Rick Behal and Travis Baer August 2017 Class Synopsis Statewide Rule 10 SWR 10 Rule Exception Application Online Completions Frac Port Completions Applicable Statewide Rule Applicable Statewide Rules ID: 645783
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Slide1
Statewide Rules 10 (Downhole Commingling) and 32 (Venting and Flaring)
Rick Behal and
Travis Baer - August
2017Slide2
Class Synopsis
Statewide Rule 10 (SWR 10)
Rule
Exception
Application
Online Completions
Frac
Port Completions
Slide3
Applicable Statewide Rule
Applicable Statewide Rules:
Statewide Rule 3.10 (SWR 10)
This rule prohibits production from different strata through the same conduit
different strata means two or more different commission-designated fields
On SWR 10 datasheet “zone” = field
3Slide4
Exception to SWR 10
Exception
SWR 10 allows for an exception to the rule
An exception permits downhole commingled production from different commission-designated fields
Requires notice and opportunity for a hearing
Prevent waste or promote conservation or protect correlative rights
4Slide5
Wellbore SchematicSlide6
Down-Hole Commingling
Down-hole Commingle vs. Multi-completion
Both involve completing two or more fields
down-hole commingled: all intervals/fields are producing up the same conduit
Multi-completion: each interval/field is producing up a separate conduit
6Slide7
Multi-Completion vs DHCSlide8
Requesting an Exception
Application procedure
Fill out the 19-question datasheet:
http://www.rrc.texas.gov/media/2745/rule10w.doc
Serve notice to affected offsets.
Mail to the Engineering Unit in Austin
$375 application fee
One well per applicationSlide9
Filling out the datasheet…
Filling out the datasheet…
9Slide10
General Information
Application (Items 1, 2, 3)
Operator and well information
Field information
See O&G proration schedule
Online Research – Field Rules Query
Hydrogen Sulfide (H2S) Fields and Concentration Listing
http://www.rrc.state.tx.us/oil-gas/research-and-statistics/field-data/h2s/
10Slide11
Notice Categories
Application Requirements (Item 4)
Notice Requirements. One of three notice categories will apply:
Initial
Non-initial
Final order (blanket)
How to determine category:
Statewide Rule 10 exception database. Central Records (512-463-6882)
11Slide12
Notice - Affected Operators
Application Requirements (Item 4)
Initial
All operators in each field are considered affected
Non-Initial
All offset operators in the field are considered affected.
Final order (Blanket)
No notice required
Fill out only items 1-4 and 8 on the application
12Slide13
Notice Requirements
Application Requirements (Item 12)
Service list and certification
Signed & dated statement that all affected operators have been provided notice via copy of the application
Notice period is 14 days.
13Slide14
Drilling Permit Requirements
Application Requirements (Items 5,6,7)
Drilling permit & schedule history
All fields must be permitted (Form W-1)
Is the well currently on schedule in each field (multi-completion)?
All fields at regular locations (SWR 37)?
14Slide15
Royalty and Working Interest
Application Requirements (Item 8)
Zone ownership
Royalty and working interests of proposed combined fields must be identical. If not, hearing is required
15Slide16
Top of Cement (SWR 13)
Application Requirements (Items 11)
Wellbore diagrams (current and proposed)
Indicate where tubing will be set.
Indicate the tops of cement for each casing string. TOC must comply with SWR 13
Indicate perf range in each field.
16Slide17
Wellbore DiagramSlide18
Shut-in and Flowing Pressure
Application Requirements (Items 9, 13)
Pressure information
Shut-in pressure
Flowing pressure
Capable of flowing without artificial lift?For wells in low-pressure zones / well-developed areas, it is reasonable for estimates to be provided
18Slide19
Down-Hole Commingling
Application Requirements (Item 15)
Crossflow and migration
The well must comply with SWR 3.7 (Strata to be Sealed Off)
A down-hole commingling exception
should not be proposed as a resolution to a violation of cementing and isolation requirements.
19Slide20
Production Capabilities
Application Requirements (Item 10, 17)
Production information
Producing capabilities of each field
Economic limit and ultimate recovery without commingling
Economic limit and ultimate recovery with commingling
Ultimate recovery for each zone=higher with commingling than without
20Slide21
Justification for DHC
Application Requirements (Item 14, 18)
Why not multiple completion?
Mechanically impractical?
Economically impractical?
Plan if application not approved? Examples: Will not be economical to complete; complete one zone and leave the other(s) unrecovered; complete one zone at a time; etc.
21Slide22
Fluid Compatibility
Application Requirements (Item 16)
Evidence of fluid compatibility
Operators are responsible for:
Produce in a practicable manner
Accounting for scale build up and treatment
22Slide23
Reporting Field Selection
Application Requirements (Item 19)
Reporting field selection
Operator request is accommodated
if possible
Gas wells: Field with most restrictive gas allowable unless all fields 100% Absolute Open Flow (AOF)
Oil wells: Field with lowest allowable
Horizontal/vertical commingled completions: Field with horizontal is reporting field
23Slide24
Completion Report (Form G-1/W-2)
Completion Report Requirements
SWR10 Exception should be approved before the completions are filed.
