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Home My WebLink AboutCO 228 A• • INDEX CONSERVATION ORDER NO. 228A McArthur River Field McArthur River Middle Kenai Gas Pool McArthur River Middle Kenai "G" Oil Pool McArthur River Hemlock Oil Pool McArthur River West Foreland Oil Pool 1. March 13, 2013 Hilcorp Alaska, LLC's (HAK) proposed rules for the McArthur River Field 2.-------------------- Background information 3. April 10, 2013 Notice of Public Hearing, Affidavit of Publication, email distribution and mailing lists 4. April 8, 2013 Email from HAK to AOGCC regarding Correction to Letter Dated March 13, 2013 — McArthur River Field 5. May 21, 2013 Emails between AOGCC and HAK regarding request for additional information to justify HAK's request to expand the McArthur River Field 6. June 24, 2013 Attorney -client email held in secure storage INDEX CONSERVATION ORDER NO. 228A McArthur River Field McArthur River Middle Kenai Gas Pool McArthur River Middle Kenai "G" Oil Pool McArthur River Hemlock Oil Pool McArthur River West Foreland Oil Pool • STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7t" Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC. to revise well spacing requirements of and expand the boundary of, the McArthur River Field. Docket CO- 13-02 Conservation Order No. 228A McArthur River Field McArthur River Middle Kenai Gas Pool McArthur River Middle Kenai "G" Oil Pool McArthur River Hemlock Oil Pool McArthur River West Foreland Oil Pool August 20, 2013 IT APPEARING THAT: 1. By letter received March 14, 2013, Hilcorp Alaska, LLC (Hilcorp) requested that the Alaska Oil and Gas Conservation Commission (AOGCC) expand the area affected by Conservation Order No. 80, modify well spacing requirements of that order, and adopt as Rule 8 language that allows the order to be changed administratively. Hilcorp also requested to amend Conservation Order 228 to repeal existing Rule 3 and adopt as Rule 3 language that allows the order to be changed administratively. 2. Hilcorp is the only operator in the affected fields and pools. The State of Alaska, Department of Natural Resources is the only landowner within 3,000 feet of any of the wells at issue. On March 13, 2013, Hilcorp sent notice of the application by mail to the State of Alaska, Department of Natural Resources. 3. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for June 4, 2013. On April 10, 2013, the AOGCC mailed printed copies of the notice of the opportunity for public hearing to all persons on the AOGCC's mailing distribution list, published notice of the opportunity for that hearing on the State of Alaska's Online Public Notice website and on the AOGCC's website, and electronically transmitted the notice to all persons on the AOGCC's email distribution list. On April 21, 2013, the notice was published in the ALASKA JOURNAL OF COMMERCE. 4. No protest to the application or request for hearing was received. 5. The AOGCC vacated the tentatively scheduled public hearing on May 14, 2013. 6. Because Hilcorp provided sufficient information upon which to make an informed decision, the request can be resolved without a hearing. FINDINGS: 1. Operator: Hilcorp is the operator of the McArthur River Field, Trading Bay Unit, located offshore Cook Inlet, Kenai Peninsula Borough, Alaska. 2. Owners and Landowners: The State of Alaska, Department of Natural Resources, Division of Oil and Gas is the sole landowner for the McArthur River Field. Effective January 1, CO 228A S August 20, 2013 Page 2 of 7 2012, Hilcorp acquired all interest in the McArthur River Field previously held by Union Oil Company of California. Effective November 1, 2012, Hilcorp acquired all interest previously held by Pacific Energy Alaska Operating, LLC. With the acquisition of Marathon Alaska Production LLC's interest in the Middle Kenai Gas Pool, effective February 1, 2013, Hilcorp now holds 100 percent of the ownership in all oil and gas production from the McArthur River Field. 3. Pool Identification: Conservation Order No. 80, dated September 30, 1969, defined the multiple pools as follows: a. The McArthur River Hemlock Oil Pool is defined as the accumulation of oil common to and which correlates with the accumulation found in the Union Grayling No. IA well between the depths of 9,372 feet and 9,897 feet. b. The McArthur River Middle Kenai Gas Pool is defined as the accumulation of gas common to and which correlates with the accumulation found in the Union Trading Bay Unit No. G-18 well between the depths of 5,360 feet and 6,010 feet. c. The McArthur River Middle Kenai "G" Oil Pool is defined as the accumulation of oil common to and which correlates with the accumulation found in the Union Oil Company of California Trading Bay Unit State No. G-7 well between the drilled depths of 9,116 feet and 9,695 feet. d. The McArthur River West Foreland oil Pool is defined as the accumulation of oil common to and which correlates with the accumulation found in the Union Oil Company of California Trading Bay Unit State No. G-7 well between the drilled depths of 10,208 feet and 11, 208 feet. Conservation Order No. 228, dated April 17, 1987, redefined the McArthur River Middle Kenai Gas Pool as the accumulation of gas occurring within an interval that is stratigraphically equivalent to the interval in Trading Bay Unit State G-2 between the measured depths of 2,762 feet and 6,515 feet. Conservation Order No. 228.2, dated April 2, 1990, redefined the McArthur River Middle Kenai Gas Pool as the accumulation of gas occurring within an interval that is stratigraphically equivalent to the interval in Trading Bay Unit K-2 between the measured depths of 1,780 feet and 10,128 feet. 4. Exploration and Production History: The McArthur River Field was discovered in 1965. Subsequent delineation and appraisal wells were drilled to establish producible accumulation in the Hemlock conglomerate reservoir, with secondary targets of oil and gas in the Tyonek Formation. In 1967, the King Salmon, Grayling and Dolly Varden Platforms were installed. The Steelhead Platform was installed in 1986/1987. Regular production from the field began in October of 1967 and continues today. Currently, there are 125 oil and gas wells in the McArthur River Field, 79 of which are currently active (producing or injecting) and 46 wells that are shut-in. 5. RegulatoryHistory: To accommodate challenges associated with offshore exploration of the McArthur River Field, the AOGCC issued Conservation Order 24, dated June 28, 1966, granting an exception to the statewide 500 foot governmental quarter section boundary offset provision of former 11 AAC 2061.1 for the location of McArthur River State #1 well. To CO 228A • August 20, 2013 Page 3 of 7 promote subsequent development of the field, the AOGCC has since issued no less than 94 well spacing exception orders. Conservation Order 71, dated March 28, 1969, established definitions for the McArthur River Hemlock Oil Pool and the McArthur River Middle Kenai Gas Pool. Conservation Order 107, dated September 14, 1971, authorized commingling of production from the Hemlock Oil Pool and Middle Kenai "G" Oil Pool in the Trading Bay Unit State Well No. K-10. Conservation Order 228, dated April 17, 1987, repealed and re-enacted Rule 1(b) of Conservation Order No. 80 with a modified definition of the McArthur River Middle Kenai Gas Pool. At the same time, the AOGCC established a ten (10) acre drilling unit for the McArthur River Middle Kenai Gas Pool at the point of penetration of the D-1 sand intervals; and provided that production intervals of the McArthur River Middle Kenai Gas Pool with more than 1000 feet (true vertical) between the bottom and top perforations shall not be in communication within the same wellbore. Rule 3 expressly allows subsequent amendment of Conservation Order 228 by administrative action as long as the operator demonstrates to the Commission's (AOGCC) satisfaction that sound engineering practices are maintained and the amendment will not result in physical waste. Conservation Order 234, dated October 30, 1987, approved commingling of oil production from both the Middle Kenai "G" and West Foreland Oil Pools within the McArthur River Field. Conservation Order 234 was repealed on December 21, 1993 and replaced by Conservation Order 234A. Rule 2 of that order permitted the commingling of production from the Hemlock, Middle Kenai "G" and West Foreland Oil Pools in the McArthur River Field. Conservation Order 284, dated December 23, 1991, approved commingling of produced fluids from the Middle Kenai "G" Oil Pool, West Foreland Oil Pool and an undefined oil pool [Jurassic] below the West Foreland in the wellbore of Trading Bay Unit State M-28. 