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Home My WebLink AboutCO 069Conservation 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 plotted~sca~mer) ~."~' Maps: [] Other items OVERSIZED (Not suitable for plotter/scanner, may work with 'log' ~-'"~ogs of various kinds [] Other BY: .~ MARIA Scanning Preparation Production Scanning Stage I PAGE COUNT FROM SCANNED DOCUMENT: 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 OIL AND GAS Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99504 Re: THE APPLICATION OF TEXACO INC. for an ) order permitting the commingling of pro- ) duction in the well bore of the Trading ) Bay ADL 17597 well TS No. 1 located in the ) SE¼, Section 27, TION, R13W, S.M., and the ) motion of the Oil and Gas Conservation ) Committee to establish field rules for the ) pool or pools underlying the referenced ) well and hear testimony on the expansion ) of the area of the existing field rules ) for the Trading Bay Field as set out in ) Conservation Order No. 57. ) Conservation Order No. 69 Trading Bay Fi eld Trading Bay Hemlock Oil Pool Trading Bay Middle Kenai Oi 1 Pools Trading Bay Middle Kenai Gas Pool s Trading Bay Hemlock NE Oi 1 Pool Trading Bay "G" NE Oil Pool January 24, 1969 IT APPEARING THAT: 1. Texaco Inc. submitted a petition dated November 12, 1968, requesting the referenced exceptions to Section 2154 of the Alaska Oil and Gas Conser- vation Regulations. 2. The Oil and Gas Conservation Committee on its own motion desired to hear testimony on field rules. 3. Notice of the hearing was published in the Anchorage Daily News on December 21, 1968. 4. A publiC hearing was held in the City Council Chambers of the Z. J. Loussac Library on January 23, 1969. Testimony in support of the petition was presented by Texaco Inc. and Atlantic Richfield Company. Testimony was also heard on proposed field rules. AND IT FURTHER APPEARING THAT the Trading Bay Field should include the pool or pools underlying the referenced well. AND IT FURTHER APPEARING THAT the reservoir characteristics of the Trading Bay Hemlock NE Oil Pool and the Trading Bay "G" NE Oil Pool as hereinafter defined penetrated in the subject well are very similar in gravity, gas-oil ratio, and formation pressure and that commingling of the production in the well bore from these pools will result in no loss in ultimate recovery. CONSERVATION ORDER NO. 69 Page 2 January 24, 1969 AND IT FURTHER APPEARING THAT substantial variations in permeability and the presence of faulting justify closer well spacing to lessen chances that the less permeable areas on separate fault blocks would remain relatively undrained and that closer spacing will provide greater flexibility in planning and operation of planned pressure maintenance or secondary recovery operations. AND IT FURTHER APPEARING THAT reservoir data presented at the hearing are adequate to determine that an exception to the acreage spacing requirements of Section 2061(b) of the Alaska Oil and Gas Conservation Regulations is necessary for the area hereinafter described. AND IT FURTHER APPEARING THAT insufficient testimony was presented to warrant a change in the statewide rule requiring 1,O00 feet between oil wells and the statewide rule requiring 640 acres per gas well. AND IT FURTHER APPEARING THAT insufficient testimony was presented to warrant a testing exception to Section 2159 of the Oil and Gas Conservation Regu 1 ations. AND IT FURTHER APPEARING THAT sufficient data were presented to warrant expansion of the area covered by Conservation Order No. 57 into part of the area. NOW, THEREFORE, IT IS ORDERED that the area described as follows is affected by this order: TION, R13W, S.M. Section 22: SE¼ Section 23: All Section 26: All Section 27: E½ Section 34: E½, NW¼ Section 35: All NOW, THEREFORE, IT IS ORDERED that the following special rules apply to the affected area: Rule 1. Definition and ~..ami.n~ of Pools. (a) The Trading Bay Hemlock. NE Oil Pool is defined as the accumu- lation of oil common to and which correlates with the 10,275, to lO,635-foot interval in the Texaco-Superior TS No. 1 well. CONSERVATION ORDER NO. 69 Page 3 January 24, 1969 (b) The Trading Bay "G" NE Oil Pool is defined as the accumulation of oil common to and which correlates with the interval 10,073 feet to 10,250 feet in the Texaco-Superior TS No. 1 well. (c) The area covered by Conservation Order No. 57 is hereby expanded to include the N½ of Section 34 and the E½ of Section 27, both in TION, R13W, S.M. Rule 2. Commingling. Commingling in the well bore of the Trading Bay "G" NE Oil Pool and the Trading Bay Hemlock NE Oil Pool is permitted. Rule 3. Spacing Acreage. In the Trading Bay Hemlock NE Oil Pool and the Trading Bay "G" NE Oil Pool a total of not more than two completed oil wells shall be allowed on any governmental quarter section or governmental lot corresponding thereto. Rule 4. Casing and Cementin.9. Requirements. (a) Surface casing will be landed at not less than 1,O00 feet and cement will be circulated to the sea floor. Casing and control equipment will be hydrostatically tested to not less than 1,O00 pounds per square inch' pressure before drilling the shoe. (b) Production casing will be landed through the completion zone and cement will cover and extend to at least 500 feet above each potentially productive sand interval. The use of multi-stage cementing procedures will be permitted. Alternatively, a casing string may be adequately cemented at ~n intermediate point and a liner landed through the completion zone. If a liner is run, the annular space behind the liner will be filled with cement to at least lO0 feet above the casing shoe or the top of the liner shall be squeezed with sufficient cement to provide at least lO0 feet of cement between the liner and casing annulus. Cement must cover all potentially productive intervals behind the liner. Casing and well head equipment will be hydrostatically tested to not less than 1,500 pounds per square inch pressure. Rule 5. Bottom Hole Pressure Surveys. A key well bottom hole pressure survey shall be made in the Trading Bay Hemlock NE Oil Pool and the Trading Bay "G" NE Oil Pool upon committee request provided, however., such surveys shall not be required more often than twice in any calendar year. The time and length of survey, number and locations of wells, datum and other details will be determined by the Committee upon consultation wi th the operators. CONSERVATION ORDER NO. 69 Page 4 January 24, 1969 DONE at Anchorage, College, and Juneau, Alaska, and dated January 24, 1969. Thomas R. Marshall, Jr., Executive Secretary Alaska Oil and Gas Conservation Committee Concurrence: //~Jam~s A. Wi 11 i ams, Chairman ka Oil and Gas Conservation Committee Bale ~a] ]ing~on, A~aska 0~] and ~as 6~nse~va~on Committee Karl L'. VonderAhe, Member Alaska Oil and Gas Conservation Committee ~YkaW~,i ~~a~n~riaMse~boensre'~tion Committee HEARING BY THE OIL AND GAS CONSERVATION COMMITTEE ON A REQUEST BY TEXACO INC. TO INSTITUTE PROPER FIELD RULES ON POOL OR POOLS UNDER- LYING TEXACO INC. OPERATED TS #1 WELL Conservation File No. 69 Hearing held in the Council Chambers, Z. J. Loussac Library, January 23, 1969 9-30 a.m. · I ..... ., ,.~,, ~,,,,i,~ ~ '~iv of '~.[ & Marls from Petroleum j , ',~t~i,a,i;o~ inc. wilh ~ unci~"~tendir~eti',et it mey be rep4'oduce, d for Inter-company us~4a only. 10 11 12 14 15 16 17 18 19 2O 21 22 23 24 25 PROCEEDINGS MR. MARSHALL: Good morning, gentlemen. It's 9:30 and we're 'ready to commence a public hearing on Conservation File No. 69. At this time I'd like to int=oduce the'~members and advisors of the Alaska Oil' and Gas Conservati'on Committee. To my left is EasY Gilbreth] also known as "OK" Gilbreth, petro- leum~ engineer, chief petroleum engineer with the Division of Oil and Gas, a Committee member designated by Dale Wallington, the Deputy Commissioner, in his absence. Homer Burrell,~ Director of the Divison of Oil and Gas', who will, pending approval of regulations this afternoon, be Chairman of our Oil and Gas' C°nservation~Co~i't'tee. Mr,"'Jim RhOd~s'"~'a'' legal adVisOr from t~e Department of Law. Karl Vonder Ahe, petroleum engineer, member of the Committee. And Harry Kugler who will be Acting Executive Secretary for the Committe~,and a Committee member. I forgot myself, Tom Marshall, Chief petroleum geologist for the Division of Oil and Gas. I will be acting as Committee Chairman today. I'll ask all of you, including members of the public audience, to sign the guest register in the rear ..of the room. In case you haven't done this, we will probably have a rest break at about 10:30, if your proceedings continue that long, at which time we'll give you an opportunity to sign it if you have not already done so. For the sake of the people moving the Motion today we & R COURT RE:PORT;'R\S WEST EIGHTH AVENUE ~' SUITE 277-47 ! :3 10 11 13 14 1§ 16 17 18 19 2O 21 'will ask for a~summary of'the qualification sof your expert witnesses, and we will pass on those qualifications as a commit- tee. I would like to'read a telegram received from the Superior Oil Company at this time. It's direc'ted to the Alaska Oil and Gas Conservation Committee, attention, Thomas-R. Marshall, Jr., Executive Secretary, and dated January 22',.~ 1969. (Reading) "Reference is made to that Notice of 'Public Hearing published December 21, 1968, Trading Bay Field, Conservation File NO. 69, on the application of Texaco, Incorporated, for an Order permit- ting coming!lng 'of production in the Trading Bay ADL 17597'Well '~%TS'%'~'~. i"; .......... ~n'd'~"~'h~'~'M~'~i~"~'~6'f"'"'tHe Oil an'Gas Conservation Committee to establish field rules' for the Trading Bay area. The Superior Oil Company hearby waives non,compliance with Chapter 62, .'.~laska Statutes, Administrative Procedures Act, 'in the notice and the conduct of the hearings scheduled for 9:30 A. M., January 23, 1969',' signed by R. T. Robertson, Attorne~y, Houston, Texas. At this time~I would like to ask if all .interested-and affected parties to. this .hearing waive -- so waive this simflar .. non-complianCe with Chapter 62 of the Alaska Statutes in regard to the notice and conduct of this hearing. And spedi£ical!y this is the fine points -- I'm speaking not as a lawyer now but. it~_ compliance with the Alaska Admini~.trative Procedures Act of which there is some question whether or not we should' be & R COURT REPORTERS WEST EIGHTH AVENUE -- SUITE 'ti 277-47I~ ANCHOI~AGE. ALASKA 1 5 ? 10 11 out our transcript? 19. .... ' ............. "MR. - I~ILLEY: 14 15 17 18 19 9.0 9.1 holding this hearing with .those set of rules. I would like to ask.at this time' if all parties do waive this possible non- comp liance ? MR. LILLEY' Texaco waives non-compliance. MR. NORGAARD: Atlantic-Richfield waives non-compliance. MR. SELINGER: Skelly waives too. MR. MARSHALL: I would li~ke to for the record state that we'd 'liRe each person who is making any stateme'nt~' to proceed with their name and company affiliation. I wonder is we .could review that for. the poor girls that are going to have to figure I'm AlIeh' L'~I'leY' Wi'th:Texacol. .MR. NORGAARD: PauI Norgaard With Atlantic-RichfieId ~ Atlantic-Richfield .waives compliance. MR. MARSHALL: Texaco waives compliance,, yes, fine, .fine MR. SELINGER: Skelly, and we waive. MR. ANDERSON: George W. Selinger. S-E-L-i-N-G-E-R. -. Robert T. Anderson of Union Oil Company. UniOn Oil as operator of the Trading 'Bay Field. for 'Union, Marathon, TeXaco and 'Superior waives non-compliance. Union Oil Company as operator of the Trading Bay unit h0weg~er, mus'6'"'remain mute,~ ~ because we didn't have sufficient time to Po'll the nnit. However, with the majority in interest owners of the unit represented by Marathon, Union and Atlantic, I think that this. will· comply with your -- the work. R & R COURT R~'PORT~'R~ Z77-471:~ Div. of:M & Marls ,~,~,~ t undm~dl.g ~ it .~y be m~x~uc~ h. I.~p, ny u~ e~./I j ANCHORAGE, ALASKA 10 11 12 15 16 17 18 19 20 21 22 2B 24 MR. MARSHALL: Thank you, Bob Anderson. MR. LOWMAN: Maurice Lowman, District Land Man, Marathon Oil Company, waives the non-compliance with the statute, Section 62.044 of the Administrative Act. MR. MARSHALL: Thank you, Mr. Lowman..Jim, I'd like to ask you in my non-professional handling of this legal matter, do you concur that this has 'been properly handled now? MR. RHODES: Well, I think so, 'the 'point being t, hat the parties were technically-- I think, if the APA applies, .they're entitled to thirty days' notice, but since they're here, they show that they have actual notice of it.so I don.'t think that MR. MARSHALL. Thank ~you very much. we will proceed by having our Acting Executive Secretary Harry Kugler recapitul~te the application and publication of this particular Conservation Orde~r file. MR, KUGLER: Texaco, Incorporated, in a letter dated November 12, 1968, applied for an Order permitting the com~/~iqglLn of production in the Trading' Bay Well TS No. 1. Emergency orders were issued on November 18, 1968, and December 9, 1968, permit- ting the comm~.~gling of production to provide data fdr this hearing. On December 21,. 