressure Increase Due to Injection in WD-1, Kenai Gas Field Attached are Calculations done by Navin Sharma on depth of fluid invasion and pressure increase due to injection in the perforated intervals of WD-1. Navin's summary follows: As of January 1, 1985, a total of 91,181 bbls of fluid were injected in WD-1 resulting in approximately 60' of radial invasion. This invasion is estimated to have increased the original reservoir pressure of 1360 psi by 3 psi. The- areal extent of the acquifer in the injection sand, based on well control and geology, is calculated at 38 square miles. In five years, based on 60,000 bbls/year of injection, the extent of radial invasion will reach +125' and result in a pressure increase of 15 psi over the original 1360 psi. Calculations for above conclusions are attached. ~ •-, ~+ ~_ 9 1 - ~ k TaRS N 1 1 1 1 ~ vo~~~~ 1 1 1 1 1 1 1 1 1 1 1 w erg: N. k. SHAR~I~1 ~~R 1 ~ f 1Q 85 ~ r S~~ G v Riz.tT~~- C~ ! r ... d i S ta.,.~ cz.. -t,,;,, J F c u~~ ~L `vet c a.L d ~ ~/~Q FLU ,e~ c^~ / ~~ ~U roSi ~~ c~L ~~.~~~_ q -,181 b 61s gll~l x 5.6-~ SII,°1 S~ J~~-3 sii;~g-. i~~r2)(i3o~~~3s~ ~ = v ~ ~ °~ ~_I_____ rc ~tza) ~~ 3s~ = 6O '- u.v~,~-~ e ;; r~ L- ~l -Ca~aaQ w ~~ 5 YE~-2S ,4s~w~c;~ U~jt~_ ~:~-.i~C.~~Q = 60 000 ~~Js/yY ~ ~n ~ U ., Y~a~s `~~ O} '}'~.Q ~O~t~ P.~~~ t10 3 W i II }~.~ OXI1M l-}-OC~~00~ ~6~ o~` 2,246 X t~ "~'' _. ~ ~ 0 ~ INS i,L.._ s ~~ Ltti~ ~ Y~ ~2.2~-6 K IOG~_ C3,i4~ (,130~~`3S~ ~.~ - ~ 2rj . °~-~ ~-~ 0 -~ ~.4 ct~ ~c,~ vocSiC~ 5 `/ r ~ La~2 ~ .; ~ • • _ _F~~M~}Ti01~. ~I;~SU ~E }~C(z-L-~-~ ~ ~V e" ) p I N ~Yt O N- Cv R- R Enl i r ; :~ ~ - c' ~ ~ ~ ~ C=-I~~v\ ~ ~P~r Y ~.; i ~C. . ~A a - ~ ~ -/ ~ Cam, = In1 a.~ ...,o ~ G~, Lt ~_ J Ps ~ ~ R L C U ~- ~Tl O l~ ~ '. V~ ~n U~ = V~ ~P-tAL ExTt.~1T O~ A~F ~ He.iUNT 2y-~3o0 FlC ~' 130 ~ = 3, IG1 ~Gdv f~G- ~ 3,(61,600 :A c. ~-t ~ ?>5~S bbls~~~ ~-~ ~-~Sx rot 6b1~ z4~ 5 x to b~)s x o~35 = ~. G x io 66)S Cd .SS% gyros t~_~~ ~'N -/~. 1 _Y _../ 1 , 1 1 1 1 ~~~ 1 1 1 .6 _I cw = ~ ~1 x t o psi J ~ ~ = 91,181 ~~ES ~~ _ ? ~w - I d~ ~~ dp)I,~s /~ dP . ~y U~ ~ Gw L` /tT cU~R~ ~ 2cS~v01~ CONDi 17on]S ~~,~~~ Cg, bxlo~ C3,) xtoG~ p = ~ ~ y ~ S ~ ~ r P-: U 1' < C ~an~t ~ ~ c~U e ~v Gu~rr ~~ (~n ~ P ~, i c~ '_'t ~.- oew a nt 1 1 1 1 d~ = _ ~~ ~A ~ Cw ~> v f ~-irk = 0.43 3 PS`l ~ ~ ~ I Sa = 1360 Psi .y A 5 ~ ~= A- tz.s L. F~--~~ ~ i °1 ~ C r~r-~a-~ ~VS = Volurn~ ti'1.\Pc.~ec~ S YYS ;~ a ~'~~~ ~ Iat~~~ d-v~ = 60,ooo~YY ~S -t- = foooot dv = 4oc~,o~c~ .661s s 400 000 ~g• GX l off/ ~3•f X j0 G~ ~~ ~ 15 ~ ~S ~ ~ ~.h.~.~.o ~l, n,,,, ~.e. d.~ ~ voI ~,~„-...~.~ ~ J~p c,~r~i . -~--- _.~_..,_ Cw_ 1 ((~U ~d U~ ~ / iq~o ~ M,... ~ A,,.._. 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I , , ~ ~ I . ~ ~ - ~ " ~, I _ ~ 1 . 1 _ 1 1 : ~ i ~ ~ - f - is ~, , . .. -- . - l I _. ~ _ . , k I k ,. , , t ~ ~ _ I _ I t i I ' I .._.... .. , .. .. ~ ~--~ ! ~ I - - - I ..,. .. .. ~. .. !II I ~! I I I I ~ ! il~ .~ . _ ~ I i ~ i ~ ~ I I ~ ~ ~ j ~I I ,... ... ..., ,. ,I; . t l l I I I I il ! List of Attachments Attachment A: Area of Review Attachment A-1 AOGCC and BLM Regulations Attachment A-2 Legal Description of Area of Review Attachment B: Well Map - Area of Review (Not Required) Map ~~1 Facilities, Wells and Area of Review Attachment C: Corrective Action Plan and Well Data (Not Required) Attachment C-1 Well Data Attachment E: Underground Sources of Drinking Water Attachment E-1 40 CFR 147.102, Aquifer Exemptions Attachment G: Geolo Attachment G-1 Geological Report on Injection Zones and Confining Zones (Class II) Attachment H: Operating Data. Attachment H-1 Summary of 1985 Injection Reports Attachment H-2 1985 Monthly Injection Reports Attachment H-3 WD-1 Surface Pressure Calculation Under 40 CFR 147.103 (b) r ~ Attachment H-4 Injected Fluid Analysis - Drilling Fluid Attachment H-5 Injected Fluid Analysis - Produced Fluid Attachment J: Stimulation Program (Optional) Attachment M: Construction Details Attachment M-1 Schematic of KU WD-1 Attachment P: Monitoring Program Attachment Q: Plugging and Abandonment Plan Attachment Q-1 Schematic Plugged Well Example Attachment Q-2 Sample Abandonment Report, E.P.A. Attachment R: Financial Resources Attachment R-1 Financial Assurance Bond Attachment S: Aquifer Exemptions Attachment T: Existing EPA Permits Attachment U: Description of Business ~ ~ ATTACHMENT A AREA OF REVIEW 40 CFR 146.06 (b) Union Oil Company of California will use an area extending 1/4 mile radially from the bottomhole location of WD-l. There are currently 7 wells within the area of review. Attachment A-1 is a copy of the Alaska Oil and Gas Conservation Commission Regulations and Bureau of Land Management Regulations. Attachment A-2 is a description of the legal boundary which is the area of review for this permit application. N I TNI:H~~<itIJ I - i 1 ,• ~{ f , '` j ~~ ~~ ~, '~~ [] ii r~ j: ~4 J i,iJ, ~~ ~~~• "STATE OF ALASKA `~ ~•` •- ~ ' ~ _ U,~ t~ c~'~; +'~ s ,.t''?~ Ja S Hammond Governor d +~,r~.. .Ir ~ ~~^."~~• ,t rJ }'~' ~ ..C ~'~1t'3`. i nr~r Z' (.r- > :w '.S ~. ay ~1- y n '± J t ..:d ~ _ x ..w.,:tb~'t"i~'. i..li ~'„~.w:: ~ .~~"" ...r v"".~ 4"I~ ';K,,, a' t, t.YY ~` t r~ ~. '~"Q.rw- t-. y d w.. f ,,e.. .F°G '4.~1 ;,3 .f *~ r" '~ ~` a .L, t ~ ~ ~~. Y s -. t 1 Y ~~ "~! 3 1; ,. may, ? - ~q! Y `~ f. T ~- x' k ~' Y` tx`''~~'~.st ~.. K-iI• R} ~. +x~a~,~,aer"-S~F~~`IS;. t ~ f>.y'v+~S+'St t.~¢ yt `y3`?x;~• a....u-i ?I.v ~ s. K~`T~„s~~'+,tr, Yu~t4,1' +lyly.T.i k ~y4-~f/'~ '+~~~gr3y ~*.'.13 ..l~s,a:~ ~.t,~ac'Sk ~;<~~, Z-~'~'.f~ N.r ~~i: ~r t;: ,4,'__tr-r .. ..i< ~. 5. J. r y: b =.r ... i. ^,.x.r'7.~~ .,.arm ~ ;~, ~_ :..:~ ~,~'-+~ ~t.V. CAottoHont, . Commfsstonor ~t»~~x _s r ~,;• , .. - ~-'r'':'!-•, -_`°: Horry W. Kugler; Commissioner .,C6airmon of Commission i Conni• C.Smi16;Commission~r io y'.,. '`'4~ K' ~ t r4 >;+ - Y..4 1 _x P ,:.r ri s'r. h IGr { ~~ ~ I. ~ r~ xf.~=-~ C~' ~. }; . t •~, r .`ri ~ t ,Y: \K ~.fyh i `v .r ? !. U.'g•. - ^'' - -F:•. - .~ - _ ~ - u E ~ Yylt ~ ~ T fi i T ~7 1~ `*. i y ~ - - '~'~ .y -,. : f 45~. -~~ c ~ ' . ..r ~~ K }'tit 'z...4.~ r ~ ~ - ~ _ . 4 }. - _ _ "~'! r_.. ~ l,t :r Raj _ .~ wa •,r 4 ~ ~, M-. ` ` ~. 3.~4~ r 'ix'1 kT ~'i ~i -..r r~ _-~~.~ f ~~~ - i. ''°"' '.r fir. t, FaL~ -> t . ~~~ _ fly ~ -~- ti _-'" w • .,s. - - ci I t r _~- ~ L R E GUL AT I ONE ~ ~ -- ~ - ' • - ~ ' _ . _. .. ~ ._ i ~: - - - ~ ,. • ~~ J ~ ~ r ~ / } ' ' r 1 , r a ':.~ i,+" r .!.~', 4 ''z r .~ y„~. r i~C * ~ ' t r 't.' jr.L '=~`~3' r a \ ~ ~ ~ ~ y _ tr r ~ r.. - ~d ' !~. y ~~ ~. ~ f _.. _ f ~? ~ -1r EA. {~+w Y ~ ~y _ i"' _' y r .. ,: ~, • t ' - - July :19 81 Rx . ~.. s ~ ~ ~ ~=~ ~ i F k f~L ~;- . ___ _ , yJ >- ' ~., e . ~i ~ ^ r ..- IR ~ -~ i. l ! L '~' ~ a '~ }~ _ t~~ ~~. f 4'. ~' <-111'rl.~ r tZ Y v }"rl' l 1 1[ .r ~Y , ,r::~~,. ? ~-."l~~ _ ~ '~i; .." :'~,ir s:3.y,t-. ~7!'~s'~ti,°.L:i';i~'s:'J;•rs~i?' C.49'T:!_';Vr.4 r° .' ~ +' ~ TABLE OF CONTENTS ~~; ARTICLE 1. bRILLING ' ~ `, Sect ion Page No. ~ ~ ~ 05. Permit to drill ................,............... 1 ' - 10. 15. Re-entry ...................................... Changes to drilling permit ...................:. 3 3 20. 25. Change of operator ............................. Bonding ........................................ 3 . 3 26. Claims ......................................... 4 30. Casing and cementing ........................... 4 35. Blowout prevention equipment ................... 6 40. Well identification ........................... g 45. Sealing off strata ............................. 9 S0. Deviation ....................................... 9 ' 55. Well spacing ................................... 12 61. Well. site .surveys .............................. 13 65. 70. Hydrogen sulfide ...................~~~~~~~,~~~~~ Records and reports ............................ 13 14 75. Other wells in designated areas ................ 14 ~ ARTICLE 2. ABANDONMENT AND PLUGGING .. - ~ ` Section 105. 'Abandonment and plugging requirements ~~ and notices ................................... 15 120. Well abandonment marker ................~ „ ~~~~ 17 140. Saater wells ................................... 17 170. Location cleanup ..........~ ................... 18., ARTICLE 3. PRODUCTION PRACTICES Section 200. Surface equipment .:........................... 19 205. Notification of accidental loss ~f oil or gas 19 210. Multiple completion of wells .................. 20 p l l t 225. Capacity of gas we ls .~n ...................... 20 230. Production measurement .........,.~~ „ ~,~~~.~~~ 20 235. Gas utilization ............................... 22 240. Gas-oil ratios ........,.........~.~~~~~~~~~~~~ 22 245. Common production facilities ...... 22 250. ............ Disposal of salt water and other wastes 23 ' 255. ....... Equitable distribution of production .......... 23 . 260. Illegal production ............................ 23 ~ 265. Automatic shut-in equipment ......~~ „ ~~~,~~~~~ 23 w 270. Bottom hole pressures ......................... 24 i -~. • !• ! ARTICLE 4. REPORTS Section Page No, 300. Request for addition information .............. 24 310. Books and records ,,,,,,,,,,,,,,,,,,,,,,,,, 24 320. Forms to be used ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 24 ARTICLE 5.~ ADDITIONAL RECOVERY METHODS Section 400. Application for additional recovery ........... 410. Injection wells ,,, ,,,,,,,,,,,,,,, ,.,,...,.. 430. Records and repots• ........................... ARTICLE 6. GENERAL PROVISIONS Section 505. Scope of regulations ....... .. .... ... 510.. Commission office, hours and~seal ~~~~~~ 515. U.S. Government leases ...... ...~~~~~,,,..,, 520. Field and pool regulation and classification .. 525. Forms upon request .......................... 526. Fire hazard ,,, ,,,,,,,,,,, ,,,,,,,,,,,,,,,, ,~~ 530. Cooperation with other parties ......... 536. Geologic data and logs .. .............~~~~~~~ 537. Public and confidental well information .~ ~~~~ 538. Naming of fields and pools ..............~~~~~~ 540. •-Hearings .. .... ..................... ...... 545. Public mailing list ........................•.~ 550. Oaths ........................................• 555. Orders .................................... 557. Subpoenas. ............. ...................... 570. Definitions ................. ................ 25 26 26 27 27 28 28 29 29 29 29 30 31 31 32 33 33 33. 33 ii ~. ~c ~~ ',1 '~~ II • ' { Register 74, July 1980 • MISCELLANEOUS BOARDS, COMMISSIONS 20 AAC 25.005 TITLE 20. MISCELLANEOUS BOARDS,. COMMISSIONS CHAPTER 25. ALASKA OIL AND GAS CONSERVATION COMMISSION _. Editors Note: This chapter is based on the former regulations of the Divi- '- - ~ =:sion of Oil and Gas Conservation formerly located in 11 AAC . . _ ,_22. Article 1. Drilling (20 AAC 25.005 -- i0 AAC 25.075) 2. Abandonment and Plugging (20 AAC 25.105 -- 20 AAC 25.170) 3. Production Practices (20 AAC 25.200 -- 20 AAC 25.270) 4. Reports (20 AAC 25.300 -- 20 AAC 25.320} 5. Additional Recovery Methods (20 AAC 25.400 -- 20 AAC 25.430) 6. Genera? Provisions (20 AAC 25.505 -- 20 AAC 25.570) ARTICLE 1. DRILLING. Section ' 05.Permit to drill 10. Re-entry 15. Changes to drilling permit _ 20. Change of operator 25. Bonding 26. Claims 30. Casing and cementing 35. Blowout prevention equipment 40. Well identification 45. Sealing off strata . 50. Deviation 55. Well spacing 61. Well site surveys 65. Hydrogen sulfide 70. Records and reports ' 75. Other wells in designated areas 20 AAC 25.005. PERMIT TO DRILL. (a) An application for a Permit to Drill (Form 10-401) must be submitted for approval before the drilling,: redrilling or deepening of the 'following types of wells . (1) exploratory wells; . (2) development wells; (3) service wells; and ' (4) stratigraphic test wells. (b) An application for a Permit to Drill (Form 10-40.1) must be submitted for approval before the re-entry of an abandoned well . 1 C-~ '~ '~ ',1C II i~ -1- Y~ Register 74, July 1980 MISCELLANEWS BC~RADS, CCx"II`~SSIONS . y , 20 AAC 25.005 (c) The application for a Permit to Drill must be accompa- nied by~ the following (1) a fee of. :$100 payable to the State of Alaska, Department"of Revenue; (2) a plat showing the proposed surface and bottom hole location; before the completion, suspension, or abandonment .-of the well, a survey plat certified by a registered land survey- '~~or showing the precise surface location must be submitted; only the first well drilled from a fixed platform or a multiple well site must have a certified survey; (3) a diagram and description of the BOP equipment to . be used and the information required in sec. 35(c)(2) of this chapter; ~ , (4) the complete proposed casing and cementing program as required in sec.. 30 of this chapter; and (5) a diagram and description of the diverter system to be used as specified in sec. 35(ki) of this chapter, unless this requirement is waived by the commission. (d) Any well which is not to be intentionally deviated must meet the requirements of sec. 50(a) of this chapter. (e) Any well which is to be intentionally deviated must meet the requirements of sec. 50(b) and (c) of this chapter. (f) Each offshore location must meet the requirements of sec. 61 of this chapter. (g)'" Each hole drilled below the conductor casing, unless drilled solely to straighten the original hole, sidetrack junk, or correct mechanical difficulties, is a separate well requiring a Permit to Drill. (h) Each lease must have a different and distinct name. (i) Information must be submitted regarding the bond as re- quired in sec. 25 of this chapter. (j) Af ter approval by the commission, the Permit to Drill (Form 10-401) may be referred to as the "drilling permit" in this chapter. (k) If drilling is not commenced within 24 months after the approval date, the drilling permit will expire: (Eff. 4/13/80, Reg. 74) Authority; AS 31.05.030 . AS 31.05.090 -2- ~ ~ t 1 C, i~ I,~ • Register 74, July 1980. MISCELLANEOUS BORADS, COMMISSIONS 20 AAC 25.010 20 AAC 25.025 20 AAC 25.010. RE-ENTRY. (a) If a suspended well is to be re-entered, the operator shall advise the commission and -- request approval on the form entitled Sundry Notices and Reports on Wells (Form 10-403). (b) If an abandoned well is to be re-entered, an applica- tion for a Permit to Drill (Form 10-401) must be submitted as required by sec. 5(b) of this chapter. -(Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 20 AAC 25.015. CHANGES TG DRILLING PERMIT. (a) For any proposed change in a drilling permit, before the start of drill- ing operations, an operator must comply wit:: the following (1) notify the commission of the proposed change; (2} a new application fora Permit to Drill (Form 10-401) may be required but no additional fee is required; (3) a revised plat as required by sec. 5 of this .chapter must be filed if the surface location is changed; and (4) be approved by the commission. (b) For any proposed change in a drilling permit, after drilling operations have started, an operator must comply with the following (1) to change the bottom h_gle location, a new Form 10-401 accompanied by a fee of $100 must be submitted to the commission for approval; and (2) requests for other changes must be submitted to the commission for approval on the form entitled Sundry Notices and Reports on Wells (Form 10-403); in cases where prompt approv- al is needed, verbal approval. may be obtained from the commission or its representative; if verbal approval is obtained, a descrip- tion of the approved change, the :name of the commission member or its representative that provided verbal approval, and the date of the approval .must be included on the Form 10-403 submitted. (Eff. 4/13/80, Reg. 74 ) Authority: AS 31.05.090 20 AAC 25.020. CHANGE OF OPERATOR. If an operator wishes to~-relinquish his role as operator, he shall submit a written statement to the commission setting forth the facts, designating the new operator, and requesting approval by the commission. The newly designated operator shall notify the commission in writing of his acceptance of the obligations as operator and shall fur- nish a bond. as provided for in sec. 25 of this chapter. Approval by the commission of the change constitutes the release of the former operator's bonding obligation. (Eff. 4/13/80, Reg. 74) Authoritys AS 31.0.5.030 20 AAC 25.025. BONDING. (a) Except as otherwise provided in this section, the commission will require from the operator an appropriate bond to insure that each well is abandoned or repair- ed in accordance with secs. 45, 105, 120, 140, and 170 of this chapter . -3- • ~ , ' ~ ,~ ~ 1 ~' \' C Tr r l'•'r' ~' F7~lulC m~`~~T~', ~rf•~•`~ 7 11" ' C ~ Register '74, .hi2'y 2~9"$~0 ~ h~]~~t~bUS 805, ooM~'`~SS~T0~7S ~-0 ,ABC -X5.425 20•AAC 25.030 ~~) '? e ~ ~ ~'c~u'ireld in ~{'a~) a.f ..~h~.S, ,sectioi~ dust :be.. either a siric}Z~ ~~ 1 ~' ° ~; ; ~ ~~ r. ~ v ; , .: ° 'hot ~ess_ ~~a ,,$70:0(, OQO; ar .a 1~,ar~ket •bond of nat `l~s `t~ian ~ ~ '0 ~h `fa `' - :~ ~ • - .. vatiQn ~"' `' ~' ~ for of ,~e 'A'I'askc~ Oil- ai1d,-Gas. Conser- btq~s's~oh.~ ~[is~t'ifig, 'b"o.r~Is, not "ih Favor of the commission wil-1 ~be valid tiri'~t`il 'J~rYiuaiay `1', '19$"1'. _ (~) ,;Th_e ~t~rid 'rtitis`t 'be 'by 'a ~corpbrate suzety authorized to do bu`s~irtess in '?~`2ask~'. • ( ) ~ ~hd, .15't rema~.n.. in 'fo ce . ' ` '' "' ' ' ':: s c~ v~T_-ec: ,r~~ ~~: • ~~~~~ e~fe.ct until the aban- dtinment~ `.t{f `~~1 'i~e:l~ls cpvered are ,approved ~by the commission and the bond •is 2'e-Teased ~i`y the commss'ion~. .•• `(e') 'Tf. `a 'we`ll 1ss itb. ~bre d'ri~led on,_ ~e~~~ral. land. the operator is not regti~r:..e~l. ~o '-de`posi't a bond iv3t'~i tfie commission. (Eff. 4/13/80', 'Reg'. 74•) ' ~,u~tfiority: AS 31.05.030 20 ~A~C 2~'.:~26'.~~a1CL'~~IIKS: ~Comm~ssion approval. .of the ab~n- donment ~ of ~^ 'We1 X 8`~i3 ~'Yt`e. re~ea's_e ,off, ~T~;~ _~ond ;.. required by sec.. 25 of this . eha ter '~ nsttii~e's _~_ . resii f.ion of ~ - -('r ~ ~~`~ . P. mp - .proper abandon- ment, but doffs not ~elieve ._an_opera,tor o~ Further .claim by the commission af~e~' 'the ~~and'onment: `(Eff: ~.l~3/g0;, Reg__74) Authority: AS 31.05.030 AAC ~5:~13- __ C'~~si.T7c `Arm CEriEt~~TING: . (a 1.,. ~'or. each type of well 1i~s~ted ran. ~`sec;r S;~a~,; o~ Phis ch~pt,e~; ,a..complete proposed • r.: ~ casing arid.'cement~~ _prg7lram must; b~ iric~ud,ed on ~ the application for the P:e'rmi't 'to. Yi~l^(Rorm. IO-~~I~' UDless_modified or alter- ed by special gibZ51 'tiles; e~a~cYi casing•program must be designed to 1 ~Y~v~~c~e sulfa ~ ° ~ ' _ - . ~1...~,,,.. :~~,~ ~ ~i~e~•and safe operaEiiig conditions for the 'total ~~ieastlr~dF'8e~t~i. proposed = (2 ~,onf iris ~l.tiicl,`s_ ;fo ~He w.al ISore ' (3'~ pYeveiit mfg`ration of fluids from one stratum to another; (4) ~ssure_ control .-Qf well pressures encountered; . ,(5) , pro,te~~ _ ,.from thaw subsidence and freezeioack effects within permafrost;,. ,. _, ~ _, _ -.~6) prevent contamiriatiori of strata bearing fresh- wa to r; and _ , , - ~ ., . _ r<_..~... F .. .. .~. _~ ~~ _ ~rQQvide,. ~W~IZ. _ con~rgl, until :the next string of casing is ~Lf~~^ II : perf,frie~f_ factQZS .fcii~ well control should be considered; _~ric~uding;,formation ~ractur.e.,:;graclients,_ formation pressures; easiric~ setting depths, and proposed total depth. (b) TYie, fo1 fowi~~ .requir.ements apply to the different types of casing ~triiigs Iisfed beIowi -4- ~ c: 1 C; 1 1 n ~~ ~i i~ • Register 74, July 1980 MISCELLANEOUS BOARDS, OOMMISSIONS ~20 AAC 25.030 (1) Conductor casing: (A) one or more strings may be required;- and • (B) this casing may be set by drilling, driving or jetting; if the hole is drilled, a sufficient quantity of cement must be used to fill the annular space to the surface or mud line. " (2) Surface casing: (A) setting depth must be below the base of freshwater sands or below the .base of permafrost at a depth that will insure good anchorage; (B) must be set into a competent stratum with sufficient cement in the annulus to circulate to the sur- face; if offshore, sufficient cement must be used to bring _ the top of cement either to the mud lire or to at least 1500 feet above the surface casing shoe and at least 200 feet inside the conductor casing; if cement does not circulate to the surface when required, -the annulus must be cemented before drilling ahead or initiating tests; and (C) after drilling approximately 50 feet of new formation, a pressure test must be obtained either by test- ing to formation leak-off or by testing to a predetermined - equivalent mud weight to aid in determining a formation fracture gradient; the. results of this test and any subse- quent tests of the formation must be recorded on the driller's log. (3) Intermediate casing: (A) must be set when required to maintain well control; (B) under normal conditions drilling may continue until the mud weight has been increased to a point not exceeding 0.5 pounds per gallon less than the equivalent mud weight of the most recent pressure test of the formation below the surface casing shoe; and (C) a sufficient quantity of cement must be used to provide annular fill-up to a minimum of 500 feet above all hydrocarbon zones and abnormal pressure intervals; in cases where zonal coverage is not required, a minimum fillup of 500 feet of cement above the casing shoe is required. (4) Production casing: (A) may be set through or just above the produc- tion interval; (B) cementing practices must be the same as that for intermediate casing strings; and (C) casing must be tested in accordance ,with (e) of this section. (5) Liners: (A) may be set as an intermediate or production string; (B) a cemented liner must have a minimum of 100 • feet of cemented lap with the next larger casing string; other cementing practices must be the same as that for intermediate casing; and i ~ -,_ Register 74, July 1980 MISCELI,FINEOUS BOARDS, COMMISSIONS 20 AAC 25.030 . 20 AAC 25.035 a (C) before drilling ahead, cemented liner and lap must be tested by a fluid entry or pressure test, in accord- .. ance with (e) of this section, to determine that a seal between the liner top and next larger string has been • achieved; the test must be recorded as required by sec. 70(x)(1) of this chapter. (c) A cement plug or shoe, in the casing strings required by (b) of this section, must not be drilled until a minimum compressive strength of 300 psig at bottom hole conditions has been attained according to the manufacturer's cement strength tables for the particular cement being used. Casing must be tested before drilling ahead in accordance with (e) of this section. (d) Within permafrost intervals, fluids which have a freez- ing point above the minimum permafrost temperature must not be left in the annulus between any two strings of pipe or inside the casing upon completion or suspension of a well without commission approval. (e) Pressure Testing of Casing and Surveys: (1) with the exception of the conductor casing, before drilling out the casing or liner after cementing, all casing strings, liners and liner laps must be tested to a surface pres- sure of 50 percent of the minimum internal yield strength of the casing or 1500 psig, whichever is lower. If the pressure de- clines more than 10 percent in 30 minutes, or if there are indi- cations'`of improper cementing such as lost returns, cement chan- neling or mechanical failure of equipment, corrective measures must be taken until a satisfactory test is obtained; and (2) the operator shall report on the form entitled the Monthly Report of Drilling and ;Workover Operations (Form 1x.;404) the test results and any remedial measures taken. (f) Variances to this section to allow for special or unusual conditions such as cable tool drilling, air or foam . drilling, will, in the commission's discretion, be approved by the commission upon request by the operator. (Eff. 4/13/80, Reg. ' 74) Authority: AS 31.05.030 20 AAC 25.035. BLOWOUT PREVENTION EQUIPMENT. (a) General ~. Practice (1) BOP equipment and its use must, as a minimum, be in accordance with American Petroleum Institute Recommended ' Practices 53, "Blowout Prevention Equipment Systems" except as modified by this section; (2) all equipment must be in good operating condition ' at all times and must be adequately protected to insure reliable operation under the range of weather conditions expected at the specific location; and -6- . • • ~-..r ~ . Aw ~ Register 77, April 1981 MISCELLANEOUS BOARDS, COMP9ISSIONS 20 AAC 25.035 C. ' (3) blind rams must be function tested each trip but not more than once each day and~all other BOP's must be function tested each. day. ' (b) Surface Hole Diverter System: (1) before drilling below the conductor string, at least one remotely controlled annular preventer and flow diverter ' system must be installed; .the annular preventer must permit the diversion of hydrocarbons and other fluids; the low pressure, high capacity diverter system must provide at least the~equiva- lent of a six-inch .line with at least two Iines venting in dif- ferent directions to insure safe downwind diversion and must be designed to avoid freezeup; these lines must be equipped with full-opening butterfly type valves or oth~:r valves approved by the commission; a schematic diagram, list of equipment, and operational procedure for the diverter system. must be submitted for approval with the application for a Permit to Drill (Form 10-401); and . (2) the commission will, in its discretion, waive the requirements of (1) of this subsection where drilling experience in the near vicinity indicates the are unnecessar y y. . (c) Blowout Prevention Equipment:~ (1) before drilling below the surface .casing, and C-~._ until completed, a well must have remotely controlled BOP's; the working pressure of the BOP's and associated equipment must exceed the maximum potential surface pressure, except that the annular preventer need not have a working pressure rating greater than 5000 psig; the BOP stack arrangements must be as follows: (A) API 2M, 3M, and_5M stacks must have at least 1 three preventers, including one equipped with pipe rams that fit the size of drill pipe, tubing, or casing .being used, one with blind rams, and one annular type; _ (B) API lOM and 15M stacks must have at least four preventers, including two equipped with pipe rams with at least one fitting each size of drill pipe, tubing, or casing being used, one with blind rams. and one annular type; I, , (2) information submitted with Form 10-401 must in- clude the maximum downhole pressures which may be encountered, the maximum potential surface pressures, the criteria used to determines these pressures, and a well-control procedure which indicates how the preventers will be used for pressure control operations if the maximum surface pressures should exceed the rated working pressure of the .annular preventer; (3) the hydraulic actuating system used must provide sufficient accumulator capacity to supply 1.5 times the volume of 1 hydraulic fluid necessary to close all BOP equipment; the system must also be capable of maintaining a minimum remaining pressure of 200 psig above the required precharge pressure when all BOP's ~, are closed with ,the primary power source shut off; an accumulator backup system, supplied by a secondary power source independent of the primary power source, must be provided with sufficient ' -7- __* C • Register 77, April 1981 MISCELLANEOUS BOARDS, COMMISSIONS 20 AP.C 25.035 20 AAC 25.040 capacity to actuate all BOP equipment; (4) in addition to the primary controls on the accumu- lator equipment unit, at least one operable remote BOP control station must be provided; this control station must be in a readily accessable location on or near the drilling floor; a . device to avoid unintentional closure must be provided on all ,, _: remote blind ram closing controls; >'~ ~~ ~=` ~ (5 ) the BOP equipment must include a drilling spool with side outlets (if not on the blowout preventer body), a minimum three-inch choke line and a minimum two-inch choke manifold, a kill line, and a fillup line; the drilling string must contain full opening valves above and immediately below the ke~lly during all circulating operations using the kelly, with the necessary valve wrenches conveniently located on the rig floor; and (6) two emergency valves with rotary subs for all connections in use and the necessary wrenches must be conveni- ently located on the drilling floor; one valve must be an inside spring-loaded or flow activated type; the second valve must be a manually operated ball type, or equivalent valve. (d) Testing: (1) all ram-type BOP's, kelly valves, emergency valves and choke manifolds must_be tested to the rated working pressure or to the maximum surface pressure as required to be submitted in (c)(2) of this section; annular- preventers must be tested to not less than 50 percent of the rated working pressure; these tests must be made when the BOP equipment is installed or changed and at least~•once each week thereafter; test results must be recorded as required by sec. 70(a)(1) of this chapter; (2) to insure that minimum standards are achieved, the operator shall perform the recommended tests for BOP closing units specified in sections SA and 5B of API RP 53; and (3) sufficient notice of certain BOP equipment tests must be given so that a representative of the commission can witness these tests; these tests will be specified in the drill- ing permit or by notice to the operator. (e) BOP equipment for cable tool drilling activities must have prior commission approval and must be in accordance c~ith good established practice with all equipment in good operating condition at all times. (Eff. 4/13/80, Reg. 74; am 2/22/81, Reg. 77) Authority: AS 31.05.030 20 AAC 25.040. ~~ELL IDENTIFICATION. (a) Every drilling well must be identified by a sign posted in a conspicuous place on or near 'the derrick but not more than 100 feet from the well. For suspended or producible wells, the well sign must be at the wellhead for multiple housed wells or on the wellhead building for single housed wells. The sign must be of durable construc- -8- Register 74, July 1980 MISCELLANEOUS BOARDS, COMMISSIONS 20 AAC 25.040 - 20 AAC 25.050 C - tion, large enough to be legible under normal conditions at a distance of 50 feet, and maintained in legible condition. Each -- sign must show .. _ .. • (1) the name of the lease on which the proposed objec- tive is located; - (2 ) the name of the lessee ;. . • (3) the owner or operator if different from the lessee; (4) the well number; - (5) the well surface location by quarter section, section, township and range; and (6) the drilling permit number (for drilling wells), (b) The name- of each lease or unit must be different and ' distinct. (c) The wells on each lease or property must be numbered in i a nonrepetitive, logical, and distinct sequence. (d) .Each well will be assigned an API well number by the ' commission when the drilling permit is approved. (e) For platforms or multiple .well drill sites, the infor- C mation required in (a)(1),(2),(3), and (5) of this section may be osted o i f ., p n one s gn or each lease on the platform or at the main entrance to the drill site. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 20 AAC 25.045. SEALING OFF STRATA. (a) During the drill- ing of any well permitted .under sec. 5 of this chapter, the contents of oil, gas, and water strata penetrated must be scaled to prevent them from passing into other strata. (b) All freshwater and water of present or probable value for domestic, commercial, or livestock purposes must be confined to their respective strata and adequately protected by methods approved by the commission. Precautions must be taken in drill- ing, completing, producing and abandoning o erations t , p o guard against loss of any freshwater from the strata in which it occurs, and the contamination of any freshwater by oil, gas, or objectionable water. (c) Except for fluids removed by production from the corn- pletion interval, all fluids encountered in a well must be con- ' fined to their respective strata. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 20 AAC 25.050. DEVIATION. (a) Any well which is not intentionally deviated must be (1) drilled as close to vertical as is possible using normal, acceptable drilling techniques, except that deviation is permitted for short intervals to straighten the hole, sidetrack I' -9- ~~ Register 74, July 1980 MISCELLANEOUS BOARDS, CONR~IISSIONS 20 AAC 25.050 junk, or correct mechanical difficulties; (2) surveyed to determine the inclination from the vertical with surveys starting at 500 feet and no more than 500 feet apart to total depth; and (3) surveyed by a complete continuous multishot direc- -- tional survey if the surface location is less than 660 feet from a lease line where ownership changes or less than 660 feet from any other vertical or deviated well; the survey must be taken at intervals not more than 100 feet apart, beginning within 100 feet of the surface. (b) Any well which is to be intentionally deviated must meet the following criteria (1) the application for the Permit to Drill (Form 10-401) must (A) state the surface and proposed producing interval locations; (B) include a plat drawn to a scale of 1 inch equal to 100 feet showing the path of the proposed well bore in relation to all other vertical and deviated well bores which are within .a distance of 200 feet from the proposed well bore and the true vertical depths must be shown at frequent intervals along each well bore; (C) list the affected operators and show that each has been furnished a copy of the application by regis- tered mail, or state that the applicant is the only affected operator; and - ~-- (D) include a neat and accurate plat of the lease and of all affected leases showing the names of all affected operators and the surface and proposed producing interval locations of the well and all other wells within one-half mile of any portion of the new well; the plat must be drawn to a scale which will permit easy observation of all perti- . nent data; , (2) items (b)(1)(C) and (D) of this section are~not applicable to any well drilled on land subject to an approved unit, except that wells drilled near the unit's exterior boundary must conform with sec. 55 of this chapter; (3) if drilling is in progress, the operator shall notify the commission immediately of his intention to deviate and then .may proceed at his own risk; when an operator follows this procedure, he must file an application as soon as practicable and obtain another drilling permit as required in sec. 15 of this chapter; (4) if the applicant is the only affected operator and the commission does not object to the application, the commission will approve it immediately; if there are other affected opera- tors, the commission will hold the application for 10 days unless a letter of non-objection from each affected operator has been filed with the commission; if objection from an affected operator to the proposed deviation is received within the 10-day period, or if the commission does not approve the proposed deviation, the -10- ~r - '~ Register 74, July 1980 MISCELLANEOUS BOARDS, oa~iMlssloras 20 AAC 25.050 application will be subject to public hearing; if no objection from either affected operators or the commission is interposed within the -10-day period, the application will be approved and a drilling permit issued by the commission; and (5) the operator must run a complete, continuous, multi-shot directional survey at intervals .not more than 100 feet apart, beginning within 100 feet of the surface. (c) Within 30 days after the completion, abandonment, or suspension of the well, a complete copy of each inclination and directional survey obtained must be filed with the commission. A composite survey may also be filed if the operatcr feels this would better represent the well course. If a composite survey is filed, the. operator shall specify the porticn of each. survey used in the composite. (d) If the proposed or final location. of t he producing ' _ interval of the deviated well is not incompliance with sec. 55 of this chapter or other rules of the commission applicable to ' the reservoir, the operator may apply for an exception which will be handled in accordance with sec. 540 of this chapter. (e) For the purpose of this section, an affected operator C- is an owner in a quarter section directly or diagonally off- tti :, se ng any quarter section upon which the operation is proposed to be conducted. In areas where irregular shaped leases are to be drilled the commission will determine who are the affected operators. (f) Inclination and directional survey reports must con- tain, when applicable, the following (1) name of surveying company; (2) name, title, and signature of person actually per- forming the survey; (3) the date on which the survey wa s performed; (4) type of~survey conducted; (5) method used in calculating survey; (6) a complete identification of the well so as to indicate the name of the operator, the lease name, the well number, and field name; (7) the depth interval over which the survey was con- ducted; (8) a certified plat showing the surface location, the plotted well course, and the nearest lease lines or unit lines; and (9) a tabulation of the depth and drift angles for all inclination survey points. • (g) Certification requirements for surve y reports are as ~ follows: , (1 ) each inclination survey report as required in (a ) of this section must be accompanied by a certified statement of i~ -11- ~' ,. Register 74, July 1980 MISCELLANEOUS BOARDS, CO[~IISSIONS 20 AAC 25.050 20 AAC 25.055 the operator or someone acting at his direction on his behalf that the well was 'not intentionally deviated from the vertical; (2) each d~.rectional survey report as required in (b) of this section may be certified to by the person t:aving personal -- knowledge of the facts, by execution and dating of the data compiled; and .__ (3) a certified plat as required in (f)(8) of this section. (h) The commission may require the submittal of the orig- inal film, time sheets, charts, graphs, discs, and other data used to compile the survey. ~~ (i) The willful filing of a false or incorrect inclination survey or directional survey is grounds for penalty actions under the applicable statutes. (Eff. 4/13/80, Reg. 74) " Authority: AS 31.05.030 20 AAC 25.055. 47ELL SPACING. (a) In proven oil and gas fields, the establishment of drilling units and a spacing pattern will be governed by special field rules adopted in accordance with sec. 520 of this chapter. In the absence of an order by the commission establishing drilling units or prescribing a spacing pattern for a pool, the following applies (1) the surface location of an exploratory well must not be located closer than 500 feet to any property line of the lease on which the well is located, nor may any hydrocarbon reservoir be opened to the well bore closer than 500 feet to any property'-line of the lease on which the well is located; (2) where oil has been discovered, not more than one well may be drilled to that pool on any governmental quarter section or governmental lot corresponding to it nor may any well be drilled to that pool on a .governmental quarter section} or governmental lot corresponding to it which contains less than 150 acres, nor may any hydrocarbon reservoir be opened to the well bore closer than 500 feet to any property line nor closer than 1, 000 feet to any well drilling to or capable of producing from the same pool; and (3) where gas has been discovered, not more than one well may be drilled to that pool on any governmental section or governmental lot corresponding to it nor may any well be drilled to that pool on a governmental section or lot corresponding to it ~rhich contains less than 600 acres, nor may any hydrocarbon reservoir be opened to the well bore closer than 1,500 feet to any property line nor closer than 3,000 feet to any well drilling to or capable of producing from the same pool. (b) An application for exception to the provisions of this section or any spacing order of the commission must set out the names of all owners and of all operators of governmental quarter sections directly and diagonally offsetting the quarter section -12- .. Register 74, July 1980 MISCELLANEOUS BOARDS, CObIMISSIONS 20 AAC 25.055 . 20 AAC 25.065 where the oil well is located or the names of all .owners and of all operators of governmental sections directly or diagonally .. offsetting the section where the gas well is located. A plat must be attached, drawn to a scale of one inch equaling 2640 feet ~" or larger, showing .the property for which the exception is ~''' 'sought, all other completed and drilling wells on the property and all adjoining properties and wells. The application must be _ verified by a person acquainted with the facts, stating that all facts are true and that the plat correctly portrays pertinent and required data. The applicant for exception must give notice of that filing by registered mail to all owners and to all operators noted above and furnish the commission with a copy of the notice, date of mailing, and the addresses to which the notices were sent.. The application for exception will be handled in accor- dance with sec. 540 of this chapter.' (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 C` ~~ 20 AAC 25.061. WELL SITE SURVEYS. In offshore areas where the sea floor conditions or -the presence of shallow geo- logic hazards or hydrocarbons are unknown,. the operator shall conduct the well site surveys as may be required by the com- mission. These surveys and an analysis of the geologic hazards must be submitted to the commission as an attachment to the application for a Permit to Drill (Form 10-401). (Eff. 4/13/80, Reg. 74) 20 AAC 25.065. HYDROGEN sulfide gas is encountered in operator must notify the Alaska sion within 24 hours. Authority: AS 31.05.030 SULFIDE. (a ) i•Then hydrogen the drilling of any well, the Oil and Gas Conservation Commis- (b) When a well. is to be drilled in an area where a forma- tion to be penetrated is known to contain hydrogen sulfide gas or if hydrogen sulfide is encountered while drilling, each operator must meet the requirements of API RP 49 "Safe Drilling of 6lells Containing Hydrogen Sulfide." (c) 47here there is an insufficient history of drilling in an area to know if hydrogen sulfide exists, the commission will specify on the drilling permit that the operator must comply with the minimum requirements for detection monitoring, contingency and control, and training as follows: (1) detection monitoring: (A) an automatic hydrogen sulfide monitor must be installed and have a combination visual and- audible ala rm system located where it can be seen or heard from all parts of the location; (B) the automatic hydrogen sulfide monitor must have a minimum of two probes, one at the shale shaker a nd one on the bell, nipple; and -13- ~. Register 74, July 1980 MISCELLANEOUS BOARDS, CONII~iISSIONS 20 AAC 25.065 20 AAC 25.070 - (C) in addition to the automatic hydrogen sulfide monitor, at least three hand-operated, bellows type detec- tors with an adequate supply of extra detector tubes must be availa-b le at the drill site; (2) contingency and control: (A) hydrogen sulfide scavenge r material for the .drilling mud must be available on or near the location in 'good condition and in sufficient quantity to adequately treat the mud system should hydrogen sulfide be encountered; (B) detailed emergency operating procedures must be defined and posted to insure the safety of all personnel should hydrogen sulfide be encountered; (C) detailed step-by-step remedial procedures must be developed and posted to cover emergencies while drilling or tripping; and (D )' personnel protective equipment must be avail- able at the well site. (3) all drill site supervisors must be trained for operations in the presence of hydrogen sulfide. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 20 AAC 25.070. RECORDS AND REPORTS. (a) The operator of each drilling well shall (1) keep a detailed accurate written daily record of the well operations which must be available for inspection at reasonable time s by the commission or a representative of the commission (A) at the well before completion, abandonment, or suspension; and (B) in Alaska for five years after completion, abandonment, or suspension, upon 30 days written notice; (2) file with the commission, on or before the 15th of each month, the Monthly Report of Drilling and Workover Opera- tions (Form 10-404), setting out an accurate summary of the daily record of well operations during the previous calendar month; and (3) file with the commission within 30 days after completion, abandonment, or suspension of the well (A) a complete well record on the dell Completion or Recompletion Report and Log (Form 10-407); (B) a detailed report of all drill stem tests and production tests including time intervals, quantity and description of all recovered fluids, and pressure data; and (C) a complete well history. (b) A well is considered completed, abandoned, or suspended on the date significant well operations cease, The commission will, in its discretion, approve a subsequent date upon which a suspended well will be considered completed, abandoned, or sus- pended if the operator shows tha t significant well operations will be resumed within a reasonable time. -14- .. Register 74, July 1980 PIISCELLANEOUS BOARDS, COhYMISSIONS 20 AAC 25.070 . 20 AAC 25.105 (c) In this section, "significant well operations" means those well operations conducted in accordance with good oil or ~~ gas field practices. (Eff. 4/13/80, Reg. 74) _ Authority: AS 31.05.030 20 AAC 25.075. OTHER 67ELLS IN DESIGNATED. AREAS. There are areas in the state where drilling operations could unex- pectedly encounter oil, gas, or hazardous substances at shallow depths. ~,lhen the commission obtains sufficient evidence to define a specific area and the approximate depth range of the substances, it will issue an order that will present the evi- dence, define the area, and stipulate a drilling depth. After the issuance of such an order, any well dzilled in the defined area for any purpose, that exceeds the stipulated depth will require a drilling permit and may be subject to the other requi re- ments of this chapter. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 ARTICLE 2. ABANDONMENT AND PLUGGING. ~ Section r ~- 105. Abandonment and plugging requirements and notices `-+~. 120. Well abandonment marker 140. i7ater wells 170.. Location cleanup 20 AAC 25.105. ABANDONMENT AND PLUGGING REQUIREMENTS AND NOTICES. (a) Each well must be abandoned within 90 days fol- lowing the expiration of the lease unless an extension of time is granted by the commission. The commission will, in its di$cre- tion, grant an extension upon receipt of the form entitled Sundry Notices and Reports on Wells (Form 10-403), on which is specified (1) a request for a specific time extension; and (2) the reason an extension is necessary. (b) Each well to be abandoned must be plugged by the ope ra- tor who is responsible for the well,. so as to prevent fluid migration within the wellbore. Notice of plugging or abandonment must be filed according to (c) of this section Unless a differ- . ent program is approved by the commission, the minimum require- ments for abandonment of a well are as follows: I (1) a cement plug not less than 100 feet in length must be placed immediately above each hydrocarbon-bearing forma- tion open to the well bore; (2) a cement plug of at least 50 feet must be placed to extend to the surface of the grownd in each hole for onshore wells and to the mud line in offshore wells; ;,. (3) the intervals below and between plugs must be filled with fluid of sufficient density to equal or exceed the fluid density utilized to drill that interval; -15- ~ ~ Register 74, July 1980 MISCELLANEOUS BOARDS, CChT~1ISSIONS 20 AAC 25.105 f4) ~in uncased holes, in addition to the requirements of (1) through (3) of this subsection (A) a cement plug not less than 100 feet in length must be placed from 50 feet below the deepest exis- -ting casing shoe to 50 feet inside the casing; (B) a cement plug not less than 100 feet in length must be placed across the top of the stub where the casing is cut and pulled; and (C ). a cement plug not less .than 100 feet in length must be placed immediately below the deepest fresh- . water bearing strata; (5) in cased holes, permanent packers or bridge plugs with a minimum cement cap of not less than 50 feet may be substi- tuted for cement plugs; (6) final abandonment of onshore wells is completed only after the well location is cleaned up as specified in sec. 170 of this chapter; and (7) final abandonment of offshore wells in addition to meeting the requirements of this section may also have to.meet the requirements of other governmental agencies. (c) When a well is..to be plugged and abandoned, the form entitled Sundry Notices and Reports on ~7ells (Form 10-403) must be filed and approved, whenever possible, before commencing work. Howeve r, when necessary, verbal approval may be obtained from the commission or its representative before commencing work. The Form 10-403 must contain (1) the reason for plugging or abandonment; and (2) a statement of proposed work which includes (A) information on porous strata; (B) the kind, size, and location (by measured depth) of existing. and proposed plugs; (C) any plans for mudding, cementing, shooting, ~.~-. testing, and removing casing; (D) all other pertinent information; and _ (E) if the Form 10-403 is filed after commencing work, it must contain the name of the commission member or its representative who provided verbal approval and the date of the approval. (d) Notice of the plugging and abandonment must be given to i the commission in time so that a representative of the commission may be present to witness the work. (e) Following completion of the work, a final Form 10-403 must be filed. It must contain a history of the completed work and the date the well site would be in condition for final in- spection. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 ' -16- ,, Register 74, Jul 198 0 MISCELLANEOUS BOARDS, ~iMISSIONS 20 AAC 25.120 Y 20 AAC 25,240 1 20 AAC 25.120. WELL ABANDONMENT MARKER. (a) The exact ' surface location of the abandoned hole must be shown by a steel ~- marker post. The description and installation of the post must be as follows _ (1) at least four inches in diameter; (2) at least 10 feet long; (3) set in cement inside well casing; (4j extending at least four feet above final ground level; (5 ) the top of the pipe must be closed with one of the following (A) cement plug; 'I ~ (B)- screw cap; or (C) welds; and ' (6) as an alternative methbd to (2) and (3) of this subsection, the marker post may be firmly welded with supporting fillets to the top of a blind flange. placed on the wellhead. (b) The following information must be bead-welded directly to the marker post (1) name of the operator; (2) unit or lease name; ` C- (3) well number; and ~ _ -- (4) exact location with .(A) footage from section lines; (B) section number;. (C) township, north or south; (D) range, east or west; and (E) meridian. ~ (c ) Inspection of proper marker post instal lation~ , and correct information will be made by a representative of the ' commission at the time of the location cleanup inspection as required in sec. 170 of this chapter. (d) When requested by the surface owner, the marker post 1 installation requirement will, in the commission's discretion, be ~aaived by the commission, in which case the information required in (b) ( 1) , ( 2) , and ( 3 ) of this section must be bead welded to the top of a blind flange placed on the wellhead. (e) In navigable waters, marker posts a re not required.. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 ' .. 20 AAC 25.140. WATER 47ELLS. If a well drilled for oil or gas is to be plugged and abandoned but may safel be us d ~ y e as a ~ - freshwater well, and such a use is desired by the landowner the I ~ , , well need not be cemented above the required plug set below the ~ freshwater as required in sec. 105 of this chapter. 67ritten authority for this action must be obtained from the landowner, -17- Register 74, July 1980 MISCELLF~I~IEOUS BOARDS, CCNII~IISSIONS ~' 20 AAC 25.140 20 AAC 25.170 including his assumption of the full responsibility for the final plugging of the water well.. This authorization must be filed with and approved by~the commission. Following the commission's approval of• the plugging of the well to the base of the fresh- water bearing strata and the location cleanup, the operator will be relieved of further obligation under his bond. (Eff. 4/13/80, Reg. 74 ) - Authority: AS 31.05.030 20 AAC 25.170. LOCATION CLEANUP. (a) Within one year of suspension or abandonment of an onshore well, the operator shall (1) remove all materials, supplies, structures, and installa tions from the location; (2) remove from location, adequately bury, or incin- erate all loose debris on or near the location in accordance with all applicable statutes and regulations; (3) fill and grade all pits;'and (4) leave the location in a clean and graded condi- tion. (b) An extension of time beyond one year will, in the commission's discretion, be granted by the commission upon receipt of the form entitled Sundry Notices and Reports on Wells (Form 10-403) on which is stated (1) a request fora specific time extension; (2) the reason an extension is necessary; and (3) a description of location cleanup progress. (c)~ Following completion of all work required in (a) of this section, or when requested by the operator, onsite inspec- tions will be made by a. representative of the commission to (1) verify a proper well marker as required in sec. 120 of this chapter; ~ , (2) verify the location condition a t the time of in- spection; and (3) provide the operator and his field representative a report of the inspection. (Eff. 4/13/80, Reg. 74) . Authority: AS 31.05.030 -18- - ' • - - R D IONS 20 AC 25 200 S, OOMMISS A . egister 74, July 1980 MISCELLANEOUS BOAR C - 20 AAC 25.205 - ARTICLE 3. PRODUCTION PRACTICES. Section .. - 200. Surface equipment ~~ - - _ 205. Notification of accidental loss of oil or gas - ' 2i0. Multiple completion of-wells 215. Commingling of production -- ~ - - 225. Capacity of gas wells - - - ' _ 230. Production measurement 235. Gas utilization - 240. Gas-oil ratios - - 245. Common production facilities •. - 250. Disposal of salt water and other wastes 255. Equitable distribution of production 260. Illegal production - - - - 265. Automatic shut-in equipment 270. Bottom hole pressures. ~ _ 20 AAC 25.200. SURFACE-EQUIPMENT. (a) Adequate produc- tion eguipment must be .installed to control, separate, process, - and clean in a safe manner all produced oil, gas, and water. All C equipment must be installed and maintained in accordance with -._ good established industry practice. - : • -. (b~ All equipment. must be adequately protected to insure ' reliable operation under the range of. weather conditions expected for the specific location and use. - - - - (c) Sdellhead equipment installed must include adequate gauges and valves on the tubing and on casing-tubing .and casing- - casing annuli to show surface pressures and to control .the well flow for the-range of conditions expected. Other alternatives may be approved for .subsea completions. (Eff. 4/13/80, Reg. 74) -- - Authority: AS 31.05.030 i~ i~ i~ [~ i~ i~ 20 AAC 25.205. NOTIFICATION OF ACCIDENTAL. LOSS OF OIL OR GAS. (a) The commission must be immediately notified by the operator of any accidental loss of oil or gas, ~ or both, from any drilling or producing well. This notification does not relieve the operator from complying with any other notification require- ments imposed by statute or regulation. - (b) 47ithin five days after the accidental loss, the opera- tor shall submit a written report to-the commission detailing the • following facts (1) time of incident; (2) location where incident took place; (3) volumes of oil and of gas lost; ' ( 4 ) cause of the loss; ~ . (5) actions taken and planned to prevent further loss; and - -19- - ® -' Register 74, July 1980 MISCELI,FINEOUS BOARDS, COMMISSIONS 20 AAC 25.205 20 AAC 25.230 ' (6) equipment or procedural changes, if applicable, to prevent the loss from recurring. (Eff. 4/13/80, Reg. ?4) • Authority: AS 31.05.030 .. 