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Home My WebLink AboutO 001 A . . INDEX OTHER ORDER NO. lA 1. October 1, 1958 General Rules and Regulations Other Order lA (/\ /" !h~" 'Z.\' ~i.ÚJ A) Lt , ,--- Cathryn ~ Mack, Secr tary , Attest .--, "/-i' ¡; ,.---'/, ",. / :--:: ", " ' , /,/ -:", ", kt.",)" ,( a ¡J'Î.e ( Ii. Frank A. Metcalf, :&î~mber (~"¡;",,,J/ f/ æuæA Phil R. Holdsworth - , Territory of Alaska Alaska Oil and Gas Conservation Commission P. O. Box 1391 Juneau, Alaska Order No. 1 August 7, 1958 By the Commission: After due notice and hearing in Anchorage, Alaska, on March 25, 1958, the Commission finds that certain rules and regulations of a general nature and Territory·wide ap- plicability are necessary to the administration of Chapter 40, Session Laws of Alaska 1955· It Is Therefore Ordered: The following rules and regulations are hereby adopted, effective October 1, 1958. #1 -. - _.:,,,,," .)ë . /" GENERAL RULES AND REGULATIONS by the . ALASKA OIL AND GAS CONSERVATION COMMISSION GOVERNING THE CONSERVATION OF OIL AND GAS IN ALASKA under the authority cf the OIL AND GAS CONSERVATION ACT Chapter 40, SLA 1955 Effective October 1) 1958 , . " ' . . TAJ3LE OF CONTENTS ALASKA OIL Al\i1) GAS CONSERVATION COMMISSION GENERAL RULES AND REGULATIONS Introduction Rule 1. Scope of Rules and Regulations Rule 2. Waste Prohibited Rule 3. United States Government Leases Rule 4. Regulation and Classification of Pools Rule 5. Forms upon Request Rule 6. Authority to Cooperate with other Agencies Rule 7. Definitions Rule 8. Well Logs Rule 100. Drilling Permit Rule 101. Re-entry Rule 102. Change of Location Rule 103. Transfer of Permit Rule 104. Bonding Rule 105. Rotary Drilling Procedure Rule 106. Cable Tool Drilling Procedure Rule 107. Identification of Wells Rule 108. Sealing off Strata Rule 109. Deviation Rule 110. Well Spacing Rule ill. Fire Hazard Rule 200. Notice Rule 201. Procedure for Plugging Page 1 1 1 1 1 2 2 2 4 6 6 6 6 6 6 7 7 8 8 8 9 l~ 10 , } ¡>1 .'~ ... - .". ~'..., r-,,..... ...., (.',,' :; I~",'.:_;; r"' " t.·'" , -;~ . T>.~ J.,~'_'" :--::3,. . . ~ !r.'è':-.~:', Well 10 ,~ :':~,._~:-:,~, Cere, and other Exploratory Holes 10 _::::; l·7ç:J_}.s 11 S:C"::~0:"ry Atn..:J.dOlwent 11 :E1.1}.C 2c6. f'J:J-3C':C.ns Ree ord 11 Rule 308. S1..~:rf(;'"Ç;8 Equj.pment 12 Ru.1e 38L C:o>:cs Rule 302. Rule 303- Rule :,01+. 12 s.e::~;'~:'I:-:B. i:·a:~ r 12 No~~fi~s~~ion of ~ire, Breaks, Leaks, or Blowouts 12 rr':)Cuc:tng from Different Pools through the Same Casing 12 St::iJ:1e: Rule 305. ~.íI)J:!:.:'~ple Completion of Wells 12 ThJ.1D. ~o6. CC"11.."J.5JJ.gling of Production Prohibited 12 ?~..tlr. ?'JC,. RUJ.2 ?oS,! - EJT<::en Rcs0.rvoirs 13 Rule -:~oo. of Gar. Wells to Produce 13 j'TCY ~.~ :L I, \ e 0": rT1~(""'.·I.-:", .,'........ L,' <,J..,' 13 Hu.lc 3·:.0. c:--: ·~·o 'be Me'~:,e:;:,ed Ru.l,-: j..i... '. " 13 "~.'~_.: U<''':5.l:l.za't:.on 13 RuJ.S 312. (;8.'>·05.1 Re::;:tOß Pille "., ,..." :;,t.~1I F·~t:,.8 ?J.1J. C-.~:·:-,:,~Ù :2A..:.'1l< Batteries 13 14 of Erj.ne or Salt Water and other Waste Materials14 14 RLÜe 37_5. Eç~l:;;:;~"")l(; Disi~ribution of Production R:u.;.1? 316. r'~,l Pr-)-~.'J.ction 14 RuJ.c 5G'J. I-::.;':",. .G:.~.'l.~_ J:nfc:::'l1lation m..ay be Requested 15 Th.1.le: 50J.. J':'ooks :]~;,l¡j. Record.f1 to be Kept to Substantiate Reports 15 Rule 502, "";.;~:f::·,cen IÇa:~:tces, Requests, Permits and Reports 15 RuJ.C: 503. t;¡o·~~:":·.nc Llf"'~ 15 , ' . . ALASKA OIL AND GAS CONSERVATION COMMISSION GENERAL RULES AND REGULATIONS Introduction Pursuant of the power and authority delegated to the Oil and Gas Conserva- tion Commission by the Oil and Gas Conservation Act, Chapter 40, SLA 1955, approved ~ßrch 15, 1955, after due notice, the Oil and Gas Conservation Commission does hereby make, adopt, and promulgate the following general rules and regulations deemed by the Commission to be reasonably necessary for the proper administration and enforce- ment of the Act. These rules and regulations shall become effective this 1st day of October, 1958. MISCELLANEOUS RULES AND DEFINITIONS Rule 1. SCOPE OF RULES AND REGULATIONS. The rules and regulations hereby adopted and hereinafter set out are general rules of statewide application and shall apply to all fields; provided, however, special rules, applicable to particular areas or subject matter, shall prevail over these general rules to the extent that they are in conflict therewith and to th~t extent only. Rule 2. WASTE PROHIBITED. Waste as defined in the statute is prohibited. Rule 3. UNITED STATES GOVERNMENT LEASES The CowÆission recognizes that all persons drilling on United States government land shall comply ~ith the United States government regulations. Such persons shall also comply witil all applicable Alaska rules and regulations which are not in conflict "therewith. Copies of the "Sundry Notices and Reports on Wells" and the "Well Log'! of the wells on U. S. Government land shall be furnished the Commission, or such reports in lieu thereof as may be aQopted by the United States Geological Survey. Rule 4. REGULATION AND CLASSIFICATION OF POOLS 4.1 wnen the Commission finds, upon hearing, that the operation of a pool should be regulated in order GO prevent waste, increase ultimate recovery, or protect correlative rights, the Commission shall thereupon promulgate appropriate pool rules and regulations to accomplish such objectives. Where any of the above findings are made by the Comrfiission, the total production from the pool may be re- stricted and just and equitable share made to the various wells located therein, or the operation of the pool may be otherwise regulated and controlled to insure proper àndadàquctte conservation. All pool rules and regulations so promulgated shall be based on oper~~ing and technical data and shall be consistent with the characteristics attributable to each classification. 