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Home My WebLink AboutAIO 031 e e Image Project Order File Cover Page XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. A:tO 03 J Order File Identifier Organizing (done) o Two-sided 1111111111111111111 o Rescan Needed 1111111111111111111 REJCAN ¢'Color Items: D Greyscale Items: DIGITAL DATA OVERSIZED (Scannable) D Maps: D Other Items Scannable by a Large Scanner D Diskettes, No. D Other, No/Type: D Poor Quality Originals: OVERSIZED (Non-Scannable) o Other: D Logs of various kinds: NOTES: BY: ~ Date qf /J JDC, o Other:: 151 VV1P Project Proofing 1111111111111111111 BY: ~ Date: cr I II Joro 151 V11P Scanning Preparation BY: l:Maria ) x 30 = + = TOTAL PAGES ~ '67 (Count does not include cover sheet) 11\/1 /) Isl r q I 1111111111111111111 Date:1 J 1/ J 0 &:, Production Scanning Stage 1 Page Count from Scanned File: ~.8- (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: V YES -~ Date:C¡!II/O(, If NO in stage 1, page(s) discrepancies were found: YES NO BY: Isl lI\;t P NO Stage 1 BY: Maria Date: Isl 1111111111111111111 Scanning is complete at this point unless rescanning is required. ReScanned 11111111111111" 11/ BY: Maria Date: Isl Comments about this file: Quality Checked III 111111111111111I 10/6/2005 Orders File Cover Page.doc • • INDEX Area Injection Order NO. 31 Raven Oil Pool, Prudhoe Bay Field 1. February 10, 2006 Application for Pool Rules and Area Injection Order with attachments exhibits I -1 through 1 -18 and II -1 through I1 -17 and ( 2 Confidential CD's) (Confidential Exhibits I -2, I -5 — I -10, I -12, II -3 — II -6) 2. February 13, 2006 Advertising Order 3. February 14, 2006 Kristen Nelson Petroleum News Information Request 4. March 06, 2006 Givens Law Firm letter request for hearing for A. Oenga 5. March 09, 2006 ICAS objection letter for Raven Project 6. March 15, 2006 AOGCC response to ICAS for hearing request 7. March 20, 2006 e -mail re: proposed type log from BPXA to J. Williamson 8. March 20, 2006 e -mail from J. Williamson re: Raven app. to BPXA 9. March 20, 2006 BPXA letter requesting extension for Tract Operations 10. March 24, 2006 e -mail from G. Gustafson, BPXA re: Raven app. 11. March 29, 2006 Objection from Heirs of Oenga 12. March 30, 2006 BPXA letter requesting approval of AIO and Pool Rules 13. March 30, 2006 Hearing Attendees 14. March 30, 2006 Public Hearing Transcript 15. April 05, 2006 Fax letter from the Commission re: additional response time 16. April 12, 2006 Givens reply to BPXA response of 3/30/06 17. April 18, 2006 Givens Law Firm Notice to Halt Trespass to Operators 18. April 18, 2006 Givens Law Firm correction letter 19. April 19, 2006 Letter to BPXA to file a response to the Heirs response 20. April 28, 2006 BPXA supplemental response to supplemental comments submitted by the heirs of Andrew Oenga 21. May 26, 2006 E -mail from AOGCC to BP regarding status of NK -43 22. June 05, 2006 E -mail from BP to AOGCC reporting status of NK -43 and NK -38A 23. June 20, 2006 E -mail from AOGCC re: Withdrawal of NK -65AIO 24. July 21, 2006 BPXA letter re: affidavit in support of application for Pool Rules and Area Injection Order for Raven Oil Pool 25. August, 2006 BP submittal of Proposed Raven Participating Area 26. January 4, 2011 Article "BP Closes Site Over Loss in Slope Rent Dispute" 27. April 30, 2012 BPXA request for standardization of authorized fluids for FOR and pressure maintenance Area Injection Order NO. 31 . . MEMORANDUM STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION TO: File DATE: March 14, 2006 FROM: Ceresa L. Tolley SUBJECT: Inupiat Community of the Arctic Slope letter dated March 9,2006 I called to speak with Dorothy Edwardsen regarding the letter stated above. Abby Adams answered Ms. Edwardsen's line and I was told that Ms. Edwardsen was out until Friday March 17,2006. I told Ms. Adams what I was calling in reference to and she stated that she was unaware of anything to do with the letter from Ms. Edwardsen and suggested that I leave a voice mail for Ms. Edwardsen. I left a voice mail for Ms. Edwardsen to please return my call as I had some questions for her regarding her letter. · . _--I .. INUPIAT COMMUNllY of the ARCTIC SLOPE an IRA Regional Tribal Government ..J ø \1'\ '- -J/~~r~ PO. Box 934 ø Barrow, Alaska 99723 Ph: (907) 852-4227 1-888-788-4227 Fax: (907) 852-4246 ~ March 9, 2006 u v. 0 GF,) \) Alaska Oil and Gas Conservation Commission 333 West 7ili Avenue, Suite 100 Anchorage, Alaska 99501 RE: PROPOSED RAVEN OIL POOL, PRUDHOE BAY FIELD Dear Members of the Commission: The Inupiat Community of the Arctic Slope (ICAS) is a Federally Recognized Regional Tribal Government listed in the Federal Register pursuant to the Federally Recognized Indian Tribe List Act of 1994,25 D.S.C. 479a, under the Indian Reorganization Act of 1934, as amended. The Inupiat Community of the Arctic Slope Realty Department also has a trust responsibility to our land holders of Restricted Property as defined in Federal law. The property where the Niakuk Heald Point Pad sits on is owned by one of our clients and this lease is being negotiated at this time by our clients and their attorney, Mr. Ray Givens of Givens Law Firm. The ICAS Realty Department is in objection of the proposed Raven project until BP settles any issues it has with our client. We believe it would be a premature decision by the Commission if it approves this project before BP settles any issues with the landowner. --8 1nczn....l." ---- . -". \"f.1.'-'ry-..,... ,.--- . /:--~, .'" ,I t:Y/ . ;}:~/,:,; ... Ðoro~----~----- Realty Officer Cc: Price Leavitt, Executive Director Ray Givens, Givens Law Firm files ! () P- !)1'. ::/)óry I,~, Ù)LLlJ') ~{;ì fr /'/ Weeks 9-13 Mon. 9:00 am ® Director's Meeting. 10:00am® Admin Meeting. " IOGeC: Washington DC. 9:00 am ® Director's Meeting. 10:00 am ® Admin Meeting. 10:30 am ® Staff Meeting. 1:30 pm ® Staff Discussion (Raven). 9:00 am ® Director's Meeting. 10:00 am ® Admin Meeting. " A/L:Jane. " AIL: Colombie. A Sewards Day. Oracle . Tue. 10:00 am ® SACC Report Preparation. " IOGCC: Washington DC. 10:00 am ® SACC Report Preparation. 10:00 am ® SACC Report Preparation. " AILJane. " AIL: Colombie. 9:30 am ® Senior Staff Meeting. 10:00 am ® SACC Report Preparation. Wed. 1 8:00 am ® Export Council Meeting. 2:00 pm ® PBV Flowlines. " AIL: Wheeler. " IOGeC DC: Norman! Seamount. 10:00 am ® Travel Meeting (John Spaulding). " AIL: Colombie. " AILJane. " AIL: Colombie. . Thu. 2 " IOGCC DC: Norman! Seamount. " Retirement Seminar: Norman 1-3pm Atwood #530. " Class: Johnson 12:30-4: 00. 16 " AIL: Colombie. 23 " AILJane. " Retirement Seminar: Norman 1-3pm Atwood #240. '!It AIL: Colombie. 30 9:00 am ® Public Meeting. 9:00 am ® Public Hearing Raven Oil Pool (BP). Printed for Jody Colombie (Feb. 22, 2006 @ 1 :34 pm) March 2006 Days 60-90 Fri. 3 " Flex: Aubert. " Flex: Crandall. '!It Flex: Williamson. '!It AIL: Mciver - 8a - Noon. " IOGCC DC: Norman! Seamount. '!It Flex: Davies. '!It Flex: Johnson. " Flex: Fleckenstein. " Flex: Roby. " Smith: Training 8am-4: 30pm. " Flex: Okland. " Flex: Aubert. " Flex: Crandall. " Flex: Williamson. '!It AIL: Colombie. " AILJane. " Flex: Okland. '!It Flex: Davies. " Flex: Johnson. " Flex: Fleckenstein. " Flex: Roby. " AIL: Colombie. 31 " Flex: Aubert. " Flex: Williamson. " Flex: Crandall. page I . . STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Re: THE APPLICATION OF BP EXPLORATION (ALASKA) INC. for an order authorizing underground injection of fluids for enhanced oil recovery in the Raven Oil Pool of the Prudhoe Bay Field. ) Area Injection Order No. 31 ) ) Prudhoe Bay Field ) Prudhoe Bay Unit ) Raven Oil Pool ) August 9, 2006 IT APPEARING THAT: 1. By letter dated February 8, 2006, BP Exploration (Alaska), Inc. ("BPXA"), operator of the Prudhoe Bay Unit ("PBU"), requested an order from the Alaska Oil and Gas Conservation Commission ("Commission") to define the Raven Oil Pool ("ROP") within the PBU, and to prescribe rules for governing the development and operation of the pool. Concurrently, BPXA requested authorization for enhanced recovery operations in the proposed ROP 2. The Commission published notice of opportunity for public hearing in the Anchorage Daily News on February 14,2006. 3. Bye-mail correspondence dated February 13, 2006, the Commission requested additional information from BPXA in support ofBPXA's application. 4. By correspondence dated March 3, 2006, and received by the Commission on March 6, 2006, Raymond C. Givens, attorney for the heirs of Andrew Oenga ("Oenga heirs"), notified the Commission that the Oenga heirs, as the owners of US BIA Allotment No. F-14632 and lessor of the land underlying the production facilities at Heald Point, requested the tentatively scheduled hearing be held March 30, 2006. 5. By correspondence dated March 9, 2006, and received by the Commission on March 13, 2006 the Inupiat Community of the Arctic Slope ("ICAS"), a Federally Recognized Regional Tribal Government, objected to the Raven project until the lease dispute between BPXA and the Oenga heirs is settled. 6. By correspondence dated March 15,2006, the Commission advised the ICAS that the hearing regarding BPXA's application would be held on March 30 at 9:00 am. 7. On March 24, 2006, BPXA submitted through e-mail correspondence the additional technical information requested by the Commission and requested a modification of the pool rules area. Area Injection Order 31 August 9, 2006 . . Page 2 8. On March 29, 2006, Raymond C. Givens e-mailed a written statement from Tony Delia, an heir of Andrew Oenga. Tony Delia, on behalf of the Oenga heirs, objected to the establishment of pool rules and requested the Commission postpone adoption of the Raven Pool Rules until the lease dispute is resolved. 9. The Commission held a public hearing on March 30, 2006. The Commission held the record open until April 14, 2006. 10. By correspondence dated April 5, 2006 the Commission advised Raymond C. Givens that if the heirs of Andrew Qenga had additional information for the Commission to consider, it must be sent to the Commission by April 14, 2006. 11. By correspondence dated April 12, 2006 and received by the Commission on April 13,2006, Raymond C. Givens responded to BPXA's written comments submitted at the March 30, 2006 hearing. 12. On April 18, 2006 Raymond C. Givens provided the Commission copies of the "Notice to Halt Trespass" addressed to companies with interest in the West Niakuk P.A., Prudhoe Bay, Alaska. 13. By letter dated April 18, 2006 and received by the Commission on April 24, 2006, Raymond C. Givens corrected a typographical error in his April 22, 2006 reply comments. 14. By correspondence dated April 19, 2006 the Commission advised BPXA that the record for the March 30 hearing would be left open until the close of business on April 28, 2006 for BPXA to respond to the April 12, 2006 letter from Mr. Givens 15. On April 28, 2006 BPXA delivered correspondence dated April 28, 2006 to the Commission titled "Supplemental response of BP Exploration (Alaska) Inc. to supplemental comments submitted by attorney Raymond C. Givens (counsel for heirs of Andrew Onega) in his letter dated April 12, 2006". 16. By E-mail dated May 26, 2006 and June 5, 2006, the Commission requested additional information from BPXA. BPXA responded to the request June 5, 2006. 17. On July 24, 2006, the Commission received BP's affidavit showing that they provided a copy of the application for injection to operators and surface owners within a one- quarter mile radius of the proposed injection area. FINDINGS 1. Operator BPXA is the operator of the property for which injection is proposed. Area Injection Order 31 August 9, 2006 . . Page 3 2. Proposed Injection Area BPXA requested authorization to inject fluids for the purpose of enhanced recovery operations within the ROP in the following offshore area within the PBU Umiat Meridian Township/Range 12N-15E 12N-16E Sections S/2SW 14 Section 24 E/2, NW/4, E/2SW/4 Section 25 E/2NE/4 Section 26 N/2NE/4 Section 36 S/2NW/4, N/2SW/4, SW/4SW/4Section 29 All Section 30 NW/4NW/4 Section 31 3. Operators/Surface Owners Notification BPXA provided operators and surface owners within one quarter of a mile of the proposed offshore ROP injection area and within one quarter of a mile of ROP surface facilities, located in the adjacent to the South onshore at Heald Point, with a copy of the application for enhanced oil recovery injection. The only affected operator is BPXA, operator of the PBU. Surface owners are State of Alaska and Oenga heirs. 4. Geologic Information and Hydrocarbon V olumetrics [DS 1 ]The proposed ROP lies offshore in an area where permafrost thins rapidly from onshore to offshore, causing problems with processing and interpreting seismic data. The seismic data required sophisticated interpretation techniques in order to generate a valid correspondence between well and seismic data. Basically, the limits of the proposed ROP are defined by structural closure at the top of the Sag River Formation on a low relief, densely faulted, east- west trending horst covering less than 5 square miles in area. The faulting interior to the proposed ROP has been sufficient to influence the Gas-Oil contacts ("GOC") between fault blocks and areas but the oil-water contact ("OWC") appears to be common across the field. Four areas- the North and South Fault Blocks and the East and South Areas are defined. At the top of the Sag River, the North and South Fault Blocks are separated from the down-dip East Area by a faulted saddle and the down-dip South Area by a fault. The East and South areas appear to share a common hydrocarbon accumulation at Sag River level. Existing wells have not penetrated a Ivishak hydrocarbon accumulation in the East and South areas, but seismic mapping indicates the South and East areas may contain Ivishak Formation reserves. The North and South Fault Blocks are on the crest of the structure and account for the bulk of the proved reserves. Area Injection Order 31 August 9, 2006 . . Page 4 The Permo-Triassic proposed ROP reservoir is equivalent to the primary producing intervals, the Sag River and Ivishak Formations; and the intervening, low permeability Shublik Formation in the nearby Prudhoe Bay Field. The proposed ROP is defined by the correlative interval from 10,628 to 11,165 measured depth feet in the NK-05 well. Although the Shublik Formation is generally considered to be non- reservoir quality, it may include minor permeable zones that can be used for injection and/or production as development proceeds. The proposed ROP is positioned between two major shales; the Kavik Shale (below) and the Kingak Shale ( above). Core data and well logs were used to estimate rock properties of the Ivishak and Sag River Formation sandstones. Cores were used to validate the petrophysical interpretations for Ivishak Formation porosity and Sag River Formation porosity and Net/Gross. The Ivishak Formation Net/Gross was determined by using a shale cutoff while a cutoff of 5 mD permeability (Kh) was used to calculate net sand in the Sag River Formation. The following table summarizes the rock properties used to determine in-place hydrocarbon volumes. Ivishak Formation Sag Formation ROP Average Rock Property Summary POROSITY NET/GROSS 20 % 88 % Sw 40% River 20 % 55% 40% Fluid properties are estimated from surface fluid samples taken from the NK-38A and NK-43 wells combined with fluid property correlations. No reliable PVT data are available. Fluid properties used in the volumetric analysis are summarized below. IVISHAK (Average) ROP Average Fluid Property Summary IVISHAK IVISHAK (North Block) (Other Areas) SAG RIVER Boi Rsi Bgi 1.903 rb/stb 1515 scf/stb 0.64 rb/Mscf 1.960 rb/stb 1600 scf/stb 0.62 rb/Mscf 1.833 rb/stb 1412 scf/stb 0.66 rb/Mscf 1.960 rb/stb 1600 scf/stb 0.62 rb/Mscf Properties vary due to different pressures in various compartments as above. The black oil has a gravity of approximately 32 API and the condensate gravity is approximately 49 API. Estimates of in-place hydrocarbons reflect the current stratigraphic and structural interpretation, plus the rock and fluid properties discussed above. The estimated in- Area Injection Order 3 I August 9, 2006 . . Page 5 place oil volumes are summarized below. The condensate volume is based on an estimated yield of 65 bbl/MMscf as determined from NK-43 production data. Ivishak Sag River Total Raven In-Place Oil Volume Summary (MMbo) OIL CONDENSATE TOTAL 6.9 to 11.4 2.3 to 3.8 9.2 tol5.2 3.5 to 5.8 1.3 to 2.2 4.8 to 8.0 10.4 to 17.2 3.6t06.0 14.0 to 23.2 In-place gas volumes are summarized in the following table. The solution gas volumes are estimated from production data from the NK-38A well. Ivishak Sag River Total Raven In-Place Gas Volume Summary (bcf) FREE GAS SOLUTION GAS 35.4 to 59.0 10.4 to 17.3 20.4 to 33.9 5.3 to 8.8 55.8 to 92.9 15.7 to 26.1 TOTAL 45.8 to 76.3 25.7 to 42.7 71. 5 to 119.0 The ranges in OOIP and OGIP are due primarily to uncertainty in individual fault block oil-water contacts and gas-oil contacts where there is no well control, reservoir properties and fluid properties. 5. Well Logs The logs of existing Prudhoe Bay Unit injection wells are on file with the commISSIOn. 6. Proposed Enhanced Recovery Injection Interval Enhanced recovery injection is proposed for the ROP. The injection zone is correlative to the 10,628 to 11,165 measured depth feet interval in the NK-05 well and is comprised of the Sag River, Shublik and Ivishak Formations. 7. Previous Authorization for ROP Enhanced Recovery Pilot A four month-production test was conducted within the Ivishak Formation interval of the ROP within Well NK-38A in 2005. During this time GOR increased to nearly 4000 mscf/stb. The increasing GOR is interpreted to be due to gas coning from larger Upper Ivishak gas cap along faults cutting through the 2A2 shale. Reservoir pressure decreased by about 700 psi during the production period. To ensure oil recovery was not compromised, the well was then shut-in to await waterflood. Subsequently, the NK-65A well was drilled and completed as a water injector to support the NK-38A producer. The NK-65A well began water injection on October 7, 2005. Authorization for the NK-65A well to inject water for the purpose of enhanced oil recovery from the ROP was granted through an administratively approved modification to Area Injection Order 14A (14A.00l) dated September 14,2005. Area Injection Order 31 August 9,2006 . . Page 6 Cumulative production ofNK-38A through February 2006 was 368 MSTB, 480 BW, and 1419 MMSCFD. Production rates currently are 1300 STBD at a GOR of about 5300 SCF/STB. Cumulative injection in NK-65A is 1,593 MBBL. Average rate of water injection is roughly 13 MBD. 8. Description of Operation Only the North Fault Block is expected to have significant recovery from the Ivishak Formation with the two existing wells. Currently, there is a significant portion of the existing NK-38A wellbore in the South Fault Block that is not perforated. The current reservoir model predicts greater recovery efficiency if the two fault blocks are developed independently. Therefore, the current plan is to add South fault Block perforations once the North Fault Block has been depleted. The reservoir simulation model also suggests the potential for up to three sidetrack locations; one in the North Fault Block and two in the South Fault Block. Future development options will ultimately be determined by field performance and economic factors. The operator plans to produce the Ivishak Formation from the NK-38A horizontal well in the North Fault Block and an average voidage replacement ratio of 1.0 will be maintained with water injection at NK-65A. The existing reservoir model will be history matched as production progresses and the model will be used to optimize production and injection rates. The model will also be used to evaluate additional drilling options and well placement. The model was built before the NK-38A and NK-65A wells were drilled and will be updated to better reflect the new well data. The ROP Sag River Formation reservoir and well performance are less understood and the resource is small. Information from a planned NK-43 long-term test will be helpful in understanding the Sag River Formation development potential. Further development will be dependent upon field performance and economic factors. Surveillance data will be collected on an ongoing basis to facilitate reservoir management and field development. These activities will include static bottom-hole pressure surveys, production logging, injection logging and production well testing. In parallel with the Ivishak Formation development, the Sag River Formation production performance will be evaluated by re-opening the Sag River Formation in NK-43. The next development decisions will be based on the production information gained from the performance of these three wells (NK-38A, NK-65A, NK-43) in consideration of the many options described in the previous section. Water injection is a key part of the Raven Reservoir management strategy. The initial injection will be in the NK-65A well located on the PBU DS NK Pad, which was built for Niakuk Oil Pool development. Water will be routed to the DS NK Pad manifold and then routed to the injection well where a flow meter will measure total fluid injected. Currently, the only water used for injection at the Niakuk drill site is taken from the Beaufort Sea and processed at the Sea Water Treatment Plant ("STP"). It is possible Area Injection Order 31 August 9, 2006 . . Page 7 that produced water could be injected at some time in the future. Produced water is water that is produced with Lisburne, Pt. McIntyre, West Beach, North Prudhoe Bay State and Niakuk oil, and is separated from the oil and gas at the Lisburne Production Center ("LPC"). Produced water may contain trace amounts of scale inhibitor, corrosion inhibitor, emulsion breakers, and other products used in the production process. BPXA requests authorization to injection seawater from the STP, produced water from the LPC and fluids injected for purposes of stimulation. Currently there is no gas injection line to the Niakuk pads. The possibility of implementing EOR in the Raven reservoir will be evaluated in the future. 9. Freshwater Aquifer Exemption The Commission found in the Niakuk Oil Pool ("NOP") that produced water from the NOP contained 25,000 parts per million ("ppm") total dissolved solids ("TDS"). Through calculations of TDS from wireline data logs the Commission also found NaCI equivalents of greater that 10,000-ppm in the formations above the Kuparuk Formation (AIO 14A). The ROP directly underlies and is largely coincident with the NOP. The absence of freshwater determination made in AIO 14A is valid also for the ROP.. 10. Mechanical Condition of Adjacent Wells NK-43, a gas lifted producer, exhibits sustained inner annulus pressure as a result of a tubing leak, and is currently shut in awaiting installation of a tubing patch. NK-38A is currently naturally flowing and is waivered by the operator for inner annulus by outer annulus pressure communication. 11. Injection Rates and Pressures, Fracture Information The maximum injection rate of 15,000 bwpd will be the initial target rate. This is being done in order to make up voidage from production prior to the initiation of water injection. The injection rate is expected to decline to approximately 6,000 bwpd and the maximum injection pressure will be 2,500 psi. The NK-65A wellhead injection pressure will be determined by the Niakuk Oil Pool requirements, but the average wellhead injection pressure is expected to be about 1,500 psi. Surface injection pressures of 1500 psi would yield less than the average expected Ivishak Formation parting pressure of .66 psi/ft. 12. Mechanical Integritv and Well Design of Injection wells The NK-65A casing program was permitted and the well completed in accordance with 20 AAC 25.030. NK-65A well bore geometry and relative well target position necessitated issuance of a packer depth variance pursuant to 20 AAC 25.412 (b). NK-65A well bore integrity is ensured by use of premium (Hydril 521) liner connections, placement of high compressive strength cement over the entire liner length, and placement of an XN nipple profile in the liner just above perforation depth. Area Injection Order 31 August 9, 2006 . . Page 8 13. Type of Fluid / Source Fluids requested for injection are: a. Seawater from the STP b. Produced water from the LPC (possible in the future) c. Fluids injected for purposes of stimulation (possible in the future) 14. Water Composition and Compatibility with Formation Water compatibility problems are not expected because of the successful history of both sea water and produced water injection into the Prudhoe Bay Reservoir. No clay swelling problems have been seen in the Ivishak Formation in the Ivishak Participating Area of the PBU (IP A) with either source water injection or produced water injection. When present, scaling in the Ivishak Formation in the IPA has been limited to calcium carbonate deposition, which has been eliminated with acid treatments and controlled with the use of inhibitors. Minimal problems with formation plugging or clay swelling due to fluid incompatibilities are anticipated. 15. Hydrocarbon Recovery Ivishak reservoir modeling indicates an incremental recovery from water-flooding to be approximately 10 - 20% of the original oil in place, relative to primary depletion. Water is the principal fluid that will be injected into the Raven Pool. Conclusions 1. The application requirements of20 AAC 25.402 have been met. 2. Water injection will significantly improve recovery. 3. There are no known sources of fresh water in the area proposed for the development of the ROP. 4. The proposed injection operations will be conducted in permeable strata, which can reasonably be expected to accept injected fluids at pressures less than the fracture pressure of the confining strata. 5. Injected fluids will be confined within the appropriate receiving intervals by impermeable lithology, cement isolation of the well bore and appropriate operating conditions. 6. Reservoir and well surveillance, coupled with regularly scheduled mechanical integrity tests will demonstrate appropriate performance of the enhanced oil recovery project or disclose possible abnormalities. Area Injection Order 31 August 9, 2006 . . Page 9 NOW, THEREFORE, IT IS ORDERED that: The underground injection of fluids for pressure maintenance and enhanced oil recovery is authorized in the ROP within the affected area, subject to the following rules and the statewide requirements under 20 AAC 25 (to the extent not superseded by these rules). Affected Area: Umiat Meridian Township/Range 12N-15E 12N-16E Sections S/2SW/4 Section 24 E/2, NW/4, E/2SW/4 Section 25 EI2NE/4 Section 26 N/2NE/4 Section 36 SI2NW/4, N/2SW/4, SW/4SW/4 Section 29 All Section 30 NW/4NW/4 Section 31 Rule 1 Authorized Injection Strata for Enhanced Recovery Authorized fluids may be injected for purposes of pressure maintenance and enhanced recovery within the ROP into strata that are common to, and correlate with, the interval between the measured depths 10,628 feet and 11,165 feet within Well NK-05. Rule 2: Fluid Injection Wells The underground injection of fluids must be through a well that has been permitted for drilling as a service well for injection in conformance with 20 AAC 25.005, or through a well approved for conversion to a service well for injection in conformance with 20 AAC 25.280 and 20 AAC 25.412 (e). Rule 3: Authorized Fluids for Enhanced Recovery Fluids authorized for injection include: a. Produced water from Raven or PBU production facilities for the purposes of pressure maintenance and enhanced recovery; b. Tracer survey fluid to monitor reservoir performance; c. Fluids injected for purposes of stimulation per 20 AAC 25.280(a)(2); d. Source water from the Seawater Treatment Plant; e. Non-hazardous water collected from well house cellars and standing ponds. Rule 4: Authorized Injection Pressure for Enhanced Recovery a. Normal i~ection pressures must be maintained below the parting pressure of the Sag River and Ivishak Sandstones of the ROP. b. Injection pressures must be maintained so that injected fluids do not fracture the confining zone or migrate out of the approved injection stratum. Area Injection Order 31 August 9, 2006 . . Page 10 c. 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. Injection may not be restarted unless approved by the Commission. Rule 5: Monitoring Tubing-Casing Annulus Pressure The tubing and casing annuli pressures of each injection well must be monitored at least daily, except if prevented by extreme weather condition, emergency situations, or similar unavoidable circumstances. Monitoring results shall be documented and made available for Commission inspection. Rule 6: Demonstration of Tubing/Casing Annulus Mechanical Integrity The mechanical integrity of an injection well must be demonstrated before injection begins, and before returning a well to service following a workover affecting mechanical integrity. A Commission-witnessed mechanical integrity test must be perfonned 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 perfonned at least once every four years thereafter (except at least once every two years in the case of a slurry injection well). The Commission must be notified at least 24 hours in advance to enable a representative to witness mechanical integrity tests. Unless an alternate means is approved by the Commission, mechanical integrity must be demonstrated by a tubing/casing annulus pressure test using a surface pressure of 1500 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 mechanical integrity tests must be readily available for Commission inspection. Rule 7: Multiple Completion of Water Injection Wells a. Water injectors may be completed to allow for injection in multiple pools within the same wellbore so long as mechanical isolation between pools is demonstrated and approved by the Commission. b. Prior to initiation of commingled injection, the Commission must approve methods for allocation of injection to the separate pools. c. Results of logs or surveys used for detennining the allocation of water injection between pools, if applicable, must be supplied in the annual reservoir surveillance report. d. An approved injection order is required prior to commencement of injection in each pool. Rule 8: Well Integrity Failure and Confinement Whenever any pressure communication, leakage or lack of injection zone isolation is indicated by injection rate, operating pressure observation, test, survey, log, or other evidence, the Operator shall notify the Commission by the next business day 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 Commission. A monthly report of daily tubing and casing annuli pressures and injection rates must be provided to the Commission for all injection wells indicating well integrity failure or lack of injection zone isolation. Area Injection Order 31 August 9, 2006 . . Page 11 Rule 9: Notification of Improper Class II Injection 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 Commission, provide details of the operation, and propose actions to prevent recurrence. Additionally, notification requirements of any other State or Federal agency remain the operator's responsibility. Rule 10: Plugging and Abandonment of Fluid Injection Wells An injection well located within the affected area must not be plugged or abandoned unless approved by the Commission in accordance with 20 AAC 25. Rule 11: Other conditions It is a condition of this authorization that the operator complies with all applicable Commission regulations. The Commission may suspend, revoke, or modify this authorization if injected fluids fail to be confined within the designated injection strata. Rule 12: Administrative Actions Unless notice and public hearing are otherwise required, the Commission may administratively waive or amend any rule stated above 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 fluid movement outside of the authorized injection zone. DONE at Anchorage, Alaska and dated August 9, 2006. Daniel T. Seamount, Commissioner Alaska Oil and Gas Conservation Commission c~t ommissioner Alaska Oil and Gas Conservation Commission AS 31.05.080 provides that within 20 days after receipt of written notice of the entry of an order, a person affected by it may file with the Commission an application for rehearing. A request for rehearing must be received by 4;30 PM on the 23rd day following the date of the order, or next working day if a holiday or weekend, to be timely filed. The Commission shall grant or refuse the application in whole or in part within 10 days. The Commission can refuse an application by not acting on it within the 10-day period. An affected person has 30 days tram the date the Commission refuses the application or mails (or otherwise distributes) an order upon rehearing, both being the final order of the Commission, to appeal the decision to Superior Court. Where a request for rehearing is denied by nonaction of the Commission, the 30-day period for appeal to Superior Court runs tram the date on which the request is deemed denied (i.e., lOth day after the application for rehearing was filed). CO 570 and AlO 31 Raven Oil Pool . . 20f2 8/9/2006 11 :38 AM CO 570 and Ala 31 Raven Oil Pool . . s>, Paul becker <paul_decker 20f2 8/9/2006 11 :38 AM . Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, 10 83702 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 Soldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 North Slope Borough PO Box 69 Barrow, AK 99723 David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Kay Munger Munger Oil Information Service, Inc PO Box 45738 Los Angeles, CA 90045-0738 Schlumberger Drilling and Measurements 2525 Gambell Street #400 Anchorage, AK 99503 Ivan Gillian 9649 Musket Bell Cr.#5 Anchorage, AK 99507 Jack Hakkila PO Box 190083 Anchorage, AK 99519 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Cliff Burglin PO Box 70131 Fairbanks, AK 99707 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 . Mona Dickens Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Darwin Waldsmith PO Box 39309 Ninilchick, AK 99639 Penny Vadla 399 West Rìverview Avenue Soldotna, AK 99669-7714 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 • • 7 D C' r0 \ SEAN PARNELL, GOVERNOR ALASKA OIL AND GAS 333 W. 7th AVENUE, SUITE 100 CONSERVATION COMMIISSION ANCHORAGE, ALASKA 99501 -3539 PHONE (907) 279 -1433 ADMINISTRATIVE APPR VAL FAx (907) 276 -7542 AREA INJECTION ORDER NO. 31.001 Ms. Allison Cooke UIC Compliance Advisor BP Exploration (Alaska) Inc. P.O. Box 196612 Anchorage, AK 99519 -6612 RE: Authorized Fluids for EOR and Pressure Maintenance for the Raven Oil Pool Dear Ms. Cooke: By letter dated April 30, 2012, BP Exploration (Alaska) Inc. (BPXA) requested that the Alaska Oil and Gas Conservation Commission (AOGCC) administratively amend the following Area Injection Orders (AIO): 3A, 4E, 14A, 20, 22E, 24B, 25A, 26B and 31. BPXA requested the amendments in an effort to standardize the fluids authorized for injection for enhanced recovery and pressure maintenance for the oil pools in the Prudhoe Bay Field. BPXA requested the standardization due to the complexity of managing injection operations for multiple pools, with different lists of authorized fluids, which are served by common production facilities. In accordance with terms set forth below, BPXA's request is partially APPROVED, with a minor change to the wording proposed by BPXA. BPXA's request to inject produced gas and enriched hydrocarbon gas is hereby DENIED. BPXA proposes that AIO No. 31 be modified to approve the following for EOR and pressure maintenance injection. - Produced water and gas; - Enriched hydrocarbon gas; - Non - hazardous water and water based fluids — (includes seawater, source water, freshwater, domestic wastewater, equipment washwater, sump fluids, hydrotest fluids, firewater, and water with trace chemicals, and other water based fluids with a pH greater than or equal to 2 or less than or equal to 12.5 and flashpoint greater than 10 degrees F); - Fluids introduced to production facilities for the purpose of oil production, plant operations, plant/piping integrity or well maintenance that become entrained in the produced water stream after oil, gas, and water separation in the facility. Includes but not limited to: o Freeze protection fluids; o Fluids in mixtures of oil sent for hydrocarbon recycle; o Corrosion/scale inhibitor fluids; AIO 31.001 • • September 4, 2012 Page 2 of 3 o Anti - foams /emulsion breakers; o Glycols - Non - hazardous glycols and glycol mixtures; - Fluids that are used for their intended purpose within the oil production process. Includes: o Scavengers; o Biocides - Fluids to monitor or enhance reservoir performance. Includes: o Tracer survey fluids; o Well stimulation fluids; o Reservoir profile modification fluids. As shown above, the list of fluids for which BPXA seeks approval uses the terms "includes" and "includes but not limited to." Words such as "includes" and "including" along with phrases such as "includes but is not limited to" inappropriately delegate to BPXA the authority to determine what additional fluids are approved. Therefore, this approval modifies BPXA's proposal to delete the use of any such language as set forth below. In support of its application, BPXA submitted a fluid compatibility review based on previous orders and laboratory testing. This review showed that the proper handling and treating, including the use of scale inhibitors, of the injection fluids as well as the proper operation and maintenance, including the pumping of scale remover and acid treatments, of the injection wells will prevent or counteract incompatibility effects. Thus there are no operational risks associated with injection of the proposed fluids in this pool. It has not been demonstrated that the injection of produced gas or enriched hydrocarbon gas will enhance recovery from this pool. Therefore, BPXA's request to allow gas injection in this pool is denied. The change proposed by BPXA will result in increased production, is based on sound engineering and geotechnical reasons, does not promote waste or jeopardize correlative rights, and will not result in increased risk of fluid movement into freshwater. Correlative rights are protected because all lands subject to these orders have been unitized. Freshwater is protected by the proper design and completion of the wells, ongoing /periodic mechanical integrity evaluation required for all injection wells and review of the offset wells to ensure that they won't act as conduits to fluid movement. NOW THEREFORE IT IS ORDERED THAT: Rule 3 of AIO 31 is repealed and replaced by the following: Rule 3: Authorized Fluids for enhanced Recovery Fluids authorized for injection are: a) Produced water from Prudhoe Bay Unit processing facilities; AIO 31.001 September 4, 2012 Page 3 of 3 b) Non - hazardous water and water based fluids — (specifically seawater, source water, freshwater, domestic wastewater, equipment washwater, sump fluids, hydrotest fluids, firewater, and water with trace chemicals, and other water based fluids with a pH greater than or equal to 2 or less than or equal to 12.5 and flashpoint greater than 10 degrees F); c) Fluids introduced to production facilities for the purpose of oil production, plant operations, plant /piping integrity or well maintenance that become entrained in the produced water stream after oil, gas, and water separation in the facility. Specidically: i. Freeze protection fluids; ii. Fluids in mixtures of oil sent for hydrocarbon recycle; iii. Corrosion/scale inhibitor fluids; iv. Anti -foams /emulsion breakers; v. Glycols d) Non - hazardous glycols and glycol mixtures; e) Fluids that are used for their intended purpose within the oil production process. Specifically: i. Scavengers; ii. Biocides f) Fluids to monitor or enhance reservoir performance. Specifically: C,�, " i. Tracer survey fluids; F� *"` :44 ii. Well stimulation fluids; e>° ,Y ' iii. Reservoir profile modification fluids. 74. ,,• wr�P "' M1 O DONE at Anchorage, Alaska and dated September 4, 2012. � o f G "A •TION P aniel IrSeamount, Jr. J • ' .1 . rman Commissioner CM!' issioner 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. As provided in AS 31.05.080(6), "[t]he questions reviewed on appeal are limited to the questions presented to the AOGCC by the application for 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. • Fisher, Samantha J (DOA) From: Fisher, Samantha J (DOA) Sent: Thursday, September 06, 2012 1:55 PM To: 'Aaron Gluzman'; 'Aaron Sorrell'; 'Bruce Williams'; Bruno, Jeff J (DNR); 'CA Underwood'; 'Casey Sullivan'; 'Dale Hoffman'; 'David Lenig'; 'Donna Vukich'; 'Eric Lidji'; 'Erik Opstad'; Franger, James M (DNR); 'Gary Orr; 'Graham Smith'; 'Greg Mattson'; Heusser, Heather A (DNR); 'Jason Bergerson'; 'Jennifer Starck'; 'Jill McLeod'; 'Joe Longo'; King, Kathleen J (DNR); 'Lara Coates'; 'Lois Epstein'; 'Marc Kuck'; 'Marie Steele'; 'Mary Aschoff; 'Matt Gill'; 'Maurizio Grandi'; OilGas, Division (DNR sponsored); 'Patricia Bettis'; Perrin, Don J (DNR); 'Peter Contreras'; Pexton, Scott R (DNR); 'Richard Garrard'; 'Ryan Daniel'; 'Sandra Lemke'; 'Talib Syed'; 'Wayne Wooster; 'Wendy Wollf; 'William Hutto'; 'William Van Dyke'; '( michael .j.nelson @conocophillips.com)'; '(Von.L .Hutchins @conocophillips.com)'; 'AKDCWelllntegrityCoordinator; 'alaska @petrocalc.com'; 'Anna Raff; 'Barbara F Fullmer; h'; 'Becky Bohrer; 'Bill Penrose'; 'Bill Walker'; 'Bowen 'Bruce Webb'; 'Claire bbri tc y Roberts'; , I Ziff Posey'; 'Crandall Krissell'; 'D Lawrence'; 'dapa'; 'Daryl J. Kle Ca des , C y , p ry pp in'; 'Dave , ;, ' ;, '; ' ;, ,., 'David Stein reaber Harbour; 'Dave Matthews'; 'David Boelens , 'David House'; 'David Scott , aid g , 'ddonkei @cfl.rr.com'; 'Dennis Steffy'; 'Elowe, Kristin'; 'Erika Denman'; 'Francis S. Sommer; 'Gary Laughlin'; 'Gary Schultz (gary.schuitz @alaska.gov)'; 'ghammons'; 'Gordon Pospisil'; 'Gorney, David L.'; 'Greg Duggin'; 'Gregg Nady'; 'Gregory Geddes'; 'gspfoff; 'Jdarlington (jarlington @gmail.com)'; 'Jeanne McPherren'; 'Jeff Jones'; 'Jeffery B. Jones (jeff.jones @alaska.gov)'; 'Jerry McCutcheon'; 'Jill Womack'; 'Jim White'; 'Jim Winegarner; 'Joe Lastufka'; 'Joe Nicks'; 'John Easton'; 'John Garing'; 'John S. Haworth'; 'John Spain'; 'Jon Goltz'; Jones, Jeffrey L (GOV); 'Judy Stanek'; 'Julie Houle'; 'Julie Little'; 'Kari Moriarty'; 'Kaynell Zeman'; 'Keith Wiles'; 'Kelly Sperback'; 'Laura Siiliphant (laura.gregersen @alaska.gov)'; 'Luke Keller'; 'Marc Kovak'; 'Mark Dalton'; 'Mark Hanley (mark.hanley @anadarko.com)'; 'Mark P. Worcester; 'Marguerite kremer (meg.kremer @alaska.gov)'; 'Michael Jacobs'; 'Mike Bill'; 'Mike Mason'; 'Mike Morgan'; 'Mikel Schultz'; 'Mindy Lewis'; 'MJ Loveland'; 'mjnelson'; 'mkm7200'; 'nelson'; 'Nick W. Glover'; 'NSK Problem Well Supv'; 'Patty Alfaro'; 'Paul Decker (paui.decker @alaska.gov)'; 'Paul Figel'; 'Paul Mazzolini'; 'Randall Kanady'; 'Randy L. Skillern'; 'Rena Delbridge'; 'Renan Yanish'; 'Robert Brelsford'; 'Robert Campbell'; 'Ryan Tunseth'; 'Scott Cranswick'; 'Scott Griffith'; 'Shannon Donnelly'; 'Sharmaine Copeland'; Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); 'Sondra Stewman'; 'Stephanie Kiemmer; 'Steve Moothart (steve.moothart@alaska.gov)'; 'Steven R. Rossberg'; 'Suzanne Gibson'; 'Tamera Sheffield'; Taylor, Cammy 0 (DNR); 'Temple Davidson'; 'Teresa Imm'; 'Terrie Hubble'; 'Thor Cutler; 'Tim Mayers'; 'Tina Grovier; 'Todd Durkee'; 'Tony Hopfinger; 'trmjrl'; 'Vicki Irwin'; 'Walter Featherly'; Williamson, Mary J (DNR); 'Yereth Rosen'; Ballantine, Tab A (LAW); Bender, Makana K (DOA); 'Brooks, Phoebe L (DOA) (phoebe.brooks @alaska.gov)'; 'Colombie, Jody J ( DOA) (jody.colombie @alaska.gov)'; 'Crisp, John H (DOA) (john.crisp @alaska.gov)'; 'Davies, Stephen F (DOA) (steve.davies @alaska.gov)'; Ferguson, Victoria L (DOA); 'Foerster, Catherine P (DOA) (cathy.foerster @alaska.gov)'; 'Grimaldi, Louis R (DOA) (lou.grimaldi @aiaska.gov)'; 'Johnson, Elaine M (DOA) (elaine.johnson @alaska.gov)'; 'Laasch, Linda K (DOA) (Iinda.laasch @alaska.gov)'; 'McIver, Bren (DOA) (bren.mciver @alaska.gov)'; 'McMains, Stephen E (DOA) (steve.mcmains @alaska.gov)'; Mumm, Joseph (DOA sponsored); 'Noble, Robert C (DOA) (bob.noble @alaska.gov)'; 'Norman, John K (DOA) ( john .norman @alaska.gov)';'Okland, Howard D (DOA) (howard.okland @alaska.gov)'; 'Paladijczuk, Tracie L (DOA) ( tracie .paladijczuk @alaska.gov)'; 'Pasqua!, Maria (DOA) (maria.pasqual @alaska.gov)'; 'Regg, James B (DOA) (jim.regg @alaska.gov)'; 'Roby, David S (DOA) (dave.roby @alaska.gov)'; 'Scheve, Charles M (DOA) (chuck.scheve @alaska.gov)'; 'Schwartz, Guy L (DOA) (guy.schwartz @alaska.gov)'; 'Seamount, Dan T (DOA) (dan.seamount @alaska.gov)'; Wallace, Chris D (DOA) Subject: aio31 -001 Raven Oil Pool Attachments: aio31 -001. pdf 10 • 1 Mary Jones David McCaleb XTO Energy, Inc. IHS Energy Group George Vaught, Jr. Cartography GEPS P.O. Box 13557 810 Houston Street, Ste 200 5333 Westheimer, Suite 100 Denver, CO 80201 -3557 Ft. Worth, TX 76102 -6298 Houston, TX 77056 Jerry Hodgden Richard Neahring ry NRG Associates Mark Wedman Hodgden Oil Company Halliburton 408 18 Street President 6900 Arctic Blvd. Golden, CO 80401 -2433 P.O. Box 1655 Anchorage, AK 99502 Colorado Springs, CO 80901 Bernie Karl CIRI Baker Oil Tools K &K Recycling Inc. Land Department 795 E. 94 Ct. P.O. Box 58055 P.O. Box 93330 Anchorage, AK 99515-4295 Fairbanks, AK 99711 Anchorage, AK 99503 North Slope Borough Richard Wagner Gordon Severson Planning Department P.O. Box 60868 3201 Westmar Circle P.O. Box 69 Fairbanks, AK 99706 Anchorage, AK 99508 -4336 Barrow, AK 99723 Jack Hakkila Darwin Waldsmith James Gibbs P.O. Box 190083 P.O. Box 39309 P.O. Box 1597 Anchorage, AK 99519 Ninilchick, AK 99639 Soldotna, AK 99669 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669 -7714 C V OF ro d • • \ I //j4. THE STATE Alaska Oil and Gas of Conservation Commission ALASKA GOVERNOR SEAN PARNELL 333 West Seventh Avenue OF Anchorage, Alaska 99501 -3572 Main: 907.279.1433 Fax: 907.276.7542 ADMINISTRATIVE APPROVAL AREA INJECTION ORDER NO. 31.001 AMENDED Ms. Alison Cooke UIC Compliance Advisor BP Exploration (Alaska) Inc. P.O. Box 196612 Anchorage, AK 99519 -6612 RE: Authorized Fluids for EOR and Pressure Maintenance for the Raven Oil Pool Dear Ms. Cooke: The Alaska Oil and Gas Conservation Commission has amended the Administrative Approval to correct an error in the description of non- hazardous water based fluids. The correction occurs in two locations and is shown in underlined text below. By letter April 2 12 BP (BPXA) requested that the Alaska y dated Ap >< 30, 0 Exploration (Alaska) Inc. (BP ) q Oil and Gas Conservation Commission (AOGCC) administratively amend the following Area Injection Orders (AIO): 3A, 4E, 14A, 20, 22E, 24B, 25A, 26B and 31. BPXA requested the amendments in an effort to standardize the fluids authorized for injection for enhanced recovery and pressure maintenance for the oil pools in the Prudhoe Bay Field. BPXA requested the standardization due to the complexity of managing injection operations for multiple pools, with different lists of authorized fluids, which are served by common production facilities. In accordance with terms set forth below, BPXA's request is partially APPROVED, with a minor change to the wording proposed by BPXA. BPXA's request to inject produced gas and enriched hydrocarbon gas is hereby DENIED. BPXA proposes that AIO No. 31 be modified to approve the following for EOR and pressure maintenance injection. - Produced water and gas; - Enriched hydrocarbon gas; - Non - hazardous water and water based fluids — (includes seawater, source water, freshwater, domestic wastewater, equipment washwater, sump fluids, hydrotest fluids, firewater, and water with trace chemicals, and other water based fluids with a pH greater than 2 and less than 12.5 and flashpoint greater than 140 degrees F); - Fluids introduced to production facilities for the purpose of oil production, plant operations, plant/piping integrity or well maintenance that become entrained in the • • AIO 31.001 Amended October 9, 2012 Page 2 of 4 produced water stream after oil, gas, and water separation in the facility. Includes but not limited to: o Freeze protection fluids; o Fluids in mixtures of oil sent for hydrocarbon recycle; o Corrosion/scale inhibitor fluids; o Anti -foams /emulsion breakers; o Glycols - Non - hazardous glycols and glycol mixtures; - Fluids that are used for their intended purpose within the oil production process. Includes: o Scavengers; o Biocides - Fluids to monitor or enhance reservoir performance. Includes: o Tracer survey fluids; o Well stimulation fluids; o Reservoir profile modification fluids. As shown above, the list of fluids for which BPXA seeks approval uses the terms "includes" and "includes but not limited to." Words such as "includes" and "including" along with phrases such as "includes but is not limited to" inappropriately delegate to BPXA the authority to determine what additional fluids are approved. Therefore, this approval modifies BPXA's proposal to delete the use of any such language as set forth below. In support of its application, BPXA submitted a fluid compatibility review based on previous orders and laboratory testing. This review showed that the proper handling and treating, including the use of scale inhibitors, of the injection fluids as well as the proper operation and maintenance, including the pumping of scale remover and acid treatments, of the injection wells will prevent or counteract incompatibility effects. Thus there are no operational risks associated with injection of the proposed fluids in this pool. It has not been demonstrated that the injection of produced gas or enriched hydrocarbon gas will enhance recovery from this pool. Therefore, BPXA's request to allow gas injection in this pool is denied. The change proposed by BPXA will result in increased production, is based on sound engineering and geotechnical reasons, does not promote waste or jeopardize correlative rights, and will not result in increased risk of fluid movement into freshwater. Correlative rights are protected because all lands subject to these orders have been unitized. Freshwater is protected by the proper design and completion of the wells, ongoing/periodic mechanical integrity evaluation required for all injection wells and review of the offset wells to ensure that they won't act as conduits to fluid movement. NOW THEREFORE IT IS ORDERED THAT: Rule 3 of AIO 31 is repealed and replaced by the following: . • AIO 31.001 Amended October 9, 2012 Page 3 of 4 Rule 3: Authorized Fluids for enhanced Recovery Fluids authorized for injection are: a) Produced water from Prudhoe Bay Unit processing facilities; b) Non - hazardous water and water based fluids — (specifically seawater, source water, freshwater, domestic wastewater, equipment washwater, sump fluids, hydrotest fluids, firewater, and water with trace chemicals, and other water based fluids with a pH greater than 2 and less than 12.5 and flashpoint greater than 140 degrees F); c) Fluids introduced to production facilities for the purpose of oil production, plant operations, plant/piping integrity or well maintenance that become entrained in the produced water stream after oil, gas, and water separation in the facility. Specifically: i. Freeze protection fluids; ii. Fluids in mixtures of oil sent for hydrocarbon recycle; iii. Corrosion/scale inhibitor fluids; iv. Anti- foams /emulsion breakers; v. Glycols d) Non - hazardous glycols and glycol mixtures; e) Fluids that are used for their intended purpose within the oil production process. Specifically: i. Scavengers; ii. Biocides f) Fluids to monitor or enhance reservoir performance. Specifically: i. Tracer survey fluids; ii. Well stimulation fluids; iii. Reservoir profile modification fluids. NUNC PRO TUNC September 4, 2012 DONE at Anchorage, Alaska and dated October 9, 2012. -1 —Aileigir ,/ 40,, ASIK Daniel T. S - . ount, Jr. orma Commissioner ommissioner � p I % n lit SUN COO • • AIO 31.001 Amended October 9, 2012 Page 4 of 4 RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. As provided in AS 31.05.080(b), "[t]he questions reviewed on appeal are limited to the questions presented to the AOGCC by the application for 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. i • Mary Jones David McCaleb XTO Energy, Inc. IHS Energy Group George Vaught, Jr. Cartography GEPS P.O. Box 13557 810 Houston St., Ste. 200 5333 Westheimer, Ste. 100 Denver, CO 80201 -3557 Ft. Worth, TX 76102 -6298 Houston, TX 77056 Jerry Hodgden Richard Neahring Mark Wedman Hodgden Oil Company NRG Associates Halliburton 18th President 40818 St. P.O. Box 1655 6900 Arctic Blvd. Golden, CO 80401 -2433 Anchorage, AK 99502 Colorado Springs, CO 80901 Bernie Karl CIRI K &K Recycling Inc. Land Department Baker Oil pools P.O. Box 58055 P.O. Box 93330 795 E. 94 Ct. Fairbanks, AK 99711 Anchorage, AK 99503 