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Home My WebLink AboutO 225Other Order 222 Docket Number: OTH-25-032 Milne Point Field Milne Point Unit (MPU) MPU K-33 (PTD 1962020) 1. May 29, 2025 AOGCC notice of proposed enforcement 2. June 2, 2025 Hilcorp request for informal review 3. June 4, 2025 Hilcorp response to enforcement action 4. December 19, 2025 Hilcorp civil penalty payment STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage Alaska 99501 Re: Failure to Notify of Changes to Approved Permit: Failure to Notify of BOPE test ) ) ) ) ) ) Docket Number: OTH-25-032 Other Order 225 Milne Point Field Milne Point Unit (MPU) MPU K-33 (PTD 1962020 December 11, 2025 DECISION AND ORDER On May 29, 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 a $95,000 civil penalty under AS 31.05.150(a). SUMMARY OF PROPOSED ENFORCEMENT ACTION: On May 3, 2025, Hilcorp was preparing to install an electrical submersible pump (ESP) in well Milne Point Unit (MPU) K-33 under approved Sundry 325-090, utilizing contracted workover rig ASR 1. The approved sundry stated that Hilcorp was to install the ESP below 4-1/2” 12.6# 13 CR-85 VAM production tubing. On May 3, 2025, before running the planned 4-½” ESP completion on the following morning, Hilcorp determined that the tubing hanger would not be successfully landing in the wellhead utilizing the 4-1/2” tubing. This was because the wellhead penetrator clearance was restricted by the outside diameter of the 4-1/2” tubing. Hilcorp installed the ESP on 2-7/8”, 6.5#, L80 tubing without notice or approval from AOGCC. Hilcorp failed to notify and obtain approval from AOGCC prior to making this substantive change to the approved completion program as required by 20 AAC 25.507. Also, prior to running the ESP on the 2-7/8” tubing, Hilcorp performed a blowout preventer test (BOPE) of the variable bore rams against a 2-7/8” test joint to the approved sundry required pressure of 250/2000 psi with passing results. Hilcorp, however, failed to notify AOGCC of the pressure test as required by 20 AAC 25.285(f)(7) which requires: “at least 24 hours’ notice of each BOPE function pressure test must be provided so that a representative of the commission can witness the test.” For these violations, the AOGCC proposed to impose a civil penalty on Hilcorp under AS 31.05.150 in the amount of $95,000 (an increase from past fines for similar unauthorized changes to approved programs). Other Order 225 December 11, 2025 Page 2 of 2 FINDINGS AND CONCLUSIONS: On June 4, 2025, Hilcorp responded to the Notice by providing a written response of actions taken to prevent recurrence of the violations and stated that it would not contest the proposed enforcement action. Accordingly, the AOGCC finds that Hilcorp committed the violations as alleged in the Notice and that the proposed fine is appropriate after considering the statutory factors in AS 31.05.150(g). NOW THEREFORE IT IS ORDERED THAT: Hilcorp is assessed a civil penalty in the amount of $95,000 for the violations detailed within this Order. If this Order is not appealed, the fine must be paid within 30 days of issuance. If appealed, the fine will be held in abeyance until the appeal process is complete. As an Operator involved in an enforcement action, Hilcorp is required to preserve documents concerning the above action until after resolution of the proceeding. DONE at Anchorage, Alaska and Dated December 11, 2025. Jessie L. Chmielowski Gregory C. Wilson Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE Pursuant to 20 AAC 25.535(d), this order becomes