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Home My WebLink AboutCO 039Conservation Order Cover Page XHVZE This page is required for administrative purposes in managing the scanning process. It marks the extent of scanning and identifies certain actions that have been taken. Please insure that it retains it's current location in this file. Conservation Order Category Identifier Organizing RESCAN [] Color items: [] Grayscale items: [] Poor Quality Originals: [] Other: NOTES: DIGITAL DATA [] Diskettes, No. [] Other, No/Type OVERSIZED (Scannable with large plo,.~l'/scanner) ~'~Maps: [] Other items OVERSIZED (Not suitable for plotter/scanner, may work with 'log' scanner) [] Logs of various kinds [] Other BY: ~MARIA Scanning Preparation Production Scanning Stage I PAGE COUNT FROM SCANNED DOCUMENT: I ''''~' PAGE COUNT MATCHES NUMBER IN SCANNING PREPARATION: YES NO Stage 2 IF NO IN STAGE 1, PAGE(S) DISCREPANCIES WERE FOUND: __ YES __ NO (SCANNING IS COMPLETE AT THIS POINT UNLESS SPECIAL ATTENTION IS REQUIRED ON AN INDIVIDUAL PAGE BASIS DUE TO QUALITY, GRAYSCALE OR COLOR IMAGES) General Notes or Comments about this Document: 5/21/03 ConservOrdCvrPg.wpd STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF MINES AND MINERALS ALASKA OIL AND GAS CONSERVATION COMMITTEE 3001 Porcupine Drive Anchorage, Alaska RE: THE APPLICATION OF THE PAN AMERICAN ) PETROLEUM CORPORATION, operator for ) itself, Phillips Petroleum Company, ) Sinclair Oil and Gas Company and Skelly ) Oil Company, for exceptions to Section ) 2061.1 of the Alaska Oil and Gas Conser- ) vation Regulations, Title 11, AAC ) Conservation Order #39 May 18, 1967 IT APPEARING THAT: 1. The Pan American Petroleum Corporation submitted a request dated April 19, 1967, for an exception to the 500 foot governmental quarter section boundary offset provision and the 1000 foot between wells to the same pool provision of Section 2061.1 of the Alaska Oil and Gas Con- servation Regulations, Title 11, AAC, for the completion of Granite Point A 18742 No. 4 less than 500 feet from the south line of Section 1, T10N- R12W, S.M. and less than 1000 feet from the top of the pay in Pan Amer- ican Petroleum Corporation's Granite Point A 18742 #3 well. 2. Notice of hearing on the request was published in the Anchorage Daily News on April 27, 1967, pursuant to Section 2012 of the Alaska Oil and Gas Conservation Regulations, but no protest or request for hearing was received. AND IT FURTHER APPEARING that after due consideration exceptions to Section 2061.1 of the Alaska Oil and Gas Conservation Regulations should be granted because there is no indication that significant recoverable hydrocarbons will be lost if the exceptions are granted, and correlative rights are not involved. NOW, THEREFORE, IT IS ORDERED that the Pan American Petro~ um Corporation be permitted to complete the development well Granite Point A 18742 No. 4 in productive intervals that may be located less than 25 feet from the south line and 925 feet from the east line of Section 1, T10N-R12W, S.M. DONE at Anchorage and Juneau, Alaska and dated May 18, 1967. Thomas R. Marshall, Jr., ExecuJ~ive Secretary Alaska Oil and Gas ConservatiOn Committee Concurrence: //~es A' Williams' Chairhan ...... Alaska Oil and Gas Conservation Committee x~/.,/~I _/ Dale Wallington, Mem~ Alaska Oil and Gas Conservation Committee Karl L. VonderAhe, Member Alaska Oil and Gas Conservation Committee ~ORM SA - I B $0M ~/67 MEMORANDUM TO: F Thomas R. Marshall, Jr.~ FROM: O. K. Gilbreth, Jr. ~ State of Alaska DIVISION OF MINES AND MINERALS DATE : May 9, 1967 SUBJECT: Conservation File t/39 Application of Pan American Petroleum Corp. for Spacing Exception, Granite Point Field, Pan American Petroleum Corp., Operator Pan American Petroleum Corporation has made application for exception to Section 2061.1 of the Rules and Regulations regarding minimum distance between wells. This case is advertised to be heard on May 15, 1967, if a protest is filed. I have analyzed the supporting data which Pan Am submitted and am of the opinion that there will be no loss of recoverable hydrocarbons if this permit is approved. Pan Ampresented a summary of a model study in which they used computers to calculate the pressure performance of the well located at its