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Home My WebLink AboutO 113• OTHER ORDER 113 Hilcorp Alaska, LLC Docket 0TH -15-036 • 1. ------------------------- Background information 2. December 16, 2015 Proposed Enforcement Action to Hilcorp re: Missing Meter Calibration Reports, Ninilchik Bartolowits Pad 3. January 4, 2016 Hilcorp's request for Informal Review 4. January 6, 2016 AOGCC letter grating Informal Reveiw 5. January 21, 2016 Informal Review sign -in sheet 6. January 28, 2016 Hilcorp's additional information for informal review 7. ------------------------ Various Emails 8. November 3, 2016 Hilcorp civil penalty payment and response OTHER ORDER 113 ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Missing Meter Calibration Reports Other Order 113 Ninilchik Unit Bartolowits Pad Docket Number: OTH-15-036 Custody Transfer Meter October 20, 2016 DECISION AND ORDER On December 16, 2015 the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to Hilcorp Alaska, LLC (Hilcorp) regarding the Ninilchik Unit Bartolowits (Bartolowits) Pad. The Notice was based upon Hilcorp's failure to submit required meter reports for the months August 2014 through December 2015. Hilcorp requested an informal review. That review was held January 21, 2016. Summary of Proposed Enforcement Action: The Notice identified violations by Hilcorp of the conditional approval letter for the Bartolowits pad custody transfer measurement equipment, specifically the requirement to provide monthly meter calibration and performance reports. The Notice proposed that Hilcorp provide a detailed written explanation describing how it intends to prevent recurrence of this violation. For these violations, the AOGCC proposed a $170,000 civil penalty on Hilcorp. Informal Review: An informal review provides opportunity for the recipient of a proposed enforcement action to submit evidence and make written and oral statements regarding the enforcement action in advance of AOGCC issuing a final decision. Hilcorp's request for an informal review stated it would "submit documentary material in advance of informal review, and make an oral presentation at the informal review." That same day, Hilcorp forwarded the missing calibration reports and Elster Uniguard Meter Health Check Reports (health check reports) for the Bartolowits custody transfer ultrasonic meter. Hilcorp's January 4, 2016 submittal was incomplete, missing the following ultrasonic meter health check reports: September 2014; November 2014; February 2015; and October 2015. Also missing was the meter calibration report for August 2014. The missing health check reports were provided on January 7, 2016; the missing meter calibration report has never Other Order 113 • October 20, 2016 Page 2 of 11 been submitted (discussed below). Review of the health check reports identified numerous times meter alarms were recorded, which raise concerns about the gas measurement system's accuracy. Hilcorp's submittal suggested that AOGCC had inspected the Bartolowits custody transfer meter "three times since its approval" and that "documentation was given directly to the Inspector" after each witnessed test. AOGCC records show only two Inspector -witnessed meter calibrations between the start of production on the Bartolowits pad (July 28, 2014) through December 31, 2015. Hilcorp records provided on January 4, 2016 confirm there were only two AOGCC inspections.) AOGCC Inspectors were never provided copies of the health check reports for the Bartolowits ultrasonic meter. Except for the missing meter reports, Hilcorp provided no additional information for AOGCC's consideration in its proposed enforcement action. During the informal review, although Hilcorp admitted it had no auditing mechanism of its regulatory tracking system which would have caught its failure to apprise its employees of the reporting requirement, it nonetheless characterized its failure to submit the reports as an honest mistake due to its failure to add the conditions of approval into its regulatory tracking system. According to Hilcorp, because it had no tracking system, it "didn't know reports were due." Hilcorp contends that in combination its failures render its conduct a single initial event (failure to submit reports) that carried forward each month since the Bartolowits custody transfer meter was placed in service. Hilcorp characterized the financial penalty as excessive because it disagreed with AOGCC's proposed enforcement which effectively represented a separate penalty for each monthly failure to report.2. Review of the meter reports prior to the informal review identified numerous meter alarms in the monthly health check reports, including several that were repeat occurrences during the 17 -month 1 August 13, 2015; December 4, 2016 2 August 2014 through December 2015 Other Order 113 • October 20, 2016 Page 3 of 11 period covered by this enforcement action. The meter alarms are significant. AOGCC raised concerns about the performance of this particular ultrasonic meter during the application review due to previous issues at the Kasilof pad where health check reports exhibited some of the same alarms. 3°4 The history of this meter at the Kasilof pad was a main factor in requiring the submittal of monthly health check reports for the relocated ultrasonic meter. Hilcorp could not answer AOGCC's questions about the contents of the reports, specifically the recurring velocity of sound alarms. In spite of the above, Hilcorp placed part of the blame for its regulatory violations on AOGCC claiming that - AOGCC is responsible for contacting Hilcorp and educating its personnel about the conditions of approval; - AOGCC incorrectly accuses Hilcorp of failing to provide required reports associated with two monthly calibrations; and - AOGCC has "explicitly declined to provide any guidance on ambiguous requirements." As evidence Hilcorp cites an August 1, 2014 email that informed AOGCC it understands that the documents attached to the email were the "last submissions necessary for compliance." The context and timing of the August 1, 2014 email address pre -start obligations that were also included as approval conditions, not the ongoing month-to-month compliance requirements for an operating gas measurement system. Hilcorp claims that the conditions of approval were misread by its personnel. AOGCC bears no responsibility for Hilcorp's behavior. Hilcorp notified AOGCC during the informal meeting that it failed to perform the required meter calibration checks in August 2014. Reasons for the missed meter calibration were not provided. This represents an additional violation of the Bartolowits custody transfer meter approval. 3 Bartolowits meter application received May 28, 2014, approved June 26, 2014 4 Operated by Marathon before Hilcorp obtained owner/operator rights in February 2013 Other Order 113 • October 20, 2016 Page 4 of 11 At the close of the informal review, AOGCC provided Hilcorp with an additional opportunity to submit information addressing AOGCC concerns about the gas measurement equipment performance at Bartolowits and corrective actions that have been or are being implemented. Hilcorp's letter dated January 28, 2016 provided an example of a work order process being implemented that will be used to track required meter calibrations from scheduling through report submittal. Hilcorp's letter also references in general terms the development of "training modules" without providing details demonstrating how the training will prevent recurrence of the violations identified in the Bartolowits notice. Health Check Reports: An ultrasonic flow meter measures the speed (velocity) of the fluid flowing through a known cross sectional area of the meter body. The meter infers the flow of gas (velocity) by measuring the difference in transit time of sound pulses transmitted through the flowing fluid downstream (shorter transit time) and upstream (longer transit time). A commonly used analogy is comparing a kayak crossing a river — faster across when traveling with the current as compared to against the current. Different configurations are used for the sound -pulse transmission path geometry; the Bartolowits meter uses a reflected acoustic path geometry with three sound -pulse transmission paths of known length. Because the ultrasonic meter infers gas velocity, direct meter proving methods are not available which places an increased emphasis on proper system configuration, the use of proper diagnostic software tools, and knowledge of how to interpret the data. A major advantage of ultrasonic meters is the large amount of data produced for diagnosing the meter's correct operation. Another distinct advantage is the continuous remote monitoring capability of the meter's health to evaluate trends in the data. Key parameters include composition of gas, velocity of sound (by path), comparison of "measured" velocity of sound to calculations using industry recognized standards5, transducer performance, signal-to-noise ratios, and transducer gain (signal strength). Diagnostics look for changes and out -of -limit events over time on basic parameters such as velocity of sound to verify proper meter performance and provide early 5 American Gas Association Report No. 10 Other Order 113 • October 20, 2016 Page 5 of 11 identification of potential measurement issues. The importance of diagnostics is underscored by comments from ultrasonic meter manufacturers: - Daniel Measurement and Controls — "if all the diagnostic parameters are normal one can have complete confidence that the meter is working correctly";6 - Honeywell Elster — "Good, representative samples of gas quality are necessary to facilitate calculation of reference speed of sound values needed to evaluate meter operating conditions"; "Comparisons of meter measured SOS (velocity of sound) may be made against this calculation as a `health check.' Direct correlation between meter accuracy and SOS has yet to be established, but it is known that correct meter function is doubtful if the SOS calculation is in error."; "Discrepancies between measured and calculated SOS (velocity of sound) indicate a fundamental meter problem." 7 As a result, concerns identified through performance monitoring should trigger additional analysis of the meter system that impact the velocity of sound calculation. The Bartolowits health check reports are described by Hilcorp as a snapshot (2-3 minutes) of the meter's performance instead of totals or averages of results over a longer time interval. Roughly half — eight of seventeen — of the reports show alarms triggered for the comparison of measurement to calculated velocity of sound. Hilcorp's assessment states the eight months where a velocity of sound alarm occurred can indicate a drift in either the meter or the gas analysis and that the snapshot "is typically used to trend drift over a period of time". Hilcorp's letter dated January 28, 2016 included a graph of "Average Percent Deviation by Month" for the velocity of sound comparison, concluding that the Bartolowits meter trends "do not indicate a consistent drift from the normal range". A credible assessment regarding drift is not obtained from a 2 to 3 -minute snapshot of meter performance once a month. More problematically, one purpose of requiring the reports is to have AOGCC, not Hilcorp, make that determination. 