20 AAC 25.210. MULTIPLE COMPLETION OF 4~ELLS. A well may not be completed in more than one pool without approval of the commission. The commission will require evidence of adequate and complete separation as ascertained by pressure or circulation tests conducted at the time the packers are set. Subsequently, if packer leakage is suspected, the commission will, in its discretion, request the operator to provide proof of adequate and complete separation of the pools involved in the completions or make a packer leakage test. Notification must be given so that the packe r leakage test may be witnessed by a representative of the commission. (Eff. 4/13/80, Reg. 74) • Authority: AS 31.05.030 20 AAC 25.215. COMMINGLING OF PRODUCTION. (a) On the surface, the production from one pool may not be commingled with that from another pool except when the quantities from each source of the production are determined by periodic well tests or other measurements. (b) In the same well bore, commingling of production from two or more pools will not be permitted except after notice, hearing, and an order of the commission approving such comming- ling. After the first hearing the commission will, in its dis- cretion,••approve commingling in other wells in the same pools if the proposing operator has certified that all operators caith wells completed in one or more of the pools have been notified and no protest is furnished the commission within 15 days. (Eff. _,.4/13/80, Reg. 74) Authority: AS 31.05.030 20 AAC 25.225. CAPACITY OF GAS 47ELLS. All gas wells must be tested by the multi-point back pressure method upon comple tion or at a time requested by the operator and approved by the com- mission. The test results must be reported to the .commission on the form entitled Gas ~7e11 Open Flow Potential Test Report (Form 10-421) within 30 days after the test. '(Eff. 4/13/80, Reg. 74) _ Authority: AS _31.05.030 20 AAC 25.230. PRODUCTION MEASUREMENT. (a) All produc- tion from wells must be measured to determine the quality and quantity of produced fluids, using equipment and techniques acceptable to the commission such as API Standards, Recommended Practices, and Specifications. (b) Production may be measured from a lease or unitized property as a whole if adequate individual well test facilities are provided to enable accurate allocating and reporting of all t 1„i~ls: tc~ individual wc] is. -20- ' . i C. Register 74, July 1980 MISCELLANEOUS BOARDS, OMISSIONS 20 AAC 25.230 (c) Bypasses must not be connected around sales measurement equipment such as tanks, meters, gauges,.or gas meter runs. ~ c; ~c (d) The volumes of produced gas, oil and water must be . reported monthly, where appropriate, on the Monthly Production and Injection Report ~ (Form 10-405) , the Producer' s Report of Ga s Disposition (Form 10-422), and the Report of Injection Project (Form 10-413). (e) The commission will, in its discretion, require suffi- cient notice so that its representative may monitor, witness, and collect data from (1) well tests to verify production allocation and gas-oil ratio determinations; (2) measuring equipment installations to verify that (A) tank settings are' in accordance with API . Standards including automatic gauging, if installed; (B) liquid hydrocarbon metering is in accordance with API Std. 2502, "Lease Automatic Custody Transfer" and API Spec. 11N, "Lease Automatic Custody Transfer (LACY) Equipment"; (C) meter provers and calibration are in accord- ance with API Std. 2531, "Mechanical Displacement Meter Provers"; (D) gas metering, meter runs, and calibrations are in accordance with API Std. 2530, "Orifice Metering of Natural Gas" or gas metering by turbine and other meters is in accordance with accepted industry standards; and (E) gas volume determination is in accordance with acceptable differential pressure chart or electronic computer methods; - . (3) liquid hydrocarbon pipeline run tickets, to verify that the volumes for custody transfer have been properly deter- mined by making (A) .temperature adjustments to 60°F, from tanks or meters; (B) API gravity determinations from appropriate fluid samples in accordance with API Std. 2544, "Hydrometer Method"; (C) basic sediment and water (BS&W) determina- tions from appropriate samples in accordance with API Std. 2542, "Standard Methods of Test for Water and Sediment in Crude Oils"; and (D) meter proving factor determinations in accor- dance with API Std. 1101, "Measurement of Liquid Petroleum. Hydrocarbon and Positive Displacement Meter"; and API Std. 2534, "Liquid Hydrocarbons by Turbine Meter Systems" except that successive meter factors that differ by more than 0.0025 are unacceptable and proper steps must be immediately taken to bring the meter within acceptable tolerance. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 -21- ~. Register 74, July 1980 MISCELLANEOUS DOARDS, COMMISSIONS 20 AAC 25.235 20 AAC 25.245 ' 20 AAC 25.235. GAS UTILIZATION. (a) Gas from a well may be used in l ease or unit operations for (-1) light or fue 1 ; - . _ (2) injection to incraase the ultimate ~£ hydrocarbons, or for storage; recovery of ' (3) the extraction of liquid hydrocarbons if the gas -= ~~'a-is not wasted; and (4) the artificial lifting of oil from a pool if all ' gas returned to the surface is~used without waste. (b) Gas from a well must n~~t be permitted to the air without commission a l escape into ' pprova , except (1) when required for safety; (2) when required for initial testing; and (3) in -cases of operational necessity if no such ' escape is for more than five days within any 30-day period. (c) The disposition of gas production must be reported each , month on the Producer's Report of Gas Disposition (Form 10-422). (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.020 ' AS 32.05.030 ~~ 20 AAC 25.240. -GAS-OIL RATIOS. (a) An oil well may not be allowed to produce with a gas-oil ratio in excess of 2,000 cubic feet of gasper barrel of oil. (b).. Upon application by an operator, the limitation in (a ) of this section will, in the commission's discretion, be waived by the commission .~ (1) for wells producing -from a pool that has an approved additional recovery project; or (2) where the produced gas is being returned to~the same pool. (c) Exceptions-for conditions other than those specified in (b) of this section will, at the discretion of the commission, be granted only after application, notice, and hearing. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 20 AAC 22.245. COMMON PRODUCTION FACILITIES. Common facilities may be used to receive the production from any number of wells if adequate tankage or other measuring equipment is installed so that production-from each well can be accurately determined at reasonable intervals. The commission will, in its discretion, require the measurement of production from each lease. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 -22- R i _ eg ster 74, July 1980 ' MISCELLANEOUS BOARDS, OOi`~II~IISSIONS 20 AAC 25.250 '. 20 AAC 25.265 20 AAC 25.250. DISPOSAL OF SALT WATER AND OTHER WASTES. ' Salt water 'and other wastes may be disposed of by injection into `~ a hydrocarbon bearing formation upon approval of the commission The disposal must be . done in a manner that will not contaminate fresh water sources or endanger other' natural resources. (Eff. ' 4/13/80, Reg. 74) Authority: AS 31.05.030 20 AAC 25.255. EQUITABLE DISTRIBUTION OF PRODUCTION. ~ (a) Whenever the commissi on limits the quantity or rate of production of oil or gas that may be produced from a pool, the production allowed will be distributed among the weils or properties in such a manner that eac-h producer has. the opportunity to produce or receive his just and equitable share. ~• ' (b) Production tests of wells, in cases where the results of the tests may be used in determining correlative rights of other producers, may be witnessed by those producers and they ' must be notified by the operator of the wells and be given an opportunity to be present. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 ' 20 AAC 25.260. ILLEGAL PRODUCTION. No person may produce ~~ ~- or transport crude oil or natural gas from any well or :pool in Alaska except that which has been produced in accordance with the ' regulations and orders of the commission. (Eff. 4/13/8{3, Reg. 74) Authority: AS 31.05.030 20 AAC 25.265. AUTOMATIC SHUT-IN EQUIPMENT. (a) Any well covered by this chapter with an offshore surface location, which is capable. of unassisted flow of hydrocarbons, must be equipped with a commission-approved (1) fail-safe automatic surface safety valve (SSV) capable of preventing an uncontrolled flow; and (2) fail-safe. automatic surface controlled subsurface safety valve (SSSV), unless another type of subsurface valve is approved by the commi~;sion; this valve must be in the. tubing string and located below the mud line, permafrost, or at some other depth as may be required; the valve must be capable of preventing an uncontrolled flow. ', ' (b) 'The commission will, in its discretion, also require SSV' s or SSSV's,. or both, on wells in other areas after notice and hearing in accordance with sec. 540 of this chapter. ' (c) A representative of the commission will witness ope ra- tion and performance tests at intervals and times as prescribed by the commission to confirm that the SSV, SSSV, and all associ- ated equipment are in proper working condition. (Eff. 4,/13/80 Reg. 74 ) , Authority: AS 31.05.030 ' -23- • • ~ o Register 74, July 1980 MISCELLANEOUS BOAF~S, Cl7MMISSIONS 20 AAC 25.270 . 20 AAC 25.320 • 20 AAC 25.270. BOTTOM HOLE PRESSURES. The operator shall make a test to determine the bottom hole pressure in the dis- covery well in any new pool. The test must be made after the well has been shut-in for a period sufficient to allow an accu- rate determination of the reservoir pressure. The results must be reported to the commission on the form entitled Reservoir Pressure Report (Form 10-412). (Eff. 4/13/80, Reg. 74) Authority:. AS 31.05.030 ARTICLE 4. REPORTS. Section 300. Request for addition information 310. Books and records 320. Forms to be used 20 AAC 25.300. REQUEST FOR ADDITIONAL INFORMATION. .This chapter does not limit or 'restrict the authority of the commis- sion to require the furnishing of such additional reports, data, or other- information relative to drilling, production, transpor- tation, storage, or handling of crude oil or natural gas in Alaska, as may appear to it to be necessary or desirable, either generally or specifically, for the prevention of waste and the conservation of the natural resources of Alaska. (Eff. 4/13/80, Reg. 74) Authority AS 31.05.030 20~AAC 25.310. BOOKS AND RECORDS. All operators, pro- , ducers,~ transporters, storers, and handlers of crude oil and natural gas within Alaska shall make, and keep in Alaska for a , period of not less than five years, appropriate books and records covering their operation in Alaska. The data from these 15ooks and records -must be used to make and substantiate the reports required by this chapter. (Eff. 4/13/80, Reg. 74) , Authority: AS 31.05.030 20 AAC 25.320. FORMS TO BE USED. (a) Where this chapter , requires forms to be filed, .the forms to meet these requirements and the submission frequency are as follows (1)~ Application for Permit to Drill - Form 10-401 (each well); ~ _ (2) Bond - Form 10-402 unless blanket bond filed); (3) Sundry Notices and (irregular as needed); (4) Monthly Report of tions - Form 10-404 (monthly); (5) Monthly Production 10-405 (monthly); _._ (before drilling each well Reports on hells, - Form 10-403 ' Drilling and Workover Opera- and Injection Report - Form -24- 1 320 C 25 20 _ C ~ AA . Register 74, July 1980 MISCELLANEOUS BOAF~S, OOMNffSSIONS 20 AAC 25.400 , (6) Well Completion or Recomple tion Report and Log - ' Form 10-407 (within 30 days after completion, suspension, or abandonment); (7) Well• Status Report and Gas-Oil Ratio Tests Form 10-409 (irregular); •~ ~~ ' (8} Reservoir Pressure Report - Form 10-.412 (irregu- lar) ; (9) Report of Injection Project - Form 10-413 • (monthly); (10) Gas Well Open Flow Potential .Test Report - Form 10-421 (upon completion of gas well or at a time approved by the commission); and (11) Producer's Report of Gas Disposition - Form 10-422 (monthly). (b) These forms must be submitted to the Alaska Oil and Gas Conservation Commission at .3001 Porcupine Drive, Anchorage, Alaska 99501. (Eff. 4/13/80, Reg. 74) . Authority: AS 31.05.030 ARTICLE 5. ADDITIONAL RECOVERY METHODS. ' ~• Section. ~ 400. Application for additional recovery 410. Injection wells 430. Records and reports ~~ 20 AAC 25.400. APPLICATION FOR ADDITIONAL RECOVERY. (a) Any operator proposing to gain additional recovery by using methods other than those methods used for primary recovery shall submit an application for the project for approval by the commis- sion. (b) The application must contain the following: (1) the names and addresses of_ every operator of the project; . (2) a plat showing the unit, lease, or group of leases included within the proposed projec t; the plat must also show the location of the proposed injection well or wells and the location of all oil and gas wells, including abandoned and drilling wells and dry holes, and the name of every operator offsetting the area encompassed within the project; (3) the pools in which all wells are currently com- pleted; (4) the name, description, and depth of the pool to be affected by injection; (5) the logs of all existing injection wells; (6) the description of the casing in each injection well, or the proposed casing programs, and the proposed method for testing the casing before use as an injection well; -25- . • ~ ! Register 74, July 1980 MISCELLANEOUS Bpp,FI)S, Ct~hIIrffSSIONS 20 AAC 25.400 .. 20 AAC 25.430 (7) a.statement as to the injection fluid to be used, its sources, and the estimated amounts to be injected daily;. ~8) a tabulation showing recent production tests for. each of the producin oil d g an gas wells; and ' (9) a statement of the plan and rate of development of `the area included within the project. (c) A copy of the application must be mailed or delivered by the applicant ~~ (1) to every operator affected by the project as shown on the application on or before the date the application is filed with the commission;.and ~ ~~ (2) to the commission, including a list of ators, .with their addresses, to whom the application or delivered. ~ - all oper- was mailed (d) In the absence 'of any objection within 30 days from the date of mailing, the commission will, in its discretion, approve the application. If objection is made, the commission will set the matter for hearing in accordance with sec. 540 of this chap- ter. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.020 AS 31.05.030 20 AAC 25.410. INJECTION WELLS. Wells used for the injection of gas, air, water, or other extraneous fluids into the producing reservoir must have (1) safe and adequate casing which must be cemented to - prevent leakage - or damage to .oil, .gas or fresh water resources; (2) safe and adequate tubing with a packer in place to prevent communication with the tubing-casing annulus; and (3) regular monitoring of the tubing-casing annulus to detect pressure communication.~`(Eff. 4/13/80, Reg.-74) ' - Authority: AS 31.05.030 20 AAC 25.430.. RECORDS AND REPORTS. Each operator shall keep accurate records showing volumes of. fluids produced, inject- ed volumes,. reservoir pressures and injection pressures. Upon reasonable notice, the commission or its authorized representa- tive must be given full access during normal business hours to all records and reports. Each operator shall file with the commission. a monthly report which shows all produced and injected volumes and other data as required by the commission on the forms entitled Monthly Production and Injection Report (Form 10-405), Report of Injection Projects (Form 10-413) and Producer's Report of Gas Disposition (Form 10-422). (Eff. 4/13/80, Reg. 74) ' - ~ Authority: AS 31.05.030 -26- • R ister 74 Jul 1980 C e9 Y 4._.. MISCELLANEOt7S BOAF~S, QOC~SSIONS ARTICLE 6. GENERAL PROVISIONS 20 AAC 25.505 20 AAC 25.510 Section ' 505. 510. Scope of regulations ' Commission office, hours and seal 515. U.S. Government leases 520. Field and pool regulation and classification ' ~ 525. Forms upon request 526. .Fire hazard 530. Cooperation with other parties 536. Geologic data and logs 537. Public and confidental well information 538. Naming of fields and pools 540. 545. Hearings Public mailing list 550. Oaths 555. Orders 557. Subpoenas 570. Definitions ' ~_~ sist 20 AAC 25.505. SCOPE OF REGULATIONS. This chapter con- s of general regulations of state-wide application which appl y to all wells and fields. However, the commission will, in ~ its discretion, and after notice and opportunity for public ', ' comment, adopt orders applicable to particular areas or subject matter, which prevail over these general regulations to the extent that they are in conflict. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 ~ OFFICE, HOURS AND SEAL. (a) 20 AAC 25.510. COMMISSION The principal office of the Alaska Oil and Gas Conservation ' Comm ission is located at 3001 Porcupine Drive, Anchorage, Alaska 9950 1. The commission's telephone number is (907) 279-1433. (b) The office of the commission is open for the trans- action of business each day from 8:00 AM until 12:00 Noon and from 1:00 PM until 4:30 PM, except Saturday, Sunday and every state holiday. A commission representative will be available '• after normal office hours and on week-ends and holidays through an answering service by calling the same number as shown in (a) ' of this section. ~` I, __,_ • ~ Register 74, July 1980 P'SISCELI,ANEOUS BOAF~S, C~ffSSIONS . .•' 20 AAC 25.510 • 20 AAC 25.520 ' fc) The official seal of the commission is reproduced below. A o~t i . ~5~ -mod ~ '' ~ -`~~ din •~ ._~ I , O ~rloN Co~~ (Eff. 4/13/80, Reg. 74} Authority: AS 31.05.017 AS 31.05.030 AS 31.05.050(b) 20 AAC 25.515. U.S. GOVERNMENT LEASES. ~' drilling on United States Government leases shall comply withsall applicable regulations of the commission. which are not in con- flict .with applicable United States government regulations. (Eff. 4/13/80, Reg. 74) Authority; AS 31.05.010 20 AAC 25.520. FIELD AND POOL REGULATION AND CLASSIFICA- TION.. (a) Upon the request of the commission or any affected lease owner at any time after the discovery of oil or gas' 'in a -field or pool or both, a hearing will be held and the commission will issue an order, based upon the evidence presented, clas- ' sifying the pool as an oil or gas pool in a field and prescribing rules for the development of the pool. All pool orders so prom- ulgated must (1) prevent waste and protect correlative rights; and , (2) be based on the operating and technical data pre- sen ted . (b) The commission will, in its discretion, reclassify • fields and pools or amend pool orders upon the presentation of additional data at a subsequent hearing. (Eff. 4/13/80, Reg. 74) ' Authority: AS 31.05.020 AS 31.05.030 AS 31.05.060 AS 31.05.100 -28- ~ 1 ~ • Register 74, July 1980 MISCELLANEOUS BOAPDS, COMMISSIONS. 20 AAC 25.525 ' 20 AAC 25.536 c.: ' 20 AAC 25.525. FORMS UPON REQUEST. Forms .for applica- tions, notices, approvals, and reports required by the commission- ' will be furnished upon request. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 ICI , 20 AAC 25.526. FIRE HAZARD. Each well location must be maintained in a manner to prevent fires. All rubbish, debris, waste material, spilled oil, and any other substance that consti- tutes a fire hazard must be disposed .of in a manner and at a location approved by all applicable state and federal regulatory agencies. (Eff. 4/13/80, Reg. '14) Authority: AS 31.05.030 r 20 AAC 25.530. COOPERATION WITH OTHER PARTIES. The commission will, in its discretion, from time to time enter into arrangements with Alaska and federal government agencies, indus- try committees, and individuals with respect to special projects, services, and studies relating to the conservation of oil and gas. If any arrangement requires the commission to utlitize procedures not covered in this chapter, the procedures necessary to carry out the intent of the arrangement will be formulated and made available at the office of the commission after public ~~.~ notice and opportunity for public comment. (Eff. 4/13/80, Reg. 74 ) ' ' Authority: AS 31.05.023 AS 31.05.030 20 AAC 25.536. GEOLOGIC DATA AND LOGS. (a) The operator shall log the portion of the hole below the conductor pipe by either a complete electrical log or a complete radioactivity log unless the commission specifies: which type of log is to be run. (b) Within 30 days after completion, suspension, or aban- ' donment of a drilling well, the operator shall file with the commission ' (1) a complete mud log or a lithology log consisting of a detailed record and description of the sequence of strata encountered, including kind and character of the rock and all shows of hydrocarbons; (2) a complete set of washed and dried, legibly-iden- tified samples of all well cuttings as caught by the operator in accordance with good geological practices; (3) a brief description of all cores and a chip from ' each foot of recovered core; (4) a list of the geologic markers encountered in the ' well and the measured and true vertical depths of each marker; (5) a sepia and a reproduced copy of all logs run in the well, (including the composite logs, if available) except velocity surveys and experimental logs; and (6) the digitized data if available, for copying, for all logs required in (5) of this subsection, except the dipme ter ,,:r. survey. - 2 9 - 1 Register 74, July 1980 MISCELLANEOUS BOAF~S, OSNIl"lISSIONS 20 AAC 25.536 20 AAC 25.537 (c) The commission will, in its discretion, waive the requirements of (a), (b)(1), and (b)(2) of this section for development wells. ~ .. ~(d) In this section (1) "experimental logs" means the logs which are so newly developed or so limited or specialized in application that they are not commonly run on petroleum exploration or development wel 1 s; and (2) "velocity survey" means a survey, the primary purpose of which is to determine velocity of seismic waves through formations penetrated by a well by measuring travel times of seismic pulses from or near the surface to a seismometer lowered to various depths in the well, and also includes the integrated .time markers on sonic logs. (Eff. 4/13/80, Reg. 74) ' Authority: AS 31.05.030 AS 31.05.035 20 AAC 25.537. PUBLIC AND CONFIDENTIAL WELL INFORMATION. (a) The commission will routinely make available to the public, by means of records or reports, in its offices or elsewhere, or by means of regular publication, the following information (1) surface and proposed .bottom-hole location of each well, after approval of the drilling permit; (2) total depth, bottom-hole location and well status after the Well Completion or Recompletion Report and Log (Form 10-407) is filed; '~'- (3) production data and production reports, ~ as required to be filed by the operator each month; and (4) all well information required to be filed by the operator after the expiration of the confidential period. (b) Information not required by this chapter, but voluntar- ily filed with the- commission will be kept confidential if the person filing the information so requests. (c) In this section, "well status" means the classification of a well as oil, gas, service, suspended, or abandoned. (d) Except as provided by (a) of this section, the reports and information required to be filed by the operator will be kept confidential by .the commission for 24 months following the 30-day filing period unless the operator gives written 'and unrestricted permission to release all of the reports and information at an earlier date. .Upon notification from the commissioner of the Department of Natural Resources that he has made a finding that the required reports and information from a well drilled on state land contain significant information relating to the valuation of unleased land in the same vicinity, the commission will hold the reports and information confidential beyond the 24-month period -30- ~ • • ' - Re ister 74, Jul 1980 NffSCELLANF:OUS BOARDS, COh1MISSIONS 20 AAC 25.537 9 Y C . 20 AAC 25.540 and until notified by the commissioner of the Department of Natural Resources to release the reports and information. (Eff. .4/13/80, Reg. 74) Authority: AS 31.05.026 - AS 31.05.030 AS 31.05.035 20 AAC 25.538. NAP4ING OF FIELDS AND POOLS. (a) The following procedures must be followed for the naming of new fields and pools (1) if the operator believes the well is a new field or a new pool discovery and wants to participate in naming the ' discovery, he shall furnish information to i:he commission showing why he believes a new discovery has been made, not later than 30 days after the earliest of the following dates (A) the date the well information is released by the commission to the public; or (B) the date regular production commences; and (2) at the same time that the information in (a)(1) of this section is filed, the operator may submit three recommenda- tions for a new field name or a new pool name or both. He may indicate his first, second, and third choice of names. ' ~ -- (b) The commission will consider all of the information filed to determine if a new discovery has been made. If the ' ,. commission finds a new discovery has been made, the commission will select a field name or a pool name, or both, giving consid- eration to the operator's recommendation, significant landmarks, public use, conflicts with other pool and field names, geologic completion interval, and any other factors which make it unique, acceptable, and usable. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 20 AAC 25.540. HEARINGS. (a) Upon its own motion or when a request is received to issue an order affecting a single well or a single field, the commission will give notice by publishing ' in an appropriate newspaper. The notice will provide the essen- tial details of the proposed or requested order and set out the date, time, .and place for a hearing. A proper protest and ', request for hearing must be filed with the commission at its office in Anchorage, Alaska within 10 days after the publication date by any person who may be aggrieved by the requested order if ' issued. If such a protest is timely filed, a hearing will be held on the date and time specified in the notice. If no protest is timely filed, issuance of the order will be considered by the commission without a hearing. (b) The following procedure will be followed at public hearings conducted under (a) of. this section; ' (1) the hearing will be called to order and the sub- ject of the hearing along with the date and place of public notice given for the hearing wi13 be read into the record; e 1 ~ ~ Register 74, July 1980 MISCELLANEOUS BOARDS, COMMISSIONS 20 AAC 25.540 20 AAC 25.545 (2 ).. the commission will receive both sworn testimony and unsworn statements; it will give greater weight in its delib- erations to sworn testimony; (3) all persons wishing to testify will be sworn; (4) each witness shall state his or her name and who he or she represents; "'" ~ (5) each witness who wishes to give expert testimony shall state his or her qualifications and the commission will rule on whether the witness qualifies as an expert; (6) the applicant will be asked to present his testi- mony first; all others wishing to present testimony will be heard next; upon request, the commission will, in its discretion, allow cross-examination of witnesses by the applicant or affected owners; (7) anx person wishing to make an oral statement will be allowed to do so after the conclusion of all testimony; (8) any person wishing to submit a written statement will be permitted to do so after the conclusion of the oral statements; (9) the commission will,. in its discretion, ask ques- tions of any of the witnesses; (10) members of the audience will not be permitted to ask questions of witnesses directly; if they wish to have a question directed to a witness; they must write the question down and give it. to a designated commission representative indicating to whom the question should be directed; before the end of the hearing, .the commission will review these questions and ask those which it_ believes will be helpful in eliciting needed informa- tion; all questions will be included in the hearing record; and (11) a written transcript of the .hearing will be pre- pared and included in the public record of the hearing. (c) Hearings on matters of statewide or general application will be held under the applicable provisions of AS 44.62 (Admin- istrative Procedure Act). (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 AS 31.05,050 . AS 31.05.060 20 AAC 25.545. PUBLIC MAILING LISTS. Public mailing lists will be maintained by the commission for the purpose of sending appropriate notices, orders, and publications to persons who request to be put on these lists. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 AS 31.05.035 AS 31.05.050 AS 31.05.060 -32- 'I ~ ` Register ?4, July 1980 MISC.~T.r~~'OUS BOAFd)S, OCY~IMISSIONS 20 AAC 25.550 20 AAC 25.570 20 AAC 25.550. OATHS. Each member of the commission has the power to administer oaths to witnesses in any hearing, inves- tigation, or proceeding conducted under AS 31.05 and this chap- . ter. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 ' AS 31.05.070 20 AAC 25.555. ORDERS. No order, except in an emergency, will be issued by the commission except under the procedure con- tained in sec. 540 of this chapter. An emergency order will,~in the commission's discretion, be issued when an emergency requir- ing immediate action is .found to exist. An emergency order is not effective for- more than 15 days. (E:.:f. 4/13/80, Reg. 74) Authority: AS 31.05.030 ' AS 31.05.040 20 AAC 25.557. SUBPOENAS. (a) The commission will, in its discretion, issue subpoenas and subpoenas duces tecum. (b) Subpoenas duces tecum for the production of books, records, papers, or other documents of any sort will, in the commission's discretion, be issued by the commission upon a written request. The applicant must establish that he has a ` proper relation to the matter and show the relevance of the evidence sought and the facts expected to be proved by them. (c) The issuance of subpoenas, requiring the attendance of a witness for the purpose of taking oral testimony before the ' commission will, in the commission's discretion, be issued by the commission upon a written request. The applicant must establish that he has proper relation to'the matter and give the name and address of the desired witness. {Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 AS 31.05.070 20 AAC 25.570. DEFINITIONS. In this chapter, unless the context clearly requires otherwise (1) "API" means the American Petroleum Institute; ' (2) "API Specifications" means those specifications that are in effect at the time these regulations are promulgated.. ' (3) "API Standards" means those standards that are in effect a t the time these regulations are promulgated. (4) "API Recommended Prac tices" means those practices ' that are in effect at the time these regulations are promulgated. ~, standard (5) "barrel" means 42 U.S. gallons, measured under conditions; I' -°~ • • Register 74, July 1980 NfISCII.I,ANEOUS BOAF~S, COMbffSSIONS 20 AAC 25.570 (6) "BOP" means blowout preventer, which is a cas- inghead assembly equipped with special gates or rams or other packoffs which .can be closed around the drill pipe, tubing, casing, or tools and which completely closes the top of the casing to control well pressure; ' (7) "bottom hole ressure" means P the pressure in pounds per square inch gauge (psig) under conditions existing at or near .the producing horizon determined by means of an instrument adopted and recognized by the oil and gas industry; , (8) "commission" means the Alaska Oil and Gas Conser- vation Commission; - , -(9) "condensate" means the liquid recovered at the surface that results from condensation due to reduced pressure 1 or temperature of petroleum hydrocarbons existing in a gaseous phase in the reservoir; (10) "day" means a period of 24 consecutive hours from - 7:00 AM one day to 7:00 AM the following day; the calendar day is the day in which this period begins; (11) "development well" means a well drilled within the proved area. of an oil or gas reservoir to the depth of a strati- graphic zone known to be productive; (12) "drilling fluid" means any fluid as the term is commonly used in the industry for the purpose of drilling and removing cuttings from the well; (13) "drilling unit" means that area set by the commis- sion as provided for in AS 31.05.100; F ~, (14) "exploratory well" means a well that discovers or is drilled to discover a previously unknown pool; (15) "gas-oil ratio" means the ratio of gas in standard cubic feet to oil in barrels produced concurrently during any stated period; (16) "gas well" means a well which produces gas as its principal product; (17) "multiple completion" means the completion of any well so as to permit production from more than one pool with the ' production from each pool completely segregated; ' (18) "oil. well" means a well which produces oil as its principal product; , ~i -34- 1 . 1 ~_ 1 1 1 1 1 ~ CF 1~ i~ i~ i~ C Registr_r 74, .Tuly 1980 MISCF:T,T~NI:~)US 130ARDS, OON1N11:;S IC)NS 20 11/1C 2~-, i70 (19) "operator" means any person who, duly authorized, __ is in charge of the development of a lease or the operation of a well; (20) "potential" means the ability of a well to produce oil or gas as determined by an approved test; (21) "reservoir" means the same as pool; (22) "service well" means a well drilled or completed for the purpose of supporting production in an existing field; service wells are drilled for gas injection, water injection, steam injection, air injection, saltwater disposal, water supply for injection, observation, anti injection fcr_ in-situ combustion; (23) "standard conditions" means a temperature of 60 degrees Fahrenheit and an absolute pressure of 14.65 pounds per square inch; (24) "stratigraphic test" means a hole drilled for the sole purpose of gaining structural or stratigraphic information. or both and to a depth sufficient to penetrate and explore forma- tions which are prospective producing pools, but is not drilled with the intent to be completed as a producing well. (Eff. 4/13/80, Reg. 74) Authority: AS 31.05.030 Editor's Note: See AS 31.05.170 for further definitions. -35- Federal Onshore .Oil and Gas ONSHORE OIL AND GAS ORDER NUMBER 1 ~- '~ ~A "'='~°--' U.S. DEPARTMENT OF THE INTERIOR BUREAU OF LAND MANAGEMENT . ~ ANCHORAGE DIS TRICT OFFICE '. ,~ ~~ , r _. - s ~ = ~ , _ ;.. ~ ~ ~ s ~~~~ , y f f i 1 D i i~ DEPARTMENT OF THE INTERIOR Bureau of Land Management 43 CFR Part 3160 (trircular yo. 25381 Onshore Oil and Gas Order No. 1; Approval of Operatioris on Onshore Federal and Indian Oil and Gas Leases Under the authority of the Act of February 25, 1920, as amended and supplemented (30 U.S.C. 189. 226), and Executive Order 12291 (46 FR 13193), Part 3160. Group 3100, Subchapter C. Chapter II of Title 43 of the Code of Federal Regulations is amended as set forth below. croer I ~~ No. Approval 01 Operations Appendix Text of Oil and Gas Order Note. This appendix will not appear in the Code of Federal Regulations. Contents Onshore Order Introduction I. Accountability ' II. Special Situations III. Drilling Operations A. Surveying and Staking B. Material to be Filed 1. Notice of Staking 2. Application for Permit to Drill C. Conferences and Inspections D. Processing Time Frames E. Cultural Resources Clearance F. Threatened. and Endangered Species Clearance and Other Critical Environmental Concerns G. Components of a Complete Application for Permit to Drill iV.•Subsequent Operations A. Production Facilities B. Other Operations C. Emergency Repairs D. Environmental 13eview V. Well-Abandonment VI. Water Well Conversion VII. Privately Owned Surface VIiI. Reports and Activities Required After Well Completion Onshore Oil and Gas Order Federal and Indlan Oil and Gas Leases Order No. 1 Effective: November 21. 1983 Approval of Operations Introduction This Order is established pursuant to the authority prescribed in 43 CFR Part 3160, formerly 30 CFR 221. Approval of all proposed exploratory, development, and service wells, and all required approvals of subsequent well operations. and other lease operations, shall be obtained in accordance with 43 CFR 3162.3-1, .3162.3-2, 3162.3, 3162.3-4 and PART 3160-ONSHORE OIL AND GAS OPERATIONS Section 3164.1(b) is amended by adding the following table: § 3164.1 Onshore Oil and Gas Orders. (b) . . Federel Effective date fiegrster Supersedes reference Nov. 21. 1983......E 4a Ffa-..._....i NTL-6. 3162.5-1, formerly 30 CFR 221.23, 221.27, 221.28, 221.29, or 221.30, as appropriate. All wells approved for drilling under the provisions of this Order shall have been included in a drilling plan, as required under 43 CFR 3162.3-1(d), formerly 30 CFR 221.23(d). A drilling plan may be submitted for a single well, or for several wells that are proposed to be drilled to the same zone within a field or area of geological and ~:nvironmental. similarity. Plans for additional development of the leasehold should be considered in the submittal. However, approval of Form 3160-3, formerly 9-331C (Application for Permit to Drill, Deepen, or Plug Back) is required for each well, and in order to be complete an Application for Permit to Drill (APD) shall include alI information required under 43.CFR 3162.3-1 (d) at}d (e). A technically and administratively complete APD includes, in addition to Form 3160-3, a drilling plan, evidence of bond coverage, a designation of operator, when appropriate, and such other information as may be required by applicable Order or Notice to evaluate the proposal. Refer to section III.G. for more detailed guidance on complete APD's. Certain subsequent well operations . and other lease operations involving additional surface disturbance shall be included in a plan submitted on Form 3160-5, formerly 9-331 (Sundry Notices and Reports On Wells), and approved under the provisions of this Order pursuant to 43 CFR 3162.3-2 or 3162.3-3, formerly 30 CFR 221.27 or 221.28, respectively. A report on all subsequent well operations shall be filed on Form 3160-5, as prescribed in 43 CFR 3162.3-Z. A notice of intention to abandon a well and a subsequent report of abandonment.shall also be filed on pnhlicharl in dit F ~~ df2Q1r;- t'lrhnt+o~ 71 1QR'3 - Fffr+r~iva NnvAmho~ 71 Form 3160-5, as required by 43 C.FR 3162.3. All applications for approval under the provisions of this Order shall be submitted to the appropriate authorized officer of the Bureau of Land Management (BLM). "Authorized Officer" means any person authorized :n perform the duties prescribed. To be advised of the proper BLM official and office with which to file an application. the lessee/operator may contact the appropriate District Manager of BLM having jurisdiction over lease operations in a particular area. The lessee/operator shall comply with the following requirements: I. Accountability. Lessees and operators have the responsibility to see that their exploration, development. production, and construction operations are conducted in a manner which (1) conforms with applicable Federal laws and regulations and with State and local laws and regulations to the extent that such State and local laws are applicable to operations on Federal or Indian leases: (2) conforms with the lease terms, lease stipulations, and conditions of approval; (3) results in diligent development and efficient resource recovery; (4) protects the lease from drainage; (5) affords adequate safeguards for the environment; (6) results in the proper reclamation of disturbed lands: (7) conforms with current available technology and practice; (8) assures that underground sources of fresh water will not be endangered by any fluid injection operation; and (9) otherwise assures the protection of the public health-and safety. Lessees and operators shall be held fully accountable for their contractors' and subcontractors' compliance with the requirements of the approved permit and/or plan. Drilling/ construction and associated operations shall not be conducted, without prior approval of the authorized officer of BLM. BLM approval of the APD does not relieve the lessee and operator from obtaining and other authorizations required for operations on Federal and Indian lands. Il. Special Situations. Lessees and operators, as well as their contractors and subcontractors, shell not commence any operation or construction activity on a lease, other than cultural resource inventories and surveying and staking well locations on Federal and Indian lands, without the prior approval 'of the authorized officer of BLM, except ~'or certain subsequent operations (see Section IV. of this Order). The terms_and conditions of an approved permit and drilling plan, or other plan, shall not be altered unless BLIbt first has approved an amended or supplemental permit and/or plan covering any such modifications. For proposed operations on a committed State of fee tract in a Federally supervised unit or communitized tract. the operator shall furnish a copy of the approved State permit to the authorized officer of BLM which will be accepted for record purposes. In addition, in cases where an access road to anon-Federal or non- Indian drillsite will cross leased Federal or Indian lands, the operator shall submit a surface use plan only for those portions of the access road on Federal or Indian lands where new construction or reconstruction will occur. Such plane shall be submitted to the authorized officer of BLM or appropriate Federal Surface Management Agency (SMA) and approval obtained prior to commencement of construction operations on the Federal or Indian surface. For privately owned surface, refer to section VII. III. Drilling Operations. A. Surveying and Staking. Surveying and staking mad be done without advance approval from the authorized officer of BLM or other appropriate SMA and prior to the conduct of any required cultural resource inventory, except for lands administered by the Department of Defense or other lands used for military purposes, or where significant surface disturbance is likely to occur. Lessees and operators are strongly encouraged to notify the appropriate SMA prior to entry upon the lands for the purposes of surveying and staking. Early notification will allow the SMA !o apprise the lessees and operators of any existing conditions, knowledge of which could result in saving of time aad money by both industry and Government. These include but are not limited to: -Whether a cultural resource inventory is required: -Presence of threatened or endangered species and/or critical habitats; -Vehicle access restrictions: and/or -Permitting requirements applicable to affected lands outside the leasehold boundary. Where the surface is privately owned or held in trust of Indian benefit, the lessee/operator is responsible for making access arrangements with the private surface owner or the Bureau of Indian Affairs (BIA) and Indian tribe or Indian allottee(s) prior to entry upon the lands for the purpose of surveying and staking. Staking shall incltide the well location, two 200-foot directional reference stakes, the exterior dimensions of the drill pad, reserve pit and other areas of surface disturbance, cuts and fills, and centerline flagging of new roads with road stakes being visible from one to the next. Cut and fill staking applies only to the wellsite, reserve pit. and. if off-location; and ancillary facilities. B. Material to be Wiled. 1. Notice of Staking. Prior to filing a complete APD, the lessee or operator may, at its option, file a Notice of Staking (Attachment A) with the authorized officer of BLM and appropriate office of any other involved SMA. In Alaska, a copy of the Notice shall also be sent to the appropriate Borough when a subsistence stipulation is part of the lease. The information contained in the Not)ce of Staking (1VOS) will aid in identifying the need for associated rights-of--way and special use permits. If all required infotmation is not included. the NOS shall be returned to the operator for modification. ' 2. Application for Permit to Drill (APDJ. Regardless of wh.ther an NOS is filed, the lessee or operator shall file an APD. This application shall be administratively and technically complete prior to approval. The authorized officer of BLM shall advise the lessee or operator, within 7 working days of receipt of the application, as to whether or not the application is complete. If the application is complete, oral notification will suffice. If the application is not complete, notification to that effect shall be made in writing even though the lessee or operator may have already received oral notification. For purposes of written notification, Attachment B, Checklist For Applicant Notification, shall be mailed to the applicant within the 7-day period. The notification shall advise the lessee or operator of any defects that need correcting and of any addiGoZial information required. If the deficiencies are not corrected and/or the additional required information is not submitted within 45.days of the date of any oral or written notice (if no prior oral notice), the application shall be returned to the proponent Upon initiation of the APD process, the authorized officer of BLM shall consult with any other involved SMA and with other appropriate interested parties, and shall take one of the following actions within 30 days: (1) Approve the application as-submitted or with appropriate modifications or stipulations; (2) return the application and advise the lessee or operator of the reasons for disapproval; or (3) advise the lessee or operator, either in writing or orally with subsequent written r i i Y I r i confirmation, of the reasons why final action will be delayed and the date such final action is expected. When the NOS option is followed, BL.'vI shall strive to process the subsequent related APD within 10 days of the APD's receipt. However, in either situation, the process of reviewing the APD and advisi~ the lessee or operator as to whether it is technically and administratively complete shall be considered a part of the overall APD processing time, i.e., 30 days in case of the APD option and 10 days if the NOS process is utilized. Operators are cautioned that with respect to any particular well, the option selected initially, of either filing both an NOS and a subsequent APD or only an APD, is to be followed and there shall be no shifting between the two options. If operators fail to maintain a consistent approach in this regard, the processing time already expended shall not be counted as part of the above 30-day period. The processing of applications shall be given a high priority, and individual applications shall be processed according to the date the application is received by the appropriate SLM office. If it is not possible for BLM actions to be taken prior to lease expiration. the lessee or operator shall be advised, at least orally, prior to the lease expiration date, with all such notifications confu'med in writing. Said advice shall detail the reasons for delay so that the lessee or operator may take such appeal or other recourse to preserve the lease as is allowed by law and/or regulation. The appropriate BLM office telephone number and address shall be furnished to the lessee or operator with the earliest notification o>R advice. C. Conferences and Inspections. An onsite predrill inspection shall be acheduled'and conducted by the appropriate BLM office within 15 days of receiving the applicant's initially-filed document, i.e., either an NOS or a complete APD. Tn special circums#ances. the authorized officer of BLM may require the filing of a complete APD prior to the. scheduling of an onsite predrill inspection. Representative~of the appropriate BLM office, the operator and other interested parties, such as any other involved SMA, the appropriate Alaska Borough (when a subsistence stipulation is part of the lease), and the operator's principal dirt and drilling contractors shall attend the predrill inspection. ~'Vhen appropriate, the operator's surveyor and archeologist should also participate in the inspection.. If any other involved SMA is not able toy participate at the desired time, the inspection may be rescheduled provided it can be conducted within the 15-day period. When private surface is involved, the lessee or operator shall furnish the name, address and telephone number of the private surface owner on the NOS form or, in the surface use program, such information shall be attached to the APD. The BLM shall invite the surface owner to participate in the onsite inspection. This invitation will be extended as early as possible. However, a surface owner's inability to attend shall'not delay the scheduled inspection unless BLM can conveniently reschedule the inspection within the 15- day time period. Joint inspections, i.e., those involving any other SMA, normally shall not be held far proposed. in-fill well locations in developed fields if an appropriate environmental assessment (EA) already has been completed by BLM for the field or that area of the field. However, if staffing permits, a representative of BLM shall inspect-those proposed locations where a joint predrill inspection is not held. At the time of onsite inspection, staking of the location shall have occurred, as specified in part A of this section. The surface use and reclamation stipulations shall be developed during the onsite inspection and provided to the operator either at the-location or within 5 working. days from the date of the onsite inspection, barring unusual circumstances. These requirements shall be incorporated into the complete application, when filed, if the proponent is following the NOS option. Otherwise, these requirements shall be incorporated as conditions of the ApD approval if an NOS is not filed. However, this does rot preclude the possibility of additional conditions being imposed as a result of the review of the complete application. D. Processurg Time Frames. The following table summarizes the major time frames involved in processing most APD's: APD OPTION Action items Oay6 Onsite inspection....-....„... Wimot 15 d.ya suer receipt of tM APD. Reyuiren,ants to Da Devebped onsite or wiNKt 5 imposed when APD is working tlays thereaner. apw~ Complete prtlcessirtg W Within 30 days of the APD's rs• APD. eaipt, provided that n a tecnrtF silty and atlminbtrativaly eav- pots et the end W the 30-0ay period (includes the above is day and 5Eay periods. NOS OPTION Action items ~ Days Onsite inspection ............... within 15 days suer receipt of the NOS. Requirements for Fwnghed onsite or vMhin 5 work- inclusion mAPD. ing days thereaker. Complete processing Ot Within t0 days of the APD's re- APD. ceip4 prdvidetl that it is techrti catty and atlmmnvatively com• plate at the end Ot tha 10-day period. The above timeframes together comprise the total period during which BL_~I anticipates it will be able to process approximately 90 percent of all APD's. However, the 30 days may not run consecutively even when APD's are filed immediately after onsite inspections. For example, any time used by lessees or operators to correct deficiencies, or to prepare and submit information initially omitted•from the application and which causes delays in processing beyond BLM's control, shall not be counted as part of the 30-day period. However, BLM shall continue to process applications up to the point where any missing piece of information or an uncorrected deficiency renders further processing impractical or impossible. Processing delays which extend the 30-day processing time are expected to occur in less than 5 percent of the cases. ]n addition, delays in conducting onsite inspections within 15 days of receiving an NOS (or an APD if an NOS is not filed), or delays in providing all stipulations to the operator within 5 working days of an onsite inspection may occur in.less than 5 percent of the cases during periods of severe weather conditions and in areas where certain environmental concerns or jurisdictional conflicts exist. Such areas include, but are not limited to: 1. Certain tribally or individually owned Indian trust or restricted lands. Z. Lands withdrawn for Federal reservoirs and Federal lands surrounding such reservoirs. 3. Lands in formally designated wilderness areas, lands formally proposed for such designation, .lands within BLM Wilderness Study Areas or lands within Forest Service Further Planning Areas. 4. National Recreation Areas. 5. Wildife Refuges. ti. Certain Federal lands in Alaska. 7. Lands under jurisdiction of the Department of Defense. 8. Lands where a major problem exists with respect to cultural resources. 9. Lands known to contain threatened or endangered species and/or critical habitats. The 30-day time frame for completion of the APD process also may be exceeded in most cases where it is necessary to prepare an EA, and in all cases where it is necessary to prepare an environmental impact statement (EIS). Lessees and operators are also cautioned that if the NOS/APD process begins less than 30 days prior to the desired date of commencement of drilling operations, the process may not be completed within the time desired. E., Cultural Resources Clearance. Because consultation with the involved SMA and the State Historic Preservation Officer on matters that relate to the protection of historic and cultural resources is provided in BLM (36 CFR 800.4(a)(1)). lessees and operators should contact the involved SMA at least 15 days prior to the.submission of an NOS or APD to determine whether any actions are necessary to locate and identify historic and cultural resources. If such actions are necessary, lessees and operators are encouraged to complete the work and report prior to the submission of any ether material to the authorized officer of BI,M but, in any event, no later than the time the complete APD is submitted. Survey work and a related report shall be required only if the involved SMA has reason to believe that properties listed, or eligible for listing, in the National Register of Historic Places (NRHP) are present in the area of potential effect. Historic and~ultural resources work on privately owned surface shall be undertaken only with the consent of the private surface owner. If the private surface owner refuses entry for that purpose, the lessee or operator shall use its best efforts to conduct its approved operations in a manner that avoids adverse effects on any properties which are listed, or may be eligible for listing, in the NRHP. F. Threatened and Endangered Species Clearance and Other Critical Environmental Concerns. The involved SMA shall identify any threa3ened and endangered species and/or critical habitat problems and other environmental concerns, e.g., wilderness and wilderness study areas, wild and scenic rivers, etc., to minimize the possibility of drill site relocation. Should the SMA, if that agency is not BLA:, be unable to carry out this responsibility. BLM shall do so. BLM shall identify any known or potential surface geological hazards. If any of these concerns exist, information in that regard shall be conveyed to the lessee/operator by-BLM no later than when the surface use and reclamation stipulations are provided; however, the lessee/operator can ensure ear'.ier identification of potential ccnflict in these areas ei concern by contacting the involved SMA prior to the submittal of an NOS or APD. The authorized officer of BLI4t should be timely apprised of any contacts with any other involved SMA. G. Components of a Complete Applicat~'on for Permit to Drill. 