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Home My WebLink AboutCO 341 JCONSERVATION ORDER 341J Docket Number: CO-20-018 1. September 22, 2020 Hilcorp request to Commingle downhole into well PBU L3-24 between the Lisburne and Prudhoe Oil Pools 2. September 27, 2020 Notice of hearing, affidavit of publication, email distribution, mailings 3. June 23, 2021 Application for Administrative Approval to Increase Water Injection Rate (CO 341J.001) 4. July 14, 2022 Hilcorp application for annual surveillance requirements 5. October 19, 2022 Hilcorp application for admin approval to amend CO 341J (CO 341J.002) ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSI, 333 West 71 Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF ) Conservation Order No. 341 J HILCORP NORTH SLOPE, LLC ) Docket Number: CO -20-018 for an order to allow downhole ) commingling in Well PBU L3-24 ) Prudhoe Bay Field between the Lisburne and Prudhoe ) Prudhoe Oil Pool Oil Pools ) February 3, 2021 IT APPEARING THAT: 1. By letter dated September 22, 2020, Hilcorp North Slope, LLC (HNS), operator of the Prudhoe Bay Unit (PBU), applied for authorization for downhole commingling of production between the Prudhoe Oil Pool (POP) and the Lisburne Oil Pool (LOP) in the PBU L3-24 well (PTD 186-182). 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) tentatively scheduled a public hearing for October 27, 2020. On September 23, 2020, the AOGCC published notice of that hearing on the State of Alaska's Online Public Notice website, 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 September 27, 2020, the notice was published in the Anchorage Daily News. 3. No comments or requests to hold the hearing were received by the AOGCC. 4. HNS provided sufficient information in its application to make a decision, so the proposed hearing was vacated on October 15, 2020. FINDINGS: 1. Prudhoe Oil Pool The POP, in production since 1977, consists of an immense oil rim overlain by a massive gas cap. The POP has numerous enhanced recovery projects underway. POP wells are typically very productive due to the high-quality reservoir rocks within the pool. 2. Lisburne Oil Pool The LOP, described in CO 207 and in production since 1982, is a complex carbonate reservoir that underlies the POP. 3. Proposed Commingling Operation The PBU L3-24 well is currently completed in the LOP and has been effectively shut in since May 1997. There have been a few attempts to restore the well to production over the intervening years without success. The most recent attempt occurred in November 2016, at which time the well produced no oil and --1,900 BWPD. A workover was conducted to isolate Conservation Order 341J February 3, 2021 Page 3 of 12 the LOP in preparation to perforate and produce the POP on its own. The plug did not provide an adequate seal to isolate the LOP. The well was reanalyzed to determine whether to attempt the workover again or pursue a different route to try to bring this well back into production. Given that hydrate formation issues resulted in less than 50% on time experienced by the nearby L3-22 well when it produced from the POP, HNS determined that the water production and the heat associated with it from the LOP should reduce the risk of hydrate formation and thus improve on-time and economic recovery from the L3-24 well. Although water production from the LOP would likely reduce production rates from the POP versus if it was produced without downhole commingling, with the anticipated issues with hydrate formation the commingled producer should have much greater on time and less need for well interventions to restore flow, resulting in the well having a longer economic life and thus increase ultimate recovery over standalone production. 4. Potential for Crossflow Based on current fluid compositions HNS does not anticipate that crossflow would damage the POP and thus cause waste. Should fluid compositions change and thus cause an incompatibility chemical inhibition would be evaluated. Crossflow during short shut in periods is not expected to be significant because the formations are at similar pressures. In the event of longer term shut ins a mechanical plug can be set to prevent crossflow. 5. Production Allocation Based on past flow test no, or very little (less than 5 BOPD), oil production is expected from the LOP. To confirm this HNS plans to flow and test the LOP prior to perforating the POP. If significant oil production occurs during this test a sample will be collected for geochemical analysis. If there is not oil production, it will be assumed that no oil will be produced in the future from the LOP in this well. After the POP is perforated and brought online the incremental changes in production will be assumed to be from the POP and used for the basis of production allocation going forward. If changes in the production profile occur, such as rates, water cut, or GOR, or if the initial test of the LOP indicates a significant amount of oil is being produced a downhole production log or differential flow test, or possibly geochemical analysis, can be used to adjust the production allocation between the POP and the LOP. CONCLUSIONS: Downhole commingling of production between the POP and LOP should improve resource recovery from the Prudhoe Bay Unit by encouraging production of resources within the POP that would be challenging to produce as a standalone development in this well. 2. Crossflow between the POP and LOP is not expected to be significant due to similar reservoir pressures in this portion of the Prudhoe Bay Field. 3. An acceptable production allocation methodology can be devised. NOW, THEREFORE, IT IS ORDERED THAT: The following rules, in addition to the statewide requirements under 20 AAC 25 (to the extent not superseded by these rules), govern development in the affected area described below: Conservation Order 3417 February 3, 2021 Page 4 of 12 Affected Area: Umiat Meridian Tmrd* FAV Smdim TION R12E 1, 2, 3, 4, 10, 11, 12 TION R13E 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 24 TION R14E 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 36 TION R15E All TION. R16E 5, 6, 7, 8, 17, 18, 19, 20, 29, 30, 31 Ti 1N R11E 1, 2, 3, 4, 9, 10, 11, 12, 13, 14, 15, 24, 25 T11N R12E All T1IN R13E All TUN R14E All TUN RISE All Tl 1N R16E 17, 18, 19, 30, 31, 32 T12N R10E 13, 24, T12N RI IE 15, 16, 17, 18, 19, 20, 21, 22, 25, 26, 27, 28, 29, 30, 32, 33, 34, 35, 36 T12N R12E 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36 T12N R13E 19, 20, 21, 22, 23, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36 T12N R14E 25, 26, 27, 28, 29, 31, 32, 33, 34, 35, 36 T12N R15E 25, 26, 27, 28, 29, 30 ,31 ,32, 33, 34, 35, 36 Rule 1 Pool Definition The Prudhoe Oil Pool is defined as (i) the accumulations of oil that are common to and that correlate with the accumulations found in the Atlantic Richfield - Humble Prudhoe Bay State No. 1 well between the depths of 8,110 feet and 8,680 feet, and (ii) the accumulation of oil that is common to and correlates with the interval from 9,638 to 9,719 measured feet on the Borehole Compensated Sonic Log, Run 2, Dated September 28, 1975, in the Atlantic Richfield -Exxon NGI No. I well, and that is in hydraulic communication with the gas cap of the former accumulations in the Sag River Formation. The latter accumulation is found within the following area: TI IN R14E: Sections: 1, 2, 11(N/2 and SE/4), 12, 13, 14(E/2), 23(NE/4), 24, 25(N/2) TI IN R15E: Sections: 6, 7, 8, 17, 18, 19, 20, 29(N/2), 30(N/2) T12N R14E: Sections 35, 36 Umiat Meridian. Rule 2 Well Saacine There shall be no restrictions as to well spacing except that no pay shall be opened in a well closer than 500 feet to the boundary of the affected area. Conservation Order 341J February 3, 2021 Page 5 of 12 Rule 3 Casing and Cementing Requirements (a) Conductor casing shall be set at least 75 feet below the surface and sufficient cement shall be used to fill the annulus behind the pipe to the surface. Rigid high-density polyurethane foam may be used as an alternative to cement, upon approval by the AOGCC. The AOGCC may also administratively approve other sealing materials upon application and presentation of data which show the alternate is appropriate based on accepted engineering principles. (b) Surface casing to provide proper anchorage for equipment, to prevent uncontrolled flow, to withstand anticipated internal pressure, and to protect the well from the effects of permafrost thaw -subsidence or freeze -back loading shall be set at least 500 feet, measured depth, below the base of the permafrost but not below 5000 feet true vertical depth. Sufficient cement shall be used to fill the annulus behind the casing to the surface. The surface casing shall have minimum axial strain properties of 0.5% in tension and 0.7% in compression. (c) Alternate casing programs may be administratively approved by the AOGCC upon application and presentation of data, which show the alternatives, are appropriate and based upon accepted engineering principles. Rule 4 Blowout Prevention Equipment and Practice (Revoked C.O.341D) Rule 5 Automatic Shut-in Equipment (Revoked Other Order 66) Rule 6 Pressure Surveys (Revised: CO 341F.002 and CO 341F.007) (a) An Annual Pressure Surveillance Plan shall be submitted to the AOGCC in conjunction with the Annual Prudhoe Pool Reservoir Surveillance Report by April 1 of each year. This plan will contain the number and approximate location of pressure surveys anticipated for the next calendar year, and it will be subject to approval by the AOGCC by May 1 of that year. A minimum of 5% of the total pressure surveys acquired each year shall be from each of the following development areas: Gas Cap, Gravity Drainage, Flow Station 2 Water/MI Flood (MWAG) Project, Eastern Peripheral Wedge Zone MWAG Project, Western Peripheral Wedge Zone MWAG Project, Eileen West End Waterflood Project, and