The URL can be used to link to this page

Home My WebLink AboutCO 093 BIs 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. Cy � Order File Identifier Organizing (done) RESCAN a/color Items: r-1.wo-sa„ 1111111111111111111 DIGITAL DATA ❑ Diskettes, No. ❑ Greyscale Items: ❑ Other, No/Type: ❑ Poor Quality Originals: ❑ Other: NOTES: OVERSIZED (Scannable) ❑ Maps: ❑ Other Items Scannable by a Large Scanner OVERSIZED (Non -Scannable) ❑ Logs of various kinds: ❑ Other:: BY Angela)Date: yIz,Dk`_ /s/ fn IIIIIIIIIIIIII IIIII Project Proo g BY n eI Date: �L 23l �`E /s/ -mot Scanning Preparation x 30 = + = TOTAL PAGES 'kck, (Count does not include cover sheet) BY: ngel Date: /s/� Production Scanning III II'III IIIII II III Stage 1 Page Count from Scanned File: `J ` (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: YES ✓,�pNOO BY: ela Date: \1 23t ��`� /s/ Q4l Stage 1 If NO in stage 1, page(s) discrepancies were found: ✓ YES NO BY: 4np Date: ` /s/ Scanning is complete at this point unless rescanning is required. 1111111111111111111 ReScanned 1111111111111111111 BY: Angela Date: /s/ Comments about this file: Quality Checked 1111111111111111111 INDEX CONSERVATION ORDER NO. 93B Trading Bay Field Trading Bay Middle Kenai "B" Oil Pool Trading Bay Middle Kenai "C" Oil Pool Trading Bay Middle Kenai "D" Oil Pool Trading Bay Middle Kenai "E" Oil Pool Trading Bay Hemlock Oil Pool 1. April 1, 2013 Hilcorp Alaska, LLC's (HAK) letter to AOGCC requesting that Conservation Order 93 be amended to allow for unlimited well spacing within the Trading Bay Field 2. April 30, 2013 Notice of Public Hearing, Affidavits of Publication, email distribution, and mailings 3. June 25, 2013 Emails between AOGCC and Hilcorp regarding effective dates of Hilcorp acquiring interest from Union Oil, Pacific Energy, and Marathon INDEX CONSERVATION ORDER NO. 93B Trading Bay Field Trading Bay Middle Kenai "B" Oil Pool Trading Bay Middle Kenai "C" Oil Pool Trading Bay Middle Kenai "D" Oil Pool Trading Bay Middle Kenai "E" Oil Pool Trading Bay Hemlock Oil Pool STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC. to revise well spacing requirements of the Trading Bay Field. IT APPEARING THAT: Docket CO-13-05 Conservation Order No. 93B Trading Bay Field Trading Bay Middle Kenai "B" Oil Pool Trading Bay Middle Kenai "C" Oil Pool Trading Bay Middle Kenai "D" Oil Pool Trading Bay Middle Kenai "E" Oil Pool Trading Bay Hemlock Oil Pool September 24, 2013 I . By letter received April 4, 2013, Hilcorp Alaska, LLC (Hilcorp) requests that the Alaska Oil and Gas Conservation Commission (AOGCC) modify the well spacing requirements of Conservation Order 93, repeal existing Rule 9, and adopt as Rule 9 language that allows the Order to be changed administratively. 2. Hilcorp is the only owner and operator of the affected field and pools. The State of Alaska, Department of Natural Resources is the only landowner within 3,000 feet of any affected wells. On April 1, 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 18, 2013. On April 30, 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 May 12, 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 June 11, 2013 6. Because Hilcorp provided sufficient information upon which to make an informed decision, the request can be resolved without a hearing. CO 93B • • September 24, 2013 Page 2 of 7 FINDINGS: 1. Operator: Hilcorp is the operator of the Trading Bay Field 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 Trading Bay Field. Effective January 1, 2012, Hilcorp acquired all interest in the Trading Bay Field previously held by Union Oil Company of California. Effective November 1, 2012, Hilcorp acquired all interest in the Trading Bay Field previously held by Pacific Energy Alaska Operating, LLC. Subsequently, effective February 1, 2013, Hilcorp acquired Marathon's interest in the North Trading Bay Unit. As a result, Hilcorp now holds 100 percent of the ownership in all oil and gas production from the Trading Bay Field. 3. Pool Identification: Conservation Order 93, dated July 31, 1970, defined the multiple pools as follows: a. The Trading Bay Middle Kenai "B" Oil Pools are defined as the accumulations of oil and gas occurring in the interval which correlate with the interval 3,200 feet to 4,585 feet, drilled depth, in the Union Oil Company of California Trading Bay State A-14 Well. b. The Trading Bay Middle Kenai "C" Oil Pools are defined as the accumulations of oil and gas occurring in the intervals which correlate with the interval 4,585 feet to 6,225 feet drilled depth, in the Union Oil Company of California Trading Bay State A-14 Well. c. The Trading Bay Middle Kenai "D" Oil Pools are defined as the accumulations of oil and gas occurring in the intervals which correlate with the interval 6,225 feet to 7,025 feet, drilled depth, in the Union Oil Company of California Trading Bay State A-14 Well. d. The Trading Bay Middle Kenai "E" Oil Pools are defined as the accumulations of oil and gas occurring in the intervals which correlate with the interval 7,025 feet to 7,425 feet, drilled depth, in the Union Oil Company of California Trading Bay State A-14 Well. e. The Trading Bay Hemlock Oil Pool is defined as the accumulations of oil and gas occurring in the interval 5,380 feet to 5,720 feet in the Union Oil Company of California Trading Bay # 1-A Well, but which are not common to the accumulation of oil and gas occurring in the interval 10,275 feet to 10,635 feet in the Texaco Superior TS No. 1 Well. Conservation Order No. 101, dated March 11, 1971, amended Rule 2(a) of Conservation Order No. 93 to redefine the Trading Bay Middle Kenai "B" Oil Pools as the accumulation of oil and gas occurring in the intervals which correlate with the interval 3,420 feet to 4,887 feet drilled depth in the Union Oil Company of California Trading Bay State No. A-23 well. 4. Exploration and Production History: The Trading Bay Field was discovered in 1965. Additional exploratory wells were drilled to delineate the field limits. In 1966, the Monopod Platform was installed. Regular production from the field began in January 1967. The Spurr Platform was installed in 1968 to develop and produce hydrocarbons from the northern area CO 93B September 24, 2013 Page 3 of 7 of the field. Currently, production from the Spurr Platform is shut-in. On the Monopod Platform, there are approximately 28 wells, 17 of which are producing. 5. Re ug latoly History: Conservation Order 38, dated March 21, 1967, granted an exception to the statewide 500-foot governmental quarter section boundary offset provision of Section 2061.1 of the AOGCC Regulations, Title 11 for the drilling of a deviated exploratory well Trading Bay A-3 to test the undefined "Kenai Sands" from a measured depth between 2,100 and 3,000 feet. Conservation Order 41, dated June 5, 1967, defined the vertical limits of the Hemlock Pool as the interval which correlated with the interval 5,380 feet to 5,720 feet in the Union Oil Company of California 1—A Trading Bay well. Rule 2 of that order established that oil wells may be completed closer than 500 feet to the section line, quarter section line or quarter quarter section line, except that no oil well shall be completed at a distance of less than 500 feet from a lease line where ownership changes and that no well may be completed closer than 1,000 feet to any well drilling to or capable of producing from the same pool. Rule 3 of that order allowed one oil well in the Hemlock Pool to be completed in each 80-acre tract in the affected area. Conservation Order 57, dated February 23, 1968, established new rules for the Trading Bay Field Hemlock Pool and rules for the development of the Trading Bay Field Middle Kenai Oil Pools. Rule 1 defined the area to which the Field Rules were applicable. Rule 2(b) defined the Middle Kenai Oil Pools and the Middle Kenai Gas Pools. Rule 3 authorized commingling in the borehole of production from the Middle Kenai Oil Pools and commingling in the borehole of production from the Middle Kenai Gas Pools. Rule 4(a) allowed up to four oil wells per government quarter section within the Hemlock Pool. Rule 4(b) allowed up to four oil wells and one gas well per government quarter section in the Middle Kenai Pools. Rule 5(a) established setback rules for well completions near lease boundary lines where ownership changed (500-foot setback for oil wells and 1,000-foot setback for gas wells). Rule 5(b) and (c) prohibited oil wells in the Hemlock and Middle Kenai Pools to be completed closer than 660 feet to any other oil wells in the respective pools. Rule 5(c) provided that no gas well in the Middle Kenai Gas Pools shall be completed closer than 1,000 feet to any other gas well in the Middle Kenai Gas Pools. Conservation Order 69, Rule 1(c), dated January 24, 1969, expanded the affected area covered by Conservation Order No. 57 to include the N1/2 Section 34 and the E1/2 Section 27, both in Township 10 North, Range 13 West, Seward Meridian. Conservation Order 93, dated July 31, 1970, rescinded Conservation Order No. 57 and Rule 1(c) of Conservation Order No. 69. The Order established new field -wide rules, redefined the area where Field Rules were applicable, and established formal definitions for the Trading Bay Middle Kenai "B" Oil Pool, Trading Bay Middle Kenai "C" Oil Pool, Trading Bay Middle Kenai "D" Oil Pool, and the Trading Bay Middle Kenai "E" Oil Pool. Rule 3 allowed commingling in the well bore of production from the Trading Bay Middle Kenai "D" and "E" Oil Pools, provided each well was equipped to permit separate testing of the defined pools for allocation of production. Rule 4 continued to allow up to four oil wells to be completed in each of the defined pools in any governmental quarter section. However, the Order was silent on spacing acreage for gas wells. Rule 5 of the Order maintained the 660- CO 93B • • September 24, 2013 Page 4 of 7 foot oil wells spacing footage restriction from Conservation Order 57, but was silent as to offset restrictions for gas wells. Conservation Order 101, dated March 11, 1971, amended Rule 2(a) of Conservation Order No. 93 to define the Trading Bay Middle Kenai "B" Oil Pool as the accumulations of oil and gas occurring in the intervals which correlate with the interval 3,420 feet to 4,887 feet drilled depth in the Union Oil Company of California Trading Bay State No. A-23 well. Conservation Order 115, dated August 15, 1972, amended Rule 3 of Conservation Order No. 93 to read, "Commingling in the well bore of production from the Trading Bay Middle Kenai "D" and "E" Oil Pools is allowed, provided each