The URL can be used to link to this page

Home My WebLink AboutCO 341 HCONSERVATION ORDER 341H Docket Number: CO -18-025 Prudhoe Bay Field Prudhoe Bay Unit Prudhoe Bay Oil Pool North Slope Borough, Alaska 1. August 22, 2018 BPXA's request for Administrative Approval to Commingle Production from Lisburne Oil Pool (CO207B) and Prudhoe Oil Pool (CO 341F) in Prudhoe Bay Unit well L5-21 2. November 18, 2018 Notice of hearing, affidavit of publication, email distribution, mailings 3. March 29, 2019 Administrative Approval for a waiver of neutron logging requirement for well G -02C (CO 341H.001) 4. November 15, 2019 Admin Approval contracting and redefining the Put River Area and request for GOR (CO 34114.002) STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7"' Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF BP ) Conservation Order No. 3 4 1 H EXPLORATION (ALASKA) INC. ) Docket Number: CO -18-025 for an order to allow downhole ) commingling in Well PBU L5-21 ) Prudhoe Bay Field between the Lisburne and Prudhoe ) Prudhoe Oil Pool Oil Pools ) April 22, 2019 IT APPEARING THAT: By letter dated August 22, 2018, BP Exploration (Alaska), Inc. (BPXA), operator of the Prudhoe Bay Unit, applied for amendments to Conservation Orders (CO) 341G1 and 207B to allow commingled downhole production between the Prudhoe Oil Pool (POP) and the Lisburne Oil Pool (LOP) in well PBU L5-21 (L5-21) (PTD 187-057). Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) scheduled a public hearing for December 19, 2018. On November 16, 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 November 18, 2018, the notice was published in the Anchorage Daily News. 3. No comments or requests to hold the hearing were received by the AOGCC. 4. BPXA provided sufficient information in its application to make a decision, so the proposed hearing was vacated. FINDINGS: 1. Prudhoe Oil Pool The POP, in production since 1977, consists of a immense oil rim overlain by a massive gas cap. The POP has numerous enhanced recovery projects underway. POP wells are typically very productive due to the high-quality reservoir rocks within the pool. 2. Lisburne Oil Pool The LOP, described in CO 207 and in production since 1982, is a complex carbonate reservoir that underlies the POP. 3. Proposed Commineline Operation 'The application actually requested an amendment to CO 341F, but CO 341 G was issued after the application was received. Conservation Order 341H April 22, 2019 Page 3 of 10 The L5-21 well is completed in the LOP and has produced approximately 1.8 million barrels of oil since being brought on production in October 1987. The L5-21 well intersects the POP in an area that contains liquids -rich gas. Commingling of production will have two benefits. First, gas from the POP will act as an in-situ gas lift for oil production from the LOP and thus improve ultimate recovery from the LOP. Second, targeting small, liquids -rich gas accumulations that have not been swept during years of lean gas re-injection into the POP gas cap has proven a successful means to increase ultimate recovery from the POP. These unswept gas accumulations are typically not large enough to warrant drilling of dedicated wells, but they are targets of opportunity when identified in existing wellbores. 4. Potential for Crossflow There is potential for crossflow between the POP and the LOP if L5-21 is shut in. For a short duration shut in period, crossflow is not expected to be significant as the POP and LOP have similar reservoir pressures within this portion of the Prudhoe Bay Field. In the event of a longer duration shut in period, the POP and LOP could be mechanically isolated downhole via through -wellbore cementing techniques to prevent crossflow. 5. Production Allocation Since the L5-21 well is completed in the oil rim of the LOP and the gas cap of the POP BPXA proposes allocating 100% of the oil and water production from the well to the LOP and 100% of the NGL production to the POP. Gas production will be allocated to the LOP based on the oil rate times the solution gas -oil -ratio of the LOP, with the remainder of the gas produced from the well allocated to the POP. Proposed gas allocation formulas are: Prudhoe Formation Gas Rate = Total Gas Rate — Lisburne Formation Gas Rate Lisburne Formation Gas Rate = allocated oil rate x Lisburne Oil Pool Solution Gas Oil Ratio Lisburne Oil Pool Solution Gas Oil Ratio = 863 scVstbo Production logs could be run if necessary. CONCLUSIONS: 1. Downhole commingling of production between the POP and LOP will improve resource recovery from the Prudhoe Bay Unit by encouraging production of resources within the POP that would not be recoverable as a standalone development and by improving recovery from the existing LOP completion of L5-21. 2. Crossflow between the POP and LOP is not expected to be significant due to similar reservoir pressures in this portion of the Prudhoe Bay Field. 3. BPXA's proposed allocation methodology will provide acceptable results. NOW, THEREFORE, IT IS ORDERED THAT: The following rules, in addition to the statewide requirements under 20 AAC 25 (to the Conservation Order 341H April 22, 2019 Page 4 of 10 extent not superseded by these rules), govern development in the affected area described below: Affected Area: Umiat Meridian 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: T1 IN R14E: Sections: 1, 2, 11(N/2 and SEA), 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. Ra>gz SafionR12E 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 F 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 R16E 5, 6, 7, 8, 17, 18, 19, 20, 29, 30, 31 R11E 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 15, 24, 25 ME All 163E All T11N R14E All TI IN R15E All TI 1N 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. 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: T1 IN R14E: Sections: 1, 2, 11(N/2 and SEA), 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. Conservation Order 341H April 22, 2019 Page 5 of 10 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. 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 Eauipment (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. 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 8,800 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. Conservation Order 341 H April 22, 2019 Page 6 of 10 (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. Rule 7 Gas -Oil Contact Monitorine (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 CO 341F) 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. The phrase "annual average offtake rates" means 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 Flarine (Revoked CO 341C) Rule 11 Annual Surveillance Renortine 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). Conservation Order 341 H April 22, 2019 Page 7 of 10 Analysis of reservoir pressure surveys within the field. 4. Results and where appropriate, analysis of production logging surveys, tracer surveys and observation well surveys. 