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Home My WebLink AboutCO 510 CINDEX CONSERVATION ORDER 510C Kenai Gas Field Kenai Peninsula Borough, Alaska 1. April 26, 2023 Hilcorp’s request to amend CO 510B 2. May 9, 2023 Additional information 3. May 19, 2023 Notice of Public Hearing, Affidavit of Publication, email list STATE OF ALASKA ALASKA GAS AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC to amend Conservation Order No. 510B to expand vertically the Sterling Gas Pool 3 within the Kenai Unit, pursuant to 20 AAC 25.520(b) ) ) ) ) ) ) ) ) ) ) ) ) Docket Number: CO-23-007 Conservation Order 510C Kenai Gas Field Kenai Unit Kenai Sterling Gas Pool 3 (Expanded) Kenai Sterling Gas Pools 4, 5.1, 5.2, & 6 Kenai Beluga/Upper Tyonek Gas Pool Kenai Tyonek Gas Pool 1 Kenai Deep Tyonek Gas Pool Kenai Peninsula Borough, Alaska August 24, 2023 IT APPEARING THAT: 1. Hilcorp Alaska, LLC (Hilcorp), by letter dated April 26, 2023, requested the Alaska Oil and Gas Conservation Commission (AOGCC) amend Conservation Order No. 510B (CO 510B) to expand vertically the Sterling Gas Pool 3 (SGP3) within the Kenai Unit, pursuant to 20 AAC 25.520(b). 2. Pursuant to 20 AAC 25.540, the Alaska Gas and Gas Conservation Commission (AOGCC) scheduled a public hearing for July 18, 2023. On May 19, 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 and mailed printed copies of the notice to all persons on the AOGCC’s mailing distribution list. On May 21, 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 tentatively scheduled public hearing was vacated. 5. Hilcorp’s application 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 CO 510C August 24, 2023 Page 2 of 6 operations while providing an equally effective means of protecting underground freshwater, protecting correlative rights, and conducting safe and environmentally sound operations. CO 510B currently defines the vertical and lateral extent of the SGP3, and it governs development, operations, and reporting for this pool. Hilcorp is applying to raise the upper (shallowest) limit of this pool from the geologic horizon equivalent to 4,175’ measured depth (MD) in reference well KU 21-6 (API Number 50-133-10090-00-00) to the horizon equivalent to 3,725’ MD in that same well. FINDINGS: 1. Owners and Landowners: Hilcorp is the 100% Working Interest Owner for the leases within the affected area described below. Landowners are the U.S. Federal Government, State of Alaska, Hilcorp Alaska, LLC, Univar Corporation, and numerous private parties and entities that are listed in Hilcorp’s application Attachment 2. All land tracts currently within the KU are committed to the Unit Agreement. The Bureau of Land Management is Unit Manager for the KU. 2. Operator: Hilcorp is the operator for all leases within the Affected Area described below. 3. Affected Area: The Affected Area encompasses the entirety of the Kenai Unit (KU), which lies mostly onshore on the Kenai Peninsula but also extends onto adjacent, submerged state lands beneath the Cook Inlet. 4. Pool Definition: CO 510B defines, in descending stratigraphic order, the following gas pools: x Kenai Sterling 3, 4, 5.1, 5.2, and 6; x Beluga/Upper Tyonek; x Tyonek 1; and x Kenai Deep Tyonek. CO 510B identifies two reference wells—KU 21-6 (API Number 50-133-10090-00-00) and KU 41-18 (API Number 50-133-20228-00-00)—to define these pools by specifying an MD for the top and base of each pool within one of those wells. The proposed vertical expansion of the SGP3 encompasses geologic strata that lie within the Sterling Formation. 5. Pool Pressure: Pressure-measurement information provided by Hilcorp indicates the currently developed reservoirs within the SGP3 are normally pressured or under-pressured. Although no such data currently exists for the prospective reservoirs within the proposed vertical expansion, all observations to date indicate reservoirs within that interval will be normally pressured. 