4.2 Any allocated pool, or any pool subjected to pool regulation by the Commission as set out in paragraph 4.1 shall be classified by the Commission, upon hearing, as an oil pool, or gas pool. - 1 - . . 4.3 The fact that pool data at one stage of development of a pool indicates and results in its classification as either an oil or gas pool shall not preclude the right nor the obligation of the Commission thereafter to reclassify and amend the rules and regulations in such pool upon the presentation of additional pool data at a subsequent hearing. Rule 5. FORMS UPON REQ,UEST Forms for written notices, requests and reports required by the Commission will be furnished upon request. Rule 6. AUTHORITY TO COOPERATE WITH OTHER AGENCIES The Commission may from time to time enter into arrangements with Alaska and Federal governmental agencies, industry committees and individuals, with respect to special projects, services and studies relating to conservation of oil and gas. Rule 7. DEFINITIONS Unless the content otherwise requires, the words defined shall have the following meaning when found in these rules, to-wit: 7.1 Alaska shall mean the Territory or State of Alaska. 7.2 Barrel shall mean forty-two U. S. gallons, measured under standard C ondi ti ons . 7.3 Blowout Preventer shall mean a heavy casinghead control which may be closed around the drill pipe or cable tools. 7.4 Bottom Hole Pressure shall mean the pressure in pounds per square inch under conditions existing at or near the producing horizon determined by means of an instrument adopted and recognized by the oil and gas industry. 7.5 Commission shall mean the Alaska Oil and Gas Conservation Commission. 7.6 Common Source of Supply shall be synonymous with pool. 7.7 Condensate shall mean the liquid recovered at the surface that results from condensation due to reduced pressure or temperature of petroleum hydro- carbons existing in a gaseous phase in the reservoir. 7.8 Cubic Foot of Gas shall mean the volume of gas contained in one cubic foot of space at a standard pressure base and a standard temperature base. The standard pressure base shall be 14.65 pounds per square inch absolute and the standard temperature base shall be 60° F. 7.9 Day shall mean a period of twenty-four (24) consecutive hours from 7 a.m. one day to 7 a.m. the following day. The calendar day shall be the day on which this period begins. 7.10 Developed Area or Developed Unit shall mean a drilling unit having a well completed thereon which is capable of producing oil or gas in paying quanti- ties; however, in the event it be shown, and the Co~mission finds, that a part of any - 2 - . . unit is nonproductive, then the developed area of the unit shall include only that part so found to be productive. 7.11 Development shall mean any work which actively looks toward bringing in production, such as surveying for locations, building roads and locations, erecting rigs, building tanks, drilling wells, etc. 7.12 Drilling Fluid shall mean any fluid as the term is commonly used in the industry for the purpose of drilling and removing cuttings from the well. 7.13 Drilling Unit shall mean that area set by the Commission as provided for in Section 6 of the Oil and Gas Conservation Act. 7.14 Gas Allowable shall mean the amount of natural gas authorized to be produced by order of the Commission. 7.15 Gas-Oil Ratio shall mean the ratio of production of gas in standard cubic feet to oil in barrels produced concurrently during any stated period. 7.16 Gas Repressuring shall mean the introduction of gaseous substances into a pool by artificial means in order to replenish, replace, or increase the pool energy. 7.17 Gas Well shall mean (a) a well which produces natural gas only; (b) that part of a well where the gas producing stratum has been successfully cased off from the oil, the gas and oil being produced through separate casing or tubing; (c) any well classed as a gas well by the Commission in the administration of the statute. 7.18 Master Gate shall mean a gate valve or other suitabJ.e device used to completely close off the inner string of casing in the event of a blowout which might occur when the hole is free of drill pipe or cable tools. 7.19 Mud-Laden Fluid shall mean any mixtures of liquids and clay or other material, as the term is commonly used in the industry, which will effectively seal the formations to which it is applied. 7.20 Multiple Completion shall mean the completion of any well so as to permit the production from more than one pool with the production from each pool completely segregated. 7.21 Oil Allowable shall mean the amount of oil authorized to be produced by order of the Commission. 7.22 Oil Well for the purpose of the rules shall mean any well operated for the primary purpose of producing liquid hydrocarbons and which by the nature of its production cannot be classed as a gas well as defined in Rule 7.17. 