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Home My WebLink AboutO 1701. 2. 4. 5. 6. Other Order 170 Missing Meter Performance Reports -------------------- Background information March 2, 2020 Notice of Proposed Enforcement Action March 4, 2020 Hilcorp request for an informal review March 12, 2020 AOGCC scheduling of informal review ---------------- Emails and documentation ----------------- Confidential Penalty Calculation and notes (held in secure storage) ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage Alaska 99501 Re: Missing Meter Performance Reports ) Other Order 170 Custody Transfer Meters ) Docket Number: OTH-20-002 Beaver Creek Unit ) May 14, 2020 DECISION AND ORDER On March 2, 2020 the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to Hilcorp Alaska, LLC (Hilcorp) regarding Beaver Creek Unit oil custody transfer meters based on Hilcorp's failure to submit required meter performance reports. The Notice proposed specific corrective actions and a $30,000 civil penalty under AS 31.05.150(a). Hilcorp requested an informal review. That review was held telephonically March 18, 2019. Summary of Proposed Enforcement Action: The Notice identified violations by Hilcorp of the conditional approval letter for new custody transfer oil measurement equipment at Beaver Creek Unit dated October 15, 2019. The Notice proposed a civil penalty of $30,000 for failure to provide meter performance report as specified in Beaver Creek Unit condition of approval 2.f. The Notice also proposed that Hilcorp submit the required information and describe how it will prevent recurrence of this violation. Violation - Failure to Submit Required Custody Transfer Meter Performance Reports: Expansion of the oil loading terminal at Beaver Creek Unit by adding custody transfer oil measurement equipment was conditionally approved by AOGCC on October 15, 2019. Requirements imposed included the meter prove frequency, notification to AOGCC for opportunity to witness meter proves, required actions before making changes to the custody transfer measurement equipment, and reporting obligations following proves. Condition 2.f, of the Beaver Creek meter approval letter requires that Hilcorp "Provide results of each meterprove within 7 days, including i. Prove reports; ii. Batch summaries; iii. Current meter curve or meter factor control chart with the following fixed control limits that are used to determine when to initiate recalibration of instruments, inspections, adjustments, cleaning, or repairing of mechanical equipment, or audits of the measurement system: 1. +/--0.25% meter factor deviation between consecutive proves 2. +/--0.50% meter factor deviation between current and baseline proves." An AOGCC Inspector witnessed the initial meter prove at Beaver Creek Unit on October 14, 2019 following installation and functional checks of the new custody transfer oil measurement system. Custody transfer oil measurement prior to the approved expansion occurred off -lease at the Marathon Kenai Refinery. Other Order 170 May 14, 2020 Page 2 of 3 On January 16, 2020 Hilcorp performed the required quarterly meter prove at Beaver Creek— also witnessed by AOGCC. Meter prove reports were provided to the AOGCC Inspectors on October 14, 2019 and January 16, 2020. There were no batch summaries or meter factor control charts provided as required in condition 21. By letter dated March 4, 2020 Hilcorp acknowledged receipt of the Notice and requested an informal review of the matter. The informal review was held March 18, 2020 during which time Hilcorp asked several clarifying questions and provided verbal assurance that corrective actions have been implemented. By email dated March 18, 2020 Hilcorp provided copies of the reports required in the two conditional approval letters. Hilcorp provided additional information requested during the informal review in emails dated April 30 and May 1, 2020. Mitit=_ating Circumstances: The factors in AS 31.05.150(g) were considered in determining the appropriate penalty. Hilcorp's lack of good faith in its attempts to comply with the imposed conditions, its history of regulatory noncompliance and need to deter similar behavior are the factors which most heavily influence AOGCC's decision and the penalty being assessed: - The failure to submit information related to meter performance — specifically the meter factor control charts — cannot be characterized as a good faith attempt to comply with the AOGCC's conditional approval letters. - There is nothing ambiguous about the approval conditions requiring submittal of meter prove results, and the requirements are consistent with the industry recognized standardized practices found in API Manual of Petroleum Measurement Standards. - The absence of equipment performance tracking information such as the required meter factor control charts compromises the ability of AOGCC to make informed, fact -based decisions about how frequently meters should be proved and how frequent those proves should be witnessed. - Hilcorp's history of noncompliance in Alaska is well documented through various AOGCC enforcement actions. While improvements in Hilcorp's compliance can be shown in the past 2 years, the recurrence of failing to account for approval conditions imposed by AOGCC calls into question the effectiveness of corrective actions implemented in responses to past enforcement actions. For example, AOGCC closed out an enforcement action for similar violations — failure to provide meter performance reports for Hilcorp's custody transfer oil meters at Granite Point Unit and Trading Bay Unit — with the same assurances of corrective actions just four months prior to this violation at Beaver Creek. Mitigating circumstances considered in the assessment of the proposed civil penalty include Hilcorp's partial submittal of information to the AOGCC Inspector who witnessed meter proves in October 2019 and January 2020, the demonstrated good performance of the meter as shown in the meter factor control charts, and no injury to the public. Further, AOGCC has not imposed per - day or per -month assessments for the violations, which has significantly reduced the penalty. 2 Incorporated by reference into AOGCC regulations at 20 AAC 25.228 Other Order 170 May 14, 2020 Page 3 of 3 Findines and Conclusions: The AOGCC finds that Hilcorp violated the October 15, 2019 conditional approval letter for the custody transfer oil meter at Beaver Creek Unit. Mitigating circumstances outlined above were considered in the Notice and the AOGCC assessment as to the appropriate civil penalty. Hilcorp has neither disputed the findings in the Notice nor the penalty proposed by AOGCC. Since receiving the Notice, Hilcorp has provided results of each meter prove as required in the conditional approval letters. Now Therefore It Is Ordered That: Hilcorp is assessed a civil penalty in the amount of $30,000 for violating the October 15, 2019 conditional approval letter for the Beaver Creek Unit custody transfer oil measurement equipment. If Hilcorp chooses not to appeal this Order the fine must be paid within 30 days of issuance. If appealed, the fine will be held in abeyance until the appeal process is complete. In addition to the civil penalty, within 10 days of the date of the AOGCC's final decision, Hilcorp shall provide a detailed written explanation that describes how it intends to prevent recurrence of this violation. As an Operator involved in an enforcement action, Hilcorp is required to preserve documents concerning the above action until after resolution of the proceeding. Done at Anchorage, Alaska and Dated May 14, 2020 D;gitnay sinnM by Jeremy wmy M. Price Digitally signed by Jessie Jessie JGJJIG L. LChnnwl.W'kj Digisallysignee by Daniel T. Dn;elr.So....CL. Dale: 2020.05.1f M. Price 12:0344 Chmielowski Dare: 2020.05.1415:4535 - 8'00' DaK 2029.05.14 Seamount, Jr.1529,b-0,.gg. Jeremy M. Price Jessie L. Chmielowski Daniel T. Seamount, Jr. Chair, Commissioner Commissioner Commissioner cc: AOGCC Inspectors Phoebe Brooks (AOGCC) As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Bernie Karl K&K Recycling Inc. 