well except the Trading Bay A-8, A-10 and A-13, is equipped to permit separate testing of the defined pools for allocation of production." The Order concluded that recompletion of the Trading Bay Field A-8, A-10 and A-13 wells without the capacity to test the "D" and "E" oil pools separately should increase ultimate recovery of oil from both pools and that the commingled production stream from the Middle Kenai "D" and "E" Oil Pools in those wells can be reasonably allocated to the individual pools based on thickness of productive intervals in each pool. Conservation Order No. 147, dated September 22, 1977, allowed commingling of production from the Trading Bay Middle Kenai "D" Oil Pool and the Trading Bay Hemlock Oil Pool in the Trading Bay State A-2 and A-32 wellbores. Conservation Order No. 162, dated February 22, 1980, cancelled Conservation Order Nos. 115 and 147 and amended Rule 3 of Conservation Order 93 to read, "Commingling in the borehole of production from the Trading Bay Middle Kenai "D" Oil Pool, the Trading Bay Middle Kenai "E" Oil Pool and the Trading Bay Hemlock Oil Pool is permitted. The total production from all pools in each well shall be allocated so that each pool is credited a share of the total production. The allocation shall be based upon past history of production from each pool, production well tests, and/or fluid flow surveys run annually or when total produced oil volumes change by as much as 25 percent over any three months period..." Conservation Order 93A, dated July 29, 1988, amended Rule 3 of Conservation Order No. 93 to allow commingling in the wellbore of produced fluids from the Trading Bay Middle Kenai B, C, D, E, and Hemlock Oil Pools, and those oil bearing sands which overlie the Middle Kenai "B" Oil Pool. Conservation Order No. 250, dated May 7, 1990, amended Conservation Order 93 to add Rule 12. Spacing rules for shallow oil bearing sands, "Unlimited well spacing is allowed for wells drilled to oil bearing sands overlying the Middle Kenai "B" Oil Pool, except that no well may be open to produce these sands closer than 500 feet to a lease boundary marking a change in ownership." Conservation Order No. 252, dated May 7, 1990, amended Conservation Order 93 to add Rule 13. Spacing rules for oil bearing sands below the Hemlock Oil Pool, "Unlimited well spacing is allowed for wells drilled to oil bearing sands underlying the Hemlock Oil Pool, except that no wells may be open to produce these sands closer than 500 feet to a lease boundary marking a change in ownership." Rule 3 of Conservation Order 93 (as amended by CO 93A) was further amended to read, "Commingling in the wellbore of produced fluids from the Trading Bay Middle Kenai B, C, D, E, and Hemlock Oil Pools and those oil bearing CO 93B September 24, 2013 Page 5 of 7 sands which overlie the Middle Kenai "B" Oil Pool and those oil bearing sands which underlie the Hemlock Oil Pool is permitted. Total well production need not be allocated to each pool and productive sand." Conservation Order 266, dated January 3, 1991, amended Rule 6(b) of Conservation Order 93 to allow alternate completion methods where appropriate. 6. 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 April 1, 2013. CONCLUSIONS: The Trading Bay Field is a mature oil and gas production development. Revising wellbore spacing provisions for all defined and undefined oil and gas pools within the Trading Bay Field Affected Area will increase the operator's flexibility in placing and recompleting wells to optimize resource recovery. Revising well spacing provisions for these pools will not promote waste, jeopardize correlative rights, or result in an increased risk of fluid movement into freshwater. 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 April 4, 2013 application for: 1. Amendment of the well spacing provisions of Conservation Order 93 for all defined and undefined oil and gas pools within the Trading Bay Field; and 2. Amendment of the Administrative Approval language for Conservation Order 93. Hilcorp may proceed as long as it complies with the terms of the Pooling Agreement for the Trading Bay Field, applicable Alaska laws, and all other legal requirements. Development and operation of the Middle Kenai B, C, D, E and Trading Bay Hemlock Oil Pools, and undefined oil and gas pool(s) is subject to the rules in CO 93 and CO 93A and the amendments thereto and the statewide requirements under 20 AAC 25 to the extent not superseded by these rules. All other conservation orders affecting the Trading Bay Field and the referenced pools in the Trading Bay Field remain in full force and effect, as applicable, except as modified hereby: CO 93B September 24, 2013 Page 6 of 7 Trading Bay Field: Seward Meridian (reiterated) Township, Range Description T9N, R13W, S.M. Section 3: NW'/4, W1/2SW1/4 Section 4: E1/2, SW1/4, S1/2NW1/4, NE1/4NW1/4 Section 5: E1/2SE1/4, SWl/4SE1/4 Section 8: NE 1 /4 Section 9: N1/2 T10N, R13W, S.M. Section 27: El/2 Section 33: S1/2SE1/4, NE1/4SE1/4 Section 34: SW1/4, N1/2 1. Rule 4 of Conservation Order No. 93 is amended to read: There shall be no oil or gas well spacing restrictions within the Trading Bay Field. 2. Rule 5 of Conservation Order No. 93 is amended to read: a) No oil well shall be completed less than 500 feet from an exterior property line of the Trading Bay Field where the owners and landowners are not the same on both sides of the line; and b) No gas well shall be completed less than 1,500 feet from an exterior property line of the Trading Bay Field where the owners and landowners are not the same on both sides of the line. 3. Rule 9 of Conservation Order No. 93 is amended to read: 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 ri; freshwater. DONE at Anchorage, Alaska and dated September 24, 2013. 6x� Cathy Y. Foerster Chair, Commissioner a-t75-�� Daniel T. Seamount, Jr. Commissioner Commissioner CO 93B • • September 24, 2013 Page 7 of 7 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), "[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 defaultafter 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. Colombie, Jody J (DOA) s � From: Colombie, Jody J (DOA) Sent: Wednesday, September 25, 2013 1:56 PM To: 'Angela Singh'; Ballantine, Tab A (LAW); Bettis, Patricia K (DOA); 'Brooks, Phoebe'; 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); 'Jennifer Hunt'; Johnson, Elaine M (DOA); Jones, Jeffery B (DOA); Laasch, Linda K (DOA); 'Makana Bender'; Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Norman, John K (DOA); Okland, Howard D (DOA); Paladijczuk, Tracie L (DOA); Pasqua[, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); 'Wallace, Chris (DOA sponsored)'; '(michael j.ne[son@conocophillips.com)'; 'AKDCWellIntegrityCoordinator'; 'Alexander Bridge'; 'Andrew VanderJack'; 'Anna Raff'; 'Barbara F Fullmer'; 'bbritch'; 'Becky Bohrer'; 'Bill Barron'; 'Bill Penrose'; 'Bill Walker'; 'Brian Havelock'; Burdick, John D (DNR); 'caunderwood'; 'Cliff Posey'; 'Colleen Miller'; 'Crandall, Krissell'; 'D Lawrence'; 'Daryl J. Kleppin'; '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'; 'Evans, John R (LDZX)'; '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 (JeffJones@alaska.gov)'; 'Jerry McCutcheon'; 'Jim White'; 'Jim Winegarner'; 'Joe Lastufka'; 'Joe Nicks'; 'John Easton'; 'John Garing'; 'Jon Goltz'; Jones, Jeffrey L (GOV); 'Juanita Lovett'; 'Judy Stanek'; 'Julie Houle'; 'Julie Little'; 'Kari Moriarty'; 'Kaynell Zeman'; 'Keith Wiles'; 'Kelly Sperback'; Kiorpes, Steve T; 'Klippmann'; 'Laura Silliphant (laura.gregersen@alaska.gov)'; 'Leslie Smith'; 'Lisa Parker'; 'Louisiana Cutler'; 'Luke Keller'; 'Marc Kovak'; 'Mark Dalton'; 'Mark Hanley (mark.hanley@anadarko.com)'; 'Mark P. Worcester'; 'Marguerite kremer (meg.kremer@a[aska.gov)'; Michael Jacobs (michael.w.jacobs@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'; Sandra Haggard; 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@a[aska.gov); Steven R. Rossberg; 'Suzanne Gibson'; Tamera Sheffield; 'Tania Ramos'; 'Ted Kramer'; Temple Davidson; Terence Dalton; Teresa Imm; Thor Cutler; 'Tim Mayers'; Tina Grovier (tmgrovier@stoel.com); Todd Durkee; Tony Hopfinger; trmjrl; Vicki Irwin; Walter Featherly; Yereth Rosen; 'Aaron Gluzman'; 'Aaron Sorrell'; Ajibola Adeyeye; Anne Hillman; 'Bruce Williams'; Bruno, Jeff J (DNR); Casey Sullivan; David Lenig; David Martin; 'Donald Perrin'; 'Donna Vukich'; Eric Lidji; Erik Opstad; 'Gary Orr'; 'Graham Smith'; 'Greg Mattson'; Heusser, Heather A (DNR); Holly Pearen; 'James Rodgers'; 'Jason Bergerson'; Jennifer Starck; 'Jill McLeod'; 'Jim Magill'; Joe Longo; King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Marc Kuck; 'Marie Steele'; Matt Armstrong; 'Matt Gill'; 'Mike Franger'; 'Patricia Bettis'; Peter Contreras; Pollet, Jolie; Richard Garrard; 'Ryan Daniel'; 'Sandra Lemke'; 'Scott Pexton'; Shaun Peterson; 'Susan Pollard'; Talib Syed; 'Wayne Wooster'; 'Wendy Wollf'; 'William Hutto'; 'William Van Dyke' Subject: CO 93B (Trading Bay Field - Hilcorp) Attachments: co 93B.pdf • Jody j. Colombie Special Assistant Alaska Oil and Gas Conservation Commission 333 W. Th Avenue Anchorage, Alaska 99501 (907) 793-1221 (907) 276-7542 —;y • — oenu awny nne w Use Avery® Template 51600 Feed Paper expose Pop-up EdgeTM David McCaleb Penny Vadla IHS Energy Group 399 W. Riverview Ave. GEPS Soldotna, AK 99669-7714 5333 Westheimer, Ste. 100 Houston, TX 77056 Jerry Hodgden Richard Neahring Hodgden Oil Company NRG Associates 40818 cn St. President Golden, CO 80401-2433 Post Office Box 1655 Colorado Springs, CO 80901 Bernie Karl CIRI K&K Recycling Inc. Land Department Post Office Box 58055 Post Office Box 93330 Fairbanks, AK 99711 Anchorage, AK 99503 North Slope Borough Planning Department Richard Wagner Post O Post Office Box 69 Office Box 60868 Fairbanks, AK 99706 Barrow, AK 99723 Jack Hakkila Darwin Waldsmith Post Office Box 190083 Post Office Box 39309 Anchorage, AK 99519 Ninilchik, AK 99639 V AVERY0 5160QP 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`n Ct. Anchorage, AK 99515-4295 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 James Gibbs Post Office Box 1597 Soldotna, AK 99669 a /ed 9�s✓3 Etiquettes faciles a peter ; A Repliez a la hachure afin de Utilisez le gabarit AVERY@ 51600 JI j cha gement reveler le rebord Pop-upTM www.avery.com ; 1-800-GO-AVERY ' #3 0 Bettis, Patricia K (DOA) From: Judy Stanek Ustanek@hilcorp.com) Sent: Tuesday, June 25, 2013 3:58 PM To: Bettis, Patricia K (DOA) Subject: RE: Trading Bay Field: Hilcorp's Proposed Rules Hi Patricia. Hilcorp acquired Union Oil's interest (53.2%) effective 1/1/2012, Pacific Energy's interest (46.8%) effective 11/1/2012 and Marathon's interest effective 2/1/2013 ( 3 different leases- ADL 35431 100%; ADL 18776 100% and ADL 17597 50%). Judy Judy Stanek, CPL Landman Hilcorp Alaska LLC Ph: 907.777.8341 From: Bettis, Patricia K (DOA)[mailto:patricia.bettis@alaska.gov] Sent: Tuesday, June 25, 2013 3:44 PM To: Judy Stanek Subject: Trading Bay Field: Hilcorp's Proposed Rules Good afternoon Judy, On page 10 of Hilcorp's letter dated April 1, 2013, it is stated that in 2012, Hilcorp acquired Union Oil Company of California's 53.2% working interest and Pacific Energy Alaska Operating, LLC 45.8% working interest in all production from the Monopod Platform. In February 2013, Hilcorp acquired Marathon's interest in the North Trading Bay Unit. Would you please provide the effective date of those acquisitions? 