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HomeMy WebLinkAboutCO 076 BCONSERVATION ORDER 76B Granite Point Field 1. March 1, 2023 Hilcorp’s proposed Amendment to CO 76A 2. March 21, 2023 Hilcorp geology description 3. April 20, 2023 Notice of Public Hearing, Affidavit of Publication, and mailings 4. June 6, 2023 Transcript, presentation, exhibits 5. ------------------ backup documents STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC to amend Conservation Order No. 76A to define the Granite Point Gas Pool in the Granite Point Field ) ) ) ) ) ) ) ) Docket Number: CO-23-002 Conservation Order 76B Granite Point Field Granite Point Unit Granite Point Gas Pool Kenai Peninsula Borough, Alaska September 19, 2023 IT APPEARING THAT: 1. Hilcorp Alaska, LLC (Hilcorp), by letter dated March 24, 2023, requested the Alaska Oil and Gas Conservation Commission (AOGCC) amend Conservation Order No. 76A (CO 76A) to define the Granite Point Gas Pool (GPGP) in the Granite Point Field (GPF). 2. Pursuant to 20 AAC 25.540, the Alaska Gas and Gas Conservation Commission (AOGCC) scheduled a public hearing for June 6, 2023. On April 20, 2023, the AOGCC published notice of 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. On April 23, 2023, the notice was also published in the Anchorage Daily News. 3. No requests for a public hearing were received and no public comments were submitted. 4. The scheduled public hearing was held on June 6, 2023. Hilcorp provided public testimony. Additional exhibits were requested by AOGCC’s Commissioners to ensure a clear public record. Hilcorp submitted this information on June 7 and 13, 2023. 5. Hilcorp’s application, testimony, supplemental information, and the AOGCC’s public records provide sufficient information to make an informed decision. PURPOSE AND NEED FOR THIS ORDER: Pool rules are applied for under 20 AAC 25.520 for the purpose of prescribing rules that differ from the normal statewide rules found in 20 AAC 25, for the development of a defined pool. The rules are established to streamline the development of the pool while still protecting correlative rights and ensuring maximum recovery. A pool is an underground reservoir containing, or appearing to contain, a common accumulation of oil or gas. Absent an order to the contrary, the statewide rules found in 20 AAC 25 govern development of oil or gas pools. However, sometimes an operator will apply to the AOGCC for an order to establish pool rules to govern a specific pool. Pool rules typically define the vertical and map extent of a particular pool and establish rules that modify the statewide requirements to enable more efficient operations while providing an equally effective means of protecting underground freshwater, protecting correlative rights, and conducting safe and environmentally sound operations. CO 76B September 19, 2023 Page 2 of 6 CO 76A (Errata dated May 23, 2019) currently defines the vertical and lateral extent of the Granite Point Middle Kenai Oil Pool and the Granite Point Hemlock Oil Pool, and it governs development, operations, and reporting for these pools. Hilcorp is applying to amend Rule 1 of CO 76A to establish a new pool, the proposed GPGP, in support of drilling of new gas development wells to increase natural gas production from the existing offshore production platforms within the Granite Point Field (GPF). The lateral extent of the proposed pool lies within the Affected Area of CO 76A. FINDINGS: 1. Owners and Landowners: Hilcorp is the Operator and sole Working Interest Owner of the GPF. The State of Alaska, Department of Natural Resources (DNR) is the landowner of the Affected Area, which is located offshore in the Cook Inlet in the Kenai Peninsula Borough, in southcentral Alaska. 2. Operator: Hilcorp is the operator for all leases within the Affected Area described below. 3. Affected Area: The Affected Area, which lies offshore beneath the Cook Inlet, is predominantly contained within the Granite Point Unit area, but also extends partially outside the unit boundary onto state leases ADL 18742 and ADL 374045. 4. Current Pools Definitions: CO 76A defines, in descending stratigraphic order, the Granite Point Middle Kenai Oil Pool (GPMKOP) and the Granite Point Hemlock Oil Pool (GPHOP). CO 76A references Mobil’s Granite Point No. 1 (GP 1) well to define the stratigraphic interval of these pools by specifying an MD for the top and base of each pool within that well. The proposed GPGP encompasses geologic strata that lie within the Tyonek Formation (Tyonek) and are shallower than those oil pools. 5. Geology: a. Structure: Within the Affected Area, the structure at the top of the proposed GPGP forms a northeast-trending, asymmetrical anticline that forms a four-way-closure measuring about 5 miles long by 1-1/2 miles wide. This anticline is bound on the west by a north-northeast-trending, high-angle reverse fault, and the anticline is also cut by a west-northwest-trending, normal fault in the vicinity of the Bruce Platform that is believed to isolate the northern and southern portions of the gas accumulation. Hilcorp proposes the depth to the top of the GPGP be placed at the first consistent coal bed, which lies at 3,095’ MD (equivalent to -3,073’ TVDSS 1) near the crest of the anticline. Hilcorp proposes the base of the proposed pool be placed at 7,725’ MD (-7,698’ TVDSS), which coincides with the top of the Granite Point Middle Kenai Oil Pool in well GP1. b. Stratigraphy: The proposed GPGP lies in the upper portion of the Tyonek Formation, and it is characterized by thick sand- DQGFRQJORPHUDWHဨULFKsediments deposited by fluvial channels that flowed along the basin axis and in alluvial fans oriented perpendicular to the basin axis. The proposed pool is overlain by sediments assigned to the lower portion of the Beluga Formation (Beluga). Upper Beluga and overlying 1 To avoid confusion, when depths represent true vertical depth below mean sea level (or subsea), the footage will be preceded by a minus sign and followed by the acronym TVDSS (e.g., 3,000 feet true vertical subsea will be depicted as -3,000 feet TVDSS). CO 76B September 19, 2023 Page 3 of 6 Sterling Formation sediments are not present within the Affected Area having been removed by uplift and erosion. 6. Rock Properties: Since previous development within this field has focused on the underlying oil pools, many of the existing wells do not have open-hole well logs across the proposed pool and essentially no laboratory-measured porosity and permeability information is available. Hilcorp's well log evaluations and limited examinations of cuttings samples suggest the sands are clean and quartz-rich, and they are believed to be similar in character to other Tyonek sand deposits. The first Permit to Drill designed to target the GPGP has plans for two cores to be taken to characterize the reservoir. 7. Future Development Description: One leg of the Bruce Platform has seven to eight available slots for drilling of new wells, which will optimize development drilling for the shallower reservoirs. Redrilling of existing wells will also be evaluated. 8. Well Spacing: Hilcorp’s application requests the Rule 2 of CO 76A be modified to state: There shall be no oil or gas well spacing restrictions with the Granite Point Field, except that, a) No oil well shall be completed within 500 feet of an exterior property line where ownership or landowners is not the same on both sides of the line; and b) No gas well shall be completed less than 1,500 feet from the external boundary of the Affected Area unless owners and landowners are the same on both sides of the boundary line. Recent changes to portions of AS 31.05.100, which governs spacing between wells, have eliminated interwell spacing requirements within a pool. However, Regulations and all orders that pertain to offset distances from property lines remain in effect.2 CONCLUSIONS: 1. Defining the new GPGP is appropriate and will lead to better development of the field and maximization of ultimate recovery. 2. Pool rules for the development of the proposed GPGP within the Affected Area are appropriate. 3. Unrestricted spacing between wells drilled to develop the GPGP will allow for optimal well placement and reduce the administrative burden on the operator and the AOGCC. However, the property line set-back distances of 20 AAC 25.055 remain in effect. 4. Correlative rights of owners and landowners of offset acreage will be protected by set-back requirements from a property line where landowners and owners are not the same. NOW, THEREFORE, IT IS ORDERED: In addition to statewide requirements under 20 AAC 25 (to the extent not superseded by these rules), the following rules govern development of the Granite Point Gas Pool, Granite Point Middle Kenai Oil Pool, and Granite Point Hemlock Oil Pool. CO 76A and all its associated administrative approvals are revoked and superseded by this order. The records of CO 76A and its administrative approvals are incorporated by reference into this order. 