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Home My WebLink AboutO 208Other Order 208 Docket Number: OTH-23-018 1. -------------- Email chain regarding regulations 2. April 21, 2023 Hilcorp self-report of unauthorized injection 3. June 27, 2023 AOGCC notice of investigation to Hilcorp 4. July 21, 2023 Additional document for unauthorized injection 5. December 1, 2023 AOGCC notice of proposed enforcement 6. December 7, 2023 Hilcorp Request for informal review 7. January 18, 2024 Hilcorp reconsideration request 8. February 20, 2024 Hilcorp civil penalty payment STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage Alaska 99501 Re: Unauthorized Injection into the Schrader Bluff Oil Pool in Orion Development Area, L-109 (PTD 2012010), Sundry Approval 302-263, Condition of Approval Area Injection Order (AIO) 26C Unauthorized Injection of Miscible Injectant into Polaris Oil Pool in S-104 (PTD 2001960), Unauthorized Commingling of Miscible Injectant into Polaris/Aurora Oil Pool in S-104 (PTD 2001960), Sundry Approval 321-043, Condition of Approval AIO 25A (Polaris), AIO 22F (Aurora) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Docket Number: OTH-23-018 Other Order 208 Prudhoe Bay Unit Prudhoe Bay Field Schrader Bluff Oil Pool Borealis Oil Pool Polaris Oil Pool Aurora Oil Pool February 6, 2024 DECISION AND ORDER On December 1, 2023, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to Hilcorp North Slope, LLC (Hilcorp) regarding the L-109 and S-104 wells. The Notice proposed a $452,100 civil penalty under AS 31.05.150(a). Hilcorp timely requested an informal review. That review was held December 12, 2023, and January 16, 2024. Hilcorp also submitted a written response dated January 18, 2024, which AOGCC has considered as part of its informal review process. This decision and order now follow. SUMMARY OF PROPOSED ENFORCEMENT ACTION: The Notice identified violations by Hilcorp of: L-109 Well: Hilcorp violated a condition of approval of Sundry Approval 302-263, issued on August 22, 2002, which restricted the L-109 well to Kuparuk (aka Borealis) injection only. S-104 Well: For the S-104 well, Hilcorp violated the provisions of Rule 2 (“Fluid Injection Wells”) of AIO 25A, which limited enriched gas injection in the Polaris Oil Pool to three wells (S-215i, W-208i, and W-215i) and provided procedures for obtaining enriched gas injection authority for additional wells. By commingling enriched gas injection in the S-104 well, Hilcorp violated the provisions of Rule 7 of AIO 25A (“Multiple Completion of Water Injection Wells”), which only authorizes commingled water injection for Polaris Oil Pool injection wells. This is also a violation of a Other Order 208 February 6, 2024 Page 2 of 5 condition of approval of Sundry Approval 321-043, issued on January 28, 2021, which approved downhole commingling in the S-104 well but restricted that approval to water only. AOGCC regulation 20 AAC 25.215(c) (Commingling of production and injection into two or more pools) states: “injection into two or more pools within the same wellbore is not permitted unless, after request, notice, and opportunity for public hearing in accordance with 20 AAC 25.540, the commission (1) finds that the proposed injection activity will not result in waste or damage to a pool and that injection volumes can be properly allocated; and (2) issues an order providing for injection into wellbores completed to allow for simultaneous injection into two or more pools.” Hilcorp violated this regulation for the S-104 well. The Notice proposed civil penalties of $452,100 as follows.1. L-109 Well: - $75,000 – initial violation (L-109) unauthorized injection into the Schrader Bluff-Orion Oil Pool in violation of Sundry Approval 302-263. - $142,500 - $7,500 for each day of the 19 days L-109 was operable/injecting when unauthorized. - $1,900 - $100 for each day of the 19 days injection was incorrectly allocated and reported for L-109. S-104 Well: - $75,000 – initial violation (S-104) unauthorized commingled enriched gas injection in violation of AIO 25A and Sundry Approval 321-043. - $52,500 - $7,500 for each day of the 7 days S-104 was operable/injecting enriched gas when unauthorized. - $85,200 - $100 for each day (March 1, 2021, to June 30, 2023 (852 days)) commingled injection was incorrectly allocated and reported for S-104. - $20,000 - $100 for each day (July 16, 2020, to January 31, 2021, (200 days)) injection volumes were reported to the Aurora Oil Pool when they should have been reported to the Polaris Oil Pool. In addition to the imposed civil penalty, the AOGCC has historically required Hilcorp to provide a detailed written