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.sov. Hilcorp Alaska, LLC Post Office Box 244027 ��r✓✓✓ Anchorage, AK 99524-4027 A rp R 0 4 Z Q 13 3800 Centerpoint Djive Suite 100 DIVISION OF Anchorage, AK 99503 OIL AND Q phone:,-7-78341 April 1, 2013 Fax:9o7-777-8,-asso jstanek@hilcorp.com Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 71h Avenue, Suite 100 Anchorage, Alaska 99501 RE: Proposed Rules for the Trading Bay Field Dear Commissioner Foerster: Hilcorp Alaska, LLC ("Hilcorp"), as Operator of the Trading Bay Field, respectfully requests the Alaska Oil and Gas Conservation Commission ("AOGCC") amend. Conservation Order 93 to allow for unlimited well spacing within the Trading Bay Field through the adoption of the following proposed rule: Tradin;~ Bay Field Well Spacing: There shall be no oil or gas well spacing restrictions within the Trading Bay Field, except that: a) 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 b) 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. In addition, Hilcorp respectfully requests AOGCC repeal Rule 9 of Conservation Order 93 in its entirety, and to replace it with the following proposed rule: 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: Trading Bay Field April 1, 2013 Page 2of12 BACKGROUND The Trading Bay Field is a non -unitized off -shore field located within Cook Inlet approximately 63 air miles southwest of Anchorage, Alaska.' The field's discovery well, Trading Bay 1-A, was drilled from a floating vessel in 1965 and was completed in the Tertiary, Upper Hemlock Pool.2 Additional exploratory wells were drilled in 1956-1966 to delineate the field limits. The Monopod Platform was completed in October 1966 and has since served as the field's permanent exploration and production platform.3 On October 15, 1967, Marathon Oil Company (Marathon), Superior Oil Company, Texaco Inc., and Union Oil Company of California (Union) entered into a Joint Operating Agreement for the Trading Bay Pool.4 This agreement superseded the January 1, 1967 and May 11, 1967 agreements, and provided for operation of leased acreage from the State of Alaska. On March 21, 1967, AOGCC granted Union's request for an exception to the 500 foot governmental quarter section boundary offset provision of 11 AAC 2061.1. This exception allowed drilling of a deviated exploratory well (Trading Bay A-3) to conducted a shallow testing program of the undefined "Kenai Sands" from a measured depth between 2,100 and 3,000 feet. See Conservation Order 38. On June 5, 1967, AOGCC granted Union's request for a temporary spacing order to exempt the field from statewide setback requirements from government quarter section lines, to establish a 500 foot setback from lease lines where ownership changes, and to allow up to one well completion within the Hemlock Pool per 80 acre spacing interval. See Conservation Order 41 (also defining the "Hemlock Pools").5 However, the Commission denied Union's request to reduce the standard 1,000 foot minimum distance between producing intervals to 745 feet (equivalent to a 40-acre radius of drainage), noting that, "...insufficient evidence was presented to warrant the completion of a well closer than 1000 feet to any well drilling to or capable of producing from the same pool). Id. ' See Exhibit A (Trading Bay Field Map, attached). The field is comprised of 3,280 acres leased from the State of Alaska (ADL l 8731). 2 On June 25, 1965, Union submitted its application for "First Discovery Well Certification" to the Alaska Division of Lands. At the time, the well flowed at 1,670 barrels per day. 3 The Monopod Platform, and associated pipelines and on -shore production facilities were built by Marathon Oil Company and Union Oil Company of California ('Union"). 4 This JOA addressed 160 acres of land leased from the State of Alaska under ADL 18731 and 80 acres of land leased from the State of Alaska under ADL 17597. 5 Conservation Order 41, Rule 1, defined the vertical limits of the Hemlock Pools as "the interval which will correlate with the interval 5380' — 5720' in the Union Oil Company of California #1-A Trading Bay well." Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 3 of 12 Despite this outcome, the expert testimony given by Union's geologist, Mr. Edwin East, at the May 22, 1967 hearing is notable: We fully request reduction of a 1000 foot minimum distance between producing intervals within the interior of the leases in order to more efficiently plan and react to complicated geological block in the Trading Bay Field. We recommend that this minimum distance be reduced to a 745 feet, equivalent to a 40-acre radius of drainage. As demonstrated by the schematic drainage pattern [... ] the ultimate for the field to achieve the most efficient conservation of primary oil eliminating waste in the reservoir is even less than 80-acre spacing. Forty acre spacing will undoubtedly ultimately be needed to drain the reservoir. This faulted field is resulting in total unpredictability of sand horizons because of structural and stratigraphic complications, is out of the normal for which this 1000' minimum distance regulation was designed. We feel, further, that oil program is influenced by the last field date, and the 745 foot distance is more truly representative of a minimum distance in the multi -reservoir field, which can be adhered to within a minimum of administrative action during the drilling of the wells. 6 On July 17, 1967, AOGCC granted a spacing exception to allow Trading Bay A-4 to be directionally drilled to a producing location closer than 500 feet from a section line boundary. See Conservation Order 42 (exception granted due to unpredicted structural conditions which resulted in the producing interval being located within the 500 foot boundary offset area.) On August 3, 1967, AOGCC issued Conservation Order 46, which allowed Trading Bay A-5 to be drilled and completed closer than 500 feet from a section line boundary. On January 23, 1968, Marathon, Superior Oil Company, Texaco, Inc. and Union entered into an amended Joint Operating Agreement to provide for the drilling of a third test well from the Monopod targeting production from the Middle Kenai Formation. The Joint Operating Agreement was subsequently amended on April 28, 1968 to provide for drilling of additional test wells. On January 27, 1971, the AOGCC authorized an exception to Conservation Order 57 to allow the drilling and production of well A-19 within a particular quarter section occupied by 4 other wells. See Conservation Order 86. On February 23, 1968, AOGCC established new rules for the Hemlock Pool and the Middle Kenai Formation. See Conservation Order 57. Rule 1 defined the area to which Field Rules were applicable. 6 May 27, 1967 excerpt from hearing transcript (14:22 — 15:23) (emphasis added). Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 4 of 12 Rule 2(a) of Conservation Order 57 defined the Hemlock Pool as the interval correlating to 5,380 feet to 5,720 feet in Trading Bay Well 1-A. Rule 2(b) generally defined the Middle Kenai Formation "as the sedimentary section above the Hemlock formation," more particularly defined the Middle Kenai Oil Pools and Middle Kenai Gas Pools as follows: Each sand in the Middle Kenai Formation in which an oil well may be completed will be an oil pool and each oil pool will be defined individually and all oil pools will be defined collectively as the Middle Kenai Oil Pools. Each sand in the Middle Kenai Formation in which a gas well may be completed will be a gas pool and each gas pool will be defined individually and all gas pools will be defined collectively as the Middle Kenai Gas Pools.7 Rule 3 of Conservation Order 57 allowed for commingling within the borehole of the Middle Kenai Oil Pools and Middle Kenai Gas Pools. However, commingling of both oil and gas from the same wellbore was prohibited, as was commingling of any production from both the Hemlock Pool and Middle Kenai Formation. Rule 4(a) of Conservation Order 57 allowed up to four (4) oil wells per government quarter section within the Hemlock Pool (80-acre spacing). Likewise, Rule 4(b) allowed up to four (4) oil wells and one (1) gas well per government quarter section in the Middle Kenai Pools. No reference was made to any special spacing rules for gas wells within the Hemlock Pool. In the absence of an order by the Commission prescribing a spacing pattern for a pool, applicable statewide spacing requirements apply, 20 AAC 25.055. Rule 5(a) of Conservation Order 57 established setback rules for well completions near lease boundary lines where ownership changes (500' for oil wells, 1,000' for gas wells). Rule 5(b) and (c) prohibited oil wells in the Hemlock and Middle Kenai Pools to be completed more than 660 feet to any other oil wells in the respective pools. Rule 5(c) further established a spacing limitation of 1,000 feet for gas wells in the Middle Kenai Pools, On July 31, 1970, AOGCC held a hearing on Union's proposal to rescind Conservation Order No. 57 and Rule 1(c) of Conservation Order 69, and establish new field -wide rules. See Conservation Order 93. Among other things, the Commission found that "[t]he complicated reservoir configuration and characteristics necessitate careful observation of reservoir performance to achieve maximum oil recovery." Id. (Finding 10, pg. 2). ' Conservation Order 57, Rule 2(b) (emphasis added). Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 5 of 12 Rule 1 of Conservation Order 93 updated legal boundaries of the Trading Bay Field, making minor changes to the area initially defined by Rule 1 of Conservation Order 57 (1968). Rule 2 of Conservation Order 93 established formal definitions for the Trading Bay Middle Kenai `B", "C", "D" and "E' Oil Pools. All oil and gas accumulations associated with each pool were correlated to a certain drilled depth of well A-14. See Rule 2(a)-(d); cf. Rule 2(b), Conservation Order 57.8 Rule 3 of Conservation Order 93 allowed commingling of production from the Middle "D" and `E" Oil pools, but required that each well be equipped to permit separate testing of production for allocation purposes. Notably, this rule was significantly more restrictive than its predecessor, which allowed for commingling of production at any interval within the Middle Kenai Formation without any specific testing requirements. See Conservation Order 57, Rule 3. Rule 4 of Conservation Order 93 continued to allow up to four (4) oil wells to be completed in each of the defined pools in any governmental quarter section. However, no specific rule was established for gas wells. Cf., Rule 4, Conservation Order 57 (limiting gas wells in the Middle Kenai Gas Pools to one well per governmental quarter section). Likewise, Rule 5 of Conservation Order 93 maintained the 660 foot oil well spacing restriction from Conservation Order 57, but was silent as to offset restrictions for gas wells. On March 11, 1971, AOGCC redefined the Trading Bay Middle Kenai "B" Oil Pools as follows: The Trading Bay Middle Kenai "B" Oil Pools are defined as the accumulations of oil and gas occurring in the intervals which correlate with the interval 3420 feet to 4887 feet drilled depth in the [...] Trading Bay State No. A-23 well.9 B In relevant part, CO 57, Rule 2(b) stated, "The Middle Kenai Formation is defined as the sedimentary section above the Hemlock Formation. Each sand in the Middle Kenai Formation in which an oil well may be completed will be an oil pool and each oil pool will be defined individually and all oil pools will be defined collectively as the Middle Kenai Oil Pools. Each sand in the Middle Kenai Formation in which a gas well may be completed will be a gas pool and each gas pool will be defined individually, and all gas pools will be defined collectively as the Middle Kenai Gas Pools." 9 Conservation Order 101, Rule 2(a) (formerly, Conservation Order 93, Rule 2(a) ) defined the Middle Kenai "B" Oil Pools as those accumulations of oil and gas occurring in the interval which correlate with the interval of 3200' to 4585.' Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 6 of 12 On August 15, 1972, AOGCC approved commingling in the well bore of production from the Middle Kenai "D" and "E" Oil Pools, but required each well to be equipped to permit separate testing of the "D" and `E" pools for allocation purposes. See Conservation Order 115, Rule 3 (amending Rule 3 of Conservation Order 93). An exception was made for existing wells A-8, A-10, and A-13, each of which were completed so that the Middle Kenai "D" and "E" Oil Pools could be commingled in one tubing string. On April 26, 1973, AOGCC granted a spacing exception for well A-30, which allowed a fifth oil well to be drilled within the Middle Kenai "D" Oil Pool within a particular government quarter section, citing a "need for a replacement withdrawal point to increase the sweep efficiency of the water flood along the northern flank of the "D" Pool structure. See Conservation Order 93.1. On December 8, 1975, AOGCC granted administrative approval to recomplete well A-14 in the Middle Kenai "C" Oil Pool. See Conservation Order 93.2. On May 7, 1976, AOGCC granted administrative approval to recomplete well A-15 in the Trading Bay Middle Kenai "E" and Hemlock Oil Pools and to commingle production from the two pools in the well bore. See Conservation Order 93.3. The order was silent as to the means or methods required for allocation of production. On September 22, 1977, AOGCC granted Union's request to commingle production from the Middle Kenai "D" and Hemlock Pools in well A-2. See Conservation Order 147. Notably, the Commission also found that "[approximately 75% of the ultimate recovery of the Trading Bay Field has been produced to date." Id. (Finding No. 1, pg. 1). On February 22, 1980, AOGCC issued an order to allow commingling of the Middle Kenai "D", "E" and Hemlock Oil Pools so as to "eliminate the need to prematurely abandon wells due to tubing leaks caused by erosion." Conservation Order 162 (quoting Finding No. 2). By doing so, AOGCC cancelled conservation Orders 115 and 147, and amended Rule 3 of Conservation Order 93 to require production to be allocated according to the following procedure: The allocation shall be based upon past history of production from each pool, production well tests, and/or fluid flow surveys run annually or when total produced oil volumes change by as much as 25% over any three month period. The method of production allocated utilized for each commingled well shall be reported monthly ...10 10 Conservation Order 162. Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 7 of 12 In connection with Conservation Order 93, AOGCC also made the following findings: • Approximately 83% of the estimated reserves that can be recovered from the Monopod have been produced. • It is imperative that each wellbore be used to recover the maximum amount of oil. • Many of the wells from the Monopod are dually completed and increased water and sand production from the wells has caused holes in the tubing strings because of erosion. • It has become economically infeasible to work over some of the wells to repair the tubing leaks. • The Trading Bay Rules require separate measurement of production.11 On July 29, 1988, AOGCC established that oil bearing stands overlie the Middle Kenai "B" Oil Pool in several fault blocks, but due to insufficient well data, determined that creation of a new separate pool was unnecessary. See Conservation Order 93A (Conclusion No. 1).12 There is currently only one well completed in the Middle Kenai Undefined Oil Pool (Trading Bay Field Well A-21 RD), and it has been shut-in since 2007. Although there is no current production from the sands above the Middle Kenai "B" Oil Pool, Hilcorp submits monthly 10-405 Forms to AOGCC for the "Trading Bay Field Undefined Oil" under Pool Code 800148 (aka "TBF Pool A").13 Conservation Order 93A is also significant because it further expanded commingling of oil production from all known pools, to wit: Commingling in the wellbore of produced fluids from the Trading bay Middle Kenai B, C, D, E and Hemlock Oil Pools, and those oil bearing sands which overlie the Middle Kenai "B" Oil Pool is permitted. Total well production need not be allocated to each pool and productive sand. (emphasis added). "Finding Nos. 3-7, Conservation Order 162 (February 22, 1980). 12 Conservation Order 93A cancelled Conservation Order162 and amended Rule 3 of Conservation Order 93 to allow commingling of production from the Middle Kenai B, C , D, E and Hemlock Oil pools, including "those oil bearing sands which overlie the Middle Kenai "B" Oil Pool." t3 See, e.g., Hilcorp's December 13, 2012 Monthly Production Report for Trading Bay Field TBF Monopod, Undefined Oil for the Month of November 2012 (Pool Code 800148). Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 8of12 In relevant part, AOGCC supported this Conservation Order 93A with the following findings and conclusions: • "Allocation of produced fluids to their respective pools is no longer of any benefit to reservoir management, ultimate recovery, or the prevention of waste."1 4 • "Commingling completions will allow through tubing profile modifications, stimulation and coiled tubing workover operation of all pools present"15 • "Commingled completions are also expected to benefit artificial lift."" • "Well life expectancy is extended which should result in the increased ultimate recovery of hydrocarbons."17 • "Wellbore commingling of produced fluids from the Trading Bay Middle Kenai Oil Pool, Hemlock Oil Pool, and oil bearing sands above the Middle Kenai "B" Oil Pool will prevent waste, enhance field ultimate recovery, and does not jeopardize the correlative rights of all owners within the field."18Id On May 7, 1990, AOGCC further amended Conservation Order 93 to eliminate well spacing restrictions below the Hemlock Oil Pool, and expanded rules governing commingling. Pursuant to Conservation Order 252, the Commission amended Conservation Order 93, by adding Rule 13: 1. Spacing rules for oil bearing sands below Hemlock Oil Pool. Unlimited well spacing is allowed for wells drilled to oil bearing sands underlying the Hemlock oil pool, except that no well may be open to produce these sands closer then 500 feet to a lease boundary marking a change in ownership.19 la Conservation Order 93A, Finding 3 15 Id. at Finding 6. 16 Id. at Finding 7. 17 Id. at Finding 8. 's Id. at Conclusion 4. 19 Conservation Order 252, Rule 1 (amending Conservation Order 93 through addition of new rule 13). Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 9 of 12 2. Rule 3 of Conservation Order 93 (as amended by C.O. 93A) is further amended to read: Commingling in the wellbore of produced fluids from the Trading Bay Middle Kenai B, C, D, E, and Hemlock oil pools, and those oil bearing sands which overlie the Middle Kenai "B" oil pool and those oil bearing sands which underlie the Hemlock Oil pool is permitted. Total well production need not be allocated to each pool and productive sand. On March 21, 1990, Union submitted an application requesting new spacing rules for the development of oil bearing sands overlying the Middle Kenai `B" Oil Pool in the Trading Bay Field. Following a hearing, AOGCC issued Conservation Order 250 on May 7, 1990, which in relevant part concluded: Unlimited well spacing in the oil bearing sand overlying the Middle Kenai `B' oil pool will benefit reservoir management, improve ultimate recovery and prevent waste. 2. Correlative rights will be protected if the wellbore is to open to production within 500 feet of a lease boundary marking a change in ownership. Based on these findings, AOGCC amended Rule 93 by adding the following new rule: Rule 12. Spacing rules for shallow oil bearingsands. ands. Unlimited well spacing is allowed for wells drilled to oil bearing sand overlying the [undefined] Middle Kenai "B" oil pool, except that no well may be open to producing these sands closer than 500 feet to a lease boundary marking a change in ownership. On December 3, 1990, Union requested revision of Rule 6(b) of Conservation order 93 to allow alternative completion methods.20 Following a hearing, AOGCC issued Conservation Order 226 which allowed AOGCC to "administratively approve exceptions to Rule 6(b) of CO 93 to allow alternative completion methods where appropriate." On April 4, 1997, AOGCC granted a spacing exception to allow Trading Bay Field A-27 RD to be drilled to a producing location closer than 500 feet from a section line boundary. See Conservation Order 392 (concluding that said spacing exception "will not result in waste nor jeopardize correlative rights.") 