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Home My WebLink About2016 Deep Creek UnitHileorp Alaska, LLC March 20, 2017 RECEIVED Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 100 Anchorage, AK 99503 Phone: 907/777-8414 Fax: 907/777-8580 dduffy@hilcorp.com Cathy Foerster, Chairman MAR 31 2017 Alaska Oil & Gas Conservation Commission 333 W. 7 1 Avenue, Suite 100 Anchorage, Alaska 99501-3539 RE: DEEP CREEK UNIT, HAPPY VALLEY FIELD, STATE OF ALASKA, 2016 ANNUAL RESERVOIR REVIEW Dear Commissioner Foerster: In accordance with Conservation Order No. 553, Hilcorp Alaska, LLC ("Hilcorp"), as Operator, hereby submits for your review the following Annual Reservoir Review for the Happy Valley Field. This is the 12th Annual Reservoir Review and corresponds to events during the 2016 calendar year. Note that the Happy Valley Field has been on production since November 2004 and has cumulative production as of 12/31/2016 is 32.4 BSCF with an average rate of 6093 Mscfd in December. Sincerely, Nat Trudi Hallett Reservoir Engineer Jim Young Reservoir Engineer Reservoir review items per CO553 rule 4 a) Summary and analysis of reservoir pressure by major formation Because all of the Happy Valley wells have commingled production (from numerous sands), it is difficult to obtain precise individual sand reservoir pressures. Estimates can be made by reviewing pressures in wells with only one major zone open. The most recent shut-in wellhead pressures of wells with a single primary producing zone were compared to previous surveys (to verify fluid level for correcting to datum pressure using a gas gradient of .03 psi/ft) are shown below. IN11 top perf I depth major fm P_datum sl 'P Major formations HVA -01 7,155 Lower Tyonek 2,108 1100 6/18/2016 HVA -08 4,964 Beluga 1,162 998 11/3/2015 HVA -11 6,382 Upper Tyonek 925 253 10/4/2016 HVB-14 1,689 Sterling 440 256 11/10/2016 HVB-15 2,812 Upper Beluga 650 270 5/18/2016 HVB-17 9,423 Lower Tyonek 2,271 2,170 5/1/2016 The resulting average reservoir pressure by major zone is shown below. Two wells, HVA -01 and HVB- 17 produced from the same major formation and were within the expected range based on timing and location, so an average was used for Lower Tyonek reservoir pressure. Happy Valley PRO I Sterling Upper Beluga Upper Lower Major formations Beluga Tyonek Tyonek datum_depth(tvdss) 2000 3500 5000 7500 9000 init P datum(psig) 860 1505 2150 3225 3870 2016 P_datum si (p g) 400 561 1158 2000 b) Workovers & surveys of the existing wells. The following work was performed by Hilcorp to optimize production from the Deep Creek Unit in 2016. a. HVB-17 (2015 drill well) was placed in production in April 2016 producing 2mmcfd at 1400psi and has declined to 1.3mmcfd at 500psi by December 2016. b. No workovers or downhole surveys we're taken in 2016. Page 2 c) Production for years 2015-2016 (since last report) sub -divided by ma'or formation 2015-6 Happy Valley Tract Happy Valley PA Sterling Upper Beluga Upper Lower Gas prod well mmscf Beluga Tyonek Tyonek HVA -01 172,471 172,471 HVA -02 164,200 164,200 HVA -03 HVA -08 58,356 175,067 0 233,423 HVA -09 0 281,539 0 281,539 HVA -10 0 920,815 0 920,815 HVA -11 0 0 0 HVB-12 0 400,911 587,321 988,232 HVB-13 4,671 47,044 0 51,715 HVB-14 164,839 164,839 HVB-15 1,415,727 1,415,727 HVB-17 291,307 291,307 Cum Gas 164,839 1,415,727 63,027 1,825,376 1,215,299 Volume 4,684,268 (MCF) d) Progress and tests to expand pool productive limits: No new exploration and development wells were drilled by Hilcorp in the Happy Valley PA. Page 3