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Home My WebLink AboutAEO 014 • • Aquifer Exemption Order No. 14 1. April 14, 2011 UNOCAL Application for Freshwater Aquifer Exemption 2. April 15, 2011 Notice of Hearing, Affidavit of publication, bulk mail list, email list 3. May 26, 2011 Public Hearing Transcript Aquifer Exemption Order No. 14 • • STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue, Suite 100 Anchorage Alaska 99501 Re: THE APPLICATION OF Union Oil Company of ) Docket Number: AEO -11 -01 California for an Aquifer Exemption Order for the ) Aquifer Exemption Order No. 14 Ivan River Unit in Township 13 North, Ranges 8 and 9 West, and Township 14 North, Ranges 8 and ) Ivan River Unit 9 West, Seward Meridian, Matanuska - Susitna ) Undefined Gas Pool Borough, in conformance with 20 AAC 25.440. Matanuska - Susitna Borough Alaska ) ) June 20, 2011 ) ) NOTICE CLOSING DOCKET BY THE COMMISSION: The Commission has the closed the Docket in the above captioned matter. ENTERED AND EFFECTIVE at Anchorage, Alaska and this 20th day of June, 2011. BY DIRECTION OF THE COMMISSION i CIAA/Gi- Jody/ . olombie Spe al Assistant to the Commission • • STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue, Suite 100 Anchorage Alaska 99501 Re: THE APPLICATION OF Union Oil ) Docket Number: AEO -11 -01 Company of California for an Aquifer ) Aquifer Exemption Order No. 14 Exemption Order for the Ivan River Unit ) in Township 13 North, Ranges 8 and 9 ) Ivan River Unit West, and Township 14 North, Ranges 8 ) Undefined Gas Pool and 9 West, Seward Meridian, Matanuska- ) Matanuska - Susitna Borough Susitna Borough, in conformance with 20 ) Alaska AAC 25.440. ) June 20, 2011 IT APPEARING THAT: 1. By application dated April 14, 2011, Union Oil Company of California (Union), operator of the Ivan River Unit (IRU), requested an order from the Alaska Oil and Gas Conservation Commission (Commission) exempting aquifers in the Beluga 71 -3 strata, within the IRU, Matanuska - Susitna Borough, Alaska. 2. On April 20, 2011, pursuant to 20 AAC 25.540, the Commission published in the Peninsula Clarion, on the State of Alaska's Online Public Notice Web site, and on the Commission's Internet website, notice of opportunity for public hearing on May 26, 2011. 3. Union's proposed underground storage of dry natural gas is excluded from federal Underground Injection Control (UIC) regulations under 40 CFR 144.1 (g) (2) (iv). 4. The Commission has authority to issue an aquifer exemption. 20 AAC 25.440. 5. The Commission held a public hearing on May 26, 2011 at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Only testimony from Union was offered. No protests or written comments were received. FINDINGS: 1. Operator: Union operates the IRU, which is located on the west side of the Cook Inlet, Matanuska - Susitna Borough, Alaska. 2. Extent of Aquifer Exemption Area: The affected area proposed in Union's aquifer exemption application lies within the IRU, and is described as: T13N, R8W, S6: NW '/, NW '/ SW '/, Seward Meridian (SM); T13N, R9W, 51: E' /2, SM; T14N, R8W, S31: S 'A SW %, NW '/ SW '/, SW '/ NW '/, SM; and T14N, R9W, S36: SE'/ and SE1 /4 NE %, SM. • er A uif Exemption Order 14 Aquifer p June 20, 2011 Page 2 of 5 3. Affected Strata: The Freshwater Aquifer Exemption request is for the strata (Beluga 71 -3 Strata) between the top of the PC4 Coal at 6,809' measured depth (MD; equivalent to - ' TVDSS) of the PC5 Coal at 6 5,223 TVDSS) and the top 6,919' MD (- 5,304' TVDSS). These strata are illustrated on Figure 1, below. 4. Geology: In the IRU area, shallow, Quaternary -aged sand and gravel accumulations that extend to a depth of approximately - 3,000' TVDSS typically serve as the freshwater aquifers. Directly beneath these aquifers are Tertiary -aged, fluvial- derived, reservoir and non - reservoir deposits assigned to the Kenai Group. This Group is subdivided into (in descending order) the Sterling, Beluga, Tyonek, Hemlock, and West Foreland formations, and these formations account for most of the commercial oil and gas production in the Cook Inlet Basin. The affected freshwater aquifers lie within the Beluga 71 -3 Strata (see Figure 1), which include the Beluga 71 -3 Sand. This sand, which occurs between 6,829' and 6,856' MD (- 5,237' and - 5,257' TVDSS, respectively) in well IRU 44 -36, is a depleted gas reservoir that is overlain and underlain by interbedded siltstone, mudstone, and coal layers that form laterally- continuous top and bottom seals. 5. Groundwater Hydrology: Three shallow water wells in the IRU area are recorded with the State of Alaska. Two are within the IRU and the third is located at Stump Lake, approximately 3 miles away. These wells range in depth from 245' to 318' below ground surface. There are no other recorded water wells within a radius of about 8 miles from the proposed Aquifer Exemption Area. 6. Formation Water Salinity: The salinity of formation water within the Beluga 71 -3 Strata was estimated by log calculations and confirmed using water samples obtained from the Sterling 59 -6 Sand in the IRU 44 -36 well. Total dissolved solids (TDS) concentrations estimated by Union using Pickett Plots range from about 6,000 mg/1 to 10,000 mg /1 within the Beluga 71 -3 Strata and from 4,100 mg/1 to 26,000 mg/1 for the overlying the Sterling and Beluga intervals. Union's estimated TDS value for the Beluga 71 -3 Sand is about 9,300 mg /l. The accuracy of these estimated TDS values can be verified using information from the Sterling 59 -6 Sand, which lies about 200' above the Beluga 71 -3 Sand in well IRU 44 -36. Although gas is present in the Sterling 59 -6 Sand (as demonstrated by cross -over of neutron and density well log curves within the sand), Union's estimated average TDS concentration for the sand is about 6,200 mg/1, which agrees reasonably with laboratory measurements of 7,076 and 7,286 mg/1 for two water samples taken from the sand during 2005. I The acronym TVDSS refers to true vertical depth subsea (true vertical depth below sea level). To avoid confusion, when depths presented in the text represent true vertical depth subsea, the footage will be preceded by a minus sign and followed by the acronym TVDSS (e.g., 3,000' true vertical depth subsea will be depicted as - 3,000' TVDSS). 2 According to the Alaska Department of Natural Resources' Water Rights Geographic Information System and Land Administration System Case Abstracts websites. 3 Commission senior staff confirmed Union's estimated TDS concentrations for the Sterling 59 -6 and Beluga 71 -3 intervals utilizing well log data and techniques that are compatible with EPA guidance document "Survey of • • Aquifer Exemption Order 14 June 20, 2011 Page 3 of 5 Correlation Depth Res is Porosity SP <M D ResD(LD) RHOB 150 MV 50 0.2 OHMM 2001.65 GM/CC 2.6' RHOB T VD S S> ResS(SFLU) NPOR 8 GM/CC 1.85 3.2 OHMM 20030 V 1 TVD AT20(WA) DTCP(DT) 3.2 200200 US/FT 101 GR <MD AT90(WA) 10 API 240 3.2 200 IIIIIIlli ' I r •-an - I' - a Perforated Intervals 6500 -5000 Sterling 5100 5 9 -6 Sand 6600 -5100 6700 5200 ,. -5200 PC4 Coal 6,809' MD f ., F-3USgaand Beluga 71 -3 Strata 6900 X5300 Coal 6 MD = - Coal 5400 7000 i ) 5400 7100 i 5500 --."111 r r -5500 7200 , Methods to Determine Total Dissolved Solids Concentrations," (EPA LOE Contract No. 68 -03 -3416, Work Assignment No. 1 -0 -13, KEDA Project No. 30 -956, September 1988, Revised September 1989). • Aquifer Exem P tion Order 14 June 20, 2011 Page 4 of 5 7. Suitability of IRU Sediments as Drinking Water Aquifers: Pursuant to 20 AAC 25.440 (a) (1), the subject aquifer exemption requested by Union is supported by the following: a. the Ivan River Unit area encompasses plentiful surface and groundwater to a depth of about 318' below ground surface; b. the now - depleted Beluga 71 -3 Strata produced commercial quantities of hydrocarbon gas intermittently from 1993 to 2008; c. within the IRU area, aquifers in the Beluga 71 -3 Strata are sufficiently deep that recovery of drinking water is economically impractical; and d. well log analysis, supported by laboratory measurements, demonstrates that TDS concentrations within the Beluga 71 -3 Strata are greater than 3,000 mg/1. CONCLUSIONS: 1. Those portions of freshwater aquifers occurring in the Beluga 71 -3 Strata within the affected area do not currently serve as sources of drinking water. All known and foreseeable ground water consumption from the Ivan River vicinity is consistent with plentiful surface water and groundwater resources occurring above a depth of about 318' below ground surface. 2. Those portions of freshwater aquifers occurring in the Beluga 71 -3 Strata within the affected area contain hydrocarbon gases, TDS concentrations greater than 3,000 mg/1, and are situated at locations and depths that make recovery of these waters for drinking water purposes economically impractical. 3. The aquifers occurring in the Beluga 71 -3 Strata within the proposed affected area cannot reasonably be expected to serve as underground sources of drinking water. 4. The aquifers occurring in the Beluga 71 -3 Strata within the affected area qualify as exempt freshwater aquifers under 20 AAC 25.440(a)(1)(A), 20 AAC 25.440 (a)(1)(B), and 20 AAC 25.440(a)(2). NOW, THEREFORE, IT IS ORDERED THAT the aquifers occurring in the Beluga 71 -3 Strata in the following areas are exempt as provided by 20 AAC 25.440 for the purposes of gas storage injection operations: T13N, R8W, S6: NW 'A, NW 'A SW %, SM; T13N, R9W, Si: E'h, SM; T14N, R8W, S31: S 'h SW '/, NW '/ SW '/, SW 1 / NW %, SM; and T14N, R9W, S36: SE 'A and SE1 /4 NE 'A, SM. Aquifer P uifer Exem tion Order 14 • • June 20, 2011 Page 5 of 5 ' Note that this Order does not authorize the injection of any fluids or gas within the exemption area. Storage Injection Order No. 10 governs storage injection operations within the exemption area. DONE at Anchorage, Alaska, and dated June 20, 201. 4 /i'114 ..Nor an, Com ssoner ` �a' 1 `� : . 0 • and Gas Con : • : ommission /,,,..)_,,__ A A .. z .... P , r Cathy P. F erster, ommissioner >� Alaska 1 and Gas Conservation Commission N filt 0 : RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The Commission shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the Commission denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the Cornmission grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the Commission, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision on reconsideration. As provided in AS 31.05.080(b), `[t]he questions reviewed on appeal are limited to the questions presented to the Commission by the application for reconsideration." In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. • Fisher, Samantha J (DOA) From: Fisher, Samantha J (DOA) Sent: Monday, June 20, 2011 4:50 PM To: 'Aaron Gluzman'; 'Ben Greene'; Bruno, Jeff J (PCO); 'CA Underwood'; 'Dale Hoffman'; 'David Lenig'; 'Donna Vukich'; 'Elizabeth Bluemink'; 'Eric Lidji'; 'Gary Orr; Heusser, Heather A (DNR); 'Jason Bergerson'; 'Joe Longo'; King, Kathleen J (DNR); 'Lara Coates'; 'Lois Epstein'; 'Marc Kuck'; 'Marie Steele'; 'Mary Aschoff; 'Matt Gill; 'Maurizio Grandi'; Ostrovsky, Larry Z (DNR); 'Patricia Bettis'; 'Richard Garrard'; 'Ryan Daniel'; 'Sandra Lemke'; 'Talib Syed'; 'Wayne Wooster; 'Wendy Wollf; 'William Van Dyke'; '( michael .j.nelson @conocophillips.com)'; '(Von.L .Hutchins @conocophillips.com); 'AKDCWeiilntegrityCoordinator ; 'Alan Dennis'; 'alaska @petrocalc.com; 'Anna Raff; 'Barbara F Fullmer'; 'bbritch'; 'Becky Bohrer; 'Bill Penrose'; 'Bill Walker; 'Bowen Roberts'; 'Brady, Jerry L'; 'Brandon Gagnon'; 'Brandow, Cande (ASRC Energy Services)'; 'Brian Havelock'; 'Bruce Webb'; 'Chris Gay; 'Cliff Posey'; 'Crandall, Krisseil; 'D Lawrence'; 'dapa'; 'Daryl J. Kleppin'; 'Dave Matthews'; 'David Boelens'; 'David House'; 'David Scott; 'David Steingreaber'; 'ddonkel @cfl.rr.com'; 'Dennis Steffy'; 'Elowe, Kristin'; 'Erika Denman'; 'eyancy; 'Francis S. Sommer; 'Fred Steece'; 'Garland Robinson'; 'Gary Laughlin'; 'Gary Schultz (gary.schultz @alaska.gov); 'ghammons'; 'Gordon Pospisil'; 'Gorney, David L.'; 'Greg Duggin'; 'Gregg Nady'; 'gspfoff; 'Harry Engel'; 'Jdarlington (jarlington @gmail.com)'; 'Jeanne McPherren'; 'Jeff Jones'; 'Jeffery B. Jones (jeff.jones @alaska.gov); 'Jerry McCutcheon'; 'Jill Womack'; 'Jim White'; 'Jim Winegarner; 'Joe Nicks'; 'John Garing'; 'John Katz (john.katz @alaska.gov); 'John S. Haworth'; 'John Spain'; 'John Tower; 'Jon Goltz'; 'Judy Stanek'; 'Julie Houle'; 'Kari Moriarty'; 'Kaynell Zeman'; 'Keith Wiles'; 'Kelly Sperback'; 'Kim Cunningham'; 'Larry Ostrovsky'; 'Laura Silliphant (laura.gregersen @ alaska.gov); 'Marilyn Crockett'; 'Mark Dalton'; 'Mark Hanley (mark.hanley @anadarko.com)'; 'Mark Kovac; 'Mark P. Worcester; 'Marguerite kremer (meg.kremer @alaska.gov)'; 'Michael Dammeyer; 'Michael Jacobs'; 'Mike Bill'; 'Mike Mason'; 'Mikel Schultz'; 'Mindy Lewis'; 'MJ Loveland'; 'mjnelson'; 'mkm7200'; 'nelson'; 'Nick W. Glover'; 'NSK Problem Well Supv'; 'Patty Alfaro; 'Paul Decker (paul.decker @alaska.gov)'; 'Paul Figel'; 'PORHOLA, STAN T'; 'Randall Kanady'; 'Randy L. Sklllern; 'Rena Delbridge'; 'Renan Vanish'; ' rob.g.dragnich @exxonmobil.com'; 'Robert Brelsford'; 'Robert Campbell'; 'Rudy Brueggeman'; 'Ryan Tunseth'; 'Scott Cranswick'; 'Scott Griffith; 'Shannon Donnelly'; 'Sharmaine Copeland; Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); 'Sondra Stewman'; 'Steve Lambert'; 'Steve Moothart (steve.moothart@alaska.gov)'; 'Steven R. Rossberg'; 'Suzanne Gibson'; 'tablerk'; 'Tamera Sheffield'; Taylor, Cammy 0 (DNR); 'Temple Davidson'; 'Teresa Imm'; 'Terrie Hubble'; 'Thor Cutler'; 'Tina Grovier'; 'Todd Durkee'; 'Tony Hopfinger; 'trmjrl'; 'Vicki Irwin'; 'Walter Featherly'; 'Will Chinn'; Williamson, Mary J (DNR); 'Yereth Rosen'; Aubert, Winton G (DOA) (winton.aubert @alaska.gov); Ballantine, Tab A (LAW); Brooks, Phoebe L (DOA) (phoebe.brooks @alaska.gov); Colombie, Jody J (DOA) (jody.colombie @alaska.gov); Crisp, John H (DOA) (john.crisp @alaska.gov); Davies, Stephen F (DOA) (steve.davies @alaska.gov); Foerster, Catherine P (DOA) (cathy.foerster @ alaska.gov); Grimaldi, Louis R (DOA) (lou.grimaldi @alaska.gov); Herrera, Matt F (DOA); Johnson, Elaine M (DOA) (elaine.johnson @ alaska.gov); Jones, Jeffery B (DOA) (jeff.jones @alaska.gov); Laasch, Linda K (DOA) (linda.laasch @alaska.gov); Maunder, Thomas E (DOA) (tom.maunder @alaska.gov); McIver, Bren (DOA) (bren.mciver @alaska.gov); McMains, Stephen E (DOA) (steve.mcmains @alaska.gov); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA) (bob.noble @alaska.gov); Norman, John K (DOA) (john.norman @alaska.gov); Okland, Howard D (DOA) (howard.okland @alaska.gov); Paladijczuk, Tracie L (DOA) ( tracie.paladijczuk @alaska.gov); Pasqua!, Maria (DOA) (maria.pasqual @alaska.gov); Regg, James B (DOA) (jim.regg @alaska.gov); Roby, David S (DOA) (dave.roby @alaska.gov); Saltmarsh, Arthur C (DOA) (art.saltmarsh @alaska.gov); Scheve, Charles M (DOA) (chuck.scheve @alaska.gov); Schwartz, Guy L (DOA) (guy.schwartz @alaska.gov); Seamount, Dan T (DOA) (dan.seamount @alaska.gov) Subject: sio011 Ivan River Attachments: sio011.pdf 1 • • Mary Jones David McCaleb XTO Energy, Inc. IHS Energy Group George Vaught, Jr. Cartography GEPS P.O. Box 13557 810 Houston Street, Ste 200 5333 Westheimer, Suite 100 Denver, CO 80201 -3557 Ft. Worth, TX 76102 -6298 Houston, TX 77056 Jerry Hodgden Richard Neahring Mark Wedman Hodgden Oil Company NRG Associates Halliburton 408 18 Street President 6900 Arctic Blvd. Golden, CO 80401 -2433 P.O. Box 1655 Anchorage, AK 99502 Colorado Springs, CO 80901 Bernie Karl CIRI Baker Oil Tools K &K Recycling Inc. Land Department 795 E. 94 Ct. P.O. Box 58055 P.O. Box 93330 Anchorage, AK 99515 -4295 Fairbanks, AK 99711 Anchorage, AK 99503 North Slope Borough Richard Wagner Gordon Severson Planning Department P.O. Box 60868 3201 Westmar Circle P.O. Box 69 Fairbanks, AK 99706 Anchorage, AK 99508 -4336 Barrow, AK 99723 Jack Hakkila Darwin Waldsmith James Gibbs P.O. Box 190083 P.O. Box 39309 P.O. Box 1597 Anchorage, AK 99519 Ninilchick, AK 99639 Soldotna, AK 99669 Kenai National Wildlife Refuge Penny Vadla Cliff Burglin Refuge Manager 399 West Riverview Avenue 319 Charles Street P.O. Box 2139 Soldotna, AK 99669 -7714 Fairbanks, AK 99701 Soldotna, AK 99669 -2139 n a ` \g") 3 . . 