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212-054
AOGCC Memorandum Date: 7/27/2017 To: File; AOGCC Docket 15-38 From: Jim Regg, Petroleum Engineer Subject: Closeout — Missing Outer Annulus Pressure Gauges Deep Creek Unit Happy Valley B-14 (PTD 2120540) Deep Creek Unit Happy Valley B-15 (PTD 2121320) Nikolaevsk Red #1 (PTD 2040840) Hilcorp Alaska LLC (Hilcorp) was sent a letter dated December 21, 2015 advising that AOGCC inspections at the Happy Valley and Nikoleaysk production sites found 3 wells that were not equipped with the required outer annulus pressure gauges. Instructions included in the letters required Hilcorp to describe what has been or would be done to correct and prevent recurrence. AOGCC also required with the response a list of Hilcorp-operated wells that do not have the required pressure gauges as outlined in 20 AAC 25. 200(c). Hilcorp responded on January 22, 2016 (after being granted an extension on January 8, 2016) with the required information. As follow-up to Hilcorp's letter, AOGCC performed inspections of the wells noted as not equipped with the required gauges for monitoring annulus pressures. Corrective actions have been implemented as described. AOGCC continues to monitor all wells during site visits for compliance with the pressure gauge requirements. This docket (OTH 15-38) is considered closed with Hilcorp's response and AOGCC inspections. nHilcorp Alaska, LLC January 22, 2016 Cathy P. Foerster Chair, Commissioner 'RECEIVED JAN 2 2 2010 AOGCC Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, AK 99501-3572 Re: Docket No. OTH-15-038 Missing Outer Annulus Pressure Gauges Deep Creek Unit Happy Valley B-14 (PTD 2120540) Deep Creek Unit Happy Valley B-15 (PTD 2121320) Nikolaevsk Red #1 (PTD 2040840) Dear Chair Foerster: Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 100 Anchorage, AK 99503 We write to provide additional information concerning our review of all Hilcorp Alaska -operated wells. On December 21, 2015, you wrote stating that safety valve system inspections performed by an AOGCC Inspector at the Happy Valley B -Pad and the Nikolaevsk Pad revealed three wells not equipped with pressure gauges to monitor the outer annuli. We responded by letter dated January 8, 2016, noting that a gauge had been installed on well Nikolaevsk Red #1 (PTD 2040840), the Happy Valley wells B-14 and B-15 did not require outer annulus pressure gauges as the wells were constructed with only a tubing -casing annulus, and requesting additional time to complete the review directed in your December 21 letter. You replied by letter dated January 11, 2016, providing additional time and requiring a response by January 22, 2016. This letter is our response. We appreciate the extension of time to complete a thorough review of Hilcorp Alaska -operated wells. The additional time was necessary so well schematics and well head designs could be reviewed to ensure all proper annuli had valves and gauges, based on design, and not just what was visible on the well. Our review found that all wells operated by Hilcorp Alaska had the required annuli valves. The review identified the following wells did not have the required annuli gauges on the wells (see attached photos): Well PTD # Gauge Status Correction Ivan River 41-01 192-109 Missing OOA Gauge OCA Gauge Installed 01/12/16 Nikolaevsk Red #2 204-084 Missing OA Gauge OA Gauge Installed 12/29/2015 Swanson River 12-15 160-022 Missing OA Gauge OA Gauge Installed 01/14/2016 Swanson River 32A-15 194-084 Missing OA Gauge (Note: 2 IA Gauges Were Installed) OA valve was below mud in cellar. The cellar bottom needed to be thawed to be able to suck out mud below valves to install gauge. OA Gauge will be installed before 02/01/16. Cathy P. Foerster Docket Number: OTH-15-038 January 22, 2015 Page 2 of 2 The monobore wells that have only one monitorable casing have only one gauge. The following fields have active monobores: Fields Monobore Count eek q oop 2 ley 3 "River2l Field 5 2 iver 2 North Slope Fields Monobore Count Milne Point 36 During this review of all wellheads in Hilcorp Alaska's inventory we identified a knowledge deficiency with some of the field operations staff where some did not fully understand wellhead design below the master valve. We are currently developing a general wellhead training module that will become part of the field operator training package for the Alaska employees. We expect this to be completed in early March and will be reviewed with all Hilcorp Alaska field operators. Hilcorp is available at the commission's convenience to inspect the wells that were missing the correct gauges in Swanson River, Nikolaevsk Field and Ivan River, to close this matter. Should you have any additional questions, please contact Chad Helgeson (777-8405). Sincerely, HILCORP ALASKA, LLC David ilkins Senior Vice President Hilcorp Alaska, LLC Attachments — Ivan River 41-01 Casing Gauge Photos Nikolaevsk Red #2 Casing Gauge Photos Swanson River 12-15 Casing Gauge Photos Swanson River 32A-15 Casing Gauge Photos cc: Jim Regg -AOGCC Chet Starke] - Hilcorp Larry Greenstein - Hilcorp David S Wilkins -Hilcorp Bo York - Hilcorp Stan Golis — Hilcorp Mike Dunn - Hilcorp AOGCC Docket No. OTH-15-038 Missing Outer Annulus Pressure Gauges Corrective Actions Ivan River 41-01 Outer Outer Annulus gauge Nikolaevsk Red #2 Outer Annulus gauge Swanson River 12-15 (Tree removed above Master Valve for Drilling Activity) Swanson River 32A-15 (Tree Removed for Drilling Activity). 2 gauges installed on IA valves, and OA valve is below the mud line in the cellar (found during wellhead and well schematic review). THE STATE °fALASKA Z-1 GOVERNOR BILL WALKER Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC P.O. Box 244027 Anchorage, AK 99524-4027 Alaska Oil and Gas Conservation Commission January 8, 2016 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 0640 0006 0779 5852 Re: Docket No. OTH-15-038 Missing Outer Annulus Pressure Gauges Deep Creek Unit Happy Valley B-14 (PTD 2120540) Deep Creek Unit Happy Valley B-15 (PTD 2121320) Nikolaevsk Red #1 (PTD 2040840) Dear Mr. Helgeson: 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.00gcc.olasko.gov The Alaska Oil and Gas Conservation Commission (AOGCC) received Hilcorp Alaska LLC (Hilcorp)'s response to the notice of violation dated December 21, 2105. Information included well schematics for each of the wells that were observed to be missing outer annulus pressure gauges. In the case of Happy Valley wells B-14 and B-15, AOGCC agrees with Hilcorp that the outer annulus pressure gauges would not be required based on the well schematics provided (wells are constructed with only a tubing -casing annulus). Hilcorp confirms that the required pressure gauge has been installed on the outer annulus of Nikoleaysk Red #1 but that has yet to be confirmed by AOGCC. Hilcorp has requested an extension until January 22, 2016 to complete a review of all Hilcorp- operated wells and provide a timeline for installing the required annulus valves on those wells that are not in compliance with 20 AAC 25.200(c). Hilcorp's requested extension is APPROVED. The AOGCC will not close this enforcement action until the required information has been provided by Hilcorp and an AOGCC Inspector has been able to confirm compliance with 20 AAC 25.200(c) for all wells identified as missing the required annulus valves and pressure gauges. Questions regarding this letter should be directed to Jim Regg at 907-793-1236. Docket No. OTH-15-038 Notice of Violation January 8, 2016 Page 2 of 2 cc: AOGCC Inspectors C. Helgeson (Hilcorp, by email) Sincerely, Cathy P. Foerster Chair, Commissioner APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to out 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. Carlisle, Samantha J (DOA) From: Carlisle, Samantha J (DOA) Sent: Friday, January 08, 2016 2:20 PM To: chelgeson@hilcorp,com'; DOA AOGCC Prudhoe Bay Cc: David Wilkins; Regg, James B (DOA) Subject: OTH-15-038 Attachments: Hilcorp OTH-15-038 time extension.pdf Please see attached regarding time extension request for docket number OTH-15-038. Thank you, Samantha Carlisle Ir; ecutive Secretary lil Aloskdi Oil and Gas Conservation Commission ',43 \% est 7n Avenue nthorag, Ah997) {907) 79�-1223 CONFIDENTIALITYNOTICF This e-mail message, including any attachments, contains information from the Alaska Ofl and Gas Conservation Commission (A0GCC), State of Alaska and is for the side use of the intended recipient(s). It mal contain confidential and/or pritileged. information. The unauthorized review, use or disclosure of such information may violate state or federal lain If you are an unintended recipient of this e-mail, please delete it, withotd first saving or fOrwarding it, and, so that the AOGCC, is aware Of the mistake in sending it to you, contact Samantha C ulfsle at (9117) 793-122.3 or SeinanthiCarlislc(ulalaska.gov. 11-, r` - r Cl O O I] O S O Lrl rl C3 f iv -11-111; 1 till"i`V" Plliii`lit V ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: R Mr. David Wilkins Sr. Vice President Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99524-4027 LMULI elz-VyJFE'U=OCv A. Signature - ❑ Agent ❑ Addressee B. Received by (Printed NarQW C. Date of Delivery fferant from Rem 1? U Yes Y adtlress below: ❑ No AN 13 2016 ostal Service'" 0 Adult Signature 0 Registered TIFIED MAIL® RECEIPT I'll I'III III F Mail Only I IIIIIIII I II III tic Restricted! Delivery ❑ Mail Restricted Il I IIIIii 9401 0049 5071 3201 54 0 drt111ed Meu® OCertifiedMail Restricted Delivery Delivery • if DeliveryRegistered ❑RetumRec Regal for Memfiand ery information, visit our website at www.usPs.cOm°- J�oqp,aer� qa�) Nurltleer ler�ti R rY CPsIF'SF_ f - ,il ❑Signature Confirmation _,?,.,Article 7T01F5 X779 5852 iil Restricted Delivery Restricted Delivery . 13 . . PB'Form�'3 �"f'I,+�b}'�"265�N-- d70�b53 11-, r` - r Cl O O I] O S O Lrl rl C3 f iv -11-111; 1 till"i`V" Plliii`lit V ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: R Mr. David Wilkins Sr. Vice President Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99524-4027 LMULI elz-VyJFE'U=OCv A. Signature - ❑ Agent ❑ Addressee B. Received by (Printed NarQW C. Date of Delivery fferant from Rem 1? U Yes Y adtlress below: ❑ No AN 13 2016 3. Service Type ❑ Priority Mail Express® 0 Adult Signature 0 Registered I'll I'III III Il II VIII I IIIIIIII I II III Restricted! Delivery ❑ Mail Restricted Il I IIIIii 9401 0049 5071 3201 54 0 drt111ed Meu® OCertifiedMail Restricted Delivery Delivery • if DeliveryRegistered ❑RetumRec Regal for Memfiand �r590 ❑ Collect on ❑ Collect on Delivery Restricted Delivery 0 Signature Confirm itionT" J�oqp,aer� qa�) Nurltleer ler�ti R rY CPsIF'SF_ f - ,il ❑Signature Confirmation _,?,.,Article 7T01F5 X779 5852 iil Restricted Delivery Restricted Delivery . 13 . . PB'Form�'3 �"f'I,+�b}'�"265�N-- d70�b53 Domestic Return Receipt nHilcorp Alaska, LLC January 5, 2016 RECEIVED JAN 0 5 2016 AOGCC Cathy P. Foerster Chair, Commissioner Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, AK 99501-3572 Re: Docket No. OTH-15-038 Missing Outer annulus Pressure gauges Deep Creek Unit Happy Valley B-14 (PTD 2120540) Deep Creek Unit Happy Valley B-15 (PTD 21213 20) Nikolaevsk Red # 1 (PTD 2040840) Dear Chair Foerster: Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 100 Anchorage, AK 99503 We respond to the Alaska Oil and Gas Conservation Commission's (AOGCC's) letter dated December 21, 2015, in regards to Missing Outer Annulus Pressure Gauges. The Happy Valley 14 & 15 wells do not have a casing -casing (outer) annuli and therefore did not have a gauge installed in the conductor valve. This was communicated to the AOGCC inspector by the Hilcorp Alaska LLC (Hilcorp) representative during the visit in October. Attached are the current wellhead schematics, which show the bottom valve/flange is mounted to the conductor (10-3/4" Pipe). These conductors were driven into the ground and are not designed to hold pressure. The conductors are designed as a support during drilling, to flowback returns while drilling and cementing of the surface casing, and prevent collapse of the loose soil near the surface. The Nikolaevsk Red #1 well did not have a gauge in the casing -casing annulus. Attached is a picture of the casing -casing valve that was not plugged, and until a full wellhead review was completed on this well, it was not clear by the Hilcorp operators that this was a casing -casing valve that would monitor the 9-5/8"x7" annulus of this well. A gauge has been installed on the valve and is being monitored by operations. There are many wells operated by Hilcorp that are monobore completions and do not have casing -casing annuli. We are currently conducting a review of all the wells and wellhead designs to understand which wells do not have an outer annulus and therefore may not comply with 20 AAC 25.200(c). A preliminary list of wells that have this configuration are: Happy Valley #9, 14, 15 & 17, KBU 41-07X & 31-06X, Falls Creek 5, Paxton 5, Beaver Creek 23, 24 & 25, SRU 213-15 & 213B-15. Cathy P. Foerster Docket Number: OTH-15-032 January 5, 2016 Page 2 of 2 Hilcorp is requesting an extension until January 22nd to complete a review of the entire Hilcorp Alaska well inventory and provide a list to the AOGCC of wells that do not have casing -casing annuli. In the last two weeks of field reviews only one other well (Shut-in Nikolaevsk Red #2) with a casing -casing annuli was found that did not have a gauge on casing -casing annuli. Please let us know if this additional time will be allowed to complete this list of wells that do not meet 20 AAC 25.200(C). Should you have any additional questions, please contact Chad Helgeson (777-8405 or chelgeson@hilcorp.com). Sincerely, HILCORPP ALASKA, LLC David Wilkins Senior Vice President Hilcorp Alaska, LLC Attachments — Happy Valley B #14 Wellhead Schematic & Wellbore Schematic Happy Valley B #15 Wellhead Schematic & Wellbore Schematic Nikolaevsk Red #1 casing photo, Wellhead Schematic & Wellbore Schematic cc: Jim Regg — AOGCC Chet Starkel — Hilcorp Larry Greenstein — Hilcorp David S Wilkins — Hilcorp Bo York - Hilcorp Stan Golis — Hilcorp Mike Dunn — Hilcorp Happy Valley HV #14 Current 01/05/2016 Happy Valley Tubing hanger, FMC -TC -EN - HV #14 CL, 7 X 2 7/8 IBT lift and susp, 10%X75/8X5XX w/2%:Type HBPV,5'/< 23/8 Extended neck, Y4 control line port, Alloy material BHTA, Bowen, 2 9/16 5M X 2.5 Bowen quick union Valve, Swab, WKM-M, 2 9/16 5M FE, HWO, DD trim Cross, stdd, 2 9/16 SM X 3 1/8 SM Valve, Master, WKM-M, 2 9/16 5M FE, HWO, DO trim Valve, Master, WKM-M, 2 9/16 SM FE, HWO, DD trim Happy Valley HV #14 10'/<X75/8X51/2 BHTA, OTIS, 5 1/8 5M X 9 y: Otis quick union top Valve, Swab, WKM-M, 5 1/8 5M FE, HWO, DD trim Valve, Upper Master WKM-M, 5 1/8 5M FE, HWO, DD trim Valva mpctpr WKM-M. Happy Valley HV #15 01/05/25/2 016 Tubing hanger, SMB -22 ported, 11 X 5 Y2 LC susp X 5.875-4 stub acme left hand lift, 5" H BPV, 4.930" min bore, 7" extended neck 10-3/4" Happy Valley Well: HVB-15 SCHEMATIC As Completed 10/26/12 Hilcurp Alee4e, LLC Ground Elev: 593' Above MSL KB -THF: 14.7' 7 -5/8" I Beluga A Beluga C Beluga D Beluga D 2�. Beluga E Beluga F 4. ' Beluga H Beluga I 5-1/2" Argo -VA TO = 3,069' MD / 2,558' TVD PBTD: 2,898' MD / 2,431' TVD r A c i ra a n F T A 11 Size Type Wt Grade Conn. ID Top Btm 10-3/4" 7-5/8" 5-1/2" Conductor Prod Casing Prod Liner 1 45.5 29.7 17 L-80 L-80 L-80 I - Buttress VAM STL 9.95 6.875 4.892 Surf Surf 924' 98' 1,139' 3,056' 3/13/130 en TUBING DETAIL 2,432' 2,074 2,079' 5-1/2" Production 17 L-80 VAM STI. 4.892 Surf 924' IFWFI RV DFTAIL No. DepthNIDOD*Fihing Btm(MD) Top(TVD) Btm(TVD) angere SPF Datef�xaius Plugerford 2,360' Pulling Toolable 2,026' 2,036' Plug w/ 2.875" eck PERFORATION DETAIL Updated by DMA 11/24/14 Top(MD) Btm(MD) Top(TVD) Btm(TVD) Feet SPF Datef�xaius 2,360' 2,374' 2,026' 2,036' 14 6 3/13/130 en 2,425' 2,432' 2,074 2,079' 7 6 3/13/13Open 2,467' 2,487' 2,105' 2,124 20 6 10/26 12Open D Oug 2,472' 2,492' 2,109' 2,123' 20 6 12/15/12OpenE 2,530' 2,535' 2,152' 2,156' 5 6 12/15/12olatedF 2,600' 2,612' 2,205' 2,214' 12 6 12/15/12olated H 2,812' 2,822' 2,366' 2,373' 1 6 12/15/12 Isolated 1 2,844' 2,848 2,390' 2,393' 4 6 12/15/12 Isolated Updated by DMA 11/24/14 Nikolaevsk Red #1 wellhead Photo December 91b Casing -casing valve Red Pad Red #1 16 x95/8 x 7 x 3 % BHTA, Bowen, 3 1/8 5M FE x 2 % Bowen union top Valve, Swab, CIW-FL, 3 1/8 5M FE, HWO, AA trim Valve, Upper Master, CIW-FL, 3 1/8 SM FE, HWO, AA trim Valve, Master, CIW-FL, 3 1/8 5M FE, HWO, AA trim Red Pad Red #1 01/05/2016 Tubing hanger, CIW-CXS, 11 X 3 % IST lift and cusp, w/ 3" type H BPV profile, Y" non continuous control line, 9 X EN API: 50-231-20021 AOGCC: 204-084 352' FNL & 392' FWL Sec. 8, T4S, R13W, SM THF: 17.22' lift threads - 3'/z' IBT cxn-2%"Bowen cxn Production Tubing: 3%", 9.2 ppf, L-80, IBT to 4412' - Annulus loaded with 7.4 ppg base oil Chemical injection sidepocket mandrel at 2502' (Macro SFO -1C-1) with 1/4", 0.049" wall SS chemical injection line Locator sub @4378' Baker 80-40 seal assembly 13' of 4.00" OD seals Muleshoe at 4412' Plugs: - EZ -Drill COP at 9192' capped with 40' of cement (7/23/04) - EZ -Drill CIBP at 10420'(7/19/04) Directional Data: max hole angle = 29.1 deg KOP = 4800' max dogleg <3 deg/100' Well Name: Red #1 Field: Wildcat State: Alaska Conductor: 16", 82.77 ppf, K-55 to 50' Surface Casino: 95L", 47 ppf, BTC to 1790' Cmnt with 110 bbl of 12.8 ppg lead and 45 bbl of 15.8 ppg tail Intermediate Casino: 7", 29 ppf, L-80. BTCto 4601' Cmnt with 53 bbl of 12.8 ppg "G" lead lead and 30 bbl of 15.8 ppg "G" tail. -??: 8768'- 8777' (6 spf, 8/3/04) -65: 8795'- 8820'(3 spf, 7/23/04) -??: 9056'- 9076'(6 spf, 8/3/04) -81: 9210'- 9280'(3 spf, 7/19/04) -130:10565'- 10610'(3 spf, 7/17/04) Red -1 schematic 8-4-2004.xls Updated by: JGE Production Liner ' 9.2 ppf, L-80 IBT J liner from 437979' - 10,930' Baker ZXP packer, Flexlock liner hanger & 80-40 sealbore at 4373' PBTD = 9152' TD= 12,458' Cemented with 209 bbl of 12.0 ppg Litecrete Red -1 schematic 8-4-2004.xls Updated by: JGE THE STATE AT® u GOVERNOR BILL WALKER Mr. Chad Helgeson Kenai Operations Manager Hilcorp Alaska, LLC P.O. Box 244027 Anchorage, AK 99524-4027 Alaska Gil and Gas Conservation Commission December 21, 2015 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 0640 0006 0779 5876 Re: Docket Number: OTH-15-038 Missing Outer Annulus Pressure Gauges Deep Creek Unit Happy Valley B-14 (PTD 2120540) Deep Creek Unit Happy Valley B-15 (PTD 2121320) Nikolaevsk Red #1 (PTD 2040840) Dear Mr. Helgeson: 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov On October 31, 2015 an Alaska Oil and Gas Conservation Commission (AOGCC) Inspector accompanied by a Hilcorp Alaska LLC (Hilcorp) representative performed well safety valve system inspections at the Happy Valley B -pad and Nikolaevsk pad. Three wells — Happy Valley B-14, Happy Valley B-15 and Nikolaevsk Red #1 were not equipped with pressure gauges to monitor the outer annuli. AOGCC performed follow-up inspections at Red #1 on December 9, 2015 and at Happy Valley B-14 and B-15 on December 12, 2015 to determine if the outer annulus pressure gauge issues were resolved. The three wells were again observed to be missing outer annulus pressure gauges. Regulation 20 AAC 25.200(c) requires wellhead equipment to include appropriate gauges and valves installed in the tubing, casing -tubing (inner) annulus, and casing -casing (outer) annuli. The facts reported by the AOGCC Inspectors indicate a failure to equip Happy Valley B-14, Happy Valley B-15, and Nikolaevsk Red #1 with the required pressure gauges. Within 14 days of receipt of this letter, you are requested to provide for AOGCC review and approval a written plan describing what has been or will be done in the future to prevent its recurrence at Hilcorp- operated fields in Alaska. Included in the requested response should be a list of Hilcorp-operated wells that do not have the required pressure gauges as outlined in 20 AAC 25.200(c), and the timeline for installing the required valves. Failure to comply with this request will be an additional violation. Notice of Violation Docket Number: OTH-15-038 December 21, 2015 Page 2 of 2 The AOGCC reserves the right to pursue additional enforcement action in connection with missing outer annulus pressure gauges on the three listed wells. Questions regarding this letter should be directed to Jim Regg at 907-793-1236. cc: AOGCC Inspectors Sincerely, Cathy. . Foerster Chair, Commissioner AND As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to not 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 Er Certified Mail Fe f�- C Extra rvicea B Fees (ooeck—eearea.Wp'°Pr'°�1 ❑ Rewm Recellrt(fiertlCmPv) E Postmad( -� ❑Return Receipt (elemmnic) E O Hare p CertMeE Mail ResMcteE Delivery S � r-Mun'9natum ReQUIreE pnaun'.naeae Resermted oeiived E 173 Postage S' 'D 0 Mr. Chad Helgeson un Kenai Operations Manager r -R Hilcorp Alaska, LLC � p.0. Box 244027 Anchorage, AK 99524-4027 ■ Complete items t, z, arra -' ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back the mailpiece. or on the front if space per Mr. Chad Helgeson -_ U t L? U J Kenai Operations Manager y Hilcorp Alaska, LLC Jam, ervice`M P.O. Bax 244027 AOG Anchorage, AK 99524-4027 ❑ priority Mail EePreaa® F MAIL° RECEIPT p Registered Man - totted III'III'I y IIII VIII VIII III IIIIII website at www.usps.com®. IIIIIIIIIIIIII tion, visit our Mail Rstu Receptioorr @'Delivery 523140 9590 9403 0910 5223❑ El certified Restricted Deliv Coned on Delivery Er Certified Mail Fe f�- C Extra rvicea B Fees (ooeck—eearea.Wp'°Pr'°�1 ❑ Rewm Recellrt(fiertlCmPv) E Postmad( -� ❑Return Receipt (elemmnic) E O Hare p CertMeE Mail ResMcteE Delivery S � r-Mun'9natum ReQUIreE pnaun'.naeae Resermted oeiived E 173 Postage S' 'D 0 Mr. Chad Helgeson un Kenai Operations Manager r -R Hilcorp Alaska, LLC � p.0. Box 244027 Anchorage, AK 99524-4027 ■ Complete items t, z, arra -' ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back the mailpiece. or on the front if space per Mr. Chad Helgeson -_ U t L? U J Kenai Operations Manager y Hilcorp Alaska, LLC Jam, P.O. Bax 244027 AOG Anchorage, AK 99524-4027 ❑ priority Mail EePreaa® ...e TYPe as nery p Registered Man - totted III'III'I IIII VIII VIII III IIIIII IIIIIIIIIIIIII Mail Rstu Receptioorr @'Delivery 523140 9590 9403 0910 5223❑ El certified Restricted Deliv Coned on Delivery Merchandise ❑ Signature Confirmation" ❑ Called on Delivery Restricted Delivery 0 Signature Confirmation 2. Article Number- N� 7 7 9 5 87 6 rtsd Mail �rad � RedrewDelivery ResVicted Delivery 7015 LJ 6 4 0 O O 6 Domestic Return Receipt PS Form 3811, July 2015 PSN 7530-02-000-9053 • • AOGCC Memorandum Date: 7/27/2017 To: File; AOGCC Docket 15-38 ':� 7(Z-7' 1 From: Jim Regg, Petroleum Engineer Subject: • -• —Missing Outer Annulus Pressure Gauges Dee• Creek Unit Ha•• alle B-14 PTD 21 140 Deep Creek snit Happy Valley B-15 (PTD 2121320) Nikolaevsk Red #1 (PTD 2040840) Hilcorp Alaska LLC (Hilcorp) was sent a letter dated December 21, 2015 advising that AOGCC inspections at the Happy Valley and Nikoleaysk production sites found 3 wells that were not equipped with the required outer annulus pressure gauges. Instructions included in the letters required Hilcorp to describe what has been or would be done to correct and prevent recurrence. AOGCC also required with the response a list of Hilcorp-operated wells that do not have the required pressure gauges as outlined in 20 AAC 25. 