103 West Callaghan Street PO Box 1644 Fort Stockton, Texas 79735 mpgcd@sbcglobal.net (432) 336-0698 Fax (432) 336-3407
MINUTES MIDDLE PECOS GROUNDWATER CONSERVATION DISTRICT BOARD MEETING May 15, 2007
On this the 15th day of May 2007, Regular Session of the Middle Pecos Groundwater Conservation District of Pecos County, Texas met in the Pecos County Courthouse located at 103 W. Callaghan, Fort Stockton, Texas with the following members present, to-wit:
President Precinct 1
John Dorris
Vice President Precinct 3
Jack McIntyre
Precinct 1
M. R. Gonzalez
Precinct 2
Lynn Holland
Precinct 3
Evans Turpin
City of Iraan
Noemi Navarrete
City of Fort Stockton
Paul Weatherby
General Manager
Leslie Elliott
Recording Secretary/Clerk
Board Meeting Call to order at 1:09 pm. A Quorum is present.
AGENDA ITEM I Consider and/or act upon minutes of April 17, 2007.
Upon motion by Evans Turpin, seconded by M.R. Gonzalez and carried unanimously, the Board approved the minutes of April 17th, 2007.
AGENDA ITEM II Comments from Public and Media (limit 5 minutes per person).
Members of the public present: Gary Drgac, Larry Drgac, Weldon Blackwelder, Ernest Woodward, Charles R. Williams, George Landreth and Sharon Roosevelt. No comments at this time.
AGENDA ITEM III Consider and/or act upon Accounts Payable, Treasurer’s Report and Line Item Transfers.
Upon motion by Lynn Holland, seconded by John Dorris and carried unanimously, the Board approved the Accounts Payable and Treasurer’s Report. There were no Line Item Transfers. Randy Williams has the floor in order to explain the Contract between Turner Collie and Braden and the Middle Pecos GCD. He has laryngitis and can barely be heard. It was suggested by Randy Williams with Turner Collie and Braden to be put on our next month’s agenda so the Board can consider renewing the contract we have with TCB.
AGENDA ITEM IV Consider and/or act upon Board of Director for Pct. 2.
Upon motion by John Dorris, seconded by Evans Turpin and carried unanimously, the Board accepted the resignation of Robert Ezell.
AGENDA ITEM V Consider and/or act upon Appointment of Secretary/Treasurer, Assistant Secretary.
Upon motion by John Dorris, seconded by Lynn Holland and carried unanimously, the Board appointed Noemi Navarrete as Secretary/ Treasurer and to absolve the position of Assistant Secretary.
AGENDA ITEM VI Consider and/or act upon Contract with Linebarger, Goggan, Blair & Sampson, LLP. Ref: collection of Delinquent Taxes.
Upon motion by Lynn Holland, seconded by John Dorris and carried unanimously, the Board approved of a continued engagement of this law firm, including an amendment to the motion to clarify that the engagement related to collecting delinquent taxes for the Middle Pecos GCD.
AGENDA ITEM VII Consider and/or act upon Bakersfield L.L.C. Waterflood Project. Glenn Honaker, President and Presiding Officer of the District’s Board of Directors, explained the procedure for proceeding with Bakersfield, L.L.C.’s pending applications, and how someone could protest the applications.
Mr. Honaker explained that the hearing will be governed by the District’s Rules, the Presiding Officer’s Procedural Guidance Document, and all applicable law. (see attached Procedural Guidance for Hearings on Permit Applications held by the MPGCD) He explained that the burden of proof is on the permit applicant to establish that he is entitled to have his permit application granted. As set forth in Chapter 36 of the Texas Water Code and the District’s Rules, the permit applications must meet certain elements to be approved, elements which the General Manager will cover during his presentation during the hearings and which I or other members of the Board may ask questions on. In deciding whether or not to issue a permit, and in setting the terms of the permit, the Board shall consider all relevant factors in the District’s enabling act, Chapter 36, the District’s rules, and the District’s management plan certified by the Texas Water Development Board. Mr. Honaker generally noted that Bakersfield LLC has filed application for production permits for 3 (three) wells. Mr. Honaker recognized the following persons were in attendance and interested in the pending applications: Paul Weatherby/General Manager Middle Pecos GCD, George Landreth/Bakersfield L.L.C., Ernest Woodward/Bakersfield TX, Weldon Blackwelder/Bakersfield TX, Larry Drgac/Bakersfield TX, Gary Drgac/Bakersfield TX, and Charles Randall William/Turner Collie & Braden, consultant for Middle Pecos GCD. Each and every one of these persons were sworn in, and were provided an opportunity to testify and present evidence. Each of these persons was made available for cross-examination, and provided an opportunity to cross-examine other witnesses. General Manager Paul Weatherby gave a presentation and updated the Board on the three Production Permit applications (fresh water) received from George Landreth with Bakersfield L.L.C. on #1, 2 and 3 wells. (see: “POTABLE WATER CONTRACT NO. 286W FOR WATER FLOOD USE attached to these minutes for more information on these wells.)