final 11 days after it is issued unless within 10 days after it is issued the person files a written request for a hearing, in which case the proposed decision or order is of no effect. If the person requests a hearing, the commission will schedule a hearing under 20 AAC 25.540. As provided in AS 31.05.080(a), within 20 days after this order becomes final as discussed above, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10-days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Gregory C Wilson Digitally signed by Gregory C Wilson Date: 2025.12.11 12:30:30 -09'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2025.12.11 12:37:15 -09'00' From:Coldiron, Samantha J (OGC) To:AOGCC_Public_Notices Subject:[AOGCC_Public_Notices] Other Order 225 (Hilcorp) Date:Thursday, December 11, 2025 1:22:28 PM Attachments:OTHER225.pdf Failure to Notify of Changes to Approved Permit: Failure to Notify of BOPE test Samantha Coldiron AOGCC Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 __________________________________ List Name: AOGCC_Public_Notices@list.state.ak.us You subscribed as: samantha.coldiron@alaska.gov Unsubscribe at: https://list.state.ak.us/mailman/options/aogcc_public_notices/samantha.coldiron%40alaska.go v 4 VENDOR CHECK DATEPage 1 of 1 II INVOICE INVOICE DOCUMENT DISCOUNT AMOUNT NUMBER DATE NUMBER TAKEN PAID A• DOCNOOTH25032 12/12/2025900 0.00 95,000.00 2 n RECEIVED DEC 2 3 2025 AOGCC Hiicorp Alaska LLC PO BOX 61229 Houston, TX 77208-1229 713-209-2400 PAY Ninety Five Thousand And 0/100 Dollars TO THE ORDER OF: STATE OF ALASKA AOGCC 333 W 7TH AVE ANCHORAGE, AK 99501.3572 22 AMEGYBANK PORTER, TEXAS 35-1058/1131 12 9/9/2025 42046408 VOID AFTER 90 DAYS '*"`* 95,000.00 AUTHORIZED SIGNATURE II■4 204840811■ is i i 3 i i0 5861: II'0444407 Y4811■ 3 Hilcorp Alaska, LLC Taylor Wellman, MPU Wells Manager 3800 Centerpoint Dr, Suite 1400 Anchorage, Alaska 99503 06/04/2025 Commissioner Jessie Chmielowski and Commissioner Greg Wilson ůĂƐŬĂKŝůĂŶĚ'ĂƐŽŶƐĞƌǀĂƟŽŶCommission 333 West 7th Avenue Anchorage, Alaska 99501 Subject: Docket Number: OTH-25-032- Milne Point Unit – Well K-33 Dear Commissioners Chmielowski and Commissioner Wilson, With respect to OTH-25-ϬϯϮƌĞŐĂƌĚŝŶŐŽƉĞƌĂƟŽŶƐŽŶDŝůŶĞWŽŝŶƚhŶŝƚtĞůů<-33 (PTD 196-202) Hilcorp does not intend to contest the docket. ĐƟŽŶƐƚŽƉƌĞǀĞŶƚƌĞĐƵƌƌĞŶĐĞ͗ x ,ŝůĐŽƌƉĨĂŝůĞĚƚŽŶŽƟĨǇĂŶĚŽďƚĂŝŶĂƉƉƌŽǀĂůĨƌŽŵK'ƉƌŝŽƌƚŽŵĂŬŝŶŐƚŚŝƐƐƵďƐƚĂŶƟǀĞĐŚĂŶŐĞƚŽƚŚĞ ĂƉƉƌŽǀĞĚĐŽŵƉůĞƟŽŶƉƌŽŐƌĂŵĂƐƌĞƋƵŝƌĞĚďǇϮϬϮϱ͘ϱϬϳ ,ŝůĐŽƌƉŚĂƐŝĚĞŶƟĮĞĚĂŐĂƉŝŶƚŚĞƚƌĂŝŶŝŶŐƌĞƋƵŝƌĞŵĞŶƚƐĨŽƌKƉĞƌĂƟŽŶƐŶŐŝŶĞĞƌƐ;K͛ƐͿ͘,ŝůĐŽƌƉƐƚĂīK͛Ɛ have training assigned and tracked. OE’s who are working in a contractor status have not had full access to these training modules to date. This gap has been ƌĞĐƟĮĞĚ͕ and these training modules have been assigned to the contracted OE’s and to be completed with records retained. The content of one of the training modules ŝŶĐůƵĚĞƐĂƐĞĐƟŽŶƚŚĂƚǁŽƵůĚŚĂǀĞĐŽǀĞƌĞĚƚŚŝƐŝŶĨƌĂĐƟŽŶĂŶĚƐŚŽƵůĚŚĂǀĞƉƌĞvented this ŝŶĨƌĂĐƟŽŶ. x Also, prior to running the ESP on the 2-7/8” tubing, Hilcorp performed a blowout preventer test (BOPE) of the variable bore rams against a 2-7/8” test joint to the approved sundry required pressure 250/2000 psi with passing results.,ŝůĐŽƌƉ͕ŚŽǁĞǀĞƌ͕ĨĂŝůĞĚƚŽŶŽƟĨǇK'ŽĨƚŚĞƉƌĞƐƐƵƌĞƚĞƐƚĂƐƌĞƋƵŝƌĞĚďǇϮϬ 25.285(f)(7) Hilcorp has engaged and re-ĞŶĨŽƌĐĞĚƚŚĞŶŽƟĮĐĂƟŽŶƌĞƋƵŝƌĞŵĞŶƚƐĂƐƉĞƌϮϬϮϱ͘Ϯϴϱ;ĨͿ;ϳͿƚŽƚŚĞƌŝŐ ƐƵƉĞƌǀŝƐŽƌƐ͘dŚĞůĂĐŬŽĨŶŽƟĮĐĂƟŽŶǁĂƐĂŶŽǀĞƌƐŝŐŚƚĚƵĞƚŽĂƉĞŶĚŝŶŐƉĂƵƐĞŝŶŽƉĞƌĂƟŽŶƐĨŽƌƚŚĞ^Z-1 ƌŝŐ͘īŽƌƚƐƚŽŵĂŝŶƚĂŝŶŽƉĞƌĂƟŽŶĂůĨŽĐƵƐŚĂǀĞďĞĞŶ on the forefront of discussions and have been quite ƐƵĐĐĞƐƐĨƵůŽƵƚƐŝĚĞŽĨƚŚŝƐŝŶĨƌĂĐƟŽŶ͘ Should you have any further