200(c). Hilcorp responded on January 22, 2016 (after being granted an extension on January 8, 2016) with the required information. As follow-up to Hilcorp's letter, AOGCC performed inspections of the wells noted as not equipped with the required gauges for monitoring annulus pressures. Corrective actions have been implemented as described. AOGCC continues to monitor all wells during site visits for compliance with the pressure gauge requirements. This docket (OTH 15-38) is considered closed with Hilcorp's response and AOGCC inspections. SCANNED AUG 0 4 201Z • 1110 , ill Hilcorp Alaska,LLC _ , Post Office Box 244027 Anchorage,AK 99524-4027 IAN 2 2 ?MI6 3800 Centerpoint Drive Suite 100 January 22,2016 A1k,/ . Anchorage,AK 99503 Cathy P. Foerster ��r Chair, Commissioner Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage,AK 99501-3572 Re: Docket No. OTH-15-038 Missin uterAnnulus Pressure G ges eep CreeOnitAHappy Valley B-14(PTD 212054 'Deep Creek Unit Happy Valley B-15 (PTD 2121320) (1 Nikolaevsk Red#1 (PTD 2040840) Dear Chair Foerster: We write to provide additional information concerning our review of all Hilcorp Alaska-operated wells. On December 21, 2015, you wrote stating that safety valve system inspections performed by an AOGCC Inspector at the Happy Valley B-Pad and the Nikolaevsk Pad revealed three wells not equipped with pressure gauges to monitor the outer annuli. We responded by letter dated January 8, 2016, noting that a gauge had been installed on well Nikolaevsk Red #1 (PTD 2040840), the Happy Valley wells B-14 and B-15 did not require outer annulus pressure gauges as the wells were constructed with only a tubing-casing annulus, and requesting additional time to complete the review directed in your December 21 letter. You replied by letter dated January 11, 2016, providing additional time and requiring a response by January 22, 2016. This letter is our response. We appreciate the extension of time to complete a thorough review of Hilcorp Alaska-operated wells. The additional time was necessary so well schematics and well head designs could be reviewed to ensure all proper annuli had valves and gauges, based on design, and not just what was visible on the well. Our review found that all wells operated by Hilcorp Alaska had the required annuli valves. The review identified the following wells did not have the required annuli gauges on the wells (see attached photos): Well PTD# Gauge Status Correction Ivan River 41-01 192-109 Missing OOA Gauge OOA Gauge Installed 01/12/16 Nikolaevsk Red#2 204-084 Missing OA Gauge OA Gauge Installed 12/29/2015 Swanson River 12-15 160-022 Missing OA Gauge OA Gauge Installed 01/14/2016 Swanson River 32A-15 194-084 Missing OA Gauge OA valve was below mud in cellar.The cellar (Note:2 IA Gauges bottom needed to be thawed to be able to suck out Were Installed) mud below valves to install gauge. OA Gauge will be installed before 02/01/16. COPY • • Cathy P.Foerster Docket Number:OTH-15-038 January 22,2015 Page 2 of 2 The monobore wells that have only one monitorable casing have only one gauge. The following fields have active monobores: Cook Inlet Fields Monobore Count North Slope Fields Monobore Count Beaver Creek 4 Milne Point 36 Cannery Loop 2 Happy Valley 3 Kenai Gas Field 5 Ninilchik 2 Swanson River 2 During this review of all wellheads in Hilcorp Alaska's inventory we identified a knowledge deficiency with some of the field operations staff where some did not fully understand wellhead design below the master valve. We are currently developing a general wellhead training module that will become part of the field operator training package for the Alaska employees. We expect this to be completed in early March and will be reviewed with all Hilcorp Alaska field operators. Hilcorp is available at the commission's convenience to inspect the wells that were missing the correct gauges in Swanson River, Nikolaevsk Field and Ivan River, to close this matter. Should you have any additional questions, please contact Chad Helgeson (777-8405). Sincerely, HILCORP ALASKA, LLC David ilkins Senior Vice President Hilcorp Alaska, LLC Attachments— Ivan River 41-01 Casing Gauge Photos Nikolaevsk Red#2 Casing Gauge Photos Swanson River 12-15 Casing Gauge Photos Swanson River 32A-15 Casing Gauge Photos cc: Jim Regg-AOGCC Chet Starkel -Hilcorp Larry Greenstein -Hilcorp David S Wilkins-Hilcorp Bo York-Hilcorp Stan Golis—Hilcorp Mike Dunn -Hilcorp • • AOGCC Docket No.OTH-15-038 Missing Outer Annulus Pressure Gauges Corrective Actions 4 ` 0,, 4-, L- V41***IL ik*, „its, �► ` ," onk deer lilt fr. Ivan River 41-01 Outer Outer Annulus gauge i IOW : ' z j 4 • IF woo 4 1111, 111111. Nikolaevsk Red#2 Outer Annulus gauge i • • U Hilcorp Alaska,11.0 — SWANSON RIVER UNIT 12.15(SRU?2'5! - API#F 50.133 10138-00 00 r It, PTO#160.022 LEASE#FED A028408 ' SURFACE LOCATION: SW1/4,NW1/4 SEC 15,T8N,R9W,SM ! , _ At 1 ;fir.,��i i '� _ I Swanson River 12-15(Tree removed above Master Valve for Drilling Activity) 1.7104:%iii:..„4,..4 LI Hrlcorp;Alaska,LLC CI SIN ANSON RIVER UNIT 32A Wit,k .,44 >`f API#50433.10141-01-00 C pTD #FE 84 A 40& :. FED 028 c EAS 4gECT1015NBN,A9WSMA Y - NW/ -�, Swanson River 32A-15 (Tree Removed for Drilling Activity). 2 gauges installed on IA valves, and OA valve is below the mud line in the cellar(found during wellhead and well schematic review). • A 0 e-t, of qF 4SAP'\I//7r s. THE STATE Alaska Oil and Gas w . OP� 4 °f Conservation Commission 14 x- _itrity5 "' 333 West Seventh Avenue GOVERNOR BILL WALKER Anchorage, Alaska 99501-3572 14014'ALAS1°' Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov January 8, 2016 CERTIFIED MAIL— RETURN RECEIPT REQUESTED 7015 0640 0006 0779 5852 Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC P.O. Box 244027 Anchorage, AK 99524-4027 Re: Docket No. OTH-15-038 Missing Outer Annulus Pressure Gau es eep Creek Unit Happy Va ey B-14 (PTD 2120540') Deep Creek Unit Happy Valley B-15 (PTD 2121320) Nikolaevsk Red#1 (PTD 2040840) Dear Mr. Helgeson: The Alaska Oil and Gas Conservation Commission (AOGCC) received Hilcorp Alaska LLC (Hilcorp)'s response to the notice of violation dated December 21, 2105. Information included well schematics for each of the wells that were observed to be missing outer annulus pressure gauges. In the case of Happy Valley wells B-14 and B-15, AOGCC agrees with Hilcorp that the outer annulus pressure gauges would not be required based on the well schematics provided (wells are constructed with only a tubing-casing annulus). Hilcorp confirms that the required pressure gauge has been installed on the outer annulus of Nikoleaysk Red #1 but that has yet to be confirmed by AOGCC. Hilcorp has requested an extension until January 22, 2016 to complete a review of all Hilcorp- operated wells and provide a timeline for installing the required annulus valves on those wells that are not in compliance with 20 AAC 25.200(c). Hilcorp's requested extension is APPROVED. The AOGCC will not close this enforcement action until the required information has been provided by Hilcorp and an AOGCC Inspector has been able to confirm compliance with 20 AAC 25.200(c) for all wells identified as missing the required annulus valves and pressure gauges. Questions regarding this letter should be directed to Jim Regg at 907-793-1236. • • 4' Docket No.OTH-15-038 Notice of Violation January 8,2016 Page 2 of 2 Sincerely, Cathy . Foerster Chair, Commissioner cc: AOGCC Inspectors C. Helgeson (Hilcorp, by email) RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a),within 20 days after written notice of the entry of this order or decision,or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed,then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10-days is a denial of reconsideration. If the AOGCC denies reconsideration,upon denial,this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction,in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration,this order or decision does not become final. Rather,the order or decision on reconsideration will be the FINAL order or decision of the AOGCC,and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails,OR 30 days if the AOGCC otherwise distributes,the order or decision on reconsideration. In computing a period of time above,the date of the event or default after which the designated period begins to run is not included in the period;the last day of the period is included,unless it falls on a weekend or state holiday,in which event the period runs until 5:00 p.m.on the next day that does not fall on a weekend or state holiday. • . II Hilcorp Alaska,LLC Post Office Box 244027 Anchorage,AK 99524-4027 3800 Centerpolnt Drive Suite 100 Anchorage,AK 99503 January 5,2016 Cathy P. Foerster Chair,Commissioner Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage,AK 99501-3572 Re: Docket No. OTH-15-038 Missing Outer annulus Pressure gauges fr30Deep Creek Unit Happy a ley B- i PTD 2120540) eep Creek Unit Happy Valley B-15 (PTD 21 s Nikolaevsk Red#1 (PTD 2040840) Dear Chair Foerster: We respond to the Alaska Oil and Gas Conservation Commission's (AOGCC's) letter dated December 21,2015, in regards to Missing Outer Annulus Pressure Gauges. The Happy Valley 14 & 15 wells do not have a casing-casing(outer)annuli and therefore did not have a gauge installed in the conductor valve. This was communicated to the AOGCC inspector by the Hilcorp Alaska LLC (Hilcorp)representative during the visit in October. Attached are the current wellhead schematics, which show the bottom valve/flange is mounted to the conductor (10-3/4" Pipe). These conductors were driven into the ground and are not designed to hold pressure. The conductors are designed as a support during drilling, to flowback returns while drilling and cementing of the surface casing, and prevent collapse of the loose soil near the surface. The Nikolaevsk Red #1 well did not have a gauge in the casing-casing annulus. Attached is a picture of the casing-casing valve that was not plugged, and until a full wellhead review was completed on this well, it was not clear by the Hilcorp operators that this was a casing-casing valve that would monitor the 9-5/8"x7" annulus of this well. A gauge has been installed on the valve and is being monitored by operations. There are many wells operated by Hilcorp that are monobore completions and do not have casing-casing annuli. We are currently conducting a review of all the wells and wellhead designs to understand which wells do not have an outer annulus and therefore may not comply with 20 AAC 25.200(c). A preliminary list of wells that have this configuration are: Happy Valley #9, 14, 15 & 17, KBU 41-07X & 31-06X, Falls Creek 5, Paxton 5, Beaver Creek 23, 24 & 25, SRU 213-15 &213B-15. • Cathy P.Foerster Docket Number:OTH-15-032 January 5,2016 Page 2 of 2 Hilcorpis requestingnd an extension until January 22 to complete a review of the entire Hilcorp Alaska well inventory and provide a list to the AOGCC of wells that do not have casing-casing annuli. In the last two weeks of field reviews only one other well (Shut-in Nikolaevsk Red #2) with a casing-casing annuli was found that did not have a gauge on casing-casing annuli. Please let us know if this additional time will be allowed to complete this list of wells that do not meet 20 AAC 25.200(C). Should you have any additional questions, please contact Chad Helgeson(777-8405 or chelgeson a hilcorp.com). Sincerely, HILCORP ALASKA, LLC David Wilkins Senior Vice President Hilcorp Alaska,LLC Attachments— Happy Valley B #14 Wellhead Schematic& Wellbore Schematic Happy Valley B #15 Wellhead Schematic& Wellbore Schematic Nikolaevsk Red#1 casing photo, Wellhead Schematic& Wellbore Schematic cc: Jim Regg—AOGCC Chet Starkel—Hilcorp Larry Greenstein—Hilcorp David S Wilkins—Hilcorp Bo York- Hilcorp Stan Golis—Hilcorp Mike Dunn—Hilcorp • • II Happy Valley HV#14 Current 01/05/2016 Happy Valley Tubing hanger,FMC-TC-EN- HV#14 CL,7 X 2 7/8 IBT lift and susp, 10'/X75/8X5'/2X w/2%Type H BPV,5% 2 3/8 Extended neck,'/.control line port,Alloy material BHTA,Bowen,2 9/16 5M X 2.5 Bowen quick union 6 ,0-QO J�Jaya Valve,Swab,WKM-M, rj`I`' �op0�O c'� \� 44 2 9/16 5M FE,HWO,DD trim 71, e,�k., 1.02‘F e� ...� e ,51\Ib iimmem Cross,stdd,2 9/16 5M X 4'I�,r. 3 1/8 SM 'RI V. ■ 1 ill; , : "B"■air"' 3 1/8 5M API stdd Valve,Master,WKM-M, +ate ' ., 2 9/16 5M FE,HWO,DD trim v v Valve,Master,WKM-M, r'' � � 29/165M FE,HWO,DD trim 11.E:T�I to.Tubing head,TCM,11 5M X e.O �1 .4iI I!r 7 1/16 5M w/2-2 1/16 5M ill 2 1/16 5M API stdd SSO,7"bottom prep I — - - �I. ■■ : . 5 1/2 x 2 3/8 tV1I5 ;�" annulus ii j I I - 1 0 =..i` J ,IU!. Multibowl Wellhead,SMB- 22,115MX10%SOW,w/ 1I _ 11 es% 4-2 1/16 5M SSO S�` „� 7 5/8 mandrel hanger and •i• _ I. I f:( = /8 x 5 packoff installed in head KR �i:: c•` : � !, annulus , Ii I Hu , . 5.■ EH 7 ; (1(0; - 10%conductor i l 10 .. 7 5/8" 5 31" 2 3/8 • • Happy Valley Well: HV B-14 SCHEMATIC PTD: 212-054 it API: 50-231-20036-00 Surface Location: KB 610'Above MSL CASING DETAIL X:223720 Y:2190914 SIZE WT GRADE CONN ID TOP BTM. CMT / 10-3/4" Weld Surf. 112' None 7-5/8" 29.7 L-80 BTC 6.875 Surf. 998' Surf. S 1/2" 17 L-80 VAM ST-L 4.892 791' 2,005' 790' TUBING DETAIL 5-1/2" 17 L-80 VAM ST-L 4.892 Surf. 790' N/A Surface Hole: VELOCITY STRING DETAIL 9-7/8"Hole,9.2 ppg WBM 2-3/8" 4.7# L-80 8rd 1.995 Surf. 1,684' Cement to Surface :, 1 JEWELRY DETAIL I NO DEPTH ID ITEM 1 790' 4.892 JMZX Liner Hanger PERFORATION DETAIL ZONE TOP(MD) BTM(MD) TOP(TVD) BTM(TVD) FT SPF DATE Sterling A 1,689' 1,703' 1,689' 1,703' 14 6 7/30/2012 Production Hole: 6-3/4"Hole,9.2 ppg WBM Cement to TOL @ 790' Sterling A A TD=2,005'MD/TVD PBTD=1,894'MD/7VD Revised 3/31/2014 by TDF • • ii Happy Valley HV#15 �� 01/05/2016 �� Happy Valley ' Tubing hanger,SMB-22 H,a- m 4-il 5 ported,11X5%LCsuspX 10%X75/8X51/2 5.875-4 stub acme left hand lift,5"H BPV,4.930"min bore,7"extended neck BHTA,OTIS,5 1/8 5M X 9%2 Otis quick union top 111 uumnS Valve,Swab, m„■ lli 4\ WKM M, 5 1/8 5M FE,HWO, . U Ja y\ ���� DD trim (t°1( o O �1� OO �hJ y\`b� v 0 0 ��` a�JA�' ..�� X47 I CRY 1I LJIF ° ! 0 Immo MI 11;1Iq MI Valve,Upper Master WKM-M,5 1/8 5M FE,HWO, 1�( DD trim --o--- (4' UUuCTJ 1■n.em Valve,Master,WKM-M, 5 1/8 5M FE,HWO,DD trim b( o q' 7-11_Tri -me'111111 �■ ■MI ■iW sir- i m=„ = llti II 11 lel ,.1 :i!LiiI '■' ' 75/8x5/ i �� in �c(°)c iill.I. Annulus Multibowl Wellhead,SMB- g I1 . . pi flu"` 22,115MX10%SOW,w/ € 4-2 1/16 5M SSO 7 5/8 mandrel hanger and 'm �' (oD 0%conductor �c packoff installed in head 1 X10;" L 7 5/8" 5%" • • Happy Valley II SCHEMATIC Well: HV B-15 As Completed 10/26/12 11,14,orr Ux,L,.1 I I Ground Elev:593'Above MSL KB-THF:14.7' 10-3/4" I / I CASING DETAIL Size Type Wt Grade Conn. ID Top Btm 10-3/4" Conductor 45.5 L-80 - 9.95 Surf 98' 7-5/8" Prod Casing 29.7 L-80 Buttress 6.875 Surf 1,139' 5-1/2" Prod Liner 17 L-80 VAM STL 4.892 924' 3,056' t TUBING DETAIL y 5-1/2" Production 17 L-80 VAM STL 4.892 Surf 924' r i 16 JEWELRY DETAIL No. Depth ID OD Item 1 924' 4.892" -- JMZX Liner Hanger 2 2,507' -- -- Comp Bridge Plug '• 3 2,745' -- -- Fish:Weatherford Pulling Tool ). 4 2,750' 4.892" WRP Retrievable Plug w/2.875" OD Fishing neck ,' &i. PERFORATION DETAIL Zone Top(MD) Btm(MD) Top(TVD) Btm(TVD) Feet SPF Date Status Beluga A 2,360' 2,374' 2,026' 2,036' 14 6 3/13/13 Open t Beluga C 2,425' 2,432' 2,074' 2,079' 7 6 3/13/13 Open 4�' Beluga D 2,467' 2,487' 2,105' 2,120' 20 6 10/26/12 Open /''• Beluga D 2,472' 2,492' 2,109' 2,123' 20 6 12/15/12 Open f, Beluga E 2,530' 2,535' 2,152' 2,156' 5 6 12/15/12 Isolated Beluga F 2,600' 2,612' 2,205' 2,214' 12 6 12/15/12 Isolated Beluga H 2,812' 2,822' 2,366' 2,373' 10 6 12/15/12 Isolated Beluga I 2,844' 2,848' 2,390' 2,393' 4 6 12/15/12 Isolated 1 Oki 7-5/8" Beluga A Beluga C Beluga D 2' Beluga D ,r =Beluga E Beluga F 4' -moi Beluga H Beluga I 5-1/2" L. TD=3,069'MD/2,558'TVD PBTD:2,898' MD/2,431'TVD Updated by DMA 11/24/14 • • „74, * trio vingsvasimitaimigaimmiswitimmai 4 ri .. ' , thiltow rt Nikolaevsk Red#1 wellhead Photo December 9th Casing-casing valve . . • 11 Red Pad Red#1 11,,,, , X1.4.. I I, 01/05/2016 Red Pad Tubing hanger,CIW-CXS,11 Red#1 X 3''A IBT lift and susp,w/3" 16 x95/8 x 7x 3% type H BPV profile,''/."non continuous control line,9'/. EN BHTA,Bowen,3 1/8 5M FE x I 2%Bowen union top 0 t rr- as' V:L > ��`,,,i*Valve,Swab,CIW-FL, cO �‘ �31/85MFE,HWO,AAtrim C 40,+44 z � c � ?.1 � \��4,' 42' 44' 44 4,' 4b 'slb rr�u�-If W O 111 Lrj @,,,,..0 Valve,Upper Master,CIW-FL, OO ���J 3 1/8 5M FE,HWO,AA trim ?' '.V*; 1 If li Valve,Master,CIW-FL, e �31/85MFE,HWO,AAtrim ,rJ YU7 " 1711117. rr•ln . NErr ;= Casing Spool,Cameron MBS- upper,11 5M stdd top andIIII bottom,w/2-2 1/16 SM SSO 1110 I ii et i ''. ! • • Illii.., 7x 3Y,annulus IIIIMMIEN4 -. LE. I r' ' Ir 11 i Csg head,Cameron MBS- � Lower,11 5M x T-103 pocket Il III bottom,w/2-2"LPO – _..0-- 1111—__1' 111.1.=11019 5/8 x 7 annulus 1111 I C�'� Casinghanger,Surface, I I Cameron,133 5/8/8 x 9 5/8 BTC II box bottom x LH acme, – w/T-103 neck 16" 9 5/8„ 7" 3%" ,,c,.„ %%y,-4_-74-=:0*-_a, THE STATEs • . Alaskaaa (4' =R :i 0 —�- f ' AK- Cons,• ation Commission s , : 333 West Seventh Avenue GOVERNOR BILL WALKER Anchorage, Alaska 99501-3572 ®p ALASain: 907,279,1433 MFax: 907.276 7542 www.aogcc.alaska.gov December 21,2015 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7015 0640 0006 0779 5876 Mr. Chad Helgeson Kenai Operations Manager Hilcorp Alaska, LLC P.O. Box 244027 Anchorage,AK 99524-4027 Re: Docket Number: OTH-15-038 Missing Outer_Annulus Pressure Gauges asp Creek Unit Ha Valle B-14 (PTD 21205-417)? r, Deep Creek Unit Happy Valley B- 5 (PTD 2121320 Nikolaevsk Red #1 (PTD 2040840) Dear Mr. Helgeson: On October 31, 2015 an Alaska Oil and Gas Conservation Commission (AOGCC) Inspector accompanied by a Hilcorp Alaska LLC (Hilcorp) representative performed well safety valve system inspections at the Happy Valley B-pad and Nikolaevsk pad. Three wells —Happy Valley B-14, Happy Valley B-15 and Nikolaevsk Red #1 were not equipped with pressure gauges to monitor the outer annuli. AOGCC performed follow-up inspections at Red #1 on December 9, 2015 and at Happy Valley B-14 and B-15 on December 12, 2015 to determine if the outer annulus pressure gauge issues were resolved. The three wells were again observed to be missing outer annulus pressure gauges. Regulation 20 AAC 25.200(c) requires wellhead equipment to include appropriate gauges and valves installed in the tubing, casing-tubing (inner) annulus, and casing-casing(outer) annuli. The facts reported by the AOGCC Inspectors indicate a failure to equip Happy Valley B-14, Happy Valley B-15, and Nikolaevsk Red #1 with the required pressure gauges. Within 14 days of receipt of this letter, you are requested to provide for AOGCC review and approval a written plan describing what has been or will be done in the future to prevent its recurrence at Hilcorp- operated fields in Alaska. Included in the requested response should be a list of Hilcorp-operated wells that do not have the required pressure gauges as outlined in 20 AAC 25.200(c), and the timeline for installing the required valves. Failure to comply with this request will be an additional violation. • . Notice of Violation Docket Number:OTH-15-038 December 21,2015 Page 2 of 2 The AOGCC reserves the right to pursue additional enforcement action in connection with missing outer annulus pressure gauges on the three listed wells. Questions regarding this letter should be directed to Jim Regg at 907-793-1236. Sincerely, Cathy Foerster Chair, Commissioner cc: AOGCC Inspectors RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a),within 20 days after written notice of the entry of this order or decision,or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed,then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10-days is a denial of reconsideration. If the AOGCC denies reconsideration,upon denial,this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction,in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration,this order or decision does not become final. Rather,the order or decision on reconsideration will be the FINAL order or decision of the AOGCC,and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails,OR 30 days if the AOGCC otherwise distributes,the order or decision on reconsideration. In computing a period of time above,the date of the event or default after which the designated period begins to run is not included in the period;the last day of the period is included,unless it falls on a weekend or state holiday,in which event the period runs until 5:00 p.m.on the next day that does not fall on a weekend or state holiday. . • Prt ,Ze4DQ Regg, James B (DOA) From: Herrera, Matthew F (DOA) !� Sent: Wednesday, December 09, 2015 3:00 PM C6/ tvIGI ( To: Regg, James B (DOA) Subject: RE: Red #1 Well Completion Report and Schematic Attachments: IMG_1626.JPG;IMG_1627.JPG;IMG_1628.JPG;IMG_1629.JPG Here are some of the pics From: Regg, James B (DOA) Sent: Wednesday, December 09, 2015 2:14 PM To: Herrera, Matthew F (DOA) Subject: RE: Red #1 Well Completion Report and Schematic Ok; thanks. Jim Regg Supervisor, Inspections AOGCC 333 W.7th Ave,Suite 100 Anchorage,AK 99501 907-7934236 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 Jim Regg at 907- 793-1236 or iim.regg@alaska.gov. From: Herrera, Matthew F (DOA) Sent: Wednesday, December 09, 2015 2:11 PM To: Regg, James B (DOA) Subject: RE: Red #1 Well Completion Report and Schematic I can swing out there and get better pics with a camera if you'd like driving by there Friday. From: Regg, James B (DOA) Sent: Wednesday, December 09, 2015 1:58 PM To: Herrera, Matthew F (DOA) Subject: RE: Red #1 Well Completion Report and Schematic Did you get any pictures? Jim Regg Supervisor, Inspections AOGCC 333 W.7th Ave,Suite 100 Anchorage,AK 99501 907-793-1236 1 • 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 Jim Regg at 907- 793-1236 or jim.reggCa@alaska.gov. From: Herrera, Matthew F (DOA) Sent: Wednesday, December 09, 2015 1:36 PM To: Regg, James B (DOA) Subject: RE: Red #1 Well Completion Report and Schematic Well all they have for an OA valve is a Baton 2" Ball valve with no plug or bushing with a gauge.The IA has a standard Gate valve on each side with a Gauge on one side. From: Regg, James B (DOA) Sent: Wednesday, December 09, 2015 1:32 PM To: Herrera, Matthew F (DOA) Subject: Red #1 Well Completion Report and Schematic This is from of our well files. Not a monobore—should be IA and OA annulus valves and gauges. Jim Regg Supervisor, Inspections AOGCC 333 W.7th Ave,Suite 100 Anchorage,AK 99501 907-793-1236 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 Jim Regg at 907- 793-1236 orjim.regg@alaska.gov. 2 ei 16-6 Keet 1 Regg, James B (DOA) From: Regg,James B (DOA) ,e,ifet I Z-1 9, (15' Sent: Wednesday, December 09, 2015 1:32 PM To: Herrera, Matthew F (DOA) Subject: Red #1 Well Completion Report and Schematic Attachments: Red-1 completion rpt and schematic.pdf This is from of our well files. Not a monobore—should be IA and OA annulus valves and gauges. Jim Regg Supervisor, Inspections AOGCC 333 W.7th Ave,Suite 100 Anchorage,AK 99501 907-793-1236 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 Jim Regg at 907- 793-1236 orjim.regg@alaska.gov. 1 Well Name: Red #1 Field: Wildcat State: Alaska API:50-231-20021 I I Conductor: 16",82.77 ppf,K-55 to AOGCC:204-084 50' 111) • 352'FNL&392'FWL Sec.8,T4S,R13W,SM � Surface Casing:9%1',47 ppf,L-80, RT-THF: 17.22' BTC to 1790' Cmnt with 110 bbl of 12.8 ppg lead and Tbg lift threads-3W IBT 45 bbl of 15.8 ppg tail"G" Tree cxn-2W Bowen cxn Intermediate Casing:7",29 ppf,L-80,BTC to 4601' Production Tubing:3W,9.2 ppf,L-80,IBT X X Cmnt with 53 bbl of 12.8 ppg"G"leadlead and 30 bbl of 15.8 ppg"G"tail. to 4412' -Annulus loaded with 7.4 ppg base oil Completion -Chemical injection sidepocket mandrel at 2502' (Macco SFO-IC-I)with 1/4", 0.049"wall SS chemical injection line -Locator sub @4378' -Baker 80-40 seal assembly — 13'of 4.00"OD seals — Open Perfs: -Muleshoe at 4412' T-??:8768'-8777'(6 spf,8/3/04) T-65:8795'-8820'(3 spf,7/23/04) T-??:9056'-9076'(6 spf,8/3/04) Isolated Perfs T-81:9210'-9280'(3 spf,7/19/04) Plugs: — T-130:10565'-10610'(3 spf,7/17/04) -EZ-Drill CIBP at 9192'capped — with 40'of cement(7/23/04) -EZ-Drill CIBP at 10420'(7/19/04) Production Liner:3W,9.2 ppf,L-80,IBT liner from 4379' -10,930' Directional Data: Baker ZXP packer,Flexlock liner hanger& max hole angle=29.1 deg A L. 80-40 sealbore at 4373' KOP=4800' Cemented with 209 bbl of 12.0 ppg max dogleg<3 deg/100' PBTD=9152' Litecrete TD=12,458' Red-1 schematic 8-4-2004 Updated by:JGE STATE OF ALASKA i1C 0 p y ALASKe.AND GAS CONSERVATION COMMIS' d WELL COMPLETION OR RECOMPLETION REPORT ANE . ;,�. 1a.Well Status: ORE Gas Plugged❑ Abandoned I] Suspended WAGE] lb.Well Class: 20AAC 25.105 20AAC 25.110 Development ❑ Exploratory0 GI NJ❑ W I NJ❑ W DSPL❑ No.of Completions 1 Other Service ❑ Stratigraphic Test❑ 2.Operator Name: 5.Date Comp.,Susp.,or 12.Permit to Drill Number: Union Oil Company of California Aband.: July 17,2004 204-084 3.Address: 6.Date Spudded: 13.API Number: PO Box 196247,Anchorage,AK 99519-6247 June 9,2004 50-231-20021 4a. Location of Well(Governmental Section): 7.Date TD Reached: 14.Well Name and Number: Surface: 352'FNL,392'FWL,Sec.8,T4S,R13W June 28,2004 Red-01 Top of Productive Horizon: 8.KB Elevation(ft): 15.Field/Pool(s): 1,176 FNL,1,564 FWL,Sec.8,T4S,R13W 895'above MSL Total Depth: 9.Plug Back Depth(MD+TVD): Nikolaevsk Unit/Tyonek 1,616 FNL,2,307 FWL,Sec.8,T4S,R13W 9,152/8,831' 4b,Location of Well(State Base Plane Coordinates): 10.Total Depth(MD+TVD): 16.Property Designation: Surface: X=212,798 Y=2,140,995 12,458/12,047' Red Pad TPI: X=213,934,Y=2,140,130 11. Depth Where SSSV Set: 17.Land Use Permit: Total Depth: X=214,668 Y=2,139,672 n/a n/a 18.Directional Survey: Yes 0 No ❑ 19.Water Depth,if Offshore: 20.Thickness of Permafrost: n/a feet MSL n/a 21.Logs Run: 8.5 Quad Combo,6-1/8 PEX,CMR,DSI,MSCT 22. CASING,LINER AND CEMENTING RECORD WT.PER SETTING DEPTH MD SETTING DEPTH ND HOLE SIZE CEMENTING RECORD AMOUNT CASING GRADE FT TOP BOTTOM TOP BOTTOM PULLED 16" 82.77 K-55 0 50' 0' 49' n/a Driven 9-5/8" 47 L-80 0 1,790' 0' 1,789' 12-1/4" 110bbi,12.8ppg lead/45bb1,15.8ppg"G" 7" 29 L-80 0 4,601' 0' 4,600' 8-1/2" 53bb1,12.8ppg lead/30bbl,15.8ppg"G" 3-1/2" 9.2 L-80 0 10,930 0' 10,551' 6-1/8" 209 bbl of 12.0 ppg Litecrete 23.Perforations open to Production(MD+ND of Top and Bottom 24. TUBING RECORD Interval,Size and Number;if none,state"none"): SIZE DEPTH SET(MD) PACKER SET(MD) 8768'-8777'(6 spf,8/3/04) 3-1/2",9.2#L-80 4,412' Baker ZXP pkr @ 4,373' 8795'-8820'(3 spf,7/23/04) 9056'-9076'(6 spf,8/3/04) £` l' ' Ex 25. ACID,FRACTURE,CEMENT SQUEEZE,ETC. .*1; DEPTH INTERVAL(MD) AMOUNT AND KIND OF MATERIAL USED ,I lig? ; 26. PRODUCTION TEST Date First Production: Method of Operation(Flowing,gas lift,etc.): f1/a flowing Date of Test: Hours Tested: Production for Oil-Bbl: Gas-MCF: Water-Bbl: Choke Size: Gas-Oil Ratio: 8/4/2004 24 Test Period —0 5777 0 20/64" n/a Flow Tubing Casing Press: Calculated Oil-Bbl: Gas-MCF: Water-Bbl: Oil Gravity-API(corr): Press. 