the Northwest Fault Block MWAG Project. (b) Data from the surveys required in (a) of this rule shall be submitted with the Annual Prudhoe Oil Pool Reservoir Surveillance Report by April 1 of each year. Data submitted shall include rate, pressure, time depths, temperature, and any well condition necessary for the complete analysis of each survey. The datum for the pressure surveys is 8,800 true vertical feet subsea. Transient pressure surveys obtained by a shut-in buildup test, an injection well pressure fall-off test, a multi -rate test, or an interference test are acceptable. Calculation of bottom -hole pressures from surface data will be permitted for water injection wells. Other quantitative methods may be administratively approved by the AOGCC. (c) Results and data from any special reservoir pressure monitoring techniques, tests, or surveys shall also be submitted as prescribed in (b) of this rule. Rule 7 Gas -Oil Contact Monitoring (Revised: CO 341F.002 and CO 341F.007) (a) An Annual GOC Monitoring Surveillance Plan shall be submitted to the AOGCC in conjunction with the Annual Prudhoe Reservoir Surveillance Report by April 1 of each Conservation Order 341J February 3, 2021 Page 6 of 12 year. This plan will contain the number and approximate locations of neutron log surveys anticipated for the next calendar year and be subject to approval by the AOGCC by May 1 of that same year. The neutron logs obtained shall be distributed across Gas Cap, Gravity Drainage, Gravity Drainage Waterflood Interaction, and downdip areas affected by gas and conducted using good engineering practice. (b) The neutron logs run on any well shall be filed with the AOGCC by the last day of the month following the month in which the logs were run. Rule 8 Productivity Profiles (Revised: CO 341F.007) A complete copy of any spinner flow meter or tracer surveys obtained on wells, together with the data and results from the surveys, shall be recorded and filed with the AOGCC by the last day of the month following the month in which a survey is finalized. Rule 9 Pool Off -Take Rates (Revised CO 341F) The maximum annual average oil offtake rate is 1.5 million barrels per day plus condensate production. The maximum annual average gas offtake rate is 3.6 billion standard cubic feet per day, which contemplates an annual average rate of 2.7 billion standard cubic feet per day shipped to the proposed AK LNG GTP and additional capacity to account for production upsets at other fields that feed the proposed AK LNG GTP. Daily offtake rates in excess of these amounts are permitted only as required to sustain these annual average rates. The annual average offtake rates as specified shall not be exceeded without the prior written approval of the AOGCC. The phrase "annual average offtake rates" means the daily average rate calculated by dividing the total volume produced in a calendar year by the number of days in that year. However, in the first calendar year that large gas offtake rates are initiated following the completion of a large gas sales pipeline, the annual average offtake rate for gas shall be determined by dividing the total volume of gas produced in the calendar year by the number of days remaining in the year following initial delivery to the large gas sales pipeline. Rule 10 Facility Gas Flaring (Revoked CO 341C) Rule 11 Annual Surveillance Reporting An annual Prudhoe Oil Pool surveillance report will be required by April I of each year. The report shall include but is not limited to the following: 1. Progress of enhanced recovery project(s) implementation and reservoir management summary including engineering and geotechnical parameters. 2. Voidage balance by month of produced fluids, oil, water and gas, and injected fluids, gas, water, low molecular weight hydrocarbons, and any other injected substances (which can be filed in lieu of monthly Forms 10-413 for each EOR project). 3. Analysis of reservoir pressure surveys within the field. 4. Results and where appropriate, analysis of production logging surveys, tracer surveys and observation well surveys. 5. Results of gas movement and gas -oil contact surveillance efforts including a summary of wells surveyed and analysis of gas movement within the reservoir. The analysis shall include map(s) and/or tables showing the locations of various documented gas movement mechanisms as appropriate. Conservation Order 341J February 3, 2021 Page 7 of 12 6. Progress of the Gas Cap Water Injection project with surveillance observations including; (a) volume of water injected, (b) reservoir pressure results, maps, and analysis (in conjunction with (3.) of this rule), (c) water movement and zonal conformance maps derived from surveillance (such as Pulsed Neutron Logs and 4-D gravity surveys) (d) results of reservoir evaluations of performance (such as material balance and reservoir simulation studies), (e) surveillance plans for the upcoming year, and (f) any plans for change in project operation. Rule 12 Prudhoe Bay Miscible Gas Project (PBMGP) (a) Expansion of the PBMGP and infill expansion of miscible gas injection in the NWFB is approved for the 59,740 acre portion of the Prudhoe Oil Pool defined in the record. (b) An annual report must be submitted to the AOGCC detailing performance of the PBMGP and outlining compositional information for the current miscible injectant (MI) necessary to maintain miscibility under anticipated reservoir conditions. (c) The minimum miscibility pressure (MMP) of the Miscible Injectant must be maintained at least 100 psi below the average reservoir pressure in the Prudhoe Bay Miscible Project area. When the Operator demonstrates that the reservoir pressure is no longer declining within the Prudhoe Bay Miscible Project Area (as evidenced by reservoir pressure measurements), the MMP may be maintained at or below the average reservoir pressure in the Prudhoe Bay Miscible Project area. Rule 13 Waiver of GOR Limitation (Revised: CO 341F.007) (a) The AOGCC waives the requirements of 20 AAC 25.240(b) for all oil wells in the Prudhoe Oil Pool of the Prudhoe Bay Field so long as the gas from the wells is being returned to the pool, or so long as the additional recovery project is in operation. (b) For the Prudhoe Oil Pool `oil well' means a well that produces oil at a gas -oil ratio of 200,000 scf/stb or lower. Rule 14 Waiver of "Application for Sundry Approval" Requirement for Workover Operations The requirements of 20 AAC 25.280(a) are waived for development wells in the Prudhoe Oil Pool of the Prudhoe Bay Field. Sundry work application and reporting requirements shall be done in accordance with the "Well Work Operations and Sundry Notice/Reporting Requirements for Pools Subject to Sundry Waiver Rules" matrix maintained by the AOGCC. Rule 15 Waterfloodine The AOGCC approves the December 1980 additional recovery application for water -flooding in the Prudhoe Oil Pool subject to the requirements listed in Rule 11 above. Any proposed changes must be submitted to the AOGCC for approval. Rule 16 Orders Revoked (Revised this Order) The following Conservation Orders and associated Administrative Approvals and letter approvals are hereby superseded. Conservation orders 78, 83B, 85, 87, 88, 96, 97, 98B, 117, 117A, 118, 130, 137, 138, 139, 140, 141, 143, 145, 145A, 148, 155, 160, 164, 165, 166, 167, 169, 174, 178, 180, 181, 183, 184, 185, 186, 188, 189, 192, 194, 195, 195.1, 195.2, 195.4, 197, 199, 200, 204, 208, 213, 214, 219, 220, 223, 224, 238, 258, 259, 279, 290 and 333, and Conservation Order 3417 February 3, 2021 Page 8 of 12 March 20, 1981 and August 22, 1986 letter approvals. Additionally, conservation orders 341, 341A, 34113, 341C, 341D, 341E, 341F, 341G, 341H, 341I, and 721 and all associated administrative approvals (except CO 341D.001 and CO 341E.003, which remain in effect) are hereby superseded. The hearing records of these orders are made part of the record for this order. Rule 17 Gas Cap Water Iniections The Gas Cap Water Injection Project as described in the operator's application and testimony is approved. Ongoing reservoir surveillance is required to determine that water movement within the reservoir is confined as intended and does not negatively impact overall hydrocarbon recovery, and to determine that the project has resulted in stabilization of reservoir pressure. Rule 18 Comminelin¢ of Production in the Same Wellbore (Revised: CO 341F.001, CO 341G, CO 341H. C0341H.002, C0341I, CO 721, and this order) (a) Commingling production from the Aurora Oil Pool in Well S-26 or the affected area of the Put River Oil Pool, as that pool was defined CO 559A on December 13, 2018, (hereinafter referred to as the Put River Sands) with the Prudhoe Oil Pool is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: i. Prior to commingling production, a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Aurora or Put River Sands (in isolation from the Prudhoe Oil Pool). ii. For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling and analysis must occur at least twice per year and not less frequently than once every seven months. iii. A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. iv. The operator shall submit a review of pool production allocation factors and issues over the prior year with the annual reservoir surveillance report and retain electronic file(s) containing daily allocation data and daily test data for a minimum of five years. V. The volumes reported on Form 10-405—i.e., in accordance with 20 AAC 25.230(b)—must identify commingled production allocated to the Aurora Oil Pool or Put River Sands and the Prudhoe Oil Pool. vi. A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Aurora Oil Pool or Put River Sands and the Prudhoe Oil Pool, along with the analyses of the geochemical tests, production logs, and regular well tests. Conservation Order 341J February 3, 2021 Page 9 of 12 (b) A commingled