STATE OF ALASKA

OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive


Anchorage, Alaska 99501-3192

Re:	The REQUEST OF MARATHON        ) Disposal Injection Order No. 11
	OIL COMPANY to dispose of      )
	Class II oil field fluids by   ) Kenai Unit Well No. 11
	underground injection in the   ) Kenai Unit
	Kenai Unit 24-7 well

                                         November 21, 1996

IT APPEARING THAT:

1. Marathon Oil Company by correspondence dated September 16, 1996 made application to the Alaska Oil and Gas Conservation Commission (AOGCC) for authorization to inject Class II waste fluids into the Kenai Unit No 24-7 (KU 24-7) well.

2. The AOGCC requested a modification to the original application on September 25, 1996. Marathon Oil Company provided the requested information on October 17, 1996.

3. Notice of an opportunity for public hearing was published in the Anchorage Daily News on October 26, 1996.

4. Marathon Oil Company provided revised operational parameters for the proposed disposal project and additional information regarding potential fracture development on November 6, 1996.

5. No protest or request for a public hearing was timely filed.

FINDINGS:

1. Cook Inlet Region Inc. and Salamantof Village are surface owners within a one-quarter mile radius of the KU 24-7 and have been duly notified of the proposed plans.

2. Marathon Oil Company is the operator of the Kenai Unit. There are no other operators present within a one-quarter mile radius of the proposed KU 24-7 disposal injection project.

3. The Kenai Unit No. 33-7 (KU 33-7) well penetrates the proposed injection zone within a one-quarter mile radius of the KU 24-7 well.

4. KU 33-7 has 13 3/8-inch surface casing set at 2025' measured depth and cemented to surface. Production casing is 9 5/8-inch pipe set at 6529' measured depth and cemented up to 3950' measured depth equivalent to 3515' TVD subsea.

5. KU 24-7 was drilled to a total measured depth of 5820', equivalent to 4796' true vertical depth.

6. The Sterling Formation consists of Pliocene aged, massively bedded, predominately coarse grained, fluvial deposits and is present within the KU 24-7 from above the surface casing shoe at 2003' measured depth to total depth.

7. The proposed disposal injection zone consists of three highly porous and permeable, and pressure depleted sandstones that are present from 4400' to 4710' measured depth (approximately 3720' to 3960' true vertical depth) in KU 24-7.

8. The production and Class II disposal injection history of Kenai Unit Sterling Formation gas reservoirs similar to the 4400' to 4710' measured depth interval in KU 24-7 indicates the sandstones are highly permeable.

9. 40 CFR 147.102(b) (1) (c) exempts all underground sources of drinking water (USDWs) at depths greater than 1300' below ground level and extending one quarter-mile beyond the boundaries of the Kenai Unit,

10. Approximately 2400 true vertical feet of Sterling Formation sediments separate the proposed disposal injection zone in KU 24-7 from the base of the non-exempt USDWs in the Kenai Unit. This interval contains an aggregate thickness of more than 450 true vertical feet of impermeable confining zone shale lithologies.

11. KU 24-7 has 13 3/8-inch surface casing string set at 2003' measured depth and cemented to the surface.

12. The production string in KU 24-7 consists of 9 5/8-inch casing set at 5801' measured depth, cemented to at least 3250' measured depth.

13. KU 24-7 will meet the test requirements of 20 AAC 25.030 and 20 AAC 25.412 prior to initiating disposal injection. 14. Two strings of three and 1/2-inch tubing are installed in KU 24-7 with a dual packer set at 4313' and a single packer set at 4679' measured depth.

15. Cement evaluation tools run in KU 24-7 indicate good to excellent cement bond from total depth to at least 3250' measured depth.

16. The operator will demonstrate mechanical integrity pressure testing KU 24-7 prior to initiating disposal operations.

17. Disposal fluids will consist of fluids associated with drilling, production, and workover operations. Typical fluids will include, produced fluid, drilling and completion fluids, equipment wash water, drilling mud, cuttings, and NORM scale.

18. Well KU 24-7 will be operated intermittently, as needed, on a weekly basis. The operator expects to run the operation 5 days per week, approximately 12 hours per day under normal conditions.