Anchorage, AK 99515 -4295 North Slope Borough Richard Wagner Gordon Severson Planning Department P.O. Box 60868 3201 Westmar Cir. P.O. Box 69 Barrow, AK 99723 Fairbanks, AK 99706 Anchorage, AK 99508 -4336 Jack Hakkila Darwin Waldsmith James Gibbs P.O. Box 190083 P.O. Box 39309 P.O. Box 1597 Anchorage, AK 99519 Ninilchik, AK 99639 Soldotna, AK 99669 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669 -7714 \G(\c'( -\2 4cc-• • Fisher, Samantha J (DOA) From: Fisher, Samantha J (DOA) Sent: Tuesday, October 09, 2012 3:33 PM To: '( michael .j.nelson @conocophillips.com)'; '(Von.L .Hutchins @conocophillips.com)'; 'AKDCWeIIIntegrityCoordinator; 'alaska @petrocalc.com'; 'Anna Ralf; 'Barbara F Fulimer; 'bbritch'; 'Becky Bohrer; 'Bill Penrose'; 'Bill Walker; 'Bowen Roberts'; 'Bruce Webb'; 'caunderwood'; 'Claire Caldes'; 'Cliff Posey'; 'Crandall, Krissell'; 'D Lawrence'; 'dapa'; 'Daryl J. Kleppin'; 'Dave Harbour; 'Dave Matthews'; 'David Boelens'; 'David Duffy'; 'David House'; 'David Scott'; 'David Steingreaber; 'Davide Simeone'; 'ddonkel @cfl.rr.com'; 'Dennis Steffy'; 'Elowe, Kristin'; 'Francis S. Sommer; 'Gary Laughlin'; 'Gary Schultz (gary.schultz @alaska.gov)'; 'ghammons'; 'Gordon Pospisil'; 'Gorney, David L.'; 'Greg Duggin'; 'Gregg Nady'; 'Gregory Geddes'; 'gspfoff; 'Jdarlington (jarlington @gmail.com)'; 'Jeanne McPherren'; 'Jeffery B. Jones (jeff.jones @alaska.gov)'; 'Jerry McCutcheon'; 'Jill Womack'; 'Jim White'; 'Jim Winegarner; 'Joe Lastufka'; 'Joe Nicks'; 'John Easton'; 'John Garing'; 'John Spain'; 'Jon Goltz'; Jones, Jeffrey L (GOV); 'Judy Stanek'; 'Julie Houle'; 'Julie Little'; 'Kari Moriarty'; 'Kaynell Zeman'; 'Keith Wiles'; 'Kelly Sperback'; 'Laura Silliphant (Iaura.gregersen @ alaska.gov)'; 'Luke Keller; 'Marc Kovak'; 'Mark Dalton'; 'Mark Hanley (mark.hanley @anadarko.com)'; 'Mark P. Worcester; 'Marguerite kremer (meg.kremer @alaska.gov)'; 'Michael Jacobs'; 'Mike Bill'; 'Mike Mason'; 'Mike Morgan'; 'Mikel Schultz'; 'Mindy Lewis'; 'MJ Loveland'; 'mjnelson'; 'mkm7200'; 'nelson'; 'Nick W. Glover; 'NSK Problem Well Supv'; 'Patty Alfaro'; 'Paul Decker (paul.decker @alaska.gov)'; 'Paul Figel'; 'Paul Mazzolini'; 'Randall Kanady'; 'Randy L. Skillern'; 'Rena Delbridge'; 'Renan Yanish'; 'Robert Brelsford'; 'Robert Campbell'; 'Ryan Tunseth'; 'Scott Cranswick'; 'Scott Griffith'; 'Shannon Donnelly'; 'Sharmaine Copeland'; Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); 'Sondra Stewman'; 'Stephanie Klemmer; 'Steve Moothart (steve.moothart@alaska.gov)'; 'Steven R. Rossberg'; 'Suzanne Gibson'; 'Tamera Sheffield'; Taylor, Cammy 0 (DNR); 'Temple Davidson'; 'Teresa Imm'; 'Thor Cutler; 'Tim Mayers'; 'Tina Grovier; 'Todd Durkee'; 'Tony Hopfinger'; 'trmjr1; 'Vicki Irwin'; 'Walter Featherly'; 'Yereth Rosen'; 'Aaron Gluzman'; 'Aaron Sorrell'; 'Bruce Williams'; Bruno, Jeff J (DNR); 'Casey Sullivan'; 'Dale Hoffman'; 'David Lenig'; 'Donna Vukich'; 'Eric Lidji'; 'Erik Opstad'; Franger, James M (DNR); 'Gary Orr; 'Graham Smith'; 'Greg Mattson'; Heusser, Heather A (DNR); 'James Rodgers'; 'Jason Bergerson'; 'Jennifer Starck'; 'Jill McLeod'; 'Joe Longo'; King, Kathleen J (DNR); 'Lars Coates'; 'Lois Epstein'; 'Marc Kuck'; 'Marie Steele'; 'Matt Gill'; 'Ostrovsky, Larry Z (DNR)'; 'Patricia Bettis'; Perrin, Don J (DNR); 'Peter Contreras'; Pexton, Scott R (DNR); 'Richard Garrard'; 'Ryan Daniel'; 'Sandra Lemke'; 'Talib Syed'; 'Wayne Wooster; 'Wendy Wollf; 'William Hutto'; 'William Van Dyke' Subject: aio31 -001 amended Raven Oil Pool Attachments: aio31 -001 amended.pdf From: Fisher, Samantha 3 (DOA) Sent: Tuesday, October 09, 2012 3:32 PM To: Ballantine, Tab A (LAW); Bender, Makana K (DOA); 'Brooks, Phoebe L (DOA) (phoebe.brooks @alaska.gov)'; 'Colombie, Jody J (DOA) (jody.colombie @alaska.gov)'; 'Crisp, John H (DOA) (iohn.crisp@alaska.gov)'; 'Davies, Stephen F (DOA) (steve.davies @alaska.gov)'; Ferguson, Victoria L (DOA); 'Foerster, Catherine P (DOA) (cathy.foerster @ alaska.gov)'; 'Grimaldi, Louis R (DOA) (Iou.grimaldi @alaska.gov)'; 'Johnson, Elaine M (DOA) (elaine.johnson @ alaska.gov)'; 'Jones, Jeffery B (DOA) (jeff.jones @alaska.gov)'; 'Laasch, Linda K (DOA) (linda.laasch @alaska.gov)'; 'McIver, Bren (DOA) (bren.mciver @alaska.gov)'; 'McMains, Stephen E (DOA) (steve.mcmains @alaska.gov)'; Mumm, Joseph (DOA sponsored); 'Noble, Robert C (DOA) (bob.noble @alaska.gov)'; 'Norman, John K (DOA) (john.norman @alaska.gov)'; 'Okland, Howard D (DOA) (howard.okland @alaska.gov)'; 'Paladijczuk, Tracie L (DOA) (tracie.palad jjczuk @alaska.gov)'; 'Pasqual, Maria (DOA) (maria.pasqual @alaska.gov)'; 'Regg, James B (DOA) (jim.regg @alaska.gov)'; 'Roby, David S (DOA) (dave.roby @alaska.gov)'; 'Scheve, Charles M (DOA) (chuck.scheve (aalaska.gov)'; 'Schwartz, Guy L (DOA) (guy.schwartz @alaska.gov)'; 'Seamount, Dan T (DOA) (dan.seamount @alaska.gov)'; Singh, Angela K (DOA); Wallace, Chris D (DOA) Subject: aio31 -001 amended.pdf - Adobe Acrobat Professional 1 27 bp• • 0 BP Exploration (Alaska) Inc. P 0. Box 196612 900 E. Benson Boulevard Anchorage, AK 99519 -6612 USA CERTIFIED MAIL # 7011 2970 0003 5821 9955 RE CE21 VED April 30, 2012 MAY Q 2� 1,? Kathy Foerster, Commissioner AOGC Alaska Oil & Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 Re: Prudhoe Bay Field Area Injection Orders, Standardization of Authorized Fluids for EOR and Pressure Maintenance Dear Ms. Foerster, This letter is to request a change to Prudhoe Bay Field (PBF) Area Injection Orders (AIO) to standardize the language in the rule referencing the fluids authorized for injection for enhanced recovery and pressure maintenance. BP Exploration (Alaska) Inc. (BPXA) is requesting this change in order to address the complexity of field operations with multiple pools serviced by common facilities and potential confusion that results from the differing language in the various orders. This proposed change is intended to clarify and document the fluids that are authorized for enhanced oil recovery (EOR) and pressure maintenance injection within the PBF and provide greater compliance assurance for our field operations. A review of AIOs for pools in the PBF indicates that some contain very general language and some are very specific in defining which fluids are authorized for injection. The language defining fluids that may be injected has changed over time in successive versions of some of the orders. For instance, AIO 4 language has changed from "non- hazardous fluids ", to "Class II fluids" to "authorized fluids ". In addition, some fluids have received specific authorization via administrative approvals. The diversity of language and changes over time has resulted in confusion over which fluids are actually authorized for injection. The enclosed list (Attachment A) shows the various PBF pools, AIOs, and a summary of the current rule and /or administrative approvals that authorize fluids that may be injected for purposes of pressure maintenance and enhanced recovery. Also included is a summary of findings regarding the compatibility of fluids authorized for injection. As discussed with your staff, BPXA proposes to standardize the list of authorized fluids for the various pools within the PBF. Attachment B is proposed language for this change. In some pools, additional clarification may be required to capture specific conditions or restrictions contained in current orders. Attachment C is a list of historical fluids injected for EOR and pressure maintenance Alaska Oil and Gas Conservation Commission • April 30, 2012 Page 2 Should you have any questions, or require additional information, please contact me at 564- 4838. Sincerely, Alison Cooke UIC Compliance Advisor Attachments cc: Jim Regg AOGCC Dave Roby AOGCC • Alaska Oil and Gas Conservation Commission • April 30, 2012 Page 3 Attachment A Prudhoe Bay Field: fluids specifically authorized for enhanced recovery and pressure maintenance in Area Injection Orders AIO Rule Pool Fluids Authorized Compatibility with Formation 3 1 Prudhoe non - hazardous fluids; Area Injection Order Application for PBU WOA Bay AIO 3.03 rinsate (minus FOR and Fluid Disposal Wells: Section I: 1. (West) solids) from cleaning aerial Water: Beaufort Sea water and Produced gas coolers; Sadlerochit water; Compatibility: Water AIO 3.018 filtered and sensitivity tests on core samples showed no chemically treated lake significant problems with formation plugging or water used for hydrotesting clay swelling over the anticipated operating range replacement pipeline of salinities for produced and Beaufort Sea water; segments; 2. Miscible Gas from CGF; Compatibility: Full AIO 3.028 mixtures of glycol compatibility - reinjected into producing zone; 3. and water Produced Gas from Sadlerochit and Sag River reservoirs; Compatibility: Full compatibility - reinjected into producing zone 4E 1 Prudhoe authorized fluids; AIO4D, Finding 12: The main fluid source will be Bay (East) AIO 4C.02 rinsate (minus source water from the Seawater Treatment Plant. Put River solids) from cleaning aerial No significant compatibility issues are anticipated Lisburne gas coolers; between the formation and injected fluid. Pt. AIO 4E.022 filtered and Analyses of core samples from Put River McIntyre chemically treated lake Formation sandstone in Prudhoe Bay West water used for hydrotesting Unit Well 2 -14 demonstrate similar clay mineral Beach replacement pipeline types and proportions as those in Kuparuk River Stump segments for Greater Point Formation reservoirs in adjacent North Slope Island McIntyre; fields. Each of the analog fields has a successful AIO 4E.023 filtered and history of waterflooding and based on these chemically treated lake comparisons the water used for hydrotesting Put River Formation is not anticipated to have replacement pipeline compatibility issues related to seawater injection. segments for Prudhoe Bay AIO4C, Finding 20: Seawater is currently injected Unit fields; in the Pt. McIntyre waterflood. It is possible that AIO 4E.034 mixtures of produced water will be used later in the project. glycol and water Both water sources have previously been approved in Area Injection Order No. 4B Finding 34: Laboratory testing, core analyses and geochemical modeling indicate no significant problems are likely due to clay swelling or in -situ fluid compatibility problems between WBOP and Tertiary formation waters. Finding 35: WBOP waterflood source water from the Sagavanirktok Formation is expected to have excess barium ion which could precipitate barium sulfate scale if mixed with PMOP produced water. WBOP produced water will be inhibited upstream of the commingling point with PMOP fluids to prevent scale precipitation. Alaska Oil and Gas Consery ion Commission • April 30, 2012 Page 4 PBU EOA Area Injection Order Application, Section I Enhanced Recovery type of fluid: A. source water - treated seawater; Compatibility: no significant problems with formation plugging or clay swelling due to fluid incompatibilities are anticipated; B. produced water from Flow Stations and LPC; Compatibility: Fluid is returned to the reservoir from which it was produced, no compatibility problems anticipated; C. Natural Gas and NGL; Compatibility: Fluid is returned to the reservoir from which it was produced, no compatibility problems anticipated; D. Miscibile Injectant; Compatibility: Fluid is returned to the reservoir from which it was produced, no compatibility problems anticipated. 14A 1 Niakuk produced water from LPC, AIO14A, Finding 7: Injection will utilize either Beaufort seawater, produced or source water. The wells are currently trace amounts of scale configured to allow 60,000 Barrels of Water per inhibitor, corrosion inhibitor, Day ( "BWPD ") total, with a maximum injection of emulsion breakers, other up to 70,000 BWPD. The produced water will be products used in production a mix of Pt. McIntyre, West Beach, North process, stimulation fluids Prudhoe Bay, Lisburne and Niakuk produced water separated through the Lisburne Production Center ("LPC"), with the majority coming from Pt. McIntyre. Seawater has been injected as well. SEM, XRD and ERD analyses conducted on Niakuk core indicate very low clay content in reservoir intervals. As a result no significant problems with formation plugging or clay swelling due to fluid incompatibilities is expected. Produced water may contain trace amounts of scale inhibitor, corrosion inhibitor, emulsion breakers, and other products used in the production process. 20 1 Midnight fluids appropriate for A1020 Finding 21: Geochemical model results Sun enhanced recovery; indicate that a combined Tertiary water and AIO 20.001 filtered and connate water is likely to form calcium carbonate chemically treated lake and barium sulfate scale. Similar scale water used for hydrotesting precipitation is anticipated for produced water. replacement pipeline Scale will be controlled with commonly available segments inhibitors. Alaska Oil and Gas Conserve ion Commission • April 30, 2012 Page 5 22E 10 Aurora produced water, Prince AIO22B, Finding 9: The compositions of injection Creek source water *, water and AOP connate water were provided in enriched hydrocarbon gas *, Exhibit IV -4 of the original AIO application. Water immiscible hydrocarbon analysis from the nearby Milne Point Prince gas *, tracer survey fluid, Creek Formation was provided in the April 28, non - hazardous filtered 2003 application for rehearing water from pads and cellars *conditions for authorization are included in the current order 24B 2 Borealis produced water, non- A1024A, Finding 9: As previously approved by hazardous filtered water the Commission, produced water from GC -2 is from pads and cellars, used as the primary water source for Borealis tracer survey fluid, treated injection. Injection performance, core, log and seawater, enriched pressure - buildup analyses indicate no significant hydrocarbon gas *, Prince problems with clay swelling or compatibility with Creek source water; in -situ fluids. BPXA analysis of cores from the AIO 24A.001 filtered and BOP wells indicates relatively low clay content. chemically treated lake Petrographic analysis indicates that clay volumes water used for hydrotesting in the better quality sand sections ( >20 md) are in replacement pipeline the range of 3 - 6 %. Clay volumes increase to segments approximately 6 - 12% in rock with permeabilities in the range of 10 - 20 md. Below 10 md, clay volumes increase to a range of 12 - 20 %. Most of the identified clay is present as intergranular matrix, having been intermixed with the sand through burrowing. The overall clay composition is a mixture of roughly equal amounts of kaolinite, illite and mixed layer illite /smectite. No chlorite was reported during petrographic analysis. The presence of iron - bearing minerals suggests that *conditions for authorization the use of strong acids should be avoided in are included in the current breakdown treatments, spacers, etc. Water from order the seawater treatment plant has been successfully used for injection within the Kuparuk of the Pt. McIntyre Oil Pool. Geochemical modeling indicates that a combination of GC -2 produced water and connate water is likely to form calcium carbonate and barium sulfate scale in the production wells and downstream production equipment. Scale precipitation will be controlled using scale inhibition methods similar to those used at Kuparuk River Unit and Milne Point Unit. Miscible gas is a hydrocarbon with similar composition to reservoir fluids in the BOP therefore no compatibility issues are anticipated with the formation or confining zones. The composition of injection water from the Prince Creek aquifer is expected to fall within the range of Well W -400 and MPF -02 produced water • • Alaska Oil and Gas Conservation Commission April 30, 2012 Page 6 compositions, less than 10,000 -ppm total dissolved solids. Milne Point Unit F -Pad Prince Creek source water has been injected since 1996 into the Milne Point Kuparuk Reservoir, lithologically similar to the BOP, with no apparent formation damage. A single well chemical tracer test in BOP well L -122 conducted using 640 barrels of Prince Creek Source water did not detect any formation damage. 25A 3 Polaris produced water, tracer AIO 25A, Finding 11: The enriched gas proposed survey fluid, enriched for injection is a hydrocarbon with similar hydrocarbon gas, treated composition to reservoir fluids in the Polaris Oil seawater, non - hazardous Pool and therefore no compatibility issues are filtered water from pads and anticipated. cellars, enriched AIO 25, Finding 12: BPXA provided laboratory hydrocarbon gas; analysis of the injection and produced waters. No AIO 25A.001 filtered and significant compatibility problems are evident chemically treated lake from these analyses. Disposal of PBU produced water used for hydrotesting water within the Ugnu sands has successfully replacement pipeline occurred in other parts of the field. segments 26B 3 Orion enriched gas, produced AIO 26A, Finding 11: The enriched gas proposed water, tracer survey fluid, for injection is a hydrocarbon with similar treated seawater, Prince composition to reservoir fluids in the Orion Oil Creek source water, non- Pool and therefore no compatibility issues are hazardous filtered water anticipated. from pads and cellars, non- AIO 26, Finding 11: The composition of produced hazardous filtered lake water will be a mixture of connate water and water employed for injection water, and will change over time hydrotesting pipeline depending on the rate and composition of segments injection water. Based on analyses of Polaris water samples, no significant compatibility problems are expected between connate water and injection water. 31 3 Raven produced water, tracer AIO 31, Finding 14: Water compatibility problems survey fluid, stimulation are not expected because of the successful fluids, source water from history of both sea water and produced water STP, and non - hazardous injection into the Prudhoe Bay Reservoir. No clay water collected from well swelling problems have been seen in the Ivishak house cellars and standing Formation in the Ivishak Participating Area of the ponds. PBU (IPA) with either source water injection or produced water injection. When present, scaling in the Ivishak Formation in the IPA has been limited to calcium carbonate deposition, which has been eliminated with acid treatments and controlled with the use of inhibitors. Minimal problems with formation plugging or clay swelling due to fluid incompatibilities are anticipated. • Alaska Oil and Gas Conservation Commission April 30, 2012 Page 7 Attachment B Proposed Standardized List of Fluids Authorized for Injection in Prudhoe Bay Field Pools Fluids authorized for injection include: • Produced water and gas; • Enriched hydrocarbon gas • Non - Hazardous Water and water based fluids — (includes seawater, source water, freshwater, domestic wastewater, equipment washwater, sump fluids, hydrotest fluids, firewater, and water with trace chemicals, and other water based fluids with a pH greater than or equal to 2 or less than or equal to 12.5 and flashpoint greater than 140 degrees F) • Fluids introduced to production facilities for the purpose of oil production, plant operations, plant/piping integrity or well maintenance that become entrained in the produced water stream after oil, gas and water separation in the facility. Includes but not limited to: • Freeze protection fluids; • Fluids in mixtures of oil sent for hydrocarbon recycle • Corrosion /Scale inhibitor fluids • Anti - foams /emulsion breakers • Glycols • Non - hazardous glycols and glycol mixtures • Fluids that are used for their intended purpose within the oil production process. Includes: • Scavengers; • Biocides • Fluids to monitor or enhance reservoir performance. Includes: • Tracer survey fluids; • Well stimulation fluids • Reservoir profile modification fluids Alaska Oil and Gas Conservation Commission • April 30, 2012 Page 8 Attachment C Historical Fluids Injected for FOR and Pressure Maintenance: these fluids were authorized and injected under the general descriptions of authorized fluids: AIO 4, 4A, and 4B: Class II fluids; AIO 4C: authorized fluids; AIO 3: non - hazardous fluids Treated Seawater supplied from PBU STP. Contains small amounts of chemicals: coagulant, anti -foam, scale inhibitor, biocide, oxygen scavenger and other process chemicals. Produced water from PB field producing formations. Contains small amounts of entrained produced oil and gas, and chemicals: scale inhibitor, corrosion inhibitor, emulsion breaker, and other production process chemicals. Natural Gas (including natural gas liquids) from PB field producing formations. Miscible Injectant from PBU Central Gas Facility. Reserve Pit water from pit dewatering operations. Consists of precipitation and small amounts of drilling wastes and chemicals (oxygen scavenger and biocide). Source water from shallow formations. Contains small amount of production chemicals (scale inhibitor). 26 • • BP closes site over loss in Slope rent dispute HEALD POINT: Oengas fight oil giant over rent for use of their land. By ELIZABETH BLUEMINK \VL ISS N ,Do\-\ r a vi ebluemink @adn.com \l. -- coS N a os - 0 (03 Published: January 4th, 2011 10:09 PM N V.-` 3 @ 0 \ — Q( Last Modified: January 4th, 2011 10:09 PM VL— \ ( A N a 0 \ _ O R BP shut down a small portion of the Prudhoe Bay oil field last week after a judge ruled that federal regulators failed for years to get approval from the Inupiat Eskimo family that owns the land. CO - \ - 0 Italia otkalift rod awn It — 0....i.., .• ;..,, a - "' - - a 1= .mss Photo courtesy of BP Exploration (Alaska) Inc. Heald Point drill pad at Prudhoe Bay has been used to access oil from several oil pools, including Raven. The BIA told BP to suspend Raven production in late December due to a court ruling. Read more: http://www.adn.com/ 2011 /01 /04 /v- gallery /1631936/bp- closes- site - over - loss- in- rent.html #ixzzl AB7r0Irl • • The shutdown affects less than 1 percent of production from the nation's largest oil field, but so far it's the most visible consequence of a significant legal victory for the Native family, which has battled lawyers for the federal Bureau of Indian Affairs and BP in federal court over the oil production from its land. Federal claims court judge Nancy Firestone ruled this fall that the Oenga family is owed millions in unpaid rent because the BIA improperly allowed BP to tap three offshore oil deposits from the family's allotment on the northern edge of the vast Prudhoe oil field. i The BIA approved BP's expanded use of the allotment without the family's consent, in violation of the family's contract with BP, Firestone said in her 168 - page ruling on Nov. 22. A week ago, the BIA told BP to shut down production from Prudhoe's Raven unit, the only one of the three disputed offshore deposits that BP was still accessing from the allotment. BP shut down Raven, which produced about 25,000 barrels of oil in November, on Friday. BP is still legally tapping the Niakuk field from the allotment. The battle over unpaid rent and unauthorized land use involves a nondescript finger of land called Heald Point that extends into the Beaufort Sea. The Oenga family acquired its 40 -acre allotment at Heald Point decades ago for subsistence hunting. But in 1989, the family patriarch, Andrew Oenga, signed a contract with BP allowing the oil giant to use Heald Point as a right of way. Years later, believing that BP was giving the family annual rent payments much lower than the land's true value, eight of Oenga's heirs -- including two children, his grandchildren and great - grandchildren -- sued the BIA in 2005. The family said it had to go to court because it was unable to persuade the agency, which is in charge of collecting the family's rent from BP, to take action on its behalf. In an eight -day Lower 48 trial last July, the agency and the oil giant defended themselves against the Oengas' claims. BP argued in court filings that no additional money was owed to the family. The BIA argued that the family's claims for unpaid rent were exorbitant. • • The judge ruled for the family, saying the BIA owes it roughly $5 million for the unauthorized use of the land, but she also said that BP is paying too little for the land it is authorized to use. The judge is still taking briefings on the exact amount owed but it will be far below the $200 million the Oengas originally sought. BP Alaska spokesman Steve Rinehart said Tuesday the company is evaluating its best path forward on a potential appeal. He emphasized that Raven represented a fraction of Prudhoe's output. BIA's acting director in Alaska did not return a call for comment on Tuesday. In a written statement late week, Oenga family member Tony Delia said the family is willing to end the matter. "Earlier this month we made BP a fair offer -- pay what is owed and we will renegotiate the lease so they can use our land to produce from Raven and wherever else they want to drill. They haven't responded," he said. According to a written statement from the family's attorney, Ray Givens, the total amount owed the family is $15 million. That figure includes the Oenga family's calculation of how much additional money it is owed in unpaid rent for BP's authorized use of the land, which was not part of the this lawsuit. In her ruling, Firestone said evidence from the trial showed that BP withheld critical information about Heald Point's strategic value for oil development when it negotiated a contract with the family to use the land. "Clearly, (BP) did not wish to share much with the plaintiffs," she wrote. Find Elizabeth Bluemink online at adn.com /contact /ebluemink or call 257 -4317. Read more: http: / /www.adn.com/ 2011/01 /04/1631936/bp- closes- site - over - loss -in- rent.html #ixzz 1 AB73YsM3 $=à5 FW: Attachment 2 Raven tract participations. doc . . «Attachment 2 Raven tract participations. doc» Bob - here are the corrected attachments per our discussion this morning. Mark Weggeland GPMA Resource Manager Office: +1 (907) 564-5351 Mobile: +1 (907) 229-1628 Email: weggelmc@bp.com Mail: BP Exploration (Alaska) Inc. PO Box 196612 Anchorage AK, 99519-6612 -----Original Message----- From: Gould, Sherri L Sent: Monday, August 07, 2006 12:28 PM To: Weggeland, Mark C¡ Strait, David R Subject: Attachment 2 Raven tract participations.doc Mark and Dave, Enclosed is the map (Attachment 1) and the corrected tract participation (Attachment 2). Sherri C t t Do to Attachment 1 Location Map on en - escnp Ion: RP A.ZIP Location Map RP A.ZIP C t t T on en - ype: Content-Encoding: application/x -zip-compressed base64 2 Raven tract participations. doc Content-Type: Content-Encoding: C t t Do to . Attachment 2 Raven tract on en - escnp Ion. art·· t" d P IClpa Ions. oc application/msword base64 I of I 8/7/20063:49 PM M 1 .. BPXA Cartography 19-2ß..051Im15067~a.dgn A TT ACHMENT 2 TRACTS WITHIN THE RPA AND RAVEN TRACT PARTICIPATIONS Tract Lease T&R Section: Description Acres Royalty - - - - - - - -Tract Ownership %- - - - - - - - - - - - - - - - - - - - Tract Participation % BPXA CPAI ExxonMobil Chevron Forest 4 034625 12N-15E Sec 24 S/2SW/4 80 12.5 26.355356% 36.069385% 36.395491% 1.1600000% 0.019768% 0.904% . 31 034630 12N-15E Sec 25 E/2, NW4, 720 12.5 26.355356% 36.069385% 36.395491 % 1.1600000% 0.019768% 50.429% E/2SW/4 Sec 26 E/2NE/4 Sec 36 N/2NE/4 32 034635 12N-16E Sec 29 S/2NW/4, 12.5 26.355356% 36.069385% 36.395491 % 1.1600000% 0.019768% 48.667% N/2SW/4, 815 SW/4SW/4 Sec 30 All Sec 3 1 NW/4 NW/4 . Total'" 1,615 acres BPXA - BP Exploration (Alaska) Inc. CPAI- ConocoPhillips Alaska, Inc. Forest - Forest Oil Corporation ExxonMobil - ExxonMobil Alaska Production Inc. Chevron - Chevron U.S.A. Inc · ..~ .¡::: ,,~ '.".j> ,,-j 1) L GJ ä..J .'.1" f. bp BP Exploration (Alaska) Inc. 900 East Benson Boulevard P.O. Box 196612 Anchorage, Alaska 99519-6612 (907) 561-5111 July 21, 2006 Jane Williamson Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 RE: Affidavit Dear Ms. Williamson: Please find ~"closed the attached affidavit in support of the application for Pool Rules and Area Injection Order Appìiciltion for the Raven Oil Pool. Please contact me (564-5942) if you have any questions. Sipcerely, ! Sherri Gould Lead Negotiator Attachments CC: Bob Crandall . . Exhibit B Affidavit STATE OF ALASKA THIRD JUDICAL DISTRICT I, Mark Weggeland, declare and affirm as follows: 1. lam the GPMA Manager for BP Exploration (Alaska) Inc., the designated operator of the Prudhoe Bay Unit and the Raven Participating Area (PA), and as such have responsibility for unit operations within the Raven P A area. 2. In February of2006, I caused copies of the February 10,2006 Application for Area Injection Order and Pool Rules for the Raven Oil Pool to be provided to the below referenced surface owners and operators of all land within a one-quarter mile radius of the proposed injection area. Operators: Prudhoe Bay Unit Operator: Attention: M. Johnson BP Exploration (Alaska) Inc. PO Box 196612 Anchorage, AK 99519-6612 Surface Owner: Attention: Dick {víyliu5 State of Alaska Division of Mining, Land and Water Department of Natural Resources 550 West 7th Avenue, Suite 800 Anchorage, AK 99501-3510 Surface Owner: Attention: Heirs of Andrew Oenga c/o Inupiat Community of the Arctic Slope PO Box 934 Barrow, AK 99723-0934 /)jv-~L W~oJ?J Mark Weggeland a r - 2-D Date J~ 2ðD~ ~23 Re: Raven AlO - ~~rlier Withdrawal OfNK-65wection order . SubJ~ct: Re: Raven AIO -Earlier Withdrawal ofNK-65A injection order From: Jane Williamson <jane_ williamson@admin.state.ak.us> Date: Tue, 20 lun 2006 10:28:00 -0800 This might need to be put in the Raven AIO file. It's an in-between area. Also, I told her to call you if she needs to review/copy our files on Raven and NK-65A (AA14A.001). Apparently their was a change in BPs administrative staff and it seems like they can't find a thing. Cammy, what do you think. In the Raven file or just wait till we see how it all turns out? Jane Jody Colombie wrote: why did you send this to me? Jane Williamson wrote: Sherri, Here's the letter from Gus withdrawing the original 2005 application for NK-65A. (You stated you have a copy of the affidavit for this application and we likely also have this affidavit in our files). Later, we decided we could handle the NK-65A request through Administrative amendment to AI014 for Niakuk (AA14A.001). I'm attaching that amendment - it might be of some historical use to you. I've also attached the Raven application BP sent that is currently being considered for Pool Rules and AIO. As I stated, the affidavit was not included in the application that we have. I'm attaching a scan of the application we have on file. I've .filled in Cammy Taylor, our attorney from the AG office. (She's at the same disadvantage that you as she wasn't here at the time of these applications). You can contact Cammy at 269-5269 for further discussion on the way to proceed if you can't find the affidavit. You can also call me at 793-1226 - however, I will be out of the office from tomorrow afternoon through the remainder of the week. I think Jody Colombie could let you look at the files for AA14A.00l and the file for the current application to help you fill in your own files. You can contact her at 793-1221. Jane -------- Original Message -------- Subject: Withdrawal of NK-65A injection order Date: Mon, 11 Jul 2005 14:40:02 -0800 From: Gustafson, Gary G (Alaska) <GustafGG@BP.com> To: jane williamson@admin.state.ak.us CC: Ince, Don <Don.lnce@conocophillips.com>, Goltz, Jon K <Jon.Goltz@conocophillips.com>, Steve S. Luna (Exxon) (steve.s.luna@exxonmobil.com) <charles.s.luna@exxonmobil.com>, Buckendorf, Randal (Randal.Buckendorf@BP.com) <Randal.Buckendorf@BP.com>, Mark C Weggeland (Weggeland, Mark C) <weggelmc@BP.com>, Strait, David R <StraitDR@BP.com>, Leslie B Senden (Senden, Leslie B) <SendenLB@BP.com>, Threadgill, Greg (ExxonMobil) <greg.b.threadgill@exxonmobil.com>, jeff.e.farr@exxonmobil.com, Frazer, Lamont C <Lamont.C.Frazer@conocophillips.com> Jane, Pursuant to our conversation earlier today, BPXA, as PBU operator, gives formal notice of the withdrawal of our May 18, 2005 request to allow for the injection of lof2 6/20/2006 10:39 AM Re: Raven AIO ;arlier Withdrawal OfNK-6.ection order . water for enhanced recovery into the NK-65A well. As a result, it is our understanding that the AOGCC will now cancel the public hearing on the request scheduled for 9:00 AM on July 13, 2005. On July 14 we scheduled a meeting with DO&G Director Mark Myers to discuss several pending Niakuk issues, including the proposed NK-65A tract operations and a new Raven PA. I will keep you posted on the results of this discussion as they could have a bearing upon the future actions we advance to the Commission. As you know, the Commission's April 13, 2005 waiver of the gas-oil ratio limitations for the NK-38A well expires July 31, 2005 (DNR tract operations will expire on July 29). BPXA hereby provides early notice that we may request an extension of this waiver - which if a NK-38A tract operations extension is also requested and approved by DNR - will allow continued production from the well while we prepare the Raven CO & AlO applications. Thanks again for your advice and assistance. Please confirm that the Commission's July 13 public hearing on the NK-65A injection order has been cancelled. Gus Jane Williamson, PE ~iane williamson~admin.state.ak.us> Reservoir Engineer Alaska Oil and Gas Conservation Commission 20f2 6120/2006 10:39 AM ~ RE: NK-38A and NK-43 . . Hi Winton. Below is the current status of the 2 wells. NK-38A (PTD 2042410): Natural flow well, currently on-line and waivered for IAxOA comm. NK-43 (PTD 2010010): Gas lifted well, currently shut-in due to a tubing leak at GLM #3. Scheduled for a tubing patch. Please call with any questions. Joe Anders, P.E. Well Integrity Coordinator, BP Exploration, (Alaska) Inc. Work: 1-907-659-5102 Mobile: 943-1154 Pager: 659-5100,x1154 Email: NSUADWWelllntegrityEngineer@bp.com From: Winton Aubert [mailto:winton_aubert@admin.state.ak.us] Sent: Monday, June OS, 2006 6:54 AM To: NSU, ADW Well Integrity Engineer Subject: NK-38A and NK-43 Joe, What is the current status of NK-38A and NK-43? Thanks, Winton Aubert AOGCC 793-1231 1 of 1 6/5/2006 3:56 PM ~~î NK-43 Status . . Subject: NK-43 Status From: Winton Aubert <winton_aubert@admin.state.ak.us> Date: Fri, 26 May 2006 09:49:02 -0800 To: "NSU, ADW Well Integrity Engineer" <NSUADWWelllntegrityEngineer@BP.com> Joe / Anna, What is the status of NK-43? I need the information to include in a Raven AIO. Thanks, Winton Aubert AOGCC 793-1231 1 of] 6/6/2006 9:52 AM 1f~O . . GARY A. ZIPKIN lOUIS R. VEERMAN JAMES D. lINXWllER JAMES D. DEWITT JOSEPH J. PERKINS. JR. GEORGE R. l YLE MICHAEL S. MCLAUGHLIN SUSAN M. WEST JOAN E. ROHLF MICHAEL K. NAVE JONATHAN A. WOODMAN AISHA TINKER BRAY NElLEENE A. BOOTHBY MATTHEW COOPER CHRISTINA RANKIN PAMELA D. WEISS JOSEPH BRIAN GROSS MOllY C. BROWN Gûësš&Rudd P.c. W. EUGENE GUESS 1932·1975 JOSEPH RUDD 1933-1976 FRANCIS E. SMITH, JR. 1941·1991 510 L STREET, SUITE 700 ANCHORAGE, ALASKA 99501-1964 TELEPHONE (907) 793-2200 FACSIMILE (907) 793-2299 OFFICES IN ANCHORAGE & FAIRBANKS OF COUNSEL MARGARET S. JONES GREGORY G. SilVEY April 28, 2006 HAND DELIVERED Alaska Oil & Gas Conservation Commission 333 W. 7th Ave., Suite 100 Anchorage, Alaska 99501 Re: Prudhoe Bay Unit, Raven Oil Pool Pool Rules and Area Injection Order Supplemental response of BP Exploration (Alaska) Inc. to supplemental comments submitted by attorney Raymond C. Givens (counsel for heirs of Andrew Oenga) in his letter dated April 12. 2006 Dear Commissioners: On behalf of BP Exploration (Alaska) Inc. ("BPX"), operator of the Prudhoe Bay Field, we hereby submit the following response to the supplemental comments submitted by Raymond C. Givens (counsel for the heirs of Andrew Oenga) in his letter dated April 12, 2006.1 This response addresses in detail the four issues that BPX believes have been raised in this proceeding by the heirs of Andrew Oenga. Issue No.l-BIA Lease F-89-01: What documents does Lease F-89-01 comprise. and what is the scope of the grant made by BIA Lease F-89-01? Attached to BPX's comments dated March 30, 2006, was a copy of the Lease Agreement granted by Andrew Oenga to BPX, as subsequently amended and supplemented (said Lease Agreement as subsequently amended and supplemented is referred to hereinafter as the "BIA Lease No. F-89-01 "). BPX provided these documents because the terms thereof were placed in issue by the Heirs of Andrew Oenga but these documents had not been provided to the Commission. 1 Submission of this response is permitted under Commission Chairman John Norman's Order dated April 19, 2006. . . Alaska Oil & Gas Conservation Commission April 28, 2006 Page 2 BPX's letter of July 29, 1993 (a copy of which was attached both to the comments of Tony Delia submitted on March 28, 2006, and to the comments of Raymond C. Givens (counsel for heirs of Andrew Oenga) in his letter dated April 12, 2006) is not an "amendment" to BIA Lease No. F-89-01 that limits or diminishes any of the rights granted to BPX under the original Lease Agreement effective January 1, 1989, to use the surface of Andrew Oenga's allotment parcel at Heald Point. Instead, it is BPX's written notice to the BIA under the original Lease Agreement effective January 1, 1989, of the following: (a) BPX's satisfaction of its obligation under Section 1 of the original Lease Agreement (which obligation accrued when BPX received all of the permits and authorizations that it needed to proceed with development of the Niakuk Project) to convert the lease from a year-to-year tenancy to a long term tenancy expiring (unless extended pursuant to Section 2 of the Lease) on December 31,2014, subject to BPX's right (exercisable only at five-year intervals) to cancel the Lease pursuant to Section 15 of the original Lease Agreement; (b) BPX's exercise of its option under Section 11 of the original Lease Agreement to increase the size of the leased premises. In its letter of July 29, 1993, BPX proposed an effective date of August 1, 1993, for its increase from 10 acres to 20 acres, and the BIA acknowledged and agreed to such effective date when it signed BPX's letter of July 29, 1993. Said letter of July 29, 1993, made no other changes to the original Lease Agreement, however. In particular, and without limiting the generality of the foregoing, said letter of July 29, 1993, did not cause the rights granted to BPX under the original Lease Agreement in, to, and respecting the leased premises to be limited, diminished, or constrained to the development of any particular accumulation, pool, or reservoir of oil, gas, or associated substances. Instead, BPX's rights in, to, and respecting the leased premises remained exactly as described in Sections 10 and 11 of the Original Lease Agreement.2 2 Six months later BPX again exercised its option under Section 11 of the original Lease Agreement to increase the size of the leased premises-this time from 20 acres to all 40 acres of land within Andrew Oenga's allotment parcel at Heald Point. Said exercise was . . Alaska Oil & Gas Conservation Commission April 28, 2006 Page 3 What BPX negotiated for and was granted pursuant to the original Lease Agreement was a lease of the "leased premises" (as expanded from time to time pursuant to Section 11 of the original Lease Agreement), to use said "leased premises" for all of the purposes set forth in Sections 1 0 and 11. The references to the "Niakuk Project" in the original Lease Agreement (pp. 1-2) and in the letter of July 29, 1993 (p. 1) to which the heirs of Andrew Oenga have directed the Commission's attention do not limit the scope of the grant made by the original Lease Agreement but instead relate to and limit the extent to which BPX could continue to hold the original Lease Agreement as a year-to-year tenancy instead of a long-term tenancy. Obviously BPX did not want to commit to a 25-year lease if it might not be able obtain the permits and authorizations that it was seeking, yet just as obviously Andrew Oenga sought to enjoy as soon as possible the financial security associated with having a long-term lease and its predictable promised cash flow. All of the paragraphs contained in Section 1 of the original Lease Agreement other than the first paragraph thereof set forth the manner in which the parties resolved these two sets of competing concerns and goals. Said paragraphs say nothing about limiting the scope of the grant made by Sections 10 and 11 of the original Lease Agreement. What BPX stated in the first paragraph of its letter of July 29, 1993-namely, that "[t]he Lease provided authorization for BP to construct production facilities to support development of, and production from, our Niakuk oil accumulation" - was and is a true statement of fact. What is totally without basis is the argument of the heirs of Andrew Oenga that said statement by BPX in its letter of July 29, 1993, should be construed to mean that BPX has conceded that BIA Lease F-89-01 authorizes BPX "to construct production facilities to support development of, and memorialized in that certain Agreement To Amend BIA Lease F-89-01 effective January 20, 1994 (the date of approval thereof by the BIA), which agreement also amended the provisions of the original Lease Agreement in several other respects. Like the letter of July 29, 1993, however, nothing in this 1994 amendment caused the rights granted to BPX under the original Lease Agreement in, to, and respecting the leased premises to be limited, diminished, or constrained to the development of any particular accumulation, pool, or reservoir of oil, gas, or associated substances. . . Alaska Oil & Gas Conservation Commission April 28, 2006 Page 4 production from" only the Niakuk oil accumulation. That is not what BIA Lease F-89-01 says and that is not what BPX's letter of July 29, 1993, says. Finally, the Oenga heirs completely missed the point that BPX was making in paragraph 4 of its comments submitted on March 30, 2006. What BPX noted was that even if BIA Lease No. F-89-0 1 had not been structured as a lease but instead only as an easement appurtenant to the lands and leases containing the Niakuk and Raven Pools, BPX still would have received a grant sufficient to enable it to develop the Raven Pool (but not any resources on any lands to which the easement was not appurtenant). Of course, BIA Lease No. F-89-01 was not structured as an easement appurtenant only to certain identified lands but instead was structured as a lease granting exclusive possession for all oil and gas purposes, with rental due thereunder based upon the fair market value from time to time of the entire fee simple estate held by Andrew Oenga when the original Lease Agreement was executed (see Section 9 of the Lease). Issue No. 2-BIA Lease F-89-01: Is BIA Lease F-89-01 in full force and effect? Has BPX paid all rents due under said lease to date? The heirs of Andrew Oenga (through their counsel) stated in the letter of April 12, 2006, that BPX has "not paid all sums due under the lease" and that "[t]hat matter is being pursued by the Department of the Interior." This is an unsupported gross mischaracterization of the current status. BPX has paid in full every payment calculable and due to date under BIA Lease F-89-01. No notice has been received by BPX from the BIA, any heir of Andrew Oenga, or anyone representing the BIA or any heir of Andrew Oenga stating that any payment made by BPX to date was late, deficient by any particular amount, or otherwise delinquent, nor has the BIA, any heir of Andrew Oenga, or anyone representing the BIA or any heir of Andrew Oenga advised BPX in a writing received prior to the date of these comments that BPX must pay any particular amount on or before any particular date pursuant to any particular provision of BIA Lease F-89-01 in order to keep BIA Lease F-89-01 in good standing or in order to avoid being considered to be in breach thereof. BPX acknowledges that BIA Lease F-89-01 contains certain reappraisal and rental adjustment provisions the past implementation of which .by the BIA is currently under review by BIA and the Regional Solicitor's Office of the Department of the . . Alaska Oil & Gas Conservation Commission April 28, 2006 Page 5 Interior. But BPX expressly denies any allegation that it is delinquent in making any payment due under BIA Lease F-89-01 or that it has breached any provision of BIA Lease F-89-01. Issue No. 3- Where is the Raven Oil Pool? BPX stated in paragraph 3 of its comments dated March 30, 2006, that "[t]he Raven Oil Pool is situated within some of the same lands and leases as the Niakuk Pool." This is precisely correct! The Niakuk Participating Area established under the Prudhoe Bay Unit Agreement includes the following lands: Tract Lease Lands 4 34625 T12N R15E UM: Sec. 13 (All) Sec. 14 (All) Sec. 23 (All) Sec. 24 (All) 31 34630 T12N R15E UM: Sec. 25 (All) Sec. 26 (All) Sec. 36 (NE4) 32 34635 T12N R16E UM: Sec. 29 (All) Sec. 30 (All) Sec. 31 (N2) Sec. 32 (N2) 33 34634 T12N R16E UM: Sec. 28 (W2, NE4, NW4SE4, S2SE4) The proposed Raven Participating Area includes some but not all of these same lands: Tract Lease Lands 4 34625 T12N R15E UM: Sec. 24 (S2SW4) 31 34630 T12N R15E UM: Sec. 25 (E2, NW4, E2SW4) Sec. 26 (E2NE4) Sec. 36 (N2NE4) 32 34635 T12N R16E UM: Sec. 29 (S2NW4, N2SW4, SW4SW4) Sec. 30 (All) Sec. 31 (W2NW4NW4) Thus, contrary to the assertions of the Oenga heirs, none of the lands that BPX has proposed for inclusion in the Raven Participating Area are outside the Niakuk Participating Area. The lands that BPX has proposed for . . Alaska Oil & Gas Conservation Commission April 28, 2006 Page 6 inclusion in the Raven Participating Area constitute a subset of the lands already included in the Niakuk Participating Area. BPX also stands by its statement that the Raven Pool is situated below the Niakuk Pool but within the same basic geologic structure as the Niakuk Pool. Issue No.4-Should the Commission delay issuance of pool rules and an area injection order for the reasons advanced by the Oenga heirs? The Oenga heirs contend that they simply are suggesting that the Commission delay issuance of the pool rules and an area injection order until certain issues admittedly not properly before the Commission are resolved and that such a delay "will ensure orderly production of the Raven Pool and avoid possible disruption". BPX submits that, since the issues in dispute between BPX and the Oenga heirs are not properly before the Commission for resolution, the Commission should act notwithstanding any resolution or failure to resolve such issues. Indeed, BPX believes that action by the Commission on BPX's application is likely to lead to a more rapid resolution of any and all issues outstanding between BPX and the Oenga heirs, that such a more rapid resolution is in the interest of all interest holders (including but not limited to the State of Alaska), and that the extent to which either party might seek or be successful in obtaining preliminary or final judicial relief respecting or in connection with such issues is not a matter with which the Commission should concern itself in ruling upon BPX's application. RESPECTFULLY SUBMITTED this 28th day of April, 2006. By: . . Alaska Oil & Gas Conservation Commission April 28, 2006 Page 7 CERTIACATE OF SERVICE I hereby certify that on the 28th day of April, 2006, I mailed a true and correct copy of the foregoing document and the enclosures described therein to each of the following counsel: Raymond C. Givens, Esq. Givens Law Firm 912 E. Shennan Ave. P.O. Box 400 Coeur d'Alene, ID 83816-0400 Roger L. Hudson, Esq. U.S. Department of the Interior Office of the Solicitor, Alaska Region 4230 University Drive, Suite 300 Anchorage, AK 99508-4626 ~S&JD~P.CC\ - ~~~J~.~ KM Crib Legal cretary DA T A: 2432.225/Corresp/2oo60428-BPXsuppComments.doc ~19 . . FRANK H. MURKOWSKI, GOVERNOR A1tA.SIiA OIL AND GAS CONSERVATION COMMISSION April 19, 2006 333 W. ?TH AVENUE. SUITE 100 ANCHORAGE. ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 John Cyr, Esq. BP Exploration (Alaska), Inc. PO Box 196612 Anchorage, Alaska 99519 Re: Prudhoe Bay Unit, Raven Oil Pool Pool Rules and Area Injection Order Dear Mr. Cyr, The Alaska Oil and Gas Conservation Commission has received the letter dated April 12, 2006 from Raymond C. Givens, attorney for the heirs of Andrew Oenga. BP Exploration (Alaska), Inc. is hereby given until the close of business on April 28, 2006 to file a response should you wish to do so. cc: Raymond C. Givens, Esq. Joseph Perkins, Esq. Roger Hudson, DOl Dorothy Edwardsen, ICAS Cammy Taylor, Assistant Attorney General Daniel 1. Seamount, Commissioner Cathy P. Foerster, Commissioner *'1~ \ ~. .. GIVENS LAW Fld . P.O. Box 400,912 E. Sherman Ave. Coeur ¿'Alene, ID 83816-0400 phone (208) 676-1310 fax (208) 676-1296 raygivens@givenslaw.com www.givenslaw.com C~l 4/).". 'VÞ IF çf'¡: 21 V ¿008 April 18, 2006 i~~ "-t't}ii¡ ; "~" . ~J'/b 'q Alaska Oil and Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, Alaska 99501-3539 Re: Prudhoe Bay Unit, Raven Oil Pool Pool Rules and Area Injection Order Dear Commissioners: There was a typographical error in a quote contained in the Oengas' Reply Comments filed last week in the above matter. It is at page 2. The Reply Comments incorrectly stated the last word of the quote as the plural- "accumulations." The word in the lease amendment actually quoted is in the singular - "accumulation." See document quoted and attached to both those comments and this letter (highlighted). On behalf of the Oenga Heirs, it is requested that the Reply Comments dated April 12, 2006 be amended nunc pro tunc to conform with the document actually being quoted. As a courtesy, I have enclosed copies of recent filings with the Alaska Department of Natural Resources regarding related matters. Thank you very much. Sincerely, þ~~ Raymond C. Givens Idaho State Bar # 1695 Washington State Bar # 36029 raygivens@givenslaw.com RCG:jr Enclosure ~ ¿ .. . . cc: Oenga Heirs Roger Hudson, Deputy Solicitor, DOl Dorothy Edwardsen, ICAS Joseph J. Perkins, Jr., Guess & Rudd John Cyr, BPX -" "".. . . 985 1373 ~ BP EXPLORATION BP Exploration (Alaska) Inc. 900 East Benson Boulevard P.O. Box 196612 Anchorage. Alaska 99519-6612 (907) 561·5111 July 29, 1993 Mr. Samuel Demientieff, Superintendent Bureau of Indian Affairs 101 12th Avenue, Box 16 Fairbanks, Alaska 99701 Notification of Niakuk Project Commencement Request to Amend Surface Lease F89-01 Dear Mr. Demientieff: On January 1, 1989, BP Exploration (Alaska) Inc. (formerly Standard Alaska Productiòn Company) entered into a surface lease agreement with Mr. Andrew Oenga for 10 acres of his 40 acre native allotment (F-14632) on Heald Point. The Lease provided authorization for BP to construct production facilities to support development of, and production from, our Niakuk oil accumulation. Pursuant to requirements of Section 1 of the Lease, BP hereby provides notice to the Bureau of Indian Affairs that the first phase of the Niakuk Development Project has been approved and that development will procede on an accelerated schedule during the latter half of 1993. Further pursuant to Section 1, the Lease is converted from a year-to-year basis to a fixed twenty- five year term. In order to make effective use of both the Leased and Unleased Premises and to protect our facilities from erosion, an armored production pad will be constructed at the tip of Heald Point. We have also redesigned and relocated our pipelines to the east side of the access road. Consequently, pursuant to Section 11 of the Lease, BP hereby requests that the Lease be amended so as to increase the size of the Leased Premises from 10 acres to 20 acres effective August 1, 1993. The new Leased Premises are shown on the enclosed general location map. We will provide you with a more detailed exhibit to be attached to the Lease as soon as it becomes available. Rent for the enlarged Leased Premises will be due January 1, 1994 and will be prorated back to the effective date of the Lease amendment. Please indicate your approval of this amendment by signing in the space provided below and returning one original of this letter to the undersigned at our letterhead address. The remaining original is for your records. Barrow Recording District , . . . :'Mr~ Samuel,Dimeintieff July 29. 1993 Page 2 We would appreciate your early attention to this matter as we hope to be in a position to begin gravel placement in early August.. Please contact me at 564- 4841 if you have any questions or if you need any addtional information. Sincerely. þµ Stu Hirsh, CPL Senior Landman The within Lease Amendment is hereby approved. pursuant to the authority delegated by 209 OM 8 dated November 17. 1981. Secretary's Order No. 3150 dated May 11. 1992. as amended March 5. 1993, and 10 BIAM Bulletin 13, dated November 19, 1992, as amended April 8, 1993, and the Addendum to 10 BIAM 3, dated January 17, 1989. //~~~ <f-'þ -~';' S~~~ Demientieff, ~~~tendent Date Bureau of Indian Affairs Fairbanks. Agency ~, , ;!;~ C.: to '-..;'J -~ <.D c.:.:r!"'l - -I ~-:2> -., CO ,-,-, ::.: ;'T' . -, '0, w Ul ¿a 101:0 -'1 , UJj"I' ::.., :=;; .... rr: r.