The URL can be used to link to this page

Home My WebLink AboutCO 685INDEX CONSERVATION ORDER NO. 685 Hemlock Oil Zone Lower Tyonek "G" Oil Zone Exploratory Well Kenai Peninsula Borough, Alaska 1. October 25, 2013 Cook Inlet Energy, LLC's (CIE) request for permission to comingle Hemlock and Tyonek G 2. December 18, 2013 CIE's additional requested information regarding request to commingle the Lower Tyonek G `0' oil zone (previously referred to as the Tyonek G) with the producing Hemlock in Sword # 1 3. December 19, 2013 Notice of Public Hearing, Affidavit of Publication, email distribution, mailings INDEX CONSERVATION ORDER NO. 685 • • STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue, Suite 100 Anchorage Alaska 99501 Re: THE APPLICATION OF Cook Inlet Energy, LLC for authorization under 20 AAC 25.215(b) to allow for the downhole commingling of production in the Sword No. 1 well (PTD 213-080). IT APPEARING THAT: Docket Number: CO-13-29 Conservation Order No. 685 Hemlock Oil Zone Lower Tyonek "G" Oil Zone Exploratory Well Kenai Peninsula Borough, Alaska Date March 5, 2014 1. By letter received October 251h, 2013, and additional information received December 181h, 2013, Cook Inlet Energy, LLC (CIE) requested approval under 20 AAC 25.215(b) to allow for the downhole commingling of production from the Hemlock and Lower Tyonek "G" Oil Zones in the Sword No. 1 exploratory well. 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) tentatively scheduled a public hearing for January 28, 2014. On December 19, 2013, the AOGCC published notice of the opportunity for that hearing on the State of Alaska's Online Public Notice website and on the AOGCC's website, electronically transmitted the notice to all persons on the AOGCC's email distribution list, and mailed printed copies of the notice to all persons on the AOGCC's mailing distribution list. On December 20, 2013, the notice was published in the ANCHORAGE DAILY NEWS. 3. No protest to the application or request for hearing was received. 4. Because CIE provided sufficient information upon which to make an informed decision, the request can be resolved without a hearing. 5. The tentatively scheduled hearing was vacated on January 23, 2014. FINDINGS: 1. CIE is the operator of the Sword No. 1 exploratory well, located on the west side of the Cook Inlet, Kenai Peninsula Borough, Alaska. 2. The Sword No. 1 is a deviated exploratory well with an onshore surface location 2,195 feet from the south line and 1,860 feet from the west line of Section 16, Township 8 North, Range 14 West, Seward Meridian (S.M.). The offshore bottom -hole location is approximately 2,610 feet from the north line and 646 feet from the west line of Section 2, Township 8 North, Range 14 West, S.M. 3. The surface location of Sword No. 1 is situated on acreage owned by Cook Inlet Region, Inc. (CIRI). The bottom -hole location of the well lies within State of Alaska lease ADL 17602 Segment 1. Conservation Order No. 685 • March 5, 2014 Page 2 of 3 4. The AOGCC received no comments, objections or protests in response to the public notice regarding the application under 20 AAC 25.215(b) for downhole commingling of production in the Sword No. 1 Well. 5. The Sword No. 1 well encountered producible quantities of oil in the Hemlock and Lower Tyonek "G" Zones. Estimated original oil in place in the two zones is 864 MBO and 250 MBO respectively. 6. The Hemlock and Lower Tyonek "G" Zones have similar rock properties with porosities averaging about 14%, permeability averaging about 4 md, and water saturation about 45- 50%. Both zones exhibit a normal pressure gradient. 7. The Hemlock and Lower Tyonek "G" zones are separated by approximately 500 feet true vertical distance. 8. The productive intervals in the Sword No. 1 well lie on two State of Alaska leases, ADL 359111, which is in the existing West McArthur River Unit (WMRU), and ADL 17602, which is immediately adjacent to the WMRU. 9. On August 23, 2013, the AOGCC issued Conservation Order 675, which approved a spacing exception under 20 AAC 25.055(a)(1) to allow the Sword No. 1 well to test for and produce oil within 500 feet of a property line where ownership or landownership changes. 10. The Sword No. 1 is currently producing from the Hemlock Zone. Cumulative production through December 2013 was approximately 26 MBO and the well has averaged approximately 600 BOPD over its life. 11. CIE estimates that the flow potential of the Lower Tyonek "G" by itself would be only 250-300 BOPD and that this rate would not justify a standalone well of the departure necessary to reach the accumulation. 12. The reservoir pressure of the Hemlock and Lower Tyonek "G" zones is approximately 3,900 and 3,700 psi respectively with a normal pressure gradient between them. 13. Production from the Sword No. 1 can be allocated by several methods. First would be comparing the production rates from the Hemlock only production that is currently occurring to the commingled production that would occur once the Lower Tyonek "G" is perforated. Second, would be to conduct periodic production logging. Finally, the production can be allocated based on geochemical analyses. CONCLUSIONS: 1. Based upon the reservoir pressure in the Hemlock and Lower Tyonek "G" Zones in the Sword No. 1 well and the similar reservoir properties between the two zones if commingling commences before the Hemlock pressure is too depleted from the ongoing production, the two zones can be commingled in the same wellbore with minimal crossflow between the zones. 2. Commingling production from the Hemlock and Lower Tyonek "G" zones will increase the flowrate from the well and thus improve the economics for the well, which should prevent waste and lead to increased ultimate recovery from the well as compared to producing the zones separately. 