AUG 2 11981
ENERGY RESOURCES CONSERVATION BOARD
Calgary Alberta
Informational Letter IL 81-23
To: All Operators
DRILLING SPACING UNIT AND TARGET AREA REQUIREMENTS
The Board has recently issued Decision Report 81-20 with respect to drilling spacing unit and target area requirements for the Province of Alberta. Board Order SU 1088 attached, implements changes resulting from the Board's decision. The changes will be effective on September 1, 1981. This Informational Letter is to assist in the understanding of the Board's policy with respect to licences recently issued, licence applications currently before the Board, or those which may be filed between this date and September 1, 1981. Regarding these matters, the following general rules will apply:
1 For any issued licence where drilling will have commenced as of the effective date of the attached SU order, September 1, 1981, and where the well was on-target in accordance with the existing spacing regulations when the well was spudded, the well is automatically deemed to be on-target in accordance with section 4.070(10) of the Oil and Gas Conservation Regulations.
2 For any issued licence where drilling will not have commenced as of September 1, 1981, but where the location is on-target in accordance with the new corner target areas described in the attached SU order, no change in the status of the licence takes place and drilling can commence and proceed in accordance with the terms of the licence.
3 For any issued licence where drilling will not have commenced as of September 1, 1981, and where the location was on-target at the time of licensing but is off-target in accordance with the new SU order, the licensee is cautioned that if the well is drilled after September 1, 1981, it will be off-target. Any applicable penalty would apply unless an appropriate application is made to the Board and the off-target status
is remedied as a result of that application. Respecting licences of this type which now exist, the licensee may wish to consider an amendment to its licence which would alter the location of the intended well to make it on-target with respect to the new SU order.
2
4 Where a licence has been applied for as of the date of this Informational Letter but has not been issued, whether the proposed location would be on-target or off-target in accordance with the new province-wide target provisions, the Board will not continue with the processing of the application until it has received further information
from the applicant for the well licence. The information must show whether the applicant wishes to have the processing of his application continue, since it is anticipated that a number of applications where the proposed location would be off -target in accordance with the new spacing would be with- drawn or amended. Where the licence applicant indicates to the Board that it wishes to have the consideration of its application continue, the information should indicate that the landowner is aware of the pending change in target areas and remains satisfied with respect to the proposed location. To assist applicants in dealing with these licence applications where decisions are pending, the Board will be sending in the next few days, individual letters to each such applicants listing those well licence applications where further processing is being delayed pending additional advice from the applicant.
5 All well licence applications filed after the date of this Informational Letter and prior to September 1, 1981, must include, in addition to the normal requirements of a well licence application, an indication from the applicant that the landowner is aware of the pending change in target areas.
6 All well licence applications filed after the effective date of the new SU order, September 1, 1981, will be processed in the normal manner, having regard for the changed target area provisions as set out in the new SU order.
Any questions concerning the above may be directed to the well licensing section of the Development Department.
Dated at Calgary, Alberta, on the 11th day of August 1981.
THE PROVINCE OF ALBERTA
THE OIL AND GAS CONSERVATION ACT ENERGY RESOURCES CONSERVATION BOARD
ORDER NO. SU 1088
An order prescribing drilling spacing units and target areas in the Province of Alberta
The Energy Resources Conservation Board, pursuant to The Oil and Gas Conservation Act, being chapter 267 of the Revised Statutes of Alberta, 1970, hereby orders as follows:
1. This order applies to wells drilled or to be drilled in that area of Alberta lying within the white and yellow areas as described in Figure 1 which are not within currently declared oil pools as defined and described by Board G Orders on August 1, 1981, and listed in Appendix A or subject to any other spacing orders.
2. Any well drilled or being drilled, outside a target area designated by this order, but on target before September 1, 1981, shall continue to be on target.
3. Notwithstanding section 4.020, subsections (1), (2) and (3) of the Oil and Gas Conservation Regulations, the target area for wells drilled after September 1, 1981, shall be in accordance with the following:
(1) Where the prescribed drilling spacing unit consists of one section, the primary and secondary target areas shall be within the spacing unit and shall consist of
(a)
Primary Target Area - the North-east quadrant of Legal Subdivision 6, and
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(b) Secondary Target Area - the remainder of the normal target area in accordance with section 4.020, subsection (3) of the Oil and Gas Conservation Regulations.
(2) Where the prescribed drilling spacing unit consists of one half section, the primary and secondary targe areas shall be within the spacing unit and shall consist of
(a) Primary Target Area - the North-east quadrant of Legal Subdivision 6 or Legal Subdivision 16, and
(b) Secondary Target Area - the West half and South-east quadrant of Legal Subdivision 6 or Legal Subdivision 16, as shown and marked 1 on Appendix B hereto attached.
(3) Where the prescribed drilling spacing unit consists of one quarter section, the primary and secondary target areas shall be within the spacing unit and shall consist of
(a) Primary Target Area - the North-east quadrant of Legal Subdivision 6, 8, 14 or 16 , and
(b) Secondary Target Area - the West half and South-east quadrant of Legal Subdivision 6 8, 14 or 16 as shown and marked 1 on Appendix C hereto attached.
(4) Where the prescribed drilling spacing unit consists of two legal subdivisions, the target area shall be within the drilling spacing unit and shall consist of the North-west quarter of the legal subdivision designated in the subsisting spacing unit order to contain the target area, as shown and marked 1 on Appendix D hereto attached.
(5) Where the prescribed drilling spacing unit consists of one legal subdivision, the target area shall be within the spacing unit and shall consist of the North-west quarter of the legal subdivision, as shown and marked 1 on Appendix E hereto attached.
