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Home My WebLink AboutCO 559 AConservation Order 559A PRUDHOE BAY, PUT RIVER 1. June 20, 2018 BP Exploration (Alaska), Inc. request to amend CO 559 for to authorize down -hole commingling of production from Put River and Prudhoe Bay Oil Pools 2. June 28, 2018 Notice of Hearing, affidavit of publication, address and e-mail 3. August 6, 2018 4. December 17, 2018 5. December 18, 2018 6. January 17, 2019 7. February 12, 2019 8. November 15, 2019 9. February 24, 2020 10. May 21, 2020 11. ----------------- Notifications Transcript of hearing and Sign In Sheet for Hearing BPXA request for an extension of time to file reconsideration AOGCC Letter granted 2/17/18 request BPXA Request for Reconsideration Letter accompanying amended Order Admin Approval contracting and redefining the Put River Area and request for GOR (co 559A.001) BPXA Request to amend CO 492 rule 3(a) and 6(a) (co559A.002) Notice of Hearing and mailing Emails STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7`^ Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF BP ) Conservation Order No. 559A Amended EXPLORATION (ALASKA) INC. ) on Reconsideration for an order to allow pool wide ) downhole commingling between the ) Docket Number: CO -18-016 Put River and Prudhoe Oil Pools ) Prudhoe Bay Field Put River Oil Pool nune pro tune December 13, 2018 February 12, 2019 IT APPEARING THAT: By letter dated June 22, 2018, BP Exploration (Alaska), Inc. (BPXA), operator of the Prudhoe Bay Unit, applied for an amendment to Conservation Order (CO) No. 341F and CO No. 559 to allow for commingled downhole production for wells completed in the Put River and Prudhoe Oil Pools. 2. The Alaska Oil and Gas Conservation Commission (AOGCC) published notice of opportunity for public hearing in the Anchorage Daily News on June 28, 2018. 3. The AOGCC held the public hearing on BPXA's application on August 6, 2018, at the Alaska Oil and Gas Conservation Commission offices at 333 West 7 1 Avenue, Suite 100, Anchorage, Alaska 99501. 4. The AOGCC received no protests to or comments on BPXA's application. FINDINGS: 1. Put River Oil Pool The Put River Oil Pool (PROP) overlies the Prudhoe Oil Pool (POP) and is comprised of three lobes (Central, Southern, and Western) of the Put River Sandstone. A fourth lobe, the Northern Lobe, is in hydraulic communication with the POP and is included as part of the POP. The Southern Lobe has been on somewhat regular oil production since 1999 with an active waterflood. Appraisal activities conducted in 2005 identified the presence of oil and gas condensate in the Central and Western Lobes respectively but further development was not pursued at that time in part due to low flowrates that resulted in operational challenges associated with hydrate deposition. The Central Lobe contains and estimate 1.1 to 2.7 MMBO in place and the Western Lobe contains Conservation Order 559A February 12, 2019 Page 2 of 9 an estimated 69.6 to 104.4 BCF in place with a condensate yield of approximately 40 bbls/MMCF, which yields condensate in place values of between 2.8 and 4.2 MMBC. 2. Prudhoe Oil Pool The POP, which is defined by CO No. 341F, underlies the PROP and consists of a massive oil rim overlain by a massive gas cap that has been in production since 1977 and has numerous enhanced recovery projects occurring in the various parts of the field. Generally speaking POP wells are very productive due to the high-quality reservoir rocks encountered in the pool. 3. Potential for Commin¢lin2 Several wells penetrate the PROP and the POP and would be candidates for downhole commingling. Commingling of production in these wellbores should allow for increased flowrates and flow velocity in the tubing and reduce the potential for the hydrate deposition that is problematic in production from wells completed solely in the PROP. Since standalone production of the Central and Western Lobes is not viable due to hydrate deposition those reserves are essentially trapped. Commingling of production with the POP will allow these resources to be recovered. 4. Potential for Crossflow There is potential of crossflow between the POP and the PROP if a commingled well is shut in. For a short duration shut in period the crossflow is not expected to be significant. In the event of a longer duration shut in period the PROP and POP could be mechanically isolated downhole to prevent crossflow. 5. Production Allocation Downhole fluid samples will be collected from each pool for the purposes of geochemical analysis. During the first six months of commingled production a production log, or differential well test, will be run on the well and a geochemical analysis performed to verify the accuracy of geochemical analysis for production allocation purposes. Semi-annual geochemical analyses will be conducted for production allocation purposes and production logs or differential well tests will be run as needed to assess production anomalies. 6. Reservoir Surveillance Bottomhole pressure surveys for the POP would only be conducted in wells that are not commingled with the PROP. Bottomhole pressure surveys for the PROP can be obtained by setting a plug to separate the POP and PROP. CONCLUSIONS: 1. Downhole commingling of production between the PROP and POP should allow for improved resource recovery from the Prudhoe Bay Unit by allowing for the development of up to 6.9 million barrels of hydrocarbon liquids in place within the PROP that would not be recoverable as a standalone development. Conservation Order 559A February 12, 2019 Page 3 of 9 2. Production allocation via geochemical analysis in wells commingled downhole has proven to provide adequate results for production allocation purposes elsewhere in the field. 3. Proper reservoir surveillance and monitoring can be accomplished by setting downhole plugs to isolate the PROP and POP so that reservoir pressures in the PROP can be obtained. There's a significant number of wells in the area that penetrate only the POP so losing the ability to obtained reservoir pressures in the POP in the commingled wells will not impact reservoir surveillance or monitoring. 4. In the event of a prolonged period of shut in for a commingled well the PROP and POP can be mechanically isolated downhole to prevent crossflow between the reservoirs. NOW, THEREFORE, IT IS ORDERED THAT: Conservation Order No. 559 is superseded and its record incorporated by reference in this order. CO No. 559.001, CO No. 559.007, CO No. 559.008, and CO No. 559.009 remain in effect, all other administrative approvals issued under CO No. 559 are superseded. In addition to statewide requirements under 20 AAC 25 (to the extent not superseded by these rules), the following rules apply to the Put River Oil Pool within the following described area: UMIAT MERIDIAN TI IN R14E Sections: 3, 4, 9, 10, 1l(SW/4), 14(W/2), 15, 16, 21, 22, 23(W/2 and SE/4), 25(S/2),26, 27, 28, 33, 34, 35, 36 T11N R15E Sections: 29(S/2), 30(S/2), 31, 32 TION R14E Sections: 1, 2, 3, 11, 12, 13, 14 T10N R15E Sections: 5, 6, 7, 8, 17, 18 Rule 1 Pool Definition (Restated from CO No. 559) The Put River Oil Pool is defined as the sandstone reservoirs in the Southern, Central and Western lobes that correlate with the interval 9,638 to 9,719 measured feet on the Borehole Compensated Sonic Log, Run 2, Dated September 28, 1975, in the Atlantic Richfield - Exxon NGI No. 1 well, but excluding the Northern Lobe reservoirs that are in pressure communication with the Prudhoe Oil Pool gas cap in the Sag River Formation. Conservation Order 559A February 12, 2019 Page 4 of 9 (a) In addition to the requirements of 20 AAC 25.030, the conductor casing must be set at least 75' TVD below the surface. (b) In addition to the requirements of 20 AAC 25.030, the surface casing must be set at least 500' TVD below the base of the permafrost. Rule 3 Automatic Shut-in Equipment (Rescinded by Other Order No. 66) Rule 4 Common Production Facilities and Surface Commingling (Revised by CO No. 559.011) (a) Production from the Put River Oil Pool may be commingled with production from the Prudhoe Bay Oil Pool, and other oil pools located in the Prudhoe Bay Unit in surface facilities prior to custody transfer. (b) The Prudhoe Bay Unit Western Operating Metering Plan, described by letter from BPXA dated April 23, 2002 and detailed within the "Prudhoe Bay Unit (PBU) Western Satellite Production Metering Plan — Policies and Procedures Document" dated August 1, 2002 is approved for allocation of production from Put River Oil Pool wells. (c) Put River Oil Pool wells will use well allocation factors derived for their designated flow station. (d) All wells must be tested a minimum of once per month. The Commission may require more frequent or longer tests if the allocation quality deteriorates. (e) Technical process review meetings shall be held at least annually. (f) The operator shall submit a review of pool production allocation factors and issues over the prior year with the annual reservoir surveillance report and retain electronic file(s) containing daily allocation data and daily test data for a minimum of five years. Rule 5 Reservoir Pressure Monitoring (Restated from CO No. 559) (a) Prior to regular production or injection, an initial pressure survey must be taken in each well. (b) A minimum of one bottom -hole pressure survey per producing Lobe within the Put River Sandstone shall be run annually. The surveys required by part (a) of this rule may be used to fulfill the minimum requirements. (c) If six or more wells are active within a Lobe of the Put River Oil Pool, a second bottom - hole pressure survey shall be run annually. (d) The reservoir pressure datum will be 8100'ss. (e) Pressure surveys may be stabilized static pressure measurements at bottom -hole or extrapolated from surface (single phase fluid conditions), pressure fall-off, pressure buildup, multi -rate tests, drill stem tests, or open -hole formation tests. (f) Data and results from pressure surveys shall be submitted with the annual reservoir surveillance report. All data necessary for analysis of each survey need not be submitted with the report but must be available to the Commission upon request. (g) Results and data from special reservoir pressure monitoring tests shall also be submitted in accordance with part (e) of this rule. Rule 6 Gas -Oil Ratio Exemption (Restated from CO No. 559) Conservation Order 559A February 12, 2019 Page 5 of 9 (a) Wells producing from the Put River Oil Pool area are exempt from the gas -oil -ratio limits of 20 AAC 25.240(a) so long as the requirements of 20 AAC 25.240(b) are met. (b) For production within the Southern Lobe of the Put River Sandstone, except as allowed under (c) of this rule, the exemption from the gas -oil -ratio limit is not effective until waterflood has been initiated and the Commission by administrative approval has authorized application of the exemption. (c) Notwithstanding (a) and (b) of this rule, pre -production of injectors for up to three weeks is allowed without regard to 20 AAC 25.240(a) and (b) Rule 7 Approved Depletion Plan (Restated from CO No. 559) (a) Waterflood operations are approved within the Western and Southem Lobes of the Put River Oil Pool. (b) Commission approval is required prior to commencement of all other enhanced recovery operations. Rule 8 Annual Reservoir Review (Revised by CO No. 559.010) An annual report must be filed. The report must include future development plans, reservoir depletion plans, and surveillance information for the prior calendar year, including: (a) Voidage balance by month of produced, and injected fluids and cumulative status. (b) Reservoir pressure map at datum, summary and analysis of reservoir pressure surveys within the pool. (c) Results and, where appropriate, analysis of production and injection surveys, tracer surveys, observation well surveys, and any other special monitoring. (d) Review of pool production allocation factors and issues over the prior year. (e) Progress of enhanced recovery project implementation and reservoir management summary including results of reservoir simulation studies. (f) A detailed summary of all Weatherford Generation 2 (Gen 2) installations to date, the performance of each Gen 2, all operational issues relating to the Gen 2, and any additional Gen 2 -related test results. The AOGCC reserves the right to call a meeting on Gen 2 related issues if warranted. Rule 9 Waiver of "Application for Sundry Approval" Requirement for Workover Operations (ref. C.O.556) (Restated from CO No. 559) (a) Except as provided in (d) and (e) of this rule, the requirement to submit an Application for Sundry Approvals (Form 10-403) and supporting documentation for workover activities described in 20 AAC 25.280(a) (1), (2), (3) and (5) is waived or modified for development wells as provided in the Commission document entitled "Well Work Operations and Sundry Notice/Reporting Requirements for Pools Subject to Sundry Waiver Rules," dated July 15, 2005 (referred to below as "Sundry Matrix"). This waiver and modification do not affect the operator's responsibility to submit a Report of Sundry Well Operations (Form 10-404) within 30 days following the completion of a workover operation. (b) Except as provided in (d) and (e) of this rule, the requirement to submit an Application Conservation Order 559A February 12, 2019 Page 6 of 9 for Sundry Approvals (Form 10-403) and supporting documentation for workover activities described in 20 AAC 25.280(a) (1) and (5) is modified for service wells as provided in the Sundry Matrix. This modification does not affect the operator's responsibility to submit a Report of Sundry Well Operations (Form 10-404) within 30 days following the completion of a workover operation. (c) The Sundry Matrix summarizes the sundry approval and reporting requirements that apply to various categories of operations in the specific well types under Commission regulations as modified by these rules. (d) The waivers provided under (a) of this rule do not apply to wells that are required to be reported to the Commission under the provisions of Rule 9. (e) The Commission reserves the discretion to require that an operator submit an Application for Sundry Approvals for a particular well or for a particular operation on any well. (f) Each week the operator shall provide the Commission with a report of workover operations performed the previous week that did not require submission of a Form 10- 403. (These operations are listed in Column 2 of the Sundry Matrix.) The report must include the date, well, permit to drill number, nominal operation completed, and a brief description of that operation including depths of perforations, perforations, and stimulated zones. (g) Nothing in this rule precludes an operator from filing an Application for Sundry Approvals (Form 10-403) in advance of any well work or from including Sundry authorized operations (listed in column 3 of the Sundry Matrix in the weekly report required by (f) of this rule. (h) Unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any provision of this rule or administratively amend any provision including the Sundry Matrix, as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. Rule 10 Annular Pressures (Restated from CO No. 559) (a) At the time of installation or replacement, the operator shall conduct and document a pressure test of tubulars and completion equipment in each development well that is sufficient to demonstrate that planned well operations will not result in failure of well integrity, uncontrolled release of fluid or pressure, or threat to human safety. (b) The operator shall monitor each development well daily to check for sustained pressure, except if prevented by extreme weather conditions, emergency situations, or similar unavoidable circumstances. Monitoring results shall be made available for AOGCC inspection. (c) The operator shall notify the AOGCC within three working days after the operator identifies a well as having (a) sustained inner annulus pressure that exceeds 2500 psig for wells processed through the Lisburne Processing Center and 2000 psig for all other development wells, or (b) sustained outer annulus pressure that exceeds 1000 psig. (d) The AOGCC may require the operator to submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action or increased surveillance for Conservation Order 559A February 12, 2019 Page 7 of 9 any development well having sustained pressure that exceeds a limit set out in paragraph 3 of this rule. The AOGCC may approve the operator's proposal or may require other corrective action or surveillance. The AOGCC may require that corrective action be verified by mechanical integrity testing or other AOGCC approved diagnostic tests. The operator shall give the AOGCC sufficient notice of the testing schedule to allow the AOGCC to witness the tests. (e) If the operator identifies sustained pressure in the inner annulus of a development well that exceeds 45% of the burst pressure rating of the well's production casing for inner annulus pressure, or sustained pressure in the outer annulus that exceeds 45% of the burst pressure rating of the well's surface casing for outer annulus pressure, the operator shall notify the AOGCC within three working days and take corrective action. Unless well conditions require the operator to take emergency corrective action before AOGCC approval can be obtained, the operator shall submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action. The AOGCC may approve the operator's proposal or may require other corrective action. The AOGCC may also require that corrective action be verified by mechanical integrity testing or other AOGCC approved diagnostic tests. The operator shall give the AOGCC sufficient notice of the testing schedule to allow the AOGCC to witness the tests. (f) Except as otherwise approved by the AOGCC under (d) or (e) of this rule, before a shut-in well is placed in service, any annulus pressure must be relieved to a sufficient degree (1) that the inner annulus pressure at operating temperature will be below 2000 psig, and (2) that the outer annulus pressure at operating temperature will be below 1000 psig. However, a well that is subject to (c) but not (e) of this rule may reach an annulus pressure at operating temperature that is described in the operator's notification to the AOGCC under (c) of this rule, unless the AOGCC prescribes a different limit. (g) For purposes of this rule, "inner annulus" means the space in a well between tubing and production casing; "outer annulus" means the space in a well between production casing and surface casing; "sustained pressure" means pressure that (a) is measurable at the casing head of an annulus, (b) is not caused solely by temperature fluctuations, and (c) is not pressure that has been applied intentionally. Rule 11 Use of Multiphase Flowmeters in Well Testing (Superseded by Other Order No. 105) Rule 12 Commingling of Production in the Same Wellbore (New this order) (a) Commingling production from the Put River Oil Pool with the Prudhoe Oil Pool is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: (i) Prior to commingling production, a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Put River Oil Pool (in isolation from the Prudhoe Oil Pool). Conservation Order 559A February 12, 2019 Page 8 of 9 (ii) For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling an analysis must occur at least twice per year and not less frequently than once every seven months. (iii)A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. (iv)In addition to the other requirements of Rule 4 of CO 559, the monthly reports required by Rule 4(f) of CO 559 must identify production allocated to the Put River Oil Pool and the Prudhoe Oil Pool for commingled wells. (v) The volumes reported on Form 10-405 {i.e. in accordance with 20 AAC 25.230(b)) must identify commingled production allocated to the Put River Oil Pool and the Prudhoe Oil Pool. (vi)A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Put River and Prudhoe Oil Pools, along with the analyses of the geochemical tests, production logs, and regular well tests. (b) A commingled well that is shut in for more than six months shall have the Put River and Prudhoe Oil Pools mechanically isolated to prevent crossflow between the pools. Unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any rule stated above or administratively amend any rule, including the "Sundry Matrix" referred to in Rule 8, as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. DONE at Anchorage, Alaska nunc pro tunc December 13, 2018, dated February 12, 2019. Hollis S. French raniel. Seamount, Jr. Chair, Commissioner Commissioner Conservation Order 559A February 12, 2019 Page 9 of 9 APPEAL Because this order is entered on reconsideration, this order is the FINAL order or decision of the AOGCC, and may be appealed to superior court. Any appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, this order. 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 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION 333 West 7" Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF BP EXPLORATION (ALASKA) INC. for an order to allow pool wide downhole commingling between the Put River and Prudhoe Oil Pools IT APPEARING THAT: Conservation Order No. 559A Amended on Reconsideration Docket Number: CO -18-016 Prudhoe Bay Field Put River Oil Pool nunc pro tunc December 13, 2018 February 12, 2019 By letter dated June 22, 2018, BP Exploration (Alaska), Inc. (BPXA), operator of the Prudhoe Bay Unit, applied for an amendment to Conservation Order (CO) No. 341F and CO No. 559 to allow for commingled downhole production for wells completed in the Put River and Prudhoe Oil Pools. 2. The Alaska Oil and Gas Conservation Commission (AOGCC) published notice of opportunity for public hearing in the Anchorage Daily News on June 28, 2018. 3. The AOGCC held the public hearing on BPXA's application on August 6, 2018, at the Alaska Oil and Gas Conservation Commission offices at 333 West 71 Avenue, Suite 100, Anchorage, Alaska 99501. 