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Home My WebLink AboutCO 811CONSERVATION ORDER 811 Whiskey Gulch 15 1. November 14, 2023 Hilcorp application for WG 15 spacing exception (Confidential exhibits held in secure storage) 2. November 16, 2023 Public Hearing Notice, Affidavit of Publication, Email list. 3. November 16, 2023 Emails re: scheduling 4. December 12, 2023 Emails re: process 5. January 15, 2023 Comments from KBCS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC for an exception to the spacing requirements of 20 AAC 25.055 (a)(2) to drill, complete, test, and produce the Whiskey Gulch No. 15 exploratory well within 1,500 feet of property lines where the owner and landowner are not the same on both sides of the lines, pursuant to 20 AAC 25.055(d). ) ) ) ) ) ) ) ) ) Docket Number: CO-23-016 Conservation Order 811 Whiskey Gulch No. 15 Exploratory Gas Well Kenai Peninsula Borough, Alaska January 03, 2024 IT APPEARING THAT: 1. By letter received November 15, 2023, Hilcorp Alaska, LLC (Hilcorp) requested the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order approving an exception to the spacing requirements of 20 AAC 25.055(a)(2) to drill, complete, test, and produce the Whiskey Gulch No. 15 (WG-15) exploratory well within 1,500 feet of property lines where the owner and landowner are not the same on both sides of the lines in the Whiskey Gulch Undefined Gas Pool, Whiskey Gulch Prospect, Cook Inlet Basin. 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for January 23, 2024. On November 16, 2023, the AOGCC published notice of the opportunity for that hearing on the State of Alaska’s Online Public Notice website and on the AOGCC’s website, electronically transmitted the notice to all persons on the AOGCC’s email distribution list and mailed printed copies of the notice to all persons on the AOGCC’s mailing distribution list. On November 19, 2023, the AOGCC published the notice in the Anchorage Daily News. 3. Hilcorp sent, by certified mail, notice of the application to all owners, landowners, and operators of all properties within 3,000 feet of the WG-15 well trajectory and provided the notice, addresses to which the notices were delivered, and certified mail receipts to AOGCC. 4. No comments or objections were received by the AOGCC. 5. No request for a public hearing was received. The tentatively scheduled public hearing was vacated on December 11, 2023. 6. Hilcorp’s application and AOGCC’s records provide sufficient information upon which to make an informed decision. PURPOSE AND NEED FOR THIS ORDER: Well spacing regulations protect the oil and gas rights of adjacent landowners and maximize resource recovery by establishing default limits on how close, under the land's surface, oil and gas wells can be to each other and to property lines where ownership changes hands. These limits are set forth in a regulation, 20 AAC 25.055. Operators must abide by the default well spacing limits (referred to as statewide spacing requirements) unless they apply for, and obtain, an exception to those limits. Although exceptions to the default well spacing requirements are not unusual, AOGCC carefully evaluates each application, and typically grants them only when actual geologic CO 811 January 03, 2024 Page 2 of 3 conditions demonstrate that the proposed subsurface location of a well is necessary to reach otherwise unreachable oil or gas and that both the rights of adjacent landowners and underground drinking water can be protected. As a general matter, AOGCC does not have extensive authority over surface impacts such as noise, emissions, or construction. FINDINGS: 1. Hilcorp is operator for the onshore WG-15 well (Permit to Drill No. 223-102) located within Kenai Peninsula Borough on the east side of the Cook Inlet Basin, Alaska. It is planned to be drilled in late 2023 to a total depth of 8,491’ measured depth (MD), which is equivalent to 7,721’ true vertical depth. Surface Location: 1,496’ FSL, 1,605’ FEL, Sec. 23, T04S, R15W, Seward Meridian (S.M.) Bottom Hole Location: 2,361’ FNL, 372’ FWL, Sec. 23, T04S, R15W, S.M. 2. The surface location for WG-15 lies within Alaska Department of Natural Resources (DNR) Mineral Lease ADL 0392666. Hilcorp is the 100% Working Interest Owner and the State of Alaska is the landowner for this lease. The bottom-hole location for the well lies on private lands for which Hilcorp owns 100% Working Interest. 3. Because pool rules have not been established within the Whiskey Gulch field, statewide default spacing rules apply. 4. WG-15 is an exploratory well targeting unproven reserves in the Sterling, Beluga, and Tyonek Formations within Whiskey Gulch Undefined Gas Pool. 5. Following successful completion of WG-15 well and prior to bringing the well online, Hilcorp intends to apply to DNR to form a Unit and Initial Participating Area (PA). Due to the complexity of land ownership in the Whiskey Gulch field and AOGCC’s obligation to protect correlative rights, production will not be authorized prior to a DNR approved PA. A copy of the decision and PA allocation schedule will be provided to AOGCC. No production can occur until AOGCC reviews the PA. 6. Hilcorp proposes to allocate royalties (0.125 royalty rate multiplied by the prevailing value for Cook Inlet gas published by the Alaska Department of Revenue for that quarter) to all leased owners/landowners based on their tract allocation percentages, mineral ownership, and lease royalty shown on the approved PA allocation schedule. Hilcorp will establish and maintain in Alaska, without costs to the non-participating owners/landowners, a single, interest-bearing escrow account for the non-participating owners/landowners and will provide documentation to AOGCC that the Escrow Account has been established (for more details, see Hilcorp’s public Application for Spacing Exception received November 15, 2023). As a result, the correlative rights of all affected owners, landowners and operators will be protected by approval of this spacing exception. 