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Alaska Oil and Gas Conservation Commission
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HomeMy WebLinkAboutO 111OTHER ORDER 111
Hilcorp Alaska, LLC
Docket 0TH -15-024
1.
September 4, 2015
NOV to Hilcorp re: Rig operations with failed gas detection
system ASR- 1Rig, MPU F-96 (PTD 2081680)
2.
September 17, 2015
Hilcorp's response to 9/4/15 letter
3.
November 25, 2015
AOGCC response to operator's letter of 9/17/16
4.
December 15, 2015
AOGCC letter informing Hilcorp of date and time
Hilcorp's submission for informal review
5.
February 5, 2016
Hilcorp's additional information for informal review
6.
February 18, 2016
Informal Review sign -in sheet
7.
--------------------
Various Emails
8.
October 13, 2016
Hilcorp's letter re: civil penalty payment
OTHER ORDER 111
ORDERS
0
STATE OF ALASKA
ALASKA OIL AND GAS CONSERVATION COMMISSION
333 West Seventh Avenue
Anchorage, Alaska 99501
Re: Rig Operations with Failed Gas Detection System) Other Order No. 111
Milne Point Unit F-96 ) Docket No. OTH-15-024
PTD 2081860 ) September 30, 2016
DECISION AND ORDER
On November 25, 2015 the Alaska Oil and Gas Conservation Commission (AOGCC) issued a
Notice of Proposed Enforcement Action (Notice) to Hilcorp Alaska, LLC (Hilcorp) regarding the
Milne Point Unit well F-96 (MPU F-96). The Notice was based upon Hilcorp's performance of
well operations on MPU F-96 with failed gas detection equipment. The Notice proposed specific
corrective actions and a $50,000 civil penalty under AS 31.05.150(a).
Hilcorp requested an informal review. That review was held February 18, 2016.
Summary of Proposed Enforcement Action:
The Notice identified violations by Hilcorp of 20 AAC 25.066. Hilcorp reported a gas detection
system failure on Automated Services Rig 1 (ASRI) during workover operations. After
notifying AOGCC that it would cease well operations until a replacement gas detection system
was "in place and tested," Hilcorp continued well operations without AOGCC authorization, a
violation of 20 AAC 25.066. The Notice proposed Hilcorp provide AOGCC a detailed written
explanation that described how recurrence of the violations would be prevented. Civil penalties
were proposed under AS 31.05.150(a) as follows:
- $30,000 for the initial violation of failing to maintain an operational gas detection
system while pulling the tubing hanger off seat and attempting to lift the completion
string from MPU F-96.
- $20,000 for failing to obtain a waiver or variance approval for the gas detection
equipment required for MPU F-96 workover operations.
Other Order No. 111 •
September 30, 2016
Page 2 of 9
Gas Detection Equipment:
Minimum gas detection equipment requirements for workover rigs include the location of
sensing points for both lighter -than -air gas and heavier-than-air gas and a minimum sampling
interval. Other requirements include automatic, independent acting sensors tied to distinct visual
and audible alarms; and the ability to sense and alert when specific concentrations are detected.
A failure in a gas detection system must be reported to AOGCC within 24 hours after the failure.
The decision whether to authorize continued operations with a failed gas detection system, to
require the gas detection system be repaired or replaced, or to allow use of a different gas
detection system resides solely with AOGCC.
Informal Review:
On February 5, 2016 Hilcorp submitted a letter in advance of the informal review. Hilcorp's
letter provided a timeline of activities associated with the workover of MPU F-96, suggested that
it did not continue with "normal oil and gas" well operations after reporting the failure of the gas
detection system, argued that the AOGCC misinterpreted communications from Hilcorp, and
stated the imposition of two penalties was inconsistent with due process. On February 18, 2016
Hilcorp was provided an opportunity to present the information it claimed AOGCC should have
considered in its proposed enforcement action. During the informal review, Hilcorp claimed
AOGCC had misinterpreted Hilcorp's notification of the failure of the fire and gas systems,
argued against AOGCC's choice of language in the proposed enforcement and asserted AOGCC
was imposing separate penalties for one course of conduct, as well as punishing Hilcorp for
subsequent unresolved allegations.
Discussion:
Workover operations on MPU F-96, approved on May 21, 2015 (Sundry Approval 315-302),
authorized Hilcorp to replace a failed through -tubing electric submersible pump (ESP).
Operations reports indicate Hilcorp commenced the workover with the Hilcorp ASR1 rig on
August 4, 2015. After the initial rig up of equipment on location on August 4, 2015, the gas
detection system was tested by Hilcorp and reported to be in working operation. Later that day
at 1726 hours, a Hilcorp electrician found that the gas detection system was in fault. The gas
Other Order No. 111
September 30, 2016
Page 3 of 9
detection system fault was reported internally within Hilcorp. About 4 hours later, Hilcorp
reported the failure to AOGCC:
"We have just finished the testing @ 2100 hrs., all is Ok we have had a failure of our gas
monitoring system this afternoon, and have ordered replacement rental from Total safety.
We will not be pulling this completion until that system is in place and tested. Estimate
Thursday sometime the equipment cannot ship until morning."
At 2220 hours on August 4, 2015, Hilcorp submitted the BOPE test report form to the AOGCC
via email with the following comments:
"BOP test is complete, VBR rams repaired. New gas detector equipment ordered. Hope
for Thursday install. We will be doing rig maintenance until then"
The BOPE test report included the following note:
"Well operations suspended until gas system in place and tested."
Contrary to this representation, Hilcorp's internal emails show that less than two hours after
representing to AOGCC that all well operations had been suspended, Hilcorp engaged in well
operations. Specifically, Hilcorp removed the wellhead lock down pins from the tubing hanger
and pulled the tubing hanger off seat +/-4.5 feet before determining that the ASR1 rig did not
have the capacity to pull the completion from the well. The prohibition in 20 AAC 25.066
against well operations means what it says: well operations. Pulling the tubing hanger off seat is
a well operation.
The AOGCC has considered the factors in AS 31.05.150(g) in its determination of penalties for
the MPU F-96 violations. At the informal review Hilcorp demonstrated neither mitigating
factors nor that AOGCC missed information in reviewing the enforcement action.
The violations here are not isolated and further demonstrate Hilcorp's ongoing compliance
problems. Table 1 attached to this Decision lists numerous prior incidences of regulatory
violations by Hilcorp.This is not the first Hilcorp violation to result in a fine. For example, in
2013 AOGCC fined Hilcorp a total of $115,000 for violations relating to failure to test BOPE
Other Order No. 111
September 30, 2016
Page 4 of 9
after use for well control.' Violations continue to occur despite the fact that AOGCC staff have
met repeatedly with Hilcorp Alaska managers regarding AOGCC's ongoing concerns about
Hilcorp's regulatory compliance, including at least one unprecedented meeting with Hilcorp field
operations staff at Hilcorp's Kenai field office to emphasize AOGCC's concerns and elaborate
regarding the importance of regulatory compliance.2
Findings and Conclusions:
Hilcorp violated 20 AAC 25.066. While Hilcorp notified the AOGCC of the failure of the gas
detection system as required under 20 AAC 25.066 (c), compliance with the notification
requirement cannot mitigate the violations here. More problematically, the notification
represented Hilcorp had suspended well operations until the gas detection system was
operational. Less than two hours later, Hilcorp proceeded with well operations by lifting the
tubing hanger off seat. Doing so removed a barrier to wellbore flow, without the necessary gas
detection in place to ensure a safe operation. Although Hilcorp rig crews did use personal
LEL/H2S gas detection monitors when the tubing hanger was lifted off seat, this change in gas
detection was not known to nor approved by the AOGCC as required under 20 AAC 25.066 (d).
Hilcorp provided an incomplete and inaccurate assessment of its plan forward steps to the
AOGCC. The facts do not warrant a determination that Hilcorp acted in good faith regarding
regulatory compliance during the August 2015 workover of MPU F-96.
AOGCC acknowledges that Hilcorp gave prompt notice of the gas detection system failure.
However, compliance with one regulatory mandate does not mitigate another regulatory
violation. AOGCC agrees there was no harm to the public. However, Hilcorp continued to
perform well operations without AOGCC approval, and utilized personal gas detection monitors
without AOGCC approval. Hilcorp's history of non-compliance and the need to deter similar
behavior weigh strongly in setting the penalty amount.
1 AOGCC Other Order 80, "Failure to Notify of Changes to an Approved Permit; and Failure to Test Blowout
Prevention Equipment".
2 Meeting requested and arranged by Hilcorp management; held November 11, 2013.
Other Order No. 111
September 30, 2016
Page 5 of 9
Now Therefore It Is Ordered That:
A civil penalty in the amount of $30,000 is imposed for the initial event of failing to maintain an
operational gas detection system while pulling the tubing hanger off seat and attempting to lift
the completion string from MPU F-96 without having obtained a waiver, variance or approval
for the gas detection equipment requirements of 20 AAC 25.066 In addition, Hilcorp is
instructed to provide AOGCC with a detailed explanation of how recurrence of this violation will
be prevented in the future. Included in the corrective actions must be how Hilcorp has acted or
will act to ensure accurate information is provided to AOGCC for decisions.
As an Operator involved in an enforcement action, you are required to preserve documents
concerning the above action until after resolution of the proceeding.
Done at Anchorage, Alaska and dated September 30, 2016.
Cathyp.- Foerster
Chair, Commissioner
Attachment
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.