4. The AOGCC received no protests to or comments on BPXA's application. FINDINGS: 1. Put River Oil Pool The Put River Oil Pool (PROP) overlies the Prudhoe Oil Pool (POP) and is comprised of three lobes (Central, Southern, and Western) of the Put River Sandstone. A fourth lobe, the Northern Lobe, is in hydraulic communication with the POP and is included as part of the POP. The Southern Lobe has been on somewhat regular oil production since 1999 with an active waterflood. Appraisal activities conducted in 2005 identified the presence of oil and gas condensate in the Central and Western Lobes respectively but further development was not pursued at that time in part due to low flowrates that resulted in operational challenges associated with hydrate deposition. The Central Lobe contains and estimate 1.1 to 2.7 MMBO in place and the Western Lobe contains Conservation Order 559A February 12, 2019 Page 2 of 9 an estimated 69.6 to 104.4 BCF in place with a condensate yield of approximately 40 bbls/MMCF, which yields condensate in place values of between 2.8 and 4.2 MMBC. 2. Prudhoe Oil Pool The POP, which is defined by CO No. 341F, underlies the PROP and consists of a massive oil rim overlain by a massive gas cap that has been in production since 1977 and has numerous enhanced recovery projects occurring in the various parts of the field. Generally speaking POP wells are very productive due to the high-quality reservoir rocks encountered in the pool. 3. Potential for Commimlin¢ Several wells penetrate the PROP and the POP and would be candidates for downhole commingling. Commingling of production in these wellbores should allow for increased flowrates and flow velocity in the tubing and reduce the potential for the hydrate deposition that is problematic in production from wells completed solely in the PROP. Since standalone production of the Central and Western Lobes is not viable due to hydrate deposition those reserves are essentially trapped. Commingling of production with the POP will allow these resources to be recovered. 4. Potential for Crossflow There is potential of crossflow between the POP and the PROP if a commingled well is shut in. For a short duration shut in period the crossflow is not expected to be significant. In the event of a longer duration shut in period the PROP and POP could be mechanically isolated downhole to prevent crossflow. 5. Production Allocation Downhole fluid samples will be collected from each pool for the purposes of geochemical analysis. During the first six months of commingled production a production log, or differential well test, will be run on the well and a geochemical analysis performed to verify the accuracy of geochemical analysis for production allocation purposes. Semi-annual geochemical analyses will be conducted for production allocation purposes and production logs or differential well tests will be run as needed to assess production anomalies. 6. Reservoir Surveillance Bottomhole pressure surveys for the POP would only be conducted in wells that are not commingled with the PROP. Bottomhole pressure surveys for the PROP can be obtained by setting a plug to separate the POP and PROP. CONCLUSIONS: 1. Downhole commingling of production between the PROP and POP should allow for improved resource recovery from the Prudhoe Bay Unit by allowing for the development of up to 6.9 million barrels of hydrocarbon liquids in place within the PROP that would not be recoverable as a standalone development. Conservation Order 559A February 12, 2019 Page 3 of 9 2. Production allocation via geochemical analysis in wells commingled downhole has proven to provide adequate results for production allocation purposes elsewhere in the field. 3. Proper reservoir surveillance and monitoring can be accomplished by setting downhole plugs to isolate the PROP and POP so that reservoir pressures in the PROP can be obtained. There's a significant number of wells in the area that penetrate only the POP so losing the ability to obtained reservoir pressures in the POP in the commingled wells will not impact reservoir surveillance or monitoring. 4. In the event of a prolonged period of shut in for a commingled well the PROP and POP can be mechanically isolated downhole to prevent crossflow between the reservoirs. NOW, THEREFORE, IT IS ORDERED THAT: Conservation Order No. 559 is superseded and its record incorporated by reference in this order. CO No. 559.001, CO No. 559.007, CO No. 559.008, and CO No. 559.009 remain in effect, all other administrative approvals issued under CO No. 559 are superseded. In addition to statewide requirements under 20 AAC 25 (to the extent not superseded by these rules), the following rules apply to the Put River Oil Pool within the following described area: UMIAT MERIDIAN TI IN R14E Sections: 3, 4, 9, 10, 11(SWA), 14(W/2), 15, 16, 21, 22, 23(W/2 and SE/4), 25(S/2), 26, 27, 28, 33, 34, 35, 36 TIIN R15E Sections: 29(S/2), 30(S/2), 31, 32 TION R14E Sections: 1, 2, 3, 11, 12, 13, 14 TION R15E Sections: 5, 6, 7, 8, 17, 18 Rule 1 Pool Definition (Restated from CO No. 559) The Put River Oil Pool is defined as the sandstone reservoirs in the Southern, Central and Western lobes that correlate with the interval 9,638 to 9,719 measured feet on the Borehole Compensated Sonic Log, Run 2, Dated September 28, 1975, in the Atlantic Richfield - Exxon NGI No. 1 well, but excluding the Northern Lobe reservoirs that are in pressure communication with the Prudhoe Oil Pool gas cap in the Sag River Formation. Conservation Order 559A February 12, 2019 Page 4 of 9 Rule 2 Casing and Cementing Practices (Restated from CO No. 559) (a) In addition to the requirements of 20 AAC 25.030, the conductor casing must be set at least 75' TVD below the surface. (b) In addition to the requirements of 20 AAC 25.030, the surface casing must be set at least 500' TVD below the base of the permafrost. Rule 3 Automatic Shut-in Equipment (Rescinded by Other Order No. 66) Rule 4 Common Production Facilities and Surface Commingling (Revised by CO No. 559.011) (a) Production from the Put River Oil Pool may be commingled with production from the Prudhoe Bay Oil Pool, and other oil pools located in the Prudhoe Bay Unit in surface facilities prior to custody transfer. (b) The Prudhoe Bay Unit Western Operating Metering Plan, described by letter from BPXA dated April 23, 2002 and detailed within the "Prudhoe Bay Unit (PBU) Western Satellite Production Metering Plan — Policies and Procedures Document" dated August 1, 2002 is approved for allocation of production from Put River Oil Pool wells. (c) Put River Oil Pool wells will use well allocation factors derived for their designated flow station. (d) All wells must be tested a minimum of once per month. The Commission may require more frequent or longer tests if the allocation quality deteriorates. (e) Technical process review meetings shall be held at least annually. (f) The operator shall submit a review of pool production allocation factors and issues over the prior year with the annual reservoir surveillance report and retain electronic file(s) containing daily allocation data and daily test data for a minimum of five years. Rule 5 Reservoir Pressure Monitoring (Restated from CO No. 559) (a) Prior to regular production or injection, an initial pressure survey must be taken in each well. (b) A minimum of one bottom -hole pressure survey per producing Lobe within the Put River Sandstone shall be run annually. The surveys required by part (a) of this rule may be used to fulfill the minimum requirements. (c) If six or more wells are active within a Lobe of the Put River Oil Pool, a second bottom - hole pressure survey shall be run annually. (d) The reservoir pressure datum will be 8100'ss. (e) Pressure surveys may be stabilized static pressure measurements at bottom -hole or extrapolated from surface (single phase fluid conditions), pressure fall-off, pressure buildup, multi -rate tests, drill stem tests, or open -hole formation tests. (f) Data and results from pressure surveys shall be submitted with the annual reservoir surveillance report. All data necessary for analysis of each survey need not be submitted with the report but must be available to the Commission upon request. (g) Results and data from special reservoir pressure monitoring tests shall also be submitted in accordance with part (e) of this rule. Rule 6 Gas -Oil Ratio Exemption (Restated from CO No. 559) Conservation Order 559A February 12, 2019 Page 5 of 9 (a) Wells producing from the Put River Oil Pool area are exempt from the gas -oil -ratio limits of 20 AAC 25.240(a) so long as the requirements of 20 AAC 25.240(b) are met. (b) For production within the Southern Lobe of the Put River Sandstone, except as allowed under (c) of this rule, the exemption from the gas -oil -ratio limit is not effective until waterflood has been initiated and the Commission by administrative approval has authorized application of the exemption. (c) Notwithstanding (a) and (b) of this rule, pre -production of injectors for up to three weeks is allowed without regard to 20 AAC 25.240(a) and (b) Rule 7 Approved Depletion Plan (Restated from CO No. 559) (a) Waterflood operations are approved within the Western and Southern Lobes of the Put River Oil Pool. (b) Commission approval is required prior to commencement of all other enhanced recovery operations. Rule 8 Annual Reservoir Review (Revised by CO No. 559.010) An annual report must be filed. The report must include future development plans, reservoir depletion plans, and surveillance information for the prior calendar year, including: (a) Voidage balance by month of produced, and injected fluids and cumulative status. (b) Reservoir pressure map at datum, summary and analysis of reservoir pressure surveys within the pool. (c) Results and, where appropriate, analysis of production and injection surveys, tracer surveys, observation well surveys, and any other special monitoring. (d) Review of pool production allocation factors and issues over the prior year. (e) Progress of enhanced recovery project implementation and reservoir management summary including results of reservoir simulation studies. (f) A detailed summary of all Weatherford Generation 2 (Gen 2) installations to date, the performance of each Gen 2, all operational issues relating to the Gen 2, and any additional Gen 2 -related test results. The AOGCC reserves the right to call a meeting on Gen 2 related issues if warranted. Rule 9 Waiver of "Application for Sundry Approval" Reauirement for Workover Operations (ref. C.O.556) (Restated from CO No. 559) (a) Except as provided in (d) and (e) of this rule, the requirement to submit an Application for Sundry Approvals (Form 10-403) and supporting documentation for workover activities described in 20 AAC 25.280(a) (1), (2), (3) and (5) is waived or modified for development wells as provided in the Commission document entitled "Well Work Operations and Sundry Notice/Reporting Requirements for Pools Subject to Sundry Waiver Rules," dated July 15, 2005 (referred to below as "Sundry Matrix"). This waiver and modification do not affect the operator's responsibility to submit a Report of Sundry Well Operations (Form 10-404) within 30 days following the completion of a workover operation. (b) Except as provided in (d) and (e) of this rule, the requirement to submit an Application Conservation Order 559A February 12, 2019 Page 6 of 9 for Sundry Approvals (Form 10-403) and supporting documentation for workover activities described in 20 AAC 25.280(a) (1) and (5) is modified for service wells as provided in the Sundry Matrix. This modification does not affect the operator's responsibility to submit a Report of Sundry Well Operations (Form 10-404) within 30 days following the completion of a workover operation. (c) The Sundry Matrix summarizes the sundry approval and reporting requirements that apply to various categories of operations in the specific well types under Commission regulations as modified by these rules. (d) The waivers provided under (a) of this rule do not apply to wells that are required to be reported to the Commission under the provisions of Rule 9. (e) The Commission reserves the discretion to require that an operator submit an Application for Sundry Approvals for a particular well or for a particular operation on any well. (f) Each week the operator shall provide the Commission with a report of workover operations performed the previous week that did not require submission of a Form 10- 403. (These operations are listed in Column 2 of the Sundry Matrix.) The report must include the date, well, permit to drill number, nominal operation completed, and a brief description of that operation including depths of perforations, perforations, and stimulated zones. (g) Nothing in this rule precludes an operator from filing an Application for Sundry Approvals (Form 10-403) in advance of any well work or from including Sundry authorized operations (listed in column 3 of the Sundry Matrix in the weekly report required by (f) of this rule. (h) Unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any provision of this rule or administratively amend any provision including the Sundry Matrix, as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. Rule 10 Annular Pressures (Restated from CO No. 559) (a) At the time of installation or replacement, the operator shall conduct and document a pressure test of tubulars and completion equipment in each development well that is sufficient to demonstrate that planned well operations will not result in failure of well integrity, uncontrolled release of fluid or pressure, or threat to human safety. (b) The operator shall monitor each development well daily to check for sustained pressure, except if prevented by extreme weather conditions, emergency situations, or similar unavoidable circumstances. Monitoring results shall be made available for AOGCC inspection. (c) The operator shall notify the AOGCC within three working days after the operator identifies a well as having (a) sustained inner annulus pressure that exceeds 2500 psig for wells processed through the Lisburne Processing Center and 2000 psig for all other development wells, or (b) sustained outer annulus pressure that exceeds 1000 psig. (d) The AOGCC may require the operator to submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action or increased surveillance for Conservation Order 559A February 12, 2019 Page 7 of 9 any development well having sustained pressure that exceeds a limit set out in paragraph 3 of this rule. The AOGCC may approve the operator's proposal or may require other corrective action or surveillance. The AOGCC may require that corrective action be verified by mechanical integrity testing or other AOGCC approved diagnostic tests. The operator shall give the AOGCC sufficient notice of the testing schedule to allow the AOGCC to witness the tests. (e) If the operator identifies sustained pressure in the inner annulus of a development well that exceeds 45% of the burst pressure rating of the well's production casing for inner annulus pressure, or sustained pressure in the outer annulus that exceeds 45% of the burst pressure rating of the well's surface casing for outer annulus pressure, the operator shall notify the AOGCC within three working days and take corrective action. Unless well conditions require the operator to take emergency corrective action before AOGCC approval can be obtained, the operator shall submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action. The AOGCC may approve the operator's proposal or may require other corrective action. The AOGCC may also require that corrective action be verified by mechanical integrity testing or other AOGCC approved diagnostic tests. The operator shall give the AOGCC sufficient notice of the testing schedule to allow the AOGCC to witness the tests. (f) Except as otherwise approved by the AOGCC under (d) or (e) of this rule, before a shut-in well is placed in service, any annulus pressure must be relieved to a sufficient degree (1) that the inner annulus pressure at operating temperature will be below 2000 psig, and (2) that the outer annulus pressure at operating temperature will be below 1000 psig. However, a well that is subject to (c) but not (e) of this rule may reach an annulus pressure at operating temperature that is described in the operator's notification to the AOGCC under (c) of this rule, unless the AOGCC prescribes a different limit. (g) For purposes of this rule, "inner annulus" means the space in a well between tubing and production casing; "outer annulus" means the space in a well between production casing and surface casing; "sustained pressure" means pressure that (a) is measurable at the casing head of an annulus, (b) is not caused solely by temperature fluctuations, and (c) is not pressure that has been applied intentionally. Rule 11 Use of Multiphase Flowmeters in Well Testine (Superseded by Other Order No. 105 Rule 12 Commin¢lin¢ of Production in the Same Wellbore (New this order) (a) Commingling production from the Put River Oil Pool with the Prudhoe Oil Pool is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: (i) Prior to commingling production, a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Put River Oil Pool (in isolation from the Prudhoe Oil Pool). Conservation Order 559A February 12, 2019 Page 8 of 9 (ii) For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling an analysis must occur at least twice per year and not less frequently than once every seven months. (iii)A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. (iv)ln addition to the other requirements of Rule 4 of CO 559, the monthly reports required by Rule 4(f) of CO 559 must identify production allocated to the Put River Oil Pool and the Prudhoe Oil Pool for commingled wells. (v) The volumes reported on Form 10-405 (i.e. in accordance with 20 AAC 25.230(b)) must identify commingled production allocated to the Put River Oil Pool and the Prudhoe Oil Pool. (vi)A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Put River and Prudhoe Oil Pools, along with the analyses of the geochemical tests, production logs, and regular well tests. (b) A commingled well that is shut in for more than six months shall have the Put River and Prudhoe Oil Pools mechanically isolated to prevent crossflow between the pools. Rule 13 Administrative Action (Renumbered this order) Unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any rule stated above or administratively amend any rule, including the "Sundry Matrix" referred to in Rule 8, as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. DONE at Anchorage, Alaska nunc pro tune December 13, 2018, dated February 12, 2019. //signature on file// //signature on file// �" """ Hollis S. French Daniel T. Seamount, Jr.'. Chair, Commissioner Commissioner �" '' e �FhYgA°N t%�� Conservation Order 559A February 12, 2019 Page 9 of 9 I:377sT q`.[�Yd.[Bpl Because this order is entered on reconsideration, this order is the FINAL order or decision of the AOGCC, and may be appealed to superior court. Any appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, this order. 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 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. Darwin Waldsmith Richard Wagner P.O. Box 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639 Fairbanks, AK 99706 Or�V STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7'" Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF BP ) Conservation Order No. 559A EXPLORATION (ALASKA) INC. ) Docket Number: CO -18-016 for an order to allow pool wide ) downhole commingling between the ) Prudhoe Bay Field Put River and Prudhoe Oil Pools ) Put River Oil Pool December 13, 2018 IT APPEARING THAT: 1. By letter dated June 22, 2018, BP Exploration (Alaska), Inc. (BPXA), operator of the Prudhoe Bay Unit, applied for an amendment to Conservation Order (CO) No. 341F and CO No. 559 to allow for commingled downhole production for wells completed in the Put River and Prudhoe Oil Pools. 2. The Alaska Oil and Gas Conservation Commission (AOGCC) published notice of opportunity for public hearing in the Anchorage Daily News on June 28, 2018. 3. The AOGCC held the public hearing on BPXA's application on August 6, 2018, at the Alaska Oil and Gas Conservation Commission offices at 333 West 7u Avenue, Suite 100, Anchorage, Alaska 99501. 4. The AOGCC received no protests to or comments on BPXA's application. FINDINGS: 1. Put River Oil Pool The Put River Oil Pool (PROP) overlies the Prudhoe Oil Pool (POP) and is comprised of three lobes (Central, Southern, and Western) of the Put River Sandstone. A fourth lobe, the Northern Lobe, is in hydraulic communication with the POP and is included as part of the POP. The Southern Lobe has been on somewhat regular oil production since 1999 with an active waterflood. Appraisal activities conducted in 2005 identified the presence of oil and gas condensate in the Central and Western Lobes respectively but further development was not pursued at that time in part due to low flowrates that resulted in operational challenges associated with hydrate deposition. The Central Lobe contains and estimate 1.1 to 2.7 MMBO in place and the Western Lobe contains an estimated 69.6 to 104.4 BCF in place with a condensate yield of approximately 40 bbls/MMCF, which yields condensate in place values of between 2.8 and 4.2 MMBC. Conservation Order 559A December 13, 2018 Page 2 of 9 2. Prudhoe OR Pool The POP, which is defined by CO No. 341F, underlies the PROP and consists of a massive oil rim overlain by a massive gas cap that has been in production since 1977 and has numerous enhanced recovery projects occurring in the various parts of the field. Generally speaking POP wells are very productive due to the high-quality reservoir rocks encountered in the pool. 3. Potential for Comminalina Several wells penetrate the PROP and the POP and would be candidates for downhole commingling. Commingling of production in these wellbores should allow for increased flowrates and flow velocity in the tubing and reduce the potential for the hydrate deposition that is problematic in production from wells completed solely in the PROP. Since standalone production of the Central and Western Lobes is not viable due to hydrate deposition those reserves are essentially trapped. Commingling of production with the POP will allow these resources to be recovered. 4. Potential for Crossflow There is potential of crossflow between the POP and the PROP if a commingled well is shut in. For a short duration shut in period the crossflow is not expected to be significant. In the event of a longer duration shut in period the PROP and POP could be mechanically isolated downhole to prevent crossflow. 5. Production Allocation Downhole fluid samples will be collected from each pool for the purposes of geochemical analysis. During the first six months of commingled production a production log, or differential well test, will be run on the well and a geochemical analysis performed to verify the accuracy of geochemical analysis for production allocation purposes. Semi-annual geochemical analyses will be conducted for production allocation purposes and production logs or differential well tests will be run as needed to assess production anomalies. 