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Home My WebLink AboutO 213Other Order 213 Docket Number: OTH-24-018 1. April 18, 2024 AOGCC notice of investigation 2. May 15, 2024 Hilcorp response to notice of investigation 3. June 3, 2024 AOGCC notice of proposed enforcement action 4. July 17, 2024 Hilcorp civil penalty payment STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage Alaska 99501 Re: Failure to complete required Mechanical Integrity Test (MIT) Trading Bay Unit M-30 well (PTD 1910640) Area Injection Order 5 ) ) ) ) ) ) ) ) ) Docket Number: OTH-24-018 Other Order 213 Trading Bay Unit (TBU) McArthur River Field Hemlock Oil Pool, Middle Kenai G Oil Pool, West Foreland Oil Pool July 12, 2024 DECISION AND ORDER On June 3, 2024, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to Hilcorp Alaska, LLC (Hilcorp) regarding the M-30 well. The Notice proposed a $86,000 civil penalty under AS 31.05.150(a). Hilcorp did not request an informal review or otherwise contest the Notice. This decision and order now follow. SUMMARY OF PROPOSED ENFORCEMENT ACTION: The Notice identified that Hilcorp violated the provisions of Rule 5 of Area Injection Order 5 (AIO 5) (“Demonstration of Tubing/Casing Annulus Mechanical Integrity”) for the M-30 well. AIO 5 was approved July 25, 1986. The order authorizes the underground injection of fluids for enhanced oil recovery in the TBU, McArthur River Field. The rules require MITs on TBU injection wells. Rule 5 of AIO 5 states “A schedule must be developed and coordinated with the Commission which ensures that the tubing/casing annulus for each injection well is pressure tested prior to initiating injection and at least once every four years thereafter.” AOGCC Industry Guidance Bulletin 10-02B dated August 9, 2017, allowed for efficiencies in testing and witnessing by allowing an MIT to be performed anytime during the anniversary month to satisfy the MIT due date. On March 9, 2024, Hilcorp completed a passing state witnessed MIT on the M-30 well. This test was emailed to AOGCC on March 10, 2024. AOGCC completed a routine review of this MIT and noticed this test was potentially overdue, and initiated communication with Hilcorp. AOGCC issued a Notice of Investigation to Hilcorp dated April 18, 2024, and Hilcorp responded on May 15, 2024 with the requested information. This included verification that Hilcorp initially contacted AOGCC on February 24, 2024, to schedule the witnessing of the MIT. Other Order 213 July 12, 2024 Page 2 of 4 The last AOGCC-witnessed MIT occurred January 24, 2020. Therefore, the MIT was required on or before January 2024. Though out of compliance, the M-30 well continued to inject for 24 days (February 1, 2024, to February 24, 2024). Hilcorp’s failure to demonstrate the mechanical integrity of the M-30 injection well within the required four-year cycle violated AIO 5. Violating an AOGCC order, like AIO 5, makes Hilcorp liable for civil penalties pursuant to AS 31.05.150(a). The Notice proposed civil penalties of $86,000 as follows.1 - $50,000 - initial violation failure to perform the required MIT in compliance with testing protocols specified in Rule 5 of AIO 5; - $36,000 - $1,500 for each day of the 24 days the well was operable/injecting with an overdue MIT. 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 this M-30 violation, Hilcorp has completed an internal investigation (emailed to AOGCC dated May 15, 2024) 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. The factors in AS 31.05.150(g)2 have been considered in the determination of penalties for the violation. The penalty does reflect amounts based on per-day assessments. Violations relating to Underground Injection Control Class II well integrity practices warrant the imposition of civil penalties. 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. Hilcorp’s failure to comply with the AOGCC order 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 the existing TBU aquifer exemption, no injury to the public or the environment, and Hilcorp’s cooperation with the investigation. AOGCC tracks and periodically audits for compliance. Nothing above should imply that AOGCC is partially responsible for Hilcorp’s violation, or infer that the penalty amount assessed for days in non-compliance should be reduced for action/inaction on AOGCC’s part. 