6 "Diagnostic Ability of the Daniel Four Path Ultrasonic Flow Meter"; K. Zanker, Daniel Measurement and Controls White Papers; www.daniel.com ' "Ultrasonic Gas Flow Meters for Custody Transfer Measurement"; J. Micklos, Elster Other Order 113 • • October 20, 2016 Page 6of11 Hilcorp attributes the alarms for velocity of sound comparisons in five of the seventeen months to dates where the health check report was run coincident to no gas flow through the Bartolowits ultrasonic meter. AOGCC deems a 2 to 3 -minute diagnostic "snapshot", especially one that is captured without gas flowing through the meter, to be of no value in an assessment of meter performance. Discussion: The above discussion demonstrates the importance of performance monitoring with the proper diagnostics software and understanding how to interpret the data. Hilcorp's failure to provide the required health check reports for the Bartolowits ultrasonic meter violated a specific, clearly worded condition of the Bartolowits meter approval and denied AOGCC the ability to review and address questions about health check report alarms in a timely manner. The AOGCC has considered the factors in AS 31.05.150(g) in its assessment of the violations. Hilcorp admits it failed to submit the required meter performance reports. Hilcorp also admits that it failed to perform the required calibration checks on the Bartolowits meter during August 2014. There is nothing ambiguous about the conditions imposed by AOGCC for approval of the Bartolowits meters. Hilcorp's history of noncompliance and its failure to take the rudimentary measure of entering AOGCC's requirements in its regulatory tracking system preclude any claim that Hilcorp has acted in good faith. Prior to this violation, AOGCC staff had met with Hilcorp on a number of occasions regarding ongoing compliance issues with Hilcorp, including an unprecedented meeting with field operations staff at Hilcorp's Kenai field office. AOGCC resolved Hilcorp's earlier violations without enforcement actions. (See Table 1, attached to this Decision.) This approach has had little discernible impact on Hilcorp's behavior. Hilcorp's previous commitments to train its personnel have been insufficient to avoid recurrences of regulatory violations.8 Hilcorp's lack of good faith in its attempts to comply with the imposed 8 October 14, 2016 letter to J. Barnes (Hilcorp) deferring closeout of a notice of violation Other Order 113 • October 20, 2016 Page 7 of 11 conditions, its history of regulatory noncompliance and need to deter similar behavior are the factors which most heavily influence this decision. AOGCC agrees with Hilcorp that not adding the Bartolowits meter application conditions of approval into its regulatory tracking system exacerbated the length of its non-compliance. Hilcorp's ability to provide AOGCC with the missing reports partially mitigates the seriousness of the violation. Findings and Conclusions: The AOGCC finds that Hilcorp violated Condition #4 of the approval authorizing the use of an ultrasonic flow meter at Bartolowits for custody transfer measurement of produced gas by failing to submit required meter calibration and health check reports. AOGCC further finds that by its own admission in the informal review, Hilcorp violated the requirement of Condition #2 by failing to a perform meter calibration during August 2014. Now Therefore It Is Ordered That: A civil penalty in the amount of $30,000 for violating the conditions of the Bartolowits custody transfer meter application approval dated June 26, 2014 as follows: - $20,000 for failing to calibrate the Bartolowits meter in August 2014; - $10,000 for failing to submit the required reports between the months of August 2014 through December 2016. In addition to the required monthly meter calibration reports, Hilcorp must commence at least daily health checks of the meter and provide the monthly average of the collected data. Average performance data that is outside operating limits must be addressed in the health check report. Hilcorp must maintain the daily health check reports to substantiate the monthly summary reports. As an Operator involved in an enforcement action, you are required to preserve documents concerning the above action until after resolution of the proceeding. Other Order 113 • October 20, 2016 Page 8of11 Done at Anchorage, Alaska and dated October 20, 2016. 4 - Cathy P Foer ter Chair, Commissioner Attachment saaAcbRia— 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. Table 1— Hilcorp Noncompliance History Date Non -Compliance Location AOGCC Comments Action9 April 2012 Missing SVS tests; Failure Westside Cl 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 Unit NOV BOPE test; Inspector observed missing kill line valve 21-22 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 Creek Unit See 10/23/12 When finally tested BOPE after use (10/18/12), tested Pressure 44-33 (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 to approved permit Corrective approved in PTD by AOGCC; failed to notify 10/23/2012 Soldotna Creek Unit Actions (Other AOGCC of changes to well plan; failed to maintain 44-33 (Doyon Rig 1) 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 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 1 2000psi alarm set, 1000psi gauge; well SI by Hilcorp 9 NOV — Notice of Violation; no financial penalty; corrective actions only • • Other Order 113 October 20, 2016 Page 10 of 11 Date Non -Compliance Location AOGCC Comments Action9 11/29/2012 Missing well control Happy Valley B-16 NOV Missing top drive valve(s) on 10/10/12 and again e ui ment (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 Schlumber er 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 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 Soldotna Cree NOV SVS on 3 rod pump wells found defeated during Missing Annulus Gauges Unitl2A-04; SCU 12/9/13 AOGCC inspection; also found SCU 24A-09 24A-09; SCU 41A-08 without the required pressure gauge to monitor outer annulus (OA) 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 • • Other Order 113 October 20, 2016 Page 11 of 11 Date Non -Compliance Location AOGCC Comments Action 8/29/2014 Failure to Test BOPE Trading Bay Unit G- NOV Rig exceeded allowed Mays between BOPE tests 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 required 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 n U U Carlisle, Samantha J (DOA) From: Carlisle, Samantha J (DOA) Sent: Thursday, October 20, 2016 2:41 PM To: Ballantine, Tab A (LAW) (tab.ballantine@alaska.gov); Bender, Makana K (DOA) (makana.bender@alaska.gov); Bettis, Patricia K (DOA) (patricia.bettis@alaska.gov); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA) (phoebe.brooks@alaska.gov); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA) Oody.colombie@alaska.gov); Cook, Guy D (DOA); Davies, Stephen F (DOA) (steve.davies@alaska.gov); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA) (cathy.foerster@alaska.gov); French, Hollis (DOA); Frystacky, Michal (michal.frystacky@alaska.gov); Grimaldi, Louis R (DOA) (lou.grimaldi@alaska.gov); Guhl, Meredith (DOA sponsored) (meredith.guhl@alaska.gov); Herrera, Matthew F (DOA); Hill, Johnnie W (DOA); Jones, Jeffery B (DOA) (Jeff jones@alaska.gov); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored) Ooseph.mumm@alaska.gov); Noble, Robert C (DOA) (bob.noble@alaska.gov); Paladijczuk, Tracie L (DOA) (tracie.paladijczuk@alaska.gov); Pasqual, Maria (DOA) (maria.pasqual@alaska.gov); Quick, Michael (DOA sponsored); Regg, James B (DOA) Oim.regg@alaska.gov); Roby, David S (DOA) (dave.roby@alaska.gov); Scheve, Charles M (DOA) (chuck.scheve@alaska.gov); Schwartz, Guy L (DOA) (guy.schwartz@alaska.gov); Seamount, Dan T (DOA) (dan.seamount@alaska.gov); Singh, Angela K (DOA) (angela.singh@alaska.gov); Wallace, Chris D (DOA) (ch ris.waIlace@aIaska.gov); AK, GWO Projects Well Integrity; AKDCWellIntegrityCoordinator; Alan Bailey, Alex Demarban; Alexander Bridge; Allen Huckabay; Andrew Vanderlack; Ann Danielson; Anna Raff; Barbara F Fullmer, bbritch; Becky Bohrer; Bill Bredar; Bob; Brandon Viator; 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; Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Evan Osborne; Evans, John R (LDZX); Gary Oskolkosf, George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Gretchen Stoddard; gspfoff, Hyun, James J (DNR); Jacki Rose; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jim Watt; Jim White; Joe Lastufka; Joe Nicks; John Burdick; John Easton; Jon Goltz•, Juanita Lovett; Judy Stanek; Julie Little; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Kevin Frank; Kruse, Rebecca D (DNR); Laura Silliphant (laura.gregersen@alaska.gov); Leslie Smith; Lori Nelson; Louisiana Cutler; Luke Keller, Marc Kovak; Mark Dalton; Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Marquerite kremer (meg.kremer@alaska.gov); Mealear Tauch; Michael Bill; Michael Calkins; Michael Moora; MJ Loveland; mkm7200; Munisteri, Islin W M (DNR); nelson; Nichole Saunders; Nikki Martin; NSK Problem Well Supv, Patty Alfaro; Paul Craig; Paul Decker (paul.decker@alaska.gov); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Rena Delbridge; 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; Steve Moothart (steve.moothart@alaska.gov); Steve Quinn; Suzanne Gibson; Tamera Sheffield; Ted Kramer; Temple Davidson; 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; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; Catie Quinn; Don Shaw; Eric Lidji; Garrett Haag; Graham Smith; Hak Dickenson; Neusser, 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 To: (D1QR); Marc Kuck; Marcia Hobson; Marie Steele�Glatt Armstrong; Mike Franger; Morgan, Kirk A (DNR); Pascal Umekwe; Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Susan Pollard; Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); Wayne Wooster; William Van Dyke Subject: Other Order 113 (Hilcorp) Attachments: other113.pdf Missing Meter Calibration Reports Ninilchik Unit Bartolowits Pad Custody Transfer Meter Samantha Carlisle s1.1'E? c n,:.?"v tk',n C- West' r (910`) CONFIDENIIALITYNOY ICE. 'chis e -Mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Cot nmission (AOGCC), State of Alaska and is forthe sole: use of the: intended recipient(s). It rsray coa7taiti confideratiai 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) 7933-1223 or Siniantha.Carlisle(,tLal.aska_gov. 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 INDEXES • Hilcorp Alaska, LLC November 3, 2016 Cathy Foerster Chair, Commissioner Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501-3572 Re: AOGCC Docket No. OTH-15-036, Other Order 113 Decision and Order dated October 20, 2016 Dear Chair Foerster: 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 We are in receipt of Other Order 113 in Docket No. OTH-15-036 dated October 20, 2016. Hilcorp Alaska has elected not to pursue this matter further. Hilcorp Alaska herewith submits Check No. 82044848 dated October 28, 2016, in the amount of $30,000 in full payment of the fine imposed in Other Order 113. The Order concludes with the following direction: "In addition to the required monthly meter calibration reports, Hilcorp must commence at least daily health checks of the meter and provide the monthly average of the collected data. Average performance data that is outside operating limits must be addressed in the health check report. Hilcorp must maintain the daily health check reports to substantiate the monthly summary reports." Hilcorp Alaska's flow measurement personnel will be handling this additional requirement. They have been in contact with AOGCC staff to ensure compliance will be maintained going forward. Should you have any questions or comments regarding these mitigation steps, please contact Larry Greenstein (lgreenstein@hilcorp.com; (907) 777-8322). Sincerely, HILCORP ALASKA, LLC David Wilkins Senior Vice President Enclosure (Check) Hilcorp Alaska LLC 1083380 INVOICE INVOICE NUMBER I DATE 10/28/201 102616 10/26/2016 DOCKET 0TH -15-036, ORDER 113 Total: 0.00 30,000.00 0.00 30,000.00 NOV 0 3 2016 HILCORP ALASKA LLC AMEOY BANK Accounts Payable Disbursement PORTER, TEXAS P.O. Box 61229 35-105811131 Houston; Texas 77208-1229 (713) 209 2a5� 82044848 PAY Thirty Thousand Dollars and Zero Cents VOID AFTER 90 DAYS TO THE ORDER OF: ms] 10/28/2©16 *-****30,000.00 STATE OF ALASKA AOGCC 333 WEST 7TH AVE ANCHORAGE AK 99501-3539 0 BY IVP 11'8 20 4 48 4811' 1s 1 13 110 58E1: 11'044440 7 74811' Regg, James B (DOA) From: Wainwright, Irving <Irving.Wainwright@elster.com> Sent: Monday, February 22, 2016 10:32 AM IiF To: Regg, James B (DOA) Subject: ultrasonic meters Jim; I'm a field service tech that has been going to the Cook Inlet for many years. Instromet has meters for CIGGS, and others for what is now Hillcorp and Enstar. In the past we would do a meter site evaluation every couple of years and we were always reachable to help the field guys troubleshoot issues. Some of your issues with alarms have to do with "low flow" or "no flow" at all. Others, mainly the VoS deviation measured to AGA 10, is because most sites do not have a gas chromatograph live. If you would like to discuss some of these topics and reports you may have, then feel free to call me. We are in Texas. Regards Irving Wainwright IV Elster-Instromet 713-248-3463 Now part of Honeywell Elster Q -Sonic meters have become the common gas measurement technology for custody transfer in Alaska. My questions relate to the Uniguard Meter Health Check Reports that we see for some meters as a condition of approval for the use of these meters. For one meter in particular [QSonic 3 Series -III QQ I have observed numerous Alarms for out -of limit events over time, specifically the "Deviation Average for Velocity of Sound (VOS) Measured to AGA 10". Several technical papers related to ultrasonic meters indicate deviations between measured and calculated VOS is an indication of a fundamental meter problem. The documented alarms in the Uniguard Health Check Reports are recurring. Would like to better understand the Uniguard Meter Health Check Reports, the alarms that have been reported to us, and what actions these out -of -limit alarms should trigger. Irving Wainwright IV Elster-Instromet 713-248-3463 Now part of Honeywell 0 Regg. James B (DOA) From: Gina Bogart <gbogart@hilcorp.com> Sent: Sunday, February 14, 2016 10:05 AM To: Regg, James B (DOA) Cc: Cathlene Marshall Subject: 609 reports Attachments: 2016-2-14 WO CLOSED.xml.pdf Please see attached report. Thanks, 4 i4. f3oga++ Ullik-orp Alaska. LLC (907) 716-68215 C l ice (907) "198-11,89 Cell Ahcruate: Cathv marshall cmarshall@hilcorp.com (907) 2233-1381 office Ship orders to: Gina 13o,arl Vit% KGF 35350 Kald'Ornsl v Beach Rd Kenai, AK 996,1 1 Print Work Order -.Comprehensive Work Order Work Order 204389 NG FB CONT-INST MONTHLY METER CALIBRATION Scheduled Start 02/01/2016 FRANCES BARTOLOWITS Scheduled End Date 02/29/2016 Created By TSCOTT Status CLOSED (History) Created 01/11/2016 Reprint WO Type CAL Parent WO CAL Calibration Class MTRCAL Department NGF Priority 0 Ninilchik Gas Field - SKE Warranty PM Schedule A -NG -X -M-0015 Safety NG FB CONT-INST MONTHLY METER CALIBRATION Equipment Criticality FRANCES BARTOLOWITS Cost Code Assigned To KTRUX Reported By Problem Code Assigned By Multiple Equipment No Project Campaign Campaign Event Standard WO Date Started Date Completed 02/13/2016 Time Completed 00:00 Equipment Equipment NG-FB-MTR-609 METER; 609 FRANCES BARTOLOWITS SALES INTO KBPL NGF -FB NGF -FB FRANCES BARTOLOWITS Manufacturer Model Serial Number Location NGF -FB Reliability Ranking Reliabilit Ranking Index NGF -FB FRANCES BARTOLOWITS Reliability Ranking Score Y Equipment User Defined Fields Equipment Comments GBOGART (01/07/2016 13:551: General Maintenance Expectations: AOGCC requires that a calibration and Uniguard Ultrasonic Health Check report be done monthly for as long as this meter is flowing. Before suspending this work (deactivating the PM) due to a no flow condition, the flow measurement technician must ensure that the meter will not flow until the PM had been reactivated and a new cal/check has been performed. It must be clearly communicated in the field that this meter cannot flow until this work is done or the PM cannot be suspended. Monthly Maintenance Expectations: These tasks will be done every time this meter is calibrated for compliance with AOGCC regulations. 1) The calibration technician will commit to the calibration time/date and create an event on their Outlook calendar. The event category should be NOTIFICATIONS (blue). 2) The flow measurement technician will make the appropriate notifications for all blue calendar events. Minimum 24 hours notice is required. This is condition of approval to flow #3 from AOGCC. 3) The calibration will be performed and a Uniguard Ultrasonic Health Check report will be generated in the field and evaluated to ensure that the meter is functioning properly. 4) Calibration reports and Health Check report must be attached to the WO and closed within 1 day. 5) Immediately notify flow measurement technician. 02,11,:12016 09:55 HIL CORP ENERGY COMPANY Page 1 Print Work Order - Comprehensive Equipment NG-FB-MTR-609 METER; 609 FRANCES BARTOLOWITS SALES INTO KBPL Manufacturer Model Serial Number Location NGF -FB NGF -FB FRANCES BARTOLOWITS Reliability Ranking Reliability Ranking Score Reliability Ranking Index Equipment User Defined Fields Equipment Comments 6) The flow measurement technician will review the work order and email it to the AOGCC within 7 days of the cal. This is condition of approval to flow #4 from AOGCC. 7)A copy of the email will be saved. For more information on these requirements see document titled 2014_06_26 AOGCC Bartolowits CT Meter Approval_201503131526.pdf It is stored under the "documents" tab. e ' r LW/LL/AMS [02/13/2016 19:10]: Only alarm found on ultrasonic health check was Deviation of avg VOS measured to AGA10. This is a calculation comparison, has no impact on the performance of the meter. JMABREY[07/17/2014 08:43]: 1. Perform monthly Calibration 2. Create follow-up work order for any substandard conditions that were unresolved during calibration. 3. Close EAM Express and scan calibration results to work order 02/11/2016 09:55 HILCORP ENERGY COMPANY Page 2 7E W Print Work Order -Comprehensive Activity Work Order 204389 Activity 1 Trade Estimated Hours People Required Activity Start Date 02/01/2016 MTR-TECH METER TECH 2 1 Activity End Date 02/29/2016 Activity Schedule Booked Hours'< Employee/Crew Date Time On Time Off Total Time Type of Hours Route Route Inspection Route 02114/2016 09:55 HiLCORP ENERGY COMPANY Page 3 1 1 S C0 Meter Calibration Report Date 2/13/16 Well: Bart Sales ZMSN: 609 Meter S/N: MVX0415086 Site: Bart Pad Flowrun #: 1SP _ Range: 0-3000psig Address: 2 DP Range: 64.227 (pulse) Flow Element: Instromet OP Bore: NA Flow Element S/N: 06-0123-Q304068 Line ID: 3.818 temp found @ 60.50 deg. F. DP (in. H2O) SP (prig) APPLIED: AS FOUND: EFM N/A 0 1.23' AS FOUND: AS LEFT. SP: 752.602 751.415 Temp: U. 59 7a DP: 64.227 (pulse) 64.444 (pulse) Flowrate: 3734.309 3737.663 N/A Transmitter: AS FOUND: AS LEFT. SP: 751.96 751.22 Temp: 59.9 59.8 DP: NA NA Flowrate: temp found @ 60.50 deg. F. DP (in. H2O) SP (prig) APPLIED: AS FOUND: APPLIED: AS FOUND: N/A 0 1.23' N/A 750 751.37 N/A 1500 1501.47 N/A (as found) N/A (asfound) N/A (as found) N/A (as found) N/A (as found) N/A Comments 1 111,11,11,11,11-- .. .. . ....... Calibration Performed by: ILori Williams Calibration Witnessed by: Orifice Plate Check AS FOUND: AS LEFT Polished: (as found) Smooth: (as found) Rough: (as found) Bowed: (as found) Sharp: (asfound) Dull: (as found) Rounded: (as found) Nicked: (as found) Comments: 1 111,11,11,11,11-- .. .. . ....... Calibration Performed by: ILori Williams Calibration Witnessed by: Start Time: Friday, February 12, 2016 10:271 End Time: Friday, February 12, 2016 10:29:58 AM Test Engineer: Engineer Setting: Offline Log File: E:\Calibration Reports\20160212 HAK 609 Bart Sales Log.log Uniguard Version: 4.0.1.6 Uniguard Meter Health -check Report Meter Identification 1[ o. 1A[ � S Insfrome Instrument Type Q.Sonic-3 Series -III QL Meter Meter Serial Number 2065 Meter Software Version V5.21 Meter ID 06-0123-Q304068 Marathon Oil Company, 0020880, 901-42-03F288 Software Information Protocol Communication Port Baud Rate Parity Phone Number (Modem connection only) Meter Parameters Setup Parameter 1 0xC10A Setup Parameter 4 0x0007 Setup Parameter 2 Ox00AO Setup Parameter 5 OxO7AD Setup Parameter 3 0x814C Setup Parameter 6 Ox0000 Spoolpiece Parameters Spoolpiece Diameter 3.81800 in Density 2.560 Ib/ACF Dynamic Viscosity 1.0E-02 cP Path Length Path 1 11.41200 in Path Angle Path 1 60.00 ° Path Length Path 2 8.83600 in Path Angle Path 2 60.00 ° Path Length Path 3 11.44800 in Path Angle Path 3 60.00 ° V Module Parameters Lower Limit Speed Of Sound 1000.00 ft/s Timing Constant 1 610.00 Upper Limit Speed Of Sound 1600.00 ft/s Timing Constant 2 710.00 Lower Limit Velocity Of Gas -130.00 ft/s Timing Constant 3 0.00 Upper Limit Velocity Of Gas 130.00 ft/s Sample Rate 15.00 Pulse Length 180.00 Output Parameters Frequency Output Mode QLine - cfh Frequency Output Value Range 0.0 - 36000.0 cfh Frequency Range 0-5000 Meter Factor 500.000000 Pulses/ft' Page # 1. Generated at 2/13/2016, 7:03 PM Start Time: Friday, February 12, 2016 10:27:1 End Time: Friday, February 12, 2016 10:29:58 AM Test Engineer: Engineer Setting: Offline Log File: E:\Calibration Reports\20160212 HAK 609 Bart Sales Log.log Uniguard Version: 4.0.1.6 Profile Correction Axial Path Coefficient 1 3792.0000 Swirl Path Coefficient 1 3401.0000 Axial Path Coefficient 2 26.0000 Swirl Path Coefficient 2 66.0000 Axial Path Coefficient 3 0.7502 Swirl Path Coefficient 3 1.0037 Axial Path Coefficient 4 0.9711 Swirl Path Coefficient 4 1.0137 Axial Path Coefficient 5 0.0231 Swirl Path Coefficient 5 0.0204 Axial Path Coefficient 6 -3.3190 Swirl Path Coefficient 6 -3.2056 Adjust Factor Parameters Adjust Mode 0.0000 Substitution Parameter 1 Adjust Factor Forward 0.0000 0.0000 Adjust Factor Reverse 0.0000 0.0500 Algorithm Coefficient Forward 0 0.0000 Algorithm Coefficient Reverse 0 0.0000 Algorithm Coefficient Forward 1 0.0000 Algorithm Coefficient Reverse 1 0.0000 Algorithm Coefficient Forward 2 0.0000 Algorithm Coefficient Reverse 2 0.0000 stitution Parameters Substitution Mode 0.0000 Substitution Parameter 1 0.0000 Substitution Parameter 2 0.0000 Substitution Parameter 3 0.0000 Calibration Parameters Coefficient Row 1 0.1590 0.8410 0.0080 0.0000 Coefficient Row 2 0.0300 0.0200 0.0500 0.0000 Coefficient Row 3 0.0500 0.0060 0.0032 0.0719 Coefficient Row 4 0.0300 0.0000 0.0000 0.0000 Coefficient Row 5 0.0000 1.0000 0.0000 0.0000 Coefficient Row 6 1.0000 0.0000 0.0000 0.0000 Low Pass Filter Filter Mode Disabled Time Constant 0 Low Flow Cut Off Cut Off Mode Disabled Threshold 0.0000 ft/s Page # 2. Generated at 2/13/2016, 7:03 PM Start Time: Friday, February 12, 2016 10:27: End Time: Friday, February 12, 2016 10:29:58 AM Test Engineer: Engineer Setting: Offline Log File: E:\Calibration Reports\20160212 HAK 609 Bart Sales Log.log Uniguard Version: 4.0.1.6 Performance ester Instromet Velocity of Sound Limit Measured Value Status Number of acquired samples Velocity of Sound 14 1396.1 ft/s Percentage accepted pulses Path 1 20.00% 100% PASS Percentage accepted pulses Path 2 20.00% 100% PASS Percentage accepted pulses Path 3 20.00% 100% PASS Velocity of Sound Velocity of Gas Limit Measured. Value - Status Velocity of Sound Profile Factor (SW/AX) 1396.1 ft/s AGA10 Calculted 1389.59 ft/s Deviation VOS Average to Path 1 0.20% 0% 0.99995 PASS Deviation VOS Average to Path 2 0.20% 0% 1.00003 PASS Deviation VOS Average to Path 3 0.20% 0% 1.00002 PASS Deviation Avg VOS Measured to AGA10 0.20% 0.47% 1.00468 ALARM Velocity of Gas Profile Factor Limit' Measured Value Status Velocity of Gas Profile Factor (SW/AX) 9.35 ft/s Axial VOG Ratio Value 1.0456 Swirl VOG Ratio Value 1 0.9950 Swirl VOG Ratio Value 2 0.9950 Deviation VOG Average to Path 1 3.00% 1.66% 0.97852 PASS Deviation VOG Average to Path 2 3.00% 0.43% 1.04110 PASS Deviation VOG Average to Path 3 3.00% 0.78% 0.98723 PASS Profile Factor Swirl Angle Limit . Measured Value Status Swirl Angle 5.00 ° 0.00 ° PASS Asymmetry Limit Measured Value Status N/A - Page # 3. Generated at 2/13/2016, 7:03 PM Llreii Masuined' Value Status Profile Factor