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Home My WebLink AboutCO 812CONSERVATION ORDER 812 Cottonfield 6 1. September 11, 2023 Hilcorp oil and gas lease proposal 2. November 7, 2023 Hilcorp application for spacing exception 3. November 13, 2023 Public comment 4. November 16, 2023 AOGCC notice of public hearing 5. November 16, 2023 Hilcorp response to public hearing notice 6. November 21, 2023 Request for public hearing 7. November 21, 2023 Public comment and AOGCC response 8. January 8, 2024 Public comment regarding Hilcorp spacing request 9. January 16, 2024 AOGCC response to public comment 10. January 17, 2024 AOGCC response to public comment 11. January 17, 2024 KBCS letter to AOGCC 12. January 18, 2024 Hilcorp supplemental information 13. January 18, 2024 Hearing transcripts and presentation (confidential exhibits held in secure storage) 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 Cottonfield No. 6 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-23-015 Conservation Order 812 Cottonfield 6 Exploratory Gas Well Kenai Peninsula Borough, Alaska January 29, 2024 IT APPEARING THAT: 1. By letter received November 7, 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 Cottonfield No. 6 (Cottonfield 6) 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 Cottonfield Undefined Gas Pool, Cottonfield Prospect, Cook Inlet Basin. 2. Pursuant to 20 AAC 25.540, AOGCC tentatively scheduled a public hearing for January 18, 2024. On November 16, 2023, AOGCC published notice of the opportunity for that hearing on the State of Alaska’s Online Public Notice website and on AOGCC’s website, electronically transmitted the notice to all persons on AOGCC’s email distribution list and mailed printed copies of the notice to all persons on AOGCC’s mailing distribution list. On November 19, 2023, 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 Cottonfield 6 well trajectory and provided the notice, addresses to which the notices were delivered, and certified mail receipts to AOGCC. 4. Written comments were received by AOGCC from Logan Sale, Harold Hale, and the Kachemak Bay Conservation Society. Topics addressed in the comments were erosion and sloughing of the Kenai Peninsula bluff margin, emergency evacuation notification and routing, traffic issues, nearby school bus stops, nearby cell phone towers, septic systems, maintaining water quality in underground aquifers, streams, and nearby wetlands. 5. AOGCC received a request that the tentatively scheduled public hearing be held. The public hearing was held on January 18, 2024. Testimony was presented by representatives from Hilcorp and three members of the public. 6. Hilcorp’s application, the hearing record, AOGCC’s records, and public information provide sufficient information upon which to make an informed decision. CO 812 January 29, 2024 Page 2 of 5 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 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 Cottonfield 6 well (Permit to Drill Application No. 223- 113) located within Kenai Peninsula Borough on the east side of the Cook Inlet Basin, Alaska. This well is planned to be drilled in early 2024. Surface Location: 431’ FNL, 2,454’ FEL, Sec. 36, T03S, R15W, Seward Meridian (S.M.) Top Productive Horizon: 439’ FNL, 2,130’ FEL, Sec. 36, T03S, R15W, S.M. Bottom Hole Location: 493’ FNL, 218’ FEL, Sec. 36, T03S, R15W, S.M. 2. Cottonfield 6 is located on private land owned and operated by Hilcorp. 3. Because pool rules have not been established within the Cottonfield field, statewide default spacing rules apply. 4. This well will be directionally drilled from a surface location that lies about one-half mile east of the Kenai Peninsula bluff to a bottom-hole location that lies further inland, about 0.9 mile east of the bluff margin. 5. Cottonfield 6 is an exploratory well targeting unproven reserves within the Cottonfield Undefined Gas Pool potentially encompassing the Sterling, Beluga, and Tyonek Formations. 6. The well targets unproven gas reserves that cannot be reached by conforming to applicable statewide spacing regulations because of the size and location of Hilcorp’s property, the typically discontinuous and heterogeneous nature of fluvial reservoir sands in the Cook Inlet Basin, and their most prospective location on the subsurface structure. 7. According to the Water Estate Map available through the Alaska Department of Natural Resources’ (DNR) Alaska Mapper website, ten drinking water wells are registered with the State of Alaska within 1 mile of Cottonfield 6. All are all less than 150 feet deep, and eight of those wells are 90 feet or less. Surface casing will be set in Cottonfield 6 at about 1,000 feet depth and cemented to surface using industry standard practices. 8. Following successful completion of Cottonfield 6 well and prior to bringing the well online, Hilcorp intends to apply to the DNR to form a Unit and Initial Participating Area (PA). Due to the complexity of land ownership in the Cottonfield 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. CO 812 January 29, 2024 Page 3 of 5 9. Hilcorp proposes to allocate royalties by using a 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 the AOGCC that the Escrow Account has been established (for more details, see Hilcorp’s public Application for Spacing Exception received November 7, 2023). 10. Three members of the public provided testimony at the hearing: Logan Sale, Harold Hale, and Katherine Hale. 11. Mr. Sale, a nearby landowner, expressed concern that Hilcorp’s planned activities will cause erosion and sloughing of the bluff adjacent to the Cook Inlet coastline. This bluff lies about one-half mile to the west of the Cottonfield 6 surface location. 12. Mr. Hale, a nearby landowner, testified regarding several topics: notification in the event of an emergency, Hilcorp’s lack of meetings with local emergency responders, proximity of Cottonfield 6 to nearby cellular communication towers, bluff erosion and sloughing, potential blowout of colorless and odorless gases, possible presence of hydrogen sulfide (H2S) gas in Cottonfield 6, placement of the surface location of the well, hydraulic fracturing of the well, flaring of gas, and vague labeling on the location map that accompanied Hilcorp’s notification to owners, landowners, and operators. 13. Mrs. Hale testified that AOGCC’s notification for this public hearing in the Anchorage Daily News does not adequately reach people residing on the Kenai Peninsula. She advised that two local newspapers, Peninsula Clarion and Homer News, would be more appropriate. 14. Hilcorp’s representatives provided further testimony, stating that no shallow drilling hazards are expected for Cottonfield 6, H2S is also not expected, subsurface geology protects shallow groundwater aquifers, the location for the well was determined by surface topography and conditions, and that Hilcorp has a spill-response contingency plan (C-Plan) in place with the Alaska Department of Environmental Conservation (DEC) in the event of an emergency. Hilcorp also expressed their desire to work with the adjacent landowners and a willingness to discuss such issues further with them. 15. Supplementary written information provided by Hilcorp following the hearing and before the record closed states: a. The surface location for the well was dictated by local topography and wetlands; b. H2S is not present in this area of the Kenai Peninsula based on regional well data; c. Surface casing will be centralized, and excess cement will be circulated to surface to ensure good cement bond and coverage, and, if cement is not seen at the surface, Hilcorp will develop and implement a remedial cementing plan in conjunction with AOGCC; and d. Hilcorp has a Well Control Emergency Response Plan on file with the DEC, maintains a contract with Wild Well Control for emergency services, conducts periodic well- control exercises, and two members of Hilcorp’s safety team are part of the Kenai Peninsula Borough’s Local Emergency Planning Committee. CO 812 January 29, 2024 Page 4 of 5 16. AOGCC classifies Cottonfield 6 as an exploratory well. Following AOGCC’s longstanding practice for exploratory wells, mud logging operations are required from surface to total depth of the well. Mud logging operations include real-time detection, measuring, and recording of gases encountered downhole during drilling operations, including H2S. 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 Cottonfield Undefined Gas Pool in the Cottonfield 6 exploratory gas well to maximize ultimate resource recovery. 2. AOGCC’s jurisdiction is limited to subsurface drilling and production operations and well construction, including protection of shallow drinking water aquifers, potential blow outs, presence of H2S, hydraulic fracturing operations, and flaring of gas. While such comments are welcome in writing and at public hearings for informational purposes, AOGCC’s jurisdiction does not include regulation or monitoring of water quality in nearby streams or wetlands, emergency notifications, meetings with local emergency responders, traffic issues, school bus stops, proximity to communications infrastructure, septic systems, bluff erosion and sloughing, or placement of the surface location for a well. 3. The surface location for Cottonfield 6 on Hilcorp’s property was selected in accordance with local topography and wetlands. 4. It is not possible to place this well at a location within Hilcorp’s property that will not require a spacing exception. 5. Surface casing set at about 1,000 feet depth and cemented to surface using industry standard practices will protect shallow drinking water aquifers in this area. Such practices have a very high rate of success. If needed, remedial cementing operations will be performed with AOGCC approval. 6. Shallow drilling hazards and H2S are not expected in this area based on regional well data. Required mud logging operations while drilling will allow real-time detection and monitoring of subsurface gases, including H2S. 7. Hilcorp has no plans to hydraulically fracture Cottonfield 6. Hydraulic fracturing operations require separate approval from AOGCC. 8. Flaring of gas from Cottonfield 6 is regulated by AOGCC. 9. If successful, Hilcorp’s plans to form a Unit and PA with DNR, allocate royalties, and transfer all funds due to non-participants into an interest-bearing escrow account. This process will protect the correlative rights of all affected owners, landowners, and operators. No regular production can occur until AOGCC reviews the DNR’s Unit and PA decision documents and receives proof that Hilcorp has established an escrow account. 10. While AOGCC’s public notice for this hearing complied with and exceeded the statutory notice requirements in AS 31.05.050(b), AOGCC respects the public comments on this topic, and AOGCC’s practices for publication of public notices will be reviewed and improvements considered. Additionally, to ensure greater clarity, AOGCC will require enhancements to labeling of location maps that accompany an operator’s notices to affected owners, landowners, and operators. CO 812 January 29, 2024 Page 5 of 5 11. If constructed and operated as required, drilling, testing, completion, and regular production of Cottonfield 6 will not cause waste or result in an increased risk of fluid movement into freshwater. 12. Granting an exception to the well spacing provisions of 20 AAC 25.055 for Cottonfield 6 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 6, 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 Cottonfield 6 exploratory gas well within the Cottonfield 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 29, 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. Gregory Wilson Digitally signed by Gregory Wilson Date: 2024.01.29 12:16:45 -09'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2024.01.29 12:53:51 -09'00' Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2024.01.29 13:25:18 -09'00' From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Conservation Order 812 (Hilcorp) Date:Monday, January 29, 2024 2:44:05 PM Attachments:co 812.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 Cottonfield No. 6 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). 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 13 AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 ALASKA OIL AND GAS CONSERVATION COMMISSION In the Matter of Hilcorp's Application ) for a Spacing Exception for Cottonfield ) 6 Exploratory Well. ) __________________________________________) Docket No.: CO 23-015 PUBLIC HEARING January 18, 2024 10:00 o'clock a.m. Anchorage, Alaska BEFORE: Brett Huber, Sr., Chairman Jessie Chmielowski, Commissioner Greg Wilson, Commissioner AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 2 1 TABLE OF CONTENTS 2 Comments by Chairman Huber 03 3 Comments by Mr. Terrell 09 4 Comments by Mr. Salsbury 11 5 Comments by Mr. McLaughlin 14 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 3 1 P R O C E E D I N G S 2 (On record) 3 CHAIRMAN HUBER: I appreciate the attendance 4 today. This is a public hearing on docket number CO23- 5 015 for an exception to the spacing requirements of 20 6 AAC 25.055 to drill, complete, test and produce the 7 Cottonfield 6 exploratory well in an undefined gas pool 8 within 1,500 feet of a property line where the owners 9 and landowners are not the same on both sides of the 10 line pursuant to 20 AAC 25.055 subsection (d). This 11 proposed well will be located on the Kenai Peninsula 12 near the Sterling Highway about seven and a half miles 13 north of Anchor Point. Because this is an exploratory 14 well most engineering and geotechnical information 15 about the well is confidential under Alaska statute 16 31.05.035(c). So the amount of detailed information 17 about the well that can be discussed during this public 18 hearing is limited. However that said, it is our goal 19 to provide enough information for the public record to 20 support AOGCC's decision regarding Hilcorp's spacing 21 exemption application. 22 I'm Brett Huber, Chairman and member -- public 23 member of the Commission. With me to my left is Jessie 24 Chmielowski, petroleum engineer and to my right, Greg 25 Wilson, petroleum geologist. They occupy the seats AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 4 1 designated for their discipline. So we have a full 2 Commission seated today. 3 Today's hearing is being held in person and via 4 Microsoft Teams. The in person location is right here 5 at the AOGCC office at 333 West 7th Avenue, Anchorage. 6 For those on Teams I'd ask that you please be mindful 7 of background noise and make sure you're muted when 8 you're not testifying, please. 9 Also if you require any special accommodation 10 to participate in our hearing today please contact 11 Samantha Carlisle. She can be reached at 907-793-1223 12 or send her a message through the Microsoft Teams chat 13 icon and she'll do her best to get you all set. 14 Samantha, sitting right over there, will also 15 be recording today's hearing. Upon completion and 16 preparation of the transcript anyone desiring a copy 17 will be able to obtain it through Computer Matrix. 18 This hearing is being held in accordance with 19 Alaska statute 44.62 and 20 AAC 25.540 of the Alaska 20 Administrative Code. 21 The notice of hearing was published on the 22 state of Alaska online notices website as well as 23 AOGCC's website on November 16 -- excuse me, and sent 24 through the AOGCC email list serv on November 16th, 25 2023. All of those notices were on November 16. The AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 5 1 AOGCC also published the notice in the Anchorage Daily 2 News on November 19th. 3 To date the AOGCC has received public comments 4 on the matter from Mr. Logan Sale, Mr. Harold Hale and 5 Roberta -- Ms. Roberta Highland from the Kachemak Bay 6 Conservation Society. And those written public 7 comments are in our packets, the Commissioner's packet. 8 I'll give a little background on spacing 9 exemptions. Well spacing regulations protect the oil 10 and gas rights of adjacent landowners and maximize 11 resource recovery by establishing default limits on how 12 close under the land surface oil and gas wells can be 13 to property lines where ownership changes hands. 14 Absent specific pool rules statewide limits are set 15 forth in regulation 20 AAC 25.055. Operators must 16 abide by the statewide limit unless they apply for and 17 obtain an exception to these limits. Although 18 exceptions to these default limits are not usual or not 19 unusual, I'm sorry, the AOGCC carefully evaluates each 20 application and typically grants them only when 21 geologic conditions demonstrate that the proposed 22 surface location of a well is necessary to reach the 23 otherwise unreachable oil and gas and that both the 24 correlative rights of adjacent landowners and 25 underground drinking water can be protected. So those AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 6 1 correlative rights of landowners and the underwater 2 drinking -- underground drinking water. 3 As a general matter AOGCC does not have 4 extensive authority over surface impacts. Issues such 5 as noise, operating hours, emissions, traffic patterns 6 or first surface construction are often outside the 7 jurisdiction of the Commission. That being said I note 8 that the written public comments already received for 9 today's hearing are addressing a number of those issues 10 for which AOGCC does not have authority. However I 11 also understand that this hearing does provide an 12 opportunity for the public to express their views and 13 those views are important. It also provides 14 opportunity for the operator to hear the concerns of 15 your neighbors, also an important function. It builds 16 a public record that can be reviewed by other entities 17 that may have authority in areas of concern expressed 18 today. 19 At the close of today's hearing the AOGCC will 20 review the information presented, any additional 21 written comments received before the record is closed 22 and any additional information requested by the 23 operator during this hearing. Upon completion of that 24 review and our deliberations the AOGCC expects to issue 25 a written decision regarding this spacing exception for AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 7 1 Cottonfield 6. 2 Questions of the presenters today will come 3 from myself or my fellow Commissioners. However should 4 a member of the public or the -- whether you're in the 5 audience or at home, have a question that you believe 6 should be asked please submit that question in writing 7 to Samantha Carlisle. That can be done either through 8 the Teams' chat feature or in person just if you're in 9 the room today. She'll provide these questions to us 10 for review and if we feel that posing your question 11 will assist us in making the decision we'll ask it. In 12 any regard all questions will be included in the public 13 record. 14 I should note that we may take a break today or 15 a number of breaks should the Commissioners need to 16 consult with each other or confer with Staff. These 17 breaks help us to ensure that we've covered all the 18 relevant subject matter and developed a complete record 19 of which to base our deliberations as well as to 20 provide the most complete information to the public. 21 We'll begin today's hearing now after you've 22 sat through this rather lengthy preamble of important 23 information. As -- we'll begin today's hearing with 24 the presentation of the operator seeking the spacing 25 exception. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 8 1 Representatives from Hilcorp, are you ready to 2 begin your presentation? 3 MR. TERRELL: Yes, we are. 4 CHAIRMAN HUBER: Okay. Please state your names 5 and job titles clearly for the record. 6 MR. TERRELL: My name's Cody Terrell, I am the 7 landman for Hilcorp. 8 MR. SALSBURY: My name is John Salsbury, the 9 geologist working the Kenai assets for Hilcorp. 10 CHAIRMAN HUBER: Okay. It's now time to swear 11 in the witnesses. Will you please raise your right 12 hand and respond. 13 (Oath administered) 14 IN UNISON: Yes. 15 CHAIRMAN HUBER: Let the record reflect that 16 the witnesses all responded in the affirmative. 17 Do the two of you today wish to be recognized 18 as experts in your field? 19 MR. TERRELL: I don't think it's necessary 20 right now unless you do. If the Commission wants us to 21 we can, but..... 22 CHAIRMAN HUBER: Okay. Appreciate that. You 23 just have the opportunity. 24 Commissioner Chmielowski -- oh, I'm sorry. I 25 -- a couple -- well, we'll hit that in just a second. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 9 1 Commissioners, do you have anything to add at this 2 point? 3 COMMISSIONER CHMIELOWSKI: No, thank you. 4 COMMISSIONER WILSON: Nothing further from me. 5 Thank you. 6 CHAIRMAN HUBER: For those presenting please 7 keep in mind that you must speak -- you must first 8 activate your microphone using the button, get that 9 lighted green light and then speak into the microphone. 10 Also remember to reference your slides by either number 11 or title so that the public can follow along or that it 12 can be clear for the record. 13 With that, thank you both for being here and 14 I'd ask you to begin your presentation. 15 MR. TERRELL: I also want to note Sean, he's 16 behind us, he's our drilling engineer. He may come up 17 and present one of the slides too on wellbore design. 18 CHAIRMAN HUBER: No problem. Thank you. 19 CODY TERRELL 20 having been first previously sworn under oath, called 21 as a witness on behalf of Hilcorp, stated as follows. 22 MR. TERRELL: Okay. Here's our Cottonfield 6 23 well. This is the general location. 