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CO 553 A
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. INDEX CONSERVATION ORDER NO. 553A Happy Valley Field Happy Valley Beluga/Tyonek Gas Pool Deep Creek Unit January 12, 2016 January 15, 2016 January 20, 2016 January 28, 2016 February 8, 2016 February 9, 2016 February 10, 2016 March 1, 2016 March 9, 2016 ------------------ Hilcorp's application to modify for pool rules for the Happy Valley Field (Confidential Exhibit A held in secure storage) Hilcorp's Supplemental proposal to amend Conservation Order 553 Notice of Public Hearing, Affidavit of Publication, email distribution, mailings Notice of Public Hearing, Affidavit of Publication, email distribution, mailings Public Member request for a hearing Public Member request for a hearing and change of address AOGCC response to 2/8/16 letter Transcript, Public Hearing transcript and exhibit Transcript, Public Hearing transcript Various Emails INDEX CONSERVATION ORDER NO. 553A STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC to modify the affected area and vertical extent of the Happy Valley Beluga/Tyonek Gas Pool, Deep Creek Unit, Kenai Peninsula, Alaska IT APPEARING THAT: Docket Number: CO-16-002 Conservation Order No. 5 5 3 A Deep Creek Field Deep Creek Unit Happy Valley Beluga/Tyonek Gas Pool April 11, 2016 1. By applications received January 15, 2016 and January 19, 2016, Hilcorp Alaska, LLC (Hilcorp) in its capacity as Unit Operator of the Deep Creek Unit (DCU) requested the Alaska Oil and Gas Conservation Commission (AOGCC) to modify the affected area and vertical extent of the Happy Valley Beluga/Tyonek Gas Pool as currently defined in Conservation Order 553. 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for February 24, 2016. On January 20, 2016, 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 January 20, 2016, the notice was published in the ALASKA DISPATCH NEWS. 3. On January 27, 2016, the AOGCC rescheduled the public hearing for March 1, 2016, 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 January 28, 2016, the notice for the rescheduled hearing was published in the ALASKA DISPATCH NEWS. 4. On February 9, 2016, the AOGCC received a request from a member of the public regarding the public hearing scheduled for March 1, 2016. 5. On March 1, 2016, the public hearing was convened at the AOGCC's office at 333 West 7th Avenue, Anchorage, Alaska. Due to the lack of a quorum, the hearing was immediately continued until March 9, 2016. 6. On March 9, 2016, the public hearing was held at the AOGCC's office at 9:00 AM. Testimony was presented by Hilcorp and by a private party. 7. The hearing record closed on March 9, 2016. Conservation Order 553A • • April 11, 2016 Page 2 of 5 - I DEEP CREEK NNA 1 KEY i - DEEP CK 1 384380 Well Path CIRI 61588 Unit Boundary Affected Area Boundary ! State of AK Lease 6-17 A-7 HVU 31-21..- Non-State Acreage 384380 - . .. A-10 A.3 I w CIRI C06 589 &' A_11 A-8 A'2 A4 384380,- ' B-13 A9 B-15 i=. CIRI C061590 CIRI C061590 A- I 0 1 mile 384380 Index Map for the Happy Valley Beluga / Tyonek Gas Pool (This map is presented for information purposes only. Refer to the legal description of the Affected Area, below.) FINDINGS: 1. Operator: Hilcorp is the owner and operator of the Deep Creek Field and the Deep Creek Unit, which are located in the Kenai Peninsula Borough, Alaska. Hilcorp uses the name Happy Valley in reference to this development project. The Alaska Department of Natural Resources (DNR) and Cook Inlet Region, Inc. are the affected landowners, and they co -manage the unit. 2. Development Area: The Happy Valley gas development project lies in the northern portion of Deep Creek Unit, and it is located approximately six miles east of the town of Ninilchik on the Kenai Peninsula. 3. Delineation and Development History: In June 2003, Union Oil Company of California (Unocal), previous operator of the Deep Creek Unit, drilled the Happy Valley No. 1 (later renamed Happy Valley A-01) discovery well in Section 22, T2S, R13W, Seward Meridian to a total measured depth of 10,871 feet. The well tested gas from two different Lower Tyonek reservoirs. This discovery was confirmed in July 2003 by the Happy Valley No. 2 well (later renamed Happy Valley A-02), which flowed gas from two Lower Tyonek reservoirs that were not encountered in Happy Valley No. 1. Unocal subse- quently drilled nine additional wells and acquired 2D seismic data over the area to define Conservation Order 553A • • April 11, 2016 Page 3 of 5 the geological structure and determine reservoir distribution. The Beluga and Tyonek Formations were determined to be commercially productive in a number of wells. Unocal constructed a 15-mile pipeline, installed gas production facilities at Happy Valley "A" Pad, and began regular gas production in November 2004. Between 2007 and 2009, Unocal added a new drill site, named Happy Valley "B" Pad, drilled two gas producers, and brought them on regular production. On January 1, 2012, Hilcorp became owner and operator of the Deep Creek Unit. Between 2012 and 2015, Hilcorp drilled four additional wells from B-Pad and acquired 3D seismic data to better define the geologic structure and reservoir distribution. 4. Pool Identification: Conservation Order No. 553 (CO 553) currently defines the Happy Valley Beluga/Tyonek Gas Pool as gas -bearing intervals common to, and correlating with, the interval between the measured depths ("MD") of 2,997 feet and 10,046 feet in the Superior Happy Valley No. 31-22 exploration well. Hilcorp proposes to expand the vertical limit of the pool upward to a measured depth of 2,246 feet measured depth in Superior Happy Valley No. 31-22 to align the vertical limits of the pool with the depths used to establish the Happy Valley Participating Area (Happy Valley PA) with the DNR. Hilcorp also proposes to modify the Affected Area of CO 553 to bring the Affected Area of the Happy Valley Beluga/Tyonek Gas Pool into alignment with the Happy Valley PA. CONCLUSIONS: 1. Expansion of the Happy Valley Beluga/Tyonek Gas Pool, both vertically and areally, within the Deep Creek Unit is appropriate. 2. Happy Valley Beluga/Tyonek Gas Pool reservoirs comprise fluvial channels and braided stream deposits that have poor lateral continuity and low permeability. The Administrative Action rule, Rule 5, in CO 553 does not conform to the administrative action language that the AOGCC is currently putting in the orders that it issues and should be updated to reflect the current language. NOW, THEREFORE, IT IS ORDERED: The findings, conclusions, and administrative records of Conservation Order 553 are incorporated by reference into this order, which supersedes Conservation Order 553. Development of the Deep Creek Unit is subject to the statewide requirements of 20 AAC 25 to the extent not superseded by the following rules: Affected Area: Seward Meridian (Source: CO 553, Modified This Order) Township, Range Lease Description Section 15: SW 1/4 W %2 SE'/4 T2S-R13W C-061588 , Section 16: SE 1/4 C-061589 Section 21: E %2 , SW 1/4 , E 1/2 NW 1/4 Conservation Order 553A April 11, 2016 Page 4 of 5 �— ADL 384380 Section 22: E %2 NW '/4, W %2 NE '/4 Section 22: W '/2 NW '/a , SW '/4 , NW '/4 SE '/4 C-061590 Section 27: NW '/4 Section 28: N %2 , N %2 SW '/4, N '/2 SE '/4 Rule 1 Pool Definition (Source: CO 553, Modified This Order) The Happy Valley Beluga/Tyonek Gas Pool is defined as gas -bearing intervals common to, and correlating with, the interval between the measured depths of 2,246 and 10,046 feet in the Superior Happy Valley No. 31-22 well. Rule 2 Well Spacing (Source: CO 553) Spacing units shall be a minimum of 10 acres. The Happy Valley Beluga/Tyonek Gas Pool shall not be opened in any well closer than 1,500' to the external boundary of the Deep Creek Unit. Rule 3 Wellbore Construction Practices (Source: CO 553, Modified by Other Order 66) Wellbores shall not be perforated for production through intervals exceeding 4,000 vertical feet. Rule 4 Annual Reservoir Review (Source: CO 553) An annual report must be filed on or before April 1 of each year. The report shall include an overview of reservoir performance, future development and reservoir depletion plans, and surveillance information for the prior calendar year, including: a. Reservoir pressure map at datum, summary and analysis of reservoir pressure surveys within the pool. To the extent possible, estimates of reservoir pressure shall be reported by major formation (Beluga and Tyonek); b. Results and, where appropriate, analysis of production, temperature, tracer surveys, observation well surveys, and any other special monitoring surveys; c. Estimates of yearly production subdivided by major contributing zones; and d. Progress of plans and tests to expand the productive limits of the pool. Rule 5 Administrative Action (Source: CO 553, Modified This Order) 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 geosciences principles, and will not result in an increased risk of fluid movement into freshwater. This order shall expire five years after the effective date shown below or upon a change in operator. Conservation Order 553A . . April 11, 2016 Page 5 of 5 DONE at Anchorage, Alaska and dated April 11, 2016. ju 0 "',&�& thy . F erster Chair, Commissioner Daniel T. Seamou t, Jr. Commissioner 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. STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 71h Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp ) Docket Number: CO-16-002 Alaska, LLC to modify the affected ) Conservation Order No. 553A area and vertical extent of the Happy ) Valley Beluga/Tyonek Gas Pool, ) Deep Creek Field Deep Creek Unit, Kenai Peninsula, ) Deep Creek Unit Alaska ) Happy Valley Beluga/Tyonek Gas Pool April 11, 2016 IT APPEARING THAT: 1. By applications received January 15, 2016 and January 19, 2016, Hilcorp Alaska, LLC (Hilcorp) in its capacity as Unit Operator of the Deep Creek Unit (DCU) requested the Alaska Oil and Gas Conservation Commission (AOGCC) to modify the affected area and vertical extent of the Happy Valley Beluga/Tyonek Gas Pool as currently defined in Conservation Order 553. 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for February 24, 2016. On January 20, 2016, 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 January 20, 2016, the notice was published in the ALASKA DISPATCH NEWS. 3. On January 27, 2016, the AOGCC rescheduled the public hearing for March 1, 2016, 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 January 28, 2016, the notice for the rescheduled hearing was published in the ALASKA DISPATCH NEWS. 4. On February 9, 2016, the AOGCC received a request from a member of the public regarding the public hearing scheduled for March 1, 2016. 5. On March 1, 2016, the public hearing was convened at the AOGCC's office at 333 West 7`h Avenue, Anchorage, Alaska. Due to the lack of a quorum, the hearing was immediately continued until March 9, 2016. 6. On March 9, 2016, the public hearing was held at the AOGCC's office at 9:00 AM. Testimony was presented by Hilcorp and by a private party. 7. The hearing record closed on March 9, 2016. Conservation Order 553A • April 11, 2016 Page 2 of 5 KEY DEEP CREEK NNA 1 DEEP CK 1 ' Well Path 384380 CIRI 61588 } Unit Boundary Affected Area BoundaryJ State of AK Lease B-17 A-, _-__ HVU 3142 Non -State Acreage A-10 384380A-3 CIRI C06 589 &'� A-8 A-2 -A-4 384380_, B-13 A9 e-15 CIRI C061590 _-A-1.. CIRI C061590 A-s 0 1 mile 384380 Index Map for the Happy Valley Beluga / Tyonek Gas Pool (This map is presented for information purposes only. Refer to the legal description of the Affected Area, below.) FINDINGS: 1. Operator: Hilcorp is the owner and operator of the Deep Creek Field and the Deep Creek Unit, which are located in the Kenai Peninsula Borough, Alaska. Hilcorp uses the name Happy Valley in reference to this development project. The Alaska Department of Natural Resources (DNR) and Cook Inlet Region, Inc. are the affected landowners, and they co -manage the unit. 2. Development Area: The Happy Valley gas development project lies in the northern portion of Deep Creek Unit, and it is located approximately six miles east of the town of Ninilchik on the Kenai Peninsula. 