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Home My WebLink AboutO 117OTHER ORDER 117 Hilcorp Alaska, LLC Docket OTH-15-030 1. November 16, 2015 Notice of Proposed Enforcement Action, Failure to Notify of Changes to an Approved Permit 2. November 18, 2015 Lane Powell entry of appearance as attorneys of records for Hilcorp 3. November 20, 2015 Hilcorp's informal review request 4. November 23, 2015 AOGCC's letter: Informal Review and Counsel Present During Informal Review 5. November 25, 2015 Hilcorp's request for informal review without counsel 6. December 15, 2015 AOGCC's letter: Scheduling Informal Review 7. January 29, 2016 Hilcorp's informal review submission (confidential — held in secure storage, non -confidential version received 2/24/2016) 8. February 18, 2016 Informal review sign -in sheet 9. February 19, 2016 Email: Informal Review Questions 10, May 10, 2017 Civil penalty payment check copy ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Notify of Changes to an Approved ) Docket Number: OTH-15-030 Permit. Milne Point Unit J-01 A, PTD 1991110. ) Other Order 117 March 21, 2017 DECISION AND ORDER On November 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 Milne Point Unit well J-OIA (MPU J-OIA). The Notice was based upon Hilcorp's performance of well operations on MPU J-OIA by failing to obtain approval to change an approved program. The Notice proposed specific corrective actions and a $75,000 civil penalty under AS 31.05.150(a). Hilcorp requested an informal review. That review was held February 18, 2016. Summary of Proposed Enforcement Action: A review of well workovers performed at MPU by Hilcorp-operated rigs revealed three wells that had fill cleanout operations using nitrogen without AOGCC approval: MPU J -O l A, MPU J -08A, and MPU J -09A, a violation of 20 AAC 25.507. After gathering information and further discussions with Hilcorp, AOGCC proposed a $75,000 civil penalty. Informal Review: On January 29, 2016 Hilcorp submitted a brief and appended documentation in advance of the Informal Review addressing, among other matters, the use of nitrogen a MPU J -01A.' Hilcorp neither disputed that it did not list nitrogen on its Sundry request nor that it used nitrogen during AOGCC agreed with Hilcorp's request that all four notices of proposed enforcement would be consolidated for purposes of an Informal Review. The four notices are Docket OTH 15-025 (MPU J -08A: Failure to Notify of Changes to an Approved Permit; Failure to Maintain a Safe Work Environment), Docket OTH 15-029 (MPU I-03: Failure to Notify of Use of Blowout Prevention Equipment; Failure to Test Used Blowout Prevention Equipment), Docket OTH 15-030 (MPU J-01 A: Failure to Notify of Changes to an Approved Permit), and Docket OTH 15-031 (MPU J -09A: Failure to Notify of Changes to an Approved Permit). Other Order 117 March 21, 2017 Page 2 of 6 the cleanout. Instead, Hilcorp blamed AOGCC's lack of "comment" afterwards for its belief that listing nitrogen was not required. During the February 18, 2016 Informal Review, Hilcorp did not discuss specifics relating to the violation at MPU J-OIA. Discussion: Hilcorp commenced workover operations with the ASRI rig at MPU J -01A on August 6, 2015. Sundry approval 315-459 dated July 30, 2015 authorized Hilcorp to pull a failed electric submersible pump (ESP) and rerun a new ESP completion. Because the request sought only approval to use lease water for well cleanout, the approval did not authorize the use of nitrogen for well cleanout. As part of the workover procedure, a fill cleanout step was included prior to running the new ESP and 2 -7/8 -inch production tubing. Daily reports for August 7-10, 2015 show the following well work was completed in preparation for the fill cleanout: ESP completion had been removed, a tapered fill cleanout string was run in the well to 4409 feet measured depth, and equipment was rigged up to perform the fill cleanout. The fill cleanout pumping operations began August 10, 2015. Hilcorp used lease water for circulating as part of the fill cleanout operation, then used nitrogen for the well cleanout prior to running the new ESP completion. In its brief, Hilcorp conceded "that certain operational conduct described in the Notices was not in accordance with its own or its contractors well-established policies or procedures." 2 Nonetheless, Hilcorp claimed that because AOGCC regulations were silent on the topic of fluids to be used in the course of a well workover that there was no requirement to submit information detailing the fluids to be used for well clean out. Hilcorp's claims are contradicted by its own actions. In the first of its four initial workovers at MPU, Hilcorp sought and obtained approval of a contingency plan for the use of nitrogen during well clean out.' 2 Hilcorp Alaska, LLC's Submission to the AOGCC for Informal Review of AOGCC Docket Nos. OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31; Submitted January 29, 2016 (30 pages, plus 23 multi -page Exhibits). 3 MPU 1-15, PTD 2021520, Sundry Approval 315-158 Other Order 117 March 21, 2017 Page 3 of 5 A proposed program must include detail sufficient to enable the AOGCC to ensure the proper planning and safe conduct of activities on the well by rig and contractor personnel. Because this inquiry is undertaken on a well by well basis, the lack of AOGCC objection to one request does not provide blanket approval for that specific operation in subsequent well workovers. No operator may undertake a change to an approved program or activity without AOGCC approval. Any application to change an approved program must state the well's current condition and describe the proposed change. In its request for approval of Sundry 315-459, Hilcorp represented to AOGCC that the cleanout would use lease water. As a result, nitrogen was not authorized for use during a fill cleanout of MPU J-0 IA. After the Notice was issued, Hilcorp claimed that the use of nitrogen for a fill cleanout was a contingent plan executed only if well conditions warrant.' A contingent plan constitutes a change to an approved permit requiring AOGCC approval prior to implementation. The point of requiring preapproval for this operation is to allow review of the entire proposed program, not just one of the alternatives from which Hilcorp may pick. Hilcorp's listing of nitrogen on an earlier Sundry request, along with its listing of lease water on its request here, belie Hilcorp's claims that it did not believe the Sundry required the entire program to be set forth. Findings and Conclusions: Prior to this violation, AOGCC issued several enforcement actions against Hilcorp, including imposition of a civil penalty. AOGCC also met several times with Hilcorp's Alaska managers regarding concerns about regulatory compliance, including a meeting with Hilcorp operations personnel at its Kenai field office to assist with its understanding of AOGCC expectations of regulatory compliance.5 These discussions were undertaken to draw attention to and help to stem Hilcorp's relatively high frequency of noncompliant activities. These actions do not appear to have had any significant impact on Hilcorp's conduct. 4 Hilcorp correspondence dated October 9, 2015 (refer to AOGCC Docket 15-025) 5 Meeting requested and arranged by Hilcorp; held November 11, 2013 Other Order 117 March 21, 2017 Page 4 of 6 The AOGCC finds that Hilcorp has violated 20 AAC 25.507 in the conduct of workover operations at MPU J-01 A by failing to obtain prior approval for a plan change. The AOGCC has considered the factors in AS 31.05.150(g) in its determination of penalties for the MPU J -01A violation. Hilcorp has demonstrated neither mitigating factors relative to this incident nor that AOGCC missed information in reviewing the enforcement action. The potential severity of the outcome of Hilcorp's actions, Hilcorp's ongoing history of performing work outside of approved permits or management -of -change protocols, its history of compliance issues and the need to deter are significant factors in the AOGCC's analysis.6 However, during the past twelve months, Hilcorp has taken initiatives that have improved their overall regulatory compliance. Also, after the initial investigation of this incident, the AOGCC stopped work on all four Hilcorp workover rigs in Alaska from 10/1/15 to 10/26/15, until Hilcorp could demonstrate compliance with AOGCC's conditions for restarting well work. The AOGCC recognizes that this shutdown of well workover operations had a significant financial impact to Hilcorp. Now Therefore It Is Ordered That: A civil penalty in the amount of $80,000 is imposed for violating 20 AAC 25.507, for changing the work procedure in Sundry approval 315-459 by performing the cleanout of MPU J -01A using an unapproved contingent plan (nitrogen). Done at Anchorage, Alaska and dated March 21, 2017. r Catq P. Foerster Chair, Commissioner Daniel T. Seamoun , Jr. Commissioner Hollis S. French Commissioner 6 AS 31.05.150(g) requires AOGCC to consider nine criteria in setting the amount of a civil penalty. Other Order 117 March 21, 2017 Page 5 of 6 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. ' Domestic Mail Only For delivery information, visit our website at www.usps.com'r _■Certified Mail Fee M ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Dr., Ste. 1400 Anchorage, AK 99503 A. 'nature` 13A. Agent Ad re: B. `Received by (Printe —me) I C—Da a of Ebb D. Is delivery address differEftt from item 1?Yoe If YES, enter delivery ad ss below: No RECEIVED MAR 2 8 2017 E] Return Receipt (hardcopy) $ O E]Return Receipt (electronic) $ Postmark O ❑ Certified Mail Restricted Delivery $ Here C3 ❑AduR Signature Required $ 3. Service Type [—]Adult Signature Restricted Delivery $ E3 Postage II I II I $ III I II I I I Total Postage and Fees II E3 I III Mr. David Wilkins ❑Adult Signature $ Ln Sent To _ Senior Vice President ra t3 StieStandApCNo., o�POeoz Hilcorp Alaska, LLC ____________ 3800 Centerpoint Dr., Ste. 1400 ---- City, State, ZlP+4® ❑ Adult Signature Restricted Delivery ❑ Registered Mail Restricted Anchorage, AK 99503 ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Dr., Ste. 1400 Anchorage, AK 99503 A. 'nature` 13A. Agent Ad re: B. `Received by (Printe —me) I C—Da a of Ebb D. Is delivery address differEftt from item 1?Yoe If YES, enter delivery ad ss below: No RECEIVED MAR 2 8 2017 3. Service Type ❑ Priority Mail Express® II I III �) III II I II I I III I II I I I I IIIII II I I III ❑Adult Signature ❑Registered MailTM ❑ Adult Signature Restricted Delivery ❑ Registered Mail Restricted 9590 9402 1823 6104 6489 55 11 Certified Mail Restricted Delivery O Retu n Receipt for ❑ Collect on Delivery Merchandise 2. Article Number (Transfer from service label) ❑ Collect on Delivery Restricted Delivery ❑ Signature ConfirmationTm red Mail ❑ Signature Confirmation 7 015 0640 0003 5185 5369 red Mail Restricted Delivery Restricted Delivery $500) PS Form 3811, July 2015 PSN 7530-02-000-9053 Domestic Return Receipt STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Notify of Changes to an Approved ) Docket Number: OTH-15-030 Permit. Milne Point Unit J-01 A, PTD 1991110. ) Other Order 117 March 21, 2017 DECISION AND ORDER On November 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 Milne Point Unit well J -01A (MPU J -01A). The Notice was based upon Hilcorp's performance of well operations on MPU J -01A by failing to obtain approval to change an approved program. The Notice proposed specific corrective actions and a $75,000 civil penalty under AS 31.05.150(a). Hilcorp requested an informal review. That review was held February 18, 2016. Summary of Proposed Enforcement Action: A review of well workovers performed at MPU by Hilcorp-operated rigs revealed three wells that had fill cleanout operations using nitrogen without AOGCC approval: MPU J -01A, MPU J -08A, and MPU J -09A, a violation of 20 AAC 25.507. After gathering information and further discussions with Hilcorp, AOGCC proposed a $75,000 civil penalty. Informal Review: On January 29, 2016 Hilcorp submitted a brief and appended documentation in advance of the Informal Review addressing, among other matters, the use of nitrogen a MPU J -01A.' Hilcorp neither disputed that it did not list nitrogen on its Sundry request nor that it used nitrogen during ' AOGCC agreed with Hilcorp's request that all four notices of proposed enforcement would be consolidated for purposes of an Informal Review. The four notices are Docket OTH 15-025 (MPU J -08A: Failure to Notify of Changes to an Approved Permit; Failure to Maintain a Safe Work Environment), Docket OTH 15-029 (MPU I-03: Failure to Notify of Use of Blowout Prevention Equipment; Failure to Test Used Blowout Prevention Equipment), Docket OTH 15-030 (MPU J-0 IA: Failure to Notify of Changes to an Approved Permit), and Docket OTH 15-031 (MPU J -09A: Failure to Notify of Changes to an Approved Permit). Other Order 117 March 21, 2017 Page 2 of 5 the cleanout. Instead, Hilcorp blamed AOGCC's lack of "comment" afterwards for its belief that listing nitrogen was not required. During the February 18, 2016 Informal Review, Hilcorp did not discuss specifics relating to the violation at MPU J-01 A. Discussion: Hilcorp commenced workover operations with the ASR1 rig at MPU J -01A on August 6, 2015. Sundry approval 315-459 dated July 30, 2015 authorized Hilcorp to pull a failed electric submersible pump (ESP) and rerun a new ESP completion. Because the request sought only approval to use lease water for well cleanout, the approval did not authorize the use of nitrogen for well cleanout. As part of the workover procedure, a fill cleanout step was included prior to running the new ESP and 2 -7/8 -inch production tubing. Daily reports for August 7-10, 2015 show the following well work was completed in preparation for the fill cleanout: ESP completion had been removed, a tapered fill cleanout string was run in the well to 4409 feet measured depth, and equipment was rigged up to perform the fill cleanout. The fill cleanout pumping operations began August 10, 2015. Hilcorp used lease water for circulating as part of the fill cleanout operation, then used nitrogen for the well cleanout prior to running the new ESP completion. In its brief, Hilcorp conceded "that certain operational conduct described in the Notices was not in accordance with its own or its contractors well-established policies or procedures."' Nonetheless, Hilcorp claimed that because AOGCC regulations were silent on the topic of fluids to be used in the course of a well workover that there was no requirement to submit information detailing the fluids to be used for well clean out. Hilcorp's claims are contradicted by its own actions. In the first of its four initial workovers at MPU, Hilcorp sought and obtained approval of a contingency plan for the use of nitrogen during well clean out.' z Hilcorp Alaska, LLC's Submission to the AOGCC for Informal Review of AOGCC Docket Nos. OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31; Submitted January 29, 2016 (30 pages, plus 23 multi -page Exhibits). 3 MPU I-15, PTD 2021520, Sundry Approval 315-158 Other Order 117 March 21, 2017 Page 3 of 5 A proposed program must include detail sufficient to enable the AOGCC to ensure the proper planning and safe conduct of activities on the well by rig and contractor personnel. Because this inquiry is undertaken on a well by well basis, the lack of AOGCC objection to one request does not provide blanket approval for that specific operation in subsequent well workovers. No operator may undertake a change to an approved program or activity without AOGCC approval. Any application to change an approved program must state the well's current condition and describe the proposed change. In its request for approval of Sundry 315-459, Hilcorp represented to AOGCC that the cleanout would use lease water. As a result, nitrogen was not authorized for use during a fill cleanout of MPU J-0 IA. After the Notice was issued, Hilcorp claimed that the use of nitrogen for a fill cleanout was a contingent plan executed only if well conditions warrant.4 A contingent plan constitutes a change to an approved permit requiring AOGCC approval prior to implementation. The point of requiring preapproval for this operation is to allow review of the entire proposed program, not just one of the alternatives from which Hilcorp may pick. Hilcorp's listing of nitrogen on an earlier Sundry request, along with its listing of lease water on its request here, belie Hilcorp's claims that it did not believe the Sundry required the entire program to be set forth. Findings and Conclusions: Prior to this violation, AOGCC issued several enforcement actions against Hilcorp, including imposition of a civil penalty. AOGCC also met several times with Hilcorp's Alaska managers regarding concerns about regulatory compliance, including a meeting with Hilcorp operations personnel at its Kenai field office to assist with its understanding of AOGCC expectations of regulatory compliance.5 These discussions were undertaken to draw attention to and help to stem Hilcorp's relatively high frequency of noncompliant activities. These actions do not appear to have had any significant impact on Hilcorp's conduct. 4 Hilcorp correspondence dated October 9, 2015 (refer to AOGCC Docket 15-025) 5 Meeting requested and arranged by Hilcorp; held November 11, 2013 Other Order 117 March 21, 2017 Page 4 of 5 The AOGCC finds that Hilcorp has violated 20 AAC 25.507 in the conduct of workover operations at MPU J -01A by failing to obtain prior approval for a plan change. The AOGCC has considered the factors in AS 31.05.150(g) in its determination of penalties for the MPU J -01A violation. Hilcorp has demonstrated neither mitigating factors relative to this incident nor that AOGCC missed information in reviewing the enforcement action. The potential severity of the outcome of Hilcorp's actions, Hilcorp's ongoing history of performing work outside of approved permits or management -of -change protocols, its history of compliance issues and the need to deter are significant factors in the AOGCC's analysis.6 However, during the past twelve months, Hilcorp has taken initiatives that have improved their overall regulatory compliance. Also, after the initial investigation of this incident, the AOGCC stopped work on all four Hilcorp workover rigs in Alaska from 10/1/15 to 10/26/15, until Hilcorp could demonstrate compliance with AOGCC's conditions for restarting well work. The AOGCC recognizes that this shutdown of well workover operations had a significant financial impact to Hilcorp. Now Therefore It Is Ordered That: A civil penalty in the amount of $80,000 is imposed for violating 20 AAC 25.507, for changing the work procedure in Sundry approval 315-459 by performing the cleanout of MPU J-0IA using an unapproved contingent plan (nitrogen). Done at Anchorage, Alaska and dated March 21, 2017. //signature on file// Cathy P. Foerster Chair, Commissioner //signature on file// Daniel T. Seamount, Jr. Commissioner //signature on file// Hollis S. French Commissioner 6 AS 31.05.150(g) requires AOGCC to consider nine criteria in setting the amount of a civil penalty. Other Order 117 March 21, 2017 Page 5 of 5 RECONSIDERATION 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. Bernie Karl K&K Recycling Inc. Gordon Severson Penny Vadla P.O. Box 58055 3201 Westmar Cir. 399 W. Riverview Ave. Fairbanks, AK 99711-0055 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 George Vaught, Jr. Darwin Waldsmith Richard Wagner P.O. Box 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639-0309 Fairbanks, AK 99706-0868 r�2;10 c' 3-z.2- 2-o k7 Singh, Angela K (DOA) From: Carlisle, Samantha J (DOA) Sent: Tuesday, March 21, 2017 3:51 PM To: Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA); Colombie, Jody J (DOA); Cook, Guy D (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Grimaldi, Louis R (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); 'AK, GWO Projects Well Integrity'; 'AKDCWellIntegrityCoordinator'; 'Alan Bailey'; 'Alex Demarban'; 'Alexander Bridge'; 'Allen Huckabay'; 'Andrew VanderJack'; 'Ann Danielson'; 'Anna Raff'; 'Barbara F Fullmer; 'bbritch'; bbohrer@ap.org; 'Ben Boettger'; 'Bill Bredar'; Bob Shavelson; 'Brandon Viator'; 'Brian Havelock'; 'Bruce Webb'; 'Caleb Conrad'; 'Candi English'; 'Cocklan-Vendl, Mary E'; 'Colleen Miller'; 'Connie Downing'; 'Crandall, Krissell'; 'D Lawrence'; 'Dale Hoffman'; 'Darci Horner'; 'Dave Harbour'; 'David Boelens'; 'David Duffy'; 'David House'; 'David McCaleb'; 'David McCraine; 'David Tetta'; 'ddonkel@cfl.rr.com'; DNROG Units (DNR sponsored); 'Donna Ambruz'; 'Ed Jones'; 'Elizabeth Harball'; 'Elowe, Kristin'; 'Elwood Brehmer'; 'Evan Osborne'; 'Evans, John R (LDZX)'; 'George Pollock'; 'Gordon Pospisil'; Greeley, Destin M (DOR); 'Gretchen Stoddard'; 'gspfoff'; Hurst, Rona D (DNR); Hyun, James J (DNR); 'Jacki Rose'; 'Jdariington Oarlington@gmail.com)'; 'Jeanne McPherren'; 'Jerry Hodgden'; 'Jill Simek'; 'Jim Watt'; 'Jim White'; 'Joe Lastufka'; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); 'John Stuart'; 'Jon Goltz'; Chmielowski, Josef (DNR); 'Juanita Lovett'; 'Judy Stanek'; 'Kari Moriarty'; 'Kasper Kowalewski'; 'Kazeem Adegbola'; 'Keith Torrance'; 'Keith Wiles'; 'Kelly Sperback'; Frank, Kevin J (DNR); Kruse, Rebecca D (DNR); Gregersen, Laura S (DNR); 'Leslie Smith'; 'Lori Nelson'; 'Louisiana Cutler'; 'Luke Keller'; 'Marc Kovak'; Dalton, Mark (DOT sponsored); 'Mark Hanley (mark.hanley@anadarko.com)'; 'Mark Landt'; 'Mark Wedman'; 'Mealear Tauch; 'Michael Bill'; 'Michael Calkins'; 'Michael Moora'; 'MJ Loveland'; 'mkm7200'; 'Motteram, Luke A'; Mueller, Marta R (DNR); Munisteri, Islin W M (DNR); knelson@petroleumnews.com; 'Nichole Saunders'; 'Nikki Martin'; 'NSK Problem Well Supv'; 'Patty Alfaro'; 'Paul Craig'; Decker, Paul L (DNR); 'Paul Mazzolini'; Pike, Kevin W (DNR); 'Randall Kanady'; 'Renan Yanish; 'Richard Cool'; 'Robert Brelsford'; 'Ryan Tunseth'; 'Sara Leverette'; 'Scott Griffith'; 'Shahla Farzan'; 'Shannon Donnelly'; 'Sharon Yarawsky'; Skutca, Joseph E (DNR); 'Smart Energy Universe'; Smith, Kyle S (DNR); 'Stephanie Klemmer'; 'Stephen Hennigan'; 'Sternicki, Oliver R'; Moothart, Steve R (DNR); 'Steve Quinn'; 'Suzanne Gibson'; sheffield@aoga.org; 'Ted Kramer'; 'Teresa Imm; 'Thor Cutler'; 'Tim Jones'; 'Tim Mayers'; 'Todd Durkee'; 'trmjrl'; 'Tyler Senden; Umekwe, Maduabuchi P (DNR); 'Vinnie Catalano'; 'Well Integrity'; 'Well Integrity'; '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'; 'Corey Munk'; 'Don Shaw'; 'Eric Lidji'; 'Garrett Haag'; Smith, Graham 0 (DNR); Dickenson, Hak K (DNR); Neusser, Heather A (DNR); Fair, Holly S (DNR); 'Holly Pearen'; 'Jamie M. Long'; 'Jason Bergerson'; 'Jesse Chielowski'; 'Jim Magill'; 'Joe Longo'; 'John Martineck'; 'Josh Kindred'; 'Laney Vazquez'; 'Lois Epstein'; Longan, Sara W (DNR); 'Marc Kuck'; 'Marcia Hobson'; Steele, Marie C (DNR); 'Matt Armstrong'; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); 'Pat Galvin'; 'Pete Dickinson'; 'Peter Contreras'; 'Richard Garrard'; 'Richmond, Diane M'; 'Robert Province'; 'Ryan Daniel'; 'Sandra Lemke'; To: Pollard, Susan R (LAW); 'Talib Syed'; 'Tina Grovier (tmgrovier@stoel.com)'; Tostevin, Breck C (LAW); 'Wayne Wooster'; 'William Van Dyke' Subject: RE: Other Order 117 (Hilcorp) Attachments: other117.pdf Please replace the previous Other Order 117 with this one, corrected docket number. Thank you, Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West Th Avenue Anchorage, AK 99501 (907) 793-1223 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 Samantha Carlisle at (907) 793-1223 or Samantha.Carlisleftlaska.eov. From: Carlisle, Samantha J (DOA) Sent: Tuesday, March 21, 2017 3:38 PM To: Ballantine, Tab A (LAW) (tab.ballantine@alaska.gov) <tab.ballantine@alaska.gov>; Bender, Makana K (DOA) (makana.bender@alaska.gov) <makana.bender@alaska.gov>; Bettis, Patricia K (DOA) (patricia.bettis@alaska.gov) <patricia.bettis@alaska.gov>; Bixby, Brian D (DOA) <brian.bixby@alaska.gov>; Brooks, Phoebe L (DOA) (phoebe. brooks@alas ka.gov) < p hoe be. brooks @a laska.gov>; Carlisle, Samantha J (DOA) <samantha.carlisle@alaska.gov>; Colombie, Jody J (DOA) (jody.colombie@alaska.gov) <jody.colombie@alaska.gov>; Cook, Guy D (DOA) <guy.cook@alaska.gov>; Davies, Stephen F (DOA) (steve.davies@alaska.gov) <steve.davies@alaska.gov>; Eaton, Loraine E (DOA) <loraine.eaton@alaska.gov>; Foerster, Catherine P (DOA) (cathy.foerster@alaska.gov) <cathy.foerster@alaska.gov>; French, Hollis (DOA) <hollis.french@alaska.gov>; Frystacky, Michal (michal.frystacky@alaska.gov) <michal.frystacky@alaska.gov>; Grimaldi, Louis R (DOA) (lou.grimaldi@alaska.gov) <lou.grimaldi@alaska.gov>; Guhl, Meredith (DOA sponsored) (meredith.guhl@alaska.gov) <meredith.guhl@alaska.gov>; Herrera, Matthew F (DOA) <matthew.herrera@alaska.gov>; Jones, Jeffery B (DOA) (jeff.jones@alaska.gov) <jeff.jones@alaska.gov>; Kair, Michael N (DOA) <michael.kair@alaska.gov>; Link, Liz M (DOA) <liz.link@alaska.gov>; Loepp, Victoria T (DOA) <victoria.loepp@alaska.gov>; Mumm, Joseph (DOA sponsored) (joseph.mumm@alaska.gov) <joseph.mumm@alaska.gov>; Noble, Robert C (DOA) (bob.noble@alaska.gov) <bob.noble @alaska.gov>; Paladijczuk, Tracie L (DOA) (tracie.paladijczuk@alaska.gov) <tracie.paladijczuk@alaska.gov>; Pasqual, Maria (DOA) (maria.pasqual@alaska.gov) <maria.pasqual@alaska.gov>; Quick, Michael (DOA sponsored) <mike.quick@alaska.gov>; Regg, James B (DOA) (jim.regg@alaska.gov) <jim.regg@alaska.gov>; Roby, David S (DOA) (dave.roby@alaska.gov) <dave.roby@alaska.gov>; Scheve, Charles M (DOA) (chuck.scheve@alaska.gov) <chuck.scheve@alaska.gov>; Schwartz, Guy L (DOA) (guy.schwartz@alaska.gov) <guy.schwartz@alaska.gov>; Seamount, Dan T (DOA) (dan.seamount@alaska.gov) <dan.seamount@alaska.gov>; Singh, Angela K (DOA) (angela.singh@alaska.gov) <angela.singh@alaska.gov>; Wallace, Chris D (DOA) (chris.wallace@alaska.gov) <chris.waIlace @alaska.gov>; AK, GWO Projects Well Integrity<AKDCProjectsWe I I I ntegrityE ngi nee r@ bp. com >; AKDCWeIIlntegrityCoordinator <AKDCWeIIlntegrityCoordinator@bp.com>; Alan Bailey <abailey@petroleumnews.com>; Alex Demarban <alex@alaskadispatch.com>; Alexander Bridge <Alexander_Bridge@xtoenergy.com>; Allen Huckabay <allenhuckabay@hotmail.com>; Andrew Vandedack <AMV@vnf.com>; Ann Danielson <Ann.Danielson@bp.com>; Anna Raff <anna.raff@dowjones.com>; Barbara F Fullmer<barbara.f.fullmer@conocophillips.com>; bbritch <bbritch@alaska.net>; Becky Bohrer <bbohrer@ap.org>; Ben Boettger<benjamin.boettger@peninsulaclarion.com>; Bill Assmann, Aaron A <Aaron.Assmann@bp.com>; Bajsarowicz, Caroline 1 <Caroline.Bajsarowicz@bp.com>; Bruce Williams <bruce.williams@bp.com>; Bruno, Jeff J (DNR) <jeff.bruno@alaska.gov>; Casey Sullivan <Casey.Sullivan@pxd.com>; Catie Quinn <catiequinn@radiokenai.com>; Corey Munk <Corey.Munk@BP.com>; Don Shaw <shawmanseafoods@yahoo.com>; Eric Lidji <ericlidji@mac.com>; Garrett Haag <Garrett.B.Haag@conocophiIIips.com>; Graham Smith <graham.smith@alaska.gov>; Hak Dickenson <hak.dickenson@alaska.gov>; Heusser, Heather A (DNR) <heather.heusser@alaska.gov>; Holly Fair <holly.fair@alaska.gov>; Holly Pearen <hpearen@edf.org>; Jamie M. Long <jamie. m.long@esso.ca>; Jason Bergerson <Jason. Bergerson @ north-slope.org>; Jesse Chielowski <jchmielowski@blm.gov>; Jim Magill <jim_magill@platts.com>; Joe Longo <Joe.Longo@hxrdrillingservices.com>; John Martineck <john@bluecrestenergy.com>; Josh Kindred <kindred@aoga.org>; Laney Vazquez <LVazq uez @chevron. com >; Lois Epstein <lois_epstein@tws.org>; Longan, Sara W (DNR) <sara.longan@alaska.gov>; Marc Kuck <Marc.kuck@enipetroleum.com>; Marcia Hobson <mhobson@eenews.net>; Marie Steele <marie.steele@alaska.gov>; Matt Armstrong <Matt.Armstrong@bakerhughes.com>; Mike Franger <mike.franger@alaska.gov>; Morgan, Kirk A (DNR) <kirk.morgan@alaska.gov>; Pascal Umekwe <pascal.umekwe@alaska.gov>; Pat Galvin <pat@greatbearpetro.com>; Pete Dickinson<pdickinson@allamericanoilfield.com>; Peter Contreras <co ntreras. peter@ e pa.gov>; Richard Garrard <rgarrard@nordagenergy.com>; Richmond, Diane M <Diane.Richmond@bp.com>; Robert Province <robert.province@enipetroleum.com>; Ryan Daniel <Ryan.Daniel@bp.com>; Sandra Lemke <Sandra.D.Lemke@conocophillips.com>; Susan Pollard <Susan.Pollard@alaska.gov>; Talib Syed <talibs@ecentral.com>; Tina Grovier (tmgrovier@stoel.com) <tmgrovier@stoel.com>; Tostevin, Breck C (LAW) <breck.tostevin@alaska.gov>; Wayne Wooster <wwooster@asrcenergy.com>; William Van Dyke <bvandyke@petroak.com> Subject: Other Order 117 (Hilcorp) Failure to Notify of Changes to an Approved Permit. Milne Point Unit J -01A, PTD 1991110 Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907)793-1223 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 Samantha Carlisle at (907) 793-1223 or Samantha.Carlisle(a?alaska.gov. STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Notify of Changes to an Approved ) Docket Number: OTH-15-031 Permit. Milne Point Unit J-0IA, PTD 1991110. ) Other Order 117 March 21, 2017 DECISION AND ORDER On November 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 Milne Point Unit well J -01A (MPU J -01A). The Notice was based upon Hilcorp's performance of well operations on MPU J-01 A by failing to obtain approval to change an approved program. The Notice proposed specific corrective actions and a $75,000 civil penalty under AS 31.05.150(a). Hilcorp requested an informal review. That review was held February 18, 2016. Summary of Promsed Enforcement Action: A review of well workovers performed at MPU by Hilcorp-operated rigs revealed three wells that had fill cleanout operations using nitrogen without AOGCC approval: MPU J -01A, MPU J -08A, and MPU J -09A, a violation of 20 AAC 25.507. After gathering information and further discussions with Hilcorp, AOGCC proposed a $75,000 civil penalty. Informal Review: On January 29, 2016 Hilcorp submitted a brief and appended documentation in advance of the Informal Review addressing, among other matters, the use of nitrogen a MPU J -01A.' Hilcorp neither disputed that it did not list nitrogen on its Sundry request nor that it used nitrogen during ' AOGCC agreed with Hilcorp's request that all four notices of proposed enforcement would be consolidated for purposes of an Informal Review. The four notices are Docket OTH 15-025 (MPU J -08A: Failure to Notify of Changes to an Approved Permit; Failure to Maintain a Safe Work Environment), Docket OTH 15-029 (MPU I-03: Failure to Notify of Use of Blowout Prevention Equipment; Failure to Test Used Blowout Prevention Equipment), Docket OTH 15-030 (MPU J -01A: Failure to Notify of Changes to an Approved Permit), and Docket OTH 15-031 (MPU J -09A: Failure to Notify of Changes to an Approved Permit). Other Order 117 March 21, 2017 Page 2 of 5 the cleanout. Instead, Hilcorp blamed AOGCC's lack of "comment" afterwards for its belief that listing nitrogen was not required. During the February 18, 2016 Informal Review, Hilcorp did not discuss specifics relating to the violation at MPU J -O IA. Discussion: Hilcorp commenced workover operations with the ASRI rig at MPU J-01 A on August 6, 2015. Sundry approval 315-459 dated July 30, 2015 authorized Hilcorp to pull a failed electric submersible pump (ESP) and rerun a new ESP completion. Because the request sought only approval to use lease water for well cleanout, the approval did not authorize the use of nitrogen for well cleanout. As part of the workover procedure, a fill cleanout step was included prior to running the new ESP and 2 -7/8 -inch production tubing. Daily reports for August 7-10, 2015 show the following well work was completed in preparation for the fill cleanout: ESP completion had been removed, a tapered fill cleanout string was run in the well to 4409 feet measured depth, and equipment was rigged up to perform the fill cleanout. The fill cleanout pumping operations began August 10, 2015. Hilcorp used lease water for circulating as part of the fill cleanout operation, then used nitrogen for the well cleanout prior to running the new ESP completion. In its brief, Hilcorp conceded "that certain operational conduct described in the Notices was not in accordance with its own or its contractors well-established policies or procedures." 2 Nonetheless, Hilcorp claimed that because AOGCC regulations were silent on the topic of fluids to be used in the course of a well workover that there was no requirement to submit information detailing the fluids to be used for well clean out. Hilcorp's claims are contradicted by its own actions. In the first of its four initial workovers at MPU, Hilcorp sought and obtained approval of a contingency plan for the use of nitrogen during well clean out.' 2 Hilcorp Alaska, LLC's Submission to the AOGCC for Informal Review of AOGCC Docket Nos. OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31; Submitted January 29, 2016 (30 pages, plus 23 multi -page Exhibits). 3 MPU I-15, PTD 2021520, Sundry Approval 315-158 Other Order 117 March 21, 2017 Page 3 of 5 A proposed program must include detail sufficient to enable the AOGCC to ensure the proper planning and safe conduct of activities on the well by rig and contractor personnel. Because this inquiry is undertaken on a well by well basis, the lack of AOGCC objection to one request does not provide blanket approval for that specific operation in subsequent well workovers No operator may undertake a change to an approved program or activity without AOGCC approval. Any application to change an approved program must state the well's current condition and describe the proposed change. In its request for approval of Sundry 315-459, Hilcorp represented to AOGCC that the cleanout would use lease water. As a result, nitrogen was not authorized for use during a fill cleanout of MPU J-01 A. After the Notice was issued, Hilcorp claimed that the use of nitrogen for a fill cleanout was a contingent plan executed only if well conditions warrant.4 A contingent plan constitutes a change to an approved permit requiring AOGCC approval prior to implementation. The point of requiring preapproval for this operation is to allow review of the entire proposed program, not just one of the alternatives from which Hilcorp may pick. Hilcorp's listing of nitrogen on an earlier Sundry request, along with its listing of lease water on its request here, belie Hilcorp's claims that it did not believe the Sundry required the entire program to be set forth. Findings and Conclusions: Prior to this violation, AOGCC issued several enforcement actions against Hilcorp, including imposition of a civil penalty. AOGCC also met several times with Hilcorp's Alaska managers regarding concerns about regulatory compliance, including a meeting with Hilcorp operations personnel at its Kenai field office to assist with its understanding of AOGCC expectations of regulatory compliance.5 These discussions were undertaken to draw attention to and help to stem Hilcorp's relatively high frequency of noncompliant activities. These actions do not appear to have had any significant impact on Hilcorp's conduct. ' Hilcorp correspondence dated October 9, 2015 (refer to AOGCC Docket 15-025) s Meeting requested and arranged by Hilcorp; held November 11, 2013 Other Order 117 March 21, 2017 Page 4 of 5 The AOGCC finds that Hilcorp has violated 20 AAC 25.507 in the conduct of workover operations at MPU J-01 A by failing to obtain prior approval for a plan change. The AOGCC has considered the factors in AS 31.05.150(g) in its determination of penalties for the MPU J -01A violation. Hilcorp has demonstrated neither mitigating factors relative to this incident nor that AOGCC missed information in reviewing the enforcement action. The potential severity of the outcome of Hilcorp's actions, Hilcorp's ongoing history of performing work outside of approved permits or management -of -change protocols, its history of compliance issues and the need to deter are significant factors in the AOGCC's analysis.6 However, during the past twelve months, Hilcorp has taken initiatives that have improved their overall regulatory compliance. Also, after the initial investigation of this incident, the AOGCC stopped work on all four Hilcorp workover rigs in Alaska from 10/1/15 to 10/26/15, until Hilcorp could demonstrate compliance with AOGCC's conditions for restarting well work. The AOGCC recognizes that this shutdown of well workover operations had a significant financial impact to Hilcorp. Now Therefore It Is Ordered That: A civil penalty in the amount of $80,000 is imposed for violating 20 AAC 25.507, for changing the work procedure in Sundry approval 315-459 by performing the cleanout of MPU J -01A using an unapproved contingent plan (nitrogen). Done at Anchorage, Alaska and dated March 21, 2017. //signature on file// Cathy P. Foerster Chair, Commissioner //signature on file// Daniel T. Seamount, Jr Commissioner //signature on file// Hollis S. French Commissioner 6 AS 31.05.150(g) requires AOGCC to consider nine criteria in setting the amount of a civil penalty. Other Order 117 March 21, 2017 Page 5 of 5 RECONSIDERATION AND APPEAL 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. Singh, Angela K (DOA) From: Carlisle, Samantha J (DOA) Sent: Tuesday, March 21, 2017 3:38 PM To: Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Cook, Guy D (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Micha► (DOA); Grimaldi, Louis R (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Pa►adijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity; AKDCWeIIIntegrityCoordinator; Alan Bailey, Alex Demarban; Alexander Bridge; Allen Huckabay; Andrew VanderJack; Ann Danielson; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Ben Boettger; Bill Bredar, Bob Shavelson; Brandon Viator; Brian Havelock, Bruce Webb; Caleb Conrad; Candi English; Cocklan-Vend►, Mary E; Colleen Miller, Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Darci Horner, Dave Harbour, David Boelens; David Duffy, David House; David McCaleb; David McCraine; David Tetta; ddonkel@cfl.rr.com; DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Elwood Brehmer; Evan Osborne; Evans, John R (LDZX); George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Gretchen Stoddard; gspfoff, Hurst, Rona D (DNR); Hyun, James J (DNR); Jacki Rose; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Watt; Jim White; Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); John Stuart; Jon Goltz; Chmielowski, Josef (DNR); Juanita Lovett; Judy Stanek; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Frank, Kevin 1 (DNR); Kruse, Rebecca D (DNR); Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Louisiana Cutler, Luke Keller, Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Mealear Tauch; Michael Bill; Michael Calkins, Michael Moora; MJ Loveland; mkm7200; Motteram, Luke A; Mueller, Marta R (DNR); Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly; Sharon Yarawsky; Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver R; Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Ted Kramer; Teresa Imm; Thor Cutler, Tim Jones; Tim Mayers; Todd Durkee; trmjrl; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Well Integrity, Well Integrity, 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; Corey Munk; Don Shaw; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Heusser, Heather A (DNR); Fair, Holly S (DNR); Holly Pearen; Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Joe Longo; John Martineck, Josh Kindred; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); Wayne Wooster, William Van Dyke Subject: Other Order 117 (Hilcorp) Attachments: other117.pdf Failure to Notify of Changes to an Approved Permit. Milne Point Unit J -01A, PTD 1991110 Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West Th Avenue Anchorage, AK 99501 (907) 793-1223 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 Samantha Carlisle at (907) 793-1223 or Samantha.Carlisle@alaska.&ov. INDEXES 10 Check No Check Date Check Amount 0082050058 05/04/2017 ',*******$160 000.00 PAY One Hundred Sixty Thousand Dollars and Zero Cents TO STATE OF ALASKA THE AOGCC ORDER 333 WEST 7TH AVE ANCHORAGE AK 99501-3539�-^-- OF Authorized Signature II6008 205005811' C L L3 L LO5861: 044440744811' APLEASE DETACH AT PERFORATION ABOVE^ "PLEASE DETACH AT PERFORATION ABOVE" Hilcorg Alaska LLC P. . Box 61529 HOUSTON TX 77208-1529 R - Check Number U820500581 ' 050217 05/02/2017 NITROGEN RELEASE FINE-NOVEMBER 2015 160,000.00 0.00 160,000.00 MAY 10 2017 160,000.00 1083380 Owner Check Date: 05/04/2017 Check Amount Carlisle, Samantha J (DOA) From: Bo York <byork@hilcorp.com> Sent: Friday, February 19, 2016 11:11 AM To: Schwartz, Guy L (DOA); Regg, James B (DOA); Carlisle, Samantha J (DOA); Quick, Michael J (DOA) Cc: David Wilkins; Justin Furnace Subject: Hilcorp Response to AOGCC Questions During 18 Feb 2016 Informal Review: OTH-15-024, -025, -029, -030, and -031 Attachments: 2015 Net Brochure_EN.PDF; Aug _Sep Calibrations.pdf Guy, Jim, Mike, and Samantha - Below are answers to questions you posed during the informal review yesterday. Let me know if there are other questions you asked that I did not capture and answer below. Q: Were any gauges installed on the valves on the well head for J -08A? A: Hilcorp's previously submitted drawings depict a valve on the IA and OA. A pressure gauge was on the OA valve monitoring pressure between the surface casing and production casing. The valve on the IA was removed for the RWO activitites. It is correctly shown in the drawings submitted on 23 Oct (shown below). n� M. IN/ 1 UMI 11YV VF LI)t%I IV14J VIE1J..® Nplt GEN PROCESS PIPING k INSTRUMENT NT QIAGRAN ASR -1 RIG ff�..ek.l' tl •, •� � I I, P1-11M..Ilfill'fv Exhibit 15 correctly shows the IA "casing valve" with no gauge but does not depict the OA valve and gauge. Standpipe ASR RIG SO P.M, Linc C22 i JK1 [Y NCRNO LineCAgke Line vaMc Q: When was N2 procedure developed? A: The Hilcorp N2 procedure was initially developed on 23 March 2015 for the 1-15 well. Q: Is the stripping head on the top of the ASR BOP tested as part of the BOP procedure? A: No, it is not tested as it is not part of the BOP well control system. Q: Was the work string (pipe) being moved during the N2 cleanout on J -08A? A: No, the work string was static and was not moved during the pumping of the N2 cleanout jobs. Q: What clean out depths were achieved with the N2 jobs? A: We washed down as deep as our open-ended mule shoe would allow and then held static while the N2 was pumped. Depths varied on all jobs. Q: Was annular BOP or stripping head used for the J -08A N2 pumping? A: Annular BOP. Q: Provide calibration of portable hand held gas detector utilized on ASR for J -08A and F-96. A: All portable gas detectors at Milne are Ventis MX -4 portable detectors. Hilcorp has a contract with Industrial Scientific "I -net" where the detectors are automatically calibrated every month via a docking/charging station. If an individual device is not docked over 7 days or is not calibrated in the course of the month, an alert is trigger. Milne did not receive any alerts in 2015. Note that one detector failed the calibration on 1 Aug but was recalibrated and passed same day. Gas detectors are portable and interchangeable within the field and we do not keep a record of which one is used in specific locations on any given day. Therefore, I can't state which device was utilized on J -08A or F-96. However, attached are the calibrations of all devices in the field over the month of Aug and Sept showing that all received a calibration within that month. We have 14-20 in the field on any given day (number fluctuates as we have some returned for maint to Industrial Scientific). Also attached is the iNet brochure detailing the detector program. Bo York Operations Manager, Milne Point bvork@Hilcorp.com 907.777.8345 907.727.9247 cell r (" a I a a a c c a I .a .a I .c .c .c ,a a 1 .� .j4 i .V a .� .S .� .5 .� l . .� .° I .� 'F) 'o o 'o 'o 'o 'o o i o 0 0 0 0 0 0' o 0 0 'o 0 0 0 0 0 0) '0 0 0 5 aia a a a a a a. a a. a. a. a s a;a a a a a a a a a a a,a a ala a a�a a �IF. 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E� E E� E 1 E; E� EI E I E EI E E E; E Ef E E N E� E� E� E N E N N E{ N I N N y h ti ti ti h i y ti ti y y ti ti ti ti � h It It v '-It'`i V1 ! .--Iry 1 V) V1 V) M M M M V) V) 1) (Z Q O O � p9O �I~O Op O'OI'rl nr OIp O O p p O O�OI��OI 0 0 0{ 0 0 o O 0�0 0 010 apo opo olo�Oiolo oI0 O Q10 0 olglo 0 0 W Ii N' v�lv S I V Nim �'d O OiN N N fV �I N N N O N a CY Q X o d N zip UIU .,'N ZIN U� zI%IC1 Q a �iIA A z� zI a O M' M V O {N�7 V V IM M eF f Nf N N f N O O, O I 'n N fj V1 I V 7 N N' --� 7 I N N' M M V1 i V1 ! M M N N 0 0 0 0 0 0 O O' O 1 0 O O O O O O O I O O 0 0 0 0 0 0 -n IMAGINE YOUR PEACE OF MIND. The Gas Detection People INDUSTRIAL SCIENTIFIC www.indsci.com IMAGINE WWW. I NDSCI . COM/I MAGI NE- I NET/ You're plenty busy focusing on the things that matter to your business. Amid your daily tasks is the hefty responsibility of ensuring your people are kept safe from hazardous gases and that they go home at the end of each day. Buying your fleet of gas detectors was easy, but then the challenges came. What challenges do you face in your program? -What is your process for regularly maintaining and servicing your gas detector fleet? - How do you maintain accurate records reflecting your gas detection program? - Do you know how your instruments are being used in the field; what your workers are exposed to; and at what levels they're exposed? The Gas Detection People INDUSMIAL SCIENTIFIC www.indsci.corn Wet Can Help Net is a subscription -based gas detection program designed to give you peace of mind that your equipment is properly maintained and proactively serviced; that you are able to provide required records on demand with minimal effort; and that your people are kept safe from hazardous gases. _ Instrument Maintenance- Q Fie1dVisibility � • Schedule instrument bump tests and _ . Understand how your calibrations to occur automatically instruments are being _ used in the field and the • Receive replacement units from risks your team faces Industrial Scientific when Net detects a malfunctioning instrument in your fleet —GI . Use data to proactively correct poor use behavior Owl Recorditeeping • Produce required records on demand • Eliminate the prone -to -error task of manually maintaining records Ax - How Wet Works 2. Docking station performs bump tests, calibrations, and uploads monitor data to iNet. 4. Replacement monitors are delivered to you should Net uncover a problem. Your team goes back into the field using reliable gas monitors. What our customers are saying about lNet: "With iNet, 1 don't have to worry about my gas detection program." (_-'r Conoco Phil) IP.S "iNet is a cost-effective solution that has removed the hassle of managing our gas detection fleet and has made our people much safer." - Sam Woollacott, South West Water INDUSTRIAL SCIENTIFIC www.indsci.com "Quick replacements of any monitors requiring work allows me to keep the plant operations running without missing a beat. 1 love iNet...end of story." - Rob Steckler, Dixie Chemical Is Wet njht for your program? To learn more about [Net click below to watch a video. 1 Yy While there, request to be contacted by an Industrial Scientific representative to determine if iNet is the right solution for your program. And begin to IMAGINE7 A--.-0-0 AMERICAS Phone: +11-412-788-4353 1 -800 -DETECTS (338-3287) North America Fax: +11-4112-788-8353 info@indsci.com ASIA PACIFIC Phone: +65-6561-7377 Fax: +65-6561-7787 info@ap.indsci.com EMEA Phone: +33-1-57-32-92-61 00-800-WORKSAFE (9675-7233) Europe Fax: +33-1-57-32-92-67 info@eu.indsci.com INDUSTRIAL SCIENTIFIC www.indsci.com REV 0115 © 2015 Industrial Scientific Corporation OHSAS 18001 ISO 9001 IS014001 Certified Certified Certified AMERICAS Phone: +11-412-788-4353 1 -800 -DETECTS (338-3287) North America Fax: +11-4112-788-8353 info@indsci.com ASIA PACIFIC Phone: +65-6561-7377 Fax: +65-6561-7787 info@ap.indsci.com EMEA Phone: +33-1-57-32-92-61 00-800-WORKSAFE (9675-7233) Europe Fax: +33-1-57-32-92-67 info@eu.indsci.com INDUSTRIAL SCIENTIFIC www.indsci.com REV 0115 © 2015 Industrial Scientific Corporation STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION SUBJECT: Informal Review Dockets: OTH-15-024, OTH-15-025, OTH-15-029, OTH-15-030, and OTH-15-031 NAME DATE: 2/18/2016 AFFILIATION � ' ✓ cs� i/Co/ e -y - C', Carlisle, Samantha J (DOA) From: Marc Bond <mbond@hilcorp.com> Sent: Friday, January 29, 2016 3:28 PM To: Carlisle, Samantha J (DOA) Cc: Larry Greenstein Subject: OTH-15-25, OTH-15-29, OTH-15-30, OTH-15-31: Hilcorp Alaska Submission for Informal Review Attachments: 2016-01-29 Hilcorp Submission to AOGCC for Informal Review w Exhibits.pdf Sam: Written Submission Per our discussion, attached please find a PDF of Hilcorp Alaska's submission to the AOGCC in the referenced matters for the Informal Review now scheduled for February 18, 2016. Larry and I delivered ten (10) hard copies of the submission in separate binders. If you need more, please let me know. Oral Statements At the Informal Review, the following Hilcorp Alaska representatives will be present: David Wilkins: Mr. Wilkins will address general matters regarding the management of Hilcorp Alaska oil and gas operations. Bo York: Mr. York will address the specifics of North Slope operations, particularly the facts related to the matters which are the subject of the notices of proposed enforcement referenced above. Justin Furnace: Mr. Furnace will address the overall Hilcorp Energy response to these matters. Please let me know if you have any questions. Marc Bond • Asst Gen Counsel Hilcorp Alaska, LLC 0:907.777.8309 • C: 907.331.7440 mbond@hilcorp.corn 3800 Centerpoint Drive • Ste 1400 • Anchorage • Alaska • 99503 This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. IN LANE POWELL ATTORNEYS & COUNSELORS February 24, 2016 VIA HAND -DELIVERY Ms. Samantha Carlisle BREWSTER H. JAMIESON 907.264.3325 jamiesonb@lanepowell.com C° 1 rEB ;,4 ?1 Executive Secretary III Alaska Oil and Gas Conservation Commission 333 W Seventh Avenue, Suite 100 Anchorage, AK 99501-3572 Re: Hilcorp Alaska, LLC AOGCC Docket Nos. OTH-15-025, OTH-15-029, OTH-15-030, OTH-15-031 Dear Ms. Carlisle: During the informal review, it was mentioned that Hilcorp would like to maintain the confidentiality of the individual's names involved in the incident. Several of the exhibits contained names and/or signatures of individuals. AOGCC requested that by March 3, 2016, Hilcorp provide a redacted copy of the informal review submission for Docket Nos. OTH-15-025, OTH-15-029, OTH-15-030, and OTH-15-031. Pursuant to that request, I am delivering to you four (4) hard copies and a DVD containing an electronic copy of the Redacted Version of Hilcorp's Submission for Informal Review, previously submitted on January 29, 2016. Please contact me directly at 907-264-3305, if you require any additional copies. Enclosures 129387.0002/6609889.1 www.lanepowell.com T. 907.277.9511 F. 907.276.2631 Very truly yours, LANE POWELL LLC Jeri Ann Jenson, egal to Brewster H. Jamieson A PROFESSIONAL CORPORATION 301 WEST NORTHERN LIGHTS BLVD., SUITE 301 ANCHORAGE, ALASKA 99503-2648 LAW OFFICES ANCHORAGE, AK PORTLAND, OR. SEATTLE, WA LONDON, ENGLAND RECEIVED t FEB 2 4 2016 MIM a Hilcorp Alaska, LLC's Submission to the AOGCC for Informal Review of AOGCC Docket Nos. OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31 Submitted: January 29, 2016 Mr. David Wilkins Mr. Bo York Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 100 Anchorage AK 99503-5826 Phone: (907) 777-8300 Email: dwilkinsnhilcoro.com Brewster Jamieson, Esq. Lane Powell PC 301 W. Northern Lights Blvd, Ste 301 Anchorage, AK 99503 Phone: (907) 277-9511 Email: jamiesonb@lanepowell.com I. INTRODUCTION On November 12 and 16, 2015, the Alaska Oil and Gas Conservation Commission ("AOGCC") issued four Notices of Proposed Enforcement Action ("the Notices") to Hilcorp Alaska, LLC ("Hilcorp"). Three of these Notices (Dockets OTH-15-025, OTH-15-030, and OTH-15-031) involve the use of nitrogen gas in well cleanout operations at the Milne Point Unit on Alaska's North Slope. The fourth Notice (OTH-15-029) concerns a different alleged failure but it is cited in each of the other Notices as justification for enhancing the penalties assessed against Hilcorp. Accordingly, Hilcorp requested, and the AOGCC agreed, that all four Notices would be consolidated for purposes of an Informal Review, currently scheduled for February 18, 2015. Hilcorp concedes that certain operational conduct described in the Notices was not in accordance with its own or its contractors' well-established policies and procedures. Where this is true, Hilcorp has candidly acknowledged these deficiencies, and has taken appropriate remedial action to prevent such occurrences in the future. However, Hilcorp also respectfully believes that the proposed penalties are impermissively excessive, based on an incomplete understanding of the factual record, or arise from regulatory provisions that are ambiguous. Hilcorp also is concerned that in certain respects AOGCC is attempting to enforce its regulation in a manner beyond its statutory mandate, but within the statutory authority of other regulatory agencies. Of greatest concern to Hilcorp are comments in the Notices that are extreme and, to the extent based on incorrect assumptions of fact, unjustified and unfair. Hilcorp's highest priority is, and will continue to be, to conduct its operations in a safe and compliant manner, and it has worked diligently with AOGCC to understand and address its concerns. As demonstrated in this 1 On Milne Point well I-03 Commission alleges, incorrectly as demonstrated herein, that Hilcorp failed to notify the Commission regarding the use of BOPE upon isolation of a casing leak, and also failed to retest the BOPE after this operation. 