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Home My WebLink AboutCO 804CONSERVATION ORDER 804 Kenai Unit 1. October 12, 2022 Hilcorp Alaska, LLC’s Spacing Exception Application for KBU 11-07 2. November 18, 2022 Public Hearing Notice Affidavit of Publication Email list, bulk mail list. STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC for a spacing exception to complete, test, and produce the existing Kenai Beluga Unit 11-07 well in an Undefined Gas Pool within 1,500 feet of a property line where the owners and landowners are not the same on both sides of the line, pursuant to 20 AAC 25.055(d). ) ) ) ) ) ) ) ) ) ) Docket Number: CO-22-014 Conservation Order 804 KBU 11-07 Development Gas Well Undefined Gas Pool Kenai Unit Kenai Gas Field Kenai Peninsula Borough, Alaska January 18, 2023 IT APPEARING THAT: 1. Hilcorp Alaska, LLC (Hilcorp) by letter received October 13, 2022, filed an application with the Alaska Oil and Gas Conservation Commission (AOGCC) for an exception to the spacing requirements of 20 AAC 25.055 to complete, test, and produce the existing Kenai Beluga Unit 11-07 well (KBU 11) in an Undefined Gas Pool within 1,500 feet of a property line where the owners and landowners are not the same on both sides of the line, pursuant to 20 AAC 25.055(d). 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for December 22, 2022. On November 18, 2022, the AOGCC published notice of the opportunity for that hearing on the State of Alaska’s Online Public Notice website and on the AOGCC’s website, electronically transmitted the notice to all persons on the AOGCC’s email distribution list and mailed printed copies of the notice to all persons on the AOGCC’s mailing distribution list. On November 20, 2022, the AOGCC published the notice in the Anchorage Daily News. 3. Hilcorp sent, by certified mail, notice of the application to all owners, landowners, and operators of all properties within 3,000 feet of the entire KBU 11-07 well path and provided the notice, addresses to which the notices were delivered, and U.S. Postal Service tracking information for each certified electronic mailing return receipt to AOGCC. 4. No request for a public hearing or comments were received. The tentatively scheduled public hearing was vacated on December 8, 2022. 5. Hilcorp’s application provided sufficient information upon which to make an informed decision on its request. PURPOSE AND NEED FOR THIS ORDER: Well spacing regulations protect the oil and gas rights of adjacent landowners and maximize resource recovery by establishing default limits on how close, under the land's surface, oil and gas wells can be to property lines where ownership changes hands. These limits are set forth in a regulation, 20 AAC 25.055. Operators must abide by the default limits unless they apply for, and obtain, an exception to those limits. Although exceptions to the default limits are not unusual, AOGCC carefully evaluates each application, and typically grants them only when actual geologic Conservation Order 804 January 18, 2023 Page 2 of 3 conditions demonstrate that the proposed subsurface location of a well is necessary to reach otherwise unreachable oil or gas and that both the rights of adjacent landowners and underground drinking water can be protected. As a general matter, AOGCC does not have extensive authority over surface impacts such as noise, emissions, or construction. FINDINGS: 1. Hilcorp is operator for onshore KBU 11-07 gas development well located within Kenai Peninsula Borough on the east side of the Cook Inlet Basin near Ninilchik, Alaska: Surface Location: 673’ FSL, 1,403’ FWL, Section 6, T04N, R11W, S.M. Bottom-hole Location: 862’ FNL, 1,491’ FWL, Section 4, T04N, R11W, S.M. Hilcorp owns 100% Working Interest (WI) in the affected oil and gas leases and is currently the operator of Kenai Unit. Landowners of the affected leases are the State of Alaska, the U.S. Government, and Univar Corporation. All affected owners and landowners are a party to the existing Kenai Unit Agreement. 