6. Future Development Description: Hilcorp plans to perforate and produce additional sandstone reservoirs that lie shallower than the currently defined upper boundary of the SGP3. Development of these reservoirs will increase ultimate recovery of hydrocarbon reserves that lie within the KU. 7. Well Spacing: Recent changes to portions of AS 31.05.100, which governs spacing between wells, have eliminated interwell spacing requirements within a pool. However, CO 510C August 24, 2023 Page 3 of 6 Regulations and all orders that pertain to offset distances from property lines remain in effect.1 CONCLUSIONS: 1. The SGP3 within the KU comprises a single gas pool per AOGCC statutes. 2. Pool rules for the development of the proposed vertical expansion of the SGP3 within the KU are appropriate. 3. Additional sandstone reservoirs to be included in the vertically expanded SGP3 lie within the same geologic formation, which is the Sterling Formation, and are expected to be normally pressured. 4. Unrestricted spacing between wells drilled to develop the SGP3 within the KU 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. 5. 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. 6. Rule 6 of CO 510B concerning administrative action has been superseded by regulation 20 AAC 25.556(d), as such the rule should be removed from this order. NOW THEREFORE IT IS ORDERED: Conservation Order 510B is superseded by this order (CO 510C) and its record is incorporated by reference into this order’s record. Development and operation of the Kenai Gas Field is subject to the following rules and the statewide requirements under 20 AAC 25 to the extent not superseded by these rules. Affected Area: Seward Meridian Township, Range Description T4N, R11W Section 3: Lot 4, SW 1/4 NW 1/4, W 1/2 SW 1/4 Sections 4, 5, 6, 7, and 8: All Section 9: N 1/2, SW 1/4, W 1/2 SE 1/4 Section 16: N 1/2 NW 1/4, SW 1/4 NW 1/4, NW 1/4 SW 1/4 Sections 17 and 18: All Section 19: Lot 1, NE 1/4 NW 1/4, NE 1/4 Section 20: N 1/2 NW 1/4, SW 1/4 NW 1/4 T4N, R12W Section 1: All Section 2: E 1/2 E 1/2 Section 11: E 1/2 NE 1/4 Section 12: All Section 13: Lots 5 through 12, easterly 2.50 acres of Lots 13 through 16, E 1/2 NW 1/4 NE 1/4, E 1/2 E 1/2, E 1/2 W 1/2 SE 1/4 NE 1/4, E 1/2 W 1/2 NW 1/4 SE 1/4, E 1/2 SW 1/4 NE 1/4, E 1/2 NW 1/4 SE 1/4, All of W 1/2 NE 1/4, E 1/2 NW1/4 lying westerly of coastline 1 See AOGCC’s Industry Guidance Bulletin 22-002 for more detailed information. CO 510C August 24, 2023 Page 4 of 6 T5N, R11W Section 17: Lots 8 and 9, NW 1/4 SW 1/4, S 1/2 SW 1/4, All of Kenai River Section 18: SE 1/4 SE 1/4 Section 19: Lots 2, 6 through 13, SE 1/4, E 1/2 E 1/2 SE 1/4 SW 1/4, NE 1/4, All SE 1/4 NW 1/4, NE 1/4 SW 1/4, S 1/2 SW 1/4 lying westerly of coastline Section 20: S 1/2, NW 1/4, SW 1/4 NE 1/4, NW 1/4 NE 1/4 Section 28: NW 1/4 NW1/4, S 1/2 NW 1/4, SW 1/4, W 1/2 SE 1/4, SE 1/4 SE 1/4 Sections 29 and 30: All Section 31: Lots 3 through 10, E 1/2, All that portion lying westerly of coastline Sections 32 and 33: All Section 34: NW 1/4 NW 1/4, S 1/2 NW 1/4, SW 1/4, W 1/2 SE 1/4 T5N, R12W Section 25: SE 1/4 NE 1/4, E 1/2 SE 1/4 Section 36: E 1/2 Rule 1. Definition of Pools (Restated from CO 510B, Revised this Order) a. Kenai Sterling Gas Pool 3 is the accumulation of gas that is common to and correlates with the accumulation found in the interval from 3,735' to 4,412' MD in reference well KU 21-6 (Revised this order). b. Kenai Sterling Gas Pool 4 is the accumulation of gas that is common to and correlates with the accumulation found in the interval from 4,412' to 4,576' MD in reference well KU 21-6 (Source: CO 510B). c. Kenai Sterling Gas Pool 5.1 is the accumulation of gas that is common to and correlates with the accumulation found in the interval from 4,576' to 4,880' MD in reference well KU 21-6 (Source: CO 510B). d. Kenai Sterling Gas Pool 5.2 is the accumulation of gas that is common to and correlates with the accumulation found in the interval from 4,880' to 5,250' MD in reference well KU 21-6 (Source: CO 510B). e. Kenai Sterling Gas Pool 6 is the accumulation of gas that is common to and correlates with the accumulation found in the interval from 5,250' to 5,520' MD in reference well KU 21-6 (Source: CO 510B). f. Kenai Beluga/Upper Tyonek Gas Pool is the accumulation of gas that is common to and correlates with the accumulation found in the interval from 