20 Conservation Order Rule 6(b) requires production casing to be landed through the completion zone and cemented to cover at least 500 feet above each potentially productive sand interval. Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 10 of 12 On January 15, 1998, AOGCC denied Marathon's request to exempt the Trading Bay Field from the requirements of 20 AAC 25.280(a). See Conservation Order 408. On December 29, 1998, AOGCC granted Union's request for an identical order, finding that "[e]liminating the requirements of 20 AAC 25.280(a) and (b) for all development wells [...] will reduce filing and result in administrative efficiencies for both the operator and the AOGCC." 21 In April 2009, Union requested and obtained a temporary suspension of production and operations due to the volcanic eruption of Mt. Redoubt and the closure of Cook Inlet Pipe Line's Drift River Terminal. Platform production resumed in mid -August 2009, but on a limited basis due to reduction of storage capacity at the Drift River Terminal. In 2012, Hilcorp acquired Union Oil Company of California's 53.2% working interest and Pacific Energy Alaska Operating, LLC 46.8% working interest in all production from the Monopod Platform, In February 2013, Hilcorp acquired Marathon's interest in the North Trading Bay Unit. As a result, Hilcorp is the exclusive working interest owner and operator in the Trading Bay Field. DISCUSSION Hilcorp's proposed rules are designed to prevent waste, protect correlative rights and improve the ultimate recovery of remaining hydrocarbons throughout the Trading Bay field. They are also designed to reduce the administrative burdens on both Hilcorp and AOGCC staff. Hilcorp's proposed rules are also timely: no significant changes to the Trading Bay Field's pool rules have been undertaken since 1990. Since that time, production from the field has been continuous, but in steady decline. There are approximately 28 wells on the Monopod Platform, 17 of which are produeing.22 During the month of November 2012, these wells collectively produced 19,683 barrels of oil and 7,842 MCF gas. Id. By comparison, the Trading Bay Field produced 4,309,847 barrels of oil and 1,174,704 MCF gas from only 10 wells during calendar year of 1969.23 Hilcorp purchased these legacy assets with the intent to maximize the recovery of remaining hydrocarbons. This requires implementation of a comprehensive capital workover program designed to: • repair broken injection wells 21 Conservation Order 351, Rule 1. 12 See generally, Hilcorp's Monthly Production Report to AOGCC dated December 12, 2012, 23 See AOGCC Production History for Trading bay, G-NE HeMLK-NE AOGCC (last checked January 17, 2013). Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field. April 1, 2013 Page 11 of 12 • return shut-in production wells to service • optimize existing well completions • increase water injection and reservoir throughput, • pursue pursuing stimulation opportunities, and • identify, then execute new drilling projects During 2013, Hilcorp anticipates performing of approximately seven rig workovers and one new drill projects on the Monopod Platform, each targeting increased oil and gas production from the Trading Bay Field. 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 15 workovers and four new drill projects within the Trading Bay Unit. Hilcorp cannot efficiently produce remaining reserves under AOGCC's current well spacing rules and sundry application procedures. While existing rules and procedures may have adequately protected correlative rights and prevented waste during the field's initial development, they are not applicable to the enhanced recovery effort necessary to produce remaining hydrocarbon reserves at the Trading Bay Field. As discussed above, Hilcorp, as Operator of the Monopod Platform, is the sole working interest owner of the Trading Bay Field. The State of Alaska is the sole royalty owner, and the rate is uniform throughout the entire field (12.5%). In the absence of any competing working ownership interests, well spacing and density rules are no longer necessary to prevent waste or protect correlative rights. Adjoining owners, operators, and landowners will be adequately protected by standardized off -set measures. Moreover, approval of the proposed rules will reduce the administrative burden of both Hilcorp and AOGCC staff. For example, elimination of well spacing restrictions will exempt Hilcorp, under current AOGCC policy, to accompany each Application for Sundry Approval (10-403 Form) with a customized map illustrating the location and measured distance of a proposed perforation relative to other well completions in the same pool. Such submittals are administratively burdensome and are unnecessary to protect correlative rights, particularly in cases where a well is simply being optimized or reactivated within the same pool. This is particularly true in fields, such as the Trading Bay Field; where commingling of production (within the well bore) from multiple pools is standard industry practice — regardless of the perforation interval or measured depth. 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 and underswept areas that cannot be reached by wells conforming to current spacing restrictions. Elimination of all spacing requirements will help to maximize recovery from these • • Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 12 of 12 bypassed pools, while allowing for continued production from established development wells. The purpose of proposed new administrative rules is self-evident. The goal is simply to afford both AOGCC and Hilcorp with the flexibility required to extend this aging field's capacity to produce in a manner that is technically sound, yet administratively efficient. Hilcorp would be pleased to schedule a technical meeting with AOGCC staff to provide additional information in support of this proposal. Should you have any other questions regarding this proposal, please do not hesitate to contact the undersigned at 777-8341. Sincerely, Judy Stane , Landman Hilcorp Alaska, LLC cc: State of Alaska, Department of Natural Resources, Division of Oil and Gas #2 • STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE ADVERTISING ORDER NO. /� /1�_Q_14-040 AO-V v SEE BOTTOM FOR INVOICE ADDRESS F R D M AOGCC 333 W 7th Ave, Ste 100 Anchorage, AK 99501 AGENCY CONTACT Jody Colombie DATE OF A.O. April 30, 2013 PHONE —1221 PCN DATES ADVERTISEMENT REQUIRED: ASAP THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. 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 NUMBER AMOUNT DATE COMMENTS 1 VEN 2 ARD 02910 FIN AMOUNT SY CC PGM LC ACCT FY NM DIST LID 1 12 02140100 73451 2 REQUISITIONED BY: DIVISION APPROVAL: 02-902 (Rev. 3/94) Publisher/Original Copies: Department Fiscal, Department, Receiving 001 5V I Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket No. CO-13-05. The application of Hilcorp Alaska, LLC (Hilcorp) to amend Conservation Order No. 93, for the Trading Bay Middle Kenai `B" Oil Pool, Trading Bay Middle Kenai "C" Oil Pool, Trading Bay Middle Kenai "C" Oil Pool, Trading Bay Middle Kenai "E" Oil Pool, Trading Bay Hemlock Oil Pool, Trading Bay Field, Kenai Peninsula Borough, Alaska, as follows: 1. Remove intra-pool well spacing requirements; and 2. Amend Conservation Order 93 to repeal existing Rule 9 and to adopt proposed Administrative language as Rule 9. Hilcorp, by application received April 4, 2013, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order removing intra-well spacing requirements for the mature Trading Bay Field. Hilcorp is not proposing to change the required setback distance from any external property boundary where ownership or landownership changes. Hilcorp also requests AOGCC to amend Conservation Order No. 93 by repealing existing Rule 9, and adopting the following language as Rule 9: "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." The AOGCC has tentatively scheduled a public hearing on this application for June 18, 2013 at 9:00 a.m. at the Alaska Oil and Gas Conservation Commission, at 333 West 71h 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 28, 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 30, 2013. In addition, written comments regarding this application may be submitted to the Alaska Oil and Gas Conservation Commission, at 333 West 7tn Avenue, Suite 100, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on June 14, 2013, except that, if a hearing is held, comments must be received no later than the conclusion of the June 18, 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 June 13, 2013. Daniel T. Seamount Commissioner COPIED FROM ORIGINAL FOR SCANNING AI.AShA Journal fCommerce Alaska Oil & Gas Conservation Commission Public Notices FILE NO: Ad Order AO-02-3-14- AO-02-3-14-040 Ad#: 10174796 RECEIVED MAY 17 2013 AOGCC AFFIDAVIT OF PUBLICATION I UNITED STATES OF AMERICA, STATE OF ALASKA, THIRD DISTRICT BEFORE IN1E, THE UNDERSIGNED, A NOTARY PUBLIC THIS DAY PERSONALLY APPEARED Lara Bickford WHO, BEING FIRST DULY SWORN, ACCORDING TO THE LAW, SAYS THAT SHE IS THE Business Manager OF THE ALASKA JOURNAL OF COMMERCE PUBLISHED AT 301 ARTIC SLOPE AVENUE, SUITE 350, IN SAID THIRD DISTRICT AND STATE OF ALASKA AND THAT ADVERTISEMENT, OF WHICH THE ANNEXED IS A TRUE COPY, WHICH WAS PUBLISHED IN SAID PUBLICATION 05/1.2/2013 12th DAY OF MAY 2013 AND THERE AFTER FOR 1 CONSECUTIVE WEEK(S) AND THE LAST PUBLICATION APPEARING ON 05/12/2013 12th DAY OF MAY 2013 Lara Bickford Business Manager SUBSCRIBED AND SWORN BEFORE ME THIS 13th DAY OF May 2013 NOTARY PUBLIC'STATE OF ALASKA MY VOTARY PUBLIC WELINDA JEAN SCHWAB STATE OF ALASKA rM._11___Commission Expires February 14, 2017 ATTACH PROOF OF PUBLICATION HERE Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket No. CO-13-05. The appli- cation of Hilcorp Alaska, LLC (Hil corp) to amend Conservation Order No. 93, for the Trading Bay Middle Kenai "B" Oil Pool, Trading Bay Mid- dle Kenai "C" oil Pool, Trading Bay Middle Kenai "C" Oil Pool, Trading Bay Middle Kenai "E" Oil Pool, Trad- ing Bay Hemlock Oil Pool, Trading Bay Field, Kenai Peninsula Borough, Alaska, as follows: 1. Remove intra-pool well spacing re- quirements; and 2. Amend Conservation Order No. 93 to repeal existing Rule 9 and to adopt proposed Administrative language as Rule 9. Hilcorp, by application received April 4, 2013, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order removing in- tra-well spacing requirements for the mature Trading Bay Field. Hilcorp is not proposing to change the required setback distance from any external property boundary where ownership or landownership changes. Hilcorp also requests AOGCC to amend Conservation Order No. 93 by repealing existing Rule 9, and adopt- ing the following language as Rule 9: "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." . The AOGCC has tentatively scheduled a public hearing on this application for June 18, 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 LIUN LIVl\1VlW �/ Business Manager SUBSCRIBED AND SWORN BEFORE ME THIS 13th DAY OF May 2013 NOTARY PUBLIt?STATE OF ALASKA MY NOTARY BLIC WLINOA JEAN SCHWAS STATE OF ALASKA My Commission Expires February 14, 2017 or landownership changes. Hilcorp also requests AOGCC to amend Conservation Order No. 93 by repealing existing Rule 9, and adopt- ing the following language as Rule 9: "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." The AOGCC has tentatively scheduled _ a public hearing on this application for June 18, 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 28, 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 AOGCC will hold the hearing, call 793-1221 after May 30, 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 June 14, 2013, except that, if a hearing is held, comments must be received no later than the conclusion of the June 18,. 