Value 1.0456 Profile Factor (AX/SW) 2.00% 1.31 % 1.05926 PASS Profile Factor (SW/AX) 2.00% 1.28% 0.94415 PASS Swirl Angle Limit . Measured Value Status Swirl Angle 5.00 ° 0.00 ° PASS Asymmetry Limit Measured Value Status N/A - Page # 3. Generated at 2/13/2016, 7:03 PM Start Time: Friday, February 12, 2016 10:27:0 End Time: Friday, February 12, 2016 10:29:58 AM Test Engineer: Engineer Setting: Offline Log File: E:\Calibration Reports\20160212 HAK 609 Bart Sales Log.log Uniguard Version: 4.0.1.6 Axial Path Level Ratio Oe-. � elsier Instromet Minimum Maximum i Measured Status N/A - - - - Swirl Path Level Ratio Minimtnn Maximum Measumd .. Status 1A/3A 0.50 2.00 0.86 PASS 1 B/3B 0.50 2.00 0.85 PASS Elevated Level Limit/Level Ratio Path 1A Minimum Maximum Measured' Status Path 1A - 40000 1366 PASS Path 1 B - 40000 1346 PASS Path 2A - 40000 1231 PASS Path 2B - 40000 1232 PASS Path 3A - 40000 1589 PASS Path 3B - 40000 1583 PASS Limit/Level Ratio Path 1A Minims Mem 2.00 - M rotistatus 47.65 PASS Path 1 B 2.00 - 48.33 PASS Path 2A 2.00 - 52.83 PASS Path 2B 2.00 - 52.80 PASS Path 3A 2.00 - 40.94 PASS Path 3B 2.00 - 41.10 PASS Level A vs. B Mismatch Minim. Meximunt iYleasureci Statue Path 1 0.50 2.00 1.01 PASS Path 2 0.50 2.00 1.00 PASS Path 3 0.50 2.00 1.00 PASS Page # 4. Generated at 2/13/2016, 7:03 PM Start Time: Friday, February 12, 2016 10:27: End Time: Friday, February 12, 2016 10:29:58 AM Test Engineer: Engineer Setting: Offline Log File: E:\Calibration Reports\20160212 HAK 609 Bart Sales Log.log Uniguard Version: 4.0.1.6 Path 1 Path 2 Path 3 a USM Min. Path Performance [%] 2 1.5 1 Path 1 Path 2 Path 3 USM — Max. Min. Path Velocitv Ratios 1A/3A 16/38 a USM—Max. Min. AGC Ratio - Swirl A/B, Axial A/B i 0 0.1 0.2 0.3 OA 0.5 0.6 0.7 0.8 0.9 1 @ USM—Max. -- Min. Profile Factor [Ax/Sw] Asymmetry Oe -e 0 0 *:0-L41-144 Instromet Path 1 Path 2 Path 3 a USM — Max. Min. VOS Fingerprint 1A 1B 2A 2B 3A 38 @ USM Min. Path AGC Ratio 0 0.1 0.2 0.3 0.4 a USM—Max. VOS Ratio Meas. To AGA10 [%] 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 S USM—Max. Min. Profile Factor [Sw/Ax] -5 -4 -3 -2 -1 0 1 2 3 4 5 USM—Max.—Max. Swirl Angle [°] Page # 5. Generated at 2/13/2016, 7:03 PM Start Time: Friday, February 12, 2016 10:27: End Time: Friday, February 12, 2016 10:29:58 AM Test Engineer: Engineer Setting: Offline Log File: E:\Calibration Reports\20160212 HAK 609 Bart Sales Log.log Uniguard Version: 4.0.1.6 1.4 1.2 1 0.8 0.6 IDA 0.2 0 0 *0 0• • I ester Instromet 1400 1399 1398 1397 1396 1395 1394 1393 0 10 20 30 40 50 60 70 80 90 100 110 120 Path 1 — Path 2 — Path 3 — Max, Turbulence 10 20 30 40 50 60 70 80 90 100 110 120 — Path 1 — Path 2 — Path 3 — Max. Min. Veloity Of Sound 0 10 20 30 40 50 60 70 80 90 100 110 120 — Path 1 — Path 2 — Path 3 — Max. Min. Velocity Of Gas Page # 6. Generated at 2/13/2016, 7:03 PM Start Time: Friday, February 12, 2016 10:27:10 End Time: Friday, February 12, 2016 10:29:58 AM Test Engineer: Engineer Setting: Offline Log File: E:\Calibration Reports\20160212 HAK 609 Bart Sales Log.log Uniguard Version: 4.0.1.6 Gas Composition v S Instr©met t 0 "{-n.v,,._ y� (do- •1 t., �. -. .m C 1 �Cw...,,'a ,,,. x.Pa 'n 1.., C1 Methane 99.1220 N2 Nitrogen 0.2150 CO2 Carbon Dioxide 0.4290 C2 Ethane 0.1740 C3 Propane 0.0510 H2O Water 0.0000 H2S Hydrogen Sulphide 0.0000 H2 Hydrogen 0.0000 CO Carbon Monoxide 0.0000 02 Oxygen 0.0000 iC4 i -Butane 0.0000 nC4 n -Butane 0.0000 iC5 i -Pentane 0.0000 nC5 n -Pentane 0.0000 neoC5 neo -Pentane 0.0000 nC6 n -Hexane 0.0090 nC7 n-Heptane 0.0000 nC8 n -Octane 0.0000 nC9 n-Nonane 0.0000 nC10 n-Decane 0.0000 He Helium 0.0000 A4 Argon 0.0000 Sum 100.0000 Process Conditions PT Pressure 752.602 Psi g TT Temperature 56.615 °F Base Conditions Pb Base Pressure 14.650 Psi g Tb Base Temperature 60.000 °F Tc Comb. Temperature 60.000 °F AGA10 Velocity of Sound 1389.588 fUs AGA8 Line Compressibility 0.897 Line Density 2.505 Ib/ACF Calculated Viscosity Calculated Viscosity 1.2E-02 cP Notes Notes Page # 7. Generated at 2/13/2016, 7:03 PM Regg, James B (DOA) From: Herrera, Matthew F (DOA)�``I I i Sent: Friday, January 29, 2016 6:30 PM l To: Regg, James B (DOA) Subject: FW: Meter Cal Attachments: 20151204 HAK 609 Bart Pad Cal AOGCC witness.pdf Jim this is the cal report from Lori with IISCO no thumb drive was given to me at any time during a meter calibration with Hilcorp. Also I will be in to the office on Monday 2/1 afternoon to return cell phones MIR and laptop. I will be here in Anchorage for the entire two weeks prior to next slope hitch on the 15th Feb through the 22nd. If you need me to catch any of Gina's calibrations I would be happy to do so or anything else. I won't be heading South until one week after slope hitch Feb, 28th through March 6, up to slope on March, 7 From: Lori Williams[mailto:l.williams(Diiscoak.com] Sent: Wednesday, December 09, 2015 8:56 AM To: Herrera, Matthew F (DOA) Subject: RE: Meter Cal Matt, Here is the calibration report from Bart pad. Please let me know if you have any questions. Thank you, Lori Williams Field Services Director IISC.X) 907-283-4230 ( )f-fice 907-398-8852 Cell Lwilliams@iiscoak.com www.iiscoal:z.com NOTICE: The materials in this electronic mail transmission (including all attachments) are private and confidential and are the property of the sender. The information contained in the material is privileged and is intended only for the use of the named addressee(s). If you are not the intended addressee, be advised that any unauthorized disclosure, copying, distribution or the taking of any action in reliance on the contents of this material is strictly prohibited. If you have received this email in error, please immediately notify the sender at I.williams .iiscoak.com and thereafter, destroy it and remove it from your computer immediately. From: Herrera, Matthew F (DOA) [ma iIto: matthew.herrera@alaska.gov] Sent: Tuesday, December 8, 2015 6:55 PM To: Lori Williams Subject: Re: Meter Cal r Cool thanks Sent from my iPhone On Dec 8, 2015, at 6:43 PM, Lori Williams <I.williams@iiscoak.com> wrote: Matt, I will send it to you first thing in the morning. Thank you, Lori Williams Field Services Director IISCO 907-283-4230 Office 907-398-8852 Cell I.williams@iiscoak.com www.iiscoak.com • CONFIDENTIALITY NOTICE: The materials in this electronic mail transmission (including all attachments) are private and confidential and are the property of the sender. The information contained in the material is privileged and is intended only for the use of the named addressee(s). If you are not the intended addressee, be advised that any unauthorized disclosure, copying, distribution or the taking of any action in reliance on the contents of this material is strictly prohibited. If you have received this email in error, please immediately notify the sender atl.williams@iiscoak.com and thereafter, destroy it and remove it from your computer immediately. On Dec 8, 2015, at 6:37 PM, Herrera, Matthew F (DOA) <matthew.herrera@alaska.gov> wrote: Lori You wouldn't happen to have finished the calibration report for the Bart meter do you Matt Herrera Petroleum Inspector Alaska Oil & Gas Conservation Commission Matthew,herrera@alaska.gov 907-659-2714 (Office Slope) 907-448-1227 (Cell Slope) 907-953-7966 (Cell) I if 0 0 11SC0 Meter Calibration Report Well: Bart Sales Meter S/N: MVX0415086 Flowrun #: 1 Address: 2 Flow Element: Instromet Flow Element S/N: 06-0123-Q304068 ZMSN: 609 Site: Bart Pad SP Range: 0-3000psig DP Range: 753.083 753.195 OP Bore: NA Line ID: 3.818 Temp found @ 61.87 deg. F. DP (in. H2O) APPLIED: AS FOUND: N/A N/A _. N/A N/A N/A N/A N/A N/A N/A Comments Date 12/4/15 SP (psig) APPLIED: AS FOUND: 0 1.22 750 751.35 1500 1501.36 EFM: AS FOUND: AS LEFT AS FOUND: AS LEFT. SP: 753.083 753.195 Temp: Ula61._564 Bowed: DP: 79.488 (PULSE) 79.339 (PULSE) Flowrate: 4598.516 4595.962 (asfound) Transmitter: (as found) Comments: AS FOUND: AS LEFT., SP: 753.20 752.71 Temp: 61.5 61.5 DP: NA NA Flowrate: Temp found @ 61.87 deg. F. DP (in. H2O) APPLIED: AS FOUND: N/A N/A _. N/A N/A N/A N/A N/A N/A N/A Comments Date 12/4/15 SP (psig) APPLIED: AS FOUND: 0 1.22 750 751.35 1500 1501.36 Calibration Performed by: Lori Williams Calibration Witnessed by: Matt Herrera, AOGCC Orifice PlateCheck AS FOUND: AS LEFT Polished: (asfound) Smooth: (asfound) Rough: (asfound) Bowed: (asfound) Sharp: (asfound) Dull: (asfound) Rounded: (asfound) Nicked: (as found) Comments: Calibration Performed by: Lori Williams Calibration Witnessed by: Matt Herrera, AOGCC Regg, James B (DOA) From: Cathlene Marshall <cmarshall@hilcorp.com> Sent: Thursday, January 07, 2016 9:14 AM�r �� i`1 ►G, To: Regg, James B (DOA) Cc: Larry Greenstein; Chad Helgeson Subject: RE: Bartolowitz Pad Calibration Reports & Ultrasonic Meter Health Logs Attachments: 2014_09 609 Bart Pad Health Check.pdf; 2015_10 609 Bart Pad Health Check.pdf; 2015_ 02 609 Bart Pad Health Check.pdf; 2014_11609 Bart Pad Health Check.pdf Mr. Regg, Attached are the missing Health Check Reports. Hilcorp Alaska, LLC Kenai Gas Field ("907) 283-1384 office (90 7) 252-1657 cell From: Regg, James B (DOA) [mailto:jim.regg alaska.gov] Sent: Wednesday, January 06, 2016 4:46 PM To: Cathlene Marshall Cc: Larry Greenstein; Chad Helgeson Subject: RE: Bartolowitz Pad Calibration Reports & Ultrasonic Meter Health Logs Missing health check reports: - September 2014 - November 2014 - February 2015 - October 2015 Missing meter calibration report: - August 2014. Jim Regg Supervisor, Inspections AOGCC 333 W. 7th Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. if you are an unintended recipient of this e-mail, please delete it, without first saving or forwardTrfg it, and, so that the AOGCC is aware of the mistake�Rsending it to you, contact Jim Regg at 907- 793-1236 or iim.regg@alaska.gov_. From: Cathlene Marshall [mailto:cmarshall@hilcorp.com] Sent: Monday, January 04, 2016 2:43 PM To: Regg, James B (DOA) Cc: Larry Greenstein; Chad Helgeson Subject: Bartolowitz Pad Calibration Reports & Ultrasonic Meter Health Logs Mr. Regg, Attached are the Calibration Reports and Ultrasonic Meter Health Logs for the Bartolowits Sales Meter 609. The 609 Meter has been witnessed by an AOGCC inspector 3 times since its approval. After each of these witnessed calibrations, documentation was given directly to the inspector. dat'A� wapvk// II Hilcorp Alaska, LLC Kenai Gas Field (907) 283-1384 office (907) 252-1657 cell Regg, James B (DOA) From: Sent: To: Cc: Subject: Missing health check reports: - September 2014 - November 2014 - February 2015 - October 2015 Missing meter calibration report: - August 2014. Jim Regg Supervisor, Inspections AOGCC 333 W. 7th Ave, Suite 100 Anchorage, AK 99501 907-793-1236 • • Regg, James B (DOA) Wednesday, January 06, 2016 4:46 PM 'Cathlene Marshall' Larry Greenstein; Chad Helgeson RE: Bartolowitz Pad Calibration Reports & Ultrasonic Meter Health Logs CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or iim.regg@alaska.gov. From: Cathlene Marshall[mailto:cmarshall(�-Ohilcorp.com] Sent: Monday, January 04, 2016 2:43 PM To: Regg, James B (DOA) Cc: Larry Greenstein; Chad Helgeson Subject: Bartolowitz Pad Calibration Reports & Ultrasonic Meter Health Logs Mr. Regg, Attached are the Calibration Reports and Ultrasonic Meter Health Logs for the Bartolowits Sales Meter 609. The 609 Meter has been witnessed by an AOGCC inspector 3 times since its approval. After each of these witnessed calibrations, documentation was given directly to the inspector. Cat,( #&VAQ11 t! Hilcorp Alaska, LLC Kenai Gas Field (907) 283-1384 office (907) 252-1657 cell Regg, James B (DOA) From: Cathlene Marshall <cmarshall@hilcorp.com> Sent: Monday, January 04, 2016 2:43 PM, 11+ jIlp To: Regg, James B (DOA) -lei 4 Cc: Larry Greenstein; Chad Helgeson Subject: Bartolowitz Pad Calibration Reports & Ultrasonic Meter Health Logs Attachments: 2015_Bart_609 work orders with Calbration Reports.pdf; 2014_Bart_609 work orders with Calibration Reports.pdf; 609 Bart Health Check Logs.zip Mr. Regg, Attached are the Calibration Reports and Ultrasonic Meter Health Logs for the Bartolowits Sales Meter 609. The 609 Meter has been witnessed by an AOGCC inspector 3 times since its approval. After each of these witnessed calibrations, documentation was given directly to the inspector. at,� /yang II Hilcorp Alaska, LLC Kenai Gas Field (907) 283-1384 office (90 7) 252-1657 cell L- vc;t oP A�+t t c Cef w4-> p -o -v ac) d b I ( + i � �-' Panels >`fokler View ,.; 609 Bart Health Check Logs. zip 609 Bart Health Check Logs 11111 1 609 Bart Health C... X _.. Paha _ File ... _. Date and time File type Compr, size 2014_06 609 But Pad Health Check.pdf 12723/2015 9:03:28 AM Adobe Acrob... 