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Division of oil and gas pulls permits for some Pioneer unit wells
Kristen Nelson PNA News Editor
Work at the Pioneer coalbed gas prospect north of Anchorage has hit a snag. Unocal Alaska Resources, Ocean Energy Inc., the Department of Natural Resources Division of Oil and Gas and surface owners at well sites are in disagreement over surface use issues.
The division has revoked approval for wells — except the well presently being drilled and a well on state surface land — pending surface owners’ consent. A hearing has been scheduled on operations at the DA well, now being drilled, and bonds submitted must be resubmitted on a form provided by the state.
Drilling continues Kevin Tabler, land and government affairs manager for Unocal Alaska, told PNA Aug. 18 that drilling continues at the first well in the unit, a disposal well. According to state documents that well, the 1702-15DA, was spud Aug. 1 by operator Ocean Energy; operations began Aug. 2.
On Aug. 4 the division notified Unocal and Ocean Energy that they were in non-compliance with the terms of the unit plan of operations issued July 27 because the lessee had not certified to the division that the surface owner had been provided with a copy of the plan of operation for the owner’s property.
“Absent that certification,” Jim Haynes of the division told Unocal and Ocean Energy in an Aug. 6 letter, “we will accept a surety bond in the amount of $50,000. That bond will be used as security to the owner for payment of any damages that result from your operations.”
Tabler told PNA that Unocal provided the required bond but had not been able to reach agreement with surface land owners. Mineral owners, Tabler said, have the right to access, and surface owners have the right to damages — but damages, he said, can’t be evaluated until after the drilling operation.
Decision from Boyd On Aug. 17, division Director Ken Boyd, issued a decision that Ocean Energy, as operator, continues to be in violation of the unit plan of operations.
“Specifically,” Boyd said, “Ocean Energy has undertaken activities without surface owner consent.” In general, Boyd said in the letter, provisions of the lease and stipulations “require you to make an agreement with the private surface estate owner to pay him or her for any damages caused by your entering on the land.”
If such an agreement cannot be reached, the state will hold a hearing “and determine what surety bond should be posted to cover damages caused by your entry.”
Boyd also said the bonds provided by Unocal on Aug. 9 were not acceptable and provided the companies with an acceptable bond form.
Bonds provided “The state is holding a hearing pursuant to the statues and providing an opportunity for all sides to present their viewpoint and then they can make a decision as to whether there will be any damages or potential damages and then provide appropriate protection through bonding,” Tabler told PNA.
He also said $50,000 bonds had been provided for the first two drilling locations and that while the state is now disputing the form of the bonds, they did accept them.
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