1968, a Notice of Public· Hearing was published in the Anchorage Daily News and· subsequently mailed to' all people 6n the Division of Oil and Gas mailing list. This notice stated Texaco's application and thru 10 1I 12 13 14 15 16 17 18 lg 2O 21 22 Motion of the Oil and Gas Conservation Committee to establi-~h' field rules for the development of the pools. Testimony will be heard on the application of Texaco and on the following matters. Expansion or contraction of the 'area of existing field rules, for the Trading Bay Field as set out in Conservat~ion · Order No. 57. 'Two, the establishment of another field, if necessary. Three, establishment of area to be covered by the field rules. Four, establishment of pools. Five, adoption of rules governing casing and cementing practices. Six, adoption · of rules governing the reservoir' pressure surveys.. S~even, adoption, of rules governing well spacing; and eight, any other matters r'ele. V~n'~"'tO'~ the'development, and'.-oper,ation 'o.f ~'th~ . MR. MARSHALL: Thank yo~, Harry. Mr. Li!Iey, w0uid '/. you proceed to qualify your witnesses and present testimony? MRo LILLEY: Yes. As .,to myself, 'I'm Allen Lilley, Division Reservoir Engineer for'.Texaco in their Los Angeles Division. As to my qualifications, I was graduated by'the University of Oklahoma in June of 1952 with a Bachelor of Science Degree in Petroleum Engineering. In that same month I s,t.a~ted~*~'~ work for Texaco's Producing Department in their Los Angel'es Division. During the past Six and a half years I've held various positions in our Producing Department as a petroleum engineer, 'dealing primarily, with onshore and offshore operations in Cali- fornia. During the majority Of this time I have been involved in reservoir engineering problems. I have been ~in my current & R COURT RI~PORT~'R~ WI[ST E;IGHTH AVi[NUE~ -- ~UIT~ ~ 277-4713 1 'position as Division Reservoir Engineer for slightly over two 2 years, during which time I have been involved' in our Cook Inlet ~ 'operations. I am registered in the ,State of California as a 4 ~profession petroleum engineer. 5 MR.. MARSHALL: Hearing no objections 'f~om the Committee 6 we will accept your qualifications. ? MR. CARROL>.,~- I am Neil Carrol'~.,,. geologist for Texaco, 8 Incorporated. I received my ~achelor of Science Degree from the 9 University of washington in-1957. I' also h01d ,a Master of Scienc · 10 Degree frnm the University of Washington conferred in 1959. I 11 was. employed as a geologist by Texaco in'July' of 1959. My' work experienCe"~"~this' totals~ ',approximately ~ nine, 'and a ,half years ..~ have worked in'T.~,xaco's ~laska 'District for ~four and:a half years 14 My main area of responsibility during this period has been' in .. 15 the Cobk Inlet Basin. I have worked on the Trading Bay Field 16 area extensively for the last two and half years. I 'am a member 17 of the American Association of Petroleum Geologists -and the 18 Geological Soc.iety of America. 19 MR. MARSHALL: Hearing no objections from the Committee 20 we will accept your qnalifications. 21 MR. NORGAARD: I'm Paul Norgaard of Atlantic-Richfield, 2~ and-I graduated from Stanford in 1955 with a B. S,. in Petroleum ~ Engineering. I'started my career with Richfield in 1955 and ~'~ have held a series of. positions .in Operations and Reservoir ~5 Engineering, and my curren~position has been in Alaska since last R & R COURT REPORTERS ~ WE~T EIGHTH AVENUE -- SUITE 277-471:~ ,,~i~w Div. of'M & Marls ,~P,~m.m I ANCHORAGE;.ALASKA with the undee'~ltendt~g thet It mey be re~oduced fc~ Inter,or, party use oely[ t .. 10 11 13 1'4 15 16 18 19 2O 21 9.2 23 25 'Febrdary as a Senior Petroleum Engineer, and I am a registered petrol.eum engineer in the State of California.. ....... MR, MARSHALL: Hearing no objections ffrom the Committee we will accept your qualifications. Thank you. Are ~ou pre"- pared with your testimony now, Mr. Lilley? MR. LILLEY: Yes. MR. MARSHALL: I believe we'll swear the witnesses separately before his testimony ms each one testifies. Okay. We'll go ahead~and ·start, star, t in MR. LILLEY: with our 'testimony. ALLEN LILLEY ' 'after'~haV'ing been duly sworn, testi'fied" as follOWs reading from a printed statement which is attached to the proceedings. After readin the first page of the statement, Mr.' Neil Carrel'~ pro- ceeded to give geological testimony after being first duly sworn, testified as follows.' reading from-a prepared statement · which is attached to these proceedings. MR. MARSHALL: I Would like tO ask for a five-minute break at this time so our Committee-members can take a .look at the exhibits first-hand. (At 9:50 a.m. proceedings Were recessed for five minutes. (ON T~E ~ECO~) MR. MARSHALL: We're back on the record now and for the sake of, ~he record~we 'will accept your Exhibits 1, 2, and 3 as' · official exhibits. Ail right, proceed with your engineering & r C:0UIRT REPORTERS" WEST EIGHTH AVENUE ~ SUITE S 277-471:3 ANC~HORAGE, ALASKA 10 11 15 17 18 21 23¸ ~estimony. (Mr~ Lilley resumes testifying from page 2 of his written testimony appended to the proceedings.)' MR. MARSHALL: I'-11 say for the record that ~e will accept Exhibit No. 4 and Exhibit No. 5 as official exhibits. Does this conclude your testimony? MR. LILLEY: On commingling, yes.. MR. ¥~ARSHALL: On commingling. At this time I would like to ask members of the Committee to' ask their questions on, first, the gological aspect of'the presentation. Harry, do you h,ave any? MR.GILBRETH: Mr. Chairman, may I 'interrupt? I'd like to ask if Texado~:has additional testimony to present in the case itself, or is t'~i~'?'t~he conclusi6n'~"of your MR. LILLEY: For commingling? This is the -- MR~ ~' ~' · . ~bBF~'~_~..H. In the case, the whole case. Do you have other testimony to pres. ent? MR. LILLEY: We have some recommended field rules that we will recommend when we get to this. MR. MARSHALL' Well, I believe it would be best for us to ask'our geological questions-at this time. and finish up the questions on the commingling and then proceed with the field rules aspect. MR. KUGLER: Do you feel like you have two pools? How many pools do you feel you have in the area under consideration? MR. ~A2RROI ...... Well, we feel we have three distinct accumulations on separate structural blocks or structures, as Pub~..~tionl Inc. v/~h the un.slit, cling lhet ~t r,~y be reproduced f~' Inter<xx'npeny use ~ly. R COURT REPORTERS W~$T EIGHTH AVENUE ~ SUITE I~ ANCHORAGE, ALASKA 10 11 14 15 16 1'7 18 19 2O 21 ' 22 24 25 illustrated on Exhibit No. 2 there, and also on the geologic map. MR. KUGLER- There are three distinct in the Hemto~ck? MR. CARROL' Yes. Right. MR. KUGLER: Three distinct in the "G"-zone? MR. CARROL: Ye s, s ir. MR. KGULER' You feel that the "G" zone and the Hemlock are two separate pools? That we have twenty -- twenty feet o.f · shale separating? .,. ~.,. ,, ~,,~, MR. CARROL'::' Yes, sir. Yes. We feel that the Hemlock and the "G'.' pool are separate pools and the distinction of-the 'three accumUl'ations is 'a structural distinction rather than a stratographic sePa~tfS~ {{ t~ He~ioC~ and the "C" pool, but.· the three accumulations are distinctive in that they. are separated 'by significant lines of folding and faulting and also by the separated oil/water contacts. MR. KUGLER: I'm a-little mixed up then. Would this be six poois ? The three, separate accumulations? MR. MARSHALL: Pardon me. I wonder,would~ you please -- could you refer to your exhibit? MR.~ CARROL: Yes. Yes. MR. MARSHALL: It might help on this matter. MR. CARROL: (Going to the exhibits') We feel We have one accumulation here in which we have two-pools under production, the Hemlock and the "G" sand pools, and this accumulation w~- End again this is a schematic -- and in this actual~ lined section we haven't Div. of '~VI & Mnrl . unde~t~nding Itmt It mey be mprodue~l fo~ Inter.c~mpe~y u~e o~y~ _1 R & R COURT REPORTERS~ 82,5 WEGT EIGHTH AVENUE ~ ~UITE 5 277-471~ ANGHORAGE, ALASKA 5 10 13 14 15 16 17 18 19 20 21 23 24 'established production here yet. We have both Hemlock and what we refer to as the Middle 'Kenai sand production. MR. KUGLER: And this is not "G"? MR..CARROL: Involved in this is "G" sand~-- MR. KUGLER' I see. MR. CARROL: --(continuing) in production but we are not -- in this poOl farther to the south we 'are not. separating out · . the "G" sand as an individual reservoir or pOol. It is commingle with the other. Middle Kenai reservoirs that we have open in' the , well. Down here the only Middle Kenai sand that is productive is the "G" sand at this time. Does that clarify your question? .......... ~'""~ ...... MR.. '...KUGLER': Yes, and t. he.n'.~ sc.hematical~.yi:' yOu~have~, .two more pools immediatel.y above:"the ar.ea you were~alk.%ng about?' MR..CARROL: Well, in this block up here we have a shallower Hemlock pool and then there are also Middle: Ke~nai pool~ in this area here farther to .the south. Again a!6ng the line of section here we have not .established production in this block. But both the. Middle Kenai reserVoir, s and the H~l%ck sand reservoirs are productive in this relative structural position MR. KUGLER: 'Would you point on Exhibit I where that area is that you were just talking.about? MR. CARROL: That.would be. in this area. here arOund. the Union-Marathon producticn Platform to the .south. The accumula- tion here woul'd be .represented by this incline here and then iR & IR ~OURT REPORTERS 825 WEST EIGHTH AVENUE -- ~UITE 277-471:5 ANCHORAGE. ALASKA , ~-,.~w Div. of:k4. & Mnrls ,~,~.~ I F'ubtic:mtio~, Inc. with ~ uncl~ll~lng ~ It m~¥ b~ ~1~'odv~l fo~ Inter.~nl~ny use ~y. I 10 11 13 14 15 16 17 18 19 2O 21 this area would be this anticlinal fold here.' MR. MARSHALL: Is this correct? That this line of section runs through the monopod? MR. CARROL: No, it runs right here. It runs through the bottom hole of our TS 3 redrill. It passes .sOmewhat to the north of our prodUction platform. MR. MARSHALL: I believe you mad=~ reference to a section that Went through the Union-Mar'athon platform. Did I misunder- · stand you there? MR. CARROL: We have no exhibit. You can't see it. This . · line, of sectiOn runs through our platform and down ·the course of "·t'he TS'2 well bore and 'illUst~ates s'0~'~0'f"the structnral 6omplexities involved with the faUlting in this flank pool. MR., VONDER AHE: On that Exhibit 2 ,.the~ structure to the left, the accumulation to the left there, is the "G" and the Kena{ sand unproductive' or is it just unknown yet? MR. CARROL: It's just unknown · MR. YONDER AHE: I see. MR. CARROL: As a matter of fact, this .position ' we're . · putting it~ in here just to indicate our interpretation of the relative positinn of the three pools. MR. KUGLER: Where would your No. 5 well end -- appear on that ? ,MR. CARROL: It would be beyond the edge of the section. The bottom hole would be down here. IR & R C:OURT REPORTERS 277-471:~ ANGHORAGE, ALASKA 10 11 12 13 15 16 17 18 19 2O 21 22 23 24 25 MR. MARSHALL: Now you're referring to EXhibit 1... If you'll, please refer to the exhibits for the sake of the record. MR. CARROL: Right. On Exhibit I the.TS~5 bottom hole' · would be beyond the end-of Exhibit 2. MR. MARSHALL:~ Are there any other que~.tions of 'a'" geological nature ? MR. KUGLER: I would -- one more here. On Exhibit 3 here, I wonder, if you would just with your ~nger point out what o the continuation of the H&mlock sand would be as'.you proceed off the exhibit, to the right there? MR CARROL: Over here 7 MR, KUGLER'- Yes. ~' MR. CARROL: -If you continUed the line of section straight on Exhib'it 1, if we can refer to that, in a straight line off to the northeast, the Hemlock sand' arising' continu&s~, :-~ in that direction a little bit, continues 'more or less as..a. continuation of the slope as shown here until we would pass -- if We got out here .far enough I presume we would pass across this syncline and we~ woUld continue it .far enough t.o see this synclina trough and~' then come up on this other anticline' as indicated on Exhibit 2. But this would be quite a ways out there. This is a some:what-exaggerated section since it does run down more or less as the strike compares, and the strike.is a major geologic feature on Exhibit 3. MR'. MARSHALL.: Are there any further .questions? .Mr. R & R COURT REPORTERS 277-4713 ANGHORAGE, ALASKA 10 1! 14 15 16 !? 18 19 2O 21 22 24 25 ' Gilbreth? 'MR. GILBRETH: On your Exhibit 2,the central portion of the exhibit, I believe you indicated that there was oil production in both the Hemlock and tha so-called "G" zone and the upper sand. MR. CARROL- Yes, sir.' Farther to the .south, right . along'the line of section, Section 2. '-We haven't.established production here yet. MR. GILBRETH: All right~. Would -- are there any wells farther to the south opened up in that interval? The interval you're showing there? ~' ........ ~"' ~'~'~"?'~'~'~'~' ~'~6L: szr. Right. ~' ............ ' ~' ~ This'~'~'~ 'is'~ approximatelY" -~ ly what we have colored in on Exhibit 2. Here's the interval we have open to production in our TS No. 2 well. I've colored the Hemlock. MR. GILBRETH: All right. Then to the right of Exhibit 2 did I underStand you to say that there is nothing productive above~ the "G" zone? MR. CARROL:' No. To the r.ight? MR. GILBRETH: No. On the-right-hand side of. Exhibit 2. .MR. CARROL: Oh, .over here? Yes, sir, that's right. Nothing is productive there. There's -- we have nothing open to production at this time. MR. GILBRETH:' All right, then, on the left. of Exhibit 2 in the upper colored area .there is production in the Hemlock and ~-, ~ ~.