Statewide Rules 10 Downhole Commingling and 32 Venting
- Slides: 57
Statewide Rules 10 (Downhole Commingling) and 32 (Venting and Flaring) Rick Behal and Travis Baer - August 2017 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide)
Class Synopsis Statewide Rule 10 (SWR 10) • • • Rule Exception Application Online Completions Frac Port Completions Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide)
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 3
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 4
Wellbore Schematic Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide)
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 6
Multi-Completion vs DHC Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide)
Requesting an Exception • Application procedure – Fill out the 19 -question datasheet: –http: //www. rrc. texas. gov/media/2745/rule 10 w. do c – Serve notice to affected offsets. – Mail to the Engineering Unit in Austin – $375 application fee – One well per application Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide)
Filling out the datasheet… Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 9
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 (H 2 S) Fields and Concentration Listing http: //www. rrc. state. tx. us/oil-gas/research-and -statistics/field-data/h 2 s/ Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 10
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) Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 11
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 12
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. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 13
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)? Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 14
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 15
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. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 16
Wellbore Diagram Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide)
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 / welldeveloped areas, it is reasonable for estimates to be provided Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 18
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. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 19
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 20
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. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 21
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 22
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 23
Completion Report (Form G-1/W-2) • Completion Report Requirements – SWR 10 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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 24
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. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 25
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. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 26
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 gas. ID#. Non-reporting fields are carried on schedule with a SWR 10 code that are not eligible for an allowable. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 27
Frac Port Completions 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 confinement Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 28
Frac Port Completions • Field 1 is exposed to uncemented pipe. SWR 13 violation. • Field 1 is not considered downhole commingled because field 1 is not completed in the production string. • A SWR 10 exception cannot resolve this issue. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide)
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 30
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 31
Statewide Rule 32: Venting and Flaring Presented by: Travis Baer Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide)
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. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 33
Statewide Rule 32 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 34
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 35
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 gathering systems or gas plants. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 36
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 37
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) Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 38
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 39
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) Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 40
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 41
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) Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 42
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. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 43
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 44
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. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 45
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 46
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 47
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 48
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 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 49
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. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 50
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. Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 51
Flaring Permits Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 52
Statewide Flaring Percentage Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 53
Flaring Frequently Asked Questions: Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 54
Oil and Gas District Offices Abilene Corpus Christi Houston Kilgore Midland Pampa San Angelo San Antonio Wichita Falls Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) 55
District Offices District 1&2 City San Antonio Address 112 East Pecan St, Suite 705 San Antonio, TX 78205 3 Houston 1706 Seamist Dr, Suite 501 Houston, TX 77008 4 Corpus Christi 10320 IH 37 Corpus Christi, TX 78410 5&6 Kilgore 2005 North State Highway 42 Kilgore, TX 75662 7 B Abilene 3444 North First St, Suite 600 Abilene, TX 79603 7 C San Angelo 622 South Oakes St, Suite J San Angelo, TX 76903 8 & 8 A Midland 10 Desta Dr, Suite 500 E Midland, TX 79705 9 Wichita Falls 5800 Kell Blvd, Suite 300 Wichita Falls, TX 76310 10 Pampa 200 West Foster, Room 300 Pampa, TX 79065 Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide) Phone (210) 227 -1313 (713) 869 -5001 (361) 242 -3113 (903) 984 -3026 (325) 677 -3545 (325) 657 -7450 (432) 684 -5581 (940) 723 -2153 (806) 665 -1653
Travis Baer, P. E. District Director – San Antonio District Office Email: travis. baer@rrc. texas. gov Phone: (210) 227 -1313 (x 15) Railroad Commission of Texas | June 27, 2016 (Change Date In First Master Slide)
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