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Home My WebLink AboutCO 341 G1. June 20, 2018 2. June 28, 2018 3. August 6, 2018 4. December 17, 2018 5. December 18, 2018 6. January 17, 2019 7. February 12, 2019 Conservation Order 341G PRUDHOE BAY, PUT RIVER BP Exploration (Alaska), Inc. request to amend CO 341F for to authorize down -hole commingling of production from Put River and Prudhoe Bay Oil Pools Notice of Hearing, affidavit of publication, address and e-mail notifications Transcript of hearing and Sign In Sheet for Hearing BPXA request for an extension of time to file reconsideration AOGCC Letter granted 2/17/18 request BPXA Request for Reconsideration Letter accompanying amended Order STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 71h Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF BP ) Conservation Order No. 341 G Amended on EXPLORATION (ALASKA) INC. ) Reconsideration for an order to allow pool wide ) Docket Number: CO -18-016 downhole commingling between the ) Put River and Prudhoe Oil Pools ) Prudhoe Bay Field Prudhoe Oil Pool nune pro tune December 13, 2018 February 12, 2019 IT APPEARING THAT: 1. By letter dated June 22, 2018, BP Exploration (Alaska), Inc. (BPXA), operator of the Prudhoe Bay Unit, applied for amendments to Conservation Orders (CO) 341F and 559 to allow commingled downhole production for wells completed in the Put River and Prudhoe Oil Pools. 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) scheduled a public hearing for August 6, 2018. On June 27, 2018, the AOGCC published notice of that hearing on the State of Alaska's Online Public Notice website, 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 June 28, 2018, the notice was published in the Anchorage Daily News. 3. The AOGCC held a public hearing on this application on August 6, 2018, at the AOGCC offices at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. 4. The AOGCC received no protests to or comments on BPXA's application. FINDINGS: 1. Prudhoe Oil Pool The Prudhoe Oil Pool (POP), in production since 1977, consists of a massive oil rim overlain by a massive gas cap. The POP has numerous enhanced recovery projects occurring in the various parts of the field. Generally speaking POP wells are very productive due to the high-quality reservoir rocks encountered in the pool. 2. Put River Oil Pool The Put River Oil Pool (PROP), (described in CO 559), overlies the POP and is comprised of three lobes (Central, Southern, and Western) of the Put River Sandstone. A fourth lobe, the Northern Lobe, is in hydraulic communication with the POP and is included as part of the POP. The Southern Lobe has been on somewhat regular oil production since 1999 with an active waterflood. Appraisal activities conducted in 2005 identified the presence of oil and gas condensate in the Western and Central Lobes respectively but further development was not pursued at that time in part due to low flowrates that resulted in operational challenges associated with hydrate deposition. 3. Potential for Commineline Conservation Order 341G February 12, 2019 Page 3 of 10 Several wells penetrate the PROP and the POP and would be candidates for downhole commingling. Commingling of production in these wellbores should allow for increased flowrates and flow velocity in the tubing and reduce the potential for hydrates deposition that is a problem for production from wells completed solely in the PROP. Since standalone production of the Central and Western Lobes is not viable due to hydrate deposition those reserves are essentially trapped. Commingling of production with the POP will allow these resources to be recovered. 4. Potential for Crossflow There is potential of crossflow between the POP and the PROP if a commingled well is shut in. For a short duration shut in period the crossflow is not expected to be significant. In the event of a longer duration shut in period the PROP and POP could be mechanically isolated downhole to prevent crossflow. Production Allocation Downhole fluid samples will be collected from each pool for the purposes of geochemical analysis. During the first six months of commingled production a production log, or differential well test, will be run on the well and a geochemical analysis performed to verify the accuracy of geochemical analysis for production allocation purposes. Semi-annual geochemical analysis will be conducted for production allocation purposes and production logs or differential well tests will be run as needed to assess production anomalies. 6. Reservoir Surveillance Bottomhole pressure surveys for the POP would only be conducted in wells that are not commingled with the PROP. Bottomhole pressure surveys for the PROP can be obtained by setting a plug to separate the POP.and PROP. CONCLUSIONS: 1. Downhole commingling of production between the PROP and POP should allow for improved resource recovery from the Prudhoe Bay Unit by allowing for the development of resources within the PROP that would not be recoverable as a standalone development. 2. Production allocation via geochemical analysis in wells commingled downhole has proven to provide adequate results for production allocation purposes elsewhere in the field. 3. Proper reservoir surveillance and monitoring can be accomplished by setting downhole plugs to isolate the PROP and POP so that reservoir pressures in the PROP can be obtained. There's a significant number of wells in the area that penetrate only the POP so losing the ability to obtained reservoir pressures in the POP in the commingled wells will not impact reservoir surveillance or monitoring. 4. In the event of a prolonged period of shut in for a commingled well the PROP and POP can be mechanically isolated downhole to prevent crossflow between the reservoirs. NOW, THEREFORE, IT IS ORDERED THAT: The following rules, in addition to the statewide requirements under 20 AAC 25 (to the extent not superseded by these rules), govern development in the affected area described below: Conservation Order 341 G February 12, 2019 Page 4 of 10 Affected Area: Umiat Meridian Tmnhp�RaW Salim ---- -i TION R12E 1, 2, 3, 4, 10, 11, 12 TION R13E 1, 2, 3, 4, 5, 6, 7, 8, 9, ]0, 11, 12, 13, 14, 15, 16, 24 -- -- —.._ .- T10N _.._ R14E . _-.- -.- ..- .... 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 12, 13, 14, 15, 16 17 18, 19, 20 21 22 23, 24, 25, 26, 27, 28 36 - -- T10N .._. R15E -. .... All - TION. R16E - 5, 6, 7, 8, 17, 18, 19, 20, 29, 30, 31 Tl 1N R11E 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 15, 24, 25 j r TI IN 1 R12E All ---� -- --- -- - - j TIIN R13E All TIIN R14E All TIIN R15E --_ All TI IN R16E 17, 18, 19, 30, 31, 32 T12N R10E 13,24, ----- ---- T12N ---- RUE -- ----- ..... ...... _- .------------------------- ------ - ...... . 15, 16, 17, 18, 19, 20, 21, 22, 25, 26, 27, 28, 29, 30, 32, 33, 34, 35, 36 T12N R12E 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35,36 -..-..--.-. ..........- T12N --- - .. R13E ........ ..............-.-._.. _.._... -- ---- 19, 20, 21,22, 23, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36 T12N T12N R14E R15E 25, 26, 27, 28, 29, 31, 32, 33, 34, 35, 36 25, 26, 27, 28, 29, 30 ,31 ,32, 33, 34, 35, 36 Rule 1 Pool Definition The Prudhoe Oil Pool is defined as (i) the accumulations of oil that are common to and that correlate with the accumulations found in the Atlantic Richfield - Humble Prudhoe Bay State No. 1 well between the depths of 8,110 feet and 8,680 feet, and (ii) the accumulation of oil that is common to and correlates with the interval from 9,638 to 9,719 measured feet on the Borehole Compensated Sonic Log, Run 2, Dated September 28, 1975, in the Atlantic Richfield -Exxon NGI No. 1 well, and that is in hydraulic communication with the gas cap of the former accumulations in the Sag River Formation. The latter accumulation is found within the following area: TI IN R14E: Sections: 1, 2, 11(N/2 and SE/4), 12, 13, 14(E/2), 23(NE/4), 24,25(N/2) Ti 1N R15E: Sections: 6, 7, 8, 17, 18, 19, 20, 29(N/2), 30(N/2) T12N R14E: Sections 35, 36 Umiat Meridian. Rule 2 Well Saacin2 There shall be no restrictions as to well spacing except that no pay shall be opened in a well closer than 500 feet to the boundary of the affected area. Conservation Order 341 G February 12, 2019 Page 5 of 10 Rule 3 Casine and Cementine Requirements (a) Conductor casing shall be set at least 75 feet below the surface and sufficient cement shall be used to fill the annulus behind the pipe to the surface. Rigid high- density polyurethane foam may be used as an alternative to cement, upon approval by the AOGCC. The AOGCC may also administratively approve other sealing materials upon application and presentation of data which show the alternate is appropriate based on accepted engineering principles. (b) Surface casing to provide proper anchorage for equipment, to prevent uncontrolled flow, to withstand anticipated internal pressure, and to protect the well from the effects of permafrost thaw -subsidence or freeze -back loading shall be set at least 500 feet, measured depth, below the base of the permafrost but not below 5000 feet true vertical depth. Sufficient cement shall be used to fill the annulus behind the casing to the surface. The surface casing shall have minimum axial strain properties of 0.5% in tension and 0.7% in compression. (c) Alternate casing programs may be administratively approved by the AOGCC upon application and presentation of data, which show the alternatives, are appropriate and based upon accepted engineering principles. Rule 4 Blowout Prevention Eguioment and Practice (Revoked C.O.341D Rule 5 Automatic Shut-in Eaui)ment (Revoked Other Order 66) Rule 6 Pressure Surveys (Revised: CO 341F.002 and CO 341F.007) (a)An Annual Pressure Surveillance Plan shall be submitted to the AOGCC in conjunction with the Annual Prudhoe Pool Reservoir Surveillance Report by April 1 of each year. This plan will contain the number and approximate location of pressure surveys anticipated for the next calendar year, and it will be subject to approval by the AOGCC by May 1 of that year. These surveys are needed to effectively monitor reservoir pressure within the Prudhoe Oil Pool. A minimum of 5% of the total pressure surveys acquired each year shall be from each of the following development areas: Gas Cap, Gravity Drainage, Flow Station 2 Water/MI Flood (MWAG) Project, Eastern Peripheral Wedge Zone MWAG Project, Western Peripheral Wedge Zone MWAG Project, Eileen West End Waterflood Project, and the Northwest Fault Block MWAG Project. (b) Data from the surveys required in (a) of this rule shall be submitted with the Annual Prudhoe Oil Pool Reservoir Surveillance Report by April 1 of each year. Data submitted shall include rate, pressure, time depths, temperature, and any well condition necessary for the complete analysis of each survey. The datum for the pressure surveys is 8800 true vertical feet subsea. Transient pressure surveys obtained by a shut-in buildup test, an injection well pressure fall-off test, a multi - rate test, or an interference test are acceptable. Calculation of bottom -hole pressures from surface data will be permitted for water injection wells. Other quantitative methods may be administratively approved by the AOGCC. (c)Results and data from any special reservoir pressure monitoring techniques, tests, or surveys shall also be submitted as prescribed in (b) of this rule. Conservation Order 341 G February 12, 2019 Page 6 of 10 Rule 7 Gas -Oil Contact Monitoring (Revised: CO 341F.002 and CO 341F.007) (a)An Annual GOC Monitoring Surveillance Plan shall be submitted to the AOGCC in conjunction with the Annual Prudhoe Reservoir Surveillance Report by April 1 of each year. This plan will contain the number and approximate locations of neutron log surveys anticipated for the next calendar year and be subject to approval by the AOGCC by May 1 of that same year. The neutron logs obtained shall be distributed across Gas Cap, Gravity Drainage, Gravity Drainage Waterflood Interaction, and downdip areas affected by gas and conducted using good engineering practice. (b) The neutron logs run on any well shall be filed with the AOGCC by the last day of the month following the month in which the logs were run. Rule 8 Productivity Profiles (Revised: CO 341F.007) A complete copy of any spinner flow meter or tracer surveys obtained on wells, together with the data and results from the surveys, shall be recorded and filed with the AOGCC by the last day of the month following the month in which a survey is finalized. Rule 9 Pool Off -Take Rates (Revised this order) The maximum annual average oil offtake rate is 1.5 million barrels per day plus condensate production. The maximum annual average gas offtake rate is 3.6 billion standard cubic feet per day, which contemplates an annual average rate of 2.7 billion standard cubic feet per day shipped to the proposed AK LNG GTP and additional capacity to account for production upsets at other fields that feed the proposed AK LNG GTP. Daily offtake rates in excess of these amounts are permitted only as required to sustain these annual average rates. The annual average offtake rates as specified shall not be exceeded without the prior written approval of the AOGCC. Annual average offtake rates mean the daily average rate calculated by dividing the total volume produced in a calendar year by the number of days in that year. However, in the first calendar year that large gas offtake rates are initiated, following the completion of a large gas sales pipeline, the annual average offtake rate for gas shall be determined by dividing the total volume of gas produced in the calendar year by the number of days remaining in the year following initial delivery to the large gas sales pipeline. Rule 10 Facility Gas Flaring (Revoked CO 341C) Rule 11 Annual Surveillance Reporting An annual Prudhoe Oil Pool surveillance report will be required by April 1 of each year. The report shall include but is not limited to the following: 1. Progress of enhanced recovery project(s) implementation and reservoir management summary including engineering and geotechnical parameters. 2. Voidage balance by month of produced fluids, oil, water and gas, and injected fluids, gas, water, low molecular weight hydrocarbons, and any other injected substances (which can be filed in lieu of monthly Forms 10-413 for each EOR project). 3. Analysis of reservoir pressure surveys within the field. 4. Results and where appropriate, analysis of production logging surveys, tracer surveys and observation well surveys. Conservation Order 341 G February 12, 2019 Page 7 of 10 5. Results of gas movement and gas -oil contact surveillance efforts including a summary of wells surveyed and analysis of gas movement within the reservoir. The analysis shall include map(s) and/or tables showing the locations of various documented gas movement mechanisms as appropriate. 6. Progress of the Gas Cap Water Injection project with surveillance observations including; (a) volume of water injected, (b) reservoir pressure results, maps, and analysis (in conjunction with (3.) of this rule), (c) water movement and zonal conformance maps derived from surveillance (such as Pulsed Neutron Logs and 4-D gravity surveys) (d) results of reservoir evaluations of performance (such as material balance and reservoir simulation studies), (e) surveillance plans for the upcoming year, and (f) any plans for change in project operation. Rule 12 Prudhoe Bay Miscible Gas Proiect (PBMGP) (a) Expansion of the PBMGP and infill expansion of miscible gas injection in the NWFB is approved for the 59,740 acre portion of the Prudhoe Oil Pool defined in the record. (b) An annual report must be submitted to the AOGCC detailing performance of the PBMGP and outlining compositional information for the current miscible injectant (MI) necessary to maintain miscibility under anticipated reservoir conditions. (c) The minimum miscibility pressure (MMP) of the Miscible Injectant must be maintained at least 100 psi below the average reservoir pressure in the Prudhoe Bay Miscible Project area. When the Operator demonstrates that the reservoir pressure is no longer declining within the Prudhoe Bay Miscible Project Area (as evidenced by reservoir pressure measurements), the MMP may be maintained at or below the average reservoir pressure in the Prudhoe Bay Miscible Project area. Rule 13 Waiver of GOR Limitation (Revised: CO 341F.007) (a) The AOGCC waives the requirements of 20 AAC 25.240(b) for all oil wells in the Prudhoe Oil Pool of the Prudhoe Bay Field so long as the gas from the wells is being returned to the pool, or so long as the additional recovery project is in operation. (b) For the Prudhoe Oil Pool "oil well' means a well that produces oil at a gas -oil ratio of 200,000 scf/stb or lower. Rule 14 Waiver of "Application for Sundry Approval' Reauirement for Workover Operations The requirements of 20 AAC 25.280(a) are waived for development wells in the Prudhoe Oil Pool of the Prudhoe Bay Field. Sundry work application and reporting requirements shall be done in accordance with the "Well Work Operations and Sundry Notice/Reporting Requirements for Pools Subject to Sundry Waiver Rules" matrix maintained by the AOGCC Rule 15 Waterfloodin2 The AOGCC approves the December 1980 additional recovery application for water -flooding in the Prudhoe Oil Pool subject to the requirements listed in Rule 11 above. Conservation Order 341G February 12, 2019 Page 8 of 10 Any proposed changes must be submitted to the AOGCC for approval. Rule 16 Orders Revoked (Revised this Order) The following Conservation Orders and associated Administrative Approvals and letter approvals are hereby superseded. Conservation orders 78, 8313, 85, 87, 88, 96, 97, 9813, 117, 117A, 118, 130, 137, 138, 139, 140, 141, 143, 145, 145A, 148, 155, 160, 164, 165, 166, 167, 169, 174, 178, 180, 181, 183, 184, 185, 186, 188, 189, 192, 194, 195, 195.1, 195.2, 195.4, 197, 199, 200, 204, 208, 213, 214, 219, 220, 223, 224, 238, 258, 259, 279, 290 and 333, and March 20, 1981 and August 22, 1986 letter approvals. Additionally, conservation orders 341, 341A, 34113, 341C, 341D, 341E, and 341F and all associated administrative approvals (except CO 341D.00I and CO 341 E.003, which remain in effect) are hereby superseded. The hearing records of these orders are made part of the record for this order. Rule 17 Gas Cap Water Iniections The