ADMINISTRATIVE APPROVAL NO. 044.074
Re: The Application of XTO Energy Inc. for the Drilling and Operation of the MGS C41-23LN Well in the Middle Ground Shoal Field
Mr. George A. Cox
XTO Energy Inc.
810 Houston Street
Fort Worth, Texas 76102-6298
Dear Mr. Cox:
XTO Energy Inc., by application dated November 22, 2004, and received by the Alaska Oil and Gas Conservation Commission (“Commission”) on November 30, 2004, requests approval to drill and operate the Middle Ground Shoal (“MGS”) C41-23LN production well within the Hemlock Formation, which is assigned to MGS Oil Pool E, F and G. This horizontal sidetracked well will be the fourth producer open to the pool in the NW ¼ of Section 14, and the third producer open to the pool in the NE ¼ of Section 14, T8N, R13W, Seward Meridian (“SM”). MGS C41-23LN is being drilled and completed to access reserves that are not being drained by existing wells in this structurally complex portion of the MGS Field.
MGS C41-23LN will lie entirely within State Lease ADL 018756. The total depth of the well will lie within 150 feet of the property line between State Lease ADL 018756 and adjacent State Lease ADL 018754. However, ownership and landownership do not change across this property line. MGS C41-23LN will approach within approximately 300 feet of offset production well MGS A34-14 LW within the HN interval of the Hemlock Formation. However, the HN tends to have low porosity and permeability, and the close proximity of the wells is not expected to adversely affect production. MGS C41-23LN does not closely approach offset injection well MGS A33-11LS within the same fault block.
Conservation Order No. 44 (“CO 44”) governs the MGS Field. Rule 1(a) of CO 44 specifies a 500-foot minimum distance to any lease line where ownership changes, and Rule 1(b) specifies that no more than two oil completions shall be allowed in any governmental quarter section. Rule 6 of CO 44 states that the Commission may authorize, as an administrative matter and without notice or hearing, the drilling of additional wells not otherwise authorized by CO 44 for producing purposes at any location.
Administrative approval is appropriate for a waiver of well spacing requirements specified in CO 44. Notice and public hearing are not required for this spacing exception application as the well will lie entirely within State Lease ADL 018756, and will be located more than 500 feet from any lease lines where ownership changes. Correlative rights will not be jeopardized.
The Commission has determined drilling and operation of MGS C41-23LN will enhance recovery, will not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. The Commission hereby approves the drilling and operation of the Middle Ground Shoal MGS C41-23LN well as proposed.
DONE at Anchorage, Alaska and dated December 16, 2004.
John K. Norman
Daniel T. Seamount, Jr.