-J r~ê :::-:::..':) "':::;.:,;¡ >~... " ;::.7y. -..I. 0=::: :r .. "111 W "'1> ~~o ::.!-" N " -.J g;;: . ~ .. . W 3j N -, VI r:'ï ;:;;¡ Return to: Arctic Slope Native Association Realty Office 600 University Avenue Fairbanks, Alaska 99709 .. . , ." 985 13 73 PRUDHOE SA y ~~ . -... '/16.' ·lJ~· -¿~, ~¿.~-.. Acei'll ROAD SAG A VANIRKTOK RIVER . TOTA' .AJ£4 01' m~TT TOTAL n.t TCHI1I AR£4 f'£ffCÐiTAU 01' ~TT :J'.II ACo'IEI .." ACIIE. U.rzz -...----. ..- , , .-.. . .. GIVENS LAW FIRM . P.O. Box 400,912 E. Sherman Ave. Coeur d'Alene, ID 83816-0400 phone (208) 676-1310 fax (208) 676-1296 raygivens@givenslaw.com www.givenslaw.com April 18,2006 Bill VanDyke, Acting Director Director/Administration Alaska Department of Natural Resources 550 West ih Avenue, Suite 800 Anchorage, Alaska 99501-3560 Re: Prudhoe Bay Unit - Objection to Application for Raven P.A. Dear Mr. Van Dyke: I write to you as the attorney of the Heirs of Andrew Oenga (Oenga Heirs) regarding BIA Allotment # F-14632 and BIA Lease # F-89-01. The purpose of this letter is to memorialize the Oenga Heirs' objection to the current establishment of a Raven Participation Area (p.A). The Oenga Heirs are the owners ofBIA Allotment # F-14632, Parcel B - Heald Point, on the northeast edge of Prudhoe Bay. That allotment is subject to Lease # F-89-01. The lessor interests are now held by the Oenga Heirs, as owner, and the United States, as their trustee. The lessee interests are currently held by BP Exploration (Alaska) Inc. (BPX) as successor to the original lessee. The allotment was originally leased for use as a pipeline corridor. BPX has since constructed an oil production facility on the Heald Pont property. The OengaHeirs understand that 1) BPX is asking the Alaska Oil & Gas Conservation Commission (Commission) to adopt Pool Rules for the Raven oil pool, 2) that BPX is asking the Alaska Department of Natural Resources (Department) to designate a Raven P.A. for the development of the Raven oil pool, and 3) BPX is proposing to use this Heald Point facility as the production facility thru which oil from the Raven P .A. will be produced. In response, tlle Oenga Heirs have objected to the Commission's establishment of Pool Rules for the Raven Oil Pool. See Objection (Request for Postponement) To' Establishment of Pool Rules - Raven Oil Pool, and letter of April 12, 2006 replying to BPX's response. The attached filings with the Commission are incorporated herein. The Oenga Heirs herein obj ect to the current establishment of a Raven P .A. ...,. .,. . . Lease # F..89-0 1 does not authorize BPX to produce oil or gas from the Raven Pool thru the Heald Point property. A copy of the original lease and the fIrst letter amendment/notice regarding the lease are attached and incorporated herein. They have previously been provided to the Commission. While the lease grants broad uses of the Heald Point property, it only allows those uses to be made regarding the "Niakuk Project". Original lease p. 1 (last sentence), p. 2 (fIrst sentence ofthird paragraph, and "Nialmk Development Project" letter amendment title. This "Nialmk Project" or "Niakuk Development Project" was more specifIcally referred to by BPX as: This Lease provides authorization for BP to construct production facilities to support development of and production from our Nialmk oil accumulation. July 29, 1993 Lease letter amendment/notice (emphasis added). This explanation of the limited scope of the lease, in BPX's own words, makes clear that this lease is not applicable to any other oil accumulation, such as the Raven Pool. For the reasons stated herein, and for those contained in the fIlings with the Commission, the Oenga Heirs object to the current establishment of a Raven Participation Area (P.A.). The Oenga Heirs are not opposed to the eventual development of the Raven Oil Pool or to the eventual establishment of a Raven P.A. However, this would only be appropriate once the lease for the surface rights of Heald Point, upon which the production facility is located, is amended to authorize such use ofthe property. According to the Oenga Heirs' estimates, over $1.5 billion worth of oil from the Niakuk P.A. and the West Niakuk P .A. has been produced thru the Heald Point production pad since its construction twelve years ago. During this period, the Oenga Heirs have been paid on average less than $90,000/year for the use of surface rights on which the production facility is constructed. This gross inequity should not be compounded by allowing yet another unauthorized P.A. to be produced thru the Heald Point facility contrary to the existing lease. The Qenga Heirs respectfully request that the establishment of any Raven P .Á. be deferred until BPX can produce concurrence from all parties with an ownership interest in the Heald Point property that there is the requisite legal authority to produce oil and gas from the Raven Oil Pool thru the Heald Point production facility . The Department certainly has a valid interest in assuring itself that State·oil/gas leases have a legally valid means of production from State leases. The relief requested would be in furtherance of that legitimate Department function in this contentious matter. It would also encourage all parties to reach a fair and reasonable agreement with respect to the production from the Raven Pool thru the Heald Point facility. .. þ> ). ","'~ . . Thank you for your consideration. RCG:jr Enclosure Sincerely, ¡Jr''''./4~ Raymond C. Givens Idaho State Bar # 1695 Washington State Bar # 36029 raygivens@givenslaw.com On Behalf ofOenga Heirs cc: Oenga Heirs Roger Hudson, Deputy Solicitor, DOl Dorothy Edwardsen, lCAS Joseph 1. Perkins, Guess & Rudd John Cyr, BPX . -" . .. GIVENS LAW FIRM . P.O. Box 4-00,912 E. Sherman Ave. Coeur d'Alene, ID 83816-04-00 phone (208) 676-1310 fax (208) 676-1296 raygivens@givenslaw.com www.givenslaw.com April 18,2006 Bill VanDyke, Acting Director Director/Administration Alaska Department of Natural Resources 550 West ih Avenue, Suite 800 Anchorage, Alaska 99501-3560 Re: Prudhoe Bay Unit - Objection to Application for Consolidation ofNiakuk P.A. and West Nialcuk P.A. and Request for Other Action Dear Mr. Van Dyke: I write to you as the attorney of the Heirs of Andrew Oenga (Oenga Heirs) regarding BIA Allotment # F-14632. The purpose of this letter is to memorialize the Oenga Heirs' objection to the contemplated consolidation of the Niakuk P.A. and West Niakuk P.A., currently before the Alaska Department of Natural Resources (Department), and to suggest additional relief. The Oenga Heirs are the owners ofBIA Allotment # F-14632, Parcel B - Heald Point, on the northeast edge of Prudhoe Bay. That allotment is subject to Lease # F-89-01. The lessor interests are now held by the Oenga Heirs, as owner, and the United States, as their trustee. The lessee interests are currently held by BP Exploration (Alaska) Inc. (BPX) as successor to the original lessee. The allotment was originally leased for use as a pipeline corridor. BPX has since constructed an oil production facility on tl1e Heald Pont property. Oil and natural gas has been produced thru this Heald Point facility from the Niakuk P .A. for some time. Recently the Oenga Heirs learned that oil and gas from the West Nialcuk P.A. was also being produced tl1fU Heald Point. The Oenga Heirs have now learned that BPX is requesting the Department to consolidate the Niakuk P.A. and the West Niakuk P .A. into a single Participation Area. The difficulty is that the Lease does not authorize the use of the Heald Point property for the production of oil from any P .A. other than Nialcuk. A copy of the original Lease and the fIrst letter amendment/notice regarding the Lease are attached and incorporated herein. They have recently been provided to the Alaska Oil and Gas Commission (Commission) regardingal1 objection to currently establish Raven Pool Rules. While the Lease grants broad uses of the Heald Point property, it only allows ..r . . those uses to be made regarding the "Niakuk Project". Original Lease p. 1 (last sentence), p. 2 (fIrst sentence of third paragraph) (emphasis added), and "Niakuk Development Project" letter amendment title. This "Nialcuk Project" or "Nialcuk Development Project" was more specifIcally refened to by BPX as: TIns Lease provides authorization for BP to construct production facilities to support development of and production from our Nial(uk oil accumulation. July 29, 1993 Lease letter amendment/notice (emphasis added). Tbis explanation of the limited scope of the Lease, in BPX's own words, makes clear that tlús Lease is not applicable to any other participation area, such as West Nialcuk. The Oenga Heirs raised this concern with BPX before Christmas (4 months ago). A Tolling Agreement, which expires the end of Jlme, 2006, was entered into between BPX, the United States and the Oenga Heirs. The United States invited, thru BPX, the West Nialaù( interest holders to participate in the Tolling Agreement. Unfortwlately, a creditable and meaningful response has not been provided. Consequently, the Oenga Heirs have been forced to send the attached Notice To Immediately Halt Trespass to BPX and each of the other West Niakuk participating companies. See attached Notice which is incorporated herein. Because Lease # F-89-01 does not authorize production from the West Nialcuk thru the Heald Point facility, the Oellga Heirs generally ask that the Department: 1) talœ any and all action within its jurisdiction to halt the production of oil and gas from West Niakuk P.A. tlrru Heald Point until this trespass matter is resolved, and 2) delay the consolidation ofthe Niakuk P.A. and West Nialcuk P.A. until this matter is resolved. Resolution of this matter could be established when all parties with an interest in Heald Point, its Lease, production facility and use of that facility, present the Department with their joint concurrence that oil and gas from West Nialcuk can be produced thru Heald Point and the facility constructed thereon. The above action by the Department could provide a meaningfuLfrrst step in preventing this matter from becoming embroiled in litigation and controversy for the foreseeable future. An additional historical fact supports the above requests. In 1993, before West Nial(uk oil began being produced thru the Heald Point facility, ARCO, predecessor in interest of ConocoPhillips as one of the State lease holders of the West Niakuk leases, approached the BIA requesting to lease a portion of the Oenga's Heald Point Allotment. See attached BIA telephone log. Unfortunately, this inquiry did not result in ARCO leasing a portion . . ofthe Oengas' Heald Point property for a West Niakuk production facility. The Oenga Heirs' understanding is that BPX thereafter conveyed to ARCO two or three of its Heald Point directional wells for use in West Nial(uk. TIns occurred at approximately the same time Exxon (the other West Niakuk leaseholder) removed its objection to the Commission establishing the Nialcuk Pool Rules. According to the Oenga Heirs' estimates, over $1.5 billion worth of oil from the Niakuk P.A. and the West Niakuk P.A. has been produced tlml the Heald Point production pad since its construction twelve years ago. During tIns period, the Oenga Heirs have been paid on average less than $90,000/year for the use of their property in the production of oil and gas from the Niahù( P.A. and nothing for the use of their property in the production of oil and gas from the West Nialuù( P.A. This gross inequity should not be allowed to continue. Oil and gas fromthe West Nialcuk P.A. should not be allowed to be produced thru the Heald Point facility contrary to the existing Lease. TI1e Oenga Heirs wish to malœ clear that they do not object to the eventual production of oil and gas from West Nialcuk P.A. thru the Heald Point facility. Similarly they do not object to the eventual consolidation of the Nialcuk P.A. and the West Niakuk P.A. These should occur, however, only after the Heald Point Lease is amended to appropriately reflect the additional use that is being made of the Oenga property and appropriate rental values for that use. Until then, it would be inappropriate to allow continued production of oil and gas from the West Nialcuk P.A. thru Heald Point. It could also be inapproppate to furtl1er.compli~:;I.t~jmllt1:ers l?y consolidating Nialcuk P .A. and West Niakuk P.A. when one is subjectto a trespass claim and there is the potential for judicial action. All decisions made regarding this property will come under the scrutiny of the courts and the public in general unless the matter is now resolved. Specifically, the Oenga Heirs request that the Department take the following action: 1) talœ any and all actions within its jurisdiction to halt the production of oil and gas from West Nialaù( P.A. thru Heald Point until BPX, as lessee ofBIA Lease #F- 89-01, and the other West Nialmk interest holders can provide the Department with concurrence from all parties with an ownerslnp interest in the Heald Point property that there exists the requisite legal authority to produce oil and gas from West Nial(uk thru the Heald Point facility. 2) delay consolidatio~ of the Niakuk P.Ä. and the West Niakuk P.A. lU1til the above concurrence is provided. The Department certainly has a legitimate interest in assuring itselfthat State leaseholders have a legally valid means of producing oil and gas from State leases. TI1e relief requested would be in furtherance of that legitimate function in this contentious matter. It would also encourage all parties to reach a fair and reasonable agreement with respect to the production from the West Niakuk thru the Heald Point facility. ..~- \ .. . . Thank you for your consideration. Sincerely, ~ Ra ond C. Givens Idaho State Bar # 1695 Washington State Bar # 36029 raygivens@givenslaw.com On Behalf of the Oenga Heirs RCG:jr Enclosure cc: Oenga Heirs Roger Hudson, Deputy Solicitor, DOl Dorothy Edwardsen, ICAS Joseph 1. Perkins, Guess & Rudd Jolm Cyr, BPX *1r¡ . .. GIVENS LAW FIRM . P.O. Box 400,912 E. Sherman Ave. Coeur d'Alene, ID 83816-0400 phone (z08) 676-1310 fax (z08) 676-1296 raygivens@givenslaw.com www.givenslaw.com April 18, 2006 BP Exploration (Alaska) Inc. P.O. Box 196612 Anchorage, Alaska 99519-6612 Attn: Legal Counsel Re: Notice to Halt Trespass - West Niakuk P.A., Prudhoe Bay Unit Dear Counsel: I write to you as the attorney of the Heirs of Andrew Oenga (Oenga Heirs) regarding BIA Allotment # F-14632 and BIA Lease # F-89-01. Attached to this letter is a Notice to Immediately Halt Trespass. It is being sent to BP Exploration (Alaska) Inc. by this copy to you, and by a copy being sent to CT Corporation System, BP Exploration's Registered Agent for Alaska. Similar Notices are simultaneously being sent to all companies with an interest in the West Niakuk P.A., Prudhoe Bay, Alaska. These include ConocoPhillips Alaska, Inc., Chevron Texaco, ExxonMobil, and Forest Oil. The Oenga Heirs recently became aware oil from West Niakuk: was being produced thru Heald Point. The Notice declares tIns to be a trespass. By this Notice, the Oenga Heirs demand that tIns trespass be halted immediately. Production of West Niakuk oil and gas thru the Heald Point facility constitutes a trespass because the Lease and amendments negotiated by BP Exploration (Alaska) Inc. (BPX) and its predecessor only allows production of oil and gas thru the Heald Point facility from Niakuk, not West Niakuk. The Lease and amendment were negotiated by the Department of the Interior, Bureau of Indian Affairs on behalf of Mr. Andrew Oenga (now deceased). At the time, Mr. Oenga, an Inupiat, was the holder ofBIA Allotment # F-14632, in his 70's, and spoke no English. Copies of the Lease and relevant amendment are attached. Although the apparent intent at the time of the original lease was to use the property as only a pipeline corridor, that was later changed to a production facility. See attachments to original Lease and fIrst amendment. The type of uses that may be made by BPX are broad (Original Lease Art.l0,11), but they are geographically limited to the "Nialcuk . . Proiect," Original Lease p. 1, 2, and the "Niakuk Development Project." first Amendment and Notice letter dated July 29, 1993. This is further defined by the July 29, 1993 amendment letter: The Lease provided authorization for BP to construct production facilities to support development of, and production from, our Niakuk oil accumulation. Id (emphasis added). "[O]ur Niakuk oil accumulation" would be BPX's original Niakuk State lease, now lmown as Niakuk P.A., not the West Niakuk lease then held by Exxon and ARCO, now known as the West Niakuk P.A. The Oenga Heirs regret having to take the action set out in tins Notice, but efforts to resolve this matter through discussions with BPX, as operator, have not been productive. As the Notice makes clear, the Oenga Heirs are prepared to seek judicial relief if necessary, but would prefer to modify the original lease, so long as a reasonable accommodation can be reached. A Tolling Agreement has been entered into between BPX, the United States, and the Oenga Heirs that runs through tIns June. The United States requested BPX contact your company and the other companies now involved in West Niakuk to join in the Tolling Agreement, but BPX chose to respond simply by saying they had notified you. See attached letters. Consequently, the Oenga Heirs see little choice but to take this action. As is clear from the Notice, production of West Niakuk oil thru Heald Point must halt immediately. However, ifBP Exploration (Alaska) Inc. and the other companies involved in West Niakuk wish to resolve tIns matter short of litigation, please contact this office. A reasonable rental value of surface rights such as the Oenga's would be a 2 ~% royalty or a similarly valued price/barrel "thru-put" that reflects current oil prices. See Flying Diamond Oil Corp. v. Newton Sheep Co., 776 P.2d 618,620-621,629 (Utah 1989) (2 \12% royalty payment plus other consideration for lease of surface right - oil). Any resolution would, of course, have to account for both past and future production of West Niakuk oil and gas tlml Heald Point. On a related matter, and because ofBP Exploration (Alaska) Inc.'s interest in the Niakuk P.A., a courtesy copy of the Oenga Heir's recent filings with the Alaska Oil and Gas Conservation Commission and the Alaska Department of Natural Resources are also enclosed. . . . . Thank YOll for your consideration. Sincerely, jJ~--!$~- - Raymond C. Givens Idaho State Bar # 1695 Washington State Bar # 36029 raygi vens@givenslaw.com On Behalf of Oenga Heirs RCG:jr Enclosure cc: Oenga Heirs Alaska Oil and Gas Commission Alaska Department of Natural Resources - Oil . .. GIVENS LAW FrroAt . P.O. Box 4°0,912 E. Sherman Ave. Coeur d'Alene, ID 83816-0400 phone (208) 676-1310 fax (208) 676-1296 raygivens@givenslaw.com www.givenslaw.com April 18, 2006 Chevron Texaco Chevron USA, Inc. 6001 Bollinger Canyon Road San Ramon, California 94583 Attn: Legal Counsel Re: Notice to Halt Trespass - West Niakuk P.A., Prudhoe Bay Unit Dear Counsel: I write to you as the attorney of the Heirs of Andrew Oenga (Oenga Heirs) regarding BIA Allotment # F-14632 and BIA Lease # F-89-01. Attached to this letter is a Notice to Immediately Halt Trespass. It is being sent to Chevron Texaco by this copy to you. The Alaska Secretary of State has informed us that no Registered Agent is listed in the State of Alaska for Chevron Texaco. Similar Notices are simultaneously being sent to all companies with an interest in the West Niakuk P.A., Prudhoe Bay, Alaska. These include ConocoPhillips Alaska, Inc., ExxonMobil Alaska Production, Inc., BP Exploration (Alaska) Inc., and Forest Oil. The Oenga Heirs recently became aware oil from West Niakuk was being produced thru Heald Point. The Notice declares this to be a trespass. By this Notice, the Oenga Heirs demand that tIns trespass be halted immediately. Production of West Niakuk oil and gas thru the Heald Point facility constitutes a trespass because the Lease and amendments negotiated by BP Exploration (Alaska) Inc. (BPX) and its predecessor only allows production of oil and gas thru tlle Heald Point facility from Nialcuk, not West Nialcuk. The Lease and amendment were negotiated by the Department of the Interior, Bureau of Indian Affairs on behalf of Mr. Andrew Oenga (now deceased). At the time, Mr. Oenga, an Inupiat, was the holder of BIA Allotment # F-14632, in his 70's, and spoke no English. Copies of the Lease and relevant amendment are attached. Although the apparent intent at the time of the original lease was to use the propeliy as only a pipeline corridor, that was later changed to a production facility. See attachments to original Lease and first anlendment. The type of uses that may be made by BPX are . . broad (Original Lease Art. 1 0, 11), but they are geographically limited to the "Niakuk Proiect," Original Lease p. 1,2, and the "Niakuk Development Project." first Amendment and Notice letter dated July 29, 1993. This is further defined by the July 29, 1993 amendment letter: The Lease provided authorization for BP to construct production facilities to support development of, and production from, our Niakuk oil accumulation. Id. (emphasis added). " [O]ur Niakuk oil accumulation" would be BPX's original Niakuk State lease, now known as Niakuk P.A., not the West Niakuk lease then held by Exxon and ARCO, now known as the West Niakuk P.A. The Oenga Heirs regret having to take the action set out in tlns Notice, but efforts to resolve this matter through discussions with BPX, as operator, have not been productive. As the Notice makes clear, the Oenga Heirs are prepared to seek judicial relief if necessary, but would prefer to modify the original lease, so long as a reasonable accommodation can be reached. A Tolling Agreement has been entered into between BPX, the United States, and the Oenga Heirs that runs through this June. The United States requested BPX contact your company and the other companies now involved in West Niakuk to join in the Tolling Agreement, but BPX chose to respond simply by saying they had notified you. See attached letters. Consequently, the Oenga Heirs see little choice but to take this action. As is clear from the Notice, production of West Niakuk oil tlTIU Heald Point must halt Î1mnediate1y. However, if Chevron Texaco and the other companies involved in West Niakuk wish to resolve this matter short of litigation, please contact this office. A reasonable rental value of surface rights such as the Oenga's would be a 2 ~% royalty or a similarly valued price/barrel "thru-put" that reflects current oil prices. See Flying Diamond Oil Corp. v. Newton Sheep Co., 776 P.2d 618,620-621,629 (Utah 1989) (2 ~% royalty payment plus other consideration for lease of surface right - oil). Any resolution would, of course, have to account for both past and future production of West Nialmk oil and gas thru Heald Point. On a related matter, and because of Chevron Texaco's interest in the Niakuk P .A., a courtesy copy of the Oenga Heir's recent filings with the Alaska Oil and Gas Conservation Commission and tlle Alaska Department of Natural Resources are also enclosed. . . Thank you for your consideration. Sincerely, &fi~ Idaho State Bar # 1695 Washington State Bar # 36029 ra ygivens@givenslaw.com On Behalf of Oenga Heirs RCG:jr Enclosure cc: Oenga Heirs Alaska Oil and Gas Commission Alaska Department of Natural Resources - Oil . ... GIVENS LAW FIRM . P.O. Box 400, 912E. Sherman Ave. Coeur d'Alene, ID 83816-0400 phone (208) 676-1310 fax (208) 676-1296 raygivens@givenslaw.com www.givenslaw.com April 18, 2006 ConocoPhillips Alaska, Inc. 600 N. Dairy Ashford ML 3007 Houston, Texas 77079 Attn: Legal Counsel Re: Notice to Halt Trespass - West Niakuk P.A., Prudhoe Bay Unit Dear Counsel: I write to you as the attorney of the Heirs of Andrew Oenga (Oenga Heirs) regarding BIA Allotment # F-14632 and BIA Lease # F-89-01. Attached to this letter is a Notice to Immediately Halt Trespass. It is being sent to ConocoPhillips Alaska, Inc. by this copy to you, and by a copy being sent to Corporation Service Company, ConocoPhillips' Registered Agent for Alaska. Similar Notices are simultaneously being sent to all companies with an interest in the West Niakuk P.A., Prudhoe Bay, Alaska. These include ExxonMobil Alaska Production, Inc., Chevron Texaco, BP Exploration (Alaska) Inc., and Forest Oil. The Oenga Heirs recently became aware oil from West Niakuk was being produced thru Heald Point. The Notice declares this to be a trespass. By this Notice, the Oenga Heirs demand that this trespass be halted immediately. Production of West Niakuk oil and gas thru the Heald Point facility constitutes a trespass because the Lease and amendments negotiated by BP Exploration (Alaska) Inc. (BPX) and its predecessor only allows production of oil and gas thru the Heald Point facility from Niakuk, not West Niakuk. The Lease and amendment were negotiated by the Department of the Interior, Bureau of Indian Affairs on behalf of Mr. Andrew Oenga (now deceased). At the time, Mr. Oenga, an Inupiat, was the holder ofBIA Allotment # F-14632, in his 70's, and spoke no English. Copies of the Lease and relevant amendment are attached. Although the apparent intent at the time of the original lease was to use the property as only a pipeline corridor, that was later changed to a production facility. See attachments to original Lease and first amendment. The type of uses that may be made by BPX are broad (Original Lease Art. I 0,11), but they are geographically limited to the "Niakuk . . Project," Original Lease p. 1,2, and the "Niakuk Development Project." first Amendment and Notice letter dated July 29, 1993. This is further defined by the July 29, 1993 amendment letter: The Lease provided authorization for BP to construct production facilities to support development of, and production from, our Niakuk oil accumulation. Jd. (emphasis added). "[O]nr Niakuk oil accumulation" would be BPX's original Niakuk State lease, now known as Niakuk P.A., not the West Niakuk lease then held by Exxon and ARCO, now known as the West Niakuk P.A. The Oenga Heirs regret having to take the action set out in this Notice, but efforts to resolve this matter through discussions with BPX, as operator, have not been productive. As the Notice makes clear, the Oenga Heirs are prepared to seek judicial relief if necessary, but would prefer to modify the original lease, so long as a reasonable accommodation can be. reached. A Tolling Agreement has been entered into between BPX, the United States, and the Oenga Heirs that runs through this June. The United States requested BPX contact your company and the other companies now involved in West Niakuk. to join in the Tolling Agreement, but BPX chose to respond simply by saying they had notified you. See attached letters. Consequently, the Oenga Heirs see little choice but to take this action. As is clear from the Notice, production of West Niakuk oil thru Heald Point must halt immediately. However, ifConocoPhillips and the other companies involved in West Niakuk wish to resolve this matter short of litigation, please contact this office. A reasonable rental value of surface rights such as the Oenga's would be a 2 Y:z% royalty or a similarly valued price/barrel "thru-put" that reflects current oil prices. See Flying Diamond Oil Corp. v. Newton Sheep Co., 776 P.2d 618, 620-621, 629 (Utah 1989) (2 Y:z% royalty payment plus other consideration for lease of surface right - oil). Any resolution would, of course, have to account for both past and future production of West Niakuk oil and gas thru Heald Point. On a related matter, and because of Co no co Phillip's interest in the Niakuk P.A., a cOUliesy copy ofthe Oenga Heir's recent filings with the Alaska Oil and Gas Conservation Commission and the Alaska Department of Natural Resources are also enclosed. . , . . . . Thank you for your consideration. Sincerely, f:t;;!!~ Idaho State Bar # 1695 Washington State Bar # 36029 ra ygivens@givenslaw.com On Behalf of Oenga Heirs RCG:jr Enclosure cc: Oenga Heirs Alaska Oil and Gas Commission Alaska Department of Natural Resources - Oil . .. GIVENS LAW FIRM . P.O. Box 400,912 E. Sherman Ave. Coeur ¿'Alene, ID 83816-0400 phone (208) 676-1310 fax (208) 676-1296 raygivens@givenslaw.com www.givenslaw.com April 18, 2006 ExxonMobil Alaska Production, Inc. 800 Bell Street Houston, Texas 77002 Attn: Legal Counsel Re: Notice to Halt Trespass - West Niakuk P.A., Prudhoe Bay Unit Dear Counsel: I write to you as the attorney of the Heirs of Andrew Oenga (Oenga Heirs) regarding BIA Allotment # F-14632 and BIA Lease # F-89-01. Attached to this letter is a Notice to Immediately Halt Trespass. It is being sent to Exxol1Mobil by this copy to you, and by a copy being sent to Prentice-Hall Corporation, Inc., ExxonMobil's Registered Agent for Alaska. Similar Notices are simultaneously being sent to all companies with an interest in the West Niakuk P.A., Prudhoe Bay, Alaska. These include ConocoPhillips Alaska, Inc., Chevron Texaco, BP Exploration (Alaska) Inc., and Forest Oil. The Oenga Heirs recently became aware oil from West Niakuk was being produced thru Heald Point. The Notice declares this to be a trespass. By tIns Notice, the Oenga Heirs demand that this trespass be halted immediately. Production of West Niakuk oil and gas thru the Heald Point facility constitutes a trespass because the Lease and amendments negotiated by BP Exploration (Alaska) Inc. (BPX) and its predecessor only allows production of oil and gas thru the Heald Point facility from Nialmk, not West Niakuk. The Lease and amendment were negotiated by the Department of the Interior, Bureau of Indian Affairs on behalf of Mr. Andrew Oenga (now deceased). At the time, Mr. Oenga, an Inupiat, was the holder ofBIA Allotment # F-14632, in his 70's, and spoke no English. Copies of the Lease and relevant amendment are attached. Although the apparent intent at the time of the original lease was to use the property as only a pipeline corridor, that was later changed to a production facility. See attaclnnents to original Lease and fIrst an1endment. The type of uses that may be made by BPX are broad (Original Lease Art.l0,11), but they arè geographically limited to the "Nialmk . . Proiect," Original Lease p. 1, 2, and the "Niakuk Development Project." first Amendment and Notice letter dated July 29, 1993. This is further defined by the July 29, 1993 amendment letter: The Lease provided authorization for BP to construct production facilities to support development of, and production from, our Niakuk oil accumulation. Id. (emphasis added). "[O]ur Niakuk oil accumulation" would be BPX's original Niakuk State lease, now lmown as Niakuk P.A., not the West Niakuk lease then held by Exxon and ARCO, now lmown as the West Niakuk P .A. The Oenga Heirs regret having to take the action set out in tIns Notice, but efforts to resolve this matter through discussions with BPX, as operator, have not been productive. As the Notice makes clear, the Oenga Heirs are prepared to seek judicial relief if necessary, but would prefer to modify the original lease, so long as a reasonable accommodation can be reached. A Tolling Agreement has been entered into between BPX, the United States, and the Oenga Heirs that runs through this June. The United States requested BPX contact your company and the other companies now involved in West Niakuk to join in the Tolling Agreement, but BPX chose to respond simply by saying they had notified you. See attached letters. Consequently, the Oenga Heirs see little choice but to take this action. As is clear from the Notice, production of West Niakuk oil thru Heald Point must halt immediately. However, ifExxonMobil and the other companies involved in West Niakuk wish to resolve this matter short oflitigation, please contact this office. A reasonable rental value of surface rights such as the Oenga's would be a 2 :/z% royalty or a similarly valued price/barrel "thru-put" that reflects current oil prices. See Flying Diamond Oil Corp. v. Newton Sheep Co., 776 P.2d 618,620-621,629 (Utah 1989) (2 :/z% royalty payment plus other consideration for lease of surface right - oil). Any resolution would, of course, have to account for both past and future production of West Niakuk oil and gas thru Heald Point. On a related matter, and because of ExxonMobil's interest in the Niakuk P.A., a courtesy copy of the Oenga Heir's recent filings with the Alaska Oil and Gas Conservation Commission and the Alaska Department of Natural Resources are also enclosed. . . Thank you for your consideration. Sincerely, Ray ond C. Givens Idaho State Bar # 1695 Washington State Bar # 36029 raygivens@givenslaw.com On Behalf of Oenga Heirs RCG:jr Enclosure cc: Oenga Heirs Alaska Oil and Gas Commission Alaska Department of Natural Resources - Oil . ... GIVENS LAW FIRM . P.O. Box 4-00,912 E. Sherman Ave. Coeur d'Alene, ID 83816-04-00 phone (208) 676-1310 fax (208) 676-1296 raygivens@givenslaw.com www.givenslaw.com April 18, 2006 Forest Oil 707 1 ih Street, Suite 3600 Denver, Colorado 80202 Attn: Legal Counsel Re: Notice to Halt Trespass - West Niakuk P.A., Prudhoe Bay Unit Dear Counsel: I write to you as the attorney of the Heirs of Andrew Oenga (Oenga Heirs) regarding BIA Allotment # F-14632 and BIA Lease # F-89-01. Attached to this letter is a Notice to Immediately Halt Trespass. It is being sent to Forest Oil by this copy to you, and by a copy being sent to Corporation Service Company, Forest Oil's Registered Agent for Alaska. Similar Notices are simultaneously being sent to all companies with an interest in the West Niakuk P .A., Prudhoe Bay, Alaska. These include ConocoPhillips Alaska, Inc., Chevron Texaco, BP Exploration (Alaska) Inc., and ExxonMobil Alaska Production, Inc. The Oenga Heirs recently became aware oil from West Niakuk: was being produced thru Heald Point. The Notice declares this to be a trespass. By this Notice, the Oenga Heirs demand that this trespass be halted immediately. Production of West Niakuk oil and gas thru the Heald Point facility constitutes a trespass because the Lease and amendments negotiated by BP Exploration (Alaska) Inc. (BPX) and its predecessor only allows production of oil and gas thru the Heald Point facility from Niakuk, not West Niakulc The Lease and amendment were negotiated by the Department of the Interior, Bureau of Indian Affairs on behalf of Mr. Andrew Oenga (now deceased). At the time, Mr. Oenga, an Inupiat, was the holder of BIA Allotment # F-14632, in his 70's, and spoke no English. Copies of the Lease and relevant amendment are attached. Although the apparent intent at the time of the original lease was to use the propeliy as only a pipeline corridor, that was later changed to a production facility. See attachments to original Lease and fIrst amendment. The type of uses that may be made by BPX are broad (Original Lease Art.10,11), but they are geographically limited to the "Niakulc . . Project," Original Lease p. 1,2, and the "Niakuk Development Project." first Amendment and Notice letter dated July 29, 1993. This is further defined by the July 29, 1993 amendment letter: The Lease provided authorization for BP to construct production facilities to support development of, and production from, our Niakuk oil accumulation. Id. (emphasis added). "[O]ur Niakuk oil accumulation" would be BPX's original Niakuk State lease, now known as Niakuk P.A., not the West Niakuk lease then held by Exxon and ARCO, now lmown as the West Niakuk P.A. The Oenga Heirs regret having to take the action set out in this Notice, but efforts to resolve this matter through discussions with BPX, as operator, have not been productive. As the Notice makes clear, the Oenga Heirs are prepared to seek judicial relief if necessary, but would prefer to modify the original lease, so long as a reasonable accOlIDnodation can be reached. A Tolling Agreement has been entered into between BPX, the United States, and the Oenga Heirs that runs through this June. The United States requested BPX contact your company and the other companies now involved in West Nialmk to join in the Tolling Agreement, but BPX chose to respond simply by saying they had notified you. See attached letters. Consequently, the Oenga Heirs see little choice but to take this action. As is clear from the Notice, production of West Niakuk: oil thru Heald Point must halt immediately. However, if Forest Oil and the other companies involved in West Nialmk wish to resolve this matter short of litigation, please contact ti1Ìs office. A reasonable rental value of surface rights such as the Oenga's would be a 2 Y2% royalty or a similarly valued price/barrel "thru-put" that reflects current oil prices. See Flying Diamond Oil Corp. v. Newton Sheep Co., 776 P.2d 618,620-621,629 (Utah 1989) (2 Y2% royalty payment plus other consideration for lease of surface right - oil). Any resolution would, of course, have to account for both past and future production of West Niakuk oil and gas thru Heald Point. On a related matter, and because of Forest Oil's interest in the Nialmk P.A., a courtesy copy of the Oenga Heir's recent filings with the Alaska Oil and Gas Conservation Commission and the Alaska Department of Natural Resources are also enclosed. # . . Thank you for your consideration. Sincerely, ¡J~~ Raymond C. Givens Idaho State Bar # 1695 Washington State Bar # 36029 raygivens@givenslaw.com On Behalf of Oenga Heirs RCG:jr Enclosure cc: Oenga Heirs Alaska Oil and Gas Commission Alaska Department of Natural Resources - Oil #JIo · ... GIVENS LAW FIRM e P.O. Box 400,912 E. Sherman Ave. Coeur d'Alene, ID 83816-0400 phone (208) 676-1310 fax (208) 676-1296 raygivens@givenslaw.com www.givenslaw.com April 12, 2006 Alaska Oil and Gas Conservation Commission 333 W. th Avenue, Suite 100 Anchorage, Alaska 99501-3539 Re: Prudhoe Bay Unit, Raven Oil Pool Pool Rules and Area Injection Order Dear Commissioners: The Heirs of Andrew Oenga have filed an Objection (Request for Postponement) To Establishment Of Pool Rules Raven Oil Pool. On March 30,2006 BP Exploration (Alaska) Inc. (BPX) responded by letter ofMr. Joseph J. Perkins, Jr. of Guess & Rudd. By this letter the Heirs of Andrew Oenga reply. This reply will address each of the numbered paragraphs of BPX's response. ~ # 1 - BPX Position - BPX attached a copy of the original Heald Pt. lease (BIA Lease F- 89-01), asserted it to be in full force and effect and that BPX has fully paid all rents owed under the lease. Oenga Heirs Reply - Attached to this letter is the first amendment to that lease, the July 29, 1993 letter/notice that BPX intended to proceed with the Niakuk Project, acknowledged their intended change of use and exercised their option to lease more land (signed and approved by Oenga Heir trustee, BIA Superintendent). Two other later lease amendments are not applicable to the issues here addressed. Contrary to BPX's assertion, they have not paid all sums due under the lease. That matter is being pursued by the Department of the Interior. ~ # 2 - BPX Position - BPX asserts that the lease grants BPX all of the surface rights it needs to develop the Raven Oil Pool and quotes ~~1 0 and 11 of the original lease. Oenga Heirs Reply - The Oenga Heirs do not dispute the broad uses granted under the lease. However, the lease limits the area of oil/gas development and specific projects for which the leased land can be used. The lease is only for the "Niakuk Project." Original Lease, p. 1 (last sentence), p. 2 (first sentence of 3rd paragraph). This area of allowed use is again referenced in the 1993 letter amendment in the title and in the 2nd paragraph (Niakuk Development Project). e e The specific "oil accumulation" or oil pool to which this lease applied was specifically referred to by BPX as: The Lease provided authorization for BP to construct production facilities to support development of, and production from, our Niakuk oil accumulations. Letter lease amendment/notice dated July 29, 1993, p. 1 (emphasis added). This explanation of the limited scope of the lease, in BPX's own words, makes clear that this lease is not applicable to some other oil accumulation, such as the Raven Pool. ~ # 3 - BPX Position - BPX acknowledges that "[t]he Raven Oil Pool is situated within some of the same lands and leases as the Niakuk Pool" and asserts that the Raven Pool is below the Niakuk Pool, but "within the same basic geologic structure as the Niakuk Pool." BPX Response, p. 2 (emphasis added). Oenga Heirs Reply - By stating that the Raven Oil Pool is within "some of the same lands and leases as the Niakuk Pool", BPX is acknowledging that some of the Raven Pool is outside of the lands and leases of the Niakuk Pool. Since the lease only allows production from the Niakuk Project ("our Niakuk oil accumulation"), this admission alone is grounds for the Commission to delay promulgation of the Raven Pool rules until BPX can demonstrate it has a lawful means of producing oil and gas from the Raven Pool. Furthermore, it is the understanding of the Oenga Heirs that the Niakuk Pool is not in the "same basic geologic structure as the Niakuk PooL" Their understanding is that the Niakuk Pool is in the Kuparuk Formation and the Raven Pool is in the Sag River and Ivishak Formations. As with the "lands and leases" issue above, this different geologic formation of the Raven Pool is also grounds for postponing the adoption of the Raven Pool Rules. ~ # 4 - BPX Position - BPX asserts that the lease grants them "exclusive possession" of the land for oil and gas purposes and the lease should not be considered a lease appurtenant to the land. Even if the lease is considered as only an appurtenant to the land, BPX argues the lease still authorizes BPX to produce oil from the Raven Pool thru its Heald Pt. facility. Oenga Heirs Reply - Regardless of which way the lease is construed, it is still limited in scope to production from the "Niakuk Project" which means "our Niakuk oil accumulation," thus not allowing the production of oil and gas from the Raven Pool. ~ # 4 BPX Position - BPX asserts that the issue of lease adjudication is a matter for the courts or the Secretary of the Interior, not the Commission. Oenga Heirs Reply - The Oenga Heirs fully agree with BPX on this point. The Commission is not being asked to adjudicate the lease. Rather, the Oenga Heirs are simply suggesting that the Commission delay issuance of the Raven Pool Rules until this e e matter is resolved by the parties in the courts. BPX, the United States and the Oenga Heirs have entered into a Tolling Agreement until June 30, 2006 to allow themselves time to resolve lease disputes. Hopefully this dispute can be resolved by the parties in that time period. If not, the matter will likely end up in court. Delaying the issuance of the Raven Pool Rules until this matter is resolved one way or the other will ensure orderly production ofthe Raven Pool and avoid possible disruption because of potential judicial remedies. For the reasons stated above, the Oenga Heirs request that the Commission delay the issuance the Raven Pool Rules until BPX can produce concurrence from all parties with an ownership interest in the Heald Pt. property (Oenga Heirs - owner, United States - trustee, Inupiat Community of the Article Slope - trustee's agent, and BPX) that there is the requisite legal authority to produce oil and gas from the Raven Oil Pool thru the Heald Pt. production facility. Thank you for your consideration. Sincerely, ~t#~ Raymond C. Givens Idaho State Bar # 1695 Washington State Bar # 36029 raygi vens@givenslaw.com RCG:jr Enclosure cc: Oenga Heirs Roger Hudson, Deputy Solicitor, DOl Dorothy Edwardsen, ICAS Joseph J. Perkins, Jr., Guess & Rudd John Cyr, BPX e e 985 1373 BP EXPLORATION BP Explorallon (Alaska) Inc. 900 East Benson Boulevard P.O. Box 196612 Anchorage. Alaska 99519·6612 (907) 561·5111 July 29, 1993 Mr. Samuel Demientieff, Superintendent Bureau of Indian Affairs 101 12th Avenue, Box 16 Fairbanks, Alaska 99701 Notification of Niakuk Project Commencement ReQuest to Amend Surface Lease F89-01 Dear Mr. Demientieff: On January 1, 1989, BP Exploration (Alaska) Inc. (formerly Standard Alaska Productiòn Company) entered into a surface lease agreement with Mr. Andrew Oenga for 10 acres of his 40 acre native allotment (F-14632) on Heald Point. The Lease provided authorization for BP to construct production facilities to support development of, and production from, our Niakuk oil accumulation. Pursuant to requirements of Section 1 of the Lease, BP hereby provides notice to the Bureau of Indian Affairs that the first phase of the Niakuk Development Project has been approved and that development will procede on an accelerated schedule during the latter half of 1993. Further pursuant to Section 1, the Lease is converted from a year-to-year basis to a fixed twenty- five year term. In order to make effective use of both the Leased and Unleased Premises and to protect our facilities from erosion, an armored production pad will be constructed at the tip of Heald Point. We have also redesigned and relocated our pipelines to the east side of the access road. Consequently, pursuant to Section 11 of the Lease, BP hereby requests that the Lease be amended so as to increase the size of the Leased Premises from 10 acres to 20 acres effective August 1, 1993. The new Leased Premises are shown on the enclosed general location map. We will provide you with a more detailed exhibit to be attached to the Lease as soon as it becomes available. Rent for the enlarged Leased Premises will be due January 1, 1994 and will be prorated back to the effective date of the Lease amendment. Please indicate your approval of this amendment by signing in the space provided below and returning one original of this letter to the undersigned at our letterhead address. The remaining original is for your records. Barrow Recording District ., Mr. Samuel.Dimeintieff July 29, 1993 Page 2 e e We would appreciate your early attention to this matter as we hope to be in a position to begin gravel placement in early August.. Please contact me at 564- 4841 if you have any questions or if you need any addtional information. Sincerely, þµ Stu Hirsh, CPL Senior Landman The within Lease Amendment is hereby approved, pursuant to the authority delegated by 209 OM 8 dated November 17, 1981 J Secretary's Order No. 3150 dated May ii, 1992, as amended March 5, 1993, and 10 BIAM Bulletin 13, dated November 19, 1992, as amended April 8, 1993, and the Addendum to 10 BIAM 3, dated January 17, 1989. /l~~- rf- 5 -'7? sfr-'~~ Oemientieff, Su~ ntendent Date Bureau of Indian Affairs Fairbanks, Agency c; :!:~ , ;1.) \..0 -.... <..D ~;~! - -¡ -., (X) r·r~ i..,.-, 'oj U1 ¿~~ Co:) 41l=o I ~:;J ~~~ ... ::-~~.:::¡ <: ::J >;J" -0 ;:;7r:;J --'" 0;::: 3: Ì~f1' W "'rJ> Cf;-.::J ::?]" f\.) ('""') -J n" .-.;: ,.,,?: ..:- W ;;'J N -, en r:'ï ::;:¡ Return to: Arctic Slope Native Association Realty Office 600 University Avenue Fairbanks, Alaska 99709 985 1313 PRUDHOE BAY ~- e 'Jf.t' Ir.J",' '~ ,--- ~ ,,.. "-. ø-:---=~ -~ --. ~~--. SA GA VANIRKTOK RIVER - TO TAt .AR£A 01' f'ffOf'ØfTY TOTAL HATCHD AR£A I'f1ICDtT AU 01' f'ffQOIITY :JI.I. Ac.oIEI .." ACRE. U.TZZ -...----- . . Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501-3539 Phone: (907) 279-1433 Fax: (907) 276-7542 Fax Transmission The information contained in this fax is confidential and/or privileged. This fax is intended to be reviewed initially by only the individual named below. If the reader of this transmittal page is not the intended recipient or a representative of the intended recipient, you are hereby notified that any review, dissemination or copying of this fax or the information contained herein is prohibited. If you have received this fax in error, please immediately notify the sender by telephone and return this fax to the sender at the above address. Thank you. \\l0V~~L\ 1"l¡r,I/0¡\;",.-\:==z'\ .~.~" Date: , ".l 1\.___ j j t j í , .'1 J . ~ - -'0...-->- ~' ")C\\ ~ \ dd ( t -........- , Pages (including cover sheet): To: < \""' \"", \f~\ ". JC' '1 From: Phone #: Subject: Message: (--; ,''-1 ~.,-- - ¡ ~ø' " ..' ,,~~ / (j j",-O I . ¡ " ,-<>, LtO :"'S\' ~ " . Fax#: y I rì 10 ¡ , j¡ \ 1/\ y= .J -I / If you do not receive all the pages or have any problems with this fax, please call for assistance at (907) 793-1223. */'5 . . A.laska Oil and Gas Conservation Commission 333 \-Vest 7th Avenue, Suite 100 Anchorage, AK 99501~3539 Phone: (907) 279-1433 fax: (907) 276-7542 Fax Transmission The information contained in this fax is confidential andíor privileged. This fax is intended to be reviewed initially by only the individual named below. If the reader of this transmittal page is not the intended recipient or a representative of tJ1e intended recipient, you are hereby notified that any review, dissemination or copying of this fax or the information contained herein is prohibited. If you have recejyed this f3X in error, please immediately notify tl¡e sender by telephone and return this fax to the sender at the above address. Thank you. r~. ~_4J ~4l Gr t~ lJ ~ Fax #: :tJ'6-&i(Q -l~qy, 4-S-Dv From: Date: Phone ft.: O~ (J .1'1\ () t Pages (including Subjectt 1 ./ll \ I"\."'W~ (J ÖL r"ðli cover sheet): ~ Message: (f you do not receive all the pages or have any problems with tnls fax, please calf for assistance at (90r) r93~1223. AI,ASIiA OIL AND GAS CONSERVATION COMMISSION April 5, 2006 Sent via Fax and Mail Raymond C. Givens Attorney at Law Givens Law Firm PO Box 400, 912 East Sherman Avenue Coeur d' Alene, ID 83816-0400 Re: Prudhoe Bay Unit, Raven Oil Pool Pool Rules and Area Injection Order Dear Mr. Givens, . FRANK H. MURKOWSKI, GOVERNOR 333 W. 7'" AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 The hearing convened in the above matter on March 30, 2006. As you requested the statement of objection by Tony Delia was read into the record. To allow time for any additional comments you may wish to offer, the Alaska Oil and Gas Conservation Commission ("Commission") will leave the record in this matter open until the close of business Friday April 14, 2006. If the heirs of Andrew Oenga have any additionally information they wish the Commission to consider, please ensure that it is sent to the Commission by the April 14, 2006 deadline. The Commission will make a decision on this application within thirty (30) days after the record has closed. cc: Cammy Taylor, Assistant Attorney General Joseph Perkins, Attorney for BPXA Commissioner Dan Seamount Commissioner Cathy Foerster */4 · e 1 ALASKA OIL AND GAS CONSERVATION COMMISSION 2 Before Commissioners: John K. Norman, Chairman Daniel T. Seamount Cathy Foerster 3 4 In the Matter of the Application of 5 BP EXPLORATION (ALASKA) INCORPORATED request for AREA INJECTION ORDER and 6 POOL RULES for PROPOSED RAVEN OIL POOL, Prudhoe Bay Field 7 8 ALASKA OIL and GAS CONSERVATION COMMISSION Anchorage, Alaska 9 10 March 30, 2006 9:00 o'clock a.m. 11 PUBLIC HEARING 12 BEFORE: John K. Norman, Chairman Daniel T. Seamount, Commissioner Cathy Foerster, Commissioner 13 14 15 16 17 18 19 20 21 22 23 24 25 R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 e e 1 TABLE OF CONTENTS 2 Opening remarks by Chairman Norman Comments by Joe Perkins Testimony by Gary Gustafson 03 05 14 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 e e 1 PRO C E E DIN G S 2 Tape 1 3 0015 4 (On record - 9:00 a.m.) 5 CHAIRMAN NORMAN: Good morning. This is a hearing before 6 the Alaska Oil and Gas Conservation Commission being held on 7 the morning of Thursday, March 30, 2006. The time is 8 approximately 9:05 a.m. The place of the hearing is at the 9 Commission's offices at 333 West Seventh Avenue, Suite 100, 10 Anchorage, Alaska. 11 Present for the Commission on my right is Commissioner Dan 12 Seamount, to my left Commissioner Cathy Forester and I'm John 13 Norman. 14 If any persons are present who may have special needs that 15 would accommodate their ability to participate in these 16 proceedings, if you will see the Commission's special assistant 17 Jody Columbie. Ms. COlumbie, would you hold up your hand, 18 please. And we will do our best to accommodate you whether you 19 have a problem with hearing or access or anything else. 20 The proceedings this morning will be transcribed by R & R 21 Court Reporting and any persons who would wish to receive a 22 copy of the proceedings may do so by seeing Ms. Colombie and 23 she will instruct you how to go about that. 24 I'm going to address an initial matter -- well, let me 25 pause for a moment and see if Commissioner Seamount has R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 3 e e 1 anything at this point that you'd wish to say? 2 COMMISSIONER SEAMOUNT: I have nothing. 3 CHAIRMAN NORMAN: Commissioner Forester? 4 COMMISSIONER FORESTER: Is this a complete list of sign 5 ups or is there an additional, because there's a lot more 6 people in the room than the six that are on this piece of 7 paper? 8 CHAIRMAN NORMAN: Yes. I'm -- if I look and count here 9 and then I count there I would say that we have.. . . . 