STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive

Anchorage, Alaska 99501

Re: THE REQUEST OF SOHIO ) Conservation Order No. 202
ALASKA PETROLEUM COMPANY to )
present testimony to deter— ) Endicott Field
mine pool rules for the ) Endicott Oil Pool
Endicott Oil Pool. )
September 20, 1984

IT APPEARING THAT:

1. Sohio Alaska Petroleum Company requested the Alaska Oil and Gas Conservation Commission to hold a public hearing in order to receive testimony for the establishment of pool rules for the development and exploitation of the Endicott Oil Pool.

2. Notice of the public hearing was published in the Anchorage Times on July 24, 1984 and in the Anchorage Daily News on July 25, 1984.

3. A public hearing was held in the Municipality of Anchorage Assembly Room, 3500 East Tudor Road, Anchorage Alaska on August 22, 1984.

4. Members of the staff of Sohio Alaska Petroleum Company presented testimony and the hearing record was closed at the end of the public hearing.

FINDINGS:

1. Hydrocarbons are trapped in the Kekiktuk Formation, a part of the Endicott Group.

2. There has been widespread usage of "Endicott" as the field name and the field and pool should be named Endicott Field and the Endicott Oil Pool.

3. The vertical limits of the pool may be defined by the accumulations in the Sohio Alaska Petroleum Company Sag Delta No. 4 well which appears to be a typical and representative well.

4. Well control and structural interpretation are adequate to reasonably define the areal limits of the accumulation.

5. The pool is bounded by several major faults and there appear to be numerous minor faults within the field limits.

6. The areal extent of the hydrocarbon-bearing reservoir is about 8600 acres.

7. A gas-oil contact has been determined to be a planar horizontal surface fieldwide at 9855 feet subsea.

8. The oil-water contact is assumed to be a planar horizontal surface fieldwide at 10,192 feet subsea.

9. A spacing pattern denser than one well per 160 acres may be necessary to recover the maximum amount of oil.

10. The field is characterized by faulted structural patterns, inconsistent lithology and changing lateral and vertical reservoir characteristics.

11. To adequately evaluate the effectiveness of the reservoir depletion plan, the reservoir pressure, the gas-oil ratio, the gas-oil contact, and the productivity profile of wells should be monitored on a regular and continuous basis soon after regular production commences.

12. Enhanced recovery methods must be employed to achieve maximum recovery. Studies have indicated that a full field waterflood project started within two years after initial production will greatly increase recovery and will not preclude other additional enhanced recovery projects in the future.

13. Studies indicate the ultimate recovery from the reservoir is sensitive to the daily offtake rate.

14. All wells will be drilled from man-made gravel islands with a surface grade approximately 22 feet above the original mud line or ocean floor.

15 The contribution of intervals open to the wellbore in each producing well may be determined by running productivity profile surveys.

16. Initial reservoir and bubble point pressures are estimated to average 4840 psig. The reservoir temperature ranges from 200 to 225 degrees Fahrenheit.

17. Studies indicate that all produced gas, excepting volumes used for lease purposes, should be injected into the gas cap to assist in reservoir pressure maintenance.

18. Structural casing set through the island gravel and below the mud line appears necessary to conduct wellbore operations.

19. Conductor casing set and cemented a minimum of 75 feet below the island surface should provide adequate anchorage for a diverter system.

20. The effects of permafrost thaw-subsidence and freeze back loadings can be mitigated by setting and cementing surface casing of sufficient strength at least 500 feet below the base of the permafrost but no more than 2700 feet true vertical depth.

21. Several casing types and grades that are approved for use as surface casing in the Prudhoe Bay Field and the Kuparuk River Field are adequate for this field.

22. Perforation of cemented casing or liners, slotted liners, wire wrapped screen liners, and open hole completions appear to be equally effective completion techniques.

23. Unless the pool is operated under a unit agreement, the pool management program contemplated in the testimony can not be undertaken, without negatively impacting correlative rights.