2 E.g., In the Notice for Dkt. OTH-15-029, which concerns the alleged failure to notify the Commission regarding the use of BOPE on well 1-03 and the concomitant failure to re -test the BOPE, the Commission writes, "The disregard for regulatory compliance is endemic to Hilcorp's approach to its Alaska operation and virtually assured the occurrence of this violation." As discussed infra at Section IIE, the alleged violation is not factually based, and therefore the extreme conclusion is unwarranted. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 2 of 30 brief, Hilcorp has taken numerous corrective actions in light of the J -08A incident. Hilcorp invites an open discussion of these issues in the informal review, and hopes one outcome will be a commitment to a greater degree of open communication between Hilcorp and AOGCC in the future. II. STATEMENT OF FACTS The most serious penalties proposed by AOGCC in the Notices are contained in Dkt. OTH-15-25, and concern an incident which occurred during workover operations at Milne Point well J -08A on September 25, 2015. The rig used during this operation was Automated Service Rig 1 (ASRI). ASR1 was constructed by Rangeland Drilling Automation, Inc. in the spring of 2015, and was put into service on July 19, 2015. The rig is operated by Integrated Well Services (IWS) personnel working in two shifts, from 6:00 am to 6:00 pm and 6:00 pm to 6:00 am. These crews were directly supervised by two IWS toolpushers, whose shifts were noon -to -midnight and midnight to noon. At the time of this incident, Hilcorp was represented on the worksite by a very experienced wellsite leader, who provided overall operational direction and supervision, and who was onsite 24 hours per day. A. Hilcorp Contractor Safety Expectations and Practices. As part of its own comprehensive safety program,3 Hilcorp requires by contract that all of its contractors, including IWS, to maintain their own safety programs, train their employees to recognize work hazards, and to adhere to all applicable workplace safety standards: 3 See, Ex. 1, Hilcorp Safety Manual Table of Contents (a full copy of the Safety Manual is available upon request). Hilcorp has a comprehensive safety program that ensures standards of federal, state and local regulatory agencies are adhered to in the workplace, and ultimately that personnel are safe and the environment protected. The program includes the standard elements of a Safety Management System, including Employee Training and Contractor Oversight. It is implemented by ten safety professionals, one fire chief, and one safety systems administrator. Four of the safety professionals work on the North Slope while another four work in the Cook Inlet directly supporting field activities. Additionally Hilcorp Alaska's environmental department has twelve environmental professionals who oversee the environmental aspects of Hilcorp's activities. Two environmental specialists work on the North Slope; eight others work out of the Anchorage office and deploy to field locations as work conditions dictate. In addition to the twenty-four safety and environmental professionals staffed in Alaska, Hilcorp has another eighteen Environment, Health and Safety (EH&S) professionals staffed in the Lower -48. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 3 of 30 [IWS] must perform all work and services in accordance with all applicable safety regulations, precautions and procedures, and shall employ all protective equipment and devices required by governmental authorities, or reasonably recommended by industry safety associations. [Hilcorp] expects [IWS] to train its employees to recognize common hazards associated with their work tasks and [IWS] must adhere to all Hazard Communication Standards as required by all applicable Federal, State, and Local Safety Regulations or industry standards. 4 Hilcorp also mandates that everyone, including IWS personnel, have Stop Work Authority; All [Hilcorp] employees, [IWS] and its employees, agents or sub -contractors have "Stop Work Authority" for any unsafe or potentially unsafe situation. Any potential hazards identified must be reported immediately to a [Hilcorp] representative and work stopped until the hazard can be properly understood and corrected.5 IWS utilizes the DuPont Stop Work Program and incorporates the DuPont Stop Work cards into the daily operations. Personal Protective Equipment, Safety Meetings, and Job Safety Analyses are additional contractual requirements.6 Hilcorp EH&S professionals worked extensively with IWS prior to start-up of ASR1, and were assured that IWS's safety program was fully compliant.7 After ASR1 was placed in service, Hilcorp EH&S professionals regularly visited the rig and conducted audits, orientation and other support.8 Hilcorp's Wellsite Leader was aware of and observed participation at safety meetings and JSAs by IWS personnel. After the J -08A incident, Hilcorp obtained further confirmation, through copies of training logs, JSAs, STOP cards and Near Miss Reports,9 that IWS personnel regularly participated in and contributed to these vital programs. 4 See Ex. 2, Hilcorp Alaska, LLC Minimum Contractor Safety Requirements, which is an exhibit to the Hilcorp/IWS Master Services Agreement in effect at the time of the incident. 5 Id. 6 Id. Ex. 3, ASR Rig Crew Contacts. 8 Id. Ex. 4, ASRl STOP Cards and Near Miss Reports. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 4 of 30 B. Milne Point Workover Project Planning and Sundry Submission Pursuant to its general powers and duties set forth in AS 31.05.030, the AOGCC has promulgated regulations 10 requiring operators to submit (a) an Application for Sundry Approvals (Form 10-403) ("Sundry Application") prior to commencement of workover operations, and (b) a Report of Sundry Well Operations (Form 10-404) ("Sundry Report") after completion of such operations. The Commission may waive these requirements "for wells in a pool for which pool rules have been prescribed," 11 which it did for certain BPXA's workover operations at Milne Point prior to Hilcorp becoming operator. Upon becoming operator at Milne Point, Hilcorp began submitting Sundry Applications for all workover projects, and received approvals from AOGCC personnel prior to commencement of any operations. It has also regularly submitted Sundry Reports at the conclusion of all such operations. In 20 ACC 25.280(b), the Commission has listed six specific types of information that must be provided with a Sundry Application. 12 Section 280(b)(5) requires "a description of wellbore fluid to be used for primary well control" but it is otherwise silent on the topic of liquids or gasses that might be employed during the course of any particular workover, such as for well cleanout. In addition, Section 280(b)(2) requires submission of "a copy of the proposed 10 20 AAC 25.280. 11 20 AAC 25.280(e). 12 These are: (1) the current condition of the well; (2) a copy of the proposed program for well work; (3) unless already on file with the commission, a diagram and description of the well control equipment to be used, including if applicable a list of the blowout prevention equipment (BOPE) with specifications; (4) the maximum downhole pressure that may be encountered, criteria used to determine it, and the maximum potential surface pressure based on a pressure gradient to surface of 0.1 psi per foot of true vertical depth, unless the commission approves a different pressure gradient that provides a more accurate means of determining the maximum potential surface pressure, such as using a stabilized shut-in tubing pressure; (5) a description of any wellbore fluid to be used for primary well control; and (6) the current bottom -hole pressure, or, if data setting out the actual pressure are not available, an estimate of the current bottom -hole pressure. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 5 of 30 program for well work," but provides no further detail or guidance regarding the content or level of detail of that item. Specifically, there is no requirement for submission of detailed descriptions of each particular step of the operation, or for submission of detailed written procedures for each of those steps. Box 12 of Form 10-403 lists three types of attachments" that can be submitted with the Sundry Application, with a box next to each to be checked as an indication of which of those are being submitted with the application. In every Sundry Application for Milne Point workovers submitted prior to the J -08A incident (including each of the Summary Applications that are at issue herein), Hilcorp informed the Commission that it was submitting only a Description Summary of Proposal and a BOP Sketch; in every case, the Commission approved the Sundry Application. Prior to the J -08A incident, Commission staff did not advise that it expected Hilcorp to state whether it intended to or might employ nitrified fluids or other additives to assist with well cleanout. A total of 4 workovers (including J -08A) involving the use of nitrogen gas have been performed at Milne Point since Hilcorp assumed the role of operator in early 2015, two using the Nordic 3 rig, and two using ASR1.14 On the first such job—MP Well I-15—the Hilcorp operations engineer indicated that nitrified fluids, surfactants and gel sweeps might be employed if "unable to gain circulations or solids to surface."' 5 This Sundry Application was approved, and the description of the proposed cleanout methods received no comment. At the end of this job, a 10-404 Sundry Report form was submitted, with a Weekly Operations Summary detailing the use of nitrogen gas in the cleanout. 16 The AOGCC again made no comment. The same operations engineer submitted a Sundry Application for Well J -09A (approved the same day as the Sundry Application on I-15),17 but indicated only the plan to "circulate the 13 Description Summary Proposal, Detailed Operations Program, and/or BOP sketch. 14 These are: Well I-15, Ex. 5 (Form 10-403, Sundry No. 315-158, approved March 25, 2015, and Form 10-404); Well J -09A, Ex. 6, (Form 10-403, Sundry No. 315-162, approved March 25, 2015, and Form 10- 404); Well J -01A, Ex. 7 (Form 10-403, Sundry No. 315-459, approved July 30, 2015 and Form 10-404) and Well J -08A, Ex. 8 (Form 10-403, Sundry No. 315-527, approved August 31, 2015, and Form 10- 404). " Ex. 5, Well I-15. 16 Id. 17 Ex. 6, Well J -09A. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 6 of 30 well clean" without indication of the fluid, gas or other products that might be required to complete the cleanout operation. Seawater and nitrogen were used in that operation, and this was duly noted on Weekly Operations Summary submitted with the 10-404 Sundry Report form, to which the AOGCC made no comment.' S The third workover involving nitrogen use --on well J-01A—was performed by ASR1. A different Hilcorp operations engineer submitted a Sundry Application which did not mention that nitrogen gas would or might be used; 19 again, this fact was noted in the materials submitted with the 10-404 form, 20 without comment from the AOGCC. The final project involving nitrogen —also performed by ASR1—was on J -08A, and the Sundry Application again did not state whether nitrogen would or might be used during the well cleanout. 21 Hilcorp fully reported the incident at J -08A to the Commission, including the use of nitrogen. Its use was also clearly identified in documents submitted with the 10-404 following conclusion of the operation. 22 As a result of the incident at J -08A, Hilcorp first became aware that the AOGCC expected disclosure of intended or possible nitrogen use in Sundry Approvals, and that if the need to use nitrogen became apparent during the operation (and after its Sundry Application had been approved), that this would constitute "substantive change" requiring notification to the Commission pursuant to 20 AAC 25.507.23 In response, Hilcorp has altered its practice to require that future Sundries will note where the use of nitrogen is reasonably anticipated, and 18 Id. 19 Ex. 7, Well J-0 IA. 20 Id. 21 Ex. 8, Well J -08A. 22 Id. 23 The first and operative sentence of 20 AAC 25.507 provides in relevant part: If an operator desires to make a substantive change in a[n] . .. activity for which commission approval is required and has been obtained ... complete details of the well's current condition and the proposed change must be submitted to the commission with [a Sundry Application] .... Nothing in the regulations suggests that using nitrogen to assist in well cleanout operations is "substantive," and that qualifier is not defined or discussed in any other regulation. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 7 of 30 contact the Commission prior to use of nitrogen where its use was not reasonably anticipated and therefore not noted in the Sundry. 24 C. The J -08A Incident. On September 25, 2015, three IWS employees (a toolpusher and two operators) were overcome by nitrogen gas inside the tank module of the ASR1 rig. An investigation team was convened to conduct an on-site investigation, resulting in an Internal Incident Investigation report, 25 an event sequencing chart, 26 a Root Cause Analysis 27 and a Lessons Learned Summary. 28 All of these items have previously been provided to the Commission. In order to assist the J -08A well cleanout, Halliburton was engaged to deliver and pump nitrogen to the ASR1 rig. Job Safety Analyses were conducted as the night crew came on duty at 6:00 pm on the 24th, 29and again when the day crew came on tour at 6:00 am on the 25`n 30 Both IWS toolpushers attended both JSAs, and the topic of nitrogen pumping was covered at both meetings. The 6:00 am meeting notes indicates discussion occurred of both the hazards (3rd party work, pressure, plugged lines, and loss of oxygen) and controls (good communications, monitoring pressure, avoidance of nitrogen clouds, and avoidance of areas where nitrogen is present). These items were all appropriate and accurate, and, indeed foreshadowed issues that later arose. The procedure involved simultaneous pumping of water and nitrogen down the annulus, with the intended goal of floating fluids and solids at the bottom of the well up and out the tubing. The returns, including fluids, solids and nitrogen were to be routed from the tubing to an open-air bleed tank located away from the other structures on the wellsite. 24 See infra, note 42. 25 Ex. 9, Internal Incident Investigation Report. 26 Ex. 10, Event Sequencing Chart. 27 Ex. 11, Root Cause Analysis. 28 Ex. 12, Lessons Learned Summary. 29 Ex. 13, JSA 9/24. This JSA form indicates that this meeting was conducted at 5:43 pm on September 24"'. 30 Ex. 13, JSA 9/25. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 8 of 30 The Halliburton crew made its connections to the ASR1 rig starting just after midnight on the 25th, after which it conducted another safety meeting at 2:10 am.31 A nitrogen line was run from Halliburton's truck to a T junction, which also connected to the ASRI's pump; the third leg of the T junction was connected to the well annulus (or kill side). Check valves were installed on the kill side of the T junction, in order to prevent nitrogen or well fluids from flowing back into the ASR1 pump line. 32 The only pressure gauge on the pump line was located on the kill side of the check valve—this meant that when there was back pressure (i.e., well pressure) on the check valve, it would close, and the gauge would only "see" pressure between the pump and the check valve. 33 After making its connection and conducting a pressure test to 3500 psi, the Halliburton crew began pumping nitrogen at 2:40 am. The volume of nitrogen was gradually increased, to 1200 scfm, and pumping proceeded for approximately 2 hours, when a leak developed in Halliburton's nitrogen hose. The pumping was suspended for approximately 25 minutes while the hose was replaced, after which the pumping continued from 4:55 am to 6:30 am, when nitrogen pumping ceased. The wellsite leader monitored returns to the bleed tank, and these indicated that the nitrogen cleanout had been a success. The Halliburton crew then stood by while the ASR1 crew pumped 50 bbl of seawater down the annulus, and monitored the well to ensure that the nitrogen had been removed. After pumping the first 50 bbl seawater pill, the pressure gauge on the tubing indicated 0 psig, while the annulus pressure indicated 300 psi—as noted above, however, the gauge which the crew relied on for annular pressure was reading the pressure trapped between the check valve and the ASR1 pump. In reality, the annular pressure was likely at least 1000 psi. The wellsite leader then released the Halliburton crew at approximately 8:00 am, who disconnected its nitrogen lines from the T junction (but left the T junction and the check valves in place). The wellsite leader called for a second 50 bbl seawater pill to be pumped down the annulus, but after only approximately 4 bbls, the crew encountered an unexpected pressure spike 3t Ex. 14, Halliburton Job Log. 32 Ex. 15, ASR1 Fluid Flow Diagram J -08A Incident. 33 Id. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 9 of 30 to around 1100 psi, which was thought to be due to an obstruction or a closed valve. This was reported by radio to the wellsite leader, who reportedly responded, "I'm confused fellas, let's sit down and talk." He directed the crew to stop pumping, and to bleed off what was anticipated to be a relatively small quantity of fluid. At this time, the IWS toolpusher was with the wellsite leader in the wellsite leader's office, located approximately 200-300 feet away from the rig and tank modules. The IWS operators (MB and JG34) determined that in order to bleed off the annulus pressure, the only readily available flow path was through the choke manifold and into the mud pits. On the way to the mud pits, the flow would go through a gas buster, which is a tank with baffles that directs liquid into the mud pit tanks, while it directs gas out a pipe which vents to the atmosphere at the top of the pit trailer. 35 The toolpusher met MB in the manifold room, 36 located at one end of the pit trailer, while JG stayed on the rig floor. MB walked down the lines from the rig floor, through the choke manifold and into the mud pit tank, which was the expected path for the fluid being bled off the annulus. MB reports that he simply missed the dump valve on the bottom of the gas buster. It is unclear whether the toolpusher also walked down the flow line path with MB; it is clear that the wellsite leader, who remained in his office, did not. As the bleed -off began, the toolpusher returned to the wellsite leader's office, while MB was in the manifold room and JG was on the rig floor, each monitoring the respective pressure gauges. 37 The noise level in the manifold room increased significantly, indicating that a gas, and not a liquid, was being bled off through the choke manifold. JG attempted to raise MB on the 34 The operators' initials will be used to protect their identities. 35 Id. 36 Ex. 16, J -08A Jobsite Overview; Ex. 17 ASRI Tank Trailer Passenger Side View; Ex. 18 ASR1 Tank Trailer Driver Side View. 37 JG was monitoring the pressure gauge at the pump, which, as noted previously, was "blind" to the annular pressure because of the check valve. Upon opening the HCR valve to route the annular returns through the choke manifold and into the pits, the pressure gauge on the choke manifold began recording the actual annular pressure. That gauge was visible in the manifold room on a screen, which would also have been viewable in the wellsite leader's office. It is believed that the pressure against the check valve was nearly equal to the annular pressure when the crew stopped pumping. This would have led to similar readings at both pressure gauges when the HCR valve was opened. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 10 of 30 radio, who did not respond due to the noise. JG then went to the manifold room and motioned to MB to join him on the stairs between the manifold room and rig floor. They walked into the tank room (immediately adjacent to the gas buster) in order to exit the tank trailer and proceed up the stairs toward the rig. After only this brief passage through the tank room, both remarked that they were light headed and feeling funny but were not thinking clearly enough to associate these symptoms with their work environment. JG then radioed the toolpusher to meet him by the tank trailer. MB stayed behind, and went back to his "station" in the manifold room. When they met outside, JG told the toolpusher that he and MB were both "loopy and dizzy." The toolpusher then stated that he would check this out, but did not stop the operation, and did not inform the wellsite leader of this development. They both walked around the back end of the tank trailer to the opposite side, and then to the front of the trailer where there is another set of stairs leading directly into the manifold room. As they passed the back of the trailer, the toolpusher indicated to JG that the mud hatch at the back of the trailer should be opened for extra ventilation. The toolpusher and JG arrived in the mud room and encountered MB. MB stepped out onto the landing for fresh air, JG stepped into the manifold room, and the toolpusher entered the tank room, presumably to open the mud hatch at the rear of the trailer. Again, the toolpusher did not inform the wellsite leader or shut down the job. After about 15-20 seconds, JG went into the tank room, and upon ascending the steps, observed the toolpusher in the far end near the mud hatch. JG then took a deep breath (right next to the gas buster), with the intent of assisting the toolpusher. He blacked out about halfway into the room, but he managed to reverse his direction and exit the trailer at the front entrance. MB then went into the tank room via the door between the manifold room and tank room, saw the toolpusher slumped at the back of the tank room, and then immediately went back to the manifold room and shut the choke valve to stop the pressure flow. He took a deep breath, re-entered the tank room, made it to the mud hatch which he opened, and then positioned the toolpusher next to the open hatch. He managed to make it back to the tank room side exit, where he was overcome on the stairs outside the exit. JG, in the meantime, had recovered sufficiently to see MB at the tank room entrance, assist him outside, and then make his way to the rig floor, where he shut in the well completely. He then sounded the man down alarm, and an emergency response was initiated. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 11 of 30 The toolpusher, JG and MB received oxygen, and were transported to the Milne Point unit clinic for evaluation. An incident team was assembled, and an investigation conducted. AOGCC was notified, and its representative went to the wellsite to investigate. Presumably, a report of the AOGCC investigation was prepared, but this has not been provided to Hilcorp as of the date of this submission. D. Hilcorp Has Engaged in Extensive Efforts to Identify and Correct the Causes of the J -08A Incident. As noted above, immediately after this incident, Hilcorp voluntarily conducted a thorough investigation, which identified and considered many potential causes that led to this incident. In addition, Hilcorp prepared a Comprehensive List of Causes (CLC),38 and a corresponding CLC Corrective Actions matrix 39 detailing numerous action items to address the CLC. A Lessons Learned Summary 40 was also prepared and voluntarily distributed widely throughout the company and to other North Slope producers. Hilcorp's investigation was rapid, candid and self-critical. Hilcorp has also cooperated fully with the Commission's own investigation, and agreed to all conditions imposed by the Commission prior to recommencing ASR1 operations. All but one of the items on the CLC Corrective Actions matrix have been completed .41 These corrective actions range from locking and tagging out the dump valve on the gas buster, to providing further training regarding the ASR1 rig's choke manifold and associated flow lines, to supplementing the rig's gas detection system with low oxygen sensors, to providing in -ear headsets to facilitate communication in high noise environments, etc. In addition, Hilcorp effected a leadership change at ASR1, now assigning two wellsite leaders (instead of one) to manage the drilling programs. 38 See, Ex. 11 (Comprehensive List of Causes contained in Root Cause Analysis). 39 Ex. 19, CLC Corrective Actions Matrix. 40 Ex. 12, Lessons Learned Summary. 41 Item 5 of the CLC Corrective Actions Matrix, installation of low oxygen detectors, is very close to completion. The detectors have been installed, but have not yet fully been wired and commissioned. That will occur by mid-February, during the ASR1 crew's scheduled time off. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 12 of 30 Significantly, Hilcorp has also changed its approach to the preparation of Sundry Authorization forms to standardize the level of detail provided to the Commission. Prior to this incident, there was some degree of variability in the level of detail submitted to the Commission to comply with the requirement in 20 AAC 25.280(b)(2) for "a copy of the proposed program for well work." Some operations engineers at Milne Point tended to provide more of a summary with the Sundry Authorization, and then provide a more detailed work program to the field. Other operations engineers provided a summary procedure to both, with the expectation that the field personnel would be better suited to develop detailed procedures matching the on-site conditions at the time of the operation. Prior to the J -08A incident, Commission staff routinely approved workover plans with more or less detail, and did not express a preference or expectation for one format over the other. Hilcorp has now adopted a practice intended to standardize Sundry Authorization submissions, and to ensure both that the submitted procedures are adequately detailed, and that these same procedures will be provided to the wellsite for execution. 42 Deviations from the submitted procedures require notice to and approval from the Commission. 42 Ex. 20, email from Bo York (Operations Manager at Milne Point) to Hilcorp personnel, dated November 30, 2015. In relevant part, Hilcorp management expects strict adherence to the following practices: Prior to Initiating Well Work: 1. Operations engineer responsible for the well work will develop the procedure with adequate detail to ensure field execution may occur within the steps included in the procedure and all AOGCC requirements are addressed. 2. Regulatory Tech (Tom Fouts) will generate Form 10-403 to accompany the procedure. 3. Operations engineer that developed the procedure will review the procedure with the Field Foremen and Well Site Manager that will be performing the work. Intent is to obtain their comments and input on the steps and to leverage their 20+ years of performing well work. 4. Operations engineer will provide the reviewed procedure and Form 10-403 to the operations manager for review and schedule a peer review meeting with the other operations engineers in town. Typically this meeting will occur on Friday after the AFE review meeting but can be scheduled at any time. Field Foreman and WSMs should also be invited to this meeting. 5. After the changes are incorporated from the peer review, the operations engineer will initial the Form 10-403 and the operations manager will sign it. (continued) Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 13 of 30 All of the efforts detailed above (most of which were voluntarily and independently taken prior to receipt of the AOGCC Notices) demonstrate Hilcorp's sincere and thoughtful desire to improve both safety in its operations and compliance with the Commission's expectations. As discussed infra,43 these actions should be considered in determining the amount of the penalty to be assessed for the violations detailed in the Notices. E. The I-03 Alleged Failure to Report Use of Blowout Prevention Equipment. The Notice at Dkt. OTH-15-029 relates to an incident that occurred on May 2, 2015, during a workover of MP Well I-03, which was being performed for the purpose of straddling a casing leak which had been discovered previously. After the straddle assembly was successfully set, the well began to flow, which was an expected possible consequence of the operation. The BOPE, which was already closed in anticipation of the possible flow, was used to restrict the flow of the well while it was weighted up with fluid. 6. The Reg Tech will submit the 10-403, procedure, and all attachments to AOGCC two weeks prior to performing the work. 7. The Reg Tech will track the submittal and let the operations engineer know once approval is received. Work Execution. 1. The operations engineer and WSM are responsible for executing the work. 2. Prior to starting the work, a kick off meeting will be held by the WSM with the rig crew. The entire procedure will be walked through and any special safety considerations will be addressed. The rig crew should understand the procedure and the approved steps. This meeting will be documented on a safety meeting sign in sheet. 3. ANY deviation from the approved procedures will be discussed with the operations engineer and in turn the AOGCC representative. Work will not proceed until the deviation is approved by AOGCC. 4. ANY step or detail not included in the approved procedure but is discovered during well work activities and needs to be added will be discussed with the operations engineer and in turn the AOGCC representative. Work will not proceed until the addition is approved by AOGCC. 5. I repeat this....If the step is not included in the approved procedure or if a detail is added/changed, work will stop until the operations engineer notifies the AOGCC and the change/added step is approved. The operations engineer may get verbal approval but ALWAYS followed up with written confirmation via email. (emphasis in original). 43 At Section IIIB(8). Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 14 of 30 The wellsite leader advised Hilcorp's team by email of the success of the straddle and that the well had begun to flow. 44 Hilcorp's operations engineer responded: ... please make sure that you notify AOGCC of closure of BOPS due to well control within 24hrs. Looks like you have everything under control. The wellsite leader then responded "Ha they were already closed!" referring to the fact that the BOPE had been closed in anticipation of the well flowing when the packer placed during the operation was released. The wellsite leader nevertheless sent an email message to several AOGCC personnel, including Jeff Jones and James Regg, advising them as follows: Utilized Annular BOP for Shut in while waiting to weight up after successful straddle isolation. Weighting up fluid density .5 ppg. Not sure if notification required in this situation. 45 James Regg responded to Hilcorp's wellsite leader, "If planned step in your operation report is not required. ,46 Accordingly, no further report was made to the AOGCC. In its Notice, the Commission alleges that Hilcorp violated 20 AAC 25.285 by failing to provide notice of the BOPE use, and by failing to re -test the equipment before re-entering the well after its use. However, the Commission apparently overlooked the above -quoted communications between Hilcorp and AOGCC personnel. Pursuant to 20 AAC 25.285(1)(2), routine use of BOPE in workover operations where such use is not suspected to have compromised its effectiveness is an exception to the retesting requirements of 20 AAC 25.285(f)(2) .47 Section .285(f)(2) requires a re -test of BOPE when it is "used for well control or other equivalent purpose, or when routine use of the equipment may have compromised its effectiveness ...." Since that is not how the BOPE was used in this instance, no re -test was required. Under these circumstances, Hilcorp respectfully disagrees with the Commission's imposition of a fine. Based on the communications between Hilcorp and AOGCC staff 44 Ex. 21, Email string between WB and Chris Kanyer, May 2, 2015. 45 Ex. 22, Email from WB to AOGCC, May 2, 2015. 46 id. 47 Hilcorp personnel advise that the industry shorthand of "closing the BOP in anger," as distinguished from routine use, is the trigger for the re -testing requirements of 20 AAC 25.285(f)(2). Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 15 of 30 discussed above, it is clear that Hilcorp did not willfully disregard 20 AAC 25.285(0. The fact that Hilcorp promptly reached out to AOGCC staff to clarify the regulatory requirements demonstrates Hilcorp's good faith efforts to comply. Moreover, Hilcorp does not believe the factual circumstances surrounding the I-03 workover establish a sufficient basis to enhance the penalties proposed in the other Notices 48 at issue here. F. The Facts Do Not Justify the AOGCC's Use of Inflammatory Language. In proposing fines for these and other violations, the Commission employs particularly harsh language in the notices of proposed enforcement. Regardless of the nature of the alleged violation, or its relationship to other alleged violations, each notice of proposed enforcement states the following: [This] violation is neither isolated nor innocent and is emblematic of ongoing compliance problems with Hilcorp rig workover operations. 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. Hilcorp conducts many operations in over 20 units and fields in Cook Inlet and on the North Slope. Virtually all of these operations are permitted, conducted, concluded, and reported in full compliance with AOGCC and other statutes and regulations. Rather than operating with a disregard for compliance, Hilcorp works diligently and in good faith to comply with all applicable laws and regulations, and has swiftly implemented corrective actions where it has fallen short. Therefore, the Commission's use of inflammatory language in the notices is not justified by the facts. III. ANALYSIS OF PROPOSED FINES Hilcorp believes that the enforcement action proposed by the Commission in the Notices raises serious concerns about the scope of the Commission's authority, as well as the cumulative nature of the proposed fines. These concerns are addressed infra in section IV. 48 Dockets OTH-15-025, 030 and 031. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 16 of 30 This section discusses Hilcorp's concerns with the fines, using the factors contained in AS 31.05.150(g), which provides: 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. Hilcorp respectfully submits that if due regard is given to these factors, the fines proposed by the Commission should be substantially reduced, and in some instances eliminated. A. $250,000 Total Fines for Failure to Provide Notice of Expected or Potential Nitrogen Use in Workover Operations. The Commission issued three Notices as a result of workovers that employed nitrogen. The Notice at docket OTH-15-025, which addresses the incident at J -08A, proposes an overall fine of $700,00049 related to this incident, with $100,000 being assessed for performing the 49 This Notice also assesses a $20,000 fine for late reporting of the BOPE test conducted prior to startup after the J -08A incident. Although this late reporting (of a successful BOPE test) was pure oversight and a departure from its otherwise timely BOPE test submittal practice, Hilcorp does not contest that it submitted its BOPE test results three days late. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 17 of 30 cleanout of J -08A using an unapproved contingent plan. The Notices at Dockets OTH-15-030 and 031 relate to two other workovers that employed nitrogen, and propose a fine of $75,000 in each instance. The Notice at docket OTH-15-029 relates to a different issue entirely, 5' but is cited as an aggravating factor which justifies the severe penalties contained in the other Notices. Hilcorp questions the regulatory basis for, as well as the amount of, the proposed fines. As noted previously, 51 the Commission has promulgated no regulation nor issued any guidance stating or even suggesting that Sundry Applications must include mention of the expected or potential use of nitrogen gas during the well cleanout portion of a workover operation, or that deciding to use nitrogen due to unforeseen factors constitutes a "substantive change" of the approved activity. 52 Well cleanout is a standard step in every workover at Milne Point. The use of seawater, nitrogen, or other substances is standard industry practice and depends on actual well conditions encountered during the operation. On the one occasion where Hilcorp mentioned in its Sundry Application that nitrogen or other additives might be employed ,53 the Commission made no comment. On the two other jobs where nitrogen was not mentioned in the Sundry Application but used during the operation, this fact was clearly identified in material submitted in the Sundry Report forms 10-404 after the conclusion of the operations—again, without any comment from the Commission that it considered this a "substantive change" of the operations. In the absence of any regulation, guidance or mention of this topic by the Commission, Hilcorp's failure to include the potential for nitrogen use in Sundry Application stemmed from a good faith belief that such mention was not required. The failure to include mention of nitrogen was not due to a willful failure to comply or for the purposes of deceiving the Commission. Hilcorp received no benefit, either—the Commission's previous silence regarding the use of nitrogen (both before and after workovers involving the use of nitrogen) hardly gave Hilcorp the so Discussed supra, at Section IIE. 51 Supra, at Section IIB. " See discussion at Section IIB, supra regarding the lack of any definition of "substantive change" in the Commissions regulations or guidance; as well as the fact that the Sundry Application form 10-403 does not inquire on this or similar topics. 53 MPU Well I-15 on March 24-29, 2015. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 18 of 30 sense that it could avoid scrutiny or otherwise benefit if it failed to seek pre -approval of nitrogen use. Thus, factors 1, 2 and 5 of AS 31.05.150(g) do not support imposition of any fine, much less that the fine should be enhanced. In addition, there is no indication that the failure to mention nitrogen in the Sundry Applications, or to notify the Commission of its use during the operation, was in any way a cause of the IWS personnel being overcome by nitrogen. At the time of the incident, the nitrogen pumping was concluded, and Halliburton's nitrogen truck had been disconnected from the rig. The release occurred not because the nitrogen cleanout was performed incorrectly, but because, inter alia, the rig crew failed to manage a change in flow direction correctly. Notifying AOGCC personnel prior to the pumping would not have prevented this incident; likewise there is nothing to suggest that failing to notify AOGCC personnel of the possible use of nitrogen during the workover made the occurrence of this event more likely. Thus, factors 3 and 4 of AS 31.05.150(g), which consider the causal connection between the violation and the actual or potential injury or threat to public health and safety, do not support imposition or enhancement of any fine. Regarding factor 6 of AS 31.05.150(g), and as addressed supra in Section IIE, the Commission has improperly alleged violations of 20 AAC 25.285(f) as a basis for these fines. As noted previously, 54 Hilcorp has now adopted procedures to both standardize and improve its Sundry Applications. Hilcorp respectfully suggests that the Commission's expectations for its Sundry Applications in general, and for notification about anticipated use of nitrogen in particular, could have been more clearly communicated, particularly with respect to the operations at Milne Point, a unit where Sundry Applications for certain workover activities had not historically been required. Hilcorp wants and intends to comply with the Commission's expectations for its Sundry Applications, and clear communication, rather than the proposed fines, is the most effective way to achieve this. 55 54 Supra, at Section IID, n. 42. 55 AS 31.05.150(g)(9) suggests that the Commission may consider "other factors ... that are adopted by the commission in regulation." Hilcorp is unaware of any such regulations. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 19 of 30 B. $600,000 Fine for Failure to Maintain Safe Work Environment in Accordance With Good Oilfield Engineering Practices. The proposed fine at docket OTH-15-025 is based on a single operation 56 that was conducted in an unsafe manner. The proposed fine consists of six separate sub -parts, each of which will be discussed in greater detail below. As a preliminary matter, Hilcorp believes that the AOGCC does not have statutory authority to levy fines to multiple asserted violations of 20 AAC 25.526 that occur during the same incident on the same day, and thus the fine based on this regulation should be reduced to a single fine of no more than $100,000. 1. No Authority to Assess Multiple Fines for a Single Unsafe Operation. Alaska law provides the AOGCC authority to levy a fine "of not more than $100,000 for the initial violation and not more than $10,000 for each day thereafter on which the violation continues." 57 The statute therefore permits the levying of a fine for the initial regulatory violation and daily fines thereafter so long as the underlying violation continues. 20 AAC 25.526 provides that "An operator shall carry on all operations and maintain the property at all times in a safe and skillful manner in accordance with good oil field engineering practices and having due regard for the preservation and conservation of the property and protection of freshwater." This regulation contains no discrete subparts that can be independently violated instead, an operator is either in compliance or in violation at any given time. Put simply, once an operator is conducting an operation in an unsafe manner, the operator is in violation of this regulation (and subject to additional daily fines) until the operator remedies the conditions that make its operation unsafe. In its Notice, the AOGCC asserts that Hilcorp failed to maintain a "safe work environment" at the wellsite as a result of six distinct acts that it asserts failed to conform with "generally accepted oilfield practices." The Commission proposes to levy a $100,000 fine for each of these individual conditions. For instance, the Commission alleges that Hilcorp failed "to 56 The operation in question may be seen in general terms as the workover, which was the subject of an approved Sundry Application. The precise step in that operation which resulted in an unsafe condition was the decision to bleed annular pressure to the tank trailer via the choke manifold and gas buster. No matter how viewed, this was a single operation. 5' AS 31.05.150(a). Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 20 of 30 engage in a formal hazards identification" before performing the cleanout of MPU J -08A. If this or any other act identified in the Notice resulted in an unsafe workover operation, there was still only one unsafe operation—the additional acts did not re -violate 25 AAC 25.526. The AOGCC has the statutory authority to levy a fine upon Hilcorp's failure to meet the "safe and skillful manner" standard of 20 AAC 25.526—regardless of whether this violation was caused by one or more acts or omissions. Once in violation, however caused, the AOGCC's authority to levy additional fines was limited to daily fines for on-going violation. This interpretation of AOGCC's fining authority comports with Alaska law regarding multiple penalties for conduct arising out of a single transaction, which focuses on the consequences of multiple violations of the same law.58 Here, the consequence of one or all of Hilcorp's asserted actions was that Hilcorp was failing to perform its operation in a safe and skillful manner. Whether a single act or multiple acts occurred during the operation to produce the violation, the consequence was the same. Accordingly, AOGCC has the authority to levy a single fine for failing to conduct the operation on September 25, 2015 in a safe and skillful manner, but it may not assess separate fines for each act or omission that may have contributed to that failure. 2. $100,000 for failure to engage in formal hazards identification process. Contrary to the Commission's assertion, Hilcorp required IWS to—and IWS did routinely—engage in a formal hazard identification process before all operations, 59 including in particular the nitrogen pumping operation on September 24-25 at J -08A. The JSAs prepared by the IWS crew specifically identified the hazards and risks of nitrogen (particularly creating an oxygen -deprived environment). The set-up of the job adequately assessed the risks associated with normal nitrogen cleanout operations, which properly directed the well returns (including nitrogen) to an outside, open-air tank. Signs were posted at the job site warning that nitrogen was in use. In this instance, the particular hazard to the IWS crew arose after the nitrogen cleanout was complete, after Halliburton's nitrogen pumping truck had disconnected from the rig, and 58 Johnson v. State, 328 P.3d 77, 88 (Alaska 2014). 59 See supra, Section IIA. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 21 of 30 after the crew believed all of the nitrogen gas had been removed from the well. Unexpected pressure was encountered while pumping seawater down the annulus, and the toolpusher and wellsite leader decided to "bleed off' what was believed to be a small amount of water to the mud pits via the gas buster, which (unbeknownst to all) had the dump valve in an open position through which nitrogen escaped into the enclosed space. Upon encountering this changed operation, Hilcorp's expectations were that a hazard assessment for the new operation would be conducted. The crew and wellsite leader incorrectly believed that the bleed -off operation was such a minor and routine step that the existing JSA was adequate and did not need to be revisited. This failure to employ the established hazard identification process, rather than the lack of such a process, led directly to this incident. Although Hilcorp and its contractors routinely engage in job hazard identification and follow industry and governmental standards specific to this issue, the Commission has not promulgated any regulation or issued any guidance which requires an operator to engage in a formal hazards identification process. Here, the Commission states that this process should have been facilitated by "hazards/risk experts ... including assessing the risks of using nitrogen in a fill cleanout on ASRI." It is unclear what the Commission's expectations are for the involvement of "hazards/risk experts." In discussing this issue, the Notice refers to an OSHA publication, but the Commission has not adopted any regulation making violation of this publication a basis for a fine under 20 AAC 25.526. 