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Home My WebLink About2024 Deep Creek Unit Hilcorp Alaska, LLC Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 907/777-8300 Fax: 907/777-8580 March 31, 2025 Jesse Chmielowski, Commissioner Alaska Oil & Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, Alaska 99501-3539 RE: DEEP CREEK UNIT, HAPPY VALLEY FIELD, STATE OF ALASKA, 2024 ANNUAL RESERVOIR REVIEW Dear Commissioner Chmielowski: In accordance with Conservation Order No. 553, Hilcorp Alaska, LLC (“Hilcorp”), as Operator, hereby submits for your review the following Annual Reservoir Review for the Happy Valley Beluga/Tyonek Gas Pool in the Happy Valley Field. This is the 20th Annual Reservoir Review and corresponds to events during the 2024 calendar year. Note that the Happy Valley Field has been on production since November 2004 and the cumulative production as of 12/31/2024 is 44.8 BSCF with an average rate of 3,212 MSCFD for the year 2024. Sincerely, Joleen Oshiro Reservoir Engineer Page 2 Production History and Update Happy Valley field has been produced from, what has been historically reported, 5 major contributing formations: Sterling, Upper Beluga, Beluga, Upper Tyonek, and Lower Tyonek. All the major formations, except the Sterling A sand, are part of the Happy Valley PA. Although the Sterling A sand is not included as a formation in the Happy Valley PA Pool Rules (CO 553 A), it will be included in this report to help include a more holistic overview of production from Happy Valley field. Historically the Lower Tyonek, Upper Tyonek, and Beluga major formations have been commingled between 2 or 3 for the formations and therefore production allocations from each major formation have been made. Both the Upper Beluga and Sterling were produced independently with individual wells, HVB- 15 and HVB-14 respectively, and therefore do not require allocations. Below is a plot of historical allocated production of the major formations discussed over time, table including total production and the 2024 volume for each formation, and table of well status and current formation splits per well. Page 3 Reservoir Performance Sterling – As noted above the Sterling A sand currently sits above the existing Happy Valley PA. It was first produced in the HVB-14 well starting in 2012 when that well was drilled to specifically target the Sterling based on gas shows in the HVB-13 well drilled in 2008 and gas indication on logs from the HVB- 15 well drilled earlier that year. Based on logs, the Sterling A sand is a gas on water reservoir . HVB-14 was perforated in upper part of the interval containing gas and produced for ~1 year until was making a consistent water cut. The well produced until 2016 when it died making 170 mscfd and 220 bwpd and producing a cumulative 1.96 BCF. It is assumed there is no additional remaining reserves left in the Sterling A sand. There are multiple Sterling sands above and below the Sterling A sand but based on the logs obtained in HVB-17 in 2016 none appear to be prospective. Initial reservoir pressure indicated that the Sterling A sand is an under-pressured reservoir with initial pressure gradient of 0.28 psi/ft (485 psi at 1695’ TVD). Current pressure estimate for the Sterling A sand is ~250 psi based on RFT data obtained in 2016 from the HVB-17 well. Upper Beluga – The Upper Beluga formation, currently defined as Beluga 1-20 sands, has been produced solely from the HVB-15 which was drilled in 2012 targeting the Upper Beluga accumulation. HVB-15 was completed in the Beluga 1-3,5,8, and 9 intervals. The majority, or potentially all, of production is from the Beluga 1-3 intervals. Intervals 8 and 9 were isolated immediately upon completion in 2012 as indicated unproductive and/or wet and the 5 interval was isolated in 2014 to mitigate apparent issues with sand production (production did not change after it was isolated). HVB-15 had a peak rate of ~5500 mscfd in 2013 and is currently producing at a rate of ~500 mscfd on a ~8%/yr decline rate. A total of 5.9 BCF have been produced from the Beluga 1-3 zones. Initial reservoir pressure determined during initial