4,780’ to 8,993' MD in reference well KU 41-18 (Source: CO 510B). g. Kenai Tyonek Gas Pool 1 is the accumulation of gas that is common to and correlates with the accumulation found in the interval from 8,993' to 9,890' MD in reference well KU 41-18 (Source: CO 510B). h. Kenai Deep Tyonek Gas Pool is the accumulation of gas that is common to and correlates with the accumulation found in the interval from 9,890' to 13,615' MD in reference well KU 41-18 (Source: CO 510B). CO 510C August 24, 2023 Page 5 of 6 Rule 2. Well Spacing (Restated from CO 510B) There shall be no restrictions as to well spacing except that no gas pay shall be opened in a well within 1,500’ of an external property line of the Affected Area described above where the owners and landowners are not the same on both sides of the line. Rule 3. Casing and Cementing Requirements (Restated from CO 510B) Surface casing shall be landed at not less than 1,200' or more than 2,000' and cement shall be circulated to the surface. Production casing shall be landed through the completion zone and cement shall cover and extend to at least 500' above each potentially productive sand interval. The use of multi-stage cementing procedures shall be permitted. Alternatively, a casing string shall be adequately cemented at an intermediate point and a liner landed through the completion zone. If a liner is run, the annular space behind the liner shall be filled with cement to at least 100' above the casing shoe or the top of the liner shall be squeezed with sufficient cement to provide at least 100' of cement between the liner and casing annulus. Cement must cover all potentially productive intervals behind the liner. Casing and well head equipment shall be hydrostatically tested to not less than 2,000 pounds per square inch pressure. Rule 4. Computed Bottomhole Pressure Surveys (Restated from CO 510B) A key well bottomhole pressure survey shall be taken in each pool upon AOGCC request; however, such surveys shall not be required more often than twice in any calendar year. Bottomhole pressure may be computed from surface measurements taken with a dead weight tester provided, however, than an approved bottomhole measuring device shall be used when the accuracy of the computed bottomhole pressure is questionable. The time, length and kind of survey, number and location of the wells to be tested, datum and other details may be determined by the operator subject to AOGCC approval. Rule 5. Downhole Commingling (Restated CO 510B) a. Commingling of production from Kenai Sterling Gas Pool 4 and Kenai Sterling Gas Pool 5.1 in well KU 33-32 is allowed. b. Commingling of production downhole from the Beluga/Upper Tyonek Pool, Tyonek Pool 1, and Kenai Deep Tyonek Pool is allowed with the following conditions: 1. Within 30 days of commencement of commingled production, and after production from the well has stabilized, the operator shall run a production log to determine the allocation of production between the Gas Pools. 2. Thereafter, the operator shall conduct production logging operations within each well at least once each calendar year, with no more than 13 months between operations, and adjust the allocation of production between the gas pools as appropriate. 3. Within 30 days of completion of production logging operations, electronic copies of all logs used for determining allocation of production shall be submitted to the AOGCC. c. Commingling of production from the Kenai Sterling Gas Pools 3.1, 4, and 5 in well KU 44-08 is allowed with the following conditions: CO 510C August 24, 2023 Page 6 of 6 1. Within 30 days of commencement of commingled production, and after production from the well has stabilized, the operator shall run a production log to determine the allocation of production between the Gas Pools. 2. Thereafter, the operator shall conduct production logging operations within each well at least once each calendar year, with no more than 13 months between operations, and adjust the allocation of production between the gas pools as appropriate. 