3. $100,000 for failure to identify and implement safeguards to ensure personnel safety in the event of a nitrogen release. The principal safeguard employed to ensure personal safety in the event of a nitrogen release—avoidance of accumulations of nitrogen gas—was identified and implemented through direction of the cleanout returns, including the nitrogen gas, to outside open-air tanks. Directing the nitrogen returns to the tank trailer was not a normal or anticipated operation. Even so, the mud pit trailer had both a gas buster and a high volume air exchange/exhaust system that were sufficient to deal with any accumulation of nitrogen gas in the returns from the well bore—it was the failure to use these as designed which led to the incident, and this failure was one of management of change, which is covered below. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 22 of 30 To the extent this fine is based on a failure to include a low oxygen alarm along with the ASR1's gas detection system, this is not mandated either by industry or OSHA standards, or in any regulation promulgated by the Commission, and thus cannot form the basis for the proposed fine. Nevertheless, after this incident, Hilcorp voluntarily outfitted the ASR1 rig with such alarms as additional protection against low oxygen due to any cause, including nitrogen accumulation. 4. $100,000 for "Failure to provide and make available at the rig a detailed procedure for performing a fill cleanout with nitrogen, including requirements for verification of the integrity of all barriers in the flow paths for wellbore fluids returning to surface during the fill cleanout operations." The Commission has issued no regulations requiring that procedures for workover operations be provided to the rig, and has issued no guidance specifying the level of detail that the Commission would consider adequate. This finding also overlooks the fact that Halliburton made available a detailed and comprehensive procedure for performing a fill cleanout with nitrogen 60 and communicated this to the rig hands at pre -job safety meetings at the wellsite. In addition, verifying the integrity of all barriers in the flow paths for fluids returning to surface is a well -understood and constant responsibility of the wellsite leader and toolpusher. This was in fact done before the nitrogen pumping operation itself. The nitrogen pumping operation was concluded at the time of this incident, and no procedure for nitrogen cleanout would have addressed the precise circumstances that were encountered. Accordingly, the alleged failure to include a detailed procedure had no causal relationship to this incident. The cause of this incident was Hilcorp's ineffective management of change, not the lack of a detailed procedure at the wellsite. The IWS crew state that they did, in fact, walk down the lines prior to initiating flow into the mud pits, thus demonstrating knowledge that verification of flow paths was a requirement. However, the open dump valve at the bottom of the gas buster was missed in this process. In addition, the wellsite leader did not walk down the lines, as was his clearly understood responsibility. 60 Ex. 23, Halliburton N2 Procedures. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 23 of 30 Nevertheless, Hilcorp has instituted a practice of requiring such detailed procedures at the wellsite, and has created diagrams of anticipated connections and flows for various standard pumping operations. 5. $100,000 for failure to have in place a robust "Stop Work Authority" that was clearly understood and readily implemented by ASR1. This fine is contrary to the evidence and not supported by regulation. As demonstrated above, 61 Hilcorp mandates incorporation of a Stop Work Authority into its operations, and IWS utilizes the Dupont STOP program, a state-of-the-art safety program that, among other things, empowers each and every worker to stop work at any time when safety concerns arise. This stop work authority was regularly underscored during pre job meetings, during safety meetings, during numerous training sessions, and through IWS's regular use of "STOP cards." Interviews of the personnel involved in this operation disclose that they all readily understood their right and duty to stop work; all readily understand that they could and should have stopped the work at a number of points in the operation, particularly just after they detected an unusual smell and experienced light-headedness. None of the involved employees can explain their failure to do so—and all of them readily admit that this was a mistake—but it was not due to the lack of such a program in the first instance. The Commission has adopted no regulations addressing stop work authority policies or programs, nor has it promulgated regulations or issued guidance regarding the "robustness" that such policies and programs must achieve. The proposed fine on this alleged basis is therefore unsupported. 6. $100,000 for failure to assess and manage changes that potentially introduce new hazards or unknowingly increase the risk of existing hazards during a rig workover. Hilcorp has identified this failure as the principal cause of this accident, and has taken numerous corrective actions, including replacing and enhancing wellsite leadership, to prevent such incidents from reoccurring. 61 See supra, Section IIA. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 24 of 30 7. $100,000 for inadequate training of personnel on ASR1. As detailed above, 62 Hilcorp's employees receive extensive regular and ongoing training, and possess all required certifications. While the personnel involved failed to follow their training in several key respects, it does not follow that the training they received was inadequate or deficient. The training records of every employee are available for inspection by the Commission, and the Commission has not specified which training was supposedly inadequate, nor the regulatory authority for imposing a fine on this basis. Accordingly, this proposed fine is not legally or factually supported. 8. The proposed fines do not consider the factors in AS 31.05.150(g). The Commission proposes to assess the maximum fine, six times, for conduct leading to the J -08A incident. In so doing, the Commission has focused on one of nine factors set forth in AS 31.05.150(g)factor 6, "the history of compliance or noncompliance by the person committing the violation with the provisions of this chapter." In so doing, the Commission raises unadjudicated allegations contained in other Notices, at least one of which 63 lacks a factual basis. Increasing the severity of a fine based on unproven allegations is a practice inconsistent with due process, and when, as here, the unproven allegations are shown to be without basis, the proposed action loses its support entirely. In imposing its maximum fine, multiplied six -fold, the Commission also fails to consider any of the other 8 factors of 31.05.150(g). In particular, the Commission should consider: that the violations alleged were not willful or knowing (factors 1-2); that Hilcorp derived absolutely no benefit from the alleged violations (factor 5); that Hilcorp is highly motivated by factors other than the proposed fine to prevent such incidents from reoccurring (factor 7); and that Hilcorp has voluntarily initiated a wide range of corrective actions to prevent such incidents from occurring in the future (factor 8). 62 Id. 63 Docket OTH-15-029, discussed supra, at Section IIE. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 25 of 30 IV. VAGUENESS, REGULATORY OVERREACH, AND DUE PROCESS The Notice indicates that the Commission intends to impose $600,000 in penalties against Hilcorp under AS 31.05.150 for violation of 20 AAC 25.526 (".526"), citing conduct that threatened worker safety. The Commission promulgated .526 to create operational standards to conserve and protect oil, gas, and freshwater. It does not and cannot apply to worker safety. Further, to extend .526 to worker safety would require an expansive interpretation that would render the regulation impermissibly ambiguous and vague, violating due process. A. The Commission Lacks Authority to Regulate Worker Safety. Alaska's Administrative Procedure Act ("APA") states that when "a state agency has authority to adopt regulations to implement, interpret, make specific or otherwise carry out the provisions of [a] statute, a regulation adopted is not valid or effective unless consistent with the statute and reasonably necessary to carry out the purpose of the statute. ,64 In addition, the APA states that "[t]o be effective, each regulation adopted must be within the scope of authority conferred and in accordance with standards prescribed by other provisions of law." 65 Here, it is clear that, by extending application of .526 to worker safety, the Commission has exceeded its statutory authority. 66 64 AS 44.62.030 65 AS 44.62.020. 66 When .526 was adopted, AS 31.05.150 did not authorize the Commission to regulate worker safety, or impose fines against an oilfield operator for action that threatens worker safety. Recognizing this lack of authority, John K. Norman, then Chair of the Commission, testified before the Alaska Senate in 2007 that a "recently concluded enforcement action [had] emphasized the lack of [the AOGCC's] specific authority for the regulation of safety issues." Hearing on H.B. 109, Alaska State Legislature, House Special Committee on Oil and Gas, April 12, 2007 (statement of Chair John K. Norman, Alaska Oil and Gas Conservation Commission). In response, the Legislature revised AS 31.05.030 to provide the Commission the ability, but not the mandate, to regulate "for conservation purposes and, to the extent not in conflict with regulation by the Department of Labor and Workforce Development or the Department of Environmental Conservation, for public health and safety purposes." 2007 Alaska Sess. Laws ch. 54, §§ 2 to 5 (S.B. 109) (codified as AS 31.05.030). However, the Commission has never implemented regulations to exercise this permissive authority. Mr. Norman's testimony recognized that the Commission lacked statutory authority to regulate safety issues when it adopted .526. The authorizing statute in effect in 1999 allowed the Commission to regulate only "for conservation purposes." AS 31.05.030(e)(1) (1998). Subsequent to the 2007 amendment of AS 31.05.030, the Commission has not issued formal or informal guidance in the form of promulgated regulations, "Industry Guidance (continued) Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 26 of 30 B. Ambiguity of 20 AAC 25.526 Prohibits Application to Worker Safety. Even if the Commission had the statutory authority to regulate safety when it adopted 526, the regulation would be ambiguous and unenforceable in that respect. As the Alaska Supreme Court explained in 2015: A regulation is ambiguous when [it] is capable of two or more equally logical interpretations. And ambiguous statutory or regulatory requirements must be strictly construed in favor of the accused before an alleged breach may give rise to a civil penalty. . . . People should not be required to guess whether a certain course of conduct is one which is apt to subject them to criminal or serious civil penalties. 67 The terms "safe and skillful manner" and "in accordance with good oilfield engineering practices" are vague and undefined. However, the phrase "having due regard for the preservation and conservation of the property and protection of freshwater" indicates the conduct proscribed relates to the goal of resource and freshwater conservation. The Commission has underscored this interpretation in its public statements. For instance, in its 2010 Statement to the Governor, the Commission wrote that it "strives to ensure safe, technically prudent, and environmentally protective oil and gas well construction and operations" through its regulatory programs. 68 The Commission stated: Specific to drilling and workover operations, Commission performs periodic compliance inspections to ensure the equipment being used is consistent with the approved application, provides redundant levels of safety and protection for the well operations being performed, and is suitable for the environment in which activities are being conducted. Blowout prevention equipment inspections and witnessing tests per the regulatory frequency is a particular emphasis for AOGCC inspections. 69 Bulletins," or enforcement orders that purport to expand the meaning of .526 beyond the bounds statutorily authorized when it was adopted in 1999. The Commission lacked authority to regulate any safety issue when it adopted .526, and the Commission cannot now attempt to utilize it for this purpose. 67 RBG Bush Planes, LLC v. Alaska Public Offices Connnn, n, 361 P.3d 886, 892 (Alaska 2015) (internal quotation marks and citations omitted). 68 AOGCC Statement to Governor, May 2010, available at http://doa.alaska.gov/ogc/reports- studi es/AOGCC_Statement_to_Gov.pdf. 69 Id. (emphasis added). Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 27 of 30 The Commission went on to explain: After well drilling and completion, upon and after the onset of well production operations, other Commission regulations require installation, use, and maintenance of safety-related well hardware such as surface safety valves for certain types of wells, subsurface safety valves for certain wells, and various well production flow control devices. All offshore wells require an automatic, failsafe surface safety valve. A subsurface safety valve is required in every offshore producing well unless the operator can demonstrate to the Commission's satisfaction that the well is incapable of unassisted flow of hydrocarbons to surface. The components of a well safety valve system are regularly inspected by Commission for proper operation given the production characteristics of the well and the challenges of operating environment, including witnessing tests. Operators are required to test of the components of a safety valve system at least once every 6 months and provide all test results to the Commission for review.70 These statements make clear that the Commission's regulation of "safety" refers to ensuring wells are equipped sufficiently to prevent catastrophic blowouts that waste resources and pollute freshwater. While blowouts are inherently unsafe for workers, the Commission does not indicate (nor does the legislature) that worker safety is the object of its regulatory structure and inspections. In fact, the Commission's statutes and regulations do not even mention the words "employee" (other than Commission employees) or "worker." This orientation toward well safety, not worker safety, is consistent with Alaska's larger regulatory scheme. The Legislature has a specifically designated agency to ensure worker safety, the Alaska Occupational Safety and Health section of the Department of Labor and Workforce Development. The Commission's authorizing statute, which grants it the authority to regulate oil and gas operations for public health and safety only "to the extent not in conflict with regulation by the Department of Labor and Workforce Development,"7I makes this division of purpose between the Commission and AKOSH clear. This prohibits "conflict," but does not create overlapping authority. Finally, application of .526 in the Commission's publicly -available enforcement orders is consistent with Hilcorp's understanding that the "safe and skillful" requirement means an operator must conduct operations in a prudent manner to avoid waste of oil and gas or 70 Id. 7' AS 31.05.030(e). Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 28 of 30 contamination of freshwater. The Commission has not cited .526 in an enforcement order in over 10 years, and not since 2007 amendment of AS 31.05.150. It has only cited the regulation three times.72 The Commission has applied .526 exclusively to engineering practices creating a significant risk of resource waste through a blowout, and they support interpretation that .526 regulates the safe operation of a well, not the work environment. C. 20 AAC 25.526 is Unconstitutionally Vague. The Commission has the authority to levy fines for violation of its promulgated regulations. As a result, Commission's regulations must meet basic constitutional due process requirements to be enforceable. Alaska courts recognize that "in order to be consistent with notions of fundamental fairness a statute must give adequate notice of the conduct that is prohibited. ,73 Even if Commission had the statutory authority to regulate worker safety at the time .526 was adopted, .526 would be unconstitutionally vague in that respect. As outlined above, by its language and history, .526 limits its application to conservation of resource and protection of freshwater, and nothing the Commission has done provides notice that .526 encompasses worker safety.74 The regulation fails to give "the ordinary citizen fair notice of what is and what is not prohibited. ,75 Hilcorp "should not be required to guess whether a certain course of conduct is one which is apt to subject [it] to ... serious civil penalties," but .526, as the Commission is now interpreting it, requires operators to do just that. 76 As a result, 526 is void for vagueness under Alaska law. 72 In a June 2, 2005 order, the Commission cited Nabors Alaska Drilling for violating rules regarding testing of blowout prevention equipment on a rig by falsifying test results with a practice referred to as "chart spinning." AOGCC Order 34 - Nabors Alaska Drilling, Rig 9ES, Enforcement Order. In 2004, the Commission cited BPXA in two orders for failing to bleed off well pressure before restarting a shut-in well and in connection with its practices in managing wells with sustained annular pressures, in the latter case resulting in a catastrophic failure and explosion. AOGCC Order 32 - BPXA, PBU, H-11, Enforcement Order; AOGCC Order 29 - BPXA, PBU A-22, Enforcement Order. These orders did not cite worker safety as a basis for the operators' failure to conduct activities in a "safe and skillful" manner. 73 State v. Rice, 626 P.2d 104, 109 (Alaska 1981) (applying due process doctrine to regulatory violation). 74 See AS 44.62.190 (requiring publication 30 days before the adoption, amendment, or repeal of a regulation). 75 VECO Intern., Inc. v. Alaska Public Offices Comm'n, 753 P.2d 703, 714 (Alaska 1988). 76 Id, Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 29 of 30 In addition to the notice requirement, the Alaska Supreme Court has held that a statute is unenforceably vague if a "statute's imprecise language encourages arbitrary enforcement by allowing prosecuting authorities undue discretion to determine the scope of its prohibitions."77 Again, the Commission has never applied .526 to worker safety, never issued any regulations or guidance that it intended to do so, and only imposed penalties for conduct creating a significant risk of resource waste through a blowout. That the Commission has not consistently sought to enforce .526 on the basis of worker safety demonstrates selective enforcement in this instance that makes the regulation unenforceably vague. V. CONCLUSION Hilcorp concedes that the incident at J -08A was unfortunate and preventable. Hilcorp immediately and dispassionately investigated the incident, identified its most likely contributing causes, and then systematically proceeded to make corrections and improvements with the goal of substantially reducing the likelihood of similar future incidents. However, the fines proposed by the Commission are excessive, not justified by the factual record, and outside the scope of its regulatory authority. Further, the factual record does not support the Commission's claims that Hilcorp has an "endemic disregard" for compliance. On the contrary, Hilcorp's record in Alaska demonstrates conscientious attention to regulatory compliance, and swift corrective action when Hilcorp falls short. Hilcorp looks forward to engaging in an open and candid discussion of these issues with the Commissioners at the upcoming informal review, and hopes that by doing so an agreed resolution of this matter can be achieved. The Commissioners and Hilcorp share the same goal—encouraging the safe and responsible production of Alaska's oil and gas resources. " State v. Rice, 626 P.2d at 109. Hilcorp Alaska, LLC Submission for Informal Review (OTH-15-25, OTH-15-29, OTH-15-30, and OTH-15-31) Page 30 of 30 Exhibits: Table of Contents 1 Hilcorp Safety Manual Table of Contents 2 Hilcorp Alaska, LLC Minimum Contractor Safety Requirements 3 ASR Rig Crew Contacts 4 ASR1 STOP Cards and Near Miss Reports (various dates) 5 Well I-15 (Form 10-403, Sundry No. 315-158, approved March 25, 2015) and follow-on Form 10-404 6 Well J -09A (Form 10-403, Sundry No. 315-162, approved March 25, 2015) and follow- on Form 10-404 7 Well J-0IA (Form 10-403, Sundry No. 315-459, approved July 30, 2015) and follow-on Form 10-404 8 Well J -08A (Form 10-403, Sundry No. 315-527, approved August 31, 2015), and follow- on Form 10-404 9 Hilcorp Alaska, LLC: Internal Incident Investigation Report (October 1, 2015) 10 Automated Service Rig 1 (ASR 1) Incident Investigation Events Sequencing Chart (September 25, 2015) 11 Root Cause Analysis (RCA) September 25, 2015 Incident 12 Lessons Learned Summary titled "Milne Point Automated Service Rig 1 (ASR 1) Incident" from Hilcorp Alaska, LLC's Safety — SharingtheExperience Program 13 Job Safety Analysis (JSA) Forms (September 24-25, 2015) 14 Halliburton Job Log for MPJ -08A (September 24, 2015) 15 ASR1 Fluid Flow Diagram J -08A Incident 16 J -08A Jobsite Overview 17 ASR1 Tank Trailer Passenger Side View 18 ASR1 Tank Trailer Driver Side View 19 CLC Corrective Actions Matrix for 9/25/2015 ASR Rig (various dates) 20 Email from Bo York to Milne Point personnel re Compliance with Well Work Sundry Procedures — Coil Tubing, ASR, Nordic, Doyon (November 30, 2015) 21 Email string between Chris Kanyer and WB re I-03 (May 2, 2015) 22 Email from WB to AOGCC re AOGCC Test Witness Notification Request: BOPE, Nordic 3 & nbsp; MPU I-03 (May 2, 2015) 23 Halliburton Pressure Test and N2 Pumping Procedures TABLE OF CONTENTS SECTION I: INTRODUCTION.........................................................1 1. MANAGEMENT POLICY STATEMENT.............................................................................1 GENERAL SAFETY RULES.........................................................................................................................5 2. SAFETY GOALS............................................................................................................................................2 2. 3. SAFETY RESPONSIBILITIES......................................................................................................................2 A. EMPLOYEES...................................................................................................................................2 SAFETY PROGRAM COMMUNICATIONS................................................................................................7 B. SUPERVISORY PERSONNEL........................................................................................................3 4. C. EH&S DEPARTMENT....................................................................................................................4 5. D. MANAGEMENT..............................................................................................................................4 E. CONTRACTORS..............................................................................................................................4 HAZARD CORRECTION PROCEDURES...................................................................................................9 4. PROCESS SAFETY MANAGEMENT POLICY ...........................................................................................5 SECTION II: SAFETY POLICY AND PROCEDURES....................................5 1. GENERAL SAFETY RULES.........................................................................................................................5 2. DISCIPLINE POLICY....................................................................................................................................6 3. SAFETY PROGRAM COMMUNICATIONS................................................................................................7 4. SAFETY ORIENTATION..............................................................................................................................7 5. INSPECTIONS................................................................................................................................................8 6. HAZARD CORRECTION PROCEDURES...................................................................................................9 7. ACCIDENT INVESTIGATION...................................................................................................................10 8. SAFETY MEETINGS...................................................................................................................................10 9. SAFETY AND HEALTH TRAINING.........................................................................................................11 10. EMERGENCY CARE, FIRST AID /CPR & AED PROVISIONS...............................................................12 A. EMERGENCY MEDICAL CARE.................................................................................................12 B. FIRST AID/CPR & AED & BBP TRAINING...............................................................................12 C. FIRST AID SUPPLIES AND EQUIPMENT.................................................................................13 11. BLOOD BORNE PATHOGEN EXPOSURE CONTROL PROGRAM.......................................................13 A. PURPOSE AND SCOPE................................................................................................................13 B. DELEGATION OF RESPONSIBILITY.........................................................................................13 C. WRITTEN EXPOSURE PLAN......................................................................................................13 D. EXPOSURE DETERMINATION..................................................................................................14 E. METHODS OF COMPLIANCE.....................................................................................................14 F. ENGINEERING AND WORK PRACTICE CONTROLS.............................................................15 G. PERSONAL PROTECTION EQUIPMENT...................................................................................15 H. HOUSEKEEPING..........................................................................................................................15 I. WASTE HANDLING.....................................................................................................................15 J. HEPATITIS B VACCINATION....................................................................................................15 K. POST -EXPOSURE EVALUATION AND FOLLOW-UP.............................................................16 L. FIRST AID CARE INCIDENT REPORTS....................................................................................17 M. MEDICAL RECORDS...................................................................................................................17 N. LABELS AND SIGNS....................................................................................................................17 O. INFORMATION AND TRAINING...............................................................................................17 P. AVAILABILITY OF RECORDS...................................................................................................18 12. INCENTIVE PROGRAM.............................................................................................................................18 13. BUDDY SYSTEM........................................................................................................................................19 14. HEARING CONSERVATION PROGRAM.................................................................................................19 A. PURPOSE/SCOPE..........................................................................................................................19 15. RESPIRATORY PROTECTION PROGRAM..............................................................................................20 A. PURPOSE/SCOPE..........................................................................................................................20 B. GENERAL REQUIREMENTS.......................................................................................................20 C. FIT TESTING.................................................................................................................................20 16. CONTRACTOR SAFETY............................................................................................................................20 A. PURPOSE/SCOPE..........................................................................................................................20 B. GENERAL REQUIREMENTS.......................................................................................................20 17. CRANE..........................................................................................................................................................21 _ (i)_ EXHIBIT 1 Page 1 of 5 A. GENERAL......................................................................................................................................21 A. B. CRANE...........................................................................................................................................22 B. C. SLINGS AND WIRE ROPES.........................................................................................................24 C. 18. FORKLIFT....................................................................................................................................................25 A. GENERAL......................................................................................................................................25 19. HYDROGEN SULFIDE CONTINGENCY PLAN......................................................................................25 A. SCOPE............................................................................................................................................25 B. CONTINGENCY PLAN.................................................................................................................26 C. TRAINING.....................................................................................................................................27 3. HOT D. EQUIPMENT AND LOCATION OF EQUIPMENT.....................................................................27 4. WALKING E. BRIEFING AREA SAFETY TRAILER AND WIND DIRECTION INDICATORS .................... 27 F. H2S DETECTION AND MONITORING EQUIPMENT..............................................................27 20. TOXICITY AND FIRST AID.......................................................................................................................28 GAS CYLINDERS.............................................................................................................41 A. TABLE: TOXICITY OF VARIOUS GASES................................................................................28 B. PROPERTIES OF VARIOUS GASES...........................................................................................28 C. PHYSICAL PROPERTIES AND PHYSIOLOGICAL EFFECTS ON HUMANS ........................28 D. FIRST AID TREATMENT FOR H2S EXPOSURE.......................................................................29 E. RESCUE BREATHING..................................................................................................................29 F. WELL OUT OF CONTROL...........................................................................................................30 G. EMERGENCY TELEPHONE NUMBERS....................................................................................32 SECTION III: WORK AREA SAFETY.............................................................32 1. PERSONAL PROTECTIVE EQUIPMENT.................................................................................................32 A. PURPOSE OF PROGRAM...................................................................................33 B. HAZARD ASSESSMENT..............................................................................................................33 C. SELECTION GUIDELINES..........................................................................................................33 D. PROGRAM EVALUATION..........................................................................................................34 E. EMPLOYEE TRAINING...............................................................................................................34 F. CLEANING, MAINTENANCE & INSPECTION.........................................................................35 G. PPE SPECIFIC INFORMATION...................................................................................................35 2. STATIONARY MACHINERY/GUARDING & OPERATION...................................................................37 3. HOT WORK..................................................................................................................................................38 4. WALKING AND WORKING SURFACES.................................................................................................39 5. TOOLS (HAND AND POWER)...................................................................................................................39 6. LADDER SAFETY / FALL PROTECTION................................................................................................40 7. COMPRESSED GAS CYLINDERS.............................................................................................................41 8. DRIVING SAFETY......................................................................................................................................41 A. GENERAL......................................................................................................................................41 B. INTERSECTION SAFETY............................................................................................................42 C. SPACE CUSHION CONCEPT.......................................................................................................42 D. LOOKING AHEAD AND BEHIND..............................................................................................42 E. BACKING.......................................................................................................................................42 F. COMMUNICATIONS....................................................................................................................43 G. VEHICLE EQUIPMENT, MAINTENANCE AND INSPECTION ...............................................43 9. ELECTRICAL SAFEGUARDS - LOCK OUT / TAG OUT.......................................................................44 A. LIVE CIRCUITS.............................................................................................................................44 B. LOAD BREAK SWITCHES..........................................................................................................44 C. POWER SUBSTATIONS...............................................................................................................45 D. TRANSFORMERS.........................................................................................................................45 E. HIGH VOLTAGE MOTOR STARTERS.......................................................................................45 F. FUSES.............................................................................................................................................45 G. CIRCUIT BREAKERS...................................................................................................................46 H. MOTOR STARTERS.....................................................................................................................46 I. GROUNDING.................................................................................................................................46 J. ELECTRICAL MOTORS...............................................................................................................46 K. CONTROL CIRCUITS...................................................................................................................46 L. EXTERNAL CONTROL CIRCUITS.............................................................................................46 M. INDUCED CURRENTS.................................................................................................................46 N. EXPLOSION PROOF FITTINGS..................................................................................................47 - (ii) - EXHIBIT 1 Page 2 of 5 SECTION IV: OTHER WORK AREAS............................................................59 1. FIELD LOCATION SAFETY......................................................................................................................59 O. EXTENSION CORDS....................................................................................................................47 GENERAL......................................................................................................................................59 P. RUBBER MATS IN LABS AND SHOPS......................................................................................47 HIGH PRESSURE PIPING............................................................................................................59 Q. BATTERIES AND STAND BY GENERATORS..........................................................................47 D. R. OVERLOADING CIRCUITS.........................................................................................................47 E. REMOTE STARTING EQUIPMENT............................................................................................60 S. GIN POLES....................................................................................................................................47 SUMPS............................................................................................................................................60 T. ELECTRICAL BOXES..................................................................................................................47 H. U. PORTABLE ELECTRIC MOTORS AND PUMPS.......................................................................47 I. FLEXIBLE TUBING......................................................................................................................60 V. GROUNDING OF FENCES...........................................................................................................48 GAS METERS................................................................................................................................60 2. TANK AND GAUGING SAFETY...............................................................................................................61 W. CATHODIC PROTECTION RECTIFIERS...................................................................................48 CARRYING EQUIPMENT UP THE TANK.................................................................................61 X. RUBBER GLOVES........................................................................................................................48 C. Y. HOT STICKS..................................................................................................................................48 D. TANK TOP SAFETY.....................................................................................................................62 Z. STATIC ELECTRICITY................................................................................................................48 10. PLANT EQUIPMENT - CONTROL OF HAZARDOUS ENERGY (LOCKOUT/TAGOUT) ...................51 F. GAUGING TANKS WITH H2S VAPORS....................................................................................62 A. GAS COMPRESSORS...................................................................................................................51 TANK DIKE MAINTENANCE.....................................................................................................62 B. COMPRESSORS............................................................................................................................51 I. C. AIR COMPRESSORS....................................................................................................................52 3. GATHERING SYSTEM AND LEASE TANK GAUGING.........................................................................63 D. HEATERS.......................................................................................................................................52 B. E. BOILERS........................................................................................................................................52 C. GASOLINE POWERED PUMP HAZARDS.................................................................................63 F. PRESSURE SAFEGUARDS..........................................................................................................52 GATHERING SYSTEM LEAK REPAIR......................................................................................64 11. LAWN MOWERS, TRACTORS, ATV'S AND CHAIN SAWS.................................................................53 WATER DRAWS...........................................................................................................................64 12. CONFINED SPACE ENTRY.......................................................................................................................53 AND BOATING OPERATIONS...................................................................................................64 13. SCAFFOLD...................................................................................................................................................54 GENERAL......................................................................................................................................64 14. EQUIPMENT ISOLATION & BLINDING (LOCKOUT/TAGOUT)..........................................................55 15. TANK/VESSEL CLEANING PROCEDURE..............................................................................................56 A. PURPOSE/SCOPE..........................................................................................................................56 B. PROCEDURE/PROCESS...............................................................................................................57 C. TANK EMPTYING AND CLEANING.........................................................................................57 SECTION IV: OTHER WORK AREAS............................................................59 1. FIELD LOCATION SAFETY......................................................................................................................59 A. GENERAL......................................................................................................................................59 B. HIGH PRESSURE PIPING............................................................................................................59 C. SUN PRESSURE............................................................................................................................59 D. PRESSURE RELIEVING VESSELS AND PIPE BEFORE OPENING........................................59 E. REMOTE STARTING EQUIPMENT............................................................................................60 F. SUMPS............................................................................................................................................60 G. VIBRATION EFFECT ON HIGH PRESSURE FITTINGS...........................................................60 H. PRODUCT SAMPLING.................................................................................................................60 I. FLEXIBLE TUBING......................................................................................................................60 J. GAS METERS................................................................................................................................60 2. TANK AND GAUGING SAFETY...............................................................................................................61 A. CARRYING EQUIPMENT UP THE TANK.................................................................................61 B. PROPER GAUGING AND SAMPLING EQUIPMENT...............................................................61 C. OPENING THE GAUGE HATCH.................................................................................................61 D. TANK TOP SAFETY.....................................................................................................................62 E. GROUNDING TECHNIQUES.......................................................................................................62 F. GAUGING TANKS WITH H2S VAPORS....................................................................................62 G. TANK DIKE MAINTENANCE.....................................................................................................62 H. RECEIVING PROCEDURES TO AVOID SPILLS.......................................................................62 I. TANK BOTTOM REPAIRS...........................................................................................................62 3. GATHERING SYSTEM AND LEASE TANK GAUGING.........................................................................63 A. GAUGING TANKS........................................................................................................................63 B. LACT HAZARDS...........................................................................................................................63 C. GASOLINE POWERED PUMP HAZARDS.................................................................................63 D. GATHERING SYSTEM LEAK REPAIR......................................................................................64 E. WATER DRAWS...........................................................................................................................64 4. WATER AND BOATING OPERATIONS...................................................................................................64 A. GENERAL......................................................................................................................................64 B. QUARTERS AND GENERAL DECK RULES.............................................................................65 Z(mj EXHIBIT 1 Page 3 of 5 C. BOAT TRANSPORTATION.........................................................................................................65 SECTION V: MATERIAL HANDLING SAFETY...........................................66 DRUMHANDLING.....................................................................................................................................66 BACKSAFETY............................................................................................................................................66 NORM...........................................................................................................................................................67 A. PURPOSE/SCOPE..........................................................................................................................67 B. DEFINITION..................................................................................................................................67 C. RESPONSIBILITIES......................................................................................................................67 D. GENERAL REQUIREMENTS.......................................................................................................67 SECTION VI: OFFICE SAFETY........................................................................68 1. OFFICE FURNITURE AND EQUIPMENT.................................................................................................68 2. FLAMMABLE AND HAZARDOUS MATERIALS...................................................................................69 3. DOORS, WALKWAYS, AND ELEVATORS.............................................................................................69 SECTION VII: FIRE PREVENTION PLAN.....................................................69 PURPOSE......................................................................................................................................................69 WORKPLACE FIRE HAZARDS.................................................................................................................70 FIRE PROTECTION EQUIPMENT.............................................................................................................70 A. FIRE EXTINGUISHERS................................................................................................................71 MAINTENANCE OF FIRE PROTECTION EQUIPMENT.........................................................................71 GENERAL PREVENTION AND PROTECTION.......................................................................................71 TRAINING....................................................................................................................................................73 A. FIRE PREVENTION PLAN...........................................................................................................73 B. FIRE PREVENTION EQUIPMENT..............................................................................................73 SECTION VIII: HAZARD COMMUNICATION PROGRAM ....................... 