3. Delineation and Development History: In June 2003, Union Oil Company of California (Unocal), previous operator of the Deep Creek Unit, drilled the Happy Valley No. 1 (later renamed Happy Valley A-01) discovery well in Section 22, T2S, R13W, Seward Meridian to a total measured depth of 10,871 feet. The well tested gas from two different Lower Tyonek reservoirs. This discovery was confirmed in July 2003 by the Happy Valley No. 2 well (later renamed Happy Valley A-02), which flowed gas from two Lower Tyonek reservoirs that were not encountered in Happy Valley No. 1. Unocal subse- quently drilled nine additional wells and acquired 2D seismic data over the area to define Conservation Order 553A • April 11, 2016 Page 3 of 5 the geological structure and determine reservoir distribution. The Beluga and Tyonek Formations were determined to be commercially productive in a number of wells. Unocal constructed a 15-mile pipeline, installed gas production facilities at Happy Valley "A" Pad, and began regular gas production in November 2004. Between 2007 and 2009, Unocal added a new drill site, named Happy Valley `B" Pad, drilled two gas producers, and brought them on regular production. On January 1, 2012, Hilcorp became owner and operator of the Deep Creek Unit. Between 2012 and 2015, Hilcorp drilled four additional wells from B-Pad and acquired 3D seismic data to better define the geologic structure and reservoir distribution. 4. Pool Identification: Conservation Order No. 553 (CO 553) currently defines the Happy Valley Beluga/Tyonek Gas Pool as gas -bearing intervals common to, and correlating with, the interval between the measured depths ("MD") of 2,997 feet and 10,046 feet in the Superior Happy Valley No. 31-22 exploration well. Hilcorp proposes to expand the vertical limit of the pool upward to a measured depth of 2,246 feet measured depth in Superior Happy Valley No. 31-22 to align the vertical limits of the pool with the depths used to establish the Happy Valley Participating Area (Happy Valley PA) with the DNR. Hilcorp also proposes to modify the Affected Area of CO 553 to bring the Affected Area of the Happy Valley Beluga/Tyonek Gas Pool into alignment with the Happy Valley PA. CONCLUSIONS: 1. Expansion of the Happy Valley Beluga/Tyonek Gas Pool, both vertically and areally, within the Deep Creek Unit is appropriate. 2. Happy Valley Beluga/Tyonek Gas Pool reservoirs comprise fluvial channels and braided stream deposits that have poor lateral continuity and low permeability. The Administrative Action rule, Rule 5, in CO 553 does not conform to the administrative action language that the AOGCC is currently putting in the orders that it issues and should be updated to reflect the current language. NOW, THEREFORE, IT IS ORDERED: The findings, conclusions, and administrative records of Conservation Order 553 are incorporated by reference into this order, which supersedes Conservation Order 553. Development of the Deep Creek Unit is subject to the statewide requirements of 20 AAC 25 to the extent not superseded by the following rules: Affected Area: Seward Meridian (Source: CO 553, Modified This Order Township, Range Lease Description T2S-R13W C-061588 Section 15: SW 1/ , W %2 SE 1/ Section 16: SE 1/ C-061589 Section 21: E 1/2 , SW 1/ , E 1/2 NW 1/ Conservation Order 553A April 11, 2016 Page 4 of 5 ADL 384380 Section 22: E %2 NW '/ , W 'h NE '/ Section 22: W '/2 NW '/ , SW '/ , NW '/ SE '/ C-061590 Section 27: NW Section 28: N'h , N %2 SW'/, N'h SE'/ Rule 1 Pool Definition (Source: CO 553, Modified This Order) The Happy Valley Beluga/Tyonek Gas Pool is defined as gas -bearing intervals common to, and correlating with, the interval between the measured depths of 2,246 and 10,046 feet in the Superior Happy Valley No. 31-22 well. Rule 2 Well Spacing (Source: CO 553) Spacing units shall be a minimum of 10 acres. The Happy Valley Beluga/Tyonek Gas Pool shall not be opened in any well closer than 1,500' to the external boundary of the Deep Creek Unit. Rule 3 Wellbore Construction Practices (Source: CO 553, Modified by Other Order 66) Wellbores shall not be perforated for production through intervals exceeding 4,000 vertical feet. Rule 4 Annual Reservoir Review (Source: CO 553) An annual report must be filed on or before April 1 of each year. The report shall include an overview of reservoir performance, future development and reservoir depletion plans, and surveillance information for the prior calendar year, including: a. Reservoir pressure map at datum, summary and analysis of reservoir pressure surveys within the pool. To the extent possible, estimates of reservoir pressure shall be reported by major formation (Beluga and Tyonek); b. Results and, where appropriate, analysis of production, temperature, tracer surveys, observation well surveys, and any other special monitoring surveys; c. Estimates of yearly production subdivided by major contributing zones; and d. Progress of plans and tests to expand the productive limits of the pool. Rule 5 Administrative Action (Source: CO 553, Modified This Order) 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 geosciences principles, and will not result in an increased risk of fluid movement into freshwater. This order shall expire five years after the effective date shown below or upon a change in operator. Conservation Order 553A • April 11, 2016 Page 5 of 5 DONE at Anchorage, Alaska and dated April 11, 2016. //signature on file// Cathy P. Foerster Chair, Commissioner • //signature on file// Daniel T. Seamount, Jr. 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. Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Monday, April 11, 2016 2:58 PM To: Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Cook, Guy D (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); Frystacky, Michal (DOA); Grimaldi, Louis R (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Hill, Johnnie W (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); AKDCWellIntegrityCoordinator; Alan Bailey; Alex Demarban; Alexander Bridge; Allen Huckabay; Amanda Tuttle; Andrew VanderJack; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Bob Shavelson; Brian Havelock; Bruce Webb; Burdick, John D (DNR); Caleb Conrad; Cliff Posey; Colleen Miller; Crandall, Krissell; D Lawrence; Dave Harbour; David Boelens; David Duffy; David House; David McCaleb; David Steingreaber; David Tetta; ddonkel@cfl.rr.com; Dean Gallegos; Delbridge, Rena E (LAS); DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elowe, Kristin; Evans, John R (LDZX); Frank Molli; Gary Oskolkosf; George Pollock, Gordon Pospisil; Gregg Nady; gspfoff, Hyun, James J (DNR); Jacki Rose; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jerry McCutcheon; Jim Watt; Jim White; Joe Lastufka; Radio Kenai; Easton, John R (DNR); Jon Goltz; Juanita Lovett; Judy Stanek; Houle, Julie (DNR); Julie Little; Karen Thomas; Kari Moriarty; Kazeem Adegbola; Keith Wiles; Kelly Sperback; Gregersen, Laura S (DNR); Leslie Smith; Louisiana Cutler; Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Kremer, Marguerite C (DNR); Mary Cocklan-Vendl; Mealear Tauch; Michael Calkins; Michael Moora; MJ Loveland; mkm7200; Morones, Mark P (DNR); Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nick W. Glover, Nikki Martin; NSK Problem Well Supv; Oliver Sternicki; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer; Stephen Hennigan; Moothart, Steve R (DNR); Suzanne Gibson; sheffield@aoga.org; Tania Ramos; Ted Kramer, Davidson, Temple (DNR); Teresa Imm; Thor Cutler, Tim Mayers; Todd Durkee; trmjrl; Tyler Senden; Vicki Irwin; Vinnie Catalano; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Ann Danielson; Anne Hillman; Bajsarowicz, Caroline J; Brian Gross; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; Don Shaw; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Heusser, Heather A (DNR); Holly Pearen; Jason Bergerson; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Kasper Kowalewski; King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Terence Dalton; Tina Grovier (tmgrovier@stoel.com); Todd, Richard J (LAW); Tostevin, Breck C (LAW); Vicky Sterling; Wayne Wooster, William Van Dyke Subject: co553a - Hilcorp Deep Creek Field Attachments: co553a.pdf • s Jody J. Co(ombie .AOGCC Specia(Assistant .Alaska Oil and Gas Conservation Commission 333 West /-' .Avenue .Anchorage, .Alaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iody.colombie@alaska.gov. 0 0 James Gibbs Jack Hakkila Bernie Karl P.O. Box 1597 P.O. Box 190083 K&K Recycling Inc. Soldotna, AK 99669 Anchorage, AK 99519 P.O. Box 58055 Fairbanks, AK 99711 Gordon Severson Penny Vadla George Vaught, Jr. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 13557 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Denver, CO 80201-3557 David W. Duffy Richard Wagner Darwin Waldsmith Landman P.O. Box 60868 P.O. Box 39309 Hilcorp Alaska, LLC Fairbanks, AK 99706 Ninilchik, AK 99639 P.O. Box 244027 Anchorage, AK 99524-4027 Angela K. Singh 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. 553A.001 Mr. Michael W. Schoetz Senior Landman Hilcorp Alaska, LLC 3800 Centerpoint Dr. Suite 1400 Anchorage, AK 99503 Re: Docket Number: CO-22-009 Revision of Interwell Spacing Requirements and Elimination of Unneeded Rules Deep Creek Field Deep Creek Unit Happy Valley Beluga/Tyonek Gas Pool Dear Mr. Schoetz: On its own motion the Alaska Oil and Gas Conservation Commission (AOGCC) is administratively amending Conservation Order No. 553A (CO 553A), which prescribes pool rules for the Happy Valley Beluga/Tyonek Gas Pool (The Pool), to revise the interwell spacing portion of the Well Spacing rule (Rule 2), eliminate the Administrative Action rule (Rule 5), and eliminate the 5-year sunset provision contained in the order. Well Spacing Requirements: Currently, The Pool has defined spacing units of 10 acres and a minimum offset from external boundaries of 1,500 feet. The Pool is nearly 8,000 feet thick and is developed with directionally drilled wells. 10-acre spacing imposes constraints on development of the field that will make it more difficult to achieve ultimate recovery. For example it’s possible to have wells that cross each other with several thousand feet of separation between them, and thus they won’t be producing from the same sand lenses and won’t be impacting each other, but the 10-acre spacing would prevent these wells from being completed in the same 1/4-1/4-1/4 section because of the 10-acre spacing. Due to the thickness of The Pool and the discontinuous nature of the sand lenses within The Pool the operator needs maximum flexibility when it comes to drilling and completing wells in order to maximize ultimate recovery. Correlative rights will be protected by requiring wells to be completed more than 1,500 feet from the external boundary of the Deep Creek Unit. In 2018 the AOGCC adopted regulations allowing for the administrative amendment of an order the AOGCC has issued unless public notice and hearing were otherwise required by the regulations so long as the proposed change does not promote waste or jeopardize correlative rights and is based CO 553A.001 August 2, 2022 Page 2 of 2 on sound engineering and geosciences principles. This regulation makes Rule 5 of CO 553A superfluous. At a public meeting on May 2, 2018, the AOGCC commissioners voted to eliminate the sunset clauses that had been put in several orders issued in the proceeding couple of years. CO 553A was one of the orders that this applied to and as such the sunset provision in the order is no longer in force. Now, therefore, it is ordered that CO 553A is amended as follows: The sunset clause “This order shall expire five years after the effective date shown below or upon a change of operator.”is rescinded. Rule 2 Well Spacing (Revised CO 553A.001) There shall be no restrictions to well spacing within the affected area except that no pay may be opened in a well which is closer than 1,500 feet to an external property line where the owners and landowners are not the same on both sides of the line. Rule 5 Administrative Action (Rescinded) DONE at Anchorage, Alaska and dated August 2, 2022. Daniel T. Seamount, Jr. Jessie L. Chmielowski 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. Daniel Seamount Digitally signed by Daniel Seamount Date: 2022.08.02 09:37:44 -08'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2022.08.02 12:07:10 -08'00' From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Conservation Order 553A.001 (Deep Creek Unit) Date:Tuesday, August 2, 2022 12:44:31 PM Attachments:co553A.001.pdf Docket Number: CO-22-009 Revision of Interwell Spacing Requirements and Elimination of Unneeded Rules Deep Creek Field Deep Creek Unit Happy Valley Beluga/Tyonek Gas 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 8/2/22 10 Colombie, Jody J (DOA) From: David Buthman <dbuthman@hilcorp.com> Sent: Friday, April 08, 2016 10:06 AM To: Roby, David S (DOA) Cc: David Duffy; Jeremy Mardambek Subject: RE: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016-002) Hi Dave, I got this email request for clarification of the top and base definition for the above mentioned pool. The referenced DNR PA definition defines the top of the PA as 2176 MD (-1547 TVD SS) in the HV 31-22 well. At that point in time there were old electric logs for the HVU 31-22 and none of the wells drilled through HVA-03 had a good suite of logs that defined the top of the Beluga conclusively. HVB-12 was the first well that ran a full log suite across the Lower Sterling and Upper Beluga; then we followed up by drilling the HV B-15 well which discovered gas