24. Statewide regulations presently in effect govern field operations except as modified by this conservation order.

NOW, THEREFORE, IT IS ORDERED THAT the rules hereinafter set forth apply to the following described area referred to in this order as the affected area:

UMIAT MERIDIAN
T11N R16E Sections 1, 2, and 12.
T11N R17E Sections 3, 4, 5, 6, 7, 8, 9, 10,
13, 14, 15, 16, and 17.
T12N R16E Sections 25, 26, 27, 34, 35, and
36.

That portion of those lands in the S½ S½, NW¼ of Block 653 lying north of the south boundary of Sections 22, 23, and 24; T12N, R16E, U.M., Alaska (being identical with line 6-7 on Block 653) and those lands in the S½ SW¼ NE 1/4 of Block 653 lying north of the south boundary of Section 24, T12N, R16E, U.M., Alaska and east of the west boundary of Section 30, T12N, R17E, U.N., Alaska and those lands in the SW 1/4 SE 1/4 NE¼ of Block 653 and those lands in the SE¼ of Block 653 lying east of the west boundary of Sections 30 and 31, T12N, R17E, U.M., Alaska and those lands in the SW 1/4 SW 1/4 of Block 654 and those lands in the SW 1/4 NW 1/4 SW¼ of Block 654 and those lands in the SW 1/4 SE 1/4 SW 1/4 of Block 654 and those lands in Block 697 lying in T12N, R17E, U.M., Alaska being the northeast portion of Block 697 and those lands in the NW 1/4 of Block 698 lying north of the south boundary of Sections 31, 32, and 33, T12N, R17E, U.M., Alaska and those lands in NW 1/4 NW 1/4 NE¼ of Block 698 lying north of the south boundary of Sections 33 and 34, T12N, R17E, U.M., Alaska which are within the offshore three-mile arc lines and which are all listed as state area on the "Supplemental Official O.C.S. Block Diagram" approved October 19, 1979 and December 9, 1979, respectively.

That portion of those lands in the S 1/2 and S 1/2 N 1/2 of Block 698 lying east of the west boundary of Sections 2 and 11, T11N, R17E, U.M., Alaska (being identical with the line 4-5 Block 698) and lying north of the south boundary of Section 11, T11N, R17E, U.M., Alaska (being identical with line 5-6 in Block 698) and the SW¼ NW½ of Block 699 and those lands in the SW 1/4 of Block 699 lying north of the south boundary of Sections 11 and 12, T11N, R17E, U.M., Alaska and those lands in the SW 1/4 NW¼ SE¼ of Block 699 and those lands in the SW¼ NW¼ SE 1/4 of Block 699 and those lands in the SW¼ SE 1/4 of Block 699 lying north of the south boundary of Section 12, T11N, R17E, U.N., Alaska and east of the west boundary of Sections 7 and 18, T11N, R18E, U.M., Alaska which are within the offshore three-mile arc lines and which are all listed as state area on the "Supplemental Official O.C.S. Block Diagram" approved October 4, 1979 and December 9, 1979, respectively.

Rule 1 FIELD AND POOL NAME.

The field is named the Endicott Field. The hydrocarbons contained within the Kekiktuk Formation constitute a reservoir named the Endicott Oil Pool.

Rule 2 POOL DEFINITION.

The Endicott Oil Pool is defined as the accumulations of oil and gas that are common to and which correlate with the accumulations found in the Sohio Alaska Petroleum Company Sag Delta No. 4 well between the measured depths of 11,496 and 12,812 feet.

Rule 3 WELL SPACING.

Nominal 40 acre drilling units are established for the pool within the described area. Each drilling unit shall conform to quarter-quarter governmental sections as projected. No more than one well may be drilled into and produced from each drilling unit. The pool may not be opened in a well closer than a 1000 feet to any well opened to the pool. The pool shall not be opened in any well closer than 500 feet to the exterior boundary of the affected area. The Commission may administratively approve modifications to well spacing when justified.