1. Complete Application. If an NOS is filed, the lessee/operator shall prepare and submit a complete APD witrin 45 days of the onsite inspection pursuant to the requirements ~of this subsection. Fa~7ure tq timely submit an APD within this time frame may result in the lessee/ operator having to repeat the entire process.-'The complete APD shall be submitted in triplicate to BLM, together with any additional copies required by the authorized officer. As provided in 43 CFR 3162.3-i(d), formerly 30 CFR 221.Z3(d), a complete application consists of: (a) Form 3280-3, (b] a drilling plan (or reference thereto) containing information required by section G.4., below, (c) evidence of bond coverage as required by Department of the Interior regulations, (d) designation of operator, where necessary, and (e) such other information as may be required by applicable Orders and Notices, including a cultural resource report (if required and nat already filed). The APD shall be signed by the lessee/ operator official having the responsibiHtq and authority to supervise and direct all activities related to the pe,,mit and who can be contacted in the event of a problem. Ttte authorized officer gray require additional information irr urmsual circurrrstances. However, where the proposed well is to be completed for injection purposes (disposal or production enhancement), lessees and operators also shall obtain an underground injection permit from the Environmental Protection Agency (EPA) or the State, where the State has achieved primacy. Any information submitted in support of obtaining that permit shall be accepted by the authorized officer Eo the extent that it satisfies the information submission requirements of this Order. 2. Designation of Operator. The lessee may authorize the actual conduct of operations in its behalf by designating another party as operator in a manner and form acceptable to the authorized officer. Lassoes shall notify the authorized officer in writing whenever an existing designation of operator is cancelled. A designated operator cannot designate a different party as operator. 3. Form 3160-.? formerly9-331 (Application for Permit to Drill. Deepen, or Plug Back). This Form shall be completed in full and submitted to the authorized officer together with all necessary information referred to under section G.1. above. The following poin#s a. through f. are specific as to appropriate information requirements of the Form and shall be stated thereon, or es an attachment thereto, for each proposed well: a. A welt location plat shall be attached depicting the proposed location, as determined by a registered surveyor, in feet and direction fram the nearest section lines of an established public land survey or, in areas where there are no public land surveys,'by such other method as is acceptable to the authorized officer. The plat shall be signed by the surveyor, certifying that the, location has, in fact, been staked on the grounds as shown on the plat b. The elevation given shall be the above-sea-level datum of the unprepared ground. c. The type of drilling tools and associated equipment to be utilized shall be stated. d. The proposed casing program shall include the size, grade, weight, type of thread and coupling, and setting depth of each string, and whether it is new or used. e. 'The amount and type of cement, including additives to be used in setting each casing string, Qhall be described. If stage-cementing techniques are to be employed, the setting depth of the stage collars and amount and type of cement, including additives, to be used in each stage shall be given. The expected linear fill-up of •each cemented string or each stage, when utilizing stage-cementing techniques, shall be provided. £ The anticipated duration of the total operation shall be given in addition to the anticipated starting date. A eopy of the approved Form 3160 and the pertinent drilling plan, along with any conditions of approval, shall be available at the drillsite to authorized or delegated representatives of the United States whenever active construction, drilling, or completion operations are under way. 4. Drilling Plan. A drilling plan in sufficient detail to permit a complete appraisal of the technical adequacy of, and environmental effectl; associated with, the proposed project shall be prepared and either submitted with each copy of Form 318a-3, or referenced thereon if it is alroady on file with BLM or is being submitted for more than one we1L The play shall be developed in conformity with the provisions of the lease, including attached stipulations, and the guidelines provided by this Order or other land use documents. ~~ Each drilling plan shall contain a description of the drilling program and surface use program. The BL1i shall send a copy of appropriate parts of the plan to any other involved S*dA and may send a copy of the plan to other interested Federal, State, and local agencies. All information identi%ed as' proprietary by the applicant pursuant to 43 CFR 3162.8, formerly 30 CFR 221.33. shall first be deleted. The drilling program shall include a description of the pressure control system and circulation mediums. the testing, logging and coring program, pertinent geologic data, and information on expected problems andhazards. The drilling program shall be reviewed for adequacy by BLM. The criteria/standards set forth in the operational manual section (currently designated~CDM 643.1.3E, Technical Considerations), or in effect at the time of submission of the APD, generally will be utilized in evaluating the technical adequacy of a proposed drilling plan. If the program is considered adequate, BLM shall require modification of the drilling program. The surface use program shall contain a description of the road and drill pad location and construction methods for containment and disposal of waste material, and other pertinent data as the authorized officer may require. The surface use program shall provide for safe operations, adequate protection.of surface resources aad uses and other environmental components, and shall, for Federal and Indian surface, include adequate measures for reclamation of disturbed lands no longer needed for either drilling or other subsequent operations. Where,-the surface is privately owned the authorized officer may require the submission of the reclamation plan between the lessee or operator and landowner in order to determine if it is adequate to protect nearby Federal and Indian surface from significant impacts generated by the operation. In developing the surface use program, the lessee or operator shall make use of such information as is available from the involved SMA concernng the surface resources and uses, environmental considerations, and local reclamation procedures. The surface use program shall be reviewed for adequacy by BL.'~i and by any other involved SMA The criteria standards set forth in the Surface Operating Standards for Oil and Gas Exploration and Development Handbook, Second Edition, August 1978, or as subsequently revised generally shall be utilized in evaluating the adequacy of a proposed surface use plan. If the surface use program is considered inadequate, BLIVi • shall, in consultation with any other involved SMA, require modifications or amendment of the program or otherwise set forth stipulations or conditions of approval as are necessary for the protection of surface resources/uses and the environment, and for the reclamation of the areas to be disturbed when no longer needed for operational purposes. a. Guidelines for Preparing Drilling Program. The following information shall be included as part of the drilling plan but shall be made specific to each well if the plan covers more than one well: (1) Estimated tops of important geologic markers. (2) Estimated depths at which the top and the bottom of anticipated water (particularly fresh water), oil, gas or other mineral-bearing formations are expected to be encountered and the lessee's or operator's plans for protecting such resources. (3) Lessee's or operator's minimum specifications for pressure control equipment to be used and a schematic diagram thereof showing sizes, pressure. ratings (or API series), and the testing procedures and testing frequency. (4) Any supplementary information more completely describing the drilling equipment and casing program as set forth on Form 3160-3. (5) Type and characteristics of the proposed circulating medium or mediums to be employed in drilling, the quantities and types of mud and weighting material to be maintained, and the monitoring equipment to be used on the mud system. (6) The anticipated type and amount of testing, logging, and coring. (7) The expected bottom hole pressure and any anticipated abnormal pressures or temperatures or potential hazards, such as hydrogen sulfide, expected to be encountered, along with contingency plans for mitigating such identified hazards. (8) Any other facets of the proposed operation which the lessee or.~perator wishes to point out for BLM's consideration of the application. (b) Guidelines for Preparing Surface Use Program. In preparing this program, the lessee or operator shall submit maps, plats, and narrative descriptions which adhere closely to the following (maps and plats should be of a scale no smaller than 1:24,000 unless otherwise stated below): (1) Existing Roads. A legible map (USES topographic, county road, Alaska Borough, or other such map), labeled and showing the access route to the location, shall be used for locating the proposed well site in relation to a town (village) or other locatable point, such as a highway or county road, which handles the majority of the through traffic to the general area. The proposed route to the location, including appropriate distances from the point where the access route exits established roads, shall be shown. All access roads shall be appropriately labeled. Any plans for improvement and/or a statement that existing roads will be maintained in the same or better condition shall be provided. Existing roads and newly constructed roads on surface under the jurisdiction of an SMA shall be maintained in accordance with the standards of the SMA. Information required by items (2), (3), (4). (5), (6), and (8) of this subsection also may be shown on this map if appropriately labeled or on a separate plat or map. (2) Access Roads to Be Constructed and Reconstructed. All permanent and temporary access roads that are to be constracted, or reconstructed, in connectionfn+ith the drilling of the proposed well shall be appropriately identified and submitted on a map or plat. Width, maximum grade, major cuts and fills, turnouts, drainage design, location and size of culverts and/or bridges, fence cut and/or cattleguards, and type of surfacing material, if any, shall be stated for all construction. In addition, where permafrost exists, the methods for protection from thawing must be indicated. Modification of proposed road design may be requird during the onsite inspection. Information also should be furnished to indicate where existing facilities may be altered or modified. Such facilities include gates, cattleguards, culverts, and bridges which, if installed or replaced, shall be designed to adequately carry anticipated loads. (3) Location of Existing Wells. It is recommended that this information be submitted on a map or plat and include all wells (water, injection or disposal, producing, and drilling) within a 1-mile radius of the proposed location. (4) Location of Existing and/or Proposed Facilities if Well Is Pmductive. (a) On well pad-A map or plat shall be included.showing, to the extent known or anticipated, the location of all production facilities and lines.to be installed if the well is successfully compllted for production. (b) Off well pad-A map or plat shall be included showing to the extent known or anticipated, the existing or new production facilities to be utilized and the lines to be installed if the well is successfully completed for production. If new construction, the dimensions of the facility'.ayout are to he shown. If the information required under (a) or (b) above is not known and cannot be accurately presented and the well subsequently is completed for production, the operator shall then comply with section IV. of this Order. (5) Location and Type of Water Supply (Rivers. Creeks, Springs, Lakes. Ponds, and WellsJ. This information may-be shown by quarter-quarter section on a map or plat, or may be a written description. The source and transportation method forall water to be used in drilling the proposed well shall be noted if the source is located on Federal or Indian lands or if water is to be used from a Federal or Indian project. If the water is obtained from other than Federal or Indian lands ;only the location need be identified. Any access roads crossing Federal or Indian lands that are needed to haul the water shall be desoribed in items G.4.b. (i) and (2), as appropriate. If a water supply well is to be drilled on the lease, it shall be so stated under this item, and the authorized officer of BLIvt may require the filing of a separate APD. (ti) Construction Materials. The lessee or operator shall state the character and intended use of all construction materials, such as sand, gravel, stone and soil material. If the materials to be used are Federally-owned, the proposed source shall be shown by either quarter- quarter section on a map or plat, or a written description The use of materials under BLM jurisdiction is governed by 43 CFR 3810.2-3. The authorized officer shall inform the lessee or operator if the materials may be used free of charge or if an application for sale is required. If the materials to be used are Indian owned or under the jurisdiction of SMA other than BLI~I, the specific tribe and or Area Superintendent of BiA, or the appropriate SMA office shall be contacted to determine the appropriate procedure for use of the materials. (7) Methods for Handling Waste Disposal A written description shall be given of the methods and locations proposed for safe containment and disposal of each type of waste material (e.g., cuttings, garbage, salts, chemicals, sewage, etc.) that results from the drilling of the proposed well. Likewise, the narrative shall include plans for the eventual disposal of drilling fluids and any produced oil or water recovered during testing operations. (8) Ancillary Facilities. The plans, or subsequent amendments to such plans, shall identify all atrcillary facilities such as camps and airstrips as to their location, land area required, and the • methods and standards to be employed in their construction Such facilities shall he shown on a map or plat. The approximate center of proposed camps and the center line of airstrips shall be staked on the ground. (9) Well Site Layout. A plat of suitable scale (not less than 1 inch=50 feet) showing the proposed drill pad and its location with respect to topographic features is required. Cross section diagrams of the drill pad showing any cuts and fills and the relation to topography are also required. The plat shall also include the proposed location of the reserve and burn pits, access. roads onto the pad, turnaround areas. parking arcs, living facilities, soil material stockpiles, and the orientation of the rig with respect t~ the pad and other facilities. Plans, if any, to line the reserve pit shall be detailed. (10) Plans for Reclamation of the Surface. The program for surface reclamation upon completion of the operation, such as configuration of the reslLaped topography, drainagesystem, segregation of spoils materials, surface manipulations. waste disposal, revegetation methods, and soil treatments, plus othet~practices necessary to reclaim all disturbed areas, including any access roads.or portions ,of well pads when no longer needed, ,shall be stated. An estimate of the time for commencement and comp)etion of reclamation operationa, dependent on weather conditions and other local uses of the area, shall be provided. (~ 1}Surface Ownership. The surface ownership (Federal. Indian, State or private) at the well location, and far all lands crossed by roads winch are to be constructed or upgraded, shall be indicated. Where the aurface of the welh site is privately owned, the operator shall provide the name, address and telephone number of the surface owner, unless previously provided. (12) Other Information. The lessee or operator is encouraged to submit any additional information that may be helpful in processing the application. (13) Lessee's or Operator's Representative and Certification. The name, address and telephone number of the lessee's or operator's field representative shall be included. The lessee or operator submitting the APD shall certify as follows: I hereby certify that I, or persons under my direct supervision, have inspected the proposed drill site and access route; that I am familiar with the conditions which currently exist: that the statements made in this plan are, to the best of my knowledge, true and correct: and that the work associated with operations proposed herein will be performed by and its contractors and subcontractors in conformity with this plan and the terms and conditions under which it is approved. This statement is subject to the provisions of 18 U.S.C. 1001 for the filing of a false statement Date [Name and Tide 5. Environmental Review Requirements. When an onsite inspection is conducted, it shall be made by representatives of the authorized officer and the operator, and other interested parties such as the involved SMA, the appropriate Alaska Borough (when a subsistence stipulation is part of the lease), and the operator's principal (construction and drilling) contractors: It is recommended that, when appropriate, the operator's surveyor and archeologist. should also participate in the inspection. The purpose of this inspection shall be to ensure the staked location, access roads and other areas proposed for surface disturbance are geologically and environmentally acceptable, giving appropriate consideration to all applicable Federal laws and regulations. Lessees and operators are encouraged to designate their future drilling sites so that several locations may be inspected at one time. a. Federal Respnnsibilitie~ When an inspection is made, the information obtained shall be utilized by BLM in appraising the emrirotmtental effects associated with the proposed action and. in preparing pertinent portions of the required environmental documentation. As the approving agency. BLM has the lead responsibility for completing the environmental review process and establishing the terms and conditions under which the proposed action may be approved. The conduct of the environmental review process, under the Department of the Interior's implementing procedures pursuant to the National.Environmeatal Policy Act, will result in the preparation of a Rdcord of Review (ROR) and/or as EA, consistent with pertinent regulations and procedures. This review shall identify the probable and potential environmental impacts associated with the proposal and methods for mitigating these impacts and shall be the basis of the approving official's determination.as to whether approval of the proposed activity would or would not constitute a major Federal action significantly affecting the quality of the human environment as defined by section 102(2)(C) of the National Environmental Policy Act of 1969. A "would constitute" determination shall necessitate the r r r r 1 r 7 preparation. of an EIS. In that case, final action on the APD shall not be taken until the EIS and Record of Decision are completed. b. Other Considerations. Lessees and operators are sttvngly encouraged to file their NOS and/or complete APD at least 30 days in advance of the time when they wish to cammence operations and to consult with the involved Sl\4A as early a's possible to identify potential areas of concertt(see sections III. E. and F.). N. Subsequent Operations. Subsequent operations shall'oe conducted in accordance with 43 CFR Part 3160, formerly 30 CFR 221. However, where the proposed subsequent operation will result in the well being converted for injection purposes (disposal or production enhancement), lessees and operators also shall obtain an underground injection permit from EPA or the State, where the State has achieved primacy. Any information submitted in support of obtaining that permit shall be accepted by the authorized offcer of BLM to the extent that it ratifies the information submittal requirements of this Order. A. Well and Production Operations. Before conducting further well operations that involve change in the original plan, a detailed written statement of the work shall be filed on Form 3160-5 or 3160 , as appropriate, with the authorized officer and approval obtained before the work is started. These operations include redrilling, deepening, performing casing repairs, plugging-back, altering casing, performing nonrautine fracturing jobs, recompleting in a different interval, performing water shut-ofd and converting to injection or disposal. Within 30 days of the completion of such operations, a subsequent report shall be filed on Form 3160-,5 and if the well is recompleted, a recompletion report on Form 3160-4, pursuant to 43 CFR 3162.3- 2 and the information collection approval note, formerly 30 CFR 222.27 and 221.2-1. Unless additional surface disturbance is involved and so tong as the operations conform to the standard of prudent operating practice, no prior approval is required for routine fracturing or acidizing jobs, or recompletion in the sarhe interval, but a subsequent report of these operations shall be filed on Form 3160-5, formerly 5-331, within 30 days of completion, pursuant to 43 CFR 3162-2.3 and the information collection approval note; formerly 30 CFR 221.27 and 221.2-1. Neither prior approval nor a subsequent report is required for well • clean-out work, routine well maintenance (such as pump, rods, and tubing work), or for repair, replacement, or modification of surface production equipment, provided no additional surface disturbance is involved. However, the modification of any production, treating, and measurement facilities shall require the submissior. of a revised schematic diagram within 30 days of the completion of such operations, pursuant to 43 CFR 3162.7-2, formerly 30 CFR 221.34. B. Surface Disturbing Operations. Pursuant to 43 CFR 3162.3-2 and 3162.3- 3, formerly 30 CFR 221.27 and 221.28. lessees and operators shall submit, for the approval of the authorized officer, a proposed plan of operations on Form 3160-5 prior to undertaking any subsequent new construction, reconstruction, or alteration of existing facilities including, but not limited to, roads, emergency pits, firewalls, flowlines, or other production Facilities on any lease when additional surface disturbance will result. If, at the time the original APD was filed, the lessee. oi• operator elected to defer submitting information for item III.G.4.b.(4), "Location of Existing and/or Proposed Facilities if Well is Productive," the lessee or operator shall supply this information for approval prior to . construction and installation of the facilities. The authorized officer, in consultation with any other involved SMA, may require a field inspection before approving the proposal. C. Emergency Repairs. Emergency repairs may be conducted without prior approval provided that the authorized officer is promptly notified. Sufficient information shall be submitted to permit a proper evaluation of any resultant surface disturbing activities as well as any planned accommodations necessary to mitigate potential adverse environmental effects. D. Environmental Review. The environmental review procedures discussed in section III.G.S. of this Order shall also apply to subsequent operations which involve additional surface disturbance. V. Well Abandonment. No well abandonment operations may be commenced without the prior approval of the authorized officer. In the case of newly drilled dry holes or failures and in emergency situations, oral approval may be obtained from the authorized officer subject to prompt written confirmation. For old wells not having an approved abandonment plan, a sketch showing the disturbed area and roads to be abandoned, along with tl~e proposed reclamation measures. shall be submitted with Form 3160-5.On Federal and Indian surface, the appropriate SMA may request additional reclamation measures at abandonment, which normally shall be made a part of BLM's approval of abandonment. Within 30 days following completion of the well abandonment. the lessee or operator shall file with the authorized officer of BLM a Subsequent Report of Abandonment on Form 3160-5, in accordance with 43 CFR Part 3160. formerly 30 CFR Part 221. Upon completion of reclamation operations. the lessee or operator shall notify the authorized officer when the location is ready for inspection, via an additional Form 3160-5. Final abandonment shall not be approved until the surface reclamation work required by the approved drilling permit or approved abandonment notice has been completed to the satisfaction of the involved SMA: VI. Water Well Conversion. The complete abandonment of a well which has encountered usable fresh water shall not be approved if the SMA or surface owner wants to acquire the well. If, at abandonment, the SMA or surface owner elects to assume further responsibility for the well, the SMA or surface owner, as appropriate, shall reimburse the lessee or operator for the cost of any recoverable casing or wellhead equipment which is to be left in or on the hole solely because it is to be completed as a water well. The lessee or operator shall abandon the well to the base of the deepest fresh water zone of interest, as required by the authorized officer, and shall complete the surface cleanup and reclamation, as required by the approved drilling permit or approved abandonment notice. immediately upon completion of the conversion operations. VII. Privately Owned Surface.-A. Federal oil andgos leases. Where the well site and access road surface are privately owned or are held in trust for Indian benefit, the lessee or operator is responsible for reaching an agreement with BIA or the private surface owner as to the requirements for the protection of surface resources and reclamation of disturbed areas and/or damages in lieu thereof. However, if the authorized officer or any other involved SMA determines that the surface of Federal or Indian-owned lands in proximity to the proposed well site or access road on private surface will be significantly affected. the lessee or operator may be required to furnish a copy of any existing agreement between the lessee or operator and the surface owner to the authorized officer. If the agreement on ~ ~ r private surface is considered inadequate to protect the surface of adjacent Federal or Indian-owned lands, the authorized officer or other involved SMA may prescribe additional measures to protect the adjacent Federal or Indian lands. In the event there is no agreement between the surface owner and the operator, the operator may comply with the provisions of the law or the regulations governing the Federal or Indian right of reentry to the surface (See Subpart 3814 of this title) and the authorized officer may then proceed to issue the permit. B. Indian oil and gas leases. Where the well site and access road surface are privately owned or are held in trust for an Indian or Indian tribe other than the owner of the oil and gas rights, the lessee or operator is responsible for reaching an agreement with the surface owner (or the BIA if the surface is held in trust for numerous or unlocatable Indian owners) as to the requirement for the protection of surface resources and reclamation of disturbed areas and/or damages in lieu thereof. However, if the authorized officer or any other involved SMA determines that the surface of Federal or Indian-owned lands in proximity to the proposed well site or access mad on private surface will be significantly affected, the lessee or operator may be required to furnish the authorized officer a copy of any existing agreement between the lessee or operator and the surface owner. If the agreement on private surface is considered inadequate to protect the surface of adjacent Federal or Indian- owned lands, the authorized officer of other involved SMA may prescribe additional measures to protect the adjacent Federal or Indian-owned lands. In the event there is no agreement between the surface owner end fire operator, the authorized officer may permit the operator to conduct operations if he/she determines that:'(1) a good faith effort has been made by the operator to reach agreement with the surface owner. (2) adequate security is posted in the form of a bond, escrow account or by other means, to compensate the surface owner for any damages; and (3) there is no legal obstacle to conducting operations in the absence of surface owner consent. VIII. Reports and Activiiies Required After Well Completion. Within 30 days after the well completion, the lessee or operator shall furnish 2 copies of Form 3180-4, formerly 11-330 (Well Completion or Recompletion Report and Log) to the authorized officer. However, no later than the fifth business day after any well begins production anywhere on a lease site or allocated to a lease site, or teaumea production in the case of a well that has been off production for more than 90 days, the lessee or operator shall notify the authorized officer of the date on which production has begun or resumed. The notification may be provided orally if promptly confirmed is writing. Dated: August 9,1983. Jeffrey F. 2sbleq Acting Assistant Director forFiaid Leasable Minerals. Approved: Dated: August 17,1983. Amoid E. Petty, Acting Associate Director, Bur+eo~ of Land Management suts+o cooE cats-w.~ 1 U ~1 r 1 r r r Attachment A SAMPLE FGR:AT NOTICE OF STA.:ItiG ~ 6. Lease Number (Not to be used in place of ~ Application for Permit to Drill Form 3164-3 ) ~ _ _ 7. If Indian, Allottee or 1. Oil [~ 11 _~ Gas Well (_~ Other ~ Tribe Name (Specify) ~ 2. Naee of Op 8. Unit Agreement Name 3. Name of Spe 'f c Contact Person: 9. Farm or Lease Name 4. Address ~ Phone No 0 e for or Agent 110. Well No. 5. Surface Location of Wel ~ 11. Field or Wildcat Name Attach: a) Sketch showing r _d ~ y nto pad, pad dimensions, a r ve pit. ~ 12. Sec., T., R., M., or Blk b) Topographical or other accepta e ~ and Survey or Area map showing location, access o ~ ~" and lease boundaries. •~ 15. Formation Objective(s) 16. Estimated [dell ~ Depth ounty, Parish 14.-State ~ ~ or Borough ~ ~ ~ ~ ~ ~ 17. Additional Inforffation (as appropriate; must include surface owner's name, address, and telephone number) it 13. Signed r r r Title Date ::o±e: Upon receipt of this Notice, the Bureau of Land Management (BLM) will schedule the date of the onsite predrill inspection and notify you accordingly. The location must be staked and access road must be flagged prior to the onsite. Operator; must consider the following prior to the onsite: a) H25 Potential bl Cultural Resources (Archeology) c) Federal Righ~ o Way or Special Use Fermit aaunc cone u~aaa-c IMPORTANT: SEE REVERSE SIDE FOR INSTRUCTIONS ~_ r r Instructions for Preparation of Attachment A General., This provides notice to the Bureau of Land Management (BLIvf) that stsking has been (or will be} completed for well locations on Federal or Indian leases and serves as a request to schedule an onsite inspection. The original and one copy of this notice, together with a map and sketch_ shwld be submitted to the appropriate Bi_.M office. Any item not completed may be justification fornot promptly scheduling the onsite inspection. Specific Considerations: Items included herein should be reviewed and evaluated thoroughly prior to the onsite. These items affect placement of location, road, and facilities. Failure to be prepared with complete, accurate information at the onsite may necessitate later re-evaluation of the site and an additional onsite inspection. a. HzS Potential: Prevailing winds, escape routes, and placement of living quarters must be considered. b. Cultural Resources: Archeological surveys, if required, should be done prior to, during or immediately following the onsite. Changes in location~due to subsequent archeological findings may require an additional onsite. Contact involved Surface Management Agency (SMA) for detailed site specific requirements. c. Federal Right-of-Wa}a or Special Use Permit: Access roads outside the leasehold boundary vvhicl~ cross Federal lands will require aright-of--way grant or special use permit and should be discussed with the BLM or other involved SMA at the time of filing the Notice of Staking. Supplemental Checklist: The following items, if applicable, should be submitted with or prior to the Application For Permit to Drill (APD) to ensure timely approval of the applicataon. Contact the BLM regarding specific requirements relating t~ each item. a: Bonding. b. Designation of Operator. c. Report of Cultural Resources/ Archeology.. d. I-i~S Contingency Plan. e. Status of Plan of ,Development and Designation of Agent for wells in Federal units. f. Federal Right-of-Way (BLM) or Special Use Permit (forest Service). Timetable: The onsite inspection will be scheduled and conducted bq the BLM within 15 days after receipt of this notice. Surface ptotesti~on and rehabilitation requirements will he made known to the operator by the BI.M during the onsite ar no later than S working days from the date of inspection, barring unusual circumstances. These requirements are to be incorporated into the complete APD. However, this does not exclude the posaibiliiy of additional conditions of approval being imposed. Attachment R Date~- Bureau of Land Management Checklist for Applicant Notificetion Receipt and Acceptability of Application for Permit To Drill (APD) Lease No. Well No. Lessee Operator Date AP17 Received 1.-APD complete as submitted. 2.-APD is deficient in the following area(s) and (see items 3, 4, ocs below): -Designation of Operator -Designation of Agent under unit agreement -Bonding -Cultural Resonrces Report (depends on Federal Surface Management, Agency's Requirements -Form 3-331C -Drilling Plan -Other Refer to attachment(s) for any specifics] 3.-API? is retained: to be processed upon receipt of further information as noted above. 4.-APD is being processed; final action pending receipt of further information as nailed above. 5.-APII is returned for the following ceasons: Note:- A returned APD herewith may be resubmitted when convenient at which time it will be reviewed. again for techaicsi and adnuaistrative complete>aess: A retained but deficient APD must be brought to a technically and administratively acceptable level of completion within 45 days of the date of this notice or the application will be returned unapproved. il?R Doc. 83-2892 Filed 16.20-i'~.8:46 emt ea~~ cotn: a~aaa-~ Dated: September 21. lyts3. Harold W. Furman II. Acting Assistant Secretory of the Interior. 10 ~. Federal Onshore Oil and Gas 1 TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS FOR APPLICATIONS FOR PERMIT TO DRILL AND SUBSEQUENT OPERATIONS - r ~~ ~. .~ ~- ~. .~ S. DEPARTMENT ~°='~°-~ U OF THE INTERIOR j . BUREAU OF LAND MANAGEMENT - ANCHORAGE DISTRICT OFFICE i ~ i H-3160-1 - TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS Table of Contents Page I. Introduction ..........................................................2 II. Technical Considerations ..............................................2 A. Casing ..............................................................2 B. Cement ....................................................... ......4 C. Blowout Preventers ..................................................5 D. Drilling Fluid ......................................................5 E. Safety and Public Health Hazards ....................................6 F. Completion Program ..................................................6 G. Hole Deviation ......................................................6 III. Environmental Considerations ..........................................7 Illustrations 1. Checklist for Drilling Approval Administrative Review Format 2. Drilling Program Technical Review Format 3. Surface Use Program Technical/Environmental Review Format 4. Record of (Categorical Exclusion) Review Format 5. Blowout Prevention•Equipment Systems Rel. 3-79 BLM MANUAL 2/2/84 2 H-3160-1 - TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS I. Introduction. This Handbook supplements the Manual Section on Application for Permit to Drill and Subsequent Operations by providing detailed guidance and useful forms and checklists for conducting the technical and environmental review of an Application for Permit to Drill or of a subsequent operation. The forms and checklists found as illustrations at the end of the Handbook are not mandatory in format or content. Although use of standardized forms is desirable, minor modification to the forms may be made to suit the needs and circumstances of the various Field Offices. Illustration 1 is a recommended checklist for internal Field use to track important elements, such as time frames associated with processing the application, and to ensure that the application is administratively complete in accordance with Onshore Oil and Gas Order No. 1. Illustrations 2, 3, and 4 are designed to facilitate the technical and environmental reviews of the application. As the application is being reviewed for completeness, specialists may proceed to conduct these adequacy reviews, while identifying any deficiencies associated with the .application. Upon completion of the technical and environmental reviews, the reviewers present the findings along with, recommended stipulations, if any, to the authorized officer, who approves or disapproves the application. II. Technical Considerations. The following provides a list of major technical factors to be considered in reviewing a proposed drilling program. Upon review of each item, appropriate boxes of Illustration 2 should be checked, dated, or initialed. Illustration 3 also contains elements that require technical appraisal. Technical completeness and the adequacy of the proposal are evaluated and shown on Illustrations 2 and 3. A. Casing. The proposed casing program must be adequate to protect all fresh water zones, zones with oil and gas potential, and zones containing anp other mineral deposits. The setting depth of each casing. string must be such that the seat is opposite a rock stratum that will bear the weight of the casing string and that is competent (including the weight of the over- burden) to contain any pressures to which the stratum at the seat will be exposed. Setting depths must also include consideration of other relevant factors, such as fracture gradients, fluid pressures indigenous to the formations, lost circulation zones, abnormally pressured zones, or other unusual characteristics. In the absence of specific information for a geologic province, normal formation pressures are assumed to approximate 0.4~i-0.50 psi per foot of depth; a higher measurement is considered abnormally pressured. Rel. 3-79 BLM MANUAL 2/2/84 ~ s 3 H-3160-1 - TECHNICAL AND ENVIRONI~NTAL CONSIDERATIONS Fracture gradients vary depending on the nature of rock, but are less than the overburden stress and generally range from 0.6 to 0.85 psi per foot of depth. Design parameters for casing programs, especially in a known normally pressured area, require casing/formation containment of bottom hole pressures (BHP's) assuming a gas/oil cut mud with a 0.33 psi per foot pressure gradient. However, in areas of known abnormal pressure or for wildcats, one should assume that gas will displace the mud in the casing and, further, that the gas column in the well exerts no more than 0.15 psi per foot of depth and that the gas specific gravity does not exceed 0.6. _ Casing programs must be checked to ensure that the proposed weight and grade have sufficient strength to avoid collapse, burst, or tension failure. Information as to the size, grade, weight, type of thread and coupling setting depth of each string, and whether new or used is required. 1. Conductor Casing. This casing maintains hole integrity in shallow, unconsolidated sediments. It generally is set to a maximum depth of 120 feet and cemented to the surface where practical. 2. Surface Casing. This casing is designed to provide a competent anchor for blowout prevention equipment, which provides well control until the next string of casing is set; and to protect fresh water zones. This casing is set in a competent bed and cemented with sufficient cement to fill all the annular space. Generally, it is set to a depth that is at least 10 percent of the proposed total depth of an exploratory well or the next proposed casing string. For development wells, the length of the surface string and the cementing program are determined by known field conditions. The competence of the formation at the casing seat is generally more critical than the setting depth. 3. Intermediate Casing. One or more strings of intermediate casing must be set when required for protection of oil, gas, fresh water zones, and other mineral deposits; protection against abnormal pressure zones and lost circulation zones; or when otherwise required by expected well conditions. A sufficient volume of cement must be used to cover and/or isolate all hydrocarbon zones or other mineral deposits; isolate abnormal pressure intervals from normal pressure intervals; and/or isolate brackish water from fresh water. When any intermediate casing string does not extend to the surface, at least a 200-foot overlap between the outer and inner strings is desirable, but in no case may it be less than 100 feet. The interval of overlap must be made pressure competent, preferably by cementing but at least by pressure-competent hanger tools, and must' be pressure tested after installation. Generally, intermediate casing for wildcat wells is sef to a depth of between 20 and 30 percent of the proposed total depth or next casing point. For development wells, the setting depth for this string cementing practice is determined on the basis of the conditions previously encountered in the area. BLM MANUAL Rel. 3-79 2/2/84 ~ ~ 4 H-3160-1 - TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS 4. Production Casing. This string of casing must be set before com- pleting the well for production. When the production string does not extend to the surface, at Least a 200-foot overlap between the outer and inner strings is desirable, but in no case may it be less than 100 feet. The interval of overlap must be made pressure competent, preferably by cementing but at least by pressure-competent hanger tools, and must be pressure tested after installation. This casing string also must be cemented so that all exposed fresh water zones, oil and gas zones, other mineral deposits, and anomalous pressure intervals below the previous string are covered or isolated. The proposed drilling program must provide that all casing strings (except the conductor casing) be pressure tested (0.2 psi/foot or 1,000 psi, whichever is greater) prior to drilling the plug after cementing; test pressures must not exceed the internal yield pressure of the casing. If the pressure declines more than 10 percent in 30 minutes, or if there is other indication of a leak, corrective measures must be taken. A successf ul pressure test must be obtained before proceeding to the next step of the drilling program. When appropriate, drill pipe protectors, usually of hard rubber design, can be required to protect both the drill pipe and the casing from wear, with particular consideration given to drilling through intermediate casing strings and/or in deviated wells or in "dog leg"'situations. B. Cement. Proposed cement volumes, type of cement and additives, and anticipated fill-up must be checked to ensure that sufficient cement will be used to protect all potentially productive zones, fresh water zones, zones containing other minerals, or other zones known to require protection. The setting depth of stage collars and the expected linear fill-up of each cemented string or stage must also be checked, when stage-cementing techniques are used. For surface, interntediate, and production casing strings, if there are indications of improper cementing (such as lost returns, cement channeling, failure of cement to circulate to surface, when necessary, or mechanical failure of equipment), the authorized officer must require that the operator recement or make the necessary repairs. The authorized officer can require the operator to run a temperature or cement bond log to verify that the casing has been adequately cemented. Such logs also can be required by the authorized officer when it is important to verify that certain zones are protected. In areas subject to surface mining, for oil through coal or other valuable mineral deposits tl life of the well, consideration may be given to a program that would permit, if necessary, the well depth and cut off and, after mining is completed, and put bac~C on production. BLM MANUAL and gas wells drilled 'tat may be mined during the casing and cementing to be plugged below mining the well to be reentered Rel. 3-79 2/2/84 s ,~ 1 1 r 1 r r A u • 5 H-3160-1 - TECHNICAL AND ENVIRON'~NTAL ::~NSIDERATIONS C. Blowout Preventers. The well control system must be designed to meet the conditions likely to be encountered in the hole. The rated working pressure of the blowout preventer stack should approximate, but need not exceed, the least of the following: (1) The burst pressure rating of the casing to which it will be attached; (2) the formation breakdown pressure at the shoe of said casing string; or (3) the maximum anticipated surface _ pressure to which the equipment may be exposed. Illustration 5 provides detailed information on blowout prevention equipment. The drilling application should have included a schematic drawing showing the following: Casinghead with connection; casing or drilling spool with kill line; blind rams; pipe rams; annular type or bag preventer; choke manifolds and header; manual control for valves; hydraulic controls (on rig floor and ground level remote); and accumulator system. The arrangement of the equipment on the stack may vary in accordance with API Bulletin RP 53 (Illustration 5) or its revisions, provided, however, that the kill line. must be below those primary units (blind and pipe rams) that would be closed in an emergency and the kill line has one or more master valves and check valves. The arrangement of pipe rams above blind rams or vice versa is acceptable, but two sets of pipe rams should be required when a mixed size drill string is to be utilized. A backup power source capable of closing. ~ the preventers must be required.. The proposed program also must provide for blowout prevention drills, periodic pressure tests (e.g., at the time of installation, prior to drilling out each casing shoe, and at least every 30 days), and regular maintenance. In addition, the pipe and blind rams must be activated at the midpoint of each round trip. The approval of the authorized officer must stipulate any additional special testing or other requirements needed to assure safe operations. Ram-type preventers and related control equipment must be tested to the rated working pressure of the stack assembly, or to 70 percent of the minimum internal yield pressure of the casing, whichever is less; or to such pressure as the authorized officer may otherwise prescribe. After installation, annular-type preventers must be tested to 50 percent of the rated working pressure; or to such pressure as the authorized officer may otherwise prescribe. ~~ D. Dri lling Fluid. The mud program submitted by the operator must include the expected weights and type of mud and weighting material (including hydrogen sulfide neutralizers when warranted) by depth intervals. The mud program must be adequate to contain expected pressures without causing formation breakdown and resultant lost circulation; its chemical composition in contact with fresh water zones must be nontoxic. When air or natural gas is used as the drilling medium, the operator must include the compressor and other special equipment in a schematic diagram. The drilling program should include: Stand-by mud, already mixed, - in the working pit; a blowout preventer stack; and staked-down blooie or exhaust lines ending at least 100 feet from the rig, with a constant-burning pilot light. If practicable, two lines in opposite directions, with control valves, should be installed as a protection against changing wind directions. Rel. 3-79 BLM MANUAL 2/2j84 • ~ ~ 6 ~ i H-3160-1 - TECHNICAL AP7D ENVIRONMENTAL CONSIDERATIONS ^ ~. For exploratory wells, the operator must state in the APD the minimum quantities of mud material, including weighting material, to be maintained at the drill site for emergency use (generally, not less than that needed to make a mud volume equal to the calculated active downhole and surface capacity). The APD also must list type and location of both the mud monitoring or measurement equipment and the degasser. E. Safety and Public Health Hazards. The drilling application must address all potential safety and public health hazards and plans for their mitigation. If hydrogen sulfide (H2S) gas is expected to be encountered in dangerous quantities during drilling, the drilling application should include a contingency plan covering all proposed safeguards, the method and location of detection equipment and warning devices, public identification and alert plans, and employee education plans. This education covers the dangers of exposure to H2S and procedures to be followed, if H2S is encountered during drilling. The preventive measures and operating practices required must be provided to control the effects of the toxicity and corrosive characteristics of H2S. F. Completion Program. The completion program for a development well should be included as part of the application. For an exploratory well, the operator may submit his proposed completion program as a part of the application, or later on Form 3160-5, for the approval of the authorized _.~ officer, after a discovery has been made. The proposed program is checked to ensure that the completion type (open hole, liner, perforated casing) is adequate to isolate the target formation from other formations not considered a common source of supply during all phases of operations (testing, treating, producing, injecting, and abandonment). If the well is to be completed in more than one zone, then the downhole equipment must be checked to ensure the necessary separation of the formations, unless downhole commingling is also approved. G. Hole Deviation. Unless otherwise approved by the authorized officer, all well holes must be drilled substantially vertically, i.e., within 10 degrees of the vertical, with a maximum deviation of 1 degree per 1000 feet, and with a maximum rate of change of 1 degree per 100 feet. If there are indications of excessive deviation, directional surveys can be required to determine the magnitude of the angle of drift and the direction in which the well hole is deviated. r Rel. 3-79 BLM MANUAL 2/2/84 r r i H-3160-1 - TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS III. Environmental Considerations. 7 r r r r i. r r r r r r r I~ Most proposed oil and gas actions are subject to a categorical exclusion review (CER). This process is undertaken to ensure that an action, as proposed, would involve no impacts that may be environmentally significant. Information provided in the Surface Use Program, as required by Order No. 1, is the basis for evaluation of environmental effects of the proposed action. These are tabulated with description, as shown in Illustration 3, which is designed to facilitate review for adequacy or acceptability from both engineering and environmental points of view. The result of the environmental review then can be recorded in Illustration 4 as a record of the CER. The nine exception criteria used in the CER process to evaluate the potential impact of the categorically excluded action are that the proposed action may: 1. Have significant adverse effects on public health or safety. 2. Adversely affect such unique geographic characteristics as historic or cultural resources, park, recreation, or refuge lands, wilderness areas, wild/scenic rivers, sole or principal drinking water aquifers, prime farmlands, wetlands, floodplains, or ecologically significant or critical areas, including those listed on the Department's National Register~of Natural Landmarks. 3. Have highly controversial environmental effects. 4. Have highly uncertain environmental effects or involve unique or unknown environmental risks. 5. Establish a precedent for future action or represent a decision in principle about a future consideration with significant environ- mental effects. 6. Be related .to other actions with individually insignificant but. cumulatively significant environmental effects. 7. Adversely affect properties listed or eligible for listing in the National Register of Historic Places. 8. Affect a species listed or proposed for listing on the list of Endangered or Threatened Species. 9. Threaten to .violate a Federal, State, local, or tribal law or requirements imposed for the protection of the environment or which require compliance with Executive Order 11988 (Floodplains Management), Executive Order 11990 (Protection of Wetlands), or the Fish and Wildlife Coordination Act. BLM MANUAL Rel. 3-79 .2/2/84 • • r 8 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS . If none of the criteria is met, the action is excluded from further environmental documentation. However, if as a result of the CER the proposed action meets any of the nine exception criteria, an environmental assessment (EA) must be prepared. The EA should focus on the particular issue(s) identified in the CER. At the conclusion of an EA, it must be determined whether or not the proposed action is a major Federal action significantly affecting the quality of the human environment according to Section 102 (2)(C) of the National Environmental Policy Act. If the proposed action is determined to be such a major Federal action, then no decision on the project can be made until an environmental impact statement is completed. An EA must be prepared automatically when an application is filed to drill the first Federal or Indian confirmation well in a newly discovered field. Thus, each new field involving Federal minerals should be analyzed at this point for the cumulative impacts of full field development and the findings and necessary mitigation measures documented in an EA. The operator(s) should be asked to provide a conceptual development plan for the field to assist in this analgsis. The term "confirmation well" is loosely defined, but is construed usually as the second well drilled after a discovery. However, one or two additional wells after the discovery well is completed may be permitted with a CER,'if these are needed to better define the extent of the discovery. r r i r ~j 1 ~, ~' ~I 1 1 r Rel. 3-79 BLM MANUAL 2/2/84 • Illustration 1 (I) H-3160-1 - TECHNICAL AND ENVIRONMEN'",1L CONSIDERATIONS CHECIQ.IST FOR DRILLING APPP.OVAL ADMINISTRATIVE REVIEW FORMAT Authorized Operator Lease Name/Expiration Date / Locatioa (Section, Townshi , Ran e)/County / Well Number/Ty e / Surface Ownershi Bond Coverage/ Archeolo ical Re ort. / Communitization Agreement Required?