7. WG-15 targets unproven gas reserves that cannot be reached by conforming to applicable statewide spacing regulations because of the thin, narrow, discontinuous, and lenticular nature of the stacked channel reservoir sands and their most prospective locations on the subsurface structure. 8. If operated as required, drilling, testing, completion, and regular production of the WG-15 well will not cause waste or result in an increased risk of fluid movement into freshwater. CO 811 January 03, 2024 Page 3 of 3 CONCLUSIONS: 1. An exception to the well spacing provisions of 20 AAC 25.055 is necessary to allow drilling, completion, testing, and regular production of the Whiskey Gulch Undefined Gas Pool in the WG-15 exploratory gas well to maximize ultimate resource recovery. 2. Granting an exception to the well spacing provisions of 20 AAC 25.055 for WG-15 will not result in waste or jeopardize correlative rights of adjoining or nearby owners, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. NOW THEREFORE IT IS ORDERED: The AOGCC grants Hilcorp’s November 15, 2023, application for an exception to the well spacing provisions of 20 AAC 25.055 to allow drilling, completion, testing, and regular production of the WG-15 exploratory gas well within the Whiskey Gulch Undefined Gas Pool. Hilcorp may proceed and must comply with all applicable laws and all other legal requirements. DONE at Anchorage, Alaska and dated January 03, 2024. Brett W. Huber, Sr Jessie L. Chmielowski Gregory C. Wilson Chair, Commissioner Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2024.01.03 12:07:54 -09'00' Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2024.01.03 12:58:36 -09'00' Gregory Wilson Digitally signed by Gregory Wilson Date: 2024.01.03 13:07:31 -09'00' From:Christianson, Grace K (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Conservation Order 811 (Hilcorp) Date:Wednesday, January 3, 2024 3:41:33 PM Attachments:CO 811.pdf THE APPLICATION OF Hilcorp Alaska, LLC for an exception to the spacing requirements of 20 AAC 25.055 (a)(2) to drill, complete, test, and produce the Whiskey Gulch No. 15 exploratory well within 1,500 feet of property lines where the owner and landowner are not the same on both sides of the lines, pursuant to 20 AAC 25.055(d). __________________________________ List Name: AOGCC_Public_Notices@list.state.ak.us You subscribed as: samantha.carlisle@alaska.gov Unsubscribe at: https://list.state.ak.us/mailman/options/aogcc_public_notices/samantha.carlisle%40alaska.gov 5 The Kachemak Bay Conservation Society's mission is to protect the environment of the Kachemak Bay region and greater Alaska by encouraging sustainable use and stewardship of natural resources through advocacy, education, information, and collaboration. 1 January 15, 2024 TO: Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Emailed to: samantha.carlisle@alaska.gov FROM: Kachemak Bay Conservation Society RE: Docket Number CO-23-016 Hilcorp Alaska, LLC’s Spacing Exception Application for Exploratory Well Whiskey Gulch 15 Whiskey Gulch Prospect near Anchor Point, Kenai Peninsula Borough, Alaska Dear Commissioners, The Kachemak Bay Conserva�on Society is a Homer-based nonprofit organiza�on that focuses on habitat and wildlife issues, including oil and gas leases, wetlands protec�on, water quality, energy conserva�on, sustainability issues, and land use planning. We encourage sustainable use and stewardship of natural resources through advocacy, educa�on, informa�on, and collabora�on. We thank you for this opportunity to comment on Hilcorp Alaska, LLC’s Spacing Excep�on Applica�on for an exploratory well near Anchor Point. We are very concerned about the issues poten�al exacerba�on of bluff erosion near the Sterling Highway and the poten�al contamina�on of underground water sources. These issues were raised by private property owners adjacent to the proposed well site. We could locate no public source of environmental informa�on on either the groundwater in the area or the proposed well loca�on or the extent of bluff erosion in the area. In addi�on, the small scale of the map made it extremely difficult to find the exact loca�on of the proposed drill site in rela�on to streams and wetlands that might also be subject to poten�al contamina�on in the event of a spill or a slope failure. The proposed exploratory well would be the third one north of the Anchor River in the Whisky Gulch Prospect. Whiskey Gulch 14 also involved a request for a spacing waiver which was granted by the Commission. AOGCC acknowledges in the Public No�ce that “applica�ons for excep�ons to the default well spacing requirements are not