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HomeMy WebLinkAbout18 - Emergency Repair of Oil Production Well Number 4CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 18 July 22, 2008 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Utilities Department Steve Myrter, Utilities Director 949 - 718 -'3400 or smyrterd&citv.newport- beach.ca.us SUBJECT: EMERGENCY REPAIR OF OIL PRODUCTION WELL NUMBER 4 RECOMMENDATION: Approve the emergency expenditure of $33,969.33 from the Tidelands Fund required to repair Oil Production Well Number 4. BACKGROUND: Discussion: Oil Production Well Number 4 became inoperable on Thursday, May 15, 2008. At the time it had appeared the actual pump unit located at the bottom of this 3,300- foot -deep well had failed and was in need of replacement. On this same day, Oil Well Services Company (Contractor), the City's on -call emergency well repair contractor, was authorized to proceed with well repairs on an emergency basis in order to minimize downtime and loss of revenue from this production well. The initial repair estimate was approximately $25,000. The Contractor mobilized to the City's oil Feld on Monday, May 19, 2008 to initiate repairs. After the well was disassembled and inspected, the Contractor determined that the bottom of the well had filled with sediments and fines which blocked operation of the pump unit and reduced overall efficiency of the well's oil production capability. The Contractor was able to successfully remove the sediments from the well and place it back into production by May 28, 2008. Since this time, recent tests show oil production from this well has doubled from four barrels per day prior to the emergency repair to approximately eight barrels per day. The total cost for these repairs as summarized on the attached final invoice dated July 8, 2008, is $33,969.29. This final repair cost exceeded the initial repair estimates due to unforeseen conditions regarding the amount and difficulty of removing the sediments from the bottom of this 3300 -foot- deep well. The City Manager authorized these emergency expenditures, and the scope Emergency Oil Production Well No. 4 Repair July 22, 2008 Page 2 of services that were provided by the Contractor is attached for Council review in accordance with Council Policy F -14, Section E - Emergency Contracts for Services. Environmental Review: There is no environmental impact. Funding Availability: This emergency repair work will be funded through unappropriated Tideland Funds Submitted by: E Motor Attachments: Scope of Services provided by Oil Well Service Company h� �'' T� OIL WELL SERVICE CO. INVOICE ' Ou.WFLL SFmTC CO. 1241 E. BURNETT ST. j SIGNAL HILL CA 90755 rd� 562 - 595 -4501 Fax: 562- 424 802E vad -Mail: matt@owsl.com ;,s Page 1 OIL WELL SERVICE IS AN EMPLOYEE OWNED COMPA r Sold To: CITY OF NEWPORT BEACH Our 8- - ATTN: UTIL. DEPT 1# - 949 W. 16HT STREET. Svc Rpt# 55001 -55007 AGREEMENT # AG14279 NEWPORT BEACH CA 92653 Your customer code is CIT589 _.Date - Order No. _ Terms. Inv No. 05/31/08 0308 1 n/30 00011068 Description Rig# Amount RIG R038 63.5 Hrs 0 155.00 $9842.50 FUEL R038 63.5 Hrs 0 15.54 $986.79 POWER SWIVEL R038 1.0 DAY 900.00 $900.00 3-MAN CREW R038 69.5 Hrs 0 320.00 $22240.00 Subtotal: 33969.29 Non"'Toxalso Taxable. -. Salas';7'aX `' Freighi Misc .. ' Invoice Total 33969.29 .00 .00 .00 .00 33969.29 t to