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Home My WebLink AboutAIO 039 A Area Injection Order 39A 1. July 24, 2020 ConocoPhillips Alaska, Inc. request to amend Area Injection Order No. 39 to expand the Affected Area of the order Pages 10—13 Held Confidential 2. August 4, 2020 Notice of hearing, affidavit of publication, email distribution, mailings 3. January 15, 2025 AIO 7 Proposed language change (AIO 39A.001) ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF ConocoPhillips ) Docket Number: AIO-20-016 Alaska, Inc. to amend Area Injection Order No. 39 ) Area Injection Order No. 39A to expand the Affected Area of the order ) Kuparuk River Unit Kuparuk River Field Kuparuk River -Torok Oil Pool North Slope Borough, Alaska January 21, 2021 IT APPEARING THAT: By application Dated July 24, 2020, ConocoPhillips Alaska, Inc. (CPAI), as operator of the Kuparuk River Unit (KRU) and on behalf of the Working Interest Owners (WIOs), requested Area Injection Order No 39 (AIO 39) be amended to expand the areal extent of the Affected Area of the order. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) tentatively scheduled a public hearing for September 15, 2020. On August 4, 2020, the AOGCC published notice of that hearing on the State of Alaska's Online Public Notice website and on the AOGCC's website, electronically transmitted the notice to all persons on the AOGCC's email distribution list, mailed printed copies of the notice to all persons on the AOGCC's mailing distribution list, and published the notice in the Anchorage Daily News. No comments on the application were received. CPAI's application contained sufficient information to make a decision without the need to hold the hearing, so the hearing was cancelled on September 1, 2020. FINDINGS: 1. Pool Definition: Conservation Order No. 725A defines the Kuparuk River -Torok Oil Pool (KR - TOP) and establishes pool rules that govern development operations and production. 2. Order History: AIO 39 was issued on July 22, 2016. Area Injection Order No. 37, which established injection rules for the area covered by Pioneer Natural Resources Alaska, Inc.'s (Pioneer) Oooguruk-Torok Oil Pool (O -TOP) was issued on May 26, 2011. Operatorship History of O -TOP: The O -TOP was initially established by Pioneer, operator for the Oooguruk Unit (OU) and additional acreage within the O -TOP that lies outside of the OU. Subsequently, Caelus Energy, LLC (Caelus) acquired Pioneer's assets on the North Slope and became operator of the OU and the O -TOP. In 2019, Caelus sold its interests in the OU and O -TOP to CPAI and Eni US Operating Company Inc. (Eni). CPAI, operator of the KRU, purchased the portions of Caelus' Oooguruk holdings to the south, and Eni purchased the northern portions. 4. Expansion of the KRU: On August 14, 2019, the Department of Natural resources approved CPAI's request to expand the KRU to include the acreage it acquired from Caelus. AIO 39A January 21, 2021 Page 2 of 5 Need for Expansion of the Affected Area of AIO 39: Consistent rules are needed for CPAI to properly develop existing KR -TOP acreage and the Torok acreage acquired from Caelus. Additionally, 20 AAC 25.460(a)(3) requires that an area injection order be limited to a single operator. Since the portions of the proposed expanded Affected Area are currently covered by existing AIO 37 and the Affected Area of AIO 37 now has two operators, it is necessary to expand AIO 39 to absorb the portion of AIO 37 that is now operated by CPAI. AIO 37 will be simultaneously contracted to exclude the acreage now operated by CPAI. Rule 12 Eviration Date: AIO 39 contained a sunset clause that triggered review and possible revision of that order on a regular basis or upon change of operator. During the AOGCC's monthly public meeting held on May 2, 2018, it was decided that sunset clauses were unnecessary since the AOGCC has authority to revisit any order at any time. By unanimous vote the automatic expiration rule was eliminated from AIO 39. CONCLUSIONS: 1. Expanding the Affected Area of AIO 39 to include CPAI's recently acquired Torok acreage is necessary to comply with 20 AAC 25.460(a)(3). 2. AIO 39 Rule 12, Expiration Date, no longer applies. NOW THEREFORE IT IS ORDERED: This order supersedes AIO 39. The AIO 39 record, findings, and conclusions are incorporated by reference into this order. Underground injection of fluids for pressure maintenance and enhanced oil recovery is authorized in the following area, subject to the following rules and 20 AAC 25, to the extent not superseded by these rules. Affected Area: Umiat Meridian (Revised This Order) Township 11 North, Range 8 East Sections 1-4, 9-12: All Township 12 North, Range 7 East Sections 1-26, 35-36: All Township 12 North, Range 8 East Sections 2-11, 13-36: All Township 13 North, Range 7 East Sections 19-36: All Township 13 North, Range 8 East Sections19-21, 28-34: All Rule 1 Authorized Infection Strata for Enhanced Recovery (Source: AIO 39) Fluids authorized under Rule 3, below, may be injected for purposes of pressure maintenance and enhanced oil recovery within the Affected Area into strata that are common to, and correlate with, the interval within the Kalubik No. 1 well between 4,991 and 5,272 feet MD on the resistivity log recorded in exploratory well Kalubik No. 1. AIO 39A January 21, 2021 Page 3 of 5 Rule 2 Well Construction (Source: AIO 39) To facilitate wellbore access, in lieu of the packer depth requirement under 20 AAC 25.412(b), the packer/isolation equipment depth may be located above 200 feet MD from the top of the perforations/open interval, but shall not be located above the confining zone and shall have outer casing cement volume sufficient to place cement a minimum of 300 feet MD above the planned packer depth. Rule 3 Authorized Fluids (Source: A10 39) Fluids authorized for injection are: a. Source water from the Kuparuk seawater treatment plant. b. Produced water from all present and yet -to -be defined oil pools within the Kuparuk River Field, including without limitation the Kuparuk River Oil Pool and the Kuparuk River -Torok Oil Pool. c. Enriched hydrocarbon gas (MI): Blend of KRU lean gas with indigenous and/or imported natural gas liquids. d. Lean gas. e. Fluids used during hydraulic stimulation. f. Tracer survey fluids to monitor reservoir performance. g. Fluids used to improve near wellbore injectivity. h. Fluids used to seal wellbore intervals which negatively impact recovery efficiency. i. Fluids associated with freeze protection. j. Standard oilfield chemicals. Any other fluids, or uses for the above fluids, shall be approved in advance by separate action based upon proof of compatibility with the reservoir and formation fluids. Rule 4 Authorized Infection Pressure for Enhanced Recovery (Source: AIO 39) Injection pressures will be managed as to not exceed the maximum injection gradient of 0.67 psi/ft to ensure containment of injected fluids within the Kuparuk River -Torok Oil Pool. Rule 5 Monitoring Tubing -Casing Annulus Pressure (Source: AIO 39) Inner and outer annulus pressure shall be monitored each day for all injection and production wells. Inner annulus, outer annulus, and tubing pressure shall be constantly monitored and recorded for all injection and production wells. The outer annulus pressures of all wells that are not cemented across the Kuparuk River - Torok Oil Pool and are located within a'/ -mile radius of a Kuparuk River -Torok Oil Pool injector shall be monitored daily. All monitoring results shall be documented and available for AOGCC inspection. Rule 6 Demonstration of Tubing/Casing Annulus Mechanical Integrity (Source: AIO 39) The