present point in the reservoir and at the original proposed location. Pan Am utilized actual data from this reservoir as follows: Average producing rate - 1500 BOPD Average permeability - 5 mds RVF 1.28 initially Fluid compressabtlity - 19 x 10-6 average Average pay thickness - 400 ft. Initial pressure - 4200 psi Viscosity - .4 cps Transmissability calculations utilizing these data showed that at the end of 10 years the average reserVOir pressure at the present location would be only 0.4 psi lower than it would have been at the proposed legal location. During this period of time 5,475,000 barrels of oil would be produced with an average pressure drop of 180 psi. Their analysis has been based on a solution drive mechanism and an infinite reservoir. They admit that this analysis is probably not valid for Granite Point, but point out that the method will give a reasonable determination of the expected performance at the two locations. I have examined their calculations and see nothing wrong in~he information or method utilized for the purpose intended. It should be point out, however, that the Granite Point reservoir is not an infinite reservoir and obviously is bounded by permeability barriers. The location of these barriers is not kmwn at this time. Since this is a bounded reservoir operating under a fluid expansion mechanism (in the absence of a water drive) all recovery down to the bubble point will be the result of expansion of the initial Thomas R. Marshall, Jr. - 2 - May 9, 1967 fluid in place. Utilizing Pan Am's data and assuming that one well will effectively drain 160 acres, the original oil in place would expel only 3,520,000 barrels to the abandonment pressure. This is only 66% of the volume which they show in the theoretical calculations with a 180 psi pressure drop. Thus it is evident that a quantative analysis is not completely valid. Even under this condition, however, the difference in reservoir pressure between actual location and the proposed location would be very mnall probably in the magnitude of 10 psi or less. With an indicated pressure difference of this magnitude, it is my opinion that approval of the location as now drilled will not seriously affect the Ultimate recovery from this lease or from this reservoir. There are many factors which affect well spacing besides the distance be- tween wells. If an operator drills on a wide spacing the investment per well is high, and the rate of returnli..~.per well is low. If he drills wells on the correct spacing, the investment per well will be moderate, the income per well will be moderate, and the net profit per well will be at a maximum. If, however, he drills too many wells on a close spacing the investment per well will be low, bu~the operating income per well will be even lower and the net profit will Be low. Thus the correct well spacing lies somewhere between too few and too many wells in a reservoir. The optimum spacing is determined by both reservoir characteristics and economic considerations. Many factors enter into the determination of the correct spacing and distances ~'.~.between wells. Some of these factors are operating costs, development costs, value of money, rate of production, fluid com- pressability, pay thickness, permeability, continunity of reservoir, connate water saturation, oil viscosity, recovery mechanism~ reservoir volume factor, bottom hole pressure, and other fluid and reservoir characteristics. Spacing authorities agree that there are approximtely 30 separate factors that can affect the spacing in an oil reservoir. Since the Granite Point reservoir is in the early stages of development, most of the factors which will affect spacing are unknown. A rigorous quantative analysis cannot be made at this time, although sufficient data are available to permit a comparative analysis. It appears to me that the comparative analysis made by Pan Am is valid and gives a reasonable approximation of the effect to be expected if their application is approved. Since approval will not result in a significant loss of recoverable hydrocarbons and it would cost approximately $300,000 to redrill to complete in the original location, it is my recommendation that this application be approved without hearing. OKG/cw NOTICE OF FUBLIC