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Bulletin 2007-18

July 3, 2007

Revised Edition of Directive 065: Resources Applications for Conventional Oil and Gas Reservoirs Issued

The July 2007 edition of Directive 065: Resource Applications for Conventional Oil and Gas Reservoirs contains two sets of revisions.

First, the Alberta Energy and Utilities Board (EUB) is implementing the next phase of the commingling plan approved by the EUB, as announced in Bulletin 2006-28: Changes to the Management of Commingling of Production from Two or More Pools in the Wellbore. This phase of the initiative is to implement amended requirements for commingling applications filed in accordance with Directive 065.

Second, this edition of Directive 065 incorporates revisions respecting compliance assurance to ensure that the directive is consistent with Directive 019: EUB Compliance Assurance Enforcement.

Background
Commingled Production

On August 8, 2006, the EUB issued Bulletin 2006-28, announcing the EUB's decision to provide three processes for the management of commingled production from two or more pools in the wellbore:

• development entity (DE),
• self-declared (SD) commingling, and
• approval of an application submitted in accordance with Section 3.1 of Directive 065.

On October 31, 2006, the EUB issued Bulletin 2006-38: Implementation of Development Entities for Management of Commingled Production from Two or More Pools in the Wellbore, announcing the implementation of the DE process for commingling. On December 15, 2006, the EUB issued Bulletin 2006-44: Implementation of Self-Declared Process for the Management of Commingled Production from Two or More Pools in the Wellbore, announcing the implementation of the SD commingling process.

If proposed commingling in a well does not meet the criteria for commingling under the DE or SD processes, the operator has the option of applying to the EUB for approval for commingling through an application filed in accordance with Directive 065. This bulletin announces revisions to Directive 065 regarding requirements for commingling applications.

Further information on the commingling of production in the wellbore is available on the EUB Web site www.ercb.ca under Industry Zone : Rules, Regulations, Requirements : Management of Commingling in the Wellbore.

Compliance

Directive 019 became effective January 1, 2006, and sets out the EUB current policy and practice on compliance and enforcement matters.

Revisions to Directive 065 Respecting Applications for Commingling of Production in the Wellbore

The revised requirements for commingling applications

• allow applicants to focus on the criterion that did not permit commingling to occur under the DE or SD processed; thus applicants will not be required to address requirements that are not relevant to the particular situation;
• more fully address area-based commingling applications than has been the case; and
• result in the notification requirements for commingling applications being consistent with current practices and with notification under the DE and SD processes, as well as address the privacy issues of individuals.

Reporting of Commingled Production to the Petroleum Registry of Alberta

Production that has been commingled following the application process must be reported to the Petroleum Registry of Alberta using the commingled pool code supplied to the applicant when the application is approved.

Revisions to Directive 065 Respecting Compliance Assurance

Revisions in the July 2007 edition of Directive 065 ensure that it is consistent with EUB compliance assurance processes as set out in Directive 019. These changes do not reflect any new policies or practices on compliance and enforcement, but are intended to update Directive 065 with respect to current practice on compliance matters.

[Original signed by]

Michael J. Bruni, Q.C.
Executive Manager
Energy Team