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Home My WebLink AboutCO 645 ACONSERVATION ORDER 645A 1. July 24, 2020 ON ITS OWN MOTION the Alaska Oil and Gas Conservation Commission proposes contraction of the Affected Area for the Oooguruk-Torok Oil Pool,within the Oooguruk Field, Oooguruk Unit, East Harrison Bay, Beaufort Sea, Alaska Pages 10 13 Held Confidential 2. August 4, 2020 Notice of hearing, affidavit of publication, email distribution, mailings ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7 1 Avenue Anchorage Alaska 99501 Re: ON ITS OWN MOTION the Alaska Oil and Gas ) Docket CO -20-013 Conservation Commission proposes contraction ) Conservation Order No. 645A of the Affected Area for the Oooguruk-Torok ) Oil Pool, within the Oooguruk Field, Oooguruk ) Oooguruk Field Unit, East Harrison Bay, Beaufort Sea, Alaska ) Oooguruk Unit Oooguruk-Torok Oil Pool January 21, 2021 IT APPEARING THAT: By application dated July 24, 2020, ConocoPhillips Alaska, Inc. (CPAI), as operator of the Kuparuk River Unit (KRU) and on behalf of the Working Interest Owners (WIOs), requested Conservation Order No. 725 (CO 725) be amended to expand the areal extent of the Kuparuk River -Torok Oil Pool (KR -TOP). The proposed expansion of CO 725 would overlap with the Affected Area of the Oooguruk-Torok Oil Pool (O -TOP), as defined by Conservation Order No. 645 (CO 645). Therefore, on its own motion, the Alaska Oil and Gas Conservation Commission (AOGCC) proposes to contract the Affected Area of CO 645 to exclude the acreage proposed to be added to CO 725 and thus conform the boundaries of the O -TOP to the acreage currently operated by Eni US Operating Company Inc. (Eni). 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for September 15, 2020. On August 4, 2020, the AOGCC published notice of 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, mailed printed copies of the notice to all persons on the AOGCC's mailing distribution list, and published the notice in the Anchorage Daily News. 3. No comments on the application were received. 4. CPAI's application and the public domain contain sufficient information to make a decision without the need to hold the hearing, so the hearing was cancelled on September 1, 2020. FINDINGS: Order History: CO 645, which established the O -TOP, operated by Pioneer Natural Resources Alaska, Inc. (Pioneer), and pool rules for its development, was issued on May 26, 2011. CO 725, which established the KR -TOP, operated by CPAI was issued on July 22, 2016. 2. Relationship of O -TOP to KR -TOP: O -TOP and KR -TOP lie adjacent to one another and encompass the same strata on both sides of the boundary line separating them. Operatorship History of O -TOP: The O -TOP was initially established by Pioneer, operator for the Oooguruk Unit (OU) and the acreage in the O -TOP that was outside of the OU. Subsequently, Caelus Energy, LLC (Caelus) acquired Pioneer's assets on the North Slope and became operator of the OU and the O -TOP. In 2019, Caelus sold its interests in the OU and O -TOP to CPAI and Eni US Operating Company Inc. (Eni). CPAI, operator of the KRU, purchased the portions of Caelus' Oooguruk holdings to the south, and Eni purchased the northern portions. Conservation Order No. 645A January 21, 2021 Page 2 4. Contraction of the OU: On June 17, 2019, the Department of Natural Resources (DNR) approved Caelus' request to contract the OU to exclude leases in the southern portion of the unit. On June 20, 2019, the DNR approved Eni as the new operator for the OU. 5. Need for Contraction of the O -TOP: 20 AAC 25.460(a)(3) restricts an area injection order to a single operator. The current O -TOP Affected Area encompasses acreage now operated by Eni and CPAI. As such, the Affected Areas for the O -TOP and KR -TOP pool rules and area injection orders must be adjusted to ensure consistent rules. CONCLUSION: Contracting the O -TOP Affected Area to conform to Eni-operated acreage and to be consistent with the Affected Areas of CO 725A and AIO 37A will ensure proper development. NOW, THEREFORE, IT IS ORDERED: This order supersedes CO 645. The record, findings, and conclusions for CO 645 are incorporated by reference into this order. CO 645.001 remains in effect. Development and operation of the O -TOP is subject to the following rules and the statewide requirements under 20 AAC 25 to the extent not superseded by these rules: Affected Area: Umiat Meridian (Revised This Order) Township, Range Description T13N, R07E Section 3: SW '/4 SW %4 Section 4: SE'/4 SE'/4, W'/� SE'/4, SW'A, SE'/4NW'/4, W'/2NW 1/4 Section 5: E''/2 E''/2 Section 8: E1/2E ''/2 Section 9: All Section 10: SW'/4NE'/4, SE'/4 SE'/4, W'/z SE'/4, W'/z Section 11: SW '/4 SW '/4 Section 14: SE 'ASE '/4, W '/z SE '/4, W '/z Section 15: All Section 16: All Section 17: E1/2E '/2, SW'/4 SE'/4 Rule 1 Field and Pool Name (Source CO 645) The field is the Oooguruk Field. Hydrocarbons underlying the Affected Area and within the interval identified in Rule 2, below, constitute the Oooguruk-Torok Oil Pool (OTOP). Rule 2 Pool Definition (Source CO 645) The OTOP is the accumulation of hydrocarbons within the Affected Area common to and correlating with the interval between the measured depths of 4,991 and 5,272 feet on the resistivity log recorded in exploratory well Kalubik No. 1 Conservation Order No. 645A January 21, 2021 Page 3 Rule 3 Well Spacing (Source CO 645) There shall be no restrictions as to well spacing except that no pay shall be opened in a well within 500 feet of an external property line where the owners and landowners are not the same on both sides of the line. Rule 4 Drilling Waivers (Source CO 645) All permits to drill deviated wells within the OTOP shall include a plat with a plan view, vertical section, close approach data and a directional program description in lieu of the requirements of 20 AAC 25.050(b). Rule 5 Well Logging and Sampling Requirements (Source CO 645) a. A suite of petrophysical well logs including, at a minimum, gamma ray, resistivity, neutron porosity, and density porosity logs shall be acquired across the OTOP in one well from each drill site. The Commission may require additional wells to be logged using one or more petrophysical logging tools. b. A mud log and cuttings samples shall be obtained from the base of the conductor through the OTOP in at least one well drilled from each drill site. Rule 6 Reservoir Pressure Monitoring (Source CO 645) a. A bottom -hole pressure survey shall be taken on each well prior to initial production or injection. b. The operator shall obtain the pressure surveys needed to manage the hydrocarbon recovery processes effectively subject to the annual plan outlined in Rule 9, below. At a minimum a pressure survey shall be acquired from at least one well on each drill site each year. C. The reservoir pressure datum will be -5,000' TVDSS. d. Pressure surveys may consist of stabilized static pressure measurements at bottom -hole or be extrapolated from surface measurements (single phase fluid conditions), pressure fall-off measurements, pressure buildup measurements, multi -rate test results, drill stem test results, and open - hole formation tests or other methods approved by the Commission. e. A Reservoir Pressure Report, Form 10-412, shall be utilized for all surveys; all relevant data shall be attached to the report. The data submitted shall include, at a minimum, rate, pressure, depth, fluid gradient, temperature, and all other well conditions necessary for a complete analysis of each survey being conducted. £ The results and data from any special reservoir pressure monitoring tests or surveys shall also be submitted in accordance with paragraph (e) of this rule. Rule 7 Gas -Oil Ratio Exemption (Source CO 645) Wells producing from the OTOP are exempt from the GOR limits of 20 AAC 25.240(a) as long as 20 AAC 25.240(b)(1) applies. An enhanced recovery operation, as required by 20 AAC 25.240(b)(1), must be initiated within 12 months of the issuance of this order. Rule 8 Annual Reservoir Review (Source CO 645) a. An annual reservoir surveillance report must be filed by April 1st of each year and include future development plans, reservoir depletion plans, and surveillance information for the prior calendar year, including: i. The voidage balance, by month, of produced fluids and injected fluids and the cumulative status for each producing interval; Conservation Order No. 645A January 21, 2021 Page 4 ii. A reservoir pressure map at datum, and a summary and analysis of the reservoir pressure surveys within the pool; iii. The results and, where appropriate, an analysis of production and injection log surveys, tracer surveys, observation well surveys, and any other special monitoring; iv. A review of pool production allocation factors and issues over the prior year. v. A review of the progress of the enhanced recovery project; and vi. A reservoir management summary, including results of any reservoir simulation studies. b. By June 1 S` of each year, the operator shall schedule and conduct a technical review meeting with the Commission to discuss the annual reservoir surveillance report and items that may require action within the coming year. The Commission may audit the technical data and analyses relating to the surveillance report's conclusions and reservoir depletion plans. Rule 9 Annular Pressures (Source CO 645) a. At the time of installation or replacement, the operator shall conduct and document a pressure test of tubulars and completion equipment in each development well that is sufficient to demonstrate that planned well operations will not result in failure of well integrity, uncontrolled release of fluid or pressure, or threat to human safety. b. The operator shall monitor each development well daily to check for sustained pressure, except if prevented by extreme weather conditions, emergency situations, or unavoidable circumstances. Monitoring results shall be made available for Commission inspection. c. The operator shall notify the Commission within three working days after the operator identifies a well as having (i) sustained inner annulus pressure that exceeds 2,000 psig for all development wells, or (ii) sustained outer annulus pressure that exceeds 1,000 psig. d. The Commission may require the operator to submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action or increased surveillance for any development well having sustained pressure that exceeds a limit set out in paragraph (c) of this rule. The Commission may approve the operator's proposal or require other corrective action or surveillance. The Commission may require corrective action be verified by a mechanical integrity test or other approved diagnostic tests. The operator shall give the Commission sufficient notice of the testing schedule to allow the Commission to witness the tests. e. If the operator identifies sustained pressure in the inner annulus of a development well that exceeds 45% of the burst pressure rating of the well's production casing for inner annulus pressure, or sustained pressure in the outer annulus that exceeds 45% of the burst pressure rating of the well's surface casing for outer annulus pressure, the operator shall notify the Commission within three working days and take corrective action. Unless well conditions require the operator to take emergency corrective action before Commission approval can be obtained, the operator shall submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action. The Commission may approve the operator's proposal or require other corrective action. The Commission may also require corrective action be verified by mechanical integrity testing or other Commission approved diagnostic tests. The operator shall give the Commission sufficient notice of the testing schedule to allow the Commission to witness the tests. f. Except as otherwise approved by the Commission under (d) or (e) of this rule, before a shut-in well is placed in service, any annulus pressure must be relieved to a sufficient degree (1) that the inner annulus pressure at operating temperature will be below 2,000 psig, and (2) that the outer annulus pressure at operating temperature will be below 1,000 psig. A well subject to (c) but not (e) of this rule may reach Conservation Order No. 645A January 21, 2021 Page 5 an annulus pressure at operating temperature that is described in the operator's notification to the Commission under (c) of this rule, unless the Commission prescribes a different limit. g. For purposes of this rule, i. "inner annulus" means the space in a well between tubing and production casing; ii. "outer annulus" means the space in a well between production casing and surface casing; and iii. "sustained pressure" means pressure that (A) is measurable at the casing head of an annulus, (B) is not caused solely by temperature fluctuations, and (C) is not pressure that has been applied intentionally. Rule 10 Production Surface Comminzlin2, Measurement and Allocation (Source CO 645) Hydrocarbon measurement, production allocation, fiscal allocation, and surface commingling of production from the OTOP with the other OU and KRU Oil Pools is authorized provided it is done in accordance with the provisions of CO 596.007 et al. issued on July 30, 2009. Rule 11 Administrative Action (Source CO 645) Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the Commission may administratively waive the requirements of any rule stated herein or 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. DONE at Anchorage, Alaska, and dated January 21, 2021. Digitally signed by D tall Jessie L. Digitally signedwlm Jeremy M. Jeremy M. price Daniel T. ,, rsignedby Date: LCh,ml.2. ski Daniel T.S.01.20 [, Jr. Price Date 2021.01.20 Seamount, Jr. Dale 2021.0020 Chmielowski 115001120900 132253-09'00' 11:37:36-09'00' Jeremy M. Price Daniel T. Seamount, Jr. Jessie L. Chmielowski Commissioner, Chair Commissioner Commissioner 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 l0 -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. As provided in AS 31.05.080(b), "[t]he questions reviewed on appeal are limited to the questions presented to the Commission by the application for 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 Bernie Karl K&K Recycling Inc. Gordon Severson Richard Wagner P.O. Box Recycling 3201 Westmar Cir. P.O. Box 60868 Fairbanks, AK 99711 Anchorage, AK 99508-4336 Fairbanks, AK 99706 George Vaught, Jr. Darwin Waldsmith P.O. Box 13557 P.O. Box 39309 Denver, CO 80201-3557 Ninilchik, AK 99639 INDEXES STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPV OF ADVERTISMENT. ADVERTISING ORDER NUMBER AO -08-21-004 FROM: AGENCY CONTACT: Jody Colombie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A.O. AGENCY PHONE: 333 West 7th Avenue 8/3/2020 (907) 279-1433 Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907) 276-7542 TO PUBLISHER: Anchorage Daily News, LLC SPECIAL INSTRUCTIONS: PO Box 140147 Anchorage, Alaska 99514-0174 TYPE OF ADVERTISEMENT: '%0LEGAL DISPLAY —CLASSIFIED OTHER (Specify below) DESCRIPTION PRICE CO -20-013 and AIO-20-016 Initials of who prepared AO: Alaska Non -Taxable 92-600185 SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENTTO: AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 Pa e l of I Total of All V-- Q. REF Type Number Amount Date Comments I PvN VCO21795 2 Ao AO -08-21-004 3 4 FIN AMOUNT SY Act. Template PGM LGR Object FY DIST LIQ 1 21 AOGCC 3046 21 2 3 5 Purcha inh ri e: T' e: Purchasing Authority's Signature Telephone Number 1. O. # and `rec-e-A i4gagency name must appear on all invoices and documents relating to this purchase. he 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 not for ale. DISTRIBUTION: Division Fiscal/Original AO Copies: Publisher (faxed), Division Fiscal, Receiving Form: 02-901 Revised: 8/3/2020 Notice of Public Dearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -20-013 And AIO-20-016 Kuparuk River Unit, Kuparuk River -Torok Oil Pool Oooguruk Unit, Oooguruk-Torok Oil Pool The application of ConocoPhillips Alaska, Inc. (CPAI) for amendments to Conservation Order (CO) No. 725 and Area Injection Order (AIO) No. 39 to expand the areal extent of the Kuparuk River Unit (KRU), Kuparuk River -Torok Oil Pool (KRTOP). On its own initiative the Alaska Oil and Gas Conservation Commission (AOGCC) is proposing to contract the affected areas of CO No. 645 and AIO No. 37 for Eni US Operating Company, Inc.'s (Eni) Oooguruk Unit( OU), Oooguruk-Torok Oil Pool (OTOP). CPAI, by letter dated July 24, 2020, requests the AOGCC amend CO No. 725 and AIO No. 39 to expand the affected area of the KRTOP to include acreage that is currently part of the OTOP but the acreage is now leased by CPAI. On its own motion the AOGCC is proposing to amend CO No. 645 and AIO No. 37 to contract the affected area of the OTOP to remove acreage that is currently defined as part of the OTOP but for which Eni does not hold the leases for. The AOGCC has tentatively scheduled a public hearing on this application for September 15, 2020, at 10:00 a.m. at 333 West 7th 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 21, 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 24, 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 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on September 7, 2020, except that, if a hearing is held, comments must be received no later than the conclusion of the September 15, 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 10, 2020. Jeremy M. Price Chair, Commissioner Order Number: W0017173 Order Status: Submitted Classification: Ieg315 & Public Notice,. Package: Legals ADN Final Cost: 323.72 Referral Code: AO -08-21-004 Payment Type: User ID: 7'70310085 ST OF AK DNR,, OIL AND GAS 550 W 7TH AVE STE 11 (K) ANCHORAGE. AK 99501 907-269.8805 legalads��adn com ST OF AK/DNPiOIL AND GAS ACCOUNT INFORMATION TRANSACTION REPORT Date 1:01 PM - Mon. Aug 3.2020 Amount: 323.72 SCHEDULE FOR AD NUMBER W00172730 Tue Aug 4.2020 Anchorage Daily News Legals STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number. CO -20-013 And AIO-20-016 Kupan* River Unit, KUParuk Rivet -Torok Oil Pool Oooguruk Unit, 000guruk-Torok Oil Pool The application of ConocoPNlhps Alaska, Inc. (CPAI) (or amendments to Conservation Order (CO) No. 725 and Area Injection Order (AIO) No. 39 to expand the areal extent of the KuparUk River Unit (KRU), KUpanhk River -Torok Oil Po0l (KRTOP). On is own Initiative the Alaska Oil and Gas Conservation Commission (AOGCC) IS proposing t0 cOntract the affected areas Of CO N0.645 and An N0.37 for Eni US Operating Company, Inf.'s (Enl) OOOgurUk Unit( OLP, 000guruk-Torok oil Pool (OTOP). CPAI, by letter dated July 24, 2020, requests the AOGCC amend CO No. 725 and An NO. 39 t0 expand the affected area Of the KRTOP t0 include acreage that Is currently pan Of the OTOP but the acreage Is now leased by CPAL On Its own motion the AOGCC is Proposing to amend CO NO. 645 and AID N0. 37 to Contract the affected area Of the OTOP to remove acreage that is currently defined as part of the OTOP but for which Enl does not hold the leases for. The AOGCC has tentatively scheduled a public hearing on this application for September 15, 2020, at 10:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. TO request that the tentatively scheduled heady g be held, a written request must be filed with the AOGCC no later ittan 4:30 p.m. On AVgUSt 21, 2020. If a request for a hearing is not timely filed, the AOGCC may Consider the Issuance of an order without a headre TO learn If the AOGCC will hold the hearing, Call (907) 793-1221 after August 24, 2020. If a hearing IS requested, the COVID-19 virus may neceSSltate that the hearing be held telephonically. Those desiring to participate or be present at the hearing should check with AOGCC the day before the hearig to ascertain If the hearing will be telephonic. If the hearing Is telephonic, on the day of the hearing, those desiring t0 be present or participate should call 1 -goo -315-6338 and, when