3. Within 30 days of completion of production logging operations, electronic copies of all logs used for determining allocation of production shall be submitted to the AOGCC. Rule 6. Administrative Action (Withdrawn--Superseded by 20 AAC 25.556(d)) DONE at Anchorage, Alaska and dated August 24, 2023. Brett W. Huber, Sr. Jessie L. Chmielowski Gregory C. Wilson Chair, Commissioner 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. Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2023.08.24 12:04:07 -08'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2023.08.24 12:07:12 -08'00' Gregory Wilson Digitally signed by Gregory Wilson Date: 2023.08.24 12:40:29 -08'00' 3 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO-23-007 Hilcorp Alaska, LLC (Hilcorp), by letter dated April 26, 2023, requested the Alaska Oil and Gas Conservation Commission (AOGCC) amend Conservation Order No. 510B to expand vertically the Sterling Gas Pool 3 within the Kenai Unit, pursuant to 20 AAC 25.520(b). 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 tentatively scheduled for July 18, 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: 490 948 795#. 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. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on June 8, 2023. If a request for a hearing is not timely filed, the AOGCC may issue an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1223 after June 9, 2023. 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 4:30 p.m. on June 19, 2023, except that, if a hearing is held, comments must be received no later than the conclusion of the July 18, 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 July 11, 2023. Brett W. Huber, Sr. Chair, Commissioner Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2023.05.19 10:14:21 -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 ______________________________________ 05/21/2023 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 22nd day of May 2023. Account #: 100869 ST OF AK/AK OIL AND GAS CONSERVATION COMMISSION333 W. 7TH AVE STE 100, ANCHORAGE, AK 99501 Order #: W0038319 Cost: $361.9 Notice of Public HearingSTATE OF ALASKAALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO-23-007 Hilcorp Alaska, LLC (Hilcorp), by letter dated April 26, 2023, requested the Alaska Oil and Gas Conservation Commission (AOGCC) amend Conservation Order No. 510B to expand vertically the Sterling Gas Pool 3 within the Kenai Unit, pursuant to 20 AAC 25.520(b). 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 tentatively scheduled for July 18, 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: 490 948 795#. 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. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on June 8, 2023. If a request for a hearing is not timely filed, the AOGCC may issue an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1223 after June 9, 2023. 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 4:30 p.m. on June 19, 2023, except that, if a hearing is held, comments must be received no later than the conclusion of the July 18, 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 July 11, 2023. Brett W. Huber, Sr.Chair, Commissioner Pub: May 21, 2023 STATE OF ALASKA THIRD JUDICIAL DISTRICT 2024-07-14 Document Ref: XOIW9-M4QTK-APU4L-B8KMZ Page 6 of 42 From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Public Hearing Notice (Hilcorp) Date:Friday, May 19, 2023 10:17:16 AM Attachments:CO-23-007 Public Hearing Notice Hilcorp Kenai Sterling Gas Pool 3 Pool Rules Amendment.pdf Hilcorp Alaska, LLC (Hilcorp), by letter dated April 26, 2023, requested the Alaska Oil and Gas Conservation Commission (AOGCC) amend Conservation Order No. 510B to expand vertically the Sterling Gas Pool 3 within the Kenai Unit, pursuant to 20 AAC 25.520(b). 