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Home My WebLink AboutCO 787CONSERVATION ORDER 787 Docket Number: CO -20-012 1. July 14, 2020 Hilcorp Alaska, LLC application for a Spacing Exception BRU 19RD 2. --------------- email 3. July 28, 2020 Notice of hearing, affidavit of publication, email distribution, mailings STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC for an order authorizing downhole commingling of production in the Beaver Creek Unit 19RD (PTD 219-188) well. IT APPEARING THAT: Docket Number: CO -20-012 Conservation Order No. 787 Beaver Creek Unit 19RD Development Gas Well Beluga Gas Pool Tyonek Gas Pool Kenai Peninsula Borough, Alaska October 1, 2020 1. By letter dated July 14, 2020, Hilcorp Alaska, LLC (HAK) requested authorization under 20 AAC 25.215(b) to commingle downhole production from the Beluga and Tyonek Gas Pools in the Beaver Creek Unit (BCU) 19RD (PTD 219-188) well. 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) tentatively scheduled a public hearing for September 3, 2020. On July 28, 2020, the AOGCC published notice of the opportunity for that hearing on the State of Alaska's Online Public Notice website and on the AOGCC's website, electronically transmitted the notice to all persons on the AOGCC's email distribution list and mailed printed copies of the notice to all persons on the AOGCC's mailing distribution list. On July 29, 2020, the AOGCC published the notice in the Anchorage Daily News. 3. No protest to the application or request for hearing was received. 4. Because Hilcorp provided sufficient information upon which to make an informed decision, the request can be resolved without a hearing. 5. The tentatively scheduled hearing was vacated on August 15, 2020, and the period for public comments closed on September 1, 2020. No public comments were received. FINDINGS: Hilcorp is the operator of the BCU, located onshore in the Kenai Peninsula Borough, Alaska. 2. The BCU 19RD development gas well was drilled in February 2020 and the initial perforations in the Tyonek Gas Pool (Tyonek) proved nonproductive. In April additional Tyonek sands were perforated and the well was brought into production at about 2.5 MMCFPD. 3. HAK has identified several sands in the Beluga Gas Pool (Beluga) to perforate in the subject well. HAK proposes to keep open existing perforations in the Tyonek Gas Pool (Tyonek) and add perforations in the Beluga to increase production rate, extend economic life, and improve ultimate recovery. Conservation Order No. 787 October 1, 2020 Page 2 of 3 4. Once the Beluga is perforated, HAK proposes to allocate production initially between the Beluga and Tyonek by assuming any increase over the current rate is from the Beluga. Thereafter, on an annual basis, HAK proposes to run a production log in the well to adjust allocation between the pools. CONCLUSIONS: 1. Commingling of production from the Beluga and Tyonek in the BCU 19RD will maximize ultimate recovery by extending the economic life of the well compared to producing the pools individually. 2. Hilcorp's proposed allocation methodology will ensure adequate allocation of production between the Beluga and Tyonek Gas Pools. NOW THEREFORE IT IS ORDERED: Downhole commingling of production between the Beluga and Tyonek Gas Pools in the NCU 19RD well is approved as follows: I. Initial production allocation shall be based on the difference between the current Tyonek- only production rate and the stabilized (after initial testing is completed) combined Beluga and Tyonek rate, with any increase in production assigned to the Beluga. 2. Thereafter, a well test of each individual producing reservoir interval shall be conducted at least once every 12 months, or as deviations in well performance dictate, to determine new production allocation factors for the pools in that well. 3. Other allocation methodologies may be approved administratively by the AOGCC should circumstances warrant. 4. Copies of all data used to determine the allocation factors shall be submitted to the AOGCC within 30 days of being of being collected. 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. &r Digitally signed by ¢ Jessie L. Jessie L. Chmielowski Chmielowski Dare: 2020. 10.01 gnoa at`� 12 25:02 -08'00' DONE at Anchorage, Alaska and dated October 1, 2020. Jeremy Dquany signed by Jeremy m. cna M. Price Date 2020 10,0' 13.:12-08'M' Jeremy M. Price Chair. Commissioner Daniel T. DrJaallyngnee by Daniel T. Seamount Jr. Sea mount, Jr. wt.:2o2°'°"' 121S:2fi Daniel T. Seamount, Jr. Jessie L. Chmielowski Commissioner Commissioner 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. P.O. Box 13557 Denver, CO 80201-3557 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 fl I� IZp� INDEXES STATE OF ALASKA ADVERTISING ORDER susmITINNO�T CE TO PUBLDIRSHERERTIFIED AFFIDAVITOFPUBAD RTIMENT.ITACHEDCOPY OF ADVERTISING ORDER NUMBER U AO-08-21-003 FROM: Alaska Oil and Gas Conservation Commission AGENCY CONTACT: Jody Colombie/Samantha Carlisle DATE OF A.O.AGENCY 7/28/2020 PHONE: 907 279-1433 333 West 7th Avenue 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 DISPLAY CLASSIFIED I— OTHER (Specify below) DESCRIPTION PRICE CO-20-012 Initials of who prepared AO: Alaska Non -Taxable 92-600185 SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WTTNATTACHED COPY OF ADYERTI$MENTTO: AOGCC 333 West 7th Avenue Anchorage, Alashn 99501 Pae I of I Total of All Pa es $ REF Tye I Number Amount Dare Commend 1 PVN VCO21795 2 AD AO-08-21-003 3 a FIN AMOUNT SY Act. Tem late PGM LGR Object FV DIST LIQ I 21 AOGCC 3046 21 2 3 4 5 P o' ame: Itle: Purchasing Authority's Signature Telephone Number . A.O. If and receivulo agency name must appear on all invoices and documents relating to this purchase. . The state is registered for tax free transactions under Chapter 32, IRS code. Registration number 92-73-0006 K. 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: 7/28/2020 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -20-012 Beaver Creek Unit, Beluga and Tyonek Gas Pools The application of Hilcorp Alaska, LLC (HAK) for an order in accordance with 20 AAC 25.215 authorizing the downhole commingling of production in the wellbore of the Beaver Creek Unit 19RD (BCU 19RD) well. HAK, by letter dated July 14, 2020, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order in accordance with 20 AAC 25.215 to authorize the downhole commingling of production from the Beluga and Tyonek Gas Pools in the BCU 19RD well. The AOGCC has tentatively scheduled a public hearing on this application for September 3, 2020, at 10:00 a.m. at 333 West 7`h 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 August 13, 2020. 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 August 14, 2020. If a hearing is requested, the COVID-19 virus may necessitate that the hearing be held telephonically. Those desiring to participate or be present at the hearing should check with AOGCC the day before the hearing to ascertain if the hearing will be telephonic. If the hearing is telephonic, on the day of the hearing, those desiring to be present or participate should call 1-800- 315-6338 and, when instructed to do so, enter the code 14331 followed by the # sign. Because the hearing will start at 10:00 a.m., the phone lines will be available starting at 9:45 a.m. Depending on call volume, those calling in may need to make repeated attempts before getting through. 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 September 1, 2020, except that, if a hearing is held, comments must be received no later than the conclusion of the September 3, 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 September 1, 2020. 4-- Je'remy 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 Colombie, Jody J (CED) From: Roby, David S (CED) Sent: Monday, July 27, 2020 2:55 PM To: Cody Terrell Cc: Colombie, Jody J (CED); Davies, Stephen F (CED); Boyer, David L (CED); Loepp, Victoria T (CED); Schwartz, Guy L (CED) Subject: RE: [EXTERNAL] Downhole commingling request of BCU 19RD Cody, Thanks for the additional information. This resolves my questions. Jody, Please add this to the docket file. Regards, Dave Roby 907-793-1232 CONFIDENTIALITYNOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of 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 Dave Roby at 907- 793-1232 or dave.robv@alaska.eov. From: Cody Terrell <cterrell@hilcorp.com> Sent: Monday, July 27, 2020 2:52 PM To: Roby, David S (CED) <dave.roby@alaska.gov> Cc: Colombie, Jody J (CED) <jody.colombie@alaska.gov>; Davies, Stephen F (CED) <steve.davies@alaska.gov>; Boyer, David L (CED) <david.boyer2@alaska.gov>; Loepp, Victoria T (CED) <victoria.loepp@alaska.gov>; Schwartz, Guy L (CED) <guy.schwartz@a laska.gov> Subject: RE: [EXTERNAL] Downhole commingling request of BCU 19RD Dave, The details below should answer the additional question you had regarding BCU 19RD. By allowing for commingling between the Beluga and Tyonek sands, Hilcorp will be able to produce sands from the Beluga that would otherwise be bypassed. Without approval to commingle waste would occur by leaving behind Beluga production that cannot be produced without commingling. If Hilcorp was to run a dual string well design to tap into the Beluga sands, you would lose out on many of the PNP opportunities later in life. This would be more wasteful because Hilcorp wouldn't want to jeopardize the good sands (like the one lower beluga sand we want to add) with some of the "wetter" looking ones above. s you would lose out on many of the PNP opportunities later in life because you wouldn't want to jeopardize the good sands (like the one lower beluga sand we want to add) with some of the "wetter" looking ones above. You would have to choose from the beginning what sands you'd want to add in the shorter string. Allowing for commingling as requested in Hilcorp's application would prevent any waste to occur. i The upper most Tyonek and lower mom,,, Beluga Sand that Hilcorp is targeting to coin ingle are very similar both geologically and from a reservoir characteristics standpoint. The targeted sands are within 100' TV Dss of one another and are at similar initial reservoir pressures and overall confining stresses (potential for sanding is roughly the same). The likelihood that large crossflow will occur is low, due to the similar initial reservoir pressures and permeability's (calculated from RHOB logs from a core to log relationship). In the event that they begin to crossflow, it would likely have little impact to the overall recovered reserves as pressures will drop/fluctuate across the sands, we will recover that "crossflowed" gas back once the pressure becomes low again. This changing contribution will be monitored with annual PLT logging, to allocate production. Additionally, due to the higher initial pressures in the reservoirs (measured from the GeoTap tool), the biggest pressure drop will be to surface. We have the data with the reservoir pressures to target "like for like" sands, so we are not opening low pressure sands with our high pressure sands and creating crossflow. The idea would be to target the high pressure sands until they are "blown down" to a level and then add the lower pressure sands later. Regards, Cody T. Terrell Landman Hilcorp Alaska, LLC Direct: 907-777-8432 Cell: 713-870-4532 From: Roby, David S (CED) [mailto:dave.robv@alaska.gov] Sent: Wednesday, July 22, 2020 11:24 AM To: Cody Terrell <cterrell@hilcorp.com> Cc: Colombie, Jody J (CED) <iodv.colombie@alaska.¢ov>; Davies, Stephen F (CED) <steve.davies@alaska.¢ov>; Boyer, David L (CED) <david.boyer2@alaska.tov>; Loepp, Victoria T (CED) <victoria.loepp@alaska.zov>; Schwartz, Guy L (CED) <auv.schwartz@a Iaska.Rov> Subject: RE: [EXTERNAL] Downhole commingling request of BCU 19RD You can just submit an email with the additional information and we'll add it to the record. No need to resubmit the application. Dave Roby 907-793-1232 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 Dave Roby at 907- 793-1232 or dave.robv@alaska.eov. From: Cody Terrell <cterrell@hilcoro.com> Sent: Wednesday, July 22, 2020 11:23 AM To: Roby, David S (CED) <dave.robv@alaska.¢ov> Cc: Colombie, Jody J (CED) <lodv.colombie@alaska.gov>; Davies, Stephen F (CED) <steve.davies@alaska.sov>; Boyer, David L (CED) <david.bover2@alaska.aov>; Loepp, Victoria T (CED) <yictoria.loeyp@alaska.eov>; Schwartz, Guy L (CED) <Ruv.schwa rtz@a laska.aov> Subject: RE: [EXTERNAL] Downhole commingling request of BCU 19RD Ok I will try to be more clear. Should I send a revised app or just resubmit the application? Regards, Cody T. Terrell Landman Hilcorp Alaska, LLC Direct: 907-777-8432 Cell: 713-870-4532 From: Roby, David S (CED) [mailto:dave.roby@alaska.Rov] Sent: Wednesday, July 22, 202010:08 AM To: Cody Terrell <cterrell@hilcorp.com> Cc: Colombie, Jody J (CED) <lody.colombie@alaska.eov>; Davies, Stephen F (CED) <steve.davies@alaska.>;ov>; Boyer, David L (CED) <david.bover2@alaska.i=_ov>; Loepp, Victoria T (CED) <victoria.loepp@alaska.aov>; Schwartz, Guy L (CED) <guy.schwartz@a laska.aov> Subject: RE: [EXTERNAL] Downhole commingling request of BCU 19RD Hi Cody, Yes, please provide more information on this. Also, please provide a discussion on whether or not there could be any adverse impacts (i.e. crossflow) on ultimate recovery if the two formations are commingled. Regards, Dave Roby 907-793-1232 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 Dave Roby at 907- 793-1232 or dave.robv@alaska.eov. From: Cody Terrell <cterrell@hilcorp.com> Sent: Wednesday, July 22, 2020 8:26 AM To: Roby, David S (CED) <dave.roby@alaska.gov> Cc: Colombie, Jody J (CED) <[odv.colombie@alaska.gov>; Davies, Stephen F (CED) <steve.davies@alaska.izov>; Boyer, David L (CED) <david.boyer2@alaska.¢ov>; Loepp, Victoria T (CED) <victoria.loepp@alaskLggv>; Schwartz, Guy L (CED) <R uv.schwa rtz @a laska.iaov> Subject: RE: [EXTERNAL] Downhole commingling request of BCU 19RD Dave, In Hilcorp's application it states that there would be bypassed Beluga pay that we would not be able to evaluate. This would be wasteful and result in resources being left in the ground. These resources would not be recovered if we couldn't commingle. Should I add a paragraph detailing this more? Regards, Cody T. Terrell Landman Hilcorp Alaska, LLC Direct: 907-777-8432 Cell: 713-870-4532 From: Roby, David S (CED) [mailto:dave.robv@alaska.gov] Sent: Thursday, July 16, 2020 3:22 PM To: Cody Terrell <cterrell@hilcoro.com> Cc: Colombie, Jody J (CED) <iody.colombie@alaska.gov>; Davies, Stephen F (CED) <steve.davies@alaska.Rov>; Boyer, David L (CED) <david.bover2@alaska.gov>; Loepp, Victoria T (CED) <victoria.loeoo@alaska.aov>; Schwartz, Guy L (CED) <Ruy.schwa rtz@a laska.¢ov> Subject: [EXTERNAL] Downhole commingling request of BCU 19RD Cody, In reviewing your downhole commingling application I think we need more info to show that waste will not occur. In the "Background" section of the application there are statements that downhole commingling will increase production and extend the productive life, but there's no supporting information to back this up. Additionally, the final paragraph of the "Background" section says "As demonstrated below, Hilcorp's proposal to commingle production from both the Beluga and Tyonek will not lead to a loss of reserves or less ultimate recovery from either pool." But there's nothing in the "Discussion" section of the application that addresses waste. The first paragraph in this section describes why a dual string completion is not physically possible and the rest of the section discuss production allocation. Please provide additional information to demonstrate that downhole commingling will not cause waste. Thank you, David Roby Senior Reservoir Engineer Alaska Oil and Gas Conservation Commission 907-793-1232 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 Dave Roby at 907- 793-1232 or dave.robv@alaska.eov. The information contained in this email message is confidential and may be legally privileged and is intended only for the use of the individual or entity named above. If you are not an intended recipient or if you have received this message in error, you are hereby notified that any dissemination, distribution, or copy of this email is strictly prohibited. If you have received this email in error, please immediately notity us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete this message. 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. The information contained in this email message is confidential and may be legally privileged and is intended only for the use of the individual or entity named above. If you are not an intended recipient or if you have received this message in error, you are hereby notified that any dissemination, distribution, or copy of this email is strictly prohibited. If you have received this email in error, please immediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete this message. 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. The information contained in this email message is confidential and may be legally privileged and is intended only for the use of the individual or entity named above. If you are not an intended recipient or if you have received this message in error, you are hereby noted that any dissemination, distribution, or copy of this email is strictly prohibited. If you have received this email in error, please immediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete this message. 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. RECEIVL.) JUL 2 0 2020 AOGCC July 14, 2020 Jeremy Price, Chair Hilcorp Alaska, LLC Alaska Oil and Gas Conservation Commission 333 West 7a' Avenue, Suite 100 Anchorage, Alaska 99501 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 907-777-8432 Fax: 907-777-8301 cterrell@hilcorp.com RE: Request for Approval to Commingle Production from the Beluga and Tyonek Gas Pools in the wellbore of BCU 19RD at the Beaver Creek Field Dear Commissioner Price: Hilcorp Alaska, LLC (Hilcorp), as operator of the Beaver Creek Unit ("BCU") hereby requests that a Conservation Order be granted by the Alaska Oil and Gas Conservation Commission ("AOGCC") to permit the commingling of gas production from the both the Beluga Gas Pool ("Beluga") and Tyonek Gas Pool ("Tyonek"), as defined in Conservation Order 237B ("CO 237B"), in the BCU 19RD well. Issuance of the requested Order requires an exception to 20 AAC 25.215(b).' Additionally, Hilcorp requests waiver of the requirement to provide complete separation of flow streams from separate pools as specified in 20 AAC 25.2 10 2 On May 6, 2016, AOGCC issued CO 237B, which formally defined the Tyonek. As defined in CO 237B, the Beluga includes the depths between 6,370'-9,650' MD measured in the BCU IA, and the Tyonek includes the depths between 8,886'-14,518' MD measured in the BCU 4. Background Hilcorp drilled the BCU 19RD in February 2020. Initial perforations were not productive in the Middle Tyonek sands (T66 sand). In April 2020, the well was perfed in the Tyonek T19A sand and brought online (—1 mmcf/d). There were additional Tyonek sands added (T8, T713, T4, TIXX) and the well came up to around 2.6 mmcf/d. 1 20 AAC 25.215(b) provides: Comingling of production within the same wellbore from two or more pools is not permitting, unless, after request, notice, and opportunity for public hearing in conformance with 20 AAC 25.540, the commission (1) finds that waste will not occur, and that production from separate pools can be property allocated; and (2) issues an order providing for commingling for wells completed from these pools within the field. 2 20 AAC 25.210 provides: A well may not be completed in more than one pool without approval of the commission. The commission will require evidence of complete separate of flowstreams from separate pools, as ascertained by a pressure test or other acceptable test conducted at the time the packers are set. Subsequently, if packer leakage is suspected, the commission will require the operator to provide proof of complete separation of the pools involved in the completions or make a packer leakage test. At least 24 hours notice must be given so that the packer leakage test may be witnessed by a representative of the commission. BCU 19RD Comingling Appllcatioe Page 2 of 4 Based on OH log data, pressure sample stations, and mudlogs, there appear to be several undeveloped large gas sands in the lowermost Beluga section. By adding perforations to the Beluga formation, Hilcorp anticipates increasing production. To extend the productive life of this wellbore, Hilcorp now requests permission to test and produce potential by-passed production in the Beluga without isolating existing perforations within the Tyonek. As demonstrated below, Hilcorp's proposal to commingle production from both the Beluga and Tyonek will not lead to a loss of reserves or less ultimate recovery from either pool. Moreover, waste will not occur and that proper procedures will be in place to ensure that production from the Beluga and Tyonek pools are properly allocated. Discussion BCU 19RD is a monobore well utilizing 5-1/2", P110, 17 ppf production casing. Due to this design constraint, a dual production string cannot be used to isolate the downhole flows from the respective reservoirs. After the initial testing phase of the Beluga is completed, any additional rate gained by the additional perforations will be attributed to the Beluga. On an annual basis thereafter, Hilcorp proposes to run a production log across all open perforations within the wellbore. Such data will be used to meet the requirements of 20 AAC 25.215(b)(1) (requiring that production from separate pools can be property allocated). During the initial testing phase, and thereafter, all BCU 19RD production associated with the Beluga will be reported, for royalty purposes, to BLM and CIRI (joint landowners) according to the allocation schedule required by the Beaver Creek Unit's Beluga Participating Area. See Exhibit A. Likewise, all BCU 19RD production associated with the Tyonek will be reported, for the purpose of royalties, to BLM and CIRI (joint landowners) according to the allocation schedule required by the Beaver Creek Unit's Tyonek Participating Area. See Exhibit B. Adherence to proper reporting requirements for both allocations of unit production and payment of royalties will ensure that the correlative rights of affected landowners are adequately protected. Conclusion Hilcorp respectfully requests that a Conservation Order be granted by the Alaska Oil and Gas Conservation Commission to permit the commingling of oil and gas production from the Beaver Creek Field, Beluga and Tyonek Gas Pools in the BCU 19RD well. Further, Hilcorp requests waiver of the requirement to provide complete separation of flow streams i BCU 19RD Comingling Applicatiw� Page 3 of 4 from the two pools. Also, Hilcorp has sent a copy of this application to all effected landowners. If the Commission does not grant approval to commingle the two pools, Hilcorp will unable to evaluate potential bypassed Beluga pay in the BCU 19RD wellbore. If you require additional information regarding this request, please contact Mr. Ben Siks, Geologist, at 777-8388, or the undersigned at 907-777-8432. Sincerely Cody T. Terrell, Landman Hilcorp Alaska, LLC Enclosures: Figure 1 (Map), Exhibit A (BCU Beluga Gas PA Exhibits), Exhibit B (BCU Tyonek Gas PA Exhibits), Exhibit C (BCU 19RD Schematic) CC: Jody Colombie, AOGCC (via email) Robert Brumbaugh, BLM (via email) Colleen Miller, CIRI (via email) r BCU 19RD Comingling Applicatio„ Page 4 of 4 33 KU FIGURE 1 Application for Downhole Commingling BRU 19RD Well Map uT SCUDI SCU DIRD SK Legend ecus • BCU 19RD—SHL �r X SCU 19RD—TPH ` BCU 19RD—SHL I Other Surface We9 Locations • Other Bottom Hole Locations ---- Well Paths OOil and Gas Unit Boundary BCU ow s ` ecu IND a4� Mu A028118 >i3 S006NOlOW ecu D: g SC -0 1000 t.SUC Beaver Creek Unit SCU-19RD Feet 4 AL, k Stale Plane Zone i. NAD27 A tfilnirp .AWkn. LII: Definitive Survey Dtae Daze_F 4.W20 Exhibit A BCU Beluga Gas Participating Area Beaver Creek Unit Effective September 1, 2009 8 Township 6 North, Range 10. West 240.0000 HAK N 36 20.0000000% Bureau of Land 58.33% 12.500% Kirkpatrick Welkowski 1.000000% Hikmp Alaska, LLC 100.00000% Seward Meridian AKAN A-029118 Management Watkins Trust Section 3: That portion of Lot I that HAK N 36 Cook Inlet Region, Inc. 41.67% 12.500% lies within the W2NW/4, that AKAN A-028118 portion of Lot 1 thatlies within the NE/4NW/4, that portion of Lot 1 lying within the NWANE/4; Section 4: E2NE/4 Total PA Total Tract Acreage Percentage 1,200.000 100.000000% BCU Beluga Gas PA Exhibit A Updated: 1/18/2016 Working Interest Owners PA % Uncommitted 0.000000% Hilcorp Alaska, LLC 100.000000% Working TractWorking Tract Mineral Mineral Royalty ORRI ORRI Interest Interest Tract Tract Legal Description Acreage Lease Percentage Owner Interest Percent Owner Percentage Ownership Owner % 4 Township 7 North, Range 10 West, 960.0000 HAK N 35 80.0000000% Bureau of land 82.81% 12.500% Peter Geiger 0.500000% HiNoT Alaska, LLC 100.00000% Seward Meridian AKAN A-028083 Management Paul Geiger 0.500000% Section 27: That portion of Lot 2 HAK N 35 Cook Inlet Region, Inc. 17.19% 12.500% that ies within the SWA, that AKAN A-028083 portion of Lot 2 that lies within the W2SE/4; Section 33: E2E2; Section 34: All, except E12SE/4 - 8 Township 6 North, Range 10. West 240.0000 HAK N 36 20.0000000% Bureau of Land 58.33% 12.500% Kirkpatrick Welkowski 1.000000% Hikmp Alaska, LLC 100.00000% Seward Meridian AKAN A-029118 Management Watkins Trust Section 3: That portion of Lot I that HAK N 36 Cook Inlet Region, Inc. 41.67% 12.500% lies within the W2NW/4, that AKAN A-028118 portion of Lot 1 thatlies within the NE/4NW/4, that portion of Lot 1 lying within the NWANE/4; Section 4: E2NE/4 Total PA Total Tract Acreage Percentage 1,200.000 100.000000% BCU Beluga Gas PA Exhibit A Updated: 1/18/2016 Working Interest Owners PA % Uncommitted 0.000000% Hilcorp Alaska, LLC 100.000000% Page 1 of 1 Exhibit B BCU Tyonek Gas Participating Area Beaver Creek Unit Effective June 1, 2015 BCU Tyonek Gas PA Exhibit C Page 1 of 1 Updated: 1222016 Working Working Tract Tract Mineral Mineral Royalty ORRI ORRI Interest Interest Tract Tract Legal Description Acreage Lease # Percentage Owner Interest Percent Owner Percentage Ownership Owner % 4 Township 7 North, Range lO Wcst, 560.0000 HAK#35 93.3333333% Bureau of Land 82.81% 12.500% Peter Geiger 0.500000% Hilcorp Alaska, LLC 100.00000% Seward Meridian AKA # A-028083 Management Paul Geiger 0.500000% HAK# 35 Cook Inlet Region, lac. 1219% 12.500% Section 27: That portion of Lot 2 that lies within the SE/4SW/4, that AKA# A-028083 portion of Lot 2 that lies within the W2SE/4, that portion of Lot 2 that lies within the SE/4SE/4; Section 34: N2NE/4, including submerged lands, SW/4NE/4, E2NW/4, S W/4NW/4, E2SW/4, W2SFJ4 8 Township 6Nonh, Range 1OWest, 40.0000 HAK#36 6.6666667% Bureau of Land 58.33% 12.500% Kirkpatrick Welkowski 1.000000% Iilcorp Alaska, LLC 100.00000% Seward Meridian AKA A-028118 Management Watkins Trust HAK # 36 Cook Inlet Region, Inc. 41.67% 12.500% Section 3: That portion of Lot l that lies within the NE/4NW/4 AKA# A-028118 Total PA Total Tract Working Interest Acreage Percentage Owners PA % 600.000 100.000000°/ Uncommitted 0.000000% Hilcorp Alaska, LLC 100.000000°/ BCU Tyonek Gas PA Exhibit C Page 1 of 1 Updated: 1222016 EXHIBIT C lication for Downhole Commingling SCHEMATIC rare Alaska. LLC RKB: 178.5' [ASINC DFTAIL 20` 13-3jr b 2 i 3 TM TV T4 T]B T8 T19 T19A T� TD =12,B5V (MD) / 12,166' PDJ PBTD=10,95V (MD) / 10,34V (TVD) Beaver Creek Unit Well: BCU 19RD PTD: 219-188 API: 50-133-20579-01-00 Size Type Wt/Grade/Conn ID Top Btm 20" Conductor 133 / K-55 / Weld 18.730" Surf 106' 13-3/8" Surface 68/L-80-J-55/BTC 12.415" Surf 2,510' 9-5/8" Intermediate 40/L-80/BTC 8.835" Surf 7,447' 5-1/2" Production 17 / P-110 / CDC-DWC 4.892" Surf 12,841' IFWFI RV nFTAIt. No Depth Item 14,295' Btm(TVD) 9-5/8" Swell Packer 2 10,950' Halliburton EZ Drill Bridge Plug (4' cmt on top) TOC 10,946' MD 3 12 660' CIBP (43' cmt on top) TOC 12,617' MD PERFORATION DETAIL Sand Top(MD) Stm(MD) Top(TVD) Btm(TVD) Amt Date Comments T1XX 9,083' 9,093' 8,566' 8,575' 10' 5/19/20 2-7/8" TIX 9,224' 9,229' 8,699' 8,704' 5' 5/19/20 2-7/8" T4 9,452' 9,462' 8,916' 8,925' 30' 5/18/20 2-7/8" T76 9,850' 9,860' 9,295' 9,304' 10' 5/18/20 2-7/8" T8 9,979' 9,994' 9,416' 9,430' 15' 5/18/20 2-7/8" T19 10,899' 10,923' 10,293' 10,315' 24' 5/9/20 2-7/8" T19 10,923' 10,937' 10,315' 10,328' 14' 5/9/20 2-7/8" T19A 10,957' 10,970' 10,347' 10,359' 23' 4/13/20 3-1/8" Isolated T66 12,683' 12,708' 12,003' 12,027' 25' 4/8/20 3o slated Updated by DMA 06-05-20