Title 20 Miscellaneous Boards and Commissions Chapter 25 Alaska Oil and Gas Conservation Commission Article 1. Drilling. (20 AAC 25.005 - 20 AAC 25.080) 2. Abandonment and Plugging. (20 AAC 25.105 - 20 AAC 25.172) 3. Production Practices. (20 AAC 25.200 - 20 AAC 25.290) 4. Reports. (20 AAC 25.300 - 20 AAC 25.320) 5. Enhanced Recovery. (20 AAC 25.402 - 20 AAC 25.460) 6. General Provisions. (20 AAC 25.505 - 20 AAC 25.630) 7. Definitions. (20 AAC 25.990) Annotations Editor's note: This chapter is based on the former regulations of the division of oil and gas conservation formerly located in 11 AAC 22. —————————— Article 1 Drilling Section 5. Permit to drill. 10. Re-entry of a suspended well. 15. Changes to a program in a permit to drill. 20. Designation of operator. 22. Notice of ownership. 25. Bonding. 26. Claims. 30. Casing and cementing. 33. Primary well control for drilling: drilling fluid program and drilling fluid system. 35. Secondary well control for primary drilling and completion: blowout prevention equipment and diverter requirements. 36. Secondary well control for through-tubing drilling and completion: blowout prevention equipment requirements. 37. Well control requirements for other drilling and completion operations. 40. Well identification. 45. (Repealed). 47. Reserve pits and tankage. 50. Wellbore surveys. 55. Drilling units and well spacing. 61. Well site surveys. 65. Hydrogen sulfide. 66. Gas detection. 70. Records and reports. 71. Geologic data and logs. 72. Temporary shutdown of drilling or completion operations. 75. Other wells in designated areas. 80. Annular disposal of drilling waste. 20 AAC 25.005. Permit to drill Statute text (a) Before drilling or redrilling a well or re-entering an abandoned well, a person shall submit and obtain the commission's approval of an application for a Permit to Drill (Form 10-401). If, after drilling a well, a person wishes immediately to redrill below the structural or conductor casing to a new bottom-hole location not requiring a spacing exception under 20 AAC 25.055, the person may request oral approval from the commission to avoid interruption of operations. If oral approval is obtained, the name of the representative of the commission who provided oral approval and the date of the approval must be included on the application for a Permit to Drill, which must be submitted by the commission's next working day for final approval by the commission. (b) The commission will classify a well as (1) exploratory; (2) development, either oil or gas; (3) service; or (4) stratigraphic test. (c) An application for a Permit to Drill must be accompanied by each of the following items, except for an item already on file with the commission and identified in the application: (1) a fee of $100 payable to the State of Alaska/AOGCC; (2) a plat identifying the property and the property's owners and showing (A) the coordinates of the proposed location of the well at the surface, at the top of each objective formation, and at total depth, referenced to governmental section lines; (B) the coordinates of the proposed location of the well at the surface, referenced to the state plane coordinate system for this state as maintained by the National Geodetic Survey in the National Oceanic and Atmospheric Administration; (C) the proposed depth of the well at the top of each objective formation and at total depth; and (D) other information required by 20 AAC 25.050(b); (3) a diagram and description of the blowout prevention equipment (BOPE) as required by 20 AAC 25.035, 20 AAC 25.036, or 20 AAC 25.037, as applicable; (4) information on drilling hazards, including (A) the maximum downhole pressure that may be encountered, criteria used to determine it, and maximum potential surface pressure based on a pressure gradient to surface of 0.1 psi per foot of true vertical depth, unless the commission approves a different pressure gradient that provides a more accurate means of determining the maximum potential surface pressure; (B) data on potential gas zones; and (C) data concerning potential causes of hole problems such as abnormally geo-pressured strata, lost circulation zones, and zones that have a propensity for differential sticking; (5) a description of the procedure for conducting formation integrity tests, as required under 20 AAC 25.030(f); (6) a complete proposed casing and cementing program as required by 20 AAC 25.030, and a description of any slotted liner, pre-perforated liner, or screen to be installed; (7) a diagram and description of the diverter system as required by 20 AAC 25.035, unless this requirement is waived by the commission under 20 AAC 25.035(h)(2); (8) a drilling fluid program, including a diagram and description of the drilling fluid system, as required by 20 AAC 25.033; (9) for an exploratory or stratigraphic test well, a tabulation setting out the depths of predicted abnormally geo-pressured strata as required by 20 AAC 25.033(f); (10) for an exploratory or stratigraphic test well, a seismic refraction or reflection analysis as required by 20 AAC 25.061(a); (11) for a well drilled from an offshore platform, mobile bottom-founded structure, jack- up rig, or floating drilling vessel, an analysis of seabed conditions as required by 20 AAC 25.061(b); (12) evidence showing that the requirements of 20 AAC 25.025 have been met; (13) a copy of the proposed drilling program; (14) a general description of how the operator plans to dispose of drilling mud and cuttings and a statement of whether the operator intends to request authorization under 20 AAC 25.080 for an annular disposal operation in the well. (d) For a well that is to be intentionally deviated, the requirements of 20 AAC 25.050(b) must be