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 "Aimlication for Sundry Annroval" 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 Conservation Order 341H April 22, 2019 Page 8 of 10 Requirements for Pools Subject to Sundry Waiver Rules" matrix maintained by the AOGCC Rule 15 Waterfloodin¢ 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. 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, 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, 341A, 34113, 341C, 341D, 341E, 341F, and 341G 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 Can 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 Commineline of Production in the Same Wellbore (Revised: CO 341F.001, CO 341G, 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: L 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 Conservation Order 341H April 22, 2019 Page 9 of 10 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. 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. (c) Downhole commingling of production between the POP and LOP in the PBU LS -21 well is approved subject to the following allocation methodology; i. All oil and water allocated to the well shall be allocated to the LOP, ii. All NGLs allocated to the well shall be allocated to the POP, iii. Gas shall be allocated to the POP and LOP based on the following formulas; 1. Prudhoe Formation Gas Rate = Total Gas Rate – Lisburne Formation Gas Rate 2. Lisburne Formation Gas Rate = allocated oil rate x Lisburne Oil Pool Solution Gas Oil Ratio 3. Lisburne Oil Pool Solution Gas Oil Ratio = 863 scf/stbo 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. Conservation Order 341H April 22, 2019 Page 10 of 10 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. DONE at Anchorage, Alaska April 22, 2019. Daniel T. Seamount, Jr. J sie L. Chmielowski Commissioner a6mmissioner NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 71' Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF BP ) Conservation Order No. 341 H EXPLORATION (ALASKA) INC. ) Docket Number: CO -18-025 for an order to allow downhole ) commingling in Well PBU L5-21 ) Prudhoe Bay Field between the Lisburne and Prudhoe ) Prudhoe Oil Pool Oil Pools ) April 22, 2019 IT APPEARING THAT: 1. By letter dated August 22, 2018, BP Exploration (Alaska), Inc. (BPXA), operator of the Prudhoe Bay Unit, applied for amendments to Conservation Orders (CO) 341GI and 207B to allow commingled downhole production between the Prudhoe Oil Pool (POP) and the Lisburne Oil Pool (LOP) in well PBU L5-21 (L5-21) (PTD 187-057). 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) scheduled a public hearing for December 19, 2018. On November 16, 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 November 18, 2018, the notice was published in the Anchorage Daily News. 3. No comments or requests to hold the hearing were received by the AOGCC. 4. BPXA provided sufficient information in its application to make a decision, so the proposed hearing was vacated. FINDINGS: 1. Prudhoe Oil Pool The POP, in production since 1977, consists of a immense oil rim overlain by a massive gas cap. The POP has numerous enhanced recovery projects underway. POP wells are typically very productive due to the high-quality reservoir rocks within the pool. 2. Lisburne Oil Pool The LOP, described in CO 207 and in production since 1982, is a complex carbonate reservoir that underlies the POP. 3. Proposed Commineline Operation 'The application actually requested an amendment to CO 341F, but CO 341G was issued after the application was received. Conservation Order 341 H April 22, 2019 Page 3 of 10 The L5-21 well is completed in the LOP and has produced approximately 1.8 million barrels of oil since being brought on production in October 1987. The L5-21 well intersects the POP in an area that contains liquids -rich gas. Commingling of production will have two benefits. First, gas from the POP will act as an in-situ gas lift for oil production from the LOP and thus improve ultimate recovery from the LOP. Second, targeting small, liquids -rich gas accumulations that have not been swept during years of lean gas re-injection into the POP gas cap has proven a successful means to increase ultimate recovery from the POP. These unswept gas accumulations are typically not large enough to warrant drilling of dedicated wells, but they are targets of opportunity when identified in existing wellbores. 4. Potential for Crossflow There is potential for crossflow between the POP and the LOP if L5-21 is shut in. For a short duration shut in period, crossflow is not expected to be significant as the POP and LOP have similar reservoir pressures within this portion of the Prudhoe Bay Field. In the event of a longer duration shut in period, the POP and LOP could be mechanically isolated downhole via through -wellbore cementing techniques to prevent crossflow. 5. Production Allocation Since the L5-21 well is completed in the oil rim of the LOP and the gas cap of the POP BPXA proposes allocating 100% of the oil and water production from the well to the LOP and 100% of the NGL production to the POP. Gas production will be allocated to the LOP based on the oil rate times the solution gas -oil -ratio of the LOP, with the remainder of the gas produced from the well allocated to the POP. Proposed gas allocation formulas are: Prudhoe Formation Gas Rate = Total Gas Rate — Lisburne Formation Gas Rate Lisburne Formation Gas Rate = allocated oil rate x Lisburne Oil Pool Solution Gas Oil Ratio Lisburne Oil Pool Solution Gas Oil Ratio = 863 scflstbo Production logs could be run if necessary. CONCLUSIONS: 1. Downhole commingling of production between the POP and LOP will improve resource recovery from the Prudhoe Bay Unit by encouraging production of resources within the POP that would not be recoverable as a standalone development and by improving recovery from the existing LOP completion of L5-21. 2. Crossflow between the POP and LOP is not expected to be significant due to similar reservoir pressures in this portion of the Prudhoe Bay Field. 3. BPXA's proposed allocation methodology will provide acceptable results. NOW, THEREFORE, IT IS ORDERED THAT: The following rules, in addition to the statewide requirements under 20 AAC 25 (to the Conservation Order 341H April 22, 2019 Page 4 of 10 extent not superseded by these rules), govern development in the affected area described below: Affected Area: Umiat Meridian Towmlrip R W Salm TION ___TI R12E 1, 2, 3, 4, 10, 11, 12 ON R13E 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 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 T10N. R16E 5, 6, 7, 8, 17, 18, 19, 20, 29, 30, 31 T11N W1 IE 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 15, 24, 25 T11N R12E All T11N R13E All TI1N R14E All T11N R15E All Tl 1N 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 RISE 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 IN R15E: Sections: 6, 7, 8, 17, 18, 19, 20, 29(N/2), 30(N/2) T12N R14E: Sections 35, 36 Umiat Meridian. Conservation Order 341H April 22, 2019 Page 5 of 10 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. 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. 