ƋƵĞƐƟŽŶƐ, please contact me at (907) 777-8449. By Samantha Coldiron at 9:30 am, Jun 06, 2025 Sincerely Taylor Wellman MPU Wells Manager Digitally signed by Taylor Wellman (2143) DN: cn=Taylor Wellman (2143) Date: 2025.06.05 15:08:32 - 08'00' Taylor Wellman (2143) 2 CAUTION: This email originated from outside the State of Alaska mail system. Do not click links or open attachments unless you recognize the sender and know the content is safe. From:Rixse, Melvin G (OGC) To:Coldiron, Samantha J (OGC) Subject:FW: OTH-25-032 MPU K-33 Under Sundry 325-090 Date:Monday, June 2, 2025 10:04:37 AM From: Taylor Wellman <twellman@hilcorp.com> Sent: Friday, May 30, 2025 1:18 PM To: Rixse, Melvin G (OGC) <melvin.rixse@alaska.gov> Subject: OTH-25-032 MPU K-33 Under Sundry 325-090 Mel, With respect to OTH-25-032 MPU K-33, is there a time that would work for you and possibly Jim to meet to briefly discuss prior to me providing written notice and response to follow up as outlined? If I need to request via a formal letter I can do that as well but trying to keep the formal letters to a minimum. Thank you, Taylor Taylor Wellman Hilcorp Alaska, LLC: Wells Manager – Milne Point Office: (907) 777-8449 Cell: (907) 947-9533 Email: twellman@hilcorp.com The information contained in this email message is confidential and may be legally privileged and is intended only for the use of theindividual or entity named above. If you are not an intended recipient or if you have received this message in error, you are herebynotified that any dissemination, distribution, or copy of this email is strictly prohibited. If you have received this email in error, pleaseimmediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete this message. While all reasonable care has been taken to avoid the transmission of viruses, it is the responsibility of the recipient to ensure that theonward transmission, opening, or use of this message and any attachments will not adversely affect its systems or data. No responsibilityis accepted by the company in this regard and the recipient should carry out such virus and other checks as it considers appropriate. 1 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 29, 2025 CERTIFIED MAIL – RETURN RECEIPT REQUESTED 7018 0680 0002 2052 9877 Mr. Dan Marlow Hilcorp Alaska, LLC P.O. Box 244027 Anchorage, AK 99524-4027 Re: Docket Number: OTH-25-032 Notice of Proposed Enforcement: Milne Point Unit - Well K-33 Dear Mr. Marlow: Pursuant to 20 AAC 25.535, 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)) 1. Hilcorp failed to comply to 20 AAC 25.507(a)Change of an approved program, by not following the well work program authorized by AOGCC with permitted Sundry 325-090. 2. Hilcorp failed to follow regulation 20 AAC 25.285(f)(7). Secondary well control for tubing workover operations. Bases for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)). On May 3, 2025, Hilcorp was preparing to install an electrical submersible pump (ESP) in well Milne Point Unit (MPU) K-33 under approved Sundry 325-090, utilizing contracted workover rig ASR 1. The approved sundry stated that Hilcorp was to install the ESP below 4-1/2” 12.6 # 13 CR-85 VAM production tubing. On May 3, 2025, before running the planned 4-½” ESP completion on the following morning, Hilcorp determined that the tubing hanger would not be successfully landing in the wellhead utilizing the 4-1/2” tubing. This was because the wellhead penetrator clearance was restricted by the outside diameter of the 4-1/2” tubing. Hilcorp made a unilateral decision to install the ESP on 2-7/8”, 6.5#, L80 