well that is shut in for more than six months shall have the Put River Sands and Prudhoe Oil Pool mechanically isolated to prevent crossflow between the pools. (c) Downhole commingling of production between the POP and LOP in the PBU L5-21 well is approved subject to the following allocation methodology; i. All oil and water allocated to the well shall be allocated to the LOP, ii. All NGLs allocated to the well shall be allocated to the POP, iii. Gas shall be allocated to the POP and LOP based on the following formulas; 1. Prudhoe Formation Gas Rate = Total Gas Rate — Lisburne Formation Gas Rate 2. Lisburne Formation Gas Rate = allocated oil rate x Lisburne Oil Pool Solution Gas Oil Ratio 3. Lisburne Oil Pool Solution Gas Oil Ratio = 863 scf/stbo (d) Downhole commingling of production between the POP and LOP in the PBU K-333 well is approved subject to the following allocation methodology; i. All oil and water allocated to the well shall be allocated to the LOP, ii. All NGLs allocated to the well shall be allocated to the POP, iii. Gas shall be allocated to the POP and LOP based on the following formulas; 1. Prudhoe Formation Gas Rate = Orifice Gas Pass Through Rate 2. Lisburne Formation Gas Rate = PBU K-333 Total Gas Rate — Orifice Gas Pass Through Rate (e) Downhole commingling of production between the POP and LOP in the PBU K- 322 well is approved subject to the following conditions; i. The well must be completed with the sliding sleeve and interchangeable orifice over the POP perforations, as described in the application; ii. The PBU K-322 well must be tested preidically in accordance with the established well testing and allocation procedures to allocate a total production volume for the well. Production to the POP and LOP shall be allocated as follows: 1. NGLs — allocated 100% to POP; 2. Oil —allocated 100% to LOP; 3. Water — allocated 100% to LOP; and 4. Gas — POP Formation Gas Rate — Orifice Gas Pas Through Rate, LOP Gas Rate = Total Gas Rate — Orifice Gas Pass Through Rate (f) Downhole commingling of production between the POP and LOP in the PBU L3- 24 well is approved subject to the following allocation methodology; i. Prior to perforating the POP the LOP must be flowed and tested 1. If the test yields more than 5 BOPD of oil from the LOP; a. An oil sample shall be collected for geochemical analysis purposes; b. Production shall be allocated to the POP and LOP based on; i. Cased hole production logging, differential production test, or geochemical analysis ii. Allocation test shall be conducted a minimum of once per year unless a significant change in fluid rate, water cut, or GOR occurs, in which case additional tests will be conducted. Conservation Order 341J February 3, 2021 Page 10 of 12 2. If the test yields less than 5 BOPD it will be assumed that the LOP will produce only water going forward and any incremental oil, gas, and water produced after the POP perforations are added will be assumed to be coming exclusively from the POP. If a significant change in fluid rate, water cut, or GOR occurs cased hole production logging or differential production tests will be utilized to allocate production. Rule 19 CO2 Utilization Study (Revised CO 341I.001) No later than the Financial Investment Decision (FID) of the MGS Project (the operator shall provide written notification to the AOGCC when the FID is made), the WIOs shall complete a study and submit a report to the AOGCC detailing the best use of the effluent gas stream projected to come from the AK LNG GTP to maximize total hydrocarbon recovery. The study and report shall evaluate the suitability of using CO2 for enhanced recovery purposes in the oil pools on the North Slope in which any of the four main WIOs (BPXA, ExxonMobil, CPAI, or Chevron) have an ownership interest. The study and report shall look at the benefits of using CO2, and mixtures containing CO2, for enhanced recovery purposes (including miscible injection, viscosity reducing, and pressure maintenance type projects as appropriate) and include estimates of additional recovery that would be attributable to CO2 injection. The report shall also evaluate challenges to implementing CO2 injection in these pools. Rule 20 Liquid Hydrocarbon Recovery Maximization Report (Revised C0341I.001) By 6 months after the FID of the MGS Project, the WIOs shall submit a report to the AOGCC that provides detailed information about the results of projects and operations undertaken from the effective date of this order through the FID, as well as information about projects underway or planned at that time to accelerate liquid hydrocarbon production to maximize recovery in advance of the proposed major gas sales associated with the AK LNG project. Rule 21 Administrative Relief Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the AOGCC may administratively waive the requirements of any rule stated herein or administratively amend this order 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. Rule 22 Annular Pressure of Production Wells (Source CO 341I.002) a. At the time of installation or replacement, the operator shall conduct and document a pressure test of tubulars and completion equipment in each production well that is sufficient to demonstrate that planned well operations will not result in failure of well integrity, uncontrolled release of fluid or pressure, or threat to human safety. b. The operator shall monitor each production well daily to check for sustained pressure, except if prevented by extreme weather conditions, emergency situations, or similar unavoidable circumstances. Monitoring results shall be made available for Commission inspection. c. The operator shall notify the Commission within three working days after the operator Conservation Order 3411 February 3, 2021 Page 11 of 12 identifies a well as having (1) sustained inner annulus pressure that exceeds 2500 psig for wells processed through the Lisburne Processing Center and 2100 prig for all other production wells, or (2) sustained outer annulus pressure that exceeds 1000 psig. d. The Commission may require the operator to submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action or increased surveillance for any production well having sustained pressure that exceeds a limit set out in paragraph (c) of this rule. The operator shall give the Commission notice consistent with the requirements of Industry Guidance Bulleting 10-01 A of the testing schedule to allow the Commission to witness the tests. e. If the operator identifies sustained pressure in the inner annulus of a production well that exceeds 45% of the burst pressure rating of the well's production casing for inner annulus pressure, or sustained pressure in the outer annulus that exceeds 45% of the burst pressure rating of the well's surface casing for outer annulus pressure, the operator shall notify the Commission within three working days and take corrective action. Unless well conditions require the operator to take emergency corrective action before Commission approval can be obtained, the operator shall submit in an Application for Sundry Approvals (Form 10- 403) a proposal for corrective action. The operator shall give the Commission sufficient notice of the testing schedule to allow the Commission to witness the tests. £ Except as otherwise approved by the Commission under (d) or (c) of this rule, before a shut-in well is placed in service, any annulus pressure must be relieved to a sufficient degree (1) that the inner annulus pressure at operating temperature will be below 2000 psig, and (2) that the outer annulus pressure at operating temperature will be below 1000 psig. However, a well that is subject to (c) but not (e) of this rule may reach an annulus pressure at operating temperature that is described in the operator's notification to the Commission under (c) of this rule, unless the Commission prescribes a different limit. g. For purposes of this rule, 1. "inner annulus" means the space in a well between tubing and production casing; 2. "outer annulus" means the space in a well between production casing and surface casing; 3. "sustained pressure" means pressure that (A) is measurable at the casing head of an annulus, (B) is not caused solely by temperature fluctuations, and (C) is not pressure that has been applied intentionally. Done at Anchorage, Alaska and dated February 3, 2021. Digitallysigned Jeremy byleremy M. vete M. Price WMM21.0203 161038-09'00' Jeremy M. Price Chair, Commissioner Daniel T. Dignaliyalgnedby DaWW See.o U, Seamount, Jr. 1D1a 20319 sW Daniel T. Seamount, Jr. Commissioner Jessie L. Digitally signed by Jessie L.Cbmieimski Chmielowski 112021.02A3 152 M% Woo' Jessie L. Chmielowski Commissioner Conservation Order 341J February 3, 2021 Page 12 of 12 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 l0 -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. Colombie, Jody J (CED) From: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Sent: Wednesday, February 3, 2021 5:03 PM To: AOGCC_Public-Notices Subject: [AOGCC_Public_Notices] co341J Attachments: co341 J.pdf Categories: Yellow Category Please see attached. Jody J. Colombie AOGCC Special Assistant Alaska Oil and Gas Conservation Commission State of Alaska 333 West 7h Avenue Anchorage, AK 99501 Phone Number: 907-793-1221 Email: jody.colombie@alaska.gov List Name: AOGCC_Public_Notices@list.state.ak.us You subscribed as: ]ody.colombie@alaska.gov Unsubscribe at: http:Hlist.state.ak.us/mailman/options/aogcc_public_notices/jody.colombie%40alaska.gov Bernie Karl Gordon Severson Richard Wagner K&K Recycling Inc. 3201 Westmar Cir. P.O. Box 60868 P.O. Box 58055 Anchorage, AK 99508-4336 Fairbanks, AK 99706 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov ADMINISTRATIVE APPROVAL CONSERVATION ORDER NO. 341J.001 October 26, 2021 Ms. Alicia Showalter Land Representative Hilcorp North Slope, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Docket Number: CO-21-009 Request to Amend Rule 17 of Conservation Order No. 341J to Extend the Life of the Gas Cap Water Injection Project Prudhoe Bay Unit, Prudhoe Bay Oil Pool Dear Ms. Showalter: By letter dated June 23, 2021, Hilcorp North Slope, LLC (Hilcorp) requested the Alaska Oil and Gas Conservation Commission (AOGCC) amend Rule 17 of Conservation Order No. (CO) 341J to modify the conditions of the Gas Cap Water Injection (GCWI) project and thereby extend its life. In accordance with 20 AAC 25.556(d)1, the AOGCC GRANTS, Hilcorp’s request. On November 30, 2001, the AOGCC issued CO 341D, which authorized the gas cap water injection project in the Prudhoe Oil Pool (POP). Rule 17 of CO 341D provides: The Gas Cap Water Injection Project as described in the operator's application and testimony is approved. Ongoing reservoir surveillance is required to determine that water movement within the reservoir is confined as intended and does not negatively impact overall hydrocarbon recovery, and to determine that the project has resulted in stabilization of reservoir pressure. 