Gas Cap Water Injection Project as described in the operator's application and testimony is approved. Ongoing reservoir surveillance is required to determine that water movement within the reservoir is confined as intended and does not negatively impact overall hydrocarbon recovery, and to determine that the project has resulted in stabilization of reservoir pressure. Rule 18 Commingling of Production in the Same Wellbore (Revised: CO 341F.001 and this order (a) Commingling production from the Aurora Oil Pool in Well S-26 or Put River Oil Pool with the Prudhoe Oil Pool is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: i. Prior to commingling production a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Aurora or Put River Oil Pool (in isolation from the Prudhoe Oil Pool). ii. For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling and analysis must occur at least twice per year and not less frequently than once every seven months. iii. A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. Conservation Order 341 G February 12, 2019 Page 9 of 10 iv. The operator shall submit a review of pool production allocation factors and issues over the prior year with the annual reservoir surveillance report and retain electronic file(s) containing daily allocation data and daily test data for a minimum of five years. V. The volumes reported on Form 10-405—i.e., in accordance with 20 AAC 25.230(b)—must identify commingled production allocated to the Aurora Oil Pool or Put River Oil Pool and the Prudhoe Oil Pool. vi. A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Aurora or put River and the Prudhoe Oil Pools, along with the analyses of the geochemical tests, production logs, and regular well tests. (b) A commingled well that is shut in for more than six months shall have the Put River and Prudhoe Oil Pools mechanically isolated to prevent crossflow between the pools. Rule 19 CO2 Utilization Study By December 31, 2020, the WIOs shall complete a study and submit a report to the AOGCC detailing the best use of the effluent gas stream projected to come from the AK LNG GTP to maximize total hydrocarbon recovery. The study and report shall evaluate the suitability of using CO2 for enhanced recovery purposes in the oil pools on the North Slope in which any of the four main WIOs (BPXA, ExxonMobil, CPAI, or Chevron) have an ownership interest. The study and report shall look at the benefits to using CO2, and mixtures containing CO2, for enhanced recovery purposes (including miscible injection, viscosity reducing, and pressure maintenance type projects as appropriate) and include estimates of additional recovery that would be attributable to CO2 injection. The report shall also evaluate challenges to implementing CO2 injection in these pools. Rule 20 Liquid Hydrocarbon Recovery Maximization Report By June 30, 2021, the WIOs shall submit a report to the AOGCC that provides detailed information about the results of projects and operations undertaken from the effective date of this order through December 31, 2020, as well as information about projects underway or planned at that time to accelerate liquid hydrocarbon production to maximize recovery in advance of the proposed major gas sales associated with the AK LNG project. Rule 21 Administrative Relief Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the AOGCC may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. Conservation Order 341G February 12, 2019 Page 10 of 10 DONE at Anchorage, Alaska nune pro tune December 13, 2018, dated February 12, 2019. Hollis S. French Daniel T. Seamount, Jr. Chair, Commissioner Commissioner APPEAL NOTICE Because this order is entered on reconsideration, this order is the FINAL order or decision of the AOGCC, and may be appealed to superior court. Any appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, this order. 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 on STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7" Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF BP EXPLORATION (ALASKA) INC. for an order to allow pool wide downhole commingling between the Put River and Prudhoe Oil Pools IT APPEARING THAT: Conservation Order No. 341G Amended on Reconsideration Docket Number: CO -18-016 Prudhoe Bay Field Prudhoe Oil Pool nunc pro tunc December 13, 2018 February 12, 2019 1. By letter dated June 22, 2018, BP Exploration (Alaska), Inc. (BPXA), operator of the Prudhoe Bay Unit, applied for amendments to Conservation Orders (CO) 341F and 559 to allow commingled downhole production for wells completed in the Put River and Prudhoe Oil Pools. 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) scheduled a public hearing for August 6, 2018. On June 27, 2018, the AOGCC published notice of that hearing on the State of Alaska's Online Public Notice website, 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 June 28, 2018, the notice was published in the Anchorage Daily News. 3. The AOGCC held a public hearing on this application on August 6, 2018, at the AOGCC offices at 333 West 7u Avenue, Suite 100, Anchorage, Alaska 99501. 4. The AOGCC received no protests to or comments on BPXA's application. FINDINGS: 1. Prudhoe Oil Pool The Prudhoe Oil Pool (POP), in production since 1977, consists of a massive oil rim overlain by a massive gas cap. The POP has numerous enhanced recovery projects occurring in the various parts of the field. Generally speaking POP wells are very productive due to the high-quality reservoir rocks encountered in the pool. 2. Put River Oil Pool The Put River Oil Pool (PROP), (described in CO 559), overlies the POP and is comprised of three lobes (Central, Southern, and Western) of the Put River Sandstone. A fourth lobe, the Northern Lobe, is in hydraulic communication with the POP and is included as part of the POP. The Southern Lobe has been on somewhat regular oil production since 1999 with an active waterflood. Appraisal activities conducted in 2005 identified the presence of oil and gas condensate in the Western and Central Lobes respectively but further development was not pursued at that time in part due to low flowrates that resulted in operational challenges associated with hydrate deposition. 3. Potential for Comminelin¢ Conservation Order 341 G February 12, 2019 Page 3 of 10 Several wells penetrate the PROP and the POP and would be candidates for downhole commingling. Commingling of production in these wellbores should allow for increased flowrates and flow velocity in the tubing and reduce the potential for hydrates deposition that is a problem for production from wells completed solely in the PROP. Since standalone production of the Central and Western Lobes is not viable due to hydrate deposition those reserves are essentially trapped. Commingling of production with the POP will allow these resources to be recovered. 4. Potential for Crossflow There is potential of crossflow between the POP and the PROP if a commingled well is shut in. For a short duration shut in period the crossflow is not expected to be significant. In the event of a longer duration shut in period the PROP and POP could be mechanically isolated downhole to prevent crossflow. Production Allocation Downhole fluid samples will be collected from each pool for the purposes of geochemical analysis. During the first six months of commingled production a production log, or differential well test, will be run on the well and a geochemical analysis performed to verify the accuracy of geochemical analysis for production allocation purposes. Semi-annual geochemical analysis will be conducted for production allocation purposes and production logs or differential well tests will be run as needed to assess production anomalies. 6. Reservoir Surveillance Bottomhole pressure surveys for the POP would only be conducted in wells that are not commingled with the PROP. Bottomhole pressure surveys for the PROP can be obtained by setting a plug to separate the POP and PROP. CONCLUSIONS: 1. Downhole commingling of production between the PROP and POP should allow for improved resource recovery from the Prudhoe Bay Unit by allowing for the development of resources within the PROP that would not be recoverable as a standalone development. 2. Production allocation via geochemical analysis in wells commingled downhole has proven to provide adequate results for production allocation purposes elsewhere in the field. 3. Proper reservoir surveillance and monitoring can be accomplished by setting downhole plugs to isolate the PROP and POP so that reservoir pressures in the PROP can be obtained. There's a significant number of wells in the area that penetrate only the POP so losing the ability to obtained reservoir pressures in the POP in the commingled wells will not impact reservoir surveillance or monitoring. 4. In the event of a prolonged period of shut in for a commingled well the PROP and POP can be mechanically isolated downhole to prevent crossflow between the reservoirs. NOW, THEREFORE, IT IS ORDERED THAT: The following rules, in addition to the statewide requirements under 20 AAC 25 (to the extent not superseded by these rules), govern development in the affected area described below: Conservation Order 341 G February 12, 2019 Page 4 of 10 Affected Area: Umiat Meridian Tmn* Rates SXfim TION R12E 1, 2, 3, 4, 10, 11, 12 TION R13E 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 24 TION R14E 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 36 TION R15E All TION. R16E 5, 6, 7, 8, 17, 18, 19, 20, 29, 30, 31 T11N R11E 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 15, 24, 25 T11N R12E All T11N R13E All T11N R14E All T11N R15E All T11N R16E 17, 18, 19, 30, 31, 32 T12N R10E 13, 24, T12N R11E 15, 16, 17, 18, 19, 20, 21, 22, 25, 26, 27, 28, 29, 30, 32, 33, 34, 35, 36 T12N R12E 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36 T12N R13E 19, 20, 21, 22, 23, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36 T12N R14E 25, 26, 27, 28, 29, 31, 32, 33, 34, 35, 36 T12N R15E 25, 26, 27, 28, 29, 30 ,31 ,32, 33, 34, 35, 36 Rule 1 Pool Definition The Prudhoe Oil Pool is defined as (i) the accumulations of oil that are common to and that correlate with the accumulations found in the Atlantic Richfield - Humble Prudhoe Bay State No. I well between the depths of 8,110 feet and 8,680 feet, and (ii) the accumulation of oil that is common to and correlates with the interval from 9,638 to 9,719 measured feet on the Borehole Compensated Sonic Log, Run 2, Dated September 28, 1975, in the Atlantic Richfield -Exxon NGI No. 1 well, and that is in hydraulic communication with the gas cap of the former accumulations in the Sag River Formation. The latter accumulation is found within the following area: Tl IN R14E: Sections: 1, 2, 11(N/2 and SE/4), 12, 13, 14(E/2), 23(NE/4), 24, 25(N/2) TI IN RISE: Sections: 6, 7, 8, 17, 18, 19, 20, 29(N/2), 30(N/2) T12N R14E: Sections 35, 36 Umiat Meridian. Rule 2 Well Soacine There shall be no restrictions as to well spacing except that no pay shall be opened in a well closer than 500 feet to the boundary of the affected area. Conservation Order 341G February 12, 2019 Page 5 of 10 Rule 3 Casine and Cementing Requirements (a) Conductor casing shall be set at least 75 feet below the surface and sufficient cement shall be used to fill the annulus behind the pipe to the surface. Rigid high- density polyurethane foam may be used as an alternative to cement, upon approval by the AOGCC. The AOGCC may also administratively approve other sealing materials upon application and presentation of data which show the alternate is appropriate based on accepted engineering principles. (b) Surface casing to provide proper anchorage for equipment, to prevent uncontrolled flow, to withstand anticipated internal pressure, and to protect the well from the effects of permafrost thaw -subsidence or freeze -back loading shall be set at least 500 feet, measured depth, below the base of the permafrost but not below 5000 feet true vertical depth. Sufficient cement shall be used to fill the annulus behind the casing to the surface. The surface casing shall have minimum axial strain properties of 0.5% in tension and 0.7% in compression. (c) Alternate casing programs may be administratively approved by the AOGCC upon application and presentation of data, which show the alternatives, are appropriate and based upon accepted engineering principles. Rule 4 Blowout Prevention Equipment and Practice (Revoked C.O.341D Rule 5 Automatic Shut-in Equipment (Revoked Other Order 66) Rule 6 Pressure Surveys (Revised: CO 341F.002 and CO 341F.007) (a)An Annual Pressure Surveillance Plan shall be submitted to the AOGCC in conjunction with the Annual Prudhoe Pool Reservoir Surveillance Report by April 1 of each year. This plan will contain the number and approximate location of pressure surveys anticipated for the next calendar year, and it will be subject to approval by the AOGCC by May 1 of that year. These surveys are needed to effectively monitor reservoir pressure within the Prudhoe Oil Pool. A minimum of 5% of the total pressure surveys acquired each year shall be from each of the following development areas: Gas Cap, Gravity Drainage, Flow Station 2 Water/MI Flood (MWAG) Project, Eastern Peripheral Wedge Zone MWAG Project, Western Peripheral Wedge Zone MWAG Project, Eileen West End Waterflood Project, and the Northwest Fault Block MWAG Project. (b) Data from the surveys required in (a) of this rule shall be submitted with the Annual Prudhoe Oil Pool Reservoir Surveillance Report by April 1 of each year. Data submitted shall include rate, pressure, time depths, temperature, and any well condition necessary for the complete analysis of each survey. The datum for the pressure surveys is 8800 true vertical feet subsea. Transient pressure surveys obtained by a shut-in buildup test, an injection well pressure fall-off test, a multi - rate test, or an interference test are acceptable. Calculation of bottom -hole pressures from surface data will be permitted for water injection wells. Other quantitative methods may be administratively approved by the AOGCC. (c)Results and data from any special reservoir pressure monitoring techniques, tests, or surveys shall also be submitted as prescribed in (b) of this rule. Conservation Order 341 G February 12, 2019 Page 6 of 10 Rule 7 Gas -Oil Contact Monitoring (Revised: CO 341F.002 and CO 341F.007) (a)An Annual GOC Monitoring Surveillance Plan shall be submitted to the AOGCC in conjunction with the Annual Prudhoe Reservoir Surveillance Report by April 1 of each year. This plan will contain the number and approximate locations of neutron log surveys anticipated for the next calendar year and be subject to approval by the AOGCC by May 1 of that same year. The neutron logs obtained shall be distributed across Gas Cap, Gravity Drainage, Gravity Drainage Waterflood Interaction, and downdip areas affected by gas and conducted using good engineering practice. (b) The neutron logs run on any well shall be filed with the AOGCC by the last day of the month following the month in which the logs were run. Rule 8 Productivity Profiles (Revised: CO 341F.007) A complete copy of any spinner flow meter or tracer surveys obtained on wells, together with the data and results from the surveys, shall be recorded and filed with the AOGCC by the last day of the month following the month in which a survey is finalized. Rule 9 Pool Off -Take Rates (Revised this order) The maximum annual average oil offtake rate is 1.5 million barrels per day plus condensate production. The maximum annual average gas offtake rate is 3.6 billion standard cubic feet per day, which contemplates an annual average rate of 2.7 billion standard cubic feet per day shipped to the proposed AK LNG GTP and additional capacity to account for production upsets at other fields that feed the proposed AK LNG GTP. Daily offtake rates in excess of these amounts are permitted only as required to sustain these annual average rates. The annual average offtake rates as specified shall not be exceeded without the prior written approval of the AOGCC. Annual average offtake rates mean the daily average rate calculated by dividing the total volume produced in a calendar year by the number of days in that year. However, in the first calendar year that large gas offtake rates are initiated, following the completion of a large gas sales pipeline, the annual average offtake rate for gas shall be determined by dividing the total volume of gas produced in the calendar year by the number of days remaining in the year following initial delivery to the large gas sales pipeline. Rule 10 Facility Gas Flaring (Revoked CO 341C) Rule 11 Annual Surveillance Reporting An annual Prudhoe Oil Pool surveillance report will be required by April 1 of each year. The report shall include but is not limited to the following: 1. Progress of enhanced recovery project(s) implementation and reservoir management summary including engineering and geotechnical parameters. 2. Voidage balance by month of produced fluids, oil, water and gas, and injected fluids, gas, water, low molecular weight hydrocarbons, and any other injected substances (which can be filed in lieu of monthly Forms 10-413 for each EOR project). 3. Analysis of reservoir pressure surveys within the field. 4. Results and where appropriate, analysis of production logging surveys, tracer surveys and observation well surveys. Conservation Order 341 G February 12, 2019 Page 7 of 10 5. Results of gas movement and gas -oil contact surveillance efforts including a summary of wells surveyed and analysis of gas movement within the reservoir. The analysis shall include map(s) and/or tables showing the locations of various documented gas movement mechanisms as appropriate. 