STATE OF ALASKA

OIL AND GAS CONSERVATION COMMISSION
3001 Porcupine Drive
Anchorage, Alaska 99501-3192

Re:THE REQUEST OF FORCENERGY, INC for an       ) Disposal Injection Order No. 16
order allowing the disposal of Class II        ) West McArthur River 4D well
fluids by underground injection in the West    ) West McArthur River Unit
McArthur River Unit 4D well.                   )
                                                 September 3, 1998

IT APPEARING THAT:

1.By correspondence dated June 12, 1998, Forcenergy, Inc. requested authorization from the Alaska Oil and Gas Conservation Commission to inject Class II waste fluids into the West McArthur River Unit ("WMRU") 4D well.

2.The Commission published notice of an opportunity for public hearing in the Anchorage Daily News on June 18, 1998.

3.The Commission did not receive protest or a request for a public hearing.

FINDINGS:

1.Forcenergy, Inc. is the operator of the WMRU.

2.The Cook Inlet Region, Inc., Salamatof Native Association, Inc., Phillips Petroleum and the State of Alaska are offset owners within a one-quarter mile radius of the WMRU 4D well. Each has been duly notified of the proposed disposal plans.

3.The following wells penetrate the proposed disposal zone within a one-quarter mile radius of the WMRU 4D well: WMRU D-1, WMRU 1A, WMRU 3, WMRU 5, and Pan Am West Foreland Unit 2.

4.All the wells listed above were constructed in accordance with 20 ACC 25.030;each well has adequate cement coverage to protect freshwater aquifers.

5.Openhole wireline logs from the West Foreland Unit 2 well, located less than 2500 feet north of WMRU 4D, were used to analyze formation water salinity in the vicinity of WMRU 4D well.

6.Log data from the West Forelands Unit 2 well was analyzed consistent with recommended practices described in EPA publication "Survey of Methods to Determine Total Dissolved Solids Concentrations" (KEDA Project No. 30-956).

7.Log analyses of the West Forelands Unit 2 well indicate formation water salinity generally increases with depth, and that freshwater(i.e., water with TDS less than 10,000 mg/l) is present to a depth of approximately 4000 feet subsea in the vicinity of WMRU 4D well.

8.The depth to the base of freshwater appears about the same in the WMRU D-1 disposal well, located about one-mile northwest of the WMRU 4D well.

9.Water salinity in the disposal zone is about 20,000 mg/l based upon log analyses from adjacent wells.

10.The proposed disposal zone is within the Tyonek Formation between 5743' and 6305' measured depth("MD") in the WMRU 4D well. It consists of approximately 490 feet of porous and permeable coarse-grained clastic sediments, predominately sandstone in nature.

11.More than 150 of tuffaceous claystone, which serves as a confining zone within the Tyonek Formation, lies between the proposed disposal zone and the base of freshwater in the vicinity of the WMRU 4D well.

12.The WMRU 4 well was originally drilled to a depth of 11,875' MD in early 1998. The well was then plugged back and sidetracked to a depth of 6,243' MD and renamed the WMRU 4D well in June 1998.

13.Sidetrack operations involved placing a cement plug from total depth to 9,731' MD, setting a bridge plug at 5,960' MD and kicking out from the original wellbore just below the 9 5/8" shoe, at 5,743' MD and drilling to 6,243' MD.

14.The current WMRU 4D well is constructed with 20" conductor pipe driven to 120' MD, 13 3/8" casing set at 2,265" MD, 9 5/8" casing set at 5,743' MD and 7 5/8 liner set at 6,243' MD a string of 2 7/8" tubing is set at 5,646' MD, and a packer at 5,572' MD.

15.An evaluation of the cement bond logs run in the WMRU 4D indicates good bonding throughout the logged interval from about 4640' MD to about 5630' MD.

16.The estimated average surface injection pressure will be between 3,000 psi and 3,300 psi, with a maximum estimated injection pressure of 4,000 psi.