1 The application asked for an administrative approval under Rule 21 of CO 341J, which granted the AOGCC the authority to administratively amend the order. This rule was made obsolete on February 10, 2018, when 20 AAC 25.556(d) became effective and authorized the AOGCC to administratively amend any order it has issued. CO 341J.001 October 26, 2021 Page 2 of 3 The POP pool rules have been modified numerous times since the GCWI was authorized. Rule 17 has remained unchanged. The application and testimony underlying the issuance of CO 341D contained several project limitations, including that injection was to continue for 20 years, peak water injection rate would be 650 thousand barrels of water per day (MBWPD), and the cumulative injection volume would be 4 billion barrels of water (BBW). In the years since the GCWI was authorized, more information has been learned about the POP and the effectiveness of the GCWI. To date, the GCWI has performed as expected in terms of stabilizing the reservoir pressure and increasing the ultimate recovery. Data analysis and reservoir modelling indicates that continuing and expanding the GCWI will further enhance recovery from the field. As predicted, the areas in the POP oil rim where seawater was injected to enhance recovery have matured and no longer need as much seawater which makes more seawater available for the GCWI. In addition, enhanced recovery methods have been evaluated and revised in other ways, notably the Seawater Optimization Plan which found that ceasing seawater injection in some portions of the field would improve ultimate recovery in those areas by converting the area from a waterflood to a gravity drainage project and thus reduce the residual oil saturation in the area, freeing up an additional seawater source for the GCWI. Because it has the capacity to inject over 800 MBWPD into the GCWI wells, Hilcorp modelled an increase of the GCWI injection limit from 650 to 800 MBWPD and found that by 2055, an additional 27.3 million barrels of oil will be recovered from the field with the increased water injection. Based on its modeling, Hilcorp has asked that the project limitations that were contained in the initial application and testimony be amended to allow continuation and expansion of the GCWI project. Based on the above, AOGCC finds that Hilcorp’s proposal will not cause waste, will not jeopardize correlative rights, is based on sound engineering and geosciences principles, and will not increase the risk of fluid movement into freshwater. The information provided by Hilcorp demonstrates that continuation and expansion of the GCWI will improve ultimate recovery from the POP and thus will not promote waste. The POP is contained within the Prudhoe Bay Unit, which will ensure all owners and landowners correlative rights are protected. Nearly 20 years of injection activities have demonstrated the effectiveness of the GCWI and models have been fine-tuned over the years to provide reliable forecasts of future recovery under various development scenarios. These demonstrate that Hilcorp’s proposal is based on sound engineering and geosciences principles. The GCWI injection wells were drilled specifically for this project and meet all regulatory requirements for Class II enhanced oil recovery injection wells. Continuing to operate and monitor the wells in accordance with the regulations will ensure that the risk of fluid movement into freshwater will not increase. Hilcorp’s proposal meets all the requirements to allow CO 341J to be amended administratively. CO 341J.001 October 26, 2021 Page 3 of 3 Now Therefore It Is Ordered, Rule 17 of CO 341J is revised to read as follows: The Gas Cap Water Injection Project as described in the operator's application and testimony is approved. The daily injection rate, cumulative injection volume, and project life limits stated in the application and testimony are modified to comport with the findings set forth above. Ongoing reservoir surveillance is required to determine that water movement within the reservoir is confined as intended and does not negatively impact overall hydrocarbon recovery, and to determine that the project has resulted in stabilization of reservoir pressure. DONE at Anchorage, Alaska and dated October 26, 2021. Jeremy M. Price Daniel T. Seamount, Jr. Jessie L. Chmielowski 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. Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov ADMINISTRATIVE APPROVAL CONSERVATION ORDER 341J.002 Ms. Kyndall Carey Land Representative Hilcorp North Slope, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Docket Numbers: CO-22-008 - Request for Administrative Approval to amend reporting requirements of CO 341J CO-22-015 - Request for Administrative Approval to allow produced water to be injected in the gas cap of the Prudhoe Oil Pool Prudhoe Bay Unit, Prudhoe Oil Pool Dear Ms. Carey: By letters dated July 24, 2022, and October 19, 2022, Hilcorp North Slope, LLC (Hilcorp) requested that the Alaska Oil and Gas Conservation Commission (AOGCC) administratively amend Conservation Order No. 341J (CO 341J) to amend Rule 6 – Pressure Surveys, Rule 7 – Gas-Oil Contact Monitoring, Rule 11 Annual Surveillance Reporting, Rule 12 – Prudhoe Bay Miscible Gas Project (PBMGP), and Rule 17 - Gas Cap Water Injection. In its own motion the AOGCC is proposing rescinding Rule 2 - Well Spacing and Rule 21 – Administrative Relief. In accordance with 20 AAC 25.556(d), the AOGCC hereby GRANTS Hilcorp’s requests. Rule 6 – Pressure Surveys: Hilcorp proposes to eliminate the requirement to submit a reservoir pressure survey plan for the coming year as part of the annual reservoir surveillance report for the AOGCC’s review/concurrence. The Prudhoe Oil Pool (POP) is a very well understood reservoir having been in production for over 45 years with a huge amount of data about the reservoir having been collected and analyzed over the years and used to make geologic and reservoir simulation models of the field. The field is so well understood that there’s little value to requiring Hilcorp to submit a plan each year about its plans for conducting pressure surveys during the coming year that require a certain minimum percentage of those surveys to be conducted in each of the various development areas of the POP. It is more advantageous for reservoir development to allow Hilcorp to conduct pressure surveys as needed and where needed so that surveys can be conducted where they will provide the most useful information related to field development. CO 341J.002 February 1, 2023 Page 2 of 5 Rule 7 – Gas-Oil Contact Monitoring: Hilcorp proposes to eliminate the requirement to submit a gas-oil contact (GOC) monitoring plan for the coming year as part of the annual reservoir surveillance report for the AOGCC’s review/concurrence. As stated under the discussion of the proposed changes to Rule 6, POP is a very well understood reservoir and similar to pressure surveys there’s little value to requiring Hilcorp to submit a GOC monitoring plan each year about its plans for conducting neutron logs during the coming year. It is more advantageous for reservoir development to allow Hilcorp to collect neutron logs as needed and where needed so that they can be conducted where they will provide the most useful information related to field development. Rule 11 – Annual Surveillance Reporting: Hilcorp proposes eliminating the requirements to submit results of production logs, tracer surveys, and observation well surveys and the results of GOC surveillance efforts as part of the annual surveillance report for the POP. The results of these types of surveys and reports are already required to be submitted to the AOGCC under existing data collection regulations so there’s little need to require this information to be submitted again as part of the annual surveillance report. Rule 12 – Prudhoe Bay Miscible Gas Project (PBMGP) Hilcorp proposes to eliminate the requirement to submit an annual report detailing the performance of the PBMGP. Reporting on EOR performance is already a requirement of the annual surveillance report so having a requirement to do the same as part of another rule is not necessary. Rule 17 - Gas Cap Water Injection: Hilcorp proposes to allow produced water to be injected in the POP gas cap as part of its planned Pressure and Vaporization Enhancement (PAVE) project. The PAVE project would divert water that is currently going to disposal wells and waterflood patterns where water injection is no longer providing a significant benefit. PAVE would build on the success of two previous projects, the gas cap water injection (GCWI) project that injects seawater into the POP gas cap in order to increase reservoir pressure and the seawater optimization project (SWOP) that diverted