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HomeMy WebLinkAboutCO 687E Image Project Order File Cover Page XHVZE This page identifies those items that were not scanned during the initial production scanning phase.. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. Ca Order File Identifier Organizing (done) RESCAN ❑ Color Items: ❑ Greyscale Items: ❑ Poor Quality Originals: ❑ Other: NOTES: BY: Angela Project Proofing ,ced iiiuiuuuiuiui DIGITAL DATA ❑ Diskettes, No. ❑ Other, No/Type: 4 Date: lkr3 12 t. k"_ OVERSIZED (Scannable) ❑ Maps: ❑ Other Items Scannable by a Large Scanner OVERSIZED (Non -Scannable) ❑ Logs of various kinds: ❑ Other:: hcbu 1111111111111111111 BY: Angela ✓ Date: LQ 3 ( 2.s, l-k' /s/ C.A<— Scanning Preparation BY: Angela Production Scanning x30= + Date: = TOTAL PAGES (Count does not include cover sheet) /s/ 1111111111111111111 Stage 1 Page Count from Scanned File: S Z¢ (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: ✓ YES _ BY: Angela ✓ Date: `kI3 ( 2.a, \-(, Stage 1 If NO in stage 1, page(s) discrepancies were found: YES BY: Angela Date: Scanning is complete at this point unless rescanning is required. NO /s/ C&<^ NO "iuuiuuniuAi ReScanned IIIIIIIIIIIIII IIIII BY: Angela Date: /s/ Comments about this file: Quality Checked 1111111111111111111 INDEX CONSERVATION ORDER NO. 687 Nicolai Creek Field Nicolai Creek Beluga Undefined Gas Pool Nicolai Creek Upper Tyonek Undefined Gas Pool Kenai Peninsula Borough, Alaska 1. December 2, 2013 Aurora Gas, LLC's application for field -wide well spacing and commingling exceptions regarding Nicolai Creek Unit 2. December 19, 2013 Notice of Public Hearing, Affidavit of Publication, email distribution, mailings INDEX CONSERVATION ORDER NO. 687 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue, Suite 100 Anchorage Alaska 99501 Re: THE APPLICATION OF Aurora Gas, ) Docket Number: CO- 13-27 LLC for exceptions to the spacing ) Conservation Order No. 687 requirements of 20 AAC 25.055(a)(2) and (4) ) Nicolai Creek Field exception to the commingling restrictions of 20 ) Nicolai Creek Beluga Undefined AAC 25.215(b) in the Nicolai Creek Field. ) Gas Pool Nicolai Creek Upper Tyonek Undefined Gas Pool Kenai Peninsula Borough, Alaska March 20, 2014 IT APPEARING THAT: 1. By letter received December 4, 2013, Aurora Gas, LLC (Aurora) requested an exception to the drilling units and wells spacing requirements of 20 AAC 25.055(a)(2) and (4) to allow the drilling, perforating, completing, testing and production of gas development wells within 3,000 feet of other existing gas wells, within the same section, and within 1,500 feet from a property line where the owner or landowner is not the same on both sides of the line. Aurora seeks the exception for the undefined Beluga and Upper Tyonek Gas Pools. In addition, Aurora requested an exception to the commingling restrictions of 20 AAC 25.215(b) to allow commingling of production within the same wellbore from the undefined Beluga and Upper Tyonek Gas Pools. 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) tentatively scheduled a public hearing on Aurora's requests for January 23, 2014. On December 19, 2013, the AOGCC published notice of the opportunity for that hearing on the State of Alaska's Online Public Notice website and on the AOGCC's website, electronically transmitted the notice to all persons on the AOGCC's email distribution list, and mailed printed copies of the notice to all persons on the AOGCC's distribution list. On December 20, 2013, the notice was published in the ANCHORAGE DAILY NEWS. 3. Pursuant to 20 AAC 25.055(d)(1), Aurora sent, by certified mail, notice of the spacing exception application to all owners, landowners, and operators of all properties within 3,000 feet of the proposed Nicolai Creek Field affected area. Aurora provided the AOGCC a copy of the notice, date of mailing, addresses to which the notice was sent, and copies of the certified mail return receipts. 4. No protest to the applications or request for hearing was received. 5. Because Aurora provided sufficient information upon which to make an informed decision, the requests can be resolved without a hearing. 6. The tentatively scheduled public hearing was vacated on January 22, 2014. Conservation Order 687 • • March 20, 2014 Page 2 of 6 FINDINGS: 1. Requests: The requests for exceptions to 20 AAC 25.055(a)(2) and (4) and 20 AAC 25.215(b) apply to the shallow gas and potential gas sands of the Beluga Formation (Beluga) and the upper portion of the Tyonek Formation (Upper Tyonek) of the proposed Nicolai Creek Field affected area, located in Sections 17 (partial), 18 (partial), 19 (partial), 20, 29, 30, 31, and 32 of Township 11 North, Range 12 West, Seward Meridian. 2. Operator: Aurora is the owner and operator of the Nicolai Creek Unit (NCU) and is the operator of the surrounding oil and gas leases proposed to be included in the Nicolai Creek Field affected area at this depth interval. The area of interest is located on the western side of the Cook Inlet Basin, Kenai Peninsula Borough, Alaska. 3. Subsurface Estate Landowners: The State of Alaska, Department of Natural Resources, Division of Oil and Gas (DNR) is the subsurface estate owner of the leases that make up the proposed Nicolai Creek Field affected area. 4. Surface Estate Landowners: Surface estate landowners in the proposed Nicolai Creek Field affected area and within 3,000 feet of the proposed affected area are the State of Alaska, Department of Natural Resources, Division of Oil and Gas (DNR), Mental Health Trust, and Cook Inlet Region Incorporated. 5. Owners and Operators: Other owners and operators within 3,000 feet of the proposed Nicolai Creek Field affected area are Apache Alaska Corporation (Apache), Buccaneer Alaska, LLC, ConocoPhillips Alaska, Inc. (ConocoPhillips), and Hilcorp Alaska, L.L.C. (Hilcorp). 