Table 1— Hilcorp Noncompliance History
Date
Non -Compliance
Location
AOGCC
Comments
Action
April 2012
Missing SVS tests; Failure
Westside CI
No action taken
Numerous efforts by AOGCC to obtain SVS test
to notify AOGCC for test
results for IRU, PCU, LRU, Stump Lake; some
witness
missing SVS tests between 5/2011 and 2/2012; some
failure to notify AOGCC for opportunity to witness
(previous operator responsible for some tests)
5/8/2012
Missing Kill Line Valve
Swanson River 21-22
NOV
BOPE test; Inspector observed missing kill line valve
(Aurora Rig 1)
at inlet to stack (1 installed; 2 required)
9/17/2012
Choke Manifold Valves
Swanson River 21-25
Corrective
Rig crew performing choke manifold test greased and
cheated closed during
(Aurora Rig 1)
actions
had to cheat choke manifold valves closed to pass
BOPE test
pressure test
10/2/2012
Notice of Meter
Happy Valley
Corrective
AOGCC has not received notice of meter calibration
Calibrations
actions
for Happy Valley custody transfer meter for at least as
long as Hilcorp has been responsible for the meter;
schedule provided 10/9/12
10/18/2012
Incorrect BOPE Test
Soldotna Ck 44-33
See 10/23/12
When finally tested BOPE after use (10/18/12), tested
Pressure
(Doyon Rig 1)
enforcement
to wrong pressure (4000psi instead of 5000psi)
Failure to notify of changes
Civil Penalty;
Hilcorp failed to follow well drilling procedures
Soldotna Ck 44-33
10/23/2012
to approved permit
Corrective
approved in PTD by AOGCC; failed to notify
(Doyon Rig 1)
Actions (Other
AOGCC of changes to well plan; failed to maintain
3 NOV — Notice of Violation; no financial penalty; corrective actions only
•
�-1
Other Order No. 111
September 30, 2016
Page 7 of 9
Date
Non -Compliance
Location
AOGCC
Comments
Action
Order 80)
well in overbalanced condition; lack mgt of change
Well control; Failure to test
Hilcorp failed to test BOPE used in well control
BOPE after use
operations prior to first wellbore entry following use;
penalties totaling $115,000 imposed
10/26/2012
Failure to Test BOPE
Granite Pt 32-13RD
Denied request
Test due 10/26/12, started running completion
within 7 days
(crane workover)
for delaying
1500hrs on 10/26 without making any attempt to get
BOPE test
test extension (working daylight hours only); landed
pipe high, had to trip pipe; request extension 10/27/12
10/31/2012
Improper gauge on IA
Trading Bay Unit D-
none
Hilcorp self-reported that gauge was pegged out;
45
2000psi alarm set, 1000psi gauge; well SI by Hilcorp
11/29/2012
Missing well control
Happy Valley B-16
NOV
Missing top drive valve(s) on 10/10/12 and again
equipment
(Aurora Rig 1)
11/18/12; reviewing Hilcorp response rec'd 12/11/12
11/29/2012
Incorrect BOPE test
Granite Point #50
NOV
Sundry 312-439 required BOPE rams, valves to test to
pressure
(Schlumberger CT 2)
4500psi; Hilcorp tested to 3500psi
12/6/2012
Conduct of operations
Trading Bay Unit G-
NOV
Violation found 11/7/12 as part of rig inspection/ and
32 (Williams Rig 404)
BOPE test witness; hazardous conditions; wellbore
fluids on deck; equipment placement; lack of
winterization; reviewing Hilcorp response rec'd
12/21/12
12/16/2012
Winterization; Conduct of
Trading Bay Unit G-
Ordered ops
Inspector arrived 12/15/12 for BOPE test; unable to
Operations
32 (Williams Rig 404)
shut down on
test due to fluids covering stack well cellar (similar to
C,
Other Order No. 111
September 30, 2016
Page 8 of 9
Date
Non -Compliance
Location
AOGCC
Comments
Action
Rig 404 until
issued noted in 12/6/12 NOV); returned 12/16/12 to
corrective
test BOPE — unable to test BOPE (frozen choke
actions
manifold, top drive valves, floor safety valves, choke
implemented
and kill lines along with everything else not in heated
enclosure. Rig ops allowed to restart 12/31/12 after
corrective actions, inspection and passing BOPE test
12/16/2012
Commence production w/o
Nikolaevsk Unit (Red
Corrective
12/18/12 — Hilcorp contacts AOGCC with notice of
approved LACT meter
pad)
actions
SVS testing; AOGCC determined by questioning
status that well commenced production 12/16/12;
application for LACT meter rec'd 1/9/12
4/11/2013
Defeated SVS
Sterling 43-09X
NOV
SVS found defeated 3/15/13 during AOGCC
inspection; well was SI without testing
9/30/2013
Defeated SVS
Swanson River Field
NOV
SVS found defeated 9/2/13 during AOGCC
KGSF #1
inspection; needle valve on actuator blocked
1/14/2014
Defeated SVS
Swanson River Field
NOV
SVS on 3 rod pump wells found defeated during
Missing Annulus Gauges
SCU 12A-04; SCU
12/9/13 AOGCC inspection; found SCU 24A-09 w/o
24A-09; SCU 41A-08
the req'd pressure gauge to monitor outer annulus
4/22/2014
Defeated SVS
Ninilchik Unit SD -3;
Corrective
SSSV found by AOGCC Inspectors 4/15/14 and
Ninilchik Unit FC -5
actions
4/16/14; Hilcorp reported on 4/21/14; Inspector
required SSSV back in service before departing
8/29/2014
Failure to Test BOPE
Trading Bay Unit G-
NOV
Rig exceeded allowed Mays between BOPE tests
•
Other Order No. 111
September 30, 2016
Page 9 of 9
Date
Non -Compliance
Location
AOGCC
Comments
Action
11 (Moncla Rig 301)
without AOGCC approval
10/31/2014
Failure to Test Required
Ninilchik Unit Paxton
Corrective
No enforcement; reported by Hilcorp; approved
Well Control Equipment
7 & Paxton 8
actions
sundry required testing despite wells being isolated
from the formation
1/5/2015
Workover Safety Concerns
Hilcorp Cook Inlet
Meeting 1/9/15;
List of concerns provided to Hilcorp addressing
and Kenai Peninsula
Corrective
suitability of equipment and procedures; unsafe
Rig Workovers
actions
working conditions associated with rig workovers;
onshore and offshore Cook Inlet
1/7/2015
Casing Valves Inaccessible
Ninilchik Unit Paxton
Meeting 1/9/15;
Frozen well cellar found by Inspector 1/7/15; operator
8
Corrective
instructed to thaw cellar; no action taken per Hilcorp
actions
(1/9/15 mtg - "operator unclear about req'd action");
AOGCC Deficiency Report created to track corrective
actions identified during inspections
2/4/2015
Defeated SVS
Northstar Unit NS -15
NOV
SSV found defeated during 1/23/15 AOGCC
inspection
4/22/2015
Failure to Obtain Approval
Kenai Gas Field KDU
NOV
Operating without required competent tubing and
for Continued Production
1
packer; no AOGCC approval (20 AAC 25.200);
discovered as part of well review; well shut in
:7
•
Colombie, Jody J (DOA)
From: Colombie, Jody J (DOA)
Sent: Friday, September 30, 2016 2:50 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 1 (DOA);
Cook, Guy D (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster,
Catherine P (DOA); French, Hollis (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); AK, GWO Projects Well Integrity;
AKDCWeIIIntegrityCoordinator; Alan Bailey; Alex Demarban; Alexander Bridge; Allen
Huckabay; Andrew VanderJack; Ann Danielson; Anna Raff; Barbara F Fullmer; bbritch;
bbohrer@ap.org; Bill Bredar; Bob Shavelson; Brian Havelock; Bruce Webb; Caleb Conrad;
Candi English; Cocklan-Vendl, Mary E; Colleen Miller; Crandall, Krissell; D Lawrence; Dale
Hoffman; Dave Harbour; David Boelens; David Duffy; David House; David McCaleb;
David Tetta; ddonkel@cfl.rr.com; DNROG Units (DNR sponsored); Donna Ambruz, Ed
Jones; Elizabeth Harball; Elowe, Kristin; Evan Osborne; Evans, John R (LDZX); Gary
Oskolkosf, George Pollock, Gordon Pospisil; Greeley, Destin M (DOR); Gregg Nady;
Gretchen Stoddard; 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; Burdick, John D (DNR); Easton, John R (DNR);
Jon Goltz; Juanita Lovett; Judy Stanek; Julie Little; Kari Moriarty; Kasper Kowalewski;
Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Kruse, Rebecca D (DNR);
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); Mealear Tauch; Michael Bill; Michael
Calkins; Michael Moora; MJ Loveland; mkm7200; Munisteri, Islin W M (DNR);
knelson@petroleumnews.com; Nichole Saunders; Nikki Martin; NSK Problem Well Supv;
Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR);
Randall Kanady; Delbridge, Rena E (LAS); 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); Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver
R; Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Ted
Kramer, Davidson, Temple (DNR); Teresa Imm; Thor Cutler; Tim Jones; Tim Mayers; Todd
Durkee; trmjrl; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Weston
Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis;
Assmann, Aaron A; Bajsarowicz, Caroline J; Brian Gross; Bruce Williams; Bruno, Jeff J
(DNR); Casey Sullivan; Catie Quinn; Don Shaw; Eric Lidji; Garrett Haag; Smith, Graham O
(DNR); Dickenson, Hak K (DNR); Heusser, Heather A (DNR); Holly Pearen; Jamie M. Long;
Jason Bergerson; Jim Magill; Joe Longo; John Martineck; Josh Kindred; 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); Umekwe, Maduabuchi
P (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); Wayne Wooster, William Van
Dyke
Subject: Other Order No. 111 (Decision and Order - Hilcorp)
Attachments: other311.pdf •
Please see attached.
Re: Rig Operations with Failed Gas Detection System) Other Order No. 111
Milne Point Unit F-96 ) Docket No. OTH-15-024
PTD 2081860 ) September 30, 2016
Jodi/j. Col0mbie
AOCGCC Sjecial .Assistant
.Alaska Oit ancbC as Conservation Commission
333 West 7"' AvertUe
Anchorme, A(a.ska 99501
Office: (907) 793-1221
fax: (9)071 276-7542
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.cLov.
Jack Hakkila Bernie Karl
P.O. Box 190083 K&K Recycling Inc.
Anchorage, AK 99519 P.O. Box 58055
Fairbanks, AK 99711
Penny Vadla George Vaught, Jr.
399 W. Riverview Ave. P.O. Box 13557
Soldotna, AK 99669-7714 Denver, CO 80201-3557
David Wilkins
Richard Wagner Senior Vice President
P.O. Box 60868 Hilcorp Alaska, LLC
Fairbanks, AK 99706 3800 Centerpoint Dr., Ste. 1400
Anchorage, AK 99503
Gordon Severson
3201 Westmar Cir.
Anchorage, AK 99508-4336
Darwin Waldsmith
P.O. Box 39309
Ninilchik, AK 99639
H
Hilcorp Alaska LLC
P.O. Box 61529
HOUSTON TX 77208-1529
•
PAY Thirty Thousand Dollars and Zero Cents
TO STATE OF ALASKA
THE AOGCC
ORDER 333 WEST 7TH AVE
ANCHORAGE AK 99501-3539
OF
0
AMEGY BANK
Void After 90 Days
Check No
Check Date
I Check Amount
0082044466
10/11/20161------$30,000.00
Authorized Signature
110008 2044466,1' 1: L L 3 L L0 5B91: 04L,411,0774B11"
'PLEASE DETACH AT PERFORATION ABOVE" "PLEASE DETACH AT PERFORATION ABOVE^
Hilcorg Alaska LLC
P. . Box 61529
HOUSTON TX 77208-1529
Check Number .0082044466
- _ Description
100616 10/06/2016 DOCKET OTH-15-024 ORDER 11 30,000.00 0.00 30,000.00
OCT 11. 2010
1083380 Owner Check Date: 10/11/2016 Check Amount 30,000.00 J
INDEXES
n
Hilcorp Alaska, LLC
October 13, 2016
Cathy Foerster
Chair, Commissioner
Alaska Oil and Gas Conservation
333 West 7`h Avenue, Suite 100
Anchorage, AK 99501-3572
OCT 13 2016
AOGCC
David Wilkins
Senior Vice President
Post Office Box 244027
Anchorage, AK 99524-4027
3800 Centerpoint Drive
Suite 1400
Anchorage, AK 99503
Phone: 907/777-8397
Fax: 907/777-8580
dwilkins@hilcorp.com
Re: AOGCC Docket No. OTH-15-024
DECISION AND ORDER dated September 30, 2016, Other Order No. 111
Rig Operations with Failed Gas Detection System, Milne Point Unit, PTD 2081860
Dear Chair Foerster,
As the conclusion of the above captioned Decision and Order, the Commission directed as follows:
A civil penalty in the amount of $30,000 is imposed for the initial event of failing to
maintain an operational gas detection system while pulling the tubing hanger off seat and
attempting to lift the completion string from MPU F-96 without having obtained a waiver,
variance or approval for the gas detection equipment requirements of 20 AAC 25.066. In
addition, Hilcorp is instructed to provide AOGCC with a detailed explanation of how
recurrence of this violation will be prevented in the future. Included in the corrective
actions must be how Hilcorp has acted or will act to ensure accurate information is provided
to AOGCC for decisions.
As required by 20 AAC 25.066 and per the ASR1 BOPE test procedure, Hilcorp Alaska or its
contract drilling personnel will test the rig gas system as part of the BOPE test. The results will
be documented on the "ASR Rig 1 BOPE Test "11" or "13" 5K Stack Log."
If the gas detection system fails during the test or at any time during operation of the rig, Hilcorp
Alaska will cease well operations and provide notice to AOGCC within 24 hours per 20 AAC
25.066(c). The notice will include all relevant information and circumstances.
Cathy Foerster • •
October 13 2016
Page 2 of 2
Hilcorp Alaska will not recommence well operations until (1) the gas detection is operational, or
(2) AOGCC grants approval to continue operations with alternate gas detection controls. Before
recommencing well operations, Hilcorp Alaska will provide notice to the AOGCC.
The Operations Managers or Operations Engineers shall ensure that timely and sufficient
information is provided to AOGCC regarding incidents or circumstances that require AOGCC
notification or action.
Hilcorp will communicate these requirements to all Hilcorp and contract rig personnel.