6. Progress of the Gas Cap Water Injection project with surveillance observations including; (a) volume of water injected, (b) reservoir pressure results, maps, and analysis (in conjunction with (3.) of this rule), (c) water movement and zonal conformance maps derived from surveillance (such as Pulsed Neutron Logs and 4-D gravity surveys) (d) results of reservoir evaluations of performance (such as material balance and reservoir simulation studies), (e) surveillance plans for the upcoming year, and (f) any plans for change in project operation. Rule 12 Prudhoe Bay Miscible Gas Proiect (PBMGP) (a) Expansion of the PBMGP and infill expansion of miscible gas injection in the NWFB is approved for the 59,740 acre portion of the Prudhoe Oil Pool defined in the record. (b) An annual report must be submitted to the AOGCC detailing performance of the PBMGP and outlining compositional information for the current miscible injectant (MI) necessary to maintain miscibility under anticipated reservoir conditions. (c) The minimum miscibility pressure (MMP) of the Miscible Injectant must be maintained at least 100 psi below the average reservoir pressure in the Prudhoe Bay Miscible Project area. When the Operator demonstrates that the reservoir pressure is no longer declining within the Prudhoe Bay Miscible Project Area (as evidenced by reservoir pressure measurements), the MMP may be maintained at or below the average reservoir pressure in the Prudhoe Bay Miscible Project area. Rule 13 Waiver of GOR Limitation (Revised: CO 341F.007) (a) The AOGCC waives the requirements of 20 AAC 25.240(b) for all oil wells in the Prudhoe Oil Pool of the Prudhoe Bay Field so long as the gas from the wells is being returned to the pool, or so long as the additional recovery project is in operation. (b) For the Prudhoe Oil Pool "oil well" means a well that produces oil at a gas -oil ratio of 200,000 scf/stb or lower. Rule 14 Waiver of "Application for Sundry Approval' Requirement for Workover Operations The requirements of 20 AAC 25.280(a) are waived for development wells in the Prudhoe Oil Pool of the Prudhoe Bay Field. Sundry work application and reporting requirements shall be done in accordance with the "Well Work Operations and Sundry Notice/Reporting Requirements for Pools Subject to Sundry Waiver Rules" matrix maintained by the AOGCC Rule 15 Waterfloodine The AOGCC approves the December 1980 additional recovery application for water -flooding in the Prudhoe Oil Pool subject to the requirements listed in Rule 11 above. Conservation Order 341G February 12, 2019 Page 8 of 10 Any proposed changes must be submitted to the AOGCC for approval. Rule 16 Orders Revoked (Revised this Order) The following Conservation Orders and associated Administrative Approvals and letter approvals are hereby superseded. Conservation orders 78, 8313, 85, 87, 88, 96, 97, 9813, 117,117A, 118, 130, 137, 138, 139, 140, 141, 143, 145,145A, 148, 155, 160, 164, 165, 166, 167, 169, 174, 178, 180, 181, 183, 184, 185, 186, 188, 189, 192, 194, 195, 195. 1, 195.2, 195.4, 197, 199, 200, 204, 208, 213, 214, 219, 220, 223, 224, 238, 258, 259, 279, 290 and 333, and March 20, 1981 and August 22, 1986 letter approvals. Additionally, conservation orders 341, 341A, 341 B, 341C, 341D, 341E, and 341F and all associated administrative approvals (except CO 341D.00I and CO 341E.003, which remain in effect) are hereby superseded. The hearing records of these orders are made part of the record for this order. Rule 17 Gas Cap Water Iniections The Gas Cap Water Injection Project as described in the operator's application and testimony is approved. Ongoing reservoir surveillance is required to determine that water movement within the reservoir is confined as intended and does not negatively impact overall hydrocarbon recovery, and to determine that the project has resulted in stabilization of reservoir pressure. Rule 18 Comminelin¢ of Production in the Same Wellhore (Revised: CO 341F.001 and this order) (a) Commingling production from the Aurora Oil Pool in Well S-26 or Put River Oil Pool with the Prudhoe Oil Pool is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: Prior to commingling production a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Aurora or Put River Oil Pool (in isolation from the Prudhoe Oil Pool). ii. For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling and analysis must occur at least twice per year and not less frequently than once every seven months. iii. A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. Conservation Order 341 G February 12, 2019 Page 9 of 10 iv. The operator shall submit a review of pool production allocation factors and issues over the prior year with the annual reservoir surveillance report and retain electronic file(s) containing daily allocation data and daily test data for a minimum of five years. V. The volumes reported on Form 10-405—Le., in accordance with 20 AAC 25.230(b)—must identify commingled production allocated to the Aurora Oil Pool or Put River Oil Pool and the Prudhoe Oil Pool. vi. A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Aurora or put River and the Prudhoe Oil Pools, along with the analyses of the geochemical tests, production logs, and regular well tests. (b) A commingled well that is shut in for more than six months shall have the Put River and Prudhoe Oil Pools mechanically isolated to prevent crossflow between the pools. Rule 19 CO2 Utilization Study By December 31, 2020, the WIOs shall complete a study and submit a report to the AOGCC detailing the best use of the effluent gas stream projected to come from the AK LNG GTP to maximize total hydrocarbon recovery. The study and report shall evaluate the suitability of using CO2 for enhanced recovery purposes in the oil pools on the North Slope in which any of the four main WIOs (BPXA, ExxonMobil, CPAI, or Chevron) have an ownership interest. The study and report shall look at the benefits to using CO2, and mixtures containing CO2, for enhanced recovery purposes (including miscible injection, viscosity reducing, and pressure maintenance type projects as appropriate) and include estimates of additional recovery that would be attributable to CO2 injection. The report shall also evaluate challenges to implementing CO2 injection in these pools. Rule 20 Liquid Hydrocarbon Recovery Maximization Report By June 30, 2021, the WIOs shall submit a report to the AOGCC that provides detailed information about the results of projects and operations undertaken from the effective date of this order through December 31, 2020, as well as information about projects underway or planned at that time to accelerate liquid hydrocarbon production to maximize recovery in advance of the proposed major gas sales associated with the AK LNG project. Rule 21 Administrative Relief Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the AOGCC may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. Conservation Order 3410 February 12, 2019 Page 10 of 10 DONE at Anchorage, Alaska nunc pro tunc December 13, 2018, dated February 12, 2019. ��,OILAN� //signature on file// //signature on file// Hollis S. French Daniel T. Seamount, Jr. Chair, Commissioner Commissioner J, 'IT1pN �U' Because this order is entered on reconsideration, this order is the FINAL order or decision of the AOGCC, and may be appealed to superior court. Any appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, this order. 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 Bernie Karl K&K Recycling Inc. Gordon Severson Penny Vadla P.O. Box 58055 3201 Westmar Cir. 399 W. Riverview Ave. Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 71 Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF BP ) Conservation Order No, 341G EXPLORATION (ALASKA) INC. ) Docket Number: CO -18-016 for an order to allow pool wide ) downhole commingling between the ) Prudhoe Bay Field Put River and Prudhoe Oil Pools ) Prudhoe Oil Pool December 13, 2018 IT APPEARING THAT: 1. By letter dated June 22, 2018, BP Exploration (Alaska), Inc. (BPXA), operator of the Prudhoe Bay Unit, applied for amendments to Conservation Orders (CO) 341F and 559 to allow commingled downhole production for wells completed in the Put River and Prudhoe Oil Pools. 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) scheduled a public hearing for August 6, 2018. On June 27, 2018, the AOGCC published notice of that hearing on the State of Alaska's Online Public Notice website, 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 June 28, 2018, the notice was published in the Anchorage Daily News. 3. The AOGCC held a public hearing on this application on August 6, 2018, at the AOGCC offices at 333 West 7'h Avenue, Suite 100, Anchorage, Alaska 99501. 4. The AOGCC received no protests to or comments on BPXA's application. FINDINGS: 1. Prudhoe Oil Pool The Prudhoe Oil Pool (POP), in production since 1977, consists of a massive oil rim overlain by a massive gas cap. The POP has numerous enhanced recovery projects occurring in the various parts of the field. Generally speaking POP wells are very productive due to the high-quality reservoir rocks encountered in the pool. 2. Put River Oil Pool The Put River Oil Pool (PROP), (described in CO 559), overlies the POP and is comprised of three lobes (Central, Southern, and Western) of the Put River Sandstone. A fourth lobe, the Northern Lobe, is in hydraulic communication with the POP and is included as part of the POP. The Southern Lobe has been on somewhat regular oil production since 1999 with an active waterflood. Appraisal activities conducted in 2005 identified the presence of oil and gas condensate in the Western and Central Lobes respectively but further development was not pursued at that time in part due to low flowrates that resulted in operational challenges associated with hydrate deposition. 3. Potential for Commingling Several wells penetrate the PROP and the POP and would be candidates for downhole Conservation Order 341 G December 13, 2018 Page 3 of 10 commingling. Commingling of production in these wellbores should allow for increased flowrates and flow velocity in the tubing and reduce the potential for hydrates deposition that is a problem for production from wells completed solely in the PROP. Since standalone production of the Central and Western Lobes is not viable due to hydrate deposition those reserves are essentially trapped. Commingling of production with the POP will allow these resources to be recovered. 4. Potential for Crossflow There is potential of crossflow between the POP and the PROP if a commingled well is shut in. For a short duration shut in period the crossflow is not expected to be significant. In the event of a longer duration shut in period the PROP and POP could be mechanically isolated downhole to prevent crossflow. Production Allocation Downhole fluid samples will be collected from each pool for the purposes of geochemical analysis. During the first six months of commingled production a production log, or differential well test, will be run on the well and a geochemical analysis performed to verify the accuracy of geochemical analysis for production allocation purposes. Semi-annual geochemical analysis will be conducted for production allocation purposes and production logs or differential well tests will be run as needed to assess production anomalies. 6. Reservoir Surveillance Bottomhole pressure surveys for the POP would only be conducted in wells that are not commingled with the PROP. Bottomhole pressure surveys for the PROP can be obtained by setting a plug to separate the POP and PROP. CONCLUSIONS: 1. Downhole commingling of production between the PROP and POP should allow for improved resource recovery from the Prudhoe Bay Unit by allowing for the development of resources within the PROP that would not be recoverable as a standalone development. 2. Production allocation via geochemical analysis in wells commingled downhole has proven to provide adequate results for production allocation purposes elsewhere in the field. 3. Proper reservoir surveillance and monitoring can be accomplished by setting downhole plugs to isolate the PROP and POP so that reservoir pressures in the PROP can be obtained. There's a significant number of wells in the area that penetrate only the POP so losing the ability to obtained reservoir pressures in the POP in the commingled wells will not impact reservoir surveillance or monitoring. 4. In the event of a prolonged period of shut in for a commingled well the PROP and POP can be mechanically isolated downhole to prevent crossflow between the reservoirs. NOW, THEREFORE, IT IS ORDERED THAT: The following rules, in addition to the statewide requirements under 20 AAC 25 (to the extent not superseded by these rules), govern development in the affected area described below: Conservation Order 341 G December 13, 2018 Page 4 of 10 Affected Area: Umiat Meridian Tavm* RaV Saban TION R12E -KI 1, 2, 3, 4, 10, I1, 12 T10N 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 24 TION --TION R14E 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 36 R15E all T10N. R16E 5, 6, 7, 8, 17, 18, 19, 20, 29, 30, 31 T11N R11E 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 15, 24, 25 T11N R12E all T11N 63E all T11N R14E all T11N R15E all T11N R16E 17, 18, 19, 30, 31, 32 T12N R10E 13, 24, T12N 61E 15, 16, 17, 18, 19, 20, 21, 22, 25, 26, 27, 28, 29, 30, 32, 33, 34, 35, 36 T12N R12E 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36 T12N R13E 19, 20, 21, 22, 23, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36 T12N R14E 25, 26, 27, 28, 29, 31, 32, 33, 34, 35, 36 T12N R15E 25, 26, 27, 28, 29, 30 ,31 ,32, 33, 34, 35, 36 Rule 1 Pool Definition The Prudhoe Oil Pool is defined as (i) the accumulations of oil that are common to and that correlate with the accumulations found in the Atlantic Richfield - Humble Prudhoe Bay State No. 1 well between the depths of 8,110 feet and 8,680 feet, and (ii) the accumulation of oil that is common to and correlates with the interval from 9,638 to 9,719 measured feet on the Borehole Compensated Sonic Log, Run 2, Dated September 28, 1975, in the Atlantic Richfield -Exxon NGI No. 1 well, and that is in hydraulic communication with the gas cap of the former accumulations in the Sag River Formation. The latter accumulation is found within the following area: TI IN R14E: Sections: 1, 2, 11(N/2 and SE/4), 12, 13, 14(E/2), 23(NE/4), 24, 25(N/2) T11N R15E: Sections: 6, 7, 8, 17, 18, 19, 20, 29(N/2), 30(N/2) T12N R14E: Sections 35, 36 Umiat Meridian. Rule 2 Well Soacina There shall be no restrictions as to well spacing except that no pay shall be opened in a well closer than 500 feet to the boundary of the affected area. Conservation Order 341G December 13, 2018 Page 5 of 10 Rule 3 Casing and Cementing Requirements (a) Conductor casing shall be set at least 75 feet below the surface and sufficient cement shall be used to fill the annulus behind the pipe to the surface. Rigid high- density polyurethane foam may be used as an alternative to cement, upon approval by the AOGCC. The AOGCC may also administratively approve other sealing materials upon application and presentation of data which show the alternate is appropriate based on accepted engineering principles. (b) Surface casing to provide proper anchorage for equipment, to prevent uncontrolled flow, to withstand anticipated internal pressure, and to protect the well from the effects of permafrost thaw -subsidence or freeze -back loading shall be set at least 500 feet, measured depth, below the base of the permafrost but not below 5000 feet true vertical depth. Sufficient cement shall be used to fill the annulus behind the casing to the surface. The surface casing shall have minimum axial strain properties of 0.5% in tension and 0.7% in compression. (c) Alternate casing programs may be administratively approved by the AOGCC upon application and presentation of data, which show the alternatives, are appropriate and based upon accepted engineering principles. Rule 4 Blowout Prevention Equipment and Practice (Revoked C.O.341D Rule 5 Automatic Shut-in Equipment (Revoked Other Order 661 Rule 6 Pressure Surveys (Revised: CO 341F.002 and CO 341F.007) (a)An Annual Pressure Surveillance Plan shall be submitted to the AOGCC in conjunction with the Annual Prudhoe Pool Reservoir Surveillance Report by April 1 of each year. This plan will contain the number and approximate location of pressure surveys anticipated for the next calendar year, and it will be subject to approval by the AOGCC by May 1 of that year. These surveys are needed to effectively monitor reservoir pressure within the Prudhoe Oil Pool. A minimum of 5% of the total pressure surveys acquired each year shall be from each of the following development areas: Gas Cap, Gravity Drainage, Flow Station 2 Water/Ml Flood (MWAG) Project, Eastern Peripheral Wedge Zone MWAG Project, Western Peripheral Wedge Zone MWAG Project, Eileen West End Waterflood Project, and the Northwest Fault Block MWAG Project. (b) Data from the surveys required in (a) of this rule shall be submitted with the Annual Prudhoe Oil Pool Reservoir Surveillance Report by April 1 of each year. Data submitted shall include rate, pressure, time depths, temperature, and any well condition necessary for the complete analysis of each survey. The datum for the pressure surveys is 8800 true vertical feet subsea. Transient pressure surveys obtained by a shut-in buildup test, an injection well pressure fall-off test, a multi - rate test, or an interference test are acceptable. Calculation of bottom -hole pressures from surface data will be permitted for water injection wells. Other quantitative methods may be administratively approved by the AOGCC. (c)Results and data from any special reservoir pressure monitoring techniques, tests, or surveys shall also be submitted as prescribed in (b) of this rule. Conservation Order 341 G December 13, 2018 Page 6 of 10 Rule 7 Gas -Oil Contact Monitoring (Revised: CO 341F.002 and CO 341F.007) (a)An Annual GOC Monitoring Surveillance Plan shall be submitted to the AOGCC in conjunction with the Annual Prudhoe Reservoir Surveillance Report by April 1 of each year. This plan will contain the number and approximate locations of neutron log surveys anticipated for the next calendar year and be subject to approval by the AOGCC by May 1 of that same year. The neutron logs obtained shall be distributed across Gas Cap, Gravity Drainage, Gravity Drainage Waterflood Interaction, and downdip areas affected by gas and conducted using good engineering practice. (b) The neutron logs run on any well shall be filed with the AOGCC by the last day of the month following the month in which the logs were run. Rule 8 Productivitv Profiles (Revised: CO 341F.007 A complete copy of any spinner flow meter or tracer surveys obtained on wells, together with the data and results from the surveys, shall be recorded and filed with the AOGCC by the last day of the month following the month in which a survey is finalized. Rule 9 Pool Off -Take Rates (Revised this order) The maximum annual average oil offtake rate is 1.5 million barrels per day plus condensate production. The maximum annual average gas offtake rate is 3.6 billion standard cubic feet per day, which contemplates an annual average rate of 2.7 billion standard cubic feet per day shipped to the proposed AK LNG GTP and additional capacity to account for production upsets at other fields that feed the proposed AK LNG GTP. Daily offtake rates in excess of these amounts are permitted only as required to sustain these annual average rates. The annual average offtake rates as specified shall not be exceeded without the prior written approval of the AOGCC. Annual average offtake rates mean the daily average rate calculated by dividing the total volume produced in a calendar year by the number of days in that year. However, in the first calendar year that large gas offtake rates are initiated, following the completion of a large gas sales pipeline, the annual average offtake rate for gas shall be determined by dividing the total volume of gas produced in the calendar year by the number of days remaining in the year following initial delivery to the large gas sales pipeline. Rule 10 Facility Gas Flaring (Revoked CO 341C) Rule 11 Annual Surveillance Reporting An annual Prudhoe Oil Pool surveillance report will be required by April 1 of each year. The report shall include but is not limited to the following: 1. Progress of enhanced recovery project(s) implementation and reservoir management summary including engineering and geotechnical parameters. 