24 CHAIRMAN HUBER: One other thing. Please 25 remember to as you begin or transition speakers you AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 10 1 just identify yourself for the record. 2 MR. TERRELL: This is Cody Terrell. On slide 2 3 it's showing the general well location of our 4 Cottonfield 6 well. Down south at the very bottom of 5 the map here is Anchor Point. If you go further north 6 Ninilchik. It's just east of the Cosmo unit, onshore 7 east of the highway there. 8 Our spacing exception request was due to the 9 fact we needed a spacing exception because we're within 10 1,500 feet of property boundaries where ownership 11 changes and is different. We sent the request in on 12 November 7th, 2023. Notice was sent out as is required 13 to everybody, all the subsurface owners within 3,000 14 feet of the wellbore. 15 Hilcorp -- just a little background on Hilcorp 16 in the area. We started leasing back in September, 17 2022 which, you know, starts off with title research, 18 identifying subsurface owners, finding contact 19 information for them and then ultimately offer -- 20 making lease offers to everybody we could possibly get 21 in contact with who owns subsurface in the general 22 area. All the owners who wanted to participate and 23 wanted to lease, they're under lease, some we're still 24 kind of negotiating lease terms, stuff like that, but 25 in general everybody in the area's been offered an AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 11 1 opportunity to participate. 2 The wellbore itself is located on Hilcorp 3 surface and private subsurface, the entire wellbore is 4 on our Cottonfield pad. 5 (Teleconference interference - participants not 6 muted). 7 CHAIRMAN HUBER: Let me interrupt you for just 8 a second. I'm hearing some static or some kind of 9 background noise coming over the system. If somebody's 10 online and is -- it's not you guys, if somebody's 11 online that's not needed please check to make sure that 12 you're muted. 13 Thank you. 14 JOHN SALSBURY 15 having been first previously sworn under oath, called 16 as a witness on behalf of Hilcorp, stated as follows. 17 MR. SALSBURY: Okay. John Salsbury. So the 18 Cottonfield 6 well will be the first exploration well 19 drilled on the Cottonfield prospect by Hilcorp 20 targeting an undefined gas pool. We'd be drilling the 21 Sterling, Beluga and Tyonek formations going down to a 22 total depth of just over 7,300 feet measured depth. 23 And we assume the top of the productive horizon will be 24 around 1,500 feet down to TD successful. 25 Again so we are, you know, not conforming to AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 12 1 statewide spacing requirements. This well location is 2 determined using various sources of subsurface data and 3 we are drilling this well in this location to try to 4 see if we can verify the presence of a deep structure 5 targeting natural gas. 6 Following the completion of the well if 7 successful we plan to do some testing and possibly 8 flaring for no longer than 45 (indiscernible - no 9 audio) and that will be very similar to the Whiskey 10 Gulch 14 testing procedure that you guys are aware of. 11 COMMISSIONER CHMIELOWSKI: Just a question. 12 You say that due to special geologic conditions it 13 won't -- not conform to the spacing requirements. What 14 special geologic conditions? 15 MR. SALSBURY: Where we think the structural 16 high is located and the fluvial nature of the sands. 17 CHAIRMAN HUBER: For the public can you 18 describe what you mean by fluvial nature of the sands? 19 MR. SALSBURY: So in the Cook Inlet basin the 20 majority of the sediments that are producing natural 21 gas are fluvial in nature. That means deposited in, 22 you know, ancient marine -- ancient fluvial systems 23 which are river systems and not marine systems. So as 24 you can, you know, look at meandering point bars and 25 channels within the modern rivers that we see here, AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 13 1 Kenai, Susitna, Matanuska, you can see the 2 heterogeneous nature of those sands, how they are 3 discontinuous, form and meander belt just in the river 4 system or plain. So that's what I mean by the 5 discontinuous nature of fluvial sands in a marine 6 system, was deposited in the ocean. Think of a beach, 7 a barrier island complex, very homogenous. The 8 reservoir properties are continuous and similar for 9 miles. And in that, you know, instance you could place 10 the well a mile away and you hope a mile from that well 11 you would have similar reservoir properties. 12 COMMISSIONER CHMIELOWSKI: And Hilcorp is aware 13 that any flaring requests need an application to AOGCC? 14 MR. SALSBURY: We are. 15 COMMISSIONER CHMIELOWSKI: Okay. 16 MR. TERRELL: Any other questions on this slide 17 from anyone? 18 (No comments) 19 MR. TERRELL: Okay. We'll move on. Sean might 20 want to come up and talk on this slide. 21 COMMISSIONER CHMIELOWSKI: Oh, I did have one 22 more question. What is the -- the vertical depth of 23 the structure, the reservoir that you plan to test and 24 produce from? 25 MR. SALSBURY: Right around 7,000 feet. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 14 1 COMMISSIONER CHMIELOWSKI: That's MD, but what 2 about TVD..... 3 MR. SALSBURY: It's TVD. 4 COMMISSIONER CHMIELOWSKI: .....what is the -- 5 the vertical depth? 6 MR. SALSBURY: It's TVD. 7 COMMISSIONER CHMIELOWSKI: Oh, 7,000 feet TVD. 8 Okay. Up to 1,500 TVD? 9 MR. SALSBURY: It's a -- it is a directional 10 well, but the angle is -- is not. 11 COMMISSIONER CHMIELOWSKI: Oh. 12 MR. SALSBURY: About 19 degrees..... 13 COMMISSIONER CHMIELOWSKI: Okay. 14 MR. SALSBURY: .....so that -- that's why 15 the..... 16 COMMISSIONER CHMIELOWSKI: So five to 6,000 17 feet potentially of intermittent sands? 18 MR. SALSBURY: Hopefully. 19 COMMISSIONER CHMIELOWSKI: Okay. 20 MR. SALSBURY: Yes. 21 SEAN McLAUGHLIN 22 having been first previously sworn under oath, called 23 as a witness on behalf of Hilcorp, stated as follows. 24 MR. McLAUGHLIN: Good morning. My name is Sean 25 McLaughlin. I'm a drilling engineer for Hilcorp. We AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 15 1 are on slide number 5. The title of this slide is 2 Cottonfield 06 wellbore design. Intentionally this 3 slide is to give a high level overview of our 4 construction practices. First we ensure that our 5 construction practices meet or exceed the state 6 regulations which is listed on the slide, 20 AAC 25.030 7 which tells us that we need to protect the drinking 8 water for human consumption. Our surface casing design 9 is intended to provide sufficient protection between 10 hydrocarbons and the freshwater table. Regional well 11 data suggests the deepest freshwater is found at 150 12 feet. Our surface casing will extend to a thousand 13 feet. On the right-hand of the slide you have a 14 pictorial view of what the well would look like when 15 it's completed. There is currently a 16 inch conductor 16 in the ground to 120 feet. When we drill out that 16 17 inch conductor we will do so with freshwater spudmun 18 (ph) and we will drill to a depth of 1,000 feet at 19 which time we'll run 10 and three-quarters surface 20 casing. That surface casing will be fully cemented to 21 surface. After that we will drill out with a nine and 22 seven-eights hole. We will drill to a measured depth 23 of 4,500 feet and run seven and five-eights 24 intermediate casing and fully cement that casing back 25 to surface. And then we will drill out with a six and AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 16 1 three-quarter hole to TD and that will be our 2 production section on three and a half liner and three 3 and a half tubing to surface. So when we're done from 4 the inside out we will have three and a half tubing, 5 seven and a five-eights casing, fully cemented, 10 and 6 three-quarter casing fully cemented, to protect the 7 inside of the wellbore to the drinking water. And from 8 bottom up we will have cement across all hydrocarbon 9 bearing zones up to the freshwater. 10 COMMISSIONER CHMIELOWSKI: Thank you. Could 11 you please describe for the public how you ensure that 12 the surface casing was properly set and cemented? 13 MR. McLAUGHLIN: Sure. First the casing itself 14 is important. We are running TT-M21 which is a gas 15 tight connection. The casing design, it's about a 16 5,000 pound connection, we expect about a thousand 17 pound surface pressure so it has about a 3.5 safety 18 factor. Once that is in the ground we pump cement to 19 surface, we have visual confirmation of cement to 20 surface, the excess cement that we pump is about 50 21 percent. The volume of the cement we intend to pump is 22 oh, 109 barrels and we ensure that we (indiscernible - 23 away from microphone) the cement by seeing visual 24 cement to surface. We'll have cement from that 25 thousand feet surface casing shoe up to surface. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 17 1 Preventive to the public although we're 2 discussing the well at this hearing, the well will 3 actually be authorized by permit to drill which then 4 gives the Commission Staff an opportunity to review all 5 of the technical aspects, have any interactions with 6 the operator that they choose to, make their 7 recommendations and forward that on to the 8 Commissioners for their determination. 9 CHAIRMAN HUBER: Additional questions. Yeah, 10 so this is probably a question for Mr. Salsbury 11 regarding the determination of the depth of your 12 deepest subsurface drinking water. 13 MR. SALSBURY: Yes. So two different ways. A 14 regional study, I sent that to Steve yesterday, Sean 15 sent to that Steve, regional study done by the DNR with 16 regional exploration wells shows the base of the 17 freshwater drinking around 150 feet. So that's what 18 we've used in the past. We also had drilled several 19 stratigraphic wells that verify that on logs from 20 resistivity. 21 CHAIRMAN HUBER: Okay. I was going to say..... 22 MR. SALSBURY: I -- I sent that to Steve as 23 well. 24 CHAIRMAN HUBER: Yeah. I was going to say for 25 the benefit of the public describe how it's actually AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 18 1 determined, the -- the salinity is actually determined? 2 MR. SALSBURY: Using a resistivity log you can 3 calculate the formation, salinity of the water. 4 Resistivity measures the conductivity of the fluids in 5 the ground and from a quick calculation using Archie's 6 you can determine the salinity of parts per million of 7 various zones. 8 CHAIRMAN HUBER: And what's described by Mr. 9 Salsbury is a generally accepted practice within 10 industry to determine salinity of subsurface waters. 11 Also for the benefit of the public could you 12 describe vertical communication through the 13 stratigraphy or the lack thereof with concerns about 14 the drinking water again? 15 MR. SALSBURY: I cannot speak to that from a -- 16 that shallow. I cannot. So..... 17 CHAIRMAN HUBER: I mean, from your target depth 18 up to drinking water. 19 MR. SALSBURY: Oh. Oh, the target depth of 20 what we think is hydrocarbon bearing? 21 CHAIRMAN HUBER: Correct. 22 MR. SALSBURY: Yeah. So well below, you know, 23 1,500 feet is where we, you know, could start 24 encountering gas. So we have, you know, 1,300 feet of 25 separation from base of say freshwater or brackish AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 19 1 water to a possible accumulation of natural gas. Does 2 that answer your question? 3 CHAIRMAN HUBER: Yeah, I'm getting a -- trying 4 to elicit descriptions for the public that assures them 5 of either a communication..... 6 MR. SALSBURY: Okay. 7 CHAIRMAN HUBER: .....or a lack of 8 communication (indiscernible - simultaneous speech). 9 MR. SALSBURY: Definitely would have lack of 10 communication of a very large vertical section between 11 the freshwater aquifer at a hundred to 150 feet in 12 between what could be hydrocarbon bearing several 13 thousand feet lower. 14 CHAIRMAN HUBER: And the compartmentalization 15 is provided by? 16 MR. SALSBURY: Again the -- the geologic nature 17 of the deposition of those fluvial sands within the 18 Sterling and Beluga. 19 COMMISSIONER CHMIELOWSKI: So besides the 20 cement as a protection is there a confining zone in 21 between the hydrocarbons and, you know, a layer of -- 22 impermeable layer? 23 MR. SALSBURY: There are -- there are many, 24 yes. 25 CHAIRMAN HUBER: So it sounds like what you're AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 20 1 talking about is groundwater ending relatively shallow, 2 your target's not starting until after 1,500 feet and 3 having a thousand feet or so of rock in between those 4 two places..... 5 MR. SALSBURY: Yes, sir. 6 CHAIRMAN HUBER: .....with the addition of what 7 was described in the surface casing or for 8 communication protection? 9 MR. SALSBURY: Yes, sir. 10 COMMISSIONER CHMIELOWSKI: So previous wells I 11 have seen off the -- drinking water wells as deep as 12 300 in different areas, but do you have any knowledge 13 about the surrounding area and the depth of those 14 drinking water wells, have you conducted any sampling 15 or does Hilcorp plan to before and after drilling? 16 MR. McLAUGHLIN: As far as I did -- you know, 17 part of this meeting I looked up within a five mile 18 radius what are the deepest wells, water wells, 19 publicly available information, the ones we can find 20 publicly available. The deepest well I've saw was 200 21 feet and the water actually being produced from that 22 well was about 136 feet. I'm not positive, 130 -- 23 around a 136 feet. So and we don't plan on doing any 24 testing of water in the area, there's no requirement to 25 do so. Sometimes we're by rule required to do so if AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 21 1 there's fracking involved. There's not fracking 2 involved and this is all gas. So we don't typically do 3 that unless we're -- unless there's -- you know, unless 4 we're required to or there's an event that causes us to 5 do so. 6 COMMISSIONER CHMIELOWSKI: Okay. 7 CHAIRMAN HUBER: But there's nothing that 8 prohibits you from doing that if that's something that 9 you wish to do? 10 MR. McLAUGHLIN: That is -- well, that is 11 correct. We'd have to obviously get permission, right, 12 that would be something we would have to go get from -- 13 to get on people's property and test their wells, that 14 kind of stuff, but it's certainly possible. Yes. 15 CHAIRMAN HUBER: Well, I would hope that the 16 operator will take into account the public testimony 17 that we hear today. You have a plan now and you're 18 going to hear public testimony that -- that might make 19 a difference in your opinion. So just going to ask you 20 to listen carefully as we hear from the public. 21 MR. TERRELL: Of course. 22 COMMISSIONER CHMIELOWSKI: This whole core 23 (indiscernible) any idea about future drilling at this 24 point for Cottonfield? 25 MR. SALSBURY: At this point we do not. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 22 1 COMMISSIONER CHMIELOWSKI: Okay. 2 CHAIRMAN HUBER: You suggested that you 3 approached all of the landowners that may have 4 subsurface rights with the ability to be under 5 contract, but you have some that have chosen not to or 6 that you've not finished that. So how will that be 7 handled for those problems? 8 MR. TERRELL: Some of the owners, there's -- 9 there's various different situations. Some of the 10 owners and this happens quite a bit on the peninsula, 11 we just can't -- you know, they may have passed away 12 20, 30 years ago. We can't -- we can't find their 13 heirs, we can't find anybody -- if we do find heirs we 14 can't find where they're located. So there's that 15 issue where there's just people who can't be located 16 and we've kind of -- you know, we've exhausted all 17 resources possible to try to find people. There's 18 people who just don't want to participate, refusing to 19 participate and then there's people who are choosing 20 not to participate at this time, trying -- you know, 21 negotiating lease terms, that kind of thing, that we're 22 in the process of talking about. 23 What we plan on doing is, you know, by rule or 24 what we proposed is to, you know, similar to what we 25 did in Seaview and some of our other wells up in AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 23 1 Ninilchik is the escrow account, start an escrow 2 account and put the -- the proceeds for those unleased 3 interests into an escrow account until an agreement is 4 -- until we come to an agreement with the landowners. 5 CHAIRMAN HUBER: And that escrow account would 6 be established when? 7 MR. TERRELL: When -- when -- before 8 production. We would have to have one established 9 before -- we haven't found any production yet. So it 10 has not been established yet, but of course we -- if we 11 find production we would have to, you know, establish 12 an escrow account and then proceeds would then be put 13 into that account. 14 CHAIRMAN HUBER: And then when are those 15 proceeds -- when are those payments to the escrow 16 account? 17 MR. TERRELL: Monthly typically. Monthly 18 payments. Just like royalty payments to -- to our 19 leased owners would be monthly as well. 20 CHAIRMAN HUBER: And how will you allocate 21 production to those individual tracts? 22 MR. TERRELL: Based on the approved 23 participating area. Typically in these situations once 24 a discovery -- assuming we discover commercial gas we 25 would form a unit and a PA and the PA is called a AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 24 1 participating area which would be a boundary around 2 what's being produced and the owners within that area, 3 you know, whatever their proportionate -- their acreage 4 contributed to the PA itself. It's called a tract 5 allocation percentage. We would take the tract 6 allocation percentage based on the royalty rate and the 7 mineral ownership. And then you would get the 8 landowner's net revenue interest for every tract and 9 every owner. And that's all approved by DOG in 10 our..... 11 CHAIRMAN HUBER: So as you rightly noted 12 production won't be authorized until that PA and DNR 13 approves the PA or the participating area, right, and 14 then it'll come back for AOGCC's review of DNR's 15 decision? 16 MR. TERRELL: That is correct. But sometimes 17 DNR authorizes production other ways through tract 18 operations like we did in Pearl where we produced on a 19 tract operation basis, allocated production to a tract 20 op until a PA was approved. It ended up being a 21 lengthy process. That's not typical. Typically we move 22 to form a PA pretty quickly, get it approved and that 23 is pretty typical is a PA's approved before production. 24 Sometimes that's not the case, there are other ways to 25 get approval from DNR through tract operations. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 25 1 CHAIRMAN HUBER: Thank you. That's additional 2 helpful information. 3 COMMISSIONER CHMIELOWSKI: Not at this time. 4 Thanks. 5 COMMISSIONER WILSON: I've got nothing 6 additional at this time. 7 CHAIRMAN HUBER: Gentlemen, thank you all for 8 your presentation. You're going to remain for the 9 balance of the hearing today I'm assuming. 10 (No comments) 11 CHAIRMAN HUBER: So that brings us to an 12 important component of our hearing today and that's the 13 public testimony component. In the room today we 14 currently show Logan -- Mr. Logan Sale, Harold Hale, 15 Greg Markson, you've not -- you've said you're not 16 testifying, and Catherine Hale. Is that correct, do we 17 have anybody in addition that would like to be added to 18 the public testimony in the room? 19 MS. CARLISLE: (Indiscernible - away from 20 microphone) on the phone (indiscernible away from 21 microphone). 22 CHAIRMAN HUBER: Getting there. So the phone 23 -- the room's a little bit easier. We have a list, we 24 have the people here. On the phone we have folks that 25 may be participating that want to, but have no way of AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 26 1 signing up to a sign in sheet. So we're going to begin 2 with the folks in the room today and then we'll go to 3 the people on the phone. When we get to the people on 4 the phone it's just a little bit clunkier in that we 5 don't have that list in front of us so we'll ask people 6 to unmute, identify themself, we'll go through that 7 process when we get there. But we'll -- let's begin 8 today's testimony. Gentlemen, you're good. 9 Let's begin today's testimony with Mr. Logan 10 Sale. 11 And anybody providing public testimony in the 12 room or on the phone, if they would state their name 13 and affiliation and please spell the name for the 14 record to make sure that we get it right. 15 MR. SALE: My name is Logan Sale, L-O-G-A-N. 16 Last name is S-A-L-E. I am one of the affected 17 landowners. 18 CHAIRMAN HUBER: Thank you. You may begin your 19 testimony. 20 MR. SALE: I'm not -- using Hilcorp's map 21 there's a large section of landowners basically along 22 the bluff. Our main concern was erosion. While they 23 assure us that their drilling will not aggravate that, 24 the previous Bluecrest drilling a few miles south of us 25 tend -- resulted in several feet of loss for most of AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 27 1 the landowners on this section. And we're concerned 2 that this drilling will be less than a mile away from 3 us that we may suffer more erosion as a result of it. 4 And I know using their map from about 107 to about 86, 5 I don't think we have much in the way of people that 6 signed up. So I believe that's kind of the section of 7 landowners that are in objection. And that they can't 8 all be here today, it -- some people are on vacation, 9 others are out of state, it's the middle of winter. 