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. 2 AS 31.05.150(g) requires AOGCC to consider nine criteria in setting the amount of a civil penalty. Other Order 213 July 12, 2024 Page 3 of 4 FINDINGS AND CONCLUSIONS: Hilcorp did not dispute the alleged violation in the Notice. The AOGCC finds that Hilcorp committed the violation as initially alleged in the Notice and restated in the “Summary of Proposed Enforcement Action” above. NOW THEREFORE IT IS ORDERED THAT: Hilcorp is assessed a civil penalty in the amount of $86,000 for the violation 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 May 15, 2024, 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 July 12, 2024. Jessie L. Chmielowski Gregory C. Wilson Commissioner Commissioner cc: Casey Morse, Well Integrity Engineer, Hilcorp Alaska, LLC James Robinson, US Environmental Protection Agency, Region 10 Jim Regg, AOGCC Supervisor, Inspections AOGCC Inspectors Gregory Wilson Digitally signed by Gregory Wilson Date: 2024.07.12 13:08:27 -08'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2024.07.12 13:45:01 -08'00' Other Order 213 July 12, 2024 Page 4 of 4 RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10-days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. From:Coldiron, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Other Order 213 (Hilcorp) Date:Friday, July 12, 2024 3:16:15 PM Attachments:other 213.pdf Failure to complete required Mechanical Integrity Test (MIT) Trading Bay Unit M-30 well (PTD 1910640) Area Injection Order 5 Samantha Coldiron AOGCC Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 __________________________________ List Name: AOGCC_Public_Notices@list.state.ak.us You subscribed as: samantha.coldiron@alaska.gov Unsubscribe at: https://list.state.ak.us/mailman/options/aogcc_public_notices/samantha.coldiron%40alaska.go v 4 RECEIVED Hilcorp Alaska, LLC J U L 17 20A Post Office Box 244027 Anchorage, AK 99524-4027 �.t.,". AO G C C 3800 Centerpoint Drlve Suite 1400 July 17, 2024 Anchorage, AK 99503 Phone: 907/777-8300 Commissioner Jessie Chmielowski Commissioner Gregory Wilson Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Docket Number: OTH-24-018 Other Order 213 Failure to complete required Mechanical Integrity Test (MIT) Trading Bay Unit M-30 well (PTD 1910640) Area Injection Order 5 Dear Commissioners Chmielowski and Wilson: Please find enclosed payment for civil penalty per Docket Number: OTH-24-018, Other Order 213. Sincerely, HILCORP ALASKA, LLC Oi9m" '=by Den Dan Marlowe Mangve(1267 �� 267) DN- w=Dan MaM (1281) Dale: 2024D1.1714 V:49. W. Dan Marlowe Area Operations Manager Cook Inlet Offshore DEM/JLL Enclosure: Check Number 42035603 0 Hilcorp Alaska LLC P.O.Box 61229 Houston TX 77208-1229 Owner: 1 40012563 Check Date: 1 07/16/2024 Check Number: 1 42035603 SAP lac Na I Inv. Date I Invoice No Discount I Net Amount' 1900134708 07/12/2024 Hilcorp Alaska LLC P.O.Box 61229 Houston TX 77208-1229 OTHERORDER213 $0.00 $86,000.00 REGFIV ED J U L 17 2024 AOGCC AMEGY BANK 35-1058 1131 Void After 90 Days Check No Check Date Check Amount 142035603 07/16/2024 * * * * * $86,000.00 PAY Eighty -Six Thousand Dollars And Zero Cents To STATE OF ALASKA THE AOGCC NCHO ORDER 333 WEST 7TH AVE OF ANCHORAGE AK 99501-3539 Authorized Signature VL,203560311' :1L31i05861: 044440774aun 3 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov June 3, 2024 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7018 0680 0002 2052 9372 Mr. Casey Morse Well Integrity Engineer Hilcorp Alaska, LLC 3800 Centerpoint Dr., Suite 1400 Anchorage, AK 99503 Re: Docket Number: OTH-24-018 Notice of Proposed Enforcement Action Failure to complete required Mechanical Integrity Test (MIT) Trading Bay Unit M-30 (PTD 1910640) well Area Injection Order 5 Trading Bay Unit (TBU), Steelhead Platform, McArthur River Field, Hemlock Oil Pool, Middle Kenai G Oil Pool, West Foreland Oil Pool Dear Mr. Morse: The Alaska Oil and Gas Conservation Commission (AOGCC) hereby notifies Hilcorp Alaska, LLC (Hilcorp) of a proposed enforcement action. Nature of the Apparent Violation or Noncompliance (20 AAC 25.535(b)(1)). Hilcorp violated the provisions of Rule 5 of Area Injection Order 5 (AIO 5) (“Demonstration of Tubing/Casing Annulus Mechanical Integrity”) for the M-30 well. Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)). AIO 5 was approved July 25, 1986. The order authorizes the underground injection of fluids for enhanced oil recovery in the TBU, McArthur River Field. The rules require MITs on TBU injection wells. Docket Number: OTH-24-018 Notice of Proposed Enforcement Action June 3, 2024 Page 2 of 4 Rule 5 of AIO 5 states “A schedule must be developed and coordinated with the Commission which ensures that the tubing/casing annulus for each injection well is pressure tested prior to initiating injection and at least once every four years thereafter. AOGCC Industry Guidance Bulletin 10-02B dated August 9, 2017, allowed for efficiencies in testing and witnessing by allowing an MIT to be performed anytime during the anniversary month to satisfy the MIT due date. On March 9, 2024, Hilcorp completed a passing state witnessed MIT on the M-30 well. This test was emailed to AOGCC on March 10, 2024. AOGCC completed a routine review of this MIT and noticed this test was potentially overdue, and initiated communication with Hilcorp. AOGCC issued a Notice of Investigation to Hilcorp dated April 18, 2024, and Hilcorp responded on May 15, 2024, with the requested information. This included verification that Hilcorp initially contacted AOGCC on February 24, 2024, to schedule the witnessing of the MIT. The last AOGCC-witnessed MIT occurred January 24, 2020. Therefore, the MIT was required on or before January 2024. Though out of compliance, the M-30 well continued to inject for 24 days (February 1, 2024, to February 24, 2024). Hilcorp’s failure to demonstrate the mechanical integrity of the M-30 injection well within the required four-year cycle violated AIO 5. Violating an AOGCC order, like AIO 5, makes Hilcorp liable for civil penalties pursuant to AS 31.05.150(a). Proposed Action (20 AAC 25.535(b)(3). The MIT violation at TBU is not isolated and demonstrates Hilcorp’s ongoing compliance problems. AOGCC has issued enforcement actions against Hilcorp which include provisions for Hilcorp to identify corrective actions that, when implemented, will prevent recurrence of the violation or incident. Of those enforcement actions, notably Other Order 209 issued February 8, 2024 – where the Milne Point Unit S-33A well missed its MIT in March 2023 - was substantially similar to this M-30 violation. Repeat violations call into question the effectiveness of Hilcorp’s efforts to improve its regulatory compliance. For these violations, the AOGCC intends to impose civil penalties on Hilcorp as follows.1 - $50,000 – initial violation failure to perform the required MIT in compliance with testing protocols specified in Rule 5 of AIO 5. - $36,000 - $1,500 for each day of the 24 days the well was operable/injecting with an overdue MIT. 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. Docket Number: OTH-24-018 Notice of Proposed Enforcement Action June 3, 2024 Page 3 of 4 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. Hilcorp has completed an internal investigation that included a root cause analysis and actions to prevent recurrence. This was provided to AOGCC on May 15, 2024, in response to the AOGCC issued M-30 Notice of Investigation. Thus, the AOGCC will not require an additional written explanation from Hilcorp. The total proposed civil penalty is $86,000. Violations relating to Underground Injection Control Class II well integrity practices warrant the imposition of civil penalties. Hilcorp’s repeated failure to comply with fundamental wellbore MIT requirements raises the potential for similar behavior with more serious consequences. The factors in AS 31.05.150(g) were considered in determining the appropriate penalty. Consideration of the civil penalty includes Hilcorp’s history of compliance/noncompliance and the need to deter similar behavior(s). Other considerations include the existing TBU aquifer exemption, no