unusual,” and says that it “carefully evaluates each applica�on, and typically grants them only when actual geologic condi�ons demonstrate that the proposed subsurface loca�on of a well is necessary to reach otherwise unreachable oil or gas and that both the rights of adjacent landowners and underground drinking water can be protected.” The Public No�ce also notes that it does not have extensive authority over surface impacts such as noise, emissions, or construc�on. . Although the defini�on of construc�on might be stretched to include erosion as a consequence of the drilling the well, the Public No�ce does not say the Commission has no authority over these impacts. It’s in the interest of adjacent landowners and the public that the poten�al for slope failures in proximity to a public highway be evaluated based on site-specific data. The Kachemak Bay Conservation Society's mission is to protect the environment of the Kachemak Bay region and greater Alaska by encouraging sustainable use and stewardship of natural resources through advocacy, education, information, and collaboration. 2 We understand that some por�ons of the oil and gas permit applica�ons are kept confiden�al. In the por�on of the applica�on available to the public, it appears that no informa�on was requested or provided from the applicant concerning the expressed concerns. We believe it is the responsibility of the Commission to disclose any site-specific data they have concerning these poten�al impacts, apply them during their decision process, and require applicants to gather and provide it where public sources of data are lacking to inform the public review process of requests for spacing waivers. In the case of the Whiskey Gulch wells, this applies to the development of spacing requirements for the en�re Whiskey Gulch field. Sincerely, Roberta Highland President, Kachemak Bay Conservation Society 4 CAUTION: External sender. DO NOT open links or attachments from UNKNOWN senders. From:Cody Terrell To:Davies, Stephen F (OGC) Cc:Dewhurst, Andrew D (OGC); Guhl, Meredith D (OGC); Carlisle, Samantha J (OGC) Subject:RE: [EXTERNAL] RE: Whiskey Gulch 15 Spacing Exception Date:Tuesday, December 12, 2023 2:17:31 PM This is helpful, thank you again Steve. Regards, Cody T. Terrell Landman Hilcorp Alaska, LLC Direct: 907-777-8432 Cell: 832-422-2003 This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. From: Davies, Stephen F (OGC) <steve.davies@alaska.gov> Sent: Tuesday, December 12, 2023 2:16 PM To: Cody Terrell <cterrell@hilcorp.com> Cc: Dewhurst, Andrew D (OGC) <andrew.dewhurst@alaska.gov>; Guhl, Meredith D (OGC) <meredith.guhl@alaska.gov>; Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> Subject: [EXTERNAL] RE: Whiskey Gulch 15 Spacing Exception Cody, To answer your questions about the Whiskey Gulch 15 spacing exception process: Q: …it is my understanding that AOGCC can make a decision on Hilcorp’s request anytime after the 30-day public notice/comment period ends. Can you confirm that this is true? A: Yes, if no member of the public requests a hearing and AOGCC’s Commissioners decide that they have enough information in the record and in AOGCC’s public files to reach a decision without holding a hearing, then the hearing can be vacated and the decision order can be issued after the 30-day public comment period ends. Q: Do you have an idea on the timeline for AOGCC’s decision on WG 15 spacing exception? A: I can’t provide a timeline for the WG 15 decision order as there are many scheduling variables, especially with the Holidays approaching. However, per the Notice of Public Hearing for WG 15: “Comments must be received no later than 4:30 p.m. on December 28, 2023, except that, if a hearing is held, comments must be received no later than the conclusion of the January 23, 2024, hearing.” According to AOGCC’s Events web page, the WG 15 hearing tentatively scheduled for January 23rd has been vacated, so I believe that issuing the decision order shouldn’t conflict with CAUTION: This email originated from outside the State of Alaska mail system. Do not click links or open attachments unless you recognize the sender and know the content is safe. Hilcorp’s planned January 12th spud date. I will let you know if AOGCC needs any additional information. Regards and Be Well, Steve Davies AOGCC CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Steve Davies at 907-793-1224 or steve.davies@alaska.gov. From: Cody Terrell <cterrell@hilcorp.com> Sent: Tuesday, December 12, 2023 10:56 AM To: Davies, Stephen F (OGC) <steve.davies@alaska.gov> Subject: Whiskey Gulch 15 Spacing Exception Hi Steve, Thank you for helping me fill in some of the unanswered questions regarding Hilcorp’s spacing exception request for Whiskey Gulch 15 (WG 15) and Cottonfield 06 (CF 06). Yesterday you informed me that the WG 15 tentative hearing was vacated. The 30-day public notice period ends on December 15, 2023. As we discussed yesterday, it is my understanding that AOGCC can make a decision on Hilcorp’s request anytime after the 30-day public notice/comment period ends. Can you confirm that this is true? Also, our original plans were to drill CF 06 first then WG 15. However, Since the hearing for CF 06 will be held and it will be sometime after the planned spud date, we have decided to switch the drill date. We plan to spud WG 15 on or around January 12, 2024. I assume since the 30-day public notice period ends December 15 that getting the spacing exception for WG 15 before January 12, 2024 shouldn’t be an issue. Do you have an idea on the timeline for AOGCC’s decision on WG 15 spacing exception? Any info on this will help us with planning. Lastly, if there is any additional information or questions that AOGCC has for Hilcorp to help move the process along quickly please let me know. I will get them answered ASAP. Regards, Cody T. Terrell | Landman | Hilcorp Alaska, LLC O: 907-777-8432 | C: 832-422-2003 | cterrell@hilcorp.com 3800 Centerpoint Dr., Suite 1400 | Anchorage | Alaska | 99503 This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. 