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 Carlisle, Samantha J (CED) From: Carlisle, Samantha I (CED) Sent: Friday, May 15, 2020 1:13 PM To: AOGCC Public Notices Subject: Other Order 170 Attachments: other170.pdf Missing Meter Performance Reports Custody Transfer Meters Beaver Creek Unit Samantha Carlisle Executive Secretary III ,Alaska Oil and Gas Conservation Commission 333 West 71, Avenue Anchorage, AK 99501 (907) 793-1223 C'ONIIUIN IIALITYNOTI f:1hese-neulm sage,including.ut}=attachm<mes,contains infrnmahon thou the 4Lrslur f?rl and Gas Cunsri.rvotion Conumcsion (AC)GCC), State of N,iska and is for the. Selo use of Elie intended wopient(s). It may contain confidunial and/or privileged information. The unauthorized tttviesv, use or disclosure of such it may violate siatr or federal Loo, If you ale an unintndod rcupwill of this c -mail, please delete it, without mst savingor iorIvaiding it, and, no than the AUG('(' is awarr of the mistake in sending it to von, coi%wt Samantha Carlisle at (91h') 79312_3 of Sam aitht Cal lisle flisha.gce'. June 9, 2020 Hilcorp Alaska, LLC AOGCC Commissioners Alaska Oil & Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 Re: Docket No. OTH 2O-002 Other Order 170 Missing Meter Performance Reports Custody Transfer Meters Beaver Creek Unit Dear Commissioners: Taylor Wellman Operations Manager - Kenai Asset Team 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 907/777-8449 twellman@hilcorp.com RECEIVED JUN 1 1 2020 AOGCC This letter is in response to Alaska Oil and Gas Conservation Commission (AOGCC) Order 170 regarding the failure by Hilcorp Alaska, LLC (Hilcorp) to submit required meter performance reports for the Beaver Creek Unit oil custody transfer meters dated May 14, 2020. Hilcorp will not appeal Order 170 and is submitting payment of the civil penalty for violating the October 15, 2019 conditional approval letter for the Beaver Creek Unit custody transfer oil measurement equipment. Enclosed find payment to AOGCC in the amount of $30,000. Prevention Measures to Prevent Recurrence of Violation We are taking this violation seriously and are actively working to ensure it does not recur. As previously provided to the AOGCC staff on April 30, 2020, listed below are the actions and measures that Hilcorp has already implemented and added to work flows to prevent recurrence of a metering violation: 1. Confirmed that all meters are uploaded into our maintenance system (EAM). 2. Added all COA's for each meter to the work orders in EAM. 3. Work orders will not to be closed out until all the COA's and calibrations are completed and information submitted as per the COA's for that meter. 4. Running weekly reports in EAM specifically flagging the meter work orders. These reports are reviewed by the Metering Tech's direct supervisor. If you have any additional questions, please contact me. Docket No. OTH 2O-002 June 9, 2020 Page 2 oft Sincerely, HILCORP ALASKA, LLC Taylor Wellman Operations Manager - Kenai Asset Team Cc: David Wilkins, SVP, Alaska Denali Kemppel, General Counsel Hilcorp Alaska LLC r P.0 Box 6:529 HOUSTON TX 77208-1529 III—IM41 ?LEASEE DETATCH AT PERFO4ATON BELOW 6/9/2020 ORDER 170;DOCKET NUMBER:OTH-20-002 $30,000.00 $0.00 $30,000.00 PLEASE DETATCH AT PERFORAIDN BELOW P.O Box 61529 HOUSTON TX 772081 �� Fit i P K „ Thirty Thousand Dollars and Zero Cents qhs"' k�s��4v� � THE AOGCC i i1 �� ei i� It I �Ih�� p ��, .I �u 1161t�,� Ipau� 1'ziiw, VeiQ Atter 90 DBYB h n Check No Check Date I Check Amount 0082082985 6/10/2020 I *******$30,000.00 11.008 208 298 511' 1:1131105861: 044440774811' Authorized Signature INDEXES Confidential, held in secure storage Regg, James B (CED) From: Taylor Wellman <twellman@hilcorp.com> Sent: Friday, May 1, 2020 5:19 PM To: Regg, James B (CED) Subject: RE: [EXTERNAL] RE: Beaver Creek Unit Missing Meter Performance Reports Informal Discussion Follow Up Mr. Regg, Thank you for the conversation today regarding the FCO and Proving for this meter. I would like to confirm that the baseline meter factor is 1.00026 from the 10/14/19 Prove. Thank you, Taylor Taylor Wellman Hilcorp Alaska, LLC — Kenai Ops Manager Office: (907) 777-8449 Cell: (907) 947-9533 Email: twellman@hilcorp.com From: Regg, James B (CED) [mailto:jim.regg@alaska.gov] Sent: Friday, May 1, 2020 12:16 PM To: Taylor Wellman <twellman@hilcorp.com> Subject: RE: [EXTERNAL] RE: Beaver Creek Unit Missing Meter Performa/Reportsf mal Discussion Follow Up Thank you for the explanation. AOGCC requested opportunity to witneal check-out (FCO) of the meter system — see attached. This is something we require for every new (inclled") meter installation. We were not contacted for opportunity to witness. It appears to me the "dry runrtunity not only for the FCO but also for establishing a baseline meter factor— possibly 9/27/19 but mos10/11/19. The scope of our FCO would have been as follows: Administrative - Visual site inspection - Verify serial #s on measurement equipmen/dte Confirm current calibration of flow, pressurature transmitters - Review AOGCC expectations (standard conoval) Meter Skid - Shipping/Boost Pumps - Flow control devices - Strainers/Filters - Flow conditioning plata - Sampling system - Manifolds and valves f mixers routing to prover transmitter calibration checks Prover/Divert valvee: seal verification ability Confirm no bypass lines Big G Master Meter Prover (if at location) Regg, James B (CED) From: Regg, James B (CED) 11 Sent: Friday, May 1, 2020 12:16 PM To: Taylor Wellman Subject: RE: [EXTERNAL] RE: Beaver Creek Unit Missing Meter Performance Reports Informal Discussion Follow Up Attachments: RE: [EXTERNAL] RE: RE: Beaver Creek Unit - Oil LACT Meter BLM Application Thank you for the explanation. AOGCC requested opportunity to witness the functional check-out (FCO) of the meter system — see attached. This is something we require for every new (including "remodeled") meter installation. We were not contacted for opportunity to witness. It appears to me the "dry run" was the opportunity not only for the FCO but also for establishing a baseline meter factor— possibly 9/27/19 but most definitely by 10/11/19. The scope of our FCO would have been as follows: Administrative - Visual site inspection - Verify serial #s on measurement equipment - Confirm current calibration of flow, pressure, and temperature transmitters - Review AOGCC expectations (standard conditions of approval) Meter Skid - Shipping/Boost Pumps - Flow control devices - Strainers/Filters - Flow conditioning plates/Static mixers - Sampling system - Manifolds and valves for routing to prover - Pressure/Temperature transmitter calibration checks - Prover/Divert valves seal verification ability - Confirm no bypass lines - Big G Master Meter Prover (if at location) Flow Computer - Pressure/Temperature registers - Totalizer Absent some details from Hilcorp, it appears the procedure for establishing the baseline meter factor was a single meter prove derived on 10/14/2019. Just to be clear, the baseline meter factor being used for satisfying the meter approval condition is 1.0026. Jim Regg Supervisor, Inspections AOGCC 333 W.7'h Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. Regg, James B (CED) From: Colombie, Jody J (CED) Sent: Thursday, April 30, 2020 6:48 PM To: Regg, James B (CED) Subject: FW: Prover draw test for 2020 Attachments: Cosmopolitan prover recert frequency 4-2020.pdf From: Dwight Warner <dwarner@bluecrestenergy.com> Sent: Thursday, April 30, 2020 11:59 AM To: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Cc: Roby, David S (CED) <dave.roby@alaska.gov> Subject: Prover draw test for 2020 This recertification requires personnel