in the Upper Beluga, and thus by back -correlating, we ended up with a corrected top of Beluga at 2246 MD in the HV 31-22 well. At our informal discussions there at your offices on 2/26/2013, we shared drilling results and discussed changing the upper limit of the pool to include all productive and prospective gas formations through the Lower Sterling, but the technical personnel in the meeting thought that the Sterling reservoir properties were significantly different than the Beluga and Tyonek gas formations, and that the pool rules should pertain only through the top of the Beluga Formation. The base of the PA in the DNR document is defined as the stratigraphic equivalent of 10678 MD (-9368 TVD SS) in HVA-3 well, not in the 31-22 well, so the top and base of the PA were defined by two wells. We want the top and base to be defined as the stratigraphic equivalent to 2246 MD (top) and 10046 MD (base) in the HVU 31-22 well. Rgds, Dave HVA,(Q1 HVA,Q3 HVU 3&-22 HVB-17 HV8 j-10,B7i -Y,11 315 4.861.bW3 10.9iva" 2.062 900 19W From: David Duffy Sent: Thursday, April 07, 2016 4:26 PM To: David Buthman; Jeremy Mardambek Cc: Kevin Tabler; Chad Helgeson Subject: FW: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016- 002) Dave / Jeremy, Looks like we're getting close to a decision in the Deep Creek Pool Rules. Please see AOGCC's questions below. Feel free to correspond directly with Dave Roby. The quicker you get him the answers, the quicker we'll get the approval. Please CC me in your response. Thanks, Duffy From: Roby, David S (DOA) [mailto:dave.roby(a)alaska.gov] Sent: Thursday, April 07, 2016 4:23 PM To: David Duffy Cc: Colombie, Jody J (DOA); 'Ethan Schutt'; 'Jason Brune'; 'Colleen Miller'; Smith, Kyle S (DNR); Davies, Stephen F (DOA) Subject: RE: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016- 002) Mr. Duffy, In the attached letter you state that adjusting the vertical limits of the pool as requested (changing from 2,997 and 10,046 feet MD to 2,246 to 10,046 feet MD in the Superior Happy Valley #31-22 well) will align the pool boundaries with the PA boundaries. However, based on the PA decision document on the DNR's website (See page 4 of this document http://www.dog.dnr.alaska.gov/Units/Documents/2004/20041104 DeepCreek Unit HappyValley PA Decision.pdf) the vertical limits of the PA are 2,176 to 10,678 feet MD in that same well. Can you please confirm the depths you want to define the pool's upper and lower limits? Thank you, Dave Roby (907) 793-1232 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Dave Roby at (907)793-1232 or clave.robv@alaska.gov. From: David Duffy [mailto:dduffy(abhilcorp.com] Sent: Friday, January 15, 2016 4:41 PM To: Roby, David S (DOA) Cc: Colombie, Jody J (DOA); 'Ethan Schutt'; 'Jason Brune'; 'Colleen Miller'; Smith, Kyle S (DNR) Subject: RE: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016- 002) My apologies, here's the attached proposal. 0 From: David Duffy Sent: Friday, January 15, 2016 4:14 PM To: 'Roby, David S (DOA)' Cc: Colombie, Jody J (DOA); Ethan Schutt; 'Jason Brune'; Colleen Miller; Smith, Kyle S (DNR) Subject: RE: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016- 002) Dave, Thanks for the opportunity to request additional modifications to the Deep Creek Pool Rules. In addition to changing the areal extent of the pool, Hilcorp further requests to redefine the vertical top of the Beluga (from 2,997' MD to 2,246 MD). See Exhibit A and the attached graphic. Copies will be mailed (not certified) in tomorrow's mail. Please let us know if you have any questions. Regards, David Duffy, Landman Hilcorp Alaska, LLC Direct: 907-777-8414 Cell: 907-301-2629 dduffv@hilcorp.com This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. From: Roby, David S (DOA) [mailto:dave.roby(&alaska.gov] Sent: Wednesday, January 13, 2016 3:46 PM To: David Duffy Cc: Colombie, Jody J (DOA) Subject: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016-002) Mr. Duffy, It has been the AOGCC's practice to provide opportunity for public comment/hearing whenever the affected area of an order is proposed to be expanded, therefore we will not be able to handle your request through an administrative process. Since this will be handled through our more open and formal process, are there any other modifications to CO 553 that Hilcorp is interested in at this time? Regards, Dave Roby Sr. Reservoir Engineer Alaska Oil and Gas Conservation Commission (907)793-1232 CONFIDENTIALITY NOTICE. This e-mail mess including any attachments, contains informatioom the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Dave Roby at (907)793-1232 or dave.roby@alaska.gov. 0 Colombie, Jody J (DOA) From: Jeremy Mardambek <jmardambek@hilcorp.com> Sent: Thursday, April 07, 2016 4:47 PM To: Roby, David S (DOA) Cc: David Duffy Subject: HV Pool modification Dave, We would like to modify the Pool to match our request and recognizing the Pool does not match the PA depths. We will work with DNR in the future to bring them in alignment. Regards, Jeremy Mardambek Reservoir Engineer Hilcorp Alaska Office - (907) 777-8388 Cell — (561) 512-8690 Colombie, Jody J (DOA) From: Roby, David S (DOA) Sent: Thursday, April 07, 2016 4:23 PM To: David Duffy Cc: Colombie, Jody J (DOA); 'Ethan Schutt'; 'Jason Brune'; 'Colleen Miller'; Smith, Kyle S (DNR); Davies, Stephen F (DOA) Subject: RE: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016-002) Attachments: Jan 15_2016_CO 553 Mod Regest2.pdf Mr. Duffy, In the attached letter you state that adjusting the vertical limits of the pool as requested (changing from 2,997 and 10,046 feet MD to 2,246 to 10,046 feet MD in the Superior Happy Valley #31-22 well) will align the pool boundaries with the PA boundaries. However, based on the PA decision document on the DNR's website (See page 4 of this document http://www.dog.dnr.alaska.gov/Units/Documents/2004/20041104 DeepCreek Unit HappyValley PA Decision.pdf) the vertical limits of the PA are 2,176 to 10,678 feet MD in that same well. Can you please confirm the depths you want to define the pool's upper and lower limits? Thank you, Dave Roby (907) 793-1232 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Dave Roby at (907)793-1232 or dave.roby@alaska.gov. From: David Duffy [mailto:dduffy@hilcorp.com] Sent: Friday, January 15, 2016 4:41 PM To: Roby, David S (DOA) Cc: Colombie, Jody J (DOA); 'Ethan Schutt'; 'Jason Brune'; 'Colleen Miller'; Smith, Kyle S (DNR) Subject: RE: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016- 002) My apologies, here's the attached proposal. From: David Duffy Sent: Friday, January 15, 2016 4:14 PM To: 'Roby, David S (DOA)' Cc: Colombie, Jody J (DOA); Ethan Schutt; 'Jason Brune'; Colleen Miller; Smith, Kyle S (DNR) Subject: RE: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016- 002) Dave, Thanks for the opportunity to request additional modifications to the Deep Creek Pool Rules. In addition to changing the areal extent of the pool, Hilcorp further requests to redefine the vertical top of the Beluga (from 2,997' MD to 2,246 MD). See Exhibit A and the attached graphic. • Copies wi;l be mailed (not certified) in tomorrow's mail. Please let us know if you have any questions. Regards, David Duffy, Landman Hilcorp Alaska, LLC Direct: 907-777-8414 Cell: 907-301-2629 dduffv@hilcorp.com This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. From: Roby, David S (DOA) [mailto:dave.roby@alaska.gov] Sent: Wednesday, January 13, 2016 3:46 PM To: David Duffy Cc: Colombie, Jody J (DOA) Subject: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016-002) Mr. Duffy, It has been the AOGCC's practice to provide opportunity for public comment/hearing whenever the affected area of an order is proposed to be expanded, therefore we will not be able to handle your request through an administrative process. Since this will be handled through our more open and formal process, are there any other modifications to CO 553 that Hilcorp is interested in at this time? Regards, Dave Roby Sr. Reservoir Engineer Alaska Oil and Gas Conservation Commission (907)793-1232 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Dave Roby at (907)793-1232 or dave.roby@alaska.gov. 0 Hilcorp Alaska, LLC January 15, 2016 Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 7 1h Avenue, Suite 100 Anchorage, Alaska 99501 RE: Supplemental Proposal to Amend Conservation Order 553 Dear Commissioner Foerster, PoSt Office Bnx 244027 Anch7rage, AK 99524-4027 3800 Ccnterpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 9071777-8414 Fax: 9071777-8301 Email: dd.ffy@hilcorp.com On January 12, 2016, Ifilcorp Alaska, I. ("I-lilcorp"), as Operator of the Deep Creek Unit, requested the Alaska Oil and Gas Conservation Commission ("AOGCC") take administrative action to modify the affected area of the Happy Valley Beluga/Tyonek Gas Pool. AOGCC staff promptly informed Hilcorp, that public notice and an opportunity for hearing would be required. As such, Hilcorp further desires modify Rule I of Conservation Order 553 CO 553 as follows: Rule 1 Pool Definition The Happy Valley Beluga/Tyonek Gas Pool is defined as gas bearing intervals common to and correlating with the interval between the measured depths of 297 2,246 and 10,046 feet in the Superior Happy Valley No. 31-22 exploration well. This modification will maximize the productive interval associated with the top of the Beluga formation and vertically align the AOGCC-administered "pool" with the Happy Valley Participating area ("PA"). Data supporting this request was obtained through the drilling of the recent HBV-17 well, as correlated to the HV 31-22 well. See Exhibit A (happy Valley Pool, Annotated Base and Top Cross Section). Should any additional information be required, Hilcorp would be pleased to schedule a technical meeting with AOGCC staff. In the interim, technical questions should be directed to David Buthman, Geologist at 777-8375. Should you have any other questions, please do not hesitate to contact me at 777-8432. Sincerely, "X ? ...... David W. Duffy, Landman Hileorp Alaska, LLC Hilcorp Alaska, LLC 0 • CO 553: Pool Vertical Modification Page 2 of 3 Enclosures: Exhibit A (Happy Valley Pool, Annotated Base and Top Cross Section) CC: Ethan Schutt, Sr. V.P.,Land and Energy Development Cook Inlet Region, Inc. 725 E. Fireweed Lane, Suite 800 Anchorage, AK 99503 Corrie Feige, Director, Department of Natural Resources Division of Oil and Gas 550 West 7th Avenue, Suite 1100 Anchorage, Alaska 99501-356 Hilcorp Alaska, LC 0 0 CO 553: Pool Vertical Modification Page 3 of 3 Exhibit A: Happy Valley Pool, Annotated Base and Top Cross Section 50231200500000 50231100010000 HVB-17 HVU 31-22 DEEP CREEK POOL HAPPY VALLEY PA RULES Depths 2246'MW (-1617 4, 2246'MD'i-1617' SSTVD) -10,0W MD `4MD (-17 TVDSS) 5STVD) -10,046' 94 (-9417 TVDSS) In the r . ..... N j Superior Happy in the Superior Valley No. 31-22 Happy Valley No. . .......... D (-1,446' 21116, m SSTVD) - 10,484' MO (-9,303' SSTVD) In the Happy Valley B-17 well Colombie, Jody J (DOA) From: David Duffy <dduffy@hilcorp.com> Sent: Wednesday, January 13, 2016 4:38 PM To: Roby, David S (DOA) Cc: Colombie, Jody J (DOA) Subject: RE: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016-002) Thanks, Dave. There is a small change that could be made to the vertical definition of the pool (matching up top and base with PA). I'll send a follow-up letter with a graphic (annotated cross-section). Sent from my Windows Phone From: Roby, David S (DOA)<mailto:dave.roby@alaska.gov> Sent: 1/13/2016 3:45 PM To: David Duffy<mailto:dduffv@hilcorp.com> Cc: Colombie, Jody J(DOA)<mailto:iody.colombie@alaska.gov> Subject: Application to modify affected area of C0553 - Happy Valley Beluga/Tyonek Gas Pool (Docket No. C016-002) Mr. Duffy, It has been the AOGCC's practice to provide opportunity for public comment/hearing whenever the affected area of an order is proposed to be expanded, therefore we will not be able to handle your request through an administrative process. Since this will be handled through our more open and formal process, are there any other modifications to CO 553 that Hilcorp is interested in at this time? Regards, Dave Roby Sr. Reservoir Engineer Alaska Oil and Gas Conservation Commission (907) 793-1232 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Dave Roby at (907)793-1232 or dave.robv@alaska.gov<mailto:dave.robv@alaska.gov>. Colombie, Jody J (DOA) From: David Duffy <dduffy@hilcorp.com> Sent: Tuesday, January 12, 2016 4:57 PM To: Davies, Stephen F (DOA); Smith, Kyle S (DNR); Ethan Schutt Cc: 'Jason Brune'; Kevin Tabler; Colleen Miller; Colombie, Jody J (DOA) Subject: Propsoed Happy Valley Pool Rule Amendment Attachments: CO 553 Proposed Modification re Boundary.pdf Steve, Please see Hilcorp's attached request for AOGCC to take administrative action to modify the affected area of the Happy Valley Pool Rules (CO 553). This proposal has been slimmed down to only address the pool's legal description. At this time, we do not seek any substantive changes to the underlying pool rules. As a result, we believe this slight modification falls within AOGCC's administrative authority to amend the pool rules. Importantly, this expansion only applies to CIRI acreage that's already within the Pool and therefore ownership will not change on either side of the expanded pool boundary. The DNR is involved via its role as co -unit manager and participant in the Happy Valley PA. I understand that you've had conversations with DNR regarding this issue, and I'll encourage CIRI to check in with you as well. The original copy will be delivered to AOGCC's offices tomorrow AM. Certified copies will be sent to CIRI and DNR. Please give me a call if you have questions or concerns. We're excited about this well and were very pleased to learn that the areal extent of the pool appears larger than previously expected. Regards, David Duffy, Landman Hilcorp Alaska, LLC Direct: 907-777-8414 Cell: 907-301-2629 dduffy@hilcorp.com This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. 