Instructed to do so, enter the tate 14331 followed by the a sign. Because the hearing will start at 10:00 a.m., the phone Innes 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 AOGCG at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 P.M. on September 7, 2020, except that, If a hearing is held, continents must be received no later than the conclusion of the September 15, 2020 hearing if, because of a disability, special accommodations may be needed l0 comment or attend the hearlit� contact the AOGCC's Special Assistant, lolly Colomble, at (907) 793.1221, no later than September 10, 2020. Jeremy M. Price Chat, Commissioner Published: August 4, 2020 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 Carlotta Chernoff Manager GKA Development ConocoPhillips Alaska ATO -602 700 G Street Anchorage, AK 99501 Phone 907-263-4692 July 24, 2020 Jeremy Price Chair, Alaska Oil and Gas Conservation Commission 333 W. 7th Ave #100 Anchorage, Alaska, 99501-3539 RE: Application for Area Injection Order, and Pool Rules expansion Kuparuk River -Torok Oil Pool, North Slope, AK Dear Commissioner Price, ConocoPhillips Alaska, Inc. as operator of the Kuparuk River Unit, and on behalf of the working interest owners, requests that the Alaska Oil and Gas Conservation Commission approve administrative amendments to Conservation Order 725 and Area Injection Order 39 to allow for the expansion of the Kuparuk River - Torok Oil Pool and area injection order to include lands acquired and recently incorporated into the Kuparuk River Unit. Please find a digital copy of the application attached to this e-mail. Please contact Patrick Perfetta (907-263-4531) if you have questions or require additional information. Regards, Carlotta Chernoff CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page I 1 AlaskaI T%w ii At":Z00 APPLICATION FOR EXPANSION OF THE KUPARUK RIVER-TOROK OIL POOL July 24, 2020 Outline 1. Introduction 2. Kuparuk River -Torok Oil Pool History 3. Proposed Kuparuk River -Torok Oil Pool Expansion 4. Torok Development 5. Development Drilling Plans 6. Proposed Amendments to the Kuparuk River -Torok Conservation, and Area Injection Orders 7. No Underground Sources of Drinking Water List of Figures 1. Location Map 2. Torok Oil Pool Type Log 3. Chemistry of Sampled/Produced Water, 3S area 4. Confidential: Torok Oil Pool, Gross Interval Isochore 5. Confidential: Torok Oil Pool, Top Depth Structure 6. Confidential: Well Log Cross -Section A -A' 7. Confidential: Seismic Cross -Section B -B' Confidential materials are submitted in Appendix 1. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 12 1. INTRODUCTION Document Scope This application is submitted for approval by the Alaska Oil and Gas Conservation Commission ("Commission") to expand the Kuparuk River -Torok Oil Pool (KRTOP) under Conservation Order (CO) 725, and Area Injection Order (AIO) 39. The proposed expansion area includes all lands acquired by ConocoPhillips Alaska, Inc. (CPAI) from Caelus Natural Resources Alaska, LLC (Caelus) in 2019. These lands were subsequently included in the 12th expansion of the Kuparuk River Unit (KRU), as it pertains to the Torok (Figure 1). This expansion would make the western, northern, and southern boundaries of the KRTOP equivalent to the current KRU boundary in the expansion area, to allow for development of the Torok over this area. 2. KUPARUK RIVER-TOROK OIL POOL HISTORY Original KRTOP CO 725 & AID 39 CO 725, issued in July 2016, includes the accumulation of hydrocarbons common to and correlating with the interval between the measured depths of 4,991 and 5,272 feet in the Kalubik No. 1 well (Figures 1 & 2). This accumulation stratigraphically defines the Kuparuk River -Torok Oil Pool. AIO 39 authorizing injection of fluids for enhanced oil recovery from the KRTOP was also issued in July 2016. CO 725.001 In September 2016, the Commission modified the original order in the following ways: • Finding 10: Removal of the term "Regular production", due to the potential tax implications of this language. • Conclusion 12: Removal of language related to pre -production from injectors. • Expiration clause replaced by Rule 13 related to expiration date. CO 725.002 In May 2017, the Commission modified the original order to administratively remove the requirement for an annual reservoir review meeting for KRTOP. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 13 Requested Scope CPAI requests the Commission to amend CO 725 and AIO 39 to expand the Kuparuk River -Torok Oil Pool to include lands acquired by CPAI from Caelus in 2019. These lands were included in the 12th expansion of the KRU, as it pertains to the Torok, approved in August 2019 by the Alaska Department of Natural Resources (Figure 1., and Table 1.). These lands previously belonged to the Oooguruk Unit (OU) and were voluntarily contracted by Caelus. As these lands once belonged to the OU, the Oooguruk-Torok Oil Pool (OTOP) covers a portion of these lands. The OTOP will need to be contracted in order to accommodate the expansion of the Kuparuk River -Torok Oil Pool. This will allow KRU owners the ability to develop and implement enhanced oil recovery operations on these lands. Development plans are summarized in Section 4. 4. TOROK DEVELOPMENT Development Plans The expansion of the KRTOP will extend the existing pool to include the area currently covered by the OTOP. In addition, it is requested that the expansion include all acreage included in the 12th expansion of the KRU, as it pertains to the Torok reservoir. This would make the western, northern, and southern boundaries of the Kuparuk River -Torok Oil Pool consistent with the current unit boundary in the expansion area, as the Torok exists over an area larger than that covered by the existing OTOP on the lands under consideration. The expansion will allow for development of the Torok from KRU 3S pad, and the newly named KRU 3T pad (previously known as Nuna pad). The KRU owners began testing the Torok with a recompletion of the 3S-19 well in 2013. Since that time four horizontal wells (2 producers, and 2 injectors), and a vertical data collection well (Moraine 1) have been drilled to assess the Torok. To date 1.05 MMSTBO have been produced from the Torok from these wells. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from the paleo-Brookian shelf margin to the west. The sandstones and siltstones have been interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes. Gross thickness of the Torok reaches —300 feet but thins basin -ward to the southwest, southeast, and northeast. The Torok also pinches -out to the west against the paleo-slope. Appendix 1 is a confidential section that expounds upon the geology of the pool expansion area. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 14 5. DEVELOPMENT DRILLING PLANS Planned Wells Two additional horizontal wells (1 producer, and 1 injector) have been approved by KRU working interest owners. These wells will be drilled as part of the next rotary drilling program at 3S pad (purple dashed lines emanating from 3S pad, displayed on Figure 1.). 6. PROPOSED AMENDMENTS TO KUPARUK RIVER-TOROK CONSERVATION ORDER AND AREA INJECTION ORDER Affected Area CPAI proposes the area subject to the conservation order for the KRTOP (CO 725), and corresponding area injection order (AIO 39) be expanded, so that these orders apply to the following, restated lands: Umiat Meridian T11N, R8E Section 1 - 4 all Section 9 - 12 all T12N, R7E Section 1 - 26 all Section 35 - 36 all T12N, R8E Section 2 - 11 all Section 13 - 36 all T13N, R7E Section 19 - 36 all T13N, R8E Section 19 - 21 all Section 28 - 34 all Table 1. Description of restated lands. 7. NO UNDERGROUND SOURCES OF DRINKING WATER No Underground Source of Drinking Water History In AIO 37, Conclusion #3, the AOGCC concluded that the Torok injection interval is not a potential source of drinking water. Finding #19 of the same order, provides supporting documentation. This documentation includes details of sampled water from the Torok from the ODST-45A being equivalent to 16,980 mg/I (which is greater than the 10,000 mg/I cut off for freshwater). Also, Finding #19 documents a ruling from the Environmental Protection Agency, authorized by Disposal Injection Order 31, that the Torok is not a source of drinking water. This is based on calculations from ten nearby wells in the Torok ranging from 17,000 to 24,000 mg/I NaCl. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 15 In AIO 39, Conclusion #3, the AOGCC determined that the Torok injection interval does not contain freshwater and is not a potential underground source of drinking water. Finding #19 of the same order provides a summary of supporting documentation. This documentation includes water samples collected from Moraine 1 core measurements (21,363 mg/I of total dissolved solids) and produced water samples from KRU 3S-19 and 3S-620 wells ranging from 16,000 to 20,000 mg/I NaCl. Additional data related to No Underground Source of Drinking Water In addition to the above Conclusions, and Findings, CPAI has sampled additional waters from the Torok interval in several wells in the 3S area. The composition of the water is on average 18,635 mg/I, consistently above the 10,000 mg/I cut off for freshwater. A summary of the tested waters from all the 3S area wells is included in Figure 3. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 16 FIGURES ConosophA6ps ConocoPhillips s, Torok Reservoir Administrative Boundaries and .. 7 n Proposals Oooguruk Unit j �.. Legend ' Bottom Hole Location Well Spider .< KRU Torok Oil Pool Oooguruk Torok Oil Pool Nuna/3T Pad -.'x:Torok PA Unit Outline 0 No / Coastline e «�, Gravel Footprint sc ° s t= Proposed Well Plan ---- 3S Pad /. Miles A'hta Figure 1. Map displaying existing boundaries and proposed amendments related to the Torok Oil Pool: current Kuparuk River -Torok Oil Pool (CO 725)/AIO 39 (blue polygon with blue diagonal lines), current Oooguruk Torok Oil Pool (CO 645)/AIO 37 (green polygon with green horizontal lines), proposed area to be amended to the Kuparuk River -Torok Oil Pool/AlO 39 (blue shaded polygon), Oooguruk Torok Participating Area (red polygon), next round of approved Torok horizontal wells (purple dashed lines emanating from 3S pad). A note on the wellbore originating from the Oooguruk pad that extends into the Kuparuk River Unit: This is the ODST-47, a well which has subsequently been P&A'd. ` ` L *' �'! •_� ,�_. Ste•• � Figure 1. Map displaying existing boundaries and proposed amendments related to the Torok Oil Pool: current Kuparuk River -Torok Oil Pool (CO 725)/AIO 39 (blue polygon with blue diagonal lines), current Oooguruk Torok Oil Pool (CO 645)/AIO 37 (green polygon with green horizontal lines), proposed area to be amended to the Kuparuk River -Torok Oil Pool/AlO 39 (blue shaded polygon), Oooguruk Torok Participating Area (red polygon), next round of approved Torok horizontal wells (purple dashed lines emanating from 3S pad). A note on the wellbore originating from the Oooguruk pad that extends into the Kuparuk River Unit: This is the ODST-47, a well which has subsequently been P&A'd. CPPD Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 17 Kuparuk River - Torok Oil Pool Conek- W, Deni, ke a IGUose Gfr , Mr, �CPtLkfiwL i R13�H 1U 1F+ 2F CEJ 24, fis CaetC{ 265 FedAFLM) wPorSPC( 70LIO'cpgjr� a.K€i Figure 2. The Kalubik No. 1 well serves as the type log for both the Oooguruk, and Kuparuk River -Torok Oil Pools (The above image is presented for illustration purposes. Refer to the well log measurements recorded in exploratory well Kalubik No. 1 for the precise representation of the Kuparuk-Torok Oil Pool.). See figure 1 for location of the Kalubik 1. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 18 well Sample Date Total Cations (me/1) Total Anions (me/1) Total ionic composition (m¢/I) Comment Moraine 1 2/26/2015 8,128.5 13,203.7 21,332.2 average of 2RDTsamples 35-19 8/23/2013 6,969.3 11,414.0 18,383.3 anion Cl only 3S-19 9/15/2013 7,567.6 11,248.0 18,815.6 anion Cl only 35-19 11/4/2013 7,608.1 11,145.0 18,753.1 anion Cl only 35-19 5/21/2014 7,797.6 12,792.2 20,589.8 3S-19 10/11/2014 7,205.3 10,951.2 18,156.5 3S-611 11/8/2019 8,157.2 11,332.5 19,489.7 anions Cl, and 504 only 3S-611 3/31/2020 8,158.2 10,508.2 18,666.4 35-613 7/22/2016 5,964.1 54,969.8 60,933.9 likely contaminated 3S-613 7/28/2016 5,854.9 9,528.4 15,383.3 likely dilluted with fracwater 3S-613 8/12/2016 6,014.1 9,755.4 15,769.5 likely dilluted with frac water 35-613 8/14/2016 6,614.9 10,191.8 16,806.7 likely dilluted with frac water 35-613 8/16/2016 6,583.3 10,150.1 16,733.4 likely dilluted with fracwater 3S-613 8/23/2016 7,276.4 10,177.2 17,453.6 3S-620 6/2/2015 13,615.8 17,833.5 31,449.3 likely contminated; anions Cl, and SO4 only 3S-620 6/4/2015 8,828.7 13,168.4 21,997.1 cation Na, and K; anion Cl only 3S-620 6/6/2015 8,398.7 10,935.3 19,334.0 cation NA only; anion Cl only 35-620 6/8/2015 11,518.0 10,359.5 21,877.5 cation NA only; anion Cl only 3S-620 7/4/2015 6,780.9 12,085.9 18,866.8 3S-620 9/11/2015 7,398.4 8,772.2 16,170.6 anion Cl only 35-620 12/20/2015 6,681.3 11,024.8 17,706.1 3S-620 1/26/2017 7,053.6 11,501.5 18,555.1 3S-620 10/22/2017 8,081.7 12,421.7 20,503.4 7,556.0 11,079.4 18,635.4 Average Unless otherwise noted, cations include Ca, Mg, Na, and K Unless otherwise noted, anions include Cl, CO3, HCO3, and SO4 Samples noted as "likely contaminated" ore not included in averages Figure 3. Summary of Torok water composition from samples collected from 3S area wells CPRI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 19 ,S Additional Geologic Information To expand on the information included in the non -confidential portion of the application, the following is provided for additional context for the Torok. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from gullies associated with the paleo-Brookian shelf margin to the west. The sandstones and siltstones are interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes (see Figure 6 for a well log cross-section demonstrating the lateral extent of the Torok, see Figures 4 and 5 for section location). Gross thickness of the Torok reaches —300 feet but thins basin -ward to the southwest, southeast, and northeast. To the west it pinches -out against the paleo-slope. The exact location of the westward pinch -out of the Torok comes with a degree of uncertainty. Figure 4 contains the Torok gross interval isochore. The western pinch -out in this interpretation shows the western limit of the Torok extending well past the western boundary of the current Oooguruk-Torok Oil Pool (CO 645)/AIO 37. The western pinch -out has the potential to extend farther up the paleo-slope for the entire western margin, as it does in the northwest corner of the Kuparuk River Unit (seismic section in Figure 7 shows this interpreted extent, see Figures 4 and 5 for seismic line location). It is due to this uncertainty, that the western boundary of the KRTOP be extended to be equivalent to the western margin of the Kuparuk River Unit. Fluid contacts within the Torok are uncertain. Both Pioneer and CPRI, as part of their applications for establishing Pool Rules from the AOGCC, addressed that a distinct oil -water contact (OWC) had not been identified within the Torok. Figure 5 contains a Top Torok depth structure map. It shows that the area is defined by a southeast plunging anticline. The Colville Delta No. 3 exploration well tested oil down to a true vertical depth subsea (T%JDSS) of -5,150 feet. The highest -known water is established in the Ivik No. 1 exploration well within the Oooguruk Unit at -5,212 feet TVDSS. In establishing the Kuparuk River - Torok Oil Pool Rules, CPAI observed that mobile water is present in the Torok beginning at a depth of - 5,190 to -5,275 feet TVDSS. It is undetermined whether this represents a single OWC or multiple OWC's. In either case, there appears to be a wide transition zone where oil and water will be produced together at varying percentages, driven by capillary effects within the reservoir. All the wells produced to date, even those above -5,190 feet TVDSS have produced some level of formation water from the start. Initial water -cuts range from approximately 10-75%, generally depending on depth. Given the high variability in water -cuts in the wells produced to date, the expected produced water -cut within the expansion area can only be estimated with production from additional wells. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 1 10 Figure 4. Map from Figure 1 with addition of Torok gross interval isochore color overlay, location of well log cross-section A -A', and location of seismic line B -B'. `� Gonornr')Hlips • x C®rtoe®Phillips ' • •, �s`.: Kalubik 1 Torok Reservoir Drs Administrative Boundaries and = X Proposals with Gross Isochore Oooguruk Unit B n: i Lamend_ .�. ! Bottom Hole Location +, A • Well Spider KRU Torok Oil Pool OoogurukTorok Oil Pool Nuna/3T Pad -• Torok PA [-- tea= r, Unit Outline 0 Coastline l Gravel Footprint Proposed Well Plan ---- 3S Pad , 1.1..r*' „JE.e. _ �. . w .}6 '. .l.. ! .y.Yv'! a i •'e M1 A N 0 1 2 4 Miles Figure 4. Map from Figure 1 with addition of Torok gross interval isochore color overlay, location of well log cross-section A -A', and location of seismic line B -B'. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 111 � a; q(' a Kalubik 1 *% A'..lvik 1 �. Bogu k U If Legend �• Bottom Hole Location Bottom CawcoPhHlips C®n®coPhiliips�o� mMrnaooc KRU Torok Oil Pool Torok Reservoir Administrative Boundaries and Proposals with Depth Structure . �.. i - Unit Outline 0 Figure 5. Map from Figure 1 with addition of Top Torok depth structure overlay, location of well log cross-section A -A', location of seismic tine B -B', and key wells mentioned in text. Legend �• Bottom Hole Location Bottom Well Spider KRU Torok Oil Pool Oooguruk Torok Oil Pool Nuna/3T Pad ,,„G.• Torok PA Unit Outline 0 Coastline l ?` Gravel Footprints Proposed Well Plan — — — — 3S Pad D Figure 5. Map from Figure 1 with addition of Top Torok depth structure overlay, location of well log cross-section A -A', location of seismic tine B -B', and key wells mentioned in text. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 1 12 Figure 6. Well log cross-section A -A' demonstrating lateral extent and continuity of the Torok (wells included are Placer 3, Moraine 1, Nuna 1 P61, Colv Delta 2, Kalubik 2, and Kalubik 1). Torok Oil Pool y J t }}rr ✓a. ;. 1\ _4f {{ r I 1 7 y C Figure 6. Well log cross-section A -A' demonstrating lateral extent and continuity of the Torok (wells included are Placer 3, Moraine 1, Nuna 1 P61, Colv Delta 2, Kalubik 2, and Kalubik 1). Torok Oil Pool CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 1 13 E 3.; GKA Merge 2017 0-20deg Stack (Time) B' Figure 7. Seismic cross-section B -B' demonstrating lateral extent and continuity of the Torok (Green horizon is equivalent to top of the Torok Oil Pool, Yellow horizon is equivalent to the base of the Torok Oil Pool). CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 1 1 APPLICATION FOR EXPANSION OF THE KUPARUK RIVER-TOROK OIL POOL July 24, 2020 Outline 1. Introduction 2. Kuparuk River -Torok Oil Pool History 3. Proposed Kuparuk River -Torok Oil Pool Expansion 4. Torok Development 5. Development Drilling Plans 6. Proposed Amendments to the Kuparuk River -Torok Conservation, and Area Injection Orders 7. No Underground Sources of Drinking Water List of Figures 1. Location Map 2. Torok Oil Pool Type Log 3. Chemistry of Sampled/Produced Water, 3S area 4. Confidential: Torok Oil Pool, Gross Interval Isochore 5. Confidential: Torok Oil Pool, Top Depth Structure 6. Confidential: Well Log Cross -Section A -A' 7. Confidential: Seismic Cross -Section 13-13' Confidential materials are submitted in Appendix 1. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 12 1. INTRODUCTION Document Scope This application is submitted for approval by the Alaska Oil and Gas Conservation Commission ("Commission") to expand the Kuparuk River -Torok Oil Pool (KRTOP) under Conservation Order (CO) 725, and Area Injection Order (AIO) 39. The proposed expansion area includes all lands acquired by ConocoPhillips Alaska, Inc. (CPA[) from Caelus Natural Resources Alaska, LLC (Caelus) in 2019. These lands were subsequently included in the 12th expansion of the Kuparuk River Unit (KRU), as it pertains to the Torok (Figure 1). This expansion would make the western, northern, and southern boundaries of the KRTOP equivalent to the current KRU boundary in the expansion area, to allow for development of the Torok over this area. 2. KUPA►RUK RIVER-TOROK OIL POOL HISTORY Original KRTOP CO 725 & AIO 39 CO 725, issued in July 2016, includes the accumulation of hydrocarbons common to and correlating with the interval between the measured depths of 4,991 and 5,272 feet in the Kalubik No. 1 well (Figures 1 & 2). This accumulation stratigraphically defines the Kuparuk River -Torok Oil Pool. AIO 39 authorizing injection of fluids for enhanced oil recovery from the KRTOP was also issued in July 2016. CO 725.001 In September 2016, the Commission modified the original order in the following ways: • Finding 10: Removal of the term "Regular production", due to the potential tax implications of this language. • Conclusion 12: Removal of language related to pre -production from injectors. • Expiration clause replaced by Rule 13 related to expiration date. CO 725.002 In May 2017, the Commission modified the original order to administratively remove the requirement for an annual reservoir review meeting for KRTOP. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 13 Requested Scope CPAI requests the Commission to amend CO 725 and AIO 39 to expand the Kuparuk River -Torok Oil Pool to include lands acquired by CPAI from Caelus in 2019. These lands were included in the 12" expansion of the KRU, as it pertains to the Torok, approved in August 2019 by the Alaska Department of Natural Resources (Figure 1., and Table 1.). These lands previously belonged to the Oooguruk Unit (OU) and were voluntarily contracted by Caelus. As these lands once belonged to the OU, the Oooguruk-Torok Oil Pool (OTOP) covers a portion of these lands. The OTOP will need to be contracted in order to accommodate the expansion of the Kuparuk River -Torok Oil Pool. This will allow KRU owners the ability to develop and implement enhanced oil recovery operations on these lands. Development plans are summarized in Section 4. 4. TOROK DEVELOPMENT Development Plans The expansion of the KRTOP will extend the existing pool to include the area currently covered by the OTOP. In addition, it is requested that the expansion include all acreage included in the 12th expansion of the KRU, as it pertains to the Torok reservoir. This would make the western, northern, and southern boundaries of the Kuparuk River -Torok Oil Pool consistent with the current unit boundary in the expansion area, as the Torok exists over an area larger than that covered by the existing OTOP on the lands under consideration. The expansion will allow for development of the Torok from KRU 3S pad, and the newly named KRU 3T pad (previously known as Nuna pad). The KRU owners began testing the Torok with a recompletion of the 3S-19 well in 2013. Since that time four horizontal wells (2 producers, and 2 injectors), and a vertical data collection well (Moraine 1) have been drilled to assess the Torok. To date 1.05 MMSTBO have been produced from the Torok from these wells. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from the paleo-Brookian shelf margin to the west. The sandstones and siltstones have been interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes. Gross thickness of the Torok reaches ^300 feet but thins basin -ward to the southwest, southeast, and northeast. The Torok also pinches -out to the west against the paleo-slope. Appendix 1 is a confidential section that expounds upon the geology of the pool expansion area. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 14 5. DEVELOPMENT DRILLING PLA. Planned Wells Two additional horizontal wells (1 producer, and 1 injector) have been approved by KRU working interest owners. These wells will be drilled as part of the next rotary drilling program at 3S pad (purple dashed lines emanating from 3S pad, displayed on Figure 1.). 6. PROPOSED AMENDMENTS TO KUPARUK RIVER-TOROK CONSERVATION ORDER AND AREA INJECTION ORDER Affected Area CPAI proposes the area subject to the conservation order for the KRTOP (CO 725), and corresponding area injection order (A10 39) be expanded, so that these orders apply to the following, restated lands: Umiat Meridian T11N, R8E Section 1- 4 all Section 9 - 12 all T12N, R7E Section 1 - 26 all Section 35 - 36 all T12N, R8E Section 2 - 11 all Section 13 - 36 all T13N, R7E Section 19 - 36 all T13N, R8E Section 19 - 21 all Section 28 - 34 all Table 1. Description of restated lands. 7. NO UNDERGROUND SOURCES OF DRINKING WATER No Underground Source of Drinking Water History In AIO 37, Conclusion #3, the AOGCC concluded that the Torok injection interval is not a potential source of drinking water. Finding #19 of the same order, provides supporting documentation. This documentation includes details of sampled water from the Torok from the ODST-45A being equivalent to 16,980 mg/1 (which is greater than the 10,000 mg/1 cut off for freshwater). Also, Finding #19 documents a ruling from the Environmental Protection Agency, authorized by Disposal Injection Order 31, that the Torok is not a source of drinking water. This is based on calculations from ten nearby wells in the Torok ranging from 17,000 to 24,000 mg/I NaCl. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 15 In AIO 39, Conclusion #3, the AOGCC determined that the Torok injection interval does not contain freshwater and is not a potential underground source of drinking water. Finding #19 of the same order, provides a summary of supporting documentation. This documentation includes water samples collected from Moraine 1 core measurements (21,363 mg/I of total dissolved solids) and produced water samples from KRU 3S-19 and 3S-620 wells ranging from 16,000 to 20,000 mg/I NaCl. Additional data related to No Underground Source of Drinking Water In addition to the above Conclusions, and Findings, CPAI has sampled additional waters from the Torok interval in several wells in the 3S area. The composition of the water is on average 18,635 mg/I, consistently above the 10,000 mg/I cut off for freshwater. A summary of the tested waters from all the 3S area wells is included in Figure 3. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 16 txA s, t-qa.