6. Reservoir Surveillance Bottomhole pressure surveys for the POP would only be conducted in wells that are not commingled with the PROP. Bottomhole pressure surveys for the PROP can be obtained by setting a plug to separate the POP and PROP. CONCLUSIONS: 1. Downhole commingling of production between the PROP and POP should allow for improved resource recovery from the Prudhoe Bay Unit by allowing for the development of up to 6.9 million barrels of hydrocarbon liquids in place within the PROP that would not be recoverable as a standalone development. 2. Production allocation via geochemical analysis in wells commingled downhole has proven to provide adequate results for production allocation purposes elsewhere in the field. Conservation Order 559A December 13, 2018 Page 3 of 9 3. Proper reservoir surveillance and monitoring can be accomplished by setting downhole plugs to isolate the PROP and POP so that reservoir pressures in the PROP can be obtained. There's a significant number of wells in the area that penetrate only the POP so losing the ability to obtained reservoir pressures in the POP in the commingled wells will not impact reservoir surveillance or monitoring. 4. In the event of a prolonged period of shut in for a commingled well the PROP and POP can be mechanically isolated downhole to prevent crossflow between the reservoirs. NOW, THEREFORE, IT IS ORDERED THAT: Conservation Order No. 559 is superseded and its record incorporated by reference in this order. CO No. 559.001, CO No. 559.007, CO No. 559.008, and CO No. 559.009 remain in effect, all other administrative approvals issued under CO No. 559 are superseded. In addition to statewide requirements under 20 AAC 25 (to the extent not superseded by these rules), the following rules apply to the Put River Oil Pool within the following described area: UMIAT MERIDIAN TI IN R14E Sections: 3, 4, 9, 10, 11(SWA), 14(W/2), 15, 16, 21, 22,23(W/2 and SE/4),25(S/2),26, 27, 28, 33, 34, 35, 36 TI IN R15E Sections: 29(S/2), 30(S/2), 31, 32 TION R14E Sections: 1, 2, 3, 11, 12, 13, 14 TION R15E Sections: 5, 6, 7, 8, 17, 18 Rule 1 Pool Defmition (Restated from CO No. 559) The Put River Oil Pool is defined as the sandstone reservoirs in the Southern, Central and Western lobes that correlate with the interval 9,638 to 9,719 measured feet on the Borehole Compensated Sonic Log, Run 2, Dated September 28, 1975, in the Atlantic Richfield - Exxon NGI No. 1 well, but excluding the Northern Lobe reservoirs that are in pressure communication with the Prudhoe Oil Pool gas cap in the Sag River Formation. Rule 2 Casing and Cementing Practices (Restated from CO No. 559) (a) In addition to the requirements of 20 AAC 25.030, the conductor casing must be set at least 75' TVD below the surface. Conservation Order 559A December 13, 2018 Page 4 of 9 (b) In addition to the requirements of 20 AAC 25.030, the surface casing must be set at least 500' TVD below the base of the permafrost. Rule 3 Automatic Shut-in Equipment (Rescinded by Other Order No. 66) Rule 4 Common Production Facilities and Surface Comminatiing (Revised by CO No. 559.011) (a) Production from the Put River Oil Pool may be commingled with production from the Prudhoe Bay Oil Pool, and other oil pools located in the Prudhoe Bay Unit in surface facilities prior to custody transfer. (b) The Prudhoe Bay Unit Western Operating Metering Plan, described by letter from BPXA dated April 23, 2002 and detailed within the "Prudhoe Bay Unit (PBU) Western Satellite Production Metering Plan — Policies and Procedures Document" dated August 1, 2002 is approved for allocation of production from Put River Oil Pool wells. (c) Put River Oil Pool wells will use well allocation factors derived for their designated flow station. (d) All wells must be tested a minimum of once per month. The Commission may require more frequent or longer tests if the allocation quality deteriorates. (e) Technical process review meetings shall be held at least annually. (f) The operator shall submit a review of pool production allocation factors and issues over the prior year with the annual reservoir surveillance report and retain electronic file(s) containing daily allocation data and daily test data for a minimum of five years. Rule 5 Reservoir Pressure Monitoring (Restated from CO No. 559) (a) Prior to regular production or injection, an initial pressure survey must be taken in each well. (b) A minimum of one bottom -hole pressure survey per producing Lobe within the Put River Sandstone shall be run annually. The surveys required by part (a) of this rule may be used to fulfill the minimum requirements. (c) If six or more wells are active within a Lobe of the Put River Oil Pool, a second bottom - hole pressure survey shall be run annually. (d) The reservoir pressure datum will be 8100'ss. (e) Pressure surveys may be stabilized static pressure measurements at bottom -hole or extrapolated from surface (single phase fluid conditions), pressure fall-off, pressure buildup, multi -rate tests, drill stem tests, or open -hole formation tests. (f) Data and results from pressure surveys shall be submitted with the annual reservoir surveillance report. All data necessary for analysis of each survey need not be submitted with the report but must be available to the Commission upon request. (g) Results and data from special reservoir pressure monitoring tests shall also be submitted in accordance with part (e) of this rule. Rule 6 Gas -Oil Ratio Exemption (Restated from CO No. 559) (a) Wells producing from the Put River Oil Pool area are exempt from the gas -oil -ratio limits of 20 AAC 25.240(a) so long as the requirements of 20 AAC 25.240(b) are met. (b) For production within the Southern Lobe of the Put River Sandstone, except as allowed Conservation Order 559A December 13, 2018 Page 5 of 9 under (c) of this rule, the exemption from the gas -oil -ratio limit is not effective until waterflood has been initiated and the Commission by administrative approval has authorized application of the exemption. (c) Notwithstanding (a) and (b) of this rule, pre -production of injectors for up to three weeks is allowed without regard to 20 AAC 25.240(a) and (b) Rule 7 Approved Depletion Plan (Restated from CO No. 559) (a) Waterflood operations are approved within the Western and Southern Lobes of the Put River Oil Pool. (b) Commission approval is required prior to commencement of all other enhanced recovery operations. Rule 8 Annual Reservoir Review (Revised by CO No. 559.010) An annual report must be filed. The report must include future development plans, reservoir depletion plans, and surveillance information for the prior calendar year, including: (a) Voidage balance by month of produced, and injected fluids and cumulative status. (b) Reservoir pressure map at datum, summary and analysis of reservoir pressure surveys within the pool. (c) Results and, where appropriate, analysis of production and injection surveys, tracer surveys, observation well surveys, and any other special monitoring. (d) Review of pool production allocation factors and issues over the prior year. (e) Progress of enhanced recovery project implementation and reservoir management summary including results of reservoir simulation studies. (f) A detailed summary of all Weatherford Generation 2 (Gen 2) installations to date, the performance of each Gen 2, all operational issues relating to the Gen 2, and any additional Gen 2 -related test results. The AOGCC reserves the right to call a meeting on Gen 2 related issues if warranted. Rule 9 Waiver of "Application for Sundry Approval" Requirement for Workover Operations (ref. C.O.556) (Restated from CO No. 559) (a) Except as provided in (d) and (e) of this rule, the requirement to submit an Application for Sundry Approvals (Form 10-403) and supporting documentation for workover activities described in 20 AAC 25.280(a) (1), (2), (3) and (5) is waived or modified for development wells as provided in the Commission document entitled "Well Work Operations and Sundry Notice/Reporting Requirements for Pools Subject to Sundry Waiver Rules," dated July 15, 2005 (referred to below as "Sundry Matrix"). This waiver and modification do not affect the operator's responsibility to submit a Report of Sundry Well Operations (Form 10-404) within 30 days following the completion of a workover operation. (b) Except as provided in (d) and (e) of this rule, the requirement to submit an Application for Sundry Approvals (Form 10-403) and supporting documentation for workover activities described in 20 AAC 25.280(a) (1) and (5) is modified for service wells as provided in the Sundry Matrix. This modification does not affect the operator's Conservation Order 559A December 13, 2018 Page 6 of 9 responsibility to submit a Report of Sundry Well Operations (Form 10-404) within 30 days following the completion of a workover operation. (c) The Sundry Matrix summarizes the sundry approval and reporting requirements that apply to various categories of operations in the specific well types under Commission regulations as modified by these rules. (d) The waivers provided under (a) of this rule do not apply to wells that are required to be reported to the Commission under the provisions of Rule 9. (e) The Commission reserves the discretion to require that an operator submit an Application for Sundry Approvals for a particular well or for a particular operation on any well. (f) Each week the operator shall provide the Commission with a report of workover operations performed the previous week that did not require submission of a Form 10- 403. (These operations are listed in Column 2 of the Sundry Matrix.) The report must include the date, well, permit to drill number, nominal operation completed, and a brief description of that operation including depths of perforations, perforations, and stimulated zones. (g) Nothing in this rule precludes an operator from filing an Application for Sundry Approvals (Form 10-403) in advance of any well work or from including Sundry authorized operations (listed in column 3 of the Sundry Matrix in the weekly report required by (f) of this rule. (h) Unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any provision of this rule or administratively amend any provision including the Sundry Matrix, as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. Rule 10 Annular Pressures (Restated from CO No. 559) (a) At the time of installation or replacement, the operator shall conduct and document a pressure test of tubulars and completion equipment in each development well that is sufficient to demonstrate that planned well operations will not result in failure of well integrity, uncontrolled release of fluid or pressure, or threat to human safety. (b) The operator shall monitor each development well daily to check for sustained pressure, except if prevented by extreme weather conditions, emergency situations, or similar unavoidable circumstances. Monitoring results shall be made available for AOGCC inspection. (c) The operator shall notify the AOGCC within three working days after the operator identifies a well as having (a) sustained inner annulus pressure that exceeds 2500 psig for wells processed through the Lisburne Processing Center and 2000 psig for all other development wells, or (b) sustained outer annulus pressure that exceeds 1000 psig. (d) The AOGCC may require the operator to submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action or increased surveillance for any development well having sustained pressure that exceeds a limit set out in paragraph 3 of this rule. The AOGCC may approve the operator's proposal or may require other corrective action or surveillance. The AOGCC may require that Conservation Order 559A December 13, 2018 Page 7 of 9 corrective action be verified by mechanical integrity testing or other AOGCC approved diagnostic tests. The operator shall give the AOGCC sufficient notice of the testing schedule to allow the AOGCC to witness the tests. (e) If the operator identifies sustained pressure in the inner annulus of a development well that exceeds 45% of the burst pressure rating of the well's production casing for inner annulus pressure, or sustained pressure in the outer annulus that exceeds 45% of the burst pressure rating of the well's surface casing for outer annulus pressure, the operator shall notify the AOGCC within three working days and take corrective action. Unless well conditions require the operator to take emergency corrective action before AOGCC approval can be obtained, the operator shall submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action. The AOGCC may approve the operator's proposal or may require other corrective action. The AOGCC may also require that corrective action be verified by mechanical integrity testing or other AOGCC approved diagnostic tests. The operator shall give the AOGCC sufficient notice of the testing schedule to allow the AOGCC to witness the tests. (f) Except as otherwise approved by the AOGCC under (d) or (e) of this rule, before a shut-in well is placed in service, any annulus pressure must be relieved to a sufficient degree (1) that the inner annulus pressure at operating temperature will be below 2000 psig, and (2) that the outer annulus pressure at operating temperature will be below 1000 psig. However, a well that is subject to (c) but not (e) of this rule may reach an annulus pressure at operating temperature that is described in the operator's notification to the AOGCC under (c) of this rule, unless the AOGCC prescribes a different limit. (g) For purposes of this rule, "inner annulus" means the space in a well between tubing and production casing; "outer annulus" means the space in a well between production casing and surface casing; "sustained pressure" means pressure that (a) is measurable at the casing head of an annulus, (b) is not caused solely by temperature fluctuations, and (c) is not pressure that has been applied intentionally. Rule 11 Use of Multiphase Flowmeters in Well Testing (Superseded by Other Order No. 105) Rule 12 Comminalin¢ of Production in the Same Wellbore (New this order) (a) Commingling production from the Put River Oil Pool with the Prudhoe Oil Pool is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: (i) Prior to commingling production, a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Put River Oil Pool (in isolation from the Prudhoe Oil Pool). (ii) For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical Conservation Order 559A December 13, 2018 Page 8 of 9 sampling an analysis must occur at least twice per year and not less frequently than once every seven months. (iii)A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. (iv)In addition to the other requirements of Rule 4 of CO 559, the monthly reports required by Rule 4(f) of CO 559 must identify production allocated to the Put River Oil Pool and the Prudhoe Oil Pool for commingled wells. (v) The volumes reported on Form 10-405 {i.e. in accordance with 20 AAC 25.230(b)} must identify commingled production allocated to the Put River Oil Pool and the Prudhoe Oil Pool. (vi)A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Put River and Prudhoe Oil Pools, along with the analyses of the geochemical tests, production logs, and regular well tests. (b) A commingled well that is shut in for more than three months shall have the Put River and Prudhoe Oil Pools mechanically isolated to prevent crossflow between the pools. Rule 13 Administrative Action (Renumbered this order) Unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any rule stated above or administratively amend any rule, including the "Sundry Matrix" referred to in Rule 8, as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. DONE at Anchorage, Alaska and dated December 13, 2018. Hollis S. French Chair, Commissioner Daniel T. ount, Jr. Commissio er Conservation Order 559A December 13, 2018 Page 9 of 9 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 emoncous. 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 m 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 ran 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 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7" Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF BP ) Conservation Order No. 559A EXPLORATION (ALASKA) INC. ) Docket Number: CO -18-016 for an order to allow pool wide ) downhole commingling between the ) Prudhoe Bay Field Put River and Prudhoe Oil Pools ) Put River Oil Pool December 13, 2018 IT APPEARING THAT: By letter dated June 22, 2018, BP Exploration (Alaska), Inc. (BPXA), operator of the Prudhoe Bay Unit, applied for an amendment to Conservation Order (CO) No. 341F and CO No. 559 to allow for commingled downhole production for wells completed in the Put River and Prudhoe Oil Pools. 2. The Alaska Oil and Gas Conservation Commission (AOGCC) published notice of opportunity for public hearing in the Anchorage Daily News on June 28, 2018. 3. The AOGCC held the public hearing on BPXA's application on August 6, 2018, at the Alaska Oil and Gas Conservation Commission offices at 333 West 71 Avenue, Suite 100, Anchorage, Alaska 99501. 4. The AOGCC received no protests to or comments on BPXA's application. FINDINGS: 1. Put River Oil Pool The Put River Oil Pool (PROP) overlies the Prudhoe Oil Pool (POP) and is comprised of three lobes (Central, Southern, and Western) of the Put River Sandstone. A fourth lobe, the Northern Lobe, is in hydraulic communication with the POP and is included as part of the POP. The Southern Lobe has been on somewhat regular oil production since 1999 with an active waterflood. Appraisal activities conducted in 2005 identified the presence of oil and gas condensate in the Central and Western Lobes respectively but further development was not pursued at that time in part due to low flowrates that resulted in operational challenges associated with hydrate deposition. The Central Lobe contains and estimate LI to 2.7 MMBO in place and the Western Lobe contains an estimated 69.6 to 104.4 BCF in place with a condensate yield of approximately 40 bbls/MMCF, which yields condensate in place values of between 2.8 and 4.2 MMBC. Conservation Order 559A December 13, 2018 Page 2 of 9 2. Prudhoe Oil Pool The POP, which is defined by CO No. 341F, underlies the PROP and consists of a massive oil rim overlain by a massive gas cap that has been in production since 1977 and has numerous enhanced recovery projects occurring in the various parts of the field. Generally speaking POP wells are very productive due to the high-quality reservoir rocks encountered in the pool. 3. Potential for Commineline Several wells penetrate the PROP and the POP and would be candidates for downhole commingling. Commingling of production in these wellbores should allow for increased flowrates and flow velocity in the tubing and reduce the potential for the hydrate deposition that is problematic in production from wells completed solely in the PROP. Since standalone production of the Central and Western Lobes is not viable due to hydrate deposition those reserves are essentially trapped. Commingling of production with the POP will allow these resources to be recovered. 4. Potential for Crossflow There is potential of crossflow between the POP and the PROP if a commingled well is shut in. For a short duration shut in period the crossflow is not expected to be significant. In the event of a longer duration shut in period the PROP and POP could be mechanically isolated downhole to prevent crossflow. 5. Production Allocation Downhole fluid samples will be collected from each pool for the purposes of geochemical analysis. During the first six months of commingled production a production log, or differential well test, will be run on the well and a geochemical analysis performed to verify the accuracy of geochemical analysis for production allocation purposes. Semi-annual geochemical analyses will be conducted for production allocation purposes and production logs or differential well tests will be run as needed to assess production anomalies. 6. Reservoir Surveillance Bottomhole pressure surveys for the POP would only be conducted in wells that are not commingled with the PROP. Bottomhole pressure surveys for the PROP can be obtained by setting a plug to separate the POP and PROP. CONCLUSIONS: 1. Downhole commingling of production between the PROP and POP should allow for improved resource recovery from the Prudhoe Bay Unit by allowing for the development of up to 6.9 million barrels of hydrocarbon liquids in place within the PROP that would not be recoverable as a standalone development. 2. Production allocation via geochemical analysis in wells commingled downhole has proven to provide adequate results for production allocation purposes elsewhere in the field. Conservation Order 559A December 13, 2018 Page 3 of 9 3. Proper reservoir surveillance and monitoring can be accomplished by setting downhole plugs to isolate the PROP and POP so that reservoir pressures in the PROP can be obtained. There's a significant number of wells in the area that penetrate only the POP so losing the ability to obtained reservoir pressures in the POP in the commingled wells will not impact reservoir surveillance or monitoring. 