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 mailed 5/19/23 2 CAUTION: External sender. DO NOT open links or attachments from UNKNOWN senders. From:Cody Terrell To:Davies, Stephen F (OGC) Cc:Roby, David S (OGC); Guhl, Meredith D (OGC); Carlisle, Samantha J (OGC) Subject:RE: [EXTERNAL] RE: Kenai Unit Pool Rule Amendment Date:Tuesday, May 9, 2023 9:52:17 AM Attachments:KGF Sterling Pool 3 and Sterling Undefined Pressures - 5-8-23.pptx KU_21_06_LOG.pdf Hi Steve, Sorry for the delay, it took some time for me to gather the info. Please see the attached log and pressure data. Also, see below for additional geologic justification per AOGCC’s request: Hilcorp and other operators have added several perforations in the undefined Sterling sands, specifically wells KBU 11-07 (flowed a small amount of gas from 3581’ MD to 3583’ MD), KU 21-07X (3479’ MD to 3487’ MD) and others that confirm the presence of economic quantities of gas in the current undefined pool. The proposed Top Pool 3 (3735’ MD in KU 21-06) is a consistent GR marker throughout the Kenai Gas Field. The attached pressure data demonstrate gas that is not abnormally pressured. Hilcorp plans to continue testing sands that are currently in the undefined Pool. Hilcorp’s proposal to amend the vertical definition of Pool 3 is designed to reduce the administrative burdens on both Hilcorp and AOGCC staff, as well as prevent waste, protect correlative rights, and improve the ultimate recovery of remaining hydrocarbons through the Kenai Gas Field. Please let me know if you have any other questions. Regards, Cody T. Terrell Landman Hilcorp Alaska, LLC Direct: 907-777-8432 Cell: 713-870-4532 This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. From: Davies, Stephen F (OGC) <steve.davies@alaska.gov> Sent: Monday, May 8, 2023 2:33 PM To: Cody Terrell <cterrell@hilcorp.com> Cc: Roby, David S (OGC) <dave.roby@alaska.gov>; Guhl, Meredith D (OGC) <meredith.guhl@alaska.gov>; Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> Subject: [EXTERNAL] RE: Kenai Unit Pool Rule Amendment Hi Cody, I don’t recall receiving a reply to AOGCC’s request for additional information, below, and we’d like to keep this proposed amendment moving through AOGCC’s schedule. 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. Thanks and be well, Steve Davies AOGCC 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: Davies, Stephen F (OGC) Sent: Thursday, April 27, 2023 4:32 PM To: Cody Terrell <cterrell@hilcorp.com> Cc: Roby, David S (OGC) <dave.roby@alaska.gov>; Guhl, Meredith D (OGC) <meredith.guhl@alaska.gov> Subject: RE: Kenai Unit Pool Rule Amendment Cody, Thank you for providing Hilcorp’s application for vertical expansion of Sterling Gas Pool 3. To complete this application so that AOGCC can tentatively schedule a Public Hearing and publish the hearing notice, could Hilcorp also please provide: A type log that depicts the current and proposed pool boundaries, Geological justification that supports expanding the pool, and Pressure information that demonstrates the additional sands are not abnormally pressured compared to other sands within the current pool. Thanks and be well, Steve Davies AOGCC 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: Cody Terrell <cterrell@hilcorp.com> Sent: Wednesday, April 26, 2023 11:30 AM To: Davies, Stephen F (OGC) <steve.davies@alaska.gov>; Roby, David S (OGC) <dave.roby@alaska.gov> Subject: FW: Kenai Unit Pool Rule Amendment Steve & Dave, I see Samantha is out so I am forwarding this along to the two of you for processing. Regards, Cody T. Terrell Landman Hilcorp Alaska, LLC Direct: 907-777-8432 Cell: 713-870-4532 This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. From: Cody Terrell Sent: Wednesday, April 26, 2023 11:20 AM To: Carlisle, Samantha J (CED) <samantha.carlisle@alaska.gov> Cc: Brumbaugh, Robert <rbrumbau@blm.gov>; Jeff Allen <jallen@hilcorp.com>; Noel Nocas <Noel.Nocas@hilcorp.com>; Chad Helgeson <chelgeson@hilcorp.com>; Reid Edwards <reedwards@hilcorp.com>; Daniel Yancey <dyancey@hilcorp.com> Subject: Kenai Unit Pool Rule Amendment Hi Samantha, Please see Hilcorp’s attached application to Amend CO 510B to vertically expand the Kenai Sterling Gas Pool 3. Regards, Cody T. Terrell | Landman | Hilcorp Alaska, LLC O: 907-777-8432 | C: 713-870-4532 | cterrell@hilcorp.com 3800 Centerpoint Dr., Suite 1400 | Anchorage | Alaska | 99503 This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. The information contained in this email message is confidential and may be legally privileged and is intended only for the use of theindividual or entity named above. If you are not an intended recipient or if you have received this message in error, you are herebynotified that any dissemination, distribution, or copy of this email is strictly prohibited. If you have received this email in error, pleaseimmediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete this message. 