2 See AOGCC’s Industry Guidance Bulletin 22-002 for more detailed information. CO 76B September 19, 2023 Page 4 of 6 Affected Area: Seward Meridian Township and Range Sections T10N-R11W Section 5: SW/4, W/2 of NW/4 Sections 6, 7: All Section 8: NW/4, W/2 of SW/4 Section 18: W/2, NE/4, NW/4 of SE/4 Section 19: W/2 of NW/4, NE/4 of NW/4 T10N-R12W Section 1: E/2, SW/4, E/2 of NW/4, SW/4 of NW/4 Section 11: E/2 of E/2, SW/4 of SE/4 Sections 12, 13, 23, & 24: All Section 14: E/2, E/2 of SW/4, SE/4 of NW/4 Section 25: NW/4, NW/4 of NE/4, NW/4 of SW/4 Section 26: N/2, N/2 of S/2 T11N-R11W Section 19: SW/4 Seaward portion only, NW/4 Seaward portion only, W/2 of SE/4, SW/4 of NE/4, SE/4 of SE/4 Section 29: W/2 of SW/4 Sections 30 & 31: All Section 32: W/2 of W/2 T11N-R12W Section 25: SE/4, E/2 of NE/4 Section 36: E/2, E/2 of SW/4, SE/4 of NW/4 Rule 1 Definition of Pools (Revised this order) a. The Granite Point Gas Pool is defined as the gas accumulation that is common to, and correlative with, the accumulation found in Mobil’s Granite Point No. 1 well (API Number 50-733-10059-00-00) between 3,095’ and 7,725’ MD. b. The Granite Point Middle Kenai Oil Pool is defined as the oil accumulation that is common to, and correlative with, the accumulation found in Mobil’s Granite Point No. 1 well between 7,725’ and 10,885’ MD. c. The Granite Point Hemlock Oil Pool is defined as the accumulation common to, and correlative with, that in Mobil’s Granite Point No. 1 well between 10,885’ and 11,280’ MD. Rule 2 Well Spacing (Revised this order) There shall be no well spacing restrictions for the gas pool defined above, except that no gas well shall be completed within 1,500 feet of an exterior property line where ownership or landownership is not the same on both sides of the line. There shall be no well spacing restrictions for the oil pools defined above, except that no oil well shall be completed within 500 feet of an exterior property line where ownership or landownership is not the same on both sides of the line. Rule 3 Casing and Cementing Requirements (Restated from CO 76A) Surface casing must be set and cemented to a depth of at least 1,600 feet. Sufficient cement must be used to circulate to the surface. CO 76B September 19, 2023 Page 5 of 6 The production string must be cemented with a sufficient volume of cement to extend at least 500 feet above the shoe or a volume sufficient to cover 100 feet above the top of the uppermost producing zone encountered in the well, whichever is greater. Rule 4 Bottom Hole Pressure Surveys (Restated from CO 76A) A key well bottom hole pressure survey shall be made upon AOGCC request; provided however, such surveys are not anticipated to be required more often than twice in any calendar year. The time and length of survey, number and location of wells, datum and other details will be determined by the AOGCC upon consultation with the operators. Rule 5 Gas-Oil Ratio Tests (Restated from CO 76A) A gas-oil-ratio test of 24 hours duration shall be made annually on each producing well. The tests will be made during the months of June and July and the results will be reported on AOGCC Form 10-409 prior to September of each year. The requirements of this rule will be waived if monthly reported oil and gas production is based on a gas-oil-ratio test made at least every six months on each producing well. Rule 6 Pressure Maintenance Project (Superseded by Area Injection Orders No. 6 & 11 as amended and restated from CO 76A) Rule 7 Downhole commingling (Restated from CO 76A) Downhole commingling of production in wells simultaneously open to the GPMKOP and the GPHOP is hereby approved with the following conditions: a. Within 30 days of commencement of commingled production, a production log or geochemical analysis must be obtained. b. The operator must perform periodic production logging or geochemical analysis for all wells with downhole commingled production to allocate production between the GPMKOP and the GPHOP, with no more than 24 months between tests, and adjust the allocation of production between the pools accordingly. c. Copies of all tests, logs, or analyses used for determining allocation of production shall be submitted to the AOGCC within 30 days. Rule 8 Other Conservation Orders (Restated from CO 76A) Conservation Orders No. 59, 60, 76, 76A, & 693 and any associated administrative approvals to those orders are hereby revoked. Their records are incorporated by reference into this order. All other Conservation Orders affecting the GPHOP or the GPHOP shall remain in full force and effect, except as modified hereby. Rule 9 Administrative Approval (Restated from CO 76A) Unless notice and public hearing is otherwise required, the AOGCC may administratively waive the requirements of any rule stated above or administratively amend any rule 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. CO 76B September 19, 2023 Page 6 of 6 DONE at Anchorage, Alaska and dated September 19, 2023. Jessie L. Chmielowski Gregory C. Wilson Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10-days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2023.09.19 13:58:57 -08'00' Gregory Wilson Digitally signed by Gregory Wilson Date: 2023.09.19 14:12:05 -08'00' From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Conservation Order 76B (GPF) Date:Tuesday, September 19, 2023 2:18:43 PM Attachments:co76b.pdf THE APPLICATION OF Hilcorp Alaska, LLC to amend Conservation Order No. 76A to define the Granite Point Gas Pool in the Granite Point Field Samantha Carlisle 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 5 Updated by CJD 06-12-2023 PROPOSED SCHEMATIC Granite Point Field Bruce Drill Wells (Q4 2023) PTD: API: PBTD = 6,767’ / TVD = 3,960’ TD = 6,857’ / TVD = 4,000’ RKB to MSL = TBD CASING DETAIL Size Type Wt Grade Conn. ID Top Btm 20” Conductor – Driven to Set Depth - - Weld 29” Surf ~600’ 9-5/8" Surf Csg 47 L-80 TXP 8.681” Surf 4,936’ 4-1/2" Prod Lnr 12.6 L-80 TXP 3.958” ±4,736’ 6,857’ 4-1/2" Prod Tieback 12.6 L-80 IBT 3.958” Surf ±4,736’ 1 20” 9-5/8” 12-1/4” hole 4-1/2” JEWELRY DETAIL No. Depth Item 1 ±4,736’ Liner hanger / LTP Assembly 2 ±4,736’ Seal Stem 3 ±1,500’ Chemical Injection Sub 4 ~1,000’ ES Cementer 5 ±150’ SSSV / GLMs TBD OPEN HOLE / CEMENT DETAIL 9-5/8" Est. TOC @ Surface Stg 1 – L – 1392 ft3 / T – 268 ft3 ; Stg 2 L – 1631 ft3 / T – 263 ft3 TBD 4-1/2” Est. TOC @ TOL (50% excess) L – 843 ft3 / T – 105 ft3 TBD 8-1/2” hole 2 4 5 3 TM4 TM3 B90 COAL B98 COAL TM7 TM5 TM6 TM1_COAL TM2 ProposedProposedProposedProposedTM4 TM3 B90 COAL B98 COAL TM7 TM5 TM6 TM1_COAL TM2 4419.5 3360 3380 3400 3420 3440 3460 3480 3500 3520 3540 3560 3580 3600 3620 3640 3660 3680 3700 3720 3740 3760 3780 3800 3820 3840 3860 3880 3900 3920 3940 3960 3980 4000 4020 4040 4060 4080 4100 4120 4140 4160 4180 4200 4220 4240 4260 4280 4300 4320 4340 4360 4380 4400 4695.8 3600 3650 3700 3750 3800 3850 3900 3950 4000 4050 4100 4150 4200 4250 4300 4350 4400 4450 4500 4550 4600 4650 ProposedProposedProposedTM4 TM8 TM3 B90 COAL TM7 TM5 TM6 TM1_COAL TM2 4175.4 3120 3140 3160 3180 3200 3220 3240 3260 3280 3300 3320 3340 3360 3380 3400 3420 3440 3460 3480 3500 3520 3540 3560 3580 3600 3620 3640 3660 3680 3700 3720 3740 3760 3780 3800 3820 3840 3860 3880 3900 3920 3940 3960 3980 4000 4020 4040 4060 4080 4100 4120 4140 4160 4237.4 3200 3250 3300 3350 3400 3450 3500 3550 3600 3650 3700 3750 3800 3850 3900 3950 4000 4050 4100 4150 4200 ActiveActiveB90 COAL TM1_COAL TM2 (4627.9) 3560 3580 3600 3620 3640 3660 3680 3700 3720 3740 3760 3780 3800 3820 3840 3860 3880 3900 3920 3940 3960 3980 4000 4020 4040 4060 4080 (6679.8) 5250 5300 5350 5400 5450 5500 5550 5600 5650 5700 5750 5800 5850 5900 5950 TM11 TM9 TM8 TM9L TM10 TM7 TM5 TM6 (3744.8) 2680 2700 2720 2740 2760 2780 2800 2820 2840 2860 2880 2900 2920 2940 2960 2980 3000 3020 3040 3060 3080 3100 3120 3140 3160 3180 3200 3220 3240 3260 3280 3300 3320 3340 3360 3380 3400 3420 3440 3460 3480 3500 (3958.8) 2900 2950 3000 3050 3100 3150 3200 3250 3300 3350 3400 3450 3500 3550 3600 3650 3700 TM11 TM9 TM8 TM9L TM10 TM7 TM5 TM6 6100 ftUS 3717 ftUS 8004 ftUSAN-28RD2 [SSTVD] Well Type: Online Oil Producer UWI: 507332029402 TD (MD): 11530.0 ft Complete Date: 08/16/1995 TD (TVDSS): 9959.9 ft SSTVD 1:500 MD PERF_LOG 0 150gAPI GR1_BEST 0 150mV SP1 Coal Flag GR_Flag 0.2 ohm.m 200.0 ILD1_BEST 20 ohms 10 Ohms 5 ohms 0.60 ft3/ft3 0.00 NPSS_BEST 1.70 g/cm3 2.70 RHOB1_BEST Crossover 10.00 2,000.00 TLGS TGAS TYST86-01 [SSTVD] Well Type: UWI: 507331006200 TD (MD): 8920.0 ft Complete Date: 09/24/1966 TD (TVDSS): 8849.2 ft SSTVD 1:500 MD PERF_LOG 0 150gAPI GR1_BEST 0 150mV SP1 Coal Flag GR_Flag 0.2 ohm.m 200.0 ILD1_BEST 20 ohms 10 Ohms 5 ohms 150 50us/ft DTCO_BEST 10.00 2,000.00 TLGS TGAS BR-86-09 [SSTVD] Well Type: Gas Producer UWI: 507332044800 TD (MD): 5950.0 ft Complete Date: 06/23/1993 TD (TVDSS): 4087.9 ft SSTVD 1:500 MD PERF_LOG 0 150gAPI GR1_BEST 0 150mV SP Coal Flag GR_Flag 0.2 ohm.m 200.0 ILD 0.2 ohm.m 200.0 ILD1_BEST 20 ohms 20 ohms 10 Ohms 10 Ohms 5 ohms 5 ohms 0.60 ft3/ft3 0.00 NPSS_BEST 1.70 g/cm3 2.70 RHOB1 nPHI/RHOB 150 50us/ft DTCO_BEST 0.00 deg 90.00 Tadpole well log KALOA 2 [SSTVD] Well Type: UWI: 502832010700 TD (MD): 3720.0 ft Complete Date: 07/16/2004 TD (TVDSS): 3506.0 ft SSTVD 1:500 MD PERF_LOG 0 150gAPI GR1_BEST -185 -7mV SP1_BEST 0 150mV SP_NRM_BASELINE_SHIFT_CPR Coal Flag GR_Flag 0.2 ohm.m 200.0 ILD1_BEST 20 ohms 10 Ohms 5 ohms 0.60 ft3/ft3 0.00 NPSS_BEST 1.70 g/cm3 2.70 RHOB1_BEST Crossover 150 50us/ft DTCO_BEST -500 0 -5000 -5000-5000-5000-5000-5000-5000-5000-5000-5000-5000 -5000-5000-5000-5000-5000-500 0 -500 0 -5000-5000-5000-5000-5000-5000-5000-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500 -4500 -450 0 -450 0 -4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-4500-450 0 -450 0 -4500-4500-4500-4500-4500-6000-6000-5500-5500-5500-5500-5500-550 0 -3500 -3500-3500-3500-3500-3500-3500-3500-3500-3500-3500-3500-3500-3500-3500-3500-3500-3500-4000-4000-4000-4000-4000-4000-4000-4000-4000-4000-4000-4000 -400 0 -4000-4000-4000-4000-4000-4000-4000-4000-4000-4000-4000-4000-4000-4000-4000-4000 -4000-4000-4000-3883 -3854 -3862 -3873 -3952 -3711 -4036 -4108 -3948 -3886 -3412 -3833 -3567 -4108 -4228 -3865 -3575 -3735 -3683 -3890 -4169 -3631 -3588 -4018 -3875 -3916 -3881 -4145 -3691 -3705 -4233 -3821 -4051 -3767 -3805 -3656 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1000ftUS 1:6500 4 AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 ALASKA OIL AND GAS CONSERVATION COMMISSION In the Matter of Hilcorp Alaska's ) Request to Amend Conservation Order ) 76A to Define the Granite Point Gas ) Pool in the Granite Point Field. ) ______________________________________) Docket No.: CO 23-002 PUBLIC HEARING June 6, 2023 10:00 o'clock a.m. BEFORE: Brett Huber, Sr., Chairman Jessie Chmielowski, Commissioner Greg Wilson, Commissioner AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 2 1 TABLE OF CONTENTS 2 Comments by Chair Huber 03 3 Comments by Mr. Duffy 09 4 Comments by Ms. Frey 12 5 Comments by Ms. Richards 14 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 3 1 P R O C E E D I N G S 2 (On record - 10:00 a.m.) 3 CHAIRMAN HUBER: Good morning. I'll call the 4 meeting to order at 10:00 a.m. on Tuesday, June 6. 