74 1. HAZARD EVALUATION PROCEDURES.................................................................................................74 2. MATERIAL SAFETY DATA SHEETS (MSDS)........................................................................................74 3. LABELS AND OTHER FORMS OF WARNING.......................................................................................75 EMERGENCY ESCAPE PROCEDURES AND ASSIGNMENTS.............................................................79 A. MISSING OR DAMAGED LABELS.............................................................................................75 3. 4. TRAINING....................................................................................................................................................75 5. TRAINING CONTENT................................................................................................................................76 EMERGENCY REPORTING PROCEDURES............................................................................................81 6. HAZARDS OF NON -ROUTINE TASKS....................................................................................................77 5. 7. HAZARDS OF UNLABELED PIPES..........................................................................................................77 8. CONTRACTORS..........................................................................................................................................77 TRAINING....................................................................................................................................................81 SECTION IX: RECORDKEEPING....................................................................77 RECORDS LIST AND FILING SYSTEM...................................................................................................78 SECTION X: EMERGENCY ACTION PLAN..................................................78 1. PURPOSE......................................................................................................................................................78 2. EMERGENCY ESCAPE PROCEDURES AND ASSIGNMENTS.............................................................79 3. RESCUE AND MEDICAL DUTY ASSIGNMENTS..................................................................................80 4. EMERGENCY REPORTING PROCEDURES............................................................................................81 5. EH&S DEPARTMENT RESPONSIBILITIES.............................................................................................81 6. TRAINING....................................................................................................................................................81 7. DRILLS.........................................................................................................................................................82 8. MEDICAL EMERGENCY...........................................................................................................................82 9. FIRE AND EXPLOSIONS............................................................................................................................83 10. BOMB THREAT...........................................................................................................................................84 11. HOSTAGE SITUATION..............................................................................................................................84 EXHIBIT 1 Page 4of5 SECTION XI: NATURAL DISASTER EMERGENCY RESPONSE.............85 1. INTRODUCTION.........................................................................................................................................85 2. GENERAL INFORMATION AND TIPS.....................................................................................................85 3. LOSS OF POWER........................................................................................................................................85 4. HURRICANE PREPAREDNESS.................................................................................................................86 5. RESPONSIBILITY AND PROCEDURE.....................................................................................................87 6. THREE PHASES OF STORM ALERT........................................................................................................87 7. ANNOUNCEMENT OF STORM ALERT...................................................................................................88 8. DIRECTION OF ACTION............................................................................................................................88 9. HURRICANE EVACUATION PROCEDURES..........................................................................................88 A. PHASE I..........................................................................................................................................88 B. PHASE II........................................................................................................................................88 C. PHASE III.......................................................................................................................................89 10. SUCCESSION OF AUTHORITY................................................................................................................89 11. ALTERNATE EMERGENCY CENTERS...................................................................................................89 12. NOTIFICATION OF DEPARTURE.............................................................................................................89 A. IN ADVANCE OF STORM...........................................................................................................89 B. AFTER THE STORM.....................................................................................................................90 13. TORNADOES...............................................................................................................................................90 14. EARTHQUAKES..........................................................................................................................................90 FORMS INCIDENT REPORT ACCIDENT FOLLOW-UP REFUSAL OF CARE SAFETY MEETING REPORT JOB HAZARD ASSESSMENT FORM HURRICANE PRODUCTION LOSS AND DAMAGE REPORT AUDIT CHECKLIST AUDIT OBSERVATIONS ACTION ITEM LIST EMPLOYEE ACKNOWLEDGEMENT EXHIBIT 1 Page 5 of 5 EXHIBIT "C" TO MASTER SERVICE AGREEMENT Hilcorp Alaska, LLC Minimum Contractor Safety Requirements Hilcorp Alaska, LLC (hereinafter referred to as "COMPANY'/ stress" the importance ofsafety and safety requirements as outlined in the Minimum Contractor Safety Requirements herein (the "Standards"). These Standards are incorporated by reference into the Agreement. COMPANY, through the use of safe work practices, personal protective equipment (PPE), safety meetings, and Job Safety Analyses (JSAs), emphasizes the importance ofsafety at each COMPANY work site- Contractors are expected at all times to meet or exceed the Standards; Contractor's own safety manuals; and any applicable Federal, State, and Local regulation (whichever are most stringent). Contractor is responsible for ensuring that its subcontractors also do the game. Please be advised that these Standards do not reduce or replace CONTRACTOR's responsibility to maintain a safe work environment for all persons*. and regularly and repeatedly perform appropriate training and safety programs for it, and its subcontractors, and its and their employees and agents. CONTRACTOR must perform all work and services in accordance with all applicable safety regulations, precautions, and procedures, and shall employ all protective equipment and devices required by governmental authorities, or reasonably recommended by industry safety associations, CONTRACTOR shall take all necessary and appropriate precautions to safeguard it, and its subcontractors, and its and their employees and agents, COMPANY's employees and representatives, visitors, the general public, any public or private property, the environment, and natural resources with respect to any work or services to be performed for COMPANY., SAFE WORK PRACTICES COMPANY requires that CONTRACTOR convey these Standards to its subcontractors, and its and their employees, agents and visitors, and mandate compliance with these Standards at all times while at COMPANY work sites. COMPANY prohibits the possession, transportation, use, or consumption of any controlled substances, drugs, or drug- related paraphernalia on or around any property, facility, aircraft, vehicle, or boat owned or used by COMPANY. (Possession and use of prescription medications with doctor's and user's name on container label and prescription date within one year is not prohibited by this policy.) COMPANY requires CONTRACTOR to have its own written Comprehensive Safety Program and Comprehensive Substance Abuse and Alcohol Misuse Program. Strict compliance with these requirements is mandated while working on COMPANY work sites. COMPANY prohibits the possession or consumption of alcoholic beverages on any property, facility, aircraft, vehicle, or boat owned or used by COMPANY, except where such possession or consumption is explicitly authorized by COMPANY for limitod business or social functions. COMPANY prohibits the possession of firearms, weapons, or explosives on or around any property, facility, aircraft, vehicle, or boat owned or used by COMPANY, (Transportation of firearms for sporting activities or for personal protection in vehicles is not prohibited by this policy; provided the firearms are broken down, displayed, and handled in a manner that meets acceptable safety standards and complies with Local, State, and Federal statutes covering gun control.) Under no circumstances will any person have in his/her possession a firearm, weapon, or explosive while offshore, in an office, warehouse, or other COMPANY facility. COMPANY expects CONTRACTOR to train its employees to recognize common hazards associate ' d with their work tasks and CONTRACTOR must adhere to all Hazard Communication Standards as required by all applicable Federal, State, and Local Safety Regulations or industry safety standards. Hilcorp Alaska, LLC, MSA Master form, Novejnber2014 Exhibit C-1 EXHIBIT 2 Page 1 of 4 All COMPANY employees, CONTRACTOR and its employees, agents or sub -contractors have "Stop Work Authority" for any unsafe or potentially unsafe situation. Any potential hazards identified must be reported immediately to a COMPANY representative and work stopped until the hazard can be properly understood and corrected. COMPANY reserves the right to audit CONTRACTOR, including, without limitation, its agents, sub -contractors, programs, policies, or procedures while work is being performed on COMPANY sites. PERSONAL PROTECTIVE FOVIPMENT (PPE) CONTRACTOR is required to provide all applicable PPF for its employees. The following PPF is required to be worn by all persons while on COMPANY work sites; Clothing - Flame Resistant Clothing (FRC) must be worn in all times while on COMPANY work sites. COMPANY accepts only shirt and pant combinations and coverall FRC. FRC must be ftilly buttoned and/or zipped (no cotton showing) at all times. Foot Protection - Steel -toed boots must be worn at all times. Please note that steel -toed tennis shoes are not allowed. Head Protection - Each person in a work area must wear a hard hat secured by the chinstrap, if applicable. Eye Protection - Each person must wear properly fitted safety glasses. Goggles, face shields, or other eye protection equipment may be required, based on the job -specific task. Life Vests - For job locations located on or near water, life vests must be worn at work, sites when working outside of handrails near or over water. This includes docks, shore based facilities (within 10 feet of water's edge), platforms and camps. Inflatable life vests are discouraged, but, if used, must be auto -inflating. In the situations identified below, COMPANY requires that life vests be worn at all times. • When travelling on a boat or barge • When loading or unloading from a boat or barge • When working on a construction barge (unless the life vest creates an unsafe working condition) Adifillornal PPE Protection - Additional PPE may be required based on the task being performed. Consult, additional safety resources such as Material Safety Data Sheets (MSDSs) to determine if additional PPE is required. Additional PPE that may be required could include, but is not limited to, respiratory equipment, gloves, hearing protective gear, safety belts, lifelines, and others, SAFETY MEETINGS COMPANY requires that CONTRACTOR conduct safety meetings prior to starting work each day. Meetings should be documented and that documentation maintained at the work site. .100 SAFETY ANALYSES QSAS In order to help further identify workplace hazards, COMPANY recommends JSAs for any task. Any JSAs performed should be documented, signed by all parties/personnel involved, with documentation maintained at the work site. JSAs are required for the following tasks: * Not Work • Confined Space Entry Hilcorp Alaska, LLC, MSA Mosier Form, November 2014 Exhibit C-2 EXHIBIT 2 Page 2 of 4 • SIMOPS (Multiple operations occurring simultaneously on the same work site) • Heavy Lifts • New Equipment Startup • Adverse Weather Conditions Hot Work - COMPANY prohibits any Hot Work (Welding, Cutting Torch, grinding or other spark or heat creating activity), unless an approved hot work permit has been issued by an authorized COMPANY representative, or such Hot Work is being performed in an area specifically designated or posted as an area for Hot Work, such as a welding shop, Coolflned Space Entry - COMPANY prohibits Confined Space Entry unless an approved Confined Space Entry Permit has been issued by an authorized COMPANY representative. Fait Protection - COMPANY requires that each CONTRACTOR follow all applicable Federal, State and Local Safety Regulations, and industry safety standards, when advisable, relative to fall protection when work is being conducted on elevated surfaces or in areas with the potential for falls. This includes, but is not limited to, use of safetybelts, lifelines and lanyards, safety nets, and climbing devices. Lock Oistllfag On(- COMPANY mandates that all applicable Federal, State and Local Safety Regulations and industry safety standards, when advisable, must be followed for working on or around Energized equipment, or when there exists a risk ofelcetric shock; including, but not limited to, Lock Out/Tag Out procedures. Demolition Work — A COMPANY representative must authorize demolition work prior to beginning any such work. Engineering plans should be developed ifapplicable to the scope of work. SEARCH AND SEIZURE POLICY COMPANY reserves the right, with or without notice, to lawfully and reasonably search any person, including, without limitation, CONTRACTOR's and its subcontractors' employees, agents or visitors, along with their personal effects, prior to entry or departure from a COMPANY work site, facility, vehicle, aircraft, or boat. Methods used may include physical searches and, as appropriate, scheduled or random drug urinalysis screening. Infractions of this nqlicv. includina failure to submit to a search, will be grounds for dischatinary action, up to and including immediate termination of the Agreement. When appropriate, if any item is discovered through COMPANY searches, inspections or otherwise that is deemed dangerous or harmful to life or property, law enforcement officials may be notified. CONTRACTOR's and its subcontractors', employees, agents or visitors not complying with this policy will be removed from COMPANY premises and not allowed to return, REPORTING INCIDENTS in the event ofan accident or an emergency, including, but not limited to, worker injuries, occupational -related illnesses, vehicle accidents, property damage, spills, chemical releases, fires 'and near hits on any COMPANY location, CONTRACTOR shall immediately provide oral notification to COMPANY and shall prepare and famish to COMPANY an incident report as soon as reasonably practicable, but not later than eight (8) hours after each such accident or emergency. CONTRACTOR shall provide COMPANY with copies of all photographs, videotapes, audiotapes, and written or electronic documents associated with the incident. COMPANY shall pursue all rights and remedies available to it under law or equity ifCONTRACTOR fails to timely report an incident, including, without limitation, termination ofthis Agreement or recovery ofany actual damages resulting from such an event. All written reports shall be submitted to the onsite COMPANY representative or to the Environmental Health & Safety Department CTH&S") at the COMPANY's corporate offices via facsimile transmission to (713) 289-2750 or email to hertMilcorp.com. If CONTRACTOR cannot notify an on-site COMPANY representative, CONTRACTOR shall immediately notify EH&S st.713-209-2400. flikorp Alaska, LLC, MSA Master Form, November 2014 Exhibit C-3 EXHIBIT 2 Page 3 of 4 [401,31 UK "k04 COMPANY strives to create a safe work environment for all who enter our work sites. COMPANY's safety policy is designed with that goal in mind. Therefore, all safety Standards will be enforced, and failure to follow these safety Standards while on a COMPANY work site may result in immediate dismissal. Please feel free to contact COMPANY's Environmental Health & Safety Department at 713-209-2400 with any questions or concerns. THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK Hilcorp Alaska, LLC, MSA Master Forni, November 2014 Exhibit C4 EXHIBIT 2 Page 4 of 4 ASR Rig Crew Contacts Activity ID 1040 1388 1864 1394 1870 1412 1415 1460 1472 1471 1478 1479 1915 1919 1924 1927 1931 Dte Employee 6/10/2015 8/3/2015 8/3/2015 8/4/2015 8/4/2015 8/24/2015 8/25/2015 9/21/2015 9/25/2015 9/26/2015 9/27/2015 9/27/2015 10/1/2015 10/2/2015 10/2/2015 10/3/2015 10/4/2015 1937 10/5/2015 1962 10/10/2015 Tuesday, January 19, 2016 Activity Description ASR Rig Crew Orientation Orientation ASR Rig Orientation ASR Rig ASR Rig Visit ASR Rig Visit Replaced fire extinguishers on ASR Rig Site Visits: ASR rig, J -Pad Drilling, Pigging shop Site Audit: Rig, ASR Rig ASR Rig Incident Management/Information Review with Investigation Team. Witness Statements, Powerpoint, ASR Rig Incident Investigation ASR Rig GasBuster/Shaker/Flowback Monitoring ASR Rig Incident Investigation Attended ASR Rig Toolbox Mtg Attended ASR Rig Toolbox ASR Rig Corrective Action Discussion w/ field foreman ASR Rig Site Visit Facilitated ASR Rig Corrective Action discussion with IWS Drafted ASR Rig corrective actions ASR Rig LC Presentation development Field Audits Prgm Audits Safety Mtgs Supports Invstgtns 1 4 1 1 1 1 1 1 1 1 1 1 1 1 1 Page 1 of 2 EXHIBIT 3 Page 1 of 2 1 1 1 1 1 1 1 1 1 1 1 4 1 1 1 1 1 1 1 1 1 1 1 1 1 Page 1 of 2 EXHIBIT 3 Page 1 of 2 Activity ID Dte Employee 1981 10/29/2015 1989 10/30/2015 1490 11/2/2015 1492 11/2/2015 1994 1995 1491 1996 1998 1999 2002 2003 2005 2012 2036 2051 11/2/2015 11/2/2015 11/3/2015 11/3/2015 11/3/2015 11/3/2015 11/4/2015 11/4/2015 11/6/2015 11/8/2015 1/5/2016 1/9/2016 Activity Description ASR Rig Investigation Corrective Action Follow up ASR Rig Support — Personal Gas Detector Set up Travel to Mline point. Went to ASR Rig to review expectations of audit. Start auditing ASR Rig work - over rig. Finish audit on ASR Rig, started to put together audit report with findings, recommendations, and regulatory information. Travel from Mline Point back to Kenai ASR Rig Day 1 Audit ASR Rig Toolbox Mtgs Continue auditing ASR Rig and interviewing crew and IWS owner regarding taining/records. Complete SO1 for ATF leak at GPTF, reviewed incident with lead operator at GPTF. ASR Rig Toolbox Meeting ASR Rig Auidt Day 2 Developed ASR Rig Audit presentation Hot Work Permit — ASR Rig Tank Trailer ASR Rig Audit Debrief with ASR president ASR Rig Toolbox Meeting ASR Rig Hazard Assessment — for SEMS audit ASR Rig OSHA investigation photos ASR Rig Sundry meeting Field Audits Prgm Audits Safety Mtgs Supports Invstgtns 1 1 1 1 2 1 2 1 1 1 2 1 2 1 1 1 1 1 1 1 1 1 1 Tuesday, January 19, 2016 Page 2 of 2 EXHIBIT 3 Page 2 of 2 THE STOP* SAFETY OBSERVATION CYCLE DECIDE REPORT \TOP -s.,rr,�-.: ,AC/ 068ERVE Actions Unsafe Sate Unsafe Safe — Adjusting Personal — Head -to -Toe Check Protective Equipment --_ Head - - Changing Position — — Eyes and Face — Rearranging Job — — Ears - - Stopping Job — Respiratory System - -- Attaching Grounds — Arms and Hands — Performing Lockouts — — Trunk _ _-- Contacting — Legs and Feet Electric Current Injury Causes — Right for the Job -- Striking Against or — Used Correctly Being Struck by Objects — In Safe Condition — Caught In, On, or — — Ears — Between Objects �Pr6cedures Falling _ Ali — Contacting Temperature Extremes —Available _-- Contacting — Adequate Electric Current — Known — inhaling, Absorbing, — -- Understood or Swallowing a __ Followed Hazardous Substance — Repetitive Motions - - Awkward Positions/ — 'Orderliness Static Postures Standards _ Known - - Understood — Followed STOP00-OCL-ENG 0903 THE STOP' SAFETY oeseRVATION CYCLE DECIDE REPORT \TOP ss,...,. p AC/ MUM Actions nsafe Safe Unsafe Safe —. Adjusting Personal — Head -to -Toe Check Protective Equipment —Head — -- Changing Position — — He and Face - - Rearranging Job — — Ears — — Stopping Job _ . Pespiratory System - - Attaching Grounds — -- Arms and Hands — — Performing Lockouts — — Trunk - Temperature ExtremesequateContacting - Legs and Feet — Injury Causes — Right for the Job — Striking Against or — — Used Correctly Being Struck by r In Safe Condition Objects _- Caught In. On, or — Between Objects FallingContacting 7ailable Temperature ExtremesequateContacting Currantderstood ownElectric — Inhaling, Absorbing, — or Swallowing a — Followed Hazardous Substance — Repetitive Morons — — Awkward Positions! — !Orderliness At static Postures Standards _ — Known — Understood Followed STOPOO.00L-ENG•OD03 EXHIBIT 4 Page 1 of 33 ""Top....... savYi on orate ELIMINATE UNSAFE CONDITIONS— � PREVENT INJURIES / Safe acts observed t Are They — Right for the Job In Safe Condition — Are They Unsafe acts observed — Clean — Orderiy - - Right for the Job - - In Safe Condition — Is It Clear, — Orderly _ Name — In Safe Condition - 8 - --� !) Date She Standards — Available a—C9,�1. rea — Adequate"�y� T �..,, Shift �.r Q T f rrJ Trm-e spen„t on observation # of People Contacted SEI httplfwww.iraatl!rg dupnnt cam! vdeolstopeckl�st # of People Observed Additional STOP' Observation Cfieekllsts can be obtained byy contacting Please visit ywj!(,([gjII109:�.'�Sltl.lb= for contact ! orO DuPont. rm place an order on-tlne. Copydgt 1®20 reserved " Dupont. A!I rights reserved. STOP" and the STOPFtogo are regmiered trademarks of Du Pent. me 6fai°er.mvawxwwneYanue ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES I Unsafe Safe acts observed Are They ._. Right for the Job — to Safe Condition — Are They — Clean — Orderly — Right for the Job ._. In Safe Condition Is 1t — Clean — Orderly — In Safe -Condition Standards Available — Adequate ©Fr 0 a hflp-.i wwtraini �g.dupontcomi videa5lvp•chekhst Additional STOP' Observation C DuPont. Please visit+y�!g!d1 place an order on-llry . Copyrlghl and the STOPs!oga are register — I Unsafe acts observed — Name Date Site �. t I*! ;i. I n ii A Shift S M14 Time spent on observation # of Pecos Contacted # of People Observed 10 wkksts can be obtained by contacting gyppgtcom for contact information or to 72011 DuPont Al nghts reserved. STOP trademarks of DuPont. EXHIBIT 4 Page 2 of 33 THE STOP SAFETY OBSERVATION CYCLE DECADE RE%PORT r STOP\ d 1 /j ACT 1 O®SiRVEy, .. - --- Adjusting Personal — Actions Unsafe Safe Unsafe Safe Personal Reactions V S.t(l of ..Ali Adjusting Personal — �° ujoinent Head -to -Toe Check Protective Equipment Head Changing Position — Eyes and Face - - Rearranging Job — Ears - - Stopping Job — Respiratory System - - Attaching Grounds — Arms and Hands - - Performing Lockouts — — Trunk — Tools and — Right for the Job _ Legs and Feet Pbsitio ns Of Peop] All Safe .0 Injury Causes Being Struck by Objects T001!5 and Equipmept All S — Right for the Job -- Striking Against or — — Used Correctly — Being struck by — in Safe Condition — Objects Pr ocedures All Safp FA — Contacting Temperature Extremes — Caught In, On, or — Between Objects Procedures All; Safc�, : _ Failing - — Known - Contacting Temperature Extremes _ Available — — Contacting -- Adequate — Electric Current — Known - - Inhaling, Absorbing, — — Understood — or Swallowing a Followed — Hazardous Substance _ — Repetitive Motions — Awkward Positions/ --O rliness Ail $cIfe"70 ' Static Postures - Understood Standards — Known — _ Understood - STOPGD-GCL-ENG J003 - Followed -- STOP00-0CL-EMG11CO3 THE STOP' SAFETY OBSERVATION CYCLE DECiDDE REPORT \ ` x J STOP ACT OBSERVE Actions Unsafe Safe Unsafe Safe Personal Roctions .. - --- Adjusting Personal — Equipme It Head -to -Toe Check Protective Equipment Head — Changing Position — — Eyes and Face — Rearranging Job — Ears - -- Stopping Job — Respiratory System — Attaching Grounds — Arms and Hands _ — Performing Lockouts .--- — Trunk — Legs and Feet Injury Causes Tools and — Right for the Job — Striking Against or — Used Correctly — Being Struck by Objects — In Safe Condition - - Caught In, On, or Between Objects — Failing — Pr ocedures All Safp FA — Contacting Temperature Extremes — Available — Contacting _ — Adequate — Electric Current — Known — Inhaling, Absorbing, — — Understood or Swallowing a — Followed — Hazardous Substance — Repetitive Motions - - Awkward Positions/ -- or d' Static Postures Standards — Known - - Understood — Followed STOPGD-GCL-ENG J003 EXHIBIT 4 Page 3 of 33 :LIMINATEUNSAFE CONDITIONS... eaTors r �••"M Kr 'REVENT INJURIES Conditions Unsafe Safe • • Safe acts Observed• Are They — Right for the Job — In Safe Condition Are They Unsafe acts observed — Cleani �otr } i ands . _ Orderly f — Right for the Job `H e t`� 1�1 c.5i25 _J.In Safe Condition — 10)1 3h�r� �a F�r� Date 4T-" 0 n _ Is It Unsafe acts observed — Clean _ — Orderly Name — In Safe Condition # of People Observed nal STOW Observation Checklists can be obtained by contacting r. visit www tra�r•1g Date Is It — Clean Site Standards %N Iii<< .Pel nr — Available _ +irea----L—�` — Adequate h,'5 k t- •$ i •`f Shift ns, amr..r.r o...w',,.r•. r ELIMINATE UNSAFE CONDITIONS— PREVENT INJURIES Conditions Unsafe Safe Safe acts observed • •! De f �Sry J Are They ia?�i`'. %a:) — Right for the Job — ` — In Safe ConditionU'=�' " Are They Unsafe acts observed — Clean T/me spent on obseniation © hsp:7r�mv.lralUng.tl�ryunl.cortv # of People Contacted tideohloo-checxNst # of People Observed nal STOW Observation Checklists can be obtained by contacting r. visit www tra�r•1g dela dy PPa cane for contact information or to order S b oM'IjCuPYlght T p I DuPont. All rights reserved. STOP' ns, amr..r.r o...w',,.r•. r ELIMINATE UNSAFE CONDITIONS— PREVENT INJURIES Conditions Unsafe Safe Safe acts observed • •! De f �Sry J Are They ia?�i`'. %a:) — Right for the Job — ` — In Safe ConditionU'=�' " Are They Unsafe acts observed — Clean - - Orderly — Right for the Job — In Safe Condition �trivrronttnent All Safe Is It — Clean — Orderly — Name — In Safe Condition— R - E`y Date site Standards t — Available — Area ___ Adequate ______ (�rr Mtp:llwr a.aaining.duportl VON ,idedsto¢GIICCk:l9i Additional STOP" DuPont. Please vi place an order on. and the STOP' lo< S Time spent on observation # of People Contacted 0 # of People Observed 0 L can be obtained by contacting ,M for contact kXormatwn or to DuPont. Ali rights reserved. STOP• narks, of DuPont. EXHIBIT 4 Page 4 of 33 rrl N m U a C • CU I o V Q rbc Wy U coi � • Zlk- " 8 �, O .o aCD . ' Z� ga ' m t— gi to ~ E w ° '� 'm �� wa m "t I r _ U O tiC U Q ro Q v Q I I I I � I ro¢ Qa�a EXHIBIT 4 Page 4 of 33 THE STOP® SAFETY OBSERVATION CYCLE DECIDEREPORT ffi /f \TOP MP AC7 OBSERVE Actions Unsafe Safe Unsafe Adjusting Personal — Head -to -Toe Check Protective Equipment — Head - - Changing Position — — Eyes and Face — Rearranging Job — — Ears - - Stopping Job — — Respiratory System - - Attaching Grounds — — Arms and Hands - - Performing Lockouts — — Trunk - Contacting Temperature Extremes — Legs and Feet Injury Causes — Right for the Job — Striking Against or — Used Correctly Being Struck by — In Safe Condition Objects Arms and Hands - — Caught In, On, or — Trunk -- Between Objects Procedures Ali — Falling - - Contacting Temperature Extremes —Available — Contacting — Adequate Electric Current — Known — Inhaling, Absorbing, — Understood or Swallowing a — Followed Hazardous Substance — Followed — Repetitive Motions - - Awkward Positions/ — Orderliness Static Postures Ord Standards — Known - - Understood - - Followed — I STOPOO-OCL-ENG-0003 THE STOPrO SAFETY OBSERVATION CYCLE DECIDE w WORT STOP ,o., ACT OBSERVE _J Actions Unsafe safe Unsafe safe Adjusting Personal — i Head -to -Toe Check protective Equipment — Head Changing Position — Eyes and Pace — — Rearranging Job — Ears - - Stopping Job _ Respiratory System — Attaching Grounds Arms and Hands - - Performing Lockouts — — Trunk -- Between Objects Legs and Feet — injury Causes — Right for the Job — Striking Against or — — Used Correctly Being Struck by — In Safe Condition Objects 11414! — Caught In, On, Or Between Objects i Procedure", All — Falling — Contacting _Available Temperature Extremes —Adequate — Contacting — Electric Current — Known — Inhaling, Absorbing, — — Understood or Swallowing a — Followed Hazardous Substance — Repetitive Motions -- - Awkward Positions/ —i Ord Static Postures standards y G _ Known _ Understood Followed STOPOo-OCL-ENG-0003 EXHIBIT 4 Page 5 of 33 11!!14lj !4! 11414! !!! a y G Y .0000 y U LL T Z LL m m cc t C U 0 d O b 't11j F .. .. tD �_ N 1 N x —00 C to C a Q o s � �. �-_ T t6 07 0 W W aC 4 H a�C! I A I I! 1 I! ! Q Y LLO. V I I I • 45 C Y u - y I I I u o�� Q ) I I I awcc 0� -00 L) 0 E c 0 . aZ O - P J p_ C Co 0 A -A IA W 'L 82)- N S oo co CL <D �0 tCD N G tt7 'C U Y CaOi 7.4 cE CC rnN O • d 4.. U ff v= Q Q. 07 EDO (0 67 c4 QM tL .3�[U O O U t- U W � Z5 ¢ Q u7 a EXHIBIT 4 Page 5 of 33 J0 : 'fiii� �7t t°iks�xv�#ti�rJ Chula#iso i. ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES Conditions Unsafe Sate . —!� — In Safe Condition Striuctures and Safe acts observed 'Work Area Ali Safe Are They All hI'll �,5 o.v' 1 IR Are They — Right for the Job — a, a Right for the Job — In Safe Condition - In Safe Condition Work Area, All. Safi, Jt:. Are They Unsafe acts observed — Clean — Orderly — Right for the Job []* — In Safe Condition Environnient All Safe htlp:Yr training, duocnl.l�mi rideolstog<neckllst # of People Observed Q Is It — Clean — Orderly _ — In Safe Condition — Name 3 -JI -15 Date C - P L,� nC� Site Standards rr t vlf_ b' i,,( Area C, A Available — AdequateIn — Shift Time spent on observation # of People Contacted mo, 1'wx -ainng dupunt.caW videoatcp-checkk" # of People Observed Additional STOP" Chservatinn Checklists Dupont. Please visit www imping pugont place an aider online. Copyright A 2011 and the STOP°logo are registered Irademarks can be obtained by cortacting corn for contact information or to DuPont All rights rese,ved. STOP"" - of ooPont- Is kt �j''C�'� Are They -.._ Right for the Job —!� — In Safe Condition Striuctures and l 'Work Area Ali Safe Are They Y% Unsafe acts observed — Clean - - Orderly — Right for the Job - - In Safe Condition _ Is kt �.�I — Clean — Orderly Name _ — In Safe Condition —� l Dat a rt - Site Standards Area —. Available — �1 t Adequate -• — Shift-) rr Time spent ori observation []* # of People Contacted htlp:Yr training, duocnl.l�mi rideolstog<neckllst # of People Observed Q Adohionai STOP* Observation Checklists car can be obtained Dv contacting DuPont. Please visit wuw.trainina—` tot coniact Intimation or td and thenSrOPalogo are rawstereht d trademarks of DuPont Ail s reeetved. 9TOP° EXHIBIT 4 Page 6 of 33 a l a j' i O `I O V m nC� M pn� r t N '� VF. Z 0 S:a. t �q y�k`I�'� g�o °z I f °v N� 2 V 'i C ❑l, E U� p v m o m EXHIBIT 4 Page 6 of 33 THE STOP'SAFETY OBSERVATION CYCLE OEC`IOE REPORT \ STOP`` 1 / OI!>l6RVG Tp4OR�►�?a't(c��.Gherklisf - ACtIOIIS Unsafe Safe Unsafe Safe Reactions 41 aft . Prq�ectlye Cs of* ' •Adjusting Personal — Head4o-Toe Check Protective Equipment — Head - - Changing Position — — Eyes and Face — Rearranging Job — — Ears — Stopping Job — — Respiratory System - - Attaching Grounds -- Arms and Bands — Performing Lockouts — — Trunk — Legs and Feet positions TOols and Injury Causes — Right for the Job - - Striking Against or — —. Used Correctly — Being Struck by _ In Safe Condition — Objects —. Caught in, On. or Between Objects — Falling - - Contacting — Available Temperature Extremes — Contacting —Adequate — Electric Current — Known - - inhaling, Absorbing, — — Understood or Swallowing a — Followed — Hazardous Substance Repetitive Motions - - Awkward Positions) — Static Postures Standards Krown - - Understood — Followed STOP00-OCL-ENGdfCO3 THE STOP" SAFETY OBSERVATION CYCLE DECIDE REPORT \ %TO PA CT / OBSERVE Actions Unsafe Safe Unsafe Safe ersonal . ° All — Adjusting Personal — ,° H?!Mo-Toe Check Protective Equipment �ead — Changing Position — — Eyes and Face — Rearranging Job — _ Ears — Stopping Job — — Respiratory System _ — Attaching Grounds — Arms and Hands Performing Lockouts — — Trunk % _ — Legs and Feet T[ of PeopleAll S'MO r4 Injury Causes Equipment Alf Safe Fj — Right for the Job - - Striking Against or — — Used Correctly Being Struck by Objects— — in Safe Condition Caught In, On, or _ Between Objects — Failing Procedures T Contacting Temperature Extremes —Available - - Contacting _ — Adequate Electric Current ,.._ Known — inhaling, Absorbing, — — Understood or Swallowing a — Followed Hazardous Substance — F2epetttive Motions — Awkward Positions( —7Standards Static Postures stood ed STOP00-OCL-ENG•D003 EXHIBIT 4 Page 7 of 33 f■ (ELIMINATE UNSAFE CONDITIONS.,, .,.RMM — o.sav�� 1— PREVENT INJURIES — Clean — Orderly Conditions Unsafe "�"� # of Peopta Observed Safe '. Tool-, anclWe acts observed — Clean Are They — Orderly ---- Right for the Job — r — In Safe Condition Are They Unsafe acts observed — Clean — Orderly # of People Contacted w Right for the Job # of Peopta Observed In Safe Condition Envirori All Safe on-line. ® 2011 uPOnt. All rights reserved. ST`op,, e STOP® logo are recisterad in,dom�.a« ,.i n�!. - Is It — Clean — Orderly — In Sate Condition — ate I site p Standards _... Available -_.. Adequate me STDV°MmYoOseu,oxmu ELIMINATE UNSAFE CONDITIONS... "�� PREVENT INJURIES \ Conditions Unsafe Safe Safe acts observed Are They — Right for the Job - - In Safe Condition — Are They Ll of ` rmeSpent on observation —. Orderly .J Right for the Job # of People Contacted ndp•'7vrorwkai�r�ng.dupont.mm! v,deorst°prl,eckl�sl # of Peopta Observed onal STOP' Observation Checldlsts can be obtained by contacting nt. Please Asil AIKN trainin for Contact infortnadun or to an order Copyright on-line. ® 2011 uPOnt. All rights reserved. ST`op,, e STOP® logo are recisterad in,dom�.a« ,.i n�!. - me STDV°MmYoOseu,oxmu ELIMINATE UNSAFE CONDITIONS... "�� PREVENT INJURIES \ Conditions Unsafe Safe Safe acts observed Are They — Right for the Job - - In Safe Condition — Are They Unsafe acts observed — Clean —. Orderly .J Right for the Job — atrcrn w��cc�'r�:Jn v^ /! Qr'4___►"� — In Safe Condition — "tAO s Is It Clean Inme Safe a In Safe Condition — Date o I _ -7-f � S)te ' _P,,,A Standards Area — Available — �1 �L Adequate �,�Tµ '.yurf� nnG„Kww.trainirtg.=1 co m` v ideclstap-chec gist Additional STOP8 0135arvetlon C DuPont Please visitt�>xd1= place an order on-line. Copyrgtt and the STOP°lcgo ata re 1111, Time spent on observation # of people Contacted # of peopi4 Observed 93 a can be obtained by contacting _ EXHIBIT 4 Page 8 of 33 \� #g¥}\m} / C3 /} ƒ7/ lii 12 g\\O 111 61l� C=n ( § >=mm= `,\ \3)`'�# EXHIBIT 4 Page 9 0 33 ®(ƒ ±®3 °° »2 22 °$$) � (/ \ k/} }() 10 /\ /\\ g\ \ \ 0- / 2 \{} /± { }CD P cr) (� { II`i ILII 1 I III£ IIIA) �If iEEg-ncx> 55= 7ƒ\# \(/)\ /(f \� #g¥}\m} / C3 /} ƒ7/ lii 12 g\\O 111 61l� C=n ( § >=mm= `,\ \3)`'�# EXHIBIT 4 Page 9 0 33 In f ELIMINATE UNSAFE CONDITIONS... r -T 11—,%T (PREVENT INJURIES �TQP Conditions Unsafe Safe Safe acts observed EqLllpm' n,t, All Safe Ir ttYy�tAj a/Strtw Are They (a n.w s. can t �wur — Right for the Job _ 7<1 %:00 ?vests I In Safe Condition—}x+±.f_✓4!31- L�AtmIll Are They Unsafe acts observed — Clean -- Orderly — Right for the Job — In Safe Condition —I -- �rr 0 tdtp;lAwm tr a�ring.dupcm.rnm+ VNkYo'slop•ChacKllst dditionat STOPS Observation C! are _ J5q+,;N Time spent on observation # of PeoP1e Contacted ❑ # OfPeople Observed ❑ can be obtained by contacting com for contact information or to Dupont All rights reserveo. STDP' ELIMINATE UNSAFE CONDITIONS... Clean — Orderly eine _ — In Safe Condition — p Date rq Ofd 7AreThey Site Standards Will — Available Area — Adequate j �rr 0 tdtp;lAwm tr a�ring.dupcm.rnm+ VNkYo'slop•ChacKllst dditionat STOPS Observation C! are _ J5q+,;N Time spent on observation # of PeoP1e Contacted ❑ # OfPeople Observed ❑ can be obtained by contacting com for contact information or to Dupont All rights reserveo. STDP' `t'he STP4 vat Chek�Sfl' ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES Conditions O Unsafe Safe p o rq Y � 7AreThey mr C �-reeeWt srv�,yEtCondition 0 lit to rn AL ra o "� TJ LL w G Q Z O m r o1 `t'he STP4 vat Chek�Sfl' ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES Conditions O Unsafe Safe p Safe acts observed go.wd wars sntdul.�twv 7AreThey mr the Job — �-reeeWt srv�,yEtCondition QC wrt4,d,4 :.arts i'l rk. t � SApGt'1 7keThey Unsafe acts observed n rly — __ Right for the Job - - In Safe Condition F5fivironnient All Safe W, Is It -_ Clean — Orderly Name — in Safe Condition — Date Ord a -0b mp site Standards -AP — Available _ Area — Adequate Shift �rr 0 J mr,Y' Time spent on observation 0 # of People Contacted ❑ h(b 1Anrs. trainingikfiontcomt videasrop-eheckrtal # of People Observed ❑ Additional STOP- observation Checklists can be obtained by conlacting DuPont. Please visit nouoonl com for contact information or to place an order on-line. Copyright 0 2091 DuPont. All rights reserved. STOP" and the STOP* logo are registered trademarks of DuPont. �.O O p O r+i QC o � tb r_i R n S. _ 0 EXHIBIT 4 Page 10 of 33 THE STOP® SAFETY OBSERVATION CYCLE DECIDE +,l,�p REPORT STOP CSSERVE Actions Unsafe Safe Unsafe Safe -- Adjusting PerSonai — Head4o•Toe Check Protective Equipment — Head — Changing Position — — Eyes and Face - - Rearranging Job — — Ears - --. Stopping Job — — Respiratory System _.,. — Attaching Grounds — Arms and Hands — Performing Lockouts — — Trunk _ — Contacting __ Legs and Feet Temperature Extremes positions Injury Causes Tools and Right for the Job — Striking Against or — — Used Correctly — Being Struck by Objects — In Safe Condition - - Caught In. On, or Between Objects Falling Procedures All Safe 0 — Contacting Temperature Extremes —Available — Contacting — Adequate — Electric Current — Known — Inhaling, Absorbing, — — Understood or Swallowing a — Followed Hazardous Substance — Repetitive Motions — Awkward Positions/ —7ftandards Static Postures — d STOPOO-DCL-ENG•0003 EXHIBIT 4 Page 11 of 33 I .... sroP .......avrnoxcm� ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES Conditions Unsafe Safe OR.. Safe acts observed Are Theyr}� — Right for the Job _4: b — in Safe Condition _ � �ti Are They f — Clean 24- ST9F'.r. .v.roN CYC:G ELIMINATE UNSAFE CONDITIONS. PREVENT INJURIES I 1 Conditions Unsafe Safo s � Is It Tools and.Safe acts observed Equipment All Safe. Are ��f`'•'g <' _.. Right for the Job'^ Date — In Safe Condition K yp_r $Ite Standards Are They Unsafe acts observed — Clean Sf 4 _ Orderfy - - Right for the Job ©.r Q — in Safe Condition Envi Time spent on observation Is It # of People Contacted Q # of People Observed O — Clean � -- Orderly — ame — in Safe..Condltion — _ 7 Date U 7Adequate sble Area — f=' Shift ? Time spent on observation # of People Contacted htlpJN,ww.f2ining.duponLsam' vAea'staPrtecklist # People of Observed Additional 810P` Observation Checkiisis can be obtairad by contacting DuPont. Please visit www.trelnfng duppont ccm for contact information or to ptace an order en-!ine. Copynw1 tw 2ott DuPont, All rights reserved. STOPt and the STOP''logo are registered trademarks of DuPont. I .... sroP .......avrnoxcm� ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES Conditions Unsafe Safe OR.. Safe acts observed Are Theyr}� — Right for the Job _4: b — in Safe Condition _ � �ti Are They f — Clean 24- eg I - Orderly — Right for the Job — In Safe Condition � Is It .Q m - - Clean — Orderly _ — In Safe Conditiona — Name rr 2 ` Date Orderliness $Ite Standards � Area -- Available Sf 4 shiift ©.r Q m Time spent on observation v htlg:blrmv.Uelning.ducenlcaml viaemstap-ohec9l®t # of People Contacted Q # of People Observed O g F � lU o U_ t U rn W fn fn Q o f=' I .... sroP .......avrnoxcm� ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES Conditions Unsafe Safe OR.. Safe acts observed Are Theyr}� — Right for the Job _4: b — in Safe Condition _ � �ti Are They f — Clean 24- Unsafe acts observed I - Orderly — Right for the Job — In Safe Condition � Is It .Q m - - Clean — Orderly _ — In Safe Conditiona — Name rr 2 ` Date Orderliness $Ite Standards � Area -- Available — Adequate— shiift ©.r Q Time spent on observation v htlg:blrmv.Uelning.ducenlcaml viaemstap-ohec9l®t # of People Contacted Q # of People Observed O Additional STOPY Observatlon Checklists DuPont. Please visit www, pt.com place an order on-line. Copydg t oN and the STOPS logo are registered trademarks can be obtained tr coPoacting for contact in�onmatlo l or to DuPont All rights rawvod. STOP of DuPont. EXHIBIT 4 Page 12 of 33 '''777ttt777ttt I C ❑ a y a � .Q m a it o }f c o c o 4, lh e gz� a � z 1O lU E U_ t EXHIBIT 4 Page 12 of 33 THE STOP® SAFETY OBSERVATION CYCLE DECIDE REPORT ACT J OBSERVE „ Actions Unsafe Sate Unsafe Safe .. !. — Adjusting Personal — Head -to -Toe Check Protective Equipment — Head — Changing Position — — Eyes and Face - - Rearranging Job — —t=ars - - Stopping Job — — Respiratory System - - Attaching Grounds — Arms and Hands - - Performing Lockouts — — Trunk — Y Legs and Feet Tool- Positions61 4,ei ot people All R.f- Injury Causes — Right for the Job — Striking Against or — Used Correctly Being Struck by — In Safe Condition — Objects -%Caught in, On, or Between Objects — Falling — — Contacting — Available Temperature Extremes — Contacting — Adequate Electric Current --Known — inhaling, Absorbing, --- Understood or Swallowing a - Followed — Hazardous Substance — Repetitive Motions Awkward Positions/ — r ' Static Postures Standards — Known _ Understood — �_ Followed STOPDO.00L-ENG-0003 I I I I I 0 3 o, 0 131 O I Q 7C 'L7 N ril = I I I mg �o gL I v� Cl) _ a y 5' CD cc Hca m' A 5 O O N e.G Cto �? cep a Q? ��p CSD 0 ro No �91W 4a�4 r a � :t p, m THE STOP" SAFETY OBSERVATION CYCLE DECIID\E*' REPORT STOP 4-,,.r..,«•�.//E}AC/ \V / OBSERVE 7trs'ii�'s�l+ra#art# i18Ctttf#, ' , Actions [Unsafe Safe Unsafe Safe R Personal op 'Ie All 5at� �M Pe All Sale — Adjusting Personal — Mead -to -Toe Check Protective Equipment — Head — Changitrg Position — — Eyes and Face — Rearranging Job — — Ears — Stopping Job -_ Respiratory System - -- Attaching Grounds -- — Arms and Hands - Performing Lockouts -- _-- Trunk _ — Legs and Feet .. .. - Injury Causes Right for the Job - - Striking Against or — Used Correctly — Being Struck by _ In Safe Condition Objects — Caught In, On, or Between Objects — Falling Procedures All — Contacting — — Available Temperature Extremes - - Contacting — — Adequate — Electric Current Known — inhaling, Absorbing, — Understood or Swallowing a — Followed Hazardous Substance — Repetitive Motions - - Awkward Positions/ — • Static Postures Standards s7 Known __ Understood — Followed 7 STOPMOCi.-FNG-0003 I I 0 3 o, 0 131 o CTD D S C A W f C Ql Cl) o m m m a fD n o CA o O o. 4a�4 r a � THE STOP" SAFETY OBSERVATION CYCLE DECIID\E*' REPORT STOP 4-,,.r..,«•�.//E}AC/ \V / OBSERVE 7trs'ii�'s�l+ra#art# i18Ctttf#, ' , Actions [Unsafe Safe Unsafe Safe R Personal op 'Ie All 5at� �M Pe All Sale — Adjusting Personal — Mead -to -Toe Check Protective Equipment — Head — Changitrg Position — — Eyes and Face — Rearranging Job — — Ears — Stopping Job -_ Respiratory System - -- Attaching Grounds -- — Arms and Hands - Performing Lockouts -- _-- Trunk _ — Legs and Feet .. .. - Injury Causes Right for the Job - - Striking Against or — Used Correctly — Being Struck by _ In Safe Condition Objects — Caught In, On, or Between Objects — Falling Procedures All — Contacting — — Available Temperature Extremes - - Contacting — — Adequate — Electric Current Known — inhaling, Absorbing, — Understood or Swallowing a — Followed Hazardous Substance — Repetitive Motions - - Awkward Positions/ — • Static Postures Standards s7 Known __ Understood — Followed 7 STOPMOCi.-FNG-0003 d A CA .. m O o. i$ :t p, m a 6 EXHIBIT 4 Page 13 of 33 •..s,n..aupn lci ELIMINATE UNSAFE CONDITIONS.., `ergo a ervoeeeav » PREVENT INJURIES Conditions �"tt Unsafe • ` Safe acts observed e Are They '- - Right for the Job _ Todd- - od — In Safe Condition Are They — Clean Unsafe acts observed Orderly ------ Right for the Job ---• , In Safe Condition le It — Clean AcrJdG� - - Orderly M ame — In Safe Condition mm Date • Z site — Standards — Available— Adequate — ! �.r .0 httpJhmw.training.dt,ponl com/ videa'9lopthecktist an r,rne spent on observation # of People Contacted 2 #ofPeopleObserved ❑, can be obtained byy contacting fpr nt eontact;'nformation or to )uPont. Ail rights reserved. STOP= arks of t]UPom ELIMINATE UNSAFE CONDITIONS... .»e �ta»arc.. e.eemem»e ae PREVENT INJURIES \gym Unsafe Are They -- Right for the Job — In Safe Condition Are They — Clean — Orderly — Right for the Job — In Safe Condition Safe acts observed Unsafe acts observed Is It -�- Clean_ — Orderly J — In Safe Condition — O s site Standards Available — Adequate �,r Q Attp;Llr,•nv.iraining d�ppdaM.com videolatop•�.edi(st Additional STOP -Observation cl DuPont. Please visityv_t trelninc Place an order on -ding. Copyright and the STOPslogo are emste we mdca d XI r_ C� 1 1 i i l l C 0 ark 4 2 a 17 Q @ I I o o s w s" �r 64t P N (^ N m ? i j X (� d "1 4� a, , t� � m g' o h o w K n° 4e 2 ie •�� r, Q = m � m"�> Page 14 of 33 0 a' Cr 3 o 0 �5� 7 Cr I I v Cn ` � b � ♦. � to S D 3 o N a i mI 11d IIf [Ar ea 4i - Time spent on observation # of People Contacted 0 # of Peopte Observed Q can be obtainocibyy contacting pm for contact intormafion or to d XI r_ C� D C 0 O. N Alm A Z W O m � 0 W n to ; N 0 m •�� r, 8 EXHIBIT 4 Page 14 of 33 THE STOP" SAFETY OBSERVATION CYCLE DECIDE `REPORT �TO\P\ wy. Yn�saa, ®r ACT \ / OBSERVE -"Ttf+��"�T�':Q#ksl�G'4��►#Itr�.�heek{ist. Actions Unsafe Safe Unsafe Safe of Peopje. AIISafaQ Protective — Adjusting Personal — Head -to -Toa Check Protective Equipment — Head — Changing Position — — Eyes and Face - -- Rearranging Job — _, Ears _ - Stopping Job — Respiratory System - - Attaching Grounds — Arms and Hands -- Performing Lockouts — — Trunk — Legs and Feet 'Toolse Injury Causes ._,- Right for the Job -- Striking Against or — — Used Correctly Being Struck by Objects — In Safe Condition — _- Caught in, On, or Between Objects — Falling _ Peorpolur_es, All Safe Contacting Temperature Extremes — Available — Contacting _ — Adequate — Electric Current — Known — Inhaling Absorbing, — — Understood — or Swallowing a — Followed Hazardous Substance — Repetitive Motions - - Awkward Positions/ — Orderliness Static Postures Standards _.. Known .— Understood _ — Followed STOPOO-OCL-ENG-0003 THE STOP" SAFETY OBSERVATION CYCLE QECIPE REPORT STOP „C,,,, ACT /' OBSERVE Actions Unsafe Safe :Reactions Unsafe Safe Personal, Protect ive Safe E -P66ple. All Saf, j, — Adjusting Personal — At! Head -to -Toe Check Protective Equipment _ Head - - Changing Position — — Eyes and Face - - Rearranging Job — ^ Ears — Stopping Job _._ — Respiratory System - - Attaching Grounds — — Arms and Hands — Performing Lockouts — — Trunk - - Legs and Feet W ,St Injury Causes .� ls and — Right for the Job ac — Striking Against or — Used Correctly Being Struck by Objects _ In Safe Condition - _ Caught In, On, or Between Objects All Safe V-0 — Falling - Procedures - Contacting — Temperature Extremes — Available — Contacting — --- Adequate — Electric Current — Known — inhaiing, Absorbing, --- — Understood — or Swallowing a — Followed Hazardous Substance — Repetitive Motions — Awkward Positions/ —7Known Static Postures ds erstood wed STOP00.OCL-ENG-0003 EXHIBIT 4 Page 15 of 33 *xe STOY Mre'^ o...... crae ELIMINATE UNSAFE CONDITIONS,., PREVENT INJURIES r Conditions Unsafe Safe Safe ac s observed n T) Are They 'n — Right for the Job — In Safe Condition —shwcT Are They — Clean - - Orderly - - Right for the Job — In Safe Condition — Unsafe acts observed Is it – _. Clean PREVENT INJURIES Orderly — _ In Safe Condition — Name t �-o[3".— Date Unsafe Orderliness All Safe ,'Fj ,rte acts observed Site /� Standards z K Area — Available _... Adequate — I _ Shift Are They Qar Al", - ...._.�-- Time spent on observation — Orderly # of People Contacted Q htlPJkmlv.Isinirv3dupwt�rN wdedstop-ched dst # of People Observed 71 Additional STOPS Cbservation Checklists DuPont. Please visit gnaw train'ng.cluoont place an order on-line. Copyright 0 2011 can be obtainedby contacting ccm for contact information or to DuPont.Ati rights reserved. STOP' and the STOP, logo are registered trademarks of DuPont. —_ 77 . Ttte �r'k'E)p� C�Frti(�tian. Gi��ckU� exa BTOP'wery oe.emervweee..e ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES \ Conditions Unsafe Safe Tools andSafe acts observed kqZment Ali Safe E Are They — Right for the Job — ar` — In Sate Condition Structures and Are They Unsafe acts observed — Clean — Orderly — Right for the Job _ _ In Safe Condition Is It D — Clean g — OrderlyName — In Safe Condition 1z A/- 4157 Date 0(n Site //'.k Standards kir'..I j — Available — Area — Adequate 1_,/ OF Shift r Time spent on observation ti # of People Contacted M hdp/irrrw.!rainirg.dupo�t.Cuml .Maorstop-dhu;ktisl # of People Observed Dial STOPS Observation OinecUsts can be obtained by contacting nL Please visit www.trainlna d000nt car: for contact information or to an order on -fine Copyright 0 2011 DuPont Alt rights reserved. VOPs is STOPrlogo are registered trademarks of DuPont. EXHIBIT 4 Page 16 of 33 D g m OF U L o ff. 0 0 Ja 7 r . '330 ': � D IiI 4 � c7 �[ � f�rlf • i1 14 C O o m c moo. 16 0 o � LL W o c Z' p O s Po. a'c o wzQuo U s &�F 4 Z m o .