10 COMMISSIONER FORESTER: Is there another sheet back there 11 for people to sign up (simultaneous speech) . . . . . 12 CHAIRMAN NORMAN: Not everyone has signed in. 13 UNIDENTIFIED VOICE: There were two sheets. 14 CHAIRMAN NORMAN: There are two sheets? 15 UNIDENTIFIED VOICE: Yes. 16 CHAIRMAN NORMAN: Okay, thank you. COMMISSIONER FORESTER: That's all I have. 17 18 CHAIRMAN NORMAN: Thank you, Commissioner. 19 On March 3rd the Commission did receive a hearing request 20 and it was filed by the Givens law firm on behalf of the heirs 21 of Andrew Oenga. I may not be pronouncing that right so I'll 22 spell it, O-e-n-g-a. Pursuant to that by law the Commission 23 when a request is made is obligated to proceed to conduct a 24 hearing. 25 We did subsequently by letter request that Mr. Givens, if R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 4 e e 1 he intended to appear and testify let us know. If any others 2 intended to appear and testify on behalf of the heirs we 3 requested that evidence of their legal authority to speak for 4 the heirs be provided. 5 We have had a communication from the Givens law firm and 6 the communication indicated that an objection would be filed by 7 a Mr. Delia who is one of the heirs. And the communication 8 also requests that that objection be read into the record at 9 the time of the hearing which I will do, but I would first like 10 to inquire of the Applicant if you have anything you'd like to 11 address concerning the status of negotiations with the heirs? 12 Apparently this is a Native allotment. There are certain 13 heirs that are concerned about use of the surface. There's an 14 arrangement that they think is incomplete concerning use of 15 surface facilities. There appear to be issues raised here that 16 are outside the scope of what the Commission would deal with, 17 but I would like to hear from the Applicant on that point. Mr. 18 Perkins. 19 MR. PERKINS: Thank you, Mr. Chairman. 20 CHAIRMAN NORMAN: The Chair recognizes Attorney Joe 21 Perkins who is well known to the Commission. 22 MR. PERKINS: And I'm here on behalf of the Applicant, BP 23 Exploration. And I have prepared some written comments in 24 response to I believe some comments that were received by the 25 Commission two days ago and I'm not exactly sure what the R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 5 e e 1 proper procedure is for providing these, but I can provide an 2 original and three copies at this time. 3 CHAIRMAN NORMAN: That would be appropriate, thank you. 4 We do have two microphones here and it's sometimes a 5 little bit confusing. One of them is for the benefit of 6 creating a transcript and the other is for amplification within 7 the room, so you need to pull them both forward and talk into 8 both microphones. 9 COMMISSIONER FORESTER: Speak out of both sides of your 10 mouth. 11 MR. PERKINS: I'll try to say the same thing when I do so. 12 CHAIRMAN NORMAN: Please go ahead, Mr. Perkins. MR. PERKINS: Thank you. In short BP Exploration believes 13 14 it has all the surface rights it needs under the terms of the 15 1989 lease granted to it by Andrew Oenga and subsequently 16 amended a couple of times by BP and the heirs of Andrew Oenga 17 in each case with the approval of the Secretary of the 18 Interior. 19 In particular, and I'm, sort of, following along with my 20 written comments here, there are two particular provisions of 21 the surface lease which grant to BP all the rights it needs. 22 The first is Paragraph 10 which expressly grants to BP as 23 Lessee the right to use the leased premises for a very long 24 list of oil and gas purposes which we believe the production of 25 the Raven Oil Pool would be included in that list. R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 6 e e 1 Second, in connection -- or under Paragraph 11 of the 2 lease the Lessee has the express authorization and right to 3 construct any and all facilities it needs in connection with 4 the oil and gas purposes for which it has the right to carry 5 out under Paragraph 10. 6 And so we believe that those two clauses together grant to 7 BP the right that it needs to develop this additional pool 8 situated below the Niakuk Pool. 9 And as you mentioned in your opening remarks, Commissioner 10 Norman, we also believe that this is not the forum to resolve 11 any disputes concerning the adequacy or scope of the grant of 12 that surface lease or whether there are any disputes in 13 connection with that. 14 It is a Native allotment. The title remains restricted 15 and, therefore, the matter we believe is in the hands of the 16 Secretary first, Secretary of the Interior. And if the parties 17 are unable to agree about what the lease says and what the 18 terms of the lease mean, than the matter may end up in Federal 19 Court. And we believe that it's the exclusive jurisdiction of 20 the Federal Court if we get to an adjudication. 21 And with that, I think my written comments and the terms 22 of the lease, a complete copy of which is attached, can stand 23 as the comments of BP. 24 CHAIRMAN NORMAN: Okay. Thank you, Mr. Perkins, for that 25 clear and concise statement. Questions, Commissioner Seamount? R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 7 e e 1 COMMISSIONER SEAMOUNT: I have none, Mr. Chairman. 2 CHAIRMAN NORMAN: Commissioner Forester. 3 COMMISSIONER FORESTER: No. 4 CHAIRMAN NORMAN: Mr. Perkins, I didn't see a copy to the 5 Givens law firm here. Had you sent one or do you intend to 6 send a copy of this submission? 7 MR. PERKINS: I do intend to send a copy. As you can see 8 this is dated today and,..... 9 CHAIRMAN NORMAN: Yes. 10 MR. PERKINS: .... .in fact, it was printed about 8:15 so I 11 have not had a chance to send it. 12 CHAIRMAN NORMAN: I understand. So we can though rely upon you to send a copy to the Givens law firm.... . MR. PERKINS: Yes, I will do so. 13 14 15 CHAIRMAN NORMAN: .....of this? 16 A second question, ordinarily there is a BIA certified list of heirs of the Native allotment. They make a determination on the heirs. Is there such a list? Does that 17 18 19 exist? It's a little confusing as to who the real heirs are. 20 MR. PERKINS: I couldn't tell you today who all the heirs 21 might be. What I could tell you is that as of the date of the 22 last amendment to the lease which was in 1995 the heirs as 23 described on that amendment were all the heirs at that time. 24 CHAIRMAN NORMAN: Very well. 25 MR. PERKINS: We have not had occasions or need to R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 8 e e 1 ascertain, you know, whether any of those heirs have passed on 2 and who their heirs might be, but basically for a current list 3 of the heirs if you were to go to the second to the last page 4 of my submittal which is the signature page of the last 5 amendment you would see that there were six heirs at the time, 6 Wallace Oenga, Jenny Oenga, Jenny Oenga, who executed through a 7 conservator, Leroy Oenga, Michael M. Delia and Georgene Shugluk 8 and those were all the heirs as of 1995. 9 CHAIRMAN NORMAN: Very well, I think we understand the 10 Applicant's position then which is that there is an agreement, 11 that agreement is adequate to allow you to proceed and that's 12 your -- that's the position that you're putting forth now. 13 MR. PERKINS: Yes. 14 CHAIRMAN NORMAN: Okay. And do you know if there is legal 15 counsel within the BIA that is also involved in this proceeding 16 representing the heirs? 17 MR. PERKINS: Within the Office of the Regional Solicitor 18 Roger Hudson (ph) has been working in connection with this 19 matter and has been in discussions with BP and the heirs. So 20 I'm not sure of anyone else, but I know that Roger Hudson has 21 been working with the BIA. 22 CHAIRMAN NORMAN: And could we ask then that in addition 23 to Mr. Givens you also send a copy of your submittal here to 24 the BIA? 25 MR. PERKINS: Sure, I will do that. R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 9 e e 1 CHAIRMAN NORMAN: And if you wouldn't mind then if we 2 could get an Affidavit of Service. You need not reattach the 3 entire submittal, but simply someone from your office provide 4 us an Affidavit of Service indicating that this document was 5 sent to Mr. Givens and to the Regional Solicitors Office. 6 MR. PERKINS: I will do so, thank you. 7 CHAIRMAN NORMAN: Okay. I think then that concludes our 8 initial question on that point unless you have something you'd 9 like to add? 10 MR. PERKINS: No, nothing. We may wish to -- I mean, if 11 there's additional testimony we may have something to say, 12 but..... 13 CHAIRMAN NORMAN: Certainly. In compliance with the 14 request made by the Givens law firm, their request is that the 15 -- they would not be able to attend and testify in person, but 16 they asked the objection be read into the record and in 17 accordance with that request I will do so. There was filed 18 with the Commission on the 29th of March, 2006 a document 19 entitled Objection, (Request For Postponement) To Establishment 20 Of Pool Rules, Raven Oil Pool. 21 The heirs of Andrew Oenga, Oenga heirs -- Oenga heirs 22 object or more specifically request the postponement of 23 established of pool rules for the Raven Pool. 24 And, Madam Court Reporter, you do not need to concern 25 yourself with getting this because you will have a copy of this R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 10 e e 1 for the record. I'm merely complying with the request made by 2 the heirs to read it into the Public Meeting, but we will 3 provide you with a copy. 4 (Reading Statement of Objection) 5 The Commission is not in a position to know whether Mr. 6 Delia is, in fact, an heir, but we have complied with the 7 request of Attorney Givens by reading the objection into the 8 record. 9 And, Madam Court Reporter, your note can simply state that 10 the letter of objection -- correction, the Statement of 11 Objection at that point was read into the record and a copy 12 will be attached to the minutes without objection. 13 At this point unless Commissioners Seamount or Forester 14 wish to consider a different approach I think what the 15 Commission will do is reiterate that the Commission has 16 jurisdiction over certain activities. The objection being 17 raised by the heirs identified here appears to raise issues 18 that are outside the jurisdiction of this Commission. And we 19 indicate that so that the heirs will be on notice that the 20 Commission does not at this point observe anything that's been 21 provided to us that would indicate something that we would have 22 authority to act on or that would raise issues that are within 23 the area of oversight of the Commission. 24 The Commission will, however, proceed with today's hearing 25 and then will agree to leave the record open for an additional R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 11 e e 1 two weeks and we will communicate to Mr. Givens that we are 2 going to leave the record open for an additional two weeks and 3 during that period if they wish to submit anything else the 4 commission will receive it as we would do any other public 5 comment. 6 If anything is submitted we will be sure that it is 7 provided to the Applicant BP and if it's something that 8 requires response than we can discuss an adequate time to 9 respond if that should occur. 10 I'll pause here, I want to make sure that Commissioners 11 Seamount and Forester are in agreement with proceeding in that 12 fashion? 13 COMMISSIONER FORESTER: Yes. 14 COMMISSIONER SEAMOUNT: I'm in agreement with that. I 15 would suggest, Mr. Chairman, that you clarify the date on that 16 additional two weeks. 17 CHAIRMAN NORMAN: I have in mind, yes -- and that's a good 18 point. I will go ahead and say I have in mind an actual two 19 weeks which would mean not counting today and then counting 14 20 days from today, but let's put a date certain on that. Let's 21 say that by close -- let's say we will leave the record open 22 until the close of business on Friday, April 14 which is, I 23 believe, one day more than two weeks, but the record will 24 remain open until close of business on Friday, April 14th and 25 following that the Commission will make a decision based upon R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 12 e e 1 the record. 2 COMMISSIONER SEAMOUNT: Mr. Chairman, does that start the 3 30 day clock ticking on April 14th or does the 30 day clock 4 start ticking today? 5 CHAIRMAN NORMAN: The 30 -- well, the time limit, the 6 matter would be ripe for decision when the record closes here. 7 I mean, the matter will be ripe for decision immediately upon 8 closing of the record which would be April 14th. 9 COMMISSIONER SEAMOUNT: Okay, thank you. 10 CHAIRMAN NORMAN: We would like to ask now we have the 11 submissions presented by the Applicant. We would like to 12 request a representative of the Applicant, Mr. Perkins, if you 13 want to speak, to make at least an initial showing or statement 14 so we have spread into the record for someone in the future who 15 may want to read this why we all gathered here today so we 16 would like someone to come forward and summarize. They did not 17 read the application. That's in the record, but we would like 18 a statement from someone on behalf of the Applicant. 19 MR. PERKINS: I think the Applicant would prefer to do 20 that on their own, so..... 21 CHAIRMAN NORMAN: Would you raise your right hand, please? 22 (Oath Administered) 23 MR. GUSTAFSON: I do. 24 CHAIRMAN NORMAN: State your name? 25 MR. GUSTAFSON: Gary Gustafson. R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 13 e e 1 CHAIRMAN NORMAN: And who do you represent? 2 MR. GUSTAFSON: I am the lead negotiator for Greater 3 Prudhoe Bay for BP Exploration (Alaska), Inc. 4 CHAIRMAN NORMAN: And will you be offering testimony as an 5 expert witness or speaking simply for the Applicant? 6 MR. GUSTAFSON: Speaking simply for the Applicant. CHAIRMAN NORMAN: Very well, proceed. 7 8 TESTIMONY BY GARY GUSTAFSON 9 MR. GUSTAFSON: Mr. Chairman, Members of the Commission, I 10 want to make sure that the March 30th, 2006 letter presented by 11 Joe Perkins this morning is entered into the record on behalf 12 of the Applicant. 13 CHAIRMAN NORMAN: It is. 14 MR. GUSTAFSON: Thank you. Our position as Joe evidenced 15 this morning is that we have in our possession a lease between 16 Andrew Oenga and ourselves as are amended and certified by BIA, 17 the Bureau of Indian Affairs, that allows BP to conduct 18 operations which would include production from the Raven Oil 19 Pool. And that concludes my testimony. 20 CHAIRMAN NORMAN: Address the purpose of this application, 21 what exactly is -- what specifically are you requesting from 22 the Commission? What does BP, the Applicant, requesting and 23 describe that, please, in general terms? 24 MR. GUSTAFSON: Yes, sir. On February the 6th, 2006 BP 25 Exploration on behalf of the Prudhoe Working Interest Owners R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 14 e e 1 submitted an application for Pool Rules and an Area Injection 2 Order for the Raven Oil Pool and that is to produce from the 3 Ivishak and Sag River Formations in the Raven Formation. 4 CHAIRMAN NORMAN: Okay. And for purposes, again, of 5 filling out the record the legal description of the area within 6 the -- encompasses by this let me look here and see if we 7 have that in the notice. The legal description is as in the 8 Notice and the area affected by any ruling of the Commission is located in portions of Sections 23, 25, 26 and 36, Township 12 north, range 5 east and Section 29, 30 and 31 Township 12 north, 16 east Umiat Meridian. 9 10 11 12 I'll ask now if -- we don't want you to have to replicate 13 what is in the application unless there is a need to, but I 14 will ask Commissioner Seamount now on the merits of the 15 application do you have any questions? 16 COMMISSIONER SEAMOUNT: I have no questions. I believe 17 the application is ripe -- is complete as far as technical 18 content, complete enough for us to make a decision. 19 CHAIRMAN NORMAN: Okay. Commissioner Forester. 20 COMMISSIONER FORESTER: And I'd add to that, that our 21 technical Staff has informed us that they're very pleased with 22 the quality of the application. Thank you for that, that makes 23 our job so much easier. 24 CHAIRMAN NORMAN: Mr. Gustafson, is there anything further 25 that you would wish to add? R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 15 e e 1 MR. GUSTAFSON: Nothing further. 2 CHAIRMAN NORMAN: Good. Thank you very much for your 3 testimony. 4 Are there any other persons who wish to speak to the 5 matter that's before the Commission this morning? 6 Okay, for the record the Chair does not see anyone asking 7 to be recognized to speak. The Chair will ask once more 8 whether there are any persons who wish to testify before the 9 Commission on this matter? No persons have asked to be 10 recognized. 11 The record in this matter then, we will consider the 12 matter submitted on the basis of the application. We have rad 13 into the record the objection as requested by Mr. Givens. Mr. 14 Perkins has indicated that a copy of his submission which has 15 been entered into the record will be served upon Mr. Givens, as 16 well as the Regional Solicitors Office. 17 The record will remain open and the Commission will today 18 send a letter to Mr. Givens letting him know that the record 19 will remain open until close of business on Friday, April 14th 20 for any additional comments that any parties may wish to 21 submit. Upon that point the record will close and then the 22 Commission will proceed to make a decision. 23 Anything further? 24 COMMISSIONER SEAMOUNT: Nothing further. 25 COMMISSIONER FORESTER: No. R & Reo U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 16 e e 1 CHAIRMAN NORMAN: Okay. Without objection we are 2 adjourned at approximately 9:30 a.m. 3 (Recessed - 9:30 a.m.) 4 2056 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 17 e e 1 C E R T I F I CAT E 2 UNITED STATES OF AMERICA ) )ss. 3 STATE OF ALASKA ) 4 I, Rebecca Nelms, Notary Public in and for the State of Alaska, residing at Anchorage, Alaska, and Reporter for R & R 5 Court Reporters, Inc., do hereby certify: 6 THAT the annexed and foregoing Public Hearing In the Matter of the Application of BP EXPLORATION (ALASKA) 7 INCORPORATED request for AREA INJECTION ORDER and POOL RULES for PROPOSED RAVEN OIL, Prudhoe Bay Field, was taken by Suzan 8 Olson on the 30th day of March, 2006, commencing at the hour of 9:00 a.m., at the Alaska Oil and Gas Conservation Commission, 9 Anchorage, Alaska; 10 THAT this Hearing Transcript, as heretofore annexed, is a true and correct transcription of the proceedings taken and 11 transcribed by Suzan Olson; 12 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal this 7th day of April, 2006. 13 14 ~~c.......,~ Notary Public in and for Alaska My Commission Expires: 10/10/06 15 16 17 18 19 20 21 22 23 24 25 R & R C 0 U R T R E P 0 R T E R S 810 N STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 e e GARY A. ZIPKIN LOUIS R. VEERMAN JAMES D. LINXWILER JAMES D. DEWITT JOSEPH J. PERKINS, JR. GEDRGE R. LYLE MICHAEL S. MCLAUGHLIN SUSAN M. WEST JOAN E. ROHLF MICHAEL K. NAVE JONATHAN A. WOODMAN AISHA TINKER BRAY NELLEENE A. BODTHBY MATTHEW COOPER CHRISTINA RANKIN PAMELA D. WEISS JOSEPH BRIAN GROSS MOLLY C. BROWN LAW OFFICES OF Guess&Rudd P.C. W. EUGENE GUESS 1932-1975 JOSEPH RUDD 1933-1978 FRANCIS E. SMITH, JR. 1941-1991 510 L STREET, SUITE 700 ANCHORAGE, ALASKA 99501-1964 TELEPHONE (907) 793-2200 FACSIMILE (907) 793-2299 OFFICES IN ANCHORAGE & FAIRBANKS OF COUNSEL MARGARET S. JONES GREGORY G. SILVEY March 30, 2006 HAND DELIVERED Alaska Oil & Gas Conservation Commission 333 W. 7th Ave., Suite 100 Anchorage, Alaska 99501 "'., ,c-,_,._! Re: Responsive comments of BP Exploration (Alaska) Inc. to comments of heirs of Andrew Oenga on BPX's request to the AOGCC to issue an area injection order and pool rules under 20 AAC 25.460 and 20 AAC 25.520, respectively, to govern development of the proposed Raven Oil Pool, Prudhoe Bay Field Dear Commissioners: On behalf of BP Exploration (Alaska) Inc. ("BPX"), operator of the Prudhoe Bay Field, we hereby submit the following brief response to the comments submitted on March 28, 2006, by the heirs of Andrew Oenga ("Oenga Heirs") on the captioned application. 1. Attached hereto is a copy of the Lease Agreement granted by Andrew Oenga to BPX, as subsequently amended and supplemented (said Lease Agreement as subsequently amended and supplemented is referred to hereinafter as the "BIA Lease No. F-89-01 "). This lease is in full force and effect. BPX has paid all amounts due and owing to Andrew Oenga or to the Oenga heirs under said lease. 2. Pursuant to the BIA Lease No. F-89-01, Andrew Oenga expressly granted to BPX all of the surface rights that BP needs in order to explore and develop the Raven Oil Pool and to produce unitized substances from the Raven Oil Pool through BPX's Heald Point facilities. In particular, and without limiting the generality of the foregoing, BPX notes that the relevant grant clauses of BIA Lease No. F-89-01 provide as follows: 10. Use of Leased Premises: The Lessee may use the leased premises for any and all oil field exploration, development, construction, facilities, production and support e e Alaska Oil & Gas Conservation Commission March 30, 2006 Page 2 purposes, and for any other uses and purposes reasonably or conveniently related thereto... . 11. Improvements: The Lessee may construct any facilities (pipelines, access roads, causeway approaches, drilling pads, a [sic] construction staging pads or any other required facilities) on the leased premises.... 3. The Raven Oil Pool is situated within some of the same lands and leases as the Niakuk Pool. The Raven Oil Pool is situated stratigraphically below but otherwise within the same basic geologic structure as the Niakuk Pool. 4. Given the breadth of the grant clauses set forth above and the fact that the BIA Lease No. F-89-0I is structured as a lease granting exclusive possession for oil and gas purposes rather than a mere easement appurtenant to the lands and leases containing the Niakuk and Raven Pools, there is no basis for concluding that the BIA Lease No. F-89-0I does not authorize BPX to use the leased surface to develop the Raven Oil Pool. Indeed, even if the BIA Lease No. F-89-0 1 had been structured only as an easement appurtenant to the lands and leases containing the Niakuk and Raven Pools rather than as a lease granting exclusive possession for all oil and gas purposes, BPX still would be authorized by such grant to use the Heald Point facilities to produce unitized substances from the Raven Oil Pool. 5. The AOGCC does not adjudicate disputes respecting surface ownership or disputes arising under surface leases. These are matters for the courts-and in this case because the involved surface comprises a Native allotment, any such dispute is solely a matter for the Secretary of the Interior and, if necessary, the federal courts. 25 V.S.C. § 345. In light of the points enumerated above, the Commission should approve BPX's request for an Area Injection Order and Pool Rules to govern development of the Raven Oil Pool. Any dispute between the parties respecting the adequacy or scope of the grants made by the BIA Lease No. F-89-01 or whether the BIA Lease No. F-89-0I is in good standing is for resolution in another forum. e e Alaska Oil & Gas Conservation Commission March 30, 2006 Page 3 .:)/1-1i RESPECTFULLY SUBMITTED this JU day of March, 2006. GUESS & RUDD P.C. Counsel for BP Exploration (Alaska) Inc. e e A TT ACHMENT BIA Lease No. F-89-01 1. Lease Agreement (BIA Lease No. F-89-01), effective January 20,1994, and recorded on February I, 1989, at Book 53, Pages 873-890, Barrow Recording District. 2. Agreement To Amend BIA Lease F-89-01, effective January 20, 1994, and recorded on May 2, 1994, at Book 74, Pages 292-298, Barrow Recording District. 3. Third [sic] Amendment To BIA Lease F-89-01, effective May 11, 1995, and recorded on June 14, 1995, at Book 79, Pages 223-227, Barrow Recording District. .e e BGCk {J053r,~~£ 873 U.S. Department of the Interior Bureau of Indian Affai rs. LEASE AGREEMENT BIA lease No. F-89-01 THIS lease Agreement is made and entered into effective January 1. 1989. by and between Andrew Oenga. an Alaska Native. ·of Barrow. Alaska [with the approval of the Secretary of the Department of the Interior (the "Secretary") or his duly authorized representative. acting for. and on behalf of Mr. Oenga] hereinafter referred to as the "lessor"; and Standard Alaska Production Company. a Delaware corporation. its agents. assigns. contractors. subcontractors and/or sublessees. hereinafter called "Lessee". in accordance with the provisions of existing law and regulations 'at [25 CFR 162 (1981)] which ~y reference are made a part hereof. WITNESSETH. that for and in con~ideration of the mutual covenants and agreements provided herein. the Lessor hereby leases to the lessee ten (0) acres of land. the "leased premises". which comprises a portion of lessor's present and future interests in Parcel B of Alaska Native Allotment application F-14632. Said allotment is described as U.S. Survey 6904 Tl1N. R15E UM Sec. 1 and T12N. R15E UM Sec. 36. The remainder of the Native Al10tment constitutes the "unleased premises". The al10tment and leased premises are shown on the attached Exhibit A. 1 1. Lease Term: The term of this lease Agreement sha11 be for twenty-five (25) years beginning on January 1. 1989. and expiring at midnight ì on December 31, 2014, unless extended or unless sooner termInated pursuant to I the terms of this lease Agreement. The anniversary date of this lease II.~ Agreement is January 1st of each year following the year in which this lease II Agreement was executed. The first ten years of the lease term sha1l constitute a period within which the lessee shall attempt to obtain required permits for the Niakuk Project. 1 e e. eG~I (j053¡.~!:[ 874 During this period. unless written notice to procede has been served, lessee has the option to cancel this lease Agreement at any time. If lessee cancels this Lease Agreement, Lessee shall provide written notice of such cancellation to the lessor and the Superintendent, Bureau of Indian Affairs in Fairbanks, Alaska not less than ninety (90) days .prior to any anniversary date of this' Lease Agreement. Cancellation of this Lease Agreement shall not be effective unless the written notice required herein is timely received. Also during the initial ten (10) year period, Lessee must notify the Lessor and the Superintendent, Bureau of Indian Affairs in Fairbanks. Alaska of the status of the permitting process and/or of the Niakuk Project. Such noti ce shall be given at the time the annual rental payments are made and at any other time that, in the opinion of the Lessee, such notice is either warranted and/or appropriate; provided however, that such notice is required within ninety (90) days of the date the Niakuk Project is either fully permitted or the project is cancelled or delayed. I··..~·' -~~ : < , 'I~"·:'·· t-J. ~. ~. I I ¡~~~ ~ ~ If Lessee serves written notice that it intends to procede with the Niakuk Project, then this 1 ease wi 11 be deemed to have been taken for consecutive five (5) year periods and provisions of Section 15 sha11 become operative and effective on the next ensuing anniversary date of this lease Agreement. If the final period is less than five (5) years, lessee shall only be obligated for rental payments up to the éxpiration date of this Lease Agreement or any extension thereof. At the end of this inHial ten (10) year period, provisions of Section 15 automatically become effective and operative. 2. Option to Extend: The Lessee shall have the option, at its sole discretion, to extend the term of this lease Agreement for additional five (5) year periOdS up to a maximum of twenty-five (25) years at the end of the original lease term. Notification of the exercise of this option shall be made in writing, not less than ninety (90l days prior to the original expiration date of this Lease Agreèment. 3. lease Bonu~: As a bonus for executing this lease Agreement, lessee hereby agrees to pay lessor the sum of twenty-five thousand dollars. 2 e e 8GOK 0053 fAGE 875 The bonus sha11 be paid upon approval of this lease Agreement by the Superintendant. Bureau of Indian Affairs Fairbanks Agency. I 4. Lease Rentals: As rental for the leased premises, the lessee agrees to pay the U.S.O.I. - Bureau of Indian Affairs for Andrew Oenga. c/o Bureau of Indian Affairs, 101 12th Avenue Box 16, Fairbanks, Alaska 99701 for credit to the Lessors Indian Individual Money Account (account #9BS-U1B3) the sum of $16,000 per year ($1,600.00/acre X 10 acres) for each of the first five (5) years of the lease Agreement. lessee shaH not be obligated to change either the designated pa·yee or depository unless notified in writing, pursuant to section 31 below, at least sixty (60) days prior to tüe anniversary date of this Lease Agreement. lease rental payments are due on the anniversary date of the lease and are payable in advance for the next succeeding year. In the event of the death of the lessor during the term of thi s lease Agreement, and while the leased premises are in restricted status, all rentals remai ni ng due or payabl e to the decedent or his representative under the provisions of the lease shall be paid to the Superintendent, Bureau of Indian Affairs, 101 12th Avenue Box 16. Fairbanks, Alaska 99701 for credit to the lessors Indian Individual Money Account. (For the purposes of this lease Agreement, it is understood that restricted status is defined as a land status where lands are restricted or held for the benefit of Indians and are not subject to taxation; nor to a 11 enation or encumbrances, and/or encroachment wi thout the consent of the Secretary of Interior or his del egated representative.) While the leased premises are in restricted status, the Secretary may, in his discretion, suspend the direct rental payment provisions of this Lease, in which event the rentals shall be paid to the Superintendent. Bureau of Indian Affairs, Fairbanks, Alaska for credit to the account of this lease Agreement. 5. lease Rental Adjustments: Rental payments may be increased at successive five-year intervals beginning in the sixth year after rental payments have begun. Such adjustments wi 11 be based upon either the fai r market undeveloped rental value for the property established by a Bureau of Indian Affairs appraisa1 (see section 9, Reappraisal Procedures) or the 3 e e_ ~ooK0053rAGEB76 I '1i{~ ~?¡J ~ adjustment w111 be based on the appHcation of a "Cost Adjustment Factor-: which ever is greater. For the purposes of this Lease Agreement, ·Cost Adjustment Factor" sha11 mean the ratio of (1) the most recently published Consumer Price Index to (1i) the most recently published Consumer Price Index as of the executlon date of this Lease Agreement. The Consumer Price Index shall mean the U.S. Consumer Price Index, all items and all urban consUllers, U.S. city average, 1982-84 equals 100, as first published, without seasonal adjustment, by the Bureau of Labor Statisti cs, Department of Labor, wi thout regard to subsequent revisions or corrections by such Bureau. For the second and subsequent rental adjustments. the "Cost Adjustment Factor" shall mean the ratl0 of (i) the most recently publ ished Consumer Pri ce Index to (11) the di fference between the most recently publi shed Consumer Pr1 ce Index and the Consumer Price Index upon which the previous rental adjustment was or would have been based. Should tMs index be changed, altered, or ceased to be published the (ol1owing will apply: a) if subject index is changed so that the base year di ffers from that used as of the year in wh; ch the term commences, the subject index shall be converted in acèordance with the conversion factor published by the publisher of that index; b) if the subject index is discontinued or revised during the term of this agreement such index shall be replaced by another government index which will obtain substantially the same results as would be obtained if the sUbject index had not been discontinued or revised. It is agreed and understood by all parties that the rental payments will not escalate by more than 50~ in any single five (5) year period. 6. Delinquent Rental Payment: Any payment received after the fifteenth <15th) day subsequent to the anniversary date of each year during the lease term shall be considered delinquent and a late fee of $250.00 will be assessed. 7. Interest on Rentals Past Due: If any rental payment is not paid within thirty (30) days after becoming due, interest at the rate of eighteen (18) percent per annum, compounded annually, will become due and payable from the day such rental was due, and will run until the delinquent rental Is paid. 8. Default and Remedies: If the lessee should fail to perforJII or to comp1y with a.ny term or condition of this lease Agreement. the lessor, 4 - _. 800K 0053 PAGE 877 after written notice giving Lessor a ten (0) day period within which to respond, may pursue his rights to re-enter. re-let. evict. terminate the lease Agreement or recover rents or any other remedy he has under law. Lessee shall be given a reasonable time to cure such default or breach. Such a violation of the Lease Agreement ,shaH also be acted upon in accordance with the regulation at 25 CFR 162.14 (1987), so long as title to the leased premises remains restricted by the Secretary. 9. Reappraisal Procedures: Neither the Secretary nor any appraiser may consider the renta1s provided for in this Lease Agreement for any purpose in determining the fair market rental rate pursuant to Paragraph 3 of this lease Agreement. The Bureau of Indian Affairs review for purposes of I establishing the fair rental value of the premises shall be based on the ~ I highest and best use of the premises as rav, unimproved vacant land at the time of the appraisal and shall not be based on the cost or value of ~ Improvements or developments tDilde by the lessee or any Income the lessee I derives from the leased premises. In all cases. Lessee shall be a proper party with standing to contest the reasonablenp,~~ ~f the Secretary's rental determination. If, during the term of this lease Agreement. lessor receives unrestricted title to the premises. the functions assigned to the Secretary hereunder shall be performed by a designated appraiser mutually acceptable to the parties. with the costs of such appraisal to be borne equally by the parties. 10. Use of leased/Unl eased Premi ses: The lessee may use the 1 eased premises for any and all oil field exploration. development, construction. facitities. production and support purposes. and for any other uses and purposes reasonably or convent entty related thereto. The unl eased premises may be used for geotechnical. survey and design work at any time prior to convnencement of construction activities. Said uses shal1 be without cost to lessee and will not require separate or additional permits from the lessor. The lesse~ shall make no unlawful uses of the leased and/or unleased premi~es. or knowingly permit any unlawful activity to be conducted thereon by others. 5 e e BOCK(J(}~~rAGE~~~ 11. Improvements: The lessee may construct any facilities (pipelines, access roads, causeway approaches, drilling pads, a construction staging pads or any other required facilities) on the leased premises as long as construction is limited to the ten' (0) acres as herein described on ExM b1 t A. TM s lease Agreement may be amended to increase or decrease the size of the leased premises at any time at lessee's sole discretion. If the 00 leased premhes is so increased or decreased, lessee shall proportionately :1" increue or decreue its lease rental payments effeçtive on the next ensuing ~... lease an~lversary date after such increase or decrease; provided however that rental amounts shall be pro rated beginning on the date that leased premises Its increased or decreased. It is agreed and understood by all parties that II the leased premises cannot be reduced to less than the ten (10.0) acres ..~.¡;;;- originally taken under this lease Agreement. All improvements placed on the leased premises by the lessee shall remain the property of the lessee during the term of this lease Agreement and any extension thereof, and shall become the property of the less9r at the final expiration of this lease Agreement or any extension thereof. Prior to the expiration or termination of this lease Agreement, lessee may remove any improvement. provided that lessee restore the leased premises to a condition satisfactory to the Secretary and the regulatory agencies with jurisdiction over this project. The lessee shall not remove permanent improvements such as gravel pads, uti 1 Hies and permanent structures that regulatory agencies determine cannot be removed without substantial damage to either the structure(s) or the leased premises. 12. Maintenance of leased Premises: The lessee, at its sole expense, shall keep the leased premises, and any improvements placed thereon, in good order and repair, ordinary wear and tear excepted. 13. Sublease: Lessee may sublease all or portions of the leased premi ses to others, as it may see fi t. for uses perm; tted under thi s lease Agreement; provided, however, that the lessee sha 11 remain primarily responsible to the lessor for the payment of annual rentals when due. and for the observance of all terms and conditions of this Lease Agreement. 14. Surrender at End of Term: The lessee agrees that upon the last day of the lease term, Of upon the last day of any extension thereof. it will 6 e e !oor0053 PAG£ B79 peaceably and quietly vacate and surrender the 1 eased premises to the lessor. free and clear of any hazardous waste and/or material and in a condtt10n sati sfactory to the Secretary and the regul atory agenci es wi th jurt sd1 ction over this project. The lessee agrees that it will in a similar manner vacate and surrender in good condition any improvements remaining on the premises, ordinary wear and tear excepted. The lessee makes no warranty of fitness for a parti cul ar purpose or warranty of merchantab1li ty for any improvements left on the leased premises. 15. Option to Cancel: lessee may. for any reason, cancel this lease Agreement at the end of each five (5) year period during the lease Agreement term or any extension thereof. Such cancellation wi 11 be effective upon written notice to the lessor and the Superintendent, Bureau of Indian Affairs in Fairbanks, Alaska not less than ninety (90) days prtor to the end of each five (5) year period. 16. Termination for Acts' of God: The lessee sha11 have the right to cancel this Lease Agreement, and all of its obligations hereunder, after servi ng wri tten noti ce consistent with other cance11ation provisions in the lease Agreement, one year after an event constituting an act of god. As used in this Lease Agreement, an act of god means the prevention of Lessee from complying with any expressed or implied covenant of this lease Agreement after efforts made in good faith, by reason of war, riots, acts of God, 'severe weather, acts of governmental authorities, failure or lack of adequate transportation fac11ities, or any other cause beyond lessee's reasonable control whether similar to those enumerated or not. 17. Insurance: The lessee hereby certifies that it is self-insured for any liability incurred under this lease Agreement for an amount up to $5 mil1ion. The lessor shall receive the benefit of such self-insurance in the same fashion as if he were co-insured. If self-insurance shall cease, the lessee shall furnish the lessor with certificates of insurance in an equivalent amount. 18. Indemnification of the lessor: The Lessee shall protect, indemnify, and save the lessor harmless against any and all liabilities, 7 e e ~OOK 0053 PAGE 880 claims, ~amages, penalties, litigation, or costs and expenses related thereto (including. without limitation, reasonable attorney's fees) which may be imposed upon, incurred by, or' asserted against. the lessor by reason of (a) any accident or injury to. or death of any per.son. or loss or damage to any personal or real property occurring on· the leased premises. or any part thereof; (b) any use. non-use or condition of the leased premi ses. or any part thereof; (c) any failure on the part of lessee to perform. forebear. or otherw'se comply wi.th any of the terms of thi s lease Agreement; Cd) performance of any labor. services, or the furnishing of any materials wUh respect to the leased premises. or any part thereof. If any lawsuit or administrative proceeding is brought against the lessor by reason of any such occurrence. the lessee shaH. upon the lessor's request.· defend the suit or proceeding. or cause the same to be defended by counsel designated by the lessee. Notice of such a proceeding shall be ghen by the lessor to the lessee as soon as practicable. and in no event later than ten (10) days after the lessor has received notice of such a proceedi~g. 19. No Claims Against lessor: Nothing contained in this lease Agreement shall comprise the consent or request by the lessor. whether expressed or implied. for the performance of any labor or services, or the furnishing of materials or other property. with respect to the leased premises or any part thereof; nor sha 11 it give the lessee any r1 ght. power. or authority to contract for or permit the performance of any labor or services, or the furnishing of any materials or other property. in any manner which would permit the making of a valid claim for payment against the lessor. 20. Condition of the leased Premises: The lessee agrees that it is entirely familiar with the physical condition of the leased premises. The lessor makes no representation or warranty with respect to the condition of the leased premises. nor with respect to its fitness or availability for any particular use or purpose. The lessor shall not be liable for any latent or patent defect in the leased premises. 21. Approval: It is understood and agreed 'between the lessor and the lessee that this lease Agreement, and any subsequent amendment or extension thereto, shall be valid and binding only after approval by the 8 e e fOQK 0053 PAGE 881 Secretary or his authorized delegate pursuant to 25 eFR 162 (1987), except as may be provided in paragraph 26°herein. 22. ReHnquhhmênt of Restricted Tith by the Secretary: Nothing contained in this lease Agreement shall delay or prevent a termination· of federal trust responsibilities with respect to the leased premises, by issuance of a fee patent or otherwise during the term of this lease Agreement or any extension thereof. Termination of such responsibilities shall not act to abrogate the Lease Agreement.. The Secretary shall notify the Lessor and the Lessee of any such change in the 1egal status of title to the leased premises. If a certificate of competency removing restrictions against al hnati on or encumbrance is issued by the Secretary' to the Lessor, it shall be promptly recorded· by the Lessor, and the~eafter 'all references in this lease Agreement to the powers. duties~ or discretion of the Secretary regarding this Lease Agreement, or any extension thereof, shall have no further applicability or effect. 23. Taxes and Assessments: The Lessee shall be responsible for, and shall timely pay, all lawful federal, state, borough or local taxes, fees, or assessments (Including any interest and penalties thereon) which during the term of this Lease Agreement are assessed, levied, imposed upon, or become a lien upon the leased premises or any interest therein, or upon any alteration, addition, or improvement thereto. or upon personal property of any ~ind owned by and placed upon the leased premises by the Lessee, or upon any occupancy, use or possession of the leåsed premises or any.part thereof, before any fine, penalty, interest, or cost becomes applicable. lessor shall promptly provide to the Lessee all notices of levy, taxation, assessment or lien which Lessor receives with respect to the leased premises, and the Lessee shall have full authority to contest or seek adjustment of any such tax or assessment, by appropriate administrative or judicial proceedings.. The Lessee shall not be obligated to pay any such taxes, fees or assessments which it is contesting in good faith. until the final adjudication of such dispute. It shall take reasonable action, however, to assure that lessor's interest in the premises is not prejudiced-by such contest. 24. Eminent Domain: If the leased premises, or any part thereof, is condemned or taken by eminent domain for any lawful use or purpose, then as 9 e e Eo~~0053n~[882 , to the portion so ta~en, the term of this Lease Agreement shall terminate as of the date of title vesting in such proceeding, all rentals then due shall be paid to that date. and the parties shall therea~ter have no claim against each other for the value of the unexp'red term of the Leàs e Agreement as to that portion. In the event of any suc"h condemnaUon or ta~ing, whether whole or partial, the Lessee shall be entitled to a JU:Q µ.li share of the award paid for such condemnation, based upon the proportion of the award attributable· to the value of any improvements placed upon the leased p~emises by the lessee. " 25. Inspection: The Secretary, the lessor, and their authorized representatives may enter the leased prem, ses or any part thereof at a11 reasonable times and subject to reasonable conditions, including but not limited to, reasonable notice to Lessee. for the purposes of inspecting the premises. except that the Secretary and ht s authort zed representathes may . . inspect as authorized by law or to exercise any other right of lessor provided in this lease. 26. Right of Access: The Lessor retains a right of reasonable access across the hased premises. Such access shall not confH ct with the purposes of this lease Agreement or the uses and improvements authorized hereunder. For purposes of such access. the lessor shall be entit1ed to use the access rQ~d constructed by lessee pursuant to this lease Agreement. sUbject to compliance w1th Prudhoe Bay Unit security procedures. 27. Entire Agreement: This lease Agreement. together with any exhibits attached hereto. comprises the entire agreement and sets forth all prior covenants. promises. agreements. conditions. and understandings. whether oral or written. between the lessor and the lessee and concerning the leased premises. No subsequent agreement. condition or understanding. whether oral or written, which is not set forth in this lease Agreement. or in any duly-approved written amendment thereto. shall be enforceable unless it is reduced to writing and signed by all the parties to this lease Agreement. 28. lease Amendment and Interpretation: If any provision of this lease Agreement. or the application thereof, is invalid or unenforceable, the remainder of this Lease Agreement and other applications of such provisions 10 e SOOK 0053 P4G£ 883 shall not be affected by it. unless otherwise specifically provided herein. This Lease Agreement may be changed. waived. discharged. or terminated only by a document in writing signoed by the party. against whom enforcement of such change. waiver, discharge. or termination 15 sought. The paragraph headings in this Lease Agreement are for purposes of reference only. and shall not I 1mi t or defi ne the meant ng of such paragraphs. This lease Agreement may be executed in several counterparts. each of which is an original. but a11 of which shall constitute one instrument. e 29. Waivers: The waiver of any 'breach or default of any covenant. condition or stipulatiC?n contained heret'n shall not be deemed to cause a waiver of any subsequent breach or default of the same or any other covenant, condition or stipulation. nor shall any failure to enforce any right or seek any remedy with respect to any obligation under this Lease Agreement prejudice or affect the future rights or remedies of the parties. 30. Successors in Interest: Each term. covenant. and condition contained in this lease shall be binding upon and shall inure to the benefit of the heirs, executors. administrators. successors, and assigns of the parties hereto. So long as title to the leased premises is in a restricted status. all of the lessee's obligations under this Lease Agreement shall run to the United States as well as to the lessor. 31. Notices: All notices and other communications required or convenient under this lease Agreement shall be in writing, and shall be deemed to have been given when mailed by first class certified mail, postage prepaid thereon, and addressed as follows: (a) Superinten~ent. Bureau of Indian Affairs. 101 12th Ave. Box 16. Fairbanks. Alaska 99701, or at such other address as the Secretary sha11 have furnished to the ·parties in writing; (b) LESSOR: Mr. Andrew Oenga. P.O. Box 201, Barrow. Alask.a 99723, or at such other address as the Lessor sha11 have furnished to the parties in writing; and. (c) Standard Alaska Production Company.. Attn: land Manager. P.O. Box 196612. Anchorage. Alask.a 99519-6612. or at such other address as the lessee shall have furni shed to the parties in wri ting.· Notices to Lessee regarding any changes of rental recipient (payee) and/or depository shall not be binding upon Lessee unless said notice is received at least sixty (60) days prior to the lease Agreement ann1versary date. 11 e .,fftJ53r.c[ 884 32. Interest of Members of Congress or Department: No member of Congress, or agent of the Department of the Interior, shall receive any share of this lease Agreement, or' any benefit that may arise herefrom. This provision shall not be construed to extend to the general benefits received by the lessee as a corporation, on behalf of all of its shareholders: 33. Corporate Oualification: Standard A1å.ska Production Company certifies that it is in all respects qualified to enter into and perform this lease Agreement, as attested by Bureau of land Management qualification file 063890 and State of Alaska qualification file ADl QF-1768. 'The lessor has the following current bonds on fHe: Alaska Oil and Gas Conservation Commission Bond 25100302630-277 ($200,000>, Alaska Statewi de on and Gas Bond 25100302630-295 ($500,000) and Alaska Statewide Miscellaneous land Use Bond 64Sl0052736BCA ($1,000,000). 12 e e BOOK 0053 PAGE 885 FOR THE lESSOR: OATEO:cPß'1 ¡fðl By: (j~~k ()l ~A- Andrew Oenga 0 Approved as to form and substance. and wi th the further assurance that this Agreement and its consequences have been explained to Andrew Oenga in a language 1n which he is f1uent: By: 40. (J4-U STATE OF ALASKA ) ) SSe SECOND JUDICIAL DISTRICT ) The forego; ng i ns trume~ w~ ac"nowl edged before ,!?_f~. .". 1Ú.///(y"-I/"~ . 1989 by;ik01'./, Y J'A'¡Z~he "lessor. .,-..'~" .- , ("........ ¿ . > ) \;, 0.. V . . ~\'.~': f. D I .... . ~ ~ ........ C' "0 . . .-",...-... ". ... '. ~ A ~ ' ".r ." - ., '.r ':. .~. -. ~~. . ~ . .~ . I ·.'uf': . (\ ,-. "y .~ -¡ - .~ ; "'2.ø~¥ J- ¡J Æ.4-- ~~L'¡,~\.\l:.sj~} ~o~~R~~d~I'~ a~d f~r Alas"~ ;. ~:. f....~·.. -- '::-"':'::~ . . . / '(J 1/ ,;. ..... "y -.:. ~ c i \. ..." My Comnn: s on Expires: /~7 7! J' ^--- '-' ",,,... ...",. .' / I' ".... . ..... -, '. ~ ....... "., ;:$ í~ . ...,- ~.""ft::f'l: ~.'\ ,,'to /;L- me thi s /7 day 13 e e BOOK 0053 fAG£ 886 AFFIDAVIT OF INTERPRETER· I. k II. [}Jútf-k::.Ð/L . of lawful age. bei.ng first duly sworn state the following: I interpreted this lease Agreement for Andrew Oenga in the language in whi ch he is fl uent Unupi aq) o~ JA1J /1 ,1989: and I performed a true translation of this lease Agreement; and that Mr. Oenga stated that he executed this lease Agreement of his own free will and was not acting under duress. menace, fraud or undue influence of any person; and that Hr. Oenga declar~d that he fully understood this lease Agreement. ¡JAFO. tOt-LfJ STATE OF ALASKA ) ) 5S. SECOND JUDICIAL DISTRICT ) . ÇL The fOr;901 ng "ns trument was sworn to and execute~~re me thi s /f day of Ji.·:ttIJ7 1989, by fij!- r'2. ~3Ø4: Á. / ~ V....·.......... ~~,.'/)s-f-:-yß //Pi " ~~.~..~~...~:..;~..~:'... Notary PUb~ :;;-}l.v~··· -:: .....",. ....., . ·v "::< ~-f:" ,'~1;.,?r ',.: :. I!~L .;'. ª?,=€ - PU-;-L~S"~~~;,~ My Commission Expires htll/PL ;:-:~ iJ .:.c:o;: I .. I...,. __ t). . ,,;: . -;'':''.~l'.' \-..~~ ~ -}- ....~ Of ,:.... ... ~ ~~ . ...~ ................ r ." ...... '.... '''''1 ;1:- ~... .;t.... ..."... '. '. ""/~ ,,\ "'~ ."" '-.. . '",:.,U1n'" 14 e FOR THE LESSEE: e EG~~ 0053 r'AGE 887 Standard Alaska Production Company DATED: Approved as to form and substance: / ¿ . .,:1' /¿ . . v' . . / -' 1l _ / / ~~ ¡; / John,A. Reeder. Senior Attorney STATE OF ALASKA ) ) S5. THIRD JUDICIAL OISTRICT ) By: Q)0y- ,," .., .,) /- Its: The forego; ng ; nstru.!TIent was acknowl edged before me thi 5 I b~ day of {kfll~~"~l~ . 1989 by ~.AJ. ¡1Jr-~'¡,~ . the ~E'51 DetV í of Standard Alas~:' ~~~Äion Company. a Delaware corporation. on behalf of the corporation. ~11Iët '-If¡. ~jp-~ NOTARY PUBLIC in and forV(laska My Commission Expires: o/rg9 ~ . . .." ~."