explanation as to how it intends to prevent recurrence of this violation. The AOGCC has also historically required Hilcorp to demonstrate to the AOGCC’s satisfaction a more robust regulatory compliance tracking system that addresses all AOGCC-mandated obligations. For these L-109 and S-104 violations, Hilcorp has completed an internal investigation (emailed to the AOGCC dated June 27, 2023 (L-109) and August 30, 2023 (S-104)) that included a root cause analysis and actions to prevent recurrence. Thus, the AOGCC will not require an additional written explanation from Hilcorp. It is the expectation with every enforcement action that Hilcorp identify, implement, and continue to assess the effectiveness of compliance improvement initiatives. 1 AS 31.05.150(a) provides for not more than $100,000 for the initial violation and not more than $10,000 for each day thereafter on which the violation continues. Other Order 208 February 6, 2024 Page 3 of 5 Informal Review: Hilcorp met with AOGCC staff on December 12, 2023, and January 16, 2024, to review and discuss the Notice and have opportunity to update the status and results of its internal investigation. Hilcorp also provided information to AOGCC on January 4, 2024, and a written statement dated January 18, 2024. Hilcorp did not dispute the violations alleged in the Notice. Hilcorp questioned the penalty amount, suggesting the penalty amount be reduced. Hilcorp also specified that its number of non-compliance events measured against proxy data for Hilcorp activity levels shows a downward trend of incidents since 2012. While it is always AOGCC’s goal to have zero violations, and consequently zero repeat violations, AOGCC does acknowledge the overall downward trend in Hilcorp’s violations as Hilcorp noted during the informal review. It is encouraging to see that Hilcorp is monitoring its compliance history and seeing improving performance in this area. Hilcorp has initiated continued engagement with AOGCC through a data request for historical enforcement and violation records and AOGCC is providing the requested information, where available. While Hilcorp’s overall violations are trending down, the specific violations in this case relating to Hilcorp’s Underground Injection Control Class II practices, do demonstrate repeated instances of failure to comply with AOGCC imposed conditions on a permit or order or failing to obtain prior AOGCC approval before making changes to an approved permit or order, and warrant the imposition of civil penalties as proposed in the Notice. The factors in AS 31.05.150(g)2 have been considered in the determination of penalties for the violations. The penalty does reflect amounts based on per-day assessments. The AOGCC issues injection orders, drilling and sundry permits for enhanced oil recovery projects with specific rules and conditions of approval to ensure injection activities are done safely, in a manner that protects the environment, and won’t cause waste. Injection that violates the injection orders, conditions of approval, and statewide regulations, have necessarily not been reviewed nor approved by AOGCC, and thus has the potential to cause damage to the reservoir(s) that may result in waste of resources and could result in an increased risk of losing containment of the injected fluid(s). Hilcorp’s failures to comply with the fundamental AOGCC regulation, Order, reporting, and Sundry Approval requirements raises the potential for similar behavior with more serious consequences. Consideration of the civil penalty includes Hilcorp’s history of compliance/noncompliance and the need to deter similar behavior(s). Other considerations include no injury to the public or the environment, and Hilcorp’s notification to the AOGCC once Hilcorp determined the well(s) non- compliance(s). The effort made by Hilcorp to correct the violations and prevent future violations and Hilcorp’s cooperation with the investigation were also considered in the setting of the penalty amount. AOGCC tracks and periodically audits for compliance. Nothing above should imply that AOGCC is partially responsible for Hilcorp’s violations, or infer that the penalty amount assessed for days in non-compliance should be reduced for action/inaction on AOGCC’s part. FINDINGS AND CONCLUSIONS: Since Hilcorp did not dispute the alleged violation in the Notice, the section titled “Basis for Finding the Violation or Noncompliance” from the Notice is incorporated by reference into this Decision and Order. 