/Agent Under Unit A reement. / Surface Management Agency Co y Sent/Received. (date) / (date) CER Conducted/EA Needed? / Notice of Staking (NOS) Filed/Field Ins c. Held? (date) / (date) 7-day Notification After Receipt of NOS/of APD. (date) / (date) APD Received/A roved (date) / (date) *Note: When private surface is involved, lessee/operator must furnish name, address, and, if known, telephone number of private surface owner, prior to the onsite inspection either (a) on NOS form, or (b) in Surface Use Program, accompanying the Application for Permit to Drill (APD). Rel. 3-79 BLM MANUAL 2/2/84 Illustration 2 (I) H-3160-1 - TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS DRILLING PROGRAM TECHNICAL REVIEW FORMAT Date Received Subsequent with Not with Information Information OK for Information Re uired APD APD Incom lete Received A royal 1. Surveyed Location Plat* 2. Elevation* 3. T e of Drillin Tool* 4. Pro osed De th** . Estimated Tops of Geologic Markers.*** 6. Estimated Tops and Bottoms of Water, Oil, Gas, or Other Minerals; Protection Plans.*** 7. Casin Pro ram* 8. Setting Depths of Casing and Cement Pro ram.* 9. Pressure Control Equipment- Diagram. Testing Procedures and Fre uenc .*** 10. Mud Pro ram*** 11 ., Anticipated Type and Amount of Testin , Lo in , Corin .*** 12. Expected Bottom Hole Pressure; any Anticipated Abnormal Pressures, Temperatures, or Hazards; Contin enc Plana.*** 13. Startin Date, Duration** 14. Any Additional Information Volunteered S ecif ).*** *Information required on, or attaeirei tai Porm 3160-3. (See Order No. 1.) **Form 3160-3 only. ***See Order No. 1. Additional Requirements or Revisissr lrfsr• Approval May Be Granted. Petroleum Engineer Rel. 3-79 SLM MANUAL 2/2/84 Illustration 3, Page 1 (I) H-3160-1 - TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS SURFACE USE PROGRAM TECHNICAL/ENVIRONMENTAL REVIEW FORMAT Date Received Subsequent with Not with Information Information OK for Information Re uired APD APD Incom lete Received Ap royal 1. Existin Roads (Ma ) 2. Planned Access Roads (Ma or Plat). 3. Location of Existing Wells (Ma or Plat). 4. Existing and/or Proposed Location of Production Equipment on/off Well Pad (Ma or Plat). 5. Location and Type of Water Supply (Map, Plat, and/or Written). 6. Construction Materials-- Source, Tape (Map, Plat, or Written). 7. Methods and Location of Waste Dis osal Written). 8. Ancillary Facilities (Ma or Plat). 9. Wellsite Lagout Plat (not less than 1 inch SO feet). 10. Plans for Surface Reclamation 11. Surface Ownershi 12. Additional Information Volunteered. 13. Representatives (Lessee's or 0 erator's) S Certification. Additional Requirements or Revisions Before Approval may be Granted. Reviewer Rel. 3-79 2/2/84 BLM MANUAL • Illustration 3, Page 2 H-3160-1 - TECHNICAL AND ENVIRONMEENTAL CONSIDERATIONS CHECKLIST DESCRIPTION FOR SURFACE USE PROGRAM 1. Existing Roads--a legible map, labeled and showing: A. Access route to location (including distances from point where access route exits established roads). B. Location of proposed well site in relation to a town (village) or other locatable point such as a highway or county road that handles majority of through traffic to general area. C. Access road(s) labeled. D. Plans for improvement and/or statement that existing roads will be maintained in the same or better condition. 2. Planned Access Roads--map or plat identifying all permanent and temporary access roads to be constructed or reconstructed, showing: A. Width. B. Maximum grades. C. Turnouts. D. Drainage design. E. Location and size of culverts and/or bridges, fence cuts and/or cattleguards, and type of surfacing material (if any). F. Major cuts and fills. G. Information indicating where existing facilities may be altered or modified. H. Any access roads crossing Federal or Indian lands needed to haul water for drilling. I. Methods for protecting permafrost from thawing (where appropriate). Rel. 3-79 BLM MANUAL 2/2/$4 Illustration 3, Page 3 H-3160-1 - TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS 3. Location of Existing Wells--a map or plat showing location of all wells within a 1-mile radius of proposed location: A. Water wells. B. Disposal wells. C. Drilling wells. D. Producing wells. F. Injection wells. 4. Location of Existing and/or Proposed Facilities, if Well is Productive: A. On Well Pad--map or plat showing location of production facilities and lines to be installed, if well is completed for production. B. Off Well Pad--map or plat showing existing•or new production facilities to be utilized and lines to be installed if well 'is completed for production. Include dimensions of facility layout, ~• if new construction. Note: Operator has option of submitting information under 4.A and B, after well is completed for production, by applying for approval of subse- quent operations. 5. Location and Type of Water Supply (by quarter-quarter section on map or plat, or written description): A. Source and transportation method for all water to be used in drilling, if source is on Federal or Indian land. B. Same as 5.A if water is from a Federal or Indian project. C. If water well is to be drilled on lease, so state. Note: Operator only needs to show location of source, if water is from other than Federal or Indian land. 6. Source of Construction Materials: A. Character and use of all mineral materials, if proposed source is owned by the Federal Government or by an Indian tribe or allottee. B. If materials are from other than Federal or Indian lands, so state. Rel. 3-79 BLM MANUAL 2/2/84 Illustration 3, Page 4 H-3160-1 - TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS 7. Methods for Handling Waste Disposal: A. Describe methods and locations of proposed safe containment and disposal of each type of waste material, including: (1) Cuttings. (2 ) Garbage . (3) Salts. r (4) Sewage. (5) Chemicals. B. Plans for eventual disposal of drilling fluids and any produced oil or water recovered during testing operations. 8. Ancillary Facilities--map or plat showing all proposed camps and airstrips as to their location, land area required, and construction methods and standards. (Approximate camp center and airstrip centerlines to be staked on the groumd.) 9. Well Site Layout--a plat (not less than 1" m 50') showing: A. Cross sections of proposed drill pad showing any cuts and fills and relation to topography. B. Proposed location of reserve and burn pits, living facilities, and soil material stockpiles. C. Rig orientation, parking areas, and turnaround areas. D. Statement as to whether reserve pit is to be lined or unlined. If lined, detail plans. BLM MANUAL ICI Rel. 3-79 2/2/84 r Illustration 3, Page 5 H-3160-1 - TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS 10. Plans for Restoration of Surface: A. Statement of surface reclamation program upon completion of opera- tions, including: (1) Configuration of reshaped topography, drainage system, surface manipulations. (2) Segregation of spoil piles. (3) Waste disposal. (4) Revegetation methods and soil treatments. (5) Other practices necessary to reclaim all disturbed areas, including access roads or portions of well pads no longer needed. (6) Estimated timetable for commencement and completion of reclama- tion operations dependent oa weather and other local uses. Rel. 3-79 BLM MANUAL 2/2/84 Identification Number UNITED STATES DEPARTMENT OF THE INTERIOR BUREAU OF LAND MANAGEMENT Originating Office Address RECORD OF (CATEGORICAL EXCLUSION) REVIEW FORMAT Project Identification Operator/project Name Project Type Project Location Date Proposal Submitted Field Inspections Date(s) Participants I have reviewed the proposal in accordance with the categorical exclusion review guidelines and criteria. Based on my analysis of the proposal's impacts, it is my opinion that none of the exclusion review criteria would be met. Dat e Analys t '~ I concur with the reviewer's opinion and determine that the proposal would not involve any significant effects. Therefore, the proposal is exempted from further NEPA documentation. Da t e BLM MANUAL Approving Official Rel. 3-79 2/2/84 r _; a a r CATEGORICAL EXCLUSION REVIEN INFORMATION SOURCES FORMAT Federal/State A enc Loca and ~_ Private Other orre- P one Corre- Previous Studies spondence Check Meeting spondence NEPA and Staff date date date) (date) ~ncumant an.,...*~ r......~., a~ w N 1 OD V r ~n Criteria 516 DM 2.3.A. I. Public Health and Safety. 2. Unique Characteristics. 3. Environmentally Controversial. 1. Uncertain and Unknown Risks. 5. Establishes Precedent. 6. Cumulatively Significant. 7. NaCional Register Historic Places. 8. Endangered/ Threatened Sppcie~ 9. Violate Federal. State. Loca l Tribal Law. C~ iii' ~~" ~' ~ '~ ,~ ~ ~, ~ ~~ wr ~ ~ ~~~ .~ ~~ rr, +~~ ~ ~, CJ • i Illustration 5, Page 1 (IIC) H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS RP 53: Blowout Prevention Equipment Systems Q i~~ ',J J ~- SECTION 2-C BLOWOUT PREVENTER STACK ARRANGEMENTS - SURFACE INSTALLATIONS CLASSIFICATION OF BLOWOUT PREVENTERS 2.C.1 API classification of typical arrangements for blowout preventer equipment is based on working pressure ratings. Stack arrangements -shown in Figs. 2.C.1 to 2.C.10 should prove adequate, in normal environments, for API Classes 2M, 3M, 5M, lOM, and 15M. Arrangements other than those illustrated may be equally adequate in meeting well requirements and promoting safety and efficiency. STACK COMPONENT CODES 2.C.2 The recommended component codes- for designation of blowout preventer stack arrangements are as follows: A =annular type blowout preventer. G =rotating head. ' R =single ram type preventer with one set of rams, either blank or for pipe, as operator prefers. Rd= double ram type preventer with two sets of rams, positioned in accordance with operator's choice. Rt = triple ram type preventer with three sets of rams, positioned in accordance with operator's choice. S =drilling spool with side outlet connec- tions for choke and kill lines. M = 1000 psi rated working pressure. Components are listed reading upward from the uppermost piece of permanent wellhead equip- ment, or from bottom of the preventer stack. A blowout preventer stack may be fully identified by a very simple designation, such as: 5M - 13-5/8 - SRRA This preventer stack would be rated 5000 psi working pressure, would have a throughbore of 13- 5/8 inches, and would be arranged as in Fig. 2.C.5. RAM LOCKS 2.C.3 Ram type preventers should be equipped with extension hand wheels or hydraulic locks. SPARE PARTS 2.C.4 The following recommended minimum blowout preventer spare parts approved for the service intended should be available at each rig: a. a complete set of drill pipe rams and ram rubbers for each size of drill pipe being used, b. a complete set of bonnet or door seals for each size and type of ram preventer. being used, c. plastic packing for blowout preventer secon- dary seals, and d. ring gaskets to fit flange connections. PARTS STORAGE 2.C.5 When storing blowout preventer metal parts and related equipment, they should be coated with a protective coating to prevent rust. Storage of elastomer parts is covered in Par. 7.A.13. DRILLING SPOOLS 2.C.6 While choke and kill lines may be connected to side outlets of the blowout preventers, many operators prefer that these lines be con- nected to a drilling spool installed below at least one preventer capable of closing on pipe. Utiliza- tion of the blowout preventer side outlets reduces the number of stack connections by eliminating the drilling spool and shortens the overall preventer stack height. The reasons for using a drilling spool are to localize possible erosion in the less expensive spool and to allow additional space between rams to facilitate stripping operations. 2.C.7 Drilling spools for blowout preventer stacks should meet the following minimum specifications: a. Have side outlets no smaller than 2" nominal diameter and be flanged, studded, or clamped for API Class 2M, 3M, and 5M. API Class lOM and 15M installations should have a minimum of two side outlets, one 3" and one 2" nominal diameter. b. Have a vertical bore diameter at least equal to the maximum bore of the uppermost casinghead as specified in Table 6.1 ofAPl Spec 6A: Specification for Wellhead Equipment.* c. Have a working pressure rating equal to the rated working pressure of the attached blowout preventer and the upper portion of the casinghead (or tubing head). 2.G.8 For drilling operations, wellhead outlets should not be employed for choke or kill lines. Such outlets may be employed for :tuxiliary or back-up connections to be used only if a failure of the primary control system is experienced. "A~ailablc from American Petroleum Irstitut«+, }'raluetion Ue~:artnumt. G11 North Ervay, tiuitc li~Ml, U;iiL•s "CX i ~_'1~1 Rel. ~3-79 BLM MANUAL 2j2/84 . ~, Illustration 5, Page 2 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS r i r 1 i r F lG. l.C.'L AKKAN(;t•:M[•:NT tiKR 1louble Kam Type Presenters. Kil, Opliunal. r r ~; ~ \Itl{.\~~.I• \II:.\'i' ~I{ ~ :\Itl~:\\(~I•:\It•.~'I' It~it 't'1'I'1('.V, 13t.OWUI.!'1' !'I~h:~'h:N'1'h;it ~Ittt::\\(:t;iVll?N'1'ti hOIZLM 12:\'I'h;U WnHKIN(: 1't{h:~;+t'1(t•; ~1•;f2\'ll'1~: - til'Kf~:~('!? INti'I':~I.L,1'1'IOti BLM MANUAL Rel. 3-79 2/2/84 FIG. 'L.C.1 AKKA\CM:Mi:N"1' ~A • Illustration 5, Page 3 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS I: IG. 'L.C.:i :1812:\~(:F:~1 F:V'I' til{f{A 1•'IG. °.('.(i I)uuhl~• It:un'I'~•ix• I'rt•~rnt~•t•~. R,{• llptiuttal. .11{R:\\1:1:111•:\'1' K~I2:\ TYI'I(':~I, k3LOWOt~'I' ('ItF•:VH:ti'1'1?R ,~ftK~\NGH:ME•:V'I'ti l~'OIt ;~i11 :~\i) .~M lt:~~I'I•:1) ~L'OItKIN(; 1'IZI?~~l'itl? ti!•:IZVI<'1?- BLM MANUAL Rel. 3-79 2/2/84 Illustration 5, Page 4 • H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS \oaular prr~.•nh•r..\. :.nd rnl~al~n~ Ip•ad. 1.. ~:ui 6v ul a luw ~•r prr,.u rr rUin¢ '1'YI'[CAI. I~LOVVOU'C I'Ft1:V1~.N'I'h;lt Atth:ANGh:Mh:N'1'ti h'OEZ 1l)M ANI) 1:iM 1VOKKING I'Itl?tiSl?IZh. tiF.IZVI('h:- ti[1R h':~('h: I Nti'1'~~ LLA'l'ION $LM MANUAL Rel. 3-79 2/2/84 FIG. °_.('.4 Double Ram "Type l're\•enh•r., 1{il, Uptiunal. H' 1(:. '~.('. i \1(I(:\\(:F:\I F:\'I' RtiRR:\' Iknlblc Ram "Type I'r~•\•i•nt~•r~ RBI, Optional. N'IC. '_'.('.K :11(1(:1\(.i;~Ib:\'I' ~1(Itl(:1' I~~nlhle llam "fypc 1'reventor+, Ril, Optinnat. • Illustration S, Page 5 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS FIG. '_'.C.10 ARE;ANGEYIH:N'1' NHA' 1)uuble 1{am 't'ype Preventers. Rd, Optional. :\nnulur Pr~•ri•nlrr.:\. tun bo u(u lua~,•r prr..u n• rnlinl;. '1'1'1'1(':11. ('O11i'I.I:'1'lOti C1LO~1'UU"1' PI~E:~'H:~'I'I~:It :11ZIZ:~\G1::111~:1"I' 1~OIt :311.:111'1. 11);1'1, :~\I) 1:11 It:1"t'I?I) 11'OIZtilti(: 1'1t1•;ti~l~Itl~: ~I:KVI(;1? - ~L~K[~A('r: IN~'1'ALLA'1'IUN Rel. 3-79 BLM MANUAL 2/2/84 • Illustration 5, Page 6 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS ('H()tih: 61ANIH()I.l)S - SUKNAC'P; IN5'1'AI.LA'1'1()INti 1't' H 1'Otih: a.A.l It the hydrostatic head of the drilling fluid i. insuf•licient to runtrol subsurfae't pressure, furm:rtion fluid. will Ilow into the well. '1'0 m:cintain well control, hack pressure is applied by routing the returns through adjustable chokes until the well flow condition is corrected. The chokes are connected to the blowout preventer stack through an arrangement of valves; fittings, and lines which provide alternative flow routes or permit the flow to he halted entirely. This equip- ment assemblage is designated the "choke manifold". DESIGN CON5IDEHATIONS 3.A.L Choke manifold design should consider such factors as anticipated formation and surface pressures, method of well control to be employed, surrounding environment, corrosivity, volume, toxicity, and abrasiveness of fluids. INSTALLATION GUIDELINES 3.A.3 Recomrnended practices for planning :utd installation of choke manifolds for surface ,.installations include: , a. Manifold equipment subject to well and/or pump pressure (normally upstream of and in• cludinkf the chokes) should have a workinK pressure equal to the rated working pressure ofthe blowout preventers in use. This equipment should be tested when installed to pressures equal to the rated working pressure of the blowout preventer stack in use. b. Components should comply with applicable Al'I specifications to accommodate anticipated pressure, temperature, and corrosivity of the formation fluids and drilling fluids. c. For working pressures of 3M and above, flanged, welded, or clamped connections should be employed on components subjected to well pressure. d. The choke manifold should be placed in a readily accessible location, preferably outside of the rig substructure. e. The choke line (which connects the blowout preventer stack to the choke manifold) and lines downstream of the choke should: I) Be as straight as practicable; turns, if required, should be targeted. 2) lie firmly anchored to prevent excessive whip or vibration. 3) Have a bore of sufficient size to prevent excessive erosion or fluid friction: a) Minimwn recornrnended size for choke lints is .3-in. nominal diameter ('~•in. nominal dianu•ler is nrccptahlt Cur ('lass '~;til in- alallut.ionsl. b) Minimum reconunendec) sire t'ur vent lints downstrt:un of the c•hokts is '?-in. nominal diantcttr. c) Fur high volumes and air or gas drilling operations, -i-in. nominal diameter lints are recommended. f. Alternate flow and flare routes downstream of the choke line should be provided so that eroded, plugged, or malfunctioning parts can be isolated for repair without interrupting flow control. g. Consideration should be given to the low temperature properties of the materials used in installations to be exposed to unusually low temperatures. h. 1'he bleed line tthe vent line which by-passes the chokes) should be at least ec;ual in diameter to the choke line. Phis line allows circulation of the well with the preventers closed while maintaining a minimum of.back pressure. It also permits high volume bleedoff of well fluids to relieve casing pressure with the preventers closed. i. Although nut shown in the typical equipment illustrations, buffer tanks are sometimes installed downstream of the choke assemblies fur the purpose of manifolding the bleed lines together. When buffer tanks are employed, provision should be made to isolate a failure or malfunction without interrupting flow control. j. Pressure gauges suitable for drilling fluid service should be installed so that drill pipe and annulus pressures may bQ•dccurately monitored and readily observed at the station where well control operations are to be conducted. k. All choke manifold valves subject to erosion from well flow should befall-opening and designed to operate in high pressure gas and drilling fluid service. Double, full-opening valves between the blowout preventer stack and the choke line are recommended fur installations with rated working pressures of 3M and above. I. For installations with rated working pressures of 5M and above the following are recommended: I) One of the valves in Par. 3.A.3.k should bP remotely actuated. 2) Double valves should be installed im- mediately upstream of each choke. 3) At least one remotely operated choke should be installed. If prolonged use of this choke is anticipated, a second remotelyoperated choke should be used. BLM MANUAL Rel. 3-79 2/2/84 f 1 f f i G Y r r r r _. _ _ Illustration S, Page 7 H-3160-1 - 'TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS m. Spare parts for equipment subject to wear or damage should be readily available. A recommended inventory of choke manifold spare parts is included in Section 3-B. n. Testing, inspection, and general maintenance of choke manifold components should be performed on the same schedule as employed for the blowout preventer stack in use (refer to Par. 7A.7). o. All components of the choke manifold system should be protected from freezing by heating; draining, or filling with proper fluid. 8.A.4l~gs. 3A1 through 3.A.3 illustrate typical choke manifolds for various working pressure service. Refinements or modifications such as additional hydraulic valves and choke runs, wear nipples downstream of chokes, redun- dant pressure gauges, and/or manifolding of vent lines wiIl be dictated by the conditions anticipated for s particular well and the degree of protection desired. The guidelines discussed and illustrated represent typical industry practice. " Rel. 3-79 BLM MANUAL 22/84 Illustration 5, Page 8 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS ADJUSTABLE PIT ANO/OR MUp/~iA$ SEPARATOR -~ 2" NOh1NAL BLOWOUT PREVENTER ~ STACK OUTLET L ED UNE 1O PIT -• 3" 3" NOMINAL TIf1rYlIL ON 2M t" J"""t TO PIT ---+ AOJUSTA~t,E - " NOMINA FIB. 3.A.1 TYPICAL CHOKE MANIFOLD ASSEMBLY FOR 2M AND 3M RATED WORKING PRESSURE SERVICE - SURFACE INSTALLATION AOJU9TAR.E CHOKE a" BLOWOUT PREVENTER STACK OUTLET , -. 2~" --• To PIT NOM/MC 4" NOAgNAL TO PIT ANO/OR „~ 'M10/GAS SEPARATI P _,__~ 2" NOMINAL I~iK1TEU' OPERATED oR ADJIaneLE CHOKE h'It;. a.:1.'L 'I'1'I'It'A1.('t1Uhh: r1ANih't)1.1) 1tiHh:btK1.1' F't)K:;bl it:~'I'h:1) IVt>ttKt,lt; 1'RF.y~liltM: Sh:ItVit'h; - `+l'ItFAt'h; tN~t'i'ALLA'1'll)N Rel. 3-79 BLM MANUAL 2/2/84 Illustration S, Page 9 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS REMOTELY OPERATED CHOKE _~ TO MUO/GAS SEPARATOR ANO/OR PIT 2~~ NOMINAL 2~~ 2„ ^ AOJUSTABLE~- CH-OKE- ~~~I ~1 ~~I -~ ~ TO PIT 2" NOMINAL BLOWOUT PREVENTER CHOKE STACK OUTLET LINE SEQUENCE, 3~~ NOMINAL OPTIONAL ~TELY OPERATED VALVE BLEED LINE -. -4~~ NOMINAL 2~~ Z~~ TO MUO/GAS -• SEPARATOR AND/OR PIT 2~~ NOMINAL REMOTELY OPERATED CHOKE FIG.:3.A.3 TYPICAL CHOKE MANIE'OLU ASSEMI3LY FOK !OM ANU 1CiM RAPED WORKING PRESSURE SF.RVIC'E•; - SUKFACE IN- S'1'ALLATION PIT BLM MANUAL Rel. 3-79 2/2/84 Illustration S, Page 10 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS SECTION 4-A KILL LINES -SURFACE INSTALLATIONS PURPOSE 4.A.1 Kill lines are an integral part of the surface equipment required for drilling well control. The kill line system provides a means of pumping into the wellbore when the normal method of circulating down through the kelly or drill pipe cannot be employed. The kill line connects the drilling fluid pumps to a side outlet on the blowout preventer stack. The location of the kill line connection to the stack depends upon the particular configuration of preventers and spools employed; the connection should be below the ram type preventer most likely to be closed. Figs. 4.A.1 and 4.A.2 illustrate typical kill line installations for various working pressure service. 4.A.2 A "remote" kill line is commonly employed to permit use of an auxiliary high pressure pump if the rig pumps become inoperative or inaccessible. This line normally is tied into the kill line near the blowout preventer stack and extended to a site suitable.for location of a pump or pump truck. This site should be selected to afford maximum safety and accessibility. INSTALLATION GUIDELINES 4.A.3 The Same guidelines which govern the installation of choke manifolds apply to kill line installations. The more important recommen- dations include: a. All lines, valves, check valves, and flow fittings should have a working pressure rating and be tested following installation to pressures equal to or greater than the rated working pressure of the blowout preventer stack in use. BLM MANUAL b. Flanged, welded, or clamped connections should be employed for fittings or valves with rated working pressures of 3M or above. c. Components should be of sufficient diameter to permit reasonable pumping rates without excessive friction. The minimum recommended size,is 2•in. nominal diameter. d. Components which may be exposed to drilling fluids or formation fluids should comply with applicable API Specifications with particular consideration given to pressure, temperature, and corrosion resistance. e. Double full-opening valves between the stack outlet and the kill line are recommended for installations with rated working pressures of 3M or above. f. Periodic operation, inspection, testing, and maintenance should be performed on the same schedule as employed for the blowout preventer stack in use (refer to Par. 7.A.7). g. All components of the kill line system should be protected from freezing by heating, draining, or filling with proper fluid. h. Consideration should be given to the low temperature properties of the materials used in installations to be exposed to unusually low temperatures. 4.A.4 The kill line should not beused as afill-up line. Routine use of the kill line could result in erosion of the lines and valves, thus reducing their usefulness in an emergency. 1 ,i i i it ~" ~~ ~ Rel. 3-7~ 2/2/84 i ~I s ~ Illustration 5, Page 11 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS CHECK VALVE (OPTIONAL) OPTIONAL FOR 2M FROM DRILLING BLOWOUT PREVENTER FLUID PUMP -~ ~ STACK OUTLET 2~~ NOMINAL 2~~ NOMINAL THREADED CONNECTIONS OPTIONAL FOR 2M RATED WORKING PRESSURE SERVICE FIG. 4.A.1 TYYIGAI. KILI. LINE ASSEMBLY FUR •LM ANU :3M RA'I'ha WORKING I'RESSUIZF. SI:RVICI•: - Sl!KFACE: INS'fALLA'I'IUN CHECK VALVE (OPTIONAL) `L , rr FROM DRILLING _~ FLUID PUMP 2~~ NOMINAL 2~~ NOMINAL CHECK VALVE BLM MANUAL BLOWOUT PREVENTER STACK OUTLET 2~~ NOMINAL REMOTE KILL LINE REMOTE PUMP CONNECTION '1'1'I'll':\1. Kll.l. LI\1? :\ti~i•:~Iltl.l t'l)R :~J1, 111J1.:uui I:~JI 1{:\'1'I:l) \CORKI\(. 1'1{Matil'I{1•: `I;R\'il'1•: -- til'f{I•':\l h: 1\- Rel. 3-79 2/2/84 • Illustration 5, Page 12 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS SECTION 5-A - CLOSING UNITS -SURFACE INSTALLATIONS ACCUMULATOR REQUIREMENTS General 5.A.1 Accumulator bottles are containers which store hydraulic fluid under pressure for use in effecting blowout preventer closure. Thmugh use of compressed nitrogen gas, these containers store energy which can be used to effect rapid preventer closure. There are two types of ac- cumulator bottles in common usage, separator and float types. The separator type uses a flexible diaphragm to effect positive separation of the nitrogen gas from the hydraulic fluid. The float type utilizes a floating piston to effect separation of the nitrogen gas from the hydraulic fluid. Volumetric Capacity 5.A.2 As a minimum requirement, all blowout preventer closing units should be equipped with accumulator bottles with sufficient volumetric capacity to provide the usable fluid volume (with pumps inoperative) to close one pipe ram and the annular preventer in the stack plus the volume to open the hydraulic choke line valve. 5A.3 Usable fluid volume is defined as the volume of fluid recoverable from an accumulator between the accumulator operating pressure and 200 psi above the precharge pressure. The ac- cumulator operating pressure is the pressure to which accumulators are charged with hydraulic fluid. 5.A.4 The minimum recommended ac- cumulator volume (nitrogen plus fluid) will be determined by multiplying the accumulator size factor (refer to Table 5-A) times the calculated volume to close the annular preventer and one pipe ram plus the volume to open the hydraulic choke line valve. TABLE 5•A Accumulator Recommended Maximum Operating Precharge Precharge Pressure, 'Pressure, Pressure, psi psi psi 1500 750 800 '1000 1000 1100 3000 1000 1100 Notes: 'Based on minimum discharge pressure of 1200 psi. Response Time 5.A.5 The closing system should be capable of closing each ram preventer within 30 seconds. Closing time should not exceed 30 seconds for annular preventers smaller than 20 inches and 45 seconds for annular preventers 20 inches and larger. Operating Pressure and Precharge Re- quirements for Accumulators 5.A.6 No accumulator bottle should be operated at a pressure greater than its rated working pressure. 5.A.7 The Precharge pressure on each ac- cumulator bottle should be measured during the initial closing unit installation on each well and adjusted if necessary (refer to Par. 5.A.4). Only nitroien gas should be used for accumulator prechar~;e. The Precharge pressure should he checked freyuently during the drilling of the well. Requirements for Accumulator Valves. Fit• tinge, and Pressure Gauges S.A.f3 Multi-hc,ttle accumulator banks should Usable Fluid Accumulator Volume Size (fraction of Factor bottle size) 1/8* 8* 1/3 3 1/2 2 have valuing for bank isolation. An isolation valve should have a rated working pressure at least equivalent to the designed working pressure of the system to which it is attached and must be in the open position except when accumulators are isolated for servicing, testing, or transporting (refer to Fig. 5.A.1). Accumulator bottles may be installed in banks of approximately 160 gallons capacity if desired, but with a minimum of two banks. 5.A.9 The necessary valves and fittings should be provided on each accumulator bank to allow a pressure gauge to be readily attached without having to remove all accumulator banks from service. An accurate pressure gauge for measuring the accumulator Precharge pressure should be readily available for installation at any time. CLOSING UN[T PUMP REQiJIREMF,NTS Pump Capacity Requirements 3.A.lU F:ac:h dosini; unit should be equipped with sufficient number and sizes of pumps to sFitisfactorily perform the operation described in this par<c~;ruph. With the accumulator system 1 i i i i r Y Rel. 3-79 BLM MANUAL 2/2/$4 Illustration 5, Page 13 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS removed from service, the pumps should be capable of closing the annular preventer on the size drill pipe 'being used plus opening the hydraulically operated choke line valve and obtain a minimum of 200 psi pressure above accumulator precharge pressure on the closing unit manifold within two (2) minutes or less. Pump Pressure Rating Requirements 5.A.11 Each closing unit must be equipped with pumps that will provide a discharge pressure equivalent to the rated working pressure of the closing unit. Pump Power Requirements 5.A.12 Power for closing unit pumps must be available to the accumulator unit at all times, such that the pumps will automatically start when the closing unit manifold pressure has decreased to less than 90 percent of the accumulator operating pressure. 5.A.13 Two or three independent sources of power should be available on each closing unit. Each independent source should be capable of operating the pumps at a rate that will satisfy the requirement described in Par. 5.A.10. The dual source power system recommended is an air system plus an electrical system. Minimum recommendations for the dual air system and other acceptable but less preferred dual power source systems are as follows: a. A dual air/electrical system may consist of the rig air system (provided at least .one air compressor is driven independent of the rig compound) plus the rig generator (refer to Fig. 5.A.2). b. A dual air system may consist of the rig air system (provided at least one air compressor is driven independent of the rig compound) plus an air storage tank that is separated from both the rig air compressors and the rig air storage tank by check valves. The minimum acceptable re- quirements for the separate air storage tank are volume and pressure which will permit use of only the air tank to operate the pumps at a rate that will satisfy the operation described in the pump capacity requirements (refer to Par. 5.A.10). c. A dual electrical system may consist of the normal rig generating system and a separate generator (refer to Fig. 5.A.3). d. A dual air/nitrogen system may consist of the rig air system plus bottled nitrogen gas (refer to Fig. ;>.A.4). e. .^ dual electrical. nitrot,~en System may con- sist of the rig generating system and hottled nitrogen t;as (refer to Fit;.:>.~1.;ii. 5.A.14 On shallow wells where the e;~.int,* beinK drilled through is set at:500 feet ur less and wher(' surface pressures less than :~0O psi are BLM MANUAL expected, a backup source of power for the closing unit is not essential. REQUIREMENTS FOR CLOSING UNIT VALVES, FITTINGS, LINES, AND MANI- FOLD Required Pressure Rating 5.A.15 All valves, fittings, and lines between the closing unit and the blowout preventer stack should be of steel construction with a rated working pressure at least equal to the working pt~essure rating of the stack up to 5000 psi. Valves, Fittings, and Other Components Required 5.A.16 Each installation should be equipped with the following: a. Each closing unit manifold should be equipped with afull-opening valve into which a separate operating fluid pump can be easily connected (refer to Fig. 5.A.1). b. Each closing unit should be equipped with sufficient check valves or shut-off valves to separate both the closing unit pumps and the accumulators from the closing unit manifold and to isolate the annular preventer regulator from the • closing unit manifold. c. Each closing unit should be equipped with accurate pressure gauges to indicate the operating pressure of the closing unit manifold, both up- stream and downstream of the annular preventer pressure regulating valve. '~ d. Each closing unit should be equipped with a pressure regulating valve to permit manual control of the annular preventer operating pressure. e. F.ach closing unit equipped with a regulating valve to control the operating pressure on the ram type preventers should he equipped with a by-pass line and valve to allow full accumulator pressure to be placed on the closing unit manifold, if desired. f. Closing unit control valves must be clearly marked to indicate (1) which preventer or choke line valve each control valve operates, and (2) the position of the valves (i.e., open, closed, neutral). F.ach blowout preventer control valve should be turned to the open position (not the neutral position) during drilling operations. The choke line hydraulic valve should be turned to the closed position during normal operation. The control valve that operates the blind rams should be equitped with a cover over the manual handle to avoid unintentional operation. g. Each annular preventer may he equipped with afull-openin plug; valve on both the closing; and opening lines. 'These valves should he in- stalled immediately adjacent to the preventer and should he in the open position at all tunes except when testint; the uperatink line,. '['his will permit Rel. 3-79 2/2/84 I:.{ustcs~icn 5, Page 4 H-3150-1 - :'C:.liCAL `1iiD F.?\V'Il?.C~Ir',LtiTAL CC1SIDi;RA'1'ICNS testing of operating lines in e;:c~s ~ r±' ;~0;> psi without damage to the ann ui::r prover. i}>r i; desired by the user. REQUIREMENTS FOR. ~~ ir?SI~G UNIT FLUIDS AIVD CAPACI'T'Y 5.A.17 A suitable hydraulic fluid ihydraulic oil or fresh water containing s lubricant) should be used as the closing unit control operating fluid. Sufficient volume of glycol must be added to any closing unit fluid containing water is ambient temperatures below 32 F are anticipated. The use of diesel oil, kerosine, motor oil, chain oil, or any other similar fluid is not recommended due to the possibility of resilient seal damage. 5.A.18 Each closing unit should have a fluid reservoir with a capacity equal to at least t:vice the usable fluid capacity of the accumulator system. CLOSING UNIT LOCATION AND RE13iOTE CONTROL REQL'IREMENI'S 5.A.19 The main pump accumulator unit should be located in a safe place which is easily accessible to rig personnel in an emergency. It should also be located to prevent excessive drainage or flow back from the operating lines to the reservoir. Should the main pump accumulator be located a substantial distance below the preventer stack, additional accumulator volume should be added to compensate for Clow back in the closing lines. 5.A.20 Each installation should be equipped with a sufficient number of control panels such that the operation of each blowout preventer and control valve can be controlled from a position readily accessible to the driller and also from an accessible point at a safe distance from the rig floor. CLOSING UNIT,PUMP CAPABILITY'['EST 5.A.21 Prior to conducting any tests, the closing unit reservoir should he inspected to be sure it does not contain any drilling fluid, foreign fluid, rocks, or other debris. 'Che closing unit pump capability test should be conducted on each well before pressure testing the blowout preventer stack. This test can be conveniently scheduled either immediately before or after the accumulator closing time test. Test should be conducted according to the following procedure: a. Position a joint of drill pipe in the blowout preventer stack. h. Isulate the accumulators from the closing unit manifold b}> i•1„sing the requiredi valves. c. [f the accumulator pump. are puwF•rc•,i by ~u,-_ isolate the rig ~cir system fr,~m the pumps :~ separate closing unit air ~tura~;r [ar,k ur ~i hank ut nitrogen bottles ;huuld lu• u.c,i to pu~.ver th,• puutE;~ ~', during this test. 11'ii,•n n cloal pnwf•r ~ourcc ~~ st,_~n; is used. both p~~wcr ;upplic~ ~h~nild h.' h,~~t,•~i separately. i BLM MANUAL a. Sin~u!'.aneously turn the control valve for the annular preventer to the closing position and turn the contro~ valve for the hydraulically operated valve to t.l:a opening position. e. Record the time (in seconds) required for the closing unit dumps to close the annular preventer plus open the hydraulically operated valve and obtain '?00 psi above the precharge pressure on the closing unii manifold. It is recommended that the time required far the closing unit pumps to accomplish these operations not exceed two minutes. f. Clese the hydraulically operated valve and open the annular preventer. Open the accumulator system to the closing unit and charge the ac- cumulator system to its designed operating pressure using the pumps. ACC[,TMULATUR TESTS Accumulator precharge Pressure Test 5.A.22 This test should be conducted on each well prior to connecting the closing unit to the blowout preventer stack. Test should be conducted as follows: a. Open the bottom valve on each accumulator bottle and drain the hydraulic fluid into the closing unii fluid reservoir. b. Measure the nitrogen precharge pressure on each accumulator bottle using an accurate pressure gauge attached to the precharge measur- ing port and adjusted if necessary. Accumulator Closing Test 5.A.23 This test should be conducted on each well prior to pressure testing the blowout preventer stack. Test should be conducted as follows: a. Position a joint of drill pipe in the blowout preventer stack. b. Close off the power supply to the accumulator pumps. c. Kecord the initial accumulator pressure. This pressure should be the designed operating pressure of the accumulators. Adjust the regulator to provide 1 X00 psi operating pressure to the annular preventer. d. Simultaneously turn the control valves for the annular preventer and for one pipe ram (having the same size ram as the pipe used for testing) to the closing position and turn the control valve for the hydraulically operated valve to the opening position. e. Record the time required for the accumulators to close the p~-eventers and open the hydraulically operated valve. Record the final accumulator pressure closing unit pressure). This final pr,~ssure shc,uld be at least 300 psi above the pr,~charg,, pressure. f. :~ftcr the preventers have been upened, . a•rluu•ge the accumulator system to its designed ~~pecating pressure using the accumulator pumps. Rel. 3-79 2/2/84 r r a z C a r a -~ m x -1 ~ ~ w rn ~ p z ~ VALVES AND rr o "' ~ GAUGES ! c_ rn , ~ • z z , .~ ACCUMULATOR y rn ~ BANKS n ` FLUID RESERVOIR FULL-OPENING VALVES FULL-OPENING VALVE PRESSURE REGULATOR PUMP (1500-3000 PSI) CONNECTION FOR ANOTHER PUMP VALVE AND GAUGE PUMP CHECK OR GATE VALVE ~ PRESSURE REGULATOR ~ ~ VALVE (0-1500 PSI) ~ REGULATOR ~ 9Y-PASS LINE I z FOUR-WAY VALVES H (NOTE: SHOULO NOT CONTAIN VALVE AND GAUGE CHECK VALVE AND SHOULD ~ BE IN POWER ON POSITION) ~ ~ ~ ~ ~ ~ 0 z TO RAM TO CHOKE TO ANNULAR ~' r+ BLOWOUT LINE VALVE BLOWOUT d ~' PREVENTERS PREVENTER NOTE ~ • m PLUG VALVE IN CLOSING y n I A A L NE DJ CENT TO ANNULAR H 0 w ° PREVENTER TO FACILITATE z rt N. LOCKING CLOSING PRESSURE ~' ~ ON PREVENTER. ~ FIG. 5.A.1 ,.d N :~ TYPICAL BLOWOUT YREVF.NTER awo ~ N W CLOSING UNIT AI2RANGEM~NT ro 1 0o v r• u, ~ ~ M Illustration S, Page 16 H-3160-1 -TECHNICAL AND ENVIRONMENTAL CONSIDERATIONS SECTION 6-A AUXILIARY EQUIPMENT -SURFACE INSTALLATIONS 6.A.1 Kelly Cock. A kelly cock shall be installed between the swivel and the kelly. The kelly cock should have a rated working pressure at least equal to the rated working pressure of the blowout preventer stack. A device is available to operate the kelly cock hydraulically from the rig floor in two to four seconds. surface system too large to permit accurate measurement of a pit gain, such as circulating through the reserve pit, a flow rate sensor mounted in the flow line is recommended. 6.A.2 Lower Kelly Valve. A lower kelly valve should be used below the kelly. The lower kelly valve should have a working pressure rating at least equal to the rated working pressure of the blowout preventer stack. 6.A.3 Drill Pipe Safety Valve. A drill pipe safety valve should be available on the rig floor at all times. This valve or valves should be equipped to screw into any drill string member in use. The drill pipe safety valve should have a working pressure rating at least equal to the rated working pressure of the blowout preventer stack. 'The outside diameter of the drill pipe safety valve should be suitable for running into the hole. 6.A.4 Inside Blowout preventer. An inside blowout preventer, drill pipe float valve, or drop-in check valve should be available for use when stripping the drill string into or out of the hole. The valve, sub, or profile nipple should be equipped to screw into any drill string member in use. The inside blowout preventer, float valve, or drop-in check valve should have a working pressure rating at least equal to the rated working pressure of the blowout preventer stack. 6.A.6 Trip Tank. A trip tank with a capacity of 10 to 40 barrels and built so that 42 gallons equals at least an inch of depth is an accurate device for measuring the influx or efflux of fluid from the wellbore. 6.A.6 Pit Volume Measuring and Recor- ding Devices. Automatic pit volume measuring devices are available which transmit a pneumatic or electric signal from sensors on the drilling fluid pits to recorders and signaling devices on the rig floor. These are valuable in detecting fluid gain or loss when circulating. 6.A.7 Visual Pit Volume Measuring De- vice. Awood float attached to a counterweight above the rig floor by a small cable and rigged up to show pit volume on a board standing behind the counterweight is a useful sensing device when mounted on the drilling fluid pits or trip tank. 6.A.8 Flow Rate Sensor. A flow rate sensor mounted in the flow line is useful for early detection of formation fluid entering the wellbore or a loss of returns. When circulating through a 6.A.9 Automatic Drilling Fluid Weighing Devices. Automatic drilling fluid weighing devices are available and can improve the measurement of fluid density in the surface system. It is possible to incorporate an automatic drilling fluid weighing device with an automatic weight material mixing system to control drilling fluid density automatically. 6.A.10 Manual Drilling Fluid Weighing Devices.A drilling fluid balance designed to weigh a compressed sample of drilling fluid can be used to read the density of gas cut drilling fluid without the necessity of diluting, degassing, weighing, and calculating so-called true drilling fluid weight. 6.A.11 Mud/Gas Separator. A mud/gas separator may be mounted on or near the surface pit system for convenience in handling gas cut drilling fluid. Such a device is useful in separating gas from drilling fluid and venting the gas safely away from the rig. This permits slightly gas cut drilling fluid to be returned to the pit system thus avoiding an excessive waste of fluid. Volume of liquids and gas to be handled should be considered in the design of the mud/gas separator. 6.A.12 Degasser. A degasser may be used to remove entrained gas from the drilling fluid. Removal of the gas improves pump efficiency and permits more efficient control of the fluid density. Adequate fluid handling capacity is very impor- tant since the input volume may be several times as large as the amount of fluid handled by the rig drilling fluid pumps. 6.A.13 Well Control Station. Remote ad- justable chokes are available for use in choke manifold systems. These chokes improve well control operations by putting the choke control point at a convenient location where the choke operator can monitor and regulate drill pipe pressure, pump speed, and annulus pressure. 6.A.14 Ststnd Pipe Choke. An adjustable choke mounted on the rig stand pipe can be used to bleed pressure off the drill pipe under certain conditions, reduce the shock when breaking circulation in wells where loss of circulation is a problem, and bleed off pressure between blowout preventers during stripping operations. Refer to Fig. 10.A.1 for a typical stand pipe choke installa- tion. 'Available from American Petroleum Institute. Production Department. 211 Nnrth Ervay. Suite 1700. Dallas TX 75201. Rel. 3-79 BLM MANUAL 2/2/84 • ' Federal Onshore Oil and Gas _1 PART 3160 -ONSHORE OIL AND GAS OPERATIONS f _ --~ ,„ 1 1 f 1 .E~ 1 C~ 1 ~.' C_; 1 L' 1 C ~~ ~ ~ ~~ ~ ~ ~„ ~. ~ --~ ~~ ' . -- - ~~ /t ~ - ~ ~, ~-c ~~ ~~~c_ _ ~ - - - --~ ~ ~'~'"`~°=~ U.S. DEPARTMENT OF THE INTERIOR ~" BUREAU OF LAND MANAGEMENT ~~ RICT OFFICE ~ ,~~ ~~, _ ANCHORAGE DIST z ~ ~. I ~ . --. ~_ ~ n..,.«.a....1. iLty ~'F. ~ ./ _ 4 ;:tc+~ '~'w,~~..: ~ `~„ )c$ a~a ~ _ n- °+; r . r r r r f i L L i Part 3160 lease on a form approved by the Direc- tor, and way necessary stipulations. Lo the successful bidder. The successful bidder shall, not later thaw the 30th day after receipt of the lease. execute the lease. pay the balance of the bid and the first year's rental, and file a bond as required in Subpart 3104 of this title. Failure to comply avith this section shall result in resection of the lease. PART 3160-ONSiiORE Oil. AND GAS OPERA710N5 Noss 1: The information collection re- quirements contained in Part 3180 have been approved by the Office of Manage• meat and Budget under 44 17S.C. 3507 and assigned the foIIowing Clearance Numbers OPESU-'nw~ FoalMs Fenn tb. I Nrna eM +i'+w saw ~ W+e raw 9.730 YW/ d RaCOmW- 1070-0004 bon Ragan and loq--O~r 30 days +~- wall canP4- d 9-3xai3~- Ma+wy R.no~: d oo~raeon ,ono-aoo5 (and Camrareon--pun I torn dy a aaeditl nnra+ a~r~ ~. s~+ndry~noaw°R.o u I io~o-0ooz w.w-suewa,.ne roan dw 3o day. anar opar- ` anon aaegwwd, 9~3tC APPliudan rot Par~w b dal. tot0-0003 0«on4 ar PAq 9aac-0w 30 days pnar to Plamad acorn. 1 The above information is being collected for Federal and Indian lease management pur- poses. The information will be used to allow evaluation of the technical, safety, and envi- ronmental factors involved with drilling and producing oil wad gas on Federal and Indian oil and gas leases. The obligation to respond is mandatory only if the lessee elects to !vi- tiate drilUvg, completion, or subsequent 0o- ezationa on an oil and gas well. The Month- ly Report of Operations is mandatory after drilling has commenced. Other Rtportiny ReotiirernenLt The information collection requirements contained in ; 131823. 3162.3-1, 3182.3-2, 3182.3-3, 31823-4, 3182.4-1. 3182.4-2, 318^.5- 1, 31825-2, 3162.3-3. 3162.8, 31827-1, 3162.7-2, 3182.7-3, 3302.7-4, 3184.:,, 3185.1 and 3185.3 have been spyroved bq the Office of Management wad Budget under 44 Title 43-?ubiie Londs: Interior II.S.C. 3507 and assigned Clearance Number 1010-0001. The information may be collect- ed from some lessees to either provide data 50 that proposed operations may be ap- proved or to enable the monitoring of com- pliance with granted approval. The informa- tion wiII be used to grant approval to begin or alter operations or to allow operations to continue. The obligation to respond is re- quired to obtain the benefit under Lhe lease. Nora ~ There are many leases wad agree- ments currently in effect, and which will remain is effect, involving both Federal and Indian oil and gas leases which specifically refer to the IInited States Geological Survey, II3GS, Minerals Management Serv- ice, MMS, or Conservation Division. These leases and agreements also often specifically refer to various officers such as Supervisor. Conservation Manager, Deputy Conserva- tion i+danager, Minerals Manager and Deputy Minerals Manager. In addition. ma~py leases and agreements specifiplly refer to 30 CFR Part 221 or specific sections thereof, which now means 43 CFR Part 3160. Those references shall now be read in the context of Secretarial Order 3087 wad now mean either Lhe Bureau of Land Maa- agemeat or Minerals Management Service, as appropriate. Subpay- 3160-Omh«~ Oil and Gan ' • OpaaMans--~Ganard Sec. 3160.0-1 Purpose. 316o.aa Policy. 3180.0-3 Authority. 3180.0 Objectives 3180.0-5 Definitions. 3160.0-7 Cross references. Subpee1316i-Jwiadieiion and Rnpensibitity 3181.1 Jurisdiction. 3161.2 Responsibility of the authorced of- ficer. 3181.3 Inspections. SubpaA 3162-Raquirweanls ies t~assaas and Opanalen 31821 General requirements. 31822 Drilling and Droducing obligations. 31823 Conduct of operations 31823-1 Drilling applications and p11na 3182.3-2 Subsequent well operations. 31823-3 Other lease operations. 3182.3-4 Well abaadonmerrt. 3182.4 Records and reports. 31824-i Well records and reports. 31824-2 Samples. tests, wad surveys. 3162.4-3 Monthly report of operations (Form 9-329 Flbiic: Form 9-329A Indian). bs - ~ • • ~I ~~ fl i~ ~~ ICJ ~~ Chapfor 11-8uroau of Land ManagornorM Sec 3182.5 Eaviroament and safety. 3162.5-1 Environmental obligations. 3182.5-2 Contml of wells. 3182.5-3 Safety Drecautiona. 3182.8 Well identification. 3182.7 Meaautement, dfspoaition and pro- section of produMion. 3182.7-1 Disposition of Production. 3182.7-2 Measurement of oiL 3182.?-3 Measurement of gas. 3182.7-1 Site security oa Federal and Indian (except Osage) oil sad gas leases 3182.8 Confidentiality. SubpA 3183-~Naw-Cewpiianea am 3163.1 Remedies for acts of aoacompll• 3183.2 shutting down operations: lease cancellations. 3183.3 Assessment Sor noncompliance, 3163.4 Penalties 3163.4-1 Admfnisirative penalties 3163.4-2 Criminal penalties. 3163.5 Asaessmeats and administrative penalties. 3183.8 Iniunction and speCfflc performs sace. Subpwt 3164-sp«i.1 heviaians 3184.1 Onshore Oil sad Gas Orders 3164.2 NTL's and other implementing Pro- cedures 3184.3 Surface rights 3164.4 Damages on restricted Indiana lands Subp~r1316S-Ro(i~i, ConAkfs and Ap~k 3165.1 Relief from operating and produc- ing requirements. 3165.1-t Ballet from royalty and rental re- qulrements. 3165.2 Conflicts between regulations. 3165.3 TectuiiCal and procedural review. 3185.4 Appeals. Aazxoatrr. The Act of February 25, 1920 (30 U.S.C. 181, et seq.), as amended: the Act of May 21. 1930 (30 U.S.C. 301-306): the Mineral Leasing AcL for Acquired Lands (30 U.S.C. 351-359), as amended: the Act of Match 3, 1909 (25 Q.S.C. 398), as amended: the ACL of May 11, 1938 l25 7.S.C. 398a- 396q ). as amended: the .Act of February 28, 1891 (2S II.S.C. 394), as amended: the Act of MaY 29, 1924 (2S U.S.C. 398); the Act of March 3, 1927 (2S U.S.C. 398x-398e): the Act of June 30, 2919 (25 IIS.C. 399), as amend- ed: R.S. ¢441 (43 U.S.C. 1457), see also AG torney General's Opinion of April 2. 1341 c40 Op. Atty. Gen. 41): the Federal Property and Administrative Services ACL of 1949 (40 U.3.C. 471, et seq.), as amended: the Nation- al Environmental Policy Act of 1989 (42 § 3160.0-3 U.S.C. 4321, et sea.), as amended; the Act of December 12. 1980 (Pub. L 96-511, 94 Scat. 2984); and the Combined Hydrotarboa I.eas- iag AcL of 1981 (Pub. L 97-78, 95 Stat 1070; the Federal Oii and Gas Royalty Manago- meat Act of 1982 (30 U.3.C. 1701 Y. and the Indian Mineral Development Act of 1985 (2S U.S.C. 2102)). BoIIac:: !7 FR 47765, Oct. 27, 1982, unless otherwise noted. Kedesigaated st 48 FR 38583-36586, Aug. 12. 1983. Ebrrosret Noss is See Redesigastion Table No. 1 appearing is the Finding Aids section of this volume. EDrroa:er. Non 2: Nomwn_~~!s:*~ Changes Lo this part appear aL 48 FR 36584-38s88. Au& 12, 1983. Subpart 3160-Oeshon Oii and Gas Op~rofioes~-~G~n~rol ii 3160.0-1 Parpaae. The regulations in this part govern operations associated with the explo- ration. development sad produption of oil sad gas deposits from leases Issued or approved by the United States, re- stricted Indian Iand Ieases and those under the Jurisdiction of the Secretary of the interior by law or administra- tive arrangement, including the Na• tional Petroleum Reserve-Alaska [48 FR 36583, Aug, 12.1983] 9 3160.0-2 Poliky. The regulations fa this part are ad- ministered under the direction o! the Director of Lhe Bureau of Land Maa- agement: except that as to lands within naval petroleum reserves, that' shall be sdmltlister'ed under such ofS- cial ss the Secretary of Energy shall designate. [48 FR 38584, Aug. 12. 19831 9 3160.0-3 lluthorit~. The MInerai Leasin8 Act. as amend- ed and supplemented (30 U.S.C. 181 et seq.), the Act of May 21. 1930 <30 U.S.C. 301-306), the Mineral Leasing Act for Acquired Lands. as amended (30 U.S.C. 351-359), the Act of March 3, 1909, as amended <25 U.S.C. 396), she Act of May 11. 1938. as amended (Z5 U.S.C. 396ar398q), the Act of Feb- ruary 28, 1891, as amended (25 U.S.C. 397), the Act of May 29, 1924 l25 U.S.C. 398), the Act of March 3, 192? -66- t L L L L r . • 0 r D n 0 1 ~~ r r 7 i § 3160.U--4 (25 U.:..C. 398a-398e), the Act of June 30. 1919, as amended <2S U.S.C. 3'99), R.S. ~ 441 (43 U.S.C. 1457). Lhe Attor- ney General's Opinion of April 2 1941 (40 Op Atty. Gea. 41 ), Lhe Federal Property and Administrative Services Act of 1949, as amended (40 U.S.C. 471 et seq.). the National 13nvironmental Policy Act of 1969, as amended <42 II.S.C. 4321 et seq.). the Act of Decem- ber 12. 1980 (94 Stat. 2964). the Com- bined Hydrocarbon Leasing Act of 1981 (95 Stat. 1070), the Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1701). the Indian Min- eral Development Act of 1982 (25 II.S.C. 2102), and Order Number 308?, dated December 3. 