341M Rule 5 Automatic Shut-in Equipment (Revoked Other Order 66) (a) An Annual Pressure Surveillance Plan shall be submitted to the AOGCC in conjunction with the Annual Prudhoe Pool Reservoir Surveillance Report by April I 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. 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 8,800 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. Conservation Order 341 H April 22, 2019 Page 6 of 10 (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. 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 CO 341F) 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. The phrase "annual average offtake rates" means 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). Conservation Order 341H April 22, 2019 Page 7 of 10 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. 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 (I) 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 Conservation Order 341 H April 22, 2019 Page 8 of 10 Requirements for Pools Subject to Sundry Waiver Rules" matrix maintained by the AOGCC Rule 15 Waterflooding 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. 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, 341F, and 341G 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 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 Comminelina of Production in the Same Wellbore (Revised: CO 341F.001, CO 341G, 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 Conservation Order 341H April 22, 2019 Page 9 of 10 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. 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. (c) Downhole commingling of production between the POP and LOP in the PBU L5-21 well is approved subject to the following allocation methodology; i. All oil and water allocated to the well shall be allocated to the LOP, ii. All NGLs allocated to the well shall be allocated to the POP, iii. Gas shall be allocated to the POP and LOP based on the following formulas; 1. Prudhoe Formation Gas Rate = Total Gas Rate — Lisburne Formation Gas Rate 2. Lisburne Formation Gas Rate = allocated oil rate x Lisburne Oil Pool Solution Gas Oil Ratio 3. Lisburne Oil Pool Solution Gas Oil Ratio = 863 scflstbo 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. Conservation Order 341 H April 22, 2019 Page 10 of 10 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. DONE at Anchorage, Alaska April 22, 2019. //signature on file// Daniel T. Seamount, Jr. Commissioner //signature on file// Jessie L. Chmielowski 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 maybe 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 mus until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Bernie Karl M Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 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 THE STATE °fALASKA GOVERNOR MIKE DUNLEAVY ADMINISTRATIVE APPROVAL CONSERVATION ORDER NO. 341H.001 Ms. Diane Richmond Reservoir Development Performance Team Leader BP Exploration (Alaska) Inc. P.O. Box 196612 Anchorage, AK 99519-6612 Re: Docket Number: CO- 18-010 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaslko.gov Request for Administrative Waiver of Neutron Logging Requirement for Well Prudhoe Bay Unit G -02C (PTD 215-064) Prudhoe Bay Unit Prudhoe Oil Pool Dear Ms. Richmond: By letter dated March 29, 2018, BP Exploration (Alaska) Inc. (BPXA) requested a retroactive administrative waiver of the requirement of Rule 7(a) of Conservation Order (CO) No. 341 F. This rule was in effect at the time well PBU G -02C was drilled, and it required an open- or cased -hole neutron log to be run --in certain portions of the pool --on newly drilled wells prior to sustained production for the purpose of gas -oil contact (GOC) monitoring in the Prudhoe Oil Pool (POP). This request is APPROVED. Permit to Drill (PTD) 215-064, issued April 27, 2015, authorized drilling of PBU G -02C. The well was spudded in May 2015 and put on production in October 2015. BPXA ran a neutron log upon completion of the well. However, this log only acquired usable data to the depth where the sidetrack window was milled, but not over the newly drilled reservoir section that contains the GOC. At the time the well was drilled, the supervising geologist determined that the GOC in that portion of the pool was adequately defined by the nearby penetrations and that another neutron log run was not necessary. This decision conflicted with the pool rules in place at the time. Performance of the well over the intervening years demonstrates that the geologist's assumption regarding the GOC position was correct. After PBU G -02C was drilled, pool rules for the POP were modified and the neutron logging requirement of Rule 7(a) was eliminated since GOC movement within the reservoir is now very well understood. Recording of a neutron log in every new well is no longer necessary for proper reservoir management. A successful neutron log in PBU G -02C would not have added significantly to the engineering or geologic knowledge for this area. Now therefore it is ordered that the neutron logging requirements of Rule 7(a) of CO 341 F for the PBU G - 02C well are hereby waived. CO 341 H.001 June 11, 2019 Page 2 of 2 DONE at Anchorage, Alaska and dated June 11, 2019. Daniel T. Seamount, Jr. Commissioner J ie L. Chmielowski mmissioner 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 aperiod of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. THE STATE ALASKA GOVERNOR MIC 14 Ad I I IIUNLEAVY ADMINISTRATIVE APPROVAL CONSERVATION ORDER NO. 341 H.001 Ms. Diane Richmond Reservoir Development Performance Team Leader BP Exploration (Alaska) Inc. P.O. Box 196612 Anchorage, AK 99519-6612 Re: Docket Number: CO- 18-010 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.00gcc.alaska.gov Request for Administrative Waiver of Neutron Logging Requirement for Well Prudhoe Bay Unit G -02C (PTD 215-064) Prudhoe Bay Unit Prudhoe Oil Pool Dear Ms. Richmond: By letter dated March 29, 2018, BP Exploration (Alaska) Inc. (BPXA) requested a retroactive administrative waiver of the requirement of Rule 7(a) of Conservation Order (CO) No. 341 F. This rule was in effect at the time well PBU G -02C was drilled, and it required an open- or cased -hole neutron log to be run --in certain portions of the pool --on newly drilled wells prior to sustained production for the purpose of gas -oil contact (GOC) monitoring in the Prudhoe Oil Pool (POP). This request is APPROVED. Permit to Drill (PTD) 215-064, issued April 27, 2015, authorized drilling of PBU G -02C. The well was spudded in May 2015 and put on production in October 2015. BPXA ran a neutron log upon completion of the well. However, this log only acquired usable data to the depth where the sidetrack window was milled, but not over the newly drilled reservoir section that contains the GOC. At the time the well was drilled, the supervising geologist determined that the GOC in that portion of the pool was adequately defined by the nearby penetrations and that another neutron log run was not necessary. This decision conflicted with the pool rules in place at the time. Performance of the well over the intervening years demonstrates that