7.23 Operator shall mean any person who, duly authorized, is in charge of the development of a lease or the operation of a producing well. 7.24 Overage, Overproduction shall mean the oil or gas produced in ex- cess of the allowable fixed by the Commission. - 3 - . . 7.25 Period} Allowaþle shall mean the period as designated in which an allowable may be produced. 7.26 Pool shall mean an underground reservoir containing, or appearing to contain, a coIT.IDõñ accumulation of oil or gas. Each zone of a structure which is completely separated from any other zone in the same structure is a pool. 7.27 Potential shall mean the daily ability of a well to produce oil or gas as determined by a test approved or witnessed by the Commission or its authorized agent. 7.28 Pressure Maintenance shall mean the introduction of fluid or gas for the purpose of maintaining pool pressure. 7.29 Purchaser shall mean any person who directly or indirectly purchases} transports} takes or otherwise removes production to his account from a well} wells, or pool. 7.30 Reservoir shall mean the same as pool. See Rule 7.26. 7.31 Run shall mean oil or gas measured at standard conditions and moved off the lease or-uñit. 7.32 Share} Just and Equitable shall mean that each owner of a developed area in a pool shall receive production in the proportion that the recoverable oil and gas under his developed area bears to the total recoverable oil and gas in the total developed area of the pool. 7.33 Shortage or Underage shall mean the amount of production less than the allowable. 7.34 Standard Conditions shall mean temperature of 60° F. and absolute pressure of 14.65 psi. 7.35 Stratigraphic Test shall mean a hole drilled for the sole purpose of gaining structural and/or stratigraphic information and to a depth sufficient to penetrate and explore formations which are prospective producing pools, but is not drilled in a manner to be completed as a producing well. 7.36 Well Log shall mean the written record progressively describing the strata} water, oil or gas encountered in drilling a well with such additional infor- mation as to give volumes, pressure} rate of fill-up, water depths, caving strata} casing record} etc. 7.37 Wildcat Well shall mean a well drilled to explore a specific non- producing structure, or in a geological environment never before productive. It is a well drilled to discover a previously unknown pool. Rule 8. WELL LOGS 8.1 Except as hereafter provided and exclusive of core holes and 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 and accurate - 4 - . ' . . record of the well, reduced to writing from day to day, which shall be accessible to the director upon the order of the Commission at all reasonable times. Within sixty (60) days after the completion of a well drilled for oil or gas, or the re- completion 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 prescribed by the Commission. Such reports shall include name, number, and exact location of the well; lease name; date of completion; date of first production, if any; name 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 re~uire. 8.2 In the case of stratigraphic tests or wildcat wells, the provisions of paragraph 8.1 will apply, except that a copy of the records need not be furnished to the Commission until eighteen (18) months after the completion of any such well. The furnishing of seismographic and core test results to the Commission shall be on a similar basis. - 5 - . . DRILLING Rule 100. DRILLING PERMIT. Before any well is spudded in or drilled in Alaska for oil or gas, application shall be made to the Commission and a permit obtained. A fee of $50 must accompany the application. Rule 101. HE-ENTRY. In the instance that a suspended well is being re-entered for any purpose, other than routine cleanout or repair work that does not change the producing interval, the operator shall so advise the Commission in writing. Rule 102. CHANGE OF LOCATION. If, prior to the drilling of a well, the person to whom the permit was originally issued desires to change the location outside of the designated quarter section, he shall submit a letter so stating and another ap- plication properly filled out showing the new location. No additional fee is neces- sary, but drilling shall not be started until the transfer has been approved. Changes of location within the designated quarter section shall be reported to the Commission only as a notice of correction. Rule 103. TRANSFER OF PERMIT. If, while a well is drilling or after it has been completed, the person to whom the permit was originally issued disposes of his interest in the well} he shall submit a written statement to the Commission setting forth the facts and requesting that the permit be transferred to the person who has acquired the well. The latter person must furnish bond as provided for in Rule 104. Approval by the Commission of the transfer shall be the authority for release or cancellation of the former owner or his surety. Rule 104. BONDING. The Commission shall, except as hereinafter provided, require from the operator a good and sufficient bond in the sum of not less than $5,(00 in favor of the Alaska Oil and Gas Conservation Commission, conditioned that the well upon abandonment shall be pluGged in accordance with the rules and regulations of the Commission, and that the well be repaired in compliance vith the rules and