The URL can be used to link to this page

Home My WebLink AboutO 139STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage Alaska 99501-3539 Re: Failure to Test Well Safety Valve System Other Order 139 Noncompliant Safety Valve System Docket Number: OTH-17-055 Hansen Field April 26, 2018 DECISION AND ORDER On December 13, 2017 the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to BlueCrest Alaska Operating LLC (BlueCrest) regarding two Hansen Field wells. The Notice advised that BlueCrest failed to complete a well safety valve system performance test on Hansen H-16 (PTD 2160760) and failed to obtain approval for the alternative closure of the subsurface safety valve in Hansen IA (PTD 2030040). The Notice proposed a $20,000 civil penalty. BlueCrest requested an informal review. That review was held January 9, 2018. Summary of Proposed Enforcement Action: The Notice identified two violations by BlueCrest of 20 AAC 25.265 ("Well safety valve systems"). The first violation occurred April 5, 2016 when Hansen lA commenced production without the approval of an alternate closure for the subsurface safety valve. I The second violation occurred July 6, 2017 when BlueCrest failed to perform a safety valve system performance test on Hansen H-16. The AOGCC proposed payment by BlueCrest of a civil penalty under AS 31.05.150(a) in the amount of $20,000 ($10,000 for each initial violation).2 April 5, 2016 was the initial well safety valve system test as required by 20 AAC 25.265(h)(4), 2 AS 31.05.150(a) provides for not more than $100,000 for the initial violation and not more than $10,000 for each day thereafter on which the violation continues. Other Order 139 April 26, 2018 Page 2 of 4 Informal Review: BlueCrest submitted a written response on January 8, 2018.3 At the January 9, 2018 informal review BlueCrest presented a summary of well operations at Hansen, results of its internal review, and a summary of its implemented and intended solutions to prevent a recurrence of the violations. BlueCrest sought clarification regarding the proposed enforcement but did not dispute the violations. Discussion: 20 AAC 25.265(o) requires: "Unless notice and a hearing are required under (d)(3) ofthis section, upon written request from the operator, the commission may approve (1) a variance from a requirement ofthis section if the variance provides at least an equally effective means ofcomplying with the requirement; or (2) a waiver ofa requirement ofthis section ifthe waiver does not promote waste, is based on sound engineering and geoscience principles, will not jeopardize the ultimate recovery of hydrocarbons, does not jeopardize correlative rights, and does not result in an increased risk to health, safety, or the environment, including freshwater." Safety valve system testing of Hansen IA on March 23, 2017 established a failure of the subsurface safety valve to close in response to low pressure detected in the well's flowline. BlueCrest confirmed that the subsurface safety valve in Hansen IA is not linked to the low- pressure detection device as required by AOGCC regulations but instead closes only on a plant or site emergency shut down. B1ueCrest's failure to request a variance or waiver from the safety valve system regulations violated State regulations. 20 AAC 25.265(h)(4) requires: "A new well requiring a safety valve system may not be operated unless it passes a performance -test not later than five days after placing the well in service."' On July 1, 2017 BlueCrest notified AOGCC of its intent to test the Hansen H-16 well safety valve system "prior to bringing it online" — and the test was scheduled for July 3, 2017. A second notice on July 3, 2017 rescheduled testing until July 6, 2017 due to "operations not progressing as ' Received by email from BlueCrest. The attached letter was incorrectly dated January 8, 2017 A safety valve system "performance -test" includes a function pressure -test of the system's valves and a function. test of the mechanical or electrical detection device. A function pressure -test means to actuate a component and demonstrate its proper functioning and to demonstrate its ability to effect a pressure seal. A function test means to actuate a component to demonstrate its proper functioning without subjecting it to pressure. (20 AAC 25.990) Other Order 139 April 26, 2018 Page 3 of 4 expected." AOGCC deferred witness of the pre -production safety valve system test on July 5, 2017 to coincide with the test that would occur within five days after commencing production. BlueCrest's Operation Log Book entry for July 2-3, 2017 shows BlueCrest function -tested the H- 16 safety valve system on July 2, 2017: "Function tested high and low pressure pilots. SSVs shut at correct flowline pressure and will reopen and latch." BlueCrest has not provided a record of a safety valve system performance test. Hansen H-16 produced without a properly tested safety valve system until the AOGCC-witnessed test occurred on November 9, 2017. BlueCrest's failure to perform the initial safety valve system performance test as required violated 20 AAC 25.265. Mitigating Circumstances: In determining the amount of the penalty, AOGCC has considered the extent to which BlueCrest was acting in good faith in attempting to comply, the extent to which BlueCrest acted in a willful or knowing manner, the need to deter similar behavior by BlueCrest and others similarly situated at the time of the violation or in the future, and BlueCrest's history of compliance issues.5 AOGCC also determined that the failure to conduct the initial safety valve system performance test and the failure to report those test results for the Hansen H-16 safety valve system constitute a single violation. No new mitigating circumstances were presented during the informal meeting or in BlueCrest's response to the Notice. Findings and Conclusions: The AOGCC finds that BlueCrest's actions violated 20 AAC 25.265. BlueCrest acknowledges that it failed to submit, and cannot provide a record of, Hansen H-16 passing a safety valve system performance test within five days of startup. s AS 31.05.150(8) sets forth the criteria for determination of a civil penalty. Other Order 139 April 26, 2018 Page 4 of 4 Now Therefore It Is Ordered That: BlueCrest is assessed a civil penalty in the amount of $20,000 for violating safety valve system requirements found in 20 AAC 25.265.6 If BlueCrest chooses not to appeal this Order the fine must be paid within 30 days of issuance of this order. If BlueCrest appeals, the fine will be held in abeyance until the appeal process is complete. As an operator involved in an enforcement action, BlueCrest is required to preserve documents concerning the above action until after resolution of the proceeding. Done at Anchorage, Alaska and Dated April 26, 2018. Hollis S. French Chair, Commissioner P Cat4 P. Foerster Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. b Penalty amount arrived at considering failure to perform the required safety valve system performance test (and report the test results as required), and failure to request a variance for the alternative closure of the subsurface safety valve on existing Hansen wells as separate initial violations, penalized at $10,000 per violation. Carlisle, Samantha J (DOA) From: Colombie, Jody J (DOA) Sent: Friday, April 27, 2018 8:23 AM To: Ballantine, Tab A (LAW); 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); Earl, Adam G (DOA); Erickson, Tamara K (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Laubenstein, Lou (DOA); Loepp, Victoria T (DOA); McLeod, Austin (DOA); Mcphee, Megan S (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Rixse, Melvin G (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity; AKDCWellIntegrityCoordinator; Alan Bailey; Alex Demarban; Alicia Showalter; Allen Huckabay; Andrew Vanderlack; Ann Danielson; Anna Lewallen; Anna Raff; Barbara F Fullmer; bbritch; bbohrer@ap.org; Ben Boettger; Bill Bredar; Bob Shavelson; Bonnie Bailey; Brandon Viator; Brian Havelock; Bruce Webb; Caleb Conrad; Candi English; Cody Gauer; Cody Terrell; Colleen Miller; Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Danielle Mercurio; Darci Horner; Dave Harbour; David Boelens; David Duffy, David House; David McCaleb; David Pascal; ddonkel@cfl.rr.com; Diemer, Kenneth J (DNR); DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Elwood Brehmer; Evan Osborne; Evans, John R (LDZX); Brown, Garrett A (DNR); George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Gretchen Stoddard; gspfoff; Hurst, Rona D (DNR); Hyun, James J (DNR); Jacki Rose; Jason Brune; Jdarlington Qarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Shine; Jim Watt; Jim White; Young, Jim P (DNR); Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); Jon Goltz; Chmielowski, Josef (DNR); Joshua Stephen; Juanita Lovett; Judy Stanek; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Frank, Kevin J (DNR); Kruse, Rebecca D (DNR); Kyla Choquette; Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Michael Bill; Michael Calkins; Michael Moora; Michael Quick; Michael Schoetz; Mike Morgan; MJ Loveland; mkm7200; Motteram, Luke A; Mueller, Marta R (DNR); Nathaniel Herz; knelson@petroleumnews.com; Nichole Saunders; Nick Ostrovsky; 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; Robert Warthen; Ryan Gross; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly; Sharon Yarawsky; Skutca, Joseph E (DNR); Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Stephen Ratcliff; Sternicki, Oliver R; Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Tanisha Gleason; Ted Kramer; Teresa Imm; Tim Mayers; Todd Durkee; Tom Maloney; 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; Andy Bond; Bajsarowicz, Caroline J; Bruce Williams; Casey Sullivan; Corey Munk, Don Shaw; Eppie Hogan; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Heusser, Heather A (DNR); Fair, Holly S (DNR); Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Keith Lopez, Laney Vazquez, Lois Epstein; Longan, Sara W (DNR); Marc Kuck, Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Melonnie Amundson; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Rachel Davis; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R To: (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); William Van Dyke Subject: Other Order 139 (Bluecrest) Attachments: Other139.pdf Please see attached. Jody J. Co&nn6ie 1U(iCC Special _;<lsslstcant .Alaska oiland (jas Conservation Commission :i West-; `' : lvertue . .fln.rhora e, _Afaska O95or Office: 01071793-1221 Jax: (907) 276-75-12 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC(, State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv.colombie@alaska.aov. Bernie Karl K&K Recycling Inc. Gordon Severson Penny Vadla P.O. Box 58055 3201 Westmar Cir. 399 W. Riverview Ave. Fairbanks, AK 99711 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 1. ------------------------ 2. December 13, 2017 3. December 21, 2017 4. December 22, 2017 5. January 8, 2018 OTHER ORDER 139 Docket Number: OTH-17-055 Background information NOV sent to B1ueCrest B1ueCrest request for informal meeting AOGCC letter scheduling informal review BlueCrest informal review documentation Cosmopolitan Project Safety Valve System Iue est Endrgy January 8, 2017 State of Alaska Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite #100 Anchorage, AK 99501 Re: Docket No. OTH-17-055, Missed Safety Valve System Tests at the Hansen Field Dear Commissioners, BlueCrest Alaska Operating LLC received the AOGCC's notification of violation regarding the safety valve system at the Hansen Pad regarding wells H1AL1 and H16. Well H16 SVS Tests: BlueCrest acknowledges that we failed to submit the results of our performance test on well H16 on July 6, 2017 after the state deferred witness of the test (attachment 1) until a SSSV was installed. A Safety Valve Test Record cannot be found for the performance test performed by an individual who is no longer employed, only an operator logbook entry for the function test performed July 2, 2017 (attachment 2). BlueCrest however does dispute that BlueCrest did not respond to AOGCC regarding this matter on October 251h 2017. Our records show a courtesy email from Phoebe Brooks (attachment 3) stating that Hansen well 3A was overdue for a SVS test report and requested the H3 report with no mention of H16. At the time this well H1AL1 was shut in. Around this same time conversations were held between Guy Schwartz and Alecia Wood notifying her of the missing July 6, 2017 function test and as a result the approval to extend our temporary flow approval with no SSSV on H16 granted November 6th 2017 via email (attachment 4) was contingent upon a state witnessed SVS test to be completed by November 10`h 2017. The test was specifically scheduled, completed and the report submitted to the state in compliance with this request. Cosmopolitan Project Safety Valve System H1AL1 SVS Tests: BlueCrest hereby requests further explanation of the statement that "for the short term the well was allowed to continue production pending resolution of the safety valve system issues." BlueCrest has record of a passing SVS test on March 23, 2017 (attachment 5) with a Deficiency Report from inspector Guy Cook, dated March 23, 2017 (attachment 6) stating the following, "Pressure Pilots do not have set trip pressures or calibration dates attached to them." This deficiency was corrected and documented via email dated March 29th 2017 (attachment 7). BlueCrest has no record that H1AL1's flow approval was short term pending corrections to the system. Note: Guy Cook left the location on March 23 stating a failed test leaving HiAL1 shut in, however after discussion with Lou Grimalde he returned to location and allowed H1AL1 to return to production with the stipulation that we correct the labeling of our pressure pilots in the panel. On May 17, 2017 AOGCC requested documentation of our SVS, and on May 19, 2017 a cause and effect table was submitted to the commission. Also on May 17, 2017 Phoebe Brooks sent the March 23, 2017 SVS Test report to Josh Hall (lead operator) replacing the remarks that both the SSV and SSSV passed with a remark that our SCSSSV did not meet the intent of the regulation. To this Josh Hall replied to Jim Regg that BlueCrest believes we meet the regulation 20 AAC 25.265 as our well is equipped with a fail save surface controlled subsurface safety valve controllable by anyone In the facility via the ESD function, requesting clarification (attachment 8). BlueCrest believed we were in compliance as all inspectors have passed our SVS tests since startup in March 2016. It was discovered after receiving the noncompliance order that Jim Regg did in fact reply to the request for clarification stating that he did not feel BlueCrest had met the intent of 20 AAC 25.265 (h) (12). Neither engineering nor management at BlueCrest received this message, which will be addressed in our corrective actions. Proposed Action: BlueCrest acknowledges that we failed to submit and cannot provide a record of a passing SVS test on H16 within 5 days of startup. All parties in BlueCrest believed this was completed after the witness was waived but we are unable to locate a record. BlueCrest does however dispute that we willfully or knowingly operated in non compliance in our Safety Valve System. We believed our system met the intent of the regulations as our SVS tests have all passed since field start up. Having been told otherwise by the commission via Docket No OTH-17-055 we have already implemented the corrective action to actuate our SSSV on flowline pressure alarms. BlueCrest intends to prevent recurrence of this violation by implementing the corrective action to actuate our SSSV on flowline pressure alarms (completed, attachment 9) and develop a training program as stipulated by the AOGCC to train all operators on the installation, operation, maintenance and testing of well safety valve systems per the AOGCC regulations. In addition, BlueCrest will identify a single point Cosmopolitan Project Safety Valve System of contact for Facility operations, Wellwork and Rig activities to ensure communications from the AOGCC reaching the appropriate parties. BlueCrest safety valve system actuation has been reconfigured to comply with the AOGCC's intent of 20 AAC 25.265 to automatically close the subsurface safety valve no later than four minutes after the actuation of the low pressure detection device installed on each wells flowline. The first SVS test of this new logic passed today, 1/08/18 at 11:00am on Hansen well H-14 as witnessed by inspectorJeff Jones. Regards, Larry Burgess ' V 7lel — Cosmopolitan Project Safety valve System Attachment No 1: Witness of H16 Function test Waived until installation of SSSV. Alecia Wood ---------- Forwarded message ---------- From: Regg, James B (DOA) <jim.reggna.alaska.gov> Date: Wed, Jul 5, 2017 at 3:04 PM Subject: RE: AOGCC Test Witness Notification Request: SVS, Anchor Point To: "nate.johnson[abluecrestenerev.com" <nate.iohnsonnabluecresteneray.com> AOGCC witness is waived; we defer witness until finished with post frac cleanup and SSSV has been installed. We will work with you to schedule the SVS test so it coincides with another AOGCC visit (meter prove; BOPE test) Jim Regg Supervisor, Inspections AOGCC 333 W.7' Ave, Suite 100 Anchorage, AK 99501 207-793-1236 CONFIDENTULMNOTICE: 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 my violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907-793-1236 or iim.rege(aWaskaggy. From: Nate Johnson [mailto:noreolv(aformrmponse.coml Sent: Monday, July 3, 2017 10:26 AM To: DOA AOGCC Prudhoe Bay <doa.aogcc.pmdhoe.bayCa).alaska gov> Subject: AOGCC Test Witness Notification Request: SVS, Anchor Point uestion Answer Type of Test Requested: SVS Requested Time for Inspection 07-06-2017 11:00 AM Location Anchor Point Name Nate Johnson E-mail nate.iohnson((7,�bluecrestenergv.com Phone Number (907)7549582 Company Bluecrest Energy Other Information: Due to operations not progressing as expected, we will like to reschedule the SVS testing for July 06th at 1 lam. Thanks Submission ID: 3749155452023232252 Cosmopolitan Project Safety Valve System Attachment No 2: Operator Logbook Function Test Entry, H16 Search Operation Log Book Date From: 7,Z ',77 Q Dam To: 17/3/2017 Timc Fron90:W u Time To.173:59 Person: 0 Seach emena: 5y$ RCHP4/D0T related e]W swm ClEa-REE+: Results: e� E cvanT,� hese, twe r y C. _. ]. (Wt C: _ Die T, E, la( _ . Z. _ u e F, (n SELer P _ -.. -est --j. E_i3 E'. is « Y °J' "E'r'ESa_'ai 2-] a. 712=27 12:00 G'!':a ."I -;A Al ":5:.?+';I-.r'E"as4:GE��epi..;e a':...__a._s s_; -E: r— it Cosmopolitan Project Safety Valve System Attachment No 3: 10/25/17 H1AL1 SVS email from Phoebe Brooks Alenia wood ---------- Forwarded message --------- From: Brooks, Phoebe L (DOA) <phoebe.brooksw alaska.eov> Date: Wed, Oct 25, 2017 at 10:14 AM Subject: B1ueCrest SVS test report - Hansen To: Joshua Hall <boshua.hallfa bluecrestenergv.com> Cc: "Regg, James B (DOA)" <iim.reae n,alaska. ov> Josh, I was reviewing September reporting (due by Oct. 15t) and I didn't see anything submitted for Hansen I A (the last test was completed in March, with the next 180 test due in September); will you forward the test report? Thank you, Phoebe Phoebe Brooks Statistical Technician II Alaska Oil and Gas Conservation Commission Phone: 907-793-1242 Fax; 907-276-7542 CONFIDENTI4I.17Y 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 Phoebe Brooks at 907-793-1242 or phoebe.brooks@alaska.gov. Cosmopolitan Project Safety Valve System Attachment No 4:11/06/17 Temporary Flow Configuration Approval, State Witnessed SVS test request H16 Alec[a Wood From: Schwartz, Guy L (DOA) [guy.schwartz@alaska.gov] Sent: Monday, November 06, 2017 2:35 PM To: Alecia Wood Cc: Regg, James B (DOA) Subject: RE: H-16 Temporary Flow Configuration Alecia, The AOGCC will extend to flowback period with temporary piping for another 30 days to December 9", 2017. Part of the approval requires that H-16 perform a witnessed SVS test by the end of this week (Nov 10") After talking to you it sounds like the well would not pass a No -Flow test at this time due to rising PGOR. Bluecrest should come up with alternative to a velocity string to maximize rate and still allow a functioning ScSSV in the near future. This is another issue that can be addressed once the well performance has been dialed in. Hopefully your polymer treatment will be successful on this well. Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office CONFIDENTIALITY NOTICE: Inis e-mail message, Including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), Stole of Alaska and is for the sole use of the Intended recipfem(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 on unintended recipient of this e-mail, please delete if, without first saving or forwarding It, and, so that the AOGCC Is aware of the mistake In sending if to you, contact Guy Schwartz at (907-793-1226) or (Guv.schwartz®oloska.aovI From: Alecia Wood [mailto:alecia.wood@bluecrestenergy.coml Sent: Monday, November 06, 2017 12:06 PM To: Schwartz, Guy L (DOA) <Ruv.schwartz@alaska.aov> Subject: RE: H-16 Temporary Flow Configuration Guy, We performed the cleanout run, losing some fluid to formation despite our attempt at being underbalanced. We ran in hole to begin our N2 lift on 11/03 and are currently flowing back on H14. My timeline below remains my best guess, complete the flowback on 11/17, move to H1AL1 to unload it if we can, then treat H16 with the polymer enzyme early the week of the 20". Should the commission be agreeable, I am requesting another 30 day extension for H16's temporary flow configuration to evaluate the production rates after the stimulation treatment (11/09/17 - 12/09/17). Thank you for your consideration. Alecia Wood From: Schwartz, Guy L (DOA) [mailto:auy.schwartzl4alaska.gov] Sent: Tuesday, October 31, 2017 3:32 PM To: Alecia Wood Subject: RE: H-16 Temporary Flow Configuration Alicia, Alaska Oil and Gas Conservation Commission Safety Valve System Test Report Operator: BlueC a Energy Submitted By: Josh Hall Date: 11/9/2017 Operator Rep: Josh Hall Field/Unit/Pad: Cosmopolitan, Hansen production facilit AOGCC Rep: Matt Herrem Separator psi: LPS 185 HPS N/A Wells: 1 Components. 2 Failure 0 Failure Rate: o. W % ❑ so oar Remarks: Well is flowinc under temporary flow approval, no SSSV installed at time of test. PLB 01/26/11 Page 1 of 1 SVS BIPF 11-9-17 ��®m00®- • 1 � 11 ®�� Wells: 1 Components. 2 Failure 0 Failure Rate: o. W % ❑ so oar Remarks: Well is flowinc under temporary flow approval, no SSSV installed at time of test. PLB 01/26/11 Page 1 of 1 SVS BIPF 11-9-17 Cosmopolitan Project Safety Valve System Attachment No 5: 3/23/17 H1AL3 Passing SVS Test Record Submission Alaska Oil and Gas Conservation Commission Safety Valve System Test Report Operator: BlueCrest Energ Submitted By: Josh Hall Date: 3/23/2017 Operator Rep: Josh Hall Field/Unit/Pad: Cosmopolitan, Hansen production facilit AOGCC Rep: Guv Cook Separator psi: LPS 183 HPS N/A Well Data I Pilots SSV SSSV Retest/SyDate Well Type Well Pressures Gas Lift Waiver Well Permit Number Number Separl PSI i Set LIP Test PSI Trip Code Test Code Test Code Date Passed Retest Or Date Shut In ojy WAG, GINJ, GAS, CYCLE, Si Inner Outer Tubing Yes/No PSI I PSI PSI Yes/No IA 203-004 183 125 0 1 NT NT OIL0 110 270 No No IA 203-004 183 125 97 P P P 3/23/2017 OIL 0 110 800 No No Wells: 1 Components: 3 Failures: I Failure Rate: Remarks: The first attempt to test the pilots, the low pressure set corrected issue. Pilots were retested same da} and passe and 33.3340 90 oar tions found both tested PLB 01/26/11 Pagc 1 of 1 SVS HPF 3-23-17 Cosmopolitan Project Safety Valve System Attachment No 6: 3/23/17 MALI Deficiency Report, Inspector Guy Cook State of Alaska Oil and Gas Conservation Commission Deficiency Report location: /%at u. /,4- Date: 3 23 1 17 PTD: 203604,1) Operator: 314.g, C,.0 f Type Inspection: svS Operator Rep: rM 14,1/ Inspector: ,•, �� Position: Zu4z Ooka ,.— up. Phone: Sol- 7?'x1- 43-;gz Correct by (date): 31 Ea ( 1 Op. Email: d esG . a. k _ l! B L/�-.�, ��,•es y Follow Up Required: yes Detailed Description of Deficiencies Date Corrected rhrNwa. %� to �S afu r.a 4- k --v se:+ �.:P presSw,S er C�lib4+ o. ,1.tes A Pio._W Signatures: Operator Rep i �..y AML AOGCC Inspector g, *After signs a COPY of this form is to be left with the operator. Follow-up Instructions Return a copy of this Deficiency Report to AOGCC (Attention: Inspection Supervisor) within 7 days of receipt. include the "Date Corrected" and attach supporting documentation for each corrective action implemented to address the deficiencies. If a follow-up Inspection was performed by AOGCC, Include the date and name of Inspector. Enenslons for corrective actions taking longer then the "correct by" date must requested and accompanied by Justification (Attention: Inspection Supervisor). Failure to provide the required documentation of corrective actions constitutes a vbiation of 20 AAC 25.300 and is subject to enforcement action under 20 AAC 25.535 Revised 3/9/2015 Cosmopolitan Project Safety Valve System Attachment No 7:3/29/17 MALI Deficiency Report Correction Documention, Josh Hall 12/15/2017 BlueCrest Energy Mail - BlueCrest deficiency report Q4�ul%j Mike Graves <mike.graves@bluecrastenergy.com> gk BlueCrest deficiency report Joshua Hall <joshua.hall@bluecrestenergy.com> Wed, Mar 29, 2017 at 8:25 AM To; "Regg, James B (DOA)' <jim.regg@alaska.gov>, guy.cook@alaska.gov Cc: John Martineck <john.martineck@bluecrestenergy.com>, Mike Graves <mike.graves@blueerestenergy.com> Jim and Guy, Please see attachments showing corrections of recent deficiency, and please let me know if you have any questions. Thank you. Josh Hall Lead Production Operator (907)396-9340 joshua.hall@biuecrestenergy.com y lJ uarr En6 5 attachments IMG_5573.JPG 102K IMG 5574.JPG 1261 IMG 5576.JPG 112K https:timail.google.wmfmaiVul017ui=2&1k=41026ar>471&jsve--gNJGSxrCYso.en.&view=pt&msg=l 5blae3225a45eb9&q=Jwhus.hall%40biuecrestem... 112 12/15/2017 18 deficiency report.pdf 61K ® calibration reports.zip 647K BImCrest Energy Mail - BlueCrest tleficiency report https://mail.google.com/maiVUIO/7ui=2&ik=41026a6471 &jsver--gNJGSxrCYso.en.&vier-pt&msg=15b1 ae3225a45eb9&q=Joshua.hall-/AOblueerestene... 2/2 Cosmopolitan Project Safety Valve System Attachment No 8: 5/17/17 H1AL1 Edited SVS Test Report Remarks, Josh Hall clarification request Aleaia wood --------- Forwarded message ---------- From: Joshua Hall <joshua.hall(u.bluecrestener ..com> Date: Wed, May 17, 2017 at 11:42 AM Subject: SVS test report To: "Begg, James B (DOA)" <jim.regg@a alaska.gov>, Mike Graves <mike-.eravesrr1 ,y bluecrestener .com>, Alecia Wood<alecia.wood(a.blueerestenergy.com> Jim, The attached SVS test report that was sent over from Phoebe Brooks states that our current SVS configuration does not meet the intent of the AOGCC regulations? The way that I read ( 20 AAC 25.265 ) where it states that the well must be equipped with a fail-safe automatic surface controlled subsurface safety valve, I believe we currently meet that regulation. Our subsurface safety valve is automatically controlled from surface via anyone of the facility ESD functions will automatically close the subsurface safety valve. Can you please expand of the attached test report comments. Thank you Josh Hall Lead Production Operator (907)398-9340 ioshua.hall(Fgblueerestenerev.com 11'!(ueCFest Ene-ru Alaska Oil and Gas Conservation Commission Safety Valve System Test Report Operator: B1ueCrest Eneru Submitted By: Josh Hall Date: 3/23/2017 Operator Rep: Josh Hall Field/Unit/Pad: Cosmopolitan, Hansen production facilit AOGCC Rep: Gut Cook Separator psi: LPS 183 RPS N/A Well Data I Pilots SSV SSSV RetesMDate Well Type Well Pressures Gas Lift Waiver Well Permit Separ Set L/P Test Test Test Date Passed Retest oa, WAG, Gma, Inner Outer Tubing Yes/NO Yes/No Number Number PSI PSI Tri Code Code Code Or Date Shut In GAS, CYCLE, SI PSI PSI PSI to 2030040 1831 1251 NT NT P OIL 0i 110 270 No No Wells: I Components: 3 Failures: 1 Failure Rate: 33.33°/090 Day Remarks: _Tested the SSSV by the ESD. Per AOGCC even though the SSSV closed & held different pressure, its actuation does not meet intent of AOGCC re¢ulation: no record of alternate PLB 01/26/11 Page I of I . SVS Hansen 03-23-17 Retest (2) Cosmopolitan Project Safety Valve System Attachment No 9: Updated elueCrest Cause and Effect SVS Logic 4 THE STATE Alaska Oil and Gas ALASKAA Conservation Commission GOVERNOR BILL WALKER December 22, 2017 Ms. Alecia Wood Senior Production Engineer BlueCrest Alaska Operating, LLC 3301 C Street, Suite 202 Anchorage, AK 99503 Re: Docket Number: OTH-17-055 Informal Review Missing Safety Valve System Tests Hansen Field Dear Ms. Wood: 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.olasko.gov As part of the informal review process, BlueCrest Alaska Operating, LLC (BlueCrest) has the opportunity to submit documentary material and make written and oral statements regarding the above referenced Notice of Proposed Enforcement Action. The informal review is scheduled for January 9, 2018 at 10:00 a.m. in the AOGCC's Anchorage office located at 333 West 7th Avenue. Copies of all written submissions and summaries of any oral statements planned by BlueCrest should be provided to the AOGCC no later than January 5, 2018. Sincerely, tcx\� Hollis S. French Chair, Commissioner 3 n1yest Energy December 21, 2017 State of Alaska Alaska Oil and Gas Conservation Commission 333 West 7`' Avenue, Suite #100 Anchorage, AK 99501 Re: Docket No. OTH-17-055, Missed Safety Valve System Tests Dear Commissioners, Cosmopolitan Project Safety Valve System Pursuant to the AOGCC Notice of Apparent Violation or Noncompliance letter received December 15, 2017 BlueCrest Energy hereby requests an informal meeting with the agency to be held the second week of January after the holiday break, should that be acceptable to the commission. Regards, � Alecia Wood Sr. Production Engineer BlueCrest Alaska Operating LLC Phone(907)754-9556 ^lueC est Energy BlueCrest Alaska Operating LLC 3301 C Street, Suite 202 Anchorage, AK 99503 Tel: (907) 754-9550 Fax. (907) 677-0204 Transmittal RECEIVED DEC 2 2 2017 AOGCC Today's Date: 12/22/2017 Transmittal M 12017-16 To: Jim Regg From: �iIecia�Woo_d Company. ............... .– AOGCC —— —Docket Company: R1 al. BlueCrest Alaska Operating LLC Well: i- #: OTH-17-055 Included: Included: Letter pertaining to Docket No: OTH-17-055. Thank you Alecia Wood Carlisle, Samantha J (DOA) From: Regg, James B (DOA) Sent: Thursday, December 21, 2017 5:04 PM To: Carlisle, Samantha J (DOA) Subject: FW: AOGCC Docket Number: OTH-17-055; Missed Safety Valve System Tests Jim Regg Supervisor, Inspections AOGCC 333 W.7'M Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or Ilm.reggiaDalaska.goy. From: Alecia Wood (mailto:alecia.wood@bluecrestenergy.com] Sent: Thursday, December 21, 2017 5:01 PM To: Regg, James B (DOA) <jim.regg@alaska.gov> Cc: 'Larry Burgess' <larry.burgess@bluecrestenergy.com> Subject: AOGCC Docket Number: OTH-17-055; Missed Safety Valve System Tests Mr. Regg, Pursuant to the AOGCC Notice of Apparent Violation or Noncompliance letter received December 15, 2017 BlueCrest Energy hereby requests an informal meeting with the agency to be held the second week of January after the holiday break, should that be acceptable to the commission. I will follow up this email request with a signed written request submitted to the commission. Thank you, Alecia Wood Alecia Wood Sr. Production Engineer BlueCrest Energy Inc 3301 C Street, Suite 202 Anchorage, AK 99503 Alecia. W ood @ BlueCrestEnergv.com (w)907 -754 -9556(m)907 -394-2485(f)907-754-5997 THE STATE 01ALASKA GOVERNOR BILL WALKER December 13, 2017 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 0640 0003 5185 6076 Mr. Larry Burgess HSE Manager BlueCrest Alaska Operating LLC 3301 C Street, Suite 202 Anchorage, Alaska 99503 Re: Docket Number: OTH-17-055 Missed Safety Valve System Tests Hansen Field Alaska Oil and Gas Conservation Commission 333 west Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.00gcc.claska.gov Dear Mr. Burgess: Pursuant to 20 AAC 25.535, the Alaska Oil and Gas Conservation Commission (AOGCC) hereby notifies BlueCrest Alaska Operating LLC (BlueCrest) of a proposed enforcement action. Nature of the Apparent Violation or Noncompliance (20 AAC 25.535(b)(1)), BlueCrest violated the provisions of 20 AAC 25.265 ("Well safety valve systems") at two Hansen Field production wells. Basis for Findina the Violation or Noncompliance (20 AAC 25.535(b)(2)). All producing wells at the Hansen pad require a safety valve system consisting of a surface safety valve with an actuator and a low-pressure mechanical or electrical detection device with the capability to shut-in a well when the well's flow line pressure drops below the required system actuation pressure. Hansen Pad wells also require a fail-safe automatic surface controlled subsurface safety valve capable of preventing an uncontrolled flow of fluid from the well's tubing. Testing of the safety valve systems is required as follows: Docket Number: OTH-17-055 December 13, 2017 Page 2 of 4 A new well requiring a safety valve system may not be operated unless it passes a performance -test not later than five days after placing the well in service.' 20 AAC 25.265(h)(4). A performance -test must be conducted semi-annually, not to exceed 210 days between tests. 20 AAC 25.265(h)(5).2 Performance -test results must be submitted electronically to the AOGCC not later than the 15't' calendar day of the month following testing. 20 AAC 25.265(h)(7). The Hansen Field has two producing wells — Hansen IA (PTD 2030040) and H-16 (PTD 2160760). The Hansen IA well safety valve system was last tested on March 23, 2017, (low- pressure detection device and surface safety valve); performance -tests were due not later than October 19, 2017. Hansen lA was shut in September 7, 2017, and is not due for a safety valve system test until it is placed back in service. Hansen H-16 commenced production in May 2017. An inability to sustain flow to surface resulted in BlueCrest installing a velocity string in the well. AOGCC's approval of the velocity string included a waiver of the subsurface safety valve.' In obtaining the waiver, BlueCrest stated H-16 would be equipped with a functional surface safety valve. BlueCrest notified AOGCC of the initial safety valve system tests on Hansen H-16 as follows: - July 1, 2017, notice for safety valve system tests at Hansen H-16 scheduled for July 3, 2017. - July 2, 2017, email that H-16 startup will occur on July 3, 2017, noting that "There will be an additional notification sent out to test the SSV's [surface safety valves] within 5 days of bring the well online." AOGCC concurred with the startup of Hansen H-16. - July 3, 2017, notice rescheduling the safety valve system testing for July 6, 2017. AOGCC deferred witness of the pre -production safety valve system tests until the frac flowback was completed and the subsurface safety valve was installed. BlueCrest has provided no record of performing safety valve system performance -tests on H-16. On October 25, 2017, AOGCC sent a courtesy email requesting the safety valve system test report for Hansen Field production wells. BlueCrest did not respond. An AOGCC Inspector requested a safety valve system performance test while at the location for a meter prove. A passing safety valve system test on Hansen H-16 was witnessed by AOGCC on November 9, 2017. BlueCrest filed a test report with AOGCC the same day. Results from safety valve system testing of Hansen lA on March 23, 2017 established a failure of the subsurface safety valve to close in response to low pressure detected in the well's flowline. Because Hansen I passed a test of both the low-pressure detection device and the surface safety valve, for the short term the well was allowed to continue production pending resolution of the ' A safety valve system "performance -test" is defined as function pressure -test of the system's valves and a function -test of the mechanical or electrical detection device. A function pressure -test means to actuate a component to demonstrate its proper functioning and to demonstrate its ability to effect a pressure seal. Z AOGCC Industry Guidance Bulletin 10-004, "Safety Valve Systems" (December 16, 2010) provides clarification about semi-annual tests for safety valve systems, and the intent for allowing up to 210 days between tests. s Sundry Approval 317-298; June 29, 2017 Docket Number: OTH-17-055 December 13, 2017 Page 3 of 4 safety valve system issues. On May 17, 2017, AOGCC requested documentation for the alternative closure of the subsurface safety valve. BlueCrest responded on May 19, 2017, with a "cause and effect" table highlighting the well safety valve system actions. B1ueCrest's "cause and effect" table proves the subsurface safety valve is not linked to the low-pressure detection device — instead it closes only on a plant or site emergency shut down. BlueCrest never requested a variance or waiver from the safety valve system regulations. Proposed Action (20 AAC 25.535(b)(3 For violating provisions of 20 AAC 25.265 the AOGCC intends to impose a civil penalty on BlueCrest in the amount of $20,000 ° In determining the amount of the penalty, AOGCC has considered the extent to which BlueCrest was acting in good faith in attempting to comply, the extent to which BlueCrest acted in a willful or knowing manner, the need to deter similar behavior by BlueCrest and others similarly situated at the time of the violation or in the future, and B1ueCrest's history of compliance issues.5 There are no applicable mitigating factors. In addition to the imposed civil penalty, AOGCC will require BlueCrest to provide a detailed written explanation as to how it intends to prevent recurrence of this violation. AOGCC will also require BlueCrest to develop a training program that addresses AOGCC requirements for the installation, operation, maintenance and testing of well safety systems. Copies of the training program and a list of personnel that received the training will be required documentation. AOGCC will also require BlueCrest to reconfigure the subsurface safety valve system actuation for all Hansen Field wells to comply with the intent of 20 AAC 25.265 — to automatically close not later than four minutes after the actuation of the low-pressure detection device installed on each well's flowline. Rights and Liabilities (20 AAC 25.535(b)(4)) Within 15 days after receipt of this notification — unless the AOGCC grants an extension for good cause shown — BlueCrest 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 BlueCrest an opportunity to submit documentary material and make a written or oral statement. If BlueCrest disagrees with the AOGCC's proposed decision or order after that review, it may file a written request for a hearing within 10 days after the proposed decision or order is issued. If such a request is not filed within that 10 -day period, the proposed decision or order will become final on the 11`h day after it was issued. If such a request is timely filed, the AOGCC will hold its decision in abeyance and schedule a hearing. ° Penalty amount arrived at considering failure to test the Hansen H-16 safety valve system (and report the test results as required), and failure to request a variance for the alternative closure of the subsurface safety valve on existing Hansen wells as separate initial violations, penalized at $10,000 per violation. 5 AS 31.05.150(g) sets forth the criteria for determination of a civil penalty. Docket Number: OTH-17-055 December 13, 2017 Page 4 of 4 If BlueCrest does not concur in the proposed action described herein, and the AOGCC finds that BlueCrest violated a provision of AS 31.05, 20 AAC 25, or an AOGCC order, permit or other approval, then the AOGCC may take any action authorized by the applicable law including ordering one or more of the following: (i) corrective action; (ii) suspension or revocation of a permit or other approval; and (iii) imposition of penalties under AS 31.05.150. In taking action after an informal review or hearing, the AOGCC is not limited to ordering the proposed action described herein, as long as BlueCrest 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, Hollis S. French Chair, Commissioner Regg, James B (DOA) From: Joshua Hall <joshua.hall@bluecrestenergy.com> Sent: Thursday, November 9, 2017 4:44 PM Q �) f-5117 To: Regg, James B (DOA); Herrera, Matthew F (DOA); Brooks, Phoebe L (DOA) Subject: SVS HPF 11-9-17 Attachments: SVS HPF 11-9-17.xls All, Please see SVS test report attached. Thank you Josh Hall Lead Production Operator (907)398-9340 ioshua.hall@bluecrestenergV.com Alaska Oil and Gas Conservation Commission Safety Valve System Test Report Operator: BlueCrest Energy Submitted By: Josh Hall Date: 11/9/2017 Operator Rep: Josh Hall Field/Unit/Pad: Cosmopolitan, Hansen production facilit AOGCC Rep: Matt Herrera Separator psi: LPS 185 HPS N/A Wells: I Components: 2 Failure 0 ®RetestlSI Remarks: Well is flowing Date® F Well Pressures Wells: I Components: 2 Failure 0 Failure Rate: 0.00% []go oay Remarks: Well is flowing under temporary flow approval no SSSV installed at time of test. PLB 01/26/11 Page I of I SVS HPF I1-9-17 Regg, James B (DOA) From: Regg, James B (DOA) Sent: Wednesday, July 5, 2017 3:04 PM To: natejohnson@bluecrestenergy.com Subject: RE: AOGCC Test Witness Notification Request: SVS, Anchor Point AOGCC witness is waived; we deferwvitness until finished with post frac cleanup and SSSV has been work with you to schedule the SVS test so it coincides with another AOGCC visit (meter prove; BOPE Jim Regg Supervisor, Inspections AOGCC 333 W.7'6 Ave, Suite 100 Anchorage, AK 99501 907-793-1236 led. We will CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or im.reggPalaska.gov. From: Nate Johnson[mailto:noreply@formresponse.comj Sent: Monday, July 3, 2017 10:26 AM To: DOA AOGCC Prudhoe Bay <doa.aogcc.prudhoe.bay@alaska.gov> Subject: AOGCC Test Witness Notification Request: SVS, Anchor Point Question Type of Test Requested: Requested Time for Inspection Location Name E-mail Phone Number Company Other Information: Submission ID: Answer SVS 07-06-2017 11:00 AM Anchor Point Nate Johnson nate.johnson@bluecrestenergy.com (907)7549582 Bluecrest Energy Due to operations not progressing as expected, we will like to reschedule the SVS testing for July 06th at 11am. Thanks 3749155452023232252 Regg, James B (DOA) From: AOGCC Inspection Request Posted At: Monday, July 3, 2017 10:26 AM Conversation: AOGCC Inspection Request - Submission (2017-07-03 10:25:46) Posted To: AOGCC Inspection Request Subject: AOGCC Inspection Request - Submission (2017-07-03 10:25:46) Submission Date : 2017-07-03 10:25:46 IP Address : 65.74.21.202 Type of Test Requested:: SVS Requested Time for Inspection : 07-06-2017 11:00 AM Location : Anchor Point Name : Nate Johnson E-mail : nate.johnson@bluecrestenergy.com Phone Number: (907) 7549582 Company : Bluecrest Energy Remarks : Due to operations not progressing as expected, we will like to reschedule the SVS testing for July 06th at 11am.Thanks View article... Regg, James B (DOA) From: Regg, James B (DOA) Sent: Sunday, July 2, 2017 1:24 PM To: Vance Yoakum Subject: RE: AOGCC Test Witness Notification Request: SVS, Anchor Point So this is a flowback before regular production? If so I concur. Sent from my Samsung Galaxy smartphone. -------- Original message -------- From: Vance Yoakum <fracops@bluecrestenergy.com> Date: 07/02/2017 11:33 AM (GMT -09:00) To: "Regg, James B (DOA)" <jim.regg@alaska.gov>, "Schwartz, Guy L (DOA)" <guy.schwartz@alaska.gov> Cc: 'tom mckay'<tom.mckay@bluecrestenergy.com>, 'Alecia Wood' <alecia.wood@ bluecrestenergy.com>, 'Joseph Longo' <jlongo@bluecrestenergy.com>, 'Frac ops' <fracops@bluecrestenergy.com>, nate.johnson@bluecrestenergy.com Subject: FW: AOGCC Test Witness Notification Request: SVS, Anchor Point -------- Original message -------- From: Vance Yoakum <fracops@bluecrestenergy.com> Date: 07/02/2017 11:33 AM (GMT -09:00) To: "Regg, lames B (DOA)" <jim.regg@alaska.gov>, "Schwartz, Guy L (DOA)" <guy.schwartz@alaska.gov> Cc: 'tom mckay' <tom.mckay@bluecrestenergy.com>,'Alecia Wood' <alecia.wood@bluecrestenergy.com>,'Joseph Longo' <jlongo@bluecrestenergy.com>, 'Frac ops' <fracops@bluecrestenergy.com>, nate.johnson@bluecrestenergy.com Subject: FW: AOGCC Test Witness Notification Request: SVS, Anchor Point Jim as we haven't received any response from you, I believe Bluecrest can move forward kicking H-16 off on 7/3/2017, due to the following points. We have an approved sundry to produce the well without an SSSV. I've spoken to Guy Schwartz he concurs there will not be an SSSV. We've met all the requirements under the sundry. Please let us know if I'm unaware of any other issues we need to follow up on. We're anticipating commencing the Flowback 7/3 — 9:00am. There will be an additional notification sent out, to test the SSV's within 5 days of bringing the well online. Thanks Vance Yoakum From: Vance Yoakum[mailto:FracOpsabluecrestenergy.com] Sent: Sunday, July 02, 2017 7:33 AM To: 'Nate Johnson'; 'Regg, James B (DOA)' Cc: 'tom mckay'; 'Joseph Longo'; 'Alecia Wood' Subject: RE: AOGCC Test Witness Notification Request: SVS, Anchor Point Jim it's our understanding the SSSV requirement was waived by the AOGCC. Is this a question about the SSV's? Vance From: Nate Johnson [mailto:nate johnson(albluecrestenergy.com] Sent: Sunday, July 02, 2017 7:20 AM To: Frac Ops Subject: Fwd: AOGCC Test Witness Notification Request: SVS, Anchor Point ---------- Forwarded message ---------- From: Regg, James B (DOA) <iim.reee@alaska.eov> Date: Sat, Jul 1, 2017 at 11:11 PM Subject: RE: AOGCC Test Witness Notification Request: SVS, Anchor Point To: "nate.iohnson@bluecrestenergy.com" <nate.iohnson@bluecrestenerev.com> Cc: "Schwartz, Guy L (DOA)" <guy.schwa rtz(a@alaska.gov> Is the SSSV configured the same as Hansen 1 (closing on ESD only)? Was that approved by AOGCC? Sent from my Samsung Galaxy smartphone. -------- Original message -------- From: Nate Johnson <noreply formresponse.com> Date: 07/01/2017 3:59 PM (GMT -09:00) To: DOA AOGCC Prudhoe Bay <doa aoacc prudhoe. bay@a laska.eov> Subject: AOGCC Test Witness Notification Request: SVS, Anchor Point Question Answer Type of Test Requested: SVS Requested Time for 07-03-2017 4:00 PM Inspection Location Anchor Point Name Nate Johnson E-mail nate iohnson@bluecresteneray.com Phone Number (907) 7549582 Company Bluecrest Energy Other Information: Testing of SVS on Hansen 16 well prior to bringing it online. Submission ID: 3747627902024132072 3 Regg James B (DOA) From: AOGCC Inspection Request Posted At: Saturday, July 1, 2017 4:00 PM Conversation: AOGCC Inspection Request - Submission (2017-07-01 15:59:50) Posted To: AOGCC Inspection Request Subject: AOGCC Inspection Request - Submission (2017-07-01 15:59:50) Submission Date : 2017-07-0115:59:50 IP Address: 65.74.21.202 Type of Test Requested:: SVS Requested Time for Inspection : 07-03-2017 4:00 PM Location : Anchor Point Name : Nate Johnson E-mail : nate.johnson@bluecrestenergy.com Phone Number: (907) 7549582 Company: Bluecrest Energy Remarks : Testing of SVS on Hansen 16 well prior to bringing it online. View article... THE STATE © Alaska Oil and Gas "'ALASKA Conservation Commission GOVERNOR BILL WALKER Joseph Longo Drilling Manager BlueCrest Alaska Operating, LLC 3301 C St., Ste. 202 Anchorage, AK 99503 Re: Hansen Field, Undefined Oil Pool, H-16 Permit to Drill Number: 216-076 Sundry Number: 317-298 Dear Mr. Longo: 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www. aogcc. oiaska.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 Commissioner DATED this Zq� of June, 2017. STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION V�T� APPLICATION FOR SUNDRY APPROVALS 7 70 war 25 San - 1. Type of Request Abandon ❑ Plug Perforations ❑ Fracture Stimulate ❑ Repair Well ❑ Operation shutdown❑ Suspend ❑ Perforate ❑ Other Stimulate ❑ Pug Tubing ❑ Change �ggppjRr�oved{t..P.,mg,5m�m ❑ Plugfor Redrill ❑ Perforate New Pool❑ RB"enter Susp Wall ❑ Alter Casing OIITeY.—`_h8rI-41`t 2. Operator Name. 4. Current Well Gass: 5. Permit to Grill Number. BlueCrest Alaska Operating LLC Exploratory ❑ Development❑ . Sbetigraphlc ❑ Service ❑ 217.076 V,�y%, 3. Address: B. API Number. ,o- P ,Z,7tY 3301 'C' Street, Suite 202, Anchorage, AK 99503 54231-20051-00-00 7. It perforating: B. Well Name and Number. What Regulation or Conservation Order governs well spacing In this pod? H16 , Will planned perforations require a spacing exception? Yes ❑ No ❑ 9. Property Designation (Lease Number): 10. Fieid/Pcol(s): ADL 18790; ADL 384403 , 5�e, - , 4 -- Hansen Field Undefined Oil Pool H-16 It. •L`.>� l i PRESENT WELL CONDITION SUMMARY Tafel Depth MD (ft): Total Depth TVD (R): Effective Depth MD: Effective Depth TVIX MPSP (pal): Plugs (MO): Junk (MD): 23,415' 7116' 22,741' 7,088' 2,773 Casing Length Size MD TVD Burst Collapse Structural WA WA WA WA WA N/A Conductor 14V 20' 187" 187' WA WA Surface 4,137 13-3i8' 4,177 3,175' 5,380 2,670 Intermediate 14,724' 9-&8'47# / 53.5# 14,764'7,088' 9,440 / 10,900 5,300 / 7,850 Production WA WA WA WA WA WA Liner 8,180' 4-1/7 22,794' 7,089' 14.420 14,350 Perforation Depth MD (ft): Perforation Depth TVD (ft): Tubing Sim: Tubing Grade: Tubing MD (ft): WA WA 4-1/2' Pilo 14614' Packers and SSSV Type: Packers and SSSV MD (h) and TVD (ft): Swell Packers / No SSSV NIA 12. Attachments: Proposal Summary Wellbore schematic 13. Well Gass after proposed work: Detailed Operations Program Q BOP Sketch ❑ Exploratory ❑ Stratire hic g p ❑ Development ❑+ Service ❑ 14. Estimated Data for 15. Well Status after proposed work: Commencing Operations: 29 -Jun -17 OIL Q• WINJ ❑ WDSPL ❑ Suspended ❑ GAS ❑ WAG ❑ GSTOR ❑ SPLUG ❑ 16. Verbal Approval: Date: 20Jur✓17 Commission Representative: Guy Schwartz GINJ ❑ Op Shutdown ❑ Abandoned ❑ 17. 1 hereby certify that the foregoing is true and the procedure approved herein will not be deviated from without prior written approval. Authorized Name: Joseph Longo Contact Name: Tom McKay Authorized Title: Drilli g Managet Confect Email: torn.mckavAbluecrestenergy.com Contact Phone: 907-3549544 Authorized SI nature• Date: r COMMISSIOM USE ONLY Conditions of approv on so that a representative may witness Sundry Number. 3 �-r- 2 9 � s• Plug Integrity El BOP Test Mechanical Integrity Test ❑ Location Clearance ❑ 44SF Other. +-10/DU to T.—O&— aid 6.��// /n•�f•'<. //PS//a /341 �IDW rJ4.GK- (_..o k-rrl u,✓�:e �. Va.��N �Qi. CDS �`�-yS. VVJJ❑ v Post Initial Injection MIT Req'd? Yea ❑ No u Spacing Exception Required? Yes ❑ No [ K Subsequent Form Required: APPROVED BY APProved br COMMISSIONER THE COMMISSION Date: G _ Zit - a✓ Submit Fm, and Form 1D403 Revibed 41201 0 jlltp{'g6id t= It:11d for 12 months from the dab of approvrl.L Atlepsnenle in Duykete IVB \\I !L -Ll L z7� t-7 H-16 Coil Tubing Velocity String Running Procedure Pre -Job Phase Pre job safety meetings will be held wall crews and company representatives prior to all operations below. Include personnel from all SIMOPS in progress at the pad. Discuss dropped objects, working with pressure, working at heights and safe zones if well control issues should arise. Please check co-workers for PPE required. Operations Phase 1. Rig up GEOG Vetco Gray to set BPV in tubing hangar. Reference attached schematics. 2. Pressure test against BPV and lower master valve (LMV) to 1500 psi. Record results. 3. NOTE: In order to test the BPV from above, a 2 -way check valve would need to be installed in the BPV. 4. Break 4-I/16" SK flange above LMV and remove upper Xmas tree using the crane. 5. Install 4-1/16" 5K spool with 2-1/16" 5K annulus valve as shown on proposed tree schematic. 6. Re -install upper xtn tree on top of this spool. 7.Once tree is re -configured and pressure tested to 1500 psi, pull BPV. 8. Rig up SLB CT unit. a. Contact AOGCC 24 bra prior to BOP test. AOGCC may witness test. 9. Test all BOPE equipment; 250 psi low, 4,000 psi high. 10. Rig up to kill the well with clean kill weight brine. 11. Monitor the well for flow and ensure well conditions are static. 12. Pick up injector head and lubricator 13. M/U lower BHA consisting of the following: } a. Baker Oil Tools external slip connector for 2-3/8" coil tubing. b. Wireline re-entry guide. 14. Stab injector head onto well. Pressure test lubricator to 250 low, 4,000 psi high. 15. RIH to approximately 14,000' 16. Close pipe slips and manually lock rams. 1.a. Ensure accurate weights are recorded prior to closing rams. b. Perform push/pull against slips 17. Perform 30 -minute no -flow above rams to ensure rams are holding. 18. Once good no flow is observed, prepare to strip off. a. Collar up lubricator. b. Drop chain traction and increase chain tension. c. Slip chains in the in-hole direction. d. Once chains are slipping, crane operator will pick up leaving a couple foot window between the top of the BOPs and the bottom of the lubricator. i. Any sudden/notable weight change observed by the crane operator or the CT (Coil Tubing) supervisor should result in an immediate all stop. 19. Hot tap and perform 30 -minute no -flow to ensure inside the CT string is dead. 20. Once no -flow is observed and string is confirmed to be in a static state, cut CT. c Tz- a. Ensure cut is a couple feet above BOPs to ensure there is plenty of room to make up a connector twice if needed. 21. Swing injector to the side so CTC and G -wear can be made up to the CT sticking out of the lubricator while the hanger assembly is being made up to the stub end sticking out of the BOPS. 22. Make up CTC, X -over and hanger to stub end sticking out of BOPS. a. A TIW valve from Weatherford will be on standby to make up to the CTC, made up to the stub end sticking out of the BOPS, in case well conditions change. 23. Stab the injector head and lubricator back onto the BOPS. 24. RTH and latch G -spear into the hanger and confirm latch. 25. P/U string hanging weight recorded prior to closing the BOPS. 26. Open the equalizing port. 27. Manually unlock rams and open pipes then slips. 28. RIH measured amount to the lockdown screws. 24. Land Hangar in lockdown assembly to GE specifications 30. Lockdown and energize seals. 31. Release G -spear from hanger and pull above swab valve. 32. Close swab valve 33. Rig down CTU 34. Rig up to facility to inject gas down coil tubing and take returns up coil by 4-1/2" tubing annulus to surface facilities. 35. Connect two (2) NRP-Jones high pressure (5K) flexible hoses to injection line and return line using FIG -1502 unions and flanges. These hoses are 15' long, and are approved by the AOGCC for a temporary flow back test on this well. They also meet all SAE 100R13 requirements. In addition, a choke will he installed on the return line. Since flexible temporary hoses arc being used, 24-hour supervision of this operation is required by the AOGCC, and a log book will be required where the Operators can inspect the set up every two (2) hours and sign off that there are no leaks and that pressures are considered normal. 36. As shown on the attached surface equipment schematic, there are Surface Safety Valves (SSV's) installed on both the tubing and annulus sides, one above the LMV on the tubing sides, and one outboard of the wing valve on the annulus side. Both are rated to 5K, and both are hydraulic and can be operated from the wellhead control panel. 37. Continue HI 6 flow /back test using facility gas lift supply and 2-3/8" coil tubing velocity string. tZ,-, Zflt gtie. TWM, 273une2017 . SSSI/ 60 iucX le'` 0 I at' L H i � 9 � r 1- Regg, James B (DOA) From: Joshua Hall <joshua.hall@bluecrestenergy.com> Sent: Friday, May 19, 2017 1:50 PM To: Regg, James B (DOA) Subject: Re: SVS test report Attachments: SAFE chart.pdf Jim, Please see attached SAFE chart, the column highlighted in red shows what will close the SSSV. Please let me know if you have any questions. Thank you Josh Hall Lead Production Operator (907)398-9340 ioshua.hall @bluecrestenergv.com H! On Wed, May 17, 2017 at 4:52 PM, Regg, James B (DOA) <iim.regg@alaska.gov> wrote: 20 AAC 25.265(h)(12) states "not later than four minutes after the actuation of a mechanical or electrical detection device, a required subsurface safety valve must close". This should be understood that the low pressure pilot triggers closure of the SSV and SSSV — the rules provide for a delay in closing the SSSV (SSV first). 20 AAC 25.265 is addressing a well safety valve system —as I understand your well safety valve system, the low pressure detection device installed on the flowline downstream of the production tree's wing valve does not close the SSSV, so Hansen 1A would fall under the alternative compliance provisions outlined in 25.265(o). BlueCrest should have sought approval for the alternate actuation of the SSSV before placing the well in production. Please provide AOGCC with the SAFE chart (or equivalent document) showing the relation between the well safety devices and their function — we are only interested in the document(s) that show what closes the SSSV and why. If AOGCC were to allow the SSSV closure to be controlled by ESD functions, it may have implications on how performance testing the SSSV is done. Jim Regg Supervisor, Inspections AOGCC 333 W.7`h Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907-793-1236 or Jim. re¢e@alaska.eov. From: Joshua Hall [mailto:ioshua hall@bluecrestener y.com] Sent: Wednesday, May 17, 2017 11:43 AM To: Regg, James B (DOA) <iim.reggPalaska.aov>; Mike Graves <mike graves@bluecresteneray.com>; Alecia Wood <alecia.wood@bluecrestenerey.com> Subject: SVS test report Jim, The attached SVS test report that was sent over from Phoebe Brooks states that our current SVS configuration does not meet the intent of the AOGCC regulations? The way that I read ( 20 AAC 25.265 ) where it states that the well must be equipped with a fail-safe automatic surface controlled subsurface safety valve, I believe we currently meet that regulation. Our subsurface safety valve is automatically controlled from surface via anyone of the facility ESD functions will automatically close the subsurface safety valve. Can you please expand of the attached test report comments. Thankyou Josh Hall Lead Production Operator (907) 398-9340 josh ua. hall@bluecresteneray.com Alaska Oil and Gas Conservation Commission Safety Valve System Test Report Operator: BlueCrest Energ Submitted By: Josh Hall Date: 3/23/2017 Operator Rep: Josh Hall Field/Unit/Pad: Cosmopolitan, Hansen production facilit AOGCC Rep: Guy Cook Separator psi: LPS 183 HPS N/A Well Data Pilots SSVISSSVI Retest/SI Date Well Type Well Pressures Gas Lift Waiver Well Number Permit Number Separ PSI Set PSI UP Tri Test Code Test Code Test Code Date Passed Retest Or Date Shut In I Oil WAG GINJ, GAS, CYCLE, St Inner Outer Tubing Yes/No PSI PSI PSI Yes/No IA 2030040 183 125 NT NT P 1011, 01 1101 270 No No Wells: 1 Components: 3 Failures: 1 Remarks: Tested the SSSV by the ESD. Per AOG0 pressure. its actuation does not meet intent Failure Rate: 33.331/090 Day closed & held differentia PLB 01/26/11 Page I of I SVS Hansen 03-23-17 Retest u�'QC �u,sfi 4e �- Zs.�s(aK,Z) assume, sss�/ C� LAS elK��a��s 0 Alecia Wood From: Schwartz, Guy L (DOA) [guy.schwartz@alaska.gov] Sent: Tuesday, April 11, 2017 4:32 PM To: Alecia Wood Subject: RE: H-16 CTU update (PTD 216-076) 0 Alecia, You can report all the 10-403 sundries on one 10-404 that are related to the stimulation. That is a lot easier for everyone! Also, once you get the next sleeve open and complete data frac let me know ... we may send someone down. Were you able to pump away the solids left in the wellbore away? Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office 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 Guy Schwartz at (907-793-1226) or (Guv schwarl&glaska aov1. From: Alecia Wood [mailto:alecia wood@bluecrestenergy.coml Sent: Tuesday, April 11, 2017 3:13 PM To: Schwartz, Guy L (DOA) <guy. schwa rtz(r@alaska.gov> Subject: RE: H-16 CTU update (PTD 216-076) Guy, Mike Martin said that he spoke with you already, but we are gearing up to drop a ball and shift the next sleeve, hoping to complete a data frac today, and perhaps a propped frac tomorrow. We currently have three 10-403's out on H-16: The Frac Sundry, The Atom ball drift and IBP sundry (317-116), and a FCO (317-140). Joe said that he spoke to you and you said we should just complete one 10-404 for the well? I just wanted to confirm that you do not want individual 10-404's, as the 317-116 Sundry would be coming due soon. Thank you! Alecia From: Alecia Wood rmailto•Alecia wood(clbluecrestenergv com] Sent: Friday, April 07, 2017 10:50 AM To: 'Schwartz, Guy L (DOA)' Subject: RE: H-16 CTU update (PTD 216-076) Guy, Sure thing. We were only able to get down to 17,300' Wednesday using an agitator. We saw some sand on the tools, so we made a run yesterday/last night with just a nozzle so we could attempt a reverse circ cleanout, and made it to 19333CTMD! We are attempting an injectivity test to see if the DMXT we pumped at the end of stage 2 will roll down and seat on the Stage 3 RSS @ 21845, and if we cannotop into it we will attempt the flowback, afloerform another FCO before pumping a ball to shift the next sleeve. Alecia From: Schwartz, Guy L (DOA) fmailto:guy, schwa rtz(dalaska.gQv] Sent: Friday, April 07, 2017 8:22 AM To: 'Alecia Wood' Subject: H-16 CTU update (PTD 216-076) Alecia, Can you provide me an update on CT FCO status on H-16? An email every couple days would be great so we can plan inspector coverage for when you startup the next frac'ing stage. Hope you are making good progress! Regards, Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office 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 Guy Schwartz at (907-7931226 ) or (Guy Schwartz*alaska aov). Alecia Wood From: Schwartz, Guy L (DOA) (guy.schwartz@alaska.gov) Sent: Monday, May 15, 2017 3:30 PM To: Alecia Wood Subject: RE: H-16 Flowback Approval (post frac) Alecia, You have approval to do a temporary Flowback/cleanup of H-16 as outlined below. A functioning SSSV must be installed and tested within 14 days if the well is capable of unassisted flow per 20 AAC 25.265(j)(1) . Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office 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 Guy Schwartz at (907-793-1226 ) or (Guy.schwartz@aJoska aov). From: Alecia Woodfmailto:alecia.woodCa)bluecrestenerev.com) Sent: Monday, May 15, 2017 3:12 PM To: Schwartz, Guy L (DOA) <tlschwa rtzPalaska.eov> Subject: H-16 Flowback Approval Guy, This email serves to document our conversation and the verbal approval to flowback H16 through the frac string. We plan to install the production tree and perform an N2 lift with Coil, taking returns to an open top tank venting the N2 until we begin to see formation fluids (oil) at which time we will divert to the portable test unit on location. Gas will be flared until the N2 is cleared from the system and then the reservoir gas will be sent to the facility along with the oil from the flowback. Water will be diverted to tanks and disposed of offsite. Per our conversation we will flow the well for less than 14 days without the subsurface safety valve and keep a 24 hour watch on the well. Thank you, Alecia Alecia Wood Sr. Production Engineer BlueCrest Energy Inc 3301 C Street, Suite 202 Anchorage, AK 99503 Alecia.Wood@BlueCrestEner,Zy.com (w)907 -754 -9556(m)907 -394-2485(f)907-754-5997 Regg, James B (DOA) From: Regg, James B (DOA) Sent: Wednesday, May 17, 2017 4:52 PM To: Joshua Hall Subject: RE: SVS test report 20 AAC 25.265(h)(12) states "not later than four minutes after the actuation of a mechanical or electrical detection device, a required subsurface safety valve must close". This should be understood that the low pressure pilot triggers closure of the SSV and SSSV —the rules provide for a delay in closing the SSSV (SSV first). 20 AAC 25.265 is addressing a well safety valvesystem — as I understand your well safety valve system, the low pressure detection device installed on the flowline downstream of the production tree's wing valve does not close the SSSV, so Hansen 1A would fall under the alternative compliance provisions outlined in 25.265(o). BlueCrest should have sought approval for the alternate actuation of the SSSV before placing the well in production. Please provide AOGCC with the SAFE chart (or equivalent document) showing the relation betweeri the well safety devices and their function — we are only interested in the document(s) that show what closes the SSSV and why. If AOGCC were to allow the SSSV closure to be controlled by ESD functions, it may have implications on how performance testing the SSSV is done. Jim Regg Supervisor, Inspections AOGCC 333 W.7'h Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or iim.re¢z@alaska.eov. -, From: Joshua Hall [mailto:joshua.hall@bluecrestenergy.com] Sent: Wednesday, May 17, 2017 11:43 AM To: Regg, James B (DOA) <jim.regg@alaska.gov>; Mike Graves <mike.graves@bluecrestenergy.com>; Alecia Wood <alecia.wood @bluecrestenergy.com> Subject: SVS test report Jim, The attached SVS test report that was sent over from Phoebe Brooks states that our current SVS configuration does not meet the intent of the AOGCC regulations? The way that I read ( 20 AAC 25.265 ) where it states that the well must be equipped with a fail-safe automatic surface controlled subsurface safety valve, I believe we currently meet that regulation. Our subsurface safety valve is automatically controlled from surface via anyone of the facility ESD functions will automatically close the subsurface safety valve. Can you please expand of the attached test report comments. Thank you Josh Hall Lead Production Operator (907) 398-9340 6oshua.hall @bluecrestener¢y.com Regg, James B (DOA) From: Joshua Hall <joshua.hall@bluecrestenergy.com> Sent: Friday, May 19, 2017 1:50 PM To: Regg, James B (DOA) Subject: Re: SVS test report Attachments: SAFE chart.pdf Jim, Please see attached SAFE chart, the column highlighted in red shows what will close the SSSV Please let me know if you have any questions. Thank you Josh Hall Lead Production Operator (907)398-9340 joshua.hall@bluecrestenerey.com I On Wed, May 17, 2017 at 4:52 PM, Regg, James B (DOA) <iim.reRRPalaska.Rov> wrote: 20 AAC 25.265(h)(12) states "not later than four minutes after the actuation of a mechanical or electrical detection device, a required subsurface safety valve must close". This should be understood that the low pressure pilot triggers closure of the SSV and SSSV —the rules provide for a delay in closing the SSSV (SSV first). 20 AAC 25.265 is addressing a well safety valve system — as I understand your well safety valve system, the low pressure detection device installed on the flowline downstream of the production tree's wing valve does not close the SSSV, so Hansen 1A would fall under the alternative compliance provisions outlined in 25.265(o). BlueCrest should have sought approval for the alternate actuation of the SSSV before placing the well in production. Please provide AOGCC with the SAFE chart (or equivalent document) showing the relation between the well safety devices and their function — we are only interested in the document(s) that show what closes the SSSV and why. If AOGCC were to allow the SSSV closure to be controlled by ESD functions, it may have implications on how performance testing the SSSV is done. Jim Regg Supervisor, Inspections AOGCC 333 W.7'h Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907-793-1236 or iim.reee@alaska.eov. From: Joshua Hall [mailto:joshua.hall@bluecrestenerey.comJ Sent: Wednesday, May 17, 2017 11:43 AM To: Regg, James B (DOA) <jim.regg@alaska.aov>; Mike Graves <mike.¢raves@bluecrestenerey.com>; Alecia Wood <alecia.wood@bluecrestenerey.com> Subject: SVS test report Jim, The attached SVS test report that was sent over from Phoebe Brooks states that our current SVS configuration does not meet the intent of the AOGCC regulations? The way that I read ( 20 AAC 25.265 ) where it states that the well must be equipped with a fail-safe automatic surface controlled subsurface safety valve, I believe we currently meet that regulation. Our subsurface safety valve is automatically controlled from surface via anyone of the facility ESD functions will automatically close the subsurface safety valve. Can you please expand of the attached test report comments. Thank you Josh Hall Lead Production Operator (907)398-9340 joshua.hall@bluecrestenergy.com r Nil-III --------• ..------- C-- ---•-• -------- 0 Alecia Wood 0 From: Schwartz, Guy L (DOA) [guy.schwartz@alaska.gov] Sent: Thursday, June 08, 2017 10:47 AM To: Alecia Wood Cc: 'Chad Barrett'; walkerofak@gmail.com; 'Joseph Longo'; Regg, James B (DOA) Subject: RE: BOP Test Waiver Alecia, You may continue to N2 lift the well with CT and waive weekly BOPE test. If for some reason you have to pullout of wellbore take that opportunity to test BOPE on the Coil unit. On a side note the CT BOPE test report was submitted to the AOGCC late (test date was June 2 and received June 8) must be submitted within 5 days as required under 20 AAC 25.035(e)(10)(G). Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office 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 if, and, so that the AOGCC is aware of the mistake in sending it to you, contact Guy Schwartz at (907-793-1226) or (Guv.schwartz@alaska.aov(. From: Alecia Wood LmaiIto: alecia.wood@bluecrestener¢y.coml Sent: Thursday, June 08, 2017 9:56 AM To: Schwartz, Guy L (DOA) <guy.schwartz(c@alaska.¢ov> Cc: 'Chad Barrett' <CBarrett@slb.com>; walkerofak@gmail.com: 'Joseph Longo' <0longo@bluecrestenerpy.com> Subject: BOP Test Waiver Hi Guy, This email is a follow up to our phone conversation to confirm/document that the AOGCC grants the Coiled Tubing BOP Test waiver for the SLB Unit on our Hansen pad, for the test due 6/09/17. This waiver is granted while we continue operations to lift the well with N2 until we pull out of the hole. Thank you, Alecia Alec[a Wood Sr. Production Engineer BlueCrest Energy Inc 3301 C Street, Suite 202 Anchorage, AK 99503 Alecia.Wood(@BlueCrestEnerizv.com (w)907 -754 -9556(m)907 -394-2485(f)907-754-5997 0 0 Alecla Wood From: Schwartz, Guy L (DOA) [guy.schwartz@alaska.gov] Sent: Tuesday, June 13, 2017 2:01 PM To: Alecia Wood Cc: 'Chad Barrett'; 'Joseph Longo` Regg, James B (DOA); 'Vance Yoakum' Subject: RE: BOP Test Waiver (H-16 PTD 216-076) Alecia, Just talked to Vance ... AOGCC will waive witness on the BOPE test on the CT unit. As far as the 14 day SSSV waiver you may continue to flowback well as part of cleanup operations under 25 AAC 25.265 (j). Once well is put on regular production the SSSV will have to be installed and tested as required. Note: Make sure you put well name and PTD on the email subject line. Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office 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 Guy Schwartz at (907-793-1226 ) or (Guv Schwartz@alaska aov). From: Alecia Wood [mailto:alecia.wood(@bluecrestenerev.com] Sent: Tuesday, June 13, 2017 1:22 PM To: Schwartz, Guy L (DOA) <guv.schwartz(@alaska.zov> Cc: 'Chad Barrett' <CBarrettt@slb.com>; 'Joseph Longo' <ilonaoC@bluecresteneray.com>; Regg, James B (DOA) <iim.retz¢@alaska.aov>; 'Vance Yoakum' <fracops@bluecrestenergy.com> Subject: RE: BOP Test Waiver Guy, Jim, We have decided to stop the N2 lift and run down to tag, to ensure we do not have a sand plug. We are coming out of the hole now and will perform the opportunistic BOP test as discussed last week. This means that we cannot provide 24 hours notice, we plan to perform the BOP test, swap the BHA, align to reverse circulate and run back in hole to tag. After cleaning out any debris, we would like to flow it back to clean up the water it takes during the clean out, then shut in to allow the tracers their resonance time and flow back once more to collect samples for evaluation of which zones are contributing. Guy can you please give me a call at your earliest convenience to discuss? This plan may put us past the 16`h the end of our 14 day SSSV waiver. Thank you, Alecia From: Schwartz, Guy L (DOA)fmailto:auv.schwa rtz(dalaska.gov] Sent: Thursday, June 08, 2017 10:47 AM To: Alecia Wood Cc: 'Chad Barrett'; walkerofak(a@gmail.com; 'Joseph Longo'; Regg, James B (DOA) Subject: RE: BOP Test Waiver 0 0 Alecia, You may continue to N2 lift the well with CT and waive weekly ROPE test. If for some reason you have to pull out of wellbore take that opportunity to test BOPE on the Coil unit. On a side note the CT BOPE test report was submitted to the AOGCC late (test date was June 2 and received June 8) must be submitted within 5 days as required under 20 AAC 25.035(e)(10)(G). Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office 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 Guy Schwartz at (907-7931226 ) or (Guy schwartz@clasko.aov). From: Alecia Wood fmailto:alecia.wood@bluecrestenergv.coml Sent: Thursday, June 08, 2017 9:56 AM To: Schwartz, Guy L (DOA) <guv.schwartz@alaska.gov> Cc: 'Chad Barrett' <CBarrettCilslb.com>; walkerofak@gmail.com;'Joseph Longo' <ilongo@bluecrestenergy.com> Subject: BOP Test Waiver Hi Guy, This email is a follow up to our phone conversation to confirm/document that the AOGCC grants the Coiled Tubing BOP Test waiver for the SLB Unit on our Hansen pad, for the test due 6/09/17. This waiver is granted while we continue operations to lift the well with N2 until we pull out of the hole. Thank you, Alecia Alecia Wood Sr. Production Engineer BlueCrest Energy Inc 3301 C Street, Suite 202 Anchorage, AK 99503 Alecia.Wood@BlueCrestEnergy.com (w)907 -754 -9556(m)907 -394-2485(f)907-754-5997 Schwartz, Guy L (DOA) From: Schwartz, Guy L (DOA) Sent: Tuesday, June 27, 2017 3:08 PM To: Tom McKay Cc: jlongo@bluecrestenergy.com;'Alecia Wood'; 'Vance Yoakum'; 'BlueCrest Foreman' Subject: RE: BlueCrest H16 Well Flowback Test -Coil Tubing Velocity String_27June2017_PTD 216-076 Tom, Ok .. will add this to the sundry application for consideration. Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oit 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 low. 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 Guy Schwartz at (907-793-1226 ) or (Guyschwortzw_'alaska.aov). From: Tom McKay[mailto:tom.mckay@bluecrestenergy.comj Sent: Tuesday, June 27, 2017 12:47 PM To: Schwartz, Guy L (DOA) <guy.schwartz@alaska.gov> Cc: jlongo@bluecrestenergy.com;'Alecia Wood' <a lecia.wood@bl uecrestenergy.com>; 'Vance Yoakum' <fracops@bluecrestenergy.com>;'Tom McKay' <tom.mckay@bluecrestenergy.com>;'BlueCrest Foreman' <d rill sitesupervisor@ bluecrestenergy.com> Subject: BlueCrest H16 Well_Flowback Test—Coil Tubing Velocity String_27June2017 PTD 216-076 Guy — just to follow up on our conversation and Sundry Notice for H16 filed today: 1. BlueCrest plans to kick off the flow test with nitrogen, planning to use the SLB coil pumps up to 3200 psi maximum expected surface pressure, then switching over to natural gas provided by the facility at 2600 psi. 2. BlueCrest will conduct focused safety meetings directed at safe handling of nitrogen on this temporary installation. 3. At some point depending on how the well produces, BlueCrest may switch to injecting gas down the 2-3/8" coil by 4-1/2" tubing annulus, taking returns up the coil tubing to improve well production performance for this short term test. Please include these additional notes in the Sundry Notice Form 10-403 file for the H16 well. Thanks Guy H Best regards, Tom McKay Principal Drilling Engineer BlueCrest 907-350-9544 cell 907-754-9566 office E tom.mckay@blucrestenergy.com r From: Schwartz, Guy L (DOA)[mailto:guy.schwartz@alaska.gov] Sent: Friday, June 16, 2017 12:36 PM To: Tom McKay cc: jlongo@bluecrestenergy.com Subject: RE: BlueCrest H16 Well_Flowback Test—Coil Tubing Velocity String_16]une2017_PTD 216-076 Thanks for the overview... Drawing shows there will be two SSV's used which is required. Make sure the sundry addresses how both SSV's will be set up for activation. Also note that this is not intended to be a permanent installation but a short term test to assess reservoir performance to help determine the best completion design. (30-60 days approx..) Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office CONFIDENTIALITY NOTICE: this e-mail message, including any attachrnenis, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), Sate of Alaska and is for the sole use of the intended recipient(si. It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. It 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 Guy Schwartz at (907-793-1226 ) or (GUY. c warizCyalaskQ g0vv). From: Tom McKay[mailto:tom.mckay@bluecrestenergy.com) Sent: Friday, June 16, 2017 11:33 AM To: Schwartz, Guy L (DOA) <guy.schwartz@alaska.gov> Cc:'Tom McKay'<tom.mckay@bluecrestenergy.com>; jlongo@bluecrestenergy.com Subject: BlueCrest H16 Well_Flowback Test—Coil Tubing Velocity String_16June2017_PTD 216-076 Guy, We would like to bring you up to date on the latest plan for the ongoing flowback testing on the BlueCrest H16 well (PTD 216-076). We propose to install and hang off either a 2" or 2-3/8" coil in the well to approximately 14,000' MD. The coil would be hung off in a 4-1/16" 5K spool installed just above the lower master valve. This essentially creates a coil tubing velocity string. See enclosed schematics provided by GE Vetco Gray. The upper portion of the GE Vetco production tree would be re -installed on top of this spool An X -profile or equivalent would be attached to the bottom of the coil to allow for a mechanical isolation plug to be set at the bottom of the coil using slickline. After installation, nitrogen gas or natural gas will be injected down the coil with returns being taken up the 4- 1/2" by coil annulus, and out the wing valve shown on the schematics. Or it is possible we would inject gas down the annulus and take returns up the coil. i • We will submit a Sundry Notice formerly detailing this plan when the details are finalized. , Please call myself at 907-350-9544 (cell) or Joe Longo with any questions or concerns you might have regarding this plan. Thanks you, Tom McKay BlueCrest a Schwartz, Guy L (DOA) 0 From: Schwartz, Guy L (DOA) Sent: Wednesday, June 28, 2017 4:36 PM To: Tom McKay Cc: 'Alecia Wood'; jlongo@bluecrestenergy.com; 'Vance Yoakum'; 'Tuttle, Elliott D'; 'Liam Zsolt' Subject: RE: UPDATE 3_H16 Form 10-403 Sundry Coil Velocity String_28June2017 Tom, Looks like it should work... thanks for all the effort to get this together. Will process rest of sundry now. Regards, Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office CONFIDENTIAUIY NOTICE: This email message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission 1AOGCq, 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 on 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 Guy Schwartz at (907-793-1226 1 or (Guv schworiz@alaska.aovi. From: Tom McKay[mailto:tom.mckay@bluecrestenergy.comj Sent: Wednesday, lune 28, 2017 2:55 PM To: Schwartz, Guy L (DOA) <guy.schwartz@alaska.gov> Cc:'Alecia Wood' <alecia.wood@ bluecrestenergy.com>; jlongo@bluecrestenergy.com;'Vance Yoakum' <fracops@bluecrestenergy.com>;'Tuttle, Elliott D' <Elliott.Tuttle@bakerhughes.com>;'Tom McKay' <tom.mckay@bluecrestenergy.com>; 'Liam Zsolt' <LZsolt@slb.com> Subject: UPDATE 3_H16 Form 10-403 Sundry Coil Velocity String_281une2017 Guy, a more detailed procedure and latest updated drawings have now been provided by Baker as enclosed with steps as follows: 1. MU connector, pull and pressure test 2. MU tailpipe assembly --21' in total length below Connector 3. RIH with tailpipe assembly, capable of pumping at any rate 4. Stop at desired depth, circulate kill weight around, 5. Shut in BOPs, strip off lubricator, hot tap, cut pipe. 6. Set bowl slips, dog collar on CT over Lubricator 7. Make up CTC with 2 3/8" EUE Pin, pull test against as needed a. MU Weatherford TIW valve, shut in 8. MU connector, CVs, Disco, GS Spear below Injector, Pull test pressure test. 9. BD TIW valve, MU GE hanger— drop %" ball into CT over well 10. Stab GS (then remove bowl, slips and dog collar) 11. Strip over tools, MU lubricator (QTS would be needed for PT) 0 0 12. Pump ball to seat, shear out assembly at 1600 psi 13. Land and set hanger Note Baker is calling this tool a Shear Out Triple Connector. A complete as -run diagram is included showing the dropped WLEG and the restriction being added to the pump out sub. Most of these components are having to be fabricated in local machine shops presently. As always, kind regards, Tom McKay Principal Drilling Engineer BlueCrest 907-350-9544 cell 907-754-9566 office tom.mckavP bl ucrestenergy.com From: Tom McKay [mailto:tom.mckayCo)bluecrestenergy,cci_m] Sent: Wednesday, June 28, 2017 2:24 PM To: 'Schwartz, Guy L (DOA)' Cc: 'Alecia Wood'; ilongoLd)bluecrestenergy.com; 'Vance Yoakum'; Tom McKay'; Tuttle, Elliott D' Subject: UPDATE 2_H16 Form 10-403 Sundry Coil Velocity Stnng_28June2017 Guy, enclosed are two (2) schematics received from Baker a short time ago. The specs for the tools and preparations needed, including a pre -perforated pup joint, are listed as follows: ' 1. Build 1 ea. 3 %2" Bullnose, w/0 hole — thread doesn't matter 2. Build one each modified pump out sub(001)— L-80 Material, a. There is marked changes (2 3/8" EUE 8rd, doesn't have to be ST -L could be 511 or a SA Pin to accept pup joint also in drawing set. 3. 3 %" pup to be provided by NSAK. Perforated pup as shown in drawing— changes are: 15 holes only (equivalent to 2 3/8" pipe). 4. Build one each modified pump out sub(002) — L-80 Material a. ID has been marked as change (.6875" ID for %" ball.) As I understand it, and slightly different than what I described in the last email, the general program is as follows: A. This Shear Out Sub would run in the well on the coil dry providing a barrier to pressure from below as the coil is run in the well. B. We can pump through the Shear Out Sub to kill the well when at TD, as needed, but no flow can come back much like a float in a drill string. C. The coil is then landed and cut with the barrier in place downhole. D. After the coil is cut, and well integrity is restored at surface, a ball is dropped / pumped down to shear out the flappers opening up the coil to flow from the reservoir. E. When the flow test is completed, above the shear out sub is a shoulder where the CIBP can land out, allowing a second downhole mechanical barrier to be restored while retrieving the coil. F. This set up allows us to always have a downhole mechanical barrier against well flow in place when running and retrieving the coil. Hopefully this satisfies the concerns. Kind regards, Tom McKay Principal Drilling Engineer BlueCrest • • 907-350-9544 cell 907-754-9566 office tom mckayPblucrestenerey.com From: Schwartz, Guy L (DOA) rmailto:auv.schwartzCobalaska.aov] Sent: Wednesday, June 28, 2017 1:31 PM To: Tom McKay Ce: 'Alecia Wood'; ilonooCa)bluecrestenergy com; 'Vance Yoakum' Subject: RE: UPDATE_H16 Form 10-403 Sundry Coil Velocity String_283une2017 Tom, Can you send me any kind of mechanical specs on this device when you get some available. Having trouble visualizing the ball drop system unless there is a sliding sleeve involved . Otherwise this sound fine if it works as outlined below. Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Com rniuioi: (AOGCC). State of Alaska and is for the sole use of the intended recipient (s). It may contain confidential and/or privileged intoirnation. The unauthorized review, use or disclosure of such information may violate state or federal low. It 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 Guy Schwartz at (907-793-1226) or (Q�1y schwart76 toska aov). From: Tom McKay [mailtoAorn mckay2 bluecrestenergy.corn] Sent: Wednesday, June 28, 2017 12:36 PM To: Schwartz, Guy L (DOA) <guy. schwa rtz@alaska.eov> Cc:'Alecia Wood' <alecia wood@bluecrestenerRy.com>; ilongo@bluecrestenergy.com;'Tom McKay' <tom.mckav@bluecrestenergy.com>;'Vance Yoakum' <Lracops@ bluecresteneray.com> Subject: UPDATE_H16 Form 10-403 Sundry Coil Velocity String_28June2017 Guy, in an effort to keep you better informed on this H16 coil tubing velocity string project, please be advised by way of update: 1. We are presently sourcing a ball drop / one-way check valve system to be placed near the end of the 2-3/8" coil. 2. As I understand it, this will enable us to kill the well, then drop a ball to land, seal and provide a mechanical barrier holding any unexpected well pressure from below. 3. The coil can then be cut above the BOP's with this downhole barrier in place while a coil connector is installed, thus enabling the TIW valve to be stabbed if needed at surface. 4. After surface equipment integrity has been restored, the ball can be blown out providing a flow path for the flow test, either down the coil tubing, or down the annulus, whichever is desired. 5. After the flow test, we can still have a no-go in the string where a CIBP could be pumped down and landed to provide a mechanical barrier while pulling and recovering the coil when the temporary flow back test is completed. We will provide you with further details on this as it comes available. Above is the general path forward as I understand it at this time. Thanks for your cooperation. Best regards, 0 Tom McKay Principal Drilling Engineer BlueCrest 907-350-9544 cell 907-754-9566 office tom mckav@blucrestenergy.com From: Schwartz, Guy L (DOA) [mailto7auv schwartz(oalaska.00v) Sent: Wednesday, June 28, 2017 9:15 AM To- Tom McKay Cc: 'Alecia Wood' Subject: RE: H16 Form 10-403 Sundry Coil Velocity String_273une2017 0 Tom, I did not see where you are placing any kind of profile/plug in the end of the coil tubing. The coil should have some kind of mechanical plug installed into order to break off the stack and cut it once in position. Same goes for when the string in pulled out after the project. Guy Schwartz Sr. Petroleum Engineer AOGCC 907-301-4533 cell 907-793-1226 office CONFIDENr1AWY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission IAOGCCI, State of Alaska and is for the sole use of the intended recipieni(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 ore 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 i1 to you, contact Guy Schwartz at (907-793-1226) or (Guy schwarizOalaskaaovl. From: Tom McKay fmailto tom mckav@bluecrestenergy.com) Sent: Tuesday, June 27, 2017 9:54 AM To: Schwartz, Guy L (DOA) <guy schwartz@alaska.gov> � ^n Cc:'Tom McKay' <tom mckay@bluecreSte ner9y,com>;'Joe Longo' < ^^� nergyestene'Josh a Hall' Wood <alecia wood@bluecrestenergy.cornX 'Vance Yoakum' <fracOps@bluecrestenergy.com>;'Joshua Hall' <joshua hall@bluecrestenergv.com>;'BlueCrest Foreman'<drillsitesupervisor@biuecrestenergy.com> Subject: H16 Form 10-403 Sundry Coil Velocity String_27June2017 Guy, as we have discussed, please find enclosed completed Form 10-403 Sundry Notice requesting AOGCC approval to install a 2-3/8" OD coil tubing velocity string in the BlueCrest H16 development oil well. The package includes a detailed procedure as well as several schematics showing the equipment layout. We will deliver two (2) copies of this package to your office later today. Please review and let me know if you have any questions or comments. Equipment is being mobilized presently, and we expect well operations on this to commence 28. The additional installed, FYI. wellhead spool to accommodate the coil tubing hanger as already been Thanks for your assistance, and best regards, Tom McKay 0 Principal Drilling Engineer BlueCrest 907-350-9544 cell 907-754-9566 office tom mckav@blucrestenerey.com 0 THE STATE Alaska Oil and Gas °fALASKA Conservation Commission GOVERNOR BILL WALKER Joseph Longo Drilling Manager B1ueCrest Alaska Operating, LLC 3301 C St., Ste. 202 Anchorage, AK 99503 Re: Hansen Field, Undefined Oil Pool, H-16 Permit to Drill Number: 216-076 Sundry Number: 317-298 Dear Mr. Longo: 333 west Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907:276.7542 www.00gcc.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 Commissioner DATED this Zq� of June, 2017. RBDMS ( -JUL - 6 2017 0 a STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION APPLICATION FOR SUNDRY APPROVALS 20 AAC 25.280 RECEIVED JUN 017 x71261 --,W/7 .A0GGC 1. Type of Request: Abandon ❑ Plug Perforations ❑ Fracture Stimulate D Repair Well El Operations shutdown EJ Suspend ❑ Perforste ❑ Other Stimulate ❑ Pull Tubing ❑ Change (ypr ved Program ❑ Plug for Redrill ❑ Perforate New Pool ❑ Re-enter Susp Well ❑ Atter Casing ❑ Olt e . met 2. Operator Name: 4. Current Well Class: 5. Permit to Drill Number "U BlueCrest Alaska Operating LLC Exploratory ❑ Development El- Stratigraphic ❑ Service ❑ 2 -o16— Ui✓ 3. Address: 6. AN Number. -/M &,Z-711 3301'C' Street, Suite 202, Anchorage, AK 99503 50-231-20051-00-00 7. If perforating: 8. Well Name and Number. Whet Regulation or Conservation Order governs well spacing in this pool? H1,6 Will planned perforations require a spacing exception? Yes ❑ No ❑ 9. Property Designation (Lease Number): 10. Field/Pool(s): ADL 18790; ADL 384403- ,a r..$c,(c Hansen Field, Undefined Oil Pool, H-16 PRESENT WELL CONDITION SUMMARY Total Depth MD (ft): Total Depth ND (ft): Effective Depth MD: Effective Depth TVD: MPSP (psi): Plugs (MD): Junk (MD): 23,415' 7116' 22,741' 7,088' 2,773 Casing Length Size MD TVD Burst Collapse Structural WA N/A WA WA WA N/A Conductor 146' 20' 18T 18i WA WA Surface 4,137 13-3/8' 4,171 3,175' 5,380 2,670 Intermediate 14,724' 9-5/8'47# 153-5# 14,764' 7,086' 9,440 / 10,900 5,300 / 7,950 Production WA WA WA WA WA WA Liner 8,180' 4-1/2' 22,794' 7,089' 14,420 14,350 Perforation Depth MD (ft): Perforation Depth TVD (ft): Tubing Size: Tubing Grade: Tubing MD (ft): WA WA 4.1/2' Pilo 14614' Packers and SSSV Type: Packers and SSSV MD (ft) and TVD (ft): Swell Packers / No SSSV N/A 12. Attachments: Proposal Summary r Wellbore schematic 13. Well Cie" after proposed work: Detailed Operations Program ❑✓ BOP Sketch ❑ Exploratory ❑ Sbratigraphio ❑ Development ❑� Service ❑ 14. Estimated Date for 15. Well Status after proposed work: Commencing Operations: 29,1un 17 OIL Q • WINJ ❑ WDSPL ❑ Suspended ❑ GAS ❑ WAG ❑ GSTOR ❑ SPLUG ❑ 16. Verbal Approval: Date: 20 -Jun -17 Commission Representative: Guy Schwartz GINJ ❑ OF Shutdown ❑ Abandoned ❑ 17. 1 hereby certify that the foregoing is true and the procedure approved herein will not be deviated from without prior written approval. Authorized Name: Joseph Longo Contact Name: Tom McKay Authorized Title: Drill) g Manager Contact Email: tom.mcka bluecrestener .com Contact Phone: 907-360-9544 Authorized Signature Date: O'G PG COMMISSIO SE ONLY Conditions of approve . tify Co ion so that a representative may witness Sundry Number. 9 c: -r / Plug Integrity ❑ BOP Test [�J Mechanical Integrity Teat ❑ Location Clearance ❑ .i.'S� Z.4 (`� Other. kl-{OOo /t5c /3,1P (.e C�. 0,i 'c �J •,�J Det /nf ///0 V Post Initial Injection MIT Req'd? Yes E]No ❑ RBDMS,. , JUL - 6 2017 Spacing Exception Required? Yes Subsequent Form Required: ' ' 1 lii l� '`l r-1Nod APPROVED BY Approved by: COMMISSIONER THE COMMISSION Date: G - 2_c% - l ,Z!, ZR-/ / submit Form and Form 10-403 Raviaed 4=1 �l 7 Ipt idet� Ik valld for 12 months from the date of approval. Atte"aannC� Dupficue '� • H-16 Coil Tubing Velocity String Running Procedure Pre -Job Phase Pre job safety meetings will be held w/all crews and company representatives prior to all operations below. Include personnel from all SIMOPS in progress at the pad. Discuss dropped objects, working with pressure, working at heights and safe zones if well control issues should arise. Please check co-workers for PPE required. Operations Phase 1. Rig up GEOG Vetco Gray to set BPV in tubing hangar. Reference attached schematics. 2. Pressure test against BPV and lower master valve (LMV) to 1500 psi. Record results. p 3. NOTE: In order to test the BPV from above, a 2 -way check valve would need to be installed in S_lU the BPV. kXy 6l 4. Break 4-1/16" 5K flange above LMV and remove upper xmas tree using the crane. 5. Install 4-1/16" 5K spool with 2-1/16" 5K annulus valve as shown on proposed tree schematic. 6. Re -install upper xmas tree on top of this spool. s oo' 7. Once tree is re -configured and pressure tested to j 5Wpsi, pull BPV. 8. Rig up SLB CT unit. a. Contact AOGCC 24 hrs prior to BOP test. AOGCC may witness test. 9. Test all BOPE equipment; 250 psi low, 4,000 psi high. 10. Rig up to kill the well with clean kill weight brine. 11. Monitor the well for flow and ensure well conditions are static. 12. Pick up injector head and lubricator 13. M/CI lower BHA consisting of the following: a. Baker Oil Tools external slip connector for 2-3/8" coil tubing. 5 b. Wireline re-entry guide. 14. Stab injector head onto well. Pressure test lubricator to 250 low, 4,000 psi high. 15. RIH to approximately 14,000' 16. Close pipe slips and manually lock rams. a. Ensure accurate weights are recorded prior to closing rams. b. Perform push/pull against slips 17. Perform 30 -minute no -flow above rams to ensure rams are holding. 18. Once good no flow is observed, prepare to strip off. a. Collar up lubricator. b. Drop chain traction and increase chain tension. c. Slip chains in the in-hole direction. d. Once chains are slipping, crane operator will pick up leaving a couple foot window between the top of the BOPS and the bottom of the lubricator. i. Any sudden/notable weight change observed by the crane operator or the CT (Coil Tubing) supervisor should result in an immediate all stop. 19. Hot tap and perform 30 -minute no -flow to ensure inside the CT string is dead. 20. Once no -flow is observed and string is confirmed to be in a static state, cut CT. a. Ensure cut is a couple feet above BOPS to ensure there is plenty of room to make up a connector twice if needed. 21. Swing injector to the side so CTC and_G=spe_r can be made up to the CT sticking out of the lubricator while the hanger assembly is being made up to the stub end sticking out of the BOPS. 22. Make up CTC, X -over an hanger to stub end sticking out of BOPs. a. A TIW valve from Weatherford will be on standby to make up to the CTC, made up to the stub end sticking out of the BOPS, in case well conditions change. 23. Stab the injector head and lubricator back onto the BOPS. 24. RIH and latch G -spear into the hanger and confirm latch. 25. PIU string hanging weight recorded prior to closing the BOPs. 26. Open the equalizing port. 27. Manually unlock rams and open pipes then slips. 28. RIH measured amount to the lockdown screws. 29. Land Hangar in lockdown assembly to GE specifications 30. Lockdown and energize seals. 31. Release G -spear from hanger and pull above swab valve. 32. Close swab valve 33. Rig down CTU 34. Rig up to facility to inject gas down coil tubing and take returns up coil by 4-1/2" tubing annulus to surface facilities. 35. Connect two (2) NRP-Jones high pressure (5K) flexible hoses to injection line and return line using FIG -1502 unions and flanges. These hoses are 15' long, and are approved by the AOGCC for a temporary flow back test on this well. They also meet all SAE 10OR13 requirements. In addition, a choke will be installed on the return line. Since flexible temporary hoses are being used, 24-hour supervision of this operation is required by the AOGCC, and a log book will be required where the Operators can inspect the set up every two (2) hours and sign off that there are no leaks and that pressures are considered normal. 36. As shown on the attached surface equipment schematic, there are Surface Safety Valves (SSV's) installed on both the tubing and annulus sides, one above the LMV on the tubing sides, and one outboard of the wing valve on the annulus side. Both are rated to 5K, and both are hydraulic and can be operated from the wellhead control panel. 37. Continue HH16 flow back test /using facility gas lift supply and 2-3/8" coil tu�biinng velocity string. /v2 7G K•i��•�f/, t -'UL/•.. 7e TWM, 27June2017 � SSSv Wu'v i� Zo p 0 Regg, James B (DOA) From: AOGCC Inspection Request Posted At: Saturday, July 1, 2017 4:00 PM Conversation: AOGCC Inspection Request - Submission (2017-07-01 15:59:50) " Posted To: AOGCC Inspection Request Subject: AOGCC Inspection Request - Submission (2017-07-01 15:59:50) Submission Date : 2017-07-0115:59:50 IP Address: 65.74.21.202 Type of Test Requested:: SVS Requested Time for Inspection : 07-03-2017 4:00 PM Location : Anchor Point Name : Nate Johnson E-mail : nate.johnson@bluecrestenergy.com Phone Number: (907) 7549582 Company : Bluecrest Energy Remarks : Testing of SVS on Hansen 16 well prior to bringing it online. View article... 1 Regg, James B (DOA) From: Regg, James B (DOA) Sent: Sunday, July 2, 2017 1:24 PM To: Vance Yoakum Subject: RE: AOGCC Test Witness Notification Request: SVS, Anchor Point So this is a flowback before regular production? If so I concur. Sent from my Samsung Galaxy smartphone. -------- Original message -------- From: Vance Yoakum <fracops@bluecrestenergy.com> Date: 07/02/2017 11:33 AM (GMT -09:00) To: "Begg, James B (DOA)" <jim.regg@alaska.gov>, "Schwartz, Guy L (DOA)" <guy.schwartz@alaska.gov> Cc: 'tom mckay' <tom.mckay@bluecrestenergy.com>,'Alecia Wood' <alecia.wood @bluecrestenergy.com>, 'Joseph Longo' <jlongo@bluecrestenergy.com>, 'Frac ops' <fracops@bluecrestenergy.com>, nate.johnson@bluecrestenergy.com Subject: FW: AOGCC Test Witness Notification Request: SVS, Anchor Point -------- Original message -------- From: Vance Yoakum <fracops@bluecrestenergy.com> Date: 07/02/2017 11:33 AM (GMT -09:00) To: "Regg, James B (DOA)" <jim.regg@alaska.gov>, "Schwartz, Guy L (DOA)" <guy.schwartz@alaska.gov> Cc: 'tom mckay' <tom.mckay@bluecrestenergy.com>,'Alecia Wood' <alecia.woad@bluecrestenergy.com>,'Joseph Longo' <jlongo@bluecrestenergy.com>, 'Frac ops' <fracops@bluecrestenergy.com>, nate.johnson@bluecrestenergy.com Subject: FW: AOGCC Test Witness Notification Request: SVS, Anchor Point Jim as we haven't received any response from you, I believe Bluecrest can move forward kicking H-16 off on 7/3/2017, due to the following points. We have an approved sundry to produce the well without an SSSV. I've spoken to Guy Schwartz he concurs there will not be an SSSV. We've met all the requirements under the sundry. Please let us know if I'm unaware of any other issues we need to follow up on. We're anticipating commencing the Flowback 7/3 N 9:00am. There will be an additional notification sent out, to test the SSV's within 5 days of bringing the well online. Thanks Vance Yoakum From: Vance Yoakum[mailto•Frac0ps(albluecrestenergy.com] Sent: Sunday, July 02, 2017 7:33 AM To: 'Nate Johnson'; 'Regg, James B (DOA)' Cc: 'tom mckay'; 'Joseph Longo'; 'Alecia Wood' Subject: RE: AOGCC Test Witness Notification Request: SVS, Anchor Point Jim it's our understanding the SSSV requirement was waived by the AOGCC. Is this a question about the SSV's? Vance From: Nate Johnson [mailto•nate iohnson(albluecresteneray.com] Sent: Sunday, July 02, 2017 7:20 AM To: Frac Ops Subject: Fwd: AOGCC Test Witness Notification Request: SVS, Anchor Point ---------- Forwarded message ---------- From: Regg, James B (DOA) <iim.regg@alaska.gov_> Date: Sat, Jul 1, 2017 at 11:11 PM Subject: RE: AOGCC Test Witness Notification Request: SVS, Anchor Point To: "nate.iohnson@bluecrestenergy.com" <nate.iohnson@bluecrestenergy.com> Cc: "Schwartz, Guy L (DOA)" <guy.schwartz alaska.gov> Is the SSSV configured the same as Hansen 1 (closing on ESD only)? Was that approved by AOGCC? Sent from my Samsung Galaxy smartphone. -------- Original message -------- From: Nate Johnson <noreply@formresponse.com> Date: 07/01/2017 3:59 PM (GMT -09:00) To: DOA AOGCC Prudhoe Bay <doa aoacc Prudhoe bav@alaska.Rov> Subject: AOGCC Test Witness Notification Request: SVS, Anchor Point 0 Question Answer Type of Test Requested: SVS Requested Time for 07-03-2017 4:00 PM Inspection Location Anchor Point Name Nate Johnson E-mail nate iohnsonPbluecresteneray.com Phone Number (907) 7549582 Company Bluecrest Energy Other Information: Testing of SVS on Hansen 16 well prior to bringing it online. Submission ID: 3747627902024132072 3 Regg, James B (DOA) From: AOGCC Inspection Request Posted At: Monday, July 3, 2017 10:26 AM Conversation: AOGCC Inspection Request - Submission (2017-07-03 10:25:46) Posted To: AOGCC Inspection Request Subject: AOGCC Inspection Request - Submission (2017-07-03 10:25:46) Submission Date : 2017-07-03 10:25:46 IP Address : 65.74.21.202 Type of Test Requested:: SVS Requested Time for inspection : 07-06-2017 11:00 AM Location : Anchor Point Name : Nate Johnson E-mail : nate.johnson@bluecrestenergy.com Phone Number: (907) 7549582 Company: Bluecrest Energy Remarks : Due to operations not progressing as expected, we will like to reschedule the SVS testing for July 06th at 11am.Thanks View article... 1 Regg, James B (DOA) From: Regg, James B (DOA) Sent: Wednesday, July 5, 2017 3:04 PM To: nate.johnson@bluecrestenergy.com Subject: RE: AOGCC Test Witness Notification Request: SVS, Anchor Point AOGCC witness is waived; we defer witness until finished with post frac cleanup and SSSV has been installed. We will work with you to schedule the SVS test so it coincides with another AOGCC visit (meter prove; BOPE test) Jim Regg Supervisor, Inspections AOGCC 333 W.7'h Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or iim reaz alaska.¢ov. From: Nate Johnson[mailto:noreply @formresponse -co ml Sent: Monday, July 3, 2017 10:26 AM To: DOA AOGCC Prudhoe Bay<doa.aogcc.prudhoe. bay@alaska.gov> Subject: AOGCC Test Witness Notification Request: SVS, Anchor Point Question Type of Test Requested: Requested Time for Inspection Location Name E-mail Phone Number Company other information: Answer SVS 07-06-2017 11:00 AM Anchor Point Nate Johnson nate.johnson@bluecrestenergy.com (907) 7549582 Bluecrest Energy Due to operations not progressing as expected, we will like to reschedule the SVS testing for July 06th at 11am. Thanks Submission ID: 3749155452023232252 Regg James B (DOA) From: Brooks, Phoebe L (DOA) Sent: Wednesday, October 25, 2017 10:14 AM To: Joshua Hall Cc: Regg, James B (DOA) Subject: BlueCrest SVS test report - Hansen Josh, I was reviewing September reporting (due by Oct. 15`h) and I didn't see anything submitted for Hansen 1A (the last test was completed in March, with the next 180 test due in September); will you forward the test report? Thank you, Phoebe Phoebe Brooks Statistical Technician II Alaska Oil and Gas Conservation Commission Phone: 907-793-1242 Fax: 907-276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Phoebe Brooks at 907-793-1242 or phoebe brooks®alaska.eov. Re92, James B (DOA) From: Brooks, Phoebe L (DOA) Sent: Thursday, October 26, 2017 11:19 AM To: Regg, James B (DOA) Subject: RE: Cl Inspections follow up I checked the SVS inspection records and we did not receive any report for Moquawkie 4 (PTD #2070840) during the time they were showing production (the last report we received for Moquawkie was in November 2016). 1 also do not have any record of receiving any SVS report for Hansen H-16 (PTD #2160760). It looks like they started producing in May 2017 (below). Production Recur& Keport Vate field Pool ." Method Type Oil Produced __.. . Water Produced . Gas Produced . Producing Dacs 99401, 290100 .2. 1 6862 4986 45019 .. _ " 30 s x201' 29APM 2 -3Bs ;� - 1 Ni, :§01W ! :-8' 158.5 5055 :! 61 '01' 240109 I ! l:?: ,-.- 388 512017 '90100 1 I 1? ;oro 1 , The last report we have for Hansen was for well 1A (PTD #2030040) on 3/23/17. Phoebe Brooks Statistical Technician II Alaska Oil and Gas Conservation Commission Phone: 907-793-1242 Fax: 907-276-7542 CONFIDENTIALITY NOTICE: This e -mai( 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 Phoebe Brooks at 907-793-1242 or phoebe.brooks@alaska.gov. From: Brooks, Phoebe L (DOA) Sent: Wednesday, October 25, 2017 11:32 AM To: Regg, James B (DOA) <jim.regg @alaska.gov> Subject: RE: Cl Inspections Please see the attached s/s. I've included everything I've received thus far (which is through September, with one report received for October - MGS Q. I highlighted the MGS A & MGS C cells in the Jul -Dec column since these were not tested during thenormal test month cycle- MGS A was tested on 9/26/17 & MGS C was tested 10/09/17 (1 included the email from Larry Greenstein re: startup of the platforms). I added a line for Ninilchik Kalotsa and removed the extra Kitchen Lights line from the Onshore section (I was including the Kitchen Lights data here instead of under Julius R KLU). I have questions marks for Hansen since we should have received a report for September (I sent an email out requesting the test report) as well as Moquawkie ... they are due for their pad test this month, however they had production on one well - 4 (PTD #2070840) one day in April and June as well as 25 days in May (below). Report Date _ Field Pool - Method _ i�pe 0,1 Produced UaterProduced _ Cas Produce( �soo s a s 1 Mt- ot 1 201- 1 `1SSW S - n 0 0 61201- 52SSOo 1 2 0 0 _ t2S100 ! - 0 9 "-9 1 201- 323500 S 2 0 0 0 Phoebe Brooks Statistical Technician II Alaska Oil and Gas Conservation Commission Phone: 907-793-1242 Fax: 907-276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Phoebe Brooks at 907-793-1242 or lihoebe.brooks@alaska.gov. From: Regg, James B (DOA) Sent: Tuesday, October 24, 2017 10:21 AM To: Brooks, Phoebe L (DOA) <phoebe.brooks@alaska.eov> Subject: Cl Inspections Please update; thank you. Jim Regg Supervisor, Inspections AOGCC 333 W.7th Ave, Suite 100 Anchorage, AK 99501 907-793-1236 Q CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC(, State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or iim.re¢e@alaska.eov. 2 Regg, James B (DOA) From: AOGCC Inspection Request Posted At: Tuesday, November 7, 2017 2:23 PM Conversation: AOGCC Inspection Request - Submission (2017-11-07 14:23:12) Posted To: AOGCC Inspection Request Subject: AOGCC Inspection Request - Submission (2017-11-07 14:23:12) Submission Date : 2017-11-07 14:23:12 IP Address : 65.74.21.202 Type of Test Requested:: SVS Requested Time for Inspection : 11-09-2017 1:00 PM Location : Blue Crest Energy, Cosmopolitan Name: Josh Hall E-mail : joshua.hall@bluecrestenergy.com Phone Number: (907) 398-9340 Company: BCE Remarks : This SVS test is for H-16 well that is currently under temporary flow approval and has no SSSV installed. Only the SSV will be tested View article... 1 0 0 MEMORANDUM State of Alaska Alaska Oil and Gas Conservation Commission TO: Jim Regg '-Pefq I(Ji47 DATE: 11/9/2017 P. I. Supervisor FROM: Matt Herrera SUBJECT: H2S Contingency Plan Petroleum Inspector Hansen H-16 BlueCrest PTD 2160760; Sundry 317-298 11/9/2017: 1 traveled to the BlueCrest Hansen Pad to test safety valve system (SVS) on well H-16. This well has a temporary subsurface safety valve (SSSV) waiver due to the velocity string being used during flowback ops (post frac). SVS test results are covered by a separate report. EXPRO is conducting the flowback - temporary flowline to their test manifold. There has been an indication of H2S present in the production from Hansen H-16. Bluecrest indicated they are in the process of obtaining the services of Baker Chemical Company to develop a strategy to inject a chemical to help alleviate any H2S presence in their production. They currently are sampling weekly via Draeger Tubes. A liquid sample y is taken and the Draeger is used to determine "breakout" gas from that sample. Samples test results from 11/1/17: - Flowline: 2.0 PPM - - Separator: 1.0 PPM They were instructed to monitor samples weekly and have available for AOGCC personnel. I also confirmed that the required H2S contingency measures are in place at Hansen; refer to the attached email. Attachments: 2 Photos Email (11/14/2017) regarding H2S contingencies 2017-1109—Well—Hansen—H- 16—MS—rnh.doex Pagel of 2 F� LJ - ` /SEAN PARNELL, GOVERNOR ALASKA (DIAL .4,m) GAS / 333 W. 7th AVENUE, SUITE 100 CONSERVATION C®3Il, US SffON ANCHORAGE. ALASKA 99501-3539 PHONE (907) 279-1433 ` FAX (907)276-7542, December 16, 2010 AOGCC Industry Guidance Bulletin No. 10-004 Safety Valve Systems The Alaska Oil and Gas Conservation Commission (Commission) provides the >following supplement to well safety valve system (SVS) requirements as outlined in readopted regulation 20 AAC 25.265 that became effective December 3, 2010 (SVS regulations). Legacy Documents The following legacy documents relating to well SVS are rescinded: - "No -flow test to determine that a well is not capable of unassisted flow"; Field Operation Procedure dated April 24, 1992; - "Clarification of AOGCC Policy, SVS Failures" dated February 17, 1994; - "AOGCC Policy, SVS Failures" dated March 30, 1994; - Commission letter dated November 14, 1995 specifying the SVS component failure rate that triggers increased testing; - "Safety Valve System Guidelines" dated August 12, 1998; - "North Slope SSSV Testing'; letter from Arco Alaska Inc. dated August 29, 1998 as annotated by the Commission on September 2, 1998; -"Subsurface Safety Valves", AOGCC Guidance Bulletin 06-04 dated June 15, 2006. The Commission also rescinds all or part of the rules specific to SVS requirements (also referred to as "automatic shut-in equipment') which were part of existing Conservation Orders. Refer to Commission Order No. 66 for details(http://doa.alaska.¢ov/oec/orcici-s/conio/othei-index.litml) Safety Valve System [20 AAC 25.265(b); 25.265(c); 25.265(d); 25.265(f)] A SVS includes the surface safety valve, the low pressure )mechanical or electrical detection device (and associated hydraulic and electrical lines), and when required by regulation, the subsurface safety valve. Application Process [20 AAC 25.265(c)(8); 25.265(o)] 20 AAC 25.265(c)(8) requires an operator to gain Commission approval to keep a well in operation when the well SVS does not include the required components. Well -specific applications should be made by submitting a "Application for Sundry Approvals", Form 10-403, and will be handled by the Commission as a request for a variance or waiver as defined in 20 AAC 25.265(0). Refer also to the paragraph titled "Variances and Waivers" toward the end of this guidance bulletin. Guidance Bulletin 10-004 Safety Valve Systems Subsurface Controlled Subsurface Safety Valve [20 AAC 25.265(d)] Approval from the Commission is required for alternate subsurface safety valves (e.g., subsurface -controlled; telemetry controlled). A request for approval must include information necessary to establish that the alternate approach provides at least an equivalent level of protection as the required subsurface safety valve. Request should include — as appropriate — the mechanical configuration of the valve and specifications, fluid flow composition, pressures, model used to size the valve, trip pressure, test evaluation and any other information that establishes the suitability of the valve for the intended service. Performance testing procedures should also be included in the request for approval. The testing frequency for alternate subsurface safety valves will be established by the Commission. The operator shall maintain an inventory of all wells with alternate subsurface safety valves installed showing well, date of installation, type of valve, last test date and test result. Functional Hardware for a Subsurface Safety Valve [20 AAC 25.265(f)] A landing nipple or similar equipment that enables the installation and operation of a subsurface - controlled subsurface safety valve is considered functional hardware as referenced in 20 AAC 25.265(f). Functional hardware is not limited to equipment necessary for the installation and operation of a surface -controlled subsurface safety valve. Test Definitions [20 AAC 25.265(h)] "Function test" means to actuate a component to demonstrate its proper functioning without subjecting it to pressure; "Performance test" means to function test the mechanical or electrical actuating device, and to both actuate a component and demonstrate its ability to effect a pressure seal. Calibrated Test Pressure Gauge [20 AAC 25.265(h)(1)] The use of a calibrated test gauge of suitable range and accuracy is required for SVS performance testing. Current calibration should be evident with a label or other documentation. Suitable range means the pressure readings are displayed within the center third of the full scale; suitable accuracy means the gauge is capable of measuring pressures that are less than or equal to 1 percent of the gauge's full scale pressure range. Test Cycle [20 AAC 25.265(h)(5)] SVS must be tested every 6 months not to exceed 210 days. The regulatory requirement is 2 tests per year. The additional 30 days (beyond a 6 -month test interval) is provided for contingencies such as weather delays, scheduling conflicts, simultaneous activities, etc. that could prevent testing on a strict anniversary date. Absent communication from the operator, the Commission will establish the months SVS testing is due. The normal test month for a grouping of wells (drillsite; well pad; administratively -grouped pads by the Commission where individual pads have small numbers of wells; etc.; referred to collectively as a "pad test") will not be adjusted unless approved by the Commission. All wells that require a functional SVS must be tested at the time of a pad test, including any wells that have been brought on line since the previous pad test. Guidance Bulletin 10-004 Safety Valve Systems A failure rate during performance testing that exceeds 10 percent will result in the test frequency being increased to once every 90 days. Miscellaneous tests will be combined with the most recent pad test in calculating a failure rate. In response to a failure rate greater than 10 percent, the Commission will issue a letter instructing the operator to test at an increased frequency. Consecutive pad test failure rates exceeding 10 percent will result in the 90 -day testing frequency being extended indefinitely until the Commission is satisfied with the test performance. Otherwise, a successful test following the high failure rate will allow the pad to return to the normal pad test cycle. A single component failure will not result in a pad being placed on an increased testing frequency. In the case of small numbers of wells (and thus tested SVS components) the Commission will consider combining pads based on geography, reservoir proximity, or other logical criteria. A request for grouping by an operator must be justified other than from a purely statistical basis. The Commission reserves the right to adjust the test frequency for reasons other than test performance (e.g., repeat failures of the same component on the same well). Repeat failure rates exceeding 10 percent that remain unaddressed by an operator may result in enforcement action beyond the increased testing cycle. Reporting Well Pressures Associated with Testing [20 AAC 25.265(h)(9); 25.265(h)(10)] The system actuation pressure of the low-pressure mechanical or electrical detection device installed on a producing well is based on the separator inlet pressure or 25 percent of the flowing tubing pressure, whichever is greater. For injection wells, the actuation pressure must be greater than 50 percent of the injection tubing pressure. Performance test reports required by 20 AAC 25.265(h)(7) must include the tubing pressure (the well's flowline pressure for high pressure choked wells) when that is the determining pressure for a performance test of the low-pressure mechanical or electrical detection device. If tubing pressure is used, the report forth should leave the separator pressure blank and include the tubing pressure in the "Well Pressures" section of the test report form provided by the Commission. Preventive Maintenance [20 AAC 25.265(h)(13)] Performance test results must be an accurate representation of the actual SVS operating reliability. Preventive maintenance is a necessary part of ensuring functional reliability and includes activities such as actuating valves and pilots, and greasing SVS components. These preventive maintenance activities — if performed in close time proximity to the SVS test — have the potential to improperly influence test results. The Commission will reschedule witness of SVS tests if there is evidence suggesting test results have been improperly influenced, or may consider other actions such as unplanned/unscheduled SVS tests. No -Flow Test Procedure and Equipment Arrangement [20 AAC 25.265(k)] The purpose of a no -flow test is to demonstrate that a well is not capable of unassisted flow of hydrocarbons so that a required subsurface safety valve may be removed. Steps involved in the no -flow test are as follows unless another test procedure is approved by the Commission: 1. Artificial lift must be shutdown and the well pressure bled prior to the arrival of a Commission Inspector. 7 Guidance Bulletin 10-004 Safety Valve Systems 2. After pressure is bled, the well must be lined up to an atmospheric tank or vessel capable of capturing any produced fluid during the test. 3. A minimum 3 -hour witnessed testis required. Suggested equipment configuration for the no -flow test is shown in Appendix A. All equipment must be properly sized to allow for accurate measurement of pressure and flow rate, and in good working order. The Commission requires the pressure gauge(s) and flow meter(s) used in conducting a no -flow test to have current calibrations. Applicability of Variances and Waivers [20 AAC 25.265(o)] Requests for variances and waivers for individual wells should be submitted to the Commission on Form 10-403, "Application for Sundry Approvals". Requests that are broader than individual wells (e.g., field -wide) should be provided by letter to the Commission. The decision to approve the variance or waiver request is based on the justification provided by the operator. A copy of the Commission -approved variance or waiver should be available during a Commission inspection. Please share this Guidance Bulletin with all appropriate members of your organizations. Questions or discussion regarding this guidance bulletin should be directed to James Regg at (907) 793-1236. Sincerely, Daniel T. Seamount, Jr. Chair, Commissioner Attachment lI Guidance Bulletin 10-004 Safety Valve Systems Low pressure gauge; 1 -psi divisions Appendix A - No Flow Test Equipment /<-tum Full Opening Valve Flow Meter Swage Hose or flexible g line to atmospheric connection to tank (e.g., bucket Tree Cap with water) Hansen H-16 PTD 2160760 Report Date Field/Pool Method Type Oil Produced Water Produced Gas Produced I Producing Days 01 -Nov -17 290100 1 1 4400 1510 48518 30 01 -Oct -17 290100 2 1 7182 3166 53757 31 01 -Sep -17 290100 2 1 8862 4986 45018 30 01 -Aug -17 290100 2 1 7339 5243 20238 22 01 -Jul -17 290100 2 1 4787 5583 6053 21 01 -Jun -17 290100 1 1 1293 12227 388 9 01 -May -17 290100 I 1 12 2436 4 3