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4. For the purpose of this order, legal subdivisions shall be divided into quarters by lines shown as follows:
(1) Each East-West line shall be parallel to the South boundary of the section containing the legal subdivi- sion and shall pass through a point on the East boundary of Legal Subdivision 1, 8, 9 or 16, 200 metres from the South- east corner of the legal subdivision.
(2) Each North-South line shall be parallel to the East boundary of the section containing the legal subdivision and shall pass through a point on the South boundary of Legal Subdivision 1, 2 , 3 or 4 of the section, 200 metres West of the South-east corner of Legal Subdivision 1, 2, 3 or 4.
5. Where the drilling spacing unit of a gas well is one section and the well is completed outside its primary and secondary target area its annual allowable shall be reduced by application of the allowable multiplier calculated in accordance with section 4.070, subsection (2) of the Oil and Gas Conservation Regulations.
6. Where the drilling spacing unit established is one half section, and the well is completed outside its primary and secondary target area its base allowable or in the case of a gas well, its annual allowable, shall be reduced by application of the factor equivalent to the ratio of the area
(a) if the well is completed within the drilling spacing unit and within the North-west quarter of the legal subdivision North, South, East or West of the legal subdivision containing the target area and separated from it by one intervening legal subdivision, 0.50 times the area of the drilling spacing unit, as shown and marked 2 on Appendix B hereto attached, or
(b) if the well is completed within the drilling spacing unit and within the South-east, South, West or North-west quarter of the legal subdivision North, South, East or West of the legal subdivision containing the target area and separated from it by one intervening legal subdivision, 0,375 times the area of the drilling spacing unit plus four times the product of the perpendicular distances from the
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uppermost point of intersection of the wellbore with the oil productive or gas productive part, as the case may be, of the producing pool to the two nearest boundries of the legal subdivision in which the well is completed, as shown and marked 3 on Appendix B hereto attached, or
(c) if the well is completed within the drilling spacing unit and within
(i) the North-west quarter of the legal subdivision immediately North-east, North-west, South-east or South-west of the legal subdivision containing the target area , or
(ii) the North-west quarter of a legal
subdivision North, South, East or West of a legal subdivision defined in subclause (i) and separated from it by one intervening legal subdivision,
0.25 times the area of the drilling spacing unit, as shown and marked 4 on Appendix B hereto attached, or
(d) if the well is completed within the drilling spacing unit and within the South-east, South-west or North-east quarter of
(i) a legal subdivision immediately North-east, North-west, South-east or South-west of the legal subdivision containing the target area, or
(ii) a legal subdivision North, South, East or West of a legal subdivision defined in subclause (i) and separated from it by one intervening legal subdivision,
0.125 times the area of the drilling spacing unit plus four times the product of the perpendicular distances from the uppermost point of intersection of the wellbore with the oil productive or gas productive part, as the case may be, of the producing pool to the two nearest boundaries of the legal subdivision in
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which the well is completed, as shown and marked 5 on Appendix B hereto attached, or ,^
(e) if the well is completed within the drilling spacing unit and within the North-west quarter of an odd numbered legal subdivision, 0.125 times the area of the drilling spacing unit, as shown and marked 6 on Appendix B hereto attached, or
(f) if the well is completed within the drilling spacing unit and within the South-west, South-east or North-east quarter of an odd numbered legal subdivision, four times the product of the perpendicular distances from the uppermost point of intersection of the wellbore with the oil productive or gas productive part, as the case may be, of the producing pool to the two nearest boundaries of the legal subdivision in which the well is completed, as shown and marked 7 on Appendix B hereto attached.
to the area of the drilling spacing unit.
7. Where the drilling spacing unit established is one quarter section, and the well is completed outside its target area, Its base allowable or in the case of a gas well, its annual allowable, shall be reduced by application of the factor equivalent to the ratio of the area,
(a) if the well is completed within the quarter section and within the North-west quarter of the legal subdivision diagonally opposite the legal subdivision designated as the target area, 0.5 times the area of the drilling spacing unit, as shown and marked 2 on Appendix C hereto attached, or
(b) if the well is completed within the quarter
section and within the South-east, South-west or North-east quarters of the legal subdivision diagonally opposite the legal subdivision designated as the target area, 0.25 times the area of the drilling spacing unit plus four times the product of the perpendicular distances from the uppermost point of intersection of the wellbore with the oil
- 6 -
productive or gas productive part, as the case may be, of the producing pool to the two nearest boundaries of the legal subdivision in which the well is completed, as shown and marked 3 on Appendix C hereto attached, or
(c) if the well is completed within the quarter section and within the North-west quarter of the legal subdivision laterally adjoining the legal subdivision designated as the target area, 0.25 times the area of the drilling spacing unit, as shown and marked 4 on Appendix C hereto attached, or
(d) if the well is completed within the quarter section and within the South-east, South-west or North-east quarter of the legal subdivision laterally adjoining the legal subdivision designated as the target area, four times the product of the perpendicular distances from the uppermost point of intersection of the wellbore with the oil productive or gas productive part, as the case may be, of the producing pool to the two nearest boundaries of the legal subdivision in which the well is completed, as shown and marked 5 on Appendix C hereto attached,
to the area of the drilling spacing unit.