��. rn rn L 61 -P pt in 6_25 � Cn _ m a) ii > 7? i Q. � � . V) EXHIBIT 4 Page 16 of 33 THE STOPO SAFETY OBSERVATION CYCLE DECIDE P REPORT cs �TDi 1 OBSERVE Actions Safe Unsafe — Adjusting Personal — I Head -to -Toe Check Protective Equipment — Head — Changing Position — Eyes and Face - - Rearranging Job _._. Ears - - Stopping Job — Respiratory System - - Attaching Grounds _– Arms and Hands - - Performing Lockouts — — Trunk - Contacting — - Legs and Feet — Injury Causes — Right for the Job — Striking Against or Used Correctly Being Struck by — in Safe Condition — Objects — Ears — Caught In, On, or — Respiratory System - Between Objects — Arms and Hands - — Falling — Trunk Contacting — — Available Temperature Extremes Followed Contacting — Adequate — — Electric Current _ Known — Inhaling, Absorbing, — — Understood — or Swallowing a — Followed — Hazardous Substance — Repetitive Motions - - Awkward Positions! static Postures — Standards ^_ -- Known - - Understood — Followed STOPDO-OCL-ENG-0003 - — Adjusting Personal — Head -to -Toe Check Protective Equipment _ Head — Changing Position — — Eyes and Face -_-_ Rearranging Job — Ears Stopping Job — — Respiratory System - - Attaching Grounds — — Arms and Hands - - Performing Lockouts — — Trunk — Inhaling, Absorbing, — — Legs and Feet or Swallowing a Injury Causes — Right for the Job — — Striking Against or — Used Correctly — Being Struck by — In Safe Condition Objects — — Caught In, On, or — Between Objects — Falling - - Contacting — Temperature Extremes — Available — Contacting _ — Adequate Electric Current Known — Inhaling, Absorbing, — — Understood or Swallowing a Followed Hazardous Substance — Repetitive Motions — — Awkward Positional — • Static Postures STOP00-OCL-ENC-0003 Standards --_- Known — Understood - - Followed — EXHIBIT 4 Page 17 of 33 ''>xt►s �1'Ot� C�1°�►Atis►n'i�eeCkNist ' . ,Hr 9TaP°vay.tren�^ +e_k ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES �`.�Q� Conditions Unsafe Safe amer .. �jfe act observed r Are They +C— _ Right for the Job — y — In Safe Condition Area Adequate — Are They ..-- Clean Unsafe acts observed — Orderly IC _ Right for the Job Time spent on observation In Safe Condition # ofPeople Contacted Q hitp:/,innv.train rtg dupanl c0tn1 Is It # of People Observed ED — Clean *NOW— — Orderly 'Name _ In Safe. Condition L� place an order on-line. op,,i.N and the STOP-'Icgo are registered trademarks of DuPont, tr . Si Standards �y Area — Available _ — Adequate__ Shift ❑.r Ttme spent on observation # of People Contacted htlp:;Iwvvzlraining.duoontronJ v�dea'stop-checklist Mmll # of People Observed LAi Additimna- STOP" Observation Checklists DuPont. Please visit gym.training nunont place an Order on-line. copyright C 2047 and the STOP° loge era registered trademarks can be obtained by contacting com ?or contact information ar to DuPont. All rights rasan+ed. STOP' of DUPort. •,. eror w.n=.a.,,k.crze ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES Unsafe �:Toim(s and Are They — Right for the Job -.-- In Safe Condition structures and Are They — Clean — Orderly — Right for the Job — In Safe Condition Safe acts observed _ �3 Unsafe acts observed Is It Clean - - Orderly — amer — In Safe Condition — Date,� f S ca� Yl �t g� tandars Avilable— Area Adequate — /�►r1 'f —_ Shift, �'r © Time spent on observation A.. m # ofPeople Contacted Q hitp:/,innv.train rtg dupanl c0tn1 de°tsmp °haca'st # of People Observed ED Additlonal STDP" Obaervaiion CheckViets can be obtained byy contacting to DuPont. Please visit y>7 +.t for contact InPormation or © 2024 DUPent. All tights reserved, STOP` place an order on-line. op,,i.N and the STOP-'Icgo are registered trademarks of DuPont, EXHIBIT 4 Page 18 of 33 T14E STOP SAFETY OBSERVATION CYCLE DECIDE REPORT \ �r STOP �'"�„a ACT OBSERVE Actions Unsafe Safe Unsafe Safe — Adjusting Personal _ Head -to -Toe Check Protective Equipment Between Objects — Head - - Changing Position — — Eyes and Face - - Rearranging Job — — Ears - - Stopping Job — __ Respiratory System - - Attaching Grounds — — Arms and Hands _ — Performing Lockouts — — Trunk - E — Awkward Positions( — - Legs and Feet — Injury Causes — R"ht for the Job — — Striking Against or — Used Correctly — Being Struck by — In Safe Condition — Obtects — Caught in, On; or 1 1 1 1 1 1 1 Between Objects — Falling — Contacting — Temperature Extremes —Available Contacting — Adequate Electric Current — Known — Inhalingg, Absorbing, — — Understood or Swe lowing a _ Followed Hazardous Substance — Repetitive Mottons — E — Awkward Positions( — ° Static Postures STOP00.01%-ENG-0003 Standards — Known - - Understood - - Followed — EXHIBIT 4 Page 19 of 33 1 1 1 1 1 1 1 I I I V I I I I I I E LU C Q O v -a ro a;o LT` is oU ° V w? 5a e F3 y n 3 d r m « m01 ww Q h t m (r a Q 4 <Y U. �X.�LL ' . 61 A E �.. O O4 y.= �1 w N,a C C 0.5 d Yf rc$ u') 0 7 rn c to O �- 4 O i" .a E cc d s M0 Ci �.t� G t g 3 Ya t5 � U'16 � C _ 5y0 a fYVC ` t0 t , 9, — E c`oSID ct a_ U � to 4 2 = tomO Um ti OF Uu.1 <(0 tC� EXHIBIT 4 Page 19 of 33 Are They — Right for the Job LV Z'in Safe Condition — Are They — Clean - - Orderly — Right for the Job in Safe Condition — acts observes 1. ,9 ,i ! 49 - Is It 1oA — Clean pp U z 'c��++r — Orderly — Nam — In Sate Condition Date Site � - Standards 70_ — Available Adequate ma — Shift ' — C_ ❑ Time spent on observation © # of People Contacted ntlp:+lwww.irainirg.dupom,croro] aidv;vslop-chec�mst # of People Observed Additional STOPS Observation Checklists car be obtained byy contacting DuPont Please visit ravly ini o t.com for contact information or to place an order on-Ilne�'epynght 2011 DuPont. All rights reserved. STOPT and the STOP" logo are registered trademarks of DuPont. t h�:g w-.04ser+i + t;rrpc�ett�r Are They _._ Right for the Job - - in Safe Condition — Are They . Unsafe acts observed lz — Clean�� r Orderly eg U lZ RRight for the Jo n0 r 1 1 — In Safe Condition` � �y tj� p l P Is It Clean — Orderly In Safe Condition Standards — Available — Adequate ©d a PUp:'AyideGr�stonp-�pxklisf court Additional STOP' Observetion t DuPont. Please visit 01Pi� Mace ar. order on-line PY,rgh Name r — Date Site. _ Area Time spent on observarton # & people Contacted 0 # of People Observed 0 ceh be obtained by contacting tour for wntact informatlon or to puPont. All rights reserved. STOP' ,..arks of DUPOnt- _. 1oA pp U z 'c��++r =° or No ¢ w A EXHIBIT 4 Page 20 of 33 k QQQQ�� e K M �l o 1 ` ql _ q U O O O - Z_'Z. �Z i7 y O U w- Tr L yTQ am, -P U7 Time spent on observarton # & people Contacted 0 # of People Observed 0 ceh be obtained by contacting tour for wntact informatlon or to puPont. All rights reserved. STOP' ,..arks of DUPOnt- _. 1oA pp U z 'c��++r =° or No ¢ w A EXHIBIT 4 Page 20 of 33 EXHIBIT 4 Page 21 of 33 I" ��53l�srt+atl�tte �hecklf�t - •xe STOW evvrvr oaxxva-nn cvc.e ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES �c , x. Conditions Conditions Unsafe Sate Unsafe Safe .. Safe acts observed Are They 'Safe -- - Right for the Job - C1" — Right for the Job' - In Safe Condition structures and..." — in Safe Condition — and Are They — Clean • Unsafe acts observed Orderly — Unsaa fe a fs ob Ived.-)Io �f Right for the Job _ _ In Safe Condition — — Orderly — — Right for the Job - A� M -C f' it 71n — ly _ e Condition — Nam. .11 2Z %S- _ 7 dte s.•site In Safe Condition — Dat�j Standards Site - Area __- Available — — Adequate Shift Shift � vt !1 .- Time spent on observation # of people Contacted IQ Time spent on observation F -T # of people Observed J # of People Contactad Q hrp'ltwxwtraining duvnnt corn! uklaolslop•checkust # of People Observed Additional STOPg Ons—mhob Checklists DuPont- Please visit www lrainlrm duoont place an ordercn-line. Copyright 02011 and the SIOP° logo are registered trademarks can be obtained by contacting co m for contact information or to DuPont All rights reserved. STOPS of DuPont. 77-77 7777� STO cu- OMexvMnxcrcrC ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES Conditions Unsafe Safe acts observed 'Safe �tk i X IL; Are They C1" — Right for the Job' — in Safe Condition and t ' • �I /!yYdf f Are They Unsaa fe a fs ob Ived.-)Io �f — Clean _ — Orderly — — Right for the Job - - In Safe Condition — is It — Clean — moo v Orderly Nam 1ee 9_.L7= (— -- In Safe Condition — Dat�j Standards Site - - Available — — Area _. •'�` —Adequate Shift �!r � vt !1 .- Time spent on observation # of people Contacted IQ aq::u,viceoeining.du,�stcoml vueo's+op hack�t F -T # of people Observed J Additional STOP-' Observation Checklists DuPont. Please visitp.tLri on -lino. Copynight , a can be obtained by contacting for contact information or to 1 DuPont. All rights reserved. STOP' place an order and the STOP' logo are registered fradamarka of DuPont. QC ER o moo v C) _4Z 21 I O u W fq W W on C 0 c $ ,0 C o C o �• Cdr �� z. LCs Q V U 0Q iu _ ry EXHIBIT 4 Page 22 of 33 THE STOP° SAFETY OBSERVATION CYCLE DECIIDDE1 1REPORT y oesenvE tibsfYett%ft� Ctt$c1jNs# Actions Unsafe Safe Unsafe Safe — Adjusting Personal Head -to -Toe Check Protective Equipment — Head - - Changing Position — — Eyes and Face - - Rearranging Job — -__ Ears - - Stopping Job — — Respiratory System - - Attaching Grounds — — Arms and Hands - - Performing Lockouts — — Trunk - — Contacting — - Legs and Feet — Electric Current Injury Causes — Right for the Job — Striking Against or — Used Correctly Being Struck by Objects V in Safe Condition — Caught In, On, or — — Ears _ Between Objects — Respiratory System - Falling — Arms and Hands _ Contacting Temperature Extremes 7—Known ble — Contacting — ate Electric Current Adequate Inhaling, Absorbing, —stood — Known or Swallowing a — Followed Hazardous Substanoe — Followed — Repetitive Motions — Awkward Positions/ — •fderlinbssAll Static Postures Standards — Known - - Understood — Followed STOPOa OCL -ENG -000a THE STOP* SAFETY OBSERVATION CYCLE DECIID\E` REPORT All/ OBSERVE Actions Unsafe Safe Unsafe — Adjusting Personal — Head -to -Toe Check Protective Equipment — Heed — Changing Position _ Eyes and face — Rearranging Job — Ears _ — Stopping Job — Respiratory System - - Attaching Grounds — Arms and Hands — Performing Lockouts -- — Trunk _ Temperature Extremes — Legs and Feet Injury Causes — Right for the Job — Striking Against or Being Struck by — Used Correctly Objects — In Safe condition taught In, On, or — Between Objects Falling — Procedures All — Contacting Temperature Extremes _. Available — Contacting Adequate Electric Current — Known — Inhaling, Absorbing, — — Understood or Swallowing a — Followed Hazardous Substance — Repetitive Motions - - Awkward Positions/ —7Sta RStaOc Posturesff,ards own derstood llowed STOPCO-OCL-ENG-0003 EXHIBIT 4 Page 23 of 33 me STOP' .... ....xwrgxc1<ri ELIMINATE UNSAFE CONDITIONS,.. PREVENT INJURIES �\,f Conditions Unsafa safe .. afe acts observed Are They — Right for the Job - - In Safe Condition — Are They Unsafe acts observed — Clean — Orderly — Right for the Job .-._ In Safe Condition Is It — Clean _ _ Clean V . Orderly — Name 1 — In Safe Condition — d7,/ Standards — Available — Adequate ©.r 0 o �-tip.1;"w training.du antceml mwstoixhac ;St DuPont. Please visit Place an order on-rn and the STOP -logo 0 Time spent on observation # of People Contacted ❑ # of People Observed ❑ can be obtalned by contacting = for contact lntormason cr to )uPeril. All rights reserved. STOP" larks or DuPont, ELIMINATE UNSAFE CONDITIONS... rwroP >a .err«r PREVENT INJURIES C'my Conditions Unsafe Q.t- .. acts observed Are They — Right for the Job - - In Safe Condition Are They Unsafe acts observed — Clean _ — Orderly — _. Right for the Job r — in Safe Condition " Is !t — Clean _ — Orderly _ Name — In Safe Condition — rdeiiiness rj Dat Site Standards — Available Adequate Area Orr t� Time spent on observation ti httP-�Mn..w.t!a:n4'i5 # of People Contacted ❑ kYupontcomr vidsa5top.checKist # of People Observed ❑ dot�ena! STOPn Observation CheckUats can be obtained by contactlna uPoni. Please vlsii �iww.trainfna�t,rcm for contact information or to ace an order or,.line. Copyright a 2911 OUPpnt All rights reserv.d, STOP• id the STOPS Popo are reoistereA nnn.,,..�.u� �. n..n__. EXHIBIT 4 Page 24 of 33 THE STOP' SAFETY OBSERVATION CYCLE DECIDE `REPORT \TOP oaun. ca.p,, ACT OBSERVE Actions Unsafe Safe Unsafe Safe -_ Adjusting Personal — Head -to -Toe Check Protective Equipment — Head Y Changing Position _._. Eyes and Face — —�t2earranging Job — Ears -_ : Stopping Job — Respiratory System - - Attaching Grounds — Arms and Hands — Performing Lockouts — ._- Trunk Contacting Temperature Extremes — Legs and Feet — Positions Of PLOple in ry Causes All Safa, W: for the Job Striking Against or —;Right d CorrectlyBeing Struck by Objects afe Condition — Actions Unsafe Safe , Caught in, On, or — pie AWW1 "M — Adjusting Personal — Between Objects E — Falling - Changing Position Contacting Temperature Extremes —Available — Contacting — -- Adequate Electric Current _ Known — Inhaling, Absorbing, — — Understood — or Swallowing a _ Followed Hazardous Substance Pqsi t 'tons Injury Causes — Repetitive Motions d A (C Crs p1 F .Z W tL ' 4 4- 7 J � — Awkward Positions/ —7Static Objects Postures s ndards EXHIBIT 4 Known 1W� Understood Q tb Followed STOPOO-OCL-ENG-0003 Electric Current — THE STOP1 SAFETY OBSERVATION CYCLE DECIDE REPORT \TOP :,%J.,..... ,AC/ R I I I I f I! OBSERVE the STi'°°'Qfsew�ttitzet GIckfist Actions Unsafe Safe , Unsafe Safe pie AWW1 "M — Adjusting Personal — All Sale 0 He -to-Toe Check E -9 Head - - Changing Position — Eyes and Face — d — Ears - - Stopping Jab — — Respiratory System —. Attaching Grounds OU W �/ — Trunk C K y � � Pqsi t 'tons Injury Causes � a � d A (C Crs p1 F .Z W tL ' 4 4- 7 J � O Objects o� .. ' s Between Objects EXHIBIT 4 — Falling - 1W� y Q tb I i I I I i — Adequate — Electric Current Known - - Inhaling, Absorbing, — or Swallowing a — Understood — Followed Hazardous Substance O S C Lu - Awkward Positions! 0- Standards 5 — Known — Understood arL` U�in¢ti — Followed STOPCO-OCL-ENG-0003 — THE STOP1 SAFETY OBSERVATION CYCLE DECIDE REPORT \TOP :,%J.,..... ,AC/ Iy I w p OBSERVE the STi'°°'Qfsew�ttitzet GIckfist Actions Unsafe Safe , Unsafe Safe pie AWW1 "M — Adjusting Personal — All Sale 0 He -to-Toe Check Protective Equipment -9 Head - - Changing Position — Eyes and Face — Rearranging Job — Ears - - Stopping Jab — — Respiratory System —. Attaching Grounds — Arms and Hands — Performing Lockouts — — Trunk W — Legs and Feet — Pqsi t 'tons Injury Causes Tools and — Right for the Job — Striking Against or Be'sng Struck by — Used Correctly — Objects — In Safe Condition _- Caught In, On, or Between Objects EXHIBIT 4 — Falling - - Gontar%i q_ Temperature Extremes Available _ Contacting — — Adequate — Electric Current Known - - Inhaling, Absorbing, — or Swallowing a — Understood — Followed Hazardous Substance — Repetitive Motions - - Awkward Positions! Static Postures Standards — Known — Understood — Followed STOPCO-OCL-ENG-0003 �.. d.,,� � C O D A Iy I w p 73 U 2 3 R io m a sz b G Q C ill a Y LL VIII I I Iy I I L I I G_ C..�e c9 c� C N Q i7 Lu C N TOR7 .Q Q N snffJ O O ma.0: �e -v-U �a W V Z CO F)toE G co m ° aE C U r° roLnN (6 f �j EXHIBIT 4 Page 25 of 33 Are They - Right for the Job In Safe Condition Are They - Clean - Orderly _ Right for the Job - In Safe Condition IS It - Clean Orderly In Safe Condition Standards - Available - Adequate %"211 h:p,rtwww.}rd�ning.dupont.com; wdeoisl'p_' mist Additional STOP-' Observation Cl DUPont. Please visit wx^� training place an oyer online. C�pygght ane the STCP-Inns app --- Unsafe Unsafe acts observed .►ria\.r��iY_ut.,y �1 Name Date S#^-�� Area _ AituLr Shi Tim@ spent arrobservation #a People Contacted Q # of People Observed ❑ kh8 s oan be obtained by conraging 19-D .on± for contact inrormation or to f i1 OvPoni. All rights reserved STOW adernarks of DuPoni. -STOP, .191, —.1— ELIMINATE UNSAFE CONDITIONS... PREVENT INJURIES w\ ` A7 Conditions 1Jnsafe Safe .. Safe acts observed Are They _w Right for the Job -- In Safe Condition Are They -.. Clean - Orderly - Right for the Job - In Safe Condition Is It -.- Clean Orderly - In Safe Condition Standards Y Available - Adequate hli➢;7ww^x.iraFajng.dorozcomf wdeolstop-cnecil�s' Additional STOP' observation C DuPont. Please visit v.ir ttgjpirl; place an order on-line. Copyright and the STOP -logo are register.: Unsafe acts observed CIO _ Name q -2e_ 1< - Date _�at) site _ Area Time spent on observation #' of People Contacted ❑ # of People Observed �❑ oan be obtained byy wnlading or contset in(ormaeon or to DuPont. Alt rights reserved. STOP - larks of DuPont. EXHIBIT 4 Page 26 of 33 ik - INTEGRATED WELL SERVICE, INC Near Miss Report Name: Date: Location of Incident: iJ,� p _ Rig # A3_g i�,t Date of Incident: %13-/_5"` Time: am/pm Describe in Full what you were doing before, during and after the incident: �' rr •Sig Te", ---s j'�144'k " . •{.. �-'�ws.. � •, �:l�.l,'e-��' ,., ... 1.0 iv: �Sa—�.. ---.,. ,.1�5 A,A&-Ake, _—_ j ,rf—y �Ka.E-3" �•a `n��.�.1 �^urb'.., it b ter^ .�. - E.n•.1\ l� "y'� 1' !? �. �'t Describe in detail what actions or steps will be taken to prevent incident from reoccurring: Name: Name: Name of Supervisor: Jo EXHIBIT 4 Page 27 of 33 INTEGRATED v WELL SERVICES Near Miss Report Name,• -Date: Location"Incident: 7-eFLRig # . V7 "7 "-I- Date .2Date of Incident: `?-2a- 157 Time: /Q- % am/� Describe in Full what you were ��doing [rbefore, during and after the incident: (/l/'4 ,, Describe in detail what actions or steps will be taken to prevent incident from Name: Name: Name of Supervisor: EXHIBIT 4 Page 28 of 33 INTEGRATED WELL SERVICE, INC Near Miss Report Name Date: a -aa - k5- Location SLocation of Incident: Rig # A S R - I Date of Incident:- �,�, - j S Time: " t L4 S -P M am/pm Describe in Full what you were doing before, during and after the incident: Describe in detail what actions or steps will be taken to prevent incident from reoccurring: ell C4 Lit P101 I � 10 �l ,n Name: Name: Name of Supervisor: EXHIBIT 4 Page 29 of 33 INTEGRATED WELL SERVICE, INC Near Miss Report Name: Date- fr- - 26- J -"— Location of Incident: X -Aa Rig # 5 , Date of Incident: W S-- e"- Time: am/pm Describe in Full what you were doing before, during and after the incident: !✓1� } ) e- jP1 e* J --i b.. p Z Y* P�'�► a- 4-r4)Op JH ;V, , ,G fe'�.. 0.-5 /.),rh r -r ro✓ , t�il9-r" �� c�.. JR z �d! J� 1^ s yt r r ^ro.l - Yc -tffr5"-O-'t- �;,v�}} ^�► h-) 5k—,le 4'e' f O .4o—r-, -s )1,1C' Describe in detail what actions or steps will be taken to prevent incident from reoccurring: L�'s'++' <O I!. w, r r jC s �1- 1 Pri U t .�-- b --s r ✓, � /r f,.. C� !r' � %'7 0 ,'i- t.... �+e Name: Name: Name of Supervisor: EXHIBIT 4 Page 30 of 33 INTEGRATED WELL SERVICE, INC Near Miss Report Name- Date: '8- 1(0- t5 Location of Incident:- 1 t,r, Rig # {SSR - l Date of incident: \ t 1 S Time: 5 am/pm Describe in Full what you were doing before, during and after the incident: the .nc� A At�r.l�. Describe in detail what actions or steps will be taken to prevent incident from reoccurring: Name: Name: Name of Supervisor: EXHIBIT 4 Page 31 of 33 INTEGRATED WELL SERVICE, INC Near Miss Report Name: Pate: e- - 10` I Location of Incident: 7- z a'( Rig # 5 Date of Incident: 9-- la - / � Time: am/pm Describr in Full what you were loin.&before, during and after the incident: ,�._A 1 s y 1 rIf ' - ►� �- ��l F P pr C WM S Pof C Q r r �.- r / /11 �n 4- • ��- ')'^ s '1-10' Pe --441 n el( a uI -t T !', p�- / 4- ^ of I'm Am g V&A eC' "M 0'., / F. 1001 C" -C11, Describe in detail what actions or steps will be taken to prevent incident from reoccurring: r4R1Gf Src K11 ere— rr+r.., ry o��r a•.arC a rd—la /�-c c� . •-k • Name: Name: Name of Supervisor: EXHIBIT 4 Page 32 of 33 INTEGRATED WELL SERVICE, INC Near Miss Report Name: -Date:. t~�5 Location of incident: U ASke Rig # Date of Incident: Time: 1750 am/ 16 Describe in Full what you were doing before, during and after the incident: Describe in detail what actions or steps will be taken to prevent incident from reoccurring: r �G O' Name: Name: Name of Supervisor: EXHIBIT 4 Page 33 of 33 EHE S1,A]ZE GOVERNOR ti#?,f, WALKER Chris Kanyer Operations Engineer Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Milne Point Field, Schrader Bluff Oil Pool, MPU SB -15 Sundry Number: 315-158 Dear Mr. Kanyer: 4�...�1:+. 0, i Y az:? 4,11 G P S VVc st c P A c ,c 4 ;a e Alosk- 9 :35/2 wwwexr�t;c:.alask�r.«ew Enclosed is the approved application for sundry approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration. A request for reconsideration is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. Sincerely, Cathy P. F errster Chair DATED this day of March, 2015 Encl. EXHIBIT 5 Page 1 of 13 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION APPLICATION FOR SUNDRY APPROVALS 20 AAC 25-280 M -5'1 2 0 G U1�) k 1. Type of Request: Abandon ❑ Plug for Redrill ❑ Perforate New Pool ❑ Repair Well Q Change Approved Program [] Suspend ❑ Plug Perforations ❑ Perforate ❑ Pull Tubing [,]/ Time Extension Operations Shutdown ❑ Re-enter Susp. Well ❑ Stimulate ❑ Alter Casing ❑ Other ESP Changeout Q 2. Operator Name: 4. Current Well Class: 5. Permit to Drill Number Hilcorp Alaska, LLC Exploratory ❑ Development ❑ Stratigraphic ❑ Service ❑ 202-152 3. Address: 6. API Number. 3800 Centerpoint Drive, Suite 1400, Anchorage AK, 99503 50-029-23106-00-00 7. if perforating: 8. Well Name and Number: What Regulation or Conservation Order governs well spacing in this pool? G.Q. 477 Will planned perforations require a spacing exception? Yes ❑ No MILNE PT UNIT SB 1-15 9. Property Designation (Lease Number): 10. FieldlPool(s): ADL0025906 I MILNE POINT FIELD f SCHRADER BLUFF OIL POOL 11. PRESENT WELL CONDITION SUMMARY Total Depth MD (ft): Total Depth TVD (ft): Effective Depth MD (ft): Effective Depth TVD (ft): Plugs (measured): Junk (measured): 9,050 4,106 9,050 4,106 NIA N/A Casing Length Size MD TVD Burst Collapse Conductor 112' 20" 112' 112' 1,490psi 470psi Surface 3,085' 9-5/8" 3,085' 2,761' 5,730psi 3,090psi Production 4,849' 7" 4,849' 3,968' 7,240psi 5,410psi Slotted Liner'OA' 4,053' 4-112" 8,922' 4,042' Slotted Liner'OB' 3,841' 4-1/2" 9,041' 4,106' Perforation Depth MD (ft): Perforation Depth TVD (ft): Tubing Size: Tubing Grade: Tubing MD (ft): See Attached Schematic See Attached Schematic 2-7/8" 6,5# / L-801 EUE 8rd 4,312 Packers and SSSV Type: Packers and SSSV MD (ft) and TVD (ft): ZXP Liner Top Packer and N/A 5,102'(MD)/ 4,026'(TVD) and NIA 12. Attachments: Description Summary of Proposal 13. Well Class after proposed work: Detailed Operations Program U BOP Sketch ❑✓ Exploratory ❑ Stratigraphic ❑ Development ❑ Service ❑ 14. Estimated Date for 15. Well Status after proposed work: Commencing Operations: 3/2 512 01 5 Oil ❑✓ Gas ❑ WINJ ❑ GINJ J WDSPL ❑ Suspended ❑ WAG ❑ Abandoned ❑ 16. Verbal Approval: Date: Commission Representative: NIA GSTOR ❑ SPLUG ❑ 17. 1 hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Chris Kanyer Email ckanyer h11c9rg.Com Printed Name Chris Kanyer Title Operations Engineer Signature t Phone 777-8377 Date 3/20/2015 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number: 3f� 15`x' Plug Integrity ❑ BOP Test Mechanical Integrity Test ❑ Location Clearance (j Other / ! (r Spacing Exception Required? Yes ❑ No Subsequent Form Required: Cj APPROVED BY COMMISSIONER THE Date: 3 -2-S — I S Approved by: COMMISSION Submit Form and Farm 10-403 Revised 1012012) A p ica id o months from the date of approval. Attachments In Duplicate EXHIBIT 5 Page 2 of 13 Well Prognosis Well: MPI -15 Date: 3/20/2015 Well Name: MPI -15 API Number: 50-029-23106-00-00 Current Status: SI Producer Pad: 1 Pad Estimated Start Date: March 25, 2015 wRig: Nordic 3 Reg. Approval Req'd? March 24, 2015 Date Reg. Approval Rec'vd: Regulatory Contact: Tom Fouts Permit to Drill Number: 202-152 Call Engineer: Chris Kanyer (907) 777-8377 (0) (907) 250-0374 (M) _First Second Call Engineer: Bo York (907) 777-8345 (0) (907) 727-9247 (M) AFE Number: Current Bottom Hole Pressure: — 1,249 psi @ 4,000' TVD Maximum Expected BHP: — 1,249 psi @ 4,000' TVD Max. Allowable Surface Pressure: 0 psi Brief Well Summary: (Last BHP measured 3/6/2015) (No new perfs being added) (Based on actual reservoir conditions and water cut of 40% (0.374psi/ft) with an added safety factor of 1000' TVD of oil cap) The Milne Point 1-15 well was drilled as a Schrader Bluff development multi -lateral well that TD'd ran 4-1/2" slotted liners in OB at a depth of 9,050' and in OA at 9,000' in September 2002. The well was initially completed with an ESP. This and subsequent ESPs failed and were replaced in 2008 and 2014. The recent pump failed in February 2015. There is no recent casing pressure test performed and one will be completed during this workover. Due to observed scale issues, a downhole chemical injection line will be run as part of the new completion. No subsidence issues are expected in this well. Notes Regarding Wellbore Condition Current well status is shut in oil producer. No subsidence issue suspected. RWO Obiective: Pull ESP & run 2-7/8" ESP completion with downhole chemical injection. Brief Procedure: 1. MIRU Nordic #3 Rig. 2. Attempt to circulate well with 8.5ppg seawater and monitor well. 3. ND tree, NU 11" BOPE and test to 250psi low/3,OOOpsi high, annular to 250psi low/2,500psi high. a. Notify AOGCC 24hrs in advance to witness test. 4. Contingency: (If the tubing hanger won't pressure test due to either a penetrator leak or the BPV profile is eroded and/or corroded and BPV cannot be set with tree on.) a. Notify Operations Engineer (Hilcorp), Mr. Guy Schwartz (AOGCC) and Mc Jim Regg (AOGCC) via email explaining the wellhead situation prior to performing the rolling test. AOGCC may elect to send an inspector to witness. b. With stack out of the test path, test choke manifold per standard procedure EXHIBIT 5 Page 3 of 13 Well Prognosis Well: MPI -15 iia. wp ANA,.. LL Date:3/20/2015 c. Conduct a rolling test: Test the rams and annular with the pump continuing to pump, (monitor the surface equipment for leaks to ensure that the fluid is going down -hole and not leaking anywhere at surface.) d. Hold a constant pressure on the equipment and monitor the fluid/pump rate into the well. Record the pumping rate and pressure. e. Once the BOP ram and annular tests are completed, test the remainder of the system following the normal test procedure (floor valves, gas detection, etc.) f. Record and report this test with notes in the remarks column that the tubing hanger/BPV profile / penetrator wouldn't hold pressure and rolling test was performed on BOP Equipment and list items, pressures and rates. g. Pull hanger to surface. (Requires tubing cuts as necessary to free tubing). CBU to displace annulus and tubing with kill weight fluid. h. If a rolling test was conducted, remove the old hanger, MU new hanger or test plug to the completion tubing. Re -land hanger (or test plug) in tubing head. Test BOPE per standard procedure. 5. Unseat hanger and pull 2-7/8" ESP completion from 4,312' to surface and lay down same. 6. RIH with tapered cleanout BHA, wash bridges/fill if necessary in OB lateral to +/-9,000'. Contingency: (if unable to gain circulation or solids to surface) a. Circulate well with nitrified fluid, with surfactant and gel sweeps to clear lateral of solids. 7. POOH with tapered cleanout BHA. 8. RIH and set test packer at +/-4,700' (Note: above dual laterals, to test of 7" casing only). 9. Perform a charted casing pressure test to 1,500psi for 30min. Bleed off pressure and POOH with same. 10. MU and RIH with ESP with gas separator and 3/8" chemical injection line on 2-7/8" 8RD EUE L-80 tubing [to be replaced if necessary]. Set ESP at +/-4,200'. Land tubing hanger. 11. ND BOP, NU and tree. 12. RDMO workover rig and equipment. 13. Turn well over to production. Attachments: 1. As -built Schematic 2. Proposed Schematic 3. BOP Schematic EXHIBIT 5 Page 4 of 13 lij RKB Elev = 25.7 Milne Point Unit Well: MPI -15 SCHEMATIC Last Completed: 5/7/2014 PTD: 202-152 CASING DETAIL Size Type Wt/ Grade/ Cann ID Top Btm 20" Conductor 92 / H -4U /Welded 19.124 Surface 112' 9-5/8" Surface 40 / L-80/ Btc, 8.835 Surface 3,085' 7" Production 26/L-80/BTC-Mod 6.276 Surface 4,849' 4-1/2" 4-1/2" Sitd Liner OA SltLi Liner OB 12.6 / L-80 / IBT3.958_ 12.6 / L-80 / IBT _ _ 3.958 ..__ 4,_869' _5_,_2_W'____9,041' 8,922' TD = 9,050' (MD) / TD = 4,106'(ND) PBTD=9,054 (MD)/ PBTD=4,106'(1VD) TUBING DETAIL 3" 1 Tubing I 6.S# / L-80 /EUE 8rd 2..441 Surface 4,312' JEWELRY DETAIL Depth Item 139' GLM - Carrico 2-7/8' x 1" Side Ocket KBMM 4,074' GLM - Carrico 2-7/8'x 1" Sidepocket KBMM 4,226' HES 2-7/8" XN Nipple, 2.250 10 4,269' Pump PMSXD / 98P8 Armor X 4,281' Tandem Gas Separator — GSTHVER M FER 4,286' Tandem Seal Section- GSB3DBUT SB/SB PFSA & GS83DOLT SB/SB PFSA 4,300' Motor — 84hp, 2,210 Volt, 23 Amp, Model MSP1 / 84 4,308' Pumpmate w/ 6 fin Centralizer — Bottom Cb 4,312' 4,840' Baker Hook Wali Hanger inside 7" Window (21') 4,861' Baker Hook Wall Hanger outside Window (3') 4,864' Baker Down Swivel -up Lock sub 5,095' Baker Tie Back Sleeve 5,102' Baker ZXP Liner Top Packer 5,108' Baker 7" x5" HMC Liner Hanger 5,120' 7" Halliburton Float Collar 5,203' 7" Halliburton Float Shoe LATERAL WINDOW DETAIL Top of "OA" Window @ 4,849'- 4,861'; Well Angle @ Window is 72deg WELL INCLINATION DETAIL KOP @ a7a Max Hole Angle = 47 deg @ 4,120' MD 60deg, + Past 4,500' MD, Hole Angle through Perf s= 86 deg + OPEN HOLE / CEMENT DETAIL 20" Cmt w/ 260 sx of Arcticset (Approx.) I in 42" Hole 9-5/8" Cmt w/919 sx Clas "1",225 sx Class "G" in 12-1/4" Hole 7" Cmt w/ 84 sx AS Lite, 189 sx Class "G" in 8-1/2" Hole WELLHEAD Tree 2.9/16"—SMFMC Wellhead 11" 5M Gen w/ 2-7/8" EUE T&B Tubing Hanger with CIW "H" BPV Profile GENERAL WELL INFO API: 50-029-23106-00-00 rilled ad Ca Dnsed Multi-Lat by Doyon 141 - 9/1/2002 ESP RWO by Nabors 4ES —8/21/2008 ESP Changeout by Doyon 16 — 5/7/2014 Created By: TDF 3/10/2015 EXHIBIT 5 Page 5 of 13 Hilrorp Alaska, LI..0 RKB Elev = 25.7 Milne Point Unit Well: MPI -15 PROPOSED Last Completed: 5/7/2014 PTD: 202-152 CASING DETAIL Size Type Wt/ Grade/ Conn ID Top Btm 20" Conductor 92 / H-40 / Welded 19.124 Surface 112' 9-5/8'" W Surface 40 / L-80 / Btc. 8.835 Surface 3,085' 7" Production 26 / L-80 / BTC -Mod 6.276 Surface 4,849' 4-1/2" Sltd Liner OA_ 12.61 L-80 / IST 3.958 4,869 8,922' 4-1/2"W Sltd Liner OB _ 12.6 / L-80 / IBT 3.958 5,200' 9,041' TI) =9,050 (fVD) / TD = 4,106'(TVD) PBTD=9,05(Y (MD) / PBTD= 4,106 MM) TUBING DETAIL Lj ubing I 6.5# / L-80 / E UE 8rd 2_441 Surface' 4 200' JEWELRY DETAIL Depth Item +139' GLM ±3,974` GLM +4,146' XN Nipple 4,158' Pump ±4,165' Gas Separator ±4,166' Tandem Seal Section ±4,180' Motor 14,194" Pumpmate w/ 6 fin Centralizer- Bottom (ii) x4,200' 4,840' Baker Wall Hanger inside 7" Window (21') 4,861' -Hook Baker Hook Wall Hanger outside Window (3') 4,864' Baker Down Swivel -up Lock sub 5,095' Baker Tie Back Sleeve 5,102' Baker 2XP Liner Top Packer 5,108' Baker 7" x S" HMC Liner Hanger_ 5,120 _ 7" Halliburton Float Collar -� i, -2037—j_-7" Halliburton Float Shoe LATERAL WINDOW DETAIL_ Top of "OA" Window @ 4,849' - 4,861'; Well Angle @ Window is 72deg WELL INCLINATION DETAIL_ KOP @ 470' Max Hole Angle = 47 deg @ 4,120' MD 60deg, + Past 4,500' MD. Hole Angle through Perf s= 86 deg + OPEN HOLE/ CEMENT DETAIL 20" Cmt w/ 260 sx of Arcticset (Approx.) I in 42" Hole 9-5/8" _Cmt w/ 919 sx Clas "L",225 sx Class "G" in 12-1/4;H—ole- 84 2-1/4"Hole84 sx AS Lite, 189 sx Class "G" in 8-1/2" Hole _._.._� WELLHEAD Tree I 2-9/16"-SMFMC 11" SM Gen w/ 2-7/8" EUE T&B Tubing Hanger with Wellhead CIW "H" BPV Profile GENERAL WELL INFO API: 50-029-23106-00-00 -Drilled and Cased Multi-Lat by Doyon 141 - 9/1/2002 ESP RWO by Nabors 4E5 - 8/21/2008 ESP Changeout by Doyon 16-5/7/2014 Created By: TDF 3/10/2015 EXHIBIT 5 Page 6 of 13 11" BOP Stack es EXHIBIT 5 Page 7 of 13 EXHIBIT 5 Page 8 of 13 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION REPORT OF SUNDRY WELL OPERATIONS 1. Operations Abandon LJ Repair Well Plug Perforations Perforate 0 Other E ESP Change -out Performed: Alter Casing ❑ Pull Tubing L-11 Stimulate - Frac ❑ Waiver Li Time Extension ❑ Change Approved Program ❑ Operat. Shutdown ❑ Stimulate - Other ❑ Re-enter Suspended Well ❑ 2. Operator Name: Hilcorp Alaska, LLC 4. Well Class Before Work: ❑ Development 7 P Stratigraphic ❑ Exploratory P ry 17 Service ❑ 5. Permit to Drill Number: 202-152 3. Address: 3800 Centerpoint Drive, Suite 1400 6. API Number: Anchorage, Alaska 99503 50-029-23106-00-00 7. Property Designation (Lease Number): 8. Well Name and Number: ADL0025906 MILNE PT UNIT SB 1-15L1 9. Logs (List logs and submit electronic and printed data per 20AAC25.071): 10. Field/Pool(s): N/A MILNE POINT FIELD/ SCHRADER BLUFF OIL POOL 11. Present Well Condition Summary: Total Depth measured 9,050 feet Plugs measured N/A feet true vertical 4,106 feet Junk measured N/A feet Effective Depth measured 9,050 feet Packer measured 5,102 feet true vertical 4,106 feet true vertical 4,026 feet Casing Length Size MD TVD Burst Collapse Conductor 112' 20" 112' 112' 1,490psi 470psi Surface 3,085' 9-5/8" 3,085' 2,761' 5,730psi 3,090psi Production 4,849' 7" 4,849' 3,968' 7,240psi 5,410psi Slotted Liner'OA' 4,053' 4-1/2" 8,922' 4,042' N/A N/A Slotted Liner'OB' 3,841' 4-1/2" 9,041' 4,106' N/A N/A Perforation depth Measured depth See Attached Schematic True Vertical depth See Attached Schematic Tubing (size, grade, measured and true vertical depth) 2-718" 6.5# / L-801 EUE 8rd 4,198'MD 3,651'TVD 5,102'MD Packers and SSSV (type, measured and true vertical depth) ZXP Liner Top N/A 4,026'TVD N/A 12. Stimulation or cement squeeze summary: N/A Intervals treated (measured): N/A Treatment descriptions including volumes used and final pressure: N/A 13, Representative Daily Average Production or Injection Data Oil -Bbl Gas-Mcf Water -Bbl Casing Pressure Tubing Pressure Prior to well operation: 0 0 0 0 0 Subsequent to operation: 150 5 161 240 203 14. Attachments: 15. Well Class after work: Copies of Logs and Surveys Run N/A F_xploratorf ❑ Development 11!.1 Service ❑ Stratigraphic ❑ Daily Report of Well Operations X 16. Well Status after work: Oil P1 Gas ❑ WDSPL ❑ GSTOR ❑ WINJ ❑ WAG ❑ GINJ ❑ SUSP ❑ SPLUG ❑ 17. 1 hereby certify that the foregoing is true and correct to the best of my knowledge. Sundry Number or NIA if C.O. Exempt: 315-158 Contact Chris Kanyer Email ckanverphilcorn.com Printed Name Chris Kanyer Title Operations Engineer Signaturet � .. ', , -6r C_ fir, Phone 907-777-8377 Date 5/512015 Form 10-404 Revised 1012012 Submit Original Only EXHIBIT 5 Page 9 of 13 llileorp Alaska. IA,C RKB Elev= 25.7 SCHEMATIC Milne Point Unit Well: MPI -15 Last Completed: 5/7/2014 PTD: 202-152 CASING DETAIL Size Type Wt/ Grade/ Conn ID Top Btm 20" Conductor 92 / H-40 / Welded 19.124 Surface 112' 9-5/8" Surface 40 / L-80 / Btc. 8.835 Surface 3,085' 7" Production 26 / L-80 / BTC -Mod _ 6.276 Surface 4,849' 4.1/2" 51td Liner OA 12.6 / L-80 / IST 3.958 4,869' 8,922' 4-1/2" SItd Liner OB 12.6 / L-80 / IBT 1 3.958 5,200' 9,041' TD= 9,050' (ND) / TD=4,10fi(TVD) PBTD= 9,05(Y (ND) / PBTD= 4,1000 VD) TUBING DETAIL 8" Tubing 6.5k / L-80 / EUE 8rd 1 2..441 1 Surface 4,198' JEWELRY DETAIL Depth Item 141 GLM 3,966' GLM 4,140' XN Nip le 4,151' Discharge Head 4,151' Upper Tandem Pump 4,160' LowerTan_demPump 4,167' Gas Se tor ara 4,172' Upper -Tandem Seal Section 4,179' _ Low_erer-Tand.em Seal Section 4,185' Motor �_. 4,194' Pumpmate w/ 6 fin Centralizer - Bottom "; 4,198' 4,840' Baker Hook Wall Hanger inside 7" Window (21') 4,861' Baker Hook Wall Hanger outside Window (3') 4,864' Baker Down Swivel -up Lock sub 5,095' Baker Tie Back Sleeve 5,102' Baker 2AP Liner Top Packer 5,108' Baker 7" x 5" HMC Liner Hanger 5,12D' 7" Halliburton Float Collar 5,203' 7" Halliburton Float Shoe LATERAL WINDOW DETAIL Top of "OA" Window @ 4,949'- 4,861'; Well Angle @ Window is 72deg WELL INCLINATION DETAIL KOP @ 470' Max Hole Angle = 47 deg @ 4,120' MD 60de& + Past 4,500' MD. Hole Angle through Perf s= 86 deg+ OPEN HOLE / CEMENT DETAIL 20" Cmt w/ 260 sx of Arcticset (Approx.) I in 42" Hole 9-5/8" Cmt w/ 919 sx Clas "L",225 sx Class "G" in 12-1/4" Hole 7" 1 Cmt w/ 84 sx AS Lite, 189 sx Class "G" in 8-1/2" Hole WELLHEAD Tree 2-9/16" -SM FMC Welihead 11" SM Gen w/2-7/8' EUE T&B Tubing Hanger with CIW "H" BPV Profile. GENERAL WELL INFO API: 50.029-2_3106-00-00 Drilled and Cased Multi-Lat by Doyon 141 - 9/1/2002 ESP RWO by Nabors 4E5 -8/21/2008 ESP Change -out by Doyon 16-5/7/2014 ESP Change -out by Nordic 3 -3/29/2015 Created By: TDF 5/4/2015 EXHIBIT 5 Page 10 of 13 Hilcorp Alaska, LLC Weekly Operations Summary Well Name JAPI Number Well Permit Number IStart Date End Date MPI-15 50-029-23106-00-00 202-152 3/24/2015 3/29/2015 Dairy Operations; 3/18/15 - Wednesday No operations to report. 3/19/15 - Thursday No operations to report. 3/20/15 - friday No operations to report. 3/21/15 - Saturday No operations to report. 3/22/15 - Sunday No operations to report. 3/23/15 - Monday No operations to report. 3/24/15 - Tuesday BOP test waived by AOGCC/Grimaldi. BOP swap from 13-5/8" to 11". Begin rig move, rig off location SOPM, move to 1-15. MIRU accept rig. Berm cellar, spot tanks, run hardline, pull BPV. PT all lines 250psi low/2,500psi high. SITP 270 psi, SiCP 570 psi. Blow down well, line up to kill well and pump 37 bbis 140° 8.5ppg seawater down tubing, no returns. Swap over down csg after 23 bbis quick pressure increase and break over. Intermittent gas/oil returns on tbg. Continue and pump to liner top volume+total pumped 244 bbl swap over and pump tubing volume 24 bbls.119 bbis recovered oil water mix. Monitor well is on vacuum both sides install BPV. Blow down Break all Iines.ND Tree, prepare to NU BOPE. EXHIBIT 5 Page 11 of 13 EXHIBIT 5 Page 12 of 13 Hileorp Alaska, LLC Weekly Operations Summary Well Name API Number Well Permit Number Start Date I End Date MPI -15 50-029-23106-00-00 __d202-152 3/24/2Q1.5 3/29/2Q15 Daily Operations: 3/25/15 - Wednesday PJSM. ND tree, inspect hanger and graphite grease surfaces, grooves and recesses. NU BOPS, install TWC. Fill stack, purge lines, shell test BOPE, fix leaks from new NU. BOPE test 250psi low/3,000psi high. Annular 250psi low/2,500psi high. All surface valves 250psi low/3,000psi high perform accumulator draw down test, all OK. Drain stack, remove and seal Bell nipple. Re -install and hydro test. Pull TWC, well still on vacuum. MU LND jt, PU 79 K, hanger free. Pull to floor check ESP cable, good. Remove penetrators LD hanger string ESP cable. POOH with completion. LD bad joints identified from caliper log. Continue to POOH. 3/26/15 - Thursday POOH to ESP and examine same. No scale, some pitting on motor body from laying on low side of hole. Assembly is sand packed and froze up. BOLD ESP assy. PU 7" RTTS 7'26# csg packer. RIH to 4,774' set packer. Fill hole w/ 28 bbls 8.5# SW, test and chart. Test to 1,500psi < 30psi bleed off in 30 minute, good test. POOH BOLD packer. Packer in excellent condition. Clean up floor strap and drift. NU adapter spool 11" 5M x 7-1/16" 5M on top of annular. Install BIW stripping head. PU 2-3/8" pup to set tong torque and function pressure test annular. Strap and caliper x -overs for 2- 7/8" production string. J5A on planned procedure to reach TOL and clean out same. PU run in hole with 2-3/8" PH -6 muleshoe and stinger assembly and stands from derrick of 2-7/8" L-80 production. Continue RIH very light < 2K down through upper window @ 4,840'-5,095' PU 64K down 59k. PU single and RIH lower lateral @ 5,102' did not see liner top light tag and rolling minor junk @ 5,113'. Continue in hole to 5,135'. Secure well for BOP stack centering for stripping head clearance. 3/27/15 - Friday Re -align stack @ 5,135'. RIH to 5,'140'^' tag hard. Set down 6K PU. Install 2-7/8" Stripping rubber and hook up to top drive. Wash to 5,135' through bridge, partial returns then total losses after bridge was removed. Wash down to 5,264'. Drag to 70K down 58K erratic. Wash down to 5,670' call engineer discuss N2 job. Pull 2 jts install dart valve reinstall 2 jts. RU N2 Equipment. Hold PJSM. Secure rig floor. P/T all lines to 2,000psi. SD N2, rig up to pump 35 bbl solvent flush and displace out EOT with 25 bb18.5# SW, ICP 1,050psi, FCP 500psi. 150 bbl recovered mostly oil no real visible solids. Allow pill to soak. Hold PJSM identify IA as open and recorded by rig crew. Pump 1,010 gals (106,000 SCF) average rate 1,500 SUM @ 1,500psi. Pressure build to 1,700psi last 10-15 mintes after 100,000 away. Expect lifting fluid column pump additonal 6,000 SCF pressure not dropping. SD N2 pumping. Open annulus and bleed to kill tank. Circ. down tbg 72 bbls, ICP 1,450psi, FCP 60psi. Continue to bleed off annulus slugging fluid recover 98 bbls. Pump 43bbls down tubing, ICP 560psi, FCP 160psi. Annulus 0 psi. Observe well annulus flowing. Pump 200 bbl 8.5# SW down annulus. ICP 180psi, FCP 60psi. Pull/ LD 2 jts tubing through stripper to dart and 80. Pump 20 bbl down tubing. Install tubing bleeder verify no pressure under dart, remove same and Install TIW. Annulus building to 40psi. Pump additional 100 bbl 8.5# SW down annulus. Full hole volume of 310 bbls has now been exceeded by160 bbls. SD observe well annulus and tbg pressure rising. Formation is still N2 charged. Sl well to stabilize and observe pressure SICP 170 psi SITP 30 psi. 3/28/15 - Saturday PJSM SITP 0-19psi SICP 170 and dropping. Open up tubing light blow then vacuum. Bled casing to 0 psi. Leave open. Monitor pressures while waiting for fluid, awaiting hot SW 8.5# to trip. Offload and pump 21 bbls down tbg and 164 bbls down down csg. Intermittent returns after 112 bbls. POOH slowly standing back 7 stands in derrick and LD 153 jts. ND stripping head and spool. NU riser LD excess pipe in derrick. Well appears stable. PU MU ESP assembly. EXHIBIT 5 Page 12 of 13 3/29/15 - Sunday PJSM. Resume building and servicing ESP asst'. Install connector. Check Cable. RIH 2,100' with ESP and 2-7/8" 6.5# L-80 tubing. Check cable, OK. RIH with ESP 2,100' -4,198'. PU hanger, install penetrator, make connector splice. Meg check same, OK. RIH land hanger, RI lockdown screws, test cable. Remove landing joint install BPV, ND BOP, NU tree. P/T tree 250psi low/ S,OOOpsi. Centralizer 4,198', motor 4,186', Tandem seals 4,171', gas sep 4167', pumps 4,152', discharge head 4,151', PJ, XN nipple 4,139', 5 jts tbg, PJ, GLM 3,966', PJ, 121 jts tbg, PJ, GLM 141', 4 jts tbg, pup/hanger. Dress and clean tree and cellar back over well. Rig released @ 1800. 3/30/15 - Monday No operations to report. 3/31/15 - Tuesday No operations to report. EXHIBIT 5 Page 13 of 13 "'ALASK;\ GoVERNOR B11.1. WAT,KUR Chris Kanyer Operations Engineer Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Milne Point Field, Schrader Bluff Oil Pool, MPU SB J -09A Sundry Number: 315-162 Dear Mr. Kanyer: A l'ap�a 0,, ' and Gas Con-' 'aflon 0-mmissio f'r7:x: 9C,/ 542 V7'f/W'. ili7E�C',.. C1SC1ih(1.�j CiV Enclosed is the approved application for sundry approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration. A request for reconsideration is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. Sincerely, Cathy P. oerster Chair DATED this day of March, 2015 Encl. EXHIBIT 6 Page 1 of 15 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION APPLICATION FOR SUNDRY APPROVALS an Aar. 25 2an 1. Type of Request: Abandon ❑ Plug for Redrill ❑ Perforate New Pool ❑ Repair Well Change Approved Program ❑ Suspend ❑ Plug Perforations ❑ Perforate [ ] Pufl Tubing Q Time Extension ❑ Operations Shutdown ❑ Re-enter Susp. Well ❑ Stimulate ❑ Alter Casing ❑ Other: ESP Changeout ❑ 2. Operator Name: 4. Current Well Class:5. Permit to Drill Number. Hilcorp Alaska, LLC Exploratory ❑ Development P1199 Stratigraphic ❑ Service ❑ 114 3. Address: 6. API Number. 3800 Centerpoint Drive, Suite 1400, Anchorage AK, 99503 50-029-22495.01-00 7. If perforating: 8. Well Name and Number: What Regulation or Conservation Order govems well spacing in this pool? C.O. 477 Will planned perforations require a spacing exception? Yes ❑ No F MILNE PT UNIT SB J -09A 9. Property Designation (Lease Number): 10. Field/Pool(s): ADL0025517 I Milne Point Field / Schrader Bluff Oil 11. PRESENT WELL CONOiTION SUMMARY Total Depth MD (ft): Total Depth TVD (ft): Effective Depth MD (ft): Effective Depth TVD (ft): Plugs (measured): Junk (measured): 8.235 4,046 $,235 4,046 NIA N/A Casing Length Size MD TVD Burst Collapse Conductor 112' 13-318" 112' 112' 1,730psf 740psi Surface 2,936' 9-518" 2,936' 2,529' 5,750psi 3,090psi Production 5,334' T' 5,334' 3,828' 7,240psi 5,410psi Liner 938' 4-1/2" 6,137' 4,060' 8,430psi 7,500psi Slotted Liner 2,098' 4-112" 8,235' 4,060' NIA NIA Perforation Depth MD (ft): Perforation Depth TVD (ft): Tubing Size: Tubing Grade: Tubing MD (ft): See Attached Schematic See Attached Schematic 2-718" 6.5#1 L-801 EUE 8rd 5,083' Packers and SSSV Type: Packers and SSSV MD (ft) and TVD (ft): Baker ZXP Liner Top Packer and NIA 5,199'(MD)1 3,749'(TVD) and N/A 12. Attachments: Description Summary of Proposal 0 13. Well Class after proposed work: Detailed Operations Program ❑ BOP Sketch ❑Q Exploratory ❑ Stratigraphic ❑ Development [�� Service Lj 14. Estimated Date for 15. Well Status after proposed work: Commencing Operations: 4/112015 Oil ( Gas ❑ WDSPL ❑ Suspended ❑ WINJ [_] GINJ❑ WAG ❑ Abandoned ❑ 16. Verbal Approval: Date: Commission Representative: GSTOR ❑ SPLUG ❑ 17. 1 hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Chris Kanyer Rckanver Email hiicorcam Printed Name Chris Kanyer Title Operations Engineer Si natureZZ Phone 777-8377 Date 312312015 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number: Plug Integrity ❑ BOP Test Mechanical Integrity Test] Location Clearance [] ? r Other. Spacing Exception Required? Yes ❑ No Subsequent Form Required: r) APPROVED BY COMMISSIONER THE COMMISSION Date: ✓/` 6 V / 3' Approved by: t / Suborn Form and Form 10-403 (Revised 1012012) aL 6T 2 months from the date of approval. Attachments in Duplicate EXHIBIT 6 Page 2 of 15 Well Prognosis Well: MPJ -09A Date: 3/23/2015 Well Name: MPJ -09A API Number: 50-029-22495-01-00 Current Status: SI Producer Pad: J Pad Estimated Start Date: April 1, 2015 Rig: Nordic 3 Reg. Approval Req'd? March 31, 2015 Date Reg. Approval Rec'vd: Regulatory Contact: Tom Fouts Permit to Drill Number: 199-114 First Call Engineer: Chris Kanyer (907) 777-8377 (0) (907) 250-0374 (M) Second Call Engineer: Bo York (907) 777-8345 (0) (907) 727-9247 (M) AFE Number: 1550677 Current Bottom Hole Pressure: — 1,475 psi @ 4,000' TVD Maximum Expected BHP: -- 1,475 psi @ 4,000' TVD Max. Allowable Surface Pressure: 46 Brief Well Summary: (Last BHP measured 31312015) (No new perfs being added) (Based on actual reservoir conditions and water cut of 33% (0.366psi1ft) with an added safety factor of 1000' TVD of oil cap) �--- The Milne Point J -09A well was redrilled as a Schrader Bluff development well that TD'd at 8,235' and ran 4.5" slotted liner into open hole in December 1999. The well was initially completed with a through tubing ESPCP (Electrical Submersible Progressive Cavity Pump), but failed immediately upon install. This was replaced with an ESP in January 2000. This failed and subsequent ESPs were replaced in 2003 and 2008. The traditional ESP was replaced with a ESPCP in 2013. This recent pump failed February 9, 2015. The last 7"casing test was Performed to 2 OOOpsi on 4/2/2013,. There are minimal observed scale issues, most failures are related to solids production. No subsidence issues are expected in this well. A caliper was run on the upper 1,000' of 7" casing in April 2013. Notes Regarding Wellbore Condition Current well status is shut in oil producer. No subsidence issues suspected. RWO Obiective: Pull ESP, perform cleanout, & run 2-7/8" ESP completion. Brief Procedure: 1. MIRU Nordic #3 Rig. 2. Attempt to circulate well with 8.5ppg seawater and monitor well. 3. ND tree, NU 11" BOPE and test to 250psi low/3,0OOpsi high, annular to 250psi low/2,500psi high. a. Notify AOGCC 24hrs in advance to witness test. 4. Contingency: (If the tubing hanger won't pressure test due to either a penetrator leak or the BPV profile is eroded and/or corroded and BPV cannot be set with tree on.) a. Notify Operations Engineer (Hilcorp), Mr. Guy Schwartz (AOGCC) and Mr. Jim Regg (AOGCC) via email explaining the wellhead situation prior to performing the rolling test. AOGCC may elect to send an inspector to witness. b. With stack out of the test path, test choke manifold per standard procedure EXHIBIT 6 Page 3 of 15 LFllrurp AluAa. LLQ Well Prognosis Well: MPJ -09A Date: 3/23/2015 c. Conduct a rolling test: Test the rams and annular with the pump continuing to pump, (monitor the surface equipment for leaks to ensure that the fluid is going down -hole and not leaking anywhere at surface.) d. Hold a constant pressure on the equipment and monitor the fluid/pump rate into the well. Record the pumping rate and pressure. e. Once the BOP ram and annular tests are completed, test the remainder of the system following the normal test procedure (floor valves, gas detection, etc.) f. Record and report this test with notes in the remarks column that the tubing hanger/BPV profile / penetrator wouldn't hold pressure and rolling test was performed on BOP Equipment and list items, pressures and rates. g. Pull hanger to surface. (Requires tubing cuts as necessary to free tubing). CBU to displace annulus and tubing with kill weight fluid. h. If a rolling test was conducted, remove the old hanger, MU new hanger or test plug to the completion tubing. Re -land hanger (or test plug) in tubing head. Test BOPE per standard procedure. S. Unseat hanger and pull 2-7/8" ESPCP completion from 5,083' to surface and lay down same. 6. RIH with tapered cleanout BHA and circulate well clean to +/-8,200'. POOH with same. 7. MU and RIH with ESPCP with gas separator and +/-2,500' of heat trace on 2-7/8" 8RD EUE L-80 tubing [to be replaced if necessary]. Set ESPCP at +/-5,083'. Land tubing hanger. 8. ND BOP, NU and tree. 9. RDMO workover rig and equipment. 