AOGCC report: December 2016

•On Nov. 29, the Alaska Oil and Gas Conservation Commission approved (Area Injection Order No. 6.013) a request from Hilcorp Alaska LLC to amend Area Injection Order No. 6.013 to continuing allowing water only injections at the Granite Point State 18742 13RD well through the end of 2018, extended from the end of 2016.

•On Dec. 8, the AOGCC approved (Area Injection Order No. 2C.041) a request from ConocoPhillips Alaska Inc. to continue water only injection at the Kuparuk River unit 2K-20 well. In October, the company reported a potential Tubing (T) x Inner Annulus (IA) pressure communication while injecting natural gas. The company switched the well to water-only injection for 30 days, during which time the communication wasn’t observed. A mechanical integrity test convinced the AOGCC of the safety of the well.

•The AOGCC has scheduled a hearing (Docket No. OTH 16-36) on Jan. 17 to determine if Aurora Gas LLC “has complied with all the provisions of the laws of the State of Alaska and the regulations, rules and orders of the AOGCC in the drilling, operations, maintenance, repair and abandonment of each well and the clearance of the location, or has not filed with the AOGCC all notices and records required by the AOGCC.” The commission made the decision to hold the hearing “on its own motion” after receiving notice that Aurora would no longer be bonded after Jan. 31.

•On Dec. 19, the AOGCC approved (Area Injection Order No. 2C.042) a request from ConocoPhillips to continue water only injection at the Kuparuk River Unit No. 1L-22 well. ConocoPhillips reported a potential Inner Annulus pressure communication on Aug. 9, 2016. Subsequent tests convinced the AOGCC of the integrity of the well.

•On Dec. 19, the AOGCC rescheduled a hearing to review proposed amendments to its regulations. The meeting will now occur in March 2017, rather than on Jan. 10.

•On Dec. 22, the AOGCC approved (Other Order No. 112A) a request from ConocoPhillips Alaska Inc. to set the meter allocation factor at 1.0 for the GMT-1 project. After a hearing about the matter on Nov. 17, the commission held the record open to allow ConocoPhillips to respond to questions asked during the hearing and to allow potentially affected landowners to provide comments. The commission received comments from the U.S. Bureau of Land Management, Arctic Slope Regional Corp., ConocoPhillips, the state Department of Natural Resources and the state Department of Revenue. The BLM and ASRC favored “establishing the meter factor for the GMT1 metering system at 1.0,” while DNR and DOR “did not object to establishing the meter factor for the GMT1 metering system at 1.0,” according to the AOGCC.

•On Dec. 27, the AOGCC denied (Conservation Order No. 341F.003) a request from BP Exploration (Alaska) Inc. for a waiver of the rule requiring “an open- or cased-hole neutron log to be run, in certain portions of the pool, on newly drilled wells prior to sustained production for the purpose of gas oil contact” at the Prudhoe Oil Pool.

In reviewing the PBU 15-16C sidetrack, the AOGCC determined that the well design would accommodate a neutron log. Additionally, since it has been six years since direct measurements of the gas oil contact had been made in the relevant portion of the pool, the commission felt it was inappropriate to grant BP a waiver on the logging rule.

•On Dec. 30, the AOGCC approved (Area Injection Order No. 2B.015 Cancellation) a request from ConocoPhillips to cancel Area Injection Order No. 2B.015.

The commission approved the Area Injection Order in September 2006, a few months after the Kuparuk River Unit 1Y-05 well “developed a production casing leak above the packer.” The commission amended the order in October 2008. The order allowed ConocoPhillips to continue water injections at the well, under certain conditions.

ConocoPhillips conducted workover operations at the well in November 2016 and repaired the casing leak, making the Area Injection Order no longer applicable.

•In late December, the AOGCC released public files for two exploration wells completed in late 2014: the Kitchen Lights Unit No. 5 well and the Olson Creek No. 2 well.

Furie Operating Alaska LLC drilled the 11,800-foot KLU No. 5 well in the central block of its offshore Kitchen Lights unit in September 2014. The company described the well as a dry hole in a plan of development for the unit submitted in November 2014.

The well permit is 214-072.

Cook Inlet Energy LLC drilled the 11,589-foot deviated Olson Creek No. 2 well on a pair of Alaska Mental Health Trust leases on the west side of Cook Inlet, north of the village of Tyonek.

According to a well completion report included in the file, the presence of natural gas was “insufficient to measure” during a flow test at the well in early October 2014.

The two Olson Creek exploration wells proved to be disappointing, prompting the company to take a $13.4 million write off. In December 2014, Carl Giesler, who was then president of Cook Inlet Energy’s parent company Miller Energy Resources Ltd. said, “Simply put, our operational credibility is low at best and we get that.” Miller subsequently filed for bankruptcy protection and re-emerged as Glacier Oil & Gas Corp.

The well permit is 214-113.

- ERIC LIDJI