The URL can be used to link to this page

Home My WebLink AboutO 001 ') :) INDEX OTHER ORDER NO. IB 1. 2. 3. 4. 5. 6. 7. 8. 9. April 8, 1960 April 20, 1960 April 29, 1960 May 2, 1960 May 12, 1960 May 13, 1960 May 16, 1960 May 16,1960 May 17, 1960 Notice of Hearing re: Proposed Amendments Ltr from Phillips to DNR re: Proposed Regulations Ltr from Union to DNR re: Proposed Regulations Inter office Communciation Standard Oil comments re: changes Shell Oil's comments re: changes Union's comments re: changes Humble's comments re: changes T ranscri pt Order IB Missing #9 í ! f .¡ i ~...- ~ p,./ r) ,'....F~v C < ~ yv .' _.1( ~J lr~ \ \ ~ ~~ - ~ '! .J fij r" ... ~ ,)'1' ~,~ ,,; y./'~ Q/ \ ~ , TAPE RECORDING TRANSCRIPT OF THE PUBLIC HEARING ON THE PROPOSED AMENDMENTS, ADDITIONS, AND DELETIONS OF THE GENERAL RULES AND REGULATIONS GOVERNING THE CONSERVATION OF OIL AND GAS IN ALASKA, TITLE 11, MC, HELD BY THE DIVISION OF MINES AND MINERALS OF THE ALASKA DEPARTMENT OF NATURAL RESOURCES AT THE ANCHORAGE YMCA AT 1:00 P.M., May 17, 1960. t1- \ HI' ~ HilliacfJ ..H¡\~y 1 ~p ~ is James A~ Williems~ Directc )f the Division of Mines -~-....:! and l!inerals. I presume you know these fellows but I'll introduce them anyhow: this is Don Bruce, Fetroleum Geologist in my Division, Joe Rudd, our legal help with the Department of La~, and Dick Murphy, Petroleum Engineer. We'll have a roster co~ing along shortly and we would like to get your signatures on that, for mailing addresses, the èompany you represent, etc~ I understand there have been two or three questions asked with reference to Chapter 64 in our brochure; 80, r'll quickly run through the history of this particular activity for your general background inforc·'ltiono In 1955, the Legislature passed the Oil and Gas Conservation Act known as Chapter 40, and that set up the oil and Gas Conservation COú1ffiission, back in the days when we were a territoryo The Commission at that time was composed of the Governor, Commissioner of Mines and the Highway Engineer. In 1958, the Commission passed these regulations we have been going by under a procedure that was legal at that timeD They held a hearing and got a great deal of help from the Industry and the regulations were adopted. Since we've become a State, these regulations have been incorporated into the Alask~ Administrative Code which was created under the Administrative Procedures Act. Any regulations that were already in effect were automatically taken in there, if they were presented to the Secretary of State, without further hearings. After Statehood, the 1st Legis- lature passed what became known as Chapter 64, the State Organization Act. That is the one there has been a little confusion on. Chapter 64 set up the new State Government under 12 principal Departmentsc The Department of Natural Resources was one of those Departments. At the sa~c time Chapter 64 abolished some 50 or 60 agencies of various types and the old Oil and Gas Conservation Commission was one of the agencies abolished~ Ghapter 64 at the same time put the powers, duties, authority, etco of the old Oil & Gas Conservation ender the Department of Natural Resources, which of course is administered by the Co~~issioner of Natural Resourceso The CO~TIissioner of Natural Resources in due time created the Division of Mines and Minerals and put the Oil and GaG Corr~ission's functions of the former Commission under this Division under his general supervision. With the Commission abolished, Mr. Holdsworth officially requested the Governor to give us pe::mission to reconstitute the Comoission as it had been proposed by him, which was to be composed of oembers of the Division of Mines, abot".t the li3.Y we are here. After conferring with the Attorney General and various assistants for two or three months, the Governor finally said tno', ~ot bec~use it was illegal, but because it was the .t ent 0 f Chap t er 64 to cutdown as many agencies as ~ ~ possible; and since he didn't propose to create any new positions in that Commission other than were already in the State service, they figured there, was no advantage to be gained. So therefore, at the present time there is nç legal Oil and Gas Conservation Commission. Following that, Mr. Holdsworth wrote a letter addressed to me and saying in part: 'The responsibility in this field will lie within the jurisdiction of your Division, and it is suggested that a five-man Committee' (he uses the word Committee here)' be set up and composed of State employees, with yourself- as Chairman, as follows: Director, Division of Mines and Minerals; Petroleum Engineer; Petroleum Geologist; Commissioner of Natural Resources; and a member of the Attorney General's Staff responsible ~n the field of lands and oil and gas.' So, that is the chain of autnority by which the Division of Mines and Minerals and this group we have here, with the e~ception of Mr ~ Holdsworth, who was detained elsewhere and was not able to get ~ere, now has the authority in the field of oil and gas conservation. As I say, w~ are not a Commission but the wording in Chapter 40 and in our Regu~afi~~s we are leaving that as it is. - . _ ~i, ,;..4--.- - ;,.-.,. ~ -......- ... . . In regard to the Commission, we are stilI'using that word in the Act, although we can not refer to ourselvès as that. The authority is there and we feel some day it will be a Commission again and we do not want to go to the trouble of amending that word 'Commission' and have to put it back in again some future day. As far as the law is concerned, it is iCommission' and as far as we are ourselves concerned, it is something else. We'll take these regulations one by one as we did this morning.o (Notel Mr. Williams refers to the Division of Lands hearing which pr~~ded the Oil and Gas Conservation hearing.) 1JWe have here letters, r'\1iîg~t mention first, from 6 different companies: 4 making suggestions and 2 th~t àJ?proved ofth~ changes which we propose which I would like to read intQ the recor4 ~t this time. We häve Ohé (copy ättached) from Phillips Petroleum signed by t. E. F1tzjartalð which reads lfi patti tall of the proposals åà Sét forth 1ft yoüt communication, meet with the full approval or our company.t Another letter (copy áttáched) from Sincläir äddressêd to Mr. Zed Grîssom, signa_ by ~. F. F. Wright, saying practica¡iy the same tqing in its most pertin~nt partsi *a11 departments after study fpund thât the proþoseQ rules were reAsonable and the changes will produce a normal and useable draft.t So, they also approve of our regulations and did not object to any. All right, the proposed amendments, additiops and deletions: 2007.115 Director .a11 meên the Director of the D :...~ sion of Mines and -- Minerais. Is there any suggestion? 2007.135 The definition of exploratory well shall mean a well that discovers or is drilled to discover a previously unknown pool. 2007.36 Well history shall mean the ~itten record progressively describing the strata, water, oil or gas encountered in drilling a well with such additional information as to give volumes, pressure, rate of fill-up, water depths, caving strata, casing record, etc. It Mr. Idan ;.. "Hr. Chairman, is it in order, after you have read one of the rules, to speak up and make a comment on it?" þ1r ¡, t-till ie.:ns - "Yes, I am sorry, I did forget to say I wish you would stand up and announce yourself to the tape recorder and let us have your comments. If Mr. Lian - "Harold 1L Lian, Division Geologist: Union Oil Company of California. t1 Mro Li~n read from his letter dated May 16, 1960 (copy attached) the para- gr~ph on 2007.36, Well history. Mr. Williams - "In our letter here from Standard Oil we have a comment on well history. Would you care to make that presentation, Hr. Crooker?" Mr. Crooker - "Mr. Chairman, I am Jack Crooker with the Standard Oil Company of California. We felt that this section could be made a little more specific as to just what was wanted, more or less common to current practices. In that regard, we certainly would wish to second the motion made by Union Oil Company. Our suggested reading would be that the 'well history shall mean the written record progressively describing the strata, water, oil or gas encountered in drilling a well with such additional data as is normally furnished to the u. S. Geological Survey. I" Mr. Williams - "Any other comments?" Mr. Murphy: - "I have a comment. In practice we have been accepting the comple- tion report of the major operators in lieu of USGS form and in lieu of our form that we adopted from the Interstate Oil Compact Commission, and we would like to continue to do that if the operator consents to submit his own completion report. It would be a lot less paper work for him and also a lot more informa- tion for us. Now, for an operator who is not an integrated oil company - an independent who doesn't have such a set up - I believe we shall request that he submit a completion report on our Form P-7." "Mr. Director, ~les Keeble with Humble of Houston. We certainly have no objection to the Commission accepting a USGS report or the company's well -3- '-- -- CŒ'~:? le.tion report; \'7':; just don I t think the rules shoÙìd be written tQ requ·lre that. t1e are perfectly c3tisficd with the present State form and think it well coverG th~ items required in the present rules and certainly prefer that practice and prO"c~d'.l'l.·c the State now has in this form. U l1r.. HiJli2!l1s - "Are there any other comments on this? Mro Lian shall we be able to get a written st2.tement from you?" !0~~!~J} - "I have this letter addreGsed to Nr 0 Williams and will leav_e it with you.r t-'f~~2~~ll~ams - '~Now, 200301, if \-;e are through with the last one." 1t¡·1r 0 Ch.~irt:lal1, QQ~.:~0~~s.Lº.?I.~ of Shell Oil Compßny. I have one suggestion to add-: an <1dditionoJ. definition which will come in part 2007 , and that was to cover th8 æatter of the well cowpletion, suspension or 'abandonment by definition so that ,,;c can èc-::z;r8:L:¡e x¡hen the time period of 30 days commences to run for filing of liell re;¡o::·ts ,,·!hich is provided for ill 2008. I think that is covered by a v7ri t te:l. cor.:ffiUnicD.tion to you also"," J1E~!!~~.~.~[1.T:2. .. IIr ['If!. Gorry I sk.ipped 2007", 37 on definition of well logs. Are the::e any other COf:'Ic,snts on \'n~ll 10gs?Jt 119I-:~!;_le!'