2. Voidage balance by month of produced fluids, oil, water and gas, and injected fluids, gas, water, low molecular weight hydrocarbons, and any other injected substances (which can be filed in lieu of monthly Forms 10-413 for each EOR project). 3. Analysis of reservoir pressure surveys within the field. 4. Results and where appropriate, analysis of production logging surveys, tracer surveys and observation well surveys. Conservation Order 341 G December 13, 2018 Page 7 of 10 5. Results of gas movement and gas -oil contact surveillance efforts including a summary of wells surveyed and analysis of gas movement within the reservoir. The analysis shall include map(s) and/or tables showing the locations of various documented gas movement mechanisms as appropriate. 6. Progress of the Gas Cap Water Injection project with surveillance observations including; (a) volume of water injected, (b) reservoir pressure results, maps, and analysis (in conjunction with (3.) of this rule), (c) water movement and zonal conformance maps derived from surveillance (such as Pulsed Neutron Logs and 4-D gravity surveys) (d) results of reservoir evaluations of performance (such as material balance and reservoir simulation studies), (e) surveillance plans for the upcoming year, and (f) any plans for change in project operation. Rule 12 Prudhoe Bay Miscible Gas Proiect (PBMGP) (a) Expansion of the PBMGP and infill expansion of miscible gas injection in the NWFB is approved for the 59,740 acre portion of the Prudhoe Oil Pool defined in the record. (b) An annual report must be submitted to the AOGCC detailing performance of the PBMGP and outlining compositional information for the current miscible injectant (MI) necessary to maintain miscibility under anticipated reservoir conditions. (c) The minimum miscibility pressure (MMP) of the Miscible Injectant must be maintained at least 100 psi below the average reservoir pressure in the Prudhoe Bay Miscible Project area. When the Operator demonstrates that the reservoir pressure is no longer declining within the Prudhoe Bay Miscible Project Area (as evidenced by reservoir pressure measurements), the MMP may be maintained at or below the average reservoir pressure in the Prudhoe Bay Miscible Project area. Rule 13 Waiver of GOR Limitation (Revised: CO 341F.007) (a) The AOGCC waives the requirements of 20 AAC 25.240(b) for all oil wells in the Prudhoe Oil Pool of the Prudhoe Bay Field so long as the gas from the wells is being returned to the pool, or so long as the additional recovery project is in operation. (b) For the Prudhoe Oil Pool "oil well' means a well that produces oil at a gas -oil ratio of 200,000 scf/stb or lower. Rule 14 Waiver of "Application for Sundry Approval" Reauirement for Workover Operations The requirements of 20 AAC 25.280(a) are waived for development wells in the Prudhoe Oil Pool of the Prudhoe Bay Field. Sundry work application and reporting requirements shall be done in accordance with the "Well Work Operations and Sundry Notice/Reporting Requirements for Pools Subject to Sundry Waiver Rules" matrix maintained by the AOGCC Rule 15 WaterfloodinQ The AOGCC approves the December 1980 additional recovery application for water -flooding in the Prudhoe Oil Pool subject to the requirements listed in Rule 11 above. Conservation Order 341G December 13, 2018 Page 8 of 10 Any proposed changes must be submitted to the AOGCC for approval. Rule 16 Orders Revoked (Revised this Order) The following Conservation Orders and associated Administrative Approvals and letter approvals are hereby superseded. Conservation orders 78, 83B, 85, 87, 88, 96, 97, 9813, 117,117A, 118, 130, 137, 138, 139, 140, 141, 143, 145, 145A, 148, 155, 160, 164, 165, 166, 167, 169, 174, 178, 180, 181, 183, 184, 185, 186, 188, 189, 192, 194, 195, 195.1, 195.2, 195.4, 197, 199, 200, 204, 208, 213, 214, 219, 220, 223, 224, 238, 258, 259, 279, 290 and 333, and March 20, 1981 and August 22, 1986 letter approvals. Additionally, conservation orders 341, 341A, 34113, 341C, 341D, 341E, and 341F and all associated administrative approvals (except CO 341D.001 and CO 341E.003, which remain in effect) are hereby superseded. The hearing records of these orders are made part of the record for this order. Rule 17 Gas Cao Water Infections The Gas Cap Water Injection Project as described in the operator's application and testimony is approved. Ongoing reservoir surveillance is required to determine that water movement within the reservoir is confined as intended and does not negatively impact overall hydrocarbon recovery, and to determine that the project has resulted in stabilization of reservoir pressure. Rule 18 Commingling of Production in the Same Wellbore (Revised: CO 341F.001 and this order) (a) Commingling production from the Aurora Oil Pool in Well S-26 or Put River Oil Pool with the Prudhoe Oil Pool is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: i. Prior to commingling production a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Aurora or Put River Oil Pool (in isolation from the Prudhoe Oil Pool). ii. For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling and analysis must occur at least twice per year and not less frequently than once every seven months. iii. A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. Conservation Order 341 G December 13, 2018 Page 9 of 10 iv. The operator shall submit a review of pool production allocation factors and issues over the prior year with the annual reservoir surveillance report and retain electronic file(s) containing daily allocation data and daily test data for a minimum of five years. V. The volumes reported on Form 10-405—i.e., in accordance with 20 AAC 25.230(b)—must identify commingled production allocated to the Aurora Oil Pool or Put River Oil Pool and the Prudhoe Oil Pool. vi. A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Aurora or put River and the Prudhoe Oil Pools, along with the analyses of the geochemical tests, production logs, and regular well tests. (b) A commingled well that is shut in for more than three months shall have the Put River and Prudhoe Oil Pools mechanically isolated to prevent crossflow between the pools. Rule 19 CO2 Utilization Studv By December 31, 2020, the WIOs shall complete a study and submit a report to the AOGCC detailing the best use of the effluent gas stream projected to come from the AK LNG GTP to maximize total hydrocarbon recovery. The study and report shall evaluate the suitability of using CO2 for enhanced recovery purposes in the oil pools on the North Slope in which any of the four main WIOs (BPXA, ExxonMobil, CPAI, or Chevron) have an ownership interest. The study and report shall look at the benefits to using CO2, and mixtures containing CO2, for enhanced recovery purposes (including miscible injection, viscosity reducing, and pressure maintenance type projects as appropriate) and include estimates of additional recovery that would be attributable to CO2 injection. The report shall also evaluate challenges to implementing CO2 injection in these pools. Rule 20 Liouid Hvdrocarbon Recovery Maximization Report By June 30, 2021, the W10s shall submit a report to the AOGCC that provides detailed information about the results of projects and operations undertaken from the effective date of this order through December 31, 2020, as well as information about projects underway or planned at that time to accelerate liquid hydrocarbon production to maximize recovery in advance of the proposed major gas sales associated with the AK LNG project. Rule 21 Administrative Relief Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the AOGCC may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. Conservation Order 341G December 13, 2018 Page 10 of 10 DONE at Anchorage, Alaska and dated December 13, 2018. Hollis S. French Chair, Commissioner Daniel T. Seamount, Jr. Commissioner 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 corm. 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 m 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 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF BP ) Conservation Order No. 341G EXPLORATION (ALASKA) INC. ) Docket Number: CO -18-016 for an order to allow pool wide ) downhole commingling between the ) Prudhoe Bay Field Put River and Prudhoe Oil Pools ) Prudhoe Oil Pool December 13, 2018 IT APPEARING THAT: 1. By letter dated June 22, 2018, BP Exploration (Alaska), Inc. (BPXA), operator of the Prudhoe Bay Unit, applied for amendments to Conservation Orders (CO) 341F and 559 to allow commingled downhole production for wells completed in the Put River and Prudhoe Oil Pools. 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) scheduled a public hearing for August 6, 2018. On June 27, 2018, the AOGCC published notice of that hearing on the State of Alaska's Online Public Notice website, 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 June 28, 2018, the notice was published in the Anchorage Daily News. 3. The AOGCC held a public hearing on this application on August 6, 2018, at the AOGCC offices at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. 4. The AOGCC received no protests to or comments on BPXA's application. FINDINGS: 1. Prudhoe Oil Pool The Prudhoe Oil Pool (POP), in production since 1977, consists of a massive oil rim overlain by a massive gas cap. The POP has numerous enhanced recovery projects occurring in the various parts of the field. Generally speaking POP wells are very productive due to the high-quality reservoir rocks encountered in the pool. Put River Oil Pool The Put River Oil Pool (PROP), (described in CO 559), overlies the POP and is comprised of three lobes (Central, Southern, and Western) of the Put River Sandstone. A fourth lobe, the Northern Lobe, is in hydraulic communication with the POP and is included as part of the POP. The Southern Lobe has been on somewhat regular oil production since 1999 with an active waterflood. Appraisal activities conducted in 2005 identified the presence of oil and gas condensate in the Western and Central Lobes respectively but further development was not pursued at that time in part due to low flowrates that resulted in operational challenges associated with hydrate deposition. 3. Potential for Commineline Several wells penetrate the PROP and the POP and would be candidates for downhole Conservation Order 341 G December 13, 2018 Page 3 of 10 commingling. Commingling of production in these wellbores should allow for increased flowrates and flow velocity in the tubing and reduce the potential for hydrates deposition that is a problem for production from wells completed solely in the PROP. Since standalone production of the Central and Western Lobes is not viable due to hydrate deposition those reserves are essentially trapped. Commingling of production with the POP will allow these resources to be recovered. 4. Potential for Crossflow There is potential of crossflow between the POP and the PROP if a commingled well is shut in. For a short duration shut in period the crossflow is not expected to be significant. In the event of a longer duration shut in period the PROP and POP could be mechanically isolated downhole to prevent crossflow. 5. Production Allocation Downhole fluid samples will be collected from each pool for the purposes of geochemical analysis. During the first six months of commingled production a production log, or differential well test, will be run on the well and a geochemical analysis performed to verify the accuracy of geochemical analysis for production allocation purposes. Semi-annual geochemical analysis will be conducted for production allocation purposes and production logs or differential well tests will be run as needed to assess production anomalies. 6. Reservoir Surveillance Bottomhole pressure surveys for the POP would only be conducted in wells that are not commingled with the PROP. Bottomhole pressure surveys for the PROP can be obtained by setting a plug to separate the POP and PROP. CONCLUSIONS: 1. Downhole commingling of production between the PROP and POP should allow for improved resource recovery from the Prudhoe Bay Unit by allowing for the development of resources within the PROP that would not be recoverable as a standalone development. 2. Production allocation via geochemical analysis in wells commingled downhole has proven to provide adequate results for production allocation purposes elsewhere in the field. 3. Proper reservoir surveillance and monitoring can be accomplished by setting downhole plugs to isolate the PROP and POP so that reservoir pressures in the PROP can be obtained. There's a significant number of wells in the area that penetrate only the POP so losing the ability to obtained reservoir pressures in the POP in the commingled wells will not impact reservoir surveillance or monitoring. 4. In the event of a prolonged period of shut in for a commingled well the PROP and POP can be mechanically isolated downhole to prevent crossflow between the reservoirs. NOW, THEREFORE, IT IS ORDERED THAT: The following rules, in addition to the statewide requirements under 20 AAC 25 (to the extent not superseded by these rules), govern development in the affected area described below: Conservation Order 341 G December 13, 2018 Page 4 of 10 Affected Area: Umiat Meridian Towtd>ip FAW Section T10N __T1 -ON R12E 1, 2, 3, 4, 10, 11, 12 R13E 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 24 TION R14E 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 36 T10N R15E all TION.R16E 5, 6, 7, 8, 17, 18, 19, 20, 29, 30, 31 T11N RIIE 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 15, 24, 25 T11N R12E all T1IN R13E all T11N R14E all T11N R15E __R_1 _6E all TI IN 17, 18, 19, 30, 31, 32 T12N R10E 13, 24, T12N R11E 15, 16, 17, 18, 19, 20, 21, 22, 25, 26, 27, 28, 29, 30, 32, 33, 34, 35, 36 T12N R12E 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36 T12N R13E 19, 20, 21, 22, 23, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36 T12N R14E 25, 26, 27, 28, 29, 31, 32, 33, 34, 35, 36 T12N R15E 25, 26, 27, 28, 29, 30 ,31 ,32, 33, 34, 35, 36 Rule 1 Pool Definition The Prudhoe Oil Pool is defined as (i) the accumulations of oil that are common to and that correlate with the accumulations found in the Atlantic Richfield - Humble Prudhoe Bay State No. 1 well between the depths of 8,110 feet and 8,680 feet, and (ii) the accumulation of oil that is common to and correlates with the interval from 9,638 to 9,719 measured feet on the Borehole Compensated Sonic Log, Run 2, Dated September 28, 1975, in the Atlantic Richfield -Exxon NGI No. 1 well, and that is in hydraulic communication with the gas cap of the former accumulations in the Sag River Formation. The latter accumulation is found within the following area: Tl IN R14E: Sections: 1, 2, 1 I(N/2 and SE/4), 12, 13, 14(E/2), 23(NE/4), 24, 25(N/2) TI IN R15E: Sections: 6, 7, 8, 17, 18, 19, 20, 29(N/2), 30(N/2) T12N R14E: Sections 35, 36 Umiat Meridian. Rule 2 Well Spacing There shall be no restrictions as to well spacing except that no pay shall be opened in a well closer than 500 feet to the boundary of the affected area. Conservation Order 341 G December 13, 2018 Page 5 of 10 Rule 3 Casine and Cementin¢ Requirements (a) Conductor casing shall be set at least 75 feet below the surface and sufficient cement shall be used to fill the annulus behind the pipe to the surface. Rigid high- density polyurethane foam may be used as an alternative to cement, upon approval by the AOGCC. The AOGCC may also administratively approve other sealing materials upon application and presentation of data which show the alternate is appropriate based on accepted engineering principles. (b) Surface casing to provide proper anchorage for equipment, to prevent uncontrolled flow, to withstand anticipated internal pressure, and to protect the well from the effects of permafrost thaw -subsidence or freeze -back loading shall be set at least 500 feet, measured depth, below the base of the permafrost but not below 5000 feet true vertical depth. Sufficient cement shall be used to fill the annulus behind the casing to the surface. The surface casing shall have minimum axial strain properties of 0.5% in tension and 0.7% in compression. (c) Alternate casing programs may be administratively approved by the AOGCC upon application and presentation of data, which show the alternatives, are appropriate and based upon accepted engineering principles. Rule 4 Blowout Prevention Eauiument and Practice (Revoked C O 341D Rule 5 Automatic Shut-in Eauiument (Revoked Other Order 66) Rule 6 Pressure Surveys (Revised: CO 341F.002 and CO 341F.007) (a)An Annual Pressure Surveillance Plan shall be submitted to the AOGCC in conjunction with the Annual Prudhoe Pool Reservoir Surveillance Report by April 1 of each year. This plan will contain the number and approximate location of