10 So and I know that one of the -- one of the 11 landowners, I wish we had a couple of more of them, who 12 owns a number of those plots, I believe it's Ken, who I 13 don't -- I don't think was going to be able to attend 14 virtually either. What -- as -- we're not informed and 15 we're not participating. So we have a very large chunk 16 of the affected land -- these are the land -- these are 17 the parcels that have homes, they have wells, they have 18 people. Stuff to the east and south are mostly just 19 empty land. 20 COMMISSIONER CHMIELOWSKI: So, Mr. Sale, just 21 to make sure we're all understanding correctly. I 22 think it's on Hilcorp's slide 3, Samantha, has a map 23 and you're talking about those parcels 87 to 105 or 24 104? 25 MR. SALE: 107. So I believe the ones north of AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 28 1 that signed on to Hilcorp, but from 107 south I don't 2 have confirmation for the last couple ones at the 3 southern end, but I'm pretty sure we have most of the 4 land -- most of the landowners in between that did not 5 wish to sign up. 6 COMMISSIONER CHMIELOWSKI: And those landowners 7 that you're referring to are all properties along the 8 bluff? 9 MR. SALE: For the most part, yes. 10 COMMISSIONER CHMIELOWSKI: Yes. Okay. Thank 11 you. 12 CHAIRMAN HUBER: Mr. Sale, to the best of your 13 ability can you describe what activity associated with 14 the drilling would cause the bluff erosion? 15 MR. SALE: Can I describe it. I -- I am not a 16 geologist, but while they were drilling the bluff 17 erosion occurred at an accelerated -- because they had 18 a couple of sloughs which took chunks -- large chunks 19 of a couple of the properties including my own. So I 20 am concerned about future drilling close to me as a 21 result. 22 CHAIRMAN HUBER: Additional questions of Mr. 23 Sale. 24 COMMISSIONER CHMIELOWSKI: No, not at this 25 time. Thank you. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 29 1 CHAIRMAN HUBER: Mr. Sale, thank you for your 2 testimony today. I appreciate you taking the time and 3 traveling here for the meeting. And as you noted we do 4 have public written comment or written comment on the 5 record for you as well. 6 MR. SALE: And that's why I didn't feel that 7 you -- I didn't think you'd need me to go through every 8 single item I'd already brought up. 9 CHAIRMAN HUBER: Appreciate that. Thank you. 10 MR. SALE: Yeah. 11 CHAIRMAN HUBER: Next on my list we have Mr. 12 Harold Hale. If you'd like to come forward, Harold, 13 and put yourself on the record for us, please. Make 14 sure that bright green light's on on your microphone, 15 please. 16 MR. HALE: Okay. My name is Harold Hale. The 17 last name is spelled H-A-L-E. And I'm a landowner that 18 lives very close to the proposed well there. I have 19 submitted several comments before this, but my location 20 on the Sterling Highway is at Mile 148.6 and the edge 21 of the Hilcorp property at 148.8. And according to the 22 mission statement here that I read from -- from the Oil 23 and Gas Commission says that the wording is such that 24 the health, safety, fresh groundwaters and rights of 25 all owners there. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 30 1 So I'll limit my comments to health and safety. 2 The number of people that live along this section, 3 especially on the bluff side are elderly and probably 4 most are over 70. I'm 87, my wife is the same. We 5 have health and mobility issues particularly hearing 6 and sight problems. So in case of a blowout or any 7 explosive type events we would be at a disadvantage 8 because of hearing problems. People that have hearing 9 aids normally don't sleep with them in. They also -- a 10 lot of them turn off their cell phone, they're either 11 on a charger because they don't want to get 4:00 12 o'clock in the morning scam calls from the east coast. 13 So being aware of any emergency that would come over a 14 cell phone it would be a little difficult for most of 15 the people that live in that area. 16 So the emergency notification is via the cell 17 phone towers that are directly on the northwest corner 18 of Hilcorp's property there. They would be the first 19 thing impacted by fire or an explosive leak. So the 20 FCC says those are critical to emergency response all 21 over the US. So the fact that they're very close to 22 the -- to the wellhead I think is a concern. The local 23 emergency responders have not had any meetings with 24 Hilcorp, they haven't been contacted the last time I 25 talked to them which has been less than a couple of AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 31 1 weeks ago. So we haven't had any chance to discuss how 2 or when, you know, notification will be made. 3 The -- the slower -- the -- the problem with 4 the erosion on the bluff, we -- if we could bring up 5 the -- the request for us to sign our mineral rights, 6 if you would read that it indicates that they plan on 7 directional drilling, fracking, all those issues that 8 we have that would impact the bluff. I've lived there 9 for about 30 years and there's been two major sloughing 10 events associated with rain mainly. And all of the 11 properties between 148 and 149 have all experienced 12 some sloughing problems, most of them within 50 or a 13 hundred feet. And they've -- we've all taken 14 mitigation measures, regrading property for the flow of 15 -- water flow, piping roof water away from the -- the 16 slopes that have a tendency to drop. My house in 17 particular I've done two things. I've put in railroad 18 ties and filled in in front of my house because of the 19 flow sloughing that I -- I experience. 20 And I think that the fact that there might be a 21 blowout of colorless, odorless gas from this well, you 22 know, is a real concern and there hasn't been anything 23 brought up about the possibility of hydrogen sulfide. 24 Any my -- I have friends that work on the North Slope, 25 they say at certain well locations up there they wear a AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 32 1 hydrogen sulfide detector and carry breathing hoods. I 2 don't know whether the Cook Inlet gas area has any 3 hydrogen sulfide issues, but it's a heavy gas that lays 4 in low areas and can be very dangerous according to my 5 friends that work on the Slope up there. A couple of 6 good whiffs of it and you're incapacitated. So there's 7 a number of issues that -- you know, especially the 8 odorless, colorless gas that, you know, people -- every 9 lot along there on the bluff side has a dwelling on it 10 except one I think in that area, 148 to 149. 11 So there's a number of things that I object to. 12 Hilcorp's notification was very vague, there is no side 13 streets listed so that you can locate yourself on their 14 map. They don't even show the side streets like 15 Sonic's an avenue which goes down the north side of 16 their property or David Street which is on the south 17 edge. They don't even identify the Sterling Highway 18 with a mile post, anything to locate where you are. 19 And there's a lot of people I think -- I'm kind of a 20 map nut and I had a tough time, you know, kind of 21 locating the -- the area that they're working in there. 22 And there's one question, the seismic data is 23 not an exact science. They say that their seismic data 24 makes it necessary for them to drill exactly where they 25 were -- they're proposing to drill instead at the east AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 33 1 end of their property which would be much more as 2 desirable as far as the people, you know, on the west 3 side of the highway there. 4 And let's see. Like I say the demographics, 5 I've covered that. A meeting with the -- no meeting 6 with the local people. The cell towers, hydrogen 7 sulfide. 8 As far as they -- they have a geological 9 problem they say, you know, with -- they have to drill 10 there. Well, we have a geological problem with the 11 sloughing problem. And they -- the indicate in their 12 letter asking for mineral rights that they plan on 13 fracking, what do they call it, the hydraulic and 14 mechanical stimulation. I think that that's -- I think 15 that's fracking in anybody else's terms. So we are 16 faced with that down the road. And I would guess that 17 they will probably do that when they evaluate the 18 vertical well that -- to see, you know, whether it's 19 going to be a producer, you know, over a period of 20 time. So they'll flare gas and I wouldn't be surprised 21 if they would frack the vertical well too to see what 22 kind of production they can get out of it. 23 So I think I've covered most -- most of the 24 points that I wanted to make here. I do have public 25 comments. I think you're aware of some of my concerns AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 34 1 there. So I appreciate the time that you've given me. 2 Thank you very much. 3 CHAIRMAN HUBER: So, Mr. Hale, the thanks go 4 from the Commission to you. Thank you for taking the 5 time, making the drive to come provide testimony. We 6 may have a question or two if you have just an 7 additional moment, sir. 8 MR. HALE: Okay. 9 CHAIRMAN HUBER: Commissioner Wilson. 10 COMMISSIONER WILSON: I think maybe we should 11 give Mr. Salsbury an opportunity to address a couple of 12 things, shallow hazards, fracking, H2S. Do you care to 13 comment on some of the issues raised there? 14 CHAIRMAN HUBER: Perhaps what we should do is 15 -- well, would you be comfortable holding those 16 questions and those responses from Hilcorp until we 17 finish the public testimony and then we'll get through 18 that, through the questioning period. That way we have 19 -- everybody has an opportunity to put their concerns 20 on the record. 21 MR. HALE: One other thing. The -- the name of 22 this Cottonfield 6 I think is deceptive to a certain 23 degree because Cotton -- Cottonfield Avenue is a normal 24 term that everybody that lives down there uses for a 25 road that's now called Tall Tree which is a mile or so AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 35 1 away. And when I said that the map they provide has no 2 identifiable things on it so that a person can figure 3 out where they are, I think the title, you know, is 4 deceptive too because we're nowhere near Cottonfield 5 Avenue, you know, it's a mile away or so. 6 CHAIRMAN HUBER: Again, sir, we appreciate your 7 testimony and your significant history in the area. 8 Thank you. 9 MR. HALE: Thank you. 10 CHAIRMAN HUBER: Next slated to testify is Ms. 11 Catherine Hale. Same for you, ma'am, make sure that 12 that green button is lit and then if you'll spell -- 13 give us your name and spell it and your affiliation for 14 the record. 15 MS. HALE: Yes, I'm Catherine Hale, H-A-L-E and 16 I'm Harold Hale's wife. 17 The main point that I would like to make is 18 that communication has been nil. To have printed this 19 notification of this meeting in the Anchorage Daily 20 News which is not delivered anywhere to people on the 21 Kenai Peninsula and it's not available in publication, 22 you can get it online if you take it. There are two 23 newspapers printed on the Kenai Peninsula, the 24 Peninsula Clarion which is printed twice weekly and the 25 Homer News which is printed every Thursday. It kind of AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 36 1 would be a little more I think friendly or to make us 2 all aware of what's going on if that was printed in 3 something where the people that live there are aware of 4 it. 5 So that's my comment. Thank you. 6 CHAIRMAN HUBER: Thank you, Mrs. Hale. Is 7 there anybody else in the room that wishes to testify 8 today? 9 (No comments) 10 CHAIRMAN HUBER: Seeing none, we'll now go to 11 public testimony on the telephone. Samantha, we still 12 have people online; is that correct? 13 MS. CARLISLE: Yes. 14 CHAIRMAN HUBER: So again this is a little bit 15 more difficult in that we don't -- we're going to have 16 people talking over each other at the beginning to 17 determine whose turn is it next, right. Just go over a 18 couple things for public testimony. On Teams the code 19 to unmute yourself is pound -- is star, six. If anyone 20 has technical difficulties Samantha can be reached at 21 again at 791-1223 or you can call the AOGCC main number 22 at 279-1433. 23 We'll pause for 60 seconds to allow for people 24 to unmute. If somebody would like to be the first to 25 announce their name, I will try to call on the people AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 37 1 in the order as best we can and make sure that 2 everybody has an opportunity to testify. 3 So for those online, anybody online wishing to 4 testify now is the time to announce, please. 5 (No comments) 6 CHAIRMAN HUBER: Again asking for people online 7 that wish to provide testimony to the hearing today. 8 And we will wait for 60 seconds from this period to 9 make sure everybody has an opportunity and figure out 10 the system. 11 (No comments) 12 CHAIRMAN HUBER: One last call for folks online 13 that wish to provide testimony. 14 (No comments) 15 CHAIRMAN HUBER: At this time nobody from the 16 online audience has signaled that they wish to 17 testimony -- to give testimony and we've taken 18 testimony from those in the room wanting to testify so 19 we'll close the public testimony period at this point 20 and we'll turn it back over to the Commissioners if 21 they have additional questions. 22 COMMISSIONER WILSON: Yeah. So I think to 23 address some of the concerns that were raised by Mr. 24 Hale, if you'd care to address the potential of shallow 25 hazards, the blowout scenario, shallow hazards, the AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 38 1 fracking and potential for H2S at this location. 2 MR. SALSBURY: Okay. John Salsbury. Shallow 3 hazards, we do not expect any about 1,500 feet. The -- 4 we actually submitted a shallow hazard study for 5 several geographic wells about a year ago. Steve 6 Davies has that copy again. 7 We will not be fracking this well. We do not 8 intend to frack this well. So the reservoirs hopefully 9 have enough porosity where they will deliver if 10 stimulated. 11 And the H2S, I do not know the exact content of 12 the H2S in the gas stream, I believe it to be low, but 13 we could definitely follow-up with H2S content in 14 nearby gas fields if that is okay. 15 CHAIRMAN HUBER: No, that's fair. Mr. Terrell, 16 if you could address for the record without regard to 17 the subsurface geology on this lease, is there 18 somewhere that you could drill on that lease that would 19 not require a spacing exception nor hearing. 20 MR. TERRELL: So the short answer is no, 21 there's not. The -- but you could see how small these 22 parcels are. There's pretty much no way we can -- we 23 can put a well in here and avoid -- and be 1,500 feet 24 away from a property line. There's just so much mixed 25 ownership and that's common along the peninsula, you AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 39 1 know, up in Ninilchik, down in Anchor Point and 2 everywhere in between, it -- it's pretty common. I 3 wouldn't say it's common statewide, it's actually 4 private mineral ownership isn't really a common thing 5 in Alaska, but down in this area it is. So there's 6 just so much private ownership, there's -- we can't 7 really get 1,500 feet away from a property and still 8 target what we're trying to target. 9 CHAIRMAN HUBER: Does that answer..... 10 COMMISSIONER WILSON: Thank you. 11 CHAIRMAN HUBER: Okay. 12 COMMISSIONER WILSON: I just wanted you to 13 state that for the record, yeah. 14 MR. TERRELL: Okay. Thank you. 15 CHAIRMAN HUBER: And again those questions 16 aren't to put you on the spot, but this offers a great 17 opportunity for you to hear concerns from the public 18 and the public to hear from the operator about how they 19 feel about how they want to address those concerns. 20 So thank you for those answers. 21 Additional questions, Commissioners. 22 COMMISSIONER CHMIELOWSKI: No questions, but 23 perhaps a short recess. 24 CHAIRMAN HUBER: It is now about seven minutes 25 of 11:00 it looks like, eight minutes of 11:00. Let's AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 40 1 come back on the record at 11:15. Will that be enough 2 time or is that too much? 3 (No comments) 4 CHAIRMAN HUBER: We'll shoot for that, but 5 we'll be tight on the 11:15 time because breaks tend to 6 run over the time given. So with that we are on 7 recess. 8 (Off record) 9 (On record) 10 CHAIRMAN HUBER: .....during the break. 11 (Indiscernible - no audio). We're being recorded in 12 case anybody missed that. And we learned during break 13 that one of the gentlemen that testified earlier has a 14 few more comments that he'd like to add. 15 So, Mr. Hale, if you'd like to come back 16 forward and provide your additional comments we'd be 17 happy to hear them. And you don't need to hold that 18 button, sir, just punch it until it turns green and 19 then you can let go. 20 MR. HALE: Oh, okay. Okay. Yeah, the question 21 came up since Hilcorp built a drilling pad in mid 22 November roughly I think it was, on the site that 23 they're proposing to put their drill. What happens if 24 they decide to drill even if they don't get the 25 variance, what type of penalty are they facing? AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 41 1 CHAIRMAN HUBER: So, sir, the first thing that 2 I would say about that is that that would be an 3 unauthorized drilling operation, right, would be 4 treated like any other unauthorized drilling operation 5 which would be ordered to cease immediately and then we 6 have penalty provisions that allow up to $10,000 a day 7 and $100,000 per incident. 8 MR. HALE: So it's $10,000 a day that..... 9 CHAIRMAN HUBER: Up to $10,000 a day and 10 $100,000 per incident. And those penalty levels are 11 set by statute. 12 MR. HALE: Yeah. There's also the fact that 13 maybe I could walk over and point out a couple of 14 things on the map here. The July blowout on the North 15 Slope, all right, I think it was a ConocoPhillips, you 16 know, well that they had, took several weeks to seal 17 that blowout. And it was -- had multiple vents around 18 the wellpad according to the paper on it. And if we 19 get a blowout here our wells or most of them are at 55 20 and 85 feet and they're fairly shallow gravel layers 21 that the water flows in. And a blowout, I think 22 there's a possibility that a blowout could follow those 23 gravel layers to all of the wellheads. And so you 24 might have multiple vents for the gas and just about 25 everybody's well. It's a possibility. I don't know. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 42 1 I say that's..... 2 And the ignition sources for gas, every house 3 down there uses a flame type furnace, I mean, either 4 propane or oil. So there's plenty of ignition sources 5 if you get the right mix of gas, you know. And the 6 fact that it's odorless and colorless doesn't give 7 people much notice. And so any of that gas that's with 8 the right wind and, you know, atmospheric conditions 9 could end up over a bunch of houses with ignition 10 sources. So I personally think that instead of a 11 variance, you know, that -- that we need more than 12 1,500 feet to protect the owners in that area. Mainly, 13 you know, demographics, like say a lot of people 14 hearing and other mobility issues. 15 Thank you. 16 CHAIRMAN HUBER: Again, sir, thank you for your 17 testimony. We're going to have a few questions that 18 might address some of the things that you brought up 19 from a couple of the Commissioners. 20 And does anybody else wish to provide testimony 21 in the room? 22 (No comments) 23 CHAIRMAN HUBER: Let's come back to 24 Commissioners again for questions. 25 COMMISSIONER CHMIELOWSKI: I'll go first. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 43 1 CHAIRMAN HUBER: Sure. 2 COMMISSIONER CHMIELOWSKI: Okay. Let's see, 3 Mr. Terrell, a question about the tract operations you 4 mentioned earlier. Is -- does DNR do tract operations 5 when there's private surface and mineral ownership? 6 MR. TERRELL: They do. Typically a tract 7 operation is temporary, it's a one off. It's -- you 8 know, I -- I can use this as an example for -- in the 9 Ninilchik unit for the Pearl PA. There's several -- 10 there's various private owners in the Pearl PA. We 11 applied for it, DNR recommended we wait for a decision 12 until we drill additional wells, so the decision was 13 pending for over a year. During that time DNR allowed 14 us to produce the gas on a tract out basis where we 15 allocated production to a state lease. And once the PA 16 was approved we were required to go back and reallocate 17 all the royalties back to the private owners. So it 18 was a method to allow for gas production. Obviously, 19 you know, gas -- gas demand in the wintertime, that 20 kind of stuff, we were able to provide gas and produce 21 gas and then go back and -- and reallocate production 22 to private owners. So if private owners are involved 23 the tract operations, they're -- it's temporary, it's 24 not a usual thing. In almost every case you want to 25 form a PA. So that where we go. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 44 1 COMMISSIONER CHMIELOWSKI: And assuming the 2 well is drilled and successful, what is your timeline 3 to like full-time production, having facilities 4 installed, that sort of thing? 5 MR. TERRELL: I can't speak on that. John, do 6 you have any insight on that? 7 MR. SALSBURY: I don't. 8 MR. TERRELL: Sean. 9 MR. McLAUGHLIN: (No audible response). 10 MR. TERRELL: I don't -- I don't know. 11 COMMISSIONER CHMIELOWSKI: Are they here? 12 MR. TERRELL: I know we don't have any 13 facilities and we don't..... 14 COMMISSIONER CHMIELOWSKI: Right. 