STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive

Anchorage Alaska 99501-3192

 

Re:

THE APPLICATION OF ARCO ALASKA

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Conservation Order No. 435

 

INC. to present testimony classifying the pool

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and establishing rules for development of the

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Kuparuk River Field

 

Tabasco Oil Pool in the Kuparuk River Field.

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Tabasco Oil Pool

       
     

November 5, 1998

 

IT APPEARING THAT:

  1. By letter dated June 22, 1998, ARCO Alaska, Inc. ("AAI") requested a public hearing to present testimony to define the Tabasco Oil Pool and establish rules for development and production of the reservoir.
  2. The Commission published notice of public hearing in the Anchorage Daily News on June 27, 1998.
  3. A hearing concerning the matter of the applicantís request was convened in conformance with 20 AAC 25.540 at the Commissionís offices, 3001 Porcupine Drive, Anchorage, Alaska 99501 at 9:00 am on August 12, 1998.

FINDINGS:

  1. AAI is operator of the Kuparuk River Unit ("KRU").
  2. AAI petitioned the Alaska Department of Natural Resources to form the Tabasco Participating Area ("PA") within the KRU on July 17, 1998. AAIís application for the Tabasco PA is limited to the area underlying the KRU Drill Site 2T ("DS 2T") area. ADNR approved the Tabasco PA on October 14, 1998.
  3. The Tabasco Sandstone is an informal member of the Schrader Bluff Formation, which corresponds with the Campanian-aged Late Cretaceous Colville Group in the KRU area.
  4. The Tabasco Sandstone is a prograding sequence of deltaic to near shore marine sediments, deposited at or near a shelf margin. The interval is discontinuously distributed over a broad region, with sand thickness generally most significant along the shelf margin. Large scale slumping and erosion characterize the interval.
  5. The Tabasco Sandstone is composed of two lithologies: a discontinuous thin-bedded sandstone facies with shale interbeds and an overlying amalgamated sandstone facies. The thin-bedded sandstone facies is more widespread; its gross interval thickness is about 80¢ to 400¢ . The amalgamated sandstone facies ranges in thickness between 45¢ to 350¢ thick. The transition between the two facies is abrupt.
  6. The Tabasco Sandstone is stratigraphically separated from the overlying West Sak sands by an interval of interbedded claystone, shale and mudstone between 300¢ to 400¢ thick.
  7. The Tabasco Sandstone underlies a large portion of the southern and western portions of the KRU. Throughout the exploration and development history of the KRU, significant shows of oil have been reported within the Tabasco Sandstone or equivalent rocks.
  8. The geographical extent of the potentially hydrocarbon-productive Tabasco interval in the KRU appears to corresponds with the outer shelf and shelf margin environments during Tabasco deposition.
  9. Producible hydrocarbons were encountered in the Tabasco Sandstone between 3352¢ to 3599¢ measured depth ("MD") in the KRU 2T-201 well, which appears to contain a typical and representative stratigraphic section of the Tabasco Oil Pool.
  10. The Tabasco structure is a monocline, dipping east to northeast and striking north to northwest in the western portion of the KRU and east to southeast in the southern portion.
  11. The trapping mechanism is a combination of stratigraphic and structural elements. Oil distribution appears controlled by the stratigraphic distribution of reservoir sands.
  12. The Tabasco accumulation is cut by a series of north-south and east-west normal faults, with throws typically ranging between 10¢ to 50¢ and maximum throws to 100¢ .
  13. Petrophysical information is derived from open hole log data, supplemented with core samples from the KRU 2T-12 and 2T-202 wells. Porosity ranges from 17 to 22 percent and averages 20 percent. Log water saturation ranges from 17 to 60 percent, with 20 to 25 percent representative of the 2T pad area. Pressure transient permeability range from 3 to 100 Darcies; oil API gravity is 16 degrees, viscosity 253 centipoise at reservoir temperature of 71° Fahrenheit.
  14. The Tabasco oil is saturated at reservoir conditions, with an initial pressure of 1512 psig, a bubble point pressure of 1476 psig at 3000¢ subsea datum, and a solution gas oil ratio of 169 standard cubic feet per barrel.
  15. A small gas cap of about 32 acres exits in the 2T-201 area, with the gas-oil contact at 2915¢ SSTVD. The gas cap contains an estimated 100 MMSCF of gas in place, and is not expected to have a major impact on reservoir performance. No definitive oil-water contacts have been delineated within the proposed Tabasco Oil Pool.
  16. AAI plans a phased development for the Tabasco Oil Pool with initial efforts directed toward the amalgamated sand facies in the 2T pad area with some testing of the thin-bedded sandstone facies.
  17. AAI estimates original oil in place ("OOIP") for the DS 2T area to be between 48 to 131 million barrels, with a mean aggregate volume of 85 million barrels. Volumetric calculation for the rest of the Tabasco accumulation have not been performed, but the potential reserves base for the entire pool is thought to be substantial.
  18. Reservoir simulation shows recovery under primary depletion of only 5% of OOIP due to the high viscosity (253 cp.) of the crude oil and the corresponding low solution gas-oil ratio.
  19. Waterflood is planned to coincide with initial development to maintain reservoir pressure at or near bubble point by maintaining voidage replacement. Recovery could range between 21% to 30% under waterflood. A producer-injector ratio of 2-1 appears most likely. Injection water will be derived from Kuparuk area produced water and seawater.
  20. Preliminary screening studies suggest that a polymer-augmented waterflood could reduce the mobility ratio of the Tabasco oil and improve recovery. Additional work is needed to confirm compatibility of the polymer with Tabasco mineralogy. Mobility ratio of injection fluids and reservoir heterogeneity will have an impact on future depletion plans and ultimate recovery from the reservoir.
  21. Initial development of the DS 2T area will be limited to 10 to 20 wells covering only about 900 acres of approximately 131,000 acres of the Tabasco Pool area. Estimated recoverable reserves are 23 million barrels with waterflood recovery.
  22. Subsequent development of the Tabasco accumulation may include the Drill Sites 3G, 2M, 2X, and 2D.
  23. Simulation studies show that well spacing of approximately 50 acres per well is optimal given the high permeability of the reservoir. Some portions of the reservoir may require a denser spacing of up to 10 acres per well to address permeability barriers, poorer than expected well performance, or reduced displacement rates of the viscous polymer injectant.
  24. Well performance will vary throughout the productive area, but is expected to range between 800 to 4000 BOPD, with an average of approximately 2000 BOPD. Electric submersible pumps (ESPs) will be used as artificial lift, which will allow greater pressure draw down and higher production rates.
  25. AAI will use existing KRU facilities and infrastructure to develop the Tabasco Oil Pool.
  26. AAI will measure initial reservoir pressure in producing and injection wells and within portions of the reservoir on a periodic basis to monitor reservoir performance. Other surveillance such as profile logs may be applied to wells where multiple intervals are open for production or injection.
  27. Casing and cement plans will adhere to 20 AAC 25.030 with designs based on performance factors to withstand permafrost and downhole conditions.
  28. AAI proposes to use well annuli in accordance with 20 AAC 25.080 to dispose of drilling wastes as part of the development operations and may also dispose of approved wastes in permitted North Slope Class II injection wells. There are no freshwater aquifers within the Kuparuk River Unit.
  29. AAI proposes to commingle Tabasco oil with hydrocarbons from the Kuparuk Oil Pool for processing in KRU production facilities. Production will be allocated back to Tabasco Oil Pool on the basis of monthly well tests.

