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Home My WebLink AboutCO 732CONSERVATION ORDER 732 Kitchen Lights Unit A-4 1. February 8, 2017 Furie's request for spacing exception — KLU A-4 2. February 15, 2017 Notice of public hearing, affidavit of publication, email distribution, mailings 3. April 6, 2017 Transcript 4. April 6, 2017 Email to Furie ORDERS 0 STATE OF ALASKA • ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 711 Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Furie Operating Alaska, LLC to drill and complete the Kitchen Lights Unit A-4 development gas well within the same governmental section of a well that is, or may be capable of, producing from the same pool. IT APPEARING THAT: Docket No. OTH-17-005 Conservation Order No. 732 Kitchen Lights Unit Undefined Sterling Gas Pool Undefined Beluga Gas Pool Kitchen Lights Unit A-4 Gas Development Well Kenai Borough, Alaska June 2, 2017 1. By a letter received February 8, 2017, Furie Operating Alaska, LLC (Furie) requests an order allowing drilling and completion of the Kitchen Lights Unit (KLU) A-4 development gas well within the same governmental section of a well that is, or may be capable of, producing from the same pool. 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) scheduled a public hearing for April 6, 2017. On February 13, 2017, the AOGCC published notice of the opportunity for that hearing on the State of Alaska's Online Public Notice website and 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 mailing distribution list. On February 15, 2017, the AOGCC published the notice in the ALASKA DISPATCH NEWS. Furie sent by certified mail notice of the application to all owners, landowners, and operators of all properties within 3,000 feet of the proposed KLU A-4 development gas well, i.e., Cornucopia Oil and Gas Company, LLC, A.L. Berry, Danny S. Davis, Taylor Minerals, LLC, Furie Operating Alaska, LLC, Corsair Oil and Gas, LLC, and the State of Alaska. Furie provided the AOGCC the notice, date of mailing, addresses to which the notice was sent, and copies of the certified mail receipts. 4. The public hearing was held on April 6, 2017. FINDINGS: 1. Furie is the operator of the KLU located within the Cook Inlet, Kenai Peninsula Borough, Alaska. Working interest owners are Cornucopia Oil and Gas Company, LLC, A.L. Berry, Danny S. Davis, Taylor Minerals, LLC, Furie Operating Alaska, LLC, and Corsair Oil and Gas, LLC. 2. KLU A-4 well is an offshore, deviated development gas well with a surface location 338 feet from the south line and 890 feet from the west line of Section 24, Township 10 North, Range 11 West, Seward Meridian (S.M.). The bottom -hole location is 296 feet from the south line and 935 feet from the east line of Section 24, Township 10 North, Range 11 West, S.M. KLU A-4 will lie entirely within State of Alaska oil and gas lease ADL 389197. CO 732 • 0 June 2, 2017 Page 2 of 3 4. KLU A-4 will target gas -bearing sandstones within the Sterling Undefined Gas Pool and the Beluga Undefined Gas Pool. 5. KLU A-4 well will be located within the same governmental section as the KLU-3 and KLU A-2A development gas wells that are, or may be capable of, producing from the Sterling Undefined Gas Pool and the Beluga Undefined Gas Pool. 6. Development gas well KLU-3 is completed within the Sterling Undefined Gas Pool. This well also tested gas from the Beluga Undefined Gas Pool, and it may be capable of regular gas production from the Beluga if the well is successfully worked over and currently isolated lower potential pay zones become accessible. 7. Production history indicates KLU 3 and KLU A-2A went from virtually no water production to over 100 barrels of water production per day in the span of a few months. CONCLUSIONS: 1. There is an apparent water drive mechanism at play in the gas sands of the Sterling Undefined Gas Pool and the Beluga Undefined Gas Pool. Maximizing production rate typically leads to increased ultimate recovery in water drive gas reservoirs. Additional take points will maximize rate and ultimate recovery. 2. An exception to the well spacing provisions of 20 AAC 25.055(a)(4) is necessary to allow the drilling and completion of the KLU A-4 development gas well to help maximize rate and ultimate recovery from the Sterling and Beluga Undefined Gas Pools. Granting an exception to the well spacing provisions for the KLU A-4 well will not result in waste or jeopardize correlative rights of adjoining or nearby owners. NOW THEREFORE IT IS ORDERED: AOGCC grants Furie's February 8, 2017 application for an exception to the well spacing provisions to allow drilling and completion of the KLU A-4 development gas well within the Sterling Undefined Gas Pool and the Beluga Undefined Gas Pool. Furie may proceed as long as it complies with the terms of the Kitchen Lights Unit agreement, applicable Alaska laws, and all other legal requirements. DONE at Anchorage, Alaska and dated June 2, 2017. Daniel T. Seamount, Jr. Chair, Commissioner CO 732 • June 2, 2017 Page 3 of 3 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 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. As provided in AS 31.05.080(b), "[t]he questions reviewed on appeal are limited to the questions presented to the AOGCC by the application for reconsideration." In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. • Bruce Webb Senior Vice President Furie Operating Alaska, LLC 118 W. Northern Lights Blvd., Ste. 620 Anchorage, AK 99503 • STATE OF ALASKA • ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 71h Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Furie Operating Alaska, LLC to drill and complete the Kitchen Lights Unit A-4 development gas well within the same governmental section of a well that is, or may be capable of, producing from the same pool. IT APPEARING THAT: Docket No. OTH-17-005 Conservation Order No. 732 Kitchen Lights Unit Undefined Sterling Gas Pool Undefined Beluga Gas Pool Kitchen Lights Unit A-4 Gas Development Well Kenai Borough, Alaska June 2, 2017 1. By a letter received February 8, 2017, Furie Operating Alaska, LLC (Furie) requests an order allowing drilling and completion of the Kitchen Lights Unit (KLU) A-4 development gas well within the same governmental section of a well that is, or may be capable of, producing from the same pool. 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) scheduled a public hearing for April 6, 2017. On February 13, 2017, the AOGCC published notice of the opportunity for that hearing on the State of Alaska's Online Public Notice website and 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 mailing distribution list. On February 15, 2017, the AOGCC published the notice in the ALASKA DISPATCH NEWS. 3. Furie sent by certified mail notice of the application to all owners, landowners, and operators of all properties within 3,000 feet of the proposed KLU A-4 development gas well, i.e., Cornucopia Oil and Gas Company, LLC, A.L. Berry, Danny S. Davis, Taylor Minerals, LLC, Furie Operating Alaska, LLC, Corsair Oil and Gas, LLC, and the State of Alaska. Furie provided the AOGCC the notice, date of mailing, addresses to which the notice was sent, and copies of the certified mail receipts. 4. The public hearing was held on April 6, 2017. FINDINGS: 1. Furie is the operator of the KLU located within the Cook Inlet, Kenai Peninsula Borough, Alaska. Working interest owners are Cornucopia Oil and Gas Company, LLC, A.L. Berry, Danny S. Davis, Taylor Minerals, LLC, Furie Operating Alaska, LLC, and Corsair Oil and Gas, LLC. 2. KLU A-4 well is an offshore, deviated development gas well with a surface location 338 feet from the south line and 890 feet from the west line of Section 24, Township 10 North, Range 11 West, Seward Meridian (S.M.). The bottom -hole location is 296 feet from the south line and 935 feet from the east line of Section 24, Township 10 North, Range 11 West, S.M. 3. KLU A-4 will lie entirely within State of Alaska oil and gas lease ADL 389197. CO 732 0 • June 2, 2017 Page 2 of 3 4. KLU A-4 will target gas -bearing sandstones within the Sterling Undefined Gas Pool and the Beluga Undefined Gas Pool. 5. KLU A-4 well will be located within the same governmental section as the KLU-3 and KLU A-2A development gas wells that are, or may be capable of, producing from the Sterling Undefined Gas Pool and the Beluga Undefined Gas Pool. 6. Development gas well KLU-3 is completed within the Sterling Undefined Gas Pool. This well also tested gas from the Beluga Undefined Gas Pool, and it may be capable of regular gas production from the Beluga if the well is successfully worked over and currently isolated lower potential pay zones become accessible. 7. Production history indicates KLU 3 and KLU A-2A went from virtually no water production to over 100 barrels of water production per day in the span of a few months. CONCLUSIONS: 1. There is an apparent water drive mechanism at play in the gas sands of the Sterling Undefined Gas Pool and the Beluga Undefined Gas Pool. Maximizing production rate typically leads to increased ultimate recovery in water drive gas reservoirs. Additional take points will maximize rate and ultimate recovery. 2. An exception to the well spacing provisions of 20 AAC 25.055(a)(4) is necessary to allow the drilling and completion of the KLU A-4 development gas well to help maximize rate and ultimate recovery from the Sterling and Beluga Undefined Gas Pools. Granting an exception to the well spacing provisions for the KLU A-4 well will not result in waste or jeopardize correlative rights of adjoining or nearby owners. NOW THEREFORE IT IS ORDERED: AOGCC grants Furie's February 8, 2017 application for an exception to the well spacing provisions to allow drilling and completion of the KLU A-4 development gas well within the Sterling Undefined Gas Pool and the Beluga Undefined Gas Pool. Furie may proceed as long as it complies with the terms of the Kitchen Lights Unit agreement, applicable Alaska laws, and all other legal requirements. DONE at Anchorage, Alaska and dated June 2, 2017. a1LMo //signature on fileH Hsignature on file// Daniel T. Seamount, Jr. Hollis S. French °o Chair Commissioner Commissioner f �k�'4)ION CIO CO 732 • • June 2, 2017 Page 3 of 3 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 xt 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. As provided in AS 31.05.080(b), "[tlhe questions reviewed on appeal are limited to the questions presented to the AOGCC by the application for reconsideration" In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. 