~J~ee.2Js., Qgain~ He of Humble have tvJO comments- on the pre:sent definition. P3 \'7C>tlld cU_c<ssree in t1;;O instances" First, in connection with directional sur- veys vJhich ,¡.vB feel O.r2 requit'ed in other sections of the Regulations where nec- essa~y, pa~ticul&~17 Section 206003, and also the requirement for dipmeter in- form3..tion v7hich H~ heltevcshould be considered confidential for the operator's OWi1. use", vJe sU88cst a re",1isioD. of Section 2007.37 so as to define well log as fo 110\-78: II (rea:.1:i.nß £::0:"1 his letter dated Hay 16, 1960 (copy attached) the serrten~e stertiD2 :gr:.lt.Jgg.i .s.nd continui.ng to the end of the paragraph.) "I believe that the 19GO Q3endill2nt to the Conservation Act reads that the Commission has authority to require the making and filing of various types of reports. We certainly don?t hQve the authority, but we feel that particularly the dip- meter should be treated as confidential 0 As to the lithographic part of our definition, we feel that our definition of" well log is provided for on the back o~ the present State Form P-7. The log is there shnwn and we think that is sé·.tisfa~tory" Inci.denta!.~y, in connection with Humble.! s cømments we have filed .2 letter with the Co!'_:mission and the majority of our commêîits are contained in that lettero!l l·~:;~Ltll![::TI3.. " I!FE.rh·::l~s I sho"G:td mention the letters of comment or objection: they are from StQudard Oil of California, H11ilîble Oil and Refining) Mobil Oil G:P..ð. Union Oil Co::-.~?!l¡:Y" Ti10SC are the letters we h2.ve here now. II ~ - "Jack Crooker - I would like to present our picture here. We are suggesting that well logs shall mean the electric resistivity and self-potential logs and we feel that the lithologic log or lithographic log is in the log and well history and is quite often not prepared, and therefore, we feel the well logs should mean the electric resistivity and self-potential log. In our case we feel the othe~ 10ga are not ...&&. Of course they are available to the Commission if the desire them but they are something that should be specifically submitted." Nr. Mu.rphy - IJDo you. object to submitting a lithologic log with each well unless we request it spccifical:!.y?" Mr. Crooker - "Yes, I fecI as though there are many times when we probably will not prep~re suchn Our electric log is the one we use that we accept as the lithologic log.n "Mr 0 ChairmÐ.n, l-la:::'olj- Li.§I: of Union Oil. Union recommends that this section be worded as follm';'s: 't-Jell log shall mean the self-potential resistivity electrical logo' Union reco~~ends restricting the meaning of well log to the elcctric log. This is the common usage of the term." "Mr. Chairman, my name is Wo Co Bishop of Richfield, I'd like to second Union's interpretation." Mr. Coye - "Mr. Chairman, you spoke of written reports or recommendations. I gave you a letter this morning - you may have misplaced it: if you have, I will be glad to give you a copy of it. 11 Hr. Williams - IIThank you. Are there any more comments on definition of well logs? We shall go on to 20G8.le" "Mr. Director, Ch~!l.§;s Keebl.§. - In connection with this rule 2008.1, this of course would include core holes which are drilled solely to secure geologic information and are fr~quently drilled in areas where the operator does not hold any leases. In our opinion the effect of this Section would be to dis- courage drilling core holes as the operator would have no assurance that he could obtain leases within two years while the information is held confidential. It is suggested that the words 'and core holes' be inserted in the second line of Section 2008.1 following the word 'operations', so as to effictively exclude core holes from this rule. With that insertion the first portion of the rule under consideration would read: 'Except as hereafter provided and exclusive of holes drilled solely for the purpose of seismographic operations, 'and core holes' during the drilling or deepening...' etc. Now, we understand that the Division will need to determine when a proposed test is actually a core hole and for ~ -- this purpose we would suggest as an additional paragraph a definition of 'core hole' which I will quote hastily and will come back to that if it is desired to be copied by others. Our proposed definition would read: 'Core hole shall mean a hole drilled for the sole purpose of gaining structural and/or stratigraphic information but is not intentionally drilled to a depth sufficient to penetrate and explore formations which are prospective producing pools and is not drilled in a manner to be completed as a producing well.' I will come back to that proposed definition, but one other point in connection with this Section 2008.1 is we would suggest the addition of a provision incorporating a statutory provision for holding the information confidential and for the record I will read our proposal on that which is nothing more than tracking the statute on the subject. It would read as follows: 'Required reports and in- formation ~2rked 'confidential' shall be kept confidential for twenty four (24) months after the 30-day filing period, unless the owner gives written per- mission to release such reports, logs, or other information at an earlier date. , Now, of course as I stated, that is in the Statute but we think it would be wise to reiterate it in the rule. Now in connection with our core hole defi- nition, if it were to be adopted by the Commission, a second change is probably in order in rule 2051; the first two sentences of rule 2051 would read: 'Prior to the drilling of any well for oil or gas or stratigraphic test an application on Form No. P-I, shall be submitted to the Commission for approval. A fee of $50.00 shall accompany each application.' Now that suggested change is simply to bring this rule in line with our suggestions for the preceding rule.1t Mr. Williams - "Then we will have to be sure we know where a core hole stops being such and becomes a stratigraphic test?" Mr. Keeble - "Yes, in the definition we intend to cover that." Mr. Williams - "Are there any other comments on 2008.l?" Mr. Crooker - "Our suggestion is quite similar to Humble's. We are suggesting that after the word 'exclusive' on the first line that we insert 'core holes, holes drilled for geologic information only and holes drilled solely for the purpose of seismic'. There again, I certainly agree that the definition of core holes and holes drilled for geologic information is a very good thing to insert in the Regulations.tt Mr. Cove ~ "l-"1re Chairman, on behalf of Shell, we would like to concur with Humbles' suggestions in the respect to changes proposed in 2008.1." _t:.._ "H1' ð Chairm&l.1, B~d L~~!}., '1 Hr c Lian read from h.__ letter dated May 16, 1960 (copy attached) the paragraph starting with 2008.1 and continuing to 2051. Hr. Hil1iams - "Are there any more comments on 2008.1? 2008.2 we propose to . delete. The wording in the previous proposals for 2008.1 and the change in Chapter 40 makes 2008.2 obsolete, incorrect and of no particular value. Does anyone object to the deletion of that? 2010 is the legal thing that seems to be put in all Regulations these day&. Take note of the fact that the headings are not to be interpreted as having any meaning but are put there for convenience and reference, the heading of each Section. 2051 on Drilling Permits. It seems to have been fairly well covered already, àoes anyone have any comments." ~r.~iag reaù from his letter dated May 16, 1960 (copy attached) the two para- graphs referring to 20510 Drilling Permit. Hro Bruce - "I was just wondering, Mr. Lian, if you consider a hole drilled with a power-auger as a well?" 1-1::-.. Lian - "No, we don't consider it as a well but we are not sure from what ~le hear that anyone else considers it should fall under that term. Hr. Bruce - "I believe it says 'the drilling of any well', and as far as any other drilling is concerned, I just wanted to point out that a power auger hole or a hole dug with a pick and shovel should not be considered a well." Mr. Lian - "Possibly it isn't considered but we wanted to be on record as pointing out this situation.," Mr. Murphy - "I think intent in drilling a hole is obviously shown by the equipment you are going to use. No one is going to drag around a Full-View Ideco to drill a core hole test." Mr" Williams - "Do you care to comment further on this Mr. Keeble? Are we through with 2051 yet? 2059.3~ 'The Operator of any well shall shut off and exclude all waters from any oil-or gas-bearing stratum to the satisfaction of the Commission, and to determine the effectiveness of such operations, the operator shall make a casing and water shut-off test in accordance with methods approved by the Commission" ' 20600 Any cOLlIIlents? Anyone here from Mobil?" "My name is John Forman, I have a copy here of a letter addressed to Mr. Williams, !Jhall I read the whole thing?" -7- Mr. {.Jilliams - "I ·ou' d care to,," -- ~ Mr. Forman read Mobil Oil Company letter dated May 6, 1960, authored by Mr. R. P. Lavenant Jr., (copy attached) Mr. Williams - "Thank you. Anyone else on 2060 or 2060.l?" "Donald Cove, Shell Oil Company, it occurred to us - let's put it this way, we are practically in agreement in principle with what Mobil is proposing. As we view it this matter could be accomplished by incorporating into Section 2060 all of the provisions of 2060,2060.1, 2060.2 and 2060.3 into one paragraph. This is substantially the way the matter of deviation is handled in several of the western states; I have in mind particularly Colorado, Nevada and Wyoming, and we have suggested a paragraph to that end which would avoid time and expense of a waiting period and possibly a public hearing in instances where it was necessary to actually deviate and still stay within the approved requirements." Mr. Coye read from his letter dated May 13, 1960 (copy attached) paragraph beginning: '2060. Deviation... etc.' Mr. Williams - "I think it would be well for me to state at this time that when we were drawing up these proposed changes it certainly was not our intent to hold up any drilling rig for 10 days while we waited for complaints to come in. II Mr. Coye - "That's the way I construed 2060.2 - if you find an error .....11 Mr. Williams - "It reads that way, we will have to make a change there for sure." Mr. Keeble - "Mr. Williams, we too agree in principle with Mobil and Shell. You might want to consider, we recognize, and agree with the intent of 2060.1 of course, but we do feel that the previous rule, 2060 should be incorporated in this allowing the operator to notify the Commission in writing of his in- tention to deviate and thereafter proceed at his own risk. Therefore, we would suggest addition of the following paragraph to rule 2060.1, either of the paragraph or proviso in that rule and it would read as follows: 'If drilling is in progress the operator may notify the Commission in writing of his intention to deviate and proceed at his own risk. When the operator follows this procedure he must subsequently file an application and obtain a permit as under normal procedures'." Mr. Crooker - ICMr. Chairman, with regard to 2060.1, we had a suggestion there. Particularly in unit plan operation, it might save quite a bit of paper work. Primarily we certainly go along and agree with Mobil and Shell in their sug- gestions, but in the event it is left the way it is, we would like to add a paragraph on 2060.1.11 - Hr. C::-ool~er . -d from his letter dated May 12 1.960 (copy attached) - ~........ paragraph beginning: 12060.1, etc.' "In other words, we are suggesting that in this 2060.1 that in a unit period that is not close to the boundaries that this requirement for listing the offset operators and the statement that each has been furnished a copy of the app 1ication by :ï.:egistered mail, etc. and also that a neat and' accurate plat sketch need not be furnished in these cases." Mr. Lian - "The Union Oil CO!TIpany seconds the views of the Stàndard Oil Company.1I Mr. Williams - "Anyo:le '3182 on 2060,2060.1, 2060.27" Mr. Keeble - "Hr. ~Jil1iams, in connection w'ith 2060.2, in view of Standard's comments, which I haven't thoroughly analyzed yet, I believe that it was sug- gested that these rules, /.060.2, 2060.3 etc. be eliminated; we urge that they be retained, along with our rule suggested earlier, than an operator may pro- ceed at his own risk by notifying the Commission. Hr. Wi11iarr.s - IIAny more on 2060.2, 2060.3, 2060.41" Mr. Lian - "Mr. Chairman, I have a'comment on 2060.3, if we may go back. The Union Company recommends deleting the sentence IAfter processing such survey reports, the Commission will set the allowable of the well, or take such other action as the facts may require.' I believe it is the last sentence.1I Mr. Murphy - "I believe he is referring to the fact that the Commission has authority elsewhere to set a11owables. It is just repetition." Mr. Crooker - "Þ"¡r. Chairman, we also agree with Union's stand on that. Our primary reason is that we believe setting of allowables in Alaska is a little premature and that tì.ìere is provision elsewhere. If Mr. Williams - "2060 Well Spacing. We didn't receive any comments in our letters on well 8pacingb Sections 2061.1, 2061.2 or 2061.5. We propose to delete 2061.5 which is tIn filing a Notice of Intention to Drill, the surface distance must be showni, etc. This is taken care of in the Application Form and we saw no need for leaving that in there. 2104 on Seismic Holes.. I am sure we have a number of comments." Mr. Lian read from his letter dated May 16, 1960 (copy attached) two paragraphs concerning 2104. 'Seismic Holes.' Mr. Murphy - "However, it is not permissible to use the crew chief to plug the hole." (laughter) Mr. t.Jilliams - IIThat last p2.rt is just to be deleted? You would put a period after 'fOl"maticns I then?" Mr. Lian - "Yes ~:I ...Q- "Mr. WilliQ~.s] I am ""i.shop of Richfield, I would lik~ to second that." '"-' --~ Mr. Crooker - "Standard would also like to second that provision." Mr. Keeble - Mr. Chairman, Humble would like to second that suggestion." Mr. Williams - "All right, are we through with 2104 then? 2107 we propose to delete, which is 'Plugging Records on Wells' and that is covered elsewhere. Any objections? Now, under the heading of Section 2203 on 'Written Notices, Requests, Permits and Reports' we are proposing to adopt a new sub-chapter on Secondary Recovery and Pressure Maintenance and we propose to add two forms to our list of forms that are 2203 which will be used for the purpose of secondary recovery and pressure maintenance recording: Forms P-12 and P-l3 which are approved by the Interstate Oil Compact Commission. Any comments? All right, on 'Secondary Recovery and Pressure Maintenance Operations, 2226.1'." (Mr. Williams read the proposed Sections 2226.1 thru 2226.2) "Any comments on those proposed requirements?" Mr. Lian - "Mr. Chairman, I have a comment submitted by our secondary recovery people, which reads substantially as fo11ows.1I Mr. Lian read from his letter dated May 16, 1960 (copy attached) paragraph 2226.2. "In this connection Union recommends sub-paragraph (9) be deleted." "Bishop of Richfield, I would like to second Union's statement. II Mr. Murphy - "I would like to comment on that a second. It m.ight work to the operator's advantage to show a graph, since if it is interpretive, it would show everybody what a good deal it is to undergo his program. It Mr. Lian - lilt doesn't call for any deviation from it." Mr. Murphy - "I can see the drawback to it." Mr. Williams - "2226..311 (Mr" Hi11iams read 2226.3 from the Proposed Regulations). Mr. Lian - ~æ. Chairman, Union is not clear as to what constitutes an offset operator and we would like to see that defined. II Mr. Williams - "Would this definition as given by Mobil be sufficient? Do you agree with this'?" Mr. Williams then read the last paragraph from a letter from Mobil Oil Company, authored by Mr. R. P. Lavenant, Jr. dated May 6, 1960, (copy attached) starting with the words 'offset operators'. Mr. I..ian - "I think that would satisfy us. If Mr. Williams - "Would that be all right?fI Mr. Holmesly - "May we have a moment for review?" Mr. Murphy - "Hò.íle he I s revievlíng something, I would like to make a comment. We all know this paragraph has been put in to protect correlative rights and t f" ~.\, ·h....-.:r; '.:~·h;' ~ ~ ';- '. . _... .. . - ~ ~J ~: :". ~ ~-~ .~.. :-.' ~..; ." .". ... ;~-,:~.:" - '" - ~ :;.:.t;":/:r::~ ..~ r;.~~ '.4' ......"..\~;~,_~.y I think what Uniop. ~) guarding against is if they 5' lId undergo a secondary ---- ""'- recovery program in an existing field and someone held a lease close by on which there were no wells but space to have wells drilled, they want to be withdrawn from the requirement to furnish them with all this information prior to the hearing. I think a lot of that will depend on the discretion of the Commission prior to a request for a hearing as to who has a legitimate reason for having all this information before it is publicized." "My name is Sa F. Ho1mesly I wish to make this comment on secondary recovery projects. They used to take those as being water flood projects that result from a pilot test that had been run and unit that had been put together and normally the only people concerned in that hearing are those people that are in the unit themselves, and those which offset the unit. But you also have under your heading "Pressure Maintenance', and quite often and in most cases when you have pressure maintenance involved you have everybody in the field involved that should receive the notice of the hearing and be advised; so, for you to restrict yourself as to who would get these notices at this time seems a little bit premature. Rather it would seem to me it would be a matter of judgment at the time and for the condition that existed as to the type of project you were putting in. If it is a multiple situation in a field, then offset operators would be the only ones concerned; but if you have a large water front going in where as we have a few cases now, 100 sections out of the field, or in other cases 70 sections, this field is rather large and every body in the field wanted the notice and got it. I should think you would want to keep yourself flexible so you could give all people a notice." Mr. Williams - "Would you recommend specific wording to be used there, Mr. Holmesly'l!' Mr. Holmesly - "I'd drop the word 'offset' and just leave 'operator of the project' and leave it to your discretion at that time. You could get help from the opera- tor concerned at the time you request the hearing and they could give you an idea as to how many people are really involved. It Mr. Williams - "Any more comments on 2226.3? 2227. 'Casing and Cementing of Injection Wellsg'lI Mr. Williams read Rule No. 2227 from the Proposed Regulations, then conunented, III believe the comma should be deleted after 'cemented'." Mr. Williams read Section 2228 and 2229 from the proposed regulations and asked for comments. Mr. Lian - "Mr. Chairman, one final comment under this section:" Mr. Lian read the final paragraph of his letter dated May 16, 1960, (copy attached) _1'_ referring to IRect~~s and Reports, Section 2229.' '__ Mr. Murphy - "lid like to refer to Section 2229 under 'Reports'. Even if 'and other data' is deleted, the Commission has authority to get any informa- tion it so requires." Mr. Lian - "We understand that." Mr. Williams - "Any other comments on anything? It looks like we are through already. Like Mr. Bell mentioned this morning, if we can get away from composing a preliminary final draft and researching it, we'd certainly like to do it. Weill take your ideas and statements under full consideration in redoing these and come up with a final draft shortly. Does anyone feel they really want to insist on seeing a preliminary final draft? We will then rewrite these and we'll reprint for the easy reference of the Industry our regulations in printed form, such as the leasing regulations and include in the same pamphlet. wê , plan at any rate, Chapter 40, as amended, so that the Oil and Gas Conservation Act and the Regulations will all be in the same pamphlet for easy reference. We will do that as soon as possible." Mr. Sollars - "It will be appreciated. It Mr. \oJilliams - "Does anybody want the floor? Do I hear a motion to adjourn? Thank you very much." -11.. #8 COP Y HilllliLE OIL & REFINING COMPANY May 16, 1960 P. o. Box 7-248 Anchorage, Alaska Mr. James A. Williams, Director Division of Mines and Minerals Department