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Rules and Directives

Directive 065: Resources Applications for Oil and Gas Reservoirs

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Release Date: April 05, 2016
Released with AER Bulletin 2016-01.

Purpose of this Directive

This directive details the process to apply to the AER for all necessary approvals to implement a strategy and plan to deplete a pool or portion of a pool using one resource application. Previously, the requirements were mainly found in Part 15 of the Oil and Gas Conservation Rules.

This directive sets out the application requirements and provides explanations for those requirements for most conventional oil and gas reservoir topics considered in an application for AER approval.

If after careful study, you have a specific question not covered in Directive 065 or covered as a  Frequently Asked Question below, please contact Resources Applications Helpline at

Phone: 403-476-4967
Email: Resources.Applications@aer.ca

Question 1: Is notification to be made to all licensees of abandoned wells in the relevant area, or only to licensees of wells that penetrate the zone or pool for which injection activity is proposed
Answer 1:
Notifications are only to be made to the licensees of abandoned wells that penetrate the zone or pool under review for injection activity.

Question 2: Is it the AER that will initiate amendments to enhanced recovery approvals to reflect the maximum wellhead injection pressure (MWHIP) changes to Directive 065, or will that responsibility fall to the approval holder?
Answer 2:
The AER will update the enhanced recovery (ER) approval documents with the approved MWHIPs for schemes that have come under review because of amendment requests. A project to expedite this process by updating all ER scheme approvals to include MWHIP is under consideration.

Question 3: As approval transfer applications are no longer necessary, will the AER amend current approvals where the approval holder is no longer current or valid?
Answer 3:
Yes, the AER has started amending approvals for conventional as well as oil sands schemes. Where the approval holder is no longer a valid operator, the AER has rescinded the approval. This process only applies to disposal approvals; approval transfer applications are still required for ER approvals.

Question 4: Is there a requirement to include an MWHIP for all injectors in a scheme, or just for the injectors proposed to be added to the scheme?
Answer 4:
The information should be included in the application if its available. Where the information is not available, a statement should be included as to what the MWHIP should be and the reason why.

Question 5: Does that mean that wells without an MWHIP will not be grandfathered?
Answer 5:
All approved injectors are required to be assigned an MWHIP before the start of injection operations.

Question 6: Is there going to be a radius for the notification of abandoned well licensees? If the owner of an abandoned well does not have information on how the well was abandoned, where does that leave the applicant?
Answer 6:
A radius of notification is defined for each notification type in the notification guidelines section of Directive 065. These guidelines, however, only set out the minimum requirements.

The expectation is that applicants will apply due diligence in seeking out the well licensee and the relevant wellbore information. Applications should clearly state what was done to identify the licensee of abandoned wells and what was done to obtain the information about the wells. The AER will review applications on a case-by-case basis.

Question 7: In a scenario where the applicant has no data, where the tour reports have no data, and where it appears the necessary information about the abandonment of a well is not available, who would be responsible for monitoring to ensure that there is no gas migration? How do we mitigate this risk?
Answer 7:
The AER will determine the risk potential of planned injection activity to neighbouring wells. If it turns out that the potential risks are real, then the applicant should present a plan to mitigate them.

Question 8: Is there a potential for applications to be denied if the neighbouring wellbores are not abandoned properly?
Answer 8:
All abandoned wells that do not meet the Directive 020 specifications and have not been so grandfathered should be referred to the AER for action. In all other cases, the AER requires that the applicant submit a mitigation plan that addresses the risks posed to the abandoned wells. The application may be denied if the applicant cannot come up with an acceptable risk mitigation plan for the abandoned wells.

Question 9: Is this not the same as whistleblowing?
Answer 9:
Yes it is. The AER cannot have known risks ignored.

Question 10: Does proper abandonment mean that the well was abandoned to the current requirements or to the requirements at the time it was abandoned?
Answer 10
: Proper abandonment means that the well was abandoned in accordance with the requirements at the time the well was abandoned. However, the AER expects an applicant to review, and will itself review, such a well to assess the residual risks to the proposed injection activity.

Question 11: Who bears the cost of re-entry to upgrade the abandonment condition for a well that is deemed to have been properly abandoned but that still poses a high risk to injection operations?
Answer 11:
The expectation is that the operator who wants to conduct the injection activity will be responsible for that cost. An explanation of the risk should be presented to the AER with the mitigation plan.

Question 12: Who is responsible in a situation where an adjacent well-to-injection activity was deemed by the AER to present no risks, but where it ultimately results in fluid migration out of zone?
Answer 12:
The licensee of the abandoned well and the operator of the injection activity bear obvious liabilities. However, each case will be reviewed on its merits to determine liability.

Question 13: What is the expected turnaround time for waterflood applications, now that MWHIP applications will be through Directive 065 and given the added notification requirement layer?
Answer 13:
The turnaround time is not expected to change.

