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Home My WebLink AboutO 194Other Order 194 Docket Number: OTH-22-028 1. August 29.2022 Great Bear Pantheon LLC request to flare to test well Alkaid 2 2. September 14, 2022 Notice of public hearing, email list, bulk mail list, affidavit 3. October 27, 2022 Trustees for Alaska comments 4. October 27, 2022 Bret Chambers comments 5. October 27, 2022 Hearing transcript, Great Bear presentation (confidential portion held in secure storage) STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Great Bear Pantheon LLC authorizing the flaring of gas in association with a long-term, up to nine months, production test of the Alkaid #2 well (PTD 222-077), pursuant to 20 AAC 25.235(d)(6). ) ) ) ) ) ) ) ) ) Docket Number: OTH-22-028 Other Order 194 Alkaid #2 Exploration Well Alkaid Unit North Slope Borough, Alaska November 23, 2022 IT APPEARING THAT: 1. By letter dated August 29, 2022, Great Bear Pantheon LLC (Great Bear) submitted an application seeking authorization from the Alaska Oil and Gas Conservation Commission (AOGCC) to flare gas during a long-term, up to nine months, production test of the Alkaid #2 well in accordance with 20 AAC 25.235(d)(6). 2. Pursuant to 20 AAC 25.540, the AOGCC scheduled a public hearing for October 27, 2022. On September 14, 2022, the AOGCC published notice of the opportunity for that hearing on the State of Alaska’s Online Public Notice website and on the AOGCC’s website, electronically transmitted the notice to all persons on the AOGCC’s email distribution list and mailed printed copies of the notice to all persons on the AOGCC’s mailing distribution list. On September 15, 2022, the AOGCC published the notice in the Anchorage Daily News. 3. Written comments on Great Bear’s application were received from Trustees for Alaska and Bret Chambers. 4. The hearing was held as scheduled on October 27, 2022. Testimony was received from the applicant, Great Bear, and Bret Chambers. PURPOSE AND NEED FOR THIS ORDER: 20 AAC 25.235(d)(6) provides “upon application, the commission will, in its discretion, authorize the flaring or venting of gas for purposes of testing a well before regular production.” “Regular Production” is defined under AS 31.05.170(14) as “continuing production of oil or gas from a well into production facilities and transportation to market, but does not include short term testing, evaluation, or experimental pilot production activities that have been approved by permit or order of the commission.” Typically, such tests are of relatively short duration, a matter of a few weeks or less, and handled via sundry permit approval or letter, but what Great Bear has proposed is a long-term, up to nine months, test and the AOGCC has determined that because of the long-term nature of the request that a hearing and order are warranted. FINDINGS: 1. Great Bear drilled the Alkaid #2 well from a gravel pad off the Dalton Highway approximately 20 miles south of the Prudhoe Bay Field in July and August 2022. Other Order 194 November 23, 2022 Page 2 of 3 2. The Alkaid #2 well encountered what Great Bear is referring to as the Alkaid Production Zone, which it characterizes as a tight sand. 3. The well was completed horizontally with a multi-stage hydraulically fractured completion, which is similar to the completions used in tight sand reservoirs in areas such as the Permian, Anadarko, and Williston basins in the lower 48. 4. Long-term production tests provide more accurate results, especially in poorer quality reservoir rocks, than short-term tests when evaluating the feasibility of a project. Short- term tests may not be able to differentiate between an economically viable development and an uneconomic one. 5. The Alkaid Unit is not associated with any existing field on the North Slope and therefore does not have access to permanent production facilities in order to conduct a long-term test or a full field development. 6. Great Bear has acquired temporary production facilities to process production from the field and it will transport produced oil to an existing field in order to sell it and it will dispose of any produced water. Some gas will be used as fuel gas onsite and for gas-lift (there’s also the possibility of compressing some gas for transport offsite to market) but there will likely be excess gas produced during the production test that can not be beneficially used, sold, or reinjected since there’s no available injection well onsite. 7. Great Bear estimates the well could produce between 150 and 500 thousand standard cubic feet per day (MSCFPD). 8. Great Bear estimates that fuel consumption and gas-lift will require up to 150 MSCFPD and that any gas above this amount would have to be flared. 9. Great Bear believes that a nine month production test should be long enough for them to be able to determine if it has an economically viable project. It is possible a decision could be reached before this period of time. CONCLUSIONS: 1. A long-term production test is necessary to determine if Great Bear has made an economic discovery and to be able to design production facilities for a full field development if it is determined that it has a viable project. 2. Utilizing the produced gas for fuel and gas-lift, and possibly sales as compressed gas, will reduce the amount of gas that could be flared during the production test. 3. Regular updates on the project are necessary in order to allow the AOGCC to provide proper oversight and ensure flaring is kept to a minimum. NOW THEREFORE IT IS ORDERED: The AOGCC authorizes Great Bear to flare gas in association with a long-term production test of the Alkaid #2 well in accordance with the following conditions: 1. This authorization expires three full months after production begins (i.e. if production begins in mid-December 2022 this authorization will expire on March 31, 2023). The AOGCC may, at its discretion, extend this authorization in three month increments, not to exceed nine months total, based on its analysis of the quarterly reports required in Condition 3 below. 2. Great Bear shall submit a Facilty Report of Produced Gas Disposition (Form 10-422) each month during the production test. The volume of lift-gas shall be reported on this form in the “Remarks:” section. Since this is an exploratory well this information will be held Other Order 194 November 23, 2022 Page 3 of 3 confidential, pursuant to AS 31.05.035(c), until such time as the well’s confidentiality period expires. 3. On a quarterly basis Great Bear shall meet with the AOGCC to discuss the status of the project. Topics to discuss at these meetings include, but are not limited to, the following: a. General status of the project, b. Steps, if any, taken or under consideration to reduce the amount of gas flared, and c. Progress towards reaching a conclusion on the viability of the project. 4.Great Bear must notify the AOGCC no later than the close of the following business day if anything happens (i.e. the electrical generation turbine breaks) to cause a significant increase in the amount of gas being flared. DONE at Anchorage, Alaska and dated November 23, 2022. Jessie L. Chmielowski Gregory C. Wilson Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Gregory Wilson Digitally signed by Gregory Wilson Date: 2022.11.23 12:05:58 -09'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2022.11.23 12:08:10 -09'00' 1 Prysunka, Anne E (OGC) From:Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> Sent:Wednesday, November 23, 2022 12:15 PM To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Other Order 194 (Alkaid Unit) Attachments:other194.pdf Re: THE APPLICATION OF Great Bear Pantheon LLC authorizing the flaring of gas in association with a long- term, up to nine months, production test of the Alkaid #2 well (PTD 222-077), pursuant to 20 AAC 25.235(d)(6). Samantha Carlisle AOGCC Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 __________________________________ List Name: AOGCC_Public_Notices@list.state.ak.us You subscribed as: samantha.carlisle@alaska.gov Unsubscribe at: https://list.state.ak.us/mailman/options/aogcc_public_notices/samantha.carlisle%40alaska.gov Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 mailed 11/23/22 5 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 ALASKA OIL AND GAS CONSERVATION COMMISSION In the Matter of Great Bear Pantheon's ) Request to Flare Gas Associated with Long ) Term Testing of Alkaid Number 2 Oil Well. ) __________________________________________) Docket number: OTH 22-028 PUBLIC HEARING October 27, 2022 Anchorage, Alaska 10:00 o'clock a.m. BEFORE: Jessie Chmielowski, Commissioner Greg Wilson, Commissioner AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 2 1 TABLE OF CONTENTS 2 Opening remarks by Commissioner Chmielowski 03 3 Comments by Mr. Galvin 05 4 Comments by Mr. Duncan 09 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 3 1 P R O C E E D I N G S 2 (On record - 10:00 a.m.) 3 COMMISSIONER CHMIELOWSKI: All right. Well, 4 good morning. I will call this hearing to order. It 5 is 10:00 o'clock a.m. on Thursday, October 27th, 2022. 6 This is a public hearing on docket number OTH-22-028 to 7 consider Great Bear Pantheon, LLC's request that the 8 Alaska Oil and Gas Conservation Commission approve the 9 flaring of gas associated with the long term testing of 10 Alkaid number 2 oil well. I am Commissioner Jessie 11 Chmielowski and with me is Commissioner Greg Wilson. 