8. Where the drilling spacing unit established is two legal subdivisions, and the well is completed outside its target area, its base allowable or in the case of a gas well, its annual allowable, shall be reduced by application of the factor equivalent to the ratio of the area
(a) if the well is completed within the South-east, South-west or North-east quarter of the legal subdivision containing the target area, 0.50 times the area of the drilling spacing unit plus four times the product of the perpendicular distances from the uppermost point of intersection of the wellbore with the oil productive or gas productive part, as the case may be, of the producing pool to the two nearest boundaries of the legal subdivision, as shown and marked 2 on Appendix D hereto attached, or
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(b) if the well is completed within the drilling spacing unit and within the North-west quarter of the legal subdivision other than that containing the target area, 0.50 times the area of the drilling spacing unit, as shown and marked 3 on Appendix D hereto attached, or
(c) if the well is completed within the drilling spacing unit and within the South-east, South-west or North-east quarter of the legal subdivision other than that containing the target area, four times the product of the perpendicular distances from the uppermost point of intersection of the wellbore with the oil productive or gas productive part, as the case may be, of the producing pool to the two nearest boundaries of the legal subdivision in which the well is completed, as shown and marked 4 on Appendix D hereto attached,
to the area of the drilling spacing unit.
9e Where the drilling spacing unit established is one legal subdivision and the well is completed outside the North-west quarter of the legal subdivision, its base allowable or in the case of a gas well, its annual allowable, shall be reduced by application of the factor equivalent to the ratio of the area four times the product of the perpendicular distances from the uppermost point of intersection of the wellbore with the oil productive or gas productive part, as the case may be, of the producing pool to the two nearest boundaries of the legal subdivision, as shown and marked 2 on Appendix E hereto attached, to the area of the drilling spacing unit,
10. Board Order No* SU 1040 is rescinded*
11* This order comes into force on September 1, 1981.
MADE at the City of Calgary, in the Province of Alberta, this 10th day of August, 1981.
ENERGY RESOURCES CONSERVATION BOARD
V. Millard Chai rman
Digitized by the Internet Archive in 2015
https://archive.org/details/energyresources19812328
APPENDIX A TO ORDER NO. SU 1088
List of Pools Exempt from Spacing Changes
Heavy Pools
Heavy Pools
Amisk Blairmore A Amisk Blairmore B Bigoray Pekisko A Blueridge Pekisko A Bolloque Upper Mannville A Bonnyville Colony
Hayter Sparky A Hayter Sparky E Hayter Dina A Hayter Dina B Marwayne Sparky A Morgan Sparky A
K 1 :
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lie Colony B |
Morgan Lloydminster A |
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Mannville A |
Paddle River Rundle |
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Mannville B |
Plain Colony E |
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South |
Sparky |
E |
Provost Upper Mannville B |
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South |
Sparky |
H |
Provost Upper Mannville BB |
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South |
Sparky |
I |
Provost Basal Quartz A |
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South |
Sparky |
P |
Ribstone Sparky B |
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South |
Sparky |
A & B |
Vermilion Sparky A |
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South |
Sparky |
N & R |
Viking-Kinsella Wainwright |
D |
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South |
L 1 0 y d m i n s t e r |
A |
Viking-Kinsella Wainwright |
H |
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South |
Lloydmins t er |
C |
Wainwright Colony V & Colony |
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South |
Lloydmins ter |
D |
Wainwright Sparky B |
Cherhill Banff B Cherhill Banff C Compeer Lower Mannville A David Lloydminster A Greencourt Pekisko A Gunn Banff A Harold Lake Colony
Wainwright Sparky F Wainwright Wainwright Warwick Upper Mannville J Warwick Upper Mannville V Wildmere Lloydminster A Wrentham Lower Mannville C Wrentham Lower Mannville E
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APPENDIX A TO ORDER NO. SU 1088 List of Pools Exempt from Spacing Changes
Medium and Light Pools
Acheson Blairmore A Acheson Blairmore 0 Acheson D-3 A Alix D-2
Alliance Blairmore Armisie Blairmore Battle Viking Bellshill Lake Viking A Bellshill Lake Blairmore Bonnie Glen Cardium A Bonanza Boundary A Bonanza Boundary B Buffalo Lake D~3 B Namao Blairmore F Campbell-Namao Blairmore J Caroline Cardium E Caroline Viking A Caroline Viking G Chain Viking A Chamberlain Blairmore Cherhill Banff A Chigwell Viking A Chigwell Viking B Chigwell Mannville E Chigwell Mannville G Chigwell Upper Mannville A Chigwell D-2 C
Medium and Light Pools
Chigwell D-3 A
Clive D-2 A
Clive D-3 A
Crossfield Rundle C
Crossfield Rundle G
Crossfield East Cardium C
Crossfield East Elkton A
Crossfield East Elkton D
Davey Belly River B
Davey Pekisko A
Duhamel Wabamun A
Duhamel D-3 A
Duhamel D-3 B
Eaglesham D-3 A
Edson Cardium B
Edson Cardium C
Edson Cardium J
Edson Cardium K
Edson Bluesky B
Erskine Blairmore F
Erskine D-3
Ewing Lake D-2 D
Excelsior Mannville A
Fairydell-Bon Accord Basal Mann C
Fenn-Big Valley D-2 A
Fenn West D-2 A
Ferrier Cardium D
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APPENDIX A TO ORDER NO « SU 1088
List of Pools Exempt from Spacing Changes
Medium and Light Pools