met. (e) Each well branch requires a separate Permit to Drill. If a previously drilled well is proposed to be redrilled below the structural or conductor casing to a new bottom-hole location, the application for a Permit to Drill must be accompanied by all items required under (c) of this section. If concurrent multiple well branches are proposed from a single conductor, surface, or production casing, (1) the applicant shall designate one well branch as the primary wellbore and include all items required under (c) of this section with the application for a Permit to Drill for that well branch; and (2) for each other well branch, the application for a Permit to Drill need only include information under (c) of this section that is unique to that well branch and need not be accompanied by the $100 fee. (f) Each well must be identified by a unique name designated by the operator and a unique API number assigned by the commission under 20 AAC 25.040(b). For a well with multiple well branches, each branch must similarly be identified by a unique name and API number by adding a suffix to the name designated for the well by the operator and to the number assigned to the well by the commission. (g) If drilling operations are not commenced with 24 months after the commission approves an application for a Permit to Drill, the Permit to Drill expires. (h) A Permit to Drill is not valid at a location where the applicant does not have a right to drill for oil and gas. History History: Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am 6/4/2000, Register 154; am 1/5/2006, Register 177; am 12/28/2006, Register 180 Annotations Authority: AS 31.05.030 AS 31.05.090 20 AAC 25.010. Re-entry of a suspended well Statute text (a) Before re-entering a suspended well to conduct completion operations, the operator shall submit and obtain the commission's approval of an Application for Sundry Approvals (Form 10-403). The Application for Sundry Approvals must set out the current condition of the well and the proposed program for completion operations. (b) Before re-entering a suspended well to conduct drilling operations, the operator shall submit and obtain the commission's approval of an application for a Permit to Drill (Form 10-401) in conformance with 20 AAC 25.005. (c) The operator shall file with the commission within 30 days after completion, abandonment, or suspension of the well a Well Completion or Recompletion Report and Log (Form 10-407) and all information required by 20 AAC 25.070(3) and 20 AAC 25.071. History History: Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152 Annotations Authority: AS 31.05.030 AS 31.05.090 20 AAC 25.015. Changes to a program in a permit to drill Statute text (a) To change a program approved in a Permit to Drill (Form 10-401) before drilling operations start, the operator shall (1) submit and obtain the commission's approval of a new application for a Permit to Drill if the proposed surface location is changed, if the proposed bottom-hole location or the proposed location of an objective formation is changed by more than 500 feet laterally or vertically, or if the change requires a spacing exception under 20 AAC 25.055; however, no additional fee is required; or (2) otherwise notify the commission and obtain its approval of the change if the change is not covered by (1) of this subsection. (b) To change a program approved in a Permit to Drill or to change information under 20 AAC 25.005(c) after drilling operations start, the operator shall (1) submit and obtain the commission's approval of a new application for a Permit to Drill, accompanied by a fee of $100, if the proposed bottom-hole location or the proposed location of an objective formation is changed by more than 500 feet laterally or vertically, or if the change requires a spacing exception under 20 AAC 25.055; or (2) submit and obtain the commission's approval of an Application for Sundry Approvals (Form 10-403) if the change is not covered by (1) of this subsection; the Application for Sundry Approvals must set out the approved program, the current condition of the well, and the proposed changes; in cases where prompt approval is needed, oral approval may be requested from the commission; if oral approval is obtained, the name of the representative of the commission who provided oral approval and the date of the approval must be included on the Application for Sundry Approvals, which must be submitted within three days for final approval by the commission. History History: Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am 1/5/2006, Register 177 Annotations Authority: AS 31.05.030 AS 31.05.090 20 AAC 25.020. Designation of operator Statute text If an owner of a property wishes to designate a new operator for the property, the owner shall submit to the commission for approval a Designation of Operator (Form 10-411). The commission will not approve the designation of a new operator without the signature of the newly designated operator on the same Designation of Operator form. By signing the Designation of Operator form, the newly designated operator agrees to accept the obligations of an operator. The newly designated operator shall furnish a bond and, if required, security as provided for in 20 AAC 25.025. The commission's acceptance of the designated operator's bond constitutes the release of the former operator's bonding obligation for the property indicated on the Designation of Operator form. History History: Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152 Annotations Authority: AS 31.05.030 20 AAC 25.022. Notice of ownership Statute text Within 15 days after a person becomes an owner of a property on which operations subject to this chapter are