0 Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711-0055 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 99639-0309 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706-0868 -(A� QQ Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Friday, June 02, 2017 1:38 PM To: aogcc.inspectors@alaska.gov; 'Bender, Makana K (DOA) (makana.bender@alaska.gov)'; 'Bettis, Patricia K (DOA) (patricia.bettis@alaska.gov)'; 'Brooks, Phoebe L (DOA) (phoebe.brooks@alaska.gov)'; Carlisle, Samantha J (DOA); 'Colombie, Jody J (DOA) Oody.colombie@alaska.gov)'; 'Davies, Stephen F (DOA) (steve.davies@alaska.gov)'; Eaton, Loraine E (DOA); Toerster, Catherine P (DOA) (cathy.foerster@alaska.gov)'; 'French, Hollis (DOA)'; Trystacky, Michal (michal.frystacky@alaska.gov)'; 'Guhl, Mer*dith (DOA sponsored) (meredith.guhI@alas ka.gov)'; Kair, Michael N (DOA); 'Link, Liz M (DOA)'; Loepp, Victoria T (DOA); 'Mumm, Joseph (DOA sponsored) Ooseph.mumm@alaska.gov)'; 'Paladijczuk, Tracie L (DOA) (tracie.paladijczuk@alaska.gov)'; 'Pasqual, Maria (DOA) (maria.pasqual@alaska.gov)'; 'Quick, Michael (DOA sponsored)'; 'Regg, James B (DOA) Oim.regg@alaska.gov)'; 'Roby, David S (DOA) (dave.roby@alaska.gov)'; 'Schwartz, Guy L (DOA) (g uy.schwa rtz@ a laska.gov)'; 'Sea mount, Dan T (DOA) (dan.seamount@alaska.gov)'; Singh, Angela K (DOA); 'Wallace, Chris D (DOA) (chris.wallace@alaska.gov)'; AK, GWO Projects Well Integrity, 'AKDCWellIntegrityCoordinator'; 'Alan Bailey'; 'Alex Demarban'; 'Alexander Bridge'; 'Allen Huckabay'; 'Andrew VanderJack'; 'Ann Danielson'; Anna Raff; 'Barbara F Fullmer'; bbritch; Becky Bohrer; 'Ben Boettger'; 'Bill Bredar'; Bob; Brandon Viator; 'Brian Havelock'; 'Bruce Webb'; 'Caleb Conrad'; 'Candi English'; Cocklan- Vendl, Mary E; Colleen Miller, 'Connie Downing'; Crandall, Krissell; 'D Lawrence'; 'Dale Hoffman'; 'Darci Horner'; 'Dave Harbour'; David Boelens; 'David Duffy'; David House; 'David McCaleb'; 'David McCraine'; 'ddonkel@cfl.rr.com'; 'DNROG Units'; 'Donna Ambruz'; 'Ed Jones'; 'Elizabeth Harball'; Elowe, Kristin; 'Elwood Brehmer'; 'Evan Osborne'; Evans, John R (LDZX); 'George Pollock'; Gordon Pospisil; Greeley, Destin M (DOR); 'Gretchen Stoddard'; gspfoff, 'Hunter Cox'; Hurst, Rona D (DNR); Hyun, James J (DNR); 'Jacki Rose'; Jason Brune; Jdarlington Oarlington@gmail.com); 'Jeanne McPherren'; 'Jerry Hodgden'; Jill Simek; 'Jim Watt'; Jim White; 'Joe Lastufka'; Joe Nicks; 'John Burdick'; 'John Easton'; John Larsen; 'John Stuart'; Jon Goltz; Josef Chmielowski; 'Juanita Lovett'; 'Judy Stanek'; Kari Moriarty; 'Kasper Kowalewski'; 'Kazeem Adegbola'; 'Keith Torrance'; Keith Wiles; Kelly Sperback; Kevin Frank; Kruse, Rebecca D (DNR); Laura Silliphant (laura.gregersen@alaska.gov); Leslie Smith; Lori Nelson; Louisiana Cutler; 'Luke Keller'; 'Marc Kovak'; Mark Dalton; Mark Hanley (mark.hanley@anadarko.com); 'Mark Landt'; 'Mark Wedman'; 'Mealear Tauch'; 'Michael Bill'; Michael Calkins; 'Michael Moora'; Mike Morgan; MJ Loveland; mkm7200; 'Motteram, Luke A'; Mueller, Marta R (DNR); Munisteri, Islin W M (DNR); nelson; Nichole Saunders; 'Nick Ostrovsky'; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; 'Paul Craig'; Paul Decker (paul.decker@alaska.gov); 'Paul Mazzolini'; Pike, Kevin W (DNR); Randall Kanady; 'Renan Yanish'; 'Richard Cool'; 'Robert Brelsford'; Sara Leverette; 'Scott Griffith'; Shahla Farzan; Shannon Donnelly; 'Sharon Yarawsky'; Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); 'Stephanie Klemmer'; 'Stephen Hennigan'; Sternicki, Oliver R; Steve Moothart (steve.moothart@alaska.gov); 'Steve Quinn'; 'Suzanne Gibson'; 'Tamera Sheffield'; 'Ted Kramer'; 'Teresa Imm'; 'Thor Cutler'; 'Tim Jones'; 'Tim Mayers'; 'Todd Durkee'; 'trmjrl'; 'Tyler Senden'; Umekwe, Maduabuchi P (DNR); 'Vinnie Catalano'; 'Well Integrity'; 'Well Integrity'; 'Weston Nash'; 'Whitney Pettus'; 'Aaron Gluzman'; 'Aaron Sorrell'; Ajibola Adeyeye; Alan Dennis; Andy Bond; Bajsarowicz, Caroline J; 'Bruce Williams'; Bruno, Jeff J (DNR); Casey Sullivan; Corey Munk; David Tetta; 'Don Shaw'; Eppie Hogan ; Eric Lidji; Garrett Haag; 'Graham Smith'; Hak Dickenson; Heusser, Heather A (DNR); Holly Fair, Jamie M. Long; 'Jason Bergerson'; Jesse Chielowski; 'Jim Magill'; Joe Longo; John Martineck; Josh Kindred; Keith Lopez; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; 'Marie Steele'; Matt Armstrong; Melonnie Amundson; 'Mike Franger'; Morgan, Kirk A (DNR); Pascal Umekwe; Pat Galvin; 'Pete Dickinson'; Peter Contreras; Rachel Davis; Richard Garrard; Richmond, Diane M; Robert Province; 'Ryan Daniel'; 'Sandra Lemke'; 'Susan Pollard'; Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); 'Wayne Wooster'; 'William Van Dyke' Subject: co 7322qurie) Attachments: co732.pdf Re: THE APPLICATION OF Furie Operating Alaska, LLC to drill and complete the Kitchen Lights Unit A-4 development gas well within the same governmental section of a well that is, or may be capable of, producing from the same pool. Docket No. OTH-17-005 Conservation Order No. 732 Kitchen Lights Unit Undefined Sterling Gas Pool Undefined Beluga Gas Pool Kitchen Lights Unit A-4 Gas Development Well Kenai Borough, Alaska June 2, 2017 Jody J. Colombie .AOGCC SpeciaC.Assistant .Alaska OiCandGas Conservation Commission 333 West 7" .Avenue .Anchorage, ..ACaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 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 Jody Colombie at 907.793.1221 or iody.colombie@alaska.gov. INDEXES Colombie, Jody J (DOA) From: Bettis, Patricia K (DOA) Sent: Thursday, April 06, 2017 3:27 PM To: Seamount, Dan T (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA) Cc: Colombie, Jody J (DOA) Subject: FW: KLU A-4 Spacing Exception Public Hearing : Guidelines FYI From: Bettis, Patricia K (DOA) Sent: Thursday, April 6, 2017 2:14 PM To: Bruce Webb <b.webb@furiealaska.com> Subject: KLU A-4 Spacing Exception Public Hearing : Guidelines Good afternoon Bruce, Adequate information must be provided to the AOGCC and the public during a hearing. The applicant bears the burden of preparing and presenting testimony of sufficient detail to establish that approval of the application is warranted. This testimony must be prepared and presented in PowerPoint by authorized representatives of the applicant who can address detailed questions and comments. Guidelines for public hearings can be found on the AOGCC website at the following address: http://doa.alaska.gov/ogc/hear/PubHrgGuid.pdf. Specific guidelines to follow can be found under the topic Conservation Order (Field and Pool Rules) as Furie is seeking an exception to the statewide drilling units and well spacing patterns, 20 AAC 25.055. Furie must provide sufficient information to demonstrate that KLU AA as planned, will not interfere with production from existing wells. In addition to the guideline criteria, Furie must provide the following information to the AOGCC in advance of the continued hearing, and Furie's representatives must be prepared to present and discuss these topics at that hearing: 1. For each known or prospective reservoir, please provide a structure map that includes all mapped or inferred faults, lowest -known -gas and highest -known water or gas -water -contacts, existing well penetrations, and planned future well penetrations. 2. For each known or prospective reservoir, please provide an isopach map and a net pay map. Each map must display all existing well penetrations and future well penetrations. 3. Provide cross -sections, trending both southwest to northeast and northwest -southeast showing correlations, completions intervals, potential completion intervals, casing shoe depths, and the top of cement in each well for each cement job. 4. Provide a history for each well that includes completion date, perforation information (interval depths and perforation dates), initial pressure information, and monthly production rates of gas and water. Provide a production chart for each producing well, identify the perforated reservoir(s), and discuss the impact from production from that well on each nearby producer. 5. Provide available salinity analyses on produced water or from well tests for each reservoir. Specify whether the salinity measurements represent TDS or chlorides. If the reporting unit is chlorides, please convert to equivalent TDS. If laboratory analyses are not available, please estimate the TDS of the connate water utilizing well log calculations and provide a copy of those calculations to the AOGCC. 6. Provide original -gas -in -place estimates and reserves for each reservoir. AOGCC 4/6/2017 *TMO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 ALASKA OIL AND GAS CONSERVATION COMMISSION Before Commissioners: Cathy Foerster, Chair Daniel T. Seamount Hollis French In the Matter of the Application of ) Furie Operating Alaska, Inc., for an ) Exception to the Spacing Requirements of ) 20 AAC 25.055(a)(4) for the Drilling of ) the Kitchen Lights Unit A-4 Gas Well. ) Docket No.: CO 17-005 ALASKA OIL and GAS CONSERVATION COMMISSION Anchorage, Alaska April 6, 2017 9:00 o'clock a.m. PUBLIC HEARING Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 OTMO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 2 1 TABLE OF CONTENTS 2 Opening remarks by Chair Foerster 03 3 Remarks by Mr. Webb 08 4 Remarks by Mr. Ganer 19 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 • 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 3 1 1 P R O C E E D I N G S 2 (On record - 9:03 a.m.) 3 CHAIR FOERSTER: All right. I'll call this 4 hearing to order. It is 9:03 a.m. on April 6, 2017. 5 We are located at the offices of the Alaska Oil and Gas 6 Conservation Commission, 333 West Seventh Avenue, 7 Anchorage, Alaska. To my left is Commissioner Dan 8 Seamount, to my right is Hollis French and I'm Cathy 9 Foerster. 10 This hearing is regarding docket number CO 17- 11 005, the application of Furie Operating Alaska, Inc., 12 for an exception to the spacing requirements of 20 AAC 13 25.055(a)(4) for the drilling of the Kitchen Lights 14 unit number A-4 gas well. Furie by letter dated 15 February 4th, 2017, requests the Alaska Oil and Gas 16 Conservation Commission issue an order for an exception 17 to the spacing exception [sic] of 20 AAC 25. 055 (a) (4) . 18 The KLU-A4 spacing exception is allegedly needed to 19 increase deliverability from the delineated natural gas 20 reservoirs in support of Furie's southcentral natural 21 gas utility contracts. Computer Matrix will be 22 recording today's proceedings and you can get a copy of 23 the transcript from them once it is prepared. 24 We have a representative of Furie in the room 25 who is prepared to testify. Are there any other Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC • 4/6/2017 OMO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 4 1 1 parties planning to testify? 2 MR. WEBB: We have Bruce Ganer from Sierra 3 Pines in Houston, Texas, on the phone. He's our 4 geologist for Furie. 5 CHAIR FOERSTER: Is he going to testify or just 6 be available to answer questions? 7 MR. WEBB: Both. 8 CHAIR FOERSTER: Okay. 9 MR. WEBB: Yeah. Yeah. 10 CHAIR FOERSTER: Okay. He is planning to 11 testify. 12 MR. WEBB: Yeah. 13 CHAIR FOERSTER: Okay. So for the audience, 14 Commissioners ask questions during testimony. We may 15 also take a break to consult with our staff to 16 determine whether additional information or clarifying 17 questions are needed to assist in reaching our final 18 determination. If a member of the audience has a 19 question that he or she desires asked, please submit 20 that question to Jody Colombie doing the float wave in 21 the back of the room, and she will provide those 22 questions to the Commissioners and if we feel that 23 asking any questions from the audience will assist us 24 in making our determination we will ask those 25 questions. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC is 4/6/2017 SMO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 5 1 When you're testifying please keep in mind that 2 you must speak into the microphone, the little green 3 light must be bright, shining on so that the audience 4 in the back of the room and the court reporter can hear 5 your testimony. Also please if you're using slides 6 remember to reference those slides so that people 7 reading the record in the future can follow along. 8 Testimony must be relevant to the purposes of the 9 hearing and to the statutory authority of the AOGCC. 10 Anyone desiring to testify may do so, but if testimony 11 drifts off subject we will limit the testimony to three 12 minutes. Testimony may not take the form of cross 13 examination and must be respectful. 