3 CAUTION: This email originated from outside the State of Alaska mail system. Do not click links or open attachments unless you recognize the sender and know the content is safe. From:Cody Terrell To:Davies, Stephen F (OGC) Cc:Carlisle, Samantha J (OGC); Chris Kanyer; Sean McLaughlin; Aaron O"Quinn; Monty Myers; John Salsbury Subject:Whiskey Gulch 15 & Cottonfield 6 Spacing Exception Request Date:Thursday, November 16, 2023 4:34:29 PM Attachments:CO-23-016 Public Hearing Notice Whiskey Gulch 15 Spacing Exception.pdf CO-23-015 Public Hearing Notice Cottonfield 6 Spacing Exception.pdf Hi Steve, I received the attached public hearing notices today for both our Cottonfield 6 (CF 6) and Whiskey Gulch 15 (WG 15) wells. The hearing for CF 6 is scheduled out over 2 months from now on January 18, 2024, and the WG 15 hearing is scheduled for January 23, 2024. This was a surprise as we typically see hearings scheduled within 30-40 days of public notice being posted, as detailed in 20 AAC 25.540. I understand AOGCC will have various staff members out of the office on vacation over the next couple months which makes it difficult to get a hearing on the books and to even get the spacing exception drafted, reviewed, and granted. Hilcorp plans to drill the CF 6 well on or around 1-11-24 and the WG 15 on or around 2-14-24. This means we would not get the spacing exception in time for CF 6 since the hearing is scheduled after the anticipated spud date, and we likely wouldn’t get the WG 15 spacing exception prior to the anticipated spud date as well. This delay would require us to put our drilling operations on hold for the start of 2024 waiting on an approved spacing exception. To avoid serious delays in Hilcorp’s drilling operations, I am requesting that AOGCC grant Hilcorp the permit to drill for CF 6 and WG 15, in accordance with 20 AAC 25.005, prior to the spacing exception being granted. This would allow Hilcorp to drill the well and stay on schedule, but would not be allowed to open the wellbore of the wells until a spacing exception is granted. I understand that this procedure was often done in the past, but it is no longer common practice within AOGCC. However, this is a special circumstance that could cause serious delays in Hilcorp’ s drilling operations if this request is not granted, during a time where gas supply in the Cook Inlet area is in high demand. By accommodating this request, AOGCC would be operating within the regulations specified in 20 AAC 25.055(a). In relevant part, subsection (a)(2) provides: (a)(2) For a well drilling for gas, a wellbore may be open to test or regular production within 1,500 feet of a property line only if the owner is the same and the landowner is the same on both sides of the line. The WG 15 and CF 6 wells would not “be open to test or regular production” at any point prior to a spacing exception being issued. Please let me know if you have any questions. I appreciate your time on this and thank you in advance. Regards, Cody T. Terrell | Landman | Hilcorp Alaska, LLC O: 907-777-8432 | C: 832-422-2003 | cterrell@hilcorp.com 3800 Centerpoint Dr., Suite 1400 | Anchorage | Alaska | 99503 This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. The information contained in this email message is confidential and may be legally privileged and is intended only for the use of theindividual or entity named above. If you are not an intended recipient or if you have received this message in error, you are herebynotified that any dissemination, distribution, or copy of this email is strictly prohibited. If you have received this email in error, pleaseimmediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently deletethis message. While all reasonable care has been taken to avoid the transmission of viruses, it is the responsibility of the recipient to ensure that theonward transmission, opening, or use of this message and any attachments will not adversely affect its systems or data. No responsibilityis accepted by the company in this regard and the recipient should carry out such virus and other checks as it considers appropriate. 