~ w Div. of ~k4 & Marls ,~ ~,~ Inc. wi~ tt~ uncJ~'~tlndtng ~hit i~ m.y be rer~odumd fo~ Inte~.compi~y u~ o~ly. I COURT REPORTER~ ANCHORAGe. ALASKA 10 11 13 14 16 17 18 19 2O 24 · the "'G" zone and other zones? MR. CARROL: Well, the equivalent. In the area of the .Union-Marathon monopod which would be -- our interpretation, this would be a 'similar st:ructural..-hlohk to this here~. Yes, they do have production in the He. mlock and the-Middle Kenai sands. The actual identification of the-"G" sand however separately is not clear. MR. GILBRETH: Well, in the Trading Bay Field as it is at the present time then is the ':'G':' zone includ.ed in what we're calling the Upper Kenai here? MR. CARROL: You mean the .Middle Kenai? MR. CARROL: 'Well, in that matter we become involved with correlations, stratograp~ic correlations, and the correla- tfons are not -- we'~ll say., sUfficient; they aren't positive enough to say definitely that the "G" sand' as it is developed~, her in these pools is actually present. It is possible or 'probable that its ~.,~quivalent may be present down there. MR. LILLEY: If I may interject here, in our definition . of pools that we're willing to recommend, we are maintaining there would be two definitions: the Hemlock definition and the Middle Kenai formations as Currently in effect on the Union- _. Marathon area, the 40-acre spacing. But to that we are adding the definition of the "G" pool defined' as the intervals which · correlate with the interval 10'~'073 to 10,250 in the Texaco- 10 11 12 13 14 15 17 18 19 2O 21 22 23 24 - 16 - 'Superior TS No. 1 well which -- you can see that over -- or, referring to Exhibit 4 it's that interval that we're referring 'to there, and then saying where applicable "G" pool may be included in the collectively defined Middle Kenai oil pools as set forth in Art'icla B preceding. And so all we're saying is that the "G" pool is .one of the Middle Kenai oil pools which we are 'defining individually for our ~purposes over in this particular .well. MR. GILBRETH: I see. This may be a question for the · engineering Witness, but in your opinion is there communication between the colored stringers that. you've shown on Exhibit 2? In these three'instances is "there 'enough geological! separation~'~,~ that might preclude communication? ' MR. LILLEY: There is generally in this area a very sp~cific;~. '~'~ shale break between the Hemlock and the sands on top of it in this specific area, through most of the area. It would be hard to say definitely or positively one way" or the other. It would be .very difficult to do that. But there is definitely a shale ~break in! the top' of the Hemlock. We recognize that over all this area. MR. GILBRETH: And I believe you indicated that there is a separate oil/water contact, you believe, on each of' the stringers in each of' the three separate accumulations? MR. LILLEY: Yes, sir. Yes.. MR. GILBRETH: That's all I have. -- . ~ ~,. ~ ~ Div. of ~k/I & Mnrls '~ ~='~ l Publir..~e~ Inc. wl~ ~ ~tt~t~ ~t It m~y ~ ~ ~ int~ ug ~ly. 10 ll 14 15 16 17 '18 19 21 - 17 - MR. MARSHALL: Thank you. Mr. Carrol. Are there any -- MR. KUGLER' I have one _more question. MR. MARSHALL: Mr. Kugler ? MR. KUGLER: In previous testimony we've had -- there's been an awful lot Of fafllts down 'l~kading Bay area~that plagu,e the area. Do you expect~ those under .your lease? A great number of- fault's ? MR. CARROL: Yes, sir. These ~faults are of course defined primarily bY drilling and we fully anticipate that, as the development of-our lease progresses' that we may find more fault, s. The one. s we..'ve indicated on there are the ones that we kn .... a~-e'""'~"'the~e'~'or '"'~nter'pr~et ~a's "being'"'t"~re""'"'~bUt' 'again the'Se are ~n'ly' fOund by actuallY drilling wells, and until we proceed with the development of our lease'-.we can't guess about ~hiS'g fault~?,~· at th time, no. MR. KUGLER- So you feel like this is perhaps a simpli, fied-- ? MR.. CARROL: It's possible that we Will have additional. faults as we progress. MR. KUGLER' Thank you. MR. MARSHALL: Any further questions from the Committee on the testimony so 'far?. Al, we'll proceed then with your.. additional testimony. , M~. LILLEY: Do you want us'to divert from commingling _ now and go into the'field rules? I's this -- ? ,, --,~',~, ,,,~ ~, Div. of %/i & Marls ,~ ~='~-] Inc. wtth the undec~tindlng that It may be re~q)duc~d foc Ifltec.compeny uH oflly. ~ & R C:OURT REPORTERS WEST EIGHTH AVENUE -- SUITE 277-4713 ANC:HORAGE, ALASKA ~W 10 11 13 14 15 1G 17 18 19 2O 21 22 25 MR. MARSHALL: Yes. If this meets with. tha approval of the Committee.' We do have' some engineering questions. Pardon. me, that Mr.Gi'!breth has at this time. MR. GILBRETH: I'd like to ~ask if on your Exhibit 5 you indicate a different flow rate at different. ~hoke-sat.tings. MR. LILLEY: Yes. MR. GILBRETH: Of. what length duration are these ~sts? Are they short tests, long tests,, or is this stabilized flow? MR. LILLEY: These re~.resent a stabilized -- an att~empt to get at a somewhat stabilized flow. As we change the choke size, we wait until we get a stabilized flOw before we cha~ge "' MR". GI'LBRETH: What'Peri0'd of ti~e.~6es':'::~h~t: represeht?~'~''' A matter of h'ours or -- '? MR o FRED'.WAGNER'This was two hours. MR. LILLEY: Two-hour tests. MR. GILBRETH: Two-hOur tests? MR.LILLEY: 'Roughly, MR. F. WAGNER The flow is stabilized baSed on the pressure bombs that we have in the hole. The bottom hole flowing.' p~ ~had stabilize.d prior to proceeding to the next test. MR. GILBRETH: I' see. Do you have any fluid analyses, speaking of PYT analyses or something like that that shows the character of the oil? Do. they show any major differences in the two oils' other than what yoU've shOwn on your exhibit? -- MR. LiLLEY: "No. Now we've just got some --la few days R COU~T REPORTERS WE~T EIGHTH AVENUE.-- ~UITE I~ 277-47~3 ANCHORAGE. AL.ASEA 10 11 12 13' 14 15 17 18 19 2O 21 'before I came up here, Monday, and I haven't had a chance-to review it, but basically it's as indicat&Jd' here. I can see no difference. MR. GILBRETH: I see. On the tests that you show on Exhibit 5, I believe you indicate you had a bo'ttom hole presPure bomb in the hole. Is there any significant' difference .in the flov¢ing characteristics of the two levels' as indicated by your bottom hole pressure? % MR. LILLEY: No, basically not. Referring !to Exh~ibit 4, it l~oked like the specific productivity"~index on the UG"' '~ ; sand was about 0.009 barrels per day per psi per foot of net sand and in the Hemlock it was ~b~u~;'~0.012 barrel per day per psi per foot, and .with the -- these are fairly close together and I think · trying to determine the net feet it's producing here is a little difficult, and I think that t, he data we're looking_ at indicates . that they are very ~close to the same prOducing characteristics. MR. GILBRETH: I see. I notice you show a slight water cut~ on the Hemlock. Is there, any indication that this is indicative of water drive or anything like that? MR. ILLEYi No. This has been this way.. At the time that we made our initial tests, and it's stayed constant at this -- at this study. MR. GILBRETH' That's all I have", ........ MR. MARSHALL: Thank you, Mr. Gilbreth. Are you prepar~e to proceed now with yourtestimony on the field rules application~ Div. of und~'~mr~ing ~%~t it rr~y 'be mp~'od~:~cl f~ i.t~.comp~ny u~ o~}y, - & R COURT REPORTERS WEST EIGHTH AVENUE -- SUITE 277-47~3 AN~HORA(~E, ALASKA 10 11 13 14 15 16 17 18 19 2O 21 23 9.5 - 20- MR, LiLLEY: Basically I think the easiest way would be to read what we are recommending, for the '"total field rules in the Trading Bay Field. Would this be -- ? MR, MARSHALL: That would be very acceptable. Fff{. LILLEY: (Mr. Lilley proceeds to r~ad from his prepared statement appended to the proceedings.) That concludes our testimony. MR. MARSHALL: Does that conclude your testimony? MR..~LILLEY: Yes. , MR. NORGAARD: Would it be proper at this time for Atlantic to make a, statement with ,respect to the field rules?~ MR, NORGAARD: Atlantic-Richfield ComPany concurs with the subsurface structural interpretation as depicted by Texaco's Exhibits 1, 2, and 3. Atlantic-Richfield Company further believes that the discovery well in thiJ anticlinal structure that is shown on Exhibit 1 qualifies' for the discovery roy. a.tty, and' an application which sets out our reasons for this position. · has been submitted to and are currently, before the State. Atlantic-Richfield comPany will not pre~'s for the establishment of a new field in this hearing for the determinatinn :of~: ~'- development and production rules to cover this anticlinal structure, but will concur with the~'.Tekacp p~opoSal to extend the limits of the .Trading Bay Fieid. This concur=ence Wi~h th'& ~ Texaco position is made without prejudice to our right to assert R COURT REPORTERS 277-47~3 ANCHORAGE, A~$KA I~b~ic~ti~ Inc. w~t'n ~ unde~,t~cJing ~'het it mey be repe>duced fo~ ~nt~r.comp~ny u~e o~ ¥i ] 10 11 1¸3 14 15 I6 17 18 2O 21 22 25 -21- that this is a new structure. Atlantic-Richfield further concurs with the Texaco presentation as to pool definition; the idea of commingling we have some difference of opinion~.on the actual mechanical hookup, spacing, and the testing of casing and cementing requirements. MR. MARSHALL:. Thank you, Mr. Norgaard. M~t. NORGAARD: Would it also be appropriate for me to present At!antic's ideas on commingling at this time before the questioning? , MR. MARS~.L. Do you gentlemen Prefer to have Atlantic's picture first before we question? Perhaps this involves some of '~'~6ur~'questionS'[~ .... Fih~",~Yes, Will. you' proceed', PleaSe, Mr. Norgaard', Mit. NORGAARD: Atlantic proposes that in the con~ningling a single packer completion be run Whereby the "G" and the .Hemlock pools would be allowed to produce into the common tubing, and w~uld not be mechanically set to test the zones independently This is currently being done~!~in- the Middle Ground Shoal Where the 'GN'-'GS' and Hemlock pools are produced commingled. Our principle reason for desiring this is the damage that we anticipat by perforating this zone in mud. We Will' be for'Ced to perforate the zone in mud if we have to run a dual completion. With a single packer we could run the~ completion, c~zrculate the mud out of the hole' and place diesel across the zone and perforate-in',' diesel. Now our experience has been that in the initial stages when reservoir pressure is high 'that the damage is not too severe Div. of ~'~ & Marls ,,~ ~=,~ t~$~,nclin~ '~ I~ m~y be ne.~.'o~d ~c~ tnl'~'-coml~ny ul~ only.· R~ ~ R C:OURT REPORTERS B25 WEST EIGHTH AVENUE -- SUITE ~ 277-4713 ANCHORAGE, ALASKA 10 11 13 15 16 17 18 19 2O 21 22 23 25 - 22 - pressure 'However as reservoir/declines and additional wells are completed then severe damage can take place in the reserVoir. This will lower .the initial' productivity and stand a good chance of reducin§ ultimate recovery from the reservoir unless a successful method of removin§ this 'dama§e. ~can~,~be achieved'. That' s our principle r~eason. The' second reason is that' these are directional ho,les and some of them could wind up with some fairly decent angles. We always run into more trouble setting two packers than a s in§le packer in a directional hole. The third reason is that with the testing of these two intervals we Will have .operational problems. They can all be solved, they can all be taken care' of, but it -- again as to the difficulty of operating a field and as to the expense of operating a field. We feel we're justified in our request in that', as has been presented, the reservoirs are very similar. They will be initially producin§ under a depletion-,type mechanism which should allow uniform production from both zones, and will not require testing of the two zones 'to. determine what is being produced from the .two zones. Also, as stated, there 'is the 'possibility of significant faulting3~..in, this area, whereby'there is a good chance of sand to sand contact in the two zones,, whereby the zones would be in contact outside, of the wall bore, and .the addition of having them cc,.~aningled inside the Well bore should have ~no effect on the ,, ~,,~.~,~;~,~ Div. of'M & Marls ,~..~.,~,.~ ! n~prod~ ~ int~.comp~n¥ u~e o~ly. j 825 WEST EIGHTH AVENUE -- SUITE 277-471B ANCI-IORAG~. A~$KA .10 11 13 14 15 16 17 18 19 2O 21 9.2 23. 2~ 25 · reservoir production and operations of the reservoir. If the 'Board so deemed necessary we feel that we could determine production from each zone by running spinner surveys in the wells as opposed to mechanically setting them up with dual packers~ and also we feel if the Board so' rules~ we could at a 'later date run these dual packers without jeopardizing the wells' productivity or the wells' initial PI because at a later' date our reservoir pressure will be low enough so~,we can.