1 ALASKA OIL AND GAS CONSERVATION COMMISSION 2 Before Commissioners: Daniel T. Seamount, Chairman John K. Norman 3 Cathy Foerster 4 Union Oil of California (UNOCAL) ) 5 by Application dated April 14, 2011) Requests an Order Authorizing ) 6 Underground Natural Gas Storage in ) the Undefined Gas Pool of the Ivan ) 7 River Unit Well IRU 44 -36 in ) Conformance with 20 AAC 25.252 and ) 8 20 AAC 25.412, and an Aquifer ) Exemption Order for the Ivan River ) 9 Unit, in conformance with ) 20 AAC 25.440 ) 10 ) 11 ALASKA OIL and GAS CONSERVATION COMMISSION Anchorage, Alaska 12 May 26, 2011 13 1:00 o'clock p.m. 14 VOLUME I PUBLIC HEARING 15 BEFORE: John K. Norman, Acting Chairman 16 Cathy Foerster, Commissioner 17 18 19 20 21 22 23 24 25 R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 • 1 TABLE OF CONTENTS 2 Opening remarks by Acting Chairman John K. Norman 03 3 Testimony by Chantell R. Walsh 06 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 R & R COURT REPORT E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 1 P R O C E E D I N G S 2 (On record - 1:00 p.m.) 3 ACTING CHAIRMAN NORMAN: We'll go on the record. I'll 4 call this hearing to order. My name is John Norman. I'm a 5 Commissioner of the Alaska Oil & Gas Conservation Commission. 6 To my left to your right is Commissioner Cathy Foerster, the 7 Commission's engineering Commissioner. A quorum being present 8 well proceed with the hearing. 9 This matter comes before the Commission upon the 10 application of Union Oil Company of California for an order 11 authorizing the underground storage of natural gas in the 12 Undefined Gas Pool of the Ivan River Unit and specifically 13 identifying at the injection well Ivan River Unit 44 -36. This 14 request is made in conformance with 20 Alaska Administrative 15 Code 25.252 and also 20 Alaska Administrative Code 25.412. 16 Additionally, there is a request for an aquifer exemption order 17 for the Ivan River Unit in conformance with Section 25.440 of 18 the Alaska Administrative Code. 19 Before we begin if there's anyone present who may need 20 special assistance to participate in the hearing you can see 21 the Commission's assistant in the back of the room, Jody 22 Colombie, and well provide whatever accommodation may be 23 needed to allow you to participate in these proceedings. 24 This hearing is being recorded by R & R Court Reporting 25 and following the hearing you may obtain a copy of the R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 3 • i 1 transcript by contacting either R & R Court Reporting or seeing 2 the Commission's Special Assistant Ms. Colombie, and she'll 3 facilitate your getting a copy. 4 I'd like to remind all of you who are speaking, you see 5 two speakers in front of you, and one of them is for voice 6 amplification so everyone can hear, the other is for the 7 purpose of enabling the court reporter to obtain a clear 8 transcript. Consequently, be sure to speak as directly as you 9 can into both of the microphones in front of you. 10 Notice of this hearing was duly published on April 20th, 11 2011, as well as being posted on the State of Alaska Online 12 Notices site and on the AOGCC's website. 13 The affected area for the aquifer exemption order and the 14 gas storage area is within Township 13 north, Range 8 west, 15 Section 6 Seward Meridian, and Township 13 north, 9 west, 16 Section 1 Seward Meridian, Township 14 north, 8 west, Section 17 31 Seward Meridian, and Township 14 north, range 9 west, 18 Section 36, again, all being within the Seward Meridian, and 19 all being within the Matanuska - Susitna Borough. 20 The hearing today is being held in accordance with 20 AAC 21 25.540 of the Alaska Administrative Code. And we see we have 22 one person presently signed up to testify. The Commission will 23 allow testimony from other persons if there are others present 24 who upon conclusion of testimony from the applicant wish to 25 testify. R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 4 . . 1 We will swear witnesses. And if you intend to be 2 recognized as an expert witness then we will ask you to state 3 your credentials, your background, your experience so that we 4 can gauge this. And then the statement I always make because 5 many of you appear before the Commission frequently so 6 requiring you doing this, each hearing stands, the record 7 stands along, and someone in the future may be reading this and 8 so we have to treat this as fresh hearing, and as if you are 9 appearing the first time before the Commission for the purposes 10 of keeping the record clear. 11 Commissioner Foerster, do you have any opening comments? 12 COMMISSIONER FOERSTER: I noticed that there were more 13 people here than on the sign -up sheet and I was just going to 14 ask Ms. Colombie if she'd get this and make sure that 15 people that hadn't signed up get signed up. Thank you. 16 ACTING CHAIRMAN NORMAN: Anything else? 17 COMMISSIONER FOERSTER: Ms. Colombie, there's another 18 person here 19 (Off record comments) 20 ACTING CHAIRMAN NORMAN: Anything else, Commissioner 21 Foerster? 22 COMMISSIONER FOERSTER: Nothing else at this time. I 23 ACTING CHAIRMAN NORMAN: Very well. So the representative 24 for the applicant is here. And I'll ask you first to raise 25 your right hand and be sworn. R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 5 • i 1 (Oath administered) 2 MS. WALSH: Yes, I do. 3 ACTING CHAIRMAN NORMAN: Very well. 4 MS. WALSH: Can you hear me? I'm sorry, should I check 5 this? Can you hear me? Yes. 6 ACTING CHAIRMAN NORMAN: Okay. 7 COURT REPORTER: Now. 8 MS. WALSH: Can you hear me now? 9 COURT REPORTER Off record. 10 (Off record) 11 (On record) 12 ACTING CHAIRMAN NORMAN: All right. We're back on the 13 record. The time is 1:15 p.m. And the date is Thursday May 14 26th, 2011. The location is at the Commission's offices of 333 15 West 7th Avenue, Anchorage, Alaska. And we have just sworn the 16 representative of the applicant. And now I will ask you to 17 please state your full name and your position and if you wish 18 to be qualified as an expert witness we'll accept your 19 qualifications after some -- after hearing what you have to say 20 and then you can proceed with the substance of your testimony. 21 CHANTELL R. WALSH 22 called as a witness on behalf of UNOCAL, testified as follows 23 on: 24 DIRECT EXAMINATION 25 MS. WALSH: My name is Chantell Renee Tun- -- Walsh. It's R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 6 . . 1 been a few years. I'm a petroleum engineer. I have 2 approximately 25 years of oil and gas experience here in Alaska 3 and I'm registered as a professional engineer with the State of 4 Alaska. 5 ACTING CHAIRMAN NORMAN: Are all of you able to hear? 6 Okay. Fine. And the experience is 25 years. And it's all 7 here in the state of Alaska? 8 MS. WALSH: All here in the state of Alaska. 9 ACTING CHAIRMAN NORMAN: And in what area of the state of 10 Alaska? 11 MS. WALSH: The North Slope and the Cook Inlet area. 12 ACTING CHAIRMAN NORMAN: Okay. And what did that 13 experience consist of? 14 MS. WALSH: I was in -- on the North Slope I did both 15 reservoir engineering work, commercial work, and production 16 engineering work. And for the Cook Inlet I've worked in the 17 workover and drilling groups and the reservoir production 18 engineering groups for UNOCAL now Chevron. 19 ACTING CHAIRMAN NORMAN: Very well. Commissioner 20 Foerster? 21 COMMISSIONER FOERSTER: I'm very familiar with Ms. Walsh's 22 qualifications. In fact, I've even terrorized her children, 23 but that doesn't need to go on record. 24 ACTING CHAIRMAN NORMAN: Very well. Ms. Walsh, without 25 opposition the Commission accepts you as a qualified expert R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 7 . 411 1 witness to testify before the Commission on the area of your 2 expertise. Please proceed. 3 MS. WALSH: Thank you. I intend today to give a broad 4 overview for the storage injection order application and the 5 aquifer exemption application for the Ivan River Unit. I'd 6 also like to answer any questions the Commission may have for 7 me. 8 At any time during this presentation please interrupt me 9 to ask the questions. That's perfectly okay with me. We also 10 brought with us today a group of individuals from Chevron 11 who've been working this project. And at any time that a 12 question arises that they may be better qualified for I'd be 13 happy to bring them up here. 14 ACTING CHAIRMAN NORMAN: Thank you. Ms. Walsh, which 15 would you be so -- to keep our record clear, would you be 16 addressing the aquifer exemption order first or the storage 17 injection? 18 MS. WALSH: The storage order first. 19 ACTING CHAIRMAN NORMAN: All right. Please proceed. 20 MS. WALSH: Page number 2. The storage injection order 21 application was submitted to the AOGCC at the end of March of 22 this year. The fresh water aquifer exemption application was 23 submitted about mid - April. Both of these documents were placed 24 on public notice and it's my understanding no comments or 25 questions have arised during that period of time. R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274-8982 ANCHORAGE, ALASKA 99501 8 410 110 1 Page 3. Today's presentation is split into two parts. I 2 intend to start with the storage injection order application 3 and finish the presentation with the aquifer exemption 4 application. 5 Page 4. The location of the Ivan River Unit is on the 6 west side of Cook Inlet. In this area. We currently have two 7 gas production wells and two active disposal wells. After the 8 work this summer we intend to have an additional gas producer 9 as well as the conversion of the Ivan River Unit 44 -36 well for 10 the purpose of gas storage. 11 Slide number 5. This is a structure map of the Ivan River 12 71 -3 Beluga Sand, the target for our gas storage interval. The 13 dark blue outline is the Ivan River Unit boundary. The dashed 14 pink lines represent the requested gas storage interval. And 15 the circular lines, the colored line here in the circle 16 represent the interpretation of highest known water and lowest 17 known gas identifying the Beluga 71 -3 storage area. 18 Slide number 6. Some key technical information from our 19 application. The gas storage formation is the Beluga 71 -3 sand 20 within the Ivan River Unit. The original gas in place for the 21 71 -3 sand is 3.9 Bcf. The cumulative primary recovery out of 22 this interval is 3.1 Bcf. Along with that gas production we 23 produced about 460 barrels of water. 24 For the purposes of this application we requested a 25 maximum reservoir pressure of 3,183 which is 110 percent of the R & R C O U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274 -8982 ANCHORAGE, ALASKA 99501 9 . • 1 initial reservoir pressure giving us or translating into a 2 maximum shut -in wellhead pressure of about 2,800 at the 3 surface. 4 It's important at this point for me to point out that all 5 of the gas storage fields that Chevron operates, while we're 6 operating them we step our way through filling our reservoirs. 7 We monitor after each iteration where we inject into the well a 8 given amount. And while we're asking to go over our original 9 pressure that reasonably is for us to meet expectation during 10 peak gas demands, but we by all means intend to systematically 11 go through the process. We intend to fill the reservoir a 12 certain amount and monitor the progress. We'll do it slowly 13 and, you know, keep the Commission apprised of what's going on 14 with our reservoir. 15 It's our intent to confirm the storage integrity certainly 16 before we fill it to original and very much so prior to 17 stepping up past the original pressure. 18 Through noto (ph) analysis we expect our injection rates 19 to be around 20 million a day at the peak. And we also expect 20 our peak production rate to be around 16 million a day. The 21 base volume we intend to add to the reservoir is about 1.4 B 22 and our working volume will be above that in 1.6 to 1.8 range. 23 Our current reservoir pressure is 615 psi. 24 ACTING CHAIR NORMAN: Ms. Walsh, if I could ask just a 25 clarifying question before we leave this slide. So currently R & R C O U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274 -8982 ANCHORAGE, ALASKA 99501 10 s i 1 we have about .8 Bcf in the reservoir and now going down to the 2 bottom of the slide, the base volume you intend to bring that 3 up to 1.5 by adding to what's there, and then you intend to 4 layer on that as working gas up to 1.8 Bcf. So the total that 5 you would envision storing is about 1.3 Bcf, is that -- is my 6 math right on that? I'm adding up 7 MS. WALSH: 3.1 you mean? 8 ACTING CHAIR NORMAN: 1 5 base volume and 1.8 9 COMMISSIONER FOERSTER: So that would be 3.3. 10 ACTING CHAIR NORMAN: 3.3, that's -- is that 11 COMMISSIONER FOERSTER: You said 1.3. 12 ACTING CHAIR NORMAN: Oh, I'm sorry, I misspoke. 3.3. 13 MS. WALSH: Yeah, 3.1 to 3.3 Bcf, yes. 14 ACTING CHAIR NORMAN: Good. Thank you. 15 MS. WALSH: Slide number 7. Critical to a successful gas 16 storage reservoir is the containment. The Beluga 71 -3 sand is 17 well defined and contained in the Ivan River Field. Above the 18 71 -3 sand we have a section of -- 15 foot section of 19 interbedded siltstones and clay -rich siltstones and mudstones. 20 Topped above that is the PC4 coal. It's about a 5 foot coal. 21 And what's key about this particular coal is it's laterally 22 extensive and easily seen in all the other wells in the Ivan 23 River Unit. 24 Above the PC4 coal there's a thick 50 foot section of 25 siltstones and mudstones creating yet another impermeable R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 11 1 barrier. 