HEAl{lNG STAT. E OF ALASKA DEPARTIV[ENT OF NATURAL RESOURCES DIVISION OF MINES AND MINERALS Alaska Oil and Conservation Committee 1LE: Pan American Petroleum Corpo- ration -- Granite "Pdlat A15742 No. 4 Granite Point "A' Platform, Leg. 4 Productive interval coordi- nates less than 500' FSL & 925' FEL, Sec. 1, T10N-R12W, S.M. Conservation File 39 Notice is hereby given that Pan American Petroleum Corporation has requested the Alaska Oil and Gas Conservation Committee to issue an ordee exemptin~ .the c.aptioned well /rom ~he /o0tage spacing requirements of AAC, Title 11, Section 2061.1 at e.,,' proposed producing hor3zon. The l~cing irit?rval in this well lies ab'0tlt'l., 900. Iee~ more or les~ from the lOr~t~.i~ interval of Granite Point A l~4~...._No. 3. Parties who may be agg//'~i ii the requested order is issue~l.'f~,~., allowed ten days from the date ,o~'..'this publication in'which to file a pr0~est an,al'request /or hearing. Place oI filing is 3001 Porcupine Drive, AnchOrage, Alaska. Ii such a protest is tim,ely filed,, a heari .rig oh'.the mat. ter will be' held .at the above'~.address at 10 a.m., HaY 15, 1967, at. which time' protes.tallts and. Others may be heard. Ii .nO .such l'protest .'is timely filed, the Committee'.'i will c01isider the lssuar~.ce of the orde]~',without .a..hearing. (s) Thomas R,' Marshall,.Jr. . ExecutiVe secretary ' ii..' . Alaska 0il and. Gas C0flservation Committee 3001 porcupine ~nchorage, Alaska 99504' l~blh.h April 27,:', 1967" . .. RECF!V :r) Proof of Publication I,iAY ~ 1967 DJ¥I$ION O1: MINES & MINEI[AL~ ANCHORAGE DALLY TIMES ANCHORAGE ........ i ......................................... JOSEP-H.--P.-,-...KO~,~LF, R .......................... being duly sworn, according to law declares' That he is the ....... ._A.._D._V._~.T..~.~..!..N..¢...I)..I.r.....F...C..T..0..~. .................... o~ The ^nchorage Daily Times, a daily newspaper published in the town of Anchorage, in the Third Judicial Divi- sion, State of Alaska; that the notice of ....... t~.UBLIC...IiEi~P,I~(I~ .... t?LN.../~.iEt~IC.,q~ ............ PETROLEU~ C01~P,., ,, . a copy of which is hereto attached, was published ...................................................................................... .......................................................... Ap~il...27t..1967 .......................................................................... in said Anchorage Daily Times, beginning with the issue of ............... ~1~.J,1..2~. ....... 19.~.7. ...... and ending with the issue of ................... ~T~.~I.~...~ .............. 196~. ....... .... No~'ry Publi~ for the'State o~ Alaska. My Commission Expires ......... .~../29...., ~,~.~67.. NOTICE OF PUBLIC HEARING STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF MINES Ah~ MINERALS Alaska Oil and Gas Conservation Committee RE: Pan American Petroleum Corporation - Granite Point A18742 #4' Granite Point "A"Platform, Leg 4 Productive interval coordi- nates less than 500' FSL & 925' FEL, Sec. 1, T10N-R12W, S.M. Conservation File 39 Notice is hereby given that Pan American Petroleum Corporation has requested the Alaska Oil and Gas Conservation Committee to issue an order exempting the captioned well from the footage spacing requirements of AAC, Title 11, Section 2061.,t at the proposed producing horizon. The producing interval in this well lies about 900 feet more or less from the producing interval of Granite Point A 18742 4/3. Parties who may be aggrieved if the requested order is issued are allowed ten days from the date of this pub- lication in which to file a protest and request for hearing. Place of filing is 3001 Porcupine Drive, Anchorage, Alaska. If such a protest is timely filed, a hearing on the matter will be held at the above address at 10 a.m., May 15, 1967, at which time protestants and others may be heard. If no such protest is timely filed, the Committee will consider the issuance of the order without a hearing. Publish April 27, 1967 Thomas R. Marshall, Jr. Executive Secretary Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99504 PAN AMERICAN PETROLEUM CO1LOO ATION Anchorage, Alaska April 19, 1967 File~ AMR-896-986o511 Re~ Application for an Order Permitting a Location Exception To Rule 2061ol for Granite Point A 187~2 Well Noo 