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Home My WebLink AboutCO 716Ima_ Project Order File Cove age XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. Co Z\lQ Order File Identifier Organizing (done) RESCAN ❑ Color Items: ❑ Greyscale Items: ❑ Poor Quality Originals: ❑ Other: NOTES: BY: Angela Project Proofing F1 Two-sided DIGITAL DATA ❑ Diskettes, No. ❑ Other, No/Type: ✓ Date: (,-,L{-2co1S OVERSIZED (Scannable) ❑ Maps: ❑ Other Items Scannable by a Large Scanner OVERSIZED (Non -Scannable) ❑ Logs of various kinds: ❑ Other: diiumiiiii BY: Angela ✓ Date: /s/ Scanning Preparation x 30 = + = TOTAL PAGES 2 t3 (Count does not include cover sheet) BY: Angela ✓ Date: (�- �{ - 20 Ir, /s/ (2< Production Scanning III II'III VIII II III Stage 1 Page Count from Scanned File: '--kLk (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: YES NO BY: Angela ✓ Date: (�- �{ - 201 �j /s/ Ck` Stage 1 If NO in stage 1, page(s) discrepancies were found: YES NO BY: Angela Date: /s/ Scanning is complete at this point unless rescanning is required. II I II'I II I II II I I III Rescanned III 111111 VIII V III BY: Angela Date: /s/ Comments about this file: Quality Checked III (1'111 III IIII III 2/27/2015 Orders File Cover Page INDEX CONSERVATION ORDER NO. 716 Swanson River Field Swanson River Unit Soldotna Creek Unit Sterling/Upper Beluga Gas Pool Beluga Gas Pool Tyonek Gas Pool Kenai Peninsula Borough, Alaska 1. October 24, 2014 Hilcorp Alaska, LLC (Hilcorp)'s request to amend CO 123B (superseded on 1/6/2015) 2. November 19, 2014 Notice of Public Hearing, Affidavit of Publication, email distribution, mailings 3. December 23, 2014 Emails between Hilcorp and AOGCC re: Application 4. January 15, 2015 Transcript, sign -in sheet, exhibit — Swanson River Gas Pool Rules 5. January 16, 2015 Hilcorp's revised, post -hearing request to amend CO 123B 6. April 24, 2015 Hilcorp's request for administrative approval to correct the vertical limits of the gas pools (CO 716.001) INDEX CONSERVATION ORDER NO. 716 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC for an amendment to Conservation Order 123B for the classification of three new gas pools and to prescribe pool rules for development of the Sterling/Upper Beluga Gas Pool, Beluga Gas Pool, and Tyonek Gas Pool, Swanson River Field, Kenai Peninsula Borough, Alaska IT APPEARING THAT: Docket Number: CO -14-030 Conservation Order No. 716 Swanson River Field Swanson River Unit Soldotna Creek Unit Sterling/Upper Beluga Gas Pool Beluga Gas Pool Tyonek Gas Pool Kenai Peninsula Borough, Alaska April 17, 2015 1. By application dated October 24, 2014, Hilcorp Alaska LLC (Hilcorp), in its capacity as operator of the Swanson River Field, requested an amendment to Conservation Order No. 123B (CO 123B) to define three new gas pools, the Sterling/Upper Beluga Gas Pool, the Beluga Gas Pool, and the Tyonek Gas Pool, within the Swanson River Field and prescribing rules governing the development and operation of these pools. 2. Pursuant to 20 AAAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) tentatively scheduled a public hearing for January 15, 2015. On November 20, 2014, the AOGCC published notice of the opportunity for that hearing on the State of Alaska's Online Public Notice website and on the AOGCC's website, electronically transmitted the notice to all persons on the AOGCC's email distribution list, and mailed printed copies of the notice to all persons on the AOGCC's mailing distribution list. On November 21, 2014, the AOGCC published the notice in the Anchorage Dispatch News. 3. No protest to the application or request for hearing was received. 4. The hearing commenced at 9:OOAM on January 15, 2015, in the AOGCC's offices located at 333 West 7th Avenue, Anchorage, Alaska. 5. Testimony was received from representatives of Hilcorp. 6. The record was held open until January 22, 2015, to allow the operator to respond to requests made during the hearing. 7. Hilcorp provided the requested additional information on January 16, 2015. FINDINGS: Operator: Hilcorp is the operator of the Swanson River Field, which is located on the east side of the Cook Inlet, Kenai Peninsula Borough, Alaska. The northern two-thirds of the Swanson River Field are also known as the Swanson River Unit, and the southern one-third of the field is also known as the Soldotna Creek Unit. Conservation Order 716 April 17, 2015 Page 2 of 5 2. Affected Area: The proposed Affected Area is the same as the Affected Area defined in Conservation Order No. 123B, which is coincident with the current boundaries of the Swanson River Field. 3. Owners and Landowners: Hilcorp is owner of the Swanson River Field. The U.S. Department of the Interior, Bureau of Land Management (BLM) and Cook Inlet Region, Inc. (CIRI) are landowners for the Swanson River Field. A single pooling agreement governs Swanson River Field.' 4. Regulatory History: Conservation Order No. 5, issued November 25, 1960, approved a spacing pattern of 80 acres per well for reservoir development wells drilled in all pools of the Hemlock Zone within the limits of the Swanson River Field for a period of 18 months. Conservation Order No. 8, approved May 11, 1962, established the permanent spacing pattern of 80 acres per well for the Hemlock Zone within the field. Conservation Order No. 9, approved May 11, 1962, authorized injection of natural gas for pressure maintenance purposes into the Hemlock Zone of the Swanson River Field through specified wells. Conservation Order No. 123 (CO 123), approved August 23, 1973, defined the Hemlock Oil Pool within the Swanson River Field as all intervals that correlate with the interval from 10,230' to 10,585' measured depth in SOCAL's Soldotna Creek Unit 41-4 well and established pool rules to govern development. CO 123 Rule 5, Spacing Acreage, specified not more than two completed wells in any governmental quarter section, and Rule 6 specified that that no well shall be completed less than 500' from the exterior boundary of the Swanson River Field Working Interest Agreement Area. Between 1974 and 1982, eight Administrative Approvals were issued granting exceptions to CO 123 Rule 5, Spacing Acreage. Conservation Order No. 123A (CO 123A), approved December 5, 1995, expanded the Hemlock Oil Pool vertically to all intervals that correlate with the interval from 10,085' to 10,815' measured depth in SOCAL's Soldotna Creek Unit 41-4 well. The expanded pool includes the overlying G Zone of the Tyonek Formation and the underlying lower Hemlock sands H 11 through H 15. CO 123A did not alter the well spacing requirements of CO 123. Between 2000 and 2012, three Administrative Approvals were issued granting exceptions to CO 123A Rule 5, Spacing. CO 123B approved August 28, 2013, removed the inter -well spacing requirements for the Hemlock Oil Pool and revised the rule governing administrative actions to be consistent with the AOGCC's current practices on administrative actions. For all other hydrocarbon -bearing horizons within the Swanson River Field, statewide regulation 20 AAC 25.055 governs well spacing and specifies notification by certified mail of potentially affected owners, landowners and operators when a proposed well location will not conform to property -line setback requirements. 5. Pool Identification: Hilcorp proposes defining three new gas pools in Swanson River Field, which correspond with existing gas participating areas. The proposed pools are: a. The Sterling/Upper Beluga Gas Pool, which would include all intervals that correlate with the interval 2,140 feet true vertical depth (TVD) to 4,490 feet TVD in the Soldotna Creek Unit 41-4 well. b. The Beluga Gas Pool, which would include all intervals that correlate with the interval 4,490 feet TVD to 5,120 feet TVD in the Soldotna Creek Unit 41-4 well. Pooling Agreement for the Swanson River Field, Alaska; U.S. Department of the Interior, Geological Survey, Memorandum to Chief, Branch Oil & Gas Operations, dated December 28, 1964 Conservation Order 716 April 17, 2015 Page 3 of 5 c. The Tyonek Gas Pool, which would include all intervals that correlate with the interval 5,120 feet TVD to 10,085 feet TVD in the Soldotna Creek Unit 41-4 well. 6. Geology: a. Stratigraphy: i. Sterling/Upper Beluga Gas Pool: Within the Swanson River Field, Miocene- to Pliocene -aged sandstones of the Sterling Formation and Miocene -aged sandstones of the Beluga Formation comprise the proposed Sterling/Upper Beluga Gas Pool. ii. Beluga Gas Pool: Within the Swanson River Field, Miocene -aged sandstones of the Beluga Formation comprise the proposed Beluga Gas Pool. iii. Tyonek Gas Pool: Within the Swanson River Field, Miocene -aged sandstones of the Tyonek Formation comprise the proposed Tyonek Gas Pool. Reservoir sandstones within these formations and gas pools are lenticular in cross-section and laterally discontinuous, the result of deposition in braided to meandering river and stream channels within fluvial or alluvial environments. b. Structure: Within the development area, gas has accumulated in several pockets of a north -south trending faulted anticline, which measures about 7 miles long and 4 miles wide and is bounded on the west by a large sealing fault. 7. Well Spacing Waiver Request: Hilcorp requests no restrictions regarding gas well spacing within the Affected Area, except that no well may be drilled within 1,500 feet of the external boundary of the Affected Area unless the owner and landowner are the same on both sides of the boundary. CONCLUSIONS: 1. Pool Rules for the development of the gas -bearing sands in the Swanson River Field are appropriate. 2. The Sterling, Beluga and Tyonek Formations contain discontinuous sandstone reservoirs that display little to no lateral continuity within the proposed pools. 3. It is more appropriate to issue a new order covering the proposed gas pools than to amend CO 12313, an order that was issued to govern development and operation of the Hemlock Oil Pool. NOW THEREFORE IT IS ORDERED: Development and operation of the Hemlock Oil Pool within the Swanson River Field shall remain subject to CO 123B and the statewide requirements under 20 AAC 25. Development and operation of the proposed Sterling/Upper Beluga Gas Pool, Beluga Gas Pool, and Tyonek Gas Pool within the Swanson River Field are subject to the following rules and the statewide requirements under 20 AAC 25 to the extent not superseded by these rules: Conservation Order 716 April 17, 2015 Page 4 of 5 Affected Area - Swanson River Field: Seward Meridian The Affected Area for the Swanson River Field comprises the combined Swanson River and Soldotna Creek Units as follows: Swanson River Unit Township, Range Description T08N, R09W Section 9: SE`/4 NEI/4, EI/2 SE'/4, NW'/4 SE'/4 Section 3: W%2, WI/2 NEI/4, NW/4S E'/4 Section 10: WI/2 W'/2, SEI/4 NWI/4, E`/2 SW`/4, Wl/2 SEI/4, SE'/4 SE'/4 Section 4: Section 15: All Section 16: E`/2 E%2, SWI/4 Section 21: NEI/4, EI/2 NWI/4, EI/2 SEI/4, NWI/4 SEI/4, NE`/4 SWI/4 Section 8: Section 22: W`/2, SEI/4, WI/2 NEI/4, SEI/4 NEI/4 Section 27: NEI/4, W'/2 SEI/4, W`/2 All Section 28: E'I/2 EI/2, SWI/4 NEI/4, Wl/2 SEl/4, EI/2 SW'/4 Section 10: Section 32: EI/2 SEI/4, SW'/4 SEI/4 Section 33: SWI/4, EI`/2 NWI/4, SWI/4 NWI/4, NEI/4 NWI/4, W`/2 NEI/4, NEI/4 NEI/4 Section 34: NWI/4, WI/2 NEI/4 Soldotna Creek Unit Township, Range Description T07N, R09W Section 3: W%2, WI/2 NEI/4, NW/4S E'/4 Section 4: All Section 5: E%2, SWI/4 Section 8: EI/2, EI/2W%2, NWI/4 NWI/4 Section 9: All Section 10: W`/2 WI/2, NEI/4 NWI/4 Section 12: NWI/4, W`/2 NEI/4, NEI/4 NEI/4 Section 17: NEI/4 NEI/4 T08N, R09W Section 33: SEI/4 Section 34: SWI/4, W`/2 SE`/2 Rule 1 Field Name The field is the Swanson River Field. Rule 2 Pool definition Hydrocarbons underlying the Affected Area and within the intervals defined below constitute the named gas pools. a. The Sterling/Upper Beluga Gas Pool, which includes all intervals that correlate with the interval 2,140 feet TVD to 4,490 feet TVD in the Soldotna Creek Unit 41-4 well. Conservation Order 716 April 17, 2015 Page 5 of 5 b. The Beluga Gas Pool, which includes all intervals that correlate with the interval 4,490 feet TVD to 5,120 feet TVD in the Soldotna Creek Unit 41-4 well. C. The Tyonek Gas Pool, which includes all intervals that correlate with the interval 5,120 feet TVD to 10,085 feet TVD in the Soldotna Creek Unit 41-4 well. Rule 3 Well Spacing There shall be no restrictions regarding the spacing of development gas wells within the Affected Area except no well shall be drilled or completed less than 1,500 feet from the exterior boundary of the Affected Area unless the owner and landowner are the same on both sides of the line. Rule 4 Administrative Action Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the AOGCC may administratively waive the requirements of any rule stated herein or administratively amend this order as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geosciences principles, and will not result in an increased risk of fluid movement into freshwater. This order shall expire 5 years after the effective date shown below. DONE at Anchorage, Alaska and dated April 17, 2 15 Cathy Foe ter aniel T. Sea ount, Jr. Chair, Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 m. on the next day that does not fall on a weekend or state holiday. Singh, Angela K (DOA) From: Carlisle, Samantha J (DOA) Sent: Friday, April 17, 2015 3:52 PM To: AKDCWeIIIntegrityCoordinator, Alexander Bridge; Allen Huckabay; Andrew Vanderlack; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Bob Shavelson; Brian Havelock, Burdick, John D (DNR); Carrie Wong; Cliff Posey, Colleen Miller; Crandall, Krissell; D Lawrence; Dave Harbour, David Boelens; David Duffy; David House; David McCaleb; David Steingreaber; David Tetta; Davide Simeone; ddonkel@cfl.rr.com; Dean Gallego; Delbridge, Rena E (LAS); Donna Ambruz; Ed Jones; Elowe, Kristin; Evans, John R (LDZX); Frank Molli; Gary Oskolkosf, George Pollock; ghammons; Gordon Pospisil; Greg Duggin; Gregg Nady; gspfoff, Jacki Rose; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Williams, Jennifer L (LAW); Jerry Hodgden; Jerry McCutcheon; Solnick, Jessica D (LAW); Jim Watt; Jim White; Joe Lastufka; news@radiokenai.com; John Adams; Easton, John R (DNR); Jon Goltz; Juanita Lovett; Judy Stanek; Houle, Julie (DNR); Julie Little, Kari Moriarty; Kazeem Adegbola; Keith Wiles; Kelly Sperback; Gregersen, Laura S (DNR); Leslie Smith; Lisa Parker, Louisiana Cutler, Luke Keller, Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Kremer, Marguerite C (DNR); Mary Cocklan-Vendl; Michael Duncan; Michael Moora; Mike Bill; mike@kbbi.org; Mikel Schultz; MJ Loveland; mjnelson; mkm7200; Morones, Mark P (DNR); Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nick W. Glover, Nikki Martin; NSK Problem Well Supv; Oliver Sternicki; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; Renan Yanish; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shannon Donnelly, Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer; Moothart, Steve R (DNR); Suzanne Gibson; Sheffield@aoga.org; Tania Ramos; Ted Kramer, Davidson, Temple (DNR); Terence Dalton; Teresa Imm; Thor Cutler, Tim Mayers; Todd Durkee; Tony Hopfinger; trmjrl; Tyler Senden; Vicki Irwin; Vinnie Catalano; Walter Featherly; yjrosen@ak.net, Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andrew Cater, Anne Hillman; Bruce Williams; Bruno, Jeff J (DNR); Caroline Bajsarowicz; Casey Sullivan; Diane Richmond; Dickenson, Hak K (DNR); Donna Vukich; Eric Lidji; Erik Opstad; Gary Orr, Smith, Graham O (PCO); Greg Mattson; Heusser, Heather A (DNR); Holly Pearen; Jason Bergerson; jill.a.mcleod@conocophillips.com; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Kenneth Luckey, King, Kathleen J (DNR); Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck, Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Matt Gill; Franger, James M (DNR); Morgan, Kirk A (DNR); Pat Galvin; Bettis, Patricia K (DOA); Peter Contreras; Richard Garrard; Robert Province; Ryan Daniel; Sandra Lemke; Pexton, Scott R (DNR); Peterson, Shaun (DNR); Pollard, Susan R (LAW); Talib Syed; Terence Dalton; Todd, Richard J (LAW); Tostevin, Breck C (LAW); Wayne Wooster, William Hutto; William Van Dyke; Ballantine, Tab A (LAW); Bender, Makana K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Crisp, John H (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); Frystacky, Michal (DOA); Gallagher, Mike (DOA); Grimaldi, Louis R (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Hill, Johnnie W (DOA); Hunt, Jennifer L (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA) Subject: Conservation Order 716 (Swanson River Field) Attachments: co716.pdf Please see attached. Samantha Carlisle Executive Secretary II Alaska Oil and Gas Conservation Commission 333 West 711, Avenue Anchorage, AK 99501 (907) 793-1223 (phone) (907) 276-7542 (fax) CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Samantha Carlisle at (907) 793-1223 or Samantha.Carlisle@alaska.gov. James Gibbs Jack Hakkila Bernie Karl Post Office Box 1597 Post Office Boz 190083 K&K Recycling Inc. Soldotna, AK 99669 Anchorage, AK 99519 Post Office Box 58055 Fairbanks, AK 99711 Gordon Severson Penny Vadla George Vaught, Jr. 3201 Westmar Cir. 399 W. Riverview Ave. Post Office Box 13557 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Denver, CO 80201-3557 David W. Duffy Richard Wagner Darwin Waldsmith Landman Post Office Box 60868 Post Office Box 39309 Hilcorp Alaska, LLC Fairbanks, AK 99706 Ninilchik, AK 99639 P.O. Box 244027 Anchorage, AK 99524-4027 Angela K. Singh THE STATE °fALASKA GOVERNOR BILL WALKER Alaska Oil and Gas Conservation Commission ADMINISTRATIVE APPROVAL CONSERVATION ORDER NO. 716.001 Mr. Larry Greenstein Well Intervention Manager Hilcorp Alaska, LLC P.O. Box 244027 Anchorage, AK 99524-4027 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.00gcc.alaska.gov Re: Docket Number: CO -15-004 Request for administrative approval to correct the vertical limits of the gas pools Swanson River Field Sterling/Upper Beluga Gas Pool Beluga Gas Pool Tyonek Gas Pool Dear Mr. Greenstein: By email dated April 23, 2015, Hilcorp Alaska, LLC (Hilcorp) requested administrative approval to correct the depths that define the upper and lower limits of the three gas pools referenced above. In accordance with Rule 4 of Conservation Conservation Commission (AOGCC) hereby definitions of the three gas pools. Order (CO) 716, the Alaska Oil and Gas GRANTS Hilcorp's request to correct the When reviewing data to confirm that the newly defined pools in CO 716 corresponded with the production that was previously reported for the undefined pools, which correspond with the participating areas in the unit, Hilcorp discovered that there was a translation error in going from measured depth to the true vertical depths that were used for the pool definitions. In order to ensure that the pool definitions correspond with the participating areas that gas production has been reported against it is necessary to correct the errors in the vertical limits that were used to define the three new pools. CO 716.001 June 25, 2015 Page 2 of 2 Now Therefore it is Ordered: Rule 2 of Conservation Order 716 is revised to read as follows: Rule 2 Pool definition Hydrocarbons underlying the Affected Area and within the intervals defined below constitute the named gas pools. a. The Sterling/Upper Beluga Gas Pool, which includes all intervals that correlate with the interval 2,338 feet MD to 4,609 feet MD in the Soldotna Creek Unit 41-4 well. b. The Beluga Gas Pool, which includes all intervals that correlate with the interval 4,609 feet MD to 5,304 feet MD in the Soldotna Creek Unit 41-4 well. C. The Tyonek Gas Pool, which includes all intervals that correlate with the interval 5,304 feet MD to 10,085 feet MD in the Soldotna Creek Unit 41-4 well. DONE at Anchorage, Alaska and dated June 25, 2015. Cathy k. Foerster Daniel T. Seamount, Jr. Chair, Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Carlisle, Samantha J (DOA) From: Carlisle, Samantha J (DOA) Sent: Friday, June 26, 2015 11:06 AM To: 'Ballantine, Tab A (LAW) (tab.ballantine@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)'; 'Crisp, John H (DOA) Oohn.crisp@alaska.gov)'; 'Davies, Stephen F (DOA) (steve.davies@alaska.gov)'; Eaton, Loraine E (DOA); Toerster, Catherine P (DOA) (cathy.foerster@alaska.gov)'; Trystacky, Michal (michal.frystacky@alaska.gov)'; 'Grimaldi, Louis R (DOA) (lou.grimaid i@alaska.gov)'; 'Guhl, Meredith (DOA sponsored) (meredith.guhl@alaska.gov)'; Herrera, Matthew F (DOA); 'Hill, Johnnie W (DOA)'; 'Hunt, Jennifer L (DOA)'; 'Jackson, Jasper C (DOA)'; 'Jones, Jeffery B (DOA) Oeffjones@alaska.gov)'; Kair, Michael N (DOA); Loepp, Victoria T (DOA); 'Mumm, Joseph (DOA sponsored) Ooseph.mumm@alaska.gov)'; 'Noble, Robert C (DOA) (bob.noble@alaska.gov)'; 'Paladijczuk, Tracie L (DOA)(tracie.paladijczuk@alaska.gov)'; 'Pasqua[, Maria (DOA) (maria.pasqual@alaska.gov)'; 'Regg, James B (DOA) Oim.regg@alaska.gov)'; 'Roby, David S (DOA) (dave.roby@alaska.gov)'; 'Scheve, Charles M (DOA) (chuck.scheve@alaska.gov)'; 'Schwartz, Guy L (DOA) (guy.schwartz@alaska.gov)'; 'Seamount, Dan T (DOA) (dan.seamount@alaska.gov)'; 'Singh, Angela K (DOA) (angela.singh@alaska.gov)'; 'Wallace, Chris D (DOA) (chris.wallace@alaska.gov)'; 'AKDCWellIntegrityCoordinator'; 'Alex Demarban'; 'Alexander Bridge'; 'Allen Huckabay'; 'Andrew VanderJack'; 'Anna Raff'; 'Barbara F Fullmer'; 'bbritch'; 'Becky Bohrer'; 'Bob Shavelson'; 'Brian Havelock'; 'Bruce Webb'; Burdick, John D (DNR); 'Carrie Wong'; 'Cliff Posey'; 'Colleen Miller'; 'Crandall, Krissell'; 'D Lawrence'; 'Dave Harbour'; 'David Boelens'; 'David Duffy'; 'David House'; 'David McCaleb'; 'David Steingreaber'; 'David Tetta'; 'Davide Simeone'; 'ddonkel@cfl.rr.com'; 'Dean Gallegos'; Delbridge, Rena E (LAS); 'Donna Ambruz'; 'Ed Jones'; 'Elowe, Kristin'; 'Evans, John R (LDZX)'; 'Frank Molli'; 'Gary Oskolkosf'; 'George Pollock'; 'ghammons'; 'Gordon Pospisil'; 'Greg Duggin'; 'Gregg Nady'; 'gspfoff'; Hulme, Rebecca E (DNR); 'Jacki Rose'; 'Jdar[ington oarlington@gmail.com)'; 'Jeanne McPherren'; 'Jennifer Williams'; 'Jerry Hodgden'; 'Jerry McCutcheon'; 'Jessica Solnick'; 'Jim Watt'; 'Jim White'; 'Joe Lastufka'; 'Joe Nicks'; 'John Adams'; 'John Easton'; 'Jon Goltz'; 'Juanita Lovett'; 'Judy Stanek'; 'Julie Houle'; 'Julie Little'; 'Kari Moriarty'; 'Kazeem Adegbola'; 'Keith Wiles'; 'Kelly Sperback'; 'Laura Silliphant (laura.gregersen@alaska.gov)'; 'Leslie Smith'; 'Lisa Parker'; 'Louisiana Cutler'; 'Luke Keller'; 'Marc Kovak'; 'Mark Dalton'; 'Mark Hanley (mark.hanley@anadarko.com)'; 'Mark Landt'; 'Mark Wedman'; 'Marquerite kremer (meg.kremer@alaska.gov)'; 'Mary Cocklan-Vendl'; 'Michael Calkins'; 'Michael Duncan'; 'Michael Moora'; 'Mike Bill'; 'Mike Mason'; 'Mike) Schultz'; 'MJ Loveland'; 'mkm7200'; Morones, Mark P (DNR); Munisteri, Islin W M (DNR); 'nelson'; 'Nichole Saunders'; 'Nick W. Glover'; 'Nikki Martin'; 'NSK Problem Well Supv'; 'Oliver Sternicki'; 'Patty Alfaro'; 'Paul Craig'; 'Paul Decker (paul.decker@alaska.gov)'; 'Paul Mazzolini'; Pike, Kevin W (DNR); 'Randall Kanady'; 'Randy L. Skillern'; 'Renan Yanish'; 'Robert Brelsford'; 'Ryan Tunseth'; 'Sara Leverette'; 'Scott Griffith'; 'Shannon Donnelly'; 'Sharmaine Copeland'; 'Sharon Yarawsky'; Shellenbaum, Diane P (DNR); 'Smart Energy Universe'; Smith, Kyle S (DNR); 'Sondra Stewman'; 'Stephanie Klemmer'; 'Steve Moothart (steve.moothart@alaska.gov)'; 'Suzanne Gibson'; 'Tamers Sheffield'; 'Tania Ramos'; 'Ted Kramer'; 'Temple Davidson'; 'Terence Dalton'; 'Teresa Imm'; 'Terry Templeman'; 'Thor Cutler'; 'Tim Mayers'; 'Todd Durkee'; 'Tony Hopfinger'; 'trmjr1'; 'Tyler Senden'; 'Vicki Irwin'; 'Vinnie Catalano'; 'Walter Featherly'; 'Aaron Gluzman'; 'Aaron Sorrell'; 'Ajibola Adeyeye'; 'Alan Dennis'; 'Andrew Cater'; 'Anne Hillman'; 'Brian Gross'; 'Bruce Williams'; Bruno, Jeff J (DNR); 'Caroline To: Bajsarowicz'; 'Casey Sullivan'; 'Diane Richmond'; 'Don Shaw'; 'Donna Vukich'; 'Eric Lidji'; 'Erik Opstad'; 'Gary Orr'; 'Graham Smith'; 'Greg Mattson'; 'Hak Dickenson'; Heusser, Heather A (DNR); 'Holly Pearen'; Hyun, James J (DNR); 'Jason Bergerson'; 'Jill McLeod'; 'Jim Magill'; 'Joe Longo'; 'John Martineck'; 'Josh Kindred'; 'Kenneth Luckey'; King, Kathleen J (DNR); 'Laney Vazquez'; 'Lois Epstein'; Longan, Sara W (DNR); 'Marc Kuck'; 'Marcia Hobson'; 'Marie Steele'; 'Matt Armstrong'; 'Matt Gill'; 'Mike Franger'; 'Morgan, Kirk A (DNR)'; 'Pat Galvin'; 'Pete Dickinson'; 'Peter Contreras'; 'Richard Garrard'; 'Robert Province'; 'Ryan Daniel'; 'Sandra Lemke'; 'Shaun Peterson'; 'Susan Pollard'; 'Talib Syed'; 'Terence Dalton'; 'Tina Grovier (tmgrovier@stoel.com)'; Todd, Richard J (LAW); Tostevin, Breck C (LAW); 'Wayne Wooster'; 'William Hutto'; 'William Van Dyke' Subject: CO 716.001 (Swanson River Field) Attachments: co716-001.pdf Please see attached. Samantha Carlisle I:xc=clztive ` ecretary II Alaska Oil and Gas Conservation Commission 3:33 11'`est 7'', Avenuc Aii horage., AK 99501 (907) 793-1223 (phone) (907) 276-73,12 (fax) CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Samantha Carlisle at (907) 793-1223 or Samantha.Carlisle@alaska.gov. James Gibbs Jack Hakkila Bernie Karl P.O. Box 1597 P.O. Box 190083 K&K Recycling Inc.p.O, Box 58055 Soldotna, AK 99669 Anchorage, AK 99519 Fairbanks, AK 99711 Gordon Severson Penny Vadla George Vaught, Jr. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 13557 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Denver, CO 80201-3557 Mr. Larry Greenstein Richard Wagner Darwin Waldsmith Well Intervention Manager P.O. Box 60868 P.O. Box 39309 Hilcorp Alaska, LLC Fairbanks, AK 99706 Ninilchik, AK 99639 P.O. Box 244027 Anchorage, AK 99524-4027 Angela K. Singh Colombie, Jody J (DOA) From: Roby, David S (DOA) Sent: Monday, April 27, 2015 4:23 PM To: Colombie, Jody J (DOA) Cc: Carlisle, Samantha J (DOA) Subject: RE: Conservation Order 716 (Swanson River Field) Jody, You can toss the emails I printed out for you to put in this file. I see that this email contains all of the prior email traffic. Dave Roby (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.roby@alaska.gov. From: Roby, David S (DOA) Sent: Monday, April 27, 2015 2:40 PM To: Jody Colombie Cc: Carlisle, Samantha J (DOA) Subject: FW: Conservation Order 716 (Swanson River Field) Jody, Tab said we should handle this as an admin approval instead of an errata since it was Hilcorp's error and not ours. That said, can you please docket this and assign it to me. I have some back and forth emails related to this that came in before this request and will print them out for the file. Thanks, Dave Roby (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.roby�galaska.gov_. From: Larry Greenstein[mailto:lgreenstein@hilcorp.com] Sent: Friday, April 24, 2015 4:12 PM To: Davies, Stephen F (DOA); Roby, David S (DOA) Cc: David Duffy Subject: RE: Conservation Order 716 (Swanson River Field) Thank you guys for guiding our efforts to get these depths corrected in CO 716. Don't know if this would fall into an 'errata' type fix in a brand new CO or an administrative action (Rule 4), but however you'd like us or you to proceed. The attached powerpoint shows the type well, reference log and new measured depths for the defined pools as well as their one-to-one agreement with the BLM PAs that have been around since 1999. These new depths maintain the integrity of all the previous reported production volumes and ensure that future reporting matches the old undefined pool data. Thanks for your help and let me know if there is something else you need from us to get this fixed in the CO. Larry PS - We should never have tried to use TVDs!! From: Davies, Stephen F (DOA)[mailto:steve.davies(&alaska.gov] Sent: Thursday, April 23, 2015 11:45 AM To: Larry Greenstein Cc: Roby, David S (DOA) Subject: RE: Conservation Order 716 (Swanson River Field) Thanks Larry. It's always clearest (and easiest) to define a pool by specifying measured depths on a reference log from a type well. Thanks again for your help. Steve Davies AOGCC CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Steve Davies at 907-793-1224 or steve.davies@alaska.gov. From: Roby, David S (DOA) Sent: Thursday, April 23, 2015 11:38 AM To: Larry Greenstein Cc: Davies, Stephen F (DOA) Subject: RE: Conservation Order 716 (Swanson River Field) That's an easy fix. Sent kom my GCI Notc 4 -------- Original message -------- From: Larry Greenstein <lgreenstein(ci)hilcorp.com> Date: 04/23/2015 11:25 AM (GMT -09:00) To: "Roby, David S (DOA)" <dave.roby(ualaska.ov> Cc: "Davies, Stephen F (DOA)" <steve.daviesLvalaska.go\,> Subject: RE: Conservation Order 716 (Swanson River Field) Just a choice by the geologist... and therein lies the rub (to quote Shakespeare??) We'll get it fixed before it causes any problems... with your help. -----Original Message ----- From: Roby, David S (DOA) [mailto:dave.robyLi alaska.gov] Sent: Thursday, April 23, 2015 11:08 AM To: Larry Greenstein Cc: Davies, Stephen F (DOA) Subject: RE: Conservation Order 716 (Swanson River Field) We were wondering why you chose to use TVD instead of MD in your application to define the pool tops and bottoms. Dave Roby (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.roby(a alaska.gov. -----Original Message ----- From: Larry Greenstein [mailto:lgreensteinLi hilcorp.com] Sent: Thursday, April 23, 2015 11:03 AM To: Roby, David S (DOA) Cc: Davies, Stephen F (DOA) Subject: RE: Conservation Order 716 (Swanson River Field) Hello Dave, Now I feel foolish... there may be a translation error (bad aim at the BLM target) in going from the MDs of the BLM PA approvals to the TVDs in the newly defined pool tops in CO 716. We're creating a graphic to highlight the depth shift and see if it relates to any production reporting issues. If it does look like the depths are off, we will get with you to amend the TVD depths in CO 716 so it won't cause any production reporting problems in the future. None of the past reporting has been in error. Larry -----Original Message ----- From: Larry Greenstein Sent: Tuesday, April 21, 2015 12:59 PM To: 'Roby, David S (DOA)' Cc: Davies, Stephen F (DOA) Subject: RE: Conservation Order 716 (Swanson River Field) You're welcome. We targeted the definitions of the AOGCC pools with those original three BLM PAs so that nothing from the past reporting would be out of whack. Larry -----Original Message ----- From: Roby, David S (DOA) [mailto:dave.roby(ri,alaska.gov] Sent: Tuesday, April 21, 2015 12:55 PM To: Larry Greenstein Cc: Davies, Stephen F (DOA) Subject: RE: Conservation Order 716 (Swanson River Field) Thanks Larry, I assumed this was the case but just wanted to make sure before we moved forward that we weren't going to be perpetuating an error. Regards, Dave Roby (907)793-1232 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 Dave Roby at (907)793-1232 or dave.robyLvalaska.gov. -----Original Message ----- From: Larry Greenstein[mailto:lgreenstein(whilcom.com] Sent: Tuesday, April 21, 2015 12:52 PM To: Roby, David S (DOA) Cc: Davies, Stephen F (DOA) Subject: RE: Conservation Order 716 (Swanson River Field) Hi Dave Checked with our production accounting, geology and reservoir engineering folks and they all agree - no problem with gas reporting by pools. Since BLM (Chris Gibson) & Unocal (Eric Graven) created the three reporting PAs in 1999, the reporting to both BLM and the State has been consistent in categorizing the gas production from the appropriate PAs and Undefined pools. The State (Tom Maunder) requested that Unocal's pool reporting correlate directly with the initial 1999 creation of the three PAs with BLM. Specifically, the Sterling undefined pool has always contained some extreme upper Beluga sands as has the Sterling/Upper Beluga PA with BLM. The reported production by undefined pool is correct and will agree across the field with the now defined three pools. Call me if I didn't give you enough info. Larry -----Original Message ----- From: Roby, David S (DOA) [mailto:dave.roby(a alaska.gov] Sent: Monday, April 20, 2015 9:24 AM To: Larry Greenstein Cc: Davies, Stephen F (DOA) Subject: RE: Conservation Order 716 (Swanson River Field) Thank you. Dave Roby (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.robyLa;alaska.yov. -----Original Message ----- From: Larry Greenstein [mailto•lgreensteinLt hilcorp.com] Sent: Saturday, April 18, 2015 9:31 AM To: Roby, David S (DOA) Cc: Davies, Stephen F (DOA) Subject: RE: Conservation Order 716 (Swanson River Field) You bet ... will do, Dave. Thank you for getting this all said and done. We were just ready to prepare 4-5 spacing exceptions for SRF gas well work to begin around August and then we see this pop up ... thanks. I'll get with the production folks and make sure there aren't any 'blemishes' in the designation of the gas produced and reported earlier Larry -----Original Message ----- From: Roby, David S (DOA)[mailto:dave.roby(cz;alaska.gov] Sent: Friday, April 17, 2015 6:25 PM To: Larry Greenstein Cc: Davies, Stephen F (DOA) Subject: RE: Conservation Order 716 (Swanson River Field) Larry, Prior to the issuance of this order gas production was reported against undefined Sterling, Beluga, and Tyonek gas pools but now the pools are defined as Sterling/Upper Beluga, Beluga, and Tyonek. Since the naming convention is slightly different can you confirm that the production that was attributed to the undefined Sterling should now be considered production from the Sterling/Upper Beluga Gas Pool? And the same with the other two pools? We just want to make sure that the historical and future production is properly attributed in our database. Thanks in advance, Dave Roby (907)793-1232 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 Dave Roby at (907)793-1232 or dave.roby(dalaska._ov. Swanson River Gas PA's JWS 4-22-15 Sterling/Upper Beluga PA and Pool TOP Sterling/ Upper Beluga B LM PA 2338-4609 and TOP _BELUGA _PA [JWSI=4609. Cooklnlei Master SCU 341-04 3/21/1960 8 a 8 8 Y 8 8 HEC_STERLINGN_BELUGA_ AOGCC Pool 2338-4609 and [JWSI=4609.0 1 TOP -BELUGA -PA B LM PA 4069-5304 _TYONEK_PA Cookinlet Master SCU 341-04 3/21/1960 14 m d Tyonek PA & Pool TOP TYONEK—PA EJWSI=5304-C' BLIVI PA 5304-10085 and CookInlet Master SCU 341-04 t 3121!1960 I IL IHEC_TYC:)NEK—C3AS—P(D(DL [J It AOGCC Pool 5304-10085 and till I EC—TYNK-01ST [JWS]=10085.0 EMLOCK Eel Hilcorp Pool Tops BLM PA Tops HEC Pool Rules Depths - Measured depth tops from the Standard Oil of California SCU 41-4 (341-4) well 3/9/1960. Tops are defined and picked on the Spontaneous Potential and Induction/Resistivity log curves. BLM PA Tops Fm Name MD Fm Name MD HEC STERLING/U_BELUGA GAS POOL_Top 2,338 �STERLING-U—BELUGA—PA Top 2,338 HEC STRLG/U_BLGA_GAS_POOL BASE 4,609 IBSE_STERLING-U_ BELUGA _PA 4,609 HEC BELUGA_ GAS_ POOL_ Top 4,609 TOP_BELUGA_PA_Top 4,609 HEC BELUGA GAS POOL BASE 5,304 BSE. _TYONEK_PA 5,304 HEC TYONEK_GAS POOL -Top 5,304 TOP _TYONEK_PA 5,304 HEC TYONEK POOL Base 10,085 BSE _TYONEK_PA 10,085 A Z —•z - 'i i 0 3: > 2 94 10 AK00016681 An q Z Z C. c. T v -q 04- 0 X�lIII —t2" c. r ir, i i5 V r c t r- S7 r Z! C� CO(N411 fil LE) 111, • r t I I I rtil l I t M , e --, 1 — r, F, 3: t i;i 0 > > z Z i� 7< 7+ 00 40 40 AID 10 C, Z 41 z r-!- 7- A REMARKS— CD CorWdq No. be �j e fscl No. Sonde No— SPONTANEOUS- POTENTIAL RESISTIVITY CONDUCTIVITY millivolts 3i ohms. M2,m millimhos, Im - 19—W oh - 16' NORMAL INDUCTION — INDUCTION --. — ----------- RECFIVED JAN 1 �, X015 A0GCC Hilcorp Alaska, LLC January 16, 2015 Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 100 Anchorage, AK 99503 David W. Duffy dduffy(cr�h i (corp. corn Phone: 907/777-8414 Fax: 907/777-8301 RE: Post -hearing submission of request to amend Conservation Order 123B (Swanson River Field) Dear Commissioner Foerster, Thank you for the opportunity to clarify Hilcorp Alaska, LLC's ("Hilcorp") proposed modifications to the Swanson River Field's pool rules (Conservation Order 12313). Hilcorp requests the AOGCC take action to amend CO 123B as follows: Rule 3. Pool Definition A. The Hemlock Oil Pool includes all intervals which correlate with the interval 10,085 feet TVD to 10,815 TVD feet in the Standard Oil Company of California, Soldotna Creek Unit 41-4 well. [No change from CO 123A, except clarification on unit of measurement.] B. The Sterling/Upper Beluga Gas Pool includes all intervals which correlate with the interval 2, 140 feet TVD to 4,490 feet TVD in the SCU 41-4 well. [New this order] C. The Beluga Gas Pool includes all intervals which correlate with the interval 4,490 feet TVD to 5,120 feet TVD in the SCU 41- 4 well. [New this order] D. The Tyonek Gas Pool includes all intervals which correlate with the 5,120 interval TVD to 10,085 TVD in the SCU 41-4 well. [New this order] Rule 5. Well Spacing. A. Oil Wells. There shall be no restrictions to well spacing within the Hemlock Oil Pool except that no wellbore may be open to test or regular production in a well within 500 feet of the external property line of the Affected Area described above where the Proposed Amendment to _ 23B Hilcorp Alaska, LLC Page 2 of 2 owners and landowners are not the same on both sides of the line. [No change to CO 123B] B. Gas Wells. There shall be no restrictions to gas well spacing except that no wellbore may be open to test or regular production in a well within 1,500 feet of the external property line of the Affected Area described above where the owners and landowners are not the same on both sides of the line. [New this order] Hilcorp further requests the AOGCC accept the attached Technical Slides presented by Messrs. Ewing and Serbeck during the January 14, 2015 hearing, with corrections referenced on pages 9, 10, and 11. Should you have any additional questions, please contact Mr. Jason Ewing, Reservoir Engineer, 777-8441, or the undersigned at 777-8414. Sincerely, HILCORP ALASKA, LLC David W. Duffy, Landman Enclosures: • Technical Slides (presented at the Jan. 14, 2015 hearing, with corrections) • Swanson River Field and Unit PA Exhibits (as revised March 10, 2011) Swanson River Gas Pool Rules Jason Ewing John Serbeck Copy of written testimony provided at AOGCC hearing dated 1/15/16, with corrections noted on Slides 9, 10 and 11. Page numbers have also been added to each slide. Swanson River Field Shallow Gas Overview • ^J55 Bscf produced from 17 shallow gas wells (excluding gas storage) from '60 to'14 — 27.1 Bscf from Sterling — 9.3 Bscf from Beluga — 18.9 Bscf from Tyonek • Peak rate of ^'23 M M/d in 2004 • 47 completions out of 30 different sands — 20 Sterling Completions — 11 Beluga Completions — 16 Tyonek Completions L Swanson River Shallow Gas Producers Sterling/Upper Beluga Tyonek Swanson River Shallow Gas Producers Sterling/Upper Beluga 4 Swanson River Shallow Gas Producers Beluga ___ ------------ Swa Shy Pr Shallow Gas Production Company: Gp: 55092 MMscf On Stream: 07101/1960 Np:0.507 Mstb Field; S4'VANSON RfVER Wp:1638.992 Mstb current Status: SHALLOW GAS WELLS Qcond:0.000 Mstb 104 Ji 4� i 1Q= `l 10:. 1950 1980 1970 1980 1990 2000 2010 0 Shallow Gas Well Summary Well Producing Dates Cum Gas (M 12-15 '99 -'14 2,539 32A-15 '10 -'14 1,020 21-33 '62 -'65 1,595 211-15 '63 -'66,'87 -'88 3,650 212-10 '60, '63, '88 -'90 295 212-27 '62-'66, '79-'80, '88-'92, '97-'02 8,752 213-10 '02 -'04, '08 1,807 223-28 '97 -'98 137 234-15 '95 -'99,'01 2,057 241-16 '04 -'07, '08-'14 3,112 242-16 '89 -'14 22,367 243-08 '62 -'65,'89 - '92, '03 1,779 34-28 '04 -'05, '08 -'09 798 43-04 '62 -'64 802 43B-08 '04 -'05, '08 -'09, '11-'14 943 42A-05 '04 -'05 2,340 43-28 (KGSF1) '98-'01 1,339 Total 55,332 I Request Overview Hilcorp Alaska, LLC requests the AOGCC to amend conservation order 1236 to accomplish: • Formally define the Swanson River Field's gas pools (amendment of Rule 3) • To allow for unlimited gas well spacing EXCEPT within 1500ft of the field's external boundary (amendment of Rule 5)* *Correction noted in bold/underlined text Pool Definition Amendments (Rule 3) • The Sterling/Upper Beluga Gas Pool includes all intervals which correlate with the interval 389 2,140 feet TVD to 4,490 feet TVD in the SCU 41-4 well* • The Beluga Gas Pool includes all intervals which correlate with the interval 4,490 feet TVD to 5,120 feet TVD in the SCU 41-4 well • The Tyonek Gas Pool includes all intervals which correlate with the 5,120 interval TVD to 10,085 TVD in the SCU 41-4 well *Correction noted inw+lthmugh and 1® bold/underlined text Swanson River Shallow Gas Producers SCU 41-04 Log • The Sterling/Upper Beluga Gas Pool includes all intervals which correlate with the interval 394 2,140 feet TVD to 4,490 feet TVD in the SCU 41- 4_wel I * • The Beluga Gas Pool includes all intervals which correlate with the interval 4,490_feet TVD to 5,120_feet TVD in the SCU 41-4—well • The Tyonek Gas Pool includes all intervals which correlate with the 5,120 interval TVD to 101085 TVD in the SCU 41-4 well *Correction noted in strike thFeug4 and bold/underlined text keel Well Spacing Amendments (Rule 5) Gas Wells. There shall be no restrictions to gas well spacing except that no wellbore may be open to test or regular production in a well within 1,500 feet of the external property line of the Affected Area described above where the owners and landowners are not the same on both sides of the line M Stratigraphic Nature o SRU -242-1 6 5rcu i-io 8/29/1989 6/7/2004 f Sterling ross Secti n Index �r ra cr SR SRU_2�1-16 161 9 EXHIBIT B Swanson River Field (Swanson River Unit and Soldotna Creek Unit) Revised March 1, 2011 Committed Basic Unit Acreage Royalty Owner and Serial and Percentage Number Percentage 880.00 A-028077 USA 4.5833333% 11.1675% QLS 816463 CIRI 7.9166667% 320.00 A-028384 USA 1.5625% 4.0609% QLS 816538 CIRI 10.9375% 120.00 A-028396 USA 0.6085983% 1.5228% QLS 816539 CIRI 11.8914017% 800.00 A-028399 USA 5.6818182% 10.1523% QLS 816541 CIRI 6.8181818% 400.00 A-028405 USA 1.9646983% 5.0761% QLS 816536 CIRI 10.5353017% Overiding Working Lessee Royalty Owner Interest Owner & of Record and Percentage Participation Marathon Russell R. Union 100% Simonson - 1% Union None Union 100% Union None Union 100% Union None Union 100% Union None Union 100% Description of Participating Lands Tract No. (Unsurveved) BLOCK 1 SWANSON RIVER UNIT 2 T8N, R9W, S.M. Sec 9: Lot 2,160 acres; Sec 16: E/2; 320 acres; Sec 21: Lot 1, 400 acres 6 T8N, R9W. S.M. Sec 15: E/2, 320 acres 8 T8N, R9W, S.M. Sec 32: Lot 2 11 T8N, R9W. S.M. Sec 28: Lot 1, 360 acres; Sec 33: That portion of Lot 1 lying within: NE/4, 160 acres; NE/4 NW/4, 40 acres; S/2 NW/4, 80 acres; SW/4, 150.59 acres: Portion of Hungry Lake, 9.41 acres 17 T8N. R9W, S.M. Sec 10: Lot 2. 400 acres EXHIBIT B Swanson River Field (Swanson River Unit and Soldotna Creek Unit) Revised March 1, 2011 Committed Basic Unit Acreage Royalty Owner and Serial and Percentage Number Percentage 880.00 A-028077 USA 4.5833333% 11.1675% QLS 816463 CIRI 7.9166667% 320.00 A-028384 USA 1.5625% 4.0609% QLS 816538 CIRI 10.9375% 120.00 A-028396 USA 0.6085983% 1.5228% QLS 816539 CIRI 11.8914017% 800.00 A-028399 USA 5.6818182% 10.1523% QLS 816541 CIRI 6.8181818% 400.00 A-028405 USA 1.9646983% 5.0761% QLS 816536 CIRI 10.5353017% Overiding Working Lessee Royalty Owner Interest Owner & of Record and Percentage Participation Marathon Russell R. Union 100% Simonson - 1% Union None Union 100% Union None Union 100% Union None Union 100% Union None Union 100% Description of Participating Lands Tract No. (Unsurveved) BLOCK 1 SWANSON RIVER UNIT 18 TBN, R9W, S.M. Sec 15: W/2, 320 acres; Sec 22: Lot 2, 600 acres Sec 27: Lot 1, 560 acres; Sec 34: That portion of Lot 2 lying within: N/2, 240 acres Block 1 Total BLOCK 2 SOLDOTNA CREEK UNIT 9, TBN. RM, S.M. Basic Sec 33: That portion of Lot 1 lying within: Royalty Owner SE/4, 160 acres; Serial and Sec 34: That portion of Lot 2 lying within: Number Percentaqe SW/4, 160acres; 1720.00 W/2 SE/4, 80 acres 12 T7N, R9W. S.M. Sec 16: Lot 1, 280 acres 15 T7N, R9W, S.M. Sec 5: Lot 1, 467.99 acres; Portion of Hungry Lake, 12.01 acres; Sec 8: Lot 1. 520 acres EXHIBIT B (Swanson River Unit and Soldotna Creek Unit) Revised March 1, 2011 Committed Basic Unit Acreage Royalty Owner and Serial and Percentage Number Percentaqe 1720.00 A-028406 USA 8.9583333% 21.8274% QLS 816537 CIRI 3.5416667% 4240.00 53.8071% 400.00 A-028990 USA 2.0833333% 5.0761% QLS 816542 CIRI 10.4166667% 280.00 A-028993 USA 1.8229167% 3.5533% QLS 816554 CIRI 10.6770833% 1000.00 A-028996 USA 11.1607143% 12.6904% QLS 816543 CIRI 1.3392857% Overiding Working Lessee Royalty Owner Interest Owner & of Record and Percentage Participation Union None Union 100% Fred W. (a) 5.0% Union 100% Axford Fred W. (a) 5.0% Union 100% Axford Fred W. (a) 5.0% Union 100% Axford EXHIBIT B (Swanson River Unit and Soldotna Creek Unit) Revised March 1, 2011 Committed Basic Unit Acreage Royalty Owner and Serial and Percentage Number Percentage 1920.00 A-028997 USA 9.375% 24.3655% QLS 816544 CIRI 3.125% Overiding Working Lessee Royalty Owner Interest Owner of Record and Percentage & Participation Fred W. (a) 5.0% Union 100% Axford 20 T7N, R9W, S.M. 40.00 A-029002 USA 12.5% Fred W. (a) 5.0% Union 100% .5076% QLS 816545 Axford Sec 17: Lot 1, 40 Block 2 Total 3640.00 46.1929% Total Swanson River Field 7880.00 Union 100% 100.00% LEGEND USA: Description of CIRI: Participating Lands Tract No. (Unsurveyed) BLOCK 2 SOLDOTNA CREEK UNIT 16 T7N, R9W. S.M. Sec 3: Lot 2, 440 acres; S�c 4: Lot 1, 599.68 acres; Portion of Hungry Lake, 38.68 acres: Lot 2, 1.64 acres; Sec 9: All, 640 acres; Sec 10: Lot 2, 200 acres EXHIBIT B (Swanson River Unit and Soldotna Creek Unit) Revised March 1, 2011 Committed Basic Unit Acreage Royalty Owner and Serial and Percentage Number Percentage 1920.00 A-028997 USA 9.375% 24.3655% QLS 816544 CIRI 3.125% Overiding Working Lessee Royalty Owner Interest Owner of Record and Percentage & Participation Fred W. (a) 5.0% Union 100% Axford 20 T7N, R9W, S.M. 40.00 A-029002 USA 12.5% Fred W. (a) 5.0% Union 100% .5076% QLS 816545 Axford Sec 17: Lot 1, 40 Block 2 Total 3640.00 46.1929% Total Swanson River Field 7880.00 Union 100% 100.00% LEGEND USA: United States of America CIRI: Cook Inlet Region; Inc. UNION: Union Oil Company of California Marathon: Marathon Oil Company Exhibit A Swanson River Field Hemlock Formation - 8910086520 Hemlock Initial Participating Area 6 5 4 3 2 1 - l .. ... A02 405 7 `; f � 1?®9 UNOCAL W April 1, 2005 Scale: 1:62,000 BIO—Ok 1 p53 �406.+ 30 m 29 m j I A02?M. i K f � h I /-x[32839 A028990 31 31 9 Block 2 2 1 �: A08997 HVFCdS79 % >. '#W 7�" 10 Hemlock PA { Leases a t®� Unit Tracts A 29t 12 - 18 CIR 5810 17 if3. 993 t5 14 I 13 1' UNOCAL W April 1, 2005 Scale: 1:62,000 Description of Participating Lands Tract No. (Unsurveyed) BLOCK 1 SWANSON RIVER UNIT 2 T8N, R9W, S.M. Sec 16: NE/4 NE/4 SE/4 SE/4; W/2 NE/4 SE/4 SEA; NW/4 SE/4 SE/4; NE/4 SE/4; E/2 SE/4 NW/4 SE/4; E/2 NE/4 SW/4 SE/4; SE/4 SE/4 NEA; E/2 NE/4 SE/4 NE/4; SW/4 NE/4 SE/4 NE/4; E/2 SW/4 SE/4 NE/4; SE/4 SE/4 NE/4 NE/4 Sec 21: That portion of Lot 1 lying within: E/2 SE/4 SE/4 SE/4; E/2 NE/4 SEA SE/4; E/2 NE/4 SE/4; E/2 SE/4 SE/4 NE/4; SWA SE/4 SEA NE/4; E/2 NE/4 SE/4 NEA; E/2 E/2 NE/4 NE/4 6 T8N, R9W, S.M. Sec 15: W/2 NE/4 SE/4; W/2 SE/4; W/2 SE/4 NE/4; W/2 SW/4 NE/4 NE/4; SW/4 NW/4 NE/4 NE/4; W/2 NE/4 8 T8N, R9W, S.M. Sec 32: That portion of Lot 2 lying within: E/2 SE/4 SE/4; E/2 NW/4 SE/4 SE/4; SW/4 NW/4 SEA SE/4; SW/4 SE/4 SEA; E/2 SEA NE/4 SE/4; SWA SEA NEA SE/4; E/2 SE/4 SW/4 SEA; SW/4 SE/4 SW/4 SE/4 EXHIBIT B Hemlock Formation Participating Area 8910086520 (s1) Hemlock Oil Pool Initial Participating Area Effective Date April 1, 1963 as to Block 1 and February 1, 1963 as to Block 2 Revised March 1, 2011 Committed Basic Participating Royalty Owner Acreage and Serial and Lessee Percentage Number Percentage of Record 145.00 A-028077 USA 4.5833333% Marathon 6.05% CIRI 7.9166667% 207.50 A-028384 USA 1.5625% Union 8.65% CIRI 10.9375% 52.50 A-028396 USA 0.6085983% Union 2.19% CIRI 11.8914017% None 2.1773995% Union 100% None 0.5509083% Union 100% Swanson Overiding River Field Working Royalty Owner Tract Interest Owner and Percentage Participation Participation Russell R. 1.5215563% Union 100% Simonson - 1% None 2.1773995% Union 100% None 0.5509083% Union 100% Description of Participating Lands Tract No. (Unsurveyed) BLOCK 1 SWANSON RIVER UNIT 11 T8N, R9W, S.M. Sec 28: That portion of Lot 1 lying within: E/2 SE/4; E/2 W/2 SE/4; SE/4 NW/4 NW/4 SE/4; E/2 SW/4 NW/4 SE/4; E/2 NW/4 SW/4 SE/4; E/2 SW/4 SW/4 SE/4; SW/4 SWA SW/4 SEA; SEA NE/4; SE/4 NE/4 NE/4; E/2 N E/4 N E/4 N E/4; SE/4 SWA NE/4 NE/4; E/2 SE/4 SW/4 NE/4; SW/4 SEA SW/4 NE/4 Sec 33: That portion of Lot 1 lying within: NE/4; E/2 SE/4 NW/4; E/2 NW/4 SE/4 NW/4; SW/4 NW/4 SE/4 NW/4; SWA SE/4 NW/4; E/2 SE/4 NEA NW/4; SW/4 SE/4 NE/4 NW/4; E/2 SE/4 SW/4 NW/4; SW/4 SE/4 SW/4 NW/4; E/2 SW/4; E/2 NW/4 SW/4; E/2 NW/4 NW/4 SW/4; SW/4 NW/4 NW/4 SW/4; SWA NW14 SW/4; SW/4 SW/4 Portion of Hungry Lake 17 T8N. R9W, S.M. Sec 10: That portion of Lot 2 Lying within: SE/4 SEA SW/4 SEA; W/2 SE/4 SWA SE/4; SE/4 NW/4 SW/4 SEA; W/2 NW/4 SW/4 SE/4; SW/4 SW/4 SEA; E/2 SE/4 SW/4; S/2 NW/4 SE/4 SW/4; SWA SE/4 SW/4; E/2 SE/4 SW/4 SWA; SWA SE/4 SW/4 SW/4 EXHIBIT B 8910086520 (s1) (Continued) Hemlock Oil Pool Initial Participating Area Effective Date April 1, 1963 as to Block 1 and February 1, 1963 as to Block 2 Revised March 1, 2011 Committed Basic Participating Royalty Owner Acreage and Serial and Percentage Number Percentage 575.00 23.98% 67.50 2.82% A-028399 USA 5.6818182% CIRI 6.8181818% A-028405 USA 1.9646983% CIRI 10.5353017% Swanson Overiding River Field Working Lessee Royalty Owner Tract Interest Owner & of Record and Percentage Participation Participation Union None Union None 6.0337576% Union 100% 0.7083107% Union 100% Description of Participating Lands Tract No. (Unsurveyed) BLOCK 1 SWANSON RIVER UNIT 18 T8N, R9W, S.M. Sec 15: E/2 NW/4; E/2 NW/4 NW/4; E/2 NW/4 NW/4 NW/4; SWA NW/4 NW/4; SW/4 NW/4; SW/4 Sec 22: That portion of Lot 2 lying within: NW/4 NE/4 SE/4 SE/4; W/2 SE/4 SEA; W/2 SE/4 NE/4 SE/4; SW/4 NE/4 NE/4 SE/4; W/2 NE/4 SE/4; W/2 SE/4; SW/4 SW/4 SE/4 NEA; NW/4 NW/4 NE/4; NE/4 SW/4 NW/4 NE/4; NW/4 NE/4 NW/4 NE/4; W/2 SW/4 NW/4 NE/4; S/2 S/2 SW/4 NE/4; W/2 NW/4 SW/4 NE/4; NW/4 SW/4 SW/4 NE/4; NW/4; SW/4 Sec 27: That portion of Lot 1 lying within: W/2 W/2 W/2 SE/4; NW/4 NW/4 NE/4 NE/4; NE/4 SE/4 NW/4 NEA: W/2 SE/4 NW/4 NE/4; NE/4 NW/4 NE/4; W/2 NW/4 NE/4; NE/4 NW/4 SW/4 NEA; W/2 NW/4 SWA NE/4; W/2 SW/4 SWA NE/4; NW/4; SWA Sec 34: That portion of Lot 2 lying within: W/2 NW/4 NW/4 NE/4; NW/4 SWA NW/4 NE/4; NE/4 .NEA SEA NW/4; W/2 NE/4 SE/4 NW/4; NW/4 SE/4 NW/4; NE/4 SW/4 SE/4 NW/4; W/2 SW/4 SEA NW/4; NE/4 NW/4; W/2 NW/4 EXHIBIT B 8910086520 (s1) (Continued) Hemlock Oil Pool Initial Participating Area Effective Date April 1, 1963 as to Block 1 and February 1, 1963 as to Block 2 Revised March 1, 2011 Committed Basic Participating Royalty Owner Acreage and Serial and Percentage Number Percentage 1350.00 A-028406 USA 8.9583333% 56.31% CIRI 3.5416667% Swanson Overiding River Field Working Lessee Royalty Owner Tract Interest Owner & of Record and Percentage Participation Participation Union None 14.1662135% Union 100% Block 1 Total 2397.50 Block 1 Total 25.1581459% 100% Description of Participating Lands Tract No. (Unsurveved) BLOCK 2 SOLDOTNA CREEK UNIT 9 T8N, R9W, S.M. Sec 33: That portion of Lot 1 lying within the SE/4; Sec 34: That portion of Lot 2 lying within: SW/4 NW/4 SE/4; W/2 SW/4 SE/4; SEA SW/4; S/2 SE/4 NEA SW/4; NW/4 NE/4 SWA; NW/4 SW/4 NE/4 SW/4; S/2 SWA NE/4 SW/4; W/2 SW/4 12 T7N, R9W, S.M. Sec 16: That portion of Lot 1 lying within: NE/4 NE/4 NE/4 NE/4; W/2 NE/4 NE/4 NE/4; NW/4 NE/4 NE/4; N/2 SW/4 NE/4 NE/4; SW/4 SW/4 NEA NE/4; NW/4 NE/4; NE/4 NE/4 SW/4 NE/4; W/2 NE/4 SW/4 NE/4; NW/4 SWA NE/4; NW/4 SW/4 SW/4 NE/4; N/2 SE/4 SE/4 NW/4; SW/4 SE/4 SE/4 NW/4; N/2 SEA NW/4; N/2 SW/4 SEA NW/4; SE/4 SW/4 SE/4 NW/4; NE/4 NWA; SEA NW/4 NW/4; N/2 NW/4 NW/4; NE/4 SW/4 NW/4 NW/4; E/2 NE/4 SWA NW/4; NW/4 NE/4 SW/4 NW/4 15 T7N, R9W, S.M. Sec 5: That portion of Lot 1 lying within: SE/4; E/2 NE/4; SE/4 NW/4 NE/4; S/2 NE/4 NW/4 NE/4; NEA NE/4 NW/4 NE/4; S/2 SW/4 NW/4 NE/4; SW/4 NE/4; SEA SW/4; E/2 E/2 NE/4 SW/4; SE/4 SW/4 NW/4 SW/4; S/2 SE/4 NW/4 SW/4; E/2 SWA SW/4; E/2 W/2 SW/4 SW/4; Portion of Hungry Lake IWAMI 8910086520 (s1) (Continued) Hemlock Oil Pool Initial Participating Area Effective Date April 1, 1963 as to Block 1 and February 1, 1963 as to Block 2 Revised March 1, 2011 Committed Basic Participating Royalty Owner Acreage and Serial and Percentage Number Percentage 332.50 A-028990 USA 2.0833333% 10.74% CIRI 10.4166667% 200.00 A-028993 USA 1.8229167% 6.46% CIRI 10.6770833% 810.00 A-028996 USA 11.1607143% 26.17% CIRI 1.3392857% Fred W. (a) 5.0% 4.5710525% Union 100% Axford Fred W. (a) 5.0% 18.5127626% Union 100% Axford Swanson Overiding River Field Working Lessee Royalty Owner Tract Interest Owner of Record and Percentage Participation & Participation Fred W. (a) 5.0% 7.5993748% Union 100% Axford Fred W. (a) 5.0% 4.5710525% Union 100% Axford Fred W. (a) 5.0% 18.5127626% Union 100% Axford Description of Participating Lands Tract No. (Unsurveyed) BLOCK 2 SOLDOTNA CREEK UNIT 15 T7N. R9W, S.M. (Continued) Sec 8: That portion of Lot 1 Eying within: E/2 SE/4; NW/4 SE/4; E/2 SE/4 SW/4 SE/4; NW/4 SE/4 SW/4 SE/4; NE/4 SW/4 SE/4; E/2 NW/4 SW/4 SE/4; NW/4 NW/4 SW/4 SE/4; NE/4; NE/4 NW/4; E/2 SE/4 NW/4; NW/4 SE/4 NW/4; NE/4 SW/4 SE/4 NW/4; E/2 SE/4 NW/4 NW/4; NE/4 NW/4 NW/4; NE/4 NE/4 SE/4 SW/4; E/2 NE/4 SW/4; SE/4 NW/4 NE/4 SW/4; NE/4 SW/4 NE/4 SW/4 16 T7N, R9W, S.M. Sec 3: That portion of Lot 2 lying within: W/2 NW/4 NW/4 SE/4; NW/4 SW/4 NW/4 SE/4; NW/4 NW/4 NE/4; W/2 SW/4 NW/4 NE/4; W/2 W/2 SW/4 NE/4; NW/4; NE/4 NE/4 SE/4 SW/4; W/2 NE/4 SE/4 SW/4; W/2 SE/4 SW/4; N/2 SW/4; SW/4 SW/4 Sec 4: Lot 1 and Lot 2; Portion of Hungry Lake Sec 9: All Sec 10: That portion of Lot 2 lying within: W/2 NW/4 NE/4 NW/4; NW/4 SW/4 NE/4 NW/4; W/2 NW/4; NW/4 SE/4 NW/4 SW/4; W/2 NE/4 NW/4 SW/4; W/2 NW/4 SW/4; NE/4 NW/4 SW/4 SW/4; W/2 NW/4 SW/4 SW/4; NW/4 SW/4 SW/4 SW/4 EXHIBIT B 8910086520 (s1) (Continued) Hemlock Oil Pool Initial Participating Area Effective Date April 1, 1963 as to Block 1 and February 1, 1963 as to Block 2 Revised March 1, 2011 Committed Basic Participating Royalty Owner Acreage and Serial and Percentage Number Percentage 