10. Turn well over to production. Attachments: 1. As -built Schematic 2. Proposed Schematic 3. BOP Schematic EXHIBIT 6 Page 4 of 15 W14%,ri, Ala..ka, LLC: KB Elev.: 29.6'/ GL Elev.:17.0' TD= 8,235' (MD) /TD =4,064'(TVD) PBTD= 8,235 (MD) / PBTD= 4,064'(TVD) SCHEMATIC CASING DETAIL Milne Paint Unit Well: MPU 1-09A Last Completed: 4/13/13 PTD: 199-114 Size Type Wt/ Grade/ Conn 10 Top Stm 13-3/8" Conductor 54.5/H-40/N/A 12.615 0 112' 9-5/8" Surface 40 / L-80 / Btrc. 8.835 0 2,936' 7" Intermediate 26 / L-80 / NSCC 6.276 0 5,334' 4-i/2" Liner 12.6 / L-80 / IST 3.958 5,199" 6,137' 4-i/2" Slotted Liner 6.2 / L-80 / SIT 3.958 6,137' 8,235' TUBING DETAIL 2-7/8" 1 Tubing I 6.5 / L-80 /EUE 8rd 1 2.441 0 5,083' JEWELRY DETAIL No Depth Item 1 133' 2-7/8" x 1" Side Pocket KBMM w/ DPSOV 2 4,846' 2-7/8" x 1" Side Pocket KBMM Shear Valve set @ 2,000psi 3 4,985' 2-7/8" XN Nipple (2.25" ID) 4 5,027' WellUft Discharge Gauge Unit 5 5,030' ZCentrilift ESP: PCP 200D 2600 Pump 3.75'/ 22.42' 6 5,053' Flex Shaft Assembly EUE 8rd Box 7 1 5,062' Single Seal Section 8 5,068' Gear Reduction Unit GRU 538811.57:1 9 5,070' Motor MSPS/ 54 HP, 890 Volt, 39 Amp 10 5,079' WellUft MGU w 6 fin Centralizer— Bottom @ 5,083' 11 5,199' Baker ZXP Liner Top Packer w/ 6' Tie Back 5.25" ID) 12 5,215' Baker 5" x 7" HMC Liner Hanger (4.375" ID) 13 6,013' Baker HMCV Cement Valve 14 6,032' Baker CTC 20' PZP ECP 15 8,190' 4.5" Baker Drillable Pack -Off Bushing 16 8,235' 4.5" Baker Drillable Guide Shoe WELL INCLINATION DETAIL KOP @ 600' Max Hole Angle = 59 deg. @3,300-3,50a MaxHole Angle = Horizontal OPEN HOLE / CEMENT DETAIL 13-3/8"" Cmt w/ 250 sx of Arcticset I in 24" Hole 9-5/8" Cmt w/ 572sx PF "E", 250 sx Class "G" in 12-1/4" Hole 7" Cmt wl 400 sx Class "G" in 8-1/2" Hole 4-1/2" Cmt w/ 97 sks Class "G" in 6-1/8" Hole TREE & WELLHEAD Tree Cameron 2-9/16" SM WKM 11"x 11" SM, WKM w/ 11" x 2-7/8" tubing hanger/ NSCT Wellhead threads top and bottom and 3" CIW H PBV Profile GENERAL WELL INFO API: 50-029-22495-01-00 Drilled and Cased by Nabors 22E - 1/14/1995 Completion by Nabors 4ES — 2/15/1995 Schrader Bluff Recompletion by Nabors 4ES — 4/19/1997 Schrader Bluff Sand Test #2 — 8/15/1997 Sidetracked By Nordic 3 —12/15/1999 RWO by Nabors 4ES —1/24/2000 RWO by Nabors 4ES —12/11/2003 ESP RWO by Nabors 3S — 6/16/2008 RWO PCP Pump by Doyon 16-4/13/2013 Revised By: TDF 3/23/2014 EXHIBIT 6 Page 5 of 15 Hileorp Al—k., LLC KB Elev.: 29.6/ GL Elev.:17.0' TD = 8,235' (MD) / TD = 4,064'(TVD) PBTD = 8,235' (M}) / PBTD = 4,064'(TW) CASING DETAIL Milne Point Unit Well MPU 1-09A Last Completed: 4/13/13 PTD: 199-114 Size Type Wt/ Grade/ Conn ID Top Btm 13-3/8" Conductor 54.5 / H-40 / N/A 12.615 0 112' 9-5/8" Surface 40 / L-80 / Btre. 8.835 0 2,936' 7" Intermediate 26/L-80/NSCC 6.276 0 5,334' 4-1/2" Liner 12.6/ L-80 / IBT 3.958 5,199" 6,137' 4-1/2" Slotted Liner 6.2 / L-80 / SLT 3.958 6,137' 8,235' TUBING DETAIL 27/8" Tubing 6.5 / L80 /EUE 8rd 1 2.441 1 0 1 ±5,083' JEWELRY DETAIL No Depth Item 1 3133' 2-1/8" x 1" Side Pocket KBMM w/ DPSOV 2 ±4,846' 2-7/8" x i" Side Pocket KBMM Shear Valve set @ 2,000psi 3 ±4,985' 2-7/8" XN Nipple (2.25" ID) 4 35,027' WeRLift Discharge Gauge Unit 5 15,030' ZCentrilift ESP: PCP 200D 2600 Pump 3.75"/ 22.42' 6 t5,053' Flex Shaft Assembly EUE 8rd Box 7 ±5,062' Single Seal Section 8 ±5,068' Gear Reduction Unit GRU 5388 11.57:1 9 t5,070' Motor MSPiJ 54 HP, 890 Volt, 39 Amp 10 ±5,079' WellLift MGU w 6 fin Centralizer-yBottom @ tS,083' 11 5,199' Baker ZXP Uner Top Packer w/ 6' Tie Back (5,25" ID) 12 5,215' Baker 5" x 7" HMC Liner Hanger (4.375" ID) 13 6,013' Baker HMCV Cement Valve 14 6,032' Baker CTC 20' PZP ECP 15 8,190 4.5" Baker Drillable Pack -Off Bushing 16 8,235" 45" Baker Drillable Guide Shoe WELL INCLINATION DETAIL KOP @ 6W Max Hole Angle = 59 deg. @ 3,300 - 3,500' MaxHole Angle = Horizontal OPEN HOLE / CEMENT DETAIL 13-3/8" mt w/ 250 sx of Arcticset I in 24" Hole 9-5/8" Cmt w/ 572sx PF "E", 250 sx Class "G" in 12-1/4" Hole 7" Cmt w/ 400 sx Class "G" in 8.1/2" Hole 4-1/2" Cmt w/ 97 sks Class "G" in 6-1/8" Hole TREE & WELLHEAD Tree Cameron 2-9/16" 5M WKM 11" x 11" 5M, WKM w/ 11" x 2-7/8" tubing hanger/ NSCT Wellhead threads top and bottom and 3" CIW H PBV Profile GENERAL WELL INFO API: 50-029-22495-01-00 Drilled and Used by Nabors 22E - 1/14/1995 Completion by Nabors 4ES - 2/15/1995 Schrader Bluff Recompletion by Nabors 4ES -4/19/1997 Schrader Bluff Sand Test #2 - 8/15/1997 Sidetracked By Nordic 3 -12/15/1999 RWO by Nabors 4ES-1/24/2000 RWO by Nabors 4ES-12/11/2003 ESP RWO by Nabors 3S - 6/16/2008 RWO PCP Pump by Doyon 16-4/13/2013 Revised By: TDF 3/23/2014 EXHIBIT 6 Page 6 of 15 11" BOP Stack .5 es EXHIBIT 6 Page 7 of 15 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION REPORT OF SUNDRY WELL OPERATIONS 1. Operations Abandon 0 Plug Perforations Fracture Stimulate Pull Tubing Ld Operations shutdown Li Performed: Suspend ❑ Perforate ❑ Other Stimulate ❑ Alter Casing ❑ Change Approved Program ❑ Plug for Redrill ❑ erforate New Pool ❑ Repair Well ❑✓ Re-enter Susp Well ❑ Other: ES -PCP Change -out ✓❑ 2. Operator Name: 4. Well Class Before Work. 5. Permit to Drill Number: Hilcorp Alaska, LLC Development ❑✓ Exploratory ❑ Stratigraphic ❑ Service ❑ 199-114 3. Address: 6. API Number: 3800 Centerpoint Drive, Suite 1400, Anchorage AK, 99503 50-029-22495-01-00 7. Property Designation (Lease Number): 8. Well Name and Number: ADL0025517 MILNE PT UNIT SB J -09A 9. Logs (List logs and submit electronic and printed data per 20AAC25.071): 10. Field/Pool(s): N/A Milne Point Field / Schrader Bluff Oil 11. Present Well Condition Summary: Total Depth measured 8,235 feet Plugs measured N/A feet true vertical 4,046 feet Junk measured 7,075 (Fill) feet Effective Depth measured 7,075 feet Packer measured 5,199 feet true vertical 4,050 feet true vertical 3,749 feet Casing Length Size MD TVD Burst Collapse Conductor 112' 13-3/8" 112' 112' Surface 2,936' 9-5/8" 2,936' 2,529' 5,750psi 3,090psi Production 5,334' 7" 5,334' 3,828' 7,240psi 5,410psi Liner 938' 4-1/2" 6,137' 4,050' 8,430psi 7,500psi Slotted Liner 2,098' 4-112" 8,235' 4,046' N/A N/A Perforation depth Measured depth See Attached Schematic feet True Vertical depth See Attached Schematic feet Tubing (size, grade, measured and true vertical depth) 2-7/8" 6.5# / L-80 I EUE 8rd 5,063' 3,675' 5,199'MD Packers and SSSV (type, measured and true vertical depth) ZXP Packer N/A 3,749'TVD N/A 12. Stimulation or cement squeeze summary: N/A Intervals treated (measured): N/A Treatment descriptions including volumes used and final pressure: NIA 13. Representative Daily Average Production or Injection Data Oil -Bbl Gas-Mcf Water -Bbl Casing Pressure Tubing Pressure Prior to well operation: 44 3 26 80 219 Subsequent to operation: 81 2 83 240 1232 14. Attachments (required per 20 arc 25.070, 25.071, a 25.253) 15. Well Class after work: Daily Report of Well Operations ❑✓ Exploratory ❑ Development2l Service ❑ Stratigraphic ❑ Copies of Logs and Surveys Run ❑ 16. Well Status after work: Oil Gas WDSPL ❑ Printed and Electronic Fracture Stimulation Data ❑ GSTOR ❑ WIND ❑ WAG ❑ GINJ ❑ SUSP ❑ SPLUG ❑ 17. 1 hereby certify that the foregoing is true and correct to the best of my knowledge. Sundry Number or N/A if C.O. Exempt: 315-162 Contact Chris Kanyer Email ckanyeraa.hilcorp.com Printed Name Chris Kanyer Title Operations Engineer Signature Phone 777-8377 Date 6/3/2015 Form 10-404 Revised 5/2015 Submit Original Only EXHIBIT 6 Page 8 of 15 Ililcorp AlaKkn, LLC. KB Elev.: 29.6/ GL Elev.:17.0' TD=8,235' (MD) /TD=4,064'(TVD) PBTD = 8,235' (MD) / PBTD= 4,064(TVD) SCHEMATIC CASING DETAIL Milne Point Unit Well: MPU J -09A Last Completed: 4/29/2015 PTD: 199-114 Size Type Wt/ Grade/ Conn ID Top Btm 13-3/8" Conductor 54.5 / H-40 / N/A 12.615 0 112' 9-5/8" Surface 40 / L-80 / Btrc. 8.835 0 2,936' 7" Intermediate 26 / L-80 / NSCC 6.276 0 5,334' 4-1/2" Liner 12.6 / L-80 / IBT 3.958 5,199' 6,137' 4-1/2" Slotted Liner 6.2 / L-80 / SILT 3.958 6,137' 1 8,235' TUBING DETAIL Tubing 1 6.5 / L-80 / EUE 8rd 1 2.441 1 0 1 5,063' JEWELRY DETAIL No Depth Item 1 139' 2-7/8" x 1" Side Pocket KBMM w/ DPSOV 2 4,853' 2-7/8" x 1" Side Pocket KBMM Shear Valve set @ 2,000psi 3 4,994' 2-7/8" XN Nipple (2.25" ID) 4 5,006' WeIILift Discharge Gauge Unit 5 5,009' Wentrilift ESP: PCP 200D 2600 Pump 3.75"/ 22.42' 6 5,033' Flex Shaft Assembly EUE 8rd Box 7 5,043 Single Seal Section 8 5,049' Gear Reduction Unit GRU 538811.57:1 9 5,051' Motor MSP1/ 54 HP, 890 Volt, 39 Amp 10 5,059' WeIILift MGU w 6 fin Centralizer— Bottom @ 5,063' 11 5,199' Baker ZXP Liner Top Packer w/ 6' Tie Back (5.25" ID) 12 5,215' Baker 5" x 7" HMC Liner Hanger (4.375" ID) 13 6,013' Baker HMCV Cement Valve 14 6,032 Baker CTC 20' PZP ECP 15 8,190' 4.5" Baker Drillable Pack -Off Bushing 16 8,235' 4.5" Baker Drillable Guide Shoe WELL INCLINATION DETAIL KOP @ 600' Max Hole Angle = 59 deg. @ 3,300-3,500' MaxHole Angle = Horizontal OPEN HOLE / CEMENT DETAIL 13-3/8"" Cmt w/ 250 sx of Arcticset I in 24" Hole 9-5/8" Cmt w/ 572sx PF "E", 250 sx Class "G" in 12-1/4" Hole 7" Cmt w/ 400 sx Class "G" in 8-1/2" Hole 4-1/2" Cmt w/ 97 sks Class "G" in 6-1/8" Hole TREE & WELLHEAD Tree Cameron 2-9/16" 5M WKM 11" x 11" SM, WKM w/ 11" x 2-7/8" tubing hanger/ NSCT Wellhead threads top and bottom and 3" CIW H PBV Profile GENERAL WELL INFO API: 50-029-22495,01-00 Drilled and Cased by Nabors 22E -1/14/1995 Completion by Nabors 4ES — 2/15/1995 Schrader Bluff Recomoletion by Nabors 4ES — 4/19/1997 Schrader Bluff Sand Test A2 — 8/15/1997 Sidetracked By Nordic 3 —12/15/1999 RWO by Nabors 4ES —1/24/2000__ RWO by Nabors 4ES —12/11/2003 ESP RWO by Nabors 3S — 6/16/2008 RWO PCP Pump by Doyon 16-4/13/2013 ESP Change -out by Nordic 3 — 4/29/2015 Revised By: TDF 3/23/2014 EXHIBIT 6 Page 9 of 15 EXHIBIT 6 Page 10 of 15 Hilcorp Alaska, LLC 1,ila,,,,,Altslc,gL.1.0 Weekly Operations Summary Well Name JAPI Number lWell Permit Number IStart Date jEnTDate MPJ -09A 50-029-22495-01-00 199-114 4/26/2015 4/30/2015 Daily Operations: 4/26/15 - Sunday MIRU. Spot tanks, berm cellar MU hardline to kill tanks. Pull BPV, tested lines to 3,OOOpsi-test ok, filled pits with 2 loads of 120deg seawater. SITP 240psi, SICP 240psi, bled csg/tgb down to Opsi, started pumping hot seawater, rev cir @ 3bpm and broke cir at 25 bbbls. Increased rate to 4 bpm, continued circulate kill fliud, with returns clean, SD pump -well on static. 272 bbls pumped, 246 bbls returned, 26 bbls lost. Set BPV and ND tree, NU BOP's and connected lines. Tried pulling BPV and well had pressure. Opened casing with a slight blow. Lined up manifold started pump, circulate 1 well volume casing/tubing slight blow. SI casing and bullhead down tubing, catch 1,800psi after 4 bbls pumped. Bled off to Opsi. Opened casing to kill tank, pulled BPV/installed TWC. Filled BOP stack and performed shell test (250psi-3,OOOpsi). Tested BOPE per sundry, annular 250psi low/ 2,500psi high, rams 250psi low/ 3,OOOpsi high, valves 250psi low/ 3,OOOpsi high, performed kommey drawdown and gas dection. No failures recorded. 4/27/15 - Monday Preped rig floor to TOH w/ completion, opened casing pulled TWC and backed out lockdown pins. MU Landing jt, pulled 85k unseat hanger, pulled hanger to rig floor, meg, cable, good decompleted hanger and L/D same. PU stand and hang cables over sheave to spooler. TOH w/ completion, tallied tbg out, L/D 24 jts indentifed as bad on PDS caliper log plus 6 more with bad pin ends and tong markes, GLV's, xn-nipple and ESP assembly, packed sand small flakes of scale around the pump and intake. Cleaned and cleared rig floor, RD riser NU stripped head and preped to trip cleanout string. PU/MU 2-3/8" mule shoe. TIH w/101 jts of 5.8# 2-3/8" PH6 xo 6.54 2-7/8" EUE 8rd, 5,000' at report time. 4/28/15 -Tuesday Continued Tlli w/cleanout string, Tag hard @ 5199', PU 10', up weight 65k, down weight 55k. MU wash stand. Started pumping reverse circulate, broke circulation and washed down returns, heavy sand, tag hard @ 5,275' washed thru scale/sand bridge and continued washing down with heavy sand returns to top of slotted liner @ 6135'. Pumping 4bpm 1,300psi, total losses est 190 bbl. Immediate pump pressure 140 psi. RIH with 2 stands full reciprocation, check drag, continue RIH with all pipe in derrick to 7,075'. Install dart bottom jt 3. RU to pump N2 and surfactant. Witness all valves lined up for displacement of N2 to kill tank. Pressue test all lines 250psi low/2,500psi high. Problems with leaking valves on cement manifold. Grease and service same, PT OK. Pump 25 bbl Baraklean surfactant pill and chase with 10 bbls saltwater. Close annular BOP. Initiate pumping N2 500 SUM ICP 850psi, appeared to catch fluid after 45,000 SCF pressure increase to 1,350 psi, bump rate to 1000 SUM pressure 1,500psi increase to 1500 SCFM pressure 1,580psi. After 100,000 SCF still no returns continue pumping drop rate to 1,000 SUM pressure maintaining 1,500psi continue pumping to 155,000 SUM (note total hole volume should be approx 240,000) still no returns. Discuss with engineering. Decison to stop pumping N2 205,000 SCF gone no returns. Discussed ESP recovery with vendor, it was noted that tandem seals from recovered ESP assy were bone dry, rest of assembly was sand packed. RD N2 equipment, annulus beginning to unload clean fluid and N2 tbg pressure at 1,300psi, flowing anuulus pressure surging 2-300psi est. Pump tubing volume, tubing on vacuum, annulus still unloading. Continue to flow back annulus and monitor well is flowing slugs of crude and intermittent N2, some saltwater. 154 bbls recovered — 50% oil. Well appears dead. Spot A frame w/crane on rig floor for heat trace ESP run while blowing down well. Check pressure on annulus 0 psi. Tubing has check valve. Open annular BOP, pull 1 stand bleed off check on tubing, O psi. Pump 180 bbl 8.6# saltwater down annulus, partial returns after 60 bbls. Pump 40 bbls down tubing, intermittent returns again, monitor well 15 minutes. Well is static light vacuum. Trip BOP drill, rig up to trip, latch on to first stand, pipe stuck no up no down. Work pipe no room to go down. PU single rig up to circulate down annulus pump 2-3 BPM. Work pipe 20K over, no movement, circulation intermittent after 17 bbls pumped. Flip circulation over, MU top drive, circulate down tubing 4 BPM, work 20-25K over, pipe is free, reciprocate pipe during circulation, 1 bottoms up with -50 bbl losses and crude in partial returns. POOH w/ 2-7/8" tbg racking back in derrick. EXHIBIT 6 Page 10 of 15 4/29/15 - Wednesday POOH and rack 42 stands 2-7/8" L- 80 production string. Monitor well, POOH LD 2-3/8" workstring and M/S BHA. Offload 2-3/8" PH6 C/O string, on load Centrilift gear, GLMs, ND stripping head NU riser/bellNipple. Assemble and service PCP ESP assembly PJ and X-Nipple (ID= 2.313), string cable and cap over sheaves, hook up ESP connection and 3/8" stainless cap w/ Check. Test @ 900 psi. PU RIH tbg, shear valve GLM continued TIH w/ ESP completion testing cable and cap check every 2,000'. Cap check was 1,100psi. 2,525' from surface, string heat trace through sheave, attach/clamp heat trace. Continue RIH time per stand for HT and ESP clamps is 25 minutes. Install upper orifice GLM and final tbg. At report time still 3 stands in derrick and new replacement singles to PU. 4/3q/15 =`:Thursday Continue RIH w/ ESP/cap/HT. PU landing joint. Install hanger and penetrators. Test cables, cap string, and heat trace. Cut and splice cable connectors and cap string, install same. Meg check connector. Test heat trace connector. Land string SW 80K up 72K dn. Depths as follow: Hanger, Pup, 3 jts 2-7/8" L-80 6.5# tbg, pup, GLM @ 139', 150 jts tbg, pup GLM @ 4,853', 4 jts tbg, XN-Nipple @ 4,994', pup. Head @ 5,005', Pump/Flex Shaft @5,010, EOT Centralizer @ 5,063'. Run in lock down screws. ND BOPE. NU tree. Test all breaks and void 250/5,000 psi. Release Rig. EXHIBIT 6 Page 11 of 15 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION REPORT OF SUNDRY WELL OPERATIONS 1. Operations Abandon ❑ 6.g Perforations Fracture Stimulate Pull Tubing ✓ Operations shutdown Li Performed: Suspend ❑ Perforate ❑ Other Stimulate ❑ Alter Casing ❑ Change Approved Program ❑ Plug for Redrill ❑ erforate New Pool ❑ Repair Well ❑✓ Re-enter Susp Well ❑ Other: ES -PCP Change -out Q 2. Operator Name: 4. Well Class Before Work: 5. Permit to Drill Number: Hilcorp Alaska, LLC Development ❑✓ Exploratory ❑ Stratigraphie ❑ Service ❑ 199-114 3. Address: 6. API Number: 3800 Centerpoint Drive, Suite 1400, Anchorage AK, 99503 50-029-22495-01-00 7. Property Designation (Lease Number): 8. Well Name and Number: ADL0025517 MILNE PT UNIT SB J -09A 9. Logs (List logs and submit electronic and printed data per 20AAC25.071): 10. Field/Pool(s): N/A Milne Point Field / Schrader Bluff Oil 11. Present Well Condition Summary: Total Depth measured 8,235 feet Plugs measured NIA feet true vertical 4,046 feet Junk measured 7,075 (Fill) feet Effective Depth measured 7,075 feet Packer measured 5,199 feet true vertical 4,050 feet true vertical 3,749 feet Casing Length Size MD TVD Burst Collapse Conductor 112' 13-3/8" 112' 112' Surface 2,936' 9-518" 2,936' 2,529' 5,750psi 3,090psi Production 5,334' 7" 5,334' 3,828' 7,240psi 5,410psi Liner 938' 4-112" 6,137' 4,050' 8,430psi 7,500psi Slotted Liner 2,098' 4-1/2" 8,235' 4,046' NIA NIA Perforation depth Measured depth See Attached Schematic feet True Vertical depth See Attached Schematic feet Tubing (size, grade, measured and true vertical depth) 2-7/8" 6.5# / L-80 / EUE 8rd 5,063' 3,675' 5,199'M D Packers and SSSV (type, measured and true vertical depth) ZXP Packer N/A 3,749'TVD N/A 12. Stimulation or cement squeeze summary: N/A Intervals treated (measured): N/A Treatment descriptions including volumes used and final pressure: N/A 13. Representative Daily Average Production or Injection Data Oil -Bbl Gas-Mcf Water -Bbl Casing Pressure Tubing Pressure Prior to well operation: 44 3 26 80 219 Subsequent to operation: 81 2 83 240 232 14. Attachments (required per 20 nac 25.070, 25.071, a 25.283) 15. Well Class after work: Daily Report of Well Operations ❑✓ Exploratory❑ Development0 Service ❑ Stratigraphic ❑ Copies of Logs and Surveys Run ❑ 16. Well Status after work: Oil L1 Gas WDSPL ❑ Printed and Electronic Fracture Stimulation Data ❑ GSTOR ❑ WINJ ❑ WAG ❑ GINJ ❑ SUSP ❑ SPLUG ❑ 17. 1 hereby certify that the foregoing is true and correct to the best of my knowledge. Sundry Number or N/A if C.O. Exempt: 1315-162 Contact Chris Kanyer Email ckanyer&hilcor2.com Printed Name Chris Kanyer Title Operations Engineer Signature 41,11, X, Phone 777-8377 Date 6/3/2015 If Form 10-404 Revised 5/2015 Submit Original Only EXHIBIT 6 Page 12 of 15 Milne Point Unit Well: MPU J -09A SCHEMATIC Last Completed: 4/29/2015 rHh •n AhKk,, r,r,r. PTD: 199-114 KB Elev.: 29.6/ GL Elev.:l7.d TD = 8,235' (MD) /TD= 4,064'(TVD) PBTD = 8,235' (MD) / PBTD = 4,064(TVD) CASING DETAIL Size Type Wt/ Grade/ Conn ID Top Btm 13-3/8" Conductor 54.5 / H-40 / N/A 12.615 0 112' 9-5/8" Surface 40 / L-80 / Btrc. 8.835 0 2,936' T. Intermediate 26 / L-80 / NSCC 6.276_ 0 5,334' 4-1/2" Liner 12.6 / L-80 / IBT 3.958 S,199' 6,137' 4-1/2" Slotted Liner 6.2 / L-80 / SLT 3.958 6,137' 8,235' TUBING DETAIL 2-7/8" 1 Tubing 1 6.5 / L-80/ EUE 8rd [-2.41—F 0 1 5,063' JEWELRY DETAIL No Depth Item 1 139' 2-7/8" x 1" Side Pocket KBMM w/ DPSOV 2 4,853' 2-7/8" x 1" Side Pocket KBMM Shear Valve set @ 2,000psi 3 4,994' 2-7/8" XN Nipple (2.25" ID) 4 5,006' WellLift Discharge Gauge Unit 5 5,009' ZCentrilift ESP: PCP 200D 2600 Pump 3.75"/ 22.42' 6 5,033' Flex Shaft Assembly EUE 8rd Box 7 5,043 Single Seal Section 8 5,049' Gear Reduction Unit GRU 538B 11.57:1 9 5,051' Motor MSPS/ 54 HP, 890 Volt, 39 Amp 10 5,059' WellLift MGU w 6 fin Centralizer— Bottom @ 5,063' 11 5,199' Baker ZXP Liner Top Packer w/ 6' Tie Back (5.25" ID) 12 5,215' Baker 5" x 7" HMC Liner Hanger (4.375" ID) 13 6,013' Baker HMCV Cement Valve 14 6,032' Baker CTC 20' PZP ECP 15 8,190' 4.5" Baker Drillable Pack -Off Bushing 16 8,235' 1 4.5" Baker Drillable Guide Shoe WELL INCLINATION DETAIL KOP @ 600' Max Hole Angle = 59 deg. _@ 3,300-3,500' MaxHole Angle = Horizontal OPEN HOLE / CEMENT DETAIL 13-3/8"" Cmt w/ 250 sx of Arcticset I in 24" Hole 9-5/8" Cmt w/ 572sx PF "E", 250 sx Class "G" in 12-1/4" Hole 7" Cmt w/ 400 sx Class "G" in 8-1/2" Hole 4-1/2' _ Cmt w/ 97 sks Class "G" in 6.1/8" Hole TREE & WELLHEAD Tree Cameron 2-9/16" SM WKM 11" x 11" 5M, WKM w/ 11" x 2-7/8" tubing hanger/ NSCT Wellhead threads top and bottom and 3" CIW H PBV Profile GENERAL WELL INFO API: 50-029-2.2495-01-00 Drilled and Cased by Nabors 22E - 1/14/1995 Completion by Nabors 4ES — 2/15/1995 Schrader Bluff Recompietion by Nabors 4ES — 4/19/1997 Schrader Bluff Sand Test N2— 8/15/1997 Sidetracked By Nordic 3 —12/15/1999 RWO by Nabors 4ES — 1/24/2000 RWO by Nabors 4ES — 12/11/2003 ESP RWO by Nabors 3S-6/16/2008 RWO PCP Pump by Doyon 16 — 4/13/2013 ESP Change -out by Nordic 3 — 4/29/2015 Revised By: TDF 3/23/2014 EXHIBIT 6 Page 13 of 15 EXHIBIT 6 Page 14 of 15 Hilcorp Alaska, LLC j,ileorpAhmk,,,LIA: Weekly Operations Summary Well Name JAPI Number IWO Permit Number Start Date End Date M PJ -09A 50-029-22495-01-00 199-114 4/26/2015 4/30/2015 Daily Operations; 4/26/15 - Sunday MIRU. Spot tanks, berm cellar MU hardline to kill tanks. Pull BPV, tested lines to 3,000psi-test ok, filled pits with 2 loads of 120deg seawater. SITP 240psi, SICP 240psi, bled csg/tgb down to Opsi, started pumping hot seawater, rev cir @ 3bpm and broke cir at 25 bbbls. Increased rate to 4 bpm, continued circulate kill fliud, with returns clean, SD pump -well on static. 272 bbls pumped, 246 bbls returned, 26 bbls lost. Set BPV and ND tree, NU BOP's and connected lines. Tried pulling BPV and well had pressure. Opened casing with a slight blow. Lined up manifold started pump, circulate 1 well volume casing/tubing slight blow. SI casing and bullhead down tubing, catch 1,800psi after 4 bbls pumped. Bled off to Opsi. Opened casing to kill tank, pulled BPV/installed TWC. Filled BOP stack and performed shell test (250psi-3,000psi). Tested BOPS per sundry, annular 250psi low/ 2,500psi high, rams 250psi low/ 3,000psi high, valves 250psi low/ 3,000psi high, performed kommey drawdown and gas dection. No failures recorded. 4/27/15 - Monday Preped rig floor to TOH w/ completion, opened casing pulled TWC and backed out lockdown pins. MU Landing jt, pulled 85k unseat hanger, pulled hanger to rig floor, meg. cable, good decompleted hanger and L/D same. PU stand and hang cables over sheave to spooler. TOH w/ completion, tallied tbg out, L/D 24 jts indentifed as bad on PDS caliper log plus 6 more with bad pin ends and tong markes, GLV's, xn-nipple and ESP assembly, packed sand small flakes of scale around the pump and intake. Cleaned and cleared rig floor, RD riser NU stripped head and preped to trip cleanout string. PU/MU 2-3/8" mule shoe. TIH w/101 jts of 5.8# 2-3/8" PH6 xo 6.5# 2-7/8" EUE 8rd, 5,000' at report time. 4/28/15 -Tuesday Continued Till w/cleanout string, Tag hard @ 5199', PU 10', up weight 65k, down weight 55k. MU wash stand. Started pumping reverse circulate, broke circulation and washed down returns, heavy sand, tag hard @ 5,275' washed thru scale/sand bridge and continued washing down with heavy sand returns to top of slotted liner @ 6135'. Pumping 4bpm 1,300psi, total losses est 190 bbl. Immediate pump pressure 140 psi. RIH with 2 stands full reciprocation, check drag, continue RIH with all pipe in derrick to 7,075'. Install dart bottom jt 3. RU to pump N2 and surfactant, Witness all valves lined up for displacement of N2 to kill tank. Pressue test all lines 250psi low/2,500psi high. Problems with leaking valves on cement manifold. Grease and service same, PT OK. Pump 25 bbl Baraklean surfactant pill and chase with 10 bbls saltwater. Close annular BOP. Initiate pumping N2 500 SUM ICP 850psi, appeared to catch fluid after 45,000 SCF pressure increase to 1,350 psi, bump rate to 1000 SUM pressure 1,500psi increase to 1500 SUM pressure 1,580psi. After 100,000 SCF still no returns continue pumping drop rate to 1,000 SUM pressure maintaining 1,500psi continue pumping to 155,000 SUM (note total hole volume should be approx 240,000) still no returns. Discuss with engineering. Decison to stop pumping N2 205,000 SCF gone no returns. Discussed ESP recovery with vendor, it was noted that tandem seals from recovered ESP assy were bone dry, rest of assembly was sand packed. RD N2 equipment, annulus beginning to unload clean fluid and N2 tbg pressure at 1,300psi, flowing anuulus pressure surging 2-300psi est. Pump tubing volume, tubing on vacuum, annulus still unloading. Continue to flow back annulus and monitor well is flowing slugs of crude and intermittent N2, some saltwater. 154 bbls recovered — 50% oil. Well appears dead. Spot A frame w/crane on rig floor for heat trace ESP run while blowing down well. Check pressure on annulus 0 psi. Tubing has check valve. Open annular BOP, pull 1 stand bleed off check on tubing, O psi. Pump 180 bbl 8.64 saltwater down annulus, partial returns after 60 bbls. Pump 40 bbls down tubing, intermittent returns again, monitor well 15 minutes. Well is static light vacuum. Trip BOP drill, rig up to trip, latch on to first stand, pipe stuck no up no down. Work pipe no room to go down. PU single rig up to circulate down annulus pump 2-3 BPM. Work pipe 20K over, no movement, circulation intermittent after 17 bbls pumped. Flip circulation over, MU top drive, circulate down tubing 4 BPM, work 20-25K over, pipe is free. reciprocate pipe during circulation, 1 bottoms up with —50 bbi losses and crude in partial returns. POOH w/ 2-7/8" tbg racking back in derrick. EXHIBIT 6 Page 14 of 15 Wed -'day 'd' mps, POOH and rack 42 stands 2-7/8" L- 80 production string. Monitor well, POOH LD 2-3/8" workstring and M/S BHA. Offload 2-3/8" PH6 C/O string, on load Centrilift gear, GLMs, ND stripping head NU riser/beliNipple. Assemble and service PCP ESP assembly PJ and X -Nipple (ID= 2.313), string cable and cap over sheaves, hook up ESP connection and 3/8" stainless cap wl Check. Test @ 900 psi. PU RIH tbg, shear valve GLM continued TIH w/ ESP completion testing cable and cap check every 2,000'. Cap check was 1,100psi. 2,525' from surface, string heat trace through sheave, attach/clamp heat trace. Continue RIH time per stand for HT and ESP clamps is 25 minutes. Install upper orifice GLM and final tbg. At report time still 3 stands in derrick and new replacement singles to PU. -day Continue RIH w/ESP/cap/HT. PU landingjoint. Install hanger and penetrators. Test cables, cap string, and heat trace. Cut and splice cable connectors and cap string, install same. Meg check connector. Test heat trace connector. Land string SW 80K up 72K dn. Depths as follow: Hanger, Pup, 3 jts 2-7/8" L-80 6,5# tbg, pup, GLM @ 139', 150 jts tbg, pup GLM @ 4,853', 4jts tbg, XN-Nipple @ 4,994', pup. Head @ 5,005', Pump/Flex Shaft @5,010, EDT Centralizer @ 5,063'. Run in lock down screws. ND BOPE, NU tree. Test all breaks and void 250/5,000 psi. Release Rig. EXHIBIT 6 Page 15 of 15 THE STATE ALASKA GOVERNOR BILL WALKER Stan Porhola Operations Engineer Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Milne Point Field, Schrader Bluff Pool, MPU SB J-OIA Sundry Number: 315-459 Dear Mr. Porhola: Alaska Oil and Gas C1,011se vation ("onus fission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www,00gc(..alaska.gov Enclosed is the approved application for sundry approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration. A request for reconsideration is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. Sincerely, Cathy . Foerster Chair DATED this 3 day of July, 2015 Encl. EXHIBIT 7 Page 1 of 12 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION APPLICATION FOR SUNDRY APPROVALS 70 AAC 252Rn li f iii 287015 1. Type of Request: Abandon ❑ Plug for Redril❑ Perforate New Pool ❑ Repair Well Change Approved Program ❑ Suspend ❑ Plug Perforations ❑ Perforate ❑ Pull Tubing 0 Time Extension ❑ Operations Shutdown ❑ Re-enter Susp. Wet ❑ Stimulate ❑ Alter Casing ❑ Other: ESP Change -out ❑✓ 2. Operator Name: 4. Current Well Class: 5. Pennit to Drill Number: Hilcorp Alaska, 1-1-C Exploratory ❑ Development Stratigraphic ❑ Service ❑ 199-111 3. Address: 6. API Number: 3800 Cenlerpoint Drive, Suite 1400, Anchorage AK, 99503 50-029.22070-01-00 7. If perforating: 8. Well Name and Number. What Regulation or Conservation Order governs well spacing in this pool? C.O. 477.05 Will planned perforations require a spacing exception? Yes ❑ No ❑Q MILNE PT UNIT SB J -01A 9. Property Designation (Lease Number): 10. Field/Pool(s): ADL0315848 I Milne Point Field / Schrader Bluff Oil Pool 11. PRESENT WELL CONDITION SUMMARY Total Depth MD (ft): Total Depth TVD (ft): Effective Depth MD (ft): Effective Depth TVD (ft): Plugs (measured): Junk (measured): 8,034 4,141 7,135 4,108 N/A NIA Casing Length Size MD TVD Burst Collapse Conductor 105' 13-5/8" 105, 105' 2,730psi 1,130psi Surface 2,409' 9-5/8" 2,409' 2,364' 3,520psi 2,020psi Production 3,640' 7" 3,640' 3,502' 7,240psi 5,410psi Slotted Liner 3,623' 4-1/2" 7,135' 4,154' N/A N/A Slotted Liner 3,142' 2-3/8" 7,709'4,161' N/A N/A Perforation Depth MD (ft): Perforation Depth TVD (ft): Tubing Size: Tubing Grade: Tubing MD (ft): See Attached Schematic See Attached Schematic 2-7/8" 6.5# / L-80 / EUE 8rd 3,469' Packers and SSSV Type: Packers and SSSV MD (ft) and TVD (ft): NIA and NIA N/A and NIA 12. Attachments: Description Summary of Proposal n 13. Well Class after proposed work: Detailed Operations Program ❑ BOP Sketch U Exploratory ❑ Stratigraphic ❑ Development Q Service 14. Estimated Date for 15. Well Status after proposed work: Commencing Operations: 8/11/2015 Oil Q Gas ❑ WDSPL ❑ Suspended ❑ WINJ ❑ GWJ ❑ WAG ❑ Abandoned ❑ 16. Verbal Approval: Date: Commission Representative: GSTOR ❑ SPLUG ❑ 17. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Stan Porhola Email cker hilcor .com Printed Name Stan Porhola Title Operations Engineer Signature v"L--- —' Phone 777-8412 Date 7/28/2015 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number: Plug Integrity ❑ ROP Test [ Mechanical Integrity Test ❑ Location Clearance ❑ Other. S 0e) /so r,� - t mss. l f 1 / / Spacing Exception Required? Yes ❑ No t� Subsequent Form Required: 1 b-_ I o q APPROVED BY Approved b P-�pt .� COMMISSIONER THE COMMISSION Date: 7—/� ✓ Submit Form and Form 10-403 (Revised 10!2012) UURLILATE.rith. from the date of approval. Attachments in Duplicate EXHIBIT 7 Page 2 of 12 Ililcorp Alnskn. IJJ Well Prognosis Well: MPU J -01A Date: 7/28/2015 Well Name: MPU J -01A API Number: 50-029-22070-001 Current Status: Si Oil Well [ESP] Pad: J -Pad Estimated Start Date: August 11th, 2015 Rig: ASR #1 Reg. Approval Req'd? Yes Date Reg. Approval Rec'vd: Regulatory Contact: Tom Fouts Permit to Drill Number: 199-111 First Call Engineer: _ Stan Porhola (907) 777-8412 (0) (907) 331-8228 (M) Second Call Engineer: Paul Chan (907) 777-8333 (0) (907) 444-2881 (M) AFE Number: Current Bottom Hole Pressure: 1,378 psi @ 4,000' TVD (Last BHP measured 2/02/2015) Maximum Expected BHP: 1,378 psi @ 4,000' TVD (No new perfs being added) Max. Allowable Surf Pressure: 0 psi (Based on SBHP taken 2/02/2015 and water cut of 54% (0.389psi/ft) with an added safety factor of 1,000' TVD of oil cap) Brief Well Summary: The Milne Point J -01A well was sidetracked as a Schrader Bluff development well that TD'd at a depth of 8,034' and ran a slotted 4-1/2" liner in open hole in December 1999. The well was initially completed with an ESP. This ESP was pulled in 2001, a lateral was drilled & lined with a 2-3/8" pre-drilled/slotted liner, and a new ESP installed. Subsequent ESPs failed and were replaced in 2003, 2011, and 2015. Due to observed scale issues, a downhole chemical injection line was run as part of the new completion in 2015. Solids production is assumed to be the cause of the most recent ESP failure in July 2015. Notes Regarding Wellbore Condition • Casing last tested to 1,500 psi for 30 min down to 3,577' on 3/20/2015. Obiective• The purpose of this work/sundry is to pull the existing failed ESP and run a new ESP. Brief Procedure: WO Rig Procedure: 1. MIRU Hilcorp ASR #1 WO Rig. 2. Circulate well with 8.4 ppg lease water down tubing and fill casing. 3. Set BPV. ND Tree. 4. NU 11" BOPE. Test to 250 psi Low/ 3,000 psi High, annular to 250 psi Low/ 1,500 psi High (hold each valve and test for 5 -min). Record accumulator pre -charge pressures and chart tests. a. Notify AOGCC 24 hrs in advance of BOP test. b. Test VBR rams on 2-7/8" test joint. 5. Bleed any pressure off tubing and casing. Pull BPV. 6. MU landing joint and pull over string weight (65k) on tubing hanger to confirm free. 7. POOH. Lay 2-7/8" tubing on the pipe rack (utilize as workstring). 8. MU 6-1/8" bit and junk baskets and RIH to +/- 3,500'. 9. Circulate bottoms up x 2 with 8.4 ppg lease water. 10. MU 3-3/4" bit and junk baskets and RIH to +/- 3,500'w/ 1-1/2" tubing. EXHIBIT 7 Page 3 of 12 lliluorp Alaska. LU Well Prognosis Well: MPU J -01A Date:7/28/2015 11, MU XO from 1-1/2" tubing to 2-7/8" tubing. 12. Cleanout fill to +/- 7,000' in A lateral. 13. Circulate bottoms up x 2 with 8.4 ppg lease water. 14. POOH. Lay down bit and junk baskets. Lay down 1-1/2" tubing and 2-7/8" tubing. 15. PU new 475 series ESP and RIH with existing 2-7/8" 8RD EUE L-80 tubing. a. Test 3/8" control line to 2,500 psi. b. RU to use clamps to secure control line to tubing (ensure adequate clamps). 16. Set base of ESP at 4-/-3,475' (Pump intake around +/- 3,395'). Land tubing hanger. 17. Lay down landing joint. Set BPV. ND BOPE. NU existing 2-7/8" 5,0004 tree. Pull BPV. 18. Set TWC. Test tubing hanger to 250/5,000 psi. Test tree to 250/5,000 psi. Pull TWC. 19. RD Hilcorp ASR #1 WO Rig. 20. Replace IA x OA pressure gauge if removed (7" x 9-5/8"). 21. Turn well over to production. Attachments: 1. As -built Schematic 2. Proposed Schematic 3. BOPE Schematic EXHIBIT 7 Page 4 of 12 ❑ilenrp Ab�ekn, LLC RKB Elev = 35' SCHEMATIC Milne Point Unit Well: MPJ-01AI-1 Last Completed: 4/24/2014 PTD: 201-021 CASING DETAIL Size Type Wt/ Grade/ Conn Drift ID Top Btrn 13-3/8" Conductor 954.5 / K-55 / Welded 12.615 Surface 105' 9-5/8" Surface 36 / K-55 / Btrc. 8.921 Surface 2,409' 7" Intermediate 26 / L-80 / BTC 6.276 Surface 3,640' 4-1/2" Sltd Liner A 12.6 / L-80 / IBT 3.958 3,512' 7,135' 2-3/8" Sltd Liner B I N/A J L-80 / N/A I N/A 4,567 7,709' TD= 7,950' (MD) / TD= 4,165(TVD) PBTD = 7,950' (MD) / PBTD = 4,165'(TVD) TUBING DETAIL 8" 1 Tubing 1 9.3 / L-80 / EUE 8rd 2.867 Surface 3,469' Capstring Stainless Steel N/A Surface 3,469' JEWELRY DETAIL o Depth Item 171' GLM 3,253' GLM 3,394' 2-7/8" XN Nipple, 2.2501D 3,405' DischargeHead— FPHVDIS 3,406' Dual Tandem Pump Section —71 Flex 10 SXD (2) 3,435' Gas Separator — GRSFTXAR H6 3,440' Tandem Seal Section - GSBDBUT SB/SB PFSA : GSBDBIT SB/SB PFSA 3,454' Motor— MSPl-250 126HP/ 2,445 V/ 31A 3,465' Sensor / Centralizer —±Bottom@3,469' 3,512' Baker 5" x 7" HMC Liner Hanger L 4,567' 2-3/8" Liner Top w/ 3.70" Deploy Sleeve 4,682' Baker HMCV Cementing Valve 3 4,704' Baker CTC 20' PZP ECP WELL INCLINATION DETAIL KOP @ 1,500' MD Max Hole Angle = 26 deg @ 2,500' MD Hole Angle through Perf = 20 deg OPEN HOLE / CEMENT DETAIL 13-3/8"" Cmt w/ 500 sx Permafro_st'C' in 30" hole 9-5/8" Cmt w/ 1,145 sx Permafrost'E' in 12-1/4" Hole 7" Cmt w/ 293 sx Class "G" in 8-1/2" Hole 4-1/2" Cmt w/ 97 sx Class 'G' in 6.1/8" Hole TREE & WELLHEAD INFO Tree WKM 2-9/16" 5M Wellhead 11" x 11" 5M Tubing Spool, 11" x 2-7/8" 8rd (Top & Bottom) WKM tbg, w/ 2.5" 'H' BPV Profile )= 8,034' )= 7,905' GENERAL WELL INFO API: 50-029-22070-60-00 Drilled and Cased by Nabors 27E —12/15/1990 RWO/ Multiple Frac Packs -4/4/1995 ESP Replacement by Nabors 4ES — 2/21/1997 S/T & Comp. Nabors 4ES &Completion —10/05/99 2"" Lateral 3S, Nabors $-ES & Nordic 93 — 5/27/2001 Replace ESP -Nabors 4ES — 8/20/2003 Replace ESP — Do on 16-8/20/2003 Replace ESP -Doyon 16-4/24/2011 Created By: TDF 4/29/2015 EXHIBIT 7 Page 5of12 e Itileorp Akacka, LLC RKB Elev = 35' Milne Point Unit Well: MPJ-01AL1 PROPOSED Last Completed: Proposed PTD: 201-021 CASING DETAIL Size Type Wt/ Grade/ Conn Drift ID Top Btm 13-3/8" Conductor 954.5 / K-55 / Welded 12.615 Surface 105' 9-5/8" Surface 36 / K-55 / Btrc. 8.921 Surface 2,409' 7" Intermediate 26/L-80/BTC 6.276 Surface 3,640' 4-1/2" Slid Liner A 12.6/L-80/IBT 3.958 3,512' 7,135' 2-3/8" 1 Sltd Liner B I N/A / L-80 / N/A I N/A 4,567 7,709' TD = 7,950' (MD) / TD = 4,165'(TVD) PBTD= 7,950' (MD) / PBTD= 4,165(TVD) TUBING DETAIL '8" Tubing 6.5 / L-80 / EUE 8rd 1 2.867 1 Surface 1 ±3;475' JEWELRY DETAIL o Depth Item 1200' GLM ! ±3,250' GLM 1 ±3,400' 2-7/8" XN Nipple, 2.25010 ±3,411' DischargeHead— FPFIVDIS ±3,412' Dual Tandem Pump Section — 71 Flex 10 SXD (2) i ±3,441' Gas Separator— GRSFTXAR H6 ±3,446' Tandem Seal Section - GSBDBUT SB/SB PFSA : GSBDBiT SB/SB PFSA ±3,460' Motor — MSPi-250 126HP/ 2,445 V/ 31A ±3,471' 3/8" Stainless Steel External Capstring ±3,471' Sensor / Centralizer —±Bottom@3,475' L 3,512' Baker 5"x 7' HMC Liner Hanger 1 4,567' 2-3/8" Liner Top w/ 3.70" Deploy Sleeve 3I 4,687' Baker HMCV Cementing Valve LL 4,704' Baker CTC 20' P2P ECP WELL INCLINATION DETAIL KOP @ 1,S00' MD Max Hole Angle = 26 deg @ 2,500' MD Hole Angle through Perf = 20 deg OPEN HOLE / CEMENT DETAIL 13-3/8"" Cmt w/ 500 sx Permafrost'C' in 30" hole 9-5/8" Cmt w/ 1,145 sx Permafrost'E' In 12-1/4" Hole 7" Cmt w/ 293 sx Class "G" in 8-1/2" Hole 4-1/2" Cmt w/ 97 sx Class 'G' in 6-1/8" Hole TREE & WPI I HFAr) INFO Tree WKM 2-9/16" SM Wellhead 11" x 11" SM Tubing Spool, 11" Bottom) WKM tbg. w/ 2.5"'H' BPV Profile )= 8,034' )= 7,905' GENERAL WELL INFO API: 50 029-22070-60-00 _ Drilled and Cased by Nabors 27E —12/15/1990 RWO/ Multiple Frac Packs -4/4/1995 ESP Replacement by Nabors 4ES — 2/21/1997 SIT & Comp. Nabors 4ES &Completion —10/05/99 2" Lateral 35, Nabors $-ES & Nordic #3 — 5/27/2001 Replace ESP - Nabors 4ES —8/20/2003 Replace ESP — Doyon 16 — 8/20/2003 Replace ESP - Doyon 16 — 4/24/2011 Created By: STP 7/27/2015 EXHIBIT 7 Page 6 of 12 11" BOPE Milne Point 2015 ASR Rig 1 Knight Oil Tools BOP Updated 7/23/15 7/8 -5 variables 'es EXHIBIT 7 Page 7 of 12 EXHIBIT 7 Page 8 of 12 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION REPORT OF SUNDRY WELL OPERATIONS 1. Operations Abandon Plug Perforations Fracture Stimulate 0 Pull Tubing 2 Operations shutdown 1-1 Performed: Suspend ❑ Perforate ❑ Other Stimulate ❑ Alter Casing ❑ Change Approved Program ❑ Plug for Redrill ❑ erforate New Pool ❑ Repair Well ❑� Re-enter Susp Well ❑ Other: ESP Change -out 2, Operator Name: 4. Well Class Before Work: 5. Permit to Drill Number: Hilcorp Alaska, LLC Development Q Exploratory ❑ Stratigraphic ❑ Service ❑ 199-111 3. Address: 6. API Number: 3800 Cenlerpoint Drive, Suite 1400, Anchorage AK, 99503 50-029-22070-01-00 7. Property Designation (Lease Number): 8. Well Name and Number: ADL0315848 MILNE PT UNIT SB J -01A 9. Logs (List logs and submit electronic and printed data per 20AAC25.071): 10, Field/Pool(s): NIA Milne Point Field / Schrader Bluff Oil Pool 11. Present Well Condition Summary: Total Depth measured 8,034 feet Plugs measured N/A feet true vertical 4,141 feet Junk measured NIA feet Effective Depth measured 7,135 feet Packer measured NIA feet true vertical 4,108 feet true vertical NIA feel Casing Length Size MD 1 VD Burst Collapse Conductor 105' 13-5/8" 105' 105' 2,730psi 1,130psi Surface 2,409' 9-5/8" 2,409' 2,346' 3,520psi 2,020psi Production 3,640' 7" 3,640' 3,502' 7,240psi 5,410psi Slotted Liner 3,623' 4-112" 7,135' 4,154' N/A N/A Slotted Liner 3,142' 2-318" 7,709' 4,161' NIA N/A Perforation depth Measured depth See Attached Schematic feet True Vertical depth See Attached Schematic feet Tubing (size, grade, measured and true vertical depth) 2-7/8" 6.5#/ L-80/ EUE 8rd 3,496' 3,368' Packers and SSSV (type, measured and true vertical depth) N/A NIA NIA N/A 12. Stimulation or cement squeeze summary: N/A Intervals treated (measured): N/A Treatment descriptions including volumes used and final pressure: NIA 13. Representative Daily Average Production or Injection Data Oil -Bbl Gas-Mcf Water -Bbl Casing Pressure I Tubing Pressure Prior to well operation: 19 54 54 300 1 223 Subsequent to operation. 59 0 103 340 1 226 14. Attachments (required per 20 AAC 25.070; 25.071, a 25.283) 15. Well Class after work: Daily Report of Well Operations D Exploratory ❑ Development Q Service ❑ Stratigraphic ❑ Copies of Logs and Surveys Run ❑ 16. Well Status after work: oil Q Gas WDSPL Lj Printed and Electronic Fracture Stimulation Data ❑ GSTOR ❑ WINJ ❑ WAG ❑ GINJ ❑ SUSP ❑ SPLUG ❑ 17. 1 hereby certify that the foregoing is true and correct to the best of my knowledge. Sundry Number or N/A if C.O. Exempt: 315-459 Contact Stan Porhola Email sporhola a hilcorp.com Printed Name Stan Porhola Title Operations Engineer Signature irL Phone 777-8412 Date 10/30/2015 Foran 10-404 Revised 5/2015 Submit Original Only EXHIBIT 7 Page 9 of 12 RKB Elev = 35' Milne Point Unit Well: MPJ-01AL1 ACTUAL SCHEMATIC Last Completed: 8/11/2015 PTD: 201-021 CASING DETAIL Size Type Wt/ Grade/ Conn Drift ID Top Btm 13-3/8" Conductor 954.5 / K-55 / Welded 12.615_ Surface 105' 9-5/8" Surface 36 / K-55 / Btrc. 8.921 Surface 2,409' 7" Intermediate_ 26 / L-80 / BTC 6.276 Surface 3,640' 4-1/2" Sltd Liner A 12.6 / L-80 / IBT 3.958 3,512' 7,135' 2-3/8" Sltd Liner B N/A / L-80 / N/A N/A 4,567 7,709' TD= 7,950' (MD) / TD = 4,165'(TVD) PBTD= 7,950' (MD) / PBTD = 4,165'(TVD) TUBING DETAIL Tubing 1 6.5 / L-80 / EUE 8rd 1 2.867 1 Surface 3,496' JEWELRY DETAIL Depth Item 205' GLM 3,252' GLM 3,428' 2-7/8" XN Nipple, 2.2501D 3,44D' Discharge Head — FPHVDIS 3,441' Pump Section —119 -Flex 10 SXD 3,464' Gas Separator—GRSFTXAR H6 3,469' Tandem Seal Section - GSBDBUTSB/SB PFSA : GSBDBIT SB/SB PFSA 3,483' Motor — MSP3-250 84HP/ 2,210 V/ 23A 3,491' 3/8" Stainless Steel External Capstring 3,491' Sensor XT -150 / Centralizer— Bottom@ 3,496' 3,512' Baker 5" x 7" HMC Liner Hanger 4,567' 2-3/9' Liner Top w/ 3.70" Deploy Sleeve 4,682' Baker HMCV Cementing Valve 4,704' Baker CTC 20' PZP ECP WELL INCLINATION DETAIL KOP @ 1,500' MD Max Hole Angle = 26 deg @ 2,500 MD Hole Angle through Perf= 20 deg OPEN HOLE / CEMENT DETAIL 13-3/8"" Cmt w/ 500 sx Permafrost 'C' in 30" hole 9-5/8" Cmt w/ 1,145 sx Permafrost 'E' in 12-1/4" Hole 7" Cmt w/ 293 sx Class "G" in 8-1/2" Hole 4-1/2" Cmt w/ 97 sx Class'G' in 6.1/8" Hole TREE & WELLHEAD INFO Tree WKM 2-9/16" 5M Wellhead 11" x 11" SM Tubing Spool, 1V x 2-7/8" 8rd (Top & Bottom) WKM tbg. w/ 2.5"'H' BPV Profile )= 8,034' )= 7,905' GENERAL WELL INFO API: 50.029-22070 60-00 _ Drilled and Cased by Nabors 27E —12/15/1990 RWO/ Multiple Frac Packs -4/4/1995 ESP Replacement by Nabors 4ES — 2/21/1997 S/T & Comp. Nabors 4ES &Completion —10/05/99 2" Lateral 3S, Nabors $-ES & Nordic #3 — 5/27/2001 Replace ESP - Nabors 4ES —8/20/2003 Replace ESP— Doyon 16-8/20/2003 Replace ESP -Doyon 16-4/24/2011 Created By: STP 10/29/2015 EXHIBIT 7 Page 10 of 12 EXHIBIT 7 Page 11 of 12 Hilcorp Alaska, LLC IfileurpAluskit,LLC Weekly Operations Summary Well Name API Number Well Permit Number Start Date End Date MPJ-01A 50-029-22070-01-00 199-111 7/16/2015 8/12/2015 Daily Operations: 8/5/15 - Wednesday MIRU ASR #1. 8/6/15 - Thursday PJSM Continue moving ASR and kill tank. PJSM Blow down well SICP 250 psi SITP 600 psi. RU LRS PT lines line up to reverse circ. Pump 150° Seawater 8.5 ppg 30 bbls down annuluus to catch fluid. 51 bbis gone. Caught circulation 1st tbg volume — 20 bbis all water, turned to oil. Continue pumping 80 bbis until oil returns clean@ 4BPM with 50-60% losses. Pump additional 20 bbis to clean pipe and cable. Annulus on vacuum. Light blow on tubing. Pump 5 BBIs down tubing. New gas system arrived, begin installation and continue RU of ASR. Total pumped 175 bbls total recovery 65 bbls, est oil recovery 50%. RD LRS install BPV. ND Tree NU BOPE . Spot Mud boat, Rig and Tank. Raise Derrick. Run all pump lines and hydraulic hoses. Lower floor to slip height, install containment. AOGCC rep Johnnie Hill on location. Arrival of Total Safety hands. MPU electricians on sight to plan Gas Monitor System installation. Continuing BOPE test, Function test BOPS. Install stairs. RU LRS. PT all lines. Prepare to BOP Test. Test BOPE 250/3,000 psi. Continue alarm system install and calibration. Test all Alarms Low and Hi limits. All audio and visual good. AOGCC concurs. Release Total safety technicians. Techs to Train Electricians before return to ANC. 8/7/15 - Friday PJSM complete BOPE Test. RD LRS test unit. OK on test by Johnnie Hill AOGCC. PJSM intoduction to ESP recovery, assign duties, goals, discuss hazards. Remove TWC well on Vac. RU floor for ESP and Cap recovery, Hang sheave w/snorkel for containment PJSM pre pull. BOLDS. PU to 30 K and pull completion to rig floor. Pump 20 bbis down annulus, decomplete Hanger. Thread spooler snakes for CAP and ESP. Crew change. PJSM and handover individual positions and teams and training. POOH w 2-7/8" ESP Cap completion. 16 jts /base line 6.5 jph. Also recovered 1st GLM. BOLD top pup and XN Top of pump shows no sand or solids. Continue POOH to top of pump 90 jts and 1 GLM recovered average speed -15 jph. BOLD pump assy. 2 bad jts LD from thread damage. Pump failure identifies snap rig off of spacer bushings (Pies to S. porhola) to drive assembly. Motor spins free was not being engaged. Off Load ESP gear ready floor for running cleanout. MU 2-7/8" Mule shoe jt 22.10'. RIH w 2-7/8" L-80 to clean out to TOL. 8/8/15-Saturday PJSM continue RIH w 2-7/8" muleshoe and 110 jts 2-7/8" L-80. Tag up 24' in on jt 110 at 3,507'. Halliburton N2 on location 1000 hrs. Order swivel sub for top drive and Mill and bootbasket. Wait on same, rig service. Work/rock pipe and muleshoe rig cannot spud or rotate in this position. Rig up to reverse circulate 8.5 ppg SW. Pump 24 bbis caught returns at 33 bbis pump failure. MU x-overs. Swivel still at factory settings reset recalibrate. Hook up to top drive, reset torque values. PU 22K SW rotating 27 RPM pass through liner top. (Completion depth 3,512') Rig measured depth 3,507'. Tagged up again 3,529'. Hook up to swivel again. Continue in hole liner top an issue with most all tool jts. Tag fill @ 3,970'. 6K over to pull free. PU is 22K. Wait on LRS Pump Truck. Begin pumping 2 bpm @ 340 psi gained circulation. Increase to 3 bpm 500-800 psi returns fluctuating solids heavy gravel and some sand. 88 bbl in/ 78 bbis out 9% losses 10% oil. Depth is 3983'. Let well equalize. U tubing oil. Pump 1 tubing volume 20 bbls. Make connection wash down to 4015' again heavy particle trash and O/W 58 in /50 out. Work to — 4,018' will not wash off and muleshoe light rotation no progress. Pump 20 bbls down annulus, 20 bbis down tbg. Hole is standing full. Open annular. Check flow. Break Swivel. POOH LD 2- 7/8". EXHIBIT 7 Page 11 of 12 EXHIBIT 7 Page 12 of 12 Hileorp Alaska, LLC IfiluurpAlaska, LLC Weekly Operations Summary Well Name API Number Well Permit Number Start Date I End Date MPJ -01A 50-029-22070-01-00 199-111 7/16/2015 8/12/2015 8/9/15 - Sunday PJSM and resume TOOK LD muleshoe. No liner top evidence on shoe but there is evidence and scarring on the downhole side of the tubing collars. Clean up rig floor, repair tong hose, prepare for conventional circ, spot cuttings tank, send 290 bbis O/W mix to 8-50. MU BHA with 4-1/8" mill. Repair leak on Hydraulic system. PJSM crew change, detailed plans on fluid/N2/ losses. RIH with singles off rack to — 3490'. POOH LD singles. Mill looks OK light groove on OD. LD jt 112 bad pin. MU JT 111 to swivel, work down to TOL. Walked in with light rotation after tag. Work/clean up liner to bottom of extension @ 3,521'. Circ 1.5 x hole volume. B/0 swivel. Pull Stripping rubber. PU new 3.6" BN and 3.5" bootbasket. TOAL 4.65' RIH to 3,490'. Install Stripping head rubber. 8/10/15 - Monday PJSM continue fill DEF and resume RIH through TOL @ 3,507'. Top of liner in good shape. Continue in hole. Swivel up on jt 127. Tag sand @— 4,000'. Rig up to circ, change stripping rubber. PJSM Ref: Ann 106 bbis Tbg 25 bbl Halliburton N2 is preheated. LRS is tied in for pump. Broke fitting on slips trying to B/O single repair same. Losses steadily increasing. Pump rate reduced to 2 bpm @ ^200 psi w spikes to 600psi through bridges on sand plugs. Continue Mill and circ ops. Begin washing down 2 BPM 200 psi 3 bpm @ 500psi connection times start @ 23 minutes. Saver Sub MU is difficult. 4,059' broke thru bridge total loss for short period, slow down rate circ regain. Returns averaging 25 bbis losses per connection. Depth is 4,123'. Circ 30 minutes. Attempt to run a joint without swivel no go. PJSM Crew Change. Resume operations @ 4,281'- 4,409' getting sticky fluctate rate 1-3 BPM and work pipe. Broke through total losses could not regain circulation. BOLD single. Total losses for clean out - 350 bbis SW. RU N2. PJSM PT all lines to 3,500psi. PUMP 100,000 SCF @ 1,000 scfm and 1.25 bpm—1,600psi. Good returns after 16,000 SCF. Plentiful fine sand mix w oil/water. Clean returns for 20 minutes. FCP 1,400psi. Fluid Pumped 125 bbl SW. Recovered 227 bbis. BOLD milling asst'. Sort Floor to Assemble ESP. RD N2 and release. Blow down annulus. Pump 130 bbl SW, started losses after 110 bbis. Rig down pump lines and pump in sub. POOH with cleanout assembly and LD 2-7/8" L-80. 8/11/15 - Tuesday PJSM Crew Change. Rig up for ESP RIH w 2-7/8" L-80 EUE production. Final depth and BHA are centralizer bottom @ 3,496'. Sensor sub 3,491', Motor 3,460, Tandem seals 3,469', Gas separator 3,463', Pump 3,440', XN 2.251D @ 3,428', 5 jts tbg GLM (blank) 3,252', 95 jts tbg, GLM (orificed) 205'. 5 jts tbg. PJSM Install hanger and 4' pup. All depths are 35' Original KB adjusted. Build ESP spice install and check same. Issue Hot work Permit and Meg Check ESP cable. Land Hanger. PU weight 29K. SO 22.3 K. RILD LD landing jt. Install BPV. Rig Down ASR 1. 8/12/15 - Wednesday ND BOPE NU Tree and test 250/5,000 psi RDMO turn well to production. EXHIBIT 7 Page 12 of 12 THE STM E Alaska Oil and Gas 01ALASKA Conservation Com.mission GOVERNOR BILL WALKER Stan Porhola Operations Engineer Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 95503 Re: Milne Point Field, Schrader Bluff Oil Pool, MPU SB J -08A Sundry Number: 315-527 Dear Mr. Porhola: 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Pax: 907.276.7542 www.aogcc.cdaskci.gov Enclosed is the approved application for sundry approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration. A request for reconsideration is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. Sincerely, Cathy P. Poerster Chair 4 - DATED this -J) day of August, 2015 Encl. EXHIBIT 8 Page 1 of 15 RECEIVED STATE OF ALASKA Alj%a 2 7 ?0111 ALASKA OIL AND GAS CONSERVATION COMMISSION APPLICATION FOR SUNDRY APPROVALS A0GCG 90 AAC 99 980 1. Type of Request: Abandon ❑ Plug Perforations ❑ Fracture Stimulate ❑ Pull Tubing E] Change Approved Plan 0 Suspend ❑ Perforate ❑ Other Stimulate ❑ Alter Casing ❑ Fill Clean-out 21 Plug for Redrill ❑ Perforate New Pool ❑ Repair Well Re-enter Susp Well ❑ Other: ESP Change -out 2. Operator Name: 4. Current Well Class: 5. Permit to Drill Number. Hilcorp Alaska, LLC Exploratory ❑ Development Q Stratigraphic ❑ Service ❑ 199.117 3. Address: 6. API Number. 