., ¡, \".. I., ," /~;ç.~ ;~': ~" '. "S>····, ., . .' ,fj " \ n I ' . -: . C,·"{ ~~ ...0- G; .. ~ .. ':.1' . Dun' '\. :. .-:...... .>:::-:. _.~....... .: .../::::; ~~. o. .,...' . . "1""" ".~"\\,,,, 15 e e BGOIC 0053 f~G[ 888 FOR THE SECRETARY OF THE INTERIOR: The within Lease Agreement is hereby approved. this Jç.-. day of-~~.:.,..£.~.·~ 1989. pursuant to the authority ~ - . ( delega.ted in Departmental Ma.nual Release Number 2784; 230 DM 1-3, March 16. 1988 and redelegated by addendum to 10 BIAM. July 1. 1988~ DEPARTMENT OF THE INTERIOR BUREAU OF INDIAN AFFAIRS DATED: t !~7 f/'¡ 1 \ 4il . -<: BY( (f>r(,-r;/ (, ''¡f.t.:''-&~' ;,æ~: \. ~J~~intenden~' . Fairbank.s Agency STATE OF ALASKA ) ) SSe FOURTH JUDICIAL DISTRICT ) The forego; ng 1 ns trument was ack.now1 edged before of -1~~u.~ ,1989 by ¡J,t..f. "'.<n!,, JiffiJttOltÍ(µ) the SU,p'·~.d·ht~nden~. United States Department of th~ Inter~or. ,..' ~~'...~ ~". ,,""'" r.:.J # .... ..... ~:~ ~'.?'\ ~............: c' .. ...·1.. . . ~:.:-~. V.a .~."" ..."" _...~ - iit $ "ZJ ." "r fI, ~ }' .: ,," ': ,,.~ ::-J: ." ~,¡-..,¡ ..:. -' ~ .:tll- i.....: '.- -- :.: :'" '.: ::J,.' :.J-: pun' \fÿ "'t: (r; : -:! ; ~.. ~~. ~~ W\.- ,J<,: it.) ~ ;'. '\ .~~.:...'~"..' ---- ... "~/;:- .: . , ,'0' L' r. . ~" ". . ·...~i./.....· .. ..'-:'<, ~ ..,.::./ :i;<::' ..... 6~'83~t. ...... ç¿ me thi s ;-././J day . Fairbanks Agency ~./f /'. ~ j .' /.'/-.../__ ---/'V711' I , IÇ..L.'vC;;f..~, NOTARY PUBLkf i -; and for A l}s~, My Commission Expires: ¡.a¡J,t.J 16 e EXHIBIT A e '. . SC{!~ 0053 F~n 889 ~Q ~') At Existing Road & Pipelines & Proposed Route of New Pipelines I ,..," I Proposed Ntakuk" Production Island ø Addl tJ on 6 ')Qv. ~ \ Q. ~~ Proposed o '!It" Causeway . Bridge Location PRUDHOE BAY Sagavanirktok River Delta u.s. Survey 6904 T12N, R15E UM Sec. 36 T11N, R15E UM Sec. 1 STANDARD ALASKA PRODUCTION Rlght-o'-way Length Width Area o I (Appro xlmate) 4,OOOP 100' 9.2 acres 1 Mile I NIAKUK PROJECT LOCATION MAP DATE: 9/21/88 SCALE: As Noted SHEET: 1 of 2 Proposed Pipelines ± ~ Tundra 8 9-0 0 7 2 f:,/- cÆ,~ RECORDr:::'" -At£D BARRCW p.~ ~ORDING DISTH CT e c t I 1111 I 1111 J t : ~~b I :: U 'I II " fa .:1:: 'I 1111 E: : ::f1:f~1 lilt till I "II H 11 I' Slope 1111· · 1111 C - JUa.l - """1 tlhl lilt 'III . :r n .11 IItI E: : ~~>' n:: 'I 1111 , PLAN VIEW ,~ '0. .. o a: · · · o o ~ e BOOK(J()~~PAGE~{j(J I I I . "\/ -I ~ . , I 1- Toe I I I Slope I . .. I c· ~ t I ~ I 1 I Tundra I ~ , fED Î 2;0 rH '89 . S=i-JlÌ/}jj¡Ï>.lJ r5· .~DnREss ; l ft..s KIF ¡S-1!.7f1iiÆ "nOli ..~ It'" f Water InJecUon - Productron rr Future 3 .~~~ ~ . to. Dt~·:::-:.·:·:, ti";åŸêi '::':':':.:::: ~ . :;--~. ~ _~~ .:7~·;t~~:.~-;;·:--- -::- ::¿~~ '-. .:~~.~-=~. .. ~- - - Approx. 10' J . 30' .. 60· -35· Mln.-i -5· . J , " CROSS SECTION C-C· (lookIng North) STANDARD ALASKA PRODUCTION Return To: Stu Hirsh Standard Alaska Production Co. P.O. Box 196612 ^_~hn~~aA 4K ~~5i~-b6!¿ NIAKUK ONSHORE ACCESS ROAD AND PIPELINES SECTION C-C'· DATE: 9/21/88 SCALE: 1"=20' SHEET:20f2 .. BOO~UUt ~.1"~~~'9 8 5 br191~al; Instrument Recorded ~ok 53 Page 873 .., AGREEMENT TO AMEND BIA LEASE F-89-01 1366 "I This Agreement is made and entered into by and between Leroy Oenga, Wallace Oenga and Michael M. Delia whose address is P. O. Box 201, Barrow, Alaska 99723, Georgene Shugluk whose address is P. O. Box 91003, Atqasuk, Alaska 99791 and Jenny Oenga whose address is 309 Paystreak, Fairbanks, Alaska who are the immediate heirs and successors in interest of Andrew Oenga ("Lessors") [with the approval of the Secretary of the Department of the Interior ("the Secretary")] and BP Exploration (Alaska) Inc., the successor in interest to Standard Alaska Production Company ("Lessee") whose mailing address is P. O. Box 196612, Anchorage, Alaska 99519-6612 all of whom are collectively hereinafter are referred to as the ('Parties"). Whereas, the Lessee has previously leased a 20 acre portion of Lessor's Parcel B of Native Allotment F-14632 under provisions of BIA Lease F-89-01 (as amended) ("Lease") from the Lessors; and I Whereas, the Lessee desires to exercise its rights under the Paragraph 11 of the Lease to increase the size of the Leased Premises to include the entirety of Parcel B of iõ!I Native Allotment F-14632; and Whereas, the Lessors desire to lease the remaining unleased 20 acres of Parcel B to the Lessee; and I Whereas, the Parties desire to provide that lease rental payments be made in lÎ biennially instead of annually; and " Whereas, the Parties desire to provide for lease rental adjustments every four years M instead of every five years: and Whereas, the Parties desire that the Lease reflect the current heirs and successors in interest of the original Lessor and Lessee; and liJi1,!ff Whereas, the Parties desire to amend the Lease to reflect the contractual relationship between the Arctic Slope Native Association Limited ("ASNA") and the Bureau of k.'W:- . Indian Affairs ("BIA") wherein ASNA performs certain administrative realty related . services on the behalf of the BIA; and Now Therefore, in consideration of the mutual promises and covenants contained herein, the Parties agree as follows: Lease Preamble The description of the Leased Premised in the Lease Preamble is revised to read "The Leased Premises consists of the entire Parcel B of Alaska Native Allotment F-14632 legally described as USS 6904'T11N, R15E UM Sec. 1 and T12N, R15E UM Sec. 36." Paragraph 4. - Lease Rentals The last sentence in Paragraph 4 is revised to read "Lease rental payments are due on the anniversary date of the lease and are due and payable sixty (60) days in e e e!Jo(0074~293 985 1366 Agreement to Amend BIA Lease F-89-01 advance for the next succeeding biennial period beginning with the rental payment due January 1, 1994 for the period January 1, 1994 through December 31, 1995. Lessee shall continue to make rental payments on a biennial basis sixty days before the anniversary date of the Lease. Lessors shall make no additional claims, requests or demands of Lessee for Lease rental payments, rental payment adjustments or rental payment advances except as .set forth in paragraph 5." Paragraph 5. - Lease Rental Adjustments The first sentence in Paragraph 5 is revised to read "Rental payments may be increased at successive four-year intervals beginning in the sixth year after rental payments have begun". Paragraph 12. Paragraph 12 is revised to read: "The Lessee, at its sole expense, shall keep the leased premises, and any improvements placed thereon, in good order and repair, ordinary wear and tear excepted; provided however that this provision shall not in any manner be construed so as to require the Lessee to protect the Leased Premises from natural erosion beyond the measures which, in its sole discretion, it deems necessary to protect its improvements placed thereon. Paragraph 13. The following paragraph is added to Paragraph 13: "The Lessee shall provide written notice to the Lessor and to the Arctic Slope Native Association Limited if the Leased Premises are subleased. For the purposes of this Agreement, a sublease shall not include (a) facility sharing agreements or other transactions which do not convey an interest in real property, (b) any interest in the mineral estate underlying this Surface Lease or (c) any use of State of Alaska tidelands adjacent to the Leased Premises." Paragraph 15. Option to C~mcel The second sentence in Paragraph 15 is revised to read: "Such cancellation will be effective upon written notice to the Lessor and the Arctic Slope Native Association Limited in Barrow, Alaska not less than ninety (gO) days prior to the end of each five (5) year period." Paraaraph 31. Notices Item (a) is revised to read: "Realty Officer, Arctic Slope Native Association Lim~ed, P. O. Box 1232, Barrow, Alaska 99723." Page 2 e e 80OK007 (PAGE 294 Agreement to Amend BIA lease F-89-01 985 1366 Item (b) is revised to read; "Mr. leroy Oenga P. O. Box 201 Barrow, AK 99723 Ms. Georgene Shugluk P. O. Box 91003 Atqasuk, AK 99791 Mr. Michael M. Delia P. O. Box 201 Barrow, AK 99723 Mr. Wallace Oenga P. O. Box 201 Barrow, AK 99723 Ms. Jenny Oenga clo 309 paystreak Fairbanks, AK 99712" Item (c) is revised to read: "BP Exploration (Alaska) Inc. Attn. land Manager P. O. Box 196612 Anchorage, AK 99519-6612" Effective Date of This Agreement This Agreement shall be effective when fully executed and approved by the Secretary; provided however, that the lessee's election to increase the size of the Leased Premises shall be deemed effective on July 1, 1993 for the purposes of calculating rental payments pursuant to Paragraph 11 of the lease. J:ntire AQreement This Agreement constitutes the entire agreement between the Parties in so far as this lease amendment is concerned and supersedes any previous understandings whether written or oral. With the exception of the lease amendments described above, the remaining provisions of Lease remain unchanged. Page 3 e e 800k0074ftG[295 Agreement to Amend BfA Lease F-89-01 In Witness Whereof, the Parties have executed this Agreement on the dates below their respective signatures. FOR THE LESSOR q L/t.J-î> !Jd/trl/l /J. L /' --/ 7~~ Wallace Oenga ~ Date r JJyt~a((1Æ {J~4 DaiBßt }1,61"'__ ð _ ~.I"~ ~~;:-e Shuglu~ -. - I.., A_ ,,~~ ~ 1111./~ í..;;~J Oenga Date I-PJ ~~h~/""fJ~ j-/7-t1y Michael M. Delia Date H 1- 9L( Date ~ F07THE LESSEE ;~~E. Golden ict!) President Endicott and e elopment Programs Date FOR THE SECRETARY The within Lease Amendment is hereby approved, pursuant to the authority delegated by 209 OM 8 dated November 17, 1981, Secretary's Order No. 3150 dated May 11, 1992, as amended March 5, 1993, and 10 BIAM Bulletin 13, dated November 19, 1992, as amended April 8, 1993, and the Addendum to 10 BIAM 3, datèd January 17, 1989. ~r/ Samuel Demientieff, Su Bureau of Indian Affairs Fairbanks, Agency 1-,â}-'l'7 Intendant Date <.D ex> 01 ::n ~ , ) ":'~) -" 1,··;I't _.. r -1 . - --, .. ~ ;:0:, .J (t'. ~11 :-q-('") ~. - ~j <, -'.') :> _. . ~;; ¿; - '- ;.::::-7; --L '"¡';", - . .~. ~?~ w (J) m (....,;~: -'1 "'" -it :.",' - (...., ë) ~i P1 P1?: ~;.) .. ~>; L,.J !":~ Page 4 e ,e Boor0074Þ1G[-200 Agreement to Amend BIA Lease F-89-01 985 1 366 ACKNOWLEDGEMENTS STATEOFA~S~ ) ) SSe SECOND JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this the 12- day of ~ JA~ ' 19.:ri before me the undersigned, a Notary Public for the State of ¡({ãskã perSbnally appeared Leroy Oenga, and Michael M. Delia, and execut~he foregoing document. WITNESS my hand and official seal this \ì day of ..~ ' 1994 at Barrow, Alaska. 0 e·· ....... . .-ur:. My c-........... _ ht'~ d.. S1.r~ NOTARY PUBLIC FóR A~SKA My commission expires: ,j7J q J q I STATE OF A~8KA ) ) ss. FOURTH JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this the ~ay of 1 ~ , 19~ before me the undersigD~d, a Notary Public for the State of AI~~ personally appeared Jenn¡.oengd;"and executed the foregoing document. WITNESS my hand and official seal this ,~.r.- day of .:¡:~ . , 1994 at Fairbanks, Alaska. <.j ._~ KA1HLE!!~ ~~~. . .....31 FAIRBANKS. MNS1IA /. ¿"1 /q¡ A MyComm.bÞ/nI~27._ My commission expires: jO'1 j"i, . 8T ATE OF A~8KA ) ) ss. SECOND JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this the J:L day of ~ , 19n before me the undersigned, a Notary Public for the State of Átaska personally appeared Wallace Oenga, and executed the foregoing document. WITNESS my hand and official seal this IÎ day of ~ ' 1994 at Barrow, Alaska. ~IUL /}t·~-fÁ_..$;t~ DIANE L snvENS NOTARY PUBLIC FOR A~SKA ._.Z'& / lit c-. ....... .....,. ,11I My commission expires: 7 J 2-.., '1 7 Page 5 e e 800KÔ074pÀGE 297 Agreement to Amend BIA Lease F-89-01 985 1366 STATE OF ALASKA ~ JUDICIAL DISTRICT ) ) 55. ) THIS IS TO CERTIFY that on this the D- day of ~~ , 19:I!i before me the undersigned, a Notary Public for the State of A6ðska pers6nally appeared Georgene Shugluk, and executed the foregoing document. WITNESS my hand and official seal this IÎ day of ~~ .1994 at ~ , Alaska. 0 . OFfICIAL lEAL DIANE L STEVENS IIOUIrmla IIr It:=':...,..- ~~d~ NOTARY PUBLIC FOR ALAS~ My commission expires: J4/J:?fi?"i 7 /Z411 / er 7 STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) The foregoing instrument was acknowledged before me this 13th day of January 1994, by Jack E. Golden, the Vice President of Endicott and Development Programs of BP Exploration (Alaska) Inc., a Delaware corporation, on behalf of the Corporation. ~It~_ p-,~/ ~~J~uc FOR ALASKA My commission expires: §~ [1( "t& ...~j!. ,.....\t.,tt.! ~ ItUltt,. I. # ,,-' Tj>. c·.. ....', i:~~~~:::'::~'::~'/ /" ::. ~ "r.·- ,'f"¡-'" ..... tr... 1: ;:: Q I ~).J I ~ /. '. -. ~ -:. ~ i /: ,-"- ~.' ~7';·~ .>, "'" . I Cf) £.. a L\ c. · ':. "i;''''' .~" =;~d~ ., . ~~!'::. .".. ........- t"'. 1= ~ .":'" (,>,0.: S ....~ 9'- 0\\.\'-, ~ ~~.:I: -.....:..;::~~ -,~~ ·~"":"'J".!'t;".~,...."~:- . ......."",..:. '.,: I.¡tit.'· Page 6 .. "..: . ;jÒ. ....~:::.'IÒ. ", d"'..' -',":, .'~ ~fi~'~:~: '.~ . . i'.. .... .' .. :~~*i~~:·' . ',~: -":.,'" . ~.;~ . .,'.~',. ,"..: {..~\~\:.> '. ~.~·;~;~h\.~~-~ ..;~..:...¡~;<.- :'. .. ·:::t~~~.~.~~:~~: ", . 01-1S-1994 og:Q9 907ët 763 e !O~00-74f1C[298 .:.RCTIC SLOPE t." .~¡E ;'SSOCI':'TION : P.02/07 .. 985' '1366 Arctic Slope Native Association Limited P.O. Box 1232 Barrow, AK 99723 . (907) 852-2762 " This' is to certify that the attached ame~dme~1t to BIA' lease F -89-01.' for Native Allotment FJ4632 between BP EXploration and the Heirs of Andrew' Oenga is in conformity with existing laws and regulations,' and all' realty records checked as to descriptioq" ownership and proper identification" of grantOr/grantee and .conformity extends to and ,.includes all supporting '. documents and other material as m~y be spec1fted and required in the Code ". of Federal Regulations. , . .... .. . . ~,' i." . '. .': ;"J_:.;~. ~::~.. '. Approved: ¡-20--rC/ Date· ,'Re.t'lµ:n· 'To: . . . stu . Hirsh . .BP Exploration )Alaska) Inc. 900. Box 196612 , . Anchorage, AI< 99519,-6612 ,Ô1~~~ ASNA Realty.Officer ~~lA-~ .... Superintendent,BLAF~A~enc~ . ~. .... . . . 9 :'1-0 8' -1 5 BARROW REC<5'3 -' DISTRICT' '.' . .;' ...' REQUEST.Ë··Ò .By;ð.¡; , . '. ." .. " ·9't·Mnv 2 orJ' n If.',· 5: 51Jt?/~. ~ .' Orignial Lease 1\ Lands located in sec 36~being USS .ded itl 'J.' .LIN/RlS E 6904. Book 0053 at pag ~3 UM Sec. 1 an~T12N/~15E 985 1472 BOOK -¡q PAGE ::>..:23 Barrow Recording District Third Amendment to BIA Lease F-89-01 ---- This agreement is made and entered into by and between Leroy Oenga and Wallace Oenga whose address is P.O. Box 201, Barrow, Alask~ Michael Delia whose address is 300 Slater Drive, Fairbanks AK 99701, Georgene Shugluk whose address is P.O. Box 91003, Atqasuk, Alaska 99791, and Jennie Oenga whose address is P.O. Box 55778, Fairbanks, Alaska 99705, who are the immediate heirs and successors in the interest of Andrew Oenga (Lessors) and BP Exploration (Alaska) Inc., the successor in interest to Standard Alaska Production Company (Lessee) whose address is P.O. Box 196612, Anchorage, Alaska 99519-6612 all of whom are collectively hereinafter are referred to as the "Parties". , Whereas, the Lessee has previously leased the 40-acre portion of Lessor's Parcel B of Native Allotment F-14632 under provisions ofBIA Lease F-89-01 as amended ("Lease") from the Lessors; and Whereas, Leroy Oenga, Wallace Oenga, Michael Delia and Georgene Shugluk desire to use a portion of the rental proceeds from the Lease to collateralize four personal loans they are seeking to obtain from the National Bank of Alaska; and Whereas, Jennie Oenga does not seek to obtain a loan but is agreeing to changes in the lease to assist her family members in obtaining these loans; and Whereas, the Lessors desire to provide that lease rental payments be made annually instead of biennially; and Whereas, the Lessors desire to adjust the date at which the Lessee may cancel the Lease so that it shall coincide with the tenn of the personal loans they are seeking; and Whereas, the Parties desire to amend the Lease to reflect their LessorlLessee relationship as it relates to the contractual relationsmp between the Arctic Slope Native Association Limited C·ASNA") and the Bureau of Indian Affairs ("BIA'') wherein ASNA perfonns certain realty services on the beh.alf ofBIA for the benefit of the Lessors. Now therefore, in consideration of the mutual promises and covenants contained herein, the Parties agree as follows: Paragraph 4. Lease Rentals The last sentence in the first paragraph of Paragraph 4 is revised to read "Lease rental payments are due and payable sixty (60) days in advance of the anniversary date of this Lease Agreement for the next succeeding annual rental period beginning with the rental payment due January 1, 1996 through December 31, 1996. Lessee shall continue to make rental payments on an annual basis sixty days prior to the anniversary date of this LeaSe Agreement. Lessors shall make no additional claims, requests or demands of Lessee for Lease rental payments, rental payment adjustments or rental payment advances except as set forth in paragraph 5:' Page 1 BOOK ,''1 PAGE ::l:JJ-1 Barrow Recordi~ District < ( \ \ e It 985 1472 1_.._ ., A new paragraph is added to Paragraph 4 as follows: "The rental payment due on November I, 1995 for the period January I, 1996 through December 31, 1996 is eighty-thousand six-hundred forty dollars ($80,640.00) which payment shall continue to be adjusted at four-year intervals pursuant to Paragraph 5 below, as amended." A new paragraph is added to the end of Paragraph 4 as follows: "Lessee agrees to make lease rental payments to the National Bank of Alaska, or any other financial institution of the Lessor's choosing provided that Lessors furnish Lessee properly executed Assignment of Proceeds, Rental Division Order and! or other written instruments at least 30 days prior to the rental due date as stipulated herein." Paragraph S. Lease Rental Adjustments A new paragraph is added to the end of Paragraph 5 as fonows: "Rental payments may next be adjusted November 1, 1997 for the adjustment period January 1,1998 through December 31,2002 and subsequent four-year periods unless this Lease Agreement expires or is canceled pursuant to tt provisions of Paragraph 15 below, as amended. Paragraph 15. Option to Cancel The first sentence of Paragraph 15 is revised to read "Lessee may, for any reason, cancel this Lease Agreement at the end of each five (5) year period during the Lease term, or any extension thereof, with the first right to cancel accruing on January 1,2001." Paragraph 34. Relationship of the Parties A new Paragraph 34 is added to this Lease Agreement as follows: "Lessors hereby designate and appoint the BIA, acting by and through ASNA, to be their sole contact with Lessees for any and all matters arising out of this Lease Agreement or any amendment thereto. Lessors agree that they will under no circumstances contact the Lessee in person or by telephone, facsimile, electronic mail, United States mail, courier service, or any other means. If Lessors contact Lessees, Lessees shall be under no obligation to respond to Lessors contacts and shall refer all such contacts to ASNA or the BIA." Effective Date of This Agreement This Agreement shall be effective when fully executed and approved by the Secretary ofInterior. Entire Agreement This Agreement constitutes the entire agreement between the Parties insofar as this lease amendment is concerned and supersedes any previous understandings whether written or oral. With the exception of the two preceding lease amendments, the remaining provisions of Lease, as previously amended, remain Wlchanged. Page 2 BOOK -¡q PAGE ;:725 e- Barrow' Recordin¡r Di!ltrict e 985 1472 In Witness Whereof, the Parties have executed this Agreement on the dates adjacent to their respective signatures. FOR THE LESSORS !J¡t/JLUt £J,--- t=6-'ir -P.... f1. - Wal1aceOenga ,y.<.rr Date 'l:1~ 4tt Itf!/ Date Jq ~ t'\ ~ ~ 0 e..,'\ <t\ð\.5 - 8'- q5 J~lIl1e Óenga ,J Date Lf'ñ{(J/&._ 1'fJ-,I~. JN~ ðfrJf...5 ~~. Date Conservator for Jennie Oenga '711d-~/H, fJ..J4. Michael M. Delia 5-8'-95 Date ~~ Georgene Shugluk ~ ~ /'9S Date ACKNOWLEDGMENTS ) ) 55. Second Judicial District ) The foregoing instrument was acknowledged before me this b day of Ø:r95 by ~.~~I"c:e Oenga who personally appeared before me and execut e fOreg01:~~nt of his own .....~t~~iIl. ...~. ~..,;;.~ '" ....."' );0;1 ,._~:.-.' "¿. .:::> ~',~ .......... ~ .¿~ ~ ¿ . ~A..r.· . " A\", ~ ~..;.,... fI.-. _...-'a.-J<O: t.. . ;' n. ¡ <.:: "~."'- ":. Y ~ - L . "J~. 0.. ~ :;._."1') r ft! ~~ -{ ~ "? ~ ARY PUBUC FOR -. ~ \. õ~::.$' ...i'l J y commission expires: ~ '....ç¡ ,. ..... W"'"'" .... '\.~ i" ····~~~~···šTÅii,()F ALASKA . 'fit"..".," STATE OF ALASKA Second Judicial District ) ) 55. ) _:.!~e..f<?regoing instrument was acknowledged before me this \....L,~.ç,Qga, Sr., who personally appeared before me and exec ,,-,, r:::" - .... an: '. /J. \.~ee W I, ..... . "I ........... 1>', .' 'II' .. -. ' {I>J ..-: Ò -.. ... ::-':, : -~.r:::: 4oÕ~'; ~ .. V .; :. 0 :. ' -- :r.... 0' . ~....,. ~:- .: :'. n, ,-. I! .. :~.. ; ·";1· ....., ,. -.., . - ." . ,..... \'", - -... .. :; # ..... .,.. 1 'i:':' l> :.....J: .. }..,;".". -- ,~~...:t' : t. · .::- ~_, .. 0 ;!j-' ;,¡1 ....¡.~.~ ..., . .. ~'(" .., ~. ·~:·...tI.,~....·...~.'¡'..:~ .... .(,~ ~.,., ". '. Page 3 e STATE OF ALASKA ) ) ss. Second Judicial District ) _OOK -,c:¡ PAGE ,')"J I (J Barg13 !)cor iï~4~~~r~ .. . ~ - The foregoing instrument was acknowledged before me this 10../ k day of MÆY , 1995 by Georgene Shugluk, who personally appeared before me and executed the foregoing instrument of her own free will. \\\\\llfl,,(( \,\\\ \ t) l ((ff \," 0... . /L', 'Q..: .... v" ~"!(" ." --':'.. 'V "" ~:t: " MOlAr. ··~¡'o~ ::'. . IT....· ~ ~: --_ I . -n = - <n P'/¡al . .on- ::::~ IC' "= ~ .~ --- ~: : .~ '.l' _ (1:.: ~ " ",' . Or A\.~.· ~ JJ r ...... ;::. ~, .... < ó " STATE OF ALASKA "1111"r.I~I\\\"'" ~@5/~/<7r )ss. g~vud Judicial District ) _~k My commission expires: 7h /9~ The foregoing instrument was acknowledged before me this í day of ~ ' 1995 by - Michael Delia, who personally appeared before me and executed the foregoing ~trument of his own free will. . UlMan-dAms . . __"*Ie '. .·-I.If.,"'" _...,..... ~....,.. till /)1~~~ M-f?~--- NOTARY PUBLIC FOR ALASKA My commission expires: 7/Zitf Ie¿ 7 STATE OF ALASKA ) ) ss. Fourth Judicial District ) The foregoing instrument was acknowledged before me this --'2- day of ~ , 1995 by Jennie Oenga, who personally appeared before me and executed the foregoi~g U¡([trument of her own free will. . 0MaAI, IfM, DIME L STEVENS _.~ 1IIfMY_ . ... c.:=.= ...., .. ttIJ hèLN- ~ d1~ NOTARY PUBUC FOR ALASK¡\ -- -' My commission expires: 7/2lf /&1 7 STATE OF ALASKA ) ) 88, Fourth Iudicial District ) The foregoing instrument was acknowledged before me this $S day of ~ ,1995 by B Jarvi, who personally appeared before me and executed the foregoing insttumenttbf her own free will, and in her capacity as conservator for Jennie Oenga. ð. ~UJ 1fFICIAL·1fAL DIANE L STEVENS IOTMY PUIUC UIIIIOW. AWICA My c.-. ....... ...., .. ,., ~~~ NOTARY PUBLIC FOR ALASKA My commission expires: 7/h if 1'1'1 Page 4 e FO~E LErJ~ /\ 'fiIJ ~C~ AIJ. Bolea, Manager ~Greater Pt. McIntyre Area ~C/IC?D Date e 'OOX 7Cf PAGE ~7 Barrow Recanting Distriet ACKNOWLEDGMENT STATE OF ALASKA ) ) SSe 7J.Ü~D Judicial District ) The foregoing instrument was acknowledged before me this 16 í4 day of ./HAy . 1995, by Al E. Bolea. the Manager of Greater Pt. McIntyre Area, ~r."'1I1I~¡4::¡~. Exploration (Alaska), Inc., on behalf of the Corporation. ....:.\1\\ \~ ít{~!!¡~~.. ... ð.....c, .... ......"1·...... l ~-- ...!:~ij.f.· £. ~ , 7~ - t1f: 1J . f ~ l:·\\·PTA¡¡;."it\:'~·~J"\ '/.1 I"., J J-1 ~ . ".. - .<!(o:~.<:.. ::. . VI C u..,.uV.J~ - /' ,.·····,.-4:,·,· NOTARY PUBUC FOR ALAS~.' \~}F~~,-~¢.! . ,),j My conunissionexpires: -Z-2-Y-f.~ -···tor t-t;..... / . .........., ," FOR THE SECRETARY OF INTERIOR: .' -'? ..,-:- "'!.!"f::t1n~ The within Lease Amendment is hereby approved, pursuant to the authority delegated by 209 DM 8 dated November 17, 1981, Secretary's Order No. 3150 dated May 11, 1992, as amended March 5, 1993, and 10 BIAM Bulletin 13, dated November 19, 1992, as amended April 8, 1993, and the Addendum to 10 BIAM 3, dated January 17, 1989. ~~ Bureau of Indian Affairs Fairbanks Agency Return to: stu Hirsh BP Exploration (Alaska) Inc. P.O. Box 196612 Anchorage, AK 99519-6612 t::-/'I-crs Date <.D qFj-q ;)Q ~. RECORDED ,¡ f!It.1!Ð31 cD fl,/1¡¿PI'JII") 'HE£. DlST. --'" ..þ. DATE I /J / J J-/- ~ 199.5 -J r- TIME II: Lt:::L aM oJ Requested by, fP _. Addt... ÞxpJ/JJz.o..i":fJ),1. Page 5 1:"::1 :t> c: \.0 ~::o c.n Ã c:f"'1 -4 :.::> -p ::¡ rTJ c: s.: J>o r- -< /'T1:;r., c..., J>- ~ ~~ :;r.,z ;t:Ig r.;2 <::::I Þ» :z:- -0 0::::: :x ("')/'T' -"þ ~ ~o ::!!-r¡ C'J ("):""1 ,..., 1'Tt::: N z ::0 - -1 CA /'T1 :0 e e Objection (Request For Postponement) To Establishment Of Pool Rules Raven Oil Pool The Heirs of Andrew Oenga (Oengà Heirs) object or more specifically request the postponement of establishment of Pool Rules for the Raven Oil Pool. Interest of Parties State of Alaska - The State of Alaska (State) is the holder of the subsurface rights to oil referred to as the Raven Oil Pool. The Alaska Oil and Gas Conservation Commission (Commission), pursuant to application ofBP Exploration (Alaska) Inc., is proposing to establish "Pool Rules" for the Raven Oil Pool. Oenga Heirs - The heirs of Andrew Oenga (Oenga Hell's) are the holders of the surface rights to Heald Point through BIA Allotment F -14632 Parcel B. They have leased those surface rights to BP for the purposes contained in the leases. BIA Lease F-89-01. BP Exploration (Alaska) Inc. (DP) - BP has constructed a long reach directional drilling production facility on the Heald POlllt property. That lease authorizes use of that property in conjunction with the Niakuk Project, which BP has defined as development and production of "our Nialcuk oil accmnulation." See Attachment A. 1 Objection To Raven Oil Pool Rules Objection (Request for Postponement) - The Oenga Heirs object and ask the Commission to postpone establishing Pool Rules for the Raven Pool until the Heald POlllt surface rights lease has been modified to allow for production of oil fì.-ol11 the Raven Pool through the surface rights leased for the Heald Point facility. Reason for Objection - The Oenga Heirs wish to make clear that they do not object to exploration or development of North Slope oil reserves. Their concem is the same as the State's - that it be done in an appropriate and orderly way. It is especially appropriate that smface leases for oil production facilities authorize the use being made of those facilities before production begins. Otherwise, production may be intenupted as the various interests are determined in proceedings that may ultimately intertwine the State. While the Oenga Hell's / BP lease does allow production thm Heald POlllt from the Niakuk Project (Nialcuk) Pool WlderlYlllg the Niakuk P.A. it does 110t allow production from any pool or P.A. other thall Niakuk thru the Heald Point property. As such, it is requested that adoption of the Raven Pool Rules be postponed Wltil BP Call ~learly demonstrate to the Commission that they have authority to develop the Raven Pool tIUll the Heald Point facility or th1"u some other facility. t/ ~ ~~, Tony Delia Heir of Andrew Oeílga 1 All other Oenga/BP lease documents other than the attached letter are publicly recorded and can be found in the Barrow Recording District at Book 53, Page 873 et. seq., Book 74 Page 293 et. seq. and Book 79 Page 223. e e : ""':-:~:-'h~<~ -..". , BP EXPLORATION liP Explor.IIGII «"tuka) Inc. MO elll 8enaon 80ulevald P.Ð. IIÔX 11&112 "'nchÐralJf. Alaska 99S1N612 (eD?) 511-&." July 29, 1993 Mr. Samuel Demientieff, Superintendent Bureau of Indian Affairs 101 1~h Avenue, BDx 16 Fairbanks, Alaska 99701 ,Notification of N~aky.k Proj~.Çtço·rnrnenœment . . R~QueSjto A.mend Surfac.e le.ase F8:9-01 Dear Mr. Demientieff: On January 1, 1989, BP Expioratton (Alaska) Inc. (formerly Standard Alaska Production Company) entered into a surface lease agreement with Mr. Andrew Oengafor 10 acres of his 40 acre native allotment (F-14632) on Heald Point. The Lease provided authorization for BP 10 construct production facilities to support development of, and production from, our Niakuk oil accumulation. " Pu~uq.nt to requirements of Section 1. of the Lease, BP hereby provides notice to the Bureau of Indian Affairs that the first phase of the Niakuk Development Project: has been approved and that development will procede on an accelerated schedulè during the letter haff ·of 1993. Further pursuant to Sedion 1, the Lease is converted from: a year~10·Yf:Jar basis to a fixed twenty· five year term. In order tø make effective use of both the leased and Unleased Premises and topr.ótect our facilities from ·efosion, anarmoréd pf.oductioh pad ·wit) be CGRStrtJcted at the tip of Heald Pøint. We have åfSC redesigned and relocated our ,pipelines tathe east ... of the access -road. . . ConsequentlY.pulSuant te Sect40n 11 of the Lease, BP hereby requests that the lease be ameRded so . to increase the size of the Leased Pr.,mi$es ~m 10 aères to 20 a,cre.s elective August 1, 1993. The new Leased premi$es are shown GO the endesed·tenemllocation map. We will pr.o'li* 'yeti With a. ·mere detailed eKhibit to be attathéd te the lease as $o.o·n as it beÐÐ'JI08S availaÐ1e. . Refit for the enlarged ~e~~~Q Premises wilJ be due January 1, 1994 and w1tI be prorated back to thèéf.féctivé date Ðf. the lease amendmeflt. Please iAdicate yø~r ~.røv_f of this amend~flt by sigAing in the space prøviQed below aM ~~Uf.<AJAø ORe Drigißal of this letter to the undersigned at our letter.nead ad4re.. The remaining original is for your recoros. - e J;.r. Saml:Jef Dimeintieff ~uly 29, 1993 , Page 2 . We would appreciate your earty attention to this matter as we hope to be in a position to begin gravel placement in early August.. Please contact meat 564- 4841 if you have any questions er if you need any addUonal information. - Sincerely, . ÁPµ Sty· Hirsh, CPL Senior Landman The within Lease Amendment is hereby approved, pursuant to the aüthority delegated by 209 DM B dated November 17.1981, Secretary's Order No. 3150 dated May 11, 1992, as. amended March 5. 1993. and 10 SIAM Bulletin 13~qated November 19, 1992, as amended April 8, 1993, and the Addendum to 10 BIAM 3. dated January 17, 1989. ~fi/~?~~ Samuel Demientieff, Supe . . endent "Bur-eau of Indian Affairs Fairbanks, Agency ~, J -,., Date -*\3 . . STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION NAME - AFFILIATION (PLEASE PRINT) :rOG' PEtf<k/iÝ.Ç" --- .JOh^ E. C.'Yr GAR~ ~.ù~"T~~SO~ ()~.J~l L~'^J ~O AI GoL:rz... S~( 6b~ò Prudhoe Bay Unit, Raven March 30, 2006 at 9:00 am ADDRESS/PHONE NUMBER 793-Ò\3.00 b i%SJ ~ tIbb . SId /.-. s;. CfI.5ô / 5l,&o\-'1~ g~ ~tA¡)~CV\t~\~ 4ó\CIØ e. e~ Q\~, ""51" \.. \ \ 10<> t:; (k,fp. ",,,)! ~'f- 5)0/ 100 6, S.f. I:}PV e. g[).JSt)/Ú 81.-11/> /~~'I' 5""9'1:2... TESTIFY (Yes or No) ;17 ¡þ.ees~ -¡¡j I F N6C€.S.5At..~ NO (Ùo ¡Jo ~ #1:1. . . GARY A. ZIPKIN LOUIS R. VEERMAN JAMES D. LINXWILER JAMES D. DEWITT JOSEPH J. PERKINS. JR. GEORGE R. LYLE MICHAEL S. MCLAUGHLIN SUSAN M. WEST JOAN E. ROHLF MICHAEL K. NAVE JONATHANA.WOODMAN AISHA TINKER BRAY NELLEENE A. BOOTHBY MATTHEW COOPER CHRISTINA RANKIN PAMELA D. WEISS JOSEPH BRIAN GROSS MOLLY C. BROWN LAW OFFICES OF Guess&Rudd P.C. W. EUGENE GUESS 1932·1975 JOSEPH RUDD 1933-1978 FRANCIS E. SMITH, JR. 1941·1991 510 L STREET, SUITE 700 ANCHORAGE, ALASKA 99501-1964 TELEPHONE (907) 793-2200 FACSIMILE (907) 793-2299 OFFICES IN ANCHORAGE & FAIRBANKS OF COUNSEL MARGARET S. JONES GREGORY G. SILVEY March 30, 2006 HAND DELIVERED @ f~ ?nn,O'" iJ¡ v c..uU· Alaska Oil & Gas Conservation Commission 333 W. 7th Ave., Suite 100 Anchorage, Alaska 9950 I Re: Responsive comments of BP Exploration (Alaska) Inc. to comments of heirs of Andrew Oenga on BPX's request to the AOGCC to issue an area injection order and pool rules under 20 AAC 25.460 and 20 AAC 25.520, respectively, to govern development of the proposed Raven Oil Pool, Prudhoe Bay Field Dear Commissioners: On behalf of BP Exploration (Alaska) Inc. (lfBPXIf), operator of the Prudhoe Bay Field, we hereby submit the following brief response to the comments submitted on March 28, 2006, by the heirs of Andrew Oenga ("Oenga Heirs") on the captioned application. I. Attached hereto is a copy of the Lease Agreement granted by Andrew Oenga to BPX, as subsequently amended and supplemented (said Lease Agreement as subsequently amended and supplemented is referred to hereinafter as the "BIA Lease No. F-89-0 I "). This lease is in full force and effect. BPX has paid all amounts due and owing to Andrew Oenga or to the Oenga heirs under said lease. 2. Pursuant to the BIA Lease No. F-89-0 I, Andrew Oenga expressly granted to BPX all of the surface rights that BP needs in order to explore and develop the Raven Oil Pool and to produce unitized substances from the Raven Oil Pool through BPX's Heald Point facilities. In particular, and without limiting the generality of the foregoing, BPX notes that the relevant grant clauses of BIA Lease No. F-89-01 provide as follows: 10. Use of Leased Premises: The Lessee may use the leased premises for any and all oil field exploration, development, construction, facilities, production and support . . Alaska Oil & Gas Conservation Commission March 30, 2006 Page 2 purposes, and for any other uses and purposes reasonably or conveniently related thereto.... 11. Improvements: The Lessee may construct any facilities (pipelines, access roads, causeway approaches, drilling pads, a [sic] construction staging pads or any other required facilities) on the leased premises.... 3. The Raven Oil Pool is situated within some of the same lands and leases as the Niakuk Pool. The Raven Oil Pool is situated stratigraphically below but otherwise within the same basic geologic structure as the Niakuk Pool. 4. Given the breadth of the grant clauses set forth above and the fact that the BIA Lease No. F-89-0 1 is structured as a lease granting exclusive possession for oil and gas purposes rather than a mere easement appurtenant to the lands and leases containing the Niakuk and Raven Pools, there is no basis for concluding that the BIA Lease No. F-89-0 1 does not authorize BPX to use the leased surface to develop the Raven Oil Pool. Indeed, even if the BIA Lease No. F-89-01 had been structured only as an easement appurtenant to the lands and leases containing the Niakuk and Raven Pools rather than as a lease granting exclusive possession for all oil and gas purposes, BPX still would be authorized by such grant to use the Heald Point facilities to produce unitized substances from the Raven Oil Pool. 5. The AOGCC does not adjudicate disputes respecting surface ownership or disputes arising under surface leases. These are matters for the courts-and in this case because the involved surface comprises a Native allotment, any such dispute is solely a matter for the Secretary of the Interior and, if necessary, the federal courts. 25 D.S.C. § 345. In light of the points enumerated above, the Commission should approve BPX's request for an Area Injection Order and Pool Rules to govern development of the Raven Oil Pool. Any dispute between the parties respecting the adequacy or scope of the grants made by the BIA Lease No. F-89-01 or whether the BIA Lease No. F-89-01 is in good standing is for resolution in another forum. . . Alaska Oil & Gas Conservation Commission March 30, 2006 Page 3 .::?/1.J RESPECTFULLY SUBMITTED this JfJ day of March, 2006. GUESS & RUDD P.C. Counsel for BP Exploration (Alaska) Inc. . . ATTACHMENT BIA Lease No. F-89-0 1 1. Lease Agreement (BIA Lease No. F-89-01), effective January 20, 1994, and recorded on February 1, 1989, at Book 53, Pages 873-890, Barrow Recording District. 2. Agreement To Amend BIA Lease F-89-01, effective January 20, 1994, and recorded on May 2, 1994, at Book 74, Pages 292-298, Barrow Recording District. 3. Third [sic] Amendment To BIA Lease F-89-01, effective May 11, 1995, and recorded on June 14, 1995, at Book 79, Pages 223-227, Barrow Recording District. '. . BGCI! a053f'~:ì[ 873 u.s. Department of the Interior Bureau of Indian Affai rs. lEASE AGREEMENT BIA lease No. F-89-01 THIS lease Agreement is made and entered into effective January 1. 1989. by and between Andrew Oenga. an Alaska Natfve. ·of 8arrow. Alaska [with the approval of the Secretary of the Department of the Interior (the "Secretary") or his duly authorized representative. acting for. and on behal f of Mr. Oenga] hereinafter referred to as the "lessor": and Standard Alaska Production Company, a Delaware corporation, its agents, assigns. contractors, subcontractors and/or sUblessees, hereinafter cal1ed "lessee". in accordance with the provisions of existing law and regulations at [25 eFR 162 (987)] which ~y reference are made a part hereof. WITNESSETH, that for and in con~ideration of the mutua1 covenants and agreements provided herein, the lessor her-eby leases to the lessee ten (0) acres of land. the "1eased premises", which comprises a portion of lessor's present and future interests in Parcel B of Alaska Native Allotment application F-14632. Said allotment is described as U.S. Survey 6904 T11N. RISE UN Sec. I and T1lN, RISE UN Sec. 36. The remainder of the Native Allotment constitutes the "unleased premises". The allotment and leased premises are shown on the attached Exhibit A. 1. lease Term: The term of this lease Agreement shall be for twenty-five (25) years beginning on January 1. 1989. and expiring at midnight on December 31. 2014. unless extended or unless sooner terminated pursuant to the terms of this lease Agreement. The anniversary date of this lease Agreement is January 1st of each year following the year in which this lease Agreement was executed. The first ten years of the Tease term sha11 constitute a period within which the lessee shall attempt to obtain required permits for the N\akuk Project. 1 . .. !G~I fi053r.'.!:[ 874 During this period, unless written notice to procede has been served, Lessee has the option to cancel this lease Agreement at any time. If lessee cancels this Lease Agreement, Lessee shall provide written nott ce of such cancellation to the lessor and the Superintendent. Bureau of Indian Affairs in Fairbanks, Alaska not less than ninety (90) days .prior to any anniversary date of this' Lease Agreement. Cancel1ation of this lease Agreement shaH not be effective unless the written notice required herein is timely received. Also during the initial ten (0) year period, lessee must notify the lessor and the Superintendent, Bureau of Indian Affairs in Fairbanks, Alaska of the , status of the permitting process and/or of the Niakuk Project. Such notice shall be given at the time the annual rental payments are made and at any other time that, in the opinion of the lessee, such notlce is either warranted and/or appropriate; provided however, that such notice is required within ninety (90) days of the date the Niakuk Project is either fully permitted or the project is cancelled or delayed. If les see serves written noti ce that it intends to procede wi th the Ni akule Project, then this lease will be deemed to have been taken for consecutive five (5) year periods and provisions of Section 15 sha11 become operative and . effective on the next ensuing anniversary date of this lease Agreement. If the final period is less than five (5) years, lessee sha11 only be obligated for rental payments up to the éxpiration date of this lease Agreement or any extension thereof. At the end of thts initial ten (10) year period, provisions of Section 15 automaticalty become effective and operative. 2. Option to Extend: The lessee shall have the option. at its sole discretion, to extend the term of this lease Agreement for additional five (5) year periods up to a maximum of twenty-five (25) years at the end of the original lease term. Notification of the exercise of this option shall be made in writing. not less than ninety (90), days prior to the original expiration date of this lease Agreément. 3. lease Bonus: As a bonus for executi ng this lease Agreement, Lessee hereby agrees to pay Lessor the sum of twenty-five thousand dollars. 2 · i. SOOK 0053 rAGE 875 The bonus shall be paid upon approval of this lease Agreement by the Superintendant, -Bureau of Indian Affairs Fairbanks Agency. I 4. Lease Rentals: As rental for the leased premhes, the lessee agrees to pay the U.5.0.1. - Bureau of Indian Affairs for Andrew Oenga. clo Bureau of Indian Affairs, 101 12th Avenue Box 16, Fairbanks, Alaska 99701 for credit to the lessors Indian Individual Money Account (account #985-U183) the sum of $16,000 per year ($l,600.00/acre X 10 acres) for each of the first five (5) years of the lease Agreement. lessee sha11 not be obligated to change either the designated payee or deposttory unless notified 1n writing, pursuant to section 31 below, at least sixty (60) days prior to the anniversary date of this Lease Agreement. lease rental payments are due on the anniversary date of the lease and are payable in advance for the next succeeding year. In the event of the death of the lessor during the term of this lease Agreement, and while the leased premises are in restricted status, all rentals remaining due or payable to the decedent or his representative under the provisions of the lease shall be paid to the Superintendent. Bureau of Indian Affairs, 101 12th Avenue Box 16, Fairbanks, Alaska 99101 for credit to the lessors Indian Individual Money Account. (For the purposes of this Lease Agreement, it is understood that restricted status is defined as a land status where lands are restricted or held for the beneftt of Indians and are not subject to taxation; nor to alienation or encumbrances, andlor encroachment without the consent of the Secretary of Interior or his delegated representative.) While the leased premises are in restricted status, the Secretary may, in his discretion, suspend the direct rental payment provisions of this lease. in which event the rentals shall be paid to the Superintendent. Bureau of Indian Affairs, Fairbanks, Alaska for credit to the account of this Lease Agreement. 5. lease Rental Adjustments: Rental payments may be increased at successive five-year intervals beginning in the sixth year after rental payments have begun. Such adjustments will be based upon either the fafr market undeveloped rental value for the property established by a Bureau of Indian Affairs appraisal (see section 9, Reappraisal Procedures) or the 3 - _. tOOK()()~~FAGE~j7fi I II adjustment wnl be based on the application of a "Cost Adjustment Factor-: which ever is greater. For the purposes of this lease Agreement, ·Cost Adjustment Factor" shall mean the ratio of (n the most recently publhhed Consumer Price Index to ('i) the most recently published Consumer Price Index as of the execution date of this lease Agreement. The Consumer Price Index shall mean the U.S. Consumer Price Index, all items and all urban conSUJDers. U. S. ci ty average. 1982-84 equa 15 100, as fi rs t pub 11 shed. wi thout seasonal adjustment. by the Bureau of labor Stathti cs, Department of labor, without regard to subsequent revisions or corrections by such Bureau. for the second and subsequent rental adjustments, the "Cost Adjustment Factor" shall mean the ratio of (1) the most recently pUblished Consumer Price Index to (i1) the difference between the most recently published Consumer 'Price Index and the Consumer Price Index upon which the previous rental adjustment was or would have been based. Should this index be changed, altered, or ceased to be published the following wIll apply: a) If subject index is changed so that the base year d1 ffers from that used as of the year in whi ch the term commences. the subject index shall be converted in acéordance with the conversion factor published by the publisher of that index: b) if the sUbject index is discontinued or revised during the term of this agreement such index shall be repl aced by another government index which wi 11 obtain substant1al1y the same results as would be obtained if the sUbject index had not been dhcontinued or revised. It is agreed and understood by all parties that the rental payments will not escalate by more than 50% 1n any single five (5) year period. I 6. Delinquent Rental Payment: Any payment received after the fi fteenth C15th) day subsequent to the anniversary date of each year during the lease term shall be considered delinquent and a late fee of $250.00 wtl1 be assessed. 7. Interest on Renta15 Past Due: If any rental payment is not paid within thirty (30) days after becoming due. interest at the rate of eigbteen (18) percent per annum. compounded annually. will become due and payable from the day such rental was due. and will run until the delinquent rental is paid. 8. Default and Remedies: If the lessee should fail to perform or to comply with any term Of condition of this lease Agreement. the lessof, 4 '. . . .~ BOOK 0053 PAGE 877 after written notice giving Lessor a ten (10) day period within which to respond, may pursue his rights to re-enter, re-let, evict, terminate the lease Agreement or recover rents or any other remedy he has under law. lessee shall be given a reasonable time to cure such default or breach. Such a violation of the lease Agreement ,sha11 aho be acted upon in accordance with the regulation at 25 CFR 162.14 (987), so long as title to the leased premises remains restricted by the Secretary. 9. Reappra.isal Procedures: Neither the Secretary nor any appraiser may consider the rentals provided for in this lease Agreement for any purpose in determining the fair market rental rate pursuant ~o Para.graph 3 of this lease Agreement. The Bureau of Indian Affairs review for purposes of ~ eS,tablishinð9 the fair rental value of the prem',ses shdall betb~Sedd ont tthhe iji h ghest an best use of the premises as raw. un mprove vacan ,an a e ~I time of the appraisal and shall not be based on the cost or value of ; ¡'."rove.ents or developments made by the lessee or any Income the lessee . derives from the 1 eased premises. In all cases. lessee sha11 be a proper party with standing to contest the reasonableness of the Secretary's rental determination. If. during the term of this lease Agreement. Lessor receives unrestricted title tò the premises. the functions assigned to the Secretary hereunder shall be performed by a designated appraiser mutually acceptable to the parties, with the costs of such appraisal to be borne equally by the parties. 10. Use of Leased/Unl eased Premi ses: The lessee may use the 1 eased premises for any and all oil field exploration. development, construction. facilities. production and support purposes. and for any other uses and purposes reasonably or conveniently related thereto. The unleased premises may be used for geotechnical. survey and design work at any time prior to convnencement of construction activities. Said uses shall be without cost to lessee and wi11 not require separate or additional permits from the Lessor. The lesse~ shall make no unlawful uses of the leased andlor unleased premises, or knowingly permit any unlawful activity to be conducted thereon by others. 5 . . eO~K(J()t)~rACE~Jr~ 11. Improvements: The lessee may construct any faciltties (pipelines, access roads, causeway approaches, dri111ng pads. a construction staging pads or any other required facilities) on the leased premises as long as construction is 1 imited to the ten' (0) acres as hereto described on Exhibit A. Thh lease Agreement may be amended to increase or decrease the size of the leased premises at any time at lessee(s sole discretion. If the leasedpremhes is so increased or decreased, lessee shall proportionately " increase or decrease its lease rental payments effeçtive on the next ensuing lease anniversary date after such increase or decrease; provided however that rental amounts shall be pro rated beginning on the date that leased premises J~ is increased or decreased. It is agreed and understood by all parths that II the 1 eased premises cannot be reduced to 1 ess than the ten (10.0> acres original1y taken under this lease Agreement. All improvements placed on the leased premises by the Lessee shall remain the property of the Lessee during the term of this lease Agreement and any extension thereof. and shall become the property of the less9r at the final expiration of this lease Agreement or any extension thereof. Prior to the expiration or termination of this lease Agreement. lessee may remove any improvement. provided that lessee restore the leased premises to a condition satisfactory to the Secretary and the regulatory agencies with jurisdiction over this project. The lessee shall not remove permanent improvements such as gravel pads. util Hi es and permanent structures that regulatory agencies determine cannot be removed without substantial damage to either the structure(s) or the leased premises. 12. Maintenance of leased Premises: The lessee. at its sole expense. shall keep the leased premises, and any improvements placed thereon. in good order and repair. ordinary wear and tear excepted. 13. Sublease: lessee may sublease all or portions of the leased premi ses to others. as it may see fi t. for uses permitted under this lease Agreement; provided, however, that the lessee shal1 remain primarily responsible to the lessor for the payment of annual rentals when due. and for the observance of all terms and conditions of this lease Agreement. 14. Surrender at End of Term: The lessee agrees that upon the last day of the lease term, or upon the last day of any extension thereof. it will 6 . . !OOK(J()~~fAG[fSj7~ peaceably and quietly vacate and s~rrender the leased premises to the lessor, free and clear of any hazardous waste and lor material and in a condition sathfactory to the Secretary and the regulatory agencies with jurisdiction over this project. The lessee agrees that it will in a similar manner vacate and surrender in good condition any impfovements remaining on the premises, ordinary wear and tear excepted. The Lessee makes no warranty of fitness for a parti cul ar purpose or warranty of merchantabll ity for any improvements left on the leased premises. 15. Option to Cancel: lessee may, for any reason, cancel this lease Agreement at the end of each five (5) year period during the lease Agreement term or any extension thereof. Such cancellation will be effective uppn written notice to the lessor and the Superintendent, Bureau of Indian Affairs in Fairbanks, Alaska not less than ninety (90) days prior to the end of each five (5) year period. 16. Termination for Acts' of God: The lessee sha11 have the right to cancel this lease Agreement. and a11 of its ob11gations hereunder, after serving written notice consistent with other cancel1ationprovisions in the lease Agreement. one year after an event constituting an act of god. As used in thi s lease Agreement, an act of god means the prevention of lessee from complying with any expressed or implied covenant of this lease Agreement after efforts made in good faith, by reason of war, riots. acts of God, 'severe weather, acts of governmental authorities, failure or lack of adequate transportation facilities, or any other cause beyond Lessee's reasonable control whether similar to those enumerated or not. 17. Insurance: The lessee hereby certifies that it is self-insured for any liability incurred under this lease Agreement for an amount up to $5 million. The lessor shall receive the benefit of such self-insurance in the same fashion as if he were co-insured. If self-insurance sha11 cease, the lessee shall furnish the lessor with certifi.cates of insurance in an equivalent amount. lB. Indemnification of the lessor: The lessee shall protect, indemnify. and save the lessor harmless against any and all liabilities, 7 . ~o!053 PACt 880 claims. damages. penalties. litigation. or costs and expenses related thereto (including. without limitation. reasonable attorney's fees) which may be imposed upon. incurred by. or' asserted against.the lessor by reason of (a) any . . accident or injury tò. or death of ariy per.son. or loss or damage to any personal or real property occurring on· the leased premises. or any part thereof; (b) any use. non-use or condition of the leased premises. or any part thereof; (c) any failure on the part of lessee to perform. forebear. or otherwi se comply wi.th any of the terms of thi s lease Agreement; (d) performance of any labor. services, or the furnishing of any materials wtth respect to the leased premises. or any part thereof. If any lawsuit or administrative proceeding is brought against the lessor by reason of any such occurrence. the lessee shall. upon the lessor's request.