Docstoc

EXHIBITS

Document Sample
EXHIBITS Powered By Docstoc
					                        INDEX

                DIRECT/         CROSS/      EXAM. BY
                RE-DIRECT       RE-CROSS   BOARD/STAFF

1. Brian Sims     3-5             ---         5-6




                          i
                                 EXHIBITS


EXHIBIT NO.       TITLE
(ITEM NO.)    (TESTIMONY OF)                OFFERED   RECEIVED

Exhibit 1     Drilling log,                     2        2
(Docket No.   D.W. McMillan 31-15 No. 1,
 5-30-01-1)   Sec. 31, T4N, R10E,
              Conecuh County, AL
              (Brian Sims)

Exhibit 2     Directional survey                2        2
(Docket No.   D.W. McMillan 31-15 No. 1,
 5-30-01-1)   Sec. 31, T4N, R10E,
              Conecuh County, AL
              (Brian Sims)

Exhibit 3     5-29-01 letter to Board           2        2
(Docket No.   D.W. McMillan Trust
5-10-01)      Sec. 31, T4N, R10E,
              Conecuh County, AL
              (Brian Sims)

Exhibit 4     Well location plat,               2        2
(Docket No.   D.W. McMillan Trust
 5-30-01-1)   Sec. 31, T4N, R10E,
              Conecuh County, AL
              (Brian Sims)




                                   ii
                               EXHIBITS
                       (Incorporated by Reference)


DESCRIPTION                                    OFFERED   RECEIVED

Well file related to                                 6     6
Permit No. 12049




                                   iii
                                STATE OIL AND GAS BOARD OF ALABAMA

                                                    Tuscaloosa, Alabama

                                                         May 30, 2001



          Testimony and proceedings before the State Oil and Gas Board in Emergency

Session at 4182 Commanders Drive, Mobile, Alabama, pursuant to adjournment, on this

the 30th day of May, 2001.


                                                         BOARD MEMBERS


Mr. Gaines C. McCorqodale .................................................................................. Chairman

Mr. M. Stephen Dampier ......................................................................................... Member

                                                       BOARD STAFF


Dr. Donald F. Oltz ........................................................................ Secretary and Supervisor

Mr. Marvin Rogers.................................................................................................. Attorney

Mr. Jay H. Masingill .............................................................................Assistant Supervisor

Ms. Janyth Pashin .................................................................................Assistant Supervisor
                              (The hearing was convened at 10:55 a.m.
                          on Wednesday, May 30, 2001, at Mobile, Alabama)

                                     (Mr. Metcalfe was absent)



       CHMN. MCCORQUODALE: We will now hear the emergency petition by Century

Exploration.

       MR. DONALD: We have one witness.

       MR. ROGERS: Will you state your name and address?

       MR. SIMS: Brian Sims, 803 Annadale Road, Madison, Mississippi.

                                 (Witness was sworn by Mr. Rogers)

       MR. DONALD: Mr. Chairman, this is a petition by Century Exploration Company

asking that the Board enter an emergency order reforming the wildcat drilling unit for the D. W.

McMillan 31-15 No. 1 Well from a 40-acre wildcat drilling unit to an exceptional 160-acre

wildcat drilling unit. I have asked that Jay hand out the exhibits and we will ask that those be

admitted to the record.

       CHMN. MCCORQUODALE: The exhibits will be admitted obviously subject to being

proved up by your witness but the exhibits are admitted.

                                (Whereupon, the exhibits were received in evidence)

       MR. ROGERS: Also, Mr. Chairman, the exhibits should be signed in compliance with

our rules.




                                                 2
         CHMN. MCCORQUODALE: Okay. We will take care of that at the conclusion of the

hearing.

         MR. DONALD: Mr. Sims, have you previously testified as an expert witness before this

Board?

         MR. SIMS: Yes.

         MR. DONALD: Mr. Chairman, we ask that Mr. Sims be accepted as an expert witness in

geology.

         CHMN. MCCORQUODALE: He is so recognized.

                                            BRIAN SIMS

         Appearing as a witness on behalf of Petitioner, Century Exploration Company, Inc.,

testified as follows:

                                     DIRECT EXAMINATION

Questions by Mr. Donald:

Q.       Please state your current occupation and employment.

A.       Consulting petroleum geologist, independent.

Q.       Today there has been filed a petition for an emergency order reforming the drilling unit

         for the D. W. McMillan 31-15 No. 1 well from a 40-acre drilling unit to a 160-acre

         drilling unit. Are you familiar with this petition and its contents?

A.       Yes.

Q.       Based upon Exhibit No. 1 which is a copy of a drilling log and Exhibit No. 2, a

         directional survey, and other information which has been provided to you, please state




                                                   3
     your opinion as to the actual bottom-hole location in the proposed reformed 160-acre

     drilling unit.

A.   Exhibit 4 shows the bottom hole as it would sit in the 160-acre unit and as it sits in the

     40-acre unit. The well did drift to the north a little better than 360 feet. That puts it

     within two measured feet of the north line of the 40-acre unit. That point is taken at

     12,636 feet which is in the center of the Smackover porosity zone.

Q.   Mr. Sims, please state whether or not in your opinion the actual bottom-hole location of

     the McMillan 31-15 well is the optimum location for the drilling of a commercially

     producible well?

A.   Yes it is.

Q.   In your opinion is the proposed 160-acre drilling unit the best located unit, both from a

     practical and from a geological standpoint, that should be utilized for the drilling of this

     well?

A.   Yes it is.

Q.   In your opinion would the drilling of this well protect the coequal and correlative rights

     of all owners in the proposed unit?