198,041 '�-'. 2014_10 609 But Pad Health Check.pdf 1013/2014 10:48:30 AM Adobe Acrob... 195,837 2014_12 609 But Pad Health Check.Pdf 1/412016 2:39:25 PM Adobe Acrob.,. 183.,215 2015_0 i 609 Bart Pad Health Check.pdf 1/672015 8:50:14 AM Adobe Acrob... 195,940 2015_ 03609 Bart Pad Health Che&pdf 12/23,20158: 57:.52 AM Adobe Aaoto 193,722 2015_04 609 But Pad Health Check.pdf 12/231'2015 9:07:34 AM Adobe Acrob... 154,098 ,+- 2015_05 609 Bart Pad Health Check.pdf 515/'2015 1:15:34 PM Adobe Acrob... 195,445 2015_06 609 But Pad Health Chedk.pdf if4;2016 2:33:04 PM Adobe Acrob... 181,554 �=.2015_07609 But Pad Health Ctaedk.pdf 114120162 35:42 PM Adobe Aaob... 182,121 2015_08 609 But Pad Health Check.pdf 12123/2015 8:54:04 AM Adobe Acrob... 192,419 2015_ 09609 But Pad Health Check.pdf 12123f"20158:29:46AM Adobe Acrob... 192,267 }=, 2015_11609 Bart Pad Health Check.pdf 12123/2015 7:46:04 AM Adobe Akrob... 146,965 '71',2015_12 609 But Pad Health Check.pdf 12123/2015 7:57:20 AM Adobe Acrob... 189,577 z Th xrbs..db 1/4/71116 2:40:50 PM Data Base Tile 67,816 zc�t4 ��- 4 +—�t�ti�zi Zi715 Ong. size Rabo Paha CRC Attrbutes Method 321,969. 38% 609 Bart Heal... 262A3212 A... DEFLATE 319,935 39% 609 But Heal... SDSOFA-10 A DEFLATE 347,492 40% 609 Bart Hed... E 1A97AC9 A DEFLATE 319,640 39% 609 But Heal... 604742E6 A. DEFLATE 317,223 39% 609 Bart Heal... 49F20E66 A DEFLATE 280,375 45% 609 But Heal... 33EF3A4A A DEFLATE 319,211 39% 609 But Heal... 34CBEFE3 A DEFLATE 305,572 41% 609 Bart Heal... C98BB2E2 A DEFLATE 306,782 41% 609 Bart Heal... BSF83EA4 A DEFLATE 315,714 39% 609 Bart Heal... FA1A2933 A DEFLATE 315,051 39% 609 Bart Heal... 0587DB51 A DEFLATE 271,858 46% 609 But Heal... 41477A2C A DEFLATE 313,554 40% 609 Bart Heal... F030833D A DEFLATE 74,752 9% 609 Bart Heal... DAA5A.728 AH55 DEFLATE �C�C�CC_ lc.)I"1�1Cs�Q iz/4 %l5 0 ge-- k\ �A' �O 1 0 • • RECEIVED SAN 2 8 2% Hilcorp Alaska, LLC AOGCC Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 100 Anchorage, AK 99503 January 28, 2016 Cathy P. Foerster Chair, Commissioner Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, AK 99501-3572 Re: Docket Number: OTH-15-036 Missing Meter Calibration Reports Ninilchik Bartolowits Pad Dear Chair Foerster: Following the informal review last week and at Mr. Regg's request, we write to provide additional information concerning our review of the meter calibration reports which were not filed with the AOGCC pursuant to the approval letter dated June 26, 2014 ("Approval"). The Approval imposed several conditions, one of which required both monthly meter calibration and health checks, and the filing of those reports. Hilcorp Alaska performed required calibrations and health checks.' We do not contest that we failed to file the calibration and health checks with the Commission as required (except during the two months in which an inspector was present and the calibration results were provided to the inspector on a thumb drive). We also believe that a proper consideration of the factors regarding the size of the penalty would result in a substantially smaller penalty. A. Corrective Actions Several processes have been changed in Hilcorp Alaska to ensure that all requirements for Bartolowits Sales Meter 609 meet and comply with the AOGCC conditions of Approval going forward. Attached you will find a copy of the current monthly Work Order (WO) for the Calibration of Meter 609 from the Enterprise Asset Management (EAM) system, which Hilcorp Alaska uses to maintain its Alaska infrastructure. EAM automatically generates a WO for Meter 609 monthly. The WO for Meter 609 now includes the following actions to ensure Hilcorp meets the AOGCC conditions of approval: ' A health check was performed during August 2014. A calibration was not performed in that month but was performed in all other months. Cathy P. Foerster Docket Number: OTH-15-036 January 28, 2015 Page 2 of 8 • Meter calibrations will be scheduled in blue for NOTIFICATIONS required. • A minimum of 24 hours' notice will be provided to the AOGCC for witness of meter calibration. • The pressure and temperature calibration will be performed and a meter Health Check Report will be generated in the field and evaluated to ensure the meter is functioning properly on the same day with the well flowing. (Historically the Health Check Reports were collected during the monthly EFM downloads, usually occurring the first several days of the month and the calibration would occur later in the month. Now these will both be done on the same day.) • The flow measurement technician will review the reports and email to AOGCC within seven days of the calibrations. Once all these activities are completed, the WO will be closed out. The process will be repeated the following month. In addition to using EAM to ensure meter compliance, Hilcorp is building a training module for operators to allow them to understand flow measurement practices, compliance requirements, and identify operational issues. This training will be rolled out in Alaska around the end of February 2016. B. Meter Health Checks At the informal review, Commission staff noted that all the required meter health checks were performed. Concern was expressed about alarms that were listed in some of the monthly meter health check reports. It is important to understand that the Meter Health Check Reports are snap shots (2-3 min of time) of the performance of the meter. These are not totals or averages of results of the meter over a longer period of time. Four of the meter health reports collected over 18 months had no Alarms associated with the meter (October 2014, January, May and December of 2015). There were five months when the Meter Health Check Reports indicated alarms that are consistent when there was no gas flow through the meter (December 2014, April, June, July and November 2015). There was no gas flow during these Meter Health Checks. (Meter Health checks in the future will be done when the well is flowing during the month. If the meter is shut- in for the whole month it will be noted in the report submitted to the AOGCC. There are eight months when there was one alarm (Deviation Average VOS measured to AGA - 10) associated with the meter. This alarm is the average Velocity of Sound (VOS) (across all paths) compared to AGA -10 calculated VOS from the programmed gas chromatography. This alarm can indicate a drift in either the meter or the gas analysis and is typically used to trend drift over a period of time. The trends from Meter 609 do not indicate a consistent drift from the normal range. The table below shows the range of alarms for the dates of the meter. 0 Cathy P. Foerster Docket Number: OTH-15-036 January 28, 2015 Page 3 of 8 • Month Specific Alarm Value Alarm Limit August 2014 Deviation Avg VOS measured to AGA -10 1.36% 0.20% September 2014 Deviation Avg VOS measured to AGA -10 0.28% 0.20% November 2014 Deviation Avg VOS measured to AGA -10 2.95% 0.20% February 2015 Deviation Avg VOS measured to AGA -10 0.71% 0.20% March 2015 Deviation Avg VOS measured to AGA -10 1.88% 0.20% August 2015 Deviation Avg VOS measured to AGA -10 1.02% 0.20% September 2015 Deviation Avg VOS measured to AGA -10 1.26% 0.20% October 2015 Deviation Avg VOS measured to AGA -10 0.84% 0.20% The graph below plots the data for all the reports. The graph shows that there is no drift. Average Percent Deviation by Month 3.50% 3.00% 2.50% C O 2.00% d D a.+ 1.50% C N V 1i 1.00% 0.50% 0.00% a a qe v v v v in Ln Ln Ln Un Ln Ln Ln vi Vn Ln u� GJ C � = -0 -0 -0 M M iJ Q C 3 M M M M E o Q N U E E Cl OJ E Q W U E W E v O 0 > U O N Z N lL Q O Z N vvi in Cathy P. Foerster Docket Number: OTH-15-036 January 28, 2015 Page 4 of 8 The first meter health report (7/28/14) had two errors for the same thing. They were profile factor errors at about two times the alarm limit. The health check report collected three days later (8/1/14) did not have those alarms. C. Review of the Civil Penalty Factors The enabling statute authorizes the Commission to impose fines for violations of its regulations, orders, and approvals. AS 31.05.150(g) sets forth the appropriate factors: (g) In determining the amount of a penalty assessed under (a) of this section, the commission shall consider (1) the extent to which the person committing the violation was acting in good faith in attempting to comply; (2) the extent to which the person committing the violation acted in a wilful or knowing manner; (3) the extent and seriousness of the violation and the actual or potential threat to public health or the environment; (4) the injury to the public resulting from the violation; (5) the benefits derived by the person committing the violation from the violation; (6) the history of compliance or noncompliance by the person committing the violation with the provisions of this chapter, the regulations adopted under this chapter, and the orders, stipulations, or terms of permits issued by the commission; (7) the need to deter similar behavior by the person committing the violation and others similarly situated at the time of the violation or in the future; (8) the effort made by the person committing the violation to correct the violation and prevent future violations; and (9) other factors considered relevant to the assessment that are adopted by the commission in regulation. A review of each of these factors indicates that the proposed penalty is inappropriate. (1) the extent to which the person committing the violation was acting in good faith in attempting to comply The evidence shows that Hilcorp Alaska was acting in good faith in its attempt to comply with the conditions of approval. Hilcorp Alaska performed the health check reports each month. With the sole exception of August 2014, Hilcorp Alaska also performed the meter calibrations. The July 2014 calibration was performed on July 26, and the health check was performed on July 28, just a few days before August. We know that in at least two of the monthly calibrations (July 2014 and August 2015), a Commission inspector was present and was provided the results on a thumb drive. In addition, on August 1, 2014, Meter Specialist Gina Bogart wrote an email to Commission staff, stating the following: Cathy P. Foerster Docket Number: OTH-15-036 January 28, 2015 Page 5 of 8 Attached is the Instromet Health Check report from 7-28-14. 