The URL can be used to link to this page

Home My WebLink AboutCO 806CONSERVATION ORDER 806 Milne Point Unit 1. May 26, 2023 Hilcorp application for spacing exception MPU M-61 2. May 31, 2023 Public Hearing Notice, Affidavit of Publication, Email list STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC for a spacing exception to drill and pre- produce the proposed MPU M-61 service injection well in the Schrader Bluff Oil Pool of the Milne Point Unit within 500 feet from the exterior boundary of the Affected Area of Conservation Order 477, pursuant to 20 AAC 25.055 and Rule 2 of CO 477.05. ) ) ) ) ) ) ) ) ) ) Docket Number: CO-23-009 Conservation Order 806 MPU M-61 Service Injection Well Schrader Bluff Oil Pool Milne Point Unit North Slope Borough, Alaska July 11, 2023 IT APPEARING THAT: 1. Hilcorp Alaska, LLC (Hilcorp), by letter received May 30, 2023, filed an application with the Alaska Oil and Gas Conservation Commission (AOGCC) for an exception to the spacing requirements of 20 AAC 25.055 and Rule 2 of Conservation Order No. 477.05 (CO 477.05) to drill and pre-produce, for up to 30 days, the Milne Point Unit (MPU) M-61 service injection well within 500 feet of a property line where the owners and landowners are not the same on both sides of the line, and within 500 feet from the exterior boundary of the Affected Area of Conservation Order No. 477 (CO 477). The purpose of the pre-production period is to clean the well up post-completion and improve injectivity prior to putting the well on injection in the MPU, Schrader Bluff Oil Pool. This request is pursuant to 20 AAC 25.055(d) and Rule 2 of CO 477.05. 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for July 13, 2023. On May 31, 2023, the AOGCC published notice of the opportunity for that hearing on the State of Alaska’s Online Public Notice website and on the AOGCC’s website, electronically transmitted the notice to all persons on the AOGCC’s email distribution list and mailed printed copies of the notice to all persons on the AOGCC’s mailing distribution list. On June 1, 2023, the AOGCC published the notice in the Anchorage Daily News. 3. Hilcorp sent, by certified mail, notice of the application to all owners, landowners, and operators of all properties within 1,000 feet of the entire MPU M-61 well path and provided to the AOGCC a copy of the notice, addresses to which notices were delivered, and copies of all U.S. Postal Service Certified Mail Receipts. 4. No request for a public hearing was received, and no public comments were submitted. 5. The tentatively scheduled public hearing was vacated. 6. Hilcorp’s application provided sufficient information upon which to make an informed decision. CO 806 July 11, 2023 Page 2 of 3 PURPOSE AND NEED FOR THIS ORDER: Well spacing regulations protect the oil and gas rights of adjacent landowners and maximize resource recovery by establishing default limits on how close, under the land's surface, oil and gas wells can be to property lines where ownership changes hands. These limits are set forth in a regulation, 20 AAC 25.055. Operators must abide by the default limits unless they apply for, and obtain, an exception to those limits. Although exceptions to the default limits are not unusual, AOGCC carefully evaluates each application, and typically grants them only when actual geologic conditions demonstrate that the proposed subsurface location of a well is necessary to reach otherwise unreachable oil or gas and that both the rights of adjacent landowners and underground drinking water can be protected. As a general matter, AOGCC does not have authority over surface impacts such as noise, emissions, or construction. FINDINGS: 1. Hilcorp is operator for the proposed onshore MPU M-61 development oil well located within the Milne Point Unit, North Slope Borough, Alaska. Surface Location: Milne Point Unit Lease ADL 25514 (100% State) 366’ FNL, 231’ FEL, Section 14, T13N, R9E, Umiat Meridian (U.M.) Top Producing Milne Point Unit Lease ADL 388235 (100% State) Interval: 857’ FSL, 971’ FWL, Section 12, T13N, R9E, U.M. Bottom-hole Location: Milne Point Unit Lease ADL 388235 (100% State) 1937’ FNL, 2378’ FEL, Section 2, T13N, R9E, U.M. 2. Hilcorp owns 100% Working Interest in the affected leases and is currently operator of Milne Point Unit. The State of Alaska owns 100% of the mineral interest in the affected lands. For these affected lands, Hilcorp provided a schedule that details ownership within 1,000 feet of proposed well MPU M-61. 3. CO 477.05 governs well spacing for the Schrader Bluff Oil Pool within the Milne Point Unit. The Affected Area for the Schrader Bluff Oil Pool within the Milne Point Unit is described in CO 477. 4. A spacing exception is required for MPU M-61 to protect correlative rights. The productive interval in the well will encroach within 500 feet of the property line separating the MPU from the Kuparuk River Unit (KRU) where ownership changes. If this planned injection well is pre-produced to clean the wellbore and to reduce drilling-induced near-wellbore damage, it is likely that some oil will be recovered along with drilling and completion fluids. To prevent waste, that oil will be processed and sold, and a portion of that oil will likely be recovered from within the required 500-foot property line setback area. 5. After the pre-production period ends and injection begins, MPU M-61 will provide injection support to the adjacent MPU M-60 production well (located to the northeast) and sweep oil that that could not be effectively swept by wells or any other means. Additionally, injection in MPU M-61 will act as a barrier to prevent oil resources from migrating across the MPU/ KRU unit boundary and will provide injection support to any CO 806 July 11, 2023 Page 3 of 3 offset production wells in the West Sak Oil Pool (equivalent geologic strata within the KRU) on the KRU side of the property line. 6. If operated as required, drilling and pre-production of MPU M-61 will not cause waste or result in an increased risk of fluid movement into freshwater. CONCLUSIONS: 1. An exception to the well spacing provisions of CO 477.05 is necessary to allow drilling and pre-production of proposed development oil well MPU M-61 within the Schrader Bluff Oil Pool and Milne Point Unit in order to maximize ultimate resource recovery. 