A well is considered non-compliant if the exception has not been approved
The operator should reference SWR 10 approval date in the remarks section of the completion
24Slide25
Completion Report (Form G-1/W-2)
Completion Report Requirements
Must report formation tops, perforations and completion interval for each field
Commingling at a later date?
“leave permit open for future SWR 10”
The SWR 10 approval letter must be attached and the fields must match the drilling permit.
Approved fields should be valid, i.e. not consolidated .
25Slide26
Oil Wells (Form W-2)
Completion Report - Oil Wells (Form W-2)
Must have approved Drilling Permit
File one W-2 for the
reporting field only
.
For oil wells, only 1 lease number will be carried on schedule at a time
Existing lease number should be listed in the work over section of the Packet Data.
26Slide27
Gas Wells (Form G-1)
Completion Reports - Gas Wells (Form G-1)
File a G-1
for each field
.
“Initial Potential” for the reporting field
“Well Record Only” for each non-reporting field.
A combined G-10 test for all producing intervals is required.
All production filed under the reporting
gasID
#.
Non-reporting fields are carried on schedule with a SWR 10 code that are not eligible for an allowable.
27Slide28
Frac Port Completions
28
What questions does this raise with regard to down-hole commingling?
The technology allows multi-stage fracture stimulation without cementing the production liner
Uses open-hole packers for interval confinement
Statewide Rule 13
does not
recognize open-hole packers for vertical confinementSlide29
Frac
Port Completions
Field 1 is exposed to uncemented pipe. SWR 13 violation.
Field 1 is not considered down-hole commingled because field 1 is not completed in the production string.
A SWR 10 exception
cannot
resolve this issue.Slide30
Frac Port Completions
Completion Report (Form G-1/W-2)
Report the “range” capable of production as the producing interval
The range is evaluated for proper field designation and audited for SWR 10 compliance
Indicate the use of a
frac
port or open hole packer system in the remarks section
30Slide31
CONTACT US
For Technical Questions related to the SWR 10 Exception to Down-hole Commingle contact the Engineering Unit : 512.463.1126
For Questions related to Completion filings for SWR 10/Down-hole commingled wells contact the Well Compliance Unit: 512.463.6975
31Slide32
Statewide Rule 32:
Venting and Flaring
Presented by:
Travis BaerSlide33
RRC Mission
Our mission is to serve Texas by our stewardship of natural resources and the environment, our concern for personal and community safety, and our support of enhanced development and economic vitality for the benefit of Texans.
33Slide34
Statewide Rule 32
34Slide35
Session Description
Exemptions from the rule
When does SWR 32 not apply? No metering required!
Authorized Flaring and Venting (PBR)
Flaring without a permit under special conditions. Meter all gas and report on Production Report.
Flaring Exceptions (permits)
What is required for an exception and what does it do for an operator?
Other Information and statistics
35Slide36
Introduction
Gas must be used for lease operations or sold if it can be readily measured by devices (meters) routinely used in the operations of oil wells, gas wells, gas gathering systems or gas plants.
36Slide37
Exemptions
Tank vapors from:
crude oil storage tanks
gas well condensate storage tanks
salt water storage tanks
Fugitive emissions of gas
Amine
treater
, glycol dehydrator flash tank, and/or
reboiler
emissions
Blowdown
gas from gas handling equipment for construction, maintenance or repair
37Slide38
Exemptions (cont.)
Gas purged from compressor cylinders or other gas handling equipment for startup
Gas released:
at a well site during drilling operations prior to the completion date of the well must be separated from drilling fluids using a mud-gas separator, or mud-degasser
During completion or re-completion (hydraulic fracturing)
38Slide39
Statewide Rule 32
Exemptions from the rule
When does SWR 32 not apply? No metering required!
Authorized Flaring and Venting (PBR)
Flaring without a permit under special conditions. Meter all gas and report on Production Report.
Flaring Exceptions (permits)
What is required for an exception and what does it do for an operator?
Other Information and statistics
39Slide40
Gas releases to be flared or vented
The Commission may require flaring of releases of gas not readily measured if the Commission determines that flaring is required for safety reasons (e.g. high concentrations of H
2
S).
All gas releases
>24 hours
duration shall be burned in a flare, if the gas can burn safely
All gas releases of
<24 hours
duration may be vented to the air if not required to be flared for safety reasons (contact District Office for verification)
40Slide41
Gas Releases Authorized by Rule
Authorized gas releases during production operations must be measured (metered)
and be reported on monthly Production Reports.
Flaring beyond the limits set in the following scenarios requires an exception (permit) to be granted.
Produced gas not to exceed
10
producing days after initial completion, recompletion in another field, or
workover
in the same field.
Gas that must be unloaded from a well may be vented up to
24 hours
in one continuous event or up to
72 cumulative hours
in one month
41Slide42
Gas Releases Authorized by Rule (cont.)