2 Below the 71 -3 sand we have a 21 foot section of 3 interbedded siltstones and mudstones. Below that another 20 4 feet of some laterally discontinuous sands interbedded with 5 clays and mudstones and thinner coals that run through that 20 6 foot section. And beneath that we have, again, PC5 and PC6 7 coal that are laterally extensive in the field and picked up in 8 all our other wells. 9 These three coal packages, the PC4, 5 and 6 give us 10 confidence in our correlations in defining our zone. 11 Slide number 8, here we have the open hole log from the 12 44 -36 well showing in the highlighted yellow section the Beluga 13 71 -3 sand. It has -- the depth of 5237 to 5257 TVD. And you 14 can see that we've got the 15 foot section above the sand of 15 interbedded siltstones with the PC4 marker -- PC4 coal right 16 above there giving us that seal, and then yet another seal with 17 the siltstones above that interval. And below the 71 -3, again, 18 the first 20 feet of that is interbedded siltstones and the 19 lower 20 feet is interbedded siltstone and discontinuous 20 sandstones with these thinner coals, and then we have the PC5 21 coal that runs along the base of that interval and is found in 22 all the other wells in the area as well as with the PC6 coal. 23 Slide number 9. Another key components for identifying 24 competency for a gas storage sand is derived from analyzing he 25 material balance. For the 44 dash -- I mean 44 -36 well, the R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 12 . . 1 initial production for the well depicted with these blue P over 2 Z dots was when the production was commingled with -- the 71 -3 3 Beluga sand was commingled with two Sterling sands. It was at 4 the point in time that we produced the 71 -3 sand by itself, the 5 red /orange triangles, that -- that we fell into a straight 6 falling matric (ph) depletion drive. This is a key depletion 7 that we're looking for showing, you know, no indication of 8 aquifer or aquifer drive. 9 Slide number 10. The mechanical integrity of the 44 -36 10 well is important for us to understand. The well was designed, 11 a standard design for the Cook Inlet wells. The 13 3 /8ths 12 surface casing was cemented to about 900 feet and the cement 13 went to surface. The intermediate casing was to about 3500 14 feet and also we cemented that to surface. Then the production 15 casing was run. This 7 inch production casing was competently 16 cemented with the top of the cement at 4400 feet. It's well 17 above the Beluga 71 -3 sand which is at about the 6800 foot 18 level. 19 For future monitoring of our mechanical integrity we 20 intend to run an annulus test on 44 -36 during the workover 21 shortly after we've set the packers. And we intend to monitor 22 daily the rates whether it's injection or production and the 23 pressures from the well. And report those -- that information 24 monthly to the AOGCC. And also monitor the material balance 25 plot of whether it's production or injection making sure that R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274-8982 ANCHORAGE, ALASKA 99501 13 111 110 1 we are running in line with where we think we should be. 2 ACTING CHAIR NORMAN: Ms. Walsh, what about monitoring the 3 total value in the reservoir, what's the plan for that? 4 MS. WALSH: We monitor that as well on a daily basis and 5 report it on a monthly basis. Yeah, we want -- monitor it 6 daily. 7 ACTING CHAIR NORMAN: And on that subject it is not your 8 intention to have this reservoir ever exceed the original gas 9 -- volume of the original gas in place? 10 MS. WALSH: No, in our application we asked for a 10 11 percent over the original -- the original pressure of the 12 reservoir. 13 ACTING CHAIR NORMAN: But volume? 14 MS. WALSH: Which would correspond to 15 ACTING CHAIR NORMAN: Which would correspond to volume, so 16 you're asking 17 MS. WALSH: volume. 18 ACTING CHAIR NORMAN: to exceed pressure and volume 19 by a factor of 10 percent, right? 20 MS. WALSH: Yes. 21 ACTING CHAIR NORMAN: Thank you. 22 MS. WALSH: I don't think it corresponds exactly to a 23 volume over 10 percent. 24 ACTING CHAIR NORMAN: Yeah. 25 MS. WALSH: It's the pressure that'll define that. R & R C O U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274 -8982 ANCHORAGE, ALASKA 99501 14 110 III 1 ACTING CHAIR NORMAN: I understand. 2 MS. WALSH: Okay. 3 COMMISSIONER FOERSTER: On that if you go back to slide 6, 4 if your original gas in place is 3.9 Bcf and your base volume 5 plus your working volume add up to 3.3 Bcf, then 6 MS. WALSH: It's about a .2 Bcf that is from the 110 7 percent. The 1.6 -- the 1.5 and the 1.6 would bring us back to 8 the 3.1 that we depleted out of the reservoir, right? 9 COMMISSIONER FOERSTER: Okay. 10 MS. WALSH: And then the additional 10 percent by bringing 11 the reservoir pressure up to 3183, that corresponds to another 12 .2 Bcf. 13 COMMISSIONER FOERSTER: So your base volume -- so it 14 doesn't add back up to your original gas in place? 15 MS. WALSH: We've -- well, we've pulled out of the 16 wellbore 3.1 Bcf. We intend to put in 1.5 17 COMMISSIONER FOERSTER: Okay. Gotcha. You're going to 18 put in 1.5 19 MS. WALSH: plus an additional 1.6. 20 COMMISSIONER FOERSTER: Gotcha. 21 MS. WALSH: And then the corresponding pressure 22 differential extrapolates back to about .2 Bcf. 23 COMMISSIONER FOERSTER: So you pulled out 3.1 Bcf so 24 there's 0.8 Bcf in there right now and you're going to add to 25 that 0.8 an additional 1.5, so your base volume is going to R & R C O U R T REPORT E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 15 410 411 1 be 2 MS. WALSH: The 1.5 plus the remaining 3 COMMISSIONER FOERSTER: plus the point 4 MS. WALSH: point 8. 5 COMMISSIONER FOERSTER: Plus the .8. 6 MS. WALSH: Yes. 7 COMMISSIONER FOERSTER: So -- okay. So slid e number 6 8 needs to be omitted (ph), yes? 9 MS. WALSH: Yeah, I would agree because the base volume 10 really should be depicted. An error on my part. It should be 11 depicted as the 1.5 we intend to add plus the .8 that still 12 remains in the reservoir. 13 COMMISSIONER FOERSTER: All right. 'Cause I was confused 14 by that. 15 MS. WALSH: Yeah, that's correct. 16 COMMISSIONER FOERSTER: Okay. Okay. All right. Good 17 question. 18 MS. WALSH: All right. I'm going to move on to slide 19 number 11. These are wells within the area. There are five 20 wellbores that penetrate the 71 -3 sand within a quarter of a 21 mile of the proposed storage reservoir. The first two are 22 disposal wells. They have their six inch casing set such that 23 the 71 -3 sand is well cemented within that interval in both 24 Ivan River 14 -31 and 13 -31. 25 The Ivan River 11 -06 well is the most recent well that we R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 16 410 410 1 put in the field. And we have good containment above and below 2 the intended storage sand. 3 COMMISSIONER FOERSTER: In that well where does the 4 injection interval correlate, what depth? 5 MS. WALSH: The injection, I think, Cathy, it's around 70 6 -- Dan? 7 UNIDENTIFIED VOICE: What's that? 8 MS. WALSH: In the 11 -06 well where is the 9 COMMISSIONER FOERSTER: Injection interval? 10 MS. WALSH: 71 -3 sand? 11 UNIDENTIFIED VOICE: 6183. 12 COMMISSIONER FOERSTER: It's what? 13 UNIDENTIFIED VOICE: 6183. 14 MS. WALSH: 6183. 15 COMMISSIONER FOERSTER: So you've only got about 60 feet 16 of 17 MS. WALSH: Yeah. 18 COMMISSIONER FOERSTER: cement? 19 MS. WALSH: Yeah. 20 COMMISSIONER FOERSTER: Okay. 21 UNIDENTIFIED VOICE: It's at 4681 (inaudible). 22 MS. WALSH: Right, but these are all measured depths. 23 UNIDENTIFIED VOICE: For 1371 the 4681 (inaudible) 5300 24 foot so there's 700 feet.... 25 COMMISSIONER FOERSTER: So where's the measured depth of R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 17 410 411 1 the injection interval in Ivan River Unit 11 -06, measured 2 depth? 3 UNIDENTIFIED VOICE: (Inaudible - away from microphone) 4 correct. 5 COMMISSIONER FOERSTER: Right. Right. 6 MS. WALSH: But the corresponding 7 COMMISSIONER FOERSTER: The injection interval, where do 8 you find that or what depth 9 MS. WALSH: (indiscernible - simultaneous speech) 10 COMMISSIONER FOERSTER: do you find that measured in 11 the injection -- in Ivan River Unit 11 -06, the injection 12 interval can be found at the depth of (makes noise) in Ivan 13 River Unit 11 -06? Fill in the (makes noise). 14 MS. WALSH: Cathy, there's a chart in our application. 15 I'm trying to find it. 16 ACTING CHAIR NORMAN: Is that attachment 3, is that what 17 you're referring to? 18 MS. WALSH: Okay. Cathy, it's actually in our application 19 on page 5 20 COMMISSIONER FOERSTER: Okay. 21 MS. WALSH: that it goes over where the 71 - sand is. 22 So corresponding 23 COMMISSIONER FOERSTER: Okay. Great. 24 MS. WALSH: to these measured depth intervals on the 25 11 - 06 well the measured depth value of the sand top for the 71- R & R C O U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274 -8982 ANCHORAGE, ALASKA 99501 18 110 411 1 3 is at 6514. 2 COMMISSIONER FOERSTER: Okay. 3 MS. WALSH: And 4 COMMISSIONER FOERSTER: Thank you. 5 MS. WALSH: Okay. 6 COMMISSIONER FOERSTER: So about 400 feet? 7 MS. WALSH: So about 400 feet, yes. 8 COMMISSIONER FOERSTER: Thank you. 9 MS. WALSH: Okay. The Ivan River 41 -01 well is also 10 contained, the sand interval is contained with competent 11 cement. And then in 44 -01 it was actually -- the 9 5 /8ths was 12 the production casing and the cement job was done in two stages 13 in the interval where the 71 -3 sand is, was above the DV color 14 (ph) so it was an extremely competent cement job and we have 15 bond that shows that. 16 That sums up my presentation on the gas storage injection 17 order application. Are there any further questions? 18 COMMISSIONER FOERSTER: I just have one. When you were on 19 slide 6 and you were talking about asking for a 10 percent in 20 excess. You said you were going to fill the reservoir slowly. 21 Could you be more explicit on what slowly means? Is that far 22 as, you know, you're going to get to this pressure and stay at 23 that for a number of days or months, you're going to get -- 24 then you're going to increase, you know what I'm saying? 25 MS. WALSH: Yes, absolutely, Cathy. And we are, in fact, R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 19 411 411 1 going to not get to pressures that -- we do not have the 2 compression capability out at Ivan River for the first two 3 years to get the reservoir much past our base load. So 4 COMMISSIONER FOERSTER: And your base load was? 5 MS. WALSH: The 1.5 plus the existing .8. 6 COMMISSIONER FOERSTER: Okay. 7 MS. WALSH: So we will have a couple of years in that 8 interval area before we've even able to start moving 9 systematically up from there. 10 COMMISSIONER FOERSTER: Okay. So then -- so for two years 11 you're going to have 2.3 Bcf? And then 12 MS. WALSH: Hopefully. 13 COMMISSIONER FOERSTER: what does slowly mean after 14 that? 15 MS. WALSH: And then after that we would probably start 16 marching up towards the original reservoir pressure and produce 17 it through an entire cycle 18 COMMISSIONER FOERSTER: So there's 19 MS. WALSH: at the original 20 COMMISSIONER FOERSTER: not a plan yet? 21 MS. WALSH: There's not a plan. No, I 22 COMMISSIONER FOERSTER: Okay. 23 MS. WALSH: think, Cathy, that's fair to say. 24 There's not a plan 25 COMMISSIONER FOERSTER: Okay. R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274-8982 ANCHORAGE, ALASKA 99501 2 0 . . 1 MS. WALSH: but in the past we've approached it that 2 way where we've run the whole cycle at original prior to 3 marching anywhere beyond that. 4 COMMISSIONER FOERSTER: Okay. Thanks. 5 ACTING CHAIR NORMAN: Anything more, Commissioner 6 Foerster? 7 COMMISSIONER FOERSTER: Nope. 8 MS. WALSH: 9 ACTING CHAIR NORMAN: Okay. My question, Ms. Walsh, also 10 relates to the volume. And if we add the residual gas plus the 11 base volume plus the working volume we're now at 4.1 Bcf, is 12 that what you're -- my rough? No. Help me out with that 13 because you have a base volume of 1.5 and you have a working 14 volume of possibly up to 1.8, is that -- that's correct, right? 15 COMMISSIONER FOERSTER: The base volume is really 2.3. 16 MS. WALSH: Yeah, the base volume, I wrote the base volume 17 as the actual amount were going to add. 18 ACTING CHAIR NORMAN: Well then, -- okay. 19 MS. WALSH: So it's .8 plus the 1.5. 20 ACTING CHAIR NORMAN: It's 2.3 21 MS. WALSH: Oh, it's 2.3 22 ACTING CHAIR NORMAN: yeah, that's I said. Okay. 23 Well then, add 1.5, .8 and 1.8, what do you get? 24 COMMISSIONER FOERSTER: 2.3 plus 1.6 and 1.8 is three -- 25 is 4.1. R & R C O U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274 -8982 ANCHORAGE, ALASKA 99501 21 I 1 ACTING CHAIR NORMAN: I said 4.1, so -- all right. So the 2 answer is 4.1 I think. 3 MS. WALSH: Yes, I'm sorry. You're right. It's 3.9 4 ACTING CHAIR NORMAN: Okay.. 5 COMMISSIONER FOERSTER: It's hard to add when you're 6 testifying. 7 ACTING CHAIR NORMAN: No -- no, yes. 8 MS. WALSH: I'm really an engineer. Really. Really. 9 ACTING CHAIR NORMAN: Sure. Okay. That's fine. I just 10 wanted to set the stage here. So 11 MS. WALSH: You're absolutely right. 12 ACTING CHAIR NORMAN: the Commission to my knowledge 13 has not authorized storage and injection in excess of what the 14 original volumes and pressures were for obvious reasons, 15 because I think there's a certain comfort level in knowing 16 you're putting back what that original reservoir would contain. 17 You're asking now as I understand it to -- for authorization to 18 exceed both the volume and then the pressure by 10 percent. 19 And my question is what can you tell the Commission that would 20 justify us doing what ordinarily I think prudence would dictate 21 not to do? 22 MS. WALSH: We both the Pretty Creek Storage Unit and the 23 64 -5 sand in the -- in the 64 -5 sand at Swanson are able to 24 inject over the original -- inject and store over the original 25 reservoir pressure. R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 22 i 4 1 ACTING CHAIR NORMAN: By Commission order? 2 MS. WALSH: By Commission order. 3 ACTING CHAIR NORMAN: We authorized that? 4 MS. WALSH: Absolutely. 5 ACTING CHAIR NORMAN: What was the percentage on those, do 6 you recall? 7 MS. WALSH: On Pretty Creek it's 20 percent over. And on 8 Swanson.... 9 UNIDENTIFIED VOICE: 10 percent. 10 MS. WALSH: 10 percent over. 11 ACTING CHAIR NORMAN: All right. 12 COMMISSIONER FOERSTER: It was earlier us that authorized 13 that. 14 ACTING CHAIR NORMAN: Well, sure. But I mean we're the 15 Commission whoever was here so that's fine. Then that answers 16 that. I did not have that excess in mind. But again, let me 17 go back to kind of a basic common sense premise for the public 18 member of the Commission. Why would the Commission allow you 19 to put more into that reservoir than -- we have -- we have 20 demonstrated experience that that reservoir can contain 21 adequately a certain volume at a certain pressure. Why would 22 we exceed that based upon what's been provided to us? Can you 23 point to me what -- I mean I know you plan to fill it slowly, 24 et cetera, but you could also come back later on and ask for an 25 amendment based on what you experienced. Why would we start R & R C O U R T R E P O R T E R S 811 G STREET (907)277 - 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 23 1 1 out authorizing you to exceed original pressures and volumes by 2 some margin? 