of Natural Resources P. o. Box 1391 Juneau, Alaska Dear Sir: The Humble Oil and Refining Company appreciates the opportunity to make comments regarding the proposed a~8ndments and additions to the Oil and Gas Conservation Regu1ationsÞ The HUliillle Corúpany will have representatives at the Hearing but it may be helpful for you to have the following suggestions in advance of the Hearing. Section 2007.37. In our opinion such data as the dipmeter should be considered confidential and for the operator's own usee We suggest a revision of this rule to read "Well lo~ shall mean a satisfactory electric log and a lithographic log. II The other information would not normally be required but we recognize the authority of the Division of Mines and Minerals to request the additional data if additional information is necessary. Section 2008.1. As presently worded, this requirement includes core holes drilled solely to secure geologic information and frequently drilling in areas where the operator does not hold any leases a In our opinion the effect of this Section would be to discourage drilling core holes as the operator would have no assurance that he could obtain leases within two years. It is suggested that the words "and core holes" be added in the second line following the word "operations.tf It is understandable that the Division will need to determine when a proposed test is actually a core hole~ For this purpose we suggest a definition of core hole as follows: "Core hole shall mean a hole drilled for the sole purpose of gaining structural and/or stratigraphic information but is not intentionally drilled to a depth sufficient to penetrate and explore formations which are prospective producing pools and is not drilled in a manner to be completed as a producing well.." In this regard) you may also want to change part of Section 2051. Beginning at the end of the first line the words "for geologic information" ~hould be deleted and "strntigraphic testH be substituted. The first line would then read, I1Prior to the dril:!.ing of any 1;lell for oil or gas, or stratigraphic test, an application..e" Inasmuch as [l permit would be required for a stratigraphic test, we would have no objection if you deleted the beginning phrase of the second sentence which reads, ItExcept for wells drilled for geologic information only." The second sentence \'lOuld then read, ,sA fee of $50.00 shall accompany each ap- plication." We would further suggest the 4ddition to this Section of the prov~s~on which requires the Director to keep confidential the data that is filed with the Division. We therefore suggest the addition of the following paragraph. "Required reports and information marked : confidential , shall be kept confidential for twenty four (24) months after the 3D-day filing period, unless the owner gives written per- mission to release such reports) logs) or other information at an earlier date." We realize that this is provided in the statute but feel that it should also be required in the Regulationsø Section 2060~1. t~e recognize and agree with the intent of Section 2060.1. However, we feel that the previous provision allowing the operator to notify the Commission in writing of his intention to deviate and to proceed at his own risk is greatly needed and Humble suggests that this provision be retained. We suggest the addition of the following paragraph. "If drilling is in progress, the operator may notify the Coromission in writing of his intention to deviate and proceed at his own risk~ When an operator follows this procedure he must subsequently fi10 an application and obtain a permit as under normal procedures." Yours very truly, /s/ Fred Sollars #7 COP Y h~ -- UNION OIL COMPANY OF CALIFORNIA P. O. Box 1872 Anchorage, Alaska May 16, 1960 Mr. James A. Williams, Director Department of Natural Resources Division of Mines and Minerals P. O. Box 1391 Juneau, Alaska Dear Sir: The Union Oil Company of California welcomes this opportunity to appear before the Division of Mines and Minerals and present its views on the pro- posed amendments and additions to the Oil and Gas Conservation Regulations. These will supplement the views set forth by Mr. C. E. Smith in his letter to you dated April 29, 1960. The following comments are hereby submitted: 2007.36 WELL HISTORY The Union Oil Company expresses the hope that whenever it is ne~essary for an operator to file a well history with the United States Geological Survey, a copy of such well history will be acceptable to the Commission in lieu of a separate form. This request is made solely in the interests of keeping paper work to a minimum. 2007.37 Union recommends that this section be worded as follows: "Well Log shall mean the Self Potential-Resistivity electrical log." Union recommends restricting the meaning of flwell logft to the electrical log. This is the common usage of the term. 2008.1 Union recommends changes in the first two sentences. In the first sentence, Union suggests inserting the words "and core holes," immediately following the words "seismographic operations." In the second sentence, Union would delete the words "the required well logsrt and substitute "an electric log." Also, Union recommends the following addition to the paragraph: "The required reports and information marked "confidential" shall be kept confidential for twenty-four (24) months after the 3D-day filing period, unless the owner gives written permission to release such reports, logs or other in- formation at an earlier date." Union recommends the exclusion of core holes, in addition to seismograph holes. Core holes are an important tool in exploratory work. Many areas in Alaska are suited to this approach because of the lack of bedrock outcrops. An operator might wish to ascertain the nature of the sub-alluvial rocks by drilling a number of core holes before embarking on an expensive geophysical program. Information obtained in such core holes is strictly for regional exploration and, in Union's opinion, the operator should be entitled to keep it confidential for so long a period as it is to his competitive advantage to do so. Union recommends that the electric log and the well history be filed as a routine matter but Union objects to making public all the information obtained in a well. Many of the logs run, such as the dipmeter log, the velocity log, etc., are generally purely for exploratory purposes. Union prefers that if the Commission requires highly specialized data, that such be obtained on an indi- vidual basis. 2051. DRILLING PERMIT Union recommends the deletion of the words "or for geologic information" from the first sentence, and the deletion of the words "Except for wells drilled for geologic information only," from the second sentence. The phrase "for geologic information" could be interpreted so as to in' clude shallow holes drilled with a power auger to sample for microfossils. It is common in California, for example, to drill hundreds of closely spaced holes --..~ .,~,... in sampling for paleontological purposes. To avoid misunderstandings, we recommend this vague term be deleted. 2060.1 Union recommends the following be added: "provided that the require- ments of items (3) and (4) of this section shall not be applicable to any well drilled on lands subject to an approved unit unless the proposed subsurface location of such well shall be nearer to any exterior boundary of such unit or to the subsurface location or proposed subsurface location of any producing or drilling well not subject to such unit than the applicable distances speci- fied as to oil and gas wells respectively in 2061.1 and 2061.2 hereof.ff 2060.2 Union objects to the provisions of this section,pertaining to wells drilled on lands subject to an approved unit, when the proposed subsurface location of such a well does not conflict with the spacing pattern established for a field or with the provisions of 2061.1 or 2061.2 hereof. We visualize costly operational delays unless 2060.2 is changed. For example, in many areas in Alaska, such as the Kenai Unit gas field, surface conditions limit the available drill sites. It will be necessary to deviate a number of wells in order to conform to the spacing pattern. These shallow wells can be drilled and completed within two weeks. If, upon the completion of one well it will be necessary to halt operations for ten days or more while the Commission holds the application to drill the next deviated well, the opera- tor will be burdened with an unreasonable standby cost. 2060.3 Union recommends deleting the sentence "After processing such survey reports, the Commission will set the allowable of the well, or take such other action as the facts may require." 2104. SEISMIC HOLES. Union suggests deleting the words "and to plug the surface of said seismic hole with at least ten (10) linear feet of cement." There are several ways to effectively plug seismic holes, depending upon the type of material drilled, the depth of hole, condition of the hole, pressures, etc., and the operator should have the option of plugging it with whatever means he deems appropriate to the circumstances. The suggested change does not, in any way, relieve the operator of responsibility of effectively plugging such hole. 2226.2 (9) Union recommends that this be deleted in its entirety. The Union Oil Company has no desire to withhold factual information or proposed plans from any regulatory body, but Union objects to revealing inter- pretive conclusions and predictions based on these data. If only factual data is presented, interested persons or bodies can make their own interpretations. 2226.3 It is not clear as to whether all of the information required under Section 2226.2 or only the application form must be furnished to each offset operator. Also, it is not clear as to just what constitutes an offset operator. 