|
AOGCC begins hearing on North Cook Inlet unit expansion Legal, logistical disputes take up most of first two
days as Danco-Allen team presents testimony Kristen Nelson PNA Editor-in-Chief
The Alaska Oil and Gas Conservation Commission, more used to hearing from geologists and petroleum engineers, had battling attorneys on its hands March 13-14 as it began hearing testimony on the petition of Danco Inc. and Monte Allen to expand the North Cook Inlet unit.
The basis of the dispute is the physical limits of the North Cook Inlet field — but a large part of two days of hearing focused on legal and logistical issues: should testimony not pre-filed be accepted; did agency records contain information they should have contained; how many attorneys should be talking for the same side at one time?
The matter was remanded to the commission last year by the Alaska Supreme Court for a hearing on the merits. The commission had declined to hear evidence in 1996 because the petition was filed the day before the leases expired. The commission said then that any decision it made would be moot because of the expiration; the court disagreed.
The state dramatically increased its estimate of gas reserves at the field in 1996, and Allen and Danco said they believed the expanded reserves indicated the tracts to the north, where they held overriding royalty interests, were being drained by field production. They petitioned the commission for addition of the tracts to the North Cook Inlet unit after the working interest owners in the two northern tracts, Phillips Petroleum Co. and ARCO Alaska Inc., refused to add the tracts to the unit. Much legal wrangling It was not a typical commission hearing.
Attorneys for the two sides had told the commission that the hearing should be a two-day affair, but witnesses for Danco and Allen barely completed testifying March 13 and 14, and cross examination by Phillips Alaska, which has not yet presented its case, was not complete. The two sides had not yet been able to agree on a continuation date when this issue of PNA went to the printer.
There was a pre-hearing conference in October and the parties agreed to pre-file testimony and exhibits. At the hearing, those testifying were to adopt their testimony and provide an oral summary. The commission would ask questions and the parties would cross examine.
As the hearing started, the Danco-Allen team introduced testimony not pre-filed and wanted their lead witness, petroleum engineer James Givens, to provide additional testimony. Bart Rozell, representing Phillips, objected to the introduction of exhibits not included in pre-filed testimony.
C.R. Kennelly, one of two attorneys representing Danco-Allen, wanted the commission to look at confidential Phillips materials which, he said, had been requested by his clients but not provided by Phillips.
Rozell told the commission that Givens and David Lappi, both witnesses for the petitioners, identified materials they wanted at Phillips’ Kenai offices last year. Phillips copied the materials and sent them to its Anchorage office, but Givens refused to sign a confidentiality agreement; the materials were never picked up.
In response to Rozell’s objections to new documents being added, Kennelly told the commission that the Danco-Allen group was “trying to make a record here if this proceeding goes forward.”
The parties also disagreed on inclusion of materials about the deeper oil zone, originally called Sunfish and now called Tyonek Deep. There is no oil produced from the North Cook Inlet unit. Kennelly told the commission that the order creating the North Cook Inlet unit referred to all hydrocarbons in the unit, and that the deep oil zone was relevant. Commission’s records questioned At one point in his testimony, Givens said he didn’t know where a well was perforated because that information was not available in the commission’s records. He said he had asked for some information himself — only part of which was available — and been told by Lappi and others on the Danco-Allen team that the information was not available from the commission.
That brought some sharp questions from commissioners who sent commission staff to verify that the information was in its files and was also contained on a disk of information provided by the commission to both parties. The commission also noted that it had never received any notice from the Danco-Allen group that there was a problem in getting information from the commission.
The parties reached agreement on admission of new exhibits, although Rozell told the commission that the Danco-Allen team was presenting new arguments not included in its pre-filed testimony and said Phillips would have to prepare and perhaps call new witnesses to answer those new arguments.
| 