2 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION RE: Docket Number: CO-23-016 Hilcorp Alaska, LLC’s Spacing Exception Application for Exploratory Well Whiskey Gulch 15 Whiskey Gulch Prospect near Anchor Point, Kenai Peninsula Borough, Alaska Hilcorp Alaska, LLC (Hilcorp) by letter received November 15, 2023, filed an application with the Alaska Oil and Gas Conservation Commission (AOGCC) for an exception to the spacing requirements of 20 AAC 25.055 to drill, complete, test, and produce the Whiskey Gulch 15 exploratory well in an Undefined Gas Pool within 1,500 feet of a property line where the owners and landowners are not the same on both sides of the line, pursuant to 20 AAC 25.055(d). Surface Location: 1,496’ FSL, 1,605’ FEL, Section 23, T04S, R15W, Seward Meridian (SM) Bottom Hole Location: 2,361’ FNL, 372’ FWL, Section 23, T04S, R15W, SM Well spacing regulations protect the oil and gas rights of adjacent landowners and maximize resource recovery by establishing default limits on how close, under the land's surface, oil and gas wells can be to property lines where ownership changes hands. These limits are set forth in a regulation, 20 AAC 25.055. Operators must abide by the default limits unless they apply for, and obtain, an exception to those limits. Although exceptions to the default limits are not unusual, AOGCC carefully evaluates each application, and typically grants them only when actual geologic conditions demonstrate that the proposed subsurface location of a well is necessary to reach otherwise unreachable oil or gas and that both the rights of adjacent landowners and underground drinking water can be protected. As a general matter, AOGCC does not have extensive authority over surface impacts such as noise, emissions, or construction. This notice does not contain all the information filed by Hilcorp. To obtain more information, contact the AOGCC’s Special Assistant, Samantha Carlisle, at (907) 793-1223 or samantha.carlisle@alaska.gov. A public hearing on the matter has been tentatively scheduled for January 23, 2024, at 10:00 a.m. The hearing, which may be changed to full virtual, if necessary, will be held in the AOGCC hearing room located at 333 West 7th Avenue, Anchorage, AK 99501. The audio call-in information is (907) 202-7104 Conference ID: 461 941 614#. Anyone who wishes to participate remotely using MS Teams video conference should contact Ms. Carlisle at least two business days before the scheduled public hearing to request an invitation for the MS Teams. 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 December 8, 2023. If a request for a hearing is not timely filed, the AOGCC may issue an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1223 after December 11, 2023. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, AK 99501 or samantha.carlisle@alaska.gov. Comments must be received no later than 4:30 p.m. on December 28, 2023, except that, if a hearing is held, comments must be received no later than the conclusion of the January 23, 2024, hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact Samantha Carlisle, at (907) 793-1223, no later than January 16, 2024. Brett W. Huber, Sr. Chair, Commissioner Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2023.11.16 12:37:54 -09'00' From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Public Hearing Notices (Hilcorp) Date:Thursday, November 16, 2023 2:44:59 PM Attachments:CO-23-015 Public Hearing Notice Cottonfield 6 Spacing Exception.pdf CO-23-016 Public Hearing Notice Whiskey Gulch 15 Spacing Exception.pdf CO-23-017 Public Hearing Notice Hilcorp DIU MPI 2-74 Spacing Exception.pdf Docket Number: CO-23-015 Hilcorp Alaska, LLC’s Spacing Exception Application for Exploratory Well Cottonfield 6 Cottonfield Prospect near Happy Valley, Kenai Peninsula Borough, Alaska Docket Number: CO-23-016 Hilcorp Alaska, LLC’s Spacing Exception Application for Exploratory Well Whiskey Gulch 15 Whiskey Gulch Prospect near Anchor Point, Kenai Peninsula Borough, Alaska Docket Number: CO-23-017 Hilcorp Alaska, LLC’s Spacing Exception Application for Development Well DIU MPI 2-74 Duck Island Unit near Prudhoe Bay, North Slope Borough, Alaska Samantha Carlisle Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 __________________________________ List Name: AOGCC_Public_Notices@list.state.ak.us You subscribed as: samantha.carlisle@alaska.gov Unsubscribe at: https://list.state.ak.us/mailman/options/aogcc_public_notices/samantha.carlisle%40alaska.gov Lisi Misa being ¿rst duly sworn on oath deposes and says that she is a representative of the An- chorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an o൶ce maintained at the afore- said place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues and not in supplemental form of said newspaper on AFFIDAVIT OF PUBLICATION ______________________________________ Notary Public in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES ______________________________________ 11/19/2023 and that such newspaper was regularly distrib- uted to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed________________________________ Subscribed and sworn to before me this 20th day of November 2023. Account #: 100869 ST OF AK/AK OIL AND GAS CONSERVATION COMMISSION 333 W. 7TH AVE STE 100, ANCHORAGE, AK 99501 Order #: W0041877 Cost: $402.7 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION RE: Docket Number: CO-23-016 Hilcorp Alaska, LLC’s Spacing Exception Application for Exploratory Well Whiskey Gulch 15 Whiskey Gulch Prospect near Anchor Point, Kenai Peninsula Borough, Alaska Hilcorp Alaska, LLC (Hilcorp) by letter received November 15, 2023, filed an application with the Alaska Oil and Gas Conservation Commission (AOGCC) for an exception to the spacing requirements of 20 AAC 25.055 to drill, complete, test, and produce the Whiskey