Our check for $30,000 was hand delivered to the AOGCC by Larry Greenstein on October 12,
2016.
Sincerely,
David Wilkins
Senior Vice President
cc: Jim Regg
Bo York
Justin Furnace
John Barnes
Larry Greenstein
STATE OF ALASKA
ALASKA OIL AND GAS CONSERVATION COMMISSION
333 West Seventh Avenue
Anchorage, Alaska 99501
Re: Rig Operations with Failed Gas Detection System) Other Order No. 111
Milne Point Unit F-96 ) Docket No. OTH-15-024
PTD 2081860 ) September 30, 2016
DECISION AND ORDER
On November 25, 2015 the Alaska Oil and Gas Conservation Commission (AOGCC) issued a
Notice of Proposed Enforcement Action (Notice) to Hilcorp Alaska, LLC (Hilcorp) regarding the
Milne Point Unit well F-96 (MPU F-96). The Notice was based upon Hilcorp's performance of
well operations on MPU F-96 with failed gas detection equipment. The Notice proposed specific
corrective actions and a $50,000 civil penalty under AS 31.05.150(a).
Hilcorp requested an informal review. That review was held February 18, 2016.
Summary of Proposed Enforcement Action:
The Notice identified violations by Hilcorp of 20 AAC 25.066. Hilcorp reported a gas detection
system failure on Automated Services Rig 1 (ASRl) during workover operations. After
notifying AOGCC that it would cease well operations until a replacement gas detection system
was "in place and tested," Hilcorp continued well operations without AOGCC authorization, a
violation of 20 AAC 25.066. The Notice proposed Hilcorp provide AOGCC a detailed written
explanation that described how recurrence of the violations would be prevented. Civil penalties
were proposed under AS 31.05.150(a) as follows:
- $30,000 for the initial violation of failing to maintain an operational gas detection
system while pulling the tubing hanger off seat and attempting to lift the completion
string from MPU F-96.
- $20,000 for failing to obtain a waiver or variance approval for the gas detection
equipment required for MPU F-96 workover operations.
Other Order No. 111
September 30, 2016
Page 2 of 9
Gas Detection Equipment:
Minimum gas detection equipment requirements for workover rigs include the location of
sensing points for both lighter -than -air gas and heavier-than-air gas and a minimum sampling
interval. Other requirements include automatic, independent acting sensors tied to distinct visual
and audible alarms; and the ability to sense and alert when specific concentrations are detected.
A failure in a gas detection system must be reported to AOGCC within 24 hours after the failure.
The decision whether to authorize continued operations with a failed gas detection system, to
require the gas detection system be repaired or replaced, or to allow use of a different gas
detection system resides solely with AOGCC.
Informal Review:
On February 5, 2016 Hilcorp submitted a letter in advance of the informal review. Hilcorp's
letter provided a timeline of activities associated with the workover of MPU F-96, suggested that
it did not continue with "normal oil and gas" well operations after reporting the failure of the gas
detection system, argued that the AOGCC misinterpreted communications from Hilcorp, and
stated the imposition of two penalties was inconsistent with due process. On February 18, 2016
Hilcorp was provided an opportunity to present the information it claimed AOGCC should have
considered in its proposed enforcement action. During the informal review, Hilcorp claimed
AOGCC had misinterpreted Hilcorp's notification of the failure of the fire and gas systems,
argued against AOGCC's choice of language in the proposed enforcement and asserted AOGCC
was imposing separate penalties for one course of conduct, as well as punishing Hilcorp for
subsequent unresolved allegations.
Disc_
Workover operations on MPU F-96, approved on May 21, 2015 (Sundry Approval 315-302),
authorized Hilcorp to replace a failed through -tubing electric submersible pump (ESP).
Operations reports indicate Hilcorp commenced the workover with the Hilcorp ASR1 rig on
August 4, 2015. After the initial rig up of equipment on location on August 4, 2015, the gas
detection system was tested by Hilcorp and reported to be in working operation. Later that day
at 1726 hours, a Hilcorp electrician found that the gas detection system was in fault. The gas
Other Order No. 111
September 30, 2016
Page 3 of 9
detection system fault was reported internally within Hilcorp. About 4 hours later, Hilcorp
reported the failure to AOGCC:
"We have just finished the testing @ 2100 hrs., all is Ok we have had a failure of our gas
monitoring system this afternoon, and have ordered replacement rental from Total safety.
We will not be pulling this completion until that system is in place and tested. Estimate
Thursday sometime the equipment cannot ship until morning."
At 2220 hours on August 4, 2015, Hilcorp submitted the BOPE test report form to the AOGCC
via email with the following comments:
"BOP test is complete, VBR rams repaired. New gas detector equipment ordered. Hope
for Thursday install. We will be doing rig maintenance until then"
The BOPE test report included the following note:
"Well operations suspended until gas system in place and tested."
Contrary to this representation, Hilcorp's internal emails show that less than two hours after
representing to AOGCC that all well operations had been suspended, Hilcorp engaged in well
operations. Specifically, Hilcorp removed the wellhead lock down pins from the tubing hanger
and pulled the tubing hanger off seat +/-4.5 feet before determining that the ASR1 rig did not
have the capacity to pull the completion from the well. The prohibition in 20 AAC 25.066
against well operations means what it says: well operations. Pulling the tubing hanger off seat is
a well operation.
The AOGCC has considered the factors in AS 31.05.150(g) in its determination of penalties for
the MPU F-96 violations. At the informal review Hilcorp demonstrated neither mitigating
factors nor that AOGCC missed information in reviewing the enforcement action.
The violations here are not isolated and further demonstrate Hilcorp's ongoing compliance
problems. Table 1 attached to this Decision lists numerous prior incidences of regulatory
violations by Hilcorp.This is not the first Hilcorp violation to result in a fine. For example, in
2013 AOGCC fined Hilcorp a total of $115,000 for violations relating to failure to test BOPE
Other Order No. 111 •
September 30, 2016
Page 4 of 9
after use for well control.' Violations continue to occur despite the fact that AOGCC staff have
met repeatedly with Hilcorp Alaska managers regarding AOGCC's ongoing concerns about
Hilcorp's regulatory compliance, including at least one unprecedented meeting with Hilcorp field
operations staff at Hilcorp's Kenai field office to emphasize AOGCC's concerns and elaborate
regarding the importance of regulatory compliance.2
Findines and Conclusions:
Hilcorp violated 20 AAC 25.066. While Hilcorp notified the AOGCC of the failure of the gas
detection system as required under 20 AAC 25.066 (c), compliance with the notification
requirement cannot mitigate the violations here. More problematically, the notification
represented Hilcorp had suspended well operations until the gas detection system was
operational. Less than two hours later, Hilcorp proceeded with well operations by lifting the
tubing hanger off seat. Doing so removed a barrier to wellbore flow, without the necessary gas
detection in place to ensure a safe operation. Although Hilcorp rig crews did use personal
LEL/H2S gas detection monitors when the tubing hanger was lifted off seat, this change in gas
detection was not known to nor approved by the AOGCC as required under 20 AAC 25.066 (d).
Hilcorp provided an incomplete and inaccurate assessment of its plan forward steps to the
AOGCC. The facts do not warrant a determination that Hilcorp acted in good faith regarding
regulatory compliance during the August 2015 workover of MPU F-96.
AOGCC acknowledges that Hilcorp gave prompt notice of the gas detection system failure.
However, compliance with one regulatory mandate does not mitigate another regulatory
violation. AOGCC agrees there was no harm to the public. However, Hilcorp continued to
perform well operations without AOGCC approval, and utilized personal gas detection monitors
without AOGCC approval. Hilcorp's history of non-compliance and the need to deter similar
behavior weigh strongly in setting the penalty amount.
' AOGCC Other Order 80, "Failure to Notify of Changes to an Approved Permit; and Failure to Test Blowout
Prevention Equipment".
2 Meeting requested and arranged by Hilcorp management; held November 11, 2013.
Other Order No. 111 •
September 30, 2016
Page 5 of 9
Now Therefore It Is Ordered That:
A civil penalty in the amount of $30,000 is imposed for the initial event of failing to maintain an
operational gas detection system while pulling the tubing hanger off seat and attempting to lift
the completion string from MPU F-96 without having obtained a waiver, variance or approval
for the gas detection equipment requirements of 20 AAC 25.066 In addition, Hilcorp is
instructed to provide AOGCC with a detailed explanation of how recurrence of this violation will
be prevented in the future. Included in the corrective actions must be how Hilcorp has acted or
will act to ensure accurate information is provided to AOGCC for decisions.
As an Operator involved in an enforcement action, you are required to preserve documents
concerning the above action until after resolution of the proceeding.
Done at Anchorage, Alaska and dated September 30, 2016.
//signature on file//
Cathy P. Foerster
Chair, Commissioner
Attachment
//signature on file//
Daniel T. Seamount, Jr.
Commissioner
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.
Carlisle, Samantha J (DOA)
From: Bo York <byork@hilcorp.com>
Sent: Friday, February 19, 2016 11:11 AM
To: Schwartz, Guy L (DOA); Regg, James B (DOA); Carlisle, Samantha J (DOA); Quick, Michael
J (DOA)
Cc: David Wilkins; Justin Furnace
Subject: Hilcorp Response to AOGCC Questions During 18 Feb 2016 Informal Review:
OTH-15-024, -025, -029, -030, and -031
Attachments: 2015 iNet Brochure-EN.PDF; Aug -Sep Cali brations.pdf
Guy, Jim, Mike, and Samantha -
Below are answers to questions you posed during the informal review yesterday. Let me know if there are other
questions you asked that I did not capture and answer below.
Q: Were any gauges installed on the valves on the well head for J -08A?
A: Hilcorp's previously submitted drawings depict a valve on the IA and OA. A pressure gauge was on the OA valve
monitoring pressure between the surface casing and production casing. The valve on the IA was removed for the RWO
activitites.
It is correctly shown in the drawings submitted on 23 Oct (shown below).
i
1c naa
0
nn
Y L
iEt UP ON 25 SEPT 2015 ON J 08�
N2 PUMPING OPERATIONS
REM
MPU GEN PROCESS
P3PiNG k +NSTRUMENT DIAGRAM
ASR -1 RtG
— ♦YR NbNY funMi VYIY _.__.._ fv 141
xia1.«TIlIlk I(i. PI-MOG-�CUxx 06 061
Exhibit 15 correctly shows the IA "casing valve" with no gauge but does not depict the OA valve and gauge.
•
Standpipe 1
so
ATR WO
MUD PUMP
KOK Panic Line Uz
iNF
K.11 Une _0_0 J_ HCR Choke Une
C•u^L Valle
Q: When was N2 procedure developed?
A: The Hilcorp N2 procedure was initially developed on 23 March 2015 for the 1-15 well.
Q: Is the stripping head on the top of the ASR BOP tested as part of the BOP procedure?
A: No, it is not tested as it is not part of the BOP well control system.
Q: Was the work string (pipe) being moved during the N2 cleanout on J -08A?
A: No, the work string was static and was not moved during the pumping of the N2 cleanout jobs.
Q: What clean out depths were achieved with the N2 jobs?
A: We washed down as deep as our open-ended mule shoe would allow and then held static while the N2 was pumped.
Depths varied on all jobs.
Q: Was annular BOP or stripping head used for the J -08A N2 pumping?
A: Annular BOP.
Q: Provide calibration of portable hand held gas detector utilized on ASR for J -08A and F-96.
A: All portable gas detectors at Milne are Ventis MX -4 portable detectors. Hilcorp has a contract with Industrial
Scientific "I -net" where the detectors are automatically calibrated every month via a docking/charging station. If an
individual device is not docked over 7 days or is not calibrated in the course of the month, an alert is trigger. Milne did
not receive any alerts in 2015. Note that one detector failed the calibration on 1 Aug but was recalibrated and passed
same day. Gas detectors are portable and interchangeable within the field and we do not keep a record of which one is
used in specific locations on any given day. Therefore, I can't state which device was utilized on J -08A or F-96. However,
attached are the calibrations of all devices in the field over the month of Aug and Sept showing that all received a
calibration within that month. We have 14-20 in the field on any given day (number fluctuates as we have some
returned for maint to Industrial Scientific). Also attached is the iNet brochure detailing the detector program.