14 Commissioner Seamount, do you have anything to 15 add for the good of the order before we begin? 16 COMMISSIONER SEAMOUNT: Yeah. I think one 17 thing I would like cleared up is a description of the 18 field and why we're drilling wells so closely. I may 19 have a lot of questions or I may have very few. 20 But, Mr. Webb, you say that your geologist -- 21 who's your geologist? 22 MR. WEBB: His name is Bruce Ganer..... 23 COMMISSIONER SEAMOUNT: Bruce Ganer. 24 MR. WEBB: .....with Sierra Pines Resources. 25 COMMISSIONER SEAMOUNT: And, Mr. Ganer, are you Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 *INTO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 6 1 going to start off with some sort of testimony -- I'll 2 tell you what I'm looking for. 3 CHAIR FOERSTER: Don't get him to testify 4 before we've sworn him in. 5 COMMISSIONER SEAMOUNT: I know. I know. You 6 can't testify until you say I'm done. 7 CHAIR FOERSTER: Until you've been sworn in. 8 COMMISSIONER SEAMOUNT: And until you've been 9 sworn in. But for -- first of all, I'd like to start 10 by saying I hate the naming convention of your field, 11 you've got 2-A, A-2, KLU-1, KLU-2, potentially a number 12 6 and that would be part of the testimony is how are 13 these different wells named and then why are they 14 drilled so close to each other, what are the target 15 zones, give us a feeling for the structure of the 16 field, possibly the reserves if you can do that. 17 And I'm going to stop right there, I hope I 18 gave you an idea of what I'm looking for. 19 That's it, Madam Chair. 20 CHAIR FOERSTER: Thank you, Commissioner 21 Seamount. 22 Commissioner French, do you have anything to 23 add for the good of the order? 24 COMMISSIONER FRENCH: I think Commissioner 25 Seamount covered most of my concerns. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC • 4/6/2017 *MO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 7 1 1 CHAIR FOERSTER: Alrighty then. All right. 2 So, Furie, we'll let you begin with your testimony. 3 Are you all going to -- is there an order, are you 4 going to testify first and then Mr. Ganer or are you 5 all going to tag team it or how's this going to go? 6 I'm just looking to -- as to how to swear you in and 7 how to help the court reporter capture who's speaking. 8 MR. WEBB: I -- to be honest I believe Bruce 9 Ganer is going to have all the information regarding 10 the geology and well naming conventions. 11 CHAIR FOERSTER: So you're kind of just the 12 gatekeeper? 13 MR. WEBB: Yeah. Yeah, this was -- we weren't 14 anticipating having a hearing so we weren't -- and when 15 -- we didn't find out until yesterday that it was going 16 to be dealing with the reservoir and where the -- why 17 we were drilling wells where we are. So..... 18 CHAIR FOERSTER: Well, before we continue can I 19 get you to raise your right hand. State your name for 20 the record first. 21 MR. WEBB: Bruce Webb. 22 CHAIR FOERSTER: Representing? 23 MR. WEBB: Furie Operating Alaska. 24 CHAIR FOERSTER: Okay. 25 (Oath administered) Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC • 4/6/2017 SMO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 1 MR. WEBB: Yes, I do. 2 CHAIR FOERSTER: Okay. 3 BRUCE WEBB 4 called as a witness on behalf of Furie, testified as 5 follows on: 6 DIRECT EXAMINATION 7 CHAIR FOERSTER: So you weren't aware that we 8 were having a hearing? 9 MR. WEBB: I know the hearing was tentatively 10 scheduled and in the past they've always been vacated 11 because no one would submit written comments. And Jody 12 Colombie sent me a message a couple days ago reminding 13 me that the hearing was on. And I asked well, who 14 submitted comments and she said the Commissioners want 15 to have some questions. And so I wasn't sure what the 16 questions were until yesterday when our engineers were 17 here discussing the drilling program. And that's when 18 I contacted Bruce Ganer and made sure he was available. 19 COMMISSIONER SEAMOUNT: Okay. Mr. Webb, you 20 having said that, this field has had quite an 21 interesting history. Could you go through the history 22 of this field and first of all what's your -- what's 23 your title? 24 MR. WEBB: Senior vice president. 25 COMMISSIONER SEAMOUNT: And who's 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 4/6/2017 SMO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 1 president? Page 9 1 2 MR. WEBB: Lars Degenhardt. 3 COMMISSIONER SEAMOUNT: Okay. 4 MR. WEBB: And he's in Germany. 5 COMMISSIONER SEAMOUNT: And originally -- well, 6 not originally, but a while ago there was a company 7 called Escopeta..... 8 MR. WEBB: Uh-huh. 9 COMMISSIONER SEAMOUNT: .....which had control 10 of this. Is there anybody been between Lars -- what's 11 his name? 12 MR. WEBB: Degenhardt. 13 COMMISSIONER SEAMOUNT: Lars Degenhardt and 14 Escopeta which would be Danny..... 15 MR. WEBB: Danny Davis, Lawrence Berry. 16 COMMISSIONER SEAMOUNT: .....Danny Davis. Has 17 anything transpired between those two entities? 18 MR. WEBB: The German parent company bought the 19 majority interest of Escopeta's holdings in October of 20 2010. Originally it became the 75 percent working 21 owner and then later became the 80 percent working 22 owner. Then Danny Davis or Escopeta transferred their 23 interest, their remaining 20 percent interest, to the 24 individuals that used to be involved in Escopeta and 25 that would be Danny Davis, Lawrence Berry and Robert Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC • 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 10 1 1 Taylor. Since then there's been continuing talks 2 between the minority working interest owners and the 3 majority working interest owner, Cornucopia Oil and 4 Gas. Furie is the operator for Cornucopia. 5 CHAIR FOERSTER: So if Danny Davis had 20 6 percent and he sold his 20 percent to the company that 7 had 80 percent, who are the minority owners? 8 MR. WEBB: Well, it -- Escopeta had 100 percent 9 and they transferred..... 10 CHAIR FOERSTER: And they..... 11 MR. WEBB: .....80 percent..... 12 CHAIR FOERSTER: .....80 percent. And then 13 they transferred..... 14 MR. WEBB: .....to Cornucopia. 15 CHAIR FOERSTER: .....the other 20 percent. So 16 who's left, 80 plus 20 being 100..... 17 MR. WEBB: Right. 18 CHAIR FOERSTER: .....I'm a little confused? 19 MR. WEBB: The 20 percent is no longer is 20 Escopeta's name, it's 6.675 Danny Davis, 7.75 Lawrence 21 Berry and 4.25 Robert Taylor. 22 CHAIR FOERSTER: So they sold it to themselves? 23 MR. WEBB: Right. 24 CHAIR FOERSTER: Okay. 25 MR. WEBB: Individually. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC is 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 11 1 COMMISSIONER SEAMOUNT: Do all these interest 2 owners have equal percentage ownership of the 3 facilities and the production? 4 MR. WEBB: They have their proportionate share. 5 COMMISSIONER SEAMOUNT: They have their 6 proportionate share. 7 MR. WEBB: Yeah. 8 COMMISSIONER SEAMOUNT: And do you or any 9 subsidiary have ownership of the rig that is going to 10 be drilling this well? 11 MR. WEBB: The Randolph Yost is owned by a 12 Hamburg company, I believe it's called Nordic. It's a 13 bare bones charter from Shelf Drilling and it's managed 14 and operated by Advanced Drilling Solutions out of 15 Louisiana, Texas. And..... 16 CHAIR FOERSTER: Is Yost an American company, a 17 German -- the owner of the rig? 18 MR. WEBB: That I'm not completely sure. 19 CHAIR FOERSTER: But it's Yost that owns it? 20 MR. WEBB: It's -- Randolph Yost is the name 21 and it's Shelf Drilling that's the actual owner. 22 CHAIR FOERSTER: Oh, Shelf Drilling. Okay. 23 MR. WEBB: Yeah. The rig came from southeast 24 Asia..... 1 25 CHAIR FOERSTER: Okay. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 12 1 1 MR. WEBB: .....I believe. 2 COMMISSIONER SEAMOUNT: Okay. But as I 3 understand it then Nordic, Randolph Yost, is a 4 completely separate economic entity from Furie and 5 its..... 6 MR. WEBB: Correct. 7 COMMISSIONER SEAMOUNT: .....and the partners? 8 Okay. So you're just renting them out, correct? 9 MR. WEBB: Right. It's a..... 10 COMMISSIONER SEAMOUNT: Okay. 11 MR. WEBB: .....day rate. 12 CHAIR FOERSTER: So what was Cornucopia's role 13 in all this again, I didn't..... 14 MR. WEBB: Cornucopia is actually the 15 leaseholder..... 16 CHAIR FOERSTER: Okay. 17 MR. WEBB: .....and Furie is the operator. 18 CHAIR FOERSTER: Is -- what's the relationship 19 between Cornucopia and Furie? 20 MR. WEBB: It's the same management basically, 21 Lars Degenhardt is the president of both companies. 22 CHAIR FOERSTER: Okay. 23 MR. WEBB: Dave Elder is the CFO for both. 24 CHAIR FOERSTER: So the ownership is the same 25 as the Furie ownership? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 13 1 1 MR. WEBB: Yes. 2 CHAIR FOERSTER: Okay. Okay. So, Mr. Webb, I 3 think we've got some of the groundwork laid. Why don't 4 we swear in Mr. Ganer..... 5 MR. WEBB: Okay. 6 CHAIR FOERSTER: .....and, Mr. Ganer, I'm going 7 to trust that you have raised your right hand. 8 MR. GANER: Okay. I have. 9 (Oath administered) 10 MR. GANER: Yes, I do. 11 CHAIR FOERSTER: Thank you. 12 (Off record comments - volume) 13 CHAIR FOERSTER: Mr. Ganer, do you wish to be 14 recognized as an expert geologist or are you just going 15 to make -- provide testimony without any expert 16 recognition? 17 MR. GANER: I'm not sure I have an opinion on 18 that. I have no objections to being -- I have done 19 expert witness stuff. Technically I'm a petroleum 20 engineer, but I've got a strong geological background 21 and in my company I have geologic and geophysical 22 associates that I supervise. 23 CHAIR FOERSTER: Okay. Commissioner Seamount, 24 what are your thoughts? 25 COMMISSIONER SEAMOUNT: Can you give us your Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 14 1 1 experience, please, Mr. Ganer? 2 MR. GANER: Yes. I started working in 1974 3 with Schlumberger so I started in the business, oil 4 business then, worked with Schlumberger for seven 5 years. And then moved to the operations side, got out 6 of the service company business and went to work for 7 Home Petroleum, Union Texas Petroleum and ended up at 8 Pennzoil over a period of from 1980 to 1997. I was -- 9 through those years I or early on my undergraduate 10 degrees are in mathematics and physics, I was in 11 graduate school in physics when I hired on with 12 Schlumberger. When I got into the oil business I 13 started at night school studying geology and 14 geophysics, went -- was working on a master's degree in 15 geophysics, but ultimately converted and completed a 16 master's degree in petroleum engineering. 17 CHAIR FOERSTER: Where were you going to night 18 school? 19 MR. GANER: Pardon me. 20 CHAIR FOERSTER: Where were you going to night 21 school? 22 MR. GANER: University of Houston. 23 CHAIR FOERSTER: Okay. Thank you. 24 MR. GANER: And that's where I got my degree 25 from..... Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 &0: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 15 1 1 CHAIR FOERSTER: Okay. 2 MR. GANER: .....a master's degree. Through 3 those years I was a petrophysicist and I became a 4 reservoir engineer for Union Texas and then I moved on 5 to Pennzoil where I was a petrophysicist/reservoir 6 engineer and I -- a year later they appointed me the 7 technical lead for -- technical services lead for 8 Pennzoil worldwide. So I worked international and 9 domestic. I had a staff of 35 with reservoir 10 stimulation engineers, geologists, geophysicists, 11 petrophysicists, completion engineers, drilling 12 engineers. And then in 1997 I formed Sierra Pine 13 Resources International and I've been the president of 14 that since 197 to present working on international 15 projects where we develop prospects and we shepherd 16 prospects into development phases for numerous startup 17 companies and with some of the larger independents that 18 included Pennzoil, Devon Energy El Paso and the like 19 and quite a few smaller startup companies around the 20 world. 21 COMMISSIONER SEAMOUNT: And, Mr. Ganer, can you 22 tell -- can you give us an idea, not a complete list, 23 of what states, countries and fields you've worked in 24 and how much energy you've put into this field, Kitchen 25 Lights? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email• sahile@gci.net AOGCC 4/6/2017 &0: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 16 1 MR. GANER: Uh-huh. Yeah, it's a pretty large 2 diversity of areas that I've worked actually hands on, 3 not only just supervising asset teams, but it included 4 in the days of Union Texas from 1980 to 189 I worked 5 exploration efforts, supported exploration efforts in 6 the Colville Delta, in the Kuparuk River area with a -- 7 in a consortium that Union Texas had with I believe it 8 was ARCO, Amerada Hess and Placid. So I worked some of 9 the North Slope, I've worked the west coast, 10 California, offshore Monterey shales. I worked the 11 Permian Basin as a petroleum engineer and a reservoir 12 engineer, waterfloods and CO2 floods and primary 13 production as well as supported exploration efforts out 14 in that region. Worked offshore Gulf of Mexico and 15 fairly extensively with Pennzoil and I ran a couple of 16 asset teams in the offshore for Pennzoil. And the 17 upper and lower Gulf coast U.S. at -- went all the way 18 -- and actually expanded to the northeastern part of 19 the country in the Illinois basis and in Michigan. 20 When I was finishing up my career with Schlumberger I 21 ran the -- Schlumberger's computing center in 22 Shreveport and our -- my jurisdiction there was the 23 southeast quadrant of the U.S. so it was northeast 24 Texas all the way over into Florida. 25 COMMISSIONER SEAMOUNT: Is -- in your geo..... Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 IWO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 17 1 1 MR. GANER: Oh. 2 COMMISSIONER SEAMOUNT: Excuse me. 3 MR. GANER: If you want me to expand, I -- 4 actually on the international side I worked -- I've 5 worked in Columbia, Brazil, onshore, offshore, Bahrain, 6 Egypt and Azerbaijan and Syria. 7 COMMISSIONER SEAMOUNT: Okay. And as -- in 8 your geological work have you worked with structure 9 maps and in your engineering work have you worked with 10 things like interference tests, things like that and 11 have you applied them to Kitchen Lights unit? 12 MR. GANER: Well, okay. What -- are you saying 13 that on the geological side, did you say mapping 14 or..... 15 COMMISSIONER SEAMOUNT: Yes, structural 16 mapping..... 17 MR. GANER: No. 18 COMMISSIONER SEAMOUNT: .....isopach mapping. 19 MR. CANER: Yes. Yes, of course. 20 COMMISSIONER SEAMOUNT: Okay. 21 MR. GANER: Yeah, all -- all of the stuff that 22 goes into reserve estimations. I worked with the 23 geologist and sometimes actually generated my own maps, 24 isopach maps, structure maps, did work on stratigraphy, 25 reservoir description on the petrophysic side and then Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 040: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 18 1 1 rolled that up into the reservoir engineering and 2 strategic planning for development. 3 COMMISSIONER SEAMOUNT: And how about reservoir 4 modeling? 5 MR. GANER: In reservoir modeling some 6 experience in reservoir stimulation, but more on the 7 side of auditing the work and supervising the efforts 8 of reservoir stimulation work, interference testing, 9 pressure transient analysis, hands on analysis with 10 that. So I have fairly good experience with that. 11 Modal analysis, well performance designs, remedial 12 measures, reconciling differences between well 13 performance theory and well performance actual, reserve 14 estimation and then of course the roll up of reserve 15 estimations into strategic plans on a corporate level 16 and then on a field -wide level as well. 17 COMMISSIONER SEAMOUNT: Okay. Mr. Ganer, it 18 seems like you have quite a bit of experience. I 19 wouldn't have a problem saying that you were an expert 20 in petroleum technology which includes geology, 21 geophysics and engineering. 22 MR. GANER: Okay. 23 COMMISSIONER SEAMOUNT: That's my opinion. 24 Madam Chair. 25 CHAIR FOERSTER: I see no reason not to Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC • 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 19 1 1 recognize you as an expert. 2 Commissioner French, do you have any concerns 3 with expert recognition for this witness? 4 COMMISSIONER FRENCH: No. 5 CHAIR FOERSTER: Okay. Well, Mr. Ganer, we 6 give a little extra technical weight to the testimony 7 of people recognized as technical experts so we'll just g go ahead and recognize you as such. And you may 9 proceed with your testimony. 10 MR. GAMER: Okay. 11 BRUCE CANER 12 previously sworn, called as a witness on behalf of 13 Furie, testified telephonically as follows on: 14 DIRECT EXAMINATION 15 MR. GANER: There was a numerous set of 16 questions so I'll kind of generally start with what I 17 think addresses the questions and then please if I miss 18 something let me know and I'd be glad to answer that as 19 well. 20 But the Kitchen Lights structure and the thing 21 that Furie is pursuing is a pretty significant 22 geological structure that has -- it's along a ridge 23 that connects up the North Cook Inlet field with a 24 saddle in between the two fields and each field is 25 recognizable by a significant structural high that has Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC • 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 20 1 a four-way closure to it which means that it -- from a 2 certain crystal position it goes down in all 3 directions. And then the ridge of course would be 4 something that even if there's a saddle in the ridge it 5 also has some closure as it goes from north -- as you 6 would go across that feature from northwest to 7 southeast. 8 There is significant structuring in the form of 9 reverse and thrust faults which help with -- generally 10 they're recognized as significantly contributing to 11 trapping of reservoirs if there's reservoir 12 depositional sandstones that are superimposed on this 13 structuring. Some faulting and then it's also 14 recognized that there's stratigraphy variations in the 15 thickness and the quality of the sands that could lead 16 and contribute to additional trapping or support the 17 trapping that is initially set up by structuring. 18 So there's significant structure that, you 19 know, obviously some of the majors recognized it and 20 pursued it. 21 The interpretation and the reservoir 22 description is a bit more challenging because it's a 23 classic depositional sandstone, but lithologically it's 24 interbedded with lignites. And the lignites and the 25 interbedding of the lignites with the sandstones -- Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC • 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 21 1 1 sandstone reservoirs, have a tendency to make 2 interpretation of seismic and petrophysics -- that is 3 geophysics and petrophysics a little more challenging. 4 That goes further if you were to also consider that the 5 conic (ph) waters or the waters that naturally occur in 6 the sandstones are fresher in the sense that they're 7 lower in salinity or lower in chloride content. 8 Usually in all the other oil and gas environments 9 higher chloride waters is associated with marine waters 10 which are associated with the organics that provide the 11 hydrocarbons that are in the traps. And so 12 differentiating hydrocarbons from saltwater is easier, 13 is more obvious than it is differentiating hydrocarbons 14 from freshwater so reserve estimates can be 15 additionally on the challenging side just from the fact 16 that there's freshwaters in the sand. Freshwaters 17 because they're not electrolinic (ph) or they're not -- 18 they don't have salinities that make them conduct 19 electricity better and so they serve -- fresher water 20 is more like an insulator which is also more like what 21 oil is, oil is an electric insulator. 22 So basically you have a four-way structure or a 23 very large area and superimposed on that structure are 24 sand, shale and lignite sequences. Those have a 25 tendency -- those are your reservoirs and the tracking Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC • 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 22 1 mechanisms that preserve the reservoirs and those are 2 the targets for oil and gas companies. 3 COMMISSIONER SEAMOUNT: Okay. Mr. Ganer, do 4 you have any knowledge of the production history of the 5 Kitchen Lights unit or should I ask Mr. Webb? 6 MR. GANER: I do have knowledge, but not the 7 working knowledge that Mr. Webb has..... 8 COMMISSIONER SEAMOUNT: Okay. Well..... 9 MR. CANER: .....not the deep roots that he 10 has. 11 COMMISSIONER SEAMOUNT: .....I'll let you guys 12 tag team it then. 13 First of all, Mr. Webb, is it my -- is my 14 understanding correct that the KLU-3 has watered out? 15 MR. WEBB: No, just the top Sterling zone 16 started producing more water than we would like so we 17 shut that zone in and opened a -- now I believe it's a 18 Beluga zone. 19 COMMISSIONER SEAMOUNT: And..... 20 MR. WEBB: Each well was completed in four 21 different zones. 22 MR. GANER: And, Bruce, I'd like to qualify 23 that. You know, that is still to be determined. There 24 are two possibilities, one is that there's 25 communication behind (indiscernible) and the -- where Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email• sahile@gci.net AOGCC • 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 23 1 the gas zone is now in communication with an upper or a 2 lower zone that is wet. The other possibility of 3 course is that that particular zone is depleted and is 4 making water, but several evaluation efforts have been 5 made to determine one or the other and they're all -- 6 they are not definitive. 7 COMMISSIONER SEAMOUNT: Okay. The proposed 8 well, the KLU-A4 is about 15 -- the top of the proposed 9 productive area looks like it's about 1,500 feet from 10 the KLU-3. Is that -- are you anticipating that that 11 well will be structurally higher than the KLU-3? 12 MR. GANER: No. 13 COMMISSIONER SEAMOUNT: No. 14 MR. GANER: Not significantly higher. There is 15 the possibility that it could be higher, but not 16 significantly. 17 COMMISSIONER SEAMOUNT: So will you be 18 targeting -- I mean, it looks like you're drilling 19 quite a ways out laterally, almost a mile, are you 20 going to TD it close to the top of the Tyonek or in the 21 Tyonek or, I mean, what's your main target..... 22 MR. GANER: Yeah. 23 COMMISSIONER SEAMOUNT: .....of this well? 24 MR. GANER: The Sterling and the Beluga again. 25 And they all have to start -- because it's off 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 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 24 1 platform they all have to start at pretty much the same 2 location. But then as you reach out across that 3 structure into areas that appear to be fault separated 4 or stratigraphically and fault separated. So there's 5 -- even though there might -- they might be -- certain 6 zones must be structurally equivalent there are 7 appearances in the seismic, the 3D seismic, that 8 they're not communicating. So, you know, one well that 9 appears to penetrate that sand may not drain certain 10 areas of that equivalent sand..... 11 COMMISSIONER SEAMOUNT: Why has the..... 12 MR. GANER: .....due to fault separation or 13 stratigraphy. 