re- gulations of the Commission. Said bond shall remain in force and effect until the pl~gging of said well is approved by the Commission, or the bond is released by the Commission. It is provided that any operator in lieu of such bond may file with the Commission a good and sufficient blanket bond, in a sum of not less than $10,000, covering all wells drilling or to be drilled in Alaska by the principal in said bond, and upon acceptance and approval by the Commission of such blanket bond, such compliance shall be in full compliance with the above provisions requiring an individual well bond. The bond or bonds hereinbefore referred to shall be by a corporate surety authorized to do business in Alaska, or in cash. Operators having deposited bond with the Federal Government for the above purpose are not required to deposit bond with the CowÆission. Rule 105. ROTARY DRILLING PROCEIDRE. 105.1 Surface Casing Requirements and Cementing for Proper Anchorage. Suitable and safe surface casing shall be used in all wells. In all wells being drilled, surface and other protection casing shall be run to sufficient depth to afford safe control of any pressures that may be encountered, and shall be sufficiently tested therefore. Surface casing shall be set through an impervious formation, and shall be cemented with sufficient cement to circulate to the top of the hole and pro- vide for cement around the outside in case the cement does not circulate. The cement shall stand for at least eight hours before drilling plug or initiating tests. - 6 - , . . . 105.2 Blowout Preventers and Casingheads. The use of blowout equipment shall be in accordance with good established practice. After cementing surface casing, all drilling wells shall be equipped with a mastergate, and an adequate blowout preventer, together with a casing outlet valve(s) of the proper size and working pressure. The entire control equipment shall be in good working condition at all times. 105.3 Cementing and Testing of Casing and Connections. If and when it becomes necessary to run casing, other than surface casing, such casing shall be cemented by the pump and plug method and shall be properly tested by the pressure method; and the cement shall set a minimum time of eight (8) hours before cement .'plugs.are drilled. Rule 106. CABLE TOOL DRILLING PROCEDURE. 106.1 Slush Pits. Before commencing to drill, proper and adequate slush pits shall be constructed. During the course of drilling, operator shall accumulate in pits mud-laden fluid of sufficient quality and quantity so that such mud may be available for any emergency condition or plugging and abandonment. 106.2 Surface Casing. Surface casing shall be set in accordance with Rule 105.1. Such surface casing shall be tested by bailing or pressure test to insure a shut-off before drilling below the casing point proceeds. 106.3 Blowout Preventers and Casingheads. The use of blowout equipment shall be in accordance with good established practice. After cementing surface casing, all drilling wells shall be equipped with a mastergate, and an adequate blowout preventer, together with a casing outlet valve(s) of the proper size and working pressure. The entire control equipment shall be in good working condition at all times. 106.4 Natural Gas Above Objective. No natural gas, which may be encount- ered in any section of a cable tool drilled hole above the ultimate objective, may be permitted to blow while drilling proceeds, but must be shut off either by mudding or by the running of a string of casing, and, if the latter method is used, such string of casing must be tested by bailing or pressure test to insure shut-off before drilling proceeds. 106.5 Casing Program. The casing program adopted for cable tool drilled holes must be so planned as to protect any potential oil- or gas-bearing horizons penetrated during drilling from the infiltration of injurious waters from other horizons) and to prevent the migration of oil or gas from one horizon to another. Rule 107. IDENTIFICATION OF WELLS. Every drilling and producible well shall be identified by a sign, posted on or near the derrick or not more than 100 feet from such well. Such signs shall be of durable construction, the lettering thereon shall be kept in legible condition and shall be large enough to be legible under normal con- ditions at a distance of fifty feet. The wells on each lease or property shall be numbered in nonrepetitive, logical and distinc~ive sequence. Each well shall show the number of the well, the name of the lease (which shall be different and distinct- ive for each lease), the name of the lessee, owner or operator, the location by quarter-section, township and range, and the drilling permit number. - 7 - . . Rule 108. SEALING OFF STRATA. 108.1 During the drilling of any oil or natural gas well) all gas) oil) and water strata above the producing horizon shall be sealed or separated in order to prevent their contents from passing into other strata. 108.2 All fresh waters and waters of present or probable value for domestic, commercial or stock purposes shall be confined to their respective strata and shall be adequately protected by methods approved by the Commission. Special precautions bW methods satisfactory to the Commission shall be taken in drilling and abandoning wells to guard against any loss of any fresh water from the strata in which it occurs) and the contamination of any fresh water by objectionable water) oil)or gas. 108·3 All extraneous water shall be shut off and excluded from the various oil and gas bearing strata which are penetrated. Water shut-offs shall ordinarily be made by cementing casing or cement bridging. Rule 109. 