1745.00 A-028997 USA 9.375% 56.38% CIRI 3.125% Lessee of Record Fred W Axford Swanson Overiding River Field Working Royalty Owner Tract Interest Owner & and Percentage Participation Participation (a) 5.0% 39.8824329% Union 100% EXHIBIT B 8910086520 (s1) (Continued) Hemlock Oil Pool Initial Participating Area Effective Date April 1, 1963 as to Block 1 and February 1, 1963 as to Block 2 Revised March 1, 2011 Block 2 Total 3095.00 Block 2 Total 70.7370372% Committed Basic Description of Participating Royalty Owner Participating Lands Acreage and Serial and Tract No. (Unsurveyed) Percentage Number Percentage BLOCK 2 SOLDOTNA CREEK UNIT and Percentage Participation 20 T7N, R9W, S.M. 7.50 A-029002 USA 12.5% 0.1714145% .24% Axford Sec 17: That portion of Lot 1 lying within: N/2 NE/4 NE/4 NE/4; NE/4 NW/4 NE/4 NE/4 Block 2 Total 3095.00 Block 2 Total 70.7370372% Swanson Overiding River Field Working Lessee Royalty Owner Tract Interest Owner & of Record and Percentage Participation Participation Fred W. (a) 5.0% 0.1714145% Union 100% Axford Block 2 Total 3095.00 Block 2 Total 70.7370372% EXHIBIT B 8910086520 (s1) (Continued) Hemlock Oil Pool Initial Participating Area Effective Date April 1, 1963 as to Block 1 and February 1, 1963 as to Block 2 Revised March 1, 2011 RECAPITULATION Swanson River Land Category Number of Tracts Acres Tract Participation Block 1 U.S. Public Domain Lands 6 2397.50 25.1581459% Block 2 U.S. Public Domain Lands 5 3095.00 70.7370372% Totals 11 5492.50 95.8951830% DIVISION OF OVERRIDING ROYALTY {a} Overriding Royalty interest to Weststar Escrow Servicing as collecting agent for: Estate of Fred W_ Axford 7.142% Rodney L. Johnston 3.571% Ethel Waster Trust 7.142% Dorothy Raykovich 7.142% Locke Jacobs, Jr. 7.142% Phil Raykovich 7.142% E. E. Rasmuson 7.142% Estate of Howard E. Cruver 7.142% H. Willard Nagley, Jr. 7.142% Glenn S. Miller 7.142% George R. Jones 7.142% Robert B. Atwood 7.154% C. R. Foss 7.142% 4M Partnership 1.429% J. F. & Mary Jean McMenamin 5.713% John M. Johnson 3.571% LEGEND USA: United States of America CIRI: Cook Inlet Region, Inc. UNION: Union Oil Company of California Marathon: Marathon Oil Company SWANSON RIVER FIELD Hemlock Formation 8910086520 (s1) Sixteenth Revision to the Hemlock Initital Participation Area Effective Date April 1, 1963 as to Block 1 and February 1, 1963 as to Block 2 Revised March 1, 2011 Block 1 -Swanson River Unit TRACT # COMMITTED ACREAGE TRACT FACTOR USA ROYALTY CIRI ROYALTY ROYALTY DECIMAL ORR DECIMAL UNOCAL USA ROY NTINT CIRI ROY NTINT ROYALTY NTINT ORR NTINT ROY+ORR NTINT UNOCAL UNOCAL NTINT 2 145.0000 0.0152156 0.0458333 0.0791667 0.1250000 0.0100000 1.0000000 0.0006974 0.0012046 0.0019019 0.0001522 0.0020541 0.0152156 0.0131615 6 207.5000 0.0217740 0.0156250 0.1093750 0.1250000 0.0000000 1.0000000 0.0003402 0.0023815 0.0027217 0.0000000 0.0027217 0.0217740 0.0190523 8 52.5000 0.0055091 0.0060860 0.1189140 0.1250000 0.0000000 1.0000000 0.0000335 0.0006551 0.0006886 0.0000000 0.0006886 0.0055091 0.0048205 17 575.00001 O.G6O33761 0.05681821 0.0681818 1 0.1250000 0.00000001 1.000000010.0034283 0.0373898 0.0041139 0.0075422 0.0000000 0.0075422 0.0603376 0.0527954 17 57.5000 0.0070831 0.0198470 0.1053530 0.1250000 0.0000000 1.0000000 0.0001392 0.0007462 0.0008854 0.0000000 0.0008854 0.0070831 0.0061977 18 1350.0000 0.1416621 0.0895833 0.0354167 0.1250000 0.0000000 1.0000000 0.0126906 0.0050172 0.0177078 0.0000000 0.0177078 0.1416621 0.1239543 TOTALS 2397.5000 0.2515815 0.0100000 0.0173291 0.0141166 0.0314476 0.0001522 0.0315998 0.2515815 0.2199817 Block 2-Soldotna Creek Unit TRACT # COMMITTED ACREAGE TRACT FACTOR • USA ROYALTY CIRI ROYALTY ROYALTY DECIMAL *ORR DECIMAL UNOCAL USA ROY NTINT CIRI ROY NTINT ROYALTY NTINT ORR NTINT ROY+ORR NTINT UNOCAL UNOCAL NTINT 9 332.5000 0.0759937 0.0208333 0.1041667 0.1250000 0.0500000 1.0000000 0.0015832 0.0079160 0.0094992 0.0037997 - 0.0132989 0.0759937 0.062694B 12 200.0000 0.0457105 0.0182292 0.1067708 0.1250000 0.0500000 1.0000000 0.0008333 0.0048806 0.0057138 0.0022855 0.0079993 0.0457105 0.0377112 15 810.0000 0.1851276 0.1116071 0.0133929 0.1250000 0.0500000 1.0000000 0.0206616 0.0024794 0.0231410 0.0092564 0.0323973 0.1851276 0.1527303 16 1745.0000 0.3988243 0.0937500 0.0312500 0.12500001 0.05000001 1.00000001 0.0373898 0.0124533 0.0498530 0.0199412 0.0697943 0.3968243 0.3290300 20 7.5000 0.0017141 0.1250000 0.0000000 0.1250000 0.0500000 1.0000000 0.0002143 0.0000000 0.0002143 0.0000857 0.0003000 0.0017141 0.0014141 TOTALS 3095.0000 0.7073704 1 1 1 0.0606821 0.0277392 0.0884213 0.0353685 0.1237898 0.7073702 0.5835804 Exhibit A Swanson River Field Sterling -Upper Beluga Participating Area - 8910086520-A "B" Zone Gas Pools 6 5 ( 4 3 2 1 6 A028405 I 7 j 4 s A02 s. __ z 18 I 17 ii !j 14 1� � s A028384 i 8N9W19 i 20i I J 22 23 s 2 �:. -- i ! r__ s _ , e ' a iQ2 4fi6 37 29 I 27 i A028391 I Block 1 A928396 A028990 31 32 --- i 8 Bock 2 i 2 i 1 6 15 A028996 16 A028997 B Zone #1 (S2) 10 B Zone #2 (S5)(S6) 7N 31A 7 Leases Unit Tracts CIRII5810 At2902 18 17 12 16 15 14 i 13 13 02993 IRI 580 i UNOCAL" April 1, 2005 Scale: 1:62,000 Exhibit A-1 Swanson River Field Sterling -Upper Beluga Formation - 8910086520-A "B" Zone Gas Pool #1 Initial Participating Area 6 54 -- ---- - --- — -- --- - 3 2 i 6 A02 405 11 12 7 A02 r0 18 176 1; 1.5 14 1_[1 ' t - 028;ic 4;; .. f 3N9W19 � I i0 i 9 1 /f_' 9-3 '1 E 1$ A,02 406i 30 1 29 37 -.9 A02 i t Ag2B3_s6 Block 1 - A028990 31 I 32 35 36 °1 � Block 2 4 3 s I �� 2 1 15 A020996 16 A026997 7 F; 7N9 9 10 7N ;h B Zone #1 (S2) 7 t Leases Unit Tracts 1 cIF�I 5810 29 2 18 '17 12 16 15 02I993 14 13 18 9R158a UNOCAL4N., April 1, 2005 Scale: 1:62,000 EXHIBIT B Sterling -Upper Beluga Formation Participating Area 8910086520-A (s2) "B" Zone Gas Pool #1 Initial Participating Area Effective Date April 12, 1962 Revised March 1, 2011 None 0.2408147% Union 100% Committed Basic River Field Description of Participating Tract Royalty Owner and Percentage Participating Lands Acreage and Serial and Lessee Tract No. (Unsurveyed) Percentage Number Percentage of Record BLOCK 1 SWANSON RIVER UNIT 2 T8N, R9W, S.M. 570.00 A-028077 USA 4.5833333% Marathon 55.21% CIRI 7.9166667% Sec 9: That portion of Lot 2 lying within: SE/4 SE/4; NE/4 SE/4; E/2 SE/4 NW/4 SE/4; SE/4 NE/4 NW/4 SE/4; E/2 SE/4 NEA; E/2 SW/4 SE/4 NE/4: SW/4 SW14 SE/4 NE/4 Sec 16: E/2 SE/4; E12 W/2 SE/4; SE/4 SW/4 NW/4 SE/4; E/2 W/2 SWA SE/4; SW/4 SW/4 SW/4 SE/4; E/2 NE/4 E/2 E/2 NW/4 NE/4; E/2 SW/4 NE/4 Sec 21: That portion of Lot 1 lying within: NE/4 NW/4 NE/4 SE/4; W/2 NW/4 NE/4 SE/4; N/2 NW/4 SE/4; N/2 812 NW/4 SEA; E/2 NEA SE/4 NE/4; W/2 E/2 SE/4 NE14; W/2 SEA NE/4; N/2 NE/4; SW/4 NE/4; SE/4 SE/4 NE/4 NW/4; E/2 E/2 SEA NW/4; E/2 NE/4 NEA SW/4 17 T8N, R9W, S.M. 217.50 A-028405 USA 1.9646983% Union 21.06% CIRI 10.5353017% Sec 10: That portion of Lot 2 lying within: W/2 E/2 SEA SW/4; W/2 SE/4 SW/4; SE/4 NE/4 SW/4; S/2 NE/4 NE/4 SWi4; NW/4 NE/4 NE14 SW/4; W/2 NE/4 SW/4; W/2 SW/4; W/2 SE/4 SE/4 NW/4; SE/4 NW/4 SEA NW/4; W/2 NW/4 SE/4 NW/4; SW/4 SE/4 NW/4; SW/4 NW/4; SW/4 SE/4 NW/4 NW/4;. S/2 SW/4 NW/4 NW/4 None 0.2408147% Union 100% Swanson Overiding River Field Working Royalty Owner Tract Interest Owner & and Percentage Participation Participation Russell R_ 0.6311005% Union 100% Simonson - I% None 0.2408147% Union 100% Description of Participating Lands Tract No. (Unsurveyed) BLOCK 1 SWANSON RIVER UNIT 18 T8N. R9W, S.M_ Sec 15: NW/4 NE/4 SE/4 NW/4; W/2 SE/4 NW/4; W/2 E/2 NE/4 NW/4; W/2 NE/4 NW/4; W/2 NW/4; NE/4 NW/4 NE/4 SW/4; W/2 W/2 NE14 SW/4; NW/4 SW/4; NE/4 SE/4 SW/4 SW/4; E/2 NEA SW/4 SW/4; W/2 E/2 SW/4 SW/4; W/2 SW/4 SW/4 Sec 22: That portion of Lot 2 lying within: NW/4 NE/4 NW/4 NW/4; NW/4 NW14 NW/4; NE/4 SW/4 NW/4 NW/4; W2 SW/4 NW/4 NW/4; NW/4 NW/4 SWA NW/4 EXHIBIT B 8910086520-A (s2) (Continued) "B" Zone Gas Pool #1 Initial Participating Area Effective Date April 12, 1962 Revised March 1, 2011 Committed Basic Swanson Participating Royalty Owner Overiding River Field Working Acreage and Serial and Lessee Royalty Owner Tract Interest Owner & Percentage Number Percentage of Record and Percentage Participation Participation 245.00 A-028406 USA 8.9583333% Union None 0.2712625% Union 100% 23.73% CIRI 3.5416667% Total Block 1 1032.50 Total 1.1431776% 100.00% 8910086520-A (s2)- RECAPITULATION "B" Zone Gas Pool #1 Initial Participating Area Effective Date April 12, 1962 Revised March 1. 2011 LAND CATEGORY NO. OF TRACTS ACRES Block 1 U.S_ Public Domain Lands 1Q zQ United States of America Union: Union Oil Company of California Cook Inlet Region, Inc. Marathon: Marathon Oil Company SWANSON RIVER TRACT PARTICIPATION 1.1431 16% SWANSON RIVER FIELD Sterling -Upper Beluga Formation 8910086520-A(s2) "B" Zone Gas Pool # 1 Initial Participating Area Effective Date April 12, 1962 Revised March 1, 2011 Block 1 - Swanson River Unit TRACT # COMMITTED ACREAGE TRACT FACTOR USA I ROYALTY CIRI ROYALTY ROYALTY DECIMAL ORR DECIMAL UNOCAL USA ROY I NTINT I CIRI ROY NTINT ROYALTY NTINT ORR NTINT ROY+ORR NTINT UNOCAL UNOCAL NTINT 2 570.0000 0.0063110 0.0456333 0.0791667 0.1250000 0.0100000 1.0000000 0.0002893 0.0004996 0.0007889 0.0000631 0.0008520 0.0063110 0.0054590 17 217.5000 0.0024081 0.0196470 0.1053530 0.1250000 0.0000000 1.0000000 0.0000473 0.0002537 0.0003010 0.0000000 0.0003010 0.0024081 0.0021071 18 245.0000 0.0027126 0.0895833 0.0354167 0.1250000 0.0000000 1.0000000 0,0002430 0.0000961 0.000339t 0.0000000 0.0003391 0.0027126 "0:0023735 TOTALS 1032.5000 0.0114318 1 0.0005796 0.0008494 1 0.0014290 0.0000631 0.0014921 0.0114317 0.0099396 Exhibit A-2 Swanson River Field Sterling -Upper Beluga Formation - 8910086520-A "B° Zone Gas Pool #2 Initial Participating Area G - 5 4 3 2 1 g 7 8 r i �� jjq ft�2z A04405 1 1 11 1 12 1i 7 I A02 077 8 l 17 p 1 ; 1 i A028384 4 21 PJgW `2 I 23 i 3 A02B406 30 29 j 2.7 2': �-- 34 A026396 Block 1 , A028990 31 32 35 36 3i 9 a Block 2 I 4 3 2 I 1 6 i 1615 A�i20+J9 A026997 .. ...... _. ... t 7 p 7f 11'. V 7 48W B Zone #2 (S5)(S6) 7 Leases I Af 29C 2 i Unit Tracts 18 c1111H 681017 12 16 X028993 15 � 14 i 13 18 f' 58 NOICAL W April 1, 2005 Scale: 1:62,000 EXHIBIT B Sterling -Upper Beluga Formation Participating Area 8910086520-A (s5) "B" Zone Gas Pool #2 Initial Participating Area Effective Date October 6, 1961 Revised March 1, 2011 Basic Royalty Owner Serial and Number Percentage A-028399 USA 5.6818182% CIRI 6.8181818% Committed Description of Participating Participating Lands Acreage and Tract No. (Unsurveyed) Percentage BLOCK 1 SWANSON RIVER UNIT of Record and Percentage 11 T8N, R9W, S.M. 327.50 100.00% Sec 28: That portion of Lot 1 lying within: Union 100% W/2 W/2 SE/4 SE/4; E/2 NW/4 SE/4; E/2 W/2 NW/4 SE/4 ; SW/4 NW/4 NW/4 SE/4; W/2 SW/4 NW/4 SE/4; SW/4 SE/4; SE/4 SE/4 NE/4 SW/4; E/2 SE/4 SW/4; SE/4 SW/4 SE/4 SW/4 Sec 33: That portion of Lot 1 lying within: W/2 NW/4 NE/4 NE/4; NW/4 NE/4; W/2 NE/4 SW/4 NE/4; W/2 SW/4 NE/4; E/2 NE/4 NW/4; E/2 W/2 NE/4 NW/4; W/2 SW/4 NE/4 NW/4; SE/4 NW/4; E/2 SE/4 SW/4 NW/4; E/2 E/2 NW/2 SW/4; NE/4 SW/4; NE/4 SE/4 SW/4; N/2 NW/4 SE/4 SW/4 Block 1 Total 327.50 100.00% Basic Royalty Owner Serial and Number Percentage A-028399 USA 5.6818182% CIRI 6.8181818% Total 0.1044470% Swanson Overiding River Field Working Lessee Royalty Owner Tract Interest Owner & of Record and Percentage Participation Participation Union None 0.1044470% Union 100% Total 0.1044470% EXHIBIT B 8910086520-A (s5) - RECAPITULATION LAND CATEGORY Block 1 U.S. Public Domain Lands Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California "B" Zone Gas Pool #2 Initial Participating Area Effective Date May 6, 1962 Revised March 1. 2011 SWANSON RIVER NO. OF TRACTS ACRES TRACT PARTICIPATION 1 a=4_ 0.1044470% SWANSON RIVER FIELD Sterling -Upper Befuga Formation 8910086520-A (s5) "B" Zone Gas Pool # 2 Initial Participating Area Effective Date October 6, 1961 Revised March 1, 2011 Block 1 - Swanson River Unit TRACT COMMITTED TRACT USA CIRI ROYALTY I ORR USA ROY I CIRI ROY I ROY I ORR ROY+ORR I UNOCAL # ACREAGE I FACTOR I ROYALTY_..j ROYALTY I DECIMAL I DECIMAL UNOCAL I NTINT NTINT NTINT NTINT NTINT UNOCAL I NTINT 11 327.5000 0.0010445 1 0.0568182 0.06818181 0.12500001nnnnnnn I nnnnnsnz I nnnnn7 o I nnnn,a ,.------- I 0.0010445 EXHIBIT B Sterling -Upper Beluga Formation Participating Area 8910086520-A (s6) "B" Zone Gas Pool #2 Initial Participating Area Effective Date May 6, 1962 Revised March 1, 2011 Committed Basic Swanson Description of Participating Royalty Owner Overiding River Field Working Participating Lands Acreage and Serial and Lessee Royalty Owner Tract Interest Owner & Tract No. (Unsurveyed) Percentage Number Percentage of Record and Percentage Participation Participation BLOCK 2 SOLDOTNA CREEK UNIT 9 T8N, R9W, S.M. 37.50 A-028990 USA 2.0833333% Fred W. (a) 5.0% 0.0103179% Union 100% 100.00% CIRI 10.4166667% Axford Sec 33: That portion of Lot 1 lying within: W/2 NW/4 SEA; W/2 NE/4 NW/4 SE/4; W/2 SEX NW/4 SE/4; N/2 NW/4 SW/4 SE/4; SW/4 NW/4 SW/4 SE/4 Block 2 Total 37.50 Total 0.0103179% 100.00% EXHIBIT B 8910086520-A (s6)- RECAPITULATION "B" Zone Gas Pool #2 Initial Participating Area Effective Date May 6, 1962 Revised March 1, 2011 SWANSON RIVER LAND CATEGORY NO. OF TRACTS ACRES TRACT PARTICIPATION Block 2 U.S. Public Domain Lands L 37 50 0.0103179% Legend DIVISION OF OVERRIDING ROYALTY United States of America " (a) Overriding Royalty interest to Weststar Escrow Servicing as collecting agent for: Union: Estate of Fred W. Axford 7.142% Rodney L. Johnston 3.571% Ethel Waster Trust 7.142% Dorothy Raykovich 7.142% Locke Jacobs, Jr. 7.142% Phil Raykovich 7.142% E. E. Rasmuson 7.142% Estate of Howard E. Cruver 7.142% H. Willard Nagley, Jr. 7.142% Glenn S. Miller 7.142% George R. Jones 7.142% Robert B. Atwood 7.154% C. R. Foss 7.142% 4M Partnership 1.429% J. F. & Mary Jean McManamin 5.713% John M. Johnson 3.571% Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California SWANSON RIVER FIELD Sterling -Upper Beluga Formation 8910086520-A (s6) "B" Zone Gas Pool # 2 Initial Participating Area Effective Date May 6, 1962 Revised March 1, 2011 Block 2 - Soldotna Creek Unit TRACT COMMITTED I TRACT I USA CIRI I ROYALTY ORR USA ROY CIRI ROY ROY ORR ORR+ROY UNOCAL # ACREAGE FACTOR ROYALTY ROYALTY DECIMAL DECIMAL UNOCAL NTINT NTINT NTINT NTINT NTINT UNOCAL NTINT 9 37.5000 0.0001032 0.0208333 0.1041667 0.1250000 0.0500000 1.0000000 0.0000021 0.0000107 0.0000129 0.0000052 0.0000181 0.0001032 0.0000851 TOTALS 37.5000 0.0001032 1 1 1 _ 0.0000021 1 nnnnnin7nnnnn—o I - _ _. Exhibit A Swanson River Field Beluga Participating Area - 8910086520-B "C" Zone Gas Pools 4 3 7 j 8 A A02 OT 17 2 < 19 20 21 NZ 30 31 29 32 A A026996 7 A 8 CI Ppl 581017 18 A028406 27 o- 816ck 1 9 Block 2 400 16 A028997 9 1 10 15 2 11 14 A028U4 23 1 6 12 7 MIMI ;7 1=111 91 A028990 35 36 31 2 C Zone #1 (S3) C Zone #2 (S7) C Zone #3 (S10) 7 48VV C Zone #4 (SI 1) ? 7 E= Leases =:1 Unit Tracts 14 13 8 April 1, 2005 UNOCAL(7,16., Scale: 1:62,000 Exhibit A-1 Swanson River Field Beluga Formation - 8910086520-B "C" Zone Gas Pool #1 Initial Participating Area .._.5.---------...._._. 4 7 8 A02 077 18 i 17 077 2 19 1 20 1 21 30 29 A02 396 31 j 32 15 028996 7 10 18 CIR11 581017 2 jjj_,A0+05 11 M 22 18 A028406 27 11 Block I Block 2 4 3 16 A028997 7N9 9 .10 12 16 IRI 580P 14 A028334 23 1 6 12 7 MIMI 1301 A02$990 36 36 j3! 2 iI 16 7 q8l& C T-L-i--]CZone #1(S3) 2 7 Leases Unit Tracts — 14 i13 18 UNOCAL04, April 1, 2005 Scale: 1:62,000 Description of Participating Lands Tract No. (Unsurveyed) BLOCK 1 SWANSON RIVER UNIT 2 T8N, R9W, S.M. Sec 9: That portion of Lot 2 lying within: NE14 NE/4 NEA SEA; E/2 E/2 SE/4 NE/4 Sec: 16: E/2 E/2 SE/4 SE/4; E/2 NE/4 SE/4; E/2 SE/4 SE/4 NE/4; SE/4 NE/4 SE/4 NE/4 17 T8N R9W. S.M. Sec 10: That portion of Lot 2 lying within: SE/4 SW/4 SE/4 NW/4; W/2 W/2 SE/4 NW/4; SE/4 SE/4 NW/4 NW/4; W/2 SE/4 NW/4 NW/4; E/2 SW/4 NW/4 NW/4; SW/4 SW/4 NW/4 NW/4; SW/4 NW/4; W/2 SE/4 SW/4; W/2 NE/4 SW/4; W/2 SW/4; SW/4 SE/4 SE/4 SW/4 18 T8N, R9W, S.M. Sec 15: W/2 E/2 SE/4 NW/4; W/2 SE/4 NW/4; W/2 E/2 NE/4 NW/4; W/2 NE/4 NW/4; W/2 NW/4; NE/4 NW/4 SE/4 SW/4; W/2 NW/4 SE/4 SW/4; NW/4 SW/4 SE/4 SW/4; NW/4 SE/4 NE/4 SW/4; W/2 NE/4 NE/4 SW/4; W/2 NE/4 SW/4; W/2 SW/4 Sec 22: That portion of Lot 2 lying within: NW/4 NE/4 NW/4 NW/4; N/2 NW/4 NW/4 NW/4 EXHIBIT B Beluga Formation Participating Area 8910086520-B(s3) "C" Zone Gas Pool #1 Initial Participating Area Effective Date August 3, 1960 Revised March 1, 2011 Committed Basic Swanson Participating Royalty Owner Overiding River Field Working Acreage and Serial and Lessee Royalty Owner Tract Interest Owner & Percentage Number Percentage of Record and Percentage Participation Participation 50.00 A-028077 USA 4.5833333% Marathon Russell R. 0.0159937% Union 100% 9.90% CIRI 7.9166667% Simonson - 1 % 190.00 A-028405 USA 1.9646983% Union None 0.0607761% Union 100% 37.62% CIRI 10.5353017% 265.00 A-028406 USA 8.9583333% Union None 0.0847667% Union 100% 52.48% CIRi 3.5416667% 5u5.uu Total Total 100.00% 0.1615365% Wro 8910086520-B (s3) - RECAPITULATION LAND CATEGORY Block 1 U.S. Public Domain Lands Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California Marathon: Marathon Oil Company "C" Zone Gas Pool #1 Initial Participating Area Effective Date April 12, 1962 Revised March 1, 2011 SWANSON RIVER NO, OF TRACTS ACRES TRACT PARTICIPATION 13 505.00 0.1615365% SWANSON RIVER FIELD Beluga Formation 8910086520-B(s3) "C" Zone Gas Pool # 1 Initial Participating Area Effective Date August 3, 1960 Revised March 1, 2011 Block 1 - Swanson River Unit TRACT # COMMITTED ACREAGE TRACT FACTOR USA ROYALTY CIRI ROYALTY ROYALTY DECIMAL ORR DECIMAL UNOCAL USA ROY NTINT CIRI ROY NTINT ROYALTY NTINT ORR NTINT ROY-ORR NTINT UNOCAL UNOCAL NTINT 2 50.0000 0.0001599 0.0458333 0.0791667 0.1250000 0.0100000 1.0000000 0.0000073 0.0000127 1 0.0000200 0.0000016 0.0000216 0.0001599 0.0001383 17 190.0000 0.0006078 0.0196470 0.1053530 0.1250000 0.0000000 1.0000000 0.0000119 0.0000640 0.0000760 0.0000000 0.0000760 0.0006078 0.0005318 16 265.0000 0.0008477 0.0895833 0.0354167 0.1250000 0.0000000 1.000000D 0.0000759 0.0000300 1 0.0001060 0.0000000 0.0001060 0.0008477 0.0007417 TOTALS 505.0000 0.0016154 1 1 1 0.0000952 0.0001067 0.0002019 0.0000016 0.0002036 1 0.0016154 0.0014118 Exhibit A-2 Swanson River Field Beluga Formation - 8910086520-B "C" Zone Gas Pool #2 Initial Participating Area r�..— — — — . ----- 2 7"o A02�405 i; 17 E 11 12 F A023077 I 18 17 13 -13 6 14 13 18 2 n s 19 20 - 21 P19W -�_ 23 i � 8,N97 19 18 A028406 p i yy 30 t 29 A02 _ 27 39 i A02 396 Block 1 3.I 32 -ia - _I A02 99I3 i 35 36 � 31 9 i Block 2 —� C �- 4 3 2 I � b 15 A028996 16 A028997 _ 7 8 7Pl9 � 10 7.tipjvy 2 7 (S7) C Zone #2 - Leases ® Unit Tracts ----- A(29 2 18 GI $ X81017 1 g 02 993 15 13 18 14 I R 1 580 UNOCALF April 1, 2005 Scale: 1:62,000 Beluga Formation Participating Area 8910086520-B(s7) "C Zone Gas Pool #2 Initial Participating Area Effective Date August 17, 1961 Revised March 1, 2011 Committed Basic Swanson Description of Participating Royalty Owner Overiding River Field Working Participating Lands Acreage and Serial and Lessee Royalty Owner . Tract Interest Owner & Tract No. (Unsurveyed) Percentage Number Percentage of Record and Percentage Participation Participation BLOCK 2 SOLDOTNA CREEK UNIT 16 T7N, R9W. S.M. 32.50 A-028997 USA 9.375% Fred W. (a) 5.0% 0.6132166% Union 100% 100.00% CIRI 3.125% Axford Sec 4: That portion of Lot 1 lying within: NW/4 NE/4 SE/4; NW/4 SW/4 NE/4 SE/4; SEA SW/4 SE/4 NE/4; SEA NW/4 SE/4; S/2 NE/4 NW/4 SE/4; SE/4 SWA NW/4 SE/4 Block 2 Total 32.50 Total 0.0132166% 100.00% LAND CATEGORY Block 2 U.S. Public Domain Lands 4M 8910086520-B (s7) - RECAPITULATION "C" Zone Gas Pool #2 Initial Participating Area Effective Date August 17, 1961 Revised March 1. 2011 SWANSON RIVER NO. OF TRACTS ACRES TRACT PARTICIPATION L 32.50 0.0132166% DIVISION OF OVERRIDING ROYALTY (a) Overriding Royalty interest to Weststar Escrow Servicing as collecting agent for: Estate of Fred W. Axford 7.142% Rodney L. Johnston 3.571% Ethel Waster Trust 7.142% Dorothy Raykovich 7.142% Locke Jacobs, Jr. 7.142% Phil Raykovich 7.142% E. E. Rasmuson 7.142% Estate of Howard E_ Cruver 7.142% H. Willard Nagley, Jr. 7.142% Glenn S. Miller 7.142% George R. Jones 7.142% Robert B. Atwood 7.154% C. R. Foss 7.142% 4M Partnership 1.429% J. F. & Mary Jean McManamin 5.713% John M.'Johnson 3.571% Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California SWANSON RIVER FIELD Beluga Formation 8910086520-B(s7) "C" Zone Gas Pool # 2 Initial Participating Area Effective Date August 17, 1961 Revised March 1, 2011 Block 2 - Soldotna Creek Unit TRACT # COMMITTED ACREAGE TRACT FACTOR USA ROYALTY CIRI ROYALTY ROYALTY DECIMAL ORR DECIMAL UNOCAL USA ROY NTINT CIRI ROY NTINT ROY NTINT ORR NTINT ORR+ROY NTINT UNOCAL UNOCAL NTINT 16 32.5000 1 0.0001322 0.0937500 0.0312500 0.1250000 0.0500000 1.0000000 F 0.0000124 0.0000041 0.0000165 0.0000066 0.0000231 0.0001322 0.0001091 TOTALS 32.5000 0.0001322 „ �,.,.,.,.,. - ----- - _ _ _ __ . _ _ Exhibit A-3 Swanson River Field Beluga Formation - 8910086520-B "C" Zone Gas Pool #3 Initial Participating Area UHOCAL4.1, April 1, 2005 Scale: 1:62,000 EXHIBIT B Beluga Formation Participating Area 8910086520-B (s10) "C Zone Gas Pool #3 Initial Participating Area Tyonek Gas 54-5 Sand Effective Date November 23, 1962 Revised March 1, 2011 Committed Description of 1.5625% Participating Lands Tract No. (Unsurveved) BLOCK 1 Swanson River Unit 2 T8N, R9W, S.M. Acreage and Serial Sec 9: That portion of Lot 2 lying within: Lessee Royalty Owner SE/4 SE/4; Interest Owner & Sec 16: E/2 NE/4; 6 T8N, R9W, S.M. Participation Sec 15: W/2 SE/4, SW/4 NE/4; 17 T8N. R9W. S.M. Marathon Russell R. Sec 10: That portion of Lot 2 lying within: Union 100% SW/4 SW/4; 18 TSN, R9W. S.M. Sec 15: W/2 EXHIBIT B Beluga Formation Participating Area 8910086520-B (s10) "C Zone Gas Pool #3 Initial Participating Area Tyonek Gas 54-5 Sand Effective Date November 23, 1962 Revised March 1, 2011 Committed Basic 1.5625% Swanson CIRI Participating Royalty Owner Overiding River Field Working Acreage and Serial and Lessee Royalty Owner Tract Interest Owner & Percentage Number Percentage of Record and Percentage Participation Participation 120.00 A-028077 USA 4.5833333% Marathon Russell R. .0147378% Union 100% 20.00% CIRI 7.9166667% Simonson - 1% 120.00 A-028384 USA 1.5625% 20.00% CIRI 10.9375% 40.00 A-028405 USA 1.9646983% 6.67% CIRI 10.5353017% 320.00 A-028406 USA 8.9583333% 53.33% CIRI 3.5416667% Block 1 Total 600.00 100.00% Union None .0147378% Union 100% Union None .0049126% Union 100% Union None .0393007% Union 100% Block 1 Total .0736889% 8910086520-B (S10) - RECAPITULATION "C" Zone Gas Pool #3 Initial Participating Area Tyonek Gas 54-5 Sand Effective Date November 23, 1962 Revised March 1, 2011 SWANSON RIVER LAND CATEGORY NO. OF TRACTS ACRES TRACT PARTICIPATION Block 1 U.S. Public Domain Lands 4 600.00 .0736889% Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California Marathon: Marathon Oil Company SWANSON RIVER FIELD Beluga Formation 8910086520-B (s10) "C" Zone Gas Pool # 3 Initial Participating Area Tyonek Gas 54-5 Sand Effective Date November 23, 1962 Revised March 1, 2011 Block 1 - Swanson River Unit TRACT # COMMITTED ACREAGE TRACT FACTOR USA ROYALTY CIRI ROYALTY ROYALTY DECIMAL ORR DECIMAL UNOCAL USA ROY NTINT CIRI ROY NTINT ROYALTY NTINT ORR NTINT ROY+ORR NTINT UNOCAL UNOCAL NTINT 2 120.0000 0.0001474 0.0458333 0.0791667 0.1250000 0.0100000 1.0000000 0.0000068 0.0000117 0.0000184 0.0000015 0.0000199 0.0001474 0.0001275 6 120.0000 0.0001474 0.0156250 0.1093750 0.1250000 1.0000000 - -0.0000023 0.0000161 0.0000184 0.0000000 0.0000184 0.0001474 0.0001290 17 40.0000 0.0000491 0.0196470 0.1053530 0.1250000 1.0000000 0.0000010 0.0000052 0.0000061 0.0000000 0.0000061 0.0000491 0.0000430 18 320.0000 0.0003930 0.0895833 0.0354167 0.1250000 1.0000000 0.0000352 0.0000139 0.0000491 1 0.0000000 1 0.0000491 0.0003930 1 0.0003439 TOTALS 600.0000 0.0007369 _ 0.0000452 0.0000469 0.0000920 0.0000015 0.0000935 1 0.0007369 0.0006434 Exhibit A4 Swanson River Field Beluga Formation -O81008G520-B "C" Zone Gas Pool #4 Initial Participating Area 0��0�� xpm1.u000 ---- -- --~- Scale: 1:62,000 - 18 30 29 A02 27 M! 130 A02' 8396 Block I A02�990 31 32 35 36 Block 2 15 A028996 16 A028997 - 997 10 Leases UnitTracts At9102 18 C1 1581017 1�6 M993 15 14 13 18 MIRI ,-F .0 580 0��0�� xpm1.u000 ---- -- --~- Scale: 1:62,000 - Description of Participating Lands Tract No. (Unsurveyed) BLOCK 1 Swanson River Unit 18 T8N. R9W, S.M. Sec 22: That portion of Lot 2 lying within: S/2 NE/4, SE/4 NW/4 Block 1 Total LAND CATEGORY Block 1 U.S. Public Domain Lands Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California Marathon: Marathon Oil Company EXHIBIT B Beluga Formation Participating Area 8910086520-B(s11) "C" Zone Gas Pool #4 Initial Participating Area Tyonek Gas 54-5 Sand Revised March 1, 2011 Committed Participating Acreage and Percentage 120.00 100.00% 120.00 100.00% Basic Swanson Royalty Owner Overiding River Field Working Serial and Lessee Royalty Owner Tract Interest Owner & Number Percentage of Record and Percentage Participation Participation A-028406 USA 8.9583333% Union None .0122674% Union'100% CIRI 3.5416667% 8910086520-B (s11)- RECAPITULATION Revised March 1, 2011 Block 1 Total .0122674% SWANSON RIVER NO. OF TRACTS ACRES TRACT PARTICIPATION 1 120 00 0.0122674% SWANSON RIVER FIELD Beluga Formation 8910086520-B(s11) "C" Zone Gas Pool # 4 Initial Participating Area Tyonek Gas 54-5 Sand Effective Date November23, 1962 Revised March 1, 2011 Block 1 - Swanson River Unit TRACT COMMITTED TRACT USA CIRI ROYALTY ORR USA ROY CIRIROY ROYALTY ORR ROY+ORR I UNOCAL # ACREAGE FACTOR ROYALTY ROYALTY DECIMAL DECIMAL UNOCAL NTINT NTINT NTINT NTINT NTINT UNOCAL NTINT 0.0001227 Exhibit A Swanson River Field Tyonek Formation Participating Area - 8910086520-C "D" and "E" Zone Gas Pools &_... 5...... -..... 4 i A02 die 18 17 1' i i 8N9W 19 20 21 17 3 2 �Ao26405 1. I 11 14 A628384 23 i 12 0 30 R 29 � i ! f 2—�------—a� I i A02i39 A02839 a ;ss D Zone #1 C (S8) Fm i D Zone #2 C (S9) 31 32 - D Zone #3 C (S12) i I $�j"r� ® D Zone #4 C (S13) j _. .--_-_---L-----.-- j Block 2 (j�jj ! 6J_I_L�LI D Zone #5 C (S14) -T F/7/ D Zone #6 C (S15) tf D Zone #7 C S16 �' '•:'..:•??' — D Zone #8 C (S19) . .. 15 A02 •:.•. -- 1 -- - --- - — -- E Zone #1 C (S4) _ E Zone #2 C (S17) 7N9W G _ E Zone #3 C S18 10 E Zone #4 C (S20) Leases Unit Tracts Mt 9 URI 1810 12 3 93 18 17 iG 15 14 l 13 1 NRI 580 I UNOCAL?, April 1, 2005 Scale: 1:62,000 Exhibit A-1 Swanson River Field Tyonek Formation - 8910086520-C "D" Zone Gas Pool #1 Initial Participating Area 4 7 A02 ;077 18 17 i3 2 19 20 21 Block 1 30 2c 31 A028396 32 11 9 Block 2 3 2 A02$405 17 11 1 �021, 6 14 22 23 24- A028406 4 A028996 7 —1 a 9 7N9V 10 12 18 cillil 5810 17 16 -71993 15 1 581=R15800 UNOCALS A02$990 36 F= D Zone #1 C (S8) ELeases Unit Tracts 14 i 13 April 1, 2005 Scale: 1:62,000 Tyonek Formation Participating Area 8910086520-C (s8) "D" Zone Gas Pool #1 Initial Participating Area Effective Date December 21, 1962 Revised March 1. 