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If you have received this email in error, pleaseimmediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete KGF Sterling Pool 3 and Sterling Undefined Pressures •Intervals A8-A11 are what make up current Pool 3 (requesting to include A3 – A7) •Data from RFT and SBHP data 2013 to current •Note observe large pressure variations already exist between each Pool 3 sand •No pressure data exists for Sterling A3, A4, or A5 intervals (no historic production) –Sterling section observed to be initially normally pressured at Kenai Gas Field KU 21-06 5/1965 5,682 89,148,104 KU 21-06 0 100 GR 30 90 SP (CTR) 1 100 RESD 1 100 RESS 0.6 0 NPHI 1.65 2.65 RHOB KF_P3_A7 KF_P3_A8 KF_P3_A9 KF_P3_A10 KF_P3_A11 KF_P4_B1 KF_P4_B2 KF_P5_B3 KF_P5_B4X KF_P5_B4 KF_P3_A6 KF_P3_A5KF_P3_A5 KF_P3_A4KF_P3_A4 KF_P3_A7 KF_P3_A8 KF_P3_A9 KF_P3_A10 KF_P3_A11 KF_P4_B1 KF_P4_B2 KF_P5_B3 KF_P5_B4X KF_P5_B4 KF_P3_A6 KF_P3_A5KF_P3_A5 KF_P3_A4KF_P3_A4 -3050 (3582) -3100 (3640) -3150 (3698) -3200 (3756) -3250 (3814) -3300 (3871) -3350 (3929) -3400 (3986) -3450 (4044) -3500 (4101) -3550 (4158) -3600 (4215) -3650 (4272) -3700 (4329) -3750 (4388) -3800 (4447) -3850 (4507) -3900 (4568) -3950 (4629) -4000 (4691) TCP TCP HS=355 A A'Horizontal Scale = 355.5 Vertical Scale = 20.0 Vertical Exaggeration = 17.8x PETRA 5/8/2023 2:52:37 PM Top proposed Pool 3: 3735' MD Base Pool 3 Current and Proposed: 4412' MD Current Top Pool 3: 4175' MD 1 Attachement 2 Sterling Participating Area Kenai Unit Effective October 17, 2014 Updated 1/29/2015 1 of 6 Tract No. Description of Participating Lands Acreage Lease Number Percentage of Tract Participation Royalty & ORRI Owners Working Interest Owners & Percentage of Working Interest 1 T4N-11W, S.M. Sec. 3: W/2SW/4; Sec. 4: Lot 2, SW/4NE/4, NW/4SE/4 199.57 A-028047 1.515313%USA 100% of 12.5% HILCORP ALASKA, LLC 100% 1A T4N-11W, S.M. Sec. 4: Lots 3 and 4, That portion of Tract B lying within S/2NW/4, SW/4, SW/4SE/4; Sec. 9: That portion of Tract B lying within the N/2, SW/4, W/2SE/4 918.68 FEE AA-093856 (Formerly A-028047) 6.975434%HILCORP ALASKA, LLC 100%HILCORP ALASKA, LLC 100% 1B T4N-11W, S.M. Sec 3: Lot 4, SW/4NW/4: Sec. 4: Lot 1, SE/4NE/4, E/2SE/4 239.03 ADL 392671 (AA-093855 Formerly A-028047) 1.814928%State of Alaska 100% of 12.5% HILCORP ALASKA, LLC 100% 4 T5N-11W, S.M.: Sec. 31: Lots 3, 4, 5, 7, 8, 10; 84.67 A-028055 0.642890%USA 100% of 12.5% HILCORP ALASKA, LLC 100% 4A T5N-11W, S.M.: Sec. 31: E/2NE/4, SE/4SE/4; Sec. 32: All Sec. 33: All 1400.00 FEE AA-093808 (Formerly A-028055) 10.630043%HILCORP ALASKA, LLC 100% of 12.5% HILCORP ALASKA, LLC 100% 4B T5N-11W, S.M.: Sec. 31: W/2NE/4, N/2SE/4, SW/4SE/4; Sec. 34: NW/4NW/4, S/2NW/4, SW/4, W/2SE/4 560.00 ADL 392668 (AA-093817 & Formerly A-028055) 4.252017%State of Alaska 100% of 12.5% HILCORP ALASKA, LLC 100% 5 T5N-11W, S.M.: Section 28: SE/4NW/4, W/2NW/4, SW/4; Section 29: E/2, E/2W/2; Section 30: Lots 5 thru 9,11 thru 15 812.23 A-028056 6.167171%USA 100% of 12.5% HILCORP ALASKA, LLC 100% 5A T5N-11W, S.M.: Section 28: NW1/4SE1/4, S1/2SE1/4; Section 29: SW1/4NW1/4 160.00 FEE AA-093821 (formerly A-028056) 1.214862%HILCORP ALASKA, LLC 100%HILCORP ALASKA, LLC 100% 5B T5N-11W, S.M.: Section 29: NW/4NW/4, W/2SW/4; Section 30: E/2 440.00 ADL 392669 (AA-093820 & Formerly A-028056) 3.340871%State of Alaska 100% of 12.5% HILCORP ALASKA, LLC 100% Attachement 2 Sterling Participating Area Kenai Unit Effective October 17, 2014 Updated 1/29/2015 2 of 6 Tract No. Description of Participating Lands Acreage Lease Number Percentage of Tract Participation Royalty & ORRI Owners Working Interest Owners & Percentage of Working Interest 14 T4N-11W, S.M. Sec. 17: All; Sec. 18: Lots 1, 2, 3, 4, E/2W/2, E/2; Sec. 19: Lot 1, NE/4NW/4, NE/4 1478.90 FEE ADL 22330 11.229121%HILCORP ALASKA, LLC 100% of 