seawater from waterflood patterns to the GCWI project. Both of these projects have been shown to increase ultimate recovery from the field. The GCWI by slowing the rate of pressure decline in the POP and stabilizing the average reservoir pressure, and the SWOP by making additional seawater available for the GCWI and by allowing waterflood patterns to transition to gravity drainage with lean gas vaporization recovery methods which result in a lower residual oil saturation. Full field models of the PAVE project indicate that ultimate recovery form the POP would increase by approximately 85 million barrels of oil and natural gas liquids. Rule 2 - Well Spacing: On September 27, 2022, amendments to AS 31.05.100 became law.These amendments had the effect of eliminating the interwell spacing requirements that were previously in statute and regulations.As such there’s no longer a need to have a well spacing rule in the pool rules for the POP. CO 341J.002 February 1, 2023 Page 3 of 5 Rule 21 – Administrative Relief: 20 AAC 25.566(d) established a regulation that grants the AOGCC authority to administratively amend any order that the AOGCC has issued provided certain conditions are met. These conditions require that the changes don’t promote waste or jeopardize correlative rights, they’re based on sound engineering and geoscience principles, and will not increase the risk of fluid movement into freshwater aquifers. These are the same requirements currently in Rule 21, making the rule superfluous. Now therefore it is ordered: The following rules of CO 341J are amended as follows: Rule 2 – Well Spacing (Rescinded CO 341J.002) Rule 6 Pressure Surveys (Revised CO 341J.002) (a) Data from all pressure surveys run in the Prudhoe Oil Pool during the calendar year shall be submitted with the Annual Prudhoe Oil Pool Reservoir Surveillance Report by April 1 of each year. Data submitted shall include rate, pressure, time, depths, temperature, and any well condition necessary for the complete analysis of each survey. The datum for the pressure surveys is 8,800 true vertical feet subsea. Transient pressure surveys obtained by a shut-in buildup test, an injection well pressure fall off test, a multi-rate test, or an interference test are acceptable. Calculation of bottom hole pressures from surface data will be permitted for water injection wells. Other quantitative methods may be administratively approved by the AOGCC. (b) Results and data from any special reservoir pressure monitoring techniques, tests, or surveys shall also be submitted as prescribed in (a) of this rule. Rule 7 Gas-Oil Contact Monitoring (Revised CO 341J.002) The neutron logs run on any well shall be filed with the AOGCC by the last day of the month following the month in which the logs were run. Rule 11 Annual Surveillance Reporting (Revised CO 341J.002) An annual Prudhoe Oil Pool surveillance report will be required by April 1 of each year. The report shall include but is not limited to the following: 1. Progress of enhanced oil recovery (EOR) project(s) implementation and reservoir management summary including engineering and geotechnical parameters. 2. Voidage balance by month of produced fluids, oil, water, and gas, and injected fluids, gas, water, low molecular weight hydrocarbons, and any other injected substances (which can be filed in lieu of monthly forms 10-413 for each EOR project). 3. Analysis of reservoir pressure surveys within the field. CO 341J.002 February 1, 2023 Page 4 of 5 4. Progress of the Gas Cap Water Injection project with surveillance observations including: a. Volume of water injected b. Reservoir pressure results, maps, and analysis (in conjunction with (3.) of this rule), c. Water movement and zonal conformance maps derived from surveillance (such as Pulsed Neutron Logs and 4-D gravity surveys) d. Results of reservoir evaluations of performance (such as material balance and reservoir simulation studies), e. Surveillance plans for the upcoming year, and f. Any plans for changes in project operation. Rule 12 Prudhoe Bay Miscible Gas Project (PBMGP) (Revised CO 341J.002) (a) Expansion of the PBMGP and infill expansion of miscible gas injection in the Northwest Fault Block (NWFB) is approved for the 59,740 acres portion of the Prudhoe Oil Pool defined in the record. (b) An annual report must be submitted to the AOGCC outlining compositional information for the current miscible injectant (MI) necessary to maintain miscibility under anticipated reservoir conditions. (c) The minimum miscibility pressure (MMP) of the Miscible Injectant must be maintained at least 100 psi below the average reservoir pressure in the Prudhoe Bay Miscible Project area. When the Operator demonstrates that the reservoir pressure is no longer declining within the Prudhoe Bay Miscible Project Area (as evidenced by reservoir pressure measurements), the MMP may be maintained at or below the average reservoir pressure in the Prudhoe Bay Miscible Project area. Rule 21 – Administrative Relief (Rescinded CO 341J.002) DONE at Anchorage, Alaska and dated February 1, 2023. Brett W. Huber, Sr. Jessie L. Chmielowski Greg C. Wilson Chair, Commissioner Commissioner Commissioner Gregory Wilson Digitally signed by Gregory Wilson Date: 2023.02.01 11:17:15 -09'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2023.02.01 13:24:24 -09'00' Brett W. Huber. Sr. Digitally signed by Brett W. Huber. Sr. Date: 2023.02.01 13:50:23 -09'00' CO 341J.002 February 1, 2023 Page 5 of 5 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. From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Conservation Order 341J.002 (PBU) Date:Wednesday, February 1, 2023 2:40:52 PM Attachments:co341J.002.pdf Docket Numbers: CO-22-008 - Request for Administrative Approval to amend reporting requirements of CO 341J CO-22-015 - Request for Administrative Approval to allow produced water to be injected in the gas cap of the Prudhoe Oil Pool Prudhoe Bay Unit, Prudhoe Oil Pool Samantha Carlisle AOGCC Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 __________________________________ List Name: AOGCC_Public_Notices@list.state.ak.us You subscribed as: samantha.carlisle@alaska.gov Unsubscribe at: https://list.state.ak.us/mailman/options/aogcc_public_notices/samantha.carlisle%40alaska.gov Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 mailed 2/1/23 INDEXES 5 North Slope, LLC Kyndall Carey Land Representative 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 907/777-8386 Fax: 907/777-8301 kyndall.carey@hilcorp.com October 19, 2022 Jessie Chmielowski Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 RE: Application for Administrative Approval to Amend CO 341J to Allow Produced Water Injection into the Gas Cap of the Prudhoe Oil Pool Dear Commissioner Chmielowski: Hilcorp North Slope, LLC (“Hilcorp North Slope”), as the operator of the Prudhoe Bay Unit (“PBU”), requests Alaska Oil and Gas Conservation Commission (“AOGCC”) administratively approve an amendment to Conservation Order 341J by repealing and replacing Rule 17 in its entirety with the language below to allow for produced water injection into the gas cap of the Prudhoe Oil Pool to enable execution of the anticipated Pressure and Vaporization Enhancement (“PAVE”) project. Rule 17: Gas Cap Water Injections Injection of seawater into wells at Pressure Support Injection Pad/East Dock Staging Pad for the Gas Cap Water Injection Project is approved. Produced water injection into the Prudhoe Bay original and expanded gas cap is also approved for the anticipated Pressure and Vaporization Enhancement project. Ongoing reservoir surveillance is required to determine that water movement within the reservoir is confined as intended and does not negatively impact overall hydrocarbon recovery and to determine that the project has resulted in stabilization of reservoir pressure. The PAVE project would inject produced water into and below the Prudhoe Bay original and expanded gas cap via injection wells located on new or existing pads. Produced water injection associated with the PAVE project will be diverted from existing water disposal wells and pattern waterflood injectors. Reallocation of produced water to the PAVE project is an expansion of the ongoing Gas Cap Water Injection (“GCWI”) and Seawater Optimization Plan (“SWOP”) projects which have performed as anticipated, increasing reservoir pressure via seawater injection to the gas cap and increasing ultimate recovery through gas vaporization since implementation of these projects in 2002 and 2020, respectively. Additional details about the proposed PAVE project and the expected increase in ultimate recovery of over 50mmbbl of oil and NGL from the Prudhoe Oil Pool are include in the attachment. If you need additional information, please contact Tanner Gansert at 907-564-5234. Respectfully, Kyndall Carey PBU Land Representative cc: ConocoPhillips Alaska, Inc. ExxonMobil Alaska Production Inc. Chevron U.S.A. Inc. Digitally signed by Kyndall Carey (3936) DN: cn=Kyndall Carey (3936), ou=Users Date: 2022.10.19 07:46:55 -08'00' Kyndall Carey (3936) AA Request to Amend CO 341J Attachment - PAVE Project Information Page 2 of 4 PAVE Project Scope The anticipated PAVE project increases ultimate recovery from the Prudhoe Oil Pool (“POP”) through injection of produced water into the original and expanded gas cap via new or existing wells permitted for water injection to enhance oil recovery. Water for injection will be sourced from water that is currently injected into existing water disposal wells or waterflood injectors, requiring injection rate reductions or shut in of one or more of these wells. Initial implementation is planned to consist of four water injection wells to be drilled in 2023 to 2024. The wells are anticipated to have injection capacity of ~75 mbw/d each. Expansion of PAVE with additional injectors may be pursued following initial implementation. Project