pressure surveys anticipated for the next calendar year, and it will be subject to approval by the AOGCC by May 1 of that year. These surveys are needed to effectively monitor reservoir pressure within the Prudhoe Oil Pool. A minimum of 5% of the total pressure surveys acquired each year shall be from each of the following development areas: Gas Cap, Gravity Drainage, Flow Station 2 Water/Ml Flood (MWAG) Project, Eastern Peripheral Wedge Zone MWAG Project, Western Peripheral Wedge Zone MWAG Project, Eileen West End Waterflood Project, and the Northwest Fault Block MWAG Project. (b) Data from the surveys required in (a) of this rule shall be submitted with the Annual Prudhoe Oil Pool Reservoir Surveillance Report by April 1 of each year. Data submitted shall include rate, pressure, time depths, temperature, and any well condition necessary for the complete analysis of each survey. The datum for the pressure surveys is 8800 true vertical feet subsea. Transient pressure surveys obtained by a shut-in buildup test, an injection well pressure fall-off test, a multi - rate test, or an interference test are acceptable. Calculation of bottom -hole pressures from surface data will be permitted for water injection wells. Other quantitative methods may be administratively approved by the AOGCC. (c)Results and data from any special reservoir pressure monitoring techniques, tests, or surveys shall also be submitted as prescribed in (b) of this rule. Conservation Order 341G December 13, 2018 Page 6 of 10 Rule 7 Gas -Oil Contact Monitoring (Revised: CO 341F.002 and CO 341F.007) (a)An Annual GOC Monitoring Surveillance Plan shall be submitted to the AOGCC in conjunction with the Annual Prudhoe Reservoir Surveillance Report by April 1 of each year. This plan will contain the number and approximate locations of neutron log surveys anticipated for the next calendar year and be subject to approval by the AOGCC by May 1 of that same year. The neutron logs obtained shall be distributed across Gas Cap, Gravity Drainage, Gravity Drainage Waterflood Interaction, and downdip areas affected by gas and conducted using good engineering practice. (b) The neutron logs run on any well shall be filed with the AOGCC by the last day of the month following the month in which the logs were run. Rule 8 Productivity Profiles (Revised: CO 341F.0071 A complete copy of any spinner flow meter or tracer surveys obtained on wells, together with the data and results from the surveys, shall be recorded and filed with the AOGCC by the last day of the month following the month in which a survey is finalized. Rule 9 Pool Off -Take Rates (Revised this order) The maximum annual average oil offtake rate is 1.5 million barrels per day plus condensate production. The maximum annual average gas offtake rate is 3.6 billion standard cubic feet per day, which contemplates an annual average rate of 2.7 billion standard cubic feet per day shipped to the proposed AK LNG GTP and additional capacity to account for production upsets at other fields that feed the proposed AK LNG GTP. Daily offtake rates in excess of these amounts are permitted only as required to sustain these annual average rates. The annual average offtake rates as specified shall not be exceeded without the prior written approval of the AOGCC. Annual average offtake rates mean the daily average rate calculated by dividing the total volume produced in a calendar year by the number of days in that year. However, in the first calendar year that large gas offtake rates are initiated, following the completion of a large gas sales pipeline, the annual average offtake rate for gas shall be determined by dividing the total volume of gas produced in the calendar year by the number of days remaining in the year following initial delivery to the large gas sales pipeline. Rule 10 Facility Gas Flaring (Revoked CO 341C) Rule 11 Annual Surveillance Reporting An annual Prudhoe Oil Pool surveillance report will be required by April I of each year. The report shall include but is not limited to the following: 1. Progress of enhanced recovery project(s) implementation and reservoir management summary including engineering and geotechnical parameters. 2. Voidage balance by month of produced fluids, oil, water and gas, and injected fluids, gas, water, low molecular weight hydrocarbons, and any other injected substances (which can be filed in lieu of monthly Forms 10-413 for each EOR project). 3. Analysis of reservoir pressure surveys within the field. 4. Results and where appropriate, analysis of production logging surveys, tracer surveys and observation well surveys. Conservation Order 341 G December 13, 2018 Page 7 of 10 5. Results of gas movement and gas -oil contact surveillance efforts including a summary of wells surveyed and analysis of gas movement within the reservoir. The analysis shall include map(s) and/or tables showing the locations of various documented gas movement mechanisms as appropriate. 6. Progress of the Gas Cap Water Injection project with surveillance observations including; (a) volume of water injected, (b) reservoir pressure results, maps, and analysis (in conjunction with (3.) of this rule), (c) water movement and zonal conformance maps derived from surveillance (such as Pulsed Neutron Logs and 4-D gravity surveys) (d) results of reservoir evaluations of performance (such as material balance and reservoir simulation studies), (e) surveillance plans for the upcoming year, and (f) any plans for change in project operation. Rule 12 Prudhoe Bay Miscible Gas Project (PBMGP) (a) Expansion of the PBMGP and infill expansion of miscible gas injection in the NWFB is approved for the 59,740 acre portion of the Prudhoe Oil Pool defined in the record. (b) An annual report must be submitted to the AOGCC detailing performance of the PBMGP and outlining compositional information for the current miscible injectant (MI) necessary to maintain miscibility under anticipated reservoir conditions. (c) The minimum miscibility pressure (MMP) of the Miscible Injectant must be maintained at least 100 psi below the average reservoir pressure in the Prudhoe Bay Miscible Project area. When the Operator demonstrates that the reservoir pressure is no longer declining within the Prudhoe Bay Miscible Project Area (as evidenced by reservoir pressure measurements), the MMP may be maintained at or below the average reservoir pressure in the Prudhoe Bay Miscible Project area. Rule 13 Waiver of GOR Limitation (Revised: CO 341F.007) (a) The AOGCC waives the requirements of 20 AAC 25.240(b) for all oil wells in the Prudhoe Oil Pool of the Prudhoe Bay Field so long as the gas from the wells is being returned to the pool, or so long as the additional recovery project is in operation. (b) For the Prudhoe Oil Pool "oil well' means a well that produces oil at a gas -oil ratio of 200,000 scf/stb or lower. Rule 14 Waiver of "Application for Sundry Approval" Requirement for Workover Operations The requirements of 20 AAC 25.280(a) are waived for development wells in the Prudhoe Oil Pool of the Prudhoe Bay Field. Sundry work application and reporting requirements shall be done in accordance with the "Well Work Operations and Sundry Notice/Reporting Requirements for Pools Subject to Sundry Waiver Rules" matrix maintained by the AOGCC Rule 15 Waterfloodine The AOGCC approves the December 1980 additional recovery application for water -flooding in the Prudhoe Oil Pool subject to the requirements listed in Rule 11 above. Conservation Order 341G December 13, 2018 Page 8 of 10 Any proposed changes must be submitted to the AOGCC for approval. Rule 16 Orders Revoked (Revised this Order) The following Conservation Orders and associated Administrative Approvals and letter approvals are hereby superseded. Conservation orders 78, 83B, 85, 87, 88, 96, 97, 98B, 117,117A, 118, 130, 137, 138, 139, 140, 141, 143, 145, 145A, 148, 155, 160, 164, 165, 166, 167, 169, 174, 178, 180, 181, 183, 184, 185, 186, 188, 189, 192, 194, 195, 195. 1, 195.2, 195.4, 197, 199, 200, 204, 208, 213, 214, 219, 220, 223, 224, 238, 258, 259, 279, 290 and 333, and March 20, 1981 and August 22, 1986 letter approvals. Additionally, conservation orders 341, 341 A, 341 B, 341C, 341 D, 341 E, and 341F and all associated administrative approvals (except CO 341D.001 and CO 341E.003, which remain in effect) are hereby superseded. The hearing records of these orders are made part of the record for this order. Rule 17 Gas Cao Water Infections The Gas Cap Water Injection Project as described in the operator's application and testimony is approved. Ongoing reservoir surveillance is required to determine that water movement within the reservoir is confined as intended and does not negatively impact overall hydrocarbon recovery, and to determine that the project has resulted in stabilization of reservoir pressure. Rule 18 Commingling of Production in the Same Wellbore (Revised: CO 341F.001 and this order (a) Commingling production from the Aurora Oil Pool in Well S-26 or Put River Oil Pool with the Prudhoe Oil Pool is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: i. Prior to commingling production a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Aurora or Put River Oil Pool (in isolation from the Prudhoe Oil Pool). ii. For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling and analysis must occur at least twice per year and not less frequently than once every seven months. A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. Conservation Order 341G December 13, 2018 Page 9 of 10 iv. The operator shall submit a review of pool production allocation factors and issues over the prior year with the annual reservoir surveillance report and retain electronic file(s) containing daily allocation data and daily test data for a minimum of five years. V. The volumes reported on Form 10-405—i.e., in accordance with 20 AAC 25.230(b)—must identify commingled production allocated to the Aurora Oil Pool or Put River Oil Pool and the Prudhoe Oil Pool. vi. A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Aurora or put River and the Prudhoe Oil Pools, along with the analyses of the geochemical tests, production logs, and regular well tests. (b) A commingled well that is shut in for more than three months shall have the Put River and Prudhoe Oil Pools mechanically isolated to prevent crossflow between the pools. Rule 19 CO2 Utilization Study By December 31, 2020, the WIOs shall complete a study and submit a report to the AOGCC detailing the best use of the effluent gas stream projected to come from the AK LNG GTP to maximize total hydrocarbon recovery. The study and report shall evaluate the suitability of using CO2 for enhanced recovery purposes in the oil pools on the North Slope in which any of the four main WIOs (BPXA, ExxonMobil, CPAI, or Chevron) have an ownership interest. The study and report shall look at the benefits to using CO2, and mixtures containing CO2, for enhanced recovery purposes (including miscible injection, viscosity reducing, and pressure maintenance type projects as appropriate) and include estimates of additional recovery that would be attributable to CO2 injection. The report shall also evaluate challenges to implementing CO2 injection in these pools. Rule 20 Liquid Hvdrocarbon Recovery Maximization Report By June 30, 2021, the W10s shall submit a report to the AOGCC that provides detailed information about the results of projects and operations undertaken from the effective date of this order through December 31, 2020, as well as information about projects underway or planned at that time to accelerate liquid hydrocarbon production to maximize recovery in advance of the proposed major gas sales associated with the AK LNG project. Rule 21 Administrative Relief Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the AOGCC may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. Conservation Order 341 G December 13, 2018 Page 10 of 10 DONE at Anchorage, Alaska and dated December 13, 2018. /signature on file// Hollis S. French Chair, Commissioner //signature on file// Daniel T. Seamount, Jr Commissioner APPEAL NOTICE Y�VILAVO/. p�Ar10\ f:e� 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 Bernie Karl Gordon Severson Penny Vadla K&K Recycling Inc. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 58055 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 7 THE STATE °fALASKA GOVERNOR MIKE DUNLEAVY February 12, 2019 Ms. Katrina Garner Fieldwide Manager, Prudhoe Bay Unit BP Exploration (Alaska) Inc. P.O. Box 196612 Anchorage, AK 99519-6612 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 v .aogcc.olaska.gov Re: Prudhoe Oil Pool and Put River Oil Pool Downhole Commingling Application Application for Reconsideration Docket Number CO 18-016; Conservation Orders No. 341G and 559A Dear Ms. Garner: The Alaska Oil and Gas Conservation Commission (AOGCC) has received BP Exploration (Alaska) Inc.'s (BPXA) Application for Reconsideration dated January 17, 2019, of Rule 18(b) of Conservation Order (CO) No. 341G (CO 341G) and of Rule 12(b) of CO No. 559A (CO 559A) that require mechanical isolation of the Prudhoe Oil Pool (POP) and the Put River Oil Pool (PROP) to prevent crossflow if a well was shut in for more than 3 months. BPXA requests that the requirement for mechanical isolation be extended to 6 months. BPXA's request is hereby granted. In its initial application for downhole commingling between the POP and PROP oil pools BPXA stated that "[c]rossflow of significant volume between pools in commingled wells that experience extended shut in periods could be prevented through mechanical isolation of the pools." However, no definition of "extended shut in periods" was included in the application. During the August 8, 2018, hearing on the commingling application BPXA indicated that if a commingled well was anticipated to be shut in for more than 6 months it would mechanically isolate the POP and PROP. However, no justification for the 6 month time frame was provided. CO 341G and CO 559A establishing a 3 month shut in period as the trigger for the need to mechanically isolate the POP and PROP. In its application for reconsideration BPXA provided justification for why a 6 month shut in is more appropriate trigger than a 3 month one for determining when a commingled well would need to be mechanically isolated. The justifications include: The rate of crossflow between the POP and PROP would be low due to the low permeability found in the PROP. Resumption of production from a commingled well would recover volumes that crossflowed between the pools. - A 3 month schedule may not always be feasible due to logistical concerns inherent in working on the North Slope including: o If a commingled well is shut in due to a facility related issue it may be difficult to estimate how long that shut in may last. o During summer months access to wells may be restricted by ongoing facility shutdowns and/or drill site maintenance and prevent certain types of interventions from being able to be performed. o Ongoing wellwork operations may make it difficult to plan, schedule, and execute the work necessary to mechanically isolate the pools within a 3 month timeframe. - BPXA's intention would be to isolate the pools as quickly as feasible once it determines it is likely a commingled well will be shut in for more than 6 months. Based on the additional justification provided by BPXA, changing the timeframe that would require mechanical isolation of the POP and PROP wells in shut in commingled producers from 3 to 6 months is appropriate. CO 341G and CO 559A will be revised to reflect this change. Sincerely, Hollis S. French Chair, Commissioner a January 17, 2019 Via Electronic Delivery and FEDEX Hollis French Commission Chair Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 BP Exploration (Alaska)Inc. 900 E. Benson Boulevard Anchorage, AK 99508 P.O. Box 196612 Anchorage, AK 99519-6612 Re: Docket Number: CO 18-016 - Application for Reconsideration Conservation Orders 341G and 559A Prudhoe Oil Pool (POP), Put River Oil Pool (PROP), Prudhoe Bay Unit Dear Chair French: RECEIVE® JAN 2 2 2019 AOGCC BP Exploration (Alaska) Inc. (BPXA), as operator of the Prudhoe Bay Unit (PBU), respectfully submits this Application for Reconsideration in the above -referenced matter. For the reasons discussed in this application, we respectfully submit that the Alaska Oil and Gas Conservation Commission's (AOGCC) orders issued December 13, 2018 should be amended. Chronology • On June 20, 2018, BPXA requested that the AOGCC amend CO 341F and CO 559 to allow pool -wide downhole commingling between the PROP and the POP. • On August 6, 2018, the AOGCC held a public hearing where BPXA testified to allow for commingling of the PROP with the POP. • On December 13, 2018, the commission issued CO 341G and CO 559A, approving BPXA's application for commingling. • On December 17, 2018 BPXA requested an extension of the time to file for reconsideration on the recently issued conservation orders. • On December 18, 2018 the AOGCC granted an extension of the deadline to file for reconsideration on the subject conservation orders until January 22, 2019. Application for Reconsideration Docket Number: CO 18-016 Conservation Orders 341G and 559A January 21, 2019 Page 3 wellwork; that is, the time between the generation and prioritization of the well work request, and the execution of that work, could be longer than 3 months. Although BPXA is requesting that the text of the orders be amended to reference six months before mechanical isolation is required, it would nevertheless be BPXA's intent to execute the mechanical isolation as soon as reasonably possible if a commingled PROP and POP well is expected to be shut in for more than six months. If you have any questions on this matter, please contact Bill Bredar at (907) 564-5348 or william.bredar@bp.com. Sincerely, Katrina Garner Fieldwide Manager, Prudhoe Bay Unit BP Exploration (Alaska)Inc. Cc: Eric Reinbold, ConocoPhillips Alaska, Inc Jeff Farr, ExxonMobil Alaska, Production Inc Dave White, Chevron USA Dave Roby, AOGCC 5 THE STATE °fALASKA GOVERNOR MIKE DUNLEAVY December 18, 2018 Katrina Garner West Area Manager/Reservoir Management, Prudhoe Bay Alaska Reservoir Development BP Exploration (Alaska) Inc. PO Box 196612 Anchorage, AK 99519-6612 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.00gcc.olaska.gov RE: Docket No. CO -18-016 Prudhoe Bay Unit Conservation Orders 341 G and 559A — Request to extend deadline for applications for reconsideration until January 22, 2019 Dear Ms. Garner: By letter dated December 17, 2018, BP Exploration (Alaska) Inc. (BPXA) requested an extension to the time allowed to file for reconsideration on the recently issued conservation orders 341 G and 559A, which authorized downhole commingling of production between the Prudhoe and Put River Oil Pools, until January 22, 2019. The stated reason for requesting this extension, employee absences during the holiday season, is good cause to grant an extension to the time allowed to file for reconsideration. Therefore, BPXA's request to extend the deadline to file for reconsideration on the subject conservation orders to January 22, 2019, is hereby granted. If you have any questions on this matter, please contact Dave Roby at 907-793-1232 or dave.roby(a)alaska.g.ov. Sincerely, Hollis S. French Commissioner, Chair E BP Exploration (Alaska) Inc 900 East Benson Boulevard P O Box 196612 Anchorage, Alaska 99519-6612 (907) 561-5111 December 17. 