 

CONCLUSIONS:

  1. Pool rules for the initial development of the Tabasco Oil Pool are appropriate at this time.
  2. Initial pool development will be conducted on leases that are participating in the KRU.
  3. Minimum well spacing of 10 acres will allow the operator to deal effectively with difficult fluid and rock properties and stratigraphic constraints in locating wells, and should not cause waste, compromise ultimate recovery or jeopardize correlative rights.
  4. The Tabasco Oil Pool has not been completely delineated.
  5. Depletion plans and enhanced recovery mechanisms will not be optimized until the pool is more completely delineated and fluid mobility and reservoir heterogenity is more completely understood.
  6. Early implementation of waterflood will preserve reservoir energy and enhance ultimate recovery from the pool.
  7. Flexibility may be required in some areas of the reservoir to control placement of injectant, and improve the ability of the injectant to sweep the rock and maintain reservoir pressure.
  8. Annular disposal of drilling wastes can occur in an environmental safe manner if conducted in accordance with 20 AAC 25.080, but will require subsequent Commission review on a well-by-well basis to ensure that the provisions of 20 AAC 25.080 are met. The area injection order for the Kuparuk Oil Pool may provide a partial basis for any subsequent Commission determinations concerning annular disposal.
  9. Reservoir pressure should be measured in wells using standard industry practices on a regular basis to manage production and monitor reservoir performance.
  10. Exception from the gas-oil-ratio limitations of 20 AAC 25.240 is appropriate provided a pressure maintenance project starts within six months of the start of regular production.
  11. Commingling Tabasco and Kuparuk production streams on the surface is appropriate provided that there is adequate individual well testing to assure production allocation quality.
  12. Two well tests per month has been a minimum standard for commingled pools with the advent of commingling pools in surface facilities prior to custody transfer and severance from leases.
  13. An allocation factor of 1.0 for the Tabasco Pool is acceptable during the first year of production to evaluate multiphase well test equipment and allocation quality.

 

NOW, THEREFORE, IT IS ORDERED THAT the rules hereinafter set forth, in addition to statewide requirements under 20 AAC 25, apply to the following affected area referred to in this order.

 

Umiat Meridian

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Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27, 28, 29, 30, 31, 32, 33, 34.

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Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 17, 18, 19, 20, 23, 24.

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Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 17, 18, 19, 20.

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Sections 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 15, 16, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36.

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All

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Sections 5, 6, 7, 8, 16, 17, 18, 19, 20, 21, 22, 29, 30, 31.

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Sections 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 15, 16, 21, 22, 23, 24, 25, 26, 27, 28, 33, 34, 35, 36.