3800 Centerpolnt Drive, Suite 1400, Anchorage AK, 99503 50-029-22497-01-00 7. if perforating: 8. Well Name and Number: What Regulation or Conservation Order governs well spacing in this pool? C.O. 477.05 Will planned perforations require a spacing exception? Yes ❑ No Ed MILNE PT UNIT SB J -08A 9. Property Designation (Lease Number): 10. Field/Pool(s): I ADL0025515 MILNE POINT I SCHRADER BLUFF OIL 11. PRESENT WELL CONDITION SUMMARY Total Depth MD (ft): Total Depth TVD (ft): Effective Depth MD (ft): Effective Depth TVD (ft): Plugs (measured): 1 Junk (measured): 8,495 4,107 8,495 4,107 NIA N/A Casing Length Size MD TVD Burst Collapse Structural Conductor 112' 13-3/8" 112' 112' 3330psl 1,130psi Surface 2,516' 9.5/8" 2,516' 2,476' 5,750psi 3,090psi Production 4,866' 7" 4,866' 3,850' 7,240ps( 5,410psi Liner 3,766' T7777477 8,495' 4,107' 8,430psi 7,500psl Perforation Depth MD (ft): Perforation Depth TVD (ft): Tubing Size: Tubing Grade: Tubing MD (ft): See Attached Schematic See Attached Schematic 2-7/8" 6.5# / L-801 EUE 8rd 4,687 Packers and SSSV Type: Packers and SSSV MD (ft) and TVD (ft): ZXP Liner Top Packer and N/A 4,714 MD / 3,810 TVD and N/A 12. Attachments: Description Summary of Proposal Q 13. Well Class after proposed work: Detailed Operations Program [] BOP Sketch ❑✓ Exploratory ❑ Stratigraphic [] Development ❑✓ Service ❑ 14. Estimated Date for 15. Well Status after proposed work: Commencing Operations: 9/15/2015 OIL ❑Q WINJ ❑ WDSPL ❑ Suspended ❑ GAS ❑ WAG ❑ GSTOR ❑ SPLUG ❑ 16. Verbal Approval: Date: N/A Commission Representative: N/A GINJ ❑ Op Shutdown ❑ Abandoned ❑ 17. 1 hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Stan Porhola Email sporholana hilcorp.com Printed Name Stan Porhoola Title Operations Engineer Signature t — _ Phone 777-8412 Date 8/26/2015 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number: J Plug Integrity ❑ BOP Test u Mechanical Integrity Test ❑ Location Clearance ❑ Other.l S 1 f �C 3V �r'' f ��'"��P - �1 1 /.,j1 , Spacing Exception Required? Yes ❑ No Subsequent Form Required: L Cit APPROVED BY Approved by: COMMISSIONER THE COMMISSION Date: �(��i � ( 'ry'' ("'' Submit Form and Form 10-403 Revised 512015 D ftp r�l�ciaplpi atio �liE,12 months from the date of approval. Attachments In Duplicate EXHIBIT 8 Page 2 of 15 Ilileont Alaska, LLQ Well Prognosis Well: MPU 1-08A Date:8/26/2015 Well Name: MPU J -08A API Number: 50-029-22497-01 Current Status: SI Oil Well [ESP] Pad: J -Pad Estimated Start Date: September 15"', 2015 Rig: ASR #1 Reg. Approval Req`d? Yes Date Reg. Approval Rec'vd: Regulatory Contact: Tom Fouts Permit to Drill Number: 199-117 First Call Engineer: Stan Porhola (907) 777-8412 (0) (907) 331-8228 (M) Second Call Engineer: Paul Chan (907) 777-8333 (0) (907) 444-2881 (M) AFE Number: Current Bottom Hole Pressure: 1,717 psi @ 4,000' TVD (Last BHP measured 11/11/2013) Maximum Expected BHP: 1,717 psi @ 4,000' TVD (No new perfs being added) Max. Allowable Surf Pressure: 177 psi (Based on SBHP taken 11/11/2013 and water cut of 50% (0.385psi/ft) with an added safety factor of 1,000' TVD of oil cap) Brief Well Summary: The Milne Point 1-08A well was redrilled as a Schrader Bluff development well that TD'd at 8,495' and ran a slotted 4-1/2" liner in December 1999. The well was initially completed with an ESP in December 1999. This ESP failed and was replaced in 2007. The recent pump failed June 15, 2015 during a restart, following recent TAPS proration. The most recent casing pressure test performed prior to sidetracking the well was in 1999. A casing pressure test to 1,500 psi was completed in July 2015 during a recent ESP change -out with Nordic #3. No subsidence issues are expected in this well. Notes Regarding Wellbore Condition • Casing last tested to 1,500 psi for 30 min down to 4,700' MD on 7/04/2015. Obiective: The purpose of this work/sundry is to pull the existing failed ESP and run a new ESP. Brief Procedure: WO Rig Procedure: 1. Circulate well with 8.5 ppg seawater down tubing and fill casing. 2. RU crane. Set BPV. ND Tree. NU 11" ROPE. 3. MIRU Hilcorp ASR #1 WO Rig. 4. Test to 250 psi Low/ 3,000 psi High, annular to 250 psi Low/ 2,500 psi High (hold each valve and test for 5 -min). Record accumulator pre -charge pressures and chart tests. a. Notify AOGCC 24 hrs in advance of BOP test. b. Test VBR rams on 2-7/8" test joint. 5. Contingency: (If the tubing hanger won't pressure test due to either a penetrator leak or the BPV profile is eroded and/or corroded and BPV cannot be set with tree on.) a. Notify Operations Engineer (Hilcorp), Mr. Guy Schwartz (AOGCC) and Mr. Jim Regg (AOGCC) via email explaining the wellhead situation prior to performing the rolling test. AOGCC may elect to send an inspector to witness. b. With stack out of the test path, test choke manifold per standard procedure EXHIBIT 8 Page 3 of 15 Well Prognosis Well: MPU 1-08A 110—rp Alaska, LG Date:8/26/2015 c. Conduct a rolling test: Test the rams and annular with the pump continuing to pump, (monitor the surface equipment for leaks to ensure that the fluid is going down -hole and not leaking anywhere at surface.) d. Hold a constant pressure on the equipment and monitor the fluid/pump rate into the well. Record the pumping rate and pressure. e. Once the BOP ram and annular tests are completed, test the remainder of the system following the normal test procedure (floor valves, gas detection, etc.) f. Record and report this test with notes in the remarks column that the tubing hanger/BPV profile / penetrator wouldn't hold pressure and rolling test was performed on BOP Equipment and list items, pressures and rates. g. Pull hanger to surface. (Requires tubing cuts as necessary to free tubing). CBU to displace annulus and tubing with kill weight fluid. 6. if a rolling test was conducted, remove the old hanger, MU new hanger or test plug to the completion tubing. Re -land hanger (or test plug) in tubing head. Test BOPE per standard procedure. 7. Bleed any pressure off tubing and casing. Pull BPV. 8. MU landing joint (2-7/8" EUE 8RD hanger thread) and pull over string weight (previous rig string weight 30k UWT with Nordic #3 does not include block weight of 23K) on tubing hanger to confirm free, 4.5 f P x yet - 3j k- 9. POOH. Lay 2-7/8" tubing on the pipe rack (utilize as workstring). (,a,_ �+ a. Drift ID of 2-7/8" tubing is 2.347". 10. MU 6-1/8" bit and junk baskets. 11. RIH w/ 2-7/8" tubing to liner top packer +/- 4,714' MD. 12. POOH. Lay down bit and junk baskets. Lay down 2-7/8" tubing. 13. MU 3-3/4" mill and junk baskets. 14. RIH w/ 2-3/8" workstring to liner top packer +/- 4,714' MD. 15. Cleanout fill inside screens down to PBTD +/- 8,450' MD. a. Min ID is 3.844" at Indicator Subs at +/- 5,768' and 5,787' MD. b. Drift ID of liner is 3.833". 16. Circulate bottoms up x 2 with 8.5 ppg seawater. 17. POOH. Lay down mill and junk baskets. Lay down 2-3/8" workstring. 18. PU new 475 series ESP and RIH with new 2-7/8" 8RD EUE L-80 tubing. 19. Set base of ESP at +/-4,700' MD (Pump intake around +/- 4,660' MD). Land tubing hanger. a. Re -run 3/8" control line w/ clamps down to pump gauge centralizer. b. Re -run heat trace to +/- 3,000' MD. 20. Lay down landing joint. Set BPV. ND ROPE. NU existing 3-1/8" 5,000# tree. Pull BPV. 21. Set TWC. Test tubing hanger to 250/5,000 psi. Test tree to 250/5,000 psi. Pull TWC. 22. RD Hilcorp ASR #1 WO Rig. 23. Replace IA x OA pressure gauge if removed (7" x 9-5/8"). 24. Turn well over to production. Attachments: 1. As -built Schematic 2. Proposed Schematic 3. BOPE Schematic EXHIBIT 8 Page 4 of 15 Milne Point Unit Well: MPU J -08A SCHEMATIC Last Completed: 7/5/2015 11W-1, Ala.ku, MA; PTD: 199-117 Orig. KB Elev.: 65.2'/ GL Elev.: 35.7' (N22E) TD= 8,495' (MD) / TD= 4,107'(TVD) PBTD = 8,495' (MD) / PBTD = 4,107'(TVD) CASING DETAIL Size Type Wt/ Grade/ Conn ID Top Btm 13-3/8" Conductor 54.5 / L-80/ N/A 12.615 0 112' 9-5/8" Surface 40 / L-80 / Btrc. 8.835 0 2,516' 7" Intermediate 26 / L-80 / Btrc 6.276 0 4,866' 4-1/2" Liner 12.6 / L-80 / IBT 3.958 4,729' 5,901' 4-1/2" Slotted Liner 6.2 / L-80 / SLT 3.958 5,901' 8,451' TUBING DETAIL 2-7/8" 1 Tubing 6.5 / L-80 / EUE 8rd 1 2.441 1 0 1 4,687' JEWELRY DETAIL No Depth Item 1 178' GLM 2 4,491' _ GLM 3 4,634' 2-7/8" XN Nipple - 2313 ID: 2.205 no-go 4 4,645' Discharge Head 5 4,646' Pum 6 4,656' Gas Separator 7 4,661' Upper Tandem Seal Section 8 4,668' Lower Tandem Seal Section 9 4,680' _ Motor 10 4,689' 3/8" External Capillary String 11 4,689' Pumpmate & Centralizer/Downhole Gauge: Bottom @ 4,687' 12 4,714' Baker ZXP Liner Top Packer w/ 6' Tie Back (5.25" ID) 13 4,729' Baker 5" x 7" HMC Liner Hanger (4.375" ID) 14 5,776' Baker HMCV Cement Valve 15 5,794' Baker CTC 20' PZP ECP 16 8,451' 4.5" Baker Drillable Pack -off Bushing 17 8,495' 4.5" Baker Drillable Guide Shoe WELL INCLINATION DETAIL KOP @ 1,500' MaxHole Angie = Horizontal OPEN HOLE / CEMENT DETAIL 13-3/8"" Cmt w/ 250 sx of Arcticset I in 24" Hole 9-5/8" Cmt w/ 504sx PF "E", 250 sx Class "G" in 12-1/4" Hole 7" Cmt w/ 220 sx Class "G" in 8-1/2" Hole 4-1/2" Cmt w/ 84 sks Class "G' in 6-1/8" Hole TREE & WELLHEAD Tree 3-1/8" CIW SM Wellhead WKM 11"x 11" 5M, WKM w/ 11" x 3.5" tubing hanger/ NSCT threads top and bottom and 3" CIW H PBV Profile GENERAL WELL INFO API: 50-029-22497-01-00 Sidetracked & Completed by Nabors 22E - 12/29/1999 Recompletion -1/28/2000 Schrader Bluff Recompletion by Nabors 4ES - 4/19/1997 ESP Replacement byNabors 3S - 2/11/2007 Revised By: STP 8/19/2015 EXHIBIT 8 Page 5 of 15 IBlcorp Alaska, LLC Orig. KB Elev.: 65.7/ GL Elev.: 35.7' (N22E) TD=8,495' (MD)/TD=4,107'(TVD) PBTD = 8,495' (MD) / PBTD = 4,107'(TVD) Milne Point Unit Well: MPU J -08A PROPOSED Last Completed: 7/5/2015 PTD: 199-117 CASING DETAIL Size Type Wt/Grade/Conn ID Top Btm 13-3/8" Conductor 54.5/L-80/N/A 12.615 0 112' 9-5/8" Surface 40 / L-80 / Btrc. 8.835 0 2,516' 7" Intermediate 26 / L-80 / Btrc 6.276 0 4,866' 4-1/2" Liner 12.6 / L-80 / IBT 3.958 4,729' 5,901' 4-1/2" Slotted Liner 6.2 / L-80 / SILT 3.958 5,901' 8,451' TUBING DETAIL 2-718" Tubing 6.5 J L-80 J EUE 8rd 1 2.441 1 0±4,687' JEWELRY DETAIL No Depth Item 1 ±178' GLM 2 ±4,491' GLM 3 ±4,634' 2-7/8" XN Nipple — 2.313 ID: 2.205 no-go 4 ±4,645' Discharge Head 5 +4,646' Pump 6 ±4,656' Gas Separator 7 ±4,661' Upper Tandem Seal Section 8 ±4,668' Lower Tandem Seal Section 9 ±4,680' Motor 10 ±4,689' 3/8" External Capillary String 11 ±4,689' Pumpmate & Centralizer/Downhole Gauge: Bottom @ ±4,687' 12 4,714' Baker ZXP Liner Top Packer w/ 6' Tie Back (5.25" ID) 13 4,729' Baker 5" x 7" HMC Liner Hanger (4.375" ID) 14 5,776' Baker HMCV Cement Valve 15 5,794' Baker CTC 20' PZP ECP 16 8,451' 4.5" Baker Drillable Pack -off Bushing 17 8,495' 1 4.5" Baker Drillable Guide Shoe WELL INCLINATION DETAIL KOP @ 1,SOlY _ MaxHole Angle_ Horizontal OPEN HOLE / CEMENT DETAIL 13-3/8"" Cmt w/ 250 sx of Arcticset I in 24" Hole 9-5/8" Cmt w/ 504sx PF "E", 250 sx Class "G" in 12-1/4" Hole 7" Cmt wJ 220 sx Class "G" in 8-1/2" Hole 4-1/2" Cmt w/ 84 sks Class "G" in 6-1/8" Hole TREE & WELLHEAD Tree 3-1/8" CIW 5M Wellhead]WKM 11" x 11" 5M, WKM w/ 11" x 3.5" tubing hanger/ NSCT threads top and bottom and 3" CIW H PBV Profile GENERAL WELL INFO API: 50-029-22497-01-00 Sidetracked & Completed by Nabors 22E - 12/29/1999 Recompletion —1/28/2000 Schrader Bluff Recompletion by Nabors 4ES — 4/19/1997 ESP Replacement byNabors 3S — 2/11/2007 Revised By: STP 8/19/2015 EXHIBIT 8 Page 6 of 15 Milne Point 2015 ASR Rig 1 Knight Oil Tools BOP 11" BOPS Updated 8/19/15 7/8 -5 variables ind EXHIBIT 8 Page 7 of 15 EXHIBIT 8 Page 8of15 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION REPORT OF SUNDRY WELL OPERATIONS 1. Operations Abandon Ll Plug Perforations Fracture Stimulate 0 Pull Tubing ✓ Operations shutdown Li Performed: Suspend ❑ Perforate ❑ Other Stimulate ❑ Alter Casing ❑ Change Approved Program ❑ Plug for Redrill ❑ erforate New Pool [] Repair Well Q Re-enter Susp Well ❑ Other: ESP Change -out ❑✓ 2. Operator Name: 4. Well Class Before Work: 5. Permit to Drill Number: Hilcorp Alaska, LLC Development Q Exploratory ❑ Stratigraphic ❑ Service ❑ 199.117 3. Address: 6. API Number: 3800 Centerpoint Drive, Suite 1400, Anchorage AK, 99503 50-029-22497-01-00 7. Property Designation (Lease Number): 8. Well Name and Number: ADL0025515 MILNE PT UNIT SB J -08A 9. Logs (List logs and submit electronic and printed data per 20AAC25.071): 10. Field/Pool(s): N/A MILNE POINT / SCHRADER BLUFF OIL 11. Present Well Condition Summary: Total Depth measured 8,495 feet Plugs measured NIA feet true vertical 4,107 feet Junk measured NIA feet Effective Depth measured 8,495 feet Packer measured 4,714 feet true vertical 4,107 feet true vertical 3,810 feet Casing Length Size MD TVD Burst Collapse Conductor 112' 13-318" 112' 112' 3,730psi 1,130psi Surface 2,516' 9-5/8" 2,516' 2,476' 5,750psi 3,090psi Production 4,866' 7" 4,866' 3,850' 7,240psi 5,410psi Liner 3,766' 4-1/2" 8,495' 4,107' 8,430psi 7,500psi Perforation depth Measured depth See Attached Schematic feet True Vertical depth See Attached Schematic feet Tubing (size, grade, measured and true vertical depth) 2-7/8" 6.5# / L-80 / EUE 8rd 4,602' 3,776' Packers and SSSV (type, measured and true vertical depth) ZXP Liner Top N/A 4,714'MD 13, 81 0'TVD NIA 12. Stimulation or cement squeeze summary: N/A Intervals treated (measured): NIA Treatment descriptions including volumes used and final pressure: N/A 13• Representative Daily Average Production or Injection Data Oil -Bbl Gas-Mcf Water -Bbl Casing Pressure I Tubing Pressure Prior to well operation: 0 0 0 350 224 Subsequent to operation: 58 0 523 230 1225 14. Attachments (required per 20 AAc 25.070.25.071, s 25.283) 15. Well Class after work: Daily Report of Well Operations El Exploratory E] Development ❑✓ Service ❑ Stratigraphic ❑ Copies of Logs and Surveys Run ❑ 16. Well Status after work: Oil LIJ Gas H WDSPL Printed and Electronic Fracture Stimulation Data ❑ GSTOR ❑ WINJ ❑ WAG ❑ GINJ ❑ SUSP ❑ SPLUG ❑ 17. 1 hereby certify that the foregoing is true and correct to the best of my knowledge. Sundry Number or N/A if C.O. Exempt: 315-527 Contact Stan Porhola Email sporhola Cahilcorp.com Printed Name Stan Porhola Title Operations Engineer Signature ` Phone 777-8412 Date 10/19/2015 Form 10-404 Revised 512015 Submit Original Only EXHIBIT 8 Page 9 of 15 Ililcorp ALtKkn,1.LC Orig. KB Elev.: 65.2/ GL Elev.: 35.7' (N22E) TD = 8,495' (MD) /TD = 4,107(TVD) PBTD = 8,495 (MD) / PBTD = 4,107'(TVD) SCHEMATIC CASING DETAIL Milne Point Unit Well: MPU J -08A Last Completed: 10/3/2015 PTD: 199-117 Size Type Wt/ Grade/ Conn ID Top Btm 13-3/8" Conductor 54.5 / L-80 / N/A 12.615 0 112' 9-5/8" Surface 40/L-80/Btrc. 8.835 0 2,516' 7" Intermediate 280/Btrc 6/L- 6.276 0 41866' 4-1/2" Liner Lower Tandem Seal Section 3.958 4,729' 5,901' 4-1/2" Slotted Liner _12.6/L-80/IBT 6.2/L-80/SLT 3.958 5,901' 8,451' TUBING DETAIL 2-7/8" 1 Tubing I 6.5 / L-80 / EUE 8rd 2.441 1 0 1 4 602' JEWELRY DETAIL No Depth Item 1 174' GLM 2 _ 4,395' GLM 3 4,537' 2-7/8" XN Nipple — 2.313 ID: 2.2.05 no-go 4 4,548.7' Discharge Head 5 4,549' Pump 6 4,573' Gas Separator 7 4,578' Upper Tandem Seal Section 8 4,585' Lower Tandem Seal Section 9 4,592' Motor 10 4,600' Centralizer/Downhole Gauge: Bottom @ 4,602' 11 4,714' Baker ZXP Liner Top Packer w/ 6' Tie Back 5.25" ID) 12 4,729' _ Baker 5" x 7" HMC Liner Hanger 4.375" ID) 13 5,776' Baker HMCV Cement valve 14 5,794' Baker CTC 20' PZP ECP 15 1 8,451' 4.5" Baker Drillable Pack -off Bushing 16 8,495' 4.5" Baker Drillable Guide Shoe WELL INCLINATION DETAIL KOP @ 1,500' MaxHole Angle = Horizontal OPEN HOLE/ CEMENT DETAIL 13-3/8"" Cmt w/ 250 sx of Arcticset I in 24" Hole 9-5/8" Cmt w/ 504sx PF "E", 250 sx Class "G" in 12-1/4" Hole 7" Cmt w/ 220 sx Class "G" in 8-1/2" Hole 4-1/2" Cmt w/ 84 sks Class "G" in 6-1/8" Hole TREE & WELLHEAD Tree 3-1/8" CIW 5M Wellhead WKM 11" x 11" 5M, WKM w/ 11" x 3.5" tubing hanger/ NSCT threads top and bottom and 3" CIW H PBV Profile GENERAL WELL INFO API: 50-029-22497-01-00 Sidetracked & Completed by Nabors 22E -12/29/1999 Recom letion —1/28/2000 Schrader Bluff Recom letion by Nabors 4ES — 4/19/1997 ESP Replacement by Nabors 3S — 2/11/2007 ESP Change -out by Nordic #3 — 7/5/2015 ESP Change -out by ASR NS —10/3/2015 Revised By: TDF 10/20/2015 EXHIBIT 8 Page 10 of 15 EXHIBIT 8 Page 11 of 15 Hilcorp Alaska, LLC ,,; Weekly Operations Summary Well Name JAPI Number JWell Permit Number IStart Date End Date MPJ -09A 50-029-22495-01-00 199-114 9/13/2015 10/3/2015 Daily Operations: 9/9/15 - Wednesday No operations to report. 9/10/15 - Thursday No operations to report. 9/11/15 - Friday No operations to report. 9/12/15 -Saturday MIRU Coil Unit. 9/13/15 - Sunday PJSM. Raised lubricator and BOP's. Connected BOPE hoses. LD flow cross off lubricator, made up 5k to 10k xo spool and 10k to 15k xo spool. RU 50bbl freeze protect tank to CT pump. Stabbed injector head onto riser, RU riser wellhead and secured. Offloaded 40bbls of 60/40. Pumped 35 bbls of 60/40 and broke circulation. SD Pump. Lined valves to perform full body Test. Performed shell test 250-3,500psi-test ok. Performed BOPE per AOGCC Reg: Valves 250-3,500psi, Rams 250 3,500psi, Blinds 250-3,500psi and held for 5 mins. Performed drawdown- 0 failures recorded. LD lubricator and injector head SDFN. 9/14/15 - Monday PJSM and discuss job to be performed. ND night ACP, MU injector to lubricator and PU off mass truck. MU CT connector and pull tested to 20k -Test Good. RD lubricator and injector head to BOP's, PT 4,OOOpsi- test good. Circulated 35 bbls of 60/40 of freeze protect out of the coil to the 50bbl open top tank. Opened SSV with fuseable cap, pressured up coil to 500psi and opened well. SITP Opsi. RIH at 50 fpm, rolled over pump. 5bpm at 500'. Continued in hole and tagged pump @ 4,998 CTM, pumped bottoms -up, returns crude, PW and trace of sand. PU 20' then RIH and comfirmed tag at 4,998'CTM. Lost curculation. PU CT 50' and parked. Started ESP and monitored well, no returns or BHP decrease. SD ESP pump. Sl the choke and tried pressuring up the the production tubing with no luck. Confirmed shear valve was ruptured. Open choke back up and POOH with CT. RDMO CT Unit and associated equipment. 9/15/15 -Tuesday MIRU CTU on J-08. EXHIBIT 8 Page 11 of 15 Hilcorp Alaska, LLC ,,;►�,,.,.�►udka,,L�{: Weekly Operations Summary Well Name Aumber Well Permit Number IStart Date JEnd Date MPJ-08A 50-029-22497-00-00 199-117 9/16/2015 10/3/2015 Daily Operations: 9/16/15- Wednesday Held PJSM. Finish RU, PU/MU Injector Head and Lubricator and BOP's. Circulated 60/40 thru coil and lines. Performed Body Test 250-3,500psi. Test ok. Test ROPE as follows: Valves 250-3,500psi, Rams 250-3,500psi, Blinds 250-3,500psi. Function and drawdown. No failures recorded. MU 1-11/16" washout BHA and RIH. Kicked pump in 1.5bpm at 500'. Conitinued in hole to 3,300' with min returns. 40bbls in 2bbis out. With no returns, Discuss plan with Anchorage, continued RIH pumping .4bpm and tagged the Discharged Head at 4,651. Increased rate to 1bpm pumped away 10 bbls back flushing thru ESP. 140 bbls pumped, 8bbis returned. POOH pumping 20 bbls 60/40 freeze protestion. Blow lubricator and lines dry. L/D Injectorhead, Lubricator and BOP'S. Secured well and SDFN. 9/17/15 -Thursday No operations to report. 9/18/15 - Friday No operations to report. 9/19/15-Saturday No operations to report. 9/20/15 - Sunday No operations to report. 9/21/15 - Monday Demob and disconnect. Psi test surface lines 1,000 psi, SITP 100 psi, SICP 250 psi, Blow down well, Reverse circulate 190 bbl 8.5# hot sea water. Pump 30 bbl hot sea water down tbg 68 bbl heavy oil and water return, 84 bbl lost. 9/22/15-Tuesday Pending Report. EXHIBIT 8 Page 12 of 15 EXHIBIT 8 Page 13 of 15 Hilcorp Alaska, LLC Weekly Operations Summary Well Name API Number Well Permit Number Start Date jEnd Date MPJ -08A 50-029-22497-00-00 199-117 9/16/2015 10/3/2015 Dally Operations: 9/23/15 - Wednesday PJSM, Continue RU prepare for BOP test. BOPE test waived by John Crisp 0530 AM by E-mail. PJSM, Test all lines 3,500psi, Test gas detectors Test BOPS, 250/3,000psi, Annular 250/2,500psi. Accumulator draw down test, offload 225 8.54 150° sea water. PJSM, Pump 42 bbl down csg, 150°F sea water, pump 11 bbl down tbg caught psi, hang sheaves, Pick up landing jt, BO lock downs & pull hanger SW 43K. PJSM, BO iandingjt & hanger, POOH, w/ESP, heat trace, and cap. Continue POOH through end of heat trace continue POOH to -450'. 9/24/15 - Thursday PJSM. Continue POOH 11 jts BO/LD ESP motor and pump assy. Close Blind rams LD Baker equipment. Organize floor for standard tubing operations rack 109 jts 2-3/8" PH -6 5.7# P-110, 1 mule shoe 30.24, x -over to 2-7/8" eue 1.45'. Pu MU 2- 3/8" PH6 Mule shoe RIH w 65jts 2-3/8" PH -6 5.7# P-110, 1 mules shoe and 109 jts 3,395.10'-. Change out floor hardware to 2-7/8". PJSM Continue RIH w 2-7/8" to TOL of 4,716' TMD. RIH to 6,567' PU 50 change +/- 5K. Repeat 4 times check drag. Cannot interpret load cell weight indicator. RU pump lines to reverse circ. Pump 9 bbl catch fluid 48 bbl get returns oil, pump 42 bbis cleaned up after 20 bbls total pumped 100 bbls. 28 recovered losses at 70%. Blow down/drain up PU single make connection cannot go any further. LD single rig up to circulate non rotating connection. PJSM RU to reverse circ. previous circ was conventional. Catch pressure at 21 bbis attempt to work down tag is solid@ 6,567'. Pump total 33 bbis 3 BPM at 600 psi. No returns obstruction not washing off. LD 2 singles depth of muleshoe is 6,535'. RU Halliburton N2 to pump down annulus, returns plumbed to pigging tank, JSA P/T all lines to 3,500 psi. Mix 2 drums Baraklean w/ seawater 8.5 ppg temp 100°F. Initial pump rate .5 bpm /500 scf work to 1.25bpm/1500 scf @ —1,300psi pump 1.75 hrs, heavy sand returns, develop leak in downstream connections, SD/SI ops, 107.6 bbls/ 113 mscf away, repair down 27 minutes SITP "'1,150psi. Resume ops 1.25bpm/1000scf @-1,200psi. Off loading seawater, pump total 200 mcsf 207 bbis seawater chase w 50 bbis seawater. Total 4.5" clean is 1,800' total slotted liner clean is 634'. 9/25/15 - Friday PJSM. Blow down N2 pressure. 227 bbls recovered. Tubing light blow annulus at 300psi. Open annulus bleed down. Line up to pump 50 bbis down annulus, after 4 bbis casing pressure climbed to 1,100 psi. Shut down pump begin to bleed off pressure. Pressure bleeding off slow. Discuss w/ pusher and proceed to evaluate. 0915 Operator met co man enroute to pits preceeded by pusher. Disoriented operator explained he had gotten dizzy and fell down stairs and that 2 other men on the pits were down but he had gotten 1 man out. Notified security an dispatched rescue and ambulance a 0915. Mud hopper door was opened from the outside and the pusher was rescued by superintendent and other crew mewbers. Rescue and ambulance medical team arrived and administered air/ firstaid as needed and all 3 individuals were taken to MPU medical center. Operator had shut in the well with the manual valves. Well is secured with annular, manual valves, & TIW. Operations suspended until further notice. Three personnel from incident have been released to work. SICP is 173 psi. 9/26/15 -Saturday Operations on standby. EXHIBIT 8 Page 13 of 15 9/27/15'-Sunday Well is SI and rig Is secured awaiting AOGCC permission to freeze protect well. Investigation continues- safety and Investigation team on location 0800. Break down unnecessary lines and organize location monitor well. AOGCC permission to Freeze protect well. Rig up lines to blow down well, bypassing all lines still in place from N2 operation. Bleed off trapped pressure in choke manifold - 100 psi. SITP 0 psi SICP 640 psi. Bleed off annulus pressure to light blow no fluid in returns. PJSM RU LRS PT lines Pump 65 bbis Freeze protect down 7" annulus. Annulus on vac. Close and lock pipe rams, open annular. Pump 20 bbls freeze protect down tubing tbg on vac. Secure TIW valve. 3 rig crew members working. break down all cellar lines, kill lines choke lines and drain up same to prevent freezing. drain up all lines to return tank. Perform housekeeping and RD halliburton pumping HP hose and hardline. Investigation continues Investigation team returns to site. Night crew resumes schedule. NO WELL WORK. Work on maintenaince and storage facilities. 9/28/15 Monday Operations on standby. 9/,29/15- Tuesday Operations on standby. EXHIBIT 8 Page 14 of 15 EXHIBIT 8 Page 15 of 15 Hilcorp Alaska, LLC Weekly Operations Summary Well Name JAPI Number Well Permit Number IStart Date jEnd Date MPJ -08A 50-029-22497-00-00 199-117 9/16/2015 10/3/2015 Daily Operations: 9/30/15 - Wednesday Approval from the AOGCC to resume operation. Held PJSM, MIRU LRS and tested to 3,000psi-test ok. Pumped 15bbls of 60/40 methanol down tbg broke circulation up the csg to the external 500bbls kill tank. With tbg under balanced with methanol bullheaded 20 bbls of seawater down tbg and monitored tbg on a vac. Resend BOPE test notice with estimated test time. Held PJSM with night crew. Notified by the state that no waiver will be given for Rig avitivties until BOPE test is completed. BO/LD TIW valve, MU/PU Landing 1t, Tbg Hanged with TWC installed and landed, secured hanged with LDS. Prep for BOPE Testing, Performed Shell Test, Function tested BOP'S and gas detection system. Notified Inspector that we are ready to begin testing at 06:00. 10/1/15 - Thursday Held PJSM, Waited on State Inspector to arrive. Prep for BOP Test. Performed BOPE Testing with AOGCC Inspector Chuck Scheve as follows; Valves 250-3,000psi, Rams 250-3,000psi, Annular 250-2,500psi, Gas Detection and Accumulator drawdown test. 1 FP was recorded on C-12. PJSM, Pulled TWC MU landing it and pulled hanger to rig floor BO/LD same. TOH/LD 149 its of 2-7/8" 8rd 105 its of 2-3/8" PH6 and mule shoe using charge pump to keep hole full. PU/MU and serviced new ESP assembly. String cable over sheave, made motor and cap connection. TIH w/new ESP on 2-7/8" 8rd Tbg with xn-nipple and lower GLM (dummy), continued RIH. 10/2/15 - Friday Held PJSM and walk through with change -out crew. Continued TIH with ESP completion. PU Heat Trace at 2,992'. PU top GLM continued TIH w/ ESP completion from Hanger depth, Top of Tool Depths as following: Hanger, Pup, 4 its 2-7/8" L-80 6.5# tbg, pup, GLM @ 174', its tbg, pup GLM @ 4,395', 4 its tbg, XN Nipple @ 4,537', Head @ 4,548', Pump @ 4,549', Gas Separator @ 4,572', Tandem Seals @ 4,577', Motor @ 4,591', Pumpmate @ 4,598', Centralizer @ 4,600', EOC @ 4,602'. Heat Trace Spool was 40' short of 3,000'. Made splice 2' jts down from hanger. Continued splice at report time. 10/3/15 - Saturday Held PJSM and walk thru with crew. Completed Heat Trace splice, Continued TIH w/ESP Completion. PU landingjoint. Install hanger and penetrators, Test cable, Cut and splice cable connector install same. Meg check connector. Land string SW 43K up 41k down. Run in lock down screws. Set BPV. RDMO ASR 1 and associated equipment and stacked on A Pad. ND BOP's and NU Production Tree and tested-ok. Well transferred over to production. 10/4/15 - Sunday No operations to report. 10/5/15 - Monday No operations to report. 10/6/15 -Tuesday No operations to report. EXHIBIT 8 Page 15 of 15 n Nikon M.A.. IAA Hill CORP ALASKA, LLC- INTERNAL INC1111FINIT INVF PART 1: GENERAL INFORMATION NAME OF EMPLOYEE INVOLVED: ASR Rig Integrated Well Services Crew REGION: Alaska North Slope FIELD: Milne Point Unit COMPANY: Integrated Well Services POSITION TITLE: Operators (2) and Tool PusherSUPERVISOR: Owner EMPLOYMENT STATUS: ❑P/T NF/T ❑TEMP CONTRACTOR GENDER: NM ❑F TYPE OF INCIDENT: N INJURY ❑ SPILL ❑ PROPERTY DAMAGE PART 2: DESCRIPTION OF INCIDENT DATE OF INCIDENT: 9/25/2015 TIME EMPLOYEE BEGAN WORK: 1X12:00 NA.M. and 2X06:00 NA.M. TIME OF INCIDENT: 09:12 NA.M. ❑P.M. ❑UNKNOWN DATE INVESTIGATION BEGAN: 9/25/2014 TIME INVESTIGATION BEGAN: 09:50 NA.M. ❑P.M. AMOUNT OF PROPERTY DAMAGE (IF ANY): N/A INCIDENT OCCURRED: ®INSIDE ❑OUTSIDE CONDITIONS (IF OUTSIDE): ❑CLEAR ❑RAINING ❑SNOWING ❑OTHER: Weather was mild. Temperature was 30 deg. Fahrenheit. JOB ACTIVITY AT TIME OF INCIDENT: Three Integrated Well Services Employees lost consciousness at approximately 9:12 am the morning of September 25`h, 2015 while attempting to bleed pressure off the J-08 workstring by casing annulus. 1.) What happened at the time of the accident? Describe the sequence of events prior to, during and immediately after the accident (attach extra page if necessary): See attached timeline for a detailed sequence of the timing of events associated with this incident The ASR rig was rigged up on the well. A nitrified cleanout had been completed in which nitrogen and seawater was circulated down the backside (annulus) with returns taken off the tubing/work string to an exterior flow back tank. One 50 bbl seawater pill had been successfully pumped following the nitrogen treatment. Employees registered unexpected annulus pressure of just over 1,000 psig on a pressure gauge while beginning to pump the second 50 bbl seawater pill. Employees shutdown pumping operations and began to bleed off the pressure through the choke manifold located in the ASR tank trailer; operator 1 and the tool pusher were in the tank trailer manifold 1 EXHIBIT 9 Page 1 of 5 room performing this activity. Returns were directed to a gas buster and interior tank located inside the ASR tank trailer. Readings taken at the choke indicated pressure was initially at 1,100 psi. At that point the tool pusher left the manifold room. Shortly after, Operator 2 went to the manifold room to communicate with Operator 1 since he could not reach him via radio due to the noise level inside the manifold room from the gas flowing through the manifold. Operators 1 and 2 left the manifold room in order to have a conversation outside the room where they could hear each other. Upon leaving Operators 1 and 2 noted an unusual order, acknowledged to each other sensations of dizziness and agreed to report the conditions. Operator 1 returned to the manifold room and waited outside the room on the landing on the opposite side of the driller's console. Operator 2 went to report the conditions to the tool pusher. The tool pusher was informed of the unusual smell in the tank trailer but it is unclear if the symptoms of dizziness were mentioned. Operator 2 and the tool pusher returned to the tank trailer. The tool pusher immediately entered the tank room through the manifold room in order to open a wall hatch in the rear of the tank room to increase ventilation in the room. Operator 1 and 2 waited in the manifold room or on the landing outside the room. After a brief period of time, Operator 2 entered the tank room to check on the tool pusher. He could not see the tool pusher from the door way so he entered the room and stepped up one step into the room. From there he could see the tool pusher slumped in the back corner of the tank room immediately adjacent to the wall hatch. Operator 2 took a deep breath and started across the tank room to render assistance. Operator 2 made it half way and started to be affected. Operator 2 immediately turned around and just managed to exit the tank trailer. It is presumed he became unconscious upon exiting and slumped down the exterior steps. Shortly thereafter (1 minute), Operator 1 entered the tank room to check on Operator 2 and the tool pusher. When entering, Operator 1 did not notice Operator 2 unconscious on the exterior steps. Same as Operator 2, Operator 1 noticed the tool pusher slumped at the far end of the tank room. Although Operator 1 does not remember doing so, it is believed he closed the choke valve before entering the room since the choke valve was discovered closed immediately after the incident. However, no one remembers closing it. Operator 1 made it all the way across the tank room to the tool pusher and managed to unlatch and partially open the wall hatch. He then repositioned the tool pusher against the exterior wall before starting to feel the affects of the oxygen deficient environment. Operator 1 then attempted to exit the tank room but became unconsciousness somewhere near the exterior threshold. Operator 2 (located on the exterior stairs) regained consciousness shortly after, observed Operator 1 uncoinscious in the exterior threshold, and pulled Operator 1 outside. Operator 1 regained consciousness and Operator 2 went to manual shut in the well and then summoned help. Operator 2 met the Wellsite Supervisor exiting the office trailer on the pad. Supervision initiated a emergency radio call for man down. The Integrated Well Services (IWS) owner arrived on site at this time and immediately determined that the tool pusher was located inside the tank trailer near the wall hatch. The IWS owner opened the hatch from the outside and extricated the tool pusher through the wall hatch. Milne Point personnel nearby responded with available rescue equipment in pick-up trucks, fire trucks and the ambulance. Milne Point Emergency Response/Medical were on location within 10 minutes of the call. All personnel were fully revived on location, treated with oxygen, and transported to the clinic for further treatment and evaluation. 2.) What were the employees doing immediately prior to performing the task in which the accident occurred? Bleeding down annulus pressure on J-08 well through a choke manifold. 3.) What object or substance directly harmed the employee/contributed to the event? A low oxygen atmosphere created by the presence of nitrogen. 4.) Please provide any witness statement/ observations available (attach extra page if necessary): Attached. 2 EXHIBIT 9 Page 2 of 5 Driller 1 (131) and Driller 2 (D2) smelled something funny (1) D2 leaves to notify Supervisor (S1) while D1 goes to Rig S1 enters Manifold Room (2) D2 enters Mud Pit (3) and discovers S1 slumped against wall (4) D2 turns back and loses consciousness (5) D1 discovers S1 unconscious and attempts rescue. D1 crawls back out and loses consciousness (5) D2 regains consciousness on stairs (6) D2 drags D1 down stairs (6) D2 goes to BOP room and shuts in well, notifies ASR man down S1 is removed from Mud Pit via pallet door window (7) 5. Incident Pictures WELL, � — Rio Manifold KiU fanif. d ' i ..... ... •. M. i IIS"_ '„ � , . . .. : . Mud Pit . .. : . . .. . . •.. : . .. . .. . : . i - _... .--. 2 .'/ A ;+=Operato,ation1r �Diagram of Pit Trailer Choke and Kill Manifold, taken immediately after incident 3 EXHIBIT 9 Page 3 of 5 PART 3: ANALYZING CAUSE Determine the cause of the accident by analyzing contributing factors. Consider all personnel, machinery and physical conditions present in an effort to find out HOW and WHY the accident occurred. 1.) Describe any unsafe acts that contributed to the accident: See attached Root Cause Analysis 2.) Describe any unsafe conditions and personal factors that contributed to the accident: See attached Root Cause Analysis. 3.) Describe the fundamental accident cause: The gas buster was not operationally ready for receiving gases bled from the well through the choke manifold. The tank trailer was not adequately walked down and valves aligned properly prior to taking returns to the interior tank trailer tanks. 4.) Was the injury/incident caused by employees' willful misconduct, intoxication or intent to injure self or others, or damage property? If so, please explain: No 5.) Was the incident a result of violation of established safety policies? If so, please explain: No. No violations of safety policies contributed to the incident. 6.) Was adequate personal protective equipment provided for the task being performed? Yes, adequate personal protective equipment was available. Was the employee using the PPE appropriately? If not, please explain: Respiratory hazard of low oxygen atmosphere was not recognized as a possible hazard. 7.) Are changes necessary in the operations and procedures pertaining to the task to prevent this type of incident in the future? Yes If so, please explain: See attached Root Cause Analysis 8.) Please discuss any other policies, personal factors or environmental factors that may have contributed to the hazardous condition or unsafe act: See attached Root Cause Analysis C! EXHIBIT 9 Page 4 of 5 9.) After considering the information gathered above, please summarize main contributing factors that led to the accident: ROOT CAUSE # 1: Rig Set-up Procedure Not Properly Implemented/Equipment Not Operationally Ready: The dump valve on the gas buster was left in open position during well bleed down activities. ROOT CAUSE # 2: STOP WORK Authority/Procedure Implementation Less Than Adequate (LTA: There were four recognizable instances where STOP Work Authority should have been implemented: (1) unexpected registering of pressure on backside/annulus; (2) when Operator 1 and Operator 2 were initially affected by the atmosphere in the tank room after minimal exposure. (3) when Operator 2 observed the tool pusher in a non-responsive state; (4) when Operator 1 saw the tool pusher in a non-responsive state Personnel rushed into finding solutions to emergency situations they did not fully understand instead of implementing STOP Work procedures and emergency action procedures. PART 4: CORRECTIVE ACTIONS 1.) What have you done, or what do you recommend changing or modifying, to prevent the recurrence of a similar accident? How will these changes help prevent the contributing factors in Part 3?: See attached Root Cause Analysis 2.) Would specific training curtail future accidents such as this? If so, what kind of training is needed? If not, why? Please explain. Rig Emergency Action Plan training for all Operators. EH&S REPRESENTATIVE COMPLETING INVESTIGATION: Carl A. Jones, Safety Manager SIGNATURE: ead Q. _kggt DATE: 10/1/2015 INJURED EMPLOYEE (if applicable): Click here to enter text. SIGNATURE: DATE: Click here to enter a date. INJURED EMPLOYEE'S SUPERVISOR: Click here to enter text. SIGNATURE: DATE: Click here to enter a date. EXHIBIT 9 Page 5 of 5 Automated Service Rig 1 (ASR 1) 25 September 2015 Incident Investigation Events Sequencing Chart ASR Rig Constructed by Crew trained and Monitor sys. Rig & Crew meets industry Operationally Design Ready Adequate / Adequate / Halliburton N2 clean- ---- ----_ -- out. Leak and pause of ASR Rig Constructed by Crew trained and designed w/new gas deemed qualified to ASR Rig and crew Rangeland Drilling (LEL and H2S ASR arrived at MPU detectors) deployed to Well 5-27 Automation, Inc. in nitrogen) and assembled. Crew JSA, discussed N2. and began first well Alberta, CA training on rig. work 20150531 20150610 20150719 Enclosed mud pit Crew trained and designed w/new gas deemed qualified to monitoring system operate ASR. After S - (LEL and H2S 27, ASR WOs 5 wells detectors) (including J -01A 20150925 06:30 nitrogen) ASR day shift began ASR day shift began Abbreviations: LTA - Less Than Adequate NI - Needs Improvement SPAC -Standards, Procedures & Controls crew change Halliburton in final activities.. Walked stages of N2 clean. down job, reviewed Flowing back to hookup, performed 20150925 06:30 outside tanks. 20150925 06:35 JSA, discussed N2. 20150925 05:30 20150925 06:00 Halliburton finished N2 clean-out. Total 200mscf and 207 bbls seawater pumped. 20150925 06:30 ASR Mobe in and rigASR BOPE tested on J_ up on J -08A. 08A. Witness waived. Commence work over. 20150923 20:00 H20150924 12:00 Halliburton blew downASR crew began well lines, disconnected flowback/blow down truck, stand by on site. of N2 to exterior tanks. 20150925 06:30 20150925 06:35 27 mins after 133 mscf. ASR night shift on duty. Flowback hardlined to exterior tanks. 20150925 02:30 EXHIBIT 10 Page 1 of 5 Tool pusher and OP 1 meet in tank module manifold room to align valves to bleed pressure from annulus to tank module gas buster and interior tanks 20150925 - 08:53 Door between tank manifold room and interior tank room is closed. Abbreviations: LTA - Less Than Adequate NI - Needs Improvement SPAC -Standards, Procedures & Controls Tool pusher radioed OP2 from manifold room to open HCR valve to bleed annulus pressure. 20150925 - 08:55 OP2 opened HCR valve. Tool pusher Bleeding pressure from work string to Pressure in tubing OP2 (in drillers console Pumped 50 bbls Completed pumping exterior tanks. noted to be 0 psig. Pumped seawater via ASR 50 bbls seawater. 227 Observed A P from Annulus reading of 300 g noted immediate me late pump at 3.5 bbls/min bbls recovered in 1,300 000 to psig n i i i i psig (incorrect pressure bump from down annulus exterior tanks annulus. However reading). ASR directed "nothing' to 1,000 check on OP1 pressure reading not to pump 2nd 50 bbls of psig. Ceased pumping. 20150925 06:40 20150925 07:00 indicative of annulus pressure. Was reading trapped pressure between ASR pump seawater 20150925 08:48 20150925 08:50 Reading pressure on and check valve. 20150925 07:00 WSM stated on radio from WSM trailer"I'm confused fellas, let's sit down OPl to follow him back annulus. Noted SO psig and talk" (gas)flowing through room to enter up stairs to drillers Tool pusher and OP 1 meet in tank module manifold room to align valves to bleed pressure from annulus to tank module gas buster and interior tanks 20150925 - 08:53 Door between tank manifold room and interior tank room is closed. Abbreviations: LTA - Less Than Adequate NI - Needs Improvement SPAC -Standards, Procedures & Controls Tool pusher radioed OP2 from manifold room to open HCR valve to bleed annulus pressure. 20150925 - 08:55 OP2 opened HCR valve. Tool pusher OP2 (in drillers console OP2 notes extreme heads to WSM trailer. on rig floor) radios OPi OP2 walks down stairs noise in manifold OP1 started to bleed (in choke manifold to manifold room to room (gas flowing pressure via auto room) to check statu check on OP1 through choke choke to interior tanks. OP1 does not hear cas.l l activities. Passes manifold). Motions for Reading pressure on due to noise of fluid through `8 ft of tank OPl to follow him back annulus. Noted SO psig (gas)flowing through room to enter up stairs to drillers drop within minutes. choke manifold manifold room. console. Both pass through tank room on 20150925 08:56 20150925 08:58 20150925 08:59way out. 20150925 09:00 \ OP1 and OP2 Once HCR opened, I OP2 exposed to tank exposed to tank first time annulus room for -10 pressure was being room for -30 P g i seconds. Noted seconds while read. weird smell. ' J j motioning to go - -- — / outside where they -- could talk. Start of gas bleed off through choke manifold into interior tank EXHIBIT 10 Page 2 of 5 OPl and OP2 felt dizzy and light headed after -45 seconds of exposure to tank room. Had hard time climbing stairs. 20150925 -09:00 Crew recognized "something was not right" OP1 walks through manifold room and enters tank room to check on OP2 and tool pusher. Does not notice OP2 on outside stairs. Sees tool pusher slumped in tank room. Shuts manual choke valve. Makes way to tool pusher and manages to open hatch adjacent to tool pusher. Repositions tool pusher against exterior wall. Gets "wobbly' and tries to get out of tank room. Loses consciousness at outside threshold. 20150925 -09:11 Gas flow through choke stopped. OP2 descends stairs and walks to WSM trailer to find Tool Pusher. OP1 goes back through tank room through manifold room and waits outside on landing to manifold room. 20150925 - 09:03 Workers started feeling better once they got outside to top of steps Door btwn manifold and \ mud rooms closed i Abbreviations: LTA - Less Than Adequate NI - Needs Improvement SPAC -Standards, Procedures & Controls OP2 meets tool pusher in yard outside WSM trailer. Communicates odd feeling and smell. 20150925 "'09:05 i Worker did not recognize hazard and great risk OP2 Regains consciousness on outside stairs . Sees pusher extricated from OP1, drags him down Incident reported to tank room by IWS Mandown call made, stairs. Shuts in well at external agencies; Emergency Response tree with manual initiated valves. Goes to sound clinic for evaluation. man down alarm. 20150925 09:14 20150925 09:20 20150925 10:10 20150925 09:12 20150925 -09:11 OP 2 and tool pusher join OP 1 at manifold room. 20150925 09:07 Tool pusher enters tank room to open hatch to increase ventilation. No alarms sounding in module since monitors did not detect any hazardous conditions; unknown 02 Deficient atmosphere existed 20150925 ^'09:09 Well still bleeding gas through choke manifold to tank room for -13 minutes. room to check on Tool Pusher. Sees him slumped in far corner. Takes deep breath, tries to walk across the room, makes it half way and turns around. Loses consciousness on outside stairs on drillers console side of the tank module. Unconscious tool OP 1, OP2, and tool pusher extricated from pusher received Incident reported to tank room by IWS oxygen on site and external agencies; owner via hatch transported to MPU investigation began opening. clinic for evaluation. 20150925 09:14 20150925 09:20 20150925 10:10 EXHIBIT 10 Page 3 of 5 Automated Service Rig 1 (ASR 1) 25 September 2015 Incident MID and Valve Status at time of Pumping Second 50 bbls of Seawater— 0848 hrs 7 6 5 A F Status of valve +Y ® Valve open — -- -- -- -- -- — C7 Valve closed Valve status obtained through Q interviews, no photo evidence — — — i— `------J of valve status at 0848 hrs on 25 September 2015 i I I C I I L , MRM ! mw AC A40i B � I I orsmc rr � 80' I suu I nA B xt2a stied ws � I _..11ltf ! .r, Step a1F I i A � rxK A mw s Fa n MPU GEN PROCESS 'PIPING 6 INSTRUMENT DIAGRAM - ASR -1 RSC inc -PI-1400-O06XR QO W1 EXHIBIT 10 Page 4 of 5 Automated Service Rig 1 (ASR 1) 25 September 2015 Incident MID and Valve Status at time of Incident - — 0856 hours, Started to Bleed Annulus Pressure 9 t b 5 2 1S Status of valve O Valve open — -- -- -- -- -- -- -- O Valve closed r I I � MIATfR ITpi � --- —f Yi 3 I I O Not confirmed in photo D I { ti( ----- -----, � r I I I I I I C MW I I Ienr xo� I lj I I mmsss ir. a „ ✓ End ro mve I suo we GIIZf TNN A Pk0. .ami - A aweo rn es aemr m w 5 rawm Ma w - i¢ - ew.c er cvrm n a« _ ""®` omma� �M ric aw a P" i� MPU CED! PROCESS PIPING h INSTRUMENT DIAGRAM M, ASR -1 RIG xoE r. _r rer r, re t PI MCO -00G OG ©D1 8 7 EXHIBIT 10 Page 5 of 5 September 25, 2015 Incident Root Cause Analysis (RCA) Comprehensive List of Causes (CLC) ACTIONS 1. 1-4 Operation of equipment without authority a. Decision to bleed pressure through the gas buster to the interior tank room tanks was not made by Wellsite Supervisor. 2. 2-1 Improper use of equipment a. Job was not walked down prior to initiating the bleed off of pressure through the gas buster. b. Practice on the rig was to take returns which may contain nitrogen to outside bleed tank, not through gas buster to internal tank room tanks. c. "Open" dump valve on gas buster was not correct operational practice and did not allow the gas buster to operate as designed and vent all gas to the atmosphere outside the tank room. 3. 3-1 Lack of knowledge of hazards present a. First crew member entered tank room assuming there was no risk as no alarms were noted. Explosive atmosphere and H2S sensors do not alarm on N2 or low oxygen. Crew members did not understand the technical capabilities of the atmospheric monitors. 4. 4-1 Improper decision making or lack of judgement a. Wellsite Supervisor and IWS personnel believed the pressure noted when beginning to pump the second 50 bbl water pill was indication of pumping into closed system, against a closed valve, or against a plug. Wellsite Supervisor and IWS personnel did not recognize that a check valve prevented the pressure gauge being monitored from reading annular pressure. The check valve was appropriately placed for the N2 scope of work. However, the pressure indicator was reading pressure between the ASR pump and the check valve (-300 prig ). The check valve was pumped off seat when the pump discharge pressure reached the shut-in casing pressure which was over 1000 psig. b. Crew members ceased pumping activities but did not shutdown the job and reassess the situation when pumping pressure increased rapidly to over 1000 psig. c. Crew members did not associate the noted pressure increase with the nitrogen cleanout pumped earlier. d. Crew members decided to bleed off what was presumed to be trapped pressure due to pumping against a closed valve or plug. e. Crew members continued to bleed off pressure when it became apparent gas was being bled off rather than the expected fluid. EXHIBIT 11 Page 1 of 2 Conditions 5. 5-5 Inadequate warning systems a. Alarm system did not alarm on low oxygen or N2. Crew members were familiar with operation of the alarm system, but did not understand the technical capabilities of the atmospheric monitors. Personal Factors 6. 2-1 Fatigue a. Wellsite supervisor was operating with minimal sleep in previous 40 hours which may have resulted in delayed decision making and lack of direct supervision of activities. Job Factors 7. 15-6 Inadequate communication methods a. Operator 2 (in driller's console) or anyone else could not communicate with Operator 1 (in tank module manifold room) due to noise in manifold room. CLC CORRECTIVE ACTIONS 1. Have replaced Wellsite Supervisor. We will additionally now have a day and night supervisor for future well work. (1 and 6a.) 2. All Integrated Well Services employees onsite have been retrained in the proper use of the gas buster.(2) 3. Prior to any change in well operations, the job will be discussed and all lines walked down. (2a and 2c) 4. All future nitrogen job set ups will include hardline from both the annulus and work string to the external flow back tank. (2b) 5. The dump valve has been closed and locked out and will only be used for cleanout of the gas buster or other operational purposes (2c) 6. All onsite personnel have and will be trained in the technical capabilities of alarm system. (3a and 5a) 7. Stop work authority has been reviewed, emphasizing the importance of stopping all work when conditions change.(4a, b, c and d) 8. Review of alarm system underway to potentially include additional atmospheric monitors. (5a) 9. Day and Night Wellsite Supervisors will be on location. (6a) 10. Radio ear buds embedded in protective ear muffs will be provided to the rig crew (7a) 11. All Hilcorp Operations Engineers and Wellsite Supervisors are expected to assure well procedures match that included in the Sundry Notice. Any deviation will require AOGCC approval. EXHIBIT 11 Page 2 of 2 .Hileorp Alaska, LLC Milne Point Automated Service Rig 1 (ASR 1) Incident Safety - Sharingtheexperience Lessons Learned Summary Incident: ASR 1 Oxygen Deficient Atmosphere Type of Incident: Recordable Location: Milne Point, North Slope, Alaska Date: 25 September 2015. What happened? Three Integrated Well Services (IWS) ASR 1 crew members lost consciousness at approximately 0912 hrs on 25 September 2015 while attempting to bleed pressure off the J-08 workstring by casing annulus. What Went Wrong? 