15 MR. TERRELL: .....have any method to bring it 16 on to production now. I imagine -- I don't know the 17 timeline, but we would have to put facilities in and 18 then construct a pipeline to bring it in to the -- to 19 the market. It wouldn't -- I don't know the timeline. 20 I don't. 21 COMMISSIONER CHMIELOWSKI: Just like a year, 22 more than a year, something like that? 23 MR. TERRELL: (No audible response). 24 COMMISSIONER CHMIELOWSKI: Okay. And, Mr. 25 McLaughlin, if you have a second, please. When you AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 45 1 speak, just so you know, it has to sound almost a 2 little bit loud, do I sound a little bit loud, so 3 people can hear you. For the surface casing 4 operations, I just wanted to just get a little more 5 detail there. The surface casing and cementing 6 operations you described, those are standard -- 7 industry standard, Hilcorp standard operation for 8 surface casing? 9 MR. McLAUGHLIN: Yes, they are. 10 COMMISSIONER CHMIELOWSKI: Okay. And what is 11 the success rate on these operations? 12 MR. McLAUGHLIN: If the success is judged by 13 cement to surface very, very high. I'm thinking about 14 the last 20 wells that we drilled in the area with this 15 type of surface casing configuration. I believe we've 16 gotten cement to surface every time. And if cement is 17 not visible at surface there's an option to perform 18 what we call a top job and that's to go in through the 19 16 inch conductor by 10 and three-quarter annulus and 20 top cement. So it's a very high rate of success that 21 we get cement where we intend to. 22 COMMISSIONER CHMIELOWSKI: Okay. So in every 23 case surface casings are properly cemented to protect 24 water? 25 MR. McLAUGHLIN: That is correct. AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 46 1 COMMISSIONER CHMIELOWSKI: Okay. That's all I 2 have. Thank you. 3 CHAIRMAN HUBER: Commissioner. Commissioner 4 Wilson. 5 COMMISSIONER WILSON: Yeah, first I think, Mr. 6 Terrell, if you might address the surface constraints 7 and why the surface location is where it is versus the 8 bottom hole location? 9 MR. TERRELL: The surface location may be -- 10 that might be a question for John, but what -- what we 11 -- it's usually based on the geologic subsurface, what 12 it's telling -- where it's telling us the optimal 13 location is to target what we want to target. So we 14 own this -- the -- that -- this whole property here is 15 Hilcorp surface. So we had options to kind of where -- 16 depending on what the subsurface tells us where we 17 could put this well. And that essentially determined 18 where we put it, was the subsurface. Because really 19 anywhere you move around here, this is just -- and the 20 map question, that was for the comments that were 21 brought up, this is subsurface ownership, these are not 22 the surface parcels. Because I -- this is the notice 23 map for the subsurface owners in the area, not the 24 parcels. There are actually quite a bit of private 25 parcels to the south and everywhere. So it's -- it was AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 47 1 almost impossible to avoid -- it was impossible to 2 avoid private parcels, we're surrounded by it. 3 COMMISSIONER WILSON: My question wasn't so 4 much the bottom hole target, the geology..... 5 MR. TERRELL: Uh-huh. 6 COMMISSIONER WILSON: .....as it was the 7 surface constraints, you know, why are you placing the 8 operation at surface where you are as opposed to 9 drilling a vertical well? 10 MR. TERRELL: Do you have any comments on that, 11 John, I..... 12 MR. SALSBURY: I'm probably not the expert on 13 this, but I do believe we are constrained with type of 14 soil and the lay of the land for pad construction. 15 MR. TERRELL: And the other comment to that is 16 if we -- if we move the pad anywhere on that property 17 we're going to be next door to somebody no matter where 18 we go. So it -- it's the -- could we move the pad 19 somewhere, I don't -- I can't speak on that, but if we 20 did we would still be surrounded by private parcels and 21 private landowners. It's just the nature of the area 22 and the ownership. 23 MR. SALSBURY: And from a drilling standpoint 24 that pad is centrally located. We don't know where 25 we're going to find the gas, but it gives us AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 48 1 opportunity in the future, we're chasing structural 2 highs right now based on the strat test, but we don't 3 know what's going to end up being the final well design 4 for this pad. It is just exploration, that pad's in a 5 good location, there's options in the future. 6 COMMISSIONER WILSON: Thank you. And 7 Commissioner Huber talked about what's within the 8 jurisdiction of the AOGCC at the beginning of the 9 hearing and not all of -- some of the issues that were 10 brought up today are within the control of the AOGCC. 11 And a good example of that is what's commonly referred 12 to as the C plan to address things like, you know, 13 uncontrolled flow of the well, the H2S and things like 14 that. And so the C plan, the contingency plan, is 15 available for every well. And I was curious if you 16 might care to comment a little bit on how that C plan 17 would maybe address some of the concerns. And I will 18 note that the C plan is under the jurisdiction of the 19 Department of Environmental Conservation, not AOGCC. 20 MR. TERRELL: Yeah. I don't know. I'm not the 21 expert on our C plan. I was told we do have one in 22 place, we're always required to have one in place. And 23 I don't know if it's publicly available or not, I'm 24 sure if you requested it it could be to the public. So 25 and that -- like you said the scope of the hearing is AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 49 1 about the spacing exception. We're -- I just wanted to 2 make the comment too, these hearings are very helpful 3 for us to hear public comment, obviously some concerns 4 and we take it very seriously. A lot of this -- a lot 5 of the stuff brought up today, there was quite a bit of 6 different topics, we're happy to address with whomever. 7 We're obviously -- we're all neighbors in that area and 8 to be a good neighbor we've always -- in the past we've 9 always worked with landowners and we will continue to 10 do so as much as we can. So some of these comments I 11 may not have the right expertise personally, I'm the 12 land subsurface leasing, sort of stuff like that, but 13 it -- we're happy to have discussions with -- with 14 anyone in the area about a lot of these -- these topics 15 that are outside the scope of the hearing concluding 16 today. 17 COMMISSIONER WILSON: Very good. Thanks. 18 CHAIRMAN HUBER: Further questions from the 19 Commissioners. 20 COMMISSIONER CHMIELOWSKI: I just wanted to 21 note that as part of the C plan there's an emergency 22 well control contingency plan that had to do with a 23 blowout scenario, whether it's a surface blowout or 24 like in the case of a subsurface blowout. Can you 25 confirm that Hilcorp has an emergency well control AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 50 1 contingency plan in place? 2 MR. TERRELL: We do. I was told we have one -- 3 we have a plan in place and we also have contractors on 4 call at all time just in case something was to happen. 5 COMMISSIONER CHMIELOWSKI: Okay. 6 MR. TERRELL: That much I do know. 7 COMMISSIONER CHMIELOWSKI: And do you know how 8 -- when it was last updated or revisited or is that 9 something you do as part of every exploration well is 10 take a look at that plan? 11 MR. TERRELL: I'm -- I'm not sure. 12 CHAIRMAN HUBER: So, Mr. Hale, I have to ask 13 you. If you have questions they need to be -- you need 14 to get them to Samantha, we need to review them. The 15 situation is not that testimony and public gets to 16 cross examine, right, that's our job up here. So..... 17 MR. HALE: (Indiscernible - away from 18 microphone). 19 CHAIRMAN HUBER: Okay. And I -- I appreciate 20 your comment, sir. I would also suggest that we'll 21 likely hold the record open until the end of today at a 22 minimum unless there's information to come back from 23 Hilcorp and then we might hold the record longer. So 24 if you want to provide any kind of rebuttal or your 25 comments to what you've heard today you'd have the AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 51 1 opportunity to do that then. 2 MR. HALE: (Indiscernible - away from 3 microphone). 4 CHAIRMAN HUBER: Thank you. 5 MR. HALE: (Indiscernible - away from 6 microphone). 7 CHAIRMAN HUBER: Further questions from the 8 Commissioners. 9 COMMISSIONER WILSON: Nothing from me. 10 COMMISSIONER CHMIELOWSKI: No. 11 CHAIRMAN HUBER: Just a couple quick comments 12 before we end today. First off I'd like to thank 13 everybody for your participation today. I'd like to 14 thank you for providing the documents and being here 15 and present and presenting and answering the questions 16 today representatives from Hilcorp. Special thanks to 17 the members of the public who took time to testify 18 today or provided written comment. Right, it -- it's 19 not your business, but it is your concern and this is a 20 forum that you're able to share those concerns. 21 I was happy to hear Hilcorp's comments about 22 the benefit of today's hearing and the benefit of 23 hearing these comments and your willingness to work 24 with those comments. So a couple things that I'd point 25 out. I heard today that better maps would be helpful, AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 52 1 that a map should be easily understood by the person 2 that's getting it, right. We deal in technical 3 terminology and technical mechanisms and things like 4 that that the general public's not necessarily and I 5 well know that as the public member that the general 6 public is not necessarily aware of. So whatever 7 clarity you could provide in those kind of maps in the 8 future. I heard that. 9 I also heard that there'd been -- according to 10 testimony that there had been no contact yeah, with 11 local EMS. And I would say after, you know, what we 12 heard today that's obviously some emergency concerns 13 from some of the area residents. 14 And I also heard Mrs. Hale's comments about 15 publication in the local paper and AOGCC will look into 16 that for future hearings. 17 So with that again thank you all for 18 participating. We will deliberate -- do we have any 19 additional information that we'd like to request from 20 Hilcorp? 21 COMMISSIONER CHMIELOWSKI: No, I don't think 22 so, but we'll keep the record open until the close of 23 business. 24 COMMISSIONER CHMIELOWSKI: Yeah. So the record 25 will stay open until the close of business today. At AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 53 1 the time the record closes then we go through the 2 process of reviewing what we heard or learned in 3 today's hearing, testimony that's brought up by the 4 public, the previous documents that have been submitted 5 and we'll go through all of that technical review 6 internally and then at some point in the near future 7 write an order on our determination from the hearing 8 today. 9 So again thank you all for participating. And 10 with that at 11:35 this hearing is adjourned. 11 (Hearing adjourned) 12 (END OF PROCEEDINGS) 13 14 15 16 17 18 19 20 21 22 23 24 25 AOGCC 1/18/2024ITMO: HILCORP'S APPLICATION FOR SPACING EXCEPTION Docket NO. CO 23-015 329 F Street, Ste. 222., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Computer Matrix, LLC Phone: 907-227-5312 Page 54 1 TRANSCRIBER'S CERTIFICATE 2 I, Salena A. Hile, hereby certify that the 3 foregoing pages numbered 02 through 54 are a true, 4 accurate, and complete transcript of proceedings in 5 Docket No.: CO 23-015, transcribed under my direction 6 from a copy of an electronic sound recording to the 7 best of our knowledge and ability. 8 9 _______________ _______________________________ 10 DATE SALENA A. HILE, (Transcriber) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Cottonfield 06 Spacing Exception Cody Terrell (Landman) John Salsbury (GEO) Sean McLaughlin (Drilling Engineer) January 18, 2024 AOGCC Public Hearing 2 Cottonfield Prospect Area Cottonfield 06 Well 3 Cottonfield 06 Spacing Exception Spacing Exception Request •Cottonfield 06 (“CF-06”) is within 1,500’ of property boundary where ownership is different. •Application request submitted request on 11/07/2023. •Notice of request was mailed to all landowners within 3,000’ of wellbore. •Starting in September 2022 Hilcorp began to identify private subsurface owners and began to make lease offers to all private owners in area. •All owners who wish to participate were afforded the opportunity to do so with standard oil and gas lease terms. •Wellbore located on 100% private subsurface & Hilcorp owned surface. Cottonfield 6 BHL 4 Cottonfield 06 Well Overview CF-06 Exploration Well •First exploration well drilled by Hilcorp within the Cottonfield Prospect •Targeting the Undefined Cottonfield Gas Pool (Sterling, Beluga, and Tyonek Formations). •Total Depth (“TD”) of 7,383’ MD. Top of the Productive Horizon will be from 1,500’MD to TD. •Due to special geologic conditions, the targeted sands in CF-06 will not conform to statewide spacing requirements. •Well location determined using various sources of confidential subsurface data to target and verify the presence of a deep structure. •Following completion of well and assuming success, testing and flaring will be conducted intermittently for no longer than 45 days. Cottonfield 06 BHL 5 Cottonfield 06 Wellbore Design Cottonfield 06 Wellbore Design Details •20 AAC 25.030(c)(3): surface casing must be set below the base of all strata known or reasonably expected to serve as a source of drinking water for human consumption, below the base of permafrost, and at a depth sufficient to provide a competent anchor for BOPE; •Surface casing is intended to provide sufficient protection between produced hydrocarbons and the freshwater table •CF-06 surface casing extends to 1,000’ below surface. •Nearest well data suggests deepest freshwater found at ~150. 12 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) Cc:Davies, Stephen F (OGC) Subject:Supplement the Public Record - CF-06 Spacing Exception Hearing Date:Thursday, January 18, 2024 3:51:00 PM Hi Samantha, As you know, the hearing for Hilcorp’s request for a spacing exception for the CF-06 exploration well was held today at 10 AM. Commissioner Huber stated that the record would remain open for the remainder of the day for additional comments to supplement the record. Hilcorp wanted to take this opportunity to supplement the record with additional information regarding the questions and concerns from the Commissioners and the public. The pad location for CF-06 was initially designed to be on the Eastern edge of the property just as Mr. Hale has suggested during today’s hearing. I confirmed with our engineers that the location was moved more toward the West where it currently sits due to issues with topography. There is a steep slope and drop of elevation as you move to the east of the property that significantly prohibited our options choosing pad location on the property. There was also the concern that there would be wetlands impact in the area to the East of the property which deterred us from constructing the pad in that area. Lastly, there are private parcels surrounding Hilcorp’s property making it impossible to avoid encroaching private landowners parcels. Mr. Hale is correct that no dwellings exist at this moment in time to the East of Hilcorp’s property, however, the property in that area is privately owned and encroachment would occur. Mr. Hale brought up the issue of possible Hydrogen Sulfide exposure. Hilcorp has various sources of data along the Kenai Peninsula in regards to oil and gas production and our data from regional wells indicate that Hydrogen Sulfide is not present in this area of the Kenai Peninsula. The Commission asked Hilcorp various questions about our wellbore design and cementing procedures to ensure protection of the underground freshwater table. It is in everyone’s best interest to ensure quality cement is placed across the surface casing interval. Excess cement will be pumped to ensure cement is brought to surface. Centralization will be used on the surface casing to ensure good cement bond and coverage. If cement does not reach surface Hilcorp will seize drilling operations and notify the AOGCC. Hilcorp would then develop and implement a remedial cementing plan prior to continuing drilling operations. Hilcorp is not aware of any ground water contamination from drilling operations spanning hundreds of wells and many decades along the Kenai Peninsula and the cementing and surface casing procedures are industry standard. Various members of the public expressed concerns about safety procedures in place in the event of a well blowout or other emergency situations. As part of the regulations under the C-Plan, we are required to hold a “blowout plan” and provide it to the Alaska Department of Environmental Conservation (ADEC) when they request it. ADEC in turn passes the plan (which in Hilcorp’s case is a Well Control Emergency Response Plan or WCERP) on to AOGCC. Internally, we update the WCERP annually and maintain a contract with Wild Well Control who would provide well control services for any well control events we need them for. We also exercise well control scenarios periodically and will be doing so this year in April down on the Kenai Peninsula. We will be having a well control workshop as part of that exercise. As far as community emergency planning, Leonard Dickerson and Jacob Nordwall with our safety team sit on the KPB Local Emergency Planning Committee and attend regular meetings. Harvest, Hilcorp’s subsidiary pipeline company, attends the last meeting of the year to advise first responders of status of pipelines as well. As I stated during today’s hearing, Hilcorp values the public hearings held by AOGCC and appreciates the comments from the AOGCC and public. We take all comments and concerns very seriously and will continue to work with the members of the public to try and mitigate any and all concerns as best we can. We are all local Alaskans here at Hilcorp Alaska, LLC and strive to be good neighbors before, during and after our operations. Please let us know if there are any other questions or concerns AOGCC would like us to address. 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 hereby notified that any dissemination, distribution, or copy of this email is strictly prohibited. If you have received this email in error, please immediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete this 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. 11 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 17, 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-23-015 Hilcorp Alaska, LLC’s Spacing Exception Application for Exploratory Well Cottonfield 6 Cottonfield Prospect near Happy Valley, 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 Happy, Alaska. We are very concerned about the issue of contamina�on of underground water sources that has been raised by private property owners adjacent to the other proposed exemp�on to the spacing regula�ons in Docket Number CO-23-015 We could locate no public source of environmental informa�on on the groundwater 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. 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.” 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 groundwater drinking water resources on Hilcorp property and beneath adjacent private proper�es. We believe it is the responsibility of the Commission to disclose any site-specific data they have concerning poten�al impacts, to apply them during their decision process, 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 and to require applicants to gather it where public sources of data are lacking to inform the public review process of requests for waivers. Sincerely, Roberta Highland President, Kachemak Bay Conserva�on Society 10 1 Davies, Stephen F (OGC) From:Davies, Stephen F (OGC) Sent:Wednesday, January 17, 2024 8:52 AM To:Logan Sale Cc:Huber, Brett W (OGC); Chmielowski, Jessie L C (OGC); Wilson, Greg C (OGC); Sherry, Patrick F (LAW) Subject:RE: Cottonfield 6 Spacing Exception - Public Comment Response Mr. Sale, I thought I had emailed this reply to you in mid‐December regarding your additional questions concerning the spacing exception record for Cottonfield 6. However, while reviewing AOGCC’s files in advance of the public hearing tomorrow, I didn’t find a copy of this in my correspondence. So, if I failed to email it to you then, please accept my apologies. Q: We are concerned about releasing them from liability for their offer of a few hundred dollars. I did not see any real mention of that in the regulations. Would your exception also compel us to absolve them of responsibility for damages? A: No, AOGCC’s jurisdiction includes protection of underground freshwater aquifers. Regarding surface impacts: Our regulations also apply to drill sites, which must be left in a clean and graded condition that is free of all materials, supplies, structures, installations, and loose debris. Please note that AOGCC has no jurisdiction over damages to roads. Q: My reading is that the purpose of an exception would be to handle complex ownership boundaries or to respond to the geological unknowns in the deposits. Would it be fair to say that it is not intended as a means to compel us to take 12.5% when the owners were aiming at 3‐8% higher payout? A: Yes, the exception is not intended to compel mineral rights owners to accept any agreement. It allows the Operator to drill, complete, test, and produce the well, but the rights of non‐participating mineral interest owners are protected by setting aside funds in an escrow account. Those funds will be distributed by the Operator when an agreement is reached between the mineral interest owner and the Operator. Public Hearing for the Cottonfield 6 exploratory well is tentatively scheduled for January 18 at 10AM. Further information can be found on AOGCC’s website at https://www.commerce.alaska.gov/web/aogcc/Events.aspx. Please let me know if I can help further. Regards, Steve Davies Senior Petroleum Geologist AOGCC From: Logan Sale <loganofsale@gmail.com> Sent: Monday, November 20, 2023 5:13 PM To: Davies, Stephen F (OGC) <steve.davies@alaska.gov> Subject: Re: Cottonfield 6 Spacing Exception ‐ Public Comment Response Mr. Davies, 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. 