--!C-P T b6 - o;;z -()b Alberta Proration A Year of Transition By N. A.. STROM

(Pl"esmlfed te, the Calgary Section, Petroleum Society of C.I.M., A.p?"il 27.19(6)

ABSTRACT Among the deficiencies of the old proration plan, This paper outlines the Alberta Oil and Gas Conserva­ those which caused greatest concern included the en­ tion Board's De,... plan for prorating crude oil production couragement of the drilling of unnece.ssary develop­ in Alberta_ A review of the objectiYes of the new plan, ment wells, insufficient incentivefol· maximum recov­ the deficiencies of the old plan and the changes adopted ery by enhanced reCOvel'y schemes, insufficient incen­ is first presented, and then the implementation and effects of the plan are discussed_ Sections of the paper are de­ tive to explore for ne\\.- oil reserves, administrative "oted to well spacing changes, maximum rate limitations complexity and a tendenc.r to foster increased operal· and recovery efficiencr. and the achiel'ements noted in ing costs. th(' earl)' stages of the plan are listed_ Therefore, in developing the new pl"Oratioll plan, INTRODUCTION the Board endeavoured to maintain an optimum Iml­ ance in the attainment of objectives, paying heed tu Downloaded from http://onepetro.org/JCPT/article-pdf/5/02/86/2165863/petsoc-66-02-06.pdf/1 by guest on 26 September 2021 URSUANT to its report concerning proration the lack of suitable balance which had led to the de­ P issued in .July, HlG4, the Alberta Oil and Gas Con­ ficiencies of the old plan. In viewing the changes servation Board took steps to implement a new plan adopted in the new proration plan, one can netect of prorating crude oil production in Alberta com­ a persistent emphasis on improving l'ecovery efficien­ mencing on May 1. 1965. The proc.edure of conversion cy and optimizing well spacing. to the new plan proyided for a four-year transition period culminating on April 3D, 1969, Nearly one­ The new plan contains a new bHse fOl" allocating quarter of the transition period has passed, and this market demand among pools, this ba-se being an eQulll paper reviews, at least in part, the effects of the combination of the ultimate reserves apprOl,eh ~l1ld measures adopted in the new plan. the remaining reserves approach (i.e.. U -P12)_ Henc.e. the life factor inherent in the MPR proratiun i~ REVIEW base in the old plan (i.e., MPR = U/Ll eliminateo, with the result that there is no discounting in the The following is a brief revie\v of the objecti"'es proration calculations for wider well spHcillg. Ahw. aimed for in the new plan, the deficiencies of the old the relationship beh\'een the Hpplication of the pro­ plan. and the actual changes adopted to foster the ration base and the provision for well minimum al­ objective~ and overcome the previous deficiencies. [n lowances is altered by the adoption of a floor .system addition to the explicit statutory objectives, which of assigning minimum allowance:;. Through this flnol' ne~d not be repeated here, the objectives sought in system, the \....·ell's allowable is established by appli­ the new proration plan include the following: cation of general proration formulae and only where , 1) the encouragement of efforts to enhance recovery necessary is it ilugmented to provide a rate equ,l! tl) from pools; the minimum. (2) the deferment of the abandonment of 'wells until In the old plan, the hasic allowance system malw...; all apparently economically recoverable oil ha:i first provision for well minimum allowances followed been produced; by alloc~ltion among pools using the general prora­ (:~) provision for the production of low-resel've-per. tion base. The difference hetween the two systems i~ acre discoveries which appear to contain econo­ that the floor system places prime emphasil'l on re­ mically recoverable oil; sen'es and recovery effit"iency whereas the basiC' (.{) to provide a system which is relatively simple to system tends to emphasize the well minimum allow­ administer; ance at the expense of other factors. (5) to provine a method of allocation operable over The new minimum allowance schedule has been a wide range of market conditions, both as to designed to covel' operating co~ts and to par out supply and demand, and allow continuity in the completion costs in about five .rears. In this way. it i!-l production from and development of pools; expected to permit completion amI operation of wells (G) to encourage exploration and not deter any party needed for pool depletion, but it will not be so large a~ illlere~tect from explol·ing for new reserves; to encoul"age the drilling of unnecessary Wl!lls. Thi:-l (7) to maintain the participation in the industry by new schedule will replace the existing two-step mini­ anyone interested; and mum allowance ~chedllle which was developed ill 1957 (81 to encourage the economic optimum development on the basis of CO:its then prevalent and which ))1"0­ within pools, and minimize the cost of drilling "ides for an initial minimum allowance during 1he and producing oil. first seven years from designation of the pool at a lev­ el designed to payout drilling and comple­ ~ost~ N. A. Strom was born and received tion and provide fo1' continued 0llera­ his primary E-ducation at VIking, Alber­ tion of the well, followed by an operating minimum !r'~C;C"--;·j~:·;,: ta, He comple.ted high school at Prince allowan~e at a level designed to provide for ~on­ George, B,C., and received a B.A.Sc. in tinued operation of the well at a !'easunable rate of .- ' geological engineering from the Univer­ . -' sity of British ColumblO In 1954. After return. I J~~~\pi' ~ ;1: ~ ~; ~. two years service in oil field operotions The new method of distributing within pauls. al'ea­ I '... "....:.1. ,.' rf'··. with Chevron Standard, he Joined the Alberta Oil & Gas Conservation Boord modified for the recu\'ery factor, permits full recog­ nition of the quality of the recovery mechanism mld ":"-;,':*'.':'i···I'.~ in 1956 as assistant reservoir engineer. - }~' In 1961, he was appointed chief oil en­ area as~igned to a well, block or project, keeping ill gineer, and in 1964 he took over hiS mind that the well minimum allowance applies only • ...... present position as manager of the Oil Department. as a floor and is limited to wells actually operated for production,