4 Mro Thomas Ro Marshall, Jro (2) State Petroleum Supervisor Division of 'Mines and Minerals 3001 Porcupine Drive Anchorage, Alaska 99501 Dear Sir~ Pan American Petroleum Corporation on behalf of itself, Phillips Petroleum Company, Sinclair Oil & Gas Company, and Skelly Oil Company, hereby applies for an exception to Rule 2061ol of the Oil and Gas Conservation Regulations which will permit the completion of Granite Point A 18742 Well Noo 4 at a subsurface location not less than 25 feet from the south line and 925 feet from the east line of the quarter section upon which it is located and about 900 feet more or less from the subsurface location at which Granite Point A 18742 Well Noo 3 is now being completed for production° In support of its Application, Pan American Petroleum Corporation states: Granite Point A 18742 Well No° 3 has been directionally 'drilled from the fixed platform, known as the Granite Point A platform, located in the NE/4 of NE/4, Section 12~ Township 10 North, Range 12 West, S.Mo The well encountered formations productive of oil in the NE/4 of Section 12, Township 10 North, Range 12 West, SoM0 and it is now being completed for production° Because of its location on structure, no unusual difficulty was encountered in drilling this well or in controlling the degree and direction of its deviation° All parts of the well bore which encountered productive formations are located more than 500 feet from the. outer boundaries of the quarter section upon which the well is located° Granite Point A 18742 Well No° 4 is now drilling from the same platform° It was intended to complete this well in the SE/4 SE/4 of Section 1, Township 10 North~ Range 12 West, Sa Mo, as the permitted well for this quarter section° The well was intentionally deviated from the vertical to permit it to be completed on this quarter section~ Due primarily to the location of the well bore on the structure, more difficulty was encountered both in the drilling of the well and in the controlling of the direction and degree of deviation than was anticipated° The well has already encountered the first productive i,,~ ..... , ....... :~, ~F- i,~,~,.~ .ANCHORAGE Mro Thomas Ro Marshall, Jr0 April 19, 1967 Page 2 formations at a location which is nearer than 500 feet to the south boundary of the quarter section upon which it is drilled and which is also approximately 900 feet from the point at which Well Noo 3 is being completed in the same formation° Drilling is still in progress on this well and the Operator is continuing to attempt to control deviation so that the distance of the well bore from the quarter section line and from Well No0 3 on the quarter section to the south will be progressively greater with depth° However, it may be impossible to bottom Well Noo 4 more than 500 feet from the south boundary of the quarter section upon which the well is completed or more than 1,000 feet from the equivalent interval in Well No~ 3~ It is impossible to take any corrective measures to cause the well bore of Well Noo 4 to encounter the first of the producing formations at a location 500 feet or more from the south boundaz~ of the quarter section upon which it is located and 1'000 feet or more from Well No~ 3. If this exception is not granted it will be necessary to abandon the well almost in its entirety and to attempt to drill a substitute well to a location which will comply with Rule 2061olo This would result in the drilling of an unnecessary well, at a cost in excess of $1,000,000~00~ It would not result in any increased recovery of oil from any of the pools in which the. well may be completed nor will it accomplish any useful conservation purpose° If Well No~ 4 is permitted to be completed and produced it will as efficiently and economically produce the oil from the quarter section upon which it is located as would a well at a location which will comply with Rule 2061olo Attached hereto as Exhibit "B" is a series of calculations showing that pressure distribution in the reservoir will not be altered to any significant degree if this application is granted° Both Well Noo 3 and Well Noo 4 are completed upon a lease owned by those persons on whose behalf this Application for an Exception is filed. All of the quarter sections offsetting