6. Leases: The State of Alaska leases that make up the proposed Nicolai Creek Field affected area are vertically segregated by depth with different owners (lessees). With the exception of ConocoPhillips' 25 percent working interest in lease ADL 17585, Segment 4, Aurora owns 100 percent of the working interest in the shallow gas rights of the Beluga and Upper Tyonek. Apache and Hilcorp are holders of the deep rights in the DNR leases that underlie the proposed Nicolai Creek Field affected area. The five leases that comprise the proposed Nicolai Creek Field affected area are held by production. 7. Conservation Orders: There are currently three Conservation Orders (CO) regarding spacing exceptions within the Nicolai Creek area: CO 478, C0623, and C0635A, for NCU Nos. 1, 2, and 9; for NCU No. 11, and for NCU No. 10, respectively. 8. Exploration and Production History: Nicolai Creek Field was discovered in 1966. Sustained production from the field commenced in April 1969. Currently, there are six producing gas wells within the Nicolai Creek Field. The wells produce or have produced gas from the Tsuga 2-5 interval of the Beluga to the Carya 2-6 interval of the Upper Tyonek. Nicolai Creek Field produces from stratigraphically discontinuous sandstones of the Beluga and Upper Tyonek. Material balance analysis indicates that the wells drain Conservation Order 687 • March 20, 2014 Page 3 of 6 limited areas ranging from 25 to 155 acres, far smaller than the statewide drilling unit of a governmental section for a gas pool specified under 20 AAC 25.055(a)(4). 9. The AOGCC received no comments, objections or protests in response to the public notice regarding the proposed exception to the spacing requirements of 20 AAC 25.055 and the request for an exception to the commingling restrictions of 20 AAC 25.215(b). 10. The AOGCC received no comments, objections or protests in response to the notice of the spacing exception application sent via certified mail to all owners, landowners, and operators of all properties within 3,000 feet of the proposed Nicolai Creek Field affected area. 11. Beluga and Upper Tyonek have similar pressure gradients, ranging from 0.45 psi/ft to 0.52 psi/ft. CONCLUSIONS: 1. Aurora requests approval for an exception to the spacing requirements of 20 AAC 25.055(a)(2) and (4) and an exception to commingling restrictions of 20 AAC 25.215(b) for the Nicolai Creek Field affected area, as proposed, covering approximately 2,580.30 acres of lands, both outside and within the Nicolai Creek Unit. Under AS 31.05.170(5), "Field" means a general area which is underlain or appears to be underlain by at least one pool, and includes the underground reservoir containing oil or gas; and the words "pool" and "field" mean the same thing when only one underground reservoir is involved, but "field" unlike "pool" may relate to two or more pools. In considering the definition of "Field", subsurface control is inadequate to justify inclusion of all lands, as proposed by Aurora, into the Nicolai Creek Field affected area. 2. Nicolai Creek Field is a mature gas production development. An exception to the well spacing provisions of 20 AAC 25.055(a)(2) and (4) is necessary to allow more expeditious drilling and production of new wells on closer spacing to facilitate development of the limited -area reservoirs and to optimize resource recovery within the field. Revising well spacing provisions for these undefined Beluga and Upper Tyonek Gas Pools will not promote waste, jeopardize correlative rights, or result in an increased risk of fluid movement into freshwater. Revising well spacing provisions for these undefined Beluga and Upper Tyonek Gas Pools will not promote waste or jeopardize correlative rights to potential oil and gas pools within the Lower Tyonek or deeper formations. 3. Correlative rights of owners and landowners of offset acreage that lie outside of the Nicolai Creek Field, as defined by Township Range, Section and Meridian, will be protected by a 1,500-foot property line set -back requirement that conforms with regulations 20 AAC 25.055(a)(2) for a well drilling to or being recompleted in the undefined Beluga or Upper Tyonek Gas Pools. 4. Commingling of production from the Beluga and Upper Tyonek reservoirs when bottomhole pressures are similar in the two formations, will extend the economic life of the well by increasing production rate and thereby should increase the economically recoverable reserves from the well and by extension the field. Conservation Order 687 March 20, 2014 Page 4 of 6 Using a ratio of calculated reserves between the Beluga and Upper Tyonek reservoirs in the individual wells will provide an acceptable method of allocating production between the two formations. NOW THEREFORE IT IS ORDERED: The AOGCC approves Aurora's December 4, 2013 application for: An order granting an exception to the drilling units and wells spacing requirements of 20 AAC 25.055 to allow the drilling, perforating, completing, testing and production of gas development wells for the undefined Beluga and Upper Tyonek Gas Pools within the below described Nicolai Creek Field with no restrictions as to well spacing, except that no gas well shall be completed less than 1,500 feet from an external property line of the Field, as defined by Township, Range, Section and Meridian, where the owners and landowners are not the same on both sides of the line. Affected Area - Nicolai Creek Field Lease ADL 17585, Segment 1 (portion thereof) T11N, R12W, S.M., Section 29: S1/2NW1/4SW1/4 and N1/2SW1/4SW1/4, excluding Uplands; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 6,620 feet, as seen on the original resistivity log for the NCU No. 4 well (API No. 50-283-20033-00-00), containing approximately 37.584 acres. Lease ADL 17598, Segments 1 and 2 (portion thereof) T11N, R12W, S.M., Section 30: All