3. Allocating production initially based on a comparison of surface flow tests conducted before and after the Lower Tyonek "G" Zone is perforated and then by conducting periodic production logging to adjust the allocation as production characteristics change will provide acceptable production allocation between the Hemlock and Lower Tyonek "G" Zones. Conservation Order No. 685 is is March 5, 2014 Page 3 of 3 NOW THEREFORE IT IS ORDERED: Pursuant to AS 31.05.030 and 20 AAC 25.215(b), the downhole commingling of production between the Hemlock and Lower Tyonek "G" Oil Zones in the Sword No. 1 is hereby approved with the following conditions: 1. Initial production allocation between the Hemlock and Lower Tyonek "G" Oil Zones shall be based upon a comparison of well tests conducted before and after the Lower Tyonek "G" Oil Zone is perforated and brought into production. 2. The operator shall conduct production logs on at least a yearly basis and adjust the allocation of production between the Hemlock and Lower Tyonek "G" Oil Zones. 3. Copies of all tests and logs used for determining allocation of production shall be submitted to the AOGCC within 30 days. Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the AOGCC may administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. DONE at Anchorage, Alaska and dated March 5, 2014. 11�1 (/ Cathy P. Foerster Chair, Commissioner L Daniel T. Seamount, Jr. Commissioner 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 AOGCC grants for good cause shown, a person affected by it may file with the AOGCC 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 AOGCC 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 AOGCC 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 AOGCC mails, OR 30 days if the AOGCC 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 AOGCC 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 AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC 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 AOGCC 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. Singh, Angela K (DOA) From: Colombie, Jody J (DOA) Sent: Wednesday, March 05, 2014 2:25 PM To: Tim Jones (tim Jones@cookinlet.net); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Ferguson, Victoria L (DOA); Foerster, Catherine P (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Hunt, Jennifer L (DOA); Johnson, Elaine M (DOA); Mumm, Joseph (DOA sponsored); Paladijczuk, Trade L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA) Subject: co 685 (CIE) Sword #1 Well Attachments: co685.pdf Jody J. Colombie Special Staff Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, Alaska 99501 Jodg. Colombie(a)alaska.gov Office: (907) 793-1221 Fax: (907) 2 76- 7542 • • Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Wednesday, March 05, 2014 2:32 PM To: '(michaelj.nelson@conocophillips.com)'; 'AKDCWellIntegrityCoordinator'; 'Alexander Bridge'; 'Andrew VanderJack'; 'Anna Raff'; 'Barbara F Fullmer'; 'bbritch'; 'Becky Bohrer'; 'Bill Barron'; 'Bill Penrose'; 'Bill Walker'; 'Bob Shavelson'; 'Brian Havelock'; Burdick, John D (DNR); 'Cliff Posey'; 'Colleen Miller'; 'Crandall, Krissell'; 'D Lawrence'; 'Daryl J. Kleppin'; 'Dave Harbour'; 'Dave Matthews'; 'David Boelens'; 'David Duffy'; 'David Goade'; 'David House'; 'David McCaleb'; 'David Scott'; 'David Steingreaber'; 'David Tetta'; 'Davide Simeone'; 'ddonkel@cfl.rr.com'; 'Donna Ambruz'; Dowdy, Alicia G (DNR); 'Dudley Platt'; 'Elowe, Kristin'; 'Evans, John R (LDZX)'; 'Francis S. Sommer'; 'Frank Molli'; 'Gary Schultz (gary.schultz@alaska.gov)'; 'ghammons'; 'Gordon Pospisil'; 'Gorney, David L.'; 'Greg Duggin'; 'Gregg Nady'; 'gspfoff'; 'Jacki Rose'; 'Jdarlington oarlington@gmail.com)'; 'Jeanne McPherren'; 'Jeffery B. Jones (Jeff jones@alaska.gov)'; 'Jerry McCutcheon'; 'Jim White'; 'Jim Winegarner'; 'Joe Lastufka'; 'Joe Nicks'; 'John Easton'; 'John Garing'; 'Jon Goltz'; Jones, Jeffrey L (GOV); 'Juanita Lovett'; 'Judy Stanek'; 'Julie Houle'; 'Julie Little'; 'Kari Moriarty'; 'Keith Wiles'; 'Kelly Sperback'; Kiorpes, Steve T; 'Klippmann'; 'Laura Silliphant (laura.gregersen@alaska.gov)'; 'Leslie Smith'; 'Lisa Parker'; 'Louisiana Cutler'; 'Luke Keller'; 'Marc Kovak'; 'Mark Dalton'; 'Mark Hanley (mark.hanley@anadarko.com)'; 'Mark P. Worcester'; 'Mark Wedman'; 'Marquerite kremer (meg.kremer@alaska.gov)'; 'Michael Jacobs'; 'Mike Bill'; 'Mike Mason'; Mikel Schultz; Mindy Lewis; MJ Loveland; mjnelson; mkm7200; nelson; Nick W. Glover, Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Decker (paul.decker@alaska.gov); 'Paul Mazzolini'; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; 'Randy Redmond'; 'Rena Delbridge'; 'Renan Yanish'; 'Robert Brelsford'; 'Ryan Tunseth'; Sandra Haggard; Sara Leverette; 'Scott Griffith'; Shannon Donnelly; Sharmaine Copeland; 'Sharon Yarawsky'; Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; 'Stephanie Klemmer'; Sternicki, Oliver R; Steve Moothart (steve.moothart@alaska.gov); Steven R. Rossberg; 'Suzanne Gibson'; Tamera Sheffield; 'Tania Ramos'; 'Ted Kramer'; Temple Davidson; Terence Dalton; Teresa Imm; Thor Cutler; 'Tim Mayers'; Tina Grovier (tmgrovier@stoel.com); Todd Durkee; Tony Hopfinger; trmjrl; 'Tyler Senden'; Vicki Irwin; Vinnie Catalano; Walter Featherly; Yereth Rosen; 'Aaron Gluzman'; 'Aaron Sorrell'; Ajibola Adeyeye; Alan Dennis; Andrew Cater; Anne Hillman; 'Bruce Williams'; Bruno, Jeff J (DNR); Casey Sullivan; David Lenig; David Tetta; 'Donald Perrin'; 'Donna Vukich'; Eric Lidji; Erik Opstad; 'Gary Orr'; 'Graham Smith'; 'Greg Mattson'; Hans Schlegel (hans.schlegel@ge.com); Heusser, Heather A (DNR); Holly