~put diesel in the hole for the'recompletion, and this way, we'll . avoid mud against the zone at all times when it's opeh to pro '= ion. Z g=ess as muc say. PRI. ~2~P, SiiALL-'~ ..... Th'ank you, iMr~ N0rgaard. We're ready now for questions directed by the COmmittee. Easy,. do you have a fe~v? MR. GILBRETH: M~r. Lilley~ we were trying to follow these things rather hurriedly. You read them off and of courSe by t~e time we got to the end, why, we couldn"t go back and look here. I wonder if you would go to your Exhibit ! and just tell us which of these areas you:re asking Which of these rules to appl.'y to ? " ' MR. LILLEY: Okay. Basically we are.,asking that the present 40-acre spacing be left intact'. 'That's this area up to this yellow dividing line. Here's an area here, this dividing line, I don't have it on the map. We're asking' that the 'present 40-' acre ~spacing remain intact. MR. GILBRETH: To extend up to where the yellow line is Div. of~v~ & Marls ', COURT REPORTERS 277-4713 ANGHORAGE, ALASKA 10 11 13 15' 16 18 lg 2O 21 22 23 On~ ybur_ exhibit ? .... - MR. LILLEY: To extend to .the yellow iine~ which--which currently is in effect. We're asking that the other .area, the rmainder of the area contained within our field rules:~be given 80-acre Spacing. Now it may be later on that we will ask~ for 40-acre spacing to be eXpanded but at this time we don't feel justified in that. MR. GILBRETH: What, now .-- I believe in the present Trading Bay Field there's commingling in the Middle Kenai, but the Middle Kenai caanot be commingled with the Hemlock. That wOuld extend up to where the yellow line is on the exhibit? In~"Other'~W~dS, are you asking for~' the present Trading' Bay. rules to go in effect?- MR. LILLEY: The present field rules on commingling within the Kenai, all the Middle Kenai oil rules would extend over the total'area. The ~rea where we're asking for con~ning!ing of the '~G" and Hemlock is only in those 'reservoirs produced by, and common to, the TS No. I well. Now .on this exhibit it would be only this pool, the :~eserv.oirs contained .within this 'estimated pool limit here. This reservoir, is the reservoir produced by· the TS 1 well and is separate 'and apart from these reservoirs wet here. They're Separated by this/synd!lnal trough. So ~what we are asking for commingling of Hemlock and '~G'~ are only for this area in here. ~The other rules which.~re'd~r~,en-t%~ in effect wou~d continue on. We would still con~.ing!e. Upper Kenai and Middle R & R COU~t REPORTERS~ B2~ WE~T EIGHTH AVENUE -- ~UITE ~ 277-4713 · Il ~1~ ~. Div. 0~ ~ ~ M'~18 f~ ~l~m j ANCHORAGE, A~SKA .~ . . ~, .' 10 11 12 13 Kenai in both pools. I don't believe that we're getting into a " ° e conflict there since we -- there are no p~oauct.~v sands above the "G" sands over here. It would appear to be some thin sands that may 'have some oil saturation right on the crest of'the structure here but they are not completely dry.~ · F5~. GiLBRETH: Purely now as an administrative matter, how woUld you suggest that this area be defined, where the .. c om~ningling would be permitted th~re? MR. LILLEY: Administratively it would be -- ~I would think that you'd have to apply to the~ exhibit since the Commissior has the right to approve any -- any completion. The information . I thznk tmat the has to go to the Committee on compie~ti°n And ..... ' -- with the log and the' completion you would know what is in 14 15 16 17 18 19 20 21 this '-- in this pool here. i think it'~--,~:it ~ou!dbe difficulty, , to define-that by section-township definitions~,r· F2,. I~RS~LL: Mr. Lil!ey, in your recommended area for commingli~ng in th%s -- on Exhibit 1 in this closure 'area isn't set out by legal subdivision in your recommended field rules? · MR. LILLEY: My recommended field rules .it's on!y'"i~ those reservoirs produced by,and common to,the Texaco-Superior TS ~o. 1 ~vell. ~v~. GILBRETH: In your area two is everything essentially north and east of the yellow line on Exhibit 17 ~i~o LILLEY: Yes. Ail this area here. PRt. GILBRETH: And there you would have 80-acre spacing ~ ~, ~ ~i~ ~ Div. of ~Vl & Marls ,~ ~,~,~ F~bl;c~tlon~ Inc. wi~ fl~e unc,:e~,~an~ng treat it may be reproducecl for tnter.~ornpany u~e only. I~EPOIRTE~S 277o47~3 ALASKA 10 11 14 15 17 18 2O 21 Kenai in both pools. I don't believe that we're getting into a conflict there since we -- there are no productive sands above the "G" sands over here. It would appear to be some thin sands that may have some oil saturation right on the crest of 'the structure here but they are not com~lete, ly dry.. FIR. GiLBRETH: Purely now as an administrative matter, how would you suggest that this area be defined, where the commingling would be permitted there? MR. L'ILLEY: Administratively it would be --.i would think.that you'd have to apply to the. exhibit since the Commissior has the right to approve any-- any completion. The information '~'"h'a~' to g.o to the Committee on compI~'ti'on. An'd i' thihk that the -- with the log and the completion.you would know what is in this -- in this pool here. i think it"--..:'i~ ~onld be difficult to define-that by section-township definitions.. MR. MARSHALL: Mr. Liiiey, in your recommended area for con,mingling in this - on Exhibit 1 in this closure 'area isn't .. set out by legal subdivision in your recom~nended field rules? ~t. LiLLEY: My recommended field rules .it's only in those reservoirs produced by,and common to,the Texaco-Superior · -TS No. 1 w~li. -. · MR. GILBRETH: In your area 'two. is everything essentially north and east of the yellow.line on Exhibit 17 ~o LILLEY: Yes. Ail this area here. MR. GILBRETH: And there you would have 80-acre spacing 277-4713 '' M & M ANCHORAGE. A~SKA ~,, ~, ~. ~,~ w Div. of: arls ~t~ I~ W~ ~ ~t~ ~t . . . I0 11 12 13 I5 16 17 18 19 20 21 23 25 ~j ¢ (' - 26 - 'in the Hemlock and 80-acrea spacing in the Kenai pool, and 160-acre spacing in Kenai gas, is that right? MR. LILLEY- That's right. We have found no Kenai gas in this area. FR~. GILBRETH: YOur recommendation is 'to set up then in essence two field -- two sets of field rules or two pool rules, let's call it; one for the area 'one and one for area two. Do you have any recomm~endation on a name to call these pools? They're going to have to be carried officially on some name for all of our reporting and ~everything, if this is adopted. MiR. LILLEY: Not at this time, 'no. FRt. GILBRETH.: Would 'the operators care to mike a recommendation latez~ ?' " MR. NORGA~fRD' I refer to it always as Nor'th Trading Bay. That's -- it's north of the Trading Bay~ That would be · recommlen~atlon . MRR. LILLEY' There does app.ear to be .a natural barrier fortuitously .-- between the present area here and the area we are recommending be -- so I t.hink this is not inconsistent with the purpose of this. MR. GILBRETH: I'd like to ask if the rules that you propose are adopted, is it your 'belief that the correlative rights of all the operators and ~oyalty.ojwners and.overridingroyalty .owners ~,~ will be protected by these rules so far as you can tell now?. ~. ~, ~ ;~,~ w Div. 6: IR COURT REPORTERS WE.ST EIGHTH AVENUE -- ~UITE 277-4713 ANCHORAGE. ALASKA 10 15 16 17 MR. LILLEY' I believe sos yes. MR. ~ILBRETH' I don't see anything in. your rules regard- ing ~nythi. n~' an bottom hole. pressures. Would you have any objection' to the inclusion of requirements for bottom hole pressure surveys in this area? F~,. LILLY: Just straight bottom hole pressure surveys? ~xi%. GILBRETH: Yes, sir. 24-hour close-in? Annual?'~ · MR. LILLEY: Well~ I think that we would be obtaining that anyway. ~. GILBRETH: Well, would you have any objection to filing it with the .Committee then.? ~ctlon. However~ we~do~hate to be tied down to a specific.-- specific rule where we don't think it's -- that it's actually necessary. "I feel that we would be obtaining this data normally for ourself. 'But again we hate to be tied down to an additional rule, MR. NORGAARD: Atlantic-Richfield Would hawe .some 18 19 2O 21 22 23 reservations on that~ and principally the 'reason for this is once something like this .is in an Order, it~.s there until the field is abandoned. And later on in life if you go into a secondary recovery program of some kind the necessity for bottom hole pressures is essentially negated', This would be later on in the' life of the~..reservoir and -- however you are stuck with pressure -- bottom hole pressure surveys, unless there is a hearing of some kind where you can get release from the Order, and. that's R & R COURT REPORTERS'~ 277-~713 ~,~,~ D~v. of'M & Marls ,~,~~ A~CaO~. ~& with ~ ~s~*~i~ ~ It ~y ~ ~ ~ Inter.ny u~ ~ly. ~ 10 11 15 16 17 18 19 2O 21 22 'our only reservation. I'm sure that AtlAntic would be taking bottom hoie~'pressures at least 'annually on all these reservoirs. MRo GILBRETH: Well, I mention this only from the stand- point that the Committee, as you know, has nothing to look at these, and the other al--the only other alter{ative is to Call a hearing to .get the information that no waste is occurring or is imminent ; .' and it's to the operators' advantage, I think, to furnish the pressures. It saves a lot of hearings down the road. MR. BURRELL: I would suggest that the Order z:ead ~'it may require...but not more often than once a .year, so that they're not bound -- they're not bound -- certainly be acceptable. · MR. GILBRETH: This would be agreeable to Texaco? FRt. LILLEY: Oh, I ~hink it would be agreeable in itself. MR. G!LBRETH· I wan'~ to inquire as to the Rule 7, the · exception to Rule 2159 providing administrative 'approval of'a testing period. Is t~his to permit t~e production of wells that do go over their 2000 to 1 limit? · . ~.fR. LILLEY: This was the original intent of this, I..~ believe, and from our standpoint this was just one of the 'current protective rules and we saw no reason to change it. ~ ~ " MR.. GI'LBRETM: That's all I have'right now.' 23 25 MR. MARSHALL: Mr. Kugler? MRo KUGLER: I have a question~here. Part of Ruze 3 defines the reservoirs common to an~ produced by the Texaco-Superior TS ~ -~,.~,,.;~ Div. of'M & M'~rls ,~,.~'~ i P~k~tt¢,~, ~n¢. w~th ~,e ur~'~'r'~in~ t~t it mey ~e re.~c~d~.~ ~ Inter.,co~p~ny u~ o~ly~ . R & R COUtRT FIEPO~TE~$ B2~; WEST EI~HT~ AVENUE -- SUITE 277-~713 ANCHORAGE. ALASKA 10 11 13 14 16 18 19 2O 21 22 25 well. ~ TTT TVV-. Yes sir ~. KU~E: ~d you ~n~icip~ted or;~ ~as hypothesized ~ha~ ~here ~ould be a lo~ ~a~l~ in.~ ~he ~rea. So ~h~ ~his -- ~he e~en~ o~ ~his -- ~he~ reservoir~ co~on ~o and produced by the Texaco_Superior TS No. i well could be highly interpre- tative as we 'develop the fi~!d. Is this correct? ~. LILLY: This is right. I -- I was going to answer and then I realized it wasn't -- I think our indication is that up underneath and adjacent to this thrust fault we're probably going to -- going to find .we have faults. In this area the only ~'tRing we .can "see', .... I belmev .~ woU!d~b~"~IeS's inclined: t:o"have faults · . . MR. C~OL: The gentle nature, moderate nature of the structure out .there~ 'it's something quite different from the . more intensely folded thrust fault area far. ther to the west, and realistically .we don~t 'anticipate encountering as..much fault problems in this eastern pool. In answer to your previous ques- tion about'faulting we intend ~- we might encounter~ I was rea!'!y thinking at '~hat time more of this flank pool up against the thrust fault'. I think that's a' much more complex area structural ly and if we're going to have fault problems it would be in that pool rather than in this pool farthe='to the east on the gentler s truc tut e. ~. KUG~R: This is a pretty good-sized area, the co~on .. ~, ,, ~,~ ~ Div. of "~VI & Marls ,~ ~,~,~ Inc. w;th fa* ~Kt~'GtG~'~ilr'~l ~.~t it rn~y b* r,~roduc~l for Int,.co,ninny u~ only., R & R COURT 825 WEST EIGHTH AVENUE 2?7-47 ANCHORA~;E. ALASKA " 10 11- 12 18 14 15 16 17 18 19¸ 20 21 25 tO and produced -- the reservoirs to be commonly produced by your No. 1 well. There's no. problems of correlation between your TS N°. 1 and TS 3? RedriH. MR. LILLEY' .No, sir. MR. CARROL' NO. 'MR. LILLEY: Not -- particularly not in the productive Hemlock- "G" sand section, down in the lower part of the.~_~wet! That's fairly straightforward.. ..?~ ...... '~ MR. lv~RSHALL: Mr. Gilbreth? MR. GILBRETH: Mr. Norgaard, I was just-- I missed perhaps something you said. I understood you to say that it was necessary t'o :kill your' we!!'.With mud in perfbra'ting 'for-the upper zone if' the mechanical arrangement recommended by Texaco considered? · , MR. NORGAARD: Yes. .wRt. GILBRETH' Is this because of a pressure situation that you can't use oil 'or diesel oil -to drill a;welI'at this time? · MR. NORGAARD: Well, when -- when we finish drilling the well and run the casing we hav~ mud in the. hole,· and diesel oil will not hold either zone at this time. The initial pressure is 4500 pounds and it won't hold it. As the press'ur~ climb"~'""We will · get to the point where diesel will hold.it,' but there"s a period of time in here where it ~won't hold, and also as you drill o79t in these different areas you don't ·know if you're in a qew fau%t block where you'll be hitting virgin reservoir pressure .or if 82~ WE~T EIGHTH AVENUE'-- SUITE 277-~7~3 ANC:HORA~E, ALASKA ,,,, ~, ,, ;~,~ w Div. of :'~I & M afl s ,~ ,.,~,~ .. .. . 