2 AS 31.05.150(g) requires AOGCC to consider nine criteria in setting the amount of a civil penalty. Other Order 208 February 6, 2024 Page 4 of 5 The AOGCC finds that Hilcorp committed the violations as initially alleged in the Notice and restated in the “Summary of Proposed Enforcement Action” above. Hilcorp has not provided any information that would warrant changing the proposed penalty amount. NOW THEREFORE IT IS ORDERED THAT: Hilcorp is assessed a civil penalty in the amount of $452,100 for the violations detailed within this Order. If this Order is not appealed, the fine must be paid within 30 days of issuance. If appealed, the fine will be held in abeyance until the appeal process is complete. In addition to the civil penalty, Hilcorp is required to improve its regulatory compliance by implementing the corrective actions as detailed in the Hilcorp internal investigation reports as emailed to the AOGCC dated June 27, 2023 (L-109) and August 30, 2023 (S-104) that included a root cause analysis and actions to prevent recurrence. As an Operator involved in an enforcement action, Hilcorp is required to preserve documents concerning the above action until after resolution of the proceeding. DONE at Anchorage, Alaska and Dated February 6, 2024. Brett W. Huber, Sr. Jessie L. Chmielowski Chair, Commissioner Commissioner cc: James Robinson, US Environmental Protection Agency, Region 10 Jim Regg, AOGCC Supervisor, Inspections AOGCC Inspectors Dave Roby, AOGCC Sr. Reservoir Engineer Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2024.02.06 14:57:53 -09'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2024.02.06 15:01:44 -09'00' Other Order 208 February 6, 2024 Page 5 of 5 RECONSIDERATION AND APPEAL NOTICE Pursuant to 20 AAC 25.535(d), this order becomes final 11 days after it is issued unless within 10 days after it is issued the person files a written request for a hearing, in which case the proposed decision or order is of no effect. If the person requests a hearing, the commission will schedule a hearing under 20 AAC 25.540. As provided in AS 31.05.080(a), within 20 days after this order becomes final as discussed above, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10-days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. From:Carlisle, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Other Order 208 (Hilcorp) Date:Tuesday, February 6, 2024 3:42:27 PM Attachments:other 208.pdf Unauthorized Injection into the Schrader Bluff Oil Pool in Orion Development Area, L-109 (PTD 2012010), Sundry Approval 302-263, Condition of Approval Area Injection Order (AIO) 26C Unauthorized Injection of Miscible Injectant into Polaris Oil Pool in S-104 (PTD 2001960), Unauthorized Commingling of Miscible Injectant into Polaris/Aurora Oil Pool in S-104 (PTD 2001960), Sundry Approval 321-043, Condition of Approval AIO 25A (Polaris), AIO 22F (Aurora) 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 Count Location Asset Team Date Year Well count% of well counNon-Compliance Notice of Violation Notice of Enforcement Docket AOGCC Action Comments SVS SVS AnnualInjector ComplianceInj Compliance AnnualMetering/ MeasuringMetering/ Measuring AnnualReportingReporting AnnualRigs Rig Annual BOPEBOP AnnualSundry/ PTDSundry/ PTD AnnualOther Other Annual Total13Nikolaevsk Unit - Red PadKenai/ CIO12/16/2012 2012 332 6.93%Commence production w/o approved LACTmeterCorrective actions12/18/12 — Hilcorp contacts AOGCC with notice of SVS testing; AOGCCdetermined by questioning status that well commenced production 12/16/12without LACT meter approval; application for LACT meter received 1/9/121012088 1 32315Swanson River Field: SCU 12A-04; SCU 14-34; SCU 31-08KGSF #1Kenai/ CIO9/30/2013 2013 332 0.60%Defeated SVSMissing Annulus GaugesYNOVKGSF #1 — SVS found defeated during 9/2/13 AOGCC inspection; 3 SCUwells - missing outer annulus pressure gauges; 8/31/13 inspection; Hilcorp resonse 9/10/13; closed out 11/15/1312 0 0 0 0 0 0 0 219Various CI sitesKenai/ CIO12/1/2014 2014 766 1.04% Workover Safety ConcernsMandatory MeetingList of concerns provided to Hilcorp addressing suitability of equipment andprocedures; unsafe working conditions associated with rig workovers;onshoreand offshore Cook Inlet4000121 011831Swanson River Field SCU 44-05Kenai/ CIO12/29/2015 2015 766 1.83% Failure to provide Well Log DataNotice of Proposed EnforcementNotice sent to Operator 12/30/15; Hilcorp response1/13/16; informal review 4/5/16; Final Decision postponed2001321 3 31433Endicott 3-09AEndicott 2-56AEndicott8/26/2016 2016 766 0.26%Defeated SVSFailure to install SSSVYNOVAOGCC Inspector found control line blocked at SVS panel; 9/19/16 mtgrevealed2ndSVS violation (failure to install SSSV in Endicott 2-56A; Hilcorpres onse 10/3/16; closed out 2/27/1712 0 0 0 0 0 0 0 236Granite Pt State 11-24RD(Kuukpik