12 Today's hearing is being held in person and 13 with Microsoft Teams. Please be mindful of any 14 background noise and make sure you are muted when you 15 are not testifying or addressing the Commission. 16 If you require any special accommodation please 17 contact Samantha Carlisle. She can be reached at 907- 18 793-1223 or send her a message through the Microsoft 19 Teams chat icon and she will do her best to accommodate 20 you. 21 Computer Matrix will be recording the hearing. 22 Upon completion and preparation of the transcript 23 persons desiring a copy will be able to obtain it by 24 contacting Computer Matrix. 25 This hearing is being held in accordance with AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 4 1 Alaska statute 44.62 and 20 AAC 25.540 of the Alaska 2 Administrative Code. 3 The notice of the hearing was published on the 4 state of Alaska online notices website as well as the 5 AOGCC's website and was sent through the AOGCC email 6 list serve on September 14th, 2022. The AOGCC also 7 published the notice in the Anchorage Daily News on 8 September 15th, 2022. 9 Great Bear has indicated that it would like a 10 break after its public presentation for a confidential 11 meeting between the AOGCC and Great Bear. When we do 12 we will ask folks to vacate the hearing room, switch to 13 a different Teams session and provide further 14 instruction. 15 Before asking Great Bear to provide their 16 presentation, Commissioner Wilson, do you have any 17 questions? 18 COMMISSIONER WILSON: Nothing additional. 19 Thanks. 20 COMMISSIONER CHMIELOWSKI: So representatives 21 from Great Bear, are you ready to make your 22 presentation. 23 MR. GALVIN: Yes, we are. 24 COMMISSIONER CHMIELOWSKI: Is the green light 25 on? Can you hear him, Nathan? AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 5 1 MR. GALVIN: Okay. Now the green light's on. 2 COMMISSIONER CHMIELOWSKI: Great. There you 3 go. So please identify yourselves, your affiliation 4 and proceed with your presentation. 5 MR. GALVIN: Thank you. My name's Patrick 6 Galvin, I'm the Chief Commercial Officer and General 7 Counsel for Great Bear Pantheon. 8 MR. DUNCAN: My name is Michael Duncan, I'm 9 Chief Operating Officer for Great Bear Pantheon. 10 MR. GALVIN: And thank you for the opportunity 11 to present this information to you and to consider our 12 request. 13 On the slide pack -- can we go to the next 14 slide. So just wanted to give a little bit of 15 background and context for this request. As you 16 probably know the Great Bear project has been advancing 17 for about the last 12 years, it started in 2010. The 18 initial Great Bear Petroleum Company came in with a big 19 lease purchase in 2010, primarily targeting a resource 20 play and that was sort of the initial entry into 21 Alaska. And you can see what the red outline on the 22 map kind of shows you what was the initial lease 23 position. And the company as I said started as a 24 resource play, but fairly quickly transitioned into a 25 conventional play opportunity that was primarily due to AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 6 1 the ability to acquire 3D seismic over that entire 2 area. And really for the first time have an 3 opportunity to look for conventional plays in that part 4 of the North Slope. 5 The company then hygraded down to about the 6 lease position that you see shown on the map. There 7 were two stratigraphic test wells drilled in 2012 as 8 part of the resource play and then as it transitioned 9 to the conventional play an exploration well was 10 drilled in 2015 at Alkaid 1. At that point the state 11 had issues with the tax credit which caused the company 12 to stall for a little bit and in the end of 2018, early 13 2019 there was a transaction with Pantheon Resources 14 which is a publicly traded company on the London AIM 15 Stock Exchange that basically allowed the company to 16 get out from under the tax credits, shifted those off 17 to a predecessor company and allowed for a transaction 18 where basically the assets were purchased by Pantheon 19 Resources. And the project continued under the 20 Pantheon Resources' banner and Great Bear Pantheon 21 became the operator of those leases. 22 In 2019 we reentered Alkaid 1 and were able to 23 flow oil from that to demonstrate that there was 24 movable oil in the targeted interval, what we called 25 the Alkaid zone of interest. In 2020 the two units AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 7 1 were formed, the Alkaid unit and the Talitha unit and 2 in 2021 the Talitha 1 well was drilled. What -- we 3 don't need to get into today, but there's basically 4 multiple stacked reservoirs that we're targeting within 5 our current acreage position. Each of the wells is 6 able to test different intervals and within the Alkaid 7 unit there are currently three stacked separate 8 reservoirs that we're looking at, the South Margin Del 9 Taik, that Alkaid zone of interest and then a new one, 10 what we're calling Alkaid Deep for the moment below 11 that. Within the Talitha unit there's also multiple 12 stacked intervals and we were able to both penetrate 13 and test those with the Talitha A well in 2021 and then 14 with the Talitha or with the Theta West well off to the 15 west in 2022, earlier this year. 16 Why don't we go on to the next slide. So 17 brings us to this summer and the -- one of the 18 advantages of our project is that a number of these 19 reservoirs underlie the Dalton Highway. And it gives 20 us the opportunity to test them even before we have all 21 of the information on the reservoir in a way that 22 really hasn't been done on the North Slope in 30 plus 23 years where we can put a gravel pad immediately 24 adjacent to the highway and do a long term test. The 25 location of the Alkaid 2 well is advantageous as you AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 8 1 can see from the photo. So you've got the Dalton 2 Highway which is located immediately adjacent to the 3 pad. The Trans Alaska Pipeline is buried right there 4 as well. So this provides an opportunity both for our 5 current activity where we are testing the well, but 6 also will be advantageous as we move towards a 7 development project and look to access market we can 8 potentially tap right into the Trans Alaska Pipeline 9 from our acreage position. 10 As I mentioned this past summer we drilled the 11 Alkaid 2 well and for details on that well I'll turn it 12 over to Michael. 13 MR. DUNCAN: Thank you. The opportunity we had 14 with the ground pad next to the Dalton Highway allows 15 us to work with far less time constraints than the 16 winter operations on conventional ice exploration. We 17 utilized this opportunity to essentially showcase what 18 a development well or what a true production well could 19 possibly do. This is our first effort towards it. 20 This isn't -- this isn't a development well per se, but 21 it is representative. And the example I'll give of 22 that is the intent was a horizontal. And so in this 23 case we were able to successfully place 5,000 feet of 24 lateral within formation. Before we did that we 25 drilled a pilot hole to evaluate, plugged that back, AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 9 1 landed our lateral and successfully placed as intended 2 in formation. By the time -- doing so took a month of 3 placing gravel and a month and a half of drilling and 4 so we were at that point already. But, you know, it 5 would have been a conventional time constraint in a 6 winter season. 7 Since the drilling operations we were able to 8 successfully stimulate the well. We placed 29 fracture 9 stages and did that through the month of September. 10 Over October we've been working on initial flowback and 11 we've been working on the commissioning of our 12 facilities out there. 13 Next slide, please. You know, this slide 14 showcases both our operations and also in contrast to 15 Alaska seasonal change and really the time that we need 16 to be able to operate as such. So what you're looking 17 at here is the completion operations. Thirty stages is 18 shown here, 29 were pumped to full success, one was a 19 tow stage. This -- what you're looking at is 16 20 stimulation pumps on location, three sand chiefs, 10 21 water tanks, a camp and there's a water supply line 22 that can also be seen in the background there. What I 23 wanted to highlight especially from this is this is an 24 exceptionally large completion in Alaska standards both 25 in the number of stages and the rate with which things AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 10 1 were comped. What you're looking at in the frack pumps 2 here is 10 pumps that were sourced in state, six pumps 3 that were sourced out of Louisiana. So the amount of 4 equipment that was needed we had to bring in from 5 outside. Scale-wise it is a step change for the state 6 of Alaska. 7 Next slide, please. And yeah, I spoke to that 8 earlier, the location being adjacent to the Dalton 9 Highway and having the Trans Alaska Pipeline there will 10 be beneficial in the future, but the facilities and the 11 infrastructure is really the key to this operation. 