2011 Committed Basic Swanson Description of Participating Royalty Owner Overiding River Field Working Participating Lands Acreage and Serial and Lessee Royalty Owner Tract Interest Owner & Tract No. (Unsurveyed) Percentage Number Percentage of Record and Percentage Participation Participation BLOCK 2 SOLDOTNA CREEK UNIT 16 T7N, R9W, S.M. 205.00 A-028997 USA 9.375% Fred W. (a) 5.0% 0.4379173% Union 100% 100.00% CIRI 3.125% Axford Sec 3: That portion of Lot 2 lying within: S/2 NW/4 NW/4 SW/4; N/2 SW/4 NW/4 SW/4; SWA SW/4 NW/4 SW/4; NW/4 NW/4 SW14 SW/4 Sec 4: That portion of Lot 1 lying within: W/2 SE/4 SE/4; NW/4 SE/4 SE/4 SE/4; NE/4 SE/4 SE/4; S/2 NE/4 SE/4; S/2 N/2 NEA SEX; S/2 NW/4 SE/4; S/2 N/2 NW/4 SE/4; NW/4 NW/4 NW/4 SE/4; SW/4 SE/4; NE/4 SEA SW/4; NE/4 SE/4 SE/4 SW/4; E/2 NE/4 SW/4; NW/4 NW/4 NE/4 SW/4; E/2 W/2 NEA SW/4 Sec 9: NW/4 NW/4 NE/4 NE/4; N/2 NE/4 NW/4 NE14; NE/4 NW/4 NW/4 NE/4 Block 2 Total 205.00 Total 0.4379173% 100.00% EXHIBIT B 8910086520-C (s8) - RECAPITULATION "D" Zone Gas Pool #1 Initial Participating Area Effective Date December 21. 1962 Revised March 1, 2011 SWANSON RIVER LAND CATEGORY NO. OF TRACTS ACRES TRACT PARTICIPATION Block 2 U.S. Public Domain Lands L 24500 0 4379173% DIVISION OF OVERRIDING ROYALTY (a) Overriding Royalty interest to Weststar Escrow Servicing as collecting agent for: Estate of Fred W. Axford 7.142% Rodney L. Johnston 3.571% Ethel Waster Trust 7.142% Dorothy Raykovich 7.142% Locke Jacobs, Jr. 7.142% Phil Raykovich 7.142% E. E. Rasmuson 7.142% Estate of Howard E. Cruver 7.142% H. Willard Nagley, Jr. 7.142% Glenn S. Miller 7.142% George R. Jones 7.142% Robert B. Atwood 7.154% C. R. Foss 7.142% 4M Partnership 1.429% J. F. & Mary Jean McMenamin 7.142% John M. Johnson 3.571% Legend JSA: United States of America ;IRI: Cook Inlet Region, Inc. Union: Union Oil Company of California SWANSON RIVER FIELD Tyonek Formation 8910086520-C (s8) "D" Zone Gas Pool # 1 Initial Participating Area Effective Date December 21, 1962 Revised March 1, 2011 Block 2 - Soldotna Creek Unit RACT COMMITTED TRACT USA CIRI ROYALTY ORR USA ROY CIRI ROY ROY ORR ORR+ROY UNOCAL # ACREAGE FACTOR ROYALTY ROYALTY DECIMAL DECIMAL UNOCAL IN NTINT NTINT NTINT NTINT UNOCAL NTINT 16 205.0000 0.0043792 0.0937500 0.0312500 0.1250000 0.0500000 1.0000000 0.0004105 0.0001368 0.0005474 0.0002190 0.0007664 0.0043792 0.00361: 'OTALS 205.0000 0.0043792 0.0004105 0.0001368 0.0005474 0.0002190 0.0007664 - 0.0043792 0.00361; Exhibit A-2 Swanson River Field Tyonek Formation - 8910086520-C "D" Zone Gas Pool #2 Initial Participating Area U N IOCAL{ 76'' ScApril 1, 2005 ale: 1:62,000 yy 43 I 2 o- 7 I 8 102 406 17 l 11 12 k I A0?- 077 13 I 17 13 13 6 14 i ig3 2 i 19 N9W I 20 21 22 Block 1 23 2f, 18 A028406 ' p 30 29 , 27 h A02. W f A02LP 90 A62839632 31 —: 35 36 9 �1 Block 2 4 3 I 2 1 15 16 A028996 A028997 D Zone #2 C (s9) 7 7N9 910 Leases Unit Tracts iu CIF 15810171E �-R)2 i5 14 13 1 d&�I 580 U N IOCAL{ 76'' ScApril 1, 2005 ale: 1:62,000 Description of Participating Lands Tract No. (Unsurveyed) BLOCK 2 SOLDOTNA CREEK UNIT 1d T7N, R9W, S.M. Sec 8: That portion of Lot 1 lying within: SWA SW/4 SW/4 NE/4; NW/4 NW/4 NW/4 SE/4; E/2 NW/4 NW/4 SE/4; NE/4 NW/4 SE/4; NE/4 SE/4 NW/4 SEA; W/2 NW/4 NE/4 SE/4,- SE/4 E/4;SE/4 NW/4 NE/4 SE/4; S/2 NE/4 NE/4 SE/4; S/2 NE/4 SEA 16 T7N, R9W, S.M. Sec 9: SW/4 NW/4 NW/4 SW/4; SW/4 NW/4 SW/4; N/2 SE/4 NW/4 SW/4 Block 2 Total EXHIBIT B Tyonek Formation Participating Area 8910086520-C(s9) "D" Zone Gas Pool #2 Initial Participating Area Effective Date November 23, 1962 Revised March 1, 2011 Committed Basic Swanson Participating Royalty Owner Overiding River Field Working Acreage and Serial and Lessee Royalty Owner Tract Interest Owner Percentage Number Percentage of Record and Percentage Participation Participation 55.00 A-028996 USA 11.1607143% Fred W. (a) 5.0% 0.0575570% Union 100% 75.86% CIRI 1.3392857% Axford 17.50 A-028997 USA 9.375% 24.14% CIRI 3.125% 100.00% Fred W. (a) 5.0% 0.0183136% Union 100% Axford Total 0.0758705% EXHIBIT B 8910086520-C (S9) - RECAPITULATION "D" Zone Gas Pool #2 Initial Participating Area Effective Date November 23, 1962 Revised March 1, 2011 SWANSON RIVER LAND CATEGORY NO. OF TRACTS ACRES TRACT PARTICIPATION Block 2 U.S. Public Domain Lands 2 72.50 0.075a705% DIVISION OF OVERRIDING ROYALTY (a) Overriding Royalty interest to Weststar Escrow Servicing as collecting agent for: Estate of Fred W. Axford 7.142% Rodney L. Johnston 3.571% Ethel Waster Trust 7.142% Dorothy Raykovich 7.142% Locke Jacobs, Jr. 7.142% Phil Raykovich 7.142% E. E. Rasmuson 7.142% Estate of Howard E. Cruver 7.142% H. Willard Nagley, Jr. 7.142% Glenn S. Miller 7.142% George R. Jones 7.142% Robert B. Atwood 7.154% C. R. Foss 7.142% 4M Partnership 1.429% J. F. & Mary Jean McManamin 7.142% John M. Johnson 3.571% Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California SWANSON RIVER FIELD Tyonek Formation 8910086520-C(s9) "D" Zone Gas Pool # 2 Initial Participating Area Effective Date November 23, 1962 Revised March 1, 2011 Block 2 - Soldotna Creek Unit TRACT # COMMITTED ACREAGE TRACT FACTOR USA ROYALTY CIRI ROYALTY ROYALTY I DECIMAL ORR I DECIMAL I UNOCAL USA ROY NTINT I CIRI ROY NTINT ROY NTINT I ORR NTINT I ORR+ROY NTINT UNOCAL UNOCAL NTINT 15 55.0000 0.00057561 0.1116071 0.0133929 0.1250000 0.0500000 1.00000001 0.0000642 0.000007/ 1 0.0000719 0.0000288 0.00010071 0.0005756 0.0004749 16 17.50001 0.0001831 0.09375001 0.03125001 0.1250000 0.0500000 1.00000001 0.0000172 0.00000571 0.00002291 0.00000921 0.0000320 0.0001831 0.0001511 TOTALS 72.5000 0.0007587 1 1 1 1 1 0.0000814 0.0000134 1 0.0000948 0.0000379 1 00CIO13287 0.00075871 0.0006260 Exhibit A-3 Swanson River Field Tyonek Formation - 8910086520-C "D" Zone Gas Pool #3 Initial Participating Area -I' - U U O CAL76?y Scale: 1:62,000 EXHIBIT B Tyonek Formation Participating Area 8910086520-C (s12) "D" Zone Gas Pool #3 Initial Participating Area Tyonek Gas 61-3 Sand Revised March 1, 2011 98 T8N R9W, S.M. 320.00 A-028406 USA 8.9583333% Union None .2145174% Union 100% 61.54000% CIRI 3.5416667% Sec 15: W/2 Block 1 Total 520.00 Block 1 Total .3485908% 100.00% 8910086520-C (s12) - RECAPITULATION Revised March 1, 2011 LAND CATEGORY Block 1 U.S. Public Domain Lands Legend Committed USA: Basic Royalty Owner CIRI: Overriding Swanson River Field Working Description of Participating Acreage Serial and Lessee Royalty Owner Tract Interest Owner Participating Lands and Number Percentage of Record and Percentage Participation & Participation Tract No. (Unsurveyed) Percentage BLOCK 1 Swanson River Unit 80.00 A-028077 USA 4.5833333% Marathon Russell R. 0536293% Union 100% 2 TSN R9W S.M. 15.3800% CIRI 7.9166667% Simonson -1% Sec 16: E/2 SE/4 120.00 A-028384 USA 1.5625% Union None .0804440% Union 100% 6 T8N R9W, S.M. 23.08000% CIRI 10.9375% Sec 15: SW/4 NE14; W/2 SE/4 98 T8N R9W, S.M. 320.00 A-028406 USA 8.9583333% Union None .2145174% Union 100% 61.54000% CIRI 3.5416667% Sec 15: W/2 Block 1 Total 520.00 Block 1 Total .3485908% 100.00% 8910086520-C (s12) - RECAPITULATION Revised March 1, 2011 LAND CATEGORY Block 1 U.S. Public Domain Lands Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California Marathon: Marathon Oil Company SWANSON RIVER NO. OF TRACTS ACRES TRACT PARTICIPATION � —W—D-OQ 3485908% TRACT I COMMITTED I TRACT I USA I CIRI SWANSON RIVER FIELD Tyonek Formation 8910086520-C(s12) "D" Zone Gas Pool # 3 Initial Participating Area Tyonek Gas 61-3 Sand Revised March 1, 2011 Block 1 - Swanson River Unit ROYALTY I ORR USA ROY CIRI ROY nvru.encr RAA1 IINrICGI NTINT NTINT ROYALTY I NTIRNT I R NTINTR I UNOCAL I UNTOINTL NTINT Exhibit A-4 Swanson River Field Tyonek Formation - 8910086520-C "D" Zone Gas Pool #4 Initial Participating Area 7 8 A02 077 18 17 13 1 20 21 Block 1 i; �.�32 kQ5 11 � 12 1� I 6 14 1 I .. A62 I = 23 ao 29 i 27 I 2�I A02�39_ I 31 A�28396 32 35 A02�919036 Block 2 4) 3 2 1 I 16 15 A02899i A028996 7N9% D Zone #4 C (913) 7 3 9 10 g� M Leases 1� Unit Tracts .fit 29012' 12 18 C1 1581017 IR715 80 16 E'M3 15 14. 13 1 t'' � ■NOCAL'6�, Scale: 1:62,000 Description of Participating Lands Tract No. (Unsurveyed) BLOCK 1 Swanson River Unit 18 T8N R9W, S.M. Sec 22: That portion of Lot 2 lying within: S/2 NW/4; SW/4 NE/4; SW/4; W/2 SE/4 Sec 27: That portion of Lot 1 lying within: NE/4 NW/4 EXHIBIT B Tyonek Formation Participating Area 8910086520-C (s13) "D" Zone Gas Pool #4 Initial Participating Area Tyonek Gas 61-8 Sand Revised March 1, 2011 Committed Basic Participating Royalty Owner Acreage and Serial and Lessee Percentage Number Percentage of Record 400.00 A-028406 USA 8.9583333% Union 100.00% CIRI 3.5416667% Block 1 Total 400.00 Block 1 Total 0784281 100.00% LAND CATEGORY Block 1 U.S. Public Domain Lands Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California 8910086520-C (s13) — RECAPITULATION Revised March 1, 2011 SWANSON RIVER NO. OF TRACTS ACRES TRACT PARTICIPATION 400.00 0784281 1 Swanson Overriding River Field Working Royalty Owner Tract Interest Owner & and Percentage Participation Participation None .0784281% Union 100% Block 1 Total 400.00 Block 1 Total 0784281 100.00% LAND CATEGORY Block 1 U.S. Public Domain Lands Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California 8910086520-C (s13) — RECAPITULATION Revised March 1, 2011 SWANSON RIVER NO. OF TRACTS ACRES TRACT PARTICIPATION 400.00 0784281 1 SWANSON RIVER FIELD Tyonek Formation 8910086520-C (s13) "D" Zone Gas Pool # 4 Initial Participating Area Tyonek Gas 61-8 Sand Revised March 1, 2011 Block 1 - Swanson River Unit TRACT COMMITTED TRACT USA CIRI ROYALTY ORR USA ROY CIRI ROY ROYALTY ORR ROY+ORR UNOCAL # ACREAGE FACTOR ROYALTY ROYALTY DECIMAL DECIMAL UNOCAL NTINT NTINT NTINT NTINT NTINT UNOCAL NTINT Exhibit A-5 Swanson River Field Tyonek Formation - 8910086520-C "D" Zone Gas Pool #5 Initial Participating Area UNOCAL76 scale: i:oc,w� EXHIBIT B Tyonek Formation Participating Area 8910086520-C (s14) T" Zone Gas Pool #5 Initial Participating Area Tyonek Gas 62-5 Sand Revised March 1, 2011 Committed Description of Participating Lands Tract No. (Unsurveyed) BLOCK 1 Swanson River Unit 2 T8N R9W, S.M. and Sec 21: That portion of Lot 1 lying within: Number SE/4 SE/4 11 T8N R9W, S.M. A-028077 Sec 28: That portion of Lot 1 lying within: 4.5833333% S/2 NE/4; NE/4 NE/4; SE/4; SEA SW/4 7.9166667% Sec 33: That portion of Lot 1 lying within: A-028399 NE/4; NE/4 NW/4 18 T8N R9W, S.M. Sec 22: That portion of Lot 2 lying within: 6.8181818% SWA SWA Sec 27: That portion of Lot 1 lying within: W/2; SWA NE/4; NW/4 SEA Sec 34: That portion of Lot 2 lying within: NW/4 EXHIBIT B Tyonek Formation Participating Area 8910086520-C (s14) T" Zone Gas Pool #5 Initial Participating Area Tyonek Gas 62-5 Sand Revised March 1, 2011 Committed Basic Participating Royalty Owner Acreage and Serial and Percentage Number Percentage 40.00 A-028077 USA 4.5833333% 3.45% CIRI 7.9166667% 520.00 A-028399 USA 5.6818182% 44.83% CIRI 6.8181818% 600.00 A-028406 USA 8.9583333% 51.72% CIRI 3.5416667% Block 1 Total 1,160.00 100.00% Swanson Overriding River Field Working Lessee Royalty Owner Tract Interest Owner & of Record and Percentage Participation Participation Marathon Russell R. .0160083% Union 100% Simonson -1% Union None .2081080% Union 100% Union None .2401246% Union 100% Block 1 Total .4642409% LAND CATEGORY Block 1 U.S. Public Domain Lands Legend USA_ - United -States of-Amenea---------- -_. CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California Marathon: Marathon Oil Company EXHIBIT B 8910086520-C (s14) - RECAPITULATION "D" Zone Gas Pool #5 Initial Participating Area Tyonek Gas 62-5 Sand Revised March 1, 2011 SWANSON RIVER NO. OF TRACTS ACRES TRACT PARTICIPATION 6 Q 4642409% SWANSON R►VER FIELD Tyonek Formation 8910086520-C (s14) "D" Zone Gas Pool # 5 Initial Participating Area Tyonek Gas 62-5 Sand Revised March 1, 2011 Block 1 - Swanson River Unit Exhibit A-6 Swanson River Field Tyonek Formation - 8910086520-C T" Zone Gas Pool #6 Initial Participating Area UNOCAL Scale: 1:62,000 EXHIBIT B Tyonek Formation Participating Area 8910086520-C (S15) "D" Zone Gas Pool #6 Initial Participating Area Tyonek Gas 64-5 Sand Revised March 1, 2011 18 T8N R9W, S.M. Sec 27: That portion of Lot 1 lying within: W/2 W/2 Sec 34: That portion of Lot 2 lying within: NW/4 NW/4 200.00 A-028406 USA 8.9583333% 38.46% CIRI 3.5416667% Committed Basic Description of Participating Royalty Owner Participating Lands Acreage and Serial and - - - -- - - No. (Unsurveyed )- - Tract Percentage-- - -Number- - - Percentage BLOCK 1 Swanson River Unit Union None .0624444% Union 100% 320.00 A-028399 USA 5.6818182% 11 T8N R9W S.M. 61.54% CIRI 6.8181818% Sec 28: That portion of Lot 1 lying within: E/2 E/2; W/2 SE/4 Sec 33: That portion of Lot 1 lying within: N/2 NE/4 18 T8N R9W, S.M. Sec 27: That portion of Lot 1 lying within: W/2 W/2 Sec 34: That portion of Lot 2 lying within: NW/4 NW/4 200.00 A-028406 USA 8.9583333% 38.46% CIRI 3.5416667% Union None .0390278% Union 100% Block 1 Total 520.00 Block 1 Total .1014722% 100.00% Swanson Overriding River Field Working Lessee Royalty Owner Tract Interest Owner Z of Record. - . _ _and_P_ercentage__ _ Participation Participation Union None .0624444% Union 100% Union None .0390278% Union 100% Block 1 Total 520.00 Block 1 Total .1014722% 100.00% 8910086520-C (s15) - RECAPITULATION "D" Zone Gas Pool #6 Initial Participating Area Tyonek Gas 64-5 Sand Revised March 1, 2011 LAND CATEGORY NO. OF TRACTS ACRES Block 1 _520.00 U.S. Public Domain Lands 2 Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California SWANSON RIVER TRACT PARTICIPATION 1014722% SWANSON RIVER FIELD Tyonek Formation 8910086520-C (s15) "D" Zone Gas Pool # 6 Initial Participating Area Tyonek Gas 64-5 Sand Revised March 1, 2011 Block 1 - Swanson River Unit TRACT COMMITTED TRACT USA CIRI ROYALTY ORR USA ROY CIRI ROY ROYALTY ORR ROY+ORR UNOCAL _ __ ___ .__ACREAGE--FACSOR__. _ROYALTY__ _ ROYALTY _DECIMAL DECIMAL UNOCAL NTINT NTINT NTINT NTINT NTINT UNOCAL NTINT 11 360.0000 0.0006244 0.0568182 0.0681818 0.1250000 1.0000000 0.0000355 0.0000426 0.0000781 0.0000000 0.0000781 0.0006244 0.00054E 160.0000 0.0003903 o.0895833 0.0354167 0.1250000 7.0000000 0.0000350 0.0000738 0.0000488 0.0000000 0.0000488 0.0003903 0.000341 18 n nnnnnnn n noo7269 0.0010147 0.000861 Exhibit A-7 Swanson River Field Tyonek Formation - 8910086520-C T" Zone Gas Pool #7 Initial Participating Area f �NOCALQ j Scale: 1:62,000 EXHIBIT B Tyonek Formation Participating Area 8910086520-C (s16) "D" Zone Gas Pool #7 Initial Participating Area Tyonek Gas 68-0 Sand Revised March 1, 2011 Committed Description of Participating ParticipatingLands Acreage and Serial Tract No. Un -- - ( -----surveyed --- --Percentage--- - Number ) BLOCK 1 Swanson River Unit 6 T8N R9W, S.M. 160.00 44.44% Sec 15: SW/4 NE/4, W/2 SE/4, NE/4 SE/4 18 T8N R9W, S.M. 200.00 55.56% Sec 15: SE/4 NW/4; SW/4 Basic Swanson Royalty Owner Overriding River Field Working and Lessee Royalty Owner Tract Interest Owner & -Percentage-- - -of-Record_and-Percentage . Participation Participation A-028384 USA 1.5625% Union None CIRI 10.9375% A-028406 USA 8.9583333% Union None CIRI 3.5416667% .0471299% Union 100% 0589124% Union 100% Block 1 Total 1060422% Block 1 Total 360.00 100.00% 8910086520-C (s16) — RECAPITULATION Revised March 1, 2011 LAND CATEGORY NO. OF TRACTS ACRES Block 1 6�0 00 U.S. Public Domain Lands -?- Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California SWANSON RIVER TRACT PARTICIPATION SWANSON RIVER FIELD Tyonek Formation 8910086520-C (s16) "D" Zone Gas Pool # 7 Initial Participating Area Tyonek Gas 68-0 Sand Revised March 1, 2011 Block 1 - Swanson River Unit RTOTALS1111 D E_ 00 00 TRACT FACTOR 0.0004713 0.0005891 USA ROYALTY 0.0156250 0.0895833 CIRI ROYALTY 0.1093750 0.0354167 ROYALTY ORR DECIMAL DECIMAL 0.1250000 0.1250000 USA ROY UNOCAL NTINTNTINT 1.0000000 0.0000074 1.0000000 0.0000528 0.0000601 CIRI ROY 0.0000515 0.0000209 00000724 ROYALTY NTINT 0.0000589 0.0000736 0000000 ORR NTINT 00000000 0.0000000 ROY+ORR NTINT 0.00005890.0004713 0.0000736 UNOCAL 0.0005891 UNOCAL NTINT 0.0004124 00005155 0.0010604 Exhibit A-8 Swanson River Field Tyonek Formation - 8910086520-C "M Zone Gas Pool #8 Initial Participating Area EXHIBIT B Tyonek Formation Participating Area 8910086520-C (s19) "D" Zone Gas Pool #8 Initial Participating Area Revised March 1, 2011 Committed Description of Participating Participating Lands Acreage and Tract No. (Unsurveyed) Percentage -BUCK-1-SWANSON RIVER -UNIT ---- - ------ ------ --- 18 T8N R9W, S.M. 200.00 100.00% Sec 27: That portion of Lot 1 lying within: NW/4 NW/4; S/2 NW/4; N/2 SWA Block 1 Total 200.00 100.00% LAND CATEGORY Block 1 U.S. Public Domain Lands Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California Basic Royalty Owner Serial and Lessee Number Percentage of Record A-028406 USA 8.9583333% Union CIRI 3.5416667% 8910086520-C (s16) - RECAPITULATION Revised March 1, 2011 Block 1 Total 0.0087550% SWANSON RIVER NO. OF TRACTS ACRES TRACT PARTICIPATION 0 0087550% 1 Swanson Overriding River Field Working Royalty Owner Tract Interest Owner & and Percentage Participation Participation None 0.0087550% Union 100% Block 1 Total 0.0087550% SWANSON RIVER NO. OF TRACTS ACRES TRACT PARTICIPATION 0 0087550% 1 TRACT COMMITTED I TRACT I USA SWANSON RIVER FIELD Tyonek Formation 8910086520-C(s19) " Y Zone Gas Pool # 8 Initial Participating Area Revised March 1, 2011 Block 1 - Swanson River Unit CIRI ROYALTY ORR USA ROY CIRI ROY ROYALTY nerl�ne.L.-_ _ I-INnCAL- -NTINT NTINT _.___ _ __.NTINT _ 0. F ORR I ROY+ORR I I UNOCAL .ITI\IT NTINT UNOCAL NTINT Exhibit A-9 Swanson River Field Tyonek Formation - 8910086520-C "E" ;Zone Gas Pool #1 Initial Participating Area EXHIBIT B Tyonek Formation Participating Area 8910086520-C (s4) "E" Zone Gas Pool #1 Initial Participating Area Effective Date October 6, 1961 Revised March 1, 2011 Sec 27: That portion of Lot 1 lying within: NW/4 NW/4 SE/4; N/2 SW/4 NW/4 SE/4; SW/4 SWA NW/4 SE/4; NW/4 NW/4 SW/4 SEA; S/2 NW/4 NE14; SW/4 NEA NW/4 NE/4; S/2 NW/4 NW/4 NE/4; W/2 SE/4 SW/4 NEA; SW/4 NEA SWA NE/4; N12 NE/4 SWA NE/4; W/2 SWA NEA; SEA NW/4; S/2 NEA NW/4; S/2 N/2 NE/4 NW/4; SEA NW/4 NW/4; SEA NE/4 NW/4 NW/4; SE/4 SW/4 NW/4 NW/4; S/2 SWA NW/4; S/2 N/2 SW/4 NW14; N/2 NEA SW/4 NW/4; NE/4 NW/4 SWA NW/4; SW/4 NEA SEA SW/4; N/2 NEA SEA SW/4; NW/4 SEA SW/4; NEA SW/4; N/2 NW/4 SW/4; SE/4 NW/4 SWA; SE/4 SW/4 NW/4 SW/4; N/2 SWA NW/4 SW/4; SEA NEA SW/4 SW/4; N/2 NEA SWA SWA Total 0,3322231% Total Block 1 315.00 100.00% Committed Basic Overiding Swanson River Field Working Description of Participating Royalty Owner Lessee Royalty Owner Tract Interest Owner 7 Participating LandsParticipation Acreage and -- Serial Number--- - and Percentage-- -- --of_Recor_d___ ____and Percentage Participation Participation — Tract No. -------------- (Unsurveyedi -Percentage BLOCK 1 B SWANSON RIVER UNIT SO 10.00 A-028399 USA 5.6818182% Union None 0.0105468% Union 100% T8N S.M. 3.17% CIRI 6.8181818% Sec 28: That portion of Lot 1 lying within: E/2 NEA NEA SE/4, E/2 SE/4 SE/4 NE/4 305.00 A-028406 USA 8.9583333% Union None 0.3216763% Union 100% 48 T8N R9W. S.M. 96.83% CIRI 3.5416667% Sec 27: That portion of Lot 1 lying within: NW/4 NW/4 SE/4; N/2 SW/4 NW/4 SE/4; SW/4 SWA NW/4 SE/4; NW/4 NW/4 SW/4 SEA; S/2 NW/4 NE14; SW/4 NEA NW/4 NE/4; S/2 NW/4 NW/4 NE/4; W/2 SE/4 SW/4 NEA; SW/4 NEA SWA NE/4; N12 NE/4 SWA NE/4; W/2 SWA NEA; SEA NW/4; S/2 NEA NW/4; S/2 N/2 NE/4 NW/4; SEA NW/4 NW/4; SEA NE/4 NW/4 NW/4; SE/4 SW/4 NW/4 NW/4; S/2 SWA NW/4; S/2 N/2 SW/4 NW14; N/2 NEA SW/4 NW/4; NE/4 NW/4 SWA NW/4; SW/4 NEA SEA SW/4; N/2 NEA SEA SW/4; NW/4 SEA SW/4; NEA SW/4; N/2 NW/4 SW/4; SE/4 NW/4 SWA; SE/4 SW/4 NW/4 SW/4; N/2 SWA NW/4 SW/4; SEA NEA SW/4 SW/4; N/2 NEA SWA SWA Total 0,3322231% Total Block 1 315.00 100.00% EXHIBIT B 8910086520-C (s4) - RECAPITULATION "E" Zone Gas Pool #1 Initial Participating Area Effective Date October 6, 1961 Revised March 1, 2011 LAND CATEGORY NO. OF TRACTS ACRES Block 11a.QQ U.S. Public Domain Lands 2 Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California SWANSON RIVER TRACT PARTICIPATION n�31 SWANSON RIVER FIELD Tyonek Formation 8910086520-C (s4) "E" Zone Gas Pool #1 Initial Participating Area Effective Date October 6, 1961 Revised March 1, 2011 Block 1 - Swanson River Unit TRACT COMMITTED TRACT USA CIRI ROYALTY ORR USA ROY I CIRI ROY I ROY ORR ROY+ORR I UNOCAL #___- --ACREAGE_—ACZOR__ _ __ROYALTY ROYALTY DECIMAL DECIMAL UNOCAL NTINT NTINT NTINT NTINT NTINT UNOCAL – NTINT 1.0000000 0.0000060 0.0000072 0.0000132 0.0000132 0.0001055 0.00009 11 10.0000 0.0001055 0.0568182 0.0681818 0.1250000 0.0004021 0.0032168 0.00281 1.0000000 0.0002882 0.0001139 0.0004021 i8 305.0000 0.0032168 0.0895833 0.0354167 0.1250000 ^ ^^^ ,cn n nnneiaz n 0033223 0.0029C Exhibit A-10 Swanson River Field Tyonek Formation - 8910086520-C "E" Zone Gas Pool #2 Initial Participating Area Sec 16: E/2 SE/4 EXHIBIT B Sec 21: That portion of Lot 1 lying within: NE/4 NE4 Tyonek Formation Participating Area 6 T8N R9W. S.M. 320.00 8910086520-C (s17) Sec 15: E/2 17 T8N R9W S.M. "E" Zone Gas Pool #2 Initial Participating Area 8.33% Sec 10: That portion of Lot 2 lying within: Tyonek Gas 77-3 Sand S/2 SW/4 18 T8N R9W, S.M. Revised March 1, 2011 45.83% Sec 15: W/2 Committed Basic Royalty Owner Overriding Swanson River Field Description of Partici atin p g and Lessee Acreage and Serial Royalty Owner Tract Participating lands Percentage Number Percentage of Record and Percentage Participation Tract No. (Unsurveyed) BLOCK 1 _ Swanson River Unl 120.00 A-028077 USA 4.5833333% Marathon R. •0506395% 2 T8N R9W. S.M. 1250% CIRI 7.9166667% Simonson % Sec 16: E/2 SE/4 Sec 21: That portion of Lot 1 lying within: NE/4 NE4 6 T8N R9W. S.M. 320.00 33.34% Sec 15: E/2 17 T8N R9W S.M. 80.00 8.33% Sec 10: That portion of Lot 2 lying within: S/2 SW/4 18 T8N R9W, S.M. 440.00 45.83% Sec 15: W/2 Sec 22: That portion of Lot 2 lying within: N/2 NW/4; NW/4 NE/4 Block 1 Total 960.00 100.00% Working Interest Owner & Participation Union 100% A-028384 USA 1.5625% Union None 1350387% Union 100% CIRI 10.9375% A-028405 USA 1.9646983% Union None .0337597% Union 100% CIRI 10.5353017% A-028406 USA 8.9583333% Union None .1856782% Union 100% CIRI 3.5416667% Block 1 Total 4051160% 8910086520-C (s17) - RECAPITULATION "E" Zone Gas Pool #2 Initial Participating Area Tyonek Gas 77-3 Sand Revised March 1, 2011 SWANSON RIVER LAND CATEGORY NO. OF TRACTS ACRES TRACT PARTICIPATION Block 1 960.O.Q 4Q51160% U.S. Public Domain Lands 4- Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California Marathon: --Marathon-Oil-Company------ - - -- -- -- --- - -- - - -- - ---- ---- - - SWANSON RIVER FIELD Tyonek Formation 8910086520-C (s17) "E" Zone Gas Pool # 2 Initial Participating Area Tyonek Gas 77-3 Sand Revised March 1, 2011 Block 1 - Swanson River Unit Exhibit A-11 Swanson River Field Tyonek Formation - 8910086520-C "E" Zone Gas Pool #3 Initial Participating Area UNOCAL. Scale: 1:62,000 EXHIBIT B Tyonek Formation Participating Area 8910086520-C (s18) "E" Zone Gas Pool #3 Initial Participating Area Revised March 1, 2011 Block 2 Total 760.00 100.00% Basic Committed Swanson Description of Participating Participating Lands Acreage and Tract No. (Unsurveyed) Percentage BLOCK 2 SOLDOTNA CREEK UNIT Interest Owner & 15 T7N R9W, S.M. 200.00 Participation Participation 26.32% A-028996 USA 11.1607143% Sec 5: That portion of Lot 1 lying within: (a) 5.0% 0.0398805% SE/4 CIRI 1.3392857% Axford Sec 8: That portion of Lot 1 lying within: NE/4 NE/4 16 T7N, R9W, S -M. 560.00 73.68% Sec 3: That portion of Lot 2 lying within: SW/4 SW/4; Sec 4: That portion of Lot 1 lying within: S/2 SE/4; W/2 SW/4 Sec 9: N/2 Sec 10: That portion of Lot 2 lying within: NW/4 NW/4 Block 2 Total 760.00 100.00% Basic Swanson Royalty Owner Overriding River Field Working Serial and Lessee Royalty Owner Tract Interest Owner & Number Percentage of Record and Percentaqe Participation Participation A-028996 USA 11.1607143% Fred W. (a) 5.0% 0.0398805% Union 100% CIRI 1.3392857% Axford A-028997 USA 9.375% Fred W. (a) 5.0% 0.1116653% Union 100% CIRI 3.125% Axford Total 0.1515457% EXHIBIT B 8910086520-C (s18) - RECAPITULATION "E" Zone Gas Pool #3 Initial Participating Area Revised March 1, 2011 LAND CATEGORY NO. OF TRACTS ACRES Block 2 760 00 U.S. Public Domain Lands 2 Estate of Fred W. Axford Ethel Waster Trust Locke Jacobs, Jr. E. E. Rasmuson H. Willard Nagley, Jr. George R. Jones C. R. Foss J. F. & Mary Jean McManamin Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California DIVISION OF OVERRIDING ROYALTY (a) Overriding Royalty interest to Weststar Escrow Servicing as collecting agent for: 7.142% Rodney L. Johnston 7.142% Dorothy Raykovich 7.142% Phil Raykovich 7142% Estate of Howard E. Cruver 7.142% Glenn S. Miller 7.142% Robert B. Atwood 7.142% 4M Partnership 7.142% John M. Johnson SWANSON RIVER TRACT PARTICIPATION 1515457% 3.571% 7.142% 7.142% 7.142% 7.142% 7.154% 1.429% 3.571% SWANSON RIVER FIELD Tyonek Formation 8910086520-C (sl8) "E" Zone Gas Pool # 3 Initial Participating Area Revised March 1, 2011 Block 2 - Soldotna Creek Unit TRACT COMMITTED TRACT USA CIRI ROYALTY ORR USA ROY CIRI ROY ROYALTY — --u _ ____ -- - ..-, �- n we, mow--n�riM& -n�e1MAL - UNOC-AL - ---NTIN f--- - —NTINT --- ---- NTINT-- a ORR I ROY+ORRI + UNIINTL - _ - ___NTINT _UN.00AL Exhibit A,12 Swanson River Field � Tvon�kFurnnation 891O08G520(� | , ' ' "E^ZOnSGas Pool #4Initial Participating Area NA023405 17 A02 1,077 17 13 15 6 8N W rBB 11 o'c k 1 27 30 A02 39 Block 2 7N9W Leases Unit Tracts 12 12 18 ClRi 5810 '17 16 M3 16RI 75870�771 A it i Pnn-r, Scale: 1:62,000 Description of Participating Lands Tract No.NnsurveVed) BLOCK 2 SOLDOTNA CREEK UNIT 15 T7N R9W, S.M. AK Sec 5. That portion of Lot 1 lying within: SE1/4 NE1/4, E1/2 SW114 NE1/4, N1/2 NE1/4 SE1/4, NE1/4 NW1/4 SE1/4; That portion of Hungry Lake lying within: SE1/4 NE1/4 16 T7N R9W, S.M. AK Sec 4. That portion of Lot 1 lying within: W1/2 SEI/4 NE1/4, SW1/4 NE1/4, S1/2 NW1/4, NE/4 SW1/4, N1/2 NW1/4 SW1/4, SEI/4 NW1/4 SWI/4, NE1/4 SE1/4 SW1/4, NW114 NE1/4 SE1/4, NW1/4 SE1/4, N1/2 SW114 SEI/4; That portion of Hungry Lake lying within: SW1/4 NW1/4 EXHIBIT B Tyonek Formation Participating Area 8910086520-C (s20) "E" Zone Gas Pool #4 Initial Participating Area Revised March 1, 2011 Committed Basic Overriding Swanson River Field Working Participating Royalty Owner and Lessee Royalty Owner Tract Interest Owner & Acreage and Serial Number Percentage of Record and Percentage Participation Participation Percentage 90.00 A-028996 USA 11.1607143% Fred W. (a) 5.0% 0.0179913% Union 100% 23.68% CIRI 1.3392857% Axford 290.00 A-028997 USA 9.3750% Fred W. (a) 5.0% 0.0579720% Union 100% 76.32% CIRI 3.1250% Axford Block 2 Total 380.00 Block 2 Total 0.0759634% 100.00% EXHIBIT B 8910086520-C (s20) -RECAPITULATION "E" Zone Gas Pool #4 Initial Participating Area Revised March 1, 2011 SWANSON RIVER LAND CATEGORY NO. OF TRACTS ACRES TRACT PARTICIPATION Block 2 380 00 0759634% U.S. Public Domain Lands 2 Estate of Fred W. Axford Ethel Waster Trust Locke Jacobs, Jr. E. E. Rasmuson H. Willard Nagley, Jr. George R. Jones C. R. Foss J. F. & Mary Jean McManamin Legend USA: United States of America CIRI: Cook Inlet Region, Inc. Union: Union Oil Company of California DIVISION OF OVERRIDING ROYALTY (a) Overriding Royalty interest to Weststar Escrow Servicing as collecting agent for: 7.142% Rodney L. Johnston 3.571% 7.142% Dorothy Raykovich 7.142% Phil Raykovich 7.142% 7.142% Estate of Howard E. Cruver 7.142% 7.142% Glenn S. Miller 7.142% o 7.142/o Robert B. Atwood 7.154% 7.142% 4M Partnership 1.429% 0 7.142/o John M. Johnson 3.571% 7.142% TRACT COMMITTED I TRACT 1 u 1 go.a000 l _ USA SWANSON RIVER FIELD Tyonek Formation 8910086520-C (s20) "E" Zone Gas Pool # 4 Initial Participating Area Tyonek Gas 77-3 Sand Revised March 1, 2011 Block 2 - Soldotna Creek Unit CIRI I ROYALTY I ORR USA ROY CIRI ROY ROYALTYORR ROY+ORR r ___,.c. ■�.ni----nGr-inner--IWnCAL-----NTINT NTINT--- -- -NTINT -----NTINT--. F s UNOCAL 0.0006267 1 2 ALASKA OIL AND GAS CONSERVATION COMMISSION 3 4 Before Commissioners: Cathy Foerster, Chair 5 Daniel T. Seamount 6 David Mayberry 7 8 In the Matter of Hilcorp Alaska, ) 9 LLC's Application to Amend ) 10 Conservation Order 123B. ) 11 ) 12 Docket No.: CO 14-030 13 14 ALASKA OIL and GAS CONSERVATION COMMISSION 15 Anchorage, Alaska 16 17 January 15, 2015 18 9:00 o'clock a.m. 19 20 VOLUME I 21 PUBLIC HEARING 22 23 BEFORE: Cathy Foerster, Chair 24 Daniel T. Seamount, Commissioner 25 David Mayberry, Commissioner 1 TABLE OF CONTENTS 2 3 Opening remarks by Chair Foerster 03 4 Remarks by Mr. Duffy 06 5 Remarks by Mr. Ewing 6 Remarks by Mr. Serbeck 7 2 08 10 1 P R O C E E D I N G S 2 (On record - 9:00 a.m.) 3 CHAIR FOERSTER: All right. I'll call this 4 hearing to order. Today is January 15, 2015, it's 9:00 5 a.m. We're in the offices of the Alaska Oil and Gas 6 Conservation Commission located at 333 West Seventh 7 Avenue, Anchorage, Alaska. To my left is Dan Seamount, 8 to my right is David Mayberry, I'm Cathy Foerster. 