President Glenn Honaker called a recess at 2:00 p.m.
Reconvene at 2:12 p.m.
General Manager Paul Weatherby proceeded with his presentation to the Board regarding these Production Permit applications. The applications propose a Pilot Project for the next 15 years. The contract submitted by THE UNIVERSITY OF TEXAS SYSTEM BOARD OF REGENTS states this agreement shall be in force and in effect for a period of two (2) years. GM Paul Weatherby concluded that that the MPGCD Board should not approve of the applications.
General Manager Paul Weatherby submitted into evidence for the record: maps of the location to the wells, pictures of the wells, recommended conditions, water analysis pertaining to the Bakersfield L.L.C. public record, related documents on file with the Railroad Commission, and the applications.
Randy Williams, licensed hydrogeologist with Turner Collie and Braden, addressed the Board with his presentation of this project. Randy was asked by GM Paul Weatherby to come up with a set of conditions pertaining to these wells. He has done so and will continue to monitor these wells and the water throughout this project, if approved. The main concern focused on this project is the contamination of the fresh water in this area. Water analysis has been done, and at this time, the water is good. The nature of all the recommendations to this project is to determine which aquifer the water is being produced from and which well the fresh water will be injected and the manner in which the wells will be drilled, the casing, the cementing, the depth and being kept informed of what Bakersfield L.L.C. is doing and what exactly what will be done with the produced water. George Landreth, Bakersfield L.L.C., addressed the Board with his presentation of this Waterflood project. He believes this Pilot Project is the safest way to recover oil. This is known as ASP (alkali surfactant polymer) Waterflooding using fresh water, which makes the chemicals injected into the water work better at separating the oil, thus recovering more. He agrees to accept all the conditions pertaining to and proposed for this project. Mr. Landreth stated that once this project is in place all wells will be drilled horizontally. This project is interested in total oil recovery and they are also prepared to comply with any and all conditions. He continued to testify that in west Texas, we are all familiar with Waterfloods, the Watson, Slaughter, Levelland, Seminole, North Ward Estes and South Ward Fields. These fields had various degrees of success based on the friction between the injected fluid and the oil. Whenever we change the mobility ratio to one (1) so that the viscosity of the injected water is the same viscosity as the oil that means the mobility ratio is one (1). Whenever that mobility ratio is one (1), the recovery efficiency moved by an increased 20% or 30% of the original oil in place. This is being documented time and time again all over the land and I predict that many of the oil fields that are currently being water flooded here in West Texas. Even though most are carbonated reservoirs they will eventually move to polymers to increase the viscosity and increase the recovery efficiency. It will take years. He brought a text book of the Waterflooding that has been going on at Gold Smith and indicated that with respect to that Waterflood in 1959, we are just now increasing the recovery efficiency and have in the last two (2) years by changing to increase density. Moving from a forty (40) acre Waterflood to a ten (10) acre pattern increased the recovery efficiency in the Gold Smith field 2000 barrels a day to 3000 barrels a day. The same thing has happened in the Hobbs field. We own an interest in a non-operating working interest with OxyPermian in those fields. All of this is to say the people who have obtained the leases on the old properties, I think that we are going to apply the best technology available to the industry. We do not intend to ever allow the reservoir pressure to exceed 125 psi, which will make it impossible for any water or reservoir fluid to travel from the 910-foot zone up to the 475-foot zone, the base of the Trinity Watershed. We cannot and we hope we are interested in all of these tests and surveys and monitoring so that we prove that we cannot and will not contaminate the fresh water supply and are not responsible for anybody else’s actions. There are in this old field some old casing that has not been properly cemented and properly taken care of. We are not responsible for that and we want to do everything we can to prove that we do not contribute to that. We are going to be re-drilling this field and for all of our injection wells we probably will be able to drill our injection wells with coil tubing and after this pilot is established with increased production and revenue all the injection wells should be horizontal injection wells. All producing wells will be horizontal producing wells. Now what is the difference between vertical and horizontal wells. That difference is extremely significant. The amount of oil a well produces is a factor of K-H. K-permeability H-thickness of the sand or the zone and so forth. We had originally planned to have to drill 70 new producing wells and 70 new injection wells to water flood this. We now think that it is going to be economically feasible and highly desirable to drill this field with horizontal wells and have a horizontal injection pattern and horizontal producing wells and let us talk about slightly what K –H stands for. K- is the permeability of this rock. 50 milledarcies so we multiply 50 times the thickness of 20 feet of sand and 50 times 20 is a 1000 so the permeability of that well is 1000 K-H. When we change the well to horizontal that 20 becomes 10,000 and this injection well and