the geologist's assumption regarding the GOC position was correct. After PBU G -02C was drilled, pool rules for the POP were modified and the neutron logging requirement of Rule 7(a) was eliminated since GOC movement within the reservoir is now very well understood. Recording of a neutron log in every new well is no longer necessary for proper reservoir management. A successful neutron log in PBU G -02C would not have added significantly to the engineering or geologic knowledge for this area. Now therefore it is ordered that the neutron logging requirements of Rule 7(a) of CO 341 F for the PBU G - 02C well are hereby waived. CO 341H.001 June 11, 2019 Page 2 of 2 DONE at Anchorage, Alaska and dated June 11, 2019. //signature on file// Daniel T. Seamount, Jr. Commissioner //signature on file// Jessie L. Chmielowski Commissioner As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. THE STATE ALASKA GOVERNOR MIKE DUNLEAVY Ms. Katrina Garner Alaska Oil and Gas Conservation Commission ADMINISTRATIVE APPROVAL CONSERVATION ORDER NO. 559A.001 CONSERVATION ORDER NO. 34111.002 Area Manager, Alaska Reservoir Development Team BP Exploration (Alaska), Inc. P.O. Box 196612 Anchorage, AK 99519-6612 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 v .aogcc.aloska.gov Re: Docket Numbers: CO -19-019, CO -19-020, and CO -19-021 Request to contract and redefine the Put River Oil Pool, amend rule 18 of Conservation Order No. CO 341H, and grant gas oil ratio exemptions under 20 AAC 25.240(b)(3) to the Central and Western Lobes of the Put River Undefined Oil Pools Prudhoe Bay Unit Prudhoe Bay Field Prudhoe and Put River Oil Pools Dear Ms. Gardner: By letter dated November 15, 2019, BP Exploration (Alaska), Inc. (BPXA) requested three actions from the Alaska Oil and Gas Conservation Commission (AOGCC). First, to administratively amend conservation order (CO) 559A to contract the Put River Oil Pool (PROP) to the area encompassed by the Southern Lobe of the Put River sandstone. Second, to modify Rule 18 of CO 341H to ensure that the downhole commingling authorization that currently allows downhole commingling of any well in the PROP with the Prudhoe Oil Pool (POP) will continue to apply to wells completed within the currently established bounds of the PROP when the affected area of the PROP is contracted. Third, to grant a gas oil ratio exemption to wells completed in the Central and Western lobes of the Put River sandstone for the purposes of collecting data to develop a reservoir development strategy for those sands in accordance with 20 AAC 25.240(b)(3). BPXA's requests are hereby GRANTED. The PROP was defined by CO 559 on November 22, 2005, and included what were referred to as the Central, Southern, and Western lobes of the Put River sandstone within the pool even though the three lobes contained hydrocarbons with different properties and reservoir pressures that were vastly different. At the time the pool was defined the Central Lobe contained 31.2° API oil at 3,923 psi, the Southern Lobe contained 26.90 API oil at 2,710 psi, and the Western Lobe contained 57° API condensate at 4,173 psi. The Southern Lobe is the only portion of the PROP that has been CO 559A.001 and CO 341H.002 December 19, 2019 Page 2 of 6 on long term production and has an active water injection project for reservoir pressure maintenance and enhanced oil recovery (EOR). There have been recent attempts to produce from the Central and Western Lobes, but BPXA is still attempting to define to proper development method for these portions of the PROP. Due to the differing reservoir fluid properties and pressures, as well as the maturity of the methods of development for the three lobes it makes sense to treat them as separate pools instead of a single pool. Since the Southern Lobe is the most well- developed portion of the PROP, and has the ongoing injection activity, it makes sense to contract the affected area of the existing PROP to the limits of the Southern Lobe. Since development plans for the Central and Western Lobes are still being developed it is appropriate at this time to leave them as separate undefined pools. Contracting the affected area of CO 559A triggers the need to modify some of the rules in the order that addressed the three lobes separately so that the rules remain pertinent to the ongoing operations in the Southern Lobe. The rules that need to be amended are Rule 5 Reservoir Pressure Monitoring, which requires pressure surveys in each producing lobe on a yearly basis, Rule 6 Gas - Oil Ratio Exemption, which stated a gas oil ratio exemption for the Southern Lobe was not valid until water injection commenced and since water injection has been in place for years is no longer an appropriate rule, and Rule 7 Approved Depletion Plan, which stated water injection was approved for the three lobes and thus needs to be amended to remove the references to the lobes that will no longer be in the PROP. The downhole commingling on a pool wide basis for all production wells located in the PROP with the POP approved in CO 341G carried into CO 341H issued on April 22, 2019. Downhole commingling on a pool wide basis was allowed based on evaluation of the effects on downhole commingling for all three lobes in the PROP. However, once the PROP is contracted the language in Rule 18 downhole commingling would no longer be authorized for the Central and Western Lobes of the Put River sandstone. Modifying the language in Rule 18 is therefore necessary in order to keep downhole commingling authorized for wells located in the Central and Western Lobes. Due to the Central and Western Lobes of the Put River sandstone getting contracted out of the PROP, the gas oil ratio waiver based on the ongoing water injection project in the PROP will no longer be valid. The Central and Western Lobes of the Put River sandstone are currently in the early stage of development and the optimal development plan for these reservoirs has not been determined. In order to allow for collection of more reservoir performance data, and, eventually, optimal development plans for each lobe, a gas oil ratio waiver in accordance with 20 AAC 25.240(b)(3) is appropriate. Rule 13 of CO 559A allows the order to be amended administratively as long as the proposed changes will not promote waste or j eopardize correlative rights and are based on sound engineering and geoscience principles. Contracting the affected area of the PROP to the limits of the Southern Lobe of the Put River sandstone will not cause waste or jeopardize correlative rights and is based on sound engineering and geoscience principles. Rule 21 of CO 341H allows for the order to be amended administratively so long as the proposed changes will not promote waste or jeopardize correlative rights and is based on sound engineering and geoscience. Amending Rule 18 of CO 341H to allow wells currently approved for downhole commingling to remain eligible for CO 559A.001 and CO 341H.002 December 19,2019 Page 3 of 6 downhole commingling will not promote waste or jeopardize correlative rights and is based on sound engineering and geoscience