Bo York
Operations Manager, Milne Point
bvork@Hilcorp.com
907.777.8345
907.727.9247 cell
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12024J7-016
MX4
Instrument
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Calibration
9/16/2015 13:28
Passed
11052EF-001
237'Hilcorp Alaska LLC Milne Point
12050YF-001
MX4
Instrument _
Scheduled
Calibration
9/15/2015 9:56
Passed
11052EF-001
2181 Hilcorp Alaska LLC Milne Point
13034136-010
MX4
Instrument
Scheduled
Calibration
9/12/2015 17:50
Passed
11052EF-001
251 Hilcorp Alaska LLC Milne Point
13044C5-001
MX4
Instrument
Unscheduled
Calibration
9/6/2015 7:34
Passed
11052EF-001
238 Hilcorp Alaska LLC Milne Point
13032QH-026
MX4
Instrument
Scheduled
Calibration
9/5/2015 13:41
Passed
11052EF-001
231 [ Hilcorp Alaska LLC Milne Point
12052P7-002
MX4
Instrument
Unscheduled
Calibration
9/5/2015 7:07
Passed
11052EF-001
237 Hilcorp Alaska LLC Milne Point E
13015PA-078
MX4
Instrument
Scheduled
Calibration
9/4/2015 8:45
Passed
11052EF-001
248 Hilcorp Alaska LLC Milne Point
150121Q-011
MX4
Instrument _
Scheduled
Calibration
19/3/2015 8:01
Passed
11052EF-001
240 Hilcorp Alaska LLC Milne Point g
14021NZ-005
MX4
Instrument
Scheduled
Calibration
9/1/2015 23:06
Passed
11052EF-001
258 Hilcorp Alaska LLC Milne Point
120741S-015
MX4
_ Instrument
Scheduled
Calibration
9/1/2015 0:07
Passed
11052EF-001
368 Hilcorp Alaska LLC Milne Point
13032QH-026
MX4
Instrument
Scheduled
Calibration
8/23/2015 12:20
Passed
11052EF-001
249 HilcorpAlaska LLC Milne Point
150121Q-011
MX4
Instrument
Scheduled
Calibration
8/4/2015 11:35
Passed
11052EF-001
240+1 Hilcorp Alaska LLC Milne Point
11041Z1-005
MX4
Instrument
Scheduled
Calibration
8/2/2015 9:02
_ Passed
_
11052EF-001
267 Hilcorp Alaska LLC Milne Point
13034136-010
MX4
Instrument
Forced
Calibration
8/1/2015 14:26
Passed11052EF-001
271 Hilcorp Alaska LLC Milne Point
13034D6-010
MX4
Instrument
Scheduled
Calibration
8/1/2015 7:22
Failed
11052EF-001
1080 Hilcorp Alaska LLC Milne Point
120741S-015
MX4
Instrument
Scheduled
Calibration
9/30/2015 23:04
Passed
11083SW-012
f 251 Hilcorp Alaska LLC Milne Point
150121Q-011
MX4
Instrument
Scheduled
Calibration
19/4/2015 7:04
Passed
11083SW-012
242 Hilcorp Alaska LLC Milne Point
1211324-001
MX4
Instrument
Scheduled
Calibration
19/3/2015 7:27
Passed
11083SW-012
269 Hilcorp Alaska LLC Milne Point
13044C5-001
MX4
Instrument
Scheduled
Calibration
9/1/2015 23:08
Passed
11083SW-012
262 Hilcorp Alaska LLC Milne Point
14021NZ-005
MX4
Instrument
Scheduled
-
Calibration
8/31/2015 23:02
Passed
11083SW-012
�
274 Hilcorp Alaska LLC Milne Point
13044C5-001
MX4
ent
Instrument
Scheduled
Calibration
8/2/2015 6:57
Passed
11083SW-012
244 Hilcorp Alaska LLC Milne Point
12113OM-071
MX4
Instrument
Scheduled
Calibration
8/2/2015 0:36
Passed
11083SW-012
261 Hilcorp Alaska LLC Milne Point
130444T-012
MX4
Instrument
Scheduled
Calibration
18/1/2015 23:10
Passed
11083SW-012
238 Hilcorp Alaska LLC Milne Point
13031132-003
MX4
Instrument
Scheduled
Calibration
`8/1/2015 12:18
Passed
11083SW-012
220 Hilcorp Alaska LLC Milne Point
12112QU-026
gMX4
Instrument
Scheduled
Calibration
9/1/2015 23:08
Passed
11094KP-004
249 Hilcorp Alaska LLC Milne Point
130444T-012
MX4
Instrument
Scheduled
Calibration
9/1/2015 6:26
Passed
11094KP-004
235 Hilcorp Alaska LLC Milne Point
12112QU-026
MX4
Instrument
Scheduled led
Calibration
8/3/2015 23:06
Passed
11094KP-004
229 Hilcorp Alaska LLC Milne Point
13015PA-078
MX4
Instrument _
Scheduled
Calibration
8/1/2015 23:11
Passed
11094KP-004
249 Hilcorp Alaska LLC Milne Point
12113OM-071
MX4
Instrument
Scheduled
Calibration
9/6/2015 23:03
Passed
11094KP-005_
266 Hilcorp Alaska LLC Milne Point
13070XB-035
MX4
Instrument
Unscheduled
Calibration
9/4/2015 23:06
Passed
11094KP-0_05
248 Hilcorp Alaska LLC Milne Point
13070XB-035
MX4
Instrument
Scheduled
Calibration
9/1/2015 23:09
Passed
11094KP-005
279 Hilcorp Alaska LLC Milne Point
13031132-003
MX4
Instrument
Scheduled
Calibration
1 9/1/2015 6:25
Passed
11094KP-005
229 Hilcorp Alaska LLC Milne Point
a
1211324-001
MX4
Instrument
Scheduled
Calibration®
8/4/2015 6:26
Passed
11094KP-005
276 Hilcorp Alaska LLC Milne Point
13070XB-035
MX4
Instrument
Scheduled Calibration 18/1/201523:10
Passed
11094KP-005
_
257HilcorpAlaska LLC Milne Point
C
9
13070XB-035 MX4 'Instrument Scheduled m ®Calibration 9/30/2015 23:04 Passed 11115EZ-003 215 Hilcorp Alaska LLC Milne Point
12113OM-071 MX4 Instrument Scheduled Calibration 8/31/2015 23:02 Passed 11115EZ-003 2681 Hilcorp Alaska LLC Milne Point
12112QU-026 MX4 Instrument Scheduled Calibration 9/30/2015 23:04 _ Passed 131003C-010 2321 Hilcorp Alaska LLC Milne Point
11083VW-052 MX4 Instrument Unscheduled Calibration 9/6/2015 8:09 Passed 131003C-010 3181 Hilcorp Alaska LLC Milne Point
1207415-015 MX4 Instrument Unscheduled Calibration 8/28/2015 6:41 Passed 131003C-010 2461 Hilcorp Alaska LLC Milne Point
11041Z1-005 jinstrument _ Scheduled Calibration =8/5/2015 7:49 Passed 131003C-010 224 Hilcorp Alaska LLC Milne Point
12050YF-001 CMX4 Instrument Scheduled Calibration 8/2/2015 7:41 Passed 131003C-010 224i Hilcorp Alaska LLC Milne Point
® _ .
Z-005 MX4 Instrument Scheduled Calibration 8/1/2015 14:27 Passed 131003C-010 213 Hilcorp Alaska LLC Milne Point
14-02 1 N
12052P7-002 MX4 flInstrument Manual Calibration 9/13/2015 13:59 Passed Instrument 17 Hilcorp Alaska LLC Milne Point
13044C5-001 MX4 Instrument Manual Calibration 9/11/2015 9:36 Passed Instrument 18 Hilcorp Alaska LLC Milne Point
13044C5-001 MX4 Instrument Manual Calibration 9/10/2015 8:51 Passed Instrument 171 Hilcorp Alaska LLC Milne Point
12024J7-016 _ MX4 Instrument Manual Calibration 9/8/2015 8:21 Passed Instrument 181�AlaskaC Milne Point
1211324-001 MX4 lInstrument Manual Calibration 9/5/2015 10:29 Passed Instrument 17 HilcC Milne Point
14021NZ-005 CMX4 Instrument Manual Calibration 9/5/2015 6:19Passed Instrument 17�Hilcorp Alaska LLC Milne Point
1211324-001 MX4 Instrument _ aManual Calibration 9/4/2015 8:20 Passed Instrument 17 Hilcorp Alaska LLC Milne Point
13044C5-001 MX4 Instrument IManual Calibration 9/4/2015 8:18 Passed Instrument 16! Hilcorp Alaska LLC Milne Point
150121Q-011 MX4 Instrument IManual Calibration 9/3/2015 11:58 Passed Instrument 17 Hilcorp Alaska LLC Milne Point C
150121Q-011 MX4 Instrument Manual Calibration 9/3/2015 11:51 Passed Instrument 16 Hilcorp Alaska LLC Milne Point
150121Q-011 MX4 Instrument Manual _ Calibration 9/3/2015 11:31 Passed Instrument 17 Hilcorp Alaska LLC Milne Point
14021NZ-005 MX4 Instrument Manual Calibration ,9/3/2015 3:26 Passed_ Instrument 16 Hilcorp Alaska LLC Milne Point
14021NZ-005 MX4 Instrument Manual Calibration9/3/i 2015 3:26 EPassed Instrument 17 Hilcorp Alaska LLC Milne Point
13031D2-003 MX4 Instrument Manual_ Calibration_ 9/3/2015 3:09 Passed Instrument 17! Hilcorp Alaska LLC Milne Point
13031D2-003 MX4 Instrument Manual Calibration 9 /2015 2:54 Passed Instrument 16 Hilcorp Alaska LLC Milne Point
12052P7-002 MX4 Instrument Manual Calibration 8/31/2015 13:41 Passed Instrument 18i Hilcorp Alaska LLC Milne Point
12052P7-002 MX4 Instrument Manual Calibration 8/31/2015 13:39 Passed Instrument 17HilcorpAlaska LLC Milne Point
13031D2-003 MX4 aInstrument Manual Calibration 8/25/2015 3:45 Passed Instrument 166 Hilcorp Alaska LLC Milne Point
13031D2-003 MX4 Instrument Manual Calibration 8/23/2015 9:44 Passed Instrument 16 Hilcorp Alaska LLC Milne Point
14021NZ-005 MX4 Instrument Manual _ Calibration 38/21/2015 5:28 Passed Instrument 17 Hilcorp Alaska LLC Milne Point
150121Q-011 MX4 Instrument Manual Calibration 8/17/2015 9:27 Passed Instrument 16 Hilcorp Alaska LLC Milne Point
14021NZ-005 MX4 Instrument Manual Calibration 8/11/2015 5:29 Passed Instrument 17 Hilcorp Alaska LLC Milne Point
150121Q-011 MX4 Instrument Manual Calibration 8/8/2015 13:26 Passed Instrument 161 Hilcorp Alaska LLC Milne Point
150121Q-011 _MX4 'Instrument Manual Calibration 8/8/2015 12:37 Passed Instrument 161Hilcorp Alaska LLC Milne Point
_ ®.
13015PA-078 MX4 Instrument Manual Calibration 8/4/2015 17:09 Passed Instrument 171 Hilcorp Alaska LLC Milne Point
0
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REV 0115 0 2015 Industrial Scientific Corporation
•
Carlisle, Samantha J (DOA)
From: Carlisle, Samantha J (DOA)
Sent: Friday, January 29, 2016 3:42 PM
To: 'Marc Bond'
Cc: Larry Greenstein; Bo York
Subject: RE: OTH-15-24: Request for Extension of Time
Marc,
•
Yes, an extension of time is granted. Please submit the written submission for OTH-15-024 by Friday, February 5, 2016.