2229. RECORDS AND REPORTS Union-.objects to the words "other datan as being too genera1~· Union would like a restriction added so that only factual data, rather than interpretive data, must be furnished. Respectfully submitted, /s/ Harold M. Lian HML:lt Harold M. Lian Division Geologist #6 ~....,,;!p" ~ COP Y SHELL OIL COMPANY Shell Building 1008 West Sixth Street Los Angeles 54, Ca&ifornia May 13, 1960 Alaska Oil and Gas Conservation Regulations State of Alaska Department of Natural Resources Division of Mines and Minerals Box 1391 Juneau, Alaska Gentlemen: With respect to the proposed amendments and additions to the oil and gas conservation regulations to be considered at a hearing in Anchorage, Alaska on May 17, 1960, we wish to make the following suggestions (references being to section numbers): 2007. The 1960 statute amending Chapter 40 SLA 1955 refers to filing well reports within 30 days after the tlcompletion, abandonment or suspension" of a well. There is no definition of these quoted terms and since they may be given various interpretations we suggest that, in order to identify the commence- ment date for the 3D-day filing period, they be appropriately defined in Part 2007 substantially as follows: "2007. Completion, Abandonment, Suspension. A well shall be deemed completed when oil and/or gas is discovered therein, it is put upon production and operator contemplates no further drilling operations therein. A well shall be deemed abandoned when the work provided for in Sections 2101 to 2103 inclusive has been completed. A well shall be deemed suspended if and when temporarily abandoned in accordance with Section 2106. For the pur- poses of these regulations a well shall not be deemed completed, abandoned or suspended so long as the operator is in good faith working on plans for further drilling operations in such well." 2008.1 The period during which well reports provided for in the 1960 amendment of Chapter 40 SLA 1955 are to be kept confidential has not been cov- ered in the regulations. This may be accomplished by adding at the end of 2008.1 the following: tiThe required reports, logs and other information, if marked · confidential, · shall be kept confidential for a period of 24 months after the expiration of the 30-day filing period, unless the operator gives written permission to release such reports, logs or other information at an earlier date." 2060., 2060.1, 2060.2 and 2060.3 If in the course of drilling opera- tions it becomes necessary to suspend operations for a lO-day waiting period, or longer if a public hearing is required, because of contemplated deviation of a well, an undue and unnecessary hardship may be imposed upon the operator from the standpoint both of time and excessive cost of operations. This is particu- larly true in the case of exploratory drilling. We would suggest that this situation be avoided by providing for administrative approval of the contemplated deviation, leaving it to the Commission to call a public hearing on the matter in those instances in which it deems it necessary. This is consistent with the procedure followed in a number of other jurisdictions such as Colorado, Nevada and Wyoming. If this recommended procedure is followed there should be substi- tuted for Sections 2060 through 2060.3 inclusive the following: tl2060. Deviation. The maximum point at which a well penetrates the producing formation shall not unreasonably vary from the vertical drawn from the center of the hole at the surface. Deviation is permitted without special permission for short distances to straighten the hole, sidetrack junk, or .--~.. ~. State of Alaska Department of Natural Resources Division of Mines and Minerals 2 correct other mechanical difficulties. Before beginning any other controlled directional drilling, when the intent is to direct the bottom of the hole away from the vertical, notice of intention to do so shall be filed with the Commission on Form and approval obtained. Such notice shall state clearly the depth, exact surface location of the well bore, proposed direction of deviation, and proposed horizontal distance between the bottom of the hole and surface location. If approval is obtained, the operator shall file .with the Commission, within thirty (30) days after completion of the work, an accurate and complete copy of the survey made." It is our opinion that in a state such as Alaska where wide spacing is the rule, the suggested provision adequately protects all interested parties. Yours very truly, /s/ Donald S. Coye DSC : BH' Donald S. Coye Legal Department #5 COP Y STANDARD OI~CO. OF CALIFORNIA (WESTERN OPE~IONS, INC.) Anchorage, Alaska May 12, 1960 Mr. Donald Do Bruce, State Petroleum Geologist Mr. Richard V. Murphy, Petroleum Engineer State Division of Mines and Minerals 329 Second Avenue Anchorage, Alaska Gentlemen: In reference to the notice dated April 8, 1960, by the Department of Natural Resources concerning the proposed amendments to the Oil and Gas Conservation Commission General Rules and Regulations, we offer the comments and suggestions as set out ~)elow~ We have discussed these comments and sug- gestions with you informally and would be pleased to discuss them again if you require additional supporting reasons~ We will first provide our thinking as it pertains to the specific regulations and this will be followed further on in this letter by the wording we would propose. 2007.36 WELL HISTORY This regulation could be rewritten to be more specific and at the same time conform to curr8nt practiceo Normally all of the information re- quested in the definition is included in the report as submitted to the U.S.G.S. We suggest defining the regulation to read as that data normally submitted to the U.S.G.S. so as to avoid the use of a few specific items and the word,"etc." 2007.37 WELL LOG This regulation as written includes many items not considered to be "well logs. If We suggest the definition of well log as the electric re- sistivity and self~potential logs. The lithologic log or description is in- cluded in the well history; the directional survey is also included in the completion report of the well history of a directiona11y drilled hole. Dip- meter surveys provide strictly exploratory type information and do not in any way measure the productivity of the àrilled well. Sonic logs and gamma ray neutron logs are highly interpretive in nature. 2008.1 We suggest the exclusion of additional types of holes, such as; core holes, holeD drilled for geological information only and holes drilled solely for the parpose of seismic operations~ We feel these additional ex- clusions would recognize &nd encourage the use of this method as a tool for obtaining geological infor8ation~ If the information received from these holes is made public information as proposed in these regulations, it could have an adverse effect in making use of this method of exploration and thereby deter exploration. Also, it appears that the Commission could request this informa- tion on any specific hole under the statute if it so desired. 2060.1 We suggest this regulation be modified to eliminate the filing of unnecessary information in connection with unit operations. 2060.3 As the Commission has the authority to set allowables, there does not appear to be any necessity for reference in this particular regulation. 2104 SEISMIC HOLES We reco~~end deletion of reference to plug with at least ten linear feet of cement. Normally, in our seismic operations we plug seismic holes with native material in the areae In most cases, it would be impractical to plug a hole with 10 linear feet of cemento In the case of a helicopter seismic survey, the provision to plug the seismic hole with cement would be a consider- ably increased burden on th~ operationG Also, it is our normal operating pro- cedure to protect properly all fresh water bearing formations. Ot::: GU~jses. ~¡ 'VlOrding on 2104, incluBive, reacrš as follows: the proposed Amend lts from 2007.115 to "-' 2007.115 2007.125 (No chanße) (No change) 2007.36 Well gis~ory shall mean the written record progressively describing the strata, ~vater, oil or gas encountered in drilling a well with such additional data as normally furnished to the U. S. Geological Survey. 2007.37 ~ve!}. log shall mean electrical resistivity and self-potential logs. 2008.1 Except 20 hereafter provided and exclusive of core holes, holes drilled for geologic21 information only and holes drilled solely for the purpose of seis- mographic operations, during the drilling or deepening of every well, the opera- tor shall ke£¿ at the well a detailed and accurate reoord of the well, reduced to writing froill d~y to day, which shall be accessible to the Director or a repre- sentative of the Director upon order of the Commission at all reasonable times. Within thirty (30) d~ys &fter completion, abandonment or suspension of a well drilled for oil or gas, or for the discovery of oil or gas, or the recompletion of a well into a different source of supply, or where the producing interval is changed, a well history together with the required well logs shall be filed with the CO~1ission on forms prescribed by the Commissione Such reports shall include· the name, nUInuer and exact location of the well; lease name, date of completion, abandonment or suspension; date of first production, if any; name, age and depth of pool, or pools if 2 multiple completion, from which the well is producing; initial production test, including oil, gas, and water, if any; and such other information aG the COliIDission may requireo 2008.2 2010 2051 2059.3 2060 2060.1 Delete (No change) (No change) (No change) (No ch.::.pge) He suggest the addition of the following: Provided that the requirements of items 3 and 4 of this Section shall not be app1icEble to any well drilled on lands subject to an approved unit unless the proposed svbsurfacc location of such well shall be nearer to any exterior boundary of such uni.t or to the subsurface location or proposed subsurface loca- tion of any prod~lcíng or drilling well not subject to such unit than the appli- cable distances specified as to oil and gas wells, respectively, in Sections 206001 and 2061~2 hereof. 206002 (No chaû38) 2060.3 Upon compJetion, a complete angular deviation and directional survey of the well obtai;.iej by an ~pproved well surveying company shall be filed with the Commission, together with other regularly required reports. 