6. Expansion of McArthur River Field: In 2002, three wells were drilled from the Monopod Platform, targeting production from the McArthur River Hemlock Oil Pool (two production wells A-27RD and A-15RD2, and one injection well) outside of the McArthur River Field. Currently, those wells continue to produce from the McArthur River Hemlock Oil Pool. 7. Application Notification: Hilcorp provided evidence to the AOGCC that the application was sent by mail to all affected landowners—i.e., State of Alaska, Department of Natural Resources, Division of Oil and Gas —on March 13, 2013. CONCLUSIONS: 1. The McArthur River Field is a mature oil and gas field. Revising wellbore spacing provisions for all defined oil and gas pools, and an undefined Oil Pool [Jurassic] below the West Foreland within the McArthur River Field will increase the operator's flexibility in placing and recompleting wells to optimize resource recovery. Revising well spacing provision for these oil and gas pools and undefined oil pool below the West Foreland will not promote waste, jeopardize correlative rights, or result in an increased risk of fluid movement into freshwater. Co 228A August 20, 2013 Page 4 of 7 2. Correlative rights of owners and landowners of offset acreage will be protected by a 500-foot property line set -back requirement that conforms with regulation 20 AAC 25.055(a)(1) for a well drilling to or being recompleted in an oil pool; and correlative rights of owners and landowners of offset acreage will be protected by a 1,500-foot property line set -back requirement that conforms with regulations 20 AAC 25.055(a)(2) for a well drilling to or being recompleted in a gas pool. NOW THEREFORE IT IS ORDERED: The AOGCC approves Hilcorp's March 13, 2013 application for: 1. Amendment of the well spacing provisions of Conservation Order 80 for the McArthur River Middle Kenai Gas Pool, McArthur River Middle Kenai "G" Oil Pool, McArthur River Hemlock Oil Pool, McArthur River West Foreland Oil Pool, and an undefined oil pool [Jurassic] below the West Foreland; 2. Amendment of the well spacing provisions of Conservation Order 228 for the McArthur River Middle Kenai Gas Pool; 3. Expansion of the McArthur River Field and amendment of the legal description of Conservation Orders 80 and 228 for the described area as specified below; and 4. Amendment of the Administrative Approval language for Conservation Orders 80 and 228. Hilcorp may proceed as long as it complies with the terms of the Pooling Agreement for the McArthur River Field, Trading Bay Unit Agreements, applicable Alaska laws, and all other legal requirements. Development of the Middle Kenai Gas Pool, Middle Kenai "G" Oil Pool, Hemlock Oil Pool, West Foreland Oil Pool, and an undefined oil pool [Jurassic] below the West Foreland is subject to the following rules and the statewide requirements under 20 AAC 25 to the extent not superseded by these rules: CO 228A • August 20, 2013 Page 5 of 7 McArthur River Field: Seward Meridian (revised and expanded by this order) Township, Range Description T8N, R13W, S.M. Sections 4 through 8: All Section 9: W 1 /2, NE 1 /4 Section 16: WI/2 Sections 17 through 20: All Section 29: NW1/4 Section 30: NE1/4 T8N, R14W, S.M. Section 1: All Section 12: E1/2, NW1/4 T9N, R13W, S.M. Section 8: NE1/4SE1/4, S1/2SE1/4 Section 9: S1/2 Section 10: SW1/4NE1/4, SE1/4NW1/4, SW1/4, W1/2SE1/4 Section 14 SW1/4 Sections 15 through 17 All Section 18 S 1 /2 Section 19 through 22 All Section 23 WI/2 Section 26 WI/2 Sections 27 through 34 All Section 35 NW1/4 T9N, R14W, S.M. Section 24 El/2 Section 25 E1/2 Section 36 NE1/4 Conservation Orders 80 and 228 are hereby superseded by this order and their administrative records incorporated by reference into this order. All other conservation orders affecting the McArthur River Field and the referenced pools in the McArthur River Field shall remain in full force and effect, except as modified hereby. Rule 1 Definition of Pools The field is the McArthur River Field. a. The McArthur River Hemlock Oil Pool is defined as the accumulation of oil common to and which correlates with the accumulation found in the Union Grayling No. IA well between the measured depths of 9,372 feet and 9,897 feet. b. The McArthur River Middle Kenai Gas Pool is defined as the accumulation of gas occurring within an interval that is stratigraphically equivalent to the interval in Trading Bay Unit K-2 well between the measured depths of 1,780 feet and 10,128 feet. CO 228A • August 20, 2013 Page 6 of 7 c. The McArthur River Middle Kenai "G" Oil Pool is defined as the accumulation of oil common to and which correlates with the accumulation found in the Union Oil Company of California Trading Bay Unit State No. G-7 well between the measured depths of 9,116 feet and 9,695 feet. d. The McArthur River West Foreland Oil Pool is defined as the accumulation found in the Union Oil Company of California Trading Bay Unit State No. G-7 well between the measured depths of 10,208 feet and 11,208 feet. Rule 2 Casing and Cementing Requirements (revised this order) a. Surface casing shall be landed at not less than 2,000 feet and cement shall be circulated to the sea floor. b. Production casing shall be landed through the completion zone and cement shall cover and extend to at least 500 feet above each potentially productive sand interval. The use of multi -stage cementing procedures shall be permitted. Alternatively, a casing string shall be adequately cemented at an intermediate point and a liner landed through the completion zone. Cement must cover all potentially productive intervals behind the liner and liner lap must be made pressure competent. Rule 3 Bottom Hole Pressure Surveys A key well bottom hole pressure survey shall be made in the McArthur River Hemlock Oil Pool, the McArthur River Middle Kenai Gas Pool, the McArthur River Middle Kenai "G" Oil Pool and the McArthur River West Foreland Oil Pool upon the AOGCC's request; provided, however, such surveys shall not be required more often than twice in any calendar year. The time and length of surveys, number and locations of wells, datum and other details will be determined by the AOGCC upon consultation with the operators. Rule 4 Pressure Maintenance Proiect The injection of water for the purpose of pressure maintenance, secondary recovery or of conducting injectivity tests is hereby permitted in the McArthur River Hemlock Oil Pool. A semiannual progress report detailing project operations and results shall be submitted to the AOGCC in January and July of each year. Rule 5 Administrative Approval Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the AOGCC may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. Rule 6 Well Spacing There shall be no well spacing restrictions within the McArthur River Field except that no oil well shall be completed within 500 feet of the external property line of the McArthur River Field described above and no gas well shall be completed within 1,500 feet of the external property line of the McArthur River Field described above, unless the owner and the landowner are the same on both sides of the line. CO 228A August 20, 2013 Page 7 of 7 DONE at Anchorage, Alaska and dat Daniel T. Seamount, Jr. Commissioner RECONSIDERATION AND APPEAL 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), "[tlhe 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: Wednesday, August 21, 2013 7:54 AM To: '(michael j.nelson@conocophillips.com)'; 'AKDCWellIntegrityCoordinator'; 'Alexander Bridge'; 'Andrew VanderJack'; 'Anna Raff'; 'Barbara F Fullmer'; 'bbritch'; 'Becky Bohrer'; 'Bill Penrose'; 'Bill Walker'; 'Brian Havelock'; 'caunderwood'; 'Cliff Posey'; 'Colleen Miller'; 'Crandall, Krissell'; 'D Lawrence'; 'Dave Harbour'; 'Dave Matthews'; 'David Boelens'; 'David Duffy'; 'David Goade'; 'David House'; 'David Scott'; 'David Steingreaber'; 'Davide Simeone'; 'ddonkel@cfl.rr.com'; 'Donna Ambruz'; Dowdy, Alicia G (DNR); 'Dudley Platt'; 'Elowe, Kristin'; 'Francis S. Sommer'; 'Frank Molli'; 'Gary Laughlin'; 'Gary Schultz (gary.schultz@alaska.gov)'; 'ghammons'; 'Gordon Pospisil'; 'Gorney, David L.; 'Greg Duggin'; 'Gregg Nady'; 'Gregory Geddes'; 'gspfoff'; 'Jacki Rose'; 'Jdarlington oarlington@gmail.com)'; 'Jeanne McPherren'; 'Jeffery B. Jones Oeffjones@alaska.gov)'; 'Jerry McCutcheon'; 'Jim White'; 'Jim Winegarner'; 'Joe Lastufka'; 'Joe Nicks'; 'John Burdick'; 'John Easton'; 'John Evans'; 'John Garing'; 'Jon Goltz'; Jones, Jeffrey L (GOV); 'Juanita Lovett'; 'Judy Stanek'; 'Julie Houle'; 'Julie Little'; 'Karl Moriarty'; 'Kaynell Zeman'; 'Keith Wiles'; 'Kelly Sperback'; 'Klippmann'; 'Laura Silliphant (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 (michael.wjacobs@p66.com)'; 'Mike Bill'; 'Mike Mason'; 'Mikel Schultz'; 'Mindy Lewis'; 'MJ Loveland'; 'mjnelson'; 'mkm7200'; 'nelson'; 'Nick W. Glover'; 'Nikki Martin'; 'NSK Problem Well Supv'; 'Patty Alfaro'; 'Paul Decker (paul.decker@alaska.gov)'; 'Paul Mazzolini'; Pike, Kevin W (DNR); 'Pioneer'; 'Randall Kanady'; 'Randy L. Skillern'; 'Randy Redmond'; 'Rena Delbridge'; 'Renan Yanish'; 'Robert Brelsford'; 'Robert Campbell'; 'Ryan Tunseth'; 'Sara Leverette'; 'Scott Griffith'; 'Shannon Donnelly'; 'Sharmaine Copeland'; 'Sharon Yarawsky'; Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); Smith, Kyle S (DNR); 'Sondra Stewman'; 'Stephanie Klemmer'; 'Steve Moothart (steve.moothart@alaska.gov)'; 'Steven R. Rossberg'; 'Suzanne Gibson'; 'Tamers Sheffield'; 'Tania Ramos'; 'Ted Kramer'; 'Temple Davidson'; 'Terence Dalton'; 'Teresa Imm'; 'Thor Cutler'; 'Tim Mayers'; 'Tina Grovier'; 'Todd Durkee'; 'Tony Hopfinger'; 'trmjrl'; 'Vicki Irwin'; 'Walter Featherly'; 'Yereth Rosen'; 'Aaron Gluzman'; 'Aaron Sorrell'; 'Amanda Dial'; 'Bruce Williams'; Bruno, Jeff J (DNR); 'Casey Sullivan'; 'David Lenig'; 'David Ross'; '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'; 'Jim Magill'; 'Joe Longo'; 'Jolie Pollet'; King, Kathleen J (DNR); 'Laney Vasquez'; 'Lois Epstein'; 'Louisiana Cutler'; 'Marc Kuck'; 'Marie Steele'; 'Matt Gill'; 'Matthew Armstrong'; 'Michael Quick'; 'Patricia Bettis'; Perrin, Don J (DNR); 'Peter Contreras'; Pexton, Scott R (DNR); Pollard, Susan R (LAW); 'Richard Garrard'; 'Ryan Daniel'; 'Sandra Lemke'; 'Talib Syed'; 'Terence Dalton'; 'Tim Flynn'; 'Wayne Wooster'; 'Wendy Wollf'; 'William Hutto'; 'William Van Dyke'; Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); 'Brooks, Phoebe L (DOA) (phoebe.brooks@alaska.gov)'; 'Colombie, Jody