tubing without notice or approval from AOGCC. Hilcorp failed to notify and obtain approval from AOGCC prior to making this substantive change to the approved completion program as required by 20 AAC 25.507. Docket Number: OTH-25-032 March 29, 2025 Page 2 of 3 Also, prior to running the ESP on the 2-7/8” tubing, Hilcorp performed a blowout preventer test (BOPE) of the variable bore rams against a 2-7/8” test joint to the approved sundry required pressure of 250/2000 psi with passing results. Hilcorp, however, failed to notify AOGCC of the pressure test as required by 20 AAC 25.285(f)(7) which requires: “at least 24 hours notice of each BOPE function pressure test must be provided so that a representative of the commission can witness the test.” Proposed Action (20 AAC 25.535(b)(3)). For these violations, the AOGCC intends to impose a civil penalty on Hilcorp under AS 31.05.150 in the amount of $95,0001. In addition, within fourteen days of receipt of this letter (next business day if the due date falls on a weekend), Hilcorp is requested to provide AOGCC with a written response describing the steps that will be taken to assure no reoccurrence of these compliance failures. The information request is made pursuant to 20 AAC 25.300. Failure to comply with this request will be an additional violation. Rights and Liabilities (20 AAC 25.535(b)(4)) Within 15 days after receipt of this notification – unless the AOGCC, in its discretion, grants an extension for good cause shown – Hilcorp may file with the AOGCC a written response that concurs in whole or in part with the proposed action described herein, requests informal review, or requests a hearing under 20 AAC 25.540. If a timely response is not filed, the proposed action will be deemed accepted by default. If informal review is requested, the AOGCC will provide Hilcorp an opportunity to submit documentary material and make a written or oral statement. If Hilcorp disagrees with the AOGCC’s proposed decision or order after that review, it may file a written request for a hearing within 10 days after the proposed decision or order is issued. If such a request is not filed within that 10-day period, the proposed decision or order will become final on the 11th day after it was issued. If such a request is timely filed, the AOGCC will hold its decision in abeyance and schedule a hearing. If Hilcorp does not concur in the proposed action described herein, and the AOGCC finds that Hilcorp violated a provision of AS 31.05, 20 AAC 25, or an AOGCC order, permit or other approval, then the AOGCC may take any action authorized by the applicable law including ordering one or more of the following: (i) corrective action; (ii) suspension or revocation of a permit or other approval; and (iii) imposition of penalties under AS 31.05.150. In taking action after an informal review or hearing, the AOGCC is not limited to ordering the proposed action described herein, as long as Hilcorp received reasonable notice and opportunity to be heard with 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. 1 AS 31.05.150(g) requires AOGCC to consider nine criteria in setting the amount of a civil penalty. Docket Number: OTH-25-032 March 29, 2025 Page 3 of 3 Questions regarding this letter should be directed to Mel Rixse at 907-793-1231. Sincerely, Jessie Chmielowski Gregory C. Wilson Commissioner Commissioner cc: Phoebe Brooks Jim Regg Mel Rixse Gregory C. Wilson Digitally signed by Gregory C. Wilson Date: 2025.05.29 14:38:51 -08'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2025.05.29 15:13:07 -08'00'