1 ALASKA OIL AND GAS CONSERVATION COMMISSION 2 3 Before Commissioners: Cathy Foerster, Chair 4 Daniel T. Seamount 5 6 In the Matter of Hilcorp Alaska, ) 7 LLC's Application for Expansion of ) 8 the Affected Area and Vertical ) 9 Limits of the Happy Valley Beluga/ ) 10 Tyonek Gas Pool, Deep Creek Unit. ) 11 ) 12 Docket No.: CO 16-002 13 14 ALASKA OIL and GAS CONSERVATION COMMISSION 15 Anchorage, Alaska 16 17 March 9, 2016 18 9:00 o'clock a.m. 19 20 VOLUME II 21 PUBLIC HEARING 22 23 BEFORE: Cathy Foerster, Chair 24 Daniel T. Seamount, Commissioner • 1 TABLE OF CONTENTS 2 Opening remarks by Chair Foerster 3 Remarks by Mr. Duffy 4 Remarks by Mr. Shaw 1 P R O C E E D I N G S 2 (On record - 9:00 a.m.) 3 CHAIR FOERSTER: I'll call this hearing to 4 order. Today is March 9, 2016, it's 9:00 a.m. We are 5 at the offices of the AOGCC, Alaska Oil and Gas 6 Conservation Commission at 333 West Seventh Avenue, 7 Anchorage, Alaska. To my left is Dan Seamount and I'm 8 Cathy Foerster. 9 This morning's hearing is regarding Docket 10 number CO 16-002, Happy Valley Beluga/Tyonek Gas Pool, 11 Deep Creek Unit, Expansion of Affected Area and 12 Vertical Limits. Hilcorp Alaska, LLC by application 13 received January 12th and January 15th of 2016 14 requesting the Alaska Oil and Gas Conservation 15 Commission to amend conservation order 553 to expand 16 the area extent and vertical limits of the Happy Valley 17 Beluga/Tyonek Gas Pool in the Deep Creek Unit. We did 18 not have a quorum on March 1 when we originally 19 scheduled this hearing and so we had to continue the 20 hearing until today. 21 Computer Matrix will be recording today's 22 proceedings and you can get a copy of the transcript 23 from Computer Matrix. 24 Hilcorp has some people signed up to testify as 25 yeses and maybes depending on where the hearing 10 • 0 1 proceedings go. The Commissioners will ask questions 2 during testimony, we might also take a recess to 3 consult with our staff to determine whether additional 4 information or clarifying questions are needed. I 5 don't see anybody other than Hilcorp here to testify so 6 I don't think -- I think you know the ground rules of 7 appropriate testimony so I won't read those. 8 Dan, do you have anything to add? 9 COMMISSIONER SEAMOUNT: I have nothing. 10 CHAIR FOERSTER: At this point I'll ask the 11 Hilcorp representative who intends to testify to come 12 up, introduce yourself, what your qualifications are, 13 if you expect to be treated as an expert. 14 MR. DUFFY: Good morning. My name is David 15 Duffy, I'm the landsman with Hilcorp Alaska. And I 16 assisted in the preparation and submission of the 17 January 12th and 15th applications. 18 CHAIR FOERSTER: Okay. Mr. Duffy, I think 19 there is adequate information in your request for us to 20 understand most of what we need to do to make a 21 decision. But we had one or two outstanding questions. 22 I'm going to let Commissioner Seamount go first. 23 (Off record comments) 24 COMMISSIONER SEAMOUNT: Do you have anything to 25 submit for the record, anything written? 11 1 MR. DUFFY: Last session we submitted the 2 geologic report..... 3 COMMISSIONER SEAMOUNT: Okay. 4 MR. DUFFY: .....in support and that was 5 prepared by Mr. Buthman. He's available and ready to 6 answer questions on the technical side. 7 COMMISSIONER SEAMOUNT: Okay. That's what I 8 had a question on, but Mr. Buthman may not have to 9 testify. Let's see, I -- was there confidential 10 information in here? 11 MR. DUFFY: There's not. And at the last 12 hearing we waived the confidentiality to our 13 application and the geologic report. 14 COMMISSIONER SEAMOUNT: Okay. The only 15 question I have is you show an area of production on 16 two different maps and I'm wondering is that the 17 largest extent of your area production for all 18 reservoirs? 19 MR. DUFFY: I defer to Mr. Buthman for..... 20 COMMISSIONER SEAMOUNT: Okay. Mr. Buthman. 21 MR. DUFFY: But the -- all of the production is 22 within that current Happy Valley participating area 23 which is contained by the pool. 24 COMMISSIONER SEAMOUNT: Okay. My -- let me -- 25 I'll just ask the question before we mess around with 12 1 Mr. Buthman, expert witnesses and stuff like that. But 2 you've got your area of production that goes outside of 3 your pool -- proposed pool area and I'm -- we're just 4 wondering why you don't include all of that area of 5 production..... 6 CHAIR FOERSTER: Well, more than area..... 7 COMMISSIONER SEAMOUNT: .....within the pool? 8 CHAIR FOERSTER: .....of production, I think 9 area of productivity, area that contains hydrocarbons. 10 (Off record comments) 11 MR. DUFFY: If I could approach to get on the 12 same page? 13 CHAIR FOERSTER: Okay. Come on up. Productive 14 limits extend beyond the PA in a few places, that's 15 what we're asking about. 16 MR. DUFFY: In the current -- yeah, of the 17 current participating area. 18 CHAIR FOERSTER: Right. And are you..... 19 MR. DUFFY: Is that..... 20 CHAIR FOERSTER: .....and you're..... 21 MR. DUFFY: .....is that the application to 22 establish a certain pool? 23 CHAIR FOERSTER: To go to the end of the 24 productive limit. 25 MR. DUFFY: That's right. And so the -- there 13 1 is a -- the expansion -- if I could approach again? 2 CHAIR FOERSTER: Approach again. 3 MR. DUFFY: For the proposed expansion area is 4 the blue line on the outside. The current pool 5 boundary is too small. 6 CHAIR FOERSTER: Okay. So this is the current 7 boundary or this is the proposed boundary because it 8 looks to me like this is the proposed boundary and 9 there's still potential production outside of it? 10 MR. DUFFY: This is the map that was attached 11 to the application. 12 CHAIR FOERSTER: Okay. It's a..... 13 (Off record comments) 14 CHAIR FOERSTER: So this is a different map. 15 The pool expansion will cover the gas indicated outside 16 the boundary to the north. Okay. Have to read the 17 fine print now. 18 COMMISSIONER SEAMOUNT: All right. Thank you. 19 CHAIR FOERSTER: I think you've answered our 20 question. That was easier than I thought it would be. 21 Do you have any other questions, Dan? 22 COMMISSIONER SEAMOUNT: I have none other. 23 CHAIR FOERSTER: Okay. That was all we had 24 concerns about for you guys. So unless there's 25 something else you'd like to say then I'll see if 14 1 there's anyone else in the audience who wants to 2 testify. 3 All right. Someone just walked in and we just 4 concluded Hilcorp's testimony so I will allow an 5 opportunity for the person who just walked in to say 6 whether he intends to testify or not? 7 MR. SHAW: Yes, I'd like to testify. 8 CHAIR FOERSTER: Okay. Well, let me re -read 9 our instructions for testimony. And as I do that you 10 can get yourself prepared to come on up. 11 All right. We have a few ground rules on what 12 is allowed relative to testimony. First, all testimony 13 must be relevant to the purposes of this hearing that 14 was outlined earlier. And this hearing regards the 15 Happy Valley Beluga/Tyonek gas pool in the Deep Creek 16 Unit and specifically an expansion of the affected area 17 and vertical limits of that pool. Anyone desiring to 18 testify may do so, but if their testimony drifts off of 19 this subject we will limit the testimony to three 20 minutes. Additionally testimony may not take the form 21 of questioning or cross examination of any other 22 witness. The two Commissioners ask all the questions, 23 however if you have a question that you think is 24 necessary to allow us to determine whether or not to 25 grant this application you may submit that question in 15 1 writing to either to either Sam Carlisle or Jody 2 Colombie, I'd recommend Sam, she's not germ ridden 3 today, and they'll bring it to us and we'll make a 4 determination on whether to ask that question or not. 5 Dan, do you have anything to add? 6 COMMISSIONER SEAMOUNT: I have nothing. 7 CHAIR FOERSTER: Okay. Well, come on up, 8 introduce yourself and, you know, your name and if you 9 represent an organization who that is and then if you 10 ask -- if you want to be recognized as an expert is and 11 what your qualifications are. 12 (Off record comments) 13 CHAIR FOERSTER: And do your best to speak into 14 the mic so that what you say is captured by the court 15 reporter and heard in the back of the room. 16 MR. SHAW: Okay. Well, my name's Don Shaw and 17 I'm just a private guy, I live in Clam Gulch. 18 So basically I understand that they want to 19 improve on the Deep Creek unit and I disagree with 20 that. As the Commission knows I've had an issue with 21 the Francis 1 well, I believe my minerals, my gas, is 22 being stolen and the money from that is being invested 23 in the Deep Creek unit. Since the Commission's ruling 24 in 701A I've repeatedly been asking and sadly I left a 25 lot of notes at home, but based on 701 my whole area is 16 1 supplying gas to that well and with everybody just flat 2 out denying me, that's taking my money and investing it 3 in the Deep Creek unit and I disagree with that. You 4 know, it's been October, I think 701A, conservation 5 701A was ruled on and I've been asking repeatedly and 6 all I'm getting is stonewalled and I'm just kind of 7 wondering what's going on. 8 So I disagree with Hilcorp being allowed to 9 continue to invest while they're stealing from me with 10 the blessing of the AOGCC. 11 CHAIR FOERSTER: Commissioner Seamount, do you 12 have any questions or comments? 13 COMMISSIONER SEAMOUNT: I have no question. 14 CHAIR FOERSTER: Neither do I. Do you have 15 anything else for us, Mr. Shaw? 16 MR. SHAW: I'd like to get a ruling on -- on 17 something, you know, I've been asking since October. 18 Jody's got my emails, my notes at home, sadly I forgot 19 them..... 20 CHAIR FOERSTER: Well, Mr. Shaw, what exactly 21 would you like a ruling on? 22 MR. SHAW: Well, I'm trying to find -- I'd like 23 a ruling to put this on hold and to shut Francis 1 down 24 until I start getting my royalties. I've got -- I've 25 got tape recorded conversation with Mr. Duffy that -- 17 1 the first one I ever had with him a couple of years ago 2 that basically if I don't sign their contract any 3 equity coming to me is just going to go to the State of 4 Alaska. It's like I'm being forced into signing 5 something that I disagree with. And it's -- if I had 6 my emails with Jody, I had it all wrote out there, I've 7 been asking the Commissioners several time and I just 8 -- I'm getting nothing. 9 CHAIR FOERSTER: So, Mr. Shaw, we -- the AOGCC 10 made a ruling on the Francis number 1 and if you 11 disagree with that ruling then you need to request a 12 hearing and present evidence to support your claim that 13 our ruling is invalid. So you have to provide the 14 evidence to support your concerns. So the ball is in 15 your court, Mr. Shaw, you're not waiting on anyone but 16 yourself. 17 MR. SHAW: The problem with me requesting a 18 hearing, now I have to supply all the experts? 19 CHAIR FOERSTER: That's exactly right. 20 MR. SHAW: Okay. So we're back to my testimony 21 before as an Exxon litigant plaintiffs' counsels 22 petitioned the courts for money to fund their war 23 chest, they were granted that money to fund their war 24 chest. Experts don't come to me freely, they need 25 money. I'm asking..... 18 1 CHAIR FOERSTER: So do you have -- Mr. Shaw, do 2 you have any evidence to support your assertion that 3 you're being drained? 4 MR. SHAW: Yeah, it would..... 5 CHAIR FOERSTER: Technical evidence. 6 MR. SHAW: Technical evidence is your ruling in 7 701, it -- it's got the -- geez, I just -- it would be 8 easier if Jody could get my email out because it's got 9 the sections, it's got the..... 10 CHAIR FOERSTER: Okay. Mr. Shaw, we're going 11 down a rabbit hole that has nothing to do with the 12 Happy Valley decision so I suggest that..... 13 MR. SHAW: Well, it's..... 14 CHAIR FOERSTER: .....you request a hearing so 15 that we can discuss a matter that is not going forth 16 today. 