17.The average anticipated injection rates for drilling fluids is 2,000 to 3,000 barrels per day ("BPD"). Produced water will be injected at rates up to 6,000 BPD. Average annual injected volume is expected to be one to two million barrels.

18.The estimated radius of invasion around the wellbore after 10 years of disposal at 1,500,000 barrels per year was calculated at 630 feet.

19.Waste drilling mud, diluted drilling mud, drill cuttings slurry, completion fluids, produced water and other wastes derived from drilling, completion and production activities are acceptable Class II fluids.

20.Fracture simulation, using rates and pressure exceeding proposed conditions in the WMRU 4D well, indicate that induced fractures would be confined to the disposal zone.

21.The operator plans to monitor the 7 5/8" by 2 7/8" tubibg annulus pressure and report the results monthly on the Monthly Inject Report.

22.A mechanical integrity test is required according to 20 AAC 25.412 prior to the start of disposal.

CONCLUSIONS:

1.The approval of disposal injection operations at WMRU 4D will not jeopardize correlative rights.

2.Permeable strata which reasonably can be expected to accept injection fluids at pressures less than the fracture pressure of the confining strata are present in the WMRU 4D well between 5743 feet to 6305 feet MD.

3.Aquifers below 4000 feet subsea in the WMRU 4D well do not qualify as freshwater.

4.No application for a freshwater aquifer exemption is required for the proposed disposal injection project in the WMRU 4D well because the total dissolved solids content for formation fluids exceeds 10,000 mg/l within the proposed disposal zone.

5.Adequate confining zones exist above the disposal zone in the WMRU 4D well to prevent disposal fluids from entering overlying freshwaters.

6.Disposal fluids injected at WMRU 4D will consist of Class II waste generated from drilling, completion and production operations.

7.WMRU 4D is constructed in conformance with the requirements of 20 AAC 25.412.

8.Well integrity must be demonstrated in accordance with 20 AAC 25.412 prior to initiation of disposal operations in WMRU 4D.

9.Routinely monitoring operational parameters at the WMRU 4(D) for indications of abnormal operating conditions will help insure that disposed fluids remain confined to the disposal zone.

10.Disposal injection operations in the WMRU 4D well will be conducted routinely at pressures less than the disposal zone parting pressure.

NOW, THEREFORE, IT IS ORDERED THAT:

Rule 1 Authorized Injection Strata for Disposal

Class II fluids may be injected in conformance with 20 AAC 25 for the purpose of disposal into the Tyonek Formation interval between the measured depths of 5743 feet and 6305 feet in WMRU 4D well.

Rule 2 Demonstration of Tubing/Casing Annulus Mechanical Integrity

A schedule must be developed and coordinated with the Commission that ensures that the tubing-casing annulus is pressure tested prior to initiating disposal and at least once every four years. A test surface pressure of 1500 psi or 0.25 psi/ft. multiplied by the vertical depth of the packer, whichever is greater, but not to exceed a hoop stress greater than 70% of the minimum yield strength of the casing is to be used. The test pressure must show stabilizing pressure and a decline of less than 10% in a thirty-minute period. The Commission must be notified at least twenty-four (24) hours in advance to enable a representative to witness pressure tests.

Rule 3 Well Integrity Failure

Whenever 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, and obtain Commission approval of a plan for corrective action and obtain Commission approval to continue injection.

Rule 4 Step Rate Test

Prior to sustained injection the operator shall perform a step rate test to determine a formation fracture gradient and optimum injection pressure.

Rule 5 Administrative Action

Upon request, the Commission may administratively amend any rule stated above as long as the operator demonstrates to the Commission's satisfaction that sound engineering practices are maintained and the amendment will not result in an increased risk of fluid movement into a freshwater aquifer.

DONE at Anchorage, Alaska and dated September 3, 1998.

David W. Johnston, Chairman

Robert N. Christenson, Commissioner

Camille Oechsli, Commissioner

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