Ferrier Cardium G Ferrier Cardium K & L Ferrier Cardium NB & Viking A Garrington Cardium D Garrington Cardium A & B Garrington Viking A Garrington Viking B Garrington Mannville B Garrington Lower Mannville I Ghost Pine Upper Mannville Q Ghost Pine Upper Mannville V Ghost Pine U, Mannville CGHP&U Gilby Belly River B Gilby Viking A
Medium and Light Pools
Golden Spike D-3 C Halkirk Lower Mannville C Harmattan East Rundle Harmattan Elkton Rundle B Haynes D-2 A & D-3 A Highvale Lower Mannville A Highvale Banff A Highvale Banff B Innisfail D-3 Joarcam Viking Jof f re Viking Joffre South Viking Lanaway Cardium Lanaway Mannville
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Gilby Viking E |
Lanaway Elkton |
A |
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Gilby Basal Mannville |
B |
Leduc-Woodbend |
Blai |
rmor e |
A |
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Gilby Basal Mannville |
S |
Leduc-Woodbend |
Blai |
rmor e |
B |
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Gilby Basal Mann H&L, |
JUR E |
Leduc-Woodbend |
Blai |
rmor e |
E |
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& UM A |
Leduc-Woodbend |
Blai |
rmor e |
J |
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Gilby Rundle B |
Leduc-Woodbend |
Blai |
rmor e |
K |
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Gilby Rundle E |
Leduc-Woodbend |
D-3 |
E |
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Gilwood Gilwood A |
Legal Middle Viking |
A |
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Giroux Lake Cadomin A |
Legal Mannville |
B |
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Golden Spike D-2 A |
Leo Lower Mannville |
A |
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Golden Spike D-3 A |
Lone Pine Creek |
D-2 |
A |
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Golden Spike D-3 B |
Lone Pine Creek |
D-3 |
A |
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APPENDIX A TO ORDER NO. SU 1088
List of Pools Exempt from Spacing Changes
Medium and Light Pools
Markerville Viking A Markerville Pekisko B McLeod Cardium A Medicine River Glauconitic A Med River Glauc D & Ostracod M Medicine River Ostracod A Medicine River Ostracod B Medicine River Ostracod C Medicine River Ostracod G Medicine River Ostracod M Medicine River Basal Quartz B Medicine River Basal Quartz C Medicine River Basal Quartz D Medicine River Basal Quartz J Medicine River Pekisko N Medicine River Pekisko R Mikwan Upper Mannville F Mikwan D-2 A Mikwan D-3 A
Minnehik-Buck Lake Cardium A Minnehik-Buck Lake Cardium D Minnehik-Buck Lake Cardium F Minnehik-Buck Lake Viking A Minnehik-Buck Lake Ostracod A Morinville Lower Mannville A
Medium and Light Pools
Morinville D-3 B
Morinville D-3 C
Nevis Blairmore B
Nevis Blairmore C
Nevis Upper Mannville A
Nevis Devonian
New Norway D-2
New Norway D-3
Niton Basal Quartz A
Niton Basal Quartz B
Normandville Mississippian A
Normandville Mississippian B
Normandville Mississippian C
Olds Wabamun A
Peavey Blairmore
Pembina Keystone Belly River B Pembina Keystone Belly River C Pembina Belly River J Pembina Keystone Belly River L Pembina Keystone Belly River U Pembina Belly River II Pembina Belly River KK Pembina Belly River YY Pembina Belly River FFF & GG Pembina Cardium
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APPENDIX A TO ORDER NO. SU 1088
List of Pools Exempt from Spacing Changes
Medium and Light Pools
Pembina Lobstick Glauconitic A
Pembina Ostracod E
Pembina Keystone Ellerslie A
Pembina Pekisko A
Penhold Viking A
Penhold Lower Mannville A
Pouce Coupe South Boundary A
Pouce Coupe South Boundary B
Provost Viking CAK & Mannville
Provost Blairmore
Provost Mannville H
Provost Mannville I
Provost Mannville L
Redwater Lower Viking A
Redwater Lower Viking B
Redwater Basal Mannville D
Rowley Pekisko A
Rowley Lower Mannville A
Stettler D™2 A
Stettler D-3 A
Stettler North Upper Mannville Sturgeon Lake South D-2 A Sunset Triassic A Sunset Triassic B Sylvan Lake Viking A
Medium and Light Pools
Thompson Lake Blairmore Three Hills Creek Pekisko Turner Valley Blairmore A & B Turner Valley Rundle Twining Lower Mannville B , Twining Rundle A & Low Man A Twining North Rundle Whitemud Blairmore Willesden Green Card A Willesden Green Viking A Willesden Green Viking B Wimborne D-2 A Wimborne D-2 B Wood River D-2 A Wood River D-2 C Worsley Triassic A Youngstown Upper Mannville A Youngstown Arcs
1600 m
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PRIMARY TARGET AREA
\^ SECONDARY TARGET AREA
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HALF SECTION DRILLING SPACING UNIT AREA OF DRILLING SPACING UNIT: aSU= 1600m X 800m
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2. RF.-. 1/2
4. RF.: 1/4
6. PF.: 1/8
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3. PF: 3/8 +
4CD ASU
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5. PF: 1/8 +
4CD ASU
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THE PROVINCE OF ALBERTA
APPENDIX B TO ORDER NQ SU 1088
AREA OF CHANGE FROM PREVIOUS ORDER-
EFFECTIVE DATE —SEPTEMBER I, 198!
ENLRGY RtSOi'RCfcS CONSERVATION BOAR: CALGARY ALBERTA
!600m
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PRIMARY TARGET AREA
N SECONDARY TARGET AREA
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1/4 SECTION DRILLING SPACING UNIT AREA OF DRILLING SPACING UNIT' ASU = 800m X 800m
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ASU
THE PROVINCE OF ALBERTA
APPENDIX C TO-ORDER NO. SU 1088
AREA OF CHANGE FROM PREVIOUS ORDER EZZZID EFFECTIVE DATE -SEPTEMBER I, 198!
tNLRGV Rt.SOiiRCES ^ONStRVATiC CALGARY ^ALBERTA
1600m
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TARGET AREA
TWO LEGAL SUBDIVISION DRILLING SPACING UNIT AREA OF DRILLING SPACiNG UNIT^ ASU^ 800mX400m
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THE PROVINCE OF ALBERTA APPENDIX D TO ORDER NO. SU 1088
AREA OF CHANGE FROM PREVIOUS ORDER - EFFECTIVE DATE —SEPTEMBER I, 1981
tNtRoV RtbOURCEb CONSERVATION CALGARY ALBERTA
1600 m
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TARGET AREA
I.