Question 14: According to Directive 065, fracture stimulation data will not be accepted for MWHIP. What are the applicant’s options for wells that have already been stimulated?
Answer 14
: The AER will review each application. Fracture stimulation treatment reports may be acceptable where the falloff period was long enough to capture the formation closure pressure and where the reports were interpreted by a qualified professional in that field. Alternatively, a step-rate injectivity can be carried out on the stimulated interval.

Question 15: Is mini-frac data acceptable?
Answer 15:
Yes

Question 16: What about gas storage—do the same requirements for MWHIP and the notification of abandoned well licensees apply?
Answer 16:
All injection wells are required to operate with an MWHIP. Injectors in a storage scheme are assessed and assigned MWHIPs. Notification is required in accordance with notification guidelines.

Question 17: What the Society of Petroleum Engineers (SPE) paper is referenced to establish the accepted step-rate test procedure and the analysis of the test results?
Answer 17:
SPE 16798: System Design and Analysis of Step-Rate Tests to Determine Formation Parting Pressure, by P.K. Singh, R.G. Agarwal, and L.D Krose, Amoco Production Co.

Question 18: When will Directive 051 be released in its amended form?
Answer 18:
It is currently parked because of feedback indicating that more work needs to be done to get it ready for release.

Question 19: Can MWHIP be applied for an entire pool, or does it have to be by individual unique well identifier?
Answer 19
: An analogue well can be used to make a case for all wells in a pool.

Question 20: The current Directive 051 still has the MWHIP requirements; do we still need to submit a Directive 051 application?
Answer 20:
Directive 051 still has the MWHIP requirements because it has not been released in its amended form. Directive 065 now supersedes Directive 051 in all matters relating to the MWHIP requirements until the latter is released in its amended form. A Directive 051 application is still required for the validation of the well integrity aspects of a proposed injection well.

Question 21: How long does a water disposal application take considering all the new changes going on at the AER?
Answer 21:
A project is underway to look at publishing service standards. With the transition to new and expanded notification guidelines, there may be some delays. The current service standard is 60–90 days.

Question 22: Will the AER review the historical applications of the older schemes in a bid to determine the MWHIP requests made by industry?
Answer 22:
All relevant sources of data and information are explored in the process of determining the approved MWHIP for each injector on each scheme approval. Where the Directive 051 approval cannot be found, the historical Directive 065 applications will be reviewed for information on the original MWHIP requests. MWHIP will be prescribed from the default table if the search does not yield the requisite evidence of the assignment.

Directive 065 application is expected for cases where the approval holder either has the Directive 051 approval document or has a technical justification for an alternative, higher MWHIP. There is a plan for a project to review and amend all historical approvals.

Question 23: Is it the intent to notify the surrounding abandoned well licensees, or is it the intent to seek understanding of the abandonment program for their wells?
Answer 23:
The intent is to assess the risk that the planned injection activity may pose in and around an abandoned well. The expected dialogue with the abandoned well licensee will contribute to a common understanding of the potential risks that may need to be mitigated. This should result in a risk mitigation plan.

Question 24: Is a letter of consent required from the licensee of the abandoned well?
Answer 24:
A letter of consent is not required.

Question 25: What if the licensee of the abandoned well does not agree to the operation under notification?
Answer 25:
Section 32 of the Responsible Energy Development Act states that any person who believes that they may be adversely affected by an application may file a statement of concern (SOC) with the regulator in accordance with the rules. The AER will, in all cases, apply the existing protocols to establish the technical relevance of the SOC.

Question 26: Will acoustic well sounds (AWS) be acceptable in the monitoring process to ensure compliance with the maximum operating pressure constraint on fluid disposal activities in hydrocarbon bearing pools or their associated aquifers?
Answer 26:
This will be reviewed on a case-by-case basis, based on the risk associated with the disposal fluid and on the complexity of the conversion of surface pressures to reservoir pressures. When using AWS, the surveys must meet Directive 040 requirements.

Directive 065 FAQs (April 2014) [PDF]

Stakeholder Feedback and AER Response on December 2012 edition of Draft Directive 065 (April 2014) [PDF]

Appendix B: Notification Templates

  • Company-to-company notification template [PDF] [Word]

Appendix C: Form O-33 - Application for Gas-Oil Ratio (GOR) Penalty Relief [PDF

Appendix D: Transfer of Approval [PDF]

Appendix F: Enhanced Recovery (ER) Scheme [PDF]

Appendix G: Gas and Ethane Removal

  • Appendix G1: Short-term Gas Removal Application [PDF]
  • Appendix G2: Long-term Gas Removal Application [PDF]
  • Appendix G3: Short-term Ethane Removal Application [PDF]

Appendix H:Gas Reserve Data Sheet (Form EG-31b) [PDF]

Appendix J: Special Well Spacing Notification Templates

  • Lessees and Unleased Freehold Notification Letter [PDF] [Word]
  • Leased Individual Freehold Notification Letter [PDF] [Word]

Appendix N: Special Well Spacing Declaration Templates

  • Declaration of Common Ownership [PDF] [Word]
  • Declaration of Notification  [PDF] [Word]