2. KBU 11-07 was drilled in November 2005 to a depth of 7,900 feet measured depth (MD) and 7,619 feet true vertical depth (TVD). The well targeted reservoirs within the Sterling 3, 4, 5.1, 5.2, 6, and Beluga/Upper Tyonek Gas Pools as defined in Conservation Order 510B. However, Hilcorp now proposes to perforate, test, complete, and regularly produce gas reserves from discontinuous, fluvial channel sands within the Sterling Formation that lie shallower than the top of the Sterling 3 Gas Pool. These shallow channel sands lie within the Sterling Undefined Gas Pool and they are governed by statewide spacing regulation 20 AAC 25.055. 3. Hilcorp’s proposed perforations will be located within 1,500 feet of a property line where owners or landowners are not the same on both sides of the line. 4. Hilcorp’s proposed perforations in KBU 11-07 target unproven reserves within the Sterling Formation. These reserves cannot be reached by conforming to applicable statewide spacing regulations because of the narrow, discontinuous, and lenticular nature of the reservoir sands and their most prospective locations on the subsurface structure. 5. If operated as required, perforating, testing, completing, and regularly producing KBU 11-07 will not cause waste or increase risk of fluid movement into freshwater. CONCLUSIONS: 1. An exception to the well spacing provisions of 20 AAC 25.055 is necessary to allow perforation, testing, completion, and regular production of the Sterling Undefined Gas Pool in the KBU 11-07 development gas well in order to maximize ultimate resource recovery. 2. Granting an exception to the well spacing provisions of 20 AAC 25.055 for KBU 11-07 for the Sterling Undefined Gas Pool will not result in waste or jeopardize correlative rights of adjoining or nearby owners, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. NOW THEREFORE IT IS ORDERED: The AOGCC grants Hilcorp’s October 13, 2022, application for an exception to the well spacing provisions of 20 AAC 25.055 to allow perforating, testing, completion, and regular production of Conservation Order 804 January 18, 2023 Page 3 of 3 the KBU 11-07 development gas well within the Sterling Undefined Gas Pool. Hilcorp must comply with all applicable laws and all other legal requirements. DONE at Anchorage, Alaska and dated January 18, 2023. Jessie L. Chmielowski Greg C. Wilson Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Gregory Wilson Digitally signed by Gregory Wilson Date: 2023.01.18 13:50:58 -09'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2023.01.18 14:10:39 -09'00' From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Conservation Order 804 (Kenai Unit) Date:Wednesday, January 18, 2023 2:19:53 PM Attachments:co 804.pdf THE APPLICATION OF Hilcorp Alaska, LLC for a spacing exception to complete, test, and produce the existing Kenai Beluga Unit 11-07 well in an Undefined Gas Pool within 1,500 feet of a property line where the owners and landowners are not the same on both sides of the line, pursuant to 20 AAC 25.055(d). Samantha Carlisle AOGCC Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 __________________________________ List Name: AOGCC_Public_Notices@list.state.ak.us You subscribed as: samantha.carlisle@alaska.gov Unsubscribe at: https://list.state.ak.us/mailman/options/aogcc_public_notices/samantha.carlisle%40alaska.gov Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 mailed 1/18/23 2 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION RE: Docket Number: CO-22-014 Hilcorp Alaska, LLC’s Spacing Exception Application for Existing Well Kenai Beluga Unit 11-07 Hilcorp Alaska, LLC (Hilcorp)by letter received October 13, 2022, filed an application with the Alaska Oil and Gas Conservation Commission (AOGCC) for an exception to the spacing requirements of 20 AAC 25.055 to complete, test, and produce the existing Kenai Beluga Unit 11-07 well in an Undefined Gas Pool within 1,500 feet of a property line where the owners and landowners are not the same on both sides of the line, pursuant to 20 AAC 25.055(d). Well spacing regulations protect the oil and gas rights of adjacent landowners and maximize resource recovery by establishing default limits on how close, under the land's surface, oil and gas wells can be to property lines where ownership changes hands. These limits are set forth in a regulation, 20 AAC 25.055. Operators must abide by the default limits unless they apply for, and obtain, an exception to those limits. Although exceptions to the default limits are not unusual, AOGCC