Thank you,
Samantha Carlisle
? %ecuti (c�7`)e rtxtar Ili
ind (;LIS [
Anchorage, AK 995011
(907) 793-1223
CONFIDENFFALITI'N0110E. 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.C.'ar.lsle<<ialaska.l o� .
From: Marc Bond [ma ilto: m bond @ h ilcorp.com]
Sent: Friday, January 29, 2016 3:31 PM
To: Carlisle, Samantha J (DOA)
Cc: Larry Greenstein; Bo York
Subject: OTH-15-24: Request for Extension of Time
Sam: We have been busy gathering the information and writing our submission in OTH-15-25, OTH-15-29,
OTH-15-30, and OTH-15-31, and we ran out of time to complete our written submission for informal review in
OTH-15-24 (Rig Operations with Failed Gas Detection System, Hilcorp ASR -1, MPU F -96 (PTD 2081860)).
We request an extension on one week — until Friday, February 5, 2016 — to file our written submission in OTH-
15-24.
Please let me know if you have any questions.
Marc Bond - Asst Gen Counsel Hilcorp Alaska, LLC
0:907.777.8309 • C: 907.331.7440 mbond@hilcorp.com
3800 Centerpoint Drive • Ste 1400 - Anchorage - Alaska - 99503
H
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.
•
Carlisle, Samantha J (DOA)
From:
Marc Bond <mbond@hilcorp.com>
Sent:
Friday, January 29, 2016 3:31 PM
To:
Carlisle, Samantha J (DOA)
Cc:
Larry Greenstein; Bo York
Subject:
OTH-15-24: Request for Extension of Time
•
Sam: We have been busy gathering the information and writing our submission in OTH-15-25, OTH-15-29,
OTH-15-30, and OTH-15-31, and we ran out of time to complete our written submission for informal review in
OTH-15-24 (Rig Operations with Failed Gas Detection System, Hilcorp ASR -1, MPU F -96 (PTD 2081860)).
We request an extension on one week — until Friday, February 5, 2016 — to file our written submission in OTH-
15-24.
Please let me know if you have any questions.
Marc Bond - Asst Gen Counsel Hilcorp Alaska, LLC
0:907.777.8309 • C: 907.331.7440 mbond@hilcorp.com
3800 Centerpoint Drive • Ste 1400 • Anchorage - Alaska - 99503
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.
STATE OF ALASKA
OIL AND GAS CONSERVATION COMMISSION
SUBJECT: Informal Review
Dockets: OTH-15-024, OTH-15-025, OTH-15-029, OTH-15-030, and OTH-15-031
NAME
DATE: 2/18/2016
AFFILIATION
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•
Hilcorp Alaska, LLC
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�rF*EB 0 5 2016
February 5, 2016
Cathy Foerster
Chair, Commissioner
Alaska Oil and Gas Conservation Commission
333 West 7th Avenue, Suite 100
Anchorage, AK 99501-3572
•
David Wilkins
Senior Vice President
Post Office Box 244027
Anchorage, AK 99524-4027
3800 Centerpoint Drive
Suite 1400
Anchorage, AK 99503
Phone: 907/777-8397
Fax: 907/777-8580
dwilkins@hilcorp.com
Re: AOGCC Docket No. OTH-15-024
Notice of Proposed Enforcement Action re Hilcorp ASR -1 MPU F-96 (PTD 2081860)
Dear Chair Foerster,
As requested in our letter dated December 5, 2015, we write to provide additional information
concerning the referenced matter in anticipation of the informal review now scheduled for
February 18, 2016.
Chronology of Events and Communication
The Automated Service Rig 1 (ASR -1) was moved onto location on Milne Point F Pad to MPU
Well F-96 to work over a failed ESP. On August 2 at 1656 hours, an email was sent to AOGCC
staff notifying of an upcoming BOPE test. The AOGCC witness was waived by AOGCC staff.
On August 4 at 0300 hours, the crew finished killing the well with 8.5 ppg heated sea water and
commenced the BOPE test. It is important to note that the well was dead and had been
circulated clean of all oil and gas, as is done before any BOPE test. At that point, the gas
detection system was tested and the system was confirmed to be working. Later that day at 1726
hours, the Hilcorp Alaska electrician found the gas detection system in fault. He notified Well
Site Manager (WSM). During that time period, it was also noted that condensation in the pit
trailed from the heated seawater clouded the fire eyes of the fire detection system as a result of
which the fire detection system issued fault alarms.
At 1849 hours on August 4, the WSM sent an email to Hilcorp Alaska engineering and
management regarding the BOPE test. The email also noted the failure of the fire detection
system due to the condensation, and the gas detection system failure. The email indicated that
the BOPE test would be finished soon, and then the crew would verify whether the ASR -1 could
pull the string.
Cathy Foerster •
February 5, 2016
Page 2 of 5
The BOPE test was successfully completed at 2100 hours, and an email report was sent to
AOGCC staff at 2123 on August 4. The email stated:
We have just finished the testing @ 2100 hrs., all is Ok we have had a failure of
our gas monitoring system this afternoon, and have ordered replacement rental
from Total safety. We will not be pulling this completion until that system is in
place and tested. Estimate Thursday sometime the equipment cannot ship until
morning.
At 2200 hours, the well had been killed, the BOPE operation had been verified, and the gas
detection system fault reported had been reported to the AOGCC. The crew attached personal
LEL/H2S monitors and prepared to test whether the ASR -1 could actually lift the completion
string. It is important to note that the intent was simply to verify whether the ASR -1 would be
able to lift the completion and not to pull the hanger and completion above the BOPEs.
At 2220, the WSM forwarded the BOPE test report with an email that stated: "BOP test is
complete. VBR rams repaired. New gas detector equipment ordered. Hope for Thursday install.
We will be doing rig maintenance until then." The BOPE Test report included the following
note:
VBR Ram Packers were replaced Passed.Gas Detector System Failed in Control
panel and circuits unknown. Total saftety [sic] has been contacted for a rental
system install estimated on Thursday. Well operations suspended until gas syatem
[sic] in place and tested. 3 hours shut down during test for pump operator rotation.
At 2328 hours, the WSM sent an email to Hilcorp Alaska engineering staff and management
stating the following:
We got the BOP test done, the gas system ordered. ETA for Install is Thursday.
We dead centered the rig over the hole and backed out the lock down pins to see
if we could pull the hanger.
The hanger moved @ 124K up approx. 3.5 feet and took weight to 156K. We
stopped set back down turned hydraulic pressure up within warranty tolerance as
delegated by rangeland. We picked up to 168.7 K and gained less than a foot
before stalling out with 4800 psi on 5200 psi rated hoses.
We cannot pull this well.
The BHA diagram also show PU weight of 198K but the weight of Doyon's
blocks is unknown to me.
We have landed the hanger again can discuss in the morning .
The next morning, August 6, at 0600 hours the crew began rigging down the ASR -l. At 1515
hours, the WSM sent an email to AOGCC staff stating:
We will not be proceeding on F-96.
We are ND and will secure well with Tree ASAP
Cathy Foerster • •
February 5, 2016
Page 3 of 5
We are moving to J-01. Our alarm problems will be resolved prior to the BOP
test.
I will send out a notification later today when I have a better idea on test time
tomorrow.
Hilcorp Alaska was Candid with the Commission
In the notice of proposed enforcement dated November 25, 2015, the Commission stated:
"Hilcorp explained the failures were related to fire detection equipment
integral to the gas detection system but not required by AOGCC
regulation. The records contradict Hilcorp's representations and indicate
failures occurred in both gas detection and fir e detection equipment within the
system. Hilcorp's use of "personal LEL/H2S monitors" on the rig floor
while attempting to pull the tubing hanger off seat contradicts claims that
failures were limited to the fire detection equipment, as does listing the
failures of the gas detection system components on the blowout prevention
equipment test report dated August 4, 2015."
The MPU F-96 violation and Hilcorp's lack of candor regarding what happened
are neither isolated nor innocent and are emblematic of ongoing compliance
problems with Hilcorp rig workover operations.
These statements suggest that Hilcorp Alaska was not being candid with the AOGCC about the
equipment failure, and that we were trying to hide or misrepresent that the fire detection system
and gas detector systems had both faulted. However, the opposite is true. In our
communications with the Commission, we were forthright and honest about what transpired and
do not dispute it. We never stated that the faults were "limited to the fire detection system."
In response to the Commission notice of investigation dated September 4, Hilcorp Alaska stated,
"While the fire detectors in the mud trailer were affected by condensation from the hot sea water,
the fire detector faults did not affect the gas detectors. The fire detection system was an added
precaution installed by Hilcorp and is not required by 20 AAC 25.066 or other applicable state
regulations." (Emphasis added.)
We believe the Commission has misinterpreted the emphasized section of this statement,
thinking that because we stated that the fire detectors faulted but that did not affect the gas
detectors, that therefore the gas detectors were operational. That was not the intent of the above
statement. The intent was merely to state that the fire detector fault was separate from the gas
detector fault, but they both did indeed fault. The fire detectors faulted on August 3, but the gas
detectors were still functional. The fire and gas detectors both faulted on August 4. In the
September 17 letter, Hilcorp Alaska stated in multiple sections that the gas detectors did indeed
fault and set out a very clear timeline of the faults.
Cathy Foerster
February 5, 2016
Page 4 of 5
Hilcorp Alaska did not Continue Normal Oil and Gas Well Operations after Reporting the
Failure of the Gas Detection System
On August 4 at 2220 hours, the WSM sent the BOP Test Form to AOGCC staff. The report
included the following note:
VBR Ram Packers were replaced Passed.Gas Detector System Failed in Control
panel and circuits unknown. Total saftety [sic] has been contacted for a rental
system install estimated on Thursday. Well operations suspended until gas syatem
[sic] in place and tested. 3 hours shut down during test for pump operator rotation.
Hilcorp Alaska did not continue normal oil and gas well operations after providing notification
of the gas detection system failure to the Commission. Hilcorp Alaska ran a test to determine
whether it was possible for ASR -1 to lift the completion. Hilcorp Alaska did not pull the
completion and had no intention of pulling the completion until the rental gas detection
equipment was installed and tested. The attempt was unsuccessful.
The tubing hanger was lifted off seat sometime between 2200 to 2330 hours on August 4, 2015,
and re -seated following conclusion of the test where it was determined the ASR -1 did not have
the hydraulic capacity to lift the completion beyond unseating the hanger. The crew then began
rigging down the ASR -1 off MPU F-96 and so notified the Commission.
Use of Unadjudicated Alleged Violations
The Commission proposes to assess the fines of $30,000 and $20,000 for conduct associated
with the work on MPU Well F-96. In so doing, the Commission stated that it had consider the
nine factors set forth in AS 31.05.150(g), but discusses only factor 6, "the history of compliance
or noncompliance by the person committing the violation with the provisions of this chapter." In
so doing, the Commission raises unadjudicated allegations contained in other Notices, at least
one of which (OTH-15-029: MPU I-03, alleged failure to report use of BOPE) lacks a factual
basis. Setting substantial fines based on unproven allegations is a practice inconsistent with due
process, especially when one of the alleged violations is not true.
Multiple Fines for the Same Violation
The Commission's notice of proposed enforcement states:
For violating 20 AAC 25.066 the AOGCC intends to impose a civil penalty on
Hilcorp under AS 31.05.150(a) in the amount of $30,000 for the initial violation
of failing to maintain an operational gas detection system while pulling the tubing
hanger off seat and attempting to lift the completion string from MPU F-96, and
$20,000 for the initial violation of failing to obtain waiver or variance approval
for the gas detection equipment required for MPU F-96 workover operations.
