STATE OF ALASKA
ALASKA OIL AND GAS CONSERVATION COMMISSION
3001 Porcupine Drive
Anchorage Alaska 99501-3192

Re:THE APPLICATION OF CIRI            )   Conservation Order No. 300
Production Company to present          )
testimony for classification of gas      )   West Fork Gas Field
pools and to prescribe pool rules        )   Sterling A Gas Pool
for development of the West Fork         )   Sterling B Gas Pool
Gas Field.                               )                
                                             October 7, 1992

IT APPEARING THAT:

1. By letter dated July 1, 1992, CIRI Production Company requested a public hearing to present testimony for establishing pool rules for development and operations in the West Fork Gas Field, located in T6N R9W Seward Meridian on the Kenai Peninsula.

2. Notice of public hearing to be held on August 14, 1992 was published in the Anchorage Daily News on July 14, 1992.

3. A hearing concerning the matter of the applicant's request was held in conformance with 20 AAC 25.540 at the office of the Commission, 3001 Porcupine Drive, Anchorage, Alaska 99501 at 9:00 a.m. August 14, 1992. The hearing record remained open until August 24, 1992 to allow submission of additional material supporting the petition.

FINDINGS:

1. Hydrocarbon gas was discovered in the King 1B well located in Section 21 T6N R9W Seward Meridian by Halbouty Alaska Oil and Minerals Company in September, 1960.

2. Subsurface data available at that time suggested the accumulation was restricted to the southwest quarter of Section 21.

3. The King 1B well produced gas from October, 1978 through October, 1985. The well was abandoned in September, 1986 due to persistent problems with sand and water production and hydrate formation.

4. The King 1B well produced a cumulative volume of approximately 1.6 Bcf of natural gas.

5. Oil and gas interests for the 160-acre tract on which the King 1B well is located reverted to the Bureau of Land Management (BLM) in November, 1986. Prior to that time, the oil and gas rights to the immediately surrounded acreage, including the balance of Section 21, were conveyed to Cook Inlet Region Inc. (CIRI).

6. CIRI Production Company (CPC), a wholly owned subsidiary of CIRI, drilled and completed the West Fork 1-21 well approximately 2,600 feet northeast of the King 1B well in Section 21 in January, 1991.

7. The West Fork 1-21 well encountered hydrocarbon gas within sandstones of the Sterling Formation which is are largely correlative with gas bearing sandstones in the King 1B well.

8. Regular production from the West Fork 1-21 well began in September, 1991.

9. CPC drilled and completed the West Fork 2-21 well approximately 2000 feet northeast of the West Fork 1-21 well in Section 21 in May, 1992.

10. The West Fork 2-21 well encountered hydrocarbon gas within gas bearing sediments which correlate with those in the West Fork 1-21 well.

11. No apparent permeability barriers exist between correlatable gas bearing intervals of the three wells drilled in Section 21.

12. CPC executed a compensatory royalty agreement with the BLM integrating their mutual interests in Section 21 in June, 1992.

13. The West Fork 2-21 well began regular production in June, 1992.

14. The vertical limits of the West Fork gas accumulation may be defined in the West Fork 1-21 well which contains representative sections of all known gas bearing sandstone intervals of the Sterling formation in the West Fork Gas Field.

15. The Sterling Formation in the West Fork Gas Field contains two destinct depositional units referred to by CPC as the Sterling A sands and Sterling B sands. Both units are composed of multiple productive sand horizons.

16. Average well spacing is approximately 320 acres. Reduced spacing is necessary to efficiently exploit multiple gas bearing zones within the Sterling A and Sterling B sands.

17. No additional development drilling is planned at this time. As producing zones deplete, wells will be recompleted in the undeveloped zones of the Sterling A sands and Sterling B sands.

18. Gas bearing sandstones of the Sterling formation may extend into Sections 15, 16, 20, 22, 27, 28 and 29 of T6N R9W SM.

19. Porosity averages 32%, permeability ranges from less than 0.1 to 400 millidarcy, and the average water saturation is estimated a 50%.

20. Initial reservoir pressure measured in West Fork 1-21 was 2035 psi at 4700 feet ss.

21. West Fork 1-21 was tested to a rate of 6.6 MMcf per day during a four point test and 10 MMcf/D at 4% drawdown during production testing.

22. Produced gas from the West Fork wells is 98.8% methane with a specific gravity of 0.56 (air=1) at separator conditions and a heat content of 1000 BTU/CF.

23. Productive life of the field is expected to be greater than 10 years.

24. Producing strings in each well are equipped with either a surface or subsurface safety valve to prevent uncontrolled gas flow.

25. Each well is equipped with a small diameter tubing string to circulate warm fluids to prevent hydrate formation and plugging of the tubing.

CONCLUSIONS:

1. It is appropriate to define gas pools and establish pool rules for development of the West Fork Gas Field.

2. The owners of oil and gas rights throughout the maximum projected area of the West Fork Gas Field have integrated their interests.

3. The two producing wells in Section 21 are expected to fully exploit this gas accumulation.

4. Two distinct depositional units are identified within the Sterling Formation in the West Fork Gas Field. These sands are locally called the Sterling A and Sterling B sands by the operator.

5. Well spacing less than 640 acres is necessary to effectively exploit the Sterling A and Sterling B sands.

6. Automatic safety valves are appropriate to prevent uncontrolled gas flow in the event of an accident.

7. Control of sand production and hydrate fromation is required to successfully exploit reserves in the West Fork Gas Field.

8. It is feasible to develop the Sterling A and Sterling B sands from the same wellbore by utilizing dual completion methods.

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

Seward Meridian

T6N R9W Section 15, 16, 20, 21, 22, 27, 28 and 29.

Rule 1 Field and Pool Name

The field is named West Fork Gas Field. Hydrocarbons contained within the Sterling Formation constitute two non-associated gas reservoirs called the Sterling A Gas Pool and the Sterling B Gas Pool.

Rule 2 Pool Definition

The West Fork Sterling A Gas Pool is defined as the accumulation of gas which is common to and correlates with the accumulation found in the West Fork 1-21 well between the measured depths of 4350 feet and 4700 feet. The West Fork Sterling B Gas Pool is defined as the accumulation of gas which is common to and correlates with the accumulation found in the West Fork 1-21 well between the meaured depths of 4860 feet and 5290 feet..

Rule 3 Well Spacing

Nominal 320-acre drilling units are established for the pools within the affected area. A pool may not be opened in a well closer than 1000 feet to any other well opened in the same pool. A pool shall not be opened in any well closer than closer than 1500 feet to the exterior boundary of the affected area or closer than 1500 feet from a boundary to a non-integrated ownership.

Rule 4 Commingling

Commingling of Sterling A and Sterling B gas pool production is not permitted. Commingling may be administratively approved upon proper application under 20 AAC 25.215.

Rule 5 Safety Valves

Each production tubing string or flow line must be equipped with a failsafe automatic safety valve system capable of preventing uncontrolled gas flow.

Rule 6 Administrative Action

Upon request the Commission may administratively amend this order so long as the operator demonstrates to the Commission's satisfaction that sound engineering practices are maintained and the amendment will not result in physical waste or the impairment of correlative rights.

DONE at Anchorage, Alaska and dated October 7, 1992.

David W. Johnston, Chairman
Alaska Oil and Gas Conservation Commission

Russel A. Douglass, Commissioner
Alaska Oil and Gas Conservation Commission

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