17 MR. SHAW: Now I have -- now the -- with the 18 AOGCC's ruling I have to supply all the experts..... 19 CHAIR FOERSTER: That's exactly right. 20 MR. SHAW: .....I don't have the money for 21 that. So you're basically -- I think what it is, 22 there's -- there's millions of dollars at stake and I 23 think, I truly, honestly think the way I'm being 24 stonewalled, I'm wondering if people are living within 25 their budget because if I'm shut up then the rest of 19 1 the people, we're going to -- they don't realize that 2 they don't have to sign these contracts. This is tens 3 of millions of dollars that would be put in private 4 people's hands. And as it is Hilcorp's got it all. So 5 basically with the Exhibit A from 701 with the sections 6 -- you've ruled that my section -- all of my section 7 supplies gas to that well and I've been hearing through 8 the grapevine that I'm not even in the unit, the whole 9 well's not even in the unit. 10 CHAIR FOERSTER: I think you're 11 misunderstanding the text of our ruling. So I think 12 you need to understand what we ruled on and what your 13 geology and geography are before you lather up and come 14 in. So you can't -- we're not going to do this 15 today..... 16 MR. SHAW: The..... 17 CHAIR FOERSTER: .....the only way we're going 18 to revisit this is if you request a hearing and you 19 bring in experts. But the very first thing you need to 20 do, Mr. Shaw, is understand exactly what we said and 21 did and it's clear to me that you don't. So we're 22 done..... 23 MR. SHAW: Nobody's explaining..... 24 CHAIR FOERSTER: .....and this hearing is 25 adjourned. 20 1 MR. SHAW: .....it to me, the sections say that 2 I am supplying gas. 3 CHAIR FOERSTER: Mr. Shaw, you don't understand 4 and you need to understand..... 5 MR. SHAW: And nobody's taking the time to 6 explain it to me and I would think people at your level 7 would have a higher degree of professionalism..... 8 CHAIR FOERSTER: Mr. Shaw..... 9 MR. SHAW: .....than what I'm being..... 10 CHAIR FOERSTER: .....I've explained it to you 11 repeatedly. 12 MR. SHAW: You have not. 13 CHAIR FOERSTER: It's your failure to 14 understand, it's not our failure to explain. 15 MR. SHAW: What is the answer to my question 16 that I have been asking the Commission? 17 CHAIR FOERSTER: What's your question? 18 MR. SHAW: Jody's got the email, I..... 19 CHAIR FOERSTER: Ask your question right now. 20 Ask your question. 21 MR. SHAW: The question is in section 8 it says 22 that I'm supplying gas, all of my unit is supplying 23 gas. 24 CHAIR FOERSTER: So you don't have a question. 25 You have a wrong premise..... 21 • • 1 MR. SHAW: Ask..... 2 CHAIR FOERSTER: .....and you're asking stupid 3 questions. 4 MR. SHAW: Well, Commissioner, I'm wondering if 5 you're living within your budget. Anything else? 6 COMMISSIONER SEAMOUNT: Nothing else. 7 MR. SHAW: Okay. 8 COMMISSIONER SEAMOUNT: You've been heard. 9 (Adjourned - 9:19 a.m.) 10 (END OF PROCEEDINGS) 22 0 0 1 C E R T I F I C A T E 2 UNITED STATES OF AMERICA ) 3 )ss 4 STATE OF ALASKA ) 5 6 I, Salena A. Hile, Notary Public in and for the 7 state of Alaska, residing in Anchorage in said state, 8 do hereby certify that the foregoing matter: Docket 9 No.: CO 16-002 was transcribed to the best of our 10 ability; Pages 08 through 23; 11 IN WITNESS WHEREOF I have hereunto set my hand 12 and affixed my seal this 15th day of March 2016. 13 14 15 Salena A. Hile 16 Notary Public, State of Alaska 17 My Commission Expires: 09/16/2018 18 23 NAME STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION Docket Number: CO-16-002 Happy Valley Beluga/Tyonek Gas Pool, Deep Creek Unit Expansion of Affected Area and Vertical Limits March 9, 2016 AFFILIATION rr,ca h H / /C'!r Testify (yes or no) No r� �.J El 1 ALASKA OIL AND GAS CONSERVATION COMMISSION 2 3 Before Commissioners: Cathy Foerster, Chair 4 Daniel T. Seamount 5 6 In the Matter of Hilcorp Alaska, ) 7 LLC's Application for Expansion of ) 8 the Affected Area and Vertical ) 9 Limits of the Happy Valley Beluga/ ) 10 Tyonek Gas Pool, Deep Creek Unit. ) 11 ) 12 Docket No.: CO 16-002 13 14 ALASKA OIL and GAS CONSERVATION COMMISSION 15 Anchorage, Alaska 16 17 March 1, 2016 18 9:00 o'clock a.m. 19 20 VOLUME I 21 PUBLIC HEARING 22 23 BEFORE: Cathy Foerster, Chair • TABLE OF CONTENTS 3 Opening remarks by Chair Foerster 03 1 P R O C E E D I N G S 2 (On record - 9:00 a.m.) 3 CHAIR FOERSTER: I'd like to call this hearing 4 to order. Today is March 1, 2016, it's 9:00 a.m. 5 We're located at 333 West Seventh Avenue in Anchorage, 6 Alaska, the offices of the Alaska Oil and Gas 7 Conservation Commission. And this is where I introduce 8 the bench. Hi, I'm Cathy Foerster and there's nobody 9 else here. 10 We're here in regard to Docket number CO 16- 11 002, Happy Valley Beluga/Tyonek Gas Pool, Deep Creek 12 Unit, Expansion of Affected Area and Vertical Limits. 13 Hilcorp Alaska, LLC by application received January 14 12th and January 15th of 2016 is requesting that the 15 AOGCC amend the conservation order 553 to expand the 16 area extent and vertical limits of the Happy Valley 17 Beluga/Tyonek Gas Pool in the Deep Creek Unit. 18 Computer Matrix will be recording the 19 proceedings and you can get a copy of the transcript 20 from Computer Matrix Reporting. 21 Since we do not have a quorum since Dan is out 22 on a personal family emergency and we have no public 23 Commissioner we cannot conduct this hearing today. I 24 apologize on behalf of the State that this has been a 25 waste of time and an extension before you guys can get 3 1 what you're asking for, should we give it to you, but 2 right now we need to pick a date that works. We've 3 heard from Mr. Shaw who is a member of the public who's 4 requested this hearing and we know what dates work for 5 him, we've looked at our calendar and we've picked a 6 date that looks really good for us and I'd like -- if 7 that works for you guys I'd like to just land on that 8 and make it simple, March 24. 9 MR. TABLER: This is Kevin Tayler, the land 10 manager for Hilcorp. And March 24th, we -- I mean, our 11 interest is obviously getting it online as soon as we 12 can because we've got a well that we can't produce, but 13 we'll yield to whatever date works for the Commission. 14 CHAIR FOERSTER: Well, Mr. Shaw says that he 15 can have it before March loth, but I'm just not sure 16 Dan will be back by then, or after March 20th. So 17 we've got a hearing on the 22nd so we -- we could do it 18 -- we could schedule it for the 9th and hope that Dan 19 is back or we could schedule it for the 23rd is prob -- 20 I hate to do a hearing on Monday..... 21 UNIDENTIFIED VOICE: We can also do the 22 afternoon of the 22nd at 2:00 p.m. 23 CHAIR FOERSTER: Okay. That's true, we can do 24 it the 22nd. We -- I'm fine with scheduling it on the 25 9th and then..... 4 1 MR. TABLER: Okay. 2 CHAIR FOERSTER: .....continuing it again if we 3 have to if that works for you guys. 4 MR. TABLER: That'll work for us, yes. 5 CHAIR FOERSTER: Does that work for everyone in 6 the room? 7 (No comments) 8 CHAIR FOERSTER: Okay. Well, we'll just keep 9 our fingers crossed that Dan's mom has a good rebound 10 and we'll schedule it for 9:00 a.m. on March the 9th. 11 And you'll do whatever we need to do to renotice it or 12 whatever. And we can do it that quickly can't we? 13 UNIDENTIFIED VOICE: Yes. 14 CHAIR FOERSTER: Okay. 9:00 a.m. All right. 15 Is there anything else for the good of the order, do 16 you have any other issues that you'd like to bring up 17 right now that will help us with proceeding on the 9th? 18 MR. TABLER: Kevin Tabler with Hilcorp. I do 19 have a geologic report that I'm happy to submit that -- 20 if that will help you review. 21 CHAIR FOERSTER: Is it confidential? 22 MR. TABLER: It is not confidential. 23 CHAIR FOERSTER: Okay. So that would be 24 great and so we have your permission to give a copy of 25 it to Mr. Shaw? 5 0 0 1 MR. TABLER: Yeah, you certainly do. 2 CHAIR FOERSTER: Okay. That's great. All 3 right. If there's nothing -- well, we'll take that in 4 -- we'll accept that into the record and we'll adjourn 5 at 9:05. 6 Thank you. 7 (Adjourned - 9:19 a.m.) 8 (END OF PROCEEDINGS) on 1 C E R T I F I C A T E 2 UNITED STATES OF AMERICA ) 3 ) ss 4 STATE OF ALASKA ) 5 6 I, Salena A. Hile, Notary Public in and for the 7 state of Alaska, residing in Anchorage in said state, 8 do hereby certify that the foregoing matter: Docket 9 No.: CO 16-002 was transcribed to the best of our 10 ability; Pages 02 through 07; 11 IN WITNESS WHEREOF I have hereunto set my hand 12 and affixed my seal this 15th day of March 2016. 13 14 15 16 17 18 Salena A. Hile Notary Public, State of Alaska My Commission Expires: 09/16/2018 • 0 Page 1 of 10 GEOLOGIC REPORT TO ACCOMPANY APPLICATION FOR MODIFICATION OF POOL RULES FOR OPERATING IN THE DEEP CREEK UNIT, KENAI PENINSULA BOROUGH STATE OF ALASKA David Buthman - Geologist, Hilcorp Alaska LLC Submitted to State of Alaska Oil and Gas Conservation Commission ("AOGCC") March 1, 2016 CONTENTS 1. INTRODUCTION 2. RECOMMENDATION 3. EXPLORATION HISTORY 4. GEOLOGY 5. LIST OF FIGURES 0 Page 2 of 10 INTRODUCTION This geologic report is submitted by Hilcorp Alaska LLC in support of its application to amend Conservation Order 553 to expand the areal extent and vertical limits of the Happy Valley Beluga / Tyonek Gas Pool in the Deep Creek Unit. The Happy Valley Beluga / Tyonek Gas Pool Unit became effective on March 8, 2005 and encompasses the following geographic area: Seward Meridian Township Ranee, Lease Sections SM T2S-R13W C-061588 Section 15: SE1/4SW1/4 C-061589 Section 21 E1/2NE1/4, SW1/4NE1/4, E1/2SW1/4, SE1/4 ADL That portion of US Survey 9496, lots 3 & 4 within Section 22, W1/2 and the 384380 Wl/2NE1/4, C-061590 Section 22: W1/2 and NNVI/4NE1/4 excluding lots 3 and 4 of US Survey 9469 Section 27: N W 1 /4NW 1 /4 Section 28: NE1/4, NE1/4NW1/4, S1/2NW1/4, N1/2SW1/4, NW1/4SE1/4 And encompasses the following vertical limits: Rule 1 Pool Definition: The Happy Valley Beluga/Tyonek Gas Pool is defined as gas bearing intervals common to and correlating with the interval between the measured depths of 2,997 and 10,046 feet in the Superior Happy Valley No. 31 22 exploration well. Hilcorp Alaska LLC holds 100% working interest in the Deep Creek Unit, and has 100% of the oil and gas minerals leased from lessors State of Alaska and Ciri. 2. RECOMMENDATION In order to comply with item #1 below in the following Alaska Administrative Code 20 AAC 25.520: 20 AAC 25.520. Field and pool regulation and classification (a) Upon the motion of the commission, or the request of an affected owner or operator at any time after the discovery of oil or gas in a field or pool, the commission will hold a hearing in accordance with 20 AAC 25.540, and the commission will issue an order, based upon the evidence presented, classifying the pool as an oil or gas pool in a field and prescribing rules to govern the proposed development and operation of the pool. in the pool order, the commission will establish requirements (1) that the commission considers necessary to prevent waste, 9 0 Page 3 of 10 protect freshwater, protect correlative rights, and ensure a greater ultimate recovery of oil and gas; and (2) based on the operating and technical data presented. (b) The commission will, in its discretion, amend pool orders in accordance with the procedures set forth in 20 AAC 25.540. ... specifically: to ensure a greater ultimate recovery of oil and gas, the pool rules need to be modified in order to develop the Tyonek reservoirs that were encountered in the Happy Valley B-17 well that lie north of the section line that defines the geographic location of the pool. If this rule were not modified to include this "spillage" over the pool line, then these highly prospective reservoirs could never be developed. We propose that the vertical definition and geographic area of the Pool be expanded to as follows: 1. Rule 1: The Happy Valley Beluga/Tyonek Gas Pool is defined as gas bearing intervals common to and correlating with the interval between the measured depths of 2246' MD (the Top of Beluga) and 10,046' MD (base of the T-155 zone) in the Superior Happy Valley #31-22 well. 2. Change the Happy Valley Beluga/Tyonek Gas Pool affected area to the following: Seward Meridian Township Range, SM Lease Sections T2S-R13W C-061588 Section 15: SE1/4SW1/4 Section 16: S/2 SE/4, NEA SEA C-061589 Section 21 E1/2, E/2 SWA Section 22: W/2 NW/4, SW/4 C-061590 Section 27: N/2 NW/4, SW/4 NW/4 Section 28: S/2 NW/4, NE/4 NW/4, N/2 SWA, NEA, NW/4 SE/4 ADL 384380 Section 22: E/2 NW/4, W/2 NE/4 • • Page 4 of 10 EXHIBIT R &.fit Via, �r�s1a� M,A,0$ 9--• �j oo L(�$ Ar� • �*ir�a`�3Mt6t�IDM :k3ii +Esc: CO 553. Exhibit B Land ownership & Spider Map .tx — U a.