Cathy Foerster
February 5, 2016
Page 5 of 5
Respectfully, this amounts to the imposition of two fines for the same alleged violation:
Attempting to see if the ASR -1 rig could lift the completion without an operable gas detection
system. As noted above, Hilcorp Alaska submits that it did discontinue normal oil and gas
operations. Hilcorp Alaska ran a test of the ASR -1 to determine whether it had the physical
capability of lifting the string. There was no plan or intention to pull the string (i.e., continue
normal oil and gas well operations) before the replacement gas detection system was installed
and tested.
If there is a violation in this matter, it is a single violation, not two.
Conclusion
Our discussion of this matter demonstrates Hilcorp Alaska was at all times in communication
and being candid with the Commission. Although 20 AAC 25.066(c) requires reporting the
failure of a gas detection system within twenty-four (24) hours, Hilcorp Alaska reported it less
than 31/2 hours after the electrician noted the faults in the system. In its September 17 letter,
Hilcorp Alaska correctly and clearly reported that the gas detection system and the fire detection
system had experienced faults, and that each was separate from the other.
Once Hilcorp Alaska notified the Commission of the gas detection system failure, we did not
continue normal oil and gas operations. We ran a test of the ASR -1 rig to see whether it could
lift the tubing string. We had no intention of actually pulling the string. When the test
demonstrated that the ASR -1 rig could not pull the string, we notified the Commission, demobed
the rig and moved it off F-96.
Hilcorp Alaska does not concede that it violated the Commission regulations or directions. If,
however, there was a violation, it was a single violation, not two.
We look forward to further discussion of this matter at the informal review now scheduled for
February 18, 2016. It is my sincere hope that Hilcorp and the AOGCC can move forward on this
and other matters in a constructive and open manner.
Sincerely,
HILCORP AL KA, LLC
David Wilkins
Senior Vice President
cc: Jim Regg
Bo York
Justin Furnace
John Barnes
Marc Bond
�. QF Tu, THE STATE•
01ALASKA
GOVERNOR BILL WALKER
December 15, 2015
CERTIFIED MAIL —
RETURN RECEIPT REQUESTED
7015 0640 0006 0779 5890
Mr. David Wilkins
Senior Vice President
Hilcorp Alaska, LLC
3800 Centerpoint Drive, Suite 1400
Anchorage, AK 99503
Alaska Oil and Gas
Conservation Commission
333 West Seventh Avenue
Anchorage, Alaska 99501-3572
Main: 907.279.1433
Fax: 907.276.7542
www.00gcc.alaska.gov
Re: Docket Numbers: OTH-15-024, OTH-15-025, OTH-15-029, OTH-15-030, and OTH-15-
031
Notices of Proposed Enforcement Action — Informal Review
Dear Mr. Wilkins:
As part of the informal review process, Hilcorp Alaska, LLC (Hilcorp) has the opportunity to
submit documentary material and make written and oral statements regarding the Notices of
Proposed Enforcement Actions for:
o Docket Number OTH-15-024, Rig Operations with Failed Gas Detection System, Hilcorp
ASR -1, MPU F-96 (PTD 2081860)
o Docket Number OTH-15-025, Failure to Notify of Changes to an Approved Permit,
Failure to Maintain a Safe Work Environment, Hilcorp Rig ASR1, MPU J -08A (PTD
1991170);
o Docket Number OTH-15-029, Failure to Test BOPE After Use, Nordic Rig 3, MPU I-03
(PTD 1900920)
o Docket Number OTH-15-030, Failure to Notify of Changes to an Approved Permit,
Hilcorp Rig ASR1, MPU J-OIA (PTD 1991110);
o Docket Number OTH-15-031, Failure to Notify of Changes to an Approved Permit,
Nordic Rig 3, MPU J -09A (PTD 1991140).
There will be no formal record kept of the review and the review will not involve the presence of
counsel, either for the AOGCC or the operator.
The informal review is scheduled for February 18, 2016 at 10:00 a.m. in the AOGCC's
Anchorage office located at 333 West 7th Avenue.
Copies of all written submissions and summaries of any oral statements planned by Hilcorp
should be provided to the AOGCC no later than January 29, 2016.
Docket Numbers: OTH-15-024,0H-15-025, OTH-15-029, OTH-15-030, and 0015-031
Notices of Proposed Enforcement — Informal Review
December 15, 2015
Page 2 of 2
Prior to the January 29, 2016 deadline Hilcorp may request to incorporate any other enforcement
actions to be included in this informal review. Pursuant to 20 AAC 25.535 any additional
requests must be submitted in writing.
Sincerely,
6/1,
/ 44 1�
Cathy . Foerster
Chair, Commissioner
Carlisle, Samantha J (DOA)
From: Carlisle, Samantha 1 (DOA)
Sent: Tuesday, December 15, 2015 11:30 AM
To: David Wilkins
Subject: Informal Review
Attachments: Hilcorp Informal Review 021816.pdf
Importance: High
Mr. Wilkins,
Please see the attached regarding an informal review. A hard copy is in the mail.
Please let me know if you have questions.
Thank you,
Samantha earCisCe
'Executive Secretary 11
A(� �u C)%t-a.izd (jus Conservation CCurn.rnission
11'est ;7' .Avenue, -Anchorage, -AX p�).5m
(9 07) 793-1223 sc��rr�arr,Fdirr c ctrlistctu`a./
CONFIDENTIALITY NOTICE: This e -snail message, including any attachments, contains information from the Alaska Oil anis Gas Conservation
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The unauthorized review, use or disclosure of such urformation.may violate state or federal. lav,-. 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 Salnan:tha Carlisle at (907)
793-1223 or Samantha.Carhsle@alaska.t;ov.
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® Mr. David Wilkins
V
Ln Senior Vice President
a
o Hilcorp Alaska, LLC
3800 Centerpoint Dr., Ste. 1400
Anchorage, AK 99503
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• 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.
Mr. David Wilkins
Senior Vice President
Hilcorp Alaska, LLC
3800 Centerpoint Dr., Ste. 1400
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•
Hilcorp Alaska, LLC
December 2, 2015
RECEIVED
DEC 0 81015
A�iCC
Cathy Foerster
Chair, Commissioner
Alaska Oil and Gas Conservation Commission
333 West 7th Avenue, Suite 100
Anchorage, AK 99501-3572
•
David Wilkins
Senior Vice President
Post Office Box 244027
Anchorage, AK 99524-4027
3800 Centerpoint Drive
Suite 1400
Anchorage, AK 99503
Phone: 907/777-8397
Fax: 907/777-8580
dwilkins@hilcorp.com
Re: AOGCC Docket No. OTH-15-024
Notice of Proposed Enforcement Action re Hilcorp ASR -1 MPU F-96 (PTD 2081860)
Dear Chair Foerster,
We are in receipt of the Notice of Proposed Enforcement Action dated November 25, 2015, and
referenced above.
We request an informal review in this matter pursuant to 20 AAC 25.535(c), with the
opportunity to submit documentary material in advance of the informal review. We would like
to discuss the events and clarify certain items set forth in the Notice.
Sincerely,
HILCORP ALASKA, LLC
David ilkins
Senior Vice President
THE STATE •
Raw"I W4415
GOVERNOR BILL WALKER
November 25, 2015
CERTIFIED MAIL —
RETURN RECEIPT REQUESTED
7015 0640 0006 0779 5920
Mr. David Wilkins
Senior Vice President
Hilcorp Alaska, LLC
3800 Centerpoint Drive, Suite 1400
Anchorage, AK 99503
Re: Docket No. OTH-15-024
Rig Operations with Failed Gas Detection System
Hilcorp ASR -1
MPU F-96 (PTD 2081860)
Dear Mr. Wilkins:
0 Alaska Oil and Gas
333 West Seventh Avenue
Anchorage, Alaska 99501-3572
Main: 907.279.1433
Fax: 907.276.7542
www.aogcc.alaska.gov
Pursuant to 20 AAC 25.535, the Alaska Oil and Gas Conservation Commission (AOGCC)
hereby notifies Hilcorp Alaska, LLC (Hilcorp) of a proposed enforcement action.
Nature of the Apparent Violation or Noncompliance (20 AAC 25.535(b)(1)).
Hilcorp has violated the provisions of 20 AAC 25.066 ("Gas detection") while performing
workover operations with Hilcorp Automated Service Rig 1 (ASR1) at Milne Point Unit (MPU)
well F-96.
Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)).
Hilcorp conducted workover operations at MPU F-96 from August 4 through August 6, 2015
with Hilcorp ASRI. Production records show the well was shut in on May 7, 2015 in response to
a failed electric submersible pump (ESP). Sundry approval 315-302 dated May 21, 2015
authorized Hilcorp to pull the failed 4 -1/2 -inch through -tubing ESP completion and re -run a new
2 -7/8 -inch ESP completion. Hilcorp reported a gas detection system failure to AOGCC on
August 4 as required by 20 AAC 25.066(c). In the email notification, Hilcorp stated it has
"ordered replacement rental [gas detection equipment] from Total Safety" and the rig "will not
be pulling this completion until that system is in place and tested".' A follow-up email from
Hilcorp forwarding the blowout prevention equipment test report indicated the rig would be
1 Email from Hilcorp ASR Wellsite Manager, August 4, 2015 at 9:23 pm
Docket Number OTH-15-024 •
Notice of Proposed Enforcement
November 25, 2015
Page 2 of 4
"doing rig maintenance" until the new gas detection equipment was installed.2 Less than one
hour after making this representation to AOGCC, Hilcorp unilaterally decided to test if it was
possible for ASR1 to pull the completion. Hilcorp ASRl lifted the tubing hanger off seat
sometime between 10:00 pm and 11:30 pm on August 4, 2015 in an attempt to determine if the
rig could pull the completion.
Activities leading up to the attempt were marked by operational problems and system faults in
the gas detection equipment, culminating in the system failing to operate properly during
performance testing of the blowout prevention equipment on August 4, 2015. Email records
indicate that the Wellsite Manager contacted Hilcorp's engineer and management overseeing the
project before completing the blowout prevention test and before notifying AOGCC about the
failed gas detection equipment to discuss the plan to "verify if we can pull the well by pulling the
tubing hanger off seat." AOGCC contacted Hilcorp on August 6, 2015 after reviewing the
Weekly Operations Report for ASR1 requesting additional elaboration on the gas detection status
while the rig pulled the tubing hanger off seat and attempted to lift the completion string.
Hilcorp's reply states the gas and fire detection "initially worked" and that the failure was listed
on the blowout prevention test report since they "were not planning to repair the system to keep
working on F-96".
On September 4, 2015 AOGCC sent a notice of investigation to Hilcorp questioning the decision
to pull the tubing hanger off its seat in MPU F-96. A chronology provided by Hilcorp on
September 17, 2015 states: "the ASRl pulled the tubing hanger off seat and attempt[ed] to lift
the completion string. At this time, personal LEL/H2S monitors were being used on the rig
floor." Hilcorp did not identify what, if any, compliant gas detection equipment was being used
in the blowout preventer stack enclosure over the well cellar and over/near the shale shaker
located in the enclosed mud trailer. Hilcorp explained the failures were related to fire detection
equipment integral to the gas detection system but not required by AOGCC regulation. The
records contradict Hilcorp's representations and indicate failures occurred in both gas detection
and fire detection equipment within the system. Hilcorp's use of "personal LEL/H2S monitors"
on the rig floor while attempting to pull the tubing hanger off seat contradicts claims that
failures were limited to the fire detection equipment, as does listing the failures of the gas
detection system components on the blowout prevention equipment test report dated August 4,
2015.
