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Home My WebLink AboutCO 805CONSERVATION ORDER 805 Milne Point Unit 1. December 6, 2022 Hilcorp Alaska, LLC’s Spacing Exception Application for MPU M-60 2. December 12, 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 drill, complete, test, and produce the proposed MPU M-60 development oil well in the Schrader Bluff Oil Pool of the Milne Point Unit within 500 feet from the exterior boundary of the Affected Area of Conservation Order 477, pursuant to 20 AAC 25.055 and Rule 2 of CO 477.05. ) ) ) ) ) ) ) ) ) ) Docket Number: CO-22-016 Conservation Order 805 MPU M-60 Development Oil Well Schrader Bluff Oil Pool Milne Point Unit North Slope Borough, Alaska April 18, 2023 IT APPEARING THAT: 1. Hilcorp Alaska, LLC (Hilcorp) by letter received December 7, 2022, filed an application with the Alaska Oil and Gas Conservation Commission (AOGCC) for an exception to the spacing requirements of Conservation Order 477.05 (CO 477.05) to drill, complete, test, and produce proposed development oil well Milne Point Unit (MPU) M-60 in the Schrader Bluff Oil Pool and the Milne Point Unit within 500 feet from the exterior boundary of the Affected Area of Conservation Order 477 (CO 477), pursuant to 20 AAC 25.055 and Rule 2 of CO 477.05, North Slope Borough, Alaska. 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for January 24, 2023. On December 14, 2022, the AOGCC published notice of the opportunity for that hearing on the State of Alaska’s Online Public Notice website and on the AOGCC’s website, electronically transmitted the notice to all persons on the AOGCC’s email distribution list and mailed printed copies of the notice to all persons on the AOGCC’s mailing distribution list. On December 15, 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 MPU M-60 well path and provided to the AOGCC a copy of the notice, addresses to which notices were delivered, and copies of all U.S. Postal Service Certified Mail Receipts. 4. No request for a public hearing was received, and no public comments were submitted. 5. The tentatively scheduled public hearing was vacated. 6. Hilcorp’s application provided sufficient information upon which to make an informed decision. 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 CO 805 April 18, 2023 Page 2 of 3 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 authority over surface impacts such as noise, emissions, or construction. FINDINGS: 1. Hilcorp is operator for the proposed onshore MPU M-60 development oil well located within the Milne Point Unit, North Slope Borough, Alaska. Surface Location: Milne Point Unit Lease ADL 25514 (100% State) 396’ FNL, 176’ FEL, Section 14, T13N, R9E, Umiat Meridian (U.M.) Top Producing Milne Point Unit Lease ADL 388235 (100% State) Interval: 847’ FSL, 1,495’ FWL, Section 12, T13N, R9E, U.M. Bottom-hole Location: Milne Point Unit Lease ADL 388235 (100% State) 2434’ FNL, 957’ FEL, Section 2, T13N, R9E, U.M. 2. Hilcorp owns 100% Working Interest in the affected leases and is currently operator of Milne Point Unit. The State of Alaska owns 100% of the mineral interest in the affected lands. For these affected lands, Hilcorp provided a schedule that details ownership within 3,000 feet of proposed well MPU M-60. 3. CO 477.05 governs well spacing for the Schrader Bluff Oil Pool within the Milne Point Unit. The Affected Area for the Schrader Bluff Oil Pool within the Milne Point Unit is described in CO 477. 4. MPU M-60 targets undrained reserves within the Schrader Bluff Oil Pool that cannot be reached by wells conforming to applicable statewide spacing regulations because of their locations on the subsurface structure. 5. If operated as required, drilling, testing, completion, and regular production of MPU M-60 will not cause waste or result in an increased risk of fluid movement into freshwater. CONCLUSIONS: 1. An exception to the well spacing provisions of CO 477.05 is necessary to allow drilling, completion, testing, and regular production of proposed development oil well MPU M-60 within the Schrader Bluff Oil Pool and Milne Point Unit in order to maximize ultimate resource recovery. 2. Granting an exception to the well spacing provisions of CO 477.05 for MPU M-60 will not result in waste or jeopardize correlative rights of adjoining or nearby owners, is based on CO 805 April 18, 2023 Page 3 of 3 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 December 7, 2022 application for an exception to the well spacing provisions of CO 477.05 allowing Hilcorp to drill, complete, test, and produce well MPU M-60 in the Schrader Bluff Oil Pool within 500 feet from the exterior boundary of the Affected Area of CO 477, pursuant to 20 AAC 25.055 and Rule 2 of CO 477.05. Hilcorp may proceed and must comply with all applicable laws and all other legal requirements. DONE at Anchorage, Alaska and dated April 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: 2023.04.18 13:30:04 -08'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2023.04.18 14:09:33 -08'00' From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:Conservation Order 805 (MPU) Date:Tuesday, April 18, 2023 2:13:00 PM Attachments:co 805.pdf THE APPLICATION OF Hilcorp Alaska, LLC for a spacing exception to drill, complete, test, and produce the proposed MPU M-60 development oil well in the Schrader Bluff Oil Pool of the Milne Point Unit within 500 feet from the exterior boundary of the Affected Area of Conservation Order 477, pursuant to 20 AAC 25.055 and Rule 2 of CO 477.05. Samantha Carlisle Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 2 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION RE: Docket Number: CO-22-016 Hilcorp Alaska, LLC’s Spacing Exception Application for Milne Point Unit M-60 Hilcorp Alaska, LLC (Hilcorp) by letter received December 7, 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 Milne Point Unit M-60 well in an Schrader Bluff Oil Pool within 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 January 24, 2023, 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: 547 041 823#. 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 29, 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 January 3, 2023. 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 January 19, 2023, except that, if a hearing is held, comments must be received no later than the conclusion of the January 24, 2023 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 January 17, 2023. Jessie L. Chmielowski Commissioner Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2022.12.13 12:37:10 -09'00' From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Public Hearing Notice, Hilcorp, Spacing Exception, Milne Point Unit Date:Wednesday, December 14, 2022 7:32:39 AM Attachments:CO-22-016 Public Hearing Notice Hilcorp MPU M-60 Spacing Exception.pdf RE: Docket Number: CO-22-016 Hilcorp Alaska, LLC’s Spacing Exception Application for Milne Point Unit M-60 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 12/14/22 1 By Samantha Carlisle at 6:21 am, Dec 07, 2022