Rig # 5)Kenai/ CIO11/29/2017 2017 766 0.52%Failure to SubmitBOPE Test ReportYNOVTest report required within 5 days (due 10/24/17); not submitted until NOVreceived by Hilcorp; sent 11/29/17; closed out 12/13/1711011011 0 0440Trading Bay Unit M-22Kenai/ CIO9/20/2018 2018 766 0.65% Failure to Submit Well Information YNOV Sent 1 1/1/18; closed out 11/8/180001202 0 1543Milne Point Unit J-26MPU10/16/2019 2019 766 0.65% Defeated SVS YNOV Sent 10/16/19; closed out 11/5/1911 0 1 2 0 1 0 0 549Ninilchik Unit Paxton-I OKenai/ CIO12/15/2020 2020 2531 0.28% Failure to Install Subsurface Safety Valve YNOVSent 2/23/2021; Paxton-IO commenced production 12/1/2020; SSSV required by 12/15/2020; violation discovered 2/5/2021; close out pending successful installation and testin of SSSV in Paxton-10.12 0 1 1 2 0 0 1 756All Hilcorp Service Coil Operations in AlaskaAll12/22/2021 2021 2531 0.32% Emergency OrderCease Service: Coil OperationsInformation request due 12/29/202. Service Coil Tubing operations approved to restart 1/7/2022200021 112860Milne Point Unit S-24,S32, s-35MPU7/29/2022 2022 2531 0.16% Late Suspended Well Inspections YNOV Sent 8/17/20221001200 0 1464Milne Point Unit S-33MPU12/1/2023 2023 2531 0.16% Failure to PT injector Y OTH-23-026 Enforcement- Pending01 3 0 0 0 0 1 0 40%1%2%3%4%5%6%7%8%05101520252012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Non‐compliance event/ Total wells operated Number of AOGCC documented non‐complience eventsOther AnnualSundry/ PTD AnnualBOP AnnualRig AnnualReporting AnnualMetering/ Measuring AnnualInj Compliance AnnualSVS Annual% of well count 8 Hilcorp North Slope, LLC P.O.Box 61229 Houstnn TX 77909-1999 Owner: 40012563 Check Date: 02/13/2024 Check Number: 1 44026533 SAPa N4 inv, k7at6 tnvaiCa N4 i3icaueit 1Het );mount: 1900143451 02/01 /2024 RECEIVED FEB 2 0 2024 AOGCC OTHERORDER208 $0.00 $452,100.00 THIS CHECK IS PRINTED ON CHEMICALLY REACTIVE PAPERTHAT HAS VISIBLE FIBERS AND A WATERMARK—HOLDTO LIGHTTO VIEW 1131 Hilcorp North Slope, LLC P.O.Box 61229 Houston TX 77208-1229 PAY TO THE ORDER OF Void After 90 Days Check No Check Date Check Amount 44026533 102/ 13/2024 j * * * * $452,100.00 Four Hundred Fifty -Two Thousand One Hundred Dollars And Zero Cents STATE OF ALASKA AOGCC 333 WEST 7TH AVE ANCHORAGE AK 99501-3539 i Authorized Signature 11.44026533110 1:113110 586l: 044441339311• 7 Hilcorp North Slope, LLC Vanessa Hughes, PBW Asset Team Lead 3800 Centerpoint Dr, Suite 1400 Anchorage, Alaska 99503 01/18/2024 Chairman Brett Huber, Sr Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, Alaska 99501 Subject: Reconsideration Request OTH-23-018: Notice of Proposed Enforcement Action. Dear Chairman Huber, Based on information provided by Hilcorp on 1/4/2024 and discussed with AOGCC staff on 1/16/2024 in an informal review of OTH-23-018 and OTH-23-026, Hilcorp requests reconsideration of the following statement in OTH-23-018: Notice of Proposed Enforcement Action due to unauthorized injection into PBU wells L-109 and S- 104: “Repeat violations call into question the effectiveness of Hilcorp’s efforts to improve its regulatory compliance.” Hilcorp respectfully disagrees with this statement based on analysis of AOGCC compiled data. The number of non-compliance events measured against proxy data for Hilcorp activity levels shows a downward trend of incidents since 2012. Additionally, Hilcorp notes that the number of compliance events is currently at an annual all-time low. Hilcorp strives for continued reduction of non-compliance events and conducts timely investigations of incidents and implementation of substantive actions to prevent recurrence. If you have any questions, please call me at 907-777-8445. Sincerely, Vanessa Hughes PBW Asset Team Lead Digitally signed by Vanessa Hughes (793) DN: cn=Vanessa Hughes (793) Date: 2024.01.18 11:29:11 - 09'00' Vanessa Hughes (793) 6 CAUTION: External sender. DO NOT open links or attachments from UNKNOWN senders. From:Aras Worthington To:Carlisle, Samantha J (OGC) Cc:Vanessa Hughes; Torin Roschinger; Oliver Sternicki Subject:RE: [EXTERNAL] Hilcorp L-109 S-104 NOE unauthorized injection Date:Thursday, December 7, 2023 11:25:39 AM Yes Samantha that will work – apologies for the delayed response. Thank you, Aras From: Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> Sent: Thursday, December 7, 2023 11:00 AM To: Aras Worthington <Aras.Worthington@hilcorp.com> Cc: Vanessa Hughes <vhughes@hilcorp.com>; Torin Roschinger <Torin.Roschinger@hilcorp.com>; Oliver Sternicki <Oliver.Sternicki@hilcorp.com> Subject: RE: [EXTERNAL] Hilcorp L-109 S-104 NOE unauthorized injection Hi Aras – just wanted to follow up on this and see if 