carefully evaluates each application, and typically grants them only when actual geologic conditions demonstrate that the proposed subsurface location of a well is necessary to reach otherwise unreachable oil or gas and that both the rights of adjacent landowners and underground drinking water can be protected. As a general matter, AOGCC does not have extensive authority over surface impacts such as noise, emissions, or construction. This notice does not contain all the information filed by Hilcorp. To obtain more information, contact the AOGCC’s Special Assistant, Samantha Carlisle, at (907) 793-1223 or samantha.carlisle@alaska.gov. A public hearing on the matter has been tentatively scheduled for December 22, 2022, at 10:00 a.m. The hearing, which may be changed to full virtual if necessary, will be held in the AOGCC hearing room located at 333 West 7th Avenue, Anchorage, AK 99501. The audio call-in information is (907) 202-7104 Conference ID: 983 027 433#. Anyone who wishes to participate remotely using MS Teams video conference should contact Ms. Carlisle at least two business days before the scheduled public hearing to request an invitation for the MS Teams. 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 6, 2022. If a request for a hearing is not timely filed, the AOGCC may issue an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1223 after December 7, 2022. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, AK 99501 or samantha.carlisle@alaska.gov. Comments must be received no later than 4:30 p.m. on December 21, 2022, except that, if a hearing is held, comments must be received no later than the conclusion of the December 22, 2022 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact Samantha Carlisle, at (907) 793-1223, no later than December 15, 2022. Jessie L. Chmielowski Commissioner Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2022.11.18 13:46:47 -09'00' From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Public Hearing Notice, CO-22-014, Hilcorp, Kenai Beluga Unit Date:Friday, November 18, 2022 2:33:47 PM Attachments:CO-22-014 Public Hearing Notice Hilcorp KBU 11-07 Spacing Exception.pdf RE: Docket Number: CO-22-014 Hilcorp Alaska, LLC’s Spacing Exception Application for Existing Well Kenai Beluga Unit 11-07 Samantha Carlisle AOGCC Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 __________________________________ List Name: AOGCC_Public_Notices@list.state.ak.us You subscribed as: samantha.carlisle@alaska.gov Unsubscribe at: https://list.state.ak.us/mailman/options/aogcc_public_notices/samantha.carlisle%40alaska.gov Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 mailed 11/18/22 Adam Garrigus being first duly sworn on oath deposes and says that 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 news- paper. That the annexed is a copy of an adver- tisement as it was published in regular issues (and not in supplemental form) of said news- paper on AFFIDAVIT OF PUBLICATION ______________________________________ Notary Public in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES ______________________________________ 11/20/2022 and that such newspaper was regularly distrib- uted to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed________________________________ Subscribed and sworn to before me this 21st day of November 2022. Account #: 100869 ST OF AK/AK OIL AND GAS CONSERVATION COMMISSION 333 W. 7TH AVE STE 100, ANCHORAGE, AK 99501 Order #: W0034334 Cost: $377.2 Notice of Public HearingSTATE OF ALASKAALASKA OIL AND GAS CONSERVATION COMMISSION RE: Docket Number: CO-22-014Hilcorp Alaska, LLC’s Spacing Exception Application for Existing WellKenai Beluga Unit 11-07 Hilcorp Alaska, LLC (Hilcorp) by letter received October 13, 2022, filed an application with the Alaska Oil and Gas Conservation Commission (AOGCC) for an exception to the spacing requirements of 20 AAC 25.055 to complete, test, and produce the existing Kenai Beluga Unit 11-07 well in an Undefined Gas Pool within 1,500 feet of a property line where the owners and landowners are not the same on both sides of the line, pursuant to 20 AAC 25.055(d). Well spacing regulations protect the oil and gas rights of adjacent landowners and maximize resource recovery by establishing default limits on how