Rule 4 CASING AND CEMENTING REQUIREMENTS.

a) Structural casing shall be set by driving or jetting to a sufficient depth below the mud line to ensure support of drilling fluid returns to the surface while drilling hole for a conductor string.

b) Conductor casing to provide for proper anchorage shall be set at least 75 feet below the island surface and sufficient cement shall be used to fill the annulus behind the pipe to the island surface. Cement fill shall be verified by observation of cement returns. The cement may be washed out or displaced to a depth not exceeding the depth of the structural casing shoe to facilitate casing removal upon well abandonment.

c) Surface casing, to provide for proper anchorage, for preventing uncontrolled flow and to protect the well from the effects of permafrost thaw-subsidence or freeze back loadings, shall be set at least 500 measured feet below the base of the permafrost but not below 2700 feet true vertical depth. Sufficient cement shall be used to fill the annulus behind the casing to at least the mud line.

d) Surface casing types and grades approved for use include:
1) 13-3/8 inch, 72 pounds/foot, L-80 Buttress;
2) 13-3/8 inch, 72 pounds/foot, N-80 Buttress;
3) 13-3/8 inch, 68 pounds/foot, MN-80 Buttress;
4) 10-3/4 inch, 45.5 pounds/foot, K-55 Buttress;
5) 10-3/4 inch, 45.5 pounds/foot, HF-ERW Arctic Grade, J-55 Buttress;
6) 9-5/8 inch, 36 pounds/foot, K-55 Buttress;
7) 9-5/8 inch, 40 pounds/foot, K-55 Buttress;
8) 9-5/8 inch, 36 pounds/foot, HF-ERW Arctic Grade, J-55 Buttress;
9) 9-5/8 inch, 40 pounds/foot, HF-ERW Arctic Grade, J-55 Buttress;
10) 9-5/8 inch, 47 pounds/foot, L-80 Buttress.

e) The Commission may administratively approve additional types and grades of surface casing upon a showing that the proposed casing and connection can withstand the permafrost thaw-subsidence and freeze back loadings which may be experienced. Evidence submitted to the Commission shall include:
1) full scale tension and compression testing; or
2) finite element model studies, or
3) other types of axial strain data acceptable to the Commission.

f) Alternate means for maintaining the integrity of the well from the effects of permafrost thaw-subsidence and freeze back may be administratively approved by the Commission upon application and presentation of data which show the alternatives are appropriate, based upon accepted engineering principles.

Rule 5 COMPLETION PRACTICES.

Wells completed for production from the Endicott Pool may utilize casing strings or liners cemented through the productive intervals and perforated, slotted liners, screen wrapped liners or open hole methods, or combination thereof. The Commission may administratively approve alternate completion methods where appropriate.

Rule 6 PRESSURE SURVEYS.

a) Prior to regular production, a pressure survey shall be taken on each well.

b) The datum for all pressure surveys is 10,000 feet subsea.

c) After regular production commences in each governmental section, a pressure survey shall be taken within six months and again within 12 months on at least one well in the section.

d) Within 12 months after regular production from the pool starts, the operator will submit to the Commission for approval a key-well program setting forth the long term pressure monitoring program for the pool.

e) Pressure survey, as used in this rule, means either a static bottomhole pressure survey or a transient pressure survey.

f) Data from all pressure surveys shall be filed with the Commission on Form 10-412 within 45 days after the survey is taken.

g) The Commission, by administrative order, may amend the key well pressure monitoring program if it is found to be inadequate or impractical.

Rule 7 GAS-OIL RATIO TESTS.

a) After regular production from a well has commenced, a gas-oil ratio test will be taken within four months and each six months thereafter.

b) Gas-oil ratio tests shall be a minimum of four hours duration unless otherwise administratively approved by the Commission.

c) Gas-oil ratio tests will be reported on Form 10-409 and submitted within 45 days after the tests are taken.

Rule 8 GAS VENTING OR FLARING.

a) The venting or flaring of gas is prohibited except as may be authorized by the Commission for facility safety, cases of emergency or operational necessity.

b) Infrequent operations where flaring is necessary, such as the initial commissioning of facilities, plant start-ups after maintenance or tie-in shutdowns and other special activities, may be administratively approved by the Commission upon written request.

c) The Commission will administratively set volumes for safety flares upon receipt of a written request and accompanied by adequate data to support the request.