10 11 14 1¸6 17 18 2O 21 22 23 25 you're in a somew~at pressure depleted block. So you'll always have some question-in your mind ~whether you can -- can you go to diesel or do you have to stick with mud to be on the safe side? So I think' it will be quite a way down the road before a person could feel confident that you are going to be dr±!!ing into a · pressure depleted fault block wheze 'you can afford to change .over to diesel. And you could wind up perforating an interval that might have only 3000 pound pressure in it' with a hydrostatic head with 5000 pounds of mud on it, and that's quite a bit of pressure for going in. · MR. MARSHALL: Are there any ~further questions from the Con~mlttee? 'I believe' at this' t~me 'we II~"take 'a ten ~inute rest break, and then we'll rec°nVene at eleven o'clock. (Rroceedings were recessed at 10:~50 a.m.) EC0 D) · P5t. MARSHALL: At this time we'll hear some 'further questions from the Oil and Gas ConservatiOn Committee. 'Mr. Gilbreth: MR~ GILBRETH: Mr. Lilley, I~d like to delve just a · minute into your recommendation for 80-acre ~pacing. What is your reason foz wantting 80-acre spacing in-the north part of the field here~ or your area two? MRo LILLEY: Well, we're recommending 80-acre spacing for that portion of. the Trading Bay Field not covered by the p~esent 40-acre spacing rule. (Mr. Lilley continues to read ~,, ~, ,, ~i~ ~ Div. of "~4 & ~ hr! s ~ ~"~°'~ I Pul:;dicat~o~ ~t~ w~t~ ~ uncfil~'~i~nc~ir~ ~,~at it ma'~ be reproduo~:~ fo~ ~nter<~mpany ur,~ 0eq~y.~ j 277-4'71.3 ANC. HORAOE. AI.ASKA 10 14 15 16 17 18 19 2O 21 22 23 25 from a prepared statement entitled '~Support for 80-Acre Spacing" appended to these Proceedings,)- MR. GILBZtETH: Do you think that the additional recovery -- well, let me ask you this o~uestion first. Do you think that w~.lls on 160-acre spacing co~!d drain this reservoir? Or these reservoirs? The one you're recommending the 80 acres on? MR. LILLEY: Not as effectively as the closer spacing, no. i .believe we have -- we have seen demonstrated wide variance,, in permeability so I know there are tight, spots in the reservoir. And I think that under given economic conditions, the closer spacing you'll have more -- more straws drawing from each area. 'You'll have a better chance to ~ff'~ctively.i..the tight areas as well as the.more permeable areas, with the closer spacing. MR. GILBRETH: Do you think that the additional recovery that you can obtain on 80-acre spacing will more than oz'~.s~t the .~addi~iona! cost of drilling'the extra wellS? ~'. LILLEY: When economics are 'considered., yes. MR. GiLBRETH: In other words, you think you get more oil · and more money, too? ' MR. LILLEY: Yes. MR. MARS~LiLL' Do you concur in that? MR. NORGAARD- Yes. Atlantic-Rich'field concurs in that. And essentially for the same reasons as 'Mr. Lilley has -- as a matter of fact, exactly for the same reasons as Mr. Liiley has pointed out. ~i~ w Div. of ~ & Mnrls ,,~ ~.~o,~ with ~h~ unc~'~ar-~ing t~t it may be ra~ocluo~ for inte~-co~,:c~an,/ ur, e only. 277-~713 ANCHORAGE, A~SKA 33 ~i~o GILBRETH: I would like to ask one question back on 0~ C the other rules that you proposed more .particularly With regard to the com~ing!ing. I've forgotten which rule that was, but is it possible in your 'opinion to describe an area by sections or 10 11 12 15 16 17 18 19 2O 21 25 quarter sections that this rule might be applicable to? Rather than the oil/water contact line you've shown on your exhibit? MR° LILLE¥: For commingling? I believe we could ~ yes. · MR. GiLBRETH: Ye s. FfRo LILLEY: I believe that we could probably bring a line which will include the -- or from our previous area two it would exclude, the west half ~of 'the east half of 'Section 27 -- well~ it wOuld exclUde the'nor'thwest quarter of SeCtion · we could .have a line-- referring to E~hibit 1 we have a line that would come down through° her.e, cross, then~ dow~ at this point here, which would effectively give you the.~antic!inal structure that we're talking about commingling. I~fR. F~ARSHALL:' Mr. Gi!breth, would you like the applicant to' relate that. all to a legal description? And submit it to us? MR. GiLBRETH: Would it be possibl'e? MR. MARSHALL: Before we close .the hearing? (There is a pause while M~: Litley, Mr. Carrol and· Mr. Norgaard confer . among themselves. ) Gentlemen, in the' interest of time we could keep thel hearing open for another twenty-four hours. That is, we would accept any final descriptions~ on this area for a'no~cher twenty-foUr hours, if you want to utilize additional-time to R COURT R~'.,~ORTERS %V~T I::'IGH'FM AVeNUe= 277-471;3 ANCHORAGE. ~,,~,,,~w Div. of~~ ''~ ~arls ~'~°~'~ i Pu~ic~n* Inc. with the u~tanc~ing that ii may be reproduc~t For Inte~<ompany use only._~ 1 ·confirm your description. 2 I~. LILLEY: Okay, fine, Mr. ~4arshal!. i think w'e would 3 prefer to take a little time to set that" out. 4 i~iR. GILBRETH'- I'd like to ask Atlantic also, do they 5 think it.'s possible to set out this area in a-legal description? 6 F21. NORGAARD: Yes, l~m sure. it's possible. Yes. ? MR. LILLEY' And this would then take the place of 8 reservoirs common to and produced by TS 1. 9 FRt. GILBP~ETH: Yes ~ The last portion, of the opening 10 sentence in Rule 3. Or the second sentence-in Rule 3. 'The third 11 (LAughter) I can' t count. 1~ 'F~t. LILLEY: Shall be pe~ ~...~+ted~ in ~the area"~d~'fi~ned as 13 14 15 16 17 18 19 2O -' 21 22 23 25 such' and suCh. MR. MARSHALL: I would like to ask a question of Mr. Carrol about the ,area that's shown on Exhibit !, the north closure. Do you: have any evidence of faulting in that area that has not been indicated on your cross-sections or other'maps? MR.. CARROL: No~ sir, we don't, in that area covered by this large anticlinal structure we have no evidence of faults that would affect -- affect~that accumulation. .. MR. MA~RSHALL: My question is directed in regard to the 80.acre spacing aspect there. Mr. Lil!ey, would you say.then that 'your request for 80-acre spacing, as far as the reservoir characteristic goes., is based primarily on the variations in permeability which you've seen' in this area? R & R COURT REPORTERS 277-~713 10 11 14 15 16 17 18 19 2O ~R. LiLLEY' That is correct, ~.._~=~t we are including within this area two part of the flank structure also. Referrin~ to Exhibit I, this flank structure has~ we feel~ a good ehance of being productive, it's a continuance of our wells 2 and 4. I feel that 'we have -- shill hava a considerable' opportunity for additional faulting on this flank structure. ~'~. MARSHALL' ! see. ~. LiLLEY' And for that reason i think that the area two could be affected by faults as well as by permeability variations. In the anticlinal structure I think of prime importance is the Secondary recovery aspects. NORG~RD .. I woa id "'. -'t.= to make one add'i'ti~ al point if i may on this with respect to 80-acre spacing, and is that this reservoir is underlain by water 'throughout. Well density is very important' in a reservoir that is underlain by water since you do have, problems of bottom water flowing to you and bottom water moving through your reservoir and leaving 'you very' poor sweep. And part'icular!y' when ynu tie this with secondary recovery your well density 'is very critical, and 160-acre spacing were it in effect, you'd essentially be working on "than reservoi~ with seven, possibly only six wells, would be very'very 'poor density with that type of recovery. MR. CARROL: Again as far as faults go, they ''re found by actually drilling, and as ..you~ll notice, the wel~_s have im:'that pool are more or less centrally located-in .one area. Div. of '~ & Mnrts ~ ~=,~ un<~e~t~r~in~ ~t Il mey J:~ reproc~uc~d for tnte~.comp~ny u~e only.= t~ & ~ COU~T I~EPOF~TE~S W~T EIGHTH AVENUE -- SUITE 277-47~3 ANCHORAGE. ALASKA 10 11 'As we expand gozng out to t~-e north and the south ,_h¢re is a possibility of encountering additional faults. FAR. MARSHALL' Are nhere any further questions, gentlemen Are "there any questions of the witnesses by the pub!{c audience? Questions or statement? Yes, Mr. Anderson? y_,Tio .A~ERSON' I'm R. T. Anderson~ District Land Manager of Union Oil Company of California. Union Oil Company, as operator for Union, Marathon, Texaco and Superior in area one as described in the proposed field rules offers no objection to the proposed field rules as submitted by Texaco and Superior at this hearing. However we would request that the Conservation Committe 12 ...... n0t: 'alter those' rules es?t:a'b!iS'hed'~'by''CdnservatiOn' Order 13 14 15 16 17 18 19 20 21 22 24 25 covering the area, the area described as area one in Rule No, 4 of the proposed 'hearing. This is the area that is operated . .from'~'"the monopod 'p!atfor, m. ,MR° bLARSF.~,LL: Thank you, Mr. Anderson. WOuld any members of the Committee like to.ask any questions of Mr. Andez~son? Are there any other comments froM the audience or statements? Gentlemen, .it looks like we're getting to the end of our hearing, and if there are no further comments -- pardon me ' ]b'~r. -- ? · MR o NORGAARD: I have one request, and that 'is that our S-! well is curr'ently in the throes of Completion, and our completion naturally is somewhat dependent on the ruling on co~ming!ing... If there is any way that we could receive some typel 277-~71~ .- .... ANCHORAGE, ALASKA ~,, ~, ~ ~,~ ~ Div. of ~M & M ~rl s ,,o~ ~,~,~: J ..................................... '.. ,of guidance on completion we would be ~very much appreciative. At ~his stage I believe 't. hey're about eight ~to twelve hours away from running the final co:repletion in the well. ~lo MARSHALL: Our Committee will Be ~very active on this Order and we will be in -- our I will suggest a telephone coma~unication late this afternoon or tomor, row morning~ and we can check and see what progress we have to report~to you. 10 14 15 16 17 13 19 20' 21 22' 23. 2~ MR. NORGAARD, k, Thank you. ~.~fRo MaaRSHALL: If there are no further, comments our meeting .is adjourned. END OF PROCEEDINGS ~ & IR COU.~T I~EPORTER$ 825 WEST Eli;Id. TH AVENUE ~'$U~TE 277-4713 ANCHORAGE. ALASKA Geologic Testimony for Commingling State of Alaska Oil and Gas Conservation Committee Hearing on Field Rules For Trading Bay Oil Pield, January 23, 1969 Anchorage, Alaska Development drilling in the Trading Bay field area has demonstrated the presence of three distinct oil accumulations separated by significant lines of folding and faulting. These accumulations are further differentiated by widely separated oil- water contacts in the productive sands. I would like to Present Exhibit I, a structural map at the Hemlock Formation horizon and Exhibits II and III, cross section A-A' and C-C' which illustrate our structural interpretations of the three accumulations -- Point out. Exhibit I also shows the total area which we feel should be included in the field rules (outlined in red) and the dividing line (indicated in yellow) separating the field into two areas, one-for 40 acre spacing and one for 80 acre spacing, which Texaco would, propose. In this presentation the Hemlock formation is defined as the intervals which correlate with the interval 5380 to 5720 in the Union Oil Company of California 1-A Trading Bay well and a 360' interval beginning at 10,275' in the Texaco -Superior TS #1 well. The middle Kenai is defined as the sedimentary section above the Hemlock formation. The "G" Sand is defined as 'the intervals which correlate with' the interval I0,073' to 10,250' in the Texaco-Superior TS -1 well. Referring to Exhibit I, wells TS #1 and TS #3 are the only wells currently producing from the pools affected by Texaco's application for commilingiing. The inferred limits of these pools -2- are defined by the -9900' Hemlock contour' which is ap~,oroximataly the Hemlock oil-water contact. 'This accumulation is developed on a relatively gentle anticlinal fold and is separated from the other producing pools to the west by a wet synclinal ~roug~.- ~. Tine relationship of 'TS ~3 o.1%. and TS ~,%3 r.d., as shown on ~'~ '= this -- ~ =ion ~xnibit II, illustrate the nature o= sep=r=u . Referring again to Exhibits ! and ~I, the second accumulation to be considered is currently being produced by Texaco-Superior TS ~2 and '~ ' ~;~4. and .the Union-Marathon ~A-18. Th~_s accumulation is in the lower block of the major reverse fault indicated on the exhibits and. is controlled by fault truncation of the steep east-'dipPing oil sand section. The wet sync!inal trough, previously mentioned, Separate~ .this pool .fr~om the ?S ~i and %3 pools to the eas=. Production is obtained ~-- . ~om both' the Hemlock formation and the overlying Middle Kenai formation. Hemlock oil-water table, is at approximately ·.