2060.4 2061 2061.1 2061.2 2061.5 2104 (No change) (No change) (No change) (No che.nse) Delete SEISMIC HOLES Before abandoning any hole drilled for seismic purposes, which hole penetrates a usable fresh water horizon, it shall be the duty of the owner or driller of such hole to plug the same in any such manner as to protect properly all fresh water bearing formßtions. No suggested change for the balance of the regulations 2107 to 2229 inclusive. b We trust that the above will be of some assistance to you. Mr. J. T. Crooke.r ~7il1 be at the hearing and available for any questions that may have occurred to YOUo Is! Po Wo Gaster District Superintcnde~t F:;:p!.o:rQtioiJ. Dspari:ment /s/ J. T. Crooker District Superintendent Producing Department #4 COP Y .,~ MOBIL OIL COMPANY **1(** 612 South Flower Street Los Angeles 54, California May 6, 1960 Mr. James A. Willinms Director of Mines and Minerals 329 Second Avenue Anchorage, Alaska Dear Mr. Williams: This is in response to your notice, dated April 8, 1960, of proposed changes in the oil and gas conservation regulations. We believe the proposed changes in 2060 may work afi unintended and unnecessary hardship on operators and tend to discourage oil and gas àevelopment in Alaska. We recognize the purpose of the proposed 205001 is to assure that correlative rights will be protected, and the Commi.ssion will have the information it needs to perform its conservation function. 1Je believe these objectives can be ac- complished, however, without the problems and difficulties we foresee if the proposed language is retained. We suggest that no prior approval be required to deviate a well if the deviation does not result in an off-standard location, that is to say if a straight hole could, insofar aD the conservation law, be drilled to the same bottom hole location~ The fact that the well was drilled from another surface location because of terrain difficulties or other problems would not seem to have any conservation implications serious enough to justify the delay and expense necessary to comply with the proposed 2060.1. As you know, drilling costs in Alaska are extremely high, and even relatively short delays can be very very costly. We therefore suggest 2060 be revised as follows: 2060 Deviation: Except when a well is intentionally deviated, the maximum point at which a well penetrates the producing formation shall not unreasonably vary from the vertical drawn from the center of the hole at the surface. Any well may be intentionally directionally deviated, without special permission, for short dis- tances to straighten the hole, sidetrack junk, or correct other mechanical diffi- culties; a well may be directionally deviated for other purposes without per- mission only if the sub-surface location of such well complies with any appli- cable order of the Commission setting spacing units for the pool to which the well is to be drilled or, in the absence of such order, complies with 2061.2, or in the case of a well being drilled to a known oil pool, with 2061.1. We believe it would be helpful to define more specifically what is meant by an offset operator. Somewhat similar language is used in 226.2, but it is believed with somewhat different intentð The term could be defined and incorporated in 2007 or perhaps it would be more convenient to revise 2060~1 to read as follows: "2060.1 Except as provided in Section 2060, no well shall be intention- ally directionally deviated from th~ vertical unless the operator thereof shall first file application and obtain a permit froill the Co~missionð Such application shall be made on Form P-l 2nd shall include or have attached to it: (1) Surface and proposed producing interval locations in terms of distances from lease and section boundaries, (2) Reason for deviation, (3) List of offset operators and statement that each has been furnished a copy of the application by registered mail, and (4) Neat and accurate plat or sketch of the lease of all offset leases showing the names of all offset operators and the surface and proposed producing interval locations of the well. Plat shall be drawn to a scale which will permit easy observation of all pertinent data. Offset O~erators are the operators of spacing units immediately adiacent to the sºacin~ unit in which the well is to be bottomed or, if spacing units have not been established by the Commission, offset operators are the operators of tracts any portions of which are within 1500 feet of the proposed sub-surface location of the deviated well (500 feet of a well to be drilled to a known oil poo1)"tf Very truly yours, R~ Po Lavenant, Jr~ #3 -- COP Y INTER-OFFICE COMMUNICATION Location Tulsa, Oklahoma - May 2 1960 TO Mr. Zed D. Grissom Anchorage, Alaska Dear Zed: The proposed changes in the Oil and Gas Conservation regulations of the State of Alaska that you sent here on April 20, 1960 have been re- viewed by this office. In addition, they were studied by both the Production Engineering and Unitization Sections of the Production Department as well as the Legal Department. All departments found that the proposed rules are reasonable and the changes will produce a normal and useable draft. Another advantage is that the report forms specified therein are the standard Interstate Oil Compact Commission forms which are used in other states and have stood the test of practicability. Therefore, in our opinion, the proposed rules are workable and we have no objection to them. It is suggested that you so advise the Divsion of Mines and Minerals, if you concur. Very truly yours, FFW/MB cc - L. L. Ware 1s/ F. F. WRIGHT #2 ~~' COP Y UNION OIL COMPANY OF CALIFORNIA P. O. Box 1872 Anchorage, Alaska April 29, 1960 Mr. James A. Williams, Director Department of Natural Resources Division of Mines and Minerals P. O. Box 1391 Juneau, Alaska Dear Sir: In order to assist you in the formulation of the proposed changes to the Oil and Gas Leasing Regulations, I am sending you herewith Union Oil Company of California's objections to the proposed changes, as outlined in your letter of April 8, 1960. You are proposing that well logs shall mean all surface logs and data; that is, electric logs, lithologic logs, directional surveys, dipceter, etc. This co~any has no objection to the filing of electric logs when that electric log is defined as the self-potential and resistivity log of a well.. However, it appears to us that a requirement to include all other logs run in a well is unreasonable. To the best of our knowledge, in no other oil pro- ducing state is there a requirement such as this. We have no objection to disclosing additional logs when it is neces- sary to come before the Conservation Commission to support a secondary recovery operation or other operations that require the approval of the Commission. However, we do not feel it is in the best interest of either the State or the oil industry to require the filing of these logs on a routine basis. We wish to point out to you at this tiDe, the responsibility that the state will have if they have, in their files, all of the requested logs as proposed in the Regulations. If, for any reason, there is a leak in information on a confi- dential hole, the state would beCODe one of the parties under scrutiny by the industry. Under Section 2104, you propose that all seismic holes be plugged at the surface with at least ten linear feet of cement. Here, again, Alaska is unique in its requirements for the abandonment of seiscic holes. In no other area where seismic work is performed, is it necessary to plug the holes with cement. To the best of our knowledge, in all other areas, it is left to the discretion of the· operator as to the abandonment of the hole. If necessary, the operator will abandon the hole with cement, but it does not appear reasonable to us to make it mandatory to do so when a wooden plug will satisfy all requirements. All other comments on the proposed changes are minor in nature and will be presented to you at the Hearing in Anchorage on May 17, 1960. Very truly yours, CES:lt cc: Hon. Phil R. Holdsworth, Connnissioner ls1 C. E. Smith Manager of Operations Alaska Division '~ C OP Y PHILLIPS PETROLEUM COMPANY Bartlesvi1le, Oklahoma April 20" 1960 In re: Proposed Amendments to Certain of the Conservation Rules and Regulations "in the State of Alaska Department of Natural Resources Division of Mines and Minerals State of Alaska Box 1391 Juneau, Alaska Attention Mr. James A. Williams, Director Gen~lemen: This will acknowledge receipt of your general letter dated April B, 1960 setting forth proposed amendments to certain of the rules and regulations applying to oil and gas in the State of Alaska. All of the proposals, as set forth in your communication, meet with the full approval of our company.. We do not plan to attend the hearing on May 17 and lB. In event, as a result of the scheduled hearing, the Department may consider for adoption some other proposed rule or amendment, we would greatly appreciate the opportunity of expressing our views with respect to any such proposed rule.. Phillips Petroleum Company was pleased to have an active part in the hearing which resulted in the re.cent rules and regulations, and we sincerely thank you for giving us this opportunity to comment~ Yours very truly, Is/ L. E. Fitzjarrald LEF:OpN:HD #1 ) ) State of Alaska Department of Natural'Resources DIVISION OF MINES AND MINERALS Box 1391 Juneau, Alaska Aþ;r-il: .,8 , 1960 :,. \.1 ' OIL AND GAS HEARINGS SCHEDULED Under authority 'of Chapter 40 SLA 1955 and Chapter 64, SLA'1959, the Division of Mines and Minerals will hold a hearing on proposed amendments and additions to the Oil and Gas Conservation Regulations in Anchorage in the Y.M.C.A. Auditorium on May 17, 1960. This hearing 'Will immediately follow a hearing by the Division of Lands on it,s proposed changes to the Oil and Gas Leasing Regulations, ',which will star.t· at·.9:00 AM, and on which informa~ . tion is forthcoming from that Division~ The hearing will be continued on the :,l~th, if necessary. Specifically', an améridment is needed to Section 2008.1, Title 11 Alaska Admin~ istrative Code, because of an am:endment made to the Oil and Gas Conservation Açt (Chapter 40, SLA 1955) by the recent 'state Legislature. other amendments, additions, and deletions are now considered advisable, and will be considered at the same time. New regulations on secondary recovery and pressUre maintenance are proposed. <.. For quick reference, the regulations: now in force which will be affected by the, proposed changes are included on pages 2 and 3: typed single space. The proposed changes' are on pages 4 - 