A.   Yes it will.

Q.   Are you familiar with the term “waste” in its ordinary meaning and as defined by the

     Alabama Oil and Gas statutes?

A.   Yes.




                                              4
Q.     In your opinion would the granting of this petition prevent “waste” and would this

       location be the optimum geologic location for a well to test a subsurface structural high

       as indicated by the directional survey and the drilling log?

A.     Yes it is.

       MR. DONALD: We have also introduced a letter from the surface and mineral owner,

the D. J. McMillan Trust, that supports this petition.       I now tender this witness for your

examination.

       CHMN. MCCORQUODALE: Are there any questions from the staff or the Board for

Mr. Sims?

                                          BRIAN SIMS

                             EXAMINATION BY BOARD/STAFF

Questions by Dr. Oltz:

Q.     Brian, would you elaborate a little bit on the geology which I don’t see here yet? If this is

       now the optimum location for this thing, what was the first location and how has your

       interpretation of the geology changed?

A.     Basically, the geology, as you see, is not included. The operator did not wish to show the

       geology at this particular hearing for a drilling unit. They will if they do establish--when

       they do complete this well and establish production they will come back and, of course,

       request a production unit and obviously will have to show geology at that time. The

       structure basically trends northwest-southeast through here. It’s a very small structure.

       It’s a one well structure. I would say it’s capable of producing maybe in excess of 200 to




                                                 5
       a maximum of 400,000 barrels of oil. I guess when I answered that this bottom-hole

       location is the optimum location, the location with the drift of the bottom hole-location to

       me it is within the overall best location on this structure. It is towards the top of the

       structure. The drift occurred basically in the shallow section. We have mostly south-to-

       southwest regional dip out here and that drift is basically occurring in that particular

       interval there. Our structure is a very low relief deep-seated structure. Looking at the

       directional survey you will see the direction did change somewhat when it got down to

       below 12,600 feet there which would be within the Buckner/Smackover formation.

       When it was trending a little bit north-northwest it turned to the northeast. I think it was

       at that point being affected by the deep-seated Smackover structure.

       MR. MASINGILL I would just like to ask that we incorporate into the record in this

matter the well file involving this which is Permit No. 12049.

       CHMN. MCCORQUODALE: That request is granted.

                                      (Whereupon, the well file related to

                                       Permit No. 12049 was incorporated by reference)

       CHMN. MCCORQUODALE: Do you have any questions?

       MR. MASINGILL: No.

       CHMN. MCCORQUODALE: Mr. Sims, let me ask your thoughts on this and perhaps

Mr. Donald could answer or you. Given the fact that we don’t have any geology and because

this is a little unusual the way this has changed, how does Century feel about escrowing royalties

until such time as we are a little further down the road?




                                                 6
       MR. DONALD: They certainly could do that. There is one mineral owner in the unit.

       CHMN. MCCORQUODALE: Okay.

       MR. SIMS: One mineral owner in the unit and also if the unit is adjusted somewhat for

the production unit, there is still one mineral owner.

       CHMN. MCCORQUODALE: It is still going to be the same person?

       MR. SIMS: Yes.

       MR. MASINGILL: So what you are saying is that the area east and west, the whole

south half, is one mineral owner?

       MR. DONALD: I have not examined title of the whole south half. I think it is but it may

be all but the southwest southwest.

       CHMN. MCCORQUODALE: The one that you are referring to would be the D. W.

McMillan Trust?

       MR. DONALD: That’s correct.

       CHMN. MCCORQUODAEL: Marvin, do you have a question about that?

       MR. ROGERS: On that map I got the impression that perhaps that East Half of the

Southeast Quarter was different ownership?

       MR. DONALD: No, it’s not.

       MR. ROGERS: Okay.

       MR. DAMPIER: So there is no way there could be any other royalty owner. Is that the

testimony?

       MR. DONALD: Correct.




                                                  7
      MR. MASINGILL: The part being cut out over here is McMillan. Is that correct?

      MR. DONALD: That’s correct.

      MR. MASINGILL: So the only part that you said was in question was the extreme

southwest southwest?

      MR. DONALD: That’s correct.

      MR. MASINGILL: That’s a dry hole that you have between there and this well?

      MR. SIMS: Yes, sir. It was a well drilled by Smackco back in 1986.

      CHMN. MCCORQUODALE: Are there any other questions?

      MR. DAMPIER: Dr. Oltz, do you have a recommendation?

      DR. OLTZ: I would grant the request.

      MR. DAMPIER: Mr. Chairman, I move that we grant this petition.

      CHMN. MCCORQUODALE: Second. All in favor say “aye.”

                 (Board members McCorquodale and Dampier voted “aye”)

      CHMN. MCCORQUODALE: “Ayes” have it. Thank you.

      MR. DONALD: Thank you.

      CHMN. MCCORQUODALE: The hearing is adjourned.

                   (Whereupon, the hearing was adjourned at 11:04 a.m.)




                                             8
                                  REPORTER’S CERTIFICATE




STATE OF ALABAMA

COUNTY OF TUSCALOOSA


       I, Rickey Estes, Hearing Reporter in and for the State of Alabama, do hereby certify that

on Wednesday, May 30, 2001, at 4182 Commanders Drive, Mobile, Alabama, I reported the

proceedings before the State Oil and Gas Board in Emergency Session; that the foregoing eight

typewritten pages contain a true and accurate verbatim transcription of said proceedings to the

best of my ability, skill, knowledge, and belief.

       I further certify that I am neither kin or counsel to the parties to said cause, nor in any

manner interested in the results thereof.



                                                            Rickey Estes
                                                            Hearing Reporter
                                                            State of Alabama




                                                    9

				
DOCUMENT INFO