· defend the suit or proceeding. or cause the same to be defended by counsel designated by the lessee. Notice of such a proceeding shall be ghen by the lessor to the lessee as soon as practicable. and in no event later than ten (10) days after the lessor has received not'ce of such a proceed'~g. 19. No Claims Against lessor: Nothing contained in this lease Agreement shall comprise the consent or request by the lessor. whether expressed or implied. for the performance of any labor or services. or the furnishing of materials or other property, with respect to the leased premises or any part thereof; nor shal1 it give the lessee any right. power. or authority to contract for or permit the performance of any labor or services. or the furnishing of any materials or other property. in any manner which would permit the making of a valid claim for payment against the lessor. 20. Condition of the leased Premises: The lessee agrees that it is entirely familiar with the physical condition of the leased premises. The less9f makes no representation or warranty with respect to the condi tion of the leased premises. nor with respect to its fitness or availability for any particular use or purpose. The lessor shall not be liable for any latent or patent defect in the leased premises. 21. Approval: It is understood and agreed 'between the lessor and the lessee that this lease Agreement, and any subsequent amendment or extension thereto. sha11 be valid and binding only after approval by the 8 - ---- ~oOK0053PAGt88f Secretary or his authorized delegate pursuant to 25 CFR 162 (1987). except as may be provided in paragraph 26·here1n. 22. Re11n.quishmenf of Restricted Tit1e by the Secretary: Nothing contained in this lease Agreement shall delay or prevent a termination- of federal trust responsibilities with respect to the leased premises, by issuance of a fee patent or otherwise during the term of this lease Agreement or any extension thereof. Terminat10nof such responsibilities shall not act to abrogate the lease Agreement._ The Secretary shall nott fy the lessor and the lessee of any such change in the legal status .of title to the leased premises. If a certificate of competency removing restrictions against alienation or encumbrance is issued by the Secret~ry to the Lessor, it shall be promptly recorded' by the Lessor, and thereafter all references tn thi s lease Agreement to the powers. duties; or discret'on of the Secretary regarding this lease Agreement. or any extension thereof, shall have no further applicability or effect. 23. Taxes and Assessments: The lessee shall be responsible fOf, and shall t'mely pay, all lawful federal. state, borough or local taxes, fees. or assessments ('ncluding any interest and penalties thereon) which during the term of th1 s lease Agreement are assessed, 1 evi ed, imposed upon, or become a l'en upon the leased premises or any interest therein, or upon any alteration, addition, or improvement thereto. or upon personal property of any kind owned by and placed upon the leased premises by the lesse'e, or upon any occupancy, use or possession of the leased premises or any.part thereof, before any fine, penalty, interest. or cost becomes applicable. lessor shall promptly provide to the lessee all notices of levy, taxation, assessment or lien which lessor receives with respect to the leased premises. and the lessee shall have full authority to contest or seek adjustment of any such tax or assessment, by appropriate administrative or judicial proceedings.. The Lessee shal1 not be obligated to pay any such taxes, fees or assessments which it is contesting In good faith, until the final adjudication of such dispute. It shall take reasonable action, however, to assure that Lessor's interest in the premises is not prejudiced-by such contest. 24. Eminent Domain: If the leased premises, or any part thereof, is condemned or taken by eminent domain for any 1awfu1 use or purpose, then as 9 ~~' ----' EO~~- 0053 r,,~[8S2 ( to the portion so taken, the term of this lease Agreement shall term1nat~ as _ of the date of title vesting in such proceeding, a11 rentals then due shall be paid to that date, and the part1es shall therea~ter have -no clafm against each other for the value of the unexpi red term of the leàse Agreement as to that portion. In the event of any suc'h condemnation or taking, whether whole or partial, the lessee shall be entitled to a JU:Q µn share of the award paid for such condemnation, based upon the proportion of the award attributable- to the value of any improvements placed upon the leased p~em'ses by the lessee. 25. Inspection: The Secretary. the lessor, and their authorized representatives may enter the leased premises or any part thereof at all reasònable times and subject to reasonable conditions, including but not limited to, reasonable notice to Lessee. for the purposes of inspecting the premi s~s, except that the ~ecretary and hi s authorized representatives may inspect as authorized by law or to exerc1se any other right of lessor provided in thi s lea·se. 26. Right of Access: The Lessor retains a right of reasonable acces s acros s the 1 eased premi ses. Such access shall not confl i ct wi th the purposes of thi s Lease Agreement or the uses and improvements authorized hereunder. For purposes of such access, the lessor shall be entitled to use the access road constructed by Lessee pursuant to this lease Agreement. subject to compliance with Prudhoe Bay Unit security procedures. 27. Entire Agreement: This Lease Agreement, together with any exhibits attached hereto. comprises the entire agreement and sets forth al1 prior covenants, promises. agreements. conditions. and understandings. whether ora 1 or wri tten, between the les sor and the lessee and concerni ng the 1 eased premises. No subsequent agreement. condition or understanding, whether oral or wri tten, whi ch 1 s not set forth in thi s lease Agreement. or in any duly-approved written amendment thereto, shall be enforceable unless it is reduced to writing and signed by all the parties to this Lease Agreement. 28. Lease Amendment and Interpretation: If any provision of this lease Agreement. or the application thereof. is invalid or unenforceable, the rema i nder of thi s Lease Agreement and other appl i cati ens of such previ S1 ons 10 ~' SOOK 0053 rAGE 883 shall not be affected by it, unless otherwise specifically provided herein. This Lease Agreement may be changed, waived, discharged, or terminated only by a document in writing sign·ed by the party. against whom enforcement of such change, waiver, discharge, or termination is sought. The paragraph headings 1 n th1 s lease Agreement are for purposes of reference only, and sha 11 not 1 i mi t or defi ne the meani ng of such paragraphs. Th1 s Lease Agreement may- be executed 1 n several counterparts, each of whi ch is an or1 g1 na 1, but all of which shall constitute one instrument. 29. Waivers: The waiver of any ·breach or default of any covenant, condition or stipulat1~n contained here;·n shall not be deemed to cause a waiver of any subsequent breach or default of the same or any other covenant," condition or stipulation, nor shall any failure to enforce any right or seek any remedy with respect to any obligation under this Lease Agreement prejudice or affect the future rights or remedies of the parties. 30. Successors in Interest: Each term, covenant, and condition contained in this Lease shall be binding upon and shall inure to the benefit of the heirs, executors, administrators, successors, and assigns of the . parties hereto. So long as title to the leased premises is in a restricted status, all of the Lessee's obligations under this lease Agreement shall run to the United States as well as to the lessor. 31. Notices: All notices and other communications required or convenient under this lease Agreement shall be in writing, and sha1l be deemed to have been given when mailed by first class certified mail, postage prepaid thereon, and addressed as follows: (a) Superintendent, Bureau of Indian Affairs, 101 12th Ave. Box 16, Fairbanks, Alaska 99701, or at such other addres s as the Secretary shall have furn; shed to the "parti es t n wri ti ng: (b) LESSOR: Mr. Andrew Oenga, P.O. Box 201, Barrow, Alask.a 99723, or at such other address as the Lessor sha 11 have furnf shed to the parti es in wri ti ng; and" (c) Standard Alaska Production Company, Attn: land Manager, P.O. Box 196612, Anchorage, Alaska 99519-6612, or at such other address as the Lessee shall have furnished to the parties in writing.- Notices to Lessee regarding any changes of rental recipient (payee) and lor depository shall not be binding upon lessee unless said notice is received at least sixty (60) days prior to the lease Agreement ann1versary date. 11 '-' Jlt1053 P4GE 884 32. Interest of Members of Congress or Department: No member of Congress, or agent of the Department of the Interior, shal~ receive any share of this lease Agreement, or' any benefit that may arise herefrom. This provision shall not be construed to extend to the general benefits received by the lessee as a corporation, on behalf of all of its shareholders: 33. Corporate Qualification: Standard Alåska Production Company certifies that it is in all respects qualified to enter into and perform this lease Agreement, as attested by Bureau of land Management qualification.. file 063890 and State of Alaska qualification file ADL QF-1768. "The lessor has the fo 11 owi ng current bonds on fi 1 e: A 1 ask.a Oi 1 and Gas Con5ervati on Commi 551 on Bond 25100302630-217 ($200.000>, Alaska Statewide Oil and Gas Bond 25100302630-295 ($500.000) and Alaska Statewide Miscellaneous land Use Bond 64Sl0052736BCA ($1.000.000). 12 13 ~~~~!: AI!; My Commissf6n Expires: /~7/9L . / I' The foregoi ng i ns trume~ w~ acknowl edged before ,g~ "1V'-M¥JI" . 1989 bya.lh,." Y fA'v:.:jhe -lessor. 1:"-: 'r.,~<u..¡......,.¿ 0 . . .......': ~ . D I;':'· . . ~ ~ ......... 1.- fl. /: ~:.t..... -: ~ ......'/ >~ .'( .¡ ..o'.}:' .. r"\ ,... h Y .~ í- - ~ - J. \.... . r· ~ . :::._ : ''-' c, '=; .1' ~ . :: . ~ PU~\.\ .,,:n:: = ::. -:. ~ WÞ . ;.:... '- i ~.. -;: I.... .,. ",. -~ ~..: "'::,::' -:" ..~...... .. ~.:: t r \.. ..- ...' --:',~.r ........ ....~._ ...: "'" --:. í- .' ".' "'4·'ø '.. .... ,,\,. ",.,..,,:1,0-\ me thi s ¡/;t...... day STATE OF ALASKA ) ) SSe SECOND JUDICIAL DISTRICT ) Approved as to form and substance. and with the further assurance that this Agreement and its consequences have been explained to Andrew Oenga in· a language 1n which he is fluent: By: 4(). t9iø-U By: {7~-eÞ ()t ~~ Andrew Oenga 0 DATED: ~ß. /~ /fðJ FOR THE LESSOR: BOOK0053fAGE885 .--- '-' ----. 8oor.0053fAG£886 AFFIDAVIT OF INTERPRETER· I, ~ II. ()~/L ,of lawful age, being first duly sworn state the following: I interpreted this Lease Agreement for Andrew Oenga in the language in which he is fluent CInupiaq) o~ JIf1J /1 . 1989: and I performed a true translation of this Lease Agreement; and that Hr. Oenga stated that he executed this lease Agreement of his own free will and was not acting under duress. menace. fraud or undue influence of any person; and that Mr. Oanga declar~d that he fully understood this lease Agreement. Ilr--O. ~f) STATE OF ALASKA ) ) SSe SECOND JUDICIAL DISTRICT ) . ÇL The for:goi ng ins trument was sworn to and execute}'~re me this /'1 day of ~···'LlA.7 1989, by ftji- f2. ~~);: A. _ / _ ~ \!o..~...o...... ~~~.~)s;-I~'Lß;- ~fV- . ,0' C I", ~ .'; ,,~"·~"'.~...~':.'"~I·'.·"" . Notary Pub ic ... .<~:;. ! I<.t:··· -:: .....~. . '\ . ,~.;;:" i-t..- \~1M,?Y ",-: :. ~."L . :;.'. f~:[' PU-;-L~C, ~~~;, ~ My Commission Expires ¡) ï'/P L ~ ':- ~ "'.. Ü \ ~c: 0 :- I - J. -- . f .. ,,- . ~ 0::'.. ...~.,. . -- \)...... .: , ." .t- . .- · -~ . ~ ~ ....... 0 f ,...~.. ""' l .,".. .~, .;..........-1" r : .. ,......' . ':. ""'" ,¡~ }~ ...~~".., '. ,...,: ""'Iò'UUIU"" 14 .~- FOR THE LESSEE: .~ E(j~j( 0053 r'AGE 887 Standard Alaska Production Company DATED: Approved as to form and substance: / /" .--:4¡" / A~~ /, , / -. John,A. Reeder, Senior Attorney STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) By: Its: Cjr)01 ': iJ-# J- The foregoi ng instrument was acknowl edged before me thi s I b~ day of t1n ~1 ~~ . 1989 by a.N· AlF-L.. '5 oN . the Th E~ I /) eJtl í of Standard A1as~a~'~~oduction Company, a Delaware corporation. on behalf of the corporation. c7ft9-b1fh '-1h" ~jp-~ NOTARY PUBLIC in and forV(laska My Cammi ssian Expi res: e¡ BjR9 . J" '. .........'..II,··"l c" /~.i::~:'~ ~:" !,?S>\ -.: , .' ,f'j, ~ \ n . . -: , L< f ~\ ,~.- G ~ .' ~ .. ~¡; .. D!.n,". :: '.~ "... v.:J Y'.'- :- '! . . ...." .., ..... ...... .. .,' . .. . . . . - - '.,. ."....':'-, . .:.. .I""tfl"'~"\"-'· .. 15 -~....,J ',-, MOt< 0053 fAGE 888· FOR THE SECRETARY Of THE INTERIOR: The within Lease Agreement is hereby approved. this ./£:- day of-1:~.:..".¿~ 1989. pursuant to the authority delegated in Departmental Manual Release Number 2784: 230 DM 1-3, March 16, 1988 and redelegated by addendu~ to 10 BIAM, July 1. 1988~ DEPARTMENT OF THE INTERIOR BUREAU OF INDIAN AFFAIRS DATED: t, ~~ì"¡:¡? BU¡¡;j¡lL,~,.o- .~ y 7 (f>". (~ fif. I.l 'I ((r.'¿' "",.f;.t: .~~ -" ~u~"intenden~' . Fairbanks Agency S1 A TE Of ALASKA ) ) S5. FOURTH JUDICIAL DISTRICT ) The foregoi ng ins trument was acknow1 edged before me thi s pt/J ~day of -1í,::o.~ . 1989 by JllX. ~1-,1r1J{rfiJtt )ltÍ¡.w / the Fai rbank.s Agency Sup.fttln1~nden~, United States Department of thl Interior. ,\,\~ r; ~ D····, ,''It. i. ' , . ~.. ":".:-~'!<,~~.~...:.::~~...:.~»~.., c-(:'/)// /' --/ j /':"---""f-- .~.;¡'~:;/. .; .~1 t~ n J'. ;.:....~ -:;:. \ ' /x;;-. J/f~ /./ ^/ ¿.vc,t~~, Iff!: ;:ï:; P/~ \c,' -< ~ (f¡ ~ NOTARY PUBLk¡ in and for Aþs~ . -, . \.I' " y\.a .'~ t.~. 17 . ..... \~:~'\-:'r~':' - ...,.~/~-'/ My Commission Expires: /1 //1/<, . ~ . -. ' (' ,.. ~ t.- '" .. ".: / : ...., ~/ ~'''f. f·- .... . " ~ ... ...,,~ ...' - ' .., ... .... / ..!. ...... .' '~ .... I~' , 61~3W,···;"·· 16 .",,~ EXHIBIT A ~(jQ~ 0053 fAf;[ 889 Existing Road 8£ Pipelines & Proposed Route . of New Pipelines I;l " ~o ~I) ~~ '.. ~, , ....... I Proposed Nlakuk ~. Production Istand ø Addl tl on f, \,,,) ~o 1-~ I)\. ~ ') ')oV ~ \ Q. ...: ~ /fJ:;} ~ .: PRUDHOE BAY Sagavanirktok River Delta u.s. Survey 6904 T12N, R15E UM Sec. 36 T11N, R15E UM' Sec. 1 STANDARD ALASKí\ PRODUCTION Right-or-way Length Width Area o I (Approximate) 4,000· 100' 9.2 acres 1 Mile J NIAKUK PROJECT LOCATION MAP DATE: 9/21/88 SCA LE; As Noted SHEET; 1 of 2 SHEET:2012 SCALE: 1-=20' DATE: 9/21/88 NIAKUK ONSHORE ACCESS ROAD AND PIPELINES SECTION C-C'- Return To: Stu Hirsh Standard Alaska Production Co. P.O. Box 196612 A~~h^~~op AK ~~~1~-b61l CROSS SECTION C-C' (looking North J "J 3 S· MI n · . - É I STANDARD ALASKA PRODUCTION Wa ter Injection P roducUon rr Future 3 ...... 11 ~ pOi.:::.; . . A_ II I( - ...:... ... ..... ., . ... ·r··. \..4. . ..·:.···:~.:·.····Gravel·······..··.: :.-. ?-~. ._: ~~.:p. .: ~~:l~~~~~- '~'.i.-:~._. -~ ~.-":1~~~ '-. .:~~.~-=. -: .- -:,;.- - - 60' .I 30' ~ -5' ~ Tund ra ~ t C' 510 pe . . I I I ..:)? . I . I I J-.- Toe -0- -. o a: · · · ø ø c( ,~ PLAN view BOOK0053fAGE890 ---' " t I .... I 1111 I niL C::U:tpl 1111 I 1111 I 1111 till I ~·IIII 1111 1 c = :H:f!:s I "" III, I lilt 1111 I nil 'Slope ...". . n.. po _ Ju..l ... - .,..., ...1 IIhl 1111 II II ' l'lt I 1111 _I 1111 c : ~~~I 1111 I 11111 1111 r .~ Approx. 10' fH:OULSTE:J ¡ Y S7ANt)AÞLJ . . o\DDRE SS _ _ ;L ft~K II p¡fõZ¡UC:rrON .~~~ a 2 JO PH '89 - -5: fE.D I 8 9-0 0 7 2 þ/- cÆ,~ RECORD£:G ~~D ß^RRCW fH. ~ORDIHG (JISTH CT Tundra ~ c ~ Proposed Pipelines original' Instrument Recorded BOOK UU-' '·WJ.,*,~~, ! ~ 985 AGREEMENT TO AMEND BIA LEASE F-89-01 :Jok 53 Page 873 "-' 1366 This Agreement is made and entered into by and between Leroy Oenga, Wallace Oenga and Michael M. Delia whose address is P. O. Box 201, Barrow, Alaska 99723, Georgene Shugluk whose address is P. O. Box 91003, Atqasuk, Alaska 99791 and Jenny Oenga whose address is 309 Paystreak, Fairbanks, Alaska who are the immediate heirs and successors in interest of Andrew Oenga ("Lessors") [with the approval of the Secretary of the Department of the Interior ("the Secretary")] and BP Exploration (Alaska) Inc., the -successor in interest to Standard Alaska Production Company ("Lessee") whose mailing address is P. o. Box 196612, Anchorage, Alaska 99519-6612 all of whom are collectively hereinafter are referred to as the ('Partiestl). Whereas, the Lessee has previously leased a 20 acre portion of lessor's Parcel B of Nativ~ Allotment F-14632 under provisions of BtA Lease F-89-01 (as amended) ("lease") from the Lessors; and I Whereas, the Lessee desires to exercise its rights under the Paragraph 11 of the Lease to increase the size of the Leased Premises to include the entirety of Parcel B of ,.' Native Allotment F-14632,' and ~ Whereas, the Lessors desire to lease the remaining unleased 20 acres of Parcel B to the Lessee; and I Whereas, the Parties desire to provide that lease rental payments be made in M'f,; biennially instead of annually; and ~iØ Whereas, the Parties desire to provide for lease rental adjustments every four years instead of every five years: and Whereas, the Parties desire that the Lease reflect the current heirs and successors in interest of the original Lessor and Lessee; and 1~:1 Whereas, the Parties desire to amend the Lease to reflect the contractual relationship ¡m between the Arctic Slope Native Association Limited ("ASNA") and the Bureau of I Indian Affairs (USIA") wherein ASNA performs certain administrative realty related ~ services on the behalf of the alA; and Now Therefore, in consideration of the mutual promises and covenants contained herein, the Parties agree as follows: Lease Preamble The description of the Leased Premised in the Lease Preamble is revised to read "The Leased Premises consists of the entire Parcel B of Alaska Native Allotment F-14632 legally described as USS 6904'T11N, R15E UM Sec. 1 and T12N, R15E UM Sec. 36." Paragraph 4. - Lease Rentals The last sentence in Paragraph 4 is revised to read "Lease rental payments are due on the anniversary date of the lease and are due and payable sixty (60) days in -- BOOK 0074 Pm( 293 ''-'' 985 1366 Agreement to Amend BIA Lease F-89-01 advance for the next succeeding biennial period beginning with the rental payment· due January 1, 1994 for the period January 1, 1994 through December 31, 1995. Lessee shall continue to make rental payments on a biennial basis sixty days before the anniversary date of the Lease. Lessors shall make no additional claims, requests or demands of Lessee for Lease rental payments, rental payment adjustments or rental payment advances except as set forth in paragraph 5." Paragraph 5. - Lease Rental Adjustments The first sentence in Paragraph 5 is revised to read "Rental payments may be increased at successive four-year intervals beginning in the sixth year after rental payments have begun". Paragraph 12. Paragraph 12 is revised to read : "The Lessee, at its sole expense, shall keep the leased premises, and any improvements placed thereon, in good order and repair, ordinary wear and tear excepted; provided however that this provision shall not in any manner be construed so as to require the Lessee to protect the Leased Premises from natural erosion beyond the measures which, in its sole discretion, it deems necessary to protect its improvements placed thereon. Paragraph 13. The following paragraph is added to Paragraph 13: "The Lessee shall provide written notice to the Lessor and to the Arctic Slope Native Association Limited if the Leased Premises are subleased. For the purposes of this Agreement, a sublease shall not include (a) facilJty sharing agreements or other transactions which do not convey an interest in real property, (b) any interest in the mineral estate underlying this Surface Lease or (c) any use of State of Alaska tidelands adjacent to the Leased Premises." Paragraph 15. Option to Cancel The second sentence in Paragraph 15 is revised to read: "Such cancellation will be effective upon written notice to the Lessor and the Arctic Slope Native Association Limited in Barrow, Alaska not less than ninety (90) days prior to the end of each five (5) year period." Paraaraph 31. Notices Item (a) is revised to read: "Realty Officer, Arctic Slope Native Association Limited, P. O. Box 1232, Barrow, Alaska 99723." Page 2 ',- "-- BOOK 007 ("PAGE 294 Agreement to Amend BIA Lease F-89-01 985 1366 Item (b) is revised to read; "Mr. Leroy Oenga P. O. Box 201 Barrow, AK 99723 Mr. Michael M. Delia P. O. Box 201 Barrow, AK 99723 Ms. Georgene Shugluk P. O. Box 91003 Atqasuk, AK 99791 Mr. Wallace Oenga P. O. Box 201 Barrow, AK 99723 Ms. Jenny Oenga c/o 309 Paystreak Fairbanks, AK 99712" Item (c) is revised to read: "BP Exploration (Alaska) Inc. Attn. land Manager P. O. Box 196612 Anchorage, AK 99519-6612" Effective Date of This Agreement This Agreement shall be effective when fully executed and approved by the Secretary; provided however, that the lessee's election to increase the size of the leased Premises shall be deemed effective on July 1 t 1993 for the purposes of calculating rental payments pursuant to Paragraph 11 of the Lease. Entire Aareement This Agreement constitutes the entire agreement between the Parties in so far as this Lease amendment is concerned and supersedes any previous understandings whether written or oral. With the exception of the Lease amendments described above, the remaining provisions of Lease remain unchanged. Page 3 ~~ ,,~ 800KOO7 4·fItj( 295 Agreement to Amend BIA Lease F-89-01 In Witness Whereof, the Parties have executed this Agreement on the dates below their respective signatures. FOR THE LESSOR /~ J f2r 9Lj tt/d/lð{f / ~/7"'~ Wallace Ganga Date r ~ '¡,A ~ £ O~dl1 ¡llg '~L- Jenny'benga :;- Da/~ I wv 1...11_ f t7~~ ~ f111/~ L;~ì Oenga Date I-~ ~~~-I;1#,fJ~ j-/7-qy Michael M. Delia Date =s~ H7-9f Date :t FOFpTHE LESSEE JJ:iM:. Golden \¡ ic ~ President Endicott and ~ elopment Programs Date FOR THE SECRETARY The within lease Amendment is hereby approved, pursuant to the authority delegated by 209 OM 8 dated November 17, 1981, Secretary's Order No. 3150 dated May 11, 1992, as amended March 5, 1993, and 10 BIAM Bulletin 13, dated November 19, 1992, as amended April 8, 1993, and the Addendum to 10 SIAM 3, datèd January 17, 1989. ~~ Samuel Demientieff, SUQ Bureau of Indian Affairs Fairbanks, Agency /-Zo-99" Intendent Date i:;J w (j) C'> > , :. J ' ':-) _0-, ;:.~ -; '1 . _4 - _ .... r '- . .;. __ ~_·a ~~:~ :-7~, ; .J :;-~:-; .". ¡-:~ ~ ~ > >. ~.~ 9;';;: 'l~ -:,:., - ,., f) -"1 r~ Pï?: C,..) "0' t:) {,'.> ~~~ =:! --I r: . " u.;g ~{~ì ~ ~~~,:_~ L;~ ;;:) U) 00 CJ1 ---.i. Page 4 i Boot-0074P1G[-2fI) '-" '-" Agreement to Amend BIA Lease F-89-01 985 1366 ACKNOWLEDGEMENTS STATEOFA~SM ) } SSe SECOND JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this the 11- day of ~ JA~ ' 19.:i!d before me the undersigned, a Notary Public for the State of Þ6G:sk7l perSbnally appeared Leroy Oenga, and Michael M. Delia, and executeFhe foregoing document. WITNESS my hand and official seal this \1 day of A~^-"'1 ' 1994 at Barrow, Alaska. - 0 '. ....- . My .... ...... ...., .. IIØ_ ./U'~ ri. ~~ NOTARY PUBLIC FOR ALASKA My commission expires: ., /7./ q } q 7 STATE OF ALASKA ) ) SSe FOURTH JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this the ~ay of î ~ , 19~ before me the undersigD~d, a Notary Public for the State of AI~~ personally appeared Jenn~engcr,-and executed the foregoing document. WITNESS my hand and official seal this I ~-i\- day of ~~ , , 1994 at Fairbanks, Alaska. <J . KATHL~!r~,!N'DN ~~~KA ' ,':'1.' FAIRBANKS. 'I t.SIC.\ J' l.. ~ /q¡ ^ My Comm. ExplrelJanulrY27.'. My commission expires: />-1/"', . STATE OF ALASKA ) ) SSe SECOND JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this the Jl day of ~ , 19~ before me the undersigned, a Notary Public for the State of Átaska personally appeared Wallace Oenga, and executed the foregoing document. WITNESS my hand and official seal this)/ day of ~ ' 1994 at Barrow, Alaska. . - ~ IUL /}1'/J./r..( - ¿:t. $¡f~ DIANE L STEVENS NOTARY PUBLIC FOR ALASKA lICIT" =~ lit c.::=n. ..... .. ,. My commission expires: 7/2.-1 /1 7 Page 5 Page 6 H\t.~!U!!III1J',,, I., ~~~~--~:::~~~'::>...::. ~ ":!i.- ... . 1'i ~ II '" .... IF 1; § Q I \.~ v t I{ "-:'. ~ - .~~. ~ -.. -. -- . 'IiI-'f ~ .i ~ ~I./a L\ (, ; :~. ~ èfP __'0 ""'~='~\?''- 0 ~! _. ~. .... ,.Ia~ ~-. f..~,¡ ~ ~ ..~ l' fJ;:-!\ \. \" , .~, :~~,. .~ -. .:..~ .~ ....--::":;'f:;:. "''Í~~ ~ tt tt\..;....··"....:~· ,:oo·~1·::- ~II~- ~,~/ U~J~LlC FOR ALASKA My commission expires: § 'l1- .4,& I The foregoing instrument was acknowledged before me this 13th day of January 1994, by Jack E. Golden, the Vice President of Endicott and Developme,nt Programs of BP Exploration (Alaska) Inc., a Delaware corporation, on behalf of the Corporation. STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) ~~d~ NOTARY PUBUC FOR ALAS~ My commission expires: ~ 7!Z¿¡ / "f 7 e Om!IAllUL - DIANE L STEVENS . IIIMY ~ - Mr' ~Mr." STATE OF ALASKA ) ) SSe ~ JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this the R day of ~~ , 19 í if before me the undersigned, a Notary Public for the State of AÜiska persanally appeared Georgene Shugluk, and executed the foregoing document. WITNESS my hand and official seal l.hiS II day of ~ð . f 1994 at ~ f Alaska. 0 1366 985 Agreement to Amend BIA Lease F-89-01 800K0074 PÀGE297 '-" '- ." . . -91f·-MRY 2 8rt" n ...... 5: 51}{';I:J:- .~ . . 9.:'t~ tl 5 BARROW REC··a:3·-·- OISTRICT' '.". . ":' ...". . REQUESnÙ) ·B:Y #.{l' ."Re.t'\µ:n· 'To: . .' . stú iiirsh . .BP Exploration ..(Alask~) I~c:. DOO. Box 196612 . Anch.orage, AI< 99519.-6612 .- ~~ lA. ~þ9 '.' .,. Su~erint~nden~ BIA ~~ A~enc~ . ~ ' .'. . 1- 2 () -'1''1 Date· . .~.-. .. . . ,;. i.... '.: .,. ;1.::,"':.1:';:::' .' . Approved: . .~ . '. bt~~~ ASNA Realty:Officer . . . . . This' is to certify that the attached amel)dment to BIA' lease F -89-01.' for Native Allotment F)4632 between BP EXploration and the Heirs of Andrew.' Oenga. is in conformity. with existing laws and regulations,' and . all - realtY· records checked as to descriptio~J o~~hip and proper identification'" of gr~tOrl grantee and .conformity extends to and. .includes all supporting '. documents and other material ~ m~y be specified and. required in the Code .... of Federal RegUlations. . . . 98"5' '1366"" ArCtic Slope Native Association Limited P.O. Box 1232 Barrow,.AK 99723 . (907) 852-2762 : P.02/07 .:.RCTIC "SLOPE t-J.. . v'E ':'SSOCI;'TION 907e~ 763 - O!~19-1994 09:49 ~ BD~00-74f1GE298 --- }~~~i~·;·> . ~ . "'. ~ :. .:~..~.~:. ~I. ,.- ~~~~. .. -."'."':" '. ~I~~;'" ,. ~§;~g1';' " ,,':~¿~~:;'..."'. - . h~·':(~·"' ~ . . .':'" ;...... 0'.- .- $.'.;".- ~~~'. ...~ ." .....:.. . ''';'''. ~.'" ;".~ ." . 'JÌ' -..\'" . . - .,-- Or i 9 n i a 1 Le as e 1\ '-_-.£' de d i tl Bo 0 k 005 3 at P ag.~ 3 9 8 5 1 4 7 ? Lands :.located in 'J:l1N/R15E UM Sec. 1 an,tT12N/K15E _ See 36~being USS 6904. BOOK -¡q PAGE;J.:2~ ~~~~Amendment to BIA Lease F-89-01 Barrow Recording District This agreement is made and entered into by and between Leroy Oenga and Wallace Oenga whose address is P.O. Box 201, Barrow, Alask~ Michael Delia -whose address is 300 Slater Drivet Fairbanks AK 99701, Georgene Shugluk whose address is P.O. Box 91003, Atqasuk, Alaska 99791, and Jennie Oenga whose address is P.O. Box 55778, Fairbanks, Alaska 99705, who are the immediate heirs and successors in the interest of Andrew Oenga (Lessors) and BP Exploration (Alaska) Inc., the successor in interest to Standard Alaska Production Company (Lessee) whose address is P.O. Box 196612, Anchorage, Alaska 99519-6612 all of whom are collectively hereinafter are referred to as the "Parties". Whereas, the Lessee has previously leased the 40-acre portion of Lessor's Parcel B of Native Allotment F-14632 under provisions ofBIA Lease F-89-01 as amended ("Lease") from the Lessors; and Whereas, Leroy Oenga, Wallace Oenga, Michael Delia and Georgene Shugluk desire to use a portion of the rental proceeds from the Lease to collateralize four personal loans they are seeking to obtain from the National Bank of Alaska; and Whereas, Jennie Oenga does not seek to obtain a loan but is agreeing to changes in the lease to assist her family members in obtaining these loans; and Whereas, the Lessors desire to provide that lease rental payments be made annually instead of biennially; and Whereas, the Lessors desire to adjust the date at which the Lessee may cancel the Lease so that it shan coincide with the tenn of the personal loans they are seeking; and Whereas, the Parties desire to amend the Lease to reflect their LessorlLessee relationship as it relates to the contractual relationship between the Arctic Slope Native Association Limited ("ASNA") and the Bureau of Indian Affairs ("BIA") wherein ASNA perfonns certain realty services on the beh.alf ofBIA for the benefit of the LesSors. Now therefore, in consideration of the mutual promises and covenants contained herein, the Parties agree as follows: Paragraph 4. Lease Rentals The last sentence in the first paragraph of Paragraph 4 is revised to read "Lease rental payments are due and payable sixty (60) days in advance of the anniversary date of this Lease Agreement for the next succeeding annual rental period beginning with the rental payment due January 1, 1996 through December 31, 1996. Lessee shall con~ue to make rental payments on an armual basis sixty days prior to the anniversary date of this Lease Agreement. Lessors shall make no additional claims, requests or demands of Lessee for Lease rental payments, rental payment adjustments or rental payment advances except as set forth in paragraph 5." Page 1 BOOK ,"ct PAGE :2::J-L/ Barrow Recording Distñct I A new paragraph is added to Paragraph 4 as follows: "'The rental payment due on November 1, 1995 for the period January 1, 1996 through December 31, 1996 is eighty-thousand six-hund~ed forty dollars ($80,640.00) which payment shall continue to be adjusted at four-year intervals pW'Suant to Paragraph 5 below, as amended." ~ < ¿ '\ .\ -.- .~ 985 1472 A new paragraph is added to the end of Paragraph 4 as follows: "Lessee agrees to make lease rental payments to the National Bank of Alaska, or any other financial institution of the Lessor's choosing provided that Lessors furnish Lessee properly executed Assignment of Proceeds, Rental Division Order and! or other written instruments at least 30 days prior to the rental due date as stipulated herein. " Paragraph 5. Lease Rental Adjustments A new paragraph is added to the end of Paragraph 5 as follows: "Rental payments may. next be adjusted November 1, 1997 for the adjustment period January 1, 1998 through December 31, 2002 and subsequent four-year periods unless this Lease Agreement expires or is canceled pursuant to provisions of Paragraph 15 below, as amended. Paragraph 15. Option to Cancel The first sentence of Paragraph 15 is revised to read "Lessee may, for any reason, cancel this Lease Agreement at the end of each five (5) year period during the Lease term, or any extension thereøf, with the first right to cancel accruing on January 1,2001." Paragraph 34. Relationship of the Parties A new Paragraph 34 is added to this Lease Agreement as follows: "Lessors hereby designate and appoint the BIA, acting by and through ASNA, to be their sole contact with Lessees for any and all matters arising out of this Lease Agreement or any amendment thereto. Lessors agree that they wiU under no circumstances contact the Lessee in person or by telephone, facsimile, electronic mail, United States. mail, courier service, or any other means. If Lessors contact Lessees, Lessees shall be under no obligation to respond to Lessors contacts and shall refer all such contacts to ASNA or the BIA." Effective Date of This Agreement This Agreement shall be effective when fully executed and approved by the Secretary of Interior. Entire Agreement This Agreement constitutes the entire agreement between the Parties insofar as this lease amendment is concerned and supersedes any previous understandings whether written or oral. With the exception of the two preceding lease amendments, the remaining provisions of Lease, as previously amended, remain Wlchanged. Page 2 BOOK .,q PA~E.':>:::lS Barrow' Recording D\:'ttnct '-/ ~ 985 1472 In Witness Whereot: the Parties have executed this Agreement on the dates adjacent to their respective signatmes. FOR THE LESSORS j,)µ¿ £),~-- s=6-9r Wallaceg;:a (~r Date J~ ~t\~~ O~.JI<f\~ 5-8-QS J~I1Il1e Óenga ,J Date ~rY.;:¡:.t.. ¡9p.,J~. Jlllt' ð'p)f-5 ~~i~: IF Date Conservator for Jennie Oenga J - ~ . -p,uv. L~ Leroy OengV r::Þ 1'1(' Date ~;~'1H~ fJ~ Michael M. Delia 5-lr-9S Date ~~ Georgene Shugluk ~ ,,1'I9S Date ACKNOWLEDGMENTS STATE OF ALASKA ) ) 5S. Second Judicial District ) The foregoing instrument was acknowledged before me this b day of ffT95 by .~.~.~.lfceill Oenga who personally appeared before me and execut e fOrego:~~nt of his own _,"..J:~JW . ,.'~.." ~..¡~~.". .~~4,., -'..:t 1,.:~ ". 0"',", ., ..;.."'~; .....:~.~.... J::.. I.-.~. - - ~ L / - ./ .~'? ..... "[r " - .... ~ ~~ "" ~ ~ -- ~ . ~/,/ :l~( ~\.:~\t·~ N ~~R ~'/-~- ¿ 9" .. .b - :-...1 :: .. . ~/ '. -( ... 'Oft!;~;F .::1.. J ¡ Y commission explIes: _ ~ '-. -t;f ~ ...;"..W""" "s,," ... '\..~ $" - ··"·'~~;;··S1ÁÌi'6F ALASKA ) ..11"",.11\\" . ) 5S. Second Judicial District ) _ .:..-r~~.. f?regoing instrument was acknowledged before me this \"u~,p,ç,Qga, Sr., who personally appeared before me and exec .......',. ~ %eé- Vífu'l, " ~ .-_......~; " ~~ y ..~. ...._- r "7,_ ~ ~.. . Q .~ -.... ~ .- : C ~t.~ <- ..V :. : 0:;- ., 1·~ 0: .....' :. .:.. -" OJ · ~ ~~ . . ,,1· : ~." '-i . - .1 ~ ,. r.:,';'~ 0/ ~> :.. f }" . . _ r~, ... . . J_ '- ..",.. . ..,;.;,1,.... to · ::- : \ -.. 0 :1':- ~ .. 41. ... -r1 0... J - ...~..... y .~-.- "-:~~..'.........,.,. :' "'_." f': " Page 3 '-- "-1l00K -,q PAGE~::Ji.LJ Ða~'8 !:cor. iï~ 4~~~rt STATE OF ALASKA ) ) SSe Second Judicial District ) .~ 0"0 :~ooo.--c _ The foregoing instrument was acknowledged before me this 1c..J fA. day of MÆ'r' , 1995 by Georgene Shugluk, who personally appeared before me and executed the foregoing instrument of her own free' will. \\\HUH"lr \.\\\ \ t) l "" ".... () ~ . / L r, ....... ~ ...... y 'l ...~.. --. ~ ' f~:-' NOl4~ '..:~ ~ . A --- r . -n:: ~ :~ 'lJaLIC :"TI§ :::. .y~ --- ~: ::: 0"J '. (" e;~ . ~ ~ . . 0;: þ,\"":..' .~ "..1;> ...... :.:- "1 .... 2 ó " STATE OF ALASKA /JJII"j,'I~"\\""" ~@5/~/qr )8S. ~vlld Judicial District ) ~~~~L My commission expires: 7 h /9.-:- The foregoing instrument was acknowledged before me this 6' day of /114..AA ' 1995 by - Michael Delia, who personally appeared before me and executed the foregoini ~trument of his own free will. . DIANare-dh.S . NOTMY fII*IC ° . .. ßItIF.Aa...~ - -., ~ ~....,..., 4ð~ -~ M""~~ -- NOTARY PUBLIC FOR ALASKA My commission expires: 7/ZQ Ie:¡, 7 STATE OF ALASKA ) ) SSe Fourth Judicial District ) The foregoing instrument was acknowledged before me this e day of ~ ,1995 by Jennie Oenga, who personally appeared before me and executed the foreg~ing U({trument of her own free will. . 0MaAL lEAL DIANE L STEVENS IIOYMY ÞUM.IC IAMIGW. MAlIA My c-.. bpIra .., II. ttlJ /J1~~ dt~ NOTARY PUBLIC FOR ALASI\A -- --- My commission expires: 7/2l1 jt::f7 STATE OF ALASKA ) ) SSe Fourth Judicial District ) The foregoing instrument was acknowledged before me this ~ day of ~ ,1995 by B Jarvi, who personally appeared before me and executed the foregoing inst~entbfher own free will, and in her capacity as conservator for Jennie Oenga. . GfftCW..1f.M. DIANE L STEVENS NOTARY PUIUC IAMOW AlAnA MJ c.... ....... ...., II. 1.J ~é/.~ NOTARY PUBLIC FOR ALASKA My commission expires: 7/ h 1/1, Page 4 -" ~K_ 7q PAGE;;kJ-7 Barrow Recording District - F°l[~ë~ '1"J AI 3. Boles, Manager vÞ Greater Pt. McIntyre Area ~(//t?~ Date ACKNOWLEDGMENT STATE OF ALASKA ) ) 5S. 1 J.J 1¡t D Judicial District ) The foregoing instrument was acknowledged before me this I d í4 day of . /HAy , 1995, by AI E. Bolea, the ~anager of Greater Pt. McIntyre Area, ~~UII'IJ~~.::f:¡,;." ExploratIon (Alaska), Inc., on behalf of the CorporatIon. ......~..,\\\Å ít~~:'I.'tl!¡!;;.~. , d..C ..... t - "... ." _,-. .-! "~..... Ii:!: 1° ,,-.. ... ~.- Ì!~~~.. ~ ~, 7?1iuu ..~ 1J ..~~.." \·"tÀ"n~~'·~~ f :..~ \)~ i/.~f_~~~~_. ~ _ 'A f/'l J f1 ~ _ 1 " .... - -!~if~~~'" =: VI. ( £A..,UVJ~. PUB'\"'····i(fl. '- NOTARY PUBLIC FOR ALAS~. .õ:~)~__ ..j;~~~Ij.!jl My conunission expires: -z-ZC¡-î~. .......~. OF ...t;....' ~:- ., ....... .. FOR THE SECRETARY OF INTERIOR: '1'1"... -,::- r·'tr:;fI\~· The within Lease Amendment is hereby approved, pursuant to the authority delegated by 209 DM 8 dated November ]7, 1981, Secretary's Order No. 3150 dated May 11, 1992, as amended March 5, 1993, and 10 BIAM Bulletin 13, dated November 19, 1992, as amended April 8, 1993, and the Addendum to 10 BIAM 3, dated January 17, 1989. ~~,~ Bureau of Indian Affairs Fairbanks Agency ,ç:.rl-?'s Date Return to: stu Hirsh BP Exploration (Alaska) Inc. P.O. Box 196612 Anchorage, AK 99519-6612 CD qF>-q XJ. . ~. RECORDED .. flPlD31~ {l..ARRlJlI ì 'REe. DlST. ---to. ~ DATE I n / J J../-. .. 1995 ~ r~ TIME. II: l/.:::::L .8...M oJ . Requeoted by f>P _. Addreu Þ~JtJJtarJf) 1. Page 5 t'~ :t> c: \.0 c...,::O c.n Ã è:f'71 -i z~ -p ::¡ ITIC: s;: r- »0 -< fT1::o C"TJ þ- 0"\ ~f'Y't :;:02: ;ug r:)c <:::J :Þ> ~ -0 0% :x C")fT1 '"TIp "::" ~c :!1""T1 ("') ('")~ f'T1 ,.,,> ~ ~ :5 - -t U) I'T1 :Q //""'. :W-II . . II/i"'" J ,/ (:~~ Objection (Request For Postponement) To Establishment Of Poo!,Rules ')f:1/? )" Raven Oil Pool l¡";"!;;!¡iJ v .::J?OD()' The Heirs of Andrew Oenga (Oengà Heirs) object or more specifically request the postponement of establishment of Pool Rules for the Raven Oil Pool. Interest of Parties State of Alaska - The State of Alaska (State) is the holder of the subsmface ri¡2;hts to oil refened to as the Raven Oil Pool. The Alaska Oil and Gas Conservation Conunission (Conullission), pursuant to application ofBP Exploration (Alaska) Inc., is proposing to establish "Pool Rules" for the Raven Oil Pool. Oenga Heirs - The heirs of Andrew Oenga (Oenga Heirs) are the holders of the smface rights to Heald Point through BIA Allotment F-14632 Parcel B. They have leased those smface rights to BP for the purposes contained in the leases. BIA Lease F-89-01. BP Exploration (Alaska) Inc. (BP) - BP has constructed a long reach directional drilling production facility on the Heald Point property. That lease authorizes use of that propeliy in conjunction with the Niakuk Project, which BP has defllled as development and production of "our Nialcuk oil accumulation." See Attac1ullent A. I Objection To Raven Oil Pool Rules Objection (Request for Postponement) - The Oenga Heirs object and ask the Conunission to postpone establishing Pool Rules for the Raven Pool until the Heald Point smface rights lease has been modified to allow for production of oil from the Raven Pool through the smface rights leased for the Heald Point facility. Reason for Objection - The Oenga Heirs wish to make clear that they do not object to exploration or development of North Slope oil reserves. Their concel1l is the same as the State's - that it be done in an appropriate and orderly way. It is especially appropriate that smface leases for oil production facilities authorize the use being made of those facilities before production begins. Otherwise, production may be intel1'upted as the val"Íous interests are detcnnined in proceedings that may ultimately inteliwine the State. While the Oenga Heirs / BP lease does allow production thru Heald Point from the Niakuk Project (Nialcuk) Pool underlying the Niakulc P.A. it does not allow production from any pool or P.A. other than Nialculc thl1l the Heald Point property. As such, it is requested that adoption of the Raven Pool Rules be postponed w1til BP can clearly demonstrate to the Commission that they have authority to develop the Raven Pool thru the Heald Point facility or thru some other facility. (/ ~ --~, Tony Delia Heir of Andrew OeÍ1ga I All other Oenga/BP lease documents other than the attached letter are publicly recorded and can be found in the Ban"ow Recording District at Book 53, Page 873 et. seq., Book 74 Page 293 et. seq. and Book 79 Page 223. , ; {.¡.')~~i.!:f:~Ç;.~::~!,.;. . . ~ ; (I........".,.. . ¡: j' ~ ," . . : .~".: -:.~'!I...,::~ ....!... , BP EXPLORATION IP EllplÐr.'1erI (Alnb) tile. eeo Ealll aenlOn &oulev.1d P.O. aôx 11&111 "'nchÐr.þ, ".Iø. 9&S1N612 (987) "'06m July 29, 1993 Mr. Samuel Demientieff, Superintendent Bureau of Indian Aifairs 101 12th Avenue, BDx 16 Fairbanks, Alaska 99701 Noti1ication of N~akuk Project Cornm.enœment . . R~Ques11o Amend Surface l~se F89-01 Dear Mr. Demientieff: On January 1, 1989, BP Exp1oratton (Alaska) Inc. (formerly Standard Alaska Production Company) entered into a surface lease agreement with Mr. Andrew Oengafor 10 acres of his 40 acre native aUotment(F·14632) on Heald Point. The Lease provided authorization for BP 10 construct production facilities to support development of. and production from, our Niakuk oil accumulation. " Pu~u~nt to requirements of Secüon 1. of 1he Lease, BP hereby provides notice to the Bureau of Indian Affairs that the first phase of the Ni·akuk Development Project has been approved and that development will procede on an accelerated schedule during the latter hatfof 1993. Further pursuant to Sed ion 1, the Lease is converted from: a year~to~Year basis to a fixed twenty· five year term. In order to make effect1v.e use of both the Leased and Unleased Premises and to .prótect our facilities from ·eJ:osion, anarmorêd production pad ·wil1 be constrtlcted at tne tip of Heâ1d PÐint. We have also redesigned and relocated out 'pipelines totheia'ast ~. of the access ·road. . . Consequently, pursuant to Sect.n 11 of the Lease, BP hereby requests that the lease be amended so Q$ to incfease the size of the Leased Pr~æi$e$ fr.øm 10 aères tÐ 20 a,c".s elective August 1, 1993. The new Leased PremÎ$esaM shown Of\ the encløsed,tenerallocation map. We wiD pr.ovi_ -yew witftamere detailed eKhibit to be attached to the Lease as so.en as it beco·fOes avaftMle~ . Rent for the enlarøed ~e~$~ Premises win be due January 1, 1994 and wìU be promte~ back to thè éfféctivé date øfthe Lease amendment. Please indicate YÐ1#.f ep.p.r.v~4 of ~is amend~nt by signing in the space previQed below and re.~tifr~iAØ ORe original of this letter to the uneerslgned at our letterhead addre.. The remaining original is for ¥OUr recoros. . . /Ar. Saml:Jef Oimeintieff ¡July 29, 1993 'Page 2 - We would appreciate your earty attention to this matter as we hope to be in a position to begin gravel placement in eàr\y August.. Please contact meat 564- 4·841 if you have any questions er if you need any add1:ional informat1on. - Sincerely, .4Pµ Stu· Hirsh, CPl Senior Landman The within Lease Amendment is hereby approved, pursuant to the authority deleQated by 209 DM B dated November 17, 1981. Secretary's Order No. 3150 dated May 11. 1992. as, amended March 5. 1993. and 10 BIAM Bulletin 13~~ated November 19, 1992, as amended April 8. 1993. and the Addendum . to 10 SIAM 3, dated January 17, 1989. ~¿(/ . ~ Samuel Demientieff, Supe . .>BurÐau of Indian Affairs Fairbanks. Agency Jr.. ) - ,., Date .. u. . . . Objection (Request For Postponement) To Establishment Of Pool Rules Raven Oil Pool The Heirs of Andrew Oenga (Oenga Heirs) object or more specifically request the postponement of establishment of Pool Rules for the Raven Oil Pool. Interest of Parties State of Alaska - The State of Alaska (State) is tile holder of the subsurface lights to oil referred to as the Raven Oil Pool. The Alaska Oil and Gas Conservation COl1U1lissiol1 (Commission), pursuant to application ofBP Exploration (Alaska) Inc., is proposing to establish "Pool Rules" for tile Raven Oil Pool. Oenga Heirs - The heirs of Andrew Oenga (Oenga Heirs) are the holders of the surface rights to Heald Point through BIA Allotrnent Fw14632 Parcel B. TIley have leased those surface rights to BP for the purposes contained in the leases. BrA Lease F -89-01. BP Exploration (Alaska) Juc. (BP) - BP has constlUcted a long reach directional drilling production facility on file Heald Point property. That lease authorizes use of that propel1y in conjwlctioll with the Niakuk Project, which BP has defined as development and production of "OtU' Nialruk oil accW11Ulation." See Attachment A. 1 Obiection To Raven Oil Pool Rules Objection (Request for Postponement) - The Oenga Heirs object and ask the Commission to postpone establishing Pool Rules for the Raven Pool until tile Heald Point surface lights lease has been modified to allow for production of oil :fÌom the Raven Pool fi1fough the surface rights leased for tile Heald Point facility. Reason for Objection - The Oenga Heirs wish to malœ clear that they do not object to exploration or development of North Slope oil reserves. Their COl1cel11 is the same as the State's - timt it be done in an appropriate and orderly way. It is especially appropriate tilat surface leases for oil production facilities authorize the use being made of those facilities before production begins. Otherwise, production may be intel1upted as tile various interests are determined ill proceedings that may ultimately intertwine file State. While tile Oenga Heirs / BP lease does allow production tiU1l Heald Point from the Niakuk Project (Niakuk) Pool underlying tile Niakuk P .A. it does 110t allow production fi:om any pool or P.A. other than Niakuk tiU1l the Heald Point property. As such, it is requested that adoption of tile Raven Pool Rules be postponed until BP can clearly demonstrate to the Commission that they have authority to develop the Raven Pool tlnu the Heald Point facility or ti1111 some other facility. /s/ TOllV Delia Tony Delia Heir of Andrew Oenga 1 All other OengalBP lease documel1ts other than the attached letter are publicly recorded and can be found in the Barrow Recording District at Book 53, Page 873 et. seq., Book 74 Page 293 et. seq. and Book 79 Page 223. . . ~, : '7::':~'I'?'Ï - , .11I . 8P EXI'LOIUII1ON .,. EIIpIo...'1Ðn (Alelka) tnc. NO EuI lenlOh IoUløaId . P'.O. IÒII 1H111 Mehllragl. All. il951...lIt2 (8m) 51....." July 2~, 1993 Mr. SamL:lel Demientieff. Superintendent Bureau of Indian Affairs 101 12th Avenue. Box 16 Fairbanks. Alaska 99701 Notific.atjon of N~2kukPrÐJeC\ Commence"""t fh~QJJêst10 Amend Surface '-RAse re9~01 Dear Mr. Demientieff:. On January 1, 1989. BPExploratton (Ala.ska) Inc. (formerly Standard Alaska Production Company) entered into a surface lease agreement with Mr. Andrew Oenga for 10 acres of his 40 acre natfve·allotment(F-14632)·on Heald Point. The Lease provided authorization for BP to construct production facilities to support development of, and production from. our Niakuk 011 accumulation. ,_ Pu~u.nt to requirements of Section 1.of the Lease. BP hereby provides notice to the Bureau of Indian Affairs that the· first phase of the Nt·akuk Development Project has been approved .and that development will procede on an aoœlerated schedulè during the latter half ,of 1993. Further pursuant to Section 1. the Lease is convert" fFom: a year-to-year basis to afiJCed twenty- five year term.' . In orderte make'effective use of both the Leased and URleasedPremises and 10 .prétect our facilities from ·ef..osion. an armored .pr.oductiGA pad ·wiß be constructed at the tip of Hestd Point. We have æso redesigned and relocated Dut ·pipelißØs tQ the east $ide of the access lOad. . . . '. ConseqLlently,punwant to SecØon 11 of the Lease, BP hereby re.,ests thåt the lease be amendedsø 8$ to increase the size of tbe Lease~ p,.n¡i$es fføm , 0 aères to 20 .ere. ,ledive. August 1, 1913. The new Leased Preml$eS are ShOWA 0fI the e~d'leftena1 location map. We witl proOYide·yew with.. ",are detaUed eKhibit to be attachedte ttae Lease as SO.efl as it becomes avafllJJle. . Refit far the enlaff¡J$d ~."'d Premi$es win be due January " 1994 and wm be prorated back te tftè .éffeottWé date of the Lease amendment. Please kuficale y.r .....v.. of this amen~At by signiAg In the space prøvkded belo. amil ~,~~ 008 Grigl,,,.) of this IeRer to the undersigned at our letter.nead a...... The ,.maiAing originatis for VOt" reoøfås. ~ . . . . . i /Ar. SamwelD1meintieff ¡July 21. 1993 : Page 2 ~ We wøuld appreciate your eady attention to this matter as we hope to be 1n a position to begin travel ptacement in early August. Please contad me ·at 564- 4841 If you have any questions or if you need any addtionat information. . Sincerely, 'µ ~~ Stu . Hirsh, CPL Senior Landman The within . Lease Amendment is hereby approved. pursuant to the authority delegated by 209 DM 8 dated November 17, 1981, Secretary·s Order No.. _ . 3150 dated May 11, 1992. as: amended March 5. 1993, and 10 BIAM Bulletin . 13~~ated November 19, 1992. as amended April 8,1993, and the Addendum to 10 BIAM 3. dated January 17, 1989. _~./t~ Samuel Demientief'. Supe~ndent . ..Bur~au of Indian Affairs . Fairbanks. Agency ~, J "''1'1' Date ..... .n.. "'_'_m.._...__ -,. _....~._.~.~---._--_._..-.. Oenga Objection to Establishment of Pool Rules for Raven Oil Pool e e Subject: Oenga Objection to Establishment of Pool Rules for Raven Oil Pool From: Ray Givens <raygivens@givenslaw.com> Date: Tue, 28 Mar 2006 15:26:17 -0800 To: jody _ coløm admin.state.ak.us CC: File <raygivens@givenslaw.com> Ms. Colombie, Attached please find a copy of the comments which will be filed with the Commission by Mr. Delia, one of the Oenga Heirs. Thank you, Ray Givens Copy of Oenga Objection to Establishment of Raven Oil I of I Content-Type: application/pdf Content-Encoding: base64 3/30/2006 8:55 AM . . MEMORANDUM STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION TO: File DATE: March 28, 2006 FROM: SUBJECT: Written Objection Raven Oil Pool On March 28, 2006, Mr. Ray Givens called me and asked if he could e-mail the heirs objection to the request ofBP Explorations (Alaska), Inc. He also infonned me that no one would be available to speak on behalf of the heirs. Subsequently, he requested that the objection be read into the record at the time of the hearing. Objection to Establishment of Pool Rules - R'i Oil Pool . Subject: Objection to Establishment of Pool Rules - Raven Oil Pool From: "Stevens, Ellen (NANA CORPORATE SERVICES)" <ellen.stevens@bp.com> Date: Thu, 30 Mar 2006 11 :34:18 -0900 To: jody _ colombie@admin.state.ak.us Jody, Please be advised that Gus Gustafsoon has received the 5 page fax you sent yesterday regarding the Raven Oil Pool. Should you have any questions or need any additional information, please let me know at your convenience. Ellen Stevens PBU Coordinator 907.564.5933 1 of 1 3/30/200611:38 AM DATE,TIME FAX NO./NAME DURATION PAGE(S) RESULT MODE . JOB STATUS REPORT 03/28 15:37 5544537 00:01:30 05 OK STANDARD ECM . TIME NAME FAX# TEL# SER.# 03/28/2005 15:41 AOGCC 9072757542 BR02J2502370 . . _~laska Oìl and Gas Conservation Commission 333 \Ve5t 7th Avenue, Suite 100 Anchorage, AK 99501~3539 Phone: (907) 279~1433 Fax: (907) 276-7542 Fax Transmission The informati·on contained in this fax is confidential and/or privileged. This fax is intended to be reviewed initially by only the individual named below. If the reader of this transmÍttal page is not the intended recipient or a representative of the intended recipient, you are hereby notified that any review, dissemination or copying of this fax or the information contained herein is prohibited. If you have received this fax in error, please immediately notify the sender by telephone and return this fax to the sender at the above address. Thank you. G ~ G UAk.~OÝÌ ~~ ~~O/ ~A\J To 1= rom: Phone #: Subject: Message ,-J MlLL ~ {O/Iv. Fax#: 504 - 4-(~ ð 1 Date: .. -=3 . cl8 . . ()( f< Pages (including 5 cover sheet): ~~ ~tL/ ::;J U ~ ~0lÁ../' If you do not receive all the pages or have any problems with this fax. please call for assistance at (907) 793a1223. Raven . . Subject: Raven From: Jane Williamson <jane_williamson@admin.state.ak.us> Date: Thu, 23 Mar 2006 15:39:06 -0900 To: JodyJ ColOrì1hie <jodY_colombi¢@admin!state.ak.us8> Jody, We're expecting some sort of writeup from the lawyers for the Onega's concerning the Raven hearing. It should come in by Mar. 29. Gary Gustafson asked that we fax this when it comes in. His fax is 564-4637. Jane Jane Williamson, PE <iane williamson((l?admin.state.ak.us> Reservoir Engineer Alaska Oil and Gas Conservation Commission 1 of 1 3/28/2006 10:24 AM . . Objection (Request For Postponement) To Establishment Of Pool Rules Raven Oil Pool The Heirs of Andrew Oenga (Oenga Heirs) object or more specifically request the postponement of establislIDlent of Pool Rules for the Raven Oil Pool. Interest of Parties State of Alaska - The State of Alaska (State) is tile holder of the subsurface rights to oil referred to as the Raven Oil Pool. The Alaska Oil and Gas Conservation ConIDlission (Commission), pursuant to application ofBP Exploration (Alaska) Inc., is proposing to establish npool Rules" for tile Raven Oil Pool. Ocnga Heirs - The heirs of Andrew Oenga (Oenga Heirs) are the holders of tile surface rights to Heald Point through BIA Allojment F~14632 Parcel B. TIley have leased those smface rights to BP for the purposes contained in the leases. BIA Lease F ~89-0 1. BP Exploration (Alaska) Ine. (BP) ~ BP has const11lcted a.long reach directional drilling production facility on1he Heald Point property. That lease authorizes use of that propeliy in conjunction with the Niakuk Project, which BP has defIned as development and production of nom Niakuk oil accwllulation." See Attachment A. 1 Objection To Raven Oil Pool Rules Objection (Request for Postponement) - The Oenga Heirs object and ask the Commission to postpone establishing Pool Rules for the Raven Pool until the Heald Point surface rights lease has been modified to allow for production of oil ITom the Raven Pool thl'Ough the surface rights leased for the Heald Point facility. Reason for Objection ~ The Oenga Heirs wish to malœ clear that they do not object to exploration or development of North Slope oil reserves. Their concern is tile same as the State's - that it be done in an appropriate and orderly way. It is especially appropriate tilat surface leases for oil production facilities authorize the use being made of those facilities before production begins. Otherwise, production may be intenupted as tile various interests are determined in proceedings that may ultimately intertwine the State. While tile Oenga Heirs / BP lease does allow production tiu"U Heald Point from the Niakuk Project (Nialmk) Pool underlying the Niakuk P.A. it does not allow production :5..0111 any pool or P.A. other than Niakuk thru the Heald Point propeliy. As such, it is requested that adoption of the Raven Pool Rules be postponed until BP can clearly demonstrate to the Commission that they have authority to develop the Raven Pool tlu"U the Heald Point facility or thm some other facility. /s/ Tony Delia Tony Delia Heir of Andrew Oenga 1 All other Oenga/BP lease documellts other than the attached letter are publicly recorded and can be found in the Barrow Recording District at Book 53, Page 873 et. seq., Book 74 Page 293 et. seq. and Book 79 Page 223. ! (~Ié.'