Pearen; 'James Rodgers'; 'Jason Bergerson'; Jennifer Starck; 'Jill McLeod'; 'Jim Magill'; Joe Longo; Josh Kindred; Kenneth Luckey, King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); 'Louisiana Cutler'; Marc Kuck; Marcia Hobson; 'Marie Steele'; Matt Armstrong; 'Matt Gill'; 'Mike Franger'; Morgan, Kirk A (DNR); Pat Galvin; 'Patricia Bettis'; Peter Contreras; Pollet, Jolie; Richard Garrard; Richard Nehring; 'Ryan Daniel'; 'Sandra Lemke'; 'Scott Pexton'; Shaun Peterson; 'Susan Pollard'; Talib Syed; Terence Dalton; Todd, Richard J (LAW); Tostevin, Breck C (LAW); 'Wayne Wooster'; 'Wendy Wollf'; 'William Hutto'; 'William Van Dyke' Subject: FW: co 685 (CIE) Sword #1 Well Attachments: co685.pdf 1 • • Penny Vadla George Vaught, Jr. Jerry Hodgden 399 W. Riverview Ave. Post Office Box 13557 Hodgden Oil Company Soldotna, AK 99669-7714 Denver, CO 80201-3557 40818eSt. Golden, CO 80401-2433 Bernie Karl CIRI North Slope Borough K&K Recycling Inc. land Department Planning Department Post Office Box 58055 Post Office Box 93330 Post Office Box 69 Fairbanks, AK 99711 Anchorage, AK 99503 Barrow, AK 99723 Richard Wagner Gordon Severson Jack Hakkila Post Office Box 60868 3201 Westmar Cir. Post Office Box 190083 Fairbanks, AK 99706 Anchorage, AK 99508-4336 Anchorage, AK 99519 Darwin Waldsmith James Gibbs Post Office Box 39309 Post Office Box 1597 Ninilchik, AK 99639 Soldotna, AK 99669 #3 Ah 7STATE OF ALASKA ADVERTISING ORDER 'W NOTICE TO PUBLISHER "qw INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE ADVERTISING ORDER NO. A O_14-018 A P R ° M AOGCC 333 W 7th Ave, Ste 100 Anchorage, AK 99501 AGENCY CONTACT Jody Colombie DATE OF A.O. December 19, 2013 PHONE 9 —1221 PCN DATES ADVERTISEMENT REQUIRED: December 20, 2013 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. o Anchorage Daily News PO Box 149001 Anchorage, AK 99514 g SPECIAL INSTRUCTIONS: Type of Advertisement Legal® ❑ Display Classified ❑Other (Specify) SEE ATTACHED SENT? 11 AOGCC, 333 W. 7th Ave., Suite 100 Anchora e, AK 99501 PAGE 1 OF 2 PAGES TOTAL OF ALL PAGE S$ REF TYPE NUMBER AMOUNT DATE COMMENTS 1 VEN 2 ARD 02910 FIN AMOUNT SY CC PGM LC ACCT FY NMR DIST LIQ 1 2 REQUISITIO D BY: DIVISION APPROVAL: 02-902 (Rev. 3/Publisher/Original Copies: Department Fiscal, Department, Receiving AOTRM Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of Cook Inlet Energy for authorization to commingle production from two or more pools in the same wellbore Cook Inlet Energy by application dated and received October 25, 2013, and additional required information dated and received on December 18, 2013, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order under 20 AAC 25.215(b) to allow downhole commingling of production from two hydrocarbon bearing formations in the Sword #1 (PTD 213-080) well. The AOGCC has tentatively scheduled a public hearing on this application for January 28, 2014 at 9:00 a.m. at the Alaska Oil and Gas Conservation Commission, 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 with the AOGCC no later than 4:30 p.m. on January 6, 2014. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call 793-1221 after January 23, 2014. In addition, written comments regarding this application may be submitted to the Alaska Oil and Gas Conservation Commission, at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on January 21, 2014, except that, if a hearing is held, comments must be received no later than the conclusion of the January 28, 2014 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at 793-1221, no later than January 26, 2014. Cathy P. Foerster Chair, Commissioner 270227 0000829829 10 $ 164.34 RECEIVED JAN 0 2 2014 AFFIDAVIT OF PUBLICATIONAQGcO STATE OF ALASKA THIRD JUDICIAL DISTRICT Joleesa Stepetin being first duly sworn on oath deposes and says that he is a representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on December 20, 2013 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed Subscribed and sworn to before me this 20th day of December, 2013 \\��}�`��gRITN, v11�, Notary Public in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES �u i � Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of Cook Inlet Energy for authorization to commingle production from two or more pools in the same wellbore Cook Inlet Energy by application dated and received October 25, 2013, and additional required information dated and received on December 18, 2013, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order under 20 AAC 25.215(b) to allow downhole commingling of production from two hydrocarbon bearing formations in the Sword #1 (PTD 213-080) well. The AOGCC has tentatively scheduled a public hearing on this application for January 28, 2014 at 9:00 a.m. at the Alaska oil and Gas Conservation Commission, 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 with the AOGCC no later than 4:30 p.m. i on January 6, 2014. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call 793-1221 after January 23, 2014. In addition, written comments regarding this application may be submitted to the Alaska Oil and Gas Conservation Commission, at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on January, 21, 2014, except that, if a hearing is held, comments must be received no later than the conclusion of the January 28, 2014 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at 793 1221, no later than January 26, 2014. Cathy P. Foerster Chair, Commissioner AO-14-018 Published: December 20, 2013 Ah I- 7 lqw STATE OF ALASKA NOTICE TO PUBLISHER ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED /L O_14-018 ORDER AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF A ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE � a � v IF AOGCC AGENCY CONTACT DATE OF A.O. R 333 West 7`h Avenue. Suite 100 Jody ColombieDecember 18 2 1 o Anchorage. AK 99501 PHONE PCN M 9 9 - 221 DATES ADVERTISEMENT REQUIRED: o Anchorage Daily News December 20, 2013 PO Box 149001 Anchorage, AK 99514 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS g ENTIRETY ON THE DATES SHOWN. United states of America State of Account # STOF0330 AFFIDAVIT OF PUBLICATION REMINDER 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 2013, and thereafter for consecutive days, the last publication appearing on the day of . 