12.5% M.B. KIRKPATRICK TR 1.00% ORI HILCORP ALASKA, LLC 100% 14A T4N-11W, S.M. Sec. 20: N/2NW/4, SW/4NW/4 120.00 ADL 324598 0.911147%STATE OF ALASKA 100% of 12.5% M.B. KIRKPATRICK TR 1.00% ORI HILCORP ALASKA, LLC 100% 16 T5N-11W, S.M. Sec. 18: SE/4SE/4 40.00 ADL 392672 (AA-093881 & Formerly A-028103) 0.303716%STATE OF ALASKA 100% of 12.5% M.B. KIRKPATRICK TR 1.00% ORI HILCORP ALASKA, LLC 100% 24 T5N-11W, S.M. Sec. 19: Lots 7, 8, 9, 11, 13, E/2E/2SE/4SW/4, SE/4NE/4; Sec. 20: SW/4NE/4, SE/4 269.63 A-028140 2.047270%USA 100% of 12.5% KIRKPATRICK WALKOWSKI WATKINS TRUST FOR DORIS L ERVIN 1.00% ORI HILCORP ALASKA, LLC 100% 24A T5N-11W, S.M. Sec. 19: SE/4; Sec. 20: W/2 480.00 ADL 392537 (AA-093866 & Formerly A-028140) 3.644586%STATE OF ALASKA 100% of 12.5% KIRKPATRICK WALKOWSKI WATKINS TRUST FOR DORIS L ERVIN 1.00% ORI HILCORP ALASKA, LLC 100% 26 PROTRACTED SURVEY T4N-11W, S.M. Sec. 5: Tract B Sec: 6: Lots 1, 2, Tract B, E/2SW/4 Sec. 7: Tract B Sec. 8: Tract B 2494.04 FEE A-028142 18.936965%HILCORP ALASKA, LLC 100% of 12.5% KIRKPATRICK WALKOWSKI WATKINS TRUST FOR DORIS L ERVIN 1.00% ORI HILCORP ALASKA, LLC 100% 27 T4N-12W, S.M. Section 1: Lots 1, 2, 4; Section 12: Lots 5 thru 18, inclusive, Lot 20, E/2NE/4, SE/4SE/4, E/2W/2E/2; Section 13: Lots 5 thru 12, inclusive, Easterly 2.50 acres of Lot 15 Easterly 2.50 acres of Lot 16, SE/4NE/4, E/2W/2SW/4NE/4, E/2W/2NW/4SE/4, E/2SE/4 472.00 A-028143 3.583843%USA 100% of 12.5% KIRKPATRICK WALKOWSKI WATKINS TRUST FOR DORIS L ERVIN 1.00% ORI HILCORP ALASKA, LLC 100% 27A T4N-12W, S.M. Section 1: SE/4NE/4 40.00 FEE AA-093836 (Formerly A-028143) 0.303716%HILCORP ALASKA, LLC 100% KIRKPATRICK WALKOWSKI WATKINS TRUST FOR DORIS L ERVIN 1.00% ORI HILCORP ALASKA, LLC 100% 27B T4N-12W, S.M. Section 1: Lot 5, NE/4NE/4, E/2SE/4; Section 12: NE/4 SE/4; Section 13: E/2NW/4NE/4, NE/4NE/4, E/2SW/4NE/4, E/2NW/4SE/4; 273.09 ADL 392670 (AA-093835 & Formerly A-028143) 2.073542%STATE OF ALASKA 100% of 12.5% KIRKPATRICK WALKOWSKI WATKINS TRUST FOR DORIS L ERVIN 1.00% ORI HILCORP ALASKA, LLC 100% Attachement 2 Sterling Participating Area Kenai Unit Effective October 17, 2014 Updated 1/29/2015 3 of 6 Tract No. Description of Participating Lands Acreage Lease Number Percentage of Tract Participation Royalty & ORRI Owners Working Interest Owners & Percentage of Working Interest 38 T4N-12W, S.M.: Sec. 1: Lot 6 13.17 0.099998%Univar Corporation 100% of 12.5%HILCORP ALASKA, LLC 100% 39 T4N-12W, S.M.: Sec. 12: Lot 19 2.49 0.018906%John W. & Barbara J. Kistler 100% of 12.5%HILCORP ALASKA, LLC 100% 40 T4N-12W, S.M. Sec. 13: Easterly 2.50 acres of Lot 13, Easterly 2.50 acres of Lot 14 5.00 0.037964%Dave Dunham 100% of 12.5%HILCORP ALASKA, LLC 100% 145 T5N-11W, S.M. Sec. 17: Lot 8, NW/4SW/4, S/2SW/4 159.93 1.214331%McCanna Living Trust dated 6/8/99 100% of 12.5% HILCORP ALASKA, LLC 100% 146 T5N-11W, S.M. Sec. 17: Lot 9 Sec. 20: NW/4NE/4 78.97 0.599610%Michelle Bigham 27.7778% of 12.5% Wendy Sanchez 11.11112% of 12.5% Kelli Geist 11.11112% of 12.5% James Johnston 11.11112% of 12.5% Veronica A. Barnes 3.70368% of 12.5% Vanessa J. O'Grady 3.70368% of 12.5% Vickie L. Burr 3.70368% of 12.5% Martin L Espinoza 27.7778% of 12.5% HILCORP ALASKA, LLC 100% Attachement 2 Sterling Participating Area Kenai Unit Effective October 17, 2014 Updated 1/29/2015 4 of 6 Tract No. Description of Participating Lands Acreage Lease Number Percentage of Tract Participation Royalty & ORRI Owners Working Interest Owners & Percentage of Working Interest 147 T5N-11W, S.M. Sec. 19: Lot 2, N/2NE/4, SW/4NE/4 139.31 1.057765%John Bales .71429% of 12.5%, Carl Cantwell 5.00% of 12.5% , Donald Chambers 5.00% of 12.5%, Eddie Chambers 5.00% of 12.5%, Max Chambers 5.00% of 12.5%, Barbara Frederick .71429% of 12.5%, Vera Gibbons .71429% of 12.5% , Debra Glenn .71429% of 12.5%, Maxine Grote 5.00% of 12.5% , Mary Hixon 5.00% of 12.5% , Jeanette Jones 5.00% of 12.5% , Gary McClintock 5.00% of 12.5%, Anna McDevitt TR 5.00% of 12.5%, Janis McGill .71428% of 12.5%, Denise Raines .71428% of 12.5%, Wilma Simmons 5.00% of 12.5%, Serelda Smith 5.00% of 12.5%, Barbara Steelman 5.00% of 12.5%, James Steelman 5.00% of 12.5%, Jerry Steelman 5.00% of 12.5%, Harry