9 We're the three Commissioners for the Alaska Oil and 10 Gas Conservation Commission. 11 We're here today to address the application of 12 Hilcorp Alaska, LLC to amend conservation order 123B. 13 Hilcorp by letter received October 28th, 2014 requests 14 the Alaska Oil and Gas Conservation Commission issue an 15 order amending CO 123B for Swanson River field to 16 formally define three Swanson River field gas pools to 17 allow for unrestricted gas well spacing provided the 18 wells are at least 1,500 feet from the field's external 19 boundary and to authorize co -mingling of gas production 20 within the wellbore from any defined gas pool. 21 Before we get started I want to give you a guys 22 a little heads up. Pages 9 through 25 of Hilcorp's 23 original application have been marked as confidential. 24 Hilcorp cited 20 AAC 25.536(b) as their justification. 25 This regulation was repealed in April of 1986. Under 3 1 20 AAC 25.540(c)(10) we limited confidentiality to 2 those items which the operator can demonstrate to be 3 proprietary. You have submitted non -confidential 4 exhibits today, but we will still need justification 5 for keeping the originally submitted items confidential 6 and we will go -- do this page by page at the start of 7 our oral testimony today. So you need to be prepared 8 to justify the confidentiality of everything that you 9 have stamped confidential. 10 All right. Computer Matrix will be recording 11 the proceedings today. You can get a copy of the 12 transcript from them. 13 The Commissioners want to remind anyone who's 14 testifying to speak into both of the microphones, 15 make sure the little green lights are on in both of the 16 microphones so that people in the rear of the room can 17 hear and so the court reporter can get a clear 18 recording. 19 I see that we have two Hilcorp folks here to 20 testify. And we'll allow any other persons wanting to 21 testify to do so at the end of the hearing. 22 All right. So who goes first? 23 MR. EWING: I'll begin. 24 CHAIR FOERSTER: Well, why don't we -- while 25 you're both there why don't we -- why don't you 4 I introduce yourselves, just give your names for the 2 record and then I'll swear you both in, okay, and we'll 3 just swear in once. So give your names. 4 MR. EWING: My name's Jason Ewing. I'm a 5 reservoir engineer for Hilcorp Energy Company. 6 MR. SERBECK: And I'm John Serbeck, a geologist 7 for Hilcorp. 8 CHAIR FOERSTER: Okay. Raise your right hand. 9 (Oath administered) 10 MR. EWING: Yes. 11 MR. SERBECK: Yes. 12 CHAIR FOERSTER: Okay. All right. So before 13 we get started let's pull out your original 14 application. All right. Do you have that..... 15 MR. EWING: Yes. 16 CHAIR FOERSTER: .....with you? All right. So 17 let's go straight to page -- is it 9? 18 COMMISSIONER SEAMOUNT: Uh-huh. 19 CHAIR FOERSTER: Yeah, let's go straight to 20 page 9. Why is this page confidential? 21 MR. DUFFY: My name's David Duffy, I'm with 22 Hilcorp. (Indiscernible - away from microphone)..... 23 CHAIR FOERSTER: Okay. Speak into the thing 24 and if you're going to testify we need to swear you in. 25 MR. DUFFY: I'd be pleased to testify. I'm E 1 also counsel -- an attorney with Hilcorp. 2 CHAIR FOERSTER: We don't swear attorneys in 3 because we don't trust anything they say, right, Tab? 4 MR. DUFFY: But I also was the author of the 5 application and I'm responsible for placing the 6 confidential stamp on it. And..... 7 CHAIR FOERSTER: Will you speak in -- can you 8 hear him, Nathan? 9 REPORTER: Sit over there. 10 CHAIR FOERSTER: Why don't you sit there and 11 turn one of the mics on or both of the mics on. 12 MR. DUFFY: Both mics are on. 13 CHAIR FOERSTER: Okay. 14 MR. DUFFY: So again my name is David Duffy, 15 I'm a landman with Hilcorp. I prepared the application 16 or assembled it with the team. 17 CHAIR FOERSTER: Do you need him to start over? 18 REPORTER: (Inaudible response) 19 CHAIR FOERSTER: Yeah, start over. 20 MR. DUFFY: Okay. Good morning. My name's 21 David Duffy, I'm a landman with Hilcorp Alaska. In 22 terms of the application I prepared the cover letter 23 and I prepared the exhibit. I was responsible for 24 placing the stamp that's on confidential. And I'm not 25 sure it's absolutely necessary to go through each one. on 1 Hilcorp would be -- it's fine to waive the 2 confidentiality of the application. 3 CHAIR FOERSTER: On the entire application? 4 MR. DUFFY: On the entire application. 5 CHAIR FOERSTER: Okay. That saves some time. 6 Okay. Thank you. All right. I'm going to look to the 7 back of the room and ask my astute legal counsel is 8 that adequate? 9 MR. BALLANTINE: (Inaudible response)..... 10 CHAIR FOERSTER: Let the record reflect that 11 his head was moving up and down, not willy nilly. 12 Okay. All right. Then let's move forward with 13 the prepared testimony. And again if you want to be 14 entered as an -- or accepted as an expert in a field 15 then we'll need to go through your credentials and 16 where you went to school and then we'll have to accept 17 you or not accept you. So would the first person 18 testifying again who you are, what you do, who you 19 represent and would you like to be an expert and what 20 are your qualifications. 21 JASON EWING 22 previously sworn, called as a witness on behalf of 23 Hilcorp Alaska, LLC, stated as follows on: 24 DIRECT EXAMINATION 25 MR. EWING: Yeah, my name's Jason Ewing, I'm a 1 reservoir engineer with Hilcorp Energy Company. I 2 would like to be considered an expert witness. 3 CHAIR FOERSTER: In? 4 MR. EWING: In reservoir engineering. I 5 graduated from Texas A&M in 2008 with a master's degree 6 in petroleum engineering. I spent roughly three years 7 with Hess Corporation as a reservoir petroleum engineer 8 and the last four years now -- roughly four years with 9 Hilcorp as a reservoir engineer. 10 CHAIR FOERSTER: Do you have any questions, 11 Commissioner Seamount? 12 COMMISSIONER SEAMOUNT: I don't. And we 13 designated him as an expert witness I think just last 14 week, is that correct, I know..... 15 CHAIR FOERSTER: That was so long ago I can't 16 remember. 17 COMMISSIONER SEAMOUNT: I know it. In Utah if 18 you're designated an expert witness you're an expert 19 witness forever. 20 CHAIR FOERSTER: Well, Toto, you're not in Utah 21 anymore. 22 COMMISSIONER SEAMOUNT: We're not in Utah 23 anymore. 24 COMMISSIONER MAYBERRY: I have no questions. 25 CHAIR FOERSTER: Nor do I. And do you have any 1 problems with recognizing him as an expert? 2 COMMISSIONER SEAMOUNT: I have not -- I have 3 none unless something changed in the last week. 4 CHAIR FOERSTER: Did anything change in the 5 last week? No. Okay. So..... 6 COMMISSIONER MAYBERRY: Some might forget 7 everything he learned in school. 8 CHAIR FOERSTER: Do you see the light on -- 9 we'll accept you as an expert. Why did I do that. 10 Because it was fun. 11 All right. Please proceed. 12 CHAIR FOERSTER: Are you going to be doing a 13 tag team? 14 MR. SERBECK: Yes, ma'am. 15 CHAIR FOERSTER: Oh, okay. Introduce yourself 16 and as you switch speakers be sure to say your name so 17 that the record that the court reporter gets can 18 recognize who's talking. And remember to identify the 19 slides that you use so that this record will be good 10 20 years from now. 21 All right. Please..... 22 JOHN SERBECK 23 previously sworn, called as a witness on behalf of 24 Hilcorp Alaska, LLC, stated as follows on: 25 DIRECT EXAMINATION 6 1 MR. SERBECK: My name's John Serbeck, I'm a 2 geologist with Hilcorp. I'd like to be recognized as 3 an expert witness..... 4 CHAIR FOERSTER: In? 5 MR. SERBECK: .....in geology. And I graduated 6 from Marietta College with my bachelor's in geology and 7 then master's from the University of Wyoming. Worked 8 for ConocoPhillips for 25 years and Conoco, then 9 ConocoPhillips, for 25 years and then Hilcorp for the 10 last seven. 11 CHAIR FOERSTER: Do you have any question? 12 COMMISSIONER SEAMOUNT: University of Wyoming's 13 a fine school. No questions, no objections. 14 COMMISSIONER MAYBERRY: No questions here. 15 CHAIR FOERSTER: And no objections? 16 COMMISSIONER MAYBERRY: No objections. 17 CHAIR FOERSTER: I have no questions and no 18 objections. We'll accept you as an expert in geology. 19 MR. SERBECK: Thank you. 20 CHAIR FOERSTER: And don't be surprised when I 21 ask what in because we've had geologists who want to be 22 accepted as experts in engineering and landmen that 23 want to be accepted as experts in geology so we have to 24 ask. 25 All right. Please proceed with your testimony. 10 1 MR. EWING: Okay. So we're here today to talk 2 about..... 3 CHAIR FOERSTER: And my name is? 4 MR. EWING: My name's Jason Ewing. We're -- 5 introduction slide right now. The -- we're here to 6 talk about the Swanson River gas pool rule application. 7 As you -- as you noted a second ago there was -- 8 there's three key components. That the first point is 9 to define the Swanson River field gas pools, the second 10 is to allow for unlimited gas well spacing within 1,500 11 feet of the field's external boundary and the third 12 which we have since dropped as of last week which is to 13 authorize community gas production within the wellbore. 14 CHAIR FOERSTER: Why did you drop that? 15 MR. EWING: There was -- there was a -- it -- 16 this item helped us from an operational sense in a 17 matter of speed, it did not prohibit us from 18 accomplishing our goal which is to increase the number 19 of take points in these reservoirs. So it was a number 20 of logistical issues with both the BLM and it sounded 21 like the AOGCC and how we're going to allocate 22 production between the zones. It was not -- it wasn't 23 a deal breaker for us so we had no issue just removing 24 that from the application to make -- to expedite the 25 process and make things more simple. 11 1 All right. So the first slide titling Swanson 2 River field shallow gas overview. I use -- first off I 3 use the term shallow gas indicating anything above the 4 Tyonek G zone. So this is Beluga, Sterling, and 5 Tyonek. So everything above essentially the legacy, 6 you know, oil production at Swanson. 7 There's been roughly 55 bcf of gas produced at 8 Swanson and from 17 shallow gas wells and this excludes 9 gas storage injection and production. This is from 10 1960 through 2014. The rough breakdown is around 27 11 bcf in the Sterling sands, 9 bcf in the Beluga and 12 roughly 19 bcf in the Tyonek. We shoot a peak rate of 13 23 million a day in 2004 under a previous operator and 14 there's been -- out of all the production there's been 15 47 completions out of 30 different sands. And I 16 highlighted that to indicate that, you know, we have 17 roughly, you know, one and a half completions per tank 18 and there's just -- there's simply not been multiple 19 take points in most of these sands. In most of these 20 sands most of the completions go down due to mechanical 21 reasons such as, you know, sand control and the ability 22 to handle, you know, the well seat or standing operator 23 ability to handle the sand to surface. Some go down 24 the water, some go down to depletion, but there has not 25 been the well density required to reach the..... 12 1 CHAIR FOERSTER: So is there any water drive in 2 any of these sands? 3 MR. EWING: Yes. Yes, there's water drive in 4 some sands, some sands are solely depletion drive. 5 CHAIR FOERSTER: Okay. 6 MR. EWING: And I'll show you the actual log 7 here in a second and we'll give examples about. 8 So the second map here is a map of the shall -- 9 Swanson River shallow gas producers. This highlights 10 the 17 gas producers at Swanson River. The -- from -- 11 including all three different intervals including the 12 Sterling slice, the Beluga interval, the Beluga 13 interval and the Tyonek interval. You can see the gas 14 producers are spread out throughout the field. 15 CHAIR FOERSTER: Okay. 16 MR. EWING: This is just to indicate -- the 17 purpose of this is for location, you know, it's a 18 locator map to show you where the producers are and you 19 can see all the Hemlock oil producers here that aren't 20 highlighted with directional surveys. The unit 21 boundary is highlighted as well. 22 The -- I've got three different cartoons here, 23 I'm going to show you the next three slides. This 24 slide is titled Swanson shallow gas producers, 25 Sterling/Upper Beluga. This is our first requested gas 13 1 pool. The cartoon indicates the area of known 2 productivity so you see these two red blobs. These are 3 the two areas of known productivity for the 4 Sterling/Beluga. And you see the associated roughly 5 six, seven completions. The -- this is one of the 6 intervals that we're extremely interested in from a 7 reservoir engineering standpoint as well to -- we see a 8 lot of potential out here. 9 The next slide here is a cartoon showing the 10 Swanson River shallow gas producers Beluga map. You 11 can see most of the production has been in the far 12 north side of the field and multiple producers here in 13 this interval. Once again this area is overlapped with 14 the Sterling for known productive gas, Sterling/Beluga, 15 known productive gas. 16 The next cartoon here shows the Swanson River 17 shallow gas producers Tyonek. So next slide you can 18 see the four different pools where we have gas all the 19 way down to the southern end of the pool and multiple 20 stratigraphic and structural traps of where we found 21 productive Tyonek gas. So this is just to kind of give 22 you and idea of the aerial extent of gas production at 23 Swanson River and what our objectives are, to give you 24 a visualization of why we need these gas pools 25 established. 14 I COMMISSIONER SEAMOUNT: Mr. Ewing..... 2 MR. EWING: Yes, sir. 3 COMMISSIONER SEAMOUNT: .....I'd like to ask 4 Mr. Serbeck who's a geologist how he feels about his 5 maps being called cartoons. They don't look like 6 cartoons to me or are they cartoons? 7 MR. SERBECK: The structural map is a little 8 better than a cartoon, but I think Jason's referring to 9 the blobs are just basically areas -- productive area 10 not on a specific sand, but overall. So it would not 11 be a contact in an individual sand, it just represents 12 a productive area. 13 COMMISSIONER SEAMOUNT: They look pretty 14 detailed to me. 15 MR. SERBECK: We're working on that. 16 COMMISSIONER SEAMOUNT: Okay. 17 MR. EWING: This next slide here, I'm 18 continuing with my background of Swanson River shallow 19 gas. This next slide shows a production pod of the 20 shallow gas production at Swanson River field. It's 21 the slide labeled as shallow gas production. And you 22 can see the roughly 55 bcf of production early ramp up 23 back in the sixties that helped charged the gas flood 24 at -- in the Hemlock followed by the commercial gas 25 production in the eighties through the current time 15 1 frame of the -- you can see the Jurassic ups and downs 2 in production as multiple reservoirs were completed. 3 Peak production is here in 2004, it's roughly 22 4 million a day and then it's since dropped off very 5 rapidly. When Hilcorp took over operations it was 6 roughly shallow gas production of roughly 1.6 million a 7 day and it's currently at 3.7 million a day. 8 The -- this next slide shows -- labeled shallow 9 gas well summary. So it's just a -- a lot of words, a 10 lot of numbers, it shows all the wells out here, 11 production dates as well as cum production volumes. 12 You can see the range of production volumes anywhere 13 from 137 million of gas in the 223-28 well up through 14 22.4 b's in the 242-16 well. The green highlighted 15 well here, the 242-16, is the only productive gas -- or 16 the only producing shallow gas well at Swanson River 17 field right now. It's making roughly 3.7 million a 18 day. These other three wells that are highlighted in 19 orange, the 12-15, 32A-15 and 241-16 are shallow gas 20 producers that have been shut-in due to mainly 21 water/sand control issues. And in some instances we 22 produced just a little bit of water and it has massive 23 sand control issues, sometime we can produce quite a 24 bit of water before the sand control becomes a limiting 25 factor. All three of these wells I've highlighted that 16 1 are currently shut-in have behind pipe Sterling 2 opportunities that we can -- that we can come up and 3 perforate with approve -- with the state's approval, 4 but as of right now we can't -- we cannot complete 5 those sands -- in those sands due to the statewide gas 6 spacing rules. So these are three kind of -- I would 7 say quick hit, but already identified zones that we 8 feel highly confident in, the ones -- you know, if 9 granted approval for these pools. 10 CHAIR FOERSTER: Mr. Ewing, do any of those 11 wells have remedial potential in the zones that they're 12 currently completed in? 13 MR. EWING: No. No, ma'am. 14 COMMISSIONER SEAMOUNT: Where's the gas that 15 went into the Hemlock, where is that gas today? 16 MR. EWING: Still in the Hemlock. 17 COMMISSIONER SEAMOUNT: It's still in the 18 Hemlock. 19 MR. EWING: Yeah. Well, we produced -- I mean, 20 there's been roughly 3 ccf of gas cycled through the 21 Hemlock, you know, and the majority that is just gas 22 was taken both from Swanson and from Kenai gas fields 23 and it's been cycled multiple times and there's still 24 quite a -- I don't know the -- I don't remember the 25 exact volume off the top of my head, but it's in the 17 1 tens of b's of gas that remain in the Hemlock that has 2 not -- that has not been recovered. 3 COMMISSIONER SEAMOUNT: When that goes -- gas 4 goes into the Hemlock does the state take a royalty out 5 of that or..... 6 MR. EWING: The state took royalties when the 7 gas was injected. 8 COMMISSIONER SEAMOUNT: Okay. 9 MR. EWING: Yeah, and we're not currently 10 injecting any more gas into the Hemlock. The gas flood 11 was blown down back in the nineties and early two 12 thousands. 13 So the nuts and bolts of why we're here, this 14 is the request for review slide. This is straight out 15 of the letter sent by Mr. Duffy. Hilcorp Alaska, LLC 16 requests the AOGCC to amend conservation order 123B to 17 accomplish two items here. Formally define the Swanson 18 River field's gas pools which is amendment of rule 3 19 and to allow for unlimited gas well spacing within 20 1,500 feet of the field's external boundary which is 21 amendment of rule S. This -- the second rule is going 22 to allow us to..... 23 CHAIR FOERSTER: I think that's badly worded. 24 You know, if you're within 1,500 feet of the field 25 boundary then here's the boundary and here's where you go 1 are. I think it's outside 1,500 feet of the field's 2 boundary. Is that what you mean, you don't mean that 3 you want to be as unlimited as you can along the 4 boundary, you want to be 1,500 feet away from the 5 boundary, correct? 6 MR. EWING: Yes, ma'am. 7 CHAIR FOERSTER: Okay. 8 MR. EWING: So the next slide here, the pool 9 definition, amendment of rule 3, highlights the 10 specifics. It's also in the letter sent by Mr. Duffy 11 and it states the three different pools that we intend 12 to establish. The Sterling/Upper Beluga gas pool 13 includes all intervals which correlate with the 14 interval from 389 feet TVD to 4,490 feet TVD in the SCU 15 41-4 well. The Beluga gas pool includes all intervals 16 which correlate with the interval 4,490 feet TVD to 17 5,120 feet TVD in the SCU 41-4 well. The Tyonek gas 18 pool includes all intervals which correlate with the 19 5,120 interval TVD to 10,085 TVD in the SCU 41-4 well. 20 CHAIR FOERSTER: How many discrete or not so 21 discrete separate little lenses that aren't in 22 communication reside within each of those three, is it 23 just a whole bunch of little lenticular deposits? 24 MR. EWING: Multiple intervals within each of these 25 pools. Like the first slide mentioned the -- there was 19 1 47 completions in 30 different sands so within these 2 different pools there's 30 different total sands that 3 have produced. And as we drill additional wells..... 4 CHAIR FOERSTER: You'll find more? 5 MR. EWING: .....we'll likely find more. And 6 that's a great segue for the next slide. This is just 7 a quick -- this next slide identifies Swanson River 8 shallow gas producers SCU 41-04 log is a snapshot of 9 the entire log and it just shows that the multiple 10 intervals that we're requesting the new pool rules. 11 You see the Sterling/Upper Beluga pool in the upper 12 section, in the middle you have the Beluga pool and in 13 the bottom the Tyonek pool, at the very bottom you have 14 the Hemlock low pool. 15 The next slide is identifying the details of 16 the well spacing amendment, rule number 5. That's what 17 the slide is titled. And it says there should be no 18 restrictions to gas well spacing except that no 19 wellbore may be open to test or regular production in a 20 well within 1,500 feet of the external property line of 21 the affected area describe above where the owners and 22 landowners are not same on both sides of the line. 23 The..... 24 CHAIR FOERSTER: Can -- before you move on to 25 the next one. 20 1 MR. EWING: Yes, ma'am. 2 CHAIR FOERSTER: Within the unit area are there 3 any royalty check differences? 4 MR. EWING: With -- within the unit area I -- I 5 would defer to Mr. Duffy to answer that question. 6 MR. DUFFY: (Indiscernible - away from 7 microphone)..... 8 CHAIR FOERSTER: Well, would you come up and 9 speak into the microphone. 10 MR. DUFFY: Yes. 11 CHAIR FOERSTER: So how do you address that in 12 your well -- does your well placement cause someone 13 perhaps to get more or less than they would otherwise 14 get? 15 MR. DUFFY: Correct. And so what we're trying 16 to do, there's established PAs, participating areas, 17 administered by BLM and the goal of this application is 18 to establish the gas pools to match the participating 19 areas. So that would be vertically and also that would 20 allow for the reporting. So the production of Upper 21 Sterling or Sterling/Beluga well would be reported for 22 royalty purposes as it is now for -- to BLM and to the 23 royalty owners. 24 CHAIR FOERSTER: Okay. So does..... 25 MR. DUFFY: Does that..... 21 1 CHAIR FOERSTER: .....so if you -- does -- 2 would well placement change royalty payment within the 3 unit or has that already been resolved? 4 MR. DUFFY: No, the royalties for particular 5 wells or I'm sorry, particular leases or segments 6 within leases are -- have been defined for a -- just a 7 number of years and we'd be glad to submit if you 8 wanted to see the current Swanson River exhibits to 9 show how the gas pool and the royalty system is 10 administered. 11 CHAIR FOERSTER: That would probably be good 12 for the record, but the ques -- answer to my question 13 is well placement does not impact who gets paid what? 14 MR. DUFFY: No, production counts. Production 15 from a particular zone within a defined PA defines how 16 the royalties are paid. But the leases and the unit 17 exhibits, we'll submit those and walk through if you 18 have additional questions on it. 19 CHAIR FOERSTER: Well, I'm not getting my 20 question answered to my satisfaction, maybe I'm not 21 asking it clearly enough for you, but what I'm looking 22 for -- we're getting -- we're about to give you or 23 we're considering giving you..... 24 MR. DUFFY: Uh-huh. 25 CHAIR FOERSTER: .....permission to put any 22 1 wells anywhere you want. And what I'm asking is by 2 having that authority can you game the system so that 3 well placement allows you to put wells on lower royalty 4 interest areas..... 5 MR. DUFFY: No. 6 CHAIR FOERSTER: .....and exclude people from 7 their share? 8 MR. DUFFY: No, the answer's no. Because the 9 placement of the well itself isn't the determining 10 factor, it's the drainage area of that well. 11 CHAIR FOERSTER: And that's already been 12 defined? 13 MR. DUFFY: And those are defined. 14 CHAIR FOERSTER: Okay. 15 MR. DUFFY: And if we do more exploration or if 16 we find additional sands that goes back to your 17 previous question earlier, then we'll have to work with 18 BLM to establish or --either establish a new 19 participating area, so take those landowners and then 20 apply the direct royalty or expand and adjust an 21 existing boundary. 22 CHAIR FOERSTER: Okay. Thank you. 23 COMMISSIONER MAYBERRY: Well, Mr. Duffy, while 24 you're there. So then I guess just to maybe clarify 25 that a little bit further. Then any wells that will be 23 1 drilled will be within the defined PAs? 2 MR. DUFFY: Any wells that are drilled..... 3 COMMISSIONER MAYBERRY: Well, you're saying you 4 have participating areas where the allocation is 5 already determined so any..... 6 MR. DUFFY: Yes, but if we..... 7 COMMISSIONER MAYBERRY: .....future work or 8 wells that are done or new wellbores will be within the 9 established PAs? 10 MR. DUFFY: No, they could be say an 11 exploratory well or a well that's outside of a current 12 PA. If that's the case then it would be -- we'd have 13 to work with BLM to establish a tract allocation for 14 that until we get enough information to expand the 15 participating area. 16 COMMISSIONER MAYBERRY: Okay. 17 CHAIR FOERSTER: Okay. Mr. Ewing, please 18 continue. 