The URL can be used to link to this page

Home My WebLink AboutO 179Other Order 179 Docket Number: OTH-20-056 1. January 8, 2018 AOGCC request for cost estimates 2. August 31, 2018 Furie response to AOGCC request (confidential, held in secure storage) 3. November 19, 2020 Notice of hearing, affidavit, email and bulk mailing 4. November 23, 2020 Furie cut off casing estimates 5. December 15, 2020 Furie updated cut off casing estimates 6. December 18, 2020 AOGCC questions to Furie for hearing 7.---------------------- Comments from CIRCAC, Cook Inletkeeper, and USCG 8. December 23, 2021 Hearing transcript, Furie presentation, sign -in sheet 9. January 12, 2021 AOGCC email to Furie to get DNR's position regarding Furie's reclassification request. 10. January 25, 2021 Letter from DNR re: Furie's request to reclassify suspended wells 11. February 11, 2021 Cook Inletkeeper's follow up comments 12.-------------------- NOAA navigational charts and database (confidential, held in secure storage) 13. March 3 , 2021 Furie's motion for reconsideration 14. March 22, 2021 Furie additional comments to Other Order 179 15. March 22, 2021 Letter from DEC re: Furie C-plan ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7tn Avenue Anchorage, Alaska 99501 Re: Request by Furie Operating Alaska, ) Docket Number: OTH-20-056 LLC (Furie) to change current status of ) Final Order Re. Other Order 179 offshore exploration wells KLU 1, KLU 2A, ) and KLU 4 from "Suspended" to "Plugged ) Furie Operating Alaska, LLC and Abandoned." ) Well Status Change Request April 26, 2021 FINAL ORDER ON RECONSIDERATION Furie Operating Alaska, LLC (Furie) submitted a request to have the status of offshore exploration wells KLU 1, KLU 2A, and KLU 4 changed from "Suspended" to "Plugged and Abandoned." Furie also requested to be relieved of its obligations under 20 AAC 25.172(b) to cut off the subsurface well casings which extend 15 feet above the sea floor. On December 23, 2020, a hearing was held on Furie's requests. After the hearing, both the Department of Natural Resources and Cook Inletkeeper provided additional information on Furie's request. On March 1, 2021, the Alaska Oil and Gas Conservation Commission (AOGCC) issued Other Order 179 granting Furie's request to change the status of the wells to plugged and abandoned but denying Furie's request to be relieved of the requirement to remove the well casings. Furie requested reconsideration and was given until March 26, 2021, to provide additional input. Furie's request for reconsideration is a reiteration of the arguments it presented in the December 23, 2020, hearing. Furie's request to be relieved of the obligation to remove the well casings is DENIED. Other Order 179 issued on March 1, 2021 is the AOGCC's final decision. DONE at Anchorage, Alaska and dated April 26, 2021. OIL qNO Daniel T. Dig itaIlysigned by Daniel T. sea mount, Jr. Jessie LDigitally signed by Jessie L. L. Chmielowski Seamount, Jr. Date: 2021.04.26 08:58:14-08'00' Date: 2021.04.2608:52:24 Chmielowski _08,00, Daniel T. Seamount, Jr. Jessie L. Chmielowski Eky Commissioner Commissioner ON APPEAL NOTICE This order or decision and denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, this order and decision denying reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Salazar, Grace (CED) From: Colombie, Jody J (CED) Sent: Monday, April 26, 2021 12:27 PM To: Salazar, Grace (CED) Subject: FW: Other Order 179 - Furie Operating Alaska, LLC. Attachments: Otherl79_Final_Reconsideration.pdf From: Colombie, Jody J (CED) Sent: Monday, April 26, 2021 12:26 PM To: aogcc_public_notices@list.state.ak.us Subject: Other Order 179 - Furie Operating Alaska, LLC. Re: Request by Furie Operating Alaska, LLC ) Docket Number: OTH-20-056 (Furie) to change current status of offshore ) Final Order Re. Other Order 179 exploration wells KLU 1, KLU 2A, and KLU 4 from ) "Suspended" to "Plugged and Abandoned." ) Furie Operating Alaska, LLC Well Status Change Request ciclh' .1. (,"olonibie A06(V Special Assistant .Alaska Oil uml Gus ('onservation C'olwnission Statc of.Alaska 333 West ild'.lvenue .Ain:horage, AK 99501 Phalle A'utuber : 90?-793-12 21 A'tmiil: joclv.colonibie%ir)al(rska.gov April 26, 2021 1 Salazar, Grace (CED) From: Salazar, Grace (CED) Sent: Monday, April 26, 2021 9:11 AM To: John Hendrix; h.vanwyhe@furiealaska.com Subject: Other Order Docket No. OTH-20-056 Attachments: Other179_Final_Reconsideration order- Furie 20210423.pdf Please see attached. Re: Request by Furie Operating Alaska, LLC (Furie) to change current status of offshore exploration wells KLU 1, KLU 2A and KLU 4 from "Suspended" to "Plugged and Abandoned." Docket Number: OTH-20-056 Other Order 179 Furie Operating Alaska, LLC Well Status Change Request April 26, 2021 FYI: I have recently joined the AOGCC as the Special Assistant. If you have any questions, my direct line is (907) 793- 1221. �2ac�e Respectfully, M. Grace Salazar, Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Direct: (907) 793-1221 Email: grace.salazar@alaska.gov https://www.comrnerce.alaska.gov/web/aogcc/ 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 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7t' Avenue Anchorage, Alaska 99501 Re: Request by Furie Operating Alaska, ) Docket Number: OTH-20-056 LLC (Furie) to change current status of off- ) Interim Order Re. Other Order 179 shore exploration wells KLU 1, KLU 2A ) and KLU 4 from "Suspended" to "Plugged ) Furie Operating Alaska, LLC and Abandoned." ) Well Status Change Request March 15, 2021 INTERIM ORDER ON RECONSIDERATION Furie Operating Alaska, LLC (Furie) has requested reconsideration of Other Order 179, entered March 1, 2021. Among the bases for Furie's request is a claim that it was never notified of the public comment period reopening and had no opportunity to review the additional comments or provide its own additional comments. To ameliorate any prejudice to Furie, Furie may have until March 26, 2021 to review the additional comments from Cook Inletkeeper and provide its own additional comments. DONE at Anchorage, Alaska and dated March 15, 2021. Digitally signed by Jessie L. Digitally signed by Daniel T. Daniel T.Seamount,Jr. JessieLChmielowski Seamount, Jr. Date: 2o-0,00, Chmielowski Date: 20-08'015 t assaa-aa'oo' t as sa o-os'oo' Daniel T. Seamount, Jr. Jessie L. Chmielowski Commissioner Commissioner Carlisle, Samantha J (CED) From: Carlisle, Samantha J (CED) Sent: Monday, March 15, 2021 3:10 PM To: AOGCC Public Notices Subject: Other Order 179 interim Attachments: Other179 interim.pdf Request by Furie Operating Alaska, LLC (Furie) to change current status of offshore exploration wells KLU 1, KLU 2A and KLU 4 from "Suspended" to "Plugged and Abandoned." Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West 711, Avenue Anchorage, AK 99501 (907) 793-1223 ONI I0 ;l'7 M I In' tioti( F— Tlus e-(nail inc hafingany at.tachenents, eont,uns information IrAwn the Al,2ska Oil in( I ( ;<u C:onse>r,,atio,,n onnnrission State of Ataska and is for the, Sole ttx' of the untended lvcipient(s). It Inav Contain conficicntial mnd;'or priv ilc I;ed infornnation. t'lle unauthori>ed revicrw, use or disclosure of such information ma} violatA� state Or federal l IVV. tf Toll lure an unintended recipient of tints C-mail, ple�3ta€ drlette it, ovittnotII tirst srry ing or fcnnvarditip, it, and, so that the A0('X C is aware of they nni;takC in sending it to YOU, a)III act IiamarnIha Carlisle at (0 0 ) "r�3-12 � or 5amacntha.C� ee lesle=�'�=al as}.a.t>ov. 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 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7tn Avenue Anchorage, Alaska 99501 Re: Request by Furie Operating Alaska, ) Docket Number: OTH-20-056 LLC (Furie) to change current status of off- ) Other Order 179 shore exploration wells KLU 1, KLU 2A ) and KLU 4 from "Suspended" to "Plugged ) Furie Operating Alaska, LLC and Abandoned." ) Well Status Change Request March 1, 2021 DECISION AND ORDER On October 23, 2020 and November 10, 2020, Furie Operating Alaska, LLC (Furie) submitted Application for Sundry Approval forms to change the status of offshore exploration wells KLU 1, KLU 2A and KLU 4 from "Suspended" to "Plugged and Abandoned." Furie also requested that no further well or site clearance work be required. All three wells have structural casing extending 15 feet above the seabed floor. Alaska Oil and Gas Conservation Commission (AOGCC) regulations governing site clearance are separate from regulations governing plugging and abandonment. Therefore, on its own motion, the AOGCC scheduled a hearing to consider Furie's request. Pursuant to 20 AAC 25.540, the AOGCC scheduled a public hearing on December 23, 2020. On November 19, 2020, the AOGCC published notice of that hearing on the State of Alaska's Online Public Notice website and the AOGCC's website, electronically transmitted the notice to all per- sons 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 November 20, 2020, the notice was published in the Anchorage Daily News. Prior to the hearing, written comments were received from the United States Coast Guard (USCG), Cook Inlet Regional Citizens Advisory Council (CIRCAC), and Cook Inletkeeper. On December 23, 2020, the AOGCC held the hearing on Furie's requests. After the hearing, the AOGCC requested information from the Department of Natural Resources (DNR) regarding Furie's requests. DNR's comments were received on January 25, 2021. DNR's comments were provided to USCG, CIRCAC and Cook Inletkeeper on January 25, 2021. The AOGCC left the record open until February 8, 2021 in case any party wished to submit addi- tional comments. On February 11, 2021, AOGCC received an additional comment by email from Cook Inletkeeper. Other Order 179 March 1, 2021 Page 2 of 3 FINDINGS: 1. Furie states that all downhole barriers and surface plugs have been set in wells KLU 1, KLU 2A and KLU 4 per AOGCC regulations. As a result, Furie claims the wells have been rendered incapable of any production or flow and requests the status of the three wells be changed from "suspended" to "plugged and abandoned." 2. Furie's KLU 1, KLU 2A and KLU 4 wells were drilled and suspended between 2011 and 2013. Each well was left with casing extending 15 feet above the seafloor. 3. Furie also requests AOGCC grant a waiver from the requirements of 20 AAC 25.172(b), Off- shore Location Clearance, such that Furie would not be required to remove the casings from the three wells. In support of its request, Furie claims AOGCC previously granted "abandon- ment" status and site clearance without removal of well casings on six wells in the 1960s that are in proximity to Furie's Kitchen Lights Unit. 4. Furie submitted Application for Sundry Approval forms (sundries) to suspend offshore ex- ploration wells KLU 1, KLU 2A and KLU 4 on August 7, 2012, November 1, 2012 and Sep- tember 20, 2013, respectively. In each of the sundries, Furie stated that the purpose of the work was to temporarily suspend the wells in anticipation of future reentry. Specifically, in all three wells, a variance to the surface cement plug was requested because reentry to the well would require preservation of the mudline hanger profile. Furie also asked to cut the casing a minimum of 10 feet above the mudline based on a recommendation from the mudline system contractor that this would facilitate tying back the 30" structural pipe for reentry. In 2014, Furie submitted sundries to reenter, perforate and flow test well KLU 4. These sundries were later withdrawn due to a change of plans and with the stated intent to resubmit them the following year. 5. During the hearing on December 23, 2020, Furie stated that the three wells have no future utility as service or production wells, and they are most likely not viable candidates for redrill. 6. Since the enactment of 20 AAC 25.172 in 1986, seventeen offshore wells have been drilled from a mobile offshore drilling unit (MODU), including Furie's KLU 1, KLU 2A, and KLU 4. Of those seventeen wells, six are classified as producers, four are classified as suspended, and seven are deemed plugged and abandoned. All seven of the wells deemed plugged and abandoned were granted site clearance only after removal of the well casings. 7. USCG indicates that a lack of awareness of the well structures would be a navigational con- cern, and that, at a minimum, there needs to be communication with NOAA to update navi- gation charts to show Furie's protruding casings. 8. CIRCAC opposes Furie's request due to navigational risks for marine vessels, the presence of large boulders in the vicinity, extreme tidal fluctuations, high currents, and setting a precedent in Alaska for wells drilled from MODUs. 9. Cook Inletkeeper also opposes Furie's request due to the presence of large boulders in the vicinity, extreme tidal fluctuations, high currents, and setting a precedent in Alaska for wells drilled from MODUs. 10. DNR supports Furie's request to reclassify the wells from suspended to plugged and aban- doned and to grant site clearance with the well casings 15 feet above the seabed floor. How- ever, DNR also states that it supports the requirements of 20 AAC 25.172 and contends this action should not establish a change in policy or set a precedent. Other Order 179 March 1, 2021 Page 3 of 3 CONCLUSIONS: The well barriers and cement plugs in place in Furie's wells, KLU 1, KLU 2A and KLU 4, are compliant with 20 AAC 25.112, including the alternate placement of the surface cement plugs per 20 AAC 25.112(i). The decision to classify the wells as "Suspended" was based upon Furie's request to preserve the ability to reenter the wells. 2. The six wells cited by Furie as a basis for its request to waive site clearance requirements were granted site clearance in the 1960s, before the current offshore site clearance regulation was enacted. Granting site clearance for Furie's wells in their current condition, wells which were abandoned after the site clearance regulations were enacted in 1986, could set a precedent for future offshore site clearances in the Cook Inlet and in all Alaskan waters. Including the locations and above-seafloor heights of the KLU 1, KLU 2A and KLU 4 casings on NOAA navigation charts will help minimize risk to public safety. NOW THEREFORE IT IS ORDERED: Furie's request to change the status of wells KLU 1, KLU 2A and KLU 4 from "Suspended" to "Plugged and Abandoned" is GRANTED. Furie's request for a waiver to the site clearance regu- lation, i.e. to leave the three wells with structural casing 15 feet above the seafloor, is DENIED. Until site clearance is granted by the AOGCC, wells KLU 1, KLU 2A and KLU 4 will be included in Furie's wellhead count for bonding purposes pursuant to 20 AAC 25.025(b)(2) and 20 AAC 25.025(d). Furie shall provide well location coordinates and casing height information to NOAA for inclusion on the "NOAA Navigational Chart — Cook Inlet" and provide evidence to the AOGCC that the information has been submitted to NOAA by March 15, 2021. DONE at Anchorage, Alaska and dated March 1, 2021. Digitally signed by Jessie L. Digitally signed by DanielT. DanieiT.Seamount,Jr. Jessie L. Chnnielowski Seamou nt, Jr, Date: 2021.03.01 Chmielowski Date: 2021.03.01 t 6:2629-09'00' 16:13:55-09'00' Daniel T. Seamount, Jr. Jessie L. Chmielowski Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10-days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on recon- sideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day ofthe period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Colombie, Jody J (CED) From: Colombie, Jody J (CED) Sent: Monday, March 1, 2021 4:44 PM To: John Hendrix Cc: Mary Ann Pease Subject: Other Order 179 Attachments: other179.pdf Categories: Yellow Category Please see attached. Re: Request by Furie Operating Alaska, LLC ) Docket Number: OTH-20-056 (Furie) to change current status of offshore ) Other Order 179 exploration wells KLU 1, KLU 2A and KLU 4 from ) "Suspended" to "Plugged and Abandoned." ) Furie Operating Alaska, LLC Well Status Change Request Jody J. Colombie AOGCC Special Assistant Alaska Oil and Gas Conservation Commission State of Alaska 333 West 2 h Avenue Anchorage, AK 99501 Phone Number: 907-793-1221 Email: jody.colombie@alaska.gov March 1, 2021 1 Colombie, Jody J (CED) From: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Sent: Tuesday, March 2, 2021 8:10 AM To: AOGCC Public Notices Subject: [AOGCC_Public_Notices] Other Order 179 - Furie Attachments: other179.pdf Categories: Yellow Category Please see attached. Re: Request by Furie Operating Alaska, LLC (Furie) to change current status of offshore exploration wells KLU 1, KLU 2A and KLU 4 from "Suspended" to "Plugged and Abandoned." Jody J Colombie AOGCC Special Assistant Alaska Oil and Gas Conservation Commission State of Alaska 333 West 7"h Avenue Anchorage, AK 99501 Phone Number: 907-793-1221 Email: Ldy.colombiegalaska.Qov Docket Number: OTH-20-056 Other Order 179 Furie Operating Alaska, LLC Well Status Change Request March 1, 2021 List Name: AOGCC—Public—Notices@list.state.ak.us You subscribed as: jody.colombie@alaska.gov Unsubscribe at: http:Hlist.state.ak.us/mailman/options/aogcc_public_notices/jody.colombie%40alaska.gov 1 Bernie Karl K&K Recycling Inc. Gordon Severson Richard Wagner P.O. Box 58li3201 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 THE STATE 'ALASKA (;Ob'L:1M IZ J%11K1.. OUNITAVY March 22, 2021 Rick Dusenbery Furie Operating Alaska, LLC 188 W. Northern Lights Blvd, Suite 620 Anchorage AK 99503 Department of Environmental Conservation DIVISION OF SPILL PREVENTION AND RESPONSE Prevention, Preparedness, and Response Program 555 Cordova Street Anchorage, AK 99501-2617 Main: 907-269-7557 Fax: 907-269-7648 www.dec.alaska.gov Facility #: 5634 Subject: Furie Operating Alaska, LLC Oil Discharge Prevention and Contingency Plan, ADEC Plan #: 16-CP-5184; Sufficient for Public Review and Public Notice Instructions Dear Mr. Dusenbery: The Alaska Department of Environmental Conservation (department) received a plan renewal. application package for the Furie Operating Alaska, LLC Oil Discharge Prevention and Contingency Plan on March 17, 2021 The application package was submitted for evaluation as required by the state's oil and hazardous substances pollution control regulations, 18 AAC 75. The application package was determined sufficient for review as defined in 18 AAC 75.990(195) on March 22, 2021. and will be reviewed in accordance with the procedures outlined in 18 AAC 75.455. Additional information may be requested, based on the department's technical review and comments received during the public comment period. The review schedule is designated as follows: Start of public comment period (Day One): March 26, 2021 End of public comment period (Day 30); public comments and requests for additional information due by 5:00 pm: April 26, 2021 A single public notice of this application must be published as required by 18 AAC 75.455(b)(5) and appear in the following newspaper(s) on or before Day One: Anchorage Daily News; Homer News; Mat -Su Valley Frontiersman.. Please review the enclosed notice for accuracy and contact me if any changes are