1982 as amended on February 7, 1983 (48 FR 8983) under which the Secretary consolidat- ed and transferred the onshore miner- als management functions of the De- partment. except mineral revenue functions and the responsibility for leasing of restricted Indian lands. to the Bureau of Land Management. [d8 IAR 38583, Aug. 12, 1983] 3 316i.0~ ObJectives. The objective of these regulations is Lo promote the orderly and ~ efficient exploration. development and produc- tion of oil and gas. [48 F'ft 36583. AuQ. 11, 19831 9 3168.0-5 Defieitiom. Authorized Repsesentative Tiny entity or individual authorized by the Secretary to perform duties by Cooper- ative agreement, delegation. or coa- trac~t. Avoidably lost Avoidably lost pro- duction shall mean the venting or flar- ing of produced gas without the prior authorization, approval, ratification. or acceptance of the Supervisor and Lhe loss of produced oil or gas when the Supervisor determines that such loss occurred as a result of (1) negli- gence on the part of the lessee, or <2) the failure of the lessee to take all rea- sonable measures Lo prevent and/or control the loss, or (3) the failure of the lessee to comply fully with the ap- plicable lease terms and regulations, applicable orders and notices, or the written orders of the Supervisor, or (4) any combination of the foregoing. Title 43-Public Lands: Interior Director. The Director of the Bureau of Land Management. Federal Lands. All lands and inter• eats in lands owned by the United States which are subject to the miner- al leasing lava, including mineral re- sources or mineral estates reserved to the United States in the conveyance of a surface or nonmineral estate. Fresh mater. Water containing not more than 1,000 ppm of total dissolved solids, provided that such water does not contain objectionable levels of any constituent that is toxic to animal, plant, or aquatic life, unless otherwise specified in applicable notices or orders. Lease Any contract, profit-share ar- rangement, joint venture, or other agreement issued or approved by the United States under a mineral leasing law that authorizes exploration for. extraction of, or removal of oil or gas. Lease Site Any lands, including the surface of a severed mineral estate, on which exploration for, or extraction and removal of, oil or gas is authorized pursuant Lo a lease. Lessee. The party authorized by or through a lease or an approved assign- ment thereof. Lo explore for, develop and produce oil and gas on the lease site is accordance with the lease terms, regulations, and law. For con- venience of reference throughout this part, Lhe term lessee also refers to and includes the owners of approved oper- ating rights and designated operators. Lessor The party to a lease who holds legal or .beneficial title to the mineral estate in the leased lands. Maximum ultimate economic recov- ery. The recovery pf oll and gas from the leased lands which a prudent oper- ator could be expected to make from that field or reservoir given existing knowledge of reservoir and other per- tinent facts and utilizing common in- dustry practices far primary, second- ary, and tertiary recovery operations. Notice to lessees arcd operators (NTL). A written notice issued by the DMM. :ITC's implement the regula- tions in this part and operating orders, and serve as instructions on specific item(s) of importance within a Region or portion thereof. Ons/tone oil acid gas order. A formal numbered order issued by the Director - 'b7 - ~ ~ p~apfer II-Bureau of Land Management that implements the regulations in this Part- Operator. The party that has control or management of operations on the leased land or a portion thereof. The operator may be a lessee. holder of rights under an approved operating agreement, or designated operator. p¢yinp roell. A paying well is a well that is capable of producing oil or gas of sufficient value to exceed direct op- erating costs sad Lhe costa of lease rentals or minimum royalty. Person. Any individual, firm, corpo- ration. associatfon, Partnership, con- sortium or joint venture. Production in paying quantities Lease production of oil and/or gas of sufficient value to exceed direct oper- ation costs and the cost o~ lease rent- als or minimum royalty. Suptrintendertt The Superintendent of an Indian Agency. or other officer authorized to act is matters of record sad law with respect to oil and gas leases oa restricted Indian lands. Waste of oil or l7as. Any act or fail- ure to act by the lessee that is not sanctioned by the Supervisor as necea-• nary for proper development and pro- duction and which results in t 1) a re- duction in the quantity or quality of oil and gas ultimately producible from a reservoir under prudent and proper operations, or <2) avoidable surface loss of oil or gas. [4? FR 47785. Oct. 2?, 1982 Redesignated and amended at 48 FR 36583, 36584, Aug. 12. 1983: 49 FR 37383, Sept. 21, 1984] Erracrtva Da:'a Nora: At 49 FR 37363. Sept. 21. 1984, in # 3160.0-5, the deflnitiona of "Authorized Representative". "Federal Lands.. ..Lease Site". and '.Person'. were added: "Lease" and "Lessee" were revised, and "Leased lands, leasehoid^ was removed. ettective October 22 1984. For the convea- lence of the user, the susperseded text of the revised and removed detiaitiona are set forth below. 9 316QO~i Deiinition~ Lease. An agreement issued pursuant to Title 43 CFR ar Title 2S CPR, or other spe• cial Federal leasing authority, which. in consideration of covenants to be observed. Grants to a lessee the exclusive right and privilege of exploring for, developing, and aroducing oLL or gas depaaits owned by the § 3161.? lessor subject Lo the terms and conditions of the lease, regulations, and statutes. Leased lands. teoeeiiold Lands sad depoa• its made subject to as oil and gas lease. Lessee The party authorized by or Cltrough a lease or as approved assignment thereof, to explore tor, develoR and produce ofl or gas on the leased lands is ac- cordance wfth the lease terms, regulations. and lacer. $ 3160.0-7 Crass r~'erencea. 25 CFK Parts 221, 212, 213. sad 227 30 CF8 Group 200 40 CF'R Chapter V 43 CFR Parts 2. 4, and 1820 sad Groups 3000. 3100 and 3500 [48 Flt 38384. Aug. 12. 1983] Subpart 3151-JurisdirNon and teapensibiiifp 9 3161.1 JnrisdictioaL Subject to the supervisory authority of the Secretary and the Director, all operations conducted on or for the benefit of a Federal or Indian oil and gas Iease by. or on behalf of, the lessee are subject Lo the regulations is this part and are under the direction of the authorized officer having jurfsdiction of the leased lands. [47 FR 47785. Oct. 27, 1982. Fiedetigaated and aw..^~+~ at 48 Flt 38583, 3858!. Aug. 12.19831 3 31612 Responsibility of the authorized offteer. The authorized otIIcer is authorized and directed Lo approve unitization. communitization, gas storage sad other contractual agreements for Fed- eral Leads: to assess compensatory roy- city; Lo approve suspensions of oper- ations or production. or both; to issue NTL's: to approve and monitor other operator proposals for drilling. devel- opment or production of oil sad gas; to Perform technical and procedural re- views; to assess monetary penalties or liquidated damages; Lo provide techni- cal information and advice relative to oll and gas development and oper• scions on Federal and Indian lams; to enter into cooperative agreements with States. Federal agencies and -68- 1 Y r i r r r r r r r Y r r r • • i~ r r r i r l i § 3161.3 Indian tribes relative to oil and gas de- velopment and operatioa~ to approve, inspect and regulate the operations that are subject to the regulations in this Part: to require compliance with lease terms. with the regulations in this title and all other applicable regu- lations promulgated under the died laws: and to require that all operations be conducted in a manner which Dro- tects other natural resources and the environmental Quality, protects life and property and results in the ma~d- mum ultimate recovery of oII and gas with minimum waste and with mini- mum adverse effect on the ultimate recovery of other mineral resources. The authorized officer may Lgsue writ- ten or oral orders to govern spedfic lease operations. Any sash oral orders shall be confirmed is writing by the authorized officer within 10 working days from •Lgguaace thereof. Before ap- proving operations on leasehold. the authorized officer shall determine that the lease is in effect. that the op- erator is authorized to conduct such operations, ~ that acceptable bond cov- erage hag been provided .and that the proposed plan of operations is sound .both from a technical and environ mental standpoint. [48 FR 3858E. Aug. 12, 19831 ii 3161.3 In~ectioas. (a) The authorized officer shall es- tablish Procedures to ensure that each Federal and Indian lease site which is produdng or is expected to produce significant quantities of oft or gas in any year or which has a history of noncompliance with applicable provi- sions of law or regulations, lease terms. orders or directives shall be in- spected at least once annually. Simi- larly, each lease site on non-Federal or non-Indian lands subject to a formal agreement such as a unit or communi- tization agreement which has been ap- pmved by the Department of the Inte- rior sad is which the IInited States or the Indian lessors share in production shall be inspected annually whenever any of the foregoing criteria are appli- cable. (b) ]:n accomplishing the inspections, the authorized officer :nay utilize Bureau Personnel, map enter coopera- tive agreements with States of Indian Title 43-Pvblie Lands: Interior Tribes, may delegate the inspection authority tm any State, or may con- tract with non-Federal Governmental entities. Any cooperative agreement, delegation or contractual arrangement shall not be effective without concur- rence of the Secretary and shall in- clude applicable provisions of the Fed- eral Oil sad Gas Royalty Maaa,gement Act. [49 }?g 37363. Sept 21.1984] E~raarivs Dena Nora AL 49 FR 37363. Sept. 21. 1984.4 3161.3 wag added, effective October 22. 1984. Subpar! 3162-itequironaents for Lessees and Operators 9 31621 General requirements. (a) The lessee shall comply with ap- plicable laws and regulations; with the lease terms, Onshore Oil sad Gas Orders. NTL's: and with other orders sad instructions of the authorized of- ficer. These include, but are not limit- ed to. conducting all operations in a manner which ensures the proper han- dling. measurement, disposition. and site security of leasehold pmd~..ction: which Protects other natural resources and environmental quality. which pro- tects life and property; and which re- sults iII maximum ultimate economic recovery of oil and gas with minimum waste sad with minimum adverse effect on ultimate recovery of other mineral resources. tb) The lessee shall permit properiY identified authorized representatives to enter upon, travel across and in- spect lease sites and records normally 'sept on the lease pertinent thereto without advance notice. Inspections normally will be conducted during those hours when responsible persons are expected to be present ax the oper- ation being inspected. Such permission shall include access to secured facili- ties on such lease sites for the purpose of making any inspection or investiga- tion for determining whether there is compliance with the mineral leasing laws. the regulations in this part, and any applicable orders, notices or direc- tives. tc) For the purpose of making anY inspection or investigation, the Secre- tary or his authorized representative - 59 - Chapter II-Bureau of Land Management shall have the same right to eater upon or travel across nay lease site as the lessee or operator has acquired by purchase, condemnation or otherwise. (4T F'li 47765, Oct. 2T. 1982. Redesignated and amended at 48 FR 38583. 38584, Aug. 12. 1983; 49 FR 37364, Sept 21. 19841 EYrDCrtva Dana Nora At 49 1'R 37384. Sept. 21. 1984. in ¢ 3162.1 the existing tent waS designated as paragraph (a) and para• grap)u (b) and (c) were added, effective Oc- tober Z2. 1984. § 31622 Drilling and prodncing obliga- tions. (a) The lessee shall drill diligently and produce continuously fmm such wells as are necessary to protect the lessor from loss of royalty by reason of drainage. The authorized officer may assess compensatory royalty under which the lessee will pay a sum deter- mined as adequate to compensate the lessor for lessee's failure to drill and produce wells required to protect the lessor from loss through drainage by wells on adjacent lands. Any such as- sessment will be made after a review of available information relating to de- velopment of the leased loads. Such assessment is subject Lo termination or modification based upon the author- ized officer's continuing review of such information. (b) The lessee, at its election, may drill and produce other wells in con• fortuity with any system of well spac- ing ar production allotments affecting the field or area in which the leased lands are situated, and which is au- thorized and sanctioned by applicable law or by the authorized officer. (c) After notice in writing, the lessee shall promptly drill and produce such other wells as the authorized officer :nay reasonably require in order that the lease may be properly and timely developed and produced in accordance with good economic operating prac- tices. tl 3162.3 Conduet of operations (a) Leasehold operations shall be conducted by the lessee or its desig- nees. The lessee may authorize the actual conduct of operations in its behalf by designating another party as operator in a manner and form accept- able to the authorized officer. Accept- § 3162.3-1 once of an executed designation as au- thority for the designee to act for the lessee in matters relating to the con- duct of lease operations does not re- lieve the lessee from the ultimate re- sponsibility for compliance with appli- cable laws, regulations. lease terms. Onshore Oil and Gas Orders, IQTL's, and the orders and instructions of the authorized officer. Lessees shall notify the authorized officer in writing when a designation of operator has been canceled. A designated operator cannot designate a different party as Operator. <b) The contractor or other person in charge of or conducting operations on a leasehold will be considered the agent of the lessee for such operations with full responsibility for acting on behalf of the lessee insofar as comply- ing with applicable laws, regulations, the lease terms. N'I'L's, Onshore Oil and Gas Orders, and other orders and instructions of the authorized officer. The serving of orders, instructions, or notices on the contractor or other person in charge of conducting such operations on a leasehold, when deliv- ered personally or by ordinary mail. will be deemed to be service upon the lessee. When served in this manner, a copy will be mailed to the lessee and the designated operator at their ad- dress of record. 3 3162.3-i Dri113nS applications and plate. (a) Each well shall be drilled in con- formity with an acceptable well-spac- ing program at a surveyed well loca- tion approved or prescribed by the au- thorized officer after appropriate envi- ronmental and technical reviews (see § 31625-1 of this title). An acceptable well-spacing program may be either (1) one which conforms with a spacing order or field rule issued by a State Commission or Board and accepted by the authorized officer, or (2> one which is located on a tease committed to a commtlnitized or unitized tract at a location approved by the authorized officer, or (3> any other program es- tablished by Lhe authorized officer. (b) Any well drilled on restricted Indian land shall be subject to the lo- cation restrictions specified in the -70- r r r r r r r r r r i- i C § 31 ~~23-Z lease and/or Title 25 of the Cade of Federal Regulations. <c) The lessee shall submit to the au- thorized officer fOr approval an Appli- cation for Permit Lo Drill for each well. No drilling operations, nor sur- face disturbance Preliminary thereto, may be commenced prior to the au- thorized officer's approval Of the p (d~The Application for Permit to Drill process shall be Initiated at least 30 days before commencement of oper- ations is anticipated. Prior to approv- al. the application must be administra- tively and technically complete. A complete application consists of Form 9-331C and the foIIowiag attachment (1) A drilling plan. which may already be on file, containing information re- quired by paragraph <e) of this section and appropriate orders and notices, (2) evidence of bond coverage as required by Department of the Interior regale bons, (3) designation of operator. where necessar9. and (4) such other information as may be required by ap• placable orders and notices It the process is initiated less than 30 days prior to the desired date of oommence- ment of drilling operations. the proc- ess may not be completed by the de- sired date. (e) Each drilling plan shall contain the information specified in applicable notices or orders, including a descrip- tion of the drilling program. Lhe sur- face and projected completion zone lo• cation. Pertinent geologic data. expect- ed Problems and hazards and Proposed mitigation, road and drillpad location and construction. methods for contain- ment and disposal of waste material, plans for restoration of the surface. and other pertinent data as the au- thorized officer may require. A drilling plan may be submitted for a single well or for several Wells which are pro- posed to be drilled to the same zone within a field or area of geologic and environmental similarity. A drilling plan may be modified from time Lo time as circumstances may warrant, with the approval of the authorized officer. <i) IIPon initiation of the Applica- tion for Permit to Drill process, the authorized officer will consult with the appropriate Federal Surface Man- 1~J Titiw 43-puWie Landsa Inferioe ageatent Agency and With other ap- propriate Interested Parties and Will fate one of the following actions within 30 days: (1) Approve the appli- cation as submitted or with appropri_ ate modifications or stipulations; (2) retara the application and advise the applicant of the reasons for disapprov al: or (3) advise the applicant, either in writing or orally with subsequent writ- ten confirmation. of the reasons Why final action will be delayed along with the date such final action can be ex- pected. 9 3162.3-2 Subsegnmt wd! ope:atioas. <a) A plea proposing further well op- erations shall be submitted by the lessee on Form 9-331 for approval by the authorized officer prior to com- mencing operations to redrill, deepen, perform casing repairs, plug bact, alter casing. perform nonroutine frac- turing jobs. recomplete in a different interval, perlorm water shut-off con- version to in~iection. A subsequent report on these operations also will be filed on Form 9-331. The authorized Officer may prescribe that each play contain all or a portion of the infor- mation set forth in ¢ 3162.3-1 of this title. (b) IInless additional surface disturb- ance as involved and it the operations conform to the standard of prudent operating practice, prior approval is not required for routine fracturing or addizing jobs. or recompletian in the same Interval: however, a subsequent report on these operations must be filed an Form 9-331. (c) No prior approval or a subse- quent report is ; equated for well clean- out work. mutine Well maintenance, ur bottom hole pressure surveys. 9 3162.3-3 Other tease opaatlo~. Prior to commencing any operation on the leasehold Which will result in additional surface disturbance, other than those authorized under ¢ 3162.3- 1 or ¢ 3162.3-2 of this title, the lessee shall submit a proposed plan of oper- ~tions on Form 9-331 to the author- ized officer for approva~. - 71 - Chapter II-Bureau of Land ManagemetM ~ 3162.3-1 Weil abandonment (a)~ The lessee shall promptly plug and abandon, in accordance with a plan first approved in writing or pre- scribed by the authorized officer, each newly completed or recompieted well in which oil or gas is not encountered in paying quantities or which, after being completed as a producing well, is demonstrated to the satisfaction of the authorized officer Lo be no longer capable of producing oil or gas in paying quantities, unless the author- ized officer shall approve the use of the well as a service well for injection to recover additional oil or gas or for subsurface disposal of produced water. In the case of a newly drilled or re- completed well, the approval to aban- don may be written or oral with writ- ten confirmation. (b) Completion of a well as plugged and abandoned may also include con- ditioning the well as water supply source for lease operations or for use by the surface owner or appropriate Government Agency, when authorized by the authorized officer. All costs over and above the normal plugging and abandonment expense will be paid by the party accepting the crater welt (c) No well may be temporarily aban- doped for more Lhan 30 days without the prior approval of the authorized officer. The authorized officer may au- thorize a delay in the permanent abandonment of a well for a period of 12 months. When justified by the lessee, the authorized officer may au- thorize additional delays, no one of which may exceed as additional 12 months. IIpon +,he removal of drilling or producing equipment from the site of a well which is to be permanently abandoned, the surface of the lands disturbed in connection with the con- duct of operations shall be rehabilitat- ed or restored in accordance with a plan first approved or prescribed by the authorized oSicer. 9 3162.4 lieeords and reports. (48 FR 38583. Aug. 12. 19837 $ 31624-i Well records and reports. (a) The lessee shall keep accurate and complete records with respect to al! lease operations including, but not limited to, production facilities and § 31624-1 equipment, drilling, Producing. redrill- ing, deepening repairing, plugging back, and abandonment operations, and other matters pertaining Lo oper- ations. With respect to production fa- cilities and equipment, the record shall include schematic diagrams as re- quired by applicable orders and no- tices. <b) Standard forms for providing basic data are listed in NOrE 1 at the beginning of this title. As noted on Form 9-330, two copies of aII electric and other logs run on the well must be submitted to the authorized officer. IIDOn request, the lessee shall transmit to the authorized ofScer copies of such other rernrds maintained in com- pliance with paragraph (a) of this sec- tion. <c) Not later than the 5th business day after nay well begins production oa which royalty is due anywhere on a lease site or allocated Lo a lease site. or resumes production iII the case of a well which has been oft production for more than 90 days, the operator shall notify the authorized officer by letter or sundry notice, Form 3160-5, or orally to be followed by a letter or sundry notice, of the date on which such production has begun or re- sumed. (d) All records and reports required by this section shaII be maintained for 6 years from the date they were gener- ated. In addition. ii the Secretary, or his/her designee notifies the record- holder that the Department of the In- terior has initiated or is participating in as audit or investigation Involving such records, the records shall be maintained until the Secretary, or his/ her designee, releases Lhe resord- holder from the obligation to matntaia such records. t47 Fit 4776b, Od. 27. 1982 Redesignated cad amended at 48 FR 38583. 3858b. Aug. 12, 1983; 49 FR 37384, Sept. 21,1984] FYraClIV= Dsis No'rt At 49 PR 37384. Sept. 21. 1984, is ; 3182.4-1 pa.~ag:aph (a) was-amended by removing the phrase °dis- paeition of leasehold products" from the first sentence: revising paragraph (c) and sdding paragraph dd), effective 7cwber 22. 1984. For the convenience of the user. the superseded text of paragt-aph (c)'is set forth below: '2 - r r r r r r r r r l l r § 3162.42 0 316td-1 Wdl teeoed~ and ~eporfa <c) The lessee shall furnialti the Supervisor a ooDY of the daily drUling report, when re- quested. and a notice of Droduction start-uR $ 3162.4-2 Samples. teats. and snnera ta) During the drilling and comple- tion of a well. the lessee shall. when required by 'the authorized officer. conduct tests, run logs. and make other surveys reasonaialy necessary to determine the Presence. quantity. and quality of oil. gas. other t*++*+P~. l .Q or the presence or quality of water. to de- termine the amount and/or direction of deviation of any well from the verti- cial: and to determine the relevant characteristics of the oil and gas reser- voirs penetrated. <b) Auer the well has been complet- ed. the ie-saee shall conduct periodic well tests which will demonstrate the quantity and quality of oil and gas and water. The method and frequency of such well tests w[ll be specified to ap- ProPriate notices and ordeal. Whey needed. the lessee shall conduct a~ea- soaable salts which will demonstrate the mechanical integrity of the down- hole equipment. (c) Results of samples, tests, and sur- veys approved or prescribed under this section shall be provided to the au- thorized officer without cost to the lessor. 9 31624-3 Monthly repoR of operations (Form 929 1'ubii~ Form 9-329A Indiso)- A separate report of operations for each lease shall be made on Form 9- 329 for each calendar month, begin- ~g with the month in which drilling operations are initiated, and shall be filed in duplicate with the authorized officer oa or before the 10th day of the second .month following the pro- duction month, unless an extension of time for the filing of such report is granted by the authorized officer. The report on this form shall disclose accu- rately all operations conducted on each well during each month, the status of operations on the last day of the month, and a general summary of • Title 43-public Lands: Interior Lhe status of operations on the leased lands. and the report shall be submit- ted each month until the lease is ter- minated or until omLssion of the report is authorized by the authorized officer. It is particularly necessary that the report shall show for each calendar month: (a) The lease be identified by Insert- ing the same of the United States land office and the serial number, or is the case of Indian land, the lease number and lessor's name, in the space provided in the upper right corner. Cb) Each well be listed separately by number, its location be given by 40- acre subdivision (y. y. sec, or lot), sec- tion number, township, range, and me- ridian: (c) The number o! days each well produced. whether oil or gas, and the number of days each input well was in operation be stated; (d) The quantity of oil, gas and water produced. the total amount of gasoline, and other lease products re- covered, and other required informa- tion. When oil and gas, or oil. gas and gasoline, or other hydrocarbons are concurrently produced from the same lease, separate reports on this form should be submitted for oil and for 3as and gasoline. unless otherwise author- ized or directed by the authorized oui- cer. te> The depth of each active or sus- pended Weil, and the name, character, and depth of each formation drilled during the month, the date each such depth was reached, the date and reason for every shut-down, the names and depths of important formation changes and contents of formations, the amount and size of any casing run since last report, the dates and results of any tests such as production, water shut-off, or gasoline content, and any other noteworthy information on op- erations not specifically provided for ' in the form. (f) The footnote shall be completely filled out as required by the author- ized officer. If no runs or sales were made dying the calendar month, the report shall so state. - 73 - • Chopfer II-Sureou of Land Maeogement (4? FR 47765. Octi. 27. 1982. Redesignated and amended at 48 FR 36583. 36588, Aug. 12. 19837 3 3162.5 Environment and safety. [48 FFt 36583. Aug. I2, 1983] 9 3162.5-1 Emir~onmental oblisations. (a) The lessee shall conduct oper- ations in a manner which protects the mineral resources. other natural re- sources, and environmental quality. In that respect, the teases shall comply with the pertinent orders of Lhe au- thorized officer and other standards and procedures as set forth in the ap- plicable laws, regulations. lease Leans and conditions, and the approved drill- ing plan or subsequent operations plan. Before approving nay AppliCa- tioa for Permit to Drill submitted pur- suant to 4 3162.3-1 of this title or other plan requfring environmental review, the authorized officer shall prepare as environmental record of review or as environmental assess- ment. as appropriate. These environ- mental documents will be used in de- termining whether or not an environ- mental impact statement !s required and iII determining any appropriate terms and conditions of approval of the submitted plan. (b) The lessee shall exercise due care and diligence to assure that leasehold operations do not result in undue damage to surface or subsurface re- sources or surface improvements. All produced water must be disposed of by injection into the subsurface, by ap- proved pits, or by other methods which have been approved by Lhe au- thorized officer. IIpon the conclusion of operations, the lessee shall restore or rehabilitate the disturbed surface in a manner approved or reasonably pre- scribed by the authorized officer. (c) All spills or .leakages of oil, gas, produced water, toxic liquids. or waste materials, blowouts, fires, personal in- juries, and fataliti?s shaII be reported by the lessee in accordance with these regulations and as prescribed in appli- cable order or notices. The lessee shall exercise due diligence in taking neces- sary measures, subject to approval by the authorized officer, to control and remove pollutants and to extinguish fires. A lessee's compliance with the § 31623-2 requirements of the regulations in this part shall not relieve the lessee of the obligation to comply with other appli- cable laws and regulations. (d) When reasonably required by the. authorized officer, a contingency plan shall be submitted describing proce- dures to be implemented to protect life. property, and the environment. (e) The lessee's liability for damages to third Parties shall be governed by applicable law. 3 31625-2 Control of wdla. (a) Drilling wells. The lessee shall take all necessary Precautions to keep each well under control aL all times, and shall utilize and maintain materi- als and equipment necessary Lo insure the safety of operating conditions and procedures. (b) Vertical drilling. The Iessee shall conduct drilling operations is a manner so that the completed well does not deviate sigaificantiy from the vertical without the prior written ap- proval of the authorized officer. Sig- nificant deviation means a projected deviatiaa of the weII bore from the vertical of IO' or more. or a projected bottom hole location which could be Iesa than 200 feet from the spacing unit or lease boundary. Any weII which deviates more than 10' from the vertical or could result is a bottom hale location less than 200 feet from the spacing unit or lease boundary without prior written approval must be promptly reported to the author- ized ofllcer. In these cases. a direcLioa- al sur'~ey is required. (c) High pressurr or fora of circu:a,- tion. The lessee snail take immediate steps and utilize necessary resources to maintain or restore control of any well in which the pressure equilibrium has become unbalanced. (d) Protection of fresh mater and other minerals. The lessee shall isolate freshwater-bearing and other usable water containing 5,000 ppm or less of dissolved solids and other mineral- bearing formations and protect them from contamination. Tests and surveys of the effectiveness of such measures shall be conducted by the lessee using procedures and practices approved or prescribed by the authorized officer. -74- r . , r r r r r D J r~ l § 31625-3 0 31625.3 Safety precautions. The lessee shall perform operations and maintain equipment is a safe and workmanlike manner. The lessee shall take all precautions necessary to pro- vide adequate protection for the health and safety of life and the pro- tection of property. Compliance with health and safety requirements pre- scribed by the authorized officer shall not relieve the lessee of the responsi- bility for compliance with other perti- nent health and safety requirements under applicable laws ar regulations. 03162.6 Weil identifieaeioo. (a) I~es4ee shall properly identify is a conspicuous place each drilling. pro- ducin~ or abandoned well. with the name of the operator, the lease serial number, the well number, the sur- veyed description of the well (either footages ~or the quarter-quarter se~- tion. the section. township: and range). amd, when specaficaily request- ed by the authorized officer. the name of the Indian allotted lessor preceding the lease serial number. The lessee shaII maintain all well markings is a legible condition. (b) All abandoned • wells shall be marked with a permanent monument containing the information in <a). The well identification .requirement for as abandoned well may be waived in writ- ing by the authorized officer upon submission of a request by the surface owner or surface management agency. 0 31627 Neasnrement, disposition, and protection o[ prodnction. (48 F'fi 38583. Auq. 1Z, 1983] 0 31627-1 Dlspositioa of production. (a) The lessee shall put into market- able condition, it economically feasi- ble, all oil, other hydrocarbons. gas, and sulphur produced from the leased 32nd. (b) Where oil accumulates in a pit. such oil must either be <i) recirculated through the regular treating system gad returned to the stock tanks for safe, or (2) pumped into a stock tank without treatment and measured for sale in the same manner as from any sales tank in accordance with applica- ble orders and notices. In the absence of prior approval from the authorized • Tiff 43-Public Lands: Inferior officer, no oil should go to a pit except is an emergency. Each such occur. rence must be reported Lo the author- ized officer and the oil promptly re- covered in accordance with applicable orders and notices. (c)(1> Any person engaged in trans- porting by motor vehicle any oil from nay lease site. or allocated to any such lease site, shall carrry on his/her person, in his/her vehicle, or in his/ her immediate control, documentation showing at a minimum; the amount, origin, and intended first purchaser of the oiL (2) Any person engaged in transport- ing any oil or gas by pipeline from any lease site, or allocated to any lease site, shall maintain documentation showing. at a minimum, the amount, origin, and intended First purchaser of .such oil or gas. (3) On any lease site, any authorized representative who is properly identi- fied may atop and inspect any motor vehicle that he/she has probable cause Lo believe is carrying oil from any such lease site. or allocated to such lease site, to determfne whether the driven possesses proper documen- tation for the load of oiL (4) Any authorized representative who is properly identified and who is accompanied by an appropriate law enforcement officer, or as appropriate law enforcement officer alone, may stop and inspect any motor vehicle which is not on a lease site if he/she has probable cause to believe the vehi- cle is carrying oil from a lease site, or allocated to a lease site. to determine whether the driven possesses proper documentation !or the load of oil. (d) The lessee shall conduct oper- ations in such a manger as to prevent avoidable loss of oil and gas. A lessee shall be liable for royalty payments on oil or gas lost or wasted from a lease site, or allocated to a lease site, when such loss or waste is due to negligence on the part of the lessee of such lease, or due to the failure of the lessee to comply with any regulation, order or citation issued pursuant to this part. (e) When requested by the author- ized officer, the lessee shall furnish storage for royalty oil. on the lease- hold or at a mutually agreed upon de- Iivery point off the leased land with- - 75 - r_ ~ r Chapter II-$umau of Land Management out cost to the lessor, for 30 days foi- lowing the end of the calendar month in which the royalty accrued. (f) Any records generated under this section shall be maintained for 6 years from Lhe date they were generated or, it notified by the Secretary, or his des- ignee, that such records are involved in an audit or investigation. the records shall be maintained until the recordholder is released by the Secre- tary from the obiIgation to maintain them. [47 FR 47765, Oct. 27, 1982 Redesignated sad amended at 48 FR 38583, 38585, Aug. I2, 1983: 49 FR 37384, Sept. 21. 19847 ElraclTVS Dena Noxs AC 49 FR 37384, Sept. 21, 1984. in § 3162.7-1, paragraphs (c) sad (d) sere revised and paragraph (f) was added, effective October 22, 1984. For the rnnveaience of the user, the superseded text is set torch below. 4 31621-i Waposition of veoduetion. (c) A DsoPer run ticket must be Completed by the purchaser or transporter prior to Federal or Indian -oil being removed from the lease is axordance with applicable orders sad notices. .ldl The lessee shall conduct operations in such a manner as•to prevent avoidable loss of oil sad gas. 9 3162.7-2 Jieaaurement of oil. All all production shall be measured by tank gauging. positive displacement metertng system. or other methods ac- ceptable to the authorized officer, pur- suant Lo methods and Procedures pre- scribed i.1 applicable orders and no- tices. Where production cannot be measured due to spillage or leakage, the amount of production shall be de- termined in accordance with the meth- ods and procedures approved or pre- scribed by the authorized officer. [47 FR 47785, Oct. 27, 1982 Redesignated and amended at 48 FR 38583, 38583, Aug. l2, 1983; 49 FR 3?364, Sept. 21, 1984] Errzcrtvs Ders Noxz; AL 49 FR 37384. Sept. 21, 1984, !n ¢ 3182.7-2 the paragraph "ra)" designation was removed sad para- graph (b) wan removed in its entirety, effec• rive October 22, 1984. For the Convenience of the user, the superseded text is set !orth txiow. 9 3162;-2 Measurement of oiL § 31627-4 (b) Within 30 days after treating and measurement facilities are installed or modified on a lease, or when otherwise re- quested by the authorized officer, a sche- matic diagram will be submitted to the au- thorized officer clearly depicting the vessels, piping, and metering system involved with handling and disposal of oil, water, and gas. ~ 3162.7 Measurement of gas. All gas production shall be measured by orifice meters or other methods ac- ceptable to Lhe authorized officer on Lhe lease pursuant to methods and procedures prescribed in applicable orders and notices. The measurement of the volume of all gas produced shall be adjusted by computation . to the standard pressure and temperature of 14.73 psis and 60• F unless otherwise prescribed by the authorized officer, regardless of the pressure sad temper afore aL which the gas 1s actually measured. Gas lost without measure- ment by meter shall be estimated is axordance with methods prescribed in applicable orders and notices, C47 FR 47785, Oc't. 27, 1982 Redesignated sad amended aL 48 FR 36583. 38585.. Aug. 12, 1983: 49 FR 37384, Sept. 21, 1984] 7:brxrive Dera Nor= At 49 FR 37384, Sept. 21, 1984, is ¢ 31627-3, the Daragraph "(s)" designation was removed and Darn. graph (b) was removed is its entirety, etfeC- tive October 22, 1984. For the convenienx of the user, the superseded text is set forth below. i) 31627 Measnnmenc of gas. (b) Within 30 days after treating and measurement facilities sre installed or modified on. a lease or when otherwise re- quested by the authorized offices, a sche- matic diagram will be submitted Lo the au- thorized officer clearly depicting the vessels, wiping, sad metering system involved with handling sad disposal of ass sad L`quid hy- drocarbons. 9 3162.7 Site security on Federal sad Indian (acept Osage) oil and gay lessen. (a) Defaitio~ls- Appmpriate valves. Those valves in a particular piping system, i.e.. ;ill lines, - 70 - r r r r r r r ,r d ~- § 311527-4 equalizer lines, ssles lines. circulating lines, drain lines, or other lines. that muss be sealed daring a Given phase of operations. Closed system. A piping ansngement from one or more source points Lo one or more other points in a system which does not have means of access, Le.. flat plugs. bullplugs. blanking caps. open-ended valves, or combina- tions thereof. Effectively sealed The placement of a seal in such a manner that the posi- tion of the sealed fitting may not be altered or the fitting removed from the system without the seal being de- stroyed. Open system. A piping arrangement from one or more source points to one or more other points in a system which does have a mesas of access. Le.. flat plugs. bullplugs, blacking caps. open-ended valves, or combina- tions thereof. Production phase That period of time or mode of operation during which crude oil is delivered directly to or through production vessels to Lhe storage facilities. Sales phase That period of time or mode o1 operation during which crude oaf is removed from the storage facili- ties for sales. transportation or other purposes. Seat A device. uniquely numbered, which complete,Ly secures a fitting. (b) hfiaimurn standards Each opera- tor of a Federal or Indian (except Osage) lease shall comply with the foi- lowing minimum standards: (1) All appropriate valves on lines entering or leaving oil storage tanks sha11 be effectively sealed during the production phase sad during Lhe sales phase. ?'he piping and connections in a cloned system which are tamper proof or tamper resistant are essential- ly protected from unauthorized or un- documented entry, but the piping and connections in an open system shall be protected. For a minimum of 6 years the operator shall maintain a record of seal cumbers used and shall docu- ment on which valves or connections they were used as well as when they were installed sad removed. The site facility diagram(s)'shall show whic.'s valves will be sealed in which position during Loth the production and ;;ales Tifib 43--puWie Lands: IMerier phase and shall show whether the piping is an open or closed system. (2) Each Automatic Custody Trans- fer (ACT) system shall employ meters that have non-resettable totalizers. There shall be no by-pass piping around the ACT. Similarly. there shall be no by-pass piping around gas meters. Equipment which permits changing the orifice .piste without bleeding the pressure off the gas meter run is not considered a by-pass. (3) Where oil is sold via hand gauged volumes. the operator shall tniri..,;~p the time that oil is stored on leases to that time needed to accumulate as economic run. The operator may retain that oil needed fps use on the lease and to provide for delivery of royalty oiL l4) The operator will deal promptly with nay other accumulations of oil in pits or tanJrs in acCOl'dance with the provisions of ~ 3162.?-1 of this title sad applicable NTL's or .onshore orders. (5) The operator. with reasonable frequency. shall regularly inspect all leases. units, sad communitized areas to determine site security sad produc- tion volumes. The operator shall retain records of such inspections and measurements for 8 years. Such records and measurements shall be available to icy authorized officer or authorized representative upon re- quest. (6) All facilities at which oil is stored shall be clearly identified with a sign that contains the name of the opera- tor, the tease serial number <or com- munitization or unit agreement identi- fication), and, in public land States, the Quarter-quarter. section. township. and range. On Indian leases, the sign also shall iaciude the name of the ap- propriate Tribe and whether the lease is tribal or aIIotted. In addition, each storage tack shall be clearly identified by a unique number. The identifica- tion shall be maintained in legible con- dition and shall be clearly apparent to any person at or approaching *.he sales or transportation point. With regard to Lhe quarter-quarter designation and the unique Lank number, any such des- iRnacion established by state law or :ale will satisfy this requirement. Any facility identification which is ?~ exist- - 77 - • Chopte~ II-Bu-eou of Land Management ence on the effective date of this rule and which meets the basic information required herein will satisfy this para- graph until such sign is replaced. (?) Any person removing oil from a facility by motor vehicle shall possess the identification documentation re- quired by applicable NTL's or operat• ing orders while the oil is being re- moved and transported. t8) Theft or mishandling of oil from a Federal or Indian lease shall be re- ported to the authorized officer as soon as discovered but not later than the next business day. Said report shall include an estimate of the volume of oil involved. Operators also are expected to report such thefts promptly to local law enforcement agencies and internal company securi- ty. (9) Any operator may request the authorized officer to approve a vari- ance from anY of the minimum stand- ards prescribed by this section. The authorized officer shall approve a vari- ance if the proposed alternative meets or eaceeds the objective of the applica- ble standard. (c1 Site securiiy P1aas. (1) Site secu- rity plans, which include the opera= tor's plan for complying with the mini- mum standards enumerated in para- graph tb) of this section. shall be com- pleted and the existing facilities shall be in compliance with the plan on Sep- tember 9, 1983. For facilities construct- ed after September 9, 1983 conform- ance with existing plans shall be estab- lished or new pleas shall be completed no later than 30 days of completion of construction or first production. whichever ocxurs first, and on that date the facilities shall be in compli- ance with the plan. At the operator's option, a single plan may include all of the operator's leases, unit wad com- munitized areas. within a single BLM district, provided the plan clearly iden- tifies each lease. unit, or communi- tized area included within the scope of the plan and the extent to which the plan is applicable to each lease, unit. or communitized area so identified. t2) The operator shall retain the plan but shall notify the authorized officer of its completion and which leases, unit and communitized areas are involved. Such notification is due § 3]628 at the time the plan is completed as required by (c)(1) of this section. Such notification shall include the location and normal business hours of the otfice where the plan will be main- tained. (3) The plan shall include the fre- quency and method of the operator's inspection and production volume rec- ordation. The authorized officer may, upon examination. require adjustment of the method or frequency of inspec- tion. (d) Site facility diagrams. (1) Facili- ty diagrams shall be filed with the au- thorized officer no later than Septem- ber 9, 1983 for those facilities in exist- ence on that date. 'Thereafter, facility diagrams shall be filed within 30 days after new measurement facilities are installed or existing facilities are modi- fied. (2) No format is prescribed for facfli• ty diagrams. They should be prepared on 854" x 11" paper. if possible. and be legible and comprehensible to a person with ordinary woridng knowledge of oilfield operations and equipment. (3) A site facility diagram shall re- flect the actual conditions aL the site and shall clearly identify the vessels. piping (indicating whether piping is a closed or open system), and meterin8 system which apply to the handling and disposal of oil, gas. and water. The diagram must clearly identify the lease on which the facility is located and the site security plan to which it is subject along with the location of the plan. (4) Site facility diagrams submitted under this section will satisfy the re• quirement for facility diagrams sP- pesriag at any other section of this part. $ 3162.8 ConRdentialih. (a) Information obtained pursuant to this part and on file shall be open for public inspection wad copying during regular office hours upon a written request. pursuant to rules at 43 CF'Ft Part 2. except that: (1) IIpon request, information obtained from a lessee under this part that constitutes trade secrets and commercial or finan- cial information which is privileged or confidential or other information that - 78 - ~ ~ 0 r § 31628 may be withheld under the Fteedom of Information Act C5 II.S.C. 552tb)>. such as geologic and geophysical data and maps. shall not be available for public Inspection or made public or disclosed without the consent of the lessee for a period of 12 months: (2) upon expiration of the 12-month period, the lessee may request that the data be held confidential for an sddi- tionsl 12-month period; and (3) upon termination of a lease. whether by ex- piration of its terms or otherwise, such information shall be made available to the public. (b) Information requested to be kept confidmtial under this section shall be clearly identified by the lessee by marking each Page of documents sub- mitted with the wards "CONFIDEN- TIAL IIdF'ORMATION" at the top of Lhe Page. All Pages so marked shall be Physically separated from other por- tions of the submitted materials. All information not marked "CONFIDEN- TIAL IIdFORMATION" will be avail- able tar public inspection. (c) Confidential and privileged infor- mation obtained from a lessee under this Part on a restricted Indian lease shall be available only to the 'IYibe or allotted Indian lessor. their designated agent. or authorized II.S. Department of the Interior oificial.R Such informa- tion shall not be made available to any other party without the express au- thori~ation of the Tribe or alloted Indian lessor. (d) Any geological. geophysical. or fi- nancial information which is .either not required under the regulations in this part or covers lands not under Federal or Indian leases, but which the lessee submits to the authorized officer, shall be held confidential and shall not be released without the les- see's consent. (e> Trade secrets, proprietary and other confidential information ob- tained pursuant to this part shall be made available to States and Indian Tribes upon their request for the pur- pose of conducting an investigation if: (1) Such State or Indian Tribe con- sents in writing to restrict the dissemi- nation of the information to those who are directly involved in as investi- gation under a cooperative agreement True 43-Public Loads: Interior approved by the Secretary, and mho need to ]mow; l2) Such State or Indian Tribe ac- cepts liability for wrongful disclosure; (3) In the case of a State, such State demonstrates that such information is essential to the conduct of as investi- gation or to litigation; and (4) In the case of an Indian Tribe. such Tribe demonstrates that such in- formation is essential to the conduct of as investigation and waives sover- eign immunity by express consent for orrongitll disclosure by such Tribe. (i) The IInited States shall not be liable for the wrongful disclosure by nay individual, State. or Indian Tribe of any information provided to such indfvidual, State. Or Indian Tribe pur- suant to nay cooperative agreement or a delegation. <g) Whenever any individual. State or Indian Tribe has obtained posses- sion of information pursuant to a co- operative agreement or any individual or State has obtained posge.ffion of in- formation pursuant to a delegation of authority, the individual shall be sub- ject to the same provisions of ]aw with respect to the disclosure of such infor- mation as mould apply to an officer or employee of the IInited States or of nay Department or agency thereof and the State or Indian Tribe shall be subject to the same provisions of law with respect to the disclosure of such information as would apply to the IInited States or any Department or agency thereof. No State or State offi- cer or employee who receives trade se- crets, proprietary information or other confidential information under Title II of the Federal Oil and Gas Royalty Management Act may be required to disclose ssch information under State I.~w. (4T F'R 4?785. Oct. 27, 1982. Redesignated and amended at 48 F'R 36583. 36585. Aug. 12, 1983: 49 FR 37364. Sept. 21, 19841 ErloCtsvs Den Nays At 49 FR 37364. Sept. 21. 1984, paragraphs ce). (f), and (g) were added tog 3152.8, eflectlve October 22. 1984. - 79 - • i Chapter 11-$u~eau of Land Manageme+M Subpart 3163-Noncompliance and Assessments 9 3163.I Remedies for acts of noneomgii- ance. In the event of an act of noncompli- ance. the authorized officer is author- ized to shut down operations: to enter upon a lease and to perform, or have performed. at the sole risk and ex- pense of the lessee.. operations that the lessee fails to perform when di- rected in writing by the authorized of- ficer. to recommend cancellation of the lease and forfeiture under Lhe bond: and to assess penalties and/or liquidated damages in specific In- stances of noncompliance when the lessee fails to comply with applicable law, the regulations is this part or promulgated under the cited laws. the lease terms, the approved operating plan, or the written orders or instruc- tions issued by the authorized officer. 3 3163.2 3buttins down operations; lease cancellations. (a) When necessary for compliance, entry upon the lease to conduct oper- ations and recommendatians for lease' cancellation and for forfeiture under the surety bond will be taken only after the lessee is duly notified in writ- ing. The lessee will be provided a rea- sonable period of Lime to either take corrective action or Lo show why the lease should not be so entered or rec- ommended for cancel]ation and for- feiture declared under the surety bond. (b) Immediate shut-in action may be taken where operations are initiated and conducted without prior approval; or where continued operations could result in the loss oP revenge, or serious harm to life, property, or the environ- ment; or for repeated instances of noa- campliance. Shut-in actions in other situations may only be taken after due notice, in writing. has been given. 4 3163.3 Assessments for no~oseplianee. Certain instances of noncompliance result in loss or damage Lo the lessor, the amount of which is difficult or im- practicable to ascertain. Except where actual losses or damages can be ascer- tained in an amount larger than that § 3163.3 set forth below, the following amounts shall be deemed to cover loss or damage Lo the lessor from specific in- stances of noncompliance. (a) F'or failure to comply with a writ- ten order or instructions of the au- thorized officer. ;250 It compliance is not obtained within the time specified. (b) For failure to perform any oper- ation ordered is writing by the author- ized officer, if said operation is there- after performed by or through the au- thorized officer. the actual cost of per- formance and an additional 25 percent of such amount to compensate the IInited States for administrative costs. <c) For failure to obtain approval of an Application for Permit to Drfll prior to commencing operations or causing surface disturbance prelimi- nary thereto or for failure to obtain approval before initiating any major departure from a prevtousiy approved permit to drill, ;250. (d) For failure to obtain approval of a plan for subsequent well operations before commencing work on a well to redrill, deepen, convert to injection. using nay well for gag storage or water disposal, or any other operation re- quiring prior approval under g 3162.3- 2 of this title, ;250. (e) For failure to properly identify a well location or derrick, whether the well is drilling. producing, or aban- doned. or a production facility,;100. <f) For failure to install blowout pre- venters or other related drilling safety and control equipment as required by the approved drllling plan. ;250. (g) For failure to exercise due care and diligence in preventing undue damage to surface or subsurface re- sources or surface improvements as re- quired by the regulations in this part and the applicable lease terms, 5250. <h) For failure to maintain records and file required reports. records, sam- ples, or data as required by Lhe regula• bons in this part and by applicable orders and notices. 5100. (i) For failure to obtain approval of a plan !or well abandonment prior to commencement of such operations, ;250. (j) For fallure to maintain effective seals required by the regulations in this part and by applicable orders and notices, or for failure to maintain the -80- r ,r i~ r~ r r- § 3Tt53,4 integrity of any seal placed upon any property or equipment by the author- ;zed officer. 5250. Title 43--?ublie Lands: Interior ciusive unless an appeal is taken pur- suant to Part 4 of this title. (47 FS, 47765, Oct. 27, 1982 Redesgigaated and amended at 48 FR 38583, 36585, Aug, 12, 1983: 49 FR 37365. Sept. 21.19847 E~rncrtvs Dsia Nary At 49 FR 37365, Sept RL 1984. g 3183.4 was removed, effec- tive October 22, 1984. sentence of the introductory tezt and 3 3163.~f-1 Administrative penalties. adding the Phiaae °or a production facility" (a) MfRerQl ~~ to Datasraph ce). For the convenience of the n9 Act (I) When- user. the superseded teat of the introducto- ever a lessee fai]s to comply with say ry tezt Is set forth below, provisions of the lease the ti t47 FFL 47765, Oct. 27, 1985. Redesignated and amended at 48 FR 38583. 38585, Aug. 12,1983: 49 FR 37365, Sept. 21. 