2018 ' "T Hollis French, Chair Alaska Oil and Gas Conservation Commission ski, 333 West 7h Ave, Suite 100 Anchorage, AK 99501 A RE: Prudhoe Bay Unit Conservation Orders 341 G and 559A—Request to Extend Deadline for Applications for Reconsideration until January 22, 2019 Dear Chair French: BP Exploration (Alaska), Inc, as operator of the Prudhoe Bay Unit, received the above - referenced orders affecting these two pools on December 13, 2018. BP anticipates filing an application for reconsideration of both orders. Our applications for reconsideration will not be complete, due to holiday absences of the staff preparing them, until approximately January 22, 2019. We respectfully submit that the absence of our technical staff constitutes good cause for granting this request for extending the deadline for filing applications for reconsideration until January 22, 2019. Thank you for considering this request. If you have any questions regarding the reports please contact Bill Bredar at 564-5348 or through email at William.bredarkbp.com. Respectfully, �<�- -&�-� Katrina Gamer West Area Manager/Reservoir Management, Prudhoe Bay Unit Alaska Reservoir Development, BPXA Cc: Eric Reinhold, ConocoPhillips Alaska, Inc Jeff Farr, ExxonMobil Alaska, Production Inc Dave White, Chevron USA Dave Roby, AOGCC 3 AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 ALASKA OIL AND GAS CONSERVATION COMMISSION Before Commissioners: Hollis French, Chair Cathy Foerster Daniel T. Seamount In the Matter of the Application of ) BP Exploration Alaska, Inc., for ) Administrative Amendments to CO 341F and ) 559 to Allow for the Poolwide, Downhole ) Commingling of the Prudhoe Oil Pool and the ) Putt River Oil Pool. ) Docket No.: CO 18-016 ALASKA OIL and GAS CONSERVATION COMMISSION Anchorage, Alaska August 6, 2018 10:00 o'clock a.m. PUBLIC HEARING BEFORE: Hollis French Cathy Foerster Computer Matrix, LLC Phone: 907-243-0668 135 ChristensenDr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Page 2 1 TABLE OF CONTENTS 2 Opening remarks by Chairman Hollis 03 3 Remarks by Ms. Ohms 06 4 Remarks by Ms. Stechauner 08 5 Remarks by Mr. Emerson 09 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 3 1 P R O C E E D I N G S 2 (On record - 10:00 a.m.) 3 CHAIRMAN FRENCH: Let's go ahead and get 4 started. I'll call the hearing to order. It is August 5 6, 2018, it's 10:00 o'clock in the morning. We're at 6 333 West Seventh Avenue, the location of the Alaska Oil 7 and Gas Conservation Commission. To my right is 8 Commissioner Cathy Foerster, I'm Hollis French, the 9 Chair of the Commission. Dan Seamount will not be here 10 today. 11 This hearing is in regard to Docket Number CO 12 18-016, the application of BP Exploration, Incorporated 13 for amendments to conservation order number 341F which 14 governs the Prudhoe Oil Pool and conservation order 15 number 559 which governs the Putt River Oil Pool. BP 16 Exploration Alaska, Incorporated by letter dated June 17 20, 2018, requests AOGCC amend CO 341F and CO 599 to 18 allow poolwide, downhole commingling between the PROP 19 and the POP. 20 Computer Matrix will be recording the 21 proceedings. You can get a copy of the transcript from 22 Computer Matrix Reporting. 23 BP is here and prepared to testify. Any other 24 parties not signed up planning to testify? 25 (No comments) Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 4 1 CHAIRMAN FRENCH: I don't see any hands. The 2 Commissioners will ask questions during the testimony, 3 we may also take a recess to consult with staff to 4 determine whether additional information or clarifying 5 questions are necessary. If a member of the audience 6 has a question he or she feels should be asked, please 7 submit that question in writing to Jodie Colombie who 8 has her hand up now at the back of the room. The 9 person should provide the question to the Commission -- 10 Jodie will provide the question to the Commissioners 11 and if we feel that asking the question will assist us 12 in making our determinations, we will ask it. For 13 those testifying keep in mind you must speak into the 14 microphone so that those in the audience and the court 15 reporter can hear your testimony. Please remember to 16 reference your slides so that someone reading the 17 public record can follow along. For example refer to 18 slides by their numbers if numbered or by their titles 19 if not numbered. 20 Just a few general ground rules on what's 21 allowed relative to testimony. Of course we want it to 22 be relevant to the purposes of the hearing I outlined a 23 few minutes ago and to the statutory authority of this 24 agency. Anyone desiring to testify may do so, but if 25 the testimony drifts off subject we will limit the Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Arch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATIONAK, Inc. Docket No. CO 18-016 Page 5 1 testimony. Additionally testimony may not make -- take 2 the form of cross examination. As I said before the 3 Commissioners will be asking the questions. And 4 finally and I -- I've yet to see this happen, testimony 5 that is disrespectful or inappropriate will not be 6 allowed. 7 Commissioner Foerster, anything you want to add 8 before we get started? 9 COMMISSIONER FOERSTER: I'm sorry that you 10 haven't had that opportunity yet, I hope that you do 11 soon. 12 CHAIRMAN FRENCH: Well, today does not look 13 like the day, but you never know. So with that let's 14 turn to our guests, BP. Welcome, it's nice to have you 15 here. I see Danielle Ohms, Graham Emerson and Gerda 16 Stechauner are here. Go ahead and identify yourselves 17 if you would and whoever wants to lead off please do 18 so. 19 COMMISSIONER FOERSTER: You going to swear them 20 in? 21 CHAIRMAN FRENCH: Oh, of course. Raise your 22 right hands. 23 (Oath administered) 24 IN UNISON: I do. 25 CHAIRMAN FRENCH: Head nods and I dos. Okay. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 6 1 Now proceed. Thank you. 2 If you want to be identified as an expert in 3 your field please do so -- indicate so and then we'll 4 just take a minute to have the colloquy we normally do 5 in that -- in that setting. Very good. 6 DANIELLE OHMS 7 previously sworn, called as a witness on behalf of BP 8 Exploration Alaska, Inc., stated as follows on: 9 DIRECT EXAMINATION 10 MS. OHMS: I can start off for us. I'm 11 Danielle Ohms. 12 CHAIRMAN FRENCH: Good morning, Danielle. 13 MS. OHMS: Good morning, Commissioner French 14 and Commissioner Foerster. And my name is Danielle 15 Ohms, I am employed with BP Alaska, working at BP's 16 Anchorage office. I have a bachelor of science in 17 petroleum engineering from the University at Texas at 18 Austin. I also have a master's degree in environmental 19 engineering from the University of Alaska Anchorage. 20 I've worked in the oil and gas industry in Alaska for 21 30 years and I previously have been qualified as an 22 expert witness. So I can elaborate further if needed, 23 but hopefully that will suffice. 24 CHAIRMAN FRENCH: You're seeking to be an 25 expert in the area of petroleum..... Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 7 1 MS. OHMS: Petroleum engineering. 2 CHAIRMAN FRENCH: .....engineering. I think 3 Commissioner Foerster has probably agreed to this a 4 dozen times in her time on the bench. Do you want 5 to.... 6 COMMISSIONER FOERSTER: I want -- I have one 7 question. Are you able to form your hand in 8 (indiscernible)..... 9 MS. OHMS: There you go. 10 COMMISSIONER FOERSTER: Then you're fine by me. 11 CHAIRMAN FRENCH: Let the record reflect -- no, 12 actually we're not going to let the record reflect 13 that. I will defer to Commissioner Foerster's wisdom 14 and agree that you shall be and the Commission has 15 decided you shall be seen as an expert in..... 16 COMMISSIONER FOERSTER: Ms. Ohms has testified 17 before us previously..... 18 MS. OHMS: Yeah. 19 CHAIRMAN FRENCH: I understand. 20 COMMISSIONER FOERSTER: .....and she's well 21 qualified. 22 CHAIRMAN FRENCH: Please proceed. 23 GERDA STECHAUNER 24 previously sworn, called as a witness on behalf of BP 25 Exploration Alaska, Inc., stated as follows on: Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 1 DIRECT EXAMINATION 2 MS. STECHAUNER: Good morning. My name is 3 Gerda Stechauner. I will be asking to be qualified as 4 an expert witness in reservoir engineering. In terms 5 of educational background I have a bachelor of science 6 degree in mechanical engineering from the Massachusetts 7 Institute of Technology, MIT. I also have a Ph.D. in 8 the field of experimental flow dynamics from Cambridge 9 University I graduated there in 2005. 10 CHAIRMAN FRENCH: You're a little soft spoken. 11 If you can lean it a little more closely. 12 MS. STECHAUNER: Okay. Is this better? 13 CHAIRMAN FRENCH: Yeah. And your Ph.D. was in? 14 MS. STECHAUNER: Experimental fluid dynamics 15 from Cambridge University in 2004. 16 CHAIRMAN FRENCH: Okay. 17 MS. STECHAUNER: In terms of my work experience 18 I have been working at BP Alaska for approximately 10 19 years, working in a variety of roles, RE roles in -- 20 across Prudhoe Bay. Prior to that I have three years 21 of experience also with BP in the UK. 22 CHAIRMAN FRENCH: And were those years of 23 experience in the area of reservoir engineering? 24 MS. STECHAUNER: Yes, that's correct. 25 CHAIRMAN FRENCH: I don't have any further Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 9 1 questions about your qualifications, maybe Commissioner 2 Foerster does. 3 COMMISSIONER FOERSTER: So how did you jump 4 from a bachelor's in mechanical to a Ph.D. in very 5 specific reservoir engineering? 6 MS. STECHAUNER: My Ph.D. was not in reservoir 7 engineering, it was in experimental fluid dynamics 8 actually in the..... 9 CHAIRMAN FRENCH: To me that's res..... 10 MS. STECHAUNER: Well, in the department of 11 zoology so it was on insect flight. 12 CHAIRMAN FRENCH: It was on what? 13 MS. STECHAUNER: Insect flight, aerodynamics. 14 COMMISSIONER FOERSTER: Insect flight. That is 15 awesome, but irrelevant. I have no problem recognizing 16 you as an expert in reservoir engineering. 17 CHAIRMAN FRENCH: Good morning. 18 GRAHAM EMERSON 19 previously sworn, called as a witness on behalf of BP 20 Exploration Alaska, Inc., stated as follows on: 21 DIRECT EXAMINATION 22 MR. EMERSON: Good morning. So my name's 23 Graham Emerson and I would seek to be recognized as an 24 expert in geoscience. So I have a bachelor of science 25 degree in geology from the University of Edinburgh in Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 10 1 the United Kingdom and I also have a master's of 2 science degree in petroleum geoscience from the 3 University of Aberdeen in the United Kingdom. I have 4 worked with BP for 12 years, I've worked in the North 5 Sea, I've worked in Azerbaijan, Angola and I spent the 6 last four and a half years working here in Alaska. For 7 all those 12 years I was practicing geosciences with 8 BP. 9 CHAIRMAN FRENCH: Excellent. That satisfies my 10 questions. Commissioner Foerster. 11 COMMISSIONER FOERSTER: That's fine by me. 12 CHAIRMAN FRENCH: You're -- you'll be an expert 13 in you said? 14 MR. EMERSON: Geoscience. 15 CHAIRMAN FRENCH: Geoscience. Very good. 16 Thank you. And whoever all wants to lead off now can 17 please proceed. 18 MS. OHMS: Good morning. I'd like to provide 19 an overview of BP's planned testimony today. BPXA, in 20 pursuit of greater ultimate recovery from the Putt 21 River Oil Pool applied for poolwide ability to co - 22 mingle with the Prudhoe Oil Pool on May 21st, 2018. 23 This potential activity was referenced in the October 24 6, 2005 AOGCC hearing addressing BPXA's request to 25 amend conservation order 341D for the Prudhoe Oil Pool Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 11 1 and area injection order 4C to include the Putt River 2 sandstone. In that hearing the Putt River Oil Pool 3 encompassing the southern, central and western lobes 4 was established. Use of Ivishak production to gas lift 5 Putt River fluids was mentioned by BP as a development 6 scenario in testimony at that hearing. Transcript 7 pages 26 and 27 and I have that too. It was observed 8 by the Commission that the opportunity to execute this 9 scenario could be afforded with some paperwork and BPXA 10 is here today to move forward with that administrative 11 process. 12 BPXA is prepared to demonstrate that 13 commingling of these pools gives a better chance of 14 optimizing production from the Putt River and that 15 production from the separate pools can be appropriately 16 allocated. BPXA would like authorization to move 17 forward with the commingling scenario as the Putt River 18 needs help to produce and commingling with the Prudhoe 19 Oil Pool is potentially a very effective method. We 20 will demonstrate that commingling will not result in 21 significant transfer of POP, Prudhoe Oil Pool, we call 22 it POP for shortening, liquids to the Putt. As you see 23 -- as you will see with this BP testimony there is 24 little downside to crossflow between Ivishak and Putt 25 and mitigations exist should shut-in periods be Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 12 1 lengthy. And if the Commission grants poolwide 2 commingling there remains assurance via the 10.403 3 process that given cause Commission rejection can occur 4 to any proposed commingling activity on a well by well 5 basis. 6 With current marginals at flowstation three, 7 timely production of the condensate in the PROP or the 8 Prudhoe -- the Putt River Oil Pool western lobe is our 9 first goal here today. This could be a viable project 10 and it looks competitive. Benefits of commingling 11 brings the following: mitigation of paraffin and 12 hydrate formation due to increased heat from the 13 Ivishak stream and increased production from the Putt 14 over the stand-alone Putt production. 15 Gerda is prepared next to begin with a review 16 of the two slides that we have here which were prefiled 17 and then we will provide further details regarding 18 crossflow and answer your questions. 19 Graham is the Putt River project lead and 20 geologist and is available should the Commission have 21 additional questions. 22 I'm going to pass it to Gerda now. 23 MS. STECHAUNER: I'll first briefly review 24 location and geology of the Putt River formation and 25 the reservoir and fluid properties of each lobe, but Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: 13P EXPLORATION AK, Inc. Docket No. CO 18-016 Page 13 1 I'll spend the majority of the time today discussing 2 aspects of commingling production. 3 The Putt River sandstone is located within the 4 Prudhoe Bay Unit and is illustrated on slide one which 5 is entitled Putt River Sandstone Distribution and 6 Reservoir Properties. The map shows the gross sand 7 thickness of the Putt River. 8 CHAIRMAN FRENCH: And just a quick question for 9 me. Is that more or less the extent of the Putt River 10 formation that I'm seeing on the slide, it looks like 11 it extends a tiny bit into the north there, but that 12 looks like the very edge of it perhaps? 13 MS. STECHAUNER: That is correct. 14 CHAIRMAN FRENCH: Okay. So that's the universe 15 of Putt River right there? 16 MR. EMERSON: Correct. 17 CHAIRMAN FRENCH: Got it. Okay. Thanks. And 18 what is the Putt River producing now and how much is it 19 producing? 20 MS. STECHAUNER: The Putt River is producing 21 from the southern lobe and we also some limited 22 production from the northern lobe which is part of the 23 Prudhoe oil Pool. I cannot speak to the exact rate the 24 Putt is producing at the moment. 25 CHAIRMAN FRENCH: Just a rough, I mean, any Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 14 1 rough amount just to give me a ball park, a thousand 2 barrels a day, 10,000 barrels a day? 3 MS. STECHAUNER: It's probably less than a 4 thousand. 5 CHAIRMAN FRENCH: Okay. Okay. And since this 6 is less than a thousand, I -- it just gives me a -- 7 sort of a ball park view. We can come back to it 8 later, it's not important, I just want to get a -- 9 again just a very ball park idea. 10 Thank you. 11 COMMISSIONER FOERSTER: And what's the northern 12 boundary, why does your map stop there? 13 MR. EMERSON: Examine that -- this map 14 actually..... 15 CHAIRMAN FRENCH: Identify yourself. 16 MR. EMERSON: Oh, sorry. This is Graham 17 Emerson. This map was actually generated in 2004 and 18 is the same map we're using for the -- from the 2005 19 hearing so it was actually created prior to listing -- 20 taking on the Putt River. I believe the Putt River 21 lobe terminates pretty much as you see it on the map 22 there and there's no -- nothing relevant further to the 23 north. 24 COMMISSIONER FOERSTER: My question was what is 25 that boundary? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 1 2 3 _! 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 15 MR. EMERSON: The horizontal (indiscernible) on the top? COMMISSIONER FOERSTER: What's the line, what does that demark? 5 MR. EMERSON: Yeah, I'm not sure. I'd have to 6 get back to you on exactly what that is. 7 COMMISSIONER FOERSTER: Okay. 8 MR. EMERSON: Yeah, okay. 9 MS. STECHAUNER: I'll begin again, Gerda 10 Stechauner. 11 CHAIRMAN FRENCH: Excellent. 