tide and submerged lands, within N1/2SE1/4, lying south of the mean high tide line in Cook Inlet; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 4,558 feet, as seen on the original resistivity log for the Astoch Unit No. 1 well (API No. 50-133-20426-00-00), containing approximately 32.0 acres. Lease ADL 63279, Segment 2 T11N, R12W, S.M., Section 20: Fractional, W1/2; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 5,053 feet, as seen on the original resistivity log for the Nicolai Creek Unit No. 3 well (50-283-20003-00-00), containing 320.00 acres, more or less. Conservation Order 687 March 20, 2014 Page 5 of 6 Lease ADL 391471, Segment 1 T11N, R12W, S.M., Section 29: SW1/4SW1/4NW1/4 (10.00 acres) and NW1/4SW1/4 (22.416 acres), landward of the mean high tide line of Cook Inlet, having 32.416 acres; Section 30: El/2NE1/4SE1/4, landward of the mean high tide line of Cook Inlet, having 12.097 acres; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 4,911 feet, as seen on the original resistivity log for the NCU No. 5 well (API No. 50-283-20036-00-00), containing 44.513 acres, more or less. ADL 391472, Segment 2 T11N, R12W, S.M., Section 30: Wl/2NE1/4SE1/4, NW1/4SE1//4, landward of the shoreline along the mean high tide of the Cook Inlet; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 4,911 feet, as seen on the original resistivity log for the NCU No. 5 well (API No. 50-283-20036-00-00), containing 35.90 acres, more or less. 2. In accordance with 20 AAC 25.215(b)(2) the downhole commingling of production between the Beluga and Upper Tyonek reservoirs in a given well the operator must provide to the AOGCC an allocation formula based upon the estimated reserves for that well and shall report production for that well in accordance with the allocation formula. Aurora may proceed as long as it complies with the terms of all lease agreements, applicable Alaska laws, and all other legal requirements. DONE at Anchorage, Alaska and dated March 20, 2014. Cathy P. Foerster Dan Seamount' Chair, Commissioner Commissioner Conservation Order 687 0 • March 20, 2014 Page 6 of 6 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 reconsideration 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 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. Singh, Angela K (DOA) From: Carlisle, Samantha J (DOA) Sent Thursday, March 20, 201412:55 PM To: Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Crisp, John H (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Ferguson, Victoria L (DOA); Foerster, Catherine P (DOA); Frystacky, Michal (DOA); Grimaldi, Louis R (DOA); Guhl, Meredith D (DOA); Hill, Johnnie W (DOA); Hunt, Jennifer L (DOA); Johnson, Elaine M (DOA); Jones, Jeffery B (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Turkington, Jeff A (DOA); Wallace, Chris D (DOA); (michael j.nelson@conocophillips.com); AKDCWeIIIntegrityCoordinator, Alexander Bridge; Andrew Vandedack; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Barron, William C (DNR); Bill Penrose; Bill Walker, Bob Shavelson; Brian Havelock; Burdick, John D (DNR); Cliff Posey, Colleen Miller, Crandall, Krissell; D Lawrence; Daryl J. Kleppin; Dave Harbour, Dave Matthews; David Boelens; David Duffy, David Goade; David House; David McCaleb; David Scott; David Steingreaber; David Tetta; Davide Simeone; ddonkel@cfl.rr.com; Donna Ambruz; Dowdy, Alicia G (DNR); Dudley Platt, Elowe, Kristin; Evans, John R (LDZX); Francis S. Sommer, Frank Molli; schultz, gary (DNR sponsored); ghammons; Gordon Pospisil; Gorney, David L.; Greg Duggin; Gregg Nady, gspfoff; Jacki Rose; Jdarlington oarlington@gmail.com); Jeanne McPherren; Jerry McCutcheon; Jim White; Jim Winegarner, Joe Lastufka; news@radiokenai.com; Easton, John R (DNR); John Garing; Jon Goltz; Jones, Jeffrey L (GOV); Juanita Lovett, Judy Stanek; Houle, Julie (DNR); Julie Little; Kari Moriarty; Keith Wiles; Kelly Sperback; Klippmann; Gregersen, Laura S (DNR); Leslie Smith; Lisa Parker, Louisiana Cutler, Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark P. Worcester, Mark Wedman; Kremer, Marguerite C (DNR); Michael Jacobs; Mike Bill; mike@kbbi.org; Mikel Schultz; Mindy Lewis, MJ Loveland; mjnelson; mkm7200; knelson@petroleumnews.com; Nick W. Glover, Nikki Martin; NSK Problem Well Supv; Oliver Sternicki; Patty Alfaro; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; Randy Redmond; Rena Delbridge; Renan Yanish; Robert Brelsford; Ryan Tunseth; Sandra Haggard; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky, Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer; Steve Kiorpes; Moothart, Steve R (DNR); Steven R. Rossberg; Suzanne Gibson; sheffield@aoga.org; Tania Ramos; Ted Kramer, Davidson, Temple (DNR); Terence Dalton; Teresa Imm; Thor Cutler, Tim Mayers; Tina Grovier, Todd Durkee; Tony Hopfinger, trmjrl; Tyler Senden; Vicki Irwin; Vinnie Catalano; Walter Featherly; yjrosen@ak.net, Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andrew Cater, Anne Hillman; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; David Lenig; Perrin, Don J (DNR); Donna Vukich; Eric Lidji; Erik Opstad; Gary Orr; Smith, Graham O (PCO); Greg Mattson; Hans Schlegel; Heusser, Heather A (DNR); Holly Pearen; James Rodgers; Jason Bergerson; Jennifer Starck; jilt.a.mcleod@conocophillips.com; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Kenneth Luckey, King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Matt Gill; Franger, James M (DNR); Morgan, Kirk A (DNR); Pat Galvin; Peter Contreras; Pollet, Jolie; Richard Garrard; Richard Nehring; Robert Province, Ryan Daniel; Sandra Lemke; Pexton, Scott R (DNR); Peterson, Shaun (DNR); Pollard, Susan R (LAW); Talib Syed; Terence Dalton; Todd, Richard J (LAW); Tostevin, Breck C (LAW); Wayne Wooster, Woolf, Wendy C (DNR); William Hutto; William Van Dyke Subject: Ctervation Order 687 (Nicolai Creek Field) • Attachments: co687.pdf r: J. Edward Jones President Aurora Gas, LLC 1400 W. Benson Blvd., Ste. 410 Anchorage, AK 99503 Em- 0 Penny Vadla George Vaught, Jr. 399 W. Riverview Ave. Post Office Box 13557 Soldotna, AK 99669-7714 Denver, CO 80201-3557 Bernie Karl CIRI K&K Recycling Inc. Land Department Post Office Box 58055 Post Office Box 93330 Fairbanks, AK 99711 Anchorage, AK 99503 Richard Wagner Gordon Severson Post Office Box 60868 3201 Westmar Cir. Fairbanks, AK 99706 Anchorage, AK 99508-4336 Darwin Waldsmith James Gibbs Post Office Box 39309 Post Office Box 1597 Ninilchik, AK 99639 Soldotna, AK 99669 Jerry Hodgden Hodgden Oil Company 40818' St. Golden, CO 80401-2433 North Slope Borough Planning Department Post Office Box 69 Barrow, AK 99723 Jack Hakkila Post Office Box 190083 Anchorage, AK 99519 #2 STATE OF ALASKA 10 NOTICE TO PUBLISHER • ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED A O_119 AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF A ORDER ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE F AOGCC R 333 W 7th Ave, Ste 100 D Anchorage, AK 99501 M o Anchorage Daily News PO Box 149001 Anchorage, AK 99514 CONTACT DATE OF A.O. December 19, 2013 -1Z- DATES ADVERTISEMENT REQUIRED: ASAP THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Type of Advertisement Legal® ❑ Display Classified ❑Other (Specify) SEE ATTACHED AOGCC, 333 W. 7th Ave., Suite 100 _ a Anchorage, AK 99501 PAGE 1 OF z PAGES COMMENTS TOTAL OF ALL PAGES REF TYPE NUMBER AMOUNT DATE 1 VEN 2 ARC 02910 FIN AMOUNT SY CC PGM LC ACCT FY NMR DIST LIO 1 13 02140100 73451 2 REQUISITIONED DIVISION APPROVAL: 02-902 (Rev. 3/94) Publisher/Original Copies: Department Fiscal, Department, Receiving AO.FRM Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket No. CO-13.27. The application of Aurora Gas, LLC (Aurora) for exceptions to the spacing requirements of 20 AAC 25.055 and commingling requirements of 20 AAC 25.215(b). Aurora by letter received December 4, 2013, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirements of 20 AAC 25.055 to allow the drilling, perforating, completing, testing and production of gas development wells for all undefined gas pools within the Nicolai Creek Field with no restrictions as to well spacing, and within 1,500 feet from a section line; and an exception to the commingling restrictions of 20 AAC 25.215(b) to allow commingling of production within the same wellbore from the Beluga and Upper Tyonek formations. The AOGCC has tentatively scheduled a public hearing on this application for January 23, 2014 at 9:00 a.m. at the Alaska Oil and Gas Conservation Commission, at 333 West 7t' Avenue, Suite 100, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be fled with the AOGCC no later than 4:30 p.m. on January 7, 2014. If a request for a hearing is not timely fled, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call 793-1221 after January 13, 2014. In addition, written comments regarding this application may be submitted to the Alaska Oil and Gas Conservation Commission, at 333 West 7"' Avenue, Suite 100, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on January 21, 2014, except that, if a hearing is held, comments must be received no later than the conclusion of the January 23, 2014 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 793-1221, no later than January 21, 2014. Cathy P Foerster Chair, Commissioner 270227 0000830756 , RECEIVED $ 184.26 JAN 0 2 2014 AFFIDAVIT OF PUBLICATION AQGCC STATE OF ALASKA THIRD JUDICIAL DISTRICT Joleesa Stepetin being first duly sworn on oath deposes and says that he is a representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on December 20, 2013 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed ' Subscribed and sworn to before me this 20th day of December, 2013 r Notary Public in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES BRi Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket No. CO-13.27. The application of Aurora Gas, LLC (Aurora)for exceptions to the spacing requirements of 20 AAC 25.055 and comminggling requirements of 20 AAC 25.215(b). Aurora by letter received December 013Conservation uests e Alaska GasC Commission (AOGCC) issue an order for an exception to the spacing requirements of 20 AAC 25.055 to allow the drilling, perforating, completing, testing and production of gas development wells for all undefined gas pools within the Nicolai Creek Field with no restrictions as to well spacing, and nethin e; and 0 an eet from a xception section excep on to the commingling restrictions of 20 AAC Of production o allow within orrthengl�same wellbore from the Beluga and Upper I Tyonek formations. The AOGCC has tentatively scheduled a public hearing on this application for January 23, 2014at 9:00 a.m. at the Alaska Oil and Gas Conservation Commission, at 333 West 7th Avenue, Suite Alaska 9 501 10To Anchorage, request that the tentatively scheduled hearing be held, a written reqbe fied wit he AOGCCunotlatersthan 4I30 p mh on January 7, 2014. If a request for a hearing is not the AOGCC may cimel onsiderfitheled ' issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call I 793-1221 after January 13,2014. In addition, written comments regarding this application may be submitted to the Alaska Oil and Gas i 333 West 7th Conservation Avenue, Suite Commissiont 100, Anchorage, Alaska 99501. later than 4 30nts t P.M. be received January uary 21,2014, except that, if a hearing is held, comments must be received no later than the conclusion of the January 23, 2014 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant,221, nlatter than bJanuary721, 2014. Cathy P. Foerster Chair, Commissioner AO-14-019 Published: December 20, 2013 A a STATE OF ALASKA NOTICE TO PUBLISHER ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED /t,O_14019 A AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED COPY OF ORDER ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE Ti�31w'I�t�flViT6 [zE,�� F AOGCC AGENCY CONTACT DATE OF A.O. R 333 West 7t' Avenue. Suite 100 Jod-v Colornbie December 19.201 D Anchorage. AK 99501 PHONE PCN M -1221 DATES ADVERTISEMENT REQUIRED: o Anchorage Daily News ASAP PO Box 149001 Anchorage, AK 99514 THE MATERIAL BETWEEN THE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWNUBLE SPECIAL INSTRUCTIONS: United states of America State of Account # STOF0330 AFFIDAVIT OF PUBLICATION REMINDER ss INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. division. A CERTIFIED COPY OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. Before me, the undersigned, a notary public this day personally appeared ATTACH PROOF OF PUBLICATION HER who, being first duly sworn, according to law, says that he/she is the of Published at in said division and state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2012, and thereafter for consecutive days, the last publication appearing on the day of , 2012, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This _ day of 2012, Notary public for state of My commission expires _ Singh, Angela K (DOA) From: Carlisle, Samantha J (DOA) Sent: Thursday, December 19, 2013 2:31 PM To: Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Crisp, John H (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Ferguson, Victoria L (DOA); Foerster, Catherine P (DOA); Frystacky, Michal (DOA); Grimaldi, Louis R (DOA); Hunt, Jennifer L (DOA); Johnson, Elaine M (DOA); Jones, Jeffery B (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Norman, John K (DOA); Paladijczuk, Tracie L (DOA); Pasqua[, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Turkington, Jeff A (DOA); Wallace, Chris D (DOA); (michael j.nelson@conocophillips.com); AKDCWellIntegrityCoordinator; Alexander Bridge; Andrew Vanderlack; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Barron, William C (DNR); Bill Penrose; Bill Walker, Brian Havelock, Burdick, John D (DNR); Cliff Posey, Colleen Miller, Crandall, Krissell; D Lawrence; Daryl J. Kleppin; Dave Harbour, Dave Matthews; David Boelens; David Duffy, David Goade; David House; David Scott; David Steingreaber; Davide Simeone; ddonkel@cfl.rr.com; Donna Ambruz; Dowdy, Alicia G (DNR); Dudley Platt, Elowe, Kristin; Evans, John R (LDZX); Francis S. Sommer, Frank Molli; Schultz, gary (DNR sponsored); ghammons; Gordon Pospisil; Gorney, David L.; Greg Duggin; Gregg Nady; gspfoff, Jacki Rose; Jdarlington Oar[ington@gmai[.com); Jeanne McPherren; Jerry McCutcheon; Jim White; Jim Winegarner; Joe Lastufka; news@radiokenai.com; Easton, John R (DNR); John Garing; Jon Goltz; Jones, Jeffrey L (GOV); Juanita Lovett; Judy Stanek; Houle, Julie (DNR); Julie Little; Kari Moriarty, Keith Wiles; Kelly Sperback; Klippmann; Gregersen, Laura S (DNR); Leslie Smith; Lisa Parker, Louisiana Cutler, Luke Keller, Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark P. Worcester Kremer, Marguerite C (DNR); Michael Jacobs; Mike Bill; mike@kbbi.org; Mikel Schultz; Mindy Lewis, MJ Loveland; mjnelson; mkm7200; knelson@petroleumnews.com; Nick W. Glover, Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillem; Randy Redmond; Rena Delbridge; Renan Yanish; Robert Brelsford; Ryan Tunseth; Sandra Haggard; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky, Shellenbaum, Diane P (DNR); Slemons, tonne D (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer, Steve Kiorpes; Moothart, Steve R (DNR); Steven R. Rossberg; Suzanne Gibson; sheffield@aoga.org; Tania Ramos; Ted Kramer, Davidson, Temple (DNR); Terence Dalton; Teresa Imm; Thor Cutler, Tim Mayers; Tina Grovier; Todd Durkee; Tony Hopfinger, trmjrl; Vicki Irwin; Vinnie Catalano; Walter Featherly; yjrosen@ak.net, Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andrew Cater, Anne Hillman; Bruce Williams, Bruno, Jeff J (DNR); Casey Sullivan; David Lenig; Perrin, Don J (DNR); Donna Vukich; Eric Lidji; Erik Opstad; Gary Orr, Smith, Graham 0 (PCO); Greg Mattson; Hans Schlegel; Heusser, Heather A (DNR); Holly Pearen; James Rodgers; Jason Bergerson; Jennifer Starck; jilt.a.mcleod@conocophillips.com; Jim Magill; Joe Longo; Josh Kindred; King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck, Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Matt Gill; Franger, James M (DNR); Morgan, Kirk A (DNR); Pat Galvin; Bettis, Patricia K (DOA); Peter Contreras, Pollet, Julie; Richard Garrard; Ryan Daniel; Sandra Lemke; Pexton, Scott R (DNR); Peterson, Shaun (DNR); Pollard, Susan R (LAW); Talib Syed; Terence Dalton; Todd, Richard J (LAW); Tostevin, Breck C (LAW); Wayne Wooster, Woolf, Wendy C (DNR); William Hutto; William Van Dyke Subject: Notice of Public Hearing CO-13-27 Nicolai Creek Attachments: A of Public Hearing CO-13-27.pdf 0 Samantha. Cartiste executive Secretary II Ata_rka Ott-an,d (ias Conservation Conimission 333 West `;r �`�venue, Suite wo Inchorage, - h 99501 (907) 793-1223 (phone) (9 07 ,) 2 -6-754 2 Ox) Easy Peer Labels i ♦ Bend along line to i W ® ®i Use Avery® Template 516010 j_ Feed Paper expose Pop-up EdgeT"A 1 AWRY 5160 iAID Ittiquettes faciles a peter Utilisez Is gabarit AVERY® 5160® J. Edward Jones President Aurora Gas, LLC 1400 W. Benson Blvd., Ste. 410 Anchorage, AK 99503 1 Se j de Repliez a la hachure afin de ,Marnomcnt reveler Is rebord Pop-upTm 1 www.avery.com ; 1-800-GO-AVERY 1 • David McCaleb Penny Vadla IHS Energy Group George Vaught, Jr. 399 W. Riverview Ave. GEPS Post Office Box 13557 Soldotna, AK 99669-7714 5333 Westheimer, Ste. 100 Denver, CO 80201-3557 Houston, TX 77056 Jerry Hodgden Richard Neahring Mark Wedman Hodgden Oil Company NRG Associates Halliburton m President 40818 St. Post Office Box 1655 6900 Arctic Blvd. Golden, CO 80401-2433 Anchorage, AK 99502 Colorado Springs, CO 80901 Bernie Karl CIRI Tools K&K Recycling Inc. Land Department Baker 94't. C Post Office