ONE LEGAL SUBDIVISION DRILLING SPACING UNIT AREA OF DRILLING SPACING UNIT^ ASU = 400m X400m
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ASU
THE PROVINCE OF ALBERTA
APPENDIX E TO ORDER NO. SU 1088
AREA OF CHANGE FROM PREVIOUS ORHFR - EFFECTIVE DATE -SEPTEMBER 1 , 1981
ENERGY RESOURCES CONSERVATION BQARU CALGARY ALBERTA
(
SEP -2 1981
ENERGY RESOURCES CONSERVATION BOARD
Calgary Alberta
Informational Letter IL 81-24
TO: All Oil and Gas Operators Major Gas Purchasers
OILFIELD SOLUTION GAS CONSERVATION
The purpose of this informational letter is to review the Board's policies respecting solution gas conservation, including gas conservation (GC) orders, voluntary solution gas conservation schemes, the Board's flaring surveillance and follow-up activities, and applications for exemption from GC orders.
On the basis of the recent numerous inquiries to its Gas Department and area offices, the Board believes that the following information will be useful to industry and others.
GC ORDERS AND VOLUNTARY GAS CONSERVATION SCHEMES
The practice of gathering and conserving oil field solution gas has long been accepted in the petroleum industry as a wise principle of resource management. Moreover the regulatory provisions for requiring such con- servation and thereby preventing waste of the resource are explicitly set out in section 37, subsection (b) of The Oil and Gas Conservation Act. During the course of the past 25 years, solution gas conservation schemes have been installed in virtually all major operating oil fields leaving only the minor remnant extensions or isolated developments in which flaring continues. In reaching the current status, many of the solution gas conservation schemes were implemented on a voluntary basis by operators whereas in a few cases, the schemes were established only after the Board had enacted a GC order pursuant to section 37 of The Oil and Gas Conservation Act. In either case, the Board has issued GC orders to reflect a maximum permissible level of flaring that individual operators would be allowed to incur in the respective fields. These GC orders and the specified flaring allowances are listed in Attachment 1.
In order to ensure that the maximum feasible solution gas conservation is being achieved, the Board staff maintains a continuing surveillance of the amounts of flaring that are occurring in oil fields throughout the province including those already subject to GC order standards as well as newer fields for which gas gathering systems have not yet been established. For these newer fields and extensions to existing fields, if the Board staff's
2
preliminary assessment indicates that gas conservation appears to be economically viable, it immediately advises the operator of its conclusion and of its expectation that the operators in that area should proceed with a conservation scheme. If the operators fail to submit application for the scheme or also fail to demonstrate that solution gas conservation is not economically feasible, the Board, under the provisions of section 37 would call a hearing to permit the operators to show cause why they should not be required to install a gas gathering conservation facility. Where a GC order is issued pursuant to such a proceeding, all of the gas produced in the field to which the order is applicable must be conserved unless exception to that requirement is obtained.
FLARING SURVEILLANCE IN GC ORDER AREAS
On a monthly basis, the Board compares the level of flaring which has occurred at facilities in GC order fields with the level which the order allows. Where flaring at a particular facility has exceeded the GC order limit, the Board requires the operator, usually on a quarterly basis, to explain the reasons for the excessive flaring and to discuss steps which will be taken to reduce or eliminate flaring in the future. Some operators, on their own initiative, provide the Board with monthly or quarterly flaring summaries containing the information which would otherwise be requested. The Board encourages this practice since it usually negates the need for the Board to issue a letter requesting the information, and generally streamlines the Board's surveillance and follow-up procedures.
LEVELS OF FLARING ALLOWED
With respect to the levels of flaring provided by the GC orders, the Board notes that, while the most common allowance is 5 per cent, they range from 2 to 20 per cent depending on the nature of the operations in the particular field(s) and the time of which the order was issued. The Board suspects that, having regard for the changing gas and co-product prices, flaring allowances in some GC orders may no longer be appropriate, and in this regard intends to review the flaring allowances in all GC orders in the coming months.
APPLICATIONS FOR EXEMPTION FROM GC ORDERS Long-Term Exemption
An application for long-term exemption from a GC order must include projections of volumes of gas produced, the co-product content of the gas, expected ranges of prices for residue gas and co-products, capital and
3
operating costs and other factors such as environmental impact of continued _
flaring. Special attention should be given to forecast changes in prices and costs and also to long-range cumulative amounts of flaring that may occur in the absence of a scheme.
Attachment 2 hereto outlines the information normally required in an application for long-term exemption or in a submission requested by the Board staff on the feasibility of gas conservation. In some cases, less information would be acceptable, such as where the produced gas volumes are extremely small and are remote from markets or a sales gas gathering system. The Board believes that an appropriate time to apply for long-term exemptions for new facilities would be at the time an application is submitted to the Board's Development Department for approval of the battery facilities under section 15.210 of the Oil and Gas Conservation Regulations. In the event that conservation of gas may occur at some later date, this should be a consideration when locating and designing the battery, and ) therefore, should be addressed in the initial battery application.
Short-Term Exemptions
GC orders provide for a modest level of flaring to accommodate upsets, maintenance and repairs, and other expected incidents which can result in flaring. When an unexpected incident occurs or where extensive main- tenance or repairs are required and flaring in excess of the GC order limit would result, the Board may approve, upon application by the operator, a short-term exemption from the GC order so that oil production may continue. Where possible, such as in the case of planned maintenance, the application should be in writing, although verbal applications will be accepted if the circumstances warrant. The Board expects that operators would examine whether exemption is required or whether the level of flaring already permitted by the GC order would accommodate the situation. In the interests of conserving these diminishing resources, the Board would expect operators to examine alternatives to flaring such as shutting in and rescheduling oil production, shutting in high GOR oil wells, reinjection of solution gas where facilities exist, expediting the delivery of new or additional required equipment, and expediting the carrying out of maintenance and repairs. Also, the Board notes that its practice is to give favourable consideration to waiving production penalties resulting from making up oil production where shut-in was required to facilitate gas conservation.