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 June 13, 2013. By:/s/Daniel T. Seamount Commissioner Pub:5/12/2013 AD#10174796 COPIED FROM ORIGINAL FOR SCANNING STATE OF ALASKA NOTICE TO PUBLISHER ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED /� O-3_1 "40 AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF / 1 -0GAA ORDER ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE BOTTOM FOR INVOICE ADDRESS F IAOGCC I AGENCY CONTACT I DATE OF A.O. R 333 West 7t" Avenue. Suite 100 Jody ColombieAril 30. 2013 o Anchorage. AK 99501 PHONE PCN M -1221 DATES ADVERTISEMENT REQUIRED: T Alaska Journal of Commerce ASAP O 301 Arctic Slope Avenue, Suite 350 Anchorage AK 99518 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: AFFIDAVIT OF PUBLICATION United states of America REMINDER State of ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. division. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. Before me, the undersigned, a notary public this day personally appeared ATTACH PROOF OF PUBLICATION HERE. who, being first duly sworn, according to law, says that he/she 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 2011, and thereafter for consecutive days, the last publication appearing on the day of , 2011, 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 2011, Notary public for state of My commission expires _ Singh, Angela K (DOA) From: Fisher, Samantha J (DOA) Sent: Tuesday, April 30, 2013 10:35 AM To: (michaelj.nelson@conocophillips.com); 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 Jarlington@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: Public Hearing Notice CO-13-OS (Trading Bay Unit) Attachments: Public Hearing Notice CO-13-05.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 PeelO Labels Use Avery® Template 51600 ♦ Bend along line to n AVERY@ 5960TM j�Feed Paper expose Pop-up EdgeT"' Judy Stanek Landman Hilcorp Alaska, LLC Post Office Box 244027 Anchorage, AK 99524-4027 Etiquettes faciles a peter i ♦ Repliez a la hachure afin de i - - - :......,..c� �,�.,ce � Sens de .._MC i www.avery.com i_Rnn-rn-AVFRV ! Easy Peel® Labels Use Avery® Template 51600 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Jerry Hodgden Hodgden Oil Company 408 18`n 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 A ICI Bend along line to i Feed Paper ® expose Pop-up EdgeTm David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste. 100 Houston, TX 77056 Richard Neahring NRG Associates President Post Office 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 U AVERY® 5960TM 1 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 ttiquettes faciles a peter ; ® Repliez a la hachure afin de ; www.avery.com Utilisez le aabarit AVERY® 5160® ! ^�5ens deM+ reveler le rebord Pon-unTM ! 1-800-GO-AVERY ! #1 • Hilcorp Alaska, LLC April 1, 2013 Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 71h Avenue, Suite 100 Anchorage, Alaska 99501 M;M RE: Proposed Rules for the Trading Bay Field Dear Commissioner Foerster: APR 0 4 2013 A®GCC 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 Hilcorp Alaska, LLC ("Hilcorp"), as Operator of the Trading Bay Field, respectfully requests the Alaska Oil and Gas Conservation Commission ("AOGCC") amend Conservation Order 93 to allow for unlimited well spacing within the Trading Bay Field through the adoption of the following proposed rule: Tradiny- Bay Field Well Spacing: There shall be no oil or gas well spacing restrictions within the Trading Bay Field, except that: a) 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 b) 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. In addition, Hilcorp respectfully requests AOGCC repeal Rule 9 of Conservation Order 93 in its entirety, and to replace it with the following proposed rule: 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: Trading Bay Field April 1, 2013 Page 2 of 12 BACKGROUND The Trading Bay Field is a non -unitized off -shore field located within Cook Inlet approximately 63 air miles southwest of Anchorage, Alaska., The field's discovery well, Trading Bay 1-A, was drilled from a floating vessel in 1965 and was completed in the Tertiary, Upper Hemlock Poo1.2 Additional exploratory wells were drilled in 1956-1966 to delineate the field limits. The Monopod Platform was completed in October 1966 and has since served as the field's permanent exploration and production platform.' On October 15, 1967, Marathon Oil Company (Marathon), Superior Oil Company, Texaco Inc., and Union Oil Company of California (Union) entered into a Joint Operating Agreement for the Trading Bay pool.4 This agreement superseded the January 1, 1967 and May 11, 1967 agreements, and provided for operation of leased acreage from the State of Alaska. On March 21, 1967, AOGCC granted Union's request for an exception to the 500 foot governmental quarter section boundary offset provision of 11 AAC 2061.1. This exception allowed drilling of a deviated exploratory well (Trading Bay A-3) to conducted a shallow testing program of the undefined "Kenai Sands" from a measured depth between 2,100 and 3,000 feet. See Conservation Order 38. On June 5, 1967, AOGCC granted Union's request for a temporary spacing order to exempt the field from statewide setback requirements from government quarter section lines, to establish a 500 foot setback from lease lines where ownership changes, and to allow up to one well completion within the Hemlock Pool per 80 acre spacing interval. See Conservation Order 41 (also defining the "Hemlock Pools").5 However, the Commission denied Union's request to reduce the standard 1,000 foot minimum distance between producing intervals to 745 feet (equivalent to a 40-acre radius of drainage), noting that, "...insufficient evidence was presented to warrant the completion of a well closer than 1000 feet to any well drilling to or capable of producing from the same pool). Id. ' See Exhibit A (Trading Bay Field Map, attached). The field is comprised of 3,280 acres leased from the State of Alaska (ADL 18731). 2 On June 25, 1965, Union submitted its application for "First Discovery Well Certification" to the Alaska Division of Lands. At the time, the well flowed at 1,670 barrels per day. 3 The Monopod Platform, and associated pipelines and on -shore production facilities were built by Marathon Oil Company and Union Oil Company of California ("Union"). 4 This JOA addressed 160 acres of land leased from the State of Alaska under ADL 18731 and 80 acres of land leased from the State of Alaska under ADL 17597. 5 Conservation Order 41, Rule 1, defined the vertical limits of the Hemlock Pools as "the interval which will correlate with the interval 5380' — 5720' in the Union Oil Company of California #1-A Trading Bay well." Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 3 of 12 Despite this outcome, the expert testimony given by Union's geologist, Mr. Edwin East, at the May 22, 1967 hearing is notable: We fully request reduction of a 1000 foot minimum distance between producing intervals within the interior of the leases in order to more efficiently plan and react to complicated geological block in the Trading Bay Field. We recommend that this minimum distance be reduced to a 745 feet, equivalent to a 40-acre radius of drainage. As demonstrated by the schematic drainage pattern [... ] the ultimate for the field to achieve the most efficient conservation of primary oil eliminating waste in the reservoir is even less than 80-acre spacing. Forty acre spacing will undoubtedly ultimately be needed to drain the reservoir. This faulted field is resulting in total unpredictability of sand horizons because of structural and stratigraphic complications, is out of the normal for which this 1000' minimum distance regulation was designed. We feel, further, that oil program is influenced by the last field date, and the 745 foot distance is more truly representative of a minimum distance in the multi -reservoir field, which can be adhered to within a minimum of administrative action during the drilling of the wells. 6 On July 17, 1967, AOGCC granted a spacing exception to allow Trading Bay A-4 to be directionally drilled to a producing location closer than 500 feet from a section line boundary. See Conservation Order 42 (exception granted due to unpredicted structural conditions which resulted in the producing interval being located within the 500 foot boundary offset area.) On August 3, 1967, AOGCC issued Conservation Order 46, which allowed Trading Bay A-5 to be drilled and completed closer than 500 feet from a section line boundary. On January 23, 1968, Marathon, Superior Oil Company, Texaco, Inc. and Union entered into an amended Joint Operating Agreement to provide for the drilling of a third test well from the Monopod targeting production from the Middle Kenai Formation. The Joint Operating Agreement was subsequently amended on April 28, 1968 to provide for drilling of additional test wells. On January 27, 1971, the AOGCC authorized an exception to Conservation Order 57 to allow the drilling and production of well A-19 within a particular quarter section occupied by 4 other wells. See Conservation Order 86. On February 23, 1968, AOGCC established new rules for the Hemlock Pool and the Middle Kenai Formation. See Conservation Order 57. Rule 1 defined the area to which Field Rules were applicable. 