2. Granting an exception to the well spacing provisions of CO 477.05 for MPU M-61 will not result in waste or jeopardize correlative rights of adjoining or nearby owners, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. NOW THEREFORE IT IS ORDERED: The AOGCC grants Hilcorp’s May 30, 2023 application for an exception to the well spacing provisions of 20 AAC 25.055 and CO 477.05 allowing Hilcorp to drill and pre-produce for no more than 30 days well MPU M-61 in the Schrader Bluff Oil Pool within 500 feet from the exterior boundary of the Affected Area of CO 477, pursuant to 20 AAC 25.055 and Rule 2 of CO 477.05. Hilcorp may proceed and must comply with all applicable laws and all other legal requirements. DONE at Anchorage, Alaska and dated July 11, 2023. Brett W. Huber, Sr. Gregory C. Wilson Chair, Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Gregory Wilson Digitally signed by Gregory Wilson Date: 2023.07.11 12:57:00 -08'00' Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2023.07.12 08:11:02 -05'00' From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Conservation Order 806 (MPU) Date:Wednesday, July 12, 2023 10:45:44 AM Attachments:co 806.pdf THE APPLICATION OF Hilcorp Alaska, LLC for a spacing exception to drill and preproduce the proposed MPU M-61 service injection well in the Schrader Bluff Oil Pool of the Milne Point Unit within 500 feet from the exterior boundary of the Affected Area of Conservation Order 477, pursuant to 20 AAC 25.055 and Rule 2 of CO 477.05 Samantha Carlisle Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 __________________________________ 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 2 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION RE: Docket Number: CO-23-009 Hilcorp Alaska, LLC’s Spacing Exception Application for Milne Point Unit M-61 Service Well Hilcorp Alaska, LLC (Hilcorp) by letter received May 26, 2023, filed an application with the Alaska Oil and Gas Conservation Commission (AOGCC) for an exception to the spacing requirements of 20 AAC 25.055 to drill and pre-produce, for up to 30 days, the Milne Point Unit (MPU) M-61 service well within 500 feet of a property line where the owners and landowners are not the same on both sides of the line, and within 500 feet from the exterior boundary of the Affected Area of Conservation Order No. 477 (CO 477). The purpose of the pre-production period is to clean the well up post completion and improve injectivity prior to putting the well on injection in the MPU, Schrader Bluff Oil Pool. This request is pursuant to 20 AAC 25.055(d) and Rule 2 of CO 477. Well spacing regulations protect the oil and gas rights of adjacent landowners and maximize resource recovery by establishing default limits on how close, under the land's surface, oil and gas wells can be to property lines where ownership changes hands. These limits are set forth in a regulation, 20 AAC 25.055. Operators must abide by the default limits unless they apply for, and obtain, an exception to those limits. Although exceptions to the default limits are not unusual, AOGCC carefully evaluates each application, and typically grants them only when actual geologic conditions demonstrate that the proposed subsurface location of a well is necessary to reach otherwise unreachable oil or gas and that both the rights of adjacent landowners and underground drinking water can be protected. As a general matter, AOGCC does not have extensive authority over surface impacts such as noise, emissions, or construction. 20 AAC 25.055(d) doesn’t normally apply to injection wells, but the plan to pre-produce the well for up to 30 days makes the regulation apply to this well. This notice does not contain all the information filed by Hilcorp. To obtain more information, contact the AOGCC’s Special Assistant, Samantha Carlisle, at (907) 793-1223 or samantha.carlisle@alaska.gov. A public hearing on the matter has been tentatively scheduled for July 13, 2023, at 10:00 a.m. 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 16, 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 19, 2023. 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: 824 599 290#. Anyone who wishes to participate remotely using MS Teams video conference should contact Ms. Carlisle at least two business days before the scheduled public hearing to request an invitation for the MS Teams. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, AK 99501 or samantha.carlisle@alaska.gov. Comments must be received no later than 4:30 p.m. on June 30, 2023, except that, if a hearing is held, comments must be received no later than the conclusion of the July 13, 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 6, 2023. Jessie L. Chmielowski Commissioner Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2023.05.31 10:20:06 -08'00' From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Public Hearing Notice MPU M-61 Spacing Exception Date:Wednesday, May 31, 2023 10:33:29 AM Attachments:CO-23-009 Public Hearing Notice MPU M-61 Spacing Exception.pdf Docket Number: CO-23-009 Hilcorp Alaska, LLC’s Spacing Exception Application for Milne Point Unit M-61 Service Well 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 2024-07-14 Document Ref: KKHTW-4MAZA-NFKOE-NQB3P Page 24 of 26 1 By Samantha Carlisle at 11:15 am, May 30, 2023