= _.c to- 1 21111 l\ Figurel. Proposed pool boundary. • • Page 5 of 10 3. EXPLORATORY HISTORY The earliest drilling within what is now the Deep Creek Unit was the Standard oil 1-Deep Creek Unit, drilled in 1958, which consisted of a vertical well and a sidetrack that reached total depth of 14,221' in the Mesozoic aged strata.. The Deep Creek Unit 1 wells recorded oil and gas shows but were completed as dry holes. Following that, in 1963 Superior Oil drilled the Happy Valley Unit 31-22 well, which reached total depth of 13,550' in the Mesozoic, and was plugged and abandoned. The discovery well at Happy Valley Field was the Unocal 1-Happy Valley well in Sec. 22-T2S-R13W , drilled in June, 2003, reaching total depth of 10,872' in the Tyonek T-130 reservoir level, and tested commercial rates of gas in the Tyonek T-120 and Tyonek T-70 reservoirs. The Happy Valley field discovery was confirmed by the Happy Valley #2 well drilled in July, 2003. This well flowed gas from two other Lower Tyonek reservoirs not seen in Happy Valley #1. Unocal then constructed a 15-mile natural gas transmission pipeline to, and gas production facilities at, the Deep Creek Unit, Happy Valley 'A' Pad. Gas sales commenced November 5, 2004. Unocal / Chevron then drilled an additional 11 delineation wells on two pad areas —A and B pads-- and acquired approximately 65 line miles of 2D seismic data over the area in an attempt to delineate the structure and reservoir distribution within the field. Of these 11 additional wells, 7 of the wells were either tested dry or were not commercial, and 4 resulted in commercial values of gas. Hilcorp Alaska LLC acquired Happy Valley Field from Chevron effective January 1, 2012. From January 4 2013 through March 30 2013 Hilcorp acquired approximately 47.54 square miles of 3D seismic data, and since taking over operations have drilled two gas producers —Happy Valley 14 and 15, one T&A'd well (Happy Valley 16) and the Happy Valley B-17 is awaiting completion pending modification of the Pool Rules herein described. 0 0 Page 6of10 HVA03 HVU31-22 HV&17 HV&12 HVA106 .� 'tip' 1 m __.._..........._.._ .___.........2.9Z------------------------------------- .:..�_ BFujGA TOP Figure 2. Cross section showing the proposed vertical expansion of the Pool to be defined as between 2246' MD (the Top of Beluga) and 10,046' MD (base of the T-155 zone) in the Superior Happy Valley #31-22 well. 4. GEOLOGY The Happy Valley B-17 well, at total depth and awaiting completion, encountered the Tyonek T-70 and deeper Tyonek reservoirs in the structurally highest position yet encountered in the field. The stratigraphically deepest reservoir that has tested gas in the pool is the T-150 in the HV-3 well which flowed 220 MCFGD but was never produced. The T-150 was the target in the B-17 well, but was shaled out and tight updip. The next zone up, the T-140, tested gas in HV-12, was frac'd with diesel, flowed 1.6 MMCFGD commingled with several other zones and died 1 month later. In order to tap this gas reservoir the pool limits need to be expanded. • 0 Page 7 of 10 MIA 1 ! ■!=A I 01 �r ��-. 1►'g-"ill�= �.=-"ate I 3 Figure 3: Structural cross section showing the position of the Happy Valley B-17 well relative to the other deeper Tyonek tests in the vicinity. • 0 Page 8 of 10 s i e a 1 +, -B,88 &Bfi] 7A B° .�..� ..f° O" am. $ a� g r 8 8 � „s Figure 4. Tyonek T-140 Structure and lowest known gas in the Happy Valley gas pool. Azimuthal dips at T-140 level in the B-17 well are 8 degrees NNE, and dips in the Happy Valley 31-22 are 3 degrees ENE (85 deg azimuth). The pool expansion will cover the gas indicated outside the boundary to the north. r0 Page 9 of 10 HVA,(g3 HVB-17 HVB s'p HVA 46 Yr 11,,34 j�8,0 Nk 1,Fse 10, ` 2,02#l')� '�` gel )epth(ft: -100 900 Figure 5. Stratigraphic cross section datumed on the T-140 coal. The Tyonek T-140 reservoir thickened up in the HVB-17 well, and is structurally high to the non - commercially productive equivalent zone in the HVB-12 well.. • Page 10 of 10 Figure 6. Proposed perforations in the HV B-17 well. Note that all those perforations that are below -9000' MD (9 sets of perforations planning) will lie outside the existing pool boundary. 5. CONFIDENTIAL LIST OF FIGURES Figure 1. Proposed pool boundary. Figure 2: Cross section showing the proposed vertical expansion Figure 3: Structural Cross Section T-140 Figure 4: T-140 Structure map Figure 5: T-140 Stratigraphic Cross Section Figure 6: Proposed perforations in the HVB-17 relative to the existing Pool boundary. STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION Docket Number: CO-16-002 Happy Valley Beluga/Tyonek Gas Pool, Deep Creek Unit Expansion of Affected Area and Vertical Limits March 1, 2016 NAME AFFILIATION Testify (yes or no) W 'TV tc..� C c , ' 0 THE STATE �ALASK[] GOVERNOR BILL WALKER February 10, 2016 Mr. Don Shaw 3640 N. Jaeger Circle Wasilla, AK 99654 Re: Docket Number: CO-16-002 Dear Mr. Shaw, Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.00gcc.alaska.gov The Alaska Oil and Gas Conservation Commission (AOGCC) received your request to attend the hearing regarding Conservation Order 553. There is no need to request attendance at a hearing. The hearing will be held as noticed on March 1, 2016. Please note that the only issues before the AOGCC at the hearing pertain to whether to expand the Happy Valley gas pool within the Deep Creek Unit. Consequently, only evidence relevant to a determination of whether the pool should be expanded will be accepted during the hearing. Sincerely, Cathy P Foerster Chair, ommissioner RECEIVED FEB 10 2016 �G�,92 �h1�1'/TisSvo�ee F'�►2SJ`�.ei AOGCC /2e��es7' � pa'G�CeT rv�irtae� Co /G `�� 7\14 ����'�, "To worn blx�e fibell, �w kJ" lie -' � h'1�aLep y�sTe.e/J�j� h4, :=�nl pda sN�' �07-sus=930/ RECEIVED FEB 0 9 2016 AOGCC ,2� % J �O/ b 1¢7- ?Iynq �o v go ?-5`�s- ��al 0 STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENT. ADVERTISING ORDER NUMBER AO-16-012 FROM: Alaska Oil and Gas Conservation Commission AGENCY CONTACT: Jody Colombie/Samantha Carlisle DATE OF A.O. 01/27/161(907)793-1223 AGENCY PHONE: 333 West 7th Avenue Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: 1/28/2016 FAX NUMBER: (907) 276-7542 TO PUBLISHER: Alaska Dispatch News SPECIAL INSTRUCTIONS: PO Box 149001 Anchorage, Alaska 99514 TYPE OF ADVERTISEMENT: LEGAL DISPLAY CLASSIFIED OTHER (Specify below) DESCRIPTION PRICE CO-16-002 revised Initials of who prepared AO: Alaska Non -Taxable 92-600185 s reislT [.Yv.......... �1GA1ivi Rcisi�iG:: ;.;.;ORDER::$jQ;,;EER'r[FIF.ry F:RIpp;VI'....:;:; sc[►Tigiy:wi?lwirriGeorY:o:::: ` ......................... .......................... Department of Administration Division of AOGCC 333 West 7thAvenue Anchorage, Alaska 99501 Page 1 of 1 Total of All Pages $ REF Type Number Amount Date Comments I PvN ADN84501 2 AO AO-16-012 3 4 AMOUNT SY Appr Unit PGM LGR Object FY DIST LIQ 1 16 021147717 3046 16 2 PFIN 3 4 5 Purchasing Authority Name: Tide: Purchas u o s atu Telephone Number t. A.O. # and receiving agency name must appear on all invoices and docume g to this purchase. 2. The state is registered for tax free transactions under Chapter 32, IRS code. Registration number 92-73 tems are for the exclusive use of the state and not for resale. rl�7M�1 Qt,.......:.:':':.:....ii:::::':':':':':':':':':':':'':':':':'>:':':':':':':':':::>':':':::::::::::':':::::::':':':'::::..:::... %.' ' ' ' ' ''..:.: i::::..:.......:.:.::::::::::::::::::::::::::: �IS1[DTI;i�.................................................................... `:Piece :in :: �rvtston. Isc..... gm .......:.:. ...... , • g ...... . Form:02-901 Revised: 1 /27/2013 Revised Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO-16-002 Happy Valley Beluga/Tyonek Gas Pool, Deep Creek Unit Expansion of Affected Area and Vertical Limits Hilcorp Alaska, LLC, by applications received January 12, and January 15, 2016, requesting the Alaska Oil and Gas Conservation Commission (AOGCC) to amend Conservation Order 553 to expand the areal extent and vertical limits of the Happy Valley Beluga/Tyonek Gas Pool in the Deep Creek Unit. The AOGCC has tentatively scheduled a public hearing on this application for March 1, 2016, at 9:00 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 February 12, 2016. 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) 793-1221 after February 16, 2016. 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 February 25, 2016, except that, if a hearing is held, comments must be received no later than the conclusion of the March 1, 2016 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than February 24, 2016. Cathy P. Foerster Chair, Commissioner oftIlReArill 0001379344 $209.18 AFFIDAVIT OF PUBLICATION STATE OF ALASKA THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language; continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said 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 January 28, 2016 and that such newspaper was regularly distributed 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. Subscribed and sworn to before me Is 28th day of January,, 2016 A� fi I M ryy( D qy"\ Notary Public in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES RECEIVED FEB 0 4 2016 AiaGcc Revised Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO-16-002 Happy Valley Beluga/Tyonek Gas Pool, Deep Creek Unit Expansion of Affected Area and Vertical Limits Hilcorp Alaska, LLC, by applications received January 12, and January 15, 2016, requesting the Alaska oil and Gas Conservation Commission (AOGCC) to amend Conservation Order 553 to expand the areal extent and vertical limits of the Happy Valley Beluga/Tyonek Gas Pool in the Deep Creek Unit. The AOGCC has tentatively scheduled a public hearing on this application for March 1, 2016, at 9:00 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 February 12, 2016. 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) 793-1221 after February 16, 2016. 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 February 25, 2016, except that, if a hearing is held, comments must be received no later than the conclusion of the March 1, 2016 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than February 24, 2016. Cathy P. Foerster Chair, Commissioner AO-16-012 Published: January 28, 2016 Notary Public BRITNEY L. THOMPSON State of Alaska My Commission Expires Feb 23, 2019 Singh, Angela K (DOA) 0 • From: Carlisle, Samantha J (DOA) Sent: Wednesday, January 27, 2016 3:07 PM To: Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Cook, Guy D (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); Frystacky, Michal (DOA); Grimaldi, Louis R (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Hill, Johnnie W (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); AKDCWeIIIntegrityCoordinator, Alan Bailey; Alex Demarban; Alexander Bridge; Allen Huckabay; Amanda Tuttle; Andrew VanderJack, Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Bob Shavelson; Brian Havelock; Bruce Webb; Burdick, John D (DNR); Caleb Conrad; Carrie Wong; Cliff Posey; Colleen Miller, Crandall, Krissell; D Lawrence; Dave Harbour, David Boelens; David Duffy, David House; David McCaleb; David Steingreaber; David Tetta; Davide Simeone; ddonkel@cfl.rr.com; Dean Gallegos; Delbridge, Rena E (LAS); DNROG Units (DNR sponsored); Donna Ambruz, Ed Jones; Elowe, Kristin; Evans, John R (LDZX); Frank Molli; Gary Oskolkosf, George Pollock, Gordon Pospisil; Gregg Nady; gspfoff, Hyun, James J (DNR); Jacki Rose; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Williams, Jennifer L (LAW); Jerry Hodgden; Jerry McCutcheon; Jim Watt; Jim White; Joe Lastufka; Joe Nicks; Easton, John R (DNR); Jon Goltz; Juanita Lovett; Judy Stanek, Houle, Julie (DNR); Julie Little; Kari Moriarty; Kazeem Adegbola; Keith Wiles; Kelly Sperback; Gregersen, Laura S (DNR); Leslie Smith; Lisa Parker, Louisiana Cutler, Luke Keller, Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Kremer, Marguerite C (DNR); Mary Cocklan-Vendl; Mealear Tauch; Michael Calkins; Michael Duncan; Michael Moora; Mike Bill; MJ Loveland; mkm7200; Morones, Mark P (DNR); Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nick W. Glover, Nikki Martin; NSK Problem Well Supv; Oliver Sternicki; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky, Shellenbaum, Diane P (DNR); Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer; Stephen Hennigan; Moothart, Steve R (DNR); Suzanne Gibson; Sheffield@aoga.org; Tania Ramos; Ted Kramer; Davidson, Temple (DNR); Terence Dalton; Teresa Imm; Thor Cutler, Tim Mayers; Todd Durkee; trmjrl; Tyler Senden; Vicki Irwin; Vinnie Catalano; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andrew Cater, Anne Hillman; Brian Gross; Bruce Williams; Bruno, Jeff 1 (DNR); Caroline Bajsarowicz; Casey Sullivan; Diane Richmond; Don Shaw; Donna Vukich; Eric Lidji; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Heusser, Heather A (DNR); Holly Pearen; Jason Bergerson; Jim Magill; Joe Longo; John Martineck, Josh Kindred; Kenneth Luckey; King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck, Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Terence Dalton; Tina Grovier (tmgrovier@stoel.com); Todd, Richard J (LAW); Tostevin, Breck C (LAW); Wayne Wooster, William Van Dyke Subject: Revised Notice of Public Hearing (Deep Creek Unit, Hilcorp) Attachments: Revised Notice of Public Hearing CO-16-002.pdf Please see attached. Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West Th Avenue Anchorage, AK 99501 (907) 793-1223 CONFIDENTIALITY NOTICE This a -mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Samantha Carlisle at (907) 793-1223 or Samantha.Carlisle@alaska.Qov. 0 0 James Gibbs Jack Hakkila Bernie Karl P.O. Box 1597 P.O. Box 190083 K&K Recycling Inc. Soldotna, AK 99669 Anchorage, AK 99519 P.O. Box 58055 Fairbanks, AK 99711 Gordon Severson Penny Vadla George Vaught, Jr. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 13557 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Denver, CO 80201-3557 David W. Duffy Richard Wagner Darwin Waldsmith Landman P.O. Box 60868 P.O. Box 39309 Hilcorp Alaska, LLC Fairbanks, AK 99706 Ninilchik, AK 99639 P.O. Box 244027 Anchorage, AK 99524-4027 Wkr--�;Le(:L r Angela K. Singh • • STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OFADVERTISMINT. ADVERTISING ORDER NUMBER AO-16-011 FROM: Alaska Oil and Gas Conservation Commission AGENCY CONTACT: Jody Colombie/Samantha Carlisle DATE OF A.O. 01/19/16 AGENCY PHONE: 1(907) 793-1221 333 West7th Avenue Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: 1/20/2016 FAX NUMBER: (907)276-7542 TO PUBLISHER: Alaska Dispatch News SPECIAL INSTRUCTIONS: PO Box 149001 Anchorage, Alaska 99514 LEGAL ©iSPLAY GL"SIFIEO OTHER (SpecifybeWwl DESCRIPTION PRICE CO-16-002 Initials of who prepared AO: Alaska Non -Taxable 92-600185 sI liMir:nwi�ic siloliixG Abe i ........................:::kI[ILICAIION W.ITH:ATTACHE !COP.Y.OF .......................... ................................... Department of Administration Division of AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 I PaRe I of 1 T7aae, All PS - REF Type Number Amount Date Comments 1 PvN ADN84501 2 Ao AO-16-011 3 4 FIN AMOUNT SY Ap r Unit PGM LGR Object FY I DIST LIQ 1 16 021147717 3046 16 2 3 4 5 Purchasi g A It i e: c sing AuthoritTo Signature Telephone Number ?9'3 • a 1 1. A.O. # a d eceiving agency name must appear on all invoices and docume relating to this purchase. 2. The stattA registered for tax free transactions under Chapter 32, IRS code. egistration number 92-73-0006 K. Items are for the exclusive use of the state and not for resale. ST U..ON:.:...............:............::. pL.T.......... ........... ......... ..... .... ........ .... ;:;:;:;: biwW-6tifis6voriglttial A©:.:'..:.::::::::::Copies:::T!Iililfslier. f cried), Divisfbti'Fisca .Rece1 m ............. ..................... ............... .... ................I ...... Form:02-901 Revised: 1 /19/2016 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO-16-002 Happy Valley Beluga/Tyonek Gas Pool, Deep Creek Unit Expansion of Affected Area and Vertical Limits Hilcorp Alaska, LLC, by applications received January 12, and January 15, 2016, requesting the Alaska Oil and Gas Conservation Commission (AOGCC) to amend Conservation Order 533 to expand the areal extent and vertical limits of the Happy Valley Beluga/Tyonek Gas Pool in the Deep Creek Unit. The AOGCC has tentatively scheduled a public hearing on this application for February 24, 2016, at 9:00 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 February 5, 2016. 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) 793-1221 after February 9, 2016. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7t' Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on February 22, 2016, except that, if a hearing is held, comments must be received no later than the conclusion of the February 24, 2016 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than February 19, 2016. 00 Cathy P Foerster Chair, ommissioner 270227 0001378755 $194.24 STATE OF ALASKA RECEIVED JAN 2 5 2016 AFFIDAVIT OF PUBLICATION AOGCC THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all :said time was printed in an office maintained at the aforesaid place of publication of said 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 January 20, 2016 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed �. Subscribed and sworn to before me this 20th day of January, 2016 i Notary P lic and for The State of -Alaska. Third Division Anchorage, Alaska MY COMMISSION EXF'IRES Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO-16-002 Happy Valley Beluga/Tyonek Gas Pool, Deep Creek Unit Expansion of Affected Area and Vertical Limits Hilcor Alaska, LLC, by a lications received January 12, and January 15, 2016, requesting the APaska oil and Gas Conservation Commission (AOGCC) to amend Conservation Order 533 to expand the areal extent and vertical limits of the Happy Valley Beluga/Tyonek Gas Pool in the Deep Creek Unit. The AOGCC has tentatively scheduled a public hearingg on this application for February 24, 2016, at 9:00 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 February 5, 2016. 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) 793-1221 after February 9, 2016. 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 February 22, 2016, except that, if a hearing is held, comments must be received no later than the conclusion of the February 24, 2016 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than February 19, 2016. AO-16-011 Published: January 20, 2016 Notary Public BRITNEY L. THOMPSON State of Alaska My Commission Expires Feb 23, 2019 Colombie, Jody .l (DOA) From: Colombie, Jody J (DOA) Sent: Tuesday, January 19, 2016 1:06 PM To: Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael (DOA sponsored); Regg, James B (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andrew Cater; Anne Hillman; Bajsarowicz, Caroline J; Brian Gross; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; David Tetta; Don Shaw; Donna Vukich; Eric Lidji; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Heusser, Heather A (DNR); Holly Pearen; Hyun, James J (DNR); Jason Bergerson; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Kenneth Luckey; King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Louisiana Cutler; Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Terence Dalton; Tina Grovier (tmgrovier@stoel.com); Todd, Richard J (LAW); Tostevin, Breck C (LAW); Wayne Wooster; William Van Dyke; AKDCWellIntegrityCoordinator; Alan Bailey; Alex Demarban; Alexander Bridge; Allen Huckabay; Amanda Tuttle; Andrew VanderJack; Anna Raff; Barbara F Fullmer; bbritch; bbohrer@ap.org; Bob Shavelson; Brian Havelock; Bruce Webb; Burdick, John D (DNR); Caleb Conrad; Carrie Wong; Cliff Posey; Cocklan-Vendl, Mary E; Colleen Miller; Crandall, Krissell; D Lawrence; Dave Harbour, David Boelens; David Duffy; David House; David McCaleb; David Steingreaber; Davide Simeone; ddonkel@cfl.rr.com; Dean Gallegos; Delbridge, Rena E (LAS); DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elowe, Kristin; Evans, John R (LDZX); Frank Molli; Gary Oskolkosf; George Pollock; Gordon Pospisil; Gregg Nady; gspfoff, Jacki Rose; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Williams, Jennifer L (LAW); Jerry Hodgden; Jerry McCutcheon; Jim Watt; Jim White; Joe Lastufka; Joe Nicks; Easton, John R (DNR); Jon Goltz; Juanita Lovett; Judy Stanek; Houle, Julie (DNR); Julie Little; Kari Moriarty; Kazeem Adegbola; Keith Wiles; Kelly Sperback; Gregersen, Laura S (DNR); Leslie Smith; Lisa Parker; Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Kremer, Marguerite C (DNR); Mealear Tauch; Michael Calkins; Michael Duncan; Michael Moora; Mike Bill; MJ Loveland; mkm7200; Morones, Mark P (DNR); Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nick W. Glover; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver R; Moothart, Steve R (DNR); Suzanne Gibson; sheffield@aoga.org; Tania Ramos; Ted Kramer; Davidson, Temple (DNR); Teresa Imm; Thor Cutler; Tim Mayers; Todd Durkee; trmjrl; Tyler Senden; Vicki Irwin; Vinnie Catalano Subject: Public Hearing Notice (Hilcorp) Attachments: Public Hearing Notice CO-16-002.pdf Jody J. Co(ombie AOGCC Specia(Assistant .A(as(a Oi(andGas Conservation Commission 333 West 7`h .Avenue .Anchorage, .A(aska 995oi office: (907) 793-1221 Fax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iody.colombie@alaska.aov. 0 0 James Gibbs Jack Hakkila Bernie Karl P.O. Box 1597 P.O. Box 190083 M Recycling Inc. Soldotna, AK 99669 Anchorage, AK 99519 P.O. Box 58055 Fairbanks, AK 99711 Gordon Severson Penny Vadla George Vaught, Jr. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 13557 Anchorage, AK 99508-4:336 Soldotna, AK 99669-7714 Denver, CO 80201-3557 David W. Duffy Richard Wagner Darwin Waldsmith Landman P.O. Box 60868 P.O. Box 39309 Hilcorp Alaska, LLC Fairbanks, AK 99706 Ninilchik, AK 99639 P.O. Box 244027 Anchorage, AK 99524-4027 rv1L k@ '')2Jtv2C't 20\ 2C, \(-C Angela K. Singh 5� • f 1 Hilcorp Alaska, LLC January 15, 2016 Cathy Foerster, Chair Alaska. Oil and Gas Conservation Commission 333 West 7 h Avenue, Suite 100 Anchorage, Alaska 99501 RE: Supplemental Proposal to Amend Conservation Order 553 Dear Commissioner Foerster, Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone:907/777-8414 Fax:907/777-8301 Email: dduffy@hilcorp.com E C EEIVEE'+0 JAN 19 2016 AOGCC On January 12, 2016, Hilcorp Alaska, LLC ("Hilcorp"), as Operator of the Deep Creek Unit, requested the Alaska Oil and Gas Conservation Commission ("AOGCC") take administrative action to modify the affected area of the Happy Valley Beluga/Tyonek Gas Pool. AOGCC staff promptly informed Hilcorp that public notice and an opportunity for hearing would be required. As such, Hilcorp further desires modify Rule 1 of Conservation Order 553 CO 553 as follows: Rule 1 Pool Definition The Happy Valley Beluga/Tyonek Gas Pool is defined as gas bearing intervals common to and correlating with the interval between the measured depths of 2-,99--7 2,246 and 10,046 feet in the Superior Happy Valley No. 31-22 exploration well. This modification will maximize the productive interval associated with the top of the Beluga formation and vertically align the AOGCC-administered "pool" with the Happy Valley Participating area ("PA"). Data supporting this request was obtained through the drilling of the recent HBV-17 well, as correlated to the HV 31-22 well. See Exhibit A (Happy Valley Pool, Annotated Base and Top Cross Section). Should any additional information be required, Hilcorp would be pleased to schedule a technical meeting with AOGCC staff. In the interim, technical questions should be directed to David Buthman, Geologist at 777-8375. Should you have any other questions, please do not hesitate to contact me at 777-8432. Sincerely, David W. Duffy, Landman Hilcorp Alaska, LLC Hilcorp Alaska, LLC 0 CO 553: Pool Vertical Modification Page 2 of 3 Enclosures: Exhibit A (Happy Valley Pool, Annotated Base and Top Cross Section) CC: Ethan Schutt, Sr. V.P., Land and Energy Development Cook Inlet Region, Inc. 725 E. Fireweed Lane, Suite 800 Anchorage, AK 99503 Corrie Feige, Director, Department of Natural Resources Division of Oil and Gas 550 West 7t' Avenue, Suite 1100 Anchorage, Alaska 99501-356 Hilcorp Alaska, LLC 0 • CO 553: Pool Vertical Modification Page 3 of 3 Fxhihit A: Happy Valley Pool, Annotated Base and Top Cross Section 50231200500000 50231100010000 HVB-17 HVU 31.22 DEEP CREEK POOL 0 HAPPY VALLEY PA DP„,.,v, RULES Depths 2246' MD' (-1617' - 1-1' 2246' MD' (-1617' REED pRM41 MPRIIII lG3IPC WAIN) SD I�'NNNOW NI DiC NAfI GS,PC, RE GR (GMII SSTVD)-10,046' MD ^- 6 m a-SSTVD) -10,046' (-9417 TVDSS) in the _- -_ MD (-9417 NDSS) Superior Happy in the Superior Valley No. 31 22 Happy Valley No. J ar 31-22 2,116' MD (-1,440' SSTVD)- 10,484' MD1 (-9,303' SSTVD) in theL-__,. _ Happy Valley B-17 �- well RECEII#D JAN 15 2016 Hilcorp Alaska, LPGCC January 12, 2016 Cathy Foerster, Chair Alaska) Oil and Gas Conservation Commission 333 West 7t' Avenue, Suite 100 Anchorage, Alaska 99501 Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 907/777-8414 Fax: 907/777-8301 Email: dduffy@hilcorp.com RE: Proposal to modify the affected area of the Happy Valley Beluga/Tyonek Gas Pool (Conservation Order 553). Dear Commissioner Foerster, Hilcorp Alaska, LLC ("Hilcorp"), as Operator of the Deep Creek Unit, respectfully requests the Alaska Oil and Gas Conservation Commission ("AOGCC") take administrative action to modify the affected area of the Happy Valley Beluga/Tyonek Gas Pool as currently defined by Conservation Order 553. This modification will expand the pool boundary, and therefore applicable pool rules, to encompass the recently discovered and anticipated productive zones of the Happy Valley Beluga/Tyonek Gas Pool. This expansion constitutes approximately 400 acres. The proposed legal description (and associated lease number) of the modified pool boundary is as follows: Township 2 South, Range 13 West, Seward Meridian, Alaska: C061588 SW4, SW4 SE 4 of Section 15 S2 SE 4, NE 4 SE4 of Section 16 C061589 E2, E2 SW4 of Section 21 C061590 W2 NW4, SW4 of Section 22 N2 NW4 and SW4 NW4 of Section 27 S2 NW4, NE4 NW4, N2 SW4, NE4, NW4 SE4 of Section 28 ADL 384380 E2 NW4, W2 NE4 of Section 22 Based on the latest geologic and engineering information currently available to Hilcorp, and particularly data obtained through the recent drilling of the Deep Creek Unit Hilcorp Alaska, LLC • • CO 553: Pool Boundary Modification Page 2 of 6 HVB-17 well, Hilcorp has confirmed that the current affected area of CO 553 does not adequately contain the geologic structure of the Happy Valley Beluga/Tyonek Pool. Confidential Exhibit A (structural map of the T-140 sands) attached hereto, demonstrates that the known or anticipated geologic structure of the pool extends beyond the affected area currently defined by CO 553. As a result of this discovery, it is necessary and proper for AOGCC to expand the affected area of Conservation Order 553. Adoption of the proposed change to the affected area of the Happy Valley Beluga/Tyonek Gas Pool will bring the Conservation Order 553 into compliance with the statutory definition of the term "pool."' Moreover, it will establish a single set of substantive rules to guide the exploration and development of the pool in its entirety. At this time, no other changes to the current Happy Valley Pool Rules are requested or necessary. DISCUSSION Hilcorp is the sole working interest owner and operator of the Deep Creek Unit, Happy Valley PA. The State Division of Natural Resources ("DNR") and Cook Inlet Region, Inc. ("CIRI") co -manage the unit. CIRI and DNR are the only landowners affected by this application. Copies of the Deep Creek Unit exhibits are attached hereto. A map showing the current and proposed pool boundary, including applicable Unit, Participating Area, and affected leases is attached hereto as Exhibit B. This map also illustrates the location of existing wellbores (spider map) within 3000 feet of the HVB- 17 bottom -hole location and landownership within 1500 feet of the same. For additional reference purposes, the nearest distance to the Deep Creek Unit boundary (measured from HVB-17 BHL) is —5011 feet. A map showing the proposed pool boundary relative to the underlying leases (and associated quarter -quarter sections) is attached as Exhibit C. Rule 5 of CO 553 expressly authorizes AOGCC to take administrative action to amend the Happy Valley Beluga Tyonek Gas Pool rules, "...so long as the change does not promote waste or jeopardize correlative rights, is based upon sound engineering and 'Per AS 31.05.170(12), the term "pool" means "an underground reservoir containing, or appearing to contain, a common accumulation of oil or gas." Hilcorp Alaska, LLC • CO 553: Pool Boundary Modification Page 3 of 6 geoscience principles, and will not result in an increased risk of fluid movement into freshwater." In this instance, administrative action is appropriate because the proposed modifications do not require changes to any enumerated or substantive pool rules (e.g., well spacing/density or vertical definition of the pool). Rather, this proposal simply seeks to modify the legal description of the affected area to match the latest geologic interpretation of the pool's location (as projected to the surface). Prior to the submittal of this application, Hilcorp provided pre -application briefing materials to DNR and CIRI staff. As a result of this consultation, Hilcorp will initially test and produce HBV-17 on a tract basis until such time as it is appropriate to expand the Happy Valley Participating Area. See 11 AAC 83.351(c). Doing so will expedite production (and thus prevent waste) and adequately protect the respective correlative rights of both CIRI and the state. Hilcorp's proposed modification complies with applicable unit management practices, sound engineering and geoscience principles and poses no risk of increased fluid movement to freshwater. Should any additional information be required, Hilcorp would be pleased to schedule a technical meeting with AOGCC staff. In the interim, technical questions should be directed to David Buthman, Geologist at 777-8375. Should you have any other questions, please do not hesitate to contact me at 777-8432. Sincerely, David W. Duffy, Landman Hilcorp Alaska, LLC Enclosures: • EXHIBIT A (Confidential): Structure Map of the Happy Valley T-140 Sands • Exhibit B: Landownership & Spider Map • Exhibit C: Proposed Pool Boundary • Deep Creek Unit Exhibits CC: Ethan Schutt, Sr. V.P., Land and Energy Development Cook Inlet Region, Inc. 725 E. Fireweed Lane, Suite 800 Anchorage, AK 99503 Corrie Feige, Director, Department of Natural Resources Division of Oil and Gas 550 West 7th Avenue, Suite 1100 Anchorage, Alaska 99501-356 Hilcorp Alaska, LLC 0 0 CO 553: Pool Boundary Modification Page 5 of 6 17 EXHIBIT B p CM 587 —�L 3C, ISM n a PSO • :ZEP Cabs U 1 tea: 9) -- ! Legend Gq� � HAPPY VALLEY -Current Poo I8oun0ar = PROPOSED POOL BOUNDARY . • Other Surface We11Locatbns • OtnerBolom Mole L0001016 ^. .. NellPars ® r1 C0 Gross Gas rive-1' c� ADL384380 - 1500tt0utkrtrom8i-- 30001100% r from 8r_ I0 2,t00 .377 CO 553: Exhibit B Feet Land Ownership & Spider Map Ala6kaStale PlaneZone 4,NM1D27 A llitanY .ilic4i, 1LC Kip Date: 1112.2016 Hilcorp Alaska, LLC 0 CO 553: Pool Boundary Modification Page 6 of 6 E .270] ADL3843W EXHIBIT C w C061,5117 10 %6ft PW 6 FW wP. KvE 1,fe n Pad Pao HNXV .046 A Pao a. ml I Legend RO POSED POO -SOUNOARI 0 0 Z400 4ACC CO 553: Exhibit C — Feel Proposed Pool Boundary Am*& S*" ftne Zym 4, KA= PAM Oa*A, 1 1-2=16 A Deep Creek Unit Exhibit A Effective January 1, 2012 Working Working Tract Mineral '.Mineral Royalty ORR1 ORRI Interest Interest Tract Tract Legal Description Acreage Lease # Owner interest Percent Owner Percent Ownership Owner % 01 Tovmship 2 South, Range 13 West, Seward Meridian, Alaska Sec. 1: AII, 647.08 acres; See. 2: AII, 642.88 acres; Sac. 11, All, 640 acres; See. 12: AII, 640 acres. 02 Towruhip 2 South, Range 13 West, Seward Meridian, Alaska Section16Surveyed,Wl/2NEI/4NWI/4, NW I /4 NV I/4, 60 acres; Section 31 Surveyed. All, 623.72 acres; Section 32- Surveyed, All, 640 acre; Section 33. Surveyed, All, 640 acres; Special Surveys: U S. Survey 9469, iota 3 and 4 (formerly krmn as Lot 2),159.96 acres Alaska State Lard Surveys: A.S.LS. 80-72, Tracts A and 0, 9.99 acres; 03 Township 2 South, Range 13 West, Seward Meridian, Alaska Section 10. All, Excluding l.ot 1 of U.S. Survey 9469, 600.01 acres; Section 13- WVh 320acres, Section 14. All, 640 acres; Section 15: All, 640 acres; Section t 6:. EV, EkVM%?. W'id, S4LNWn/4, Syr, 580 acres; Deer Creek Unit Exhibit A Last Update 3/1512012 2,569.96 U0C # 1029392 Cook Inlet Rely m, Inc. 100 00% 18.0WI ConocoPhillips Alaska, 1.50000M Hilcorp Alaska, LLC CIRI # C-061587 Inc. 2,133.67 UOC 0 1030902 State ofAlaska, Deparanenn 100 00% 12.500% CHU Production 3.300000'/. Hilcorp Alaska, LLC ADL 0 384390 of Natwal Resources ConQany CanomPlullips Alaska, 15000005. Inc. 2.780.01 UOC # 1029393 Cook Wet Region, Inc. 100.001% I8 000% ConocoPhillips Atoka, 1.5000WIs thlaap Alaska, LLC CIRI # C-061598 lac- Wo.OoY. 100.0OY. 100.01N. Page 1 of3 is Working Working Tract :Mineral :Mineral Royalty ORRI ORRI Interest Interest Tract Tract Legal Description Acreage lease it Owner Interest Percent Owner Percent Ownership Owner aka 04 Towrmhip 2 South, Range 13 West, Seward Meridian, Alaska Section 20: All, Excluding Tracts A and B of ASLS SO-72, 632.99 acres, Section 21 All, 640 acres; Section 29_ All, 640 acra; Section 30- All, 621.44 acres, 05 Township 2 South, Range 13 West, Seward Meridian, Alaska Section 22- All, Excluding Lon 3 and 4 (fontbrly known as La 2) of USS 9469, 460.04 acres; Section 23: All. 640 scres; Section 27. All, 640 acres; Section 28: All, 640 acres; Section 34: All, 640 acres; 06 Township 3 South, Range 14 Wes, Seward Meridian, Alaska Section 1: Surveyed, All, 641.94 sera; Section 2: Surveyed, All, 640.70 sores; Section 3: Surveyed, All, 640.04 acres; Section 10: Surveyed, All, 640.0 acres; Section 11: Surveyed, All, 640.0 acres; Section 12: Surveyed, All, 640.0 sera; Section 13: Surveyed, All, 640.0 acres; Section 14: Surveyed, All, exchA%U.S. Survey 4717, 637.26 acres; Secticn 15: Surveyed, All, excluding U.S. Survey 4717, 637.74 acres; Special Surveys: U S Survey 4717, 5 00 acres, Deep Creek Unit Exhibit A LAM Update: 3/15/2012 2,53443 UDC a 1029394 Cook Inlet Region, Ix. 100 00% I9.000"/o ConocoPhillips Alaska, 1.500000% Hilcorp Alaska, LLC I00.00% CIIU it C-061599 Inc. 3,040.04 UOC k 1029395 Cook Inlet Region, Inc. 100.00% 1g.000% CoeowPhillips Alaska, 1.500000% Hdmp Alaska, LLC 100.00% Cmi 4 C-061590 Inc. 5,762.69 UOC 4 1030906 State of Alaska, Department 100.0016 12.500% CcrrocoPhillips Alaska, 1 500W0% Hilcorp Alesks, LLC ADL 4 399226 of \atuml Resources Inc. ►00.00% Page 2 of 3 • • Working tag Tract Mineral Mineral Royalty ORRI ORRI Interest Interest Tract Tract Legal Description Acreage Lease # Owner Interest Percent Owner Percent Ownership Owner % 07 Tomembip 3 South, Range 13 Wast, Seward Mendien, Alaska Soction 6: Surveyed, All, 625.22 scm, Section 7 Surveyed, All, 624.90 area; 08 Township 3 South, Range 13 West, Seward Meidian, Alaska Section 5: Lots Ito 4 inclusive, SI2 NI/2, SEl/4, SW U4, Section 8 AIL Section IS: All. Township 3 South, Range 14 Whet, Seward Mendian Section 24: All: 09 Township 2 South, Range 13 Wear, Seward Mendian, Alaska Special Survey U S Survey 9469, Lot 1, 39.99 race Deep Creek Unit Exhibit A Last Update 3/1512012 1,250.12 UOC # 1030905 Stale of Alaska, Delwtmett 100000/• 12 500% ConocoPhillips Alaska, I SODOM/• Hileorp Alaska, LLC 100.00'/R ADL a 389225 of Natural Rewurees Inc. 2,546.00 L,+OC 4 1029396 Code Wet Region, Inc. 100.00% I 9.0WIm ConocoPhillips Alaska, 1.500000% Hileorp Ala" LLC 100.001% CHU0 C-061591 Inc. I* 39.99 uelesaad KJA 100.0 % TOW knit Acreage 22,656.90 Working Interest Net Acres Unit % Owner Umcnin'ted 39.99 0Is% Mloorp Alaska, LLC 22,616.91 99.82r/• Page 3 of 3 Cook Inlet Deep Creek Unit Exhibit B C061587 1 2 [23 C061,W L 4 C061589 C061590 5 2 ADL3 2237 6 ADL389226 8 C061591 Uri* Boundary Urit Tract � 1 es State Leas r C*HI Leases March 1, 2012 Scale: 1:100.000 e;k.q A6&k . LU Deep Creek Unit Exhibit C Happy Valley Participating Area Effective 1/1/2012 Working Working Tract Tract Mineral Mineral Royalty ORRI ORRI interest Interest Tract Tract Legal Description Acreage Lease # Percentage Owner interest Percent Owner Percent Ownership Owner % 02 Township 2 SoutK Range 13 Wan, 1$5.16 UOC # 1030902 12.512903% State of Alaska, 100.00Y. 12, 500r/o CI.RI Production Comparty 3.500000% Ililemp Alaska, ILC 100.00% Seward Mendian, Aluka ADL # 394380 Department of Natural Resources CotwwPhillhps Alaska, Inc 1.500000Y. Special Surveys, that portion of U.S. Survey 9469, Lou 3 and 4 withiu the W 1 /2 and W I/2NEU4 of Sectim 22 03 Township 2 South, Range 13 Went, 40.00 UOC # 1029393 3.225807% Cook Inlet Region, Inc. 100.00% 18.000% ConomPlullips Alaska, Inc. 1.500000 % Hilcorp Atoka. LLC 100 00% Seward Mendiam Alaska CIRI i C-061589 Section I5: SE114SWlf4 04 Towtahip 2 South, Range 13 Wes. 360.00 1:0C # 1029394 29.032258% Cook Inlet Region, Inc. 100.00% 18.000 % ConoeoPlullipa Alaska, Inc. 1.500000% Rimp Alaska, LLC 100.00% Seward Meridiem Alaska CHU # C-061599 Section 21: EtPNEI/4, SWI14NE1/4, EV2SWl/4, SEl/4. 05 Township 2 So^ Range 13 Wag, 694.84 UOC # 1029395 55.2290321/6 Cook Inlet Region, Inn. 100.00Ye 18000% ConocoPldllips Alaska, Inc. 1.500000Ye Ifilcurp Alaska, LLC 100.00% Seward Meridian, Alaska CIRI # C-061590 Section22: Wl/2&MNW1/4NEIf4 excluding Lots and 4 of U.S. Survey 9469, 244.84 saes; Sedicn27: NWI/4NW1/4,40aero; Sedicn28: NEI/4,NE114NWll4, Sl /2NWli4, NI/L4WI14, N'W I/4SE1/4, 400 aces; Total PA Total Tract Working Interest Acreage Percentage Owners PA % 1.240.00 IO00000ow. Vrteotranitted 0.00m thlemp Alaska, LLC 100 0000% I appy Valley Participating Area -Exhibit C list Update 3/15/2012 Page ] of 1 Deep Creek Unit Exhibit D Happy Valley Participating Area JStm --IRI Leases � � ClRileases March 1, 2012 Scale: 1:100.000 Ill -p AI.A.. LIA Ln (Domestic Mail Only, s Insurance Coverage Provided) x � s fl F Cartltled Fee Postmark Q Return now" No Here © (Endors*, meat Requh sd) M RLstrloted Dalhmry Fee Cr9 (Endorsement ROWired) nJ O 'total Postage & Fees M t7¢ �s r i d C-or PO:a,,x :A" Cook Inlet Region, Inc. 725 E. Fireweed Lane, Suite 800 Anchorage, AK 99503 �-Provided) NFor .n .a delivery A cc Er arie, Corfil4ed Fee 3 # � Postmark Return Receipt Fee Here (Endorsement # aired) £3 M Resided [3a1tv©ry Fee (Endrraeta an Racgusnad} ru Gi Total Aostao- A %s m Corti A. ieige, Director sera Oil and Gas Division orP OBoxA Alaska Department of Natural Resources 15'� 'sL;L;; s 550 W. 7th Avenue, Suite 1100 Anchorage, AK 99S01