2 Thank you for your email. I will share the notice along with the details with the local stakeholders. Hilcorp did inform us of the meeting but not that we would need to request it, let alone in fairly short order. We will follow up on the environmental concerns with the other departments. After further reviewing the applicable statutes on your website there is still the issue of the liability. The wording of the documents provided by Hilcorp seem to grant them immunity from most liability for any of the damages we are concerned about. They made an offer to repair roads that are damaged. Water safety issues are noted so I suppose if they turn my well water into a flammable liquid there would be redress through AOGCC. We are concerned about releasing them from liability for their offer of a few hundred dollars. I did not see any real mention of that in the regulations. Would your exception also compel us to absolve them of responsibility for damages? A second area of concern for some is compensation levels. Many of our landowners have come from the fracking zones of the upper mountain west/great plains. Their refusals stem more from a regard that the terms offered were well below expectation for such a project. My reading is that the purpose of an exception would be to handle complex ownership boundaries or to respond to the geological unknowns in the deposits. Would it be fair to say that it is not intended as a means to compel us to take 12.5% when the owners were aiming at 3‐8% higher payout? I had not thought about the light or noise pollution. No one is objecting to the actual construction. We have several communications towers in the area so what is another blight? Existing lights from these towers tend to wreck auroras as it is. I do not think this area is covered by a noise ordinance however we will take note of the sound level. The intertidal zone of the creek is a major stopover point for migratory birds and falls well within the exception boundary. I'll pass that one to our bird person. ‐Logan Sale On Thu, Nov 16, 2023 at 3:38 PM Davies, Stephen F (OGC) <steve.davies@alaska.gov> wrote: Mr. Sale, My name is Steve Davies, and I am a geologist with the Alaska Oil and Gas Conservation Commission (AOGCC). The AOGCC would like to thank you for your thoughtful comments regarding Hilcorp’s application for a spacing exception order for the proposed Cottonfield 6 well. Our agency tries very hard to make our processes and information available to the public as clearly and easily as possible. To begin, your comments are part of the public record for this spacing exception amendment application and a copy will be forwarded to Hilcorp’s land department to make them aware of your concerns. Hopefully, that will be helpful for you. The public hearing regarding Hilcorp’s spacing exception application for the Cottonfield 6 well is tentatively scheduled for January 18, 2024. A Public Hearing Notice will be published in the Anchorage Daily News and on AOGCC’s website. I have attached a copy for your convenience. The AOGCC would like to extend an invitation to you to formally request that this hearing be held as scheduled. This hearing will provide you the opportunity to listen to Hilcorp’s testimony, to express your concerns, and to ask questions‐‐through AOGCC’s Commissioners‐‐about Hilcorp’s proposed operations. If you would like to request this hearing be held, please notify Samantha Carlisle, AOGCC’s Special Assistant, at 907‐793‐1223 or samantha.carlisle@alaska.gov as specified in the Public Hearing Notice by 4:30 PM on December 8, 2023. Cottonfield 6 will be classified as an exploratory well and by law nearly all information about the well will be confidential until 25 months after the well is completed, suspended, or plugged and abandoned. So AOGCC is restricted in what we can say about that well, but I will try to be a clear as possible while respecting confidentiality. By way of introduction, here is a brief description of AOGCC’s spacing exception process: 3  In the State of Alaska, spacing of oil and gas wells is controlled to protect the oil and gas rights of adjacent landowners and to prevent drilling of an excessive number of wells.  According to Hilcorp’s application, Cottonfield 6 will target an undefined gas pool. Statewide spacing requirements specify that gas wells are limited to no closer than 1,500 feet from a property line where ownership of the below‐surface gas rights changes.  Exceptions to these requirements are sometimes needed to drill wells that cannot adhere to these rules because of special geologic conditions.  In the Cook Inlet Basin, reservoir sands were commonly deposited in migrating, ancient river channels, so they are generally limited in size and are often not connected with one another. According to Hilcorp’s application, Cottonfield 6 targets sands at a location that does not conform to statewide requirements.  AOGCC carefully evaluates every application to drill at locations such as this, granting exceptions only for wells that are necessary to discover or develop oil and gas accumulations in a safe manner that protects freshwater and the oil and gas rights of adjacent landowners. Your comment lists several concerns regarding Hilcorp's operations including surface, wetlands, and environmental impacts. Other concerns commonly expressed for past spacing exception applications also include noise and air quality. By state statute, the AOGCC regulates only below‐ground drilling and production activities. AOGCC's jurisdiction does not extend to surface disturbances, noise, or emissions. Those are regulated by agencies other than the AOGCC. However, our goal is to be as helpful to you as possible, so we have spent time checking the Internet and other agencies.  Regarding surface and wetlands impacts: o We checked with the DEC and that department does not directly regulate surface impact and building of gravel drilling pads on state lands or wetlands. You may try contacting the State of Alaska's Office of Project Management and Permitting, the Division of Mining, Land, and Water, and the Kenai Peninsula Borough Land Management Division for additional surface impact and restoration requirements. o AOGCC's regulations do not govern pipelines or surface impacts associated with pipelines. I suggest that you contact the Alaska Division of Oil and Gas, State Pipeline Coordinator’s Section as a possible source for requirements. o AOGCC’s jurisdiction regarding drill site restoration is limited to Regulation 20 AAC 25.170, Onshore Location Clearance, which requires the operating companies to remove all materials and debris from the location and to leave it in a clean and graded condition upon abandonment. AOGCC’s field inspectors conduct a final site inspection to ensure compliance with this regulation.  Regarding noise: The Alaska Department of Environmental Conservation (DEC) does not regulate noise. For Anchorage, Noise Ordinance AMC 15.70 regulates industrial noise sources to 80 decibels at all times. The Kenai Peninsula Borough or the local municipality likely have similar ordinances, but we have been unable to find them on the Internet. I suggest contacting the Borough and municipal offices or conducting a further search of their websites.  Regarding air quality: AOGCC's regulations do not govern air quality. If you have concerns, my suggestion is that you try contacting the Alaska Department of Environmental Conservation, Division of Air Quality to view the Air Quality Control regulations and to find additional information and agency contacts. Thank you again for your comments. Please call me at 907‐793‐1224 or email steve.davies@alaska.gov if you have any further questions or need additional information. Regards and Be Well, Steve Davies AOGCC 4 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 9 1 Davies, Stephen F (OGC) From:Davies, Stephen F (OGC) Sent:Tuesday, January 16, 2024 8:20 AM To:Harold Hale Cc:loganofsale@gmail.com Subject:RE: Hilcorp Cottenfield Spacing Request Mr. Hale, Thank you again for your comments regarding Hilcorp's spacing exception request for the Cottonfield 6 exploratory well. When we spoke on the telephone the other day, you expressed concerns regarding:  Evacuation notifications and routing,  Traffic issues,  School bus stops nearby,  Cell phone towers nearby,  Steep and unstable bluffs in the area,  Septic systems, and  Water quality in underground aquifers. Let me begin by saying that according to Alaska’s Statutes, the Alaska Oil and Gas Conservation Commission (AOGCC) regulates only below‐ground drilling and production activities, protection of underground freshwater aquifers, and final drill site conditions upon well abandonment. I spoke with AOGCC's engineer charge of field inspections regarding your request that an AOGCC inspector visit the planned well site. AOGCC’s inspection authority extends to the drilling rig and equipment, drilling and cementing operations, well‐related equipment, and final location abandonment. Regarding your concerns listed above, AOGCC has no authority to regulate or inspect the drill site for any of these issues, other than the quality of water in underground aquifers. AOGCC carefully evaluates proposed drilling, casing, and cementing operations in accordance with state regulations to ensure that every well is drilled and constructed in a manner that ensures public and environmental safety and protects underground freshwater aquifers. AOGCC’s engineers thoroughly review reports for cementing operations and cement‐ evaluation logs, and our field inspectors periodically witness various pressure and equipment tests to ensure that gas and fluids do not migrate out of their natural zones to prevent crossflow and contamination of underground freshwater aquifers. Upon abandonment of the well or all wells at a drill site, AOGCC’s field personnel conduct a final inspection to ensure that all materials, supplies, structures, installations, and debris have been removed and that the site is left in a clean and well‐graded condition. AOGCC's jurisdiction does not extend to surface disturbances, ground stability, communications, septic systems, traffic, noise, or emissions. Those are regulated by agencies other than the AOGCC.  Regarding surface and wetlands impacts: o Alaska’s Department of Environmental Conservation (DEC) does not directly regulate surface impact and building of gravel drilling pads on state lands or wetlands. You may try contacting the State of Alaska's Office of Project Management and Permitting, the Division of Mining, Land, and Water, and the Kenai Peninsula Borough Land Management Division for surface impact and restoration requirements. o AOGCC's regulations do not govern pipelines or surface impacts associated with pipelines. The Alaska Division of Oil and Gas, State Pipeline Coordinator’s Section is a possible source for information and requirements. o AOGCC’s jurisdiction regarding drill site restoration is limited to Regulation 20 AAC 25.170, Onshore Location Clearance, which—as mentioned above—requires the operating companies to remove all 2 materials and debris from the location and to leave the site in a clean and graded condition upon abandonment.  Regarding noise: DEC does not regulate noise. For Anchorage, Noise Ordinance AMC 15.70 regulates industrial noise sources to 80 decibels at all times. The Kenai Peninsula Borough or the local municipality likely have similar ordinances. I suggest contacting the Borough and municipal offices or conducting a further search of their websites.  Regarding traffic: Please contact the Kenai Peninsula Borough’s Road Service Area Board, the Alaska State Troopers Detachment Headquarters in Soldotna, or your local municipality for traffic regulations and requirements.  Regarding evacuation planning and routes: According to Section 1 of the Alaska Evacuation Planning Guide, authority ordering evacuation rests with the Governor, an official of a fire department registered with the Alaska Fire Marshall’s office, or other officials designated by local ordinance. Please check with the Kenai Peninsula Borough’s Office of Emergency Management, your local municipality, or your local fire department for plans and other information.  Regarding septic systems: DEC’s Division of Water regulates wastewater systems, and their website provides additional information.  Regarding emissions: DEC’s Division of Air Quality governs air quality. DEC’s website may have additional information and agency contacts. Please note that the public hearing for the Cottonfield 6 spacing exception will be held at 10 AM on Thursday, January 18, 2024. You can participate in person at AOGCC’s office in Anchorage, by telephone or online by following the instructions provided in the Notice of Public Hearing that is posted on AOGCC’s Events web page. You will have the opportunity to provide testimony. Please let me know if you have any questions. Regards and Be Well, Steve Davies Senior Petroleum Geologist AOGCC CONFIDENTIALITY NOTICE: This e‐mail message, including any aƩachments, contains informaƟon from the Alaska Oil and Gas ConservaƟon Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain conﬁdenƟal and/or privileged informaƟon. The unauthorized review, use or disclosure of such informaƟon 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: Harold Hale <hdhale2@att.net> Sent: Thursday, January 4, 2024 4:27 PM To: Davies, Stephen F (OGC) <steve.davies@alaska.gov>; emile.springer@homernews.com Cc: Harold Hale <hdhale2@att.net>; loganofsale@gmail.com Subject: Fw: Hilcorp Cottenfield Spacing Request ----- Forwarded Message ----- From: Harold Hale <hdhale2@att.net> You don't often get email from hdhale2@att.net. Learn why this is important 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. 3 To: "steve.davis@alaska.gov" <steve.davis@alaska.gov> Cc: Harold Hale <hdhale2@att.net>; "samantha.carlise@alaska.gov" <samantha.carlise@alaska.gov>; "loganofsale@gmail.com" <loganofsale@gmail.com>; "emilie.springer@homernew.com" <emilie.springer@homernew.com> Sent: Saturday, December 30, 2023 at 03:36:00 PM AKST Subject: Hilcorp Cottenfield Spacing Request My name is Harold Hale and I live at mile marker 148.6 Sterling Hwy. I am very close to the Hilcorp Proposed drill site at mile marker 148.8 Sterling Hwy. Hilcorp’s Variance Application letter and attached map are totally inadequate to explain the effects on the lives and property threats to the local residents. There are problems with the close proximity to the 2 cell towers and the only local internet services tower. There has not been any emergency or evacuation response notifications and evacuation routing meetings with local residents or the local Fire and Rescue services in the area. The high density at the dwellings along the Sterling Hwy between mile marker 148 and 149 has a high number of elderly residents with mobility issues as well as hearing issues. This will certainly complicate the evacuation routes and processes which has not even been discussed. School bus stops directly at the end of David St. The steep unstable bluffs have not been considered either. There has documented erosion and sloughing all along this stretch of the Sterling Hwy. Also with the added use of Heavy Trucks and trailers used to transport the processed oil, there will also be traffic issues that haven’t been addressed when entering and exiting the Specified drill area. For an informed evaluation of the Variant request there should be a Required on site visit by a Geologists as well as Emergency response Teams from Anchor Point and Ninilchick. My contact information is as follows Harold Hale P.O. Box 687 Anchor Point , AK 99556 email: hdhale2@att.net phone # 907-567-3626 cell 303-590-8173 Below is an article related to the issues stated in this email. 4 Alaska regulators seek to fine ConocoPhillips nearly $1 million for underground gas ‘blowout’ alaskabeacon.com 8 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. You don't often get email from hdhale2@att.net. Learn why this is important From:Davies, Stephen F (OGC) To:Harold Hale Cc:loganofsale@gmail.com; Carlisle, Samantha J (OGC); emile.springer@homernews.com Subject:RE: Hilcorp Cottonfield Spacing Request Date:Monday, January 8, 2024 2:24:31 PM Mr. Hale, Thank you for your comments concerning Hilcorp’s Cottonfield 6 spacing exception request. A copy of your comments will be placed in the public record for Hilcorp’s request. Since your comments are part of the public record, a copy will be provided to Hilcorp so that Hilcorp is aware of your concerns. The public hearing for this spacing exception application is scheduled for January 18th at 10 AM in AOGCC’s office in Anchorage. You can participate in the hearing and, if desired, testify by telephone or online using Microsoft Teams by following the instructions given in the Notice of Public Hearing that is available through AOGCC’s Events webpage at https://www.commerce.alaska.gov/web/aogcc/Events.aspx. If you have questions or concerns about the public hearing, please contact Samantha Carlisle at samantha.carlisle@alaska.gov. Please let me know if you have further questions. Best Regards, Steve Davies Senior Petroleum Geologist 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: Harold Hale <hdhale2@att.net> Sent: Thursday, January 4, 2024 4:27 PM To: Davies, Stephen F (OGC) <steve.davies@alaska.gov>; emile.springer@homernews.com Cc: Harold Hale <hdhale2@att.net>; loganofsale@gmail.com Subject: Fw: Hilcorp Cottenfield Spacing Request ----- Forwarded Message ----- From: Harold Hale <hdhale2@att.net> To: "steve.davis@alaska.gov" <steve.davis@alaska.gov> Cc: Harold Hale <hdhale2@att.net>; "samantha.carlise@alaska.gov" <samantha.carlise@alaska.gov>; "loganofsale@gmail.com" <loganofsale@gmail.com>; "emilie.springer@homernew.com" <emilie.springer@homernew.com> Sent: Saturday, December 30, 2023 at 03:36:00 PM AKST Subject: Hilcorp Cottenfield Spacing Request My name is Harold Hale and I live at mile marker 148.6 Sterling Hwy. I am very close to the Hilcorp Proposed drill site at mile marker 148.8 Sterling Hwy. Hilcorp’s Variance Application letter and attached map are totally inadequate to explain the effects on the lives and property threats to the local residents. There are problems with the close proximity to the 2 cell towers and the only local internet services tower. There has not been any emergency or evacuation response notifications and evacuation routing meetings with local residents or the local Fire and Rescue services in the area. The high density at the dwellings along the Sterling Hwy between mile marker 148 and 149 has a high number of elderly residents with mobility issues as well as hearing issues. This will certainly complicate the evacuation routes and processes which has not even been discussed. School bus stops directly at the end of David St. The steep unstable bluffs have not been considered either. There has documented erosion and sloughing all along this stretch of the Sterling Hwy. Also with the added use of Heavy Trucks and trailers used to transport the processed oil, there will also be traffic issues that haven’t been addressed when entering and exiting the Specified drill area. For an informed evaluation of the Variant request there should be a Required on site visit by a Geologists as well as Emergency response Teams from Anchor Point and Ninilchick. My contact information is as follows Harold Hale P.O. Box 687 Anchor Point , AK 99556 email: hdhale2@att.net phone # 907-567-3626 cell 303-590-8173 Below is an article related to the issues stated in this email. Alaska regulators seek to fine ConocoPhillips nearly $1 million for underground gas ‘blowout’ alaskabeacon.com 7 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:Davies, Stephen F (OGC) To:Carlisle, Samantha J (OGC) Subject:FW: Cottonfield 6 Spacing Exception - Public Comment Response Date:Tuesday, November 21, 2023 1:17:19 PM Sam, Please include a copy of the email below in the Public Record for this Spacing Exception Application. Thanks, Steve From: Logan Sale <loganofsale@gmail.com> Sent: Monday, November 20, 2023 5:13 PM To: Davies, Stephen F (OGC) <steve.davies@alaska.gov> Subject: Re: Cottonfield 6 Spacing Exception - Public Comment Response Mr. Davies, Thank you for your email. I will share the notice along with the details with the local stakeholders. Hilcorp did inform us of the meeting but not that we would need to request it, let alone in fairly short order. We will follow up on the environmental concerns with the other departments. After further reviewing the applicable statutes on your website there is still the issue of the liability. The wording of the documents provided by Hilcorp seem to grant them immunity from most liability for any of the damages we are concerned about. They