11am will work for Hilcorp? We have a scheduling conflict for the 1pm time. Thank you, Samantha Carlisle Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 From: Carlisle, Samantha J (OGC) Sent: Wednesday, December 6, 2023 10:32 AM To: Aras Worthington <Aras.Worthington@hilcorp.com> Cc: Vanessa Hughes <vhughes@hilcorp.com>; Torin Roschinger <Torin.Roschinger@hilcorp.com>; Oliver Sternicki <Oliver.Sternicki@hilcorp.com> Subject: RE: [EXTERNAL] Hilcorp L-109 S-104 NOE unauthorized injection Sorry, Aras – we have a scheduling conflict that just got put on the calendar. Can Hilcorp come Tuesday at 11am? From: Aras Worthington <Aras.Worthington@hilcorp.com> Sent: Wednesday, December 6, 2023 10:16 AM To: Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> 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. Cc: Vanessa Hughes <vhughes@hilcorp.com>; Torin Roschinger <Torin.Roschinger@hilcorp.com>; Oliver Sternicki <Oliver.Sternicki@hilcorp.com> Subject: RE: [EXTERNAL] Hilcorp L-109 S-104 NOE unauthorized injection Good Morning! Yes, this works - thank you Samantha. Aras From: Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> Sent: Wednesday, December 6, 2023 8:12 AM To: Aras Worthington <Aras.Worthington@hilcorp.com> Cc: Vanessa Hughes <vhughes@hilcorp.com>; Torin Roschinger <Torin.Roschinger@hilcorp.com>; Oliver Sternicki <Oliver.Sternicki@hilcorp.com> Subject: RE: [EXTERNAL] Hilcorp L-109 S-104 NOE unauthorized injection Good morning Aras, I am looking to Tuesday December 12 at 1pm, does this work for Hilcorp? Thank you, Samantha Carlisle Special Assistant (907) 793-1223 From: Aras Worthington <Aras.Worthington@hilcorp.com> Sent: Tuesday, December 5, 2023 2:43 PM To: Huber, Brett W (OGC) <brett.huber@alaska.gov>; Rixse, Melvin G (OGC) <melvin.rixse@alaska.gov>; Boman, Wade C (OGC) <wade.boman@alaska.gov>; Roby, David S (OGC) <dave.roby@alaska.gov>; Wallace, Chris D (OGC) <chris.wallace@alaska.gov>; Regg, James B (OGC) <jim.regg@alaska.gov>; Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> Cc: Vanessa Hughes <vhughes@hilcorp.com>; Torin Roschinger <Torin.Roschinger@hilcorp.com>; Oliver Sternicki <Oliver.Sternicki@hilcorp.com> Subject: [EXTERNAL] Hilcorp L-109 S-104 NOE unauthorized injection Chairman Huber, CAUTION: External sender. DO NOT open links or attachments from UNKNOWN senders. Hilcorp requests an informal review of the attached NOE. Please advise us of when would be a convenient time to hold this review. Thanks and Best Regards, Aras Worthington Sr. Operations Engineer, PE Hilcorp North Slope Aras.worthington@hilcorp.com 907-564-4763 907-440-7692 mobile From: Carlisle, Samantha J (OGC) <samantha.carlisle@alaska.gov> Sent: Friday, December 1, 2023 1:34 PM To: Torin Roschinger <Torin.Roschinger@hilcorp.com>; Vanessa Hughes <vhughes@hilcorp.com> Cc: Aras Worthington <Aras.Worthington@hilcorp.com> Subject: [EXTERNAL] Hilcorp L-109 S-104 NOE unauthorized injection Please see attached, a certified hard copy will follow in the mail. Docket Number: OTH-23-018 Notice of Proposed Enforcement Action Unauthorized Injection into the Schrader Bluff Oil Pool in Orion Development Area, L-109 (PTD 2012010) Sundry Approval 302-263 Condition of Approval Area Injection Order (AIO) 26C Prudhoe Bay Unit (PBU), Prudhoe Bay Field (PBF), Borealis Oil Pool Unauthorized Injection of Miscible Injectant into Polaris Oil Pool in S-104 (PTD 2001960) Unauthorized Commingling of Miscible Injectant into Polaris/Aurora Oil Pools in S- 104 (PTD 2001960) Sundry Approval 321-043 Condition of Approval AIO 25A (Polaris), AIO 22F (Aurora) PBU, PBF, Aurora Oil Pool, Polaris Oil Pool Thank you, Samantha Carlisle Special Assistant Alaska Oil and Gas Conservation Commission th 333 West 7 Avenue Anchorage, AK 99501 (907) 793-1223 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. 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 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. 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, please immediately 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. 