Box 58055 Post Office Box 93330 795 E. 4 t. Fairbanks, AK 99711 Anchorage, AK 99503 Anchorage, AK 99515 4295 North Slope Borough Richard Wagner Gordon Severson Planning Department Post Office Box 60868 3201 Westmar Cir. Post Office Box 69 Barrow, AK 99723 Fairbanks, AK 99706 Anchorage, AK 99508-4336 Jack Hakkila Darwin Waldsmith James Gibbs Post Office Box 190083 Post Office Box 39309 Post Office Box 1597 Anchorage, AK 99519 Ninilchik, AK 99639 Soldotna, AK 99669 �� 'Z' k3 #1 �4urora Gas, L C Ms. Cathy Foerster, Chairman December 2, 2013 State of Alaska Oil and Gas Conservation Commission 333 W. 7`h Avenue, Suite 100 Anchorage, AK 99501 R ET Re: Application for Field -Wide Well Spacing and Commingling Exceptions Nicolai Creek Unit " Dear Ms. Foerster: AW Pursuant to 20 AAC 25.055 (d) and 20 AAC 25.215 (b), Aurora Gas, LLC (Aurora) hereby requests approval for the following two exceptions within the onshore Nicolai Creek Gas Field (and directional offshore from onshore surface to shallow Beluga and Upper Tyonek targets, usually above 5000' TVD): 1) to allow the drilling, perforating, completing, testing and production of wells within 3,000 feet of other existing gas wells in the Nicolai Creek Unit, within the same section, and within 1,500 feet from a section line (20 AAC 25.055) and 2) to commingling of any or all Beluga and Upper Tyonek sands which are gas productive in the Field (20 AAC 25.215). Aurora requests that these Exceptions apply to all wells, both existing and future, within the boundaries described in the attached Exhibit A and shown on the attached maps, onshore and directional from onshore to shallow offshore. The Nicolai Creek Field is located on the west side of the Cook Inlet in the Kenai Borough. A plat depicting the lands is attached; lands in Sections 17, 19, 20, 29, 30, 31, and 32 in Township 11 North, Range 12 West, Seward Meridian are included in the Field and in this request. Currently, there are 6 active wells in this Field area, all Unit wells: Nicolai Creek Unit #1B, #2, #3, #9, # 10, and # 11. The wells produce or have produced gas from the Tsuga 2-5 interval of the Beluga to the Carya 2-6 interval of the Upper Tyonek. There are currently three Commission Orders regarding spacing exceptions in the Field: CO 478, CO 623, and CO 635A, for NCU #1, 2, and 9; for NCU #11, and for NCU # 10, respectively. A commingling exception Order is currently needed to produce the Upper Completion of the NCU #2, recompleted in September and October of 2013, which would commingle two lower Beluga sands and an Upper Tyonek sand. This requested Order would allow for production of this commingled completion and others that may occur in the future. The reasons for this request are two -fold: 1) this will allow more expeditious drilling and production of new wells on closer spacing to facilitate development of the limited -area reservoirs, and 2) economics dictate that we commingle as many sand intervals as possible to maximize production as the wells start to deplete. The spacing exception will allow for increased well densities and better recovery of reserves -comparing volumetric calculations to material balance analysis (P/Z vs. cumulative production plots), the wells drain limited areas —see attached Well and Reservoir Data spreadsheet, which shows estimated drainage areas of 25 to 155 acres, far less than an entire section. There are several separate fault blocks in the Field, and most producing sands are stratigraphically discontinuous. Nonetheless, there is good pressure and production information which allows for prudent reservoir management. There are currently at least 15 Beluga sands ("Tsuga 2-5 through 2- 8") and 10 Upper Tyonek sands ("Carya 2-1 to 2-6") that produce or have produced in the Field, from depths of about 920' TVD to 3570' TVD. Correlations between wells throughout the Field are usually done on the basis of the major coals, which mark the changing intervals and which are fairly consistent. Sands are then correlated based on the coals and sand lobes beneath the coals. Most of the wells have multiple selective completions, with packers and sliding sleeves to isolate selected intervals from one another for differing pressure or water -production reasons. By allowing commingling, as pressures equalize, multiple completions can be flowed simultaneously to maximize production and improve economics. 6051 North Course Drive, Suite 200 • Houston, Texas 77072 • (281) 495-9957 • Fax (281) 495-1473 1400 West Benson Blvd., Suite 410 • Anchorage, Alaska 99503 • (907) 277-1003 • Fax (907) 277-1006 The virgin pressure gradients are fairly consistent throughout the field, with gradients for shallow formations as high as 0.52 psi/ft and for deeper formations as low as 0.45 psi/ft. Using Expected Ultimate Recoveries (EUR's) from P/Z plots to back -calculate drainage areas from using volumetric reserves methods, the calculated drainage areas of most reservoirs are fairly small, 25-50 acres in the South (# 1 B, #2, #9, and # 11) to as large as 100-155 acres in the North (#3 and # 10). There are several faults dissecting the Field, and at least 5 different fault blocks produce. The structure and stratigraphy that limit the drainage areas make it necessary to drill multiple wells in a section and at closer -than - legal spacing to recover the gas in place. Due to the limited reserves per well, commingling enhances the economics by accelerating recoveries and economizing completion costs. Both of these Exceptions will result in recovery of more, not less, gas from the leases. Thus, waste will not occur in the overall field. The loss of producible gas ("waste") will not likely occur with the comingling of production. Zones are not commingled until individual bottom -hole pressures of the zones are close to each other, based on current SIP's after the individual