J (DOA) oody.colombie@alaska.gov)'; 'Crisp, John H (DOA) oohn.crisp@alaska.gov)'; 'Davies, Stephen F (DOA) (steve.davies@alaska.gov)'; Ferguson, Victoria L (DOA); Fisher, Samantha J (DOA); 'Foerster, Catherine P (DOA) (cathy.foerster@alaska.gov)'; 'Grimaldi, Louis R (DOA) (lou.grimaid i@alaska.gov)'; Hunt, Jennifer L (DOA); 'Johnson, Elaine M (DOA) (elaine Johnson@alaska.gov)'; 'Laasch, Linda K (DOA) (linda.laasch@alaska.gov)'; Mumm, Joseph (DOA sponsored); 'Noble, Robert C (DOA) (bob.noble@alaska.gov)'; 'Norman, John K (DOA) oohn.norman@alaska.gov)'; 'Okland, Howard D (DOA) (howard.okland@alaska.gov)'; 'Paladijczuk, Tracie L (DOA) (tracie.paladijczuk@alaska.gov)'; 'Pasqual, Maria (DOA) (maria.pasqual@alaska.gov)'; To: 'Re g, James B (DOA) 0im.regg@alaska.gov)'; 'R0y, 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)'; Singh, Angela K (DOA); Turkington, Jeff A (DOA); Wallace, Chris D (DOA) Subject: co228a McArthur River Field Attachments: co228a Samantha Fisher Executive Secretary II Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 (907) 793-1223 (phone) (907) 276-7542 (fax) Easy Peel® Labels i ♦ ® Bend along line to AVERYO 5960TM Use AveryO Template 51600 �' eed Paper ® expose Pop-up Edge TM Judy Stanek Landman Hilcorp Alaska, LLC Post Office Box 244027 Anchorage, AK 99524-4027 Eticluettes faciles a peter ^ ; A Repliez a la hachure afin de ; www.avery.com t_ _._1-_..:a wvrnv`I cw Ln� i Sens de 1 , 1 1 1 - Mc 'i_RnIL(.f)-ANIFRV Easy Peel@ Labels i A Bend along line to ® ® TM AVERY@ 5960TM Use AveryTemplate 5760 � feed Paper expose Pop-up Edge David McCaleb Penny Vadla IHS Energy Group George Vaught, Jr. 399 W. Riverview Ave. GEPS Post Office Box 13557 Soldotna, AK 99669-7714 5333 Westheimer, Ste. 100 Denver, CO 80201-3557 Houston, TX 77056 Jerry Hodgden Richard Neahring Mark Wedman Hodgden Oil Company NRG Associates Halliburton n President 408 18 St. Post Office Box 1655 6900 Arctic Blvd. Golden, CO 80401-2433 Colorado Springs, CO 80901 Anchorage, AK 99502 Bernie Karl CIRI Baker Oil Tools K&K Recycling Inc. land Department n Post Office Box 58055 Post Office Box 93330 795 E. 94` Ct. Fairbanks, AK 99711 Anchorage, AK 99503 Anchorage, AK 99515-4295 North Slope Borough Planning Department Richard Wagner Gordon Severson Post Office Box 69 Post Office Box 60868 3201 Westmar Cir. Barrow, Office 99723 Fairbanks, AK 99706 Anchorage, AK 99508-4336 Jack Hakkila Darwin Waldsmith James Gibbs Post Office Box 190083 Post Office Box 39309 Post Office Box 1597 Anchorage, AK 99519 Ninilchik, AK 99639 Soldotna, AK 99669 f=tiquettes faciles a peter i A Ftepliez a fa hachure afin de ; www.avery.com Sens de I i+ilica-7 Ic nnhnri+ awr-Pv® i i r.'7rnO .___._____ ___ raublPr IP rahnrri Pnn-pnTM 9_Rno-an-al r-RV #6 Attorney -client email held in secure storage #s 11 • Bettis, Patricia K (DOA) From: Judy Stanek Ustanek@hilcorp.com] Sent: Tuesday, May 21, 2013 10:44 AM To: Bettis, Patricia K (DOA) Cc: Roby, David S (DOA) Subject: RE: McArthur River Field Will do. Can't get to it just now. Judy Judy Stanek, CPL Landman Hilcorp Alaska LLC Ph: 907.777.8341 From: Bettis, Patricia K (DOA)[maiIto: patricia.bettis(&alaska.gov] Sent: Tuesday, May 21, 2013 10:18 AM To: Judy Stanek Cc: Roby, David S (DOA) Subject: McArthur River Field Good morning Judy, By letter dated March 13, 2013, Hilcorp requested to expand the McArthur River Field by an additional 440 acres within lease ADL 18731. In order for the AOGCC to consider the request, please provide geologic and engineering data, including but not limited to structural and net pay maps, reservoir pressure information, to justify the expansion. If you have any questions on the matter, please do not hesitate to call me. Thank you, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at (907) 793-1238 or patricia.bettis@alaska.gov. #4 Bettis, Patricia K (DOA) From: Judy Stanek Ustanek@hilcorp.com] Sent: Monday, April 08, 2013 10:18 AM To: Bettis, Patricia K (DOA) Cc: David Duffy Subject: Correction to letter dated March 13, 2013 -McArthur River Field Patricia, Please correct the wording on Page 3 of the letter sent to the Commision requesting changes to the McArther River Field Rules. Regarding CO 228 Rule 1, 1 incorrectly made reference to oil wells instead of gas wells. Please change the wording of CO 228 Rule 1 to reflect the follow: Rule 1: McArthur River Field Well Spacing There shall be no well spacing restrictions within the McArthur River Field, except that no gas well shall be completed less than 1,500 feet from an exterior property line where the owners and landowners are not the same on both sides of the line. Thanks for your help, Judy Judy Stanek, CPL Landman Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 100 Anchorage, AK 99503 Ph: 907.777.8341 istanek@hilcorp.com #3 CJ • Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket No. CO-13-02. The application of Hilcorp Alaska, LLC (Hilcorp) to amend Conservation Order Nos. 80 and 228, as applicable, for the McArthur River Middle Kenai Gas Pool, McArthur River Middle Kenai "G" Oil Pool, McArthur River Hemlock Oil Pool, and McArthur River West Foreland Oil Pool, Trading Bay Unit, McArthur River Field, Kenai Peninsula Borough, Alaska as follows: 1. Remove intra-pool well spacing requirements; 2. Amend Conservation Order No. 80 to adopt proposed Administrative Approval language as Rule 8; 3. Amend Conservation Order 228 to repeal existing Rule 3 and to adopt proposed Administrative language as Rule 3; and 4. Expand the McArthur River Field. Hilcorp, by application received March 14, 2013, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order that there shall be no restriction as to well spacing except that no oil well shall be completed less than 500 feet from an exterior property line where the owners and landowners are not the same on both sides of the line; and that no gas well shall be completed less than 1500 feet from an exterior property line where the owners and landowners are not the same on both sides of the line. Hilcorp also requests AOGCC to amend Conservation Order No. 80 by adopting the following language as Rule 8, and to amend Conservation Order 228 by repealing existing Rule 3, and adopting the following language as Rule 3: "Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geosciences principles, and will not result in an increased risk of fluid movement into freshwater." Finally, Hilcorp seeks approval to expand the McArthur River Field by 440 acres within State of Alaska lease ADL 18731 as further described below: Township 9 North, Range 13 West, Seward Meridian Section 8: NE1/4SE1/4, S1/2SE1/4 Section 10: SWl/4NE1/4, SE1/4NW1/4, SW1/4, W1/2SE1/4. To date, no Conservation Orders have been established governing the spacing of oil wells within the McArthur River Field. As a result, the statewide regulations under 20 AAC 25.055 controls. Conservation Order No. 228, Rule 1 established ten acre drilling units for the McArthur River Middle Kenai Gas Pool at the point of penetration of the D-1 sand interval. Hilcorp anticipates that future drilling will include wells that target un-drained portions of isolated fault blocks or under swept areas that cannot be reached by wells conforming to current spacing restrictions. Removing the intra-well spacing requirements will lessen the administrative burden for both Hilcorp and the AOGCC as development proceeds in this mature field. Hilcorp is not proposing to change the setback distance from any external boundary where ownership or landownership may change. The AOGCC has tentatively scheduled a public hearing on this application for June 4, 2013 at 9:00 a.m. at the Alaska Oil and Gas Conservation Commission, at 333 West 7ch Avenue, Suite 100, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on May 7, 2013. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call 793-1221 after May 9, 2013. In addition, written comments regarding this application may be submitted to the Alaska Oil and Gas Conservation Commission, at 333 West 71h Avenue, Suite 100, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on May 30, 2013, except that, if a hearing is held, comments must be received no later than the conclusion of the June 4, 2013 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at 793-1221, no later than May 28, 2013. Cathy P. oers r Chair, ommissioner STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE ADVERTISING ORDER NO. /� O /7/�G_3_14-039 A -V SEE BOTTOM FOR INVOICE ADDRESS F R ° M AOGCC 333 W 7th Ave, Ste 100 Anchorage, AK 99501 AGENCY CONTACT Jody Colombie DATE OF A.O. April 10, 2013 PHONE —1221 PCN DATES ADVERTISEMENT REQUIRED: ASAP THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. T O Alaska Journal of Commerce 301 Arctic Slope Avenue, Suite 350 Anchorage AK 99518 SPECIAL INSTRUCTIONS: Type of Advertisement SEE ATTACHED SEND INVOICE IN TRIPLICATE TO I AOGCC, 333 W. 7th Ave., Suite 100 Anchorage, AK 99501 PAGE 1 OF 12PAGES TOTAL OF ALL PAGES $ REF TYPE I NUMBER AMOUNT DATE COMMENTS 1 VEN 2 1 ARD 02910 FIN AMOUNT SY CC PGM LC ACCT FY NMR DIST LIO 12 02140100 73451 2 i- REQUISITIONED B 1 wyt��' DIVISION APPROVAL: 02-902 (Rev. 3/94 Publisher/Original Copies: Department Fiscal, Department, Receiving AO. FRM STATE OFALASKA ADVERTISING ORDER SEE BOTTOM FOR INVOICE A NOTICE TO PUBLISHER I ADVERTISING ORDER NO. INVOICE AFFIDAVIT IOFPUST UBLICATE IN RIONICATE SHO\MNG ((PART2OFTHSFORM)TISING ORDER W HATTAC ATTACHED 1 /�OCOPYOFFIEDtAO-02-3-_039 WITH ADVERTISEMENT MUST BE SUBMITTED INVOICE �7 1 T 1' AOGCC R 333 West 7`' Avenue. Suite 100 RECEIVED o Anchorage. AK 99501 M APR 2 3 2013 T Alaska Journal of Commerce O 301 Arctic Slope Avenue, Suite 350 Anchorage AK 99519 United states of America AGENCY CONTACT I DATE OF A.O. PHONE PCN (907) 793 -1221 I DATES ADVERTISEMENT REQUIRED: ASAP THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: AFFIDAVIT OF PUBLICATION State of Alaska ss Third Judicial division. Before me, the undersigned, a notary public this day personally appeared who, being first duly sworn, according to law, says that he/she is the of Circulation Manager of the Alaska Journal of Commerce. Published at Anchorage in said division Third Judicial and state of Alaska and that the advertisement, of which the annexed is a true copy, was published in said publication on the Twenty-first day of ADril. 