86 Thc Journal of Canadian Petrolcum As an ancillal'y part of the new prora­ '''' tion plan, oil well spacing has been divided ·r into two types - one being the standard , drilling spacing unit and the other, known f as a production spacing unit, being a form of enlarged spacing employed for prodUC­ ,-J tion purposes. Production spacing units are til made Ul) of combinations of more than one drilling spacing unit and may include as -ff¥"T" much as two and one-quarter sections, with ~ ~ suitable limitations as to the configuration ~9 .,a-'<-;:iJ' " ",.< of the production spacing unit and the " ::~,;.r positioning of its producing well. This con­ ~'7 .. ,.' #-" cept is intended to permit new pools to be "9 c~'<,\'t\. !'-~:!:rr./ developed with the optimum number of , ./ « wells having regard for o'\vnership, pool '/' ~~,,~ I. ~,~.~ elimination, necessary well productivity ~l\.1l5l • :::r and adequate dtainage of the pool, or, in ...r-"~:r-r other words, all factors which affect owner opportunity and conservation, It is also in­ L..r- Downloaded from http://onepetro.org/JCPT/article-pdf/5/02/86/2165863/petsoc-66-02-06.pdf/1 by guest on 26 September 2021 tended to provide for the elimination of the operation of surplus wells in old, over­ " developed pools. The combined effect is ,, , , , , , , , OEI"TH OF I"AODUCI~lG FOAMATION-THOUSAt~DS• • OF FEET " therefore intended to provide considerable "" " " savings in both capital costs and operating FigUTC 2.-1lIiHilllmll Allowance of Pl'cscnt alld Nc'w P1'oratioll Pluns. costs wherever feasible.

