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Home My WebLink AboutO 220Other Order 220 Docket Number: OTH-25-008 Beluga River Unit 1. February 13, 2025 AOGCC request for info and notice of investigation 2. March 3, 2025 Hilcorp response to notice of investigation 3. May 14, 2025 AOGCC notice of proposed enforcement action 4. May 28, 2025 Hilcorp response to notice of enforcement 5. July 24, 2025 Hilcorp civil penalty payment STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage Alaska 99501 Re: Beluga River Unit 241-23 (PTD 223-061) and 211-35 (PTD 223-050) unapproved perforating ) ) ) ) ) ) Other Order 220 Docket Number: OTH-25-008 Beluga River Unit June 26, 2025 DECISION AND ORDER On May 14, 2025, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to Hilcorp Alaska, LLC (Hilcorp). The Notice proposed an $88,000 civil penalty under AS 31.05.150(a). SUMMARY OF PROPOSED ENFORCEMENT ACTION: Hilcorp violated 20 AAC 25.507(a) by perforating the Beluga River Unit (BRU) wells 241-23 (PTD 223-061) and 211-35 (PTD 223-050) above the approved sundry depth ranges. The approved (Sundry 323-526) measured depth (MD) perforating range for BRU 241-23 was 4741’ MD to 7185’ MD, yet it was perforated post-rig as shallow as 4603’ MD on November 25, 2023. The approved (Sundry 323-400) MD perforating range for BRU 211-35 was 4694’ MD to 6930’ MD, yet it was perforated post-rig as shallow as 4443’ MD on August 19, 2023. For this violation, the AOGCC proposed to impose a civil penalty on Hilcorp under AS 31.05.150 in the amount of $88,000 (10% above other past fines for similar unauthorized changes to approved programs). FINDINGS AND CONCLUSIONS: On May 29, 2025, Hilcorp responded to the Notice and requested an informal review. The informal review was held at the AOGCC office on June 13, 2025. During the review Hilcorp acknowledged the unauthorized perforating and did not contest the fine or the fine amount. The AOGCC finds that Hilcorp committed the violation as initially alleged in the Notice and that the proposed $88,000 penalty is appropriate under 31.05.150(g). NOW THEREFORE IT IS ORDERED THAT: Hilcorp Alaska, LLC is assessed a civil penalty in the amount of $88,000 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. As an Operator involved in an enforcement action, Hilcorp Alaska, LLC is required to preserve documents concerning the above action until after resolution of the proceeding. Other Order 220 June 26, 2025 Page 2 of 2 DONE at Anchorage, Alaska and dated June 26, 2025. Jessie L. Chmielowski Gregory C. Wilson Commissioner Commissioner cc: Phoebe Brooks (AOGCC) 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. FOR Samantha Coldiron Digitally signed by Samantha Coldiron Date: 2025.06.26 11:42:28 -08'00'Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2025.06.26 15:08:13 -08'00' From:Coldiron, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Other Order 220 (Hilcorp) Date:Friday, June 27, 2025 9:13:06 AM Attachments:OTHER220.pdf 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 5 M Hilcorp Alaska LLC P.O.Box 61229 Houston TX 77208-1229 Owner: 40012563 Check Date: 07115/2025 Ohe3k Number: 42044259 SAP I30c No Inu. Date kn"ice No Discount Not Amount' 1900186331 06/26/2025 JUL 2 4 2025 AOGCc Hilcorp Alaska LLC P.O.Box 61229 Houston TX 77208-1229 OTHERORDER220 $0.00 AMEGY BANK Void After 90 Days $38,000.00 35-1058 1131 Check No Check Date Check Amount 42044259 07/15/2025 *****$88,000.00 PAY Eighty -Eight Thousand Dollars And Zero Cents STALE OF ATASKA AOGCC :ner, GC WS. 7TH AVE ANCHORP:;% AK 99501-3539 Authorized Signature i''4 2041, 259iI' :I 131 L0586j: 0444407748ije 4 Commissioners – Jessie Chmielowski and Greg Wilson Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, Alaska 99501 RE: Response to Docket Number: OTH-25-008 Notice of Proposed Enforcement Action Beluga River Unit 241-23 (PTD 223-061) and 211-35 (PTD 223-050) Perforating Dear Commissioner Chmielowski and Commissioner Wilson, Hilcorp has received (5/16/25) reviewed the AOGCC Notice of Proposed Enforcement Action, regarding the perforating of Beluga River Unit wells 241-23 (PTD 223-061, Sundry 323-526) and 211-35 (PTD 223- 050, Sundry 323-400) at depths shallower than approved in the corresponding sundries. Per 20 AAC 25.535(b)(4) Hilcorp is requesting an informal review of this Notice. Should you have any further