Gas detection regulations for workover rigs establish minimum requirements for methane and
hydrogen sulfide gas detection on workover rigs including sensor locations, operating mode
(automatic, independent acting), sampling intervals, alarms, and reporting a failure in a gas
detection system. Hilcorp's unapproved experiment successfully lifted the tubing hanger off seat
and confirmed the rig's inability to pull the completion to surface in violation of AOGCC
regulations. Hilcorp failed to maintain the required gas detection equipment and failed to obtain
2 Email from Hilcorp ASRI Wellsite Manager, August 4, 2015 at 10:20 pm
Docket Number OTH-15-024 • •
Notice of Proposed Enforcement
November 25, 2015
Page 3 of 4
approval to continue operations (operating without approval; compromising a barrier that is in
place to prevent the release of wellbore fluids from the well).3,4
The MPU F-96 violation and Hilcorp's lack of candor regarding what happened are neither
isolated nor innocent and are emblematic of ongoing compliance problems with Hilcorp rig
workover operations. Hilcorp's compliance history in conducting hydrocarbon development
activities in Alaska includes ongoing failures to obtain necessary approvals; failures to install,
maintain, and test required well control safety systems; failures to perform required tests; and use
of equipment that is unsuitable for the operating environment. Recent examples of noncompliant
activities include:
1) Hilcorp Rig Workovers Employing Nitrogen Well Cleanouts — A review of well
workovers performed at MPU by Hilcorp-operated rigs reveal three wells that have
performed fill cleanout operations using nitrogen without AOGCC approval.
2) Failure to Report Use of Blowout Prevention Equipment — A rig workover performed
with Nordic 3 in early May 2015 encountered the well flowing after running a packer in
MPU I-03. The Weekly Operations Summary reports that the well was shut in and well
pressures were monitored while waiting on additional fluid to kill the well. No report
was filed with AOGCC describing the use of blowout prevention equipment to prevent
the flow of fluids from the well. No record exists of Hilcorp testing the blowout
prevention equipment that was used.s
The disregard for regulatory compliance is endemic to Hilcorp's approach to its Alaska
operations and virtually assured the occurrence of this violation. Hilcorp's conduct is
inexcusable.6
Proposed Action (20 AAC 25.535(b)(3)).
For violating 20 AAC 25.066 the AOGCC intends to impose a civil penalty on Hilcorp under AS
31.05.150(a) in the amount of $30,000 for the initial violation of failing to maintain an
operational gas detection system while pulling the tubing hanger off seat and attempting to lift
the completion string from MPU F-96, and $20,000 for the initial violation of failing to obtain
waiver or variance approval for the gas detection equipment required for MPU F-96 workover
operations. In determining the amount of the penalty, AOGCC has considered the extent to
which Hilcorp was acting in good faith in attempting to comply, the extent to which Hilcorp
acted in a willful or knowing manner, the need to deter similar behavior by Hilcorp and others
3 API RP 17G, Recommended Practice for Completion/Workover Risers, Second Edition, July 2006 (Reaffirmed
April 2011) defines as tubing hanger as: "Component used to support the downhole completion tubing string. Note -
it is also typically used to seal and contain the completion annulus from the environment."
4 Schlumberger Oilfield Glossary defines tubing hanger as follows: "A device attached to the topmost tubing joint
in the wellhead to support the tubing string. The tubing hanger typically is located in the tubing head with both
components incorporating a sealing system to ensure that the tubing conduit and annulus are hydraulically
isolated."; http://www.alossM.oilfield.slb.com
5 20 AAC 25.285(f)(2) and (f)(8)
6 Other Order 80
Docket Number OTH-15-024 •
Notice of Proposed Enforcement
November 25, 2015
Page 4 of 4
similarly situated at the time of the violation or in the future, and Hilcorp's history of compliance
issues. 7
In addition to the imposed civil penalty, AOGCC intends to require Hilcorp to provide a detailed
written explanation that describes how it intends to prevent recurrence of this violation.
The total proposed civil penalty is $50,000.
Rights and Liabilities (20 AAC 25.535(b)(4))
Within 15 days after receipt of this notification — unless the AOGCC, in its discretion, grants an
extension for good cause shown — Hilcorp may file with the AOGCC a written response that
concurs in whole or in part with the proposed action described herein, requests informal review,
or requests a hearing under 20 AAC 25.540. If a timely response is not filed, the proposed action
will be deemed accepted by default. If informal review is requested, the AOGCC will provide
Hilcorp an opportunity to submit documentary material and make a written or oral statement. If
Hilcorp disagrees with the AOGCC's proposed decision or order after that review, it may file a
written request for a hearing within 10 days after the proposed decision or order is issued. If
such a request is not filed within that 10 -day period, the proposed decision or order will become
final on the 11 t' day after it was issued. If such a request is timely filed, the AOGCC will hold
its decision in abeyance and schedule a hearing.
If Hilcorp does not concur in the proposed action described herein, and the AOGCC finds that
Hilcorp violated a provision of AS 31.05, 20 AAC 25, or an AOGCC order, permit or other
approval, then the AOGCC may take any action authorized by the applicable law including
ordering one or more of the following: (i) corrective action; (ii) suspension or revocation of a
permit or other approval; and (iii) imposition of penalties under AS 31.05.150. In taking action
after an informal review or hearing, the AOGCC is not limited to ordering the proposed action
described herein, as long as Hilcorp received reasonable notice and opportunity to be heard with
respect to the AOGCC's action. Any action described herein or taken after an informal review
or hearing does not limit the action the AOGCC may take under AS 31.05.160.
Sincerely,
Cathy P oerster
Chair, Commissioner
7 AS 31.05.150(g) requires AOGCC to consider nine criteria in setting the amount of a civil penalty.
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•
Hilcorp Alaska, LLC
17 September 2015
Cathy P. Foerster
Chair, Commissioner
Alaska Oil and Gas Conservation Commission
333 West Seventh Avenue
Anchorage, AK 99501-3572
SEP 17 201:
Re: Docket No. OTH-15-024
Rig Operations with Failed Gas Detection System
Hilcorp ASR -1 Rig
MPU F-96 (PTD 2081680)
Dear Chair Foerster:
David S. Wilkins
Post Office Box 244027
Anchorage, AK 99524-4027
3800 Centerpoint Drive
Suite 100
Anchorage, AK 99503
Hilcorp Alaska, LLC (Hilcorp) is responding to your request dated 4 September 2015 regarding
the gas detection system on the Automated Service Rig 1 (ASR -1) located at Hilcorp's Milne
Point field. AOGCC's request is specific to events on 3-4 August 2015 while attempting work
on well F-96. Per 20 AAC 25.066 a gas detection system is required on all drilling and work over
rigs. Below is a brief chronological summary of the events related to the gas detection system.
1. 8/02/15 1656 hrs: Notified AOGCC of upcoming BOP test for F-96 (witness waived by
Chuck Scheve).
2. 8/04/15 0300 hrs: Finished well kill w/ 8.5 ppg heated sea water. Started BOP test. First
item tested was the gas detection system. The system was working and passed the test.
3. 8/04/15 1726 hrs: Hilcorp electrician found the gas system in fault. Several initiating
devices (including the gas detection on the rig and mud pump trailer) were not
communicating with the control panel. The well site manager (WSM) was notified. The
Hilcorp electrician found loose connections in the local operating network (LON) cabling
between the mud pit trailer control panel and the junction boxes for initiating gas devices
on the ASR. Condensation inside the pit trailer due to the heated sea water also resulted
in trouble alarms specific to the fire detection system (e.g., fire eyes).
4. 8/04/15 1849 hrs: WSM sent email to Hilcorp engineering and management regarding
gas detection system failure. Email included plan forward to conclude BOP test, verify if
we can pull the well by pulling the tubing hanger off seat, re -adjust the floor and rig up
ESP handling gear while waiting for Total Safety to install a rental gas detection system.
5. 8/04/15 2100 hrs: BOP Test Completed.
Cathy Foerster •
17 September 2015
Page 2 of 3
6. 8/04/15 2123 hrs: WSM sent email sent to AOGCC (Inspector email, Jim Regg, Johnnie
Hill, Chuck Scheve) in accordance with 20 AAC 25.066(c) explaining that ASR1 had a
failure of the gas detection system. Relayed that Total Safety rental gas detection system
was on order and Hilcorp would not pull the completion until the gas system was
operational.
7. 8/04/15 2200 hrs: At this point in the operation, there was a question whether the ASR1
would be able to pull the completion due to the weight of the completion string.
Therefore, the ASR1 pulled the tubing hanger off seat and attempt to lift the completion
string. At this time, personal LEL/H2S monitors were being used on the rig floor.
8. 8/04/15 2220 hrs: BOP Test Form sent to AOGCC (Jim Regg, Inspector email, Phoebe
Brooks). Notes on test indicate failure of gas detection system.
9. 8/04/15 2330 hrs: WSM determined ASR1 could not pull the completion and attempts
ceased. Landed tubing hanger. Email sent to Hilcorp employees.
10. 8/05/15 0600 hrs: Begin rigging down ASR1 off of MPU F-96.
11. 8/05/15 1515 hrs: Email sent to AOGCC (Inspector email, Jim Regg, Johnnie Hill, Chuck
Scheve) notifying that we were moving off of MPU F-96 and moving to MPU J-01 A.
12. 8/06/15 1057 hrs: Email sent from Phoebe Brooks at AOGCC regarding revised BOP test
form.
Responses to your specific requests are included below.
Daily rig operation logs for the F-96 well covering 3-6 August 2015 are included in Attachment
A.
The failure analysis of the gas detection equipment completed by Hilcorp's fire and gas engineer
is included in Attachment B. As noted above in the chronological summary, the failure was
initially identified as loose connections in the LON and during subsequent system reinstatement
Hilcorp electricians identified faults resulting from electromagnetic interference (EMI) by the
480v power cabling. Troubleshooting by the Hilcorp electricians identified the problem and a
formal failure analysis investigation was not required. While the fire detectors in the mud trailer
were affected by condensation from the hot sea water, the fire detector faults did not affect the
gas detectors. The fire detection system was an added precaution installed by Hilcorp and is not
required by 20 AAC 25.066 or other applicable state regulations.
Three Hilcorp electricians and one Hilcorp fire and gas engineer worked on the gas detection
system. Their qualifications are presented below:
• Electrician #1 — Maintains Electrical Administrator license for Hilcorp, journeyman
electrician, Fire Alarm Permit IA, Det -Tronics manufacturer training
• Electrician #2 - Maintains Electrical Administrator license for Hilcorp, journeyman
electrician, Fire Alarm Permit IB, Det -Tronics manufacturer training
• Electrician #3 - Journeyman electrician, Fire Alarm Permit IB, Det -Tronics manufacturer
training
In addition, Hilcorp's fire and gas engineer was involved in the troubleshooting process. Her
qualifications are listed below:
Cathy Foerster
17 September 2015
Page 3 of 3
• Fire Alarm Permit IC -DO, State of Alaska registered professional fire protection
engineer, Det -Tronics manufacturer training
Please let me know if you have any questions or would like additional clarification or discussion
on Hilcorp's response to your request.
Sincerely,
HILCORP ALASKA, LLC
David S. kins
Sr. Vice President
cc: John Barnes (Hilcorp)
Attachment A: F-96 Daily Rig Operation Logs, 3 through 6 August 2015
Attachment B: Gas Detection System Failure Report
•
ATTACHMENT A
•
•
•
HILCORP ENERGY COMPANY
DAILY OPERATIONS REPORT
REPORT NO. 5 DATE: 8/4/2015
JOB: 11521324 - ES P Change -out/ Replace T ubin
LEASE: I
WELL:
MP F-96
AFE/PROJ NO: 1 1521324
FIELD: I
Milne Point
COUNTY / PARISH / API#:
I North Slope Burou h/50-
STATE: AK
PRESENT OPERATION AT REPORT TIME: IBOP testing after start up and well kill.
DAILY COST:CUM.