to come from Colorado and, with the current travel restrictions due to the Coronavirus, will require them to be quarantined for 2 weeks prior to doing the testing. I am not sure where this would be done, probably at a hotel with significant costs, as they will have to have someone bring food to them also. I believe by doing this we are putting these people at risk by asking them to get on a plane coming from the Colorado. There is also risk to our personnel on site by bringing them on location. BlueCrest will work with the other operators in the Cook Inlet to reduce the risk for BlueCrest and the other operators once travel restrictions are lifted. I would like to ask for deferment until the travel restrictions are lifted. If possible is there any chance that AOGCC would consider bypassing this year's recertification and begin annual testing next year, when we will meet the criteria outlined in the letter dated April 3, 2020 from Jeremy Price? Please contact me on my cell phone if you have any questions or need more details at 440-0192. Thank you Dwight Warner Sr. Production Engineer BlueCrest Energy Inc 3301 C Street, Suite 202 Anchorage, AK 99503 Dwarner@bluecrestenergy.com (w) 907-754-9556 (c) 907- 440-0192 (f) 907-754-5997 THE STATE "'ALASKA April 3, 2020 GOVH.RNOR MICFLlEL 1. DUNUAVY Mr. Dwight Warner Senior Production Engineer BlueCrest Alaska Operating LLC 3301 C Street, Suite 202 Anchorage, AK 99503 Re: Docket Number: OTH-20-013 Prover Recalibration Frequency Cosmopolitan Field Dear Mr. Warner: Alaska Oil and Gas Conservation Commission 333 west Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alasv,cl.gov BlueCrest Alaska Operating LLC (BlueCrest) requests approval from the Alaska Oil and Gas Conservation Commission (AOGCC) to decrease the calibration' frequency for its Cosmopolitan Field meter prover located at the Hansen Production Facility. That letter was dated March 18, 2020, and specifically requests changing the prover recalibration frequency from annual to at least two years between calibration. Data provided in BlueCrest's letter shows the results of the initial Fnnr anmial nrnver calihrntinns as follows_ each witnessed by AOGCC: Date Certified Base Prover Volume bbls Volume Change2 5/18/2016 2.85701 0.016% 5/7/2017 2.85976 0.096% 8/1/2018 2.86358 0.133% 6/7/2019 2.86301 -0.020% BlueCrest's request is denied. API Manual of Petroleum Measurement Standards (MPMS), Chapter 4.8, Section 10.1 provides guidance for establishing a prover calibration frequency by considering service (usage, time, severity), calibration and inspection history, regulatory requirements, and fiscal value of the metered liquids. The standard sets the benchmark in successive calibration change to 0.06% or less. An increased frequency is recommended for a successive calibration volume change greater than 0.06%. 1 Recertification of the base prover volume using the water draw method 2 Initial Base Prover Volume was determined by the manufacturer during the Factory Acceptance Test on 12/15/2015 Mr. Dwight Warner April 3, 2020 Page 2 of 3 AOGCC approval for the Cosmopolitan Field oil custody transfer meter system dated May 25, 2016 required annual prover recalibrations for the first two years of operation to establish confidence in the proving system. The requirement was extended based on the performance noted above (consecutive recalibration volume change exceeding 0.06% in 2017 and 2018). In addition, AOGCC notes that the average time to complete each year's prover recalibration has been three days due to challenges obtaining a certified prover volume. The prover is in severe service — exposed to extreme ambient conditions that include wind, dust, rain, snow, ice, and drastic temperature changes in lieu of being located inside a climate -controlled building. The 2019 certified prover volume was the first to meet the 0.06% benchmark; a similar result in 2020 would be a basis for BlueCrest to request reconsideration of the prover recalibration frequency. Questions regarding this letter should be directed to Jim Regg at 907-793-1236. Sincerely, Jeremy M. Price Chair, Commissioner cc: AOGCC Inspectors RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission 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 Commission 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 Commission 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 Commission mails, OR 30 days if the Commission 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 Commission 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 Commission, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision on reconsideration. (this language was removed from the statute a few years ago) In computing a period of time above, the date of the event or default atter 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 Regg, James B (CED) From: Taylor Wellman <twellman@hilcorp.com> �la, 4I 301 147,p Sent: Thursday, April 30, 2020 4:55 PM To: Regg, James B (CED) Subject: RE: [EXTERNAL] RE: Beaver Creek Unit Missing Meter Performance Reports Informal Discussion Follow Up Attachments: MTR-4000 LACT Proving Report (Comission) - Annotated.pdf, MTR-4000 LACT Function Test 10.11.2019.pdf, Beaver Creek Facility Functional Test 09.27.2019.pdf Mr. Regg, Following the informal discussion regarding the Beaver Creek NOV for Missing Meter Performance Reports here are the final 2 pieces of information. Documentation on the baseline meter factor used during the initial proving on 10/14/19. - The 10/14/19 proving should have become the baseline as it was the first meter proving with the required regulatory witnesses present. Prior proving runs on 9/27 and 10/11 were trial runs to work out bugs and troubleshoot wiring and controls. This was misrepresented by our 3rd party vendor by inclusion on the baseline report and then missed by Hilcorp personnel upon final submittal to your office. Attached is a copy of the proving documentation for 9/27, 10/11, and 10/14 for reference. o The sequence of events which led to the 10/14/19 Proving Report to have an incorrect 'previous meter factor': Once the meter was installed, we wanted to conduct a 'dry run' to ensure everything was functional prior to inviting the AOGCC and BUM inspectors to witness the initial commissioning/proving. We utilized Big G Electric & Engineering and their master meter prover for this on 9/27/19 and 10/11/19. After this point in time, there were adjustments made until the meter run was ready for witnessing. When Big G's master meter was used on 10/14/19, this was the baseline meter factor and the report incorrectly referenced a previous meter factor and date from 10/11/19 (these boxes are highlighted in red in the attached copy of the Meter Proving Report). Plan to prevent recurrence of compliance to the COA's for meters the following measures have been implemented and are in current practice: 1. Confirm that all meters are uploaded into our maintenance system (EAM). 2. Add all COA's for each meter to the work orders in EAM. 3. Work orders will not to be closed out until all the COA's and calibrations are completed and information submitted as per the COA's for that meter. 4. Run weekly reports in EAM specifically flagging the meter work orders. These reports to be reviewed by the Metering Tech's direct supervisor. Please let me know if there is additional information or clarification to what I have provided that you would like to see or discuss. Thank you, Taylor Taylor Wellman Hilcorp Alaska, LLC — Kenai Ops Manager Office: (907) 777-8449 Cell: (907) 947-9533 Email: twellman@hilcorp.com From: Regg, lames B (CED) [mailto:iim.regg@alaska.gov] Sent: Tuesday, April 28, 2020 4:30 PM To: Taylor Wellman <twellman@hilcorp.com> Subject: [EXTERNAL] RE: Beaver Creek Unit Missing Meter Performance Reports Informal Discussion Follow Up Were you able to find any info about the baseline meter factor being used at Beaver Creek? I am working on the closeout of the notice of violation and would like to have this info before wrapping it up. Thank you. Jim Regg Supervisor, Inspections AOGCC 333 W.7'h Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or lim.recz(@alaska.eov. From: Taylor Wellman <twellman@hilcorp.com> Sent: Wednesday, March 18, 2020 7:18 PM To: Regg, James B (CED) <iim.regg@alaska.Rov> Cc: Dave Wilkins <dwilkins@hilcorp.com>; Holly Tipton <hotipton@hilcorp.com> Subject: Beaver Creek Unit Missing Meter Performance Reports Informal Discussion Follow Up Mr. Regg, Enclosed you will find the following information: - Proving reports submitted via email dated: 10/14/19 (initial) and 1/16/20 - Meter Factor Control Charts for both 10/14/19 and for 1/16/20. - Batch Summaries: You were correct that these were not included in the original submissions. Please find these LACT Tickets from the day prior to the 1/16/20 prove. For the 10/14/19 prove, since this was the initial prove there aren't tickets prior to this date. I can provide any days later than this if you would like. Items to be submitted to you: - Documentation on the baseline meter factor used during the initial proving on 10/14/19. - Written explanation of how we will prevent a recurrence of this violation. If I have missed any other pieces of information that you would like to see please let me know and they will be provided. Thank you, Taylor Taylor Wellman Hilcorp Alaska, LLC — Kenai Ops Manager Office: (907) 777-8449 Cell: (907) 947-9533 Email: twellman(a@hilcorp.com L N E M E T E R Big G EiectriG & Enyuleri ul . II�l. �/oN Kc6 ut4Toify �Iz�l ly Ir. 121 rLIV (-r. UJI{ M'- 11 P, M f f.,a.:5 r Model i _. Smnh G' 6651 YES SIN MF -2674 3Jc r MAS'ER MT I -n Cmnp 14eter Make _Ile $mitt �3 Cltd 131944 I.; ii Mr.U=_' Ls Si CPL GTL igiy .ye.; -.11 `q<S FSIG Liomd correction for RUr: 1 Run 2 Run 3 'A'rt:,, Rur.4 Run 5 1 Melee Rcadin; In on rs s 42120 42141 42119 _ 42052 41934 2 Pulses ' BbI 1G,I 8400 8400 8400 8400 64G0 3 Gross Metered Vol 1 - 5 0!4285714 5016785714 5 014166667 5 W3928571 4 902142857 41'ertlpe�a4o,e r 954 954 954 954 954 b Cl L .- 0 955 0.96.5 0.985 0.985 0.985 6 pressure. PSIG 20 20 20 20 20 7 CPL 1 0001 1.0001 1.0001 1 0001 10001 6 Master Meter r not., 09994 0 9994 0.9994 0.9994 0,9994 9 Corr Metered Vol 3%5X7%8 4 936601597 4.939062865 4.936484393 4 926404912 4.914801789 Run 1 Run 2 Run 3 Run 4 Run 5 10 Meter Registration 42084 42060 42039 41954 41856 11 Pulses I Bbl;Ga1 8400 8400 8400 8400 8400 12 Gross Metered Vol 1C 11 501 5.007142857 5004C42857 4 99452381 4.982857143 13 Temperature F" 96 96 96 96 96 14 CTL 0.9847 0.9841 09847 09847 0.9847 15 Pressure. PSIG 20 29 29 29 29 16 CPL 1 00014 1.00014 1.00014 1.00014 1.00014 17 Corr Meter Vul. 12%14X!6 4.934037669 4 931223846 4.92.876175 4.91679613 4.907306355 18 Meter Factor 9 - 17 1.000519641 1.00158967 1 pn1566852 1001546679 1.0011.27403 19 K Factor 11 -9 20 Ccnseputive Difference NVALUEI 0001070029 -228'178605 i /_99l:i4E 05 -1.94761E-05 enc �uv�c o �.cn nr¢✓wp[1HU[FKU UUKHtCI Big G Te,h QV /*f( -J CPL GTL C's I Inwd mrre-f,on for Liomd correction for V0h ¢+Sc press�ie Rcm API 110 7emperal�re lrum 'A'rt:,, Appen JLx B 7 ab'a II also ASIVDQ5O. I able t�°.mass AN 2531 A.poenAu A fig 6 cr Table 24 16 for LPG's k'emar ks 110013504'6 Master Meter Proving Rea:,rt "r.C`�.Y - yd ._ ''Here TI B.'—, C :.: No sed NoN- REGULATORY e.:oeuze-a I .ilY 3 � F l� Sia G Electric & Enaineenna. 1 `Qtly plaliZx TM1�S G9`! 5^9] "r.C`�.Y - yd ._ --i __-- :.: No TCI3iS-er � d51 R��v�r•� 4PI GA in50e Si I .ilY 3 � F - - _ LINE METER DATA MelerMake ': MCG=I Sm:P fi'' a G&51 Tarry C— VES btele.-'.., - MF-2G%i Run 1 1 Me!c Reaa:n- In Pylee9 - 2P�.0stl Cal _ 3ipL Bc?r J GfoSa MelereC x011-2 - � *o5d J2Gdi 1241%5°' _ 4 Ter,,Wg re F 9"." 52.s 91 ECTL PSIG 1 1J01 IOGI SIAa..-: -:_, Fmor I _ 5994 0.?39i 03994 9 Corr Me;ereC Val WxTA — -- ':1.979621 - 751$ 801 - 91529952 I k&,,er Reowaron <094 _ II PW.R Ied 1G91 _ 12 GmsTMelereC VC1 10 - n i 585119Ci6 - - 13 Tem.,wLrA F 93, ti CTL 09°J 0384 15Preaayre. PSIG _ 1 __ !8 CPL 1T CJy. Meter VG 12x14%13 16 Meter Fano 9 - 17 20 Corr., m Paelence .003:7i -5y .. i �,r✓OZZ45zi�, tA 7e2r IVjll'ull 4-- I.00zVQ07 MILD TU BE [RUE ANO CORRECT jPtceZ" =lT L -A 0 C- C- ltd(4119 t j 9COff MP!aFel VC11 315fi,8 4 9240543?8 5 7312375,'19 443755C15? 4 9240943328 931355115 8400 46,71-1 Fun 3 12 &4O3 R,,n 4 4 18 -a b4q,) Run 5 4 i 916 11400 MN,d V.)l I j - i 1 4 5_2'59533.9 F _Ll Cl L 65.6 8+'6 C3E E:95 896 0 9e5e 0 9856 u ES% 0 9556 09856 15 Pressure PS IG 30 30 30 3c ;5 I -F -I 1 00017 1 0i A 17 1 Ocl 7 7 000 17 1 00017 17 C"r M,,, W;, 12-14x16 45115611578 566828 4916980064 MIM FaZ1.1 5 17 1 J02546529 1 002x55383 002661124 'uJ25aG�i9 1002518E15 K Fac:,, 1 MILD TU BE [RUE ANO CORRECT jPtceZ" =lT L -A 0 C- C- ltd(4119 M A S T E R L N E M E T E R Master Meter Proving Report T Beaver Creek LACT BLDG OI Beaver Creek LACT MTR-4000 - ti� 744e copq - Previous - Current Factor Difference -0.0003696373 Totalizer This Date 3607.2 Product crude Rate 300 m Previous Factorate 1.0022 10/14/2019 Rsport No. A Totalizer Last Proving 2939.3 API Gvt Obs 36.3 54 F API Gty aQ 60 F" 36.8 PrevFactDalaV 10/11/2019 ABM Temp 36 F Meter No. MTR 4000 6 o Table 24 16 for LPG's. Remarks LINE METER DATA MASTER METER DATA METER FACTOR THIS DATE 1.002569637 Meter Make Smith Size Model 3" E3 -S1 Temp VES Comp Meter Make Smith Size 3" Model E3 -S1 S/N 1924FI0080 S/N 137944 Includes CPL Press PSIG Runt Run 2 Run 3 Run 4 Run 5 I Meter Reading In Pulses 41966 48840 52361 41966 42028 2 Pulses/Bbl./Gal 8400 8400 8400 8400 8400 3 Gross Metered Vol 1 +2 4,995952381 5.814285714 6.233452381 4.995952381 5.003333333 4 Temperature F° 88.6 88.5 88.7 88.7 88.7 5 CTL 0.9861 0.9862 0,9861 0.9861 0.9861 6 Pressure, PSIG 19 19 19 19 19 7 CPL 1,00011 1.00011 1,00011 1.00011 1 .0001 1 8 Master Meter Factor 0.9994 0.9994 0.9994 0.9994 0.9994 9 Corr Metered Vol 3x5x7x8 4.924094328 5.731238509 6.143795052 4.924094328 4.931369119 Run 1 Run 2 Run 3 Run 4 Run 5 10 Meter Re istration 41853 48713 52213 41853 41916 11 Pulses/Bbl./Gal 8400 8400 8400 8400 8400 12 Gross Metered Vol 10 • 11 4.9825 5.799166667 6.215833333 4.9825 4.99 13 Temperature F° 89.6 89.6 89.6 89.6 89.6 14 CTL 0.9856 1 0.9856 0.9856 0.9856 0.9856 15 Pressure, PSIG 30r5+716630329 30 30 30 30 16 CPL 1.0001700017 1.00017 1,00017 1.00017 17 Corr. Meter Vol. 12x14%16 4.911586828 6.127366809 4,911586828 4.918980084 18 Meter Factor 9 + 17 1.0025465292555383 1.002681126 1.002546529 1.002518619 19 K Factor 11 i 9 20 Consecutive Difference -0.000346529363E-06 0.000125743 -0.000134597 -2.7911E-OS Big G Tech I CPL I I CIL Customer Liquid correction for Liquid correction for Witness pressure from API 1101 Temperature from Witness Appendix B, Table II also ASTM D-1250, Table Witness API 2531 Appendix A. Fig 6 o Table 24 16 for LPG's. Remarks Regg, James B (CED) From: Regg, James B (CED) I I z��zo Sent: Tuesday, April 28, 2020 4:30 PM j To: Taylor Wellman Subject: RE: Beaver Creek Unit Missing Meter Performance Reports Informal Discussion Follow Up Were you able to find any info about the baseline meter factor being used at Beaver Creek? I am working on the closeout of the notice of violation and would like to have this info before wrapping it up. Thank you. Jim Regg Supervisor, Inspections AOGCC 333 W.7'h Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or iim.regg@alaska.gov. From: Taylor Wellman <twellman@hilcorp.com> Sent: Wednesday, March 18, 2020 7:18 PM To: Regg, James B (CED) <jim.regg@alaska.gov> Cc: Dave Wilkins <dwilkins@hilcorp.com>; Holly Tipton <hotipton@hilcorp.com> Subject: Beaver Creek Unit Missing Meter Performance Reports Informal Discussion Follow Up Mr. Regg, Enclosed you will find the following information: - Proving reports submitted via email dated: 10/14/19 (initial) and 1/16/20 - Meter Factor Control Charts for both 10/14/19 and for 