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. Plans for directional drilling or whipstocking may be approved by the Commission except that no permit shall be required to whipstock short distances to straighten the hole, side track junk, or correct other mechanical difficulties. þ~ operator may file an application 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. Where an operator proceeds to deviate at his own risk, he shall not produce the well until authorized by the Commission; he shall file a directional survey of the hole and request authority to produce the well. The Commission will grant authority to produce only after due notice and hearing at which interested parties may appear to protest. After due notice of ten (10) days is given by the Commission, an operator may be given authority to produce the deviated well without a hearing if waivers of protest are presented from all offset operators. Rule 110. WELL SPACING. In the absence of an order by the Commission setting spacing units for a pool: 110.1 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 governmental lot corresponding thereto, nor closer than 1000 feet to the nearest well drilling 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 corresponding thereto, except by order of the Commission) nor shall any well be drilled on any such quarter section or governmental lot corresponding thereto containing less than 150 acres except by such order. Except when the Commission has no legal jurisdiction, no well shall be drilled upon any such governmental quarter section or governmental lot corresponding thereto when the same shall embrace two or more separately owned tracts or where there are separately owned interests in all or part the.reof unless and until the said separately owned tracts or interests shall have been pooled either voluntarily or in accordance with the laws of Alaska. - 8 - : . . 110.2 No well shall be drilled for gas on a tract of land consisting of 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 nearest well drilling to or capable of producing from the same pool in the same tract. Not more 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 such order. Except when the COIDÆission has no legal jurisdiction, no well shall be drilled upon any governmental section when the same shall embrace two or more separate- ly owned tracts or where there are separately owned interests in all or a part thereof unless and until the said separately owned tracts or interests shall have been pooled either voluntarily or in accordance with the laws of Alaska. 110.3 Upon the request of any interested party, at any time after the discovery of oil or gas in a pool not then covered by an order of the Commission, a hearing may be held and the Commission shall issue an order prescribing a temporary spacing pattern for the development of the pool. This order shall continue in force for a period of not more than eighteen (18) months at the expiration of which time a hearing shall be held at which the Commission may require the presentation of such evidence as will enable the Commission to determine the proper spacing for the pool. 110.4 If, after notice and hearing, the Commission shall find that a well drilled at the location prescribed by any applicable rule of the Commission would not produce in paying quantities or that surface conditions would substantially add to the burden or hazard of such Jell, the Commission may enter an order permitting the well to be drilled at a location other than that prescribed and shall include in such order suitable provisions to prevent the production from that well of more than its just and equitable share of the oil and gas in the pool. Application for an exception shall set forth the names of the lessees of all properties within a radius of one (1) mile and shall be accompanied by a plat or sketch drawn to the scale of not smaller than one (1) inch equalling 2640 feet, accurately showing to scale the property for which the exception is sought and accurately showing to scale all other completed and drilling wells on this property and accurately showing to scale all adjoining surround- ing properties and wells. The application shall be verified by some person acquainted with the facts, stating that all facts therein stated are within the knowledge of the affiant true and that the accompanying plat is accurately drawn to scale and correctly reflects pertinent and required data. Upon the filing of such application, the Commission shall give notice of such filing by registered mail to all lessees of lands adjacent to such tract for which the exception is sought. The Commission shall issue no order on such application for at least ten (10) days after its filing. 