principles. Therefore, both CO 559A and CO 341H can be administratively amended to adopt the proposed changes. NOW, THEREFORE, IT IS ORDERED THAT: The Affected Area of CO 559A is revised to read as follows: UMIAT MERIDIAN TI IN R14E Sections: 22(SE/4), 23(S/2), 24(S/2), 25, 26, 27, 28, 33, 34, 35, 36 TI IN R15E Sections: 29(S/2), 30(W/2 and SEA), 31, 32 TION R14E Sections: 1, 2, 3, 10(E/2), 11, 12, 13, 14 T10N R15E Sections: 4(W/2), 5, 6, 7, 8, 9(W/2), 16(NW/4), 17, 18 Rule 5 of CO 559A is revised to read as follows: Rule 5 Reservoir Pressure Monitoring (a) Prior to regular production or injection, an initial pressure survey must be taken in each well. (b) A minimum of one bottom -hole pressure survey within the Put River Oil Pool shall be run annually. The surveys required by part (a) of this rule may be used to fulfill the minimum requirements. (c) If six or more wells are active within a Lobe of the Put River Oil Pool, a second bottom - hole pressure survey shall be run annually. (d) The reservoir pressure datum will be 8100'ss. (e) Pressure surveys may be stabilized static pressure measurements at bottom -hole or extrapolated from surface (single phase fluid conditions), pressure fall-off, pressure buildup, multi -rate tests, drill stem tests, or open -hole formation tests. (f) Data and results from pressure surveys shall be submitted with the annual reservoir surveillance report. All data necessary for analysis of each survey need not be submitted with the report but must be available to the Commission upon request. (g) Results and data from special reservoir pressure monitoring tests shall also be submitted in accordance with part (f) of this rule. CO 559A.001 and CO 341H.002 December 19, 2019 Page 4 of 6 Rule 6 of CO 559A is revised to read as follows: Rule 6 Gas -Oil Ratio Exemption (a) Wells producing from the Put River Oil Pool area are exempt from the gas -oil -ratio limits of 20 AAC 25.240(a) so long as the requirements of 20 AAC 25.240(b) are met. (b) Notwithstanding (a) of this rule, pre -production of injectors forup to three weeks is allowed without regard to 20 AAC 25.240(a) and (b). Rule 7 of CO 559A is revised to read as follows: Rule 7 Approved Depletion Plan (a) Waterflood operations are approved within the Put River Oil Pool. (b) Commission approval is required prior to commencement of all other enhanced recovery operations. Rule 18 of CO 341H is revised to read as follows: Rule 18 Comminalin¢ of Production in the Same Wellbore (Revised: CO 341F.001, CO 341G, and this order) (a) Commingling production from the Aurora Oil Pool in Well S-26 or the affected area of the Put River Oil Pool, as that pool was defined CO 559A on December 13, 2018, (hereinafter referred to as the Put River Sands) 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 Sands (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. iv. The operator shall submit a review of pool production allocation factors and issues over the prior year with the annual reservoir CO 559A.001 and CO 34111.002 December 19, 2019 Page 5 of 6 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 Sands 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 Oil Pool or Put River Sands and the Prudhoe Oil Pool, 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 Sands and Prudhoe Oil Pool mechanically isolated to prevent crossflow between the pools. (c) Downhole commingling of production between the POP and LOP in the PBU L5-21 well is approved subject to the following allocation methodology; i. All oil and water allocated to the well shall be allocated to the LOP, ii. All NGLs allocated to the well shall be allocated to the POP, iii. Gas shall be allocated to the POP and LOP based on the following formulas; 1. Prudhoe Formation Gas Rate = Total Gas Rate – Lisburne Formation Gas Rate 2. Lisburne Formation Gas Rate = allocated oil rate x Lisburne Oil Pool Solution Gas Oil Ratio 3. Lisburne Oil Pool Solution Gas Oil Ratio = 863 scflstbo In accordance with 20 AAC 25.240(b)(3) the gas oil ratio limitations of 20 AAC 25.240(a) are hereby waived for wells producing from the Central and Western Lobes of the Put River sandstone as those Lobes were shown in the August 19, 2005, application from BPXA that led to the establishment of the Put River Oil Pool by CO 559 on November 22, 2005, to allow for the collection of reservoir performance data so that appropriate development scenarios for the Central and Western Lobes of the Put Rive sandstone can be developed. This waiver is subject to the following conditions: 1) This waiver is valid through December 315`, 2022. 2) Wells in the Central and Western Lobes of the Put River sandstone must be tested in accordance with the PBU's well testing and allocation procedures and be tested at least twice per month while flowing. CO 559A.001 and CO 341H.002 December 19, 2019 Page 6 of 6 3) On a quarterly basis, the operator must submit copies of all well tests for the Central and Western Lobes of the Put River sandstone showing the GOR at the time of the test. DONE at Anchorage, Alaska and dated December 19, 2019. Je 1e L. Chmielowski missioner AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to mn is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Bernie Karl K&K Recycling Inc. Gordon Severson Penny Vadla P.O. Box 58055 3201 Westmar Cir. 399 W. Riverview Ave. Fairbanks, AK 99711 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 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 El by 0 BP Exploration (Alaska) Inc 900 East Benscn Boulevard P 0. Boa 196612 Anchorage. 4laska 99519-6612 (907)561-5'11 November 15, 2019 ELECTRONICALLY DELIVERED and VIA MAIL Mr. Jeremy Price, Chair Alaska Oil and Gas Conservation Commission 333 West 7s' Ave, Suite 100 Anchorage, AK 99501 Re: Prudhoe Bay Unit Request for Administrative Approval to amend CO 559A contracting and redefining the Put River Oil Pool to the area encompassed by the Southern Lobe and designating the Western and Central Lobes as independent undefined pools Request for GOR waiver for the undefined Central and Western Lobes per 20 AAC 25.240(b)(3) Request to modify Rule 18 of CO 341H so that downhole commingling approval applies to both the defined PROP and the undefined Central and Western Lobes Dear Chair Price: BP Exploration Alaska (BPXA), as Operator of the Prudhoe Bay Unit, respectfully requests Administrative Action to amend CO 559A contracting and redefining the Put River Oil Pool to the area encompassed by the Southern Lobe and designating the Western and Central Lobes as independent undefined pools. Additionally, BPXA requests waiver of the gas -oil -limitations in 20 AAC 25.240 for the undefined Central and Western lobes in order to collect pool performance data. Lastly BPXA requests to modify Rule 18 of CO 341H so that downhole commingling approval applies to both the defined PROP and the undefined Central and Western Lobes. Context and History Conservation Order 559 (CO 559), dated November 22, 2005, states in Conclusion #4: "Each of the four sandstone Lobes comprising the PRS will require a unique depletion plan in order to obtain optimal recovery". This