19. Maximum injection rates are expected to be as high as 7200 barrels per day. Average injection rates are estimated to be 1000 barrels per day.

20. Estimated average surface injection pressure will be 1600 psi. and maximum will be less than 2400 psi, limited by pump working pressure and safety relief valve pressure.

21. The estimated injection pressure parameters for KU 24-7 are based on previous disposal well tests and their nominal performance during disposal operations.

22. A three-dimensional hydraulic fracture simulation with a 500,000 barrel disposal volume using operational parameters and fluid types described in the application, predicted the proposed KU 24-7 disposal project will induce a fracture up to 650' high (approximately to 3200' TVD, 3850' MD) 1900' below the base of the nonexempt aquifer in the Kenai Unit. Over 265' of confining above the fracture are expected to prevent movement of disposal fluids into nonexempt aquifers.

23. The operator will monitor disposal performance using instantaneous shut in pressure plots versus cumulative disposal, well head pressure trends, and disposal rates. These data will be evaluated relative to modeling results to qualitatively track fracture height and disposal placement.

24. The operator will monitor the casing-tubing annulus pressure on the disposal well and report the results on the Monthly Injection Report. Production wells annuli are monitored routinely to confirm integrity.

CONCLUSIONS:

1. The approval of disposal injection operations at KU 24-7 will not jeopardize correlative rights.

2. Permeable strata which reasonably can be expected to accept injected fluids are present in the interval from 4400' to 4710' measured depth in KU 24-7.

3. The disposal interval, 4400' to 4710' measured depth, in KU 24-7 is approximately 2420 true vertical feet below the base of the deepest non-exempt USDW in the Kenai Unit.

4. More than 450 vertical feet of impermeable confining zone lithologies are present in KU 24-7 between the top of the proposed disposal injection zone and the base of the deepest non-exempt USDW.

5. Disposal fluids injected at KU 24-7 will consist exclusively of Class II waste generated from drilling, completion, and production operations.

6. KU 24-7 is constructed in conformance with the requirements of 20 AAC 25.030 and complies with 20 AAC 25.412.

7. Well integrity will be demonstrated in KU 24-7 in accordance with 20 AAC 25.412.

8. Operational parameters will be monitored routinely at the KU 24-7 for indications of abnormal pressure and rate conditions.

9. Disposal injection operations in the KU 24-7 will cause fracturing of some of the low stress depleted sands and shales above the disposal interval. Over 350' of confining shales and numerous sands will prevent movement of disposal fluids into nonexempt aquifers.

10. Cement evaluation logs and well records demonstrate the KU 24-7 well and the adjacent KU 33-7 well have adequate cement behind casing to properly contain fluids within the disposal injection zone; neither well should serve as a conduit to the surface.

11. The requirements of 20 AAC 25.252 have been met.

NOW, THEREFORE, IT IS ORDERED THAT:

Rule 1 Authorized Injection Strata for Disposal.

Class II oil field fluids may be injected in conformance with Alaska Administrative Code Title 20, Chapter 25, for the purpose of disposal into the Sterling Formation interval from 4400' to 4710' measured depth in KU 24-7.

Rule 2 Demonstration of Tubing/Casing Annulus Mechanical Integrity

The tubing/casing annulus must be tested prior to the start of injection and at least every four years thereafter for mechanical integrity in accordance with 20 AAC 25.412. The Commission must be notified at least 24 hours prior to these tests so they may witnessed.

Rule 3 Well Integrity Failure

Whenever disposal rates and/or operating pressure observations or pressure tests indicate pressure communication or leakage of any casing, tubing or packer, the operator must notify the Commission on the first working day following the observation, obtain Commission approval of a plan for corrective action and obtain Commission approval to continue injection.

Rule 4 Administrative Action

Upon request, the Commission may administratively revise and reissue this order upon proper showing that any changes are based on sound engineering practices and will not result in an increased risk of fluid movement into an underground source of drinking water.

DONE at Anchorage, Alaska and dated November 21, 1996

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

Tuckerman Babcock, Commissioner
Alaska Oil & Gas Conservation Commission

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