14 COMMISSIONER SEAMOUNT: How much has the KLU 15 produced so far, KLU-3 produced so far? 16 MR. GANER: Approaching 3 bcf. It might be 17 past 3 bcf by now. 18 MR. WEBB: The total production for -- this is 19 Bruce Webb. The total production for both the KLU-3 20 and the A2 is 5.2 bcf. 21 MR. GANER: Oh, okay. 22 CHAIR FOERSTER: From the Beluga..... 23 MR. GANER: I haven't looked at it in a while. 24 CHAIR FOERSTER: .....or can you split it out 25 by reservoir? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 25 1 MR. WEBB: We could get that to you, I don't 2 have it off the top of my head. 3 CHAIR FOERSTER: Okay. 4 COMMISSIONER SEAMOUNT: Do you have maps 5 showing your estimated productive areas of -- well, let 6 me back up. The Sterling exists everywhere, it's a 7 world class reservoir and I doubt if -- it's not going 8 to be in communication with everything out there unless 9 there's a big fault and I'll get to that in a second. 10 Now the Beluga, that's more lenticular and 11 discontinuous and I can see where you could get small 12 pods and big pods of the Beluga in there and you can't 13 anticipate where they're going. When you drilled the 14 Al, I believe it was the Al, you were talking about a 15 fault that -- one of the reasons you gave for asking 16 for a spacing exception and I think for asking for 17 confidentiality as an exploration well, I can't 18 remember, but that was because it was separated by a 19 fault. Do you know -- did you ever see that fault, did 20 it -- was it really separated by a fault? 21 MR. GANER: Well, we've only speculated it's 22 separated by a fault if we thought we saw it in the 23 seismic data. 24 COMMISSIONER SEAMOUNT: Are you confident the 25 seismic data expresses the faults accurately? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email• sahile@gci.net AOGCC 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 2 6 1 1 MR. GANER: We are reasonably confident, you 2 know, seismic data is interpretative. 3 COMMISSIONER SEAMOUNT: The Al is yet to be 4 completed, correct and..... 5 MR. GANER: That's correct. 6 COMMISSIONER SEAMOUNT: .....what are you going 7 to complete that well in? 8 MR. WEBB: That will be completed this year. 9 MR. GANER: Yeah. 10 MR. WEBB: The first. 11 MR. GANER: Yeah. 12 COMMISSIONER SEAMOUNT: In which reservoir? 13 MR. GANER: Well, I'm expecting that we would 14 work that well from the bottom up or that's what I 15 would propose, starting with the Beluga and work our 16 way up. 17 CHAIR FOERSTER: Can I make a suggestion. 18 Could we get a full overview, reservoir by reservoir, 19 of reservoir description, well completions and 20 production history before we go into specific questions 21 on one well or another, would that be a reasonable 22 request? 23 MR. GANER: You mean in this discussion here 24 because there are..... 25 CHAIR FOERSTER: Yeah, can we take -- can Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 2 7 1 1 we..... 2 MR. GANER: .....23 separate sands that are 3 recognized in upwards of around 40 different 4 reservoirs. 5 CHAIR FOERSTER: Well, what I would like is a 6 reasonable discussion of the target reservoirs, the 7 reservoirs that have produced and if you've produced g from 23 different reservoirs, yes, I'd like to hear 9 about them all. 10 MR. GANER: Okay. Well, currently in the KLU-3 11 there were four completions, three of which there were 12 plans to produce commercially. There were two bottom 13 Beluga zones, one pretty much -- they -- and the two 14 were right at a thousand feet apart with numerous thin 15 Beluga zones in between. When you -- when you want to 16 talk about faulting and faulting separating sands, 17 there are thick sands and this includes a good many of 18 the Sterling sands, a thick sand is considered to have 19 about 40 feet of thickness. Some of the upper Sterling 20 sands are quite a bit thicker than that, but the 21 accumulations are actually a bit thinner. The thinner 22 your sands and the thinner amount of pay that you have, 23 you can have reasonably good or adequate faulting and 24 separation with just -- with 30 and 40 foot faults. So 25 many of the faults that would serve as sealing faults Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 28 1 would almost be indistinguishable by the seismic data. 2 The tuning thickness or the interval resolution of the 3 seismic data is more in the neighborhood of 80 feet. 4 Less than 80 feet things are kind of a blur to the 5 seismic data when you're looking at the wave lengths 6 and the frequency data that -- that the -- that is 7 content to the data. So most of these reservoirs that 8 were recognized by well log analysis were kind of 9 grouped together in the seismic signature and it was 10 only the well log data that was able to differentiate 11 those reservoirs further. The requirement for having 12 upwards of around a 80 foot fault also makes it 13 difficult to recognize the smaller faults that can -- 14 that could create separation. 15 CHAIR FOERSTER: So do you have any type logs 16 or structure maps or isopach maps for any of these 17 reservoirs? 18 MR. GANER: Yeah. Or (indiscernible), you know 19 most of the reserves are in the top 12 to 15 reservoirs 20 and those have been extensively mapped by ourselves and 21 the third party reserve booking authority. So, yeah, 22 they're all mapped out to the best of the -- everyone's 23 ability. 24 CHAIR FOERSTER: Well, I guess I was hoping for 25 a better picture that we could understand. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC • 4/6/2017 040: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 29 1 I'd like to take a recess right now. Is that 2 okay with you, Commissioner Seamount? 3 COMMISSIONER SEAMOUNT: I'd like to ask one 4 more question..... 5 CHAIR FOERSTER: Okay. 6 COMMISSIONER SEAMOUNT: .....and then we'll 7 take a recess. 8 CHAIR FOERSTER: Okay. 9 COMMISSIONER SEAMOUNT: Could you give us a 10 typical, possibly average, area of production that 11 we're talking about here. I know that originally there 12 was an announcement of tcf's of gas located on this 13 structure, is that still true or has it gotten 14 significantly smaller? And, Mr. Webb..... 15 MR. GANER: Well, I think you're going to have 16 to look at the source there. I don't believe that was 17 from Furie. I doubt very much that would have been 18 from Furie. To my knowledge -- that certainly didn't 19 come from us and to my knowledge it doesn't come from 20 Furie, those kind of representations. 21 COMMISSIONER SEAMOUNT: Well, I think Mr. Webb 22 was the one that was quoted. 23 MR. WEBB: Yeah, I can add on to that. If -- 24 the original estimates were (indiscernible - away from 25 microphone). We kept log analysis 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 • 4/6/2017 00: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 30 1 CHAIR FOERSTER: Is your bright green light 2 shining? 3 MR. WEBB: The original estimate that was done, 4 I believe it was late 2011 or early 2012, was based on 5 a NUTECH log analysis and it was on the KLU-1 well. 6 And it was a total volumetric analysis of the gas in 7 place, it wasn't anything related to recoverable 8 reserves or producible reserves. And the press release 9 was authorized by our former president, Damon Cade, 10 who's no longer with the company. But we do have that 11 NUTECH log analysis that we can share with you, but 12 since then we've drilled the KLU-3, made a different 13 discovery and we believe the reserves just in this area 14 is in the neighborhood of I believe a half a bcf or, I 15 mean, half a tcf. . 16 Is that correct, Bruce? 17 MR. CANER: No, not by us. I don't know that 18 I'm -- that's more your department, free to relinquish 19 that information, but it's a good bit less than that, 20 less than half a tcf. 21 MR. WEBB: Okay. And that would be the Pl? 22 MR. CANER: That would be P1 and to maybe 23 answer the Commissioner's question about areas, on the 24 P1 side the general, you know, third party opinion and 25 my opinion as well is that the reservoirs have a proved Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 31 1 extent of in the neighborhood of 600 acres, 300 to 600 2 acres depending on which sand you're looking at. The 3 thinner the sand the less likely it's going to cover a 4 larger area. Well control in some of our 5 interpretations suggest that it could -- that area 6 could be extended to about as much as a thousand to 7 1,500 acres. But in order to get that to a proved P1 8 reserve it's going to take additional drilling, well 9 control, coupled with the seismic and performance, you 10 know, just producing these reserves from single sands 11 and that if they last a long time that suggests that 12 they're coming from a greater distance, a greater area. 13 COMMISSIONER SEAMOUNT: Okay. Before -- I have 14 one -- with your permission, Madam Chair. 15 CHAIR FOERSTER: You don't need my permission. 16 COMMISSIONER SEAMOUNT: Have you done any well 17 interference tests on any of these wells out here? 18 MR. CANER: No. 19 COMMISSIONER SEAMOUNT: Are you able to or are 20 they producing from..... 21 MR. GANER: No. 22 COMMISSIONER SEAMOUNT: .....different zones? 23 MR. GANER: No. Unh-unh. 24 COMMISSIONER SEAMOUNT: You're not able to..... 25 MR. GANER: In order to do well interference Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC • 4/6/2017 &0: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 3 2 1 1 testing you have to have kind of like a -- send a 2 signal or a source signal from one well to another 3 through the reservoir so they have to be -- both wells 4 have to be open to the same reservoir. 5 COMMISSIONER SEAMOUNT: And none of these..... 6 MR. GANER: In the..... 7 COMMISSIONER SEAMOUNT: .....wells are open to 8 the same reservoir? 9 MR. GANER: No. The thinking there right now 10 is that the wells are so close together and it would 11 take pretty high angle wells to get them far apart, to 12 take points in the sands. Each well that's drilled 13 will exploit a certain set of reservoirs, will 14 adequately -- so, you know, if there's -- if say 15 there's -- for simplicity purposes there's 12 16 reservoirs. Well, in the interests of time you would 17 drill one well and produce it out of -- produce four 18 reservoirs out of it. You would drill another well and 19 produce four reservoirs out of that. So you would 20 accelerate the reserves of the 12 reservoirs by 21 drilling three reservoirs that would see pretty much 22 the same stuff. Hopefully you drill them so you find 23 additional reserves. But instead of taking three times 24 as long to get the reserves you cut that time in half 25 and that bring value to the whole project sooner, Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email• sahile@gci.net AOGCC • 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 3 3 1 1 generates revenues. 2 CHAIR FOERSTER: Commissioner French, is it all 3 right with you if we take a recess? 4 COMMISSIONER FRENCH: Of course. 5 CHAIR FOERSTER: All right. It is a quarter to 6 10:00, we're going to take a 10 minutes recess and 7 we'll be at five to 11:00. 