STATE OF ALASKA
ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive
Anchorage Alaska 99501-3192

Re:THE APPLICATION OF UNOCAL ON              )   Conservation Order No. 234
BEHALF OF THE TRADING BAY                    )
UNIT WORKING INTEREST OWNERS                 )   McArthur River Field
requesting commingling of                        )   Middle Kenai "G" and
produced fluids from the                         )   West Foreland Oil Pool
Middle Kenai "G" and West                        )
McArthur River Field                             )
                                                     October 30, 1987

IT APPEARING THAT:

1. Conoco Inc, by letter dated October 2, 1987, requested an order allowing the commingling pf produced fluids from the Middle Kenai "G" and West Foreland Oil Pool of the McArthur River Field.

2. Notice of the public hearing was published in the Anchorage Daily News on October 15, 1987.

3. Unocal submitted Exhibit "B" as a supplement to subject application dated October 26, 1987 which consisted of additional engineering testimony regarding increased oil recovery and the prevention of waste.

4. No protests were filed with the Commission.

FINDINGS:

1. The Middle Kenai "G" Oil Pool and the West Foreland Oil Pool are defined in Conservation Order No. 80.

2. Both pools have been produced separately since 1969.

3. A waterflood for the Middle Kenai "G" was approved and implemented in 1974.

4. A waterflood for the West Foreland Oil Pool was approved January 23, 1987; and water injection is planned to begin in the last quarter of 1987.

5. Production to date has been through wells completed singly in only one of the pools, or dually with separate tubing strings for each pool.

6. Wells completed for commingling would contain an isolation packer between the pools.

7. Current average static reservoir pressure of the Middle Kenai "G" and West Foreland Oil Pool is 3200 psi @ 8850' ss and 2900 psi @ 9850' ss respectively.

8. Commingling will allow completions through which both zones may be logged (surveyed) or treated without pulling tubing.

9. Gas lifting a single tubing string is expected, in most cases, to increase production due to more optimum valve settings and use of varied tubing sizes.

10. Estimated incremental recovery per commingling completion over and above a dual completion is 200,000 STB of oil from the Middle Kenai "G" pool.

11. By unitization of the Trading Bay Unit, effective February 27, 1967, the correlative rights and equities of the working interest owners are protected, and royalty interests in the Middle Kenai "G" and West Foreland oil pools are owned 100% by the State of Alaska. Correlative rights will not be adversly affected by commingling of production from these pools.

CONCLUSIONS

1. Commingling of the Middle Kenai "G" and West Foreland Oil Pools may result in recovery of hydrocarbons which otherwise would not be recovered and can be accomplished without inducing waste and without adversely affecting protection of correlative rights.

2. Allocation of produced fluids can be accomplished with production logging at regular intervals.

3. Isolation packers between the pools may be used to prevent crossflow in the event of a prolonged shutdown.

4. Waterflood operations may also minimize crossflow by minimizing pressure differential between the two pools.

NOW, THEREFORE, IT IS ORDERED THAT:

1. Commingling of production from the Middle Kenai "G" and West Foreland Oil Pools in the McArthur River Field is permitted.

2. Reservoir pressures and productivity indices of the respective pools shall be determined using acceptable petroleum engineering practices prior to regular commingled production.

3. Appropriate production logs shall be run upon initial completion and biannually thereafter to determine proper allocation of produced fluids with results reported to the Commission.

4. Upon application by the operator, alternative completion, production, and testing practices may be approved by administrative order.

DONE at Anchorage, Alaska and dated October 30, 1987.

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

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

Conservation Order Index