Gas from a lease production facility may be released for up to
24 hours
in the event of a pipeline or gas plant upset.
Gas contained in waste stream from molecular sieve or membrane gas treatment unit, provided at least
85%
of inlet gas is recovered and directed to legal use
Low pressure separator
gas, up to
15
mcfd
for gas wells,
50
mcfd
for oil leases or commingled points (gas must pass through separator, heater-
treater
, free-water knockout, or other low-pressure equipment prior to release)
42Slide43
Gas Releases from gas gathering system or gas plant
May be released for up to
24 hours
in the event of a pipeline or gas plant upset. Notify the local District Office as soon as reasonably possible after release begins.
If gas plant operator presents information that shows necessity of release is justified beyond
24 hours
, operator may continue to flare gas. Operator must file exception request within
one business day
after first
24 hours
of release.
43Slide44
Statewide Rule 32
Exemptions from the rule
When does SWR 32 not apply? No metering required!
Authorized Flaring and Venting
Flaring without a permit under special conditions. Meter all gas and report on PR.
Flaring Exceptions (permits)
What is required for an exception and what does it do for an operator?
Other Information and statistics
44Slide45
Exceptions (a.k.a. “Flare Permits”)
Exceptions are good for
45 days
up to a total of
180 days
May be indefinitely approved administratively with adequate justification if less than
50
mcf
/day
Exceptions for more than
180 days
may only be granted through a final order (hearing) signed by the Commission.
45Slide46
Exceptions
Documentation
required
for permanent exception
cost benefit analysis
map showing nearest pipeline capable of accepting gas
estimate of gas reserves
Fee of
$375.00
per gas well, oil lease, or commingled vent/flare point
Exception may be sent by fax or email, provided a signed original request, accompanied with fee, is received by Commission within
3
business days
46Slide47
Exceptions
If additional time is requested, operator must re-file within
21 days BEFORE
the expiration of existing exception.
If re-filed within
21 days
, the operator is authorized to continue flaring/venting until final approval or denial of the requested permit extension.
If operator files for extension less than
21 days
before expiration or after expiration of the permit, continues to flare during processing of request and the request is denied, operator
may be subject to administrative penalties
47Slide48
Exceptions
Not transferable upon a change of operatorship
Operator has
90 days
to re-file the exception once the P-4 transfer has been approved
48Slide49
Statewide Rule 32
Exemptions from the rule
When does SWR 32 not apply? No metering required!
Authorized Flaring and Venting
Flaring without a permit under special conditions. Meter all gas and report on PR.
Flaring Exceptions (permits)
What is required for an exception and what does it do for an operator?
Other Information and statistics
49Slide50
Additional information
An automated system check for permits if flaring is indicated on Production Reports
If flaring production is not permitted, operator will automatically be sent a Notice of Violation (
30 days
), a Notice of Intent to Sever by certified mail (
30 days
), and then a severance letter, if compliance is not achieved.
A permit extension may be denied if no progress is made to eliminate necessity for flaring.
50Slide51
January 2014 Notice to Industry
…unauthorized venting or flaring of gas may constitute waste. SWR 32 prohibits venting or flaring of gas under certain conditions unless authorized by the Commission. … Any venting/flaring of
casinghead
gas or gas well gas not authorized by SWR 32 or by permit may be subject to administrative penalty action.
An operator whose application to vent or flare gas is denied in whole or in part has the right to request a hearing before the Commission.
51Slide52
Flaring Permits
52Slide53
Statewide Flaring Percentage
53Slide54
Flaring Frequently Asked Questions:
54Slide55
Oil and Gas District Offices
Abilene
Corpus Christi
Houston
Kilgore
Midland
Pampa
San Angelo
San Antonio
Wichita Falls
55Slide56
District Offices
District
City
Address
Phone
1
&
2
San Antonio
112 East Pecan St, Suite 705
San Antonio, TX 78205
(210) 227-1313
3
Houston
1706
Seamist
Dr
, Suite 501
Houston, TX 77008
(713) 869-5001
4
Corpus Christi
10320 IH 37
Corpus Christi, TX 78410
(361) 242-3113
5 & 6
Kilgore
2005 North State Highway 42
Kilgore, TX 75662
(903) 984-3026
7B
Abilene
3444 North First St, Suite 600
Abilene, TX 79603
(325) 677-3545
7C
San Angelo
622 South Oakes St, Suite J
San Angelo, TX 76903
(325) 657-7450
8 & 8A
Midland
10 Desta Dr, Suite 500 E
Midland, TX 79705
(432) 684-5581
9
Wichita Falls
5800
Kell
Blvd, Suite 300
Wichita Falls, TX 76310
(940) 723-2153
10
Pampa
200 West Foster, Room 300
Pampa, TX 79065
(806) 665-1653Slide57
Travis Baer, P.E.
District Director – San Antonio District Office
Email:
travis.baer@rrc.texas.gov
Phone: (210) 227-1313 (x15)