8 (Off record) 9 (On record) 10 CHAIR FOERSTER: We're coming back on the 11 record at 10:50. Mr. Webb, normally when an 12 operator comes in with a request there's certain 13 information that we expect them to be prepared to 14 provide. And we have a guidance document on our 15 website that helps with that preparation. You guys 16 aren't prepared and we need you to be prepared so that 17 we can make a decision. We're going to continue the 18 hearing until such time as you can be prepared to 19 present us a type log, structure maps, reserve 20 estimates, status and history of each well and other 21 information that is critical to supporting your request 22 and assisting us in making our decision. We urge you 23 to find that guidance document on the website and to 24 talk with our senior staff geologist, Patricia Bettis, 25 to guide you in how to be prepared to conduct 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 4/6/2017 040: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 3 4 1 1 hearing. 2 To allow us to know when to continue it to, 3 please tell me how long you think it will take you to 4 provide this -- to gather up this information and be 5 prepared to provide it and we will continue until that 6 date. 7 MR. WEBB: I was just having that discussion 8 with Bruce Ganer. This is Bruce Webb. And we were 9 just discussing that it might be helpful if we supplied 10 you with the structure maps and the type logs and 11 everything. 12 CHAIR FOERSTER: There's no might about it. 13 MR. WEBB: Yeah. So we believe we could have 14 that information to you by the end of next week. 15 COMMISSIONER SEAMOUNT: Okay. So let me look 16 at my calendar. The end of next week would be the 14th 17 so why don't we continue until the 19th. 18 And bring -- provide that information in a 19 format that you can leave it with us. 20 MR. WEBB: Right. We will do that. 21 CHAIR FOERSTER: Okay. So we'll continue until 22 April 19th at 9:00 a.m. 23 MR. WEBB: Okay. Does that work for you, Bruce 24 Ganer? 25 MR. GANER: April 19th. Yes. I'm actually Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 3 5 1 1 leaving town on the 20th. So, yeah, 19th will be 2 perfect. 3 CHAIR FOERSTER: Okay. Then at five until 4 10:00 this hearing is recessed to be continued at 9:00 5 a.m. on April 19th. 6 (Hearing recessed - 9:55 a.m.) 7 (END OF REQUESTED PORTION) 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 4/6/2017 WO: FURIE OPERATING AK, INC DOCKET No. CO 17-005 Page 3 6 1 1 TRANSCRIBER'S CERTIFICATE 2 I, Salena A. Hile, hereby certify that the 3 foregoing pages numbered 02 through 36 are a true, 4 accurate, and complete transcript of proceedings in 5 Docket No.: CO 17-005, transcribed under my direction 6 from a copy of an electronic sound recording to the 7 best of our knowledge and ability. 8 9 DATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SALENA A. HILE, (Transcriber) Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Docket No. CO 17-005 April 6, 2017 at 9:00 am NAME AFFILIATION Testify (yes or no) A FS • Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket Number: CO-17-005 The application of Furie Operating Alaska Inc. (Furie) for an exception to the spacing requirements of 20 AAC 25.055(a)(4) for the drilling of the Kitchen Lights Unit #A-4 gas well. Furie, by letter dated February 8, 2017, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirement of 20 AAC 25.055(a)(4). The KLU #A-4 spacing exception is needed to increase deliverability from the delineated natural gas reservoirs in support of Furie's southcentral natural gas utility contracts. Kitchen Lights Unit #A-4 Surface Location: 339' FSL, 890' FWL, Section 24, T10N, RI I W, Seward Meridian Bottom -hole Location: 296' FSL, 935' FEL, Section 24, T10N, Rl1W, Seward Meridian The AOGCC has tentatively scheduled a public hearing on this application for April 6, 2017, at 9:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on March 7, 2017. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after March 20, 2017. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on March 21, 2017, except that, if a hearing is held, comments must be received no later than the conclusion of the April 6, 2017 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 March 23, 2017. X Cathy P. oerster Chair, Commissioner Bruce Webb Senior Vice President Furie Operating Alaska, LLC 188 W. Northern Lights Blvd., Ste. 620 Anchorage, AK 99503 �r- Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket Number: CO-17-005 The application of Furie Operating Alaska Inc. (Furie) for an exception to the spacing requirements of 20 AAC 25.055(a)(4) for the drilling of the Kitchen Lights Unit #A-4 gas well. Furie, by letter dated February 8, 2017, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirement of 20 AAC 25.055(a)(4). The KLU #A-4 spacing exception is needed to increase deliverability from the delineated natural gas reservoirs in support of Furie's southcentral natural gas utility contracts. Kitchen Lights Unit #A-4 Surface Location: 339' FSL, 890' FWL, Section 24, T10N, RI 1 W, Seward Meridian Bottom -hole Location: 296' FSL, 935' FEL, Section 24, T1 ON, R11 W, Seward Meridian The AOGCC has tentatively scheduled a public hearing on this application for April 6, 2017, at 9:00 a.m. at 333 West 7t` Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on March 7, 2017. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after March 20, 2017. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7 h Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on March 21, 2017, except that, if a hearing is held, comments must be received no later than the conclusion of the April 6, 2017 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 March 23, 2017. //signature on file// Cathy P. Foerster Chair, 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-17-024 FROM: Alaska Oil and Gas Conservation Commission AGENCY CONTACT: Jody Colombie/Samantha Carlisle DATE OF A.O. 02/13/17 1(907) AGENCY PHONE: 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: Alaska Dispatch News SPECIAL INSTRUCTIONS: PO Box 149001 Anchorage, Alaska 99514 ( LEGAL DISPLAY "Mr- CLASSIFIED 6F OTHER (Specify below) DESCRIPTION PRICE CO-17-005 Initials of who prepared AO: Alaska Non -Taxable 92-600185 SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENT TO: Department of Administration Division of AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 Page 1 of 1 Total Of All Pages $ - REF Tye I Number Amount Date Comments I PVN JADN89311 2 AO AO-17-024 3 4 FIN AMOUNT SY Appr Unit PGM LGR Object FY DIST LIQ 1 17 021147717 3046 17 2 3 5 urchasi ut ri T 1 Purchasing Authority's Signature Telephone Number 1. A.O. an 2. The t to resale. ving agency name must appear on all invoices and documents relating to this purchase. 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 DISTRIBUTION: Division Fiscal/Original AO Copies: Publisher (faxed), Division Fiscal, Receiving Form:02-901 Revised: 2/13/2017 270227 0001400272 $234.08 STATE OFALASKA RECEIVED FEB 17 2017 AOGCC AFFIDAVIT OF PUBLICATION THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch 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 February 15, 2017 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 _� 7�� a Subscribed and sworn to before me t 15th day of February, 2017 Notary Public in and for The State of Alaska. Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket Number: CO-17-005 The application of Furie Operating Alaska Inc. (Furie) for an exception to the spacing requirements of 20 AAC 25.055(a)(4) for the drilling of the Kitchen Lights Unit #A 4 gas well. Furie, by letter dated February 8, 2017, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirement of 20 AAC 25.055(a)(4). The KLU #A-4 spacing exception is needed to increase deliverability from the delineated natural as reservoirs in support of Furie's southcentral natural gas utility contracts. Kitchen Lights Unit #A-4 Surface Location: 339' FSL, 890' FWL, Section 24, T10N, R11W, Seward Meridian Bottom -hole Location: 296' FSL, 935' FEL, Section 24, T10N, R11 W, Seward Meridian The AOGCC has tentatively scheduled a public hearing on this application for April 6, 2017, at 9:00 a.m. at 333 West 7th Avenue Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on March 7, 2017. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after March 20, 2017. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on March 21, 2017, except that, if a hearing is held, comments must be received no later than the conclusion of the April 6, 2017 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearin , contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than March 23, 2017. Published: February 15, 2017 Third Division Anchorage, Alaska MY COMMISSION EXPIRES Notary Public BRITNEY L. THOMPSON My Commission AlaskaState of Expires Feb 23, 2019 //si nature on file// athy P. Foerster Chair, Commissioner Bernie Karl Gordon Severson K&K Recycling Inc. 3201 Westmar Cir. P.O. Box 58055 Fairbanks, AK 99711 Anchorage, AK 99508-4336 George Vaught, Jr. Darwin Waldsmith P.O. Box 13557 P.O. Box 39309 Denver, CO 80201-3557 Ninilchik, AK 99639 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Monday, February 13, 2017 3:09 PM To: aogcc.inspectors@alaska.gov; 'Bender, Makana K (DOA) (makana.bender@alaska.gov)'; 'Bettis, Patricia K (DOA) (patricia.bettis@alaska.gov)'; 'Brooks, Phoebe L (DOA) (phoebe.brooks@alaska.gov)'; Carlisle, Samantha J (DOA); 'Colombie, Jody J (DOA) Oody.colombie@alaska.gov)'; 'Davies, Stephen F (DOA) (steve.davies@alaska.gov)'; Eaton, Loraine E (DOA); Toerster, Catherine P (DOA) (cathy.foerster@alaska.gov)'; 'French, Hollis (DOA)'; Trystacky, Michal (michal.frystacky@alaska.gov)'; 'Guhl, Meredith (DOA sponsored) (meredith.guhl@alaska.gov)'; Kair, Michael N (DOA); 'Link, Liz M (DOA)'; Loepp, Victoria T (DOA); 'Mumm, Joseph (DOA sponsored) Ooseph.mumm@alaska.gov)'; 'Paladijczuk, Tracie L (DOA) (tracie. pa lad ijczu k@a laska.gov)'; 'Pasqua1, Maria (DOA) (maria.pasqual@alaska.gov)'; 'Quick, Michael (DOA sponsored)'; 'Regg, lames B (DOA) Oim.regg@alaska.gov)'; 'Roby, David S (DOA) (dave.roby@alaska.gov)'; 'Schwartz, Guy L (DOA) (guy.schwartz@alaska.gov)'; 'Seamount, Dan T (DOA) (dan.seamount@alaska.gov)'; Singh, Angela K (DOA); 'Wallace, Chris D (DOA) (chris.wallace@alaska.gov)'; AK, GWO Projects Well Integrity, 'AKDCWeIIIntegrityCoordinator'; 'Alan Bailey'; 'Alex Demarban'; 'Alexander Bridge'; 'Allen Huckabay'; 'Andrew VanderJack'; 'Ann Danielson'; Anna Raff; 'Barbara F Fullmer'; bbritch; Becky Bohrer; 'Ben Boettger'; 'Bill Bredar'; Bob; Brandon Viator; 'Brian Havelock'; 'Bruce Webb'; 'Caleb Conrad'; 'Candi English'; Cocklan- Vendl, Mary E; Colleen Miller, 'Connie Downing'; Crandall, Krissell; 'D Lawrence'; 'Dale Hoffman'; 'Dave Harbour'; David Boelens; 'David Duffy'; David House; 'David McCaleb'; 'David McCraine'; 'David Tetta'; 'ddonkel@cfl.rr.com'; 'DNROG Units'; 'Donna Ambruz'; 'Ed Jones'; 'Elizabeth Harball'; Elowe, Kristin; 'Evan Osborne'; Evans, John R (LDZX); 'Gary Oskolkosf'; 'George Pollock'; Gordon Pospisil; Greeley, Destin M (DOR); 'Gretchen Stoddard'; gspfoff, Hurst, Rona D (DNR); Hyun, James J (DNR); 'Jacki Rose'; Jdarlington Oarlington@gmail.com); 'Jeanne McPherren'; 'Jerry Hodgden'; Jill Simek; 'Jim Watt'; Jim White; 'Joe Lastufka'; Joe Nicks; 'John Burdick'; 'John Easton'; John Larsen; 'John Stuart'; Jon Goltz; Josef Chmielowski; 'Juanita Lovett'; 'Judy Stanek'; Kari Moriarty; 'Kasper Kowalewski'; 'Kazeem Adegbola'; 'Keith Torrance'; Keith Wiles; Kelly Sperback; Kevin Frank; Kruse, Rebecca D (DNR); Laura Silliphant (laura.gregersen@alaska.gov); Leslie