110.5 In filing a Notice of Intention to Drill, the surface distance must be shown between the proposed location and offset wells on the same and adjacent leases. Rule 111. FIRE HAZARD. Any rubbish or debris that might constitute a fire hazard shall be removed to a distance of at least one hundred (100) feet from the well) all tanks, and separators. All waste oil shall be burned or disposed of in a manner to avert creating a fire hazard. - 9 - " , ' . . ABANDONMENT AND PLUGGING Rule 200. NOTICE. Before beginning abandonment work on any well, whether it is a drilling well, oil or gas well, water well, or so-called dry hole, notice of intention to abandon shall be filed with the Commission and the work will be in compliance with standared, specified procedure. If a dry hole is to be plugged, instructions and approval to plug may be obtained from the appropriate agent of the Commission by telephone, telegram, or radio; however, the form "Notice of Intention to Plug and Abandonfl in respect to such dry hole shall be filed as promptly as possible. The notice must show the reason for abandonment and must be accompanied by a detailed statement of proposed work, including such information as kind, location, and size of plugs (by depth) and plans for mudding, cementing, shooting, testing, and removing casing, as well as any other pertinent information. Forms of this Commission, or in the case of wells drilled on U. S. Government leases, two copies of the notice to the Supervisor of the U. S. Geological Survey, shall be used for this purpose. Rule 201. PROCEDURE FOR PLUGGING. Each abandoned hole or well shall be plugged by or on behalf of the owner, operator, or producer who is in charge of the well and responsible therefor. Unless a different method and procedure shall be approved by the Commission upon application by the owner, operator, or producer on Form No. P-15, the method and procedure for plugging the well shall be as follows: 201.1 The bottom of the hole shall be filled to, or a bridge shall be placed at, the top of each producing formation open to the well bore, and in either event a cement plug not less than fifty (50) feet in length shall be placed, whenever possible, immediately above each producing formation open to the well bore. 201.2 A cement plug not less than fifty (50) feet in length shall be placed at approximately fifty (50) feet below all fresh-water-bearing strata. 201·3 A plug shall be placed at or near the surface of the ground in each hole. 201.4 The interval between plugs shall be filled with heavy-mud-laden fluid. 201·5 fu1 uncased hole shall be plugged with heavy mud up to the base of the surface string, at which point a plug of not less than fifty (50) feet of cement shall be placed. Within thirty (30) days after plugging of any well, the owner, operator, or producer responsible therefor who plugged or caused to be plugged the well shall file with the Commission, an affidavit of Form No. P-15, setting forth in detail the method used in plugging the well. Rule 202. MP~R, WELL. The exact location of the abandoned hole shall be shown by a steel marker at least four (4) inches in diameter and at least ten (10) feet long set in concrete and extending at least four (4) feet above the mean ground level. Rule 203. SEISMIC, CORE AND OTHER EXPLORATORY HOLES. Before abandoning any hole drilled for seismic, core, or other exploratory 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 such manner as to protect properly all water-bearing formations; - 10 - , . . . . . and within eighteen (18) months after such plugging, a plugging record shall be filed with the Commission by such owner or driller, setting forth the location of the holes and the method used in plugging the same to protect water-bearing formations. Upon application, the Commission may grant exemptions to this rule. Rule 204. ì-JATER WELLS. When the well or exploratory hole to be plugged may safely be used as a fresh-water well, and such utilization is desired by the landowner, the well need not be filled above the required sealing plug set below the fresh water; provided, that written authority for such use is secured from the landowner, and filed with, and approved by the Commission. Such authority from the landowner shall also include, on the part of the landowner, full responsibility for the final plugging of such water well. Approval by the Commission of authority to convert the well to a fresh water well, and approval by the Commission of the plugging of such well to the base of the fresh water sand, shall forthwith release and discharge the principal and its surety of and from any liability under any bond given to assure that such well will be properly plugged and abandoned. Rule 205. TEMPORARY ABANDONMENT. If a well is to be temporarily abandoned and no casing pulled, then, subject to approval by the Commission, a plug shall be placed at the top and bottom of the casing in such manner as to prevent the intrusion of any foreign matter into the well and the well left full of mud. Rule 206. PLUGGING RECORD. A plugging record must be submitted to the Commission for all wells plugged within sixty (60) days from the date of plugging. - 11 - '. . . t . . o¢L /~5!? PRODUCTION PRACTICES Rule 300. SURFACE EQUIPMENT. Meter fittings of adequate size to efficiently measure the gas for the purpose of obtaining gas-oil ratios shall be installed on the gas vent line of every separator or proper connections made for orifice well tester. Wellhead equipment shall be installed and maintained in first-class condition so that static bottom hole pressures of flowing wells may be obtained at any time. Valves shall be installed so that surface pressures can be readily obtained on both casing