2013, and thereafter for _ consecutive days, the last publication appearing on the Twenty-first day of April 2013, and that the rate charged thereon is not in excess of the rate charged private in ividuals. Subscrit3ed�nd sworn to before me This 22d day of April 2013, Notary public for state of My commission expires COPIED FROM ORIGINAL FOR SCANNING Notary Public BELINDA CUMMINGS State of Alaska My Commission Expires Jun 14, 2016 REMINDER 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. AT7 Notice of Public Hearing 0 HERE. STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket No. CO-13-02. The appli- cation of Hilcorp Alaska, LLC (Hil corp) to amend Conservation Order Nos. 80 and 228, as applicable, for the McArthur River Middle Kenai Gas Pool, McArthur River Middle Kenai "G" Oil Pool, McArthur River Hemlock Oil Pool, and McArthur River West Foreland Oil Pool, Trading Bay Unit, McArthur River Field, Kenai Peninsula Borough, Alaska as follows: 1. Remove intra-pool well spacing re- quirements; 2. Amend Conservation Order No. 80 to adopt proposed Administrative Ap- proval language as Rule 8; 3. Amend Conservation Order 228 to repeal existing Rule 3 and to adopt proposed Administrative language as Rule 3; and 4. Expand the McArthur River Field. Hilcorp, by application received March 14, 2013, requests the Alaska Oil and Gas Conservation Commis- sion (AOGCC) issue an order that there shall be no restriction as to well spacing except that no oil well shall be completed less than 500 feet from an exterior property line where the owners and landowners are not the same on both sides of the line; and that no' gas well shall be completed less than 1500 feet from an exterior property line where the owners and landowners are not the same on both sides of the line. Hilcorp also requests AOGCC to amend Conservation Order No. 80 by adopting the followinq lanouaae as COPIED FROM ORIGINAL FOR SCANNING amend Conservation Order No. 80 by adopting the following language as Rule 8, and to amend Conservation Order 228 by repealing existing Rule 3, and adopting the following lan guage as Rule 3: "Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geosci ences principles, and will not result in an increased risk of fluid movement into freshwater." Finally, Hilcorp seeks approval to ex- pand the McArthur River Field by 440 acres within State of Alaska lease AOL 18731 as further described below: Township 9 North, Range 13 West, Seward Meridian Section 8: NE1/4SE1/4, S1/2SE1/4 Section 10: SW1/4NE114, SE1/4NW1/4, SW1/4, W1/2SE1/4. To date, no Conservation Orders have been established governing the- spae- ing Of oil wells within the McArthur River Field. As a result, the statewide regulations under 20 AAC 25.055 controls. Conservation Order No. 228, Rule 1 established ten acre drill- ing units for the McArthur River Mid- dle Kenai Gas Pool at the point of penetration of the D-1 sand interval. Hilcorp anticipates that future drilling will include wells that target un-drained portions of isolated fault blocks or under swept areas that can- not be reached by wells conforming to current spacing restrictions. Re- moving the intra-well spacing require- ments will lessen the administrative burden for both Hilcorp and the AOGCC as development proceeds in this mature field. Hilcorp is not pro- posing to change the setback distance from any external boundary where ownership or landownership may change. The AOGCC has tentatively scheduled a public hearing on this application for June 4, 2013 at 9:00 a.m. at the Alaska Oil and Gas Conservation Commission, at 333 West 7th Ave- nue, Suite 100, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on May 7, 2013. If a request for a hearing is not timely filed, the AOGCC may consider the is- suance of an order without a hearing.' To learn. if the AOGQC will hold the hearing, call 793-1221 after May 9, 2013. In addition, written comments regard- ing this application may be submitted to the Alaska Oil and Gas Conserva- tion Commission, at 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on May 30, 2013, except that, if a hearing is held, comments must be received no later than the conclusion of the June 4, 2013 hearing. If, because of a disability, special ac- commodations may be needed to comment or attend the hearing, con- tact the AOGCC's Special Assistant, Jody Colombie, at 793-1221, no later than May 28, 2013. By:/s/Cathy P. Foerster Chair, Commissioner Pub:4/21/2013 Ad#10174080 17-� • Singh, Angela K (DOA) From: Fisher, Samantha J (DOA) Sent: Wednesday, April 10, 2013 2:42 PM To: (michaelj.nelson@conocophillips.com); /o=SOA/ou=First Administrative Group/cn=Recipients/cn=cotaylor; Abbie Jossie; AKDCWellIntegrityCoordinator, alaska@petrocalc.com; Alexander Bridge; Andrew VanderJack; Anna Raff; Barbara F Fullmer; bbritch; bbohrer@ap.org; Bill Penrose; Bill Walker; Bowen Roberts; Brian Havelock; caunderwood@marathonoil.com; Cliff Posey; Crandall, Krissell; D Lawrence; Dave Harbour; Dave Matthews; David Boelens; David Duffy; David House; David Scott; David Steingreaber; Davide Simeone; ddonkel@cfl.rr.com; Donna Ambruz; Dowdy, Alicia G (DNR); Dudley Platt; Elowe, Kristin; Francis S. Sommer; Gary Laughlin; schultz, gary (DNR sponsored); ghammons; Gordon Pospisil; Gorney, David L.; Greg Duggin; Gregg Nady; Gregory Geddes; gspfoff; Jdarlington oarlington@gmail.com); Jeanne McPherren; Jones, Jeffery B (DOA); Jerry McCutcheon; Jim White; Jim Winegarner; Joe Lastufka; news@radiokenai.com; Burdick, John D (DNR); Easton, John R (DNR); John Evans; John Garing; Jon Goltz; Jones, Jeffrey L (GOV); Juanita Lovett; Judy Stanek; Houle, Julie (DNR); Julie Little; Kari Moriarty; Kaynell Zeman; Keith Wiles; Kelly Sperback; Gregersen, Laura S (DNR); Luke Keller; Marc Kovak; Mark Dalton; Mark Hanley (mark.hanley@anadarko.com); Mark P. Worcester; Kremer, Marguerite C (DNR); Michael Jacobs; Mike Bill; mike@kbbi.org; Mike Morgan; Mikel Schultz; Mindy Lewis; MJ Loveland; mjnelson; mkm7200; knelson@petroleumnews.com; Nick W. Glover; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; Randy Redmond; Rena Delbridge; Renan Yanish; Robert Brelsford; Robert Campbell; Ryan Tunseth; Sara Leverette; Scott Cranswick; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer; Moothart, Steve R (DNR); Steven R. Rossberg; Suzanne Gibson; sheffield@aoga.org; Tania Ramos; Ted Kramer; Davidson, Temple (DNR); Teresa Imm; Theresa Williams; Thor Cutler; Tim Mayers; Tina Grovier; Todd Durkee; Tony Hopfinger; trmjrl; Vicki Irwin; Walter Featherly; yjrosen@ak.net; 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; Smith, Graham O (PCO); Greg Mattson; Heusser, Heather A (DNR); James Rodgers; Jason Bergerson; Jennifer Starck; jill.a.mcleod@conocophillips.com; Jim Magill; Joe Longo; Jolie Pollet; King, Kathleen J (DNR); Laney Vasquez; Lara Coates; Lois Epstein; Louisiana Cutler; Marc Kuck; Steele, Marie C (DNR); Matt Gill; Ostrovsky, Larry (DNR sponsored); Bettis, Patricia K (DOA); Perrin, Don J (DNR); Peter Contreras; Pexton, Scott R (DNR); Pollard, Susan R (LAW); Richard Garrard; Ryan Daniel; Sandra Lemke; Talib Syed; Wayne Wooster; Woolf, Wendy C (DNR); William Hutto; William Van Dyke; Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Colombie, Jody J (DOA); Crisp, John H (DOA); Davies, Stephen F (DOA); Ferguson, Victoria L (DOA); Fisher, Samantha J (DOA); Foerster, Catherine P (DOA); Grimaldi, Louis R (DOA); Johnson, Elaine M (DOA); Laasch, Linda K (DOA); McIver, Bren (DOA); McMains, Stephen E (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Norman, John K (DOA); Okland, Howard D (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Turkington, Jeff A (DOA); Wallace, Chris D (DOA) Subject: Notice of Public Hearing Docket No CO-13-02 (Hilcorp) Attachments: Notice of Public Hearing Docket No CO-13-02.pdf • • Samantha Fisher Executive Secretary II Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 (907) 793-1223 (phone) (907) 276-7542 (fax) Easy Peep' Labels iAVEi�Y� 5960TM ; Use Avery®Template 5160® � � � 1J j Judy Stanek Landman Hilcorp Alaska, LLC Post Office Box 244027 Anchorage, AK 99524-4027 Irtiquettes faciles A peter ; A Repliez a la hachure afin de ; www.avery.com ® ® J Sens de reveler le rebord Pop-upTM 1-800-GO-AVERY Utilisez le gabarit AVERY 5160 chBement s I Cass [peel® Labels se Avery 10 emip!a G 51U:6 Penny Vadle 399 W. Riverview Ave. Soldotna, AK 99669-7714 Jerry Hodgden Hodgden Oil Company 408 18"` St. Golden, CO 80401-2433 Bernie Karl K&K Recycling Inc. Post Office Box 58055 Fairbanks, AK 99711 North Slope Borough Planning Department Post Office Box 69 Barrow, AK 99723 Jack Hakkila Post Office Box 190083 Anchorage, AK 99519 - Bend along line to �d PaF�ei - - expose Pop-up !