necessary. Furie is responsible for arranging and paying for the publication. Proof of publication must be provided to the department in the form of the original affidavit from the newspaper by Day 30. Failure to have the public notice published on or before Day One will require the issuance and publication of a new public notice with changes to the comment period as needed. Rick Dusenbery 2 ( March 22, 2021 Furie Operating Alaska LLC Furie is responsible for providing copies of the application package to the reviewers identified in the enclosed distribution list before Day One, to ensure they have sufficient time to review and comment on the application package. Proof of distribution must be provided to the department The plan will also be available at the department's website http://dec.alaska.gov/Applications/SPAR/PublicWC/IPP/CPlansUnderReview for public review starting on Day One. If you have any questions, please contact me at 907-269-7566 or john.harry@alaska.gov. Sincerely, 5�,W4f, Y7� John Harry EPS III Enclosures: Draft Public Notice Application Package Distribution List cc with enclosure: Jade Gamble, ADEC C-Plan Reviewer, ADNR Jeanette Alas, ADFG Lynnda Kahn, USFWS Bob Whittier, USEPA Steve Catalano, CIRCAC Karyn Noyes, KPB USCG, Western Alaska Facilities USCG Sector - Homer Detachment Jim Regg, AOGCC Jody Colombie, AOGCC Bob Shavelson, Cook Inletkeeper Todd Paxton, CISPRI Greg LeBeau, Witt O'Brien's Douglass Cooper, USFWS Marvin Yoder, City of Homer Jeremy Michels, Risk Management LLC Roberta Highland, Kachemak Bay Conservation Jamie Auletta, CISPRI Dan Nelson, KPB Spill Response Coordinator, USFWS Kirsten Ballard, ARCTOS PUBLIC NOTICE STATE OF ALASKA DEPARTMENT OF ENVIRONMENTAL CONSERVATION An application package for an Oil Discharge Prevention and Contingency Plan, under Alaska Statute 46.04.030 and in accordance with 18 AAC 75, has been received by the Department of Environmental Conservation. The details are as follow: Applicant: Furie Operating Alaska 188 W Northern Lights Blvd Suite 620 Anchorage, Alaska 99503 Proposed Activity: Review of a plan renewal application package for an Oil Discharge Prevention and Contingency Plan that is required to commit adequate resources to meet all planning requirements for prevention and response for a realistic maximum discharge from prospective offshore Cook Inlet exploratory drilling operations conducted by Furie Operating Alaska LLC. One or more wells could be drilled at some time in the future on existing oil and gas leases. The plan addresses potential exploration drilling locations within the Cook Inlet Kitchen Lights Unit to demonstrate Furie Operating Alaska' spill prevention and response capabilities to meet the response planning standard (RPS) of 5,500 barrels of oil per day (bopd) over fifteen days for a total of 82,500 barrels. Furie Operating Alaska may obtain leases or operatorship of other leases in the future. Any new exploration locations will be amended to the plan in site -specific appendices. Location: Cook Inlet Region (3) Potential Results: A potential risk exists of oil spills entering the lands or waters of the state as a result of this operation. Activity identified as: State Contingency Plan Number 21-CP-5184 Any person wishing to submit a request for additional information or provide comments regarding this application may do so electronically via our public notice site at https://dec.alaska.gov/comment/. If you are unable to submit comments via this site, you may submit them in writing to John Harry, Department of Environmental Conservation, SPAR/PPRP, SPAR/PPR, 555 Cordova Street, Anchorage, AK 9950, 907-269-7566 (phone), 907-269-7687 (fax), or john.harry@alaska.gov. The full contents of all submitted comments are considered public records and will be posted online in full during the public comment period. Comments submitted in writing directly to the Plan Reviewer will be uploaded to the public comment site. It is preferable for commenters to submit directly through the public comment site. The public comment period for this application begins on March 26, 2021 and ends at 11:59 p.m. on April 26, 2021. Requests for additional information and comments must be received by 11:59 pm on April 26, 2021. It is the responsibility of the commenter to verify that facsimile and email submissions are received by the deadline. An additional comment period may be provided in accordance with 18 AAC 75.455(d). Copies of the application package are available for public review at the following locations: the department's office at 555 Cordova Street, Anchorage, AK 99501; and the department's website at http: / / dec. alaska.gov/Applications / SPAR/Public W C / IPP / CPlansUnderReview. The department will hold a public hearing on the plan application if it determines that good cause exists. Residents in the affected area or the governing body of an affected municipality may request a public hearing by writing to the Department of Environmental Conservation, at the above address prior to April 12, 2021 The State of Alaska, Department of Environmental Conservation complies with Title II of the Americans with Disabilities Act of 1990. If you are a person with a disability who may need an accommodation in order to participate in this public process, please contact Brian Blessington at 907-269-6272 or TDD Relay Service 1-800-770-8973/TTY or dial 711 prior to April 16, 2021 to ensure that any necessary accommodations can be provided. h ucation racKa a Listrioution last Recipient Organization Address City State Zip Format requested Email C-Plan Reviewer Alaska Department of Natural Resources 550 West 7t' Avenue, Suite 1400 Anchorage AK 99501 Electronic dnr.cplans@alaska.gov Steve Catalano CIRCAC 8195 Kenai Spur Highway Kenai AK 99611 Electronic SteveCatalano@circac.or Jeanette Alas Alaska Department of Fish and Game 333 Raspberry Road Anchorage AK 99518 Electronic leanette.alas@alaska.gov Bob Whittier USEPA 222 W 7th Avenue # 537 Anchorage AK 99513 jElectronic Whittier.robert@Epamail.epa.gov.epa.gov USCG Sector Anchorage PO Box 5800 JBER 99505 Anchorage AK 99515 1 Electronic SectorAnchorageArrivalS uscg.mil USCG Homer 104 East Pioneer Avenue Homer AK 99603 Electronic d17-sgtacatacrosdhomer-all@uscg.mil Bob Shavelson Cook Inlet Keeper 3734 Ben Walters Lane Homer AK 99603 Electronic bob@inletkeeper.org Jim Regg AOGCC 333 W 7th Avenue Suite 100 Anchorage AK 99501 Electronic jim.regg@alaska.gov Jody Colombie AOGCC 333 W 7th Avenue Suite 100 Anchorage AK 99501 Electronic jody.colombie@alaska.gov Todd Paxton CISPRI 51377 Kenai Spur Highway Kenai AK 99611 jElectronic tpaxton@cispri.org Greg LeBeau Witt O'Brien's 6160 Carl Brady Drive Anchorage AK 99502 Electronic gclebeau@gmail.com Kirsten Ballard ARCTOS 130 W. Int'l Airport Road Anchorage AK 99518 Electronic kirsten@arctosak.com Douglass Cooper USFWS PO Box 2139, Ski Hill Road Soldotna AK 99669 Electronic douglass_cooper@fws.gov Marvin Yoder City of Homer Marvin Yoder City Manager Homer AK Electronic myoder@ci.homer.ak.us Jeremy Michels Michels Risk Management, LLC Jeremy Michels Michels Risk Management Electronic jmichels@mrmnow.com Roberta Highland Kachemak Bay Conservation Society 3735 Ben Walters Lane Homer, AK 99603 Homer AK Electronic kbayconservation@gmail.com Jamie Auletta CISPRI 51377 Kenai Spur Highway Kenai AK 99611 Electronic jauletta@dspri.org Dan Nelson Kenai Peninsula Borough (KPB) Kenai Peninsula Borough Kenai AK Electronic dnelson@kpb.us USFWS Acting Spill Response Coordinator US Fish & Wildlife Service USFWS Acting Spill Responne Coordinator jElectronic FWSAKSpillResponse@fws.gov Jade Gamble (ADEC) 43335 Kalifornsky Beach Road, Suite 11 Kenai AK Electronic jade.gamble@alaska.gov Page 1ofI 14 March 22, 2021 Commissioner Jeremy Price, Chair Commissioner Dan Seamount Commissioner Jessie Chmielowski Alaska Oil and Gas Conservation Commission (AOGCC) 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 Re: Furie Operating Alaska, Interim Order on Reconsideration on Docket Number: OTH-20- 056 Other Order 179 Dear Chair Price and Commissioner Seamount and Commissioner Chmielowski, Furie Operating Alaska (Furie) has received the Interim Order on Reconsideration dated March 15, 2021. We greatly appreciate the opportunity to comment on the additional input provided by the Department of Natural Resources in their letter of support dated January 25a', 2021 and to address the tardy additional comment received from Cook Inletkeeper on February 11tn, 2021. We have reviewed AOGCC's ruling on Docket Number OTH-20-056 Other Order 179 and agree with the change in status of wells KLU 1, KLU 2A and KLU 4 from "Suspended" to "Plugged and Abandoned". Furie as requested in the order provided on March 2, 2021 well location coordinates and casing height information to NOAA (Alaska Navigational Manager, Lt. Hadley Owen) for inclusion in the "NOAA Navigational Chart — Cook Inlet". This information has been submitted to the Marine Charting Division for inclusion on the area charts. NOAA was appreciative of the information to make the charts as accurate as possible. Furie has previously submitted a Motion for Reconsideration under Alaska Statutes 31.05.80(a) on March 4th, 2021. The comments and additional information included within this document should serve as a supplement to our Motion for Reconsideration originally filed to the AOGCC. The Motion for Reconsideration is based on the request for the appropriate weighting of risk, health, and safety against leaving the three wells with structural casings 15 feet above the seafloor. In the AOGCC's Decision and Order on March 1st, 2021, public comments were referenced from the following groups; U.S. Coast Guard (USCG), CIRCAC, and Cook InletKeeper. We would like to address each one of these comments, as well as some findings, conclusions and the actual order identified in Docket Number: OTH-20-056 Other Order 179 from AOGCC, as they are at the core of our motion for reconsideration. Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 f Uf21E USCG: Under Findings Number 6 in Other Order 179, the AOGCC stated; "USCG indicates that a lack of awareness of the well structures would be a navigational concern, and that, at a minimum, there needs to be communication with NOAA to update navigation charts to show Furie's protruding casings." The exact quote from email received from Lt Matt Lemanski stated: "Regarding the Furie wells abandonment in Cook Inlet, I'd be reluctant to call it a "hazard to navigation". On the other hand, a lack of awareness of said structures would be a concern. At a minimum, we need to ensure that there is a mechanism to communicate with NOAA to update the charts to show that the protruding subsurface infrastructure remained in place. After consulting with the Marine Pilots, I could see a situation where a vessel needs to drop an anchor in an emergency, to self -arrest or someone wants to install a new pipeline or subsea cable, or some other event (earthquake) that requires a response. If this information makes it to the charts, there will be documentation on file that is relatively easy to access." The "concern" to navigation was the lack of awareness which has now been rectified. Furie has provided well location coordinates and casing height information to NOAA for inclusion in the "NOAA Navigational Chart — Cook Inlet." Furie agrees with the AOGCC Conclusion #3 that "Including the locations and above-seafloor heights of the KLU 1, KLU 2A and KLU 4 casings on NOAA navigation charts will help minimize risk to public safety." CIRCAG CIRCAC opposes Furie's request due to "navigational risks for marine vessels, the presence of large boulders in the vicinity, extreme tidal fluctuations, high currents, and setting a precedent in Alaska for wells drilled from MODUs". As previously indicated, Furie has provided well location coordinates and casing height information to NOAA for inclusion in the "NOAA Navigational Chart — Cook Inlet". Furie also agrees with the USCG that it is not a hazard to navigation and has been properly mitigated by being included in the navigational charts. During the public hearing on December 23rd, 2020, lengthy discussions were held on currents, tides, and the 30" casing being susceptible to large boulders travelling along the seafloor. This is false. The 30" casing is driven hundreds of feet into the seafloor. The casing is 1.5" thick and weighs 457 lbs./ft. The 15 feet of casing from the seafloor has no effect on the other 97% of the casing that is driven into the ground and no effect on well integrity. Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 In terms of being precedent setting — please refer to DNR's conclusion: "DNR supports Furie's request to reclassify the wells from suspended to plugged and abandoned and to grant site clearance with the well casings 15 feet above the seabed floor. However, DNR also states that it supports the requirements of 20 AAC 25.172 and contends this action should not establish a change in policy or set a precedent. Furie totally concurs with DNR's assessment. DNR, representing the State of Alaska as both the landowner and lessor of the mineral estate, carefully evaluated the risk to human safety versus the real impact of removing the casing stubs. Furie totally concurs with the DNR that an exception for 20 AAC 25.172 would not be precedent setting, just a sound management decision. Cook InletKeeper: Cook InletKeeper opposes Furie's request due to "the presence of large boulders in the vicinity, extreme tidal fluctuations, high currents, and setting a precedent in Alaska for wells drilled from MODUs". See above response to CIRCAC's comments as they are the exact same points just on different letterhead. Cook InletKeeper was allowed to provide additional comments due February 8th, 2021 and it should be noted that they were received late on February 111h, 2021. The comment is as follows; "1 regret I missed your Feb. 8 deadline here, but for the record, we're dismayed Furie/Hex miscalculated the water depth by roughly 50%. Such a gross oversight does not bode well for its commitment to regulatory compliance and it reflects a lack of seriousness in Furie/Hex operations". Furie outright rejects these claims of oversight and commitment to regulatory compliance. Furie is committed to safe and complaint operations in all aspects of our work. The water depths they claim were miscalculated came from DNR's letter of support dated January 25th, 2021. In the letter, the water depths were quoted as "203, 212, and 192 feet respectively." However, no reference datum was listed. The depths Director Stokes was referring to were included in the original wellbore diagrams and are actual RKB depths, which is a standard when referring to subsurface depth in relation to "rotary table". The wellbore diagrams were updated with water depths referenced in MLLW and was sent to AOGCC well before the public hearing on December 23rd. During the public hearing, which Cook Inletkeeper was present for, it was made clear the water depths in the area range from 88-110' MLLW and not the RKB depths previously mentioned. Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 Follow up emails were sent from Steve Davies, Sr. Petroleum Geologist for AOGCC to Director of DNR Tom Stokes to clarify the water depths referenced. Director Stokes wrote back and said. "DNR/DOG's position would be the same". AOGCC Conclusion #2: Furie disagrees with AOGCC's Conclusion #2 on Other Order 179: "The six wells cited by Furie as a basis for its request to waive site clearance requirements were granted in the 1960s, before the current offshore site clearance regulation was enacted." For over 55 years, these wells (in similar configurations as KLU 1, 2A, and 4) have posed no threat to navigation for marine vessels or have been influenced or damaged due to boulders, high currents, and extreme tidal fluctuations as claimed by CIRCAC and Cook Inletkeeper in findings 8 and 9. The existence of these wells disproves every negative comment received to date from CIRCAC and Cook InletKeeper. Furie is not requesting to set precedence, simply a variance to 20 AAC 23.172(b) Offshore Location Clearance for these three wells in the interest of human life and safety. Furie is not willing to unnecessarily place human life at risk due to a technicality in regulation with no environmental impact. DNR's letter of Support. January 2P 2021: Placing people in one of the most hazardous environments without reasonable cause is not warranted. The conclusions by DNR, the SOA's resource owner are prudent and responsible. Furie should be allowed to leave the three wells with structural casing 15 feet above the seafloor and not place regulation ahead of human safety. Alignment with AOGCC's Mission Statement further supports our assertion of not placing regulation ahead of human safety. "To protect the public interest in exploration and development of Alaska's valuable oil, gas, and geothermal resources through the application of conservation practices designed to ensure greater ultimate recovery and the protection of health, safety, fresh ground waters and the rights of all owners to recover their share of the resource." Furie would like to highlight once again that Human Life, Health and Safety are at Risk. Safety is and will always continue to be Furie's number one priority. We will not put Alaskans in harms way unnecessarily. Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 It is Furie's position that each comment and concern brought up during this process has been addressed properly and thoroughly. Moreover, Furie has received support from the DNR, representing the State of Alaska as both landowner and lessor. In 20AAC25.172 Offshore Location Clearance (a) (c) and (d), having support of an agency acting on behalf of the State as lessor (like the DNR) allows for a disposition to be approved by the AOGCC. It is only under section (b) drilling from a mobile unit is this not explicitly described. Furie believes this is simply an oversight in regulation. However, the AOGCC still has the ability to issue a variance to the 20 AAC 25.172 (b). We appreciate your reconsideration on this matter and are available for any additional information or discussions as requested. Respectfully, John L. H� Brix CEO & Pres dent Ft7 ' ting Alaska, LLC CC: Commissioner Jeremy Price, Chair Commissioner Dan Seamount Commissioner Jessie Chmielowski Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 Carlisle, Samantha J (CED) From: Hunter Van Wyhe <h.vanwyhe@furiealaska.com> Sent: Monday, March 22, 2021 2:18 PM To: Carlisle, Samantha J (CED) Cc: John Hendrix; Colombie, Jody J (CED) Subject: RE: Other Order 179 interim Attachments: AOGCC Additional Furie Comments Other Order 179.pdf Samantha, Furie Operating Alaska, LLC hereby submits these additional comments to Other Order 179. Please pass this along to the Commissioners. Let me know if you need any additional information. Thank you for the help, Hunter Van Wyhe Operations Engineer c W,�x> h ,ram � 188 West Northern Lights Blvd, Suite 620 Anchorage AK 99503 Office: (907) 277-3726 Cell: (907) 378-3354 From: Carlisle, Samantha J (CED) <samantha.carlisle @alaska.gov> Sent: Monday, March 15, 2021 3:11 PM To: Hunter Van Wyhe <h.vanwyhe@furiealaska.com>; John Hendrix <j.hendrix@furiealaska.com> Subject: Other Order 179 interim Please see attached. Thank you, Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907)793-1223 CONFIDENTIALITY NOTICE. This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Conunission (AOGCC), State of Alaska and is for the sole use of the untended 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 Samantha Carlisle at (907) 793-1223 or Samantlna.Carlisle@alaska.gov. ***External Email*** R,1 (,Z,00 7 - Fi w,, Al A cK n ! r March 3, 2021 Commissioner Jeremy Price, Chair Commissioner Dan Seamount Commissioner Jessie Chmielowski Alaska Oil and Gas Conservation Commission (AOGCC) 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 Re: Furie Operating Alaska, Motion for Reconsideration on Docket Number: OTH-20-056 Other Order 179 Furie's Request to change current status of off -shore exploration wells KLU 1, KLU 2A and KLU 4 from "Suspended" to "Plugged and Abandoned." Dear Chair Price and Commissioner Seamount and Commissioner Chmielowski, Furie Operating Alaska (Furie) has received Order 179 dated March 1, 2021 and would like to file a Motion for Reconsideration under Alaska Statutes 31.05.80(a). We have reviewed AOGCC's ruling and agree with the change in status of wells KLU 1, KLU 2A and KLU 4 from "Suspended" to "Plugged and Abandoned". Furie as requested in the order provided on March 2, 2021 well location coordinates and casing height information to NOAA (Alaska Navigational Manager, Lt. Hadley Owen) for inclusion in the "NOAA Navigational Chart — Cook Inlet" and will provide final confirmation to AOGCC that the information has been included in the NOAA database. We would like to address some of the findings, conclusions and the actual order identified in Docket Number: OTH-20-056 Other Order 179, as they are at the core of our motion for reconsideration. Findings: Furie agrees with Findings 1-6 as they accurately represent Furie's submittals to AOGCC. Furie would like to clarify Findings 7-10 with additional information and corrections as follows: 7. USCG indicates that a lack of awareness of the well structures would be a navigational concern, and that, at a minimum, there needs to be communication with NOAA to update navigation charts to show Furie's protruding casings. Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 r - ? 0000 jZ:0 F 0P6RQ (I E The exact quote from Lt Matt Lemanskl stated: "Regarding the Furie wells abandonment in Cook Inlet, I'd be reluctant to call it a "hazard to navigation". On the other hand, a lack of awareness of said structures would be a concern. At a minimum, we need to ensure that there is a mechanism to communicate with NOAA to update the charts to show that the protruding subsurface infrastructure remained in place. After consulting with the Marine Pilots, I could see a situation where a vessel needs to drop an anchor in an emergency, to self -arrest or someone wants to install a new pipeline or subsea cable, or some other event (earthquake) that requires a response. if this information makes it to the charts, there will be documentation on file that is relatively easy to access." • As previously indicated, Furie has provided well location coordinates and casing height information to NOAA for inclusion in the "NOAA Navigational Chart — Cook Inlet " 8. CIRCAC opposes Furie's request due to navigational risks for marine vessels, the presence of large boulders in the vicinity, extreme tidal fluctuations, high currents, and setting a precedent in Alaska for wells drilled from MODUs. As previously indicated, Furie has provided well location coordinates and casing height information to NOAA for inclusion in the "NOAA Navigational Chart — Cook Inlet". • In terms of being precedent setting — please refer to DNR's conclusion: "DNR supports Furie's request to reclassify the wells from suspended to plugged and abandoned and to grant site clearance with the well casings 15 feet above the seabed floor. However, DNR also states that it supports the requirements of 20 AAC 25.172 and contends this action should not establish a change in policy or set a precedent." 9. Cook Inletkeeper also opposes Furie's request due' to the presence of large boulders in the vicinity, extreme tidal fluctuations, high currents, and setting a precedent in Alaska for wells drilled from MODUs. Furie was never notified of public comment period re -opening on January 25, 2021 and is disappointed that we were never able to add or review additional comments during this period. Additionally, Furie voices concern that not only was Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 r0::0;0 RIE 1:0 F F'C R INc_, A!SKA Cook Inletkeeper allowed to provide additional comments, but these comments were received late and Furie was not afforded the opportunity to provide additional information based on DNR's findings and recommendation. 10. DNR supports Furie's request to reclassify the wells from suspended to plugged and abandoned and to grant site clearance with the well casings 15 feet above the seabed floor. However, DNR also states that it supports the requirements of 20 AAC 25.172 and contends this action should not establish a change in policy or set a precedent. • Furie totally concurs with DNR's assessment. DNR, representing the State of Alaska as both the landowner and lessor of the mineral estate, carefully evaluated the risk to human safety versus the real impact of removing the casing stubs. • Furie totally concurs with the DNR that an exception for 20 AAC 25.172 would not be precedent setting, just a sound management decision. Conclusions: Conclusion #1: Furie agrees with the commission's findings: "KLU 1, KLU 2A and KLU 4, are compliant with 20 AAC 25.112, including the alternate placement of the surface cement plugs per 20 AAC 25.112(i)." Conclusion #2: Furie disagrees: "The six wells cited by Furie as a basis for its request to waive site clearance requirements were granted in the 1960s, before the current offshore site clearance regulation was enacted." • For over 55 years, these wells (in similar configurations as KLU 1, 2A, and 4) have posed no threat to navigation for marine vessels or have been influenced or damaged due to boulders, high currents, and extreme tidal fluctuations as claimed by CIRCA and Cook Inletkeeper in findings S and 9. • Furie is not willing to unnecessarily place human life at risk due to a technicality in regulation with no environmental impact • Once again, Furie totally concurs with the DNR that an exception for 20 AAC 25.172 would not be precedent setting, just a sound management decision. Conclusion #3: Furie agrees with the commission's findings: 'Including the locations and above-seafloor heights of the KLU 1, KLU 2A and KLU 4 casings on NOAA navigation charts will help minimize risk to public safety." Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 1 {7PE FrQ G At SK AE • As previously indicated, Furie has already provided well location coordinates and casing height information to NOAA for inclusion in the "NOAA Navigational Chart — Cook Inlet". In fact, Furie brought up the issue that these wells had not been properly indicated on the NOAA navigational charts during the public hearing and raised concerns that this is not being properly managed and/or a requirement for suspended wells in the Cook Inlet. Based on the above submitted responses to the AOGCC's findings and conclusions, Furie requests and files this motion for Reconsideration under Alaska Statutes 31.05.80(a). The motion for Reconsideration is based on the request for the appropriate weighting of risk, health and safety against leaving the three wells with structural casings 15 feet above the seafloor. Furie would like to highlight that Human life, Health and Safety are at Risk. Safety is and will always continue to be Furie's number one priority. We will not put Alaskans in harms way unnecessarily. Furie would like to submit some excerpts from Commercial Diving Hall of Famer, Owen Boyle, a Cook Inlet construction diver for four decades. Owen Boyle, a Cook Inlet construction diver for four decades until 2004, helped install the original platforms and pipelines in Cook Inlet as the basin become a major oil and gas province in the mid-1960s. Boyle said the basin is the "most dangerous place in North America for commercial diving, with its black water and some of the world's strongest tides." Boyle, now 85, is one of two divers inducted this year into the Commercial Diving Hall of Fame of Houston, Texas. Last summer, he published a memoir about his Cook Inlet career, "Diving Blind into Danger." "The treacherous tidal currents and the black, zero visibility water create extreme diving hazards, " said a description for Boyle's back on Amazon. Placing people in one of the most hazardous environments without reasonable cause is not warranted. The conclusions by DNR, the SOA's resource owner are prudent and responsible. Furie should be allowed to leave the three wells with structural casing 15 feet above the seafloor and not place regulation ahead of human safety. Alignment with AOGCC's Mission Statement further supports our assertion of not placing regulation ahead of human safety. "To protect the public interest in exploration and development of Alaska's valuable oil, gas, and geothermal resources through the application of conservation practices designed to ensure greater ultimate recovery and the protection of health, safety, fresh ground waters and the rights of all owners to recover their share of the resource." Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 ; r��Ooo - ozo, I E OPEiY,;, �,' ASKP d',.. We appreciate your reconsideration on this matter and are available for any additional information or discussions as requested. Respectfully, LJohnHendrix resident Furie Operating Alaska, LLC CC: Commissioner Jeremy Price, Chair Commissioner Dan Seamount Commissioner Jessie Chmielowski Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 Colombie, Jody J (CED) From: Hunter Van Wyhe <h.vanwyhe@furiealaska.com> Sent: Thursday, March 4, 2021 12:09 PM To: Colombie, Jody J (CED) Cc: John Hendrix Subject: AOGCC Motion for Reconsideration Docket OTH-20-056 Other Order 179 Attachments: AOGCC Motion for Reconsideration Docket OTH-20-056 Other Order 179.pdf Categories: Yellow Category Ms. Colombie, Furie Operating Alaska, LLC hereby submits this motion for reconsideration of docket OTH-20-056 Other Order 179 as per Alaska statutes 31.05.80(a). A paper copy of this motion will be sent separately via certified mail to each Commissioner. Thank you, Hunter Van Wyhe Operations Engineer r;eo*'?O VRA I A� 188 West Northern Lights Blvd, Suite 620 Anchorage AK 99503 Office: (907) 277-3726 Cell: (907) 378-3354 Confidentiality Notice: This email and its attachments (if any) contain confidential information of the sender. The information is intended only for use by the direct addressees of the original sender of this email. If you are not an intended recipient of the original sender (or responsible for delivering the message to such person), you are hereby notified that any review, disclosure, copying, distribution or the taking of any action in reliance of the contents of and attachments to this email is strictly prohibited. If you have received this email in error, please immediately notify the sender at the address shown herein and permanently delete any copies of this email (digital or paper) in your possession. 12 Confidential, held in secure storage Colombie, Jody J (CED) From: Carlisle, Samantha J (CED) Sent: Thursday, February 11, 2021 11:24 AM To: Price, Jeremy M (CED); Chmielowski, Jessie L C (CED); Seamount, Dan T (CED); Colombie, Jody J (CED); Davies, Stephen F (CED); Ballantine, Tab A (LAW) Subject: Fwd: Furie Categories: Yellow Category Samantha Carlisle Executive Secretary III (907) 793-1223 Begin forwarded message: From: Bob Shavelson <bob@inletkeeper.org> Date: February 11, 2021 at 11:16:54 AM AKST To: "Carlisle, Samantha J (CED)" <samantha.carlisle@alaska.gov> Cc: Mate usz.J.Lemanski@uscg.mil, "Mike Munger (munger@rcac.org)" <munger@rcac.org> Subject: Re: FW: Furie Hi Samantha - I regret I missed your Feb. 8 deadline here, but for the record, we're dismayed Furie/Hex miscalculated the water depth by roughly 50%. Such a gross oversight does not bode well for its commitment to regulatory compliance and it reflects a lack of seriousness in Furie/Hex operations. Thank you for the opportunity to comment. Bob Shavelson Cook Inletkeeper 3734 Ben Walters Lane Homer, AK 99603 cell: 907.299.3277 fax 907.235.4069 bob@inletkeeaer.ore www.inletkeeper.org Love Cook Inlet? Make an extra gift to Cook Inletkeeper when you PICK.CLICK.GIVE. Or donate online. Together we can protect Alaska's Cook Inlet watershed. On Mon, Jan 25, 2021 at 12:05 PM Carlisle, Samantha J (CED) <samantha.carlisle@alaska.gov> wrote: Please see the attached and to the extent you care to comment, you may do so until February 8, 2021. Thank you, Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West Th Avenue Anchorage, AK 99501 (907) 793-1223 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 Samantha Carlisle at (907) 793-1223 or Samuntlna.CarlisleC?alaska.gov. From: Stokes, Tom L (DNR) <tom.stokes@alaska.gov> Sent: Monday, January 25, 2021 11:17 AM To: Davies, Stephen F (CED) <steve.davies@alaska.gov> Cc: Colombie, Jody J (CED) <jody.colombie@alaska.gov>; Carlisle, Samantha J (CED) <samantha.carlisle @alaska.gov> Subject: RE: Furie Steve, Thanks for the follow up question. DNR / DOG's position would be the same. Best regards, Tom Tom Stokes Director State of Alaska Department of Natural Resources Division of Oil and Gas 550 W. 7t' Avenue, Suite noo Anchorage AK 99501-3510 Direct:907.269.7493 Cell:907.538.9229 From: Davies, Stephen F (CED) <steve.davies@alaska.gov> Sent: Monday, January 25, 2021 9:52 AM To: Stokes, Tom L (DNR) <tom.stokes@alaska.gov> Cc: Colombie, Jody J (CED) <jody.colombie@alaska.gov>; Carlisle, Samantha J (CED) <samantha.carlisle @alaska.gov> Subject: FW: Furie Dear Director Stokes, In Furie's initial request to AOGCC to reclassify suspended wells KLU 1, 2A, and 4, the water depths at these locations were incorrectly described as being between 192' and 212' MSL. According to AOGCC's records and Furie's testimony at the public hearing on December 23, 2020, these depths range instead from 88' to 110' MSL. Will these shallower water depths alter DNR's opinion regarding reclassification of KLU 1, 2A, and 4? Thanks and stay safe, Steve Davies Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission (AOGCC) 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 Steve Davies at 907-793-1224 or steve.davies@alaska.gov. From: Stokes, Tom L (DNR) <tom.stokes@alaska.gov> Sent: Monday, January 25, 2021 8:29 AM To: Price, Jeremy M (CED) <ieremy.price @alaska.gov>; Chmielowski, Jessie L C (CED) <iessie.chmielowski@alaska.eov>; Seamount, Dan T (CED) <dan.seamountCc@alaska.gov> Cc: Feige, Cord A (DNR) <corri.feige@alaska.gov>; John Hendrix <i.hendrix@furiealaska.com> Subject: Furie Dear Commissioners Price, Chmielowski, & Seamount, The Alaska Department of Natural Resources through the Division of Oil & Gas, as landowner and lessor of the mineral estate for the Kitchen Lights Unit in Cook Inlet, supports Furie Operating Alaska, LLC's applications to the Alaska Oil and Gas Conservation Commission to reclassify the KLU 1, 2A, and 4 wells from suspended to plugged and abandoned. See attached letter. Best regards, Tom Tom Stokes Director State of Alaska Department of Natural Resources Division of Oil and Gas 550 W. 7th Avenue, Suite noo Anchorage AK 99501-3510 Direct:907.269.7493 Cell:907.538.9229 THE STATE. °'ALASKA GOVERNOR MIKE DUNLEAVY January 25, 2021 Alaska Oil and Gas Conservation Commission Jeremy Price, Commissioner Jessie Chmielowski, Commissioner Dan Seamount, Commissioner 333 West 7th Avenue Anchorage, Ak 99501-3572 Department of Natural Resources Re: Furie's Request to Reclassify Suspended Wells KLU 1, 2A, and 4 Dear Commissioners: DIVISION OF OII, & GAS 550 %N' 7th Avenue, Suite 1100 Anchorage, Alaska 99501-3560 Main: 907.269.8800 Fax: 907.269.8939 VIA EMAIL The Alaska Department of Natural Resources ("DNR") through the Division of Oil & Gas, as landowner and lessor of the mineral estate for the Kitchen Lights Unit in Cook Inlet, supports Furie Operating Alaska's ("Furie") applications to the Alaska Oil and Gas Conservation Commission ("AOGCC") to reclassify the KLU 1, 2A, and 4 wells from suspended to plugged and abandoned. In reaching this position, DNR balanced the protection of public health and safety with the potential risks of leaving the well casings 15 feet above the seabed floor. The KLU 1, 2A, and 4 wells are at water depths of 203, 212, and 192 feet, respectively. Their location in Cook Inlet experiences swift moving tides and high turbidity, creating challenging diving conditions and increasing the risks to human safety during operations. DNR considered these risks against those of a flow of hydrocarbons from the wells or potential hazards to navigation. In its December 1, 2020 determination, the AOGCC concluded that it is reasonably certain that none of the wells that Furie operates, to include the KLU 1, 2A, and 4, is capable of flowing liquid hydrocarbons to the ground surface. Moreover, hazards posed to navigation may be mitigated by proper identification on National Oceanic and Atmospheric Administration navigation charts, as evidenced by six other offshore wells with casings above the mudline in the area. As a matter of policy, DNR supports AOGCC's requirements in 20 AAC 25.172 and contends this action should not establish a change in policy or set precedent. Future application of the regulation can ensure compliance by removing wellhead equipment, casing, piling, and other obstructions to a depth at least five feet below the mudline before removing the drill rig. In the case of Furie's request, the situation must be evaluated with the drill rig already removed, and the recognition of the balance between safety versus real impact. Sincerely, --r,A!6 - Tom Stokes, Director Division of Oil & Gas CC: Corri A. Feige, Commissioner, Department ofNatural Resources John Hendrix, President/CEO, Furie Operating Alaska, LLC. Carlisle, Samantha J (CED) From: Stokes, Tom L (DNR) Sent: Monday, January 25, 2021 11:17 AM To: Davies, Stephen F (CED) Cc: Colombie, Jody J (CED); Carlisle, Samantha J (CED) Subject: RE: Furie Steve, Thanks for the follow up question. DNR / DOG's position would be the same. Best regards, Tom Tom Stokes Director State of Alaska Department of Natural Resources Division of Oil and Gas 550 W. 7t' Avenue, Suite noo Anchorage AK 99501-3510 Direct:907.269.7493 Cell:907.538.9229 From: Davies, Stephen F (CED) <steve.davies@alaska.gov> Sent: Monday, January 25, 20219:52 AM To: Stokes, Tom L (DNR) <tom.stokes@alaska.gov> Cc: Colombie, Jody J (CED) <jody.colombie@alaska.gov>; Carlisle, Samantha J (CED) <samantha.carlisle @alaska.gov> Subject: FW: Furie Dear Director Stokes, In Furie's initial request to AOGCC to reclassify suspended wells KLU 1, 2A, and 4, the water depths at these locations were incorrectly described as being between 192' and 212' MSL. According to AOGCC's records and Furie's testimony at the public hearing on December 23, 2020, these depths range instead from 88' to 110' MSL. Will these shallower water depths alter DNR's opinion regarding reclassification of KLU 1, 2A, and 4? Thanks and stay safe, Steve Davies Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission (AOGCC) 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 sta,- r federal law. If you are an unintended recipient oft his e-i,..,I, 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 Steve Davies at 907-793-1224 or steve.davies@alaska.gov. From: Stokes, Tom L (DNR) <tom.stokesCa@alaska.gov> Sent: Monday, January 25, 20218:29 AM To: Price, Jeremy M (CED) <jeremy.price@alaska.gov>; Chmielowski, Jessie L C (CED)<jessie.chmielowski@alaska.gov>; Seamount, Dan T (CED) <dan.seamount@alaska.gov> Cc: Feige, Corri A (DNR) <corri.feige@alaska.gov>; John Hendrix <j.hendrix@furiealaska.com> Subject: Furie Dear Commissioners Price, Chmielowski, & Seamount, The Alaska Department of Natural Resources through the Division of Oil & Gas, as landowner and lessor of the mineral estate for the Kitchen Lights Unit in Cook Inlet, supports Furie Operating Alaska, LLC's applications to the Alaska Oil and Gas Conservation Commission to reclassify the KLU 1, 2A, and 4 wells from suspended to plugged and abandoned. See attached letter. Best regards, Tom Tom Stokes Director State of Alaska Department of Natural Resources Division of Oil and Gas 550 W. 7t" Avenue, Suite noo Anchorage AK 99501-3510 Direct:907.269.7493 Cell:907-538.9229 Carlisle, Samantha J (CED) From: Carlisle, Samantha J (CED) Sent: Monday, January 2S, 2021 12:12 PM To: Mike Munger (MikeMunger@circac.org) Subject: FW: Furie Attachments: Furie Suspended Wells KLU 1, 2A, & 4.pdf I had the incorrect email for you, I apologize. From: Carlisle, Samantha 1 (CED) Sent: Monday, January 25, 2021 12:05 PM To: Mateusz.J.Lemanski@uscg.mil; Bob Shavelson <bob@inletkeeper.org>; Mike Munger (munger@rcac.org) <m u nger@ rcac.org> Subject: FW: Furie Please see the attached and to the extent you care to comment, you may do so until February 8, 2021. Thank you, Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907)793-1223 ALASKANS STAND TOGETHER 6 FT APART 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 Samantha Carlisle at (907) 793-1223 or Samaintha.Carhsle@alaska.gov. From: Stokes, Tom L (DNR) <tom.stokes@alaska.gov> Sent: Monday, January 25, 2021 11:17 AM To: Davies, Stephen F (CED) <steve.davies@alaska.eov> Cc: Colombie, Jody J (CED) <jody.colombie@alaska.eov>; Carlisle, Samantha J (CED) <samantha.carlisle@alaska.gov> Subject: RE: Furie Steve, Thanks for the follow up question. DNR / DOG's position would be the same. Best regards, Tom Tom Stokes Director State of Alaska Department of Natural Resources Division of Oil and Gas 550 W. 7"' Avenue, Suite noo Anchorage AK 99501-3510 Direct:907.269.7493 Cell:907.538.9229 From: Davies, Stephen F (CED) <steve.davies@alaska.gov> Sent: Monday, January 25, 20219:52 AM To: Stokes, Tom L (DNR) <tom.stokes@alaska.gov> Cc: Colombie, Jody J (CED) <iody.colombie@alaska.gov>; Carlisle, Samantha J (CED) <samantha.carlisle @alaska.gov> Subject: FW: Furie Dear Director Stokes, In Furie's initial request to AOGCC to reclassify suspended wells KLU 1, 2A, and 4, the water depths at these locations were incorrectly described as being between 192' and 212' MSL. According to AOGCC's records and Furie's testimony at the public hearing on December 23, 2020, these depths range instead from 88' to 110' MSL. Will these shallower water depths alter DNR's opinion regarding reclassification of KILL) 1, 2A, and 4? Thanks and stay safe, Steve Davies Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission (AOGCC) 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 Steve Davies at 907-793-1224 or steve.davies@alaska.gov. From: Stokes, Tom L (DNR) <tom.stokes@alaska.gov> Sent: Monday, January 25, 20218:29 AM To: Price, Jeremy M (CED) <ieremy.price @alaska.gov>; Chmielowski, Jessie L C (CED)<iessie.chmielowski@alaska.gov>; Seamount, Dan T (CED) <dan.seamount@alaska.gov> Cc: Feige, Cord A (DNR) <corri.feige@alaska.gov>; John Hendrix <i.hendrix@furiealaska.com> Subject: Furie Dear Commissioners Price, Chmielowski, & Seamount, The Alaska Department of Natural Resources through the Division of Oil & Gas, as landowner and lessor of the mineral estate for the Kitchen Lights Unit in Cook Inlet, supports Furie Operating Alaska, LLC's applications to the Alaska Oil and Gas Conservation Commission to recIdssify the KLU 1, 2A, and 4 wells from suspended to plugged and abandoned. See attached letter. Best regards, Tom Tom Stokes Director 4 State of Alaska Department of Natural Resources Division of Oil and Gas 550 W. 7"' Avenue, Suite noo Anchorage AK 99501-3510 Direct:907.269.7493 Cell:907.538.9229 Carlisle, Samantha J (CED) From: Carlisle, Samantha J (CED) Sent: Monday, January 25, 2021 12:05 PM To: Mateusz.J.Lemanski@uscg.mil; Bob Shavelson; Mike Munger (munger@rcac.org) Subject: FW: Furie Attachments: Furie Suspended Wells KLU 1, 2A, & 4.pdf Please see the attached and to the extent you care to comment, you may do so until February 8, 2021. Thank you, Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907)793-1223 ALASKANS STAND TOGETHER 6 FT APART 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 Samantha Carlisle at (907) 793-1223 or Samantha.Carlisle@alaska.gov. From: Stokes, Tom L (DNR) <tom.stokes@alaska.gov> Sent: Monday, January 25, 2021 11:17 AM To: Davies, Stephen F (CED) <steve.davies@alaska.gov> Cc: Colombie, Jody J (CED) <jody.colombie@alaska.gov>; Carlisle, Samantha J (CED) <samantha.carlisle@alaska.gov> Subject: RE: Furie Steve, Thanks for the follow up question. DNR / DOG's position would be the same. Best regards, Tom Tom Stokes Director State of Alaska Department of Natural Resources Division of Oil and Gas 550 W. 7`I' Avenue, Suite noo Anchorage AK 99501-3510 Direct:907.269.7493 Cell:907.538.9229 From: Davies, Stephen F (CED) <steve.davies@alaska.gov> Sent: Monday, January 25, 2021 9:52 AM To: Stokes, Tom L (DNR) <tom.stokes@alaska.gov> Cc: Colombie, Jody J (CED) <lody.colombie@alaska.gov>; Carlisle, Samantha J (CED) <samantha.carlisle @alaska.gov> Subject: FW: Furie Dear Director Stokes, In Furie's initial request to AOGCC to reclassify suspended wells KLU 1, 2A, and 4, the water depths at these locations were incorrectly described as being between 192' and 212' MSL. According to AOGCC's records and Furie's testimony at the public hearing on December 23, 2020, these depths range instead from 88' to 110' MSL. Will these shallower water depths alter DNR's opinion regarding reclassification of KLU 1, 2A, and 4? Thanks and stay safe, Steve Davies Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission (AOGCC) 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 Steve Davies at 907-793-1224 or steve.davies@alaska.aov. From: Stokes, Tom L (DNR) <tom.stokes@alaska.gov> Sent: Monday, January 25, 2021 8:29 AM To: Price, Jeremy M (CED) <ieremy.price @alaska.gov>; Chmielowski, Jessie L C (CED)<iessie.chmielowski@alaska.gov>; Seamount, Dan T (CED) <dan.seamount@alaska.gov> Cc: Feige, Corri A (DNR) <corri.feige@alaska.gov>; John Hendrix <i.hendrix@furiealaska.com> Subject: Furie Dear Commissioners Price, Chmielowski, & Seamount, The Alaska Department of Natural Resources through the Division of Oil & Gas, as landowner and lessor of the mineral estate for the Kitchen Lights Unit in Cook Inlet, supports Furie Operating Alaska, LLC's applications to the Alaska Oil and Gas Conservation Commission to reclassify the KLU 1, 2A, and 4 wells from suspended to plugged and abandoned. See attached letter. Best regards, Tom Tom Stokes Colombie, Jody J (CED) From: Davies, Stephen F (CED) Sent: Tuesday, January 12, 2021 9:06 AM To: John Hendrix Cc: Colombie, Jody J (CED) Subject: Furie's Request to Reclassify Suspended Wells KLU 1, 2A, and 4 Dear Mr. Hendrix, In reviewing the record on Furie's request to reclassify suspended wells KLU 1, 2A, and 4, and to be relieved of the requirements of 20 AAC 25.172 as to those wells, AOGCC notes Furie has provided no evidence regarding the position of the landowner, DNR, on Furie's request. Within 10 working days of receiving this email, Furie is requested to provide a written statement from DNR as to its position regarding Furie's request. Best Regards, Steve Davies Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission (AOGCC) 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 Steve Davies at 907-793-1224 or steve.davies@alaska.gov. AOGCC 12/23/2020 ITMO: FL. OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 ALASKA OIL AND GAS CONSERVATION COMMISSION In the Matter of Furie Operating ) Alaska, LLC; status change. ) Docket number: OTH 2O-056 PUBLIC HEARING December 23, 2020 10:00 a.m. BEFORE: Jeremy Price, Chairman Jessie Chmielowski, Commissioner Daniel T. Seamount, Commissioner Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: Fk- OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 2 1 TABLE OF CONTENTS 2 Opening remarks by Chairman Price 03 3 Testimony of Mr. Hendrix 07 4 Testimony of Dusenbery 10 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: Fi _ OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 3 1 P R O C E E D I N G S 2 (On record - 10:04 a.m.) 3 COMMISSIONER SEAMOUNT: Good morning. I'll 4 bring this hearing to order. This is Docket No. OTH- 5 20-056. Today is December 23rd, 2020. The time is 6 10:04 a.m. We're located at 333 West 7th Avenue, 7 Anchorage, Alaska. Those are the offices of the AOGCC. 8 I'll start by introducing the bench. We have 9 Commissioners Jessie Chmielowski and Jeremy Price, who 10 are attending telephonically and I am Commissioner Dan 11 Seamount. 12 If any persons here or on the phone need 13 special accommodations to participate in these 14 proceedings please speak to Jody Colombie and she will 15 do her best to accommodate you. She can be reached at 16 907-793-1221. Computer Matrix will be recording the 17 proceedings, you can get a copy of the transcript from 18 Computer Matrix. 19 The notice of this hearing was published in the 20 Anchorage Daily News on November 20th, 2020. It was 21 also posted on the State of Alaska online notices 22 website, email distribution list, as well as the 23 AOGCC's own website. 24 Three comments were received. The first one 25 was from the U.S. Coast Guard on December 17th, 2020. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FL _ OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 4 1 We received comments from Cook Inlet Regional Citizens 2 Advisory Council on December 21st, 2020. And finally 3 Cook Inletkeeper on December 22nd, 2020. 4 Okay. This hearing concerns Furie Operating 5 Alaska, LLC, who submitted an application for sundry 6 approvals forms to modify the current status of 7 offshore exploration wells KLU-1, KLU-2A, and KLU-4 8 from suspended to plugged and abandon. Furie has 9 requested the status change be made without any further 10 well work. All three wells have structural pipe 11 extending 15 feet above the sea floor. Because AOGCC 12 regulations require the well head equipment and casing 13 be removed to a depth of at least five feet below mud 14 line datum on its own mission, the AOGCC has set the 15 hearing to today to consider Furie's request. 16 This hearing is being held in accordance with 17 A.S. 44.62 and 20 AAC 25.540 of the Alaska 18 Administration Code. It appears that Hilcorp intends 19 to testify. We'll ask one more time, are there any 20 parties that would want to testify on the phone. 21 (No comments) 22 COMMISSIONER SEAMOUNT: Okay. I haven't heard 23 any other. 24 CHAIRMAN PRICE: Mr. Seamount. 25 COMMISSIONER SEAMOUNT: Pardon me. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: F. ZOPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 5 1 CHAIRMAN PRICE: Mr. Seamount, this is Jeremy 2 Price. Hey, I just wanted to clarify you actually only 3 said Hilcorp planned to testify, I think you meant 4 Furie. 5 COMMISSIONER SEAMOUNT: I'm sorry, Furie. 6 Okay. It's not Hilcorp, they're not here today. Sorry 7 about that, I always make a mistake. Thank you, 8 Commissioner Price. 9 Okay, the Commissioners will probably ask 10 questions during testimony. We may also take a recess 11 to consult with Staff to determine whether additional 12 information or clarifying questions are necessary. If 13 a member of the audience has a question that he or she 14 feels should be asked, please submit that question to 15 Jody Colombie. She will provide the question to the 16 Commissioners and if we feel that asking the question 17 will assist us in making a decision, we will ask it. 18 As I said before her number is 907-793-1221. 19 Okay, we have a few ground rules on what is 20 allowed relative to testimony. Those testifying please 21 keep in mind that you must speak into the microphone so 22 that those in the audience and the court reporter can 23 hear your testimony. Also please remember to reference 24 your slides so that someone reading the public record 25 can follow along. For example, refer to slides by Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FL OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 6 1 1 their numbers or if they're not numbered by their 2 titles. First of all, testimony must be relevant to 3 the purposes of the hearing that I outlined a few 4 minutes ago and to the statutory authority of the 5 AOGCC. I won't go any further into the rules since we 6 only have Furie testifying, not Hilcorp. 7 I'll just ask Commissioners Price or 8 Chmielowski, do you have anything to add before we 9 start? 10 COMMISSIONER CHMIELOWSKI: No, I don't, thank 11 you. 12 CHAIRMAN PRICE: Nothing from me. 13 COMMISSIONER SEAMOUNT: Okay, hearing none, 14 we'll start with Furie. Please raise your right hand, 15 anyone that's going to testify. Okay. 16 (Oath administered) 17 MR. HENDRIX: I do. 18 MR. DUSENBERY: I do. 19 COMMISSIONER SEAMOUNT: Okay. Please state 20 your name and who you represent. 21 MR. HENDRIX: John Hendrix, CEO, President of 22 Furie. 23 MR. DUSENBERY: Rick Dusenbery, COO, Furie. 24 COMMISSIONER SEAMOUNT: Thank you. And may I 25 ask who just joined. Did someone just join this Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 1 hearing telephonically? 12/23/2020 ITMO: Ft- OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 7 2 UNIDENTIFIED VOICE: Just as a spectator. 3 COMMISSIONER SEAMOUNT: Okay, thank you. All 4 right. So who's going to start? 5 MR. HENDRIX: I will, John Hendrix. CEO, 6 President of Furie Operating Alaska. Just a little 7 brief intro about myself. I've been in the oil and gas 8 business in Alaska for over four decades. I grew up in 9 Homer, Alaska. Started my career with Alyeska Pipeline 10 as an intern and Schlumberger logging engineer, the 11 first one they ever had out of college, broke out up on 12 the North Slope in Prudhoe. I worked a couple years, 13 even in Prudhoe Bay as their first well integrity 14 engineer back in the 190s when that was all starting 15 up. Since then I've worked in six continents and 16 returned home from Egypt after the Arab spring and 17 worked for Apache up here trying to get a business 18 concern going in -- back in my home state of Alaska. I 19 did have a brief stint working for Governor Walker and 20 was the Alaska State representative in the Interstate 21 Oil and Gas Compact Commission, which I really valued 22 that experience as far as looking at how the countries 23 of USA and Canada, the providences there do their oil 24 and gas work and regulations. 25 Since that time, in July of 2020, we purchased, Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: Fi L OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 8 1 Rick and I, under Hex Cook Inlet, purchased the Furie 2 Operating Company as a Cornucopia Corsair and 3 Cornucopia, of course, owns Furie which is the Kitchen 4 Lights Unit operator. First thing we said when we took 5 over is safety is our number 1 concern and safety is. 6 We're not going to put any of our people in harm's way 7 if we can avoid it. And this is one thing that we want 8 to make sure everybody understands here, and Rick will 9 go into more detail when he gives his presentation, I'm 10 just going to do the summary -- executive summary up 11 front, and wrap up at the end. 12 Furie requested this hearing. This is not a 13 mandate that we basically cut these off today, this was 14 basically requested to us -- we requested because when 15 we came in in July we found a lot of things that needed 16 to be cleaned up and this is one we felt needed to be 17 cleaned up. AOGCC requested the cost of what it cost 18 to do this, not us. We were just concerned about the 19 mechanical integrity and making sure that we -- because 20 to us it looked very obvious that these wells would not 21 flow when they were drilled. They would not flow when 22 they were tested. And since -- since then they have 23 been plugged and cemented with all the well head 24 equipment removed. Granted, there is a 30 inch, and 25 Rick will show you the size of this 30 inch heavy wall Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: Ft- :OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 9 1 that's round that will deflect anything coming in its 2 way and AOGCC, in December, even ruled, that they will 3 not flow. So there's also a precedent of six wells 4 that -- similar wells that have been P&A'd in the past 5 with extended stubs sticking up. No well head 6 equipment, just a piece of pipe sticking up out of the 7 ground. And these were basically ruled P&A'd and they 8 were ruled P&A with the one of the most cherished guys 9 AOGCC's ever had as a Commissioner, Mr. Tom Marshall, 10 who just recently passed away. So out of these six 11 wells, there's been a total of about 318 well years 12 with no incident with these sticking up. And one of 13 the wells, coincidentally is within a quarter of a mile 14 of where we're looking at abandoning our wells. 15 So, again, one thing I want to leave you with 16 that we need to do a better job on, both companies and 17 AOGCC, if wells are suspended or they're P&A'd, we need 18 to make sure they get on the NOAA charts in the future 19 because this well -- these three wells were suspended 20 and they should have probably been put on the NOAA 21 charts too, just like the other six wells were put on 22 before. So suspended or P&A, if anything sticking up 23 above the mean sea line we ought to basically note that 24 in the NOAA charts. 25 So with that I'm going to turn it over to Rick Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FL � OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 10 1 Dusenbery, who I've known for probably 30 years, worked 2 with in Alaska in the past and our COO. Go ahead, 3 Rick. 4 REPORTER: The person who just called in on the 5 phone, can you please identify yourself. 6 MR. O'QUINN: This is Aaron O'Quinn from the 7 Division of Oil and Gas. 8 REPORTER: Thank you. 9 MR. DUSENBERY: No problem. Okay, thank you, 10 John for that summary. As John mentioned my name is 11 Rick Dusenbery. I'm John's partner in Hex Cook Inlet 12 and Furie. My career, like John I'm also a petroleum 13 engineer. Been involved, jeez it's getting up there, 14 upwards towards 40 years now. After my career, like 15 John, I haven't been in quite as many continents but 16 I've worked Middle East a couple of times, I've worked 17 in Europe, and in the last decade I've been running a 18 small oil and gas company in Canada. So what I brought 19 to the table here was that last 10 years of small 20 company experience, along with the experience I gained 21 when I was in Alaska, brought that to the table so we 22 can really make a success out of what we purchased here 23 with the Furie assets. 24 So I guess let's roll into the presentation and 25 we'll just walk through that. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FL - OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 11 1 1 So let's go to Slide 3, the agenda. We'll 2 first show you the project location, where the Kitchen 3 Lights Unit is. Then we'll talk about the six wells 4 that have been abandoned in similar condition in -- 5 around the Kitchen Lights Unit. That'll be our 6 precedence. And then we'll talk about our wells in 7 particular. And then we'll close with the AOGCC Guy 8 Schwartz recommended we get some cost estimates on what 9 it would take to actually remove these stubs and we'll 10 close with proposed numbers. 11 So on this agenda slide we have Darrel Leach, 12 one of our operators, standing in front of a 30 inch 13 conductive pipe in storage down on the Kenai. So you 14 could see there is 15 feet and there, behind him, that 15 is, you know, the side view of the pipe. So it's a 30 16 inch diameter piece of heavy wall steel. That is what 17 is sticking 15 feet out of the sea bed, but below that 18 it's driven into the sea bed over 300 feet in all three 19 wells, and then from there submitted to the smaller 20 casing strains that go further into the Earth. 21 COMMISSIONER SEAMOUNT: (No microphone) 22 MR. DUSENBERY: It is submitted to the casing, 23 yes, sir. 24 COMMISSIONER SEAMOUNT: Okay, sorry. I asked 25 if the conductor pipe was cemented to the case and Mr. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net welflere 12/23/2020 ITMO: F, _c OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 12 1 Dusenbery said it was. 2 MR. DUSENBERY: That's correct. 3 MS. COLOMBIE: The Commissioners cannot hear 4 you well. 5 MR. DUSENBERY: Sorry. Can everybody hear me 6 better now -- so let's move to Slide 4. Here is the 7 offshore map of what we call the Kitchen Lights Unit. 8 There's 83,000 acres in that. It lies, well, for where 9 our platform is, 16 miles from Nikiski, where our shore 10 base is. On this map you see in the yellow stars the 11 three exploration wells that we're discussing here, the 12 KLU-2A, KLU-1 and KLU-4, and then we've also included 13 the SRS/ST-1 and SRS/ST-2 and 3, and those are part of 14 the wells that we were talking about that have been 15 abandoned in similar condition to the way our wells 16 exist at present. 17 So let's go to Slide 5 now. Just another 18 navigational chart. We looked, and the platform is 19 listed there and you see the early, the 1960s vintage 20 shell wells that SRS/ST-1 and 2, they are listed on the 21 NOAA navigational chart. We learned, when we saw this, 22 that none of our suspended wells are on the NOAA charts 23 and that's something we'll have to remedy after this 24 hearing to make sure that, you know, everybody knows 25 what's out there. So this is the area that we're Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 1 talking about today. 12/23/2020 ITMO: FL OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 13 2 So we're asking to take our three existing 3 suspended wells and they are -- they're cemented. The 4 AOGCC has looked at everything and agrees with us that 5 they will not flow. The only thing that is laying 6 there is, you know, this 15 foot casing stub. So the 7 question is, can we get a variance to call it abandoned 8 or not. In digging through the records we found 9 precedence that, you know, what we have in our wells is 10 not unique in the Cook Inlet. The first two wells we 11 found are these two shell wells that were drilled and 12 then changed -- they were changed from a suspended to 13 abandoned and approved by Thomas Marshall back in the 14 late 160s. 15 And then so the first well, SRS/ST-1, let's go 16 to Slide 7 -- Slide 7. A 30 inch well casing just like 17 what we have in our wells is reported 12 feet above the 18 sea floor by NOAA on their charts. And it's been in 19 place for 53 years with no issues and it is considered 20 abandoned. 21 If we move to Slide 8 now, the same thing with 22 the SRS/ST-2 well. The 30 inch casing here is 10 feet 23 above the sea floor and, again, it's been in place for 24 53 years with no issues reported. 25 COMMISSIONER SEAMOUNT: Mr. Dusenbery, are Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: F. c OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 14 1 these 30 inch well casings, are they -- do you know if 2 they're cemented to the next casing down? 3 MR. DUSENBERY: We have -- we can -- we have 4 the records here, the abandonment records, we can go 5 through them if you want. I believe -- they're not 6 cemented to the sea floor, but they are cemented to the 7 smaller casing strings inside them. 8 COMMISSIONER SEAMOUNT: Okay. 9 MR. DUSENBERY: And then they have a cement cap 10 on them so we can -- we can walk through those if you 11 like now in more detail. 12 COMMISSIONER SEAMOUNT: Okay, well, just hold 13 that question. You could answer it..... 14 MR. DUSENBERY: Yeah. 15 COMMISSIONER SEAMOUNT: .....after the hearing. 16 MR. DUSENBERY: I have the well records with 17 me. 18 COMMISSIONER SEAMOUNT: Okay. 19 MR. DUSENBERY: But I don't have a slide, 20 unfortunately, showing that particular well. 21 COMMISSIONER SEAMOUNT: Okay. Thank you. 22 MR. DUSENBERY: So then after we located these 23 two wells, you know, in close proximity to our existing 24 wells, we did an additional search. And so if we go to 25 Slide 9, we found four others located near KLU, and Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FL...> OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 15 1 these are all the PanAmerican wells drilled, again, in 2 the mid-60s, and they all are have been -- considered 3 abandoned now with a six foot casing stub above the sea 4 floor. 5 So with that -- I mean so what we're asking 6 for, when we found this, this says, okay, what we're 7 asking for is not unique. But let's walk into our 8 wells and then we'll go through those in more detail 9 and then we can come back to that if you want at that 10 time. 11 Moving to Slide 10. So our three wells have 12 all been properly plugged in accordance with the State 13 regulations. We went through a meeting with Guy 14 Schwartz back in mid -September, and went through 15 everything that had been done with -- we were fortunate 16 to have Bob Lauley, who was actually the man who 17 drilled each of these wells, helping us out here so we 18 got, you know, the best information available on the 19 three wells. With that, we submitted our 10403 20 packages for each well and our request was, you know, 21 to consider these -- well, first, if nothing else, are 22 they capable of flowing anything. Based on that, the 23 AOGCC has agreed with us, that, yes, they will not flow 24 anything to surface. 25 COMMISSIONER SEAMOUNT: Another question. Do Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 1TMO: FL—E OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 16 1 you know why the previous operator didn't abandon them 2 according to regulations? 3 MR. DUSENBERY: And here's why a lot of people 4 have done it that way. When you suspend a well with 5 the casing stub up, it generally means you're looking 6 at going back in at a later time if the conditions 7 warrant to reenter the well. It makes it much easier 8 than if you actually try to do things down -- removing 9 that casing stub five feet below the surface. 10 MR. HENDRIX: Yeah, this is John. All we can 11 do is assume, we do not know. 12 COMMISSIONER SEAMOUNT: Right. 13 MR. HENDRIX: I mean it's just assumptions. We 14 don't know if they saw the last six wells were 15 abandoned like this and they walked away because the 16 State had approved before. We just don't know. All we 17 did when we took over this company was we tried to get 18 data gathering and try to fix everything inside our 19 company and put to bed a lot of issues, and that's what 20 we're doing here. Is we're just trying to get this 21 company running and moving forward. 22 Thank you. 23 MR. DUSENBERY: Okay. This is Rick again. So 24 let's just continue on here with the information on 25 Slide 10. So these wells, all three, lie fairly deep Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FU—E OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 17 1 water, from 88 to 110 feet from mean surface sea level. 2 They were all -- there was -- two of which -- two of 3 these were suspended in 2012, the KLU-4 then was 4 suspended nine months later in 2013, and the wells when 5 we took over the company, you know, they had a 6 suspended status on them and that's, you know, what got 7 us looking at why are these considered suspended versus 8 plugged and abandoned. 9 Let's move to Slide 11. So the reason we're 10 here is to request a variance on that to reclassify 11 these wells as plugged and abandoned. And let's talk a 12 little bit about why we want to do this. If anybody 13 has ever been out in this part of the Cook Inlet, it's 14 a nasty body of water and the easiest way to do this is 15 by sending divers down. So if anybody's been scuba 16 diving, you know, in 100 feet of water you have about 17 25 minutes of bottom time before you have to start 18 worrying about decompression. That's the one issue. 19 But then in the Cook Inlet, because of these, you know, 20 nasty tides that run through twice a day, you have a 30 21 minute window twice a day to do your work. You could 22 not do this work while the tide is flowing, it would 23 just be impossible. Compounded on that, if you put a 24 diver down the visibility out there is next to zero. 25 It's deep. It's got a lot of silt and sediment in the Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FU-c OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 18 1 water. You have very little light and no visibility. 2 You are putting people's lives at risk for what we view 3 as to be a very -- something that's really not going to 4 improve the status of the well very much. So the sea 5 bottom out there, when they did all these exploration 6 wells, they did an extensive sampling and biological 7 assessments. And what we have in all three wells is 8 basically a very hard sea floor. Picture a parking lot 9 with a bunch of very tall boulders on it that are just 10 sitting there and they move around because the Inlet 11 tides are capable of putting quite a bit of energy on 12 those rocks, even on the sea floor. There's been some 13 questions of, okay, do -- are these casing stubs at 14 risk of being, you know, broken or cracked off by one 15 of these rocks. The answer is, because these things 16 are so either driven into the surface, and then 17 cemented deeper, there is not near enough energy in a 18 rock hitting it to do any damage, and because it's a 19 round piece of pipe, the boulders will just roll around 20 the side and just keep traveling on their merry way. 21 So we view that the risk of a boulder causing a problem 22 out there to be negligible. The other issue that has 23 been raised is a navigational hazard, i.e., an anchor 24 snag. First, all that's lying down there is nearly 25 just this casing stuff, there's no well head equipment, Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: Ft,.,.E OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 19 1 nothing to really snag an anchor outside that casing 2 stub. And the only thing we can point back to is that 3 the six wells in this area, there's been no reported 4 problems that we're aware of, that the other wells have 5 caused a problem. 6 So the next question that might come up is, 7 okay, how does this area and the wells out there, 8 what's the impact on fish life. Again, because, you 9 know, there's very little -- this very hard sea bottom, 10 there's not a lot of sea life out there. So we've seen 11 very little salmon. The NOAA Fisheries went through 12 this in a report that's included in one of our sundries 13 that show there's an extremely low beluga density in 14 the KLU area. So if anybody is interested in more 15 details on each of those, I would refer them to each 16 wells individual, the 403 summaries we've submitted to 17 AOGCC. 18 COMMISSIONER SEAMOUNT: Mr. Dusenbery, you say 19 that boulders would just may hit them and just run 20 around the casing or the conductor. 21 MR. DUSENBERY: Yes. 22 COMMISSIONER SEAMOUNT: There has been -- I 23 believe there has been damage to pipelines in the past 24 due to boulders but you would say that..... 25 MR. DUSENBERY: Well, a little bit different. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FL-6 OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 20 1 Pipeline is generally lying horizontal so there's 2 nowhere for that boulder to go. 3 COMMISSIONER SEAMOUNT: Okay. 4 MR. DUSENBERY: So the rock would run up to it 5 and just hit and always be pressuring on it. With us 6 we've got a vertical stub and the boulder would hit and 7 go to the left or the right, you know, because this is 8 not a very big piece of pipe in, you know, real terms 9 here. So the other thing is that then that stub is 10 connected to the rest of the well into the sea bed, 11 there is -- it is a very stout object that boulder 12 would have -- would need quite -- it would need a lot 13 more energy to do any damage. 14 COMMISSIONER SEAMOUNT: Would you happen to 15 know the maximum anchor size that's used in Cook Inlet 16 by boats? 17 MR. DUSENBERY: Well, by boats..... 18 COMMISSIONER SEAMOUNT: Or ships, or vessels. 19 MR. DUSENBERY: Well, it depends on the project 20 we're doing. If you put a platform out there, some of 21 these anchors they use are car size but in general 22 they're much smaller than the boulders that we're 23 talking about here. 24 MR. HENDRIX: Yeah, and we own eight of those 25 anchors. But before you set those anchors generally Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FL—iE OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 21 1 what you do, is you do a bathymetry report, you know, 2 where to set your anchors, you just don't randomly drop 3 an anchor. 4 COMMISSIONER SEAMOUNT: Okay, thank you. 5 MR. DUSENBERY: Okay. So that really brings 6 up, you know, our overview of what we're asking for and 7 what we see as the issues out there. Now, after 8 talking with Guy Schwartz back in September, he asked 9 for a casing cut off estimate. And if we go to Slide 10 12, we see the three estimates that we've come up with. 11 Estimate 1 and 3 are mobilizing barge and divers and 12 you see the cut below the mud line, $3.7 million to and 13 the -- the additional cost there is because we have to 14 take this very hard sea floor and excavate down five 15 feet below it to even get to the casing stub. If we do 16 it just at the mud line, in cost estimate 3, you see we 17 reduce that cost to $2 million. But it's still, you 18 know, $2 million to send out people in extremely 19 dangerous conditions to do something that is not unique 20 in the Cook Inlet. The third estim -- the second 21 estimate there in the middle is if we sent a jack up 22 out and to mobilize the rig, we take away the human 23 aspect of putting people down next to the mud line but 24 you see with that the cost increases to almost $7 25 million. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FL,.,,E OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 22 1 So with that I'll conclude my testimony. I 2 guess the only thing, if you want to look in this 3 presentation some more, in the appendix, we have the 4 abandonment schematics of each of the three wells that 5 we're discussing here today so people can see the 6 details behind each well. 7 MR. HENDRIX: So in summary, from Furie's 8 perspective, you know, we took this project over in 9 July. We started looking at all the well records and 10 going through things, found out we had three wells out 11 there that had been deemed suspended but were not 12 P&A'd. Our desire was to basically move forward with 13 P&A. Safety is our number 1 concern and always will 14 be. We need to keep people out of harm's way if we can 15 prevent it. Basically the wells would not flow when 16 they were drilled, the wells will not flow now because 17 they've been basically submitted and plugged. They've 18 been deemed that way by your ruling body. And the 19 integrity of the well does not exist at the casing at 20 surface, that's just a casing stub sticking up with no 21 -- hardly any cement at all in it. The casing 22 integrity and everything, the integrity of the well is 23 down hole. Anything then over 15 feet not's going to 24 affect things down 300 feet and below so, you know, we 25 do have cement in these wells and they are suspended Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FL...E OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 23 1 and they are plugged and they have been deemed they 2 will not flow. And so that, coupled with the history 3 of the six wells, gives you precedent of setting of 4 that, well, if they've been done before within a 5 quarter mile of us and there has been no issues 6 regarding this. And it's not a cost issue, it's 7 basically a safety issue, and it's your -- we're 8 unnecessarily putting people in harm's way and I cannot 9 stand that. 10 COMMISSIONER SEAMOUNT: Okay. I, personally, I 11 have one last question and that is; within the sundry 12 applications that you submitted there was a plan, I 13 assume the plan was for, was made by the previous 14 operator, it would involve jack up using eight or nine 15 wells. Are you going to continue with that plan or do 16 you have a different plan? 17 MR. DUSENBERY: As outlined in our last plan 18 development for this year coming up, our plan is to get 19 a handle on the four producing wells we have on the 20 platform, get them up to their maximum potential. As 21 you're probably aware we're trying -- we have a permit 22 out right now to get water handling on the upper 23 Sterling formation that produces quite a bit of water 24 with the gas. Assuming that gets approved, we will 25 start, you know, working on bringing those Sterling Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: Fu...E OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 24 1 wells on next year. After that, yes, we've got this 2 tremendous potential out there and there is a lot of 3 gas that we can chase in the shallower zones before we 4 even talk about the deeper oil potential. So as we get 5 into this and we start figuring out, okay, what's next 6 after we get the wells up and running, you'll see 7 probably in our next plan development what our 8 exploration plans are. 9 MR. HENDRIX: We were able to bring on the A4 10 well, which our predecessors were not, and they left a 11 lot of fish in that well and we still have to get those 12 fish out and I think we will eventually but the big 13 thing here is base management of our resources; 14 learning about our wells, knowing our rocks, knowing 15 how to get the gas from -- basically from our well bore 16 to the sales. And I think one thing really important 17 to understand here is we are a gas production asset 18 right now, we are not an oil producing asset, we are 19 gas. And that's all our wells have ever made. They 20 don't show no condensate or anything else it's all 21 natural, almost 99.5 percent methane clean gas. But we 22 do want to -- and we do have Alex (Indiscernible) here, 23 our chief geophysicist, geologist and he's -- we're 24 looking over our KLU acreage and doing circle maps on 25 what possibly could we drill next and we're putting Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FL,—E OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 25 1 that in a hierarchy. But the first thing right here is 2 we got to take care of our base and existing wells that 3 are out there, like these three, are part of our base. 4 COMMISSIONER SEAMOUNT: Okay. One final 5 question of mine is, I think it's the final, well, 6 until after we take our recess, but if you were to 7 mobilize a jack up to do further exploration work, 8 would that make it more efficient to plug these wells 9 according to the existing regulation? 10 MR. HENDRIX: No. 11 COMMISSIONER SEAMOUNT: Okay. Commissioners 12 Chmielowski or Price, do you have any questions before 13 we take a recess? 14 CHAIRMAN PRICE: I have a question, this is 15 Jeremy. 16 COMMISSIONER CHMIELOWSKI: No, I'd like a 17 recess please. 18 CHAIRMAN PRICE: Before we break I wanted to 19 ask a question, this is Jeremy. Mr. Hendrix, in your 20 slide presentation you've got a breakdown of the cost 21 estimate and you focus on the dangers of sending divers 22 down, silty conditions, icy conditions, things of that 23 nature, if things were -- if operations were conducted 24 at summertime where ice isn't an issue is the danger 25 lessened in that environment, does that cost go down or Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: Fu -tE OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 26 1 does it pretty much stay the same? What's your 2 perspective on timing of when operations would commence 3 in comparison with what you've got here? 4 MR. HENDRIX: Yeah, our risk mitigations were 5 all based upon the best conditions possible. The least 6 -- the medium swing of high and low tides, the weather. 7 The big thing is in upper part of Cook Inlet, what I 8 understand talking to divers, is they have to basically 9 take a plastic -- clear plastic bag, fill it full of 10 water and put that on the metal they're going to cut to 11 see it. It is so -- the vision is so bad, the 12 visibility down there. 13 CHAIRMAN PRICE: Thank you. 14 COMMISSIONER SEAMOUNT: Okay, at this time 15 we're going to take a recess. It is 10:39, and we'll 16 be back hopefully in 10 minutes at 10:49. 17 (Off record - 10:39) 18 (On record - 10:53) 19 COMMISSIONER SEAMOUNT: Okay, we're back on the 20 record at 10:53. I have one more question from this 21 bench. And that was, oh, wait, are the other two 22 Commissioners on? 23 COMMISSIONER CHMIELOWSKI: Yes, I'm here. 24 CHAIRMAN PRICE: I'm here. 25 COMMISSIONER SEAMOUNT: Okay. Mr. Dusenbery, Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: Ft-._.E OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 27 1 you testified that the risk of damage from an anchor or 2 a boulder is negligible, but what would happen in an 3 unlikely event that an anchor or boulder did rip off 4 the casing stub? 5 MR. DUSENBERY: It would fortunately..... 6 REPORTER: Your microphone. 7 MR. DUSENBERY: Okay, I've turned it on. 8 Fortunately, like I said, there's only -- you know this 9 well bore that is either driven into the ground and 10 then cemented further down, cement caps in the interior 11 (ph) . 12 (Teleconference interruption - participants not 13 muted) 14 MR. DUSENBERY: Let's say in the event, the 15 almost impossible likelihood that we could rip off this 16 casing stub, we would not touch anything down deeper 17 because you're just -- you know, it would just break 18 off and roll away. It's not like a boulder has near 19 enough energy to lift this well out of the ground or 20 anything to cause some kind of damage. 21 (Teleconference interruption - participants not 22 muted) 23 MR. DUSENBERY: Then on top of that, even..... 24 REPORTER: Excuse me, whoever is typing, can 25 you please mute your phone. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FU.,.E OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 28 1 MR. DUSENBERY: Even on top of that, remember 2 these wells, they -- as they were drilled they were 3 never tested because they never found appreciable 4 hydrocarbons and as we've seen there was nothing that 5 ever flowed in these wells. So the, you know, the 6 minuscule event that some catastrophic event would 7 occur down there, it would have no environmental impact 8 on the Cook Inlet. 9 COMMISSIONER SEAMOUNT: Okay, thank you. There 10 are some Department of Natural Resources people on the 11 phone, does anybody from DNR want to make a comment or 12 ask a question at this time? 13 (No comments) 14 COMMISSIONER SEAMOUNT: Is there anybody else 15 that would like to comment or a question at this time? 16 (No comments) 17 COMMISSIONER SEAMOUNT: Hearing none. 18 Commissioner Chmielowski, do you have anything to say? 19 COMMISSIONER CHMIELOWSKI: No, thank you, 20 Commissioner Seamount, you've covered all the questions 21 I had. 22 COMMISSIONER SEAMOUNT: Commissioner Price. 23 CHAIRMAN PRICE: Nothing for me, thank you. 24 COMMISSIONER SEAMOUNT: Okay. Well, at this 25 time I think it's appropriate to go ahead and close the Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 12/23/2020 ITMO: FL.—E OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 29 1 meeting at 10:55. 2 (Hearing recessed - 10:55) 3 (Off record) 4 (END OF PROCEEDINGS) 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gei.net AOGCC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12/23/2020 ITMO: FU—E OPERATING AK, LLC, STATUS CHANGE DOCKET NO. OTH 2O-056 Page 3 0 1 TRANSCRIBER'S CERTIFICATE I, Salena A. Hile, hereby certify that the foregoing pages numbered 02 through 30 are a true, accurate, and complete transcript of proceedings IN RE: Docket number: OTH 2O-056, transcribed under my direction from a copy of an electronic sound recording to the best of our knowledge and ability. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net e Operating Alaska nded Well Reclassification AOGCC Public Hearing Docket Number: OTH-20-056 December 23rd, 2020 Executive Summary • Eliminating risk to Human life is Furie's number one priority. • All downhole barriers and surface plugs set per regulations in subject wells. • Wells have been rendered incapable of any production or flow by AOGCC (December 1, 2020). • Pre-existing precedence; Six wells located within close proximity of the KLU were granted abandoned status with casing stubs left intact; (6-12 feet).Wells identified on published NOAA navigational charts. • Wells abandoned in similar condition (casing stubs above seafloor) have not posed any threat to navigation or commercial, subsistence, or recreational activities in the area for the past 6 decades. 2 nda Project Location Precedence Casing Abandonment Overview Casing Cutoff Estimates Project Location AOL Z3 AOL 38992$ 389927 AOL 3"381 AOL AOL 389m 389929 AOL 391 604 AOL 38951A AD L. 369513 AOL 390374 Kitchen 7 t�u 4 esci ST 2 -F Lights AOL M9197 11 1- .1 li Q KLUA-1. 6TemA-1 Unit KLU A-ZA 38S"S KLU 3 KLU AAA# RS ST 1 JL, 25 AOL AOL AOL AOL 391,03 391603 MISS 3"515 -,�JMV 2A- *SCI ST 3 , fSRSST&OL AOL 385507 389923 AOL Milos 17 16 KLU 5 2C AD V497 NOAA Navigational Chart — Cook Inlet 23 Bn n s• Julius R Platform 9; r N °°M 9• 9 5 6A B, o, e, 'r 2' caP �-,',,,ee SRS ST 2 12 X. r. � I• 9, `r 2, e; 12 la, a IB 1B „ 13 Y. 11 P 11 0, ;✓ 'r �/ `� He p 07R / I I1 tfi 16 19 IB 8 S 0. � 12 li H / a Tom\ 3. • 2B 21 /IM o I6. 11 22 p 10`r'.� '-,. (\ :. 9 I. 0. 1 I&. °� °f',� l ,+ � /AI !e.♦ ra� H •� 16 ��'/ 9r le ' ate A� ��i/ -19 OAI] s B s' I 9 9� 6, '.� ll,v � j � ��r � e 1B 1/ 21 QD ll SRS ST I ,,; ^f� 0. '� `a,®...0 M•M ,0 " le 20.�r� 19 11 D ?7 r! 12 'IBt e IH BB ! I v for 1P 1, �I. VJ 2 29. 12 12 I] hD 9 'tl' 2.'� ' % %/ IB i2 e C'f •' {� • left/ ` W _'.i )o lov B 10. ], �, I IAAUNil3 196oapW tD201eBD 191p-IB°J 19oP197B Th. -h—npc, elFwyY9crmmpnN Cmg1BE N Htlo 6.w, 5 Precedence 1965 - Shell Oil Company Drilled SRS State No. I (PTD 1 1-62) and State No. 2 (PTD 65-23) Wells cemented, casing stubs not cut off Suspended after drilling operations ended 1967 — Shell Oil Company applied to change status of SRS ST No. I from "Suspended" to "Abandonment" Approved byThomas R Marshall on January 31 st 1967 and No. 2 rl S RS State No. I • 30" well casing reported 12 feet above seafloor by NOAA on navigational charts and obstruction list. • 53 years — No issues reported • Abandoned Status Granted E.4JRlE Latitude: 60.938606 Longitude .-151.14502 Positional Accuracy. Low Year Sunk Depth 0 Depth Units History: CL1179i67-17CGO SPECIAL NOTICE; IDENTIFIED THIS WELL HEAD AS SHELL SOUTH COOK INLET SRS STATE 17582 NO 1 REPORTED IN 60;5621N 151108/34W(NAD27)WITHAREPORTED DEPTH OVER THE OBSTRUCTION OF 75 FEET (MLLW) AND A HEIGHT ABOVE THE BOTTOM OF 12 FEET THIS WELL HEAD IS DESCRIBED AS AN EXPLORATORY WELL -INACTIVE, SHUT IN, SUSPENDED. OR PLUGGED AND ABANDONED. THE TYPE OF SUBSURFACE STRUCTURE MAY BE OF VARIOUS TYPES. (ENTERED 6198 BY MBH) H10924 (2000)--OPR-P385-KR-2000, WELL HEAD NOT EVIDENT IN THE SURVEY DATA. RETAIN AS CHARTED AS IT COULD HAVE ESCAPED DETECTION BY MULTIBEAM (UPDATED 10103 BY MBH) https://wrecks.nauticalcharts.noaa.gov/viewer/ V/ SRS State No. 2 • 30" well casing reported 10 feet above seafloor by NOAA on navigational charts and obstruction list. • 53 years — No issues reported • Abandoned Status Granted Aa Ell Rif; Layer Name: AWOIS Obstructions Record.52424 Vesselterms: OBSTRUCTION Type Obstruction - Submerged Latitude 60.894718 Longitude -151 192245 Positional Accuracy Law Year Sunk. None Depth: 0 Depth Units History. AWOIS ITEM 52424 HISTORY CL1179167- -17CGD SPECIAL NOTICE. IDENTIFIED THIS WELL HEAD AS SHELL SOUTH COOK INLET STATE NO. 2 REPORTED IN 61153143N. 151111124W (NAD27) WITH A REPORTED DEPTH OVER THE OBSTRUCTION OF 83 FEET (MLLW) AND A HEIGHT ABOVE THE BOTTOM OF 10 FEET THIS WELL HEAD IS DESCRIBED AS AN EXPLORATORY WELL - INACTIVE, SHUT IN. SUSPENDED. OR PLUGGED .i AND ABANDONED. THE TYPE OF SUBSURFACE E STRUCTURE MAY BE OF VARIOUS TYPES. § (ENTERED 6r98 BY MBH) H10924 (2000)--OPR-P385- KR-2000 WELL HEAD NOT EVIDENT IN THE _ SURVEY DATA RETAIN AS CHARTED AS IT COULD HAVE ESCAPED DETECTION BY MULTISEAM (UPDATED 10103 BY MBH) https://wrecks.nauticalcharts.noaa.gov/viewer/ 8 Additional Offsets With Casing Stubs Near KLU BE• Pan American Cook Inlet State 18741 No. I — 6 feet above seafloor • Pan American Cook Inlet State 18741 No. 2 — 6 feet above seafloor • Pan American Middle Ground Shoal 18746 No. I — 6 feet above seafloor • Pan American Forelands State Unit No. I — 6 feet above seafloor -? FURZE Casing Abandonment Overview: KLU # 1, KLU #2A, KLU #4 The KLU # 1, KLU #2A, and KLU #4 wellbores have been properly plugged in accordance to 20 AAC 25.112. A technical review meeting with AOGCC Sr. Petroleum Engineer Guy Schwartz was held on September 18th, 2020 to thoroughly discuss abandonment operations previously performed. Summary of abandonment operations and wellbore schematics included in 10-403 submission package for each well. See KLU #I 10-403 Submission Package -Abandonment Reclassification submitted to AOGCC on 10/23/2020 and KLU #2A and KLU #4 I 0-403 Submission Package -Abandonment Reclassification submitted to the AOGCC on 1 1 / 10/2020. Fifteen feet of thirty -inch conductor casing currently remains above seabed for each of the abovementioned wells. Water depth at these locations range from 88' — 110' MSL. KLU # 1 and KLU #2A have been suspended with zero issues since November of 2012. KLU #4 suspended September of 2013 Wells were classified as "Suspended" instead of"Plug and Abandoned" because casing stubs were left intact. [�7 Casing Abandonment Overview: KLU # 1, KLU #2A, KLU #4 • Furie has requested a variance to 20 AAC 25.172 Offshore location clearance to reclassify the wells as "Plug and Abandoned". ➢ Extreme tides in the Cook Inlet present unique challenges and high risks to any surface or subsea operation. Furie believes the human safety risk associated with cutting off the remaining fifteen feet of casing stub is high and not commensurate with the operational outcome. Current cost estimates to cut off casing stubs via divers and support barge or via rig intervention range from $2-7 MM. • The cost associated with performing this operation will have negative effects on Furie operational plans in the future, reducing revenue to the company and tax revenue to the State of Alaska. ➢ Environmental sampling during exploratory drilling operations and biological assessments conducted in the project area show no sediments present in the vicinity of any three of the casing stubs, supporting minimal sea life and no commercial fishing activities in the KLU area. ➢ Bathymetry surveys in the area illustrate boulders on the seafloor as tall or taller than the casing stubs (See 10-403 Submission Packages). • This negates any potential navigational hazard (i.e. anchor snag). NOAA fisheries demonstrated low Beluga density in the KLU area (NOAA; May 8, 2018). An assessment compiled by Jacobs that summarizes these findings in support of granting a variance to the Offshore Location Clearance for each well has been submitted with the sundry approval forms (See 10-403 Submission Packages). 11 Casing Cutoff Cost Estimates Cost Estimate #1 Mobilize Barge/Divers, Cut 5 Feet Below Mudline Estimated Project Total, Including Mobilization/Demobilization and Estimated Operational Time $ 3,727,250.00 Cost Estimate #2 Mobilize Jackup Rig, Cut 5 Feet Below Mudline Estimated Project Total, Including Mobilization/Demobilization and Estimated Operational Time $ 6,938,100.00 Cost Estimate #3 Mobilize Barge/Divers, Cut at Mudline Estimated Project Total, Including Mobilization/Demobilization and Estimated Operational Time $ 2,030,000.00 S Questions? �Se � z�f, 13 Appendix KLU # I Abandonment Schematic KLU #2 Abandonment Schematic KLU #4 Abandonment Schematic 14 Abandonment Schematic KLC Ito Current Abandonment Schematic (September 2020 - BI.) I Y above seanaor i 13 318"cap tested to 300 psi (or 30 ruin - good test. 9718"tap tested to 1000 psi fur 30 min -good test. 30" casing shoe at 358' 20" rasing shoe a1 1805 13 318" casing shoe et 49 97/8"casing shoe at 133H MUN: 88' 188' - 30" cop. 30" and 20' casing stubs 20Y - Sealloor Dglhs 7u FAR 277' - Butt weld sub 28..5' - Top cement 295' - Top sand 324' - stud Line Suspension 20" cc erifed with fu11 mums. Circulate 20"s 30" anwdus through port in 20" MLS. Ports squaw moot because MLS pots —dd not close. 20" tested ro 1000 psi wituessed by AOGCC 101411). 352' - TOC 13 3/8" x 20' annulus tested to 350 psi Cot 30 min (10124/11) - good test. Top cement 97/8"at MLS eircrdated from DV tool .1 SSW 9 7/8"x 13 3/8'annulus tested to 500 psi for 30 min (715112 and 8/24112) -good test. 8809' - DV tool 13108' - Top cement plug 15298' - TD open hole IS 2A Abandonment Schematic KLL' e2A Current Abandonment Schematic fticptember 2020 - gl.! MLLW: 102' M.tii" .. 19T-.top 30' 15 abcwl seatloot 212' - Scalloor Pepsi— RKZ 30" casing dwcn to 366' 3 3)8" casing to 426'(curtain strip 20" casing to 19 9 718" casing to 10' 220' . Top 20' 226 . Top cement 246' - Top sand 20' MIS mrn uT loot will, gauled threads 13 318"Cap untested - 13 3/8'sluse open 9 718"cap (cited to 300 psi 266' - Mud line Suspension 30" x 20" cernfuI Job had)ull mums and flushed door to 280' through a grata siring. 8 hours gfler cementing annulus took 7 bbi to fill. placing top of cement at 302'. 302' . Top of cement Top crment below 426' - circulate 13 318' m 20" no urrsrut returned to surface. V"r 9 7I8"annulus tested to 500 psi for JO mitt 0112112) - gnat test. 20" casing tested to 25W psi prior to drilling out shoe. IM 4 Abandonment Schematic I 15 above sea(loar 1 30" casing driven to 318' 20" casing shoe at 239 133/8"c KLU x4 Current Abandonment Schematic (Scptembcr 2020 - BL) MLLW: 77' MSL 177- - Top 30- 192' - SeaBoor lkplo m RKB 196' - Top Cement 206' - Top Sand */- 211' - 20" & 13 3/8" caps 13 3/8' cap tested 540 psi 215' - Mud line Suspension 30"x 10'Cement job ful) returns. Annulus circulated ckar through grout string to 115'. 10' x 13 3/8" annalus downsqueeze tested to 54o psi. Witnessed by AOGCC (Guy Schwartz 912)/13) 1000' - 20" s 13 3/8" annulus downaqueezed 20W to 1000' due to DV failure on 2nd stage of primary cement job. 10"casing tested to 1500 psi (813113)just prior to drilling out shoe 17 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION December 23, 2020 at 10:00 am OTH-20-056 NAME d/l ��A/—TG ) 6 C AFFILIATION Z/ r�Q l r i k le- U ) L4h,�-*D l Cs .c C--� rz �aJ B roo .� N -Qjg/4 r (7 1 n n/t .e CjaJ-jJ Qcu-?6 ee- 1nh�� Testify (yes or no) I FA N ss� t COOK INLET "The mission of the Council is to represent the citizens of cook Inlet in promoting environmentally safe marine transportation and oil facility operations in Cook Inlet. " Members December 21, 2020 Tourism Jessie L. Chmielowski, Commissioner Group Alaska Oil and Gas Conservation Commission 333 West 7' Avenue, Suite 100 Anchorage, AK 996501 Alaska Native Group Re: Docket Number: OTH-20-056, Furie Operating Alaska, LLC (Furie) submitted Application for Sundry Approvals Forms Dear Commissioner Chmielowski: Environmental Group Cook Inlet Regional Citizens Advisory Council (CIRCAC) submits these comments to the Alaska Oil and Gas Conservation Commission (AOGCC) regarding the submittal by Furie Recreation Operating Alaska, LLC (Furie) of an Application for Sundry Approvals Forms. Furie proposes Group to modify the status of offshore exploration wells in the Kitchen Lights Unit (KLU 1, KLU 2A, and KLU 4) from "Suspended" to "Plug and Abandoned." Per Furie's application, the wells would be left with pipe extending 15 feet above the seabed floor, instead of removing all Aquaculture wellhead equipment and the casing to a depth at least 5 feet below the mudline datum, as Associations required by AOGCC regulations. CIRCAC is a nonprofit corporation organized exclusively for the oversight, monitoring, Commercial assessing and evaluation of oil spill prevention, safety and response plans, terminal and oil Fishing Group tanker operations, and environmental impacts of oil tanker and oil terminal operations in Cook Inlet under the provisions of Section 5002 of the Oil Pollution Act of 1990. Our mission is to represent the citizens of Cook Inlet in promoting environmentally safe marine transportation City of Kodiak and oil facility operations in Cook Inlet. CIRCAC consists of 13 members from Cook Inlet communities, as well as Alaska Native groups, commercial fishing and aquaculture, tourism, recreational and environmental interest groups that have a significant stake in the environment City of Kenai and resources at risk from oil production and transportation in the region. We respectfully submit that if this request for regulatory variance is granted, it may set a City of Seldovia disturbing precedent for Cook Inlet and elsewhere in the state where drilling from a mobile drilling unit may occur. City of Homer State of Alaska and federal regulations establish a baseline expectation for safe oil and gas operations in Alaska. While flexibility may sometimes be warranted, companies should only be Kodiak Island granted exceptions to the rules if there is clear and justifiable rationale why the exception is Borough necessary and information to indicate that the exception will not increase risk of oil spills or other impacts to public health and safety and the environment. Concerning Furie's operations in Cook Inlet, it is our understanding that the operator has only properly "Plugged and Kenai Peninsula Abandoned" one well. Borough CIRCAC disagrees with Furie's attempt to justify the proposed regulatory variation - that leaving the wells in their current state will not pose a substantial environmental or navigational Municipality of Anchorage Cook Inlet Regional Citizens Advisory Council * 8195 Kenai Spur Highway, Kenai, AK 99611-8033 Phone: (907) 283-7222 * Fax (907) 283-6102 * www. circac. org risk. It is our opinion that seafloor obstructions such as these wells add to navigational risk for large marine vessels in transit. Of particular concern is the potential of an anchor snag in the event of a vessel attempting self -arrest due to a loss of steering or propulsion, which has been utilized in the past by marine pilots in Cook Inlet. It is also a well-known fact that the Cook Inlet is notorious for large boulders moving along the seabed due to extreme tidal fluctuations and associated high currents. Recently, a boulder impacted a subsea pipeline in Cook Inlet causing a leak, requiring repair. That damage caused a discharge of natural gas for an extended period of time, due to environmental conditions repairs could not be executed for several months. Furie cites safety concerns as a justification. We are not aware of any operational safety concern that exist today that did not exist when Furie agreed to abide by the requirements of 20 AAC 25.172(b)- to "...remove the wellhead equipment, casing, piling, and other obstructions to a depth at least five feet below the mudline before removing the drill rig..." aside from seasonal ice coverage. It appears that the primary reason to leave these wells in place is cost savings. Furie has not provided any substantial justification for leaving the wells in perpetuity in their current state and we recommend that the commission require Furie to Plug and Abandon the three wells in question commensurate to the regulatory requirement cited in 20 AAC 25.172(b). In closing, CIRCAC also recommends that the AOGCC consult with all other State agencies with purview over the various aspects of Furie's enterprise to ensure that all other regulations related to mitigating operational and financial risks are adequately addressed prior to any potential relief from regulatory obligation. Thank you for your attention to these comments. Please do not hesitate to contact Steve "Vinnie" Catalano, with questions at (907) 398-6215 or via email at Stevecatalanona,circac.org. Sincerely, Michael Munger Executive Director Cook Inlet Regional Citizens Advisory Council * 8195 Kenai Spur Highway, Kenai, AK 99611-8033 Phone: (907) 283-7222 *Fax (907) 283-6102 * www.circac.org Cook Inletkeeper 3734 Ben Walters Lane Homer, Alaska 99603 VIA EMAIL ONLY (jessie.chmielowski@alaska.gov) December 22, 2020 Jessie Chmielowski, Commissioner Alaska Oil and Gas Conservation Commission State of Alaska 333 West 71h Avenue Anchorage, AK 99501 Re: Furie Request for Multiple Exemptions to 20 AAC 25.172 (Docket OTH-20-056) Dear Commissioner Chmielowski: p. 907.2 3 5.4068 f. 907.235.4069 www. i n letkeeper.ore Cook Inletkeeper is a community -based organization formed by Alaskans in 1995 to protect the Cook Inlet watershed and the life it supports. Please consider these brief comments on the above -referenced matter on behalf of Inletkeeper and its more than 8500 members and supporters throughout southcentral Alaska. 20 AAC 25.172(b) requires operators to "remove the wellhead equipment, casing, piling, and other obstructions to a depth at least five feet below the mudline before removing the drill rig, unless otherwise approved by the commission as adequate to protect public health and safety." (emphasis added). Inletkeeper is unaware whether AOGCC made such findings prior to the removal of the drill rig from the wellheads in question. Regardless, AOGCC should enforce the requirement to remove all obstructions to below the mudline. The rule exists to protect public health and safety, and it was in place when Furie drilled its wells. As a result, Furie knew or should have known of its obligations at the time it set forth drilling in Cook Inlet. In its presentation to AOGCC, Furie cites historic wells with casing or other obstructions extending beyond the seafloor. These wells pre -date 20 AAC 25.172, and reflect the "wild Protecting Alaska's Cook Inlet watershed and the life it sustains since 1995. west" days of exploration and development in Cook Inlet, when oversight was lax and DR&R standards were few. We have learned a lot since then, and best practices for modern oil and gas work offshore require operators to return the sea floor to as close to natural conditions as possible. Furthermore, Furie rightly notes in its filings and presentation that large boulders surround the wellheads, and that Cook Inlet experiences extreme tides and currents. These physical realities can conspire to put the extended wellheads at risk because these boulders are known to roll and move in Cook Inlet's dynamic currents, and they could crush or damage the wellheads. Finally, Furie cites elevated costs to rationalize its request for multiple variances to 20 AAC 25.172. As discussed, Furie knew or should have known about its costs to comply with Alaska law prior to drilling, and those costs should be wrapped into its drilling program. Additionally, the projected costs cited by Furie appear high, and should be verified. If AOGCC releases Furie from its obligations to properly abandon its wells, it will set an unfortunate precedent for other operators to cut corners and request the same in the future. That in turn would render 25 AAC 25.172 superfluous. Thank you for your attention to these comments. Yours for Cook Inlet, Bob Shavelson Inletkeeper Cc: VIA EMAIL ONLY Jody Colombie, AOGCC Seamount, Dan T (CED) From: Price, Jeremy M (CED) Sent: Thursday, December 17, 2020 3:45 PM To: Davies, Stephen F (CED); Chmielowski, Jessie L C (CED); Seamount, Dan T (CED); Ballantine, Tab A (LAW); Roby, David S (CED); Rixse, Melvin G (CED); Schwartz, Guy L (CED); Boyer, David L (CED); Loepp, Victoria T (CED); Regg, James B (CED); Colombie, Jody J (CED) Subject: Fwd: Cook Inlet Well Abandonment Response from Coast Guard re Furie. Jody please ensure this is included in the hearing record Begin forwarded message: From: "Lemanski, Mateusz J LT" <Mateusz.J.Lemanski@uscg.mil> Date: December 17, 2020 at 3:38:05 PM AKST To: "Price, Jeremy M (CED)" <jeremy.price @alaska.gov> Subject: Cook Inlet Well Abandonment It was nice talking to you Mr. Price, Regarding the FURIE wells abandonment in Cook Inlet, I'd be reluctant to call it a "hazard to navigation". On the other hand, a lack of awareness of said structures would be a concern. At a minimum, we need to ensure that there is a mechanism to communicate with NOAA to update the charts to show that the protruding subsurface infrastructure remained in place. After consulting with the Marine Pilots, I could see a situation where a vessel needs to drop an anchor in an emergency, to self -arrest or someone wants to install a new pipeline or subsea cable, or some other event (earthquake) that requires a response. If this information makes it to the charts, there will be documentation on file that is relatively easy to access. I hope this helps, feel free to reach out in case of any further questions. Very Respectfully, LT Matt Lemanski Waterways Management Division Chief U.S. Coast Guard Sector Anchorage Office: (907) 428-4189 Colombie, Jody J (CED) From: Davies, Stephen F (CED) Sent: Friday, December 18, 2020 11:27 AM To: r.dusenbery@furiealaska.com Cc: Colombie, Jody J (CED); Carlisle, Samantha J (CED) Subject: Furie Public Hearing, Dec. 23, 2020 - AOGCC Questions Categories: Yellow Category Mr. Dusenbery, AOGCC compiled the following list of questions for Furie to address during the public hearing scheduled for 10 AM on December, 23'd. It may also be helpful for Furie to review AOGCC's Public Hearing Guidelines (https://www.commerce.alaska.gov/web/Portals/18/pub/PubHrgGuid.pdf). 1. Furie's stated water depths in cover letters accompanying the Sundry Applications to reclassify wells KLU 1, 2A and 4 are much greater than those measured by Watson Company (Watson) while conducting geohazards site clearance surveys for these wells. Please reconcile these discrepancies. 2. Furie's cover letters for the Sundry Applications also state: "eathymetry surveys in the area[s] illustrate boulders on the seafloor as tall or taller than the casing stub... This negates any potential navigational hazard (i.e. anchor snag)." AOGCC's quick review of the original detailed Geohazards Site Clearance Surveys by Watson for each of these wells show that the casing stub is the tallest object near KLU -2A, the tallest object within about 950' of KLU- 1, and the tallest object within about 450' of KLU 4. Boulders are relatively sparse in the areas surrounding these wells. Since these casing stubs are in waters less than about 100' deep at low tide, please explain why they will not present hazards to fishermen or to other commercial or recreational activities in this area. 3. Are these casing stubs marked or shown as potential navigation hazards on commonly available marine bathymetry charts for the Cook Inlet? 4. Has Furie discussed leaving these 15' casing stubs in place with the Coast Guard? If so, could Furie please share the results of the discussion with AOGCC and the public? 5. Cook Inlet currents are swift. Do these boulders move? If so, will they constitute hazards for the unprotected casing stubs? 6. Do you know why these isolated exploratory wells weren't abandoned immediately following drilling and testing? If so, please explain. 7. Supporting documents for the Sundry Applications describe previous bottom -sediment sampling efforts that were unsuccessful due to hard-seafloor conditions. What geologic formation lies at or just beneath the seafloor in the KLU area? How would hard-seafloor conditions affect operations to cut off casing in accordance with AOGCC regulations? Do the hard-seafloor conditions add or subtract from well integrity? 8. What are Furie's future exploration and operation plans? a. In the recent Sundry Applications there is a description of the proposed action which states: "Furie plans to conduct an exploration program commencing during May, 2018, and extending through November, 2021." This program indicates 9 wells will be drilled with a jack -up rig. Does Furie plan to conduct this exploratory drilling program? If so, when? b. Does Furie plan to mobilize a jack up rig for future exploration? If so, which rig? c. If Furie conducts this exploratory drilling program, how would the efficiencies (and costs) of cutting off the casing 5' below the mudline change if that work was performed in conjunction with the exploratory drilling program? Please let me know if you have any questions. rOOeoo F RIE ,?,000OPERA ING ALASKA LLC December 15th, 2020 Guy Schwartz Sr. Petroleum Engineer Alaska Oil and Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, AK 99501 RE: Updated Casing Cut Off Cost Estimates for KLU #1, KLU #2A, KLU #4 Mr. Schwartz, Furie Operating Alaska, LLC (Furie) submits preliminary cost estimates to cutoff and remove the conductor casing five feet below mudline datum for KLU #1, KLU #2A, and KLU #4 as well as a cost estimate to cut off the conductor casing at mudline. All three offshore exploration wells have conductor pipe extending 15 feet above the seafloor bed. Furie has previously submitted 10-403 sundry approval forms to modify the current status of the exploration wells from "Suspended" to "Plug and Abandoned" status with a request for a variance to 20 AAC 25.172 Offshore location clearance (See KLU #1, KLU #2A, and KLU #4 10- 403 Submission Packages sent to AOGCC on 10/23/2020 and 11/10/2020). Water depth at these locations range from 192-212 feet RKB. Environmental sampling during exploratory drilling operations and biological assessments conducted in the project area show no sediments present in the vicinity of any three of the casing stubs, supporting minimal sea life. Additionally, NOAA fisheries demonstrated low Beluga density in their biological opinion submitted. Bathymetry surveys in the area indicate boulders on the seafloor as tall or taller than the casing stubs. This negates any potential navigational hazard (i.e. anchor snag). An assessment compiled Jacobs that summarizes these findings in support of granting a variance to the Offshore Location Clearance has been submitted with the sundry approval forms (See 10-403 Submission Packages). Extreme tides in the Cook Inlet present unique challenges and potential risks to any surface or subsea operation. Furie believes the human safety risk associated with cutting off the remaining 15 feet of casing stub is high and not commensurate with the operational outcome. Furthermore, the cost associated with performing this operation will have negative effects on Furie operational plans in the near future, potentially reducing revenue to the company and tax revenue to the State of Alaska. This goes directly against the mission statement of the AOGCC; "To protect the public interest in exploration and development of Alaska's valuable oil, gas, and geothermal resources through the application of conservation practices designed to ensure greater ultimate recovery and the protection of health, safety, fresh ground waters and the rights of all owners to recover their share of the resource" In support of approving the variance to 20 AAC 25.172 offshore location clearance, three cost estimates are provided below. All estimates are cost prohibitive. The first cost estimate was provided to Furie in 2018 by Global Diving to cut off conductor casing 5 feet below mudline datum. Included in the cost Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 ior::: :0 " ,Z,00- FJRIE OPERA ALASKA LLC estimate are charges for mobilization/demobilization of an appropriately outfitted and equipped barge to conduct moored operations in Cook Inlet, Alaska. The second cost estimate provided below includes charges to mobilize a jackup rig in the Cook Inlet to assist in the abandonment via rig intervention. The third cost estimate, provided by Global Diving in December of 2020, includes costs to cut off the conductor casing at mudline via barge/divers. It is important to note that due to current market conditions and the industry downturn resulting from low prices and COVID-19, prices are currently higher than normal and could vary greatly depending on operational timing. Cost Estimate #1— Mobilize Barge/Divers, Cut 5 Feet Below Mudline Included in the first cost estimate are charges for mobilization/demobilization of an appropriately outfitted and equipped barge to conduct moored operations in Cook Inlet, Alaska. Also included are estimated tug support and diving life support systems mobilization -demobilization, estimated expenses for mobilization -demobilization of project tooling and for well abandonment operations. The estimated day rates assume a single mobilization to conduct abandonment operations on all three locations. Mobilization/demobilization costs for a single location operation could concur a per occurrence mobilization/demobilization cost at or higher than estimated. Labor rates are based on a 3-tide per day operational model. 