The URL can be used to link to this page

Home My WebLink AboutCO 237 B1. 2. 3. 4. 5. CONSERVATION ORDER NO. 237B Beaver Creek Field Beaver Creek Unit Beluga Gas Pool February 16, 2016 Hilcorp's request to define the Tyonek Gas Pool and allow for unlimited well spacing exceptions within said pool within 1500' feet of the Beaver Creek Unit Boundary (Exhibits A and B held in Confidential Storage) February 17, 2016 Hilcorp's request to define the Tyonek Gas Pool and allow for unlimited well spacing exceptions within said pool within 1500' feet of the Beaver Creek Unit Boundary (Exhibits A and B held in Confidential Storage) February 20, 2016 Notice of Hearing and Affidavit of Publication March 29, 2016 Transcript, sign in sheet and exhibits ------------------ Emails CONSERVATION ORDER NO. 237B ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC to amend Rule 2 of Conservation Order 237A to define the Tyonek Gas Pool within the Beaver Creek Field and to amend Rule 3(a) of Conservation Order 237A, which establishes well -spacing requirements within that same gas pool. Docket Number: CO-16-005 Conservation Order No. 237B Beaver Creek Field Beaver Creek Unit Tyonek Gas Pool Kenai Peninsula Borough, Alaska May 6, 2016 IT APPEARING THAT: 1. By letter dated and received February 18, 2016, Hilcorp Alaska, LLC (Hilcorp) requested the Alaska Oil and Gas Conservation Commission (AOGCC) amend Rule 2 of Conservation Order 237A to define a new gas pool —the Beaver Creek Unit, Tyonek Gas Pool —and to modify Rule 3(a) of Conservation Order 237A to establish well spacing requirements for that new gas pool. 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for March 29, 2016. On February 19, 2016, the AOGCC published notice of the opportunity for that hearing on the State of Alaska's Online Public Notice website and on the AOGCC's website, electronically transmitted the notice to all persons on the AOGCC's email distribution list, and mailed printed copies of the notice to all persons on the AOGCC's mailing distribution list. On February 20, 2016, the notice was published in the ALASKA DISPATCH NEWS. 3. No protest to the application or request for hearing was received. 4. The hearing commenced at 9:00 AM on March 29, 2016 in the AOGCC's office at 333 West 7th Avenue, Anchorage, Alaska. 5. Testimony was received from representatives of Hilcorp. 6. The record closed that same day. FINDINGS: 1. Hilcorp is the sole owner and operator of the Beaver Creek Field and the Beaver Creek Unit, which are located in the Kenai National Wildlife Refuge, Kenai Peninsula Borough, Alaska. Cook Inlet Region, Inc. and the Federal Government are landowners for the Beaver Creek Unit and for all lands adjacent to that unit. 2. Rule 2 of CO 237A defines the Sterling and Beluga Gas Pools and the Beaver Creek Oil Pool, identifies wells Beaver Creek Unit No. IA and Beaver Creek Unit No. 4 as reference wells for those two pools, and utilizes those reference wells to establish the Conservation Order 237B May 6, 2016 Page 2 of 4 upper and lower vertical extents of those pools. Rule 2 does not address the proposed Tyonek Gas Pool within the Beaver Creek Unit. 3. Rule 3(a) of CO 237A establishes spacing requirements for wells completed in the Sterling and Beluga Gas Pools and the Beaver Creek Oil Pool, but Rule 3(a) does not address requirements for the proposed Tyonek Gas Pool within the Beaver Creek Unit. To date, statewide requirements have governed well spacing within this proposed gas pool. 4. After CO 237A was issued by the AOGCC, Hilcorp drilled or redrilled five additional wells within the Beaver Creek Unit and obtained more information about, and a better understanding of, the proposed Tyonek Gas Pool. One of these wells found gas and established that individual sand intervals within this proposed pool can be productive at commercial rates. 5. As is common within the Cook Inlet Basin, gas pools in the Beaver Creek Unit often consist of discontinuous sand lenses deposited in braided to meandering stream environments and thus there may be little lateral continuity between individual sands and large variations in reservoir permeability. CONCLUSIONS: 1. Information gathered since CO 237A was approved on June 18, 2014 demonstrates that existing statewide well spacing requirements do not promote efficient development of the proposed Tyonek Gas Pool within the Beaver Creek Unit. 2. Establishing the requirement that gas wells may not be opened within 1,500 feet of the unit boundary will protect the correlative rights of offset owners and landowners. NOW THEREFORE IT IS ORDERED: This order supersedes Conservation Orders 237 and 237A. The spacing exception approved within Conservation Order 237.001 for well Beaver Creek Unit No. 14A remains in effect. Development of the Beaver Creek Unit is subject to the statewide requirements of 20 AAC 25 to the extent not superseded by the following rules: Affected Area: Seward Meridian (Source: CO 237A) Township, Range Description T6N, R10W Section 3: NE'/4, W'/2 , W'/2SE1/4 Section 4: All f Section 5: E'/2NE'/4, SE'/4 Section 8: NE1/4 Section 9: NE'/4NE1/4, Wl/2NE'/4, NWl/4 Section 10: N'/2NW'/4 Conservation Order 237B May 6, 2016 Page 3 of 4 T7N, R10W Section 26: SW'/4NW1/4 , W'/2SW'/4, SEIASW'/4 Section 27: All Section 28: NE'/4NE1/4, S1/2NE'/4, SE'/4NW'/4, SW'/4, SE1/4 Section 32: E'/2E%2 Section 33 & 34: All Section 35: NW'/4, W%2SW'/4, NE'/4SW'/4 Rule 1 Field Name (Source: CO 237A) The Field is named the Beaver Creek Unit. Rule 2 Pool Definition (Source: CO 237A, Revised This Order) (a) The Sterling Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. I between the measured depths of 5,188 and 6,370 feet. (b) The Beluga Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. IA between the measured depths of 6,370 and 9,650 feet. (c) The Tyonek Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. 4 well between the measured depths of 8,886 feet and 14,518 feet. (d) The Beaver Creek Oil Pool is defined as the accumulation of oil that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. 4 between the measured depths of 14,518 and 15,874 feet. Rule 3 Well Spacing (Source: CO 237A and Revised This Order) (a) There shall be no restrictions as to well spacing in the Sterling, Beluga, and Tyonek Gas Pools except that no pay shall be opened in a well within 1,500 feet from the exterior boundary of the Beaver Creek Unit where owners and landowners are not the same on both sides of the line. (b) Well spacing in the Beaver Creek Oil Pool shall be 40 acres. No wellbore may be opened nearer than 660 feet from the nearest open wellbore in the same pool. No wellbore may be opened nearer than 500 feet from the exterior boundary of the Beaver Creek Unit where owners and landowners are not the same on both sides of the line. Rule 4 Administrative Action (Source: CO 237A and Revised This Order) Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the AOGCC may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize Conservation Order 237B May 6, 2016 Page 4 of 4 correlative rights, is based on sound engineering and geosciences principles, and will not result in an increased risk of fluid movement into freshwater. This order shall expire 5 years after the effective date shown below or upon a change of operator for any pool listed in Rule 2. DONE at Anchorage, Alaska and dated May 6, 2016. Cathy Y. Foerster Daniel Chair, Commissioner COW TION 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. Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Friday, May 06, 2016 3:14 PM To: Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Cook, Guy D (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); Frystacky, Michal (DOA); Grimaldi, Louis R (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Hill, Johnnie W (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); AKDCWellIntegrityCoordinator; Alan Bailey; Alex Demarban; Alexander Bridge; Allen Huckabay; Amanda Tuttle; Andrew VanderJack; Anna Raff; Barbara F Fullmer; bbritch; bbohrer@ap.org; Bill Bredar; Bob Shavelson; Brian Havelock; Bruce Webb; Burdick, John D (DNR); Caleb Conrad; Candi English; Cliff Posey; Colleen Miller; Crandall, Krissell; D Lawrence; Dave Harbour; David Boelens; David Duffy; David House; David McCaleb; David Tetta; ddonkel@cfl.rr.com; Dean Gallegos; Delbridge, Rena E (LAS); DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elowe, Kristin; Evans, John R (LDZX); Frank Molli; Gary Oskolkosf, George Pollock; Gordon Pospisil; Gregg Nady; gspfoff; Hyun, James J (DNR); Jacki Rose; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jerry McCutcheon; Jim Watt; Jim White; Joe Lastufka; Radio Kenai; Easton, John R (DNR); Jon Goltz; Juanita Lovett; Judy Stanek; Houle, Julie (DNR); Julie Little; Karen Thomas; Kari Moriarty; Kazeem Adegbola; Keith Wiles; Kelly Sperback; Gregersen, Laura S (DNR); Leslie Smith; Louisiana Cutler; Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Kremer, Marguerite C (DNR); Mary Cocklan-Vendl; Mealear Tauch; Michael Calkins; Michael Moora; MJ Loveland; mkm7200; Morones, Mark P (DNR); Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nick W. Glover; Nikki Martin; NSK Problem Well Supv; Oliver Sternicki; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer; Stephen Hennigan; Moothart, Steve R (DNR); Suzanne Gibson; sheffield@aoga.org; Tania Ramos; Ted Kramer; Davidson, Temple (DNR); Teresa Imm; Thor Cutler; Tim Mayers; Todd Durkee; trmjrl; Tyler Senden; Vicki Irwin; Vinnie Catalano; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Ann Danielson; Bajsarowicz, Caroline J; Brian Gross; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; Don Shaw; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Heusser, Heather A (DNR); Holly Pearen; Jason Bergerson; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Kasper Kowalewski; King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); Vicky Sterling; Wayne Wooster; William Van Dyke Subject: co237b (Hilcorp - Beaver Creek Field) Attachments: co237b.pdf Please see attached. Jody J. Colombie .AOGCC Special.Assistant Alaska Oil and Gas Conservation Commission 333 West 7' .Avenue .Anchorage, .Alaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 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 Jody Colombie at 907.793.1221 or iody.colombie@alaska.gov. James Gibbs Jack Hakkila Post Office Box 1597 Post Office Box 190083 Soldotna, AK 99669 Anchorage, AK 99519 Gordon Severson Penny Vadla 3201 Westmar Cir. 399 W. Riverview Ave. Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Richard Wagner Darwin Waldsmith Post Office Box 60868 Post Office Box 39309 Fairbanks, AK 99706 Ninilchik, AK 99639 Bernie Karl M Recycling Inc. Post Office Box 58055 Fairbanks, AK 99711 George Vaught, Jr. Post Office Box 13557 Denver, CO 80201-3557 Angela K. Singh INDEXES Colombie, Jody J (DOA) From: Roby, David S (DOA) Sent: Tuesday, April 26, 2016 12:30 PM To: David Duffy; Colombie, Jody J (DOA) Cc: Larry Greenstein; Jacob Dunston; Daniel Taylor Subject: RE: Beaver Creek PA Revisions David, We do not need any additional information from Hilcorp to complete the BCU Pool Rules revisions. Thank you, Dave Roby (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.robv@alaska.gov. From: David Duffy [mailtoAcluffy(a)hilcorp.com] Sent: Tuesday, April 26, 2016 12:00 PM To: Roby, David S (DOA); Colombie, Jody J (DOA) Cc: Larry Greenstein; Jacob Dunston; Daniel Taylor Subject: FW: Beaver Creek PA Revisions Dave & Jody, BLM has approved Hilcorp's proposed revisions to the Beaver Creek Participating Areas. Normally, PA's are not of interest to AOGCC, but here, please note we modified the PA depths to correspond and correlate directly with our proposed AOGCC pools. This decision is retroactive back to December 11, 2014, which corresponds to the first day of production from BCU 24. We were hoping to have this decision back from BLM before the hearing - but better late than never. This will make reporting of reporting Beluga vs Tyonek gas very straightforward. Do you need any additional information on our proposed BCU Pool Rules? If so, please let us know. We are currently working on an application to test the Tyonek in the BCU 23, which will require commingling with existing perfs in the Beluga. Having the Tyonek fully defined as a pool before submitting this well -specific request will make things much less confusing for everybody. Thanks, David Duffy, Landman Hilcorp Alaska, LLC Direct: 907-777-8414 Cell: 907-301-2629 dduffv@hilcorp.com This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. From: Yarawsky, Sharon [mailto:syarawsk@blm.gov] Sent: Monday, April 25, 2016 4:31 PM To: David Duffy Subject: Beaver Creek PA Revisions David, I have attached a copy of the signed approval letter. The originals will be mailed out to you tomorrow. I will be in the field the rest of the week. Wanted to be sure you got this. Sharon L. Yarawsky Mineral Law Specialist/Surface Compliance BLM Alaska State Office, Branch of Energy and Minerals 222 W. 7th Avenue, #13 Anchorage, AK 99513-7504 907-271-5683 (office) 907-271-3933 (fax) syarawsk(a blm.gov "Go confidently in the direction of your dreams! Live the life you've imagined. " Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Friday, March 11, 2016 10:13 AM To: David Duffy (dduffy@hilcorp.com) Subject: Beaver Creek Unit - Landowners for Adjacent Acreage David, Could you please tell me the landowners for the following governmental sections, which are adjacent to the Beaver Creek Unit? T7N, R11W, SM: Sections 21, 22, 23, 26, and 35, and T6N, R11W, SM: Sections 2 and 11? Thank you, Steve Davies Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission (AOGCC) Phone: 907-793-1224 AOGCC: 907-279-1433 Fax: 907-276-7542 333 West 71h Avenue, Suite 100 Anchorage, AK 99501 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 Steve Davies at 907-793-1224 or steve.davies@alaska.gov_. Hilcorp Alaska, LLC Direct: 907-777-8414 Cell: 907-301-2629 dduffy@hilcorp.com This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. From: Davies, Stephen F (DOA) [mailto:steve.davies@alaska.govl Sent: Friday, March 11, 2016 10:13 AM To: David Duffy Subject: Beaver Creek Unit - Landowners for Adjacent Acreage David, Could you please tell me the landowners for the following governmental sections, which are adjacent to the Beaver Creek Unit? T7N, R11W, SM: Sections 21, 22, 23, 26, and 35, and T6N, R11W, SM: Sections 2 and 11? Thank you, Steve Davies Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission (AOGCC) Phone: 907-793-1224 AOGCC: 907-279-1433 Fax: 907-276-7542 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 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 Steve Davies at 907-793-1224 or steve.davies@alaska.gov. Davies, Stephen F (DOA) From: David Duffy <dduffy@hilcorp.com> Sent: Friday, March 11, 2016 5:17 PM To: Davies, Stephen F (DOA) Subject: RE: Beaver Creek Unit - Landowners for Adjacent Acreage Steve, I made a quick map for you showing landownership in the area surrounding the Beaver Creek Unit. The short story is: CIRI owns all the oft rights outs outside of Hilcorp's current leasehold (shown in green), except for portions of Sections 26 and 35, both of which are federal. I'll continue to work on an larger scale landownership map for you. It's very interesting to zoom out like this once in a while. Thanks for the chance to make some maps! V v v 0 -z ..