4. In the event of a prolonged period of shut in for a commingled well the PROP and POP can be mechanically isolated downhole to prevent crossflow between the reservoirs. NOW, THEREFORE, IT IS ORDERED THAT: Conservation Order No. 559 is superseded and its record incorporated by reference in this order. CO No. 559.001, CO No. 559.007, CO No. 559.008, and CO No. 559.009 remain in effect, all other administrative approvals issued under CO No. 559 are superseded. In addition to statewide requirements under 20 AAC 25 (to the extent not superseded by these rules), the following rules apply to the Put River Oil Pool within the following described area: UMIAT MERIDIAN TIIN R14E Sections: 3, 4, 9, 10, 11(SWA), 14(W/2), 15, 16, 21, 22, 23(W/2 and SE/4), 25(S/2), 26, 27, 28, 33, 34, 35, 36 TI IN R15E Sections: 29(S/2), 30(S/2), 31, 32 T10N R14E Sections: 1, 2, 3, 11, 12, 13, 14 TION R15E Sections: 5, 6, 7, 8, 17, 18 Rule 1 Pool Definition (Restated from CO No. 559) The Put River Oil Pool is defined as the sandstone reservoirs in the Southern, Central and Western lobes that correlate with the interval 9,638 to 9,719 measured feet on the Borehole Compensated Sonic Log, Run 2, Dated September 28, 1975, in the Atlantic Richfield - Exxon NGI No. 1 well, but excluding the Northern Lobe reservoirs that are in pressure communication with the Prudhoe Oil Pool gas cap in the Sag River Formation. (a) In addition to the requirements of 20 AAC 25.030, the conductor casing must be set at least 75' TVD below the surface. Conservation Order 559A December 13, 2018 Page 4 of 9 (b) In addition to the requirements of 20 AAC 25.030, the surface casing must be set at least 500' TVD below the base of the permafrost. Rule 3 Automatic Shut-in Equipment (Rescinded by Other Order No. 66) Rule 4 Common Production Facilities and Surface Commingling (Revised by CO No. 559.011) (a) Production from the Put River Oil Pool may be commingled with production from the Prudhoe Bay Oil Pool, and other oil pools located in the Prudhoe Bay Unit in surface facilities prior to custody transfer. (b) The Prudhoe Bay Unit Western Operating Metering Plan, described by letter from BPXA dated April 23, 2002 and detailed within the "Prudhoe Bay Unit (PBU) Western Satellite Production Metering Plan — Policies and Procedures Document" dated August 1, 2002 is approved for allocation of production from Put River Oil Pool wells. (c) Put River Oil Pool wells will use well allocation factors derived for their designated flow station. (d) All wells must be tested a minimum of once per month. The Commission may require more frequent or longer tests if the allocation quality deteriorates. (e) Technical process review meetings shall be held at least annually. (f) The operator shall submit a review of pool production allocation factors and issues over the prior year with the annual reservoir surveillance report and retain electronic file(s) containing daily allocation data and daily test data for a minimum of five years. Rule 5 Reservoir Pressure Monitoring (Restated from CO No. 559) (a) Prior to regular production or injection, an initial pressure survey must be taken in each well. (b) A minimum of one bottom -hole pressure survey per producing Lobe within the Put River Sandstone shall be run annually. The surveys required by part (a) of this rule may be used to fulfill the minimum requirements. (c) If six or more wells are active within a Lobe of the Put River Oil Pool, a second bottom - hole pressure survey shall be run annually. (d) The reservoir pressure datum will be 8100'ss. (e) Pressure surveys may be stabilized static pressure measurements at bottom -hole or extrapolated from surface (single phase fluid conditions), pressure fall-off, pressure buildup, multi -rate tests, drill stem tests, or open -hole formation tests. (f) Data and results from pressure surveys shall be submitted with the annual reservoir surveillance report. All data necessary for analysis of each survey need not be submitted with the report but must be available to the Commission upon request. (g) Results and data from special reservoir pressure monitoring tests shall also be submitted in accordance with part (e) of this rule. Rule 6 Gas -Oil Ratio Exemption (Restated from CO No. 559) (a) Wells producing from the Put River Oil Pool area are exempt from the gas -oil -ratio limits of 20 AAC 25.240(a) so long as the requirements of 20 AAC 25.240(b) are met. (b) For production within the Southern Lobe of the Put River Sandstone, except as allowed Conservation Order 559A December 13, 2018 Page 5 of 9 under (c) of this rule, the exemption from the gas -oil -ratio limit is not effective until waterflood has been initiated and the Commission by administrative approval has authorized application of the exemption. (c) Notwithstanding (a) and (b) of this rule, pre -production of injectors for up to three weeks is allowed without regard to 20 AAC 25.240(a) and (b) Rule 7 Approved Depletion Plan (Restated from CO No. 559) (a) Waterflood operations are approved within the Western and Southern Lobes of the Put River Oil Pool. (b) Commission approval is required prior to commencement of all other enhanced recovery operations. Rule 8 Annual Reservoir Review (Revised by CO No. 559.010) An annual report must be filed. The report must include future development plans, reservoir depletion plans, and surveillance information for the prior calendar year, including: (a) Voidage balance by month of produced, and injected fluids and cumulative status. (b) Reservoir pressure map at datum, summary and analysis of reservoir pressure surveys within the pool. (c) Results and, where appropriate, analysis of production and injection surveys, tracer surveys, observation well surveys, and any other special monitoring. (d) Review of pool production allocation factors and issues over the prior year. (e) Progress of enhanced recovery project implementation and reservoir management summary including results of reservoir simulation studies. (f) A detailed summary of all Weatherford Generation 2 (Gen 2) installations to date, the performance of each Gen 2, all operational issues relating to the Gen 2, and any additional Gen 2 -related test results. The AOGCC reserves the right to call a meeting on Gen 2 related issues if warranted. Rule 9 Waiver of "Application for Sundry Approval" Reauirement for Workover Operations (ref. C.O. 556) (Restated from CO No. 559) (a) Except as provided in (d) and (e) of this rule, the requirement to submit an Application for Sundry Approvals (Form 10-403) and supporting documentation for workover activities described in 20 AAC 25.280(a) (1), (2), (3) and (5) is waived or modified for development wells as provided in the Commission document entitled "Well Work Operations and Sundry Notice/Reporting Requirements for Pools Subject to Sundry Waiver Rules," dated July 15, 2005 (referred to below as "Sundry Matrix"). This waiver and modification do not affect the operator's responsibility to submit a Report of Sundry Well Operations (Form 10-404) within 30 days following the completion of a workover operation. (b) Except as provided in (d) and (e) of this rule, the requirement to submit an Application for Sundry Approvals (Form 10-403) and supporting documentation for workover activities described in 20 AAC 25.280(a) (1) and (5) is modified for service wells as provided in the Sundry Matrix. This modification does not affect the operator's Conservation Order 559A December 13, 2018 Page 6 of 9 responsibility to submit a Report of Sundry Well Operations (Form 10-404) within 30 days following the completion of a workover operation. (c) The Sundry Matrix summarizes the sundry approval and reporting requirements that apply to various categories of operations in the specific well types under Commission regulations as modified by these rules. (d) The waivers provided under (a) of this rule do not apply to wells that are required to be reported to the Commission under the provisions of Rule 9. (e) The Commission reserves the discretion to require that an operator submit an Application for Sundry Approvals for a particular well or for a particular operation on any well. (t) Each week the operator shall provide the Commission with a report of workover operations performed the previous week that did not require submission of a Form 10- 403. (These operations are listed in Column 2 of the Sundry Matrix.) The report must include the date, well, permit to drill number, nominal operation completed, and a brief description of that operation including depths of perforations, perforations, and stimulated zones. (g) Nothing in this rule precludes an operator from filing an Application for Sundry Approvals (Form 10-403) in advance of any well work or from including Sundry authorized operations (listed in column 3 of the Sundry Matrix in the weekly report required by (f) of this rule. (h) Unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any provision of this rule or administratively amend any provision including the Sundry Matrix, as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. Rule 10 Annular Pressures (Restated from CO No. 559) (a) At the time of installation or replacement, the operator shall conduct and document a pressure test of tubulars and completion equipment in each development well that is sufficient to demonstrate that planned well operations will not result in failure of well integrity, uncontrolled release of fluid or pressure, or threat to human safety. (b) The operator shall monitor each development well daily to check for sustained pressure, except if prevented by extreme weather conditions, emergency situations, or similar unavoidable circumstances. Monitoring results shall be made available for AOGCC inspection. (c) The operator shall notify the AOGCC within three working days after the operator identifies a well as having (a) sustained inner annulus pressure that exceeds 2500 prig for wells processed through the Lisburne Processing Center and 2000 psig for all other development wells, or (b) sustained outer annulus pressure that exceeds 1000 psig. (d) The AOGCC may require the operator to submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action or increased surveillance for any development well having sustained pressure that exceeds a limit set out in paragraph 3 of this rule. The AOGCC may approve the operator's proposal or may require other corrective action or surveillance. The AOGCC may require that Conservation Order 559A December 13, 2018 Page 7 of 9 corrective action be verified by mechanical integrity testing or other AOGCC approved diagnostic tests. The operator shall give the AOGCC sufficient notice of the testing schedule to allow the AOGCC to witness the tests. (e) If the operator identifies sustained pressure in the inner annulus of a development well that exceeds 45% of the burst pressure rating of the well's production casing for inner annulus pressure, or sustained pressure in the outer annulus that exceeds 45% of the burst pressure rating of the well's surface casing for outer annulus pressure, the operator shall notify the AOGCC within three working days and take corrective action. Unless well conditions require the operator to take emergency corrective action before AOGCC approval can be obtained, the operator shall submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action. The AOGCC may approve the operator's proposal or may require other corrective action. The AOGCC may also require that corrective action be verified by mechanical integrity testing or other AOGCC approved diagnostic tests. The operator shall give the AOGCC sufficient notice of the testing schedule to allow the AOGCC to witness the tests. (f) Except as otherwise approved by the AOGCC under (d) or (e) of this rule, before a shut-in well is placed in service, any annulus pressure must be relieved to a sufficient degree (l) that the inner annulus pressure at operating temperature will be below 2000 psig, and (2) that the outer annulus pressure at operating temperature will be below 1000 psig. However, a well that is subject to (c) but not (e) of this rule may reach an annulus pressure at operating temperature that is described in the operator's notification to the AOGCC under (c) of this rule, unless the AOGCC prescribes a different limit. (g) For purposes of this rule, "inner annulus" means the space in a well between tubing and production casing; "outer annulus" means the space in a well between production casing and surface casing; "sustained pressure" means pressure that (a) is measurable at the casing head of an annulus, (b) is not caused solely by temperature fluctuations, and (c) is not pressure that has been applied intentionally. Rule 11 Use of Multiphase Flowmeters in Well Testing (Superseded by Other Order No. 105) Rule 12 Commingling of Production in the Same Wellbore (New this order) (a) Commingling production from the Put River Oil Pool with the Prudhoe Oil Pool is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: (i) Prior to commingling production, a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Put River Oil Pool (in isolation from the Prudhoe Oil Pool). (ii) For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical Conservation Order 559A December 13, 2018 Page 8 of 9 sampling an analysis must occur at least twice per year and not less frequently than once every seven months. (iii)A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. (iv)ln addition to the other requirements of Rule 4 of CO 559, the monthly reports required by Rule 4(f) of CO 559 must identify production allocated to the Put River Oil Pool and the Prudhoe Oil Pool for commingled wells. (v) The volumes reported on Form 10-405 {i.e. in accordance with 20 AAC 25.230(b)) must identify commingled production allocated to the Put River Oil Pool and the Prudhoe Oil Pool. (vi)A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Put River and Prudhoe Oil Pools, along with the analyses of the geochemical tests, production logs, and regular well tests. (b) A commingled well that is shut in for more than three months shall have the Put River and Prudhoe Oil Pools mechanically isolated to prevent crossflow between the pools. Rule 13 Administrative Action (Renumbered this order) Unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any rule stated above or administratively amend any rule, including the "Sundry Matrix" referred to in Rule 8, as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. DONE at Anchorage, Alaska and dated December 13, 2018. //signature on file// //signature on file// Hollis S. French Daniel T. Seamount, Jr. Chair, Commissioner Commissioner Conservation Order 559A December 13, 2018 Page 9 of 9 APPEAL As provided in AS 3I.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time m 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 giants 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 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 THE STATE °fALASKA GOVERNOR MIKE DUNLEAVY Ms. Katrina Garner Alaska Oil and Gas Conservation Commission ADMINISTRATIVE APPROVAL CONSERVATION ORDER NO. 559A.001 CONSERVATION ORDER NO. 34111.002 Area Manager, Alaska Reservoir Development Team BP Exploration (Alaska), Inc. P.O. Box 196612 Anchorage, AK 99519-6612 333 west Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov Re: Docket Numbers: CO -19-019, CO -19-020, and CO -19-021 Request to contract and redefine the Put River Oil Pool, amend rule 18 of Conservation Order No. CO 341H, and grant gas oil ratio exemptions under 20 AAC 25.240(b)(3) to the Central and Western Lobes of the Put River Undefined Oil Pools Prudhoe Bay Unit Prudhoe Bay Field Prudhoe and Put River Oil Pools Dear Ms. Gardner: By letter dated November 15, 2019, BP Exploration (Alaska), Inc. (BPXA) requested three actions from the Alaska Oil and Gas Conservation Commission (AOGCC). First, to administratively amend conservation order (CO) 559A to contract the Put River Oil Pool (PROP) to the area encompassed by the Southern Lobe of the Put River sandstone. Second, to modify Rule 18 of CO 341H to ensure that the downhole commingling authorization that currently allows downhole commingling of any well in the PROP with the Prudhoe Oil Pool (POP) will continue to apply to wells completed within the currently established bounds of the PROP when the affected area of the PROP is contracted. Third, to grant a gas oil ratio exemption to wells completed in the Central and Western lobes of the Put River sandstone for the purposes of collecting data to develop a reservoir development strategy for those sands in accordance with 20 AAC 25.240(b)(3). BPXA's requests are hereby GRANTED. The PROP was defined by CO 559 on November 22, 2005, and included what were referred to as the Central, Southern, and Western lobes of the Put River sandstone within the pool even though the three lobes contained hydrocarbons with different properties and reservoir pressures that were vastly different. At the time the pool was defined the Central Lobe contained 31.2° API oil at 3,923 psi, the Southern Lobe contained 26.9° API oil at 2,710 psi, and the Western Lobe contained 57° API condensate at 4,173 psi. The Southern Lobe is the only portion of the PROP that has been CO 559A.001 and CO 341H.002 December 19, 2019 Page 2 of 6 on long term production and has an active water injection project for reservoir pressure maintenance and enhanced oil recovery (EOR). There have been recent attempts to produce from the Central and Western Lobes, but BPXA is still attempting to define to proper development method for these portions of the PROP. Due to the differing reservoir fluid properties and pressures, as well as the maturity of the methods of development for the three lobes it makes sense to treat them as separate pools instead of a single pool. Since the Southern Lobe is the most well- developed portion of the PROP, and has the ongoing injection activity, it makes sense to contract the affected area of the existing PROP to the limits of the Southern Lobe. Since development plans for the Central and Western Lobes are still being developed it is appropriate at this time to leave them as separate undefined pools. Contracting the affected area of CO 559A triggers the need to modify some of the rules in the order that addressed the three lobes separately so that the rules remain pertinent to the ongoing operations in the Southern Lobe. The rules that need to be amended are Rule 5 Reservoir Pressure Monitoring, which requires pressure surveys in each producing lobe on a yearly basis, Rule 6 Gas - Oil Ratio Exemption, which stated a gas oil ratio exemption for the Southern Lobe was not valid until water injection commenced and since water injection has been in place for years is no longer an appropriate rule, and Rule 7 Approved Depletion Plan, which stated water injection was approved for the three lobes and thus needs to be amended to remove the references to the lobes that will no longer be in the PROP. The downhole commingling on a pool wide basis for all production wells located in the PROP with the POP approved in CO 341G carried into CO 341H issued on April 22, 2019. Downhole commingling on a pool wide basis was allowed based on evaluation of the effects on downhole commingling for all three lobes in the PROP. However, once the PROP is contracted the language in Rule 18 downhole commingling would no longer be authorized for the Central and Western Lobes of the Put River sandstone. Modifying the language in Rule 18 is therefore necessary in order to keep downhole commingling authorized for wells located in the Central and Western Lobes. Due to the Central and Western Lobes of the Put River sandstone getting contracted out of the PROP, the gas oil ratio waiver based on the ongoing water injection project in the PROP will no longer be valid. The Central and Western Lobes of the Put River sandstone are currently in the early stage of development and the optimal development plan for these reservoirs has not been determined. In order to allow for collection of more reservoir performance data, and, eventually, optimal development plans for each lobe, a gas oil ratio waiver in accordance with 20 AAC 25.240(b)(3) is appropriate. Rule 13 of CO 559A allows the order to be amended administratively as long as the proposed changes will not promote waste or jeopardize correlative rights and are based on sound engineering and geoscience principles. Contracting the affected area of the PROP to the limits of the Southern Lobe of the Put River sandstone will not cause waste or jeopardize correlative rights and is based on sound engineering and geoscience principles. Rule 21 of CO 341H allows for the order to be amended administratively so long as the proposed changes will not promote waste or jeopardize correlative rights and is based on sound engineering and geoscience. Amending Rule 18 of CO 341H to allow wells currently approved for downhole commingling to remain eligible for CO 559A.001 and CO 341H.002 December 19,2019 Page 3 of 6 downhole commingling will not promote waste or jeopardize correlative rights and is based on sound engineering and geoscience principles. Therefore, both CO 559A and CO 341H can be administratively amended to adopt the proposed changes. NOW, THEREFORE, IT IS ORDERED THAT: The Affected Area of CO 559A is revised to read as follows: UMIAT MERIDIAN T11N R14E Sections: 22(SE/4), 23(S/2), 24(S/2), 25, 26, 27, 28, 33, 34, 35, 36 Tl IN R15E Sections: 29(S/2), 30(W/2 and SE/4), 31, 32 TION R14E Sections: 1, 2, 3, 10(E/2), 11, 12, 13, 14 TION R15E Sections: 4(W/2), 5, 6, 7, 8, 9(W/2), 16(NW/4), 17, 18 Rule 5 of CO 559A is revised to read as follows: Rule 5 Reservoir Pressure Monitoring (a) Prior to regular production or injection, an initial pressure survey must be taken in each well. (b) A minimum of one bottom -hole pressure survey within the Put River Oil Pool shall be run annually. The surveys required by part (a) of this rule may be used to fulfill the minimum requirements. (c) If six or more wells are active within a Lobe of the Put River Oil Pool, a second bottom - hole pressure survey shall be run annually. (d) The reservoir pressure datum will be 8100'ss. (e) Pressure surveys may be stabilized static pressure measurements at bottom -hole or extrapolated from surface (single phase fluid conditions), pressure fall-off, pressure buildup, multi -rate tests, drill stem tests, or open -hole formation tests. (f) Data and results from pressure surveys shall be submitted with the annual reservoir surveillance report. All data necessary for analysis of each survey need not be submitted with the report but must be available to the Commission upon request. (g) Results and data from special reservoir pressure monitoring tests shall also be submitted in accordance with part (f) of this rule. CO 559A.001 and CO 341H.002 December 19, 2019 Page 4 of 6 Rule 6 of CO 559A is revised to read as follows: Rule 6 Gas -Oil Ratio Exemption (a) Wells producing from the Put River Oil Pool area are exempt from the gas -oil -ratio limits of 20 AAC 25.240(a) so long as the requirements of 20 AAC 25.240(b) are met. (b) Notwithstanding (a) of this rule, pre -production of injectors for up to three weeks is allowed without regard to 20 AAC 25.240(a) and (b). Rule 7 of CO 559A is revised to read as follows: Rule 7 Approved Depletion Plan (a) Waterflood operations are approved within the Put River Oil Pool. (b) Commission approval is required prior to commencement of all other enhanced recovery operations. Rule 18 of CO 341H is revised to read as follows: Rule 18 Commingling of Production in the Same Wellbore (Revised: CO 341F.001. CO 341G, and this order) (a) Commingling production from the Aurora Oil Pool in Well S-26 or the affected area of the Put River Oil Pool, as that pool was defined CO 559A on December 13, 2018, (hereinafter referred to as the Put River Sands) with the Prudhoe Oil Pool is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: i. Prior to commingling production, a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Aurora or Put River Sands (in isolation from the Prudhoe Oil Pool). ii. For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling and analysis must occur at least twice per year and not less frequently than once every seven months. iii. A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. iv. The operator shall submit a review of pool production allocation factors and issues over the prior year with the annual reservoir CO 559A.001 and CO 341H.002 December 19, 2019 Page 5 of 6 surveillance report and retain electronic file(s) containing daily allocation data and daily test data for a minimum of five years. v. The volumes reported on Form 10-405—i.e., in accordance with 20 AAC 25.230(b)—must identify commingled production allocated to the Aurora Oil Pool or Put River Sands and the Prudhoe Oil Pool. vi. A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Aurora Oil Pool or Put River Sands and the Prudhoe Oil Pool, along with the analyses of the geochemical tests, production logs, and regular well tests. (b) A commingled well that is shut in for more than six months shall have the Put River Sands and Prudhoe Oil Pool mechanically isolated to prevent crossflow between the pools. (c) Downhole commingling of production between the POP and LOP in the PBU L5-21 well is approved subject to the following allocation methodology; i. All oil and water allocated to the well shall be allocated to the LOP, ii. All NGLs allocated to the well shall be allocated to the POP, iii. Gas shall be allocated to the POP and LOP based on the following formulas; 1. Prudhoe Formation Gas Rate = Total Gas Rate – Lisburne Formation Gas Rate 2. Lisburne Formation Gas Rate = allocated oil rate x Lisburne Oil Pool Solution Gas Oil Ratio 3. Lisburne Oil Pool Solution Gas Oil Ratio = 863 scflstbo In accordance with 20 AAC 25.240(b)(3) the gas oil ratio limitations of 20 AAC 25.240(a) are hereby waived for wells producing from the Central and Western Lobes of the Put River sandstone as those Lobes were shown in the August 19, 2005, application from BPXA that led to the establishment of the Put River Oil Pool by CO 559 on November 22, 2005, to allow for the collection of reservoir performance data so that appropriate development scenarios for the Central and Western Lobes of the Put Rive sandstone can be developed. This waiver is subject to the following conditions: 1) This waiver is valid through December 31', 2022. 