5 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov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¶VDFWLRQ$Q\DFWLRQ GHVFULEHGKHUHLQRUWDNHQDIWHUDQLQIRUPDOUHYLHZRUKHDULQJGRHVQRWOLPLWWKHDFWLRQWKH$2*&& PD\WDNHXQGHU$6 6LQFHUHO\ %UHWW:+XEHU6U &KDLU&RPPLVVLRQHU FF -DPHV5RELQVRQ86(QYLURQPHQWDO3URWHFWLRQ$JHQF\5HJLRQ -LP5HJJ$2*&&6XSHUYLVRU,QVSHFWLRQV $2*&&,QVSHFWRUV 'DYH5RE\$2*&&6U5HVHUYRLU(QJLQHHU Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2023.12.01 13:10:43 -09'00' 4 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:Wallace, Chris D (OGC) To:Carlisle, Samantha J (OGC) Cc:Roby, David S (OGC) Subject:Fwd: Injector S-104 (PTD# 200196) Notification of unauthorized commingled enriched gas injection into Polaris/ Aurora pools. Date:Friday, July 21, 2023 4:07:12 PM Attachments:image001.png Samantha, Additional document for OTH-23-018. Regards Chris From: Oliver Sternicki <Oliver.Sternicki@hilcorp.com> Sent: Friday, July 21, 2023 3:56:09 PM To: Wallace, Chris D (OGC) <chris.wallace@alaska.gov>; Roby, David S (OGC) <dave.roby@alaska.gov> Cc: Torin Roschinger <Torin.Roschinger@hilcorp.com> Subject: RE: Injector S-104 (PTD# 200196) Notification of unauthorized commingled enriched gas injection into Polaris/ Aurora pools. Mr. Wallace, On 7/21/2023 Hilcorp North Slope, LLC found that commingled Polaris/ Aurora water injector S-104 (PTD# 200196) was on placed on MI service beginning 07/15/2023 without authorization to inject MI into the Polaris pool and without authorization to commingle inject MI into the Polaris/ Aurora pools. We are self-reporting this incident immediately upon discovery and the well has been placed back on produced water injection. This unauthorized injection was found while reviewing wells related to the investigation actions of the L-109 (PTD# 201201) misinjection incident, reported to the AOGCC on 04/21/2023. The well is authorized to commingle inject produced water into the Polaris/ Aurora pools under sundry 321- 043 and has done so since 2021. We are beginning an investigation into this incident and will communicate the findings and actions to the AOGCC in a timely manner. Please contact me with any questions or concerns, Oliver Sternicki Hilcorp Alaska, Hilcorp North Slope LLC Well Integrity Supervisor Office: (907) 564 4891 Cell: (907) 350 0759 Oliver.Sternicki@hilcorp.com 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 orif 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 immediatelynotify 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 the onward transmission, opening, or use of this message and anyattachments will not adversely affect its systems or data. No responsibility is accepted by the company in this regard and the recipient should carry out such virus and other checks as it considersappropriate. 3 Hilcorp North Slope, LLC Torin Roschinger, PBW Operations Manager 3800 Centerpoint Dr, Suite 1400 Anchorage, Alaska 99503 06/27/2023 Chairman Brett Huber, Sr. Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, Alaska 99501 Subject: Investigation of Self-reported Unauthorized Injection into PBU Orion L-109 (PTD# 201-201), Hilcorp North Slope (HNS), LLC. Dear Chairman Huber, Please see below for investigation information compiled regarding the self-reported discovery of unauthorized injection of produced water into PBU Polaris L-109 (PTD# 201-201) between 04/03/2023- 04/21/2023. Well History and Event Summary: L-109 was approved for conversion from a pre-produced injector to a WAG injector under Sundry #302-263 on 08/31/2002. The original drill well sundry approved L-109 as a multi-zone completion in both the Kuparuk pool and the Schrader Bluff pool but did not authorize injection into the Schrader Bluff pool. In March of 2023, a well program was developed and executed to isolate the Kuparuk pool and begin injection into the Schrader Bluff pool to provide support to two drill wells, L-205 and L-231. The well was put on water injection 04/03/2023. L-109 then remained on water injection until the operations engineer discovered the misinjection on 04/21/2023, at which time the well was shut-in and the AOGCC immediately notified. Investigation Details: Length of time unauthorized produced water injection took place: 04/03/2023-04/21/2023 Root cause of the incident: Based on an investigation of the incident the root causes were found to be: Inadequate work process: x Wellwork to redirect injection from Kuparuk pool to Schrader Bluff pool completed prior to receiving sundry approval. Inadequate training: x Injection service change verification requirements not clearly communicated to staff. Immediate Cause: Operation of equipment without authority x Well placed on injection into the Schrader Bluff pool prior to receiving sundry approval. By Samantha Carlisle at 10:11 am, Jun 28, 2023 System Cause: Improper decision making x Hilcorp failed to recognize the WAG Conversion Sundry approved injection into the Kuparuk pool only. x Hilcorp failed to document and communicate potential risk of unauthorized injection into Schrader Bluff pool due to multi-zone completion design. Actions to prevent recurrence: x Internal review of all wells completed across multiple zones with stacker packer completions to verify if injection is authorized into each