-egs 11 " 1 David McCaleb I1-15 Energy Group GEPS 5333 Westheimer, Ste. 100 Houston, TX 77056 Richard Neahring NRG Associates President P.O. Box 1655 Colorado Springs, CO 80901 CIRI Land Department Post Office Box 93330 Anchorage, AK 99503 Richard Wagner Post Office Box 60868 Fairbanks, AK 99706 Darwin Waldsmith Post Office Box 39309 Ninilchik, AK 99639 George Vaught, Jr. Post Office Box 13557 Denver, CO 80201-3557 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Baker Oil Tools 795 E. 94`h Ct. Anchorage, AK 99515-4295 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 James Gibbs Post Office Box 1597 Soldotna, AK 99669 IE+innofi4ce farilpc a nplr+r ! _ Reoliez & la hachure afin de 'INVIW11V.ave tom #2 1 .f I - � 0 STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS Alaska Oil and Gas Conservation Committee 3001 Porcupine Drive Anchorage, Alaska 99504 Re: THE APPLICATION OF UNION OIL COMPANY OF CALIFORNIA for an order defining additional pools within the area covered by Conservation Order No. 71 and to establish rules to govern the regulation of these pools. IT APPEARING THAT: Conservation Order No. 80 McArthur River Field McArthur River Middle Kenai Gas Pool McArthur River Middle Kenai "G" Oil Pool McArthur River Hemlock Oil Pool McArthur River West Foreland Oil Pool September 30, 1969 1. Union Oil Company of California submitted a petition dated August 22, 1969 requesting the referenced order pursuant to Title 11, Alaska Administrative Code, Section 2004. 2. Notice of the hearing was published in the Anchorage Daily News on September 5, 1969. Notice of the re -scheduling of the hearing was published in the Anchorage Daily News on September 16, 1969. 3. A public hearing was held in the Ben Crawford Memorial Building, Anchorage, Alaska, on September 23, 1969. Testimony was presented in support of the petition. 4. Oil in commercial quantities has been found in the Middle Kenai "G" section and in the West Foreland Formation of the Kenai Group in the McArthur River Field. AND IT FURTHER APPEARING THAT additional pools in the McArthur River Field should be defined, the rules prescribed in Conservation Order No. 71 should apply to the additional pools, and Conservation Order No. 71 consolidated herein. NOW, THEREFORE, IT IS ORDERED THAT the rules hereinafter set forth apply to the following described area: Township 8 North, Ranqe 13 West, Seward Meridian Sections 4 through 8: All Section 9: W 2, NE 4 Section 16: W2 Sections 17 through 20: All Section 29: NW4 Section 30: NE; CONSERVATION ORDER NO. 80 Page 2 September 30, 1969 Township 8 North, Range 14 West, Seward Meridian Section 1: Section 12: All E 2f NWa Township 9 North, Range 13 West, Seward Meridian Section 9: S2 Section 14: SW4 Sections 15 through 17: All Section 18: S2 Sections 19 through 22: All Section 23 : W 2 Section 26: W2 Sections 27 through 34: All Section 35: NW4 Township 9 North, Range 14 West, Seward Meridian Section 24: Ez Section 25: Ez Section 36: NE-14 Rule 1. Definition of Pools. (a) The McArthur River Hemlock Oil Pool is defined as the accumulation of oil common to and which correlates with the accumulation found in the Union Grayling No. lA well between the depths of 9,372 feet and 9,897 feet. (b) The McArthur River Middle Kenai Gas Pool is defined as the accumu- lation of gas common to and which correlates with the accumulation found in the Union Trading Bay Unit No. G-18 well between the depths of 5,360 feet and 6,010 feet., (c) The McArthur River Middle_._Kenai "G" Oil Pool is defined as the accumulation of oil common to and which correlates with the accumu- lation found in the Union Oil Company of California Trading Bay Unit State No. G-7 well between the drilled depths of 9,116 feet and 9,695 feet.' (d) The McArthur River__West Foreland Oil Pool is defined as the accumulation of oil common to and which correlates with the accumu- lation found in the Union Oil Company of California Trading Bay Unit State No. G-7 well between the drilled depths of 10,208 feet and 11, 208 feet. . CONSERVATION ORDER NO. 80 Page 3 September 30, 1969 Rule 2. Casing and Cementing Requirements. (a) Surface casing shall be landed at not less than 2,000 feet and cement shall be circulated to the sea floor. Casing and control equipment shall be hydrostatically tested to not less than 1,000 pounds per square inch pressure before drilling the shoe. (b) Production casing shall be landed through the completion zone and cement shall cover and extend to at least 500 feet above each potentially productive sand interval. The use of multi -stage cementing procedures shall be permitted. Alternatively, a casing string shall be adequately cemented at an intermediate point and a liner landed through the completion zone. If a liner is run, the annular space behind the liner shall be filled with cement to at least 100 feet above the casing shoe or the top of the liner shall be squeezed with sufficient cement to provide at least 100 feet of cement between the liner and casing annulus. Cement must cover all potentially productive intervals behind the liner. Casing and well head equipment shall be hydrostatically tested to not less than 2,000 pounds per square inch pressure. Rule 3. Bottom Hole Pressure Surveys. A key well bottom hole pressure survey shall be made in the McArthur River Hemlock Oil Pool, the McArthur River Middle Kenai Gas Pool, the McArthur River Middle Kenai "G" Oil Pool and the McArthur River West Foreland Oil Pool upon Committee request; provided, however, such surveys shall not be required more often than twice in any calendar year. The time and length of survey, number and locations of wells, datum and other details will be determined by the Committee upon consultation with the operators. Rule 4. Pressure Maintenance Project. The injection of water for the purpose of pressure maintenance, secondary recovery or of conducting injectivity tests is hereby permitted in the McArthur River Hemlock Oil Pool. A semiannual progress report detailing project operations and results shall be submitted to the Committee in January and July of each year. Rule 5. Administrative ADDroval. Upon request of the applicant and a showing that the affected parties have been notified of such request, the Committee may authorize the con- version or drilling of any well at any location, the termination or suspension of the project, or any operation reasonably designed to further the purposes of the project. CONSERVATION ORDER NO. 80 Page 4 September 30, 1969 Rule 6. Other Conservation Orders. Conservation Order No. 71 is hereby revoked. All other conservation orders affecting the referenced pools in the McArthur River Field shall remain in full force and effect, except as modified hereby. DONE at Anchorage, Alaska, and dated September 30, 1969. 4- Thomas R. Marshall, Jr., Ex utive Secretary Alaska Oil and Gas Conservation Committee Concurrence: Homer L. Burrell, Chairman Alaska Oil and Gas Conservation Committee . K. Gilbreth, Jr., er Alaska Oil and Gas Conservation Committee 1 F7 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage, Alaska 99501-3192 Re: THE APPLICATION OF UNION ) OIL COMPANY OF CALIFORNIA ) (Unocal) on behalf of the ) Trading Bay Unit Working ) Interest Owners requesting) amendments to Conservation) Order No. 80 regarding the) McArthur River Middle ) Kenai Gas Pool. ) IT APPEARING THAT: Conservation Order No. 228 McArthur River Field McArthur River Middle Kenai Gas Pool April 17, 1987 1. Unocal, by letter dated February 16, 1987, requested amendments to Conservation Order No. 80 and the estab- lishment of pool rules to facilitate development of the McArthur River Middle Kenai Gas Pool. 2. Notice of public hearing was published in the Anchorage Daily News on March 19, 1987. 3. No protests were filed with the Commission. FINDINGS: 1. The Steelhead Platform has been placed on location, and is being prepared to develop the McArthur River Middle Kenai Gas Pool. 2. The proposed redefined McArthur River Middle Kenai Gas Pool consists of non -marine fluvial sands. The verti- cal limits of the pool may be defined in the Trading Bay Unit State G-2 well. 3. Top of the D-1 sand represents the approximate midpoint of the proposed redefined pool. 4. An empirical relationship between well spacing and ultimate recovery cannot be established due to the large vertical section and lenticular nature of the reservoir. 5. Though not quantifiable, ultimate recovery of gas will be enhanced as well density is increased. 6. A vertical differential pressure of as much as 1860 psi may be expected across the McArthur River Middle Kenai Gas Pool. Conservation Ordeo. 228 1P April 17, 1987 Page 2 7. Gas recovery efficiency may be reduced if low pressure and high pressure intervals are in communication through a wellbore. NOW, THREREFORE, IT IS ORDERED THAT Rule l(b) of Conservation Order No. 80 is repealed and reenacted to read: The McArthur River Middle Kenai Gas Pool is defined as the accumulation of gas occurring within an interval that is stratigraphically equivalent to the interval in Trading Bay Unit State G-2 between the measured depths of 2762 feet and 6515 feet. IT IS FURTHER ORDERED THAT the rules hereinafter set forth for the development and production from the McArthur River Middle Kenai Gas Pool, as defined above, apply to the following area: Township 8 North, Range 13 West, Seward Meridian Sections 4 through 8: All Section 9: W2i NE,', Section 16: Wz Sections 17 through 20: All Section 29: NW4 Section 30: NE4 Township 8 North, Range 14 West, Seward Meridian Section 1: Section 12: All E, NW4 Township 9 North, Range 13 West, Seward Meridian Section 9: S4 Section 14: SW4 Sections 15 through 17: All Section 18: S4 Sections 19 through 22: All Section 23: WZ Section 26: W4 Sections 27 through 34: All Section 35: NW4 Township 9 North, Range 14 West, Seward Meridian Section 24: Ez Section 25: EZ Section 36: NE-, • Conservationco OrdeNo . 