3 MS. WALSH: We do have -- I mean we have quite a bit of 4 data that shows us that the rock competencies far exceed the 5 kind of gradients that the original pressure would give us. So 6 we feel that -- I mean it's fairly safe to ask for this. Its 7 safe to ask for a 10 percent over. And we would certainly go 8 through filling a reservoir above original pressure with a lot 9 of prudence. 10 ACTING CHAIR NORMAN: And I would expect you would go 11 through it with prudence, but once -- what if -- is it an 12 option to authorize you to -- I want to give you the 13 opportunity to respond because eventually we'll come out with 14 an order so.... 15 MS. WALSH: Right. 16 ACTING CHAIR NORMAN: if the Commission -- let me ask 17 it this way. If the Commission were to come out with an order 18 and say yes, you may fill this reservoir to the original volume 19 at the original pressure, you always have the option to come 20 into the Commission later then with an application to amend 21 based on your experience. And it would just 22 MS. WALSH: Absolutely. I 23 ACTING CHAIR NORMAN: strike me that that's the more 24 P rudent course of action. 25 COMMISSIONER FOERSTER: I have another question when R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 24 . . 1 you're done. 2 MS. WALSH: Yes, absolutely we would have the option to 3 come back and ask for raising the reservoir pressure. 4 ACTING CHAIR NORMAN: And you may not be able to ask, but 5 I mean that is a possibility, but that's the way the 6 Commission's order would come out, so if there -- it's critical 7 that you have this extra margin by way of volume and pressure 8 in the original order then I think we'd want in the record or 9 you to direct us in the record. You mentioned the competency 10 formations, et cetera. And your belief is that's all in the 11 record before us what's been provided? 12 MS. WALSH: Yes. 13 ACTING CHAIR NORMAN: You're not relying on something is 14 known to UNOCAL that we don't know? 15 MS. WALSH: No. 16 ACTING CHAIR NORMAN: Okay. 17 COMMISSIONER FOERSTER: I have one more question. 18 ACTING CHAIR NORMAN: Please. 19 COMMISSIONER FOERSTER: Well, how'd you come up with the 20 total volume that you intend to inject? Is that based on 21 anticipation of production overage 22 MS. WALSH: Yeah, it's both 23 COMMISSIONER FOERSTER: during summer months or is it 24 just picking 10 percent and.... 25 MS. WALSH: The 10 percent pressure, when you -- you R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 2 5 • . 1 extrapolate it back up the P over Z plot is where you end up 2 getting the extra .2 Bcf. And even the extrapolation for the 3 original gas in place for this reservoir is an extrapolation 4 because at the time that the reservoir was opened it was 5 commingled with two other sands, so 6 COMMISSIONER FOERSTER: Okay. 7 MS. WALSH: both of those points are extrapolations. 8 COMMISSIONER FOERSTER: So the 4.1 Bcf wasn't a business 9 decision based on the -- to justify a compulsory (ph) we have 10 to do this or were going to have this much gas that we have to 11 deal with, it was simply a 10 percent over original? 12 MS. WALSH: Correct. 13 COMMISSIONER FOERSTER: Okay. 14 MS. WALSH: It also gives us the capability when we 15 operate our reservoirs to go right up to the original pressure. 16 'Cause if we limit it to the original pressure we're offering -- 17 were offering monitoring so much at the tail end that we 18 never actually get to the original pressure. 19 COMMISSIONER FOERSTER: You put a safety factor in? 20 MS. WALSH: Yes. Yeah. 21 COMMISSIONER FOERSTER: Okay. 22 ACTING CHAIR NORMAN: Very well. We -- I think that 23 concludes then, Ms. Walsh, your testimony in support of the 24 storage injection order. And I think you've done a good job 25 with laying it out for us. And, Commissioner Foerster, I'm R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 26 . . 1 assuming you have no more questions on the storage injection 2 order? 3 COMMISSIONER FOERSTER: Not at this time. But I'd like to 4 suggest that we go ahead and let Ms. Walsh do the aquifer 5 exemption 6 ACTING CHAIR NORMAN: Yes. 7 COMMISSIONER FOERSTER: and then take a short recess 8 to address questions that the staff may have on both 9 ACTING CHAIR NORMAN: Yes. 10 COMMISSIONER FOERSTER: rather than break it up into 11 two pieces. 12 ACTING CHAIR NORMAN: An excellent suggestion. 13 So Ms. Walsh, you can no proceed to address the aquifer 14 exemption order. 15 COMMISSIONER FOERSTER: And if we might have anymore 16 addition questions would you like me to go get my calculator? 17 MS. WALSH: No, I'm going to make somebody else come up 18 here and do the math 19 COMMISSIONER FOERSTER: Okay. 20 MS. WALSH: for me. Okay. Moving along to the 21 Freshwater Aquifer Exemption Application for the Ivan River Gas 22 -- or the Ivan River Field. 23 Slide number 13. This is, again, the structure map that 24 we showed earlier of the 71 - sand with, again, the blue line 25 outlining the Ivan River Unit boundary and the pink dashed line R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 27 . . 1 identifying the proposed boundary of the now aquifer exempt- -- 2 yeah, the aquifer exemption. 3 Slide number 14. This, too, is a repeat of an earlier 4 slide showing the open hole log information from the 44 -36 5 well. Whereas the 71 -3 sand is contained here in the 6 highlighted yellow, the purposes -- for the purposes of the 7 aquifer exemption the Beluga 71 -3 strata is defined as being 8 from the top of the pretty -- the PC4 coal to the top of the 9 PC5 coal, both of these being laterally continuous and good 10 identifiers of a strata. 11 Oops. For the aquifer exemption application we believe 12 that we've met the criteria for 13 COMMISSIONER FOERSTER: Slide 15. 14 MS. WALSH: Slide 15. Thank you, Cathy. For the state 15 regulations for granting an aquifer exemption. The Beluga 71 -3 16 strata does not currently serve nor intend to serve in the 17 future as a source of drinking water. The Beluga 71 -3 18 formation is hydrocarbon bearing. The remoteness of both the 19 Ivan River Unit and the depth of the 71 -3 strata makes 20 recovering water impractical economically. The total dissolved 21 solid contents of the ground water is more than 3000 and less 22 than 10000 parts per gal- -- per million. And it's not 23 reasonable to expect -- accept this as public water sources. 24 And there are numerous shallow freshwater sands that are better 25 for drinking water purposes. R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 28 • 1 Slide number 16. There are three water wells in the 2 immediate vicinity of Ivan River. Two of them actually on the 3 Ivan River Pad and one at Stump Lake, a pad right next to the 4 Ivan River Unit. These wells are available and show that there 5 are relatively shallow horizons in the water that are 6 freshwater sources. You can see these wells, the deepest of 7 which is 318 feet. 8 Slide number 17 is a -- its from our application and is 9 exhibit number 6. It shows nine water samples that were taken 10 from the Ivan River Field in the Tyonek and Sterling intervals 11 that surround the proposed storage strata. And they show that 12 our water salinities range from 4300 to 10700 parts per 13 million. 14 Further to describe and understand the water salinities 15 for the sand interval we did two petrophysical analyses. The 16 first we did here 17 COMMISSIONER FOERSTER: On slide 18. 18 MS. WALSH: Thank you, Cathy. Slide 18. The first we 19 used a Pickett Plot where an Rw was identified from the Pickett 20 Plot and a salinity was backed out. And you can see on this 21 actual slide the Beluga 71 -3 is the last sand and identifies a 22 salinity of 9300 parts per million. 23 Slide number 19. This petrophysical analysis was a 24 methodology that computed the apparent Rws using Archie's (ph) 25 equation. Then the open hole logs were tied with the apparent R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 29 • • 1 Rw and a water salinity curve was generated. 2 You can see -- you can't really see, but in the green 3 across the interval which is the 71 -3 sand, we have water 4 salinities that range from eight to 10000 parts per million. 5 This area right across here. 6 With those two approaches and with the water samples that 7 we have we feel like we really have identified the water 8 salinity to be in the range. 9 Slide number 20. So in summary, the freshwater aquifer 10 exemption request meets the criteria for granting of an aquifer 11 exemption. The granting this request will not endanger current 12 or future public drinking water sources. 13 The requested area and strata meet the following 14 regulatory criteria, the first of which is -- it is not a 15 drinking water source. The second, the strata is hydrocarbon 16 bearing. The strata is also at a depth and location making it 17 uneconomic to develop for drinking water. And the high 18 salinity of the strata is not reasonable as a public water 19 source. 20 Slide number 21. The data and evidence submitted in this 21 applications meets the criteria for the granting of the 22 freshwater aquifer exemption for the Beluga 71 -3 strata in the 23 proposed Ivan River Gas Storage Facility. 24 That concludes the aquifer exemption portion of my slides. 25 ACTING CHAIR NORMAN: Commissioner Foerster, questions? R & R C O U R T R E P O R T E R S 811 G STREET (907)277 - 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 3 0 • 1 1 COMMISSIONER FOERSTER: I have no questions. 2 ACTING CHAIR NORMAN: Ms. Walsh, I have just one question. 3 If you have -- do you happen to have in front of you page 10, 4 not of the slides but of your original application? 5 MS. WALSH: For the aquifer exemption? 6 ACTING CHAIR NORMAN: Let's see, yeah, I'm looking on page 7 10, I think it was a consolidated, but take it a quick look 8 here and see what it's entitled right here. It's Section 0 on 9 page 10 that I'm looking at. 10 MS. WALSH: That is the application for the injection 11 order. 12 ACTING CHAIR NORMAN: For the injection order? 13 MS. WALSH: Yes. 14 ACTING CHAIR NORMAN: Okay. So -- but it does address 15 aquifer exemption, correct? 16 MS. WALSH: Yes. 17 ACTING CHAIR NORMAN: Okay. And in the addressing of 18 aquifer exemption it states that the Ivan River Unit is 19 exempted as per 147.102(b) of the Code of Federal Regulations. 20 Do you see that? 21 MS. WALSH: Yes. And it was after -- after we submitted 22 the application for our gas storage order we worked with Winton 23 and read back over those and our interpretation was different. 24 We interpreted it as being a quarter mile around the wellbore 25 and the intent of that regulation was a quarter of a mile R & R C O U R T R E P O R T E R S 811 G STREET (907)277-0572/Fax 274 -8982 ANCHORAGE, ALASKA 99501 31 a • 1 around the Ivan storage sand which led us to need to apply for 2 an aquifer exemption for the 71 -3 strata. 3 ACTING CHAIR NORMAN: Okay. I appreciate that then. And 4 so your original application is amended and the slide that will 5 be in the record is what we should rely upon? 6 MS. WALSH: Yes. 7 ACTING CHAIR NORMAN: And then going a bit further here, 8 102(b) says the following aquifers are exempted in accordance 9 with such and such and it goes on to cite. And then it 10 references within the following fields, Swanson River, Beaver 11 Creek, Kenai, the portion of the aquifers beneath Cook Inlet 12 within a quarter mile lying directly below the following 13 fields, Granite Point, McArthur River, Middleground Shoal, 14 Trading Bay, but no where do I find -- how -- why would -- why 15 was that cited as creating an exemption for this particular 16 area? 17 MS. WALSH: It was cited in error. 18 ACTING CHAIR NORMAN: Okay. All right. And I accept 19 that. I know how that is. So this then is superseded by the 20 slide. That's what I wanted to clarify. 21 MS. WALSH: Yes, absolutely, it is. 22 ACTING CHAIR NORMAN: Very well. Thank you. Commissioner 23 Foerster, do you have anymore? 24 COMMISSIONER FOERSTER: I have nothing more (ph). 25 ACTING CHAIR NORMAN: What we would like to do then in R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 32 1 order to economize on everyone's time is the Commissioners will 2 take a 10 minute recess. We'll see if we have any final 3 questions, but the interim it will also be our intention to ask 4 -- perhaps we ought to do that right now. Are there any other 5 persons in the room -- in the hearing room that wish to address 6 the Commission with regard to this particular application? 7 All right. For the record the Chair sees no persons 8 asking to be recognized. So we will take a 10 minute recess 9 and come back on the record at 2:10 p.m. 10 (Off record) 11 (On record) 12 ACTING CHAIR NORMAN: All right. We'll go back on the 13 record. Ms. Walsh, we want to thank you for a good 14 presentation, you and your company, and I think a lot of very 15 valuable information's been provided to us. I don't believe we 16 have questions, but I'm going to leave it open for Commissioner 17 Foerster to interrupt me if she has a question that she would 18 like to ask. 19 COMMISSIONER FOERSTER: Nope. 20 ACTING CHAIR NORMAN: Very well. Then we have all the 21 information we need. And I think we've by our dialogue given 22 you some ideas of questions we have also. The matter will now 23 be submitted. There are no third party protests that have been 24 received. The record will be closed effective when we adjourn 25 at this hearing. By law the matter is then submitted to the R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 33 . . 1 Commissioners and by law within 30 days, but in this instance I 2 think we will be able to make a more -- much more expeditious 3 decision on this matter than that. 4 So I am going to ask one last time, again for the record, 5 if there are any other persons who have any testimony they 6 would like to offer on either the storage injection order 7 application or the aquifer injection application? For the 8 record, again, the Chair sees no one asking to be recognized. 9 And then without objection we will adjourn. 10 (Recessed - 2:10 p.m.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274 -8982 ANCHORAGE, ALASKA 99501 34 410 111 1 C E R T I F I C A T E 2 UNITED STATES OF AMERICA ) ) ss. 3 STATE OF ALASKA 4 I, Rebecca Nelms, Notary Public in and for the State of Alaska, residing at Anchorage, Alaska, and Reporter for R & R 5 Court Reporters, Inc., do hereby certify: 6 THAT the annexed and foregoing Public Hearing held on May 26th, 2011 was taken by Lynn Hall, commencing at the hour of 7 1:00 o'clock p.m, at the Alaska Oil and Gas Conservation Commission of Alaska in Anchorage, Alaska; 8 THAT this Public Hearing, as heretofore annexed, is a true 9 and correct transcription of the proceedings taken by Lynn Hall and transcribed by myself. 