sdsm&t new horizons in oil and gasimages.sdsmt.edu/learn/speakerpresentations/doll.pdfsoutheast...

Wyoming Oil and Gas Conservation Commission

Thomas E. Doll State Oil and Gas Supervisor

SDSM&T NEW HORIZONS IN OIL AND GAS October 7, 2011



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Wyoming Crude Oil

BOPM WY Sweet $/BO Avg



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37,500,000

50,000,000

62,500,000

75,000,000

87,500,000

100,000,000

112,500,000

125,000,000

137,500,000

150,000,000

162,500,000

175,000,000

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Wyoming Gas Production/Price



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Dril

ling

Rig

s

WY Active Rig Count

Conventional

CBM



2011 Approved Applications for Permit to Drill

Black is Oil Red is Gas Green is Coalbed Star is Confidential



WOGCC 2011 Horizontal APDs by County

104

238

50

45

145

11 19 9



EOG 109 Chesapeake 97 Mack 50 Devon 28 Noble 24 Lance 24 Anadarko 22 Samson Res 20 SM Energy 16 Petro-Hunt 15 Bill Barrett 14 Sundance 14 Continental Prod 12 Texas American 11

WOGCC 2011 Horizontal Permits by Operator



Codell 21 Frontier 45

Niobrara 369

Parkman 47 Sussex 35

Turner 83

WOGCC 2011 Horizontal APDs by Formation

Mowry 13



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Albany Platte Weston Goshen Crook Niobrara Laramie

Southeast WY 2010 & 2011 APD's Approved + 2011 BOP

2010 APD

2011 APD

2011 BOP



Does not include coalbed methane 0

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Natrona Sheridan Converse Campbell Johnson

Northeast & Central Wyoming 2010 & 2011 APD's Approved + 2011 BOP

2010 APD

2011 APD

2011 BOP



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Hot Springs Washakie Big Horn Park Uinta Lincoln Carbon Sweetwater Sublette

Western WY 2010 & 2011 APD's Approved + 2011 BOP Call-in

2010 APD

2011 APD

2011 BOP



EPA PROPOSED AMENDMENTS TO AIR REGULATIONS FOR THE OIL AND GAS INDUSTRY For oil and gas production operations, natural gas hydraulic fracturing flowback, condensate & oil storage tanks, compressors, small glycol dehydrators, pneumatic controllers, natural gas processing plants, leaking valves, and several other sources of pollution not currently regulated at the federal level final standards by 28 February 2012. http://www.epa.gov/airquality/oilandgas Comment at http://www.regulations.gov using Docket EPA-HQ-QAR-2010-0505 BLM DIVERTER VARIANCE BLM High Plains District-Petroleum Association of Wyoming-Commission continue working together for minimum standards when requesting Onshore Order No. 2 variance for the use of a diverter in the Powder River Basin coalbed methane drilling.

ISSUES IN WYOMING



ISSUES IN WYOMING



MICROBIAL ENHANCEMENT RULE AMENDMENTS: As per direction from the Oil and Gas Conservation Commission (OGCC) at the August 9, 2011 hearing staff edited the rule language for restoration or enhancement of the microbial conversion of hydrocarbon substrates to methane gas. This new draft language was heard September 20, 2011 as Docket 330-2011 and a Special Commission meeting was held on September 29, 2011 to discuss additional public comment received. The Commission determined that due W.S. 30-5-128 statutory requirements and existing rule language on unitization and to set bond amounts, the previous and current drafts of rule amendment language are not necessary for the restoration or enhancement of the microbial conversion process. Previously discussed drivers for this decision came from the following:

The EPA Safe Drinking Water Act (SWDA) Underground Injection Control Program (UIC) definitions state that this microbial enhancement injection process can only be permitted as UIC Class II or UIC Class V injection and not both; and The Department of Environmental Quality (DEQ), due to EPA SWDA and UIC primacy,

will permit restoration or enhancement of the microbial conversion of hydrocarbon substrates to methane gas under UIC Class V injection.