1985 0 24-Hour Rate �"►0 5777 0 n/a 27. CORE DATA Brief description of lithology,porosity,fractures,apparent dips and presence of oil,gas or water(attach separate sheet,if necessary). Submit core chips;if none,state"none". 5736':Ss fg slty; 5792':Ss fg sky; 5814':Ss fg slty; 5826':Ss fg slty; 5854':Ss fg slty spyrt; 6072':Ss f-mg slty; 6138':Ss f-mg vslty; 6334':Ss fg slty; 6390':Ss f-vcg vslty Ig incls; 6564':Ss fg slty thn lams; 6675':Ss fg slty thn lams; 6772':Ss fg slty; 8810':Ss mg slty thk shy lam; 8814':Ss m- cg slty; 8818':Ss m-vcg slty; 9064':Ss fg slty; 9069':Ss fg slty Ig incls; 9214':Ss mg vslty thn org lams; 9238':Ss m-cg vslty Ig incls; 9285':Ss m- cg vslty Ig incls; 9298':Ss fg vslty; 9308':Ss fg vslty; 9413':Ss fg slty scalc;10068':Ss fg slty scalc;10534':Ss fg shy scalc; 10606':Ss fg sity scalc; 10754':Ss fg slty Ig incl scalc; 10768':Ss fg slty scalc;10982':Ss f-vcg scalc;11245':Ss f-cg slty Ig incls;11677':Ss fg slty thn lams;11681':Ss fg slty;11781':Ss fg slty;11785':Ss fg slty scalc;11790':Ss f-mg slty I • 11930':Ss fg sity• 12260':Ss fg calc frac fll; IGINAL rrf t mum/ .., Form 10-407 Revised 12/2003 CONTINUED ON REVERSE RBDM B Fav a s 2ooa 28. GEOLOGIC MARKER 29. MATION TESTS NAME TVD Include and briefly test results. List intervals tested,and attach detailed supporting as necessary. If no tests were conducted,state Tyonek 5,633 5,613 "None". T20 7,231 7,036 Testing operations summarized in daily operations reports(attached). T25 7,560 7,333 T35 7,711 7,472 T50 8,119 7,851 T40 8,234 7,959 C y T63 TOP 8,614 8,320 T63 BOS 8,625 8,330 T65 TOP 8,798 8,494 T65 BOS 8,818 8,513 T70 TOP 9,047 8,731 T70 BOS 9,075 8,758 i,yx ; ;(1` T81 TOP 9,210 8,886 30. List of Attachments: Directional Survey,Schematic,Summary of Daily Operations 31. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact: Rob Stinson 907-263-7804 Printed Name: Tim C.Brandenburg Title: Drilling Manager /r y/ Signature: ,2 C:� Phone: 907-276-7600 Date: // —c2 INSTRUCTIONS General: This form is designed for submitting a complete and correct well completion report and log on all types of lands and leases in Alaska. Submit a well schematic diagram with each 10-407 well completion report and 10-404 well sundry report when the downhole well design is changed. Item la: Classification of Service wells: Gas Injection,Water Injection,Water-Alternating-Gas Injection,Salt Water Disposal,Water Supply for injection,Observation,or Other.Multiple completion is defined as a well producing from more than one pool with production from each pool completely segregated. Each segregated pool is a completion. Item 4b: TPI(Top of Producing Interval). Item 8: The Kelly Bushing elevation in feet above mean low low water. Use same as reference for depth measurements given in other spaces on this form and in any attachments. Item 13: The API number reported to AOGCC must be 14 digits(ex:50-029-20123-00-00). Item 20: True vertical thickness. Item 22: Attached supplemental records for this well should show the details of any multiple stage cementing and the location of the cementing tool. Item 23: If this well is completed for separate production from more than one interval(multiple completion),so state in item 1,and in item 23 show the producing intervals for only the interval reported in item 26. (Submit a separate form for each additional interval to be separately produced,showing the data pertinent to such interval). Item 26: Method of Operation: Flowing,Gas Lift,Rod Pump,Hydraulic Pump,Submersible,Water Injection,Gas Injection,Shut-in,or Other (explain). Item 27: If no cores taken,indicate"none". Item 29: List all test information. If none,state"None". CONFIDENTIAL Form 10-407 Revised 12/2003 • • • • 11110h11212112111 Well Name: Red #1 , Field: Wilsat VNOCAL® Sate: AlaskaEC ®y API 50-231-20021 I I Conductor: 16",82.77 ppf,K-55 to AOGCC:204-084 50' 352'FNL&392'FWL Sec.8,T4S,R13W,SM Surface Casino:9W,47 ppf,L-80, '`--- BTC to 1790' RT-THF: 17.22' Cmnt with 110 bbl of 12.8 ppg lead and 45 bbl of 15.8 ppg tail"G" Tbg lift threads-3W IBT Tree cxn-2%"Bowen cxn Intermediate Casing:7",29 ppf,L-80,BTC to 4601' Production Tubina:3W,9.2 ppf,L-80,IBT g g Cmnt with 53 bbl of 12.8 ppg"G"lead to 4412' , , lead and 30 bbl of 15.8 ppg"G"tail. -Annulus loaded with 7.4 ppg base oil Completion -Chemical injection sidepocket mandrel at 2502' (Macco SFO-IC-I)with 1/4", 0.049"wall SS chemical injection line -Locator sub @4378' - Baker 80-40 seal assembly = Open Perfs: 13'of 4.00"OD seals T-??:8768'-8777'(6 spf,8/3/04) -Muleshoe at 4412' T-65:8795'-8820'(3 spf,7/23/04)T-??:9056'-9076'(6 spf,8/3/04) Isolated Perfs T-81:9210'-9280'(3 spf,7/19/04) Plugs: _ 1-130:10565'-10610'(3 spf,7/17/04) -EZ-Drill CIBP at 9192'capped — with 40'of cement(7/23/04) -EZ-Drill CIBP at 10420'(7/19/04) Production Liner 3'A",9.2 ppf,L-80,IBT liner from 4379' -10,930' Directional Data: Baker ZXP packer, Flexlock liner hanger& max hole angle=29.1 deg A 11. 80-40 sealbore at 4373' KOP=4800' PBTD=9152' Cemented with 209 bbl of 12.0 ppg max dogleg<3 deg/100' TD=12,458' Litecrete Red-1 schematic 8-4-2004 CONFIDENTIAL Updated by:JGE , . • • S • )11 d Ca. o o d z E p ° z H > •• .: E oo CU t 1 th `. i G w) •' O fby L - p- g z c p a > o z M O V/ N- O O o o v d z s U_ '�.,.,) .- -- a4 O N Ci I.) . aN E L t H v U o a {..) c 2C Rv , ca '" L � � E r1\ c 4.,O v 0 w L 40 0.VVrn — �i/1 c c. O VD CQ �t1/� CU L a a▪ KW v) � � : L Qc...) — 4) b o C7 L A — . V -`,C .,-.4 a) i' u �' E= �j z v .1 — (t a = •� tiv L U a .. C O w L a N G U CI' en �/�/ O 4 N — O V1 A z a o z y C .-, p,va M aJa o �/ z M vp Wt a`+ o • V Q . = O� O O a> p > rz A' ac o E M • te d h Q z z 3 = _ e •p Ire. z E o cks o c 3 • Regg, James B (DOA) From: Jones, Jeffery B (DOA) Sent: Saturday, December 12, 2015 11:36 AM NNef o t� 14!(i To: Regg, James B (DOA) Subject: HV-14, HV-15 OA gauges Attachments: IMAG0096.jpg; IMAG0095jpg Jim, � 1Z� i5 I checked &there were no OA gauges on Happy Valley HV-14 & 15. HV-14 cellar was full of snow/ice so couldn't really see below the IA. The cellar gratings were frozen down & we couldn't get them up. It was dark & with the flash against the grating, the pictures didn't turn out well. It was the middle of the night & I ' find an operator on either A or Bpad so I told HilcorpSaxon 169 WSL Shane Barber to get with couldn't p operations & get the cellar cleaned out on HV-14 & install OA gauges on both wells. Jeff Jones AOGCC Petroleum Inspector 907 659 2714- Office 907 744 4446 - Mobile 1 0 • ccl o O o z °' E o r; o oo a, t h CG o U — a. O ° a 0 Q d C O O y1c11 •• Cl.) 0-0 C L � ay N 22, W. C4 i. ° • o O ° O y zzzz O ' i ° o N o ° W P4 o o z z z z � a -..i ) o 00 o r� ° Cl 6 c..)r z _ , h CA 1... 4 7 a o o y V CI. 0 L C s, NOJ t..L Q, CA '2"i. o 0 0 o C^ll1 7 .� y ^^tl! c .,1::4' ti c5 RRRR ,—� N .- oc w A a. a, aG „ U rFczzzz Ct Q- x V1 L r, 4j VI F, U 0.. P. 0. 0. 4. C . w C6 L .° 1.+ G E= ° a o a a. cu C. O v a a ,a MM M -1H V� N N M Ct Ci) 12 v) 0- ,D M M S. y H R 0 0 0 0 0 a >- W L o 0 0 0 ♦ y M N a U E E N r N 4, 7 r---rO N Q a 13. y Z O O N N a a O E xv LJami U CQ = .0 NM V Lr,— C T n 3 z a6 m as oa E ca k UC a,, Gz a 3 „ OF----,-„44, • • ��w ��\ s9 THE STATE Alaska Oil and Gas ti � , ofA As A Conservation Commission *UNEV--:-. 333 West Seventh Avenue "er--' ,,,,',......-----';” GOVERNOR BILL WALKER OF Anchorage, Alaska 99501-3572 Main: 907.279.1 433 ALASFax: 907.276.7542 www.aogcc.alaska.gov December 21, 2015 CERTIFIED MAIL— RETURN RECEIPT REQUESTED 7015 0640 0006 0779 5876 Mr. Chad Helgeson Kenai Operations Manager Hilcorp Alaska, LLC P.O. Box 244027 ,t'�i 1 9 2.fl 1 Anchorage, AK 99524-4027 SL(��NEa Re: Docket Number: OTH-15-038 Missing Outer Annulus Pressure Gauges Deep Creek Unit Happy Valley B-14 (PTD 2120540) Deep Creek Unit Happy Valley B-15 (PTD 2121320) Nikolaevsk Red#1 (PTD 2040840) Dear Mr. Helgeson: On October 31, 2015 an Alaska Oil and Gas Conservation Commission (AOGCC) Inspector accompanied by a Hilcorp Alaska LLC (Hilcorp) representative performed well safety valve system inspections at the Happy Valley B-pad and Nikolaevsk pad. Three wells —Happy Valley B-14, Happy Valley B-15 and Nikolaevsk Red #1 were not equipped with pressure gauges to monitor the outer annuli. AOGCC performed follow-up inspections at Red #1 on December 9, 2015 and at Happy Valley B-14 and B-15 on December 12, 2015 to determine if the outer annulus pressure gauge issues were resolved. The three wells were again observed to be missing outer annulus pressure gauges. Regulation 20 AAC 25.200(c) requires wellhead equipment to include appropriate gauges and valves installed in the tubing, casing-tubing (inner) annulus, and casing-casing(outer) annuli. The facts reported by the AOGCC Inspectors indicate a failure to equip Happy Valley B-14, Happy Valley B-15, and Nikolaevsk Red #1 with the required pressure gauges. Within 14 days of receipt of this letter, you are requested to provide for AOGCC review and approval a written plan describing what has been or will be done in the future to prevent its recurrence at Hilcorp- operated fields in Alaska. Included in the requested response should be a list of Hilcorp-operated wells that do not have the required pressure gauges as outlined in 20 AAC 25.200(c), and the timeline for installing the required valves. Failure to comply with this request will be an additional violation. Notice of Violation • • Docket Number:OTH-15-03 8 December 21,2015 Page 2 of 2 The AOGCC reserves the right to pursue additional enforcement action in connection with missing outer annulus pressure gauges on the three listed wells. Questions regarding this letter should be directed to Jim Regg at 907-793-1236. Sincerely, Cathy . Foerster Chair, Commissioner cc: AOGCC Inspectors RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a),within 20 days after written notice of the entry of this order or decision,or such further time as the AOGCC grants for good cause shown,a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed,then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10-days is a denial of reconsideration. If the AOGCC denies reconsideration,upon denial,this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction,in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration,this order or decision does not become final. Rather,the order or decision on reconsideration will be the FINAL order or decision of the AOGCC,and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails,OR 30 days if the AOGCC otherwise distributes,the order or decision on reconsideration. In computing a period of time above,the date of the event or default after which the designated period begins to run is not included in the period;the last day of the period is included,unless it falls on a weekend or state holiday,in which event the period runs until 5:00 p.m.on the next day that does not fall on a weekend or state holiday. Image Project Well History 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 b direct inspection of the file. ja - 0 �Weii History File Identifier Organizing(done) ❑ Two-sided ❑ Rescan Needed RES AN: OVERSIZED: NOTES: C or Items: ❑ Maps: Grayscale Items: Logs: ❑ Poor Quality Originals: ❑ Other: ❑ Other: / BY: Maria Date: !0 Cl• /s/ MP 1 1 Project Proofing BY: Marr)________ia Date:CIP CO' /s/ 143 Scanning Preparation a. x 30 = (.0 b + 1 ,7 =TOTAL PAGES g / (Count does not include cove sheet) O BY: aft Date:q/�Q /s/ u Production Scanning Stage 1 Page Count from Scanned File: 0 (Count does include covers t) P-.e Count Matches Number in Scanning Preparation: YES wiF NO BY: le Date: D /sl Stage 1 If NO in stage 1, page(s)discrepancies were found: YES NO BY: Maria Date: /s/ Stage 2 Additional Well Reports: NO TOTAL PAGES: (p Digital version appended by: Meredith Michel MP_ Date: /s/ Final Page Count: Stage 1 + Stage 2: TOTAL PAGES: /a CO Scanning is complete at this point unless rescanning is required. ReScanned BY: Maria Date: /s/ Comments about this file: Quality Checked 7/8/2014 Well History File Cover Page_20140708.doc O I Tr o - o O N 9 m N © ch ✓1 a) v 00 Z C Ts - • - p N T •T T T >, >, T >, T E ea a m p p p p p p p p p a �i N p m a p I I I 1 I 1 1 N w o m m T- a 7 '7 '7 '7 '7 '7 '7 ' W , afthi 00 a 00 00 m M m m 00 00 Q 'b O >, >, >, >, >, >, >, >, >, a m 6 z m a) m a) a) a) a) a) a) a) oQ x [= _ a) > > a >w >w >w >... >., >.... >., > a v E O a a aate. a s a s a 4 a s a s a s a O. a O. JI N Nac.) aN aol aN aoi aci aci aci aN O ..... (.4 N N N N N N N N N 0 0 0 C' p O m a) a)2 a)2 a)2 a )2 a)2 a)2 a)0' N 62 a) a) a) rE 00 LL w lL r lL r M7 lL r lL 7 I,.L 7 ii= N ii= c;1 lL N it it 11 ° E U U p_ U O U D U U U U U U p U U U U 7 C) E .c c c C c c C C c C C C C C v� u) I I I I I I I (0 o o2 O t O r O t O t et O r O t et O t O t O O O r O OJ V V@ U O. U O O, U O_ U O. U °. U O_ U Oa O. 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E E E a 2 0 0 Release of Confidential Data Coversheet Well Name: 1-kcom„) Jo4kc.1 B1L-1 PTD: b5 E-Set: 22.9 Lt v 2-y (07-4/ 2-L1 ✓ Physical data labeled with PTD, E-Set# Conf. entry: / / ✓ Import CD data to RBDMS via GeoLogs tab ✓ Confidential (incomplete)entry in Well Data List notes vov� Q/.mport to DigLogs via E-Set tab 4( Scan labeled data L" Apply OCR text recognition Y1/ Save to Well Log Header Scans C7 New"complete" entry in Well Data List notes Logged by: I V\ 1 Fully logged:Ocf /OZ./ (L{ fl Landon Ellison GeoTech Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 100 Anchorage, AK 99503 Tele: 907 777-8339 2.1 2-059 Ifilrorp AlaNko,1.IA: Fax: 907 777-8510 - CA *, E-mail: lellison@hilcorp.com AUG 13 2014 DATE 8/13/2014 AOGCC To: AOGCC Meredith Guhl 333 W. 7th Ave. Ste#100 Anchorage, AK 99501 DATA TRANSMITTAL HAPPY VALLEY B-14 Elog data Prints: Borehole Volume Plot'' Dual Spaced Neutron Spectral Density Sonic Porosity,/ Array Compensated True ResistivityV Cross Dipole Wave Sonic/ CBLV CD: Name Date modified Type Size HAPPY VALLEY314_BHV.pdf 7/23/2012 7:08 AM Adobe Acrobat D,., 394 KB f!1 HAPPY VALLEY_BIAJNDUCTION.pdf 7/23/2012 7:08 AM Adobe Acrobat D„, 991 KB HAPPY_VALLEY B14_POROSITY.pdf 7/23/2012 7:08 AM Adobe Acrobat D„, 1,180 KB ▪HAPPY_VALLEY B14_WAVE.pdf 7/23/2012 7:08 AM Adobe Acrobat D... 2,2°5 KB ▪HVB-14 CBL-PERF 7-29-12.0f 8/13/2014 9:26 AM Adobe Acrobat D.„ 2,714 KB HAPPY_VALLEY_B14_QUADJas 7/23/2012 7:08 AM LAS File 2,113 KB L: HAPPY_VALLEY_GAMMARAY_RHOB.fas 7/23/2012 7:08 AM LAS File 261 KB HAPPY_VALLEY314_BHV.tif 7/23/2012 7:08 AM TIF File 1,386 KB Le_H: HAPPY_VALLEY_BIUNDUCTION.tif 7/23/2012 7:08 AM TIF File 4,654 KB HAPPY_VALLEY_B14_POROSIPflif 7/23/2012 7:08 AM TIF File 6,189 KB iti±.1 HAPPY VALLEY...814 WAVE.tif 7/23/2012 7:08 AM TIF File 3,128 KB Please include current contact information if different from above. Please acknowledge receipt by signing and returning one copy of this transmittal or FAX to 907 777.8510 Recei - Date: ti) , '0/ spz-/ Guhl, Meredith D (DOA) From: Luke Keller[Ikeller@hilcorp.com] Sent: Monday, August ust 11, 2014 11:13 AM To: Guhl, Meredith D (DOA); Janise Barrett Subject: RE: HV B-14, PTD 212-054, Dev vs. Exp, Additional data required Meredith, The 10-404 and 10-407 were filled out incorrectly. The well was definitely classified as exploratory. Sorry for the mix up! Luke Keller Drilling Engineer HilcorpAlaska, LLC 907-777-8395 From: Guhl, Meredith D (DOA) [mailto:meredith.guhl@alaska.gov] Sent: Monday, August 11, 2014 10:42 AM To: Janise Barrett; Luke Keller Subject: RE: HV B-14, PTD 212-054, Dev vs. Exp, Additional data required Hello Janise and Luke, Thank you for the clarification on the discrepancy. I will need something in writing, by email would be fine,that the 10- 404 and 10-407 were filled out incorrectly and should be classified as exploratory.That will help clarify matters in the well history file. Thanks, Meredith Meredith Guhl Petroleum Geology Assistant Alaska Oil and Gas Conservation Commission 333 W. 7th Ave,Suite 100,Anchorage,AK 99501 meredith.guhl@alaska.gov Direct: (907)793-1235 From: Janise Barrett [mailto:jbarrett@hilcorb.com] Sent: Friday, August 08, 2014 8:34 AM To: Landon Ellison Cc: Guhl, Meredith D (DOA) Subject: FW: HV B-14, PTD 212-054, Dev vs. Exp, Additional data required Importance: High Landon, 1 It looks like the logs(GR/RES/DEN/NEU, Sonic and CBL logs)were not sent over in either digital or paper. Can you get these to Meredith's attention as soon as you can? I know this is prior to both of our times here but they are long overdue, let me know if you run into any snafus acquiring them. Meredith, Luke is out this week but will return on Monday, however I will ask the Drilling Advisor if he knows. What I can tell you now is that whomever filled out the report most likely used the APD as a basis for their 10-404 and 10-407. (p.s. I was out yesterday also) ThankY ou! Janise Barrett I Drilling Technician Hilcorp Alaska, LLC 3800 Centerpoint Drive,Suite 100 Anchorage,Alaska 99503 Office:907-777-8389 Mobile:907-365-9856 jbarrett@hilcorp.com From: Guhl, Meredith D (DOA) [mailto:meredith.guhl@alaska.gov] Sent: Thursday, August 07, 2014 2:14 PM To: Luke Keller; Janise Barrett Cc: Davies, Stephen F (DOA) Subject: HV B-14, PTD 212-054, Dev vs. Exp, Additional data required Importance: High Luke, I pulled the Happy Valley B-14 well history file and data to review, prior to the release from confidentiality on 8/30/14. In the well history file there is an email from you to Steve Davies stating that the well should be classified as "Exploratory" instead of"Development". But on both the 10-404 and 10-407 subsequently submitted by Hilcorp Alaska, the well is classified as"Development".Can you clarify this discrepancy for me? The other issue is no electric logs have been received for this well.The mudlogging dataset was received on 9/4/2012. As you know, per Statute AS 31.05.030(d)(2)(B)and Regulation 20 AAC 25.071, all logs must be filed with the commission within 90 days of the completion of a well.As the well was completed on 7/30/2012,the logs are long overdue. According to the 10-407 filed, GR/RES/DEN/NEU, Sonic and CBL logs were acquired. By 8/15/2014, please advise regarding the classification discrepancy and when I might expect the logs(paper and digital) required for this well. If you have any questions, please contact me. Thank you, Meredith Meredith Guhl Petroleum Geology Assistant Alaska Oil and Gas Conservation Commission 2 333 W. 7th Ave, Suite 100,Anchorage, 99501 meredith.guhl@alaska.gov Direct: (907)793-1235 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 Meredith Guhl at 907-793-1235 or meredith.guhl@alaska.gov. 3 STATE OF ALASKA AV A OIL AND GAS CONSERVATION COMti MON . REPORT OF SUNDRY WELL OPERATIONS 1.Operations Abandon U Repair Well U Plug Perforations U Perforate U Other U Install Velocity String Performed: Alter Casing ❑ Pull Tubing❑ Stimulate-Frac ❑ Waiver ❑ Time Extension❑ Change Approved Program ❑ Operat.Shutdown❑ Stimulate-Other ❑ Re-enter Suspended Well❑ 2.Operator 4.Well Class Before Work: 5.Permit to Drill Number: Name: Hilcorp Alaska,LLC Development Q Exploratory ❑ 212-054 3.Address: 3800 Centerpoint Drive,Suite 1400 Stratigraphic❑ Service ❑ 6.API Number: Anchorage,Alaska 99503 50-231-20036-00-00 7.Property Designation(Lease Number): 8.Well Name and Number: • Deep Creek/Happy Valley CO61589 . Happy Valley B-14 9.Logs(List logs and submit electronic and printed data per 20AAC25.071): 10.Field/Pool(s): N/A Deep Creek Field/Undefined Gas Pool 11.Present Well Condition Summary: Total Depth measured 2,005 feet Plugs measured N/A fee , , y true vertical 2,005 feet Junk measured N/A feet PRS Effective Depth measured 1,894 feet Packer measured N/A feet ��` true vertical 1,894 feet true vertical N/Afeet A "' CC Casing Length Size MD TVD Burst Collapse Structural Conductor 112' 10-3/4" 112' 112' Surface 998' 7-5/8" 998' 998' 6,890psi 4,790psi Intermediate Production 1,214' 5-1/2" 1,214' 1,214' 7,740psi 6,390psi Liner Perforation depth Measured depth See Attached Schematic True Vertical depth See Attached Schematic Tubing(size,grade,measured and true vertical depth) 2-3/8" 4.7#/L-80 1,684' 1,684' Packers and SSSV(type,measured and true vertical depth) N/A N/A N/A N/A 12.Stimulation or cement squeeze summary: N/A Intervals treated(measured): N/A Treatment descriptions including volumes used and final pressure: N/A RBDMS MAY 1 4 2014 13. Representative Daily Average Production or Injection Data Oil-Bbl Gas-Mcf Water-Bbl Casing Pressure Tubing Pressure Prior to well operation: 0 1,829 304 0 87 Subsequent to operation: 0 1,304 242 0 66 14.Attachments: 15.Well Class after work: Copies of Logs and Surveys Run N/A Exploratory❑ Development 0 Service ❑ Stratigraphic ❑ Daily Report of Well Operations X 16.Well Status after work: Oil ❑ Gas ❑✓ WDSPL❑ GSTOR ❑ WINJ ❑ WAG ❑ GINJ ❑ SUSP❑ SPLUG❑ 17.I hereby certify that the foregoing is true and correct to the best of my knowledge. Sundry Number or N/A if C.O.Exempt: 314-071 Contact Paul Chan Email pchanahiicorp.com Printed Nam= A./ Paul Chan Title Operations Engineer Signature -1 a •/..- --- Phone 907-777-8333 Date 4/1/2014 Form 10-404 Revised 10/2012 ,--z,-/y Submit Original Only f?,5` Hilcorp Alaska LLC _w. m Weekly Operations Summary Well Name API Number Well Permit Number Start Date End Date HVB-14 50-231-20036-00 212-054 2/9/14 2/12/14 _ Daily Operations: 2/5/2014-Wednesday No operations to report. 2/6/2014-Thursday No operations to report. 2/7/2014- Friday No operations to report. 2/8/2014-Saturday Held JSA, Discussed work to be perform. Moved WOR from SD-8 to HVB-14. Laid containment and prep RU. RU WOR and associated equipment. 2/9/2014-Sunday Test BOPE and accumulators test good 250psi low 3,000psi high. Mixed 60bbl 6 % KCI pump 50bbls kill well remove BPV. R/U tongs drop drift on tubing would not drift inspect tubing for crimp marks from old tong bite on 18 jts. Wait on new tubing. 2/10/2014- Monday Test accumulator and bope test good 250psi low 3000psi hi. Pump 62 bbls 6% KCI kill well remove BPV. R/R tongs attempt to drift tubing would not drift find crimps on tubing from old tong bites 18 jts total. Wait on new tubing. Unload tally and prep to P/U new pipe 2-3/8" L80 4.70 PPF 8 rd tubing. P/U new tubing drift with 1.901 drift and torque to 1,500Ibs RIH 1 WLEG 53 jts 2-3/8" L80 4.70ppf 8 rd tubing 1 x-over 1-1ft 2-7/8" sub 1 hanger. EOT @ 1,684.29' MD. N/D BOPE and kommey. N/U prod tree remove BPV test void to 5,000psi test good. R/D winterization prep to move rig. 2/11/2014-Tuesday No operations to report. nappy valley Well: HV 8-14 SCHEMATIC PTD: 212-054 ' Hilcorp Alaska,LLC API: 50-231-20036-00 Surface Location: KB 610'Above MSL CASING DETAIL X:223720 Y:2190914 SIZE WT GRADE CONN ID TOP BTM. CMT r 10-3/4" Weld Surf. 112' None 7-5/8" 29.7 L80 BTC 6.875 Surf. 998' Surf. 5-1/2" 17 L-80 VAM ST-L 4.892 791' 2,005' 790' TUBING DETAIL a 5-1/2" 17 L-80 VAM ST-L 4.892 Surf. 790' N/A a. VELOCITY STRING DETAIL Surface Hole: ,;'tri 9-7/8"Hole,9.2 ppg WBM 2-3/8" 4.7# L-80 8rd 1.995 Surf. 1,684' P Cement to Surface 1 JEWELRY DETAIL ' NO DEPTH ID ITEM ti 1 790' 4.892 JMZX Liner Hanger rAli Fit PERFORATION DETAIL w. ZONE TOP(MD) BTM(MD) TOP(TVD) BTM(TVD) FT SPF DATE Sterling A 1,689' 1,703' 1,689' 1,703' 14 6 7/30/2012 ?fie I., Production Hole: + 6-3/4"Hole,9.2 ppg WBM Cement to TOL @ 790' 4. ,a Pt Via to Sterling A ll 44,5 I : TD = 2,005'MD/TVD PBTD = 1,894'MD/TVD 1 Revised 3/31/2014 by TDF OF T Azos�P.* /' is'F 4'_ ! �S or G\ � �� - l\, \ _.. �. .I lCr -- — — 333 West Seventn Avenue ( OV1.:RNOR SEAN PARNH.II. Anchorage, Alaska 99501-3572 Wain: 907 27°.1233 rRa � YO7./76.7542 Paul Chan Operations Engineer Hilcorp Alaska, LLC t 3800 Centerpoint Drive, Suite 100 4 Anchorage, AK 99503 Re: Deep Creek Field, HappyValley Sterling A Pool, HappyValley B-14 Sundry Number: 314-071 Dear Mr. Chan: Enclosed is the approved application for sundry approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. As provided in AS 31.05.080, within 20 days after written notice of this 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. A request for reconsideration is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. Sincerely, Cathy P. oers er Chair DATED this / y of February, 2014. Encl. RECEIVED STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION FEB 0 5 2014 APPLICATION FOR SUNDRY APPROVALS p� ��''++ 20 MC 25.280 AOG V C 1.Type of Request: Abandon ❑ Plug for Redrill ❑ Perforate New Pool ❑ Repair Well❑ Change Approved Program ❑ Suspend ❑ Plug Perforations ❑ Perforate ❑ Pull Tubing ❑ Time Extension ❑ Operations Shutdown ❑ Re-enter Susp.Well ❑ Stimulate ❑ Alter Casing ❑ Other: Install Velocity String E. 2.Operator Name: 4.Current Well Cla s: 5.Permit to Drill Number: Hilcorp Alaska,LLC Exploratory 2yP i0Development C'. >"0. 212-054 . 3.Address: Stratigraphic ❑ 1 v;' Service ❑ ' I+ 6.API Number: 3800 Centerpoint Drive,Anchorage AK,99503 Z 50-231-20036-00-00 . 