12 What is shown in these two pictures here is our 13 production facilities. These facilities are designed 14 for a long term test, they give capability for 15 separation and polishing of the oil. They give the 16 potential for water processing and handling, onsite 17 power generation and then the auxiliary supplies like 18 heat, equipment, weather proofing, et cetera. This 19 particular facility was purchased and preassembled in 20 Fort Nelson Bridge, Columbia. I feel that this is a 21 lovely combination of existing Arctic technology seen 22 in Canada, it's commonplace there coupled with Alaska 23 concepts and knowledge. It was preassembled in Canada, 24 taken apart and has been reassembled on our location 25 and is under commission now as we speak. AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 11 1 Next slide, please. And once again with the 2 overview starting from the wellhouse on the left. We 3 have the capabilities for inlet separation, for water 4 processing and injection. The heart of this is a 5 onsite power generation that is now shown in this 6 picture, that was under transport when this picture was 7 taken. But with the power generation we run a fully 8 electric facility, motor control center, fully electric 9 heat. We have gas compression for gaslift and for 10 compressed natural gas beneficial use and then we have 11 fuel gas. As shown in the riser final oil processing, 12 those are holding and polishing tanks and for the 13 ability to give pipeline quality crude. 14 Next slide, please. The concept of the 15 facilities was to be -- facilitate a long term test. 16 It is a temporary facility, but it does allow us to 17 handle all three fluid streams. Oil is polished to 18 pipeline quality and is trucked into the field for 19 sale. Water is intended to be reinjected and that 20 process is under evaluation. The capabilities are 21 there. What is not injected is trucked into the field 22 for disposal. Gas is the subject of today of course is 23 used as beneficially as we can reasonably do. So we -- 24 initially we separate it and we use gas for power 25 generation and heat, and that's the primary thing we'll AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 12 1 do with it. The gaslift is used for well operations so 2 we do use -- beneficially reuse the gas for lift. It 3 says the excess is flared. There's absolutely truth to 4 that, but we also have some abilities for compressed 5 natural gas takeaway. And so we have some C&G 6 capabilities on location. 7 COMMISSIONER CHMIELOWSKI: Mr. Duncan, can you 8 talk a little bit about the annular disposal, you have 9 applied for annular disposal on location and what is 10 the status of that? 11 MR. DUNCAN: At the moment we are not currently 12 using annular injection. The wellbore -- not to get 13 overly technical, but it -- we've seen injection 14 pressures higher than expected and attribute that -- 15 also we attribute it to the effectiveness of drilling 16 mud. And so we've yet to be able to reliably establish 17 low pressure injection at a reasonable rate. So at the 18 moment that is on hold as we commission our facilities 19 and we'll readdress later collectively with the AOGCC 20 of course. 21 COMMISSIONER CHMIELOWSKI: Great. And you just 22 mentioned something about being able to compress gas. 23 Can you talk a little bit about that? 24 MR. DUNCAN: We have C&G trailers that are on 25 location. And we have the ability through our gas AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 13 1 compression to charge them. So we've used them for 2 commissioning purposes, but they can also go in the 3 opposite direction as well. So we can charge C&G 4 trailers and have C&G takeaway. 5 COMMISSIONER WILSON: What's the capability 6 there? 7 MR. DUNCAN: Rate? 8 COMMISSIONER WILSON: Yeah. 9 (Teleconference interference - participants not 10 muted). 11 MR. DUNCAN: I'm anxious to find that out 12 myself. A trailer fully charged holds somewhere 13 between 75 and a 150 MCF, thousand cubic feet, of 14 natural gas. The absolutely takeaway will depend on 15 all of the turnaround time and what we can do there. 16 So, you know, we'll be holding to the number of 17 trailers that we can efficiently use, how quick we can 18 load and offload. We've got to establish what that 19 means, but we're anxious to see. And at the moment I 20 can only speculate. 21 (Teleconference interference - participants not 22 muted). 23 COMMISSIONER CHMIELOWSKI: Please mute your 24 phones. If this part of your strategy for dealing with 25 the gas, excess gas? AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 14 1 MR. DUNCAN: It is. 2 COMMISSIONER CHMIELOWSKI: Okay. 3 MR. DUNCAN: We intend to beneficially reuse 4 all gas that we can. So that's a -- that's a part 5 we've identified and something we've put in place. 6 MR. GALVIN: Next slide, please. So this kind 7 of gets us to the point of the hearing. 8 COMMISSIONER CHMIELOWSKI: Just please restate 9 your name so we know on the record who's speaking. 10 Thanks. 11 MR. GALVIN: Oh, Patrick Galvin..... 12 COMMISSIONER CHMIELOWSKI: Thank you. 13 MR. GALVIN: .....Chief Commercial Officer. 14 The current facilities -- this is a test facility, it's 15 a temporary facility, we don't know what we're going to 16 get from this well and so we're trying to find that 17 out. And as such we're going to have gas that we don't 18 currently have the ability to handle. And for that 19 reason we're going to need to flare during the testing 20 period. Under the -- well, and the primary reason for 21 this well is number 1, to determine what the 22 appropriate facility should be. We don't know what the 23 ultimate gas/oil ratio's going to be, we don't know 24 what the flow rate's going to be of either of these 25 streams. We don't know what size facility we're going AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 15 1 to need in order to develop this reservoir. And that's 2 why we need to test it. And we need to be able to flow 3 it to the point where we know both short term and long 4 term what these facilities need to be able to handle. 5 And secondly, we need to assess whether it's going to 6 be economic. In order to get that investment and to 7 build those facilities, we're going to be able to 8 demonstrate that we can produce enough oil that makes 9 it pay itself back. 10 COMMISSIONER CHMIELOWSKI: Okay. 11 MR. GALVIN: Next slide. Under the AOGCC 12 regulations it allows for flaring during the testing 13 period. I think the purpose of this hearing is to 14 recognize that. As we mentioned earlier Great Bear's 15 in a unique position where we can do a long term test 16 that hasn't really been done on the North Slope for new 17 discoveries because of the typical restriction of 18 seasonal drilling for those discoveries. Usually 19 you're constrained by the fact that you're on ice and 20 the ice is going to melt and so you have a very limited 21 window for testing. We have the advantage of being 22 right on the road, we have a gravel pad, we can do a 23 longer term test. We need to -- AOGCC needs to make 24 that determination of when is the test done and when 25 does regular production start. We need to be able to AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 16 1 do the test in order to get to the point where we can 2 design the facilities, attract the investment and 3 develop this reservoir. And so we need to find that 4 line in terms of when is testing done and when does 5 regular production start. For our purposes we need to 6 be able to test long enough to be able to reasonably 7 predict what the flow of this reservoir and what the 8 future wells are -- is going to look like. And we 9 wanted to present to you in the coming slides kind of 10 what are the components of that evaluation and when do 11 we have enough information to know what the well's 12 ultimately going to produce. 13 COMMISSIONER CHMIELOWSKI: During this what you 14 call testing phase what will happen with the oil, will 15 it be disposed of or sold? 16 MR. GALVIN: Sold. 17 COMMISSIONER CHMIELOWSKI: Sold to? 18 MR. GALVIN: To -- currently we have a contract 19 with Hilcorp. 20 COMMISSIONER CHMIELOWSKI: Okay. 21 MR. GALVIN: We're looking for other buyers as 22 well. It's very high quality light sweet crude, 36 to 23 39 API weight and as Michael said we -- we're able to 24 process to the point where it's in good shape as we 25 ship it off. AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 17 1 COMMISSIONER CHMIELOWSKI: Okay. 2 MR. GALVIN: Next slide. Michael, introduce 3 yourself again. 4 MR. DUNCAN: Yes, this is Michael Duncan again, 5 Chief Operating Officer for Great Bear Pantheon. 6 COMMISSIONER CHMIELOWSKI: Just for the record 7 state the slide number you're on in case people are 8 trying to catch up, slide 10. 9 MR. DUNCAN: I believe this is slide number 10. 10 COMMISSIONER CHMIELOWSKI: Yeah, thanks. 11 MR. DUNCAN: I offer the next following slides 12 as an illustrative example of the data we're trying to 13 gather. And ultimately can be summed up as we're 14 trying to assess the decline curve for these wells, the 15 production profile. But I offer this as the challenges 16 of ascertaining a production profile from limited data. 17 And so what you see here is a example of a decline 18 curve and typically in a hyperbolic decline they are -- 19 three factors will determine the profile of the 20 production and that's the initial production, the 21 initial decline rate and what we call the B factor. 