228 April 17, 1987 Page 3 Rule 1 Well Spacing Ten (10) acre drilling units are established for the McArthur River Middle Kenai Gas Pool at the point of penetration of the D-1 sand interval. Rule 2 Production Intervals Production intervals of the McArthur River Middle Kenai Gas Pool with more than 1000 feet (true vertical) between the bottom and top perforations shall not be in communication within the same wellbore. Rule 3 Administrative Approval Upon request, the Commission may administratively amend this order as long as the operator demonstrates to the Commission's satisfaction that sound engineering practices are maintained and the amendment will not result in physical waste. DONE at Anchorage, Alaska, and dated April 17, 1987. N C©- Alaska Oil and Gas Conservation Commission Lonnie C. Smit ommissioner Alaska Oil and Gas Conservation Commission k '• , Pl---L W. W. Barnwell, Commissioner Alaska Oil and Gas Conservation Commission #1 • 0 Hilcorp Alaska, LLC March 13, 2013 Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 if Anchorage, Alaska 99501 MAR 14 2013 A OGCC RE: Proposed Rules for the McArthur River Field Dear Commissioner Foerster: Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 100 Anchorage, AK 99503 Phone:907-777-8341 Fax: 907-777-8580 jstanek@hilcorp.com Since 1965, development of the McArthur River Field, has progressed to the point that statewide spacing rules for oil wells, and the special rules for spacing of gas wells, should be superseded with new rules designed to maximize recovery of un-drained hydrocarbon reserves. Hilcorp Alaska, LLC ("Hilcorp"), as Operator, respectfully requests the Commission take action to amend Conservation Order 80 (dated September 30, 1969) through the adoption of the following proposed rules: Rule 7: McArthur River Field Well Spacing There shall be no well spacing restrictions within the McArthur River Field, except that no oil well shall be completed less than 500 feet from an exterior property line where the owners and landowners are not the same on both sides of the line. Rule 8: Administrative Approval Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. Hilcorp Alaska, LLC Proposed Rules re McArthur River Field March 13, 2013 Page 2 of 8 Hilcorp also proposes to adjust the legal description of the McArthur River Field to reflect Hemlock Oil Pool production in the A-27RD and the A-15RD2 wells from the Monopod Platform. Hilcorp requests that the Commission amend Conservation Order 80 as shown on Exhibit A and further described below: Township 8 North, Range 13 West, Seward Meridian Sections 4 through 8: All; Section 9: W1/2, NE1/4; Section 16: W1/2; Sections 17 through 20: All; Section 29: NW1/4; Section 30: NE1/4. Township 8 North, Range 14 West, Seward Meridian Section 1: All; Section 12: E1/2, NW1/4. Township 9 North, Range 13 West, Seward Meridian Section 8: NE1/4SE1/4, S1/2SE1/4, Section 9: S1/2; Section 10: SW1/4NE1/4, SE1/4NW1/4, SW1/4, W1/2SE1/4; Section 14: SW4; Sections 15 through 17: All; Section 16: S1/2; Sections 19 through 22: All; Section 23: W1/2; Section 26: W1/2; Sections 27 through 34: All; Section 35: NW1/4. Township 9 North, Range 14 West, Seward Meridian Section 24: E1/2; Section 25: E1/2; Section 36: NE1/4. Hilcorp Alaska, LLC 0 Proposed Rules re McArthur River Field March 13, 2013 Page 3 of 8 Likewise, Hilcorp respectfully requests the Commission take administrative action to repeal Rule 1 of Conservation Order No. 228 (dated April 17, 1987) in its entirety and replace it with the following proposed rule:' Rule 1: McArthur River Field Well Spacing There shall be no well spacing restrictions within the McArthur River Field, except that no oil well shall be completed less than 500 feet from an exterior property line where the owners and landowners are not the same on both sides of the line. For the purposes of consistency, Hilcorp also requests the Commission take administrative action to repeal Rule 3 of Conservation Order No. 228 in its entirety and replace it with the following proposed rule: Rule 3: Administrative Approval Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. BACKGROUND Oil was discovered in the McArthur River Field in 1965. Subsequent delineation and appraisal wells were drilled to establish producible accumulations in the Hemlock Conglomerate reservoir, with secondary targets of oil and gas in the Tyonek Formation. To accommodate the challenges associated with offshore exploration of this complex geologic area, the Commission recognized that spacing exceptions were required to locate preliminary wells. See, e.g., Conservation Order 24 (June 28, 1966) (granting exception to the statewide 500 foot governmental quarter section boundary offset provision of former 11 AAC 2061.1 for the location of McArthur River State #1 Well). 1 Pursuant to Rule 3 of Conservation Order 228, the Commission has authority to take administrative action to amend the order so long as it is demonstrated that "sound engineering practices are maintained and the amendment will not result in physical waste." Hilcorp Alaska, LLC 0 Proposed Rules re McArthur River Field March 13, 2013 Page 4 of 8 To promote subsequent development of the field, the Commission has since issued no less than 94 well spacing exception orders.Z In 1967, the King Salmon, Grayling and Dolly Varden Platforms were installed and Alaska Department of Natural Resources (DNR) approved the establishment of the Trading Bay Unit (TBU). The unit encompassed approximately 39,573.3 acres within 18 state oil and gas leases. In May 1967, the DNR approved the formation of the initial 80- acre Hemlock Participating Area (PA) to develop oil reserves from the Hemlock Conglomerate. On March 28, 1969, the Commission established definitions for the McArthur River Hemlock Oil Pool and the McArthur River Middle Kenai Gas Pool, plus other field rules applicable to the regulation of such pools, including water injection. See Conservation Order No. 71. As exploration and development continued, the Commission redefined the Hemlock Oil Pool, Middle Kenai Gas Pool, and added new definitions for the Middle Kenai "G" and West Foreland Oil Pools. See Conservation Order No. 80 (September 30, 1969). However, the Commission did not develop any special rules to govern well spacing requirements for defined oil pools. On September 14, 1971, the Commission took its first action to approve commingling of production from the Hemlock Oil Pool and Middle Kenai "G" Oil Pool. See Conservation Order 107 (authorizing commingling of production within the wellbore of Well No. K- 10). As detailed below, commingling proved an important management tool, both on a field -wide and well -specific basis. On March 1, 1972, the Trading Bay Unit boundary contracted to 21,154 acres (matching the then -existing participating area boundaries). On February 13, 1987, the DNR approved the formation of the Grayling Gas Sands PA, for the purposes of developing the Middle Kenai Gas Pool reservoir in the upper portion of the Tyonek Formation. On April 17, 1987, Rule 1(b) of CO 80 was repealed and re-enacted with a modified definition of the Middle Kenai Gas Pool. See Conservation Order No. 228.3 At this same time, the Commission established a ten (10) acre drilling unit for the McArthur Middle Kenai Gas Pool "at the point of penetration of the D-1 sand interval." Id.4 Rule 3 z Exhibit B (AOGCC's summary McArthur River Field Conservation Orders). 3 In relevant part, Rule 1(b) of Conservation Order 80 was revised as follows: "The McArthur River Middle Kenai Gas Pool is defined as the accumulation of gas occurring within an interval that is stratigraphically equivalent to the interval in Trading Bay Unit State G-2 between the measured depths of 2762 feet and 6515 feet." 4 Rule 2 of Conservation Order 228 states: "Ten (10) acre drilling units are established for the McArthur River Middle Kenai Gas Pool at the point of penetration of the D-1 sand interval." Hilcorp Alaska, LLC • Proposed Rules re McArthur River Field March 13, 2013 Page 5 of 8 expressly allows subsequent amendment of Conservation Order 228 by administrative action.5 The Steelhead Platform was completed in 1987 and production of natural gas commenced from the Middle Kenai Gas Pool (aka "Grayling Gas Sands") on September 30, 1988. On October 30, 1987, the Commission approved commingling of oil production from both the Middle Kenai "G" and West Foreland Pools within the McArthur River Field. See Conservation Order No. 234. Prior to 1987, both pools had been produced separately, either from wells with single completions in only one of the pool, or dually with separate tubing strings for each pool. Id. at Finding Nos. 2 and 5. In 1991, the Commission approved comingling of production from the Middle Kenai "G" Oil Pool, West Foreland Oil Pool and "an undefined oil pool below the West Foreland" in the wellbore of Trading Bay Unit ("TBU") Well M-28. See Conservation Order No. 284 (noting that such commingling "...may result in recovery of hydrocarbons which otherwise could not be recovered," and that "[c]ommingling of these pools will not promote waste nor jeopardize correlative rights." On December 21, 1993, the Commission amended Conservation Order 234 to further allow field -wide commingling of production from the Hemlock, Middle Kenai "G" and West Foreland Oil Pools within the MacArthur River Field. See Conservation Order 234A No. 2. On December 24, 1994, the Commission approved the "[c]ommingling of Jurassic production with that from the Middle Kenai "G", Hemlock and West Foreland Oil Pool" in Trading Bay Unit Well M-32.6 In addition to the four platforms within the McArthur River Field, Hilcorp also operates the Monopod Platform, located within the Trading Bay Field. In 2002, Union successfully drilled three projects from the Monopod Platform, targeting production from the McArthur River Field (two production wells, one injection well). On June 25, 2003, the DNR approved Union's application to expand the Trading Bay Unit boundary to include 560 acres of oil and gas lease ADL 18731. Expansion of the unit was accompanied by an expansion of both the Hemlock Oil and Grayling Gas Sands 5 Rule 3 states: "Upon request, the Commission may administratively amend this order as long as the operator demonstrates to the Commission's satisfaction that sound engineering practices are maintained and that the amendment will not result in physical waste." 