and tubing. Rule 301. CHOKES. All flowing wells shall be equipped with adequate chokes or beans, to properly control the flow therefrom. Rule 302. SEPARATORS. All flowing oil wells must be produced through an oil and gas separator unless the omission of such separators be approved by the Commission. Rule 303. NOTIFICATION OF FIRE, BREAKS, LEAKS, OR BLOWOUTS. All persons control- ling or operating any oil and gas wells or pipelines, or receiving tanks, storage tanks, or receiving and storage receptacles into which crude oil is produced, re- ceived, stored, or through which oil is piped or transported, shall immediately notify the Commission by letter giving full details concerning all fires which occur at such oil or gas wells or tanks or receptacles on their property, and all such persons shall immediately report all tanks or receptacles struck by lightning and any other fire which destroys oil or gas, and shall immediately report any breaks or leaks in or from tanks or receptacles and pipelines from which oil or gas is escaping or has escaped. In all such reports of fires, breaks, leaks, or escapes, or other accidents of this nature, the location of the well, tank, receptacle, or line break shall be given by section, township and range, and property so that the exact location thereof can be readily located on the ground. Such report shall likewise specify what steps have been taken or are in progress to remedy the situation reported and shall detail the quantity of oil or gas lost, destroyed, or permitted to escape. In case any tank or receptacle is permitted to run over, the escape thus occurring shall be re- ported as in the case of a leak. The report hereby required as to oil losses shall be necessary only in case such oil loss exceeds two hundred (200) barrels in the aggregate, or when such gas loss exceeds two million (2,000,000) cubic feet in the aggregate. Rule 304. PRODUCING FROM DIFFERENT POOLS THROUGH TII:E SAME CASING STRING. No well shall be permitted to produce either oil or gas from different pools through the same string of casing without first receiving written permission from the Commission. If a formation should be encountered bearing either oil or gas and it is desired to drill deeper in search of other oil- or gas-bearing formations, the formation first penetrated and likewise each and every formation shall be closed and sealed off to prevent waste, either surface or underground. Rule 305. lvIULTIPLE COMPLETION OF WELLS. No well may be multiply produced with- out approval by the Commission. The order of the Commission will require (1) adquate and complete separation, as ascertained by packer tests of the various pools invol- ved in the completions, and (2) the approval by the agent of the Commission or its engineer of the multiple completion. Rule 306. COMMINGLING OF PRODUCTION PROHIBITED. The production from one pool shall not be commingled with that from another pool except when the quantities from each source of the production are dètermined by periodic well tests or other measure- ments. Commingling of production from two or more pools in the same well bore shall - 12 - . ~ '. . . . not be permitted except after notice) hearing) and a special order of the Commission approving such commingling. Rule 307. EARTHE'N RESERVOIRS. Oil shall not be stored or retained in earthen reservoirs or open receptacles except on permission of the Commission. Rule 308. CAPACITY OF GAS WELLS TO PRODUCE. All gas wells shall be tested by the multi-point back pressure method as provided on the test form prescribed by the Commission. Rule 309. NOTICE OF TESTS. Flow and pressure tests of gas wells for the purpose of determing allowables may be witnessed or observed by a representative of any producer in a field and the owners of the adjoining or offset leases must be notified by the owner of the well on which the test is to be taken, stating the time wher. such test will commence. Rule 310. GAS TO BE METERED. All gas when produced and saved from gas wells shall be metered with an approved meter of sufficient capacity, provided that gas may be metered from a lease or unitized property as a whole if it is shown that ratable taking can be maintained. Bypasses shall not be connected around meters in such a manner as to permit the improper taking of gas. Rule 311. GAS UTILIZATION. After the expiration of thirty (30) days from the time of completion of a gas well, no gas from such well should be permitted to escape into the air, and all gas produced therefrom may be utilized for the following purposes: 311.1 Drilling with gas as a circulating medium. 311.2 Light or fuel. 311.3 Efficient chemical manufacturing. 311.4 Bona fide introduction of gas into oil- or gas-bearing horizons in order to maintain or increase the ultimate recovery of oil from such horizons, or for the storage of gas. 311.5 The extraction of liquid hydrocarbons therefrom provided the gas is not wasted. 