5 This is a public hearing on docket number CO 23-002 to 6 amend conservation order number 76A to define the 7 Granite Point Gas Pool in the Granite Point field. I'm 8 Commissioner and Chair Brett Huber, I serve as the 9 public member. With me is Commissioner Jessie 10 Chmielowski, petroleum engineer and Commissioner Greg 11 Wilson, geologist. They occupy the seats designated 12 for their disciplines. Today's hearing is being held 13 in person and via Microsoft Teams. The in person 14 location is right here at the Alaska Oil and Gas 15 Conservation Commission office, 333 West 7th Avenue, 16 Anchorage. For those on Teams please be mindful of any 17 background noise and make sure you're muted when you're 18 not testifying, please. 19 If you require any special accommodation to 20 participate in the hearing today please contact our 21 office or Samantha Carlisle. She can be reached at 22 793-1223 or send us a message through the Microsoft 23 Teams chat icon. 24 Computer Matrix is recording today's hearing 25 for us. Upon completion and preparation of the AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 4 1 transcript anyone desiring a copy will be able to 2 obtain it by contacting them. 3 This hearing is being held in accordance with 4 Alaska statute 44.62 and 20 AAC 25.540 of the Alaska 5 Administrative Code. 6 The notice of hearing was published on the 7 state of Alaska online notices website as well as 8 AOGCC's website. It was also sent to the AOGCC email 9 list serve on April 20th, 2023. We also published the 10 notice in the Anchorage Daily News on April 23rd, 2023. 11 To date the AOGCC has received no public comment on the 12 matter. 13 Background of pool rules. Pool rules are 14 applied for under 20 AAC 25.520 for the purpose of 15 prescribing rules that differ from the normal statewide 16 rules found in 20 AAC 25 for the development of a 17 defined pool. The rules are established to streamline 18 the development of the pool while still protecting 19 correlative rights and ensuring maximum recovery. 20 Pools and underground reservoir containing or 21 appearing to contain a common..... 22 (Teleconference interference - participants not 23 muted). 24 CHAIRMAN HUBER: .....accumulation of -- I'm 25 sorry. AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 5 1 COMMISSIONER CHMIELOWSKI: Someone on Teams. 2 CHAIRMAN HUBER: Oh, okay. Pools and 3 underground reservoir containing or appearing to 4 contain a common accumulation of oil or gas absent an 5 order to the contrary the statewide rules found in 20 6 AAC 25 govern development of oil or gas pools. However 7 sometimes an operator will apply to the AOGCC for an 8 order to establish pool rules to govern a specific 9 pool. Pool rules typically define the vertical and map 10 extent of a particular pool and establish rules that 11 modify the statewide requirements to enable more 12 efficient operations while providing equally effective 13 means of protecting underground freshwater, protecting 14 correlative rights and conducting safe and 15 environmentally sound operations. 16 Hilcorp is applying for rules to define a gas 17 pool within the -- within the unit and prescribe rules 18 for the gas pool's development. 19 At the close of today's hearing the AOGCC will 20 review the information presented today and any 21 additional written comments received before the 22 record's closed. Upon completion of that review and 23 our deliberations we expect to issue a written decision 24 regarding the amendment of CO number 76A to define a 25 Granite Point gas pool in the Granite Point field. AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 6 1 Questions of the presenters today will come 2 from myself or Commissioner Chmielowski or Commissioner 3 Wilson. However should a member of the audience either 4 online or in the room have a question that they would 5 like to have asked, please submit that question in 6 writing to Samantha Carlisle either in person or via 7 the Teams chat feature. She will provide these 8 questions to us for review and if we feel that posing 9 your question will assist us in making our 10 determinations we will ask it. In any case all 11 questions from the public will be included in the 12 public record. 13 I should note that we may take a break or two 14 today if we need to discuss issues among ourself or 15 confer with Staff. If you are needing a break for 16 other reasons today please don't hesitate to ask. 17 And we'll begin today's hearing with the 18 Hilcorp presentation. Representatives from Hilcorp, 19 are you ready to begin your presentation. 20 (No audible response) 21 CHAIRMAN HUBER: Thank you. I'll now swear in 22 the witnesses. If all three of you will raise your 23 right hand please and state your name -- first state 24 your names clearly for the record. You can do it with 25 your hand up or down, take your pick. AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 7 1 (Oath administered) 2 (No audible response) 3 CHAIRMAN HUBER: Let the record reflect that 4 all witnesses responded in the affirmative. 5 And I received yesterday by email a request for 6 Ms. Meredyth Richards and Ms. Sarah Frey, a reservoir 7 engineer and a geologist respectively to be considered 8 experts in their field today. 9 Do you have any issues with that, 10 Commissioners, or would you like to hear a brief 11 recitation of their credentials? 12 COMMISSIONER CHMIELOWSKI: Yeah, I'd like to 13 hear their credentials, please. 14 CHAIRMAN HUBER: Excellent. Please proceed. 15 MS. FREY: My name is Sarah Frey, I am a 16 geologist for Hilcorp. I got my undergraduate degree 17 in geology at Colorado School of Mines as well as my 18 graduate degree at Colorado School of Mines. I have 19 been working in Alaska for six years, three of those 20 were for BP and then the past three have been with 21 Hilcorp working Granite Point and other gas fields in 22 the area. 23 CHAIRMAN HUBER: Meredyth. 24 MS. RICHARDS: My name's Meredyth Richards, I'm 25 a reservoir engineer at Hilcorp working Granite Point AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 8 1 field and a couple other gas fields with Sarah. 2 Previous to that I worked at BP, Prudhoe Bay on the 3 east side as a petroleum engineer. And my degree is 4 from the University of Alaska Fairbanks in petroleum 5 engineering. 6 CHAIRMAN HUBER: And how about you, David..... 7 MR. DUFFY: I don't..... 8 CHAIRMAN HUBER: .....do you want to be an 9 expert landman today? 10 MR. DUFFY: No, not necessary. 11 CHAIRMAN HUBER: Okay. You're just going to 12 stay a standard landman then. 13 Commissioners, are you satisfied with the 14 credentials that we heard today? 15 COMMISSIONER WILSON: I am. 16 COMMISSIONER CHMIELOWSKI: I have no 17 objections. 18 CHAIRMAN HUBER: You'll both be recognized as 19 experts in your fields today. 20 Commissioners, anything to add before we 21 proceed. 22 COMMISSIONER CHMIELOWSKI: No. 23 COMMISSIONER WILSON: Nothing more. 24 CHAIRMAN HUBER: First rule please keep your 25 green button and light on when you're speaking. That's AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 9 1 a hard one for me, I'm sure you'll do better. Also 2 speak clearly into the microphone. Remember to 3 reference your slides so that somebody reading along 4 can follow the public record. And that'll help also 5 for people reading along and to do a better job with 6 the transcript. 7 So with that I would invite you to begin, sir. 8 DAVID DUFFY 9 previously sworn, called as a witness on behalf of 10 Hilcorp Alaska, stated as follows: 11 MR. DUFFY: Great. Thank you, Commissioners. 12 I'd like to start with first just an opening. We have 13 no issues with waiving confidentiality or -- all of the 14 exhibits are to be made public. 15 A quick orientation on the Granite Point field. 16 And so within Cook Inlet Granite Point is -- it appears 17 with the Bruce, the Anna and the Granite Point 18 platforms. So that's the area, the focus that we're 19 talking about today. 20 On March 24th Hilcorp resubmitted a revised 21 application originally submitted on March 1st to 22 request the establishment of pool rules and to address 23 spacing. The -- I'm sorry, this is from Slide 3. The 24 application is very straightforward. What we're asking 25 for is that the Granite Point gas pool be defined as AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 10 1 the accumulation of gas common to of which correlates 2 to the accumulation in the Granite Point number 1 well 3 between the drilled depths of 3,095 feet MD and 7,725 4 feet MD as a new addition to the -- to the pool rules. 5 And we're also requesting the establishment of 6 spacing rules for the new gas pool. 7 This is Slide 4. 8 Rule -- new rule 2 we request to be read. That 9 there shall be no oil or gas wells spacing restrictions 10 within the Granite Point field and then subcomponent 11 (b), that no gas well shall be completed less than 12 1,500 feet from the external boundary of the affected 13 area unless owners and landowners are the same on both 14 sides. 15 Moving to Slide 5. 16 I need to make a correction in our application. 17 On page 2 of our original application in the general 18 description section there's a typo where it incorrectly 19 reference the Anna, the Baker and the Bruce. It should 20 be the Anna, the Bruce and the Granite Point platform. 21 CHAIRMAN HUBER: So that wasn't a nickname 22 then. 23 MR. DUFFY: Let's see, as to notice. With the 24 application being revised and then resent out on March 25 24th I've included exhibits to demonstrate the notice AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 11 1 was sent and received by the three parties. 2 As to ownership, Granite Point field in the 3 Granite Point unit, Hilcorp -- I'm sorry, slide number 4 7. The lease blocks in yellow illustrate the -- 5 Hilcorp's working interest at 100 percent in all 6 leases. The outer boundary in red illustrates the 7 boundary of the Granite Point unit and then the darker 8 line that kind of intersects with the red line is the 9 correct affected area under conservation 76C or 76A. 10 This is to the north, this is where CIRI owns 11 subsurface, neighboring -- what you'll notice is that 12 the only common boundary that we have with the unit and 13 with the conservation order is Kitchen Lights, but 14 we're nearly two full sections away. 15 As is also included in the original 16 application..... 17 COMMISSIONER WILSON: I had I guess a question 18 on the previous slide. Just if you could explain the 19 contacts. 