The new plan also provides for redistribution of formula used to establish limiting rates for indivi­ that portion of the allowable not produced by inca­ dual wells and for pools and applied as the proration, pable parts of the pool to other parts of the pool with base in the old proration plan. Heavy-gravity pools spare productive capacity, therefore permitting a are not currentl3! prorated, and the PRL formula will pool to produce its allocated share irrespective of own­ be used in assigning maximum rate limitations in the ership division, This provision will replace the old absence of established MERs. one whereby portions of allowables not produced by Gas penalty tables ranging down to Table 400 will wells, blocks and proJ·ects to which the:r are assigned be employed and all gas penalty tables will be assigned are automatically reallocated among all pools in the on the basis of a formula permitting up to one-half Province. barrel of free gas production at resel'voir conditions For the purpose of maximum rate limitation, a new per stock banel of oil production before gas penalty simplified formula, the PRL formula, commences. Also, credit for water injected in certain waterflood schemes will be granted in determining net [PRL = K(U - P/2); where K= 7000, 9000 or 11,000 x 10-' STB/month] gas-oil ratios, 'will be applied in prorated light and medium crude IMPLEMENTATION AND EFFECTS oil pools as a surveillance device to signal the need for conducting MER studies deemed desirable in the In accordance with the method of transition adopted interests of conservation_ This replaces the old MPR b.y the Board, certain of these changes were imple­ mented immediately whereas some ate only partly in­ fused at this time and others await implementation at a later date. The proration formula now being applied combines the basic or residual approach of the old plan with the proration base (U -P /2) of the new plan, as shO\vn in F'igU1'e 1, Also, the two-step well minimum allowance system of the old plan is still in effect) as OLD PUI.N shown in Figure Z. Insofar as we continue to operate • MOo-E.c. prov under the residual plan and continue to assign mini­ Bp ·AllGl:. FO~lor C..,PR -EAlp+EAp ... here AllOI:.Fo~lor: t·\MPR-EAlp prov mum allowances in accordance with the relatively higher minimum allowance levels established in 1957, there is a measure of continuing incentive for develop­ ment drilling. Countering this effect and apparently TRANSITION PERIOD -May 1,1965 -Moy 1.1968 outweighing it has been the combined effect of the 075 ElI. p ] institution of production spacing units and the eli­ Bp:lI.lk>~ RJ~lor[U-~Jp'r. ~EAp _--",,;;:'":::._-,,":::JE!""'~'--­ -000-"-1 whele AlIcc Foeler < mination of the r'life factor" for wells on greater than i:fu-.E1p-O 75 EA.;] prot 2 OOOOIIJ 40-acre spacing, Comparing the situation as it existed a year ago with that which now exists, it is evident that the inception of production spacing units has , resulted in some dramatic changes in oil well spacing .. "The .um 01 Ihe I"rovlnce or the lluenilly beh...en ,. lhe Dulsicle brClckels ..here sYch qUClnlily i. Pa~lllve per ,veil operated in this Province during its short period of application - changes which have brought Figm'e l.-Pl'oration Fonmdae. about optimum well spacing in many pools.