7.If perforating: 8.Well Name and Number. What Regulation or Conservation Order governs well spacing in this pool? N/A Will planned perforations require a spacing exception? Yes ❑ No Q Happy Valley B-14 • 9.Property Designation(Lease Number): 10.Field/Pool(s): Deep Creek Field/Happy Valley C061589 Deep Creek Field/Happy Valley Sterling A Pool 11. PRESENT WELL CONDITION SUMMARY Total Depth MD(ft): Total Depth TVD(ft): Effective Depth MD(ft): Effective Depth TVD(ft): Plugs(measured): Junk(measured): 2,005 2,005 1,894 1,894 N/A N/A Casing Length Size MD TVD Burst Collapse Structural Conductor 112' 10-3/4" 112' 112' Surface 998' 7-5/8" 998' 998' 6,890psi 4,790psi Intermediate Production 1,214' 5-1/2" 2,005' 2,005' 7,740psi 6,390psi Liner Perforation Depth MD(ft): Perforation Depth TVD(ft): Tubing Size: Tubing Grade: Tubing MD(ft): See Attached Schematic See Attached Schematic 5-1/2" 17#/L-80 790 Packers and SSSV Type: Packers and SSSV MD(ft)and TVD(ft): N/A and N/A N/A and N/A 12.Attachments: Description Summary of Proposal U 13.Well Class after proposed work: 6'14 i'1 Detailed Operations Program ❑ BOP Sketch 0Exploratory Q'y?.,,t/ tratigraphic Li] Development ' Service ❑ 14.Estimated Date for 15.Well Status after proposed work: Commencing Operations: 2/9/2014 Oil ❑ Gas Q WDSPL ❑ Suspended ❑ 16.Verbal Approval: Date: N/A WINJ ❑ GINJ ❑ WAG ❑ Abandoned ❑ Commission Representative: N/A GSTOR ❑ SPLUG ❑ 17.I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Paul Chan Email pchan@hiicorp.com Printed Na -au!aill Title Operations Engineer Or Signature Phone 777-8333 Date 2/5/2014 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number: 3\'-1- O r\ Plug Integrity ❑ BOP Test Er Mechanical Integrity Test ❑ Location Clearance ❑ Other: 300 a D 5--- SQA re; !— / RBDMS AY 09 2014 Spacing Exception Required? Yes ❑ No [t Subsequent Form Required: / 0 – LI 01-1 xf..7 APPROVED BY Approved by: P COMMISSIONER THE COMMISSION Date: 2.-7_ Z- -/../ Submit Form and Form 10-403(Revised 10l 12) Approve atloGi 1I1dIPor�!months from the date of approve Attachments in Duplicate \'i 111 \\\///777 1� L611)N-51 it 4' . ` y ! ; . • in Well Prognosis Well: HVB-14 PTD: 212-054 Hilcarp Alaska,LLC API: 50-231-20036-00-00 Well Name: Happy Valley B-14 API Number: 50-231-20036-00-00 Current Status: Producing Leg: N/A Estimated Start Date: 2/12/2014 Rig: N/A Reg.Approval Req'd? 10-403 Date Reg.Approval Rec'vd: Regulatory Contact: Tom Fouts 777-8398 (0) Permit to Drill Number: 212-054 First Call Engineer: Paul Chan (907)777-8333 (0) (907) 345-3161 (H) (907)444-2881 (C) Second Call Engineer: Mike Dunn (907)777-8382 (o) Reg.Approval Req'd? 10-403 Date Reg.Approval Rec'vd: Current Bottom Hole Pressure: —290 psi Maximum Expected BHP: —290psi (Based on 0.171 psi/ft gradient at 1,696'TVD) Max. Anticipated Surface Pressure: —280 psi (based on a 0.006 psi/ft gas gradient) Brief Well Summary: Happy Valley B-14 was drilled and completed as a gas well in 2012 and the well is currently flowing"1.8Mcfd and ^'260bwpd at 90psi. Fill was last tagged with a 2.80" GR at 1,838'on 5/1/13.The well flowed at low rates until compression was installed. Justification: The well will reach a critical unloading rate around October 2014 and a velocity string is required to remain - above the required unloading rate. Rig Work Outline: 1. MIRU Moncla Rig 405. From rig floor, obtain an accurate measurement of RKB to tubing hanger load shoulder and note on morning report. 2. Notify AOGCC at least 24 hours before expected time of BOPE test. 3 oD r 5:13. Set BPV in 5-1/2" tubing hanger profile. Set test dart in BPV....__ 7 / _ o 4. ND tree. ND adapter flange. NU new tubing spool. ✓ 5. NU BOPE and test to 250psi LOW and 3,000psi HIGH per standard AOGCC procedure. This will also test the new tubing spool connections. Pull dart and BPV.- 6. Loadpits with filtered 6% KCI. Kill well bybullheading6% KCI brine. 7. RU 2-3/8"tubing handling equipment. 8. PU one joint of 2-3/8" tubing and MU 1/2 mule shoe on bottom. 9. Continue RIH with 2-3/8" tubing to± 1,670' MD. • 10. MU tubing hanger with crossover from 2-7/8" to 2-3/8" and land. Run in lock down screws. Back out landing joint. Test tubing hanger void to 5,000 psi for 10 charted minutes. 11. RD tubing running tools. 12. ND BOP. 13. NU adapter flange and production tree. PT to 3000 psi. 14. RDMO Moncla Rig 405. .. ....... .. • Well Prognosis 14 Well: HVB-14 PTD: 212-054 Hilcorp Alaska,LU API:50-231-20036-00-00 Post-rig work: 1. Tie well in 2. RU slickline 3. Swab well to unload 6% KCI brine 4. RD slickline Attachments: 1. As-built Well Schematic 2. Proposed Well Schematic 3. Moncla BOP Schematic Happy Valley . .11 SCHEMATIC Well: HV B-14 Hileorp Alaska,LLC As Completed: 7/26/2012 Surface Location: KB 610'Above MSL CASING DETAIL X:223720 Y:2190914 SIZE WT GRADE CONN ID TOP BTM. CMT "'' 10-3/4" Weld Surf. 112' None ti» ,.. 7-5/8" 29.7 L-80 BTC 6.875 Surf. 998' Surf. 5-1/2" 17 L-80 VAM ST-L 4.892 791' 2,005' 790' TUBING DETAIL . ► 5-1/2" 17 L-80 VAM ST-L 4.892 Surf. 790' % 441,, Surface Hole: Ai i 9-7/s"Hole,9.2 ppg WBM JEWELRY DETAIL 4 -0 Cement to Surface NO DEPTH ID ITEM :::1,>4 1 1 790' 4.892 JMZX Liner Hanger Y + '"';' ► PERFORATION DETAIL a+ ZONE TOP(MD) BTM(MD) TOP(TVD) BTM(TVD) FEET SPF DATE ' Sterling A 1,689' 1,703' 1,689' 1,703' 14 6 7/30/2012 •> Production Hole: 6-3/4"Hole,9.2 ppg WBM Cement to TOL @ 790' A i 7': R! Sterling A ,r b S i.i: r.o.W s , ;tet TD = 2,005'M D/TVD PBTD = 1,894'MD/TVD Revised 8/28/12 by TDF nappy valley Well: HV B-14 . -ti PROPOSED PTD: 212-054 Hilcorp Alaska.LLC API: 50-231-20036-00 Surface Location: KB 610'Above MSL CASING DETAIL X:223720 Y:2190914 SIZE WT GRADE CONN ID TOP BTM. CMT t L10-3/4" Weld Surf. 112' None 4i 7-5/8" 29.7 L-80 BTC 6.875 Surf. 998' Surf. 5-1/2" 17 L-80 VAM ST-L 4.892 791' 2,005' 790' 41 TUBING DETAIL s 54/2" 17 L-80 VAM ST-L 4.892 Surf. 790' N/A VELOCITY STRING DETAIL Surface Hole: 9-7/8"Hole,9.2 ppg WBM 2-3/8" 4.6# L-80 1.992 Surf. ±1,670' Cement to Surface , >‹,:::—.E 1 JEWELRY DETAIL NO DEPTH ID ITEM , 1 790' 4.892 JMZX Liner Hanger PERFORATION DETAIL ZONE TOP(MD) BTM(MD) TOP(TVD) BTM(TVD) FEET SPF DATE . Sterling A 1,689' 1,703' 1,689' 1,703' 14 6 7/30/2012 Production Hole: 6-3/4"Hole,9.2 ppg WBM Cement to TOL @ 790' ) Sterling A TD = 2,005'M D/TVD PBTD = 1,894'MD/TVD Revised 1/29/2014 by TDF /•• Deep Creek (Happy Valley) Moncla Rig 405 Hiikorn u:,.ka.1,1.4 7" BOP � ' 0 1-1111 111 111 111 111 1 1 2.57' \ Shaffer 7 1/16 5000 T • / _I \ \ 2 3/8-3%variable 7---ti , , CAMERON 4 I D 3.68' H 000 Blind H 7 1/16 5000 I �\ N \ \. / / /It ini ininfitt Choke and Kill valves are 2 1/16 10M 1.56' 1 ^•4 ., 7 1/16 5000 t /I r ��, i 40I ii r u STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION GAS WELL OPEN FLOW POTENTIAL TEST REPORT 1a.Test: Q Initial U Annual U Special lb.Type Test: El Stabilized ❑ Non Stabilized Q Multipoint ❑ Constant Time ❑ Isochronal ❑Other: 2.Operator Name: 5.Date Completed: 11.Permit to Drill Number: Hilcorp Alaska, LLC 7/30/2012 212-054 3.Address: 6. Date TD Reached: 12.API Number: 3800 Centerpoint Drive,Suite 100,Anchorage,AK 99503 7/20/2012 50- 231-20036-00-00 4a. Location of Well(Governmental Section): 7. KB Elevation above MSL(feet): 13.Well Name and Number: Surface: 2,302'FSL,292'FEL,SEC.21,T2S,R13W,S.M. 610 Happy Valley(HV)B-14 Top of Productive Horizon: 8.Plug Back Depth(MD+TVD): 14.Field/Pool(s): 2,302'FSL,292'FEL,SEC.21,T2S, R13W,S.M. 1,894'MD(1,894'TVD) Deep Creek Field/Happy Valley Total Depth: 9.Total Depth(MD+TVD): 2,302'FSL,292'FEL,SEC.21,T2S, R13W,S.M. 2,005'MD(2,005'TVD) Sterling 4b.Location of Well(State Base Plane Coordinates NAD 27): 10. Land Use Permit: 15. Property Designation: Surface: x- 2223730 Y-2190914 Zone- 4 N/A Deep Creek Unit(C061589) TPI: x- 2223730 Y-2190914 Zone- 4 16.Type of Completion(Describe): Total Depth: x- 2223730 Y-2190914 Zone- 4 5-1/2"monobore 17.Casing Size Weight per foot, lb. I.D. in inches Set at ft. 19. Perforations: From To 7-5/8" 29.7 6.875 998 SterlingA 1,689' 1,703' 18.Tubing Size Weight per foot, lb. I.D.in inches Set at ft. 5-1/2" 17 4.892 790 20. Packer set at ft: 21.GOR cf/bbl: 22.API Liquid Hydrocardbons: 23.Specific Gravity Flowing Fluid(G): 790' N/A N/A 0.6332 24a. Producing through: 24b.Reservoir Temp: 24c.Reservoir Pressure: 24d. Barometric Pressure(Pa): Q Tubing 0 Casing 68 F° 471.7 psia @ Datum 1696 TVDSS psia 25.Length of Flow Channel(L): Vertical Depth(H): Gg: %COP: %N2: %H2S: Prover: Meter Run: Taps: 1696 0.6332 0.151 18.619 0 26. FLOW DATA TUBING DATA CASING DATA Prover Choke Pressure Diff. Temp. Pressure Temp. Pressure Temp. Duration of Flow No. Line X Orifice Size(in.) Size(in.) psig Hw F° psig F° psig F° Hr. 1. X 414 42 414 2.0 2. X 409 42 409 2.0 3. X 405 43 405 2.0 • 4. X 401 43 401 2.0 5. X Basic Coefficient Flow Temp. Super Comp. Pressure Gravity Factor Rate of Flow No. (24-Hour) h Pm Factor F Factor (�,Mcfd Fb or Fp Ft g Fpv 1. 0.6332 1,006 2. 0.6332 2,026 3. . 0.6332 2,435 4. 0.6332 3,059 5. Temperature for Separator for Flowing No. PrT Tr z Gas Fluid Gg G 1. 501.67 0.6332 2. 501.67 0.6332 3. 502.67 Critical Pressure 0.6332 4. 502.67 Critical Temperature 0.6332 5. i Form 10-421 Rev. Vs \ V 3 0 201 ,rerst•�,, ' -' N REVERSE SIDE Submit in Duplicate Pc Pc2 Pf 475 pf2 225625 No. Pt Pt2 Pc2-Pt2 Pw Pw2 Pc2-Pw2 Ps Ps2 Pf2-Ps2 1. 467.06 218145.0436 7479.9564 2. 463.18 214535.7124 11089.2876 3. 460.8 212336.64 13288.36 4. 458.15 209901.4225 15723.5775 5. 25. AOF (Mcfd) 42,603 n 1 Remarks: I hereby certify that the foregoing is true and correct to the best of my knowledge. Signed 7� Title Reservoir Engineer Date 11/30/2012 DEFINITIONS OF SYMBOLS AOF Absolute Open Flow Potential. Rate of Flow that would be obtained if the bottom hole pressure opposite the producing face were reduced to zero psia Fb Basic orifice factor Mcfd/ ,I hwPm Fp Basic critical flow prover or positive choke factor Mcfd/psia Fg Specific gravity factor, dimensionless Fpv Super compressibility factor= ITT dimensionless Ft Flowing temperature factor, dimensionless G Specific gravity of flowing fluid (air=1.000), dimensionless Gg Specific gravity of separator gas(air=1.00), dimensionless GOR Gas-oil ratio, cu. ft. of gas (14.65 psia and 60 degrees F) per barrel oil (60 degrees F) hw Meter differential pressure, inches of water H Vertical depth corresponding to L, feet(TVD) L Length of flow channel, feet(MD) n Exponent(slope)of back-pressure equation, dimensionless Pa Field barometric pressure, psia Pc Shut-in wellhead pressure, psia Pf Shut-in pressure at vertical depth H, psia Pm Static pressure at point of gas measurement, psia Pr Reduced pressure, dimensionless Ps Flowing pressure at vertical depth H, psia Pt Flowing wellhead pressure, psia Pw Static column wellhead pressure corresponding to Pt, psia Q Rate of flow, Mcfd (14.65 psia and 60 degrees F) Tr Reduced temperature, dimensionless T Absolute temperature, degrees Rankin Z Compressibility factor, dimensionless Recommended procedures for tests and calculations may be found in the Manual of Back-Pressure Testing of Gas Wells, Interstate Oil Compact Commission, Oklahoma City, Oklahoma. Form 10-421 Revised 7/2009 Side 2 c 0 N r < N d 0 0 N1nN- Ln ON CD- v v E LL b ELL c r- l- r r 2 0 L u_ Q X M CO N M O) co (-6 CL <(6 LLJCO M N N O • N ti 4- Q I` CL -c,: 0 0 O rM O) O)) tf) Q O Otf) O N N d N m Lo Lo c Q. r` tl ) CO O co M 1) O O = Q M CO O If) LL co Nt r+ 32 M M Lf) V) 03 Es O O O L ( 0 0 O) O r = d LL Y _ CO d N 1- > f6 o U) U) N- U) _ d a. o. co ._. 0 - N C C d Q 0 0 O 2 U c 0 T co -o v w N N 10 r 2 2 a o o o • c + • m Co a co M O) CO0 LL c V C. M I N I LL 0 CI) V 2 2 N • - i0 a a) 1Y '47. COo a o q in 1() fN x>> a > x 3. > x N a > N = C C C O ° a r c °O -a to N ` A. , ami a O V ;g U N W u) v 0 >6" � d N LL N o N y O h !O N a M N r CD N V M N GN H ds (zisd9OI)zdv (�) I Gas Rate(MMscfd) 0 0 0 0 0 0 0 0 0 0 0 0 o O o 0 O co c0 et N 0 00 c0 a N O O 00 a N O O M N N N NN r O O O O O O -I I I I � 1 1 r 1 I I t N M S M N M 1 O 1 N N Cl 8 N M O O r: N M O b O N M 3 0 O _0 LL NM 'D C O W an Oi M O O co M O N o M O o • •, •• • O LL OD es M C W N 5 N: z Q O ? O LL M £ a O i:Q N o ‘-`6°:" # M 4 .17 O II LL eit so 12 5 M m W �_ N d N m ML. M m O = O h F • a M N 0 > v ? Ve M co o••••• v 3 LL 101 1 M Ora W v> x Ni lo- To M 3 O o a M > M -, O m N o N_ > T Q Ma. O S a N N : Y. re NU 1l! y m n m Ip 0 r Mo o Pm m m O O O 0 Op► p0 0 0 0 0 0 0 0 0 0 0 O O Li� IMO cN0 IO cO0 Y! N Ino 100 N 3 IMf1 N ,Ti, b § 8 V V a M 3 O ((e)Isd)aJnssald aae;pueg (2) Debra Oudean Hilcorp Alaska, LLC GeoTech 3800 Centerpoint Drive, Suite 100 Anchorage, AK 99503 Tele: 907 777-8337 Flilrnrlt; litrkn.L1.{. Fax: 907 777-8510 E-mail: doudean@hilcorp.com DATE 9/21/2012 To: AOGCC Makana Bender 333 W. 7th Ave. Ste#100 Anchorage, AK 99501 DATA TRANSMITTAL TRADING BAY UNIT M-31A Well Samples BOX NUMBERISAMPLE INTERVAL 1 6900-8640 2 8670-10560 3 10590-11430 it HAPPY VALLEY UNIT B-14 Well Samples BOX NUMBER SAMPLE INTERVAL 1 90-1460 j .rkj 33 2 1460-2005 Please include current contact information if different from above. Please acknowledge receipt by signing and returning one copy of this transmittal or FAX to 907 777.8510 Received By: Date: Tim Reast Hilcorp Alaska, LLC GeoTech 3800 Centerpoint Drive, Suite 100 Anchorage, AK 99503 Tele: 907 777-8339 Hilrorp Uu.ka.I.1,(: Fax: 907 777-8510 E-mail: treast@hilcorp.com DATE 9/03/2012 To: AOGCC 1D‘ (71 Makana Bender 333 W. 7th Ave. Ste#100 Anchorage, AK 99501 DATA TRANSMITTAL HAPPY VALLEY B-14 Prints: HV B-14 MD VISION Service RM Composite Log 2"&5" HV B-14 Formation Log MD 2"=100 HV B-14 LWD Combo Log MD 2"=100 HV B-14 Gas Ratio Log MD 2"=100 HV B-14 Drilling Dynamics MD 2"=100 Happy Valley B-14 Final Well Report.doc Happy Valley B-14 Final Well Report.pdf CD: Final Well Data DAILY REPORTS See CD DML DATA See CD FINAL WELL REPORT Happy Valley B-14 Final Well Report.doc Happy Valley B-14 Final Well Report.pdf LAS FILE HV B-14.1as LOG PDF FILES HV B-14Formation Log MD.pdf HV B-14 LWD Combo Log MD.pdf HV B-14 Gas Ratio Log MD.pdf HV B-14 Drilling Dynamics MD.pdf CD: Final Survey Data None (Well is vertical) Please include current contact information if different from above. Please ackn ledge receipt y signing and returning one copy of this transmittal or FAX to 907 777.8510 Received / V) Date: STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION WELL COMPLETION OR RECOMPLETION REPORT AND LOG 1a.Well Status: Oil ❑ Gas 0, SPLUG ❑ Other ❑ Abandoned ❑ Suspended❑ lb.Well Class: 20AAC 25.105 20AAC 25.110 Development 0 Exploratory ❑ GINJ ❑ WINJ ❑ WAG ❑ WDSPL❑ No.of Completions: Service ❑ Stratigraphic Test ❑ 2.Operator Name: 5.Date Comp.,Susp.,or 13Al2.Permjt to Drill Number: Hilcorp Alaska,LLC Aband.: 7/3 12'�/,2J1;P•/" 212-054 - 3.Address: 6.Date Spudded•/ /k, 13.API Number: 3800 Centerpoint Drive,Suite 100,Anchorage,AK 99503 7/ /20 2-j,/r'" 50-231-20036-00-00 ' 4a.Location of Well(Governmental Section): 7.Date TD Reached�. f Y 14.Well Name and Number: Surface: 2,302'FSL,292'FEL,SEC.21,T2S,R13W,S 7/24121612 A-r•"T HappyValley(HV)B-14 Top of Productive Horizon: 8.KB(ft above MSL): 610' • 15.Field/Pool(s): 2,302'FSL,292'FEL,SEC.21,T2S,R13W,S GL(ft above MSL): 593' - Deep Creek Field/Happy Valley Total Depth: 9.Plug Back Depth(MD+TVD): -�gSterling A /� 2,302'FSL,292'FEL,SEC.21,T2S,R13W,S � •. • 1,894'/1,894' • 4Zhi-Cc'--f-il-e/��cia 4�/� 4b.Location of Wee a) B �eSPlane Co5lina�teqs,NAD 27: oz. .• ry 10.Total Depth(MD+TVD): 16.Property Designation: /IA 1,.�•iy Surface: x- 22 y- 2130014 7')15 • Zone- • 2,005 +2,005' • Deep Creek Field/Happy Valley(C061589). TPI: x- y- Zone- 11.SSSV Depth(MD+TVD): 17.Land Use Permit: :t3774,`ttI a q �t 0 3$ Total Depth: x- 2.224730 y- 2490944 Zone- grnn N/A N/A 18.Directional Survey: Yes Q No ❑ 19.Water Depth,if Offshore: 20.Thickness of Permafrost MDTTVD: (Submit electronic and printed information per 20 AAC 25.050) N/A (ft MSL) N/A 21.Logs Obtained(List all logs here and submit electronic and printed information per 20AAC25.071): 22.Re-drilULateral Top Window MD/TVD: Gamma Ray,Resistivity,Density,Neutron,Sonic and CBL N/A 23. CASING,LINER AND CEMENTING RECORD WT.PER SETTING DEPTH MD SETTING DEPTH TVD AMOUNT CASING FT. GRADE TOP BOTTOM TOP BOTTOM HOLE SIZE CEMENTING RECORD PULLED 10-3/4" Surf. 112' Surf. 112' 7-5/8" 29.7 L-80 Surf. 998' Surf. 998' 9-7/8" 498 ft3 5-1/2" 17 L-80 791' 2,005' 791' 2,005' 6-3/4" 199 ft3 24.Open to production or injection? Yes Q NO❑ If Yes,list each 25. TUBING RECORD interval open(MD+TVD of Top&Bottom;Perforation Size and Number): SIZE DEPTH SET(MD) PACKER SET(MDITVD) See Attached Schematic 5-1/2" 790' 790' RECEIVED26. ACID,FRACTURE,CEMENT SQUEEZE,ETC. ,, -x. ,i.,,•,,..,• DEPTH INTERVAL(MD) AMOUNT AND KIND OF MATERIAL USED ro�p��,�rs AUG 31 Z01Z} AOGCC e.titta/\ . _ 27. PRODUCTION TEST Date First Production: Method of Operation(Flowing,gas lift,etc.): , 7/30/2012 Fjoyyjng Date of Test: Hours Tested: Production for Oil-Bbl: Gas-MCF: Water-Bbl: Choke Size: Gas-Oil Ratio: 8/7/2012 ` 1/24/1900 Test Period —0- 0 1,500 0 70% N/A Flow Tubing Casing Press: Calculated Oil-Bbl: Gas-MCF: Water-Bbl: Oil Gravity-API(corr): Press. 450 0 24-Hour Rate — 01,500 0 N/A 28. CORE DATA Conventional Core(s)Acquired? Yes•❑ No 0 • Sidewall Cores Acquired? Yes ❑ No ❑✓ - If Yes to either question,list formations and intervals cored(MD+TVD of top and bottom of each),and summarize lithology and presence of oil,gas or water (submit separate sheets with this form,if needed).Submit detailed descriptions,core chips,photographs and laboratory analytical results per 20 AAC 25.071. R8DMS SEP 0 4 201Z Form 10-407 Revised 12/2009 CONTINUED ON REVERSE 7-y/U Submit on inal only G .,s(3i�cr 7 ,0e ,z 29. GEOLOGIC MARKERS (List all formations and markers encountered): '30. FORMATION TESTS NAME MD TVD 'Well tested? ❑ Yes ❑✓ No If yes,list intervals and formations tested, briefly summarizing test results.Attach separate sheets to this form,if Permafrost-Top 'needed,and submit detailed test information per 20 AAC 25.071. Permafrost-Base Sterling A 1,679' 1,679 Sterling A Bottom of Sands 1,715' 1,715' Formation at total depth: 31. List of Attachments: 32. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact: Luke Keller 777-8395 Printed Name: Paul Mazzolini Title: Drilling Manager L Signature: / Phone: 907-777-8369 Date: 8/31/2012 INSTRUCTIONS General: This form is designed for submitting a complete and correct well completion report and log on all types of lands and leases in Alaska. Submit a well schematic diagram with each 10-407 well completion report and 10-404 well sundry report when the downhole well design is changed. Item 1 b: Classification of Service wells: Gas Injection,Water Injection,Water-Alternating-Gas Injection,Salt Water Disposal,Water Supply for Injection,Observation,or Other.Multiple completion is defined as a well producing from more than one pool with production from each pool completely segregated. Each segregated pool is a completion. Item 4b: TPI(Top of Producing Interval). Item 8: The Kelly Bushing and Ground Level elevations in feet above mean sea level. Use same as reference for depth measurements given in other spaces on this form and in any attachments. Item 13: The API number reported to AOGCC must be 14 digits(ex:50-029-20123-00-00). Item 20: Report true vertical thickness of permafrost in Box 20. Provide MD and TVD for the top and base of permafrost in Box 28. Item 23: Attached supplemental records for this well should show the details of any multiple stage cementing and the location of the cementing tool. Item 24: If this well is completed for separate production from more than one interval(multiple completion),so state in item 1,and in item 23 show the producing intervals for only the interval reported in item 26. (Submit a separate form for each additional interval to be separately produced,showing the data pertinent to such interval). Item 27: Method of Operation: Flowing,Gas Lift,Rod Pump,Hydraulic Pump,Submersible,Water Injection,Gas Injection,Shut-in,or Other (explain). Item 28: Provide a listing of intervals cored and the corresponding formations,and a brief description in this box. Submit detailed description and analytical laboratory information required by 20 AAC 25.071. Item 30: Provide a listing of intervals tested and the corresponding formation,and a brief summary in this box. Submit detailed test and analytical laboratory information required by 20 AAC 25.071. Form 10-407 Revised 12/2009 Happy Valley SCHEMATIC Well: HVB-14 Hilcorp Alaska.LIE As Completed: 7/26/2012 Surface Location: KB 610'Above MSL CASING DETAIL X:223720 Y:2190914 SIZE WT GRADE CONN ID TOP BTM. CMT 10-3/4" Weld Surf. 112' None 7-5/8" 29.7 L-80 BTC 6.875 Surf. 998' Surf. S 1/2" 17 L-80 BTC 4.892 791' 2,005' 790' TUBING DETAIL 5-1/2" 17 L-80 Vam St' 4.892 Surf. 790' Surface Hole: Jewelry Detail 9-7/8"Hole,9.2 ppg WBM No Depth ID Item Cement to Surface ' 1 7904.892 JMZX Liner Hanger 1 - Perforation Detail _A , Zone Top(MD) Btm(MD) Top(TVD) Btm(TVD) Feet SPF Date Sterling A 1,689' 1,703' 1,689' 1,703' 14 6 7/30/2012 Production Hole: 6-3/4"Hole,9.2 ppg WBM Cement to TOL @ 790' j /,gy- /7o3 "b Sterling A A • TD = 2,005' PBTD = 1,894' Revised 8/28/12 by TDF Hilcorp Alaska, LLC Well Operations Summary Well Name API Number Well Permit Number Start Date End Date HV B-14 50-23120036-00-00 212054 7/7/12 7/31/12 Daily Operations: 07/7/2012-Saturday MOB rig from Swanson River to HV B-14; Wait on daylight to resume MOB rig components 07/8/2012-Sunday Cont to MOB rig equipment, lay felt, liner and mats. Spot rig and skids. ; Wait on daylight to resume RU (both crews working dayshift) 07/09/2012-Monday Lay matting, spot rig pumps,spot AWS pits, install degasser,spot DSM shack; Spot crew shack, hook up shore power, build containment and spot fuel tank; Raise mast,spot sub base,water tank and dog house; Wait on daylight to resume RU (both crews working dayshift) 07/10/2012-Tuesday Install landings for doghouse,install windwalls, install 4"valve on conductor; Assemble diverter stack, RU comm in DSM shack, recieve service shacks and equip; Wait on daylight to resume RU (both crews working day shift) 07/11/2012-Wednesday Cont NU diverter, scope up derrick,spot service shacks, raise and pin rig floor; Spot choke manif, spot Halliburton tank,set shakers,take on fuel ;Wait on daylight to resume RU (both crews working day shift) 07/12/2012-Thursday NU annular and flow nipple,spot coil tank,fab 8" line for pits, install pvt's; Cont fab 8" lines, MU vent line and anchor blocks, install floor panels,; RU waterlines, cont install pvt sensors, install flowline"T" on shakers; Wait on daylight to resume RU (both crews working day shift) 07/13/2012-Friday Fab flowline, install PVT sensors, plumb coil tank hopper, berm around rig; Install and test gas monitors; Build and set signage at pad entrance, RU hand tongs,wire in Halliburton tank; Wire in coil tank,wire in SLB shack,string PVT cords; Weld up flow line, install lighting around rig, install hydraulic lines, ; Install pump controls and function test,spot cuttings tank 07/14/2012-Saturday Cont weld up flowline,calibrate PVT sensors, perform diverter function test,; gas alarm test, pvt tests and flow show check with AOGCC Rep Bob Noble,; install mouse hole and power swivel sock on rig floor, install Canrig monitors; Function all agitators, c pumps and shakers, load and ship forklift to Swanson ; Build containment for mud products and offload floats, MU kelly hose; Stage power swivel on rig floor, prep to slip to new drill line; Slip to new drill line, build 200 bbls spud mud in coil tank; Fab and weld up equalizer line and transfer pump between mud tanks; Lay liner and spot pipe wrangler, cont offloading mud products 07/15/2012-Sunday Spot and service pipe wrangler, bolt up piping on C pump and equalizer; Clean out shaker tubs and install screens,stage handling equipment on rig floor; Spot catwalk and beaver slide on drillers side,stage BHA#1 on pipe racks; Install gas trap on shaker,transfer 280 bbls mud to pits, build 100 bbls mud ; MU 9 7/8" mill tooth, mud mtr,XO, NM stab, NM PDC, NM stab and MWD pup; Drill string displacing water, knife valve leaking, remove vent line; Remove knife valve and service, MU knife valve and vent line,fill stack(ok) ; PU 1 jnt HWDP, RIH tag at 110', break circ and check surface lines,; Adjust shakers,fix flowshow,fix hydraulic leak on swivel head; Drill from 110'to 176',wob 10-15K,30 rpm, 159 spm at 1034 psi, up wt 22K; Rotate and recip while CBU; POOH lay down 3 jnts HWDP, PU 2 jnts NMDC's,XO and 1 jnt HWDP 07/16/2012-Monday PU RIH with 2 jnts NMDC's and 1 jnts HWDP, RU flowline jet; Clear flowline and possum bellies of cuttings;Cont drilling from 176'to 508'; CBU x 2, rotate and reciprocate for short trip; POOH from 508'to 143'(NMDC's) ; Service rig and power swivel ; RIH from 143'to 508' and MU power swivel; Cont drilling from 508'to 750' 07/17/2012-Tuesday Page 1 of 4 11 Hilcorp Alaska, LLC Well Operations Summary Well Name API Number Well Permit Number Start Date End Date HV B-14 50-23120036-00-00 212054 7/7/12 7/31/12 Daily Operations: Cont drilling 9 7/8 hole from 750 to 1,005 ; CBU x 2 rotating and reciprocating at 469 gpm-1,421 psi; POOH from 1,005'to 500'to wipe hole, RIH to 1,005'and kelly up; CBU x 2, pump nut plug sweep to check hole gauge; POOH from 1,005', LD BHA#1; Pull wear bushing, clean and prep rig floor to run casing;_RU Weatherford to run 7 5/8"casing, RU fill up hose and fill trip tank; Held PJSM with rig crew and Weatherford; MU shoe track,fill pipe and check floats, run total 24 jnts 7 5/8" 29.7#L80; Casing drifted at 6.750", BakerLok'd all shoe track couplings and above FC; Installed centralizer 10'above shoe and 10' below FC; Ran bow spring centralizers every other jnt up to 300', MU casing hanger jnt; and landed in profile, MU circ swedge and hose 07/18/2012-Wednesday RD Weatherford casing equipment and clear rig floor,circ at 230 gpm,34K up wt; Spot SLB cementers and