19 MR. EWING: The next slide here, this is the -- 20 kind of the meat of the geological pitch, it's labeled 21 stratigraphic nature of the Sterling. What we have 22 here is we have a cross section between the Swanson 23 River 242-16 well and the Swanson River 241-16 well. 24 Those are both directional wells, however the Sterling 25 interval is roughly 900 feet apart from each other. Im 1 The 241-16 was drilled with a spacing exception by a 2 previous operator. The cross section -- this is a 3 cross section index map, you can see the northern side 4 of the field from those other maps that I showed you 5 earlier and this is a -- this is the -- the red area 6 highlights the known Sterling production on this side 7 of the field. And you can see the zoomed in snapshot 8 down here. Those are 850 feet apart with the 241-16 9 and the 242-16 from the same -- from the same pad. So 10 the intent of us showing this is to show two wells that 11 are relatively close to each other have modern logs and 12 to highlight the lack of sand or the lack of sand 13 continuity between these two wells for some sands and 14 other sands are more continuous. 15 So the -- John, do you want to..... 16 MR. SERBECK: That -- this is John Serbeck. So 17 the cross section just shows that we have some lobes 18 within this Sterling coming and going. The wells are 19 only 850 feet apart. So under statewide rules we might 20 see a sand in one wells that we have not perfed, but 21 since the other well is perfed and it's 850 feet away 22 in the same unit then we would not be able to pick up a 23 sand that's in one well and not in the other. And 24 that's the whole crux of our request is to eliminate 25 this sort of thing. 25 1 COMMISSIONER SEAMOUNT: Is -- those gray areas 2 in the middle tract are those perforations? 3 MR. EWING: The -- these guys right here? 4 COMMISSIONER SEAMOUNT: Yeah. 5 MR. EWING: I believe they're pay flags. 6 They're not perforations. The answer's no, they're not 7 perforations. The -- this is Jason Ewing speaking. 8 The 242-16 is currently perforated in the -- what we've 9 labeled the B4 -A and the B4 sands right here where the 10 mouse is indicating. So this lobe right here was 11 perforated in 2009 and we added the B4 lobe, also 12 Sterling sand, here recently. And this is where all of 13 our production from shallow gas is coming from. This 14 all set (ph) well is shut-in. So this all set (ph) 15 well has -- is not producing. The -- as you go from 16 the top here you can see this is the -- we call the A- 17 ll sand and the BO sand. The BO sand has fairly good 18 lateral continuity across this 850 foot area. As you 19 step down to the B1 sand, what we label the B1 sand in 20 242-16 well, well developed sand in the 242-16 and 21 it's, you know, practically nonexistent in the 241-16 22 only 850 feet away. This was -- this B1 sand was co - 23 mingled with multiple other Sterling sands when this 24 well was initially drilled. So you step down, you see 25 multiple lobes in this 242-16 well that's not evident 26 1 in the 241-16 well. And then you get down to the what 2 we're calling the B3 sand and it is fairly laterally 3 extensive. B4 sand fairly laterally extensive, but you 4 see how it thins over the 241-16 well and then it 5 develops a separate isolated lobe over here in the 241- 6 16 well. So we get these -- we get some continuity and 7 we also have some, you know, additional lobes coming 8 and going. And just because these are mapped between 9 the two doesn't mean they're necessarily in hydraulic 10 communication as well. 11 The next sand down that's not part -- you know, 12 does not have a sand cartoon with it is the -- this B5 13 sand is a gas sand that's produced in several wells and 14 you see a clear gas on top of the water. So we have -- 15 this is a strong water drive gas sand. Most -- the 16 average completions are up at 1.5 b's in the B5 and B6 17 sand. Both of these are gas on top of water. And what 18 happens is that the well produces one to one and a half 19 b's and then it waters out, but the overall contact 20 does not move up, you know, much at all. So it's 21 fairly laterally continuous sand and we need additional 22 -- essentially take points to adequately drain this gas 23 on top of water. 24 COMMISSIONER SEAMOUNT: Where's the top of your 25 proposed pool? 27 1 MR. EWING: The top of the proposed pool for 2 the Sterling/Upper Beluga is at 389 feet TVD. 3 COMMISSIONER SEAMOUNT: I what? 4 MR. EWING: It's -- I'm going back to slide -- 5 the slide labeled pool definition, amendment to rule 3. 6 So the top of the start of the Beluga gas pool, we took 7 it up to 389 feet TVD which after submitting this it 8 was brought to our attention that potentially..... 9 COMMISSIONER SEAMOUNT: Do you see gas that 10 high? 11 MR. EWING: No, you..... 12 COMMISSIONER SEAMOUNT: Okay. 13 MR. EWING: .....you do not. We have -- not 14 yet. 15 COMMISSIONER SEAMOUNT: Okay. Can we go back 16 to your last slide then? 17 MR. EWING: Yes, sir. 18 COMMISSIONER SEAMOUNT: I see those high 19 resistivities above the cartoon sands. Are -- is that 20 freshwater? 21 MR. SERBECK: Yes. 22 COMMISSIONER SEAMOUNT: Okay. 23 MR. SERBECK: A lot of that's freshwater. 24 COMMISSIONER SEAMOUNT: And then you go down to 25 that lowest hay below the cartoon sands and you show 1 gas/water contact. It looks -- does that mean -- I see 2 low resistivity, does that mean the resistivity -- it 3 gets -- it's more saline down there than above the 4 Sterling pay? 5 MR. EWING: You see a change in -- yes. You 6 see a change in salinity and you also see an impact of 7 a clay content on the resistivity -- on your 8 resistivity. 9 CHAIR FOERSTER: Mr. Ewing, in a former life 10 would a company that no longer exists in a state that 11 used to have a good football rivalry, I worked a 12 reservoir that had a lot of little lenticular come and 13 go gas sands, I used to call it a very chocolate chip 14 rich chocolate chip cookie. 15 COMMISSIONER SEAMOUNT: Were they 16 discontinuous? 17 CHAIR FOERSTER: They were. And we were 18 successful in drilling fewer wells and then 19 hydraulically fracturing those wells to connect some of 20 those little discontinuous intervals, has Hilcorp 21 thought about that? 22 MR. EWING: The -- we have looked -- we have 23 performed multi stage fracks in other res -- in other 24 fields of this Kenai gas field, developing the Lower 25 Beluga. So we..... 29 1 CHAIR FOERSTER: So that kind of technique is 2 in your portfolio? 3 MR. EWING: Yes, absolutely. Yeah. I 4 personally worked that strategy in the Gulf coast 5 working Wilcox (ph) and Wilcox and upper BO (ph) sands. 6 This..... 7 CHAIR FOERSTER: I worked it with Vicksburg, 8 but..... 9 MR. EWING: So this -- the application here, I 10 don't think it's applicable in the Sterling and could 11 be applicable deeper in the lower permeability, low 12 Beluga/Tyonek sands. These sands are relatively high 13 permeability sands, we're in the tens of millidarcies 14 to potentially 100 millidarcy type permeability. So 15 the multi stage frack, the benefit doesn't outweigh the 16 reward which the reward would be increasing 17 deliverability. By co -mingling multiple sands which 18 the previous operator did in the 242-16 well, this is a 19 great example, they initially completed this well in 20 the BO sand and the B1 sand, the B2 sand and the B4 21 sand. And so they had four different sands open, made 22 roughly 18 bcf with these four sands open. Water hit 23 -- water hit, started producing sand and they're like 24 okay, it's done. They ran a liner and then plugged 25 down to the -- plugged down to pay below -- you can see 9M 1 here in the log in the Beluga interval. We have -- 2 since our previous upper (indiscernible) came back up 3 and perforated a little -- actually a load that wasn't 4 initially perforated and made like a rough 5 (indiscernible) for several years, I mean, a fairly 6 decent completion. And we went in and added one of the 7 intervals that was previously co-mingled and boosted 8 production to 3.7 million a day with a high 9 (indiscernible) pressure. So essentially by co- 10 mingling multiple zones you have the risk of -- it's 11 not as much a risk, you have to be more careful in 12 diagnosing where water's coming from versus where gas 13 is coming from. And Hilcorp is -- you know, tends to 14 be more methodical about the process and myself as a 15 reservoir engineer, I try to establish tank size and 16 understand where the gas is coming from. So I'm -- 17 we're completed in this guy right here and in the 241- 18 16 I would like to come in and for instance, you know, 19 I'd start at the bottom of the well and start working 20 my way up in the Sterling gas sands in different lobes. 21 We could be producing the same lobe which would also 22 increase the UR from the fact that most of these wells 23 don't go down because of pressure depletion, but they 24 go down due to sand control issues. So apologize for 25 rambling, I..... 31 1 CHAIR FOERSTER: Oh, that's okay. But it also 2 looks like you have adequate well density that there's 3 plenty of wells that you can go in and perforate plenty 4 of these little lenses? 5 MR. EWING: We do have multiple wellbores right 6 now with behind pipes that we're going to start off 7 with, but we're in the middle of field study to map -- 8 actually map volumes for each one of these little 9 lenses and do a thorough engineering/geological field 10 study which we're in the middle of and which I expect 11 multiple drill well opportunities to come out of as 12 well..... 13 CHAIR FOERSTER: Okay. 14 MR. EWING: .....in addition to the behind 15 pipes. 16 CHAIR FOERSTER: Thank you. 17 MR. EWING: And that's the last slide I have. 18 I've got a series of backups..... 19 CHAIR FOERSTER: Okay. 20 MR. EWING: .....if you have additional 21 questions. 22 CHAIR FOERSTER: Okay. Unless either one of 23 you has a question off the top of your head I suggest 24 that we take a recess and let our technical folks tell 25 us the smart questions to ask. Is that okay with you 32 1 guys? 2 COMMISSIONER MAYBERRY: Uh-huh. 3 CHAIR FOERSTER: So it is 9:36. We will 4 reconvene at 10 until 10:00. We're recessed. 5 (Off record) 6 (On record) 7 CHAIR FOERSTER: Okay. All right. It is 9:47 8 and we're back on the record. 9 So we've got well, seven or eight questions for 10 you guys. First how do the PA boundaries compare with 11 the proposed pool boundaries? 12 MR. EWING: This is going to be a question best 13 for Mr. Duffy. I do have several backup slides that 14 show some of the PA. 15 CHAIR FOERSTER: Okay. And if you guys are 16 going to be doing tag team be sure to say who's 17 talking. 18 MR. EWING: Yes, ma'am. Yes, this is Jason 19 Ewing speaking. 20 CHAIR FOERSTER: Okay. 21 MR. EWING: Let me find -- this one right here, 22 Dave? 23 MR. DUFFY: Yes. 24 MR. EWING: I have slide -- backup slide 25 exhibit A, Swanson River field, Swanson River unit, 33 1 Soldotna Creek. 2 CHAIR FOERSTER: And will you provide us a copy 3 of that slide for the record? 4 MR. EWING: Yes, I will. 5 CHAIR FOERSTER: Okay. 6 MR. DUFFY: The proposal for..... 7 CHAIR FOERSTER: And this is David Duffy now. 8 MR. DUFFY: This is David Duffy speaking. The 9 proposed definitions of the three gas pools we'd like 10 to have applied throughout the entire Swanson River 11 field which is the same as the affected area of the 12 conservation order. And so that way the -- say the -- 13 for example, the Upper Sterling/Beluga pool would exist 14 geologically anywhere within the field that you might 15 find it. So the existing participating areas, they're 16 defined by current boundaries of the aerial extent of 17 the producing area. But through future exploration or 18 if a new well is drilled and they found Sterling 19 outside of -- Sterling gas outside of an existing 20 participating area then that would allow for the 21 expansion of the participating area, but then the 22 definition of the formation itself would apply 23 throughout the field. 24 CHAIR FOERSTER: Okay. Thank you. This one's 25 for Mr. Ewing probably. Is there a lot of pressure 34 1 variation among the different lenses as you perforate 2 them and observe what your -- what the pressure is? 3 MR. EWING: Yes. There's different pressure 4 variations and we -- a majority of these lenses that we 5 know about have been produced already so they're 6 partially depleted. Most of them have not been 7 completely depleted, they're -- due to the fact that 8 they've gone down not due to pressure support rather, 9 you know, completion failure with sand control. So, 10 yeah, there is different pressures throughout different 11 sands. In general it's not been a big enough 12 differential to keep us from -- in some instant -- I'm 13 sorry, I apologize. In some instances we co-mingle 14 sands and in some instances we don't. And our general 15 -- my general philosophy as a reservoir engineer is I 16 want to get as much information as I can to make the 17 best estimation on tank size among other things. So I 18 prefer to not co-mingle multiple sands within one 19 wellbore. Under the current statewide, you know, 20 rules, it's quite prohibitive for an operator to 21 produce multiple sands without shooting -- without 22 perforating them all in the same wellbore. So if 23 they're in the Sterling -- if they're in the 24 Sterling/Upper Beluga section like Chevron/Unical did 25 previously where they went in and perforated multiple 35 1 Sterling sands to drain all the sands, they couldn't 2 drain all those sands together because they could not 3 complete individual lobes in individual well bores on 4 the tighter spacing. So I may -- I'm not sure if I 5 answer your question..... 6 CHAIR FOERSTER: Well..... 7 MR EWING: .....exactly. 8 CHAIR FOERSTER: .....no, but you gave me 9 another question. If Hilcorp's intent is to co-mingle 10 then how are you going to perforate these individual 11 sands and get these tank sizes? 12 MR. EWING: Our intent is not to co-mingle 13 multiple pools, but there might be -- there might be 14 lobes within individual pools that we co-mingle. 15 The..... 16 CHAIR FOERSTER: But the same question applies? 17 MR. EWING: Yes, it would be in a sand that we 18 believe is of similar pressure so that we -- so we're 19 not cross holing (ph) down hole. And it's a well by 20 well, completion by completion basis where we would 21 make this call. 22 CHAIR FOERSTER: But there's nothing -- there's 23 nothing in the proposed rules that would prohibit 24 Hilcorp just going in with a big, long gun and 25 perforating everything and let the data go wherever the 36 1 data wants to go..... 2 MR. EWING: With -- within..... 3 CHAIR FOERSTER: .....and the crossflow. 4 MR. EWING: .....within a given pool, no, as 5 there was not beforehand with the way it currently 6 stands. 7 CHAIR FOERSTER: Okay. Okay. 8 MR. EWING: We're trying to -- we're trying to 9 -- we're trying to more effectively drain individual 10 sands which is always done by one lobe at a time. In 11 -- you know, in an instance -- I can give a better 12 example here from my backup slides. I'm scrolling to 13 the -- it's a backup slide which I'll provide 14 afterwards titled SRU 242-16 Sterling log. This is -- 15 this is the 242-16 well which is in the cross section I 16 showed earlier and it's a zoom in of the Sterling 17 completion. An example of what you're asking is this 18 -- this lobe right here was added -- was perforated by 19 itself in 4/12/2009, it's a B3A2 curve. And we went in 20 and added a lobe immediate -- you know, immediately 21 below it that is the B4 sand. And this B4 sand we knew 22 was partially depleted. So the zoning ring was 23 partially depleted, it was making roughly 700 ncf a 24 day. We knew the B4 sand was going to be largely 25 depleted as well because it was in -- part of the 37 1 initial completion and we felt -- we felt 2 confident..... 3 CHAIR FOERSTER: Because it was a what -- I'm 4 sorry, Commissioner Seamount sneezed and I didn't hear 5 you, it was a what completion? 6 MR. EWING: The B4 sand was part of the initial 7 completion as well where..... 8 CHAIR FOERSTER: Initial completion. 9 MR. EWING: .....where it was co -mingled with 10 the B0, B1, B2. 11 CHAIR FOERSTER: Initial was the word I didn't 12 hear. 13 MR. EWING: Yes, ma'am. And so and this is an 14 example where we didn't think this was under the 15 original pressure, we felt highly confident it wasn't 16 going to be depleted. An exact reservoir pressure we 17 didn't know, but we added -- we added it, we didn't 18 have any issues operationally adding it and we've since 19 increased the rate from 700 ncf a day right here and 20 you see the jump to -- we're right now over 3 and a 21 half to 4 million a day. If the -- we make a point of 22 flowing it at a bottom hole pressure that's below the 23 build up pressure of the other wellbore or the other 24 sand so we prevent crossflow. The well should end and 25 there can be some crossflow, but then if you just 1 produce it right back out when you -- whenever we turn 2 the well back around. 3 CHAIR FOERSTER: So what's to prevent Hilcorp 4 from just taking the approach of data doesn't make us 5 money, but oil and gas do so we're just going to go and 6 perforate everything? 7 MR. EWING: So that's what the previous 8 operator did and they made 18 and a half b's out of the 9 well initially. And if I would have -- so if I were to 10 go back do the exact same thing the previous operator 11 did and just add every sand together and this is a 12 judgment call in every single completion, you don't 13 increase -- in this situation where I had four sands 14 that were co-mingled, water hit, sand hit, I know one 15 of those sands is water dry. So my methodology for 16 this particular well, this particular completion, start 17 at the bottom, start working my way up. If I found 18 water my first attempt of adding one of those 19 individual sands I would -- we would isolate that with 20 a, you know, bridge plug and cement and then come up to 21 the next zone and test for water, test for gas. So I 22 know one of these sands or more were producing water, I 23 don't know which one and so it was just a methodology 24 -- you know, of the..... 25 CHAIR FOERSTER: Okay. 39 1 MR. EWING: .....methodical approach at going 2 in and finding it. 3 CHAIR FOERSTER: So what do you do as you're 4 add -- methodically adding first -- you got three down 5 low that are doing great and then you perf a fourth and 6 it's water then what do you do, hope you can get a good 7 squeeze? 8 MR. EWING: If the three down low were doing 9 great I wouldn't perf the fourth. 10 CHAIR FOERSTER: Okay. 11 MR. EWING: I mean, it..... 12 CHAIR FOERSTER: How would you know when to 13 stop, you know, you did the first three? 14 MR. EWING: It comes down to when you start 15 having issues with the first completion. So right now 16 the well's making 3 and a half million a day on -- with 17 a flowing tube (ph) pressure of around 670 pounds..... 18 CHAIR FOERSTER: Uh-huh. 19 MR. EWING: .....I'm not going to start adding 20 perfs until..... 21 CHAIR FOERSTER: Okay. 22 MR. EWING: .....that completion approaches its 23 economic limit. 24 CHAIR FOERSTER: Okay. 25 MR. EWING: So once it's approaching its .O 1 economic limit I might add -- if I find water that -- 2 that completion was already at its economic limit..... 3 CHAIR FOERSTER: So it wasn't a loss? 4 MR. EWING: Yeah. 5 CHAIR FOERSTER: Okay. 6 MR. EWING: It's not going to be a -- it's not 7 going to be a loss of reserves. 8 CHAIR FOERSTER: Okay. 9 MR. EWING: Then you plug both back and come up 10 to the next -- the next sand. 11 CHAIR FOERSTER: Okay. Okay. 12 MR. EWING: But it's a judgment call based on 13 each -- on each one and it's the things that we do 14 actively every day..... 15 CHAIR FOERSTER: Okay. 16 MR. EWING: .....I mean..... 17 CHAIR FOERSTER: Okay. So there's no guarantee 18 that somebody, you know, after you're -- you and I are 19 gone won't say well, the hell with that, we're going to 20 just perf everything, there's no guarantee that that 21 won't happen, but that's the current plan. 22 MR. EWING: Yes, ma'am. And..... 23 CHAIR FOERSTER: Okay. 24 MR. EWING: .....there's no guarantee as there 25 is not in the current statewide..... 41 1 CHAIR FOERSTER: Right. Right. 2 MR. EWING: .....rules. 3 MR. SERBECK: Just a comment. John Serbeck 4 again. So Hilcorp's business is squeezing the last bit 5 of oil and gas out of these reservoirs that people have 6 left behind. So our methods are a little different 7 just because we can't co -mingle everything and have the 8 same result with one water/sand shutting off the whole 9 system..... 10 CHAIR FOERSTER: Gotcha. 11 MR. SERBECK: .....so we work through it. 12 CHAIR FOERSTER: Okay. I want to move to 13 something different. Why did you pick 389 feet as the 14 top? 15 MR. EWING: We picked it -- the exact depth of 16 389 feet I can't speak to, I have to defer to either 17 David Duffy or Larry Greenstein, however the idea of 18 setting it -- setting it shallow was in case we find 19 additional shallow gas pay, we would not have to -- it 20 would be included in the -- in the gas pool. 21 COMMISSIONER MAYBERRY: Well, Madam Chair, if I 22 could interrupt for a second. Thinking about just that 23 question I was just looking back at the application 24 materials and noticed something. In the application 25 we're talking about the Sterling/Upper Beluga pool and 42 1 I'm looking at page 1 of the October 24 application, it 2 defines the pool as an interval correlating to 2,140 3 true vertical feet to 4,490 feet true vertical depth in 4 the SCU 41-4. And then in your slide materials under 5 the pool definition for the Sterling/Upper Beluga pool 6 it seems that it's defining a different interval. 7 MR. EWING: Which page were you on, sir? 8 CHAIR FOERSTER: Page 1. 9 COMMISSIONER MAYBERRY: Page 1 of the 10 application and then I was looking -- comparing that to 11 the pool definition amendments in your slide materials 12 and it seemed to have defined a different interval -- 13 intervals. The slide materials, it goes up as shallow 14 as 389 feet where in the application it's much deeper, 15 the shallowest to -- what it looks to me is 2,140 feet. 16 So I'm just wondering if you can explain..... 17 (Whispered conversation) 18 MR. DUFFY: May we approach? 19 COMMISSIONER MAYBERRY: Sure. 20 MR. DUFFY: It looks like..... 21 COMMISSIONER MAYBERRY: Oh, well, yours is 22 dated January 14th, mine's dated October 24th. 23 MR. DUFFY: And this is -- this is a printoff. 24 I'll have to go back and check on the date. I would 25 defer to what the presentation is. 43 1 CHAIR FOERSTER: Well, it's really bad form to 2 give us confidential stuff that's not confidential, 3 give us an application that's not the application, give 4 us a second application that differs from the first 5 application and then have slides and say don't go with 6 either application, go with the slides. That's just 7 bad form. I don't know what -- how to handle that. 8 COMMISSIONER MAYBERRY: Well, did you guys -- 9 was there a new materials that were filed just 10 yesterday? 11 MR. DUFFY: No, this version that I picked up 12 off the chair was printed off..... 13 MR. SERBECK: That's my copy. 14 COMMISSIONER MAYBERRY: Oh, just like an auto 15 update on the date. I hate those things. So you're 16 saying go with the slide materials in terms of the pool 17 definition? 18 MR. DUFFY: Because I'm deferring from the..... 19 CHAIR FOERSTER: You need to speak into the 20 microphone and identify yourself. 21 MR. DUFFY: Yes. My name is David Duffy and 22 the cover letter on the application that I just looked 23 at from Commissioner Mayberry is the figure that I 24 wrote on the original application. The materials does 25 present a shallower depth. 1 COMMISSIONER MAYBERRY: Okay. Because -- I 2 mean, the only -- Commissioner Seamount raised a good 3 point, we're just looking at in terms of these depths 4 and thinking about freshwater it becomes very relevant. 5 And so..... 6 CHAIR FOERSTER: So what is your deepest water 7 zone? And this is Jason Ewing answering. 8 MR. EWING: Yeah. I'll have to double check 9 this depth with Mr. Larry Greenstein. This is Jason 10 Ewing speaking. I believe that the drinking water 11 exemption depth's around 1,750 to 1,800 feet deep. The 12 -- this is -- I apologize for any kind of discrepancy 13 that's happened with the application. I know we had 14 sent an initial draft and then went back in and 15 submitted a final. I don't know if that's where the 16 cause of confusion -- where the cause of confusion with 17 this is at. But for our purposes the base of the 18 drinking water -- fresh drinking water exemption depth 19 is fine from the top of the Sterling/Upper Beluga gas 20 pool. I mean, this was to cover our bases in case we 21 find -- in case we find gas, you know, shallow in the 22 future. This is not a -- this is not a major issue 23 that we're -- you know, we're trying..... 24 COMMISSIONER MAYBERRY: Yeah. Yeah, we..... 25 MR. EWING: .....we don't know of any shallow 45 1 gas above the drinking water exemption depth. 2 CHAIR FOERSTER: So what is your shallowest 3 known gas? 4 MR. EWING: The shallowest known gas that we 5 have in the field right now is -- you can actually see 6 it in this log, is this 810 sand. And it's roughly I 7 believe -- this is in mb not tvd, I believe we're in 8 the 26 to 2,800 feet tvd range. 9 COMMISSIONER MAYBERRY: Okay. And so did I 10 hear you correctly, did you say that you were 11 comfortable with defining the top of the Sterling/Upper 12 Beluga as the base of the existing..... 13 MR. EWING: Yes. 14 COMMISSIONER MAYBERRY: .....exemption? 15 MR. EWING: Yes, that would be fine. 16 CHAIR FOERSTER: Okay. Well, why don't we 17 leave the record open for a week so that you guys can 18 submit an actual depth that you want to use rather than 19 put that on to us. 20 MR. EWING: That's fine, yes, ma'am. 21 COMMISSIONER SEAMOUNT: I believe that's the 22 way they do it in North Cook Inlet. It's the base of 23 the freshwater..... 24 CHAIR FOERSTER: Okay. 25 COMMISSIONER SEAMOUNT: .....top of the gas. .R 1 CHAIR FOERSTER: Okay. My last questions are -- 2 has Hilcorp spoken with ELM in regard to this 3 application? 4 MR. EWING: Yes we have, the details of that 5 David Duff -- Mr. David Duffy will have to fill you in. 6 CHAIR FOERSTER: Okay. And so what we need is 7 a characterization of ELM's position regarding your 8 application. 9 MR. EWING: Can I defer to Mr. Duffy? 10 CHAIR FOERSTER: Sure. You need to come up, 11 make sure the lights are on. 12 COMMISSIONER SEAMOUNT: Unless the ELM..... 13 CHAIR FOERSTER: Unless the ELM people want to 14 answer that question. 15 MR. DUFFY: This -- my name's David Duffy. To 16 answer the question we've shared the application with 17 ELM, we've offered an opportunity for a technical 18 review, they had concerns or questions about the co- 19 mingling application which led to us withdrawing that 20 portion of it. And after we withdrew that portion of 21 it it's my understanding that they were in support of 22 it. I also understood that they were to submit an 23 email or a letter in support of the application. But 24 ELM is also here. 25 CHAIR FOERSTER: Okay. They have not -- we 47 1 haven't received that letter, but I'm going to assume 2 that if the BLM people that are in the room had any 3 problems they'd be standing up and waving their arms 4 right now so I'll take your word for it that they 5 don't. 6 Okay. Did I leave anything out, Commissioner 7 Seamount? 