Technology, April-June, 1966, Montreol 87 ,"VELL SPACING CHANGES with the costs of the development and operation of each productive drilling spacing unit in the pool. The changes brought about over the past 12 month.s The distribution of the developed spacing area fol' tan be observed tln-ough a comparison of ' .... ells operat­ prorated light and medium crude oil pools for April, ed and a comparison of de\"elopment well spac.ing. 1965, and April, 1966, is seen in Figure 4. Frum thi~, \Vell-count statisties fOl' pools in the light and medium the following observations and conclusions can be ~mbjec.t category to proration, as depicted in Figure drawn: .1, ::ihm'.' that in April, 1965, there were 11,700 well5 l.:apable of production. of \...hich 8,700 were operated. : 1 )-Much of the portion taken up br enhanced The comparable figures for ApriL 1966. are 12,;300 recovery operations can be regarded as being operated ,\--ells capable of production of \:vhich 8,000 are being at conditions approaching optimum well spacing. This opel-ated. Thus. although a net 600 capable producing represents 32 per cent of the total for April, 1965. CllHl \...·ells ha\"e been added in the lJast 12 months, the the S::lme percentage in April, 1966. actual !lumber of ' ..... ells operated has declined by 700. (2)-Comparing, for the same sets of dates. the The over-all effect has been the shutting-in of about drilling gpacing units (DSUs) in natural recovery 1.300 capable wells, mogtly in old, o,'er-developed mechanism areas we see that: pools, by conversion to production spacing units_ (i) the 320-acre DSUs' pOl"tion has remained about The benefits for old pools and new pools, regpectiv­ constant at 14 per cent of the total developed ely, are typified in the Redwater D-3 pool and the area; ]\'Iitsue Gilwood A pool. Redwater, in April, 1965. (ii) the 1GO-acre DSUs' portion ha:'> declined fromDownloaded from http://onepetro.org/JCPT/article-pdf/5/02/86/2165863/petsoc-66-02-06.pdf/1 by guest on 26 September 2021 l"ontained 890 capable wells on .to-acre spacing, with .'].5 per cent to 27 per cent; an aggregate developed area of 35,600 acres. Twelve (iii) the SO-acre DSUs' portion has declined from '9 months later, 200 production spacing units had been per cent to 6 per cent; formed in the pool at an average area of 145 acres (iv) the -lO-acre DSUs' portion has declined from 10 per PSU, permitting the suspension of over 520 wells per cent to 3 per cent; and currently not needeo to produce the pool's allowable. (\-) at April, 1966, production spacing units in old The o\'er-all result has therefore been to alter the pools accounted for 11 per cent of the "pie" at spacing frum <10 acres to about 100 acre!i per operat­ an average well spacing of 129 acres and in new ing producing well. pools accounted for 7 per cent of the "pie" at an In the l\olitsue Gilwood A pool, development was a,rerage ' ...·ell spacing of 627 acres. stal"ted with the benefits of production spacing units The general trend is therefore toward larger well being anticipated. By April, 1966, it had a total area spacing units. except for areas now developed un assigned for allowable purposes of 81,280 acres, com­ 320-acre DSUs. The important changes are that old prised of 110 production spacing units, at an average pools developed 011 -lO-a~l'e and SO-acre .~pacing lIOW area of 681 acres, and another 40 developed drilling OCCUP}' only 9 per cent of the "pie" as compared tfl .!'pacing units at 160 acres each. The over-all average a similar value of 19 per cent a year ago and that gpacing for wells operated is 542 acres. new pools being developed on the standanl 1GO-ncl'c In Redwater, ag in other old pools. the benefit.s are DSU~ are being operated with production spacin~ confined to the reduced operating costs_ In i\'1itsue. units approaching one sediol1 per well. however, the benefits include both markedly reduced i\!Ieasured in terms of direct economic benefits, the capital costs and reduced operating costs as compared annual ~aving in operating ('o~ts thl'ough the l1hut-in ",------,,------,------,-----,------,-----,---....,--....,----,-----,

Comparison of well counts for light and medium crude oil pools at ~ lOf----lll~~lll~111~f------t April 1965 and April 1966 ~ :::::::: U1Pl:lbiB oil 6 walls iO , I -'O!!!"'!!~:!!.I!.!!o~d-f'""""""'fC~o"...~b~~oi,-1 r wells 1------,----.----.-----,------1 opellatBd ~ w 3 ~ 6f-----I o ili ;;~ z 41-----j

'f_---j Injection wells allec.Clted Q f-_--'m,inimum. elloW'lonco 1-----1

APRIL 1965 APRIL 1966 APRIL 1965 APRIL 19M Figure 3.

