3001 Porcupine Drive
Anchorage, Alaska 99501-3192

Re:The APPLICATION OF ARCO ALASKA,Inc.            ) Disposal Injection Order No. 18
for disposal of Class II oil field                )
wastes by underground injection                   ) Colville River Unit
in the Colville River Unit well WD-2.             ) Colville River Unit Well WD-2

                                                    April 19, 1999


1. By letter dated November 1, 1998, ARCO Alaska, Inc. ("ARCO") requested authorization from the Alaska Oil and Gas Conservation Commission ("Commission") to inject Class II waste fluids in the Colville River Unit well WD-2. Meetings were also held at ARCO on November 10, 1998.

2. The Commission published notice of opportunity for public hearing in the Anchorage Daily News on November 3, 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 a.m. on December 3, 1998. Concurrently, the commission heard testimony to establish pool rules for the Colville River Field, Alpine Oil Pool.


1. ARCO is the operator of the Colville River Unit ("CRU"). There are no other operators within a one-quarter mile radius of the proposed disposal injection project.

2. The state of Alaska is the only surface owner within a one-quarter mile radius of the proposed disposal injection project.

3. The Colville River Unit WD-2 disposal well ("CRU WD-2") will be the initial well drilled from the first of two development pads used to develop the Alpine Oil Pool.

4. Bergschrund #1 and CD1-22 are the only wells within one-quarter mile of the CRU WD-2 well. Bergschrund #1 does not penetrate the injection or arresting zones but does encounter the top of the confining zone. Well CD1-22 does not penetrate the confining zone. ARCO does not anticipate drilling any other well within a one-quarter mile radius of the CRU WD-2 penetration of the disposal injection intervals.

5. The proposed disposal injection intervals are the Permo-Triassic Ivishak and the Triassic Sag River Formations, which may be defined in the Sohio Nechelik #1 well between 8432 feet and 9540 feet measured depth. The Sohio Nechelik #1 well was cored throughout the Ivishak Formation, and appears to contain a typical and representative section of the disposal intervals.

6. The fluvial sandstones and conglomerates of the lower proposed injection zone in the Ivishak Formation have a gross thickness of 600 to 700 feet and a net thickness of approximately 400 feet (16% or greater porosity) and is expected to be the predominant injection zone in the CRU area.

7. The shallow marine sandstones of the upper proposed injection zone in the Triassic Sag River Formation have gross thickness of 50 feet and a net thickness of 35 feet (porosity greater than or equal to 19% and average permeability of 120 millidarcies) in the CRU area.

8. The upper confining zone consists of approximately 1300 feet of siltstones and shales with very low porosity and permeability within the Jurassic Kingak Formation. The lower confining zone consists of between 200 feet and 250 feet of silty shales within the Permian Kavik Formation.

9. Approximately 350 feet to 400 feet of shale, siltstone, and limestone of the Triassic Shublik Formation separate the Ivishak from the Sag River Formation in the Colville River Delta area.

10.ARCO plans to run cement quality logs within the surface casing and long string of CRU WD-2 well.

11.The CRU WD-2 completion design consists of a 16" conductor set at 117 feet measured depth ("MD"), 9 5/8" surface casing set at 2800 feet MD and cemented to surface, and a tapered completion string consisting of 7 5/8" to 1200 feet and 7" to a total depth of 10,322 feet MD (9900 feet TVDss).

12.ARCO intends to test tubing and casing integrity according to 20 AAC 25.412 prior to initiating disposal operations.

13.ARCO intends to use the CRU WD-2 for disposal of oil and gas waste fluids and does not envision using it for disposal of muds and cuttings, except occasionally.

14.ARCO expects to have a ball mill capable of grinding and washing gravel on location. They propose to wash gravel and use it as maintenance gravel and dispose of muds and cuttings that are not recyclable through the annuli of wells authorized by the Commission for that purpose under 20 AAC 25.080.

15.ARCO expects to dispose of approximately 4 million barrels of waste associated with well workover, stimulation and production operations and 14 million barrels of produced water.

16.Average injection rate is expected to initially be up to 300 barrels per day ("BPD"). This rate is expected to increase when source waterflood breakthrough occurs in the Alpine Oil Pool, about year five and continue to climb to a maximum of 10,000 BPD at year fourteen. Before the rate reaches 10,000 BPD, water-conditioning equipment will be installed for the purpose of enhanced oil recovery and the produced water will be redirected into the oil reservoir. The average injection rate is expected to drop at that time to the 300 - 500 BPD range.