1/16/20. - Batch Summaries: You were correct that these were not included in the original submissions. Please find these LACT Tickets from the day prior to the 1/16/20 prove. For the 10/14/19 prove, since this was the initial prove there aren't tickets prior to this date. I can provide any days later than this if you would like. Items to be submitted to you: - Documentation on the baseline meter factor used during the initial proving on 10/14/19. - Written explanation of how we will prevent a recurrence of this violation. If I have missed any other pieces of information that you would like to see please let me know and they will be provided. Thank you, Taylor Taylor Wellman M A S T E R L I N E M E T E R Master Meter Proving Report T Beaver Creek LACT BLDG ( OI IS Creek LACT MTR4000 Bio G Electric & Enaineerina. Inc. Previous - Current Factor Difference 0.0005433544 Totalizer This Date 24864.6 Product crude Rate 300 92m Previous Factor 1.0025 Date 1/16/2020 Report No. A Totalizer Last Proving 3807.2 API Gvt Obs 39.7 86.8 API GLy @ 60 P 37.5 Prev Fact Date 701142019 ABM Temp '-15 F Meter No. MTR 4000 LINE METER DATA MASTER METER DATA METER FACTOR THIS DATE 1.002058648 Meter Make Smith I Size I Model Y. E3 -S1 Temp Comp VES Meter Make Sir th Size 3" Model E3 -S1 SIN 1924F70080 SM 137944 Includes CPL Press PSIG Run 1 Run 2 Run 3 Run 4 Run 5 1 Meter Reading In Pulses 42045 42135 42006 42350 42123 2 Pulses / Bbl./Gal 8400 8400 8400 8400 8400 3 Gross Metered Vol 1 <2 5.005957143 5.016071429 5.000714286 5.041668667 5.014642857 4 Tem re, F" 85.5 85.9 85.9 85.9 85.8 5 CTL 0.9875 0.9873 0.9873 0.9873 0.9873 6 Pressure. PSIG 16 16 16 16 16 7 CPL 1.00009 1.00009 1.00009 1.0009 1.00009 8 Master Meter Factor 0.9994 0.9994 0.9994 0.9994 0.9994 9 Corr Metered Vol 3x5x7x8 4.940268089 4.949841347 4.934888973 4.979128103 4.945431637 Run 1 Run 2 Run 3 Run 4 Run 5 10 Meter Registration 419% 42036 41908 42251 42023 11 pukes / Bbl./Gal 8400 8400 8400 8400 8400 12 Gross Metered Vol 10+ 11 4.984642857 5.004285714 4.989047619 5.029880952 5.002738095 13Temperature, F° 88.3 86.4 86.4 86.3 86.3 14 CTL 0.9871 0.9871 0.9871 0.9871 0.9871 15 Pressure, PSIG 27.4 27.2 27.2 27.3 27.3 16 CPL 1.00015 1.00015 1.00015 1.00015 1.00015 17 Corr. Meter Vol. 12x14x16 4.930951496 4.940471388 4.925427608 4.965740237 4.938943504 18 Meter Factor 9 t 17 1.001889614 1.001896572 1.001879911 1.002698046 1.001921086 19 K Factor 11 +9 20 Conseau ve D'drereaca 0.000710386 6.95825E-05 -1.66609E-05 0.000816135 -0.000774961 ncn vcuaero r rllCa rase I KUL ANu CURNtCI Big G Tech I CPL I I CTL Customer ( Liquid correction for Liquid correction for Witness ui, }� �I,iQO D U C`t pressurefrom API 1101 Tem pasture from wares Appendix B, Table II also ASTM D-1250, Table WSness API 2531 Appendix A. Fig 6 o Table 24 Remarks Nett/ / NI,Tc>! 71 1. 902 Foy/7/L4 t4r.j tole/'ancP M A S T E R L N E M E T E R Master Meter Proving Report T Beaver Creek LACT BLDG O Beaver Creek LACT MTRd000 7k-Aw Bia G Electric & Enaineerina. Inc. Previous - Current Factor Difference -0.0003696373 Totalizer This Date 3607.2 Product crude Rate 300 gpm Previous Factor 1.0022 Date 10/14/2019 Report No. A Totalizer Last Proving 2939.3 API Gvt Obs 36.3 54 F API Gty @ 60 F° 36.8 Prev Fact Date ` ^ 10/11/2019 ABM Temp 36 F Meter No. MTR 4000 Witness Appendix B, Table II also ASTM D-1250, Table Witness API 2531 Appendix A. Fig 6 or Table 24 LINE METER DATA 16 for LPG's. MASTER METER DATA METER FACTOR THIS DATE 1.002569637 Meter Make Smith Size I Model 3" E3 -S1 Temp YES Comp Meter Make Smith Size 1 3" Model 1 E3 -S1 SIN 1924F10080 SIN 137944 Includes CPL Press PSIG Run 1 Run 2 Run 3 Run 4 Run 5 1 Meter Reading In Pulses 41966 48840 52361 41966 42028 2 Pulses / Bbl./Gal 8400 8400 8400 8400 8400 3 Gross Metered Vol 1 + 2 4.995952381 5.814285714 6.233452381 4.995952381 5.003333333 4 Temperature, F° 88.6 88.5 88.7 88.7 88.7 5 CTL 0.9861 0.9862 0.9861 0.9861 0.9861 6 Pressure, PSIG 19 19 19 19 19 7 CPL 1.00011 1.00011 1.00011 1.00011 1.00011 8 Master Meter Factor 0.9994 0.9994 0.9994 0.9994 0.9994 9 Corr Metered Vol 3x5x7x8 4.924094328 5.731238509 6.143795052 4.924094328 4.931369119 Run 1 Run 2 Run 3 Run 4 Run 5 10 Meter Registration 41853 48713 52213 41853 41916 11 Pulses/ BbUGal 8400 8400 8400 8400 8400 12 Gross Metered Vol 10 + 11 4.9825 5.799166667 6.215833333 4.9825 4.99 13 Temperature, F° 89.6 89.6 89.6 89.6 89.6 14 CTL 0.9856 1 0.9856 0.9856 0.9856 0.9856 15 Pressure, PSIG 30 30 30 30 30 16 CPL 1.00017 1.00017 1.00017 1.00017 1.00017 17 Corr. Meter Vol. 12xl4xl6 4.911586828 5.716630329 6.127366809 4.911586828 4.918980084 18 Meter Factor 9 + 17 1.002546529 1.002555383 1.002681126 1.002546529 1.002518619 19 K Factor 11+9 20 Consecutive Difference -0.000346529 1 8.85363E-06 1 0.000125743 1 -0.000134597 -2.7911 E-05 THE ABVVE IS CERTIFIED 1U CE 1KUE ANU UUKKEC I Big G Tech I CPL I I CTL Customer Liquid correction for Liquid correction for Witness pressure from API 1101 Temperature from Witness Appendix B, Table II also ASTM D-1250, Table Witness API 2531 Appendix A. Fig 6 or Table 24 16 for LPG's. Remarks DPM Standard Summary Report TechnipFMC 1pFMC Final 7ecnnFlow Research and Teat Center 1602 Wagner Ave. Erie, PA 166104444 Report Name 1924E10080-LFMV System-LFHeavyFluid-2019-08-07-001 model Numbar E3 -S1 est gate 8/7/2019 Moser Sire 3in (76mm) Faca:_y TechnipFMC Erie PA. USA enal Nuynbar 1924E10080 Fl ,,d Name LF Heavy Fluid 1&F 200 p/gal 61 ean.__°: 0.021% SD Number 957211 �-;nwronmenlal DaSe S.�9o0 T mneraW2 Ranoe_;F1 f2e7atiye_rg_mlcil•�RangeT°"2 171111111.11 70.3-70.3F 64.8%-64.8% Erieroaj 71.0-71,0F 83-0%-83.0% AFF a _ - 502152MP Fumcb9,al To, �r7PgingTa9 Pc)—g usfumer Name 1e91 Plan ID NR NR NR Measurement Technol 121 Capital BLVD Hou TPT-002044-001299 Tes Point un IN—19:03 �i P IG 7rn F D CPM VI 36 c l wPV i 1 SVrr ai 1,tF� ! I RetR?? mea( Mfm R n f^' 1 2 3 1-5 8-10 11-15 38.4 41.3 43.8 89.0 88.4 89.4 384,86 318.76 254.80 36.78 38.44 36.46 24.725 24.721 24.722 24318 24,720 24.727 199.949 199.994 I 200.035 1 0.036 0.017 0.026 1.00025 1.00003 1 0.99983 VG K m 109.993 Reids mar%ed wah a Rec H.+ ,::, rhes are NGl covered by the N LAP a:: - 1_ Ijlo Signatures e9, 1_echnlc:aq R&D Mechanical Technician 8/712019 Kevin Ford /annruve}Y 3:�qD_ - Mechanical Engineer 8!7/2019 Robert Carson T— �. ��J � "t U�,1`�w Ji ii•1Cu' i \i�P4J. w.rV e<=�., <a Fnnfeq Name Tn:o Ref: FMTD001L— Definition of Symbols, Abbreviations and Principles of Calculations. Available upon request from Flow Manager or Signatory. Date Thk ExMmM ane an eu bdnrmnbn yirelnne Mrein ary Oe wnfid. aM pecNZlw p.eryrty nr76 M FMC pk.ane mar no. M rapnEuceC. dined .er maea publle in any manor wiOgW Ote pb..vnrw: n rMan a W OntNbn by TppMpFML pk. .4MUSN'1924ElMOVW91Iemal+ML1M..1Rtl0001 F-hol` LkMev 06 (07119) Mr. t(.r Mf- ti'r {'Invntl heIIrrrt I, .: rr M, c,r V.I irI.71 5 )31_385:1_' Y tW `, 14. 11"L(A; I � 4--[4' G'225 I 4 9Z4C-I 28 IL Mce f<-..;:nwe Rin i R., [ 0,rl 3 Rm'I 1 ft.n 5 1 840;_ aP'1E eECO SIaL 64Y 412-.' 64"G dEI'-0 I F_Isss BLI rr .. _-_ ces McWrorf :';I b_II a9e�h b]99i5f.,i,57 G2'58�3833 4 9K <95 3 I_rreerawla F _ 6Lb Bb.G G°c 55 (z 1 A IL 0 99'__' 0 91cG C 5G B 995E v 55_5 15 Pr, m -u PSIG l0 ;U 80 80 i6 :, F'_ 1UVO17 t]FVI( ICO,1 r;7C;1"i - C,, H _t, :'a R>'' E i.1_ :�E2tl 3J32J ?7S6fidJ9 4 NIi558b25 7_I1t_ '.636Ub i; OGu 12574? a juji nIQ. r I� L'tK I IYItU IQ bt tKur ANU I UKKI, :I pay w 3e (I a"'41Afw 5,� i r Hilcorp Alaska LLC Beaver Creek Oil Ili lo.rp Atuska vune'rrna..v r. k. ,. 