88 The Journal of Canadian Petroleum . ~;.

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APRil 1966

FigU7"e 4.-CO?npa~'i80n of Dsa Dist7'ibu,tion /01 0 Natuml IPOOl.. DF mVEN C:H.O;R...C:TERlsnc:s! and Enhanced Recovcl'Y Mcchanism, - Light and 11'Iedl1un Crude Oil Pools - at .4.pril, 1965, and April, 1966, WELL SPACING """WIDE Fzg!ll·c 5.-Schematic DiagTu1n Showing the Relation­ J of 'wells not now needed for production' approximates SlM'p Between Pool MER, "Reservoit ' 11fER, the Summa.­ six million dollars per year on the basis of average tion of "I'YIdivid1lal IVc[[" J1IER's wnd Wen Spaei.ng far a annual operating costs of $4,500 per yeal' per well Pool of Givcn ChaTactEwistics. and the presence of some 1,300 surplus wells in pro­ (2) Fift;l! pools in the minimum allowance cate­ duction spacing units. l\l[ost of such benefits are attri­ gorJ' have PRLs considerably exceeding their allow­ butable to old, overdeveloped pools. On the other hand, able rates. in new pools and old pools still undergoing extensive (3) Thirty pools in the minimum allowance cate­ development the gains through avoidance of drilling gory have PRLs near the minimum allowance, but and completion of wells can be estimated on the basis actually produce much below the allowable rates as­ of the number of additional 'wells which would have signed. been drilJed in order to develop all productive drilling (4) One hundred and sixty pools in the minimum spacing units now included in production spacing allowance category have allowables near to or greater units. The gains here are largely in fields such as than the PRL and actually produce near the assigned Mitsue and Nipisi. Assuming average drilling and allowable. completion costs of $80,000 per well, the avoidance of capital investment afforded through production spac­ On the basis of the PRL guide, therefore, MER stu­ ing units in the past year is estimated at forty million dies of most pools in the residual reserves category dollars. would be of only academic value at this time. Also, on In certain instances, important benefits to conserv­ the basis of present projections, the Board does not ation have also been achieved through the institution anticipate a need for ThiER studies of most such pools of production spacing units and blocks. Operation during the remainder of the transition period. By the under these conditions often permits the shut-in of same token, a large number of pools in the minimum , wells which would otherwise produce significant quan­ allowance category appear to require :MER studies tities of excess gas or water thereby resulting in using the PRL guide. Furthermore, recognizing that inefficient use of reservoir energy. the rate assigned such pools is simply a summation of Significant economic benefits and less tan­ individual well minimum allowances, the problem in gible benefits to conservation have therefore such pools reduces to one of individual 'well MER con­ been realized through the adoption of pro­ siderations o The schematic diagram in Fig1lTe 5 shows duction spacing units and the establishment of blocks. the relationship between pool MER, reservoir MER, At the same time, the questions of adequate sampling summation of individual well lV[ERs and well spacing of reservoir rock and fluid properties, effective drain­ from the Board's PRL report_ In .some pools and parts age of all parts of the reservoirs and maximum cri­ of pools we are operating in the segment of the curve !ical rates of wells become much more prominent and, between points Band E, for which the sum of indi­ vidual well MERs determines the pool MER. Also, In these respects, the ingenuity of reservoir and pro­ duction engineers will, in the future, be put to much \vith the rapid transformation to optimum well spac­ greater tests than in the past in order to realize opti­ ing through production spacing units and the relativ­ mum recovery. ell' large standard drilling units prescribed today, it appears that critical well rate problems may be experienced on a much broader scale than in the past. i\olAXIMUM RATE LIMITATIONS To take full advantage of the benefits of wider well The subject of maximum well rate limitations and spacing and yet to safeguard conservation, an in­ the application of the new PRL formula in place of creased focus on production engineering methods, the old MPR formula should also be considered. The (i.e., wel! completion, ,..'ell stimulation, flow phenome­ Board staff has compared current actual production na in the vicinity of the well bore) will be needed. rates to calculated PRL rates for some 320 pools as a preliminary assessment of the need for MER evalu­ RECOVERY EFFICIENCY ations. The following results were revealed: With the removal of the life factor from the pro­ (1) For eighty pools with residual reserves, the ration base, there has been a reduced emphasis on current allowables are much below the PRL leveL the effect of rate on ultimate recovery from crude