Gulch 15 exploratory well in an Undefined Gas Pool within 1,500 feet of a property line where the owners and landowners are not the same on both sides of the line, pursuant to 20 AAC 25.055(d). Surface Location: 1,496’ FSL, 1,605’ FEL, Section 23, T04S, R15W, Seward Meridian (SM) Bottom Hole Location: 2,361’ FNL, 372’ FWL, Section 23, T04S, R15W, SM Well spacing regulations protect the oil and gas rights of adjacent landowners and maximize resource recovery by establishing default limits on how close, under the land’s surface, oil and gas wells can be to property lines where ownership changes hands. These limits are set forth in a regulation, 20 AAC 25.055. Operators must abide by the default limits unless they apply for, and obtain, an exception to those limits. Although exceptions to the default limits are not unusual, AOGCC carefully evaluates each application, and typically grants them only when actual geologic conditions demonstrate that the proposed subsurface location of a well is necessary to reach otherwise unreachable oil or gas and that both the rights of adjacent landowners and underground drinking water can be protected. As a general matter, AOGCC does not have extensive authority over surface impacts such as noise, emissions, or construction. This notice does not contain all the information filed by Hilcorp. To obtain more information, contact the AOGCC’s Special Assistant, Samantha Carlisle, at (907) 793-1223 or samantha.carlisle@alaska. gov. A public hearing on the matter has been tentatively scheduled for January 23, 2024, at 10:00 a.m. The hearing, which may be changed to full virtual, if necessary, will be held in the AOGCC hearing room located at 333 West 7th Avenue, Anchorage, AK 99501. The audio call-in information is (907) 202-7104 Conference ID: 461 941 614#. Anyone who wishes to participate remotely using MS Teams video conference should contact Ms. Carlisle at least two business days before the scheduled public hearing to request an invitation for the MS Teams. 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 December 8, 2023. If a request for a hearing is not timely filed, the AOGCC may issue an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1223 after December 11, 2023. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, AK 99501 or samantha.carlisle@alaska.gov. Comments must be received no later than 4:30 p.m. on December 28, 2023, except that, if a hearing is held, comments must be received no later than the conclusion of the January 23, 2024, hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact Samantha Carlisle, at (907) 793-1223, no later than January 16, 2024. Brett W. Huber, Sr. Chair, Commissioner Pub: Nov. 19, 2023 STATE OF ALASKA THIRD JUDICIAL DISTRICT 2024-07-14 Document Ref: TQADJ-JE8GE-PFZ3P-5OSWH Page 19 of 31 1 November 14, 2023 Jeremy Price, Chair Commissioner Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 RE: Brett Huber, Sr., Chair Commissioner Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Dear Commissioner Huber, Sr.: Hilcorp Alaska, LLC (“Hilcorp”), as sole working interest owner of the affected oil and gas leases, requests permission to drill, test, and produce the Whiskey Gulch No. 15 Well (“WG 15”) in the Whiskey Gulch Undefined Gas Pool within 1,500 feet of a property line where the owners and landowners are not the same on both sides of the line, pursuant to 20 AAC 25.055(d). To date, no Field specific pool rules have been established within the Whiskey Gulch Field. Therefore, statewide spacing regulation 20 AAC 25.055(a) is controlling. In relevant part, subsection (a)(2) provides: x 20 AAC 25.055(a)(2) For a well drilling for gas, a wellbore may be open to test or regular production within 1,500 feet of a property line only if the owner is the same and the landowner is the same on both sides of the line. WG 15 is a delineation well located approximately 2.5 miles north of Anchor Point, Alaska, within an exploration area known as the Whiskey Gulch Prospect, also referred to as the Whiskey Gulch Field. The Whiskey Gulch Field is located directly north of the Seaview Unit. WG 01 was the first exploration well drilled within the Field, which was completed in July 2021. The second exploration well, WG 14 was drilled and completed in April 2022. Both wells targeted unproven oil and/or gas reserves in the Sterling, Beluga, and Tyonek Formations within the Whiskey Gulch Undefined Oil and Gas Pools. There was some gas found in each well but neither are commercially viable at this time. WG 15 will be the third well drilled by Hilcorp in the Whiskey Gulch Field targeting unproven gas reserves in the Sterling, Beluga, and Tyonek Formations within the Whiskey Gulch Undefined Gas Pool. In accordance with 20 AAC 25.005, Hilcorp plans to submit an application for a Permit to Drill to AOGCC, prior to the commencement of drilling WG 15. This well will be drilled from the Whiskey Gulch Pad No. 1, with a spud date planned for January 15, 2024. The Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 907/777-8432 Fax: 907/777-8301 Email: cterrell@hilcorp.com By Samantha Carlisle at 9:40 am, Nov 15, 2023 Hilcorp Alaska, LLC Application for Spacing Exception Page 2 of 7 well path of WG 15 is located on a State of Alaska Lease (Tract 005, ADL 392666) and one private tract (Tract 007). In accordance