44050 Reviewed by: Meter Number Tlcket # bbl count end bbl count start bbl metered CPR Temp Comp. meter factor gross bbls BS&W bbl 5&W gross bbl bbl 5&W net bbl Notes: Cathy Marshall 1/15/2020 400D 44050 24,464.4 24,230.1 234.3 0.98712 231.2816031 1.0026 23L8829 0.100% 0.2319 231.8829 0.2319 231.6511 Psi 30.00000 API 36.00000 Rel Density 0.84478 Temp 87.200D0 CTL— CPL_ f� ;80 fw "g foo Fx`f X80 � O � 8 C e m 2m5 °:R P m ags / t\\ CD � k�! ) Carlisle, Samantha J (CED) From: Taylor Wellman <twellman@hilcorp.com> Sent: Thursday, March 12, 2020 3:40 PM To: Carlisle, Samantha I (CED) Subject: RE: [EXTERNAL] OTH-20-002 informal review Samantha, That time would work great. There will be 3 from the Hilcorp side attending: Dave Wilkins, Holly Tipton and myself. Thank you, Taylor Taylor Wellman Hilcorp Alaska, LLC — Kenai Ops Manager Office: (907) 777-8449 Cell: (907) 947-9533 Email: twellman@hilcorp.com From: Carlisle, Samantha I (CED)[mailto:samantha.carlisle@alaska.gov) Sent: Thursday, March 12, 2020 10:59 AM To: Taylor Wellman <twellman@hilcorp.com> Subject: RE: [EXTERNAL] OTH-20-002 informal review How about Wednesday at 10:30am? Thanks, Samantha Carlisle Executive Secretary III (907) 793-1223 From: Taylor Wellman <twellman@hilcorp.com> Sent: Wednesday, March 11, 2020 3:20 PM To: Carlisle, Samantha I (CED) <samantha.carlisle @alaska.gov> Subject: RE: [EXTERNAL] OTH-20-002 informal review Samantha, Next week would work best for us if it works for you side. Possible timeslots: - Tues (3/17) afternoon - Wed (3/18) morning - Thur (3/19) excluding 1-2pm - Friday (3/20) afternoon Thank you, Taylor Taylor Wellman Hilcorp Alaska, LLC—Kenai Ops Manager Office: (907) 777-8449 Cell: (907) 947-9533 Email: tweliman@hilcorp.com From: Carlisle, Samantha J (CED)[mailto:samantha.carlisle@alaska.aov] Sent: Tuesday, March 10, 2020 10:04 AM To: Taylor Wellman <twellman@hilcorp.com> Subject: [EXTERNAL] OTH-20-002 informal review Taylor, The AOGCC has received your request for an informal review regarding the above matter. We can schedule for this week or next, what availability does Hilcorp have to come to our offices for this? Thank you, Samantha Carlisle Executive Secretary III Alaska Oil aid Gas Conservation Commission 333 West 7111 Avenue Anchorage, AK 99501 (907) 793-1223 CONFTDEN77A117Y NOI ICI'r This to -mail nwssage, including any attachments, contains infurnwtion from the .Alaska Oil and Gas Conservation Commissirnn (AOGC'C), Statr ,N Alaske and Is for the sole use of the intend, -d recip,ionf(s). 11 m.ry ci?ntain roNkdential tmd�or priyilegai hi&innatiou. I'he unauthorized rtts'icw, use of disclosuro of such information may violate state or fedm�al law. If you m c ,w uuintendod recipient of this e -marl, plw3c dekete it, IVithuuL Iustsaving or 1ornvarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Samantha Carlisle at i<Al?) 98-1.223 or Shim_antha.Carlislr(<'+alatikn„. The infonnation contained in this e-mail message is confidential information intended only for the use of the recipient(s) named above. In addition, this communication maybe legally privileged. If the reader of this e-mail is not an intended recipient, you have received this e-mail in error and any review, dissemination, distribution or copying is strictly prohibited. If you have received this e-mail in error, please notify the sender immediately by return e-mail and permanently delete the copy you received. While all reasonable care has been taken to avoid the transmission of vimses, it is the responsibility of the recipient to ensure that the onward transmission, opening or use of this message and any attachments will not adversely affect its systems or data. No responsibility is accepted by the company in this regard and the recipient should carry out such virus and other checks as it considers appropriate. Hilcorp Alaska, LLC Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 100 Anchorage, AK 99503 March 4, 2020 Jessie L. Chmielowski, Commissioner Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, AK 99501-3572 Re: Docket Number: OTH-20-002 Notice of Proposed Enforcement Action Missing Meter Performance Reports Beaver Creek Unit Dear Commissioner Chmielowski: Hilcorp is in receipt of the Commission's Notice of Proposed Enforcement Action dated March 2, 2020 concerning the provisions required under the AOGCC conditional approval letter dated October 15, 2019. Pursuant to the Commissioner's Notice and 20 AAC 25.535(c), Hilcorp Alaska hereby requests an informal review of the matter. Should you have any additional questions, please contact Taylor Wellman, Kenai Asset Team Operations Manager at (907) 777-8449. Sincerely, David Wilkins Senior Vice President Hilcorp Alaska, LLC MAR 4 2020 AOGCCi THE STATE ALASKA GOVERNOR \41Kh DUNI.r.AVY March 2, 2020 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 0640 0003 5185 7028 Mr. David Wilkins Senior Vice President Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Docket Number: OTH-20-002 Notice of Proposed Enforcement Action Missing Meter Performance Reports Beaver Creek Unit Dear Mr. Wilkins: Alaska Oil and Gas Conservation Commission a33 Nest Seventh 4v:;,. nc,: Ancnompe- Ala,9 o 99501 35'2 Main', Y0i.2!9 141'3 Fax 907:27n.7 y 42 wNrci.apgr_COIgSka ACv Pursuant to 20 AAC 25.535, the Alaska Oil and Gas Conservation Commission (AOGCC) hereby notifies Hilcorp Alaska, LLC (Hilcorp) of a proposed enforcement action. Nature of the Apparent Violation or Noncompliance (20 AAC 25.535(b)(1)). Hilcorp has violated the provisions of the conditional approval letter for the Beaver Creek Unit custody transfer oil measurement equipment. Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)). Custody transfer measurement equipment for Beaver Creek Unit oil was conditionally approved by AOGCC on October 15, 2019. Requirements imposed include the meter prove frequency, notification to AOGCC for opportunity to witness meter proves, required actions before making changes to the custody transfer measurement equipment, and reporting obligations following meter proves. Condition 2 of the approval letter requires proving of the meters at a frequency dependent on the monthly rate of oil production. Condition 2 also requires that Hilcorp provide results of each meter prove within 7 days, including (i) prove reports, (ii) batch summaries, and current meter curve or meter factor control charts with specified control limits used to determine when to initiate maintenance or corrective actions. Hilcorp has failed to submit meter performance reports for October 2019 and January 2020.' Proposed Action (20 AAC 25.535(b)(3)). `U k For violating provisions of the October 15, 292U conditional approval letter for Beaver Creek Unit oil custody transfer measurement equipment, the AOGCC intends to impose a civil penalty on Hilcorp ' Meter proves are required quarterly if oil production rates less than 30,000 barrels per month; otherwise, meter proves are required at intervals not exceeding 45 days. Initial oil meter proves at Beaver Creek Unit occurred October 14, 2019. Oil rates have been below 30,000 barrels per month in November 2019 through January 2020. Docket Number: OTUI-20-002 March 2, 2020 Page 2 of 2 under AS 31.05.150(a) in the amount of $30,000. In determining the amount of the penalty, AOGCC has considered the criteria in AS 31.05. 