Technology, April-June, 1966, Montreal 89 oil Iloals. More attention is now given to the recovery namely. pools subject to natunLi reCCl'very ,·.,.jth a re­ efficiency attainable by various fluid displacement. cover~! efficiency greater than 30 per cent, pools sub­ techniques, Establishment of numerous interface ob­ ject to natural recover}' with a recovery efficiency sernltion wells during the past year and a more tho· less than 01' equal to 30 pel' cent, and enhanced recov­ rough evaluation of resen"oir fluid and rock data in ery schemes for which ultimate reserves are now a great man.", pools seems in P~l't associated with this booked. Obviously, a year is too short a period of alteration of emphasi:-:. in the nev.' proration plan. The time in which to have altered historical trends, and obtaining of reliable bas-ic reservoir data when com­ so the ultimate reserves attributable to each group, bined with the more sophisticated prediction tech­

101----+---+--1 ~ ~ w (D-Nolurol roco\l'llry ~ mechc:mism pooh-Ri>3Q-'. :J' ~ Q) -Noruro I recO"o'ory (; ,\----+-----'-N'r-i----j - -- mechonism poch-Ri<30"l. Z o Q) ·Enhanced recoVE;ry ::: mechenism poels '",6\----+----1 r- N -Oil In place - 6 U -Recg~oreblo eil w "=> N 5,_-\-- r-- TITl-u_+- -+-__-; ~1~~~'~ 2~ r--lllllllt----+-----jE0~ 1- ~~.).jt ftf.~ ~\-- ,•.•,.,.,.,•.•,•.•,.,•.•.•1--1----+----; ::::::...... u =...... ;:;r:p: .;_; u .'. OL_....E'.~ID&·>L___=lili~i;·.L-----""{jJ'!L·,L-______L__J:""illi""'lL_____'_"'m"'I_'______'__"iW"'_')"______'______'___--'