Rule 1 Field and Pool Name

The pool is in a geographic area known as the Kuparuk River Field and will be contained within the Kuparuk River Unit. Hydrocarbons underlying the affected area and within the referenced intervals of the Schrader Bluff Formation constitute a single oil and gas reservoir called the Tabasco Oil Pool.

Rule 2 Pool Definition

The Tabasco Oil Pool is defined as the accumulation of hydrocarbons common to and correlating with the intervals between 3352¢ to 3599¢ MD in the KRU 2T-201 well.

Rule 3 Spacing Units

Nominal spacing units within the pool will be 10 acres. The pool shall not be opened in any well closer than 300 feet to an external boundary where ownership changes.

Rule 4 Casing and Cementing Practices

  1. Conductor casing must be set at least 75 feet below ground level and cemented to surface.
  2. Where required for annular disposal, surface casing must be set at least 500 feet below the permafrost and be cemented to surface.

Rule 5 Injection Well Completion

  1. Injection wells must meet the requirements of 20 AAC 25.412.
  2. Injection wells may be completed with tapered casing provided a sealbore assembly, packer, or other isolation device is positioned not over 200 feet above the top of the injection or perforated interval.
  3. A sealbore assembly, packer, or other isolation device may be positioned within 200 feet of a secondary target interval within the defined pool where potential reserves are reasonably expected and will be evaluated or exploited.

Rule 6 Automatic Shut-in Equipment

  1. All wells capable of unassisted flow of hydrocarbons will be equipped with a fail-safe automatic surface safety valve.
  2. Injection wells will be equipped with a double check valve arrangement.
  3. Surface safety valves will be tested at six-month intervals.

Rule 7 Common Production Facilities and Surface Commingling

  1. Production from the Tabasco Oil Pool may be commingled with production from the Kuparuk Oil Pool and/or other oil pools in the KRU in surface facilities prior to custody transfer.
  2. The allocation factor for the Tabasco Oil Pool will be 1.00 for the first year of production to evaluate the allocation method, testing frequency and quality.
  3. Each producing well will be tested a minimum of two times per month during the first year of regular production.
  4. The Commission may require more frequent or longer tests if the allocation quality deteriorates.
  5. The operator shall submit a monthly file(s) containing daily allocation data and daily test data for agency surveillance and evaluation.
  6. The operator shall provide the Commission with a well test and allocation review report after six months and after one year of commingled production. Subsequent report frequency and necessity will be determined after the first year of regular production.
  7. After one year of regular production, an evaluation of test frequency and allocation quality must be done to support extension of the 1.00 allocation factor or consideration of alternatives.

Rule 8 Reservoir Pressure Monitoring

  1. Prior to regular production or injection an initial pressure survey shall be taken in each well.
  2. A minimum of one bottom-hole pressure survey per producing or injecting governmental section shall be measured annually. Bottom-hole surveys in paragraph (a) may fulfill the minimum requirement.
  3. The reservoir pressure datum will be 3000 feet subsea.
  4. Pressure surveys may consist of stabilized static pressure measurements at bottom-hole or extrapolated from surface, pressure fall-off, pressure buildup, multi-rate tests, drill stem tests, and open-hole formation tests.
  5. Data and results from pressure surveys shall be reported quarterly on Form 10-412, Reservoir Pressure Report. All data necessary for analysis of each survey need not be submitted with the Form 10-412 but must be available to the Commission upon request.
  6. Results and data from special reservoir pressure monitoring tests or surveys shall also be submitted in accordance with part (e) of this rule.

Rule 9 Gas-Oil Ratio Exemption

Wells producing from the Tabasco Oil Pool are exempt from the gas-oil-ratio limits of 20 AAC 25.240(b) so long as the provisions of 20 AAC 25.240(c) apply.

Rule 10 Pressure Maintenance Project

A pressure maintenance injection project must be initiated within six months after the start of regular production from the Tabasco Oil Pool.

Rule 11 Reservoir Surveillance Report

A surveillance report will be required after one year of regular production and annually thereafter. The report shall include but is not limited to the following:

  1. Progress of enhanced recovery project(s) implementation and reservoir management summary including engineering and geotechnical parameters.
  2. Voidage balance, by month, of produced fluids and injected fluids.
  3. Analysis of reservoir pressure surveys within the pool.
  4. Results and where appropriate, analysis of production logs, tracer surveys and observation well surveys.
  5. Results of well allocation and test evaluation for Rule 7 and any other special monitoring.
  6. Updated future development plans including an estimated development schedule, progress report and basis of timeline for the complete pool development.

Rule 12 Production Anomalies

In the event of oil production capacity restrictions at or from the Kuparuk facilities, all commingled reservoirs produced through the Kuparuk facilities will be prorated by an equivalent percentage of oil production, unless this will result in surface or subsurface equipment damage.

Rule 13 Administrative Action

Upon proper application, the Commission may administratively waive the requirements of any rule stated above or administratively amend this order as long as the change does not promote waste, jeopardize correlative rights, and is based on sound engineering principles.

DONE at Anchorage, Alaska and dated November 5, 1998.

David W. Johnston,
Chairman

Robert N. Christenson, P.E.
Commissioner

Camillé Oechsli
Commissioner

Conservation Order Index