6 May 27, 1967 excerpt from hearing transcript (14:22 — 15:23) (emphasis added). r1 LJ • Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 4 of 12 Rule 2(a) of Conservation Order 57 defined the Hemlock Pool as the interval correlating to 5,380 feet to 5,720 feet in Trading Bay Well 1-A. Rule 2(b) generally defined the Middle Kenai Formation "as the sedimentary section above the Hemlock Formation," more particularly defined the Middle Kenai Oil Pools and Middle Kenai Gas Pools as follows: Each sand in the Middle Kenai Formation in which an oil well may be completed will be an oil pool and each oil pool will be defined individually and all oil pools will be defined collectively as the Middle Kenai Oil Pools. Each sand in the Middle Kenai Formation in which a gas well may be completed will be a gas pool and each gas pool will be defined individually and all gas pools will be defined collectively as the Middle Kenai Gas Pools.7 Rule 3 of Conservation Order 57 allowed for commingling within the borehole of the Middle Kenai Oil Pools and Middle Kenai Gas Pools. However, commingling of both oil and gas from the same wellbore was prohibited, as was commingling of any production from both the Hemlock Pool and Middle Kenai Formation. Rule 4(a) of Conservation Order 57 allowed up to four (4) oil wells per government quarter section within the Hemlock Pool (80-acre spacing). Likewise, Rule 4(b) allowed up to four (4) oil wells and one (1) gas well per government quarter section in the Middle Kenai Pools. No reference was made to any special spacing rules for gas wells within the Hemlock Pool. In the absence of an order by the Commission prescribing a spacing pattern for a pool, applicable statewide spacing requirements apply, 20 AAC 25.055. Rule 5(a) of Conservation Order 57 established setback rules for well completions near lease boundary lines where ownership changes (500' for oil wells, 1,000' for gas wells). Rule 5(b) and (c) prohibited oil wells in the Hemlock and Middle Kenai Pools to be completed more than 660 feet to any other oil wells in the respective pools. Rule 5(c) further established a spacing limitation of 1,000 feet for gas wells in the Middle Kenai Pools. On July 31, 1970, AOGCC held a hearing on Union's proposal to rescind Conservation Order No. 57 and Rule 1(c) of Conservation Order 69, and establish new field -wide rules. See Conservation Order 93. Among other things, the Commission found that "[t]he complicated reservoir configuration and characteristics necessitate careful observation of reservoir performance to achieve maximum oil recovery." Id. (Finding 10, pg. 2). Conservation Order 57, Rule 2(b) (emphasis added). .7 0 Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 5 of 12 Rule 1 of Conservation Order 93 updated legal boundaries of the Trading Bay Field, making minor changes to the area initially defined by Rule 1 of Conservation Order 57 (1968). Rule 2 of Conservation Order 93 established formal definitions for the Trading Bay Middle Kenai "B", "C", "D" and "E' Oil Pools. All oil and gas accumulations associated with each pool were correlated to a certain drilled depth of well A-14. See Rule 2(a)-(d); c.f. Rule 2(b), Conservation Order 57.8 Rule 3 of Conservation Order 93 allowed commingling of production from the Middle "D" and `E" Oil pools, but required that each well be equipped to permit separate testing of production for allocation purposes. Notably, this rule was significantly more restrictive than its predecessor, which allowed for commingling of production at any interval within the Middle Kenai Formation without any specific testing requirements. See Conservation Order 57, Rule 3. Rule 4 of Conservation Order 93 continued to allow up to four (4) oil wells to be completed in each of the defined pools in any governmental quarter section. However, no specific rule was established for gas wells. C.f., Rule 4, Conservation Order 57 (limiting gas wells in the Middle Kenai Gas Pools to one well per governmental quarter section). Likewise, Rule 5 of Conservation Order 93 maintained the 660 foot oil well spacing restriction from Conservation Order 57, but was silent as to offset restrictions for gas wells. On March 11, 1971, AOGCC redefined the Trading Bay Middle Kenai "B" Oil Pools as follows: The Trading Bay Middle Kenai `B" Oil Pools are defined as the accumulations of oil and gas occurring in the intervals which correlate with the interval 3420 feet to 4887 feet drilled depth in the [...] Trading Bay State No. A-23 well.9 8 In relevant part, CO 57, Rule 2(b) stated, "The Middle Kenai Formation is defined as the sedimentary section above the Hemlock Formation. Each sand in the Middle Kenai Formation in which an oil well may be completed will be an oil pool and each oil pool will be defined individually and all oil pools will be defined collectively as the Middle Kenai Oil Pools. Each sand in the Middle Kenai Formation in which a gas well may be completed will be a gas pool and each gas pool will be defined individually, and all gas pools will be defined collectively as the Middle Kenai Gas Pools." 9 Conservation Order 101, Rule 2(a) (formerly, Conservation Order 93, Rule 2(a) ) defined the Middle Kenai `B" Oil Pools as those accumulations of oil and gas occurring in the interval which correlate with the interval of 3200' to 4585.' Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 6 of 12 On August 15, 1972, AOGCC approved commingling in the well bore of production from the Middle Kenai "D" and "E" Oil Pools, but required each well to be equipped to permit separate testing of the "D" and `E" pools for allocation purposes. See Conservation Order 115, Rule 3 (amending Rule 3 of Conservation Order 93). An exception was made for existing wells A-8, A-10, and A-13, each of which were completed so that the Middle Kenai "D" and "E" Oil Pools could be commingled in one tubing string. On April 26, 1973, AOGCC granted a spacing exception for well A-30, which allowed a fifth oil well to be drilled within the Middle Kenai "D" Oil Pool within a particular government quarter section, citing a "need for a replacement withdrawal point to increase the sweep efficiency of the water flood along the northern flank of the "D" Pool structure. See Conservation Order 93.1. On December 8, 1975, AOGCC granted administrative approval to recomplete well A-14 in the Middle Kenai "C" Oil Pool. See Conservation Order 93.2. On May 7, 1976, AOGCC granted administrative approval to recomplete well A-15 in the Trading Bay Middle Kenai "E" and Hemlock Oil Pools and to commingle production from the two pools in the well bore. See Conservation Order 93.3. The order was silent as to the means or methods required for allocation of production. On September 22, 1977, AOGCC granted Union's request to commingle production from the Middle Kenai "D" and Hemlock Pools in well A-2. See Conservation Order 147. Notably, the Commission also found that "[a]pproximately 75% of the ultimate recovery of the Trading Bay Field has been produced to date." Id. (Finding No. 1, pg. 1). On February 22, 1980, AOGCC issued an order to allow commingling of the Middle Kenai "D", "E" and Hemlock Oil Pools so as to "eliminate the need to prematurely abandon wells due to tubing leaks caused by erosion." Conservation Order 162 (quoting Finding No. 2). By doing so, AOGCC cancelled conservation Orders 115 and 147, and amended Rule 3 of Conservation Order 93 to require production to be allocated according to the following procedure: The allocation shall be based upon past history of production from each pool, production well tests, and/or fluid flow surveys run annually or when total produced oil volumes change by as much as 25% over any three month period. The method of production allocated utilized for each commingled well shall be reported monthly ...10 10 Conservation Order 162. Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 7 of 12 In connection with Conservation Order 93, AOGCC also made the following findings: • Approximately 83% of the estimated reserves that can be recovered from the Monopod have been produced. • It is imperative that each wellbore be used to recover the maximum amount of oil. • Many of the wells from the Monopod are dually completed and increased water and sand production from the wells has caused holes in the tubing strings because of erosion. • It has become economically infeasible to work over some of the wells to repair the tubing leaks. • The Trading Bay Rules require separate measurement of production.) 1 On July 29, 1988, AOGCC established that oil bearing stands overlie the Middle Kenai "B" Oil Pool in several fault blocks, but due to insufficient well data, determined that creation of a new separate pool was unnecessary. See Conservation Order 93A (Conclusion No. 1).12 There is currently only one well completed in the Middle Kenai Undefined Oil Pool (Trading Bay Field Well A-21RD), and it has been shut-in since 2007. Although there is no current production from the sands above the Middle Kenai "B" Oil Pool, Hilcorp submits monthly 10-405 Forms to AOGCC for the "Trading Bay Field Undefined Oil" under Pool Code 800148 (aka "TBF Pool A"). 13 Conservation Order 93A is also significant because it further expanded commingling of oil production from all known pools, to wit: Commingling in the wellbore of produced fluids from the Trading bay Middle Kenai B, C, D, E and Hemlock Oil Pools, and those oil bearing sands which overlie the Middle Kenai "B" Oil Pool is permitted. Total well production need not be allocated to each pool and productive sand. (emphasis added). "Finding Nos. 3-7, Conservation Order 162 (February 22, 1980). 12 Conservation Order 93A cancelled Conservation Order162 and amended Rule 3 of Conservation Order 93 to allow commingling of production from the Middle Kenai B, C , D, E and Hemlock Oil pools, including "those oil bearing sands which overlie the Middle Kenai `B" Oil Pool." 13 See, e.g., Hilcorp's December 13, 2012 Monthly Production Report for Trading Bay Field TBF Monopod, Undefined Oil for the Month of November 2012 (Pool Code 800148). 