APRIL 1965 APRIL 1966

90 The Journal of Canadian Petroleum .'-- _ .• :~. -=-._- .

cent. These potential gains, however, may only be not lead to inequities or to any gradual erosion oi realized through the application of new and improved the rules. The Board also has granted exemption to reservoir displacement techniques, the optimum loca­ Section III I of the General Regulations, which sec­ tion and scheduling of injection and production points tion requires monthly operation of each PSU produc­ ( .... in each pool, and the integl"ation of reliable reservoir ing well in a block, for ten blocks each compris­ ;: .. , modelling and advanced production engineering tech­ ing a pool operated by a single unit and for two niques. blocks covering only parts of pools. ,~...:,: . For the blocks in the former category, the keJ' ADMINISTERING CONVERSION issue is whether there will be adequate drainage of The important effects which resulted during the the pool in the interests of conservation, and the first year of transition have been disassessed, but Board usually has not had difficulty in making a what about the administrative work connected with reasonable disposition in this regard. conversion and the numerous questions raised regard­ On the other hand, for a block constituting a part ing the interpretation of the general policy, proce­ of a pool and for which exemption from Section III I dures and detailed rules'! To many people, the conver­ is sought, it is not always a simple task to establish ., sion to the new plan may appear to fall some\vhat whether it is fair to other owners in the pool to grant short of meeting the objectives of simplicity. :Many ;. such a request. Because of this and because the Board ,.. policy letters have been issued and manj~ new rules believes that the existing production spacing units in ,. Downloaded from http://onepetro.org/JCPT/article-pdf/5/02/86/2165863/petsoc-66-02-06.pdf/1 by guest on 26 September 2021 ~, ' '. , incorporated 'which, by their very volume, may cause themselves provide suitable opportunity for the "'lin~ .. some confusion_ Some of these matters are discussed ning of the subsurface hydrocarbons, the Board is below. hesitant to grant requests for exemption. Procedures for the establishing and applying of gas-oil-ratio penalties have undergone certain changes SUMMARY ,; in connection with decisions reached respecting the In summary, although we have passed through only new proration plan. The new method of establishing one-quarter of the transition period for conversion to gas penalty tables is to provide for production of up the new proration plan, we can cite the following to one-half barrel of free gas at reservoir conditions achievements: with each stock barrel· of crude oil produced. This method will apply in all pools on and after May 1, (l)-A large step toward optimum well spacing 1966, with the certain exemptions for gas return has been taken and significant economic gains have schemes and the like. In several waterflood schemes, been achieved. Estimated savings of about six mil­ credit has been granted for water injected in deter­ lion dollars per year in operating costs and the avoid­ mining net gas-oil ratios in accordance with the policy ance of a current investment of some forty million in this regard. dollars in drilling and completion costs are indicated. Several other matters! such as the method of re­ (2)-Through the establishment of production spac­ serves booking, adherence to maximum rate limit­ ing units and blocks, there is improved conservation ations, concurrent depletion, good production practice of reservoir energy because of the shutting-in of and allowables of multi-zone wells, have led to some high-gas-oil-ratio and high-water-oil-ratio-wells. questions of detail regarding policy or procedure. (3)-Greater effort is now being turned toward However, most such questions have now been satis­ the evaluation of basic reservoir properties. factorily resolved and have been expanded upon in (4)-l\'Iore attention is being given to the assess­ letters by the Board to all operators. ment of reservoir displacement efficiency through By far the greatest number of questions from in­ the use of observation wells. dustry have involved the interpretation of the rules re­ (5)-The use of mathematic modelling techniques specting production spacing units. The General Regula­ to predict reservoir performance under various con­ tions under TheOiland.GrLS ConscTvationAethave been ditions of injection and withdrawal has been applied expanded considerably to provide a fairly complete in several important enhanced l'ecovery schemes in guide to the terms under which production spacing the Province, and this can be considered as only the units, blocks and projects will be granted and ma3! forerunner of wide-scale application of such methods. be operated. Although the detailed rules and defini­ (G)-It would appear that a part of the consider­ tions included in the General Regulations for this able expenditure previousl3! allocated to development purpose may seem rather imposing and cumbel'some wells is now being used for exploration for new oil when first encountered, they are vital to the straight­ pools. , . forward method of processing which the Board em­ In these respects, the Board is pleased with the sub­ '. ploys. During the past twelve months, the Board stantial achievements of the past twelve months which ~. has granted nearly 1,400 applications for production arise directly or indirectly from the new proration spacing units and 70 applications for blocks. Had the plan. On the other hand, lest we grow complacent Board not established the rules and the fOlmat for with our new-found benefits, let us recognize that the I .' submitting applications in the detail they are now trend to much wider ,..'ell spacing raises problems set out there is little doubt that the variety of inter­ regarding reliable reservoir sampling, effective drain­ pretations of policies and procedures would have led age of all parts of the reservoir and maximum cri­ to a vast number of unacceptable applications. The tical withdrawal rates from wells and parts of re­ administrative burden would have climbed and it is servoirs. Each of these problems will place greater probable that the whole process of establishing pro­ demands on the ingenuity of reservoir and production duction spacing units and blocks would have sIO\\'ed engineers· in order to achieve optimum crude oil recov­ significantly. ery. Also of the 25 billion barrels of established ori­ The vast majority of applications for production ginal oil-in-place in light and medium crude oil pools spacing units and blocks now approved are estab­ in the Province, only 8 billion barrels appears recover­ lished fully within the rules stipulated. However, the able using present recovery methods. Thus, there Board has granted some fifty exceptions for pro­ seems to be considerable room, and potentially great duction spacing units on the edges of pools where the reward, for the development of mOre efficient recovery minor variance (i.e., granting of an L-shape) would techniques than are now being applied.

Technology, April-June, 1966, Montreal 91