STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive

Anchorage Alaska 99501-3192

THE APPLICATION OF MARATHON ) Conservation Order No. 225
OIL COMPANY regarding ) Trading Bay Field
commingling of production ) Trading Bay "G" NE Oil Pool
in Trading Bay Field and ) Trading Bay Hemlock NE Oil Pool
definition of the Trading ) Trading Bay West Foreland NE
Bay West Foreland NE Oil ) Oil Pool
Pool. )
January 16, 1987
IT APPEARING THAT:

1. Marathon Oil Company submitted an application dated November 20, 1986 requesting a Conservation Order allowing commingling of produced fluids in the North Trading Bay Unit No. S-8 well. Marathon proposes to commingle produced fluids from the Trading Bay "G" NE and Trading Bay Hemlock NE oil pools with fluids from the Trading Bay West Foreland NE oil pool in said well.

2. Marathon Oil Company submitted Suppliment A to the subject application dated November 26, 1986 requesting an order defining the Trading Bay West Foreland NE oil pool.

3. Notice was published in the Anchorage Daily News on November 27, 1986 of an opportunity for a public hearing on January 7, 1987.

4. Neither a protest nor a request for a public hearing was timely filed. Accordingly, the Commission will in its discretion, issue an order without a public hearing.

FINDINGS

1. Static reservoir pressure is approximately 3100 psi in the commingled Trading Bay "G" and Hemlock oil pools and approximately 6000 psi in the West Foreland oil pool. The draw-down bottom hole pressures estimated for well S-8 approximate 1500 psi for the "G"/Hemlock and 1700 psi for the West Foreland under planned production rates.

2. Engineering analysis indicates that under the proposed commingling conditions approximately 35 BOPD can be produced from the West Foreland pool by well S-8.

3. Production from the "G"/Hemlock pools was commingled and reported as a single pool in 1971 and thereafter as part of a pressure maintenance project permitted by Conservation Order No. 108.

4. Commingling of production from the West Foreland oil pool with production from the "G"/Hemlock oil pools within the wellbore will allow depletion of the marginally economic West Foreland Pool while increasing the recovery efficiency from the "G"/Hemlock pools.

5. Inasmuch as Marathon Oil Company has 100% interest in the S-8 wellbore drainage area and royalty interests in the "G"/Hemlock and West Foreland pools are owned 100% by the State of Alaska, correlative rights will not be adversely affected by commingling of production from these pools in the S-8 wellbore.

CONCLUSIONS

1. Commingling of the production from the referenced pools in the wellbore of the S-8 well may result in recovery of hydrocarbons which otherwise would not be recovered and can be accomplished without without inducing waste and without adversely affecting protection of correlative rights.

2. Initial allocation of 35 BOPD to the referenced well from the West Foreland pool appears reasonable; but should be confirmed by testing after start up of commingled production.

NOW, THEREFORE, IT IS ORDERED THAT:

RULE 1 Definition of the Trading Bay West Foreland NE Oil Pool

The Trading Bay West Foreland NE Oil Pool is defined as the accumulation of oil common to, and which correlates with, the interval 10,758 feet to 11,750 feet in the Atlantic Richfield North Trading Bay Unit No. S-8 well.

RULE 2 Commingling

Commingling of production from the Trading Bay "G" NE, Trading Bay Hemlock NE and West Foreland NE oil pools is permitted in the wellbore of the Atlantic Richfield North Trading Bay Unit No. S-8 well.

RULE 3 Allocation of Production

Initially the first 35 BOPD of production from the commingled well is allocated to the West Foreland oil pool, and the remainder of the production to the Trading Bay Middle Kenai "G" NE and Hemlock oil pools. The production rates from the West Foreland and "G"/Hemlock pools must be determined within three months from the start of sustained production in a manner satisfactory to the Commission.

Done as Anchorage, Alaska, and dated January 16, 1987.

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

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

W. W. Barnwell, Commissioner
Alaska Oil and Gas Conservation Commission

Conservation Order Index