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Home My WebLink About2017 Deep Creek UnitHilcorp Alaska, LLC March 26, 2018 RECEIVED APR 0 2 2018 Hollis French, Chairman Alaska Oil & Gas Conservation Commission 333 W. 7' Avenue, Suite 100 Anchorage, Alaska 99501-3539 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 RE: DEEP CREEK UNIT, HAPPY VALLEY FIELD, STATE OF ALASKA, 2017 ANNUAL RESERVOIR REVIEW Dear Commissioner French: 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 13th Annual Reservoir Review and corresponds to events during the 2017 calendar year. Note that the Happy Valley Field has been on production since November 2004 and the cumulative production as of 12/31/2017 is 34.8 BSCF with an average rate of 5593 MSCFD in December 2017. Anthony McConkey Reservoir Engineer R. 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. HVA -01 7,155 Lower Tyonek P datum 2,168 SITP Lower Tyonek datum depth(tvdss) 1160 11/3/2017 HVA -08 4,964 Beluga 924 757 9/16/2017 HVB-13 3,798 Upper Tyonek 1513 1008 6/12/2017 HVB-14 1,689 Sterling 446 262 5/12/2017 HVB-15 2,812 Upper Beluga 614 234 4/22/2017 The resulting average reservoir pressure by major zone is shown below. Since B-13 is commingled with the Beluga sands, the value used for Upper Tyonek pressure at datum was pulled from the latest SITP in an Upper Tyonek-only producing well — which in this case was HVA -09 from November 2016 (SITP = 713psig). Happy Valley Major formations Sterling Upper Beluga Bela Upper Tyonek Lower Tyonek datum depth(tvdss) ( 2000 3500 5000 7500 9000 init P_datum(psig) 860 1505 2150 3225 3870 2017 P datum (psig) 234 757 866 2168 b) Workovers & surveys of the existing wells. a. No new drillwells were brought online in 2017. b. No workovers or downhole surveys we're taken in 2017. Page 2 c) Production for 2017 Calendar Year (sub -divided by major formation) Well 2017 Cumulative Production, Mscf Happy Valley Tract Ha Valle PA Happy y Sterling Upper Beluga Beluga Upper Tyonek Lower Tyonek HVA -01 32 32 HVA -02 71,657 71,657 HVA -03 0 0 HVA -08 100,577 25,144 75,433 HVA -09 86,010 86,010 HVA -10 403,201 403,201 HVA -11 0 0 0 0 HVB-12 445,865 180,881 264,984 HVB-13 19,149 1,730 17,419 HVB-14 34,901 34,901 HVB-15 514,986 514,986 HVB-17 526,396 526,396 Cum Gas Volume (MCF) 2,202,774 34,901 514,986 26,874 762,944 863,069 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