In Reply Refer To: MS 5221

Jan 13 1994

Gentlemen:

This letter serves to inform lessees operating in the Gulf of Mexico Outer Continental Shelf of the current policy concerning sustained casing pressure according to the provisions of 30 CFR 250.87. The following policy supersedes our last Letter to Lessees and Operators dated August 5, 1991, and is intended to streamline procedures and reduce burdensome paperwork concerning the reporting of sustained casing pressure conditions and the approval process for those wells that the Minerals Management Service (MMS) will allow to be produced with sustained casing pressure.

1. All casinghead pressures, excluding drive or structural casing, must be immediately reported to the District Supervisor. This notification by the lessee, to the District Supervisor can either be in writing or by telephone, with a record of the notification placed in the record addressed in Paragraph 5 below, by the close of business the next working day after the casing pressure is discovered.

2. Wells with sustained casinghead pressure that is less than 20 percent of the minimum internal yield pressure of the affected casing and that bleed to zero pressure through a ½-inch needle valve in 24 hours or less may continue producing operations from the present completion with monitoring and evaluation requirements discussed below.

A diagnostic test that includes bleeddown through a ½-needle valve and buildup to record the pressures in at least 1-hour increments must be performed on each casing string in the wellbore found with casing pressure. The evaluation should contain identification of each casing annulus; magnitude of pressure on each casing; time required to bleed down through a ½-inch needle valve; type of fluid and volume recovered; current rate of buildup, shown graphically or tabularly in hourly increments; current shut-in and flowing tubing pressure; current production data; and well status. Diagnostic tests conducted on wells that meet the conditions described in Paragraph 2 above do not have to be formally submitted for approval.

3. Wells having casings with sustained pressure greater than 20 percent of the minimum internal yield pressure of the affected casing or pressure that does not bleed to zero through a

½-inch needle valve, must be submitted to this office for approval. The information submitted for consideration of a sustained casing pressure departure under these conditions should be the same as described in the above paragraph.

4. The casing(s) of wells with sustained casinghead pressure should not be bled down without notifying this office except for required and documented testing. If the casing pressure from the last diagnostic test increases by 200 psig or more in the intermediate or production casing, or 100 psig or more in the conductor or surface casing, then a subsequent diagnostic test must be performed to reevaluate the well. Notification to this office is not necessary if the pressure is less than 20 percent of the minimum internal yield pressure of the affected casing and bleeds to zero through a ½-inch needle valve. The recorded results of the subsequent diagnostic test must be kept at the field office. However, the results of this test must be submitted to this office for evaluation of the conditions as described in Paragraph 3 apply.

5. Complete data on each well's casing pressure information need only be retained for a period of 2 years, except that the latest diagnostic information must not be purged from the overall historical record that must be kept. Casing pressure records must be maintained at the lessee's field office nearest the OCS facility for review by the District Supervisor's representative(s).

6. The previous approval of a sustained casing pressure departure is invalidated if workover operations, as defined by 30 CFR 250.91, commence on the well. Also, operations such as acid stimulation, shifting of sliding sleeves, and gas-lift valve replacement require diagnostic reevaluation of any production or intermediate casing annulus having sustained pressure.

7. Unsustained casinghead pressure may be the result of thermal expansion or may be deliberately applied for purposes such as gas-lift, backup for packers, or for reducing the pressure differential across a packoff in the tubing string. Unsustained casinghead pressure which is deliberately applied does not need to be submitted to this office. Unsustained casinghead pressure, as the result of thermal expansion, greater than 20 percent of the minimum internal yield pressure of the affected casing or does not bleed to zero through a ½-inch needle valve needs to be submitted to this office with either of the following information:

a. The lessee must report the casing(s) pressure decline (without bleeddown) to near zero during a period when the well is shut in, or

b. With thoroughly stabilized pressure and temperature conditions during production operations, the lessee may bleed down the affected casing(s) through a ½-inch needle valve approximately 15­20 percent, and obtain a 24-hour chart which shows that the pressure at the end of the following 24-hour period is essentially the same as the bleeddown pressure at the start of the 24-hour period while production remains at a stabilized rate.

8. Subsea wells with remote monitoring capability must be monitored, analyzed, and reported as described above. If the casing valve(s) must be operated manually the monitoring, analyzing, and reporting frequency is 2 years at a maximum.

9. Should a request for a departure from 30 CFR 250.87 result in a denial, the operator of the well will have 30 days to respond to the MMS District Office with a plan to eliminate the sustained casinghead pressure. Based on well conditions, certain denials may specify a shorter time period for corrections.

If there are any questions regarding this matter, please contact Mr. B. J. Kruse at (504) 736-2634.

Sincerely

[signed] D.J.Bourgeois
Regional Supervisor
Field Operations