� �J i to V I i# tb 0 W S007NOi W S00714009Ni E�J _ U fl tS I � 1 z, 6N011W Yi 7Y i1J iV �'1 oM Lmd ft• tmk Wm Am �, yt�uwO.h OM35 Beaver Creek Unit Pee: ,ila6, ]tC �ppaa a-••xv David Duffy, Landman I 1 ALASKA OIL AND GAS CONSERVATION COMMISSION 2 3 Before Commissioners: Cathy Foerster, Chair 4 Daniel T. Seamount 5 6 In the Matter of the Application of ) 7 Hilcorp Alaska, LLC to Amend CO 237A to ) 8 Define the Tyonek Gas Pool, Beaver Creek ) 9 Field and Allow for Unlimited Well Spacing ) 10 Within the Proposed Tyonek Gas Pool. ) 11 ) 12 Docket No.: CO 16-005 13 14 ALASKA OIL and GAS CONSERVATION COMMISSION 15 Anchorage, Alaska 16 17 March 29, 2016 18 9:00 o'clock a.m. 19 20 PUBLIC HEARING 21 22 BEFORE: Cathy Foerster, Chair 23 Daniel T. Seamount 1 TABLE OF CONTENTS 2 Opening remarks by Chair Foerster 03 3 Remarks by Mr. Dunston 08 4 Remarks by Mr. Taylor 14 2 1 P R O C E E D I N G S 2 9:03:00 3 (On record - 9:01 a.m.) 4 CHAIR FOERSTER: I'll call this hearing to 5 order. Today is Tuesday, March 29, 2016, it's 9:01 6 a.m. We're at 333 West Seventh Avenue, Anchorage, 7 Alaska, the offices of the Alaska Oil and Gas 8 Conservation Commission. To my left is Commissioner 9 Dan Seamount and I'm Cathy Foerster. 10 We're having a hearing this morning regarding 11 docket number CO 16-005, Tyonek gas pool, Beaver Creek 12 unit, to define the pool and establish well spacing 13 requirements. Hilcorp Alaska, LLC by application 14 received February 18, 2016 requests that the Alaska Oil 15 and Gas Conservation Commission amend CO 237A to define 16 the Tyonek Gas Pool and allow for unlimited well 17 spacing within the proposed Tyonek gas pool. 18 Computer Matrix will be recording today's 19 proceedings. You can get a copy of the transcript from 20 them. 21 We have a couple of Hilcorp people here to 22 testify and nobody else. Do you guys need me to read 23 you the rules of how we do testimony or you can 24 remember it from the last 17 times? 25 (No comments) 3 1 CHAIR FOERSTER: Okay. Just remember to speak 2 into the microphone so that Computer Matrix can capture 3 what you say and people in the back of the room can 4 hear you also. 5 All right. Dan, do you have anything to add 6 for the good of the order before Hilcorp begins? 7 COMMISSIONER SEAMOUNT: No, I have -- I have 8 none, Madam Chair. 9 CHAIR FOERSTER: Watch how you put your 10 inflection on that. All right. 11 So please introduce yourself, who you represent 12 and if you want to recognized as an expert what that 13 area of expertise is and we'll proceed. 14 MR. DUFFY: Thank you. Good morning. My 15 name's David Duffy, I'm a landsman for Hilcorp Alaska. 16 I helped coordinate and submit the application. I just 17 wanted to double check. One of the things we normally 18 go through is confidentiality. There's nothing 19 confidential about today's presentation or the 20 application materials so we can take that off the list. 21 CHAIR FOERSTER: Good. 22 MR. DUFFY: And in terms of testimony we have 23 two folks from Hilcorp that are available today, Jacob 24 Dunston who's a geologist and Dan Taylor who's a 25 reservoir engineer, both of which authored the papers 4 1 that accompanied our application. Neither one of them 2 have been qualified as experts before so we'll need to 3 walk them through that. And if there's any questions 4 about land issue or the application itself I'd be glad 5 to help out, but other than that it's really more of a 6 technical show. 7 CHAIR FOERSTER: Okay. You don't have any 8 disgruntled landowners? 9 MR. DUFFY: None at all. Beaver Creek is a 10 very straightforward unit, it's CIRI and BLM. 11 CHAIR FOERSTER: Okay. Thank you, Mr. Duffy. 12 Good morning, gentlemen. First let me swear 13 you both in. Raise your right hand and repeat after 14 that me. 15 (Oath administered) 16 IN UNISON: I do. 17 CHAIR FOERSTER: Thank you. All right. So one 18 at a time introduce yourself, who you represent, what 19 your area of expertise is and what your credentials are 20 and then we'll pass judgment upon you. 21 MR. TAYLOR: Good morning. My name is Daniel 22 Taylor, I'm a reservoir engineer for Hilcorp Alaska. I 23 have been working as a reservoir engineer now for just 24 over a year for Hilcorp and the previous two years 25 before that I was working as an operations engineer for 5 1 Hilcorp. Prior to that I worked for two years as a 2 wireline field engineer for Schlumberger. And I 3 graduated from the University of Alaska Fairbanks in 4 2010. 5 CHAIR FOERSTER: With a degree in? 6 MR. TAYLOR: With a degree in petroleum 7 engineering. 8 CHAIR FOERSTER: Thank you. 9 MR. DUNSTON: My name's Jacob Dunston, I'm a 10 geologist at Hilcorp, I've been there for eight and a 11 half years. Prior to that I worked for Burlington 12 Resources as a geologist for a year and a half and 13 prior to that I was an environmental geologist for PPM 14 Consultants in Birmingham, Alabama. I have a master's 15 degree in geology and Boise State and an undergraduate 16 degree in geology from Auburn University. 17 CHAIR FOERSTER: From Auburn? 18 MR. DUNSTON: Yes, ma'am. 19 CHAIR FOERSTER: Commissioner Seamount, do you 20 have any questions or concerns? 21 COMMISSIONER SEAMOUNT: Mr. Engineer, what's 22 your name again? 23 MR. TAYLOR: Daniel Taylor. 24 COMMISSIONER SEAMOUNT: My name is Daniel 25 Taylor Seamount so on those bases I would be inclined R 1 to consider you an expert witness, but since you're an 2 engineer I have to think about it. Okay. I've thought 3 long enough. I have no objections. 4 CHAIR FOERSTER: Okay. I have no objections to 5 either one of you and we will recognize you both as -- 6 well, Mr. Taylor as an expert in reservoir engineering 7 and Mr. Dunston as an expert in geology. 8 COMMISSIONER SEAMOUNT: You didn't ask me if I 9 wanted to ask Mr. Dunston a question. 10 CHAIR FOERSTER: I asked you if you wanted to 11 ask either one of them. 12 COMMISSIONER SEAMOUNT: Oh, okay. Well, I 13 have..... 14 CHAIR FOERSTER: You have to listen to 15 understand the question. 16 COMMISSIONER SEAMOUNT: I've been gone for two 17 weeks so I'm still asleep. Okay. Mr. Dunston, I have 18 no objections either. 19 CHAIR FOERSTER: Okay. Well, then I'll repeat 20 what I just said. You're both recognized as experts 21 and you may proceed. And as you talk if you're tag 22 teaming be sure to if you change who's speaking 23 identify the speaker for the record. And as you refer 24 to -- oh, you're going to hand us -- you're going to 25 give us a copy of the overheads, aren't you, for the 7 1 record, do we have that? 2 (No comments) 3 CHAIR FOERSTER: Okay. And so as you refer to 4 different pictures if they're numbered reference slide 5 number and if they're not reference the title of the 6 page. 7 Does that make sense? 8 COMMISSIONER SEAMOUNT: Thank you. 9 MR. DUNSTON: Yes, ma'am. 10 CHAIR FOERSTER: So, you know, 15 years from 11 now when somebody's trying to follow what you were 12 saying, they can do that. 13 Okay. I think I'm through giving you rules. 14 JACOB DUNSTON 15 previously sworn, called as a witness on behalf of 16 Hilcorp Alaska, stated as follows on: 17 DIRECT EXAMINATION 18 MR. DUNSTON: So I believe we're going to..... 19 CHAIR FOERSTER: My name is? 20 MR. DUNSTON: Oh, my name's Jacob Dunston, 21 sorry. Excuse me. And today we're going to try to 22 discuss the establishment of pool rules for the 23 previously undefined Tyonek zone and Beaver Creek. 