10 IN WITNESS WHEREOF, I have hereunto set my hand and 11 affixed my seal this 2nd day of June 2011 12 11 Q 13 Notary Public in and for Alaska My Commission Expires:10 /18/14 14 15 16 17 18 19 20 21 22 23 24 25 R & R C O U R T R E P O R T E R S 811 G STREET (907)277- 0572 /Fax 274-8982 ANCHORAGE, ALASKA 99501 • • STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION SIO 11 -01 Ivan River Unit Storage Injection Application May 26, 2011 at 1:OOpm NAME AFFILIATION PHONE # TESTIFY (Yes or No) t \,,,\ CD_CLA.4 ( CI) to \r•f\4i\ -2. <,) c c r) 0 6-Nreek,steipt, d / ( 4 t -7 / 4' A . 4-s_c-5---244----- /A ( 4z 7 0N. 0, 4 5 1 vi,) cvx N n K1/1AJ E ri-t4iii GVX 2 6 , 3 - Tif4 N 0 fr(1er► ' /Ix /I D )R /DD# - a &I- 617 44 G 2- -717 ��) �) ��► �► �1 a�.k VX � z t iA P Cox 2(03- 76LfO )v 0 •e--1T /I a AG " 61%41 , Giw fz 4e �j ce. 1�./�a �/�� s ,�cxcC ,z79- i �33 Alt: �A r 0.55 (vX ,9‘,3-793 No Chevron Ivan River - Gas Storage Facility • - Storage Injection Order Application - Aquifer Exemption Application Alaska Oil and Gas Conservation Commission • May 26, 2011 © Chevron 2005 Ivan River - Gas Storage Facility: ■1/ Storage Injection Order (SIO) Application: • Submitted to AOGCC on March 30, 2011 Freshwater Aquifer Exemption (AE) Application: • Submitted to AOGCC on April 14, 2011 © Chevron 2005 2 Ivan River - Gas Storage Facility: ` n 1/ ] Storage Injection Order (SIO) Application © Chevron 2005 3 Ivan River Unit - Location Map %. IWO Regional Cook Inlet Location Map so w. •117131 407 • • 1/44144 I Ivan River Unit c ..... . �., ■ „ S it d o : g e me me ra4 MT i ►]R/ i1Q�A I .' �iQ1 lei , 0 • s ' it. 1 Si'11E57a *1Q , UMW ,2_0 ATTACHMENT 1 Application for Injection Order for Gas Storage Ivan River Unit © Chevron 2005 4 . (n H rn "I 00 C N O O r• = O i'D a) = !EA EU 73 w"< 2.41111 AM VII AAMIW At Call _I.w1Ul IM Lill .bUII .4./!1111 114111, 11. Nal .14S *S1 ifei /l3 AL Mill .f,14111 .:. ' \ f W '4. 2 !tom 141 -53 4400_,_../ ?, I I: III _ tofiz , 314 \ . A... \\\■. t Ch — — N A 1111111L . 4 # _ I F c i -uu9v I 6 i. t i '--•••••••• """'" , -4 , 77717 L , II 11 • t map.' ate Itv IUI..'I IIII. t 1I11D!Y L1114!\ allot' t111Lt1' tt1IIJ11 1111'•11. t1ll.utt t11I' t ILUi* (( f Ln Ivan River - Gas Storage Facility: ` r 0 Storage Injection Order (SIO) Application: • Gas storage formation is the Beluga 71 -3 sand, within the Ivan River Unit • Beluga 71 -3 OGIP = 3.9 Bcf • Cumulative (and ultimate) primary recovery = 3.1 Bcf • Cumulative water produced = 460 BW • Application requests a maximum reservoir pressure of 3,183 psia • 110% of initial reservoir pressure (2,894 psia) • Max. SI WHP = 2,800 psig • Maximum expected injection rate = «20 MMcf /d • Maximum expected production rate = ^016 MMcf /d • Base Volume = 1.5 Bcf • Working Volume = 1.6 - 1.8 Bcf • Current reservoir pressure = 615 psi © Chevron 2005 6 Beluga 71 -3 Gas Storage - Containment Chevron Above: • The Beluga 71 -3 sand is topped by a N15' section of interbedded siltstone, clay -rich siltstone and mudstone, which is then topped by a N5' (TVD) coal (PC4 Coal pick). • The PC4 Coal is laterally extensive and easily picked in other wells across the Unit. • Above the PC4 Coal there is a thick, approximately 50 foot section of siltstone and mudstone creating an impermeable barrier above. Below: • The Beluga 71 -3 sand is underlain by N20' (TVD) of interbedded siltstone and mudstone. • Below the first 20 feet there are some laterally discontinuous sands interbedded with clay rich siltstones, mudstones and laterally continuous 4 to 6 foot coals. • The PC5 and PC6 Coals are laterally extensive and easily picked in other wells across the Unit. © Chevron 2005 I 1. Chevron _ ' ' i ' NI NO IRU 44 -36 Log � - -_ , .. Top Belirc�a F es, , r ! 1 Beluga 71 -3 Sand i I ( f ...._ . i I . . x apt. ! -- - - -- H Mt Beluga 71 -3 Sand - sue$ - . - . 3 S C C 6,829 - 6,856 MD =$ ( -5237' to -5257' SSTVD) — ._ 1 . ' , 1 ; ' Ce .a iiii i f • J pt • j . f II i 1.4..5.4 4.1•0 A.3a.2 . i ==g d = 4 , o © Chevron 2005 8 Beluga 71 -3 sand - Material Balance ` `/ Westside Ivan 44 -36 -- Sterling Beluga P/Z vs Cum Production Plot 4000 3500 3000 - • 2500 - • OGIP = 3.9 bcf depleted a2000 - \nearly N a. 1500 - 1000 - 500 - 0 ' , 0 5 10 15 Cum Gas Produced, bcf y = - 88 + 9188.2 © Chevron 2005 9 IRU 44 -36- Mechanical Integrity Chevron 1 1/ Existing wellbore: • Standard wellbore design: 13 -3/8" surface casing, with a 9- 5/8 "intermediate casing run to 3449' and followed by the 7" production casing to total depth. • 7 -inch casing set at 8,308' MD cemented with 550 sacks of 13.2ppg cement. • Cement bond log shows top of cement at 4,400' MD. Future Monitoring: • IRU 44 -36 will have a standard annulus test during the upcoming wellwork after packers have been set. • Monitoring of daily rates and pressure. Monthly reporting to the AOGCC. • Monitoring of Material Balance Plot of P/Z versus Cumulative Gas (produced and injected). © Chevron 2005 10 Gas Storage Facility - Wells Within Area chevron Well IRU 14 -31: • 7 -inch casing set at 7,018' MD • Cemented to 4,197' MD. Well IRU 13 -31: • 7 -inch casing set at 10,350' MD • Bond log shows cement to 3,453' MD. Well IRU 11 -06: • 7 -inch casing set at 10,020' MD • Bond log shows cement to 6,118' MD. Well IRU 41 -01: • 7 -inch casing set at 9,152' MD • Bond log shows cement to 5,000' MD. Well IRU 44 -01: • 9 -5/8 -inch casing set at 8,948' MD • Two stage cement job. Bond log shows cement from 6,347' - 4050' MD. © Chevron 2005 11 Chevron Ivan River - Gas Storage Facility: � n Freshwater Aquifer (AE) Exemption Application © Chevron 2005 12 Ivan River AE - - -_ .. x: :SC1 _I=_ n�x_ . X. €z C Xr C :x .. Chevron t Proposed Y � �--- - r — %/ Boundary x s- I I IR s y I I .., • u 1 .-- , :. A 41r7 11 4 T t 44 I ! . .f V ' I si 1, i k , , . ,. ,..., 1 II ) _ , 1 w a IR �� .4 -01 f _ .. s ' a..... 1 , 4 El 0 'T• FM .. 1 .. 76 Niill11111111111111 mokiliMMIIIMIll r ii / bye 111 2`3 c / « as a�as , ,, , r 7 - / ... / ' . - © Chevron 2005 s _ .7_: ,:<_ = : = ::,> 13 IRU 44 -36 Log " � op IB a F m ,, t t Beluga 71 -3 Strata 1 ■ { I a , ,_ _ ' *3 ' i 'D c rAI "Beluga 71 -3 strata y ` ; . ' 3 ' 4 :� • ya l .ai of T1l:' . • .Top of the PC4 Coal - j liii , • Top of the PC5 Coal ! , I. I i 6,809' - 6,919' MD 11=1.1="111 / ,c >• ,. r.. „,, . v i _ r . �6 Coo j » i S © Chevron 2005 ^ 14 Ivan River — Gas Storage y a Facilit : Chevron I Aquifer Exemption (AE) Application: • The application meets the criteria in 20 AAC 25.440 for the granting of an aquifer exemption • The Beluga 71 -3 strata does not currently serve (nor is expected to serve in the future) as a source for drinking water • The Beluga 71 -3 formation is hydrocarbon bearing • The remoteness of the Ivan River Unit and the depth of the Beluga 71 -3 strata makes recovery of water for drinking water purposes economically impractical • The total dissolved solids content of the ground water is more than 3,000 and Tess than 10,000 mg /I, and it is not reasonably expected to supply a public water system • There are numerous shallow freshwater sands which are better sources for drinking water © Chevron 2005 15 Water Well Data: Otiorron IWO Three (3) nearby water wells • Two (2) in the Ivan River Unit • One (1) at Stump Lake • Maximum water well depth = 318 ft Exhibit #5 - Local Water Well Data Well I Pad Location Depth Date Ivan River Unit 44-1 SEISE% Sec. 1. T-13-N, R -9 -W SM 247 ft 6.`1666 Ivan Rivcr -1 SE%SE% Sec. 1. T -13 -N. R -9 -W SM 245 ft 8 11 92 Stump Lake 44-33 SW� /;NE% Sec. 33, T -14-N. R- 9 -W SM 318 ft 1 26 78 (see attached Well Drilling Logs) © Chevron 2005 16 Water Salinity Data: Chevron Nine (9) IRU Tyonek or Sterling water samples Water salinities (TDS) range from 4,300 - 10,700 ppm . Exln'bit a6 - hen River Unit - Water Salinity Data Ivan River unit -Water Analyses Reset icy TDS Densay cot I4:S pH � 70 F 0ee1 2111* Depte [Saes ream y ore 3 ppm pi a+wem Comment IRL 1 9747 4 5 257 + 4050 8.76 tRli 11-35 6907 44.'«039 1:55C 1 }21:43 8 61 IRL 11-Z e573 4.1206 1 156 1 3360 8 71 98915931 :RL 23-12 'Nome 9903 -9915 21 1957 4 31:. 1 0 = 8.80 291.30 IiCT *7 Om 3.50em1. loam 770 8 D 9891.9931• ;FL 2112 Tyonarc 5603.9915 21 1567 5 317 1 0343 8.80 '91 30 I CT e7 (ID* 5 50ami beta 730 9.D 599 -9901 1RJ 2 3 1 2 2 Types( 99034515 :v. 7951 4 777 + •3:47 5.30 '92 70 i CT *7 flow 5 37pf1 I. bred 700 9'D 9991 -9931 4CT *7 {top 9adcsantle sample): Ica; 23-12 %c ow 9973 -9915 7.1 1957 4 378 ' '3730 9.30 213.30 lowed MB D :RL 44-35 Slerbe9 594 56574568 5 27:6 7.286 1 0070 7 .47 WV* 1 IRL 44-36 Searl+.q 59-5 5057 4558 5.11 "1736 7 075 1 3060 8 '3 sane 4 e 2 M491ea Cations L►+onde 8icarboeare Suits Ms 148 Ca Sr Ba Ft K 1 Yana Depea Data 1113.4 m91 m1y'i rr91 nit 'I m8•, nviT rock mnl mp1 IRU 11-05 r 9 442009 354 3.326 70 1 245 13 3 1 5 5 275 370 524 IF11i 11175 • 5903 442309 3.552 2,537 77 1 327 29 91 5 93 2 2 393 iRU 17.16 r 8607 442309 '.971 2.870 56 1.335 22 62 2 +23 324.30 1,334 938 -9901. IRLi 23-12 Tyenar 59018615 21.1587 53 2.750 913 9.193 8 8 5 0 247 41 , 9391 - 9901 4R1: 23-12 T3oi.. 99739915 Z1.1597 57 3,190 133 1 380 5 7 5.0 340 43 9891 -9831, +RV 23-12 Tweet 99034915 21.1967 57 2.943 95 1.355 6 8 647 46 9891 -9931. IRL 2312 Twat. 59039915 7i 7 1957 43 3,515 1 70 1 19' 7 10 6 0 020 60 IRU 44-36 9aer4+q 591 95574563 511 2005 2.854 1.655 7 1.553 62 99 1 4.0 13700 B14 445L 44-35 Seeanp 59.6 66E7-6568 5.11 2705 2 323 2215 38 1. 51 89 1 3.5 40 03 479 © Chevron 2005 17 Beluga 71 -3 Water Salinity: ` 9,300 ppm (from Pickett Plot analysis) Exhibit #8 - Ivan River Unit 44 -36 - Rw and Salinity from Pickett plots Ivan River Unit 44-36 Rw and Salinity from Pickett Plots Marker top depth bottom depth a m n Fmtemp Rw Salinity (NaCLppm) 1 36665 4707.0 1 18 2 86 0501 10,000 42071) 54189 1 1-8 2 94 0.380 12,300 5418.9 557913 1 18 2 101 0.301 14,700 Sterlingtlnaonfcxrnity 55793 59912 1 18 2 107 0.933 4,130 Sterling 58-4 64275 6443.0 1 L8 2 112 0.161 26,000 Stem in g 58-8 6180.0 6487.0 1 1.8 2 113 0.385 10, Sterling 59-0 6492.6 64980 1 18 2 113 0.418 9,000 Sterling 59-6 65535 6570.0 1 L8 2 113 0573 6,603 Sterling60-0 6599.7 66044 1 18 2 114 0.728 5,200 Sterling 60-2 5619.2 6623.3 1 w 18 2 _ 114 0.675 5,400 Sterling 61 -2 67U4 6719.3 1 18 2 115 0.250 15,500 Beluga 71 -3 6632.2 6855.6 1 18 2 117 0415 9,300 © Chevron 2005 18 IRU 44 -36 Water Salinity Profile Log: .� j Jr' Calculated IVAN -36 Salinity Log salinities '" 5r. ` range from _ _ a 1 __ : . - -_ 10,000 ppm ,,,, � .-/- \ Ed :: L4..'• iil` ` , t ��r ... h 5 .... • 1 - 1 i ? BiL;i I t I ., „), ..,..,.,_:_ Y N , A t t © Chevron 2005 ( N & ___ X19 Ivan River Aquifer Exemption: Chevron Summary: • This Freshwater Aquifer Exemption request meets the criteria in 20 AAC 25.440 for the granting of an aquifer exemption. • Granting this request will not endanger current nor future public drinking water sources. • The requested area and strata meet the following specific regulatory criteria: • 20 AAC 25.440(a)(1) - They do not currently serve as a source of drinking water, and cannot now and will not in the future serve as a source of drinking water because ... • 20AAC 25.440(a)(1)(A) - it is hydrocarbon producing or can be demonstrated by the applicant to contain hydrocarbons that, considering their quantity and location, are expected to be commercially producible; • 20 AAC 25.440(a)(1)(B) - They are situated at a depth or location that makes recovery of water for drinking water purposes economically or technologically impractical: • 20 AAC 25.440(a)(2) - the total dissolved solids content of the ground water is more than 3,000 and less than 10,000 mg /I, and it is not reasonably expected to supply a public water system. © Chevron 2005 20 ` iii Ivan River Aquifer Exemption: 1 10/ Conclusion: The data and evidence submitted in this application meets the criteria (20 AAC 25.440) for the granting of the Freshwater Aquifer Exemption, for the Beluga 71 -3 strata in the proposed Ivan River Gas Storage Facility. © Chevron 2005 21 �2 411 4. Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket #'s AEO -11 -01 and SIO 11 -01. Union Oil Company of California (UNOCAL), by application dated April 14, 2011, requests the Alaska Oil and Gas Conservation Commission (Commission) issue an order authorizing underground natural gas storage in the Undefined Gas Pool of the Ivan River Unit, well IRU 44 -36, in conformance with 20 AAC 25.252 and 20 AAC 25.412; and an Aquifer Exemption Order for the Ivan River Unit, in conformance with 20 AAC 25.440. The affected area for both requests is T13N, R8W, S6 SM; T13N, R9W, S1 SM; T14N, R8W, S31 SM; and T14N, R9W, S36 SM. The Commission has tentatively scheduled a public hearing on this application for May 26, 2011 at 1:00 pm at the Alaska Oil and Gas Conservation Commission, at 333 West 7 Avenue, Suite 100, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed by 4:30 p.m. on May 4, 2011. If a request for a hearing is not timely filed, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold the hearing, call 793- 1221 after May 9, 2011. In addition, written comments regarding this application may be submitted to the Alaska Oil and Gas Conservation Commission, at 333 West 7 Avenue, Suite 100, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on May 20, 2011, except that, if a hearing is held, comments must be received no later than the conclusion of the hearing. If, because of a disability, special accommodatio • : < be needed to comment or attend the hearing, contact the Commissio ': ' e - -*a . ssistant Jody Colombie, at 793 -1221, no later than May 23, 2011. • 1/111 ssiner Oan • m• STATE OF ALASKA • NOTICE TO PUBLISHER • ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM WITH ATTACHED COPY OF AO 02114031 ORDER ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE SEE BOTTOM FOR INVOICE ADDRESS F AOGCC AGENCY CONTACT DATE OF A.O. R 333 W 7th Ave, Ste 100 Jody Colombie April 15, 2011 ° Anchorage, AK 99501 PHONE PCN M 907 - 793 -1238 (9071 793 —127.1 DATES ADVERTISEMENT REQUIRED: ASAP o Peninsula Clarion P.O. Box 3009 Kenai, AK 99611 ITS E ATERI B TWE ENT H DOUBLE LINES MUST BE PRINTED IN SPECIAL INSTRUCTIONS: Type of Advertisement Legal® ❑ Display Classified (Other (Specify) SEE ATTACHED IVAN RIVER 44 -36 SEND INVOICE IN TRIPLICATE AOGCC, 333 W. 7th Ave., Suite 100 PAGE 1 OF TOTAL OF TO Anchorage, AK 99501 2 PAGES ALL PAGES$ REF TYPE NUMBER AMOUNT DATE COMMENTS 1 VEN 2 ARD 02910 3 4 FIN AMOUNT SY CC PGM LC ACCT FY NMR DIST LIQ 1 11 02140100 73451 2 3 4 REQUISITIONED BIATh DIVISION APPROVAL: ta, If STATE OF ALASKA NOTICE TO PUBLISHER • ADVERTISING ORDER NO. ADVERTISING INVOICE AFFIDAVIT MUST OF BEB IN PUBLICATION TRIPLICATE (PART SHOWI2 OF THIS NG ADVER FORM) TISING WITH ATTACHED CO ORDER NO., PY CERTIFIED OF /1 /L O_02114031 ORDER ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE SEE BOTTOM FOR INVOICE ADDRESS F AOGCC AGENCY CONTACT DATE OF A.O. R 333 West 7 Avenue. Suite 100 Jody Colombie Anril 15- 2011 ° Anchorage_ AK 99501 PHONE PCN M 907 - 793 -1238 (9071 793 -1221 DATES ADVERTISEMENT REQUIRED: ASAP o Peninsula Clarion PO Box 3009 Kenai, AK 99611 S THE MATERIAL ENTIRETY ON T E SHOWN LINES MUST BE PRINTED IN SPECIAL INSTRUCTIONS: AFFIDAVIT OF PUBLICATION United states of America REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. division. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. Before me, the undersigned, a notary public this day personally appeared ATTACH PROOF OF PUBLICATION HERE. who, being first duly sworn, according to law, says that he /she is the of Published at in said division and state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2010, and thereafter for consecutive days, the last publication appearing on the day of , 2010, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This _ day of 2010, Notary public for state of My commission expires 02 -901 (Rev. 3/94) AO.FRM Page 2 PUBLISHER E J I N S U L l PO Box 3009, Kenai, AK 99611 - (907) 283 -7551 - Fax (907) 283 -3299 State of Alaska/AOGCC Accounts Payable Invoice # 8706/2074 333 W 7th Ave, Suite 100 AO- 2114031 Anchorage, AK 99501 Date Quanity Total Public Hearing 04/20/11 Legal 11 101.75 Alaska 4 lr/j�f8 �� ►SSf�g� Total Due $101.75 Please include invoice and account numbers on all correspondence • • RECEIVED MAY nnerbgB PUBLISHER'S AFFIDAVIT UNITED STATES OF AMERICA, STATE OF ALASKA }ss: r Notice of Public Hearing STATE OF ALASKA Alaska 00 and G as Conservation Commission Denise Reece Re: Docket #'s AEO -11 -01 and SIO 11 -01. being first duly Union Oil Company of California (UNOCAL), by application dated April 14, 2011, requests the Alaska sworn, on oath deposes and says: Oil and Gas Conservation Commission (Commission) issue an order authorizing underground natural gas That I am and was at all times here storage in the Undefined Gas Pool of the Ivan River Unit, well IRU 44 -36, in conformance with 20 AAC in this affidavit mentions, Supervisor of 25.252 and 20 AAC 25.412; and an Aquifer Exemption Order for the Ivan River Unit, in conformance with 20' Legals of the Peninsula Clarion, a news - AAC 25.440. The affected area for both requests is T13N, R8W, S6 paper of general circulation and published SM; T13N, R9W, SI SM; T14N, R9W, S31 SM; and at Kenai, Alaska, that the T14N, R9W, S36 SM. The Commission has tentatively scheduled a public Public Hearing hearing on this application for May 26, 2011 at 1:00 pm at the Alaska Oil and Gas Conservation Commission, AO-2114031 at 333 West 7th Avenue, Suite 100, Anchorage, Alaska ' 99501. To request that the tentatively scheduled hearing' be held, a written request must be filed by 4:30 a printed copy of which is hereto annexed was p.m. on Mayo, 2011. published in said paper one each and If a request for a hearing is not timely filed, the , Commission may consider the issuance of an order every day for Orie successive and ' without a hearing. To learn if the Commission will hold e the hearing, calf 793 -1221 after May 9, 2011. consecutive day in the issues on the In addition, written comments regarding this application may be submitted to the Alaska Oil and following dates: Gas Conservation Commission, at 333 West 7th Avenue, Suite 100, , Anchorage, Alaska April 20, 2011 99501. Comments must be received no later than 4:30 p.m. on May 20, 2011, except that, if a hearing is held, comments must be received no later than the conclusion of the hearing. - X /7 (,or If, because of a disability, special accommodations may be needed to comment or attend the hearing, SUBSCRIBED AND SWORN to me before contact the Commission's Special Assistant, Jody Colombie, at 793 -1221, no later than May 23, 2011. t 6th . , o f May 2011 John K. Norman Commissioner i `• ♦ , i ! , COWS*, , 2017 87'06/20741 r - NOTARY PUBLIC in favor for the State of Alaska. My Commission expires 26- Aug -12 t RV F OT , - 4.1.1 4110" 11 M • PUBUC • �► r • • Fisher, Samantha J (DOA) From: Fisher, Samantha J (DOA) Sent: Friday, April 15, 2011 1:12 PM To: '(foms2 @mtaonline.net)'; '( michael .j.nelson @conocophillips.com); '(Von.L .Hutchins @conocophillips.com)'; 'AKDCWelllntegrityCoordinator; 'Alan Dennis'; 'alaska @petrocalc.com'; 'Anna Raff; 'Barbara F Fullmer; 'bbritch'; 'Becky Bohrer; 'Bill Penrose'; 'Bill Walker; 'Bowen Roberts'; 'Brady, Jerry L'; 'Brandow, Cande (ASRC Energy Services)'; 'Bruce Webb'; 'caunderwood'; 'Chris Gay'; 'Cliff Posey'; 'Crandall, Krissell; 'D Lawrence'; 'daps; 'Daryl J. Kleppin'; 'Dave Matthews'; 'David Boelens'; 'David House'; 'David Steingreaber; 'ddonkel @cfl.rr.com'; Delbridge, Rena E (LAA); 'Dennis Steffy'; 'Elowe, Kristin 'Erika Denman'; 'eyancy'; 'Francis S. Sommer'; 'Fred Steece'; 'Gary Laughlin'; 'Gary Rogers'; 'ghammons'; 'Gordon Pospisil'; 'Gorney, David L.'; 'Greg Duggin'; 'Gregg Nady'; 'gspfoff; 'Harry Engel'; 'Jdarlington (jarlington @gmail.com)'; 'Jeanne McPherren'; 'Jeff Jones'; 'Jerry McCutcheon'; 'Jill Womack'; 'Jim White'; 'Jim Winegarner; 'Joe Nicks'; 'John Garing'; 'John Katz'; 'John S. Haworth'; 'John Spain'; 'John Tower'; 'Jon Goltz'; 'Judy Stanek'; 'Kari Moriarty; 'Kaynell Zeman'; 'Keith Wiles'; 'Kelly Sperback'; 'Kim Cunningham'; 'Larry Ostrovsky'; 'Marilyn Crockett'; 'Mark Dalton'; 'Mark Hanley (mark.hanley @anadarko.com)'; 'Mark Kovac'; 'Mark P. Worcester'; 'Michael Dammeyer; 'Michael Jacobs'; 'Mike Bill'; 'Mike Mason'; 'Mikel Schultz'; 'Mindy Lewis'; 'MJ Loveland'; 'mjnelson'; 'mkm7200'; 'nelson'; 'Nick W. Glover; 'NSK Problem Well Supv'; 'Patty Alfaro'; 'Paul Decker (paul.decker @alaska.gov)'; 'Paul Figel'; 'PORHOLA, STAN T'; 'Randall Kanady'; 'Randy L. Skillern'; ' rob .g.dragnich @e)o(onmobil.com'; 'Robert Brelsford'; 'Robert Campbell'; 'Ryan Daniel'; 'Ryan Tunseth'; 'Scott Cranswick; 'Scott Griffith'; Scott, David (LAA); 'Shannon Donnelly'; 'Sharmaine Copeland'; Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); 'Sondra Stewman'; 'Steve Lambert'; 'Steven R. Rossberg'; 'Suzanne Gibson'; 'tablerk'; 'Tamera Sheffield'; Taylor, Cammy 0 (DNR); 'Teresa Imm'; 'Terrie Hubble'; 'Thor Cutler'; 'Tina Grovier'; 'Todd Durkee'; 'Tony Hopfinger; 'trmjrl ; 'Valenzuela, Mariam '; 'Vicki Irwin'; 'Walter Featherly'; 'Will Chinn'; Williamson, Mary J (DNR); 'Yereth Rosen'; 'Aaron Gluzman'; Bettis, Patricia K (DNR); caunderwood @marathonoil.com; 'Dale Hoffman'; 'David Lenig'; 'Gary Orr; 'Jason Bergerson'; 'Joe Longo'; 'Kevin Skiba'; 'Lara Coates'; 'Marc Kuck'; 'Mary Aschoff; 'Matt Gill; 'Maurizio Grandi'; Ostrovsky, Larry Z (DNR); 'Richard Garrard'; 'Sandra Lemke'; 'Talib Syed'; 'Wayne Wooster; 'William Van Dyke'; Woolf, Wendy C (DNR); Aubert, Winton G (DOA) (winton.aubert@alaska.gov); Ballantine, Tab A (LAW); Brooks, Phoebe L (DOA) (phoebe.brooks @alaska.gov); Colombie, Jody J (DOA) (jody.colombie @alaska.gov); Crisp, John H (DOA) (john.crisp @alaska.gov); Davies, Stephen F (DOA) (steve.davies @alaska.gov); Foerster, Catherine P (DOA) (cathy.foerster @ alaska.gov); Grimaldi, Louis R (DOA) (Iou.grimaidi @alaska.gov); Herrera, Matt F (DOA); Johnson, Elaine M (DOA) (elaine.johnson @ alaska.gov); Jones, Jeffery B (DOA) (jeff.jones @alaska.gov); Laasch, Linda K (DOA) (linda.laasch @alaska.gov); Maunder, Thomas E (DOA) (tom.maunder @alaska.gov); McIver, Bren (DOA) (bren.mciver @alaska.gov); McMains, Stephen E (DOA) (steve.mcmains @alaska.gov); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA) (bob.noble @alaska.gov); Norman, John K (DOA) (john.norman @alaska.gov); Okland, Howard D (DOA) (howard.okland @alaska.gov); Paladijczuk, Tracie L (DOA) ( tracie.paladijczuk @alaska.gov); Pasqua!, Maria (DOA) (maria.pasqual @alaska.gov); Regg, James B (DOA) (jim.regg @alaska.gov); Roby, David S (DOA) (dave.roby @alaska.gov); Saltmarsh, Arthur C (DOA) (art.saltmarsh @alaska.gov); Scheve, Charles M (DOA) (chuck.scheve @alaska.gov); Schwartz, Guy L (DOA) (guy.schwartz @alaska.gov); Seamount, Dan T (DOA) (dan.seamount @alaska.gov); Shartzer, Christine R (DOA) Subject: Notice of Public Hearing Ivan River Unit 44 -36 AEO -11 -01 Attachments: Ivan River Unit 44 -36 AEO- 11- 01.pdf 5:AikY cm,tha, FGshe4 rl is 4c.Sti aAacl, tiat4 Caro e-rvatt TVi, CO Uliiss1Ofl 907)793 -1223 ;: 907)276 -7542 (fax) 1 • • Mary Jones David McCaleb XTO Energy, Inc. IHS Energy Group George Vaught, Jr. Cartography GEPS P.O. Box 13557 810 Houston Street, Ste 200 5333 Westheimer, Suite 100 Denver, CO 80201 -3557 Ft. Worth, TX 76102 -6298 Houston, TX 77056 Jerry Hodgden Richard Neahring Mark Wedman Hodgden Oil Company NRG Associates Halliburton President 408 18 Street 6900 Arctic Blvd. Golden, CO 80401 -2433 P. Box 1655 Anchorage, AK 99502 Colorado Springs, CO 80901 Bernie Karl CIRI K &K Recycling Inc. Land Department Baker Oil Tools P.O. Box 58055 P.O. Box 93330 795 E. 94 Ct. Fairbanks, AK 99711 Anchorage, AK 99503 Anchorage, AK 99515 -4295 North Slope Borough Richard Wagner Gordon Severson Planning Department P.O. Box 60868 3201 Westmar Circle P.O. Box 69 Fairbanks, AK 99706 Anchorage, AK 99508 -4336 Barrow, AK 99723 Jack Hakkila Darwin Waldsmith James Gibbs P.O. Box 190083 P.O. Box 39309 P.O. Box 1597 Anchorage, AK 99519 Ninilchick, AK 99639 Soldotna, AK 99669 Kenai National Wildlife Refuge Penny Vadla Cliff Burglin Refuge Manager 399 West Riverview Avenue 319 Charles Street P.O. Box 2139 Soldotna, AK 99669 -7714 Fairbanks, AK 99701 Soldotna, AK 99669 -2139 \. ), \. q.\, \ ,\ ‘"k\ `Sy �1 • • Chevron Chantal R. Walsh Chevron North America Petroleum Engineer, P.E. Exploration and Production MidContinent/Alaska 3800 Centerpoint Dr., Suite 100 Anchorage, AK 99503 Tel: 263-7627 Email: WalshC@chevron.com April 14, 2011 Mr. Daniel T. Seamount, Jr., Chairman e Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 W 6ss" Anchorage, AK 99501 , � s tC " RE: Application for Freshwater Aquifer Exemption Ivan River Gas Storage Facility, Westside Cook Inlet, Alaska Dear Chairman Seamount, Union Oil Company of California ( "Union "), a wholly owned indirect subsidiary of Chevron Corporation, hereby requests that the Alaska Oil and Gas Conservation Commission grant a Freshwater Aquifer Exemption for the Ivan River Gas Storage Facility. The requested aquifer exemption will apply to the "Beluga 71 -3 strata," comprising of the intervals between the top of the Beluga PC4 Coal and the top of the Beluga PC5 Coal in the Ivan River Unit. Within the Ivan River Unit 44 -36 ( "IRU 44 -36 ") wellbore, these coal tops are at measured depths of 6,809 ft MD ( -5,223 ft SSTVD) and 6,919 ft MD ( -5,304 ft SSTVD), respectively. The aquifers within this depth range meet the criteria for exemption as specified in both the State and Federal regulations (20 AAC 25.440, 40 CFR 146.4, and 40 CFR 144.1 (g) (2) (iv)). Aquifers in this depth range do not currently serve as a source of drinking water nor are they expected to in the future in light of the remoteness of the area, and the fact that they lie within the bounds of the Susitna Flats State Game Refuge. Recovery of water from this depth for drinking water purposes is neither practical nor economic, considering the abundance of shallow fresh water aquifers in the area. Further, the total dissolved solids content is greater than 3,000 and less than 10,000 mg /I and it is not reasonably expected to supply a public water system. By separate filing (on March 30, 2011), Union submitted an application for a gas Storage Injection Order ( "S1O "), for the Ivan River Gas Storage Facility. The proposed Ivan River Gas Storage Facility comprises the Beluga 71 -3 reservoir in the Ivan River Unit, which is present over the depths of 6,829 ft to 6,856 ft MD ( -5,237 ft to -5,257 ft SSTVD) in the IRU 44 -36 well. This Freshwater Aquifer Exemption is being submitted in conjunction /support of the proposed Ivan River Gas Storage Facility SIO. Attached for your convenience are two copies of Union's application for Freshwater Aquifer Exemption for the Ivan River Gas Storage Facility project. This application is submitted in • accordance with the State of Alaska regulations 20 AAC 25.440 and is believed to include all of the information required under the Commission's statutes and regulations. If you have any questions concerning this application please contact me at 263 -7627. Sincerely, Chantal R. Walsh Petroleum Engineer, P.E. Enclosures Cc: Dave Whitacre, Chevron Sharon Sullivan, Chevron Project File 2 • • Application for a Freshwater Aquifer Exemption Ivan River Gas Storage Facility Westside Cook Inlet, Alaska April 2011 3 • • List of Exhibits Exhibit #1 Ivan River Unit - Locator Map Exhibit #2 Beluga 71 -3 Structure Map Exhibit #3 Geologic Stratigraphic Column Exhibit #4 North -South Cross Section Exhibit #5 Local Water Well Data Exhibit #6 Ivan River Unit - Water Salinity Data Exhibit #7 Ivan River Gas Storage Facility - Salinity Discussion Exhibit #8 Ivan River 44 -36 - Rw and Salinity from Pickett plots Exhibit #9 Ivan River 44 -36 - Water Salinity Profile Log 4 • • Introduction Union Oil Company of California ( "Union ") is requesting a Freshwater Aquifer Exemption for the Ivan River Gas Storage Facility. Exhibit 1 (and Attachment 1 of the SIO application) is a regional Cook Inlet location map showing the location of the Ivan River Unit relative to other Cook Inlet oil and gas fields. Exhibit 2 (and Attachment 2 of the SIO application) is a structure map on the top the Beluga 71 -3 formation. Superimposed on the structure map is an outline of the Ivan River Unit (solid blue line) and an outline of the requested aquifer exemption area (dashed red line). The legal description of the aquifer exemption area requested is listed below. The proposed Ivan River Gas Storage Facility (separate SIO application) is for the Beluga 71 -3 sand, in the Ivan River Unit. The 71 -3 sand is present over the depths of 6,829' to 6,856' MD (- 5,237' to - 5,257' SSTVD) in the Ivan River Unit 44 -36 (IRU 44 -36) well. IRU 44 -36 is the intended production/injection well for the gas storage facility. The 71 -3 sand is overlain by the PC4 Coal and underlain by the PC5 Coal. For purposes of this Freshwater Aquifer Exemption, the "Beluga 71 -3 strata" will be defined to include those intervals between the top of the PC4 Coal and the top of the PC5 Coal. In the IRU 44 -36 wellbore, the top of the PC4 Coal is at 6,809' MD (- 5,223' SSTVD) and the top of the PC5 Coal is at 6,919' MD (- 5,304' SSTVD). Union is requesting a Freshwater Aquifer Exemption for this defined Beluga 71 -3 strata, within the Ivan River Unit. Petrophysical analysis shows that the ground water associated with the Beluga 71 -3 strata, has Total Dissolved Solids ( "TDS ") content greater than 3,000 mg/1 and less than 10,000 mg /l. The salinity log analysis (discussed later in the application) shows salinities ranging from 6,000 to 10,000 mg/1 across the Beluga 71 -3 strata. Water samples acquired from the Sterling 59 -6 