production of the Beluga 3 interval indicated a sub-normal pressure at a gradient of 0.31 psi/ft (655 psi at 2110’ TVD). RFT data gathered in 2016 from the HVB-17 well indicated pressure in the Beluga 3 at that time to be 448 psi (0.2 psi/ft). Other RFT points were taken throughout the Beluga 1-7 sands during that time showing a range of pressure gradients from (0.2 – 0.34 psi/ft). There remain multiple prospective Beluga zones (10- 20) indicated by logs from wells HVB-17 and HVB-13. Beluga – The Beluga formation, currently defined as Beluga 21-135 sands, has been historically produced in the HVA-08 and HVB-13 wells. Wells HVA-09, HVA-10, and HVA-11 have been completed in multiple Beluga formation sands but were proven unproductive. A total of 0.83 BCF has been estimated Page 4 to have been produced from the Beluga formation sands with the HVA-08 being the only active producer. Reservoir pressure gradients throughout the Beluga sands range from 0.36 psi/ft in the Beluga 23 up to normally pressured 0.44 psi/ft in the Beluga 44 using RFT data gathered in HVB-17 in 2016. Due to the minimal production from the Beluga sands it is expected that most of the reservoirs are at or close to reservoir pressure. Upper Tyonek – The Upper Tyonek formation sands, currently defined as sands T1- T52, has produced approximately 50% of the production from the Happy Valley field at 24.7 BCF. The major contributing sands are the T-6, T7, T-10, and T-17 and were historical produced mainly from wells HVA-08, HVA-09, HVA-10, and HVA-12. Initial RFT data gathered in the HVA-03 and HVA-04 wells indicated these zones were initially normally pressured (0.42-0.45 psi/ft). RFT data gathered in 2016 in the HVB-17 well showed gradients ranging from 0.1 to 0.41 psi/ft. This formation is currently being produced from the two most recent drill wells HVB-17 (2015) and the HVB-16A (2022) at a combined current production rate of ~ 1 mmscfd, using current allocations. Lower Tyonek – The Lower Tyonek formation, currently defined as sands T-68-155, has produced approximately 25% of the production from the Happy Valley field at 10.2 BCF. This formation has been produced from wells HVA-01, HVA-02, HVA-12, HVB-16A, and HVB-17 with the majority of production coming from wells HVA-01, HVA-02, and HVB-17. Historically the major contributing sands have been the T-91, T-105, T-120, T-125, and the T-140. Currently there is no pressure data available to indicate individual sand pressures throughout the lower Tyonek section. Initial RFT data gathered in the HVA-03 and HVA-04 wells indicated these zones were initially normally pressured (0.42-0.45 psi/ft). The Lower Tyonek formation is currently being produced from the HVB-16A and the HVB-17. 2024 Activity a) Rate Adding Wellwork - HVB-13 –The existing Beluga sands were isolated and the well was re-completed to test the Beluga 10 sands in 1H 2024. After perforating, an influx of fluid was seen and no flow to surface. HVB- 13 was then rotary sidetracked to HVB-13A in early 2025. - HVB-16A (Jan 2024) – perforations were added in the Upper Tyonek T-1, T-2, and T-6 intervals resulting in ~200 mscfd rate gain - HVB-17 (Jan 2024) – perforations were added in the Upper Tyonek T-2, T-6, and T-7 intervals resulting in no additional rate - HVA-08 (July 2024) – perforations were added in the Beluga 23 and 31 intervals resulting in no additional rate - HVB-17 (Aug 2024) – perforations were added in the Lower Tyonek T-70B and Upper Tyonek T- 10 intervals resulting in no additional rate - HVA-10 (Oct 2024) – perforations were added in the Beluga 37, 41, 45, 47 intervals resulting in ~100 mscf/d rate gain Page 5 b) Surveys – PLT surveys were obtained in April 2024 in wells HVB-12, HVB-16A, and HVB-17. c) Drilling - There was no drilling activity in 2024. Future Plans Two (2) drill wells are planned for 2025. HVB-13A sidetrack and grassroots well HVB-18 have been drilled in 1Q 2025. Completion work continues in April 2025 as we work towards bringing these wells online; initial perforations are planned in the Lower Tyonek and Upper Tyonek intervals. Beluga perforations will be added in the future.