`a°A. Kalubik 1 =d-`.: ConocoPi1llllp5 Torok Reservoir Administrative Boundaries and Proposals Legend Bottom Hole LocationWell SpiderKRU Torok Oil Pool Oooguruk Torok Oil Pool wsoa��r•a• �r� • d Torok PA F Unit Outline Gravel Footprint CoastlineProposed Well Plan Air Figure 1. Map displaying existing boundaries and proposed amendments related to the Torok Oil Pool: current Kuparuk River -Torok Oil Pool (CO 725)/AIO 39 (blue polygon with blue diagonal lines), current Oooguruk Torok Oil Pool (CO 645)/AIO 37 (green polygon with green horizontal lines), proposed area to be amended to the Kuparuk River -Torok Oil Pool/A10 39 (blue shaded polygon), Oooguruk Torok Participating Area (red polygon), next round of approved Torok horizontal wells (purple dashed lines emanating from 3S pad). A note on the wellbore originating from the Oooguruk pad that extends into the Kuparuk River Unit: This is the ODST-47, a well which has subsequently been P&A'd. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 17 Kuparuk River= Torok Oil Pool �� DTCBtC�i) 70 1�i€f yCt Figure 2. The Kalubik No. 1 well serves as the type log for both the Oooguruk, and Kuparuk River -Torok Oil Pools (The above image is presented for illustration purposes. Refer to the well log measurements recorded in exploratory well Kalubik No. 1 for the precise representation of the Kuparuk-Torok Oil Pool.). See figure 1 for location of the Kalubik 1. be 01 Pte. FM O:oy 10 id4 i:T a e ZCk 1 65 CAIIAX 265 9ffJ si - $.tai? ' T`4TJJ-S3 R REA"} Pot .F' AnStRF'X) NPOR �� DTCBtC�i) 70 1�i€f yCt Figure 2. The Kalubik No. 1 well serves as the type log for both the Oooguruk, and Kuparuk River -Torok Oil Pools (The above image is presented for illustration purposes. Refer to the well log measurements recorded in exploratory well Kalubik No. 1 for the precise representation of the Kuparuk-Torok Oil Pool.). See figure 1 for location of the Kalubik 1. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 18 well Sample Date Total Cations (mg/I) Total Anions (mg/1) Total ionic composition (mg/1) Comment Moraine 1 2/26/2015 8,128.5 13,203.7 21,332.2 average of 2 RDT samples 3S-19 8/23/2013 6,969.3 11,414.0 18,383.3 anion Cl only 3S-19 9/15/2013 7,567.6 11,248.0 18,815.6 anion Cl only 3S-19 11/4/2013 7,608.1 11,145.0 18,753.1 anion Cl only 3S-19 5/21/2014 7,797.6 12,792.2 20,589.8 3S-19 10/11/2014 7,205.3 10,951.2 18,156.5 3S-611 11/8/2019 8,157.2 11,332.5 19,489.7 anions Cl, and SO4 only 3S-611 3/31/2020 8,158.2 10,508.2 18,666.4 3S-613 7/22/2016 5,964.1 54,969.8 60,933.9 likely contaminated 3S-613 7/28/2016 5,854.9 9,528.4 15,383.3 likely dilluted with frac water 3S-613 8/12/2016 6,014.1 9,755.4 15,769.5 likely dilluted with frac water 35-613 8/14/2016 6,614.9 10,191.8 16,806.7 likely dilluted with frac water 35-613 8/16/2016 6,583.3 10,150.1 16,733.4 likely dilluted with fracwater 35-613 8/23/2016 7,276.4 10,177.2 17,453.6 3S-620 6/2/2015 13,615.8 17,833.5 31,449.3 likely contminated; anions Cl, and SO4 only 3S-620 6/4/2015 8,828.7 13,168.4 21,997.1 cation Na, and K; anion Cl only 3S-620 6/6/2015 8,398.7 10,935.3 19,334.0 cation NA only; anion CI only 3S-620 6/8/2015 11,518.0 10,359.5 21,877.5 cation NA only; anion Cl only 3S-620 7/4/2015 6,780.9 12,085.9 18,866.8 3S-620 9/11/2015 7,398.4 8,772.2 16,170.6 anion Cl only 3S-620 12/20/2015 6,681.3 11,024.8 17,706.1 3S-620 1/26/2017 7,053.6 11,501.5 18,555.1 3S-620 10/22/2017 8,081.7 12,421.7 20,503.4 7,556.0 11,079.4 18,635.4 Average Unless otherwise noted, cations include Ca, Mg, Na, and K Unless otherwise noted, anions include Cl, CO3, HCO3, and SO4 Samples noted as 'likely contaminated"are not included in averages Figure 3. Summary of Torok water composition from samples collected from 3S area wells. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 19 Additional Geologic Information To expand on the information included in the non -confidential portion of the application, the following is provided for additional context for the Torok. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from gullies associated with the paleo-Brookian shelf margin to the west. The sandstones and siltstones are interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes (see Figure 6 for a well log cross-section demonstrating the lateral extent of the Torok, see Figures 4 and 5 for section location). Gross thickness of the Torok reaches —300 feet but thins basin -ward to the southwest, southeast, and northeast. To the west it pinches -out against the paleo-slope. The exact location of the westward pinch -out of the Torok comes with a degree of uncertainty. Figure 4 contains the Torok gross interval isochore. The western pinch -out in this interpretation shows the western limit of the Torok extending well past the western boundary of the current Oooguruk-Torok Oil Pool (CO 645)/AIO 37. The western pinch -out has the potential to extend farther up the paleo-slope for the entire western margin, as it does in the northwest corner of the Kuparuk River Unit (seismic section in Figure 7 shows this interpreted extent, see Figures 4 and 5 for seismic line location). It is due to this uncertainty, that the western boundary of the KRTOP be extended to be equivalent to the western margin of the Kuparuk River Unit. Fluid contacts within the Torok are uncertain. Both Pioneer and CPAI, as part of their applications for establishing Pool Rules from the AOGCC, addressed that a distinct oil -water contact (OWC) had not been identified within the Torok. Figure 5 contains a Top Torok depth structure map. It shows that the area is defined by a southeast plunging anticline. The Colville Delta No. 3 exploration well tested oil down to a true vertical depth subsea (TVDSS) of -5,150 feet. The highest -known water is established in the Ivik No. 1 exploration well within the Oooguruk Unit at -5,212 feet TVDSS. In establishing the Kuparuk River - Torok Oil Pool Rules, CPAI observed that mobile water is present in the Torok beginning at a depth of - 5,190 to -5,275 feet TVDSS. It is undetermined whether this represents a single OWC or multiple OWC's. In either case, there appears to be a wide transition zone where oil and water will be produced together at varying percentages, driven by capillary effects within the reservoir. All the wells produced to date, even those above -5,190 feet TVDSS have produced some level of formation water from the start. Initial water -cuts range from approximately 10-75%, generally depending on depth. Given the high variability in water -cuts in the wells produced to date, the expected produced water -cut within the expansion area can only be estimated with production from additional wells. PAGES 10-13 HELD CONFIDENTIAL