Smith; Lori Nelson; Louisiana Cutler, 'Luke Keller'; 'Marc Kovak'; Mark Dalton; Mark Hanley (mark.hanley@anadarko.com); 'Mark Landt'; 'Mark Wedman'; 'Mealear Tauch'; 'Michael Bill'; Michael Calkins; 'Michael Moora'; MJ Loveland; mkm7200; Mueller, Marta R (DNR); Munisteri, Islin W M (DNR); nelson; Nichole Saunders; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; 'Paul Craig'; Paul Decker (paul.decker@alaska.gov); 'Paul Mazzolini'; Pike, Kevin W (DNR); Randall Kanady; 'Renan Yanish'; 'Richard Cool'; 'Robert Brelsford'; 'Ryan Tunseth'; Sara Leverette; 'Scott Griffith'; Shahla Farzan; Shannon Donnelly; Sharmaine Copeland; 'Sharon Yarawsky'; Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); 'Stephanie Klemmer'; 'Stephen Hennigan'; Sternicki, Oliver R; Steve Moothart (steve.moothart@alaska.gov); 'Steve Quinn'; 'Suzanne Gibson'; 'Tamera Sheffield'; 'Ted Kramer'; 'Teresa Imm'; 'Thor Cutler'; 'Tim Jones'; 'Tim Mayers'; 'Todd Durkee'; 'trmjrl'; 'Tyler Senden'; Umekwe, Maduabuchi P (DNR); 'Vinnie Catalano'; 'Well Integrity'; 'Well Integrity'; 'Weston Nash'; 'Whitney Pettus'; 'Aaron Gluzman'; 'Aaron Sorrell'; Ajibola Adeyeye; Alan Dennis; Assmann, Aaron A; Bajsarowicz, Caroline J;'Bruce Williams'; Bruno, Jeff J (DNR); Casey Sullivan; Catie Quinn; 'Don Shaw'; Eric Lidji; Garrett Haag; 'Graham Smith'; Hak Dickenson; Heusser, Heather A (DNR); Holly Fair, Holly Pearen; Jamie M. Long; 'Jason Bergerson'; Jesse Chielowski; 'Jim Magill'; Joe Longo; John Martineck; Josh Kindred; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck, Marcia Hobson; 'Marie Steele'; Matt Armstrong; 'Mike Franger'; Morgan, Kirk A (DNR); Pascal Umekwe; Pat Galvin; 'Pete Dickinson'; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; 'Ryan Daniel'; 'Sandra Lemke'; 'Susan Pollard'; Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); 'Wayne Wooster'; 'William Van Dyke' Subject: Public Notice (Furie) • ! Attachments: CO-17-005 Public Hearing Notice.pdf Re: Docket Number: CO-17-005 The application of Furie Operating Alaska Inc. (Furie) for an exception to the spacing requirements of 20 AAC 25.055(a)(4) for the drilling of the Kitchen Lights Unit #A-4 gas well. Furie, by letter dated February 8, 2017, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirement of 20 AAC 25.055(a)(4). The KLU #A-4 spacing exception is needed to increase deliverability from the delineated natural gas reservoirs in support of Furie's southcentral natural gas utility contracts. Jody J. Colombie .AOGCC Special.Assistant .Alaska Oil and Gas Conservation Commission 333 'Nest 7'ti .Avenue .Anchorage, .Alaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 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 Jody Colombie at 907.793.1221 or iodv.colombie@alaska.gov. F U R I E Operating Alaska LLC Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, AK 99501 February 8, 2017 Re: Application for Well Spacing Exception Kitchen Lights Unit #A-4 Gas Well FEB 0 8 2017 Pursuant to 11 AAC 25.055 (d), Furie Operating Alaska, LLC ("Furie") hereby requests approval to allow the drilling of the KLU #A-4 gas well within 3,000 feet of other existing gas wells from the Julius R. Platform located in the mid -Cook Inlet. Attached is a plat depicting the location of this proposed well. The KLU #A-4 will be targeting gas in the Sterling and Beluga Formations. This well is needed to increase deliverability from the delineated natural gas reservoirs in support of Furie's south- central natural gas utility contracts. The closest wells to the proposed KLU #A-4 are the KLU #3 and the KLU #A-2A having the same surface location at the Julius R. Platform. The proposed bottom -hole location of the KLU #A-4 is approximately 3,453 feet to the east of the KLU #3, and the top of the proposed perforations being approximately 1,625 feet to the east of the KLU #3. The proposed bottom hole location of the KLU #A-4 is approximately 3,120' southeasterly of the KLU #A-2A and the proposed perforations being approximately 2,185' south of the KLU # A-2A. Please see the attached plat of the KLU #A-4. At this time, the KLU #3 and the KLU A-2A wells are the only wells capable of producing within several miles. Cornucopia Oil and Gas, LLC is the lessee and- Furie is the Unit Operator of the Kitchen Lights Unit and all surrounding oil and gas leases and adjoining governmental sections. The only affected landowner of this application for exception is the Department of Natural Resources ("DNR"). The Notice required by AOGCC regulation has been sent to the DNR and the Affidavit attesting to this and the other facts contained herein is attached. Should questions arise in connection with this request, please contact Mr. David McCraine in the Lafayette, LA office at (337) 981-0270. Respectfully Submitted By, Bruce Webb Senior Vice President Attachments Furie Operating Alaska LLC 1 188 W. Northern Lights Blvd., Suite 620 1 Anchorage, AK 99503 1 Office 907-277-3726 NOTICE OF APPLICATION FOR WELL SPACING EXCEPTION Kitchen Lights Unit #A-4 Gas Well Furie Operating Alaska, LLC has applied for an exception to the well spacing requirements, pursuant to the Alaska Oil and Gas Conservation Commission regulations [11 AAC 25.055(d)]. The proposed well is located in Section 24, Township 10 North, Range 11 West, of the Seward Meridian, within the Corsair Block of the Kitchen Lights Unit ("KLU"). The KLU #A-4 well is planned to be drilled from the Julius R. Platform to a proposed bottom hole location that is approximately 296 feet from the south section line and 935 feet from the east section line within Section 24. The proposed top of perforations are approximately 262 feet from the south section line and 2,639 feet from the east section line within Section 24. See the attached Plat. The nearest wells currently capable of production from the same reservoir(s) are: Kitchen Lights Unit #3 (KLU #3) Bottom hole located approximately 3,455 feet easterly from KLU #3 Top of perforations located approximately 1,625 feet northeasterly from KLU #3 Kitchen Lights Unit #A-2A (KLU#A-2A) Bottom Hole located approximately 3,120' southeasterly from KLU # A-2A Top of production located approximately 2,185' south from KLU # A-2A There are no other wells currently capable of production within two miles of the proposed KLU #A-4 gas well. Cornucopia Oil and Gas Company, LLC is the majority working interest owner of the lease and Furie Operating Alaska, LLC is the Unit Operator of the Kitchen Lights Unit. A complete list of the working interest owners and their interests is attached as Exhibit A. The oil and gas lessor is the State of Alaska, Department of Natural Resources ("DNR"). The address of record for the DNR is: Department of Natural Resources Division of Oil and Gas 550 W. 7th Avenue, Suite 1100 Anchorage, AK 99501 Attn: Chantel Walsh Director There are no other affected owners, landowners, lessees or operators within two miles of the proposed KLU #A-4 gas well. The Application for Exception is attached to this Notice. Dated this 8th day of February, 2017, in Anchorage, Alaska. Furie Operating Alaska LLC 1 188 W. Northern Lights Blvd., Suite 620 1 Anchorage, AK 99503 I Office 907-277-3726 EXHIBIT A Kitchen Lights Unit Working Interest Ownership Cornucopia Oil and Gas Company, LLC 78.999000 % 188 W. Northern Lights Blvd. Suite 620 Anchorage, AK 99503 A. L. Berry 7.875000 % 5005 Riverway, Suite 440 Houston, TX 77056 Danny S. Davis 6.875000 % 5005 Riverway, Suite 440 Houston, TX 77056 Taylor Minerals, LLC 5.250000 % 4119 Montrose, Suite 400 Houston, TX 77006 Furie Operating Alaska, LLC 1.000000 % 188 W. Northern Lights Blvd Suite 620 Anchorage, AK 99503 0.001000 % Corsair Oil and Gas, LLC 188 W. Northern Lights Blvd Suite 620 Anchorage, AK 99503 Furie Operating Alaska LLC 1 188 W. Northern Lights Blvd., Suite 620 1 Anchorage, AK 99503 I Office 907-277-3726 15 14 13 18 PJth 114 I NE 1 /4 K'_U-A2 22 Kitchen Lights Unit #A4 _ 19 Well Surface (Slot C) —07 ,?L --_. NAD27 Alaska Zone 4 Feet ; x : 294,325.85 2638.61 ' Y: 2,536 , 1121.20 -- _ i Lat: 60°56'12.0997"N S'Ai 1/4 Lon: 151°09'23.1251•W l SE 890.37' NAD83 - - - - - S88 ° 16' 40. 48' E l >a l 934.57 Lat : 60°56'10.0908"N 3455.06' Lon : 151"09'31.1922"W KLU-3 KLU-A4 BH 38.96' . �— � KLU-1 t I S86°29'34.46"E LO 1752.43' k U-A. _> r? E0 CV 1p N N z Target 4050sstvd Kitchen Lights Unit #A4 ^ 27 Top of Production Proposed Bottom Hole NAD27 Alaska Zone 4 Feet 1 NAD27 Alaska Zone 4 Feet 30 I X : 296,075.00 !, X : 297,779.35 I Y : 2,536,014.00 ' ly: 2,536,017.37 Lat : 60'56'11.3468"N } Lat : 60°56'11.6723"N I Lon: 151 °O8'47.6903"W : Lon: — 151 °08.132014"_W NAD83 ._. .._....-. I f NAD83 ...1 Lon: 151 °OB'55.7571 "W Lon: 151 °OS'21.2680'1N i T n Y Z V KLU-2 34 35 36 31 I HEREBY CERTIFY THAT THE ABOVE WELL NOTES F U R I E SURFACE LOCATION IS CORRECT. 1. COORDINATES TRANSFORMED USING \ NADCON (ALASKA). Operating Alaska LLC OF q• �, 2. THIS DRAWING IS NOT FOR NAVIGATION, ONLY WELLS IN THE IMMEDIATE VICINITY OF I•� • .s �, THE SURVEYED WELL ARE SHOWN. PROPOSED LOCATION �'S; • ••;i,� 3. AKCS27 DENOTES ALASKA COORDINATE KITCHEN LIGHTS UNIT #A-4 49TM SYSTEM OF 1927. �* • �; �/ 4. SECTION 24, TOWNSHIP 1ON RANGE 11W, ADL #3891 97 • SEWARD MERIDIAN IS WITHIN THE ALASKA �'�"••'• •••'I••••••••.••..../ STATE WATERS OF COOK INLET SE 1/4 OF SECTION 24, TOWNSHIP 1ON, RANGE 11W / (2.Itmg � 5. SECTION LINE OFFSETS COMPUTED FROM SEWARD MERIDIAN, ALASKA •••••u•u•..••.•.•.....••.••PROTRACTED SECTION CORNER VALUES. • 6. BOTTOM HOLE INFORMATION PROVIDED BY �f :• MarkKeith8uhrkeOP �CLIENT AND DOES NOTREPRESENTAFUGRO CHANCE INC.+• iVO. 12658 / FUGRO CHANCE FIELD SURVEY.•200 Dukee Drive Lafayette, Louisiana 70506 (337) 237-1303 N•`•,••••••••• GeodeGcDatum: NAD27 0 2000 1, - ,�� Grid Ulncts: US SURVEY FEET SC ��E F FEET Job No.: 16MBOB Date: 11/30/16 Drwn: BCN Chart: Of: MARK KEITH BUHRKE RPLS *12656 1 1 STATE OFALASKA DWG File: H:12016\16008081GIS\ \Cooklnlet_Sec24-T1ON-R11... 12p„ems AFFIDAVIT IN SUPPORT OF THE NOTICE OF APPLICATION FOR WELL SPACING EXCEPTION Kitchen LiLyhts Unit #A-4 Gas Well I, Bruce Webb, Senior Vice President of Furie Operating Alaska, LLC hereby certifies that the required information, data and geographic portrayals contained in the Notice of Application for Well Spacing Exception, pursuant to the Alaska Oil and Gas Conservation Commission regulations [I1 AAC 25.055(d)], for the above referenced well, dated February 8, 2017, are true and correct to the best of my knowledge. By. v �/ Bruce Webb Senior Vice President IN THE UNITED STATES OF AMERICA ) �*j STATE OF ALASKA Dated This certifies that on the 8th day of February, 2017 before me a notary public in and for the State of Alaska, duly commissioned and sworn, personally appeared Bruce Webb, 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. subbed an_Mom to before ms thie of 20_i tG Srtdth, Notary PtM Wcowm LML � 1� mr Furie Operating Alaska LLC 1 188 W Notary of Public �p My Co F,vrri7""�. ! b NOT;�; _ PU U poMrf Vt ;;A Ese�?r� Nov 14, 201t3 Northern Lights Blvd., Suite 620 1 Anchorage, AK 99503 1 Office 907-277-3726 • • FURZE Operating Alaska LLC February 8, 2017 Chantel Walsh, Director State of Alaska Department of Natural Resources Division of Oil and Gas 550 W. 7th Avenue, Suite 1100 Anchorage, Alaska 99501 Certified Mail No. 7012 3460 0003 2493 2660 Subject: Kitchen Lights Unit Spacing Exception Applications Dear Director Walsh: Attached please find AOGCC Spacing Exception Applications for KLU #A-4. Should you have any questions, please contact Mr. David McCraine at 337-981-0270. Thank you, Bruce Webb Senior Vice President Furie Operating Alaska, LLC Furie Operating Alaska LLC 1 188 W. Northern Lights Blvd., Suite 620 1 Anchorage, AK 99503 1 Office 907-277-3726 3 SENDER: COMPLETE THIS SECTION OR, " COMPLETE TH IS SECTION ON DELIVERY ■ Complete items 1, 2, and 3. Also complete A. Signature El Agent item 4 if Restricted Delivery is desired. X ❑ Addressee ■ Print your name and address on the reverse so that we can return the card to you. B. Received by (Printed Name) C. Date of Delivery ■ Attach this card to the back of the mailpiece, or on the front if space permits. D. Is delivery address different from item 1? El Yes 1. Article Addressed to: If YES, enter delivery address below: ❑ No srttu tip A-91C A6KA Dt4z T)jR0D7— l;Jft,—SA % 550 14- -7=" A*, ,S Ito 0 c-'fic> v —,erf 9S6 ( 3. Service Type ' ❑ Certified Mail® ❑ Priority Mail Express- 0 Registered ❑ Return Receipt for Merchandise ❑ Insured Mail ❑ Collect on Delivery 4. Restricted Delivery? (Extra Fee) ❑ Yes 2. Article Number 7012 3460 0003 2493 2660 (transfer from service label) PS Form 3811, July 2013 Domestic Return Receipt 0 0 .. .......... i information ru ru C1 A rIIIIII� rn rn n, Ir Postage $ ni ru Certified Fee m rn Postmark 0 M Return Receipt Fee Here p p (Endorsement Required) C O Restricted Delivery Fee r � C3 (Endorsement Required) Is Total Postage & Fees �•� nrn m Sent To ._._._ ru �� //� N r1 0 I r� C3 4�. r�? ..T`!