19841 F~-sa~vs Dsra Nars: At 49 FR 37385, Sept 21, 1984, effective October 22, 1984, 4 3183.3 was amended by removing the last 0 3163.3 MaeNmeata for aoaKmapBaaee. • • • Provided that as W paeagiaphs (a), (c), (t), lg), aad (j) of this section the speci- fied lass or damage shall be applicable Lo each succeaaive day of the noncompliance, 9 31624 Penalties. Whenever a lessee fails to comply nth any Provisions of the lease, of the regulations in this part. -of applicable orders or notices, or of say other ap- Droprlate orders of the authorized of- ficer. the authorized .officer shall give the lessee notice in writing to remedy aay defaults or violations. Failure by the lessee to perform or commence the necessary remedial action Pursuant to the notice may subject the lease to cancellation Proceedings pursuant Lo 43 i:F'Et Subpart 3108 for Federal leases or provisions of Title 2S G'FIi for Indian leases. or the lessee to a penalty of not more than x1,000 per day for each and every day the terms of the lease, the regulations, or such orders are violated; or to both such penalty and cancellation. Normally, a penalty would only be assessed far vio- lations involving serious threats to health, safety, property, or the envi- ronment. or for continuous disregard of orders. The lessee shaA be entitled to notice of noncompliance and a hear- ing within 30 days after such notice. with respect to the terms of the lease, regulations. or orders violated. The Penalty shall be assessed beginning with the date specified in the notice of noncompliance, subject to the out- come of the hearing, The hearing shall be held by the appropriate Stale Director whose findings shall be con- regula ons ~ ~s Part. applicable orders or no- tires, or any other appropriate orders of the authorized officer, the author- ized officer shall give the lessee notice in writing Lo remedy any defaults or violations. (2) 11 there is a failure to complete the necessary remedial action within the time and in the manner prescribed by the notice, the lessee shaII be liable for a penalty of not more thaw x500 per day for each day the violation coa- tinues beyond the date specified in the notice through the 20th day of such noncompliance. (3) A penalty shall be imposed under Paragraph (a) of this section for the failure to abate violations which are required to be corrected is less ibex ZO days from the date of the report or notice. (4) A notice of proposed Density shall be issued and served by Personal service by an authorized officer or by certified mail Service shall be deemed to occur when received or 5 days after the date it is mailed, whichever is ear- lier. Any person may designate a rep- resentative to receive any notice on their behalf. Any person authorized by the lessee to submit reports, no- tires, affidavits, records, or other in- formation required by regulations in this Part or who is authorized by the lessee to conduct or supervise oper- ations subject to regulations in this Hart may receive the notices. If no des- ignation pertaining to that lease has bees filed, the notice shall be served as previously described. A person charged with a violation and served with a notice of civil penalty under this paragraph may request a techni- cal and procedural review under § 3165.3 of this title within 10 working - 81 - ~ • i Y Chopter II-8urecu of land Management days of receipt of the notice. Such review shall be limited to the issues of whether a violation actually existed and, if so, whether the gravity at- tached to the violation was aPPmpri- ate. and whether a reasonable abate- ment period was Prescribed. Within 30 days of service of a notice of penalty. or within 15 days of receipt of the de- cision on the technical and procedural review, whichever is later, the person charged shall either file an appeal pursuant to part 4 of this title or pay the civil penalty. (b) Federal Oil and Gas lioyalty Afana9ement Act. (1) Whenever a lessee fails or refuses to comply with any applicable requirements of the Federal Oil and Gas Royalty Manage- ment Act, any mineral leasing law, any rule or regulation thereunder. or the terms of any lease or permit. Lgsued thereunder, the authorfzed officer shall notify the lessee is writing of the violation. unless the violation was dis- covered and reported to the author• ized officer by the liable person or the notice as previously issued under para- graph (a) of this section. L• the viola- tion is not corrected within 20 days of such. notice or report, or such longer time as the authorized officer may agree to in writing, the lessee shall be liable for a civil penalty of up to ;500 per violation for each day such viola- tion continues, dating imm the date of such notice or report. This notice shall be issued and served by personal serve ice by an authorized officer or by cer- titied mail. Service shall be deemed to occur when received or 5 days after the date it is mailed. whichever is ear- lier. (2) If the violation specified in para- graph (b)(1) of this section is not cor- rected within 40 days of such notice or report, or a longer period as the au- thorized officer may agree Lo in writ- ing, the lessee shall be liable for a civil Denalty of not more than 55.000 per violation for each day the violation continues, not to exceed a maximum of 60 days, dating from the date of such notice or report. r3) In the event Lhe authorized offi- cer agrees to an abatement period of more than 20 days, the date of notice shall be deemed to be 20 days prior to the end of such longer abatement § 3163.4-i period for the purpose of civil penalty calculation. (4) Whenever a transporter fails to pesmit inspection of proper documen- tation by nay authorized representa- tive, as provided in § 3162.?-1<c) of this title, the transporter shall be liable for a civil penalty of up to ;500 per day for the violation. not to exceed a maxi- mum of 20 days, dating from the date of notice of the failure to permit in- spection and ~ continuing until the proper documentation is Provided. (5) Any person who: <i) Fails or refuses to permit lawful entry or InspeCLlon authorized by § 3162.1Cb) of this title; or (ii) Knowingly or willfully fails to notify the authorized officer by letter or Sundry Notice, Form 3160-5, or orally to be followed by a letter or Sundry Notice. not later than the 5th business day after any well begins pro• duction on which royalty is due. or re• sumes production in the cage of a well which has bees off of production for more than 90 days. from a well located on a lease site, or allocated to a lease site, of the date oa which such pmduc• Lion began or resumed: shall be liable for a civil penalty of up to ;10,000 per violation for each day such violation continues, not to exceed a maximum of 20 days. <6) Any person who: <i) Knowingly Or wfllful)yy Prepares. maintains or submits false. inaccurate or misleading reports. notices, affida- vits. records. data or other written in- formation required by Lhis part; ar (ii) Knowingly or willfully takes or removes, transports, uses or diverts any ail or gas from say Federal of Indian lease site without having valid legal authority to do so; or (tii) Purchases, accepts. sells, trans- ports or conveys to another any oil or gas knowing or having reason to know that such oil or gas was stolen or un- lawfully removed or diverted from a Federal of Indian lease site; shall be liable fora Mvil penalty of up to 325.000 per violation for each day such isolation continues, not to exceed a maximum of 20 days. (7)<i) Notice of violation Imposed by the authorized officer under this sec- tion shall be by personal service or by certified mail. Any person may desig- -82- fl 1 i r `, r' r r r. § 3163.4-i Hate a representative to receive any notice mi their behalf. Any person vrho is authorized by the lessee to submit reports, notices, affidavits. records data or other information required by this part or who is authorized by the lessee to conduct or supervise oper- ations subject to regulations in this part may receive the notices. l'S no des- ignation has been filed, the notice shaII be served as Previously described. (ii) A person charged with a viola- tion and served with a notice of doll penalty may request a technical and procedural review under 4 3165.3 of this title within 10 working days of re- ceipt of the notice. Such review shall be limited to the issues of whether a violation actually existed and. ii so, whether the Brevity attached to the violation was appropriate. and wheth- er areasonable abatement period was prescribed. Within 30 days of service of a notice of penalty. or within 15 days a~f receipt of the decision on the technical and procedural review, whichever is later, the person charged shall either request a hearin6 'on the record or pay the civil penalty. A re- quest for a hearing shall be filed within the time allowed in the office of the State Director having jurisdic- tion of the lands covered by the lease. No doll Penalty shall be assessed under this section until the person charged with the violation has been given the opportunity for a hearing on the record under Part 4 of this title. t8) On a case-by-case basis, the Sec- retary may compromise or reduce dull penalties under paragraph (b) of this section. In compromisfng or redudng the amount of a doll penalty under paragraph (b) of this section. the Sec- retary shall state on the record the reasons for his/her determinations. (9) Any person who has requested a hearing in accordance with paragraph (b)(7) of this section and who is ag- grieved by a final order of the Secre- tary under this section may seek review of such order in the IInited States District Court for the judicial district in which the alleged- violation occurred. Review by the district court shall be on the administrative record only and not de nova. Such an action shell be barred unless filed within 90 days after the Secretary's final order. Title 43-I'ubiic Lands: Interior (10) Civil penalties provided by this section shall be supplemental to, and not in derogation of. any other penat- ties or assessments for noncompliance in any other provision of law. (il) 11 the violation continues beyond the 80-day maximum specified in paragraph (bX2) of this section or beyond the 20-day maximum spedfic-~i in paragraphs (b><5) and (b)(6) of this section. lease cancellation proceedings shall be initiated under either Title 43 or Title 25 of the Cade of Federal Reg ulations. (12) If the violation continues beyond the 20-day maximum spedfied in paragraph (b)(4) of this section, the District Manager shall revoke the traasporter's authority co remove crude oil or other liquid hydrocarbons from any Federal or Indian lease under the authority of that District Manager or to remove any crude oil or liquid hydrocacbons allocated to such lease site. This revocation of the trans- porter's authority shall continue until compliance is achieved and the related penalty paid (c> If any Person fails to pay a,TS as• sessment of ~a doll penalty under para- graph (b) of this section after the order making the assessment has become a final order, and Ii such person does not file a petition for yudi- da1 review in accordance with this subpart, or, after a court in an action brought under this subpart has en- tered afinal judgment fa favor of the Secretary. the court shaII have juris- diction to award the :amount assessed plus interest from Lhe date of the ex- piration of the 90-day period provided by paragraph (b)(9) of this section. Judgment by the court shall include an order to pay. (d) The common drilling, producifon and abandonment related vioisti~ns are categorized into 3 noncompliance ranges. The category for any violation is the gravity level to be used for that violation. Based on individual dreum- stances and with the appropriate docu- mentation, the gravity of a violation may be upgraded or downgraded by 1 level. The Director shall establish a detailed list of potential violations. The violations shall be either: (i) A minor violation which does not affect the safety of the arorkplace, nor -83- l :7 Chapter II-$ureou of Loud Management does it degrade the environment or affect the amount of royalty income: or i2) A moderate violation. which if iett uncorrected. may eventually affect the safety of the workplace, de- grade the environment and/or affect royalty income: or (3) A maior violation which has the immediate potential to affect the safety of the workplace, degrade the environment and/or affect the royalty income. (e) Determination of Penalty Amount for paragraphs (a) and (b) of this section are as follows: (ll The amount of the administra- tive penalty proposed shall be based upon the formula set forth in this sub- section. The formula is based on 2 cri- teria: i.e., the gravity of the violation: and the lessee's or Lransporter's histo- ry of previous violations: (2) The appropriate number of pen- alty points shall be assigned to each criterion using the appropriate tables as denoted and the 2 numbers shall then be totaled, and the point atxumu- lation converted into a dollaz per day amount by using Penalty Conversion Table A, B, C or D, as appropriate, and the amounts added. it necessary. (3) Table I-Gravity of the Viola- tion: CIni6~an I Pa"'m' i °°'"' I M~1gf no4a0f4.~ .._.~ ~ 11 MaaMlita NW~ilafli.~._.._....-_-..__._.-.._~_..I It Mypt _....._ T7 (4) Table II-Lessee's or Transport- er's History of Past Violations: Mnor vidtliatq _.._...._._.. Nurnbrx'A ~ .. __ Moar~N wielnns ...-.._.. rNmbarx2~......_.._........... Mbd~'-altUOnS._`._.._... Nunbvx5~.._._.__._.._.._. Taub-lrounosa dor.n to iM n~rat wnoN nurovl (mtamutn at 29!• History of previous violations stand- ards. History is based on the number of violations issued in a preceding 36- month period beginning February 1, 1983. The history of previous viola- tions may account for a maximum of 29 penalty points. The penalty points shall be calculated on an lessee-by- lessee and lease-by-lease basis and, in § 3163.4-1 the case of transporters, on a trans- porter-by-transporter basis within the Jurisdictional area of each Bureau of Land Management District Office. (5) Penalty Conversion Table-A (Lessees): (i) The following penalty conversion Cables are for violations not corrected within the time allowed in paragraph (a) of this section, or by the 20th day under paragraph (b)(i) of this section. or by the 40th day under paragraph (b)(2) of this section or such other time period as the authorized officer may specify and shall be used to con- vert the accumulation of penalty points from Tables I and II above to the appropriate dollar per day pro- posed penalty. PENALTY CONVFIASION TABLE-A Mat eometae ! ror uo to i 4o d.rs. i Mot earrsettA ~'~ ! M 40 °°nes ~ o« c.r I ~ i e.rs- i ~ ~ ' t ~« ~ i ro- <0.__._..._...._....~ .._______._ ! 75 ! 750 .,_.-_.r...__.__.._._ .......-...__.__» 79 ~ 790 42...__»____.._..__.. _..__._.._.._.; a2 ~ ego 43..__......__......_.._ 44_..._.~...._..__._ ._...»._......_..._{ 96I ._..._._...._..---1 e9 e8o eeo 45_..._._._.»___... ~ 93 ~ 930 48__..._.._.._. ._ -..._..»._W_~ 97 ~ 970 ~7....__~_..-_...._....»__..._.....r...__..~ 101 705 ~ 7,010 1 050 4e._..~...»._..~_.~. 19...__....M.-.~__.. -----^----'1 -.._.. 109 ~ , 1,080 50 ...__....__._.,-.J 113 1 7,130 51 ............._._»~_. _.__. t!7 1.770 52.._.-._._..__~.._ ____.__.._.._..~ 722 ~ t~20 s3.....____...».~ _._. .~ tee I 7,Ze0 St....~__.._..__.._._. ~...._._____..I 731 7.370 55.._.__~__._.__.__..._.._..._._____~ 735 I 7,350 56._.-.__....».».._.__......._.._.....M» ~ 140 7,400 57.........__...__.. .__._...._ ~ t45 I 1,4so Se......_...._..._._.._._..»_....___.....__ t50 1,500 59.._....-._»...».........._ _........._.._......~ 7581 7.560 60....».___.M-_._...._-..__..__.._...~ 760 ~ 7.600 e7.._.__.___.........._.~_____...-i 76e ,,660 ez....._.__.__.___ -••----•I n1 e3..._..___....._.....-.._ 777 ; 7a7a 7.770 e4.._.__.....__»_..___.. .__~ 7e2 ~ ~ 7,820 es......».__.._._»...._. 7ee ___......_.-_ t.eeo se..._...._..._..._............ _.._._..._...._..~ ta4 7,940 67...._....__._._._....._.._.._~.._..: 200 z000 ae_.. ._........._ .._.._._.._.__.I tae zoeo 69...._.._____._.........._ .._. ._..~ 212 2120 70......_...__......._.._._. »._...........~a 21s zleo 71....._..__......_.»._........ ...__._...-~~ 225 i 2.250 2 ............._......_._......_ _.~..._....__.~ 233 ~ 2.330 77..........._ ...............».. . ...........~...-.. 243 ~ 2.430 14........._............_..._....___-'___._.... 250 2500 -84- § 3163.41 PENALTY CONVERSION T~e~E-A-Continued *onr Nol mtnetrd fa up b 10 °'y'' p~ai do6re ~ e d%aru Iel Nat oatsoeW .- 40 ~i ~ ~ zse 2590 zee 2eao 77 274 2740 2tl2 . 2620 7e 290 2900 eo 29e 29es e~ nos 3,Oe0 h _ 3~s 3,750 e3 3?3 3,$70 _ 61 33z 3,320 6S 3W 3,400 34e 3,490 67 356 1.590 et 3a7 3,670 eP 376 3.760 3e6 3,850 91 396 3,960 465 1,oso 9a ns 1.750 42s 41so a3s 1 3so 44e . 4,1e0 07 b7 4 610 474 , 4 740 80 /e7 , 4A70 700 500 5,000 (ii) In order to focus particularly on serious violations, while also consider- ing an operator's past compliance his tory. no dollar penaiLy shall be pro- posed for violations totaling less than 40 penalty points. <8) Penalty Conversion Table A (Transporters): The amount of Lhe proposed civil pen- alty for failure of a transpor~er to permit inspection of proper documen- tation required by paragraph (bX4) of Lhis section shall be determined by formula based on the following crite- ria: Le., the violation shall be consid- ered a malor violation (see Table I): and the transporter's history of previ- ous violations (see Table II). Penalty points shall be assigned to each crite- rion and the 2 numbers shall then be totaled, and the point accumulation converted to a dollar per day amount by using the first column of "Penalty Conversion Table A". (?) Penalty Conversion Table (B): Titte ~3-Publk hands: Interior (i) The amount of the proposed civil penalty for violation of paragraph (b)(5) of this section shall be deter- mined by the formula based on the following criteria: i.e.. Lhe spedflc vio- lation (Table III): and the lessee's his- tory of previous violations (Table II). (S) Penalty points shall be assigned to each criterion and the 2 numbers shall then be totaled, and the point ac• cumulation converted to a dollar per day amount by using "Penalty Conver- sion Table B." TABLE III-Tv~ of VrounoK YnlWOn ~~ pdKs Fd b permit every upon The Ieeeehol0 70 Fain b p~ inepeeeon a0 Knae~gy a MM6uMp Lila b rbtiM aftr Meg begne a reren~ pn7doctbn try the 5M twrtws eer OnrM7elr e5 (iii) The following penalty conver- sion table shall be used Lo convert the accumulation Of penalty points from Tables II and III to the appmpriate per day Proposed monetary •penalty. m 64 s7 ae 70 71 n 73 7/ 75 7e n 7s >9 ao 81 sZ. e3. a.. es. 9e . 87. ee. 99. Petilh dowry per 3,800 3.720 3.610 3.970 .,7ao 4,220 4,360 4,490 4,82D Ia80 4,900 s.oa s,,eo s,33o s.4eo ss3o 5,780 s.93o eoeo 6110 6.400 aseo a7zo e.e9o 7,080 7,220 7,400 7.570 7.74a 7,920 $~ PEnAlrr CONVERSION TAetE-8 ~ ~ Y Cl~apte~ 11-8uroau of Lond Management PENALTY CONVERSION TABt.E-B-•ContinUad 90 91 0.100 8 280 92 . 0.480 97 a650 94 840 8 . 98 , 9 030 98 . 9 220 97 , 9 410 9e , 9 800 Q0. . 9 800 1ao ana . 10.000 (8) Penalty Conversion Table--C: (i) The amount of the proposed civil penalty for violations of paragraph (b)(8) of Lhis section shall be deter- mined by the formula balled on the following criteria: i.e.. the specific via lation (Table N): and the lessee's his- tory of previous violations (Table II). W) Penalty points shall be assigned to each criterion and the 2 numbers shall then be totaled, and the poinD ac- cumulation converted to a dollar per . day amount by using "Penalty Conver- sion Table-C." TAeLH IV-TYnE 0.F VlounoN Y f K~+4M a- wiYh~r O~a0ue0. •7fYR4sM R s,s nm hYM a nrWOirq wnt[w, ~neameeon...____ Knowrgy 0.r ~uh+N OnDr4s. rt~ a atbnel wOasW wneen rrtamreon._. 1(ro.wgy 0.r wi{thaNy nnwN,.:o.. or dNarb d v gn tran ony w.. wiAhdR nmg NqY wN,any to 0.o m ~>w. 4Cpp0. aM4, tranPOrt a aonveya ro 4ronw any d 0.r g4s kfggkflg 0.r hrnq neon b know tnp ~ dl 0.r g0. wtl smNn or SAY mmovW 0.r dvvtetl_ 70 80 Pswly doare p°' aw ~ ~ 9,600 9 925 ~ , ,0 250 .-.._ ~ -- , 10 550 ~ , 10 900 ~ • , ,1125 ~ 11 550 ~ , t, 900 70 , ,2 250 n . tz 5oo ~ , 1z95o ~ ,3 325 74 . ,0.70.0 ~. ~ , 14 075 ~ , 14 450 T- . u a25 ~ . u 2oo ~ . 15 600 ~ , 16 000 B1 , ,0.40.0 ~ 10.800 e3. n z2s ~ . 17 650 ~' . 18 080 ~ , 18 500 e7 _._._ , 1aa2s ~ ~ 19 350 es. , 19 800 90 . , ~ ~ 91 ~. , 24700 ~ ~ 21 150 ~- , 2t 825 ~ , 22 100 95 - ~ . 22 575 ~ . 23 050 97 - . 23 5 "5 ~ 0. . 24 000 ~ -- , 24,500 100 Ord 400kR 25,000 76 [49 F'R 37385, Sept. 21.1984) Fssacr:ve Dora Nt1'!S AL 49 FR 37365. Sept. 21. 1984. § 3183.4-1 waa added, eStec- m rive October 22. 1984. $ 3163.1-2 Criminal penaltie6. Any person who comatits an act for which a civil penalty is provided to 4 3163.4-1{b)(6) of this title shall, upon conviction, be punished by a fine of not more than 550,000 or by imprison- ment [or not more than 2 year or both. (iii) The following penalty conver- sion table shall be used to convert the accumulation of penalty points from Tables R and N to the appropriate per day proposed monetar•,/ penalty. PENALTY CONVERSION TABLE-C pp4y ~ aoYr>t i ~" W e6 ................_......__..............._. ....__..; 6t .....__.._._.._..... ?.070 .. .._ ...................._..----......._.. ..__.i 9.300 [49 F'!3 37387. Sept. 21. 19847 Erracrcvc DAa Nor>: AL 49 1'R 37387, Sepc. ~1. I984. 3 3183.4-2 wa8 added, effec• rive October 22. 1984. -36- r i i r i § 3163.4=Z PENALTY CONVERSION TABLE-G-(,pntinU@d r r r r i~ i r § 3163.5 Title 43-Public Londsa Inferior $ 3163.5 Assessments snd adminutaatire charges pursuant Lo the regulations of the pen~wp• Minerals Management Service. (a) Assessments made under § 3163.3 of this title are due upon ts4uaace and shall be paid within 30 days of receipt of certified mail written notice or per- sonal service. as directed by the au- thorized officer in the notice. Failure to Pay assessed damages timely will be subject to late Payment charges as prescribed under Title 30 CFR Group 202. (b) Administrative penalties undo 13163.4-1 of this title shall be paid within 30 days of completion of any final order of the Secretary or the final order of the Court. (c) Payments made p++*~+*A*+t to this section shall not relieve the lessee irom•the responsibility of compliance with the regulations in this part or from liability for. waste or any other damage. A-waiver of any Particular as- sessment shall IIOt be (xm.5trued as pre- eiuding an assessment pursuant to 13183.3-oi this title for any other act of noncompliance' o(x:(aring at the same time or at any other time. The amount of any civil penalty under 13163.4-11b) of this title. as finally de- termined. may be deducted from any sums owing by the IInited States to the person charged. [47 FR 47?85, Oct. 27, 1984. Redesignated and amended at 48 FR 38383, 38386. Aug. 12, 1983: 49 Flt 37388, Sept. 21, 1984] P:rrscsive Dais Noss At 49 FR 37388, Sept. 21. 1984. # 3163.3 was amended, effec- tive October 22, 1984• by revising the tale and paragraphs (a) and tb). and by adding a new sentence at the end of paragraph (c). For the e~nventeaoe o! the user. the super- seded tent is set forth below. 9 31635 Payaemt of a~eameat or peaaltlea. (a) Asses®mts made under ; 3163.3 of this title are due upon Jssuaace and shall be paid within 30 Jaya of recelpt.of "Certified Mail^ wrtttea•aoticx. Failure to pay assessed damages timely wIIl be subiect to late pay meat charges pnlsuanL to the regulstiona of the MiaetaLs Management Service. (b) Penalties wader f 3183.4 of thin title shall be paid within 30 days of the comple- tion of any repueated hearing as aathorized by that section: or within 30 days of the completion of an appeal pursuant to Part 4 of this title. I?silure to Pay assessed penal- ties timely will be subiect• Lo law payment ~ 3163.6 Injunction aad specific perform. (a Ill addition Lo any other remedy under this part or any mineral leasing law. the Attorney General of the IInited States or his designee may brfng a civil action in a district court of the 17nited States to: (I) Restrain any violation of the Federal Oil and Gas Royalty and Man- agement Act or any mineral leasing law of the IInited States; or <2) Compel the taking of any action required by or wader the Act or any mineral leafing law of the IInited States. (b) A civil action described in para- graph (a) may be brought only in the i7aited States district court of the ju- dicial. district wherein the acct. omis- sion or trsasaction constituting a vio- lation under the AcL or any other min- eral leasing law occurred, or wherein the defendant is found or transacts business. [49 F}i 37368.3ept. 21, 19847 Errsrrtvs Ds~ra Nara At 49 FR 37388. Sept. 21, 1984.4 3163.6 wan added, effecWve October 22.1984. Subpart 3164-Special Provisions i 3164.1 Onshore Oil and Gas Orders, (a) The Director is authorized to issue Onshore Oil and Gas Orders when necessary to implement and sup- plement the regulations in this part. :111 orders will be published in the ~'ID- LRAl. Raorsrss: both for public com- ment and in final form. <b) These Orders are binding on les- sees sad operators of Federal and re- stricted Indian oil and gas leases which have been, or may hereafter be, issued. The Onshore Oil and Gas Orders listed below are currently in effect: 3i • • ~ f Chapte- il-i3ureau of Land Manogen~eM a'Or SuOjeet Ertseor+ dtl~ FEOEati REdshn ~ ~~' na n~.rmmc~ "oss ~o0~rr nor. ,z lean .s Ffl nn-d a +ao+a. cp.. and v a6aa Fa sazsa [4? FR 4TT85, Oct. 27, 1982. ltedesigcated at 48 ]?R 38583. Aug. 12, 1983, and amended at 48 1?R 48921, Oct. 21, 1983: 48 FR 58228, Dee. 20, 1983] 3 3184.2 NTL's and older implementing P~~- (a) The authorized officer is author- ized to issue NTL's when necessary to implement the onshore oil and gas orders and the regulations in this part. All N'i'L's will be issued after notice and opportunity for comment (b) All 1!iTI.'s Lsgued Prior to the pro- mulgation of these regulations shall remain in effect until modified, super- seded by an Onshore Oil and Gas Order, or otherwise terminated. ' (c) A manual and other written in- structions will be used to provide policy and procedures for internal guidance of the Bureau of Laced Man- agement. 3 3164.3 Surface rights. (a) Lessees shall have the right of surface use only to the extent specifi- cally granted by the lease. ~Aith re- spect to restricted Indian lands, addi- tional surface rights may be exercised when ;ranted by a written agreement with the Indian surface owner and ap- proved by the Superintendent of the Indian agency having jurisdiction. (b) The authorized officer is respon- sible for approving and supervising the surface use of all drilling, develop- ment, and production activities on Lhe leasehold. This includes storage tanks and processing facilities, sales facili- ties, aII pipelines upstream from such facilities, and other facilities to aid production such as water disposal pits and tines, and gas or water injection lines. ~ 3164.4 Dama;es on restrieted Indian lands. Assessments for damages to :ands, crops, buildings, and to other improve- § 3165.1-1 meats on restricted Indian lands shall be made by the Superintendent and be payable in the manner prescribed by said official. Subpaef 3165-Aelief, Conflicts, and Appeois $ 3186.1 Relief froze operatin; and pro- deeies requireteents. (a) Applications for relief from either the operating or the producing requirements of a lease, or both, shall be filed in triplicate with the author- ized officer, and they shall include a full statement of the circumstances that render such relief necessary. (b) The authorized officer, in the in- terest of conservation. is authorized to act oa applications submitted for a suspension of operations or production or both filed pursuant to 43 CFFi Sub- part 3103. The application for suspen- sion must be filed with the authorized officer prior Lo the expiration data of the lease: must be executed by all les- sees of record or, is the case of a Fed- eral unit approved under Part 3180 of this title. by the unit operator on behalf of committed tracts or by all lessees of such tracts: and include a full statement of the circumstances that reader such relief necessary. <c) If approved. a suspension of oper- ations and production will be effective on the filet of the month in which the completed application was filed with the authorized officer. Suspensions will terminate when they are no longer justified in the interest of con- servation, when such action is In the interest of the lessor, or as otherwise stated by the authorized officer in the approval letter. 0 3166.1-i Iiellef from royalty and rental requirements. Applications for nay modification authorized by law of the royalty or rental requirements of a lease for lands of the IInited States shall be filed in triplicate in the office of the authorized officer having jurisdiction of the lands. (For other regulations re- lating to royalty and rental relief, and suspension of operations and produc- tion, see Part 3103 of this title.) (48 1'R 36588, Aug. 12, 19837 - 8$ - i r r r C~ ~ 3165.2 § 31653 Conflicts between regulations. In the Brent of any conflict between the regulations in this part and the regulations in Title 25 CFR concern- ing oil and gas operations on Federal and Indian leaseholds, the regulations in this pan shaA govern with respect to the lessee's obligations in the con• duct of oil and gas operations, acts of noncompliance. and the jurisdiction and authority of the authorized offi- cer. § 3165 3 Technics! and procedural review. A lessee or operator may request a technical and procedural review of any instructions, orders, or decisions issued by the authorized officer under the regulations in this pan. Such request including all supporting documenta- tion must be filed in writing within 10 working days of the date such instruc- tions, orders, or decisions were re- ceived and must be filed with the ap- propriate State Director. Such a re- quest shall not result in a suspension of the instruction or order unless the reviewing official so determines. The reviewing official will issue a final de- cision within 10 working days. Where a technical and procedural review is requested, the .decision issued upon review will represent the final decision from which an appea! may be taken pursuant to § 3165.4 of this title. § 3165.E appeals. Instructions, orders or decisions issued under the regulations in this pan may be appealed in accordance with the provisions of Part 4 of this title if Federal lands are involved or 25 CFR Part 2 if Indian lands are ia- :~olved. An appeal shall not result in a suspension of the requirement for compliance with the order or decision from which the appeal is taken unless the official to whom the appeal is made determines chat stl:pension of the requirements of the order or deci- sion will not be detrimental to the in- terests of the lessor or upon submis- sion and acceptance of a bond deemed adequate to indemnify the lessor from loss or damage. C48 FR 36586. Aug. 12. 19831 Title 43-Public Lands: Interior PART 3180-ONSHORE Oil AND GAS UNIT AGREEMENTS-UNPROVEN AREAS No'ts Many existing unit agreements cur- rently in effect specifically refer to the United States Geological Survey. USGS. Minerals Management Service. MMS. Su- penlsor. Conservation Manager. Deputy Conservation Manager. Minerals Manager and Deputy Minerals Manager in the body of the agreements, as well as references to 30 CFR Part 221 or specific sections thereof. Those references shall now be read in the context of Secretarial Order 3087 and now mean either the Bureau of land Manage- ment or Minerals Management Service. as appropriate. Subpart 3180-Onshore Oil and Gas Unit Agroaments-General Sec. 3180.0-1 P•,upose. 3180.0-2 Policy. 3180.0-3 Authority. 3180.0-5 Definitions. SubpaA 3181-Application far Unit Agreement 3181.1 Preliminazy consideration of unit agreement. 3181.2 Designation of unit area: depth of test well. 3181.3 Parties to unit agreement. 3181.4 Inclusion of non-Federal lands. Subpart 3182--Ouafitieatioos of Unit Operator 3182.1 Qualifications of Unit Operator. Subpart 3183-Fiiirrg and Approval of Deeuments 3183.1 Where to Pile papers. 3183.2 Designation of area. 3183.3 Executed agreements. 3183.3-1 Approval of executed agreement. 3183.4 Participating area. 3183.5 Pian of development. 3183.6 Return of approved documents. Subpart 3184-8ondt 3184.1 Bonds. Subport 3185-Appsals 3185.1 Appeals. Subpart 3186--Model Forms 3186.1 Model onshore unit agreement for unproven areas. 3188.1-I Model Exhibit "A." 3188.1-2 Model Exhibit "B." -89- i i i Chapter II-$ureau of Laod Management Sec. 3186.2 Model collective bond. 3188.3 Model for designation of succevor unit operator by working interest owners. 3188.4 Model for change in unit operator by assignment. Atlrsonrrs: The Act of February 23. 1920 /30 II.S.C. 181. 188, 228(e), 228(1)). as amend- ed. Sot+ac= 48 FR 28786. June 10, 1983, unless otherwise noted. Redesignated aL 48 PR 38587. Aug. 12. 1983. Ebrroaw. Nosrs NoTt 1: See Redesignation Tahle No. 2 ap- pearing is the Finding Aids section of this volume: Nora 2.• Nomenclature changes to this part appear aL 48 FR 38587-36588. Aug. 12, 1983. Subpart 3180-Onshore Oil and Gas Unit Agreements-G~nerai 3 3180.0-1 Purpose. The regulations in this part pre- scribe the procedures to be followed and the requirements to be met by the owners of nay right. title or interest is Federal o[i and gas leases lase ¢ 3160.0-5 of this title) and their repre- sentatives who wish to unite with each other, or jointly or separately with others, in collectively adopting and op-. eratin8 under a unit plan for the de- velopment of any oil or gas pool, field or like area, or any part thereof. All unit agreements on Federal leases are subject to the regulations contained in Part 3160 of this title, Onshore Oil and Gas Operations. All unit oper- ations on non-Federal lands included within Federal unit plans are subject to the reporting requirements of Part 3160 of this title. [48 FR 36587, Aug. 12, 1983] 4 3180.0-2 Poticy. Subject to the supervisory authority• of the Secretary of the Interior, the administration of the regulations in this part shall be under the jurisdic- tion of the authorized officer. In the exercise of his/her discretion, the au- thorized officer shall be subject to the direction and supervisory authority of the Director, Bureau of Land Manage- ment, who may exercise the jurisdic- tion of the authorized officer. (48 FR. 38587, Aug. 12, 1983) 0 3180.0-3 Authority. § 3180.0-i The Mineral Leasing Act. as amend- ed and supplemented (30 II.S.C. 181, 189, 226(e) and 2213(j)>, and Order Number 3087, dated December 3, 1982. as amended on February 7, 1983 <48 FR 8983). under which the Secretary consolidated wad transferred the on-• shore minerals management functions of the Department. except mineral revenue functions wad the responsibil- ity for leasing of restricted Indian lands, to the Bureau of Iaad Manage- ment. C48 FR 36587, Aug. 12, 1983] 3 3180.0-5 Definitions. The following terms. as used iri this part or in any unit agreement ap- proved under the regulations fn this part. shall have the meanings here in- dicated unless otherwise defined in such unit agreement: Federal lease. A lease issued under the Act of February 25, 1920, as amended (30 LT.S.C. 181, et seq.): the Act of May 21, 1930 (30 LT.S.C. 351- 359); the Act of August 7, 1947 (30 II.S.C. 351, et seq.); or the Act of No- vember 16, 1981 (Pub. L. 97-98, 95 Star. 1070). Participating area. Thal part of a unit area which is considered reason- ably prnven Lo be productive is paying quantities or which is necessary for unit operations and W which produc• tioa is allocated in the manner pre- scribed in the unit agreement. Unit area. The area described in as agreement as constituting the tared logically subject to exploration and/or development under such agreement. Unitized IaaaL Those loads within a unit area which are committed to an approved agreement or plan. Unitized substances. Deposits of oil and gas contained in the unitized land which are recoverable is paying quan- tities~by operation under and pursuant to an agreement. Working interest. An interest held in unitized substances or in Lands con- taining the same by virtue of a lease, operating agreement, tee title, or oth- erwise, under which, except as other- wise provided in the agreement, the -90- i r i f • • f ~~ § 3181.1 owner of such interest is vested with the right to explore for, develop, and produce such substances. The rights delegated to the unit operator by the unit agreement are not regarded as a working interest. [98 FR 26766. June 10, 1983. Redesignated and amended at 48 F'R 38587, Aug. 12, 19831 Subpart 3181-Application for Unit Agreement 3 3181.1 Preliminary consideration of unit agreement The model unit agreement set forth in $ 3186.1 of this title, is acceptable for use in unproven areas. Unique situ- ations requiring special Provisions should be clearly identified, since these and other spedal eanditions may necessitate a modification of the model unit agreement set forth in 3188.1 of this title. Any proposed special provisions or other modifica- tions of the model agreement should be submitted for preliminary consider- ation so that nay necessary revision may be prescribed prior to execution by the interested parties. Where Fed- eral lands constitute less than 10 per- cent of the total unit area. anon-Fed- eral unit agreement may be used. Upon submission of such anagree- ment. the authorized officer will take appropriate action to commit the Fed- eral lands. . 3 3181.2 Designation of nnit area: depth of test well An application for designation of an azes as logically subject to develop- ment under a unit agreement and for determination of the depth of a test well may be filed by a proponent of such an agreement at the proper BL'1R office. Such application shall be ac- companied by a map or diagram on a scale of not less than 2 inches to 1 mile, outlining the azea sought to be designated under this section. The Federal, State. Indian and privately owned land should be indicated by dis- tinctive symbols or colors. Federal and Indian oil and gas leases and lease ap- plications should be identified by lease serial numbers. Geologic information, including the results of any geophysi- cal surveys, and any other available in- Title 43--Publie Landss Interior formation showing that unitization is necessary and advisable is the public interest should be furnished. Ij' re- quested geologic, geophysical and other related information so furnished will be treated as confidential in ac- cordance with the provisions of 4 3162.8 of this title. These data will be considered by the authorized officer and the applicant will be informed of the decision reached. The designation of an area pursuant to an application filed under this section, shall not create an exclusive right to submit an agreement for such azea, nor preclude the inclusion of such azea or any party thereof in another unit azea. 3 3181.3 Parties to unit agreement The owners of any right. title, or in- terest in Lhe oil and gas deposits Lo be unitized aze regarded as proper parties to a proposed agreement. All such paz- ties must be invited to join the agree- ment. IY any party fails or refuses to join the agreement, the proponent of the agreement. at the time it is filed for approval, must submit evidence of reasonable effort made to obtain join- der of such party and, when requested, the reasons for such nonjoinders. The address of each signatory party to Lhe agreement should be inserted below the signature. Each signature should be attested by at least one witness if not notarized. The signing parties may execute any number of counterparts of the agreement with the same force and effect as if ail parties signed the same document. or may execute a rati- fication or consent in a separate in- strument with like force and effect. § 3181.3 Inclusion of non-Federal lands. (a) Where State-owned land is to ~e unitized with Federal lands, approval of the agreement by appropriate State officials must be obtained prior Lo its submission to the proper BLM office for final approval. When authorized by the laws of the State in which the unitized land is situated, appropriate provision may be made in the agree- ment, recognizing such laws to the extent that they are applicable to non- z'ederal unitized land. (b) When Indian lands are included. modification of the unit agreement - 91 - i • • i ~r Chapter il-Bureau of Land ManagomotM will be required where appropriate. Approval of an agreement containing Indian lands by the Bureau of Indian Affairs must be obtained Prior to final approval by the authorized officer. Subpart 3182-Cualificatioes of Unit Operator 9 31821 Qaalificatioa of unit operator. A unit operator must qualify as to citizenship in the same manner as those holding interests in Federal oil and gas leases under the regulations at Subpart 3102 of this title. The unit op- erator may be an owner of a working interest in the unit area or such other party as may be selected by the owners of working interests. The unit operator shall execute an acceptance of the duties and obligations imposed by Lhe agreement. No designation of or change is a unit operator will become effective until approved by the authorized officer. and no such ap- proval will be granted unless the suc• censor unit operator is deemed quali- fied to fulfill the duties and obliga- tions prescribed in the agreement. Subpart 3183-t:iiing and Approval of Documents 9 3183.1 Where to file papeta. All papers, instruments, documents. and proposals submitted under this part should be filed is the proper BLM office. 9 3183.2 Desi~atioa of area. An application for designation of a proposed unit area and determination o[ the required depth of Lest v~ell(s) shall be filed in duplicate. A like number of counterparts should be tiled of any geologic data and any other information submitted in sup- port of such application. 9 3183.3 Executed a`reementa. Where a duly executed agreement is submitted for final approval, a mini- mum of four signed counterparts should 6e fIIed. The number of coun- terparts to be filed for supplementing. modifying, or amending an existing agreement, including change of unit operator, designation of new unit oper- § 3184.1 ator, establishment or revision of a participating area, and termination shall be prescribed by the authorized officer. $ 3183.3-i Appro+al o[ ezeeated a;ree. meat. A unit agreement will be approved by the authorized officer upon a deter- mination that such agreement is nec- essary or advisable fn the public inter- est and is for the purpose of more properly conserving natural resources. Such approval will be incorporated in a Certification-Determination docu- ment appended to the agreement (ex- ample in ¢ 3186.1 of this title). No such agreement will be approved unless the parties signatory to the agreement hold suffideat interests in the unit area to provide reasonably effective control of operations. Any modifica- flan Of an approved agreement will re- quire the prior approval of the author- ized officer. 9 3183.4 Partieipatias aces. Two counterparts of a substantiating geologic report, including structure- contour map, cross sections. and perti- neat data, shall accompany each appli- cation for approval of a participating area or revision thereof under as ap- proved agreement. 9 3183.5 Plan o[ de+elopment. Three counterparts of all plans of development and operation shall be submitted for approval under an ap- proved agreement. 9 3183.6 Return of appro+ed doeameata. One approved counterpart of each instrument or document submitted for approval will be returned to the unit operator by the authorized officer or his representative, together with such additional counterparts as may have been furnished by that purpose. Subpart 3184-8onda 9 3184.1 13onds. Ia lieu of separate bonds required for eac:t Federal lease committed to a unit agreement, the unit operator may furnish and maintain a collective ~or- porate surety bond or a personal bond -92- I D ~ f r~ ~- i i § 3185.1 conditioned upon faithful perform- ance of the duties and obligations of the agreement and the terms of the Federal leases subject thereto. Person- al bonds shall be accompanied by a de- posit of negotiable Federal securities in a sum equal at their par value to the amount of the bonds. and by a proper conveyance to the Secretary of full authority Lo sell such securities in case of default in the perfofmaace of the obligations assumed. The liability under the bond shall be for such amount as the authorized officer shall determine Lo be adequate to protect the interests of the IIaited States, and additional bond maY be requfred whenever deemed necessary. The bond shall be filed with the authorized offi- cer. Aform of corporate surety bond is set forth in # 3186.2 of this title. In case of change of unit operator, a new bond must be filed or consent of surety Lo such change of unit operator must be furnished. Subpart 3185-Appeals 9 3185.1 Appeals. A technical and procedti'ral review may be requested pursuant to $ 3165.3 of this Litle and/or an appeal may be taken as provided in Part 4 of this title from any order or decision issued under the regulations in this part. Subpart 3186-Model Fartas 3 3186.1 Model onshore unit agreement for unpeo~en arena. Introductory Section Section 1 ENABLING ACT AND REGU- LATIONS. Section 2 UNIT AREA. Section 3 UNITIZED LAND AND UNIT- IZED SUBSTANCES. Section 4 UNIT OPERATOR. Section 5 RESIGNATION OR REMOVAL OF UNIT OPERATOR. Section 8 SUCCESSOR UNIT OPERA- TOR. Section 7 ACCOUNTII4G PROVISIONS AND UNIT OPERATING AGREE- MENT. Section 8 RIGHTS AND OBLIGATIONS OF UNIT OPERATOR. Section 9 DRILLING TO DLSCOVERY. Section 10 PLAN OF FURTF~R DEVEir OPMENT AND OPERATION. Titis 43-Public Lands: interior Section 11 PARTICIPATION AFTER DIS- COVERY. Section 12 ALLOCATION OF PRODUG TION. Section 13 DEVELOPMENT OR OPER- ATION OF NONPARTICIPATING LAND OR FORMATIONS. Section 14 ROYALTY SEITLEI~NT. Section 18 RENTAL SE'I'TLII~N'T. Section 18 CONSERVATION. Section 17 DRAINAGE. Section 18 i.F.AfiF'R AND CONTRACTS CONFORMED AND E8TII7DID. Section 19 CONVENANT3 RUN WITH LAND. Section 20 EFFECTTYE DATE AND TERM. Section 21 RATE OF PROSPj'CTING. DEVELOPMENT. AND PRODIICTION. Section 22 APPEARANCES. Section 23 NOTICES. Section 24 NO WATiTFSi OF CERTAIN RIGHTS. Section 25 UNAVOIDABLE DELAY. Section 26 NONDISCRI11SII1ATION. Section 27 LOSS OF TITLE. Section 28 NONJOINDER AND 3UBSE- QUENT JOIIdDER. Section 29 COUNTERPARTS. Section 30 SURRENDER.' section 31 TASFS.' section 32 NO PARTNERSHIP.' Concluding Section ]3J WITNESS WHEREOF. General Guidelines. Certification-Determination. UNIT AGREE116~1T FOR THE DEVELOPI~.~1T AND OPERATION OF THE Unit area County of State of No. This agreement, entered into as of the day of . 19- by and between the parties subscribing. ratifying. or consenting hereto, and herein refernd to as the "par- ties hereto.'° PTCCIYESSa^ET'Fi: WHEREAS. the parties hereto are the owners of arorking. royalty, or other oil and gas interests in the unit area subiect to this agreement: and WF~REA.S. the Mineral Leasing Act of February 25. 1920. 41 Stat. 437, as amended 30 U.S.C. Sec. 181 et seq., authorizes Federal lessees sad Lheir representatives Lo units with each other, or jointly or separatelq ' Optional sections (in addition the pen~l- timate paragraph of Section 9 is to be ul- clndet only when more than one obligation well is reGnired and paragraph (h) of section 18 is *,o be used only when appiirsble). -93- • Chapter it-8uroou of Lond Management with others. in collectively adopting and op- era~ing aunit plan of development or oper- ations of aaY oil and gas pao6 field, or like area, or any Part thereof for the purpose of mote Properly conserving the natural re- sources thereof whenever determined and certitled by the Secretary of the Interior to be necessary or advisable in the publte inter- est; and aVB'EREAS. Lhe parties hereto hold suffi- cient iateresrs is the Unit Area covering the Land hereinafter described to give reasonably effective control of oper- ations therein: and WHIItEAS. it is the purpose of the par- ties hereto to conserve natural resources, prevent waste. and secure other benefits ob- tainable through development and oper- ation of the area sublect to this agreement under the terms. conditions, and limitations herein set forth: NOW. TSERE>•'OR>; is consideration of the premLses and the promises herein coa- tsitted, the parties hereto commit to this agreement their respective interests in the below~efined watt area, sad agree severally among themselves as follows: 1. ENABLING ACT AND REGIIL.A- T'IONS. The Mineral Leasin~Aci of Febru• wry 25. 1920. as amended, supra. and all valid pertinent regulations including operat- ing and unit play regulations, heretofore issued thereunder or valid, pertfnent, and reasonable regulations hereafter issued thereunder are acexpted and made a part of this agreement as to Federal leads, provided such regulations are not inconsistent with the terms of this agreement; and as to non- Federal lands, the oil and gas operating reg ulations in effect as of the effective dace hereof governing drilling and producing op• erations, not inconsistent with the terms hereof or the laws of the State is which the non-Federal land is located, are hereby ac- cepted and made a part of this agreement. 