ISSUES IN WYOMING



PAVILLION GROUNDWATER UPDATE: OGCC, SEO, DEQ, EPA, BLM, EnCana and landowners continue cooperative efforts with Working Groups established to look into Gas Well Integrity and Pits. Public update meeting was held in Riverton on 31 August. Pit Working Group: Encana has collected soil samples of 11 sites of potential of 32 sites identified as landowner concern, sample analysis will follow. The goal is to reach closure on the investigation of these pits. Well Integrity Working Group: 38 wells previously identified out of the total 169 wells in the Pavillion area (24 of 38 are federal Tribal minerals) for bradenhead pressure testing; Encana tested bradenhead pressure at 34, only 4 wells were found pressure above 0 psi with 2 wells casing-annulus pressure exceeding 100 psi. Further discussion scheduled. The goal is to reach closure on investigation of well integrity. The Wyoming State Geological Survey presented the surface and subsurface geology of the Wind River formation in the Pavillion area. Water Development Commission study of alternative water supply was presented at a public meeting in Pavillion on 7 September.

ISSUES IN WYOMING


GREATER SAGE-GROUSE CORE AREA PROTECTION Wyoming Oil and Gas Conservation Commission is developing a Policy for Application for

-5, Greater Sage-Grouse Core Area Protection, available at the following website: http://psc.stat.wy.us/pscdocs/dwnload/SageGrouseExecOrder2011-5.pdf The Oil and Gas Conservation Commission is screening all new Applications for Permit to Drill, Form 1, and Sundry Notices, Form 4, to determine if proposed activities are located within a defined Core Population Area. The shape files are available, see Wyoming Game and Fish Department, WGFD, Project Impact Analysis Area PIAA site at ftp://gf.state.wy.us/ select the

GISfiles For those applications falling within a Core Population Area, the Commission is proposing to require the applicant to demonstrate that their proposed activity will not cause declines in Greater Sage-Grouse populations by providing the Commission with a copy of the Project Impact Analysis Area submittals provided to the WGFD. Memorandum of Understanding in place with Office of State Lands. Issue is fee surface.

ISSUES IN WYOMING



WYOMING WELL STIMULATION RULES UPDATE Adopted and implemented in 2010: Four major issues were addressed: 1. The protection of groundwater and the

identification of permitted water supply wells within ¼ mile of the drilling and spacing unit or Commission approved drilling unit;

2. Clarification of requirements for well integrity, casing setting depths, casing design and cementing properties;

3. Requirements for disclosure of well stimulation fluid chemical additives, compounds and concentrations or rates;

4. Requirements for the handling of the well stimulation load fluid recovered.

Aquifer

Impervious Rock Layers

thick

Well Integrity: Casing/Cement

Oil or Gas Reservoir Rock

LESSONS LEARNED - BEST MANAGEMENT PRACTICES: Sample, test and report all adjacent WSW for water

quality and producing rate prior to drilling provides baseline for all future issues. Spill prevention and clean-up: focus for all E & P

operations, concentrate on well stimulation job sites highest potential for groundwater pollution by HF chemicals.

Year Stimulated Well Count

Individual Stimulations

2005 914 3,448

2006 1,132 4,787

2007 1,044 5,171

2008 1,148 6,376

2009 746 5,675

2010 704 5,974

2011 YTD 391 3,775

Almost 100% of oil and natural gas wells drilled in Wyoming are Hydraulic Fracture treated to be commercial; the exception is shallow Coalbed Natural Gas Wells in northeast Wyoming. Wyoming has no documented cases of groundwater contamination caused by HF.

.

Hydraulic Fracturing Treatments in Wyoming

Trend is multiple wells stimulations in the horizontal wellbore



Property Taxes, $524,500,000 for

33.65% of the Assessed Property Value Statewide

Severance Tax, $484,800,000 Federal Royalties,

$569,300,000

Federal Lease Royalties,

$52,400,000

State Royalties, $204,100,000

Sales and Use Taxes,

$103,900,000

Conservation Mill Levy, $4,400,000

Total $1,943,400,000 or approximately $3,448 for every person living in Wyoming

FY 2010 OIL AND GAS PRODUCTION CONTRIBUTION TO STATE AND LOCAL GOVERNMENTS

an annual payroll of over $1.1 billion.



The Wyoming Oil & Gas

Conservation Commission

webpage provides

transparency for all records,

reports, and well data by API number, or by

quarter-quarter, Section,

Township and Range, or by

Operator

Thank you. http://wogcc.state.wy.us

[email protected]

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