interval tests. While there still may be cross -flow from the higher - pressured zone to the lower -pressured zone when intervals are commingled, the pressures will equalized as long as neither zone produces significant water. It is believed that any such "charging gas" resulting from cross flow will be produced as pressures equalize and drop simultaneously with production. The attached subsurface pressure map, for Aurora's annual reservoir surveillance reporting required by CO 478A indicates the similarities of pressures in the south. Allocations can be made on the basis of several parameters: based on volumetric reserves, log analyses, production test data, and reserves analysis, production can be estimated from the separate Beluga and Tyonek formations by at least three methods: 1) on the basis of individual tests, 2) on the basis of estimated reserves, and 3) on the basis of net pay. The reserves basis is probably the best and most accurate allocation method, if initial production rates from tests are essentially proportional to the reserves. See the attached Well and Reservoir Data sheet indicating reserves, producing depths, pressures, and producing rates, all of which provide some means of allocating production. Thus, proper allocation, while not being exact, can be done on a reasonable basis. Aurora is the lessee and Unit Operator of the Nicolai Creek Unit and all surrounding oil and gas leases and owns 100% of the Unit working interests at these producing depths. The only affected lease owners of this application is the State of Alaska, Department of Natural Resources (DNR), Mental Health Trust, and Cook Inlet Region Incorporated (CM). The Notice required by AOGCC regulation has been sent to the DNR, MHT, and CIRI, and an Affidavit attesting to this and the other facts contained herein is attached. The other lessees, working interest owners, within 3000' of the affected area are Apache, Buccaneer, ConocoPhillips, and Hilcorp. Should questions arise in connection with this request, please contact me at the numbers below. Respectfully Submitted RV, Edward Jones President Attachments • • NOTICE OF APPLICATION FOR WELL SPACING AND COMMINGLING EXCEPTIONS FIELD WIDE for Nicolai Creek Gas Field Aurora Gas, LLC has applied for an exception to the well spacing requirements and commingling of production within wellbores from the Beluga and Upper Tyonek formations, pursuant to the Alaska Oil and Gas Conservation Commission regulations [20 AAC 25.055(d) and 20 AAC 25.215(b)]. The proposed Exceptions are for the shallow gas rights of the entire onshore and onshore - accessible shallow offshore Nicolai Creek Gas Field area, located in Sections 17 (partial), 18 (partial), 19 (partial), 20, 29, 30, 31, and 32 of Township 11 North, Range 12 West, of the Seward Meridian, located on the west side of the Cook Inlet, as defined in the attached Exhibit A. Aurora Gas, LLC is the lessee of the affected depths of this proposal and the Unit operator of the Nicolai Creek Unit. The State of Alaska, DNR is the subsurface owner and lessor, and the State of .Alaska, Alaska Mental Health Trust, and Cook Inlet Regional Inc. are the surface owners. The Field area within which these Exceptions are proposed is within 3000 feet of a DNR lease held by Apache Alaska Corporation, a DNR lease held by Buccaneer Alaska, LLC, an unleased CIRI lease on which Apache has an option, and of a segment of a DNR lease held by Aurora (75%) and ConocoPhillips (25%) at these depths. Apache and Hilcorp are also the holders of the deep rights in the DNR leases in the Field and offsetting the Exhibit A leases. Their addresses of record are: State of Alaska, DNR Division of Oil and Gas 550 W. 7t' Avenue, Suite 1100 Anchorage, AK 99501-3560 Attn: Kevin Pike, Unit Manager Alaska Mental Health Trust Land Office 2600 Cordova Street, Suite 100 Anchorage, AK 99503 Attn: Mike Franger, Sr. Resource Manager Apache Alaska Corporation 2000 Post Oak Blvd., Suite 100 Houston, TX 77056-4400 Attn: Ron Solt, Exploration Land Manager Buccaneer Alaska, LLC 952 Echo Lane, Suite 420 Houston, Texas 77024 Attn: Mark R. Landt, Vice President, Land & Business Development Cook Inlet Regional Inc. 2525 C Street, Suite 500 P.O. Box 93330 Anchorage, AK 99509-3330 Attn: Ethan Schutt, Vice President ConocoPhillips Alaska 700 G Street P.O. Box 100360 (ATO-1478) Anchorage, AK 99510-0360 Attn: David Brown, Alaska Land Manager Hilcorp Alaska, L.L.C. 3800 Centerpoint Drive, Suite 100 Anchorage, AK 99503 Attn: Kevin Tabler, Land Manager, Alaska There are no other landowners, lessees or operators within 3000 feet of the Nicolai Creek Unit lands affected by this. The Application for Exception is attached to this Notice. Dated this 2nd day of December, 2013, in Houston, Texas. AFFIDAVIT IN SUPPORT OF THE NOTICE AND APPLICATION FOR NICOLAI CREEK FIELD -WIDE WELL SPACING EXCEPTION AND COMMINGLING EXCEPTION I, J. Edward Jones, President of Aurora Gas, LLC, hereby certify that the required information, data, and geographic portrayals contained in the Notice and Application for exceptions to the well spacing requirements and for commingling of the Beluga and Upper Tyonek for the above referenced Field area, pursuant to the Alaska Oil and Gas Conservation Commission regulations [20 AAC 25.055(d)]and [20 AAC 25.215(b)], dated December 2, 2013, are true and correct, to the best of my knowledge. Further your affiant sayeth not. AURORA GAS. LLC By: J. w d Jones Pr ent IN THE UNITED STATES OF AMERICA ss. STATE OF ALASKA Dated" This certifies that on the 2nd day of December, 2013, before me a notary public in and for the State of Texas, duly commissioned and sworn, personally appeared J. Edward Jones, to me known and known to me to be the person described in, and who executed the foregoing assignment, who then after being duly sworn according to law, acknowledged to me under oath that he executed the same freely and voluntarily for the uses and purposes therein mentioned. Witness my hand and official seal the day and year first above written. PAULA S. PO! .K Not::lry STATE OF rEXAS Notary Public Gap; MY corm,. EW, SSPWWM 30. 