made an offer to repair roads that are damaged. Water safety issues are noted so I suppose if they turn my well water into a flammable liquid there would be redress through AOGCC. We are concerned about releasing them from liability for their offer of a few hundred dollars. I did not see any real mention of that in the regulations. Would your exception also compel us to absolve them of responsibility for damages? A second area of concern for some is compensation levels. Many of our landowners have come from the fracking zones of the upper mountain west/great plains. Their refusals stem more from a regard that the terms offered were well below expectation for such a project. My reading is that the purpose of an exception would be to handle complex ownership boundaries or to respond to the geological unknowns in the deposits. Would it be fair to say that it is not intended as a means to compel us to take 12.5% when the owners were aiming at 3-8% higher payout? I had not thought about the light or noise pollution. No one is objecting to the actual construction. We have several communications towers in the area so what is another blight? Existing lights from these towers tend to wreck auroras as it is. I do not think this area is covered by a noise ordinance however we will take note of the sound level. The intertidal zone of the creek is a major stopover point for migratory birds and falls well within the exception boundary. I'll pass that one to our bird person. -Logan Sale On Thu, Nov 16, 2023 at 3:38 PM Davies, Stephen F (OGC) <steve.davies@alaska.gov> wrote: Mr. Sale, My name is Steve Davies, and I am a geologist with the Alaska Oil and Gas Conservation Commission (AOGCC). The AOGCC would like to thank you for your thoughtful comments regarding Hilcorp’s application for a spacing exception order for the proposed Cottonfield 6 well. Our agency tries very hard to make our processes and information available to the public as clearly and easily as possible. To begin, your comments are part of the public record for this spacing exception amendment application and a copy will be forwarded to Hilcorp’s land department to make them aware of your concerns. Hopefully, that will be helpful for you. The public hearing regarding Hilcorp’s spacing exception application for the Cottonfield 6 well is tentatively scheduled for January 18, 2024. A Public Hearing Notice will be published in the Anchorage Daily News and on AOGCC’s website. I have attached a copy for your convenience. The AOGCC would like to extend an invitation to you to formally request that this hearing be held as scheduled. This hearing will provide you the opportunity to listen to Hilcorp’s testimony, to express your concerns, and to ask questions--through AOGCC’s Commissioners--about Hilcorp’s proposed operations. If you would like to request this hearing be held, please notify Samantha Carlisle, AOGCC’s Special Assistant, at 907-793-1223 or samantha.carlisle@alaska.gov as specified in the Public Hearing Notice by 4:30 PM on December 8, 2023. Cottonfield 6 will be classified as an exploratory well and by law nearly all information about the well will be confidential until 25 months after the well is completed, suspended, or plugged and abandoned. So AOGCC is restricted in what we can say about that well, but I will try to be a clear as possible while respecting confidentiality. By way of introduction, here is a brief description of AOGCC’s spacing exception process: In the State of Alaska, spacing of oil and gas wells is controlled to protect the oil and gas rights of adjacent landowners and to prevent drilling of an excessive number of wells. According to Hilcorp’s application, Cottonfield 6 will target an undefined gas pool. Statewide spacing requirements specify that gas wells are limited to no closer than 1,500 feet from a property line where ownership of the below-surface gas rights changes. Exceptions to these requirements are sometimes needed to drill wells that cannot adhere to these rules because of special geologic conditions. In the Cook Inlet Basin, reservoir sands were commonly deposited in migrating, ancient river channels, so they are generally limited in size and are often not connected with one another. According to Hilcorp’s application, Cottonfield 6 targets sands at a location that does not conform to statewide requirements. AOGCC carefully evaluates every application to drill at locations such as this, granting exceptions only for wells that are necessary to discover or develop oil and gas accumulations in a safe manner that protects freshwater and the oil and gas rights of adjacent landowners. Your comment lists several concerns regarding Hilcorp's operations including surface, wetlands, and environmental impacts. Other concerns commonly expressed for past spacing exception applications also include noise and air quality. By state statute, the AOGCC regulates only below- ground drilling and production activities. AOGCC's jurisdiction does not extend to surface disturbances, noise, or emissions. Those are regulated by agencies other than the AOGCC. However, our goal is to be as helpful to you as possible, so we have spent time checking the Internet and other agencies. Regarding surface and wetlands impacts: We checked with the DEC and that department does not directly regulate surface impact and building of gravel drilling pads on state lands or wetlands. You may try contacting the State of Alaska's Office of Project Management and Permitting, the Division of Mining, Land, and Water, and the Kenai Peninsula Borough Land Management Division for additional surface impact and restoration requirements. AOGCC's regulations do not govern pipelines or surface impacts associated with pipelines. I suggest that you contact the Alaska Division of Oil and Gas, State Pipeline Coordinator’s Section as a possible source for requirements. AOGCC’s jurisdiction regarding drill site restoration is limited to Regulation 20 AAC 25.170, Onshore Location Clearance, which requires the operating companies to remove all materials and debris from the location and to leave it in a clean and graded condition upon abandonment. AOGCC’s field inspectors conduct a final site inspection to ensure compliance with this regulation. Regarding noise: The Alaska Department of Environmental Conservation (DEC) does not regulate noise. For Anchorage, Noise Ordinance AMC 15.70 regulates industrial noise sources to 80 decibels at all times. The Kenai Peninsula Borough or the local municipality likely have similar ordinances, but we have been unable to find them on the Internet. I suggest contacting the Borough and municipal offices or conducting a further search of their websites. Regarding air quality: AOGCC's regulations do not govern air quality. If you have concerns, my suggestion is that you try contacting the Alaska Department of Environmental Conservation, Division of Air Quality to view the Air Quality Control regulations and to find additional information and agency contacts. Thank you again for your comments. Please call me at 907-793-1224 or email steve.davies@alaska.gov if you have any further questions or need 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 6 From:Logan Sale To:Carlisle, Samantha J (OGC) Subject:Re: Cottonfield 6 Spacing Exception Meeting Date:Tuesday, November 21, 2023 9:37:13 AM You don't often get email from loganofsale@gmail.com. Learn why this is important Great. I'll let the others know they don't have to send letters or barrage you with emails. Hilcorp did have the 18th in their letter as the approximate date they would begin drilling. On Tue, Nov 21, 2023 at 7:28 AM Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> wrote: Good morning Mr. Sale, This email is sufficient in requesting that the public hearing scheduled for January 18, 2024 be held. At the time of notification from Hilcorp to surrounding landowners, the AOGCC had not set a hearing date yet. We only set a hearing once we receive all information from Hilcorp and part of that information that is required is the certified notice to landowners. Comments regarding Hilcorp’s spacing exception application can be emailed directly to me at Samantha.carlisle@alaska.gov. The hearing will be held in person at our offices and online. Here is the information for the audio call-in: (907) 202 7104, Conference ID: 739 621 232#. If you would like to be participate via Microsoft Teams then I can add your email to the calendaring invite, you can see any presentation that Hilcorp might have if you choose this option. I am attaching a copy of the hearing notice for your reference. Please let me know if you have any other questions. You don't often get email from loganofsale@gmail.com. Learn why this is important 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. Thank you, Samantha Carlisle Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 From: Logan Sale <loganofsale@gmail.com> Sent: Monday, November 20, 2023 4:36 PM To: Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> Subject: Cottonfield 6 Spacing Exception Meeting Ms. Carlisle, I am one of the landowners affected by this exception. We definitely want a public meeting to take place. Your name was provided as a point of contact by the AOGCC. While Hilcorp had informed us that there would be a meeting, they neglected to inform us that we would need to request that in writing by December 8th. I am checking ahead of time if there are any special requirements for that letter? Should it be sent to 333 West 7th Avenue as with comments? The notice also mentions that the meeting itself may be virtual. How early would the call on in person or virtual be? Our landowners that will be in state in January are generally down here in Anchor Point so this would be a significant trip to make in the middle of winter. It would be very irksome to make it and then find out it is all online. -Logan Sale 5 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. 4 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION RE: 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 Hilcorp Alaska, LLC (Hilcorp) by letter received November 7, 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 Cottonfield 6 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: 431’ FNL, 2,454’ FEL, Section 36, T03S, R15W, Seward Meridian (SM) Target Location: 439’ FNL, 2,130’ FEL, Section 36, T03S, R15W, SM Bottom Hole Location: 493’ FNL, 218’ FEL, Section 36, T03S, 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 18, 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: 739 621 232#. 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 18, 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 11, 2024. Brett W. Huber, Sr. Chair, Commissioner Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2023.11.16 12:38:21 -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 #: W0041876 Cost: $418 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION RE: 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 Hilcorp Alaska, LLC (Hilcorp) by letter received November 7, 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 Cottonfield 6 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: 431’ FNL, 2,454’ FEL, Section 36, T03S, R15W, Seward Meridian (SM) Target Location: 439’ FNL, 2,130’ FEL, Section 36, T03S, R15W, SM Bottom Hole Location: 493’ FNL, 218’ FEL, Section 36, T03S, 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 18, 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: 739 621 232#. 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 18, 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 11, 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 18 of 31 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. You don't often get email from loganofsale@gmail.com. Learn why this is important From:Guhl, Meredith D (OGC) To:Chmielowski, Jessie L C (OGC); Wilson, Greg C (OGC); Huber, Brett W (OGC) Cc:Carlisle, Samantha J (OGC) Subject:FW: Cottonfield 6 Well Application for Spacing Exemption Date:Monday, November 13, 2023 1:38:17 PM Received at AOGCC Customer Service Email. Please see below. M From: Logan Sale <loganofsale@gmail.com> Sent: Monday, November 13, 2023 1:23 PM To: AOGCC Cust Svc (CED sponsored) <aogcc.customer.svc@alaska.gov> Subject: Cottonfield 6 Well Application for Spacing Exemption Greetings, I was hoping to get some assistance in finding documents related to a nearby development project by Hilcorp. They have informed us that they plan to drill regardless of our cooperation and that they are requesting the AOGCC grant them this right. Most local landowners, myself included, have refused to sign. While the reasons are varied, a main one is concern about erosion of our bluff and the impact on the local Stariski Creek. Previous test drillings several years ago caused significant damage to the bluff. Their outright refusal to provide any compensation for damage caused by their operations is also a major sticking point. As they are submitting requests to you I was hoping they had included environmental impact reports detailing any possible side effects? The tone of communications from Hilcorp has been increasingly threatening and I feel that as an independent government commission the AOGCC might have access to documentation we will not be given. As they are also planning to do this under major local energy, communication, and transportation infrastructure I am also curious if they have submitted any impact statements regarding these factors as well? The State of Alaska might overlook the destruction of wetlands but I would imagine the Sterling Highway falls into a different category. -Logan Sale 2 By Samantha Carlisle at 12:04 pm, Nov 07, 2023 From:Cody Terrell To:Carlisle, Samantha J (OGC) Cc:Roby, David S (OGC); Davies, Stephen F (OGC); John Salsbury Subject:RE: [EXTERNAL] RE: Cottonfield 6 Spacing Exception Application Date:Wednesday, November 15, 2023 9:12:20 AM Samantha – I realized two tracking numbers were missing from the previous email. Please see them below. Also, please let me know when this goes out for public notice. ORDER SUMMARY SENT TO CF-06 Spacing Exception Mailform 11- 7-23.pdf Alison K. Sale, PO Box 946, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Return Receipt View Delivered 2023-11-13T16:49:00.000Z Tracking Information 92148901324734001931754779 CF-06 Spacing Exception Mailform 11-7- 23.pdf Univeristy of Alaska, c/o Laura Carmack, Land Office 1815 Bragaw Street, Suite 101, Anchorage AK 99508, United States CERTIFIED ELECTRONIC RETURN RECEIPT Delivered 2023-11-14T18:04:00.000Z Tracking Information 92148901324734001931754755 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: Cody Terrell <cterrell@hilcorp.com> Sent: Monday, November 13, 2023 2:21 PM To: Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> Cc: Roby, David S (OGC) <dave.roby@alaska.gov>; Davies, Stephen F (OGC) <steve.davies@alaska.gov>; John Salsbury <jsalsbury@hilcorp.com> Subject: RE: [EXTERNAL] RE: Cottonfield 6 Spacing Exception Application Samantha, Here are the certified mailing tracking numbers: ORDER SUMMARY SENT TO CF-06 Spacing Exception Mailform 11-7- 23.pdf Alison K. Sale, PO Box 946, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT CF-06 Spacing Exception Mailform 11-7- 23.pdf Brian S. Sprague, PO Box 991, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754823 CF-06 Spacing Exception Mailform 11-7- 23.pdf Brian Sprague and Doreen Graves, PO Box 991, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754816 CF-06 Spacing Exception Mailform 11-7- 23.pdf Brian T. Donham, PO Box 197, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754809 CF-06 Spacing Exception Mailform 11-7- 23.pdf Bureau of Land Management, c/o Rob Brumbaugh 222 West 7th Avenue, Anchorage AK 99513, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754830 CF-06 Spacing Exception Mailform 11-7- 23.pdf Byron Lee Moore, P. O. Box 39637, Ninilchik AK 99639, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754847 CF-06 Spacing Exception Mailform 11-7- 23.pdf Cook Inlet Region, Inc., c/o Chait Borade 725 E Fireweed Ln Ste 800, Anchorage AK 99503, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754861 CF-06 Spacing Exception Mailform 11-7- 23.pdf David L. Vanostrand, PO Box 215, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754892 CF-06 Spacing Exception Mailform 11-7- 23.pdf David W. Maze, 1063 Miller Lane, Homer AK 99603, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754885 CF-06 Spacing Exception Mailform 11-7- 23.pdf Donald H. and Joan D. Tetzlaff, 600 Chellies Circle, Anchorage AK 99515, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754908 CF-06 Spacing Exception Mailform 11-7- 23.pdf Doreen Graves, PO Box 991, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754878 CF-06 Spacing Exception Mailform 11-7- 23.pdf Eric Hellman, 1416 Perkins St, Napa CA 94559, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754922 CF-06 Spacing Exception Mailform 11-7- 23.pdf Gregory Markson and JoAnne Markson, 1120 Huffman Rd, Ste. 24- 694, Anchorage AK 99515, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754939 CF-06 Spacing Exception Mailform 11-7- 23.pdf Harold D. & Katherine E. Hale, h/w, P. O. Box 687, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754946 CF-06 Spacing Exception Mailform 11-7- 23.pdf Jo Day, 360 Valley Westside Rd., Colville WA 99114, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754953 CF-06 Spacing Exception Mailform 11-7- 23.pdf John P. Symens, P. O. Box 39486, Ninilchik AK 99639, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754960 CF-06 Spacing Exception Mailform 11-7- 23.pdf Larry M. Rozak, PO Box 1179, Homer AK 99603, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754977 CF-06 Spacing Exception Mailform 11-7- 23.pdf Logan Sale, PO Box 946, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754984 CF-06 Spacing Exception Mailform 11-7- 23.pdf Marlene Donham, PO Box 197, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931755004 CF-06 Spacing Exception Mailform 11-7- 23.pdf Michael Joe Cogswell, 26890 Sterling Hwy, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931755028 CF-06 Spacing Exception Mailform 11-7- 23.pdf Orval Sublie, 360 Valley Westside Rd., Colville WA 99114, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931755011 CF-06 Spacing Exception Mailform 11-7- 23.pdf Patricia Reid, 586 McCorkle Rd., Ridgeway SC 29130, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931755035 CF-06 Spacing Exception Mailform 11-7- 23.pdf Richard Bartolowits, PO Box 39812, Ninilchik AK 99639, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931755042 CF-06 Spacing Exception Mailform 11-7- 23.pdf Sara Jane Clemson, 602 Massachusetts Ave., Norfolk VA 23508, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931755073 CF-06 Spacing Exception Mailform 11-7- 23.pdf Sharon Hansen, P. O. Box 39486, Ninilchik AK 99639, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931755059 CF-06 Spacing Exception Sheila I. Lettis, PO Box 825, Anchor Point AK 99556, United CERTIFIED ELECTRONIC Mailform 11-7- 23.pdf States RETURN RECEIPT Tracking Information 92148901324734001931755066 CF-06 Spacing Exception Mailform 11-7- 23.pdf State of Alaska, c/o Units Section 550 West 7th Avenue, Ste. 1100, Anchorage AK 99501, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931755080 CF-06 Spacing Exception Mailform 11-7- 23.pdf Steve O. Weitzel, 235 Holiday Acres Rd., Prosperity SC 29127, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931755103 CF-06 Spacing Exception Mailform 11-7- 23.pdf Steven N. and Verna L. Brizendine, 39255 Dusty St., Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931755110 CF-06 Spacing Exception Mailform 11-7- 23.pdf Stewart E. White (deceased), c/o Gloria L. White P. O. Box 931, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931755127 CF-06 Spacing Exception Mailform 11-7- Trust Agreement of Gloria L. White, c/o Gloria L. White, Trustee P. O. Box 931, Anchor Point AK 99556, United States CERTIFIED ELECTRONIC RETURN RECEIPT 23.pdf Tracking Information 92148901324734001931754786 CF-06 Spacing Exception Mailform 11-7- 23.pdf Univeristy of Alaska, c/o Laura Carmack, Land Office 1815 Bragaw Street, Suite 101, Anchorage AK 99508, United States CERTIFIED ELECTRONIC RETURN RECEIPT CF-06 Spacing Exception Mailform 11-7- 23.pdf Whitney Family Trust, 735 E. Liberty St., Weiser ID 83672, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754748 CF-06 Spacing Exception Mailform 11-7- 23.pdf William Telford and Teresa Romines, PO Box 671582, Chugiak AK 99567, United States CERTIFIED ELECTRONIC RETURN RECEIPT Tracking Information 92148901324734001931754762 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: Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> Sent: Tuesday, November 7, 2023 12:04 PM To: Cody Terrell <cterrell@hilcorp.com> Cc: Roby, David S (OGC) <dave.roby@alaska.gov>; Davies, Stephen F (OGC) <steve.davies@alaska.gov>; John Salsbury <jsalsbury@hilcorp.com> 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. CAUTION: External sender. DO NOT open links or attachments from UNKNOWN senders. Subject: [EXTERNAL] RE: Cottonfield 6 Spacing Exception Application Received, thank you From: Cody Terrell <cterrell@hilcorp.com> Sent: Tuesday, November 7, 2023 10:45 AM To: Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> Cc: Roby, David S (OGC) <dave.roby@alaska.gov>; Davies, Stephen F (OGC) <steve.davies@alaska.gov>; John Salsbury <jsalsbury@hilcorp.com> Subject: Cottonfield 6 Spacing Exception Application Hi Samantha, Please see Hilcorp’s application for spacing exception to drill the Cottonfield 6 Exploration well. The copies of certified mailouts will be sent as soon as we receive them form our third party mailing service. Please let me know if you have any questions. 