Justification PAVE, based on the Prudhoe Bay Full Field Model reservoir simulation (“FFM”), is anticipated to increase ultimate recovery from the Prudhoe Oil pool by an estimated 85 mmbbl of oil and NGL through 2060 as shown in Figure 1 while increasing reservoir pressure approximately 100 psi. Figure 1: FFM predicted PAVE project incremental oil plus NGL recovery PAVE is progression and expansion of the approved Gas Cap Water Injection (“GCWI”) and Seawater Optimization Plan (“SWOP”) projects which have increased the ultimate recovery from the Prudhoe Oil Pool by increasing reservoir pressure, improving lean gas vaporization EOR efficiency and by increasing the proportion of the POP that utilizes the higher efficiency gas-based recovery mechanisms (gravity drainage and lean gas vaporization), compared with the alternative waterflood mechanism. The GCWI project stabilized and increased reservoir pressure following implementation in 2002, resulting in a significant increase in ultimate recovery as evidenced by the slowing of oil production decline rate following project implementation, as seen in Figure 1. AA Request to Amend CO 341J Attachment - PAVE Project Information Page 3 of 4 Figure 2: Reservoir pressure stabilization and reduced oil production decline rate due to gas cap water injection Increasing reservoir pressure increased oil production rate and ultimate recovery, compared with continuing pressure decline without GCWI through increased drawdown, reducing oil viscosity and increasing lean gas vaporization efficiency. Figure 2, below, demonstrates the laboratory-based relationship between increasing reservoir pressure and the increase in recovery of vaporized oil. Figure 3: Recovery factor of oil via lean gas vaporization increases with increasing reservoir pressure SWOP furthered the GCWI injection project following implementation in 2020 by increasing seawater injection into the gas cap through shutting in pattern waterflood injectors in the DS-01 and DS-12 areas of the POP. This shut-in of a portion of the POP waterflood initiated a local transition from waterflood to the relatively higher efficiency gas-based processes of gravity drainage and lean gas vaporization, as described in the November 2019 application and the February 2020 hearing to approve the SWOP project. g p AA Request to Amend CO 341J Attachment - PAVE Project Information Page 4 of 4 To date, SWOP has performed as anticipated based on results from the FFM which was used to evaluate the SWOP project. That response has been increased gas and vapor borne liquid (condensate and vaporized black oil) production in the SWOP project area, as evidenced by the increase in API gravity of affected producers, e.g. 01-26B in Figure 4. Figure 4: Well test and API gravity sample data indicating increased gas driven recovery as anticipated following implementation of SWOP Formation/Fluid Compatibility No damage to the reservoir is anticipated from the proposed injection of produced water into the gas cap. This statement is consistent with submissions in approved applications for Area Injection Orders 3 and 4 for Western and Eastern Operating Areas, respectively. It is also consistent with observations of the ongoing waterflood and over 40 years of produced water injection for enhanced recovery in the Prudhoe Oil Pool, including injection into gas saturated intervals in the existing Prudhoe Bay waterflood area. Historically, the only significant, but reversible, impact to waterflood injectivity has resulted from alternating produced water and seawater injection in the same well. This is not a concern for PAVE (or the ongoing GCWI and Waterflood) as all injectors will be dedicated to either produced water or seawater injection. Reservoir surveillance Since implementation of GCWI, the progress of the project and the injected water front has been effectively monitored with surveillance activities including saturation logs and time lapse gravity surveys. These surveillance activities will continue and will include monitoring of PAVE injection. 4 Page 1 of 3 Hilcorp North Slope, LLC 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 907/777-8386 Fax: 907/777-8301 July 14, 2022 Mr. Jeremy Price Commission Chair Alaska Oil and Gas Conservation Commission333 West 7th Avenue Anchorage, AK 99501 RE: Prudhoe Oil Pool Annual Surveillance Requirements Dear Commissioner Price, Hilcorp North Slope, LLC, (“Hilcorp North Slope”) as operator of the Prudhoe Bay Unit, submits a surveillance report annually to the Alaska Oil and Gas Conservation Commission (“AOGCC”) for the Prudhoe Oil Pool as required by Conservation Order (“CO”) 341J, on behalf of itself and the other working interest owners, ConocoPhillips Alaska, Inc., ExxonMobil Alaska Production Inc., and Chevron U.S.A.. Considering the maturity of the Prudhoe Bay field, Hilcorp North Slope is requesting modifications to this Conservation Order by administrative approval, as allowed by Conservation Order 341J, Rule 21. On August 26, 2019, the Standard Oil Company (“Standard Oil”) and Hilcorp Alaska, LLC (“Hilcorp Alaska”) entered into a Purchase and Sale Agreement for the sale by Standard Oil to Hilcorp Alaska of all of the issued and outstanding shares of stock of BP Exploration (Alaska) Inc. (“BPXA”). As a result of this stock sale, which closed on June 30, 2020, Hilcorp Alaska indirectly, through its ownership of BPXA, owns and controls all of BPXA’s upstream oil and gas interests in Alaska. On July 1, 2020, the entity BPXA underwent a name change to Hilcorp North Slope, LLC. As stated in the AOGCC’s Administrative Approval regarding a request from BPXA dated August 28, 2017, amending CO341F, “The Prudhoe Oil Pool is a mature development that has been under production for more than 40 years, and has multiple enhanced oil recovery (EOR) projects. The reservoir has been penetrated by, and logged within, more than 2400 wells, has been extensively studied, and is well understood. A high-quality reservoir simulation model is used to evaluate development options. As such, there is little need for the pressure-survey data that are now collected primarily to meet the requirements of Rule 6 of CO341F and are not relevant for effectively monitoring pool performance…After 40 years of development, data collection, analysis, and reservoir modeling, the continued requirement to collect neutron logs on all wells drilled within the pool does not provide much meaningful information.” The AOGCC administratively approved the requested changes to the reporting requirements for the Prudhoe Oil Pool; Hilcorp North Slope is requesting further amendment to the surveillance collection and reporting requirements under the same conditions. Requested amendments are as follows: By Samantha Carlisle at 11:20 am, Jul 14, 2022 Page 2 of 3 Hilcorp North Slope, LLC CO 341 J Rule 6: Hilcorp North Slope requests removal of Rule 6(a) and amendment of Rule 6(b) to remove reference to section (a) and proposes Rule 6 reads as follows: Rule 6 Pressure Surveys (a) Data from all pressure surveys run in the Prudhoe Oil Pool during the calendar year shall be submitted with the Annual Prudhoe Oil Pool Reservoir Surveillance Report by April 1 of each year. Data submitted shall include rate, pressure, time, depths, temperature, and any well condition necessary for the complete analysis of each survey. The datum for the pressure surveys is 8,800 true vertical feet subsea. Transient pressure surveys obtained by a shut-in buildup test, an injection well pressure fall off test, a multi-rate test, or an interference test are acceptable. Calculation of bottom hole pressures from surface data will be permitted for water injection wells. Other quantitative methods may be administratively approved by the AOGCC. (b) Results and data from any special reservoir pressure monitoring techniques, tests, or surveys shall also be submitted as prescribed in (a) of this rule. CO 341 J Rule 7: Hilcorp North Slope requests removal of Rule 7(a) and proposes Rule 7 reads as follows: Rule 7 Gas-Oil Contact Monitoring (a) The neutron logs run on any well shall be filed with the AOGCC by the last day of the month following the month in which the logs were run. CO 341 J Rule 11: Hilcorp North Slope requests removal of Rule 11.4 and 11.5, and proposes Rule 11 reads as follows: Rule 11 Annual Surveillance Reporting An annual Prudhoe Oil Pool surveillance report will be required by April 1 of each year. The report shall include but is not limited to the following: 1. Progress of enhanced oil recovery (“EOR”) project(s) implementation and reservoir management summary including engineering and geotechnical parameters. 2. Voidage balance by month of produced fluids, oil, water, and gas, and injected fluids, gas, water, low molecular weight hydrocarbons, and any other injected substances (which can be filed in lieu of monthly forms 10-413 for each EOR project). 3. Analysis of reservoir pressure surveys within the field. 