2013, 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 2013, Notary public for state of My commission expires. C� • Singh, Angela K (DOA) From: Colombie, Jody J (DOA) Sent: Thursday, December 19, 2013 10:23 AM To: Ballantine, Tab A (LAW); 'Salena'; (michael j.nelson@conocophillips.com); AKDCWeIIIntegrityCoordinator, Alexander Bridge; Andrew VanderJack; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Barron, William C (DNR); Bill Penrose; Bill Walker, Brian Havelock; Burdick, John D (DNR); Cliff Posey, Colleen Miller, Crandall, Krissell; D Lawrence; Daryl J. Kleppin; Dave Harbour, Dave Matthews; David Boelens; David Duffy, David Goade; David House; David Scott, David Steingreaber; Davide Simeone; ddonkel@cfl.rr.com; Donna Ambruz; Dowdy, Alicia G (DNR); Dudley Platt; Elowe, Kristin; Evans, John R (LDZX); Francis S. Sommer, Frank Molli; Schultz, gary (DNR sponsored); ghammons; Gordon Pospisil; Gorney, David L.; Greg Duggin; Gregg Nady; gspfoff, Jacki Rose; Jdarlington oarlington@gmail.com); Jeanne McPherren; Jones, Jeffery B (DOA); Jerry McCutcheon; Jim White; Jim Winegarner, Joe Lastufka; news@radiokenai.com; Easton, John R (DNR); John Garing; Jon Goltz; Jones, Jeffrey L (GOV); Juanita Lovett; Judy Stanek, Houle, Julie (DNR); Julie Little; Kari Moriarty, Keith Wiles; Kelly Sperback; Kiorpes, Steve T; Klippmann; Gregersen, Laura S (DNR); Leslie Smith; Lisa Parker; Louisiana Cutler; Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark P. Worcester, Kremer, Marguerite C (DNR); Michael Jacobs; Mike Bill; mike@kbbi.org; Mikel Schultz; Mindy Lewis; MJ Loveland; mjnelson; mkm7200; knelson@petroleumnews.com; Nick W. Glover; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; Randy Redmond; Rena Delbridge; Renan Yanish; Robert Brelsford; Ryan Tunseth; Sandra Haggard; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky, Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer; Moothart, Steve R (DNR); Steven R. Rossberg; Suzanne Gibson; sheffield@aoga.org; Tania Ramos; Ted Kramer; Davidson, Temple (DNR); Terence Dalton; Teresa Imm; Thor Cutler, Tim Mayers; Tina Grovier (tmgrovier@stoel.com); Todd Durkee; Tony Hopfinger, trmjrl; Vicki Irwin; Vinnie Catalano; Walter Featherly; yjrosen@ak.net; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andrew Cater, Anne Hillman; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; David Lenig; Perrin, Don J (DNR); Donna Vukich; Eric Lidji; Erik Opstad; Gary Orr, Smith, Graham O (PCO); Greg Mattson; Hans Schlegel (hans.schlegel@ge.com); Heusser, Heather A (DNR); Holly Pearen; James Rodgers; Jason Bergerson; Jennifer Starck; jilt.a.mcleod@conocophillips.com; Jim Magill; Joe Longo; Josh Kindred; King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck, Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Matt Gill; Franger, James M (DNR); Morgan, Kirk A (DNR); Pat Galvin; Bettis, Patricia K (DOA); Peter Contreras; Pollet, Jolie; Richard Garrard; Ryan Daniel; Sandra Lemke; Pexton, Scott R (DNR); Peterson, Shaun (DNR); Pollard, Susan R (LAW); Talib Syed; Todd, Richard J (LAW); Tostevin, Breck C (LAW); Wayne Wooster, Woolf, Wendy C (DNR); William Hutto; William Van Dyke; Singh, Angela K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Colombie, Jody J (DOA); Crisp, John H (DOA); Davies, Stephen F (DOA); Ferguson, Victoria L (DOA); Carlisle, Samantha J (DOA); Foerster, Catherine P (DOA); Frystacky, Michal (DOA); Grimaldi, Louis R (DOA); Hunt, Jennifer L (DOA); Johnson, Elaine M (DOA); Jones, Jeffery B (DOA); Eaton, Loraine E (DOA); Bender, Makana K (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Norman, John K (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Turkington, Jeff A (DOA); Wallace, Chris D (DOA) Subject: Put Notice (Sword *1) CIE • Attachments: Notice of Public Hearing CIE Commingle.pdf Jody J. Colombie AOGCC Special Staff Alaska Oil and Gas Conservation Commission 333 West Th Avenue Anchorage, Alaska 99501 od y. colombie(cilaska. gov Office: (907) 793-1221 Fax: (907) 2 76- 7542 Easy Peel® Labels Use Avery® Template 51600 i ♦ Bend along fine to i ®AVERY® 5160® i Feed Paper �� expose Pop-up EdgeTM j� j Conrad Perry Drilling Manager Cook Inlet Energy 601 W. S' Ave., Ste. 310 Anchorage, AK 99501 r r ftiquettes faciles A peter , Repliez A la hachure afin de ; www.avery.com Utilisez le gabarit AVERYO 51600 i rharno de reveler le rebord Pop-upTM 1-800-GO-AVERY i David McCaleb Penny Vadla IHS Energy Group 399 W. Riverview Ave. GEPS Soldotna, AK 99669-7714 5333 Westheimer, Ste.100 Houston, TX 77056 Jerry Hodgden Richard Neahring Hodgden Oil Company NRG Associates 408 S President Golden, CO80401-2433 Golde Post Office Box 1655 Colorado Springs, CO 80901 Bernie Karl CIRI K&K Recycling Inc. Land Department Post Office Box 58055 Post Office Box 93330 Fairbanks, AK 99711 Anchorage, AK 99503 North Slope Borough Planning Department Richard Wagner Post Office Box 60868 Post Office Box 69 Fairbanks, AK 99706 Barrow, AK 99723 Jack Hakkila Darwin Waldsmith Post Office Box 190083 Post Office Box 39309 Anchorage, AK 99519 Ninilchik, AK 99639 U George Vaught, Jr. Post Office Box 13557 Denver, CO 80201-3557 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Baker Oil Tools 795 E. 940 Ct. Anchorage, AK 99515-4295 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 James Gibbs Post Office Box 1597 Soldotna, AK 99669 #2 0 Cook Inlet Energy_ December 18t`, 2013 Ms. Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 7`h Ave., Suite 100 Anchorage, Alaska 99501 Re: Application for Sundry Cook Inlet Energy, LLC: SWORD #1 PTD 213-080 / API 50-133-20615-00-00 Dear Ms. Foerster, RECEIVED 0 (A LL Cook Inlet Energy (CIE) hereby submits additional requested information in support of our sundry application to commingle the Lower Tyonek G '0' oil zone (previously referred to as the Tyonek G) with the currently producing Hemlock in Sword #1. The Tyonek G `0' zone will remain un-perforated and behind pipe until permission is granted. If you have any questions, please contact me at (907)-727-7404. Sincerely, Conrad Perry Drilling Manager - Cook Inlet Energy Cc Guy Schwartz David S. Roby Patricia Bettis 601 W. 5`" Avenue, Suite 310, Anchorage, AK 99501 (907) 334-6745 * (907) 334-6735 fax 5� 0 c Application Requesting Commingling of Pools in Sword #1 COOK INLET ENERGY 12/18/2013 CIE is requesting a Conservation Order to be issued in its favor, in order to commingle production in the wellbore for the Hemlock zone and Tyonek "G" 0 zone in Sword #1 Table of Contents 1 Request....................................................................................................................................2 2 Background..............................................................................................................................2 2.1 Introduction...................................................................................................................... 2 2.2 Commingling Zones Characteristics................................................................................. 2 2.3 Lease Information............................................................................................................ 4 3 Protection of Correlative Rights within and across Leases ..................................................... 4 4 Scope of Commingling Plans................................................................................................... 5 5 Reservoir Pressures................................................................................................................. 6 6 Allocation Methods................................................................................................................. 7 7 Cross Flow Controls and Waste Prevention............................................................................ 7 8 Conclusion............................................................................................................................... 8 9 Appendix..................................................................................................................................9 9.1 Ownership Information for Leases................................................................................... 9 9.2 Figures............................................................................................................................ 10 Figure 1: Post Completion Diagram for Sword#1........................................................................ 10 Figure 2: Mud Weight Graph for Sword #1.................................................................................. 11 9.3 Tables............................................................................................................................. 12 Table 1: Perforation Intervals in the Hemlock Zone..................................................................... 12 Page 1 1 • 0 Request to Commingle Production in Sword #1 1 Request Cook Inlet Energy (CIE) requests to commingle production from the Hemlock zone and Lower Tyonek "G" 0 zone in Sword #1 in accordance with 20AAC 25.215. 2 Background 2.1 Introduction Sword #1 (API 50-133-20615-00-00) is an exploratory well with its surface location situated in Sec 16 T 8N R14W North of the existing West McArthur River Pad and bottom hole located in Sec 2, T 8N R 14 W beneath the waters of the Cook Inlet. Sword #1 is an extended reach well that has penetrated the Tyonek, Hemlock and West Foreland sections and reached a total depth of 18,475 ft (10,255 ft TVD) in a fault block towards the North-East of its surface location. Sword #1 is producing at a rate of 1718 BFPD from the Hemlock zone with a water cut of 43.3 % based on a well test conducted on 11/25/2013. It is estimated that the Hemlock zone is draining from the 240 Acre fault block and holds hydrocarbon resources of approximately 864 MBO. It is also estimated that around 250 MBO of oil is associated with the Tyonek "G" 0 sands in this fault block, which is not being recovered currently due to commingling restrictions. It is the intention of CIE to efficiently exploit both these resources by commingling them in the wellbore for maximum recovery of hydrocarbons from this fault block. 