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AOGCC tentatively schedules August hearing on West Foreland gas well
Kristen Nelson, Petroleum News editor-in-chief
The Alaska Oil and Gas Conservation Commission has tentatively scheduled a hearing for Aug. 14 at 9 a.m. in response to a request from Forest Oil to make permanent the existing temporary well spacing exception for the West Foreland No. 1 well, and to approve an allocation of production from the well among the royalty owners of the gas.
The commission granted temporary well spacing in July 2000 and April 2001. At issue in a commission hearing held in 2000 was how gas from the well would be allocated to adjacent leaseholders. The well is on federal oil and gas lease A-035017 and is approximately 384 feet from the boundary between that lease and state oil and gas lease ADL 359112, close enough that the well on one lease would produce gas from both leases. Commission regulations require that a gas well cannot be within 1,500 feet of a property line unless the owners are the same on both sides of the line. The holder of the leases was the same, but the landowners were different: the state of Alaska on one lease and Cook Inlet Region Inc. and the U.S. Bureau of Land Management on the other. State, feds negotiating The state and federal agencies told the commission they were attempting to negotiate an agreement to allocate a share of the gas production to the state lease.
Forcenergy was the leaseholder in 2000, and it proposed establishing an escrow account to hold royalty payments from the well until an agreement could be reached.
The commission granted a spacing exception allowing Forcenergy to produce from the well until Nov. 1, 2001, and agreed with Forcenergy's plan to establish an escrow account. The commission also required Forcenergy to conduct production testing and provide the commission with results to support "a reasonable inference" as to the proportion of the gas underlying each of the leases.
Forcenergy applied in November 2000 to amend the conservation order. Forest Oil succeeded to Forcenergy' interest in the leases, and attended a January 2001 hearing, after which the commission made minor changes to the escrow account and extended the spacing exception until July 1, 2003. Forest wants spacing exception permanent In its current request, Forest has asked that the spacing exception be made permanent, and asked the commission to approve an allocation of 58 percent to the federal lease and 42 percent to the state lease. The commission said that upon approval of an allocation of production, it will order disbursement of the funds in the escrow account.
The commission said that if it does not receive a request for a hearing by July 21, it will consider issuance of an order without a hearing.
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