22 And a B factor is a tuning factor for a algorithm 23 instead of a decline curve. And so what you see here 24 is a typical production profile for an early well. 25 Shown in the blue here is a water recovery phase, post AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 18 1 fracture stimulation. There is a significant amount of 2 fluid that must be mobilized before formation fluid is 3 really brought into the reservoir. And that's shown 4 early. As the clean-out phase progresses formation 5 fluid will begin to come in and we'll eventually reach 6 what we call an initial production. And then from 7 there once we see an initial production the expected 8 decline is most what we'll give. And so the decline 9 rate will be established and eventually it'll begin to 10 level off and that's a typical production curve for a 11 -- for any well, but this hyperbolic decline is the 12 typical means of forecasting especially unconventional 13 wells. 14 Next slide, please. So once again for an 15 illustrative example I offer two hypothetical declines. 16 And these are reasonable declines based on this type of 17 completion seen elsewhere in the lower 48. And so I've 18 produced two hypothetical forecasts, one in blue, one 19 in orange. We're calling them forecast A and forecast 20 B. And what is -- what I intend to convey with this is 21 the difference of these forecasts despite early 22 production being very similar. And so what you see is 23 that these wells both -- these forecasts both begin 24 with an IP or a QI of 1,285 barrels of oil per day and 25 a 90 percent initial decline. The B factor is AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 19 1 different in these two forecasts, one being 1.2 and one 2 being .5 and those are both reasonable decline B 3 factors that can be seen elsewhere in the lower 48, 4 elsewhere with this type of completion. But the 5 difference in this particular -- in these two examples 6 is that one is a million barrel well and one is a 2 7 million barrel well. And so I offer this spectrum as a 8 -- as a analog to what's seen elsewhere and what we're 9 trying to understand and the variance that can be seen 10 in between wells. And I'll walk you through the 11 production and the forecasting to show the challenges 12 of predicting a well with early information. These are 13 two very different production profiles with very early 14 data very similar. 15 Next slide, please. 16 COMMISSIONER CHMIELOWSKI: Mr. Duncan, is there 17 a specific location in the lower 48 that you're using 18 as an analog? 19 MR. DUNCAN: No, there's not. You would see 20 similar declines like this in the Permian, Wolfcamp 21 Bone Spring, similar to this though it's not a true 22 analog because it's gas production, you can see similar 23 production profiles in the Barnett and the Marcellas. 24 I'm not as familiar with the Baukin and so I couldn't 25 speak to how well that would be analogous, but AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 20 1 certainly those three basal plays have production 2 profiles similar to this and have wells that are 3 forecasted with those parameters. 4 COMMISSIONER WILSON: And, Mr. Duncan, these 5 two production profiles are to illustrate, but they're 6 not necessarily based on data from your well; is that 7 correct? 8 MR. DUNCAN: That is absolutely correct. At 9 this point we still have no data to forecast with from 10 the well. These we believe are reasonably 11 representative of what a development well could produce 12 and why I chose those numbers in that region. We've 13 seen that to some extent validated through third party 14 contingent resource reserve reports -- contingent 15 resource reports. And so I believe it's reasonable 16 numbers, believe they are numbers that can be achieved 17 through production, but at this point we've yet to 18 advance the project far enough to demonstrate that. 19 On this slide I'm beginning to show the early 20 data for those two forecasts. And what you see here 21 is..... 22 (Teleconference interference - participants not 23 muted). 24 MR. DUNCAN: Okay 25 COMMISSIONER CHMIELOWSKI: Go ahead. AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 21 1 MR. DUNCAN: So once again what you see here is 2 the early production numbers for those two examples 3 that I've chosen for illustrative purposes. And in two 4 months of data they're essentially identical. There 5 would be no means of distinguishing one from the other 6 or no means of properly forecasting this. 7 (Teleconference interference - participants not 8 muted). 9 COMMISSIONER CHMIELOWSKI: One minute, we're 10 just troubleshooting something here. 11 (Pause) 12 COMMISSIONER CHMIELOWSKI: Thank you. 13 Continue. 14 MR. DUNCAN: Okay. And so early on in a 15 production profile and in this case two months worth of 16 data, the point is that it's really not enough data to 17 properly show what the wells can do. And as said these 18 two hyperbolic declines, one's a million barrel well 19 and one is a 2 million barrel well. 20 Next slide, please. When we begin to look a 21 little further down the road in six months we can a 22 divergence and we can begin to see a means of 23 forecasting. And so for this example at this point you 24 can notice that there is a divergence in the wells and 25 that's what I intend to show with this example is that AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 22 1 it does take a few months and you begin to see a real 2 shape of a curve that you can begin to diagnose. And 3 so again this is all still a little speculative on the 4 GORs, but at least a production profile is emerging. 5 Next slide, please. And then of course here's 6 24 months again. You know, after nine months you begin 7 to see enough divergence to properly forecast these 8 wells. And so I just wanted to walk through that, 9 that's a quick example of decline curve analysis and 10 what we're really trying -- the data we're really 11 trying to provide, is this a 1 million barrel well, is 12 this a 2 million barrel well. And that difference is 13 extremely important not only for investment and 14 understanding that side of it, but also for facilities 15 design and processing capabilities and our long term 16 forecasts. And of note this early in the Barnett, I 17 had experience with this when we began to forecast 18 wells in the Barnett shale. That's my personal 19 experience with it. This is a big -- big conclusion 20 there is how to design facilities and what does the 21 long term production profile look like, steep early 22 declines, where do they flatten out. And those are big 23 questions that really helped define operational paths 24 forward and help define how to develop an acreage. 25 COMMISSIONER CHMIELOWSKI: Mr. Duncan, when you AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 23 1 talk about designing facilities what is the scale of 2 the facilities that you're thinking of, are you talking 3 about large facility? 4 MR. DUNCAN: Great question. At this point 5 it's still very speculative. A look early on and the 6 facility is capable of 30,000 barrels a day processing, 7 somewhere in that ballpark. We've yet to dive deep 8 into that because hopefully shortly, you know, in a 9 matter of months we'll have enough data to begin to do 10 the real design. But at this point the concept of a 11 30,000 barrel a day facility is very possible. Yeah, 12 to date I've yet to be more sophisticated than that. 13 COMMISSIONER CHMIELOWSKI: Thank you. 14 MR. DUNCAN: Next slide, please. 15 MR. GALVIN: This is again Pat Galvin, Chief 16 Commercial Officer. So really in conclusion being able 17 to fully test the Alkaid 2 is critical to being able to 18 advance the project. We need to know -- as Michael 19 just alluded we need to know what size facilities we 20 have to design and that then leads to how much are 21 those going to cost and are we going to be able to get 22 enough oil from these wells in order to make that 23 project economic. All of that is derived from a 24 forecast of what the reservoir can do. We will not 25 know that with any great certainty until we've done AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 24 1 enough of this testing to establish what that decline 2 curve's going to look like and in particular what the 3 leveling off level's going to be. If we are having to 4 prematurely shorten that test because of a restriction 5 on flaring because we don't have the capacity to handle 6 the gas, then it could potentially cause the project to 7 not be able to advance even though ultimately it may 8 have been able to prove itself both economic and worthy 9 of additional investment. And that's the risk that we 10 see and that we want to make sure we convey that the 11 state's interest is in seeing this project be able to 12 prove itself up and not be prematurely held back and 13 potentially restricted from being able to demonstrate 14 what it can do. 15 The level of uncertainty that Michael was able 16 to demonstrate in terms of the variability of what that 17 decline curve could look like early on will result in 18 perceived risk of any future investment in this 19 project. And so we want to de-risk the project by 20 advancing this test far enough to be able to provide 21 certainty with regard to what that decline curve's 22 going to look like. As a result we don't know at this 23 point what our decline curve is going to initially look 24 like. Based on the modeling that we've done and the 25 information that Michael's just shown, we're expecting AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 25 1 about a nine month period in order to be able to reach 2 a level of confidence with our decline curve analysis 3 to be able to both appropriately design the facilities 4 and determine the economics of the project. And so 5 that's the nature of our request. 