10 in double spacing. For further reference,' as a result 'of, the above- . mentioned amendment to Chapter 40, Subsection 4 (a) (2) of Section 4 now allows the Division of Mines and" Minerals to require: 11 ( 2) The makipg anêt filing of report s, well logs, drilling logs, e::Lß~t+.:Lc logs, , Ii thologic logs,· directional surveys, and', all other subsurface infor.ma1:¡;i.Q;tl on any well drilled for oil or gas, or for the discovery of oil or gas, or for . geolÓgic' information; '·provided, however, that the required reports a.nd informa-. , ti6n" shall be tiled within thirty (30) days after the completion, abandonment, .,,' or suspension of the well; provided further, that required: :rêports and il1forIIla,:"", tioD marked tconfidential' shaJ.l be kept confidentiaJ. for twenty four (24)'months å.fter the· 30~day fïling 'period, unless the' owner gives written permission to '·relea.se such 'reports, logs, or other information at an earlier date. II The petroleum industry and other interested persons are urged to attend the hearing 'and make comments, criticisms or objections to the proposed regulation changes and additions. Full consideration will be given to such statements before the changes are adopted. Written'statementä:réceived prior to, 'or during, the hearing will aJ.so receive. due attention,· and thésemaY'\hé sent to this office or to the Division of Mines and MineraJ.s at 329 Second Avenue, Anchorá$e. - .', . , .' James A. Williams Director PRESENTLY EXISTING REGULATIONS WHICH WILL BE AFFECTED BY PROPOSED CHANGES 2007~36 Well Log shall mean the written record progressively describing the strata, water, oil or gas encountered in drillIng a well with such additional information as to give volumes, pressure, rate of fill-up, water depths; caving strata, casing record, etc. . .2007.37 Wildcat Well shall mean a well drilled to explore a specific nonproducing structùre, or in a geological environment never before productive. It is' a well drilled to discover a previously unknown pool. ?008.1. Except as hereafter provided and exclUsive of core holesånd holes drilled solely for the purpose of seismographic operations, during the· drilling or. deepening of every well, the operator shall keep at the well a detailedand·åêcurate record of the well, reduced to writing from day to day, which shall be accessible to the .director upon the Qrder of the Commission at all reasonable times. Within sixty (60) days after the comple- tion o,f a well drilled for oil or gas, or the recompletion of a well into a different source of supply, or where the producing interval is changed, a completion report or reports shall be filed with the Commission, on forms presc:ribed by the Commission. Such repOrt:s sh~ll include name, number, and exact location of the well; lease name; date of completion; dat~ of first prQ(iuction, if any; name and depthbf pool, or pools, if a multiple completion, from which the well is producing; initial production test, including: oil, gas, and water, ;if any; ands~ch òther information as the Cormnissionmayrequire. 2008.2 In the case of stratigraphic tests or wildcat wells, the provisions of parag!.~ph 8~1 will apply, except that a copy of the records need not he furnished to the CorrunisSiori- : until eighteen (18) months af'ter the completion of any sUch well. The furnish- ing of ';s~'~ismographic anëL corè tèst results to' the Commisåon shall be on a sirriilarbasis. 2051. DR'rLLING PERMIT. Before any well is spudded in or drilled in Alaska for oil or gas,. apIÙication shall :belÌ1ade to the Cormnission and a permit obtained. A fee öf $50 must ~6c~mp~riy the applic~tiåri. 2059.3 All extraneous water shall be shut off and ·è-xcluded from the various oil and gas bearing strata which are penetrated. Water shut-offs shall ordinarily be made by cementing casing or cement bridging. 2060. DEVIATION. The maximum point at which a well penetrates the produc'ing . forlìlation shall not unreasona.bly ·vary from the vertical drawn,frowithe center of thé hole at the surface. Plans for directional drilling or whipstockingma'.Y be approved by the. Commission except that no permit shall bè required to whipstock short distances to straighten the hole" side track junk, or correct other mechanical difficulties. An operator may file an a.pplication for a permit to directionally deviate in advance of deviating the hole or if the well is being drilled he may notify the Commission in writing of his intentions to deviate and proceed at his own risk. 2061. WE~L SPACING. In the absence of an order by the Commission setting spacing units for a pool:' or granting an exception: 2061.1 No well drilled for oil shall be drilled upon any tract of land other than a governmental quarter section or governmental lot corresponding thereto nor shall it be located closer than 500 feet to any boundary line of a governmental quarter section or - 2 - ) ) PROPOSED AMENDMENTS, ADDITIONS, Al'ID DELETIONS T¡TLE 11,'ALASKA ADMINISTRATÍVE CODE· . , i . 2007·115 2~Q7·135 Director shall mean' the DirectÓr of the· Division·· of'" Mïne·s and Miner~ls. Exploratory well shall mean a well that discovers or is drilled to discover . . .'.... . . a p:reviq4~ly unkrih~ pool. I ~~.. ," ' .'.~. . ,I ~ ...... . , . . .. ... '2007.36 Well history shall mean'thewritten rècórd progressively desçribing the strata, water, oil or gas encountered in drilling a well with such additional information as to give volumes, pressure, rate of fill-up, water depths, caving strata, casing record, etc. 2007·37 Well log shall mean all subsurface logs and data, that is, electri.c 1qgs, lithologic logs, directional surveys, dipmeter, etc. 2008.1 Except as hereafter provided and exclusive of holes drilled solely for the purpose of seismographic operations, during the drilling or deepening of every well the operator shall keep at the well a. detailed ärid accuratè record of the well, reduced to writing from day to day, which shall be accessible to the Director or a representative of the Director upon order of the Commission at all reasonable times. \';¡i thin thirty (30) days after completion, abandonment or suspension of a well drilled for oil or gas, or for the : - ~;i,~G.overy . of oil or gas, or the recompletion of a well:Y1nto a different source of supply, . .' . . . I' , , . or: .whére. ..the producing interval is changed, a well history together with the required well logs shall be filed with the Commission on forms prescribed by the ·Commission.: , Such reports shall include the name, number and exact location of the well; lease name, date of completion, abandonment or suspension; date of first production, if any; name, age and depth of pool, or pools if a multiple completion, from which the well is producing; initial production test, including oil, gas, and water, if any; and such other information as the Commission may require. 2008.2 Delete. 2010. HEADINGS. Headings of Sections of these regulations are not part of the regulations and are inserted for convenience ?nly. - 4 - governmental lot corresponding thereto, nor cToser than 1000 ':feet tD the nearest well drill- ing to or capable of producing from the same pool. No more than one well shall be drilled to the same pool on any such quarter section or governmental lot correspoinding thereto, except by order of the Commission, nor shall any well be drilled on any such quarter section or governmèntal lot corresponding thereto containing less,:than, 150 acres except by. such order. " Except ~Nhen the COillnlission has no legal jurisdiction, no well shall be drilled upon any such governmental quarter section or governmental lot corresvonding the~eto ~h~n the same shall embrace two or more separately owned tracts or where there are separately owned interests in all or part thereof uI\le$'S 'anël'.until the, e;aid separately owned tracts or i,nterests shall have been pooled either voluntarily or in acèordance 1>lith the laws of Alaska. 2061.2 No well shall be drilled for gas .on·13. tract of,lp.nd consisting o;f,less than 640 surface contiguous acres and which is not substantially in the form'of a square, in accordance with legal subdivisions of the u.s. Public Land Surveys or on a governmental section containing less than 600 acres and no well shall be drilled closer than 1500 feet to any boundary line of' the tract or. closer than 3000 feet to the n~arest well drilling to or capable of producing from the same pool in the same tract. Notrnore than one well shall be drilled to the same pool or any such section or governmental lot corresponding thereto, except by order of the Commission, nor shall any well be drilled on any such section or ' governmental lot corresponding thereto containing less than 600 acres except bY.8uch order. Except when the Comrnission:has no legal jurisdiction, no w~ll shall be.drilled upon any governmental section when the same shall embrace two or more separately own'ed tracts or whère' there are separately owned interests in all or a. part thereof unlessapd . uptil the said separately o~ed tracts or interests shall have been pooled either voiuntarily or in' accÒrdance·with the laws of Alaska. , 2ö6'1< 5 In filing i3. Notice of Intention to J)r:i,ll, the surf~ce distance. must be shown between the proposed location and offset wells on the same and adjacent leases. 2104. SEISMIC, CORE AND OTHER EXPLORATORY HOLES. Before abandoning any hole 'drilled for 'seismic, 'ébre, or other exploratory purpos~s, vThich hole, penetrates a usable fresh- water horizon, it sIlall be the duty of the owner or driller of such hole to plug the same in . such tnanrier as tdp:totect properly all 1vater-beélring formations; and within eighteen (18) months after such plugging, a plugging record shall be filed with the Coramission by such ownerbr:'â.rille:rj':setting forth the 'location of the, holes and the method used in plugging the s~e to protect water-bearing formations. Upon application, the Commission may grant exem.ptions to this rule. 2107 ~ 'PLUGGING RECORD. A plugging record lnustbe ,sµbXD;itted to the Commission for all wells plugged within sixty (60) days from the date of plugging. " . I. ~ 3 - \ , ') ) 2051. " DRILLING PERMIT. ,Prior to the dr:Llling of. ~ny ,.well for. oil or gasq~ for geoiog:ic information, an application on Form No..' 