run hoses,cont circ,prep to build spacer in pill pit; Pill pit hopper could not handle the polymer,called for SLB's blender,cont RU; Load and MU plug launcher,CO to long bails,test hardline at 1000 and 2000 psi ; Spot SLB blender,plumb in to coil tank, mix MudPush, PJSM,work on pump truck; Pump 35 bbl 10 ppg spacer,drop bott plug,_pump 70 bbls 12 ppg lead and 25 bbls; 15.4 ppg tail,displaced with 42 bbls 8.8 ppg mud, bumped plug, FCP 500 psi; Held 1000 psi for 3 min and bled off, 1/4 bbl back to truck,floats held; RD and released SLB cementers,flush stack,clean up cellar box; Back off hanger jnt, MU pack off tool,set packoff,test void at 250/3000 psi; Set test plug, ND vent line and diverter; NU Shaffer_11"5M BOP's,clean Halliburton tank_„ 07/19/2012-Thursday Cont NU BOP stack, MU test jnt and attempt shell test. Retighten various flanges; Chain stack to 4 corners, RU trip tank,grease choke manifold,shell test good; Start BOP test at 15:00 hrs with AOGCC Rep Jeff Jones witnessing testing; Test all componants at 250/3,000 psi and annular at 250/1,500 psi; Had 3 fail/pass issues which were rectified(HCR, koomey air,gas buster line); RD test equip,set wear ring, stage BHA#2 for PU; MU BHA#2, RIH 10 stands HWDP+1 stand DP; Circ and cond mud,test MWD; RU chart recorder,close rams, psi up to 1,500 on surf casing,chart for 30 min; RIH 1 stand DP, PU and RIH 1 single to tag at float collar 07/20/2012-Friday TIH tagged top of float collar(wipers)at 911',drill out shoe track+20'; At 1,025'CBU x 2 at 216 gpm, PU into casing; RU chart,close annular,psi pp to 170_psi for EMW of 12_ppg.on shoe for 15 min• Drill 6 3/4" hole from 1,025'to 1,495'at 60 rpm, 250 gpm at 1,073 psi; CBU x 2 to clean hole for wiper trip; POOH from 1,495'to shoe at 998',TIH hole to 1,495'with no problems. ; Cont drilling from 1,495'to 1,680' 07/21/2012-Saturday Cont drilling 6 3/4" ire from).680'to TD at 2,005',clean coil tank for KCL; Rotate and reciprocate while circulating to clean hole; POOH from 2,005'0'with no problems, RIH to 2,005'; Rotate and reciprocate while circulating to clean hole; POOH rack back HWDP and DP in derrick, LD BHA#2; Spot Halliburton unit, RU, MU and run Quad Combo OH logging suite, RD unit; Remove MWD sensor from standpipe gooseneck, MU 6 3/4" bit and sub; RIH with cleanout assembly BHA#3 07/22/2012-Sunday Cont RIH with BHA#3 to 2,005',tagged approx 30'of fill, PU and MU swivel; Wash and ream to bottom at 2,005',CBU x 2, rotate and reciprocate; Shut down pump,check for flow, POOH and LD 18 jnts 3 1/2" DP; Cont POOH to HWDP, racking back 3 1/2" DP in derrick; POOH LD HWDP,jars and bit using chain tongs as pipe spinner is out of service; R.U_Wea>herf_orthcas.ing Yao]s,_torque.turn_andxack_5_1/2" liner; Held PJSM with Weatherford and rig crews; MU float and shoe track assembly,fill and check same, PU and RIH 26 jnts 5 1/2"; V&M ST-L 17#L-80 liner+ 19'pup jnt; MU Baker C-2 ZXP, HMC Liner Hanger Assembly; MU head pin and circ pipe volume to ensure hanger assembly is clear; Cont RIH with 3 1/2" DP from derrick top filling every stand; MU Baker cement head on DP jnt 25 in mousehole, MU circ hose; Break circ 46 spm, 131 gpm, 250 psi,start washing to bottom; PU 2 more singles,did not tag bottom,found mistake in joint count on tally; Rack back 13 stands DP, LD hanger, PU RIH 2 joints 5 1/2"liner; MU hanger assembly, RIH 12 stands DP; MU cement head on single,wash to bottom and tag on depth at 2005' 07/23/2012-Monday Page 2 of 4 11 Hilcorp Alaska, LLC Well Operations Summary Well Name API Number Well Permit Number Start Date End Date HV B-14 50-23120036-00-00 212054 7/7/12 7/31/12 Daily Operations: Circ and reciprocate string, prep for cementing; Held PJSM with Schlumberger, Baker,Weatherford and rig crew; RU and blow air through hardline to pump truck, line up to pump down DP; Pumped 5 bbls water ahead, PT lines at 1000 psi low/5000 psi high; Pump 14 bbls MudPush II at 10.0 ppg at 4 bpm 370 psi,start reciprocating 10'; Shut down and flush blender lines to cellar box,batch 12 ppg LiteCRETE; _Pump 36 bbls cement at 12 ppg,4 bpm at 250 psi; Flush lines to cellar,drop wiper dart and kick out plug with 5 bbls water; Schlumberger displaced with 27 bbls 8.8 ppg mud at 4 bpm,slowed to 3 bpm; With 22 bbls away at 800 psi, bumped plug with 2500 psi and held 5 minutes; Pressured up to 4000 psi and held for 5 minutes, bled off and floats held; Had .75 bbl flow back to truck,Weatherford released run tool with 15 rounds;To the right, up weight 23K verified hanger was released, PU while rolling pump; Pulled out of hanger assembly, increased pump rate to 77 spm at 275 psi; Took 14 bbls MudPush returns, 18 bbls cement and 12 bblsmu.dxetltms,_TD cuttings box. No problems while cementing or releasing.CIP at 10:00, 7-22-12; RD release Schlumberger,vac truck cleaned out cuttings box; POOH rack back 12 stands DP, LD Baker running tool; Rack and tally 2 7/8 string,clean mud tanks for filtered KCL RU 2 7/8"tools; MU cleanout BHA #4,4 3/4" bit+5 1/2"casing scraper+2 XO's+35 jnts PH 6+; Above and below NOGO polish mills+scraper/brush/magnet assembly+25 jnts DP; Ease down and tag NOGO mill on liner top at 790', PU 10',rotate 10 rpm; Ease down and polish liner top as per Baker rep, PU 5' stop rotation, CBU x 5; Clean coil tank for freshwater and KCL,fill tank with water; POOH to 7 5/8"scraper, RIH to within 2'of NOGO(4 3/4" bit at 1894'); Build 20 bbl hi-vis spacer, in rig pill pit, pump spacer followed by fresh water; to displace hole to clean water. Flush all surface lines and pumps with water; Pumped a total of 4000 stks,cleaned all mud tanks; Short trip to 7 5/8"scraper,add 100 bbls water to coil tank to build 6%KCL 07/24/2012-Tuesday RIH 12 stands 3 1/2" DP; Load coil tank with water, mix KCL at 6%, rig up filter skid; While mixing tested casing/liner lap at 1,500 psi for 30 min on chart(good); Displace well to 6%KCL,flush trip tank lines and vac out trip tank; POOH LD 12 jnts 3 1/2" DP; Repair rig hydraulics (no spill);Cont LD 3 1/2"and 2 7/8" pipe,mills,scrapers and bit; CO handling equipment, PJSM, rack 5 1/2"casing, RU torque turn; MU seal assembly, PU RIH 18 jnts 5 1/2"VAN ST-L 17#casing, MU jnt 3 1/2"; MU power swivel, roll pump and ease into hanger top,saw 200 psi; Increase in psi, bled off and cont to engage seal assembly to NOGO 30' in; PU rack back swivel, MU hanger jnt and landing jnt, land hanger; Up wt 20K,down wt 20K, block wt 7K,6.58'of seals engaged; BO landing jnt, MU packoff assembly and install, RILD's; RU test pump,test.5 1/2"x 7 5/8"at 1,000 psi for 30 min on chart(good); RU and test 5 1/2" production at 1,000 psi for 30 min on chart(good) set BPV; ND BOP's, RD floor equipment, pipe wrangler and trip tank,vac out pits 07/25/2012-Wednesday NU adaptor flange and tree. Test adaptor flange at 5,000 psi and tree at 3,500 psi. RD floor equipment, clean mud tanks for shipping, ship out DC's, jars, scrapers, Baker cement head and running tool, new and used bits, XO's, subs, mud lab, mud products and Canrig unit. Remove windwalls and flowline, RD drillers station, remove floor and sub-base. Remove mudlines and suction lines, remove stairs,remove equalizer line on pitd. Rig teleased at 06:00 on 7-25-12. 07/26/2012-Thursday RD/Demobe. 07/27/2012-Friday Continue to RD/Demobe. 07/28/2012-Saturday Continue to RD/Demobe. 07/29/2012-Sunday Complete RD/Demobe. RU Pollard E-line and perform cement bond log from 1,895' PBTD to ZXP Liner Packer Assembly at 790'. RD E-line. RU slickline,swab fluid with swab cups. Swab down to 1,750'. 07/30/2012-Monday Pressure well with gas to 540 psi. RU Pollard e-line, pressure test lubricator to 550 psi, RIH and perforate well with 3-3/8" hollow carrier Buns, 6 spf, 60 degphase 14' lone from 1,689'-1,703'. Function tested safety devices, control equipment, etc. RD E-Line, turn well over V to operations to test and flow well. Started flowing well at 1530 hrs on 7/30/12. 07/31/2012-Tuesday Page 3 of 4 IIHilcorp Alaska, LLC Well Operations Summary Well Name API Number Well Permit Number Start Date End Date HV B-14 50-23120036-00-00 212054 7/7/12 7/31/12 Daily Operations: No Drlg Activity,well flowing to production. Page 4 of 4 o al ISI§ S §§S§o giiii 1 g m J ,.,p,Y)Y)Y) Y) .Y)Y) Y)IA.N N IA.Y)Y)Y) Y)Y)YI IAN d NNNNN 00000 NNNNN 000.0 0000. 2 xg Q levilli mo P.pp gy ^ O nnn n nsnU go 7 11111 11111 11111 111m 0441 N ..YIN. wow.. ...N N ..... ...N N N tt++11 IN(� YYII YYII YIGI YYII t�Vy t�VI CgIm.Im..WAN nN00 l•IW NN V mN 00ImC-=! -: ?OOi:g. V � ilznnnn� FF� F F�F� I^.F�I^m.l^m. 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IA a 3 w 0 m••p pp pp��pp pp��YYII {mp�lyV tt��!��yy (mp yy pmp Emp m N U O m-§p, 0)-o V 1 C..0 0 0 0 0 .54'4474 .0 0 0 0 NNNNN 0 0 0 0 0 • C F p 8 o N N ,a N 0T g of ° 60000 66666 66666 66666 66666 Oj LL Ouioi O 0) O m m m O 2 0 n N m f n W T» ' >N N ;0:�2 m Q 'rn" g maid �'0ZZ'm' 0 a2Y 2221 2,N 22:6 p N pF8 O8 2q 73 gN.1 glt, H.11HOp Wl O ^0) ndmd pgN N-O - .^ N aVHI. 2.. aw. ^mmoE a) N 0 o g Cof • N Q Si $ o !M'96 2 ; -- --- g n vi gl e . m C Y1 2''r' m '� fy d 313a m o $ V� (G y r G V LL 0 0 0 •Y~YiIVVl l� m .. m ma�3(75� m 0 Wy ' o >�2Q a°=c9w E wa c R b e 6 N N r G 5 a G ¢ N N 0 HV B-14 Mud Density Vs Depth 0 , MW-ppg 500 1000 L 0. 3 SN 1500 2000 2500 7.0 7.5 8.0 8.5 9.0 9.5 10.0 10.5 11.0 11.5 12.0 Mud Density(ppg) Davies, Stephen F (DOA) From: Luke Keller[Ikeller@hilcorp.com] Sent: Wednesday, June 13, 2012 10:23 AM To: Davies, Stephen F (DOA) Cc: Kate Kaufman; Paul Mazzolini Subject: HV B-14 Well Classification Steve, - Per our discussion, HV B 14 should be classified as an "Exploration Well" instead of a "Development Well" because it falls under the category of a new pool above a deeper proven pool. The well was incorrectly classified as a "Development"well in the application for permit to drill paperwork. In our discussion you mentioned that a revised 10-401 was not necessary at this time. Let me know if that changes or if you need some additional documentation/information concerning HV B-14. Luke Keller Drilling Engineer Hilcorp Alaska, LLC 907-777-8395 1 riA I SEAN PARNELL,GOVERNOR t rti )Li Li ALASKA OIL AND GAS 333 W.7th AVENUE,SUITE 100 CONSERVATION COMMISSION ANCHORAGE,ALASKA 99501-3539 PHONE (907)279-1433 FAX (907)276-7542 Paul Mazzolini Drilling Manager Hilcorp Alaska, LLC 3800 Centerpoint Drive Anchorage, AK 99524 Re: Deep Creek Field, Sterling Undefined Gas Pool, Happy Valley B-14 Hilcorp Alaska, LLC Permit No: 212-054 Surface Location: 2302' FSL, 292' FEL, SEC. 21, T2S, R13W, S Bottomhole Location: 2302' FSL, 292' FEL, SEC. 21, T2S, R13W, S Dear Mr. Mazzolini: Enclosed is the approved application for permit to drill the above referenced development well. This permit to drill does not exempt you from obtaining additional permits or an approval required by law from other governmental agencies and does not authorize conducting drilling operations until all other required permits and approvals have been issued. In addition, the Commission reserves the right to withdraw the permit in the event it was erroneously issued. Operations must be conducted in accordance with AS 31.05 and Title 20, Chapter 25 of the Alaska Administrative Code unless the Commission specifically authorizes a variance. Failure to comply with an applicable provision of AS 31.05, Title 20, Chapter 25 of the Alaska Administrative Code, or a Commission order, or the terms and conditions of this permit may result in the revocation or suspension of the permit. Sincerely, Cathy P. Foerster Chair DATED this day of May, 2012. cc: Department of Fish 8s Game, Habitat Section w/o encl. (via e-mail) Department of Environmental Conservation w/o encl. (via e-mail) 0s1S�% RECEIVED' STATE OF ALASKA APR 2 4 2012 ALASKA OIL AND GAS CONSERVATION COMMISSION PERMIT TO DRILL AOGCC 20 AAC 25.005 1 a.Type of Work: 1 b.Proposed Well Class: Development-Oil ❑ Service- W ktj 0 Single Zone ❑ lc.Specify if well is proposed for: Drill ❑: ` Redrlll ❑ Stratigraphic Test ❑ Development-Gas Q" Service-Supply ❑ Multiple Zone ❑ Coalbed Gas ❑ Gas Hydrates ❑ Re-entry ❑ Exploratory ❑ Service- WAG 0 Service-Disp ❑ Shale Gas ❑ 2.Operator Name: 5. Bond: Blanket Q Single Well El 11.Well Name and Number: Hilcorp Alaska,LLC Bond No. 22035244 ' Happy Valley B-14 . 3.Address: 6.Proposed Depth: 12.Field/Pool(s): 3800 Centerpoint Drive,Anchorage AK,99524 MD: 2000' • TVD: 2000' Sterling A - 4a. Location of Well(Governmental Section): 7.Property Designation(Lease Number): Surface: 2302'FSL,292'FEL,Sec 21,T2S,R13W,S . C061589 • Top of Productive Horizon: 8.Land Use Permit 13.Approximate Spud Date: 2302'FSL,292'FEL,Sec 21,T2S,R13W,S N/A 6/1/2012 Total Depth: 9.Acres in Property: 14.Distance to Nearest Property: 2302'FSL,292'FEL,Sec 21,T2S,R13W,S 2534.42 acres !,2 t)(� - .9 4b.Location of Well(State Base Plane Coordinates-NAD 27): 10.KB Elevation above MSL: 607' 15.DlstarfceQ to Na efb--en Surface: x- 223730.0 . y- 2190914 • Zone- 4 to Same Pool: No pool established for this horizon , 16.Deviated wells: Kickoff depth: feet - 17.Maximum Anticipated Pressures in psig(see 20 MC 25.035) Maximum Hole Angle: degrees Downhole: 886 psi • Surface: 686 psi . 18.Casing Program: Specifications Top - Setting Depth - Bottom Cement Quantity,c.f.or sacks ,4 Hole Casing Weight Grade Coupling Length MD ND MD ND (including stage data) Conductor 10-3/4" 45.5 L-80 BTC 100 0 0 100 100 Surface 9%g 7-5/8" 29.7# L-80 BTC 1000 0 0 1000 1000 346 ft3 Int Prod (-8 5-1/2" 17# L-80 STL 2000 0 0 2000 • 2000 • 132 ft3 t) .ft �,L e' 85 Tieback !S 7-Iz 19. PRESENT WELL COND(T ON SUMMARY(To be completed for Redrill and Re-Entry Operations) Total Depth MD(ft): Total Depth ND(ft): Plugs(measured): Effect.Depth MD(ft): Effect.Depth ND(ft): Junk(measured): Casing Length Size Cement Volume MD ND Conductor/Structural Surface Intermediate Production Liner Perforation Depth MD(ft): 1674-1741' Perforation Depth ND(ft): 1674-1741' 20. Attachments: Property Plat Q BOP Sketch❑ Drilling Program Q Time v.Depth Plot Q Shallow Hazard Analysis Ell Diverter Sketch❑] Seabed Report 0 Drilling Fluid Program Q 20 MC 25.050 requirements Disi 21. Verbal Approval: Commission Representative: Date 22. I hereby certify that the foregoing is true and correct. Contact Printed Name HA qi_ / 4ZZOL,A// Ti /P-1 1 LLI Al G A/in/via 6E,Q Signature ' i..-a =_ Phone g07-777- 535 Date D411ql20l7_. Commission Use Only Permit to Drill 9 API Number: 'fin Permit App yai i\ See cover letter for other Number. Z/2 05 5o Z3(-,ltbj,�•cv Date: p� `2 requirements. Conditions of approval: If box is checked,well may not be used to explore for,test,or produce coalbed methane,gas hydrates,or gas contained in shales: / Other: 4 3en0 los. S so `/cs f- Samples req'd: Yes❑ No[v]/ Mud log req'd: Yes [J No 2; S-I/ fetC_r Hie-","( Com-ase J[til/ H2S measures: Yes❑ No[� Directional svy req'd: Yes No[tl� • gi �tco✓e4. J L 7 ii-/$- i/ . 01"4/0‘.• . rrrx.. .5 m..,p✓6 y r'C,islY'W,,,1.fit r-Z t 44c . .✓ / , IPPROVED BY THE COMMISSION DATE:5-0-1z COMMISSIONER ,,,y ORIGINAL ,,k Form 10-401(Revised 7/2009) This permit is valid for 24 months from the date of approval(20 MC 25.005(g)) Submit in Duplicate/e7/01.4._ ir • Hilco Paul Mazzolini Hilcorp Alaska,LLC mania , y Drilling Manager P.O. Box 244027 Anchorage,AK 99524-4027 Tel 907 777 8369 4/16/2012 Email pmazzolini@hilcorp.com Commissioner Alaska Oil&Gas Conservation Commission RECEIVED 333 W. 7th Avenue Anchorage, Alaska 99501 APR 2 4 2012 Re: Happy Valley,Well HV B-14 AOGCC Dear Commissioner, Enclosed for review and approval is the application for the Permit to Drill well B-14 from pad"B" in the Happy Valley field. HV B-14 is a 2000'MD/TVD development gas well planned to be drilled vertically from pad"B"and targets a previously unproduced reservoir,the Sterling A gas sand. Drilling operations are expected to commence approximately June 1st, 2012 depending on the progress of other ongoing projects. A spacing exception is not required as no wells are capable of producing from the same pool. An exception to regulation 20 AAC 25.035 (c)(1)(A) which states, "...a diverter vent line with a diameter of at least 16 inches, unless a smaller diameter is approved by the commission to account for smaller hole size..." is requested. HV B-14 surface hole will be 9-7/8", Hilcorp requests the use of a 12"diverter vent line. Pursuant to 20 AAC 25.005(c)&(d),the following is included: 1. Plat identifying the property on which the well will be drilled. 2. Diagram &description of blowout prevention equipment. 3. Information on drilling hazards. a. MASP calculations are attached per 20 AAC 25.005(c)(4)(A) b. Target reservoir and predicted pore pressures are indicated in attached HV B-14 Well Design Summary. 4. Formation integrity test procedure. 5. Planned casing&cement program HV B-14 Well Design Summary. 6. An 11" Schaffer annular will be used for a diverter while drilling 9-7/8" surface hole. Schematics are attached. 7. Drilling fluid program 8. Tabulation of predicted depths with equivalent formation pressures. 9. Seismic refraction or reflection analysis— Not required, for exploratory or stratigraphic test well only. 10. Requirements of 20 AAC 25.025 have been met. a. HV B-14 covered under bond no.22035244 11. Copy of drilling design summary. 12. General description of waste disposal. Operator does not wish to request authorization under 20 AAC 25.080 for an annular disposal operation in the well. Hilcorp Alaska,LLC Page 1 of 2 1 • a. Qualified drilling waste will be delivered to Aimm Technologies, Inc or Emerald Services, Inc for appropriate inerting & disposal pursuant to state& federal regulations. 13. Requirements of 20 AAC 25.050(b) have been met. a. Plat showing path of proposed wellbore including all adjacent wellbores within 200'is attached. b. All wellbores within 200'of proposed wellbore are owned by Hilcorp. If you have any questions, please don't hesitate to contact myself at 777-8369 or Luke Keller at 777- 8395. Sincerely, C)-(J 1/1/1/re-L--. - Paul Mazzolini Drilling Manager Attachments: HV B-14 Cover Letter HV B-14 BOP drawing HV B-14 10-401 HV B-14 Casing Design HV B-14 Drilling Design Summary HV B-14 Days vs Depth plot HV B-14 Drilling Fluid Summary HV B-14 FIT Procedure HV B-14 Plat HV B-14 Wellbore Diagram HV B-14 Cement calculations HV B-14 Drilling Waste Plan HV B-14 Deep Creek Unit MAP HV B-14 Geologic Info HV B-14 Deep Creek Unit MAP2 HV B-14 Diverter Drawing HV B-14 MASP calculations HV B-14 Diverter line Drawing HV B-14 Wellhead Schematic Hilcorp Alaska, LLC Page 2 of 2 11 Happy Valley Well B-14 Hilcorp Well Design Summary Emir cviavesir HV B-14 Well Design Summary Happy Valley B-14 is a development gas well planned to be drilled vertically to 2000'. Pay interval is the Sterling A at 1667' to 1734'. Rig will be drilled with Aurora Well Service Rig #1 (AWS #1). Basic Well Information Lease: Deep Creek Unit Well Name: B-14 Estimated Spud Date: 6/1/2012 Field: Happy Valley Productive Horizon: Sterling A Total Depth: 2000' MD / TVD Pad: B Surface Location: 2302' FSL, 292' FEL, Sec 21, T2S, R13W, S X=223730, Y=2190914, NAD27, ASP, Zone 4 Planned BHL: 2302' FSL, 292' FEL, Sec 21, T2S, R13W, S Ground Elevation: 593' AMSL KB to WH: 14' Casing Program Hole Tube Weight Length Top Btm Size (in) 0.D. (lbs / ft) Grade Conn (ft) MD/TVD MD/TVD (in) (ft) (ft) - 10-3/4" 45.5 L-80 BTC 100' 0 100' 9-7/8" 7-5/8" 29.7 L-80 BTC 1000' 0 _ 1000' 6-3/4" 5-1/2" 17 L-80 STL 1200 800 2000 - 5-1/2" 17 L-80 STL 800 0 800 5/7/2012 Page 1 of 4 Happy Valley Well B-14 HilcorpWell Design Summary c Well Control Summary Hole Section Equipment Test Pressure (psi) 9-7/8" • 11" 3M Schaffer Annular (Used as diverter) • 11" 3M Schaffer Annular 5-1/2" • 11" 3M Schaffer LWS Double ram (3-1/2" 250/3000 fixed pipe rams in upper cavity, blind (Annular 2100 psi) rams in lower cavity). Schematics of the well control equipment are attached for reference. NOTE: An exception to regulation 20 AAC 25.035(c)(1)(A)which states, "...a diverter vent line with a diameter of at least 16 inches, unless a smaller diameter is approved by the commission to account for smaller hole size..." is requested. Surface hole size will be 9-7/8", Hilcorp requests the use of a 12" diverter line. d 11 /2 /1116 4Lppro 1-� Ref- ,xe) •030 Anti-Collision Evaluation Summary (e)( )(-5) B-12 and B-13 are drilled from the same pad. Wellbore ellipses will not touch, however B-14 will be drilled with a mud motor / MWD assy and surveyed every 95' while drilling. The B-14 wellbore will be steered away from B-12 and B-13 if necessary. I Diverging Close B-14 Path Ellipse Se aration p p Approach Well Well Status (MD ft) (ft) From (ft) B-12 Producing 0-2000 70' - B-13 Producing 0-2000 70' - 5/7/2012 Page 2 of 4 11 Happy Valley Well B-14 Hilec22 Well Design Summary Energy Formation Integrity Testing Test Point, Projected Test Fluid Density Projected Projected 10' Below... Depth (TVD) Type Used for Test Test (EMW Surface ppg) Pressure 7 5/8" Shoe 1000' FIT 9.0 12.0 156 psi Note: Anticipated fracture gradient at 7-5/8" shoe is 0.77 psi/ff(14.8 ppg) based on offset well data. 12 ppg was chosen as the FIT threshold to allow for appropriate kick margin but avoid fracturing the formation. Casing Testing Fluid Density in Test String Casing Pressure Test Duration Casing Burst (PSI) 7-5/8" 9.0 1500 30 min 6890 psi 5-1/2" 8.5 1500 30 min 7740 psi Mud Program Summary Section Depth Mud Type Density Viscosity PV YP API FL i (MD ft) (ppg) (sec) 9-7/8" hole & 100' - 2% KCI / EZ 8.8- 6-3/4" Prod. 2000' mud 9.2 60-100 10-30 25-30 510 Formation Markers Zone Top MD/TVD ft(RKB) Pore Pressure EMW Requirement psig (ppg RKB) Coal 1031 457 8.5 Coal 1183 524 8.5 Coal 1276 565 8.5 Sterling B 1502 665 8.5 Coal 1661 735 8.5 Sterling A 1667 738 8.5 Coal 1734 768 8.5 Coal 1933 856 8.5 TD 2000 886 8.5 5/7/2012 Page 3 of 4 Happy Valley Well B-14 Hiles Well Design Summary PantyHV B-14 Drilling and Completion Summary 1 Prior to AWS Rig #1 mobilization to Pad "B": a. Prep & level pad for rig. b. Drill conductor into place at 100' below ground level. c. Install wellhead. d. Dig out and set cellar & mousehole. e. N/U diverter "T" and layout diverter line. AA,<-: Y V"sP 2 Mobilize rig to pad, N/U 1 1" diverter assy. 3 M/U 9-7/8" drilling assy and drill surface hole to 1000' MD/TVD. 4 Pull a wiper trip to surface, condition hole as necessary for running casing. 5 L/D Drilling BHA, R/U 7-5/8" casing handling equipment. 6 Run 7-5/8" surface casing to 1000' MD/TVD. a. Ensure XO to DP and FOSV made up and ready while running casing. b. Cement surface casing with lead and tail cement. Plqnned top of cement at s face. ,��+ �< 111t$pe 7 N/U and test 11" xM BOP 8 M/U 6-3/4" drilling assy. TIH to TOC. Test casing to 1500 psi / 30 min. Drill out shoe track and conduct FIT to 12 ppg EMW. 9 Drill 6-3/4" hole to 2000' MD/TVD. Take MWD surveys every 95'. 10 Pull wiper trip to shoe and clean up hole as necessary. TOH and stand back BHA. 11 R/U and run quad combo open hole logs (GR, CNL-LDT, Res, Sonic). 12 Make another wiper trip to TD. 13 TOH, R/U and run 5-1/2" 17# liner to 2000' (TOL at 800'). a. Ensure XO to DP and FOSV made up and ready while running liner. 14 Cement prod casing with litecrete cement (12.5 ppg). Bring TOC to 800', MD/TVD. Test JMZX liner top packer to 1500 psi / 20 min. 15 TOH, P/U tapered workstring, TIH and clean out liner, polish PBR, displace wellbore to FW, TOH, LDDP. 16 R/U and run 5-1/2" prod tubing & prod seal assy to 800' MD/TVD. a. Ensure XO to DP and FOSV made up and ready while running casing. b. Spot pkr fluid behind prod tubing c. Test prod annulus to 1500 psi / 20 min. Test prod bore to 1500 psi / 30 min. 106 5 f -7--vv 17 N/D BOP, Install & test tree. 18 RDMO AWS Rig #1. 19 Sterling A will be selectively perforated using E-line after the rig has departed. 5/7/2012 Page 4 of 4 Happy Valley Well B-14 Hilcorp Mud Program Emma Company Surface Hole Recommendations (100' to 1000'): Mud type: 8.8ppg 2%KCl/EZ MUD fresh water based drilling fluid. MudPlastic Yield 10 Second MD Viscosity API FL Weight Viscosity Point Gel 100'- 8.8 60-100 10-30 30- 10- 18 <10 1000' 25 System Formulation: 2% KCI/EZ MUD Product Concentration Water 0.905 bbl KCI 7 ppb (11K chlorides) KOH 0.2 ppb (9 pH) BARAZAN D+ 1.25 ppb (as required 30 YP) EZ MUD DP 0.75 ppb(initially 0.25 ppb) DEXTRID LT 1-2 ppb BAROID 41 as required for a 8.8 ppg ALDACIDE G 0.1 ppb BARACOR 700 1 ppb BARASCAV D 0.5 ppb (maintain per dilution rate) Production Hole Recommendations (1000' to 2000'): Mud type: 8.8ppg 2%KCl/EZ MUD fresh water based drilling fluid. MD Mud Viscosity Plastic Yield 10 Second API FL Weight Viscosity Point Gel 1000'- 8.8 60-100 10-30 30- 10- 18 <10 2000' 25 System Formulation: 2% KCI/EZ MUD Product Concentration Water 0.905 bbl KCI 7 ppb (11K chlorides) KOH 0.2 ppb (9 pH) BARAZAN D+ 1.25 ppb (as required 30 YP) EZ MUD DP 0.75 ppb(initially 0.25 ppb) DEXTRID LT 1-2 ppb BAROID 41 as required for a 8.8 ppg ALDACIDE G 0.1 ppb BARACOR 700 1 ppb BARASCAV D 0.5 ppb (maintain per dilution rate) 4/16/2012 Page 1 of 1 Happy Valley Well 8-14 Hilcorp Cement Calculations Enaegy Conway 10-3/4" Casing (Drilled into Place). Note: This string is for structural support of the wellhead and diverter system. 