}·:- II . .. \ .',' '. . . -, ~ . . ! "-'!~':~~).~'Ì .- . D' EXPLORATION at" ExpIor.1IÐn (Alaaka)tnc. tÐÐ EaalIMltoh IouIevard . P'.Ø. lOx ,.... AnthDraøl, Ala... il9S,,,.sØ'2 C8Ð7) $11"",1 July 2~, 1993 Mr. Samwel Demientieff, Superintendent Bureau of Indian Affairs 101 12th Avenue, BoJC 16 Fairbanks, Alaska 99701 NotificaUon of N~.a~uk projeC\ Co,mmenœm,,,t . - ~'Quest to .Amend Surface' ease Fð9-01 Dear Mr. Demientieff:. On January 1, 1989, BPExplorat1on (Alaska) Inc. (formerly Standard Alaska Production Company) entered into a surface lease agreement with Mr. Andrew Oenga for 10 acres of his 40 acre nat¡ve·allotment{F-14i32)·on Heald PoInt. The Lease provided authorization for BP to construct production facilities to support development of,. and production from, our Niakuk oil accumulation. '.. Pu~u.nt to requirements of Section 1.of the Le'ase, BP her-eby provides notice to the Bureau of Indian Affairs that the first phase of the Ni·akuk Development Project has been approved .and 1hat devel·opment will procede on an aoœlerated schedulè during the latter half ·of 1993. Further pursuant to Section " the Lease Is converted {Forn: a year-to-year basis to afiJCed twenty- flveyear term.' . In order to make -effectiy.e Lise of both the LeaSed and UAleased·Premises and to .preted our facilities from ·e,.oslon, an armored production pad -will be constructed at the tip of Heøtd Point.· We have aJso redesigned and relocated out f)lpe1tßØs to the east ap¡. of the access -f08d. . . . Consequently,pulSuattt te Section 11 of the Lease, BP hereby r..,ests 1hÌ1t the Leaseb. amended so 8$ to iftCtTea&e the size of the Leased P"fAk¡es fføm 10 aères to 20 8:cfQ' eledive August 1, 1913. The new Leased P,...... tIN ShOWA Oft the eftCl&sed·,eft.,.. location map. We wftl provide·yew wit~ .. mere detafled exhibit to be ...edte tta. l.ease as soan as it beœmes ava1hlÞle. . ReAt for the enU¡ried ~ee.S~ Pfemi$es wUI be due January 1, 1994 and · be pt'øßlt-ed back to tftèéfictiwé date ef the Lease amendment. Please IAdicate yø~r apprøv.t of t-his amen~nt by silAing in tfle space prøviØeå below anal ~~r<RiAØ on. origlAal of this letïter to the undersigned at our letter_ad afH...· The ,.maiAing origina¡is for your recøros. . .. .... ......_ ....________.__..._ ..._,_........____....___.__~_.._........ ,.,._ on _n' __'_'__"'._--'.nhn. ,~_,,_.. . ,.. ..-".-....-.... ."... ..n ..._ ...__.~.____.._._ ".__ . . . . . , Mr. Saml:lel Dimeintielf ¡July 21. 1993 : Page 2 .. We wøuld appreciate your early attention to this matter as we hope to be in a position to begin g,ravel placement In earty AuguSl. Please contact me ·at 564- 4'841 If you have any que&t,ions er if you need any addtoionat information. - Sincerely. ,.'µ .A.;P Stu . Hirsh. CPL Senior Landman The within . Lease Amendment is hereby approved, pursuant to the authority delegated by 209 DM 8 dated November 17. 1981, Secretary's Order Nô.. . 3150 dated May 11. 1992. as:amenderj.March 5, 1993. and 10 BIAM BuUetin . 13:~ated November 19. 1992. as amended April 8,1993, and the Addendum . to 10 BIAM 3. dated January 17. 1989. ~/t/c¿~ Samuel Demientieff. Supe&ndent . . .Bur-eau of Indian Affairs . Faifbanks. Agency ~, J ""7 . Date Oenga Obj¡øction to Establishment of Pool Rules for Raven Oil Pool ,> . . r ..'- . Subject: Oenga Objection to Establishment of Pool Rules for Raven Oil Pool From: Ray Givens <raygivens@givenslaw.com> Date: Tue, 28 Mar 2006 15:26:17 -0800 To: jody _ colombie@admin.state.ak.us CC: File <raygivens@givenslaw.com> Ms. Colombie, Attached please find a copy of the comments which will be filed with the Commission by Mr. Delia, one of the Oenga Heirs. Thank you, Ray Givens of Oenga Objection to Establishment of Raven Oil Content-Type: application/pdf Content-Encoding: base64 1 of 1 3/28/20063:51 PM *",D [Fwd: RE: Raven Application] . . Subject: [Fwd: RE: Raven Application] From: Jane Williamson <jane_williamson@adrnin.state.ak.us> Date: Fri, 24 Mar 200609:03:53 -0900 To: Jody J Colombie <jody_colombie@admin.state.ak.us> Jody, Please put this in the Raven CO and AIO application files. Jane -------- Original Message -------- Subject: RE: Raven Application Date: Fri, 24 Mar 2006 08:10:26 -0900 From: Gustafson, Gary G (Alaska) <Gary.Gustafsonl@bp.com> To: Jane Williamson <jane williamson@admin.state.ak.us>, "Weggeland, Mark C" <Mark.Weggeland@bp.com> CC: Robert P Crandall <bob crandall@admin.state.ak.us> No - the changes do not impact the notifications. The boundaries only adjusted very slightly and the affected notification parties are the same ones we already notified. . Gus ------------------------------------------------------------------------ *From:* Jane Williamson [mailto:jane williamson@admin.state.ak.us] *Sent:* Thursday, March 23, 2006 3:59 PM *To:* Weggeland, Mark C; Gustafson, Gary G (Alaska) *Cc:* Robert P Crandall *Subject:* Re: Raven Application Mark & Gus, As the proposed area is changing, is there any change in people who need to be notified? Jane Weggeland, Mark C wrote: Jane, Enclosed is our response to the questions in your email of Feb 13, 2006: Q - Please provide projected recovery factor under primary (you provided 10-20% for WF relative to primary) . A - Primary recovery will be 10-20% of the 001P Q - Can you provide in place volumes by reservoir compartment? A - Liquid and gas Volumes are given by reservoir on Tables 11-3 and 11-4. Q - We need a type log that is not confidential, and the definition of the pool must be consistent with that type log. Please either release confidentiality of Exhibit 1-2 for NK-65A, or else, supply a new type log and associated pool definition. A - Enclosed with this note is a type log from well NK-05. The Raven interval is defined by the following tops in the NK-05 well: Top Sag River 10,628 md Top Kavik 11,165 md lof3 3/24/20069:37 AM [Fwd: RE: Raven Application] . . Q - In your Sep. 8, 2005 application for pilot injection into NK 65-A, you supplied a public version of Exhibit J net pay and volumetric summary for Ivishak. Please provide same for this application and also one for Sag River. A - Gross pay maps are provided in Exhibits 1-15 & 1-16 for the Sag River and Ivishak. Net pay maps are identical, but the contours on the Sag River maps would be 55% of the gross pay maps (55% N:G). The Ivishak net pay maps would be 88% of the Gross Pay maps (88% N:G). Volumes are given by liquid and gas on Tables 11-3 and II-4. Q - At the time of your original application we agreed to confidential status of certain exhibits only as long as the wells upon which the information is based remains in confidential status. Based upon this ruling, I believe Exhibit 1-12 would be considered public, as all the wells are in public status. We would prefer to see Exhibit 1-10 to be in public status as well. A - We request that Exhibits 1-10 and 1-12 be treated as confidential for an indefinite period. The basis for this request is a desire to hold the interpretive work (structural interpretation, faulting, and fault sealing) confidential, rather than the well data upon which the interpretation is based. Since there are unleased tracts near the Raven Pool, it is felt that the release of this interpretive data could provide a potential competitor with valuable data that might be used to their advantage. Since submitting the application, we have reached agreement with the Division of Oil and Gas regarding the boundary of the proposed Raven PA. Enclosed with this note is a map showing the agreed PA boundary. We would like to amend the Pool Rules Application to reflect those boundaries, which are defined as: ADL Acres 034625 13N-15E Sec. 24 S/2SW/4 80 " 034630 12N-15E Sec. 25 E/2, NW/4, E/2SW4 720 Sec. 26 E/2NE/4 Sec. 36 N/2NE/4 034635 12N-16E Sec. 29 S/2NW/4, N/2SW/4, 808 SW/4SW/4 Sec. 30 All Sec. 31 W/2NW/4NW/4 Total 1,608 acres Please feel free to contact me with any questions you may have. Thanks, Mark Weggeland GPMA Subsurface Team Leader Office: +1 (907) 564-5351 Mobile: +1 (907) 229-1628 Email: weggelmc@bp.com<mailto:weggelmc@bp.com> Mail: BP Exploration (Alaska) Inc. PO Box 196612 Anchorage AK, 99519-6612 ------------------------------------------------------------------------ *From:* Jane Williamson [mailto:jane williamson@admin.state.ak.us] *Sent:* Monday, February 13, 2006 4:11 PM 20f3 3/24/20069:37 AM [F'Yd: RE: Raven Application] , . . *To:* Weggeland, Mark C; Gustafson, Gary G (Alaska) *Cc:* Robert P Crandall *Subject:* Raven Application Mark/Gary, We've reviewed your Raven application and for the most part it appears complete. We have just a few requests. Please provide projected recovery factor under primary (you provided 10-20% for WF relative to primary) . Can you provide in place volumes by reservoir compartment? We need a type log that is not confidential, and the definition of the pool must be consistent with that type log. Please either release confidentiality of Exhibit 1-2 for NK-65 A else, supply a new type log and associated pool definition. In your Sep. 8, 2005 application for pilot injection into NK 65-A, you supplied a public version of Exhibit J net pay and volumetric summary for Ivishak. Please provide same for this application and also one for Sag River. It is important that you provide the basis for request of confidentiality for any exhibits you are requesting be held confidential. As we have stated in earlier correspondence (see July 6, 2005 letter to you concerning your May 18, 2005 application for Injection Order) special rules apply to information used by the Commission in administering its underground injection control program. Under 20 AAC 25.537(e), any such information "(1) will be made available to the public unless the material has been claimed confidential and has been determined by the commission to be entitled to confidential treatment; .  At the time of your original application we agreed to confidential status of certain exhibits only as long as the wells upon which the information is based remains in confidential status. Based upon this ruling, I believe Exhibit 1-12 would be considered public, as all the wells are in public status. We would prefer to see Exhibit 1-10 to be in public status as well. Please call me (793-1226) or Bob Crandall (793-1230) to discuss further. Jane Jane Williamson, PE <iane williamson(G?admin.state.ak.us> Reservoir Engineer Alaska Oil and Gas Conservation Commission 30f3 3/24/2006 9:37 AM 4fq bp . ~ o March 20, 2006 BP Exploration (Alaska) Inc. 900 East Benson Boulevard PO. Box 196612 Anchorage, Alaska 99519-6612 (907) 561-5111 Bill Van Dyke, Acting-Director Division of Oil & Gas Department of Natural Resources 550 West ih Avenue, Suite 800 Anchorage, AK 99501-3560 Re: ADL 034630 - NK-38A Well- Request for Extension of Tract Operations ADL 034635 - NK-43 Well- Request for Extension of Tract Operations ADL 034635 - NK-65A Well- Request for Extension of Tract Operations Prudhoe Bay Unit Dear Mr. Van Dyke: On September 12,2005, the Division approved tract operations for BP Exploration (Alaska) Inc. (BPXA) to produce and inject from the Ivishak interval from the NK-38A and NK-65A Wells. This approval is valid until April 1,2006 to allow production and injection during the Raven Participating Area (RP A) application process: On October 27,2005, the Division approved tract operations for BPXA to commingle and conduct production from the Sag River and Kuparuk intervals in the NK-43 Well. This approval is valid for 180 days from the date test production from the Sag River interval in the NK-43 wellbore flows into the Lisburne Production Center. Test production commenced on February 3,2006, and thus this approval extends through August 3, 2006. Oll' February 8, 2006, BPXA submitted an application with the Division to approve fonnation of the RPA. The proposed RPA will encompass the Ivishak and Sag River Fonnations in this area, including production from the NK-38A and NK-43 Wells. BPX.A has also filed an application with the AOGCC for pool rules for a Raven OilPooL To allow continued production and injection for the NK-38A, NK-43 and NK-65A Wells while the Division completes its review and action on the RP A, we request that the above referenced tract operations for each of the wells be extended until September 1, 2006, or . the date the RP A becomes effective, whichever occurs first. Please contact Gary Gustafson at 564-5304 if you should have any questions. Thank you. Sincerely yours, . ~ ~an~~ GPB Manager -, ¥ . . CC: Don Inee, ConocoPhillips Alaska Greg Threadgill, ExxonMobil Gary Forsthoff, Chevron Paul Winslow, Forest Oil Gary Benson, BPXA Gary Gustafson, BPXA Art Copoulos, DO&G Jane Williamson, AOGCC *8 LFwd: Ke: Kaven Appl1catlOnJ , ~ Subject: [Fwd: Re: Raven Application] From: Jane Williamson <jane_williamson@admin.state.ak.us> Date: Mon, 20 Mar 2006 15:38:27 -0900 To: Jody J Colombie <jody_colombie@admin.state.ak.us> JOdy, Please put in Raven file. -------- Original Message -------- Subject: Re: Raven Application Date: Mon, 06 Mar 2006 15:44:39 -0900 From: Jane Williamson <jane williamson@admin.state.ak.us> Organization: State of Alaska To: Mark C Weggeland (Weggeland, Mark C) <weggelmc@BP.com>, Gary G Gustafson (Gustafson, Gary G) <GustafGG@BP.com> CC: Robert P Crandall <bob crandall@admin.state.ak.us> References: <43F12E16.2000101@admin.state.ak.us> Mark and Gus, We received a letter from Givens Law Firm for the heirs of Andrew Oenga requesting the Raven hearing be held. The letter states "The reason for requesting the hearing is that in the Oenga's view, the lease with BP Exploration (Alaska) Inc (BPXA) does not authorize production of oil or gas from the Raven Oil Pool through the Pt. Heald facility." Also, we have not received a reply to our request of February 13 for additional information. The questions we had for you are provided below. Jane Jane Williamson wrote: Mark/Gary, We've reviewed your Raven application a~d for the most part it appears complete. We have just a few requests. Please provide projected recovery factor under primary (you provided 10-20% for WF relative to primary) . Can you provide in place volumes by reservoir compartment? We need a type log that is not confidential, and the definition of the pool must be consistent with that type log. Please either release confidentiality of Exhibit 1-2 for NK-65 A else, supply a new type log and associated pool definition. In your Sep. 8, 2005 application for pilot injection into NK 65-A, you supplied a public version of Exhibit J net pay and volumetric summary for Ivishak. Please provide same for this application and also one for Sag River. It is important that you provide the basis for request of confidentiality for any exhibits you are requesting be held confidential. As we have stated in earlier correspondence (see July 6, 2005 letter to you concerning your May 18, 2005 application for Injection Order) special rules apply to information used by the Commission in administering its underground injection control program. Under 20 AAC 25.537(e), any such information "(1) will be made available to the public unless the material has been claimed confidential and has been determined by the commission to be entitled to confidential treatment; . At the time of your original application we agreed to confidential status of certain exhibits only as long as the wells upon which the information is based remains in lof2 3/20120063:45 PM [Fwd: Re: Raven Application] , , confidential status. Based upon this ruling, I believe Exhibit 1-12 would considered public, as all the wells are in public status. We would prefer Exhibit 1-10 to be in public status as well. Please call me (793-1226) or Bob Crandall (793-1230) to discuss further. Jane Jane Williamson, PE <iane williamson@admin.state.ak.us> Reservoir Engineer Alaska Oil and Gas Conservation Commission -~ ',< ,. 20f2 be to see 3/20/20063:45 PM *'7 L l'wd: Kaven 1 ype LogJ . -- Subject: [Fwd: Raven Type Log] From: Jane Williamson <jane_williamson@admin.state.ak.us> Date: Mon, 20 Mar 2006 15:38:59 -0900 To: Jody J Colombie<jody_colombie@admin.state.ak.us> Please put in Raven file. -------- Original Message -------- Raven Type Log Mon, 13 Mar 2006 15:44:45 -0900 Weggeland, Mark C <Mark.Weggeland@bp.com> Jane Williamson <jane williamson@admin.state.ak.us> Subject: Date: From: To: Hi Jane, Enclosed is a proposed type log for the Raven Pool Application. I wanted to see if this would meet your needs before we formally submit it. «Attachment 1 Exhibit 1-2a.pdf» Thanks, Mark Weggeland GPMA Subsurface Team Leader Office: +1 (907) 564-5351 Mobile: +1 (907) 229-1628 Email: weggelmc@bp.com Mail: BP Exploration (Alaska) Inc. PO Box 196612 Anchorage AK, 99519-6612 Jane Williamson, PE <jane williamson(cZ¿admin.state.ak.us> Reservoir Engineer Alaska Oil and Gas Conservation Commission Content-Type: application/octet-stream Attachment 1 Exhibit I-2a.pdf Content-Encoding: base64 [ of 1 3/20/20063:46 PM " lIiI f .... .. II ~ ~ t1 ... .. 8 ø. ª N i' 0 0 0 'II ff .. C,2 þ' -9150.13 10,628 :=~~~;} ~~. C~ -_~0050 :_----------------------------~ =====;===¿~ ' Exhibit 1-2(a) Raven TypeLog:.NK-05 Kingak Shale '" Sag River Reservoir ~~~~~~7~-- ~ ~) -7'·"'.~ I .1' -=~=7= ,t 'to - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2:~~=::=~-C'-"~-C7-C~-{.- Shublik ==~===~~_l.~ ======~~ -"7 :'7";';'"7:'''', . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - .:.::-:-~=~=~~~ C' '" ==~t==-=_~ Upper Ivishak Reservoir 2A2 Shale ===::=~ I' - -, ..-....-. -- - -. _....~.,'.~".~ '-"'- ------------------------------ '" Lower Ivishak Reservoir .., 11 ,165 ------------------------------- Kavik Shale KH I" PHBL ,5,1 PW 2000 ¡',f:: ..:v(~ 2,;,:, PEF .~..............;,'...·..I 2{':ìG 0 B/E 10 ""',' NPHI -9850 i ¡, '~~ .1 ! i [..~ - :;:- -, . -, :~ -~F?' { · i(\~ ¡~.. i l.~ _:~.~ -i- '~~ ¡ it' '. . :f.,'~ »........... ~-: i, .......( / . ...,).) l ~...!~ ~. ~ ~ _ ,.£- -- ~1 J' , t 7' ¡ r' d' !~ 1 .' ~ ¡ 4,":(., ,;;" ~ lil \ :" 'j. '} 'L ~¡,..- ...~ ;:.~. . ,r-- "",- - --i- t -,- ~:~. ~ -. - -9900 -9950 -10000 -10100 ~1Q.}(X)Q 4f;.{p . . FRANK H. MURKOWSKI, GOVERNOR ~",~f¡1iA OILAlWD GAS CONSERVATION COMMISSION 333 W. 7TH AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 March 15, 2006 Sent by Regular and Certified Mail Return Receipt Requested 70041160000136212387 Dorothy Edwardsen Realty Officer Inupiat Community of the Arctic Slope PO Box 934 Barrow, Alaska 99723 Dear Ms. Edwardsen: This acknowledges your letter dated March 9,2006 and received in this office March 13, 2006. In accordance with the request of Mr. Givens, dated March 3, 2006, the Alaska Oil and Gas Conservation Commission ("Commission") will be conducting a hearing as requested. If Mr. Givens as an attorney intends to be present at the hearing, the Commissioner's will recognize his right to speak for the heirs of Andrew Oenga, as the owners of U.S. BIA Allotment No. F-14632. If any others wish to speak on behalf of the owners of this property, the Commission will require a power of attorney on or before the hearing of March 30, 2006 at 9:00 am documents their authority to speak for the owners of this allotment. Sincerely, '~"'~'~ì ~ ~ (\ 1\. \rX)J J '--'Jl : u . , ãy J,(rCcflìmb1e . pecicr{ Staff Assistant cc: Raymond C Givens Attorney for Heirs of Andrew Oenga l""- ce T' ru li'I.,r;:I~'"'.'.I. lihJi."¡'li[..1I..'... ~.'¡.' ¡..I'I....."'.¡..;I(,.,¡......,.....II'¡..;,~::.'. .]~-.,.'.l~....' ,...:¡ nW""!r:'~~~ a ~r¡- ru ÐAMÐwnK~~99!'f2).,,? N .~""" ",,,,, 1_ ~ Postage $ 0.39 UNIT IIi: 0535 U.S. Postal ServiceTM CERTIFIED MAILM RECEIPT . .,"' . ".'f, '1" ~I· . -.,.-, ,-, ,...:¡ c:J c:J Retum Reciept Fee c:J (Endorsement Required) c:J Restricted Delivery Fee .J] (Endorsement Required) , ~ &F $ 4.64 ( ~:J1Ó62006 ::' .::t' Total Postage ees . <:,' di' c:J Sent To , '.. . '? . /, ..'~.. ' c:J ~~&¿~____ ____._~~.-..1f:.ý¿l6 __~a.. ·š..-m.--.~.t/ ~ ~4/ I""-or 7:/,':: No~,; r t2 ';(f._____.___.___.___.__________._____.. 'ëiíý;'Šiàië:ziP¡;r;?éir7 ;;;:;;-:'4 /C 99 '/;;? 3 . ,1.1. 7ft.......-. '" . .;¡~:r;,\,'I.;¡..."1~hJíl.~III.(.ur.II.... :.J....¡¡¡.IIIU-.cUlIII IIIB.tldr__. I Certified Fee 2.40 1.85 Postmark Here ," .", . Clerk: KGS3I1~ SENDER: COMPLETE THIS SECTION · Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. · Print your name and address on the reverse so that we can return the card to you. · Attach this card to the back of the mailpiece, or on the front if space permits. DYes D No t{;; ~ Pri te Name) 0, Is delivery address differe 1. Article Addressed to: It YES. enter delivery ad A/:o;l-/Jy Ec/ø:t2/~. // ~i?¿a/ry o///ce,-, ~~!\ .. %''''' L /l~?/>?/>?¿//}//. ø ,~ ,//?p~/dr Uv . A . -n Orê/7¿; 5/~~ 3. ServiceTy (l) / /J ¿. ~ertiti .1 .P Cl de? X 9.:Y.,y D Regi &/7ð~/)/{ 9577'-23' D Express Mail 'B{¡eturn Receipt tor Merchandise DC.a.D, c 2. Article Number (Transferfromsel 7004 1160 0001 3621 2387 ,.......--..- PS Form 3811, August 2001 Domestic Return Receipt Dyes 102595-02-M-OS35 *5 IÑUPIAT COMMU!TY of the ARCTIC S~OPE an IRA Regional Tribal Government "..Q E~ .c.. ~ 1.- \ Ir:::. D, . ~ '"".J_î'V !I.,... P.O. Box 934 · Barrow, Alaska 99723 Ph: (907) 852-4227 1-888-788-4227 Fax: (907) 852-4246 March 9, 2006 ¡jAP 1i ') ')r;í)" IV (-',,\ i1 <iJ L.uub ;& Commission ,i\ncooragl3 Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 RE: PROPOSED RAVEN OIL POOL, PRUDHOE BAY FIELD Dear Members of the Commission: The Inupiat Community of the Arctic Slope (lCAS) is a Federally Recognized Regional Tribal Government listed in the Federal Register pursuant to the Federally Recognized Indian Tribe List Act of 1994,25 V.S.C. 479a, under the Indian Reorganization Act of 1934, as amended. The Inupiat Community of the Arctic Slope Realty Department also has a trust responsibility to our land holders of Restricted Property as defined in Federal law. The property where the Niakuk Heald Point Pad sits on is owned by one of our clients and this lease is being negotiated at this time by our clients and their attorney, Mr. Ray Givens of Givens Law Finn. The ICAS Realty Department is in objection of the proposed Raven project until BP settles any issues it has with our client. We believe it would be a premature decision by the Commission if it approves this project before BP settles any issues with the landowner. //-~:J~. ~-\ ; "'\.., ' \. /' /:/4 \ \ ~ J "\ ,.." ../~ /' // /'" \\ (/ "f/ £>~// \ \ooro~w sen _~-~k .'.~ Realty Officer Cc: Price Leavitt, Executive Director Ray Givens, Givens Law Finn files ~4- . .. GIVENS LAW FIRM . P.O. Box 400,912 E. Sherman Ave. Coeur d'Alene, ID 83816-0400 phone (208) 676-1310 fax (208) 676-1296 raygivens@givenslaw.com www.givenslaw.com ·R ·E ""'" E ,··'V..... ·D : \' .,. !(: , 1 : ,.. 'i- .... " J '-c_,,:,-/_ ;J, ~ of1 {} ".: n~~ ....~ i.J @ ¿U\JO AJSi3~::i :Oài & B~3 C!~;f11i¡3~JtQ~1 }\~,u;ti1~~·~~@f6 March 3,2006 Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Re: Proposed Raven Oil Pool, Prudhoe Bay Field Request for Pool Rules and Area Injection Order Dear Members of the Commission: The heirs of Andrew Oenga, as the owners of U.S. BIA Allotment No. F-14632 and lessor of the land underlying the production facilities to be used for production of the proposed Raven Oil Pool (BrA Lease No. F-89-01), request the Alaska Oil and Gas Conservation Commission (Commission) actually hold the hearing tentatively scheduled on the above matter for March 30, 2006 at 9:00 a.m. Detailed written comments will be filed by March 29, 2006. The reason for requesting the hearing is that in the Oenga's view, the lease with BP Exploration (Alaska) Inc. (BPXA) does not authorize production of oil or gas from the Raven Oil Pool through the Pt. Heald facility. Thank you very much. ,Sincerely, 4....-·Ø ..:- Raymond C. Givens for the Heirs of Andrew Oenga RCG:jr enc. · ~ Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Proposed Raven Oil Pool, Prudhoe Bay Field Request for Pool Rules and Area Injection Order BP Exploration (Alaska), Inc. ("BPXA"), by letter and application dated February 8, 2006, requested the Alaska Oil and Gas Conservation Commission ("Commission ") issue an area injection order and pool rules under 20 AAC 25.460 and 20 AAC 25.520, respectively, to govern development of the proposed Raven Oil Pool, Prudhoe Bay Field, on the North Slope of Alaska. This proposed pool is located within portions of Sections 23, 25, 26 and 36 of T12N-R5E and Sections 29, 30, and 31 of Tl2N-R16E, Umiat Meridian. The Commission has tentatively scheduled a public hearing on this application for March 30, 2006 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on March 6, 2006. If a request for a hearing is not timely filed, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221 after March 13,2006. In addition, a person may submit a written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West ih Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on March 29, 2006 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the March 30, 2006 hearing. If you are a person with a disability who may need a special modification in order to comment or to attend the public hearing, please contact the Commission's Special Assistant Jody Colombie at 793-1221 before March 23, 2006. John K. Norman Chairman Published Date: 2/14/06 AO# 02614027 *3 t\.µµ1I~411VlIIVl ~dVt:( µVVIIUlt::s: . . Subject: Application for Raven pool rules? From: Kristen Nelson <knelson@petroleumnews.com> Date: Mon, 13 Feb 2006 16:08:20 -0900 To: 'Jody Colombie' <jody_colombie@admin.state.ak.us> Jody, Hi, can I get a copy of the non-confidential portions of the Raven oil pool application? Thanks, Kristen Kristen Nelson, Editor-in-Chief Petroleum News ph: (907)245-5553, fax: (907)248-3437 www.PetroleumNews.com \ r\ \ 'I .....,"- \,~ t .r- ~\ "~.~"'~":.~~~",.~_.-:-::/,' \~~X'-... i"\.~..\~~ ~;\ \ \ \f..... (\ ~j.-.._ /'~ \j,,,, '-.J -- (, ,C,r~';, r ',....~~\ '"'''-'\..\ ~"'"!\ . 'I., t\ .,. I (\ r\ "",I, ...._J"'~. ~ \ \,. . '\ .. , \:t· C~)\j Q (\. ~D " \J \[r ... \ ,..., "D~-,^,~ .. ir\ '~ \ "\ . \.!'\ "" ,,", " 'Il"", ¡t.) . ,. ---..~.,- ,,_. ",.;......::.~ ''<\. \i~,. l'!.'Ji'L I t -~ ! ¡ C¡\4\t:')1.J; \ ~ ¡, 'i'(;----__\- ~ """"....Jv' '. ,. \; / r-~. ..,~..,.... ',/ ......".............-.-.."".. "". ) ---"""'- '-...,,-..~~"" l of 1 2/1412006 8:22 AM :#;1 STATE OF ALASKA . NOTICE TO PUBLISHER . ADVERTISING ORDER NO. ADVERTISING ORDER SEE BOTTOM FORINVOICE ADDRESS INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AO-0261402' 7 AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE F AOGCC AGENCY CONTACT DATE OF A.O. R 333 W 7th Ave, Ste 100 o Anchorage, AK 99501 M Jody Colombie PHONE February 13, 2006 PCN (907) 793 -12) 1 DATES ADVERTISEMENT REQUIRED: ¿ Anchorage Daily News PO box 149001 Anchorage, AK 99514 February 14,2006 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed Type of Advertisement LegalI:8J o Display Classified DOther (Specify) SEE A TT ACHED .' SEND INVOICE IN TRIPUCATE.' AOGCC, 333 W. 7th Ave., Suite 100 TO . < ... ....... Anchora!!'e. AK 99.101 REF TYPE NUMBER AMOUNT DATE 1 VEN 2 ARD 02910 3 4 I TOTALOF I PAGE 1 OF ALL PAGES$ 2 PAGES COMMENTS ¡:IN ðMnllNT ~v f"':f"': P~M If"': ðf"':f"':T ¡:y NMR DIST LID 1 05 02140100 2 3 R:~~)\ c\) .. \ ~~ 73451 DIVISION APPROVAL: . . Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Proposed Raven Oil Pool, Prudhoe Bay Field Request for Pool Rules and Area Injection Order BP Exploration (Alaska), Inc. ("BPXA"), by letter and application dated February 8, 2006, requested the Alaska Oil and Gas Conservation Commission ("Commission") issue an area injection order and pool rules under 20 AAC 25.460 and 20 AAC 25.520, respectively, to govern development of the proposed Raven Oil Pool, Prudhoe Bay Field, on the North Slope of Alaska. This proposed pool is located within portions of Sections 23, 25, 26 and 36 of T12N-R5E and Sections 29, 30, and 31 of T12N-RI6E, Umiat Meridian. The Commission has tentatively scheduled a public hearing on this application for March 3D, 2006 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 ~-_.- West 7 Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on Marc!!.. 6, 2006. If a request for a hearing is not timely filed, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221 after March 13,2006. In addition, a person may submit a written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on March 29, 2006 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the March 3D, 2006 hearing. If you are a person with a disability who may need a special modification in order to comment or to attend the public hearing, please contact the Commission's Special Assistant Jody Colombie at 7 21 efore March 23,2006. Published Date: 2/14/06 AO# 02614027 . Anchorage Daily News Affidavit of Publication . 1001 Northway Drive, Anchorage, AK 99508 PRICE OTHER OTHER OTHER OTHER OTHER GRAND AD# DATE ill ACCOUNT PER DAY CHARGES CHARGES #2 CHARGES #3 CHARGES #4 CHARGES #5 TOTAL 724859 02/14/2006 02614027 STOF0330 $183.28 $183.28 $0.00 $0.00 $0.00 $0.00 $0.00 $183.28 ·1c0La()~ )j: ;J ((Û': ~,,\_:':l\:i';J", .: !'t',;"Notice OfP,l.Iblij:!.¡eorÎlI9 . ,.ll:.. STATI¡¡1ÔFAI;ASKA Alaska Oil iCIIJd: Gas Com¡ervation Commission Re: P. roposed Rave.r\.,..QIfi300l, Prudhoe Bav Field. Request for Poa~es and Area Iniection . Order BP EXPloratlQn (Alaska), Inc. ("Bf'XA"),i)v leV;' ter and application dated Februarcv 8i2~'¡ re,. quested the Alaska ()iland <:;as Conser 'on~ Comm Ission - (,II Coml11issionolll.i$:$tle: (tn- c~ tion arder and pool rules under20AAc: .' .' . .d 20 AAC 25.520, respective Iv, to govern devèlQP' ment of the proposed Raven Oil Pool, Prudhoe Bav Field. on the North SIQpe of Alaska. This pro· posed pool is located within portions of Sections 23, 25, 26 and .36 of T12N·R5E and SectiQns 29. 3D, ónd 31 of T12N.R16E. Umiót Meridian. The Commission has tentative1v scheduledapob· lie hearing ón this application for March 30, 2006 at 9:00 am at the Alaska Oil and GosConservation Commission at 333 West 7th Avenue, Suite 100. An· chorage, AlaSka 99501. A persQn mav request that the tentative Iv scheduled hearing be held bv filing a written request with the Commission no later than 4:3D pm Qn March 6, 2006. If a request for a hearing is nQt timelv filed, the Commission mav cQnsider the issuance of an or. der without a hearing. To learn if the Commission will hold the public hearing, please call 793·1221 óf· ter March 13, 2006. I n addition, a person mav submit a written com· ments regarding this applicatiQnto the Alaska Oil and Gas Conservation Commission at 333 west 7th Avenue. Suite 1()(), Anchorage. Alaska 99501. Writ· ten comments must be received no later than 4:30 pm on March 29. 2006 except that if the Commis~ .sion decides to hold a public hearing. written prQ' test or comments must be received no later than the conclusio~ of Ih'e March 30. 2()06 heÒring. If vou are a person with a d's.abilitv who mav need a special modifications in ot;der to comment or to attend the public hearin~:!,jèase contact the Commission's Special Assistqn.f'Jodv Colombie at 793··1221 before March 23.2()ó6';.'..\ Is/: John K. Norman Chairma. STATE OF ALASKA THIRD JUDICIAL DISTRICT Christine Clark, being first duly sworn on oath deposes and says that she is an advertising representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on the above dates and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing ublication is not in excess of the rate charged private individua Subscribed and sworn to me before this date: Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska MY CQMMlSSIO~ EXPIRES, C:J:Y.!?fO) / /~ / 1;: /J / /. Ij \{(f({((fr. J<{ ()/rYJh..~:...{.LŸC vl/~~Þ{Li...~lL~ . \.\\\~t:~':-'!' ~.%~....~ '. / ~~.' --. "~~ j (S~·\~OTARj:~S. ~.. --- .::. .... . . -.. =~ : ÞuSUC .: ~ -::. ~"~ ...~. ~~ .... .."'t. .~~ ~. '~OFþI ...~....:'\ ~ '. ..~..." ;1.1 . . '. ", :I)j ItRmH\ . AO# 02614027 Published Date: 2114106 -~----------- Re: Public Notice . . Subject: Re: Public Notice From: "Ads, Legal" <legalads@adn.com> Date: Mon, 13 Feb 2006 15:42:11 -0900 To: Jody Colombie <jody_colombie@admin.state.ak.us> Hello Jody/Kari: Following is the confirmation information on your legal notice. Please review and let me know if you have any questions or need additional information. Account Number: STOF 0330 Legal Ad Number: 724859 Publication Date(s): February 14, 2006 Your Reference or PO#: 02614027 Cost of Legal Notice: $183.28 Additional Charges: Web Link: E-Mail Link: Bolding: Total Cost To Place Legal Notice: $183.28 Your Legal Notice Will Also Appear On The Web: www.adn.com: XXX Your Legal Notice Will Not Appear On The Web www.adn.com: Thank You, Kim Kirby Anchorage Daily News Legal Classified Representative E-Mail: legalads@adn.com Phone: (907) 257-4296 Fax: (907) 279-8170 On 2/13/06 2:54 PM, "Jody Colombie" <jody colombie@admin.state.ak.us> wrote: Please publish on 2/14/06. Kari (for Jody) 1 of 1 2/14/20068:22 AM I 02-902 (Rev. 3/94) . . Publisher IOri gin a I Copies: Department Fiscal, Department, Receiving AO.FRM STATE OF ALASKA ADVERTISING ORDER SEE BOTTOM FOR INVOICE ADDRESS NOTICE TO PUBLISHER ADVERTISING ORDER NO. INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH AITACHED COPY OF ADVERTISEMENT MUST BE SUBMIITED WITH INVOICE AO-02614027 F AOGCC 333 West ih Avenue. Suite 100 Anrhnr::!uf" A K qq'i() 1 907-793-1221 AGENCY CONTACT DATE OF A.O. R o Joc1v Colombie Februarv 13. )006 PHONE PCN (907) 793 -1 ?? 1 DATES ADVERTISEMENT REQUIRED: M T o Anchorage Daily News PO box 149001 Anchorage, AK 99514 February 14,2006 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Account # STOF0330 United states of America AFFIDAVIT OF PUBLICATION REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. ATTACH PROOF OF PUBLICATION HERE. division. Before me, the undersigned, a notary public this day personally appeared who, being first duly sworn, according to law, says that helshe is the of Published at in said division and state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2005, and thereafter for _ consecutive days, the last publication appearing on the _ day of , 2005, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This _ day of 2005, Notary public for state of My commission expires . . Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Proposed Raven Oil Pool, Prudhoe Bay Field Request for Pool Rules and Area Injection Order BP Exploration (Alaska), Inc. ("BPXA"), by letter and application dated February 8, 2006, requested the Alaska Oil and Gas Conservation Commission ("Commission") issue an area injection order and pool rules under 20 AAC 25.460 and 20 AAC 25.520, respectively, to govern development ófthe proposed Raven Oil Pool, Prudhoe Bay Field, on the North Slope of Alaska. This proposed pool is located within portions of Sections 23, 25, 26 and 36 of TI2N-R5E and Sections 29, 30, and 31 of TI2N-R16E, Umiat Meridian. The Commission has tentatively scheduled a public hearing on this application for March 30, 2006 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on March 6, 2006. If a request for a hearing is not timely filed, the Commission may consider the issuance of an order without a hearing. To learn if the Commission will hold the public hearing, please call 793-1221 after March 13,2006. In addition, a person may submit a written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on March 29, 2006 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the March 30, 2006 hearing. If you are a person with a disability who may need a special modification in order to comment or to attend the public hearing, please contact the Commission's Special Assistant Jody Colombie at 7 21 efore March 23,2006. ~blishedI>ate:2/14/06 AO# 02614027 Ldser IVlal/lrlg LaoelS Jam-Proof Mary Jones XTO Energy, Inc Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, 10 83702 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Darwin Waldsmith PO Box 39309 Ninílchick, AK 99639 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669-7714 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 ~çorporate , 5 I G N A T U R E . David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Kay Munger Munger Oíllnformation Service, Inc PO Box 45738 Los Angeles, CA 90045-0738 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 Soldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 North Slope Borough PO Box 69 Barrow, AK 99723 . use template LI:CJU..::!;¿U Mona Dickens Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 Samuel Van Vactor Economic Insight Inc. 3004 SW First Ave. Portland, OR 97201 Schlumberger Drilling and Measurements 2525 Gambell Street #400 Anchorage, AK 99503 Ivan Gillian 9649 Musket Bell Cr#5 Anchorage, AK 99507 Jack Hakkíla PO Box 190083 Anchorage, AK 99519 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 SOldotna, AK 99669-2139 Cliff Burglin PO Box 70131 Fairbanks, AK 99707 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 ÁJ Barrow, AK 99723 - J 6 V ~/lè(/ 1.888.CE TtìDAY (''38.6~7q) PublIc NotIce . . Subject: Public Notice From: Jody Colombie <jody _ colombie@admin.state.ak.us> Date: Mon, 13 Feb 2006 15:30:11 -0900 To: Robert E Mintz <robert_mintz@law.state.ak.us>, Christine Hansen <c.hansen@iogcc.state.ok.us>, Terrie Hubble <hubbletl@bp.com>, Sondra Stewman <StewmaSD@BP.com>, Scott & Cammy Taylor <staylor@alaska.net>, stanekj <stanekj@unocal.com>, ecolaw <ecolaw@trustees.org>, trmjrl <trmjr 1 @aol.com>, jbriddle <jbriddle@marathonoi1.com>, shaneg <shaneg@evergreengas.com>, jdarlington <jdarlington@forestoil.com>, nelson <knelson@petroleumnews.com>, cboddy <cboddy@usibelli.com>, Mark Dalton <mark.dalton@hdrinc.com>, Shannon Donnelly <shannon.donnelly@conocophillips.com>, "Mark P . Worcester" <mark.p.worcester@conocophillips.com>, Bob <bob@inletkeeper.org>, wdv <bill_van _ dyke@dnr.state.ak.us>, tjr <tim _ ryherd@dnr.state.ak.us>, bbritch <bbritch@alaska.net>, mjnelson <mjnelson@purvingertz.com>, Charles O'Donnell <charles.o'donnell@veco.com>, "Randy L. Skillern" <SkilleRL@BP.com>, "Deborah J. Jones" <JonesD6@BP.com>, "Steven R. Rossberg" <RossbeRS@BP.com>, Lois <lois@inletkeeper.org>, Dan Bross <kuacnews@kuac.org>, Gordon Pospisil <PospisG@BP.com>, "Francis S. Sommer" <SommerFS@BP.com>, Mikel Schultz <Mikel.Schultz@BP.com>, "Nick W. Glover" <GloverNW@BP.com>, "Daryl J. Kleppin" <KleppiDE@BP.com>, "Janet D. Platt" <PlattJD@BP.com>, "Rosanne M. Jacobsen" <JacobsRM@BP.com>, ddonkel <ddonkel@cfl.rr.com>, mckay <mckay@gci.net>, Barbara F Fullmer <barbara.f.fullmer@conocophillips.com>, bocastwf <bocastwf@bp.com>, Charles Barker <barker@usgs.gov>, doug_schultze <doug_schultze@xtoenergy.com>, Hank Alford <hank.alford@exxonmobil.com>, Mark Kovac <yesno 1 @gci.net>, gspfoff <gspfoff@aurorapower.com>, Gregg Nady <gregg.nady@shel1.com>, Fred Steece <fred.steece@state.sd.us>, rcrotty <rcrotty@ch2m.com>, jejones <jejones@aurorapower.com>, dapa <dapa@alaska.net>, jroderick <jroderick@gci.net>, eyancy <eyancy@seal-tite.net>, "James M. Ruud" <james.m.ruud@conocophillips.com>, Brit Lively <mapalaska@ak.net>,jah <julie~houle@dnr.state.ak.us>, buonoje <buonoje@bp.com>, Mark Hanley <mark_hanley@anadarko.com>, 10ren_Ieman <lorenJeman@gov.state.ak.us>, Julie Houle <julie_houle@dnr.state.ak.us>, John W Katz <jwkatz@sso.org>, Suzan J Hill <suzan_hill@dec.state.ak.us>, tablerk <tablerk@unocal.com>, Brady <brady@aoga.org>, Brian Havelock <brian_havelock@dnr.state.ak.us>, bpopp <bpopp@borough.kenai.ak.us>, Jim White <jimwhite@satx.rr.com>, "John S. Haworth" <john.s.haworth@exxonmobi1.com>, marty <marty@rkindustrial.com>, ghammons <ghammons@aol.com>, rmclean <rmclean@pobox.alaska.net>, mkm7200 <mkm7200@aol.com>, Brian Gillespie <ifbmg@uaa.alaska.edu>, David L Boelens <dboelens@aurorapower.com>, Todd Durkee <TDURKEE@KMG.com>, Gary Schultz <gary_schultz@dnr.state.ak.us>, Wayne Rancier <RANCIER@petro-canada.ca>, Brandon Gagnon <bgagnon@brenalaw.com>, Paul Winslow <pmwinslow@forestoil.com>, Garry Catron <catrongr@bp.com>, Sharmaine Copeland <copelasv@bp.com>, Kristin Dirks <kristin_dirks@dnr.state.ak.us>, Kaynell Zeman <kjzeman@marathonoil.com>, John Tower <John.Tower@eia.doe.gov>, Bill Fowler <Bill_Fowler@anadarko.COM>, Scott Cranswick <scott.cranswick@mms.gov>, Brad McKim <mckimbs@BP.com>, Steve Lambe <lambes@unocal.com>,jack newell <jack.newell@acsalaska.net>, James Scherr <james.scherr@mms.gov>, nI617@conocophillips.com, Tim Lawlor <Tim_Lawlor@ak.blm.gov>, Lynnda Kahn <Lynnda_Kahn@fws.gov>, Jerry Dethlefs <Jerry.C.Dethlefs@conocophillips.com>, crockett@aoga.org, Tamera Sheffield <sheffield@aoga.org>, Jon Goltz <Jon.Goltz@conocophillips.com>, Roger Belman <roger.belman@conocophillips.com>, Mindy Lewis <mlewis@brenalaw.com>, Kari Moriarty <moriarty@aoga.org>, Patty Alfaro <palfaro@yahoo.com>, Jeff <smetankaj@unocal.com>, Todd Kratz <ToddKratz@chevron.com>, Gary Rogers lof2 2/22/2006 11:07 AM Public NotIce . . <gary _rogers@revenue.state.ak.us>, Arthur Copoulos <arthur _ copoulos@dnr.state.ak.us>, Ken <ken@secorp-inc.com>, Steve Lambert <salambert@unocal.com>, Joe Nicks <news@radiokenai.com>, Jerry McCutcheon <susitnahydronow@yahoo.com>, Paul Todd <paulto@acsalaska.net>, Bill Walker <bill-wwa@ak.net>, Iris Matthews <Iris_Matthews@legis.state.ak.us>, Paul Decker <paul_decker@dnr.state.ak.us>, Rob Dragnich <rob.g.dragnich@exxonmobil.com>, Aleutians East Borough <admin@aleutianseast.org>, Marquerite kremer <marguerite_kremer@dnr.state.ak.us>, Robert Brelsford <Robert.Brelsford@argusmediagroup.com>, Alicia Konsor <alicia _ konsor@dnr.state.ak.us> Content-Type: application/pdf iRaven_ Public _N otice-1.pdf Content-Encoding: base64 20f2 2/22/2006 11 :07 AM · .- - Online Public Notice C . \1 I _ytate oj h d'>r::él Public Notices Alaska Oil & Gas Conservation Commission Submitted by: jjco!ombiei02 Date Submitted: 02í13i2006 03:15 PM Date Modified: Ak Admin Journal: (not printed] Attachments: No files attached Alaska Oil & Gas Conservation Commission Category: Public Notices Publish Date: 02/14/2006 Archive Date: 04/01/2006 Department: Administration Location: Anchorage Coastal District: NIA Body of Notice: Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Proposed Raven Oil Pool, Prudhoe Bay Field Request for Pool Rules and Area Injection Order BP Exploration (Alaska), Inc. ("BPXA"), by letter and application dated February 8, 2006, requested the Alaska Oil and Gas Conservation Commission ('Commission") issue an area injection order and pool rules under 20 AAC 25.460 and 20 AAC 25.520, respectively, to govern development of the proposed Raven Oil Pool, Prudhoe Bay Field, on the North Slope of Alaska. This proposed pool is located within portions of Sections 23, 25, 26 and 36 of T12N-R5E and Sections 29,30, and 31 ofT12N-R16E, Umiat Meridian. The Commission has tentatively scheduled a public hearing on this application for March 30, 2006 at 9:00 am at the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. A person may request that the tentatively scheduled hearing be held by filing a written request with the Commission no later than 4:30 pm on March 6, 2006. If a request for a hearing is not timely filed, the Commission may consider the issuance of an order without a hearing. To learn ifthe Commission will hold the public hearing, please call 793-1221 after March 13,2006. In addition, a person may submit a written comments regarding this application to the Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 pm on March 29, 2006 except that if the Commission decides to hold a public hearing, written protest or comments must be received no later than the conclusion of the March 30, 2006 hearing. If you are a person with a disability who may need a special modification in order to comment or to attend the public hearing, please contact the Commission's Special Assistant Jody Colombie at 793-1221 before March 23, 2006. of2 2/1312006 3: 17 PM · __ ___ _n_ O____H .-.r-- r _n___ --0---- -. - - - ------ John K. Norman Chairman Revision History: 02t1 3/2006 03 i 5:43 Pi'li1 by jjcolornbíe/02/Stateli\laska/US Home Page Notices by: Department I Category I Publish Date ~ of2 2/13/20063:17 PM ~1 . . . " j ,i;'~~.. .. k I ",;í¡.'~ 'p¡¡f¡,',A.,.." BPXA t 1 '~iMt)}" II J f~ ~ . .~ .1' '(!II, B!il ,Ii!ii _ 'M.. " Application for Raven Oil Pool Rules and Area Injection Order February 2006 . . . RECEIVED FEB 1 0 tOUô t Nab Oil & Gas Cans. Commi..Î9n if..... Ancher.g. Application for Raven Oil Pool Rules and Area Injection Order . February 2006 . . . · February 8, 2006 Commissioners Alaska Oil and Gas Conservation Commission 333 West ih Avenue, Suite 100 Anchorage, AK 99501 RE: Raven Pool Rules and Area Injection Order Application Dear Commissioners: BP Exploration (Alaska) Inc. (BPXA), operator of the Prudhoe Bay Unit (PBU), on behalf of itself and the other PBU Working Interest Owners, submits the attached application for Pool Rules and Area Injection Order Application for the Raven Oil Pool. BPXA also requests that those certain exhibits in the attachment labeled "Confidential" be treated as confidential by the Commission in accordance with the provisions of AS 31.05.035 and 20 AAC 25.537. · Please contact me (564-5351) or Gary Gustafson (564-5304) if you have any questions or comments regarding this application. Sincerely, ~W Mark Weggeland GPMA Manager Attachments CC: Sonny Rix, ExxonMobil Dan Kruse, ConocoPhillips Gary Forsthoff, Chevron Leonard Gurule, Forest Oil Gary Gustafson, BPXA Dave Strait, BPXA Jane Williamson, AOGCC Art Copoulos, DNR · Raven Oil Pool Rules & Area .on February,2006 ~ · Attachment 1 Application for Raven Oil Pool Rules and Area Injection Order · February 2006 The following Exhibits in this application are confidential: ~2,~5,~7,~8,~9,~10,~12 II-3, II-4, II-5, II-6 · 1/33 Raven Oil Pool Rules & Area eon February,2006 ~ · Table of Contents I. Geology Introduction Stratigraphy Structural Mapping Fluid Contacts and Compartmentalization Pool Limits II. Reservoir Description and Development Planning Rock and Fluid Properties In-Place Hydrocarbons Reservoir Performance and Development Options Reservoir Development and Management Plan Fluid Injection III. Facilities IV. Well Operations Drilling and Well Design · Reservoir Surveillance Program V. Area Injection Operations VI. Proposed Raven Pool Rules VII. Proposed Area Injection Order VIII. List of Exhibits · 2/33 Raven Oil Pool Rules & Area .ion February,2006 . · I. Geology Introduction The Raven Pool is located offshore of Alaska's North Slope and within the geographic limits of the Niakuk Participating Area (P A) as illustrated in Exhibit I-I. The Raven reservoir lies beneath the Niakuk Field (Kuparuk formation) and includes the stratigraphic interval from top Sag River formation to the base of the Ivishak formation. The limits of the pool are defined by the structural closure of the Raven reservoir. There are twelve wells in, or near, the proposed Raven PA that have encountered the Sag River and/or Ivishak formations. Eight of the wells are abandoned exploration or side- tracked well-bores while four are currently active (2 at Raven Pool and 2 at Niakuk Pool). The NK-38A and NK-65A wells have open perforations in the Raven reservoir (Ivishak). The NK-43 and NK-19A wells are Kuparuk producers, with plugged intervals in the Sag RiverlIvishak formations that could be utilized in the Raven development. · Since March 31, 2005, the NK-38A well has periodically produced oil from the Ivishak as a tract operation. Subsequently, the NK-65A well was drilled and completed as a water injector to support the NK-38A producer. The NK-65A well began water injection on October 7, 2005. · Hydrocarbons are also proven in the Sag River formation within the Raven structure. In 2001, light gravity oil and gas flowed during a long term test from the Sag River formation in the NK-43 well. The well was converted solely to Kuparuk production after several weeks of Sag River production. The NK-43 well is currently being evaluated to re-open the Sag River perforations and commingle production from the Kuparuk and Sag River Formations. Hydrocarbons were logged throughout the Sag River in the NK- 38APB 1 and NK-65A wells, but not tested. In addition, a wet Sag River/Ivishak section was logged and tested in the NK-19A well, confirming the down-dip limit of hydrocarbons in both reservoirs. The Raven Owners now propose these Pool Rules for the accumulation and apply for an Area Injection Order to include the entire stratigraphic interval of the Raven reservoir. 3/33 Raven Oil Pool Rules & Area .ion February,2006 ~ · Stratigraphy The Raven reservoir is part of the Permo-Triassic stratigraphy that forms the major reservoirs in the nearby Prudhoe Bay Field. The reservoir interval is defined by the correlative interval from 13,700 to 14,135 measured depth feet in the NK-65A well and includes the Sag River and the Ivishak. reservoirs. The Raven Pool also includes the Shublik formation, which separates the two principal reservoirs. Although it is generally considered to be non-reservoir quality, there may be minor zones in the Shublik that may be used for injection and/or production as development proceeds. Exhibit 1-2 shows the Raven type log NK-65A. The Raven reservoir is positioned between two major shales; the Kavik Shale (below) and the Kingak. Shale (above). These shales will vertically isolate fluids injected into the Raven reservoir interval. Structural Mapping · The limits of the Raven Pool are defined by the structural closure of the Raven Reservoir (top Sag River). Two recently reprocessed seismic datasets, a time migrated volume and a Pre-Stack Depth Migration (PSDM) volume, were interpreted and compared to one another to determine the optimum dataset for mapping the structural closure. Each dataset has distinct advantages. The time migrated data better predicts the structural elevations and dips while the PSDM does a better job of positioning faults in the subsurface. The Raven Pool lies in an area where permafrost thins rapidly from onshore to offshore. This is known to cause problems when processing and interpreting seismic data and the PSDM techniques are used to minimize these problems. Hence, the PSDM data more accurately images and positions many of the faults compared to the time migrated data. · However, due to seIsmIC data acquisition limitations, the structural dips and depth prediction observed in the PSDM are more uncertain. Since the time migrated data more closely matches existing well control it was chosen as the primary dataset to define the structural container. Exhibit 1-3 shows a top Sag River depth map created using the time migrated seismic data reprocessed in 2003. The map was created by interpreting the top 4/33 Raven Oil Pool Rules & Area .on February,2006 . · Sag River seismic event. Depth conversion was completed by applying a pseudo-average velocity grid using all the available well control shown on Exhibit 1-1. A second depth interpretation was made using seismic data that was reprocessed in 2004 as a Pre-Stack Depth Migration (PSDM) volume. Exhibit 1-4 shows the resulting top Ivishak depth map using the PSDM data. The top Ivishak seismic horizon is not a consistent event so the top Ivishak map was created by first interpreting the top Lisburne fonnation, then correcting the Lisburne depth surface to match the nearby well control with a correction grid (similar to the depth conversion procedure used with the time migrated data). The top Ivishak surface was created by "isopaching up" using fonnation thickness maps created from the well control shown on Exhibit 1-2. · Because the PSDM minimizes pennafrost effects, it more accurately positions faults and is important to include in the details of well planning. When using the PSDM data, faults generally appear further north than interpreted on the time migrated data and this difference is considered when defining the pool limits. However, due to seismic data acquisition limitations, the PSDM data contains erroneous structural dip and depth errors relative to well control.. This makes the PSDM data a poor choice to define structural closure and Raven Pool limits. The greater accuracy of the time migrated depth prediction makes it more accurate for defining structural closure and pool/P A limits. Exhibit 1-3 represents the principal structural map used to define the poollimits. Fluid Contacts and Compartmentalization North Fault Block · Fluid contacts and reservOIr compartmentalization are other major elements that detennine the Raven pool limits. There are several compartments in the Raven pool that are controlled by both structure and stratigraphy. Exhibit 1-4 shows the location of the NK-04 well in the North Fault Block. NK-04 was not tested. But, log, core and RFT pressure data was collected over the Ivishak interval (Exhibit 1-6). The Sag River fonnation was faulted out in the well. The RFT pressure data show a typical gas gradient (0.11 psi/ft) in the upper Ivishak and a light oil gradient (0.25 psi/ft) in the lower Ivishak. 