6 COMMISSIONER CHMIELOWSKI: I see that on your 7 fourth bullet point, this is slide 15, you say or until 8 the decline curve is known. Do you have criteria to 9 establish a success case before nine months? 10 MR. GALVIN: There's -- so there's success case 11 and then there's being able to design the facility. So 12 I think when we say when the decline curve is known 13 it's basically when that B factor, when the leveling 14 off has enough certainty that we can say okay, this is 15 about where we're going to level off and we can project 16 what the long term production of this well's going to 17 be. And that could come early in the project, we don't 18 know, but we expect given the analogs that Michael's 19 looked at, that it could last as long as nine months 20 before we see that leveling off. 21 COMMISSIONER CHMIELOWSKI: Do you -- you 22 provided analogs for the oil production, do you have 23 something similar for gas or is it about the same kind 24 of curve? 25 MR. DUNCAN: This is Michael Duncan. I want to AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 26 1 be careful with the term analog. Examples is what..... 2 COMMISSIONER CHMIELOWSKI: Okay. 3 MR. DUNCAN: .....what I intended to provide. 4 I do not have analogs handy, not that they aren't -- 5 not that they aren't available. 6 COMMISSIONER CHMIELOWSKI: Are there any 7 publications such as SPE papers that support the nine 8 month testing period? 9 MR. DUNCAN: That's an interesting question. I 10 don't know how to answer that, I've never searched for 11 that. And so I think that's the best answer I can give 12 at the moment. 13 COMMISSIONER CHMIELOWSKI: Great. Thanks. Go 14 ahead. 15 COMMISSIONER WILSON: For clarity on point 16 number 4 up there, you're saying nine months is the 17 maximum? 18 MR. DUNCAN: To be clear we -- there is no 19 maximum, but we believe that after nine months we 20 should have enough information to be able to predict 21 where within a range that is sufficient to design the 22 facilities and to determine the economics. It's I 23 guess a possibility based on operational issues that at 24 nine months we haven't gathered that type of 25 information in which case we would be back talking to AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 27 1 you about the reason for that. 2 COMMISSIONER WILSON: Yeah, that was the point 3 of my question because it leaves it a little open-ended 4 until the decline curve is known. So..... 5 COMMISSIONER CHMIELOWSKI: Mr. Galvin and Mr. 6 Duncan, does that conclude your presentation or is 7 there. 8 MR. GALVIN: The rest is just the confidential. 9 COMMISSIONER CHMIELOWSKI: Confidential 10 section. Okay. All right. Now the AOGCC will switch 11 to the confidential session. Before we do, Great Bear, 12 please state in general terms what you will be 13 presenting in the confidential session and why it 14 should be held confidential. 15 MR. GALVIN: We'll be presenting information on 16 the most recent operations. This information is not 17 yet public and it could be misinterpreted by the 18 market. We're a publicly traded company and we do not 19 want to have that information go out in a manner that 20 could cause confusion. 21 COMMISSIONER CHMIELOWSKI: Great. And about 22 how much time will you need for the confidential 23 session? 24 MR. GALVIN: Depending on the questions it'll 25 only take five, 10 minutes to present the information AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 28 1 then open to questions. 2 COMMISSIONER CHMIELOWSKI: Great. Thinking we 3 will exit or I guess put on pause the public Teams 4 meeting. We could do that for -- let's see, what's the 5 time. The time is 10:36. We could plan to resume at 6 11:00 a.m. on the public session. So we will go ahead 7 and we'll have members of the public exit the hearing 8 room. For people on Teams the public Teams will go on 9 pause or on hold and resume at 11:00 o'clock a.m. So 10 the AOGCC will now switch to the confidential session. 11 ** AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 29 1 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 30 1 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 31 1 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 32 1 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 33 1 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 34 1 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 35 1 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 36 1 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 37 1 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 38 1 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 39 1 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 40 1 8 (Pause) 9 COMMISSIONER CHMIELOWSKI: All right. The time 10 is 11:13 a.m. and the AOGCC and Great Bear have 11 concluded the confidential session and are now resuming 12 the public session so we are back on record. 13 I do have a couple of questions for you guys on 14 the public session and the first one is you talked in 15 your application and in the presentation today about 16 how this horizontal multistage frack is unusual in some 17 way. But there are many horizontal fracked wells in 18 Alaska. So say again why this well's different? 19 MR. DUNCAN: I think two big reasons are scale 20 and method. This is a slick water frack and it's at -- 21 it's 29 stages. We typically don't see that here on 22 the North Slope, to my knowledge that's the biggest 23 horizontal completion in the state and then as further 24 evidenced by the need to import horsepower just to be 25 able to accomplish it. AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 41 1 COMMISSIONER CHMIELOWSKI: So the scale of it 2 is really what makes a difference? 3 MR. DUNCAN: Yes. 4 COMMISSIONER CHMIELOWSKI: Yeah. 5 MR. DUNCAN: And the slick water application. 6 COMMISSIONER CHMIELOWSKI: Okay. 7 MR. DUNCAN: Slick water has been used to here 8 before in the state of Alaska to my knowledge, but I 9 don't -- I understand it's not commonplace and 10 certainly not at this magnitude or this type of 11 horizontal application. 12 COMMISSIONER CHMIELOWSKI: Okay. And just for 13 the record can you talk about what slick water is and 14 what that means? 15 MR. DUNCAN: Be glad to. When using fluid to 16 place sand or proppant in a formation various types of 17 fluids can be used. One of the ones I understand is 18 more complex here in Alaska is what's called GelFrack 19 where a guar based gel is used to viscosify fluid, that 20 carries proppant into formation and then the gel is 21 broken to leave the proppant there and to allow the 22 fluid to move out of the way. Slick water is a term 23 that's been coined and is in vogue now. It's water 24 used to place sand or proppant without the viscosifiers 25 of gel in them. Typically the term slick refers to a AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 42 1 friction reducer that is used to lower pumping pressure 2 and allow higher rates. And so that -- the term slick 3 water's come in vogue, but the general premise as I 4 understand it is the lack of gels, the lack of 5 complicated chemistry, the use of water to mobilize 6 fluid and potentially a friction reducer to mobilize 7 faster. 8 COMMISSIONER CHMIELOWSKI: Okay. Thank you. 9 And the second question we have is what alternatives 10 has Great Bear considered besides flaring. I 11 understand there's a gasline that runs along the Dalton 12 Highway and you have some compression ability to what 13 are all the alternatives you've considered? 14 MR. DUNCAN: With the test we -- so we did 15 consider looking at putting gas into the fuel gasline. 16 We began having conversations with Alyeska Pipeline 17 Service Company. We had no -- we didn't have the 18 parameters that you need to have that kind of a 19 discussion because we had really no idea of how much 20 gas we were talking about and whether or not we would 21 have any gas we needed to produce and dispose of. The 22 level of both engineering and advance investment to 23 accomplish that was far beyond what would be 24 justifiable for a test program. And so that was one of 25 the things that we sort of initially looked at. We AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 43 1 looked at the opportunity of injecting it, but there's 2 no injection really capability in that area and we've 3 had preliminary discussions with AOGCC about ultimately 4 ending up in a position where we can inject it, but 5 that's going to require a whole different well as well 6 as of much extended regulatory process to be able to 7 put that in place and that's really not feasible for a 8 test well. As Michael said we're looking at C&G 9 production capacity and this is a very new thing on the 10 Slope, we're the first customer of a particular vender 11 who provided it to us. There are very limited capacity 12 both for the generation and the storage and then 13 ultimately disposal of what you do with the C&G if you 14 create it. I think we have the only tanks that are on 15 the Slope right now on our site. And so the -- both 16 the logistics and the economics of that during that 17 test project where we both didn't know what volumes 18 we'd be talking about, the duration we'd be talking 19 about and no ability to make a infrastructure 20 investment on a test project. That limited that 21 capacity as well. 22 We moved to a gas turbine fired electrical 23 plant which is really as far as I know the first time 24 it's been used on a test project in Alaska as a way of 25 mitigating the use of gas and trying to minimize the AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 44 1 amount of flaring that would be required, trying to be 2 innovative in our use of the gas generated or the gas 3 fired electrical generation was an approach to do just 4 that, just try to minimize the need for flaring. In 5 addition on our other wells we've used nitrogen as our 6 lift gas, we've put in place the capacity to use the 7 well generated gas as a life component again as a way 8 of mitigating the required flaring. 