sand in the IRU 44 -36 wellbore (which is approximately 200 ft TVD above the Beluga 71 -3 sand) show TDS in the range of 7,200 mg/1 (shown in Exhibit 6). It is not reasonable to expect that the Beluga 71 -3 strata will ever supply a public water system, based upon the salinity calculations and water data, the location of the Ivan River Unit, the depth of the Beluga 71 -3 strata, and the fact that there is an abundant supply of shallow freshwater aquifers in the area. A more thorough discussion regarding water salinities and existing shallow water wells in the area is included later in this application. Union is making this request in order to provide for injection of natural gas into the depleted Beluga 71- 3 gas reservoir, in the Ivan River Unit. Authority for Granting Request The State of Alaska Oil and Gas Conservation Commission ( "AOGCC ") is authorized under 20 AAC 25.440(a) to grant Union's request for Freshwater Aquifer Exemption. Specifically, the data and evidence submitted with this application support the Freshwater Aquifer Exemption 5 • • approval under 20 AAC 25.440 (a)(1) because the Beluga 71 -3 strata "does not currently serve as a source of drinking water, and it cannot now and will not in the future serve as a source of drinking water because (A) it is hydrocarbon producing or can be demonstrated by the applicant to contain hydrocarbons that, considering their quantity and location, are expected to be commercially producible;" and (a)(2) because "the total dissolved solids content of the ground water is more than 3,000 and less than 10,000 mg/l, and is not reasonably expected to supply a public water system ". Aquifer Exemption Area Requested T -14 -N, R -9 -W SM Sec 36: SE 1/4 Sec 36: SE 1/4 of NE 1/4 T -14 -N, R -8 -W SM Sec 31: S 1/2 of SW 1/4 Sec 31: NW 1/4 of SW 1/4 Sec 31: SW 1/4 of NW 1/4 T -13 -N, R -8 -W SM Sec 6: NW 1/4 Sec 6: NW 1/4 of SW 1/4 T -13 -N, R -9 -W SM Sec 1: E 1/2 See the 71 -3 top structure map, Exhibit 2, for an outline of the requested aquifer exemption area (dashed red line). The area requested totals approximately 880 acres. Note that the requested aquifer exemption area is the same as the proposed SIO area and lies wholly within the Ivan River Unit. 6 • r Strata and Depths Requested This Freshwater Aquifer Exemption request is for the Beluga 71 -3 strata which includes those intervals between the top of the PC4 Coal and the top of the underlying PC5 Coal. These coal tops have respective depths of 6,809' MD (- 5,223' SSTVD) and 6,919' MD (- 5,304' SSTVD) in the Ivan River Unit 44 -36 wellbore. Evidence and Data to Support the Aquifer Exemption Request The Ivan River Unit is located on the west side of the Cook Inlet, within the boundaries of the Susitna Flats State Game Refuge. Exhibit 1 shows the location of the Unit, relative to other oil and gas fields in the Cook Inlet. The proposed Ivan River Gas Storage Facility will utilize the depleted Beluga 71 -3 gas sands. An aquifer exemption is needed for gas storage operations. The ground water associated with the Beluga 71 -3 strata (those sands between the top of the PC4 coal and the top of the PC5 Coal), in the Ivan River Unit area, has total dissolved solids (TDS) greater than 3,000 mg/l. Log analysis of the IRU 44 -36 well shows salinities ranging from approximately 6,000 to 10,000 mg/1, for the Beluga 71 -3 strata. Further discussion of the salinity analysis is given later in this application, as well as in Exhibit 7. In addition to the high salinity content of the water associated with the Beluga 71 -3 strata, the depth and remoteness of the Ivan River Unit, make it unreasonable to expect that this Beluga 71 -3 strata will ever supply a public water system. The Ivan River Unit lies within the Susitna Flats State Game Refuge, thus further reducing the likelihood of the 71 -3 strata ever being used as a freshwater source. Additionally, there are numerous shallow freshwater aquifers in the area. Exhibit 5 documents the shallow water wells in the area. Finally, the Beluga 71 -3 sand in the requested area is known to be hydrocarbon bearing, and to have contained commercial quantities of natural gas. As such, the sand is not suitable for sources of drinking water. Geologic Review Exhibit 3 shows the geologic stratigraphic column for the Cook Inlet Basin, Alaska. Note that the shallow Quaternary sand and gravel accumulations, which extend to a depth of approximately -3,000 ft SSTVD in the Ivan River Unit area, typically serve as the fresh water aquifers in the basin. Directly beneath the Quaternary fresh water zones are the Tertiary age sediments, followed by the Cretaceous and Jurassic sediments. The Tertiary or Kenai Group sediments are comprised of the Sterling, Beluga, Tyonek, Hemlock, and West Foreland formations. These formations of the Kenai Group account for most of the commercial oil and 7 • • gas production in the Cook Inlet. All of the Kenai Group formations are comprised of both reservoir and non - reservoir fluvial - derived deposits. Gas production from the Ivan River Unit has come from the Lower Sterling, Beluga and Tyonek Formations. The gas sands of Lower Sterling Formation are the shallowest, extending from a depth of approximately -4,850 feet SSTVD to the top of the Beluga at approximately -5,175 feet SSTVD. The Lower Sterling is comprised of interbedded sandstone, siltstone, mudstone, and coal. The Sterling Formation was most likely deposited in a higher- energy meandering to braided stream environment. The Lower Sterling section is approximately 320 feet TVD thick at Ivan River Unit. Underlying the Sterling is the Beluga Formation. The Beluga sands were deposited in a thinner, lower energy meandering stream system and are likely to be laterally discontinuous. These low - energy Beluga sands are inter - layered with abundant siltstones, mudstones and coals. The Beluga low- energy section is approximately 2,750 feet TVD thick at Ivan River Unit. Currently all Beluga gas production has been from the upper 350 feet TVD of the Beluga section. Although gas production continues in the Tyonek sands at Ivan River Unit, the Tyonek section was not reached in the IRU 44 -36 wellbore. The Tyonek is currently producing from gas sands in IRU 44 -01 and IRU 11 -06. The Tyonek Formation is comprised of meander belt and anastomosing stream sandstones, often amalgamated into thicker sandstone sections interbedded with siltstones, mudstones and thick coals and is approximately 4,850 feet thick at Ivan River Unit. Currently all Tyonek gas production has been from the upper 200 feet TVD of the Tyonek Formation. Exhibit 4 is a north -south cross section through the area. This cross section shows the overall good predictability of the Sterling and Beluga formations on a macro level. Individual sand bodies within the Sterling and Beluga formations are very discontinuous, as would be expected, given the fluvial nature of the depositional environment. Beluga 71 -3 Sand The Beluga 71 -3 sand is a channel sand that is highly depleted from earlier production in the IRU 44 -36 well. The sand has not been completed nor produced from any other well in the Ivan River Unit. The sand appears to transition to overbank siltstone and silty mudstone to the south in the IRU 41 -01 well, suggesting that the 71 -3 channel sands at the north end of the unit are isolated from the channel sands at the south end of the unit. The log section for IRU 44 -36 (Attachment 3 of Union's Storage Injection Order application) shows the 71 -3 sand at depths from 6,829 to 6,856 feet measured depth (MD). The 71 -3 sand is topped by a section of interbedded siltstone, clay -rich siltstone and mudstone, which is in turn, topped by a 5 foot (TVD) coal section (PC4 Coal pick). Above the PC4 Coal there is a thick, 8 • S —50 foot section of siltstone and mudstone creating an impermeable barrier above the proposed storage interval. Note that there are no permeable gas sands identified immediately above the 71 -3 sand in any of the Ivan River Unit wellbores. The 71 -3 sand is underlain by 20 feet (TVD) of interbedded siltstone and mudstone. Below this 20 feet of interbedded siltstone and mudstone, are some additional laterally discontinuous sands interbedded with clay rich siltstones and mudstones. These are in turn underlain by several laterally continuous 4 to 6 foot coals (PC5 and PC6 Coals). Note that the PC4, PC5, and PC6 Coals are laterally extensive and easily picked in other wells across the Ivan River Unit. These siltstone, mudstone and laterally continuous coal sections above and below the 71 -3 sand act as a seal. Groundwater Hydrology There are three (3) shallow water wells in the Ivan River Unit area (see Exhibit 5). These shallow water wells, as recorded with the State of Alaska, range in depth from 245 to 318 ft. There are two water wells within the Ivan River Unit and a third well at Stump Lake, which is approximately 3 miles away. There are no recorded water wells in the area drilled below 318 ft. Exhibit 5 lists the water wells in the local area as taken from the State of Alaska Department of Natural Resources records. Formation Water Salinity The Beluga 71 -3 formation (and surrounding strata) water salinity was determined by log analysis techniques, and further confirmed from produced water samples obtained from the Sterling 59 -6 formation in the IRU 44 -36 well. Limited water samples from other Ivan River Unit wells were also reviewed and are listed in Exhibit 6. The ground water associated with the Beluga 71 -3 strata, in the Ivan River Unit area, has total dissolved solids (TDS) greater than 3,000 mg /l. Log analysis of the IRU 44 -36 well (discussed in Exhibit 7) shows salinities ranging from approximately 6,000 to 10,000 mg/1, for the Beluga 71 -3 strata. Exhibit 8 is a table of interpreted salinities for various Sterling and Beluga intervals, obtained from a Pickett plot analysis (discussed in Exhibit 7). These Pickett plot interpreted salinities vary from 4,100 mg /1 to as high as 26,000 mg /1, from the Sterling unconformity down to the Beluga 71 -3 interval. The salinity interpreted for the Beluga 71 -3 sand, using the Pickett plot analysis, was 9,300 mg/l. Exhibit 9 shows the interpreted salinity profile log across the Beluga 71 -3 strata (PC4 to PC5 Coal strata +/- 50 ft). An extended salinity profile log section (from above the top of the Sterling Unconformity down to the bottom of the IRU 44 -36 wellbore) has also been included with this application, directly 9 • behind Exhibit 9. The salinity profile log shows salinities ranging from approximately 6,000 to 10,000 mg/1 across the Beluga 71 -3 strata. Also of note, salinity analysis for the Sterling 59 -6 zone, which is approximately 200 feet (TVD) above the Beluga 71 -3 sand, shows an average water salinity of approximately 6,200 mg/1. This compares closely to the salinities obtained from two water samples taken from the 59 -6 sand (within IRU 44 -36) in May 2005. Analysis of the two samples (Exhibit 6) shows an average TDS content of approximately 7,200 mg/1. Evidence of Hydrocarbons Based upon the gas production history from the IRU 44 -36 well (documented in Attachment 4 of the SIO application), there is conclusive evidence that commercial quantities of hydrocarbons were (and are) present in the Beluga 71 -3 sand. The material balance analysis for the Beluga 71- 3 gas sand (Attachment 5 of the SIO application) shows limited commercial gas remaining. The presence of commercial gas in this Beluga 71 -3 sand, combined with the depth of the formation, the remote location of the Ivan River Unit, and the high salinity of the associated water in the Beluga 71 -3 strata, support the overall conclusion that fresh water for drinking water purposes will never be sourced from the Beluga 71 -3 strata. The Depth Makes It Economically Impractical for Drinking Water Purposes This application requests an aquifer exemption for strata between the top of the PC4 Coal and the top of the PC5 Coal ( "Beluga 71 -3 strata "). In the IRU 44 -36 wellbore, the top of the PC4 Coal is at 6,809' MD (- 5,223' SSTVD) and the top of the PC5 Coal is at 6,919' MD (- 5,304' SSTVD). Note, that there are no recorded water wells in the local area which have been drilled deeper than 318 feet. Freshwater is readily available from numerous shallow Quaternary sands and gravel intervals. The cost to drill a water well down to the PC4 depth (- 5,223' SSTVD) is prohibitively expensive relative to the cost of a shallow water well. In addition to the prohibitive cost, the water salinity at this depth would also preclude it from being a suitable water source. The Quality of the Water is Diminished The water quality in the strata at or below the PC4 Coal depth (- 5,223' SSTVD), is much more saline than the fresh water sourced from the numerous shallow Quaternary sands and gravels. Log analysis shows the Beluga 71 -3 strata water to have a salinity of between 6,000 and 10,000 10 • mg/l. The additional cost associated with treating this water, would preclude it from ever being used as a source of drinking water. This is certainly true in light of the abundant fresh water available from shallow aquifers. Summary This Freshwater Aquifer Exemption request meets the criteria in 20 AAC 25.440 for the granting of an aquifer exemption. Granting this request will not endanger current nor future public drinking water sources. The requested area and strata meet the following specific regulatory criteria: 20 AAC 25.440(a)(1) - They do not currently serve as a source of drinking water, and cannot now and will not in the future serve as a source of drinking water because - 20AAC 25.440(a)(1)(A) - it is hydrocarbon producing or can be demonstrated by the applicant to contain hydrocarbons that, considering their quantity and location, are expected to be commercially producible; 20 AAC 2 5.440(a) (1) (B) - They are situated at a depth or location that makes recovery of water for drinking water purposes economically or technologically impractical: 20 AAC 25.440(a)(2) - the total dissolved solids content of the ground water is more than 3,000 and less than 10,000 mg/l, and it is not reasonably expected to supply a public water system. Conclusion The data and evidence submitted in this application meets the criteria in 20 AAC 25.440 for the granting of the Freshwater Aquifer Exemption, for the Beluga 71 - strata in the proposed Ivan River Gas Storage Facility. 11 • • Exhibit #1 - Ivan River Unit - Locator Map Regional Cook Inlet Location Map MEM age( 1 _ , A sar�a i 1 ux a,a •♦ ea ANCKN^ Ivan River Unit i ens i i Hrax n9[Dr a „ { t 1 1 ■ ,;..l. woof F i I. ! _ _.._.....�.. L A �.a 1. • UT 1 ..w r# i yWA 0 0 F0 J fra11011114Q VI NOM Aw r,..—.—................ ATTACHMENT 1 Application for Injection Order for Gas Storage Ivan River Unit 12 • • Exhibit #2 - Beluga 71 -3 Top Structure Map 3s9::: 37 : ass. -x smx 36ax•, 3h1:.x a«7A3 34a.'1G'C M4+= . 3 , 85000 li I R••••■•••■ ntiOL r — _ , 1 4. 