2.2 Commingling Zones Characteristics Production from the Hemlock formation is from correlative members currently producing within the West McArthur River (WMRU) field area. Accumulations in the Sword #1 well occur in a new trapping fault segment. Production is associated with a South plunging faulted nose. Entrapment for Hemlock and Lower Tyonek "G" 0 hydrocarbon reservoirs is due to a large down -to -the -North normal fault bisecting the structure. Entrapment for the WMRU field is Page 12 provided by a similar down -to -the -North normal fault located to the South of the Sword trap also bisecting the South plunging nose. Hemlock sands were deposited as alluvial fan type deposits with fine to coarse grained sand members interspersed with shales, silts and coal intervals. Members of the Hemlock appear to have a uniform downdip limit in the productive area of WMRU field area. Available information suggests the various members act as a common reservoir. Lower Tyonek "G" 0 sand reservoirs were deposited by a series of anastomosing stream channels with sediment transport generally from North to South. These channels are generally hard to predict and do not appear to extend over large areas. Individual sands appear to act as discrete reservoirs. The top of the Hemlock formation was encountered at depth 17,540 ft MD (9,519 ft TVD). The productive interval for the Hemlock Formation extends from a top of 17,601 ft MD ( 9,562 TVD) to a Low Known Oil (LKO) of 18,052 ft MD (9,904 ft SSTVD) with mid -point for the productive interval of 17,827 ft MD (9,726 TVD). Analysis of electric logs for the Sword #1 well indicates average porosity for the Hemlock section is 13.8 % with porosities ranging from approximately 9 to 21 %. Permeability averages 3.7 and and range from a low of <1 and to over 14 md. Average water saturation (Sw) % for productive Hemlock sands average around 49.8 % with a range of 31 to 53 % with the higher water saturations generally encountered within the shalier intervals. The Tyonek "G" 0 sand was encountered at a depth of 17,096 ft MD (9,200 ft TVD). The interval considered oil productive extends from to a LKO of 17,108 ft MD (9,208 ft TVD) for a mid -point for the productive interval of 17,127 MD (9,222 ft TVD). This productive interval has an average porosity of 14.3 % with porosities ranging from 11 to 20 % porosity. Average permeability for the oil zone is 4.7 and with a range of <1 and to greater than 30 md. Average Sw % for the Tyonek oil zone is 45.7 % with a range of 34 to 53 %. As evidenced by this analysis, productive characteristics for both reservoirs are fairly similar. Data available from the Sword #1 and other area wells indicates a normal pressure gradient for the area. Because of the similarity of the petrophysical properties for the two reservoirs to be commingled and their Page 13 close proximity with only 504 ft vertical distance separating midpoints for the two reservoirs, no serious cross flow or other detrimental interaction of the two reservoirs is expected. 2.3 Lease Information The 240 Acre fault block covering the Hemlock and Tyonek "G" 0 sands lies within two State of Alaska Competitive Oil and Gas Leases, ADLs 17602 and 359111. Currently, ADL 359111 is incorporated into the West McArthur River Unit (WMRU) and ADL 17602 is immediately adjacent to the WMRU, lying to the NE. The aforementioned fault block lies within Sec. 3 in ADL 359111 and Sec. 2 within ADL 17602. A Spacing Exception was approved prior to the drilling of the Sword #1 Well, as the proposed perforations within the Hemlock and Tyonek "G" 0 Sands were planned within 500 Feet of the section line lying between Secs. 2 & 3. No production from the Area #1 PA within the WMRU is currently allocated to Sec. 3., as Sec. 3 has been determined to be fault separated from Sec. 10 (the acreage included in the Area #1 PA). CIE and Hilcorp Alaska, LLC (Hilcorp) are parties to a Farm -out Agreement whereby CIE, through the drilling of the Sword #1 Well, has earned Hilcorp's Working Interest (WI) in ADL 17602. CIE and Hilcorp are awaiting confirmation by the Alaska Division of Oil and Gas (DO&G) that the Sword #1 Well is capable of producing hydrocarbons in paying quantities before submitting the assignment transferring Hilcorp's WI to CIE. CIE and Hilcorp will be requesting that the assignment be effective as of the completion of the Sword #1 Well, prior to the commencement of all test, pilot or regular production. Please refer to the Appendix section 9.1 for Lease ownership information prior to and after CIE's receipt of Hilcorp's WI in ADL 17602 for more information. 3 Protection of Correlative Rights within and across Leases CIE intends to submit the following applications in this context: 1) An application to expand the WMRU to incorporate Sec. 2 within ADL 17602. 2) An application for approval of a Sword Hemlock and Tyonek "G" 0 Sands Participating Area (Sword PA) covering the fault block. Page 14 3) Anew WMRU Operating Agreement. A new WMRU Operating Agreement will be submitted as soon as the assignment of Hilcorps's 30% WI in ADL 17602 to CIE has been approved by the DO&G. At that point, the Landowner and Working Interest Owner will be consistent across the leases. DO&G, through its regulations and the Unit Agreement, is responsible to protect the correlative rights of the affected parties of interest and will review the allocations between the leases proposed by CIE and approve the proposed allocations or require changes DO&G deems necessary to properly allocate production from the Sword PA to the leases. Consequently, correlative rights across the leases will be protected. As all ownership and ORRIS are identical at all depths within both ADLs 359111 and 17602, there should be no correlative rights issues resulting from allocation of production by AOGCC between the Hemlock and Tyonek "G" 0 Sands. Upon approval of the WMRU expansion and the Sword PA, all production from the completion of the Sword #1 well will be allocated to the leases as approved by DO&G for the Sword PA. Adjustments of previously paid royalties and over-riding royalties will be made prospectively to ensure the Landowner and ORRI holders receive their allocated share of production (or value of production).The allocations will be reviewed and adjusted, if necessary, five and ten years from the start of production in accordance with the WMRU Agreement. 