9 COMMISSIONER CHMIELOWSKI: Any questions, 10 Commissioner Wilson. 11 COMMISSIONER WILSON: I guess with the C&G and 12 the gas fired turbine on location, what is your full 13 capability I guess to utilize the gas other than 14 flaring? 15 MR. DUNCAN: Thinking it through to make sure I 16 provide reasonable answers and I don't get my numbers 17 confused. I apologize. If I remember correctly our 18 facilities are designed at full capacity it's a 19 megawatt of power generation. And we can consume the 20 majority of that. It's been -- this is what I'm trying 21 to think through is my gas conversion factors and what 22 fuel consumption that is. I believe it's in the 23 several hundred MCFD consumption for the beneficial 24 use. 25 COMMISSIONER WILSON: That's for the generator AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 45 1 or total C&G end? 2 MR. DUNCAN: Well, for the generator. And the 3 generator will provide heat and lift. Some gas will be 4 confused in lift, some gas will be taken away and once 5 again with the -- with the takeaway capacity of C&G 6 it's for the first to use the system and I do not know 7 the ability to load and offload and the turnaround time 8 for trailers yet. So that is yet to be seen. But I 9 believe our facilities through power generation and 10 through the heat use that it -- you know, all the 11 beneficial use for power gen and the lift I anticipate 12 is multi hundred standard cubic feet -- multi hundred 13 thousand standard cubic a day. 14 COMMISSIONER CHMIELOWSKI: Yeah, and just to 15 confirm, Mr. Duncan, in your application it states that 16 the in-field gas uses could consume up to 150,000 cubic 17 feet a day. 18 MR. DUNCAN: There we go. 19 COMMISSIONER CHMIELOWSKI: You're saying more 20 or you're saying 150,000 cubic feet a day's correct? 21 MR. DUNCAN: I'm saying I'm struggling to 22 remember my..... 23 COMMISSIONER CHMIELOWSKI: Okay. 24 MR. DUNCAN: .....conversion factors. It's a 25 megawatt of power generation we're bringing in and that AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 46 1 is the primary consumption. Secondary consumption is 2 the takeaway. And that was my struggle is I 3 forget..... 4 COMMISSIONER CHMIELOWSKI: Okay. So that's the 5 number you're..... 6 MR. DUNCAN: .....how much fuel. 7 COMMISSIONER CHMIELOWSKI: .....that's the 8 number you're looking for is 150,000 cubic feet? 9 MR. DUNCAN: Thank you very much for that. 10 COMMISSIONER CHMIELOWSKI: Okay. 11 MR. GALVIN: And Pat Galvin. I think -- we 12 don't want to leave the impression that there is a true 13 takeaway capacity with the C&G. The C&G is both 14 physically and commercially constrained. We are truly 15 a test bed for the current vender who is providing it. 16 Our understanding is that they do not have current 17 buyers for the C&G, we're the first buyers of the C&G 18 when we brought it onto our site. We generate -- if we 19 generate C&G there's no buyer for the C&G that we 20 produce. So we don't have the ability to simply just 21 ramp up C&G production by adding more tanks, if there 22 were tanks even available. We don't have anyplace to 23 put that C&G once we buy it, that's a whole market that 24 would have to be created and again we're a test 25 project. If we are successful with our project we will AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 47 1 definitely be looking for ways of commercializing the 2 gas as a way of both generating revenue and minimizing 3 the amount that we have to handle, but as a test 4 project we are not in a position to actually consider 5 C&G as an offload. 6 COMMISSIONER CHMIELOWSKI: I have nothing 7 further. Commissioner Wilson. 8 COMMISSIONER WILSON: I have nothing further. 9 Thank you. 10 COMMISSIONER CHMIELOWSKI: Great. Okay. Well, 11 at this time I would like to offer any member of the 12 public the opportunity to testify or provide comments. 13 Written comments were received this morning from the 14 Trustees for Alaska. Is there anybody in the room who 15 would like to testify? 16 (No comments) 17 COMMISSIONER CHMIELOWSKI: Seeing a no, is 18 there anybody online or on Teams who would like to 19 provide comments or testify? 20 MR. CHAMBERS: Hi. This is Brent Chambers. 21 Can you hear me? 22 COMMISSIONER CHMIELOWSKI: Yes, I can. 23 MR. CHAMBERS: I sent you, Samantha, a written 24 support of this project with some reasons why I believe 25 it's a good recommendation to move it forward. AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 48 1 COMMISSIONER CHMIELOWSKI: Thank you, Mr. 2 Chambers. Were those received, Samantha? 3 MS. CARLISLE: Yes. 4 COMMISSIONER CHMIELOWSKI: Yes. Thank you. 5 Would you like to provide testimony today? 6 MR. CHAMBERS: No, just again as a past oil and 7 gas explorer, developer up on the North Slope for 30 -- 8 over 30 years, I've been following this project and 9 again I think it's unique that it's off the Dalton 10 Highway on gravel, it's not subject to exploration as 11 Michael pointed out. So again it's a good test of 12 permeability of rocks and it's necessary to move 13 forward other projects nearby which on the range in 20 14 billion barrels plus oil in place. 15 COMMISSIONER CHMIELOWSKI: Thank you. Okay. 16 Is there anybody else online who would like to provide 17 comments or testimony? 18 (No comments) 19 COMMISSIONER CHMIELOWSKI: Do you see anything 20 in the chat, Samantha? 21 (No comments) 22 COMMISSIONER CHMIELOWSKI: I believe the record 23 is open until what, 4:30 this afternoon so anybody 24 wishing to provide comments can do so until 4:30 this 25 afternoon. AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 49 1 And I think hearing no other business, any 2 other comments, Commissioner Wilson, one more check. 3 COMMISSIONER WILSON: I'm good, thanks. 4 COMMISSIONER CHMIELOWSKI: Thank you. So 5 hearing no other business, the time is 11:26 a.m. and 6 this hearing is now adjourned. 7 (Hearing adjourned - 11:26 a.m.) 8 (END OF PROCEEDINGS) 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 AOGCC 10/27/2022 ITMO: GREAT BEAR PANTHEON OTH 22-028 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 50 1 TRANSCRIBER'S CERTIFICATE 2 I, Salena A. Hile, hereby certify that the 3 foregoing pages numbered 02 through 50 are a true, 4 accurate, and complete transcript of proceedings in 5 Docket number: OTH 22-028, transcribed under my 6 direction from a copy of an electronic sound recording 7 to the best of our knowledge and ability. 8 9 _______________ _______________________________ 10 DATE SALENA A. HILE, (Transcriber) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 AOGCC Hearing Flaring of Associated Gas Alkaid-2 Well October 27,2022 (Public Slide Pack) 2 GREAT BEAR PANTHEON’S ACREAGE ON THE NORTH SLOPE Alkaid-2 Project Overview Oooguruk Alpine Kuparuk/ West Sak 14 BB OIP Tarn Prudhoe Bay 33 BB OIP Northstar Endicott Point Thompson 3D Seismic Willow Badami Pantheon Leases 10 Miles Cassin Milne Point Point MacIntyre Meltwater Smith Bay Theta West Area ANWR NPRA DaltonHighwayTAPSHorseshoe/Pikka Alkaid-2 Well Talitha Unit Slope Fan System –2.2 BNBBLS OIP Alkaid Unit Alkaid Reservoir: recoverable resource 76 mmbbls SMD: 2.6 BNBBLS OIP (Alkaid & Talitha Units) First production pilot –Oct 2022 Field Peak production: Alkaid -30,000 BOPD SMD -120,000 BOPD Theta West Lower Basin Floor Fan Net 17.8 BNBBLS OIP Net 1.7 BNBBLS recoverable resource Alkaid-2 –Location, Location, Location3 Dalton Hwy TAPS Drilling Operations •July/August 2022 •Nabors 105AC Rig •Pilot Hole: •8,950’ MD, •8,584’ TVD •5000’lateral •Bottomhole: •14,300’ MD, •8,056’ TVD Alkaid-2 Project Overview Alkaid-2 –Location, Location, Location4 Dalton Hwy TAPS Completion Operations •September 2022 •30 Stages •16 Pump Trucks •3 Sand Chiefs •10 Water Tanks •Management Camp Alkaid-2 Project Overview WaterHose ALKAID PRODUCTION FACILITIES PRE-ASSEMBLED IN FORT NELSON, CANADA5 •Components purchased around Canadian oil field •Pre-assembled in Fort Nelson, BC •Plumbed and connected with utilidor •Disassembled in August and trucked to North Slope •Re-assembled at Alkaid Pad in September/October Alkaid-2 Project Overview ALKAID PRODUCTION FACILITIES6 •Oil-Water -Gas Separator •Water Injection Capability •Gas Lift Capability •Gas-fired Turbine to Power all Equipment Alkaid-2 Project Overview ALKAID FLOWBACK OPERATIONS7 •Oil is trucked in-field for sale •Water not injected is taken to Grind & Inject for disposal •Gas is used for •power generation •facility heating •gas-lift •only then is the excess gas flared Alkaid-2 Project Overview Gas Flaring –Objectives and Impact of Decision 8 GREAT BEAR PANTHEON •Great Bear