SOLUTION GAS PURCHASING
With the current gas supply situation in Alberta, it is understood that occasionally an operator has experienced difficulty in obtaining a contract for his solution gas. Today no legislation exists which would enable the Board to compel a purchaser to take solution gas. However, there has been an understanding between the Board and the purchasers which generally provides that the purchaser "in the area" will take new solution gas volumes. The agreement has worked reasonably well thus far although there have been
4
a few problems from time to time. Should an operator experience problems in contracting for the sale of solution gas, the Board is prepared to assist in arranging discussions towards establishment of arrangements for taking the gas and thus preventing unnecessary waste of the resource.
Any questions respecting solution gas conservation should be directed to the Board's Gas Department.
DATED at Calgary, Alberta, on 20 August 1981.
Attachments
ATTACHMENT 1 TO XL 81-24 GAS CONSERVATION ORDERS
Order % Flare
No. Field Allowance
23 Acheson 5
62 Acheson East 5
51 Alix 10
63 Ante Creek 8 56 Bantry 10 85 Bigoray 5
24 Bonnie Glen 2
82 Brazeau River 5 72 Campbell-Namao 3
25 Carson Creek North 10
26 Cessford 5
52 Clive 10 68 Countess 4
83 Cyn-Pem 5 80 Davey 5
70 Duhamel 4 58 Erskine 5
27 Fenn Big Valley 20 60 Ferrier 5 75 Garrington 5 65 Gilby 7
28 Glen Park 2
29 Golden Spike 2
30 Harmattan East 2
31 Harmattan-Elkton 3 79 Highvale 5
32 Homeglen-Rimbey 10
33 Hussar 2
34 Innisfail 2
71 Joarcam 4 67 Joffre 4
35 Judy Creek 5
Order % Flare
No. Field Allowance
36 Kaybob ' 2 50 Kaybob South 2
37 Leduc-Woodbend 2 66 Medicine River 7 59 Mitsue 3 ,.
77 Nipisi 6 57 Olds 5
38 Pembina 5 64 Provost 10 69 Rainbow 4
73 Rainbow South 4
39 Redwater 2 76 Ricinus 4 55 Simonette 5
40 Stettler 10
41 Stettler South 20 81 Sturgeon Lake 4 49 Sturgeon Lake South 10 54 Sundre 3
42 Swan Hills 8
43 Swan Hills South 6
44 Turner Valley 15
74 Twining 5 61 Twining North 3
78 Utikuma Lake 6
45 Virginia Hills 6
46 Westerose 3 84 Westpem 5 53 Westward Ho 15
47 Willesden Green 10
48 Wizard Lake 2
ATTACHMENT 2 TO IL 81-24
Long-Term Flaring
Applications for long-term exemption from a Gas Conservation Order shall include the following information:
a a forecast on an average daily basis by years of the oil production and gross and net gas and co-product production for the period of exemption;
b a complete summary of the facilities and related
capital investment that would be required to conserve the gas and co-products, if any;
c the annual cost of operating the said facilities;
d a forecast of gas and co-product prices for the period of exemption;
e an economic evaluation showing the project rate of
return based upon the foregoing data. The evaluation should show the return before income tax as well as the return after income tax assuming the prevailing corporate tax rate for the applicant at the time of application. The evaluation should also identify the payout period for the project under both circumstances; and
f any other data that may be pertinent.
SEP » 2 1-
ENERGY RESOURCES CONSERVATION BOARD Calgary Alberta
Informational Letter IL 81-25
TO: All Oil and Gas Operators . ■ '
REVISIONS TO OIL ALLOWABLES - SEPTEMBER 1981 MD ORDER
As a result of the revisions to the oil allowable control systems outlined in Informational Letter IL 81-12 the Board's MD Order for September 1981 reflects changes in maximum rate limitations (MRL) for many pools.
In pools where the PRL surveillance formula is being used to determine the MRL, the formula outlined in IL 81-12 has been applied. Because the PRL formula approach is intended for initial MRL determinations, it is emphasized that many of the developed pools could benefit from studies to more adequately determine rate controls.
The MRL for those pools that were based on past studies and considerations have been retained. These are listed in the attached appendix.
DATED at Calgary, Alberta on 27 August 1981.