the quarter section upon which Well No° 3 and the quarter section upon which Well No° ~ are located are under lease to the persons on whose behalf this Application for an .Exception is filed° Ail of the royalty in all tracts is owned by the' State of Alaska. The granting of the Exception cannot adversely affect the correlative rights of any person° There is attached hereto as Exhibit "A" a plat drawn to a scale of not smaller than 1" equals 2,640 feet, accurately showing to scale Lease ADL 18742, the property for which the Exception is sought, and accurately showing to scale all other completed and drilling wells on Lease ADL 18'742 and accurately showing to Scale all adjoining surrounding properties and wells. The lessees of all tracts within one (1) mile of the location at which Well No° ~ will be completed, other than those persons on whose behalf this ApplicatiOn for an Exception is filed, are Mobil Oil Corporation and Union Oil Company of California, the lessees of Lease ADL 18761, which covers all of Sections 2 and 11 of Township 10 North, Range 12 West, So M., immediately to the west of Lease ADL 18742° Notice of the filing of this Application should be given by registered mail to these lessees, under the provisions Mr. Thomas R. Marshall, Jr. April 19, 1967 Page -3 of Rule 2061.4. If no objection to the granting of this Exception is received within the 10-day period provided for by Rule 2061.~4, we request that this Application be granted without a hearing. If protest is 'received, we request that the matter be set for hearing. Yours very truly, Mr0 Thomas R0 Marshall, Jr° April 19, 1967 page q UNITED STATES OF AMERICA ) ) ss STATE OF ALASKA ) F0 K~ KREBILL, being first duly swo~n, upon oath deposes and states: That he is Anchorage Area Superintendent for Pan American Petroleum Corporation, that the above and foregoing application and the exhibits attached thereto have been p~epared by him or under his supervision, that he is acquainted with the facts~ and that the facts therein stated are' within his knowledge true and that the accompanying plat is accurately drawn to scale and cor~ctly reflects pertinent and required data~ Fo Ko Kmebili Subscribed and swo~n to before me this _j~ day of April, 19670 the ~C~Ce oE My Commission expires ,, b .Oc~.9ber 25,,~,,,,, ,,,,,, ,1967, ~ ,,,,, o Attachments cci James Aa Williams, Director Division of Mines and Minerals Pouch M Juneau, Alaska 99801 cc: Attached Mailing List MAILING LIST Mro Cs Lo Cox Sinclair Oil g Gas Company 501 Lincoln Tower Building Denver, Colorado 80203 Mr~ Wo~ TMo Whitmore Skelly Oil Company PA O o Box 1650 Tulsa ., Oklahoma 7gi02 Mr~ Ho W0 Patterson Phillips Petroleum Company 1300 Security Life Building Denver, Colorado 80202 Mr~ T~ Jo Files Pan American Petroleum Corporation Security Life Building Denver, Colorado 80202 Mr~ A~ Eo Piper Pan American Petroleum Corporation Security Life Building Denver, Colorado 80202 Mro Fo Ko Krebill Pan American Petroleum Comporation Po Oo Box 779 Anchorage ~ Alaska 99501 Mro Eben H0 Lewis 921 6th Avenue Anchorage~ Alaska 99501 Mr., W4 T..~ Smith Pan American Petroleum Corporation Security Life Building Denver., Colorado 80202 Mr° Co W~ Corbett Phillips Petroleum Company 1230 Security Life Building Denver, Colorado 80202 Mr° Fo Ho Rhees Sinclair Oil and Gas Company 501. Lincoln Tower Building Denver, Colorado 80203 Mr~ C~ Lo Blacksher Skelly 0il Company P~ Oo Box 1650 Tulsa~ Oklahoma 7~102 EXHIBIT B PRESSURE DISTRIBUTION LEASE 18742 GRANITE POINT ion When fluid is withdrawn at any point in a ~esePvoir, an a~ea of loweP pPessuPe is established aPound the well0 With time, this a~ea grows in size, and the amount of pPeSSUre drop around each well increases° our purpose here is to compare the theoretical pressur~ distribution resulting from the drilling of Lease 18742 with Well Noo 4 at its actual bottom hole location, with the distribution which would Pesult if Well No0 4 had been bottomed at the originally intended location. In cylindPical coordinates, The diffePenTial equation fop the nonsteady state of flow of a single-phase, .compressible liquid is: For the boundary conditions, P - p~, .