311.6 The artificial lifting of oil where all such gas injected into an oil well or wells in excess of 10,000 cubic feet per barrel of oil produced from such oil well or wells is used without waste. Rule 312. GAS-OIL RATIOS. Any oil well producing with a gas-oil ratio in excess of two thousand (2000) cubic feet of gas per barrel of oil produced shall be allowed to produce daily only that volume of gas obtained by multiplying its normal unpenalized daily oil allowable by two thousand (2000) cubic feet. The gas volume thus obtained shall be known as the daily gas limit of such well. The daily oil allowable of such well shall then be determined by dividing its daily gas limit) obtained as herein provided, by its producing gas-oil ratio in cubic feet per barrel of oil produced. Any gas well producing from the same pool in which oil wells are completed and producing shall be allowed to produce daily only that amount of gas which is the volumetric equivalent in reservoir displacement of the gas and oil produced from the - 13 - ~ " .J /"f . . " oil well in the pool which withdraws the maximum amount of gas in the production of its daily oil allowable. By the maximum amount of gas is meant the number of cubic feet of gas equivalent to the produce of the daily oil allowable of such well as calculated by the allocation formula for the pool, multiplied by two thousand (2000), plus a volume of gas in the reservoir equivalent to the daily volumetric oil withdrawal from such oil well. In converting the daily oil allowable from such oil well to its volumetric gas equivalent in the reservoir displacement, the average reservoir pressure and the average reservoir temperature of the pool shall be used. Where gas produced from an oil reservoir in a pool is returned to the same pool from which it was produced, only the volume of gas not returned to the pool shall be considered in applying the above rule. Rule 313. CENTRAL TANK BATrERIES. Common tankage may be used to receive the production from any number of wells, provided adequate tankage or other measuring equip- ment is installed so that the production for each well can be accurately determined at reasonable intervals. Rule 314. DISPOSAL OF BRINE OR SALT WATER AND OTHER WASTE MATERIALS. Salt water shall be disposed of, with the permission of the Commission, by: 314.1 Injection into the strata from which it was produced or to other strata capable of accepting it. 314.2 Dumping into the sea or tidewater. l 314.3 Disposed of in any other manner, approved by the Commission, which will not contaminat€ fresh water sources or endanger other natural resources. Rule 315. EQUITABLE DISTRIBUTION OF PRODUCTION. 315.1 Oil. Whenever the Commission limits the total amount of oil that may be produced from a pool, the production allowed to each such pool will be dis- tributed among the developed units in such a manner that each owner shall have the opportunity to produce or receive his just and equitable share. 315.2 Gas. Whenever the total amount of gas which a pool can produce exceeds the amount required to meet the needs for current consumption and storage, the Commission shall limit the total amount which such pool may produce by fixing a total pool allowable, and the allowable shall be distributed among the developed units in such a manner that each owner may have the opportunity to produce or receive his just and equitable share. Rule 316. ILLEGAL PRODUCTION. No purchaser, producer, operator, or any other person shall produce or transport any crude oil, natural gas, or waste oil from any developed unit or pool in Alaska except in accordance with the rules, regulations, and orders of the Commission. - 14 - . . REPORTS Rule 500. ADDITIONAL INFORMATION MAY BE REQJJESTED. These rules shall not be taken or construed to limit or restrict the authority of the Oil and Gas Conserva- tion Commission to require the furnishing of such additional reports, data or other information relative to production, transportation, storing, or handling of crude petroleum oil or natural gas in Alaska, as may appear to it to be necessary or desir- able, either generally or specifically, for the prevention of waste and the conser- vation of the natural resources of Alaska. Rule 501. BOOKS AND RECORDS TO BE KEPT TO SUBSTANTIATE REPORTS. All producers, transporters, storers and handlers of crude petroleum oil and natural gas within Alaska shall make and keep appropriate books and records for a period of not less than five (5) years covering their operations in Alaska from which they may be able to make and substantiate the reports required by this order. Rule 502. WRITTEN NOTICES, REQlJESTS, PERMITS AND REPORTS. The forms proposed to meet these requirements are as follows: Organization Report Application for Permit to Drill, Deepen or Plug Back - Form P-l Bond - Form P-2 Application for Multiple Completion and Instructions - Form P-3 Packer Setting Report - Form p-4 Packer Leakage Test - Form P-5 Potential Test and Request for Allowable - Oil Wells - Form p-6 Well Completion or Recompletion Report and Well Log - Form P-7 Well Status Report and Gas-Oil Ratio Tests - Form P-9 Plugging Record - Form P-15 Application to Dispose of Salt Water by Injection Into a Porous Formation - Form p-16 Operators Certificate of Compliance and Authorization to Transport Oil or Gas From Lease - Form P-17 Monthly Producers Report - Form p-18 Gas Well Open Flaw Potential Test (~-Point Test) - Form G-l Request for Gas Allowable - Form G- 3 Purchasers I Gas Nominations - Form G-6 Producers Report of Gas Production - Form G-7 Gas Purchasers' Monthly Report - Form G-8 Rule 503. MAILING LIST. An industry mailing list shall be maintained by the Commission for the purpose of sending appropriate notices and orders to persons in the industry who request to be put on such a list. - 15 -