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 the individual or entity named above. If you are not an intended recipient or if you have received this message in error, you are hereby notified 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. 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, please immediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete this message. 1 3800 Centerpoint Drive Suite 1400 1400 Anchorage, AK 99503 Phone: 907-777-8432 Hilcorp7-8301 Alaska LLC Fax:rell@ 77orp.co cterrell@hilcorp.com September 11, 2023 Harold D. and Katherine E. Hale P. O. Box 687 Anchor Point, AK 99556 RE: Oil & Gas Lease Proposal Dear Mr. and Mrs. Hale: Hilcorp Alaska, LLC ("Hilcorp") has attempted to mail to you an oil and gas lease proposal for the subsurface of your property on the Kenai Peninsula near Anchor Point, Alaska, for the purpose of oil and gas exploration and production. There is no guarantee of success, but based on our preliminary exploration in the area, we are optimistic that we could find paying quantities of oil and/or natural gas underneath your property. DNR Recorder's Office records indicate that you own a one -hundred (100%) mineral interest in approximately 9.3 acres within Section 25, Township 3 South, Range 15 West, Seward Meridian, Alaska. We are sending you this letter to again offer you an oil and gas lease for the subsurface of your property. Please note that Hilcom does not wish to conduct surface operations on the surface of vour nronerty and does not need or want to enter the surface of your property. To further emphasize Hilcorp's desire to only lease the subsurface of your property, the lease proposal we are offering contains an attached Exhibit B titled "Surface Limitation Rider" which denies Hilcorp the ability to enter and utilize the surface of your property. The "Surface Limitation Rider" is attached to this letter for your review. If you are interested in leasing the subsurface of your property and agree with the lease proposal that includes the "Surface Limitation Rider", please contact the undersigned for a revised copy of the oil and gas lease proposal. Upon execution by both parties, Hilcorp will pay you a bonus payment of Thirty Dollars ($30.00) per acre proportionate to your ownership interest. The lease is for a limited 5 year term, with the option to extend for an additional 5 years. Hilcorp has plans to drill the first exploration well in the area within the next 8-12 months. If we discover oil and/or gas in the area and your property is productive, we will need an oil and gas lease agreement, or similar agreement, in place so we can distribute your proceeds from production. If we do not have an agreement in place for your subsurface, Hilcorp will still be able to drill, develop and produce hydrocarbons from your property, however, we would be required to hold your production proceeds in suspense or in an escrow account controlled by the State of Alaska until an agreement is executed. Should you have any questions regarding this oil and gas lease proposal, please do not hesitate to contact me via telephone at 303-378-1813 or via email at aijustis ,comcast.net. Regards, ,4t" � wa Alan "AJ" Justis, Landman on behalf of Hilcorp Alaska, LLC Enclosures: Exhibit `B" Surface Limitation Rider ORDER FOR PAYMENT LEASE # Lessee shall, subject to its approval of title, make payment to Lessor as indicated herein by check within 60 banking days of Lessee's receipt of this Order For Payment and the executed Oil and Gas Lease associated herewith. No default shall be declared for failure to make payment until 10 days after written notice from Lessor of intention to declare such default. The right to receive this payment shall not be assigned, whether as collateral or otherwise. If the Oil and Gas Lease referenced herein covers less than the entire undivided interest in the oil and gas or other rights in such land, then the dollar amount listed herein shall be paid to the Lessor only in the proportion which the interest in said lands covered by the Agreement bears to the entire undivided interest therein. Further, should Lessor own more or less than the net interest defined herein, Lessee shall increase or reduce the dollar amount payable hereunder proportionately. For collection, the original copy herein must be submitted directly to Lessee at the address below along with an executed original Oil and Gas Lease. PAYEE (Lessor): Harold D. Hale and Katherine E. Hale Address: P. O. Box 687 Anchor Point, AK 99556 Phone: ( ) This payment represents full consideration fora 5 Five year paid -up Oil and Gas Lease dated 2023 covering the following described lands: STATE: ALASKA COUNTY: KENAI PENINSULA DESCRIPTION: Township 3S, Range 15W, Section 25 : Sonnichsen Subdivision 1990 Addition Tract No. 2B, Plat No. 91-32, AK Estimated Gross Acres: 9.3 Issued on behalf of Lessee by: Estimated Net Acres: 9.3 $ Per Net Acre: S30.00 Accepted this day of , 2023, Lessor: Harold D. Hale SS#/Tax ID#: Hilcorp Alaska, LLC 3800 Centerpoint Drive Lessor: Suite 1400 Katherine E. Hale Anchorage, AK 99503 SS#/Tax ID#: This Order for Payment expires one year from date of issuance, unless paid sooner, terminated or replaced by Lessee. FOR OFFICE USE ONLY Date Received: Date Due: Michipan WLS OFP OGL 021907 301 Prospect: Deck #: _ Approved by: Date:_ Date Paid: Check #: MEMORANDUM OF OIL AND GAS LEASE This Memorandum of Oil and Gas Lease ("Memorandum") is executed this day of , 2023, pursuant to AS 40.17.120 and to the terms of that certain Oil and Gas Lease ("Lease") between the Parties. 1. Names and Addresses of the Parties: Lessor: Harold D. Hale and Katherine E. Hale, whose address is P. O. Box 687, Anchor Point, AK 99556. Lessee: Hilcorp Alaska, LLC, whose address is 3800 Centerpoint Drive, Suite 1400, Anchorage, AK 99503. 2. Effective Date of the Lease: 2023. 3. Description of the Real Property Leased ("Leased Premises"): See Exhibit A, attached hereto. 4. Rights Granted in the Lease: Lessor does grant, demise, lease, and let unto Lessee, and Lessee does hereby lease from Lessor, for the sum of Ten Dollars ($10.00), and other good and valuable consideration for the Lease covering the Leased Premises, for the purposes of conducting oil and gas operations as provided in the Lease. 5. Term of the Lease: The primary term of the Lease commences the Effective Date of the Lease and expires after a primary term of five (5) years, unless extended as provided in the Lease. 6. Extension of Lease Term: The term of the lease may be automatically extended pursuant to the terms of the Lease upon the following conditions, all as further described in the Lease: (a) Production of hydrocarbons in paying quantities from the Leased Premises or a portion thereof; (b) Unitization or pooling of the Leased Premises or a portion thereof, (c) Drilling or reworking operations for hydrocarbons on any part of the Leased Premises; (d) Payment by Lessee of shut-in royalty payments; (e) Force Majeure as defined in the Lease; and (f) the Lessee exercises its option to extend the Lease for an additional FIVE (5) years. Approval and Consent to Join a Pool or Unit Agreement: Lessor approves consents and allows the Lessee to pool or combine separate oil, gas, and associated substances in any part or parts of the Leased Premises with other leased lands to form a drilling unit, and/or to unitize with others, jointly or separately, in collectively adopting and operating under a cooperative or unit agreement, without further approval from Lessor. Memorandum of Oil and Gas Lease All the terms, conditions, provisions, and covenants of the Lease are incorporated in this Memorandum by reference. In the event of any inconsistency between the provisions of this Memorandum and those of the Lease, the provisions of the Lease shall control. IN WITNESS WHEREOF, the Parties have caused this Memorandum to be executed the day and year first herein above written. LESSOR(S) LESSEE: HILCORP ALASKA, LLC Signature: IC Name: Harold D. Hale Name: Title: Title: Date: Date: Signature: Name: Katherine E. Hale Title: Date: Acknowledgments on Following Pages Memorandum of Oil and Gas Lease 2 ACKNOWLEDGEMENT OF LESSOR STATE OF ) ss. COUNTY OF The foregoing instrument was acknowledged before me this day of 2023,by Notary Public in and for the State of My commission expires: ACKNOWLEDGEMENT OF LESSEE STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) The foregoing instrument was acknowledged before me this day of , 2023, by of Hilcorp Alaska, LLC, a Delaware limited liability company, on behalf of the limited liability company. Notary Public in and for Alaska My Commission Expires: (continued on next page) Memorandum of Oil and Gas Lease EXHIBIT A MEMORANDUM OF OIL AND GAS LEASE Description of the Real Property Leased ("Leased Premises") THIS MEMORANDUM OF OIL AND GAS LEASE made as of day of , 2023, by and between Harold D. Hale and Katherine E. Hale, hereinafter called "Lessor", and Hilcorp Alaska, LLC, hereinafter called "Lessee". LEGAL DESCRIPTION Township 3 South, Range 15 West, Seward Meridian, Alaska Section 25: Sonnichsen Subdivision 1990 Addition Tract No. 2B, Plat No. 91-32, AK Containing 9.3 acres, more or less. Record in the Homer Recording District After Recording Return To: Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, Alaska 99503 Attn: Land Manager Memorandum of Oil and Gas Lease OIL AND GAS LEASE Paid -Up This Oil and Gas Lease ("Agreement") is made as of day of 2023, ("Effective Date") by and between Harold D. Hale and Katherine E. Hale, ("Lessor"), whose address is P.O. Box 687, Anchor Point, AK 99556, and Hilcorp Alaska, LLC ("Lessee"), a Delaware limited liability company with offices located at 3800 Centerpoint Drive, Suite 1400, Anchorage, Alaska 99503. 1. GRANT. For and in consideration of the sum of Ten Dollars ($10.00), and other valuable consideration, receipt of which is hereby acknowledged, and of the covenants and agreements herein contained, Lessor does hereby grant, demise, lease, and let unto Lessee the lands described in Exhibit "A", with the exclusive rights of conducting geological, geophysical, and other exploratory work for oil, gas, and associated substances, and for exploring, investigating, prospecting, marketing, drilling and operating wells (including directionally drilled wells) for producing and marketing oil, gas, and associated substances, producing, owning, saving, storing, taking care of, venting, treating and transporting oil, gas, and associated substances therein, drilling and using wells for secondary and tertiary recovery methods, storing oil, gas, and associated substances on or below the surface, and, together with the non-exclusive rights to lay pipe, telephone and power lines, build and maintain roads and equipment, construct power stations, tanks and other facilities and structures, the right to remove all of said oil, gas, and associated substances, or water, or either of them, and the free and uninterrupted right and right-of- way into, through and under the said land at such points and in such manner as may be convenient or necessary for the purpose of conducting all said oil, gas, and associated substances operations on behalf of the lease, pool, or unit. Subject to the terms of Exhibit "B" The premises leased hereby being that tract of land with any reversionary rights therein situated in the KENAI PENINSULA BOROUGH, THIRD JUDICIAL DISTRICT, STATE OF ALASKA. See attached Exhibit "A" 2. TERM. 2.1 Primary Term. Subject to the other provision herein contained, this lease shall be for a term of FIVE (5) years from the effective date and as long thereafter as oil or gas and associated substances is produced in paying quantities from the Leased Premises hereunder, or lands pooled or unitized herewith, or drilling or reworking operations for oil, gas, and associated substances, are conducted thereon as hereinafter provided ("Extended Term"), or Lessee makes shut-in royalty payments. 2.2 Extension of Primary Term. Lessee shall have the option, but not the obligation to extend the primary term of this lease for an additional FIVE (5) year period OIL AND GAS LEASE (PAID -UP) Rev. 2016-00 Page I from the expiration of the original primary term. This option may be exercised at any time prior to the end of the primary term by written notice to Lessor, which notice must be accompanied by a certified check or cashier's check in an amount equal to THIRTY dollars ($30.00) per net mineral acre times the number of acres then comprising the leased premises or such portion of the leased premises designated by Lessee in said notice. Said option may be exercised on the entirety of the leased premises or such portion thereof. Should this option be exercised as herein provided, it shall be considered for all purposes as though this Lease, limited to the portion of the Leased Premises covered by Lessee's notice and payment, provided for a Primary Term of TEN (10) years. 3. ROYALTY ON PRODUCTION. 3.1 Royalty Rate. Except for oil, gas, and associated substances used on the Leased Premises for exploration, development and production, or unavoidably lost, the Lessee shall pay to the Lessor as a royalty Twelve and One -Half Percent (12.50%) in amount or value of the oil, gas, and associated substances saved, removed, or sold from the Leased Premises. 3.2 Valuation. For the purpose of computing royalties due under this lease, the value of royalty oil, gas, or associated substances shall be the highest of: (A) The field price received by the Lessee for the oil, gas, or associated substances; (B) The Lessee's posted price in the field or area for the oil, gas, or associated substances; or (C) The arithmetic average of the three highest posted prices in the same field or area for oil of like grade and gravity, gas of like kind and quality, or associated substances of like kind and quality at the time the oil, gas, or associated substances are sold or removed from the Leases Premises or pooled or unit area; if there are less than three prices posted, the arithmetic average will be calculated using the lesser number of prices posted in the field or area. 3.3 Field Price. (A) If oil, gas, or associated substances are sold away from the Leased Premises or pooled or unit area, the term "field price" in subparagraph (A) above will be the cash value of all consideration received by the Lessee or other producer from the purchaser of the oil, gas, or associated substances, less the reasonable costs of transportation away from the Leased Premises or pooled or unit area to the point of sale. OIL AND GAS LEASE (PAID -UP) Rev. 2016-00 Page 2 (B) In the event the Lessee does not sell in an arms' length transaction the oil, gas, or associated substances, the term "field price" in subparagraphs (B) and (C) above will mean the value utilized by the Lessee to pay royalty to the State for similar dispositions from State leases in the same field or area, minus reasonable costs of transportation away from the Leased Premises or pooled or unit area to the point of sale or other disposition. 3.4 Deductions. In computing the royalty, Lessee may deduct the costs of heating, sweetening, gathering, transporting, dehydrating, compressing, extracting, processing, manufacturing or any other postproduction cost. 3.5 Shut -In Royalties. Should Lessee complete a well on the Leased Premises capable of producing in commercial quantities which is shut-in from a lack of market or otherwise, or gas is not being used or sold therefrom, then Lessee within one hundred twenty (120) days after the date on which said well is shut-in, shall pay Lessor the sum of two dollars ($2.00) per acre and shall thereafter pay as shut-in royalty to Lessor annually the sum of two dollars ($2.00) per acre until said well is placed on production. It is understood that this payment shall hold the entire Leased Premises. 3.6 Gas Extraction. In the event Lessee shall extract in a plant other hydrocarbons from the gas produced from the Leased Premises, Lessee shall pay Lessor as royalty Forty Percent (40%) of the Lessor's royalty share of the value, as hereinabove defined, of the other hydrocarbons credited to the Leased Premises from the gas so treated. 4. SUCCESSORS AND ASSIGNS AND CHANGE OF OWNERSHIP. The rights and estate of any party hereto may be assigned from time to time in whole or in part and as to any mineral or horizon. All of the covenants, obligations, and considerations of this lease shall extend to and be binding upon the parties hereto, their heirs, successors, assigns and successive assigns. No change or division in ownership of said land, royalties, or other monies, or any part thereof, howsoever affected, shall increase the obligations or diminish the rights of the Lessee. Notwithstanding any other actual or constructive knowledge or notice thereof of or to Lessee, its successors or assigns, no change or division in ownership of the Leased Premises or of the royalties, or other monies, or the right to receive the same, howsoever affected, shall be binding upon the Lessee of this lease until forty-five (45) days after there has been furnished to such Lessee at his or its principal place of business by Lessor or Lessor's heirs, successors, or assigns, notice of such change or division, supported by either originals or duly certified copies of the instruments which have been properly filed for record and which evidence such change or division, and of such court records and proceedings, transcripts, or other documents as shall be necessary in the opinion of such Lessee to establish the validity of such change of division. OIL AND GAS LEASE (PAID -UP) Rev. 2016-00 Page 3 5. LESSER OR GREATER INTEREST PROVISION. If Lessor owns a lesser interest in the oil, gas, and associated substances underlying the Leased Premises than the entire undivided fee simple estate, then the rentals and royalties hereunder shall be paid to Lessor only in the proportion which Lessor's interest bears to the whole and undivided fee; however, if title to any interest in the Leased Premises should become owned by or revert to Lessor, or his heirs, devisees, executors, administrators or his or their successors in interest, this lease shall cover such interest or reversion. If the true acreage of the Leased Premises shall be found to be less than the number of acres above recited, the rental and royalty hereunder shall be reduced proportionately, and Lessor hereby releases Lessee from payment of rental or royalty upon any acreage in excess of the true acreage of the Leased Premises. 6. FORCE MAJEURE. 6.1 Extension of Term. If any operation permitted or required hereunder, or the performance by Lessee of any covenant, agreement or requirements hereof is delayed or interrupted directly or indirectly by any past or future acts, orders, regulations or requirements of the Government of the United States or any state or other governmental body, or any agency, officer, representative or authority of any of them, or by the elements, fire, storm, flood, volcano eruptions and flows resulting therefrom or because of delay or inability to secure materials in the open market, acts of war or conditions attributable to war or on account of any other similar or dissimilar causes beyond the control of Lessee, the period of such delay or interruption shall not be counted against the Lessee, and the Primary Term and Extended Term of this lease shall automatically be extended so long as the cause or causes for such delays or interruptions continue and such extended term shall constitute and shall be considered for the purposes of this lease as a part of the primary term hereof. 6.2 Damages. The Lessee shall not be liable to Lessor in damages for failure to perform any operation permitted, or required hereunder or to comply with any covenant, agreement or requirement hereunder during the time Lessee is prevented by acts beyond its control from complying with such covenants, agreements or requirements, except for the payments provided herein and in Section 3 hereof. 7. DEFAULT AND TERMINATION RIGHTS. 7.1 Failure to Perform. This lease shall be subject to all valid federal, state and local laws, orders, rules and regulations and shall never be forfeited or terminated for failure of Lessee to perform in whole or in part any of its expressed or implied covenants, conditions or obligations until it shall have been first finally judicially determined that such failure exists, and Lessee shall have been given a reasonable time after such final determination within which to comply with any such covenants, conditions or obligations and shall have failed to comply. OIL AND GAS LEASE (PAID -UP) Rev.2016-00 Page 4 7.2 Retention. In the event Lessee's rights hereunder shall terminate or be forfeited for any cause, Lessee shall be entitled to designate and retain the following acreage around each well producing, being worked on, or drilling: (A) if drilling or producing units have not been established for the field in which such acreage is located by order of any State or Governmental Authority, Lessee shall have the right to designate and retain six hundred and forty (640) acres around each well producing oil, gas, and associated substances, each well being worked on, and each well drilling for oil, gas, and associated substances, each such tract to be in as nearly the form of a square as possible with the well in as near the center thereof as practicable. (B) If drilling or producing units have been established by order of any State or Governmental Authority, Lessee shall be entitled to retain around each well so much of the Leased Premises as is included under such order in the unit on which such well is located. 