Pantheon is seeking a discreet period of time to flare associated gas at the Alkaid-2 well while we conduct a Pilot Production Test (PPT). •The PPT is designed to reasonably predict the production profile and ultimate recovery from the well for two purposes: •Determine the appropriate design specifications and requirements of production facilities •Accurately assess the economics of full-field development Gas Flaring Decision 9 GREAT BEAR PANTHEON •20 AAC 25.235(d)(6) states: “upon application, the commission will, in its discretion, authorize the flaring or venting of gas for purposes of testing a well before regular production.” (emphasis added) •Neither “testing” nor “regular production” are defined. •Alkaid-2 is being tested to determine production facility capacity design requirements and until it demonstrates whether or not the Alkaid Production Zone can be produced at economic rates. •If yes, then development phase can begin and processing facilities, including gas handling, can be designed and installed. •Regular production won’t begin until the testing is complete. Components of a Decline Curve 10 DATA TO BE GATHERED IN THE PPT •Qi –Initial Production (Known after clean-up) •Di –Initial Decline Rate (Observed early in test) •B factor –When the curve begins to flatten out (Only observed deeper into the test) Qi Di B factor time Oil (BOD) Water Recovery & Clean-out Production Tes t Illustrative Example -Decline Curve Comparison*11 •Two very different wells •One with twice the estimated ultimate recovery (EUR) of the other well •Yet, an early assessment could entirely miss the difference Why An Extended PPT is Necessary Forecast B Qi –1285 Di –0.9 B factor –0.5 Forecast A Qi –1285 Di –0.9 B factor –1.2 One Million vs Two Million BBLs Demonstration of Need For Time - Sample Well For Illustration Only * Modelled decline curves based on a third-party wells for illustrative purposes only. 12 •2-months into testing •Decline curves nearly identical •These wells would have similar distribution of predicted EUR •Low confidence in predicted EUR Forecast B Qi –1285 Di –0.9 B factor –0.5 Forecast A Qi –1285 Di –0.9 B factor –1.2 Illustrative Example -Decline Curve Comparison* Why An Extended PPT is Necessary Premature Assessment After 2-Months * Modelled decline curves based on a third-party wells for illustrative purposes only. 13 •6-months into testing •Decline curves starting to differentiate •EUR is still highly speculative Forecast B Qi –1285 Di –0.9 B factor –0.5 Forecast A Qi –1285 Di –0.9 B factor –1.2 Early, Risky Assessment Illustrative Example -Decline Curve Comparison* Why An Extended PPT is Necessary After 6-Months * Modelled decline curves based on a third-party wells for illustrative purposes only. 14 •Differentiation becomes clear at 9-months •Reliable prediction can be made with increasing confidence as the test proceeds Forecast B Qi –1285 Di –0.9 B factor –0.5 Forecast A Qi –1285 Di –0.9 B factor –1.2 Reliable Assessment Illustrative Example -Decline Curve Comparison* Why An Extended PPT is Necessary Full Test Needed to Generate Accurate Production Profile * Modelled decline curves based on a third-party wells for illustrative purposes only. A Full PPT is Needed 15 GREAT BEAR PANTHEON •Being able to complete the full PPT is necessary to successfully pursue development of the Alkaid Producing Zone. •At this time,we do not know how long a full PPT will take. •A prematurely shortened PPT will result in an estimated production profile that is highly speculative and will lack the certainty to both attract investment and confidently design production facility capacity. •Great Bear Pantheon requests up to 9-months of flaring or until the decline curve is known to a sufficient certainty to allow the project to proceed. AOGCC Hearing Flaring of Associated Gas at Alkaid-2 Well End of Public Slides 4 CAUTION: This email originated from outside the State of Alaska mail system. Do not click links or open attachments unless you recognize the sender and know the content is safe. From:Bret Chambers To:Carlisle, Samantha J (OGC) Subject:Commenting on Great Bear Petroleum Alkaid #2 gas flaring extension request Date:Thursday, October 27, 2022 10:58:15 AM Samantha. As an Alaska resident my family and I support oil and gas resource development on the North Slope for the following reasons: 1) Royalties and O&G taxes provides the majority of funding for the State of Alaska 2) North Slope O&G activities provide significant high paying jobs, especially during new field startups 3) To insure the Trans Alaska Pipeline System (TAPS) production remains high enough to avoid shutting it down 4) Developments. like Alkaid, provide energy for America’s needs The Alkaid development is different than many of the legacy fields, like Prudhoe Bay and Kuparuk, which have reservoirs with significantly greater porosity and permeability. Oil rate prediction (and decline) is relatively easy to predict when the permeabilities are several mD or better. However, Alkaid (and other Pantheon Resources / Great Bear Petroleum discoveries) have permeabilities between 0.001 and 1 md which require well completions such as multistage fracked horizontals to achieve economic oil rates. Without establishing production decline from appraisal wells, like Alkaid #2, it’s very difficult to establish whether oil production rates will be sufficient for economic development (and the investment of hundreds or billions of dollars). Alkaid #2 understating has a knock on effect for over 20 billion barrels (OOIP) of similar reservoirs discovered by Pantheon Resource / Great Bear Petroleum at Talitha and Theta West. As a retired oil professional, the request for having a long enough appraisal flow period (9 months) is imperative to reduce development risk and to properly size potential development facilities. Pantheon Resources / Great Bear Petroleum is also in a unique position where this test will not be shortened by the normal exploration restrictions of activities on ice. Alkaid #2 has been drilled on gravel, has longer term production facilities available, and is a short distance away from the Dalton Highway for transport of any fluids or materials necessary for a test of approximately 9 months. As you know, gas will be used when possible for providing power, heat, and other needs on pad, before it will be flared. As I understand it, there is also the possibility for compressing excess associated gas onsite. My recommendation is to approve this gas flaring extension for the benefit of the State of Alaska and its residents. Bret Chambers 907-891-1232 cell geophizbc@gci.net 3 October 27, 2022 SENT VIA E-MAIL Samantha Carlisle, Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 samantha.carlisle@alaska.gov Re: Docket Number: OTH-22-028 Dear Ms. Carlisle: On behalf of Alaska Community Action on Toxics, Alaska Wilderness League, and Sovereign Iñupiat for a Living Arctic, I write to raise concerns regarding the application submitted by Great Bear Pantheon LLC (Great Bear) on September 7, 2022, requesting the Alaska Oil and Gas Conservation Commission (AOGCC) approve the flaring of gas associated with the long-term testing of the Alkaid #2 oil well. AOGCC should deny this application because it would result in an impermissible waste of State of Alaska resources and it has serious human health and climate ramifications. According to Great Bear’s request letter and AOGCC’s public notice, the company is requesting permission to flare for up to nine months as part of a long-term pilot production test. The company acknowledges that natural gas produced from the well could range from 150-500 million cubic feet of gas per day. This amounts to 8.3–27.5 metric tons of CO2 equivalent every day.1 Great Bear’s request letter states that it is “hopeful” the natural gas could eventually be used to power the turbines used for the testing, and thus use up to 150 million cubic feet of gas per day. Great Bear asserts that, if successful, this could eliminate any flaring from the project. But according to the company’s own findings, even if that amount of natural gas is used power its turbines, there could nonetheless still be flaring above and beyond that of up to 350 million cubic feet of gas per day during its long-term testing. As a threshold matter, Great Bear’s proposal is contrary to state law and regulations prohibiting waste of natural resources. Alaska Statute 31.05.095 is clear in this regard: “The waste of oil and gas in the state is prohibited.” Great Bear seeks approval under 20 AAC 25.235(d)(6), which provides AOGCC with discretion to allow flaring for well testing. AOGCC’s discretion to allow such flaring is cabined by the statutory mandate prohibiting waste of oil and gas resources, and Great Bear’s proposal violates this statutory provision. Further, other provisions of 20 AAC 25.235(d) are 1 U.S. Environmental Protection Agency, Greenhouse Gas Equivalencies Calculator, https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator (last visited, Oct. 24, 2022). By Samantha Carlisle at 9:21 am, Oct 27, 2022 Page 2 of 3 illustrative of scenarios in which AOGCC may allow flaring, such as to allow some amount of less than one hour for testing, for de minimis amounts of gas, or during emergencies. Such enumerated exceptions should inform how AOGCC exercises its discretion in considering the present application. Great Bear’s proposal for this