zone. If injection is not authorized, the wellbore schematic and AKIMS will be updated to reflect this. x Upon completion of this review, communicate and training of Operations and Reservoir Engineers will be performed to familiarize them with information resources regarding well pool authorization and wellbore schematics and AKIMS updates. To be completed by 07/31/2023. If you have any questions, please call me at 907-564-4887 or Oliver Sternicki at 907-564-4891. Sincerely, Torin Roschinger PBW Operations Manager Digitally signed by Torin Roschinger (4662) DN: cn=Torin Roschinger (4662), ou=Users Date: 2023.06.27 17:12:51 -08'00' Torin Roschinger (4662) 2 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:Oliver Sternicki To:Roby, David S (OGC); Wallace, Chris D (OGC) Subject:L-109 (PTD# 201201)Self report of misinjection into Schrader Bluff- Orion pool Date:Friday, April 21, 2023 3:49:30 PM Attachments:EXTERNAL RE L-109 (PTD# 201201) Pool injection clarification .msg Dave, Chris, Regarding the attached communication we had yesterday pertaining to authorized injection strata for well L-109 (PTD# 201201), Hilcorp North Slope, LLC is self-reporting unauthorized injection into the Schrader Bluff- Orion pool from 4/3/23-4/21/23, with a total injected volume of 32340 BBLs produced water. Immediately after your clarification email yesterday L-109 was shut-in and freeze protected. This incident is currently under investigation and we will provide you with the incident summary, root cause analysis and actions to prevent recurrence once the investigation is complete. Let me know if you have any questions at this time. Regards, Oliver Sternicki Hilcorp Alaska, Hilcorp North Slope LLC Well Integrity Engineer Office: (907) 564 4891 Cell: (907) 350 0759 Oliver.Sternicki@hilcorp.com 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. 1 From:Roby, David S (CED) To:Brian Glasheen; Oliver Sternicki Cc:Rixse, Melvin G (CED); Boyer, David L (CED); Wallace, Chris D (CED) Subject:RE: [EXTERNAL] Sundry application to downhole commingle injection in PBU S-104 (PTD 200-196) Date:Friday, January 22, 2021 12:31:20 PM Brian, Yes, that allocation process will work. Yes, for this well if you ever do switch to MI you will either need to close off one of the zones or apply for authorization to downhole commingle the MI, assuming that is that pool wide commingled injection hadn’t already been approved and included MI. Regards, Dave Roby 907-793-1232 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Dave Roby at 907-793-1232 or dave.roby@alaska.gov. From: Brian Glasheen <Brian.Glasheen@hilcorp.com> Sent: Friday, January 22, 2021 12:14 PM To: Roby, David S (CED) <dave.roby@alaska.gov>; Oliver Sternicki <Oliver.Sternicki@hilcorp.com> Cc: Rixse, Melvin G (CED) <melvin.rixse@alaska.gov>; Boyer, David L (CED) <david.boyer2@alaska.gov>; Wallace, Chris D (CED) <chris.wallace@alaska.gov> Subject: RE: [EXTERNAL] Sundry application to downhole commingle injection in PBU S-104 (PTD 200-196) Dave, Yes currently only injecting water. The Schrader has WFRV and we have a known rate at a known WHP (~550 bwpd @ 1600psi). We plan to maintain the same WHP with both zones open and will allocate that volume to the schrader. Will suffice that allocation side of things? Oliver and I will continue to work the pool wide application as we will likely see more of these in the future. If we ever consider MI we can isolate the zones individually? Will that work for you guys? Thanks Brian Glasheen Operations Engineer 907-545-1144 From: Roby, David S (CED) <dave.roby@alaska.gov> Sent: Thursday, January 21, 2021 5:39 PM To: Brian Glasheen <Brian.Glasheen@hilcorp.com>; Oliver Sternicki <Oliver.Sternicki@hilcorp.com> Cc: Rixse, Melvin G (CED) <melvin.rixse@alaska.gov>; Boyer, David L (CED) <david.boyer2@alaska.gov>; Wallace, Chris D (CED) <chris.wallace@alaska.gov> Subject: RE: [EXTERNAL] Sundry application to downhole commingle injection in PBU S-104 (PTD 200-196) Brian and Oliver. This is a Polaris well currently, and currently only injecting water, correct? If so, the Polaris Oil Pool pool rules seem to authorize commingled injection for this well, for water injection only though. Rule 8 of CO 484A, which states: Rule 8 Multiple Completion of Water Injection Wells (ref. CO 484) a. Water inject wells may be completed to allow for injection in multiple pools within the same wellbore so long as mechanical isolation between pools is demonstrated and approved by the Commission. b. Prior to initiation of commingled injection, the Commission must approve methods for allocation of injection to the separate pools. c. Results of logs or surveys used for