20 MS. FREY: This is Sarah Frey, the geologist. 21 The contacts represent our P1 case for maximum volume 22 extent for the gas potential. And the blue represents 23 our average case and then there's a fault across so the 24 highest contour represents an additional case I think 25 around the P90 for volume in place. That's where those AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 12 1 contacts come and they come from lowest known gas shows 2 and wells existing in the field. 3 COMMISSIONER WILSON: Okay. Thank you. 4 MR. DUFFY: And for clarification within the 5 current conservation order the affected boundary is 6 sufficient, we see no need to request for a change 7 because the gas pool falls completely within. 8 Slide 8 and 9 are just duplicate copies of what 9 was included in the original application showing the 10 ownership from the Granite Point unit and the details 11 on the leases. 12 And with that I'll turn it over to Ms. Frey. 13 SARAH FREY 14 previously sworn, called as a witness on behalf of 15 Hilcorp Alaska, stated as follows: 16 MS. FREY: So Slide 10 -- this is Sarah Frey. 17 Slide 10 shows a high level structure map of one of the 18 target gas sands in the gas pool. What you see is 19 there's a fault cross-cutting the structure near the 20 Bruce. We have one well that goes to the north that is 21 an existing producer, that is where some of the 22 contacts originated from from the Bruce platform. And 23 then to the south the structure gets much higher on the 24 south side of the fault toward the middle of the Bruce 25 platform and then down towards the Anna platform. This AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 13 1 is a structure map at around 4,000 feet subsea TVD. 2 The oil leg is much, much deeper than this. We believe 3 that the structure is slightly tilted, it's not 4 perfectly conformable, but we believe that the contours 5 represent the actual dip of the structure. And we have 6 a lot of control you can see from wells on the west 7 flank, but a lot less control or I'm sorry, the east 8 flank, much less control on the west flank. 9 We do have actually in Slide 12 which is over 10 on the board and..... 11 COMMISSIONER WILSON: But, Sarah, I'm just 12 going to ask for clarification on that one. 13 MS. FREY: Yeah. 14 COMMISSIONER WILSON: The well sticks just 15 terminate at your upper Tyonek marker is that what 16 you're showing on the map? 17 MS. FREY: Yes, that's correct. Yes. 18 COMMISSIONER WILSON: Yeah. 19 MS. FREY: Yes, the wells have been cut off so 20 you don't see the bot -- the true bottomhole location, 21 but it is where they intersect that surface. And that 22 is the same for Slide 12 they're cut off at where those 23 certain wells intersect at depth and a better map for 24 you guys to see is on the wall over here, but we do 25 have one exploration well on top of the structure which AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 14 1 shows really positive indications of gas and that is 2 where our highest confidence contact comes from. So 3 that is where that highest contact south of the fault 4 is drawn. 5 MEREDYTH RICHARDS 6 previously sworn, called as a witness on behalf of 7 Hilcorp Alaska, stated as follows: 8 MS. RICHARDS: I'll add a couple things. So 9 Granite Point was developed as an oil field before..... 10 CHAIRMAN HUBER: Please identify yourself when 11 you change speakers. 12 MS. RICHARDS: Sorry. My name's Meredyth, 13 Meredyth Richards. I'm the reservoir engineer. 14 Granite Point was developed as an oil field 15 traditionally or historically and since 1967 has been 16 producing almost exclusively oil. So the way that the 17 wells are oriented as you see on the eastern side of 18 the structure, that's because the oil structure tends 19 to be a little bit more east and drilling has really 20 focused on exploiting the gas structure and that's why 21 we're here -- or the gas accumulations and that's why 22 we're here today. Sarah and I have done a lot of 23 subsurface work and we believe that there is a sizeable 24 accumulation of gas in Granite Point, across Granite 25 Point field. And our wells will -- we'll be drilling AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 15 1 off of these three platforms ideally to develop this 2 resource. 3 MS. FREY: So the structure -- sorry, this is 4 Sarah Frey again. So this structure represents a 5 tyonek marker map at the very top of the tyonek 6 section. Our request for the pool rules begins just 7 above this. The Granite Point well that delineates the 8 field pool rules for both the Hemlock oil pool and for 9 the Tyonek oil pool is the Granite Point 1 well which 10 is to the very south. It is at the Granite Point 11 platform just to the north of that. It's a vertical 12 exploration well that has been P&A'd. We are 13 requesting that the depths be used from that same well 14 just to keep consistency with the rest of the pool 15 rules. The correlation in the Tyonek section is 16 primarily controlled by laterally extensive coal 17 markers. 18 In Slide 13 I have a zoomed in version of what 19 those sands look like on a much zoomed in scale and 20 this is only the very top of this Tyonek section, but 21 just for reference as far as what the sands looks like 22 and how consistent the correlation is across the large 23 distance. For example the map is on that TM1 horizon, 24 you can see even from the Anna platform through the 25 well at the top of the structure the Tyonek State 86-1 AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 16 1 all the way to the Bruce 86-3 and then even onshore to 2 the Kaloa well. There is a consistent coal marker and 3 then there is consistent thickness in those particular 4 sands between the coal markers across the full section 5 of the field. And it does continue all the way to the 6 south of the Granite Point platform as well. Just for 7 the specific example I've included the key wells for 8 this particular horizon. The sands are relatively 9 consistent however some of them do come and go, but the 10 coals are relatively easy to correlate across the full 11 field. And that -- we see that in other fields as 12 well, not just at Granite Point. The Tyonek markers 13 are very consistent over lateral areas. 14 As far as what the rock properties are in this 15 area, we believe them to be similar to other Tyonek 16 sands. I looked at some of the cuttings from the wells 17 that are drilled particularly the 86-9 well which has 18 known gas production and it's very clean quartz rich 19 sand. We believe it is a little bit fine grained which 20 would explain the lack of resistivity and the lateral 21 extent of these sands is pretty extensive. 22 The open hole logs are a little bit challenging 23 because we don't have a ton, like Meredyth said this 24 well or this field was developed for oil so a lot of 25 the wells do not have open hole logs in the shallow AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 17 1 section and even if they do they are -- as you saw in 2 the map they are down dip so they're not necessarily 3 showing the full saturation of what we believe the 4 accumulation could actually hold. The best log that we 5 have that indicates gas here in the Anna 20 ARD well, 6 it's the most recent well that we have actual triple 7 combo logs across the section in. And I've illustrated 8 on here only six sands that show gas indicators both in 9 the resistivity. It shows good sand presence in the 10 gamma ray and then it shows approach and crossover in 11 the NC and Row B tract as well as the final tract in 12 this log panel on Slide 13 is the mud log total gas 13 which shows an incremental gas show at that particular 14 sand. And they do increase whenever we see reservoir 15 presence. 16 So we see an indication of gas in any sand 17 presence in that well as well as in the Tyonek State 86 18 well, there's elevated sonic response which is a gas 19 indicator and there are -- there was a request for DSTs 20 in that well, but there was not enough cement when they 21 originally drilled that well for them to be able to DST 22 that sand. We also see a lack of mud log response 23 after that second TM-1 sand and that's because they had 24 to significantly wait up for mud -- gas cut mud in that 25 particular well. So we see a lot of positive AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 18 1 indicators of both reservoir presence and gas presence 2 on both sides of the fault and lateral continuity all 3 the way across the full extent of the field. 4 Do you have any further reservoir questions? 5 COMMISSIONER WILSON: Just a curiosity on your 6 mud log on the Anna 28 RD well, do you know, is that in 7 units, the..... 8 MS. FREY: Yeah, it's total gas units, 9 it's..... 10 COMMISSIONER WILSON: I was just kind of 11 curious what the -- how many units you were kind of 12 seeing through that reservoir section then. 13 MS. FREY: The scale is -- I'll come up here. 14 (Indiscernible - away from microphone)..... 15 COMMISSIONER WILSON: Okay. No, very good. 16 Thanks. 17 CHAIRMAN HUBER: Additional questions by 18 Commissioners. 19 COMMISSIONER CHMIELOWSKI: Yes, did I read in 20 your application that you plan to drill grass route 21 wells for these or are you going to be doing some side 22 tracks off the platforms? 23 MS. FREY: This is Sarah Frey. We are planning 24 on doing grass roots wells. The Bruce platform has an 25 available leg that has only one well so there's at AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 19 1 least seven or eight available slots on that. And we 2 did consider doing sidetracks, but in order to get as 3 far out as we need to step from the platform, we would 4 like to do grass roots to get pointed in the correct 5 direction, to give us the largest chance of technical 6 success. 7 COMMISSIONER CHMIELOWSKI: Great. So you're 8 saying the available slots are on the -- which platform 9 did you say, the..... 10 MS. FREY: They're on the Bruce. 11 COMMISSIONER CHMIELOWSKI: .....Bruce, the 12 Bruce platform. Okay. And the one well you have 13 producing gas is on the Granite Point platform and 14 that's being used for fuel gas; is that true? 15 MS. RICHARDS: No, it is off the Bruce 16 plat..... 17 COMMISSIONER CHMIELOWSKI: Oh, the Bruce. 