8 COMMISSIONER SEAMOUNT: I don't think so. 9 CHAIR FOERSTER: Okay. Commissioner Mayberry, 10 do you have anything -- any other questions for the 11 good of the order? 12 COMMISSIONER MAYBERRY: Well, I guess there was 13 just one other that we talked about. Are you aware of 14 any water wells in the vicinity? 15 MR. EWING: I'm not aware of any water wells in 16 the vicinity. 17 COMMISSIONER MAYBERRY: And then that's it for 18 me. 19 CHAIR FOERSTER: Okay. Well, is there anything 20 else that Hilcorp wants to add to its testimony? 21 MR. EWING: No, ma'am. 22 CHAIR FOERSTER: Okay. Is there anyone else 23 who would like to testify? 24 (No comments) 25 CHAIR FOERSTER: Okay. No one is doing 1 anything histrionic so we will leave the record open 2 for seven days, calendar days from today, to allow 3 Hilcorp to provide us with a revised top depth for the 4 top sands. 5 All right. Any final comments? 6 COMMISSIONER SEAMOUNT: Just thank you to 7 Hilcorp for coming in today and giving a good 8 presentation. 9 CHAIR FOERSTER: Okay. Mr. Mayberry, any 10 comments? 11 COMMISSIONER MAYBERRY: Nothing further, no. 12 CHAIR FOERSTER: Okay. The only comments that 13 I would make are one, thank you for being an operator 14 that is working diligently and enthusiastically to 15 develop Alaska's reserves; two, learn from today's 16 experience, don't stamp things that are confidential 17 that I can get from a book from the library; and three, 18 do a little bit better job of making sure that you've 19 organized what you're going to say with what you've 20 submitted. 21 All right. And we're adjourned. 22 (Adjourned - 10:07 a.m.) 23 (END OF PROCEEDINGS) 1 TRANSCRIBER'S CERTIFICATE 2 I, Salena A. Hile, hereby certify that the 3 foregoing pages numbered 2 through 51 are a true, 4 accurate, and complete transcript of proceedings of 5 January 15, 2015, Docket No.: CO 14-030 transcribed 6 under my direction from an electronic sound recording 7 to the best of our knowledge and ability. 8 N 10 Date Salena A. Hile 11 50 NAME STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION Public Hearing CO -14-030 Hearing Hilcorp Alaska LLC. January 15, 2015 at 9am AFFILIATION Testify (yes or no) .Jo /4�� yrs Ti IQ � SL/QoanJ l �i,egcd�ky �C. M /tl o Ky- is"� i v elm r) re-+ra )zeu m News Swanson River Gas Pool Rules W -1 ri g John Serbeck Swanson River Field Shallow Gas Overview • rV55 Bscf produced from 17 shallow gas wells (excluding gas storage) from `60 to'14 — 27.1 Bscf from Sterling — 9.3 Bscf from Beluga — 18.9 Bscf from Tyonek • Peak rate of rv23 M M/d in 2004 • 47 completions out of 30 different sands — 20 Sterling Completions — 11 Beluga Completions — 16 Tyonek Completions Swanson River Shallow Gas Producers Sterling/Upper Beluga Tyonek Swanson River Shallow Gas Producers i Sterling/Upper Beluga Swanson River Shallow Gas Producers Swo Sh Company: On Stream:07MJ19W Field: SWANSON RNER it Current Status: 3 104 2 104 6 5 Shallow Gas Production SHALLOW GAS WELLS Gp:55092 MMscf Np: 0.507 Mstb Wp: 1638.992 Mstb Ocond:0.000 LIM 103 M Shallow Gas Well Summary Well Producing Dates Cum Gas (MMscf) 12-15 '99 -'14 2,539 32A-15 '10 -'14 1,020 21-33 '62 -'65 1,595 211-15 '63 -'66, '87 -'88 3,650 212-10 '60, '63, '88 - '90 295 212-27 '62-'66, '79-'80, '88-'92, '97-'02 8,752 213-10 '02 -'04, '08 1,807 223-28 '97 -'98 137 234-15 '95 -'99,'01 2,057 241-16 '04 -'07, '08-'14 3,112 242-16 '89 -'14 22,367 243-08 '62 -'65,89 -'92, '03 1,779 34-28 '04 -'05,'08 - '09 798 43-04 '62 -'64 802 4313-08 '04 -'05,'08 - '09, '11 -'14 943 42A-05 '04 -'05 2,340 43-28 (KGSF1) '98-'01 1,339 Total 55,332 Request Overview Hilcorp Alaska, LLC requests the AOGCC to amend conservation order 1236 to accomplish: • Formally define the Swanson River Field's gas pools (amendment of Rule 3) • To allow for unlimited gas well spacing within 1,500ft of the field's external boundary (amendment of Rule 5) Pool Definition Amendments (Rule 3) • The Sterling/Upper Beluga Gas Pool includes all intervals which correlate with the interval 389 feet TVD to 4,490 feet TVD in the SCU 41-4 well • The Beluga Gas Pool includes all intervals which correlate with the interval 4,490 feet TVD to 5,120 feet TVD in the SCU 41-4 well • The Tyonek Gas Pool includes all intervals which correlate with the 51120 interval TVD to 10,085 TVD in the SCU 41-4 well SCU-341-04 seo Swanson River Shallow Gas Producers SCU 41-04 Log Beluga - O _ OD Hemlock • The Sterling/Upper Beluga Gas Pool includes all intervals which correlate with the interval 389 feet TVD to 4,490 feet TVD in the SCU 41-4—well • The Beluga Gas Pool includes all intervals which correlate with the interval 4,490—feet TVD to 5,120—feet TVD in the SCU 41-4—well • The Tyonek Gas Pool includes all intervals which correlate with the 5,120 interval TVD to 101085 TVD in the SCU 41-4 well Well Spacing Amendments (Rule 5) Gas Wells. There shall be no restrictions to gas well spacing except that no wellbore may be open to test or regular production in a well within 1,500 feet of the external property line of the Affected Area described above where the owners and landowners are not the same on both sides of the line Stratigraphic Nature of Sterling 42-16 SRU 241-16 989 6/7/2004 850' (�o � y -o30 Roby, David S (DOA) From: David Duffy <dduffy@hilcorp.com> Sent: Monday, January 05, 2015 3:58 PM To: Roby, David S (DOA); Colombie, Jody J (DOA) Cc: Kevin Tabler; John Serbeck; Jason Ewing; Sharon L. Yarawsky (syarawsk@blm.gov); 'wsvejnoh@blm.gov'; Larry Greenstein Subject: RE: Hilcorp's application to amend CO 123B Dave, Hilcorp's materials for presentation at the hearing will not be marked confidential. If confidential information is required to address a specific question from the Commissioners, we'll request to address those issues separately. On your second point, Hilcorp agrees that the information presented to support the request for broad commingling was "light." As such, Hilcorp withdraws our request to broadly commingle gas production from any defined gas pool at Swanson River Field. Going forward — at least for the near-term, we'll address commingling issues on a well -specific basis. I hope that will streamline the issues or concerns held by AOGCC and/or BLM. Finally, we've offered a to host a technical meeting for BLM staff on Friday. With the elimination of the commingling component from our application, it may be this meeting is no longer necessary. Regardless, we'd welcome any additional technical questions you may have before the hearing. Regards, David Duffy, Landman Hilcorp Alaska, LLC Direct: 907-777-8414 Cell: 907-301-2629 dduffy@hilcorp.com This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. From: Roby, David S (DOA) [mai Ito: clave. roby@alaska.gov) Sent: Monday, January 05, 2015 11:56 AM To: David Duffy; Colombie, Jody J (DOA) Cc: Kevin Tabler; John Serbeck; Jason Ewing; Sharon L. Yarawsky (syarawsk@blm.gov); 'wsvejnoh@blm.gov'; Larry Greenstein Subject: RE: Hilcorp's application to amend CO 1238 David, A couple of notes prior to the hearing. First, the application contains a lot of information that is marked as confidential that don't appear to actually be entitled to confidentiality. For example, the entire geologic and engineering reports are marked as confidential when a lot or even most of the information in them would seem to not be entitled to confidentiality treatment. Please review the application to make sure you are only claiming confidentiality for stuff that you are entitled to ask to be held as confidential under the statutes and regulations and be prepared to submit a non -confidential version of the application. Second, you're asking for authorization to commingle production in the gas wells, but you did not provide proposed rule language for this. Also, in order to approve commingling our statutes require us to make a determination that waste will not occur and that volumes can be accurately allocated to the individual pools but the discussion on commingling in the engineering report is light on evidence showing waste won't occur and doesn't include a proposed allocation methodology. Please be prepared to provide a proposed allocation method and more evidence on how commingling will not lead to waste. Thanks, Dave Roby (907) 793-1232 CONFIDENTIAUTY 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 Dave Roby at (907)793-1232 or dave.robva'alaska.gov. From: David Duffy [mailto_dduffyRhilcorp.com) Sent: Monday, December 29, 2014 3:22 PM To: Roby, David S (DOA); Colombie, Jody 3 (DOA) Cc: Kevin Tabler; John Serbeck; Jason Ewing; Sharon L. Greenstein Subject: RE: Hilcorp's application to amend CO 123B Yarawsky (svarawsk@)blm.gov); 'wsvejnoh@bim.gov'; Larry Dave, thanks for the quick reply. A new conservation order to establish gas pool rules at Swanson works just fine. Doing so would eliminate any need for changes to CO 123 (Swanson's existing oil pool rules). We'd be glad to address this minor change in our expert testimony and materials. See you on the 1S1". Regards, David Duffy, Landman Hilcorp Alaska, LLC Direct: 907-777-8414 Cell: 907-301-2629 dduffv@hilcorp.com This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. From: Roby, David S (DOA) [mailto:dave.roby(a)alaska.gov] Sent: Monday, December 29, 2014 3:01 PM To: David Duffy; Colombie, Jody J (DOA) Cc: Kevin Tabler; John Serbeck; Jason Ewing; Sharon L. Yarawsky(syarawsk@blm.gov);'wsvejnoh@blm.gov'; Larry Greenstein Subject: RE: Hilcorp's application to amend CO 123B David, Because Hilcorp's application mainly requests the AOGCC to define and establish rules for three new gas pools, the AOGCC will treat the application as it would a new application for pool rules instead of an amendment to an existing order. Therefore, the hearing will be held as scheduled on January 15`h and Hilcorp should prepare as it normally would for a pool rules hearing. To the extent it may shape the evidence you intend to present in support of the application, you should be aware the AOGCC is strongly considering whether to create a new order, as opposed to amending C0123B. Regards, Dave Roby (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.robya'alaska.aov. From: David Duffy [mailto:dduffy(a)hilcorp.com] Sent: Tuesday, December 23, 2014 8:06 AM To: Roby, David S (DOA); Colombie, Jody J (DOA) Cc: Kevin Tabler; John Serbeck; Jason Ewing; Sharon L. Greenstein Subject: Hilcorp's application to amend CO 123B Yarawsky (syarawsk(a)blm.gov); 'wsvejnoh@blm.gov'; Larry AOGCC has tentatively scheduled a hearing for January 15, 2015 regarding Hilcorp's application to amend C0123B. The deadline for the public to file a written request to hold this hearing ended on December 8. If no such written requests were timely filed, Hilcorp requests the AOGCC vacate this hearing. However, if AOGCC staff (or BLM) has any questions, we would be pleased to provide a technical briefing on our application. Regards, David Duffy, Landman Hilcorp Alaska, LLC Direct: 907-777-8414 Cell: 907-301-2629 dduffv@hilcorp.com This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket # CO -14-030. The application of Hilcorp Alaska, LLC (Hilcorp) to Amend CO 123B Hilcorp, by letter received October 28, 2014, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an Order amending CO 12313, Swanson River Field to: To formally define three Swanson River Field gas pools; To allow for unrestricted gas well spacing provided the wells are at least 1500' from the field's external boundary; and To authorize commingling of gas production within the wellbore from any defined gas pool. The AOGCC has tentatively scheduled a public hearing on this application for January 15, 2015, at 9:00 a.m. at 333 W. 7`" Ave., 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 December 8, 2014. 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 793-1221 after December 21, 2014. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 W. 7"' Ave., Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on December 23, 2014, except that, if a hearing is held, comments must be received no later than the conclusion of the January 15, 2015 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at 793-1221, no later than December 28, 2014. Cathy P. oerster Chair, Commissioner STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBPIIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENT. ADVERTISING ORDFR NUMBFR AO-15-012 F R01I: AGENCY CONTACT: Jody Colombie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A.O. AGENCY PHONE: 333 West 7th Avenue 11/19/14 1(907) 793-1221 Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: Publish 11/21/14. FAX NUMBER: (907) 276-7542 TO PUBLISHER: Alaska Dispatch News SPECIAL INSTRUCTIONS: PO Box 149001 Anchorage, Alaska 99514 TYPE OF ADVERTISEMENT: F—' LEGAL DISPLAY r CLASSIFIED F OTHER (Specify below) DESCRIPTION PRICE CO-14-030 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 Pae 1 of I Total of All Pages $ - REF Type Number Amount Date Comments I PVN ADN84501 2 Ao AO-15-012 3 4 FIN AMOUNT SY CC 1'GN1 LGR ACCT 11"NDIS-1 LIQ 1 15 02140100 73451 15 2 3 4 5 Purchasing Authority Name: Title: Purchasing Authority's Signature Telephone Number hcq�tjiy t�}r i7ac 2. The state is register resale. ocuments relating to this purchase. r S code. Registration number 92-73-0006 K. Items are for the exclusive use of the state and not for 7er, DISTRIBUTION: Division Fiscal/Original A Copies: Publisher (faxed), Division Fiscal, Receiving Form: 02-901 Revised: 11/19/2014 270227 0001354103 $ 214.16 RECEIVED NOV 2 6 2014 AFFIDAVIT OF PUBLICATION AOGCC STATE OF ALASKA THIRD JUDICIAL DISTRICT Kayla Lavea 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 November 21, 2014 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed Subscribed and sworn to before me this 21 st day of November, 2014 Notary P lic in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket # CO -14-030. 'The application of Hilcorp Alaska, LLC (Hilcorp) to Amend CO 123B Hilcorp, by letter received October 28, 2014, requests the Alaska oil and Gas Conservation Commission (AOGCC) issue an Order amending CO 123B, Swanson River Field to: • To formally define three Swanson River Field gas pools; • To allow for unrestricted gas well spacing provided the wells are at least 1500' from the field's external boundary; and • To authorize commingling of gas production within the wellbore from any defined gas pool. The AOGCC has tentatively scheduled a public hearing on this application for January 15, 2015, at 9:00 a.m. at 333 W. 7th Ave., Anchoragge, 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 December 8, 2014. 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 793-1221 after December 21, 2014. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 W. 7th Ave., Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on December 23, 2014, except that, if a hearing is held, comments must be received no later than the conclusion of the January 15, 2015 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at 793-1221, no later than December 28, 2014. Cathy P. Foerster AO -15-012 Chair, Commissioner Published: November 21, 2014 �r Z Singh, Angela K (DOA) From: Colombie, Jody J (DOA) Sent: Thursday, November 20, 2014 1:35 PM To: Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Crisp, John H (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); Frystacky, Michal (DOA); Grimaldi, Louis R (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Hill, Johnnie W (DOA); Hunt, Jennifer L (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Konkler, Stacey L (DOA); Loepp, Victoria T (DOA); Mayberry, David J (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Skutca, Joseph E (DOA); Wallace, Chris D (DOA); AKDCWellIntegrityCoordinator, Alexander Bridge; Allen Huckabay; Andrew VanderJack; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Barron, William C (DNR); Bill Penrose; Bill Walker, Bob Shavelson; Brian Havelock, Burdick, John D (DNR); Carrie Wong; Cliff Posey, Colleen Miller; Corey Cruse; Crandall, Krissell; D Lawrence; Dave Harbour, David Boelens; David Duffy; David Goade; David House; David McCaleb; David Steingreaber; David Tetta; Davide Simeone; ddonkel@cfl.rr.com; Dean Gallegos; Delbridge, Rena E (LAA); Donna Ambruz; Ed Jones; Elowe, Kristin; Evans, John R (LDZX); Francis S. Sommer, Frank Molli; Gary Oskolkosf, George Pollock; ghammons; Gordon Pospisil; Greg Duggin; Gregg Nady; gspfoff, Jdarlington Qarlington@gmail.com); Jeanne McPherren; Williams, Jennifer L (LAW); Jerry Hodgden; Jerry McCutcheon; Solnick, Jessica D (LAW); Jim Watt; Jim White; Joe Lastufka; news@radiokenai.com; John Adams; Easton, John R (DNR); John Garing; Jon Goltz; Jones, Jeffrey L (GOV); Juanita Lovett; Judy Stanek; Houle, Julie (DNR); Julie Little; Kari Moriarty; Keith Wiles; Kelly Sperback; Klippmann; Gregersen, Laura S (DNR); Leslie Smith; Lisa Parker, Louisiana Cutler; Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Kremer, Marguerite C (DNR); Michael Moora; Mike Bill; mike@kbbi.org; Mikel Schultz; MJ Loveland; mjnelson; mkm7200; Morones, Mark P (DNR); knelson@petroleumnews.com; Nichole Saunders; Nick W. Glover, Nikki Martin; NSK Problem Well Supv; Oliver Sternicki; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; Randy Redmond; Renan Yanish; Robert Brelsford; Rose Jacki; Ryan Tunseth; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Slemons, Jonne D (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Sondra Stewman; Stephanie Klemmer; Steve Kiorpes; Moothart, Steve R (DNR); Suzanne Gibson; Sheffield@aoga.org; Tania Ramos; Ted Kramer, Davidson, Temple (DNR); Terence Dalton; Teresa Imm; Thor Cutler, Tim Mayers; Tina Grovier; Todd Durkee; Tony Hopfinger; trmjrl; Tyler Senden; Vicki Irwin; Vinnie Catalano; Walter Featherly; yjrosen@ak.net; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andrew Cater, Anne Hillman; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; David Lenig; Donna Vukich; Eric Lidji; Erik Opstad; Gary Orr, Smith, Graham O (PCO); Greg Mattson; Dickenson, Hak K (DNR); Hans Schlegel (hans.schlegel@ge.com); Heusser, Heather A (DNR); Holly Pearen; James Rodgers; Jason Bergerson; Jennifer Starck; jill.a.mcleod@conocophillips.com; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Kenneth Luckey; King, Kathleen 1 (DNR); Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Matt Gill; Franger, James M (DNR); Morgan, Kirk A (DNR); Pat Galvin; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pexton, Scott R (DNR); Peterson, Shaun (DNR); Pollard, Susan R (LAW); Talib Syed; Todd, Richard J To: (LAW); Tostevin, Breck C (LAW); Wayne Wooster, vAlliam Hutto; William Van Dyke Subject: Public Hearing Notices Attachments: Notice of Public Hearing, CO-14-031.pdf, Notice of Public Hearing, CO-14-030.pdf James Gibbs Jack Hakkila Bernie Karl Post Office Box 1597 Post Office Box 190083 K&K Recycling Inc. Soldotna, AK 99669 Anchorage, AK 99519 Post Office Box 58055 Fairbanks, AK 99711 Gordon Severson Penny Vadla George Vaught, Jr. 3201 Westmar Cir. 399 W. Riverview Ave. Post Office Box 13557 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Denver, CO 80201-3557 David W. Duffy Richard Wagner Darwin Waldsmith Landman Post Office Box 60868 Post Office Box 39309 Hilcorp Alaska, LLC Fairbanks, AK 99706 Ninilchik, AK 99639 Post Office Box 244027 Anchorage, AK 99524-4027 �Le � �oven►,�e� 20 t 2.m�� Angela K. Singh Hilcorp Alaska, LLC October 24, 2014 Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 7t' Avenue, Suite 100 Anchorage, Alaska 99501 RE: Proposed Amendment to Conservation Order No Dear Commissioner Foerster, RECEIVED OCT 2 8 2014 ADCC Post Office Box 244027 Anchorage, AK 99524- 27 3800 Centerpoint D ve Suite 100 Anchorage, A 9503 David W. ffy dduff �Ico .com Phone 07/777-8414 on River Field Hilcorp Alaska, LLC ("Hilcorp"), as Operator, res ully requests the Alaska Oil and Gas Conservation Commission ("AOGCC") t a end Conservation Order 123B to accomplish the following: • To formally define the Swanson Rive eld's gas pools; • To allow for unlimited gas well spa ng within 1500 feet of the field's external boundary; and • To authorize commingling of s production within the wellbore from any defined gas pool. Approval of the proposed ame9dments will result in increased operational and administrative efficiencies for H' corp, AOGCC and the Bureau of Land Management (BLM), and thereby promote ximum recovery of hydrocarbons from this legacy field. The proposed restated and 4fnended pool rules are as follows: Rule I. Previous O,fders Revoked. [No change CO 123A] Rule 2. Rules ea. [No change to CO 123B] Rule 3. Po Definition A. The Hemlock Oil Pool includes all intervals which correlate with the interval 10,085 feet TVD to 10,815 TVD feet in the Standard Oil Company of California, Soldotna Creek Unit 41-4 well. [No change from CO 123A, except clarification on unit of measurement.] B. The Sterling/Unper Beluiza Gas Pool includes all intervals which correlate with the interval 2, 140 feet TVD to 4,490 feet TVD in the SCU 41-4 well. [New this order] Proposed Amendment to 123B Hilcorp Alaska, LLC Page 2 of 25 C. The Beluga Gas Pool includes all intervals which correlate with the interval 4,490 feet TVD to 5,120 feet TVD in the SCU 41-4 well. [New this order] D. The Tyonek Gas Pool includes all intervals which correlate with the 5,120 interval TVD to 10,085 TVD in the SCU 41-4 well. [New this order] Rule 4. Pressure Maintenance Project. [No change to CO 123B] Rule 5. Well Spacing. A. Oil Wells. There shall be no restrictions to well spacing within the Hemlock Oil Pool except that no wellbore may be open to test or regular production in a well within 500 feet of the external property line of the Affected Area described above where the owners and landowners are not the same on both sides of the line. [No change to CO 123B] B. Gas Wells. There shall be no restrictions to gas well Macin except that no wellbore may be open to test or regular production in a well within 1,500 feet of the external property line of the Affected Area described above where the owners and landowners are not the same on both sides of the line. [New this order] Rule 6. Hemlock Oil Pool Reservoir Report. [no change to CO 123A] Rule 7. Administrative Approval. [No change to CO 123B1 BACKGROUND The Swanson River Field is located approximately 45 miles to southwest of Anchorage and 20 miles northeast of Kenai, Alaska on the Kenai Peninsula. The entire field is located with the Kenai National Wildlife Refuge. Following unit formation in 1956, initial exploration was focused on oil targets from the Hemlock formation. Discovery was made by the Richfield Oil Corporation with the completion of Swanson River Unit 34-10 in September 1957. Early production was limited due to transportation restrictions prior to the completion of the Swanson River Oil Pipeline in the early 1960s. Proposed Amendment to 123B Hilcorp Alaska, LLC Page 3 of 25 On July 1, 1963, the four working interest owners of the Swanson River Field (Union Oil Company of California, Standard Oil Company of California, Richfield Oil Corporation, and Marathon Oil Company) (collectively as "Participants") entered into a Unit Operating Agreement (aka "Working Interest Agreement") whereby the Swanson River Unit ("SRU") and the Soldotna Creek Unit ("SCU") were consolidated into a single operating area in order to affect pressure maintenance and increased recovery throughout the field. The 1963 Working Interest Agreement was facilitated by a cooperative agreement between the Participants to determine the respective working interests of the SRU (28.83%) and SCU (71.17%). This determination of equities was based on a 1963 technical report, approved by the U.S. Geological Survey (former unit manager and predecessor to the Bureau of Land Management), which calculated the volumes of oil and gas in each known productive zone. Thereafter, gas from the Sterling, Beluga and Tyonek formations was produced and injected into the Hemlock formation for pressure support. Since 1963, all oil and gas production has been allocated under a complex formula by which the federal unit manager, now BLM, reviews and approves volumetric -based Participating Areas ("PAs"). In addition to the Hemlock Oil PA, the BLM currently recognizes five (5) separate gas zones and 19 separate gas Participating Areas throughout the Swanson River Field. These various zones and PAs correlate stratigraphically into four major groups (referenced herein as "Super PAs"), including: Hemlock, Sterling - Upper Beluga, Beluga and Tyonek PAs. This complex system provides the basis for the equitable division, reporting and allocation of working and royalty interests throughout the Swanson River Field. Today, Hilcorp owns a 100% working interest ownership in the Swanson River Field. As a result, the complex formula utilized to equitably distribute production among former working interest owners is unnecessary. However, these long-established standards for both production and royalty accounting continue to protect the correlative rights of the federal government and Cook Inlet Region, Inc. ("CIRI"), who as landowners, jointly hold 100% royalty interest in the field. This same system also protects the overriding royalty interest holders of various federal leases which comprise the consolidated Swanson River and Soldotna Creek Units. The regulatory history of the Swanson River Field is similarly complex. Key milestones include the following: Proposed Amendment to 123B Hilcorp Alaska, LLC Page 4 of 25 On August 23, 1973, AOGCC issued Conservation Order No. 123, thereby establishing the first pool rules for the Swanson River Field, including the initial rules governing the field's gas and water injection pressure maintenance program. Thereafter, AOGCC issued numerous Administrative Actions under CO 123 to allow the drilling and completion of Hemlock producing wells and pressure maintenance wells requiring an exception to established pool rules. On March 16, 1987, AOGCC issued Area Injection Order No. 13A, amending the original order dated December 5, 1995, authorizing underground injection for the purpose of enhanced recovery and disposal of fluids in the Swanson River Field. On December 5, 1995, AOGCC issued Conservation Order No. 123A, amending Rule 3 (Pool Definition) of CO 123 (August 23, 1073) to redefine the Hemlock Oil Pool to include the Tyonek G zone. On this same date, AOGCC also issued Area Injection Order No. 13A (noting Hemlock Oil Pool includes Tyonek G zone). On May 12, 1997, AOGCC issued Conservation Order 394, approving a spacing exception pursuant to 20 AAC 25.055(a)(4) for the drilling and completion of SRU 223- 28 development gas well closer than 1500 feet of an interior field property line. On June 14, 1999, AOGCC issued Conservation Order No. 444, approving a spacing exception pursuant to 20 AAC 25.055(a)(4) for the drilling and completion of SRU 4313- 15 development gas well closer than 1500 feet to a section line within the interior boundary of the unit. June 14, 1999, AOGCC issued Conservation Order 445, approving a spacing exception pursuant to 20 AAC 