1 have reviewed the conditions of approval for this meter with my alternate who was on shift during the commissioning. I understand that this is the last submission necessary for compliance. If you need anything else, please don't hesitate to contact me. In addition, I am attaching a more recent and representative gas analysis report which will be updated in the EFM today. Gina Bogart Admittedly Ms. Bogart had misread the conditions of approval. But just as clearly, she was informing Commission staff that her (incorrect) understanding was that "this is the last submission necessary for compliance." Further, she invited Commission staff to let her know if anything else was needed. A reply directing Ms. Bogart's attention to the monthly reporting condition would have resolved the matter at its beginning. A phone call at any point in time would have resulted in immediate compliance. These facts indicate that Hilcorp Alaska was acting in good faith in attempting to comply with the conditions of approval. (2) the extent to which the person committing the violation acted in a wilful or knowing manner The fact that the monthly calibrations were performed, that in two instances when the inspector was present the results were provided by thumb drive, and that Ms. Bogart had informed the Commission staff of her understanding and asking if anything else was required are sufficient evidence that there was no willful or knowing violation. (3) the extent and seriousness of the violation and the actual or potential threat to public health or the environment Hilcorp Alaska takes its obligation to comply with every regulatory agency's authorized requirements very seriously, and we admit our error in this instance. But in the panoply of government regulations, the failure to file meter calibration reports each month does not "threat[en] the public health or the environment." The work was performed, and the reports have now been filed. This meter is one of 31 gas custody transfer meters and 14 liquid meters in Cook Inlet, and 1 gas custody transfer meter and 9 liquid meters on the North Slope, owned and operated by Hilcorp Alaska in the State of Alaska, and is one of only three meters for which this kind of reporting is required. (4) the injury to the public resulting from the violation The injury to the public, if any, is negligible. It would be substantially different if the meter had not been calibrated and the health check not performed, as that might indicate that Hilcorp Alaska was either not interested in making sure that the gas flow was Cathy P. Foerster Docket Number: OTH-15-036 January 28, 2015 Page 6 of 8 measured correctly or hoped or knew that the meter was favoring Hilcorp Alaska. But the work was performed, and the reports do not support either hypothetical. The discussion regarding the meter alarms demonstrates that the meter was operating appropriately and there was no measurement drift over time. Gas flowing from the Bart Pad was being measured appropriately. (5) the benefits derived by the person committing the violation from the violation Hilcorp Alaska derived no benefit from failing to file the monthly reports with the Commission. Hilcorp Alaska expended the funds to perform the monthly calibrations and health checks, and thus saved no time or cost in failing to make the reports to the Commission. The meter calibrations and health check reports demonstrated that the meter was correctly calibrated and operating properly during the period in question. (6) the history of compliance or noncompliance by the person committing the violation with the provisions of this chapter, the regulations adopted under this chapter, and the orders, stipulations, or terms of permits issued by the commission The Commission's notice of proposed enforcement lists a number of alleged violations of AOGCC regulations or authorizations, and includes the following: "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."2 The noncompliant activities listed in the notice are each the subject of ongoing adjudication by the Commission. None has reached its conclusion. It is unfair to use unadjudicated matters as a basis for an enhanced penalty. Increasing the severity of a fine based on unresolved allegations is a practice inconsistent with due process. In each instance of noncompliance, Hilcorp Alaska has expeditiously undertaken corrective action, and in many cases prepared training modules specifically related to the problem. This behavior does not evince a desire not to comply, nor even a lack of care in undertaking compliance. Hilcorp Alaska has often reached out to the Commission, seeking guidance on compliance issues. In many cases, the Commission has explicitly declined to provide any guidance on ambiguous requirements. (7) the need to deter similar behavior by the person committing the violation and others similarly situated at the time of the violation or in the future s This sentence is included in all AOGCC notices of proposed enforcement issued to Hilcorp during the fall and winter of 2015, regardless of the nature of the alleged violation and its relationship, if any, to other alleged violations. Cathy P. Foerster Docket Number: OTH-15-036 January 28, 2015 Page 7 of 8 The noncompliance in this case was the failure to report to the Commission meter calibrations and health check reports which actually were performed. Hilcorp Alaska acknowledges that the requirement was included as a condition of approval and should have been met. Given Ms. Bogart's statement that she understood that no further action was required to comply, and her invitation to Commission staff to tell her if they needed anything else, Hilcorp Alaska submits that there is minimal need, if any, to impose a penalty to deter Hilcorp Alaska or others from such noncompliance. (8) the effort made by the person committing the violation to correct the violation and prevent future violations Hilcorp Alaska has now filed the required monthly reports with the exception of the report due for August 2014, the sole month in which the meter calibration was not performed. In addition, as set forth in Section A of this letter, Hilcorp Alaska has established a procedure for assuring that the reports are fled with the AOGCC on a monthly basis. (9) other factors considered relevant to the assessment that are adopted by the commission in regulation. The Commission has not adopted regulations which state other factors than those set out in AS 31.05.150(a). D. Proposed Enforcement and Civil Penalty As noted above, this failure arose from not understanding and implementing the approval condition of monthly reporting. There was an early opportunity to correct this misunderstanding. The work was performed, Hilcorp Alaska did not gain anything from the noncompliance, and there has been no harm to the public health or environment. The failure to file in each successive month is not of the same magnitude as the initial failure to set up the monthly reporting procedure. Accordingly, Hilcorp Alaska proposes that the Commission impose a civil penalty of $17,500, calculated as follows: Component Amount Extension 1. Initial failure to file report with the AOGCC and set up $5,000 $5,000 monthly reporting process 2. Failure to calibrate meter in August 2014 $5,000 $5,000 3. Subsequent monthly failure to file report with AOGCC (17 months minus the 2 months for which data was provided $500 x 15 $7,500 AOGCC Inspector on a thumb drive) Total Proposed Fine $17,500 Cathy P. Foerster Docket Number: OTH-15-036 January 28, 2015 Page 8 of 8 Should you have any additional questions, please contact Chad Helgeson (777-8405). Sincerely, HILCORP ALASKA, LLC David Wilkins Senior Vice President Hilcorp Alaska, LLC Attachments: EAM Work Order for Bartolowits Meter 609 cc: Jim Regg - AOGCC Chet Starkel - Hilcorp Chad Helgeson - Hilcorp Larry Greenstein - Hilcorp Marc Bond - Hilcorp 0 Print Work Order - Comprehensive • GBOGART [01/07/2016 13:551: General Maintenance Expectations: AOGCC requires that a calibration and Uniguard Ultrasonic Health Check report be done monthly for as long as this meter is flowing. Before suspending this work (deactivating the PM) due to a no flow condition, the flow measurement technician must ensure that the meter will not flow until the PM had been reactivated and a new cal/check has been performed. It must be clearly communicated in the field that this meter cannot flow until this work is done or the PM cannot be suspended. Monthly Maintenance Expectations: These tasks will be done every time this meter is calibrated for compliance with AOGCC regulations. 1) The calibration technician will commit to the calibration time/date and create an event on their Outlook calendar. The event category should be NOTIFICATIONS (blue). 2) The flow measurement technician will make the appropriate notifications for all blue calendar events. Minimum 24 hours notice is required. This is condition of approval to flow #3 from AOGCC. 3) The calibration will be performed and a Uniguard Ultrasonic Health Check report will be generated in the field and evaluated to ensure that the meter is functioning properly. 4) Calibration reports and Health Check report must be attached to the WO and closed within 1 day. 5) Immediately notify flow measurement technician. 6) The flow measurement technician will review the work order and email it to the AOGCC within 7 days of the cal. This is condition of approval to flow #4 from AOGCC. 01/19/2016 10:57 HILCORP ENERGY COMPANY Page 1 Work Order Work Order 204389 NG FB CONT-INST MONTHLY METER CALIBRATION Scheduled Start 02/01/2016 FRANCES BARTOLOWITS Scheduled End Date 03/01/2016 Created By TSCOTT Status WO (Open) Created 01/11/2016 WO Type CAL Parent WO CAL Calibration Class MTRCAL Department NGF Priority 0 Ninilchik Gas Field - SKE Warranty PM Schedule A -NG -X -M-0015 Safety NG FB CONT-INST MONTHLY METER CALIBRATION Equipment Criticality FRANCES BARTOLOWITS Cost Code Assigned To KTRUX Reported By Problem Code Assigned By Multiple Equipment No Project Campaign Campaign Event Standard WO Date Started Date Completed Time Completed Equipment Equipment NG-FB-MTR-609 METER; 609 FRANCES BARTOLOWITS SALES INTO KBPL NGF -FB NGF -FB FRANCES BARTOLOWITS Manufacturer Model Serial Number Location NGF -FB NGF -FB FRANCES BARTOLOWITS Reliability Ranking Reliability Ranking Score Reliability Ranking Index Equipment Comments GBOGART [01/07/2016 13:551: General Maintenance Expectations: AOGCC requires that a calibration and Uniguard Ultrasonic Health Check report be done monthly for as long as this meter is flowing. Before suspending this work (deactivating the PM) due to a no flow condition, the flow measurement technician must ensure that the meter will not flow until the PM had been reactivated and a new cal/check has been performed. It must be clearly communicated in the field that this meter cannot flow until this work is done or the PM cannot be suspended. Monthly Maintenance Expectations: These tasks will be done every time this meter is calibrated for compliance with AOGCC regulations. 1) The calibration technician will commit to the calibration time/date and create an event on their Outlook calendar. The event category should be NOTIFICATIONS (blue). 2) The flow measurement technician will make the appropriate notifications for all blue calendar events. Minimum 24 hours notice is required. This is condition of approval to flow #3 from AOGCC. 3) The calibration will be performed and a Uniguard Ultrasonic Health Check report will be generated in the field and evaluated to ensure that the meter is functioning properly. 4) Calibration reports and Health Check report must be attached to the WO and closed within 1 day. 5) Immediately notify flow measurement technician. 6) The flow measurement technician will review the work order and email it to the AOGCC within 7 days of the cal. This is condition of approval to flow #4 from AOGCC. 01/19/2016 10:57 HILCORP ENERGY COMPANY Page 1 • 0 Print Work Order - Comprehensive Equipment NG-FB-MTR-609 METER; 609 FRANCES BARTOLOWITS SALES INTO KBPL Manufacturer Model Serial Number Location NGF -FB NGF -FB FRANCES BARTOLOWITS Reliability Ranking Reliability Ranking Score Reliability Ranking Index Equipment Comments 7)A copy of the email will be saved. For more information on these requirements see document titled 2014_ 06_ 26_AOGCC Bartolowits CT Meter Approval_201503131526.pdf It is stored under the "documents" tab. WO/PM Comments JMABREY[07/17/2014 08:43]: 1. Perform monthly Calibration 2. Create follow-up work order for any substandard conditions that were unresolved during calibration. 