questions, please contact me at (907)564-5278. Sincerely, Noel Nocas Kenai Area Operations Manager CC Bryan McLellan Wade Boman Hilcorp Alaska, LLC Noel Nocas, KEN Operations Manager 3800 Centerpoint Dr, Suite 1400 Anchorage, Alaska 99503 5/28/2025 By Samantha Coldiron at 7:28 am, May 29, 2025 Digitally signed by Noel Nocas (4361) DN: cn=Noel Nocas (4361) Date: 2025.05.28 16:12:17 - 08'00' Noel Nocas (4361) 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 May 14, 2025 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7017 2400 0000 5648 1012 Mr. Noel Nocas Kenai Area Operations Manager Hilcorp Alaska, LLC 3800 Centerpoint Dr., Suite 1400 Anchorage, AK 99503 Re: Docket Number: OTH-25-008 Notice of Proposed Enforcement Action Beluga River Unit 241-23 (PTD 223-061) and 211-35 (PTD 223-050) Perforating Beluga River Unit (BRU) Dear Mr. Nocas: 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 20 AAC 25.507(a) by perforating the Beluga River Unit (BRU) wells 241-23 (PTD 223-061) and 211-35 (PTD 223-050) above the approved sundry depth ranges. The approved (Sundry 323-526) perforating range for BRU 241-23 was 4741’ MD to 7185’ PHDVXUHGGHSWK MD, KRZHYHU it was perforated post-rig as shallow as 4603’ MD. The approved (Sundry 323-400) perforating range for BRU 211-35 was 4694’ MD to 6930’ MD, KRZHYHU it was perforated post-rig as shallow as 4443’ MD. AOGCC requires that perforations be limited to approved depth ranges to ensure the protection of shallow formations from fracturing by higher pressure deeper formations. Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)) During review of the Report of Sundry Well Operations FormV 10-404 for BRU wells 241-23 and 211-35, AOGCC discovered that Hilcorp had added perforations outside the interval approved in their Application for Sundry Approval Form 10-403 numbers 323-526 & 323-400 (see above). By certified mail and letter dated February 13, 2025, AOGCC sent Hilcorp a Request for Information (RFI) and Notice of Investigation (NOI) for the subject wells, requesting records of Docket Number: OTH-25-008 Notice of Proposed Enforcement May 14, 2025 Page 2 of 3 correspondence with AOGCC staff related to perforating shallower than the sundry- approved perforating ranges. By letter dated March 12, 2025, Hilcorp responded to the AOGCC’s request, conveying that no records of correspondence of sundry change requests for approved additional perforating could be located for either well. 20 AAC 25.507(a) states “Except as otherwise provided by 20 AAC 25.015, if an operator desires to make a substantive change in a program or activity for which commission approval is required and has been obtained under AS 31.05 or this chapter, complete details of the well’s current condition and the proposed change must be submitted to the commission with an Application for Sundry Approvals Form 10-403. A change to an approved program or activity may not be undertaken without commission approval. The commission will condition its approval as the commission considers necessary or appropriate to ensure compliance with the standards on which the original approval was based.” By perforating outside the sundry-approved intervals on each well without obtaining AOGCC approval, Hilcorp violated 20 AAC 25.507(a). Proposed Action (20 AAC 25.535(b)(3)) The factors in AS 31.05.150(g) were considered in determining the appropriate penalty. Hilcorp’s awareness that the perforated depths were outside the sundry approved depths, the potential threat to shallow formations, Hilcorp’s track record of regulatory non-compliance1, the need to deter similar behavior in future operations, and Hilcorp’s lack of effort in correcting (discovering or communicating) the violation are the factors which most heavily influenced the AOGCC’s decision, and the penalty being assessed. The proposed action is for Hilcorp to pay a civil penalty of $88,000 for violating 20 AAC 25.507(a). 