6 See Conservation Order 350 (noting that "...commingling of produced fluids from the reference pools [... I may result in recovery of otherwise unproducable hydrocarbons," and that "[c]ommingling of these pools will not promote waste.") Hilcorp Alaska, LLC 0 0 Proposed Rules re McArthur River Field March 13, 2013 Page 6 of 8 Participating Areas. As a result of this expansion, the current legal boundary of the McArthur River Field requires modification. Hilcorp became the operator of the Trading Bay Unit on January 1, 2012. Effective November 1, 2012, Hilcorp acquired all interests previously held by Pacific Energy Alaska Operating, LLC ("Pacific"). With the acquisition of Marathon Alaska Production LLC's interest in the Middle Kenai Gas Pool, effective February 1, 2013, Hilcorp now holds one hundred percent (100%) of the working interest in all oil and gas production from the McArthur River Field. There are currently 125 oil and gas wells in the Trading Bay Unit, McArthur River Field, 79 of which are currently active (producing or injecting) and 46 wells that are shut-in and on a schedule to be repaired. See Hilcorp's Monthly Production Report to AOGCC dated November 12, 2012. During the month of October 2012, these wells collectively produced 132,740 barrels of oil and 1,561,716 MCF gas. Id. By comparison, the field produced 257,142 barrels of oil and 131,105 MCF gas during the month of October 2004.7 To date, no Conservation Orders have been established governing the spacing of oil wells within the McArthur River Field. As a result, the statewide regulations are controlling. In relevant part, 20 AAC 25.055(a)(1) provides that no wells may be drilled closer than 500 feet of a property line where ownership or landownership changes, and Subpart (a)(3) limits drilling and completing more than one oil well within any given governmental quarter section or closer than 1,000' to any well drilling to or capable of producing from the same pool. (quotations omitted). Rule 1 of Conservation Order 228 governs well spacing for the McArthur River Middle Kenai Gas Pool. Rule 3 of this same order expressly allows the Commission to amend the applicable 10 acre spacing restriction by administrative action.$ DISCUSSION The [McArthur River] Field has fast reached the point where development cannot continue using the best conservation and engineering practices to See http://doa aIaska gov/ogc/production/ProdArchives/2004/OctO4prod.Pdf (last checked November 27, 2012). 8 Rule 3 states: "Upon request, the Commission may administratively amend this order as long as the operator demonstrates to the Commission's satisfaction that sound engineering practices are maintained and that the amendment will not result in physical waste." Hilcorp Alaska, LLC 0 0 Proposed Rules re McArthur River Field March 13, 2013 Page 7 of 8 maximize the recovery of oil and gas, without the intelligent application of the proposed field rules which we will present today. Excerpt from written testimony submitted to the AOGCC on January 26, 1968 by Theodore F. Stevens, Esq., regarding an Application for An Order Prescribing Field Rules for the Development of the Productive Intervals within the Trading Bay Field, Upper Cook Inlet Alaska. Forty -plus years later, the same concept holds true. Proper application and adjustment of the McArthur River Field's rules will greatly enhance the operational capacity of our development efforts. Hilcorp's proposed rules are designed to prevent waste, protect correlative rights and improve the ultimate recovery of remaining hydrocarbons throughout the McArthur River Field, Trading Bay Unit As discussed above, Hilcorp is the sole working interest owner, and also serves as Operator of the Trading Bay Unit, MacArthur River Field. The State of Alaska is the sole royalty owner, and the lease royalty rate is uniform throughout the entire field. As a result, the proposed rules do not jeopardize any correlative rights. Approval of the proposed rules will significantly reduce the administrative burden of both Hilcorp and the Commission. For example, during 2013, Hilcorp anticipates undertaking the following projects: • one (1) workover on the Monopod Platform (targeting oil production from the Trading Bay Unit); • up to sixteen (16) workovers on the Grayling Platform; • up to three (3) workovers at Dolly Varden Platform; • up to three (3) workovers at King Salmon Platform; • up to two (2) workover at the Steelhead platform plus • One new drill project from the Steelhead platform Going forward, Hilcorp's recompletion, workover and drilling program will be similar in 2014-2016. Within the next few years, Hilcorp estimates that it will undertake up to 60 workovers and 2-6 new drill projects within the McArthur River Field, Trading Bay Unit. Given the trend to commingle production from multiple oil pools, every new well completion (in each applicable pool) would require close evaluation under applicable statewide spacing rules. Likewise, all new gas completions in the Middle Kenai Gas Pool require close evaluation under Conservation Order 228, Rule 1. In the absence of any competing working ownership interests, and the state's uniform royalty rate (12.5%), such case -by -case well spacing scrutiny is no longer necessary to Hilcorp Alaska, LLC 0 0 Proposed Rules re McArthur River Field March 13, 2013 Page 8 of 8 prevent waste or protect correlative rights. The only affected owner is the State of Alaska. In addition to reducing administrative burdens, the proposed order is designed to prevent economic and physical waste and improve the ultimate recovery of remaining hydrocarbons. By eliminating intra-pool spacing rules for both oil and gas, Hilcorp will be able to target smaller, un-drained portions of isolated fault blocks or underswept areas that cannot be reached by wells conforming to current spacing restrictions. Less restrictive spacing requirements will help to maximize recovery from these bypassed pools, while allowing for continued production from established development wells. The purpose of proposed new administrative rules is self-evident. Subparts (a) and (b) will afford both the Commission and Hilcorp the flexibility required to extend this aging field's capacity to produce in a manner that is technically sound, yet administratively efficient. Subpart (c) simply requires Hilcorp to keep the AOGCC timely informed of administrative changes to the Trading Bay Unit Boundary. If you require additional information regarding this request, please contact the undersigned at 777-8341. REQUEST 1. That the Commission amend Conservation Order 80 by the adoption of proposed Rules Nos. 7 and 8, stated above; 2. That the Commission amend Conservation Order 80 to expand the McArthur River Field to include an additional 440 acres within ADL 18731, including portions of Sections 8, and 10 of T9N, R13W, SM (Exhibit A); and 3. That the Commission amend Conservation Order 228 by repealing existing Rules 1 and 3, and adopting proposed Rules 1 and 3, stated above; Sincerely, Judy Stanek, Landman Hilcorp Alaska, LLC Enclosures: Exhibit A: Proposed McArthur River Field Location Exhibit B: AOGCC McArthur River Field Conservation Orders cc: State of Alaska, Department of Natural Resources, Division of Oil and Gas 0 • Exhibit A McArthur River Field 2 1 6 4 3 2 1 6 /L392229 ADL391258 ADL39178 ADL3 2228 ADL 118731 AD 10 11 12 7 8 11 12 7 ADL3911 15 14Tfi1600 ADL018777 r> King Salmon 15 13 18 A1068 T9N R13W 22 23 19 20 21 22 3 24 19 26 30 2g f Wing 28 27 ADL391601 = 23 30 A L0187 8 F34ADL3907342531 32 33 34 36 31 T2 .1 6 5 4 3 2 1 Dolly Vai den ADL 18729 � ADL3 9111 10 11 ADLO1760 7 8 10 11 12 16 T8N R14W T8N 13W 15 14 13 18 1'7 13 15 14 1< 2 22 23 24 19 20 21 22 DLO18756 23 24 ADD 9112 A0350V27 - McArthur River Field Expansion 28 26 25ADL391464 State Ceases 3 • E Order No. AA Operator CO 234 A 1 UNION OIL CO CO 351 0 UNION OIL CO CO 350 0 UNION OIL CO CO 234 A 0 UNION OIL CO CO 234 1 UNION OIL CO CO 284 0 UNION OIL CO CO 226 0 Union AIO 5 1 Union AIO 5 0 Union CO BOA 0 Union CO 107 0 Union CO 80 0 Union Exhibit B MCARTHUR RIVER FIELD *No Pool* Current Orders Date Description 11-Jul-95 Waiver of the production logging requirements of CO 234A Rule 3 for TBU wells K-3RD and K-19RD. 29-Dec-94 Exempts field from requirements of 20 AAC 25.280(a) & (b). 23-Dec-94 Permit commingling of production from Middle Kenai "G" Hemlock/W Foreland/undefined Jurassic Oil Pools, in TBU M-32 wellbore. 