conclusion was in recognition of "pressure compartmentalization within and between the four sandstone Lobes comprising the PRS". Rule #7 in CO 559 approves waterflood operations within the Western and Southern Lobes of the Put River Oil Pool, and requires commission approval prior to commencement of all other enhanced recovery operations. For the bulk of the PROP's production history, a single depletion operation, waterflood, has been in effect in the Put River Oil Pool. RECEIVE NOV 18 2019 AOGCC Mr. Jeremy Price, Chair November 15, 2019 COs 559 and 341F were amended December 13, 2018 to CO 559A and CO 341G, allowing for commingled downhole production for wells in the Put River and Prudhoe Oil Pools. This order facilitated the initiation of commingled production on August 19, 2019 in well 15-41. This well has open perforations in both the Western and Central lobes, as well as the Ivishak. The Western lobe contains 57 degree gravity oil with a solution GOR of 24,650 scf/bbl, and the Central Lobe contains 31 degree gravity oil with a solution GOR of 485 scf/bbl. BPXA proposes, with the onset of production from the Western and Central Lobes, that optimal recovery from the pool is enhanced via defining the waterflood depletion operation underway in the Southern Lobe as applicable to that lobe alone. This action would align with meeting the "uniqueness" aspiration in CO 559. Under the current rule, and as recently experienced in September, 2019, an operational interruption in water injection supply to the sole injector in the pool, well 1-08Ai, located in the Southern Lobe, may precipitate a need to shut-in production for the entire pool, based on failure to meet 20 AAC 25.240 (b)(1). The recent interruption was temporary, and the commission rapidly gave permission to continue production; however, future Western and Central Lobes' production could be adversely impacted by being tied to the Southern Lobe's rule. BPXA expects definition of unique depletion plans for the Western and Central Lobes to be possible after adequate performance data have been collected, and estimates that will take up to two years from establishing regular production. While the optimal depletion plan for the Western Lobe is not yet defined, BPXA can project that it is unlikely that waterflood will be the optimal depletion plan for this lobe. The Central Lobe, which is a black oil accumulation, is also expected to require a unique depletion plan. A comprehensive solution that allows for all of the Put River Sandstone lobes' production at this time involves additional segregation. The Northern Lobe should remain separated from the PROP, as it is in communication with the Prudhoe Oil Pool. The Southern Lobe should be separated and comprise the defined portion of the PROP. The Western and Central Lobes should become independent and undefined oil pools. The type log for the PROP, designated in CO 559, still suffices for this request, as it represents the time interval deposition for the Southern Lobe. Mr. Jeremy Price, Chair November 15, 2019 Request Proposed Amendment to PROP Pool Rules Note: Use of f J's means delete existing order word(s). Use of underline denotes proposed new text. UMIAT MERIDIAN TI IN R14E Sections: [3, 4, 9, 10, 11(SW/4), 14(W/2), 15, 16, 21, 22,23(W/2 and SE/4)] 22(SE/4), 23(S/2), 24(S/2),25, 26, 27, 28, 33, 34, 35, 36 TIIN R15E Sections: 29(S/2), [30(S/2], 30(W/2 and SE/4), 31, 32 TION R14E Sections: 1, 2, 3, 10(E/2), 11, 12, 13, 14 TION R15E Sections: 4(W/2), 5, 6, 7, 8, 9(W/2), 16 W/4 , 17, 18 Rule 5 Reservoir Pressure Monitorin¢ (b) A minimum of one bottom -hole pressure survey [per producing lobe] within the Put River Oil Pool [Sandstone] shall be run annually. The surveys required by part (a) of this rule may be used to fulfill the minimum requirements. Rule 6 Gas -Oil Ratio Exemption [(b) For production within the Southern Lobe of the Put River Sandstone, except as allowed under (c) of this rule, the exemption from the gas -oil -ration limit is not effective until waterflood has been initiated and the Commission by administrative approval has authorized application of the exemption.] [c] (1b) Notwithstanding (a) [and b] of this rule, pre -production of injectors for up to three weeks is allowed without regard to 20 AAC 25.240(a) and (b). Rule 7 Approved Depletion Plan (a) Waterflood operations are approved within the [Western and Southern Lobes of the] Put River Oil Pool. Mr. Jeremy Price, Chair November 15, 2019 Any questions can be directed to Bill Bredar at 564-5348 or through email to William.Bredar@bp.com. Respectfully, p� Katrina Garner Area Manager Alaska Reservoir Development Team BP Exploration (Alaska) Inc. cc: Mr. Jon Schultz, ConocoPhillips Alaska, Inc. Mr. Jeff Farr, ExxonMobil Alaska, Production Inc. Mr. David White, Chevron USA Mr. Dave Roby, Alaska Oil and Gas Conservation Commission Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 3 by RECEIVED t APRApp 0 3 2018 BP Exploration (Alaska) Inc 900 East Benson Boulevard P 0 Box 196612 Anctrn Alaska 99519-6612 OGCC r!"1'�'t.J1 (90I) 561-5111 (907) 61-5 March 29, 2018 Mr. Hollis French, Chair Alaska Oil & Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 Re: Request for Waiver of Neutron Log in well G -02C Retroactive to June, 2015 Prudhoe Oil Pool, CO 341F, Rule 7 Dear Chair French: BP Exploration (Alaska) Inc. (BPXA) is sending this letter to self-report a recently discovered issue regarding our compliance with the neutron logging requirements of CO 341 F Rule 7 (as that rule was written in 2015). BPXA also self-reported this discovery by telephone on March 27th to Dave Roby. In the course of recent mapping of the gas oil contact (GOC) in the Prudhoe Oil Pool (POP), a BPXA petrophysicist discovered that we did not obtain a neutron log covering the GOC as required by Rule 7, as then in effect, in a sidetrack well drilled in June, 2015, in the POP gravity drainage depletion area. A neutron log was run in this well, but useable neutron data were only acquired to the depth where the sidetrack window was milled, and not over the newly drilled reservoir section and PGOC (Produced GOC). The well was subsequently placed on production. Our records indicate that at the time the well was drilled, the supervising geologist determined that local GOC information was sufficient from nearby control, and therefore another neutron log run was not necessary. Unfortunately, our staff did not recognize that Rule 7 required a neutron log covering the GOC. We respectfully submit that no waste of resource resulted from BPXA's failure to acquire the neutron data on this well. After being placed on production, the well has produced oil, corroborating the geologist's conclusion regarding regional PGOC control. Although BPXA staff all receive training for compliance with all AOGCC regulations, we are using this incident to reinforce and remind staff of these regulatory requirements. Mr. Hollis French, March 29, 2018, page 2 Rule 7 has recently been modified to not require a "blanket acquisition" of neutron logs on such wells, and we respectfully note that under the current