7-5/8" Casing (9-7/8" Hole to 1,000' MD/TVD): Cement volume based on annular volume + 50% open hole excess. Job will consist of lead & tail, TOC brought to surface. Estimated total volume is as follows: Lead: 750' x 0.0383 x 1.5 = 43.1 bbls 43.1 bbls x 5.615 ft3/bbl = 242 ft3 Tail: 250' x 0.0383 x 1 .5 = 14.4 bbls 14.4 bbls x 5.615 ft3/bbl = 80.9 ft3 Shoe Track: 90' x 0.0459 = 4.1 bbls 4.1 bbls x 5.615 ft3/bbl = 23 ft3 * Total: 242 + 80.9 + 23 = 346 ft3 � Z Bgt-S ,p/ ' Lead Slurry (100 sx) Tail Slurry (85 sx) System Extended Conventional Density 12 lb/gal 15.4 lb/gal Yield 2.44 ft3/sk 1.22 ft3/sk Mixed Water 14.349 gal/sk 5.507 gal/sk Mixed Fluid 14.469 gal/sk 5.507 gal/sk Total Volume 242 ft3 104 ft3 Code Description Concentration Code Description Concentration Type1 Cement 94 lb/sk WBWOB Type1 Cement 94 lb/sk WBWOB Additives D110 Retarder 0.12 gal/sk VBWOC D046 Anti Foam 0.2% BWOB D046 Anti Foam 0.2% BWOB D065 Dispersant 0.4% BWOB D079 Extender 2.0% BWOB S002 CaCl2 0.2% BWOB D020 Extender 2.6% BWOB S002 CaCl2 0.2% BWOB 4/16/2012 Page 1 of 2 tir Happy Valley Well B-14 Hilcorp Cement Calculations cony Compawry 5-1/2" Casing (6-3/4" Hole to 2000' MD/TVD): Cement volume based on annular volume + 30% open hole excess. Slurry design is a high solids content CemCRETE system with a solids volume fraction of 53.4 %. Section Calculation Volume 6-3/4" OH x 5-1/2" Liner 1000' x 0.0149 x 1.3 19.4 bbls 7-5/8" Csg x 5-1/2" Liner 200' x 0.0165 3.3 bbls Shoe Track 90' x 0.022 1 bbl Total 24 bbls = 135 ft3 LiteCRETE slurry (135ft3/ 1.57 =86 sx) System LiteCRETE Density 12.5 lb/gal Yield 1.57 ft3/sk Mixed Water 5.476 gal/sk Mixed Fluid 5.476 gal/sk Total Volume 132 ft3 Code Description Concentration D046 Anti Foam 0.2% BWOC Additives D202 Dispersant 0.5% BWOC D400 Gas Control Agent 0.5% BWOC S002 CaCl2 0.1% BWOC 0-2/) TE/0 .51 7b 5/7/2012 Page 2 of 2 4. 03 03 C061588 03 oi/N,eQRod. T2S-13W S.M. O., AD L384 :0 C061589 22 m HV B-14 • N 0 APad C061590 c 0 1,500 3,000 Happy ValleyFeet B Pad HV B-14 1�A F Alaska State Plane Zone 4,NAD27 Hilcorp Alaska,LLC April 10,2012 I ADL384380 i ( 17 \, i C061588 i i i HV-07(BHL) C061589 : 1 ADL384380 HV-10(BHL) HV-03(BHL) f / B Pad HV-11 (BHL f `i Surface Location HV-02(BHL) •� HV-05(BHL) ADL384380 HV-08(BHL).----HV-12,(BHL) HV-04(BHL) i HV-13(BHL) • HV-09(BHL) - A Pad `\ 2s.-3w Surface Location HV-01 (BHL) / _ t 4 C061590 ' — -_ HV-06(BHL) i I i Legend HV 12 HV 13 ADL384380 1 Happy Valley PA L_j Deep Creek Unit 1500 ft radius- 0 Distance to property lines 3000 ft radius- Distance to wells drilling or capable of producing Deep Creek Unit 0 1.000 0 2.0 Feet N Happy Valley 12 and 13 Well Locations State Plane Alaska 4 Projection NorthAmerican Datum 1927 June 27,2007 Maximum Anticipated Surface Pressure Calculation Hilcorp Deep Creek(Happy Valley) B-14 Kenai Peninsula,Alaska Offset Information Well DrIg Date MW thru Sterling A Grad HV B-12 Oct-2007 9.2 0.478 HV B-13 Dec-2007 9.2 0.478 Assumptions: 1. Based on offset drilling&well test data,the pore pressure gradient is predicted to be 0.443 psi/ft from surface to planned total depth of 2000'. 2. Fracture gradients of two closest offsets (HV-12 & HV-13)were 0.78 (1040') &0.77 psi/ft(1170'). For HV B-14, 0.77 psi/ft was used as the most likely fracture gradient. Fracture Pressure at 7-5/8" shoe considering a full column of gas from shoe to surface: For 7-5/8" shoe at 1000'TVD: 1000(ft) x 0.77(psi/ft)= 770 psi 770(psi) - [0.1(psi/ft)*1000(ft)]= 670 psi MASP from pore pressure Max pore pressure at TD (2000' MD/TVD) MASP (Wellbore evacuated to gas column) 2000(ft) x 0.443(psi/ft)= 886 psi SIBHP-gas gradient to surface: 886(psi)- [0.1(psi/ft)*2000(ft)]= 686 psi Summary: 1. MASP while drilling 6-3/4" production hole is governed by fracture pressure at the 7-5/8" shoe 2. MASP during production life is governed by SIBHP-gas gradient to surface. U)03) ) 20 -O / COp, 22$ 0 IIJ kd, _ b)k » k° $ .§ a_0, \ \C� -§- L.. W eR. \r011 \ § \�c ` IL CO C.)03 m § een * 9 o k� / 0000 ,z--1, , 2) 8 » ' 1-2/o IS co A0010 CO ,-» « I-U) } / � g £ 7 #© = k H:! ! c/ ) o. $/ L.:- :0 o.o <2 2 2 k co 0 j ° _ »W E ))§ § ; } 0 a. 00 , 0 0_» §\ ~ aLa \ C•J CV_� \7 0 j0000 \ )2 / k _ -- 00000 k qt {{ §\§/\ § 7\ _ 115 \�/ /§ COm= ID CIJ§ d` ~ \ \ II Happy Valley Proposed new drill 04/02/2012 llilomp\14.4.11.1,11 Happy Valley HV B#14 103/4X75/8X5'/ BOP Section a i ■ Shaffer 11"5M i iifel Shaffer LWS 0 Ni*F1 11"5M (-- i / • o 3 1/8 5M Choke and Kill Valves _ , ikliiiiiiiii" , 4 : V-- 11 5M ` Shaffer LWS 0 11"5M 110-1.111111-1.111.1 ia 0411111•Emb• mollii@em IO 11"5M Multibowl Om' -\ in=14 ,*(. : a Wellhead System _10.1! EN Ir= . ,. . ■ MI (Ardijd 10%" ��?4L 75/8" 5 HV B-14 Days Vs Depth 0 • • • 500 1000 • • • F 15. m tn a w a 1500 2000 • • • • • 2500 1 0 2 4 6 8 10 12 14 16 18 Days Formation Integrity Test (FIT) and Leak-Off Test (LOT) Procedures Note that the terms used in the procedures and the spreadsheet of FIT/LOT results are defined as follows: • Formation Integrity Test (FIT) - Formation is tested to a pre-determined equivalent mud weight. • Leak-Off Test (LOT) - Pressure is exerted against the formation until fluid begins to discernibly pump away. Pressure at which this first occurs is the leak-off point. • LOT Limit- 16.0 ppg EMW for all surface casing shoe tests; determined from previous experience with formation breakdown problems by attempting higher leak-offs. • Open Hole LOTs (OH LOTs)- Leak-off tests performed with open hole from the casing shoe to some point above the target reservoir. Generally done when leak-off is required but could not be achieved just below the casing shoe; or where weaker formations are suspected above the target reservoir but below the casing shoe, and assurance is required of being able to achieve estimated mud weight. Procedure for FIT: 1. Drill 10' of new hole below the casing shoe. 2. Circulate the hole to establish a uniform mud density throughout the system. P/U into the shoe. 3. Close the blowout preventer (ram or annular). 4. Pump down the drill stem at 1/4 to 1/2 bpm. 5. On a graph with the recent casing test already shown, plot the fluid pumped (volume or strokes) vs. drillpipe pressure until appropriate surface pressure is achieved for FIT at shoe. 6. Shut down at required surface pressure. Hold for a minimum 10 minutes or until the pressure stabilizes. Record time vs. pressure in 1-minute intervals. 7. Bleed the pressure off and record the fluid volume recovered. The pre-determined surface pressure for each formation integrity test is based on achieving an EMW at least 1.0 ppg higher than the estimated reservoir pressure, and allowing for an appropriate amount of kick tolerance in case well control measures are required. Where required, the LOT is performed in the same fashion as the formation integrity test. Instead of stopping at a pre-determined point, surface pressure is increased until the formation begins to take fluid; at this point the pressure will continue to rise, but at a slower rate.The system is shut in and pressure monitored as with an FIT. Well Name: HV B-14 Field: Happy Valley Hilcorp Surface Location: Happy Valley Conductor:10-3/4" 607'Above MSL X:223720 Y:2190914 Surface Hole: 9-7/8"Hole,9.2 ppg WBM 7-518",29.7 ppf,L-80,BTC to 1000' Baker HugMl Cmt to surface. /pkr/tie backhes sleeve5-1/2"Jat 800ZX'iner hanger ANTICIPATED FORMATION TOPS&GEOHAZARDS FORMATION FLUID TVD(FT) Est.Pressure PPG Coal none 1031 Normal 8.5 Coal none 1183 Normal 8.5 Coal none 1276 Normal 8.5 Sterling B wet 1502 Normal 8.5 Coal none 1661 Normal 8.5 Production Hole: Sterling A gas 1667 Normal 8.5 6-3/4"hole,9.2 ppg WBM Coal none 1734 Normal 8.5 Liner: 5-1/2",17 ppf,L-80,STL from 800'to Coal none 1933 Normal 8.5 2,000'MD/TVD. Total Depth 1993 Normal 8.5 Cmt to TOL at 800' A PBTD=1900'MD TD=2000'MD/2000'TVD HV B-14 WBD May 2,2012 Drawn by:LEK .. Happy Valley Well B-14 Hi corp Drilling Waste Plan Enemy COMP/4 Driilina Waste Plan Both the 9-7/8" hole and the 6-3/4" hole section will be drilled with a water based drilling fluid. Cuttings will be hauled from the "B" pad to Emerald Technologies, Inc where they will be dried & inerted. Cuttings will be transported to Emerald as they are generated. There is no plan to store cuttings at the drilling site. Cuttings meeting regulatory requirements will be hauled to a land fill at the discretion of Emerald Technologies, Inc after appropriate drying & inerting. In the event Emerald Technologies cannot handle drilling waste from HV B-14, Aimm Technology, Inc will be utilized in the same capacity. 4/16/2012 Page 1 of 1 f Happy Valley Proposed new drill n� 04/02/2012 w.,,r Happy Valley HV B#14 103/4X75/8X5'/ Diverter Section ® wv Annular Preventer Shaffer 1"5M ?NM 11"5M X 13 5/8 5M Knife Gate Crossover spool N ff Diverter Tee,13 5/8 5M FE X FE w/12"ANSI 150 outlet i 11"5MX135/85M Crossover spool ■I■fib IP - 11"5M Multibowl Wellhead System ■.II,�1►�11�■IES O 11. 111j 4111 1 . 1 � 10%" I j`"'s m. --..,.,,, M..3I/,Nbld NOISNbdk3 5 a ,I�'Rai 1 1 ` 3 d �,; 1s = add 9 A31WA AddVH 1 g 4'1 = a i E — ��� „,. NO21A3HO I I N i u.: { ir li / / \\ 1 , \ I1N014 V 1�r/• //) ,/ `,`• \\ i , rrr ..1.....:.. \ A r. / rrr,/ .• \\ . \ g ,rrrr \ k 1 i r; ,\ \ 13 r/r/ •• • • \ \ 2 r''r ••�• \ IS t r/ter ' \ • V 11••'. . ••t•. \ li • ... • et if • • '1''42. '\). ‘\\ \* h. - $ ...B N.- ,11/4., \ \ il j •a0 \• \\ \s\tip ` V%r \\ \` ♦ 1 • a, 1 \ ` \\\;\\ `rrr 0 F. \ \\ \\'� ;rrr/ ; /f `. \\ \ \\ ` , 11 rrr \\ \\ \\.44111°111°° rrr \ \ r \ • r • `\ \` rr rr \ r- Li r r \\ 4dr, \ p i \\ `Orr Z HILCORP ALASKA, LLC HAPPY VALLEY HO-28451 = _ LE ADAPTER, EN J l v 11 5M X 5-1/8 5M 7 DBL D 0 11 5M =MI P 1 I.= lai CASING HANGER, L. 1 r l SMB-22 PORTED II L �J 11x 5-1/2 .--4 , . • W/5 H BPV PREP C1 *.i,) 0-----''''..... -7 - I :ell7 i - 111 . , a 01 .0,,,ILDriri I ��j 11 3M U1 I Li \—2-1/16 5M CASING HANGER, SMB-22 11 X 7-5/8 =II _. / W/SEAL ASSEMBLY • �^ 3%. Ma C O � lJ�/ , ...,41,( Lir .c . __, , , ,___ r �Alb. \—2-1/16 5M mac-'' C u 10-3/4 CASING / O C55 �- S`{r cJ 7-5/8 CASING T..__e" o • 5-1/2 CASING ''.-- Z--...=,< 4 6 ~G / `SEABOARD 5,000 PSI WELLHEAD ASSEMBLY 10-3/4 X 7-5/8 X 5-1/2 RESTRICTED CONFIDENTIAL DOCUMENT TNS DRAMO AND ALL rRTWATIW SUM IETEON ARE TIE raw RT 'c`1-5.5 °p`11 APR12 REV [MUMc PROPERTY CP SEABOARD NRK rte MO Mc _ STIMTTW ON A COTTIE it SAAR &Y. TIErt RECIPIENT AOR5IMD CIQI® DRAWING NO. NOT TO 1®RWUCE W ICA I T)GIIEMN UPON RFNIEBT MAT NO DNCLOMME Cr TN MUM OR TIE NP`"IATpN MOW — P—14840 KRIM RILL K YAK TOA TMD PARTY TrrwT PRIOR ARMEN ',PROVO CN44NT Or SEABOARD NTERNATNWK INC. ON AsEA sc--zEIE0 1 - SEAN PARNELL,GOVERNOR ALASKA OIL AND GAS 333 W.7th AVENUE,SUITE 100 CONSERVATION COMMISSION ANCHORAGE,ALASKA 99501-3539 PHONE (907)279-1433 April 18,2011 1 FAX (907)276-7542 Mr. Larry P. Greenstein Union Oil Company of California P.O.Box 196247 Anchorage,AK 99519-6247 Re: Surface Safety Valve Variance Request Dear Mr. Greenstein: By correspondence dated March 24, 2011, Union Oil Company of California (Union), pursuant to 20 • AAC 25.265(o)(1), requested from the Alaska Oil and Gas Conservation Commission (Commission) a variance to 20 AAC 25.265(c)(1) for wells completed in the following fields: Deep Creek (Happy Valley); Nikolaevsk, Swanson River, Pretty Creek, Ivan River, Stump Lake, Lewis River, Granite Point, Trading Bay, and McArthur River. Union provided additional justification in support of this request by electronic mail dated April 11,2011. Union's variance request for current and future wells in these fields is APPROVED. 20 AAC 25.265(c)(I) requires that a well's surface safety valve (SSV) be located within the vertical run of the well's production tree. The above noted fields operated by Union have been developed using a tree design that locates the SSV on the tree's wing through which well production exits to the flowline, allowing the SSV to remain in the produced fluid stream while providing concurrent well bore access. At least one non-actuated master valve remains in the vertical run of the tree. Union indicates routine NA ell intervention work — including tagging fill, gas lift surveys and valve change-outs, scale checks, reperforating, downhole hydraulic pump maintenance — is frequently performed on the wells due to the type of completions employed by Union. This tree design was chosen to increase the safety and efficiency of well intervention while not increasing the potential for a release to the environment and not compromising the effectiveness of the well's safety system. Placing the SSV on the wing also enables monitoring the tubing pressure when the well is shut in. 20 AAC 25.265(o)(1)authorizes AOGCC to approve a variance from a 20 AAC 25.265 requirement if the variance results in at least equally effective compliance. The Commission finds that Union's request for the Deep Creek (Happy Valley); Nikolaevsk, Swanson River, Pretty Creek, Ivan River, Stump Lake, Lewis River,Granite Point,Trading Bay, and McArthur River fields meets this regulatory standard. S. •- -ly J. n . • erman . Commissioner cc: AOGCC Inspectors(email) COMPLETION SOLUTIONS AUH Fail-Safe Hydraulic Actuator For General Purpose or High-Pressure Applications Halliburton's AUH Hydraulic Actuator is designed for Thread Prokeckor simplicity,ease of maintenance and adaptability.It has fewer parts than most other hydraulic actuators,which improves ■ Upper Skem field performance.This actuator is designed to close upon loss ' ! of control pressure(fail-safe). ,. Hkdraklic Conkrol Presskre Inlek The actuator's unique design has no traveling seals,which Piskon Cklinder contributes to the longevity of the seal packages.Optional Ackkakor Ser ice cold service seal packages enable the actuator to exceed , Disconneck Bolks performance standards for cold,hostile environments. I S Piskon Limit switches,valve position indicators,fusible and standard Hoksing lockout caps,stem protectors,mechanical and hydraulic opening assemblies are also available. Venk Plkg P: ` I I Advantages `' Spring s • Fewer parts-improves performance and reliability we I Packing Ackkakor Disconneck • Standardized lower stem sizes-simplifies spare parts . ' Bolks requirements ' Bonnek • Proven reliability API 6A,PR-2 Appendix F qualified Lo er Skem � ' ■ packing 1 II a 1 011 Gake • Easy maintenance-can be redressed without special tools "' I( Seak or external pressure sources.Piston and upper stem I I Val e Bodk packing is easily removable utilizing actuator service i I ' disconnect bolts. IPI 411/1 • Visual Open-Close Indication upper stem extension II indicates gate position at a glance. 4 pinri d 11111" 00 24 mili 2.,3 iiiii -i AUH Hydraulic Actuator Mounted on a reverse-acting gate valve HALLIBURTON Completion Tools COMPLETION SOLUTIONS Operation Hydraulic control pressure enters the cylinder.The extended stem travels downward until it is practically flush with the top Hkdraklic Conical Presskre of the cylinder,indicating the valve is open.The piston I shoulders against the packing retainer and stops further i i downward force.The gate valve is fully open.The actuator is designed to maintain the valve(reverse-acting)in the open Mekal-ko-Mekal Seak position with hydraulic pressure on top of the piston. I I t Well Presskre ill . - Loss of hydraulic pressure allows pressure in the valve body and spring force to move the stem and gate into the closed um usi ism position.The extended stem indicates the valve is closed.The metal-to- d LIi.11___ metal seat between the actuator bonnet and lower stem serves , as a secondary seal. �LJI� rwiri ,c3 Upstream valve body pressure holds the gate in the closed position.The spring allows the gate to close with less than 100 open Closed psi pressure on the valve body. Maximum Control Pressure Required* 3.00"Diameter Piston 4.25"Diameter Piston 6000 6000 5000 5000 n 4000 0. 4000 / LI 3000 ' 3000 v v 2000 Q 2000 1000 v 1000 .... ::::.--....-------- 0 0 0 2500 5000 7500 10000 0 2500 5000 7500 10000 12500 1500( Valve Pressure(psi) Valve Pressure(psi) Valve Body Size —2 1/16" —3 1/8" *Break-open pressure is maximum pressure required. —2 9/16" —4 1/8" Hold-open pressure required would be approximately 45-55%of this value. a z For more information on AUH Fail-Safe Hydraulic Actuator, please call your local Halliburton representative or email us at completions@halliburton.com. ©2010 Halliburton.All rights reserved.Sales of Halliburton products and services will be in accord solely with the terms and conditions contained in the contract between Halliburton and the customer that is applicable to the sale. H03504 07/10 www.halliburton.com HALLIBURTON Completion Tools B I .3 V B _I V 1=1 •177VOS 1NIBB .'L.3.IVN {'.H1 A.m. 910-B003N3 9NIM5tla oa ON 6-00I,OLLF O .11,1"'"' C ;�„",„o ,0 Booz.V r LO iv0I1VWH0HNI 1VN01.I ld(1V H01 1SIl :S31ON Si21Vd 038381NfN HSVO 01 ?•3d32,1 rrov33Veow tl�e .ONIMVH0 OIHJNJO V SI SIF-11 L 9l3 WV3?JlSdf1 NI 512i0d dl Z/L (5) H11M 0005-8/L—£ AflH.. (ION"A J,l8W3SSV 3A1VA dOIVl10V w"Py. "„„'= 3MS/0118 NSSSd .Aea6o33eA ...... y V—V NO110.S s, a _ E '" 4 / 1 // 7 7 _____ .,,,,„ /.„ . , .) ) „). _ __:„ _ , _ ././. , / , , /.. . . . . ./ „....,_____ \ . .. ,...,,,,z //../7/\. , \4 , /;/ ,;,,-, , „±,i/„/ r . ---, ,r — — — — Av t _ -17-14:: )— . h �li i'1/� i \ ,,,,, Ni..,. ...0 ,, , i —� / co i i/ .111 # • '✓ k { i . Z 1 i i/ �j� f} y 416 Z i �� I 5I it �� ,I/ 1 it .a VZ �_._ 9 1 :,t\:.<'''. AVI 6;; L t V`?�� UJ a\ ���r�v MIA SIH1 NO NMVHS ION ��,%, 3HV 13NNO8 ONV J01Vl10V > / a e,,---9--y r r 0 E k i8 B q4 Y ne Oa (35 al S4 g ,gig Y b Dg I, au 66 y 5 !k o 1 3 /1 8 I Happy Valley Well B-14 Hilco Well Design Summary e c HV B-14 Well Design Summary Happy Valley B-14 is a development gas well planned to be drilled vertically to 2000'. Pay interval is the Sterling A at 1667' to 1734'. • Rig will be drilled with Aurora Well Service Rig #1 (AWS #1). Basic Well Information Lease: Deep Creek Unit Well Name: B-14 - Estimated Spud Date: 6/1/2012 Field: Happy Valley Productive Horizon: Sterling A • Total Depth: 2000' MD / TVD • Pad: B Surface Location: 2302' FSL, 292' FEL, Sec 21, T2S, R13W, S • X=223730, Y=2190914, NAD27, ASP, Zone 4 • Planned BHL: 2302' FSL, 292' FEL, Sec 21, T2S, R13W, S Ground Elevation: 593' AMSL • KB to WH: 14' Casing Program Hole Tube Weight Length Top Btm O.D. Grade Conn MD/TVD MD/TVD Size (in) (in) (lbs / ft) (ft) (ft) (ft) - 10-3/4" 45.5 L-80 BTC 100' 0 100' 9-7/8" 7-5/8" 29.7 L-80 BTC 1000' 0 1000' 6-3/4" 5-1/2" 17 L-80 STL 2000 0 2000 SUPERSEOLti 4/16/2012 Page 1 of 4 Happy Valley Well B-14 HilcorpWell Design Summary B„,mcmpor Well Control Summary Hole Section Equipment Test Pressure (psi) 9-7/8" b ' 11" 3M Schaffer Annular (Used as diverter) • 11" 3M Schaffer Annular 5-1/2" • 11" 3M Schaffer LWS Double ram (3-1/2" 250/3000 fixed pipe rams in upper cavity, blind (Annular 2100 psi) rams in lower cavity). Schematics of the well control equipment are attached for reference. NOTE: An exception to regulation 20 AAC 25.035(c)(1)(A)which states, "...a diverter vent line with a diameter of at least 16 inches, unless a smaller diameter is approved by the commission to account for smaller hole size..." is requested. Surface hole size will be 9-7/8", Hilcorp requests the use of a 12" diverter line. Anti-Collision Evaluation Summary B-12 and B-13 are drilled from the same pad. Wellbore ellipses will not touch, however B-14 will be surveyed every 500' while drilling with a Totco single shot. After drilling each hole section, a continuous North seeking gyro will be run to . accurately determine wellbore location for future reference. If, at any time, survey instruments detect that a wellbore directional correction must be made, a motor/MWD directional drilling assy will be utilized to steer wellbore back to vertical. Close B-14 Path Ellipse Separation Diverging Approach Well Well Status (MD ft) (ft) From (ft) B-12 Producing 0-2000 70' - B-13 Producing 0-2000 70' - 4/16/2012 -- - _ -- Page 2 of 4 Happy Valley Well B-14 Hi cop Well Design Summary Paisr Ceuinmr Formation Integrity Testing Test Point, Projected Test Fluid Density Projected Projected 10' Below... Depth (TVD) Type Used for Test Test (EMW Surface ppg) Pressure 7 5/8" Shoe 1000' FIT 9.0 12.0 156 psi Note: Anticipated fracture gradient at 7-5/8"shoe is 0.77 psi/ft(14.8 ppg) based on offset well data. 12 ppg was chosen as the FIT threshold to allow for appropriate kick margin but avoid fracturing the formation. Casing Testing Fluid Density in Test String Casing Pressure Test Duration Casing Burst (PSI) 7-5/8" 9.0 1500 30 min 6890 psi 5-1/2" 8.5 1500 15 min 7740 psi Mud Program Summary Section Depth Mud Type Density Viscosity PV YP API FL (MD ft) (ppg) (sec) 9-7/8" hole & 100' — 2% KCI / EZ 8.8— 60-100 10-30 25-30 5..10 6-3/4" Prod. 2000' mud 9.2 Formation Markers Zone Top MD/TVD ft(RKB) Pore Pressure EMW Requirement psig (ppg RKB) Coal 1031 457 8.5 Coal 1183 524 8.5 Coal 1276 565 8.5 Sterling B 1502 665 8.5 Coal 1661 735 8.5 Sterling A 1667 738 8.5 Coal 1734 768 8.5 Coal 1933 856 8.5 TD 2000 886 8.5 .- r, a is t;:;a:m.e:, 4/16/2012 Page 3 of 4 - -� • Happy Valley Well B-14 Hilcorp Well Design Summary Bono co.upwr HV B-14 Drilling and Completion Summary 1 Prior to AWS Rig #1 mobilization to Pad "B": a. Prep & level pad for rig. b. Drill conductor into place at 100' below ground level. c. Dig out and set cellar & mousehole. d. N/U diverter "T" and layout diverter line. 2 Mobilize rig to pad, N/U 11" diverter assy. 3 M/U 9-7/8" drilling assy and drill surface hole to 1000' MD/TVD. 4 Pull a wiper trip to surface, condition hole as necessary for running casing. 5 L/D Drilling BHA, R/U 7-5/8" casing handling equipment. 6 Run 7-5/8" surface casing to 1000' MD/TVD. . a. Ensure XO to DP and FOSV made up and ready while running casing. b. Cement surface casing with lead and tail cement. Planned top of cement at surface. • 7 Install wellhead. N/U and test 11" x 3M BOP. Run a continuous, north seeking gyro inside the 7-5/8" surface casing while N/U BOP. 8 M/U 6-3/4" drilling assy. TIH to TOC. Test casing to 1500 psi / 30 min. Drill out shoe track and conduct FIT to 12 ppg EMW. 9 Drill 6-3/4" hole to 2000' MD/TVD. • 10 Pull wiper trip to shoe and clean up hole as necessary. TOH and stand back BHA. 11 R/U and run quad combo open hole logs (GR, CNL-LDT, Res, Sonic). • 12 Make another wiper trip to TD. 13 TOH, LDDP and BHA. 14 Install and shell test 5-1/2" rams in upper ram cavity. 15 R/U and run 5-1/2" prod casing to 2000' MD/TVD. a. Ensure XO to DP and FOSV made up and ready while running casing. 16 Cement prod casing with litecrete cement (12.5 ppg). Bring TOC to 1000' MD/TVD. Test casing to 3000 psi / 15 min. 17 Run a continuous, north seeking gyro from 2000' to 1000'. 18 N/D BOP, Install tree. 19 RDMO AWS Rig #1. 20 Sterling A will be selectively perforated using E-line after the rig has . departed. 4/16/2012 Page 4 of 4 • - Aurora Well Service 3000# BOP Stack 0' Rig Floor Flow Nipple P 6' 5" 11" Shaffer 3K u u 8'5" 11" Shaffer 3K PIPE RAMS � J 11" Shaffer 3K 9'6" BLIND RAMS \ II n Choke Line Kill Line 11" 3K u 11' 1" ((( �*/t 10= KILL SPOOL =MI I 1-7 A 6 I I"300011 C D s ..-- --- --- --- -- Siv1 14' 1" —Starting Head A I .3000# asp` I I",30004 A-3 1/16" 5K HCR valve B-31/16" SK Gate valve C -3 1/16" 5K Gate valve D-3 1/16" 5K HCR valve Varies ISI LTJ E -3" 200# Ball Valve � SUPERSEDEL Aurora Gas / Aurora Well Service Surface - Diverter Line Rig Floor Flow Nipple • 4-6' r-1 AWS 32" Annular Preventer SIZE 11"Shaffer 3M \ J DSA Rental f-1 I-1 • 7-9' • ► 1 3-S 3"SM 13-5/8 5M I I I C 12" Hydraulic Knife Valve 12" 150#ANSI 12" Bluie Line 12.' 100ft of 12" 0.375"Wall Pipe 30" C � 7 r7 ✓ 11-13' s 13-5/8 5M DSA Rental SM • 13-14'� epir, err, ,19.1 rte, , 11 5M Wellhead _ 1 50°0t'` Ground Level =? ---------------=_ =__"__=________ __ _-______ UVtkS-nELi Well Name: Happy Valley B-14 1111 Field: Happy Valley Completion: Proposed Hilcor Surface Location: Conductor:10-3/4",45.5 ppf,L-80 to 100' Happy Valley B-Pad 614.0'Above MSL X:223730 Y:2190914 Sec.21, / T2S,R13W,SM j/� T `'` (ea ' Surface Hole: ,d) 1.._ . 9-7/8"Hole, ppg WBM 7-5/8",29.79.7 ppf,L-80,BTC to 1000' I Cmt with 242 ft3 of 12 ppg lead and 1ocoA /,, 104 ft3 of 15.4 ppg tail"G" r / / / Formation Tops: ,/ / /v L `"` Fluid TVD(ft) Coal None 1031 Coal None 1183 Coal None 1276 �- / 4 Sterling B Wet 1502 / O I c LL: Coal None 1661 / A. °`' cc,6, /r Sterling A Gas 1667 / Coal None 1734 ' Coal None 1933 / TD 2000 / / / Production Hole: 63/4"hole,9ppgWBM 5-1/2",17 ppf,L-80,STL to 2000' Cmt with 132 ft3 of 12.5 lb/gal LiteCRETE. TOC estimated at 1000' / / I Z "ii PBTD=1950 MD/ND TD=2000'MD/TVD HV B-14 WBD April 16,2012 Drawn by:LEK Happy Valley Well B-14 Hilcoorr Cement Calculations Hama 5-1/2" Casing (6-3/4" Hole to 2000' MD/TVD): Cement volume based on annular volume + 50% open hole excess. Slurry design is a high solids content CemCRETE system with a solids volume fraction of 53.4 %. OH volume: 1000' x 0.0149 x 1 .5 = 22.4 bbls 22.4 bbls x 5.615ft3/bbl = 126 ft3 Shoe Track: 45' x .022 = 1 bbl 1 bbl x 5.615 ft3/bbl = 5.615 ft3 — c.i i°°° Total: 126 + 5.62 = 132 ft3 LiteCRETE slurry (83 sx) ✓ System LiteCRETE Density 12.5 lb/gal Yield 1.57 ft3/sk 'r. Mixed Water 5.476 gal/sk Mixed Fluid 5.476 gal/sk Total Volume 132 ft3 Code Description Concentration D046 Anti Foam 0.2%BWOC Additives D202 Dispersant 0.5%BWOC D400 Gas Control Agent 0.5%BWOC 5002 CaCl2 0.1% BWOC StipERCEDED 4/16/2012 Page 2 of 2 11 Happy Valley Proposed new drill 04/02/2012 Holt V.,...,.I l I Happy Valley 10 3/4 X 7 5/8 X 5 1/2 ,Y.' Tree assy,5 1/8 5M X 3 1/8 5M, DD trim, mai; w/9.5 Acme Otis Quick _ _ Union top nm fili es to Hi I. it _..141 /T,, I. i 7( ■ 2 I 1 It l s w* PI '1 U ISI IMP ( t .7� • Oa / . .1 X.,; il `\f ISI 1■t�i .... tnL .) i• •I .,,r,, . w` j C•, J> U w ` ii, 5'h Mandrel hanger needs = to have 5"type H BPV • iii profile Casing spool, MBS-L, ‘0,.;4 rill_1, .. i,. 