24 Currently there are three defined pools in the 25 Beaver Creek field. There's the shallow Sterling gas 1 pool, the Beluga gas pool and the Beaver Creek oil 2 pool. And figure Al, we have a cross-section showing 3 the existing pools on logs in the corresponding wells 4 that they are defined to. We have the shallow Sterling 5 pool which is defined as 5,188 to 6,370 in Beaver Creek 6 number 1A. And so that is shown here. And we have the 7 wells correlated accordingly because there's different 8 pools with different wells and et cetera. So we have 9 our Beaver Creek 6, Beaver Creek 24 and the Beaver 10 Creek 4. 11 The next pool is the Beluga gas pool as defined 12 from 6,370 to 9,650 in the 1A. So again 13 straightforward correlation in all the wells. And 14 here's the basal depth. And I'll show the lower one to 15 the Beaver Creek oil pool as shown in the Beaver Creek 16 4 between, 8,886 and 14,518. And you can see that 17 zone's very deep. And what that does is it leaves kind 18 of a gap and that's what we're calling the Tyonek gas 19 pool, the undefined gas pool. So today we'd like to 20 establish the pool rules for that or establish that as 21 a pool and so we can set up proper development of that 22 -- those sands. 23 Any questions about this slide? 24 COMMISSIONER SEAMOUNT: Okay. Could you go up 25 to the top of the cross-section..... X 1 MR. DUNSTON: Yes, sir. 2 COMMISSIONER SEAMOUNT: .....please? Okay. 3 The lA is the one on the right and the one you want to 4 define the pool is which, the number 4 well? 5 MR. DUNSTON: No, sir. The number 4 well is 6 out there because it is the well that defined the deep 7 oil pool. 8 COMMISSIONER SEAMOUNT: Oh, okay. 9 MR. DUNSTON: The lA was not deep enough. 10 COMMISSIONER SEAMOUNT: So which is the one you 11 want to define the pool? 12 MR. DUNSTON: Oh, it's going to -- yeah, you're 13 correct. It's going to be the number 4. 14 COMMISSIONER SEAMOUNT: The number 4. Okay. 15 Thank you. 16 CHAIR FOERSTER: Are you going to characterize 17 the fluidity or discontinuity of these reservoirs? 18 MR. DUNSTON: Sure. 19 CHAIR FOERSTER: Then I'll wait until you do 20 that. 21 MR. DUNSTON: The Tyonek is very similar to the 22 rest of the Tyonek across the Kenai Peninsula. It's 23 made up of, you know, five to 15, 20 foot thick sands 24 relatively continual across the fields, but not so much 25 from field to field, lower permeability, lower 10 1 porosity, distinct log characteristics with lower 2 resistivity in the sands and abundant coal markers. 3 It's pretty typical, I'm sure you're pretty familiar 4 with hearing those in discussions of the Tyonek. So 5 nothing special, nothing about it. We recently..... 6 CHAIR FOERSTER: We just need to establish a 7 record. 8 MR. DUNSTON: Sure. It's been relatively 9 overlooked as gas bearing zones at Beaver Creek until 10 one of our more recent drill wells found gas and 11 established that it is productive at a commercial rate. 12 And we think we based off of that can go back with a 13 different type of approach, different type of 14 petrophysical interpretation, and find a few more gas 15 zones. 16 Previously this -- it has shown to be 17 productive at Beaver Creek. There have been three 18 Tyonek tests that have shown gas pay. The first one 19 was the Beaver Creek 6, 1996. 20 CHAIR FOERSTER: And what figure are you 21 referring to now? 22 MR. DUNSTON: This is figure A2. 23 CHAIR FOERSTER: A2. Figure A2 in my book is 24 another cross-section. 25 MR. DUNSTON: I don't think so. It is. So 11 1 excuse me, they're not labeled properly in the..... 2 CHAIR FOERSTER: Well, whatever they're 3 labeled, just refer to -- I think it's labeled exhibit 4 D, the Tyonek gas pool. 5 MR. DUNSTON: Is it D, it may be D. You'll 6 have to excuse me. 7 CHAIR FOERSTER: I just want to make sure, you 8 know, when..... 9 MR. DUNSTON: Sure. Sure. 10 CHAIR FOERSTER: .....people refer to it in the 11 future they know what to look at. 12 MR. DUNSTON: We're looking at exhibit D on 13 the..... 14 CHAIR FOERSTER: Thank you so much. 15 MR. DUNSTON: .....last page. And the image 16 you have is slightly different than the ones we have, 17 we have a zoomed in view of that. And this is an 18 outline of the proposed Tyonek gas PA..... 19 CHAIR FOERSTER: Uh-huh. 20 MR. DUNSTON: .....and I guess shaded red. And 21 the definition of the gas reservoir itself in a red 22 contour. So..... 23 CHAIR FOERSTER: Okay. Your map looks very 24 different. 25 MR. DUNSTON: It's very different. 12 1 CHAIR FOERSTER: It's very different from the 2 one that's in the packet. 3 UNIDENTIFIED VOICE: Zoomed in. 4 CHAIR FOERSTER: No, this map that you're 5 showing is not in the packet so could we get that map 6 for the record since that's the one you're..... 7 MR. DUNSTON: Sure. 8 CHAIR FOERSTER: .....referencing..... 9 MR. DUNSTON: Yes. 10 CHAIR FOERSTER: .....it's not exhibit D, it's 11 a to be provided map. Okay. All right. We'll make 12 this as painful for you as possible..... 13 MR. DUNSTON: Absolutely. 14 CHAIR FOERSTER: .....so that you learn from 15 it..... 16 MR. DUNSTON: Well, we're doing our best..... 17 CHAIR FOERSTER: .....and don't do it next 18 time. 19 MR. DUNSTON: .....to help along with that. 20 CHAIR FOERSTER: Okay. 21 MR. DUNSTON: So the production history of this 22 -- of the Tyonek at Beaver Creek, there have been three 23 wells that have test a little bit of gas, there's the 24 Beaver Creek 6 which was co -mingled with the Beluga for 25 the entirety of its production. 13 1 Dan, do you want to speak on that? 2 DANIEL TAYLOR 3 previously sworn, called as a witness on behalf of 4 Hilcorp Alaska, stated as follows on: 5 DIRECT EXAMINATION 6 MR. TAYLOR: It came on..... 7 CHAIR FOERSTER: My name is? 8 MR. TAYLOR: My name is Daniel Taylor. Beaver 9 Creek 6 came on at plus or minus 4 million a day and as 10 Mr. Dunston said it was co -mingled with the Beluga and 11 it produced from 19 -- the end of 196 all the way until 12 2007. Post Beaver Creek 6 in 2013 the 1B was 13 perforated in the Tyonek with initially it IP'd at plus 14 or minus 3 million, but it quickly ran off and was not 15 -- was no longer economic. And that went until 2015. 16 Last year we perforated the Beaver Creek 24 and it came 17 on at 11 million a day in the Tyonek. And RTA is 18 showing now that there's plus or minus 10 B's in place. 19 We have another well, the Beaver Creek 23, that one of 20 the reasons we're looking to establish the rules, one 21 of the many, is that 23 also has that same sand in it 22 along with -- along with several others that have the 23 same characteristics. 24 CHAIR FOERSTER: Is all the productive area 25 within the PA? 14 1 MR. TAYLOR: Yes, ma'am. 2 CHAIR FOERSTER: And all of the leases are tied 3 up and -- okay. 4 UNIDENTIFIED VOICE: (Indiscernible - away from 5 microphone)..... 6 CHAIR FOERSTER: Maybe later. So remember as 7 you talk -- as you start to talk let the court reporter 8 know who's talking. 9 MR. TAYLOR: Yes, ma'am. 10 CHAIR FOERSTER: You all tend to do a little 11 tag team. 12 MR. DUNSTON: So the completions -- this is 13 Jacob Dunston. So the completions in each of the wells 14 historically have been in different sands, not just the 15 same sand. So there is -- but each of the completions 16 the sands within those wells show continuity between 17 the wells and across the field. And so we need to -- 18 in order to test the ability of these sands to flow 19 because that's the primary concern is permeability, we 20 have to establish the pool rules, currently we just 21 can't test anything. 22 So I'll show -- this is going to be in the 23 package. So if you'll refer -- this is Jacob Dunston 24 again, if you'll refer to figure B1. 25 CHAIR FOERSTER: Okay. 15 1 MR. DUNSTON: So -- Jacob Dunston. This is a 2 stratigraphic cross-section of the Tyonek at Beaver 3 Creek. It is hung on the top of the Tyonek, the Tyonek 4 gas top. You can see in the Beaver Creek 6 it was 5 perforated in one of the upper sands. 