12 MS. STECHAUNER: So there are four lobes of the 13 Putt, called the northern, western, central and 14 southern and I'll point to those now on the map. 15 Northern, western, central and southern. The northern 16 and western accumulations are gas with associated 17 condensate while the southern and central are black 18 oil. The reservoir fluid PPT properties from appraisal 19 activity in 2005 are shown in the table on this slide 20 which is -- and that table is also in the conservation 21 order 559. 22 I'm going to move on to the next slide which is 23 entitled Putt River Sandstone Stratigraphy. This slide 24 depicts how the Putt River lobe lies stratigraphically 25 above the lower cretaceous unconformity known as the Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 16 1 LCU depicted in the red line. And..... 2 CHAIRMAN FRENCH: It all lies -- it all lies 3 above that red line? 4 MS. STECHAUNER: Correct. 5 CHAIRMAN FRENCH: Got it. Okay. Very good. 6 Thank you. 7 MS. STECHAUNER: And it all lies below the 8 highly radioactive zone known as the HRZ, the blue 9 line. And I'll again in this cross section point out 10 the northern lobe, central lobe, the western lobe and 11 the southern lobe. Discontinuous sandstone deposition 12 has resulted in compartmentalization between the four 13 lobes as was noted in the conservation order 559. 14 I'm now going to talk about the reservoir and 15 fluid properties of the western, central and southern 16 lobes as they related to the commingling request. For 17 this purpose I'm going to again reference slide one 18 which is entitled Putt River Sandstone Distribution and 19 Reservoir Properties. Please note that I will not 20 reference the northern lobe in the remainder of this 21 presentation as that lobe is considered part of the 22 Prudhoe Oil Pool and is therefore not the focus of 23 today's discussion. 24 Based on appraisal information from the Putt 25 River Oil Pool as presented in a previous hearing in Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Arch. AK 99501 Fax: 907-243-1473 Email sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 17 1 2005 the western lobe contains gas and associated 2 condensate. That pool was appraised with a production 3 test in well 1541B in 2005. The flow rates from the 4 appraisal well test were approximately 1.8 million 5 standard cubic feet per day of gas and 73 barrels of 6 condensate per day. During the well test there was 7 possibly paraffin and hydrate build up likely due to 8 low fluid rate and low temperatures in the wellbore. 9 BP is requesting to co -mingle production from the Putt 10 River Oil Pool with the Ivishak and the Prudhoe Oil 11 Pool to provide extra fluids which bring more heat and 12 velocity and thereby mitigate or eliminate these flow 13 assurance issues. It is BP's view that the western 14 lobe resource cannot be effectively developed without 15 commingling. There are several wellbores in the 16 western lobe that present an opportunity for 17 commingling with the Ivishak to produce the Putt 18 resource. The central lobe which is a black oil 19 accumulation has limited wellbore opportunities for 20 commingling, but there may be potential to pursue in 21 the future. The southern lobe which already has two 22 dedicated producers and one dedicated injector in the 23 Putt River is not the focus of commingling at this 24 time. 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dc, Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 18 1 CHAIRMAN FRENCH: So just to recap it sounds 2 like western and central, yes, northern and southern, 3 no. 4 MS. STECHAUNER: So the northern lobe is not 5 part of the Putt River Oil Pool and it..... 6 CHAIRMAN FRENCH: Definitionally it's not at 7 stake here? 8 MS. STECHAUNER: Correct. 9 CHAIRMAN FRENCH: Right. 10 COMMISSIONER FOERSTER: Isn't it co -ming -- 11 it's already in (indiscernible - simultaneous 12 speech)..... 13 CHAIRMAN FRENCH: It's already (indiscernible - 14 simultaneous speech) yep, yep, yep. 15 Thank you, Commissioner Foerster and Gerda, 16 yeah. 17 MS. STECHAUNER: Does that answer your 18 question? 19 CHAIRMAN FRENCH: We're all good. 20 MS. STECHAUNER: Okay. 21 COMMISSIONER FOERSTER: Could you -- were you 22 going to say what are the reserves at stake in go or no 23 go on this request? 24 MS. STECHAUNER: Yes. Let me refer to the 25 conservation order 559. In the western lobe the Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 19 1 estimated gas in place in billions of cubic feet is 2 between 69.6 and 104.4. In the central it's a black 3 oil accumulation, estimated oil in place is 1.1 to 2.7 4 billion barrels. 5 COMMISSIONER FOERSTER: You refer to the 6 western lobe reserves as gas. Since you're not 7 currently selling any gas explain for the record why 8 that production is important? 9 MS. STECHAUNER: So that gas has associated 10 condensate and when that gas is produced to the surface 11 those condensate liquids drop out..... 12 COMMISSIONER FOERSTER: Okay. 13 MS. STECHAUNER: .....and that would be what is 14 for sale or sold. 15 CHAIRMAN FRENCH: Good. 16 COMMISSIONER FOERSTER: Thank you. 17 MS. STECHAUNER: So based on the reservoir 18 fluid properties in the Putt River Oil Pool and the 19 Prudhoe Oil Pool, there are no known fluid 20 compatibility issues for commingling this production. 21 Furthermore no formation damage is anticipated if Putt 22 River Oil Pool fluids enter the Prudhoe Oil Pool or 23 visa versa. while a co -mingled well is flowing to the 24 surface it is highly unlikely that crossflow would 25 occur between the pools. But when a co -mingled well is Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 20 1 shut-in, crossflow may occur and will be dictated by 2 the pressure build up behavior within each pool. 3 CHAIRMAN FRENCH: And I'm guessing you're about 4 to address that. 5 COMMISSIONER FOERSTER: Well, before you gloss 6 over the it's unlikely that crossflow will occur, will 7 you give us the technical basis for that statement? 8 MS. STECHAUNER: It's unlikely that crossflow 9 will occur while a well is flowing to surface because 10 the bottom hole flowing pressure in the wellbore is low 11 -- lower than the reservoir pressure due to the pools. 12 CHAIRMAN FRENCH: It's going to flow to 13 surface? 14 MS. STECHAUNER: Correct. 15 CHAIRMAN FRENCH: Right. 16 COMMISSIONER FOERSTER: And then in -- during 17 shut-in how are you going to -- that's what you're 18 going to go to next? 19 MS. STECHAUNER: Yes. So I'd like to provide 20 more detail on what would be anticipated in commingling 21 the Putt River western lobe with the Ivishak in the 22 Prudhoe Oil Pool. The current reservoir pressure of 23 the Putt River in the western lobe is approximately 24 4,200 psi at the 8,100 foot subsea datum depth, while 25 the Prudhoe Oil Pool is approximately 3,300 psi at the Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 21 1 8,800 subsea datum. Under stabilized conditions which 2 would occur some amount of time after shut-in, 3 crossflow would likely be from the higher pressure Putt 4 River Oil Pool to the lower pressure Prudhoe Oil Pool. 5 After sustained offtake from the western lobe of the 6 Putt River Oil Pool the average reservoir pressure 7 would fall and it could fall below that of the Prudhoe 8 Oil Pool at some point and at that time crossflow from 9 the Prudhoe Oil Pool into the Putt River Oil Pool could 10 occur during shut-in periods under stabilized 11 conditions. 12 So in summarizing these conclusions on the 13 likelihood and the direction of crossflow between the 14 pools it is (indiscernible) that crossflow will occur 15 during shut-in periods and we recognize that crossflow 16 may occur from the Prudhoe Oil Pool to the Putt River 17 Oil Pool or vise versa. Regardless of the direction of 18 crossflow, the volume of crossflow is anticipated to be 19 small due to the permeability of the Putt River lobe -- 20 Putt River Oil Pool. There is indication from 21 appraisal well test in 1541B which is near the central 22 -- center of the western lobe a fairly low 23 permeability. There is also one core measurement on 24 the distal part of the western lobe in well 1514A with 25 sidewall core indicating permeability of approximately Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahileCgci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 22 1 4 millidarcies. While we expect positive production 2 benefits for commingling if deemed necessary we can 3 stop crossflow by setting a downhole plug to isolate 4 one pool from another during shut-in periods as stated 5 in the application. 6 COMMISSIONER FOERSTER: So what is going to 7 trigger you that you need to do that? 8 MS. STECHAUNER: Can you say that again, I 9 didn't get it. 10 COMMISSIONER FOERSTER: Well, you say that you 11 have the ability to stop crossflow if you need to, how 12 are you going to know that you need to? 13 MS. OHMS: That depends. I mean, we would say 14 -- if I can jump in, this is Danielle Ohms, unless you 15 wanted -- we wouldn't -- we're saying we would allow it 16 for a certain amount of time. We were willing to say 17 that after six months if we anticipate the wells going 18 to sit-in -- shut-in for six months we're could be 19 planning as soon as we're aware of that to run a plug 20 in the well. 21 COMMISSIONER FOERSTER: Okay. So you're going 22 to just say -- you're going to assume that crossflow is 23 occurring and you'll allow it for short periods of 24 time, but as longer time goes on you don't want it and 25 you'll stop it? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 23 1 MS. OHMS: Yes, we have..... 2 COMMISSIONER FOERSTER: Okay. 3 MS. OHMS: .....that ability. In the wells 4 that we're looking at so far we have the ability to be 5 able to set a plug between the two zones downhole. 6 CHAIRMAN FRENCH: Just another question or two 7 on that point. Are you injecting anything into the 8 Putt Oil Pool, will there be anything to maintain a 9 reservoir pressure there? 10 MS. STECHAUNER: This is Gerda Stechauner 11 speaking again. We are not injecting anything into the 12 western lobe nor do we plan to at this time. We do 13 have injection in the southern lobe. 14 CHAIRMAN FRENCH: But as you produce the 15 western lobe you're anticipating the reservoir pressure 16 will come down a little bit, thus alleviating crossflow 17 after some period of time? 18 COMMISSIONER FOERSTER: What they're saying is 19 that they're -- right now because Putt is higher 20 pressure, crossflow will be out of the Putt, but if the 21 Putt drops to some point where it's lower than the..... 22 CHAIRMAN FRENCH: I understand. I understand. 23 Yep, yep, yep. As the pressures equalize there's no 24 crossflow? 25 MS. STECHAUNER: That might occur. There is Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 24 1 likely always going to be some reservoir pressure 2 difference between the lobes depending on the depletion 3 strategy. 4 CHAIRMAN FRENCH: It's unlikely they'll be 5 exactly the same? 6 MS. STECHAUNER: Correct. 7 CHAIRMAN FRENCH: Right. Okay. Okay. I think 8 I understand. Thank you. 9 MS. STECHAUNER: So even though we expect some 10 crossflow is likely to occur, we believe that the 11 crossflow of fluids will be produced back when the well 12 is turned back on production. 13 I would also like to add that the application 14 BP has outlined -- has outlined the plan to conduct 15 reservoir surveillance and assure that proper 16 production allocation between the pools will be 17 achieved. The allocation of production will be based 18 upon oil geochemical analyses and differential well 19 tests or production logs as stated in the rule 12 in 20 the proposed amendment to the conservation order 559. 21 Specifically geochemical sampling would occur monthly 22 for the first six months after commingling starts. A 23 production log or a differential well test would be 24 obtained also in the first six months for comparison to 25 the geochemical basis for allocation. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gei.net AOGCC 8/6/2018 1TMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 25 1 CHAIRMAN FRENCH: Can you remind me what the 2 relative API gravities are of the oil you expect to get 3 out of the co -mingled flow on the western lobe? 4 MS. STECHAUNER: Yes. So on the slide you can 5 see the API gravity of the western lobe is 57. Are you 6 asking also about the API gravity of the Ivishak that 7 we'll be coming up with it? 8 CHAIRMAN FRENCH: Sure. Let's get it on the 9 record. I can see it now on the slide, thank you, but 10 let's just go ahead and have you articulate it. 11 MS. STECHAUNER: All right. So in the Ivishak 12 which is a black oil reservoir, the black oil API can 13 be around 28 degrees, but there's also a lot of gas 14 flowing with the Ivishak black oil that increases the 15 API gravity of those liquids. So typically see between 16 30 to 40 API gravity in the Ivishak production wells in 17 this area. 18 CHAIRMAN FRENCH: Versus high 50s for the -- 19 for the POP? 20 MS. STECHAUNER: For the condensate..... 21 CHAIRMAN FRENCH: Got it. 22 MS. STECHAUNER: .....right. 23 CHAIRMAN FRENCH: Yep. Very helpful. Thank 24 you. 25 MS. STECHAUNER: Okay. In conclusion BP Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 26 1 requests approval for wellbore commingling of 2 production from the Putt River Oil Pool and the Prudhoe 3 Oil Pool. Because of the number of opportunities we 4 request approval of an amendment to the Putt River Oil 5 Pool conservation order 559 authorizing the poolwide 6 commingling with the Prudhoe Oil Pool. BPXA 7 respectfully submits that we will be able to 8 appropriately allocate production between the two pools 9 and that this activity will not cause waste and will 10 enable greater ultimate recovery of resources. 11 This concludes our formal testimony at this 12 time. Thank you. 13 CHAIRMAN FRENCH: Can you go to slide two, 14 please, just for a second. Brilliant. Thanks. And I 15 count one, two, three, four, five, six, seven, eight, 16 looks like about nine wells perhaps that are involved? 17 MS. STECHAUNER: We have done preliminary 18 screening and we have around seven potential candidates 19 identified now that would be possible candidates for 20 commingling in the western lobe. 21 CHAIRMAN FRENCH: Okay. And that would just 22 involve some perforations in the -- in the Putt pool 23 zone? 24 MS. STECHAUNER: That is correct. It would be 25 fairly standard well work to perforate the Putt River. Computer Matrix, LLC Phone: 907-243-0668 135 ChristensenDr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 20 CHAIRMAN FRENCH: No further questions from BP. 21 Thanks again so much for being here. 22 Any other member of the public of the public 23 which to testify on this application? 24 (No comments) 25 CHAIRMAN FRENCH: Anybody on line? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Page 27 1 CHAIRMAN FRENCH: Those are all the questions I 2 have. Commissioner Foerster. 3 COMMISSIONER FOERSTER: I don't have any 4 questions for you guys. I don't think we need to take 5 a recess. I think the questions that I had discussed 6 with staff have been answered. But if you guys are 7 finished I have a question for Mr. Bredar. 8 Mr. Bredar, you have invited a guest this 9 morning. Would you like to get up and introduce here 10 and tell us a little bit about her? 11 MR. BREDAR: (Indiscernible - away from 12 microphone)..... 13 CHAIRMAN FRENCH: Good morning, nice to have 14 you here. 15 COMMISSIONER FOERSTER: So do you want to tell 16 us your dad's deepest darkest secret? 17 (Laughter) 18 COMMISSIONER FOERSTER: Okay. Never mind. I 19 have..... 20 CHAIRMAN FRENCH: No further questions from BP. 21 Thanks again so much for being here. 22 Any other member of the public of the public 23 which to testify on this application? 24 (No comments) 25 CHAIRMAN FRENCH: Anybody on line? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 2 8 1 1 (No comments) 2 CHAIRMAN FRENCH: Anybody in the room? 3 (No comments) 4 CHAIRMAN FRENCH: With that I'll solicit a 5 motion to adjourn. 6 COMMISSIONER FOERSTER: I move we adjourn. 7 CHAIRMAN FRENCH: It has been moved and now 8 seconded that we adjourn. We're going to adjourn at 9 10:30. Thanks so much for being here. 10 (Hearing adjourned 10:30 a.m.) 11 (END OF REQUESTED PORTION) 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 29 C E R T I F I C A T E UNITED STATES OF AMERICA ) )ss STATE OF ALASKA ) I, Salena A. Hile, Notary Public in and for the State of Alaska, residing in Anchorage in said state, do hereby certify that the foregoing matter in Docket No. CO 18-016 was transcribed to the best of our ability; IN WITNESS WHEREOF I have hereunto set my hand and affixed my seal this 15th day of August 2018. Salena A. Hile Notary Public, State of Alaska My Commission Expires: 09/16/2018 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email sahile@gci.net STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Docket Number: CO -18-016 Amend CO 341F and CO 559 August 6, 2018 at 10:00 am NAME AFFILIATION Testify (ves or no) ►.UVA7M Crcp1pm E:rl6g0,%/ Rn YES CDP, S-rEcRAUNI�k !3P YES /r -,4H IIP13L E 8P /V o mr,V-K Uo.�Jevcl 0 ,, 9 r ✓VD l z Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION Re: Docket Number: CO -18-016 The application of BP Exploration (Alaska) Inc. (BPXA) for amendments to Conservation Order No. 341F (CO 341 F), which governs the Prudhoe Oil Pool (POP), and Conservation Order No. 559 (CO 559), which governs the Put River Oil Pool (PROP). BPXA, by letter dated June 20, 2018, requests the Alaska Oil and Gas Conservation Commission (AOGCC) amend CO 341F and CO 559 to allow pool wide downhole commingling between the PROP and the POP. The AOGCC has tentatively scheduled a public hearing on this application for August 6, 2018, at 10:00 a.m. at 333 West 7`h Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on July 15, 2018. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after July 17, 2018. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7s' Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on July 31, 2018, except that, if a hearing is held, comments must be received no later than the conclusion of the August 6, 2018 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than July 31, 2018. Hollis S. French Chair, Commissioner Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -18-016 The application of BP Exploration (Alaska) Inc. (BPXA) for amendments to Conservation Order No. 341F (CO 341 F), which governs the Prudhoe Oil Pool (POP), and Conservation Order No. 559 (CO 559), which governs the Put River Oil Pool (PROP). BPXA, by letter dated June 20, 2018, requests the Alaska Oil and Gas Conservation Commission (AOGCC) amend CO 341F and CO 559 to allow pool wide downhole commingling between the PROP and the POP. The AOGCC has tentatively scheduled a public hearing on this application for August 6, 2018, at 10:00 a.m. at 333 West 71h Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on July 15, 2018. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after July 17, 2018. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7'h Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on July 31, 2018, except that, if a hearing is held, comments must be received no later than the conclusion of the August 6, 2018 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than July 31, 2018. //signature on file// Hollis S. French Chair, Commissioner Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Wednesday, June 27, 2018 9:29 AM To: Bell, Abby E (DOA); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody 1 (DOA); Cook, Guy D (DOA); Davies, Stephen F (DOA); Earl, Adam G (DOA); Erickson, Tamara K (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Laubenstein, Lou (DOA); Loepp, Victoria T (DOA); Martin, Teddy 1 (DOA); McLeod, Austin (DOA); Mcphee, Megan S (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Rixse, Melvin G (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity, AKDCWellIntegrityCoordinator; Alan Bailey; Alex Demarban; Alicia Showalter; Allen Huckabay; Andrew VanderJack; Ann Danielson; Anna Lewallen; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Ben Boettger; Bill Bredar; Bob Shavelson; Bonnie Bailey; Brandon Viator; Brian Havelock, Bruce Webb; Caleb Conrad; Candi English; Cody Gauer; Cody Terrell; Colleen Miller; Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Danielle Mercurio; Darci Horner, Dave Harbour, David Boelens; David Duffy; David House; David McCaleb; David Pascal; ddonkel@cfl.rr.com; Diemer, Kenneth 1 (DNR); DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Elwood Brehmer; Evan Osborne; Evans, John R (LDZX); Brown, Garrett A (DNR); George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Greg Kvokov, Gretchen Stoddard; gspfoff; Hurst, Rona D (DNR); Hyun, James 1 (DNR); Jacki Rose; Jason Brune; Jdarlington Qarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Shine; Jim Watt, Jim White Oim4thgn@gmail.com); Young, Jim P (DNR); Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); Jon Goltz; Joshua Stephen; Juanita Lovett; Judy Stanek; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Frank, Kevin 1 (DNR); Kruse, Rebecca D (DNR); Kyla Choquette, Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Luke Keller, Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Michael Bill; Michael Calkins; Michael Moora; Michael Quick; Michael Schoetz; Mike Morgan; MJ Loveland; Motteram, Luke A; Mueller, Marta R (DNR); Nathaniel Herz, knelson@petroleumnews.com; Nichole Saunders; Nick Ostrovsky; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Renan Yanish; Richard Cool; Robert Brelsford; Robert Tirpack; Robert Warthen; Ryan Gross; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly, Sharon Yarawsky; Skutca, Joseph E (DNR); Smith, Kyle S (DNR); Spuhler, Jes J (DNR); Stephanie Klemmer; Stephen Hennigan; Stephen Ratcliff; Sternicki, Oliver R, Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Tanisha Gleason; Ted Kramer, Teresa Imm; Terry Caetano; Tim Mayers; Todd Durkee; Tom Maloney; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vern Johnson; Vinnie Catalano; Well Integrity; Well Integrity; Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andy Bond; Bajsarowicz, Caroline J; Bruce Williams; Casey Sullivan; Corey Munk, Don Shaw, Eppie Hogan; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Heusser, Heather A (DNR); Fair, Holly S (DNR); Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Keith Lopez, Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Matt Armstrong; Melonnie Amundson; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Rachel Davis, Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Scott Pins; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); William Van Dyke; Zachary Shulman Subject: Public Notices Attachments: CO 18-015 Public Hearing Notice.pdf; CO 18-016 Public Hearing Notice.pdf Please see attached. Re: Docket Number: CO -18-015 The application of Hilcorp Alaska, LLC (Hilcorp) for an order in accordance with 20 AAC 25.215 authorizing the downhole commingling of production in the wellbore of the Swanson River Unit 14-15 (SRU 14-15) well. Re: Docket Number: CO -18-016 The application of BP Exploration (Alaska) Inc. (BPXA) for amendments to Conservation Order No. 341F (CO 341F), which governs the Prudhoe Oil Pool (POP), and Conservation Order No. 559 (CO 559), which governs the Put River Oil Pool (PROP). Jody J. CoCombie AOGCC Specia(Assistant 'Kaska OiCandGas Conservation Commission 333 west 7`F .avenue .anchorage, Alaska 995o1 Office: (907) 793-1221 Fax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient (5). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv.colombie@alaska.aov. Bernie Karl Gordon Severson Penny Vadla K&K Recycling Inc. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 58055 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Fairbanks, AK 99711 George Vaught, Jr. Darwin Waldsmith Richard Wagner P.O. Box 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639 Fairbanks, AK 99706 STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO, CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENT. ADVERTISING ORDER NUMBER AO-18-010 FROM: Alaska Oil and Gas Conservation Commission AGENCY CONTACT: Jody Colombie/Samantha Carlisle DATE OF A.O.AGENCY 6/27/2018 PHONE: (907) 279-1433 333 West 7th Avenue Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907) 276-7542 TO PUBLISHER: Anchorage Daily News SPECIAL INSTRUCTIONS: 300 W. 31 st Ave. Anchorage, Alaska 99503 TYPE OF ADVERTISEMF,NT; I LEGAL: DISPLAY CLASSIFIED OTHER (Specify below) DESCRIPTION rltu s CO-18-016 Initials of who prepared AO: Alaska Non -Taxable 92-600185 3UBMIr.IN.O..... HOW....dDVERtL4A`G: ' ::::ORDERNO.; CERTIFIEDAFFIDAYRQE: : ..,.LICA........................... ::PUBLI¢ATIDN�WTFH:A3dACi®COPY.OF:: .. ILLI. ... ........... . xnVE. ........ 0 Department of Administration Division of AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 Pae 1 of 1 Total of All Pa es $ REF Type Number Amount Dare Comments 1 PvN ADN89311 2 Ao AO.18-018 3 4 FIN AMOU, SY Act Template PGM LGR 06'ert FY DIST LIQ 1 18 A14100 3046 18 2 3 4 5 r Purchasing Authuriry\amm rl', i e: 1 Purchasing Authority's Signature Telephone Number 1, A.O. #�arrTreceiv:ng agency name m st hear on all invoices and documents relating to Nis purchase. 2. The state is reQstered for tax free transactions under Chapter 32, IRS code. Registration number 92-73-0006 K. Items are for the exclusive use of the state and not for resale. Division-Fiscal/Orlginat:il0 .' ,... ILLI. ILLI. ILLI :Copieslisherfazerl), Dr'vasion T�Yscal, iteceiving Form: 02-901 Revised: 6/27/2018 ANCHORAGE RUIN NEMS RECEIVED AFFIDAVIT OF PUBLICATION Account#: 270227 ST OFAK/AK OILAND GAS Order# 23850 $20044.. Cost $220 CONSERVATION COMMISSION 333 WEST 7TH AVE STE 100 nkirunaer-r nuoosnigsao STATE OF ALASKA THIRD JUDICIAL DISTRICT Joleesa Stepetin being first duly sworn on oath deposes and says that he/she is a representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on June 28, 2018 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. 1 Signed Jol a Stenetin Subscribed and sworn to before me this 28th day of June, 2018 Notary Pu k in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSIOrEXPIRES C�9 i JUL 06 2018 AOGCC Product ANC -Anchorage Daily News Placement 0300 Position 0301 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -18-016 The application of BP Exploration (Alaska) Inc. (BPXA) for amendments to Conservation Order No. 341F (CO 341F), which kovernthe Prudhoe Oil Pool (POP), and Conservation Order 0.59S 5(CO 559), which governs the Put River Oil Pool (PROP). 8PXA, by letter dated June 20, 2018, requests the Alaska Oil and Gas Conservation Commission (AOGCC) amend CO 341F and CO 559 t0 allow POR pool wide downhole commingling between the PROP and the The AOGCC has tentatively scheduled a public hearin on this application for August 6, 2018, at 10:00 a.m. at 333 West 7 Avenue AnchoraKKe, Alaska 99501. To request that the tentatively scheduled hearing be held a written request must be filed with the AOGCC no later than 4:30 P.M. on July 15, 2018. If a request for a hearing is not timely filed, the AOGCC me consider the issuance of an order without a hearinfg. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after 1-uly 17, 2018. If, because of a disability, special accommodations may be needed to comment or attend the hearincontact the AOGCGs 5 cial Assistant, Jody Colombia, at (907) 793-1221, no later than July 31, 2018. Published: June 28, 2018 ( Notary Public r 171 BRITNE'f L. THOMPSON State of Alaska My Commission Expires fab 23019, //signature on file// Hollis S. French Chair, Commissioner 1 BP Exploration (Alaska), Inc. 900 East Benson Boulevard Post Office Box 196612 Anchorage, Alaska 99519-6612 Telephone (907) 564 581 June 20, 2018 ***01. :,,ter by t'�'@EGOV EL Mr. Hollis French, Chair 2 2 2018 Alaska Oil and Gas Conservation Commission SUN 333 West 7s' Avenue, Suite 100 Anchorage, AK 99501 A0GC G RE: Application for Administrative Approval to amend Conservation Orders 341 F and 559 to authorize Down -hole Commingling of Production from Put River and Prudhoe Oil Pools Dear Chair French, BP Exploration (Alaska) Inc. (BPXA), as the Operator of the Prudhoe Bay Unit which includes the Put River Oil Pool (PROP) and the Prudhoe Oil Pool (POP), respectfully requests that the commission administratively approve amendments to Conservation Orders CO 341F and CO 559 for down -hole commingling of production from the PROP and POP. BPXA respectfully submits that commingling of production from the PROP and POP will promote the conservation of oil and gas resources in the PROP and POP and not cause waste, and that such production can be appropriately allocated. The information that follows is provided to support this application. If the commission has questions or desires more information please contact Bill Bredar at 564- 5348, william.bredar@bp.com. Sincerely, Diane Rirel i4orl Alaska Reservoir Development, BPXA 564-4212 cc: Mr. Eric Reinbold, ConocoPhillips Alaska, Inc. Mr. Hank Jamieson, ExxonMobil Alaska, Production Inc. Mr. Jeffery Farr, ExxonMobil Alaska, Production Inc. Mr. Dave White, Chevron USA Application for Administrative Approval June 20, 2018 Amendment of COs 341F and 559 Additional Information in Support of Application Introduction Commingling of production within the same well -bore from two pools is permitted under 20 AAC 25.215(b) if the Commission, after notice and opportunity for public hearing, "(1) finds that waste will not occur, and that production from separate pools can be properly allocated; and (2) issues an order providing for commingling for wells completed from these pools within the field." Waste Will Not Occur 1. Production Considerations Appraisal activities of the PROP in 2005 identified the presence of oil and gas condensate in the Western and Central Lobes of the PROP. Further development of these lobes of the PROP was not pursued at that time in part due to low flow rates that resulted in significant operational challenges and associated down-time due to hydrate deposition. Several wells exist that penetrate and could be completed in both the PROP and the POP. By commingling production from the two pools within the same well -bore, the fluid rate and velocity in the tubing can be increased, resulting in higher flowing wellhead temperatures and reduced production problems associated with hydrate formation. Consequently, commingling of production from the PROP and POP within the same well -bore will not cause waste, but rather will allow for recovery of a greater quantity of oil and gas condensate from the PROP. Application for Administrative Approval Amendment of COs 341F and 559 2. Cross flow June 20, 2018 Based on the reservoir fluids in the PROP and POP, fluid incompatibility and formation damage due to commingling and crossflow is not expected. If changes to produced fluid compositions or ratios result in potential fluid incompatibility, chemical inhibition to prevent productivity degradation would be evaluated. Crossflow associated with short term shut in periods under typical operations are not anticipated to result in significant volume flowing between pools or to adversely impact reservoir management. Crossflow of significant volume between pools in commingled wells that experience extended shut in periods could be prevented through mechanical isolation of the pools. Appropriate Surveillance and Production Allocation Will Be Assured Appropriate surveillance and production allocation measures will be undertaken to meet reservoir management objectives and to provide an acceptable allocation methodology. 1. Production Allocation Representative fluid samples will be obtained from both pools to verify that geochemical (GC) analysis will allow for metering of pool oil, water and gas to within allocation quality accuracy. Following commingling, GC analysis will be completed on the commingled production and compared with production logs or differential well tests within 6 -months of production. GC analysis will be completed semi-annually and production logs or differential well tests will be repeated as necessary to assess production anomalies. 2. Reservoir Surveillance Reservoir pressure of the PROP can be measured with the use of down -hole plugs and pressure gauges. Reservoir pressure measurement of the POP would be limited to wells without commingled PROP production however the large number of wells completed in only POP near anticipated PROPTOP commingling will continue to enable effective monitoring of POP reservoir pressure for reservoir management. Application for Administrative Approval Amendment of COs 341F and 559 Conclusion June 20, 2018 BP requests approval for wellbore commingling of production from the Put River Oil Pool (PROP) and the Prudhoe Oil Pool (POP). There are several potential wells in which we are considering comingling the PROP with the existing Ivishak production. Because of the number of opportunities, we request approval of an amendment to the PROP CO 559 authorizing pool -wide commingling with the Prudhoe Oil Pool. BPXA respectfully submits that this activity will not cause waste, will promote conservation through greater ultimate recovery of oil and gas resources by allowing increased recovery from the PROP. Produced liquids and gas from the separate pools can be properly allocated based on the production allocation procedure in the proposed amendments below. Proposed Amendments to Conservation Orders Note: Use of[ ]'s denotes the deletion of existing order text. Use of underline denotes proposed new text. Amendment to Prudhoe Oil Pool CO 341F Rule 18 Commingling of Production in the Same Wellbore [(Source: CO 341E.005)] Commingling production from the Aurora Oil Pool in Well S-26 or Put River Oil Pool [and] with the Prudhoe Oil Pool [in Well S-26] is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: (a) Prior to commingling production [in Well S-26,] a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Aurora or Put River Oil Pool (in isolation from the Prudhoe Oil Pool). (b) For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling and analysis must occur at least twice per year and not less frequently than once every seven months. (c) A [P]production log[s] or differential well test must be obtained and compared to the geochemical and regular well test results within the first [two months and again] six months after commingled production starts. Thereafter, production logs or [isolated] differential well tests of each pool must be obtained when major changes in Application for Administrative Approval Amendment of COs 341F and 559 June 20, 2018 production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. (d) In addition to the other requirements of Rule 4 of CO 457B and CO 559, the monthly reports required by Rule 4(e) of CO 457B and Rule 4(f) of CO 559 must identify [the Well S-26] production allocated to the Aurora Oil Pool or Put River Oil Pool and the Prudhoe Oil Pool for commingled wells. (e) The volumes reported on Form 10-405-i.e., in accordance with 20 AAC 25.230(b) must identify [the Well S-26] commingled production allocated to the Aurora Oil Pool or Put River Oil Pool and the Prudhoe Oil Pool. (f) A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Aurora or Put River and the Prudhoe Oil Pools, along with the analyses of the geochemical tests, production logs, and regular well tests. Amendment to Put River Oil Pool CO 559 Rule 12 Commingling of Production in the Same Wellbore Commingling production from the Put River Oil Pool with the Prudhoe Oil Pool is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: (a) Prior to commingling production, a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Put River Oil Pool (in isolation from the Prudhoe Oil Pool . (b) For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling and analysis must occur at least twice per year and not less frequently than once every seven months. (c) A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. (d) In addition to the other requirements of Rule 4 of CO 559, the monthly reports required by Rule 4(f) of CO 559 must identify production allocated to the Put River Oil Pool and the Prudhoe Oil Pool for commingled wells. (e) The volumes reported on Form 10-405-i.e., in accordance with 20 AAC 25.230(bl must identify commingled production allocated to the Put River Oil Pool and the Prudhoe Oil Pool. Application for Administrative Approval Amendment of COs 341F and 559 June 20, 2018 (f) A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Put River and Prudhoe Oil Pools along with the analyses of the geochemical tests, production logs, and regular well tests. Rule [12]13 Administrative Action Unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any rule stated above or administratively amend any rule, including the "Sundry Matrix" referred to in Rule 8, as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater.