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Bulletin 2006-45

December 19, 2006

Pressure Testing Requirements—Athabasca Wabiskaw-McMurray

Background

In Decision 2005-122 Addendum: Phase 3 Final Proceeding Under Bitumen Conservation Requirements in the Athabasca Wabiskaw-McMurray, December 21, 2005, the Alberta Energy and Utilities Board (EUB/Board) stated it would discuss with interested parties the need for additional pressure monitoring requirements in the Regional Geological Study (RGS) Area. The RGS Area is shown in the attached report. The decision identified two pressure monitoring requirements that needed to be reviewed:

1) pressure monitoring to aid in the determination of reservoir continuity, and

2) pressure monitoring to confirm segregation in and around wellbores where one interval was allowed to produce and another interval was required to be shut in.

The discussion with interested parties was done by setting up two EUB-industry committees: a Reservoir Continuity Committee and a Segregation Testing Committee.

Reservoir Continuity Committee Recommendations

The Board has reviewed and accepts the recommendations of the Reservoir Continuity Committee (see attachment). Specifically:

1) The Board will not set additional pressure monitoring requirements for the RGS Area to aid in the determination of reservoir continuity.

2) However, the Board encourages oil sands and P&NG leaseholders to assess the need for additional pressure monitoring on their leases to aid in the determination of reservoir continuity. If pressure data are acquired that raise concerns about gas production, the leaseholders should try to resolve their concerns with the other affected parties. If the parties are not able to resolve their concerns, the concerns should be brought before the EUB.

3) The Board reminds oil sands and P&NG leaseholders that all pressure data collected must be submitted to the EUB, including any data^a over and above the minimum requirements of Directive 040: Pressure and Deliverability Testing Oil and Gas Wells, December 2006.

As the work of the Segregation Testing Committee is still under way, its recommendations will be dealt with at a later date.

Questions should be directed to Gary Dilay at (403) 297-3561.

(Original signed by)


Earle Shirley, P.Geol.
Executive Manager
Applications Branch

^a As stated in Directive 040, only those tests conducted under controlled conditions need to be submitted to the EUB. A casual reading of a wellhead pressure with a portable dial gauge or a pumping fluid level need not be reported. Likewise, a test that failed and has no useful information need not be submitted, with the exception of drillstem tests, for which all tests must be submitted, including misruns.

 Attachment

Bulletin 2006-45 Attachment

November 8, 2006

REPORT OF THE RESERVOIR CONTINUITY COMMITTEE

RECOMMENDATIONS
The Reservoir Continuity Committee (the committee) recommends that the Alberta Energy and Utilities Board (EUB/Board) not set additional pressure monitoring requirements for the Regional Geological Study (RGS) area shown on Figure 1. However, oil sands and P&NG leaseholders should be encouraged by the EUB to assess the need for additional pressure monitoring on their leases. If pressure data are acquired that raise concerns with gas production, the leaseholders should try to resolve their concerns with the other affected parties. If the parties are not able to resolve their concerns, the concerns should be brought before the EUB.

The oil sands and P&NG leaseholders should be reminded that all pressure data¹ that are collected must be submitted to the EUB, including any data over and above the minimum requirements of Directive 40.

BACKGROUND
In EUB Decision 2005-122 Addendum² the Board noted that Petro-Canada requested the Board to order a pressure monitoring program throughout its Chard lease area to aid in the determination of reservoir continuity within the Wabiskaw-McMurray, and that Petro-Canada stated it would support a Board initiative to order pressure monitoring throughout the Athabasca area where it is warranted. Canadian Natural Resources Limited supported the idea of a pressure monitoring program subject to the extent and cost of the program being determined by further consultation with industry. Nexen Canada Ltd. supported a pressure monitoring program following consultation with industry. Paramount Energy Operating Corp. indicated there were many questions that needed to be answered before it could support a pressure monitoring program.

In Decision 2005-122 Addendum, the Board stated it would discuss with interested parties the need for additional pressure monitoring requirements in the RGS area. On March 8, 2006 EUB staff met with interested parties and there was agreement that a committee should be formed to consider the matter. The committee membership is shown on Table 1.

DISCUSSION
The committee believes that additional pressure monitoring, particularly pressure monitoring of shut-in gas intervals, could be useful to confirm whether the appropriate gas production has been shut in by the proceedings under the Bitumen Conservation Requirements. As noted in the proceedings, there were limitations in the quality and quantity of the available pressure data and as a result, decisions regarding gas production were largely based on geological data rather than pressure data. However, using appropriate pressure data is the most direct way to determine whether there is pressure communication between gas zones and between gas and bitumen zones. Declining pressures measured in shut-in intervals at gas wells and declining pressures measured in gas and bitumen zones at piezometers installed in observation wells could indicate that the appropriate gas production has not been shut in. However, interpretation of the data would still be required since declining pressures could, for example, be caused by the shut-in gas intervals being in communication with other shut-in gas intervals that are at lower pressures than the intervals being monitored.