N. G. Berndtsson Assistant Manager, Oil Department
Appendix IL 81-25
POOLS WITH MRLs BASED ON PAST STUDIES AND CONSIDERATIONS
^MRL m /day
Acheson D-2A . 31.8
Ante Creek Beaver Hill Lake - Solvent Flood 397.3 Bonnie Glen D-3A 22 247.4
Buffalo Lake D-3 ' 176.8
Buffalo Lake D-3B S 60.6
Caroline Elkton B 11.9
3
Coutts Moulton A - Primary 8.9 m /d/well-
- Waterflood ' , 89.0
Crossfield Rundle C 20.0
3
Cyn-Pem Cardium C 20.0 m /d/well
Eaglesham D-IA 15.3 >
Ewing Lake D-3A 57.8
Joarcam Viking - Primary (Township 50) 20.8 m"^/ d/well (16 ha DSU)
Leduc-Woodbend D-3F 186.3
3
Mitsue Gilwood A - Primary 10.0 m /d/well
3
Provost Upper Mannville B 9.5 m /d/well
Rainbow Keg River X 47.7 - ^
3
Rivercourse Sparky A . 5.4 m /d/well
Shekilie Keg River L ' 19.0
Shekilie Keg River M 25.0
Shekilie Keg River N 19.0
St. Albert-Big Lake D-2A > 59.3
St. Albert-Big Lake D-3A 619.2
Sturgeon Lake D-3 776.3
Sundre Rundle B - Waterflood 85.8
Virgo Keg River Z (I.S. No. 6) 31.8
Virgo Keg River QQQ 19.1
Virgo Keg River RRR 14.3
Virgo Keg River C2C 11.9
Virgo Keg River F2F (I.S. No. 7) 6.4
Appendix IL 81-25
m /day
Virgo Keg River K2K
Virgo Keg River 020
Wembley Halfway B
Windfall D-3C
Wintering Hills Viking A
Wizard Lake D-3A - Solvent Flood
Yekau Lake D-3A
28.6 7.9
11.7 m~^/d/well " 25.0 63.6 15 891.0 120.1
|
Zama |
Muskeg 0 |
8.7 |
|||
|
Zama |
Keg |
River |
S |
46.1 |
|
|
Zama |
Keg |
River |
VV |
96.9 |
|
|
Zama |
Keg |
River |
WW |
15.9 |
|
|
Zama |
Keg |
River |
XX |
31.8 |
|
|
Zama |
Keg |
River |
KKK - |
Waterf lood |
19.1 |
|
Zama |
Keg |
River |
000 |
10.3 |
|
|
Zama |
Keg |
River |
TTT - |
Waterf lood |
13.1 |
|
Zama |
Keg |
River |
E2E |
15.1 |
|
|
Zama |
Keg |
River |
J2J |
21.4 |
|
|
Zama |
Keg |
River |
S2S |
31.5 |
|
|
Zama |
Keg |
River |
F3F |
9.3 |
|
|
Zama |
Keg |
River |
P3P |
15.9 |
|
|
Zama |
Keg |
River |
C4C |
11.9 |
|
|
Zama |
Keg |
River |
G4G |
13.5 |
|
|
Zama |
Keg |
River |
H4H |
28.6 |
|
|
Zama |
Keg |
River |
R4R |
20.7 |
ENERGY RESOURCES CONSERVATION BOARD
Calgary Alberta
Informational Letter IL 81-26
a
TO: All Oil and Gas Operators
INCENTIVE EXPLORATORY WELLS: ^ PRELIMINARY APPRAISALS BEFORE LICENSING
This letter supersedes Informational Letter IL-OG 79-1, issued on 3 January 1979 and relating to the Exploratory Drilling Incentive Regulation, 1978.
As all preliminary appraisals now relate to the Exploratory Drilling Incentive Regulation, 1981, the service is described below in the context of that regulation. No procedural change has been adopted, but the fee has been increased from $25 to $35 to offset the increased cost of providing this service.
• An operator may, in writing, ask whether or not either a hydro- carbon occurrence penetrated between specified depths in a named nonconfidential well, or a crude bitumen occurrence at a particular location, is deemed by the Board to constitute a "significant occurrence of crude oil or gas" or an "oil sands deposit" within the meaning of section 9(b) and (c) and Schedules J and K of the Exploratory Drilling Incentive Regulation, 1981. A fee of $35 will be charged for each hydrocarbon or crude bitumen occurrence appraised.
• An operator may also ask, in writing, whether or not a specific well is inside or outside the "4.8 kilometre area" or "2.4 kilometre area" associated with the anticipated incentive exploratory well. Such an inquiry should specify the legal descriptions and the known and expected bottom hole co-ordinates of both the existing well and the anticipated incentive exploratory well. A fee of
$35 will be charged for performing each distance determination associated with this type of an inquiry.
All operators are reminded that the Board is not obligated to honour a preliminary appraisal for an anticipated incentive exploratory well when it officially determines or redetermines the qualifying interval pursuant to section 6(1) (a) or section 7(3), respectively, of the regulation. The preliminary appraisal may be deemed invalid where circumstances change before the official determination is made, where additional information is obtained, or where an error in the appraisal is later detected.
2
Please direct each written request for a preliminary appraisal to the Board's Geology Department and, if you have a question regarding the service, you may phone Mr. B, T. Shirvell (261-8227) or Mrs. Margaret Carroll (261-8398).
DATED at Calgary, Alberta, on 28 August 1981.
SEP 17198
ENERGY RESOURCES CONSERVATION BOARD
Calgary Alberta
Informational Letter IL 81-27
TO: All Oil and Gas Operators
INCENTIVE EXPLORATORY WELLS DRILLED UNDER THE EXPLORATORY DRILLING INCENTIVE REGULATION, 1978, AND EXPLORATORY DRILLING INCENTIVE REGULATION, 1981
Effective immediately, this letter supersedes Informational Letter IL 80-13 (IL 80-13) issued on 25 June 1980.
This letter updates IL 80-13 by providing for incentive exploratory wells drilled under the Exploratory Drilling Incentive Regulation, 1981 (the 1981 regulation), and by defining, in section 3.3 (c) and (d), two rules adopted by the Board subsequent to the issuance of IL 80-13. Certain wording appearing in IL 80-13 relates exclusively to the Exploratory Drilling Incentive Regulation, 1978 (the 1978 regulation). Most of that wording is being retained in this letter because it will continue to apply for several more months while wells drilled under the 1978 regulation are being processed.
To obtain a full description of all Board'-administered aspects of the Exploratory Drilling Incentive System, this letter should be reviewed in concert with the 1978 and 1981 regulations, copies of which are available from the Department of Energy and Natural Resources, and Informational Letter IL 81-26 which refers to the service offered by the Board in conducting a preliminary appraisal before a potential incentive exploratory well is licensed.