3. Close EAM Express and scan calibration results to work order Parts Associated 01/19/2016 10:57 HILCORP ENERGY COMPANY Page 2 T Work Order 204389 Activity 1 Trade MTR-TECH METER TECH Employee/Crew Route Print Work Order - Comprehensive Activity Estimated Hours People Required Activity Start Date 02/01/2016 2 1 Activity End Date 02/01/2016 Activity Schedule Booked Hours Date Time On Time Off Material List Route Inspection Route Total Time Type of Hours 01/19/2016 10:57 HILCORP ENERGY COMPANY Page 3 STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION Hilcorp Alaska Inc. Docket Number: CO -15-036 Informal Review January 21, 2016 NAME AFFILIATION Testify (yes or no) G ko-A l7�L.,;{5ay\ 14 M co--cG? I- 0 -- �Mlllll THE STATE 0f L1 l GOVERNOR BILL WALKER January 6, 2015 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 0640 0006 0779 5869 Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Docket Number: OTH-15-036 Informal Review Missing Meter Calibration Reports Ninilchik Bartolowits Pad Dear Mr. Wilkins: 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov 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 above referenced Notice of Proposed Enforcement Action. There will be no formal record kept of the review and the review will not involve the presence of counsel, either for the Alaska Oil and Gas Conservation Commission (AOGCC) or the operator. The informal review is scheduled for January 21, 2016 at 1:30 p.m. in the AOGCC's Anchorage office located at 333 West 7t" 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 15, 2016. Sincerely, Cathy P Foerster Chair, ommissioner • ■Complete items 1, 2, and 3. DomesticEr A. Signature ■ Print your name and address on the reverseX' For delivery visit our website at o� L-1information ❑ Addressee ■ Attach this card to the back of the mailpiece, B. Received by fined Nam Certified Mail Fee or on the front if space permits. r` $ Extra Services & Fees (check box, add fee as appropriate) from tem 1? ❑ Yes Mr. David Wilkins ❑ Retum Receipt (hardcopy) $ Serfier Vice President ❑ Retum Receipt (electronic) $ JAN 0 8 2016 Postmark C3 ❑ Certified Mail Restricted Delivery $ Here O ❑ Adult Signature Required $ ❑ Adult Signature Restricted Delivery $ p Postage aultSieType 0 IIIIIIIII C3 Mr. David Wilkins IIIII Ln Senior Vice President III IIIIIIIII III Q Hilcorp Alaska, LLC r` 3800 Centerpoint Dr., Ste. 1400 gCertified Mail® ❑ Certified Mail Restricted Delivery Anchorage, AK 99503 ■Complete items 1, 2, and 3. A. Signature ■ Print your name and address on the reverseX' � Agent so that we can return the card to you. ❑ Addressee ■ Attach this card to the back of the mailpiece, B. Received by fined Nam C. Date of Delivery or on the front if space permits. �© f -lelive ad from tem 1? ❑ Yes Mr. David Wilkins low. ❑ No Serfier Vice President _w Hilcorp Alaska, LLC JAN 0 8 2016 3800 Centerpoint Dr., Ste. 1400 Anchorage, ��0 AK 99503 aultSieType 0 IIIIIIIII IIII IIIII III II III IIIIIIIII III I LIII III L 0 Adult Signature ❑ Adult Signature Restricted Delivery RegiseredM Mail - ❑Registered MailT"' ❑ Registered Mail Restricted 9590 9403 0910 5223 5251 35 gCertified Mail® ❑ Certified Mail Restricted Delivery Delivery Wheturn Receipt for ❑ Collect on Delivery Merchandise 2. Article Number (Transfer from service label) ❑ Collect on Delivery Restricted Delivery Cl Signature Confirmation*"` — 7 015 0640 0006 0779 5869 " cored Mail cored Mail Restricted Delivery O Signature Confirmation Restricted Delivery M $soot PS Form 3811, July 2015 PSN 7530-02-000-9053 Domestic Return Receipt Carlisle, Samantha J (DOA) From: David Wilkins <dwilkins@hilcorp.com> To: Carlisle, Samantha J (DOA) Sent: Wednesday, January 06, 2016 11:10 AM Subject: Read: Informal Review OTH-15-036 Your message To: Subject: Informal Review OTH-15-036 Sent: Wednesday, January 06, 201611:09:46 AM (UTC -09:00) Alaska was read on Wednesday, January 06, 201611:09:41 AM (UTC -09:00) Alaska. • Hilcorp Alaska, LLC January 4, 2016 Cathy P. Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 7'h Avenue, Suite 100 Anchorage, Alaska 99501 Re: Docket Number: OTH-15-036 Ninilchik Bartolowits Pad Meter Calibration Reports Dear Mrs. Foerster: • 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 Fj%j ED �Hlv O 4 �QJ 00GGG We are in receipt of the Commission's Notice of Proposed Enforcement Action dated December 22, 2015, concerning meter calibration reports required under the AOGCC conditional approval dated June 26, 2014. Pursuant to the Commission's Notice and 20 AAC 25.535(c), Hilcorp Alaska hereby requests an informal review of the matter. Hilcorp Alaska will submit documentary material in advance of the informal review, and make an oral presentation at the informal review. We look forward to meeting with the Commission. It is our sincere hope that we will be able to resolve this matter during the informal review. Should you have any questions regarding this motion, please contact Larry Greenstein at 777-8322. Sincerely, David Wi ins Senior Vice President Hilcorp Alaska, LLC THE STATE • 01ALASK-A GOVERNOR BILL WALKER December 16, 2015 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 0640 0006 0779 5883 Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Docket Number: OTH-15-036 Missing Meter Calibration Reports Ninilchik Bartolowits Pad 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.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 the conditional approval letter for the Ninilchik Gas Field Bartolowits pad custody transfer measurement equipment. Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)). Custody transfer measurement equipment required for Hilcorp's Bartolowits pad development within the Ninilchik Gas Field was conditionally approved by AOGCC on June 26, 2014. Requirements imposed include the calibration frequency, notification to AOGCC for opportunity to witness measurement equipment calibrations, required actions before making changes to the custody transfer measurement equipment, and reporting obligations following calibrations. Hilcorp has reported gas production from the Bartolowits pad every month since production commenced in July 2014.1 AOGCC review of the Bartolowits pad field records — as provided to AOGCC — determined that Hilcorp failed to submit the required Uniguard Meter Health Check reports and Meter Calibration reports as directed in the June 26, 2014 conditional approval. Missing are reports for the months August 2014 through December 2015. 1 Frances # 1 (Permit to Drill #2131210) is the only well on the Bartolowits pad as of December 2015. Docket Number: OTH-15-036 • • Notice of Proposed Enforcement December 16, 2015 Page 2 of 4 Proposed Action (20 AAC 25.535(b)(3)). The custody transfer measurement reporting violation at Bartolowits is neither isolated nor innocent and is emblematic of Hilcorp's ongoing compliance problems. Hilcorp's non- 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; the use of equipment that is unsuitable for the operating environment, and failure to provide reports. Recent examples of noncompliant activities include: 1) Hilcorp Rig Workovers Employing NitrojZen 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 .2 3) Rig Operations with Failed Gas Detection System — 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. Activities leading up to this 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. Hilcorp notified AOGCC and stated the rig — Hilcorp ASRI — would not pull the completion until the gas system was operational". Less than one hour after providing that notice to AOGCC, Hilcorp made a unilateral decision to test if it was possible for ASRI to pull the completion. 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 (operating without approval; compromising a barrier that is in place to prevent the release of wellbore fluids from the well). 4) Failure to Protect Well Safety Valve Systems - Unannounced inspection of the well safety valve systems at Beaver Creek occurred in November 2015 to evaluate the functional capability in temperature extremes typical of the location. Inspection targeted wells with an unprotected safety valve system. Two wells failed function tests of the safety valve system because of frozen low pressure sensing lines, preventing the surface safety valve from closing. 2 20 AAC 25.285(f)(2) and (f)(8) 3 No well houses, heat -traced sensing line and control panel, insulated blanket covering the transmitter, nor any combination of these protections Docket Number: OTH-15-036 • • Notice of Proposed Enforcement December 16, 2015 Page 3 of 4 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. For violating provisions of the June 26, 2014 Ninilchik Gas Field Bartolowits pad custody transfer meter conditional approval letter the AOGCC intends to impose a civil penalty on Hilcorp under AS 31.05.150(a) in the amount of $170,000.4 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 similarly situated at the time of the violation or in the future, and Hilcorp's history of compliance issues. 5 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. 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 11th 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. 4 Penalty amount arrived at considering each month a separate initial violation, penalized at $10,000 per violation. 5 AS 31.05.150(g) sets forth the criteria for determination of a civil penalty. Docket Number: OTH-15-036 is 0 Notice of Proposed Enforcement December 16, 2015 Page 4 of 4 AOGCC has granted Hilcorp's request to combine into a single meeting the informal review of several recent notices of proposed enforcement. This proposed action can also be included in the informal review but Hilcorp must notify AOGCC in accordance with the above -stated Rights and Liabilities. Sincerely, Cathy $. Foerster Chair, Commissioner • M DomesticOnly -ior Vice President DEC', 2 2015 ,, co For delivery information, visit our website at www.usps.cor Ln 0 F F I Q Q w r%- Certified Mail Fee Ln a f` $ Hilcorp Alaska, LLC tti 3800 Centerpoint Dr., Ste. 1400 Extra Services & Fees (check box, add fee as appropriate) Anchorage, AK 99503 ❑ Retum Receipt (hardcopy) $ `-D ElRetum Receipt (electronic) $ Postmark 0 O ❑Certified Mail Restricted Delivery $ Here r ❑Adult Signature Required $ I �lll�l ❑ Adult Signature Restricted Delivery $ I'I I O -ior Vice President DEC', 2 2015 ,, INostage ..D �("�G O Mr. David Wilkins Ln a Senior Vice President E3 Hilcorp Alaska, LLC tti 3800 Centerpoint Dr., Ste. 1400 Anchorage, AK 99503 COMPLETE•N COMPLETE THIS SECTIONON DELIVERY ■ Complete items 1, 2, and 3. A. Si ria ■ Print your name and address on the reverse X ❑Agent :— so that we can return the card to you. ❑ Addressee ■ Attach this card to the back of the mailpiece, B. eceived by (Printed Name) C. Dat of Deli ery or on the front if space permits. / _--- - -- 'tem 1? Yes ow ❑ No David Wilkins -ior Vice President DEC', 2 2015 ,, Hilcorp Alaska, LLC 3800 Centerpoint Dr., Ste. 1400 �("�G Anchorage, AK 99503 V(�(� �+ Type ❑ Priority Mail Express® II I �lll�l I'll I'I I I I I I I I I II Illlll III III I I I II III ❑ Adultdull Signature D ❑Registered MailrM ❑ Adult Signature Restricted Delivery ❑ Registered Mail Restricted 9590 9403 0910 5223 5231 64 D Certified Mail estricted Delivery L'Return Receipt for ❑ Collect on Delivery ❑ Collect on Delivery Restricted Delivery Merchandise ❑ Signature Confirmation"I" ❑ Signature Confirmation 2. Article Number ?ransfer from service label) ?015 0640 0006 0 7 7 9 5883 d Mail d MM it Restricted Delivery Restricted Delivery PS Form 3811, July 2015 PSN 7530-02-000-9053 �•CL[ ,. ��j . (y�j(e Domestic Return Receipt • Regg, James B (DOA) From: Gina Bogart <gbogart@hilcorp.com> Sent: Friday, August 01, 2014 9:58 AM To: Regg, James B (DOA) Cc: Chad Helgeson Subject: Bartolowits sales meter health check report message ,a been ar�hi�ed. view 'A' '6 iufin t•it+ n W ' Mr. Regg, Attached is the Instromet Health Check report from 7-28-14. I have reviewed the conditions off Aproval for this meter with my alternate who was on shift during the commissioning. I understand that this is the last submission necessary for