~ bSo P-----> Px, ~ r~--> A solution to this equation is: : -- z~ ~ h k ~? k t; (See Lincoln Fo Elkins, API Drilling and Production P~actice.s., 19~§, po 124) This is called the "poin-~""s°'u~ce;'~i~s~lU~i°n° The term"Ei re'f~s to the exponential integral function, defined as: d-'P -2 - In engineering units, this equation will be dimensionless if: q is in BOPD M is in cps h is in ft k is in perms (1.127 x darcies) r is in ft Cf is in 1/psi 6 is a decimal fraction Bo is in any consistent units For multiple-well networks, the total pressure drop at any point is equal to the sum of the drops due to each well, provided that t is taken as the time on production for each well. This is the method of super position. Calculation P~ocedure , - ~. ~--.~ - ~ ~ _ - ~. , ......... A model reservoir consisting of Sections 1 and 12, 10N, 12W, and Sections 6 and 7, iON, llW was analyzed using the above equation. Two cases were run. In each case, a total of six wells were drilled in the area studied. In the firs~ case, Well 187q2-~ was assumed to be completed at the originally proposed location, but in the second case it was assumed to be at the actual location° Otherwise, locations and estimated. completion dates were identical for the two cases° Table 1 lists the location and estimated completion dates, as well as the estimated values of the reservoir properties used° For each case, the reservoir pressure at q00 points within the model were then calculated as discussed above for each of 8 different time intervals° An IBM System 360 computer was Used for this calculation° For values below the exponential integral function was approximated as: Ei(-x) '- Ln(x) +0°57722 where 0°57722 is Euler's constant° For values above 10, the approximation El(x) -- e x was used, and for intermediate values, a table look-up and interpolation routine was used° Otherwise the calculations were ordinary. At the end of each time step, the average pressure in the model area, and the average boundary pressure, were found, and a pressure distribution map printed° This procedure, assumes an infinite rese. rvoir, which is probably not valid ' ' for Granite Point ~nasmuch as water influx Ks not expected to provide a signi- ficant .soUrce of reservoir energy° Thus, the actual pressure .drops for both . ~,, cases are expected to he greater than those calculated for an mnfinite reservo~ro The calculation method will, however, give a reasonable estimate of the differences in pressure distribution between the~ two cases° --'---------- - 3 - Results and Conclusions Table 2 tabulates the average reservoir pressures and average boundary pressures calculated for each case° Also attached are line-printer "maps" showing, the pressure distribution for each case and each time interval° (The "y" dimension has been tabulated in reverse order° Thus the line-printer "maps" have the N-S direction reversed° ) It is apparent both from Table 2 and from the maps that moving Well 18742- 4 on the order of a few hundred feet in any direction has negligible effect on the resulting pressure distribution° TABLE DATE USED IN MODEL STUDY Well Data Case I - 18742-4 at originally intended location Well X co-ord0 Y co-ordo Start_ pf Prod° - Day_s. 18742-3 3,250 4,600 18742-4 4,500 5,950 A (future) 1,670 660 B (Future) 3,100 1,980 C (future) 5,900 7,300 D (future) 5,900 10,000 0 3O 105 135 240 255 Case I 18742-~ at actual location (As above - except) 18742-4 3,986 5 30 (0,0) co-ordinate point is SW corner Section 12, TiON-R12W. Reservoir Data Tran smissahility coefficient 1500 x 0°4 x 1028 4~k 49'x 400 x ~005' x 1o127 Diffusivity coefficient ~k .... ~-:'x ~005 x 1~127 = 270114 (psi) = 46°1q x 10'6 Initial Reservoir Pressure = 4,200 psi TABLE 2 COMPARISON OF RESULTS Days After Average. _Reservoir p~essur~ Start of Production Case 1 Case 2 0 4,200o00 4,200°00 30 (1 month) 4,199o52 4,199o52 90 ( 3 months) 4,197o62 4,197o62 180 (6 months) 4,193o02 4,193.02 365 (1 year) 4,179o33 4,179o 34 730 (2 years) 4,152.40 4,152°45 1,460 (4 years) 4,108o37 4,108o52 2,920 (8 years) 4,044o42 4,044o69 3,650 (10 years) 4,019o 82 4,020o13 ,Av..er~age Boun,dary ?res, s,,ure Case 1 Case 2 4~200o00 4,200o00 4,200, O0 4,200o00 4,200.00 4,200°00 4,198o63 4,198o63 4,192o54 '4,192o 50 4,179o 02 4,178o 89 4,152o44 4,152o21 4,105o51 4,105~35 4,085°70 4,085o45 Case 1 ~ 18742 #4 at.original location Case 2 - 18742 #4 at actual location