25.055(a)(4) for the drilling and completion of SCU 24313-4 gas development well closer than 1500 feet to a section line within the interior boundary of the unit. On June 14, 1999, AOGCC issued Conservation Order 446, approving a spacing exception pursuant to 20 AAC 25.055(a)(4) for the drilling and completion of SCU 11-9 gas development well closer than 1500 feet to a section line within the interior boundary of the unit. On June 6, 2001, AOGCC issues Storage Injection Order 2, authorizing the underground storage of hydrocarbons by injection into the Tyonek reservoir in SRU 43-28 (aka KGSF# 1). Proposed Amendment to .23B Hilcorp Alaska, LLC Page 5 of 25 On July 17, 2002, AOGCC issued Conservation Orders 474 and 475, approving a spacing exception and allowing SRU 213-10 to be drilled and completed as a gas development well without tubing and a packer. On July 20, 2004, AOGCC issued Conservation Order 520, allowing KGSF No. 7 gas storage well to be drilled and completed within the Swanson River Unit boundary at a location within 1500 feet of an internal field property line. On July 20, 2004, AOGCC issued Conservation Order 522, allowing SRU 241-16 gas development well to be drilled and completed within the Swanson River Unit boundary at a location within 1500 feet of an internal field property line. On November 1, 2004, AOGCC issued Conservation Order 539, allowing KGSF No.7A, a gas storage well, to be drilled and completed within the Swanson River Unit boundary at a location within 1500 feet of a an internal field property line. On October 31, 2005, AOGCC issued Storage Injection Order No. 6, authorizing the underground storage of natural gas in the Tyonek 77-3 sands within the Swanson River Field. On August 1, 2007, AOGCC issued Conservation Order 585, allowing SRU 42-05Y, a gas development and storage well, to be drilled and completed within 1500 feet of a property line and within 3000 feet of a well capable of producing from the same pool within the Swanson River Field. On February 7, 2011, Federal oil and gas leases within the Swanson River Field were conformed to survey commissioned by the Bureau of Land Management. Per BLM's request, former unit operator, UNOCAL, submitted updated Swanson River Field Exhibits, including the Hemlock Oil Pool and each of the 19 gas pools. The net effect of the survey reflected a minor change (0.000377%) in the royalty allocation of Swanson River Field production. These exhibits remain unchanged to date and adequately reflect the current ownership position of all productive zones throughout the Swanson River Field (i.e., Hemlock, Sterling -Upper Beluga, Beluga, and Tyonek). On August 28, 2013, AOGCC issued Conservation Order 123B. This order amended Rule 5 to eliminate all well spacing restrictions within the Hemlock Oil Pool, except that no wellbore may be open to test or regular production within 500 feet of the unit boundary. Also, Rule 7 was revised to clarify AOGCC's administrative approval authority to waive or amend established pool rules. Proposed Amendment to .._ .2313 Hilcorp Alaska, LLC Page 6 of 25 DISCUSSION There are currently 67 wells in Swanson River field, 36 of which are producing. During the month of June 2014, these wells collectively produced 68,882 bbls of oil and 238,787 Mscf of gas. By comparison, Swanson River Hemlock Oil Pool monthly production peaked at 1,456,520 bbls in September 1968, whereas monthly gas production from the undefined Sterling, Tyonek and Beluga formations peaked at 706,304 Mscf in October 2004. Hilcorp purchased these legacy assets with the intent to maximize the recovery of remaining hydrocarbons. This requires implementation of a comprehensive capital workover program designed to: • repair broken wells • return shut in production wells to service • optimize existing well completions • pursue stimulation opportunities, and • identify, then execute new drilling projects During 2014, Hilcorp anticipates performing up to 15 workovers, 6 side tracks and 1 new drill well projects within Swanson River field, each targeting increased oil and gas production. Going forward, Hilcorp's recompletion, workover and drilling program will be similar in 2014 — 2016. Within the next few years, Hilcorp estimates that it will undertake up to 18 workovers and 8 new drill well / sidetrack projects. During this period, Hilcorp anticipates an increased emphasis on gas production. Hilcorp cannot efficiently produce remaining reserves under statewide gas well spacing rules and restrictions that prohibit commingling. While existing rules and procedures may have adequately protected correlative rights and prevented waste during the field's initial development, they are not applicable to today's challenge of enhanced hydrocarbon reserves at this legacy field. The purpose of formalizing gas pools for the Sterling/Upper Beluga, Beluga and Tyonek intervals is self-evident. The goal is simply to include all potentially gas -bearing sands required to extend this aging field's capacity to produce in a manner that is technically sounds, yet administratively efficient. Moreover, the vertical definition of each proposed gas pool is identical to long-established production and royalty accounting system currently administered by the BLM. In the absence of competing working interests, statewide gas spacing rules are unnecessary to prevent waste or protect correlative rights. Therefore, adjoining owners, Proposed Amendment to .._ 123B Hilcorp Alaska, LLC Page 7 of 25 operators and landowners will be adequately protected by the proposed 1,500' buffer from the current Affected Area of the Swanson River Field. Likewise, landownership is vertically integrated throughout each of the Swanson River Field's leases (i.e., ownership is consistent at all depths). As such, existing accounting and allocation methodologies will ensure that all down hole commingled gas will adequately protect both CIRI's and the federal government's royalty interests. Established unit and PA allocation methodologies will continue to protect overriding royalty interest owners. In addition to reducing administrative burdens (i.e., elimination of the existing adjudicative procedures for well -specific spacing exceptions and commingling authorizations), the proposed order is designed to prevent economic and physical waste and improve the ultimate recovery of remaining hydrocarbons. By eliminating gas spacing rules and including all gas -bearing sands into well-defined pools, Hilcorp will be able to target smaller, un -drained portions of isolated areas that cannot be reached by wells conforming to current spacing restrictions. The proposed rules are also designed to maximize recovery from bypassed pay while allowing for continued production from established development wells. SUMMARY Hilcorp's proposed rules are designed to prevent waste, protect correlative rights and improve ultimate recovery of remaining hydrocarbons throughout Swanson River field. They are also designed to reduce the administrative burdens on Hilcorp, AOGCC and BLM staff. Confidential Geologic and Engineering Reports have been prepared to support Hilcorp's application for the proposed Conservation Order. See attached Exhibits A and B. Hilcorp requests AOGCC these technical reports be held confidential pursuant to 20 AAC 25.536(b). Hilcorp would be pleased to schedule a technical meeting with AOGCC staff to provide additional information in support of this proposal. If acceptable to AOGCC, this discussion could be expanded to include participation from BLM and/or CIRI representatives. If you require any additional information regarding this request, please contact Mr. Jason Ewing, Reservoir Engineer, 777-8441, or the undersigned at 777-8414. Proposed Amendment to 23B Hilcorp Alaska, LLC Page 8 of 25 Sincerely, HILCORP ALASKA, LLC e✓ David W. Duffy, Landman Enclosure: Confidential Geologic & Engineering Reports (Exhibits A and B) Proposed Amendment to 123B Hilcorp Alaska, LLC Page 9 of 25 EXHIBIT A CONFIDENTIAL GEOLOGIC REPORT 20 AAC 25.536(b) Jason Ewing — Reservoir Engineer, Hilcorp Alaska LLC John Serbeck, Sr. Geologist, Hilcorp Alaska LLC 4ffKRt`__ W4q* k ✓e.ct- 1 61)� The Swanson River Field is located in the Kenai National Wildlife Refuge approximately 15 miles north of Sterling, Alaska. Swanson River Field is comprised of two consolidated units, the Soldotna Creek Unit and Swanson River Unit. Following unit formation in 1956, initial development was in the Hemlock reservoir focusing on oil targets. Multiple gas targets were identified and tested in the Sterling, Beluga and Tyonek formations during early development; however production from these intervals was not aggressively pursued until 1962 when the gas flood of the Hemlock reservoir was commenced. To date, Sterling, Beluga and Tyonek gas production throughout the Swanson River Field have been operated as undefined pools under statewide spacing and commingling rules. Proposal Summary Hilcorp proposes to establish defined gas production pools for the Sterling, Beluga and Tyonek intervals that are absent of spacing limitations within 1,500 feet of the Swanson River Field's external unit boundaries. The Sterling -Upper Beluga Gas Pool will be defined to match the current Top -Sterling —Upper Beluga Participating Area ("PA"). See Pool Definition Below. The Lower Beluga and Tyonek Pools will be defined to match their respective PAs, as defined below the Pool Definition. Pool Definition A. The Hemlock Oil Pool includes all intervals which correlate with the interval 10,085 feet TVD to 10,815 feet TVD in the Standard Oil Company of California, Soldotna Creek Unit 41-4 well. [No change from CO 123, except for unit of measurementA] B. The SterlinzlUpper Beluza Gas Pool includes all intervals which correlate with the interval 2. 140 feet TVD to 4,490 feet TVD in the SCU 41-4 well. [New this order] Proposed Amendment to 123B Hilcorp Alaska, LLC Page 10 of 25 C. The Lower Beluga Gas Pool includes all intervals which correlate with the interval 4490 feet TVD to 5,120 feet TVD in the SCU 41-4 well. [New this order] D. The Tvonek Gas Pool includes all intervals which correlate with the 5120 interval TVD to 10,085 TVD in the SCU 41-4 well. [New this order] Stratigraphic Summary by Formation Sterling Formation Gas The Miocene -Pliocene Sterling Formation is the shallowest of the three gas bearing formations in Swanson River Field occurring from near surface to 3,500 feet TVD. There is currently no AOGCC-defined pool for the Sterling formation. However, the current Sterling—Upper Beluga PA interval ranges from 2,870' TVD to 3,820' TVD. Hilcorp proposed to define a Sterling Gas Pool to match the PA. Historically, Sterling completions have been from a combination of isolated and commingled completions in the B0, B1, B2, B3, B4, B5 & B6 sands with additional untested potential in the Sterling A9 & A10 sands. Figure 3A is a type log (SRU 242- 16) of the Sterling Formation in the Swanson River Unit. The Sterling Formation sands were deposited by moderate to low energy meandering streams with associated overbank, channel splay, and abandoned channel -fill deposits. Coal and shale beds were deposited in areas outside of active channel processes. This pattern of deposition results in reservoir bodies of varying thickness and lateral extent. Reservoirs are quartz -rich, friable, fine to coarse grained, cross -bedded sandstones deposited in stacked sequences and interbedded with mud, coal, and silt sediments. Well logs often show sands with sharp basal contacts, fining upward into non -reservoir sediments. Individual sequences are 10 to 250 feet thick and slightly cemented with calcite, smectite and kaolinite. Reservoir porosity ranges from 20 — 35% and permeability from 10 — 1000 millidarcies or more. The B0, BI, B2, B3, B4 & B6 sands exhibit significant heterogeneity in reservoir quality and lateral extent while the B5 sand is an anomalously thick package of amalgamated channel sands lacking fine grained facies seen in shallower zones. Confidence in log correlation across the field in the Sterling Formation is high. Beluga Formation Gas The Miocene Beluga Formation lies directly beneath the Sterling Formation occurring in Swanson River Field at depths between 3,500 and 5,300 feet TVD. The Beluga PA Proposed Amendment to X2313 Hilcorp Alaska, LLC Page 11 of 25 a.N�WFf7 Ng �j I �/)� extends as deep as 6,160 feet TVD. Hilcorp proposed to define a Beluga Gas Pool to match the Beluga PA as specified above in the Pool Definition. Historically, Beluga completions have been from a combination of isolated and commingled zones in the 36-9, 37-9, 38-0, 38-4, 39-1, 50-6, 56-0, and 61-3 sands, however due to the highly stratigraphic nature of the Beluga, it is possible that future drill wells will produce from other Beluga intervals. The Beluga formation consist of about 25 separate reservoir sands of fluvial origin, 5 — 35 feet thick, consisting of interbedded sand, silt, shale and coal. Sands and coals tend to be thin and discontinuous and heterogeneous nature of individual Beluga reservoir sands makes well to well correlation difficult. Framework grains primarily consist of metamorphic rock fragments along with illite / smectite and calcite cements. Porosity ranges from 8 — 15% and permeability from .1 — 50 millidarcies. Figure 4A is a type log (SRU 32A-15) of the Beluga Formation in Swanson River field. Tyonek Formation Gas The Miocene Tyonek Formation lies directly beneath the Beluga Formation occurring at depths between 5,300 and 10,800 feet TVD. The Tyonek is the deepest gas producing formation in the field with —19 Bscf of gas recovered to date. Hilcorp is proposing to define a Tyonek Gas Pool to match the Tyonek PA as specified above in the Pool Definition. Tyonek Gas sands range in average thickness from 10 to 50 feet exhibiting similar depositional setting and continuity as seen in the Beluga Formation. The Upper Tyonek is a series of fluvial reservoirs primarily made up of quartz and volcanic rock fragments with porosity typically on par with that seen in the Beluga Formation. The exception to this is the several high permeability sands that were deposited in a more moderate energy environment that exhibit permeabilities in the 100 — 250 millidarcy range such as the 77- 3 and 64-5 sands which were later utilized for gas storage reservoirs. Porosity ranges from 8 — 20% and permeability from .1 — 250 millidarcies. Figure 5A is a type log (SRU 212-27). Tyonek G Zone / Hemlock Formation Oil The Oligocene Lower Tyonek and Hemlock Formation in the Swanson River Field occur at depths between 10,800 and 12,500. The primary focus at Swanson River Field for the past 55 years has been developing the Hemlock oil reservoir, which has produced over 225MMBO since initial development. Proposed Amendment to �, 123B Hilcorp Alaska, LLC Page 12 of 25 TO URMMr_ In 1995, AOGCC amended Conservation Order 123 to redefine the Hemlock Oil Pool to include the Tyonek G Zone. In 2013, AOGCC approved Hilcorp's request to further amend Conservation Order 123 to eliminate well spacing restrictions throughout the Hemlock Oil Pool. This regulatory relief spurred a significant capital influx from Hilcorp which drove up oil production from —450 BOPD to 2500 BOPD. Hilcorp's proposed Swanson River Field gas pool rules are designed to produce the same result. Productivity from the Tyonek G zone was established from several producers in the early 1960's however the focus of the Swanson River development through the mid-90s was in the Hemlock formation. It wasn't until 1995 when declining Hemlock production led to a surge in G Zone development. Approximately 2 MMBO of production has been allocated to the G Zone, most of which has been commingled with existing Hemlock production. The Oligocene Hemlock Formation consists of an average of 400 feet of interbedded fine- to coarse-grained sandstone, conglomerate, siltstone, and coal present across the entire field. Ten distinct sandstone/conglomerate intervals (HI -HIO) have been identified as productive intervals suitable for correlation ranging in depths between 10,000 feet and 11,500 feet. In general, the H1 through H5 sands are oil productive throughout the entire field and the H6 through HIO sands are oil productive only in the southern, SCU portion of the field. While Hemlock Formation deposition is widespread across the field, individual sand bodies are not uniform with sand bodies varying in thickness and presence throughout the field. The Hemlock Formation is interpreted as deep gravel -bed braided stream deposits. Thick, laterally continuous sandstone and conglomerate across the field make for an excellent correlations and high quality reservoirs. In the Swanson River Field Hemlock Formation, the bulk of core porosity values are grouped from 15-25% (average 21%) and most permeability values fall into the 10-1000 mD range (average 200 mD). Figure A6 is a type log from SCU 314-04. Exhibit A: CONFIDENTIAL FIGURES • Figure Al: Well log cross section between SRU 242-16 and 241-16 highlighting stratigraphic nature of Sterling • Figure A2: Structure contour map on the Sterling B3 Reservoir • Figure A3: SRU 242-16 Sterling Log 0 Figure A4: SRU 32A-15 Beluga Log Proposed Amendment to .23B Hilcorp Alaska, LLC Page 13 of 25 Wa��ed �li�lrti • Figure A5: SRU 212-27 Tyonek Log • Figure A6: SCU 314-4 Hemlock Log • Figure A7: Well log cross section between SRU 242-16 and 32A-15 highlighting stratigraphic nature of Beluga • Figure A8: SRU 12-15 Beluga Log w/ Beluga Perf Potential Proposed Amendment to 123B Hilcorp Alaska, LLC Page 14 of 25 nurinr Vill t �uvec-4 (/is) l5 CONFIDENTIAL Figure Al: Well log cross section between SRU 242-16 and 241- 16 highlighting stratigraphic nature of Sterling SRU 242-16 SRU 241-16 a/zs/isas smzoaa Proposed Amendment to .2313 n A Uri n rlr-,,.n 1 Hilcorp Alaska, LLC;� Page 15 of 25 V V P i Ve CONFIDENTIAL Figure A2: Structure contour map on the Sterling B3 Reservoir 0 'o 0 N W OQ �O x., 70 0 ,2 m _ `� o cNn o 0 #' M M O O m 0 I d M ° - m N —zm a. �w m Proposed Amendment to .2313 Hilcorp Alaska, LLC Page 16 of 25 CONFIDENTIAL Figure A3: SRU 242-16 Sterling Log SRU 242-16 8/29/1989 *Wffft'' woly Proposed Amendment to .2313 Hilcorp Alaska, LLC Page 17 of 25 CONFIDENTIAL Figure A4: SRU 32A-15 Beluga Log SRU 32A-15 10/20/1994 Proposed Amendment to -- .2313 Hilcorp Alaska, LLC Page 18 of 25 CONFIDENTIAL Figure A5: SRU 212-27 Tyonek Log SR TYO SC_T sR SR SR, SR_T5NpN SR 5 SR. SR. SR_! SR SR SR SR_N SR SR S R_TV SR SR U SR SR SR SR SR SR SR_n SRU 212-27 10/6/1961 _ PNEaIt ESD> 3 Fn IMMUMMMOM I M-0 F WAINAM� Billion Proposed Amendment to 23B Hilcorp Alaska, LLC Page 19 of 25 CONFIDENTIAL Figure A6: SCU 314-4 Hemlock Log scu 314-04 8/13/1960 WA iv2� �1i0h Proposed Amendment to -- .2313 Hilcorp Alaska, LLC Page 20 of 25 WMi�e-d 1N/6 CONFIDENTIAL Figure A7: Well log cross section between SRU 242-16 and 32A-15 highlighting stratigraphic nature of Beluga SRU 242-16 SRU 32A-15 8/29/1989 10/20/1994 Proposed Amendment to `- .2313 Hilcorp Alaska, LLC P-nurin Page 21 of 25 CONFIDENTIAL Figure A8: SRU 12-15 Beluga Log w/ Beluga Perf Potential SRU -12-15 10/5/1960 [end of report Proposed Amendment to 123B Hilcorp Alaska, LLC Page 22 of 25 Overview EXHIBIT B CONFIDENTIAL ENGINEERING REPORT 20 AAC 25.536(b) Jason Ewing — Reservoir Engineer, Hilcorp Alaska LLC John Serbeck, Sr. Geologist, Hilcorp Alaska LLC Development of Swanson River's gas resource is approaching an "end of life" phase with currently only two wells producing, the SRU 242-16 and SRU 241-16, making a combined —1.2 MMscf/d. This is 95% less than the peak rate of —22.8 MMscf/d achieved in Oct -2004 during the most recent ramp up in shallow gas production at Swanson River Field. Figure B 1 is a "Creaming Curve" that illustrates Cumulative Gas Production vs Well Count. It is apparent that the 6 successful producers drilled between 2002 and 2010 have significantly lower produced gas volumes than the first 7 wells that were drilled earlier in the field life (2004 drill wells experience rapid production run off). Over the past year several other key producers (SRU 12-15 & SRU 32A-15) have gone down due to major flow assurance issues that Hilcorp has been unable to remedy such as extremely high water rates combined with severe sand production. In order to re -capture the lost resources and to more effectively drain all shallow gas sands at SRF, we are requesting that a single gas pool be created at Swanson River field to capture resources from the Sterling, Beluga and Tyonek. By eliminating spacing requirements within the gas pool inside the boundaries of SRF, Hilcorp will be able to capture recently lost resources and potentially resources lost by previous operators. The addition of commingling the Sterling, Beluga & Tyonek formations within the proposed pool rules will allow economic production of multiple low value targets that were previously disregarded. Commingling these zones will enable Hilcorp to economically justify additional shallow gas drill wells in areas that previous operators have deemed fully developed. Proposed Amendment to 123B Hilcorp Alaska, LLC Page 23 of 25 60,000 v h 40,000 N 10 30,000 �+ m 20,000 E v N Swanson River Gas Wells Creaming Curve 0 2 4 6 8 10 12 14 16 Well Count CONFIDENTIAL Figure B 1 — Swanson River Gas Wells Creaming Curve Sterling Interval Development 18 The Sterling sands have accounted for —27 Bscf of the total shallow gas produced at Swanson River Field with 26 out of 27 Bscf of gas produced from four wells, the SRU 21-33, SRU 211-15, SRU 241-16 & SRU 242-16. Three of these wells, the SRU 21-33, SRU 211-15 and SRU 242-16 produced from commingled Sterling sands for part of or all of their productive lives. The Sterling sands in these wells were abandoned for two primary reasons: sand control and water production. Two of the sands in the Sterling zone, the B5 & B6, are known to have 20 — 30 feet of gas on top of a 50 — 150 foot thick water column and account for roughly 1/3`d of total Sterling Production. Of the 5 primary completions in the B5 & B6, the average gas production is only 1,578 MMscf per well per sand. Production from this thin gas column results in rapid breakthrough of water (i.e., "water coning"). Quickly after water reaches the wellbore, the formation sand near the wellbore begins to mobilize and creates significant operational issues. This sand production requires frequent cleanouts with coiled tubing / slick line or costly gravel packs that often makes further production uneconomic. The water production leads to liquid loading that eventually kills all open zones. The water and sand production issues have led previous operators to abandon all of the open zones shortly after water / sand production begins. Proposed Amendment to 123B Hilcorp Alaska, LLC Page 24 of 25 The only way to maximize the recovery from these bottom drive water drive sands is to increase the number of take points in the reservoirs. Elimination of spacing requirements will allow Hilcorp to produce the B5 & B6 sands solo while simultaneously producing other Sterling sands in offset wells that are within the current 3,000ft limitation thereby enabling us to maximize total production without the risk of watering out other zones. Stratigraphic complexity in the Sterling Sands is not as severe as the deeper Belgua and Tyonek intervals. However, there can still be significant heterogeneity between wells that are relatively close together. The B4 sand in the SRU 242-16 is only 1,500 feet away from the B4 sand in SRU 241- 16 and it is clear from a basic cross section (see Figure Al) that the 30 foot thick high quality B4 sand in the 242-16 splits into two distinct lobes in the 241-16, highlighting an overbank scenario where two channels intersect. The permeability barriers that are formed by these overbanks prevent drainage of offsetting channels requiring tighter well spacing to maximize drainage from these reservoirs. To increase ultimate recovery, unlimited well spacing is required within the proposed Gas Pool. Beluga Interval Development The Beluga interval accounts for approximately 9 Bscf of the total shallow gas production at Swanson River field. The Beluga gas was produced from 8 different sand packages in 4 wells, the SRU 12-15, SRU 32A-15, SRU 213-10 & SRU 242-16. The SRU 242-16 and SRU 32A-15 wells are 2,200 feet apart at the Beluga interval. The cross section (see Figure_ A7) between these two wells highlights a combination of both laterally extensive and stratigraphically isolated sands. Although not as prolific as the Sterling and Tyonek sands, recent field studies have identified multiple small targets to go after that will further maximize EUR out of the Beluga interval such as in the SRU 212-15 (see Figure A9). Increased well density / tighter spacing would ensure that the Beluga interval reaches maximum potential recovery. To increase ultimate recovery, unlimited well spacing is required within the proposed Gas Pool. Proposed Amendment to 123B Hilcorp Alaska, LLC Page 25 of 25 Tyonek Interval Development U"M[ rLL Wkl red��sl �Jti The Tyonek interval accounts for approximately 19 Bscf of the total shallow gas production at Swanson River field. The Tyonek gas was produced from 11 different sand packages in 8 different wells. The most prolific of these intervals being the Tyonek 77-3 sand which produced —9 Bscf from two completions in isolated tanks (SRU 212-27 and SCU 42A-05). The 77-3 tank at the 42A-05 well was later turned into a gas storage zone to address short term peak gas demands. Hilcorp's aggressive Hemlock development from 2012 — 2014 has not only increased oil production by roughly five fold, but has also enabled us to attain new modern logs through the shallow gas intervals previously thought to have been mostly developed. The SRU 13-27 and SRU 1413-27 wells both encountered two un -drained Tyonek Gas Sands, the 54-5 and 65-9 sands, which represent 6 — 14 Bscf of gas in place. Hilcorp is currently in the process of permitting a gas roots drill well, the SRU 24113-33, to accelerate the recovery of these resources. If we find volumes consistent with our high side estimation, it is likely that one or two more additional infill wells will be needed to maximize recovery out these sands. These sands are likely to be downdip water drive which requires high gas withdraw rates to "out run" the aquifer. Depending on the quality of the rock, it is likely that the 241B-33 will be subject to sand control issues that are frequently experienced with other Tyonek completions. The best preventative measure for sand control is to limit the well drawdown which negatively impacts total EUR by allowing the aquifer to trap high pressure gas as it encroaches. Current statewide gas rules would not allow for additional wells within 3,000' of the 24113-33 and thereby reduce the total recoverable gas in these targets. To increase ultimate recovery, unlimited well spacing is required within the proposed Gas Pool. Exhibit B Figures (Enclosed) CONFIDENTIAL Figure B 1: Swanson River Gas Well Creaming Curve [end of report]