injury to the public or the environment, Hilcorp’s ongoing efforts to correct the violation and prevent future violations, Hilcorp’s cooperation in the investigation, and Hilcorp’s timely and detailed response to the AOGCC issued Notice of Investigation. AOGCC tracks and periodically audits for compliance. Nothing above should imply that AOGCC is partially responsible for Hilcorp’s violation, or infer that the penalty amount assessed for days in non-compliance should be reduced for action/inaction on AOGCC’s part. Rights and Liabilities (20 AAC 25.535(b)(4)). Within 15 days after receipt of this notification – unless the AOGCC, in its discretion, grants an extension for good cause shown – Hilcorp may file with the AOGCC a written response that concurs in whole or in part with the proposed action described herein, requests informal review, or requests a hearing under 20 AAC 25.540. If a timely response is not filed, the proposed action will be deemed accepted by default. If informal review is requested, the AOGCC will provide Hilcorp an opportunity to submit documentary material and make a written or oral statement. If Hilcorp disagrees with the AOGCC’s proposed decision or order after that review, it may file a written request for a hearing within 10 days after the proposed decision or order is issued. If such a request is not filed within that 10-day period, the proposed decision or order will become final on the 11th day after it was issued. If such a request is timely filed, the AOGCC will hold its decision in abeyance and schedule a hearing. If Hilcorp does not concur in the proposed action described herein, and the AOGCC finds that Hilcorp violated a provision of AS 31.05, 20 AAC 25, or an AOGCC order, permit or other approval, then the AOGCC may take any action authorized by the applicable law including ordering one or more of the following: (i) corrective action; (ii) suspension or revocation of a permit or other approval; and (iii) imposition of penalties under AS 31.05.150. In taking action after an informal review or hearing, the AOGCC is not limited to ordering the proposed action described herein, as long as Hilcorp received reasonable notice and opportunity to be heard with Docket Number: OTH-24-018 Notice of Proposed Enforcement Action June 3, 2024 Page 4 of 4 respect to the AOGCC’s action. Any action described herein or taken after an informal review or hearing does not limit the action the AOGCC may take under AS 31.05.160. Sincerely, Brett W. Huber, Sr. Chair, Commissioner cc: James Robinson, US Environmental Protection Agency, Region 10 Jim Regg, AOGCC Supervisor, Inspections AOGCC Inspectors Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2024.06.06 00:21:08 -05'00' 2 Hilcorp Alaska, LLC May 15, 2024 Chairman Brett Huber, Sr. Alaska Oil and Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, AK 99501 Re: Docket Number: OTH-24-018 Notice of Investigation Regarding Late Mechanical Integrity Test on Trading Bay Unit (TBU) M-30, Steelhead Platform, Cook Inlet Basin Dear Commissioner Huber: Please find Hilcorp Alaska, LLC’s response regarding the matter of OTH-24-018. Event Summary: Trading Bay Unit Steelhead Platform well M-30 (TBU M-30) had a witnessed mechanical integrity test (MIT) performed on January 24, 2020. Since then, the well was utilized for water injection in the Trading Bay Unit in accordance with Area Injection Order 5. The subsequent witnessed MIT was successfully completed March 9, 2024. Investigation Details: Below is a timeline of events leading to the witnessed MIT on March 9, 2024. x 02/01/2024: TBU M-30 remained on injection without required MIT x 02/23/2024: Hilcorp successfully performed an internal MIT to confirm wellbore integrity. The test was performed to a pressure of 2,200 psi for 30 minutes. x 02/24/2024: Hilcorp made notification to AOGCC requesting witness of TBU M-30 MIT. x 02/26/2024: AOGCC contacted Hilcorp and requested a delay in the test to align with an upcoming test of the drilling rig BOP. An inspection date of 02/29/2024 was agreed upon. x 02/29/2024: AOGCC contacted Hilcorp and requested additional delay due to delays impacting the drilling rig BOP test. x 03/03/2024: AOGCC contacted Hilcorp and requested additional delay due to delays impacting the drilling rig BOP test. x 03/04/2024: Hilcorp resubmitted the notice to AOGCC for witness of TBU M-30 MIT per AOGCC request. x 03/07/2024: AOGCC requested delay to MIT due to weather conditions that were not supportive of helicopter travel in Cook Inlet. A test date of 03/09/2024 was agreed. x 03/09/2024: MIT was successfully completed with AOGCC witness. 