long- term pilot production test is not a proposal to flare de minimis amounts of gas. Indeed, AOGCC’s public notice acknowledges that requests for flaring authorizations in association with well testing are typically for a period few weeks. AOGCCA states that “the 9 months requested by Great Bear is far longer than any approval under 20 AAC 25.235(d)(6) that the AOGCC has ever granted.” AOGCC should not make an exception to its past practices for Great Bear’s current proposal; doing so would be in violation of state law. Air pollution associated with flaring is also a serious concern with a range of impacts. A growing body of scientific research has documented adverse public health impacts from these practices, including studies showing that people upwards of 60 miles away can experience respiratory distress because of flaring.2 Great Bear’s leases are located immediately south of the Prudhoe Bay and Kuparuk oil fields, and are close enough to the community of Nuiqsut to cause air quality and human health impacts — especially from such long-term flaring.3 Studies also show that air pollutants released from flaring can occur at levels associated with reproductive and developmental harms and the increased risk of morbidity and mortality.4 Gas flaring from oil and gas fields is a significant source of black carbon (BC) emissions, a component of particulate matter that damages health and warms the climate.5 Great Bear’s proposal is directly at odds with the protection of human health and should not be allowed as a policy matter. Greenhouse gas emissions associated with Great Bear’s proposed long-term flaring would also pose significant impacts and exacerbate climate change impacts that the Arctic is already experiencing. A recent study explains that while global flaring and venting comprise 7.5% of natural gas produced, their combined impact on health and climate (in terms of Social Cost of Atmospheric Release) accounts for 54%.6 New 2 Wesley Blundell, Anatolii Kokoza, Natural gas flaring, respiratory health, and distributional effects, Journal of Public Economics, Volume 208 (2022) ISSN 0047-2727, https://doi.org/10.1016/j.jpubeco.2022.104601. 3 http://www.pantheonresources.com/investors/presentations/597-agm-presentation-2019/file (Slide 13 map showing leases proximity to Nuiqsut). 4 Hays, Jake & Seth B.C. Shonkoff , Towards an Understanding of the Environmental and Public Health Impacts of Unconventional Natural Gas Development: A Categorical Assessment of the Peer-Reviewed Scientific Literature, 11 PLoS ONE e0154164 (2016); Shonkoff, Seth B.C. et al., Environmental Public Health Dimensions of Shale and Tight Gas Development, 122 Environmental Health Perspectives 787 (2014); Webb, Ellen et al., Developmental and reproductive effects of chemicals associated with unconventional oil and natural gas operations, 29 Rev Environ Health 307 (2014); McKenzie, Lisa M. et al., Human Health Risk Assessment of Air Emissions From Development of Unconventional Natural Gas Resources, 424 Science of the Total Environment 79 (2012); Clean Air Task Force, Fossil Fumes: A Public Health Analysis of Toxic Air Pollution From the Oil and Gas Industry, June 2016, available at http://www.catf.us/resources/publications/files/FossilFumes.pdf. 5 Chen, Chen, David C. McCabe, Lesley E. Fleischman, and Daniel S. Cohan. 2022. "Black Carbon Emissions and Associated Health Impacts of Gas Flaring in the United States" Atmosphere 13, no. 3: 385. https://doi.org/10.3390/atmos13030385. 6 Romsom, Etienne; McPhail, Kathryn (2021) Capturing economic and social value from hydrocarbon gas flaring and venting: evaluation of the issues, WIDER Working Paper, No. 2021/5, ISBN 978-92-9256- 939-6, The United Nations University World Institute for Development Economics Research (UNU- WIDER), Helsinki, https://doi.org/10.35188/UNU-WIDER/2021/939-6. Page 3 of 3 research also shows that the practice of burning unwanted methane — which is primarily intended to combust methane to minimize its emission — is less effective than previously assumed, and that greenhouse gas emissions from flaring methane in the United States are about five times as high as prior estimates.7 Thus, flaring emissions have an outsized impact on the climate. Based on the information provided, the impacts and contributions to emissions are potentially significant — 500 million cubic feet of gas per day creates greenhouse gas emissions equivalent to combusting 2,169 gallons of gasoline daily.8 Prevention of flaring through the collection of excess gas is the most beneficial option for reducing emissions from flaring; capturing and using the natural gas that is produced at wells would ensure that the energy value of the gas is not wasted. In addition, the flare must be operated at all times in a manner consistent with good air pollution control practices for minimizing emissions, and flaring operations must be monitored to ensure they are operated and maintained according to their design.9 AOGCC should not allow Great Bear to operate its proposal in a manner that would waste natural resources and cause significant human health and climate impacts. If you have any questions regarding this letter, please do not hesitate to contact me at (907) 433-2011 or by e-mail at bpsarianos@trustees.org. Thank you for your prompt attention to this request. Sincerely, s/ Bridget Psarianos Senior Staff Attorney Trustees for Alaska 7 Plant, Genevieve, et al, (2022) “Inefficient and unlit natural gas flares both emit large quantities of methane” SCIENCE Vol 377, Issue 6614 DOI: 10.1126/science.abq0385. 8 U.S. Environmental Protection Agency, Greenhouse Gas Equivalencies Calculator, https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator (last visited, Oct. 24, 2022). 9 See U.S. Environmental Protection Agency, Enforcement Alert, EPA Enforcement Targets Flaring Efficiency Violations, August 2012 at 1–2, https://www.epa.gov/sites/production/files/documents/flaringviolations.pdf; see also 40 C.F.R. §§ 63.172(e), 60.482-10. 2 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION RE: Docket Number: OTH-22-028 By application received September 7, 2022, Great Bear Pantheon LLC (Great Bear) requested the Alaska Oil and Gas Conservation Commission (AOGCC) approve the flaring of gas associated with the long-term testing of the Alkaid #2 oil well (PTD 222-077). Gas disposition regulations (20 AAC 25.235) are in place so that the AOGCC can review flaring/venting events to determine whether the event led to the waste of gas. 20 AAC 25.235(d)(6) allows the AOGCC to pre-approve flaring associated with testing a well prior to regular production commencing. Great Bear has applied under this regulation asking that flaring be approved in conjunction with a planned a long-term, approximately nine months long, flow test designed to determine whether the area around the Alkaid #2 well can be commercially developed. Typical requests for flaring authorization in association well testing area for a few weeks, the 9 months requested by Great Bear is far longer than any approval under 20 AAC 25.235(d)(6) that the AOGCC has ever granted. Due to the unique nature of the request the AOGCC has decided to hold a public hearing on this matter before rendering a decision. This notice does not contain all the information filed by Great Bear. You may obtain more information about this filing by contacting the AOGCC’s Special Assistant, Samantha Carlisle, at (907) 793-1223 or Samantha.Carlisle@alaska.gov. The AOGCC has scheduled a public hearing on this matter for October 27, 2022, at 10:00 a.m. The hearing, which may be changed to full virtual if necessary, will be held in the AOGCC hearing room located at 333 West 7th Avenue, Anchorage, AK 99501. The audio call-in information is (907) 202-7104, conference ID no. 673 632 073#. Anyone who wishes to participate remotely using MS Teams video conference should contact Samantha Carlisle at least two business days before the scheduled public hearing to request an invitation for the MS Teams. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 west 7th Avenue, Anchorage, AK 99501 or samantha.carlisle@alaska.gov. Comments must be received no later than the conclusion of the October 27, 2022, hearing. Individuals or groups of people with disabilities who require special accommodations to comment or attend the hearing should contact Samantha Carlisle at (907) 793-1223, no later than October 13, 2022. Jeremy M. Price Chair, Commissioner Jeremy Price Digitally signed by Jeremy Price Date: 2022.09.14 11:34:57 -08'00' From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Public Hearing Notice, OTH-22-028, Great Bear Date:Wednesday, September 14, 2022 11:49:18 AM Attachments:OTH-22-028 Public Hearing Notice.pdf By application received September 7, 2022, Great Bear Pantheon LLC (Great Bear) requested the Alaska Oil and Gas Conservation Commission (AOGCC) approve the flaring of gas associated with the long-term testing of the Alkaid #2 oil well (PTD 222-077). Samantha Carlisle AOGCC Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 __________________________________ List Name: AOGCC_Public_Notices@list.state.ak.us You subscribed as: samantha.carlisle@alaska.gov Unsubscribe at: https://list.state.ak.us/mailman/options/aogcc_public_notices/samantha.carlisle%40alaska.gov Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 mailed 09/14/22 1 By Samantha Carlisle at 9:23 am, Sep 08, 2022