4. Progress of the Gas Cap Water Injection project with surveillance observations including: a. Volume of water injected b. Reservoir pressure results, maps, and analysis (in conjunction with (3.) of this rule), c. Water movement and zonal conformance maps derived from surveillance (such as Pulsed Neutron Logs and 4-D gravity surveys) d. Results of reservoir evaluations of performance (such as material balance and reservoir simulation studies), e. Surveillance plans for the upcoming year, and f. Any plans for changes in project operation. Page 3 of 3 Hilcorp North Slope, LLC CO 341 J Rule 12: Hilcorp North Slope requests amendment of Rule 12 (b) to read as follows: Rule 12 Prudhoe Bay Miscible Gas Project (“PBMGP”) (a) Expansion of the PBMGP and infill expansion of miscible gas injection in the NWFB is approved for the 59,740 acres portion of the Prudhoe Oil Pool defined in the record. (b) An annual report must be submitted to the AOGCC outlining compositional information for the current miscible injectant (“MI”) necessary to maintain miscibility under anticipated reservoir conditions (c) The minimum miscibility pressure (“MMP”) of the Miscible Injectant must be maintained at least 100 psi below the average reservoir pressure in the Prudhoe Bay Miscible Project area. When the Operator demonstrates that the reservoir pressure is no longer declining within the Prudhoe Bay Miscible Project Area (as evidenced by reservoir pressure measurements), the MMP may be maintained at or below the average reservoir pressure in the Prudhoe Bay Miscible Project area. Request for Administrative Approval As a result of the information presented above, Hilcorp North Slope requests administrative approval of the modifications listed above. If you need additional information, please contact Leah Droege at 907-564-4764. Sincerely, Kyndall Carey Land Representative Hilcorp North Slope, LLC cc: ConocoPhillips Alaska, Inc. ExxonMobil Alaska Production Inc. Chevron U.S.A. Inc. Digitally signed by Kyndall Carey (3936) DN: cn=Kyndall Carey (3936), ou=Users Date: 2022.07.14 11:02:13 -08'00' Kyndall Carey (3936) Hilcorp North Slope, LLC Alicia Showalter Land Representative 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 907/777-8489 Fax: 907/777-8301 ashowalter@hilcorp.com June 23, 2021 Jeremy Price, Chair Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 RE: Application for Administrative Approval to Increase the Prudhoe Oil Pool Gas Cap Water Injection Rate and Extend the Life of the Gas Cap Water Injection Dear Chair Price: Hilcorp North Slope, LLC (“HNS”), as the Operator of the Prudhoe Bay Unit, which includes the Prudhoe Oil Pool, respectfully requests that the commission administratively approve, as allowed by Conservation Order 341J Rule 21, an injection rate increase into the Gas Cap Water Injection (“GCWI”) and remove limitations on total volume injected and project life. GCWI is permitted under Conservation Order 341J Rule 17 (effective November 30, 2001). “The Gas Cap Water Injection project as described in the operator’s application and testimony is approved. Ongoing reservoir surveillance is required to determine that water movement within the reservoir is confined as intended and does not negatively impact overall hydrocarbon recovery, and to determine that the project has resulted in stabilization of reservoir pressure.” GCWI Results to Date The initial application for the GCWI provided an estimated 20 year project life and a total injection volume of 4 billion barrels, due to continued reservoir benefits and plant maintenance the project life is able to go beyond the 20 year mark and total injection volume can also be increased. Initial injection rate was estimated to be up to 650 thousand barrels of water per day (“mbwpd”), however current operational limit is estimated at approximately 815 to 840 mbwpd as shown in Figure 1. Page 2 of 3 Hilcorp North Slope, LLC Figure 1. PSI Injection Rate As expected, seawater availability for GCWI has increased, as other areas decreased their demand for seawater. This was recently observed when FS1 implemented the Seawater Optimization Plan (“SWOP”) in 2020, which shut in approximately 45 mbwpd of seawater injection in the waterflood enabling an increase in GCWI Injection on an average basis. Over the life of the project thus far, GCWI has performed as anticipated, successfully stabilizing reservoir pressure and increasing ultimate recovery from the Prudhoe Oil Pool. Based on the Prudhoe Bay IPA full field reservoir simulation model, an estimated 27.3 MMSTB increase in hydrocarbon recovery by 2055 is anticipated by increasing from 650 to 800 mbwpd, as shown in Figure 2. Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -20-018 Prudhoe Bay Unit, Lisburne and Prudhoe Oil Pools The application of Hilcorp North Slope, LLC (HNS) for an order in accordance with 20 AAC 25.215 authorizing the downhole commingling of production in the wellbore of the Prudhoe Bay Unit L3-24 (PBU L3-24) well. HNS, by letter dated September 22, 2020, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order in accordance with 20 AAC 25.215 to authorize the downhole commingling of production from the Lisburne and Prudhoe Oil Pools in the PBU L3-24 well. The AOGCC has tentatively scheduled a public hearing on this application for October 27, 2020, at 10:00 a.m. at 333 West 7t' Avenue, Anchorage, Alaska 99501. 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 October 13, 2020. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 274-1433 after October 15, 2020. If a hearing is requested, the COVID-19 virus may necessitate that the hearing be held telephonically. Those desiring to participate or be present at the hearing should check with AOGCC the day before the hearing to ascertain if the hearing will be telephonic. If the hearing is telephonic, on the day of the hearing, those desiring to be present or participate should call 1-800- 315-6338 and, when instructed to do so, enter the code 14331 followed by the # sign. Because the hearing will start at 10:00 a.m., the phone lines will be available starting at 9:45 a.m. Depending on call volume, those calling in may need to make repeated attempts before getting through. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7`" Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on October 26, 2020, except that, if a hearing is held, comments must be received no later than the conclusion of the October 27, 2020, hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC at (907) 279-1433, no later than October 21, 2020. C\� 4— Jeremy M. Price Chair, Commissioner STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE. SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLUCATIONMWITH ENT.ITAC ED COPY OF ADVERTISING ORDER NUMBER -^ tl AO_081-007 U Lr FROM: AGENCY CONTACT: Jody Colombie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A.O.AGENCY PHONE: 333 West 7th Avenue 8/19/2020 (907 279-1433 Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907) 276-7542 TO PUBLISHER: SPECIAL INSTRUCTIONS: Anchorage Daily News, LLC PO Box 140147 Anchorage, Alaska 99514-0174 TYPE OF ADVERTISEMENT: R LEGAL ` DISPLAY CLASSIFIED OTHER (Specify below( DESCRIPTION PRICE CO -20-018 Initials ofwho prepared AO: Alaska Non -Taxable 92-600185 SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERrifIF,D AFFIDAVIT OF PUBLICATION wrnInTrAcnED Goev of ADVERTISM1fENT TD: AGGCC 333 West 7th Avenue Anchor8 e, Alaska 99501 Pae I of I Total of All Pages $ - REF Type I Number Amount Date Comments I PVN IVCO21795 2 AO AO -08-21-007 3 4 FIN AMOUNT SY Act. Template PGM LCR Object FV DIST LIQ I 21 AOGCC 3046 21 z 3 4 s Purchasing Authority Name: Tide: Fr_rcha�,tUng t Senator. Telephone Number Tracie L. Paladijczuk Administrative Officer II R^W 1. A.O.#and receiving agency name must appear on all Invoices and documents relating to this purchase. 2. The state is registered for tax free transactions under Chapter 32, IRS Cade. Registration number 92-73-OOD6 K. Items are for the exclusive use of the state and not for resale. DISTRIBUTION: Division FiscaUOriginal AO Copies: Publisher (faxed), Division Fiscal, Receiving Form: 02-901 Revised: 9/23/2020 Carlisle, Samantha J (CED) From: Carlisle, Samantha J (CED) Sent: Wednesday, September 23, 2020 2:55 PM To: AOGCC_Public_Notices Subject: Public Hearing Notice CO -20-018 PBU L3-24 Attachments: CO -20-018 PBU L3-24 Public Hearing Notice.pdf Docket Number: CO -20-018 Prudhoe Bay Unit, Lisburne and Prudhoe Oil Pools The application of Hilcorp North Slope, LLC (HNS) for an order in accordance with 20 AAC 25.215 authorizing the downhole commingling of production in the wellbore of the Prudhoe Bay Unit L3-24 (PBU L3- 24) well. Samantha Carlisle }isrcutive Soar_�tar�� I❑ Alaska Oil anLl C;as Conservation Commission 333 West 7', Avenue A echo ragW, AK 99501 (907' 793-1223 ALASKANS STAND TOGETHER 6 FT APART CONI ff)MIALifY NO[ICE., I his c-ituul m s.argc, inc lu inn nm a[6xhmaitn, amt.imy irUimnotion 6tu,u III -V:mka Cr,l anJ l as Conn ivation C'ommnsiun (AUC;( C'), Yato 4 ,91151,1.1 ant n for the I(I)Ij uttt ul the mtendat redpicnt(.,). Itmav trortt:un It r7tlel acId/ Ill In rs<ilct•ed infrnrm.rhnn. I hr unnu Ihori rod review, LI SO Or (Ik(')osmr` of such infoi Mahon mnv t iolalc atatn of ludcral law. if you 1m:111 tonntcaded ic<;pie:nt nt Ihis a-nmil, plras�. Julie it, 'without fu'sl Savin){ or fomar,lmnf it, aid, su lhat Lhc AOGi t uP thV mistake ui +cndin� it Ir+ tou' conta, I ti Inl antha C.111i51c of 'H', L�',v hamnnlh,E(;ttlisl< �ilu,ka�,rw, Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 ANCHORAGE DAILY NEWS AFFIDAVIT OF PUBLICATION RECEIVED Account #: 270227 ST OF AK/AK OIL AND GAS CONSERVATION COMMISSION 333 W. 7TH AVE STE 100, ANCHORAGE, AK 99501 SEP 3 0 2020 Order #: W0018068 STATE OF ALASKA THIRD JUDICIAL DISTRICT Lisi Misa being first duly sworn on oath deposes and says that she is a representative of the An- chorage 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 afore- said place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on 09/27/2020 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. A Subscribed and sworn to before this 28th day of Septembe 23 ` Z l 0 a rst v D Zoz� N tary Public in and for e State of Alaska. A Third Division N Anchorage, Alaska sa MY COMM SION XPIRES Cost: $303.82 AOGCC Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -20-018 Prudhoe Bay Unit, Lisburne and Prudhoe Oil Pools The application of Hilcorp North Slope, LLC (HNS) for an order in accordance with 20 AAC 25.215 authorizing the downhole commingling of production in the wellbore of the Prudhoe Bay Unit L3-24 (PBU L3-24) well. HNS, by letter dated September 22, 2020, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order in accordance with 20 AAC 25.215 to authorize the downhole commingling of production from the Lisburne and Prudhoe Oil Pools in the PBU 1-3-24 well. The AOGCC has tentatively scheduled a public hearing on this application for October 27, 2020, at 10:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. 