24 is currently 6 perforated in the T3 sand and a deeper Tyonek sand. 7 And the B1 or 1B tested several sands before it was 8 plugged back to the Beluga. So multiple sands in the 9 Tyonek gas pool have proven productive on different -- 10 on varying degrees of success. 11 COMMISSIONER SEAMOUNT: And which well can you 12 not produce until you get the pool rules? 13 MR. TAYLOR: This is Daniel Taylor. That's 14 Beaver Creek 23. 15 COMMISSIONER SEAMOUNT: 23. And when was that 16 drilled? 17 MR. TAYLOR: 2014. 18 COMMISSIONER SEAMOUNT: 114. What month, I 19 mean, is it still confidential? It's not confidential. 20 Okay. But you cannot test it..... 21 MR. TAYLOR: It's currently producing in the 22 Beluga..... 23 COMMISSIONER SEAMOUNT: Okay. 24 MR. TAYLOR: .....right now. And at -- we're 25 not -- it's shut-in currently due to the compression, 16 1 but we would like to test it lower. We have -- it's 2 drilled through the Tyonek and is producing in the 3 Beluga. 4 CHAIR FOERSTER: It's shut-in because it's low 5 pressure and you don't have low enough pressure 6 compressions, is that..... 7 MR. TAYLOR: We're flowing straight to sales. 8 CHAIR FOERSTER: Oh, okay. 9 MR. TAYLOR: This is Daniel Taylor again, 10 flowing to sales and we..... 11 CHAIR FOERSTER: You have no compression. 12 MR. TAYLOR: .....cannot -- no. 13 CHAIR FOERSTER: Okay. Are you considering 14 adding compression? 15 MR. TAYLOR: We have the compression to do it, 16 it's shut-in for -- it's uneconomic at -- right now in 17 order to flow the well. 18 CHAIR FOERSTER: Okay. Thank you. I have a 19 question. Do you need to perforate more than one of 20 these lenses at a time in order to get a commercial 21 completion? 22 MR. TAYLOR: This is Daniel Taylor again. No, 23 we do not. As of right now we -- Beaver Creek 24 to 24 give you an example is -- was perforated based on gas 25 show and there's low resistivity, we look at different 17 1 -- when we look at our logs we're looking for a 2 crossover a lot of times, we're looking for approach on 3 these wells and a lot of time we use the -- simply use 4 the perf gun to see if it's gas or not. So whether or 5 not we have to, we don't think we have to, there is -- 6 like Beaver Creek 24 is simply one lens and we're 7 looking for more of those. 8 CHAIR FOERSTER: So are you going to -- are you 9 -- is your intent to produce a lens at a time and work 10 your way up the well or..... it MR. TAYLOR: Yes. Yes, that is the..... 12 CHAIR FOERSTER: Okay. That's the plan. Okay. 13 Thank you. 14 MR. DUNSTON: This is Jacob Dunston. I'm not 15 sure what else, I mean, that's really the extent of 16 the..... 17 CHAIR FOERSTER: Of your testimony? 18 MR. DUNSTON: .....background on -- or 19 technical..... 20 CHAIR FOERSTER: Okay. 21 MR. DUNSTON: .....side of this. 22 CHAIR FOERSTER: All right. So you all are 23 done? 24 MR. DUNSTON: Yes, ma'am. 25 MR. TAYLOR: Yes, ma'am. In 1 CHAIR FOERSTER: All right. Commissioner 2 Seamount, do you have any questions? 3 COMMISSIONER SEAMOUNT: I just have one 4 question. Mr. Taylor, are you related to the Taylors 5 of Wichita, Kansas? 6 MR. TAYLOR: No, sir. My dad's from Barbados. 7 COMMISSIONER SEAMOUNT: Oh, it's a common name, 8 I know that. That's all I have. 9 CHAIR FOERSTER: Well, that clears things up 10 for me, glad you asked that. 11 I don't have any further questions for you. So 12 at this point you guys are done, we don't have anymore 13 questions, do you have a wrap up or do you want me to 14 just beat the gavel and say we're adjourned? You can 15 just nod. 16 MR. DUNSTON: Yes. 17 CHAIR FOERSTER: Okay. Unless there's anyone 18 else in the audience who would like to testify or 19 unless our Assistant Attorney General wants to finish 20 playing words with friends and ask any questions, then 21 we're adjourned. 22 (Hearing adjourned - 9:24 a.m.) 23 9:24:56 24 (END OF PROCEEDINGS) 19 1 C E R T I F I C A T E 2 UNITED STATES OF AMERICA ) 3 )ss 4 STATE OF ALASKA ) 5 6 I, Salena A. Hile, Notary Public in and for the 7 state of Alaska, residing in Anchorage in said state, 8 do hereby certify that the foregoing matter: Docket 9 No.: CO 16-005 was transcribed to the best of our 10 ability; Pages 02 through 20; 11 IN WITNESS WHEREOF I have hereunto set my hand 12 and affixed my seal this loth day of April 2016. 13 14 15 Salena A. Hile 16 Notary Public, State of Alaska 17 My Commission Expires: 09/16/2018 18 20 Two references wells are used to defined the gas pools within the Beaver Creek Unit. The Beluga Gas Pool is defined utilizing the Beaver Creek Unit No. 1A well. The Proposed Tyonek Gas Pool will be defined using the Beaver Creek Unit No. 4 well. Is the depth of the proposed top of the Tyonek Gas Pool in Beaver Creek Unit No. 4 consistent with the depth of the base of the overlying Beluga Gas Pool within well Beaver Creek Unit No. 1A? HEC PP TRA 12U7 15 1 53 17 PM .0 06 BCU 24 aclf ofa � mm-E-090--am"mM r�IR a Eaiio—OWa now 1rWIIL� MUMpr LIMIT E lk ' WAIL M E� f al Ifnir WAR �! 1: Ciro![ iE�IE�� iFM--] �a WIE i �� Will iC �,�l t lF�It � bW-7Ir/A-02 rM all Wit Val= w_a;tm 'l�A WMA Kull Will mi 1011E Iskilit .. �1 MAI •rIE+� � MAID MR rdl "IE WAI 0-sit wol MLNMI�I pmIr_m �ir�llfa� acu06 EXHIBIT 2 Hilcorp Alaska Beaver Creek Field Top Undefined Tyonek Gas Pool 0 1.000 z o00 FEET WELLSYMBOLS X AbantonedLocation -Pennll Gas WWI Inpe tbn Wall • Oil Wall Plugged and Abandoned Match 29, 2016 Tyonek Gas Reservoir Corrected Proposed Tyonek Gas PA O O O BCU 1 Qp BCU o -8,7 1 / BgII 12A -8' 593 BCU 14 � BCU 14A 008,650 BCU 07 -8,826 ♦ -8800 , V 10o 0 CU 03RD ' BCU 03 BCU OSRD C 11 / If BCU 18 II u a0 5 7 BCU 10 !I J. O BCU 23 II -8,534 ICU 06 '%`� 3,570' r B ,a ,518 BCO og \ BCU 24' 25* -8,55M BCU 16RD CU 16 - BC 01 01A ' 1 �0 � BCU 07AI -8,64 u 00 Im__ 0 O O CO I (Exhibit not scannable) STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION Docket Number: CO-16-005 Beaver Creek Field Modify CO 237A March 29, 2016 NAME AFFILIATION Testify (yes or no) Nelson Qs+rzj(r-um Aec.J 5 A[6 r is WaLU c2 A-0 (, C Al r� ba,ot- R,) b A-0 G. C G AV o k (-(,A ram( (0a Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO-16-005 Tyonek Gas Pool, Beaver Creek Unit Define Pool and Establish Well Spacing Requirements Hilcorp Alaska, LLC, by application received February 18, 2016, requests the Alaska Oil and Gas Conservation Commission (AOGCC) amend Conservation Order 237A to define the Tyonek Gas Pool and allow for unlimited well spacing within the proposed Tyonek Gas Pool. The AOGCC has tentatively scheduled a public hearing on this application for March 29, 2016, at 9:00 a.m. at 333 West 7' Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on March 8, 2016. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after March 10, 2016. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 70' Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on March 23, 2016, except that, if a hearing is held, comments must be received no later than the conclusion of the March 29, 2016 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than February 24, 2016. Cathy . Foerster Chair, Commissioner STATE OF ALAS" ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENT. ADVERTISING ORDER NUMBER AO-16-016 FROM: Alaska Oil and Gas Conservation Commission AGENCY CONTACT: Jody Colombie/Samantha Carlisle DATE OF A.O. 02/16/16 AGENCY PHONE: 1(907) 793-1223 333 West 7th Avenue Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: 2/19/2016 FAX NUMBER: (907) 276-7542 TO PUBLISHER: Alaska Dispatch News SPECIAL INSTRUCTIONS: PO Box 149001 Anchorage, Alaska 99514 TYPE OF ADVERTISEMENT: LEGAL IF DISPLAY F CLASSIFIED F_ OTHER (Specify belovv) DESCRIPTION PRICE CO-16-005 Initials of who prepared AO: Alaska Non -Taxable 92-600185 ............................... ::SYLIMIT INVOIC'R SHOW NG AJ)YrRTISJNG: : ORDE:R:NO;, CERT[FIED:AFFIDA:VIT:OF;:: .". bRD _ ........ UZ ....... )AVIT: ... . ''P.t16LICATION......ITAC[I......... .:�: .ADVikTtSMEN2':TO::.:.:.:.:...:.:.:.:. Department of Administration Division of AOGCC 333 West 7t11 Avenue Anchorage, Alaska 99501 Page 1 of 1 Total Of All Pa es $ REF Type Number Amount Date Comments I PVN ADN84501 2 Ao AO-16-016 3 4 FIN AMOUNT SY Appr Unit PGM LGR Object FY DIST LIQ 1 16 021147717 3046 16 2 3 4 5 Purchasing Authority Name: Tide: urc n A hority's Si nature Telephone Number 1. A.O. # and receiving agency name must appear on all invoices and documents relating t this purchase. 2. The state is registered for tax free transactions under Chapter 32, IRS code. Registrati number 92-73-0006 K. Items are for the exclusive use of the state and not for resale. .......... .....:.....:...:....:................................................................................................ .......................................................................................................... . i ". i. Fi ri in I Xa ::::::::: +C. ies:::Pdlilisher:.fazed :Division:... .. Iieceivin :: :::::::::::::::::::::::::::::::::::::::: : Form:02-901 Revised: 2/18/2016 270227 0001380751 $199.22 STATE OF ALASKA RECEIVED FEB 2 9 2016 AFFIDAVIT OF PUBLICATION AOGCC THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on February 20, 2016 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed &..= 0a, - ; Subscribed and sworn to before me this 22nd day of February, 2016 Notary Pub'TI'c in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO-16-005 Tyonek Gas Pool, Beaver Creek Unit Define pool and allow unlimited spacing exceptions Hilcorp Alaska, LLC, by application received February 18, 2016 requesting the Alaska Oil and Gas Conservation Commission (AOGCC) to amend Conservation Order 237A to define the Tyonek Gas Pool and allow for unlimited well spacing exceptions with said pool within 1500' of the Beaver Creek Unit boundary. The AOGCC has tentatively scheduled a public hearing on this application for March 29, 2016, at 9:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on March 8, 2016. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after March 10, 2016. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West, 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on March 23, 2016, except that, if a hearing is held, comments must be received no later than the conclusion of the March 29, 2016 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than February 24, 2016. AO-16-016 Published: February 20, 2016 Cathy P. Foerster Chair, Commissioner Notary Public BRITNEY L. THOMPSON State of Alaska My Commission Fxpires Feb 23, ^2019 Penny Vadla Jack Hakkila George Vaught, Jr. 399 West Riverview Avenue P.O. Box 190083 P.O. Box 13557 Soldotna, AK 99669-7714 Anchorage, AK 99519 Denver, CO 80201-3557 Darwin Waldsmith P.O. Box 39309 Ninilchick, AK 99639 James Gibbs P.O. Box 1597 Soldotna, AK 99669 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Bernie Karl Gordon Severson Richard Wagner K&K Recycling Inc. 3201 Westmar Circle P.O. Box 60868 P.O. Box 58055 Anchorage, AK 99508-4336 Fairbanks, AK 99706 Fairbanks, AK 99711 Carlisle, Samantha J (DOA) From: Carlisle, Samantha J (DOA) Sent: Thursday, February 18, 2016 3:22 PM To: Ballantine, Tab A (LAW) (tab.ballantine@alaska.gov); Bender, Makana K (DOA) (makana.bender@alaska.gov); Bettis, Patricia K (DOA) (patricia.bettis@alaska.gov); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA) (phoebe.brooks@alaska.gov); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA) oody.colombie@alaska.gov); Cook, Guy D (DOA); Davies, Stephen F (DOA) (steve.davies@alaska.gov); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA) (cathy.foerster@alaska.gov); Frystacky, Michal (michal.frystacky@alaska.gov); Grimaldi, Louis R (DOA) (lou.grimaldi@alaska.gov); Guhl, Meredith (DOA sponsored) (meredith.guhl@alaska.gov); Herrera, Matthew F (DOA); Hill, Johnnie W (DOA); Jones, Jeffery B (DOA) (Jeff jones@alaska.gov); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored) Qoseph.mumm@alaska.gov); Noble, Robert C (DOA) (bob.noble@alaska.gov); Paladijczuk, Tracie L (DOA)(tracie.palad ijczuk@alaska.gov); Pasqual, Maria (DOA) (maria.pasqual@alaska.gov); Quick, Michael J (DOA); Regg, James B (DOA) oim.regg@alaska.gov); Roby, David S (DOA) (dave.roby@alaska.gov); Scheve, Charles M (DOA) (chuck.scheve@alaska.gov); Schwartz, Guy L (DOA) (guy.schwartz@alaska.gov); Seamount, Dan T (DOA) (dan.seamount@alaska.gov); Singh, Angela K (DOA) (angela.singh@alaska.gov); Wallace, Chris D (DOA) (chris.waIlace@alaska.gov); AKDCWellIntegrityCoordinator; Alan Bailey; Alex Demarban; Alexander Bridge; Allen Huckabay; Amanda Tuttle; Andrew VanderJack; Anna Raff; Barbara F Fullmer; bbritch; Becky Bohrer; Bob Shavelson; Brian Havelock; Bruce Webb; Burdick, John D (DNR); Caleb Conrad; Carrie Wong; Cliff Posey; Colleen Miller; Crandall, Krissell; D Lawrence; Dave Harbour; David Boelens; David Duffy; David House; David McCaleb; David Steingreaber; David Tetta; ddonkel@cfl.rr.com; Dean Gallegos; Delbridge, Rena E (LAS); DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elowe, Kristin; Evans, John R (LDZX); Frank Molli; Gary Oskolkosf; George Pollock; Gordon Pospisil; Gregg Nady; gspfoff; Hyun, James J (DNR); Jacki Rose; Jdarlington oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jerry McCutcheon; Jim Watt; Jim White; Joe Lastufka; Joe Nicks; John Easton; Jon Goltz; Juanita Lovett; Judy Stanek; Julie Houle; Julie Little; Karen Thomas; Kari Moriarty; Kazeem Adegbola; Keith Wiles; Kelly Sperback; Laura Silliphant (laura.gregersen@alaska.gov); Leslie Smith; Louisiana Cutler; Luke Keller; Marc Kovak; Mark Dalton; Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Marquerite kremer (meg.kremer@alaska.gov); Mary Cocklan-Vendl; Mealear Tauch; Michael Calkins; Michael Duncan; Michael Moora; Mike Bill; MJ Loveland; mkm7200; Morones, Mark P (DNR); Munisteri, Islin W M (DNR); nelson; Nichole Saunders; Nick W. Glover; Nikki Martin; NSK Problem Well Supv; Oliver Sternicki; Patty Alfaro; Paul Craig; Paul Decker (paul.decker@alaska.gov); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer; Stephen Hennigan; Steve Moothart (steve.moothart@alaska.gov); Suzanne Gibson; Tamera Sheffield; Tania Ramos; Ted Kramer; Temple Davidson; Terence Dalton; Teresa Imm; Thor Cutler; Tim Mayers; Todd Durkee; trmjrl; Tyler Senden; Vicki Irwin; Vinnie Catalano; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andrew Cater; Anne Hillman; Brian Gross; Bruce Williams; Bruno, Jeff J (DNR); Caroline Bajsarowicz, Casey Sullivan; Diane Richmond; Don Shaw; Donna Vukich; Eric Lidji; Graham Smith; Hak Dickenson; Heusser, Heather A (DNR); Holly Pearen; Jason Bergerson; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Kenneth Luckey; King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); To: Marc Kuck; Marcia Hobson; Marie Steele; Matt Armstrong; Mike Franger; Morgan, Kirk A (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Robert Province; Ryan Daniel; Sandra Lemke; Susan Pollard; Talib Syed; Terence Dalton; Tina Grovier (tmgrovier@stoel.com); Todd, Richard J (LAW); Tostevin, Breck C (LAW); Wayne Wooster; William Van Dyke Subject: Notice of Public Hearing (BCU, Hilcorp) Attachments: CO-16-005 Public Hearing Notice.pdf Please see attached. Samantha Carlisle I xeccrtive Secretary III Alaska Oil arid. Gas C::onserva.tio.n. Commission 333 West 711, Avenue Anchorage, AK 99501 (907) 793-1223 CONFIDENTiAMY 