11 5M stdd X 11 5M -� stdd,w/2-2 1/16 5M €111 r• � ifValve,WKM-M,2 1/16 5M SSO, N type lockdown 11 l 1 - ,. FE, HWO,AA trim pins iI , € I1 Imo■, a 'MI Casing head,MBS-lower, _ Valve,WKM-M,2"LP, 11 5M_F2 210 3/4 SOW I■I 1l 'r :(4,32.- ( o HWO,AA trim "LPOy W: .1411111 o "Mil p r lII10%' SUPERCEDED 5 Ys' Page 1 of 1 Schwartz, Guy L (DOA) From: Schwartz, Guy L (DOA) Sent: Friday, May 04, 2012 10:44 AM To: Luke Keller Cc: Ferguson, Victoria L (DOA) Subject: B-14 Happy Valley (PTD 212-054) Luke, As per our discussion: 1) Provide a vendor diagram of the weread. I can't figure out if OA is threaded connection or not. f J 2) Update drilling/completion plan with a tubing and packer( ie velocity string) as it must have a packer per 20 AAC 25.200(d) . 3) Details on SVS (surface safety valve) 4) Clarification on operatorship in regards tesialwativerpterkeeiefiee 5) BOP stack update if provided one is incorrect. 6) Can you clarify if the 7 5/8"shoe will be cemented off. TOC is planned 1000'. Do you plan on keep shoe open? Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) 5/4/2012 Davies, Stephen F (DOA) From: David Buthman [dbuthman@hilcorp.com] Sent: Monday, April 30, 2012 7:00 AM To: Davies, Stephen F (DOA) Cc: Paul Mazzolini Subject: RE: Happy Valley B-14 Hi Steve, No, the Lower Sterling has not been perforated in any of the A or B Pad wells. Rgds, David B. Buthman Senior Geologist Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 100 Anchorage, AK 99503 dbuthman@hilcorp.com office: 907-777-8375 mobile: 907-854-4543 From: Paul Mazzolini Sent: Saturday, April 28, 2012 8:47 AM To: Davies, Stephen F (DOA); David Buthman Subject: RE: Happy Valley B-14 Steve, I believe this will be the first Sterling A producer in the Happy Valley Field. David Buthman is the Geologist. David, could you confirm this? Regards Paul From: Davies, Stephen F (DOA) 1mailto:steve.davies(a alaska.govl Sent: Friday, April 27, 2012 5:25 PM To: Paul Mazzolini Subject: RE: Happy Valley B-14 Paul, I'm reviewing this permit application, and I have a couple of questions for your geology/ reservoir team. I'm not sure who handles the Happy Valley area. Have any other wells drilled from the Happy Valley A-or B-Pads been perforated in the Sterling A interval? If so,which wells, and are those wells still open to the Sterling A interval? Thanks, Steve Davies AOGCC 793-1224 2 OVERSIZED DOCUMENT INSERT This file contains one or more oversized documents. These materials may be found in the original hard file or check the parent folder to view it in digital format. TRANSMITTAL LETTER HECKLIST WELL NAME 47174 ,0:1 t4/ 7$ / / PTD# 2/Z OS-7 Development Service Exploratory Stratigraphic Test Non-Conventional Well FIELD• dteL POOL: .h) Cireh) 6.(1/ Circle Appropriate Letter/ Paragraphs to be Included in Transmittal Letter Q s o/ CHECK ADD-ONS WHAT (OPTIONS) TEXT FOR APPROVAL LETTER APPLIES MULTI LATERAL The permit is for a new wellbore segment of existing well (If last two digits in Permit No. ,API No. 50- - - API number are between 60-69) Production should continue to be reported as a function of the original API number stated above. PILOT HOLE In accordance with 20 AAC 25.005(f), all records, data and logs acquired for the pilot hole must be clearly differentiated in both well name ( PH) and API number (50- - - ) from records, data and logs acquired for well SPACING The permit is approved subject to full compliance with 20 AAC EXCEPTION 25.055. Approval c perforate and produce / inject is contingent upon issuance of a conservation order approving a spacing exception. assumes the liability of any protest to the spacing exception that may occur. DRY DITCH All dry ditch sample sets submitted to the Commission must be in SAMPLE no greater than 30' sample intervals from below the permafrost or from where samples are first caught and 10' sample intervals through target zones. Non-Conventional Please note the following special condition of this permit: Well production or production testing of coal bed methane is not allowed for{name of well) until after (Company Name) has designed and implemented a water well testing program to provide baseline data on water quality and quantity. (Company Name) must contact the Commission to obtain advance approval of such water well testing program. Rev: 1/11/2008 -0 0 co D m < D 0) D a C,� T -° 0 pr o m CO= T v p ro 3 Io ? 0 a 3 `"Jon 3 ° . -5 N ? 017 A' .. O ..yy.� C/) co.on V O -,No 0 CO O O O co ry __ O O o N O N O CD 3 ,� N N N r� \\` co 0) co co co 0) 0) co W 0) N.) N.) N Ni N (J (J N N N - - (0 Co V 0) (I1 A W N g �� CO CO V 0) 01 A 0) N - 0 (0 CO V O) (Il A 0) N - 0 (O CO 0) (1 A 0) N - 0 V O0) 0) 0 0 Kms, g0cocoo =. 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(D (o p O co 0 7' O C "° (p' m d 7 co O d = O a 71 ° N c DO n w o b ID c a :3 4° o (° 'o m 5 s< , 0) m m 9 Di 6 < (\\l\ n n �1 91. - o ° PJV D W(D < M 7 ._. _ O0 W (� o- C0 m M a 0 -0 Cr -0 CLD, '- i iii 1 X (n O O m 0 N fn n m cu a N 3 (.0 D O ✓ m 3 m n O n CD o 0 m N _ 5" = W m O O ZV F a D 7 C o CD CD 0) O s = 0 it 3 � _ � 3 c • 7 m o • Cr cin O3- 0 3- O a O = 0 _ C 0 7 Z 0 O O co B coco N - 7 - O in n 7 0) 0 v m N (o O N z z z -< -< z Z -< -< -< -< -< -< -< z -< -< -< -< -< -< -< z z z -< -< -< -< -< Z -< -< -< z -< -< Z Z m D D D m 0 D o C 0 m m C 0 m D m m m C C m m > > > C m 0 0 0 D C 0 0 0 m m > > Cl) 'N Cl) Cl) CO Cl) CO 'N Cl) Cl) (n Cl) Cl) Cl) Cl) Cl) Cl) Cl) 0) 0) Cl) 0) 0) 0) Cl) Cl) p Om 0 < O _ Cl) co 3 Co X K 3 N < T. o c o O O O m D m s 7 Z a C n -0 p 0` N co co 0 c to co In m N = m m Q 000 3 0) O O o ° m m m m G7 °) (0 0- CD m m m y m = m 3 .�. �� N 0 0 < Or CD CO N CD_ O O co 7 7 D N 53 p ZO � 0 ._-. (0 CD D 7 -0 0 d 0 0 C - m— 2 3 _ CO co -O+ fon CO N a C o. _a O N 0 W (D CO o St W m C O o 0 a 0 7_ m c c O a c a (o o O o o n < 3 7 St co C N. 0 b n Cl)O ? j co j D d) r a Cl)c co co -0'. a a 0 a (n co ip co n a o o in ;0 3 7• 3 3 0 o Co n. m O �. cn "0 CO CCD C 7 = p A a p * (0 - m a co "m0 3 = m o N 0 0' '0 CD y - S. m c '< U m- (D .7. cT a D m cn (n o -1. o 0 to A cn 7 a = O C I co • co co O a co 2 co $D a co � m 'U O O (0 N m -0 O p 3 .° fl_ .< (0 (O •p < Ell C NCL (° C + 0) O 3 0S co O p 7 d o 0W cn m m ti (o OS Q O m m (<D 0 3 COD -I0 < 0 ° 7 (D J 0 00 0 0 O O Aa)- f y V V O N O 7 (D p (D C mQ • O m p m Vl N O (0 O m Well History File APPENDIX Information of detailed nature that is not particularly germane to the Well Permitting Process but is part of the history file. To improve the readability of the Well History file and to simplify finding information, information of this nature is accumulated at the end of the file under APPENDIX. No special effort has been made to chronologically • organize this category of information. Happy Valley B-14 Deep Creek Field Kenai Borough, Alaska July 14-20, 2012 Provided by: Approved by: David Buthman Compiled by: Larry Resch Justin Rosenblume Distribution Date: July 31, 2012 TD Date July 20, 2012 Happy Valley B-14 2 TABLE OF CONTENTS 1 MUDLOGGING EQUIPMENT & CREW ................................................................................................ 3 1.1 Equipment Summary ...................................................................................................................... 3 1.2 Crew................................................................................................................................................ 3 2 GENERAL WELL DETAILS ................................................................................................................... 4 2.1 Well Objectives ............................................................................................................................... 4 2.2 Well Resume .................................................................................................................................. 5 2.3 Hole Data ........................................................................................................................................ 5 3 GEOLOGICAL DATA ............................................................................................................................. 6 3.1 Lithology Review ............................................................................................................................. 6 3.2 Sampling Program ........................................................................................................................ 10 4 DRILLING DATA .................................................................................................................................. 11 4.1 Daily Activity Summary ................................................................................................................. 11 4.2 Surveys ......................................................................................................................................... 13 4.3 Bit Record ..................................................................................................................................... 14 4.4 Mud Record .................................................................................................................................. 15 4.5 Drilling Progress Chart .................................................................................................................. 16 5 DAILY DRILLING REPORTS ............................................................................................................... 17 Enclosures 2” = 100’ Formation Log MD 2” = 100’ LWD Combo Log MD 2” = 100’ Drilling Dynamics Log MD 2” = 100’ Gas Ratio Log MD Happy Valley B-14 3 1 MUDLOGGING EQUIPMENT & CREW 1.1 Equipment Summary Parameter Equipment Type /Position Total Downtime Comments Computer – Driller’s Monitor Azonics 0 Computer -- Company Man RigWatch Remote (All-In-1) 0 Computer – Directional Driller WITS from RigWatch 0 Computer – Tool Pusher RigWatch Remote (All-In-1) 0 Computer – Mud Engineer RigWatch Remote (All-In-1) 0 Computers – Mudloggers (4) RigWatch Master, DML, RigWatch Remote, WITS Feed (all HP Compaq) 0 Ditch gas QGM gas trap; Flame ionization total gas & chromatography. 0 Hook Load /Weight on bit Deadline Strain Gage n/a Mud Flow In Derived from Strokes/Minute and Pump Output 0 Mud Flow Out Flow Paddle 9 hours Factory Defect; Repaired On Site. Pit Volumes, Pit Gain/Loss Vega Sonic Volume Sensors (5) 0 Pump Pressure Standpipe 1502 Sensor 0 Pump Stroke Counters (2) Proximity Sensors 0 Rate of Penetration None N/A RPM None N/A Torque None N/A 1.2 Crew Mud Logging Unit Type: Arctic Mud Logging Unit Number: ML057 Mud Loggers Years Days Sample Catchers Year s Days Technician Days Larry Resch 12 11 Dan Hillegeist 1 9 Allen Williams 2 Justin Rosenblume 1 11 Taylor Englert 1 2 Howard Lamp 3 Dickey Hudgins 1 3 *1 Years experience as Mudlogger *2 Days at wellsite between rig up and rig down of logging unit. Happy Valley B-14 4 2 GENERAL WELL DETAILS 2.1 Well Objectives Integrated subsurface data indicates an as-yet untested 530 acre closure at the Sterling Sandstone level at the Happy Valley Field. Two wells drilled on the structural crest, Happy Valley 12 and Happy Valley 13, exhibit good gas shows, high resistivity, Density-Neutron cross-over. A pronounced sonic dipole anomaly in the Sterling A is exhibited in a special study of the Happy Valley 12 well. The objective is to drill the Happy Valley B-14 well safely and within budget utilizing the Aurora Gas Services Rig #3. This rig necessarily has certain inadequacies that prevent mechanical depth tracking. Mudlogging data collection was based on pipe tally depth and approximate time to drill kelly down. Happy Valley B-14 5 2.2 Well Resume Operator: Hilcorp Alaska, LLC Well Name: Happy Valley B-14 Field: Deep Creek County: Kenai Borough State: Alaska Company Representatives: Rance Pederson Location: Surface Coordinates 2302’ FSL, 292’ FEL Sec. 21 T2S R13W S Ground Elevation 593.00’ AMSL Rotary Table Elevation 607.67’ AMSL Classification: Exploration API #: 50-231-20036-00-00 Permit #: 212054 Rig Name /Type: Aurora Rig III Spud Date July 14, 2012 Total Depth Date: July 20, 2012 Total Depth 2005’MD/ 2005’ TVD/ 1397.33’SSTVD Primary Targets Sterling A Sands Primary Target Depths 1600’ – 1800’MD Total Depth Formation: 2005’MD/ 2005’ TVD Completion Status: Run 5-1/2” Liner LWD-MWD Services. None Directional Drilling Schlumberger Wireline Logging Services Halliburton Drilling Fluids Service Halliburton CANRIG Logging Geologists: Larry Resch, Justin Rosenblume CANRIG Sample Catchers: Dan Hillegeist, Dickey Hudgins, Taylor Englert 2.3 Hole Data Hole Section Maximum Depth TD Formation Mud Weight (ppg) Dev. (oinc) Casing Diam. Shoe Depth LOT (ppg) MD (ft) SSTVD (ft) MD (ft) SSTVD (ft) Conductor Recent 0.08 10-3/4” 97’ 510.97’ N/A 9-7/8” 1005’ -397.03’ Sterling 9.60 0.51 7-5/8” 999’ -391.03’ 12.0 6-3/4” 2005 -1397.0’ Sterling 8.80 0.58 5-1/2” 2000’ -1392.0’ Standard Completion Happy Valley B-14 6 3 GEOLOGICAL DATA 3.1 Lithology Review Conglomerate, Conglomeratic Sand (100'-240') = various shades of gray with occasional dark grey, black and grayish green clasts; fine to very coarse grain; angular; subprismoidal to prismoidal; very poorly sorted; note abundant well rounded pebble fragments with high impact fracture; locally abundant clay, mica common; occasional woody carbonaceous material and pulpy, sublithic coal; interval changes to predominantly coarse angular to subangular conglomeratic sand. Tuffaceous Clay, Claystone (240'-330') = dominantly light olive gray to medium gray with greenish gray hues, also pale yellowish brown to moderate brown and dark yellowish brown ash clays; very lumpy to curdy, occasionally stiff consistency; dominantly very cohesive to malleable tenacity; very soft, poor induration; nodular cuttings habit; earthy fracture; dull to earthy, occasionally waxy appearance; amorphous to smooth, also gritty to granular texture; inter-bedded within the sand; noncalcareous. Conglomeratic Sand (330'-420') = medium gray to light olive gray with very light greenish grays; dominantly quartz framework, abundant feldspars, greenish and bluish lithics, reddish orange volcanics, common mafics; trace micas; fine to medium, occasionally coarse grain; fair to poorly sorted; subangular to angular, occasionally subrounded; subprismoidal to spherical; surface abrasions common; grains appear etched; unconsolidated; commonly held together with very clayey silica cement; lithic clasts dominantly volcanic and occasionally plutonic; trace metamorphic glacial erratics; mafics have slightly metallic luster; trace accessory biotite; no oil indicators. note interbedded carbonaceous shale, coal = very dark grayish black with occasional brownish stringers through lesser developed sediments; moderate to moderately high density; crunchy to tough, brittle; dominantly firm, friable to moderately hard induration; very common blocky to thinly bladed cuttings habit; dominantly blocky to subplanar fracture; dull to earthy luster; matte to mottled texture; thin laminations interfingering through the clayey sand; noncalcareous; no hydrocarbon indicators. Conglomeratic Sand, Conglomerate (420'- 540') = medium light gray to medium gray; upper fine to upper medium grain; subangular to angular, often very well rounded; subprismoidal to subdiscoidal; unconsolidated; rarely fair to moderately cemented, slightly calcareous with yellowish brown argillaceous matrix; predominately white translucent quartz; locally abundant well rounded translucent volcanic glass; feldspars common; rounded subspherical pebble fragments with high impact fractured surfaces; note reddish orange mafic clasts, biotite. Conglomeratic Sand (540'-660') = medium light gray to medium gray; medium to lower coarse grain, some upper fine grain; subrounded to subangular; subdiscoidal; rare well rounded pebble fragments; rarely consolidated with argillaceous, slightly calcareous cement; dominantly grayish white, translucent quartz; locally abundant well rounded volcanic glass; feldspars common with medium to dark gray, yellowish green, yellowish brown reddish orange clasts; trace sublithic coal; interbedds with light gray to light olive gray tuffaceous clays; soft to firm; pulverulent, crunchy; irregular fracture; dull to subwaxy in part; smooth; gritty in part with sand/ silt component; noncalcareous; biotite common; trace very fine glass shards. Happy Valley B-14 7 Conglomeratic Sand (660'-750') = medium gray to dark gray; upper medium grain, lower coarse grain common, occasional very coarse pebble fragments; subangular to subrounded; subprismoidal; moderate to well sorted in part; occasionally consolidated; grain supported with abundant tuffaceous/ argillaceous matrix; non to rarely slightly calcareous; no visible porosity; dominantly grayish white to translucent quartz; locally abundant well rounded and angular volcanic glass clasts; with interbedded light to medium light gray tuffaceous claystone; silty to slightly sandy in part; occasionally earthy with micro-thin carbonaceous material; note sublithic to poorly developed coal. Tuffaceous Silty Claystone (750'-900') = overall ranges from medium light gray to medium dark gray; moderate to low density; occasionally clumpy consistency; dominantly malleable to sectile, stiff tenacity; soft to slightly firm; occasional firm finer clays; dominant nodular to tabular, rarely irregular cuttings habit; earthy; dominant dull to earthy luster, waxy in places; common matte to mottled texture, silty, gritty to granular in more silty clays; appears interbedded within the sandier layers; noncalcareous; trace carbonaceous materials; no hydrocarbon indicators. Coal, Carbonaceous Material (900'-920') = grayish black to black with dark gray undertones; dominantly moderate to moderately high density; stiff to crumbly tenacity; very poor to slight induration; note firmer larger blocky chips coming over shakers; common blocky to tabular or irregular cuttings habit; some cuttings are very flaky, platy, earthy to blocky fracture; common dull to subresinous luster; dominantly smooth to waxy or matte texture; interbedded within the sands and shows general planar features; noncalcareous; accompanied by about 20 units of gas; no degassing; no hydrocarbon indicators. Conglomeratic Sand, Tuffaceous Claystone (920'-1005') = medium gray to dark gray with olive gray hues; dominantly unconsolidated smoky quartz grains scattered with volcanics, mafics and trace accessory micas; occasionally finer grains better cemented with a dusky yellowish tuffaceous silica cement; interbedded with clayey and ashy volcanic material; occasional silty, gritty clays; trace coal; larger coal washout chips coming over shakers; no hydrocarbon indicators. Conglomeratic Sand, Tuffaceous Sandstone (1005'-1100') = medium gray to medium dark gray; unconsolidated upper fine to lower coarse grain; abundant smoky quartz grains, common feldspars and volcanics; poor to fair sorting, occasionally well sorted; angular to subrounded; spherical to subdiscoidal; common impact marks and grinding on grain surfaces; grains appear frosted; tuffaceous sandstones are cemented with a grayish yellow to pale greenish yellow silica based ash cement; predominantly smoky to pale translucent quartz grains; strong heavy coal seam as well as trace stringers or possible coal washout in cuttings; coals have very flaky to platy and elongated cuttings habit; irregular to blocky; coal seam was accompanied by small gas peak; overall structure very interbedded with trace fingers of coal. Tuffaceous Clay, Claystone (1100'-1240') = medium gray to medium light gray with light olive grays; low to moderate density; commonly clumpy to mushy or pasty consistency; very cohesive, adhesive and occasionally pliable tenacity; soft; poorly indurated; in general structure less, rare wedge like cuttings habit; earthy fracture; earthy and waxy luster, dull when dry; commonly amorphous to slightly silty or gritty texture; significantly larger clay/ ash bed than anything more shallow; no visible structure; noncalcareous; continued stringers of coal throughout section; no notable degassing. Happy Valley B-14 8 Sandstone, Tuffaceous Sandstone, Tuffaceous Claystone (1240'-1340') = medium to medium light gray, light gray in part, often with slight pale yellowish brown hues; fine to lower medium grain; subangular to subrounded; poor to fair sorting; discoidal; poor to occasionally well cemented with abundant tuffaceous, argillaceous matrix; silty in part; calcareous; grades towards a sandy to silty claystone; no visible porosity; clay component very hydrophilic, swelling and crumbling easily when rehydrated; predominately milky white translucent quartz with black to very dark gray clasts common; note reddish orange, pale yellowish green and pale blue green lithics; cleaner tuffaceous clays with abundant mica, very fine translucent glass shards; earthy clays often containing carbonaceous flakes and detrital clasts; note black lithic coal. Sandstone (1340'-1440') = light gray to very light gray, often with slight yellowish brown hues; fine to medium grain; subrounded to subangular in part; good to fair sphericity; fair to moderate sorting; poorly consolidated with abundant argillaceous matrix; often silty; generally grain supported; noncalcareous; no visible porosity; predominantly grayish white to slightly transparent quartz with abundant gray to grayish black various shades of green and reddish orange clasts; note coal in 1400 ft sample; no out gassing observed. Tuffaceous Claystone (1440'-1500') = medium dark gray to medium light gray, occasionally yellowish gray to light brownish gray; soft; good cohesion; poor adhesion; pulverulent to brittle in part; irregular to blocky; dull to subwaxy; subsucrosic with increased silt and very fine sand content; varies from hydrophilic to hydrophobic; occasional very fine flaky and granular carbonaceous detritus; noncalcareous. Tuffaceous Claystone/ Siltstone (1500'-1600') = medium dark gray to medium gray, occasionally light gray with slight yellowish brown hues; very soft to soft; poorly indurated; fair to moderate cohesion; poor adhesion; lumpy to curdy, mushy in part; crumbly to pulverulent; irregular fracture; no definable cuttings habit; dull to subsucrosic in part with increased clastic content; silty to sandy; rarely grades towards a very argillaceous sandstone; no evidence of bedding or structure; noncalcareous; note occasional carbonaceous clasts and flakes, very fine glass shards. Tuffaceous Clays, Siltstone (1600'-1700') = medium light gray to medium gray with very sticky, expansive and cohesive clayey properties; common mushy to pasty or tacky consistency; very malleable and plastic tenacity; very poor to fair induration; amorphous cuttings habit with occasional wedge like to nodular siltstones; earthy to no discernable fracture; earthy and dull, waxy or slimy luster; ranges from amorphous to gritty and silty in texture; no visible structure, traces of interbedded silts within the very gritty clays; noncalcareous; trace coal stringers; trace glass shards and volcanic grains. Sand, Tuffaceous Sandstone (1700'-1800') = medium gray to medium light gray; dominantly unconsolidated sand interbedded with tuffaceous clays, and occasional yellowish gray tuffaceous sandstones; consists of smoky quartz grains with abundant feldspars, volcanics, mafics and lithic inclusions; quartz grains range from upper fine to upper coarse in size; fair sorting; angular to subangular, occasionally subrounded; subprismoidal to spherical; tuffaceous sandstones are firm to friable and seem well lithified; angular grains appear to have more point contact and may allow sand to be more porous; appears interbedded with traces of coals or carbonaceous materials; largest gas peaks occurred just prior to real clean sands coming over the shakers. Happy Valley B-14 9 Tuffaceous Clay, Sand, Conglomerate Sand (1800'-1900') = overall medium gray with shades of medium light and dark gray; common greywacke or mudstone properties containing common sand grains and volcanics; mainly clayey properties; commonly adhesive and very cohesive to pliable; clumpy to pasty or tacky consistency; malleable, elastic tenacity; earthy fracture; massive cuttings habit; earthy to waxy luster; clayey to silty or gritty texture, occasionally abrasive or granular; common interbedded sand lenses that consist of a very silty clay/ash matrix material; sand generally unconsolidated; ranges from fine to coarse grains. Tuffaceous Clays, Conglomeratic Sand, Coal (1900'-2005') = medium light gray to medium gray with darker gray hues; overall adhesive to plastic and pliable clay properties; mushy to pasty or tacky consistency; malleable tenacity; earthy fracture; massive cuttings habit; waxy dull and earthy luster; ranges from smooth and clayey to gritty or granular and abrasive in texture; no real visible structure, still appears interbedded with sandy and clayey or silty to gritty lenses; sand is consistent with fine to medium grained