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 907/777-8300 Fax: 907/777-8310 By Samantha Coldiron at 9:28 am, May 15, 2024 Well History and Context: TBU M-30 is actively utilized for water injection in the Trading Bay Unit in accordance with Area Injection Order 5. The well was shut in on September 1, 2021. The well was returned to injection on August 17, 2022. Since returning to injection in 2022, injection volumes have averaged approximately 400 barrels of water per day. At these injection rates, the tubing pressure is maintained near zero gauge pressure. The well has maintained on average over the past year approximately 1,500 psi of pressure on the 9-5/8” production casing (inner annulus, IA), 130 psi on the 13-3/8” surface casing (outer annulus, OA), and 60 psi on the 16” conductor pipe (outer outer annulus, OOA). Since August 17, 2022, the fluids injected into the TBU M-30 have been primarily filtrate processed by the Omnipure filtration system. Filtered inlet water makes up the majority of that injection stream, since it is a required input to the filtration process. The surface temperature of the TBU M-30 injectate changes seasonally with the inlet water temperature. There are also temperature fluctuations based on the amount of time between pumping the cold inlet water to the platform and pumping the Omnipure filtrate into the TBU M-30. The temperature fluctuations of the injected water generate pressure impacts on the inner annulus as the fluid-packed inner annulus expands and contracts with varying temperatures. The temperature of the injected water is not monitored with SCADA or recorded in the operators’ log. Field Data Capture produces an automated anomaly report each day that prompts operators to investigate any pressure changes greater than 10% day-over-day. Each such event that occurred on the TBU M-30 over the past twelve months was a result of observed fluid temperature changes or performing mechanical integrity testing. These events are noted by operator entries into the daily “Remarks” in the Field Data Capture software. There were no pressure bleeds over the past twelve months. Root cause of the incident: 1. Inadequate implementation of policy / standard / procedures, due to deficiencies a. This platform relies on varying systems including Outlook email and calendar reminders, manual entries into a work order tracking tool, notification from Engineering or Compliance staff, or written entries in the control rooms. In this case, the tools were deficient in notifying the responsible and accountable personnel in advance of the policy deadline. 2. Inadequate vertical communication between supervisor and person a. There was insufficient or inadequate communication amongst Engineering and Compliance in Anchorage, Lead Operators / Foreman, and Operators regarding the sensitivity of timing for the required work. Contributing factors of the incident: x Compliance tracking systems utilized require manual entry, yet sometimes utilize systems with automated reminders to communicate deadlines to all responsible and accountable individuals. x The process for validating compliance activities requires manual review and updating of legacy spreadsheet. Actions to prevent recurrence: x Examine an automated, standardized notification process for compliance regulatory testing, the details of which will be discussed further with AOGCC staff (addresses root cause #1). x Regularly monitor the tracking system to verify tools are working correctly to notify personnel, and compliance activities are completed in advance of applicable deadlines (addresses root cause #1). x Standardize ownership of compliance tasks across the organization to ensure proper delegation (addresses root cause #2). Included with this letter are the following attachments: 1. 