Rule a neutron log would not have been required. BPXA respectfully requests that the commission grant a retroactive waiver to the former Rule 7 neutron log requirements as it applied to this well in June, 2015. Thank you for your consideration. If you have any questions please contact Bill Bredar at (907) 564-5348. William.bredar@bp.com Sincerely, BP EExploration (A ska) Inc. L;� Diane Richmond Cc: H. Jamieson, ExxonMobil Alaska, Production Inc. E. Reinbold, CPAI D. White, Chevron USA z Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -18-025 Prudhoe Bay Unit, Prudhoe and Lisburne Oil Pools The application of BP Exploration (Alaska) Inc (BPXA) for an order in accordance with 20 AAC 25.215 authorizing the downhole commingling of production in the wellbore of the Prudhoe Bay Unit L5-21 (PBU L5-21) well. BPXA, by letter dated August 22, 2018, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order in accordance with 20 AAC 25.215 to authorize the downhole commingling of production from the Prudhoe and Lisburne Oil Pools in the PBU L5-21 well. The AOGCC has tentatively scheduled a public hearing on this application for December 19, 2018, at 11:00 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 December 2, 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 December 4, 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 December 18, 2018, except that, if a hearing is held, comments must be received no later than the conclusion of the December 19, 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 December 17, 2018. Hollis S. French Chair, Commissioner Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -18-025 Prudhoe Bay Unit, Prudhoe and Lisburne Oil Pools The application of BP Exploration (Alaska) Inc (BPXA) for an order in accordance with 20 AAC 25.215 authorizing the downhole commingling of production in the wellbore of the Prudhoe Bay Unit L5-21 (PBU L5-21) well. BPXA, by letter dated August 22, 2018, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order in accordance with 20 AAC 25.215 to authorize the downhole commingling of production from the Prudhoe and Lisburne Oil Pools in the PBU L5-21 well. The AOGCC has tentatively scheduled a public hearing on this application for December 19, 2018, at 11:00 a.m. at 333 West 7 1 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 December 2, 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 December 4, 2018. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7'' Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on December 18, 2018, except that, if a hearing is held, comments must be received no later than the conclusion of the December 19, 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 December 17, 2018. //signature on file// Hollis S. French Chair, Commissioner STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OFADVERTISMENT. ADVERTISING ORDER NUMBER AO -19-015 FROM: AGENCY CONTACT: Jody Colombie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A.O. AGENCY PHONE: 333 West 7th Avenue 11/16/2018 (907) 279-1433 Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907)276-7542 TO PUBLISHER: Anchorage Daily News, LLC SPECIAL INSTRUCTIONS: PO Box 140147 Anchorage, Alaska 99514-0174 TYPE OF ADVERTISEMENT: )✓ LEGAL I"' DISPLAY W CLASSIFIED r OTHER (Specify below) DESCRIPTION PRICE CO -18-025 Initials of who prepared AO: Alaska Non -Taxable 92-600185 SD$MIT4NYOICE SHOWING .ADVERTISING :' ORDERNo) CERTIFIE.DAFFIDAVIIOP.<- PDButnnon:w COPY Oil 'AtiyERTUME..... AOGCC 333 West 7th Avenue Anchorage, Alaska 99.501 Pae 1 of 1 Total of All Pa es $ RFF Type Number Ammmt Date Comments 1 PVN VCO21795 2 AO AO -19-015 3 4 FIN AMOUNT SY Act. Template PGM LCR Object FV DIST LIQ 1 19 A14100 3046 19 2 3 4 5 Ptrcha g th Titl¢: Purchasing Authority's Signature Telephone Number 1. g agency ame mu on all invoices and documents relating to this purchase. 2e h slate is registered for tax free tmnsadion der Chapter 32, IRS code. Registration number 92-73-0006 K. Items are for the exlusive use of the state and not for re WOR BVTION DH^Isron Flsdal/Ongmal.AOCoplesPubldh@r ffaxedj:DrvLylon Fiscal Red eWmg:� Form: 02-901 Revised: 11/16/2018 Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 ANCHORAGE RXILY NEWS AFFIDAVIT OF PUBLICATION Account #: 270227 ST OF AK/AK OILAND GAS CONSERVATION COMMISSION 333 WEST 7TH AVE STE 100 Akirunaenc Av ooFn1'15ia STATE OF ALASKA THIRD JUDICIAL DISTRICT Sarah Jennett 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 November 18, 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 fore ng publication is not in excess of the rate cF ar d private individuals. Jennett ed and sworn to ore me day of Novemb , 2018 Notary Public in and for The State441aska. Third Division Anchorage, Alaska l iTAI I I Notary Public BRITNEYL.THOMPSON State of Alaska M7 Commission Expires Feb 23, 2019 Order# 0001430663 Cost $234.08 Product ADN -Anchorage Daily News Placement 0300 Position 0301 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -18-025 Prudhoe Bay Unit, Prudhoe and Lisburne Oil Pools The application Of BP Exploration (Alaska) Inc (BPXA) for an order in accordance with 20 AAC 25.215 authorizing the downhole commingling of production In the wellbore of the Prudhoe Bay Unit 1.5-21 (PBU 15-21) well. BPXA, by letter dated August 22, 2018, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order in accordance with 20 AAC 25.215 to authorize the downhole commingling of production from the Prudhoe and Lisburne Oil Pools in the PBU LS -21 well. The AOGCC has tentatively scheduled a public hearing on this application for December 19, 2018, at 11:00 a.m. at 333 west 7th Avenue, AnchoraSa, 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 December 2, 2018. If a request for a hearing is not timely fled, 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 December 4, 2018. In addition, written comments regarding this application may be submitted t0 the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on December 18, 2018, except that, if a hearing is held, comments must be received no later than the conclusion of the December 19, 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 December 17, 2018 //signature on file// Hollis S. French Chair, Commissioner 1 ZE August 22, 2018 Hollis French, Chair Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 BP Exploration (Alaska) Inc 900 East Benson Boulevard P O Box 196612 Anchorage, Alaska 99519-66'2 (907)561-5111 RECEIVED ED AUG 2 4 2018 A®GCi'C RE: Application for Administrative Approval to Commingle Production from Lisburne Oil Pool (CO 207B) and Prudhoe Oil Pool (CO 341 F) in Prudhoe Bay Unit well L5-21 Dear Chair French: BP Exploration (Alaska) Inc. (BPXA), as the Operator of the Prudhoe Bay Unit which includes the Lisburne Oil Pool (LOP) and the Prudhoe Oil Pool (POP), respectfully requests that the commission administratively approve commingling of production from the Lisburne Oil Pool and Prudhoe Oil Pool in well L5-21 which produces to the Lisburne Production Center (LPC). The commission previously approved downhole commingling of production of the POP and the LOP in