1) Valves were not properly aligned to allow annulus pressure readings. The unexpected pressure bump attributed to a block condition was actually the result of pressuring up against and opening a check valve thereby exposing the pressure gauge to actual annular pressure. 2) Valve alignment and flow path not verified through system resulting in gas buster valve being left open during pressure bleed down. The ASR 1 crew had completed a nitrified cleanout in which 3) Job was not stopped and changed conditions assessed when nitrogen and seawater was circulated down the backside with pressure bleed down operation yielded gas rather than the returns taken off the tubing string to an exterior flowback tank. expected liquid. The ASR 1 crew successfully pumped one 50 bbl seawater pill 4) Employees attempted rescue instead of sounding alarm. following the nitrogen treatment. On the second seawater pill they encountered unexpected pressure on 1 Tthe backside after pumping4.1 bbls. The crew attributed this to a block 10,1R flow condition. The IWS rig crew lined up' the choke manifold to bleed the pressure to the ASR 1 tank module interior tanks via the module's gas buster. They expected to bleed off minimal fluids but instead received nitrogen gas returns. The dump , valve on the gas buster was in the open position which allowed the nitrogen to vent into the tank module `t for -15 minutes instead of exiting the stack of the gas buster. Nitrogen displaced oxygen within the tank module. The module HVAC system was operating as designed at six air changes an hour but was overwhelmed by the amount of nitrogen entering the room through the gas buster dump valve. The first IWS employee entered the tank module and lost consciousness while attempting to open a rear wall hatch to increase ventilation. The second and third IWS employees were overcome by the oxygen deficient environment while attempting to extricate the first employee, but were able to exit the room before losing consciounsess. When the second and third IWS employees regained consciousness, they immediately shut in the well and activated emergency response. Another IWS crew member opened the rear wall hatch and retrieved the first IWS employee. Milne emergency response were on scene within minutes of receiving the call. All personnel were administered oxygen and recovered fully. 5) Atmospheric hazard was not recognized. The crew did not realize the installed atmospheric alarms would only detect H2S and flammable vapors. They were not designed to detect N2 or low oxygen. In the absence of the alarms, they assumed the atmosphere was safe. 6) Radio comms was difficult in a high noise area (noise due to nitrogen gas flowing through choke manifold). What Went Well? 1) Third IWS employee shut manual choke valve prior to entering room. 2) Room HVAC operated as designed and provided sufficient air changes to prevent a fatality. 3) Milne emergency response was immediate and effective. Learningsto share 1) Walk down valves and lines as part of JSA and crew changes. 2) Immediately stop work and reassess when conditions change or unexpected events are encountered. 3) Train all personnel not only in the operation, but also in the technical capabilities of the installed safety systems (e.g., atmospheric monitors). 4) Use appropriate communication devices in high noise areas. 5) Identify, mitigate and communicate potential hazards prior to working with nitrogen. Integrity, Urgency, Ownership, Alignment, Innovation EXHIBIT 12 Page 1 of 1 Service, Inc, Dail Tail ate Meetin / Job Safe Anai sis JSA Form Com n Re resentative:ees Stnature;Re resenative PhoneM: irateliWell omanAttendees S9 nature: t0 6 11 12 Check I Check Check Hazards A p(icabte HazardsApplicable Hazards Applicable. (1 Pinch POWs 1{13)Lock out T out (25 Tem Extremes (2 Electrical 14 PPE 26 High Winds Js {3) Elevated 7 sue ded I0T , (18) SpWal WE Required (27) Communlcagan (4) Hot Work permit I 100pressureTe5ti'a (28) RotEquipment 5) Confined Spars En 07' (17 Slick7UnownsuAaces OTHER:: 6) Equipment Handling 6 Dis nd (18) DriOng Conditions2g ' 7 S.muitancous o moons (18) Wontin of Hei hts 30 8 Stared Pressure Systems (..� (20) Short ServirA Employee 31y (9) H' h Noise Levels - (21) House Keeping 1/ 32 10. Hes Lihin 22) Mobile Eqqpmmt 33) 11 Ttaffic Patterns around Rig (23) 3rd Party work 3q (12 Tdppin hazards (24 Des' nated Areas amokirq. _ Job Ste s f Equipment Tools, 8 Material i PPE Hazards Controls {1 y rFr rtl Geu— ;nca �a . .. '^ri-•.. 1 h'IG 6r--6 Jeah �Q,p.� JYerJS /.-nolle Ui^y ''�Ynci �, Ce. C}' •W/f. ESC ow CL. P°E� Coe >�� .SSJ rT not o8 Et trfi � � way got O�ef�fuai <oadg - S SOP S reviewed Tail to f PreJob Meetin ° Eme enc # Su ervisor lame• Phone# s A EXHIBIT 13 Page 1 of 2 Integrated Well Service, Inc. Dail Tail ate Meeting I Job Safety Analysis JSA Form Date: Time: Com anyRepresentative: Re resenative Phone #: _ Attendees Signature: Com an Attendees Signature: Company 1) 2) 3) 4 5 6 Hazards Check Ap licable g W5 9 10 111 12 Check Check Hazards Applicable Hazards Applicable (1) Pinch Points (13) Lock Out Ta Out 25 Temperature Fxtremes (2) Electrical 14 PPE ✓' 26) High Winds t-- /'3) '3)Elevated! sus ended loads 15 Special PPE Required (27) Communication 4 Hot Work permit S Confined Space Ent (16) Pressure Testn ___ (28 RotatingEquipment 17 Slick/ Uneven surlaces ��/' OTHER: '6 Equipment Handling & Disjointing (18) Drivinq Conditions (29) 7 Simultaneous operations 19 Working at Heights 30) 8) Stored Pressure Systems ,1' 20) Short Service Employee 31) (9) High Noise Levels _ 32 (21) Hcuse Keeping 10 Heavy Lifting (11 Traffic Patterns around Ria (22) Mobile Equipment .' (33 23) 3rd Partywork ;f` (34) 12 Tripping hazards 24 Desi nated Areas smokin , := c 35) Site 5 ecific JSA Job Steps / Equipment, Tools, & Material / PPE Hazards Controls Pk M /V' ,ops, ,, t•�„„ n,-�nr,t u —h 6—h -- T. i 0, Ti0, SOP # reviewed Tailgate J Pre -Job Meeting Emergency # ISupervisor Name: I lPhon.t EXHIBIT 13 Page 2of2 EXHIBIT 14 Page 1 of 1 — • JOB LOG 9"o 0922 TICI(ET DATE 0912415 CilCel N.E.6 EMPLOYEE NU/IBER LANAI COUNTRY Alaska N.E.6 EMPLWeEE NAME rAf6TATE COUIRY Ala ka North Slope Borough p6L DEPARTMENT 1450 ODATION a AFU 1662207 COMPM_/YY 14 Purnpino REP/PHONE Work over Milne PointAFELL 3535 2 N2 purnping LOW" Date Time N2 VOLUME NES GAL NR Job Description / Remarks SAFETY 09/24/15 15:30 113epart with Pumper# 11280516 with 2,499 gal. 18:00 X Arrive on location; Safety meeting; Spot Equipment. Day2 09/25/15 0:02 Rig up 2:00 Cool Down 2:10 X Safety Meeting 2:30 Pressure Test to 3,600 psi 2:40 Online 500 scfm; 140 psi 2:41 750 scfm; 275 psi 2:46 1,000 scfm; 677 psi 2:67 1,200 scfm; 936 psi 3:30 1,200 scfn; 1,253 psi 4:30 Offline; N2 hose started to leak. Replaced hose. 4:65 Online 1,000 scfm; 1,181 psi 6:30 1,000 scfm; 1,280 psi 6:30 2499Wine; 1,327 poi. Ft;n-ped 200,000 scf. Pump has 0 gal lett Standby. Rig is pumping 50 bbis fluid to kill the well. 8:00 X Partial rig down. Standby. 11.00 Left location. 15:00 Arrive at yard 2499 Gals used 2 days pumping PF REM02 - 3) EXHIBIT 14 Page 1 of 1 !7 E 8 U � V C MFM� v a m a f o ............................. A OU 9T3 x OW n Yz z 2 Q U V QPoo" ~ a Ol ON _Z ZJ n 6D TU VU x m m O ^ o m u Q 83 N N U d C C_ �C a Y 0 r u 8 U � V C MFM� v a z a f A ............................. 6 z_ O V co � a Ol Q r.. ., g Y o N y Y 0 O Y Y Z < x 9M x R I x C� W H z Y z E f A � 6 z_ O V co m Ol W L) U) - 2 of X a1. 149°34'55"W 149034'50"W 149°34'45"W 149'34'40"W 149°34'35"W 149°34'30"W z WORN _ o r Is IC IG HALLIBURTON N2 UNIT * -� WELL SITE MANAGER OFFICE T BREAK ROOM As Y t a Rear ASR #1 TANK TRAILER PASSENGER SIDE VIEW Valve Front EXHIBIT 17 Page 1 of 1 Front ASR #1 TANK TRAILER DRIVER SIDE VIEW —O—r Rear EXHIBIT 18 Page 1 of 1 EXHIBIT 19 Page 1 of 2 i ■ r 9/25/2015 ASR Rig — CLC Corrective Actions CA# Description ._ CLC#-Respansibie Party Due Date _ Completed Lock the dump valve on the gas buster system in the closed position following the 2014 DONE, Lock and training Alaska Safety Handbook's Energy Isolation Standard. The valve shall be locked in the closed on valve has position using a control lock (white with company name) and tagged with "DANGER" highest 1 level of hazard awareness tag. The Integrated Well Services ToolPusher will be responsible 2c — Immediately been done for control of the lock and will assess all situations prior to removing the lock to orient the upon rig up and valve to a position other than closed current Review and revise the Integrated Well Services SOP for nitrogen cleanouts. Revisions shall DONE, SOP include requiring hardline from both the annulus and work string to the external flow back tank, language directing employees to visually verify the orientation of the gas buster dump wrote and 2 valve prior to initiating flowback activities. This standard shall also be required to review the SOP each time prior to initiating nitrogen activities. The revised SOP will be reviewed and 2b 11/1/15 reviewed.— approved by the HAK company man, HAK Field Foreman, and Integrated Well Services SOP is ToolPusher. lemen Develop a schematic of the ASR #1 Tank Trailer/Manifold Room which identifies all valves and associated equipment to include the gas buster. Once schematic is developed all DONE, Integrated Well Services employees will review the schematic and be trained on proper posters are operation of the manifold and gas buster during a field walk down with the HAK Company posted, all Man and Integrated Well Services Toolpusher. During the walk down all personnel will ( fines are 3 receive a specific briefing regarding the proper orientation of the dump valve (closed) on the 2a,b,c 11/15/15 gas buster along with a detailed explanation of how the gas buster is designed to work and marked with the effects of improper orientation of the dump valve. The review and walk down of all high visual equipment shall be documented and all integrated Well Services employees will sign a roster stickersand once completed. arrow S. Design and produce a poster of the manifold and gas buster systems schematics. Poster should be in detail to allow manifold operators to help trace systems down while walking DONE, 4 down lines prior to flowback and pumping activities. 3 posters should be printed and hung in 2a,b,c —/MPD 11/15/15 posters are the manifold trailer, pusher shack, and company man office. pasted Review the design of the current gas detection system and identify additional equipment to New sensors are be added to the system. This will include oxygen sensing equipment to alarm during oxygen installed, but deficient atmospheres below 19.5% as well as carbon monoxide sensing equipment set to wiringand 5 alarm at 25 parts per million. Equipment shall be installed and function tested after 3a, Sa — / HAK 12/1/15 Programing not finished. All ASR installation and each time the rig performs workover activities. In addition all Integrated Instrumentation employees have Well Services employees and HAK company men supervising the ASR activities will be trained been trained on on the mechanical capabilities and limitations of the gas detection equipment. All trainees system and will acknowledge completion and understanding of the system by signing a training roster to documented. Wiring and EXHIBIT 19 Page 1 of 2 i ■ r Review the pit/manifold trailer ventilation systems capabilities and ensure that ventilationDOne, air system is functioning adequately to exhaust gases as necessary. If the system is adequate system 8 and functioning as designed the number of air exchanges per hour will then be increased 6a TBD 11/1/15 turned to from 6 to 12 exchanges per hour to ensure maximum air flow through the tank trailer, maximum Additional Actions / Lessons Learned. 1. Investigation findings determined that improper decision making or lack of judgment took place while pumping the 2nd fluid pill. (See CLC 4a,b,c,d and la) As an immediate action, stop work authority was reviewed with all Integrated Well Service employees. The review emphasized the importance and expectation to stop work when conditions change and discuss current conditions with Company Man and Tool Pusher before proceeding with the job. It was also emphasized that the discussion should identify hazards associated with the changed conditions, and the mitigations that should be implemented prior to restarting the work activity. 2. During follow up discussion with ASR crew members regarding corrective actions the topic of "Knowledge, Skills and Abilities Competencies came up. Moving forward it is recommended that the HAK Company Man and IWS Toolpusher develop a list of rig equipment and positions for which competency evaluations are required. These competencies could then be generated and used to mentor and sign off employees similar to the TQP process HAK North Slope operators use to qualify for operations positions and progressions. EXHIBIT 19 Page 2 of 2 be maintained on site by the TooiPusher. In the interim of gas detection upgrades, personal four gas monitors will be used by employees performing work activities within the confines of the pit/manifold skid P amming to a place when crew is on days off nrst week in Febuarv. DONE, SOP Develop a restart protocol or SOP for reset/restart of gas detection alarms and HVAC and policy. 6 equipment. It was noted after the investigation was concluded that power interruption to Policy is alarms and HVAC system requires each system to be reset/restarted manually after daily NA 11/15 Zed in '.. checks (maintenance/oiling) of the generator that supplies power to the unit. generator room Procure in ear and over the ear headsets for rig employees working in high noise areas and within the pit/manifold trailer. Headsets shall be intrinsically safe and provide adequate NRR (noise reduction rating). Headsets should be designed to be compatible with currently used Done, ear HAK Motorola radios. Once in place, headsets will be evaluated for effectiveness, durability, plugs are in and ease of use. Once evaluated Integrated Well Services TooiPusher will purchase adequate 8a 11/1/15 use for hands stock to ensure communications can be maintained between employees in high noise in high noise environments. areas. Al Review the pit/manifold trailer ventilation systems capabilities and ensure that ventilationDOne, air system is functioning adequately to exhaust gases as necessary. If the system is adequate system 8 and functioning as designed the number of air exchanges per hour will then be increased 6a TBD 11/1/15 turned to from 6 to 12 exchanges per hour to ensure maximum air flow through the tank trailer, maximum Additional Actions / Lessons Learned. 1. Investigation findings determined that improper decision making or lack of judgment took place while pumping the 2nd fluid pill. (See CLC 4a,b,c,d and la) As an immediate action, stop work authority was reviewed with all Integrated Well Service employees. The review emphasized the importance and expectation to stop work when conditions change and discuss current conditions with Company Man and Tool Pusher before proceeding with the job. It was also emphasized that the discussion should identify hazards associated with the changed conditions, and the mitigations that should be implemented prior to restarting the work activity. 2. During follow up discussion with ASR crew members regarding corrective actions the topic of "Knowledge, Skills and Abilities Competencies came up. Moving forward it is recommended that the HAK Company Man and IWS Toolpusher develop a list of rig equipment and positions for which competency evaluations are required. These competencies could then be generated and used to mentor and sign off employees similar to the TQP process HAK North Slope operators use to qualify for operations positions and progressions. EXHIBIT 19 Page 2 of 2 From: Bo York Sent: Monday, November 30, 2015 10:36 AM To: Alaska NS - Milne - Field Foreman; Cc: Subject: Compliance with Well Work Sundry Procedures - Coil Tubing, ASR, Nordic, Doyon All - We have had issues in the past 8 months with following AOGCC regulations and explicitly following the procedures detailed in our AOGCC approved sundries. We must do better. If we do not, it will impact our ability to continue to operate and develop our fields in Alaska and our ability to continue to grow. In order to meet our goal I drafted the following steps to ensure we develop better procedures and ensure we strictly implement the procedures approved by AOGCC via the sundry process. Our Goal: Utilize the resources and experience in our team to execute well work safely and efficiently, within AOGCC regulations and requirements. Prior to Initiating Well Work: 1. Operations engineer responsible for the well work will develop the procedure with adequate detail to ensure field execution may occur within the steps included in the procedure and all AOGCC requirements are addressed. 2. Regulatory Tech (Tom Fouts) will generate Form 10-403 to accompany the procedure. 3. Operations engineer that developed the procedure will review the procedure with the Field Foremen and Well Site Manager that will be performing the work. Intent is to obtain their comments and input on the steps and to leverage their 20+ years of performing well work. 4. Operations engineer will provide the reviewed procedure and Form 10-403 to the operations manager for review and schedule a peer review meeting with the other operations engineers in town. Typically this meeting will occur on Friday after the AFE review meeting but can be scheduled at any time. Field Foreman and WSMs should also be invited to this meeting. 5. After the changes are incoroporated from the peer review, the operations engineer will initial the Form 10-403 and the operations manager will sign it. 6. The Reg Tech will submit the 10-403, procedure, and all attachments to AOGCC two weeks prior to performing the work. 7. The Reg Tech will track the submittal and let the operations engineer know once approval is received. Work Execution: 1. The operations engineer and WSM are responsible for executing the work. 2. Prior to starting the work, a kick off meeting will be held by the WSM with the rig crew. The entire procedure will be walked through and any special safety considerations will be addressed. The rig crew should understand the procedure and the approved steps. This meeting will be documented on a safety meeting sign in sheet. 3. ANY deviation from the approved procedures will be discussed with the operations engineer and in turn the AOGCC representative. Work will not proceed until the deviation is approved by AOGCC. EXHIBIT 20 Page 1 of 2 4. ANY step or detail not included in the approved procedure but is discovered during well work activities and needs to be added will be discussed with the operations engineer and in turn the AOGCC representative. Work will not proceed until the addition is approved by AOGCC 5. 1 repeat this .... If the step is not included in the approved procedure or if a detail is added/changed, work will stop until the operations engineer notifies the AOGCC and the change/added step is approved. The operations engineer may get verbal approval but ALWAYS followed up with written confirmation via email. This process will be strictly enforced and I need everyone's help and cooperation to ensure we do not continue to have communication problems with AOGCC. Following these steps will lead to better quality procedures, safer operations, and a better run operations team. Go team. Thanks Bo York Operations Manager, Milne Point bvork@Hilcorp.com 907.777.8345 907.727.9247 cell EXHIBIT 20 Page 2of2 From: Chris Kanyer <ckanyer@hilcorp.com> Sent: Saturday, May 02, 2015 2:33 PM To: Subject: Re: I-03 Follow Up Flag: Follow up Flag Status: Flagged Always on top of it.0 Chris Sent from my iPhone On May 2, 2015, at 1:24 PM, @hilcorp.com> wrote: Ha they were already closed! Regards From: Chris Kanyer Sent: Saturday, May 02, 2015 7:28 AM To: Subject: Re: 1-03 I'm not trying to butt in, but please make sure that you notify AOGCC of closure of BOPs due to well control within 24hrs. Looks like you have everything under control. Chris Sent from my iPhone On May 2, 2015, at 5:43 AM, hilcorp.com> wrote: Typo on the update folks forgot the change the subject line. Sorry Regards From: -� Sent: Saturday, May 02, 2015 4:36 AM To: Chris Kanyer; Cc: Alaska NS - Milne - Field Foreman; Alaska NS - Milne - Wellsite Supervisors; Subject: Update J-09 1 EXHIBIT 21 Page 1 of 2 0430 Successfully straddled hole in casing. GP depth was 14' high. Test Annulus to 1500 psi after packer set all good. Upon releasing off packer well immediately started flowing with oil to surface almost immediately. Vented flowed monitored and circulated with no losses. 138 bbls Oil recovered w 138 bbl SW pumped. Surface pressures recorded SITP 50 psi SICP 60 psi. Have ordered 9.2 brine to displace and kill. Moving forward, Kill, POOH, S/L runs x 2 to retrieve bar and plug, run production. Won't begin killing until probably around 0900. Good example of why all casing repairs should be considered. Regards EXHIBIT 21 Page 2 of 2 From: @hilcorp.com> Sent: Saturday, May 02, 2015 6:23 PM To: Regg, James B (DOA) Subject: Re: AOGCC Test Witness Notification Request: BOPE, Nordic 3  MPU I-03 Thanks, engineering wanted to be sure all bases covered. Thanks Jim. Hilcorp Alaska LLC WSM Milne Point Email �@hilcorp.com USA Cell + 1 Rig Office Direct 907 -- From: , "James B (DOA)" <jim.regg@alaska.gov> Reply -To: "Regg, James B (DOA)" <iim.regg@alaska.gov> Date: Saturday, May 2, 2015 at 6:17 PM To: hilcorp.com> Subject: RE: AOGCC Test Witness Notification Request: ROPE, Nordic 3 MPU 1-03 If planned step in your operation report is not required Jim Regg AOGCC Sent from Samsung Mobile -------- Original message -------- From: @hilcorp.com> Date: 05/02/2015 12:31 PM (GMT -09:00) To: "Ogclnspector (DOA sponsored)" <doa.ogc.Inspector@alaska.gov> Cc: "Jones, Jeffery B (DOA)" <Ieff.lones@alaska.gov>,DOA AOGCC Prudhoe Bay<doa.aogcc. prud hoe. bay@ alas ka.gov>, " Regg, James B (DOA)" <iim.regg@alaska.gov> Subject: RE: AOGCC Test Witness Notification Request: BOPE, Nordic 3 MPU 1-03 Utilized Annular BOP for Shut In while waiting to weight up after successful straddle isolation. Weighting up fluid density .5 ppg• Not sure if notification required in this situation. Thanks Regards 1 EXHIBIT 22 Page 1 of 3 From: Ogclnspector (DOA sponsored) [mailto:doa.oec.lnspector@alaska.sov] Sent: Thursday, April 30, 2015 7:03 PM To: -� Cc: Jones, Jeffery B (DOA); DOA AOGCC Prudhoe Bay Subject: Re: AOGCC Test Witness Notification Request: BOPE, Nordic 3 MPU 1-03 Witness waived Chuck Do not reply directly to this e-mail or doa.Ogc.inspectorn,Alaska.g_ov Please reply to AOGCC.inspectors LtMlaska.gov or Doa.AOGCC.Prudhoe.baynAlaska.gov Alternate contact numbers 907-659-2714 (NS office) 907-793-1236 (Jim Regg) On Apr 30, 2015, at 18:46, hilco .com> wrote: Jeff, BOP Test will be 0800 5/1 we are preparing to rig down on J-09 now. Thanks Regards From: Jones, Jeffery B (DOA) [mailto:ieff.iones@alaska.gov] Sent: Wednesday, April 29, 2015 7:47 PM To: ; DOA AOGCC Prudhoe Bay Subject: RE: AOGCC Test Witness Notification Request: BOPE, Nordic 3 MPU 1-03 Please update @ 6 am tomorrow morning. Thanks, Jeff B. Jones Petroleum Inspector Alaska Oil & Gas Conservation Commission N. Slope Ofc: 907-659-2714 Mobile: 907-448-1228 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 Jeff B. Jones at 907-659-2714 or ieff.iones@alaska.aov. From: � [mailto: noreply(Wormresponse.com] Sent: Wednesday, April 29, 2015 7:39 AM To: DOA AOGCC Prudhoe Bay Subject: AOGCC Test Witness Notification Request: BOPE, Nordic 3 MPU I-03 EXHIBIT 22 Page 2 of 3 uestion Answer Type of Test Requested: BOPE Requested Time for 04-30-2015 8:00 AM Inspection Location Nordic 3 MPU I-03 Name - E-mail IMIJ12hilcorp.com Phone Number (907)- Company Hilcorp we should be moving off J-09 tonight, this is a best guess today Other Information: could go really well, but there are possible glitches. Thanks for the patience. Will update again when we land tubing. Submission ID: 306131130242441965 3 EXHIBIT 22 Page 3 of 3 • • Pressure Test Procedures Set Your Kick -Outs Your kick -outs are located on your Uni-Pro II screen. To get to the kick -out page.... 1. Press "--", then "5".... To set the kick -outs.... 2. Press "Menu 3", then "Menu 4" for the left side. 3. Enter desired pressure & press "Enter". 4. Press "Menu 8" for the right side. S. Enter desired pressure & press "Enter". 6. Press "--", then "3" to return to main pumping screen. Test Your Kick -outs 1. Set your kick -outs for 500 psi. 2. Open your prime -up & start stroking your pump. 3. When your saturation falls below 10 psi, close your prime up valve. 4. When your pressure reaches 500 psi, your pump should kick -out. 5. Open up your prime -up to relieve pressure. Pressure Test Iron 1. Set your kick -outs for 1000 psi over max pressure. 2. Walk your lines & ensure your to-torc valve at the end of your line is closed, your blow down is closed & both autoclave bleeder tees are closed. 3. Clear the ground of all personnel & announce that pressure testing will commence. • 4. Once the ground is clear & all valves have been verified, start priming your pump. EXHIBIT 23 Page 1 of 3 • 5. Open discharge valve & start to close prime -up valve as saturation starts to fall. 6. When saturation drops below 10 psi, close in prime -up valve all the way & run pump at 500-600 scf/m until you reach your desired pressure. 7. Turn off rate control knob, open prime -up & close discharge valve when pressure test is complete. 8. Walk the line listening for leaks & run an empty glove over each union to check for leaks. 9. If no leaks are found, bleed off the pressure & return to the pump. 10. If leaks are found, bleed off pressure, fix leaks & repeat last step. NOTE- For winter operations, leave discharge valve open. This will prevent freezing closed. EXHIBIT 23 Page 2 of 3 E N2 Pumping job Procedure Pre- Job 1. Start generator 2. Start engine, open vents 3. Open blow down to condition the N2 4. Rig up Job 1. Cool down cold ends, open both isolation valve and suction valves 2. Open prime up valve 3. Close road relief valve 4. Close blow down, open pressure builder valve. 5. Set kick outs 6. Pressure test 7. Get saturation down before pumping 8. Open isolation valve to entry point 9. Open discharge valve 10. Close prime up valve 11. Bring rpms up to desired number 12. Bring up rate to desired number 13. Bring up hydraulic heat pressure '14. Keep heat at 85 deg 15. Monitor pressure Bring off line 1. Bring rate to zero 2. Crack blow down 3. Close isolation valve 4. Bring hydraulic pressure to zero 5. Bring rpms to idle 6. Close pressure builder 7. Open blow down to bleed pressure off tank Post iob 1. Turnoff engine, generator 2. Close blow down 3. Open road relief valve, rig down EXHIBIT 23 Page 3 of 3 THE STATE of A Z-1LASKA GOVERNOR BILL WALKER December 15, 2015 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 0640 0006 0779 5890 Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 wvvw.cogcc,alcska.gov Re: Docket Numbers: OTH-15-024, OTH-15-025, OTH-15-029, OTH-15-030, and OTH-15- 031 Notices of Proposed Enforcement Action — Informal Review Dear Mr. Wilkins: As part of the informal review process, Hilcorp Alaska, LLC (Hilcorp) has the opportunity to submit documentary material and make written and oral statements regarding the Notices of Proposed Enforcement Actions for: o Docket Number OTH-15-024, Rig Operations with Failed Gas Detection System, Hilcorp ASR -1, MPU F-96 (PTD 2081860) o Docket Number OTH-15-025, Failure to Notify of Changes to an Approved Permit, Failure to Maintain a Safe Work Environment, Hilcorp Rig ASR1, MPU J -08A (PTD 1991170); o Docket Number OTH-15-029, Failure to Test BOPE After Use, Nordic Rig 3, MPU I-03 (PTD 1900920) o Docket Number OTH-15-030, Failure to Notify of Changes to an Approved Permit, Hilcorp Rig ASR 1, MPU J-0IA (PTD 1991110); o Docket Number OTH-15-031, Failure to Notify of Changes to an Approved Permit, Nordic Rig 3, MPU J -09A (PTD 1991140). There will be no formal record kept of the review and the review will not involve the presence of counsel, either for the AOGCC or the operator. The informal review is scheduled for February 18, 2016 at 10:00 a.m. in the AOGCC's Anchorage office located at 333 West 7`h Avenue. Copies of all written submissions and summaries of any oral statements planned by Hilcorp should be provided to the AOGCC no later than January 29, 2016. Docket Numbers: OTH-15-024, OTH-15-025, OTH-15-029, OTH-15-030, and OTH-15-031 Notices of Proposed Enforcement — Informal Review December 15, 2015 Page 2 of 2 Prior to the January 29, 2016 deadline Hilcorp may request to incorporate any other enforcement actions to be included in this informal review. Pursuant to 20 AAC 25.535 any additional requests must be submitted in writing. Sincerely, /1414elzl� Cathy . Foerster Chair, Commissioner Carlisle, Samantha J (DOA) From: Carlisle, Samantha J (DOA) Sent: Tuesday, December 15, 2015 11:30 AM To: David Wilkins Subject: Informal Review Attachments: Hilcorp Informal Review 021816.pdf Importance: High Mr. Wilkins, Please see the attached regarding an informal review. A hard copy is in the mail. Please let me know if you have questions. Thank you, Samantha Carta Ce 'Exec"utive secretev'y II ;41.aska Od ani;(GaS £'onservation (- tnInussion .. 333Ve,i ; " entte, -Anchorage,;`1.K' scirnrxnt_hux c i,7r(,slc>tualask.i1. CONI -ID NT'IA_I:ITY NOTICE. This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation C..eArlmission (AOCC.(-), `'hate of Alaska and is for 'the sole use of the n7tended recipient(s). It may contain ct)rifideil'ti.at and/'oi" pnv.iletgec2 Rlforilla t1011. The unauthorized review, use or CIISCl06'U.re of such inforinati xi may violate state or federal lacer. If you are all unintended recipientof this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the rrustake in sendingit to you, contact Samantha Carlisle at (907) 93-2223 or Sanlantha.Carlisle:<i?alaska. ov. postal Servicer" . TIFIM MAIL® RFCFIF r`- r` - C3 —0 O O C3 Ln a 0 t1 - '.xtra ServiCes & Fees (check box, add fee as appropriate) ❑ Return Receipt (hardcopy) $ ❑ Return Receipt (elechonic) $ ❑ Certified Mail Restricted Delivery $ ❑ Adult Signature Required $ _ ❑ Adult Signature Restricted Delivery $ Postmark. Here Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Dr., Ste. 1400 Anchorage, AK 99503 aComplete items 1, 2, and 3. a Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Dr., Ste. 1400 Anchorage, AK 99503 If A. Signature ❑ Agent X' ❑Addressee B. Received by (Printed Name C. Date of Delivery delivery address different fr*A item 1? U Yes YES, enter delivery address below: ❑ No EIEC -18 2011)' Domestic Mail Only II I'IIIII I'II For delivery information, visit website at www.usps.com". I I I I I I our r`- r` - C3 —0 O O C3 Ln a 0 t1 - '.xtra ServiCes & Fees (check box, add fee as appropriate) ❑ Return Receipt (hardcopy) $ ❑ Return Receipt (elechonic) $ ❑ Certified Mail Restricted Delivery $ ❑ Adult Signature Required $ _ ❑ Adult Signature Restricted Delivery $ Postmark. Here Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Dr., Ste. 1400 Anchorage, AK 99503 aComplete items 1, 2, and 3. a Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Dr., Ste. 1400 Anchorage, AK 99503 If A. Signature ❑ Agent X' ❑Addressee B. Received by (Printed Name C. Date of Delivery delivery address different fr*A item 1? U Yes YES, enter delivery address below: ❑ No EIEC -18 2011)' s. service Type 0 Priority Mail Express® II I'IIIII I'II Ill I I I I I I I I II IIIIII III ILII III I III d Adult Signature 11Adult Signature Restricted Delivery ❑Registered Mai1T" ❑ Registered Mail Restricted 9590 9403 9910 5223 5231 57 FwrCertified Mail® ❑ Certified Mail Restricted Delivery Delivery &?Return Receipt for ❑ Collect on Delivery ❑ Collect on Delivery Restricted Delivery Merchandise ❑ Signature Confirmation"" 2. Article Number (Transfer from service label) Ired Mail ❑ Signature Confirmation 7015 0 6 4 0 0006 0779 5890 ired Mail Restricted Delivery Restricted Delivery r $500) PS Form 3811, July 2015 PSN 7530-02-000-9053 Domestic Return Receipt Hilcor°p Alaska, LLC November 25, 2015 David Wilkins Senior Vice President Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 9k� - Phone: 907/777-8397 Cath Foerster Fax: 907/777-8580 Cathy dwilkins@hilcorp.com Chair, Commissioner Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501-3572 Re: AOGCC Docket Nos. OTH-15-025; OTH-15-029; OTH-15-030; and OTH-15-031 Notices of Proposed Enforcement Action Dear Chair Foerster, Thank you for your letter dated November 23, 2015. We continue to request an informal review as originally proposed. We want to make sure that you know we take these matters very seriously. Instead of just reviewing this matter internally, we engaged an outside party to be certain that a full and independent investigation of this matter would be conducted. We informed you of Mr. Jamieson's efforts simply to let you know how we are proceeding with the investigation. He has already begun interviewing witnesses and collecting and reviewing documents, and we are facilitating his review by providing him access to all personnel and relevant documents. There were many participants in these events, and the volume of written material to review is substantial. In addition, the notices set out prior events which the Commission has stated are similar to the events cited in the notices. All of these events are subject to investigation. Of course, this increases the time it will take to adequately prepare for an informal review. And now the Holidays are upon us, and several key individuals will be taking leave over the next five weeks, decreasing the pace at which the investigation can be completed. Accordingly, we propose that the informal review occur in mid-February, with our written submission to be due January 29, 2016. We look forward to the opportunity to confer on the matters in an informal setting, as we believe that will be the best forum for an open and full discussion and exchange of information and thoughts. We believe this will allow the Commission to frame a well-informed proposed order. Sincerely, HILCORP ALASKA, LLC David Wi ins Senior Vice President THE STATE GOVERNOR BILL WALKER November 23, 2015 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 0640 0006 0779 5838 Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Alaska Oil a ; ds Conservation Commissiol 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov Re: Docket Numbers: OTH-15-025, OTH-15-029, OTH-15-030, and OTH-15-031 Notices of Proposed Enforcement Action Dear Mr. Wilkins: This letter is the Alaska Oil and Gas Conservation Commission (AOGCC)'s response to Hilcorp Alaska LLC (Hilcorp)'s November 20, 2015 letter regarding various AOGCC enforcement actions pending against Hilcorp. Although Hilcorp's letter requests informal review, by virtue of your reference to retaining counsel and presenting the results of your lawyer's internal investigation in "proceedings," the letter also appears to contemplate a hearing. The AOGCC's informal review process is intended to afford an operator the opportunity to meet with AOGCC staff in an effort to resolve pending enforcement actions. There is no formal record kept of the review and the review does not generally involve the presence of counsel, either for the AOGCC or the operator. Consequently, if Hilcorp desires to proceed by having counsel present the results of his review and investigation, the matter should be set for public hearing. The AOGCC has no objection to addressing all pending enforcement actions at a single hearing. Please advise the AOGCC as to how Hilcorp prefers to proceed. Sincerely, Cathy . Foerster Chair, Commissioner cc: Brewster H. Jamieson, Lane Powell, LLC Carlisle, Samantha J (DOA) From: Carlisle, Samantha J (DOA) Sent: Monday, November 23, 2015 1:05 PM To: David Wilkins Cc: Foerster, Catherine P (DOA); Seamount, Dan T (DOA); 'Regg, James B (DOA) Oim.regg@alaska.gov)' Subject: Response to informal review request Attachments: AOGCC response to informal review request by Hilcorp OTH-15-025, 029, 030, 031_ 11232015.pdf Mr. Wilkins, Please see the attached. Thank you, Samantha Cartisle Exec'tiII've Set ), ytal-y II A(acka C)d alld (.7'as I"i'aI ton (_,onlmis.Qioll ,' .:lnchol"age, .1" o: ),jol 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 Samantha Carlisle at (907) 793-1223 or Samantha.Carlisle(�t,)alaska.Qov. ® Complete items 1, 2, and 3. ® Print your name and address on the reverse so that we can return the card to you. • Attach this card to the back of the mailpiece, or on the front if space permits. A-. ��__-__� i_. _ B. Received by (Printed Name) D. 7s delivery address different IN If YES, enter delivery address ❑ Agent ❑ Addressee C. Date of Delivery item 1? 0 Yes :low: ❑ No Mr. David Wilkins Postal�-TM W Senior Vice President CERTIFIED i o.ECEIPT Hilcorp Alaska, LLC Domestic M Anchorage, AK 99503 COLrl 117 ❑ Priority Mail Express® II r-,- Certified Mail Fee If�l f'`- $ I I I �I ItI�I� ® Extra Services & Fees (check box, add fee as appropriate) I II �I> ❑ Return Receipt (hardcopy) $ ❑ Adult Signature ® [IReturn Receipt (electronic) $ _ Postmark ® ❑ Certified Mail Restricted Delivery $ Here C3 ❑Adult Signature Required $ E] Adult Signature Restricted Delivery $ ® Postage 9590 9403 0910 5223 5233 58 Certified Mail® ❑ Certified Mail Restricted Delivery Delivery 9 -Return Receipt for ❑ Collect on Delivery Merchandise ❑ Collect on Delivery Restricted Delivery ❑ Signature Confirmationlim ❑ Signature Confirmation 2. Article Number fTransfer from service label) D ® Total Postage and Fees Restricted Delivery r. MDavid Wilkins PS Form 3811, July 2015 PSN 7530-02-000-9053 $ Domestic Return Receipt i Ln Sent To Senior Vice President ED ® $freet and Apt. No., or FO Box No. Hilcor Alaska, LLC r` Crry state; ztP+a ______Anchorage, 3800 Centerpoint Dr., Ste. 1400 AK 99503 ® Complete items 1, 2, and 3. ® Print your name and address on the reverse so that we can return the card to you. • Attach this card to the back of the mailpiece, or on the front if space permits. A-. ��__-__� i_. _ B. Received by (Printed Name) D. 7s delivery address different IN If YES, enter delivery address ❑ Agent ❑ Addressee C. Date of Delivery item 1? 0 Yes :low: ❑ No Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC I(lV 9, 5 2019 3800 Centerpoint Dr., Ste. 1400 Anchorage, AK 99503 3. Service Type ❑ Priority Mail Express® II I'I�III If�l I�I I l l I I I �I ItI�I� III I II �I> II'll ❑ Adult Signature ❑Registered MajlTM Adult Signature Restricted Delivery ❑ Registered Mail Restricted 9590 9403 0910 5223 5233 58 Certified Mail® ❑ Certified Mail Restricted Delivery Delivery 9 -Return Receipt for ❑ Collect on Delivery Merchandise ❑ Collect on Delivery Restricted Delivery ❑ Signature Confirmationlim ❑ Signature Confirmation 2. Article Number fTransfer from service label) ?015 0640 0006 0 ? 7 9 5838 red Mail ed Mail Restricted Delivery Restricted Delivery PS Form 3811, July 2015 PSN 7530-02-000-9053 Domestic Return Receipt i Hilcorp Alaska, LLC November 20, 2015 RECEIVED NOV 2 0 2011,; 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 Cathy Foerster Fax: 907/777-8580 Chair, Commissioner dwilkins@hilcorp.com Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501-3572 Re: AOGCC Docket Nos. OTH-15-025; OTH-15-029; OTH-15-030; and OTH-15-031 Notices of Proposed Enforcement Action Dear Chair Foerster, We acknowledge receipt of the four letters referenced above, dated November 12 and November 16, 2015, providing Hilcorp Notices of Proposed Enforcement Action pursuant to 20 AAC 25.535 ("the Notices"). The Notices express concerns that Hilcorp takes very seriously as part of our commitment to good oilfield practices and safe operations. We will fully address the Commission's concerns. Our goal remains full compliance with the AOGCC's regulations and permits. Hilcorp has retained the services of Brewster Jamieson of Lane Powell, LLC, to represent us in connection with the Notices. We have asked him to conduct a thorough review of the evidence and circumstances that led to the issuance of the Notices, and to present the results of that investigation to the Commission and staff in an informal review. He will be contacting the AOGCC staff in due course with suggestions of timing and potential consolidation of some or all of the Notices in order to address all of the Commission's concerns in a single proceeding. Pursuant to 20 AAC 25.535(c), Hilcorp requests an informal review of the Notices, the opportunity to submit written documentation prior to that informal review, and to make both written and oral statements to the Commission and staff at the informal review. Hilcorp is committed to engaging in this process fully and cooperatively, and we consider full compliance with the AOGCC regulations and permits a priority of the highest order. Sincerely, HILCORP ALASKA, LLC Davi ilkins Senior Vice President cc: Brewster H. Jamieson ® LANE POWELL ATTORNEYS & COUNSELORS BREWSTER H. JAMIESON 907.264,3325 jamiesonb@lanepowell.com November 18, 2015 Cathy P. Foerster, B.S.M.E. Chair, Commissioner Alaska Oil and Gas Conservation Commission 333 W Seventh Avenue, Suite 100 Anchorage, AK 99501-3572 Re: Hilcorp Alaska, LLC AOGCC Docket Nos. OTH-15-025; OTH-15-029; OTH-15-030; and OTH-15-031 Dear Ms. Foerster: The law firm of Lane Powell LLC enters its appearance as attorneys of record on behalf of Hilcorp Alaska, LLC, in the above -captioned four matters, and requests that copies of all pleadings filed in this action be mailed or delivered to its offices at Suite 301, 301 W. Northern Lights Blvd., Anchorage, Alaska 99503-2648. BHJ:lg 1293 87.0002/6491743.1 www.lanapowell.com T. 907.277.9511 F. 907.276.2631 Very truly yours, LANE POWELL LLC I Brewster H. amieson A PROFESSIONAL CORPORATION SUITE 301 301 W. NORTHERN LIGHTS BLVD. ANCHORAGE, ALASKA 99503-2648 LAW OFFICES ANCHORAGE, AK . PORTLAND, OR SEATTLE, WA. LONDON, ENGLAND THE STATE Alaska Oil and Gas ®f LASKA Conservation Commission 1-1 GOVERNOR BILL WALKER November 16, 2015 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 0640 0006 0779 5968 Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Docket No. OTH-15-030 Failure to Notify of Changes to an Approved Permit Hilcorp Rig ASRI MPU J-01 A (PTD 1991110) Dear Mr. Wilkins: 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov Pursuant to 20 AAC 25.535, the Alaska Oil and Gas Conservation Commission (AOGCC) hereby notifies Hilcorp Alaska, LLC (Hilcorp) of a proposed enforcement action. Nature of the Apparent Violation or Noncompliance (20 AAC 25.535(b)(1)). Hilcorp has violated the provisions of 20 AAC 25.507 ("Change of an approved program") while performing workover operations with Automated Service Rig #1 (ASRI) at Milne Point Unit (MPU) well J -O IA. Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)). Hilcorp ASRI commenced workover operations at MPU J -01A on August 6, 2015. Sundry approval 315-459 dated July 30, 2015 authorized Hilcorp to pull a failed electric submersible pump (ESP) and rerun a new ESP completion. As part of the workover procedure, a fill cleanout step was included prior to running the new ESP and 2 -7/8 -inch production tubing. Daily reports for August 7-10, 2015 show the following well work was completed in preparation for the fill cleanout: ESP completion had been removed, a tapered fill cleanout string was run in the well to 4409 feet measured depth, and equipment was rigged up to perform the fill cleanout. Hilcorp references using lease water for circulating as part of the fill cleanout operation, and reports the fill cleanout pumping operations began August 10, 2015. The Report of Sundry Well Operations Docket No. OTH-15-030 Notice of Proposed Enforcement November 16, 2015 Page 2 of 4 for this workover on MPU J-0IA reveals that Hilcorp used nitrogen for the well cleanout prior to running the new ESP completion. Per 20 AAC 25.507 an operator may not undertake a change to an approved program or activity without AOGCC approval. Paragraph (a) of 20 AAC 25.507 further describes the information that must be submitted to AOGCC. To make a change, the well's current condition and proposed change must be provided to AOGCC for review and approval. Sundry 315-459 did not authorize the use of nitrogen for a fill cleanout of MPU J -O IA. As part of AOGCC's information gathering related to the MPU J -08A incident (release of nitrogen injuring three rig workers), Hilcorp states that the use of nitrogen for a fill cleanout is a contingent plan executed only if well conditions warrant.' A contingent plan constitutes a change to an approved permit requiring AOGCC approval prior to implementation. This violation is neither isolated nor innocent and is emblematic of ongoing compliance problems with Hilcorp rig workover operations. Hilcorp's compliance history in conducting hydrocarbon development activities in Alaska includes ongoing failures to obtain necessary approvals; failures to install, maintain, and test required well control safety systems; failures to perform required tests; and use of equipment that is unsuitable for the operating environment. Recent examples of noncompliant activities include: 1) 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). 2) Other Hilcorp Rig Workovers Employing Nitrogen Well Cleanouts — A review of well workovers performed at MPU by Hilcorp-operated rigs reveal two other wells that had fill cleanout operations using nitrogen without AOGCC approval. In the case of MPU J- 0 8A2 the release of nitrogen into an enclosed space resulted in injury to three rig workers. 3) Failure to Report Use of Blowout Prevention Equipment — A rig workover performed with Nordic Rig 3 in early May 2015 encountered the well flowing after running a packer in MPU 1-03 (PTD 1900920). 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. Hilcorp did not test the blowout Hilcorp correspondence dated October 9, 2015 (reference AOGCC Docket 15-025) 2 AOGCC Docket 15-025; Notice of Proposed Enforcement Action dated November 12, 2015 Docket No. OTH-15-030 Notice of Proposed Enforcement November 16, 2015 Page 3 of 4 prevention equipment used for well control prior to reentering MPU I-03 to run the ESP completion.3 The disregard for regulatory compliance is endemic to Hilcorp's approach to its Alaska operations and virtually assured the occurrence of these noncompliances. Hilcorp's conduct is inexcusable.4 Proposed Action (20 AAC 25.535(b)(3)). For violating 20 AAC 25.507 the AOGCC intends to impose a civil penalty on Hilcorp under AS 31.05.150(a) in the amount of $75,000 for changing the work procedure in Sundry approval 315- 459 — performing the cleanout of MPU J -01A using an unapproved contingent plan (nitrogen). Hilcorp's ongoing history of performing work in violation of approved permits or management - of -change protocols, its history of compliance issues and the need to deter are additional factors in the AOGCC's analysis. 5 In addition to the imposed civil penalty, AOGCC intends to require Hilcorp to provide - a detailed description and example of its regulatory compliance tracking program; - written management of change procedures that correct the violations noted in this enforcement action; - a detailed written explanation that describes how Hilcorp 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 l lt" 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 '20 AAC 25.285(1)(2) and (f)(8) 4 Other Order 80 5 AS 31.05.150(g) requires AOGCC to consider nine criteria in setting the amount of a civil penalty. Docket No. OTH-15-030 Notice of Proposed Enforcement November 16, 2015 Page 4 of 4 after an informal review or hearing, the AOGCC is not limited to ordering the proposed action described herein, as long as Hilcorp received reasonable notice and opportunity to be heard with respect to the AOGCC's action. Any action described herein or taken after an informal review or hearing does not limit the action the AOGCC may take under AS 31.05.160. Sincerely, Cathy P. oerster Chair, Commissioner cO Domestic Mail Only .A Er For delivery information, visit our website at wwwwsps.como `.' I 5 - ...m r a e tZ Er- EZ $ Certified Mall Fee Sent To rt $ r` _______________ 3800 Centerpoint Dr., Ste. 1400 ._ Extra Services & Fees (check box, add fee as appropriate) crry, state, ZIP+4® ❑ Return Receipt (hardcopy) $ ..-� ❑ Return Receipt (electronic) $ Postmark ❑ Certified Mail Restricted Delivery $ Here ❑Adult Signature Required $ E3 E] Adult Signature Restricted Delivery $ O mayo I $ ...� a Total Postage and Fees Mr. David Wilkins Ln $ Senior Vice President - Sent To '_3P E3 Street and A f Hilcor Alaska, LLC o No., or PO Box IVp r` _______________ 3800 Centerpoint Dr., Ste. 1400 ._ crry, state, ZIP+4® Anchorage, AK 99503 ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Dr., Ste. 1400 Anchorage, AK 99503 A. D. Is delivery address differWit IfYES, enter delivery 4ddn CEIVE® 40V 19 2015 y' )LJ Agent f ❑ Addressee G.Xte of Delivery (I �55- item 1? ❑ Yes below: ❑ No 3. SerMe'Me1-r `F ❑ Priority Mail Express® I I'II �I IIII II II II I III I III II I II I II'lll' II III ❑ Adult Signature ❑ Registered Mail ❑ R Adult Signature Restricted Delivery ❑Registered Mail Restricted [KCertified Mail@ Delivery 9590 9401 005? 5 0 71 0132 53 El Certified Mail Restricted Delivery WReturn Receipt for ❑ Collect on Delivery Merchandise 1-1Collect on Delivery Restricted Delivery El Signature ConfirmationT"' 2. Article Number (Transfer from service label) — d Mail ❑ Signature Confirmation 7015 0640 0006 0779 5968 d Mail Restricted Delivery Restricted Delivery >500) PS Form 3811, April 2015 PSN 7530-02-000-9053 Domestic Return Receipt Carlisle, Samantha J (DOA) From: Carlisle, Samantha J (DOA) Sent: Monday, November 16,201S 2:53 PM To: David Wilkins Cc: Foerster, Catherine P (DOA); Seamount, Dan T (DOA); Regg, James B (DOA) Subject: Notices of Proposed Enforcement OTH-15-029, OTH-15-030, OTH-15-031 Attachments: Hilcorp OTH-15-029 Failure to Test BOPE After Use (PTD 1900920).pdf, Hilcorp OTH-15-031 Failure to Notify of Changes to an Approved Permit (PTD 1991140).pdf; Hilcorp OTH-15-030 Failure to Notify of Changes to an Approved Permit (PTD 1991110).pdf Importance: High Dear Mr. Wilkins, Please see the attached regarding Docket Numbers: OTH-15-029, OTH-15-030, and OTH-15-031, Notices of Proposed Enforcement Action. Thank you, s a man tha CarfisCe "�Xectlf'il"e Sizt'J'F?f:ary 11 Ii�JsItiGJ. odaru Ci�.ls C'onset,v��aon t.'cJJrlJnrssicJn fa x) 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 Samantha Carlisle at (907) 793-1223 or Samantha.Carlisle@alaska.�,,ov.