4 Scope of Commingling Plans Sword #1 is currently producing from the Hemlock zone which is perforated at several sections between depths 17,601 ft (9,562 ft TVD) to 18,052 ft (9,904 ft TVD). The distribution of these perforation intervals are tabulated in Table 1 in the Appendix section. The Tyonek "G" 0 zone is intended to be perforated between 17,108 ft (9,208 ft TVD) and 17,144 (9,234 ft TVD) ft. Under the current completion conditions, it is not possible to deplete the Hemlock and Tyonek "G" 0 zones individually. Isolating this zone would have required an additional packer and sliding sleeve complicating an already difficult completion at 70 degrees of hole angle at 17,000 ft. The Tyonek "G" 0 zone is roughly estimated to flow at a rate of 250-300 BOPD. This is insufficient to justify a standalone well with a departure of 14,000 ft and TVD of 9,200 ft Page 15 .Therefore the most effective and efficient exploitation of this resource is to commingle the production. The commingling of the two zones will not promote waste, if it is approved early in the life of the Hemlock production, a little to negligible cross flow is anticipated due to similar reservoir pressures in these zones. Without a commingling approval, the Tyonek "G" 0 zone production cannot commence until the end of the production life of the Hemlock, significantly reducing its net present value to the State of Alaska and CIE. Once necessary permissions are obtained, this zone will be perforated via the use of a wireline. This process would include retrieving the jet pump, cutting the production tubing above the perforations of the Tyonek "G" 0 zone, perforating the Tyonek "G" 0 zone and replacing the jet pump. A Tyonek gas zone is currently isolated from the Tyonek "G" 0 zone and Hemlock zone via a permanent packer set at depth 16,980 ft (9,116 ft TVD) (Figure 1). This zone is completely isolated from the rest of the oil bearing zones and is not producing or perforated. A spacing exemption, which is required to produce this from thus Tyonek Gas zone, has been applied for. The production from this gas zone will not be commingled with the oil sands. 5 Reservoir Pressures Figure 2 is the chart of mud weights used along various depths during drilling Sword #1. Horizontal lines are drawn across this chart indicating the location of the mid perforations of the Hemlock and Tyonek "G" 0 sand zones. The middle of the Hemlock perforation zone is at 17,827 ft (9,726 ft TVD) and the middle of the Tyonek "G" 0 zone is at 17,127 ft (9,222 ft TVD).The difference in vertical depth between these mid points of these zones is around 504 ft TVD. Pressures in these zones are estimated to be around 3,900 psi and 3,700 psi respectively. There were no problems associated with abnormal pressures while drilling through these zones. The close values in mud weights used along these zones also indicate the normal trend of pressures with depth for the oil bearing zones in the Sword #1 well, which make them good candidates for commingling. A pressure bomb was also placed downhole at 16,438 ft (8,722 ft TVD) in the wellbore before startup of the well. The pressure bomb was retrieved after 30 days of production which showed an initial static pressure in the well bore to be around 3,500 psi (marked as a red solid circle on Figure 2 ) and an average flowing pressure around 1,500 psi at Page 16 16,438 ft (8,722 ft TVD). A red dotted line from this point has been drawn showing the extrapolated pressure trend from the location of the pressure bomb along the Lower Tyonek "G" 0 zone and the Hemlock Zone using hydrostatic head of the fluid for pressure calculations. This is in close conjunction to the similarity in the trend seen in the mud weights. Since both these zones have similar pressures, commingling these zones as soon as possible would be desirable before huge margins of pressure imbalance between these zones are created making commingling undesirable, due to the fact that the current operation only depletes the reservoir pressure of the Hemlock zone. 6 Allocation Methods Sword #1 is already producing form the Hemlock zone. Several production tests have been conducted at various points in time at the surface by using an isolated 3-phase separator and by use of strap tanks to measure volumes of produced fluid. The ratio of production from these two individual zones can be determined by measuring the incremental volume of fluid obtained at the surface after perforating the Tyonek "G" 0 zone. Alternatively after perforating the Tyonek "G" 0 zone, a production log, will be run which will accurately help in comparing and determining flow allocations from each of these individual zones. These logs can be run at predetermined times during the life of the well to fine tune these ratios. The well is completed in such a way that this type of logging will be possible without having to pull out tubing which gives an added benefit to commingling. A geochemical analysis will be also be conducted to analyze fluid densities before and after commingling which would add to the quality of allocation ratio determinations. 7 Cross Flow Controls and Waste Prevention Since the original formation pore pressures are very close to each other and subsequent drawdown from both these zones would result in lower well bore flowing pressures depending upon skin for both the zones, any sort of mixing during production, would mostly occur in the well bore during production rather than inter -mixing between the reservoir zones itself. Since reservoir pressures and depths are fairly close to each other, very minimal cross flow may occur Page 17 only during static conditions. This well is currently producing under artificial lift by the use of a jet pump. This additional energy provided by the jet pump will enhance inflow performance of both these zones and obtain hydrocarbons otherwise not recoverable by primary recovery means. This will ensure waste minimization in both the reservoir zones. 