24-hour operations may require additional assets and associated costs not provided for in this estimate. This estimate does not include a well engineer or any engineering in regards to well abandonment requirements. Costs are summarized below; Activity Quantity Unit Total ($USD) Mobilization / Demobilization 1 ea $1,368,500.00 KLU #1: Cutoff 20" and 30" casing 5' 8 Day $754,800.00 below seafloor KLU #2A: Cutoff 30" casing 5' below 10 Day $849,150.00 seafloor KLU #4: Cutoff 30" casing 5' below 8 Day $754,800.00 seafloor Estimated Project Total, Including Mobilization/Demobilization and Estimated Operational Time $ 3,727,250.00 Page 12 Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 r�:000 F IE OPERA ING ALASKA LLC Cost Estimate #2 — Mobilize Jackup Rig, Cut 5' Below Mudline The second cost estimate provided below includes charges to mobilize a jackup rig in the Cook Inlet to assist in the abandonment via rig intervention. For this cost estimate, historical charges were compiled for the Spartan 151 rig which was originally used to drill the three exploration wells. The rig is currently located in Nikiski, Alaska but has been cold stacked. It is estimated it would take at least 30 days to mobilize the rig and another 30 days to prepare the rig for cold storage during demobilization. Full mobe/demobe daily rate would be applied during this time. Also included are estimated costs for support equipment including tug, casing cutoff saw (Wachs saw or equivalent), and full rig support including catering and rig supervision. Activity Item Description Quantity Unit ($ Price ice) Total ($USD) Mobilization Mobilization Day Rate 30 Day $50,500.00 $1,515,000.00 Rig Support 20 Day $25,000.00 $500,000.00 KLU #1: Cutoff 20" and 30" casing 5' below seafloor Rig Day Rate 6 Day $80,700.00 $484,200.00 Tug 6 Day $18,000.00 $108,000.00 Casing Saw 6 Day $5,000.00 $30,000.00 Rig Support 6 Day $25,000.00 $150,000.00 RDMO KLU #1; RU KLU #2A Rig Day Rate 3 Day $80,700.00 $242,100.00 Rig Support 3 Day $25,000.00 $75,000.00 KLU #2A: Cutoff 30" casing 5' below seafloor Rig Day Rate 4 Day $80,700.00 $322,800.00 Tug 4 Day $18,000.00 $72,000.00 Rig Support 6 Day $25,000.00 $150,000.00 RDMO KLU #2A; RU KLU #1 Rig Day Rate 3 Day $80,700.00 $242,100.00 Rig Support 3 Day $25,000.00 $75,000.00 KLU #1: Cutoff 30" casing 5' below seafloor Rig Day Rate 4 Day $80,700.00 $322,800.00 Tug 4 Day $18,000.00 $72,000.00 Casing Saw 4 Day $5,000.00 $20,000.00 Rig Support 6 Day $25,000.00 $150,000.00 RDMO Day rate 3 Day $80,700.00 $242,100.00 Rig Support 6 Day $25,000.00 $150,000.00 Demobilization Demobilization Day Rate 30 ea $50,500.00 $1,515,000.00 Rig Support 20 Day $25,000.00 $500,000.00 Estimated Project Total, Including Mobilization/Demobilization and Estimated Operational Time $6,938,100.00 Page 13 Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 e0% :weo, I, ?o� FJR1 E OPERA ALASKA LLC Cost Estimate #3 — Mobilize Barge/Divers. Cut at Mudline Included in the third cost estimate are charges for mobilization/demobilization of an appropriately outfitted and equipped barge to conduct operations in Cook Inlet, Alaska. Also included are estimated tug support and diving life support systems mobilization -demobilization, estimated expenses for mobilization -demobilization of project tooling and for well abandonment operations. The estimated day rates assume a single mobilization to conduct abandonment operations on all three locations. Labor rates based on a three dive per day model, utilizing the DSV Sand Island to berth the dive time. Costs are summarized below; Note: This estimate does not include costs for setting up 24-hour operations. The depths of water at the reported locations vary from 88-112 feet below MSL. Bottom times will be limited to 10 mins or less due to water depth and timing of slack tides. The operation should be conducted from a fixed platform. A derrick barge or similar asset fitted with a suitable crane to deploy tooling and recover the well casings once cut. There are local operators with assets available in the state to support this in either 4- or 6- point mooring mode. Costs for 3rd party mooring/anchors are not included in this estimate. If a platform must mobilized for this operation, the anchor system equipment would need to be mobilized from Washington, as there are no suitable systems to rent in the state These costs are also not included in this cost estimate. Activity Quantity Unit Total ($USD) Mobilization / Demobilization 1 ea $795,000.00 KLU #1: Cutoff 20" and 30" casing 5' 9 Day $585,000.00 below seafloor KLU #2A: Cutoff 30" casing 5' below 5 Day $325,000.00 seafloor KLU #4: Cutoff 30" casing 5' below 5 Day $325,000.00 seafloor Estimated Project Total, Including Mobilization/Demobilization and Estimated Operational Time $ 2,030,000.00 Page 14 Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 T FRIE OPER ING ALASKA LL(- If you have any questions or require further information, please contact me at (907) 565-2001 or email at r.dusenbery@furiealaska.com. Regards, Rick Dusenbery Chief Operating Officer Furie Operating Alaska, LLC Page 15 Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 November 23rd, 2020 Guy Schwartz Sr. Petroleum Engineer Alaska Oil and Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, AK 99501 RE: Casing Cut Off Cost Estimates for KLU #1, KLU #2A, KLU #4 Mr. Schwartz, Furie Operating Alaska, LLC (Furie) submits this preliminary cost estimate to cut off and remove the conductor casing five feet below mudline datum for KLU #1, KLU #2A, and KLU #4. All three offshore exploration wells have conductor pipe extending 15 feet above the seafloor bed. Furie has previously submitted 10-403 sundry approval forms to modify the current status of the exploration wells from "Suspended" to "Plug and Abandoned" status with a request for a variance to 20 AAC 25.172 Offshore location clearance (See KLU #1, KLU #2A, and KLU #4 10-403 Submission Packages sent to AOGCC on 10/23/2020 and 11/10/2020). Water depth at these locations range from 192-212 feet MSL. Environmental sampling during exploratory drilling operations and biological assessments conducted in the project area show no sediments present in the vicinity of any three of the casing stubs, supporting minimal sea life. Additionally, NOAA fisheries demonstrated low Beluga density in their biological opinion submitted. Bathymetry surveys in the area illustrate boulders on the seafloor as tall or taller than the casing stubs. This negates any potential navigational hazard (i.e. anchor snag). An assessment compiled Jacobs that summarizes these findings in support of granting a variance to the Offshore Location Clearance has been submitted with the sundry approval forms (See 10-403 Submission Packages). Extreme tides in the Cook Inlet present unique challenges and potential risks to any surface or subsea operation. Furie believes the human safety risk associated with cutting off the remaining 15 feet of casing stub is high and not commensurate with the operational outcome. Furthermore, the cost associated with performing this operation will have negative effects on Furie operational plans in the near future, potentially reducing revenue to the company and tax revenue to the State of Alaska. This goes directly against the mission statement of the AOGCC; "To protect the public interest in exploration and development of Alaska's valuable oil, gas, and geothermal resources through the application of conservation practices designed to ensure greater ultimate recovery and the protection of health, safety, fresh ground waters and the rights of all owners to recover their share of the resource" In support of approving the variance to 20 AAC 25.172 offshore location clearance, two cost estimates are provided below. Both estimates are cost prohibitive. The first cost estimate was provided to Furie in 2018 by Global Diving. Included in the cost estimate are charges for mobilization/demobilization of an Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 0 " go: FURIE ING ALASKA LLC appropriately outfitted and equipped barge to conduct moored operations in Cook Inlet, Alaska. The second cost estimate provided below includes charges to mobilize a jackup rig in the Cook Inlet to assist in the abandonment via rig intervention. It is important to note that due to current market conditions and the industry downturn resulting from low prices and COVID-19, prices are currently higher than normal and could vary greatly depending on operational timing. Cost Estimate #1— Mobilize Barge/Divers Included in the first cost estimate are charges for mobilization/demobilization of an appropriately outfitted and equipped barge to conduct moored operations in Cook Inlet, Alaska. Also included are estimated tug support and diving life support systems mobilization -demobilization, estimated expenses for mobilization -demobilization of project tooling and for well abandonment operations. The estimated day rates assume a single mobilization to conduct abandonment operations on all three locations. Mobilization/demobilization costs for a single location operation could concur a per occurrence mobilization/demobilization cost at or higher than estimated. Labor rates are based on a 3-tide per day operational model. 24-hour operations may require additional assets and associated costs not provided for in this estimate. This estimate does not include a well engineer or any engineering in regards to well abandonment requirements. Costs are summarized below; Activity Quantity Unit Total ($USD) Mobilization / Demobilization 1 ea $1,368,500.00 KLU #1: Cutoff 20" and 30" casing 5' 8 Day $754,800.00 below seafloor KLU #2A: Cutoff 30" casing 5' below 10 Day $849,150.00 seafloor KLU #4: Cutoff 30" casing 5' below 8 Day $754,800.00 seafloor Estimated Project Total, Including Mobilization/Demobilization and Estimated Operational Time $ 3,727,250.00 Page 1 2 Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 FqR1 ALASKA LLC Cost Estimate #2 — Mobilize Jackup Rig The second cost estimate provided below includes charges to mobilize a jackup rig in the Cook Inlet to assist in the abandonment via rig intervention. For this cost estimate, historical charges were compiled for the Spartan 151 rig which was originally used to drill the three exploration wells. The rig is currently located in Nikiski, Alaska but has been cold stacked. It is estimated it would take at least 30 days to mobilize the rig and another 30 days to prepare the rig for cold storage during demobilization. Full mobe/demobe daily rate would be applied during this time. Also included are estimated costs for support equipment including tug, casing cutoff saw (Wachs saw or equivalent), and full rig support including catering and rig supervision. Activity Item Description Quantity Unit ($ Price ice) Total ($USD) Mobilization Mobilization Day Rate 30 Day $50,500.00 $1,515,000.00 Rig Support 20 Day $25,000.00 $500,000.00 KLU #1: Cutoff 20" and 30" casing 5' below seafloor Rig Day Rate 6 Day $80,700.00 $484,200.00 Tug 6 Day $18,000.00 $108,000.00 Casing Saw 6 Day $5,000.00 $30,000.00 Rig Support 6 Day $25,000.00 $150,000.00 RDMO KLU #1; RU KLU #2A Rig Day Rate 3 Day $80,700.00 $242,100.00 Rig Support 3 Day $25,000.00 $75,000.00 KLU #2A: Cutoff 30" casing 5' below seafloor Rig Day Rate 4 Day $80,700.00 $322,800.00 Tug 4 Day $18,000.00 $72,000.00 Rig Support 6 Day $25,000.00 $150,000.00 RDMO KLU #2A; RU KLU #1 Rig Day Rate 3 Day $80,700.00 $242,100.00 Rig Support 3 Day $25,000.00 $75,000.00 KLU #1: Cutoff 30" casing 5' below seafloor Rig Day Rate 4 Day $80,700.00 $322,800.00 Tug 4 Day $18,000.00 $72,000.00 Casing Saw 4 Day $5,000.00 $20,000.00 Rig Support 6 Day $25,000.00 $150,000.00 RDMO Day rate 3 Day $80,700.00 $242,100.00 Rig Support 6 Day $25,000.00 $150,000.00 Demobilization Demobilization Day Rate 30 ea $50,500.00 $1,515,000.00 Rig Support 20 Day $25,000.00 $500,000.00 Estimated Project Total, Including Mobilization/Demobilization and Estimated Operational Time $6,938,100.00 Page 1 3 Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 F JRIE OPERA ING ALASKA LLC If you have any questions or require further information, please contact me at (907) 565-2001 or email at r.dusenbery@furiealaska.com. Regards, Rick Dusenbery AOGCC Received Stamp Here Page 14 Furie Operating Alaska, LLC 1 188 W Northern Lights Blvd, Suite 620, Anchorage, AK 99503 1907.277.3726 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: OTH-20-056 Furie Operating Alaska, LLC (Furie) submitted Application for Sundry Approvals Forms to modify current status of offshore exploration wells KLU 1, KLU 2A and KLU 4 from "Suspended" to "Plug and Abandoned". Furie has requested the status change be made without any further wellwork. All three wells have structural pipe extending 15 feet above the seabed floor. Because AOGCC regulations require the wellhead equipment and casing be removed to a depth at least 5 feet below the mudline datum, on its own motion, the Alaska Oil and Gas Conservation Commission (AOGCC) is setting a hearing to consider Furie's request. The public hearing is set on December 23, 2020, at 10:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. Due to health mandates issued as a result of the COVID-19 virus, it may be necessary to conduct the hearing telephonically. All who desire 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. 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 or by email to jody.colombie@alaska.gov. Comments must be received no later than the conclusion of the December 23, 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 December 20, 2020. Digitally signed by Jessie L. Jessie L. Chmielowski Chmielowski Date: 0' 2020.11.1912:13:42 09'0 Jessie L. Chmielowski Commissioner STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENT. ADVERTISING ORDER NUMBER AO-08-21-013 FROM: Alaska Oil and Gas Conservation Conunission AGENCY CONTACT: Jody Cololnbie/Samantha Carlisle DATE OF A.O. 11/19/2020 AGENCY PHONE: 1(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: I LEGAL DISPLAY CLASSIFIED ( OTHER (Specify belov4 DESCRIPTION PRICE OTH-20-056 Initials of who prepared AO: Alaska Non -Taxable 92-600185 SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDA VIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENTTO: AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 Page 1 of ]All Total of Pages $ REF Type Number Amount Date Comments I PVN VCO21795 2 Ao AO-08-21-013 3 4 FIN AMOUNT SY Act. Template PGM LGR Object FY DIST LIQ 1 21 AOGCC 3046 21 2 3 4 5 Purchasing Authority Name: Title: Purchasing Authority's Signature Telephone Number 1. A.O. # and receiving agency name must appear on all invoices and documents relating to this purchase. 2. 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 not for resale. DISTRIBUTION: Division Fiscal/Original AO Copies: Publisher (faxed), Division Fiscal, Receiving Form: 02-901 Revised: 11 /19/2020 Bernie Karl d Gordon Severson Richard Wagner K&K Recycling Inc. 3201 Westmar Cir. P.O. Box 60868 P.O. Box Anchorage, AK 99508-4336 Fairbanks, AK 99706 Fairbanks, AK 99711 George Vaught, Jr. Darwin Waldsmith P.O. Box 13557 P.O. Box 39309 Denver, CO 80201-3557 Ninilchik, AK 99639 Carlisle, Samantha J (CED) From: Colombie, Jody J (CED) Sent: Tuesday, November 24, 2020 8:20 AM To: Carlisle, Samantha J (CED) Subject: FW: Public Notice Attachments: OTH-20-056_NOTICE_Public_Hearing .pdf Print for furie file From: Colombie, Jody J (CED) Sent: Thursday, November 19, 2020 12:27 PM To: John Hendrix <j.hendrix@furiealaska.com>; Mary Ann Pease <maryann.pease.map@gmail.com> Subject: Public Notice Carlisle, Samantha J (CED) From: Colombie, Jody J (CED) Sent: Tuesday, November 24, 2020 8:19 AM To: Carlisle, Samantha J (CED) Subject: FW: Public Notice Attachments: OTH-20-056_NOTICE_Public_Hearing .pdf Print for Furie docket From: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Sent: Thursday, November 19, 2020 2:26 PM To: Vinnie Catalano <catalano@circac.org> Cc: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Subject: Public Notice Vinnie, I wasn't sure if you were on our mailing list and I wanted to make sure I notified you of the above notice. Jody Colombie Carlisle, Samantha J (CED) From: Colombie, Jody J (CED) Sent: Tuesday, November 24, 2020 8:22 AM To: Carlisle, Samantha J (CED) Subject: FW: KLU 1 Print for furie docket From: Colombie, Jody J (CED) Sent: Monday, November 23, 2020 5:16 PM To: Bob Shavelson <bob@inletkeeper.org> Subject: RE: KLU 1 Great thank you! Jody From: Bob Shavelson <bob@inletkeeper.org> Sent: Monday, November 23, 2020 4:46 PM To: Colombie, Jody J (CED) <]ody.colombie@alaska.gov> Subject: Re: KLU 1 Thank you Jody. I rec'd all three emails. Cook Inletkeeper 3734 Ben Walters Lane Homer, AK 99603 cell: 907.299.3277 fax 907.235.4069 bob@inletkeeper.ore www.inletkeeper.org Love Cook Inlet? Make an extra gift to Cook Inletkeeper when you PICK.CLICK.GIVE. Or donate online. Together we can protect Alaska's Cook Inlet watershed. On Mon, Nov 23, 2020 at 4:09 PM Colombie, Jody J (CED) <jody.colombie@alaska.gov> wrote: 1 Carlisle, Samantha J (CED) From: Colombie, Jody J (CED) Sent: Tuesday, November 24, 2020 8:23 AM To: Carlisle, Samantha J (CED) Subject: FW: thank you! Print for furie file From: Colombie, Jody J (CED) Sent: Monday, November 23, 2020 4:15 PM To: 'Kristen Nelson' <knelson@petroleum news.com> Subject: RE: thank you! Shocking!!! I am so glad. Have a nice Thanksgiving! From: Kristen Nelson <knelson@petroleumnews.com> Sent: Monday, November 23, 2020 4:12 PM To: Colombie, Jody J (CED) <jody.colombie@alaska.ov> Subject: thank you! Jody, thank you very much —all 3 came through ... Kristen Kristen Nelson, editor Petroleum News 907-245-5553 Carlisle, Samantha J (CED) From: Colombie, Jody J (CED) Sent: Tuesday, November 24, 2020 8:24 AM To: Carlisle, Samantha J (CED) Subject: FW: AOGCC Public Notice Attachments: OTH-20-056_NOTICE_Public_Hearing .pdf Print for furie file From: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Sent: Friday, November 20, 2020 3:45 PM To: d17-dg-publicaffairs@uscg.mil Cc: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Subject: AOGCC Public Notice I am sending you the attached Notice of Public Hearing since these wells are located offshore. If you have any questions, please call me at 907-748-7473. Jody Colombie Special Assistant AOGCC Carlisle, Samantha J (CED) From: Colombie, Jody J (CED) Sent: Tuesday, November 24, 2020 8:25 AM To: Carlisle, Samantha J (CED) Subject: FW: Public Notice Print for furie From: Baker, Rachel S (DFG) <rachel.baker@alaska.gov> Sent: Thursday, November 19, 2020 3:38 PM To: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Subject: RE: Public Notice Sure, we'll make sure it gets distributed to relevant staff. From: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Sent: Thursday, November 19, 2020 15:04 To: Baker, Rachel S (DFG) <rachel.baker@alaska.gov> Subject: RE: Public Notice I wanted to cover all my bases since we have not received a request like this before. Jody From: Baker, Rachel S (DFG) <rachel.baker@alaska.gov> Sent: Thursday, November 19, 2020 3:02 PM To: Colombie, Jody J (CED) <]ody.colombie@alaska.gov> Subject: RE: Public Notice Ok, thank you. From: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Sent: Thursday, November 19, 2020 15:01 To: Baker, Rachel S (DFG) <rachel.baker@alaska.gov> Subject: RE: Public Notice No it was meant for you. I felt DFG needed the notification and I couldn't find any of your employees on our emailing list because everyone's emails are the same by name not department. Jody Colombie From: Baker, Rachel S (DFG) <rachel.baker@alaska.gov> Sent: Thursday, November 19, 2020 2:54 PM To: Colombie, Jody J (CED) <]ody.colombie@alaska.gov> Subject: RE: Public Notice Thank you, Jody. I wonder if this was meant to go to a different Rachel? From: Colombie, Jody J (CED) <]ody.colombie@alaska.gov> Sent: Thursday, November 19, 2020 14:20 To: Baker, Rachel S (DFG) <rachel.baker@alaska.gov>; Mike Munger (munger@rcac.org) <munger@rcac.or>; Pokon, Emma K (DEC) <emma.pokon@alaska.gov> Cc: Colombie, Jody 1 (CED) <jody.colombie@alaska.gov> Subject: Public Notice I am sending each of you the attached notice for notification of this hearing as a possible interested party. If you are not the correct person to receive it, please forward it that individual within your organization. If you have any questions, please call me at 907-793-1221. Jody Colombie Special Assistant Alaska Oil and Gas Conservation Commission Confidential, held in secure storage THE STATE GOVERNOR BILL WALKER January 8, 2018 1'.iIT9aNUM 1is" Senior Vice President Furie Operating Alaska, Inc. 188 W. Northern Lights Blvd., Ste. 620 Anchorage, AK 99503-8934 Dear Mr. Webb: . Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907,276.7542 www.00gcc.olaska.gov The Alaska Oil and Gas Conservation Commission (AOGCC) is undertaking a review of the adequacy of every operator's current bond to secure the anticipated cost to the AOGCC of plugging and abandoning the wells if the operator defaults on its obligation to do so. The review is undertaken operator by operator due to the significant disparity in well counts, locations, and types of construction. In furtherance of this review, by March 8, 2018 Furie Operating Alaska, Inc. (Furie) is requested to submit to AOGCC an estimate of the cost to properly plug and abandon its wells, the methodology by which Furie reached its estimate, evidence in support of its estimate, and the means by which Furie will assure that funds to cover the estimated cost to plug and abandon the wells will be secured for the sole benefit of AOGCC. Sincerely, Hollis S. French Chair, Commissioner