2) Wells in the Central and Western Lobes of the Put River sandstone must be tested in accordance with the PBU's well testing and allocation procedures and be tested at least twice per month while flowing. CO 559A.001 and CO 341H.002 December 19, 2019 Page 6 of 6 3) On a quarterly basis, the operator must submit copies of all well tests for the Central and Western Lobes of the Put River sandstone showing the GOR at the time of the test. DONE at Anchorage, Alaska and dated December 19, 2019. Je Ie L. Chmielowski Cbinmissioner 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 atter the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 THE S'1'A'1'E °fALAS-KA GOVERNOR MIKE OUNLFAVY Mr. Oliver Sternicki Alaska Oil and Gas Conservation Commission ADMINISTRATIVE APPROVALS CONSERVATION ORDER NO. 83A.001 CONSERVATION ORDER NO. 207D.002 CONSERVATION ORDER NO. 311B.004 CONSERVATION ORDER NO. 317B.004 CONSERVATION ORDER NO. 329A.002 CONSERVATION ORDER NO. 3411.002 CONSERVATION ORDER NO. 345.003 CONSERVATION ORDER NO. 452.005 CONSERVATION ORDER NO. 457B.007 CONSERVATION ORDER NO. 471.010 CONSERVATION ORDER NO. 484A.005 CONSERVATION ORDER NO. 505B.003 CONSERVATION ORDER NO. 559A.002 CONSERVATION ORDER NO. 570.011 Well Integrity Engineer Hilcorp North Slope LLC P. O. Box 196612 Anchorage, AK 99519-6612 Re: Docket Numbers: CO -20-004 and CO -20-008 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.closka.gov Request to amend normal operating limit for inner annulus pressure for non Lisburne development area wells from 2,000 psig to 2,100 psig and to add an administrative approval clause to Conservation Order No. 492 Prudhoe Bay Unit All Oil Pools Dear Mr. Sternicki: By application dated February 24, 2020, Hilcorp North Slope, LLCt (HNS) applied to modify Conservation Order No. 492 (CO 492) to raise the inner annulus (IA) normal operating limit (NOL) reporting threshold from 2,000 psig to 2,100 psig for all wells not processed through the Lisburne Processing Center (LPC)'. CO 492 was issued on June 26, 2003 and applied to all pools in the r The February 24, 2020, application was submitted by BP Exploration (Alaska) Inc. (BPXA) as operator of the Prudhoe Bay Unit (PBU) but effective on July 1, 2020, BPXA came under new ownership and was renamed HNS. HNS is currently the operator of the PBU. 2 The IA NOL for wells processed through the LPC is currently set at 2,500 psig. FINS is not seeking to modify this at this time. COs 83A.001, 207D.002,31 1B.004,317B.003, 329A.002, 3411.002, 345.003, 452.005, 457B.006, 471.009, 484A.005, 505B.003, 559A.002, &.570.011 October 1, 2020 Page 2 of 4 Prudhoe Bay Unit (PBU). The order established rules for dealing with sustained casing pressure for all producers in the PBU. Some, but not all, of the pools in the PBU area have incorporated the rules found in CO 492 directly into its pool rules. CO 492 itself did not contain provisions to allow it the be administratively amended, so providing public notice and opportunity to comment was required in order to amend the order. As such CO 492 will be amended separately and this letter will amend the individual pool rules for the PBU area oil pools. Due to operational changes over time in the PBU, namely increases in the gas lift header pressures, the 2,000 psig NOL for the IA that requires notification to the Alaska Oil and Gas Conservation Commission (AOGCC) when it is exceeded is triggering numerous notifications. These notifications do not on their own require any corrective action to be taken, but simply are a reporting burden on the operator and the AOGCC. Increasing the NOL from 2,000 to 2,100 would decrease the frequency of these notifications. Currently, the NOL for the IA for wells processed through the LPC is 2,500 prig. Exceeding the 2,500 psig NOL triggers a reporting requirement, but does not, standing alone, require corrective action. Another limit that is currently in place, and is not being changed by this action, is a pressure limitation of 45% of the casing's burst pressure rating. Exceeding the 45% pressure limitation requires that corrective action to be taken. Increasing the reporting threshold from 2,000 psig to 2,100 psig for the wells that are not processed at the LPC will eliminate many unnecessary notifications for wells where notification was triggered by the gas lift system pressure instead of an actual problem with the well that might indicate loss of containment. Increasing the IA NOL from 2,000 psig to 2,100 psig for production wells that are not processed at the LPC is based on sound engineering and geoscience principles. Now therefore it is ordered that the text below shall replace the text in the specified rules in the following orders: Conservation Order Oil Pool Rules being replaced 207D Lisburne 15 457B Aurora 11 and 123 484A Polaris i l 505B Schrader Bluff 11 559A Put River 10 570 Raven 12 J In the current CO 45713, the pool rules for the Aurora Oil Pool, Rule I 1 contains paragraphs a. through f. of the annular pressure rules and Rule 12 contains the definitions in paragraph g. of the annular pressure rules. Paragraph g. is a part of the revised Annular Pressure of Production Wells shown here and thus Rule 12 in CO 457B is being eliminated. COs 83A.001, 207D.002, 311B.004,317B.003, 329A.002, 3411.002, 345.003, 452.005, 457B.006, 471.009, 484A.005, 505B.003, 559A.002, & 570.011 October I, 2020 Page 3 of 4 And be added as the new rule indicated in the following orders: Conservation Order Oil Pool Added rule 83A Kuparuk River 9 311B West Beach 14 317B Pt McIntyre and Stump Island 17 329A Niakuk 13 341I Prudhoe Oil Pool 22 345 North Prudhoe Bay 12 452 Midnight Sun 15 471 Borealis 11 Annular Pressure of Production Wells a. At the time of installation or replacement, the operator shall conduct and document a pressure test of tubulars and completion equipment in each production well that is sufficient to demonstrate that planned well operations will not result in failure of well integrity, uncontrolled release of fluid or pressure, or threat to human safety. b. The operator shall monitor each production well daily to check for sustained pressure, except if prevented by extreme weather conditions, emergency situations, or similar unavoidable circumstances. Monitoring results shall be made available for Commission inspection. c. The operator shall notify the Commission within three working days after the operator identifies a well as having (I) sustained inner annulus pressure that exceeds 2500 psig for wells processed through the Lisburne Processing Center and 2100 psig for all other production wells, or (2) sustained outer annulus pressure that exceeds 1000 psig. d. The Commission may require the operator to submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action or increased surveillance for any production well having sustained pressure that exceeds a limit set out in paragraph (c) of this rule. The operator shall give the Commission notice consistent with the requirements of Industry Guidance Bulleting 10-OIA of the testing schedule to allow the Commission to witness the tests. e. If the operator identifies sustained pressure in the inner annulus of a production well that exceeds 45% of the burst pressure rating of the well's production casing for inner annulus pressure, or sustained pressure in the outer annulus that exceeds 45% of the burst pressure rating of the well's surface casing for outer annulus pressure, the operator shall notify the Commission within three working days and take corrective action. Unless well conditions require the operator to take emergency corrective action before Commission approval can be obtained, the operator shall submit in an Application for Sundry Approvals (Form 10- 403) a proposal for corrective action. The operator shall give the Commission sufficient notice of the testing schedule to allow the Commission to witness the tests. COs 83A.001, 207D.002, 31 1B.004, 317B.003, 329A.002, 3411.002, 345.003, 452.005, 457B.006, 471.009, 484A.005, 505B.003, 559A.002, & 570.011 October 1, 2020 Page 4 of 4 Except as otherwise approved by the Commission under (d) or (e) of this rule, before a shut-in well is placed in service, any annulus pressure must be relieved to a sufficient degree (1) that the inner annulus pressure at operating temperature will be below 2000 prig, and (2) that the outer annulus pressure at operating temperature will be below 1000 prig. However, a well that is subject to (c) but not (e) of this rule may reach an annulus pressure at operating temperature that is described in the operator's notification to the Commission under (c) of this rule, unless the Commission prescribes a different limit. g. For purposes of this rule, 1. "inner annulus" means the space in a well between tubing and production casing; 2. "outer annulus" means the space in a well between production casing and surface casing; 3. "sustained pressure" means pressure that (A) is measurable at the casing head of an annulus, (B) is not caused solely by temperature fluctuations, and (C) is not pressure that has been applied intentionally. DONE at Anchorage, Alaska and dated October 1, 2020. Jeremy IDa.... signenny le,emy M. Pnfe Dale: 2020 oro M. Price ,xsgae oaag• Jeremy M. Price Chair, Commissioner Daniel T. l igeally signed by Daniel T. Seamount Jr. Seamount, Jr. It, 2a10.10.01 12M 46 aagn Daniel T. Seamount, Jr. Commissioner Digitally signed by Jessie L. Jerrie L. Chmielawski Chm ielow5kl Ile 2020.10.01 12 22:07 -0900' Jessie L. Chmielowski 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 web further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Bernie Karl K&K Recycling Inc. Gordon Severson Richard Wagner P.O. Box 58055 3201 Westmar Cir. P.O. Box 60868 Fairbanks, AK 99711 Anchorage, AK 99508-4336 Fairbanks, AK 99706 George Vaught, Jr. Darwin Waldsmith P.O. Box 13557 P.O. Box 39309 Denver, CO 80201-3557 Ninilchik, AK 99639 From: Rixse, Melvin G (CED) Sent: Wednesday, June 10, 2020 2:27 PM To: Sternicki, Oliver R Cc: Colombie, JodyJ (CED) Subject: FW: June 25 hearing to amend 4 CO's Attachments: CO -20-008 Public Hearing Notice.pdf, RE: CO -20-008 This is a clarification email to BPXA, Oliver Sternicki, that the AOGCC interpretation of any development well going through Lisburne Production Center, whether on gas lift or natural flow, will be allowed 2500 psig sustained inner annulus pressure before reporting is required. CO -20-008 as written should be fine. We will then administratively amend the COs per the notice. Mel Rixse Senior Petroleum Engineer (PE) Alaska Oil and Gas Conservation Commission 907-793-1231 Office 907-223-3605 Cell 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 Mel Rixse at (907-793-1231) or( Melvin. Rix se(alaIdska gov). cc. Jody Colombie From: Colombie, Jody J (CED) Sent: Wednesday, June 10, 20208:59 AM To: Chmielowski, Jessie L C (CED) <iessie.chmielowski(caalaska eov> Cc: Rixse, Melvin G (CED) <melvin.rixse @alaska gov> Subject: RE: June 25 hearing to amend 4 CO's No one has requested a hearing. Mel: Do you vote to vacate? Jody From: Chmielowski, Jessie L C (CED) <iessie.chmielowskiPalaska eov> Sent: Wednesday, June 10, 2020 8:57 AM To: Colombie, Jody J (CED) <jody.colombie(o)alaska.gov> Cc: Rixse, Melvin G (CED) <melvin.rixse(@alaska.zov> Subject: lune 25 hearing to amend 4 CO's Hi Jody, Were there any requests to hold the hearing that's scheduled for June 25? Wondering if we can vacate and administratively amend the CO's? Ca ombie, Jody J (CED) From: Sternicki, Oliver R <Oliver.Sternicki@bp.com> Sent: Tuesday, June 2, 2020 3:43 PM To: Rixse, Melvin G (CED) Cc: Lau,Jack Subject: RE: CO -20-008 Mel, I was doing some work on the NOL increase and noticed something that might need slightly more clarification. The operator shall notify the AOGCC within three working days after the operator identifies a development well as having (a) sustained inner annulus pressure that exceeds 2500 psig for wells with supplied gas lift pressure from the Lisburne Processing Center and 2100 psig for all other development wells, or (b) sustained outer annulus pressure that exceeds 1000 psig- The issue is that this wording could be interpreted as just applying to the gas lifted produces at LPC and excludes the natural flow producers at that facility and in the GPMA area. There are currently 69 wells this applies to. This part should read: ...for wells with supplied gas lift pressure from the Lisburne Processing Center or wells processed through the Lisburne Processing Center... Let me know what you think, Oliver Sternicki Wo o ovn.i w.m aw.re..w.. Sr. Well Integrity Engineer BP Exploration Alaska Cell: 1 (907) 350 0759 of Iver. sternickiabp. com From: Rixse, Melvin G (CED) <melvin.rixse@alaska.gov> Sent: Friday, May 15, 20204:31 PM To: Sternicki, Oliver R <Oliver.Sternicki@bp.com> Subject: FW: CO -20-008 From: Colombie, Jody J (CED) <iodv.colombiePalasl<a.eov> Sent: Friday, May 15, 2020 3:16 PM To: AOGCC_Public_Notices <AOGCC Public NoticesPlist state ak us> Subject: [AOGCC_Public_Notices] CO -20-008 Docket Number: CO -20-008 Prudhoe Bay Field, All Pools Jody J Colombie Special Assistant Alaska Oil and Gas Conservation Commission 333 WLst T° Avenue Anchorage, AK 99501 (907) 793-1221 Direct (907) 276-7542 Fax List Name: AOGCC Public Notices@list.state ak us You subscribed as: rvan.danielCcfbp.com Unsubscribe at: http://list.state ak.us/mailman/options/aoecc public notices/roan daniel%40bp com STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMITINVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVITOPPUBLADVEERTISMENT.ATTACHED COPY OF ADVERTISING ORDER NUMBER AO -08-20-024 FROM: AGENCY CONTACT: Jody Colombie/Sl mantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A.O. AGENCY PHONE: 333 West 7th Avenue 5/152020 907 279-1433 Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: 907 276-7542 TO PUBLISHER: Anchorage Daily News LLC SPECIAL INSTRUCTIONS: PO Box 140147 Anchorage Alaska 99514-0174 TYPE OF ADVERTISEMENT: W LEGAL r— DISPLAY (— CLASSIFIED F' OTHER (Specify below) DESCRIPTION PRICE CO -20-008 Initials of who prepared AO: Alaska Non -Taxable 92-600185 SUBMIT INVOICE SHOWING ADVERTISING ORDER No CERTH7ED AFFHIAVIT OF PUBLICATION WITHATTACHED COPY OF ADveansmeNT To: AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 1 Pae 1 of I Total of All Pa es $ REF Type I Number Amount Date Comments I PvN IVCO21795 2 AD AO -08-20-024 3 4 FIN AMOUNT SY Act Template PGM LGR Object FY DIST LIQ I 20 AOGCC 3046 20 2 3 4 5 Purch n u ri Title: Purchasing Authority's Signature Telephone Number .O. It and receiving apencyname must appear on all invoices and documents relating tothis purchase. 7-t12is registered for tax free transactions under Chapter 32,IRScods. Registragonnumber92-73-00061(. Items are for the exclusive use of the state and of for resale. DISTRIBUTION: Division Fiscal/Original AO Copies: Publisher (faxed), Division Fiscal, Receiving Form: 02-901 Revised: 5/21/2020 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -20-008 Prudhoe Bay Field, All Pools BP Exploration Alaska, Inc., by application received February 24, 2020, requests the Alaska Oil and Gas Conservation Commission (AOGCC) revise Rule 3 of Conservation Orders 317, 505, 559 and 570 to include the following language: The operator shall notify the AOGCC within three working days after the operator identifies a development well as having (a) sustained inner annulus pressure that exceeds 2500 psig for wells with supplied gas lift pressure from the Lisburne Processing Center and 2100 psig for all other development wells, or (b) sustained outer annulus pressure that exceeds 1000 psig. In addition, on its own motion AOGCC proposes to add the language that "unless notice and public hearing are otherwise required, upon proper application the AOGCC may administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater." The AOGCC has tentatively scheduled a public hearing on this application for June 25, 2020, at 10:00 a.m. at 333 West 76'Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on June 5, 2020. Due to health mandates issued as a result of the covid-19 virus, if a hearing is requested, the hearing will be held telephonically. Those desiring to participate or be present at the hearing should call 1-800-315-6338 and, when instructed to do so, enter the code 14331. Because the hearing will start at 10:00 a.m., the phone lines will be available starting at 9:45 am. Depending on call volume, those calling in may need to make repeated attempts before getting through. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after June 7, 2020. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on June 22, 2020, except that, if a hearing is held, comments must be received no later than the conclusion of the June 25, 2020 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than June 20, 2020. J�M. Price Chair, Commissioner Bernie Karl K&K, Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir, Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 30 BP Exploration (Alaska) Inc.E Attn: Well Integrity Coordinator, PRB-20 Post Office Box 196612 Anchorage, Alaska 99519-66120 '' February 24, 2020 Mr. Jeremy Price Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, Alaska 99501 Subject: Request to amend Conservation Order No. 492 rule 3(a) and 6(a). Dear Mr. Price, BP Exploration (Alaska) Inc. requests an amendment to Conservation Order No. 492 rule 3(a) and 6(a) such that current notification and pressure limits are changed from 2000psi to 2100 psi for wells not processed through the Lisburne Processing Center. Current maximum gas lift header pressure in the Prudhoe Bay field for wells not processed through the Lisburne Processing Center regularly exceeds 2000psi. The field - wide IA (Inner Annulus) NOL (Normal Operating Limit) is set at 2000 psi for non -Lisburne development wells, excluding jet pump wells. Beginning in 2015 BPXA began installation of wireless digital annulus pressure gauges on all wells, this was completed in late 2019. Due to the increased accuracy of the annulus pressure readings and realtime monitoring/alerting capability, board operators are now very frequently responding to false alerts of IA NOL excursions on gas lifted wells due to gas lift header pressure exceeding 2000 psi, not sustained casing pressure as intended. BPXA requests that rule 3(a) and 6(a) be changed from 2000psi to 2100 psi (excluding jet pumps) for wells not processed through the Lisburne Processing Center to help minimize b>�d and well pad operators responding to false alerts. If you have any questions, please call me at 564-5430. Sincerely, Ryan Daniel BPXA Well Integrity Team Lead Attachments: Technical Justification Technical Justification for Conservation Order No. 492 Amendment February 24, 2020 History and Status: Gas lift header pressure at many of the drill sites and pads in the Prudhoe Bay field (excluding wells processed through the Lisburne Process Center) regularly exceeds the 2000 psi IA NOL set for development wells. Gas lift compressor outlet pressures are commonly set at 2100 psi. Historical gas lift pressures can be seen in Figure 1 & 2 for reference. The legacy IA NOL value of 2000 psi was set to remain compliant with Conservation Order No. 492 rule 3(a) and 6(a). Prior to the installation and monitoring of wireless annulus pressure gauges this was not as large of a problem due to one IA pressure read being recorded via mechanical gauge daily per well. If a pressure read exceeded the 2000 psi NOL it was reported to Well Integrity and evaluated to determine if the excursion was SCP or not. Currently all wells in the Prudhoe Bay field have the inner annulus pressures monitored in real-time by either the EOA or WOA production center board operators. The board operators are notified with an alert when the IA pressure of a well exceeds the set NOL value of 2000 psi. This ensures a timely notification and response to any potential excursion event. With the utilization of the wireless annulus pressure gauge alerting it has become an ongoing problem where wells supplied with gas lift pressure are regularly setting off alerts due to the gas lift supply pressure exceeding the 2000 psi NOL and not due to SCP as intended. This excessive alerting has the potential to desensitize workers to possible hazardous occurrences. Increasing IA NOL from 2000 psi to 2100 psi for development wells would eliminate the majority of these false NOL excursion alerts and allow resources to be more focused on response and evaluation of probable SCP events. This increase of 100 psi to the IA NOL is well within the design parameters of development wells