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 Samantha. Carlisle at (907) 793-1223 or Samantha.Carlisle@alaska.gov. rul Hilcorp Alaska, LLC February 17, 2016 Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 FEB 18 2016 Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone:907/777-8414 Fax: 907/777-8301 Email: dduffy@hilcorp.com RE: Proposal to amend Conservation Order 237A to define the Tyonek Gas Pool and allow for unlimited well spacing exceptions within said pool within 1500' of the Beaver Creek Unit boundary. Dear Commissioner Foerster, Hilcorp Alaska, LLC ("Hilcorp"), as Operator of the Beaver Creek Field, respectfully requests the Alaska Oil and Gas Conservation Commission ("AOGCC") take administrative action to amend Rule 2 (Pool Definition) of Conservation Order 237A to define the Beaver Creek Field Tyonek Gas Pool. 1 Hilcorp also requests AOGCC take administrative action to modify Rule 3(a) to allow for unlimited well spacing within the proposed Tyonek Gas Pool. The language proposed by Hilcorp states: Rule 2 Pool Definition: (a) The Sterling Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well no. IA between the measured depths of 5,188 and 6,370 feet. [no change to CO 237A] (b) The Beluga Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. IA between the measured depths of 6,370 and 9,650 feet [no change to CO 237.002] (c) The Tyonek Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. 4 between the measured depths of 8,886 feet (equivalent marker to 9,650' in BCU IA) and 14,518 feet. [proposed amendment to this order] 1 Conservation Order 237, Rule 4 states: "Upon written application, the Commission may administratively amend this order. The operator must demonstrate to the Commission that sound engineering practices are maintained and the amendment will prevent waste and protect correlative rights." Hilcorp Alaska, LLC Proposal to Amend Conservation Order 237A Page 2 of 3 (d) The Beaver Creek Oil pool is defined as the accumulation of oil that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. 4 between the measured depths of 14,518 feet and 15,874 feet. [no change to CO 237A] Rule 3 Well Spacing: a) There shall be no restrictions as to gas well spacing in the Sterling, Beluga and Tvonek Gas Pools except that no pay shall be opened in a well within 1,500 feet from the exterior boundary of the Beaver Creek unit where owners and landowners are not the same on both sides of the line. [proposed modification to this order] b) Well spacing in the Beaver Creek Oil Pool shall be 40 acres. No wellbore may be opened nearer than 660 feet from the nearest open wellbore in the same pool. No wellbore may be opened nearer than 500 feet from the exterior boundary of the Beaver Creek Unit where owners and landowners are not the same on both sides of the line. [no change to CO 237A] DISCUSSION Hilcorp is the sole working interest owner and operator of the Beaver Creek Unit. The Bureau of Land Management (`BLM") is the unit manager. The unit is comprised 3680 acres. Cook Inlet Region, Inc. ("CIRI") and the Federal Government jointly hold an ownership interest in each of the four (4) leases that comprise the unitized acreage. There are no other affected owners, landowners, or operators The Beaver Creek Field is located in the Kenai National Wildlife Refuge approximately 11 miles northeast of Kenai, Alaska. Following unit formation in 1967, initial development resulted in the production of gas from both the Sterling and upper Tyonek Formation and oil from the Lower Tyonek formation. On August 5, 1988, the AOGCC first established pool rules for Beaver Creek Unit through the issuance of Conservation Order 237. On March 25, 2014, AOGCC issued Conservation Order 237.001, granting a spacing exception to allow the testing, completion and production from the Beluga Pool closer than 1,320' from the nearest wellbore open to the same pool. On April 22, 2014, AOGCC issued Conservation Order 237.002, authorizing the vertical expansion of the Beluga Gas Pool. On June 18, 2014, AOGCC issued Conservation Order 237A, to remove intra-field well spacing requirements for the Sterling and Beluga Gas pools. To promote continued exploration and development of the currently undefined Tyonek Gas Pool, Hilcorp requests now AOGCC formally define the pool and apply existing Hilcorp Alaska, LLC Proposal to Amend Conservation Order 237A Page 3 of 3 pool rules to this formation. In support of this application, Hilcorp has prepared a confidential geologic and engineering report. See Exhibits A and B. In parallel, Hilcorp has submitted a proposal to the BLM to establish a new Tyonek Gas Participating Area to accommodate production from the Tyonek Gas Pool. Doing so will prevent waste and ensure that the correlative rights of both CIRI and the Federal Government area adequately protected. See Exhibit C-1 and C-2 (Current Unit Exhibit and Map) and Exhibit D (proposed Tyonek Pool). Hilcorp's proposed rules are designed to prevent waste, protect correlative rights and improve the ultimate recovery of remaining hydrocarbons throughout the Beaver Creek field. They are also designed to reduce the administrative burdens on AOGCC, BLM and CIRI staff. Hilcorp would be pleased to schedule a technical meeting with AOGCC staff to provide additional information in support of this proposal. Should you have any other questions, please do not hesitate to contact me at (907) 777-8432. Sincerely, David Duffy, Landman Hilcorp Alaska, LLC CC: Sharon L. Yarawsky, BLM Alaska State Office, Branch of Energy and Minerals 222 W. 7t' Avenue, #13 Anchorage, AK 99513-7504 Colleen Miller, Manager, Resources Cook Inlet Region, Inc. 725 E. Fireweed Lane, Suite 800 Anchorage, AK 99503 Exhibit "C-1" Beaver Creek Unit BCU Tyonek Gas Participating Area Effective June 1, 2015 Working Working Tract Tract Mineral Mineral Royalty ORRI ORRI Interest Interest Tract Tract Legal Description Acreage Lease # Percentage Owner Interest Percent Owner Percent Ownership Owner % 4 Township 7 North, Range 10 West, 560.0000 HAK # 35 93.3333333% Bureau of Land 82.81% 12.500% Paul Geiger 0.500000% Hilcorp Alaska, LLC 100.006/o Seward Meridian AKA # A-028083 Management Peter Geiger 0.500000 HAK # 35 Cook Inlet Region, Inc. 17.191/1 12.5001/ Section 27: that portion of Lot 2 that lies within the SE/4SW/4, that portion of Lot 2 AKA # A-028083 that lies within the W/2SE/4, that portion of Lot 2 that lies within the SE 4SE/4; Section 34: N/2NE/4 including submerged lands, SW/4NE/4, E/2NW/4, SWANWA, E/29W/4, W/2SE/4; 8 Township 6 North, Range 10 West, 40.0000 HAK # 36 6.6666667% Bureau of Land 58.33% 12.5001/ Kirkpatrick Walkowski 1.0000009/6 Hilcorp Alaska, LLC 100.001/1 Seward Meridian AKA # A-028118 Management Watkins Trust Section 3: That portion of Lot 1 that lies HAK # 36 Cook Inlet Region, Inc. 41.67% 12.500% within the NE/4NW/4 AKA # A-028118 Total PA Total Tract Working Interest Acreage Percentage Owners PA % 600.000 100.0000001/ Uncommitted 0.0000% Hilcorp Alaska, LLC 100.0000% BCU Tyonek Gas PA - Proposal to Amend CO 237A Page 1 of t Last Update: 2/16/2016 Exhibit "C-2" Lyonek Gas PA 24 19 20 21 22 23 24 CI RI5810 19 A1327 25 29 26 25 30 7N11W 7N OW 4 7N9W 36 1 32 33 35 36 31 A1327 9 M 327 1 4 8 2 1 6 AO W7 3 6N11W 6N OW 6N9W 12 7 9 1 7 AA13277 - Proposed Tyonek Gas PA -- Q Unit Tracts QFederal Leases 13 18 17 16 15 18 2/16/2016 Scale: 1:136,450 Exhibit "D" Tyonek Gas Pool 24 1 0 23 4 CI RI5810 19 A I 25 i 29 26 25 30 7N11W 7NI0 7N9W A 18 36 -34 32 i 33 35 36 31 A1327 i e A1327 1 4 2 1 6 A02 6N11W 6N9W 12 7 9 , Tyonek Gas Reservoir 7 13 77 - Proposed Tyonek Gas PA ® Unit Boundary Federal Leases 13 18 17 16 1 18 2/16/2016 Scale: 1:136,450 