4 - _a 1 IRU 3 ,11 - 1: j 1 I - U 1 ) I 0 44- g 14N 9W 43' - 1 r � \\ et ( A b t � : I . 1 _ , � , : a ry.eean _ ) lir ii I il 5 g r- 'I 1 � as6YK � rla4f IR 1 -- .a�...,9.. 1 317 4 i : i PI AY . 001,/ 0 ... Pi 1 ;..: -----... a e.r �.s..w o : ear lima yl 13 1 Lti c) El 7/23 FORM _ _ 6 S5 Y:.X 35 'S5K46 353G7'. 36t= 1€1':a. 1S2: D »10:0 364a 36SOM 13 • I Exhibit #3 - Geologic Stratigraphic Column System Series Lithology Formattion LEGEND thickness(feet) t- Rec. .'c: i :; .` =ii: Alluvium D .. ° Glacial • Conglomerate e , t v • . ••• W : - _ • - • - - - Sandstone la . - ; - Sterling Fm. Siltstone o = _____ - 0'- r J - - - - .. Mudstone/Shole - ='- ' = ' H Cool c p. Volconics Beluga Fm. 0 • 011 production Interval IA! 17- 6000' Q - - - - - - 4,#_ Gas production interval Z 0 IA Surface oil seeps — _ =_- _ * F— U � _ _ _ - Chuitna Memo REFERENCES 0 _� _ 1400 -270 1Y - • - • - - -• L Alaska Geological Sociely,1970,olf and gas fields in the Cook Inlet Bcekt,Alaska. - - -' - CakUrnood,K.Wand Fackler, W.C., 1972 Proposed W _ _ ....... 4 < strattgrapidc nomenclature for Kenai Group,Cook 7- .7 - -1."1: - - Inlet Basin,Aloska. Am. Assoc. Petroleum Y Geologists Bull, v-56 no. 4, p. 739- 754 '" - Magoon, L.B., Ond Claypool, G E.,1979, Petroleum I - - - - - Mid. Ground W Geology of Cook Inlet Basin, Alaska -- an • Shoal Mem• w no. 79 z eiploroti ae. model: U•S.G.S• open Ole report - - — ' - . • 2600'- 5000' 0 Oettennan,R.L.,and Reed, B.L.,1980,Stratigrophy, _ _ _ — ). Y Structure,ond Economic Geology of the Ilttamna F- Ouodrangl s, Alaska: U.S.G.S. Gull. 1368 -B. Fisher, M.A.,and Mogoon,L.8.,1978,Geologic From*. worn of Lower Cook Inlet ,Alaska,A.A.P..G.BWI., - - - - -- Vol. 62 No. 3, p.373 - 402. 0 e, .. 1' o,.o:ve Hemlock Congl.300' -900 Eocene . j Qo ▪ - •....r � WFo F so' ' _ 1 300'- 1400 I- D .�. :;. Matanuska Fm. W 0 - 8500 ALASKA OIL AND GAS tr J i Vii_'::•:; ' >'-: Unnamed 0' - 1800' CONSERVATION COMMISSION U _ __ __<_ Nome Fm. GENERALIZED co ;''' •' :, .' -`' o - 7000' STRATIGRAPHIC COLUMN Cl) ""-- - ,; = k intino Fm 0-2300 Q - _: is. Tukrdni Group CC 2 _ _ 0 - 9700' Cook Inlet Basin, Alaska J p p a p d 4 Talkeetna F. 6 DdD4d 0' - 8400' April, 1981 14 �r • Exhibit #4 — North -South Cross Section (Cross Section in attached folder) • • Exhibit #5 - Local Water Well Data Well / Pad Location Depth Date Ivan River Unit 44 -1 SE' SE'4 Sec. 1, T -13 -N, R -9 -W SM 247 ft 6/16/66 Ivan River 44 -1 SE' /4SE' Sec. 1, T -13 -N, R -9 -W SM 245 ft 8/11/92 Stump Lake 44 -33 SW1/4NE1/4 Sec. 33, T -14 -N, R -9 -W SM 318 ft 1/26/78 (see attached Well Drilling Logs) 16 I 11. :.hc 1.a.1-1 1410 raw . KraHberger Drilling Co. Well Drilling Log Well owner Mad= Driller: F Completion: b/16 66 Builder: City: Amuck Road /Brea Legal 1: Legal2: luan_B1uar unit 444 Depth: Zil Casing length: 2.44 Diameter: fl Rig type: CI Static level: . JJ Yield /GPM Finish of well pELforidad 2$7 - 247 liner 8 -6 Graff b -35 silt P clay 5s-111. sand 5$ 441silty land 41 -41 clean :and 4,g-,J t hah uing ills sand 71 -88 pauing_2n 11141 water _erauILfaaItu) R7 1 L .3 jg 4 183 - 179 clay. ail and:watar 17 (27 hard blue clay 1R7- 19Ly_reg Clay w 194414 Jagdyl„cJay 214 - -224 soft as ndstnne T24 -22$ biack. sand 2Z5 -238 he 11111 sandy slit 238.241 sand.graylL,rgcys 41- gnat water grail l 245-247 tl an, coarse gang 6• 4 0 , n40.4 « fro 1 1 1 0g4aV):E c l LAA 6 NOV 1 6 1992 r ALASKA DNR /DIV Of WATER VI 1/ 143 int EAGLE RIVER ALASKA • Kranberger Drilling Co. Well Drilling Log Well owner: Wince, Driller: la Completion: 2/11/9Z Builder: City: flgluga Road /Brea: loan Riva Legal 1: Legal2: luan Rluar 44 - T Depth: 24.5. Casing length: 24$ Diameter: $ Rig type: all Static Duel: =11 Yield /GPM 1-I1. finish of well: Artesian flow 5agpi 1-6 grauei G , and 6-31 blue clam 34 -46 cloak wa or :an�(sat l 114-2115 bum dig 2 eg..2o6 blue clay„i�,g�aj ?e.4-210 Iiltsan 2111-221 Wets) .send w /glyl•.altt, 2211-241 sllit,sand,iatpt 2,41 -243 water_sand,,gnt 243 -z 45 Artesian water hearing sandstana 31w .,Jscuzz[ pump. nn..1 e3' nt - 1 1/2" pipe • w ••• Ogg )ITE1) NOV 1 6 1992 CA ALASKA DNR /DIV OF WATER EAGLE RIVER ALASKA • • • 1 - ckl• -x . � ...._ ... . . afam, Krauberger Drilling Co. Well Drilling Log Wail owner: Slued Driller: E Completion: 1 /?6,/711 Builder: • Cltg: Bahigt Road /Rrea: Legal 1: • l.egal2: s s Depth: 11.1 Casing length: Diameter A Big tape: £1 Static leuei: .1.4 Vieh1• /GpM 384 Finish of meth Elnwad 1 gen:n a -s t111 3.111 mush keg 18-41 Nenrl,iilt.water -11 ng Land - 112-242 eau 241-222 rack" clay • 292 -297 .al • fey -3H . i'd4tnfl1 3ea -�� sse aluasi.zarassan 386 -311! avatar graual jltt of p '5 rib . . 1 .•`• cts6(Jwa, ag4IWID S OD r� �-r NOV 16 14s ALASKANS/01110F WATER 4 05°' EAGLE BYES ALASKA eVkmul La+: 61 15' S Lf 7,2 G � La : tSo• 9�' As.902" r +� . Ate q3� rVN R Giuc..4ion@ 4 ; ..5: letx.1 • • - E t wahtih uc.11 'i,t : c f • • Exhibit #6 - Ivan River Unit - Water Salinity Data Ivan River Unit - Water Analyses Resistivity TDS Density CO2 H2S pH @ 70 F Well Zone Depth Date mg/I g /cm"3 ppm ppm ohm /cm Comment IRU 11 -06 9700 4/8/2009 6,260 1.0050 8.76 IRU 11 -06 6900 4/8/2009 10,692 1.0080 8.61 RU 11-06 8600 4/8/2009 8,156 1.0060 8.71 9891 -9901, IRU 23-12 Tyonek 9903- 9915 2/1/1967 4,312 1.0020 8.80 291.00 HCT #7 (flow 3:50am); flowed 700 B/D 9891 -9901, IRU 23-12 Tyonek 9903 - 9915 2/1/1967 5,017 1.0040 8.80 191.00 HCT #7 (flow 5:50am); flowed 700 B/D 9891 -9901, IRU 23-12 Tyonek 9903- 9915 2/1/1967 4,777 1.0040 9.00 192.00 HCT #7 (flow 5:30pm); flowed 700 B/D 9891 -9901, HCT #7 (top Backscuttle sample); RU 23-12 Tyonek 9903 -9915 1/1/1967 4,378 1.0030 9.00 213.00 flowed 700 B/D IRU 44-36 Sterling 59-6 6557- 6568' 5/11/2005 7,286 1.0070 7.47 sample 1 IRU 44-36 Sterling 59-6 6557 - 6568' 5/11/2005 7,076 1.0060 8.13 sample 2 Anions Cations Chloride Bicarbonate Sulfate Na Mg Ca Sr Ba Fe K Well Zone Depth Date mg /I mg/I mg/I mg/I mg /I mg/I mg/I mg/I mg/I mg/I IRU 11-06 ' 9700 4/8/2009 864 3,026 70 1,265 13 31 1 9.5 276.00 524 IRU 11-06 ' 6900 4/8/2009 3,552 2,637 77 1,827 29 91 5 9.0 245.00 2,093 IRU 11-06 ' 8600 4/8/2009 1,971 2,870 58 1,335 22 62 2 12.0 324.00 1,334 9891 -9901, IRU 23-12 Tyonek 9903 - 9915 2/1/1967 60 2,750 90 1,190 8 8 5.0 2.00 41 9891 -9901, IRU 23-12 Tyonek 9903-9915 2/1/1967 50 3,190 100 1,380 8 7 5.0 0.40 43 9891 -9901, IRU 23-12 Tyonek 9903-9915 2/1/1967 57 2,940 96 1,355 6 8 6.00 46 9891 -9901, IRU 23-12 Tyonek 9903-9915 1/1/1967 43 2,615 110 1,195 7 10 8.0 0.20 60 IRU 44-36 Sterling 59-6 6557 - 6568' 5/11/2005 2,854 1,655 7 1,653 62 99 1 4.0 137.00 814 IRU 44-36 Sterling 59-6 6557 -6568' 5/11/2005 2,323 2,216 38 1,826 61 89 1 3.5 40.00 479 17 • • Exhibit #7 - Ivan River Gas Storage Facility - Water Salinity Discussion Salinity in the IRU 44 -36 well was calculated using a number of different methods. In the first method the Rwa was calculated over the entire well and then salinity calculated using equation 2 below. The Rwa was converted to an Rw at 75 degrees using the Arps equation (equation 1). rw_75 =rwa * ((temp +6.77) / (75 +6.77)) 1 . salinity in ppm = 10 * *((3. 562- (1og1o(rw_75- o.o123)))/o•955) 2 . This was then compared to Rw's generated from Pickett plots in wet sand zones, which uses the modified Archie equation: Rw @ Fmtemp = (Phit ^m) *ild /a (where m =1.8 and a = 1) This second method is highly dependent on clean wet sands being present within the well. Hydrocarbons and increased shale content will increase the apparent Rw value. The Pickett plots (shown below) illustrate the increased Rw due to hydrocarbons in the 4 th panel. The third method used to calculate salinities in the IRU 44 -36 well utilized the SP response equation. Note that there are several important factors assumed in this equation. SP is the response of a thick water sand relative to the response of a thick shale where SP = o. If a water sand is not fully water saturated (Sw = 1.0), the calculation will result in an Rw estimate that is too high. Removal of baseline drift is also required and this is done by applying a depth dependent algorithm which enables thick shales to have an SP value of about O. Shales (impermeable sedimentary rocks) are indicated when shallow, medium and deep resistivity values stack at relatively low resistivity values. Sometimes SP logs are arbitrarily shifted by logging engineers to keep the SP response within scale. These shifts are also accounted for in this analysis. When the baseline drift and arbitrary SP shifts are accounted for, the resulting SP log is called SSP. Equation 3 can be solved for Rw and SSP substituted for SP as seen in Equation 4. SP = - K Loglo(RMF /Rw) = - [61 + 0.133 Temp( °F)] Logio(RMF /Rw) 3. Rw = RMF 10[SSP /(61 + 0.133 Temp( °F))] 4• • • CALC.PHIT vs. WIRE.RESD Crossplot Well: IVAN R_44 -36 Intervals: 4 selected Filter: CALC.VSH<0.3 & CALC.COAL = =O 0 0 1 _ o o 3505 O O O O - O • 0 O ^O O O O 0 O O 0 o 4 1 3 W VAN 1 n i l EC ON Zo Eiji::: IVAN d-31 ,,.,, rrm ti ? a CON NG ZONE O . -- -- - 11511 - - -'- 4111 O ' +R. - 11• - I-1 4 4N1 --- et ri f 1, o£ f ; M o £ £ I l 11{1 I i\\ ∎ if l ,1N 111 ; • \\ -++ -- o < II F- 0., r ul t 111 . -- -. PA ..... - 1 -}iN ::: �� .SH t: .• .__ Ill - -..- _ :11 11:1 111 -�- -- - it 4n, f -4<' 111 111 111 111 1111 111 . 11: 41 -141 41 Rw = 0.500 Rw = 0.380 1, 1 it/ANA 44 I :1 . IVAN _R_444.1S6_ •:1 • -. MIN 1. AI \6 , UEC'ION ONE STERLING_L)NC' ;.F., i- - 1 --1- ;: .., .. 1111 ,,.. : .... : -.... h4 -- - - . t. 1X - - - . 14 ` 111 ... . 4}t1 - _ - 1 . , � 1 - -- I:. - \\ T £ C 1 A' u Z.. i :ii ° to • M 0 15: ~ £ ' 'F £ ') 114 III III 1111 H� \ J -. ci 0.1 11 ,- 11 N \\ . \ . 11 - .... .. ,m .... \\ e` e' m . Q , ■' ' U - -- - -F1'. 1 W1 - -- -.. 1 X1 .... ;de - - -- - - 4yi f . 440:: ::::: • -- -- - -;t!! ---t-- - ; ^;t i . y ._ .• itH --- -' " 4. --- -- - ah1 - "f- - -141- ••• 3 :W Rw =0.301 i Rw = 0.932 0 0 0 0 0 c �� °o 0 0 0 0 O O O C O - O p O O O O WIRE.RESD_1 (OHMM) WIRE.RESD_1 (OHMM) 1 146 Color: FREQUENCY Intervals: IVAN 14 -31 BASE INJECTION ZONE NAN 13 -31 TOP UPPER CONFINING ZONE IVAN 13 -31 TOP INJECTION ZONE STERLING_UNC - Figure showing Rw determinations from Pickett plots for 4 zones in the Sterling Formation in the IRU 44-36 well. 19 • • Equation 3 indicates that the more different RMF is from Rw, the greater the SP response. Thus, in the situation where RMF /Rw = 1.0, the SP log will not be an especially good indicator of reservoir and non - reservoir in a sequence of sands, shaly sands and shales. Normally well construction is designed such that RMF > Rw and in this situation the SP response of a water sand will be negative. When RMF < Rw, the SP response is said to be reversed as the SP response of a water sand will be positive. SP logs from the Ivan River Unit exhibit all 3 types of responses. Analysis of Ivan River #44 Analysis of the SP log from the Ivan River #44 -36 well is shown as Exhibit #9. This log plot contains 8 tracks: TRACK 1 contains the GR (red), SSP (green) and caliper (blue) logs, TRACK 2 contains and interpretive lithology, TRACK 3 contains shallow SFL (black), medium ILD (green) and deep ILD (red) resistivity logs, TRACK 4 contains Nphi (red), Rhob (magenta), TRACK 5 has Sonic (blue) and Total Gas TLGS (red), Track 6 has Rwa(blue), TRACK 7 has Salinity from Rwa (green) and TDS from a water sample, and finally, TRACK 8 has Phie (olive green). The formation temperature (F temp) assumes a linear gradient from 50 °F @ a depth of 1,000 feet to the measured BHT of 134 °F at about 6,432 TVD feet. The RMF log plotted uses Fmtemp in the Arps equation to correct measured RMF = 1.04 @ 64 °F to the in situ temperature. The SSP log is the result of removing baseline drift and various arbitrary shifts from the SP log. The estimate of Rw is calculated using Equation 2 in which these logs are used as input. The salinity log is based on digitization of the Schlumberger chart Gen -9 for a temperature of 100 °F in which the Arps equation is again used to account for the temperature difference between 100 °F and the formation temperature. Low values of salinity are extrapolations of the Gen -9 chart and thus should be considered subject to possible error. Fmtemp = (36.4016 + 0.0129862 *(TVD)) in Degrees F. Several important features are seen in the log plot, Exhibit #9. Note that in the upper Sterling, the shallow SFL reads higher than the ILD, indicating invasion. Also, note that below about 5,650 feet MD, the calculated salinity is very noisy but averages about 5,600 ppm. The noise is partially due to wellbore rugosity and coal. The variability of the computed Rw and salinity in the Sterling below 5,650' MD suggests that the SP response is affected by the occurrence of hydrocarbons. Evident in the sedimentary rock below the Beluga Coal is an increase in computed Rw (and decrease in salinity). The computed salinity is about 5,000 ppm. Gaps in the calculated salinity log represent shaly and coal intervals where the estimate is not accurate. There is an apparent increase of salinity to about 16,000 ppm between the depths of 6,4O0 to 6,450 feet MD. This is related to Sterling 58 -4 sand, which produced gas from perforations at 6,431 to 6,44o ft MD. The Sterling 59 -6 zone was also 20 • 0 perforated and produced gas. Two water samples were gathered from the Sterling 59 -6 zone, which yielded TDS measurements of 7,286 and 7,076 ppm, respectively (see Exhibit 6). These compare to calculated values of 5,713 and 6,710 ppm (calculated from the Rwa). 21 • • Exhibit #8 - Ivan River Unit 44-36 - Rw and Salinity from Pickett plots Ivan River Unit 44 -36 Rw and Salinity from Pickett Plots Marker top depth bottom depth a m n Fmtemp Rw Salinity (NaCL ppm) 3666.5 4207.0 1 1.8 2 86 0.501 10,000 4207.0 5418.9 1 1.8 2 94 0.380 12,300 5418.9 5579.3 1 1.8 2 101 0.301 14,700 Sterling Unconformity 5579.3 5991.2 1 1.8 2 107 0.933 4,130 Sterling 58 -4 6427.5 6443.0 1 1.8 2 112 0.161 26,000 Sterling58 -8 6480.0 6487.0 1 1.8 2 113 0.386 10,300 Sterling 59 -0 6492.6 6498.0 1 1.8 2 113 0.418 9,000 Sterling59 -6 6553.5 6570.0 1 1.8 2 113 0.573 6,600 Sterling 60 -0 6599.7 6604.4 1 1.8 2 114 0.728 5,200 Sterling 60 -2 6619.2 6623.3 1 1.8 2 114 0.676 5,400 Sterling61 -2 6711.4 6719.3 1 1.8 2 115 0.250 15,600 Beluga 71 -3 6832.2 6855.6 1 1.8 2 117 0.415 9,300 22 0 • Exhibit #9 - Ivan River Unit 44-36 - Water Salinity Profile Log IVAN -36 Salinity Log - VOL SI r SFL -8o SSP V 20 0 VOL CONG rU 1 OHMM 100 0.6 N HI SS 0 GR m 0 m IlE1 RHOB TLGS SALINITY 0 GAPI 120 y= y N -' VOL SAND ' ' 1 OHMM 100 1.65 G /C3 2.65 -1 500 0 PPM 30000 vN i - • > `r - i � , CALI VOL SH — , 6 IN 16 ,7--- „ , 1 O HMM ILM inn ,. NPHI Ls DTC RWA TDS PHI F 150 US / 5 0 0.10HMM 2 0 1 �G ^0 Belu. a ( 3759.55186.0 - _ _ ' • • . • 1 � 5200 =— — . ' 5 ' \ I ( 6800 iC I 71 - c — __ 23 _ 6650 S it / ,. , i., ,i-l_ 72- 7' \ ) 6900 � \ 5300 . � � 1 ( ! i I I t , 1 ) .. - An extended salinity profile log (from above the top of the Sterling Unconformity down to bottom of the IRU 44 -36 well) is attached in the following folder 23