JOB COST: I AFE Budget:
CUM. DRILL COST:
CUM. CMPL COST: I Total D&C Cost:
REPORTED BY:
Wayne Biart ICONTRACTOR REP:
PHONE
LAST BOP TEST:
719-680-9028 ICONTRACTOR / RIG M
INEXT BOP TEST: I FUNC DUE:
FLUID:
TYPE:
I IWEIGHT: DAILY LOSS: I ICUM LOSS:
CASING DATA PRODUCTION TUBING
SIZE:
WT:
DEPTH: ID: SIZEMTT/THD: // GRADE ID:
SIZE:
WT:
DEPTH: ID:
SIZE:
WT:
DEPTH: ID:
SIZE:
WT:
DEPTH: ID: H
EQUIPMENT DATA
Packer:
SIZEIDEPTH: /
NIPPLES:
DEPTH: ID: SCSSV: DEPTH: ID:
NIPPLES:
DEPTH: ID:
NIPPLES:
DEPTH: ID:
NIPPLES:
DEPTH: ID:
TBG HD/FLANGE:
PRODTREE:
SMALLESTID:
I DEPTH: I JPBTD: 11 ELEVATION: WD:
PRESENT PERFS:
0 to 0 Packer Fluid:
FROM
TO
ACTIVITY SUMMARY (Chronological order for the last 24 hrs.)
600
1200
Crew travel to MPU.
12:00
16:00
PJSM crew assignments, orientation, gather parts from warehouse. Check all engines and fluid levels, start all equipment. No location communications.
Discuss operations with Chuck Scheve, said to proceed with testing when able.
16:00
22:30
Proceed with start up, offload 265 bbls hot seawater 150°. Fluids delayed by rig move on Spine Road. Wait on second load. Wire camp. Test H2S
sensors and alarms. Test methane sensors operational on bypass.
22:30
0:00
Pumping 8.5 ppg hot seawater. Pump packing leaking badly, shut down, tighten/ lube, repeat, same problem, 100 bis pumped, lots of gas, just catching
pressure, no returns, call LRS to finish pumping kill.
000
3:00
Offload second SW truck rig up for LRS, pump remaining 410 bbls with circulation, recover heavy oil —140 bbls before seawater returns. Total returns 230
bbls.
3:00
6:00
Initiate BOP testing with LRS chart and pump. BOP testing witness waived by Chuck Scheve, AOGCC.
ACCIDENTS?
None
r1
L_J
•
HILCORP ENERGY COMPANY
DAILY OPERATIONS REPORT
REPORT NO. 6 DATE: 8/5/2015
JOB: 11521324 - ES P Chan
a -out/ Re place T ubin
LEASE:
WELL:
I MP F-96
AFE/PROJ N0:
1 1521324
FIELD:
Milne Point
COUNTY / PARISH / API#:
North Slope Surou h/50-
STATE:
AK
PRESENT OPERATION AT REPORT TIME: IRiqqin Down after unsuccessful attem ot to pull production
DAILY COST:
CUM. JOB COST: AFE Budget:
CUM. DRILL COST:
CUM. CMPL COST: I Total D&C Cost:
REPORTED BY:
Wayne Biart CONTRACTOR REP:
PHONE
LAST BOPTEST:
719-680-9028 ICONTRACTOR / RIG #:
NEXT BOP TEST: FUNC DUE:
FLUID:
TYPE:
WEIGHT: DAILY LOSS: I ICUM LOSS:
CASING DATA PRODUCTION TUBING
SIZE:
WT:
DEPTH: ID: SIZE/WT/THD: // GRADE ID:
SIZE:
WT:
DEPTH: ID:
SIZE:
Wi:
DEPTH: ID:
SIZE:
WT:
DEPTH: ID:
EQUIPMENT DATA
Packer:
SIZEIDEPTH: /
NIPPLES:
DEPTH: ID: SCSSV: DEPTH: ID:
NIPPLES:
DEPTH: ID:
NIPPLES:
DEPTH: ID:
NIPPLES:
DEPTH: ID:
TBG HD/FLANGE:
PRODTREE:
SMALLESTID:
I DEPTH: I IP13TD, I ELEVATION: WD:
PRESENT PERFS:
0 to 0 Packer Fluid:
FROM
TO
ACTIVITY SUMMARY (Chronological orderfor the last 24 hrs.)
600
830
PJSM. Continue with BOPE test. Shut down for LRS crew chan eout.
8:30
12:30
Rig maintenance waiting on crew change out.
1230
21:00
Continue BOP test all ROPE 250/3,000 psi. Failure on VBR rams troubleshoot change out same, continue test annular 250/2,500 psi, accumulator draw
down test.
21:00
22:00
Center rig over hole. Remove TWC, install BPV, Install 4.5" IBT landing joint w cover. PJSM on max pull operation safety and evacuation.
22:00
0:00
Latch LJ. PU to 124K hanger movement noted 3.5' at 157K. Hydraulic stalling . Slack off reset increase hydraulic pressure PU to 168.7K gain an
additional movement. Rig stalling out will not pull any more. Repeat several times. Not getting stretch out of pipe. Eangeland advises no more hydraulic
pressure increase at peak load 4,800 psi on hydraulic hoses rated for 5,200 psi. Land hanger RILD.
000
4:00
Flo -test operate pump after redress, calibrate telemetry to match flow rates and volume sensors, generator ran out of fuel.
400
6:00
Fuel up, Begin RDMO.
ACCIDENTS?
HILCORP ENERGY COMPANY
DAILY OPERATIONS REPORT
REPORT NO.
7 DATE: 8/6/2015
JOB: 11521324 - ES P Change -out/ Replace T ubin
LEASE: I
WELL:
MP F-96 AFE/PROJ NO: 1521324
FIELD: I
Milne Point
COUNTY / PARISH /API#:
INorth Slope Burou h/50- STATE: AK
PRESENT OPERATION AT REPORT TIME:
IMoving off, Well turned to production
DAILY COST:
CUM. JOB COST:
AFE Budget:
CUM. DRILL COST:
CUM. CMPL COST:
Total D&C Cost:
REPORTED BY:
Wayne Biart
CONTRACTOR REP:
PHONE
LAST BOP TEST:
719-680-9028
INEXT BOP TEST:
CONTRACTOR / RIG #:
FUNC DUE:
FLUID: TYPE:
WEIGHT:
DAILY LOSS: ICUM LOSS:
CASING DATA
PRODUCTION TUBING
SIZE: WT:DEPTH:
ID:
SIZEM/T/THD:
// GRADE ID:
SIZE: WT:
DEPTH:
ID:
SIZE: WT:
DEPTH:
SIZE: WT:
DEPTH:
EQUIPMENT DATA
Packer:
SIZE/DEPTH:
/
NIPPLES:
DEPTH:
ID:
SCSSV:
DEPTH: ID:
NIPPLES:
DEPTH:
ID:
NIPPLES:
DEPTH:
ID:
NIPPLES:
DEPTH:
ID:
TBG HD/FLANGE:
PROD TREE:
SMALLESTID:
DEPTH:
PBTD:
I ELEVATION:
WD:
PRESENT PERFS:
0 to 0
Packer Fluid:
FROM TO
ACTIVITY SUMMARY (Chronological ordertor the last 24 hrs.)
6:00 18:30
PJSM RDMO, ND BOP NU Tree.
18.30 20:30
Remove BPV Freeze protect well. Secure and
turn well over to production. Rig off location.
ACCIDENTS?
Attachment B - ASR1 Gas Detection System
System configuration:
The control panel for the detection & notification is not rated for use in electrically
classified area so it is located in the Mud Pit Trailer "Generator Room" electrically
unclassified area. A local operating network (LON) cable provides a communication link
between the Mud Pit Trailer and the ASR Rig. Initiating devices including combustible gas
and 1-12S detectors are on the LON network and provide inputs to the control panel when in
alarm or fault. The control panel initiates audible and visual notification appliance as
appropriate based on alarm inputs received. Initiating device faults generate trouble signals
which are indicated at the control panel.
Failure Analysis:
3 Aug 2015: Fire and Gas panel fault due to loss of more than 50% of optical integrity
determined to be due to steam generated visual obscuration on flame detectors FD -02, 03,
04, 05 and 06 located in the Mud Pit Trailer. Flame detectors are not required by 20 AAC
25.066. The type of fault received would annunciate on the control panel but would not
interfere with the required gas detection system functionality. The required 1-12S and
combustible gas detectors would still operate as intended: detect, alarm, and initiate the
required audible and visual notification appliances for combustible gas or 1-12S detection.
The Hilcorp electricians that investigated the faults found the gas detection portion of the
system was working, and verified that the system functioned by testing the entire gas
detection system for proper alarm and notification, with the exception of the 5 flame
detectors in the Mud Pit/Choke Room which remained in fault.
4 Aug 2015 1726 hrs: A Hilcorp electrician found the fire and gas system in fault. Several
initiating devices (including the gas detection on the rig and mud pump trailer) were not
communicating with the control panel. Well site manager was notified. Electrician found
loose connections in the LON cabling between the Mud Pit trailer control panel and the
junction boxes for initiating devices on the ASR Rig.
6 Aug 2015: Portable gas detection system provided by Total Safety was mobilized to Milne
Point for the next well workover (J-01) and remains in service during well workovers until
the permanently installed Det -Tronics system is reinstated.
8-18 Sept 2015: Reinstatement of the Det-Troncis fixed system including confirmation of
adequacy of cable connections/ terminations, improved means of connecting the cable
between the Mud Pit Trailer and ASR1 using TURCK connectors, and the installation of
system fault notification at the driller's console anticipated to be complete by Sept 18.
During reinstatement activity the Det -Tronics system was noted to go into fault when the
nearby 480v power was put into service. This indicates that electromagnetic interference
(EMI) is being induced by the 480v cable. Physical separation between the 480v and the
LON cables has been implemented and testing has shown the Det -Tronics system is
functioning properly.
Current Status: Both the Det -Tronics fixed and the Total Safety portable systems will run in
parallel for the duration of the E-20 well workover to confirm the performance of the Det -
Tronics system before demobilizing the Total Safety portable system.
THE STATE •
F 1, 1
41 W wal
GOVERNOR BILL WALKER
September 4, 2015
Certified Mail
Return Receipt Requested
7015 0640 0006 5562
Mr. David Wilkins
Senior Vice President
Hilcorp Alaska, LLC
3800 Centerpoint Drive, Suite 1400
Anchorage, AK 99503
Re: Docket No. OTH-15-024
Rig Operations with Failed Gas Detection System
Hilcorp ASR -1 Rig
MPU F-96 (PTD 2081680)
Dear Mr. Wilkins:
• Alaska Oil and Gas
Conservation Commission
333 West Seventh Avenue
Anchorage, Alaska 99501-3572
Main: 907.279.1433
Fax: 907.276.7542
www.aogcc.olaska.gov
Due to a failed gas and fire detection system on Hilcorp Alaska LLC Rig ASR1 (Hilcorp ASR1)
during blowout prevention equipment testing on August 3-4, 2015, the Alaska Oil and Gas
Conservation Commission (AOGCC) is investigating whether workover operations at Hilcorp's
Milne Point Unit well F-96 comport with the requirements of 20 AAC 25.066.
Hilcorp is requested to provide the following information no later than September 18, 2015:
- Copies of all daily rig operations logs for the Milne Point Unit F-96 workover (August 3
through August 6, 2015);
- Failure analysis of the gas and fire detection equipment; provide a copy of the full report;
- Qualifications of individuals/organizations, including names, employer and job
descriptions that are analyzing and assessing the gas and fire detection equipment failure.
This request is made pursuant to 20 AAC 25.300. Failure to comply with this request is itself a
regulatory violation. The AOGCC reserves the right to purse an enforcement action in this
matter according to 20 AAC 25.535.
Should you have any questions about the information request, please contact Jim Regg at 793-
1236.
Sincerely,
Cathy . Foerster
Chair, Commissioner
cc: Jim Regg
AOGCC Inspectors
Mr. David Wilkins is •
September 4, 2015
Page 2 of 2
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.
ru
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Mr. David Wilkins
Senior Vice President
Hilcorp Alaska, LLC
3800 Centerpoint Dr., Ste. 1400
Anchorage, AK 99503
■ Complete items 1, 2, and 3.
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Mr. David Wilkins
Senior Vice President
Hilcorp Alaska, LLC
3800 Centerpoint Dr., Ste. 1400
Anchorage, AK 99503
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