mechanical integrity of each injection well must be demonstrated before injection begins and before returning a well to service following any workover affecting mechanical integrity. An AOGCC-witnessed MIT must be performed after injection is commenced for the first time in a well, to be scheduled when injection conditions (temperature, pressure, rate, etc.) have stabilized. Subsequent tests must be performed at least once every four years thereafter. The AOGCC must be notified at least 24 hours in advance to enable a representative to witness an MIT. Unless an alternate means is approved by the AOGCC, mechanical integrity must be demonstrated by a AIO 39A January 21, 2021 Page 4 of 5 tubing/casing annulus pressure test using a surface pressure of 1,500 psi or 0.25 psi/ft multiplied by the vertical depth of the packer, whichever is greater, that shows stabilizing pressure and does not change more than 10 percent during a 30 -minute period. Results of MITs must be readily available for AOGCC inspection. Rule 7 Well Integrity and Confinement (Source: AIO 39) Whenever any pressure communication, leakage or lack of injection zone isolation is indicated by an injection rate, operating pressure observation, test, survey, log, or any other evidence (including outer annulus pressure monitoring of all wells within a one-quarter mile radius of where the Kuparuk River - Torok Oil Pool is not cemented), the Operator shall notify the AOGCC by the next business day and submit a plan of corrective action on a Form 10-403 for AOGCC approval. The Operator shall immediately shut in the well if continued operation would be unsafe or would threaten contamination of freshwater. A monthly report of daily tubing and casing annuli pressures and injection rates must be provided to the AOGCC for all injection wells for which well integrity failure or lack of injection zone isolation is indicated. Rule 8 Annual Performance Reporting (Source: AIO 39) An annual surveillance report will be required by April 1st of each year subsequent to commencement of enhanced oil recovery operations. In addition to such other information as the AOGCC may require, the report shall include the following: a. progress of the enhanced recovery project and reservoir management summary including engineering and geological parameters; b. reservoir voidage balance by month of produced and injected fluids; c. analysis of reservoir pressure surveys within the pool; d. results and, where appropriate, analysis of production and injection log surveys, tracer surveys and observation well data or surveys; e. assessment of fracture propagation into adjacent confining intervals; f. summary of MIT results; g. summary of results of inner and outer annulus monitoring for all production wells, injection wells, and any wells that are not cemented across the Kuparuk River -Torok Oil Pool and are located within a'/4 -mile radius of a Kuparuk River -Torok Oil Pool injector; h. results of any special monitoring; i. reservoir surveillance plans for the next year; and j. future development plans. Rule 9 Notification of Improper Class II Infection (Source: AIO 39) Injection of fluids other than those listed in Rule 3 without prior authorization is considered improper Class II injection. Upon discovery of such an event, the operator must immediately notify the AOGCC, provide details of the operation, and propose actions to prevent recurrence. This requirement is in addition to and does not relieve the operator of any other obligations under the notification requirements of any other State or Federal agency, regulation or law. Rule 10 Other Conditions (Source: AIO 39) If fluids are found to be fracturing the confining zone or migrating out of the approved injection stratum, the Operator must immediately shut in the injection wells and immediately notify the AOGCC. Injection may not be restarted unless approved by the AOGCC. AIO 39A January 21, 2021 Page 5 of 5 Rule 11 Administrative Action (Source: AIO 39) Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the AOGCC may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. Rule 12 Expiration Date (Rescinded at May 2 2018 Public Meeting) DONE at Anchorage, Alaska and dated January 21, 2021. Jeremy M. -11a1--b—, M.vMe PriceDates I011,012013]7:a0 -09'00' Jeremy M. Price Commissioner, Chair Dig"ally signed by Daniel T. W niel T. Seamo,,L Jr. seamount, Jr. Dale: 2011 21.20 1116,07 -09'00' Daniel T. Seamount, Jr. Commissioner TION AND Digitally signed by Jessie L. Jessie L. Chmielowski Chmielowski Date: 2021.01.20 11:47:43 -09'00' Jessie L. Chmielowski Commissioner 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. Ifthe notice was mailed, then the period oftime 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 he 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 ofthe 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 ifthe 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 holidav Bernie Karl Recycling Inc. Gordon Severson Richard Wagner K&K P.O. Box 3201 Westmar Cir. P.O. Box 60868 Anchorage, AK 99508-4336 Fairbanks, AK 99706 Fairbanks, AK 99711 George Vaught, Jr. Darwin Waldsmith P.O. Box 13557 P.O. Box 39309 Denver, CO 80201-3557 Ninilchik, AK 99639 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 ADMINISTRATIVE APPROVALS AREA INJECTION ORDER NO. 2C.096 AREA INJECTION ORDER NO. 16.009 AREA INJECTION ORDER NO. 18E.008 AREA INJECTION ORDER NO. 28.011 AREA INJECTION ORDER NO. 35A.002 AREA INJECTION ORDER NO. 39A.001 AREA INJECTION ORDER NO. 40.005 AREA INJECTION ORDER NO. 43.003 Greg Hobbs, Regulatory Engineer ConocoPhillips Alaska, Inc. P.O. Box 100360 Anchorage, AK 99510-0360 Re: Docket Number: AIO-25-001 Request to change language of Area Injection Order Rule 7 Well Integrity and Confinement Dear Mr. Hobbs: By letter dated January 15, 2025, ConocoPhillips Alaska, Inc. (CPAI) requested the amendment to Rule 7 of the Area Injection Orders listed below: •AIO 18E: Colville River Field, Colville River Unit, Alpine Oil Pool • AIO 28: Colville River Field, Colville River Unit, Nanuq Oil Pool • AIO 35A: Colville River Field, Colville River Unit, Qannik Oil Pool • AIO 39A: Kuparuk River Field, Kuparuk River Unit, Torok Oil Pool • AIO 40: Greater Moose's Tooth Field, Greater Moose's Tooth Unit, Lookout Oil Pool • AIO 43: Greater Moose's Tooth Field, Greater Moose's Tooth and Bear Tooth Units, Rendezvous Oil Pool The purpose of the amendment is to clarify the appropriate process and current practice when pressure communication, leakage or lack of injection zone isolation is indicated by certain data observed by the operator. CPAIproposed adopting the Rule 7 language from the recently approved AIO 45 Coyote Oil Pool. AIO 2C.096, AIO 16.009, AIO 18E.008, AIO 28.011, AIO 35A.002, AIO 39A.001, AIO 40.005, and AIO 43.003 May 12, 2025 Page 2 of 3 In accordance with 20 AAC 25.556(d), the Alaska Oil and Gas Conservation Commission (AOGCC) hereby GRANTS CPAI’s request to amend Rule 7 of the AIOs listed above. Additionally, on its own motion, and in accordance with 20 AAC 25.556(d), the AOGCC has determined that Rule 7 of the CPAI AIO’s listed below should also be amended for the same reasons. • AIO 2C: Kuparuk River Field, Kuparuk River Unit, Kuparuk River, West Sak, and Tabasco Oil Pools • AIO 16: Kuparuk River Field, Kuparuk River Unit, Tarn Oil Pool Now Therefore it is Ordered: Rule 7 of each of the AIO’s listed is amended to read as follows: Rule 7 Well Integrity and Confinement Whenever an indication of pressure communication, leakage, or lack of injection zone isolation occurs, the operator must notify the AOGCC by the next business day. Such indication may