0 • Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 8 of 12 In relevant part, AOGCC supported this Conservation Order 93A with the following findings and conclusions: • "Allocation of produced fluids to their respective pools is no longer of any benefit to reservoir management, ultimate recovery, or the prevention of waste."14 • "Commingling completions will allow through tubing profile modifications, stimulation and coiled tubing workover operation of all pools present"15 • "Commingled completions are also expected to benefit artificial lift."" • "Well life expectancy is extended which should result in the increased ultimate recovery of hydrocarbons." 1 • "Wellbore commingling of produced fluids from the Trading Bay Middle Kenai Oil Pool, Hemlock Oil Pool, and oil bearing sands above the Middle Kenai "B" Oil Pool will prevent waste, enhance field ultimate recovery, and does not jeopardize the correlative rights of all owners within the field." 1 8Id On May 7, 1990, AOGCC further amended Conservation Order 93 to eliminate well spacing restrictions below the Hemlock Oil Pool, and expanded rules governing commingling. Pursuant to Conservation Order 252, the Commission amended Conservation Order 93, by adding Rule 13: 1. Spacing rules for oil bearing sands below Hemlock Oil Pool. Unlimited well spacing is allowed for wells drilled to oil bearing sands underlying the Hemlock oil pool, except that no well may be open to produce these sands closer then 500 feet to a lease boundary marking a change in ownership.19 14 Conservation Order 93A, Finding 3 " Id. at Finding 6. 16 Id. at Finding 7. 17 Id. at Finding 8. 18 Id. at Conclusion 4. 19 Conservation Order 252, Rule 1 (amending Conservation Order 93 through addition of new rule 13). Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 9 of 12 2. Rule 3 of Conservation Order 93 (as amended by C.O. 93A) is further amended to read: Commingling in the wellbore of produced fluids from the Trading Bay Middle Kenai B, C, D, E, and Hemlock oil pools, and those oil bearing sands which overlie the Middle Kenai "B" oil pool and those oil bearing sands which underlie the Hemlock Oil pool is permitted. Total well production need not be allocated to each pool and productive sand. On March 21, 1990, Union submitted an application requesting new spacing rules for the development of oil bearing sands overlying the Middle Kenai "B" Oil Pool in the Trading Bay Field. Following a hearing, AOGCC issued Conservation Order 250 on May 7, 1990, which in relevant part concluded: 1. Unlimited well spacing in the oil bearing sand overlying the Middle Kenai `B' oil pool will benefit reservoir management, improve ultimate recovery and prevent waste. 2. Correlative rights will be protected if the wellbore is to open to production within 500 feet of a lease boundary marking a change in ownership. Based on these findings, AOGCC amended Rule 93 by adding the following new rule: Rule 12. Spacing rules for shallow oil bearing,sands. ands. Unlimited well spacing is allowed for wells drilled to oil bearing sand overlying the [undefined] Middle Kenai "B" oil pool, except that no well may be open to producing these sands closer than 500 feet to a lease boundary marking a change in ownership. On December 3, 1990, Union requested revision of Rule 6(b) of Conservation order 93 to allow alternative completion methods.20 Following a hearing, AOGCC issued Conservation Order 226 which allowed AOGCC to "administratively approve exceptions to Rule 6(b) of CO 93 to allow alternative completion methods where appropriate." On April 4, 1997, AOGCC granted a spacing exception to allow Trading Bay Field A-27 RD to be drilled to a producing location closer than 500 feet from a section line boundary. See Conservation Order 392 (concluding that said spacing exception "will not result in waste nor jeopardize correlative rights.") 20 Conservation Order Rule 6(b) requires production casing to be landed through the completion zone and cemented to cover at least 500 feet above each potentially productive sand interval. • Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 10 of 12 On January 15, 1998, AOGCC denied Marathon's request to exempt the Trading Bay Field from the requirements of 20 AAC 25.280(a). See Conservation Order 408. On December 29, 1998, AOGCC granted Union's request for an identical order, finding that "[e]liminating the requirements of 20 AAC 25.280(a) and (b) for all development wells [...] will reduce filing and result in administrative efficiencies for both the operator and the AOGCC."21 In April 2009, Union requested and obtained a temporary suspension of production and operations due to the volcanic eruption of Mt. Redoubt and the closure of Cook Inlet Pipe Line's Drift River Terminal. Platform production resumed in mid -August 2009, but on a limited basis due to reduction of storage capacity at the Drift River Terminal. In 2012, Hilcorp acquired Union Oil Company of California's 53.2% working interest and Pacific Energy Alaska Operating, LLC 46.8% working interest in all production from the Monopod Platform. In February 2013, Hilcorp acquired Marathon's interest in the North Trading Bay Unit. As a result, Hilcorp is the exclusive working interest owner and operator in the Trading Bay Field. DISCUSSION Hilcorp's proposed rules are designed to prevent waste, protect correlative rights and improve the ultimate recovery of remaining hydrocarbons throughout the Trading Bay field. They are also designed to reduce the administrative burdens on both Hilcorp and AOGCC staff. Hilcorp's proposed rules are also timely: no significant changes to the Trading Bay Field's pool rules have been undertaken since 1990. Since that time, production from the field has been continuous, but in steady decline. There are approximately 28 wells on the Monopod Platform, 17 of which are producing.22 During the month of November 2012, these wells collectively produced 19,683 barrels of oil and 7,842 MCF gas. Id. By comparison, the Trading Bay Field produced 4,309,847 barrels of oil and 1,174,704 MCF gas from only 10 wells during calendar year of 1969.23 Hilcorp purchased these legacy assets with the intent to maximize the recovery of remaining hydrocarbons. This requires implementation of a comprehensive capital workover program designed to: • repair broken injection wells 21 Conservation Order 351, Rule 1. 22 See generally, Hilcorp's Monthly Production Report to AOGCC dated December 12, 2012. 23 See AOGCC Production History for Trading bay. G-NE HeMLK-NE AOGCC (last checked January 17, 2013). Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 11 of 12 • return shut-in production wells to service • optimize existing well completions • increase water injection and reservoir throughput, • pursue pursuing stimulation opportunities, and • identify, then execute new drilling projects During 2013, Hilcorp anticipates performing of approximately seven rig workovers and one new drill projects on the Monopod Platform, each targeting increased oil and gas production from the Trading Bay Field. 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 15 workovers and four new drill projects within the Trading Bay Unit. Hilcorp cannot efficiently produce remaining reserves under AOGCC's current well spacing rules and sundry application procedures. While existing rules and procedures may have adequately protected correlative rights and prevented waste during the field's initial development, they are not applicable to the enhanced recovery effort necessary to produce remaining hydrocarbon reserves at the Trading Bay Field. As discussed above, Hilcorp, as Operator of the Monopod Platform, is the sole working interest owner of the Trading Bay Field. The State of Alaska is the sole royalty owner, and the rate is uniform throughout the entire field (12.5%). In the absence of any competing working ownership interests, well spacing and density rules are no longer necessary to prevent waste or protect correlative rights. Adjoining owners, operators, and landowners will be adequately protected by standardized off -set measures. Moreover, approval of the proposed rules will reduce the administrative burden of both Hilcorp and AOGCC staff. For example, elimination of well spacing restrictions will exempt Hilcorp, under current AOGCC policy, to accompany each Application for Sundry Approval (10-403 Form) with a customized map illustrating the location and measured distance of a proposed perforation relative to other well completions in the same pool. Such submittals are administratively burdensome and are unnecessary to protect correlative rights, particularly in cases where a well is simply being optimized or reactivated within the same pool. This is particularly true in fields, such as the Trading Bay Field, where commingling of production (within the well bore) from multiple pools is standard industry practice — regardless of the perforation interval or measured depth. 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 and underswept areas that cannot be reached by wells conforming to current spacing restrictions. Elimination of all spacing requirements will help to maximize recovery from these Hilcorp Alaska, LLC Proposed Rules re: Trading Bay Field April 1, 2013 Page 12 of 12 bypassed pools, while allowing for continued production from established development wells. The purpose of proposed new administrative rules is self-evident. The goal is simply to afford both AOGCC and Hilcorp with the flexibility required to extend this aging field's capacity to produce in a manner that is technically sound, yet administratively efficient. Hilcorp would be pleased to schedule a technical meeting with AOGCC staff to provide additional information in support of this proposal. Should you have any other questions regarding this proposal, please do not hesitate to contact the undersigned at 777-8341. Sincerely, Judy Stane , Landman Hilcorp Alaska, LLC cc: State of Alaska, Department of Natural Resources, Division of Oil and Gas RECEIVED JUN 13 2013 AOGGC VERIFICATION OF APPLICATION AMENDING CO 93 TRADING BAY FIELD COOK INLET, ALASKA I, Judy Stanek, Landman, Hilcorp Alaska, LLC, do hereby verify the following: I am acquainted with the application submitted on April 1, 2013, proposing to change the Trading Bay Field Rules. I have reviewed the application submitted for amending Conservation Order 93 and all facts therein are true. DATED at Anchorage, Alaska, this 11th day of June, 2013. C J y Stane Landman STATE OF ALASKA THIRD JUDICIAL DISTRICT SUBSCRIBED TO AND SWORN before me this 11th day of June, 2013. ?:�� YM4=� . NOT Y PUBLIC IN AND FOR THE STATE OF ALASKA My commission expires: STATE OF ALASKA NOTARY PUBLIC Zelma M. Clarke qu W Can hWon E*4ms Nov 10, 2016