18 Okay. 19 MS. RICHARD: This is Meredyth. Excuse me, 20 this is Meredyth Richards again. It is off of the 21 Bruce platform, it's our Bruce 86-9 well..... 22 COMMISSIONER CHMIELOWSKI: Okay. 23 MS. RICHARDS: .....and it's to the -- you see 24 the cross structure fault, it is to the north..... 25 COMMISSIONER CHMIELOWSKI: Okay. AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 20 1 MS. RICHARDS: .....and it also landed pretty 2 down dip. Sarah can go point. But it -- it is..... 3 COMMISSIONER CHMIELOWSKI: Got it. 4 MS. RICHARDS: .....it's been an online 5 producer for 18 years, has cummed 1.3 BCF of gas, so is 6 pretty definite proof that there is gas in this 7 accumulation and that's north of the fault. So we 8 think that that is -- that the fault is ceiling, but we 9 would like to -- our plan is to drill to the south of 10 the fault this coming fall, drill two wells, grass 11 roots wells from Bruce and test to the idea that we 12 have a major accumulation. 13 COMMISSIONER CHMIELOWSKI: To the south? 14 MS. RICHARDS: Yes. 15 COMMISSIONER CHMIELOWSKI: So I was just 16 curious if, you know, you haven't really been producing 17 or devoting time to gas production do you have 18 facilities and pipelines in place to handle..... 19 MS. RICHARDS: Yes. 20 COMMISSIONER WILSON: .....this gas? Yeah. 21 Okay. 22 MS. RICHARD: Yes, we do. Yep. And that's one 23 of the really cool upsides of this project or this idea 24 of developing Granite Point gas because we already have 25 facilities in place to bring gas to market immediately. AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 21 1 COMMISSIONER CHMIELOWSKI: Great. Okay. And 2 you -- I think I just have this in measured depth, but 3 it looks like you're proposing the Granite Point gas 4 pool in measured depth of, you know, over 4,500 feet 5 thick which is quite thick. 6 MS. RICHARDS: Yes. 7 COMMISSIONER CHMIELOWSKI: So I was just -- it 8 reminded me of another conservation order we did for 9 Beluga River unit where there was a limitation on the 10 thickness -- based on the thickness of the interval 11 there was -- making sure that, you know, when shallower 12 zones are perforated you don't end up with a 13 possibility of a fracturing or having crossflow over 14 this entire thick interval. So is that the same 15 situation here where you would want to plug back as you 16 perf up hole, do you plan to start at the bottom and 17 perf up? 18 MS. RICHARDS: Yes, because we don't have a ton 19 of well control for in -- across the gas band, we would 20 like the biggest pool possible because we're going to 21 try to drill if possible into our Tyonek, the various 22 Tyonek res -- we believe there's 4,000 feet of Tyonek 23 reservoir and then the plan would be to incrementally 24 perf bottoms up based on what we see in terms of gas 25 response, log response. And then -- yeah, and then get AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 22 1 pressures also. 2 COMMISSIONER CHMIELOWSKI: Right. So the frack 3 and core pressure would need to be checked as you move 4 up hole? 5 MS. RICHARDS: For sure. 6 COMMISSIONER CHMIELOWSKI: And thinking ahead 7 to, you know, at the end of life of these wells, you 8 know, as you plug and go up hole, how would you plan to 9 isolate, you know, the lower for perfs. For example, I 10 know sometimes cast iron bridge plugs are set all the 11 way up or you could set a cast iron bridge plug with 12 cement which would effectively plug that lower perf 13 interval. So when you get to the end of the well life 14 how would you plan to -- how would Hilcorp plan to 15 approach this, would you plan to set plugs with cement 16 as you move up hole? 17 MS. RICHARDS: I would imagine so, yes. 18 COMMISSIONER CHMIELOWSKI: Okay. 19 MS. RICHARDS: That's a pretty standard 20 procedure for what we do..... 21 COMMISSIONER CHMIELOWSKI: Okay. 22 MS. RICHARDS: .....across the basin. 23 COMMISSIONER CHMIELOWSKI: And so you're 24 planning to drill two wells to the south of the fault 25 currently, but tell me what slots do you have and do AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 23 1 you -- you could potentially expand it if you have 2 success? 3 MS. RICHARDS: For sure, yes. Yeah. 4 COMMISSIONER CHMIELOWSKI: Okay. And how many 5 slots were there again that you had available. 6 MS. RICHARDS: Eight, I believe. 7 COMMISSIONER CHMIELOWSKI: Eight. 8 MS. RICHARDS: Eight. Okay. 9 MS. FREY: This is Sarah Frey. We also worked 10 with the drilling department and our contractor. They 11 did a lot of anti collision work because the -- we do 12 have a lot of wells obviously shallow coming off. So 13 we are planning ahead in order to be able -- you know, 14 if we drill one well in the wrong place that eliminates 15 all of those other well slots as possibilities..... 16 COMMISSIONER CHMIELOWSKI: Right. 17 MS. FREY: .....for the future. So we did do a 18 lot of analysis, making sure we can at least get three 19 or four through the slider web underneath the platform 20 to make sure that we can have additional wells after 21 this year's program as well. 22 COMMISSIONER CHMIELOWSKI: Right. You're 23 talking about close (indiscernible) as you're drilling 24 out? 25 MS. FREY: Yeah. AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 24 1 COMMISSIONER CHMIELOWSKI: Yeah. Okay. 2 MS. RICHARDS: So Sarah was -- this is Meredyth 3 Richards. That was -- Sarah was talking about Bruce 4 platform drilling. 5 COMMISSIONER CHMIELOWSKI: Uh-huh. 6 MS. RICHARDS: So we obviously have Anna and 7 Granite Point platforms too so there's opportunity 8 there. It's a long, skinny structure and we're not 9 going to be able to drain it purely from access from 10 Bruce. So in the case of success there would be 11 drilling from Anna and Granite Point theoretically. 12 COMMISSIONER CHMIELOWSKI: Great. And do you 13 have any idea of how much gas you might produce in the 14 short term, long term, any sort of range? 15 MS. RICHARDS: Our preliminary work is very 16 rough and based on a wide range of porosities..... 17 COMMISSIONER CHMIELOWSKI: Uh-huh. 18 MS. RICHARDS: .....we just don't have a good 19 understanding of our rock properties, like fine tuned, 20 right, because our data is pretty limited. We estimate 21 between 40 and 150 BCF of gas in place and recovery 22 factors between 60 and 80 percent, we're not totally 23 sure of drive mechanism at this point. Tyonek in the 24 basin is typically depletion drive so you would see 25 potentially closer to 80 percent recovery range, from AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 25 1 about 40 to 150 BCF. 2 COMMISSIONER CHMIELOWSKI: Great. That's all I 3 have for now. 4 CHAIRMAN HUBER: Commissioner Wilson, 5 additional questions. 6 COMMISSIONER WILSON: Nothing additional. 7 CHAIRMAN HUBER: Representatives from Hilcorp, 8 anything you want to add at this point? 9 MS. RICHARDS: This is Meredyth Richards again. 10 The point of this is to preemptively get a gas pool 11 defined so that we are able to plan for success and 12 most efficiently and optimally develop this gas 13 resource. So we're hoping to just like put the cart 14 before the horse a little bit and get everything in 15 order before we drill these wells so we can bring them 16 online as efficiently as possible. 17 CHAIRMAN HUBER: Well, I'm sure it's not a loss 18 to anybody in this room or people in southcentral 19 Alaska, the continuing need for additional gas 20 resources. 21 MS. RICHARDS: On the advice of counsel I'm 22 being told to tell you that the Bruce 86-9 which is our 23 one producing well to the north of the fall was drilled 24 in 1993. So it's been quite a while and even since 25 that time that wasn't -- it was sort of a surprise gas AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 26 1 well. So we're excited about the subsurface 2 opportunity and actually to go chase this gas. We 3 think it's a really good opportunity for as a company 4 and as a community. 5 CHAIRMAN HUBER: Okay. So thank you for the 6 presentation. We're going to take a quick recess now 7 and confer with Staff. We'll do that in 20 minutes. 8 Let's come back at 10 of 11:00. 9 (Off record) 10 (On record) 11 CHAIRMAN HUBER: We're back on the record at 12 10:50 a.m. Our allotted time actually worked for the 13 conversation that we needed to have. One thing that 14 I'll point out and we had a little bit in our 15 discussion in the past, the slides in our packets, 16 especially Slides 11 through 13, you can read -- 17 they're more legible, you can read the keys, you can 18 read the different context better on the files that we 19 received, even if we've blown them up electronically 20 they pixelate out, so we'd like to ask you to get us 21 either a file with -- with more data that will help us 22 be able to see all of those things. 23 And now we'll go back to questions from the 24 Commissioners. 25 COMMISSIONER WILSON: Yeah, I've got a couple AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 27 1 of questions. First looking back at the Anna 28 RD 2 well and, you know, just checked it on the poster here 3 too, it looks like there were substantial gas shows in 4 the lower Beluga there, do you agree? 5 MS. FREY: Do you mean on the Slide 13 log or 6 do you mean further up hole than in the..... 7 COMMISSIONER WILSON: Yeah, the -- well, the 8 Slide 13 and just yeah, the lower Beluga as shown on 9 the poster. 10 MS. FREY: Are you referring -- sorry, this is 11 Sarah Frey. You're referring to the B90 interval, is 12 that..... 13 COMMISSIONER WILSON: That's correct, yeah. 14 MS. FREY: It is named the B90, the requested 15 top of the Tyonek is actually a little bit higher than 16 that so I would consider it a Tyonek sand..... 17 COMMISSIONER WILSON: Aw, okay. 18 MS. FREY: .....I guess, yes. 19 COMMISSIONER WILSON: That clears it up. Okay. 20 MS. FREY: Yes. 21 COMMISSIONER WILSON: Yeah, because I was going 22 to ask them where your -- I know in some of the text 23 you're setting your surface shoe in the Beluga and I 24 was going to ask at what point just so as not to cover 25 up any resource with your surface hole, yeah. Okay. AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 28 1 MS. FREY: Yes. The majority of them are set a 2 couple hundred feet above this interval so they were 3 able to have that full section. 