2. UNIT AREA. The area specified on the map attached hereto marked Exhibit A is hereby designated and recognized as consti- tuting the unit area, containing -acres, more or less. Exhibit A shows. is addition to the bound- ary of the unit area, the boundaries sad Identity of tracts and leases is said area to the extent known fo the Unit Operator. Ex- hibit Battached hereto is a schedule show- ing to the extent known to the Unit Opera- tor, the acreage. percentage, and kind of ownership of oil and gas interests in ail (ands in the unit area. However. nothing herein or in Eahibtts A or B shall be con• strued as a representation by any Party hereto as to the ownership of any interest ocher than such Interest or interests as are shown in the Exhibits as owned by such p~'tY. Exhibits A and B shall be revised by the Unit Operator whenever changes in the unit area or in the ownership interests !n § 3186.1 the individual tracts render such revision necessary, or when requested by the Au- thorized Officer, hereinafter referred to as AO and sot less than tour copies of the re- vtsed Ezhibfts shall be filed with the proper BLM office. The abovrdexribed unit area shall when practicable be expanded to !ncluda thereto say additional lands or shaII be contracted to eaciude lands whenever such ezpanaion or contraction is deemed to be neoasary or advL4able to conform with the purpoars of Chia agreement. Such expansion or ooatrac- tion shall be effected in the following manner. (a) Unit Operator, on its own motion (after preliminary concurrence by the AO), or on demand of the AO. shall prepare s notice of proposed ezpaaaion or contraction describtag the contemplated changes is the boundaries of the unit area, the reasons therefore, any Plana for additional drilling, and the proposed effective date of the ex- pansion or CoatrSCtion. preferably the first day of a month subsequent to the date of notice. (b) Sold notice shall be dellverrd Lo the Draper BLM office, and espies thereof mailed to the last knows address of each working interest owner. lessee and lessor whose interests are affected. advlaing that 30 days will be allowed for submission to Lhe IInit Operator of any obiectiona. (c) IIpon eapftation of t$e 30tity period Provided in the preceding Item <b) hereof, Unit Operator shall file with the AO evi- dence of mailing o, the aotitx of expaaaton or contraction and a copy of say obiections thereto which have been tiled with IInit Op- erator. together with an $pplication is trip- licate. for approval of such expansion or contraction and with appropriate fotnders. (d) After due consideration of all perti- nent information, the expa^_on or rnntzaa- tion shall, upon approval by the AO, become effective as of the date prescribed is the notice thereof or such other appropriate date. (e) All legal subdivisions of leads (Le.. 40 acres by Government survey or its nearest 'sot or tract equivalent: !n tnstancess of irreg. ular surveys, unusually large lots or tracts shall be considered is multiples of 40 acres or the nearest aliquot equivalent thereof). no parts of which are fn or entitled to be in a participating area on or before the fifth anniversary of the effective date of the first initial Participating area established undez this unit agreement, shall be eliminated automatically [tom this agreement, effect five as of said fifth anniversary, and such lands shall no longer be a part of the unit aces sad shalt no longer be sublect to this agreement, unless dIIigent drilling oper- ations are in progress on unitized lands not entitled to participation on said fifth acni- -94- Y Y 1 1 f r r r • § 3186°1 versary, in which event all such Isnds shall remain subject hereto for so long as such drilling operations are continued diligently, with not more Ldaa 90-days time elapsing between the completion of one such well and the commeacemeIIt of the next such well All legal subdivisions of lands not eatt- tled W be is a participating area within l0 years after the effective date of the Ytrst ini- tial participating area approved under this agreement shall be automatically elimlhat- ed from this agreement as of said tenth an- niversary. The Unit Operator shall, within 90 days after the effective date of any elimi- nation hereunder, describe the area so nHrninnra.i ~ the satlstadion of the AO Sad Dromptly notify all parties in interest. AII lands reasonably Proved Droductive of unit- ized substanceas is paying quantities by dilt- eeat drllling operations after the aforesaid S-year period shall became participating in the same manner as during said first 5-year period. However. when such diligent drilling operations cease, ail nonpartfdpsting lands not then entitled W be is a partidp~ting area Shall be sutomsticxlly eliminated effec- tive sa the 91st day thereafter. Any ezpaastoa of the unit area pursuant W this section Which embraces loads titere- tOtOie eliminated pursuant W thin subaec- Lion s(e) shall not be considered suWmstlc commitment or recommitment of such lands. tt coaditiona warrant extension of the 10-year period specified to this subsec- tlon, asingle eztension. oL not W exceed 4 years may be accomplished by consent of the owners of 90 percent of the working in- terest is the current aonparticlpatiag unit- ized loads sad the owners of 80 percent of the basic royalty interests (ezdusive of the basic royalty interests of the IInited States) iD nonpartidpatiag unitized lands with a~- proval of the AO, provided such exteaatan application !s submitted not later thaw 80 ~~ r W the expiration of sold 10-year 3. IINTTIZED I~PIND AND IINTTiT.F.D 3D8STANCFS. All land now. ar hereafter committed W Lhis agreement shall consti- Lute• land referred Wherein as "unitized land" or "land subject W this agreement" All oll and gas in any and all formations of the unitized lead are unitized under the terms of thin agreement and herein are called "unitized substances... t. IINIT OPF.R,ATOR. is herebq designated as IIait Operator and by signa- ture hereW as Unit Operator agrees and consents W accept the duties and oblige Lions of IIniL Operator far the dLscovery, de- velopment, and production of unitized sub- stances as herein provided. Whenever :eier• ence is made herein W the IInit Operator, such reference mesas the IIait Operator acting in that capacity and not as an owner of interest is unitized substances, and the term "working interest owner" when used • Title 43vPubllc Lands: Interior herein shall indude or Teter to IInit Opera. Wr as the owner of a worming interest Doty when such an interest is owned by it. 5. RESIGNATION OR REMOVAL OF UNIT OPE3tATOR. IInit Operator shall have the right W resign at any time prior to the establlahmeat of a partidpating area or areas hemmder, but such resignation shaLL not become effective so as to release Unit Operator from Lhe duties sad obligations of IInit Operator and terminate IInit Opera toe's rights as such fora period of 8 months after notice of intention W resign has bees served by IInit Operator oa all working in- terest owners and fire AO and until all weds then driIIed hereunder are Dlatxd is a satis- factory condition for suspension or aban- donment, whichever is required by the AO, unless a new IInlt Operator shalt have been selected and approved and shaft have taken over and assumed the duties sad obligations of IInit Operator prior W the expiration of said period. IIntt Operator shall have the right W resign !n like TIITA~r and subject W lime limitations as above provided ac aay time a[Ler a participating area established here- under 1s in ezisteaCe, but 1a all instances of resignation or removal, until a successor IInit Operator is selected and approved as hereinafter provided, the working interest owners shall be jointly responsible for per- formance of the duties of IInit Operator, and shall not later than 30 days before such resignation or removal becomes effective ap• point a common agent W represent them is any action W be taken hereunder. The resignation of IIait Operator shall not release IInit Operator from any liability for any default by it hereunder aue:urrfag prior W the effective date of its resignation The IIffit Operator may, upon default or failure in the gertormaace of its duties or obligations hereunder, be subject W removal by the same percentage vote of the owners of working interests as herein Drovided for the seiecttan of a new IInit Operator. Such removal shall be effective upon notice thereof W the AO. The resignation or removal of Unit Opera Wr under this agreement shall not termi- aste its right, title, or interest as the owner of working interest or other interest la unit- ized substances, but upon the resignation or removal of IInit Operator becoming ef~ec- Cive. such IInit Operator shall deliver pos- session of all we!]s, equipment. materials. and appurtenances used in conducting the watt operations W the new duly qualified successor IIait Operator or W the common agent. it no suds new Unit OperaWr !s se- lected, elected, W be used for the Durpose of conducting unit operations hereunder. *lothing herein shall be construed as au- thor~ing removal of nay material, zquip- -95- i • Chapter il-8ureou of Land Moeag~meM meat. or appurtenances needed for the pres- ervation of aaY wells. e. SIICCESSOR IIPiIT OPERATOR. Whenever the IInit Operator shall tender his or its resignation as IIniL Operator or shall be removed as hereinabove Provided. or a change of IInit Operator is negotiated by the working interest owners, the owners of the working interests according W their respective acreage interests in aU unitized land shall. pursuant to the Approval of the parties requirements of the unit operating agreement, select a successor IInit Operator. gush selection shall not become effective unt1L• ca) a IInit Operator so selected shall accept in writing the duties and responsibil- ities of IInit Operator. and (b) the selection shall have been approved by the AO. Tt no successor IInit Operator is selected and gt7alitled as herein provided. the AO at his election may declare Chia unit agreement termfnated- T. ACCOIINTING PROPISIONS AND UNIT OPERATII~IG AGREEB~IT. II the Unit Operator is not the sole owner of work- ing lnteresta. coats and expenaea incurred by IInic Operator in conducting unit operations hereunder shall be paid and apportioned among and borne by the owners of working Interests, all in accordance with the agree- ment or agreements entered into by and be• tween the IInit Operator and the owners of working interests, whether one or more. sep• arateiy or collectively. Pay agreement or agreements entered into between the work- ing interest owners and the IInit Operator v provided is this section whether one or more. are herein referred to as the "unit op- erating agreement." Such unit operating agreement shall also provide the ms^~~r In which the working interest owners shall be entitled to receive theft respective propor- tionate and allocated share of the beneflt8 accruing hereto in conformity with their ua- derlyfng operating agreements. )casts. Or other independent contracts, and such other rights sad obligations as betarcen IInit Operator sad the working interest owners as may 5e agreed upon by IIntt Operator and the working interest ownerx however. no such unit operating agreement shall be deemed either Lo modify any of the terms and conditions of this unit agreement or to rclleve the IInit Operator of any right or ob• ligation established under this unit agree- ment, and in case of nay inconsistency or conillct between this agreement and Lhe unit operating agreement. this agreement shall govern. Two copies of any unit operat- ing agreement executed p~~sr~t to this section shall be flied in the proper BLM office prior to approval of this unit agree- ment. 8. RIGFITS APTD OBLIGATIONS OF UNIT OPERATOR. Except as otherwise § 3186.1 spedfically provided herein, the exdusfve right. privilege. and duty of exercising any aad all rights of the parties hereto which are necessary or convenient for prospecting for. producing storing. allocating, and dfa- tributiag the unitized substances are hereby delegated to and shall bE exercised by the IInit Operator as herein provided. Accepta- ble evidence of title to sold rights shall be deposited with IInit Operator and, together walla thin agreement, shall constitute and define the rights. privileges, and obligations of IInit Operator. Nothing herein, however. shall be construed to transfer title to any land or to any lease or operating agreement. it being understood that under this agree• mmt the IIait Operator, is its capedty as IIait Operator. shall exercise the rights of poaseasion and use vested is the parties hereto only for the purposes herein sped• Lied. 9. DRII.LING TO DI3COVEFiY. Within H months after the effective date hereof. the IInit Operator shall commence to drill sa adequate test well st a location approved by the AO, unless oa such effective date a well is being drilled In conformity with the terms hereof. and thereafter continue such drill- ing d113gmtLy until the formation has` been leafed or until ac a lesser depth unit- ized substances shall be discovered whidt can be Produced m Paying quantities (to wit: quantities suifidmc W repay the coata,oi drilling, completing, and producing oper- ations, with a reasonable profit) or the IInit Operator shall ac any time establish to the satisfadion of the AO that further drilling of said well would be uawarraated or im- praeticable. Provided, however. that IInit Operator shall not to any event be required to drill said well to a depth in excess of - feet. IIntil the discovery of unitized sub- stances capable of being produced is paying quantities, the IIaic Operator shall continue drilling one well at a time allowing not more than 8 months betaveen the comPie- tlon of one weII and the commmcemeat of drilling operations for the nezt well, until s well capable of produdng unitized sub- stances is Paying quantities is completed to the satisfaction of the AO or until it 1J rea• sonably proved that the unitized land 13 in- capable of produdng unitized substance is paying quantities la the formations drilled hereunder. Nothing is this section shall be deemed to limit the right of the IInit Opera- tor to resign as provided in Section S. hereof, or as requiring IInit Operator to commence or continue any drilling during the period pending such resignation becom- ing effective In order to comply with the re- quiremeats of this section. The AO may modify nay of the drilling re- qufremeats of this section by 6Taziting rea- sonable extensions of time when. in his epinloo. such action is warranted. -96- i Y i ii r i Y ~ ~ r Cl r~ 1 § 3186.1 •• Multiple well requirements Notwith- standing anything in this unit agreement to the contrary, except Section 25, UNAVOID- ABLE DELAY. -wells shall be drilled with not more than 6-months time elapaiag between Lhe completion of the first well and commencement of drilling operations for the second well and with sot more than B- months time elapsing between completion of the second well and the commencement of drllling operations for the third well... . regardless of whether a dLicovery has been made la any well drilled under this provi- sion. Both the Initial Weil and the second well must be drilled in compliance with the above spedfied iormation or depth require- menta in order W meet the dictates of this section: and the second well must be located $ minimum of -miles from the initial well in order LO be aa;epted by the AO a9 the second unit test well, within the mean- ing of this section. The thud test well shag be diligently drilled, at a location approved by the AO, to test the formation or Lo a depth of -feet, whichever is the lesser, and must be located a minimum of - mild from both the initial and the second test wells. Nevertheless, to Lhe event of the discovery of unitized substances Ia paying quantities by any well. tills unit agreement shall not term+*±s-~ for failure to complete the well program, but the unit area shall be contracted automatically, effective the first day of the month following the de- fault, to a++**+TS.e by subdivisions cap dt fined is Section 2(e) hereof) ail ]ands not then entitled to be III a participating area.'' Upon failure W commence say well as pro- vided for in this (these) section(s) within the time allowed, prior Lo Lhe establishment of a participating area, including any exten- sion of time granted by the AO. this egret meat will automatically terminate. Upon failure to continue drilling diligently any well commenced hereunder, the AO may. after 15-days notice to the Unit Operator. declare this unit agreement terminated. The Parties to this agreement may not tnitiste a request LO voluntarily terminate this egret went during the first 6 months of its term unless at least one obligatona well has been drilled in accordance with the provisions of this section. 10. PLAN OF FURTHER DEVELOP- MENT AND OPERATION. Within Q months after completion of s well capable of Producing unitized substances iII Paying quantitie, Lhe Unit Operator shall submit for the approval of the AO an acceptable plan of development and operation for the unitized land which, when approved by the DMM, shall constitute the further drilling and development obligations of the Unit ''Provisions Lo be included only a+hen a multiple well obligation is required. Title 43-Public Lands: Interior Operator under this agreemmt for the period specified therein. Thereafter. from time to time before the expiration of any existing plan, Lhe Unit Operator shall submit for the approval of the AO a plan for as additional specified period for tlse dt velopment and operation of the unitized land. Subsequent Dlans should normally be filed on a calender year basis sot later thaw March 1 each year. Any proposed modifica- tion or addition to the existing plan should be flied as a supplement to the plan. Any Plan Submitted PnTti+ant LO LhLS SEC- tion shall provide for the timely exploration 01 the unitized area, and for Lhe diligent drilling necessary for determination of the area or areas capable of producing unitized substance in paying quantitie in each and every productive formation. This plan shall be as complete and adequate ss the AO may determine to be necessary for timely devei- opmmt and proper conservation of the oil and gas resources in the unitized area and (a) Specify the number and locations of say wells to be drilled and the Droposed order and time for such drilling: and (b) Provide a summary of operations and production for the previous year. Plans shall be modified or supplemented whey necessary to meet changed condiWons or Lo protect the interests of all parties Lo this agrtemmt.. Resgonable diligence shall be exercised is complying with Lhe obliga- ttona of the approved plan of development and operaWon. The AO is authorized to great s reasonable extension of the &month period herein prescribed for submLssioa of aD initial play of development and oper- ation where such action is Justified because of unusual conditions or circumstance. Atter completion of a well capable of pro- ducfng unitized substances in Pay1n8 quanti- ties, no further wells. except such as may be necessary to afford protection against oper- atioas not under this agreement and such as may be specifically approved by the AO. shall be drilled except !n accordance with an approved plan of development and oper- ation. 11. PARTICIPATION APTF:Fi DISCOV- ERY. Upon completion of a well capable of Producing unitized substances is paying quantities, or aS soon thereafter as required by the AO, the Unit Operator shall submit for approval by the AO, a schedule, based on subdivisions of the public-land survey or ailquot parts thereof, of all land then rt garded 9s reasonably Proved t0 be produc- tive of unitized substances in Paying quanti- ties. These lands shall constitute a partici- pating area on approval of the AO, effective as of the date of completion of such well or the effective date of this unit agreement, whichever is later. The acreages of both Federal and noa•r^ederai lands shall be -97- i • • giapter II-8ureou of Land Managemerrf eased upon appropriate rnmputatioas from the coucars and distances shown on the last approves public-land survey as of the ettea five date of each initial participating area. The schedule shall also set forth the per- centaiie of unitized substances to be allotxt. cd, as provided is SeWon 1Z, to each com- mitted tract is the participating arcs so es- tsbiished, and shall govern the aIIaxtlon of production ,m..,.~~„r~^e with Lhe effective date of the participating area. A different participating area shall be estabLshed [or each separ+~ pool or deposit of unitized substances or for nay group thereof which ~ ptroduced as a single pool or zone, sad any two or more Participatla8 areas so estab• lhhed may be combined into and oa approv- al of the AO. When production from two or more participating areas fs subsequently found to be from a common pool or deposit, the Participating areas shall be combined Into one, effective as of such appropriate date as may be approved or prescribed b7 the AO. The participating area or arena so established shall be revised from time to time. subject to the approval of the AO, to include additional lands Lhen regarded as reasonably Proved to be Productive of unit- ized substances in paying quantities or which are necessity [or unit operations, or to exclude leads then regarded as resson- abiy proved not LO be productive of unitized substances In Paying quantities. and the schedule of aIIocation percentages shall be revised accordingly. The effective date of any revision shaII be the first of the month in which the knowledSe or information is obtained on which such revision !s predicat- ed: provided, however, that a more appropri- ate effective date may be used it Justified by Unit Operator and approved by the AO. No land shall be excluded from a participating area on account of depletion of its unitized substances, except that any partidpstiag area established under the Drovisions of this unit agreement shall terminate automatical- iy whenever aU completions !n the forma- tion an which the participating area 1, based are abandoned IC is the intent of this section that a par- ticipating area shat represent the area pro- duccive of unitized substances known or rea- sonably proved to be productive is paytng Quantities or which are necessary far unit operations: but, regardless of any revision of the participating area nothing herein con- tuned shall be construed as requiring any retroactive adlustmeat for production ob• tuned prior to the effective date of the revi• afore of the partidpating azea In the absence of agreement at any time between the IIr1t Operator sad the AO as to the proper definition or redefinition of a paricipacing area or until a participating zees has, or areas have, been established the portion of all payments affected there- by shall. except royalty due the United § 3186.1 States, be impounded 1a a manner mutually acceptable to the owners of committed Working interests. Royalties due the IInited States shall be determined by the AO and the amount thereof shall be deposited, as di- rected by the AO, until a parttdpating area Is finally approved and thm adJuated fa ac- cordance wfth a determlaatlon of the sum due as Federal royalty oa the basis of such approved participating area. Whenever It is determined, subject to the approval of the AO. Chat a Well drilled under this agreement 1s not capable of Dro- duction of unitized substances is paying quantitie and Inclusion is a particfpsting area of Lhe land on Which it is situated in a participating area is unwarranted, Droduc- tion from such Well shall, for the purposes of settiemmt among all parties other thaw Working interest oWae:s, be allocated to the land on Which the Well !s Located, unless such land is already Within the participating arcs established tOr the pool or deposit from Which such Droduction !s obtained. Settlement for Working interest benefits from such a nonpaying unit Well shall be made as provided is the unit opersttstg agreement. 12. ALLOCATION OF PRODIICTION. All unitized substances produced from each Dactldt-ating area established under this agreement, except any part thereof used is conf5rmity With good operating practices within the unitized area toe drllllna operat- ing, and other production or development purposes, for repressuriag or recycling !n ac• cordaatx with a plan of development and operations Which has hero approved by the AO, or unavoidably lost. shall be deemed to be produced equally on as acreage basis from the severs! tracts of unitized load of the participacta8 arcs established for such production. For the purpose of determining any benefits accruing under this agreement. each such tract of unitized land shall have aIIocated to iL such percentage of said pro- duction as the number of acres of such tract included to said participating area bears to the total acres of unitized land is said pas- ticipattng area except that allocation of production hereunder for purposes other *.han for selLlement of the royalty, overrid- ing royalty, or payment ouL of production obligations of the respective working inter- est owners, shall be on the basis prescribed in the unit operating agreement whether in conformity With the basis of allocation herein set forth or otherwise. It is hereby agreed that production of unitized sub- stancrs [rom a partidpstin8 area shall be ai- Iocated as provided herein regardless of whether any Wells are drilled. on any paz• tlculaa part or :tact of the participating area. If any gas produced from one partici- pating area is used for repressuring or recy cl/ctg purposes ut another participating ores, -98- r fl r ~~ r r r l l 1 § 3186.1 the first gas withdrawn from the latter par- ticipating area for sale during the life of this agreement shall be considered to be the gas so transferred, until as amount equal to that transferred shall be so Aro- duced for sale and such eas shall be allocat- ed to the participating area from which ini- tially produced as such area was defined at Lhe time that such transferred gas was fi- nally produced and sold. 13. DEVELOPMENT OR OPERATION OF NONPARTICIPATING LAND OR FORMATIONS. Any' party hereto owning or controlling the working interest in any unitized land having thereon a regular well location may with the approval of the AO. at such party's sole risk costs, sad expense. drill a well to test any formation provided the well fs outside any participating area es- tablished for that formation, unless within 90 days of receipt of notice from said party of his intention to drill the well, the 17nit Operator elects and commences to drill the well in a Like manner as other wells are drilled by the 17nit Operator under this agreement If any well drilled wader this section .by a working interest owner results in Production of unitized substances in paying quantities such that the land upon which it is situated may properly be included is a participating area, such partlcipaLiag area shall be estab- ,Ilshed or enlarged as provided is this agree- ment and the well shall thereafter be oper• sted by the IInit Operator is accordance with the terms of this agreement and the unit operating agreement It any well driIIed under this section by a working interest owner that obtains produc- Lioa in quantities insufficient to justify the inclusion of the land upon which such Weil is situated la a participating att:s, such Well may be operated and produces oy the party drilling the same. subject to the conserve lion requirements of this agreement The royalties is amount or value of production from any such well shall be pacd as specified is the underlying lease and agreements af- fected. 14. ROYALTY SEI'IZ.c."1d.ENT. The IInited States and any State and any royal- ty owner who !s entitled Lo twice in kind a share of the substances now unitized here- under shall be hereafter he entitled Lo the right to take in kind its share of the unit- lzed substances, and IInfit Operator, or the working interest owner is case of the oper- ation of a well by a working interest owner as herein provided for in s~eciai cages, shall make deliveries of such royalty share takes in kind is conformity with the applicable contracts, laws, sad regulations. Settlement for royalty interest not taken in kind shall be made by working interest owners respon- sible therc:or under existing contracts, laws and regulations, or by the 17tut Operator on or before the last day of each month *or Title 43-Public Lands: Interior unitized substances produced during the preceding calendar month: provided howev- er. that nothing in this section shall operate to relieve the lessees of any lead from their respective lease obligations foi the payment of any royalties due under their leaser It gas obtained from lands not subject to this agreement is introduced into any par- ticipating area hereunder, for use in repres• surfing, stimulation of production, or in- creasing ultimate recovery. fn conformity with a plan of development sad oFeation approved hq the AO, a life amount of gas, after settlement ax herein provided for nay gas Lraosterred from any other Participat- ing area and with appropriate deduction for loss from nay cause. may be withdrawn from the formation into which the gas is fa- Lroduced, royalty fm as Lo dry gaa, but not as Lo any Products which may be extracted therefrom: Provided that such withdrawal shall be ati such time as may be provided is the approved plan of development and oper- ation or as may otherwise be consented Lo by Lhe AO as conforming to good petroleum engineering practice; and provided further, that such right of withdrawal shall termi- nate on the terminatton of this unit agree- ment Royalty due the IIaited States shall be computed as provided in 30 CFR Group 200 and Daid is value or delivered !n kind as to all unitized substances on the basis of the amounts thereof allocated to unitized Fed- eral land as provided is Section 12 at the rates specified is the respective Federal leases, or at such other rate or races aS IDaY be authorized by law or regulation and ap• proved by the AO: provided that for leases oa which the royalty rate depends on the daily average production per well, said aver- age production shall be determined in ac- cordance with the opentiag regulations as though each participating area were a single consolidated tease. 15. RENTAL SE'1•lI.>W1~N'T. Rental or minimum royalties due on leases rnmmitted hereto shall be paid by appropriate working interest owners under existing contracts. laws. and regulations. provided that noshing herein contained shall operate to relieve the leases of any land from their respective Les- sees obligations for the payment of any rental or minimum royalty due under their leases. Rental or m;n+**+um royalty for lands of the IInited States subject to this agree- ment shall be Raid at the rate specified in the respective leases from the 17nited States unless such rental or minimum rayslty is waived suspended, or reduced by law or by approval of the Secretary or his duly au- thorized representative. With :expect to aaY lease on non-Federal lead containing provisions which would ter- minate such lease unless drilling operations are commenced upon Lhe land covered -39- L i ~ 17 ~hopter i{-Bureau of land Alanag~m~n! thereby ~~ the time therein spedtied or rcntals are Patd for the privilege of deter- ring such drilling operations, the rentals re• Quired thereby shall, notwithstanding any other provision of Lhis agreement, be deemed to attars and become payable during the term thereof as eateaded by this agreement and until the required drilling operation are commenced upon the land covered thereby. or until some portion of such Iand is included within a participating arcs 16. CON~VATION. Operation hereun- der sad Droductioa of unitized substances shall be coaductcd Lo Provide for the moat economical aced etfideat recovery of said substances Without Wake. as defined by or pursuant to SLate or Federal law or regula- tion. 17. DRAINAGE. The IInit Operator shall rate such meattu'ess as the AO deems aDOro- prfate sad adequate Lo prevent drainage of unitized substances from unitized laced by sells on land not subject Lo this agreement, which shall include the drilling of prouc- Live Well! and which may iaciude the pay- ment of a fair aced reasonable oomDensatory royalty, as determined by the AO. 18. LEASES AND CONT]3ACT5 CON- f'oRD® AND E81'ENDID. The terms conditions, aced DrovLdons of all leases. sttb- teases. aced other wntracts relating W explo- ration. drilling. development or operation !or oil or gas on lands committed to this agreement are hereby eapressiy modified and amended to the extent necessary Co mate the same conform to the provision hereof. but otherwise to remain in full force and effect; aced the parties hereto hereby consent Lhat the Secretary shall aced by his approval hereof. or by the approval hereof by his duly authorized representative. dory hereby establish, alter. Change, or revoke the drilling, producing, rental minimum roy- alty. and royalty requirements of Federal leases committed hereto and she regulations in respect thereto to conform said require- ments to the provision of this agteemeat, and. Without limiting the generality of the !oregoing, su leases, subleases, and con- traces are Darticulariy modified in accord- ance With the following: ~a- The development and operation of lands subject to this agreement under the terms hereof shall be deemed full perform- ance of all obilgation for development sad operation with respect to each sad every separately owned trail subject Lo this agzee- ment, regardless of whether there fs any de- •:eiopment of any particular tract of LhJs unit areL ~b) Dnlltng and producing operation per formed hereunder upon any at the time. such lease shall be extended for 2 years, and so tract of unitized lands avtii be accepted and deemed to be performed upon :rid :or 'he oenefit of each and every [rata of unlt- § 3186.1 ized laced, and ao Ieeae shall be deemed to expire by reason of failure to drlll or produce veils situated oa the laced therein embraced, (c) 3uspenaton of drilling or produ~tsg oD- eration on all unitized lands ptusuaat to di- rection or consent of the AO shall be deemed to constitute stub suspeadon pursu- ant Lo such direction or consent as to each and every tract of unitized Iaad. A suapea- sioa of drilling or producing operation lim- ited to specified lands shall be applicable only to such lands. (d) Each lease, sublease, or contract relat- ing to Lhe exploration, drilling, deveiop- meat, or operation foc oil or gas of lands other than thane of the IInited States com- mitted to this agreement which, by its Leans might eaplre prior to the termination of this agreeseat, is hereby extended beyond any such term so provided therein so Lhst it shall be continued in fuII force and effect for and during the term of this agreeseat. (e) Any Federal lease committed hereto shall contlaue fa force beyond the Lean so provided therein or by Jaw as to the land [bmmitLed so long as such lease remains cabled hereto, provided that production o1 tmiWzed substanoes in paying quantities Ja established in Paying quantities under Llljs unit 8greemenL prior to the ezptration dace of the term of such lease. or in the event actual drilling operations arc commentxd oa unitized land, la accordance with ProvLdoas of this agreement, prior to the end of the primary term of such lease and are being diligently prosecuted aL that Lime. ~ such lease shall be :zLeaded for 2 years, and so long thereafter as oil or gas is produced is paying quantities in accordance with the provision o1 the Mineral Leasfag Ad, as amended. (f) Each sublease Or contract relating to the operation and development of unigzed substances from lands of the IIaited States rnmmltLed to this agreement, which by Ira arms would expire prior Lo the time at which the undezlyhtg lease, as eateaded by the immediately preceding Daragzaph. will expire is hereby extended beyond any such term so provided therein so that it shall oe continued fa fail force aced effed for and during the term of :he underlying lease as such term Is herein extended. (g) The segregation of any Federal lease committed Lo this agmmeat is governed by the following provision 1n the fourth parr graph of see. i7U) of the Mineral Leaaiag Act, a7 amended by the Act of September 2, 1960 (74 Stet. 781-784) (30 II.S.C. Z38U)): "Any [Federall lease heretofore or hereaf- ter committed to aq9 such [unit] plan em- bracing lands Lhat are in part within aced in part outside of the area covered by any such plan shall be segregated into separate .eases as to the lands committed sad the lands not - ~~~ - f i r r r i ~ ~ r CI D i i- D § 3186.1 committed as of ehe eftective date of unit- ization: Proaidtd, hotceoer, That any such lease as to the nonunitized portion shall continue in force and effect for the term thereof but for not less than two years from the date of such segregattoa and so long thereafter as oil or gas is produced in Paying Quantities... •(h) Any lease, other than a Federal ]ease. having only a portion of its lands rnmmitted henW shall be segregated as to Lhe portion committed and the portion not committed, and Lhe provisions of such lease ShaII apply separately Lo suds segregated portions com- mencing as of the eftective date hereof. In the event any suds lease provides for a lump-sum rental payment, such payment shall be prorated between the portiana so .segregated is proportion to the acreage of the respective tracts 19. CONVENANT3 RUN WITH LAND. The covenants herein shall be construed to be covenants *+•*+*++*+g with the laud with te- spect to the interests of the parties hereto and their successors is interest until this agreement terminates, and any grant. Lratls- fer or conveyance of interest in lead or leases subject hereto shall be sad hereby is wnditioned upon the assumption of all privileges sad obligations hereunder by the grantee, transfem, or other successor is in- teract. No assignment or transfer of any working interest, royalty, or other interest subject hereto shall be binding upon Unit Operator unt11 the first day of the calendar month after IInit Operator is furnished with the original, photostatic, or certified copy of the instrument of transfer. Z0. EFFECTIVE DATE AND TERM. This agreement shall become effective upon ap- proval by the AO and shall automatically terminate 5 pears from said effective date useless: <a) Upon appllratloa by the Usit Operator such date of expiration is extended by the AO, or cb) It is reasonably determined prior to the expiration of the fixed term or nay ex- tension thereof that the unitized Iand is in- capable of production of unitized substances in paying quantities is the formatiasss tested hereunder. and after notice of inten- tion to terminate this agreement on such ground is given by the Unit: Operator to all parties is interest at their last known ad- dresses, this agreement is terminated with the approval of the AO. or Ic) A valuable discovery of unitized sub. stances in paying quantities has been made or accepted on unitized load during said ini• teal term or any extension thereof, in which event this agreement shall remain in efieci for such Lena and so long thereafter as tusit- • Optional paragraph to be used only when applicable. Titls 43~-Public Laeds: Interior ized substances can be produced in quaati• ties sufficient to pay for the cost of product frig same from Wells on unitized land within any Dsrticipating area established hereun- der. Should production cease and dillgeat drilling operations to restore production or new production are not in progress or te- wonting within 80 days and production is not restored or should new production not be obtained in Paying quSIItttila aII crommit- ted lands within this unit area. this agree. went will automatically terminate effective the last day of the month in Which the last unitized production occurred, or Id) It is voluntarily terminated as provid- edtn this agreement. Except as noted herein, this agreement may be terminated at any time prior Lo the discovery of unit- ized substances which can be produced is paying quantities by not less than 75 per centum, oa an acreage basis, of the Working interest owners signatory hereto, with the approval of the AO. The Unit Operator shall give notice of any such approval to all parties herto. Voluntary termination may not occur during the first 8 months of this agreement unless at least one obligation Weil Shall hate been drilled III coafaralailce accordance With Section 9. 21. RATE OF PROSPECTING, DEVEL- OPMENT, AND PRODUCTION. The AO is hereby vested With authority t0 alter or modify from time to time, In his discretion. Lhe quantity and rate of production under this agreement whey such quantity and rate are not fixed pursuant t0 Federal or State law. or do not conform to any SLateWide val. untary conservation or allocation program Which is established, rernenized, and gener- aIIy adhered to by the majority of operators is such State. The above authority is hereby :invited to alteration or modifica- tions Which are is the public interest The public interest to be served and the purpose thereof, must be stated in the order of alter- ation or modification. Without regard to the foregoing, the AO is also hereby vested With authority Lo alter or modify from time to time, is his dL4cretioa. the rate of peospect- iag and development and the quantity and rate of production under this agreement when such alteration or modification s in the interest of attaining the conservation objectives stated in this agreement sad is not iA Vlalatian Of nay applicable Federal Jr State law. Powers is the section vested in the AO shall only be exercised after notice to IInit Operator sad opportunity for hea,rirsg Lo be held not less than 15 days from notice. 22. APPEARANCES. Unit Operators shall, after notice to other parties affected. have the right to appear for sad on behalf of any and all interests affected hereby before the Department of the Interior and to appeal from orders issued under the regu• - 1U1 - ~ ~ i C}rapter II-8ureou of Land Managsm~M lotions of said Department or to aPDly for relief from any of said regulations, or in any proceedirtgs relative Lo operations before the Department or any ocher legally conati- ruled authority: provided, however, Lhst any other interested party shall also have the right at its own expense to be heard in any ~~ Proceedlag. 23. NOTICES. All notices, dmumda, or statements repaired hereunder W be given or rendered to the parties hereto shall be in writing and shall be persoaallY deIIvered to the party or parties, or sent by postpaid reg. istered or certified mail, to the las4kaawn address of the party or parties. 24. NO WAIVER OP CERTAIN RIGHTS. Nothing contained la this agmmmt shall be construed as a waiver by any Party hereto of the right to assert any legal or constitutional right or defense as to the va- lidity or invalidity of any law of the State where the unitized loads are located. or of the IInited States, or regulations issued thereunder in any way affecting such party. or as a waiver by way such party of any right beyond his or its authority to waive. 25. IINAVOIDABLE DELAY. Ail obliga- uoos under this agreement repairing the (Trait Operator to commence or continue drilling, or to operate on, or produce unit- tzed substances lrom any of the Iaads cov- ered by this agreement shall be suspended while the IIait Operator, despite the exer- cise of due care and diligence, is prevented from rnmpiyiag with such obligations, in whole or In Dart. by strikes, acts of God, Federal. State, or municipal law or agendes, unavoidable acradmts, uncontrollable delays In transportation. IrrabWty Lo obtain neces- sary materials or e4uipmmt in the open market or other matters beyond the reason- able coatml of the IInit Operator, whether similar to matters herein enumerated or not. 28. NONDISCRIMII~IATION. III connec- tion with the performance of work under this agreement the )7nit Operator agrees to comply with all the provisions of section 204 ~ 1) to (7) inclusive, of ~tecutive Order 11298 X30 FR 12319). as amended, which are hereby incorporated by reference is this agreement. 27. I.oSS OF TIT7.E. In the event title to any tract of unitized land shall fail and the true owner cannot be induced to join to this unit agreement, such tract shall be auto- matically regarded as not committed hereto. and there shall he such read.Justmmt of future casts wad benefits as may be required on account of the lose of such title. In the rcrnt of a dispute as to title to any royalty, warting Interest. or other interests subject thereto. payment or delivery on account therof may be withheld without lisbWty for interest until the dispute is finally set- tled: provided, that. as to Federal laada or leases, no payments of funds due the Drifted § 3186.1 States shall be withheld. but such foods shad be deposited as directed by the AO, to be held as unearned money pending final settlement of the tttie dispute, and then ap- Dlied as eased or returned in accordance with such final settlement IIait Operator as such is relieved from any responsibility for any defect or failure of any title hereunder. 28. NONJOII~iDER AND 3i77iSEQDENT JOINDER If the owner of any substantial interest is s tract within the unit area fails or refuses to subscribe or consent to this agmmmt the owner of the wonting inter. eat to that tract may withdraw the tract from thin agreement by written notice deliv- eled to the Droper BLM office and the IInit Operstor prior to the approval of this agree- ment by the AO. Any oil or gas interests is lands avithiII the unit aces not committed hereto prior to final approval may thereaf- ter be committed hereto by the owner or owners thereof subscribing or consmtiag Lo this agreement and, if the interest !s a working interest by the owner of such in serest also strbscribfnt to the unit operating agreement After operations are commenced hereunder, the right of subaequmt Joinder, ~ Drovlded fn thin section, by a wonting in- terest owner is subJect Lo such reCUirements or approval(s), if any. pertaining LO such Joinder: as may be provided for is the uaiL operating agreement After final approval hereof. Joinder by a nonwondag interest owner must be eonaeated to to writing by the wondng interest owner committed hereto wad responsible for the payment of any benefits that may accrue hereunder to behalf of such nonworking interest A non- working interest may rot be committed to this unit agreement unless the correspond- ing working interest is committed hereto. Joinder to the unit aSreemmL by a working interest owner. at any time, must be aoaom- panied by appropriate Joinder Lo the unit operating agreement la order for the inter- est to be regarded as committed to this agreement Except as may otherwise herein be provided. subsequent Joinders to this agreement shall be effective as of the date of the filing with the AO of duly executed counterparts of all or any papers necessary to establish effective commitment of any in- terest and/or tract to this agreement 29. COIINTERPARTS. This agmment may be executed !n any number of couater- parts, no one of which needs to be executed by all parties, or may be ratified or consent- ed to by separate instrument is writing spe- cifically referring hereto and shall be bind- ing upon aU those parties who have execut- ed such a counterpart ratification, or coa- smt hereto with the same fom and effect as If all such parties had signed the same document. and regardless of whether or not it is executed by all other parties owni.-rg or - i~2 - 1 Y i Y Y Y ~ ~ C~ r r r r r. 1 i r § 3186.1 claiming an interest in the lands within the above-described unit area '30. SQ};RETdDER. Nothing in this agree- ment shall prohibit Lhe exercise by any working interest owner of the right to sur- render vested in aliCll Party b9 any lase. sublease. or operating agreement as to ail or any Part of the lands covered thereby. pro• vided that each party who will or might ao• quire such working interest by such surren- der or by forfeiture as hereafter set forth. !s bound ty the terms of Lhla agreement u as a result of any such surrender. the working interest rights as to such lands become vested 1n any Party other than Lhe fee owner of the unitized substances, said Aart7 may forfeit such rights and further benefits from operations hereunder as to said land to the party nezt is Lhe chain of title who shall bt and become tlse owner of such working interest. If as the result of any such surrender or forteiture working interest rights become vested in the fee owner o1 the unitized sub• stances, such owner may: (a) Aoxpt those working )nttresL rights subject to this agreement and the unit oper- ating agreement: or (b) Lease the portion of such land as i, in- cluded in a partidpating area esiabllshed hereunder subject to this agreement and the unit operating agreement: or (c) Provide for the independent operatlon of any part of such land Lhst 1s not thew tn- ciuded within a partidPSting sees estsb~ lashed hereunder. If the fee owner of the ul)itfud aubatances dons nest aCCxpt the worlCing interest rights subject to this agreement wad the watt oper- ating agreement or lease such Iands as above provided within a maths after the surrendered or forfeited. working interest rights become vested in the fee owner. the benefits and obllgsttona of operations accru- ing Lo such lands under this agre~eat wad the unit operating agreement shall be shared by Life remaining owners of unitized working interests is accordance with their respective working interest ownerships. and such owners of working intetesta shall oom- penaate the fee owner Of unitized sub- stances fn such lands by Daytug sums aquas to the tentala, minimum royalties. and roy- alties applicable to such lands under the lease In effect when the lands were unitized. An sRproprlate aocounting and settlement shall be made for all benefits accruing to or psymenta and expenditures made or in- ctirred on behalf of such surrendered or for• felted worldag interests subsequent to the date of surrender or forfeiture, and psy- 'Optional sections wad subsection. (Agree- ments submitted for final approval should not identify section or provision ass "option- al") Title 43-Public Lends: Interior meat of any moneys found to be owing by such as accounting shall be made as be• tween the parties within 30 days. The exercise of any right vested in a work- ing interest owner W reassign such working interest t0 the party from whom obtained shill be subject to the same conditions as set forth in this section in regard to the ex- etrJse of a righC to surrender. '31. TA3;~S. The working interest owners shall render and pay' for their acxount wad the aoeount of the royalty owners all valid taxes on or measured by the unitized sub- staacea in s*sd under or that may be pro• doted. gathered wad sold from the land cov- ered by Chia agreement after its effective date, or upon the pracxeds derived there- from. The working interest owners on each tract shall and may Charge the proper pro- portion of said taxes to royalty owners having interests is said-tract, and may cur- rently retain and deduct a sufficient amount of Lhe unitized substance or deriva- tive producL4, or net proceeds thereof. from the aIIocated share of each royalty owner to secure reimbursement for the taxes so paid No such Lewes shall be charged Lo the 17nitEd States Or the State Of ~ Or LO any lessor who has a contract with his lessee which requires the lessee Lo Pay such taxes 'SZ NO PARZTTEFtS~. IC is expressly agreed that Lhe relation of the parties hereto is that of independent contractors and nothing contained In this agreement, expressed or implied, nor any operations conducted hereunder, shall create or be deemed Lo have created a partnership or as• sadatioa between the Parties hereW or any of them. IN WTTNES.3 W1~REOF, the parties hereto have caused this agreement W be ex- ecuted wad have set opposite their respec- tive names the date of ezecutSon. IInit Operator Worsting Interest Owners Other )Merest Owaera Geszervl Gseidelfsees 1. Executed agreement to be legally rnm- Dlete. Z. Agreement submitted for approval must contain Exhibit A and B in aoc;orosace with models shown is t t 3186.1-1 and 3186.1-2 of this title. 3. Consents should be identified (in pencil) by tract numbers as listed in Exhibit H and asembled in that order as far as practical IInit agreements submitted for approval shall include a list of the overriding royalty ~ interest owners who have executed ratifica- tions of the unit agreement. Subsequent joinders by overriding royalty interest owners shall be submitted in Lhe same -103- • • i i' Chapter 11-Sureou of Land Management matuter. except each must include or be ac- rompanied by a statement that the corre- spondittg working interest owner has rna- sented in writing to such joinder. Original ratifications of ovemding royalty owners will be kept on file by the Unit Operator or his designated agent 4. AA leases held by option should be noted on Exhibit B with an explanation as to the type of option. Le., whether for oper- ating rights only. for full leasehold record title. or for certain interests to be earned by peffOrtnance. In all II15CaIICes, OPLIOIIee COtII milting such intetesr is expected to exer- cise option promptly. 5. All owners of oII sad gas interests must be invited to join the unit agreement, and statement to that effect must accompany executed agreement, together with summa• rY of results of such invitations. A written reason for all interest owners who have not joined shall be furnished Dy the unit opera- tor. 8. In the event fish sad wildlife lands are included. add the following as a separate section: ••WIIdlife Stipulation. Nothing is this unit agreement shall modify the special Federal lease stipulations applicable to lands under the jurisdiction of the United States Fish and Wildlife Service." 7. In the event National Forest System lands are included within the unit area, add the following as a separate section: "Forest Iand Stipulation. Notwithstand- ing any other terms sad conditions con- tained is this agreement oII of Lhe stipula• [ions and conditions of the Individual leases between the United States and its lessees or their successors or assigns embracing lands ~sithin the unit area included for the protec- tion of lands or functions wader the jurisdic- tion of the Secretary of Agriculture shall remelt[ is full force and effect the same as though this agreement had not been en- tered into, and no modification thereof is authorized except with Lhe prior rnnsent in :~7iting of the Regional Fotester, United States Forest Service, , 8. In the event National Forest System lands within the Jackson Hole Area of Wyo- wing are included within the unit area ad- ditional "special" stipulaciotLS may be re- quired to be included in the unit agreement by the U.S. Forest Service, including Lhe Jackson Hole Special Stipulation. 9. In the event reclamation loads are in- cluded, add the following as a sew separate section: "Reclamation Lands, Nothing iA this agreement shall modify the special, Federal § 3186.1 lease stipulations applicable co lands under the jurisdiction of the Bureau of Rerlama- tion." 10. In the event a powersile is embraced in the proposed unit area. the following sec- tion should be added: "Powersite. Nothing [a this agreement shaII modify the special, Federal lease stipu- lations applicable to lands under the juris- diction of the Federal Energy Regulatory Commission." 1L Ia the event special surface stipule. lions have been attached to any of the Fed- eral oil sad gas leases to be included, add the following as a separate section: "Special surface stipulations. Nothing in this agreement shall modify the special Fed- eral lease stipulations attached to the indi- vidual Federal oil leases." 12. Ia the event State lands are included in the pn7posed unit area, add the appropn- ate State Lands Section as separate section. (See f 3181.4(a) of this title). 13. Ia the event restricted Indian lands are involved, consult the AO regarding ap- Dropriate eequirements under 4 318L4(b) of Chia title. Cxasatcessox-Dsratamreztosr Pursuant to the authority vested in the Secretary of the Interior, under the Act ap- proved February 2S, 1920, 41 Stet. 43T, as amended, 30 U.S.C. sec. 18I, et seq., and del- egated to the appropriate (Name and TYLIe of authorized officer. BLM) Service under the authority of 43 CFR 3180, I do hereby: A. Approve the attached agreement for the development sad operation of the Unit Area, State of B. Certify and determine that the unit plan of development and operation coatem• Plated in the attached agreement is neces- sary and advisable Ia the public interest for the purpose of more properly conserving the tfatural resoutees. C. Certify and determine that the drilling, Producing, rental minimum royalty, sad royalty requirements of all Federal lease committed to said agreement are hereby es- tablished altered, changed, or revoked to conform with the terms and condiCons of this agreement. Dated !Name and TYtle of authorized officer of the 5ttresu of land Management) I48 FR 28786, June 10, 1983. Redesignated and amended at 48 FR 36587. 36588. Aug. 12, 19831 - 104 - 1 r ~I i ~ ~ § 3186.1-T Tifte 43-Publie Londs: Interior 6 31 t6.1-11odN tc:ltlblt "A" Compsnv None Exhibit A Swsn Unit Ares • Campbell County, Wyoming R. 59 W. DEER_ FR057 FROST O ~ 6.36.88 6-30-87 6.30-81 5.37 2 - 16 7 15 O 14 O ` $ 13 r - r 7820 W - $d•70 W =8470 mi FR057 tTH FROST HOLDER s 6.30.85 5.31 Z 6.30-87 2-28-86 ~-- 21 O3 22 9 23 O 24~--- s W - 41345 ..Cook W -8470 1--- W - 53970 FROST DEER et al. OEER OLDS ~ 6.30.85 12.31.85 2.28~6~--- ZS ~3 27 4~ 26 ~ s 2S t DEER ~ 2-31-8r 5 i--- w • 41345 w • 41679 w - 52780 w - 52780 i DEER et al. DEER DEER DEER s 6.30.85 6•~0 Z 7-30.81 6.30-88 --- (4 O 7 ~ `'' 34 35 35 s ~-- W - 41679 ben et W - 9123 78 •620 s O Means trxt number as fisted on Exhibit B a Publie Land State Land ® Patented Land L 54 N. Scale -Generally 2" ' 1 mile. include xreage for a!1 irregular sections and tots. - 105 - 9:118fi.1-': NuArl EXhihH "II" igct NO. Dascrplan of knd Aq n Ihr use a TS/N-R59W P.M feoaral Land 1 SOC. 11: All_ ..............................._. .., Sot. 15: Aq ........................................ Sec. 23: Aq ........................................ 2 Sec. 35: W ........................................ 3 Sec. 21: Aq ........................................ Sec. 28: Aq ........................................ 1 Sac. 27: Aq ........................................ Sec. 33: Aq ........................................ 1 S Sec. 28: Aq :....................................... 1.., Sec. 2S: Lob 3,1, SW Y.. WyiSEY~ p 8 Sec. 2/: Lots 1,2,3,LWY., WSSE15 O~ Sac. 25: Lots 1,2.NW Y., WiSNE// 0 Fad«al Uacb 7,017.30 acre I 60.78% of urul rise. Stile lend 7 Sat 18: Aq ........................................ Sec. 30: Lob 1, 2, 3, 1, W tis. W ~Aql. 1 Slab Irecl 7,280.80 scree « 12 of unit ueo. Patented LerW 8 Sac. 13: L«e 1, 2. 3, 1, W!1,, W~ IAgI. 0 Sec. 22: AY ........................................ 10 Sec. 31: Atl ........................................ 3 Prbnted vscb 1,621.20 acu 16.75% of unit ores. EXHIBIT B-SWAN UNIT AREA, CAMPBELL COUNTY, WYOMING __.__ ~, a ease _______ SwiW No. end eapvelion date a IBeW Buic royalty snd ownerervP puCaMYQa Leases a rac«d OvanWtng royaty end pucenbge W«kmp interact end percentage 6m _~__ _ ____-_-_._ ......... 1.820.00 W-8170. 8-30-81........ U.S.: Aq ......................... T.J. Cook 100%.......................... T.J. Coots 2%............... Froel Oil Co. 100%. .......... .......... 810.00 W-8123. 7-30-81........ U.S.: AN ......................... O.M. Odom 100%....................... O.M. Odom 1%........... Oaer Oil Co. 100%. .......... 1,200.00 W-11315. 8-30-85...... U.S: AY .........:............... Mer Pen SO%.............................. Mez Pen 1%................ Frorl OY Co. 100%. .......... ...................... ........................................ ........................................ Sem SmW b0%.......................... Sem Smrq 1%............. .......... 1,280.00 W-11670, 8-30-85...... U.S.: Aq ......:.................. AI Preen 100%................-.......... AI Preen 2%................ Dear Oq Co. 50%. .......... ...................... ....................................... ......................................... ........................................................ ......................................... Oaer Oil Co. 60x. .......... OBI.bO W-52]60 ....................... U.S.: Aq......................... Daa Oil CO. 100%...................... J.O. Goodin 2%........... Dasr Oq Co..100%. .......... (Aq) . .......... 065.80 W-63070, 2-26-88...... U.S.: Aq ......................... T.H. Holder 100%....................... ......................................... T.N. Holder 100%. 1 « ......... 1.280.80 857130, 8-31-BS..... Stile: Aq ....................... Oaer OJ Co. 100%...................... T.T. Timo 2%............... Oeer 00 Co. 100%. iEiti, Iex IE1. 011.20 8-2-7/ .......................... J.C. Smtn: 700%........ Dos Oq Co. 100%....................... ........................................ Oa 01 Co. 100%. .......... 610.00 0-15-70 ........................ T.J. Cook: 100%......... W.W. Smith 100%....................... Sun Sparta 1%........... W.W. Smith LOOS. .......... 010.00 0-1-ib .......................... A.A. Aben: 75%. L.P. Oau Oil Co. 100%...................... ......................................... Dear Oq Co. 100%. Cur: 25%. e« ~~w• r~ ~...r. ~.~•r..v scree n emus wrl use. n Y O '~ A c S C O r O d O O 10 61 4 w tO9 W r QD Or N • • § 3186.2 $ 3188.2 Mode! collective bond. Cottnersvs Coaroanra 3vassr Bozo Snow sII men by these presents. That we, (Name of unit operaWr). signing as principal, for and on behalf of Lhe record owners of unitized substances non or here alter covered by the unit agreement for the (Name of unit). approved (Date) (Name and address of Surety). as Surety are lofaLly and severally held and firmly bound unto the United States of America to the sum of <A,mount of bond) Dollars„ lawiui moan of the United States. for the use and benefit of sad Lo be paid to the United States and any entryman or patentee of say portion of the unitized land hereto-tore entered ar patented with the rrservatioa of the ell or gas depaaits Lo the IIaited States. for which payment. well and truly to be made. we bind ourselves, and each of ua, and each of our heirs, eaecutora, administrators, suxessors. and ensigns by these Dt'PSeats The condition of the foregoing obligatton Is such. that. whereas the Secretary of the Interior on (Date) approved under the provisions of Lhe Act of February 25. 