with 20 AAC 25.055(d)(2), a map of the location of WG 15 and its relationship to adjoining properties, along with a tract ownership schedule, are attached to this application (see Exhibit A-1 and A-2). Hilcorp requests that Exhibits A-1 and A-2 are held confidential by AOGCC. The well’s location is further indicated as follows: Surface Location x Tract 005A (100% DNR Mineral Ownership – ADL 392666). o 100% Hilcorp Working Interest. o 1,496’ FSL, 1,605’ FEL o Section 23, T04S, R15W, S.M., AK. Bottom Hole Location x Tract 007 (100% Private Mineral Ownership). o 100% Hilcorp Working Interest. o 2,361’ FNL, 372’ FWL o Section 23, T04S, R15W, S.M., AK. This spacing exception is necessary because WG 15 will be open to test or regular production of gas in the Whiskey Gulch Undefined Gas Pool within 1,500 feet of a property line where the owners or landowners are not the same on both sides of the line (20 AAC 25.055(a)(2)). This well will be drilled to a Total Depth (“TD”) of 8,370’ MD and the Top of the Productive Horizon (“TPH”) will be from 1,500’MD to TD. WG 15 will target unproven gas reserves in the Sterling, Beluga, and Tyonek Formations that cannot be reached by conforming to applicable statewide spacing restrictions. Hilcorp owns 100% Working Interest in the affected oil and gas leases. The State of Alaska owns 100% of the mineral interest in the affected State of Alaska Lease (ADL 392666). The remaining affected tracts are 100% privately owned subsurface. Hilcorp has made and is continuing to make attempts to lease all landowner owners within Whiskey Gulch Prospect. However, there are various landowners who we have not been able to locate or are unwilling to participate in our exploration efforts. Hilcorp is committed to locating and contacting all landowners within the Whiskey Gulch Prospect and offer an option to participate in Hilcorp’s exploration plans. Following successful completion of WG 15, and prior to bringing the well online, Hilcorp plans to submit to the Department of Natural Resources, Division of Oil and Gas (“DNR”), an application to form the Whiskey Gulch Unit and Initial Participating Area (“PA”). Hilcorp understands there are complex ownerships involved in the Whiskey Gulch Prospect Area, and AOGCC is tasked with protecting all parties’ correlative rights. In order to protect the correlative rights of all owners and landowners, Hilcorp will allocate production in accordance with DNR’s instructions following successful completion and testing of the WG 15 well. Hilcorp Alaska, LLC Application for Spacing Exception Page 3 of 7 Hilcorp also proposes to allocate royalties to all leased owners / landowners based on their tract allocation percentage, mineral ownership, and lease royalty in accordance with DNR approvals. Hilcorp will establish and maintain—without cost to the non-participating owners / landowners—a single, interest-bearing escrow account (Escrow Account) for the non-participating owners / landowners. Hilcorp will provide AOGCC with documentation sufficient to show that the Escrow Account has been established and maintained in accordance with this spacing exception. For each non-participating owner / landowner in a given parcel within the productive area, Hilcorp will deposit in that Escrow Account an amount equal to the total of that non-participating owner’s / landowner’s interest percentage (allocation percentage) for those parcels multiplied by the production attributed to those parcels for the previous month multiplied by 0.125 (royalty rate) multiplied by the prevailing value for Cook Inlet gas published for that quarter by the Alaska Department of Revenue under 15 AAC 55.173(b). As a result, the correlative rights of all affected owners, landowners and operators will be protected by approval of this spacing exception. In accordance with 20 AAC 25.055(d)(1), a copy of this application was sent via certified mail to all affected owners and landowners within 3,000’ of WG 15’s entire wellbore (Exhibit B). Copies of the certified mail receipts have also been enclosed. No other affected operators or working interest owners exist. In accordance with 20 AAC 25.055(d)(3), an affidavit is attached to this application stating the undersigned is acquainted with the facts and verifying that all facts asserted herein are true (Exhibit C). Should you have any technical questions, please contact Mr. John Salsbury, Senior Geologist, at (907) 777-8481, or you may contact the undersigned at (907) 777-8432. Sincerely, Cody T. Terrell, Landman Hilcorp Alaska, LLC Enclosures: Exhibit A-1: Whiskey Gulch No. 15 Well Map Exhibit A-2: Tract Ownership Schedule – CONFIDENTIAL Exhibit B: Certified Mailing List – CONFIDENTIAL Exhibit C: Affidavit CC: Owners & Landowners within 3,000’ of subject well Hilcorp Alaska, LLC Application for Spacing Exception Page 4 of 7 EXHIBIT A-1 Application for Spacing Exception Whiskey Gulch No. 15 Well Map CAUTION: This email originated from outside the State of Alaska mail system. Do not click links or open attachments unless you recognize the sender and know the content is safe. From:Cody Terrell To:Carlisle, Samantha J (OGC) Subject:WG 15 Spacing Exception Application Tracking Numbers Date:Wednesday, December 6, 2023 8:02:02 AM Samantha, I am not sure if I sent you the updated Whiskey Gulch tracking numbers for the