producing well will be anywhere from 5,000 to 10,000 feet long and therefore the ratio of the permeability and deliverability and producing ability and injectivity of those wells is a 50 - 5,000 to 20 that many times 250 times. If a well would make 1 barrel a day in a horizontal well at the same pressure it can make 250 barrels a day. We are totally interested in total recovery far more than how fast. We are not in there to build the pressure up fast and get the oil out quick. We want to get every single barrel we can get and it is going to be economical for us to water flood this way. So all of the conditions you want to put on there in terms of monitoring and measuring the reservoir pressure and being sure that there is no pressure increase and there is no pressure communication between the Yates Sans reservoir and the Trinity water reservoir – is ok. We want to protect that. We want to be insured ourselves against any complicity towards any adverse effect on the fresh water zone. We know that increased revenue will benefit the University Lands System, State of Texas in terms of taxes. It will help the Pecos County revenues too if we increase the production from this oil field and so we are proposing to be just part of the…we are sorry that it is taking so long to work through the permit phase but we are prepared to do whatever it takes to have an excellent project that benefits all, not just us. We have no objections to any of the District’s requirements, requirements under our contract with University Lands, and permits with RRC. We have no objections to anything through our contract with water supply. None in the case of these three water wells. They were drilled in 1985 and became the property of University of Texas Lands. We only need one well at a time. If one (1) well is not mechanically capable of producing the amount of water that we need we are only going to be needing about 13 gpm well, this water is not going to be wasted. Recovering efficiencies are better with freshwater than with brackish water. We could use brackish water but the project would not recover as much oil.
President Honaker asked “what is the difference between what is recovered with the brackish water than with fresh water?”
G. Landreth – I do not have an accurate figure on that but when you get into the friction between the two (2) viscosity oil and polymerized water if you can get the mobility ratio to one this oil will have a viscosity of maybe 30 centipoids.
Ernest Woodward offered sworn testimony that he is opposed to this Waterflood Project due to past and future contamination to the water, people and livestock in the immediate area caused by past waterflood projects.
Weldon Blackwelder offered sworn testimony that he is opposed to this Waterflood Project due to the questionable integrity of the wells and the formations and contaminating the groundwater.
Gary Drgac offered sworn testimony that he is opposed to this Waterflood Project and also fears the contamination of the Public Water Supply wells.
Larry Drgac offered sworn testimony that he is opposed to this Waterflood Project and that he is in agreement with all statements made by the protestants.
Executive Session at 4:31 pm.
Reconvene Open Session at 5:50 pm.
Upon suggestion by Board President Glenn Honaker and Vice President John Dorris, the Board generally concurred that the General Manager should bring in an authority and/or expert witnesses and character witnesses for credibility as additional evidence to be presented on the pending Bakersfield, L.L.C. applications.
This agenda item will be continued until further notice.
AGENDA ITEM VIII Consider and/or act upon MPGCD Annual Financial Audit. No action taken at this time.
AGENDA ITEM IX Consider and/or act upon Committee/Progress Reports.
To date there are 2659 Well Registrations. Production Permits are being mailed out and coming back in filled out, and Drilling Permits are still coming in. On the Imperial Artesian Wells, we completed running the camera and did testing. Grant money from Bart Reid and RC&D and other various entities helped pay for part of this project. The Data Loggers are still being fine tuned and we have had a positive response from people across Pecos County. Water Analysis are being done and some people are calling requesting their water be analyzed. GM Paul Weatherby will be attending the TAGD June 26th, 27th, and 28th. GM Paul Weatherby presented the Texas Drought Index to all Board Members.
AGENDA ITEM X Consider and/or act upon Historic and Existing Use Applications.
General Manager Paul Weatherby and Ernest Woodward were sworn in. H&E Applications on AEP and Woodward Ranches will be continued due to the fact not all information has been gathered.
AGENDA ITEM XI Consider and/or act upon Groundwater District (s) Correspondence Legislature.
All laws pertaining to groundwater laws are still in committee. No action taken at this time.
AGENDA ITEM XII Consider and/or act upon Agenda for next meeting.
Consider and/or act on Minutes of May 15, 2007 Comments from Public and Media Accounts Payable, Treasurer’s Report, Line Item Transfers Board of Director Pct. 2 Turner Collie &Braden Contract Proposal Imperial Artesian Wells Bakersfield L.L.C. ASP Expert MPGCD Annual Financial Audit Budget Committee Progress Report/Well Registrations, Production Permits, Drilling Permits, Imperial Artesian Wells, Data Loggers, Water Analysis Historic and Existing Use Applications Groundwater District Correspondence, Legislature, TAGD Meeting.
AGENDA ITEM XIII Adjourn.
Upon motion by Evans Turpin seconded by John Dorris and carried unanimously to adjourn this meeting at 6:55 pm.
________________________________________ Recording Secretary, Clerk/Leslie Elliott
_________________________________________ Glenn Honaker, President/Precinct 1