compliance. If you need anything else, please don't hesitate to contact me. In addition, I am attaching a more recent and representative gas analysis report which will be updated in the EFM today. Gina Bogart Hilcorp Alaska, LLC (907) 776-6825 Office (907) 398-4489 Cell (907) 776-6883 Fax Attachments;' imaae001.ipa (4 KB) 609 Bart Pad Sales Health Check 7-28-14.pdf (300 KB) HAK MSN609 BART PAD 07-29-14 RUN 2.txt (3 KB) June 26, 2014 Mr. Mike Dunn Area Operations Manager I lilcorp Alaska LLC P.O. Box 244027 Anchorage, AK 99524-4027 Re: Custody Transfer Measurement of Produced Gas Ninilchik Gas Field, Bartolowits Pad Dear Mr. Dunn: I lilcorp Alaska LLC (Hilcorp) submitted an application dated May 28, 22014 requesting approval to install an ultrasonic meter at the new Bartolowits Pad for custody transfer measurement of sales gas. The Bartolowits Pad is part of the Ninilchik Gas Field located on the Kenai Peninsula. Gas processing modules — including the custody transfer measurement equipment — have been removed from the recently shut-in Kasilof Pad and will be installed and recommissioned at the Bartolowits Pad, Sales gas will flow into the Kenai Kachemak Pipeline after custody transfer measurement. The Alaska Oil and Gas Conservation Commission (AOGCC) has completed its review of the Bartolowits gas custody transfer measurement application and approves Hilcorp's request with conditions noted later in this letter. Hilcorp describes the Bartolowits custody transfer meter run as follows: - Instromet QSonic-3 Meter: The 4 -inch ultrasonic meter is identified as FE -609, The Model number is Q-04063 )-2RF and serial number is 06-0123-Q304068. The meter run is installed downstream of gas processing equipment; - Galla her Flow Conditioner: This device is an isolating flow conditioner integral to the meter run and installed in a pipe spool upstream of the ultrasonic meter. The Gallagher Flow Conditioner (GFC) consists of a plate with bore holes in a symmetrical hole pattern and a tube anti -swirl (TAS) device designed to reduce disturbances in gas flow caused by upstream piping configurations. A new Model GFC System 11 TAS (no serial number provided) has been purchased for installation in the meter run; - NuFlo Flow Computer: This electronic flow measurement remote telemetry unit provides the ability to measure and monitor gas flow. It is rated for Class I Division I and Division 2 locations within petroleum facilities. Algorithms for gas measurement calculations follow American Gas Association standards that are incorporated into the 41 0 Mr. Mike Dunn June 26, 2014 Paoe 2 of 3 American Petroleum Institute Manual of ' Petroleum 11easurm eent Standards. It is identified as NuFlo Scanner 1131, serial number 1606-1921; NuFlo Multi -Variable Transmitter: Model MVX-11 is designed to work with the NuFlo Scanner 113 1 providing, measurement and transmission of process temperature, and static and differential pressures. The NuFto MVX-11 is rated for Class I Division I and Division 2 locations within petroleum facilities. The AOGCC inspected the Bartolowits meter run at GLM Machine Shop in Kenai on May 16, 2014. The used meter run was found in good condition having been cleaned after removal from the Kasilof Pad before the AOGCC Inspector arrived. The ultrasonic meter transducers were not available for inspection; photos provided by Hilcorp show the transducers to be in excellent condition. Two deficiencies were noted during the AOGCC inspection: the thermowell downstream of the meter was too long; and the lack of a sample port. The AOGCC Inspector was told both deficiencies would be corrected. No bore measurements of the upstream spool, meter tube, and downsteam spool were taken during the AOGCC inspection. The following conditions of approval apply: 1. AOGCC inspection of the Bartolowits custody transfer meter system is to be scheduled to occur immediately prior to commencing flow through the meter. 1 Hilcorp must perform monthly calibrations of the custody transfer gas measurement equipment at the Bartolowits Pad, 3. Hilcorp must provide the AOGCC 24-hour notice for opportunity to witness calibrations. A data download (in a format acceptable to AOGCC) from the flow computer shall be provided to the AOGCC Inspector that includes flow parameter configuration, measured flow volumes, and alarm history. The most recent Elster Instromet "Uniguard Meter Health Check Report'", must also be readily available for Inspector review; 4. Hilcorp must provide copies of the Uniguard Meter Health Check Report and Meter Calibration Report within 7 days following completion of a calibration. Reports are to include information as noted in the examples provided in the meter application; S. Hilcorp must provide a Scanner Configuration Analysis Report once gas production commences from the Bartolowits Pad. 6. Hilcorp must provide a new gas analysis and assessment of the impact to measurement as additional Bartolowits Pad wells are brought online; 7. Hilcorp must provide information demonstrating conformance and obtain AOGCC approval before changes are made to the Bartolowits custody transfer measurement equipment or measurement methodology. Mr. Mike Dunn June 26, 2014 Page ') of 3 If you have any questions on this matter please contact Jim Rego, of our staff at 793-1236. Sincerely, Cathy Foerster Daniel T. Searnount., Jr. Chair, Commissioner Commissioner cc: Jim Stouffer (DNR) Matthew Fonder (DOR) TION AND As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the A0GCC grants for good cause shown, a Person affected by it may file with the AOGCC all 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 icl 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 N1111 be filed within 33 days after the date on which the A0GCC 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 AQGCC 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 he 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 be. -ins 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. `ft • • Regg, James B (DOA) From: Dick Anderson <randerson@hilcorp.com> Sent: Friday, June 20, 2014 2:54 PM To: Regg, James B (DOA) Cc: Chad Helgeson Subject: RE: Bartolowits Meter Jim, See Hilcorp replies to your inquiries 2 & 3 below. With Regards — Dick 7778306 From: Regg, James B (DOA) [mailto:jim.reggCabalaska.gov] Sent: Wednesday, June 18, 2014 1:50 PM To: Dick Anderson Cc: Mike Dunn; Chad Helgeson Subject: RE: Bartolowits Meter Thanks. Couple other items: 1) Send pdf or paper copy 11x17 of P&ID for Dehy Unit (issued via prior e-mail) 2) Health Check reports for Kasilof meter show 3 consecutive months with alarms on VOS (Deviation of avg VOC measured compared to AGA 10 calculation) — March, April and May 2012 showed increasing deviations before a passing check in June 2012. How was this corrected? Reply: Since Marathon owned and operated the meter station at that time, Hilcorp is not able to speak to how this was corrected. This test relies heavily on the accuracy of the temp and pressure transmitters in use. The transmitters used by Marathon will not be installed in the new station. Hilcorp will be installing a Nuflo MVXII PIT/TIT (see permit submittal Appendix M) and will verify it's accuracy monthly (Appendix 0). 3) Need the Scanner Configuration Analysis Report for Bartolowitz installation. Not sure when this would be available and maybe it needs to be referenced in our letter approving the meter installation. Reply: The Scanner Configuration Analysis Report can be performed and provided upon pad commissioning. It is respectfully requested that this be addressed as a permit stipulation for compliance submittal as soon as practical after pad gas production commences. Jim Regg Supervisor, Inspections AOGCC 333 W. 7th Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITYNOTICE. 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 Pch information may violate state or federal law. If yore an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or lim.reee@alaska.sov. From: Dick Anderson fmailto:randerson@hilcorp.com] Sent: Wednesday, June 18, 2014 11:21 AM To: Regg, James B (DOA) Cc: Mike Dunn; Chad Helgeson Subject: RE: Bartolowits Meter Jim, The Bartolowits CT Meter tag # is FE -200. Regards — Dick Anderson 7778306 From: Mike Dunn Sent: Wednesday, June 18, 2014 11:07 AM To: Dick Anderson Subject: Fwd: Bartolowits Meter Dick, can you get with Gina and assign a name/number to this meter. Thx Sent from my iPhone Begin forwarded message: From: "Begg, James B (DOA)" <jim.reee@alaska.eov> Date: June 18, 2014 at 10:51:44 AM AKDT To: Mike Dunn <mdunn@hilcorp.com> Subject: Bartolowits Meter Bartolowits meter is designated FE-??? Need this for our meter database Jim Regg Supervisor, Inspections AOGCC 333 W. 7th Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. if you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907-793-1236 or iim.rees@alaska.eov. MEMORANDUM TO: Jim Regg P. I. Supervisor FROM: Bob Noble Petroleum Inspector 5/15//14 State of Alaska Alaska Oil and Gas Conservation Co idh DATE: 5/16/14 ft. Ic SUBJECT: Meter Inspection Bartolowits Gas Sales Meter Ninilchik Unit I arrived at the GLM Machine Shop in Kenai to inspect the gas sales meter that Hilcorp plans to install on the new Bartolowits pad located within the Ninilchik Gas Field, Ninilchik Unit. Representing Hilcorp were Gina Bogart, Bo York, Dick; Anderson, and Craig Green (a Mechanical Engineering Contractor with NDD). The subject meter is a 4 -inch Instromet QSonic-3 ultrasonic meter — Serial no. 06-0123-Q304068 — that was previously used for custody transfer measurement of sales gas from the Kasilof pad (now shut in). It will be reinstalled to measure sales gas (custody transfer) from the new Bartolowits pad to the Kenai Kachemak Pipeline. The Bartolowits pad currently has a single gas well; Hilcorp has plans for additional wells in the future. The transducers had been removed and were packaged up prior to my arrival so I was unable to inspect them. The Hilcorp representatives said the transducers looked new. The bore of the meter spool was very smooth and looked great. The bores of the flow conditioner (upstream) and temperature measurement (downstream) spools were somewhat rougher. I questioned Hilcorp about this and Craig Green spoke up telling me how they were inspected and were found to be well within AGA 9 specs. The flow conditioner was removed from its spool and looked to be in new condition. Gina Bogart pointed out that the temperature probe that was in the spool at Kasilof was too long. She had another probe with her to replace it but it was too short. Hilcorp will get the right probe and have it installed. I recommend a follow-up inspection when the ultrasonic meter is installed at Bartolowits pad to verify the condition of the transducers and depth of temperature probe that will be installed. Attachments: 9 photos 2014-0516_Meter_ Inspect_ Bartolowits_bn.docx 1 of 4 • Bartolowits Pad Custody Transfer Meter Inspection GLM Machine Shop (Kenai, AK) Photos by AOGCC Inspector B. Noble 5/16/2014 �'�► Instromet, Inc. tm%Neatwa Dflw Ste !ja .hone (281)491-5252 StaMatl. texas.. USA Fax (281) 491 8440 1DODELNO. QA40610&d T SERIAL NO. MADp 06-0123-Q304 1480 PSIG--1 FLANGE CLASS ��-6=00 ' — 41NCH BORE 9I-000 QR�ERAi1NGtEMP —� XDCR TYPEE EMP,MIN -m.e -2 -F TO 140'F 1 o VVW4Rkq M1N L S " 4t ' "' v�R412 lE WARt) .J 2014-0516_ Meter_ Inspect Bartolowits–bn.docx 2 of 4 Meter Data Plate Ultrasonic Meter – 4" Instromet QSonic, 3 path Additional views of ultrasonic meter body and transducer locations; transducers removed prior to inspection Ultrasonic Meter — Electronics junction box and transducer locations on meter body 9 Downstream spool with thermowell; right photo shows temperature probe is too long (must be in center 1/3 of pipe bore) Upstream spool for flow conditioner (right); numbers on flange for proper reinstallation 2014-0516_ Meter_ Inspect_ Bartolowits_bn. docx 4 of 4