While the committee believes that additional pressure monitoring could be useful, the committee also believes that deciding whether additional pressure data should be gathered would need to be done on a site specific basis. Because of the complex geology of the Wabiskaw-McMurray, each specific situation would need to be evaluated to determine whether a properly designed pressure monitoring program could be conducted. The specific presence and arrangement of porous zones (gas, water, and bitumen) and mudstones, and the gas and water pooling would need to be considered. The accessibility of intervals that have been shut in (i.e. whether the intervals are open to the wellbore, have been cement squeezed, or have been isolated by packers or plugs) and whether the intervals are in a commingled state would also have to be considered.

The committee considered recommending that each oil sands leaseholder be required to coordinate, with the affected P&NG leaseholders, an assessment of the need for additional pressure monitoring on its specific leases and that these assessments be submitted to the EUB. However, because of the large size of the RGS area, this would involve a large number of assessments. Within the RGS area there are about 55 companies with oil sands leases and there are about 30 companies with P&NG leases (about 15 of the companies own both oil sands and P&NG leases). Of the 55 companies with oil sands leases, about 20 of them are landholding companies so the identities of the petroleum companies who own the oil sands leases are not known. In these situations, joint assessments by the oil sands and P&NG leaseholders could be problematic since it is assumed that the petroleum companies would not want to identify themselves. Some of the oil sands leaseholders own several leases and where the leases are far apart, separate assessments would have to be made because of the need to make the assessments on a site specific basis. The EUB would be required to make a ruling on any assessments where there are disagreements between the oil sands and the P&NG leaseholders on the need for additional pressure monitoring requirements, or where the EUB is not satisfied with the assessments even if there is agreement between the oil sands and P&NG leaseholders.

Considering the large number of assessments that would have to be done by the oil sands and P&NG leaseholders and reviewed by the EUB, the interpretive nature of pressure data, and the extensive reviews of gas production that were done in the proceedings under the Bitumen Conservation Requirements, the committee is not convinced that requiring the assessments is warranted. This view is consistent with the Board’s view in Decision 2003-023 , where the issue of requiring a pressure monitoring program was also addressed. In its decision, the Board stated that although it acknowledged that pressure monitoring would assist in validating its geological interpretation, the Board believes that the development and implementation of a properly designed program would be quite difficult, given such factors as the highly interpretive nature of pressure data from the Wabiskaw-McMurray and the amount of time needed to collect it. As a result, the Board was not convinced that the overall cost/benefit of such a program would warrant the Board directing that one be implemented. Rather, the Board encouraged the P&NG and oil sands leaseholders to cooperatively develop and implement a pressure monitoring program that was acceptable to all parties.

Although the committee is not recommending that assessments be required, the committee believes that, similar to what was done in Decision 2003-023³, oil sands and P&NG leaseholders should be encouraged by the EUB to assess the need for additional pressure monitoring on their leases If pressure data are acquired that raise concerns with gas production, the leaseholders should try to resolve their concerns with the other affected parties. If the parties are not able to resolve their concerns, the concerns should be brought before the EUB.

In General Bulletin 2001-15⁴ the EUB stated it was aware that the requirement to collect and submit well data to the EUB is not always being followed by all well licensees. The committee believes that the EUB should remind oil sands and P&NG leaseholders that all pressure data that are collected must be submitted to the EUB, including any data over and above the minimum requirements of Directive 40.

Table 1. Reservoir Continuity Committee Membership
 

Organization	Person
Alberta Energy and Utilities Board	Gary Dilay
Canadian Natural Resources Limited	Arthur Faucher
Devon Canada Corporation	Vincent Topacio
EnCana Corporation	Sandeep Solanki, Scott Obrigewitsch, Donna McLeod
Husky Oil Operations Limited	John Eubank
Imperial Oil Resources Limited	Susan Stark
Nexen Canada Ltd.	Lori Skulski
Paramount Energy Operating Corp.	Brett Norris, Larry Martinuzzi
Petro-Canada	John Palmer

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¹ As stated in Directive 40: Pressure and Deliverability Testing Oil and Gas Wells, Minimum Requirements and Recommended Practices, May 1999, only those tests conducted under controlled conditions need to be submitted to the EUB. A casual reading of a wellhead pressure with a portable dial gauge or a pumping fluid level does not have to be submitted. Likewise, a test that failed and has no useful information need not be submitted, with the exception of drillstem tests, for which all tests must be submitted, including misruns.
² Decision 2005-122 Addendum: Phase 3 Proceeding Under Bitumen Conservation Requirements in the Athabasca Wabiskaw-McMurray, December 21, 2005.
³ Decision 2003-023: Chard Area and Lesimer Field, Athabasca Oil Sands Area, Applications for the Production and Shut-in of Gas, March 18, 2003.
⁴ General Bulletin GB 2001-15: Collection and Submission of Well Data to the EUB, July 31, 2001


Figure 1. Regional Geological Study (RGS) Area