-8500' subsea. Transverse faulting and stratigraphic variatio.na ·affect' the productivity of this pool. The third accumu.i~i~aion is currently being 'produced by numerous wells drilled from the Union-Marathon mon'op, od platform. This accumulation is developed on an anticlinal fold in the u~ er block of. the major reverse fault shown on Exhibits i and II. The complex faulting and structure of this .area have been amply described by Union Oil Company of California in previous hearings· Production is obtained from both the Hemlock and Middle Ke'nai for~.ations. ~he~ =~emlock, oil-water contact in this accumulation varies, but is at approximately -6000' subsea. ¢ ¢ -3- Thus.', to sum up, three-structurally distinct accumulations with Hemlock oil-water tables of approximately -60'00' subsea, -8500' subsea, and-9900' subsea can be de=ined, in the Trading Bay field area. This latter is the only one affected by our application for commingling of the G and Hemlock p~ols. This commingling would .be included in our proposed field rules. This concludes the geologic testimony affecting conmr~ing!ing. Mr. Lilley will continue with the engineering testimony. ~,, ~, ,. ~,f~ ~ Div. of 'N4 & Marls f~m ~:,~,~ . ~n~ I~ with ~ u~ta~i~ t~t it m~y ~ ~r~d ~ Inter.ny u~e only. .1 PLANA~A'~D TRADING F~AY TESTiMOL.~Y / A: K' Lille¥, Texaco .. By .letter dated November /2, 1968, Texaco, on behalf of -''- ~= ~ . petitioned for an order · . z~se-~ and _~s partner, The superior. 'Oil Co , . ~ermitting .the.c~m~ngling of productiOn in the we.il bore' of '=be'TS ~! ; · %m!l in exception to Article 2!54 .of the State of Alaska .Oil and Gas : Conservation-ir~gulations and .Statute of' 1967. We would like to modify . . t2%e.wording of t~is request, and provide 'for Commingling in accordance with the 'provisions of Article 2.154 of. these Regulations. .. 'if granted; the requested. order would allow bot2a the Hemlock pool and 'the Trading Bay" "G" Pool to produce into a single . ~)~ ..... :, .·,.k. CO~On~ ~_ .~,g~,.i. gq~ .,,,~,,,S~g~.i~.g.; ~uc:.~ion~::...;,,.~t o,~.:-~ a,,. ;~. ;:..:.-: ;·..::;.~·- , .... ~,,i~,,~,, ';si,ng,ie~ common ?tubing s~ing ,'is. des, irabte-,:in 'order:'to maintain-gas, · -- ,. .. ' ' lift efficiency and. obtain max'imum utility from the current compressor f~Cilities and limited platform spac'e~ Use.'Of' a single tu~ing will .-:- . .. , .....,...' % ..... .... .,. ........ ,,.. ,. ........ f also mitiga'.te future well mechanical, pr°~-lems"'attendan't to r'u'~ning ,, dual tu~ing strings in a deviated well. bore:. 'It is our opinio~ that ..................... .............. ~ .......... : ............... . .... . ............... .,~-.,,- ....... ..~: z ..................................... ,.... 7 ....... '-" ~-~2ii~-'~'a~iqS'~-'~b'C~o-~.~iShe'~"·~i'th'""~b~d~"f~ i~i~'nt'~.I"'r~ffec~S'-t'o'' 'the.':.. ~Itima'te-- .recovery =- ' ...... +~Cm t?~e affected .pools., we have several exhibits to present in support of our application.. Since 'our .'firs t exhibits, are geologically ".'oriente~d'; i would like to have.Texaco's geologist,' "Mr,..Nell .Carrel present them to ~ '.you 'and present the pertinent geological.' testimony'." ,~nese ·exhibits are.- im.~ortant at this."time since-they, show .the-pooi~and areas .which ~re ,: · - . ·. . affected by the application'. .. · · ,, '(Geological Tes timqny) · , inc. with th~ under~t~nc~lng th~l it m~y b¢ re~roduc~cl for Int~r.cotnp*ny u~ only.~_ , would now like to present Exhibit ~4 ..... This exhibi.t is presented in support of Texaco's position that tke two producing pools have essentially identical fluid, · . pressure and produc,n9 characteristics and that there would be no %~ste or loss in ul'l~imate recovery if produced tikr..u a c~-anon tubing .. string. As indicated on the exhibit, the Hemlock pool 'is the lower pool and the "G" pool the upper.. The mid-points of the producing intervals of these pools are only, 236 (vss) f.t. apart, .with only · , 345 (vss.) ft. separating the' top of the upper interval from the base ~ - of the lower' interval. '~t a mid-zonal datum depth of -96S0~ vss t~.ere · . is only 3! Psi difference ,between 'the bottom hole shut in pressures , . · . of ~ne two pools. %~ne' Hemlock' pool 'with a mid-datum preJsure of 4309 psig as compared to 4278 pSig for tho "G" p0;i iS the ~gh;r pressure pool. ~is 31 psi differential is too Small to result' in any signifi- · between -:~:~'" c~n~ c~oss-zlow pools if the well is shut .. The produced fluid characteristics of the two pools are ve~y similar. Oil gravities are. 36.2°API fo~ the Hemlock. pool and 35.8°API for the "G". pool. The gas/oil ratios are 261 cu.ft.~obl. ~or the Hemlock po0! and 277 Cu. ft./bb! for the "G" pool. Because of .. ~nzs similarity there should be no waste or loss in ultimate recovery as. a result of operations in accordance with Texaco's~petition4 . . · ?ne mechanical data shown on Exhibit ~4 reflects the .. present condition of the TS-wl well ,and.. shows how both ~ools could 'be produced separately or co~ined into a single tubing string. Basically the pools late isolated from one another, and from the upper · ~-~c annulus'by, packers. ~ne lower, 'or Hemlock ·pool is normally open to the tubing string but can be' shut in by setting & wireiine . .' o-=,~,~n9 plug in ~e. ~is type N nipple located at ~e base of the . t'~in9 s~ing.f ~e "G" p0ol' can be opened to production or can be" shut in bY citijet opening or closing the sliding sleeve at 10,225' located · . ' above t~he upper' ' · above the lower packer 2'~e: sliding sleeve at i0,,03 I.) z~c;ce~ .ms used to pr0vide'::'c~unicat'i6n"':~t~en the t'~in9 's~ing and ~,~:..~%,.?,.:~:.~ ..~ :' '.tke Casing/t'~ing' annulus' if' des~ed~'''~ '.under.' nO~l pr'0dUcing opera-' tioi~ this-, s ieeve. ~emains..closed....,..,~is'.,mechanica!...,set up. will. allow . . .. · . both l~o0!s t0. be produced simultaneouSly~into.·~.~he:.singie tubing string. This would be our normal operating condition. However,. it also allows each pool t'o be prOduCed ~ Separately which...is .desirable-.~for periodic test. purposes. ~hese.periodic tests .would be ~Used..in .order to allocate .pro- '~uction' from the Well 'to~the ~.two producing pools. - - - ...~ ~ ...... '- we would now like. to present Exhib. it.~5, ................... · ~xhibit ~5 is a plot of the 'latest test data'° This · exhibit shows plots of oil'production vs~ bottom hole producing pressure separate iy'~o~ ~ ~ the' "G" and Hemlock peels and ..... for~.botla po61S'~ c-~bined.. ?his ~exhibit is Pres~ented'in' order' to--Show-.that~:-total-~-produCtion frc~ ~-. tlue~two pools can be properly allocated back to each separate pool for .. proper accounting of', Pool producti'on',~.'..-'+':i..'~'i. ~"c' :' ,.' ........ ' ....... ,, For example, using ~' ~ ~n~s exhibit, when the combined pool oroduction is 2.,000 BOPD, th~ Hemlock pool is shown to.be producing 670 ~O;D ~aud the "G" pool 330 BOPD. We would reconumend that ~SLmiiar test data be obtained . initiailv ~ ~ ~ 6' month intervals, in order to obtain current reservoir .~.~oz~u~.o.~ to assure continuance of-the proper allocation of pool production. .. Zn s%u~mary we ~eiieve that commingling will result in no. .~o.s in ultimate recovery from ghe pools to be commingled, nor should · £t =~ffect the other pools within the 2huits of the Trading Bay ~ield since tkey' are indicated ~t'0'~e acc~ulations separate '~d apart from ~':.~: ~We~ :aiso...oe i~eve, that.. :cher~ '~.wzli' .be .no prob.~ ..~.~.- -..-~" . ~.~,~ ..n. alloca.~z~.g, comm,~n~led, proaueg~on,.~back-to.-ghe xnd~v~dual, pools for proper accounting, of fluid .'withdrawals,:.. ~nd .re~uest'~..that our . . . . ........ petition be granted. ,',:,.., ....... , ~..'~'. .... :. ?. ~,.,..', .~ ..,~. · · .............. ............................................... .. . .... ,. ~ . .... · . .. . . . . . ....... - .. · ~ . .~. ....... ....... . . .'.' .-~ . · ,, ,- .. ..... , .... ... . .,.~...' . . . - ,. .... 5, .. ~ .- , , -. .. . ,, L~,,~ ~ Div. of 'M & Marls "~ ~"~'~ · ' ' : ........... l~ wI~ ~ u~t~i~ 1~t It may ~ f~r~ f~ InfO,ny u~ ~ly, ~. ~ ,' .... . ,.. '. ; , .................. SUPPORT-~.~ ~:~., 8O-AC/~i:[isP.;.CI~:~~ ~ h7~ We are recommending 80-acre spacing for that portion of the Trading Bay Field not covered by the present 40-acre Spacing rules It is our opinion · ~ 80-acre spacings' will result" increased ultimate recovery, as-compared to' that which would re- sult from the !60-acre spacing which would be in e~e~ ~n =ne absence of' a definite spacing rule by this com~nission. We believe that the presenU area for 40-acre spacing should remain in effect; as is, due to the continued presence of permeability variat.ions and fault p'.iobiems. It is altogether possible that the 40-acre spacing area could require expansion There' is' only a limited amount of data available for area 'being recommended for 80-acre spacing. As a result, our con%mendation must be based upon this limited data, an extensibn of . d~ta from the developed areas, and basic engineering generaliza- tions. First., with the presence of faulting and substantial vari- ations in productivity or permeability already demonstrated in t. ne field, we feel that there will be less chance = - ~o~ the tighter areas or separate fault blocks 'to remain relatively undrained if the f.eld is developed with closer spacing. Second, pressure maintenance or secondary recovery opera- tions are be'ing considered for various 'pools in this field. With that in mind, we believe that closer spacing will give greater ~, ,, ~,~ ~, Div. of :'~4 & ~4 arls ,o~ ~.'~ inc. w~th tJ'~ unde~t~n~ln,~ that I! rn~y be re~'oduc~l for Intm'-comp~ny ul~ o~ly. - 2 - flexibility for the operation ~nd planning of any suck ~,~ ~ ~ ~o~ect. Also, the greater well density should result in better sweep ezficiency patterns and also reduce the chances of the injected ..' fluids by-passing the tighter areas of the pools with a re- sultant loss in ultimate recovery. ~hird, due to the nature and expense of operations from these offshore platforms, increased well density 'should result in increased ultimate recoveries. Although the platforms are designed to last the life of the field, it is possible that this life could be foreshortened by a natural disaster, such as an earthquake. If this were to happen after the field were depleted ~¢~'~',;p::~.;..~,': .'*,,~.'.~ .;L,.,,, ;,,vt, a,,'~,,%':*~,;.;"..~,;~,.,: ;.`~;7;~`~`x~`~;'>;``~``~`;`~`:`.;~;;~`~`~t~`/'~,~:~:~;/~``.~`;`; .... ~, :,, . .~,::~,.:'. :,,,~.t'~, . ?,-:: , .. /,,,,;,,',.,~ to the extent that it would not be conomically feasible to re- ....... place the facilities, then a loss in ultimate field recovery would result. With closer spacing, any such loss would be re- duced as a result of the increased cumulative withdrawals from the field resulting from the greater nunfoer of producing wells. Also, since the cost of platform operations are expected to remain somewhat fixed and relatively independent of the number of producing wells, it is anticipated that the more wells that 'are producing as the economic limit is reached, the greater will be the ultima~e field recovery. ~his is due to the fact that the greater the nu~ber of producing wells, the less each well need' contribute to a given total, platform production. As a result, more wells producing, the less the abandonment pressure of the field, and the greater the ultimate recovery, mECO,~.u~ND~D FIELD RULES Rule i. .Area where Field Rules are aDDiicabie. ~e area described as follows will be affected by t?.ese rules: T9N- R!3W, SM Section 3 :~ Section 4.: ~ Section 5: Section 8: Section 9:~ Tt0N - RI31,~L SM ,, _ SeCtion 22: . SE/4 Section 23: ~ Ail Section 26~: ~ All.. Section ~7 :- E/2 Section 34 :-- All SeCtiOn' 35": '~" "- Att ' Rule 2. Definition of Pools k a) The Hemlock Pools are defined as the intervals wl%~c~ cor- relate with the interval 5380.' to 5720' in the Union Oil Company zn~ezva= begin- of California ~i-A' Trading Bay well and a_+360' ' ning at 10,275' in the Texaco-Superior TS -~1 well. ¢ b) The Middle Kenai Formation is defined as the sedim'entary section above the Hemlock ~.ormation. Each sand in the Middle Ifenai Formation in which an oil well may be completed will be an oil pool and each oil pool will be defined indivigua!iv and all oil pools will be defined colleCtively as th~ Mid~!e [<enai Oil Pools. Each sand'in the Middle. Kenai F. Ozc~,ation in which, a gas~ Well may be 'ComPleted will be a gas pool and 'each gas pool will be defined indiVidually and all gas pool~will be defined collectively as the Middle Kenai' Gas Pools. c) ~ne "G" Pool is defined as the intervals which correlate wit:n the interval 10,073' to 10,250' in the .Texaco-Superior TS ~i well. Where applicable the "G" Pool may be included in t~ne collectively defln~d Middle I<enai Oil Pools as set fort's. in i-,~em ~) preceding. ~ le .~< u 3. C om~ ing ! inq Co~ing!ing in the borehole of the =~zda-ze Xenai Oil Poo '~' hereby permitted. Commingling in the. boreho!e of the Middle Xcnai Gas Pools is hereby permitted. Commingling in the well bore of Middle Kenai Oil Pools and Middle Kenai Gas Pools is not permitted. Commingling of Middle Kenai Oil or Gas Pools with the Hemlock Pool is' not' permitted except that commingling of the "G" Pool and ..... '~ ~ Pool shall be permitted in the reservoirs common to, and produced by, ~ake Texaco-~Superior TS ~! Well, provided that: a) Downhole 'equipment be installed on any well,, so commingled,~ which will allow each pool to be shut in or produced separately i~~ necessary. b) Upon initial commingling in any well, adequate test data will be obtained to assure proper allocation of' the produced fluids to the respective pools. Subsequent test data will be obtained a.t periodic intervals as necessary to maintain this. proper allocation. ~-, ~kuie 4. Suacinq Acreaqe ~gN -~R13W~ SM Section 3: A~/4, L~W/4 SW/4 Section 4: E/2, SW/4, E/25rW/4, SW/4~W/4 Section 5: E/2SE/4, SW/4SE/4 Section 8:NE/4 Section 9: R-W/4, ~/4NE/4 T!0N - Ri3W~. SM Section 33: E/2SE/4, SW/4SE/4 Section 34:SW/4 Area Area ~ shall be described as follows: T10N - R13W, SM Section 22: SE/4 Section 23: All Section 26: All Section 27: E/2 Section 34: E/2, A~W/4 Section 35: All a) Hemlock Pools: Not more than four (4) completed oil walls shall be allowed in any-Hemlock Pool on any goverrm%entai quarter section within Area I, nor more than two (2) corapieted oil wells in any Hemlock Pool on any govern~nental_quarter sec- tion within Area II. b) ~liddle I<enai PoolS: Not more than four (4) completed oil %cells shall be allowed in any Middle I<enai Oil Pool on any govern~aental quarter section wig%in Area i, nor more than two (2) completed oil wells to any Middle Kenai Oil Pool on any goverr~'~%ental quarter section within Area il. Not more than one (1) completed gas well shall be allowed in any Middle Kenai Gas Pool on any governmental quarter section in botlu Areas I and ii. .... ~. Ru !e _5 .... Sp'a.cinq f oot~q~e~ a) Oil or gas wells may be ¢~mpleted closer than 500 feet to any property line of a lease except that no oil well shall be completed closer than 5.00 feet from a lease line 'where owner- ship changes and no gas well sba'fl be completed closer than i000 feet from a lease line where ownership changes. b) No oil well in the Hemlock Pool shall be completed closer than 660 feet to any other oil, well in the Hemlock Pool. c) No oil well in the Middle Kenai Pools shall be Completed closer than 660 feet to any other oil well in the Middle Kenai Pools and no gas well in the F~tddie Kenai 'Pools shall be cc~- p!eted closer than I000 feet to any other gas well in the .. ~zddle i~enai Pools. Rule 6. Casi_nq a.n.d .cementing requirements a) S~,~face casing will be landed at approximately !000 feet to protect known fresh water aquifers and it will be cemented with a sufficient volume to circulate cement ~to the sea floor. Casing and control equipment wilt be hydrostatically tested uo i000 pounds per square inch before drilling the shoe. b) Production CalSing will be landed at total depth and cemented with a sufficient volume to place cement above productive sand intervals.. The use of multi-stage cementing \ procedures will be permitted. Alternatively, a casing' string m~y be adequately cemented at an intermediate point and & liner landed at total depth and cemented; sufficient vo!'~ues being used to place cement above known productive sand inter-' vals. if a liner is run, sufficient cement will be used to fill the annular space behind the liner to 100 feet above tka casing shoe or the top of ti%e liner shall be squeezed witi~, i. sufficient 'cement to provide at least 100 feet of cement . between the liner and casing ai~ulus. Casing and well head equipment will be hydrostatically tested to !50.0 pounds par square inch. Rule 7. Testinq,,,ex,c~eption.to Se,ction...12.!59 At the request of an operator, administrative approval of a testing period may be granted to permit existing wells to produce as exceptions to Section 2159 of the Oil and Gas Conservation Regulations. Such testing shall not exceed six (6) months for any well. Geologic Testimony for Commingling . State of Alaska Oil and Gas Conservation Committee Hearing on Field Rules For Trading Bay Oil Field, January 23, 1969 Anchorage, Alaska Development drilling in the Trading Bay field area has demonstrated the presence of three distinct oil accumulations · separated by significant lines of folding and faulting. These accumulations are further differentiated by widely separated oil- water contacts in the productive sands. I would like to present Exhibit I, a structural map at the Hemlock Formation horizon and Exhibits II and II~, cross section A-A' and C-C' which ., illustrate our structural interpretations of the three accumu- · lations. -- Point out. . ~..,~ . . Exhibit I also shows the total area which we feel should · · be included in the field rules (outlined in red) and the dividing: line (indicated in yellow) separating the field into two areas, one for 40 acre spacing and one for 80 acre spacing, which Texaco would propose. In this presentation the Hemlock formation is defined as the intervals which correlate with the interval 5380 to 5720 , in the Union Oil Company of California ~I-A Trading Bay well and · a + 360' interval beginning at 10,275' in the Texaco~Superior · TS Hi well. The Middle Kenai is defined as the sedimentary section above the Hemlock formation. The "G" Sand is defined as the intervals which correlate with the interval 10,073' to 10,250' in the Texaco-Superior TS Hi well. Referring to Exhibit I, wells TS Hi and TS ~3 are the only wells currently producing from the pools affected by Texaco's application for commingling. The inferred 'limits of these pools -2- are defined by the -9900' Hemlock contour which is approximately the Hemlock oil-water contact. This accumulation is developed on a relatively gentle anticlinal fold and is separated from the other producing pools to the west by a wet synclinal trough. The relationship of TS $3 o.h. and TS ~3 r.d., as shown on Exhibit II, illustrate the nature of this separation. Referring again to Exhibits I and II, the second accumulation to be considered is currently being produced by Texaco-Superior TS $2 and 4%4 and the Union-Marathon ~A-18. This accumulation is in the lower block of the major reverse fault indicated on the exhibits and-is controlled by fault truncation of the steep east-dipping oil sand section. The wet synclinal trough, previously mentioned, separates this pool from the TS and ~3 pools to the east. Production is obtained from both the Hemlock formation and the overlying Middle Kenai formation. The Hemlock oil-water table is at apprOximately -8500' subsea. Transverse faulting and stratigraphic variationa affect the productivity of this pool. The third accumui~-~.tion is currently being produced by · numerous wells drilled from the Union-Marathon monopod platform. ~..'.:.. , ·. ! This accumulation is developed on an anticlinal fold in the upper block of. the major reverse fault shown on Exhibits I and II. The complex faulting and structure of this .area have been amply ~.'..~ described by Union Oil Company of California in previous hearings. Production is obtained from both the Hemlock and Middle Kenai formations. The Hemlock oil-water contact in this accumulation varies, but iS at approximately-6000' subsea. -. . . · .... -3- Thus, to sum up, three structurally distinct accumulations with Hemlock oil-water tables of approximately -6000' subsea, -8500' subsea, and -9900' subsea can be defined in the Trading Bay field area. This latter is the only one affected by our application for commingling of the G and Hemlock pools. This ~ commingling would be included in our proposed field rules. This concludes the geologic testimony affecting commingling. Mr. Lilley will continue with the engineering testimony. PLANNED TRADING BAY TESTIMONY A: K. Lillev, Texaco_ .. By .letter dated November /2, 1968, Texaco, on behalf of itself and its partner, The superior. 0il Co., petitioned for an.order ~ermitting .the.commingling of productiOn in the well bore of the'Ts ~1 well in exception to Article 2154 of' the State of'Alaska Oil 'and Gas : Conservation · Regulations and Statute of 1967. We would like to modify the .wording 'of this. request, and provide .for Commingling in'accordance / with the 'provisions of Article 2.154 of these 'Regulations. 'If granted;, the' requested. Order would allow both the . , . Hemlock pool and 'the Trading Bay" "G" Pool to produce.into a single common, tUbing'string within the. well~.bore~... :This. production. ~ into a . 'single, common tubing string is desirable in'order to maintain gas lift efficiency and. obtain'maximum utility from the current compressor facilities and limited platf°rm space.. Use,'Of a single tubing will · , ,. "' '"' dual tubing strings in a'deviated well. bore 'It is Our opinio~ that. ....... ~ .... "' ~-thi s-~'ah'~--~-c'0-~is~e~'~i~h'""~,~e-~ ~'ent'al" ~'f fec'~s'" t'o' "t~e'-'-~ ltimate' "~ -' recovery fr~ '~e affected pools., ~ ' . ,.? . . ~ . . · We have several exhibits to present in support of our application.' ·Since 'our 'first exhibits .are geologica'i'ly ·oriented, I would like to have. Texaco's geologist,' '-Mr..Neil' .Carro1 present 'them ·to .. · "' .'.you·and'present the" ~ertinent geological.' testimony·. .... These exhibits are.. . . , important at this. time Since they, show .the. poe/g and areas .which ~re · . affected by the application. '(Geological Testimony) · We would now like to present Exhibit $4 ..... This exhibit is presented in suppOrt of Texaco's position that the two producing Pools have e~sentially identical fluid, · · pressure and producing characteristics 'and that there would be no w~ste or loss in ultimate recovery if produced thr. u a common tubing · . string. As indicated on the exhibit, the Hemlock pool is the lower pool and the "G" pool the upper. ~ The mid-points of the producing intervals of these pools are only. 236 (vss) ft. apart, .with only · 345 (vss.). ft. separating the' top of the upper interval from the base · of the 16wet interval. At a mid-zonal datum depth of -9680' vss there " is only 31 Psi difference between 'the bottom hole shut in pressures · . · . of the two pools. The .Hemlock pool ·with a mid-datum Pre-4sure of 4309 psig as compared to 4278 psig for the' "O" peel is the.higher pressure pool. This 31 psi differential is too small to result' in any signifi- .. .-~ .... ~'". ' cant cross-flow between poOlS'if the well is Shut in.. ., ,, very similar. The produced fluid characteristics of the two Pools are . Oil gravities 'are 36.2°API for the Hemlock pool and 35.8°API for the "G, pool. The gas/oil ratios are 261 cu. ft. /bbl. for the Hemlock po01 and 277 Cu. ft./bbl for the "G" pool. Because of ,, this similarity there. Should be no waste or loss in ultimate recovery as. a result of operations in accordance with Texaco's petition. o The mechanical data shown on Exhibit ~4 reflects the present'condition of the TS '~1 welf,and.sho~s how both ~ools could . · '.be produced separately or combined into a single tubing string. Basically the pools are isolated from one another, 'and from the upper. · casing annulus 'by. packers.. The lower, .or Hemlock 'pool is normally .. open to the tubing string but can be shut in by settifig a wireline · blanking plug. in the. Otis. type N nipple located at the base of the · · . .. tubing string.. The "G" p0ol' can be opened to production' or can be' shut .in .by either opening or closing the sliding sleeve at 10,225' located · ,. .~ ~ ~ · ~ "above the upper' . . above the lower packer. The. sliding sleeve at.'..10,031; .............. packer .is' used to prOvide.:.'.ccmmunicat~0n'.':b&tw&en' the 'tubing"string and · . "' '~' :.the CaSing/tubing. annulUs'~'if'" desired:" i:Under n'o~ma! ~r0ducing opera" ' ' '"· "" · · tions this. sleeve remains .closed.' . This. mechanical .set up. will .allow . . . · ., . .... both pools to. be produced simultaneously 'int0...the.'.single tubi'ng string. · · . . - This would~ be our normal operating condition. However.,. 'it. also allows ~. ....... each pool to be prOduced. Separately which...is desir, able....for periodic test ' purposes. These 'periodic tests'would be 'used..in order ~o alloca, te .pro- ..... .~.. duction from the We'ii 'to the'two producing' poOlS';"".' 'i' 'i': ...... ..."'. 'i..'' ..~. · We would 'now like. to present. Exhibit. %5 '....~,... ' .... ' ' .. · , Exhibit 95 is a plot of .the latest 'test data. This . . exhibit shows .plots of oil production.vs, bottom .h01e. producing pressure .. separately for the ,'G" .and Hemlock .pools and 'f0r'both"'posls'.' combined. . This exhibit is presented in' order' to--.show-.that'"~tota.l-production from -. the 'two pools can be properly allocated back to each separate pool for ., proper accounting of. Pool production'~' .... -" ...... .. ~ ......... '." , '. For example, 9sing this exhibit, when the combined pool .. production is 2,000 BOPD, the Hemlock pool is shown to be producing '1,670 BOPD ~J'~d the "G" pool 330 BO~D. · We would 'recommend that Similar test data be obtained initially at 2'6 month intervals-in order to obtai~ current reservoir · information to assure continuance of'the proper allocation of pool production. in summary we believe that 'commingling will result in no · . .loss in .ultimate recovery, from. the pools to be commingled, nor should .. it affect the other. pools within the. ~mits of the Trading Bay field . .. , 'since they' are indicated'to 'be accumulations separate and apart from ~",.. . . . . .... .... those to' be commingled. 'We also belier'o'.that there will-be no prob-' · '-- lems in allocating commingled production 'back-'to-the individual, pools · '''for proper accounting of. fluid .withdrawals,.-... and request'-.that our - petition be grant d e . .,, :,,.. ,. ..... : ':,' ...... :.,..,~,~.~. . . . · ... '.o . .... , ,', ,,,i~,' ': .' '" ~ ~' .............. ,,, . · ' ..... ~ ' ,~ ,L~,.'