close, under the land’s surface, oil and gas wells can be to property lines where ownership changes hands. These limits are set forth in a regulation, 20 AAC 25.055. Operators must abide by the default limits unless they apply for, and obtain, an exception to those limits. Although exceptions to the default limits are not unusual, AOGCC carefully evaluates each application, and typically grants them only when actual geologic conditions demonstrate that the proposed subsurface location of a well is necessary to reach otherwise unreachable oil or gas and that both the rights of adjacent landowners and underground drinking water can be protected. As a general matter, AOGCC does not have extensive authority over surface impacts such as noise, emissions, or construction. This notice does not contain all the information filed by Hilcorp. To obtain more information, contact the AOGCC’s Special Assistant, Samantha Carlisle, at (907) 793-1223 or samantha.carlisle@alaska.gov. A public hearing on the matter has been tentatively scheduled for December 22, 2022, at 10:00 a.m. The hearing, which may be changed to full virtual if necessary, will be held in the AOGCC hearing room located at 333 West 7th Avenue, Anchorage, AK 99501. The audio call-in information is (907) 202-7104 Conference ID: 983 027 433#. Anyone who wishes to participate remotely using MS Teams video conference should contact Ms. Carlisle at least two business days before the scheduled public hearing to request an invitation for the MS Teams. 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 6, 2022. If a request for a hearing is not timely filed, the AOGCC may issue an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1223 after December 7, 2022. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, AK 99501 or samantha.carlisle@alaska.gov. Comments must be received no later than 4:30 p.m. on December 21, 2022, except that, if a hearing is held, comments must be received no later than the conclusion of the December 22, 2022 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact Samantha Carlisle, at (907) 793-1223, no later than December 15, 2022. Jessie L. ChmielowskiCommissioner Pub: Nov. 20, 2022 STATE OF ALASKA THIRD JUDICIAL DISTRICT 2024-07-14 Document Ref: ZZBNX-OUAAH-XWHLJ-NHASZ Page 11 of 77 1 By Samantha Carlisle at 10:36 am, Oct 13, 2022 CAUTION: This email originated from outside the State of Alaska mail system. Do not click links or open attachments unless you recognize the sender and know the content is safe. From:Cody Terrell To:Carlisle, Samantha J (OGC) Cc:Davies, Stephen F (OGC); Roby, David S (OGC); Chad Helgeson Subject:RE: KBU 11-07 Spacing Exception Application Date:Thursday, October 13, 2022 10:13:02 AM Hi Samantha, Here are the tracking numbers for the certified mailing notice: Bureau of Energy and Materials Bureau of Land Management 222 West 7th Ave., #13 Anchorage AK 99513 Attn: Sharon Yarawsky 7021 0350 0000 8159 9060 Univar Corporation P.O. Box 34325 Seattle, WA 98124 Attn: Corporate Cash Manager 7021 0350 0000 8159 9077 Division of Oil and Gas Alaska Department of Natural Resources 550 W. 7th Avenue, Ste. 1100 Anchorage, AK 99501 Attn: Units 7021 0350 0000 8159 9084 Regards, Cody T. Terrell Landman Hilcorp Alaska, LLC Direct: 907-777-8432 Cell: 713-870-4532 This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. From: Cody Terrell Sent: Thursday, October 13, 2022 8:35 AM To: Carlisle, Samantha J (CED) <samantha.carlisle@alaska.gov> Cc: Davies, Stephen F (CED) <steve.davies@alaska.gov>; Roby, David S (CED) <dave.roby@alaska.gov>; Chad Helgeson <chelgeson@hilcorp.com> Subject: KBU 11-07 Spacing Exception Application Hi Samantha, Please see the attached spacing exception application for KBU 11-07 located in the Kenai Gas Field. Certified mailings are going out today and I will forward you the tracking numbers as soon as I get them. Please let me know if you have any questions. Thank you in advance. Regards, Cody T. Terrell | Landman | Hilcorp Alaska, LLC O: 907-777-8432 | C: 713-870-4532 | cterrell@hilcorp.com 3800 Centerpoint Dr., Suite 1400 | Anchorage | Alaska | 99503 This email may contain confidential and / or privileged information and is intended for the recipient(s) only. 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