determining the allocation of water injection between pools, if applicable, must be supplied in the annual reservoir surveillance report. d. An approved injection order is required prior to commencement of injection in each pool. So I think, technically, we’re just missing details on how you propose to allocate production between the pools and then we could approve your sundry. That said, I don’t like the fact this language only appears in the Polaris pool rules and not in the Aurora pool rules (actually, I don’t like that it appears in pool rules at all as it should be in the injection orders where the other injection related rules are). So, longer term I’d still like a pool wide injection commingling application between the Polaris and Aurora that updates things a bit (see below for the downhole commingling rule adopted in AIO3C for AOP/POP and BOP/POP commingled injection), and would also allow for commingled gas injection. From AIO 3C: Rule 9. Wells Authorized for Downhole Commingled Injection with the Aurora and Borealis Oil Pools (Source: Revised this order) Injection into the AOP and POP and the BOP and POP within the same wellbore is authorized, subject to the following conditions. (a) An Application for Sundry Approval (Form 10-403) must be approved by the AOGCC for each well prior to commencement of commingled injection. (b) Within 60 days of commencement of commingled injection in a well, or upon initial switching from one injection fluid to the other, BPXA must conduct an injection survey or separate-pool, multi-rate injectivity test to determine the proper allocation of injected fluids. Thereafter as long as the well continues commingled injection, allocation will be based on use of differential injectivity profiles or injection surveys unless significant changes in total injectivity occur, or the AOGCC so orders, whereupon an injection survey or separate pool injectivity test will be performed. (c) Annual and total cumulative volumes injected by pool and results of logs, surveys, or separate pool multi-rate injectivity tests used for determining the allocation of injected fluids between pools must be supplied in the Annual Surveillance Report for the AOP and BOP. Regards, Dave Roby 907-793-1232 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Dave Roby at 907-793-1232 or dave.roby@alaska.gov. From: Brian Glasheen <Brian.Glasheen@hilcorp.com> Sent: Thursday, January 21, 2021 4:38 PM To: Roby, David S (CED) <dave.roby@alaska.gov>; Oliver Sternicki <Oliver.Sternicki@hilcorp.com> Cc: Rixse, Melvin G (CED) <melvin.rixse@alaska.gov>; Boyer, David L (CED) <david.boyer2@alaska.gov>; Wallace, Chris D (CED) <chris.wallace@alaska.gov> Subject: Re: [EXTERNAL] Sundry application to downhole commingle injection in PBU S-104 (PTD 200-196) Dave, Yes we will likely want to do this for many wells in the future. We will apply for pool wide. I thought I recall this one was already approved on a one well approval. But that’s prob wishful thinking. I will search through my old notes and see what I can pull up. For now Oliver and I will work for the pool wide application. Thanks Brian Sent from my iPhone On Jan 21, 2021, at 4:32 PM, Roby, David S (CED) <dave.roby@alaska.gov> wrote: Brian, 20 AAC 25.215 prohibits the downhole commingling of injection in a wellbore unless, after public notice and opportunity for comment/hearing the AOGCC determines it won’t cause waste and the injection volumes can be allocated between the pools and issues an order authorizing it. No such order has been issued for the subject well, so Hilcorp will need to submit an application for downhole commingling that addresses the issue in 20 AAC 25.115(c)(1). We have previously authorized commingled injection between the Borealis and POP and the Aurora and POP on a pool wide basis, but not between the Schrader and Aurora, so if you think commingled injection between the Schrader and Aurora is something you’ll pursue in additional wells in the future you may want to seek pool wide authorization instead of an order that applies only to the S-104 well so we only have to go through the notice and hearing process once instead of for each individual well. Let me know if you have any questions. Regards, David Roby Senior Reservoir Engineer Alaska Oil and Gas Conservation Commission 907-793-1232 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e- mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Dave Roby at 907-793-1232 or dave.roby@alaska.gov. 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. 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, please immediately 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.