public notice to landowners. See the tracking numbers below: ORDER SUMMARY SENT TO WG 15 Spacing Exception App Landowners 11-14- 23.pdf Arvid J. Hall, 629 W. 15th Ave, Anchorage AK 99501, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339575 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Carol D. Braun, 2795 Watergate Way, Kenai AK 99611, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339643 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Carolyn Ruth Jennings, 512 Loma Vista Ln, Skiatook OK 74070-2354, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339674 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Catherine R. Burton, 1236 Falcon Dr., DuneDin FL 34698, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339667 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Charles L. and Susan B. King, P.O. Box 1245, Anchor Point AK 99556, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339681 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Cook Inlet Region, Inc., Attn: Land 725 E. Fireweed Lane, Suite 800, Anchorage AK 99503, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339650 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Darcy McBride, 107 West Avenida Gaviota, San Clemente CA 92672, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339711 WG 15 Spacing Exception App Landowners 11-14- 23.pdf David Lennihan, 18170 Amonson Rd., Chugiak AK 99567, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339704 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Elizabeth A. Lynch, 18170 Amonson Rd., Chugiak AK 99567, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339759 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Estate of Douglas R. Doner, c/o Nancy K. Doner P. O. Box 111358, Anchorage AK 99511, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339735 WG 15 Spacing Exception App Landowners 11-14- 23.pdf George and Nelda Ronnekamp, 423 Liahona Cir, Sunrise Beach MO 65079, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339766 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Jennifer Lynn McGrady, P. O. Box 723, Kenai AK 99611, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339780 WG 15 Spacing Exception App Landowners 11-14- 23.pdf John W. & Harriet C. Rich, H/W, P.O. Box 588, Lynden WA 98264, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339797 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Karen Lee Adams, P. O. Box 56, Keedysville MD 21756, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339803 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Lance Grohall and Andrea M. Grohall, 9300 Buffalo Mine Rd., Palmer AK 99645, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339827 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Marc V. Zimmerman, 36225 Mere Cir., Soldotna AK 99669, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339810 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Marcia Yvonne Doner Living Trust, Marcia Y. and David W. Doner, Trustees PO Box 646, Anchor Point AK 99556, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339865 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Mary E. Host, 145 5th Avenue, Kalispell MT 59901, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339872 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Michael H. and Sara T. Diamond, h/w, P.O. Box 800, Anchor Point AK 99556, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339889 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Nancy K. Doner, P. O. Box 111358, Anchorage AK 99511, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339896 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Paul A. Peragine, 31195 Sterling Highway, Anchor Point AK 99556, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339902 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Ruff Canyon LLC, c/o Kyle D. Wuepper 15 SW Colorado Ave., Suite 3, Bend OR 97702, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339919 WG 15 Spacing Exception App Landowners 11-14- 23.pdf Russell E. Rucker, 1559 Karluk St., Apt #4, Anchorage AK 99501, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339926 WG 15 Spacing Exception App Landowners 11-14- 23.pdf State of Alaska, 550 West 7th Avenue, Ste. 800, Anchorage AK 99501, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339568 WG 15 Spacing Exception App Landowners 11-14- 23.pdf The M. Amy Batchelor Revocable Trust, c/o M. Amy Batchelor, Trustee 1823 Folsom St., Suite 205, Boulder CO 80302, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339599 WG 15 Spacing Exception App Landowners University of Alaska, c/o Laura Carmack 1815 Bragaw Street, Suite 101, Anchorage AK 99508, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT 11-14-23.pdf Tracking Information 92148901324734001936339582 WG 15 Spacing Exception App Landowners 11-14-23.pdf Vonnie M. Fry, 17175 Dorvel Ln., Anderson CA 96007, United States SINGLE SIDED CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001936339605 Regards, Cody T. Terrell | Landman | Hilcorp Alaska, LLC O: 907-777-8432 | C: 832-422-2003 | cterrell@hilcorp.com 3800 Centerpoint Dr., Suite 1400 | Anchorage | Alaska | 99503 This email may contain confidential and / or privileged information and is intended for the recipient(s) only. 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