1 50(g), with emphasis on the extent to which Hilcorp was acting in good faith in attempting to comply, the extent to which Hilcorp acted in a willful or knowing manner, the extent and seriousness and actual or potential threat to public health or the environment, injury to the public, the need to deter similar behavior by Hilcorp and others similarly situated at the time of the violation or in the future, and Hilcorp's history of compliance issues, particularly noncompliance similar to the Beaver Creek Unit oil meter violation. In addition to the imposed civil penalty, AOGCC intends to require Hilcorp to provide - a detailed written explanation that describes how it intends to prevent recurrence of this violation; and - the missing meter performance information within 10 days of this order. As an operator involved in an enforcement action you are required to preserve documents concerning the above actions until after resolution of the proceeding. Rights and Liabilities (20 AAC 25.535(6)(4)) Within 15 days after receipt of this notification — unless the AOGCC, in its discretion, grants an extension for good cause shown — Hilcorp may file with the AOGCC a written response that concurs in whole or in part with the proposed action described herein, requests informal review, or requests a hearing under 20 AAC 25.540. If a timely response is not filed, the proposed action will be deemed accepted by default. If informal review is requested, the AOGCC will provide Hilcorp an opportunity to submit documentary material and make a written or oral statement. If Hilcorp disagrees with the AOGCC's proposed decision or order after that review, it may file a written request for a hearing within 10 days after the proposed decision or order is issued. If such a request is not filed within that 10 -day period, the proposed decision or order will become final on the I I" day after it was issued. If such a request is timely filed, the AOGCC will hold its decision in abeyance and schedule a hearing. If Hilcorp does not concur in the proposed action described herein, and the AOGCC finds that Hilcorp violated a provision of AS 31.05, 20 AAC 25, or an AOGCC order, permit or other approval, then the AOGCC may take any action authorized by the applicable law including ordering one or more of the following: (i) corrective action; (ii) suspension or revocation of a permit or other approval; and (iii) imposition of penalties under AS 31.05.150. In taking action after an informal review or hearing, the AOGCC is not limited to ordering the proposed action described herein, as long as Hilcorp received reasonable notice and opportunity to be heard with respect to the AOGCC's action. Any action described herein or taken after an informal review or hearing does not limit other actions the AOGCC may take. Sincerely, re Price mmissioner cc: Phoebe Brooks -• Domestic Mail C � For delivery iniorrt Lill 0 Priority Mall Express® Adult Signature on, Certified Mail Fee 0 Registered Mail Restricted Certified Mail® Delivery Certified Mail Restricted Delivery t1l mra Services& Fees (check a c[ edd Me w apprpp n) Merchandlss 50 Return Receipt Oarcwpy) $ M O ROWrn Receipt (eledmnk) $ 0 ]G fflel Mel Randdetl Delh , $ ❑Atlutt Signatu,e Requlrea E C:3 Postage S $ -D Total Postage and Fees O S tI1 Set d O SYree(eiiifApt lY ., or Bol Nc t` .�iSCM %Al7t�201 ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space Dermits. ctf2P f-IiL)q5KI-1 LLC ►rR W )Lk1A(s �,i 38)0 CtNvEr—PO/NT Ale 1900 /MCH60,4n �- , KIK g95D 3 9590 9402 4351 8190 1883 52 7 015 0(090 DM3 -)785 7Daz9 PS Form 38111 July 2015 PSN 7530-02-000-9053 Postmark Hera Agent 8 —T J� Addre Receiv by /l�fTaYlAnre/! 9)/JP ,F///C3of I/ D. Is delivery addressD. Is delivery address different from Item 17 ❑ Yes Item 17 ❑ Yes If YES, enter delivery address below: 0 No Service Type 0 Priority Mall Express® Adult Signature 0 Registered Malpe Adult Signature Restrlded Delivery 0 Registered Mail Restricted Certified Mail® Delivery Certified Mail Restricted Delivery 0 Return Receipt for Collect on Delivery Merchandlss Collect on Delivery Restricted Delivery 0 Signature Confinnadonra Insured Mail 0 Signature Confirmation Insured Mail Restricted Delivery Redrided Delivery Domestic Return Receipt Regg, James B (CED) From: Joe Kaiser <jkaiser@hilcorp.com> Sent: Friday, September 27, 2019 5:43 PM To: Regg, James B (CED) Cc: Cathy Marshall; Bo York; David Bell Subject: RE: [EXTERNAL] RE: RE: Beaver Creek Unit - Oil LACT Meter BLM Application Attachments: 1924E10080 Meter Test Report from TechnipFMC.PDF; NMi TC7302 Rev 6 microLoad.pdf Mr. Regg: Please see our responses below to your questions. Responses are in RED. Currently the meter is installed at BCU. It is currently being commissioned. I would expect an official proving next week. Notifications will be provided. If you have further comments or question, please contact me. Joe Kaiser 0: (907) 777-8393 C:(907)952-8897 ikaiser(&hilcorp com From: Regg, James B (CED) [mailto:jim.regg@alaska.gov] Sent: Friday, September 13, 2019 2:37 PM To: Joe Kaiser <jkaiser@hilcorp.com> Cc: Cathy Marshall <cmarshall@hilcorp.com>; Bo York <byork@hilcorp.com>; David Bell <dbell@biggelectric.com> Subject: RE: [EXTERNAL] RE: RE: Beaver Creek Unit - Oil LACT Meter BLM Application Couple things needed: - Factory certification report for the PD meter Please see attached Meter Test Report from TechnipFMC attached for your review. - Serial #s: o PD meter (including backup meter if such exists) 1924E1008. We have no back up. o Pulse transmitter CT1291909 o Temperature sensor and transmitter The temperature sensor is an RTD, so no serial number. The Transmitter is integral to the accuload flow computer serial: WD247S. o Flow Computer P8000002130 It appears the micro Load flow computer touches on the requirements in API MPMS 21.2 for a custody transfer measurement system but more details are needed o memory—capacity; volatile or non-volatile; retention time for information The memory of the microload.net flow computer is non-volatile and is verified as such by an independent third -party (certificate attached). The memory is retained indefinitely in the unit even if power is interrupted. The last display value on the microload.net screen is retained by battery backup for up to fifteen minutes so the operator can note the value even though the displayed value is also stored in the non-volatile memory. The total capacity for the unit is approximately 1,000 batches but will confirm the exact MB of useable memory for batches not to include the memory required for the API table and operating protocols. o security— input data, algorithms used to calculate quantities, and memory • Security: Input data consists of temperature from a transmitter located in a thermowell, pressure from a transmitter both located downstream of the meter. The microload is pre- programmed with API table 5B for the purposes of temperature compensation. The microload also takes in a pulse count from a universal pulse transmitter that is part of the meter assembly. • Algorithms: Pulse input conforms to level A security (API 5.5) if applicable. All internal algorithms are fixed in non-volatile (program) storage and verified with a checking mechanism, and multiple independent bodies have validated the accuracy / conformance of the algorithms to API published standards, et. al.. All data storage is protected by checksum. • Memory: Program and data storage is in NAND flash and logically segregated. All program memory is secure; only via a unique, factory -generated license that is specific to the device can the firmware program be modified. Data memory is secured via checksum; configuration parameter memory is separate and protected, as well as the transaction log data, which is protected on a record -by -record basis. o UPS/battery backup • There is no uninterrupted power supply at Beaver Creek. Since the memory is non-volatile, there's a case for not needing it. The flow through the meter would stop as the pump would lose power as well. The discharge line to the tanker truck will remain packed with crude until power is restored and the pump restarted. UPS batter backup would typically only be a requirement for continuous operations (e.g. pipeline with microFlow.net flow computer), not for batching operations such as with the microLoad.net preset batch controller. The power supply at Beaver Creek is via Capstone natural gas generator that is backed up by CAT natural gas generators. Previously when power was lost at Beaver Creek power is restored within 5-10 minutes. On rare occasion it will take 20-30 minutes if some troubleshooting has to occur. Describe how Hilcorp plans to track meter factors consistent with API MPMS o establishing a baseline meter factor (or meter curve) o current to previous meter factor comparison o current to baseline meter factor comparison • Hilcorp will establish