Commission report: November 2017

• On Nov. 6, the Alaska Oil and Gas Conservation Commission gave notice of a proposed change to the regulations covering the casing and cementing of wells. The proposed change would require well operators to set surface casing below the base of permafrost.

The commission will hold a hearing on the proposed change on Jan. 4, 2018.

• On Nov. 7, the AOGCC approved (Area Injection Order No. 2C.051) a request from ConocoPhillips Alaska Inc. to continue water injections at the Kuparuk River Unit 3S-06A well. The company reported a potential Tubing x Inner Annulus pressure communication on Aug. 21 while injecting gas and later confirmed gas communication. The communication was not observed during a 30-day water-alternating-gas period, and subsequent diagnostics, including a passing non-state witnessed Mechanical Integrity Test of the Inner Annulus, convinced the commission of the integrity of the well.

• On Nov. 8, the AOGCC approved (Conservation Order No. 76.35) a request from Hilcorp Alaska LLC for a spacing exemption for the Granite Point State 24-13RD2 well.

The proposed well would be an offshore, deviated oil development well located within 1,000 feet of the existing GPS 11-24RD well, completed in the Middle Kenai Oil Pool.

The commission found that a spacing exemption was required to maximize oil recovery and would not result in waste or jeopardize the correlative rights of nearby landowners.

• On Nov. 17, the AOGCC approved (Area Injection Order No. 2C.052) a request from ConocoPhillips to continue water injections at the Kuparuk River Unit 2Z-08 well.

The company reported a potential Tubing x Inner Annulus pressure communication to the commission on Oct. 10 while injecting gas and later confirmed gas communication. The communication as not observed during a 30-day water-alternating-gas monitoring period, and subsequent diagnostics including a passing non-state witnessed Mechanical Integrity Test of the Inner Annulus convinced the commission of the integrity of the well.

• On Nov. 17, the AOGCC denied (Docket Number CO-17-016) a request from Hilcorp to withdraw a directive that requires the company to provide notice to parties affected by a proposed administrative change at the Ninilchik unit in the Cook Inlet region.

Hilcorp wants to expand the extent of the Ninilchik Beluga/Tyonek Gas Pool. The revision would extend well spacing requirements into new areas, and the commission directed the company to provide notice to affected landowners and operators within 3,000 feet of the proposed expansion acreage. Hilcorp wanted the directive to be withdrawn.

• On Nov. 21, the AOGCC approved (Area Injection Order No. 2C.053) a request from ConocoPhillips to continue water injections at the Kuparuk River Unit 1E-11 well.

The company reported a potential Tubing x Inner Annulus pressure communication on Oct. 13 while injecting gas. The company confirmed gas communication. It was not observed during a 30-day water-alternating-gas period, and subsequent diagnostics including a passing state witnessed Mechanical Integrity Test of the Inner Annulus convinced the commission of the integrity of the well for continued water injections.

• On Nov. 21, the AOGCC approved (Area Injection Order No. 34.007) a request from Caelus Energy Alaska Inc. to conduct a high-pressure water injectivity test in the ODSN-27i and ODSN-32i injection wells at the Oooguruk unit in the waters off the North Slope.

Previous hydraulic fracture stimulations on the two wells showed that fractures could enter the confining zones for injection but not through them, even at pressures far exceeding those allowed by the existing area injection order. The 30-day test would allow the company to gauge the impact of higher pressures on the two injection wells.

Information provided by the company in its application convinced the commission of the safety of the proposed 30-day high-pressure injectivity test. If the test is successful, the company may decide to seek permission to expand the project to the entire development.

• On Nov. 29, the AOGCC imposed two civil penalties totaling $92,000 on Tolsona Oil and Gas Exploration LLC for violations related to the Tolsona No. 1 exploration well.

The commission imposed a $60,000 penalty against the company for failing to install appropriate gauges at the well and a $32,000 penalty for failing to provide monthly pressure reports. The commission also ordered to company to begin the application process for plugging and abandoning the exploration well before Dec. 14, 2017.

Tolsona Oil and Gas has 30 days to appeal the ruling to superior court.

• The AOGCC has set its public meeting schedule for the coming year.

The commission currently plans to meet on Jan. 3, Feb. 7, March 7, April 4, May 2, June 6, July 11, Aug. 1, Sept. 5, Oct. 3, Nov. 7 and Dec. 5. All meetings begin at 10 a.m.

- ERIC LIDJI