_4£ ----- — - - Street, Apt. No.; ......,... - - �� N lti or PO Box No. - ----------------------------------------------- ............... ........... City, State, ZIP+4 PS Form :00 August 2006 See Reverse for Instructions • FURIE Operating Alaska LLC Certified Mail No. 7012 3460 0003 2493 2677 February 8, 2017 A. L. Berry 5005 Riverway, Suite 440 Houston, TX 77056 Subject: Kitchen Lights Unit Spacing Exception Applications Dear Mr. Berry: Attached please find AOGCC Spacing Exception Applications for KLU #A-4. Should you have any questions, please contact Mr. David McCraine at 337-981-0270. Thank you, i Bruce Webb Senior Vice President Furie Operating Alaska, LLC Furie Operating Alaska LLC 1 188 W. Northern Lights Blvd., Suite 620 1 Anchorage, AK 99503 1 Office 907-277-3726 Ll 0 ■ Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: A L . �b �� So®S Z1OcCer�-a�'f �2. `-r-T 1167-, (ems a ),Tx' 770.5(�2 A. Signature X ❑ Agent ❑ Addressee B. Received by (Printed Name) C. Date of Delivery D. Is delivery address different from item 1? ❑ Yes If YES, enter delivery address below: ❑ No 3. Service Type ❑ Certified Mail® ❑ Priority Mail Express- 0 Registered ❑ Return Receipt for Merchandise ❑ Insured Mail ❑ Collect on Delivery 4. Restricted Delivery? (Extra Fee) ❑ Yes 2. Article Number 7012 3460 0003 2493 2677 (Transfer from service label) PS Form 3811, July 2013 Domestic Return Receipt i Postal CERTIFIED MAIL. RECEIPT r*,- 1 (Domestic Mail Only; No Insurance Coverage Provided) ruFICIA L USG Q —� �- I �- Postage $ r ru ru Certified Fee M M Postmark C3 [7 Return Receipt, Fee Here C3 p (Endorsement Required) M M Restricted Delivery Fee (Endorsement Required) - C3 0 �rir• ..O ..� _- Total Postage & Fees r_ri.�.ra M m ru ru Sent To /► H .�� r-q , Street, Apt No.; CO O or PO Box No. (` r` -------------------------------------- City, State, ZIP+4 PS Form :00 August 2006 See Reverse for Instructions • F U R I E Operating Alaska LLC Certified Mail No. 7012 3460 0003 2493 2684 February 8, 2017 Danny S. Davis 5005 Riverway, Suite 440 Houston, TX 77056 Subject: Kitchen Lights Unit Spacing Exception Applications Dear Mr. Davis: Attached please find AOGCC Spacing Exception Applications for KLU #A-4. Should you have any questions, please contact Mr. David McCraine at 337-981-0270. Thank you, Bruce Webb Senior Vice President Furie Operating Alaska, LLC Furie Operating Alaska LLC 1 188 W. Northern Lights Blvd., Suite 620 1 Anchorage, AK 99503 1 Office 907-277-3726 E ■ Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: 5-00S7 {-,00 s`r 6,) t Tye -7-7oS� A. Signature X ❑ Agent ❑ Addressee B. Received by (Printed Name) C. Date of Delivery D. Is delivery address different from item 1? ❑ Yes If YES, enter delivery address below: ❑ No 3. Service Type ❑ Certified Mail® ❑ Priority Mail Express'" ❑ Registered ❑ Return Receipt for Merchandise ❑ Insured Mail ❑ Collect on Delivery 4. Restricted Delivery? (Extra Fee) ❑ Yes 2. Article Number 7012 3460 0003 2493 2684 (rransfer from service label) PS Form 3811, July 2013 Domestic Return Receipt ro CO _a ..A ru rtJ m m m = Postage $ rlJ ru Certified Fee m m O Q Return Receipt Fee C3 E7 (Endorsement Required) C] E] Restricted Delivery Fee (Endorsement Required) Total Postage & Fees m m Postmark Here ru ru Sent TT, ri �t41'trr �------------------------------------------•-- E3 p Street, Apt. No.; I � r` or PO Box No. City, State, ZIP+4 SUU, August 2UUt • FURIE Operating Alaska LLC Certified Mail No. 7012 3460 0003 2493 2691 February 8, 2017 Robert G. Taylor, II Taylor Minerals, LLC 5005 Riverway, Suite 440 Houston, TX 77056 Subject: Kitchen Lights Unit Spacing Exception Applications Dear Mr. Taylor: Attached please find AOGCC Spacing Exception Applications for KLU #A-4. Should you have any questions, please contact Mr. David McCraine at 337-981-0270. Thank you, Bruce Webb Senior Vice President Furie Operating Alaska, LLC Furie Operating Alaska LLC 1 188 W. Northern Lights Blvd., Suite 620 1 Anchorage, AK 99503 1 Office 907-277-3726 0 �J ■ Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: 2, G►. —reli f" 1- ft- f l,,aCL /V1 (. 3 aW--W-S j U, C- If I g /u1a..-cRas€ IP460 `4av s-r�.�, �Tx 77o c�( A. Signature X ❑ Agent ❑ Addressee B. Received by (Printed Name) C. Date of Delivery D. Is delivery address different from item 19 ❑ Yes If YES, enter delivery address below: ❑ No 3. Service Type ❑ Certified Mail® ❑ Priority Mail Express" ❑ Registered ❑ Return Receipt for Merchandise ❑ Insured Mail ❑ Collect on Delivery 4. Restricted Delivery? (Extra Fee) ❑ Yes 2. Article Number (Transfer from service label) PS Form 3811, July 2013 Domestic Return Receipt .l ru m a- r1J m C3 E3 C3 C3 m ru r-i C3 Lti r'4 r�nsurance (Domestic • Coverage Provided) Er Cr a rl For delivery information visit our website at www.usps.comll— ru ru USE mmOFFIC.IAL �� Postage $ ru rU Certified Fee m m Postmark �.�. C3 C3 Return Receipt Fee Here C3 C3 (Endorsement Required) ��. C3 p Restricted Delivery Fee — C3 C3 (Endorsement Required) 1 —0 —B = --I- Total Postage & Fees Is I wnwmmw� m rn Sent To �r G -V� �iy rl ri ......... . - 1G_--------------------------------------- r�� p ® Apf. No.; street, A �� r%- r�- or PO Box No. ' ------`------- City, State, ZIP+4 :rr August 2006 See Reverse for InstructiorS • FURIE Operating Alaska LLC Certified Mail No. 7012 3460 0003 2493 2707 P lt4o -z4;L I U HZ-1'9 February 8, 2017 David Elder � qii Cornucopia Oil and Gas Company, LLC Corsair Oil and Gas, LLC 188 W. Northern Lights Blvd. Blvd Suite 620 Anchorage, AK 99503 Subject: Kitchen Lights Unit Spacing Exception Applications Dear Mr. Elder: Attached please find AOGCC Spacing Exception Applications for KLU #A-4. Should you have any questions, please contact Mr. David McCraine at 337-981-0270. Thank you, "��C.4- 0666- Bruce Webb Senior Vice President Furie Operating Alaska, LLC Furie Operating Alaska LLC 1 188 W. Northern Lights Blvd., Suite 620 1 Anchorage, AK 99503 I Office 907-277-3726 • • ■ Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: lam. uMT C-Z--.I>6-91-- c4pe,.140c6IA a4C, Cgj(LC- co�SlPn ,z 6 t C Col L L L. �4o ,,-j kKs i,(, 0 by (Printed Name) I C. Dale of D. Is delivery address different from item 1? ❑ Yes If YES, enter delivery address below: 1:&<O 3. Service Type *}(),.M ,.p ❑ Certified M it ❑ Priority Mail Express" ❑ Registered ❑ Return Receipt for Merchandise ❑ Insured Mail ❑ Collect on Delivery 4. Restricted Delivery? (Extra Fee) ❑ Yes 2. Article Number 7012 3460 0003 2493 2707 (transfer from service label) - --- PS Form 3811, July 2013 Domestic Return Receipt r- rti (Domestic• . r%-- f`- For delivery information visit our website at www.usps.com� i m m ( t1' -r o rU p = r'u Postage $ ter_ �L Certified Fee m l3 m l3 Return Receipt Fee Postmark Here G7 E3 (Endorsement Required) 0 0 Restricted Delivery Fee C:] C3 (Endorsement Required) Total Postage & Fees �..�� m m o� rlJ fu Sent To rq E3 r—1 C3Street, ......Kt1pt-- ---- Apt. IVo.; or PO Box N-- j� / / City, ------Z1P+ 11 { j City, State, ZIP+4 :00 August 2006 See Reverse for lnstructiorrs� Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. I Print your name and address on the reverse so that we can return the card to you. f Attach this card to the back of the mailpiece, or on the front if space permits. Article Addressed to: -9:4 N sr�-c.: 0% Ar. ti: Dmiz t V aeCTOV_ GJM-Sly .550 W. 7=" nVCF._�LTq (too A. s • 13 Am B. t rated Name) C.to C ^Q � ivory address different from item l? ❑ Yes # , If YES, enter delivery address below: ❑ No ' • FE17BU 14 2012 M Complete items 1, 2, and 3. Also complete A. Sig (t(-(- i item 4 if Restricted Delivery is desired. X ❑ Agent ■ Print your name and address on the reverse !TI, ❑ Address �ry so that we can return the card to you. B. Received byF(Printed Name) C. Date of Delive r Attach this card to the back of the mailpiece, or on the front if space permits. t 1. Article Addressed to: D. Is delivery address different from item 1? ❑ Yes If YES, enter delivery address below: ❑ No }-,sr -rx -7 70S� C.Aw> "er 3. Service Type 3. Service Type - ❑ Certified Mail* ❑ P*x* Mail Express- ❑ Certified Mail® ❑ Priority Mail Express- f f nsured Collect II� I�IIlIIII�I Illlll (��II'�II ❑Registered ❑ Return Receipt for Merchandi �� III IIIII IIIIIINI�I IIII�I I�ILII�I�I'�II ❑ Mail ❑ DeliiveryMerchandise 11 IIII'I l 11 I ❑Insured Mail ❑ Collect on Delivery 4. Restricted Delivery? (Extra Fee) ❑ Yes 4. Restricted Delivery? (Extra Fee) ❑ Yes ?. Article Number (nansfer from service labeo 7012 3460 0003 2493 2. Article Number 2660 (Transfer from service labs!) 7012 3460 0003 2493 2684 'S Form 3811. July 2013 Domestic Return Receipt PS Form 3811, July 2013 Domestic Return Receipt Complete items 1, 2, and 3. Also complete item 4 if Restricted Delivery is desired. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, AlIft the front if space permits. A. Sign 2- V`Q- 1- r 0 Complete items 1, 2, and 3. Also complete ❑t item 4 If Restricted Delivery is desired. X ` ❑ Addressee V Print your name and address on the reverse B. Received by (Printed Name) C. Date of Delivery en that WA nnn raft rrn them ram to vou. D L.de6v dd different from item 1? ❑Yes -- I IuI11 11 II (IIIIIIII�) II I'I I'll�l I'��1� B ceTved by (Printed Name) C. Date of Deliv rewiag "err-e:5 D. Is delivery address different from item 1? ❑ Yes t. Addressed to: - ., erya roes If YES, enter delivery address below: ❑ No 1' If YES, enter delivery address below: ❑ No k4 Soo.S ZiQeeP.4YZ'Z (At.iSrmz,Tk 770.50 �,.,/T� 3. Service Type StXP°r is +. (C( 144o.,TR�SE 3. Service Type ❑ Gertified MaiIO ; ❑ Priority Mall Express" . 7 /� 0 �`F� J S�r� 7 ❑Certified Mailer ❑Priority Mail Express" I i ❑ Registered ❑ Return Receipt for Merchandise . ' ` ❑Registered [3 Return Receipt for Merchant I�' II��II�II IIIIIIIII� I�II,1 I�u'I I�I��II ❑ Int�) Delivery ❑ Insured Mail 0 Collect Delivery 4. Restricted Delivery? (Extra Fee) ❑ Yes i� 11 I II'' k 4st� Delivery? (�[3Yes 3. Article Number 7012 3460 0003 2493 2677 a 2. Article Number 7012 3460 0003 2493 2691 (Frgnsfer from service fabelJ _ ____ _ .. rerfsfer from service - 'S Form 3811, July 2013 Domestic Return Receipt iP 1'',• 26Domestic Return Receipt