8 Conclusion CIE thereby requests permission to commingle the Hemlock zone and the Tyonek "G" 0 zone in Sword #1 based on the following conclusions from the arguments provided above. 1) Similar pressures in the Hemlock and Tyonek "G" 0 zones make them ideal candidates for commingling. 2) Commingling will result in recovery of hydrocarbons from the Tyonek "G" 0 zone otherwise not recoverable by the nature of the existing completion. 3) All necessary steps are taken by CIE to protect correlative rights which would not jeopardize any commingling efforts. 4) Commingling can be achieved without causing waste in the zones of interest. 5) Potential for cross flow between the zones of interest will be reduced and enhanced hydrocarbon recovery would be achieved from both these zones by use of a jet pump. 6) Appropriate engineering techniques will be implemented in allocating ratios to the produced fluids from both these zones. Page 18 9 Appendix 9.1 Ownership Information for Leases ADL 359111 Landowner 100% State of Alaska Working Interest 100% Cook Inlet Energy, LLC Owner Over-riding Royalty 12.34375% held in various amounts by 36 Interests individual ORRI holders Please note: All ownership and ORRIS remain consistent at all depths ADL 17602 • Prior to the completion of the Sword #1 Well Landowner 100% State of Alaska Working Interest 70% Cook Inlet Energy, LLC Owner 30% Hilcorp Alaska, LLC Over-riding Royalty 0.7% held by one individual Interests Please note: All ownership and ORRIS remain consistent at all depths • Following the completion of the Sword #1 Well Landowner 100% State of Alaska Working Interest 100% Cook Inlet Energy, LLC Owner Over-riding Royalty 1.7% with 0.7% held by one individual and Interests 1.0% held by Hilcorp Alaska, LLC Please note: All ownership and ORRIS remain consistent at all depths Page 19 9.2 Figures Figure 1: Post Completion Diagram for Sword #1 Sword #1 Lower Completion 8lr hole X!0 3-lT PH6 - 2-hT 6 5# EUE L-80 TBG @ 16,114' t.1D) 8,483' TVO HaHWm Y-Block TCP Pert Guns - 2". 6 SPF, Ph" @ 16,82 VIVID 2-7r8" 6.5# L-80 EUE Tin ID-2441" Tung Cut @ 17,080' 5" • MI. @ 17,202' MD 19,27V TO MD TVD FT 17001.1704 Irb62.0AO 3 17630.17634 IM3-VH) 4 176%17062 (NDM) 3 17066.17670 1000$-9011) 4 17703.17708 M354 Mt 5 17712.17717 10 414545) 5 17T32.17743 (0056466T) to 77836.17306 tOM4771) 5A 17910.17032 (ONAM 22 17944-1704$ 0174M) 4 17002-10004 10631-*15) 42 *42.4052 WAN) t0 7CW Pat too Page 1 10 312" 12.95- P-110 PH6 Tubing - ID - 2.75" 2 7V Kobe -Wm t ftd Jet Plmp @ 16,42T LID - 2245' ID Wdraulic Set Retievable Packer @ 16,508' MD f 8,774' T W ,---..2 7 T Non Elastoov ' W Sleeve @ 16,554' - 2.188" ID +4--■— Tyord Gas Zor*-16,82T-16.839 116.0-16,871" 7" Model D Pemwent Packer @ 16,980' MD 2-7/r R Nipple @ 17,034' },p - 2.1 W ID 2.7,18" RN NiWe @ 17.06T MD • 2.010" ID Tyonek G 0 from 17,1081017,144' 7" L80 29# BTC 17,476" 19,472TY0 lr hole 18.475' MDd 10.255' TVD 12-70 6.5# L-80 EUE Tubma s .17.,W 42' h1D 1 S" L-80 10,255"TVD 189 BTC 18,47s MD ID • 4.276" Figure 2: Mud Weight Graph for Sword #1 Measured Depth (ft) vs Mudweight (ppg) Mudweight (ppg) 6 8 10 12 14 16 10000 i I I I I i I r---r-r 1 1 1 1 1 1 1 11000 12000 13000 f: 14000 a v a v m 15000 v 2 16000 17000 18000 19000 Mudweight Trend —Tyonek "G" 0 Mid Perforations 9,222 ft TVD Hemlock Zone Mid Perforations 9,726 ft TVD Pressure Bomb Location 8,722 ft TVD Pressure Bomb Static Reading 3,504 psi — — — Extrapolated Pressue Trend to the Hemlock Zone Page 1 11 9 • 9.3 Tables Table 1: Perforation Intervals in the Hemlock Zone Start Perforation- MD (ft) End Perforation- MD (ft) Start Perforation- TVD (ft) End Perforation- TVD (ft) Perforation Interval Thickness (ft) 17601 17604 9562 9564 3 17630 17634 9853 9585 4 17659 17662 9603 9605 3 17666 17670 9608 9611 4 17703 17708 9635 9639 5 17712 17717 9641 9645 5 17732 17748 9656 9667 16 17836 17886 9733 9771 50 17910 17932 9790 9807 22 17944 17948 9817 9820 4 17962 18004 9831 9865 42 18042 18052 9896 9904 10 Page 1 12 #1 rfP _ 0 Cook Inlet Energy_ ocT5 20,E AOGCC October 25, 2013 Ms. Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 7th Ave., Suite 100 Anchorage, Alaska 99501 Re: Application for Sundry Cook Inlet Energy, LLC: SWORD #1 PTD 213-080 / API 50-133-20615-00-00 Dear Ms. Foerster, Cook Inlet Energy (CIE) hereby submits a sundry application to complete our Sword #1 as a dual zone, single selective, jet pump producer completion. The upper completion is a Lower Tyonek gas sand and the lower completion will be a Hemlock oil producer. A potential Tyonek G zone oil sand is behind pipe in the lower completion. CIE requests permission to comingle the Hemlock and Tyonek G producing intervals per 20 AAC 25.215. Comingling of these two oil sands will greatly simplify this deep completion, accelerate the production, and mitigate operational issue in a 70 degree ERD well. We did evaluate including the Tyonek G sand in the upper completion, but are concerned that the Tyonek Gas would inhibit production of the liquid hydrocarbons from the G zone. S The Tyonek(q ne will remain un-perforated and behind pipe until permission is granted. Also, attached are a completed Form 10-403, proposed wellbore schematics, and completion procedures. If you have any questions, please contact me at (907)-433-3816. Sincerely, Conrad Perry Drilling Manager - Cook Inlet Energy 601 W. 5fh Avenue, Suite 310, Anchorage, AK 99501 (907) 334-6745 * (907) 334-6735 fax