volcanic sediments as described above; coal is very dark gray to olive black; coal stringers have very blocky to planar fracture with a flaky to wedge like cuttings habit; subresinous luster when wet. Happy Valley B-14 10 3.2 Sampling Program BOXED WASHED AND DRIED SAMPLES 3 Sets Total: 3 Packages of 2 Boxes Each Operator: Hilcorp Alaska, LLC Well Name: Happy Valley B-14 Field: Deep Creek County: Kenai Borough State: Alaska Company Representatives: Rance Pederson Location: 2302’ FSL, 292’ FEL, Sec. 21 T2S R13W S Classification: Exploration API #: 50-251-20036-00-00 Permit #: 212054 Rig Name /Type: Aurora Rig III Total Depth 2005’ Total Depth Formation: Sterling A Total Depth Date: July 20, 2012 Logging Geologists: Larry Resch, Justin Rosenblume Sample Catchers: Dan Hillegeist, Dickey Hudgins, Taylor Englert Sets Type and Purpose Interval Frequency Distribution 3 each Washed and Dried Reference Samples 97’ – 1006’ 1006’ – 2005’ 30’ Interval 20’ Interval Debra Oudean Hilcorp Alaska, LLC 3800 Centerpoint Drive Suite 1000 Anchorage, AK 99508 Note: All sample sets (3 total) presented to Rance Pederson for release to rig expeditor for shipment. Happy Valley B-14 11 4 DRILLING DATA 4.1 Daily Activity Summary July 14, 2012 Rig up operations continue; build spud mud; pick up and make up BHA #1 with 9-7/8” bit; run in hole and tag bottom at 94 ft; stage up mud pumps; circulate and condition mud while chasing leaks; currently drilling ahead at approximately 100 ft at report time. July 15, 2012 Continue to drill ahead from 100 ft to 508 ft with 1-25k wob, 100 rpm, 1355 psi, 475 gpm; circulate bottoms up and wipe hole from 508 ft to 97 ft on elevators; no tight spots encountered; run back to bottom and drill ahead from 508 ft to 545 ft at report time. Today’s estimated bit on bottom time is 10 hours with an estimated daily average ROP of 44.5 ft/ hr. July 16, 2012 Continue to drill ahead from 545 ft to casing point at 1006 ft with 29k wob, 100 rpm, 475 gpm, 1350 psi; circulate and condition hole at casing point; wipe hole from 1006 ft to 550 ft and run back to bottom with no problems encountered; circulate bottoms up; carbide lag indicates hole gage of 10.7” at 8% washout; pull out of hole from 1006 ft racking back HWDP; lay down jars and SLB tools; totals drilled 909 ft in 20.3 hours on bottom time for 44.8 ft/hr ROP average. Currently rigging up to run 7-5/8” casing at report time. July 17, 2012 Continue to rig up to run casing; run 7-5/8” 29.7# L-80 BTC to 998 ft with no problems; rig up circulating head and circulate hole clean with new 8.8 ppg 6% KCl EZ MUD; pump 35 bbl 10 ppg mud push, 70 bbls 12.0 ppg lead cement, 25 bbls 15.4 ppg tail cement followed by 5 bbls fresh water; bump plug with new 8.8 ppg 6% KCl EZ MUD; observed 40 bbls cement to surface (42 bbls estimated); rig down cementers; rig down diverter. Currently nippling up BOPs and dumping mud pits at report time. July 18, 2012 Continue to nipple up BOP’s; AOGCC Alaska State inspector supervises BOP tests and PVT system tests. Currently picking up BHA #2 at report time. July 19, 2012 Pick up BHA #2 with 6-3/4” drill bit; run in hole to top of cement; pressure test casing to 1500 psi for 30 minutes; drill out shoe track and 20 ft new formation; conduct FIT test to12.0 ppg EMW at 1026’MD, 1026’TVD; drill ahead from 1026 ft to 1463 ft at report time. Daily bit on bottom time = 8.1 hours, 547 ft drilled, average ROP = 56.4 ft/ hr. July 20, 2012 Continue to drill ahead from 1463 ft to 1505 ft with 5-20k wob, 100 rpm, 1100 psi, 224 gpm with no problems encountered; circulate bottoms up and conduct wiper trip from 1505 to casing shoe at 999 ft; run in hole from 999 ft to 1505 ft with no hole problems; drill ahead to TD at 2005’MD/ 2005’TVD; circulate and condition; wipe hole from 2005 ft to 1500 ft; run in hole from 1500 ft to 2005 ft with no problems; CANRIG records 27 units total wiper trip gas; circulate and condition hole; pull out of hole from 2005 ft racking back drill pipe; lay down third party tools. Currently rigging up Halliburton and preparing to run open hole logs. Happy Valley B-14 12 July 21, 2012 Continue to rig up Halliburton for open hole logs; run in hole with third party wireline tools; run e-logs: Gamma Ray, Dual Spaced neutron, Spectral Density Tool, Y-X Cross Dipole Sonic, Array Compensated Resistivity Tool; rig down Halliburton wireline equipment; run in hole with re-run bit #2 on BHA #3 to 2005 ft with no problems encountered; circulate and condition hole; CANRIG records 17 units of wiper trip gas; pull out of hole and lay down BHA # 3; rig up to run 5-1/2” 17# L-80 casing; run same on 3-1/2” drill pipe; attempts to reach bottom fail; pull out of hole and pick up 2 additional joints of 5-1/2” casing. Currently tripping at report time. Happy Valley B-14 13 4.2 Surveys Measured Depth (ft) Incl. (o) Azim. (o) True Vertical Depth (ft) Latitude (ft) N(+), S(-) Departure (ft) E(+), W(-) Vertical Section (Incr) (ft) Dogleg Rate (o/100ft) 0 0.00 0.00 0.0 0.00 0.00 0.00 0 15 0 0 15 0 0 0 0 79.68 0.08 88.65 79.68 0 0.05 0 0.12 165.28 0.18 137.63 165.28 -0.1 0.2 -0.1 0.17 256.01 0.37 133.63 256.01 -0.4 0.5 -0.4 0.21 346.04 0.4 125.07 346.04 -0.78 0.97 -0.78 0.07 437.28 0.45 122.96 437.27 -1.16 1.53 -1.16 0.06 528.86 0.41 123.34 528.85 -1.54 2.11 -1.54 0.05 619.99 0.4 119.26 619.98 -1.87 2.66 -1.87 0.03 710.93 0.42 113.51 710.92 -2.16 3.24 -2.16 0.05 807.09 0.39 120.43 807.07 -2.47 3.85 -2.47 0.06 900.75 0.55 119.87 900.73 -2.85 4.51 -2.85 0.17 932.26 0.51 125.47 932.24 -3.01 4.76 -3.01 0.2 1032.87 0.66 107.72 1032.84 -3.45 5.68 -3.45 0.23 1126.19 0.52 111.05 1126.16 -3.76 6.59 -3.76 0.15 1219.58 0.33 99.53 1219.55 -3.96 7.24 -3.96 0.23 1312.88 0.22 98.01 1312.85 -4.03 7.68 -4.03 0.11 1406.5 0.24 85.53 1406.47 -4.04 8.06 -4.04 0.06 1500.06 0.27 148.58 1500.02 -4.21 8.37 -4.21 0.29 1593.54 0.24 168.69 1593.5 -4.6 8.53 -4.6 0.1 1686.85 0.28 152.46 1686.81 -4.99 8.67 -4.99 0.09 1780.09 0.24 98.03 1780.05 -5.22 8.97 -5.22 0.26 1873.95 0.34 122.77 1873.91 -5.4 9.4 -5.4 0.17 1951.12 0.28 151.46 1951.08 -5.69 9.68 -5.69 0.21 p. 2005 0.28 151.46 20 p. 2004.96 Ha p p y V a l l e y B - 1 4 14 4. 3 B i t R e c o r d BI T NO . SI Z E TY P E S / N JE T S / TF A IN O U T F T H R S AV E RO P Ft / H R CONDITION 1 9 - 7 / 8 ” Sm i t h X R + M i l l To o t h PX 0 7 0 2 3x 1 3 , 1 x 2 4 / 0. 8 3 2 97 ’ 1 0 0 6 ’ 9 0 9 ’ 2 0 . 3 4 4 . 8 1 - 1 - C T - G - 1 - I - N O - T D 2 6 - 3 / 4 ” Sm i t h X R + M i l l To o t h PT 5 0 4 2 3 x 1 3 / 1 . 1 6 7 1 0 0 6 ’ 2 0 0 5 ’ 9 9 9 ’ 1 7 . 1 5 8 . 4 0 - 0 - N O - A - 1 - I - N O - T D RR # 2 6 - 3 / 4 ” Sm i t h X R + M i l l To o t h PT 5 0 4 2 3 x 1 3 / 1 . 1 6 7 2 0 0 5 ’ 2 0 0 5 ’ 0 0 - N / A Ha p p y V a l l e y B - 1 4 15 4. 4 M u d R e c o r d Co n t r a c t o r : H a l l i b u r t o n Mu d T y p e : E Z M U D Da t e D e p t h MW (p p g ) VI S (s / q t ) PV Y P G e l s FL (c c ) FC So l s (% ) O/ W Ra t i o Sd (% ) MB T p H Cl (ml/l) Ca (ml/l) 07 - 1 5 - 1 2 2 1 0 8 . 8 0 8 5 1 2 2 5 1 0 / 1 3 / 1 7 1 0 . 0 2 1 . 2 0 / 9 6 . 5 0 . 1 0 2 . 5 1 0 . 2 2 7 0 0 0 1 6 0 07 - 1 6 - 1 2 1 0 0 5 9 . 6 5 8 5 2 0 3 3 1 8 / 2 5 / 3 0 9 . 0 2 7 . 9 0 / 9 0 . 5 0 . 7 5 1 5 . 0 9 . 0 2 8 0 0 0 1 2 0 07 - 1 7 - 1 2 1 0 0 5 9 . 6 0 7 0 2 5 2 0 1 5 / 2 2 / 2 7 8 . 5 2 7 . 3 0 / 9 0 . 5 1 . 0 0 1 2 . 5 8 . 8 2 8 0 0 0 1 2 0 07 - 1 8 - 1 2 1 0 0 5 8 . 8 5 7 0 1 4 2 2 1 0 / 1 2 / 1 3 7 . 6 2 1 . 5 0 / 9 6 . 1 1 0 . 0 2 8 5 0 0 1 6 0 07 - 1 9 - 1 2 1 2 6 5 8 . 8 5 7 0 1 6 2 1 1 0 / 1 6 / 2 0 7 . 6 2 1 . 6 0 / 9 6 . 1 0 . 1 0 2 . 5 1 1 . 3 2 8 5 0 0 4 0 0 07 - 2 0 - 1 2 2 0 0 5 8 . 8 5 8 0 1 7 2 1 1 0 / 1 5 / 1 8 6 2 1 . 5 0 / 9 6 . 1 0 . 2 5 2 . 5 1 0 . 1 2 8 5 0 0 4 4 0 07 - 2 1 - 1 2 2 0 0 5 8 . 8 0 7 9 1 7 2 0 1 0 / 1 6 / 2 1 6 . 0 2 1 . 1 0 / 9 6 . 5 0 . 2 5 2 . 5 9 . 9 2 8 5 0 0 3 2 0 Ab b r e v i a t i o n s : MW = M u d W e i g h t V I S = F u n n e l V i s c o s i t y PV = P l a s t i c V i s c o s i t y Y P = Y i e l d P o i n t G e l s = G e l S t r e n g t h F L = W a t e r o r F i l t r a t e Lo s s F C = F i l t e r C a k e O / W = O i l t o W a t e r r a t i o S o l s = S o l i d s S d = S a n d c o n t e n t M B T = M e t h y l e n e B l u e A l k , P m = A l k a l i n i t y , M u d pH = A c i d i t y / B a s i c i t y C l = C h l o r i d e s C a = H a r d n e s s C a l c i u m n r = N o t R e c o r d e d Ha p p y V a l l e y B - 1 4 16 4. 5 D r i l l i n g P r o g r e s s C h a r t D A Y S V E R S U S D E P T H 0 10 0 20 0 30 0 40 0 50 0 60 0 70 0 80 0 90 0 10 0 0 11 0 0 12 0 0 13 0 0 14 0 0 15 0 0 16 0 0 17 0 0 18 0 0 19 0 0 20 0 0 21 0 0 22 0 0 23 0 0 24 0 0 25 0 0 26 0 0 27 0 0 28 0 0 29 0 0 30 0 0 7 / 1 0 / 1 2 7 / 1 1 / 1 2 7 / 1 2 / 1 2 7 / 1 3 / 1 2 7 / 1 4 / 1 2 7 / 1 5 / 1 2 7 / 1 6 / 1 2 7 / 1 7 / 1 2 7 / 1 8 / 1 2 7 / 1 9 / 1 2 7/20/12 7/21/12 7/22/12 DA T E D E P T H ( F T ) 9-7/8" Hole 6-3/4" Hole H a p p y V a l l e y B - 1 4 Happy Valley B-14 50 5 DAILY DRILLING REPORTS Hillcorp Alaska, LLC Deep Creek DAILY WELLSITE REPORT Happy Valley B-14 REPORT FOR Pederson, Buthman DATE July 14, 2012 DEPTH 100' PRESENT OPERATION Drilling Ahead TIME 2359 hrs YESTERDAY 94' 24 HOUR FOOTAGE 6' CASING INFORMATION __10-3/4" Conductor @ 97' SURVEY DATA DEPTH INCLINATION AZIMUTH VERTICAL DEPTH BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T/B/C PULLED 1 9-7/8" Smith mill tooth PX0702 3x13,1x24/ 0.832 97' 6 .5 DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT/HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH 97/97 MW 8.75 VIS 80 PV 14 YP 23 FL 11/14/17 Gels 12.0 CL- 27500 FC 2 SOL 0.6 SD OIL MBL pH 10.8 Ca+ 160 CCI 0.8 MWD SUMMARY INTERVAL 97' TO current TOOLS Mill tooth bit with 8" mud motor, D & I GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 0 @ @ TRIP GAS n/a CUTTING GAS @ @ WIPER GAS n/a CHROMATOGRAPHY (ppm) SURVEY -0- METHANE (C-1) 0 @ @ CONNECTION GAS HIGH -0- ETHANE (C-2) 0 @ @ AVG -0- PROPANE (C-3) 0 @ @ CURRENT -0- BUTANE (C-4) 0 @ @ CURRENT BACKGROUND/AVG trace PENTANE (C-5) 0 @ @ HYDROCARBON SHOWS None INTERVAL LITHOLOGY/REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Cutting samples currently unavailable. DAILY ACTIVITY SUMMARY July 14, 2012 Rig up operations continue; build spud mud; pick up and make up BHA #1 with 9-7/8” bit; run in hole and tag bottom at 94 ft; stage up mud pumps; circulate and condition mud while chasing leaks; currently drilling ahead at approximately 100 ft at report time. July 14, 2012 EPOCH PERSONNEL ON BOARD Resch, Rosenblume + 2 SC DAILY COST DML $2960, RW $920 REPORT BY Larry Resch Page 1 of 1Daily Report 7/21/2012 file://C:\Documents and Settings\EpochAdmin\My Documents\ ... Hillcorp Alaska, LLC Deep Creek DAILY WELLSITE REPORT Happy Valley B-14 REPORT FOR Pederson, Buthman DATE July 15, 2012 DEPTH 545' PRESENT OPERATION Drilling Ahead TIME 2359 hrs YESTERDAY 100' 24 HOUR FOOTAGE 445' CASING INFORMATION _10-3/4" @ 97' SURVEY DATA DEPTH INCLINATION AZIMUTH VERTICAL DEPTH 79.68' 0.08 88.65 79.68' 165.28' 0.18 137.63 165.28' 256.01' 0.37 133.63 256.01' 346.04' 0.40 125.07 346.04' 437.28' 0.45 122.96 437.27' BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T/B/C PULLED 1 9-7/8" Smith mill tooth PX0702 3x13,1x24/ 0.832 97' 545' 448' 10 +/- DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ 44.5 FT/HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT @ @ 12 KLBS ROTARY RPM @ @ 100 RPM PUMP PRESSURE @ @ 1350 PSI DRILLING MUD REPORT DEPTH 420/420 MW 8.90 VIS 110 PV 15 YP 30 FL 14/18/24 Gels 7.6 CL- 28000 FC 2 SOL 2.2 SD 0.15 OIL 0/96 MBL 2.5 pH 9.8 Ca+ 160 CCI 0.50 MWD SUMMARY INTERVAL 97' TO 545' TOOLS Mill tooth bit with 8" mud motor, D & I GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 6 @ 545' 0 @ 2 TRIP GAS n/a CUTTING GAS @ @ WIPER GAS -0- CHROMATOGRAPHY (ppm) SURVEY -0- METHANE (C-1) 2034 @ 545' 0 @ 450 CONNECTION GAS HIGH -0- ETHANE (C-2) 0 @ @ AVG -0- PROPANE (C-3) 0 @ @ CURRENT -0- BUTANE (C-4) 0 @ @ CURRENT BACKGROUND/AVG 2-3u PENTANE (C-5) 0 @ @ HYDROCARBON SHOWS None INTERVAL LITHOLOGY/REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Conglomeratic sand, conglomerate, occasional clays with minor tuffaceous clays, trace coal DAILY ACTIVITY SUMMARY July 15, 2012 Continue to drill ahead from 100 ft to 508 ft with 1-25k wob, 100 rpm, 1355 psi, 475 gpm; circulate bottoms up and wipe hole from 508 ft to 97 ft on elevators; no tight spots encountered; run back to bottom and drill ahead from 508 ft to 545 ft at report time. Today’s estimated bit on bottom time is 10 hours with an estimated daily average ROP of 44.5 ft/ hr. EPOCH PERSONNEL ON BOARD Resch, Rosenblume + 1 SC DAILY COST DML $2960, RW $920 REPORT BY Larry Resch Page 1 of 1Daily Report 7/21/2012 file://C:\Documents and Settings\EpochAdmin\My Documents\ ... Hillcorp Alaska, LLC Deep Creek DAILY WELLSITE REPORT Happy Valley B-14 REPORT FOR Pederson, Buthman DATE July 16, 2012 DEPTH 1006' PRESENT OPERATION Casing Operations TIME 2359 hrs YESTERDAY 545' 24 HOUR FOOTAGE 461' CASING INFORMATION __10-3/4" @ 97'___7-5/8" going in hole SURVEY DATA DEPTH INCLINATION AZIMUTH VERTICAL DEPTH 528.66' 0.41 123.34 528.85' 710.93' 0.42 113.51 710.92' 900.75' 0.55 119.87 900.73' 932.68' 0.51 125.47 932.66' p. 1006.00' 0.51 125.47 p. 1005.98' BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T/B/C PULLED 1 9-7/8" Smith mill tooth PX0702 3x13,1x24/ 0.832 97' 1006' 909' 20.3 1-1-CT-G-1-I-NO-TD Csg Pt. DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT/HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT 41 @ 910' 8 @ 690' 23.4 29 KLBS ROTARY RPM @ @ 100 RPM PUMP PRESSURE 1640 @ 815' 490 @ 970' 1291.6 1139 PSI DRILLING MUD REPORT DEPTH 1006/ 1006 MW 9.65 VIS 85 PV 20 YP 33 FL 18/25/30 Gels 9.0 CL- 28000 FC 2 SOL 7.9 SD 0.75 OIL 0/90.6 MBL 15.0 pH 9.0 Ca+ 120 CCI 0.35 MWD SUMMARY INTERVAL 97' TO 1006' TOOLS Mill tooth bit with 8" mud motor, D & I GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 22 @ 910' 3 @ 891' 7.6 TRIP GAS n/a CUTTING GAS @ @ WIPER GAS -0- CHROMATOGRAPHY (ppm) SURVEY -0- METHANE (C-1) 3933 @ 909' 601 @ 889' 1710.8 CONNECTION GAS HIGH -0- ETHANE (C-2) 0 @ @ AVG -0- PROPANE (C-3) 0 @ @ CURRENT -0- BUTANE (C-4) 0 @ @ CURRENT BACKGROUND/AVG 2u while displacing PENTANE (C-5) 0 @ @ HYDROCARBON SHOWS None INTERVAL LITHOLOGY/REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Conglomeratic sand, tuffaceous claystone DAILY ACTIVITY SUMMARY July 16, 2012 Continue to drill ahead from 545 ft to casing point at 1006 ft with 29k wob, 100 rpm, 475 gpm, 1350 psi; circulate and condition hole at casing point; wipe hole from 1006 ft to 550 ft and run back to bottom with no problems encountered; circulate bottoms up; carbide lag indicates hole gage of 10.7” at 8% washout; pull out of hole from 1006 ft racking back HWDP; lay down jars and SLB tools; totals drilled 909 ft in 20.3 hours on bottom time for 44.8 ft/hr ROP average. Currently rigging up to run 7-5/8” casing at report time. EPOCH PERSONNEL ON BOARD Resch, Rosenblume + 1 SC__ DAILY COST DML $ 2960, RW $920 REPORT BY Larry Resch Page 1 of 1Daily Report 7/21/2012 file://C:\Documents and Settings\EpochAdmin\My Documents\ ... Hillcorp Alaska, LLC Deep Creek DAILY WELLSITE REPORT Happy Valley B-14 REPORT FOR Pederson, Buthman DATE July 17, 2012 DEPTH 1006' PRESENT OPERATION Nipple Up TIME 2359 hrs YESTERDAY 1006' 24 HOUR FOOTAGE 0' CASING INFORMATION __7-5/8" @ 998' SURVEY DATA DEPTH INCLINATION AZIMUTH VERTICAL DEPTH 932.68' 0.51 125.47 932.66' p. 1006.00' 0.51 125.47 p. 1005.98' BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T/B/C PULLED 1 9-7/8" Smith mill tooth PX0702 3x13,1x24/ 0.832 97' 1006' 909' 20.3 1-1-CT-G-1-I-NO-TD Casing Point DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT/HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH 1006/1006 MW 8.80 VIS 70 PV 14 YP 22 FL 11/14/16 Gels 12.0 CL- 29000 FC 2 SOL 1.1 SD OIL 0/96.5 MBL pH 10.2 Ca+ 160 CCI 0.70 MWD SUMMARY INTERVAL TO TOOLS No tools in hole this period. GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS @ @ TRIP GAS 11u CUTTING GAS @ @ WIPER GAS n/a CHROMATOGRAPHY (ppm) SURVEY n/a METHANE (C-1) @ @ CONNECTION GAS HIGH n/a ETHANE (C-2) @ @ AVG n/a PROPANE (C-3) @ @ CURRENT n/a BUTANE (C-4) @ @ CURRENT BACKGROUND/AVG n/a PENTANE (C-5) @ @ HYDROCARBON SHOWS No new footage drilled this period. INTERVAL LITHOLOGY/REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY No new footage drilled this period. DAILY ACTIVITY SUMMARY July 17, 2012 Continue to rig up to run casing; run 7-5/8” 29.7# L-80 BTC to 998 ft with no problems; rig up circulating head and circulate hole clean with new 8.8 ppg 6% KCl EZ MUD; pump 35 bbl 10 ppg mud push, 70 bbls 12.0 ppg lead cement, 25 bbls 15.4 ppg tail cement followed by 5 bbls fresh water; bump plug with new 8.8 ppg 6% KCl EZ MUD; observed 40 bbls cement to surface (42 bbls estimated); rig down cementers; rig down diverter. Currently nippling up BOPs and dumping mud pits at report time. EPOCH PERSONNEL ON BOARD Resch, Rosenblume + 1 SC__ DAILY COST DML $2960, RW $920 REPORT BY Larry Resch Page 1 of 1Daily Report 7/21/2012 file://C:\Documents and Settings\EpochAdmin\My Documents\ ... Hillcorp Alaska, LLC Deep Creek DAILY WELLSITE REPORT Happy Valley B-14 REPORT FOR Pederson, Buthman DATE July 18, 2012 DEPTH 1006' PRESENT OPERATION Nipple Up Ops TIME 2359 hrs YESTERDAY 1006' 24 HOUR FOOTAGE 0' CASING INFORMATION ___7-5/8" @ 999' SURVEY DATA DEPTH INCLINATION AZIMUTH VERTICAL DEPTH BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS/ TFA IN OUT FOOTAGE HOURS T/B/C PULLED DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT/HR SURFACE TORQUE @ @ FT-LBS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH 1006/ 1006 MW 8.85 VIS 70 PV 14 YP 23 Gels 11/13/15 FL 7.6 CL- 28500 FC 2 SOL 1.5 SD OIL 0/96.1 MBT pH 10.0 Ca+ 160 Alk 0.60 MWD SUMMARY INTERVAL TO TOOLS No tools in hole this period. GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS @ @ TRIP GAS n/a CUTTING GAS @ @ WIPER GAS n/a CHROMATOGRAPHY (ppm) SURVEY n/a METHANE (C-1) @ @ CONNECTION GAS_HIGH n/a ETHANE (C-2) @ @ CONNECTION GAS_AVG n/a PROPANE (C-3) @ @ CONNECTION GAS_CURRENT n/a BUTANE (C-4) @ @ CURRENT BACKGROUND/AVG n/a PENTANE (C-5) @ @ HYDROCARBON SHOWS No new footage drilled this period. INTERVAL LITHOLOGY/REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY No new footage drilled this period. DAILY ACTIVITY SUMMARY July 18, 2012 Continue to nipple up BOP’s; AOGCC Alaska State inspector supervises BOP tests and PVT system tests. Currently picking up BHA #2 at report time. CANRIG PERSONNEL ON BOARD Resch, Rosenblume + 2 SC__ DAILY COST DML 2960, RW 920 REPORT BY Larry Resch Page 1 of 1Daily Report 7/21/2012 file://C:\Documents and Settings\EpochAdmin\My Documents\ ... Hillcorp Alaska, LLC Deep Creek DAILY WELLSITE REPORT Happy Valley B-14 REPORT FOR Pederson, Buthman DATE 7/19/2012 DEPTH 1463' PRESENT OPERATION Drilling Ahead TIME 2359 hrs YESTERDAY 1006' 24 HOUR FOOTAGE 457' CASING INFORMATION __7-5/8" @ 999' SURVEY DATA DEPTH INCLINATION AZIMUTH VERTICAL DEPTH 1032.87' 0.66 107.72 1032.84' 1126.19' 0.52 111.05 1126.16' 1219.58' 0.33 99.53 1219.55' 1312.88' 0.22 98.01 1312.85' BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T/B/C PULLED 2 6-3/4" Smith mill tooth PT5024 3x13/ 1.167 1006' 1463' 457' 8.1 DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION 571.0 @ 1350' 1.0 @ 1236' 90.4 62.6 FT/HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT 29 @ 1006' 5 @ 1329' 11.8 17.0 KLBS ROTARY RPM @ @ RPM PUMP PRESSURE 1139 @ 1006' 789 @ 1278' 405.3 1038 PSI DRILLING MUD REPORT DEPTH 1265/1265 MW 8.85 VIS 70 PV 16 YP 21 FL 10/16/20 Gels 7.6 CL- 28500 FC 2 SOL 1.8 SD 0.10 OIL 0/96.1 MBL 2.5 pH 11.3 Ca+ 400 CCI 1.2 MWD SUMMARY INTERVAL 1006' TO 1463' TOOLS 6-3/4" mill tooth bit with mud motor and D & I GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 72 @ 1206' 7 @ 1006' 25.7 TRIP GAS n/a CUTTING GAS @ @ WIPER GAS n/a CHROMATOGRAPHY (ppm) SURVEY -0- METHANE (C-1) 11043 @ 1206' 804 @ 1015' 3546.5 CONNECTION GAS HIGH -0- ETHANE (C-2) 0 @ @ AVG -0- PROPANE (C-3) 0 @ @ CURRENT -0- BUTANE (C-4) 0 @ @ CURRENT BACKGROUND/AVG 20-30u PENTANE (C-5) 0 @ @ HYDROCARBON SHOWS None INTERVAL LITHOLOGY/REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Tuffaceous claystone, tuffaceous sandstone DAILY ACTIVITY SUMMARY July 19, 2012 Pick up BHA #2 with 6-3/4” drill bit; run in hole to top of cement; pressure test casing to 1500 psi for 30 minutes; drill out shoe track and 20 ft new formation; conduct FIT test to12.0 ppg EMW at 1026’MD, 1026’TVD; drill ahead from 1026 ft to 1463 ft at report time. Daily bit on bottom time = 8.1 hours, 547 ft drilled, average ROP = 56.4 ft/ hr. EPOCH PERSONNEL ON BOARD Resch, Rosenblume + 2 SC__ DAILY COST DML $2960, RW $920 REPORT BY Larry Resch Page 1 of 1Daily Report 7/21/2012 file://C:\Documents and Settings\EpochAdmin\My Documents\ ... Hillcorp Alaska, LLC Deep Creek DAILY WELLSITE REPORT Happy Valley B-14 REPORT FOR Pederson, Buthman DATE July 20, 2012 DEPTH 2005' PRESENT OPERATION Open Hole Log Ops TIME 2359 hrs YESTERDAY 1463' 24 HOUR FOOTAGE 542' CASING INFORMATION __7-5/8" @ 999' SURVEY DATA DEPTH INCLINATION AZIMUTH VERTICAL DEPTH 1406.50' 0.24 85.53 1406.47' 1593.54' 0.24 168.69 1593.5' 1780.09' 0.24 98.03 1780.05' 1873.95' 0.34 122.77 1873.91' 1951.12' .28 151.46 1951.08' BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T/B/C PULLED 2 6-3/4" Smith mill tooth PT5024 3x13/ 1.167 1006' 2005' 999' 17.1 0-0-NO-A-1-I-NO-TD TD DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION 240.0 @ 1506' 33.0 @ 1827' 81.6 82.6 FT/HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT 22 @ 1672' 7 @ 1807' 13.5 8.3 KLBS ROTARY RPM @ @ 0.0 RPM PUMP PRESSURE 2140 @ 1536' 900 @ 1662' 1088.9 1193 PSI DRILLING MUD REPORT DEPTH 2005/ 2005 MW 8.85 VIS 80 PV 17 YP 21 FL 10/15/18 Gels 6.0 CL- 28500 FC 2 SOL 1.5 SD 0.25 OIL 0/96.1 MBL 2.5 pH 10.1 Ca+ 440 CCI 1.0 MWD SUMMARY INTERVAL 999' TO 2005' TOOLS mILL TOOTH BIT ON MUD MOTOR, d & i GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 132 @ 1705' 7 @ 1994' 28.9 TRIP GAS n/a CUTTING GAS @ @ WIPER GAS 27u CHROMATOGRAPHY (ppm) SURVEY -0- METHANE (C-1) 29175 @ 1774' 1052 @ 1484' 6551.6 CONNECTION GAS HIGH -0- ETHANE (C-2) 0 @ @ AVG -0- PROPANE (C-3) 0 @ @ CURRENT -0- BUTANE (C-4) 0 @ @ CURRENT BACKGROUND/AVG n/a not circulating PENTANE (C-5) 0 @ @ HYDROCARBON SHOWS 1680-1708'MD, 1765-1785'MD; PIXLER Plots to follow INTERVAL LITHOLOGY/REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Predominately Tuffaceous claystone, sandstone with clean sandstone in show zones. DAILY ACTIVITY SUMMARY July 20, 2012 Continue to drill ahead from 1463 ft to 1505 ft with 5-20k wob, 100 rpm, 1100 psi, 224 gpm with no problems encountered; circulate bottoms up and conduct wiper trip from 1505 to casing shoe at 999 ft; run in hole from 999 ft to 1505 ft with no hole problems; drill ahead to TD at 2005’MD/ 2005’TVD; circulate and condition; wipe hole from 2005 ft to 1500 ft; run in hole from 1500 ft to 2005 ft with no problems; CANRIG records 27 units total wiper trip gas; circulate and condition hole; pull out of hole from 2005 ft racking back drill pipe; lay down third party tools. Currently rigging up Halliburton and preparing to run open hole logs. EPOCH PERSONNEL ON BOARD Resch, Rosenblume + 2 SC__ DAILY COST DML $2960, RW $920 REPORT BY Larry Resch Page 1 of 1Daily Report 7/21/2012 file://C:\Documents and Settings\EpochAdmin\My Documents\ ... Hillcorp Alaska, LLC Deep Creek DAILY WELLSITE REPORT Happy Valley B-14 REPORT FOR Pederson, Buthman DATE July 21, 2012 DEPTH 2005' PRESENT OPERATION Cement Ops TIME 2359 hrs YESTERDAY 2005' 24 HOUR FOOTAGE 0' CASING INFORMATION __7-5/8" @ 999'___5-1/2" @ ? SURVEY DATA DEPTH INCLINATION AZIMUTH VERTICAL DEPTH BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS/ TFA IN OUT FOOTAGE HOURS T/B/C PULLED DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT/HR SURFACE TORQUE @ @ FT-LBS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH Report n/a MW VIS PV YP Gels FL CL- FC SOL SD OIL MBT pH Ca+ Alk MWD SUMMARY INTERVAL TO TOOLS No tools in hole this period. GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS @ @ TRIP GAS 7u CUTTING GAS @ @ WIPER GAS n/a CHROMATOGRAPHY (ppm) SURVEY n/a METHANE (C-1) @ @ CONNECTION GAS_HIGH n/a ETHANE (C-2) @ @ CONNECTION GAS_AVG n/a PROPANE (C-3) @ @ CONNECTION GAS_CURRENT n/a BUTANE (C-4) @ @ CURRENT BACKGROUND/AVG 0-2u PENTANE (C-5) @ @ HYDROCARBON SHOWS No new hole drilled this period. INTERVAL LITHOLOGY/REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY No new hole drilled this period. DAILY ACTIVITY SUMMARY July 21, 2012 Continue to rig up Halliburton for open hole logs; run in hole with third party wireline tools; run e-logs: Gamma Ray, Dual Spaced neutron, Spectral Density Tool, Y-X Cross Dipole Sonic, Array Compensated Resistivity Tool; rig down Halliburton wireline equipment; run in hole with re-run bit #2 on BHA #3 to 2005 ft with no problems encountered; circulate and condition hole; CANRIG records 17 units of wiper trip gas; pull out of hole and lay down BHA # 3; rig up to run 5-1/2” 17# L-80 casing; run same on 3-1/2” drill pipe; set liner hanger. Cement operations are underway at report time. CANRIG PERSONNEL ON BOARD Resch, Rosenblume DAILY COST NOTE new charges DML $2160, RW $920 REPORT BY Larry Resch Page 1 of 1Daily Report 7/22/2012 file://C:\DOCUMENTS AND SETTINGS\EPOCHADMIN\MY ...