arise from information including but not limited to injection rate, operating pressure observation, test, survey, log, or outer anulus pressure monitoring in wells within one-quarter mile radius of where the applicable defined oil pool is not cemented. If the operator's investigation supports a conclusion of pressure communication, leaking, or lack of injection zone isolation, the operator must submit a corrective action plan to the AOGCC, following the applicable unit sundry matrix order. The operator must shut in any well for which: (a) continued operation would be unsafe, (b) continued operation would threaten contamination of freshwater; or (c) the AOGCC directs the operator to shut in the well. The operator must submit a monthly report of daily tubing and casing annuli pressures and injection rate for injection wells that (a) are subject to administrative approval (AA) to operate; or (b) lack injection zone isolation. DONE at Anchorage, Alaska and dated May 12, 2025. Jessie L. Chmielowski Gregory C. Wilson. Commissioner, Chair Commissioner Gregory C. Wilson Digitally signed by Gregory C. Wilson Date: 2025.05.12 12:12:38 -08'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2025.05.12 13:42:57 -08'00' AIO 2C.096, AIO 16.009, AIO 18E.008, AIO 28.011, AIO 35A.002, AIO 39A.001, AIO 40.005, and AIO 43.003 May 12, 2025 Page 3 of 3 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] Area Injection Orders Admin Approvals (CPAI) Date:Monday, May 12, 2025 1:54:34 PM Attachments:AIO2C.096, AIO16.009, AIO18E.008, AIO28.011, AIO35A.002, AIO39A.001, AIO40.005, and AIO43.003.pdf Docket Number: AIO-25-001 Request to change language of Area Injection Order Rule 7 Well Integrity and Confinement 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 INDEXES 3 January 15, 2025 VIA E-MAIL DELIVERY Victoria Loepp Senior Petroleum Engineer Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501-3572 Subject: Area Injection Order Rule 7 Proposed Language Change Dear Ms. Loepp, ConocoPhillips Alaska Inc. (CPAI) makes this application to amend the Area Injection Orders listed below to clarify the appropriate process and current practice when pressure communication, leakage or lack of injection zone isolation is indicated by certain data observed by the operator. An example of the current area injection order language from the Alpine Area Injection Order (AIO 18E) is as follows: Whenever any pressure communication, leakage or lack of injection zone isolation is indicated by an injection rate, operating pressure observation, test, survey, log, or other evidence, the operator shall, by the next business day, notify the Commission and submit a plan of corrective action on a Form 10-403 for Commission approval. The Operator shall immediately shut in the well if continued operation would be unsafe or would threaten contamination of freshwater, or if so directed by the AOGCC. A monthly report of daily tubing and casing annuli pressures and injection rates must be provided to the AOGCC for all injection wells indicating well integrity failure or lack of injection zone isolation. There are two concerns with the current language. First, the rule requires the filing of a form 10-403 report with the AOGCC on the next business day. This does not represent current practice. Instead, the rule should require the Operator to notify the AOGCC by the next business day and file a report following the applicable AOGCC Sundry matrix only if the Operator’s investigation supports a conclusion of pressure communication, leaking, or lack of injection zone isolation. Second, the current rule requires the submission of daily tubing and casing annuli pressure for all injection wells indicating well integrity failure or lack of injection zone isolation. The current practice is not to submit this information for wells that are shut in. The shut in wells are separately tracked in the annual long-term shut-in wells report to the AOGCC. Greg Hobbs Principal Regulatory Engineer 700 G Street, ATO 1562 Anchorage, AK 99510 (907) 263-4749 (office) Greg.S.Hobbs@conocophillips.com By Samantha Coldiron at 12:09 pm, Jan 15, 2025 2 CPAI proposes the following language from the recent Coyote Oil Pool area injection order to resolve both issues: Whenever an indication of pressure communication, leakage, or lack of injection zone isolation occurs, the operator must notify the AOGCC by the next business day. Such indication may arise from information including but not limited to injection rate, operating pressure observation, test, survey, log, or outer anulus pressure monitoring in wells within one-quarter mile radius of where the COP is not cemented. If the operator’s investigation supports a conclusion of pressure communication, leaking, or lack of injection zone isolation, the operator must submit a corrective action plan to the AOGCC, following the [KRU, CRU or GMTU sundry matrix order as applicable]. The operator must shut in any well for which: (a) continued operation would be unsafe, (b) continued operation would threaten contamination of freshwater; or (c) the AOGCC directs the operator to shut in the well. The operator must submit a monthly report of daily tubing and casing annuli pressures and injection rate for injection wells that (a) are subject to administrative approval (AA) to operate; or (b) lack injection zone isolation. If acceptable, CPAI requests that the rule be modified in the following orders with appropriate reference to the applicable sundry matrix order: x AIO 18E: Colville River Field, Colville River Unit, Alpine Oil Pool x AIO 28: Colville River Field, Colville River Unit, Nanuq Oil Pool x AIO 35A: Colville River Field, Colville River Unit, Qannik Oil Pool x AIO 39A: Kuparuk River Field, Kuparuk River Unit, Torok Oil Pool x AIO 40: Greater Moose’s Tooth Field, Greater Moose’s Tooth Unit, Lookout Oil Pool x AIO 43: Greater Moose’s Tooth Field, Greater Moose’s Tooth and Bear Tooth Units, Rendezvous Oil Pool CPAI appreciates your consideration of this request. Feel free to contact me at 907-263-4749 or greg.s.hobbs@conocophillips.com with any questions. Sincerely, Greg Hobbs Regulatory Engineer ConocoPhillips Alaska, Inc. Digitally signed by Greg Hobbs DN: OU=Regulatory Engineer, O= ConocoPhillips Alaska Wells, CN=Greg Hobbs, E=greg.s.hobbs@ conocophillips.com Reason: I am the author of this document Location: Date: 2025.01.15 10:49:29-09'00' Foxit PDF Editor Version: 13.0.0 Greg Hobbs STATE OF ALASKA ADVER'T'ISING ORDY.�Y2 i NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OFADVERTISMENT. ADVERTISING ORDER NUMBER p y AO -06-21-004 FROM: AGENCY CONTACT: Jody Colombie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A.O. AGENCY PHONE: 333 West 7th Avenue 8/3/20201(907)279-1433 Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907)276-7542 TO PUBLISHER: Anchorage Daily News, LLC SPECIAL INSTRUCTIONS: PO Box 140147 Anchorage, Alaska 99514-0174 TYPE OF ADVERTISEMENT: LEGAL 3 DISPLAY CLASSIFIED - OTHER (Specify below) DESCRIPTION PRICE CO -20-013 and AIO-20-016 Initials of wbo prepared AO: Alaska Non -Taxable 92-600185 SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENT TO: AOGCC 333 West 7th AvenueTIAII Anchorage, Ataska 99501 Pae 1 of al of Pa es $ REF Type Number Amount Date Comments I PVN IVCO21795 2 AO AO -08-21-004 3 4 FIN AMOUNT SY Act. Template PGM LGR Object FY DIST LIQ 1 21 AOGCC 3046 21 2 3 5 Purcha in ri e: T' e: Purchasing Authority's Signature Telephone Number O.