12-month pressure data and plot identifying injection rate and pressures for tubing and annuli of the TBU M-30. 2. Review of injectors authorized by Area Injection Order 5. If you have any questions, please contact Casey Morse at 777-8322 or casey.morse@hilcorp.com. Regards, Casey Morse Well Integrity Engineer Hilcorp Alaska Digitally signed by Casey Morse (11458) DN: cn=Casey Morse (11458) Date: 2024.05.15 08:50:35 - 08'00' Casey Morse (11458) Date Tubing IA OA OOA OOOAWater Injection (bpd)4/23/202401260130451454164/22/202401280130491504144/21/202401290130491504194/20/202401290130491504194/19/202401300130491504194/18/202401290130491504244/17/202401295130501504134/16/202401300130451484144/15/202401300130481504174/14/202401260130451504244/13/202401200130501504194/12/202401380130501504164/11/202401510130501504144/10/202401810130501504144/9/202401810130501504144/8/202401850130501504194/7/202401800130501504194/6/202401800130501504214/5/202401800125451454234/4/202401775127501504274/3/202401775130501504244/2/202401750125501504174/1/202401650160501504143/31/202401700130501504133/30/202401650130501504133/29/202401200130501504163/28/20240120013050150427Date Range: 04/23/2023 - 04/23/2024Well: M-30 HDesc: InjectionPermit to drill: 1910640Admin Approval: N/AAPI: 50-733-20430-00-00 3/27/202401200130501504233/26/202401190130501504703/25/202401090130491504243/24/202401150130501504213/23/202401150130501504233/22/202401175130501504233/21/202401175130501504193/20/202401200130501504193/19/202401225130501504133/18/202401200130501504143/17/202401250130501504303/16/202401250130501504293/15/202401250130501504213/14/202401250130501504163/13/202401250130501504233/12/202401250130501504233/11/202401250130501504193/10/202401275130501504193/9/20240900130501504203/8/20240900130501504103/7/20240900130501504043/6/20240900130501504013/5/20240895130501504033/4/20240910130501503973/3/20240910130501503743/2/20240905130501503803/1/20240910130501503762/29/20240950130501503802/28/20240990130501503802/27/202441010130501503812/26/2024901050130551503862/25/20241911100130551503802/24/20241501075130551503792/23/20241802200130551503802/22/20241711000130551503802/21/20241581000125501453872/20/20241331125125501453842/19/20241101125125501453862/18/202482115012550145371 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03/09/24 48Grayling 168-026 G-09 AIO 5.014 OPERABLE ACTIVE N/ATemperature Survey03/27/24 24Grayling 202-055 G-12RD3 AIO 5.031 OPERABLE ACTIVE N/ATemperature Survey03/26/24 24Grayling 168-057 G-13 AIO 5.028 OPERABLE ACTIVE N/ATemperature Survey03/29/24 24Grayling 175-016 G-22 AIO 5.030 OPERABLE ACTIVE N/ATemperature Survey03/28/24 24King Salmon 175-014 K-22 AIO 5.029 OPERABLE ACTIVE N/ATemperature Survey05/03/24 24Grayling 190-003 G-40 AIO 5.002 OPERABLE ACTIVE N/ATemperature Survey03/30/24 24Dolly Varden 181-080 D-09RD OPERABLE SI Apr-2020 MIT-IA 07/12/23 12 Regulated under EPA UIC Permit No AK-1I006-B for Class 1Dolly Varden 182-020 D-06RDNOT OPERABLESI Sep-2015 MIT-IA 06/14/12 48Dolly Varden 174-002 D-14RD AIO 5.026NOT OPERABLESI Aug-2020Temperature Survey03/26/20 24Dolly Varden 180-005 D-15RD2 AIO 5.016NOT OPERABLESI Apr-2020 MIT-IA 06/21/18 48Dolly Varden 169-108 D-22NOT OPERABLESI Dec-1982 MIT-IA 04/20/04 482005 Unocal letter offering to MIT this well every 2 years while shut-in. No corresponding Administative Approval identifiedDolly Varden 174-064 D-24ANOT OPERABLESI Sep-2015 MIT-IA 08/31/12 48Dolly Varden 185-003 D-29RDNOT OPERABLESI Apr-2017 MIT-IA 06/03/14 48Dolly Varden 179-011 D-34ADPNNOT OPERABLESI Nov-2014 MIT-IA 08/26/14 48Dolly Varden 188-140 D-45NOT OPERABLESI Mar-2020 MIT-IA 06/21/18 48Grayling 198-120 G-05RD AIO 5.027NOT OPERABLESI Nov-2020Temperature Survey06/18/20 24Grayling 168-061 G-07NOT OPERABLESI Aug-2019 MIT-IA 08/27/15 48Grayling 168-043 G-11 AIO 5.009NOT OPERABLESI Sep-2014Temperature Survey11/20/13 24Grayling 191-099 G-14ARD AIO 5.025NOT OPERABLESI Mar-2018Temperature Survey04/28/16 24Grayling 168-109 G-16 AIO 5.005NOT OPERABLESI Mar-2020Temperature Survey03/11/18 24Grayling 169-017 G-19 AIO 5.015NOT OPERABLESI