1920. 41 Stst. 437, 30 U.S.C. secs. 181 tt sea, as amended by the Ad of August & 1948, 80 Stet. 950, a unit agreement for the develop. meat and operation of the (Name of .unit and Stater and Whereas said Principal and record owners of unitized subsrsncea. pursuant to said unit agreement. have entered into certain cov- enants and agreements as set forth therein, under which operations are to be conducted: and Whereas said Principal as Unit Operator has assumed the duties and obligations of the respective owners of unitized substances as defined is said unit agreement; and Whereas said PrladDal and Surety agree to remain bound in the full amount of the bond for failure W comply with the terms of the unit agreement, and the payment of rentals. minimum royalties, and royalties due under Lhe Federal leases committed to said unit agreement: and Whereas the Surety hereby waive any right of notice of and agrees that this bond may remain in force and effect notwith- standing: (a) Any additions to or change !a the own- ership of the unitized substances herein de scribed: (b) Any suspension of the drilling or Dro- duMng requirements or waiver, suspension, ar reduction of rental or minimum royalty payments or reduction of royalties Pursuant to applicable lava or regulatioaa thereun- der: and Whereas said Prirrdpal and Surety agree to the payment of compensatory royalty under th- -rgulations of the Snterior De • 7if1~ 43-PuWie Lands: Interior parLment In lieu of drllllng necessary offset wells !n the event of drainage: and Whereas nothing herein cantataed shalt preclude the IInited Staten (from requiring an additional bond at any time when deemed aeceasat9): Now. therefore. if the said Principal shall faithfully comply with all of the provisions of the abovesndentified unit agreement and wtth the terms of the leases committed thereto, then the above obligation is to be of no effect: otherwise to remain to full force and virtue. Signed. sealed. and delivered this - day of , is the presence of: Witnesses: (principal) (Surety) 9 3188.3 Model for designation of euccea- wr unit oQeraWr b~ working internt owners. Desisnation of successor Unit OperaWr Unit Ares. County of .State of . No. This indenture, dated as of the - day of - 19-, by and between -. hereinafter designated as "First party:' and the owners of unitized working interests. ° hereinafter designated as ..Second Parties... Witaesseth: Whereas under the provisions of Lhe Act of February 25, 1920.41 Stet. 437. 30 U.S.C. see. 181, et sta. as amended by Lhe Act of August 8, 1948. 80 Scat. 950, the Secretary of the Interior, an the day of 19-, aDDr'ove a unit agreement Unit Area. wherein is designat- ed as Unit Operator, and Whereas said has resigned as such Operator' and the designation of a suxes- sor Unit Operator is hoar tequtred pursuant to the terms thereof: and Whereas Lhe First Party has been and hereby is designated by Second Parties as Unit Operator, and said First Party 3esnYs to assume all the rights, duties. and obliga- tions of Unit Operator under 'i:e said unit agreement: Now, therefore, in consideration of the premises hereinbefore set :orth and the promises hereinafter stated. the ?test Party hereby covenants and agrees to fulfill the duties and assume the obligations of Unit Operator under and Pursuant to all the terms of the unit agreement, rsrd t_he Where the designation of a successor Unit Operator is required for any reason other than resignation. such reason shall be substituted for the one stated. - 107 - • Chapter II-8ureou of Land Management Second parties covenant and agree that, ef- fective upon approval of this indenture by the (Name and Title-of authorized officer, SL.IS) First Party shall be granted the ex- clusive right and privilege of exercising any and all rights wad Privileges as Unit Opera- tor, pursuant to the terms and conditions of said umt agreement: said Unit agreement being hereby incorporated herein by refer- ence and made a part hereof as fully wad ef- fectively as though said unit agreement were expressly set forth in this instrument. in witness whereof. the parties hereto have executed LhLs instrument as of the date hereinabove set forth. (Witnesses) (witnesses) (First Party) (Second Party) I hereby approve the forregoing tndeature dp~ahng sa Unit Operator under the unit agreement for the Unit Area, this -day of , 19=. Authorized officer of the Bttresu of Load Management. ! 3186.4 A1ode! foe change in unit operator b~ assignment Change is IIntt Operator Unit Area. County of ,State of , No. -. ThLt Indenture, dated as of the -day of 19-, by and' between hereinafter dd- tgnsted as "First Party." and herela- after designated as "Second Party." Wltnesseth: Whereas under the provisions of the Act of February 23, 1920, 41 3LaL 434 30 Q.S.C. secs. 181, et cep., as amended by the Act of August 8, 1948, 80 Stat. 950, the Department of Lhe Interior, on the -day of -, 19-, approved a unit agreement for the Unit Area, wherein Lhe First Party is designated as IInlt Operator, and Whereas the Flat Party desires to trans- fer. assign. release, and qulLClaim, and the Second Party desires to assume all the rights. duties and obligations of Unit Opera- tor under the unit agreement: and Whereas for sufficient and valuable rnn- s~deration, the receipt whereof is hereby ac- knowledged, the First Party has trans- ferred, conveyed, and assigned all his/its rights under Certain operating agreements involving lands within the area set forth to said unit agreement unto the Second Party: Now, therefore, in consideration of the aremises hereinbefore set forth. the First Party does hereby transfer. assign. release, and Quitclaim unto Second Party all o[ First Party's rights. duties, and obilgations as Part 3200 Unit Operator under said unit agreement: and Second Party hereby accents this assign- ment and hereby coveaanta and agrees to fulfill the duties and assume the obligations of Unit Operator under and pursuant Lo all the terms of said unit agreement to the full extent set forth in this assignment, etfectMe upon approval of thLt indenture by the (Name and 'Title of authorized officer, BLM): said unit agreement being hereby in- corporated herein by reference wad made a part hereof as fully and effectively as though said unit agreement were expressly set forth in this instrument. In witness whereof, the parties hereto have executed this instrument as of the date hereinabove set forth. (Witnesses) (Witaesse~) (First Darcy) l3econd Party) I hereby approve the foregoing indenture designating as Unit Operator under the unit agreement for the Unit Area, this -day of . 19-. Authorized officer of the Bureau of Land Management Group 3200-Geothentta! Resources Lansing Nora The information collection resuire- meats contained is Parts 3200. 3210, 3220, 3240, 3230 sad 3280 of Group 3200 have been approved by the Office of Managr meat and Budget under 44 US.C. 3304 and asatgned clearance number 1004-0038, 1004-0083, 1004-0074, 1004--0132 wad 1004-0141. The tnformstion is being col- lected to permit the authorized officer to determine whether an applicant is qualified to hold a lease for the expWratioa, deveioD- meat and utilization of geothermal re- sources on the public lands The informa- tion will be used to mats this determina- tlan. Aresponse la required Lo obtain a ben- efit. I48 FR 40889, Sept. 12. 19831 - 108 - ~I ~ ~ ATTACHMENT A-2 DESCRIPTION OF AREA OF REVIEW The area of review for this permit is an area described as follows: A circular area having radius of 1320 feet and whose center point is located at 575' NSL and 2246' WEL, Section 31, T.5N., R.11W., Seward Meridian. Said area being located primarily in Section 31, T.SN., R.11W., S.M. ATTACHMENT B WELL MAP - AREA OF REVIEW 40 CFR 146.24 (a) 2 Map ~~1 shows the area of review and all major surface facilities pertaining to the area of review. Map ~~1 also shows all intake and discharge structures. R~2w ~ n iiw ~~ m h .a-~~Ro-w-w~ II N fo a i + + ~. ~x ..co -. ~ 1 .wu w \ ' .. y. _ ~;oo,~,,, ~, 71 / R 9 ~~0~ PROPOSED AREA _ ' - ~ OF REVIEW ~ ~ -».. ~ ~ ~w ~j ( ° .o. ~ ~~' T-~_ ~ ~...a L .1_ ~-J ~- T ' T -T _ ~,~~~ , ~ iRfAP ~ .~~~~.~ ~ ~ ~ nu .b~ f 1 ~yM~-0 ~ n~ I it = I _ ,..~.. ___. ~ w7.w ~ .~-~... '~~' h J/y X .~q.r .wa .:... ~ ~~~-~~. ® ~ t o.. u u.six '/ I .o~ '° t T r N r~ ~ ------ ~~ ~, ~ ~~ ". _ I ~ :,. ~.~«~» R ~x w I^ un~sn KENAI 8A3 FIELD WE~.L WD-1 .....~ ~ r ATTACHMENT C WELL DATA There are currently 7 wells with locations within the area of review. Attachment C-1 is a list of these wells and related well data. Well WD-1 is the only well with completions in the injection zone. Attachment C-2 is the E.P.A. form "Inventory of Injection Wells", as noted under 40 CFR 144.26. As shown on the inventory, Well WD-1 is the only injection well at the Kenai Gas Field. WELL DATA SPUD COMP. DEPTH WELL API NUMBER DATE DATE SURFACE LOCATION BOTTOMHOLE LOCATION TVD STATUS KU-11-6 50-133-10088 06/17/65 06/30/65 410'N- 2090'W f/SE/Cr.,Sec.31,T5N,R11W,SM. 526'8- 495'E f/NW,Cr.,Sec. 6,T4N,R11W,SM. 3,988 Prod. KU-14-32 50-133-20351 02/16/82 03/14/82 740'N-1759'W f/SE/Cr.,Sec.31,T5N,R11W/SM. 955'N- 930'E f/SW,Cr.,Sec.32,T5N,R11W,SM. 4,897 Prod. KU-21-6 50-133-10090 05/06/65 05/24/65 515'N- 2089'W f/SE/Cr.,Sec.31,T5N,R11W,SM. 594'S-1975'E f/NW,Cr.,Sec. 6,T4N,R11W,SM. 4,890 Prod. KU-34-31 50-133-10097 10/28/59 11/23/59 622'N-2144'W f/SE/Cr.,Sec.31,T5N,R11W,SM. 622'N- 2144'W f/SE/Cr.,Sec.31,T5N,R11W,SM. 5,809 Prod. KDU-5 50-133-20319 08/29/78 12/05/78 692'N- 1720'W f/SE/Cr.,Sec.31,T5N,R11W,SM. 715'S- 3051'E f/NW,Cr.,Sec. 6,T4N,R11W,SM. 9,695 Prod. KDU-6 50-133-20320 12/10/78 03/04/79 850'N -1743'W f/SE/Cr.,Sec.31,T5N,R11W,SM. 3469'N- 2059'E f/SW,Cr.,Sec.32,T5N,R11W,SM. 9,808 Prod. KU-WD-1 50-133-20345 08/13/82 08/22/82 606'N- 2297'W f/SE/Cr.,Sec.31,T5N,R11W,SM. 575'N-2246'W f/SE,Cr.,Sec.31,T5N,R11W,SM. 3,300 Inj. 1567p MS/cw:6/21/85 a -~ a 3 m z J S OFFICE OF DRINKING WATER Y (~ fT~ f` aY `~ yOe~~ II. FACILITY I.D. NUMBER ~ ®`yr~~..~~ INVENTORY OfF INJECTIONrWELLS 0 6 1 7 8 5 the eufhorlfy o! the S.le DrlnklnQ Wafer Ail,) IV, FACILITY NAME AND LOCATION •. A' ~_ ', '~ of - ' - °'_ ~ y ~ . t. z+: ~+ t' i ., ~ e ' r• +„ ' I ~ ~y' r . ~.l'. ' 'e ! 017 ?` b~. r C A. NAME "!1 E N A I GAS F I E L D r3~~ _ _C D. STREET AUDRESS OR ROUTE Nl1MDER 0 2 P O B O X 7 6 0 0 tv _ ~ C _ C. CITY OR TOWN O.ST. E. ZIP CODE F. COUNTY G. INDIAN LAND (mark 'X') 0 3 K E N A I T f ~fT~I~Ti-I~T A K , - r. - _ V- LEGAL CONTACT: TYPE, NAME, PHONE, MAILING ADDRESS, AND OWNERSHIP ' ...• / .. i.:,.q,i '~ , „f,,~ t ,L,, y, „ C A. TYPE (mark 'X') D. NAME (lest, /irsQ 6 middle IrtlNel) 0 4 ^ 1''~,'`.',f11OWNER U N I O N O I L C O M P A N Y O F C A L I F O R N I A 17 2. OPERATOR t~ to I'/ to _ C D. ORGANIZATION C ~ E. STREET OR P.O. BOX U 1. OfLfTION j. i1g3T TIME ENTg1l ^ 3. CHANGE OF EMTIeT 17 C. PHONE (~re• code ~ C F. CITY OR TOWN G. ST. H. 21P CODE 1. OWNERSHIP('X' one) 0 7 A N C H O R A G E A K 9 9 5 0 2 ~-? P•,PRIV ATE p M, PVDLIC U O.OTNE.R (epecl(y) t~ 16 16 VI. WELL INFORMATION ' , ' ~O It ~i ~) - a7 U 3. STATE e ea , F. FEDERAL . ~ ,.. r ., ,. ., .,., ~, , ,,, .,;,, i;. .. N _ WELL OPERATION STATUSt UC =UNDER CONSTRUCTION AC =ACTIVE PA =PERMANENTLY ABANDONED AND APPROVED BY STATE TA =TEMPORARILY ABANDONED AN =PERMANE NTLY ABANOONEO•ANO NOT APPROVED BY STATE C A. CLASS B. TOTAL C. WELL OPERATION STATUS ANO TYPE NO, OF WELLS UC AC TA PA AN 0. CONHENTS(opflon~q 0 ~ I - D ' WD e - - ~, s - - ~ - i ~. _ -1 : ~ ~ • r ~ - x _ zz - ze z~ - z ,e _ 3e ' 1 0 _ , I r , ^ u to is tl le _ zt :z - ze z~ _ zl ze _ ~o tt 'ta t~ - Se ~ , . 1 1 ~ - 1 A 1 i 8 t ~ le - - - t _ e _ o ~1 - _ i I ~ ~ ' ' ~ 1 ~ I ` a - _ - _ i' - : `13 . r3 II - I A - ~ - - - - u _ ~~ ti tPA FYfe1 ~soo-~a 111-~91 - - - - - 0 1 N Attachment E Underground Sources of Drinking Water The underground sources of drinking water for the Kenai Gas Field below 1300 ft. (subsurface) have been exempted for Class II activity. Attachment E-1 is a copy of 40 CFR 147.102 (b)(1)(C) which exempted the aquifers. Well WD-1 is injecting deeper than 3000 ft. (subsurface). Due to the above exemption and the depth of injection, there are no underground sources of drinking water that can. be affected by injection from Well WD-1. Refer to attachment G-1 for geological information on the confining zones between the injection zone and possible USDW not exempted.. 132:0502. C L n L f. r L ~l n C ATTACI-N~NT E-1 FEDERAL REGULATIONS made a part of the applicable UIC pro- gram under the SDWA for the State o Alabama. This incorporation by reference was approved by the Director of the Fed- eral Register on June 25, 1984. (1) Code of Alabama 1975, §§ 9-17-1 through 9-17-110 (1980 and Supp. 1983 ); (2) State Oil and Gas Board of Ala- bama, Oil and Gas Report 1 (supple- mented) (1981), General Order Pre- scribing Rules and Regulations Governing the Conservation of Oil and Gas in Alabama (Order No. 76-100) as amended by Board Order No. 82-96 (May 14, 1982) amending Rule E-4). (b) The Memorandum of Agreement between EPA Region IV and the Alabama Oil and Gas Board, signed by the EPA Regional Administrator on June 16, 1982. (c) Statement of Legal Authority. "State Oil and Gas Board has Authority to Carry Out Underground Injection Con- trol Program Relating to Class II Wells as Described in Federal Safe Drinking Water Act -Opinion by Assistant Attorney General," May 28, 1982. (d) The Program Description and any other materials submitted as part of the application or as supplements thereto. §147.51 State-administered program - Class I, III, IV and V wells The UIC program for Class I, III, IV and V wells in the State of Alabama is the program administered by the Alabama Department of Environmental Manage- ment, approved by EPA pursuant to Sec- tion 1422 of the SDWA. Notice of this approval was published in the Federal Register on August 25, 1983 (48 FR 38640); the effective date of this program is August 25, 1983. This program consists of the following elements, as submitted to EPA in the State's program application: (a) Incorporation by reference. The re- quirements set forth in the State statutes and regulations cited in this paragraph are hereby incorporated by reference and made a part of the applicable UIC pro- gram under SDWA for the State of Ala- bama. This incorporation by reference was approved by the Director of the Federal Register on June 25, 1984. (1) Alabama Water Pollution Control f Act, Code of Alabama 1975, §§22-22-1 through 22-22-14 (1980 and Supp. 1983); (2) Regulations, Policies and Proce- dures of the Alabama Water Improve- ment Commission, Title I (Regulations) Rev. December 1980), as amended May 17, 1982, to add Chapter 9, Underground Injection Control Regulations (effective June 10, 1982), as amended April 6, 1983 (effective May 11, 1983). (b) The Memorandum of Agreement between EPA Region IV and the Alabama Department of Environment Management signed by the EPA Regional Administra- tor on May 24, 1983. (c) Statement of Leal R uthority. (1) "Vllater Pollution-Public Hea'.th-State has Authority to Cary Out Underground injection Control Frogram Described in Federal Safe Drinking Water Act- Upiaion by Legal Counsel for the Water Improvement Commission," June 25, 1982; (2) Letter from Attorney, Alabama Water Improvement Commission, to Regional Administrator, EPA Region IV, "Re: AWIC Response to Phillip Tate's (U.S. EPA, Washington) Com:.:ents on AVJIC's Final Application for Class I, III, IV, and V UlC Program," September 21, 1982; (3) Latter from Alabama Chief Assistant Attorney General to Regional Counsel, EPA Region IV, "Re: Status of Independent Legal Counsel in P.labama Water Improvement Commission's Underground Injection Control Program," September 14, 1982. (d) The Program Description and any other materials submitted as part of the application or as supplements thereto. Subaart C-Alaska § 147.100 State-administered program. [Reserved] §147.101 EPA-administered program. (a) Contents. The UIC program for the State of Alaska is administered by EPA. This program consists of the UIC program requirements of 40 CFR Parts 124, 144, and 146, and additional requirements set forth in the remainder of this subpart. Injection well owners and operators, and EPA, shall comply with these requirements. Environment Reporter (b) Effective date. The effective date of the U[C program for Alaska is: June 25, 1984. §147.102 Aquifer exemptions. (a) This section identifies any aquifers or their portions exempted in accordance with §§144.7(b) and 146.4 of this chapter at the time of program promulgation. EPA may in the future exempt other aquifers or portions, according to applica- ble procedures, without codifying such ex- emptions in this section. An updated list of exemptions will be maintained in the Re- gional otfice. _ __ (b) The following aquifers are exempted in accordance with the provisions of §§144.7(b) and 146.4 of this chapter for Class II injection activities only: - (1) The portions of aquifers in the Kenai Peninsula, greater than the indicat- ed depths below the ground surface, and described by a !~a mile area beyond and lying directly below the following oil and gas producing fields: (A) Swanson River Field-1700 feet. (B) Beaver Creek Field-1650 feet. (C) Kenai Gas Field-1300 feet. (2) The portion of aquifers beneath Cook Inlet described by a '/a mile area beyond and lying directly below the fol- lowing oil and gas producing fields: (A) Granite Point. (B) McArthur River Field. (C) Middle Ground Shoal Field. (D) Trading Bay Field. (3) The portions of aquifers on the North Slope described by a ;'a mile area beyond and lying directly belotiv the Ku- paruk River Unit oil and gas producing field. §147.103 Existing class I, II (except en- hanced recovery and hydrocarbon storage] and II[ wells authorized by rule Maximum injection pressure. The own- er or operator shall limit injection pressure to the lesser of: (a) A value which will not exceed the operating requirements of §144.28(f)(3)(i) or (ii) as applicable; or (b) A value for well head pressure cal- culated by using the following formula: Pm=(0.733-0.433 Sg)d where c r ~ V, /l. i L/ [Sec. 147.103(b)] 152 ATTACHMENT G GEOLOGICAL DATA ON INJECTION AND. CONFINING ZONES (CLASS II) 40 CFR 146.24 (a) 5, 6 Attachment G - 1 is a geological report on the formations underlying the Kenai Gas Field. ATTACHMENT G-1 . • GF_OLOGIC SUMMARY AND SHALLOW FORMATION WATER SALINITY STUCY KENAI UNIT WD ~~1, SECTION 31, T5N, R11W, SM KENAI GAS FIELD, ALASKA ' A shallow formation water salinity study was conducted in Union's, KU WD ~kl well, located in the Kenai Gas Field, Alaska. The purpose of this study was to determine the formation water salinities in the relatively shallow sand interval which underlies the Pleistocene glacial deposits and overlies the Pliocene. Lower Sterling Formation gas reservoirs. In addition, a subsurface evaluation was conducted to determine the stratigraphic relationship of the ' freshwater aquifers and the disposal well sands in ,the Kenai Gas. Field. Results and Conclusions: ' The sandy interval in KU WD ~~1, between 460' to 3273' (TVD) contains calculated equivalent salinities ranging from 1100 to 2600 ppm NaCl. (Plate 1.) It is believed these calculated salinities represent a minimum baseline ' in equivalent ppm NaCl. In addition, the cement bond log (CBL) indicates good cement between the seven-inch (7") liner and the formation, indicating that "channeling of injected fluids behind pipe" into other intervals is not occurring. Annual temperature logs in KU WD 4~1 show the fluids are being injected only into the ' perforated intervals in KU WD ~kl. Plates 2 and 3 (north-south and east-west geologic cross-sections) show the lateral continuity of the impermeable shale intervals. These shale intervals ' act as upper and lower confining impermeable units in the sand-rich Sterling Formation. The shales vary in thickness from three to 40 feet. The data available is therefore conclusive that the shales are areally widespread and ~,' ' prevent vertical fluid communication between sandstones. Plate 4 shows the stratigraphic relationship of the freshwater aquifers and ' impermeable claystone intervals in the Pleistocene strata overlying the Sterling Formation. The freshwater aquifers are generally fluvial channel sands bounded by lacustrine claystones. A major unconformity lies at the base of the Pleistocene strata (Top Pliocene Sterling Formation). This ' unconformity also acts as a barrier between the freshwater zone and the more highly saline Sterling Formation sands. Procedures and Methods: Only a Dresser Atlas Dual Induction Focused Log and Acoustic Cement Bond Log were run in KU WD ~~1. The sediments below the base of the glacial deposits (at 417' MD, Annotated Log, Plate 1) are in the upper and middle part of the Sterling Formation. These sediments are sands, siltstones, shales and = occasional thin-bedded coals. The sands are highly unconsolidated and ' generally uncemented. Shaded intervals on the Type Log indicate impermeable shale zones. Waste water is currently being injected in these Sterling Formation sands at the base of the wellbore from 3030'-3160', 3178'-3193', and 3235'-3250'. ' ~ • Log analysis of the DIFL in KU WD ~~1 indicates the shallow focused resistivity reading is consistently higher than the deep induction curve. This suggests the shallow focused curve is reading closer to the true Rxo value, the flushed zone resistivity of the formation. No hydrocarbons are present in this ' interval. Using Schlumberger's Chart SW-1 (Exhibit A), and assuming the average porosity ' of those sands to be 35% (based on detail log analysis of the Sterling Formation Gas Reservoirs), Rw values in these sands were determined. Maximum bottom hole temperature in the well was 100°F. Using a 35°F mean ' surface temperature, the thermal gradient in this well was calculated to 1.96°F/100'. By plotting both the Rw and formation temperature values on Schlumberger's Temperature and Resistivity Chart Gen. 9 (Exhibit B), an estimate of the formation waters' salinity was derived and is shown on the accompanying Type Log, KU WD ~~1. (Plate 1.) Also included is a detailed well completion schematic for the Union, KU-WD ~~1 well (Exhibit C). Geologic Summary: The Sterling Formation of Pliocene Age is currently the disposal interval for the injected fluids in KU-WD X61 in the Kenai Gas Field. This formation is over 3500 feet thick in the area with the lower +1100 feet containing commercial gas producing reservoirs. The Sterling Formation is made up of a thick sequence of massive sandstones and conglomeratic sandstones with impermeable interbeds of mudstone, siltstones and thin coals. This sequence was deposited by moderately large, meandering streams which were part of the main drainage system of the Cook Inlet Basin. These moderately large stream courses deposited point bar sands and flood plain silts and muds. The point bar. sands are typically fining upward sequences of significant thickness and lateral continuity as are the interbeds of mudstone and siltstones. A low angle unconformity occurs at the base of the Pleistocene strata (Quaternary glacial deposits), thus separating these deposits from the top of the Pliocene Sterling Formation. The glacial deposits consist of poorly to moderately consolidated fluvial channel sands and gravels with interbeds of glacio-lacustine claystones. KDK/pg 766D June 20,1985 Attachments: Plate 1: Annotated Type Log, KU WD ~~l Plate 2: North-South Structural Cross Section, the Glacial and Sterling Formation Intervals Plate 3: East-West Structural Cross-Section, th e Glacial and Sterling Formation Intervals Plate 4: North-South Structural Cross Section, Aquifers and Impermeable Claystone In Pleistocene Freshwater tervals in the Pleistocene Strata Exhibit A: Schlumberger Chart SW-1 Exhibit B: Schlumberger Chart Gen. 9 ' Exhibit C: Well Completion Schematic for KU-WD #1 Well ' CONC R: ' R, Warthen District Development Geologist ii i~~ i~ i~ i~ ~i ii ~~ ~4'ATGR SATURATION _-~ ~ - ~r Saturation Determination C (Clean Formations) Ro m SI-m Rt ~.m 5 ' ~ 30 10.000 .ooa ~ FR a,ooo s,ooo 6 ' .01 2s 2000 20 3 a,coo 3,000 7 1000 '' 800 2 0~ 8 ' 4 .02 600 10 S 400 8 1,000 800 '0 6 300 600 03 7 200 6 400 12 .04 9 5 300 ' 100 .OS 10 80 4 200 14 :06 60 16 3 15 40 100 80 18 ' .OB 30 60 20 .1 20 20 2 40 25 10 30 20 25 ' 30 g 35 6 .2 40 ~ 1 10 ~ .8 8 6 .3 FR = 0.62 ,1.2.7 5 6 4 40 .4 5 3 .5 .4 2 50 .6 3 1 .8 1.0 .2 g ~6 .4 ~ 70 .2 80 _ 90 ' 2.0 .1 .1 100 .08 -: o 3 ~_ ' , . . Ro=EBBW ~ ©SCblumberger " III' ' .. - - ~ - This nomograph solves the Archie water saturation equation ~ ~ ~- _. .. _ ~ . It should be used ~n clean (nonshaly) formations only. If Ro (resistivity when 100°lo water saturated) is known, a straight Gne from the known Ro ' value through the measured R, value gives water saturation, 5,,,. If R„ is not known, it may be determined by connecting the formation water resistivity, RW, with the formation resistivity factor, FR, or porosity, ~. EXAMPLE: RW = 0.05 St•m at formation temperature di = 20°70 (FR = 20) - .. ,_ .- _ . ., .Thus, S,,, = 31.6% Sw-1 ' 75 EXHIBIT A BASIC titATERIAL L _~~~ resistivity I~lomogra~n for I~Ta~CI Solutions ~ EXHIBIT B E-~GCC C~e~~~~va~a~ro ~~~ elegy ov~~~oz~~ ~oca~Er~~'. 35M F~e-reaaQ ~~~ v~a~~az~~ ~~ca~a~~~~~ ~~~ ~~~e Fete F~e~~~er ~T~ #~- ~ ~~ ~~c~a~~~~ ATTACHMENT H OPERATING DATA Union Oil operates all wells within the Kenai Gas Field in accordance with the regulations of the Alaska Oil & Gas Conservation Commission (AOGCC), the Alaska Department of Environmental Conservation (ADEC), and the' Bureau. of Land Management (BLM). Well WD-1 will comply with the limit of 5000 barrels/day and 150,000 barrels/yr., as specified in ADEC permit #8423-DBO15. Surface Injection Pressure According to 40 CFR 147.103 (b), Union Oil has calculated (Attachment H-3) a maximum surface injection pressure of 830 psi. This corresponds to a fracture gradient of .0.733 psi/ft., when injecting salt water or drilling fluid with a static gradient of .46 psi/ft., (SG=1.06). The geologic cross sections in Attachment G show that the WD-1 injection zone is completely isolated from all of the shallow freshwater zones (above 1300 ft.). This large vertical separation should provide more than adequate protection for any shallow USDW's. Based on the geological data presented, Union Oil requests a maximum surface injection pressure for Well KU WD-1 of 1500 psi. It should be noted that WD-1 will. likely operate with an average surface injection pressure between 800-900 psi, but higher pressures will be needed to dispose of fluids prior to periodic well bore cleanout operations. • ~ Currently WD-1 is operating with an average surface injection pressure of 948 psi. This pressure range is necessary to dispose of approximately 6500 bbl/month. The injected fluid is a mixture of produced water and drilling fluids. Attachment H-1 is a summary of the 1985 injection reports. Attachment H-2 contains the 1985 monthly injection reports. Attachments H-4, 5 are laboratory analysis of both produced water and drilling fluids. The annular fluid in Well WD-1 is a saltwater brine containing a corrosion inhibitor. ATTACHMENT H-1 SUMMARY OF WD-1 INJECTION REPORTS All numbers are averages for January through May, 1985 (actual reports follow). Injection (tubing) Pressure Casing Pressure BBL/Month (psig) (psig) Average 948 0 6509 Maximum 1060 0 8800 Total WD-1 injection thru 6-1-85 is 123,727 bbl. 'HASTE DIS?CSAL ,'ELL nl REPORT FUR ;MONTH OF January 1985 VOLL''"'ES INJECTED cA.^RELS INJECTED ProCuced Water 1607 Grilling Fluids 2673 L Fresh Wager Diluen 2718 Other Total 6998 ATTACHN~NT H-2 P,A"JGE AVERAGE PRESSU,~E Casing Pressure (psig) 0 0 990-1010 1000 Tubing Pressure (psig) Fluid Analyses & Other Inicrcation __ Disposed of 2418 B from Beaver Creek Field and 300 B of wash down water in Kenai Gas Field. Drilling mud had a ph of"8.0, 400 ppm cl & 3% solids. • - • 1~~r. ~~ ! C LI Jf r~~n~ ~C~'.~~ ~1 ~~~QR' F CF; !•'~U~ I ~ QE' Februa;-y 1985 VGl f1±~~1 I~~.:rf:tt:E~ A~®DUCTIpN DEPT. RECEIVED MAR 71~g5 Grillinj Fluids X595 Fres:~ ~f~,•f~r Uil~e~'~t Gti ~k'r ~SqR Tr,tal 71 t F'F?F `'~°SURt Casing PreSS~~re (~tiig) ~ ~ ~ 0 Tui.}inq Fr~;;;tur: (~,yiq} 3040 iQ~i~ 1t~~4 F1i~id r.r,~1y~~,F~s ~r OtE,~r Inft~rn~~tlon . Disposed of P~Gfi g from Bearer Cr~:ek Field. Qispased of 2695 8 of drilling nud ~r/c.3 pf 4C0 FPt~1, ph ref 4.5 & 2-4ro Solids. Ran tempet•ature fiurvey t•~hich indicated Prater ~~itcring perf~ar~~t~d in~.~~^val from 3ll~~Q'-31]0' . (lnahle to sur~~~ey below ~1 ]~]' t~ec•~us~: of fi 11 . 'rater samples of ca*~pa~it~ produced .rater & two sh~11Cw fr~osh hater ~~+e11s ~t Site 34-31 mere s8rit #.a tab i'~r analyses, ! f WASiF OiS=OS~' 4ti~~L :~l REPORT FOP, MONTH OF March 1985 vO~U~ ~=S Ir.,~Cr~O B~.°.~~~S Ir1JE ~ T~0 Produced 'Mater 1983 Drilling Fluids Fresh 'rioter Diluent Other 3042 Total 5025 ~,._ R^r'~= PR~S~UP,E Casing Pressure (psig) 0 Tubi~~g Pressura (psig) 800-1000 ~: , ~~ 0 900 Fluid A.na1_yses & Other In Formation _ _ _ Disposed of 3042 B fm Beaver Creek ` Acidized well on March 5 with 2000 gals. of mud acid and 1000 gals. of HCL. s ~ WASTt DIS='OS~~ 'r,-LL ill REPORT FOR MCfJTH OF April, 1985 VC'_U~'ES IN~ECTEO BAR~~LS INJECTED Prcduced 'Water. 1968 Dr i 11 ing Fluids Fresh Water Diluent Other 2642 Total 4610 RA`;G` AVER,A.GE PRESSUF..E Casing Pressure (psig) 0 0 Tubing Pressure (psig) 800-840 820 Fluid Analyses & Other Information Disposed of 2642 barrels from Beaver Creek Field. WASTE DISPOSAL WELL ~~1 REPORT FOR MONTN OF May - 1985 VOLUMES INJECTED BARRELS INJECTED Produced Water Drilling Fluids Fresh Water Diluent Other Total PRESSURE Casing Pressure (psig) Tubing Pressure (psig) 2872 3740 2188 8800 RANGE AVERAGE 0 0 900 - 1020 960 ,~ Fluid Analyses & Other Information Disposed of 2188 B from Beaver Creek Field and 3740 B of drilling fluid which was stored in tanks. ATTACHMENT H-3 WD-1 SURFACE PRESSURE CALCULATION According to the equation found in 40 CFR 147.103 (b), Pmax = ( .733 - .433 (Sq) ) D where Sq = specific gravity of injected fluid (water = 1.0) saltwater: Sq = 1.06 D = depth of injection (feet) = 3030' Pmax = ( .733 - .433 (1.06) ) (3030) = 830 psi. ATTACHMENT H-4 Drilling Fluid Analysis • ~ CHEMICAL & LOGICAL LABORATORI~F ALASKA, INC. ~~ = ~ °~ ~~ - ~-- ~ TELEPHONE (90~ 562.2343 ANCHORAGE INDUSTRIAL CENTER ~,,,,,o~,,, 5633 B Street ANALYTICAL REPORT ' STOMER Union Oil Car~an_y of California SAMPLE LOCATION • Kenai Gas Field _ FOR LAB USE ONLY E COLLECTED 5-25-85 TIME COLLECTED: --- RECVD.BY ~ LAg # 8737-1 PLED BY r-- SOURCEr~zd Storage Tank-Cac-posite DATE RECEIVED 6-5-85 ;EMARKS DATE COMPLETED 6-18-85 ~ DATE REPORTED 6-19-85 SIGNED • g,Silver []P,Phosphorous A1,Aluminum []Pb,Lead 0.33 ~As,Arsenic 0.004 []pt,Platinum ^^]Au,Gold []Sb,Antimany <0.001 ,Boron []Se,Selenium • a,Barium 11 []Si,Silicon • i,Bismuth []Sn,Tin ~a,Calcium []Sr,Strontium ]Cd,Cadmium 0.003 []Ti,Titanium ~o,Cobalt []W,Tungsten r,Chromium 0.068 []V ,Vanadium u,Copper []Zn,Zinc e,Iron 5.4 []Zr,Zirconium ]Hg,Mercury []Ammonia 3950 Nitrogen-N ,Potassium []Kjedahl 4.0 Nitrogen-N g,Magnesium []Nitrate-N ~ n,Manganese []Nitrite-N ~Io,Molybdenum []Phosphorus ii 390 (U"tho)-P 29000 ]Na,Sodium []Chloride `i,Nickel []Fluoride mg/I 0.007 []Cyanide []Sulfate 43 []Phenol 54.,800 []Total Dissolved Solids []Total Volatile Sol ids []Suspended Solids []Volatile Sus- pended Solids []Hardness as CaC H0O3 0 []A1 ka_ inity as [] 003 273 OH 114 [] [] I, ~] []umhos Conductivity 11.5 []pH Units []Turbidity NTU []Color Units [] .Coliform/100m1 [] [] ~.... t ~~ _ ~ CHEMICAL & GEOLOGICAL LABORATORIES F ALASKA, INC. 4r. ~==~~ ~- TELEPHONE (90~ 562-2343 ANCHORAGE INDUSTRIAL CENTER 5633 B Street ~~TpM.. ' ANALYTICAL REPORT STCMER Union Oil Cat~any of California SAMPLE LOCATION • Kenai. Gas Field ' 5-25-85 _ --- FOR LAB USE ONLY )ATE COLLECTED TIME COLLECTED: RECVD.RY DB LAB # 8737-2 ~IPLED BY --- SOURCE P~iud infected into KGF disposal well on 5-25-85 ;MARKS ccriposite ATE RECEIVED 6-5-85 ATE COMPLETED 6-18-85 ATE REPORTED 6-19-85 ~ SIGNED mg/1 Silver ` g []P,Phosphorous , Aluminum A1 []Pb,Lead o.54 , Arsenic ~As 0.003 []pt,Platinum , Gold Au []Sb,Antim ony , B,Boron <0.001 []Se,Selenium Ba,Barium 11 []Si,Silicon Bismuth Bi []Sn,Tin , Calcium ~Ca []Sr,Strontium , Cadmium Cd ~ 0.090 []Ti,Titanium , Cobalt o []W,Tungsten , - r,Chromium 0..114 []V ,Vanadium Copper Cu []Zn,Zinc , Iron ~e 8.9 []Zr,Zirconium , Hg,Mercury []Ammonia 4990 Nitrogen-N -_ ,Potassium []Kjedahl 5'4 Nitrogen-N - g,Magnesium []Nitrate-N Mn,Manganese []Nitrite-N - ~lo,Molybdenum ~ []Phosphorus - 480 (Ortho)-P 34000 Na,Sodium . []Chloride mg~i <.0.001 []Cyanide []Sulfate 65 []Phenol 60,800 []Total Dissolved Sol ids []Total Volatile Solids []Suspended Solids []Volatile Sus- pended Solids []Hardness as CaC xC03 0 []A1 ka inity as C03 252 [] [] OH 275 [] [] []umhos Conductivity 11.7 C]PH Units. _ []Turbidity NTU []Color Units [] .Coliform/100m1 [] i,Nickel []Fluoride [] C CHEMICAL & GE~OGICAL LABORATORIES ~ ALASKA, INC. TELEPHONE (90~ 562-2343 ANCHORAGE INDUSTRIAL CENTER 5633 B Street ANALYTICAL REPORT TOMER Union Oil Canpany of California SAMPLE LOCATION• .. E COLLECTED -- 5-26-85----TIME CDLCECTED: --- PLED BY SOURCE Mid ~7ected into Kc~ disposal well ~ 5-26-85 r^A'lAR KS cc>Ti~osite Kenai Gas Fieid FORD~AB USE ONLY_ -8737-3- CVD-BY- LAB # ATE RECEIVED 6-5-85 ATE COMPLETED 6-18-85 ATE REPORTED 6-19-85 SIGNED ,~ g,Silver []P,Phosphorous 1,Aluminum []Pb,Lead 1.1 ~s,Arsenic 0.007 []pt,platinum ]Au,Gold []Sb,Antim ony ,Boron <0.001 []Se,Selenium a,Barium 12 []Si,Silicon i,Bismuth []Sn,Tin ~a,Calcium []Sr,Strontium 0.020 jCd,Cadmium []Ti,Titanium ,o,Cobalt []W,Tungsten mg/i <0.001 []Cyanide 75 []Sulfate []Phenol 91,400 []Total Dissolved Solids [.]Total Volatile Solids []Suspended Sol ids []Volatile Sus- pended Solids []Hardness as CaC HC03 0 []Al ka inity as C03 588 [] r,Chromium 0.164 []V ,Vanadium [] ~ 272 u,Copper []Zn,Zinc [] ,Iron 19 []Zr,Zirconium [] JHg,Mercury []Ammonia []umhos Conductivity ;,Potassium 6000 Nitrogen-N []Kjedahl 11.7 []pH Units Nitrogen-N ~ ,Magnesium 9.3 []Nitrate-N []Turbidity NTU ,Manganese []Nitrite-N []Color Units ,Molybdenum ~ []Phosphorus [] .Coliform/100m1 Na,Sodium 510 (Ortho)-P []Chloride 48000 [] '~i,Nickel []Fluoride [] ~ Y ' ~ CBEMICAL 8c G LOGICAL LABORATORIES~F ALASKA, INC. +,~ _ ~ ~•=•• ~ TELEPHONE (90~ 562-2343 ANCHORAGE INDUSTRIAL CENTER ~„~,,,,~,„« 5633 B Street ANALYTICAL REPORT STOMER ~l~' oil Ca~any of California SAMPLE LOCATION TE COLLECTED 5-27-85 TIME COLLECTED: PLED BY M SOURCE Mud injected into Kam' disposal well on 5-27-85 ccmoosite :EMARKS Kenai Gas Field FOR AB USE ONLY RECVD.BY D~ LAB # 8737-4 DATE RECEIV DATE COMPLE DATE REP SIGNED ~] []umhos Ag,Silver []P,Phosphorous •,A1,Aluminum []Pb,Lead 0.33 []Cyanide 0.001 ' []Sulfate a ~As,Arsenic 0.002 []pt,Platinum []Phenol :]Au,Gold []Sb,Antim ony ~B,Boron []Se,Selenium <0.001 Ba,Barium 8.8 []Si,Silicon _,Bi,Bismuth []Sn,Tin a,Calcium []Sr,Strontium :]Cd,Cadmium 0.015 []Ti,Titanium ~o,Cobalt []W,Tungsten - Cr,Chromium - u,Copper_ []Zn,Zinc [] ~ _~e, Iron 7.4 []Zr,Zirconium :]Hg,Mercury []Ammonia 3150 :,Potassium Nitrogen-N []Kjedahl 6 8 Nitrogen-N ' Mg,Magnesium []Nitrate-N :, n,Manganese []Nitrite-N ,Molybdenum []Phosphorus (Ortho)-P 19,000 Na,Sodium 500 []Chloride ~Ii,Nickel - []Fluoride []Total Dissolved 37,300 Sol ids []Total Volatile Sol ids []Suspended Solids []Volatile Sus- pended Solids []Hardness as CaC 03 HC03 24 []Alkalinity as [] C03 540 0.058 []V ,Vanadium [] ~ 0 6-5-85 6-18-85 6-19-85 Conductivity- []pH Units 11.5 []Turbidity NTU []Color Units [] .Coliform/100m1 [] [~ • .. ~;~' . ATTACHMENT H-5 Produced Water Analysis M , _., •,, ~~ ~ ~ CIIEI~ICAL & GEOLOGICAL LAEORATORIES OF ALASR~, ANC. ;,~ ,F~ ;' ~~ 6- '~ ~ ~ TELEPHONE (907) 562-2343 ANCHORAGE INDUSTRIAL CENTER ~j~ g ~~ J ~..w.~,o~,.. 5633 B Street `;~~. ~ _- ~ ~%! ~`_= j i ANALYTICAL REPORT ^ CUSTOMER _ Union Oil Company SAMPLE LOCATION: DATE COLLECTED 2-21-85 TIME COLLECTED: ,`SAMPLED BY REMARKS Tank 34-31 Analyzed in Accordance with ADEC Title 18 Drinking Water Regulations. Kenai., Alaska FOf~~.AB USE ONLY 7829_3 ECVD.BY LAB # ATE RECEIVED 2-22-85 ,TE COMPLETED 3-5-85 DATE REPORTED 3-5-85 SIGNED ~a""- ~~'1' mg/1 []Ag,Silver < o.ol _ []P,Phosphorous []Cyanide. []A1,Aluminum []Pb,Lead ~ 0.01 []Sulfate ~[]As,Arsenic 0.002 []Pt,Platinum []Au,Gol ~[]B,Boro []Phenol []Sb,Antim ony []Total Dissolved Sol ids []Se,Selenium ~ 0.001 []Total Volatile_ Solids []Ba,Barium 1.7 []Si,Silicon []Suspended ~ Sol ids []Bi,Bismuth []Sn,Tin []Volatile Sus- pended Solids ' []Ca,Calcium []Sr,Strontium ~ []Hardness as ~ 0.002 []Cd,Cadmium []Ti,Titanium Ca C 0 []Alkalinity as CaC03 ~ []Co,Cobalt []W,Tungsten [] ' []Cr,Chromium ~ 0.01 []V ,Vanadium [] oil & Grease 83 []Cu,Copper []Zn,Zinc [] j []Fe,Iron []Hg,Mercury 0.0007 ~'[]K,Potassium []Mg,Magnesium ~[]Mn,Manganese ~[]Mo,Molybdenum []Na,Sodium 1[]Ni,Nickel SOURCE KGF Produced Water Storage []Zr,Zirconium []Ammonia Nitrogen-N []Kjedahl Nitrogen-N 0.44 []Nitrate-N []Nitrite-N []Phosphorus (Ortho)-P []Chloride []Fluoride 0'28 [] []umhos Conductivity []pH Units []Turbidity NTU []Color Units [] .Coliform/100m1 [] [] 130 i ~. i~ i~ ANALYTICAL REPORT CUSTOMER Union Oil Cc>~any of California 1-22-85 DATE COLLECTED SAMPLED BY Steve Wise REMARKS i i~ Kenai, Alaska • FOR LAB USE ONLY RECVD.BY ~ tAB # 7579 DATE RECEIVED 1-22-85 1-31-85 DATE COMPLETED DATE REPOR ED 1-31-85 SIGNED ~~• ~~v2i-i1 ~ ~Cl~ ICP mg/1 AA ICP mg/1 AA mg/1 []Ag,Silver <0.01 []p phosphorous 1.3 []Cyanide , []Al,Aluminum 1.8 <0.001 []pb,Lead 0.01 []Sulfate []As,Arsenic <0.001 []pt Platinum <0.1 []Phenol , []Au,Gold <0.1 []Sb,Antim ony <0.1 []Total Dissolved Solids []B,Boron 0.35 []Se,Selenium <0.001[]Total Volatile -Solids []Ba,Barium 2.6 []Si Silicon 47 []Suspended , Solids []Bi,Bismuth <0.1 []Sn,Tin 0.29 []Volatile Sus- pended Solids ' []Ca,Calcium 910 []Sr,Strontium 5•~~ []Hardness as 2500 []Cd,Cadmium <0.002 []Ti,Titanium 0'18 CaC~3 []Alkalinity as 500 []Co,Cobalt <0.1 []W Tungsten Q.0 CaC03 [] , []Cr,Chromium <0.01 []V ,Vanadium <0.1 [] []Cu,Copper <0.1 []Zn Zinc 0.49 [] Oil & Grease 310 , []Fe,Iron 37 []Zr,Zirconium <G.1 [] []Hg,Mercury <0.0002 []Ammonia * * * * []umhos Conductivity *9800.* []K,Potassium 430 Nitrogen-N []Kjedahl ~ []pH Units ~'4 Nitrogen-N []Mg,Magnesium 38 []Nitrate-N []Turbidity NTU []~~n,~~ianganese 0.65 []Nitrite-N []Color.Units []h1o,Molybdenum <0.1 []!ia,Sodium 1140 c = 1 ` , `~~ ...- '4rt CIE rI1CAL c~ ~OLOGICAL LA~O~A7'O,~IIi; t~~' AL.=~S~'iA, 1:~'C. 1 u+~; _ ;_ 4. ° ~ F TELEPHONE (907) 562.2343 ANCHORAGE INDUSTRIAL CENTER _ ~ ' ~~ -J, ~.,.o,.,o.,~, 5633 B Street L. O. CLT7"C ~ ~ ~-~;; ~`~/ - ~F~111985 SAMPLE LOCATION: TIME COLLECTED: 0830 SOURCE KGF Discharge PLUnp []Phosphorus (Crtho)-P []Chloride- []Fluoride 3500 [] .Coliform/100rn1 [J [] 40 CFR 146.24 (b) (2) ATTACHMENT J (Optional) Well WD-1 will occasionally be acidized with Mud Acid to clean the perforations. This type of treatment requires only small volumes of fluid. An example treatment program is shown here. Rate Fluid Volume- Cum Vol. Pressure BPM (bbl) (bbl) (psi) 2 15%HCL 12 12 1000 2 12-3 Mud Acid 48 60 1000 2 15%HCL 12 72 1000 2 water 40 112 1000 1 water 40 152 600 2.5 water 40 192 600 ~ • ATTACHMENT M CONSTRUCTION DETAILS 40 CFR 146.22 WD-1 was constructed in accordance with the rules of the Alaska Oil & Gas Conservation Commission. The 7" casing is set to 3,276' and cemented to surface, isolating all zones. Currently, perforations exist from 3030' to 3250' TVD with injection taking place into 3 separate zones. Attachment M-1 is a schematic of WD-1. ~ WASTE ~ - J 1 1 ,47'f; N-80 ,DRIVEN 118 ATTACHMENT M-1 No. I ', 12.6 N-80, BUTTRESS TUBING FA-I PAKER AT 1,259 1 OF ANCHOR SEAL ASSEMBLY AT 1,264 503, SQUEEZED W/300 SACKS CLASS ~~G~~ CEMENT. %ECT/O/Y //YTE~,QLS ~it~D. B TvO. ~ 3030 - 3160 3178 - 3193 3235 - 3250 TE ~ 2-.6~~HPF (ALL PERFORATIONS) 3,252 (CMT) un~~ n AlA$KA DISTRICT Un~en O~~ ~ G.. o.....an w•.~•.• KENAI GAS FIELD • ,- • i " DISPOSAL INJECTION WELL PRESENT CONDITION r~ _ _ wy. .~ ~-- a+~. ,~. ~) 7~~,29~;` N-80 CASING SET AT 3,276 r • Attachment P Monitoring Program 40 CFR 146.24 (b) (5) Union Oil Company will monitor Well WD-1 in accordance with the regulations of both the Alaska Oil & Gas Conservation Commission and the Environmental Protection Agency. The monitoring program includes continued determination of injection rates with flow meters. Injection volumes along with tbg and csg pressures are recorded daily. This exceeds the requirements of 146.23 (b)(2)(i) (weekly monitoring). In summary, Union Oil routinely monitors injection volume, injection rate, injection pressure and csg pressure. Reporting Requirements Union 0i1 Company of California will submit an annual report on injection as required by 40 CFR 146.23 (c)(1). u Attachment Q Plugging and Abandonment Plan 40 CFR 146.24 (d) Plugging and abandonment of all wells meets or exceeds the requirements for the abandonment of wells as outlined in Article 2, Section 20 AAC 25.105 of the Alaska Oil & Gas Conservation Commission Regulations and applicable Bureau of Land Management Regulations. This includes setting a cement plug across all open zones and extending at least 100' above the top open interval. Figure Q-1 - Example Schematic of Plugged Well, WD-1 (proposed). Attachment Q-2 - Sample of Environmental Protection Agency Plugging & Abandonment Plan. ATTACHMENT Q-1 WASTE DISPOSAL INJECTION WELL No.l Pi~OPOSED ABANDONMENT 50' Top of Cement Plug ~3 (9 sacks) 95/8" ,47~; N-80 ,DRIVEN 1181 4%2", 12.6'x; N-80, BUTTRESS TUBING ~:~~~ ~: ;~ °~ S O S a c k s ~~: ~:~: :~~~of Cement:~~s :.< BAKER FA-I PAKER AT 1,2591 BOTTOM OF ANCHOR SEAL ASSEMBLY AT 1,264 1,5011-1,5031, SQUEEZED W/300 SACKS CLASS 11G11 CEMENT. 2880' Top of Cement Plug ~ 1 (18 sacks) 2980' RETAINER, Top of Plug ~2 (50 sacks) /~Y~ECT/Oy /~YTEf~,4LS /~1f0. ~ TIiO. l 30301 - 31601 3178 - 31931 3235' - 32501 NOTE ~ 2-.611HPF (ALL PERFORATIONS) TOTAL: 272' of Cement Below Retainer E.T.D. = 3,2521 (CMT) 711,29';` N-80 CASING SET AT 3,276 un~ ~n ALASKA 015TgICT Vn~on O~~ ~ O.. o.....on w KENAI GAS FIELD ATTACHMENT 0-2 m Approved. OMB No. 2040-0042. Approval expires 9-30-86 UNITED STATES ENVIRONMENTAL PR TION AGENCI' V E PA WASHINGTON, OC 2 PLUGGING AND ABANDONMENT PLAN NAME AND ADDRESS OF FACILITY NAME AND ADDRESS OF OWNER/OPERATOR Kenai Gas Field, Kalifonsky Beach Road Union Oil Company of California near Kenai, Alaska P.O. Box 6247, 909 W. 9th, Anchorage, AK 99502 STATE COUNTY PERMIT NUMBER LOCATE WELLAND OUTLINE UNIT ON AK Kenai Borou h sam 1 e SECTION PLAT -640 ACRES SURFACE LOCATION DESCRIPTION N SW ~ SW ~ SE ~ ~ 31 5N 12W ~~t I I I t~t I( i TTT -I--~--~ I I I TTT -l--I-~-- I I I ~~ ~~~ I I I ~~-~ ~~-~ I I I ~~-~ ~-~~ I I I ~ I I I /. OF h OF h SECTION TOWNSHIP RANGE LOCATE WELL IN TWO DIRECTIONS FROM NEAREST LINES OF QUARTER SECTION AND DRILLING UNIT Surface 606 S Location _ ft. from (N/S) -Line of quarter section TYPE OF AUTHORIZATION WELL ACTIVITY E ~ Individual Permit ^ CLASS I •~-' ^ Area Permit C~ CLASS II , ^ RuI. ~ Brine Disposal ^ Enhanced Recovery Number of Wells ~_ ^ Hydrocarbon Storage ^ CLASS 111 s I Lease Name A-028055 CASING AND TUBING RECORD AFTER PLUGGING !/FT) TO BE PUT IN WELL (FT) TO BE LEFT IN WELL IFT) HOLE SIZE Well Number KU WD-1 METHOD OF EMPLACEMENT OF CEMENT PLUGS ® The Balance Method ^ The Dump Bailer Method ^ The Two-Plug Method ^ Other CEMENTING TO PLUG AND ABANDON DATA: PLUG #1 PLUG #Z PLUG #3 PLUG #4 PLUG #5 PLUG #6 ~ PLUG =7 Size of Hole or Pipe in which Plug Will Be Placed (inches) 7 ' 7 Depth to Bottom of Tubing or Drill Pipe (ft.) 2980 2980 Sacks of Cement To Be Used (each plug) 18 50 Slurry Volume To Be Pumped (cu. ft.) 21 57 Calculated Top of Plug (ft.) 2880 2980 Measured Top of Plug (if tagged ft.) _ _ SlurrvWt.ILb./Gall 1~i S2 1~, R 7 e Cement or Other Material (Class III) Class G Class G LIST ALL OPEN HOLE AND/OR PERFORATED INTERVALS AND INTERVALS WHERE CASING WILL BE VARIED ll1 any/ From To From To CERTIFICATION lcertify under the penalty of law that l have persona/ly examined and am familiar with the information submitted in this document and all attachments and that, based on my inquiry of those individuals immediately responsible for obtaining the information, l believe that the information is true, accurate, and complete. l am a ware that there are significant penalties for submitting fa/se information, inc/uding the possibi/ity of fine and imprisonment. (Ref. 40 CFR 144.32) NAME ANO OFFICIAL TITLE7P/eese type or prinq SIGNATURE DATE SIGNED C-~rry A. Graham ~ ~- District rations Mana r -Alaska `C~`"~ ~ne ~~j 1~8s- t~ EPA Fotm 7520-1413-84) ~i Attachment R Financial Resources 40 CFR 146.24 (a) (9) • Union Oil Company of California is the operator of the Kenai Gas Field and is responsible for obtaining UIC permits. Attachment R-1 is a copy of documentation to demonstrate financial assurance for Well WD-1. ~~ r ' 1 ~i Form No. D.L, r BOND N0. B-53700 .' 2 STATE OF AL~,SXA ~'i•` `' ~''-, ~ .s ' i DEPART:UiNT OF NATURAL BESOUSCES : '•~/' ~,}~:~CO ;, • 4. Diviaion~of Laada ~ .• '~.;~~ ~ -. ~ : - .` ~ ~ - I _ 8 Statewide 011 and Gas Bond '`'~ .i • ~. ~. ~ 7. - . g KNO'A ALL MEN BY `THES.?',:~RESENTS .that we, ~, r. O:I':82L COtiT'A,"~ OF CAL rI"0'1fiIA _ . 9: ~ ~ to .~. . . Il • . l - - . ; ^ and L"_~"~ F^CZFT_C ~~'?~~' C"•=~-~ al rinci ~ - • .1_ , . p as p ' Ig . :nose address is - - -- - 24 ~, ,. t ~ ( - •.15 as surety, are held and fimly.~ouad unto the State of Alaska in the cum of,0as • - ~ ~ ` 28 Hundred Thousaad Doliaza ($100ti000.00), fawful monoy of tbn United Statna for • •'27 the~use and beaefit of (1) the State of Alaska, (2)~any owner of a portion of ~ I8 ~ - • the land subject to. the coverage of this bond who bas a:atatutory right to , +: 19 cowpensatioa in eoanectioa with a~xeservation of the oil and gas deposits tp ~- I • •~ 20 - ;;the State of Alaska, and (3)`any leases or pemittee under a lease.or permit •. i.':. •22 ~~ issued by the State of Alasks prior'to •tbe ieauanco of an oil or gas Lease for - ~ ' _ : !' 22 ~ the uama land subject to this bond, covering the use oP the surface or the : ~ ~.. ~ ~: ^-• ~!procpecting for or developWent of other mineral deposits in say portion of sueh - . . .. .~ ~% . land, to be paid to the State of Alaska. For ouch payment well and truly to be ~ :.:~•~ i. mada we bind ourselves and each of ua and each of our heirs,• exncutora, . ~~ `•=~ II aE3lnietratora, auccescora sad assigns; ,~ointly and aevnrally by.thna• prneenta. l . ~ , lll ~ • ~ • ~ . .. 1 • The conditions of the foregoing obligations,are ouch that, wh9reaa: ~ I i ~ { Tha principal in one or morn of the following ways has an interes ! A ~ ~ t ~ . , , i C J is oil esd gas leases on lands of thdState of Alaska under the juriadicilon of ..,..: • ... .. , ..: •: `. 1. ~ ' ~ . . .. . ~ • • .:r. :: -.. .-.-..-- • ~..~ ~.,....-.-..r..w~ •..a.G~ra....+na+c~'W..-<aT-T ~0~"~~- Lam- . i. , ` C .__il.~~..._~.._~.._...._.~._. ~_ _. .. .~. __.~~ .__•1-. i ,~'.. . - oral Reaourc as the i the Division of the r .der ai .sots in all 2 lessee of such 1~ ~2) as the ap, or part of the 1: ousted by such rider operating :.~~eementa yith 8 + desi nated o; agent under euch laasea~pending q the lessee, and (. 8 _ 5 approval of an as. sent or operati:.. ~.:;,=-:ement. :~~: ; '~> 8 B. The ._ncipah is authort=ed to drill for, explore•'for, develop. ',.~ T• produce. process, c:.' market oii and .-« deposits in or'-under the~landa covered by such leases and is-obligate:: ~~ comply with certain covenants and .~ -g' agreements set forth in euch leases. ~ • 10 C. The principal and surety agree that the covera~a of thin bond 11 shall extend to all of the principal's~l:oldings under ouch lesoea.in-the-Scala ~ of Alaska, and without notice'.tb.the surety shall also extend to and iacluda: 18 1. Any euch oil and gas.leasa,hereafter issued to or acquired by 14 the principal, the coverage to become effective i~aediately upon such issuance 1$ or upon approval by the Stat~e\of`Alask~ of a transfer in favor of the principal - lg 2, Any such operating agreement hereafter entered into or acquired . 1T by the principal. the cogersge to becom® effective immediately upon approval Dy 18 the State of Alask~,of th ; agreement or of a transfer of such nn agreement to 19 the principal; •Qp 3. Any designatioa.hereafter•of the principal as operator or agent `21 of a lessee under euch a lease,,the,coverage to become effective immediately - ^i2 upon the filing of such a desi8nation'with the State of Alaska; and .• ~ ~ 4, Any extension of'a lease covered by this bond, such coverage to • ?A continue without any interruption due to the.expization of the term set forth / ~ ~ in the lease; ~ Provided, that the surety may elect~to have the additional coverage authorizes ~ under this Paragraph C become inapplicable as to all-~interesta of the princip; ~ acquired more than 30 days after the receipt of.vrittea notics of ouch electi ., ~ ` . ." by the Division of Lands. _ ~ ~; ~.• . _ ` _.a~ .. _„ ; 2' , ~. _ ... f .. .. .. ....... .... _ ....._._... . i- r •. i r ... ~ ' I i! I f i i i • f 1 ,: i .~ i i _; ._. .j i , ~ r ~ 1~ 1 2 3 4 .5 8 7 8 9 • 10 11 Ir 13 I4 15 18 17 18 19 . 20 21 22 23 24 ' 25 28 27 28 29 .. .. D. The surety hereby waives any right to c.otice of and agrees that this bond shall remain in full force and effect notwithstanding: ti 1. A transfer or transfers either in whole or in part of. any or all of the leases or of the operating agreements, and further agrees to remain bound under this bond as to the interests either in the lesaes•or ~,n the open- ' sting agreements or in both r1tained by the principal vhen'che,approval of the i. transfer or transfers becomes effective; 2. Any modification of a lease or operating agreement or obligations thereunder whether made or effected by commitment of such lease or operating r agreement to unit, cooperative, communitization, or storage agreements, or development contracts, suspensions of operations or production; vaivera,'sus- pensions, or changes in rental, minimum royalty and royalties, compensatory Z royalty payments, or otherwise. E. The principal and surety agree that notwithstanding the tezaina- 'tion of any lease or leases., operating agreements, or designations as operator - J or agent covered by this bond, vhether the termination is by operation of lav or otherwise, the bond shall : emain in full force and effect as to all remain- ing leas ea, operating agreements,, or, designations covered by the bond. F. The principal as to any lease or part of a lease for lands as to which he has been designated as operator or agent or approved, as operator in consideration of being permitted to furnish this bond in lieu of the lessees agrees and by these presents does hereby bind himself to fulfill on behalf of each lessee ail the obligations of each such lease for the entire leasehold in the same manner and to the same extent as though he were the lessee. G. The principal and surety agree that notwithstanding any payments made by the surety by reasorl,"Qf legal obligations arising under the bond, cha bond shall remain in full force and effect in the sum above set forth without any deduction therefrom for such payments and the coverage of this bond shall remain the same unaffected; by the payments or by the defaults giving rise to ct 3. ' L ~i ~, Y --- _•.: • ~• ~! :~ i .~ 1 .! :~ .. 1 ~, i _~ I~ i { I i -i ~~ r' 1 r i i A 1 1 1 1 i 1 1 1 1 1 ~ 1 2 3 4 . 5 8 7 8- 9 10 • 11 12 13 14 15 18 - 17 la 19 . 20 21 ~ li .23 24 25 20 27 28 29 ~ ~ r • ~ ~. ~ + r : i obligations. H. The ~:incipal and surety agree that the neglect or forebearance of the lessor in enforcing as against the lcasees of ouch lessor, the payment of rentals or royalties or the performance of any other covenant, condition, or agreevent of the lessee shall not in any way release the principal and surety or either of them _om any liability under Chia bond. I. Thy principal and surety agree that is the evedt of any default • - under the leases the lessor may commence and prosecute any claim, suit, action, or other proceeding against the principal and surety or either of them without the necessity of ~oiniag the lessees. &Cid THEREF02E, if said principal shall in all reapecta faithfully comply with all of the provisions of the leabee referred to hereinabove, then the above obligations are to be void; otherwise, to remain in full force and effect. Dated this 5th day of Eoveaber 19~. i I~ UFION OIL COhT'AIr'Y OF CALIFOR*7IA By - J ~ UPIITr:D PACIFIC IIGSURP.idCE C0~•~ANY By n _ ~ Counterai~.ed: J C. Cotton, Attornoy--ia-Feat -C~F.Y ~' _4ECE ICY ~~~ ~~~ A ic~<ten~ l~;enz, F~accor.."~e, Al r,,.a . / ...-. 4 .. . ,r F i 1 t i l •~ . •r . RIDER . To be attached to and form part of Bond No. 8-55372 ~~ issued by United Pacific Insurance Company (hereinafter called Surety) ~~~. on behalf of Union Oil Company of California (Employee or Principal) ~ in favor of State of Alaska (Employer or Obligee) It is hereby agreed that: Subject to all the agreements, conditions and limitations of the attached bond, including all riders attached thereto, the penalty thereof shall be, and the same is hereby* increased from One hundred thousand and no/100__________________________________ Dollars, ($ 100,000.00 ) to Five hundred thousand and no/100____________________ Dollars, ($ 500, 000.00 ) as to losses sustained on and after the 8th day of Septe~aber 19 80 ,and also, in the event the penalty is decreased by reason of this agreern ent, as to losses sustained prior to said last mentioned date and not discovered within a period thereafter equal to the period allowed in said bond for discovery of loss thereunder following cancellation, termination or expiration thereof. The maximum liability of the Surety, for all losses on account of the Employee or Principal shall not exceed a sum equal to the largest amount of suretyship in force as to such Employee ' or Principal during any period within which default shall have occurred, nor shall the surety- ship granted for one period cover defaults occurring within some other period. Signed, sealed and dated September 8, 1980 UNITED PACIFIC INSURANCE CON,PAh'Y 1 _ „'1 BY - ~ ~/ Ga 1 Attorney in Fact E1 zabeth H. Clark The foregoing is hereby requested and expressly agreed to (Employer or Obligee) By (Title) * If bond penalty is being increased insert "increased" - If bond penalty is being decreased insert "decreased". Change of Penalty Rider BD-1462 Ed. Feb. 1964 .~ Countersigned: Shattuck~,& Grummett, Inc. BY ~°gl7 a~~~ Re~'dent Agent, Juneau, Alaska Joan M. Shelton, Attorney-in-Fact Attachment S Aquifer Exemptions 40 CFR 147.102 (b)(1)(C) All portions of aquifers lying below 1300', .within the area of review for this permit are exempted aquifers for Class II injection. Waste disposal injection within WD-1 is occurring at depths below 3000'. (Refer to Attachment G for geologic confining zones above 3000' and below 1300'.) See Attachment E-1. • • Attachment T Existing EPA Permits Union Oil Company of California currently has no EPA permit pertaining to the Kenai Gas Field: Following is a listing of all Union Oil NPDES permits under CWA for Alaska. Water Discharge: NPDES Permit ~~AK-000047-7: Monopod Platform NPDES Permit ~~AK-000081-7: Granite Point Platform NPDES Permit ~~AK-000048-5: Grayling Platform • • Attachment U Description of Business Union Oil Company of California is a wholly-owned subsidiary of UNOCAL Corporation. As operator of the Kenai Gas Field, the nature of Union Oil's business is to engage in all activities relative to the exploration, production, transportation, refining and marketing of oil and gas. The Kenai Gas Field is located approximately 5 miles south of Kenai, Alaska. The field was discovered by Union Oil Company of California, on October 11, 1959.