the proposed K-322 well (CO 721). L5-21 is an existing well that produces exclusively from the Lisburne Wahoo Formation. Planned add-perfs into the Ivishak Oil Pool would be commingled with Lisburne Oil Pool fluids and produced up L5 -21's tubing to the LPC. Well integrity is not expected to be compromised with the addition of these perforations. L5-21 would be perforated in the Prudhoe Oil Pool to allow Prudhoe gas to serve as in-situ artificial lift for the Lisburne production and capture high liquid yield gas production from a part of the Ivishak Oil Pool that would not otherwise be produced. The proposed completion for L5-21 is shown in Exhibit A. Additional information in support of this application is included below. BPXA staff are available should you have any questions or need any additional information. If you need any additional information, please contact Bill Bredar at 564- 5348. Sincerely, Diane Richmond Attachment: Exhibit A - L5-21 Wellbore Schematic Cc: Mr. Eric Reinhold, ConocoPhillips Alaska, Inc. Mr. Doug Sturgis, ExxonMobil Alaska, Production Inc. Mr. Jeffery Farr, ExxonMobil Alaska, Production Inc. Mr. Dave White, Chevron USA Jenny Jemison Carl Lundgren Frank Paskvan Bill Bredar 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 Surveillance and appraisal activities in the POP identified the presence of rich gas condensate in sections of the original gas cap up -dip from POP lean gas re-injection wells. Further development of these portions of the POP has not been pursued due to the lack of offtake points in the area. Several wells exist that penetrate and could be completed in both the POP and the LOP. 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 improved lift efficiency. Consequently, commingling of production from the POP and LOP 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 both the POP and LOP. 2. Cross flow Based on the reservoir fluids in the POP and LOP, 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. Reservoir pressure is not expected to be substantially different between the two pools with the local LOP pressure most recently measured at 3647 psig (8900' TVDSS datum) and the local POP estimated to be at approximately 3664 psig (8800' TVDSS datum). Reservoir permeability between pools is also expected to be similar with a calculated LOP L5-21 average perm of 26 mD for the currently open perforations and an estimated POP L5-21 perm of 190 mD for the proposed zone to be perforated. Crossflow of significant volume between pools in commingled wells that experience extended shut in periods could be prevented through mechanical isolation of the pools which would require additional well intervention cementing activity. 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 With all anticipated offtake from the POP occurring in the original gas cap and LOP offtake occurring in the original oil column BPXA proposed using the following production allocation methodology: 100% of all NGLs will be allocated to POP, 100% of oil and water will be allocated to the LOP. Produced gas will be allocated to POP minus LOP gas calculated at a solution GOR of 836 scf/stb or less as needed to keep the POP gas volume from dropping below zero. Gas Allocation Equation: Prudhoe Formation Gas Rate = Total Gas Rate — Lisburne Formation Gas Rate Lisburne Formation Gas Rate = Allocated Oil Rate * Lisburne Oil Pool Solution Gas Oil Ratio Lisburne Oil Pool Solution Gas Oil Ratio = 836 scf/stbo 2. Reservoir Surveillance If necessary differential production rates from the LOP and POP can be measured via cased hole production logging. If mechanical isolation of the two pools became necessary options to do so exist using through -wellbore cementing techniques. Conclusion BP requests approval for wellbore commingling of production from the Lisburne Oil Pool (LOP) and the Prudhoe Oil Pool (POP) in well L5-21. 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 POP. Produced liquids and gas from the separate pools can be properly allocated based on the production allocation procedure in the proposed methodology. Lxmblt A: Proposed LS -21 Wellbore Schematic ACRNrOR' Proposed lvishak flPi- Commingling penis FJ�v = NA KOP 2150 kW.\npY_ SY@580D' 1DI�1�- 12]98' '(kmn NDS 8903 SS Minimum TBG 10=2.206 @ 11960' 2-718- XN NIPPLE Minimum LNR 8) =1.812' @ 12405' 2J18' CAMCO D NIPPLE 11.391' MG. TAP, L60. 0=120x7' H 148r 118- . TOP OF TL161 MDR 11N6. HH1111I\ IlN,1AMOM FB LOGZM DA ON0121A1 AMf1EATTOPP M@11161' Nd : Wer Y Fhxfwbn DS fm hskx�d Pert Ode SQE SPF MHNAL OpNspx OATE Sff PH3OfMTDN DATA ONNAOE2 L 6AFET/ NOT®: CAT. NO SM 1129 (PPM) M. UNABLE TO S16FT FNQMtLIC 9 111 SLELVEON T rJ—i 1 (1wAw8 T14H r x 1 M16- ss HYD H06EBOw HUNG lP IN PMOFLE 517 1.1 SG, 715- PEW BALLS ON TOP OF PPR FROM STIM. JET CDT TAIL PPE* 12 ONOMN TO DTrABLISH COMM BELOW DDT PHIL 1695' 2-74PCAM1T87RIAT Skl. • D=2312 LOCKFD(xEN 11n/xLTM1 sr w ND17EV COk1.@JIS n1E vLv uro+roar 052CJ16 arE- 1 27.'[1 2711 15 TCiD OOkE R( /8 0621116 2 6088 189'1 58 TGW SO A( 20 05(17118 3 8969 6681 67 1OFD dM /G 0 0121169 9 1057 7871 16 TGPD OMI 1G 0 0721H5 s 11631 em >6 rtFo OW N® 6 o221re9 T -1x1' 6NDiY1 Hf r911L 1J• T U P 119411- 12950 1vishak Perfs(approximate depths( I YAFG. O= 12401• Hz-rwx2-YB'xo os-3).1D=1.395- DATE {EV a+ WWNIS LMIt Nt+/BY COk1.@JIS 101171117 OIBG9NL COMPLkl10N 052CJ16 FxLLM FWFSSM FESET FOOT 50211M RVO 0626116 CLV OD 10627//6) 0922115 J1S1 MILL CMT N TBG Le%MM 07112/16 JAY KILLED R00( SO*W 107/016) GYI.L15 AjS� A MllihkT MGLFAK OBOMI) AGI863108fJU11) 11x11151FA1 MILL CMFAETAfBiIC9+-SET 07D0118 BfORVM-CpfAFDFB 17M15 QH SETROOS SLi�/11b131/5) L6OLFWt Fr Y4HL: LS -21 FHBIFNz 187-0570 AAro 50029-2113100 rI11L R15E 1997 FST B IV7 ®uporAD90 (Af-k11 PF#OBA71pN511I w I+ff LOG. ZC4 M M 07/2187 AMIATTWPEW 32-01212(r IJMe: Fiferb Ro.uc OR for he APert4m 52E SMI WFTWAL OP.GV MW 2' 6 121M-12130 O 06!31117 2' 6 121M-17/50 0 0601017 2-108' 1 12161, 12163, 12165, 12163, 0 10012 2-116• 1 1216E 12169 0 lalm 2-116' 1 M16. 12216. 12220. /2224. 0 Mimi 2-118' 1 12126. l) .1m1. 1247. 0 lolml 2-106' 1 12249, 12257.12259. 12261 O ta1M7 2-1f8' 1 12217.12221.12225. IM31. O os2 m9 2-1/8' 1 12247. 12258 (M -FEW) 0 OSFMW 2-116' 1 1227E 1227E 1116E 12295.1167 D IwIw 2-116' 1 12324, 12306. VMS. 12316, O 1x1147 2-116' 1 IMIS. 12320.12325. i238. O 1(11187 2-116' 1 12329.12341.123".12347. 0 10011187 2-108' 1 12 , 12354, 12356. 12356. 0 1012167 2-m' 1 IMU. 12365. 12375.123M. I2382 0 1a11087 2 Ur 1 12276.1229E 12305, 12307. 0 OUMM 2-118' 1 12317.123211=.12328. O OSf1E69 2-11B' 1 IZ341.12345 12249. 17353. O 05126169 2-10 1 12757.12361.12365.12366, 0 0689 2-118' 1 1237512381 (tBFOW) 0 osrAw 2-11& 1 12411, IM14, tN17, INN D 1x11 7 2AW 1 12432,1245.12"9. 12483, O 1x11087 2 -VB' 1 IMS. 12497, 12499 O 1x11187 2-ll6' 1 1251E 12519 0 10011087 L5-21 247E REV BY I COWAN 5 DATE I REV BY I COWAMS 1&17187 OFIGUAL COIIPLEMM 6 JK RAI®, FaMFEMS®,(8:"iEf ROO( ON2L89 FSVO POWs JK GLV CIO IDW2118 0822/15 JLSUM 811 aff NTBGUWJNUM DWMM Rll R �(0711x18) O9F1&15 JL&JAO WBS HAiB1A0®45G LFAK 7 AQ (0531117) 11N&15 WNJ IAL CMMllMABL'®P- SU7r"SWSJK BT MSCOHCO1 1211&15 xj SEf KOOK SCREM(12/1115)