Rule 9 GAS-OIL CONTACT MONITORING.

a) A compensated neutron log shall be run in each well prior to regular production.

b) A compensated neutron log shall be run in one well per governmental section within 12 months after regular production starts.

c) A key-well gas-oil contact monitoring program will be submitted to the Commission for approval within 12 months after regular production from the pool commences and will constitute the long term gas-oil contact monitoring program.

d) Compensated neutron logs will be submitted within 45 days after they are taken.

Rule 10 GAS-OIL RATIO.

a) The gas-oil ratio in a well will have no upper limit if all gas produced from the pool except quantities used in lease operations or administratively approved for other purposes by the Commission, is injected into the Endicott Oil Pool.

Rule 11 PRODUCTIVITY PROFILES.

a) An appropriate log to establish the productivity or injectivity profile of the intervals open to the wellbore will be run in each well within 12 months after regular production or injection commences.

b) A program to monitor well productivity and injectivity will be submitted to the Commission for approval at least three months before water injection begins.

c) Additional productivity surveys may be required by administrative order if underground waste of hydrocarbons appears imminent.

d) Productivity surveys will be submitted to the Commission within 45 days after the date of the survey.

Rule 12 FIELD-WIDE WATERFLOOD PROJECT.

a) A field-wide waterflood project is approved for the pool area.

b) The field waterflood project must be started within two years after regular production from the pool has started.

c) The waterflood plan will be submitted to the Commission at least three months before actual water injection begins.

d) All applications for permits necessary to implement the waterflood project shall be timely submitted for approval.

Rule 13 POOL OFFTAKE RATE.

a) The maximum calendar quarter average offtake rate from the pool is 125,000 barrels of oil per day. Calendar quarter average offtake rate means the daily average rate determined by dividing the total volume of oil produced in a calendar quarter by the number of days in that calendar quarter.

b) The maximum calendar quarter average offtake rate of 125,000 barrels of oil per day may be exceeded for the purpose of making up a shortfall in the allowable volume of oil produced in a previous calendar quarter providing that the offtake rate for any day does not exceed one hundred ten percent (110%) of the calendar quarter average offtake rate.

c) For the purpose of providing for reasonable operating flexibility, the calendar quarter offtake volume may be exceeded. The volume of oil determined by multiplying 125,000 barrels by the number of days in that calendar quarter establishes an allowable calendar quarter offtake volume. A calendar quarter offtake volume may not exceed the allowable calendar quarter offtake volume by more than one percent (1.0%) without prior approval of the Commission. Volumes of oil exceeding the allowable calendar quarter offtake volume shall be zeroed out in the following calendar quarter by producing at rates lower than the maximum calendar quarter average offtake rate until that volume of oil produced in excess of the previous allowable calendar quarter offtake volume is offset. The volume of oil produced in calendar quarters in excess of the allowable calendar quarter average offtake rate for the purpose of recovering a shortfall in an allowable calendar quarter offtake volume as provided for by (b) above is not given consideration when making a determination or the purpose of this subsection (c).

d) Gas offtake is not permitted because the reservoir depletion program governed by this order requires that produced gas be injected into the Endicott Oil Pool. At anytime, upon proper petition and after public hearing, the Commission will consider the merits of issuing an order establishing a gas offtake rate. That order would provide for appropriate amendments to the pool depletion program governed by this order to ensure that a loss in ultimate recovery will not occur.

Rule 14 UNITIZATION.

a) Oil and gas leases overlying the affected area shall be unitized and a participating area established for the Endicott Pool prior to the commencement of regular production from the pool.

b) Should unitization and the establishment of a participating area not be accomplished prior to regular production from the pool, this order is null and void. Upon petition and after public hearing, the Commission will issue an order setting forth pool rules governing competitive lease production methods that will ensure the protection of correlative rights and the maximum ultimate recovery from the pool or issue an order mandating pool unitization.

DONE at Anchorage, Alaska and dated September 20, 1984.

C. V. Chatterton, Chairman
Alaska Oil and Gas Conservation Commission

Harry W. Kugler, Commissioner
Alaska Oil and Gas Conservation Commission

Lonnie C. Smith, Commissioner
Alaska Oil and Gas Conservation Commission

Conservation Order Index