Steelman 5.00% of 12.5%, Thomas Steelman 5.00% of 12.5%, Cathy Young .71428% of 12.5%, Beverly Reid 2.50% of 12.5%, Kathy Shaffer 2.50% of 12.5%, HILCORP ALASKA, LLC 100% K I Browning 5.00% of 12.5%, Kelly Anderson 1.00% of 12.5%, Sunny Anderson 1.00% of 12.5%, Phillip Anderson 1.00% of 12.5%, Dylan Anderson 1.00% of 12.5%, Dustin Harrison 1.00% of 12.5% 148 T5N-11W, S.M. Sec. 19: Lots 10 & 12 5.14 0.039027%C.K. Jacobs & R L Jacobs 100% of 12.5%HILCORP ALASKA, LLC 100% 149 T5N-11W, S.M. Sec. 19: Lot 6 5.20 0.039483%Marjorie L. Miller 100% of 12.5%HILCORP ALASKA, LLC 100% 152 T5N-11W, S.M. Sec. 30: Lot 3 20.96 0.159147%Roseleen L. Moore 100% of 12.5%HILCORP ALASKA, LLC 100% 152A T5N-11W, S.M. Sec. 30: Lot 10 5.75 0.043659%Roseleen L. Moore 100% of 12.5%HILCORP ALASKA, LLC 100% 153 T5N-11W, S.M. Sec. 30: Lot 16 5.09 0.038648%HILCORP ALASKA, LLC 100% HILCORP ALASKA, LLC 100% 154 T5N-11W, S.M. Sec. 31: Lot 6 5.19 0.039407%Ron L Schmidt 25% of 12.5% Ruth M. Beidler 50% of 12.5% HILCORP ALASKA, LLC 25% of 12.5% HILCORP ALASKA, LLC 100% Attachement 2 Sterling Participating Area Kenai Unit Effective October 17, 2014 Updated 1/29/2015 5 of 6 Tract No. Description of Participating Lands Acreage Lease Number Percentage of Tract Participation Royalty & ORRI Owners Working Interest Owners & Percentage of Working Interest 155 T5N-11W, S.M. Sec. 31: Lot 9 11.10 0.084281%Univar Corporation 100% of 12.5%HILCORP ALASKA, LLC 100% 161 T4N-11W, S.M. Sec. 16: N/2NW/4, SW/4NW/4, NW/4SW/4 160.00 FEE ADL 460 1.214862%HILCORP ALASKA, LLC 100% of 12.5% HILCORP ALASKA, LLC 100% 166D T5N-11W, S.M. Sec. 17: All navigable shorelands within the exterior boundaries and/or contiguous to Federal Uplands lease A-028103 1.10 ADL 308223 0.008352%State of Alaska 100% of 12.5% M B Kirkpatrick TR 1.00% ORI HILCORP ALASKA, LLC 100% 175A T5N-11W, S.M. Sec. 30: All tide and submerged land within SE/4SW/4 Sec. 31: All tide and submerged land within E/2NW/4, SW/4 158.52 ADL 588 1.203625%State of Alaska 100% of 12.5%HILCORP ALASKA, LLC 100% 175B T5N-11W, S.M. Sec. 30: Submerged land within NE/4SW/4, W/2SW/4, NW/4 Sec. 31: Submerged land within W/2NW/4 T5N-12W, S.M. Sec. 25: Submerged land within SE/4NE/4, E/2SE/4 Sec. 36: Submerged land within E/2 736.49 ADL 391032 5.592086%State of Alaska 100% of 12.5%HILCORP ALASKA, LLC 100% 176A T4N-12W, S.M. Sec. 1: All tide and submerged land within W/2E/2, E/2W/2 Sec. 12: All tide and submerged land within W/2E/2, E/2W/2 425.33 ADL 593 3.229483%State of Alaska 100% of 12.5%HILCORP ALASKA, LLC 100% 176B T4N-12W, S.M. Sec. 1: All submerged land within W/2W/2 Sec. 2: All submerged land within E/2E/2 Sec. 11: All submerged land within E/2NE/4 Sec. 12: All submerged land within W/2W/2 560.00 ADL 391033 4.252017%State of Alaska 100% of 12.5%HILCORP ALASKA, LLC 100% Attachement 2 Sterling Participating Area Kenai Unit Effective October 17, 2014 Updated 1/29/2015 6 of 6 Tract No. Description of Participating Lands Acreage Lease Number Percentage of Tract Participation Royalty & ORRI Owners Working Interest Owners & Percentage of Working Interest 177 T4N-12W, S.M. Sec. 13: All tide and submerged land within W/2NE/4, E/2NW/4 88.92 ADL 594 0.675160%State of Alaska 100% of 12.5%HILCORP ALASKA, LLC 100% 178 T5N-11W, S.M. Sec. 19: All of the SE/4NW/4, NE/4SW/4, S/2SW/4 lying westerly of the coastline 100.72 ADL 2411 0.764756%State of Alaska 100% of 12.5%HILCORP ALASKA, LLC 100% TOTAL:13,170.22 100.000000% LAND CLASSIFICATION SUMMARY Federal 1,838.10 13.956487% Hilcorp Alaska, LLC 6,658.01 50.553522% State of Alaska 4,223.20 32.066283% Fee lands 450.91 3.423709% TOTAL:13,170.22 100.000000% 1 5 4 3 8 9 6 7 2 13 12 32 29 20 17 33 28 21 16 34 27 22 15 10 24 31 30 19 25 36 18 1516 24 17 20 18 21 13 19 22 35 26 23 11 14 14 23 2 14 23 11 14 23 5N11W 4N11W4N12W 5N12W Sterling Formation Gas Zone PA Kenai Unit Tracts Hilcorp Alaska, LLC February 1, 2015Scale: 1:55,000 Attachment No. 1Sterling Participating AreaKenai UnitEffective October 17, 2014 5B 178 175A 149 24A 147 16 145 146 166D 5 24 2424 153 152 152A 4B 175B 148 176A 176B 4155 154 4 4B 4A 5A5 55A 27 177 39 27 38 27 27A 27B 27B 27B 27B 1B1 1A26 161 14A 14 40 1