Feb-2012Temperature Survey05/12/10 24Grayling 179-014 G-23RD AIO 5.004NOT OPERABLESI Jun-2013Temperature Survey05/10/11 24Grayling 178-070 G-27 AIO 5.003NOT OPERABLESI May-2011Temperature Survey03/14/09 24 Grayling 187-049 G-36DPNNOT OPERABLESI Jan-2006 MIT-IA 12/20/02 48King Salmon 178-038 K-02RDNOT OPERABLESI Dec-2007 MIT-IA 12/20/05 48King Salmon 173-042 K-04RD AIO 5.008NOT OPERABLESI Dec-2009Temperature Survey12/10/07 24King Salmon 177-021 K-07RDNOT OPERABLESI Feb-2004 MIT-IA 05/05/04 48King Salmon 168-083 K-11 AIO 5.011NOT OPERABLESI Jan-2010Temperature Survey02/07/12 24King Salmon 179-034 K-15RDNOT OPERABLESI Jan-2006 MIT-IA 03/13/01 48 Temperature Survey conducted 4/22/07Steelhead 190-138 M-27 AIO 5.023NOT OPERABLESI May-2020Temperature Survey01/24/20 24 1 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov April 18, 2024 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7018 0680 0002 2049 1198 Mr. Casey Morse Well Integrity Engineer Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Docket Number: OTH-24-018 Notice Of Investigation Late Mechanical Integrity Test (MIT) Trading Bay Unit M-30 (PTD 1910640) Area Injection Order (AIO) 5 Trading Bay Unit (TBU), Steelhead Platform, McArthur River Field, Hemlock Oil Pool, Middle Kenai G Oil Pool, West Foreland Oil Pool Dear Mr. Morse, On March 10, 2024, Hilcorp Alaska, LLC (Hilcorp) sent by email the passing state-witnessed MIT of M- 30 completed on March 9, 2024. Upon review, the Alaska Oil and Gas Conservation Commission (AOGCC) determined that the previous test was a passing state-witnessed MIT completed January 24, 2020. AIO 5 Rule 5 states “A schedule must be developed and coordinated with the Commission which ensures that the tubing/casing annulus for each injection well is pressure tested prior to initiating injection and at least once every four years thereafter.” AOGCC Industry Guidance Bulletin 10-02B dated August 9, 2017, allowed for efficiencies in testing and witnessing by allowing an MIT to be performed anytime during the anniversary month to satisfy the MIT due date. By AOGCC‘s determination, Hilcorp should have completed the required MIT in the month of January 2024, making the test performed on March 9, 2024, late. Notice of Investigation – Late MIT TBU M-30 Docket Number: OTH-24-018 April 18, 2024 Page 2 of 2 AOGCC recognizes that an MIT can be requested to be delayed or postponed for numerous reasons and any agreement with AOGCC would have conditions and a new test schedule established. AOGCC records do not show that an agreement to delay the test was established. Pursuant to 20 AAC 25.300, the AOGCC requests the following additional information be provided by Hilcorp regarding their operations and operation of TBU M-30: 1. 12-month TIO raw data (excel format) and pressure plot identifying TIO pressures, injection rate, injection temperatures, and any bleed events of M-30; 2. A timeline of well events since a passing state witnessed MITIA on January 24, 2020, to present, including correspondence with AOGCC, if any, on scheduling the MIT or postponing the test; 3. Full root cause analysis, including results and conclusions, addressing the failure to perform the required MIT during the due month of January 2024; and 4. Results of a review of each of the Hilcorp injectors authorized by AIO 5 (which includes any issued administrative approvals) specifically to the testing due date for well mechanical integrity (MIT and temperature survey(s) etc.) and identification of any wells that are out of compliance with test dates. The information listed above should be provided to the AOGCC no later than May 17, 2024. The AOGCC reserves the right to pursue an enforcement action in this matter according to 20 AAC 25.535. Failure to comply with this request is itself a regulatory violation. Should you have any questions about this investigation notice, please contact Chris Wallace at 907-793- 1250 or chris.wallace@alaska.gov. Sincerely, Brett W. Huber, Sr. Chair, Commissioner cc: James Robinson, US Environmental Protection Agency, Region 10 Jim Regg Phoebe Brooks Brett W. Huber, Sr. Digitally signed by Brett W. Huber, Sr. Date: 2024.04.18 15:59:45 -04'00'