#andrecei g agency name must appear on all invoices and documents relating to this purchase. e state is registered for tax free transactions under Chapter 32, IRS code. Registration number 92-73-0006 K. Items are for the exclusive use of the state and not for Vale. DISTRIBUTION: Division Fiscal/Original AO Copies: Publisher (faxed), Division Fiscal, Receiving Form: 02-901 Revised: 8/3/2020 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -20-013 And AIO-20-016 Kuparuk River Unit, Kuparuk River -Torok Oil Pool Oooguruk Unit, Oooguruk-Torok Oil Pool The application of ConocoPhillips Alaska, Inc. (CPAI) for amendments to Conservation Order (CO) No. 725 and Area Injection Order (AIO) No. 39 to expand the areal extent of the Kuparuk River Unit (KRU), Kuparuk River -Torok Oil Pool (KRTOP). On its own initiative the Alaska Oil and Gas Conservation Commission (AOGCC) is proposing to contract the affected areas of CO No. 645 and AIO No. 37 for Eni US Operating Company, Inc.'s (Eni) Oooguruk Unit( OU), Oooguruk-Torok Oil Pool (OTOP). CPAI, by letter dated July 24, 2020, requests the AOGCC amend CO No. 725 and AIO No. 39 to expand the affected area of the KRTOP to include acreage that is currently part of the OTOP but the acreage is now leased by CPAI. On its own motion the AOGCC is proposing to amend CO No. 645 and AIO No. 37 to contract the affected area of the OTOP to remove acreage that is currently defined as part of the OTOP but for which Eni does not hold the leases for. The AOGCC has tentatively scheduled a public hearing on this application for September 15, 2020, at 10:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. 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 August 21, 2020. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after August 24, 2020. If a hearing is requested, the COVID-19 virus may necessitate that the hearing be held telephonically. Those desiring to participate or be present at the hearing should check with AOGCC the day before the hearing to ascertain if the hearing will be telephonic. If the hearing is telephonic, on the day of the hearing, those desiring to be present or participate should call 1-800- 315-6338 and, when instructed to do so, enter the code 14331 followed by the # sign. Because the hearing will start at 10:00 a.m., the phone lines will be available starting at 9:45 a.m. Depending on call volume, those calling in may need to make repeated attempts before getting through. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on September 7, 2020, except that, if a hearing is held, comments must be received no later than the conclusion of the September 15, 2020 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than September 10, 2020. Jeremy M. Price Jeremy M. Price Chair, Commissioner Order Number: W0017173 Order Status: SubmittEd Classification: legals & Public No:icec Package: Legal --ADN Final Cost: 323.72 Referral Code: AO -08-21-004 Payment Type: User ID: W0310085 ST OF AK DNR, OIL AND GAS 550 W 7TH AVE ST E 1100 ANCHORAGE. AK 99501 907-269-8805 legalads@adn.com ST OF AKIONR'OIL AND GAS ACCOUNT INFORMATION TRANSACTION REPORT Date 1:01 PM - Mon. Aug 3.2020 Amount: 323.72 SCHEDULE FOR AD NUMBER W00271730 Tus Aug 4.2020 Anchorage Daily Neves Legals Of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number. CO -20-013 And AJO-20-016 KUpan* River Unit, KUparuk River -Torok Oil Pool Oooguruk Unit, Oooguruk-Torok Oil Pool The application Of C0n000PNII)ps Alaska, Inc (CPAI) for amendments to Conservation order (CO) N0. 725 and Area Injection Order (Alb) No. 39 to expand the areal extent of the KUpafUk River Unit (KRU), KUparuk River -Torok Oil Pool (KRTO). On its Own Initiative the Alaska Oil and Gas Conservation Commission (AOGCC) Is proposirl t0 contract the affected areas Of CO No. 645 and AIO N0.37 for En Us Operating Company, Inf.'s (Enl) Oooguruk Unit(OU), Oooguruk-Torok Oil Pool (OTOP). CPAI, by letter dated July 24, 2020, requests the AOGCC amend CO N0.725 and Ax) No. 39 t0 expand the affected area Of the KRTOP to Include acreage that Is currently pan of the OTOP but the acreage Is now leased by CPAI. On its own motion the AOGCC is proposing t0 amend CO NO. 645 and A10 N0. 37 to contract the affected area of the OTOP to remove acreage that is currently defined as part of the OTOP but for which Ent does not hold the leases for. The AOGCC has tentatively scheduled a public hearing on this application for September 15, 2020, at 10:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hear)ng be held, a written request must be filed with the AOGCC no later an 4:30 P.M. on August 21, 2020. t a request for a hearing is not timely filed, the AOGCC mayY consider the Issuance of an order without a hearing. To learn If the AOGCC will hold the hearing, call (907) 793-1221 after August 24, 2020. t a hearing IS requested, the COVID-19 virus may necessitate that the hearing be held telephonlca0y. Those desiring to participate or be present at the hearing should check with AOGCC the day before the hearig to ascertain If the hearing will be telephonic. If the hearing Is telephonic, on the day of the hearing, those desiring t0 be present Or participate should Call 1-800-315-6338 and, when Instructed t0 do so, enter the code 14331 followed by the M sign. Because the hearing will start at t0:oo a.m., the phone lines will be available starting at 9:45 a.m. Depending on call volume, those calling In may need to make repeated attempts before getting through. in addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no leer than 4:30 P.M. on September 7, 2020, except that, if a hearing is held, Comments must be received no later than the conclusion of the September 15, 2020 hearng t, because of a disability, special accommodations may be needed t0 comment or attend the hearing, Contact the AOGCCS Special Assistant )Ody Coiomble, a (907) 93-1221, no later than September 10, 2020. Jere" M. Price Chair, CommiWorher Published: August 4, 2020 Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 i Carlotta Chernoff Manager GKA Development ConocoPhillips Alaska ATO -602 700 G Street Anchorage, AK 99501 Phone 907-263-4692 July 24, 2020 Jeremy Price Chair, Alaska Oil and Gas Conservation Commission 333 W. 7th Ave #100 Anchorage, Alaska, 99501-3539 RE: Application for Area Injection Order, and Pool Rules expansion Kuparuk River -Torok Oil Pool, North Slope, AK Dear Commissioner Price, ConocoPhillips Alaska, Inc. as operator of the Kuparuk River Unit, and on behalf of the working interest owners, requests that the Alaska Oil and Gas Conservation Commission approve administrative amendments to Conservation Order 725 and Area Injection Order 39 to allow for the expansion of the Kuparuk River - Torok Oil Pool and area injection order to include lands acquired and recently incorporated into the Kuparuk River Unit. Please find a digital copy of the application attached to this e-mail. Please contact Patrick Perfetta (907-263-4531) if you have questions or require additional information. Regards, Carlotta Chernoff CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page I 1 A AM Alaska APPLICATION FOR EXPANSION OF THE KUPARUK RIVER-TOROK OIL POOL July 24, 2020 Outline 1. Introduction 2. Kuparuk River -Torok Oil Pool History 3. Proposed Kuparuk River -Torok Oil Pool Expansion 4. Torok Development 5. Development Drilling Plans 6. Proposed Amendments to the Kuparuk River -Torok Conservation, and Area Injection Orders 7. No Underground Sources of Drinking Water List of Figures 1. Location Map 2. Torok Oil Pool Type Log 3. Chemistry of Sampled/Produced Water, 3S area 4. Confidential: Torok Oil Pool, Gross Interval Isochore 5. Confidential: Torok Oil Pool, Top Depth Structure 6. Confidential: Well Log Cross -Section A -A' 7. Confidential: Seismic Cross -Section B -B' Confidential materials are submitted in Appendix 1. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 12 1. INTRODUCTION Document Scope This application is submitted for approval by the Alaska Oil and Gas Conservation Commission ("Commission") to expand the Kuparuk River -Torok Oil Pool (KRTOP) under Conservation Order (CO) 725, and Area Injection Order (AIO) 39. The proposed expansion area includes all lands acquired by ConocoPhillips Alaska, Inc. (CPAI) from Caelus Natural Resources Alaska, LLC (Caelus) in 2019. These lands were subsequently included in the 12th expansion of the Kuparuk River Unit (KRU), as it pertains to the Torok (Figure 1). This expansion would make the western, northern, and southern boundaries of the KRTOP equivalent to the current KRU boundary in the expansion area, to allow for development of the Torok over this area. 2. KUPARUK RIVER-TOROK OIL POOL HISTORY Original KRTOP CO 725 & AIO 39 CO 725, issued in July 2016, includes the accumulation of hydrocarbons common to and correlating with the interval between the measured depths of 4,991 and 5,272 feet in the Kalubik No. 1 well (Figures 1 & 2). This accumulation stratigraphically defines the Kuparuk River -Torok Oil Pool. AIO 39 authorizing injection of fluids for enhanced oil recovery from the KRTOP was also issued in July 2016. CO 725.001 In September 2016, the Commission modified the original order in the following ways: • Finding 10: Removal of the term "Regular production", due to the potential tax implications of this language. • Conclusion 12: Removal of language related to pre -production from injectors. • Expiration clause replaced by Rule 13 related to expiration date. CO 725.002 In May 2017, the Commission modified the original order to administratively remove the requirement for an annual reservoir review meeting for KRTOP. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 13 3. PROPOSED KUPARUK RIVER-TOROK OIL POOL EXPANSION Requested Scope CPAI requests the Commission to amend CO 725 and AIO 39 to expand the Kuparuk River -Torok Oil Pool to include lands acquired by CPAI from Caelus in 2019. These lands were included in the 12th expansion of the KRU, as it pertains to the Torok, approved in August 2019 by the Alaska Department of Natural Resources (Figure 1., and Table 1.). These lands previously belonged to the Oooguruk Unit (OU) and were voluntarily contracted by Caelus. As these lands once belonged to the OU, the Oooguruk-Torok Oil Pool (OTOP) covers a portion of these lands. The OTOP will need to be contracted in order to accommodate the expansion of the Kuparuk River -Torok Oil Pool. This will allow KRU owners the ability to develop and implement enhanced oil recovery operations on these lands. Development plans are summarized in Section 4 4. TOROK DEVELOPMENT Development Plans The expansion of the KRTOP will extend the existing pool to include the area currently covered by the OTOP. In addition, it is requested that the expansion include all acreage included in the 12th expansion of the KRU, as it pertains to the Torok reservoir. This would make the western, northern, and southern boundaries of the Kuparuk River -Torok Oil Pool consistent with the current unit boundary in the expansion area, as the Torok exists over an area larger than that covered by the existing OTOP on the lands under consideration. The expansion will allow for development of the Torok from KRU 3S pad, and the newly named KRU 3T pad (previously known as Nuna pad). The KRU owners began testing the Torok with a recompletion of the 3S-19 well in 2013. Since that time four horizontal wells (2 producers, and 2 injectors), and a vertical data collection well (Moraine 1) have been drilled to assess the Torok. To date 1.05 MMSTBO have been produced from the Torok from these wells. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from the paleo-Brookian shelf margin to the west. The sandstones and siltstones have been interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes. Gross thickness of the Torok reaches ^300 feet but thins basin -ward to the southwest, southeast, and northeast. The Torok also pinches -out to the west against the paleo-slope. Appendix 1 is a confidential section that expounds upon the geology of the pool expansion area. CPA[ Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 14 S. DEVELOPMENT DRILLING PLANS Planned Wells Two additional horizontal wells (1 producer, and 1 injector) have been approved by KRU working interest owners. These wells will be drilled as part of the next rotary drilling program at 3S pad (purple dashed lines emanating from 3S pad, displayed on Figure 1.). 6. PROPOSED AMENDMENTS TO KUPARUK RIVER-TOROK CONSERVATION ORDER AND AREA INJECTION ORDER Affected Area CPAI proposes the area subject to the conservation order for the KRTOP (CO 725), and corresponding area injection order (AIO 39) be expanded, so that these orders apply to the following, restated lands: Umiat Meridian T11N, R8E Section 1 - 4 all Section 9 - 12 all T12N, R7E Section 1 - 26 all Section 35 - 36 all T12N, R8E Section 2 - 11 all Section 13 - 36 all T13N, R7E Section 19 - 36 all T13N, R8E Section 19 - 21 all Section 28 - 34 all Table 1. Description of restated lands. 7. NO UNDERGROUND SOURCES OF DRINKING WATER No Underground Source of Drinking Water History In AIO 37, Conclusion #3, the AOGCC concluded that the Torok injection interval is not a potential source of drinking water. Finding #19 of the same order, provides supporting documentation. This documentation includes details of sampled water from the Torok from the ODST-45A being equivalent to 16,980 mg/1 (which is greater than the 10,000 mg/I cut off for freshwater). Also, Finding #19 documents a ruling from the Environmental Protection Agency, authorized by Disposal Injection Order 31, that the Torok is not a source of drinking water. This is based on calculations from ten nearby wells in the Torok ranging from 17,000 to 24,000 mg/I NaCl. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 15 In AIO 39, Conclusion #3, the AOGCC determined that the Torok injection interval does not contain freshwater and is not a potential underground source of drinking water. Finding #19 of the same order provides a summary of supporting documentation. This documentation includes water samples collected from Moraine 1 core measurements (21,363 mg/I of total dissolved solids) and produced water samples from KRU 3S-19 and 35-620 wells ranging from 16,000 to 20,000 mg/I NaCl. Additional data related to No Underground Source of Drinking Water In addition to the above Conclusions, and Findings, CPAI has sampled additional waters from the Torok interval in several wells in the 3S area. The composition of the water is on average 18,635 mg/l, consistently above the 10,000 mg/I cut off for freshwater. A summary of the tested waters from all the 3S area wells is included in Figure 3. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 16 co"DCOM➢Bµ, ' ,4.a' , Ka�Ublk 1 ConocoPhil'ips ago- asrw, < Torok Reservoir ' ��, Administrative Boundaries and Proposals �� 000guruk Unit Legend -�— ' Bottom Hole Location - Well Spider .� •; KRU Torok Oil Pool Oooguruk Torok Oil Pool Nuna/3T Pad - <: - Torok PA — w Unit Outline 0 Coastline Gravel Footprint Proposed Well Plan ---- 3S Pad +� A;4. v � A- Figure 1. Map displaying existing boundaries and proposed amendments related to the Torok Oil Pool: current Kuparuk River -Torok Oil Pool (CO 725)/A10 39 (blue polygon with blue diagonal lines), current Oooguruk Torok Oil Pool (CO 645)/A10 37 (green polygon with green horizontal lines), proposed area to be amended to the Kuparuk River -Torok Oil Pool/A10 39 (blue shaded polygon), Oooguruk Torok Participating Area (red polygon), next round of approved Torok horizontal wells (purple dashed lines emanating from 3S pad). A note on the wellbore originating from the Oooguruk pad that extends into the Kuparuk River Unit: This is the ODST-47, a well which has subsequently been P&A'd. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 17 Kuparuk River - Torok Oil Pool Cmre7 a) ILAG'+ Rel ; Ccnaa; ' 90 r,- tN Cji I ktivo f0 AP, 241 Ji Com,+ fi5 -- WCC — 2bS T , Reak2rc 6? i LIZ 5 • Si • sr» aw Pyr ._ cq k.€sSfkrr;, i Phi: ` t F,Yv' 9 U' 7 C A 2 ry 76 usit y� Figure 2. The Kalubik No. 1 well serves as the type log for both the Oooguruk, and Kuparuk River -Torok Oil Pools (The above image is presented for illustration purposes. Refer to the well log measurements recorded in exploratory well Kalubik No. 1 for the precise representation of the Kuparuk-Torok Oil Pool.). See figure 1 for location of the Kalubik 1. CPRI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 18 well Sample Date Total Cations (mg/1) Total Anions (mg/1) Total ionic composition (mg/1) Comment Moraine 1 2/26/2015 8,128.5 13,203.7 21,332.2 average of 2 RDTsamples 3S-19 8/23/2013 6,969.3 11,414.0 18,383.3 anion Cl only 35-19 9/15/2013 7,567.6 11,248.0 18,815.6 anion Cl only 3S-19 11/4/2013 7,608.1 11,145.0 18,753.1 anion Cl only 3S-19 5/21/2014 7,797.6 12,792.2 20,589.8 35-19 10/11/2014 7,205.3 10,951.2 18,156.5 3S-611 11/8/2019 8,157.2 11,332.5 19,489.7 anions Cl, and SO4only 3S-611 3/31/2020 8,158.2 10,508.2 18,666.4 35-613 7/22/2016 5,964.1 54,969.8 60,933.9 likely contaminated 3S-613 7/28/2016 5,854.9 9,528.4 15,383.3 likely dilluted with fracwater 3S-613 8/12/2016 6,014.1 9,755.4 15,769.5 likely dilluted with frac water 35-613 8/14/2016 6,614.9 10,191.8 16,806.7 likely dilluted with frac water 3S-613 8/16/2016 6,583.3 10,150.1 16,733.4 likely dilluted with frac water 3S-613 8/23/2016 7,276.4 10,177.2 17,453.6 3S-620 6/2/2015 13,615.8 17,833.5 31,449.3 likely contminated; anions Cl, and SO4 only 3S-620 6/4/2015 8,828.7 13,168.4 21,997.1 cation Na, and K; anion CI only 3S-620 6/6/2015 8,398.7 10,935.3 19,334.0 cation NA only; anion CI only 3S-620 6/8/2015 11,518.0 10,359.5 21,877.5 cation NA only; anion CI only 3S-620 7/4/2015 6,780.9 12,085.9 18,866.8 35-620 9/11/2015 7,398.4 8,772.2 16,170.6 anion CI only 35-620 12/20/2015 6,681.3 11,024.8 17,706.1 3S-620 1/26/2017 7,053.6 11,501.5 18,555.1 3S-620 10/22/2017 8,081.7 12,421.7 20,503.4 7,556.0 11,079.4 18,635.4 Average Unless otherwise noted, cations include Ca, Mg, Na, and K Unless otherwise noted, anions include Cl, CO3, HCO3, and SO4 Samples noted as 'likely contaminated" ore not included in averages Figure 3. Summary of Torok water composition from samples collected from 3S area wells. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 19 Additional Geologic Information To expand on the information included in the non -confidential portion of the application, the following is provided for additional context for the Torok. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from gullies associated with the paleo-Brookian shelf margin to the west. The sandstones and siltstones are interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes (see Figure 6 for a well log cross-section demonstrating the lateral extent of the Torok, see Figures 4 and 5 for section location). Gross thickness of the Torok reaches —300 feet but thins basin -ward to the southwest, southeast, and northeast. To the west it pinches -out against the paleo-slope. The exact location of the westward pinch -out of the Torok comes with a degree of uncertainty. Figure 4 contains the Torok gross interval isochore. The western pinch -out in this interpretation shows the western limit of the Torok extending well past the western boundary of the current Oooguruk-Torok Oil Pool (CO 645)/AIO 37. The western pinch -out has the potential to extend farther up the paleo-slope for the entire western margin, as it does in the northwest corner of the Kuparuk River Unit (seismic section in Figure 7 shows this interpreted extent, see Figures 4 and 5 for seismic line location). It is due to this uncertainty, that the western boundary of the KRTOP be extended to be equivalent to the western margin of the Kuparuk River Unit. Fluid contacts within the Torok are uncertain. Both Pioneer and CPAI, as part of their applications for establishing Pool Rules from the AOGCC, addressed that a distinct oil -water contact (OWC) had not been identified within the Torok. Figure 5 contains a Top Torok depth structure map. It shows that the area is defined by a southeast plunging anticline. The Colville Delta No. 3 exploration well tested oil down to a true vertical depth subsea (TVDSS) of -5,150 feet. The highest -known water is established in the Ivik No. 1 exploration well within the Oooguruk Unit at -5,212 feet TVDSS. In establishing the Kuparuk River - Torok Oil Pool Rules, CPAI observed that mobile water is present in the Torok beginning at a depth of - 5,190 to -5,275 feet TVDSS. It is undetermined whether this represents a single OWC or multiple OWC's. In either case, there appears to be a wide transition zone where oil and water will be produced together at varying percentages, driven by capillary effects within the reservoir. All the wells produced to date, even those above -5,190 feet TVDSS have produced some level of formation water from the start. Initial water -cuts range from approximately 10-75%, generally depending on depth. Given the high variability in water -cuts in the wells produced to date, the expected produced water -cut within the expansion area can only be estimated with production from additional wells. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 1 10 - • GonocoPhOkps x 4° R ConocoPhilli s a. ti • a. Torok Reservoir Administrative Boundaries and A' Proposals with Gross isochore s. Oooguruk Unit - A y .. ' Legend 9 Bottom Hole Location _- Well Spider �... KRU Torok Oil Pool Oooguruk Torok Oil Pool B Torok PA C_ 25 Unit Outline 0 i r- J Gravel Footprint;___ a Proposed Well Plan — — — — 35 Pad a B`' Rra° - • GonocoPhOkps x 4° R ConocoPhilli s a. ti • a. Torok Reservoir Administrative Boundaries and A' Proposals with Gross isochore s. Oooguruk Unit - A y .. ' Legend 9 Bottom Hole Location _- Well Spider �... KRU Torok Oil Pool Oooguruk Torok Oil Pool Nuna/3T Pad '�u"., Torok PA C_ •t Unit Outline 0 i Coastline J Gravel Footprint;___ a Proposed Well Plan — — — — 35 Pad a B`' Rra° £. ,e g, 4 ° . 9 e s 0 1 2 Miles R A 44a 1% iL A e • e e..f.. A , d-: '4 .V .a ✓:b' S' .4iSR—,! y Figure 4. Map from Figure 1 with addition of Torok gross interval isochore color overlay, location of well log cross-section A -A', and location of seismic line B -B'. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 111 © •nocoPhillips Torok Reservoirc t .w-. •4. 1�,� R i Administrative Boundaries an1 •: • ®Proposals with Depth Structure- Legend Bottom Hole Location Well Spider 4A i ',4 KRU Torok Oil Pool Torok PA Unit Outline Coastline � 7 Footprint WRIt *!4A a00 -,.•�,j��- jam' ��j�'' ..� 1 Miles ��•�:e..:o..