Alaska Oil and Gas Conservation Commission report: October 2017

• On Oct. 5, the Alaska Oil and Gas Conservation Commission approved (Area Injection Order No. 2C.047) a request from ConocoPhillips Alaska Inc. to continue water-only injection at the Kuparuk River Unit No. 1E-17 well. The company reported a potential Tubing x Inner Annulus pressure communication on April 15, 2016. Subsequent diagnostics and monitoring including a passing non-state witnessed Mechanical Integrity Test of the Inner Annulus convinced the commission of the integrity of the well.

• On Oct. 5, the AOGCC approved (Area Injection Order No. 2C.048) a request from ConocoPhillips to continue water injection at the Kuparuk River Unit No. 2M-37 well.

The company reported a potential Inner Annulus by outer annulus pressure communication on Aug. 7. Subsequent diagnostics including a passing state witnessed Mechanical Integrity Test convinced the commission of the integrity of the well.

• On Oct. 10, the AOGCC approved (Area Injection Order No. 2C.049) a request from ConocoPhillips to continue water-alternating-gas injection at the Kuparuk River Unit No. 1C-10 well. The commission issued AIO 2B.036 in August 2008, after a pressure communication became evident, and cancelled it in 2013, after the company worked over the well to add casing. The company reported a potential return of the communication, but subsequent diagnostics convinced the commission of the integrity of the well.

• On Oct. 17, the AOGCC established (Other Order 126) regulatory cost charges for fiscal year 2018. The charges are based on production volumes by operator and are due in four installments each year. The charges are as follows: BP Exploration (Alaska) Inc. ($4,895,027.97), ConocoPhillips ($1,240,171.03), Hilcorp Alaska LLC ($1,009,364.73), Eni US Operating ($81,020.17), Caelus Energy Alaska LLC ($34,089.40), ExxonMobil Alaska Production ($10,414.07), Cook Inlet Energy, LLC ($8,560.82), Cook Inlet Natural Gas Storage Alaska ($4,483.21), Furie Operating Alaska, LLC ($2,078.35), Savant Alaska LLC ($1,919.44), AIX Energy LLC ($1,798.57), North Slope Borough ($841.99), Aurora Gas LLC ($377.57) and BlueCrest Alaska Operating LLC ($252.17).

• On Oct. 23, the AOGCC approved (Area Injection Order No. 18D.002) a request from ConocoPhillips to continue water injection at the Colville River Unit No. CD2-55 well.

The company reported a potential Tubing x Inner Annulus pressure communication on July 25 on miscible gas injection. Subsequent diagnostics including a passing non-state witnessed Mechanical Integrity Test convinced the AOGCC of the integrity of the well.

• On Oct. 25, the AOGCC ordered (Other Order 125) Aurora Exploration LLC to post a $3.6 million bond to guarantee plugging and abandonment of six wells at the Nicolai Creek unit. The bond is a pre-requisite for AOGCC approval of a change of operator for the Cook Inlet unit. Aurora Exploration wants to take over from Aurora Gas LLC.

The company can post the bond over three years in installments of decreasing size: $2 million in the first year, $1 million in the second year and $600,000 in the third year.

• On Oct. 25, the AOGCC assessed (Other Order No. 127) a $24,500 penalty against BP Exploration (Alaska) Inc. for performing injections at the Prudhoe Bay Unit H-03 well without completing a mechanical integrity test. BP accepted the fine. The AOGCC approved policy changes by the company intended to prevent a similar occurrence.

• On Oct. 26, the AOGCC approved (Area Injection Order No. 2C.050) a request from ConocoPhillips to continue water injections at the Kuparuk River Unit 3F-07 well.

The company reported a potential Tubing x Inner Annulus pressure communication on August 31, while injecting gas. A subsequent 30-day water-alternating-gas monitoring period, followed by diagnostics and a passing non-state witnessed Mechanical Integrity Test of the Inner Annulus convinced the commission of the integrity of the well.

• On Oct. 30, the AOGCC required (Other Order No. 128 through Other Order No. 135) all North Slope operators to shut-in all wells with construction geometry similar to the Prudhoe Bay Unit DS02-03B well, as reported in the Nov. 5 edition of Petroleum News. The emergency order applied to Armstrong Energy LLC, Brooks Range Petroleum Corp., Caelus Natural Resources Alaska LLC, ConocoPhillips Alaska Inc., Eni US Operating Co. LLC, ExxonMobil Oil Corp., Hilcorp Alaska LLC and Savant Alaska LLC.

• The AOGCC has tentatively scheduled a hearing for Nov. 14, 2017 to consider a request from Hilcorp Alaska LLC to redefine the vertical and horizontal boundaries of the Ninilchik Beluga/Tyonek Gas Pool in Rule 2 of Conservation Order 701A.

The hearing was original scheduled for Oct. 25.

The commission will proceed with the hearing if it receives a request by Oct. 27.

- ERIC LIDJI