rTi Hilcorp Alaska, LLC February 16, 2016 Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 7"' Avenue, Suite 100 Anchorage, Alaska 99501 RECEIVED FEB 19 2016 AOGCC Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 907/777-8414 Fax:907/777-8301 Email: dduffv@hilcorp.com RE: Proposal to amend Conservation Order 237A to define the Tyonek Gas Pool and allow for unlimited well spacing exceptions within said pool within 1500' of the Beaver Creek Unit boundary. Dear Commissioner Foerster, Hilcorp Alaska, LLC ("Hilcorp"), as Operator of the Beaver Creek Field, respectfully requests the Alaska Oil and Gas Conservation Commission ("AOGCC") take administrative action to amend Rule 2 (Pool Definition) of Conservation Order 237A to define the Beaver Creek Field Tyonek Gas Pool. 1 Hilcorp also requests AOGCC take administrative action to modify Rule 3(a) to allow for unlimited well spacing within the proposed Tyonek Gas Pool. The language proposed by Hilcorp states: Rule 2 Pool Definition: (a) The Sterling Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well no. lA between the measured depths of 5,188 and 6,370 feet. [no change to CO 237A] (b) The Beluga Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. IA between the measured depths of 6,370 and 9,650 feet [no change to CO 237.002] (c) The Tyonek Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. 4 between the measured depths of 8,886 feet (equivalent marker to 9,650' in BCU 1A) and 14,518 feet. [proposed amendment to this order] ' Conservation Order 237, Rule 4 states: "Upon written application, the Commission may administratively amend this order. The operator must demonstrate to the Commission that sound engineering practices are maintained and the amendment will prevent waste and protect correlative rights." Hilcorp Alaska, LLC Proposal to Amend Conservation Order 237A Page 2 of 3 (d) The Beaver Creek Oil pool is defined as the accumulation of oil that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. 4 between the measured depths of 14,518 feet and 15,874 feet. [no change to CO 237A] Rule 3 Well Spacing_ a) There shall be no restrictions as to gas well spacing in the Sterling, Beluga and Tyonek Gas Pools except that no pay shall be opened in a well within 1,500 feet from the exterior boundary of the Beaver Creek unit where owners and landowners are not the same on both sides of the line. [proposed modification to this order] b) Well spacing in the Beaver Creek Oil Pool shall be 40 acres. No wellbore may be opened nearer than 660 feet from the nearest open wellbore in the same pool. No wellbore may be opened nearer than 500 feet from the exterior boundary of the Beaver Creek Unit where owners and landowners are not the same on both sides of the line. [no change to CO 237A] DISCUSSION Hilcorp is the sole working interest owner and operator of the Beaver Creek Unit. The Bureau of Land Management (`BLM") is the unit manager. The unit is comprised 3680 acres. Cook Inlet Region, Inc. ("CIRI") and the Federal Government jointly hold an ownership interest in each of the four (4) leases that comprise the unitized acreage. There are no other affected owners, landowners, or operators The Beaver Creek Field is located in the Kenai National Wildlife Refuge approximately 11 miles northeast of Kenai, Alaska. Following unit formation in 1967, initial development resulted in the production of gas from both the Sterling and upper Tyonek Formation and oil from the Lower Tyonek formation. On August 5, 1988, the AOGCC first established pool rules for Beaver Creek Unit through the issuance of Conservation Order 237. On March 25, 2014, AOGCC issued Conservation Order 237.001, granting a spacing exception to allow the testing, completion and production from the Beluga Pool closer than 1,320' from the nearest wellbore open to the same pool. On April 22, 2014, AOGCC issued Conservation Order 237.002, authorizing the vertical expansion of the Beluga Gas Pool. On June 18, 2014, AOGCC issued Conservation Order 237A, to remove intra-field well spacing requirements for the Sterling and Beluga Gas pools. To promote continued exploration and development of the currently undefined Tyonek Gas Pool, Hilcorp requests now AOGCC formally define the pool and apply existing Hilcorp Alaska, LLC Proposal to Amend Conservation Order 237A Page 3 of 3 pool rules to this formation. In support of this application, Hilcorp has prepared a confidential geologic and engineering report. See Exhibits A and B. In parallel, Hilcorp has submitted a proposal to the BLM to establish a new Tyonek Gas Participating Area to accommodate production from the Tyonek Gas Pool. Doing so will prevent waste and ensure that the correlative rights of both CIRI and the Federal Government area adequately protected. See Exhibit C-1 and C-2 (Current Unit Exhibit and Map) and Exhibit D (proposed Tyonek Pool). Hilcorp's proposed rules are designed to prevent waste, protect correlative rights and improve the ultimate recovery of remaining hydrocarbons throughout the Beaver Creek field. They are also designed to reduce the administrative burdens on AOGCC, BLM and CIRI staff. Hilcorp would be pleased to schedule a technical meeting with AOGCC staff to provide additional information in support of this proposal. Should you have any other questions, please do not hesitate to contact me at (907) 777-8432. Sincerely, 7� David Duffy, Landman Hilcorp Alaska, LLC CC: Sharon L. Yarawsky, BLM Alaska State Office, Branch of Energy and Minerals 222 W. 7�' Avenue, #13 Anchorage, AK 99513-7504 Colleen Miller, Manager, Resources Cook Inlet Region, Inc. 725 E. Fireweed Lane, Suite 800 Anchorage, AK 99503 Exhibit "C-1" Beaver Creek Unit BCU Tyonek Gas Participating Area Effective June 1, 2015 Working Working Tract Tract Mineral Mineral Royalty ORRI ORRI Interest Interest Tract Tract Legal Description Acreage Lease # Percentage Owner Interest Percent Owner Percent Ownership Owner % 4 Township 7 North, Range 10 West, 560.0000 HAK # 35 93.3333333% Bureau of Land 82.81 % 12.500"/ Paul Geiger 0,500000% Ililcorp Alaska, LLC 100.00% Seward Meridian AKA # A-028083 Management Peter Geiger 0.500000 % Section 27: that portion of Lot 2 that lies HAK # 35 Cook Inlet Region, Inc. 17.19% 12.5001/6 within the SE/4SW/4, that portion of Lot 2 AKA # A-028083 that lies within the W/2SE/4, that portion ofLot 2 that lies within the SE/4SE/4; Section 34: N/2NE/4 including submerged lands, SWANEA, E/2NW/4, SWANW/4, E/2SW/4, W/2SE/4; 8 Township 6 North, Range 10 West, 40.0000 HAK # 36 6.6666667% Bureau of Land 58.33 % 12.500% Kirkpatrick Walkowski 1.0000001% Hilcorp Alaska, LLC 100.00% Seward Meridian AKA # A-028118 Management Watkins Trust Section 3: That portion of Lot 1 that lies HAK it 36 Cook Inlet Region, Inc. 41.67% 12.500% within the NEANW/4 AKA # A-028118 Total PA Total Tract Working Interest Acreage Percentage Owners PA % 600.000 100.000000% Uncommitted 0.0000% - Hilcorp Alaska, LLC 100.0000% BCU Tyonek Gras PA - Proposal to Amend CO 237A Page 1 of 1 Last Update:2/1612016 Exhibit "C-2" ---LTyonek Gas PA 24 19 20 21 22 23 24 CIRI5810 19 A1327 a 25 29 26 25 30 7N11W 7N OW 7N9W i 4 36 31 i 32 33 35 36 31 A1327 9 A1327 1 4 8 2 1 g AO 807 3 _ 118 6N11W 6N OW 6N9W 12 7 9 1 7 13277 - Proposed Tyonek Gas PA QUnit Tracts QFederal Leases 13 18 17 16 15 18 2/16/2016 Scale: 1:136,450 Exhibit "D" Tyonek Gas Pool 24 1 0 23 4 (; 15810 19 25 29 26 25 30 7N11W 7N10 7N9W 36 32 33 I 35 36 31 A1327 1327 1 4 2 1 6 A02 1 3 6N11 W 6N9W 12 7 9 Tyonek Gas Reservoir 7 13 77 - Proposed Tyonek Gas PA ------ ------------- — _------ -------- Q Unit Boundary Federal Leases 13 18 - I 17 16 . , 1 i \ V 18 2/ 1 b/2U 1 b Scale: 1:136,450