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 1 Other Order 117 and Other Order 118 each imposed civil penalties of $80,000 for changing approved work procedures for Milne Point Unit Wells J-01A and J-09A, respectively. The above penalty is progressively higher (10%), appropriate for a similar violation. Docket Number: OTH-25-008 Notice of Proposed Enforcement May 14, 2025 Page 3 of 3 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 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, Jessie L. Chmielowski Gregory C. Wilson Commissioner Commissioner cc: Phoebe Brooks Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2025.05.14 14:22:49 -08'00' Gregory C. Wilson Digitally signed by Gregory C. Wilson Date: 2025.05.14 14:54:16 -08'00' 2 03/12/2025 Commissioners – Jessie Chmielowski and Greg Wilson Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, Alaska 99501 Subject: Response to Docket Number: OTH-25-008, Notice of Investigation, Beluga River Unit 241-23 (PTD 223-061) and 211-35 (PTD 223-050) Perforating Dear Commissioner Chmielowski and Commissioner Wilson, Hilcorp has reviewed the AOGCC request dated February 13, 2025, regarding the perforating of Beluga River Unit wells 241-23 (PTD 223-061, Sundry 323-526) and 211-35 (PTD 223-050, Sundry 323-400) at depths shallower than approved in the corresponding sundries. In the case of BRU 241-23, Hilcorp has not located any records of correspondence with the AOGCC that approves perforating outside of the original Sundry approved zones. In the case of BRU 211-35, which produces from a BLM lease, separate sundries were submitted to the AOGCC and BLM. The procedures submitted with the BLM sundry (ID # 2741548) included perforations of the Beluga E sands up to 4062’ MD (3832’ TVD) however the procedure included with AOGCC sundry 323-400 only included perforations within the Beluga F sands up to 4694’ MD (4459’ TVD). While the perforations were shot as shallow as 4,443’MD and remained in the F sands, no correspondence to update the AOGCC sundry procedure or reconcile it with the BLM sundry procedure intervals was found. Going forward, Hilcorp will maintain a single sundry procedure for both BLM and AOGCC approvals in BLM lease operations to ensure consistency in regulatory approvals and communications with the field. Should you have any further questions, please contact me at (907)564-5278. Sincerely, Noel Nocas Kenai Area Operations Manager CC Bryan McLellan Wade Boman Hilcorp Alaska, LLC Noel Nocas, KEN Operations Manager 3800 Centerpoint Dr, Suite 1400 Anchorage, Alaska 99503 By Samantha Coldiron at 2:26 pm, Mar 21, 2025 Digitally signed by Noel Nocas (4361) DN: cn=Noel Nocas (4361) Date: 2025.03.21 12:58:50 - 08'00' Noel Nocas (4361) 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 February 13, 2025 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7017 2400 0000 5648 0862 Mr. Noel Nocas Kenai Area Operations Manager Hilcorp Alaska, LLC 3800 Centerpoint Dr, Ste 1400 Anchorage, AK 99503 Re: Docket Number: OTH-25-008 Request for Information Notice of Investigation Beluga River Unit 241-23 (PTD 223-061) and 211-35 (PTD 223-050) Perforating Dear Mr. Nocas: The Alaska Oil and Gas Conservation Commission (AOGCC) has initiated an investigation of the initial perforating of the Beluga River Unit (BRU) wells 241-23 (PTD 223-061) and 211-35 (PTD 223-050). Upon completion, both wells were perforated above the approved sundry depth range. The approved (Sundry 323-526) measured depth (MD) perforating range for BRU 241-23 was 4741’ MD to 7185’ MD, yet it was perforated post-rig as shallow as 4603’ MD. The approved (Sundry 323-400) MD perforating range for BRU 211-35 was 4694’ MD to 6930’ MD, yet it was perforated post-rig as shallow as 4443’ MD. Hilcorp, LLC is required to provide the following information: - Record(s) of correspondence with AOGCC staff related to initial post-rig perforating above/shallower than the sundry-approved perforating ranges in wells BRU 241-23 and BRU 211-35. - Notification to the AOGCC if no such correspondence occurred. These requests are made pursuant to 20 AAC 25.300. Failure to comply with this request is itself a regulatory violation. The AOGCC reserves the right to pursue enforcement action in this matter according to 20 AAC 25.535. The information listed above should be provided to AOGCC no later than March 22, 2025. Docket Number: OTH-25-008 February 13, 2025 Page 2 of 2 Should you have any questions about this information request, please contact Wade Boman at 907- 793-1238. Sincerely, Jessie L. Chmielowski Gregory C. Wilson Commissioner Commissioner cc: P. Brooks (AOGCC) Gregory C. Wilson Digitally signed by Gregory C. Wilson Date: 2025.02.13 10:36:51 -09'00'Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2025.02.13 11:02:48 -09'00'