2016 My Commission Expires: EXHIBIT A Application for Field -Wide Well Spacing Exception and Commingling Nicolai Creek Field (Onshore) The requested exemptions for well spacing and commingling of the Beluga and Upper Tyonek shall apply only to the onshore and onshore -accessible lands in the Nicolai Creek Field, herein described: Lease ADL # 17585, Segment 1 T. 11 North, R. 12 West, Seward Meridian Section 29: West 1/2, Excluding Uplands; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 6,620 feet, as seen on the original resistivity log for the Nicolai Creek Unit No. 4 well (API # 50-283-20033-00-00), containing 116.82 acres, more or less. Lease ADL # 17585, Segment 4 T. 11 North, R. 12 West, Seward Meridian Section 29: East 1/2, Excluding Uplands; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 6,620 feet, as seen on the original resistivity log for the Nicolai Creek Unit No. 4 well (API # 50-283-20033-00-00), containing 126.9 acres, more or less. ADL # 17598, Segment 1 T. 11 North, R. 12 West, Seward Meridian: Section 30: All tide and submerged lands, excluding tide and submerged lands within W1/2 NE1/4 SE1/4 and NW1/4 SE1/4, lying south of the mean high tide line in Cook Inlet; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 4,558 feet, as seen on the original resistivity log for the Astoch Unit No. 1 well (API # 50-133-20426-00-00), containing 123.09 acres, more or less. ADL # 17598, Segment 2 T. 11 North, R. 12 West, Seward Meridian: Section 30: All tide and submerged lands within W1/2 NE1/4 SE1/4 (7.50 Acres) and NW1/4 SE1/4 (16.60 Acres); Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 4,558 feet, as seen on the original resistivity log for the Astoch Unit No. 1 well (API # 50-133-20426-00-00), containing 24.10 acres, more or less. ADL # 63279, Segment 1 T. 11 North, R. 12 West, Seward Meridian: Section 19: Fractional, W1/2 W1/2, Lying outside EO 8872; Section 30: Fractional, W1/2 W1/2; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 5,053 feet, as seen on the original resistivity log for the Nicolai Creek Unit No. 3 well (API # 50-283-20003-00-00), containing 202.00 acres, more or less. ADL # 63279, Segment 2 T. 11 North, R. 12 West, Seward Meridian: Section 20: Fractional, West 1/2; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 5,053 feet, as seen on the original resistivity log for the Nicolai Creek Unit No. 3 well (API # 50-283-20003-00-00), containing 320.00 acres, more or less. ADL # 391471, Segment 1 T. 11 North, R. 12 West, Seward Meridian Section 29: SW1/4 SW1/4 NW1/4 (10.00 acres) and NW1/4 SW1/4 (22.416 acres), landward of the mean high tideline of Cook Inlet, having 32.416 acres; Section 30: E1/2 NE1/4 SE1/4, landward of the mean high tideline of Cook Inlet, having 12.097 acres; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 4,911 feet, as seen on the original resistivity log for the Nicolai Creek Unit No. 5 well (API # 50-283-20036-00-00), containing 44.513 acres, more or less. ADL # 391472, Segment 1 T. 11 North, R. 12 West, Seward Meridian Section 17: S1/2 S1/2, 160.00 Acres; Section 18: S1/2 S1/2 SE1/4, lying outside E.O. 8872, 31.40 Acres Section 19: E1/2 NE1/4, SW1/4 NE1/4, NW1/4 NE1/4, SE1/4, E1/2 SW1/4, SE1/4 NW1/4, NE1/4NW1/4, lying outside E.O. 8872, 440.88 Acres; Section 20: E1/2, 320.00 Acres Section 29: NE1/4, N1/2 N1/2 SE1/4, NE1/4 SW1/4, E1/2 NW1/4, E1/2 SW1/4 NW1/4, NW1/4 SW1/4 NW1/4, NW1/4 NW1/4, landward of the mean high tide line of the Cook Inlet, including that portion of U.S. Survey 4550 lying within this section (4.00 acres), 363.90 Acres Section 30: NE1/4, NE1/4 SW1/4, E1/2 NW1/4, landward of the mean high tide line of the Cook Inlet, 270.8 Acres; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 4,911 feet, as seen on the original resistivity log for the Nicolai Creek Unit No. 5 well (API # 50-283-20036-00-00), containing 1,586.98 acres, more or less. ADL # 391472, Segment 2 T. 11 North, R. 12 West, Seward Meridian Section 30: W1/2 NE1/4 SE1/4, NW1/4 SE1/4, landward of the shoreline along the mean high tide of the Cook Inlet; Only those lands ABOVE the geologic marker between the Upper and Lower Tyonek Formation, which is the stratigraphic equivalent at a measured depth of 4,911 feet, as seen on the original resistivity log for the Nicolai Creek Unit No. 5 well (API # 50-283-20036-00-00), containing 35.90 acres, more or less. West Beluga PA West Tyonek PA North PA South PA Beluga PA Unit Boundary Leases of Interest Surrounding Leases 0 0.5 1 Miles , I L6'-3 rth DL ADL 279 391472 Tyene- - -` PA _ ADS ✓ Reluga PA 391471 v � NICOLAI CREEK FIELD 1 SPACING AND COMMINGLING ,EXCEPTION AREAS '(IN IDE HEAVY BLAPK BOX) �2(f Sc�S ljr�cr mt�l ADL 17585 • • } ,I ti 1 �1 }--------------------; >4 . 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Q Y � 0 3 F— m = o J W c`f LL e1 J J u w Q Z F- 0 • NICOLAI CREEK FIELD SOUTH Undesignated & BELUGA POOLS (SOUTH, WEST, & BELUGA PA's) # 11 Beluga DATUM -2033' TVDSS INITIAL -- 909 psig 5/2011 — 387 psig 11/2012 — 325 psig SEC 30 NCU #11 NCU NCU BELUGA Pf' i J i DATUM -2285' TVDSS INITIAL — 1041 psig ' 5/2009 — 538 psig i NCU 1 A Neu 1 le' L #11 Tyonek DATUM ;ATUM -25j7' TVDSS -2285' TVDSS INITIAL — 1211 psig INITIAL — 914 psig 10/2011 — 370 psig 8/2011 — 437 psig 10/2012 — 286 psig 8/2013 —387 psig 8/2013 — 354 psig NCU 6 DATUM -1527' TVDSS INITIAL — 663 psig 8/2011 — 174 psig 8/2012 — 98 psig 8/2013 — 155 psig N SEC 29 _are_ r f f DATUM -2285' TVDSS _ INITIAL — 1025 psig 10 34F 11/2011- 315 psig 10/2012 — 363 psig 3 8/2013 — 363 psig 4H 3 + -228 J NCU SOUTH PA Aurora Gas, LLC 2 NCU 4