5/33 Raven Oil Pool Rules & Area .ion February,2006 ~ · A GOC of -9780 TVDss is estimated at the intersection of the two gradients and is positioned within the Ivishak 2A2 shale. This estimated GOC is also supported by the log and core data. The Neutron-Density logs exhibit increased crossover above -9780 (an indication of gas) and the core plug oil saturation increases below this depth, indicating the presence of an oil leg. The pressure at -9850 is approximately 5023 psi (measured in 1985). Oil was present to the base of the reservoir at -9874 TVDss. Exhibit 1-2 shows the NK-65A well, located about a half-mile east of NK-04. The well logged hydrocarbons throughout the Sag River and Ivishak intervals. No pressure data were collected to verify fluid contacts, but the Neutron-Density crossover is significant above the 2A2 shale (-9764 TVDss) and reduced, or absent below the shale (-9791 TVDss). This is consistent with the -9780 TVDss determined from the NK-04 RFT pressure data. · Exhibit 1-7 shows a structural cross-section along the well path of the NK-38A well (see Exhibit 1-4 for location). The cross-section was made using the PSDM seismic interpretation so the well results accurately match the faults. The faults are easily identified by the log signature and their position closely matches the PSDM seismic interpretation shown on Exhibit 1-5. Currently, perforations are limited to the North Fault Block (between Faults B and E), within the lower Ivishak interval (below the regional 2A2 shale). The lower Ivishak can be further divided into the Zone 1 (below) and Zone 2Al above). The wellbore enters the North Fault block in the Zone 1 interval, then climbs upward into the better quality Zone 2Al reservoir where the wellbore crests. The wellbore turns back down and re-enters the poorer quality Zone 1 after crossing a small fault, then reaches total depth in the Kavik shale. The Zone 1 and Zone 2A 1 intervals are both perforated, with gaps between perforations to allow standoff from faults and intervals to set plugs. · The NK-38A well did not encounter any fluid contacts in the North Fault block. The nearly horizontal wellbore was drilled entirely within the oil column at the maximum and minimum elevations of -9868 and - 9838 TVDss. This is consistent with the oil column observed in the NK-04 well. The oil produced from NK-38A is light (-32 API), which is also consistent with the light oil gradient observed in the NK-04 RFf data (Exhibit 1-6). 6/33 Raven Oil Pool Rules & Area .ion February,2006 4IIIÞ Exhibit 1-8 shows the same structural cross-section shown in Exhibit 1-7, but with the · known fluid contacts and pressure information. The NK-38APBl well location is also shown and the NK-04 well is projected -500' onto the cross-section. The 2005 NK-38A well had an initial static pressure of 4973 psi @ -9850' TVDss. This is similar to the 1985 RFT pressure in the NK-04 well (5023 psi @ -9850). South Fault Block · There is a significant pressure difference between the NK-38A pressure of 4973 psi (North Fault Block) and the NK-38APBl pressure of 4464 (South Fault Block). This difference of over 500 psi demonstrates the probable sealing nature the faults, despite an Ivishak-to-Ivishak juxtaposition. In addition, the GOC in the south fault block is approximately 70' deeper than in the North Fault block. The lower pressure in the South Fault Block may be due to differential pressure depletion, but this does not explain the deeper GOc. The reservoir model indicates that by reducing pressure 500 psi the GOC would be lowered by only 10 to 20 feet due to gas cap expansion.. The deeper GOC in the South Fault Block is best explained by compartmentalization that existed when the structure was originally filled. The NK38APBl well has the most complete data set (in a single well) defining Raven fluid contacts and compartmentalization (Exhibit 1-9). The MDT pressure data and log curves identify four distinct fluids and three compartments in the wellbore. 1. The Sag River logged hydrocarbons with a pressure gradient of 0.17 psi/ft. This gradient suggests the presence of a "heavy" gas that may contain a significant liquid component. Alternatively, the pressure gradient may simply be poorly defined (there are only 5 pressure points) and the gradient is actually lower. 2. The Upper Ivishak contains a gas column with a more typical gas gradient of 0.12 psi/ft. This gradient does not intersect the Sag River gradient; further suggesting fluid and pressure separation between the Sag River and Ivishak. · 3. The Upper Ivishak also contains an oil column (0.31 psi/ft gradient) with oil down to the top of the 2A2 Shale. This gradient is consistent with the 32 API oil tested 7/33 Raven Oil Pool Rules & Area .ion February,2006 4IIIÞ · in the North Fault Block from NK-38A. However, the gradient is higher than the oil gradient measured in the NK-04 well (0.25 psi/ft). The difference in the two oil gradients may be due to measurement error rather than different oil types. The upper Ivishak oil and gas gradients intersect at -9850 at the interpreted goc in the NK-38APBl well. The entire upper Ivishak appears to be in the same pressure compartment since the oil and gas gradients are not offset (as observed in the offset Sag River and Ivishak gas gradients). 4. There is a water gradient (0.43 psi/ft) in the entire lower Ivishak (beneath the 2A2 shale). The oil gradient in the upper Ivishak does not intersect with the water gradient in the lower Ivishak, indicating that the 2A2 shale acts as a pressure barrier. It is impossible to extrapolate an owc in the well since the gradients do not intersect. There is oil down to -9889 TVDss and water up to -9910 TVDss. Placing the contact midway in the shale results in an approximate owc of -9900 TVDss. · South and East Areas Exhibit 1-10 shows a structural cross-section from NK-38APBl to the NK-43 well (see Exhibit 1-15 or Exhibit 1-16 for section location). Note that this cross-section does not differentiate the upper and lower Ivishak as did the previous cross-sections. The South and East Raven areas are structurally deeper (on the flanks of the Raven structure) and no hydrocarbons reside in the lower Ivishak in these areas. The estimated owe depth, in the South Fault Block is shown as a reference depth on the cross-section. The cross- section indicates that a continuous hydrocarbon column may exist in the Sag River interval, but the Ivishak pool in the South Fault Block may be separate from an Ivishak pool in the East Area due to a structural "saddle" between the NK-38APBl and NK-43- wells. However, depth conversion uncertainty makes it impossible to determine if these areas are separate, or connected, at the Ivishak level. In addition, the interpreted faults could compartmentalize the two areas, as observed in the North and South Fault Blocks. · Exhibit I-II shows the NK-43 log through the Sag River and Ivishak interval. The Sag River is hydrocarbon bearing and the Ivishak is wet. The top Ivishak depth (-9900') is 8/33 Raven Oil Pool Rules & Area .on February,2006 . coincident with the estimated owe in the South Fault Block, so this well verifies that the · East Area does not have a separate, deeper contact. However, it does not prove the South Fault Block is in the same compartment. The well is currently producing from the Kuparuk, but the Sag River was produced for several weeks after the well was initially drilled in 2001. The Sag River produced a high GOR condensate (-49 API), in combination with a small percentage of oil (estimated at -10% of the liquid volume). This suggests that the Sag River is straddling a GOe and is producing both from a gas cap and an oil leg. The GOe seen in the South Fault Block (- 9850) would place the GOe below the Sag River in NK-43, but the North Fault Block GOe (-9780) would be in the middle of the Sag River at NK-43 and could produce the results seen in the test (condensate and oil). A GOe anywhere in the Sag River may also produce similar results and the NK-43 well test doesn't prove fluid communication to the North Fault Block. · Exhibit 1-12 shows a structural cross-section from NK-19 to the NK-43 well (see Exhibit I-IS or Exhibit 1-16 for section location). As discussed above, the NK-43 well shows gas/condensate, and possible oil in the Sag River. Down-dip, the NK-05 well is clearly in the oil column with 32 API oil tested in the Sag River. Further down-dip, the NK-19A well tested water in the Sag River, thus giving a lower limit to the owe. The NK-19 well is across a fault and structurally higher than the other three wells, but is wet in both the Sag River and Ivishak. This suggests that either the fault is sealing or no trap exists in this area. It is less clear if the Ivishak on Ivishak portion of the fault is sealing. There is sufficient southern dip closure to trap Ivishak oil to the likely -9900 TVDss owe (assuming the Sag River and Ivishak are not in communication due to a Shublik fluid barrier). · Exhibit 1-13 shows data from the 1985 NK-05 exploration well. A DST in the Sag River produced 32 API oil, but the RFf pressure data are too erratic to establish a trend. The Sag River DST indicates the GOe is above -9800 TVDss (consistent with the NK-43 data), and the owe is at, or below -9850. The RFT pressure data and a DST confirm that the Ivishak is wet, with an owe (if any), above -9950 TVDss. The extrapolated water gradient yields a reservoir pressure of 4778 at -9850, which is 245 psi lower than 9/33 Raven Oil Pool Rules & Area I.on February,2006 . · the pressure taken in the NK-04 well during the same year. It is likely that the North Fault Block (where the NK-04 well was drilled), had limited connectivity to the regional aquifer and the pressure at NK-04 represents near "virgin" pressure. The NK-05 well (in the South-East Area), may have had better connectivity to the regional aquifer. More recent wells (e.g. NK-38APBl), show even greater pressure depletion as discussed above. Regardless of the mechanism, the pressure difference between NK-04 and NK-05 clearly demonstrates these wells are in different pressure segments of the Raven accumulation. Exhibit 1-14 shows Sag River and Ivishak data from the NK-19A development well (producing from the Kuparuk). A DST in the Sag River produced water. The NK-05 and the NK-19A wells establish a Sag River owe between -9850 and -9890 TVDss. The Ivishak is wet in this well, which is consistent with all other Ivishak fluid contacts in the Raven area. · The previous discussion establishes the limits to which we can define fluid distribution in the Raven accumulation. The existing well data indicates that the Sag River may have an owe of -9850 TVDss (or as deep as -9890 TVDss) and a GOe of -9780 TVDss. There is uncertainty for these contacts, but the assumed fluid contacts used to define the Raven pool limits are based on, and consistent with, all existing data.. The Ivishak fluid contacts are better established; especially across the main field area which includes the North and South Fault Blocks. A field-wide owe of -9900 TVDss is consistent with all existing well data. A GOe of -9780 TVDss is used in the North Fault Block, while a Goe of -9850 is assumed in all other parts of the field. Pool Limits The critical elements needed to define the Raven pool limits include: 1) structural definition, 2) identification of the major reservoir segments (structurally and stratigraphically), and · 3) defining the fluid contacts for each segment. 10/33 Raven Oil Pool Rules & Area I.on February, 2006 . · These elements are discussed above and they result in well-defined limits to the Raven Pool. Exhibits 1-15 and 1-16 show the gross thickness and distribution of total hydrocarbons for each reservoir (Sag River and Ivishak). The Sag River accumulation extends over a larger area than the Ivishak and geographically encompasses the entire Ivishak accumulation. Therefore, the Sag River map is used to define the limits of the Raven pool. Exhibits 1-17 and 1-18 show key seismic lines that cross the Raven structure in an east-west and north-south orientation. The locations of the seismic lines are shown on the structure map on Exhibit 1-3. · · 11/33 Raven Oil Pool Rules & Area .on February,2006 . · II. Reservoir Description and Development Planning Rock and Fluid Properties Core data and well logs were used to estimate rock properties of the Ivishak and Sag River reservoirs. Core was used to validate the petrophysical interpretations for Ivishak porosity and both Sag River porosity and Net/Gross (Exhibits II-I and II-2). The Ivishak Net/Gross was determined by using a shale cutoff while a cutoff of 5 mD permeability (Kh) was used to calculate net sand in the Sag River. Table II-I summarizes the rock properties used to determine in-place hydrocarbon volumes. Table II-I Raven Average Rock Property Summary POROSITY NET/GROSS Sw Ivishak 20% 88% 40% Sag River 20% 55 % 40% · Fluid properties are estimated from surface fluid samples taken from the NK-38A and NK-43 wells combined with fluid property correlations. No reliable PVT data are available. Fluid properties used in the volumetric analysis are summarized on Table II-2. Table II-I Raven Average Fluid Property Summary IVISHAK IVISHAK IVISHAK SAG RIVER (Average) (North Block) (Other Areas) Boi 1.903 rb/stb 1.960 rb/stb 1.833 rb/stb 1.960 rb/stb Rsi 1515 scf/stb 1600 scf/stb 1412 scf/stb 1600 scf/stb Bgi 0.64 rb/Mscf 0.62 rb/Mscf 0.66 rb/Mscf 0.62 rb/Mscf · 12/33 Raven Oil Pool Rules & Area I.on February,2006 4IIIÞ · Properties vary due to different pressures in varIOUS compartments as described in Section I. The black oil has a gravity of approximately 32 API and the condensate gravity is approximately 49 API. In- Place Hydrocarbons Estimates of in-place hydrocarbons reflect the current stratigraphic and structural interpretation, plus the rock and fluid properties discussed above. The estimated in-place oil volumes are summarized in Table II-3. The condensate volume is based on an estimated yield of 65 bbl/MMscf as detennined from NK-43 production data. Table 11-3 Raven In-Place Oil Volume Summary (MMbo) OIL CONDENSATE TOTAL Ivishak 6.9 to 11.4 2.3 to 3.8 9.2 tol5.2 Sag River 3.5 to 5.8 1.3 to 2.2 4.8 to 8.0 · Total 10.4 to 17.2 3.6 to 6.0 14.0 to 23.2 The estimated in-place oil volumes are summarized in Table II-3 and in-place gas volumes are summarized in Table II-4. The solution gas volumes are estimated from production data from the NK-38A well. Table 11-4 Raven In-Place Gas Volume Summary (bcf) FREE GAS SOLUTION GAS TOTAL Ivishak 35.4 to 59.0 lOA to 17.3 45.8 to 76.3 Sag River 20.4 to 33.9 5.3 to 8.8 25.7 to 42.7 Total 55.8 to 92.9 15.7 to 26.1 71.5 to 119.0 · 13/33 Raven Oil Pool Rules & Area I.on February, 2006 . · The ranges in OOIP and OGIP are due primarily to uncertainty in individual fault block oil-water contacts and gas-oil contacts where there is no well control, reservoir properties and fluid properties. Exhibit II-3 shows the gross oil thickness for the Ivishak and Exhibit II-4 shows the Ivishak gross gas thickness. Exhibits II-5 and I1-6 show the gross oil and gas thickness for the Sag River. · Reservoir Performance and Development Options Ivishak Well Performance There is limited production infonnation from the Raven Ivishak. The NK-38A well drilled the Ivishak reservoir in early 2005 and was put on production in late March. The well flowed intermittently for a total of three months during a six month period. Exhibit B-7 shows the oil production rate and GOR over this period. Production from the well was intentionally limited to -2000 bId because there was no injection into the reservoir to replace voidage and maintain reservoir pressure. Each time the well was opened the GOR climbed steadily and approached 4000 mcf/stb before the well was shut in. Exhibit II-8 shows the Raven reservoir model with the lower Ivishak grid cells visible. The model included only the Ivishak reservoir over the core area of the field (North and South Fault Blocks). The colors represent lower Ivishak fluid saturation, with the red area representing a small gas cap below the 2A2 Shale. Exhibit II-9 shows a cross-sectional view of the north fault block, also with fluid saturations at initial conditions. The NK- 38A producer and the NK-65A water injector are both drilled and perforated in the oil column within the lower Ivishak. · The increase in the GOR observed in the NK-38A well (Exhibit I1-7) is interpreted to be coning of a small gas cap into wellbore. The GOR measurements taken immediately after production began yielded an initial (solution gas) GOR of -1600 mcf/stb. The subsequent increase in GOR above 1600 is attributed to gas coning, while the more rapid rise in GOR after restarting production is consistent with reestablishing a gas cone "pathway" that was created earlier. A production profile was taken in NK-38A which 14/33 Raven Oil Pool Rules & Area .on February,2006 . · shows the gas influx comes near the crest of the horizontal well bore (away from faults). This is consistent with the interpretation of gas coning from the sub-2A2 shale gas cap. Alternatively, gas influx near faults could have indicated the gas was coming from the larger Upper Ivishak gas cap, along faults that cut through the 2A2 Shale. No significant water is produced in the NK-38A well. · Exhibit II-lO illustrates there is good pressure communication between the NK-38A producer and the NK-65A injector. The NK-38A static pressures taken before and after production started show a pressure decrease of over 700 psi over four months. The initial static pressure of the NK-65A injector was taken within 1-2 weeks of the later NK-38A pressure and it showed a similar reservoir pressure. This suggests the injector should be able to provide good pressure support, and possibly good sweep. Exhibit II-II shows the reservoir simulation midway in production of the North Fault Block. The model indicates that the small, sub-2A2 shale gas cap disappears as a result of being produced through the NK-38A well bore. The GOR at NK-38A should eventually drop assuming that little or no gas is produced from the upper Ivishak. The model predicts minor aquifer support on the west flank of the field and that additional support may come from solution gas drive. The principal recovery mechanism is voidage replacement through water injection. Ivishak Development Options Only the North Fault Block is expected to have significant recovery from the Ivishak with the two existing wells and perforations. Currently, there is a significant portion of the existing NK-38A well bore in the South Fault Block that is not perforated. Greater recovery efficiency is predicted by the current reservoir model if the two fault blocks are developed independently. Therefore, the current plan is to add these perforations once the North Fault Block has been depleted. The simulation model also suggests the potential for up to three sidetrack locations; one in the North Fault Block and 2 in the South Fault Block. However, future development options will ultimately be determined by field performance and economic factors. · 15/33 Raven Oil Pool Rules & Area I.on February,2006 . · Sag River Well Performance There is limited production information from the Raven Sag River reservoir. The NK-43 well tested the Sag River reservoir in early 2001. The well was flowed for about two months before it was plugged and the main Kuparuk reservoir was put on production. Exhibit 11-12 shows the liquid production rate and GOR over this period. As discussed previously, the well was completed over the GOC and there is production from both the gas cap and oil column. The "oil" shown on the production plot is principally a 40 API gravity condensate produced from the gas cap, with a minor black oil component produced from the oil leg. · The condensate yield from the Sag River gas is estimated at 65 bbl/Mscf based on the NK-43 production data. The GOR was initially quite high at 9,000 to 10,000 scf/stb, but quickly stabilized at about 14,000 scf/stb. Total fluid declined from -800 to -600 bId during the test period. This decline may be related to condensate dropping out in the reservoir with the pressure drop near the well-bore, but additional information is needed to confirm this interpretation. Plans have been approved to re-open the Sag River perfs to collect more information on reservoir performance and determine its long term production performance. Sag River Development Options The Raven Sag River reservoir and well performance is less understood and the resource is small. Information from the NK-43 long term test will be helpful in understanding the Sag River development potential. Further development will be dependent upon field performance and economic factors. · Reservoir Development and Management Plan The current development plan is to produce the Ivishak from the NK-38A horizontal well in the North Fault Block and maintain an average voidage replacement ratio of 1.0 with water injection at NK-65A. The existing reservoir model will be history matched as production progresses and the model will be used to optimize production and injection 16/33 Raven Oil Pool Rules & Area .ion February,2006 . · rates. The model will also be used to evaluate additional drilling options and well placement. Exhibit 11-13 shows the predicted fluid production rates for NK-38A from preliminary simulation model runs. Exhibit 1I-14 shows the fluid properties used in the model. The model was built before the NK-38A and NK-65A wells were drilled and will be updated to better reflect the new well data. Surveillance data will be collected on an ongoing basis to facilitate reservoir management and field development. These activities will include: · Static bottom-hole pressure surveys · Production Logging · Injection Logging · Production Well Testing · In parallel with the Ivishak development, the Sag River reservoir and well performance will be evaluated by re-opening the Sag River at NK-43. The next development decisions will be based on the production information gained from the performance of these three wells in consideration of the many options described in the previous section. Fluid Injection Water injection is a key part of the Raven Reservoir management strategy. Ivishak reservoir modeling indicates an incremental recovery from water-flooding to be approximately 10 - 20% of the original oil in place, relative to primary depletion. · Water is the principal fluid that will be injected into the Raven Pool. The initial injection will be in the NK-65A well located on the PBU DS NK Pad, which was built for Niakuk Field development (Exhibit II-I5). Water will be routed to the DS NK Pad manifold and then routed to the injection well where a flow meter will measure total fluid injected. Exhibit H-I6 shows the location of the NK-65A injector in relationship to the other wells in the area. Only the NK-65 and NK-65PBl wells are within a ~ mile of this injector (parent well to the NK-65A injector). Neither of these wells were drilled deep enough to encounter the Raven reservoirs. Both of these wells were plugged according to 17/33 Raven Oil Pool Rules & Area .on February,2006 ~ · regulations prior to the drilling the NK-65A side-track well. The NK-65A completion employs a 6,000' long 4 Y2" liner from the sidetrack depth in the Ugnu through the Ivishak target depth. The production packer is positioned roughly 3,000' vertically above the reservoir top. The NK-65A casing program is detailed in the "Application to Drill" and is documented with the AOGCC in the completion record. · Injection Fluids Currently, the only water used for injection at the Niakuk drill site is taken from the Beaufort Sea and processed at the Sea Water Treatment Plant. It is possible that produced water could be injected at some time in the future. Produced water is water that is produced with Lisburne, Pt. McIntyre, West Beach, North Prudhoe Bay State and Niakuk oil, and is separated from the oil and gas at the LPC. Produced water may contain trace amounts of scale inhibitor, corrosion inhibitor, emulsion breakers, and other products used in the production process. Below is a list of possible injection fluids: a. Seawater from the STP b. Produced water from the LPC (possible in the future) c. Fluids injected for purposes of stimulation (possible in the future) d. Miscible hydrocarbon injectant (possible in the future) Exhibit II-I7 shows water analyses in the area that represent the range of water that could be injected into the Raven Reservoir. Water compatibility problems are not expected because of the successful history of both sea water and produced water injection into the Prudhoe Bay Reservoir. No clay swelling problems have been seen in the Ivishak in the IP A with either source water injection or produced water injection. When present, scaling in the Ivishak in the IP A has been limited to calcium carbonate deposition, which has been eliminated with acid treatments and controlled with the use of inhibitors. Minimal problems with formation plugging or clay swelling due to fluid incompatibilities are anticipated. Implementing EOR at Niakuk / Raven using miscible hydrocarbon gas injection is economically challenged. Currently there is no gas injection line to the Niakuk pads. The possibility of implementing EOR in Niakuk reservoirs will be re- evaluated in the future. · 18/33 Raven Oil Pool Rules & Area .ion February,2006 ~ · Injection Interval Over the field life, water may be injected into all intervals of the Raven Pool (Sag River through Ivishak). Initially, water injection will be limited to a single Ivishak zone in the NK-65A well. The NK-65A well will inject into a 71' (TVDSS) thick zone of the lower Ivishak, located below the 2A2 Shale and above the Kavik shale (Exhibit 1-2). This interval includes Zone 1 (32' thick) and Zone 2Al (39' thick) sands of the Ivishak. Zone 1 is expected to have a permeability of - 70 md and the Zone 2Al Sands are expected to be -250md, based on core measurements from NK-04. Eventually, there may be injection into other stratigraphic zones of the Raven Pool, in this and other wells. Fluid Confinement The Raven reservoirs lie between two major shales (Kavik and Kingak) which will effectively confine injected fluids. The Kavik Shale is 188' thick in the nearby NK-04 well and forms the lower confining zone, below the lower Ivishak. The Kingak Shale overlies the Sag River formation and forms the upper confining zone. It is 320' thick in the NK-65A wellbore. Both shales are ubiquitous in the Raven area and exist in all surrounding wells that drilled deep enough to encounter these stratigraphic intervals. The confining shales and the reservoir intervals are not truncated by unconformities in the field area. The Kingak Shale sequence tends to behave as a plastic medium and can be expected to contain significantly higher pressures than sandstones of the Ivishak Formation. Data from offset fields in the Kingak shale formation demonstrated 1eakoff at a gradient of approximately 0.85 psi/ft, while Ivishak sandstone has been seen to fracture with an average gradient of .66 psi/ft based on a large number of IP A fraced wells. The Kavik has similar characteristics as the Kingak. Therefore, any fracturing would be contained within confining strata. Injection in the Ivishak above fracture parting pressure may be necessary to allow for additional recovery of oil. In no instance would such injection pressures breach the integrity of the confining zone. · · The maximum injection rate of 15,000 bwpd will also be the initial target rate. This is being done in order to make up voidage from production prior to the initiation of water injection. The injection rate is expected to decline to approximately 6,000 bwpd. During 19/33 Raven Oil Pool Rules & Area .on February,2006 ~ · the injection period, the maximum injection pressure will be 2,500 psi. The NK-65A wellhead injection pressure will be determined by the Niakuk Oil Pool requirements, but the average wellhead injection pressure is expected to be about 1,500 psi. Surface injection pressures of 1500 psi would yield less than the average expected Ivishak parting pressure of .66 psi/ft. Fresh Water There are no freshwater strata in the area of issue. Therefore, even if a fracture were propagated through all confining strata, injection or formation fluid would not come in contact with freshwater strata. The lack of fresh water and underground sources of drinking water in the Niakuk Injection Area eliminates the need for an aquifer exemption. III. Facilities · The Raven Reservoir will be developed from the Niakuk Heald Point DS Pad and will use existing production and injection facilities within the Prudhoe Bay field. Supply water for the waterftood operation will be obtained from the existing 10" seawater supply. Estimates indicate the line is sufficient to deliver water to the Raven injection wells at 2175 psi. Modifications to the LPC were previously completed to increase the available water for injection within the Greater Point McIntyre Area. These modifications resulted in changing Niakuk water injection entirely to seawater. The Niakuk waterflood initially utilized produced water prior to May, 2004. Conversion to use only seawater for injection was completed in September, 2004. For example, the NK-65A is currently injecting approximately 15,000 BWIPD to support the offset NK-38A producer. · Niakuk gas-lift gas is supplied by the Lisburne high-pressure gas injection system at Lisburne L5 drill site. A 6" high-pressure gas pipeline moves artificial-lift gas from the L5 drill site to the Heald Point drill site. No gas lift is currently being utilized for the Raven development production well. However, pad supply gas lift may be utilized in the future to provide artificial lift to Raven production wells. 20/3 3 Raven Oil Pool Rules & Area .on February,2006 ~ · Niakuk shares infrastructure with the LP A and IP A to minimize duplication of facilities. No additional pads, facilities or roads will be required for the Raven development. Existing facilities include the co-user camp facilities, potable water and waste disposal facilities, shop and maintenance facilities, certain roads and bridges, airstrip, construction pad, storage and warehouse space, fire fighting equipment, medical facilities, oily waste disposal facilities, living quarters, and telecommunications systems. IV. Well Operations Existing Wells Two wells are currently completed in the Raven Reservoir (NK-38A and NK-65A) and are described in Sections I & II. · Drilling and Well Design Well Design and Completions All Raven sandstone wells will be designed to the same specifications as current Prudhoe Oil Pool well designs. · Injectors may be pre-produced prior to converting to permanent injection. Production from these wells could improve their injectivity and be used to evaluate reservoir productivity, connectivity and pressure response, enabling refinement of current reservoir models and depletion plans. Surface Safety Valves Surface safety valves (SSV) will be included in the wellhead equipment for Raven wells. Testing of SSVs will be in accordance with AOGCC requirements. Subsurface Safety Valves In light of developments in oil field technology, controls and experience in operating in the arctic environment, the Commission has eliminated SSSV requirements from pool rules for the Prudhoe Oil Pool (Conservation Order 363). If gas or miscible injectant (MI) injectors are drilled, subsurface safety valves (SSSV) will be installed on those wells. All well completions will be equipped with a nipple profile at a depth just below 21/33 Raven Oil Pool Rules & Area lion February,2006 . · the base permafrost, should the need arise to install a downhole flow control device or pressure operated safety valves for future MI service or during maintenance operations. Drilling Fluids Drilling fluids will be similar to current fluids used in the Prudhoe Oil Pool. Stimulation Methods Stimulation may be used to enhance production or injection capability for Raven wells. Fracture stimulation, acid, perforating or other forms of stimulation may be performed as needed in the future. Reservoir Surveillance Program Reservoir surveillance data will be collected as needed to monitor reservoir performance. Recently, static bottom hole pressures where obtained on the NK-38A and the NK-65A. Well testing will be performed twice per month on each producer and allocated accordingly. · · 22/33 Raven Oil Pool Rules & Area .on February,2006 4IIIt · V. Area Injection Operations All injection operations will comply with the current injection operation requirements stated in the Prudhoe Bay Area Injection Order No. 4C. VI. Proposed Raven Pool Rules BP Exploration (Alaska) Inc., in its capacity as Raven P A Operator and Unit Operator, respectfully requests that the Commission adopt the following Pool Rules for the Raven Oil Pool: Pool Name, Definition and Classification The field is the Niakuk Field and the pool is the Raven Oil Pool. The Raven Pool is classified as an Oil Pool. The Raven Oil Pool is defined as the accumulation of hydrocarbons common to and correlating with the interval between log measured depths 13,700 to 14,135 md in the · NK-65A well. Affected Area (Umiat Meridian): Township Lease Range TI2N-RI5E T 12N, R16E ADL 034625 ADL 034630 ADL 034630 ADL 034630 ADL 034635 ADL 034635 ADL 034635 Rule 1: Well Spacing Sections 24: S/2S/2SW4, S2SW4SE4 25:E2,E2W2,~4NW4 26: NE4NE4 36: N2NE4NE4 29: S2NW 4, N2SW 4 30: W2, S2NE4, ~4NE4, N2SE4, SW4SE4,N2SE4SE4 31: NW4~4NW4 To allow for close proximity of wells in separate fault blocks, spacing within the pool · will be a minimum of 20 acres. The Raven Oil Pool shall not be opened in any well 23/33 Raven Oil Pool Rules & Area lion February,2006 ~ · closer than 500 feet to an external boundary where ownership changes. Rule 2: Casing and Cementing Practices (a) In addition to the requirements of 20 AAC 25.030, the conductor casing must be set at least 75 feet below the surface. (b) In addition to the requirements of 20 AAC 25.030, the surface casing must be set at least 500' TVD below the base of the permafrost. Rule 3: Automatic Shut-in Equipment (a) All wells must be equipped with a fail-safe automatic surface safety valve system capable of detecting and preventing an uncontrolled flow. (b) All wells must be equipped with landing nipple at a depth below permafrost, which is suitable for the future installation of a downhole flow control device. · (c) Operation and performance tests must be conducted at intervals and times as prescribed by the Commission to confirm that the safety valve systems and associated equipment are in proper working condition. Rule 4: Common Production Facilities and Surface Commingling (a) Production from the Raven Pool may be commingled with production from other oil pools located in the Prudhoe Bay Unit in surface facilities prior to custody transfer. (b) Production allocation is to be performed in accordance with the Prudhoe Bay Unit Western Operating Metering Plan, described in the letter dated April 23, 2002, subject to ongoing review. All Raven wells must use the LPC well allocation factor for oil, gas and water. (c) All wells must be tested a minimum of twice per month. All new Raven wells must be tested a minimum of two times per month during the first three months of production. The Commission may require more frequent or longer tests if the allocation quality deteriorates. · 24/33 Raven Oil Pool Rules & Area lion February,2006 ~ · (d) The operator shall submit a monthly report and file(s) containing daily allocation data and daily test data for agency surveillance and evaluation. Rule 5: Reservoir Pressure Monitoring (a) Prior to regular production or injection, an initial pressure survey must be taken in each well. (b) A minimum of one pressure survey will be taken annually in each of the Raven reservoir compartments where Raven production wells exist. (c) The reservoir pressure datum will be 9,850' feet true vertical depth subsea. (d) Pressure surveys may consist of stabilized static pressure measurements (bottom-hole or extrapolated from surface), pressure fall-off tests, pressure build-up tests, multi- rate tests, drill stem tests, and open-hole formation tests. (e) Data and results from pressure surveys shall be submitted with the annual reservoir surveillance report. All data necessary for analysis of each survey need not be submitted with the report but must be available to the Commission upon request. · (t) Results and data from special reservoir pressure monitoring tests shall also be submitted in accordance with part (e) of this rule. Rule 6: Gas-Oil Ratio Exemption Wells producing under secondary depletion from the Raven Pool are exempt from the gas-oil ratio limits of 20 AAC 25.240(a) so long as requirements of 20 AAC 25.240(b) are met. Rule 7: Pressure Maintenance Project Average reservoir pressure will be maintained and/or adjusted to maximize ultimate recovery. · Rule 8: Multiple Completion of Water Injection Wells (a) Water injecting wells into the Raven Pool may be completed to allow for simultaneous injection in the Raven Pool and other pools, so long as there is mechanical isolation between pools. 25/33 Raven Oil Pool Rules & Area I.on February, 2006 . · (b) Prior to initiation of commingled injection, the Commission must approve methods for allocation of injection to the separate pools. (c) Results of logs or surveys used for determining the allocation of water injection must be supplied in the yearly reservoir surveillance report. (d) An approved injection order is required prior to commencement of injection in each pool through a common wellbore. Rule 9: Reservoir Surveillance Report An annual reservoir surveillance report for the prior calendar year must be filed by June 15th. The report must include future development plans, reservoir depletion plans, and surveillance information for the prior calendar year, including: (a) Voidage balance by month of produced fluids and injected fluids and cumulative status for each producing interval. · (b) Reservoir pressure map at datum, summary and analysis of reservoir pressure surveys within the pool. (c) Results and, where appropriate, analysis of production and injection log surveys, tracer surveys, observation well surveys, and any other special monitoring. (d) Review of pool production allocation factors and issues over the prior year. (e) Progress of enhanced recovery project implementation and reservoir management summary including results of reservoir simulation techniques. Rule 10: Operation of Development Wells with Pressure Communication or Leakage in any Casing, Tubing, or Packer (a) The operator shall conduct and document a pressure test of tubulars and completion equipment in each development well at the time of installation or replacement that is sufficient to demonstrate that planned well operations will not result in failure of well integrity, uncontrolled release of fluid or pressure, or threat to human safety. · 26/33 Raven Oil Pool Rules & Area .on February,2006 4IIIÞ · (b) The operator shall monitor each development well daily to check for sustained pressure, except if prevented by extreme weather conditions, emergency situations, or similar unavoidable circumstances. Monitoring results shall be made available for AOGCC inspection. (c) The operator shall notify the AOGCC within three working days after the operator identifies a well as having (a) sustained inner annulus pressure that exceeds 2500 psig for all Raven Pool development wells, or (b) sustained outer annulus pressure that exceeds 1000 psig. · (d) The AOGCC may reqUIre the operator to submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action or increased surveillance for any development well having sustained pressure that exceeds a limit set out in paragraph (c) of this rule. The AOGCC may approve the operator's proposal or may require other corrective action or surveillance. The AOGCC may require that corrective action be verified by mechanical integrity testing or other AOGCC approved diagnostic tests. The operator shall give AOGCC sufficient notice of the testing schedule to allow AOGCC to witness the tests. (e) If the operator identifies sustained pressure in the inner annulus of a development well that exceeds 45% of the burst pressure rating of the well's production casing for inner annulus pressure, or sustained pressure in the outer annulus that exceeds 45% of the burst pressure rating of the well's surface casing for outer annulus pressure, the operator shall notify the AOGCC within three working days and take corrective action. Unless well conditions require the operator to take emergency corrective action before AOGCC approval can be obtained, the operator shall submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action. The AOGCC may approve the operator's proposal or may require other corrective action. The AOGCC may also require that corrective action be verified by mechanical integrity testing or other AOGCC approved diagnostic tests. The operator shall give AOGCC sufficient notice of the testing schedule to allow AOGCC to witness the tests. · (f) Before a shut-in well is placed in service, any annulus pressure must be relieved to a 27/33 Raven Oil Pool Rules & Area lion February,2006 4IIIÞ · sufficient degree (a) that the inner annulus pressure at operating temperature will be below 2500 psig for all Raven Pool development wells, and (b) that the outer annulus pressure at operating temperature will be below 1000 psig. (g) For purposes of these rules, "inner annulus" means the space in a well between tubing and production casing; "outer annulus" means the space in a well between production casing and surface casing; "sustained pressure" means pressure that (a) is measurable at the casing head of an annulus, (b) is not caused solely by temperature fluctuations, and (c) is not pressure that has been applied intentionally. · Rule 11: Administrative Action Unless notice and public hearing IS otherwise required, the Commission may administratively waive the requirements of any rule stated above or administratively amend any rule 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 fresh water. · 28/33 Raven Oil Pool Rules & Area .ion · February,2006 4IIIÞ VII. Proposed Area Injection Order BP Exploration (Alaska) Inc., in its capacity as Raven P A Operator and Prudhoe Bay Unit Operator, respectfully requests the Commission issue an order authorizing the underground injection of Class II fluids for enhanced oil recovery in the Raven Pool and consider the following rules to govern such activity. Affected Area (Umiat Meridian): Township Lease Range TI2N-RI5E T 12N, R16E ADL 034625 ADL 034630 ADL 034630 ADL 034630 ADL 034635 ADL 034635 · ADL 034635 Sections 24: SI2S/2SW4, S2SW4SE4 25:E2,E2W2,NNV4NNV4 26: NE4NE4 36: N2NE4NE4 29:S2NNV4,N2SW4 30: W2, S2NE4, NNV 4NE4, N2SE4, SW4SE4,N2SE4SE4 31: NNV4NNV4NW4 Rule 1: Authorized Injection Strata for Enhanced Recovery Within the affected area, fluids appropriate for enhanced oil recovery may be injected for purposes of pressure maintenance and enhanced recovery into strata that are common to, and correlate with, the interval between log measured depths 13,700 to 14,135 md in the NK-65A well. Rule 2: Fluid Injection Wells The underground injection of fluids must be through a well that has been permitted for drilling as a service well for injection in conformance with 20 AAC 25.005, or through a well approved for conversion to a service well for injection in conformance with 20 AAC · 25.280 and 20 AAC 25.412, or through a well that existed as a service well for injection 29/33 Raven Oil Pool Rules & Area ton February,2006 . · purposes on the effective date of this AIO. The application to drill or convert a well for injection must be accompanied by sufficient infonnation to verify the mechanical condition of wells within one-quarter mile radius. The infonnation must include cementing records, cement quality log or fonnation integrity test records. Rule 3: Authorized Injection Fluids Fluids authorized for injection within the affected area are: (a) Produced water from Raven or Prudhoe Bay Unit production facilities for the purposes of pressure maintenance and enhanced recovery; (b) Tracer survey fluid to monitor reservoir perfonnance; (c) Fluids injected for purposes of stimulation per 20 AAC 25.280(a)(2); (d) Source water from the Seawater Treatment Plant; · (e) Non-hazardous water collected from well house cellars and standing ponds. Rule 4: Injection Pressure Nonnal injection pressures must be maintained slightly below the parting pressure of the Sag. Rule 5: Monitoring the Tubing-Casing Annulus Pressure Variations The tubing-casing annulus pressure and injection rate of each injection well must be checked at least weekly to confinn continued mechanical integrity. Rule 6: Demonstration of Tubing/Casing Annulus Mechanical Integrity A schedule must be developed and coordinated with the Commission that ensures that the tubing-casing annulus for each injection well is pressure tested prior to initiating injection, following well workovers affecting mechanical integrity, and at least once every four years thereafter. · 30/33 Raven Oil Pool Rules & Area ton February,2006 4IIIÞ · Rule 7: Multiple Completion of Water Injection Wells (a) Water injector wells into the Raven Pool may be completed to allow for simultaneous injection in the Raven Pool and other pools so long as mechanical isolation between pools is demonstrated and approved by the Commission. (b) Prior to initiation of commingled injection, the Commission must approve methods for allocation of injection to the separate pools. (c) Results of logs or surveys used for detennining the allocation of water injection between pools, if applicable, must be supplied in the annual reservoir surveillance report. (d) An approved injection order is required prior to commencement of injection in each pool through a common wellbore. · Rule 8: Well Integrity Failure Whenever operating pressure or pressure tests indicate communication or leakage of any casing, tubing or packer within an injection well, the operator must notify the Commission on the first working day following the observation and obtain Commission approval to continue injection. Commission approval of an Application for Sundry Approval (Form 10-403) is required before initiating corrective action. Rule 9: Notification of Improper Class II Injection Injection of fluids other than those listed in Rule 2 without pnor authorization is considered improper Class II injection. Upon discovery of such an event, the operator must immediately notify the Commission, provide details of the operation, and propose actions to prevent recurrence. Additionally, notification requirements of any other state or federal agency remain the operator's responsibility. Rule 10: Administrative Action · Upon proper application, the Commission may administratively waive the requirements of any rule stated above or administratively amend any rule 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 an increased risk of fluid movement into a fresh 31/33 Ra,~ 00 Poot R.'" & Areo ... F.b'"'"Y,""' ~ water source. . . . 32/33 Ra'ffi 0" Foot R"t~ & A~ _"" February,2006 ~ · VIII. List of Exhibits I-I Location Map 1-2 Raven Type Log: NK-65A CONFIDENTIAL 1-3 Top Sag River Depth: AXIS Time Seismic Data 1-4 Top Ivishak Depth: PSDM Seismic Data 1-5 Seismic Comparison: AXIS & PSDM CONFIDENTIAL 1-6 NK-04 Well Data CONFIDENTIAL 1-7 NK-38A Well Log CONFIDENTIAL 1-8 NK-38A Fluids CONFIDENTIAL 1-9 NK-38APBl Well Data CONFIDENTIAL 1-10 Structural Cross Section: NK-38A to NK-43 CONFIDENTIAL 1-11 NK-43 Well Data 1-12 Structural Cross Section: NK-19 to NK-43 CONFIDENTIAL 1-13 NK-05 Well Data 1-14 NK-19A Well Data 1-15 Sag River Hydrocarbon Thickness 1-16 Ivishak Hydrocarbon Thickness 1-17 Seismic Cross-Line 1520: AXIS Data 1-18 Seismic In-Line 1830: AXIS Data · II-I II-2 II-3 II-4 II-5 II-6 II-7 II-8 II-9 II-lO II-11 II-12 II-13 II-14 II-15 II-16 II-17 · Ivishak: Rock Properties from Core Sag River: Rock Properties from Core Ivishak: Gross Oil Thickness CONFIDENTIAL Ivishak: Gross Gas Thickness CONFIDENTIAL Sag River: Gross Oil Thickness CONFIDENTIAL Sag River: Gas Thickness CONFIDENTIAL NK-38A Production Data Raven Reservoir Model: Lower Ivishak Fluid Saturation Raven Reservoir Model: Initial Conditions Cross-Section Lower Ivishak: Static Pressure Data from Recent Wells Raven Reservoir Model: Mid-Life Conditions Cross-Section NK-43 Production Data Ivishak Production Profile from Reservoir Simulation Raven Reservoir Model: Fluid Properties DS Niakuk Pad NK-65A Injector Location Water Analysis of Possible Injection Water 33/33 34 ^ 1 -- -- 2:"'5 33 ,*-25 . 1 6 I l BESLJDP.GR_1 o GAPI 200 ---------------------~ River API Condensate with on geochemistry). Consistent a goe of -9780 in the NK-04 well (Ivishak). with the deeper goe in the 81 well (-9850 TVDss). --------------------- -------------------- Wet - with -9900 TVDss identified in NK-38AP81 u rr1 7J "T1 '1 r c Z ¡;¡ :-i =--~þ-"- ~ <',,,- ~ } L 1 : 'IJ - 13700 - ~ (' J iIt - - 9ROO - -' J - ~--------------,-, ..-----~- -13750 - ~) . t - ~ ""......... "'\..~ " .) // ,..¡¡,( ". ~"i" ... ,,-'" '10- '> 9;;.,r (~ .{~... ~i .., ,I , -~..~ -13850 - ~ l. ? f . 'I" L t.? I , , :-.., . -9/000 -......-... - ------- --9750 - - -9850- - 1 3800 - - - - 9fJ.9G-- - - - - - -9950- -9980.0 - 13900 - rl- o TI (f) Z S; TSAD~ " " clOOOO,O :> I- 10050,0 10100.0 9800.0 4700 9750.0 NK-05 RFT Data psi 4800 4850 4900 4950 5000 4750 Gradient::: ? 9850,0 4778 psi @ 9850 9900.0 Ivishak Offset -245 psi from NK-04 DST Water 9950,0 Ivishak Gradient:: 0,45 10150.0 <> Sag River Ivishak 10200.0 10250,0 I BESLJDP.GR_l o GAPI 200 \J fTl ::u -r¡ '1 r c ~ :::¡ Depth FEET ~ -98eO 0 ¡, ~ 1 - - - - - - - - - - - - .. - - - ~:;Et;- - - - - - - - - - - - - . .....:1 ~ 1-OG - - - ~\-,"'" - - .. <- - ... 't ~ .' ,f )!; , (' } 1'. ,s.: ~ r ~ , .' ------------------~ ----------------- with all other ;.. 9900 .. \ ~'1J" \ ( II,' ;> .:::;- .-T----~=~~Œ~-------- --------- W'''·- ~ ~ ,. -- ì -------------..~~S-, ~~J .., -10050 .. 12300 .. ~) '~ J,,r J ... . ' "ì .. 'I 21 50 .. .. 12200 .. 10000 .. 12250 .. ....._-....-........ 10080.0 .~ I ¡,. Ole ~ ~~ . ",,' ,¡ ..",'" ..; ~'i ~ .~" ,_##'" ~ ------ z ;¡;: -- -TSAD- mI- I SA ------------------~------__:,-__:l 1-3 location NK·04 Ivishak Core Data 1200 1000 800 1> TSAD +SSAD â .s. 600 E æ 400 200 0 10.0 12.0 14.0 16.0 18.0 20.0 22.0 24.0 26.0 28.0 Porosity (%) · TSAD 385 D · TSAD 20.5 par ·8 140 mD . 20.8 I\IK-05 Sag River Core Data 60 50 40 i5' e E 30 æ . 20 10 5 mD cutoff o 10.0 12.0 14.0 16.0 18.0 20.0 22.0 Porosity ('Yo) . . 24.0 26.0 28.0 . . ·5 for net · 55 · .9 for net 3000 12000 2500 oil 10000 GOR 2000 8000 - .Q !: ..... Ib 0 ;;;;:, += () () 1500 6000 Ib ~ - "C e a:: Q. 0 "C ~ 'S :¡:: 1000 4000 500 o 3/1/05 4/1/05 5/1/05 6/1/05 7/1/05 8/1/05 9/1/05 2000 o 10/1/05 · '\11>5..- East I Raven Ivishak Pressure at Model Datum of -9900 ft TVDss 5100 5000 4900 m 4800 '¡¡¡ Q. I!!' 4700 ::¡ tI) tI) 2! Q.. 4600 E .a ~ 4500 4400 4300 4200 i-Mar . 4995 ----~-----_..__.__..~--_.~.__._- 31-Mar i-May i-Jun i-Jul 2005 38A .65A 4320 . 1-Aug i-Sep . , . ... .. ! 111ft 111 "IIi!" t 20000 o of Production NK- . 1 2 N Nr\ 4 - 8 . ft, ~~''I!! ~Will~rMîlIy$¡¡¡ o f'~m 1.1 HIlil<1iiK PrOl1lOOllld WPiI' Mal¡'iia 1.5 O.J:j tI:!) u MgI!. . . . . . Attachment 2: Raven AIO Application Index to CD-ROM Digital Well Data Disk 1 Non-Confidential Data Well logs, surveys and formation top data for the following wells: N K-O 1 NK-04 NK-05 NK-19 NK-19A Disk 2 Confidential Data Well logs, surveys and formation top data for the following wells: NK-38APB1 NK-38A NK-65A