21-Dec-93 Commingling of produced fluids from Hemlock, Middle Kenai "G" & West Foreland oil Pools. Repeals CO 234. 18-Jun-92 Waiver prod logging requirements for Trading Bay Unit wells M-25, M-27, M-28, M-29, G-32 & K-30RD. 23-Dec-91 Commingle produced fluids from Middle Kenai "G" and W Foreland Oil Pools w/those from an unidentified pool in the TBU State M-28 wellbore. 3 POOLS 23-Jan-87 Amends Rule 4 CO 080 to authorize underground injection for enhanced recovery oprns in the McArthur Riv West Forelands Oil Pool. 10-0ct-86 Amends Rule 6 of Al D #5. 25-Jul-86 Underground injection of fluids for enhanced recovery in McArthur Riv Middle Kenai G, Hemlock and West Foriand oil pools in the Trading Bay Unit. 30-Apr-74 Amends Rule 4, CO 080 to allow injection for pressure maintenance in McArthur Riv Middle Kenai "G" Oil Pool. 14-Sep-71 Authorize commingling of production from Middle Kenai G and the Hemlock Oil Pools in the TBU K-10 well. 30-Sep-69 Pool rules for McArthur Riv Middle Kenai Gas Pool, McArthur Riv Middle Kenai "G", Hemlock & West Forelands Oil Pools. Current Y Y Y Y Y Y Y Y Y Y Y Y MCARTHUR RIVER FIELD *No Pool* Spacing Exception Orders Order No. AA Operator Date Description Current CO 80 86 UNION OIL CO 22-May-02 SPACING EXCEPTION to drill and complete TBF A-29RD, an Y injector well that wil be drilled to the northwestern flank of the hemlock structure to support take -off from A-15RD and K-13RD2. CO 80 84 UNION OIL CO 08-Mar-02 Spacing exception TBF well A-15RDST1LIDP. Y CO 80 83 UNION OIL CO 01-Mar-02 Spacing Exception TBF A-29RD. Y CO 80 82 UNION OIL CO 16-Jul-01 Spacing exception for TBU K-24RD2 well. Y CO 80 81 UNION OIL CO 04-Apr-01 Spacing Exception for TBU K-13RD2 well. Y CO 80 80 UNION OIL CO 09-Feb-01 Spacing exception for TBU K-1 RD2 Y CO 80 79 UNION OIL CO 14-Jul-00 spacing exception for TBU G-26RD Y CO 80 78 UNION OIL CO 13-Apr-00 Spacing Exception for TBU G-28 RD. N CO 80 77 UNION OIL CO 02-Nov-99 Spacing exception for TBU M-32RD well. Y CO 80 75 UNION OIL CO 12-Jul-99 Spacing exception for TBU D-31 L1 well. Y CO 80 76 UNION OIL CO 12-Jul-99 Spacing exception for TBU D-48 L1 well. Y CO 80 74 UNION OIL CO 02-Jul-98 Spacing Exception for TBU D-26RD oil well. Y CO 80 73 UNION OIL CO 17-Jun-98 Spacing Exception for TBU G-5RD oil well. Y CO 80 72 UNION OIL CO 29-May-98 Spacing exception for TBU G-15RD oil well. Y CO 80 71 UNION OIL CO 02-Apr-98 Spacing exception for TBU G-21 RD oil well. Y CO 80 70 UNION OIL CO 16-Jun-95 Spacing Exception for TBU D-26RD well. Y CO 344 0 UNION OIL CO 21-Nov-94 Spacing exception for Trading Bay Unit M-32 development oil well. Y CO 80 69 UNION OIL CO 20-Oct-94 Spacing Exception for TBU M-32 well. Y CO 80 68 UNION OIL CO 06-Dec-93 Spacing exception for TBU M-31 well. Y CO 80 67 UNION OIL CO 20-Oct-93 Spacing exception for TBU K-26 well. Y CO 80 66 UNION OIL CO 30-Aug-93 Spacing Exception for TBU K-24RD well. Y CO 80 64 UNION OIL CO 29-Dec-92 Spacing Exception for TBU D-7RD #2 well. Y CO 80 65 UNION OIL CO 29-Dec-92 Spacing Exception for TBU D-48 well. Y CO 80 63 UNION OIL CO 14-May-92 Spacing Exception for TBU G-29RD well. N CO 80 62 UNION OIL CO 02-Dec-91 Spacing Exception for TBU G-01 RD. Y CO 80 61 UNION OIL CO 18-Jul-91 Spacing exception for TBU M-20. Y CO 80 60 UNION OIL CO 15-Jul-91 Spacing exception for TBU G-14A-RD. Y CO 80 59 UNION OIL CO 12-Jun-91 Spacing Exception for TBU K-8RD2. Y CO 80 58 UNION OIL CO 20-Feb-91 Spacing exception for TBU M-29. Y CO 80 57 UNION OIL CO 28-Jan-91 Spacing Exception for TBU D-47. Y CO 80 56 UNION OIL CO 29-Jan-90 Spacing exception for TBU M-28. Y CO 80 55 UNION OIL CO 03-Jan-90 Spacing Exception for TBU G-40. Y CO 80 54 UNION OIL CO 30-Jun-89 Spacing Exception for TBU D-46. Y CO 80 53 Union 04-Nov-87 spacing exception for TBU M-26. Y CO 80 52 Union 26-Aug-87 Spacing exception for TBU M-25. Y CO 80 51 Union 23-Dec-85 Spacing Exception for TBU D-43RD. Y CO 80 50 Union 12-Jun-85 Spacing exception for TBU D-44. Y CO 80 49 Union 09-Jan-85 Spacing exception for TBU D-29RD. Y MCARTHUR RIVER FIELD *No Pool* Spacing Exception Orders Order No. AA Operator Date Description Current CO 80 48 Union 12-Oct-84 Spacing exception for wells TBU K-8RD, G-29 & D-43. Y CO 80 47 Union 27-May-83 Spacing Exception for TBU D-35. Y CO 80 46 Union 20-May-83 Spacing Exception for TBU D-3RD2. Y CO 80 45 Union 29-Mar-83 Spacing Exception for TBU D-42. Y CO 80 44 Union 13-Jan-83 Spacing Exception for TBU G-3RD #2. Y CO 80 43 Union 01-Jun-82 Spacing Exception for TBU D-40RD. Y CO 80 42 Union 22-Apr-82 Spacing exception for TBU G-2RD. Y CO 80 41 Union 31-Mar-82 Spacing exception TBU D-4RD. Y CO 80 40 Union 18-Mar-82 Spacing Exception for TBU G-6RD. Y CO 80 39 Union 11-Dec-81 Spacing Exception for TBU G-4RD. Y CO 80 38 Union 19-Feb-81 Spacing Exception for TBU D-17RD. Y CO 80 37 Union 04-Dec-80 Spacing Exception for TBU K-3RD. Y CO 80 36 Union 01-Oct-80 Spacing exception for TBU D-16RD. Y CO 80 35 Union 18-Jul-80 Spacing Exception for TBU D-12RD. Y CO 80 34 Union 06-Jun-80 Spacing exception for TBU D-5RD. Y CO 80 33 Union 17-Sep-79 Spacing Exception for TBU D-41. Y CO 80 32 Union 09-Aug-79 Spacing Exception for TBU K-24. Y CO 80 31 Union 11-Jun-79 Spacing Exception for TBU D-29RD. Y CO 80 30 Union 19-Apr-79 Spacing exception for TBU D-3RD. Y CO 80 28 Union 21-Mar-79 Spacing Exception for TBU G-23RD. Y CO 80 27 UNION OIL CO 21-Mar-79 Spacing exception for TBU K-21RD. Y CO 80 29 Union 21-Mar-79 Spacing exception for TBU G-34RD. Y CO 80 27 UNION OIL CO 27-Feb-79 Spacing Exception for TBU D-34A. Y CO 80 26 Union 18-Jan-79 Spacing exception for TBU G-28 well. Y CO 80 25 Union 31-Oct-78 Spacing Exception for TBU No. D-25RD. Y CO 80 24 Union 11-Jul-78 Spacing Exception for TBU No. K-12RD. Y CO 80 23 Union 11-May-78 Spacing exception for TBU G-8RD Y CO 80 22 Union 04-Apr-78 Spacing Exception for TBU #K-2RD. Y CO 80 21 Union 27-Dec-77 Spacing exception for TBU D-7RD. Y CO 80 20 Union 01-Dec-77 Spacing Exception for TBU G-30. Y CO 80 19 Union 12-Jul-76 Spacing exception for TBU G-26 well. Y CO 80 18 Union 15-Jun-76 Spacing Exception for TBU D-29 well. Y CO 80 17 Union 25-Mar-76 Spacing exception for TBU D-28. Y CO 80 14 Union 08-Mar-76 Spacing Exception for TBU K-23. Y CO 80 16 Union 08-Mar-76 Spacing Exception for TBU K-24. Y CO 80 15 Union 08-Mar-76 Spacing Exception for TBU G-24. Y CO 80 13 Union 21-Jul-75 Spacing exception for TBU D-2ARD. Y CO 80 12 Union 15-May-75 Spacing exception for TBU K-21. Y CO 80 11 Union 15-Apr-75 Spacing Exception for TBU D-27. Y MCARTHUR RIVER FIELD *No Pool* Spacing Exception Orders Order No. AA Operator Date Description Current CO 80 10 Union 31-Jan-75 Spacing Exception for TBU K-22. Y CO 80 9 Union 23-Dec-74 Spacing Exception for TBU G-23. Y CO 80 8 Union 11-Oct-74 Spacing exception for TBU K-1ORD. Y CO 80 7 Union 03-Jun-74 Spacing exception for TBU D-8RD. Y CO 80 6 Union 10-May-74 Spacing Exception for TBU G-21. Y CO 80 5 Union 02-May-74 Spacing exception for TBU G-31. Y CO 80 3 Union 06-Feb-74 Spacing exception for TBU K-19. Y CO 80 4 Union 06-Feb-74 Spacing Exception for TBU D-26. Y CO 80 2 Union 22-Jan-74 Spacing Exception for TBU G-21. Y CO 80 1 Union 11-May-73 Spacing Exception for TBU K-18. Y CO 79 0 Union 20-Aug-69 Spacing exception for TBU K-20 well. MRF Y CO 24 0 ARCO ALASKA 28-Jun-66 Spacing exception for McArthur Rv St #1. N MCARTHUR RIVER FIELD HEMLOCK OIL POOL Current Orders Order No. AA Operator Date Description Current AIO 5 2 UNION OIL CO 29-Mar-05 Spacing Exception Grayling 40 (PTD 190-003). Y AIO 6 3 UNION OIL CO 29-Mar-05 Spacing exception Anna #5 (PTD 167-014). Y AIO 5 3 UNION OIL CO 20-Mar-05 Spacing Exception Grayling 40 (PTD 190-003). Y MCARTHUR RIVER FIELD MIDDLE KENAI GAS POOL Current Orders Order No. AA Operator Date Description Current CO 228 2 UNION OIL CO 02-Apr-90 Repeals Rule 1 b CO 080 as amended by CO 228; reenacts rule to Y define McArthur Rv Middle Kenai Gas Pool as equivalent to TBU K-2 btwn 1780' & 10128'. CO 228 1 UNION OIL CO 12-May-88 Amends CO 228 to add Rule 4 re auxiliary csg, cementing & Y blowout prev equipment. (This rule not in lieu of Rule 2a CO 080.) CO 228 0 Union 17-Apr-87 Amends CO 080 rule 1(b) Middle Kenai Gas Pool. Y • • MCARTHUR RIVER FIELD MIDDLE KENAI GAS POOL Spacing Exception Orders Order No. AA Operator Date Description Current CO 228 6 UNION OIL CO 28-Oct-03 Spacing Exception to drill and complete the TBU M-16RD Middle Y Kenai Gas Pool. CO 228 5 UNION OIL CO 07-Sep-01 Spacing exception for well TBU M-12. Y CO 228 4 UNION OIL CO 11-Sep-97 Spacing exception for well Trading Bay Unit M-16. Y CO 228 3 UNION OIL CO 22-Jul-96 Spacing exception for well TBU M-3. Y CO 228 3 UNION OIL CO 26-Sep-90 Spacing exception for well TBU M-9. Y RECEIVED JUN 13 2013 AOGCC VERIFICATION OF APPLICATION AMENDING CO 80 AND CO 228 MCARTHUR RIVER FIELD COOK INLET, ALASKA I, Judy Stanek, Landman, Hilcorp Alaska, LLC, do hereby verify the following: I am acquainted with the application submitted on March 13, 2013, proposing to change the McArthur River Field Rules. have reviewed the application submitted for amending Conservation Orders 80 and 228 and all facts therein are true. I have reviewed the plat attached to said application, and it correctly portrays pertinent and required data. DATED at Anchorage, Alaska, this 11th day of June, 2013. Q"Z, 'Z� � - Ju y Stan# Landman STATE OF ALASKA ) THIRD JUDICIAL DISTRICT ) SUBSCRIBED TO AND SWORN before me this 11th day of June, 2013. NOT Y PUBLIC IN AND FOR THE TATE OF ALASKA / My commission expires: , v kid or ALAsKA a NOTARY PUBLIC Zelma M. Clarke } .!t totmfs W BON Nca 10, 2016