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 October 13, 2020. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 274-1433 after October 15, 2020. If a hearing is requested, the COVID-19 virus may necessitate that the hearing be held telephonically. Those desiring to participate or be present at the hearing should check with AOGCC the day before the hearing to ascertain if the hearing will be telephonic. If the hearing is telephonic, on the day of the hearing, those desiring to be present or participate should call 1-800-315-6338 and, when instructed to do so, enter the code 14331 followed by the # sign. Because the heating will start at 10:00 a.m., the phone lines will be available starting at 9:45 a.m. Depending on call volume, those calling in may need to make repeated attempts before getting through. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on October 26, 2020, except that, if a hearing is held, comments must be received no later than the conclusion of the October 27, 2020, hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC at (907) 279-1433, no later than October 21, 2020. Jeremy M. Price Chair, Commissioner Published: September 27, 2020 Hilcorp Hilcorp North Slope, LLC September 22, 2020RECEIVED By Samantha Carlisle at 10;55 am, Sep 24, 2020) Jeremy Price, Chair Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 RE: Application for Administrative Approval to Commingle Production from Lisburne Oil Pool (CO 207B) and Prudhoe Oil Pool (CO 341F) in Prudhoe Bay Unit well L3-24 Dear Chair Price: Hilcorp North Slope LLC., as the Operator of the Prudhoe Bay Unit which includes the Lisburne Oil Pool (LOP) and the Prudhoe Oil Pool (POP), respectfully requests that the commission administratively approve commingling of production from the Lisburne Oil Pool and Prudhoe Oil Pool in well L3-24 which produces to the Lisburne Production Center (LPC). The commission previously approved downhole commingling of production of the POP and the LOP in the proposed K-322 well (CO 721) and the L5-21 well (CO 341 H). L3-24 is an existing well that produces exclusively from the Lisburne Wahoo Formation. Planned add-perfs into the Ivishak Oil Pool would be commingled with Lisburne Oil Pool fluids and produced up L3 -24's tubing to the LPC. Well integrity is not expected to be compromised with the addition of these perforations. L3-24 is a LTSI Lisburne producer that produced 100% water cut prior to shut-in; it has not produced since 2016. The proposed Ivishak perforations would access zone 1 oil intersected by well L3-24 uphole of the Lisburne Wahoo formation. It is believed that water production from the Lisburne Oil Pool comingled with the Prudhoe Oil Pool production will reduce the risk of hydrate formation in L3-24 and therefore improve on-time and economic recovery for this well. The proposed completion for L3-24 is shown in Exhibit A. Additional information in support of this application is included below. Hilcorp North Slope staff are available should you have any questions or need any additional information. If you need any additional information, please contact Leah Droege at 564-4764 or Kirsty Schultz at 564-5258. Sincerely, Bo York PBE Operations Manager D1*01 lion E 80 Yw8 Bo York �o ;man.@w i, Wm Dae: 2020.09.2410: 19: 08 48'00 Attachments: Exhibit A — L3-24 Proposed Wellbore Schematic, Exhibit B — MIT -T Details 3800 Centerpoint Drive, Suite 1400, Anchorage, AK 99503 Phone: 907/777-8300 hilcorp.com Hilcorp Hilcorp North Slope, LLC Additional Information in Support of Application Introduction Commingling of production within the same well -bore from two pools is permitted under 20 AAC 25.215(b) if the Commission, after notice and opportunity for public hearing, "(1) finds that waste will not occur, and that production from separate pools can be properly allocated; and 2) issues an order providing for commingling for wells completed from these pools within the field." Waste Will Not Occur 1. Production Considerations Low total flow rates from Ivishak zone I vertical penetrations often result in hydrate formation in the wellbore, as demonstrated in analog producer L3-22. Hydrates restrict flow to surface and require regular maintenance and remediation to allow continual production from the well. Analog producer L3-22 experienced only 44% ontime and approximately $100,000 spend within a 5 month period as a result of hydrates and paraffin issues. The initial plan for L3-24 in 2018 was to isolate the Lisburne perforations with a sand plug and cement cap, and convert the well from a LOP producer to a POP producer (See 10-403 Sundry 319-072). However, a MIT -T following the isolation intervention identified lack of competent cement and insufficient isolation from the LOP (Exhibit B). When faced with the decision of a second attempt to establish a competent seal over the LOP, the issue of hydrate formation was revisited. The subsurface team determined that additional water production from the Lisburne would assist in preventing hydrate formation in the wellbore as a result of the additional heat contribution. L3-24 produced approximately 1,900 bwpd, 0 bopd, and 1 MMSCF/d from the Wahoo formation in 2016. Hydraulic (Prosper) modeling indicated that the additional fluid in the wellbore from the LOP may reduce flow rates from the POP by as much as 50%, assuming full pre -sand plug production rates from the LOP. However, the flowing temperature modeled was above the hydrate formation threshold. Therefore, although total flow rate would be reduced, L3-24 would likely experience much higher on time and reduced intervention costs associated with hydrate remediation, and therefore would benefit from commingled production with the LOP. 2. Cross flow Based on the reservoir fluids in the POP and LOP, fluid incompatibility and formation damage due to commingling and crossflow is not expected. If changes to produced fluid compositions or ratios result in potential fluid incompatibility, chemical inhibition to prevent productivity degradation would be evaluated. 3800 Centerpoint Drive, Suite 1400, Anchorage, AK 99503 Phone: 907/777-8300 hilcorp.com Hilcorp Hilcorp North Slope, LLC Crossflow associated with short term shut in periods under typical operations are not anticipated to result in significant volume flowing between pools or to adversely impact reservoir management. Reservoir pressure is not expected to be substantially different between the two pools with the local LOP pressure most recently measured at 3263 psig 8900' TVDSS datum) and the local POP most recently measured at 3293 psig 8800' TVDSS datum). Minimal crossflow is anticipated as a result of this small dP. For any extended shut in periods, an IBP may be set above the LOP or cement may be pumped to prevent long-term crossflow between pools. Annropriate Surveillance and Production Allocation Will Be Assured Appropriate surveillance and production allocation measures will be undertaken to meet reservoir management objectives and to provide an acceptable allocation methodology. 1. Production Allocation Little to no oil production (less than 5 bopd) is anticipated from the LOP based on previous well tests. To confirm initial LOP contribution, L3-24 will be put on production and tested prior to adding POP perforations. If enough oil is present to obtain an oil sample, a sample will be obtained for geochemical analysis. If there is no oil present, it will be assumed that no oil will be produced in the future from the LOP. Incremental oil, water, and gas production from the add- perfs will be used to allocate production rates until a significant change in flow characteristics is observed. If a significant change in production occurs, either in fluid rate, water cut, or GOR, a cased hole production log or differential production test will occur. Conclusion Hilcorp requests approval for wellbore commingling of production from the Lisburne Oil Pool (LOP) and the Prudhoe Oil Pool (POP) in well L3-24. Hilcorp North Slope LLC respectfully submits that this activity will not cause waste, will promote conservation through greater ultimate recovery of oil and gas resources by allowing increased recovery from the POP. Produced liquids and gas from the separate pools can be properly allocated based on the production allocation procedure in the proposed methodology. 3800 Centerpoint Drive, Suite 1400, Anchorage, AK 99503 Phone: 907/777-8300 hilcorp.com Hilcorp Hilcorp North Slope, LLC Exhibit A: L3-24 Proposed Wellbore Schematic �i06LV• �_p n RN• W At♦►• a IIMi11447 YwW p{e ND• aal PROPOSED L3-24 b t 2 2jY� 2-7A' C MLO D NIPPLE 3800 Centerpoint Drive, Suite 1400, Anchorage, AK 99503 Phone: 907/777-8300 hilcorp.com IIiDQ My UNR RV F - 0MM{ (f1r! IIV F - { 1 mail It O{1Y{O�IItl: RIf PIrMwnAMrwafffi wY{11 Inmo r R lnM -_ mm WM2 .Ia iainv ui�ii:irid can M!I_VOHI�Mf'iV4 _ 6V WInMCI[lF. 1 IlVIY1: tiv QlINL1[N I ii{Iwr� I{IMM 3800 Centerpoint Drive, Suite 1400, Anchorage, AK 99503 Phone: 907/777-8300 hilcorp.com ff Hilcorp Hilcorp North Slope, LLC Exhibit B: MIT -T Details The sand plug and cement cap isolation was completed 04/28/2019, but a subsequent MIT -T to 1500 psi on 5/2/2019 failed clearly. The test lost approximately 750 psi in the first 15 minutes. However, no response was seen in the IA- On 08/23/20, -2900 psi was applied to the tubing. Again the IA pressure did not respond. The fluid level of the IA was monitored for 1 hour, and there was no change, indicating lack of competent cement over the sand plug and communication with the Lisburne perforations rather than TWA communication. 3800 Centerpoint Drive, Suite 1400, Anchorage, AK 99503 Phone: 907/777-8300 hilcorp.com