'P-I, sh~ll be submitted to, th~ Co~issi.Q:n for approval. 'Except for wells drilled for geologic information only, a fee of $50.00 shall acco~pany each application.' A proposed drilling program placed in the remarks section of' Fò~ No. P-l or on an attached sheet shall accompany the, applica~~on and shall in9~~~~: the proposed bottom hole location (if the we¡'¡ :i,8. to be drilled dire~tio11a11y) ':., ,:the . ." . . J.' . t, proposed casing program includìng the size"and weight and the depth at which each string 'is t6'....be cemented, and....the::fb]ÖW:outprevention program to be, employed, toge~h~~. with. any , :";; :" \ . :, :. ' "ötherproposed drilling program information -w.hich ,may be. requi:r:~,d by theÇ"o~,ssion. . , '.. . 2Ö59.3 The operator of any well shall shut· off and exclude. aJ.l waters frQ~"ç.ny 011- or gas-bearing stratum to the satisfaction of the Commission, and to determine,1;;~~, effectiveness of such operations, the operator shall make a ca.S,ing and water shut off test , :, II.., . in accordance'with methods approved by the Co~ission. .. .. "I I",', ", ''''2060. DEVIATION. The maxim1lm'point"',at which a well penetrates th~ producin~ fòrmationshall not unreasonably vary' 'f~ppl, ,the vertical. drawn. ~rom the center of the hole at ·the surface. Deviat1on"'is' ,permitted wt·thout special permission for short distances to straighten the hole, sidetrack junk, or corrl8,çt othermeqhanical difficulties. 2060.1 Except for the: purposes stated in Sec:t:ion 2060, no well shall be intention- ally directionally deviated from the vertical unless the operator thereof .shall first file application and obtain a permit· from the Conn:nission. Such application shall be made on :Form.:P-l and shall include or.·have attac4ed to it:; (I) Surface and 1?rqposed pr.oducin~. interval locations in terms'of distances from lease. and section boun<iaries, (2) Re~s~n.f.or deviation, (3) List of offset operators'ar1d statement that each has been furnished a ~opy . of the apþiicat'1on by registered mai1.".: ~d (4) Neat and accurate plat or sketch of the lease· ·ànd of aJ..l" 6ffset leases showj.ng ·..the names of all offset operators and the surface and:: proposed producinginterval·loqati-ons of the well.. Plat shall be drawn to a scale which will permit easy observation of all pertinent data. - 5 - 2060.2 Upon receipt of application, the Commission will hold it for ten (10) days. If objection from any offset operator to the proposed intentional deviation is received within the ten day period, or if the Commission does not approve the proposed deviation, the application shall be subject to public hearing. If no objection from either offset operator or the Commission is interposed within the ten day period, the application shall be approved and.·permit issued by the Commission. 2060.3 Upon completion, a. complete angular deviation and directional survey:of the well obtained by an approved well surveying company shall be filed with the Commission, together with other regularly required reports. After processing such survey reports, the Commission will set the allowable of the well, or take such other action as the .facts may require. 2060.4 If the proposed, or final, location of the producing interval of the directionally deviated well is not in compliance with the spacing or other rules of the Commission applicable to the reservoir, proper application shall be made to obtain approval of exceptions to such rules. Such approval shall be· granted or denied at the discretion of the Commission, and shall be accorded the same consideration arid treatment as if the well had been drilled verticaJ.ly to the producing intel'"Val. 2061. WELL SPACING. In the absence 'of an order by the Commission setting spacing units for a pool: 2061.1 Not more than one oil well shall be drilled to the same pool on any governmental. quarter section or governmental lot corresponding thereto, nor shaJ..1.a.nywell be drilled for oil· on such tract which contains less than 150 acreS;d nor shaJ.l . the sub- surface location of any oil well 'be nearer than 500 feet to any bounda.ry line of such tract, nor nearer than 1000 feet to any well drillin~;'to or capable of pröducing from the same pool. In cases of unit agreements, goverrnnentalböûndary lines within the:unit)nay be disregarded provided that the wells are drilled on 160-acre spa.cing or any other,w:~.ll spacing approved by order of' the Commission. - 6 - .. , ) ') Except when the Commission has no legal.jurisdi~tion, no well shall be drilled for " . . ',,' " .' ;!. .',..,' oil upon any' gbvernmental quarter section, or'; gQvernmentaJ. lot corresponding there~o when the'same embÎ"aces twö or more separately owned. trac,t-s, or where there .~re separately owned interests in all or part thereof unless and until the,sai~,.,s~parately owned tracts or interests shall have been pooled either voluntarily, or ip, .~ccordance with the laws of Alaska. 2061.2 Not more than one· :.gås well shall be drilled to the same pool on any governmental section or governmental lot corresponding thereto, nor shall any well be drilled for gas on such tract which 'contains less than. ()oo"acres; nor shall the subsurface location of any gas well be nearer than 1500 feet to any boundary line of such tract, ~or nearer than 3000 feet to any well drilling to or capable of producing from the same pool. In cases of unit agreements, governmental boundary lines within the ,upit may be disregarded provided that the wells are drilled'on 640-acre spacing or any other well spacing a.pproved by order of the Commission. Except 'when the Commission has:Do legal jurisdiction, no well shaJ..l be drilled for " \. . gas u:pòn ånY-:~'~ß~erhinenta;1:::ae:et.ion :~hèn."the same shall embrace tyo or;more separately ~~led tracts or where there are separately owned interests in all or a part thereof, unless . . . . . and until the s·a].d sepårâ.tè1y ówned,.tr-ac:ts or inte~e~;ts shall h~v~ been pooled either . " ~ 1.\ ~ voluntarily or in accordance with the' láws':.of Al,aska. 2061.5 2104. Delete. , ,. SEISMIC HOLES. Before abà11doJ¡1ing ~y,hole drilled for seismic purposes, which hole penetrates a usable fresh water horizon, it shall be the duty of the owner or driller of such hole·' to plug the sàme. in such manner as to protect properly all fresh water bearing formations and to plug the surf·ace of said, seismic hole with at least ten (10) linear'feet' of cement. 2107. Delete. ..¡ : - 7 - 2203. WRITTEN NOTICES, REQUES~S, PERMITS AND ~PORTS. r ;,... (To the list of forms already adopted,it¡s, proposed to add the two following IOCC-approved forms for purposes of me~ting the requir.ements, of the following ne"\{ subchapter of sections on secondary recovery and pressure maintenance). Reservoir Pressure Report-Form P-12 Report of Injection Project - Form P-l3 SECONDARY RECOVERY AND PRESSURE l'4AINTENANCE OPERATIONS 2226. APPLICATION 2226.1 Any method of pressure maintenance or secondary recovery shall be permitted ~only upon hearing and order of the Commission. 2226.2 The application for a¡l permits for pressure maintenance or secondary 'recovery shall contain the following: (1,) Plat showing the unit" lease, or group of leases included within the proposed project. Plat shall also show the location of the proposed intake well or weilsandthelo,ca.t:lon of, all ,oil and gEtS wel~s, including abandoned and drilling wells and dry 'hol~s, and the Drones" Q:f all· operators offsetting the area encompassed within the project; (2) The formations in whi~h ~1 "veIls are currently completed; (3) The name, description, f1nêiclepth of the formation (common reservoir or common source of supply) to be affected by injection; , ( '+) The' log of ~ny exi~ting j_ntake 1vell or wells or such information as is available; (5) Description. of, th~ intake wells' casing) or the proposed casing þrogram, andpr:Qpoß.ed method for,,:~esting casing "before use of the input wells; (6) Statement as to the injection medium to be used, its source, and the estimated amounts to be injected daily; (7) A tabulation showing recent gas-oil ratio and oil and water production - 8 - "'.~ -- J )" ; tests for each of the producing oil and gas wells; : . ( 8 ) Stat~III:ent of th~ plan and rate of development of the area included ,! ":' witþ~~ theproj~?t; ,r !.... 'i . . . '. (9) A statement,,?r ",gr,~ph showing the rate of anticipated oil production 0"... ; \ ",:', " ", . from the proj ect j : , ':;, ~.,.' , . '. .;', (10) r :"). , .. , The names and addresses of the operator or operators of the project. 2226.3 In addition to the notice required by law, a copy of such application shall be mailed or delivered by the applicant to each offset operator of the project as shown on the application. Such copy of application shall be mailed or delivered on or before the da.te the application is filed with the Commission. Statement shaJ.l be attached to the application showing the parties to whom such copies have been mailed or delivered and their addresses. 2227· CASING MID CEMENTING OF INJECTION WELLS Wells used for injection of gas, air, or water or other extraneous fluids into the producing formation shall be cased with safe and adequate casing or tubing, and the casing cemented, so as to prevent leakage or damage to oil, gas or fresh water resources. 2228. NOTICE OF COMMENCEMENT AND DISCONTINUANCE OF INJECTION OPERATIONS The following provisions shall apply to all injection projects: (a) Immediately upon commencement of injection operations, the operator shall notify the Commission of the injection date. (b) Within ten (10) days after the discontinuance of injection operations, the operator shall notify the Commission of the date of such discontinuance and the reasons therefor. (c) Before any intake well shall be plugged, notice shall be served on the Commission by the owner of said well, and the same procedure shall be followed in the plugging of such well as provided for the plugging of oil and gas wells. - '9 - 2229· ~CORDSMID~PORTS Each operator of a pressure maintenance or secondary recovery project shall keep accurate records showing oil produced, injected volumes and injection pressure. Each operator shall file with the Commission a monthly report which shall show all produced and injected volumes and other data as required by the Commission. . ~, ,t ~, . . - 10 -