1 DEFINITIONS
In this informational letter,
(a) "abandoned well" means
(i) a well that was drilled and forthwith abandoned and that, in the opinion of the Board, does not warrant being cased for production, or
(ii) a well that once produced crude oil or gas but was abandoned before 1 January 1974;
(b) "completed well" means
(i) a well that has been or is cased or completed for
production except where such a well had been produced and abandoned before 1 January 1974, or
(11) a well that, in the opinion of the Board, penetrated a zone that warrants being cased for production, or
(iil) an evaluation well that, in the opinion of the Board,
penetrated a zone that would have warranted being cased
for production if the well had been drilled as a conventional
well;
"incentive exploratory well" means a well certified by the Board as an incentive exploratory well under either the 1978 or 1981 regulation;
"pre-existing well" means
(I) a well drilled under a certificate issued before the date and time at which the incentive exploratory well was certified, or
(II) an uncertified well that was spudded before the date and time at which the incentive exploratory well was certified;
"Class A interval" and "Class B interval" mean the respective intervals of depth of an incentive exploratory well that qualify for credit considerations under Schedules F and G of the 1978 regulation or Schedules J and K of the 1981 regulation, depending on which regulation is applicable;
"qualifying interval" means the total Class A interval and/or Class B interval determined by the Board at an incentive exploratory well;
"significant occurrence of crude oil or gas" and "accumulation of crude oil or gas" mean
(1) the deepest hydrocarbon occurrence penetrated by a "completed well" as defined under clause (b) , subclause (1), above, or
(ii) the deepest hydrocarbon occurrence penetrated by a well that had been produced and abandoned before 1 January 1974, but not including the crude oil or gas accumulation which yielded this production, or
(iii) the hydrocarbon occurrence represented by the zone referred to in clause (b) , subclauses (ii) and (iii), above;
"4.8-kilometre area" means the area of a circle, having a radius of 4.8 kilometres, that is centred at the bottom-hole location of the incentive exploratory well; and
3,
(i) "2. A-kilometre area" means the area of a circle, having a radius of 2.4 kilometres, that is centred at the bottom^^hole location of the incentive exploratory well.
2 CERTIFICATION OF AN INCENTIVE EXPLORATORY WELL
The Board will certify a well to be drilled for oil or gas that, at the time of licensing or certificate renewal, satisfies condition (a), below, and either condition (b), (c), or (d) :
(a) intended to be drilled deeper than 600 metres, and
(b) located more than 4.8 kilometres from any pre-existing well that penetrated a significant occurrence of crude oil or gas, and situated at a location where, in the opinion of the Board, no oil sands deposit exists, or
(c) located less than 4.8 kilometres from a pre-existing well that penetrated a significant occurrence of crude oil or gas, but intended to be drilled at least 150 metres below the base of the deepest significant occurrence of crude oil or gas, or
(d) situated at a location where, in the opinion of the Board, an oil sands deposit exists, but intended to be drilled to explore for crude oil or gas at any depth below the deepest member or formation containing the oil sands deposit.
3 DETERMINATION OF INTERVALS OF DEPTH QUALIFYING FOR CREDIT
For each incentive exploratory well, the total interval that qualifies for credit considerations will be determined and classified into the Class A and/or Class B categories, in accordance with the following procedures. These procedures are illustrated by Figure 1.
3.1 Total Qualifying Interval
(a) If no pre-existing well that penetrated a significant occurrence of crude oil or gas is in the 4.8-kilometre area, the qualifying interval will be the interval extending from the total depth of the incentive exploratory well up to the depth of either 609.6 or 600 metres, depending on whether the 1978 or 1981 regulation applies .
(b) If a pre-existing well that penetrated a significant occurrence of crude oil or gas is in the 4.8-kilometre area, the qualifying interval will be the interval extending from the total depth of the incentive exploratory well up to the deepest of :
CASE 1 CASE 2 CASE 3
|
i " 1 ' * 1 j |
1 !e««P.MK»| 1 j jNCENTtVE S ^ ^ PROGRAM 1^ S |
I 1 ! 1 \ |
|||
|
1 \ \ CLASS 1 1 1 \\\ 1 |
'a ASS 1 j "i )' i ! i 1 CLASS S ! if ll ill If |
\ j clUss ' i 1 1 ! 1 1 1 |
CASE ^ JEW
I
609.6 !600}m
I !
,CIASS
COMPLETED WELL
!
LEGEND
ASANOONEDn
WELL U
INCENTIVE EXPLORATORY WELL
iEW
1
DEEPEST SIGNIFICANT OCCURRENCE OF CRUDE
0!L OR GAS - - - -
609.6
^A !52.4m --APPLICABLE TO lEW'S DRILLED JNDER THE 1978 REGULATION
600 and ISO m
APPLICABLE TO lEW'S DRILLED UNDER THE 1981 REGULATION
FIGURE I DETERMINATION OF CLASS A AND CLASS B INTERVALS
RESOURCES CONSERVATION ALBERTA, CANADA
[ENERGY RESOURCES CONSERVATION BOARD \J ALBERTA, CANADA
ENERGY RESOURCES CONSERVATION BOARD
Calgary, Alberta
Informational letter IJ. 81-28
TO: All Oil and Gas Operators
In order to issue the Board's January 19^2 MD Order on 21 December 1981, the Board requests that applications for the following be submitted no later than 4:00 p,m. on 4 December 1981.
Production Spacing Units
Blocks
Projects
No applications for 1 January 1982 approval will be accepted after the deadline.
DATED at Calgary, Alberta on 12 November 1981 ENERGY RES^RCES CONSERVATION BOARD
:aff Supervisor T^roration Services Oil Department
VO/ds