. ,',,~ , ~"'.' ! , ~,'.i'' '.':" · .. ..................................... · ........ ' ....... l,. .......... ~.,,i .J'..i.- '"' ............. ...~-.-'.:, ....... ~ ...... ~.',' '...',..'.. i ....... · · . · · . SUPPORT FOR 80-ACRE SPACING We are recommending 80-acre spacing for that portion of the Trading Bay Field not covered by the present 40-acre spacing · rules. It is our opinion that 80-acre spacing will result in increased ultimate recovery, as compared to that which would re- sult from the 160-acre spacing which would be in effect in the absence of a definite spacing rule by this commission. We believe that the present area for 40-acre spacing should remain in effec~ as is, due to the continued presence of permeability variations and fault p~oblems, it is altogether possible that the 40-acre spacing area could require expansion as additional data are obtained. There is only a limited amount of data available for the area ~eing recommended for 80-acre spacing. As a result, our re- commendation must be based upon this limited data, an extension of data from the developed areas, and basic engineering generaliza- ! tions. First., with the presence of faulting and substantial vari- ations in productivity or permeability already demonstrated in the- field, we feel that there will be less chance for the tighter areas or separate fault blocks ·to remain relatively undrained if the field is developed with closer spacing. Second, pressure maintenance or secondary recovery opera- tions are be'ing considered for various'pools in this field. With that in mind, we believe that closer spacing will give greater . - 2 - flexibility for the operation ~nd planning of any such project. Also, the greater well density should result in better sweep efficiency patterns and also reduce the chances of the injected fluids by-passing the tighter areas of the pools with a re- sultant loss in ultimate recovery. Third, due to the nature and expense of operations from these offshore platforms, increased well density 'should result in increased ultimate recoveries. Although the platforms are designed to last the life of the field, it is possible that this life could be foreshortened by a natural disaster, such as an earthquake. If this were to happen after the field were depleted to the extent that it would not be conomically feasible to re- place the facilities, then a loss in ultimate field recovery would result. With closer spacing, any such loss would be re- duced as a result of the increased cumulative withdrawals from the field resulting from the greater number of producing wells. Also, since the cost of platform operations are expected to remain somewhat fixed and relatively independent of the number of producing wells, it is anticipated that the more wells that ~are producing as the economic limit is reached, the greater will be the ultimate field recovery. This is due to the fact that the , greater the number of producing wells, the less each well need contribute to a given total platform production. As a result, the more wells producing, the less the abandonment pressure of the field, and the greater the ultimate recovery, INCOMING TEU o'.'E TO 1'30 P.M. BURRELL J~NUARY 20, 1969 BY THIS TWX MR. O. K. GILBRETH IS AUTHORIZED TO REPRESENT ME AT THE JANUARY 23RD OIL AND GAS CONSERVATION COMMITTEE HEARINGS. WALLI NGTON AFFI AVIT OF PUBLIC TiON STATE OF ALASKA, ) THIRD JUDICIAL DISTRICT, )ss. being first duly sworn on oath de- poses and says that ........... ~:~r!::(5- is the ...... ~ .............'~"f'~V ........ of the That said newspaper has been ap- proved as a legal newspaper by the Third Judicial Court, Anchorage, Alaska, and it is now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all of said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a true copy of a..L.,,SG.A:L...~.~'0~.I. OE as it was published in regular issues (and not in supplemental form) of said newspaper for a period of .......... "',TTM .... insertions, ....... '~i~,:· :I:~ ........................... commencing on the .... 21 .............. day of ....... D:ECE~:f[73'E!~ ......... ' 19'""~'sand ending on the ..... 2.~ .................. day of both dates inclusive, and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing pub- lication is the sum of $ 20 ~ 00 which amount has been p~'id ~n full at the rate of 2§c per line,; Minimum charge $7.50. Subseri~_ 'and sworn to before me this .... 2.1.day of...D:ao.'~:::~2~.:?:?~;, ......... , m...,~8... ........... ........ NOT6RY PUBL~Cl IN ~ND FOR ~ ~HS ST~T~ O? ~UAS~A. TH'IRD DIVISION, ;' ANCHORAGe, ALASKA M~CO~ M I SS~ON EXPIRES lish field'rules: ment o£ the derlying th% Notice is e~, Zne~;' as. and The tltions the' Committee. for an 6rder,'',' mlnglin~ of bore o£ Tra~ No. 1: the Staf~ Con ute .o~ 198~':.;~" ".. Adoption .. s~acing;' ~y' other-~ =~,~e. developer ~ ? 'El .....~ . ' '.?. %~'~ .... f . "--~' ~'~e p0ol or '~'ls. . . ' ~OT~CE OF ~L~ ~AR~N~ I ' '.. .'.*,.'L';, ' .'. ,':" . ' .~ .. ' . .'.,' .... . .'.' . . I A hea~mg on ~h~se.. matters wilt Be ., :: DE~RT~EN~[~ NATURAL "[.o~'.~ Z.' J. Loussae Library, . ,, ' . RES~CES '. ~%:en~-and "F~' Street, Anehorage,] ....... DIVISION O~ AND .6~" A1;~ska,, 'at :9.:~ :~a.m.;': Janua~ .' Alaska Off and 1~69,: at Which ~ ,~e testimony 0~ ' ' ' Tbx~eo ' ~¢. '~'d .',fli'e 'testimony [":~ ~terested par- '"" ties ~. ~, ~.[~ T~ ','~ :' Exe~u~V"e' .,Secret ary - : eo~ as, located Alaska. 99504 :-.', ',?ioN,' 'm,~,,,W., ,s.M ':'~%t0/~ of'th~ !. 21, 19~ DIVISION OF NOTICE OF PUBLIC HEARING STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS Alaska Oil and Gas Conservation Committee Conservation File No. 69 Re: The application of Texaco Inc. for an order permitting the commingling of production in the well bore of the Trading Bay ADL 17597 well TS #1 located in the SE¼, Section 27, T10N, R13W, S.M., and the motion of the Oil and Gas Conservation Committee to establish field rules for the development of the pool or pools underlying the referenced well. Notice is hereby given that Texaco Inc., as operator for Texaco Inc. and The Superior Oil Company, petitions the Oil and Gas Conservation Com- mittee of the State of Alaska for an order permitting the commingling of production in the well bore of Trading Bay ADL 17597 well TS #1 in exception to Article 2154 of the State of Alaska Oil and Gas Conservation Regulations and Statute of 1967. The Oil and Gas Conservation Committee, on its own motion and. in order to establish field rules as provided by the Oil and Gas Conservation Regu- lations, will also hear testimony on the following matters: 1. Expansion or contraction of the area of the existing field rules for the Trading Bay Field a's set out in Conservation Order No. 57; 2. Establishment of another field, if necessary; 3. Establishment of area to be covered by the field rules; 4. Establishment of pools; 5. Adoption of rules governing casing and cementing practices; NOTICE OF PUBLIC HEARING Conservation File No. 69 Page 2 6. Adoption of rules governing reservoir pressure surveys; 7. Adoption of rules governing well spacing; 8. Any other matters relevant to the development and operation of the pool or pools. A hearing on these matters will be held in the City Council Chambers of the Z. J. Loussac Library, Fifth Avenue and "F" Street, Anchorage, Alaska, at 9:30 a.m., January 23, 1969, at which time the testimony of Texaco Inc. and the testimony of all other affected or interested parties will be heard. Publish December 21, 1968 Thomas R. Marshall, Jr. Executive Secretary Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99504 STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99504 Re: Emergency Order, December 9, 1968 Conservation File #69 Texaco Inc. - Trading Bay TS #1 - Trading Bay East Field 532 Feet from South Line and 686 Feet from East Line of Section 27, TION, R13W, S.M. Texaco Inc., as operator for Texaco Inc. and the Superior Oil Company, on November 12, 1968, petitioned the Alaska Oil and Gas Conservation Committee for an order permitting the commingling of production in the well bore of the captioned well pursuant to Section 2154 of the Oil and Gas Conservation Regulations. The Oil and Gas Conservation Committee on its own motion is calling a field hearing in order to institute proper field rules for the pool or pools underlying the TS #1 well. On December 5, 1968, Texaco Inc. applied for an extension of the emergency order issued on November 18, 1968, to permit accumu- lation of data to support the case to be heard on January 23, 1968. This emergency order will allow Texaco Inc. to commingle the production from the zone at 10,073 feet and the zone at 10,275 feet in order to provide production data for the forthcoming pool hearing. This emergency order is made pursuant to and in accordance with Section 2012 of the Alaska Oil and Gas Conservation Regulations and will expire December 24, 1968. Thomas R. Marshall, Jr. Executive Secretary Alaska Oil and Gas Conservation Committee Form P--3 ~ REV. 9-30-67 . Submit "Intentions" in Triplicate & "Subsequent Reports" in Duplicate STATE OF ALASKA OIL AND GAS CONSERVATION COMMITTEE SUNDRY NOTICES AND REPORTS ON WELLS (Do not use this form for proposals to drill or to deepen or plug back to a diffierent reservoir Use "APPLICATION FOR PEP. MIT--" for such proposals.) 1, WELL WELL OTHER 2. NAME OF OPERATOR TEXACO Inc. 3. ADDRESS OF OPERATOR P.O. Box 664, Anchorage, Alaska 99501 4. LOCATION O,F W~LI'. At surfa0e 615' South and 2072' West of the NE corner Sec. 34, T10N-R13W, $.M. 13, ELEVATIONS (Show whether DF, RT, GR, etc. KB = MSL + 92 14. 5. API NUMF-,R/CA.L CODE 50-133-20120 6. LEASE DESIGNATION A/ND SERIAL NO. ADL %17597 7. IF INDIA.N, A-LLO~ OR TY~IBE NA2VLE 8. UNIT, Fa OR LEASE NAME State of Alaska 9. WELL NO. TS ~1 10. FIELD AND FOOL, OR WILDCAT Trad lng Bay 11. SEC., T., 1~., 1VI., (BOTTOM HOLE OBJECTIVE) Sec. 27, T10N-R13W, 12. PER2VIIT NO. 68-48 Check Appropriate Box To [nd}cate Nlat'ure, of Nb,ti'ce, Report, or Other 'Data SeM. NOTICE OF INTENTION TO: TEST WATER SHUT-OFF ~--~ PULL OR ALTER CASING ~'~ FRACTURE TREAT [__[ MULTIPLE COMPI,ETE I--[ (Other) Extension of Emergency 0rd_~r SUBSEQUENT R~PORT OF: FRACTURE TREATMENT ALTERING CASING SHOOTING OR ACIDIZING ABANDONMENTS (Other) NoT~: Report results of multiple completion on Well ompletion or Reeompletion Report and Log form.) 15. DESCRIBE PROPOSED OR COMPLETED OPERATIONS (Clearly state all pertinent details, and give pertinent dates, including estimated date of starting any proposed work. · The purpose of this notice is to indicate Texaco"s desire to extend the "Emergency Order" of November 17, 1968 permitting thecommingling of upper and lower zone production in Well TS %1. The e~tension is .requested to accumulate data .supporting our case in the January hearing on this subject. DIVISION OF O11, AND GAS ANC HCI';i:?,.9 E 16. I hereby certify that .the.,fo~ego~ng is true ~d correct SmSED J. S. B~rb~ Supt, DATE (This space for State office use) 12-5-68 APPROVED BY CONDITIONS OF APPROVAL, IF ANY: JGC: jm TITLE See instructions On Reverse Side DATE November 12, 1968 NOV I Z J68 TEXACO INC. P. O. BOX 664 ANCHORAGE. ALASKA 99501 APPLICATION OF TEXACO INC. FOR AN ORDER PERMITTING THE COMMINGLING OF PRODUCTION IN TRADING BAy ADL 1.7597, WELL TS#i Mr. T. R. Marshall Petroleum Supervisor State of Alaska Division of Oil and Gas 3001 Porcupine Drive Anchorage, Alaska 99501 Dear Sir: Texaco Inc., as operator for Texaco Inc. and The Superior Oil Company, hereby petitions the Oil and Gas Conservation Committee of the State of Alaska for an order permitting the commingling of production in the well bore of Trading Bay ADL 17597, Well TS in exception to Article 2154 'of the State of Alaska Oil and Gas Conservation Regulations and Statutes of 1967. In support of this ~Plication, we hereby state: 1. Trading Bay Well TS HI was directionally drilled into the SE/4 of Section 27, T10N-R13W, S.M., in accordance with State of Alaska Permit ~68-48. The well encountered the Lower Kenai "G" ZOne at 10,073 feet and the Hemlock Zone at 10,275 feet. The Well was drilled to a total depth of 10,529 feet. A 7" casing string was set at 10,522 feet, and the well was plugged back to 10,450 feet. ~ For the purposes of testing the two potential%~. productive zones in Well TS ~1, certain comple" tion equipment was run which enables testing each zone separately but does not permit' the production of both zones without their com- mingling within the well bore. Mr. T. R. Marshall -2- November 12, 1968 · If commingling is not permitted, recompletion as a straight dual could not take place until the Spring of 1969. This will result in the loss of about 400 BOPD production from the "G" Zone, which would remain shut-in. · Production tests to date, taken on each zone in- dividually, indicate that the two zones have essentially identical fluid and pressure charac- teristics and that, if commingled in the well bore, there will be no waste or loss of ultimate recovery. If the Committee elects to hold a hearing on this matter, it is respectfully requested that the hearing be held at such a time so that a decision on this Application will not be unduly delayed. Respectfully submitted, TEXACO INC. By- R. L. Patton General Superintendent FAW: j m