proposed to the commission or are being conducted, the person shall file a Notice of Ownership (Form 10-417). History History: Eff. 4/2/86, Register 97; am 11/7/99, Register 152 Annotations Authority: AS 31.05.030 20 AAC 25.025. Bonding Statute text (a) An operator proposing to drill a well for which a permit is required under 20 AAC 25.005 shall file a bond and, if required under (2) of this subsection, security to ensure that each well is drilled, operated, maintained, repaired, and abandoned and each location is cleared in accordance with this chapter. The bond must be (1) a surety bond issued on Form 10-402A in favor of the Alaska Oil and Gas Conservation Commission by an authorized insurer under AS 21.09 whose certificate of authority is in good standing; or (2) a personal bond of the operator on Form 10-402B accompanied by security guaranteeing the operator's performance; security must be in the form of a certificate of deposit or irrevocable letter of credit issued in the sole favor of the Alaska Oil and Gas Conservation Commission by a bank authorized to do business in the state, or must be in another form that the commission determines to be adequate to ensure payment. (b) A bond and, if required, security must be in the amount of not less than $100,000 to cover a single well or not less than $200,000 for a blanket bond covering all of the operator's wells in the state, except that the commission will allow an amount less than $100,000 to cover a single well if the operator demonstrates to the commission's satisfaction in the application for a Permit to Drill (Form 10-401) that the cost of well abandonment and location clearance will be less than $100,000. (c) A bond and, if required, security must remain in effect until the abandonment of all wells covered by them and until the commission approves final clearance of the locations. The commission will then release the bond and security upon written request of the operator. (d) Payment under a surety bond or security does not relieve an operator from the requirements of AS 31.05 and this chapter except to the extent that a default is actually cured, or from any liability under AS 31.05.150. History History: Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152 Annotations Authority: AS 31.05.030 AS 31.05.150 20 AAC 25.026. Claims Statute text Commission approval of the abandonment of a well and the release of the bond required by 20 AAC 25.025 constitutes a presumption of proper abandonment, but does not relieve an operator of further claim by the commission after the abandonment. History History: Eff. 4/13/80, Register 74; am 11/7/99, Register 152 Annotations Authority: AS 31.05.030 20 AAC 25.030. Casing and cementing Statute text (a) A complete proposed well casing and cementing program must be submitted with an application for a Permit to Drill (Form 10-401). Unless modified or altered by pool rules established under 20 AAC 25.520, a well casing and cementing program must be designed to (1) provide suitable and safe operating conditions for the total measured depth proposed; (2) confine fluids to the wellbore; (3) prevent migration of fluids from one stratum to another; (4) ensure control of well pressures encountered; (5) protect against thaw subsidence and freezeback effects within permafrost; (6) prevent contamination of freshwater; (7) protect significant hydrocarbon zones; and (8) provide well control until the next casing is set, considering all factors relevant to well control including formation fracture gradients, formation pressures, casing setting depths, and proposed total depth. (b) General well casing and cementing provisions are as follows: (1) casing design and setting depth must be based on engineering and geologic factors relevant to the immediate vicinity, including the presence or absence of hydrocarbons, potential drilling hazards, and permafrost; (2) for all casing strings on which blowout prevention equipment (BOPE) will be installed, cement may not be drilled out until sufficient compressive strength has been reached to obtain a valid formation integrity test; (3) within permafrost intervals, fluids that have a freezing point above the minimum permafrost temperature may not be left in casing-by-casing annuli or inside the casing upon completion, suspension, or shutdown of well operations, without commission approval of an alternate method that the commission determines will prevent damage to the casing; (4) if casing is subjected to prolonged drilling operations, the commission will, as necessary to verify casing integrity, require the casing to be pressure-tested, calipered, or otherwise evaluated by a method approved by the commission; (5) if zonal coverage is required under (a) of this section, and the commission believes zonal isolation might not have been established, the commission will require a cement quality log or other method to demonstrate isolation of the zone. (c) Specific well casing provisions are as follows: (1) structural casing must be set by driving, jetting, or drilling to a minimum depth of 70 feet in offshore wells to support unconsolidated shallow strata, to provide hole stability for initial drilling operations, and to provide a competent anchor for a diverter system; (2) for onshore wells, conductor casing must be set by driving, jetting, or drilling to a depth sufficient to provide anchorage for a diverter system, and for offshore wells, conductor casing must be set no less than 300 feet and no more than 1,000 feet below the mudline datum; however, the commission will (A) approve a different casing setting depth if necessary to permit the casing shoe to be set in a competent formation or below formations that should be isolated; or