7.3 Cessation and Recommencement of Operations. In the event Lessee shall cease to conduct continuous operations on the Leased Premises, the rights of Lessee hereunder shall terminate and be forfeited upon 180 days' written notice by Lessor, unless Lessee shall have resumed diligent operations within such 180 days. 8. LESSEE USE OF PREMISES. 8.1 Roads. Should Lessee utilize any roads owned by Lessor on the Leased Premises, Lessee shall utilize such roads in a prudent manner and so as not to interfere with Lessor's use thereof and Lessee shall, pay all costs of any improvements thereto for its usage, said improvements requiring Lessor's written consent, and Lessee shall maintain said roads in good condition during such usage. 8.2 Damages and Repairs. Lessee assumes for itself, its agents and invitees, the liability for prompt payment to Lessor for any and all damages to Lessor's property, equipment, timber, water -wells and other improvements located on the Leased Premises which may be caused by the operations of Lessee, its agents and invitees on said lands. Lessee will repair all damage to the surface of the Leased Premises caused by the operations of itself, its agents, and its invitees, and Lessee shall restore the Leased Premises to a condition as near as reasonably practicable to its former condition. Lessee shall make a good faith effort to comply with Lessor's written request to bury a pipeline to a specified depth if it determines same to be reasonable. OIL AND GAS LEASE (PAID -UP) Rev. 2016-00 Page 5 9. WARRANTY OF TITLE. 9.1 Warranty. Lessor hereby warrants and agrees to defend the title to the Leased Premises described and agrees that the Lessee, at its option, may pay and discharge in whole or in part any taxes, mortgages, or other liens existing, levied, or assessed on or against the Leased Premises and, in event it exercises such option, it shall be subrogated to the rights of any holder or holders thereof and may reimburse itself by applying to the discharge of any such mortgage, tax or other lien, any royalty occurring hereunder. Lessor warrants specifically only such title to the oil, gas, and associated substances withdrawn from the Leased Premises as it may have, if any. Lessee's sole and exclusive remedy shall be for any monies, royalties or other things of value received by Lessor for or on account of such oil, gas, and associated substances the title to which shall have failed. 9.2 Third Party Claims. In the event oil, gas, and associated substances under the Leased Premises, or any part thereof, or any interest in such oil, gas and associated substances or in the royalties payable hereunder with respect thereto, is claimed by others, Lessee shall have the right to withhold without liability for interest thereon, payment of such royalties to the extent of such claim, or to deposit in escrow such royalties in a court of competent jurisdiction until final determination of such claim; provided, however, that Lessor shall have the right, in case of any such adverse claim and the withholding of such royalties, to payment of same to it upon furnishing a bond or other security satisfactory to Lessee as indemnity against such claim until finally determined. 10. TERMINATION PROVISIONS. At such time as this lease or any portion thereof expires or is terminated, for any reason whatsoever, Lessee agrees to furnish Lessor, within sixty (60) days of request, a Quitclaim Deed or Release covering this lease or any portion of the Leased Premises so affected in appropriate form and duly executed, in order that the Quitclaim Deed or Release may be placed on public record. Lessee shall have a reasonable period of time from the date of said Quitclaim Deed or Release to remove therefrom any property or fixtures placed by Lessee on abandoned land. Any property or fixtures of Lessee left on the abandoned land after the appropriate removal date has lapsed shall, at the option of Lessor, become Lessor's property and fixtures or be removed from said land at the direction of Lessor but at the sole expense of Lessee. 11. NOTICES. All notices necessary to be given under the terms of this agreement shall be directed as follows: Lessor: Harold D. Hale and Katherine E. Hale P.O. Box 687 OIL AND GAS LEASE (PAID -UP) Rev.2016-00 Page 6 Anchor Point, AK 99556 Telephone: Lessee: Hilcorp Alaska, LLC 3800 Centerpoint Dr., Suite 1400 Anchorage, AK 99503 ATTN: Land Manager Telephone: (907) 777-8300 H Fax: (907) 777-8301 or to such other address as each party hereto may designate by written notice to the other party. Notice shall be deemed given when actually received by the party entitled to notice or five (5) business days after being sent by certified mail, "return receipt requested," to the last known address of the party entitled to notice. 12. POOLING. Lessee at its option may pool or combine separate oil, gas, and associated substances in any part or parts of the Leased Premises with other leased lands to form a drilling unit, provided that there be no more than six hundred and forty (640) acres for such combined area, plus a tolerance of 10% thereof, and on each of such unit or units a well (or wells) has been or may be drilled. Notwithstanding anything to the contrary contained in this lease, the commencement of operations for the drilling of a well on any such drilling unit shall have the same force and effect in all respects as the commencement of operations for the drilling of a well on the Leased Premises hereby leased; and drilling or reworking operations conducted on any drilling unit or production of oil, gas, and associated substances anywhere from such drilling unit shall have the same force and effect as drilling or reworking operations conducted on or production obtained from the Leased Premises as to the extension of the term of this lease; provided, however, that in lieu of the royalties elsewhere herein specified, Lessor shall receive from production so pooled such portion of the royalties stipulated herein as the number of acres of the Leased Premises included in such unit bears to the total number of acres in such unit; provided, however, no reduction of shut-in royalties shall be made under this provision. 13. UNITIZATION. 13.1 Unitization. The Lessee may unite with others, jointly or separately, in collectively adopting and operating under a cooperative or unit agreement for the exploration, development, or operation of the pool, field, or like area or part of the pool, field, or like area that includes or underlies the Leased Premises or any part of the Leased Premises. 13.2 Alteration of Lease Terms. With the consent of the Lessee, and if the Leased Premises is committed to an approved unit agreement, the Lessor herein agrees OIL AND GAS LEASE (PAID -UP) Rev. 2016-00 Page 7 that the state may establish, alter, change, or revoke drilling, producing, and royalty requirements of this lease as the state determines necessary or proper. This lease will be extended automatically if all or part of the Leased Premises is committed to an approved unit agreement and will remain in effect for so long as all or part of the Leased Premises remains committed to that unit agreement. 14. OFFSET WELLS. The Lessee shall drill such wells as a reasonable and prudent operator would drill to protect the Leased Premises from loss by reason of drainage resulting from production on other land. Without limiting the generality of the foregoing sentence, if oil or gas is produced in a well on land other than the Leased Premises, and that well is within 500 feet in the case of an oil well or 1,500 feet in the case of a gas well of lands then subject to this lease, and that well produces oil or gas for a period of 30 consecutive days in quantities that would appear to a reasonable and prudent operator to be sufficient to recover ordinary costs of drilling, completing, and producing an additional well in the same geological structure at an offset location with a reasonable profit to the operator, and that production from that well is draining this Leased Premises, then the Lessee shall within 60 days begin in good faith and diligently prosecute drilling operations for an offset well on the Leased Premises. 15. DEFINITIONS. The following words have the following meanings unless the context unavoidably requires otherwise: "Associated Substances" means all substances produced as an incident of production of oil or gas by ordinary production methods and not defined in this lease as oil or gas; "Drilling" means the act of boring a hole to reach a proposed bottom hole location through which oil or gas may be produced if encountered in paying quantities, and include redrilling, sidetracking, deepening, or other means necessary to reach the proposed bottom hole location, testing, logging, plugging, and other operations necessary and incidental to the actual boring of the hole; "Gas" means all natural gas (except helium gas) and all other hydrocarbons produced that are not defined in this lease as oil, including gas produced from coal formations or seams; "Oil" means crude petroleum oil and other hydrocarbons, regardless of gravity, that are produced in liquid form by ordinary production methods, including liquid hydrocarbons known as distillate or condensate recovered by separation from gas other than at a gas processing plant; OIL AND GAS LEASE (PAID -UP) Rev.2016-00 Page 8 "Paying Quantities" means quantities sufficient to yield a return in excess of out-of- pocket operating costs, even if drilling and equipment costs may never be repaid and the undertaking considered as a whole may ultimately result in a loss; quantities are insufficient to yield a return in excess of out-of-pocket operating costs unless those quantities, not considering the costs of transportation and marketing, will produce sufficient revenue to induce a prudent operator to produce those quantities. "Reworking Operations" means all operations designed to secure, restore, or improve production through some use of a hole previously drilled, including, but not limited to, mechanical or chemical treatment of any horizon, plugging back to test higher strata, etc. 16. BINDING AGREEMENT. This lease states the entire agreement between the parties, and no representation, promise, verbal or written, on behalf of either party shall be binding unless contained herein. This agreement shall be binding upon each of the parties who shall execute the same, regardless of whether or not all of the parties named as Lessor shall execute it. This agreement may be executed in counterpart form and all counterparts together shall be considered as one instrument. IN WITNESS WHEREOF, the parties hereto have caused this Oil and Gas Lease to be executed the day and year first hereinabove written. LESSOR(S) Signature: Name: Harold D. Hale Title: Date: Signature: Name: Katherine E. Hale Title: Date: LESSEE: HILCORP ALASKA, LLC Signature: Name: Title: Date: Acknowledgments on Following Pages OIL AND GAS LEASE (PAID -UP) Rev. 2016-00 Page 9 ACKNOWLEDGEMENT OF LESSOR STATE OF ) ss. COUNTY OF The foregoing instrument was acknowledged before me this 2023, by STATE OF ) ss. COUNTY OF day of Notary Public in and for the State of My commission expires: The foregoing instrument was acknowledged before me this 2023, by day of Notary Public in and for the State of My commission expires: ACKNOWLEDGEMENT OF LESSEE STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) The foregoing instrument was acknowledged before me this day of 2023, by of Hilcorp Alaska, LLC, a Delaware limited liability company, on behalf of the limited liability company. Notary Public in and for Alaska My Commission Expires: OIL AND GAS LEASE (PAID -UP) Rev. 2016-00 Page 10 EXHIBIT "A" OIL AND GAS LEASE THIS OIL AND GAS LEASE made as of day of , 2023, by and between Harold D. Hale and Katherine E. Hale, hereinafter called "Lessor", and Hilcorp Alaska, LLC, hereinafter called "Lessee". LEGAL DESCRIPTION Township 3 South, Range 15 West, Seward Meridian, Alaska Section 25: Sonnichsen Subdivision 1990 Addition Tract No. 213, Plat No. 91-32, AK Containing 9.3 acres, more or less. OIL AND GAS LEASE (PAID -UP) Rev.2016-00 Page II EXHIBIT "B" OIL AND GAS LEASE SURFACE LIMITATION RIDER ATTACHED TO AND BY REFERENCE MADE A PART OF THAT CERTAIN OIL AND GAS LEASE made as of day of , 2023, by and between Harold D. Hale and Katherine E. Hale, hereinafter called "Lessor", and Hilcorp Alaska, LLC, hereinafter called "Lessee". LEGAL DESCRIPTION Township 3 South, Range 15 West, Seward Meridian, Alaska Section 25: Sonnichsen Subdivision 1990 Addition Tract No. 2B, Plat No. 91-32, AK Containing 9.3 acres, more or less. SURFACE LIMITATIONS. Lessee agrees that it will conduct no operations on the surface of said land, unless agreed upon between the surface owner and Lessee. It is further agreed and understood that Lessee shall have the right to drill and operate directional wells through and under said land, irrespective of the bottom whole locations of said wells. To this end, Lessor hereby grants to Lessee a subsurface easement for all purposes associated with such directional wells. Lessee agrees that said subsurface easement shall commence at and continue below the depth of 500 feet. To the extent that terms in this Exhibit `B" conflict with those in the Lease, the terms in this Exhibit "B" shall govern. Lessor: Harold D. Hale Signature: Lessor: Katherine E. Hale Signature: HILCORP ALASKA, LLC Signature: Lessor/Date Lessor/Date Lessee/Date OIL AND GAS LEASE (PAID -UP) Rev.2016-00 Page12 EXHIBIT `B" OIL AND GAS LEASE SURFACE LIMITATION RIDER ATTACHED TO AND BY REFERENCE MADE A PART OF THAT CERTAIN OIL AND GAS LEASE made as of day of , 2023, by and between Harold D. Hale and Katherine E. Hale, hereinafter called "Lessor", and Hilcorp Alaska, LLC, hereinafter called "Lessee". LEGAL DESCRIPTION Township 3 South, Range 15 West, Seward Meridian, Alaska Section 3 South, Range 15 West, Seward Meridian, Alaska Section 25: Sonnichsen Subdivision 1990 Addition Tract No. 213, Plat No. 91-32, AK Containing 9.3 acres, more or less. SURFACE LIMITATIONS. Lessee agrees that it will conduct no operations on the surface of said land, unless agreed upon between the surface owner and Lessee. It is further agreed and understood that Lessee shall have the right to drill and operate directional wells through and under said land, irrespective of the bottom whole locations of said wells. To this end, Lessor hereby grants to Lessee a subsurface easement for all purposes associated with such directional wells. Lessee agrees that said subsurface easement shall commence at and continue below the depth of 500 feet. To the extent that terms in this Exhibit `B" conflict with those in the Lease, the terms in this Exhibit `B" shall govern. Lessor: Harold D. Hale Signature: Lessor: Katherine E. Hale Signature: HILCORP ALASKA, LLC Signature: By: OIL AND GAS LEASE (PAID -UP) Rev.2016-00 Lessor/Date Lessor/Date Lessee/Date Page 1 W�A ■■ Request for Taxpayer Give Form to the Form V Identification Number and Certification requester. Do not (Rev. October 2018) Department of the Treasury send to the IRS. Internal Revenue Service ► Go to www.irs.gov/FormW9 for instructions and the latest information. 1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank. 2 Business name/disregarded entity name, if different from above m 3 Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the 4 Exemptions (codes apply only to its following seven boxes. certain entities, not individuals; see n instructions on page 3): o ❑ Individual/sole proprietor or ❑ C Corporation ❑ S Corporation ❑ Partnership ❑ Trust/estate single -member LLC Exempt payee code (if any) c no ❑ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership) ► p Note: Check the appropriate box in the line above for the tax classification of the single -member owner. Do not check Exemption from FATCA reporting m LLC if the LLC is classified as a single -member LLC that is disregarded from the owner unless the owner of the LLC is code (if any) another LLC that is not disregarded from the owner for U.S. federal tax purposes. Otherwise, a single -member LLC that S B is disregarded from the owner should check the appropriate box for the tax classification of its owner. '0 ❑ Other (see instructions) ► (Applies to accwnN meinteMe� oulv0¢We U.S.) y 5 Address (number, street, and apt. or suite no.) See instructions. Requester's name and address (optionall m m N 8 City, state, and ZIP code 7 List account numbers) here (optional) Taxpayer Identification Number (TIN) Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid I social security number backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other - m _ entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later. or Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and I Employer identification number Number To Give the Requester for guidelines on whose number to enter. n-1 Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and 2. 1 am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and 3. 1 am a U.S. citizen or other U.S. person (defined below); and 4. The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part 11, later. wgin Signature of Here I U.S. parson ► Date ► General Instructions Section references are to the Internal Revenue Code unless otherwise noted. Future developments. For the latest information about developments related to Form W-9 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/FormW9. Purpose of Form An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following. • Form 1099-INT (interest earned or paid) • Form 1099-DIV (dividends, including those from stocks or mutual funds) • Form 1099-MISC (various types of income, prizes, awards, or gross proceeds) • Form 1099-8 (stock or mutual fund sales and certain other transactions by brokers) • Form 1099-5 (proceeds from real estate transactions) • Form 1099-K (merchant card and third party network transactions) • Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition) • Form 1099-C (canceled debt) • Form 1099-A (acquisition or abandonment of secured property) Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN. If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding, later. Cat. No. 10231X Form W-9 (Rev. 10-2018) Request for Taxpayer Give Form to the Form V_Q Identification Number and Certification requester. Do not (Rev. October 2018) send to the IRS. Departmemofthe Tmasury Internal Revenue Service Go to www.lrs.gov/FormW9 for instructions and the latest information. t Name (as shown on your income tax return). Name is required on this line; do not leave this line blank. 2 Business name/disregarded entity name, if different from above M 3 Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the 4 Exemptions (codes apply only to m following seven boxes. certain entities, not individuals; see o. instructions on page 3): p [IIndividual/sole proprietor or [IC Corporation [IS Corporation ElPartnership ❑ Trust/estate m single -member LLC Exempt payee code (if any) js'�'t ❑ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership)► p 2 Note: Check the appropriate box in the line above for the tax classification of the single -member owner. Do not check Exemption from FATCA reporting 5 LLC if the LLC is classified as a single -member LLC that is disregarded from the owner unless the owner of the LLC is gods (if any) another LLC that is not disregarded from the owner for U.S. federal tax purposes. Otherwise, a single -member LLC that a is disregarded from the owner should check the appropriate box for the tax classification of its owner. .� ❑ Other (sea instructions)► (Appasas nts,,,•mrmoumee frous) y 5 Address (number, street, and apt. or suite no.) See instructions. Requester's name and address (optional) m v n 6 City, state, and ZIP code 7 List account numbers) here (optional) Taxpayer Identification Number (TIN) Enter your TIN in the appropriate box. The TIN provided must match the name given online 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other 1 sonar security number I entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later. or Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and identification number Number To Give the Requester for guidelines on whose number to enter. I�Employer I I 1 Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and 2. 1 am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and 3. 1 am a U.S. citizen or other U.S. person (defined below); and 4. The FATCA codes) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part 11, later. blgn Signature of Here I U.S. person ► Date ► General Instructions Section references are to the Internal Revenue Code unless otherwise noted. Future developments. For the latest information about developments related to Form W-9 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/FormW9. Purpose of Form An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following. • Form 1099-INT (interest earned or paid) • Form 1099-DIV (dividends, including those from stocks or mutual funds) • Form 1099-MISC (various types of income, prizes, awards, or gross proceeds) • Form 1099-B (stock or mutual fund sales and certain other transactions by brokers) • Form 1099-5 (proceeds from real estate transactions) • Form 1099-K (merchant card and third party network transactions) • Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition) • Form 1099-C (canceled debt) • Form 1099-A (acquisition or abandonment of secured property) Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN. If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding, later. Cat. No. 10231x Form W-9 (Rev. 10-2018)