17.Maximum operating pressure will vary depending on the condition of the injection zone. Surface pressure is expected to range from 1700 to 3200 psi.

18.ARCO expects the disposal zones to progressively become plugged in the region around the wellbore. ARCO expects to maintain injectivity by occasionally stimulating or fracturing past the restriction when performance indicates the interval is plugged.

19.ARCO will conduct periodic surveillance of disposal operations through the use of temperature surveys, pressure transient tests, step rate tests, thermal decay time logs, wellbore tracer surveys, disposal rate and pressure monitoring, mechanical integrity tests, and tagging effective depth to determine fill buildup.

20.Reservoir surveillance techniques will also be used for tracking near wellbore fluid movement, establishing dimensions of disposal fracture, of disposal storage volume and detecting changes in disposal zone characteristics.

21.Calculated water salinity ranges from 15,000 to 18,000 milligrams per liter ("mg/l") total dissolved solids ("TDS") throughout the Cretaceous and older stratigraphic section in the Colville Delta area. Water samples collected from drill stem and production testing of several wells in the general Colville Delta area yielded 18,150 to 24,300 mg/l TDS.

22.The U.S. Environmental Protection Agency ("EPA") issued a Class I disposal permit for the CRU WD-2 well on February 3, 1999.


1. The requirements of 20 AAC 25.252(c) have been met

2. There are no underground sources of drinking water ("USDWs") underlying the Colville River Unit.

3. When operating under this order waste fluids authorized for disposal in the Colville River Unit must consist exclusively of Class II waste fluids.

4. Permeable strata that reasonably can be expected to accept the total volume of disposal fluids anticipated for this project are present in the Ivishak and Sag River Formations within the Colville River Unit.

5. Waste fluids will be contained within appropriate receiving intervals by confining lithology, cement isolation of the perforated intervals and operating parameters. No disposal will be authorized before the Commission evaluates cement bond logs and cement records to determine the adequacy of the cement to isolate disposal intervals.

6. Disposal injection operations in the CRU WD-2 well will be conducted at rates and pressures below those required to fracture the confining zones defined in this order.

7. Periodic stimulation of the disposal interval will be required to place solids into the formations. Fractures or disaggregation of the clogged pores and rock matrix are intended to provide pathways to transport waste fluids to undamaged storage within the disposal zone. Fracture growth can be contained within the disposal interval by controlling the rate and volume of injection below the level required to fracture the confining intervals.

8. Surveillance of disposal operations and demonstration of mechanical integrity every four years will provide information to ensure waste fluids are contained within the disposal interval.

9. Disposal injection operations in the Colville River Unit will not cause waste, jeopardize correlative rights, or impair ultimate recovery.


Rule 1 Authorized Injection Strata for Disposal

Class II oil field waste may be injected into the Colville River Unit WD-2 well, in conformance with Alaska Administrative Code Title 20, Chapter 25, for disposal into strata that correlates with the 8432 feet to 9540 feet measured depth interval in the Sohio Alaska Petroleum Company Nechelik #1 well.

Rule 2 Demonstration of Tubing/Casing Annulus Mechanical Integrity

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

Rule 3 Disposal Fluids

Only Class II fluids may be injected into the CRU WD-2 well while operating under the authority of this order. ARCO shall advise the Commission if it expects to initiate routine disposal of muds and cuttings in the well.

Rule 4 Well Integrity Failure

Whenever disposal rates, 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 5 Surveillance

A baseline temperature survey from surface to total depth, initial step rate test to pressures equal or exceeding maximum injection pressure and pressure falloff are required prior to initiation of regular disposal injection. Regular fill depth tags and surveillance logging are required at least once annually or as warranted following consultation with the Commission. Operating parameters including disposal rate, disposal pressure, annulus pressures and volume of solids pumped must be monitored and reported according to requirements of 20 AAC 25.432.

An annual performance report will be required including rate and pressure performance, surveillance logging, fill depth, survey results, and volumetric analysis of the disposal storage interval, estimate of fracture growth, if any, and updates of operational plans. Report submission is due on or about July 1.

Rule 6 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 allow waste fluids to escape from the disposal zone.

DONE at Anchorage, Alaska and dated April 19, 1999

Robert N. Christenson, P.E., Chairman
Alaska Oil and Gas Conservation Commission

Camillé Oechsli, Commissioner
Alaska Oil and Gas Conservation Commission

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

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