a baseline meter factor (or meter curve). Since a new meter will be installed at Beaver Creek with a different piping configuration from the factory proof, Hilcorp will establish and track a baseline meter factor using a spreadsheet to determine when the meter factor has drifted out of tolerance in accordance with 43 CFR §3174.10. The meter factor or meter curve will be tracked on a spreadsheet documenting the meter factor for each proving run with a "warning limit" set at 0.15% and a fail if the meter factor varies by 0.25%. Folloing each meter proving event, AOGCC will be emailed a copy of the Meter Factor Control Charts w ich track the most recent prove meter factor against the master curve and the previous meter factor per API MPMS Chapter 13. Meter prove frequency is unclear. The application includes the following statement: prove monthly if oil production "exceeds 30,000 bbls per month although it is currently below that rate". API MPMS Chapter 4.5 (Master Meter Prover), Section 6 specifies several criteria including rate deviations that dictate the proving frequency for a line meter. We received information from Big G Electric regarding their master meter, including a proving procedure that appears to be consistent with the API standard. The Big G procedure notes a proving frequency of every 3 months absent other initiating events. Is that Hilcorp's plan? o Correct, Hilcorp's plan is to be able to prove on a monthly basis as the rate of production is expected to exceed 30,000 BBLS per month shortly. If the production rate remains below 30,000 BBLS per month, proving will be quarterly per 43 CFR §3174.11 (d) "Minimum Proving Frequency". Jim Regg Supervisor, Inspections AOGCC 333 W.7'h Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or im.reggPalaska.gov. From: Joe Kaiser <ikaiser@hilcorp.com> Sent: Friday, September 13, 2019 7:41 AM To: Regg, James 8 (CED) <Iim.regg@alaska.gov> Cc: Cathy Marshall <cmarshall@hilcorp.com>; Bo York <bvork@hilcorp.com> Subject: RE: [EXTERNAL] RE: RE: Beaver Creek Unit - Oil LACT Meter BLM Application Mr. Regg, We will notify AOGGCC of the functional check of the measurement system. Thank you, Joe Kaiser 0 (907)777-8393 C: (907) 952-8897 ilzaisei C@iiilcorp.com From: Regg, James B (CED) [mailto:iim.reeg@alaska.gov] Sent: Thursday, September 12, 2019 4:21 PM To: Joe Kaiser <Ikaiser@hilcorp.com> Subject: [EXTERNAL] RE: RE: Beaver Creek Unit - Oil LACT Meter BLM Application AOGCC requests at least 24 hour notice for opportunity to witness the functional check of the measurement system once installed and ready for use (prior to placing in service). Jim Regg Supervisor, Inspections AOGCC 333 W.71h Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or iim.regg@alaska.gov. From: Joe Kaiser <Ikaiser@hilcorp.com> Sent: Tuesday, September 10, 2019 1:11 PM To: Regg, James B (CED) <Iim.regg@alaska.gov> Cc: Bo York <bvork@hilcorp.com>; Donna Ambruz <dambruz@hilcorp.com> Subject: RE: RE: Beaver Creek Unit - Oil LACT Meter BLM Application Mr. Regg: This message is to provide an update on the Beaver Creek Unit — Oil LACT Meter Install. The Authorized Officer BUM requires Hilcorp Alaska by written order to have a functioning Oil LACT meter by October 15th, 2019. Due to delays in shipment. The LACT unit arrived in Soldotna today and will be delivered to the field as soon as practical. Over the coming weeks, Hilcorp will install this meter to meet the written order as approved in the application previous sent on June 4th, 2019. If you have any questions or comments, please contact me. Joe Kaiser 0:(907)777-8393 C: (907) 952-8897 ikaiser@hilcom.com From: Joe Kaiser Sent: Tuesday, July 2, 2019 9:55 AM To: 'Regg, James B (CED)' <iim.regg@alaska.gov> Cc: Bo York <bvork@hilcorp.com> Subject: RE: [EXTERNAL] RE: Beaver Creek Unit - Oil LACT Meter BLM Application Mr Regg, I wanted to send out a reminder before the Holiday weekend. Would you like to set up a time to discuss the Beaver Creek LACT Meter Application? My concern is that all the equipment has been order based on the BLM Approval. The fabricator is expected to be calibrating this meter within the next couple weeks (I will provide the 1 week notice by AOGCC regulations). Once calibrated the fabricator (Measurement Technologies Inc.) will be fabricating the skid in late July. The skid is expected to be shipped the V week of August and installed the last two weeks of August for installation to meet the September 11t Deadline by BLM Written Order. Joe Kaiser 0:(907)777-8393 C: (907) 952-8897 ikaiserghilcorpcom From: Regg, James B (CED) [mailto:iim.regg@alaska.gov] Sent: Thursday, June 20, 2019 10:56 AM To: Joe Kaiser <Ikaiser@hilcorp.com> Subject: [EXTERNAL] RE: Beaver Creek Unit - Oil LACT Meter BLM Application am continuing to review the information sent. Jim Regg Supervisor, Inspections AOGCC '333 W.Th Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907- 793-1236 or iim.re¢e alaska.eov. From: Joe Kaiser <ikaiser@hilcorp.com> Sent: Tuesday, June 18, 2019 10:05 AM To: Regg, James B (CED) <5m.regg@alaska.gov> Cc: Bo York <bvork@hilcorp.com>; Donna Ambruz <dambruz@hilcorp.com> Subject: RE: Beaver Creek Unit - Oil LACT Meter BLM Application Mr. Regg, It has been a couple weeks. I checking in with you to understand any questions you may have about the BLM Approval for the Beaver Creek LACT meter. Would you like to set up a meeting to discuss? I plan to submit all the info you require by the end of this month. All of this equipment has been ordered and by Written Order from BLM, we are required to be utilizing this meter by September 111, 2019. Thank you, Joe Kaiser 0:(907)777-8393 C:(907)952-8897 ikaiserftilcor .com From: Joe Kaiser Sent: Tuesday, June 4, 2019 5:46 PM To:'jim.regg@alaska.gov' <iim.regg@alaska.gov> Cc: Bo York <bvork@hilcorp.com>; Donna Ambruz <dambruz@hilcorp.com> Subject: Beaver Creek Unit - Oil LACT Meter BLM Application Mr. Regg, As we discussed on the phone, please see attached BLM Application and approval to install an Oil LACT Meter on lease at Beaver Creek Unit. I'd like this email and attachment to be used for discussion purposes. Any questions you have please let me know, and we will submit a more formal AOGCC package. I am willing to sit down in person and discuss any questions or concerns. For you information, BLM (authorized officer) has new requirements which are 43 CFR Ch. II Subpart 3174. They are very specific as to which equipment is required and references the AN MPMS chapters specifically. I have taken the data sheet equipment and compiled them in the list below. I also attached the sheets for your reference, highlighting the exact models, flowrates, pressures, etc. Please review, then let's sit down and have a discussion about what AOGCC would like to see for the application. Thank you Mr. Regg, Joe Kaiser I Operations Engineer IHilcm-p Alaska, LLC 0: (907) 777-8393 1 C: (907) 952-8897kL aiserPhilcorp.com 3800 Centerpoint Drive, Suite 1400 1 Anchorage, AI< 99503 The information contained in this e-mail message is confidential information intended only for the use of the recipient(s) named above. In addition, this communication may be legally privileged. If the reader of this e-mail is not an intended recipient, you have received this e-mail in error and any review, dissemination, distribution or copying is strictly prohibited. If you have received this e-mail in error, please notify the sender immediately by return e-mail and permanently delete the copy you received. While all reasonable care has been taken to avoid the transmission of viruses, it is the responsibility of the recipient to ensure that the onward transmission, opening or use of this message and any attachments will not adversely affect its systems or data. No responsibility is accepted by the company in this regard and the recipient should carry out such virus and other checks as it considers appropriate.