across the Prudhoe Bay field. All development wells are included in this request in an effort to reduce the complexity of the IA NOL change. While non gas lifted wells are not subject to the same false alerts there is an increased risk of operating the field with IA NOLs varying for different types of wells. The use of gas lift on development wells, including natural flow producers, is continually changing, some require gas lift for kick off purposes only while others need constant gas lift. Gas lift usage may also change as a well ages depending on depletion or may change due to well work such as add pert/ reperf interventions. The tracking of these dynamic changes would be very difficult and the continual changing of NOL between 2000 psi and 2100 psi for individual wells in multiple data and control systems would greatly increase the complexity and management of NOLs across the field. This inconsistency in IA NOLs would be difficult for field personnel to continually keep track of and would reduce their effectiveness in identification of potential SCP events and would potentially result in misreporting of excursions. The IA NOL increase would not reduce the ability to identify SCP excursions in non -gas lifted wells. BPXA currently monitors development wells for minimum tubing by IA differential pressure thresholds as an indicator of communication. In addition to this SITP of non - gas lifted wells is in excess of 2100 psi, which if seen on the IA would indicate a loss of tubing integrity and would flag as SCP. Based on this it is requested to increase the IA NOL for all development wells (excluding jet pump wells and those processed through the Lisburn Processing Center) to 2100 psi. Figure 1- EOA DS Gas Lift Header Pressure EOA Gas Lift Pressure . WAV"IS szuzms snamzs bronms snwmss zmznbs ubnmb xnvm:b Figure 2- WOA Pad Gas lift Header Pressure WOA Gas lift Pressure umm snvmzs 5/V3ms anamli e/9nms 9nwm:s :11179015 Vbn016 MVM26 on. —mce —os os —osw —mcs —m u —mu —m15 I —us:1 —mnI —APs] —BPaa —oP.e n P.e —LPA —.1.e --x Pm PPW . .I —Ilea ---u na v na .PW x Pea I roa Il.a LQIO by 0 BP Exploration (Alaska)Inc. 900 East Belson Boulevard P 0. Box 196612 Anchorage. Alasxa 99519-6612 (907)561-5111 November 15, 2019 ELECTRONICALLY DELIVERED and VIA MAIL Mr. Jeremy Price, Chair Alaska Oil and Gas Conservation Commission 333 West 70i Ave, Suite 100 Anchorage, AK 99501 Re: Prudhoe Bay Unit Request for Administrative Approval to amend CO 559A contracting and redefining the Put River Oil Pool to the area encompassed by the Southern Lobe and designating the Western and Central Lobes as independent undefined pools Request for GOR waiver for the undefined Central and Western Lobes per 20 AAC 25.240(b)(3) Request to modify Rule 18 of CO 341H so that downhole commingling approval applies to both the defined PROP and the undefined Central and Western Lobes Dear Chair Price: BP Exploration Alaska (BPXA), as Operator of the Prudhoe Bay Unit, respectfully requests Administrative Action to amend CO 559A contracting and redefining the Put River Oil Pool to the area encompassed by the Southern Lobe and designating the Western and Central Lobes as independent undefined pools. Additionally, BPXA requests waiver of the gas -oil -limitations in 20 AAC 25.240 for the undefined Central and Western lobes in order to collect pool performance data. Lastly BPXA requests to modify Rule 18 of CO 341H so that downhole commingling approval applies to both the defined PROP and the undefined Central and Western Lobes. Context and History Conservation Order 559 (CO 559), dated November 22, 2005, states in Conclusion #4: "Each of the four sandstone Lobes comprising the PRS will require a unique depletion plan in order to obtain optimal recovery". This conclusion was in recognition of "pressure compartmentalization within and between the four sandstone Lobes comprising the PRS". Rule #7 in CO 559 approves waterflood operations within the Western and Southern Lobes of the Put River Oil Pool, and requires commission approval prior to commencement of all other enhanced recovery operations. For the bulk of the PROP's production history, a single depletion operation, waterflood, has been in effect in the Put River Oil Pool. RECEIVED NOV 18 2019 AOGCC Mr. Jeremy Price, Chair November 15, 2019 COs 559 and 341F were amended December 13, 2018 to CO 559A and CO 341G, allowing for commingled downhole production for wells in the Put River and Prudhoe Oil Pools. This order facilitated the initiation of commingled production on August 19, 2019 in well 15-41. This well has open perforations in both the Western and Central lobes, as well as the Ivishak. The Western lobe contains 57 degree gravity oil with a solution GOR of 24,650 scf(bbl, and the Central Lobe contains 31 degree gravity oil with a solution GOR of 485 scf(bbl. BPXA proposes, with the onset of production from the Western and Central Lobes, that optimal recovery from the pool is enhanced via defining the waterflood depletion operation underway in the Southern Lobe as applicable to that lobe alone. This action would align with meeting the "uniqueness" aspiration in CO 559. Under the current rule, and as recently experienced in September, 2019, an operational interruption in water injection supply to the sole injector in the pool, well 1-08Ai, located in the Southern Lobe, may precipitate a need to shut-in production for the entire pool, based on failure to meet 20 AAC 25.240 (b)(1). The recent interruption was temporary, and the commission rapidly gave permission to continue production; however, future Western and Central Lobes' production could be adversely impacted by being tied to the Southern Lobe's rule. BPXA expects definition of unique depletion plans for the Western and Central Lobes to be possible after adequate performance data have been collected, and estimates that will take up to two years from establishing regular production. While the optimal depletion plan for the Western Lobe is not yet defined, BPXA can project that it is unlikely that waterflood will be the optimal depletion plan for this lobe. The Central Lobe, which is a black oil accumulation, is also expected to require a unique depletion plan. A comprehensive solution that allows for all of the Put River Sandstone lobes' production at this time involves additional segregation. The Northern Lobe should remain separated from the PROP, as it is in communication with the Prudhoe Oil Pool. The Southern Lobe should be separated and comprise the defined portion of the PROP. The Western and Central Lobes should become independent and undefined oil pools. The type log for the PROP, designated in CO 559, still suffices for this request, as it represents the time interval deposition for the Southern Lobe. Mr. Jeremy Price, Chair November 15, 2019 Request Proposed Amendment to PROP Pool Rules Note: Use of [ J's means delete existing order word(s). Use of underline denotes proposed new text. UMIAT MERIDIAN TI 1N RI 4E Sections: [3, 4, 9, 10, 11(SW/4), 14(W/2), 15, 16, 21, 22, 23(W/2 and SE/4)] 22 SE/4 , 23(S/2), 24(S/2), 25, 26, 27, 28, 33, 34, 35, 36 TIIN R15E Sections: 29(S/2), [30(S/21, 30(W/2 and SEA , 31, 32 TION R14E Sections: 1, 2, 3, 10 E/2 , 11, 12, 13, 14 T10N R15E Sections: 4(W/2), 5, 6, 7, 8, 9 W/2 , 16 W/4 , 17, 18 Rule 5 Reservoir Pressure Monitoring (b) A minimum of one bottom -hole pressure survey [per producing lobe] within the Put River Oil Pool [Sandstone] shall be run annually. The surveys required by part (a) of this rule may be used to fulfill the minimum requirements. Rule 6 Gas -Oil Ratio Exemption [(b) For production within the Southern Lobe of the Put River Sandstone, except as allowed under (c) of this rule, the exemption from the gas -oil -ration limit is not effective until waterflood has been initiated and the Commission by administrative approval has authorized application of the exemption.] [c] (b,) Notwithstanding (a) [and b] of this rule, pre -production of injectors for up to three weeks is allowed without regard to 20 AAC 25.240(a) and (b). Rule 7 Approved Depletion Plan (a) Waterflood operations are approved within the [Western and Southern Lobes of the] Put River Oil Pool. Mr. Jeremy Price, Chair November 15, 2019 Any questions can be directed to Bill Bredar at 564-5348 or through email to William.Bredar@bp.com. Respectfully, p� Katrina Garner Area Manager Alaska Reservoir Development Team BP Exploration (Alaska) Inc. cc: Mr. Jon Schultz, ConocoPhillips Alaska, Inc. Mr. Jeff Farr, ExxonMobil Alaska, Production Inc. Mr. David White, Chevron USA Mr. Dave Roby, Alaska Oil and Gas Conservation Commission 6 THE STATE 01ALAS A GOVERNOR MIKE DUNLEAVY February 12, 2019 Ms. Katrina Gamer Fieldwide Manager, Prudhoe Bay Unit BP Exploration (Alaska) Inc. P.O. Box 196612 Anchorage, AK 99519-6612 Alaska. Oil and Cas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 vmv. a ogcc.alaska.gov Re: Prudhoe Oil Pool and Put River Oil Pool Downhole Commingling Application Application for Reconsideration Docket Number CO 18-016; Conservation Orders No. 341G and 559A Dear Ms. Garner: The Alaska Oil and Gas Conservation Commission (AOGCC) has received BP Exploration (Alaska) Inc.'s (BPXA) Application for Reconsideration dated January 17, 2019, of Rule 18(b) of Conservation Order (CO) No. 341G (CO 341G) and of Rule 12(b) of CO No. 559A (CO 559A) that require mechanical isolation of the Prudhoe Oil Pool (POP) and the Put River Oil Pool (PROP) to prevent crossflow if a well was shut in for more than 3 months. BPXA requests that the requirement for mechanical isolation be extended to 6 months. BPXA's request is hereby granted. In its initial application for downhole commingling between the POP and PROP oil pools BPXA stated that "[c]rossflow of significant volume between pools in commingled wells that experience extended shut in periods could be prevented through mechanical isolation of the pools." However, no definition of "extended shut in periods" was included in the application. During the August 8, 2018, hearing on the commingling application BPXA indicated that if a commingled well was anticipated to be shut in for more than 6 months it would mechanically isolate the POP and PROP. However, no justification for the 6 month time frame was provided. CO 341G and CO 559A establishing a 3 month shut in period as the trigger for the need to mechanically isolate the POP and PROP. In its application for reconsideration BPXA provided justification for why a 6 month shut in is more appropriate trigger than a 3 month one for determining when a commingled well would need to be mechanically isolated. The justifications include: - The rate of crossflow between the POP and PROP would be low due to the low permeability found in the PROP. - Resumption of production from a commingled well would recover volumes that crossflowed between the pools. A 3 month schedule may not always be feasible due to logistical concerns inherent in working on the North Slope including: o If a commingled well is shut in due to a facility related issue it may be difficult to estimate how long that shut in may last. o During summer months access to wells may be restricted by ongoing facility shutdowns and/or drill site maintenance and prevent certain types of interventions from being able to be performed. o Ongoing wellwork operations may make it difficult to plan, schedule, and execute the work necessary to mechanically isolate the pools within a 3 month timeframe. BPXA's intention would be to isolate the pools as quickly as feasible once it determines it is likely a commingled well will be shut in for more than 6 months. Based on the additional justification provided by BPXA, changing the timeframe that would require mechanical isolation of the POP and PROP wells in shut in commingled producers from 3 to 6 months is appropriate. CO 341 G and CO 559A will be revised to reflect this change. Sincerely, Hollis S. French Chair, Commissioner a M January 17, 2019 Via Electronic Delivery and FEDEX Hollis French Commission Chair Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 N'• BP Exploration (Alaska) Inc. 900 E. Benson Boulevard Anchorage, AK 99506 P.O. Box 196612 Anchorage, AK 99519-6612 Re: Docket Number: CO 18-016 - Application for Reconsideration Conservation Orders 341G and 559A Prudhoe Oil Pool (POP), Put River Oil Pool (PROP), Prudhoe Bay Unit Dear Chair French: JAN 2 2 2019 AOGCC BP Exploration (Alaska) Inc. (BPXA), as operator of the Prudhoe Bay Unit (PBU), respectfully submits this Application for Reconsideration in the above -referenced matter. For the reasons discussed in this application, we respectfully submit that the Alaska Oil and Gas Conservation Commission's (AOGCC) orders issued December 13, 2018 should be amended. Chronology • On June 20, 2018, BPXA requested that the AOGCC amend CO 341F and CO 559 to allow pool -wide downhole commingling between the PROP and the POP. • On August 6, 2018, the AOGCC held a public hearing where BPXA testified to allow for commingling of the PROP with the POP. • On December 13, 2018, the commission issued CO 341G and CO 559A, approving BPXA's application for commingling. • On December 17, 2018 BPXA requested an extension of the time to file for reconsideration on the recently issued conservation orders. • On December 18, 2018 the AOGCC granted an extension of the deadline to file for reconsideration on the subject conservation orders until January 22, 2019. Application for Reconsideration Docket Number: CO 18-016 Conservation Orders 341G and 559A January 21, 2019 Page 3 wellwork; that is, the time between the generation and prioritization of the well work request, and the execution of that work, could be longer than 3 months. Although BPXA is requesting that the text of the orders be amended to reference six months before mechanical isolation is required, it would nevertheless be BPXA's intent to execute the mechanical isolation as soon as reasonably possible if a commingled PROP and POP well is expected to be shut in for more than six months. If you have any questions on this matter, please contact Bill Bredar at (907) 564-5348 or william.bredar@bp.com. Sincerely, Katrina Garner Fieldwide Manager, Prudhoe Bay Unit BP Exploration (Alaska) Inc. Cc: Eric Reinbold, ConocoPhillips Alaska, Inc Jeff Farr, ExxonMobil Alaska, Production Inc Dave White, Chevron USA Dave Roby, AOGCC 5 THE STATE GOVERNOR MIKE DUNLEAVY December 18, 2018 Katrina Garner West Area Manager/Reservoir Management, Prudhoe Bay Alaska Reservoir Development BP Exploration (Alaska) Inc. PO Box 196612 Anchorage, AK 99519-6612 RE: Docket No. CO -18-016 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 w .aogcc.alaska.gov Prudhoe Bay Unit Conservation Orders 341 G and 559A — Request to extend deadline for applications for reconsideration until January 22, 2019 Dear Ms. Gamer: By letter dated December 17, 2018, BP Exploration (Alaska) Inc. (BPXA) requested an extension to the time allowed to file for reconsideration on the recently issued conservation orders 341 G and 559A, which authorized downhole commingling of production between the Prudhoe and Put River Oil Pools, until January 22, 2019. The stated reason for requesting this extension, employee absences during the holiday season, is good cause to grant an extension to the time allowed to file for reconsideration. Therefore, BPXA's request to extend the deadline to file for reconsideration on the subject conservation orders to January 22, 2019, is hereby granted. If you have any questions on this matter, please contact Dave Roby at 907-793-1232 or dave.roby(aa?a laska. eov. Sincerely, Hollis S. French Commissioner, Chair El ZE December 17, 2018 Hollis French, Chair Alaska Oil and Gas Conservation Commission 333 West Ph Ave, Suite 100 Anchorage, AK 99501 BP Exploration (Alaska) Inc. 900 East Benson Boulevard P O Box 196612 Anchorage, Alaska 99519-6612 (907)561-5111 f)-1, ._1 'i RE: Prudhoe Bay Unit Conservation Orders 341 G and 559A—Request to Extend Deadline for Applications for Reconsideration until January 22, 2019 Dear Chair French: BP Exploration (Alaska), Inc, as operator of the Prudhoe Bay Unit, received the above - referenced orders affecting these two pools on December 13, 2018. BP anticipates filing an application for reconsideration of both orders. Our applications for reconsideration will not be complete, due to holiday absences of the staff preparing them, until approximately January 22, 2019. We respectfully submit that the absence of our technical staff constitutes good cause for granting this request for extending the deadline for filing applications for reconsideration until January 22, 2019. Thank you for considering this request. If you have any questions regarding the reports please contact Bill Bredar at 564-5348 or through email at William.bredar@bD.com. Respectfully, yyam�/J Katrina Garner West Area Manager/Reservoir Management, Prudhoe Bay Unit Alaska Reservoir Development, BPXA Cc: Eric Reinbold, ConocoPhillips Alaska, Inc Jeff Farr, ExxonMobil Alaska, Production Inc Dave White, Chevron USA Dave Roby, AOGCC 3 AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 ALASKA OIL AND GAS CONSERVATION COMMISSION Before Commissioners: Hollis French, Chair Cathy Foerster Daniel T. Seamount In the Matter of the Application of ) BP Exploration Alaska, Inc., for ) Administrative Amendments to CO 341F and ) 559 to Allow for the Poolwide, Downhole ) Commingling of the Prudhoe Oil Pool and the ) Putt River Oil Pool. Docket No.: CO 18-016 ALASKA OIL and GAS CONSERVATION COMMISSION Anchorage, Alaska August 6, 2018 10:00 o'clock a.m. PUBLIC HEARING BEFORE: Hollis French Cathy Foerster Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Page 2 1 TABLE OF CONTENTS 2 Opening remarks by Chairman Hollis 03 3 Remarks by Ms. Ohms 06 4 Remarks by Ms. Stechauner 08 5 Remarks by Mr. Emerson 09 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 3 1 P R O C E E D I N G S 2 (On record - 10:00 a.m.) 3 CHAIRMAN FRENCH: Let's go ahead and get 4 started. I'll call the hearing to order. It is August 5 6, 2018, it's 10:00 o'clock in the morning. We're at 6 333 West Seventh Avenue, the location of the Alaska Oil 7 and Gas Conservation Commission. To my right is 8 Commissioner Cathy Foerster, I'm Hollis French, the 9 Chair of the Commission. Dan Seamount will not be here 10 today. 11 This hearing is in regard to Docket Number CO 12 18-016, the application of BP Exploration, Incorporated 13 for amendments to conservation order number 341F which 14 governs the Prudhoe Oil Pool and conservation order 15 number 559 which governs the Putt River Oil Pool. BP 16 Exploration Alaska, Incorporated by letter dated June 17 20, 2018, requests AOGCC amend CO 341F and CO 599 to 18 allow poolwide, downhole commingling between the PROP 19 and the POP. 20 Computer Matrix will be recording the 21 proceedings. You can get a copy of the transcript from 22 Computer Matrix Reporting. 23 BP is here and prepared to testify. Any other 24 parties not signed up planning to testify? 25 (No comments) Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 4 1 CHAIRMAN FRENCH: I don't see any hands. The 2 Commissioners will ask questions during the testimony, 3 we may also take a recess to consult with staff to 4 determine whether additional information or clarifying 5 questions are necessary. If a member of the audience 6 has a question he or she feels should be asked, please 7 submit that question in writing to Jodie Colombie who 8 has her hand up now at the back of the room. The 9 person should provide the question to the Commission -- 10 Jodie will provide the question to the Commissioners 11 and if we feel that asking the question will assist us 12 in making our determinations, we will ask it. For 13 those testifying keep in mind you must speak into the 14 microphone so that those in the audience and the court 15 reporter can hear your testimony. Please remember to 16 reference your slides so that someone reading the 17 public record can follow along. For example refer to 18 slides by their numbers if numbered or by their titles 19 if not numbered. 20 Just a few general ground rules on what's 21 allowed relative to testimony. Of course we want it to 22 be relevant to the purposes of the hearing I outlined a 23 few minutes ago and to the statutory authority of this 24 agency. Anyone desiring to testify may do so, but if 25 the testimony drifts off subject we will limit the Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 5 1 testimony. Additionally testimony may not make -- take 2 the form of cross examination. As I said before the 3 Commissioners will be asking the questions. And 4 finally and I -- I've yet to see this happen, testimony 5 that is disrespectful or inappropriate will not be 6 allowed. 7 Commissioner Foerster, anything you want to add 8 before we get started? 9 COMMISSIONER FOERSTER: I'm sorry that you 10 haven't had that opportunity yet, I hope that you do 11 soon. 12 CHAIRMAN FRENCH: Well, today does not look 13 like the day, but you never know. So with that let's 14 turn to our guests, BP. Welcome, it's nice to have you 15 here. I see Danielle Ohms, Graham Emerson and Gerda 16 Stechauner are here. Go ahead and identify yourselves 17 if you would and whoever wants to lead off please do 18 so. 19 COMMISSIONER FOERSTER: You going to swear them 20 in? 21 CHAIRMAN FRENCH: Oh, of course. Raise your 22 right hands. 23 (Oath administered) 24 IN UNISON: I do. 25 CHAIRMAN FRENCH: Head nods and I dos. Okay. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 6 1 Now proceed. Thank you. 2 If you want to be identified as an expert in 3 your field please do so -- indicate so and then we'll 4 just take a minute to have the colloquy we normally do 5 in that -- in that setting. Very good. 6 DANIELLE OHMS 7 previously sworn, called as a witness on behalf of BP 8 Exploration Alaska, Inc., stated as follows on: 9 DIRECT EXAMINATION 10 MS. OHMS: I can start off for us. I'm 11 Danielle Ohms. 12 CHAIRMAN FRENCH: Good morning, Danielle. 13 MS. OHMS: Good morning, Commissioner French 14 and Commissioner Foerster. And my name is Danielle 15 Ohms, I am employed with BP Alaska, working at BP's 16 Anchorage office. I have a bachelor of science in 17 petroleum engineering from the University at Texas at 18 Austin. I also have a master's degree in environmental 19 engineering from the University of Alaska Anchorage. 20 I've worked in the oil and gas industry in Alaska for 21 30 years and I previously have been qualified as an 22 expert witness. So I can elaborate further if needed, 23 but hopefully that will suffice. 24 CHAIRMAN FRENCH: You're seeking to be an 25 expert in the area of petroleum..... Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 7 1 MS. OHMS: Petroleum engineering. 