�® Bio `� `"'" '��® � �, ° '�I , ` J i r ,r Figure 5. Map from Figure 1 with addition of Top Torok depth structure overlay, location of well log cross-section A -A', location of seismic line B -B', and key wells mentioned in text. f- CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 1 12 x --' - -FT] cbrtt`-- J J f1 Figure 6. Well log cross-section A -A' demonstrating lateral extent and continuity of the Torok (wells included are Placer 3, Moraine 1, Nuna 113131, Colv Delta 2, Kalubik 2, and Kalubik 1). Torok Oil Pool CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 1 13 GKA Merge 2017 0-20deg stack (Time) B' Figure 7, Seismic cross-section B -B` demonstrating lateral extent and continuity of the Torok (Green horizon is equivalent to top of the Torok Oil Pool, Yellow horizon is —equivalent to the base of the Torok Oil Pool). CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 11 =4 em - Alaska, APPLICATION FOR EXPANSION OF THE KUPARUK RIVER-TOROK OIL POOL July 24, 2020 Outline 1. Introduction 2. Kuparuk River -Torok Oil Pool History 3. Proposed Kuparuk River -Torok Oil Pool Expansion 4. Torok Development 5. Development Drilling Plans 6. Proposed Amendments to the Kuparuk River -Torok Conservation, and Area Injection Orders 7. No Underground Sources of Drinking Water List of Figures 1. Location Map 2. Torok Oil Pool Type Log 3. Chemistry of Sampled/Produced Water, 3S area 4. Confidential: Torok Oil Pool, Gross Interval Isochore 5. Confidential: Torok Oil Pool, Top Depth Structure 6. Confidential: Well Log Cross -Section A -A' 7. Confidential: Seismic Cross -Section B -B' Confidential materials are submitted in Appendix 1. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 12 1. INTRODUCTION Document Scope This application is submitted for approval by the Alaska Oil and Gas Conservation Commission ("Commission") to expand the Kuparuk River -Torok Oil Pool (KRTOP) under Conservation Order (CO) 725, and Area Injection Order (AIO) 39. The proposed expansion area includes all lands acquired by ConocoPhillips Alaska, Inc. (CPAI) from Caelus Natural Resources Alaska, LLC (Caelus) in 2019. These lands were subsequently included in the 12th expansion of the Kuparuk River Unit (KRU), as it pertains to the Torok (Figure 1). This expansion would make the western, northern, and southern boundaries of the KRTOP equivalent to the current KRU boundary in the expansion area, to allow for development of the Torok over this area. 2. KUPARUK RIVER-TOROK OIL POOL HISTORY Original KRTOP CO 725 & AIO 39 CO 725, issued in July 2016, includes the accumulation of hydrocarbons common to and correlating with the interval between the measured depths of 4,991 and 5,272 feet in the Kalubik No. 1 well (Figures 1 & 2). This accumulation stratigraphically defines the Kuparuk River -Torok Oil Pool. AIO 39 authorizing injection of fluids for enhanced oil recovery from the KRTOP was also issued in July 2016. CO 725.001 In September 2016, the Commission modified the original order in the following ways: • Finding 10: Removal of the term "Regular production", due to the potential tax implications of this language. • Conclusion 12: Removal of language related to pre -production from injectors. • Expiration clause replaced by Rule 13 related to expiration date. CO 725.002 In May 2017, the Commission modified the original order to administratively remove the requirement for an annual reservoir review meeting for KRTOP. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 13 3. PROPOSED KUPARUK RIVER-TOROK OIL POOL, EXPANSION Requested Scope CPA[ requests the Commission to amend CO 725 and AIO 39 to expand the Kuparuk River -Torok Oil Pool to include lands acquired by CPA[ from Caelus in 2019. These lands were included in the 12th expansion of the KRU, as it pertains to the Torok, approved in August 2019 by the Alaska Department of Natural Resources (Figure 1., and Table 1.). These lands previously belonged to the Oooguruk Unit (OU) and were voluntarily contracted by Caelus. As these lands once belonged to the OU, the Oooguruk-Torok Oil Pool (OTOP) covers a portion of these lands. The OTOP will need to be contracted in order to accommodate the expansion of the Kuparuk River -Torok Oil Pool. This will allow KRU owners the ability to develop and implement enhanced oil recovery operations on these lands. Development plans are summarized in Section 4. 4. TOROK DEVELOPMENT Development Plans The expansion of the KRTOP will extend the existing pool to include the area currently covered by the OTOP. In addition, it is requested that the expansion include all acreage included in the 12th expansion of the KRU, as it pertains to the Torok reservoir. This would make the western, northern, and southern boundaries of the Kuparuk River -Torok Oil Pool consistent with the current unit boundary in the expansion area, as the Torok exists over an area larger than that covered by the existing OTOP on the lands under consideration. The expansion will allow for development of the Torok from KRU 3S pad, and the newly named KRU 3T pad (previously known as Nuna pad). The KRU owners began testing the Torok with a recompletion of the 3S-19 well in 2013. Since that time four horizontal wells (2 producers, and 2 injectors), and a vertical data collection well (Moraine 1) have been drilled to assess the Torok. To date 1.05 MMSTBO have been produced from the Torok from these wells. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from the paleo-Brookian shelf margin to the west. The sandstones and siltstones have been interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes. Gross thickness of the Torok reaches "300 feet but thins basin -ward to the southwest, southeast, and northeast. The Torok also pinches -out to the west against the paleo-slope. Appendix 1 is a confidential section that expounds upon the geology of the pool expansion area. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 14 5. DEVELOPMENT DRILLING PLANS Planned Wells Two additional horizontal wells (1 producer, and 1 injector) have been approved by KRU working interest owners. These wells will be drilled as part of the next rotary drilling program at 3S pad (purple dashed lines emanating from 3S pad, displayed on Figure 1.). 6. PROPOSED AMENDMENTS TO KUPARUK RIVER-TOROK CONSERVATION ORDER AND AREA INJECTION ORDER Affected Area CPAI proposes the area subject to the conservation order for the KRTOP (CO 725), and corresponding area injection order (AIO 39) be expanded, so that these orders apply to the following, restated lands: Umiat Meridian T11N, R8E Section 1 - 4 all Section 9 - 12 all T12N, R7E Section 1- 26 all Section 35 - 36 all T12N, R8E Section 2 - 11 all Section 13 - 36 all T13N, R7E Section 19 - 36 all T13N, R8E Section 19 - 21 all Section 28 - 34 all Table 1. Description of restated lands. 7. NO UNDERGROUND SOURCES OF DRINKING WATER No Underground Source of Drinking Water History In AIO 37, Conclusion #3, the AOGCC concluded that the Torok injection interval is not a potential source of drinking water. Finding #19 of the same order, provides supporting documentation. This documentation includes details of sampled water from the Torok from the ODST-45A being equivalent to 16,980 mg/I (which is greater than the 10,000 mg/I cut off for freshwater). Also, Finding #19 documents a ruling from the Environmental Protection Agency, authorized by Disposal Injection Order 31, that the Torok is not a source of drinking water. This is based on calculations from ten nearby wells in the Torok ranging from 17,000 to 24,000 mg/I NaCl. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 15 In AIO 39, Conclusion #3, the AOGCC determined that the Torok injection interval does not contain freshwater and is not a potential underground source of drinking water. Finding #19 of the same order, provides a summary of supporting documentation. This documentation includes water samples collected from Moraine 1 core measurements (21,363 mg/I of total dissolved solids) and produced water samples from KRU 3S-19 and 3S-620 wells ranging from 16,000 to 20,000 mg/I NaCl. Additional data related to No Underground Source of Drinking Water In addition to the above Conclusions, and Findings, CPAI has sampled additional waters from the Torok interval in several wells in the 3S area. The composition of the water is on average 18,635 mg/I, consistently above the 10,000 mg/I cut off for freshwater. A summary of the tested waters from all the 3S area wells is included in Figure 3. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 16 Figure 1. Map displaying existing boundaries and proposed amendments related to the Torok Oil Pool: current Kuparuk River -Torok Oil Pool (CO 725)/AIO 39 (blue polygon with blue diagonal lines), current Oooguruk Torok Oil Pool (CO 645)/AIO 37 (green polygon with green horizontal lines), proposed area to be amended to the Kuparuk River -Torok Oil Pool/AlO 39 (blue shaded polygon), Oooguruk Torok Participating Area (red polygon), next round of approved Torok horizontal wells (purple dashed lines emanating from 3S pad). A note on the wellbore originating from the Oooguruk pad that extends into the Kuparuk River Unit: This is the ODST-47, a well which has subsequently been P&A'd. TorokPal Administrative Boundaries and Proposals w •... .. Legend Bottom Hole Location Well Spider KRU Torok Oil Pool Oooguruk Torok Oil Pool ,Nuna/3T P d' Torok PA w rj A dw Unit Outline �'' _ Coastline Gravel Footprint Proposed . Miles .�.'s.� Figure 1. Map displaying existing boundaries and proposed amendments related to the Torok Oil Pool: current Kuparuk River -Torok Oil Pool (CO 725)/AIO 39 (blue polygon with blue diagonal lines), current Oooguruk Torok Oil Pool (CO 645)/AIO 37 (green polygon with green horizontal lines), proposed area to be amended to the Kuparuk River -Torok Oil Pool/AlO 39 (blue shaded polygon), Oooguruk Torok Participating Area (red polygon), next round of approved Torok horizontal wells (purple dashed lines emanating from 3S pad). A note on the wellbore originating from the Oooguruk pad that extends into the Kuparuk River Unit: This is the ODST-47, a well which has subsequently been P&A'd. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 17 Kuparuk River - Torok Oil Pool i Figure 2. The Kalubik No. 1 well serves as the type log for both the Oooguruk, and Kuparuk River -Torok Oil Pools (The above image is presented for illustration purposes. Refer to the well log measurements recorded in exploratory well Kalubik No. 1 for the precise representation of the Kuparuk-Torok Oil Pool.). See figure 1 for location of the Kalubik 1. C,R .f1D �.est�6x.Gi Rn�6 J: CON A i 65 Gbit'c 265 �srd • Sb Stta, �'�tg'�> F,?eJ.�fSlf,i MYPpf '.i Cod , 2 IDA OHM 2(� T <IVi DTC Y,Tii ) 16 lei 70 Figure 2. The Kalubik No. 1 well serves as the type log for both the Oooguruk, and Kuparuk River -Torok Oil Pools (The above image is presented for illustration purposes. Refer to the well log measurements recorded in exploratory well Kalubik No. 1 for the precise representation of the Kuparuk-Torok Oil Pool.). See figure 1 for location of the Kalubik 1. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 18 Well Sample Date Total Cations (mg/1) Total Anions (mg/11 Total ionic composition (mR/I) Moraine 1 2/26/2015 8,128.5 13,203.7 21,332.2 3S-19 8/23/2013 6,969.3 11,414.0 18,383.3 3S-19 9/15/2013 7,567.6 11,248.0 18,815.6 3S-19 11/4/2013 7,608.1 11,145.0 18,753.1 3S-19 5/21/2014 7,797.6 12,792.2 20,589.8 35-19 10/11/2014 7,205.3 10,951.2 18,156.5 35-611 11/8/2019 8,157.2 11,332.5 19,489.7 3S-611 3/31/2020 8,158.2 10,508.2 18,666.4 3S-613 7/22/2016 5,964.1 54,969.8 60,933.9 3S-613 7/28/2016 5,854.9 9,528.4 15,383.3 3S-613 8/12/2016 6,014.1 9,755.4 15,769.5 3S-613 8/14/2016 6,614.9 10,191.8 16,806.7 3S-613 8/16/2016 6,583.3 10,150.1 16,733.4 3S-613 8/23/2016 7,276.4 10,177.2 17,453.6 3S-620 6/2/2015 13,615.8 17,833.5 31,449.3 35-620 6/4/2015 8,828.7 13,168.4 21,997.1 3S-620 6/6/2015 8,398.7 10,935.3 19,334.0 3S-620 6/8/2015 11,518.0 10,359.5 21,877.5 3S-620 7/4/2015 6,780.9 12,085.9 18,866.8 3S-620 9/11/2015 7,398.4 8,772.2 16,170.6 3S-620 12/20/2015 6,681.3 11,024.8 17,706.1 Comment average of 2 RDTsamples anion Cl only anion Cl only anion Cl only anions Cl, and SO4 only likely contaminated likely dilluted with frac water likely dilluted with frac water likely dilluted with frac water likely dilluted with frac water likely contminated; anions Cl, and 504 only cation Na, and K; anion Cl only cation NA only; anion Cl only cation NA only; anion Cl only anion Cl only 3S-620 1/26/2017 7,053.6 11,501.5 18,555.1 3S-620 10/22/2017 8,081.7 12,421.7 20,503.4 7,556.0 11,079.4 18,635.4 Average Unless otherwise noted, cations include Ca, Mg, Na, and K Unless otherwise noted, anions include Cl, CO3, HCO3, and SO4 Samples noted as 'likely contaminated" are not included in averages Figure 3. Summary of Torok water composition from samples collected from 3S area wells. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 19 Additional Geologic Information To expand on the information included in the non -confidential portion of the application, the following is provided for additional context for the Torok. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from gullies associated with the paleo-Brookian shelf margin to the west. The sandstones and siltstones are interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes (see Figure 6 for a well log cross-section demonstrating the lateral extent of the Torok, see Figures 4 and 5 for section location). Gross thickness of the Torok reaches —300 feet but thins basin -ward to the southwest, southeast, and northeast. To the west it pinches -out against the paleo-slope. The exact location of the westward pinch -out of the Torok comes with a degree of uncertainty. Figure 4 contains the Torok gross interval isochore. The western pinch -out in this interpretation shows the western limit of the Torok extending well past the western boundary of the current Oooguruk-Torok Oil Pool (CO 645)/AIO 37. The western pinch -out has the potential to extend farther up the paleo-slope for the entire western margin, as it does in the northwest corner of the Kuparuk River Unit (seismic section in Figure 7 shows this interpreted extent, see Figures 4 and 5 for seismic line location). It is due to this uncertainty, that the western boundary of the KRTOP be extended to be equivalent to the western margin of the Kuparuk River Unit. Fluid contacts within the Torok are uncertain. Both Pioneer and CPAI, as part of their applications for establishing Pool Rules from the AOGCC, addressed that a distinct oil -water contact (OWC) had not been identified within the Torok. Figure 5 contains a Top Torok depth structure map. It shows that the area is defined by a southeast plunging anticline. The Colville Delta No. 3 exploration well tested oil down to a true vertical depth subsea (TVDSS) of -5,150 feet. The highest -known water is established in the Ivik No. 1 exploration well within the Oooguruk Unit at -5,212 feet TVDSS. In establishing the Kuparuk River - Torok Oil Pool Rules, CPAI observed that mobile water is present in the Torok beginning at a depth of - 5,190 to -5,275 feet TVDSS. It is undetermined whether this represents a single OWC or multiple OWC's. In either case, there appears to be a wide transition zone where oil and water will be produced together at varying percentages, driven by capillary effects within the reservoir. All the wells produced to date, even those above -5,190 feet TVDSS have produced some level of formation water from the start. Initial water -cuts range from approximately 10-75%, generally depending on depth. Given the high variability in water -cuts in the wells produced to date, the expected produced water -cut within the expansion area can only be estimated with production from additional wells. PAGES 10-13 HELD CONFIDENTIAL