4 COMMISSIONER WILSON: Okay. 5 MS. FREY: And our intention for our well 6 design is to have our surface section much, much higher 7 and drill the full wellbore with one string so that any 8 potential things we do see, even shallower than the B90 9 would be producible should we think that they have gas 10 charge. 11 COMMISSIONER WILSON: Okay. So one of the 12 things that ultimately, you know, this agency will be 13 charged with is just evaluating the conservation of 14 resource down the road. And so for that, you know, we 15 will want to constrain the resource that, you know, we 16 feel is in the ground as tightly as possible. And I 17 realize at this point you don't have a lot of data to 18 go on from the reservoir, but we were hoping you could 19 share with us a little bit about what data you plan to 20 collect so that we can better evaluate the resource? 21 MS. FREY: This is Sarah Frey. 22 CHAIRMAN HUBER: Right before you answer. So 23 as I understood it it was between 40 and 150 of BCF 24 that you're..... 25 MS. RICHARDS: That's our estimation right now. AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 29 1 CHAIRMAN HUBER: Thanks. 2 MS. FREY: The planned program for this 3 upcoming year in order to test the oil -- gas in place 4 would be we're going to plan two wells, one to prove 5 that we have the well stability to actually get our 6 completion down and then in the second well we'll get 7 more open hole logs. We're looking at different tools 8 to do geo tap pressures for sand, we're trying to weigh 9 the risks of getting sidewall cores. Again the wells 10 will be at a very high trajectory so trying to figure 11 out if the tools are capable of doing that or if we'll 12 be able to just determine what we like from the 13 cuttings. We'll be getting -- well, we'd like to test 14 the sands individually, make sure if the geo tap tool 15 does not come in with our pressures we will be able to 16 test those separately and make sure that -- we have no 17 reason to believe that they shouldn't be all in the 18 same gradient and they're all relatively close to one 19 another in this particular interval. Obviously as 20 Jessie mentioned earlier if they're deeper we would be 21 far more concerned with the commingling of all of them 22 together. But in this particular case we would expect 23 to do as much data gathering as possible in our two 24 well program with the log suites as -- that we can get 25 off of the rig with the current well trajectories AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 30 1 planned. 2 COMMISSIONER WILSON: Would it be a log suite 3 similar to the Anna well? 4 MS. FREY: Yes, triple combo would be the 5 minimum log suite. We're also investigating if we can 6 put a sonic log on there as well as the dip meter since 7 a lot of the structure is a little bit uncertain as far 8 as where that west limb begins so we'd like to get 9 image logs as well. 10 MS. RICHARDS: This is Meredyth Richards. To 11 add a little bit to that in our other experience 12 drilling modern wells with triple combos looking for 13 gas, they have been incredibly successful and helpful 14 to us. So we see a lot of benefit just having triple 15 combo even, so the more data we get on top of that 16 would just help us even more. But even if -- this 17 first well we'll have a triple combo and we're just 18 trying to get the well mechanically to TD, that should 19 provide a wealth of information for us in and of 20 itself. 21 COMMISSIONER WILSON: You're not planning any 22 conventional core then? 23 MS. FREY: No, unfortunately not. 24 MS. RICHARDS: The geologist always wants that. 25 COMMISSIONER CHMIELOWSKI: And so you're data AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 31 1 gathering just to make sure I understand will help 2 inform your frack gradient and your core pressures as 3 you go down so you can manage that as you go back to 4 perf up hole? 5 MS. FREY: Yes, that's correct. And also help 6 with mineralogy and understanding of kind of what our 7 log responses are actually telling us as well. 8 COMMISSIONER CHMIELOWSKI: Okay. 9 MS. RICHARDS: It -- this is Meredyth Richards, 10 it will also shed light on our perm that will allow us 11 to do better in terms of our modeling to understand 12 development prospects for, you know, well spacing for 13 the entire structure and most efficiently draining the 14 entire gas that we find. 15 CHAIRMAN HUBER: Can you give us any insight to 16 the condition of the platform that you're planning on 17 doing the work from? 18 MS. FREY: The Bruce is in good condition, 19 we've confirmed that the compressors -- our facility 20 engineers are working to make sure that all the 21 equipment is up and running. It's been an active 22 platform since the beginning of Bruce's life. So 23 there's facilities operators there consistently and we 24 do maintenance as we would any other operational 25 facility. AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 32 1 CHAIRMAN HUBER: Thank you. 2 MS. RICHARDS: We have -- we have no concerns 3 really about the infrastructure at Bruce as it relates 4 to drilling these gas wells. 5 CHAIRMAN HUBER: Thank you. 6 COMMISSIONER CHMIELOWSKI: Is there a rig on 7 the platform, are you planning to bring like a jack-up 8 over. 9 MS. FREY: This is Sarah Frey. There's no rig. 10 We're planning on bringing the Spartan to the Bruce 11 platform. 12 COMMISSIONER CHMIELOWSKI: Okay. 13 MS. FREY: And the leg we've chosen is the best 14 leg in order for the Spartan to come to that rig as 15 well as far as pipelines coming in and exiting the rig 16 has no issue getting to the leg we've chosen for the 17 development. 18 COMMISSIONER CHMIELOWSKI: Okay. And I'd like 19 to ask Hilcorp to provide like a generic wellbore 20 schematic for these grass roots gas wells that would 21 generally show, you know, about where surface casing 22 will be sent, intermediate casing and where you plan to 23 cement. And just let us know how much time you would 24 need to provide that and we can keep the record open. 25 CHAIRMAN HUBER: Additional questions, AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 33 1 Commissioner Wilson. 2 COMMISSIONER WILSON: I guess -- yeah, as long 3 as you're resubmitting some of the figures with more 4 legible annotation and the confusion with the B90, 5 could you be very specific about the -- you know, the 6 formation tops and contacts and that sort of thing with 7 the formation names. You fooled me on that one. 8 MS. FREY: Yes, understood. I was trying to 9 maintain the convention of previous people. But yes, I 10 will clarify that in the documentation. 11 COMMISSIONER CHMIELOWSKI: So I think our two 12 asks are what, clearer figures and logs and then the 13 wellbore standard schematic. So how much time do you 14 think Hilcorp would need to provide that? 15 MS. FREY: Is a PDF acceptable, it's a document 16 that you can zoom in on, is that an appropriate format 17 rather than just slide quality or do you need slide 18 quality? 19 COMMISSIONER CHMIELOWSKI: Yes. Yes, a PDF, 20 you know, if you can give us like a larger file size, 21 you know, separately..... 22 MS. FREY: Yeah, definitely. 23 COMMISSIONER CHMIELOWSKI: .....that would be 24 great. Correct? 25 MS. FREY: We have it today. So..... AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 34 1 COMMISSIONER CHMIELOWSKI: Oh, okay. 2 CHAIRMAN HUBER: Something that won't pixelate 3 out when we blow it up. 4 COMMISSIONER WILSON: Yeah, I was going to say 5 what went through Samantha today, I did zoom in on it 6 earlier and it pixelated on me. I couldn't read it any 7 better than on the other, yeah. 8 MS. RICHARDS: We -- our -- this is Meredyth 9 Richards. Our drilling engineer is out of town right 10 now, but we can -- I think he's back by the end of the 11 week potentially. End of next week at the latest to 12 get you a schematic. 13 COMMISSIONER CHMIELOWSKI: Sure that sounds 14 great. 15 MS. RICHARDS: Yeah. 16 COMMISSIONER CHMIELOWSKI: So we'll keep the 17 record open and if you decide you need more time just 18 let us know, but it sounds like Friday, June 16th, 19 close of business say would be -- we'll keep the record 20 open until then? 21 MS. FREY: Yeah. 22 COMMISSIONER CHMIELOWSKI: Okay. 23 CHAIRMAN HUBER: There's no additional 24 testimony from the presenters at this time, 25 (No comments) AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 35 1 CHAIRMAN HUBER: Additional comments from the 2 Commissioners at this time. 3 COMMISSIONER CHMIELOWSKI: No, I wish you luck 4 on this endeavor. Hope you find lots of gas. 5 COMMISSIONER WILSON: Yeah, not a question, but 6 yeah, just to underscore what Brett said earlier, 7 compliment you on exploring for gas and especially as a 8 homeowner in southcentral with a gas boiler, right. 9 CHAIRMAN HUBER: Okay. We've now come to the 10 opportunity if we have anybody from the public that 11 wishes to provide testimony. I do not have anybody 12 signed up in the room today. I don't see anybody else 13 in the room interested in testifying. Samantha, can 14 you tell me do we have anybody online today. 15 (No comment) 16 CHAIRMAN HUBER: Okay. Well let's give them a 17 chance to do that. So it's an important part of the 18 proceedings. Obviously some hearings gather more 19 public attention than others do, but we do serve the 20 public and that is our charge. So we always have the 21 opportunity for the public to comment. For anybody 22 participating remotely on Teams the code to unmute is 23 star six. If you're having problems with that give us 24 a call, again at 793-1223. If you are interested in 25 testifying you can raise your hand or unmute. We're AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 36 1 going to give a little bit of time to see if anybody 2 sounds in because sometimes that process can take a 3 minute at the other end of the line. So I call for 4 public testimony, anybody online today. 5 (No comments) 6 CHAIRMAN HUBER: Again a call for public 7 testimony on today's hearing for anyone online. 8 (No comments) 9 CHAIRMAN HUBER: As the record is -- we have 10 nobody that wishes to testify online today, but as the 11 record is going to continue to be open until Friday the 12 16th, public comment will be accepted through that time 13 as well. So anybody that wants to provide comment can 14 do so through the regular means in writing. 15 Any further comments today from Commissioner 16 Chmielowski or Commissioner Wilson. 17 COMMISSIONER CHMIELOWSKI: No, thank you. 18 COMMISSIONER WILSON: I'm good, thanks. 19 CHAIRMAN HUBER: Hilcorp, again thank you for 20 your interest, for being here today. Thanks for the 21 presentation, to agreeing to provide the additional 22 documentation, we look forward to hearing that. Have 23 no business -- no further business to come before the 24 Commission today this meeting is adjourned at 11:05. 25 (END OF PROCEEDINGS) AOGCC 6/6/2023 ITMO: HILCORP ALASKA'S REQUEST TO AMEND CONSERVATION ORDER 76A Docket No. CO 23-002 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 37 1 TRANSCRIBER'S CERTIFICATE 2 I, Salena A. Hile, hereby certify that the 3 foregoing pages numbered 02 through 37 are a true, 4 accurate, and complete transcript of proceedings in 5 Docket No.: CO 23-002, transcribed under my direction 6 from a copy of an electronic sound recording to the 7 best of our knowledge and ability. 8 9 _______________ _______________________________ 10 DATE SALENA A. HILE, (Transcriber) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Company Built on Energy June 6, 2023 Proposed Amendment to CO 76A: formation of Initial Gas Pool within the Granite Point Field Granite Point Platform Integrity Urgency Ownership Alignment Innovation Slide 1 David Duffy, Landman Sarah Frey, Geologist Meredyth Richards, Reservoir Engineer Who is Hilcorp?Who is Hilcorp?Cook Inlet Operations HILCORP POSITION WITHIN COOK INLET 2012 2012 2012 2013 2015 2017 2017 2019 Trans-Alaska Pipeline System Prudhoe Bay Arctic Ocean Pacific Ocean Gulf of Alaska Beaufort Sea Chuckchi Sea Bering Sea ALASKA CANADA Spurr Spark Monopod King Salmon Grayling Dolly Varden Steelhead Baker A C Dillon Bruce Anna Granite Point Tyonek KLU-Julius R Slide 2 Who is Hilcorp?Who is Hilcorp?Application to Amend CO 76ASlide 3 Who is Hilcorp?Who is Hilcorp?Gas Well Spacing Slide 4 Who is Hilcorp?Who is Hilcorp?Typo, Page 2. Slide 5 Who is Hilcorp?Who is Hilcorp?Notice Slide 6 Who is Hilcorp?Who is Hilcorp?Granite Point Unit Field/Map Slide 7 Who is Hilcorp?Who is Hilcorp?Ownership: GPU Exhibits Slide 8 Who is Hilcorp?Who is Hilcorp?Ownership: GPU Exhibits Slide 9 Who is Hilcorp?Who is Hilcorp?Structure Map (Exhibit C)Slide 10 Who is Hilcorp?Who is Hilcorp?Cross Section (Exhibit D)Slide 11 Who is Hilcorp?Who is Hilcorp?TM1 Map Slide 12 Who is Hilcorp?Who is Hilcorp?GP Gas ProspectSlide 13 Thank you Sarah Frey (Geologist); Meredyth Richards (Reservoir Engineer); David Duffy (Landman) Hilcorp Alaska, LLC Slide 14 Exhibit A: 2023 Granite Point Unit/Field Map Exhibit B: 2023 Granite Point Unit Exhibits Granite Point Unit Exhibit A Page 1 of 2 Last Update: 2/26/2015 Exhibit A Granite Point Unit Effective March 1, 2015 Working Working Tract Mineral Mineral Royalty ORRI ORRI Interest Interest Tract Tract Legal Description Acreage Lease # Owner Interest Percent Owner Percent Ownership Owner % Ol TION, Rl IW SM, AK 3,809.00 HAK # 600953 State of Alaska, 100.00% 12.500% Hilcorp Alaska, LLC 100.00% Section 18: All; ADL # 18761 Department of Natural Section 19: All; Resources T10N, R12W, SM, AK Section 13; All; Section 14; All; Section 23: All; Section 24: All. 02 TI ON, R12W, SM, AK 200.00 HAK # 605872 State of Alaska, 100.00% 12.500% Hilcorp Alaska, LLC 100.00% Section 27: E1/2E1/2; ADL # 374044 Department of Natural Section 34: NE1 /4NE1 /4. Resources 03 TI ON, RI2W, SM, AK 680.00 HAK # 605873 State of Alaska, 100.00% 12.500% Hilcorp Alaska, LLC 100.00% Section 25: NW1 /4NW1/4; ADL # 374045 Department of Natural Section 26: N1 /25 SWI /4, Wl /2SEI /4; Resources Section 35: N1 /2NWI /4. 04 T10N, R12W5 SM, AK 3,070.00 HAK # 605833 State of Alaska, 100.00% 12.500% Hilcorp Alaska, LLC 100.00% Section 03: N /2, 320 acres; ADL # 17586 Department of Natural Resources TI IN,, R12W, SM, AK Section 24: Fractional; All; Section 25: Fractional; All; Section 26: Fractional; All; Section 27: Fractional; All; Section 34: All; Section 35: All; Section 36: All. Granite Point Unit Exhibit A Page 1 of 2 Last Update: 2/26/2015 Working Working Tract Mineral Mineral Royalty ORRI ORRI Interest Interest Tract Tract Legal Description Acreage Lease # Owner Interest Percent Owner Percent Ownership Owner % 05 T1 IN, RI 1W, SK AK 21592.00 HAK # 605834 State of Alaska, 100.00% 12.500% Hilcorp Alaska, LLC 100.00% Section 17: Fractional; ADL # 17587 Department of Natural Section 18: Fractional; Resources Section 19: Fractional; Section 20: All; Section 29: All; Section 30: All. 06 T1 ON, R11 W, SK AK 5,060.00 HAK # 605835 State of Alaska, 100.00% 12.500% Hilcorp Alaska, LLC 100.00% Section 05: All; ADL # 18742 Department of Natural Section 06.: All; Resources Section 07: All; Section 08: All; T 1 ON, R12W, SKI AK Section 01: All; Section 12: All; TI IN, R 11 W, SK AK. Section 31: All; Section 32: All. Total Unit Acreage 15,411.00 Granite Point Unit Exhibit A Last Update: 2/26/2015 Working Interest Net Acres Unit % Owner Uncommited 0.00 0.00% Hilcorp Alaska, LLC 15,411.00 100.00% Page 2 of 2 Exhibit C: Structure Map Exhibit D: Cross Section Exhibit E: Proof of Notice Exhibit E: Delivery Receipts 3 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO-23-002 Hilcorp Alaska, LLC (Hilcorp), by letter dated March 24, 2023, requested the Alaska Oil and Gas Conservation Commission (AOGCC) amend Conservation Order No. 76A to define the Granite Point Gas Pool in the Granite Point Field (GPF). Pool rules are applied for under 20 AAC 25.520 for the purpose of prescribing rules, that differ from the normal statewide rules found in 20 AAC 25, for the development of a defined pool. The rules are established to streamline the development of the pool while still protecting correlative rights and ensuring maximum recovery. A pool is an underground reservoir containing, or appearing to contain, a common accumulation of oil or gas. Absent an order to the contrary, the statewide rules found in 20 AAC 25 govern development of oil or gas pools. However, sometimes an operator will apply to the AOGCC for an order to establish pool rules to govern a specific pool. Pool rules typically define the vertical and map extent of a particular pool and establish rules that modify the statewide requirements to enable more efficient operations while providing an equally effective means of protecting underground freshwater, protecting correlative rights, and conducting safe and environmentally sound operations. Hilcorp is applying for rules to define a gas pool within the GPF and prescribe rules for the gas pool development. This notice does not contain all the information filed by Hilcorp. You may obtain more information about this filing by contacting the AOGCC’s Special Assistant, Samantha Carlisle, at (907) 793-1223 or samantha.carlisle@alaska.gov. A public hearing on the matter has been scheduled for June 6, 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: 491 156 598#. 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 MS Teams. In additions, written comments regarding this application may be submitted to the AOGCC at 333 West 7th Avenue, Anchorage, AK 99501 or samantha.carlisle@alaska.gov. Comments must be received no later than the conclusion of the June 6, 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 June 6, 2023. Brett W. Huber, Sr. Chair, Commissioner Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2023.04.20 14:31:15 -08'00' 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 ______________________________________ 04/23/2023 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 24th day of April 2023. Account #: 100869 ST OF AK/AK OIL AND GAS CONSERVATION COMMISSION333 W. 7TH AVE STE 100, ANCHORAGE, AK 99501 Order #: W0037671 Cost: $316 Notice of Public HearingSTATE OF ALASKAALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO-23-002 Hilcorp Alaska, LLC (Hilcorp), by letter dated March 24, 2023, requested the Alaska Oil and Gas Conservation Commission (AOGCC) amend Conservation Order No. 76A to define the Granite Point Gas Pool in the Granite Point Field (GPF). Pool rules are applied for under 20 AAC 25.520 for the purpose of prescribing rules, that differ from the normal statewide rules found in 20 AAC 25, for the development of a defined pool. The rules are established to streamline the development of the pool while still protecting correlative rights and ensuring maximum recovery. A pool is an underground reservoir containing, or appearing to contain, a common accumulation of oil or gas. Absent an order to the contrary, the statewide rules found in 20 AAC 25 govern development of oil or gas pools. However, sometimes an operator will apply to the AOGCC for an order to establish pool rules to govern a specific pool. Pool rules typically define the vertical and map extent of a particular pool and establish rules that modify the statewide requirements to enable more efficient operations while providing an equally effective means of protecting underground freshwater, protecting correlative rights, and conducting safe and environmentally sound operations. Hilcorp is applying for rules to define a gas pool within the GPF and prescribe rules for the gas pool development. This notice does not contain all the information filed by Hilcorp. You may obtain more information about this filing by contacting the AOGCC’s Special Assistant, Samantha Carlisle, at (907) 793-1223 or samantha.carlisle@alaska.gov. A public hearing on the matter has been scheduled for June 6, 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: 491 156 598#. 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 MS Teams. In additions, written comments regarding this application may be submitted to the AOGCC at 333 West 7th Avenue, Anchorage, AK 99501 or samantha.carlisle@alaska.gov. Comments must be received no later than the conclusion of the June 6, 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 June 6, 2023. Brett W. Huber, Sr.Chair, Commissioner Pub: APr. 23, 2023 STATE OF ALASKA THIRD JUDICIAL DISTRICT 2024-07-14 Document Ref: F5LNB-ETRGJ-ZONFW-RMHSZ Page 7 of 39 From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] CO-23-002 Public Hearing Notice Hilcorp GPF gas pool rules Date:Thursday, April 20, 2023 3:12:11 PM Attachments:CO-23-002 Public Hearing Notice Hilcorp GPF gas pool rules.pdf Hilcorp Alaska, LLC (Hilcorp), by letter dated March 24, 2023, requested the Alaska Oil and Gas Conservation Commission (AOGCC) amend Conservation Order No. 76A to define the Granite Point Gas Pool in the Granite Point Field (GPF). Samantha Carlisle 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 2 1 Davies, Stephen F (OGC) From:Davies, Stephen F (OGC) Sent:Tuesday, March 21, 2023 8:54 AM To:Roby, David S (OGC); Guhl, Meredith D (OGC); Samantha Carlisle (samantha.carlisle@alaska.gov) Subject:RE: [EXTERNAL] RE: Hilcorp's proposed amendment to Conservation Order 76A (Granite Point Field) to establish the Granite Point Gas Field and related gas well spacing rule Dave,    Sarah’s geology description, below, is adequate to support Hilcorp’s pool rules application.     Please let me know if I can help further.    Thanks and be well,  Steve   CONFIDENTIALITY NOTICE:  This e‐mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission  (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use  or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e‐mail, please delete it, without first saving or forwarding  it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Steve Davies at 907‐793‐1224 or steve.davies@alaska.gov.    From: Sarah Frey <sarah.frey@hilcorp.com>   Sent: Monday, March 20, 2023 3:38 PM  To: David Duffy <dduffy@hilcorp.com>; Roby, David S (OGC) <dave.roby@alaska.gov>; Davies, Stephen F (OGC)  <steve.davies@alaska.gov>; Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov>  Subject: RE: [EXTERNAL] RE: Hilcorp's proposed amendment to Conservation Order 76A (Granite Point Field) to establish  the Granite Point Gas Field and related gas well spacing rule    Hello!  So sorry to take my time in responding to this email! It’s been a busy few weeks.  The proposed gas pool is primarily targeting the Upper Tyonek sands. Those have been the only successful gas sands at  Granite Point Field and have all been commingled since 1993. The proposal is that they continue to be treated as the  same pool.  Here is a more formal summary of the geologic foundation guiding our Granite Point Gas Pool proposal:  Granite Point Field – Gas Pool Geology  Granite Point Field’s discovery well and currently the only gas well at the field is Granite Point State 17586 No. 9 (BR 86‐ 09). Drilled from the Bruce platform in 1993 and completed in two Tyonek sands, BR 86‐09 has successfully supplied  1.33 BCF fuel gas to the platform over its many years online. The well was online between 1993‐2005 and then not  online again until Hilcorp returned it to production in 2017. Our proposal for the Granite Point Gas Pool is to consider  the productive Tyonek sands in BR 86‐09 and any other Tyonek gas sands encountered during our upcoming drilling  program (Fall 2023) as the same gas pool.  2 The Tyonek Formation at Granite Point Field records deposition of both longitudinal (braided, meandering, and  anastomosed stream types) fluvial systems deposited along the basin axis and transverse wet alluvial fans deposited  perpendicular to the basin axis. The proposed gas pool at Granite Point Field will be in the “Upper Tyonek” and has large  sand and conglomerate‐rich channels that span the entire of the field (roughly six sections in length). Neither the  Sterling formation nor the Upper Beluga formation are present anywhere at Granite Point Field; both formations have  been uplifted and eroded. The practice at Granite Point Field has been to set surface casings in the Lower Beluga. From  the Mobil Granite Point No. 1 type well, we know the boundary between the Beluga formation and the Tyonek  formation occurs somewhere around ~3000’ MD. Hilcorp’s proposal is to ensure that the Granite Point Gas Pool  comprises this entire unit, with the proposed pool beginning at the first consistent coal marker in the Mobil Granite  Point No. 1 type well (~3095’ MD).  Wells drilled across Granite Point Field’s three platforms consistently have gas indicators in mud logs and in open‐hole  logs starting at this approximate Tyonek/Beluga boundary. Due to the placement of the platforms relative to the gas  structure, all wells are in structurally low locations (this includes BR 86‐09). The target sands for the upcoming drilling  program are all within this Upper Tyonek formation. However, it is possible that other, shallower sands could contain  gas as our proposed well trajectories land farther up‐dip than any other wells at Granite Point Field. Upon confirmation  that these sands are gas‐charged and suitable for development, an amendment to incorporate these sands into the  Granite Point Gas Pool will be submitted.    Please let me know if this is sufficient information to move forward with our application.     Sarah Frey  (970)274‐9398    From: David Duffy <dduffy@hilcorp.com>   Sent: Thursday, March 2, 2023 5:38 PM  To: Roby, David S (OGC) <dave.roby@alaska.gov>; Davies, Stephen F (OGC) <steve.davies@alaska.gov>; Carlisle,  Samantha J (OGC) <samantha.carlisle@alaska.gov>  Cc: Sarah Frey <sarah.frey@hilcorp.com>  Subject: RE: [EXTERNAL] RE: Hilcorp's proposed amendment to Conservation Order 76A (Granite Point Field) to establish  the Granite Point Gas Field and related gas well spacing rule    Got it.  I’ve already started the conversation with Sarah.  Thank you.    David     From: Roby, David S (OGC) <dave.roby@alaska.gov>   Sent: Thursday, March 2, 2023 5:27 PM  To: David Duffy <dduffy@hilcorp.com>; Davies, Stephen F (OGC) <steve.davies@alaska.gov>; Carlisle, Samantha J (OGC)  <samantha.carlisle@alaska.gov>  Cc: Sarah Frey <sarah.frey@hilcorp.com>  Subject: RE: [EXTERNAL] RE: Hilcorp's proposed amendment to Conservation Order 76A (Granite Point Field) to establish  the Granite Point Gas Field and related gas well spacing rule       CAUTION: External sender. DO NOT open links or attachments from UNKNOWN senders.  3 Hi David,    I think we need it before we can schedule the hearing and publish the public notice because I don’t think it’s a complete  application without this information.    Regards,    Dave Roby  (907)793‐1232    From: David Duffy <dduffy@hilcorp.com>   Sent: Thursday, March 2, 2023 4:03 PM  To: Roby, David S (OGC) <dave.roby@alaska.gov>; Davies, Stephen F (OGC) <steve.davies@alaska.gov>  Cc: Sarah Frey <sarah.frey@hilcorp.com>  Subject: RE: [EXTERNAL] RE: Hilcorp's proposed amendment to Conservation Order 76A (Granite Point Field) to establish  the Granite Point Gas Field and related gas well spacing rule    Understood.  I recall that was the primary discussion with Sarah at your office.  I suspect she’s got most of that  information handy.  As to procedure, is this something you want presented at the hearing, or would a pre‐hearing  submittal suffice?    Thanks,  David     From: Roby, David S (OGC) <dave.roby@alaska.gov>   Sent: Thursday, March 2, 2023 3:23 PM  To: David Duffy <dduffy@hilcorp.com>; Davies, Stephen F (OGC) <steve.davies@alaska.gov>  Subject: [EXTERNAL] RE: Hilcorp's proposed amendment to Conservation Order 76A (Granite Point Field) to establish the  Granite Point Gas Field and related gas well spacing rule      Hi David,    I don’t see any discussion of the geology of the proposed pool in this application.  I’m assuming that it covers multiple  formations otherwise there’d be no reason to establish pool rules for it since the interwell spacing requirements of our  regulations are no longer enforceable since the underlying statute no longer supports them.  So we’re going to need a  geologic discussion to support the vertical limits of the proposed pools, and if it does span multiple formations as I  suspect a discussion of why we should treat this as one pool instead of multiple pools.    Regards.     Dave Roby  (907)793‐1232    From: David Duffy <dduffy@hilcorp.com>   Sent: Wednesday, March 1, 2023 2:56 PM  To: Roby, David S (OGC) <dave.roby@alaska.gov>; Davies, Stephen F (OGC) <steve.davies@alaska.gov>  Cc: Nottingham, Derek W (DNR) <derek.nottingham@alaska.gov>; Chaitanya Borade <cborade@ciri.com>;  J.hendrix@furiealaska.com   CAUTION: External sender. DO NOT open links or attachments from UNKNOWN senders.  4 Subject: Hilcorp's proposed amendment to Conservation Order 76A (Granite Point Field) to establish the Granite Point  Gas Field and related gas well spacing rule    Gentlemen,  Please find attached electronic copy of Hilcorp’s proposal to establish a new gas pool and related spacing rules at the  Granite Point Field.  There are three landowners / owners within 3000’ of the affected area:  State of Alaska, CIRI and  Furie.  For convenience, all three are CC’d here.  Formal proof of notice will be sent separately to AOGCC.  Hardcopies  will get mailed out later today or tomorrow.      Best regards,     David Duffy Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, Alaska 99503 Direct: 907-564-4419 Cell: 907-301-2629 Email: dduffy@hilcorp.com     The information contained in this email message is confidential and may be legally privileged and is intended only for the use of the individual or entity named above. 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If you are not an intended recipient or if you have received this message in error, you are hereby notified that any dissemination, distribution, or copy of this email is strictly prohibited. If you have received this email in error, please immediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete this message. While all reasonable care has been taken to avoid the transmission of viruses, it is the responsibility of the recipient to ensure that the onward transmission, opening, or use of this message and any attachments will not adversely affect its systems or data. No responsibility is accepted by the company in this regard and the recipient should carry out such virus and other checks as it considers appropriate.      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.   1 By Samantha Carlisle at 3:13 pm, Mar 02, 2023