2 CHAIRMAN FRENCH: .....engineering. I think 3 Commissioner Foerster has probably agreed to this a 4 dozen times in her time on the bench. Do you want 5 to.... 6 COMMISSIONER FOERSTER: I want -- I have one 7 question. Are you able to form your hand in 8 (indiscernible)..... 9 MS. OHMS: There you go. 10 COMMISSIONER FOERSTER: Then you're fine by me. 11 CHAIRMAN FRENCH: Let the record reflect -- no, 12 actually we're not going to let the record reflect 13 that. I will defer to Commissioner Foerster's wisdom 14 and agree that you shall be and the Commission has 15 decided you shall be seen as an expert in..... 16 COMMISSIONER FOERSTER: Ms. Ohms has testified 17 before us previously..... 18 MS. OHMS: Yeah. 19 CHAIRMAN FRENCH: I understand. 20 COMMISSIONER FOERSTER: .....and she's well 21 qualified. 22 CHAIRMAN FRENCH: Please proceed. 23 GERDA STECHAUNER 24 previously sworn, called as a witness on behalf of BP 25 Exploration Alaska, Inc., stated as follows on: Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 1 DIRECT EXAMINATION 2 MS. STECHAUNER: Good morning. My name is 3 Gerda Stechauner. I will be asking to be qualified as 4 an expert witness in reservoir engineering. In terms 5 of educational background I have a bachelor of science 6 degree in mechanical engineering from the Massachusetts 7 Institute of Technology, MIT. I also have a Ph.D. in 8 the field of experimental flow dynamics from Cambridge 9 University I graduated there in 2005. 10 CHAIRMAN FRENCH: You're a little soft spoken. 11 If you can lean it a little more closely. 12 MS. STECHAUNER: Okay. Is this better? 13 CHAIRMAN FRENCH: Yeah. And your Ph.D. was in? 14 MS. STECHAUNER: Experimental fluid dynamics 15 from Cambridge University in 2004. 16 CHAIRMAN FRENCH: Okay. 17 MS. STECHAUNER: In terms of my work experience 18 I have been working at BP Alaska for approximately 10 19 years, working in a variety of roles, RE roles in -- 20 across Prudhoe Bay. Prior to that I have three years 21 of experience also with BP in the UK. 22 CHAIRMAN FRENCH: And were those years of 23 experience in the area of reservoir engineering? 24 MS. STECHAUNER: Yes, that's correct. 25 CHAIRMAN FRENCH: I don't have any further Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8,'6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 9 1 questions about your qualifications, maybe Commissioner 2 Foerster does. 3 COMMISSIONER FOERSTER: So how did you jump 4 from a bachelor's in mechanical to a Ph.D. in very 5 specific reservoir engineering? 6 MS. STECHAUNER: My Ph.D. was not in reservoir 7 engineering, it was in experimental fluid dynamics 8 actually in the..... 9 CHAIRMAN FRENCH: To me that's res..... 10 MS. STECHAUNER: Well, in the department of 11 zoology so it was on insect flight. 12 CHAIRMAN FRENCH: It was on what? 13 MS. STECHAUNER: Insect flight, aerodynamics. 14 COMMISSIONER FOERSTER: Insect flight. That is 15 awesome, but irrelevant. I have no problem recognizing 16 you as an expert in reservoir engineering. 17 CHAIRMAN FRENCH: Good morning. 18 GRAHAM EMERSON 19 previously sworn, called as a witness on behalf of BP 20 Exploration Alaska, Inc., stated as follows on: 21 DIRECT EXAMINATION 22 MR. EMERSON: Good morning. So my name's 23 Graham Emerson and I would seek to be recognized as an 24 expert in geoscience. So I have a bachelor of science 25 degree in geology from the University of Edinburgh in Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 10 1 the United Kingdom and I also have a master's of 2 science degree in petroleum geoscience from the 3 University of Aberdeen in the United Kingdom. I have 4 worked with BP for 12 years, I've worked in the North 5 Sea, I've worked in Azerbaijan, Angola and I spent the 6 last four and a half years working here in Alaska. For 7 all those 12 years I was practicing geosciences with 8 BP. 9 CHAIRMAN FRENCH: Excellent. That satisfies my 10 questions. Commissioner Foerster. 11 COMMISSIONER FOERSTER: That's fine by me. 12 CHAIRMAN FRENCH: You're -- you'll be an expert 13 in you said? 14 MR. EMERSON: Geoscience. 15 CHAIRMAN FRENCH: Geoscience. Very good. 16 Thank you. And whoever all wants to lead off now can 17 please proceed. 18 MS. OHMS: Good morning. I'd like to provide 19 an overview of BP's planned testimony today. BPXA, in 20 pursuit of greater ultimate recovery from the Putt 21 River Oil Pool applied for poolwide ability to co - 22 mingle with the Prudhoe Oil Pool on May 21st, 2018. 23 This potential activity was referenced in the October 24 6, 2005 AOGCC hearing addressing BPXA's request to 25 amend conservation order 341D for the Prudhoe Oil Pool Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 11 1 and area injection order 4C to include the Putt River 2 sandstone. In that hearing the Putt River Oil Pool 3 encompassing the southern, central and western lobes 4 was established. Use of Ivishak production to gas lift 5 Putt River fluids was mentioned by BP as a development 6 scenario in testimony at that hearing. Transcript 7 pages 26 and 27 and I have that too. It was observed 8 by the Commission that the opportunity to execute this 9 scenario could be afforded with some paperwork and BPXA 10 is here today to move forward with that administrative 11 process. 12 BPXA is prepared to demonstrate that 13 commingling of these pools gives a better chance of 14 optimizing production from the Putt River and that 15 production from the separate pools can be appropriately 16 allocated. BPXA would like authorization to move 17 forward with the commingling scenario as the Putt River 18 needs help to produce and commingling with the Prudhoe 19 Oil Pool is potentially a very effective method. We 20 will demonstrate that commingling will not result in 21 significant transfer of POP, Prudhoe Oil Pool, we call 22 it POP for shortening, liquids to the Putt. As you see 23 -- as you will see with this BP testimony there is 24 little downside to crossflow between Ivishak and Putt 25 and mitigations exist should shut-in periods be Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 12 1 lengthy. And if the Commission grants poolwide 2 commingling there remains assurance via the 10.403 3 process that given cause Commission rejection can occur 4 to any proposed commingling activity on a well by well 5 basis. 6 With current marginals at flowstation three, 7 timely production of the condensate in the PROP or the 8 Prudhoe -- the Putt River Oil Pool western lobe is our 9 first goal here today. This could be a viable project 10 and it looks competitive. Benefits of commingling 11 brings the following: mitigation of paraffin and 12 hydrate formation due to increased heat from the 13 Ivishak stream and increased production from the Putt 14 over the stand-alone Putt production. 15 Gerda is prepared next to begin with a review 16 of the two slides that we have here which were prefiled 17 and then we will provide further details regarding 18 crossflow and answer your questions. 19 Graham is the Putt River project lead and 20 geologist and is available should the Commission have 21 additional questions. 22 I'm going to pass it to Gerda now. 23 MS. STECHAUNER: I'll first briefly review 24 location and geology of the Putt River formation and 25 the reservoir and fluid properties of each lobe, but Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 13 1 I'll spend the majority of the time today discussing 2 aspects of commingling production. 3 The Putt River sandstone is located within the 4 Prudhoe Bay Unit and is illustrated on slide one which 5 is entitled Putt River Sandstone Distribution and 6 Reservoir Properties. The map shows the gross sand 7 thickness of the Putt River. 8 CHAIRMAN FRENCH: And just a quick question for 9 me. Is that more or less the extent of the Putt River 10 formation that I'm seeing on the slide, it looks like 11 it extends a tiny bit into the north there, but that 12 looks like the very edge of it perhaps? 13 MS. STECHAUNER: That is correct. 14 CHAIRMAN FRENCH: Okay. So that's the universe 15 of Putt River right there? 16 MR. EMERSON: Correct. 17 CHAIRMAN FRENCH: Got it. Okay. Thanks. And 18 what is the Putt River producing now and how much is it 19 producing? 20 MS. STECHAUNER: The Putt River is producing 21 from the southern lobe and we also some limited 22 production from the northern lobe which is part of the 23 Prudhoe Oil Pool. I cannot speak to the exact rate the 24 Putt is producing at the moment. 25 CHAIRMAN FRENCH: Just a rough, I mean, any Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 14 1 rough amount just to give me a ball park, a thousand 2 barrels a day, 10,000 barrels a day? 3 MS. STECHAUNER: It's probably less than a 4 thousand. 5 CHAIRMAN FRENCH: Okay. Okay. And since this 6 is less than a thousand, I -- it just gives me a -- 7 sort of a ball park view. We can come back to it 8 later, it's not important, I just want to get a -- 9 again just a very ball park idea. 10 Thank you. 11 COMMISSIONER FOERSTER: And what's the northern 12 boundary, why does your map stop there? 13 MR. EMERSON: Examine that -- this map 14 actually..... 15 CHAIRMAN FRENCH: Identify yourself. 16 MR. EMERSON: Oh, sorry. This is Graham 17 Emerson. This map was actually generated in 2004 and 18 is the same map we're using for the -- from the 2005 19 hearing so it was actually created prior to listing -- 20 taking on the Putt River. I believe the Putt River 21 lobe terminates pretty much as you see it on the map 22 there and there's no -- nothing relevant further to the 23 north. 24 COMMISSIONER FOERSTER: My question was what is 25 that boundary? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 15 1 MR. EMERSON: The horizontal (indiscernible) on 2 the top? 3 COMMISSIONER FOERSTER: What's the line, what 4 does that demark? 5 MR. EMERSON: Yeah, I'm not sure. I'd have to 6 get back to you on exactly what that is. 7 COMMISSIONER FOERSTER: Okay. 8 MR. EMERSON: Yeah, okay. 9 MS. STECHAUNER: I'll begin again, Gerda 10 Stechauner. 11 CHAIRMAN FRENCH: Excellent. 12 MS. STECHAUNER: So there are four lobes of the 13 Putt, called the northern, western, central and 14 southern and I'll point to those now on the map. 15 Northern, western, central and southern. The northern 16 and western accumulations are gas with associated 17 condensate while the southern and central are black 18 oil. The reservoir fluid PPT properties from appraisal 19 activity in 2005 are shown in the table on this slide 20 which is -- and that table is also in the conservation 21 order 559. 22 I'm going to move on to the next slide which is 23 entitled Putt River Sandstone Stratigraphy. This slide 24 depicts how the Putt River lobe lies stratigraphically 25 above the lower cretaceous unconformity known as the Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 16 1 LCU depicted in the red line. And..... 2 CHAIRMAN FRENCH: It all lies -- it all lies 3 above that red line? 4 MS. STECHAUNER: Correct. 5 CHAIRMAN FRENCH: Got it. Okay. Very good. 6 Thank you. 7 MS. STECHAUNER: And it all lies below the 8 highly radioactive zone known as the HRZ, the blue 9 line. And I'll again in this cross section point out 10 the northern lobe, central lobe, the western lobe and 11 the southern lobe. Discontinuous sandstone deposition 12 has resulted in compartmentalization between the four 13 lobes as was noted in the conservation order 559. 14 I'm now going to talk about the reservoir and 15 fluid properties of the western, central and southern 16 lobes as they related to the commingling request. For 17 this purpose I'm going to again reference slide one 18 which is entitled Putt River Sandstone Distribution and 19 Reservoir Properties. Please note that I will not 20 reference the northern lobe in the remainder of this 21 presentation as that lobe is considered part of the 22 Prudhoe Oil Pool and is therefore not the focus of 23 today's discussion. 24 Based on appraisal information from the Putt 25 River Oil Pool as presented in a previous hearing in Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 17 1 2005 the western lobe contains gas and associated 2 condensate. That pool was appraised with a production 3 test in well 1541B in 2005. The flow rates from the 4 appraisal well test were approximately 1.8 million 5 standard cubic feet per day of gas and 73 barrels of 6 condensate per day. During the well test there was 7 possibly paraffin and hydrate build up likely due to 8 low fluid rate and low temperatures in the wellbore. 9 BP is requesting to co -mingle production from the Putt 10 River Oil Pool with the Ivishak and the Prudhoe Oil 11 Pool to provide extra fluids which bring more heat and 12 velocity and thereby mitigate or eliminate these flow 13 assurance issues. It is BP's view that the western 14 lobe resource cannot be effectively developed without 15 commingling. There are several wellbores in the 16 western lobe that present an opportunity for 17 commingling with the Ivishak to produce the Putt 18 resource. The central lobe which is a black oil 19 accumulation has limited wellbore opportunities for 20 commingling, but there may be potential to pursue in 21 the future. The southern lobe which already has two 22 dedicated producers and one dedicated injector in the 23 Putt River is not the focus of commingling at this 24 time. 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 16 yeah. 17 MS. STECHAUNER: Page 18 1 CHAIRMAN FRENCH: So just to recap it sounds 2 like western and central, yes, northern and southern, 3 no. 20 4 MS. STECHAUNER: So the northern lobe is not 5 part of the Putt River Oil Pool and it..... 6 CHAIRMAN FRENCH: Definitionally it's not at 7 stake here? go on this request? 8 MS. STECHAUNER: Correct. 9 CHAIRMAN FRENCH: Right. 10 COMMISSIONER FOERSTER: Isn't it co -ming -- 11 it's already in (indiscernible - simultaneous 12 speech)..... 13 CHAIRMAN FRENCH: It's already (indiscernible - 14 simultaneous speech) yep, yep, yep. 15 Thank you, Commissioner Foerster and Gerda, 16 yeah. 17 MS. STECHAUNER: Does that answer your 18 question? 19 CHAIRMAN FRENCH: We're all good. 20 MS. STECHAUNER: Okay. 21 COMMISSIONER FOERSTER: Could you -- were you 22 going to say what are the reserves at stake in go or no 23 go on this request? 24 MS. STECHAUNER: Yes. Let me refer to the 25 conservation order 559. In the western lobe the Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOOCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 19 1 estimated gas in place in billions of cubic feet is 2 between 69.6 and 104.4. In the central it's a black 3 oil accumulation, estimated oil in place is 1.1 to 2.7 4 billion barrels. 5 COMMISSIONER FOERSTER: You refer to the 6 western lobe reserves as gas. Since you're not 7 currently selling any gas explain for the record why 8 that production is important? 9 MS. STECHAUNER: So that gas has associated 10 condensate and when that gas is produced to the surface 11 those condensate liquids drop out..... 12 COMMISSIONER FOERSTER: Okay. 13 MS. STECHAUNER: .....and that would be what is 14 for sale or sold. 15 CHAIRMAN FRENCH: Good. 16 COMMISSIONER FOERSTER: Thank you. 17 MS. STECHAUNER: So based on the reservoir 18 fluid properties in the Putt River Oil Pool and the 19 Prudhoe Oil Pool, there are no known fluid 20 compatibility issues for commingling this production. 21 Furthermore no formation damage is anticipated if Putt 22 River Oil Pool fluids enter the Prudhoe Oil Pool or 23 visa versa. While a co -mingled well is flowing to the 24 surface it is highly unlikely that crossflow would 25 occur between the pools. But when a co -mingled well is Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 20 1 shut-in, crossflow may occur and will be dictated by 2 the pressure build up behavior within each pool. 3 CHAIRMAN FRENCH: And I'm guessing you're about 4 to address that. 5 COMMISSIONER FOERSTER: Well, before you gloss 6 over the it's unlikely that crossflow will occur, will 7 you give us the technical basis for that statement? 8 MS. STECHAUNER: It's unlikely that crossflow 9 will occur while a well is flowing to surface because 10 the bottom hole flowing pressure in the wellbore is low 11 -- lower than the reservoir pressure due to the pools. 12 CHAIRMAN FRENCH: It's going to flow to 13 surface? 14 MS. STECHAUNER: Correct. 15 CHAIRMAN FRENCH: Right. 16 COMMISSIONER FOERSTER: And then in -- during 17 shut-in how are you going to -- that's what you're 18 going to go to next? 19 MS. STECHAUNER: Yes. So I'd like to provide 20 more detail on what would be anticipated in commingling 21 the Putt River western lobe with the Ivishak in the 22 Prudhoe Oil Pool. The current reservoir pressure of 23 the Putt River in the western lobe is approximately 24 4,200 psi at the 8,100 foot subsea datum depth, while 25 the Prudhoe Oil Pool is approximately 3,300 psi at the Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 21 1 8,800 subsea datum. Under stabilized conditions which 2 would occur some amount of time after shut-in, 3 crossflow would likely be from the higher pressure Putt 4 River Oil Pool to the lower pressure Prudhoe Oil Pool. 5 After sustained offtake from the western lobe of the 6 Putt River Oil Pool the average reservoir pressure 7 would fall and it could fall below that of the Prudhoe 8 Oil Pool at some point and at that time crossflow from 9 the Prudhoe Oil Pool into the Putt River Oil Pool could 10 occur during shut-in periods under stabilized 11 conditions. 12 So in summarizing these conclusions on the 13 likelihood and the direction of crossflow between the 14 pools it is (indiscernible) that crossflow will occur 15 during shut-in periods and we recognize that crossflow 16 may occur from the Prudhoe Oil Pool to the Putt River 17 Oil Pool or vise versa. Regardless of the direction of 18 crossflow, the volume of crossflow is anticipated to be 19 small due to the permeability of the Putt River lobe -- 20 Putt River Oil Pool. There is indication from 21 appraisal well test in 1541B which is near the central 22 -- center of the western lobe a fairly low 23 permeability. There is also one core measurement on 24 the distal part of the western lobe in well 1514A with 25 sidewall core indicating permeability of approximately Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 22 1 4 millidarcies. While we expect positive production 2 benefits for commingling if deemed necessary we can 3 stop crossflow by setting a downhole plug to isolate 4 one pool from another during shut-in periods as stated 5 in the application. 6 COMMISSIONER FOERSTER: So what is going to 7 trigger you that you need to do that? 8 MS. STECHAUNER: Can you say that again, I 9 didn't get it. 10 COMMISSIONER FOERSTER: Well, you say that you 11 have the ability to stop crossflow if you need to, how 12 are you going to know that you need to? 13 MS. OHMS: That depends. I mean, we would say 14 -- if I can jump in, this is Danielle Ohms, unless you 15 wanted -- we wouldn't -- we're saying we would allow it 16 for a certain amount of time. We were willing to say 17 that after six months if we anticipate the wells going 18 to sit-in -- shut-in for six months we're could be 19 planning as soon as we're aware of that to run a plug 20 in the well. 21 COMMISSIONER FOERSTER: Okay. So you're going 22 to just say -- you're going to assume that crossflow is 23 occurring and you'll allow it for short periods of 24 time, but as longer time goes on you dont want it and 25 you'll stop it? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 23 1 MS. OHMS: Yes, we have..... 2 COMMISSIONER FOERSTER: Okay. 3 MS. OHMS: .....that ability. In the wells 4 that we're looking at so far we have the ability to be 5 able to set a plug between the two zones downhole. 6 CHAIRMAN FRENCH: Just another question or two 7 on that point. Are you injecting anything into the 8 Putt Oil Pool, will there be anything to maintain a 9 reservoir pressure there? 10 MS. STECHAUNER: This is Gerda Stechauner 11 speaking again. We are not injecting anything into the 12 western lobe nor do we plan to at this time. we do 13 have injection in the southern lobe. 14 CHAIRMAN FRENCH: But as you produce the 15 western lobe you're anticipating the reservoir pressure 16 will come down a little bit, thus alleviating crossflow 17 after some period of time? 18 COMMISSIONER FOERSTER: What they're saying is 19 that they're -- right now because Putt is higher 20 pressure, crossflow will be out of the Putt, but if the 21 Putt drops to some point where it's lower than the..... 22 CHAIRMAN FRENCH: I understand. I understand. 23 Yep, yep, yep. As the pressures equalize there's no 24 crossflow? 25 MS. STECHAUNER: That might occur. There is Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 24 1 likely always going to be some reservoir pressure 2 difference between the lobes depending on the depletion 3 strategy. 4 CHAIRMAN FRENCH: It's unlikely they'll be 5 exactly the same? 6 MS. STECHAUNER: Correct. 7 CHAIRMAN FRENCH: Right. Okay. Okay. I think 8 I understand. Thank you. 9 MS. STECHAUNER: So even though we expect some 10 crossflow is likely to occur, we believe that the 11 crossflow of fluids will be produced back when the well 12 is turned back on production. 13 I would also like to add that the application 14 BP has outlined -- has outlined the plan to conduct 15 reservoir surveillance and assure that proper 16 production allocation between the pools will be 17 achieved. The allocation of production will be based 18 upon oil geochemical analyses and differential well 19 tests or production logs as stated in the rule 12 in 20 the proposed amendment to the conservation order 559. 21 Specifically geochemical sampling would occur monthly 22 for the first six months after commingling starts. A 23 production log or a differential well test would be 24 obtained also in the first six months for comparison to 25 the geochemical basis for allocation. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 25 1 CHAIRMAN FRENCH: Can you remind me what the 2 relative API gravities are of the oil you expect to get 3 out of the co -mingled flow on the western lobe? 4 MS. STECHAUNER: Yes. So on the slide you can 5 see the API gravity of the western lobe is 57. Are you 6 asking also about the API gravity of the Ivishak that 7 we'll be coming up with it? 8 CHAIRMAN FRENCH: Sure. Let's get it on the 9 record. I can see it now on the slide, thank you, but 10 let's just go ahead and have you articulate it. 11 MS. STECHAUNER: All right. So in the Ivishak 12 which is a black oil reservoir, the black oil API can 13 be around 28 degrees, but there's also a lot of gas 14 flowing with the Ivishak black oil that increases the 15 API gravity of those liquids. So typically see between 16 30 to 40 API gravity in the Ivishak production wells in 17 this area. 18 CHAIRMAN FRENCH: Versus high 50s for the -- 19 for the POP? 20 MS. STECHAUNER: For the condensate..... 21 CHAIRMAN FRENCH: Got it. 22 MS. STECHAUNER: .....right. 23 CHAIRMAN FRENCH: Yep. Very helpful. Thank 24 you. 25 MS. STECHAUNER: Okay. In conclusion BP Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 261 1 requests approval for wellbore commingling of 2 production from the Putt River Oil Pool and the Prudhoe 3 Oil Pool. Because of the number of opportunities we 4 request approval of an amendment to the Putt River Oil 5 Pool conservation order 559 authorizing the poolwide 6 commingling with the Prudhoe Oil Pool. BPXA 7 respectfully submits that we will be able to 8 appropriately allocate production between the two pools 9 and that this activity will not cause waste and will 10 enable greater ultimate recovery of resources. 11 This concludes our formal testimony at this 12 time. Thank you. 13 CHAIRMAN FRENCH: Can you go to slide two, 14 please, just for a second. Brilliant. Thanks. And I 15 count one, two, three, four, five, six, seven, eight, 16 looks like about nine wells perhaps that are involved? 17 MS. STECHAUNER: We have done preliminary 18 screening and we have around seven potential candidates 19 identified now that would be possible candidates for 20 commingling in the western lobe. 21 CHAIRMAN FRENCH: Okay. And that would just 22 involve some perforations in the -- in the Putt pool 23 zone? 24 MS. STECHAUNER: That is correct. It would be 25 fairly standard well work to perforate the Putt River. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 27 1 CHAIRMAN FRENCH: Those are all the questions I 2 have. Commissioner Foerster. 3 COMMISSIONER FOERSTER: I don't have any 4 questions for you guys. I don't think we need to take 5 a recess. I think the questions that I had discussed 6 with staff have been answered. But if you guys are 7 finished I have a question for Mr. Bredar. 8 Mr. Bredar, you have invited a guest this 9 morning. Would you like to get up and introduce here 10 and tell us a little bit about her? 11 MR. BREDAR: (Indiscernible - away from 12 microphone)..... 13 CHAIRMAN FRENCH: Good morning, nice to have 14 you here. 15 COMMISSIONER FOERSTER: So do you want to tell 16 us your dad's deepest darkest secret? 17 (Laughter) 18 COMMISSIONER FOERSTER: Okay. Never mind. I 19 have..... 20 CHAIRMAN FRENCH: No further questions from BP. 21 Thanks again so much for being here. 22 Any other member of the public of the public 23 which to testify on this application? 24 (No comments) 25 CHAIRMAN FRENCH: Anybody on line? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 28 1 (No comments) 2 CHAIRMAN FRENCH: Anybody in the room? 3 (No comments) 4 CHAIRMAN FRENCH: With that I'll solicit a 5 motion to adjourn. 6 COMMISSIONER FOERSTER: I•move we adjourn. 7 CHAIRMAN FRENCH: It has been moved and now 8 seconded that we adjourn. We're going to adjourn at 9 10:30. Thanks so much for being here. 10 (Hearing adjourned 10:30 a.m.) 11 (END OF REQUESTED PORTION) 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email• sahile@gci.net AOGCC 8/6/2018 ITMO: BP EXPLORATION AK, Inc. Docket No. CO 18-016 Page 291 1 C E R T I F I C A T E 2 UNITED STATES OF AMERICA ) )ss 3 STATE OF ALASKA ) 4 I, Salena A. Hile, Notary Public in and for the 5 State of Alaska, residing in Anchorage in said state, 6 do hereby certify that the foregoing matter in Docket 7 No. CO 18-016 was transcribed to the best of our 8 ability; 9 IN WITNESS WHEREOF I have hereunto set my hand 10 and affixed my seal this 15th day of August 2018. 11 12 Salena A. Hile 13 Notary Public, State of Alaska My Commission Expires: 09/16/2018 14 15 16 17 18 19 20 21 22 23 24 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Docket Number: CO -18-016 Amend CO 341F and CO 559 August 6, 2018 at 10:00 am NAME AFFILIATION Testify (yes or no) CrQP1pm Erw SoN g(-7 YES GseDq 5-recvAuNe2 0 p YES Za4li b anErs BP iV o Me,✓k SVD 5�m�n Shu �C�r/rS� AOC,e i'7 l/ 2 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -18-016 The application of BP Exploration (Alaska) Inc. (BPXA) for amendments to Conservation Order No. 341F (CO 341 F), which governs the Prudhoe Oil Pool (POP), and Conservation Order No. 559 (CO 559), which governs the Put River Oil Pool (PROP). BPXA, by letter dated June 20, 2018, requests the Alaska Oil and Gas Conservation Commission (AOGCC) amend CO 341F and CO 559 to allow pool wide downhole commingling between the PROP and the POP. The AOGCC has tentatively scheduled a public hearing on this application for August 6, 2018, at 10:00 a.m. at 333 West 7ch Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on July 15, 2018. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after July 17, 2018. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7'h Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on July 31, 2018, except that, if a hearing is held, comments must be received no later than the conclusion of the August 6, 2018 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than July 31, 2018. Hollis S. French Chair, Commissioner Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -18-016 The application of BP Exploration (Alaska) Inc. (BPXA) for amendments to Conservation Order No. 341 F (CO 341F), which governs the Prudhoe Oil Pool (POP), and Conservation Order No. 559 (CO 559), which governs the Put River Oil Pool (PROP). BPXA, by letter dated June 20, 2018, requests the Alaska Oil and Gas Conservation Commission (AOGCC) amend CO 341F and CO 559 to allow pool wide downhole commingling between the PROP and the POP. The AOGCC has tentatively scheduled a public hearing on this application for August 6, 2018, at 10:00 a.m. at 333 West 7" Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on July 15, 2018. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after July 17, 2018. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7a' Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on July 31, 2018, except that, if a hearing is held, comments must be received no later than the conclusion of the August 6, 2018 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than July 31, 2018. //signature on fileH Hollis S. French Chair, Commissioner Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Wednesday, June 27, 2018 9:29 AM To: Bell, Abby E (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); Martin, Teddy J (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 VanderJack, 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; Diemen 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); Greg Kvokov; Gretchen Stoddard; gspfoff, Hurst, Rona D (DNR); Hyun, James J (DNR); Jacki Rose; Jason Brune; Jdarlington (arlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Shine, Jim Watt; Jim White Oim4thgn@gmail.com); Young, Jim P (DNR); Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); Jon Goltz; 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; 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 Tirpack; Robert Warthen; Ryan Gross; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly, Sharon Yarawsky; Skutca, Joseph E (DNR); Smith, Kyle S (DNR); Spuhler, Jes J (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; Terry Caetano; Tim Mayers; Todd Durkee; Tom Maloney; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vern Johnson; Vinnie Catalano; Well Integrity; Well Integrity; Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andy Bond; Bajsarowicz, Caroline 1; Bruce Williams; Casey Sullivan; Corey Munk; Don Shaw; Eppie Hogan; Eric Lidji; Garrett Haag; Smith, Graham 0 (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; 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; Scott Pins; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); William Van Dyke; Zachary Shulman Subject: Public Notices Attachments: CO 18-015 Public Hearing Notice.pdf, CO 18-016 Public Hearing Notice.pdf Please see attached. Re: Docket Number: CO -18-015 The application of Hilcorp Alaska, LLC (Hilcorp) for an order in accordance with 20 AAC 25.215 authorizing the downhole commingling of production in the wellbore of the Swanson River Unit 14-15 (SRU 14-15) well. Re: Docket Number: CO -18-016 The application of BP Exploration (Alaska) Inc. (BPXA) for amendments to Conservation Order No. 341F (CO 341F), which governs the Prudhoe Oil Pool (POP), and Conservation Order No. 559 (CO 559), which governs the Put River Oil Pool (PROP). Jody J. CoCombie A015CC Syecia(Assistant .ACaska OiCandCGas Conservation Commission 333 West /-1 -Avenue Anchorage, Alaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). If 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 lodv colombie@ataska.gov. Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 George Vaught, Jr. Darwin Waldsmith Richard Wagner P.O. Box 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639 Fairbanks, AK 99706 �� 05� STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED1U AFFIDAVIT OF PUBLICATION WHH ATTACHED COPY OF ADVERTISMTINT. ADVERTISING ORDER NUMBER AO-18-018 FROM: AGENCY CONTACT: Jody Colombie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A.O.AGENCY PHONE: 333 West 7th Avenue 6/27/2018 (907) 279-1433 Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907)276-7542 TO PUBLISHER: Anchorage Daily News SPECIAL INSTRUCTIONS: 300 W. 31st Ave. Anchorage, Alaska 99503 TYPE OF ADVERTISEMENT: LEGAL DISPLAY CLASSIFIED OTHER (Specify below) DESCRIPTION PRICE CO-18-016 Initials of who prepared AO: Alaska Non -Taxable 92-600185 SUBMIT INVOD'F.SHOIVE�'G ADVERTISING: ..... ........... ' . D " "" " " ii:ORDERNO.; CERT]ITEDAFFIOAIRT : DF.�:!� ......... ..... .. ..... .. ............ :ruaE�FxnoxTnrH:Arrael�ncorxoF: :ADVERTrsMErvr:Ta Departm ent of Administration Division of AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 Pae 1 of I Total of All Pages $ REF Type Number Amount Dale Comments I PVN ADN99311 2 AO AO-18-018 3 4 AIN AMOUNT Sy Act. Template I PGM LGR Object FY DIST LIQ I 18 A14100 3046 18 2 3 4 5 � Purchasing Author a 1 e: Purchasing Authority's Signature Telephone Number t. A. #�mffi'receimrol nw6y`mrrTe`Rdsthl5pwr on all inwices and documents relating to this purchase. 2. The state is re stared for tax free transactions under Chapter 32, IRS code. Registration number 9243-0006 K. Items are for the exclusive use of the state and not for resale. DISTRIBi17I9N. Division:FiscA/Original rl0. �Coples: PuGlieher (faxPtl), Division Fiscal, Receiving Form: 02-901 Revised: 6/27/2018 - ' -101 .: DAI � � rk:'RECEIVED AFFIDAVIT OF PUBLICATION Account#: 270227 ST OFAKIAK OILAND GAS Order# 0001423850 CONSERVATION COMMISSION Cost $204.20 333 WEST 7TH AVE STE 100 nmruncnrc nuooFmvsco STATE OF ALASKA THIRD JUDICIAL DISTRICT Joleesa Stepetin being first duly sworn on oath deposes and says that he/she is a representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on June 28, 2018 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. 1 � Signed L Jol ff a Steoetin Subscribed and sworn to before me this 28th day of June, 2018 (- r AA m 1 Z�zna� Notary Pu in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSIO EXPIRES F JUL 06 2018 Product ANC -Anchorage Daily News Placement 0300 Position 0301 Notice of Public Nearing ALASKA OIL ANDSTATE OF GAS CONSE VAT ON COMMISSION Re: Docket Number: CO -18-016 The application of BP Exploration (Alaska) Inc. (BPxA) for amentlments to Conservation Order No: 341F (CO 341F), which ggoverns the Prudhoe Oil Pool (POP), and Conservation Order No. 559 (CO 559), which governs the Put River Oil Pool (PROP). BPXA, by letter dated lune 20, 2018, requests the Alaska Oil and Gas conservation Commission (AOGCQ amend CO 341F and CO 559 to allow pool wide downhole commingling between the PROP and the POP. The AOGCC has tentatively scheduled a public. hearingB on this Avenue AnclhoQragbee, forcation August 99501. TTo re UestOthat the tentativelytscheduled lateracing 4 he d,.m. on Ju y 15e, 2018 must be filed with the AOGCC no If a request for a hearing is not timely filed, the AOGCC mayy consider the issuance of an order without a hearing ro learn N the AOGCC will hold the hearing, call (907) 793-1221 after July 17, 2018. If; because of a disability special accommodations may be needed to comment or attend the hearincontact the AOGCC's 5 cial Assistant Jody Colombie, at (907) 793-1221, n0 later than July 31, 2018. Published: June 28, 2018 Notary Public BRITNEY L. THOMPSON State of Alaska My Commission Expires Feb 23, 2079 //signature on file// Hollis S. French Chair, Commissioner 1 BP Exploration (Alaska), Inc. 900 East Benson Boulevard Post Office Box 196612 Anchorage, Alaska 99519-6612 Telephone (907) 564 561 June 20, 2018 �4EGIVED Mr. Hollis French, Chair Alaska Oil and Gas Conservation Commission juN 2 2 2W 333 West 7h Avenue, Suite 100 ti Anchorage, AK 99501 �ytOGGG RE: Application for Administrative Approval to amend Conservation Orders 341F and 559 to authorize Down -hole Commingling of Production from Put River and Prudhoe Oil Pools Dear Chair French, BP Exploration (Alaska) Inc. (BPXA), as the Operator of the Prudhoe Bay Unit which includes the Put River Oil Pool (PROP) and the Prudhoe Oil Pool (POP), respectfully requests that the commission administratively approve amendments to Conservation Orders CO 341F and CO 559 for down -hole commingling of production from the PROP and POP. BPXA respectfully submits that commingling of production from the PROP and POP will promote the conservation of oil and gas resources in the PROP and POP and not cause waste, and that such production can be appropriately allocated. The information that follows is provided to support this application. If the commission has questions or desires more information please contact Bill Bredar at 564- 5348, william.bredar@bp.com. Sincerely, Diane Ric nd Alaska Reservoir Development, BPXA 564-4212 cc: Mr. Eric Reinbold, ConocoPhillips Alaska, Inc. Mr. Hank Jamieson, ExxonMobil Alaska, Production Inc. Mr. Jeffery Farr, ExxonMobil Alaska, Production Inc. Mr. Dave White, Chevron USA Application for Administrative Approval June 20, 2018 Amendment of COs 341F and 559 Additional Information in Support of Application Introduction Commingling of production within the same well -bore from two pools is permitted under 20 AAC 25.215(b) if the Commission, after notice and opportunity for public hearing, "(1) finds that waste will not occur, and that production from separate pools can be properly allocated; and (2) issues an order providing for commingling for wells completed from these pools within the field." Waste Will Not Occur 1. Production Considerations Appraisal activities of the PROP in 2005 identified the presence of oil and gas condensate in the Western and Central Lobes of the PROP. Further development of these lobes of the PROP was not pursued at that time in part due to low flow rates that resulted in significant operational challenges and associated down-time due to hydrate deposition. Several wells exist that penetrate and could be completed in both the PROP and the POP. By commingling production from the two pools within the same well -bore, the fluid rate and velocity in the tubing can be increased, resulting in higher flowing wellhead temperatures and reduced production problems associated with hydrate formation. Consequently, commingling of production from the PROP and POP within the same well -bore will not cause waste, but rather will allow for recovery of a greater quantity of oil and gas condensate from the PROP. Application for Administrative Approval Amendment of COs 341F and 559 2. Cross flow June 20, 2018 Based on the reservoir fluids in the PROP and POP, fluid incompatibility and formation damage due to commingling and crossflow is not expected. If changes to produced fluid compositions or ratios result in potential fluid incompatibility, chemical inhibition to prevent productivity degradation would be evaluated. Crossflow associated with short term shut in periods under typical operations are not anticipated to result in significant volume flowing between pools or to adversely impact reservoir management. Crossflow of significant volume between pools in commingled wells that experience extended shut in periods could be prevented through mechanical isolation of the pools. Appropriate Surveillance and Production Allocation Will Be Assured Appropriate surveillance and production allocation measures will be undertaken to meet reservoir management objectives and to provide an acceptable allocation methodology. 1. Production Allocation Representative fluid samples will be obtained from both pools to verify that geochemical (GC) analysis will allow for metering of pool oil, water and gas to within allocation quality accuracy. Following commingling, GC analysis will be completed on the commingled production and compared with production logs or differential well tests within 6 -months of production. GC analysis will be completed semi-annually and production logs or differential well tests will be repeated as necessary to assess production anomalies. 2. Reservoir Surveillance Reservoir pressure of the PROP can be measured with the use of down -hole plugs and pressure gauges. Reservoir pressure measurement of the POP would be limited to wells without commingled PROP production however the large number of wells completed in only POP near anticipated PROP/POP commingling will continue to enable effective monitoring of POP reservoir pressure for reservoir management. Application for Administrative Approval Amendment of COs 341F and 559 Conclusion June 20, 2018 BP requests approval for wellbore commingling of production from the Put River Oil Pool (PROP) and the Prudhoe Oil Pool (POP). There are several potential wells in which we are considering comingling the PROP with the existing Ivishak production. Because of the number of opportunities, we request approval of an amendment to the PROP CO 559 authorizing pool -wide commingling with the Prudhoe Oil Pool. BPXA respectfully submits that this activity will not cause waste, will promote conservation through greater ultimate recovery of oil and gas resources by allowing increased recovery from the PROP. Produced liquids and gas from the separate pools can be properly allocated based on the production allocation procedure in the proposed amendments below. Proposed Amendments to Conservation Orders Note: Use of [ J's denotes the deletion of existing order text. Use of underline denotes proposed new text. Amendment to Prudhoe Oil Pool CO 341F Rule 18 Commingling of Production in the Same Wellbore [(Source: CO 341E.005)] Commingling production from the Aurora Oil Pool in Well S-26 or Put River Oil Pool [and] with the Prudhoe Oil Pool [in Well S-26] is approved on the condition that BPXA allocates production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: (a) Prior to commingling production [in Well S-26,] a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Aurora or Put River Oil Pool (in isolation from the Prudhoe Oil Pool). (b) For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling and analysis must occur at least twice per year and not less frequently than once every seven months. (c) A [P]production log[s] or differential well test must be obtained and compared to the geochemical and regular well test results within the first [two months and again] six months after commingled production starts. Thereafter, production logs or [isolated] differential well tests of each pool must be obtained when major changes in Application for Administrative Approval Amendment of COs 341F and 559 June 20, 2018 production characteristics occur which could result in less accuracy in allocation of gas or water to the separate pools. (d) In addition to the other requirements of Rule 4 of CO 457B and CO 559, the monthly reports required by Rule 4(e) of CO 457B and Rule 4(f) of CO 559 must identify [the Well S-26] production allocated to the Aurora Oil Pool or Put River Oil Pool and the Prudhoe Oil Pool for commingled wells. (e) The volumes reported on Form 10-405-i.e., in accordance with 20 AAC 25.230(b) must identify [the Well S-26] commingled production allocated to the Aurora Oil Pool or Put River Oil Pool and the Prudhoe Oil Pool. (f) A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Aurora or Put River and the Prudhoe Oil Pools, along with the analyses of the geochemical tests, production logs, and regular well tests. Amendment to Put River Oil Pool CO 559 Rule 12 Commingling of Production in the Same Wellbore Commingling production from the Put River Oil Pool with the Prudhoe Oil Pool is approved on the condition that BPXA allocates Production to the separate pools using the geochemical test, production log, differential well tests and regular well test results outlined below: (a) Prior to commingling production, a bottom -hole static reservoir pressure and production test must be obtained and geochemical sampling and analysis must be performed on oil from the Put River Oil Pool (in isolation from the Prudhoe Oil Pool . (b) For the first six months after commingled production starts, geochemical sampling and analyses must occur monthly at the time stabilized production tests are performed. Thereafter, geochemical sampling and analysis must occur at least twice per year and not less frequently than once every seven months. c) A production log or differential well test must be obtained and compared to the geochemical and regular well test results within the first six months after commingled production starts. Thereafter, production logs or differential well tests of each pool must be obtained when major changes in production characteristics occur which could result in less accuracy in allocation of gas or water to the separate Pools. (d) In addition to the other requirements of Rule 4 of CO 559, the monthlyports required by Rule 4(f) of CO 559 must identify production allocated to the Put River Oil Pool and the Prudhoe Oil Pool for commingled wells. (e) The volumes reported on Form 10-405-i.e., in accordance with 20 AAC 25.230(bl must identify commingled production allocated to the Put River Oil Pool and the Prudhoe Oil Pool. Application for Administrative Approval Amendment of COs 341F and 559 June 20, 2018 A summary report documenting the results and effectiveness of the commingled production allocation must be provided to the AOGCC within 9 months after the start of commingled production and shall include the results of the production allocated to the Put River and Prudhoe Oil Pools, along with the analyses of the geochemical tests, production logs, and regular well tests. Rule 112113 Administrative Action Unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any rule stated above or administratively amend any rule, including the "Sundry Matrix" referred to in Rule 8, as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater.