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Home My WebLink AboutCO 725 ACONSERVATION ORDER 725A 1. July 24, 2020 ConocoPhillips Alaska Application amend Conservation Order No. 725 to expand the areal extent of the Kuparuk River -Torok Oil Pool within the Kuparuk River Field, Kuparuk River Unit Pages 10-13 Held Confidential 2. August 4, 2020 Notice of hearing, affidavit of publication, email distribution, mailings ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF ConocoPhillips ) Docket Number: CO -20-013 Alaska, Inc. to amend Conservation Order No. 725 ) Conservation Order No. 725A to expand the areal extent of the Kuparuk River- ) Kuparuk River Unit Torok Oil Pool within the Kuparuk River Field, ) Kuparuk River Field Kuparuk River Unit ) Kuparuk River -Torok Oil Pool North Slope Borough, Alaska January 21, 2021 IT APPEARING THAT: 1. By application Dated July 24, 2020, ConocoPhillips Alaska, Inc. (CPAI), as operator of the Kuparuk River Unit (KRU) and on behalf of the Working Interest Owners (WIOs), requested Conservation Order No. 725 (CO 725) be amended to expand the areal extent of the Kuparuk River - Torok Oil Pool (KR -TOP). 2. Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) tentatively scheduled a public hearing for September 15, 2020. On August 4, 2020, the AOGCC published notice of 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, mailed printed copies of the notice to all persons on the AOGCC's mailing distribution list, and published the notice in the Anchorage Daily News. 3. No comments on the application were received. 4. CPAI's application contained sufficient information to make a decision without the need to hold the hearing, so the hearing was cancelled on September 1, 2020. FINDINGS: Order History: CO 725, which established the KR -TOP and pool rules for its development, was issued on July 22, 2016. Conservation Order No. 645, which established the Oooguruk-Torok Oil Pool (O -TOP) operated by Pioneer Natural Resources Alaska, Inc. (Pioneer) and pool rules for its development, was issued May 26, 2011. Relationship of KR -TOP to O -TOP: KR -TOP and O -TOP lie adjacent to one another and encompass the same strata on both sides of the boundary line separating them. Operatorship History of O -TOP: The O -TOP was initially established by Pioneer, operator for the Oooguruk Unit (OU) and additional acreage within the O -TOP that lies outside of the OU. Subsequently, Caelus Energy, LLC (Caelus) acquired Pioneer's assets on the North Slope and became operator of the OU and the O -TOP. In 2019, Caelus sold its interests in the OU and O -TOP to CPAI and Eni US Operating Company Inc. (Eni). CPAI, operator of the KRU, purchased the portions of Caelus' Oooguruk holdings to the south, and Eni purchased the northern portions. Expansion of the KRU: On August 14, 2019, the Department of Natural resources approved CPAI 's request to expand the KRU to include the acreage it acquired from Caelus. 5. Need for Expansion of the KR -TOP: Consistent rules are necessary to properly develop existing KR -TOP acreage and the portion of the O -TOP acreage that CPAI acquired from Caelus. CO 725A January 21, 2021 Page 2 of 5 Rule 11 Well Work Operations: Rule 11 of CO 725 adopted the sundry work rules of CO 261A that specified the type of application and/or reporting necessary for certain well work in the KRU. On June 7, 2018, the AOGCC issued CO 261B, which revised these rules but inadvertently left the KR -TOP off the list of the pools that the new rules applied to. The rules in CO 261B should also apply to the KR -TOP so that the rules are consistent throughout the unit. Rule 13 Expiration Date: CO 725.001 amends CO 725 and adds, in part, a sunset clause that triggers review and possible revision of that order on a regular basis or upon change of operator. During the AOGCC's monthly public meeting held on May 2, 2018, it was decided that such sunset clauses were not necessary since the AOGCC has the regulatory authority to revisit any order at any time. By unanimous vote the AOGCC's commissioners eliminated the automatic expiration rule in CO 725.001 and in several other orders. CONCLUSIONS: Expanding the KR -TOP to encompass CPAI's recently acquired Torok acreage is necessary to ensure consistent development rules. Rules 11 and 13 must be revised to bring them up to date with subsequent changes. NOW THEREFORE IT IS ORDERED: This order supersedes CO 725 and all associated administrative approvals. The record, findings, and conclusions of CO 725 are incorporated by reference into the record for this order. Development and operation of the KR -TOP is subject to the following rules and the statewide requirements under 20 AAC 25 to the extent not superseded by these rules: Affected Area: Umiat Meridian (Revised This Order) Township 11 North, Range 8 East Sections 1-4, 9-12: All Township 12 North, Range 7 East Sections 1-26, 35-36: All Township 12 North, Range 8 East Sections 2-11, 13-36: All Township 13 North, Range 7 East Sections 19-36: All Township13 North, Ran e 8 East ____tSectionsl9-21, 28-34: All Rule 1 Field and Pool Name (Source: CO 725) The field is the Kuparuk River Field. Hydrocarbons underlying the Affected Area and within the interval identified in Rule 2, below, constitute the Kuparuk River -Torok Oil Pool. Rule 2 Pool Definition (Source: CO 725) The Kuparuk River -Torok Oil Pool is defined as the accumulation of oil and gas common to and correlating with the interval within the Kalubik No. 1 well between the measured depths of 4,991 and 5,272 feet on the resistivity log recorded in exploratory well Kalubik No. 1. (See Figure 4, below.) Rule 3 Well Spacing (Source: CO 725) There shall be no restrictions as to well spacing except that no pay shall be opened to a well within 500 feet of an external property line where the owners and landowners are not the same on both sides of the line. CO 725A January 21, 2021 Page 3 of 5 Rule 4 Drilling Waivers (Source: CO 725) All permit to drill applications for deviated wells within the Kuparuk River -Torok Oil Pool shall include a plat with a plan view, vertical section, close approach data and a directional program description in lieu of the requirements of 20 AAC 25.050(b). Rule 5 Well Logging and Sampling Requirements (Source: CO 725) a. A suite of petrophysical well logs including, at a minimum, gamma ray, resistivity, neutron porosity, and density porosity logs shall be acquired across the Kuparuk River -Torok Oil Pool in one well from each drill site. A gamma ray curve shall be recorded from base of conductor to total depth in each well. The AOGCC may require additional wells to be logged using one or more petrophysical logging tools. b. A mud log and cutting samples shall be obtained from the base of the conductor through the Kuparuk River -Torok Oil Pool in at least one well drilled from each drill site. Rule 6 Reservoir Pressure Monitoring (Source: CO 725) a. A bottom -hole pressure survey shall be taken on each well prior to initial production or injection. b. The operator shall obtain the pressure surveys needed to manage properly the hydrocarbon recovery processes subject to the annual plan outlined in Rule 9, below. At a minimum a pressure survey shall be acquired from at least one well on each drill site each year. c. The reservoir pressure datum will be -5,000' TVDss. d. Pressure surveys may consist of stabilized static pressure measurements at bottom -hole or be extrapolated from surface measurements (single phase fluid conditions), pressure fall-off measurements, pressure buildup measurements, multi -rate test results, drill stem test results, and open -hole formation tests or other methods approved by the AOGCC. e. A Reservoir Pressure Report, Form 10-412, shall be utilized for all surveys; all relevant data shall be attached to the report. The data submitted shall include, at a minimum, rate, pressure, depth, fluid gradient, temperature, and all other well conditions necessary for a complete analysis of each survey being conducted. f. The results and data from any special reservoir pressure monitoring tests or surveys shall also be submitted in accordance with paragraph (e) of this rule. Rule 7 Gas -Oil Ratio Exemption (Source.• CO 725) Wells producing from the Kuparuk River -Torok Oil Pool are exempt from the Gas -Oil Ratio limits of 20 AAC 25.240(a) as long as CPAI is engaged in enhanced recovery operations. An enhanced recovery operation must be initiated within 12 months of the issuance of this order. Rule 8 Annual Reservoir Review (Source: CO 725) a. An annual reservoir surveillance report must be filed by April 1St of each year and include future development plans, reservoir depletion plans, and surveillance information for the prior calendar year, including: i. The voidage balance, by month, of produced fluids and injected fluids and the cumulative status for each producing interval; ii. A reservoir pressure map at datum, and a summary and analysis of the reservoir pressure surveys within the pool; iii. The results and, where appropriate, an analysis of production and injection log surveys, tracer surveys, observation well surveys, and any other special monitoring; iv. A review of pool production allocation factors and issues over the prior year; CO 725A January 21, 2021 Page 4 of 5 V. A review of the progress of the enhanced recovery project; and vi. A reservoir management summary, including results of any reservoir simulation studies. b. By June I" of each year, the operator shall schedule and conduct a technical review meeting with the AOGCC to discuss the annual reservoir surveillance report and items that may require action within the coming year. Rule 9 Annular Pressures (Source: CO 725) a. At the time of installation or replacement, the operator shall conduct and document a pressure test of tubulars and completion equipment in each development well that is sufficient to demonstrate that planned well operations will not result in failure of well integrity, uncontrolled release of fluid or pressure, or threat to human safety. b. The operator shall monitor each development well daily to check for sustained pressure, except if prevented by extreme weather conditions, emergency situations, or unavoidable circumstances. Monitoring results shall be kept available for AOGCC inspections. c. The operator shall notify the AOGCC within three working days after the operator identifies a well as having (i) sustained inner annulus pressure that exceeds 2,000 psig for any development well, or (ii) sustained outer annulus pressure that exceeds 1,000 psig. d. The operator shall submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action or increased surveillance for any development well having sustained pressure that exceeds a limit set out in paragraph (c) of this rule. The AOGCC may approve the operator's proposal or require other actions or surveillance, including a mechanical integrity test or other approved diagnostic tests. The operator shall give sufficient notice of the testing schedule to allow the AOGCC to witness the test. e. If the operator identifies sustained pressure in the inner annulus of a development well that exceeds 45 percent of the burst pressure rating of the well's production casing for inner annulus pressure, or sustained pressure in the outer annulus that exceeds 45 percent of the burst pressure rating of the well's surface casing for outer annulus pressure, the operator shall notify the AOGCC within three working days and take corrective action. Unless well conditions require the operator to take emergency corrective action before AOGCC approval can be obtained, the operator shall submit in an Application for Sundry Approvals (Form 10-403) a proposal for corrective action. The AOGCC may approve the operator's proposal or require other corrective action, including a mechanical integrity test or other diagnostic tests. The operator shall give the AOGCC sufficient notice of the testing schedule to allow the AOGCC to witness the tests. f Except as otherwise approved by the Commission under (d) or (e) of this rule, before a shut-in well is placed in service, any annulus pressure must be relieved to a sufficient degree (1) that the inner annulus pressure at operating temperature will be below 2,000 prig, and (2) that the outer annulus pressure at operating temperature will be below 1,000 psig. A well subject to (c) but not (e) of this rule may reach an annulus pressure at operating temperature that is described in the operator's notification to the AOGCC under (c) of this rule, unless the AOGCC prescribes a different limit. g. For purposes of this rule, i. "inner annulus" means the space in a well between tubing and production casing; ii. "outer annulus" means the space in a well between production casing and surface casing; and iii. "sustained pressure" means pressure that (A) is measurable at the casing head of an annulus, (B) is not caused solely by temperature fluctuations, and (C) has not been applied intentionally. CO 725A January 21, 2021 Page 5 of 5 Rule 10 Production Surface Commingling Measurement and Allocation (Source: CO 725) a. Production from Kuparuk River—Torok Oil Pool may be commingled on the surface with production from the other pools within the KRU as well as with production from the Oooguruk Unit. b. Wells must be tested at least monthly until such time that the operator can demonstrate to the AOGCC's satisfaction that less frequent well testing will provide for equally accurate production allocation. c. A minimum of 12 months of production and well testing must occur from a given well before the operator can seek reduction of testing frequency for that well. Rule 11 Well Work Operations (Revised This Order) The provisions of Conservation Order 261 B, as amended, apply to the Kuparuk River -Torok Oil Pool. Rule 12 Administrative Action (Source: CO 725) Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the Commission my 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 geoscience principles, and will not result in an increased risk of fluid movement into freshwater aquifers. Rule 13 Expiration Date (Rescinded at May 2 2018 Public Meeting) DONE at Anchorage, Alaska and dated January 21, 2021. Jeremy Digitally signed by Jeremy M. Price M. Price Date: 2021.0120 13:21:48 -09'00' Jeremy M. Price Commissioner, Chair Digitally signed by Daniel I Daniel T. Searnount, Jr. S - 't' Date: 2021.01,20 11:30,39 -09'00' Daniel T. Seamount, Jr. Commissioner AND APPEAL Jessie L. Digitally signed by Jessie L. Chmielowski Chmielowski Date: 2021.01.20 11:46:09 -09'00' Jessie L. Chmielowski Commissioner 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. Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 INDEXES STATE OF ALASKA ADVERTISING ADVERTISING ORDER NUMBER NOTICE TO PUBLISHER SUBV UICE OADVERTISINGO., NCERTIFIED AFFIDAT OF PUBLICATION WITH TTACHEDOPYO D<ERTISMENT. A.O-08-21-004 FROM: AGENCY CONTACT: Alaska Oil and Gas Conservation Jody Colombie/Samantha Carlisle Commission 333 West 7th Avenue DATE OF A.O. AGENCY PHONE: Anchorage, Alaska 99501 8/3/2020 (907) 279-1433 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907)276-7542 TO PUBLISHER: SPECIAL INSTRUCTIONS: Anchors e Daily News, LLC PO Box 140147 Anchors e, Alaska 99514-0174 TYPE OF ADVERTISEMENT: TV— LEGAL DISPLAY I CLASSIFIED OTHER (Specify below) DESCRIPTION PRICE Initials of who prepared AO: SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFEDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENT TO: SY 21 Act. AOGCC 333 West 7th Avenue lchorage, Alaska 995 Date Alaska Non -Taxable 92-600185 of "" "' ` I Purchasing Authority's Signature I Telephone Number #and receiVlrilg agency name must appear on all invoices and documents relating to this purchase. state is registered for tax free transactions under Chapter 32, IRS code. Registration number 92-73-0006 K. Items are for the exclusive use of the state and not for Fiscal/Original AO Copies: Publisher (faxed), Division Fiscal, Receiving Form: 02-901 Revised: 8/3/2020 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -20-013 And AIO-20-016 Kuparuk River Unit, Kuparuk River -Torok Oil Pool Oooguruk Unit, Oooguruk-Torok Oil Pool The application of ConocoPhillips Alaska, Inc. (CPAI) for amendments to Conservation Order (CO) No. 725 and Area Injection Order (AIO) No. 39 to expand the areal extent of the Kuparuk River Unit (KRU), Kuparuk River -Torok Oil Pool (KRTOP). On its own initiative the Alaska Oil and Gas Conservation Commission (AOGCC) is proposing to contract the affected areas of CO No. 645 and AIO No. 37 for Eni US Operating Company, Inc.'s (Eni) Oooguruk Unit( OU), Oooguruk-Torok Oil Pool (OTOP). CPAI, by letter dated July 24, 2020, requests the AOGCC amend CO No. 725 and AIO No. 39 to expand the affected area of the KRTOP to include acreage that is currently part of the OTOP but the acreage is now leased by CPAI. On its own motion the AOGCC is proposing to amend CO No. 645 and AIO No. 37 to contract the affected area of the OTOP to remove acreage that is currently defined as part of the OTOP but for which Eni does not hold the leases for. The AOGCC has tentatively scheduled a public hearing on this application for September 15, 2020, at 10:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on August 21, 2020. If a request for a hearing is not timely filed, the AOGCC may consider the issuance of an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after August 24, 2020. If a hearing is requested, the COVID-19 virus may necessitate that the hearing be held telephonically. Those desiring to participate or be present at the hearing should check with AOGCC the day before the hearing to ascertain if the hearing will be telephonic. If the hearing is telephonic, on the day of the hearing, those desiring to be present or participate should call 1-800- 315-6338 and, when instructed to do so, enter the code 14331 followed by the # sign. Because the hearing will start at 10:00 a.m., the phone lines will be available starting at 9:45 a.m. Depending on call volume, those calling in may need to make repeated attempts before getting through. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on September 7, 2020, except that, if a hearing is held, comments must be received no later than the conclusion of the September 15, 2020 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than September 10, 2020. Jeremy M. Pn Jeremy M. Price Chair, Commissioner Order Number: W0017173 Order Status: Se.I Azed Classification: t egais& Pou!ic'voiir es Package: Lega!s ADN Fina', Cost: 323.72 Referral Code: AO -08-21-004 Payment Type: User ID: %'UO3.0085 ST OF AK DNP; OiLA.ND GAS 55OW 7THAVE STE 1100 ANCFJORAGE. AK 99501 907-269-6805 le€alads'@adn com ST OF AK/DN IFUOII AND GAS ACCOUNT INFORMATION TRANSACTION REPORT Date 's:U1 Ph; Mon. Au€ 3.2020 Amoumtu 32372 SCHEDULE FOR AD NUMBER W00272730 Tue AO .4.2023 AnchoraW Daik, Nevus. Legal - Notice of Public Nearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number. CO -20-013 And AIO-201016 Kuparuk River Unit, Kuparuk River -Tarok oil Pool OOOgurUk Unit, OOO9Un)k-TOrok Oil Pool The application of COnocoPhdilips Alaska, Inc. (CPAP for amendments to conservation Order (CO) N0. 725 and Area Injection Order WO) NO. 39 t0 expand the areal extent of the KUparUk River Unit (KRU), KUparuk River -Torok Oil Pool (KRTOP). On its Own Initiative the Alaska Oil and GBS Conservation Commission (AOGCC) IS prOpOSIrg t0 Contract the affected areas Of CO N0.645 and AID No. 37 for Ertel US Operating Company, Int.'s (Eni) Oooguruk Unit(OU, OOOguruk-TorOk Oil Pool (OTOP). CPA[, by letter dated )UP/ 24, 2020, requests the AOGCC amend CO N0.725 aril AIO NO. 39 to expand the affected area Of the KRTOP t0 Include acreage that is currently pan of the OToP but the acreage is now leased by CPAt. On Its own motion the AOGCC is proposing t0 amend CO N0. 645 and Alo NO. 37 t0 contract the affected area of the OTOP to remove acreage that is currently defined as part of the OTOP but for which Fnl does not hold the leases for. The AOGCC has tentatively Scheduled a public hearing on this application for September 15, 2020, at 10.00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. TO request that the tentatively scheduled hearlbe WE, a written request must be filed with the AOGCC no later an 4:30 P.M. On August 21, 2020, If a request for a hearing Is not limey filed, the AOGCC ma( Consider the Issuance Of an Order without a hearing. TO learn if the AOGCC will hold the hearing, Call (907) 793.1221 after August 24, 2020. If a hearing IS requested, the COVID-19 Virus nay necessitate that the hearing be held telephonicaly. Those desiring to participate Or be present at the hearing should check with AOGCC the day before the hearing to ascertain If the hearing will be telephonic. if the hearing Is telephonic, on the day of the hearing, those desiring to be present Or participate should Call 1.800-315.6338 and, when hWUC1ed t0 CIO SO, enter the Code 14331 followed by the b sign. Because the hears g will Sian at 10:00 a.m., the phone lines will be available starting at 9:45 a.m. Depending On Call vOWme, those calling In may need to make repeated attempts before getting through. In addition, written comments regarding this application may be Submitted t0 the AOGCC, at 333 west 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 P.M. On September 7, 2020, except that, If a hearing is held, comments mum be received no later than the conclusion of the September 15, 2020 hearing if, because of a dlsabilhy, special accommodations may be needed to comment or attend the hearcontact the AOGCC's Special ASSI9tant, )OdY COIOmble, at (907)93-1221, no alter than September 10, 2020. Jeremy M. Price Chair, Commissioner PUbIWled: August 4. 2020 Bernie Karl Recycling Inc. Gordon Severson Richard Wagner K&K P.O. Box 3201 Westmar Cir. P.O. Box 60868 Fairbanks, AK 99711 Anchorage, AK 99508-4336 Fairbanks, AK 99706 George Vaught, Jr. Darwin Waldsmith P.O. Box 13557 P.O. Box 39309 Denver, CO 80201-3557 Ninilchik, AK 99639 Carlotta Chernoff Manager GKA Development ConocoPhillips Alaska ATO -602 700 G Street Anchorage, AK 99501 Phone 907-263-4692 July 24, 2020 Jeremy Price Chair, Alaska Oil and Gas Conservation Commission 333 W. 7th Ave #100 Anchorage, Alaska, 99501-3539 RE: Application for Area Injection Order, and Pool Rules expansion Kuparuk River -Torok Oil Pool, North Slope, AK Dear Commissioner Price, ConocoPhillips Alaska, Inc. as operator of the Kuparuk River Unit, and on behalf of the working interest owners, requests that the Alaska Oil and Gas Conservation Commission approve administrative amendments to Conservation Order 725 and Area Injection Order 39 to allow for the expansion of the Kuparuk River - Torok Oil Pool and area injection order to include lands acquired and recently incorporated into the Kuparuk River Unit. Please find a digital copy of the application attached to this e-mail. Please contact Patrick Perfetta (907-263-4531) if you have questions or require additional information. Regards, Carlotta Chernoff 1 CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page I 1 Alaska(71i Tias, APPLICATION FOR EXPANSION OF THE July 24, 2020 Outline I. Introduction 2. Kuparuk River -Torok Oil Pool History 3. Proposed Kuparuk River -Torok Oil Pool Expansion 4. Torok Development 5. Development Drilling Plans 6. Proposed Amendments to the Kuparuk River -Torok Conservation, and Area Injection Orders 7. No Underground Sources of Drinking Water List of Figures I. Location Map 2. Torok Oil Pool Type Log 3. Chemistry of Sampled/Produced Water, 3S area 4. Confidential: Torok Oil Pool, Gross Interval Isochore 5. Confidential: Torok Oil Pool, Top Depth Structure 6. Confidential: Well Log Cross -Section A -A' 7. Confidential: Seismic Cross -Section B -B' Confidential materials are submitted In Appendix 1. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 12 1. INTRODUCTION Document Scope This application is submitted for approval by the Alaska Oil and Gas Conservation Commission ("Commission") to expand the Kuparuk River -Torok Oil Pool (KRTOP) under Conservation Order (CO) 725, and Area Injection Order (A10) 39. The proposed expansion area includes all lands acquired by ConocoPhillips Alaska, Inc. (CPAI) from Caelus Natural Resources Alaska, LLC (Caelus) in 2019. These lands were subsequently included in the 12th expansion of the Kuparuk River Unit (KRU), as it pertains to the Torok (Figure 1). This expansion would make the western, northern, and southern boundaries of the KRTOP equivalent to the current KRU boundary in the expansion area, to allow for development of the Torok over this area. 2. KUPARUK RIVER-TOROK OIL POOL HISTORY Original KRTOP CO 725 & AIO 39 CO 725, issued in July 2016, includes the accumulation of hydrocarbons common to and correlating with the interval between the measured depths of 4,991 and 5,272 feet in the Kalubik No. 1 well (Figures 1 & 2). This accumulation stratigraphically defines the Kuparuk River -Torok Oil Pool. AIO 39 authorizing injection of fluids for enhanced oil recovery from the KRTOP was also issued in July 2016. CO 725.001 In September 2016, the Commission modified the original order in the following ways: Finding 10: Removal of the term "Regular production", due to the potential tax implications of this language. ® Conclusion 12: Removal of language related to pre -production from injectors. ® Expiration clause replaced by Rule 13 related to expiration date. CO 725.002 In May 2017, the Commission modified the original order to administratively remove the requirement for an annual reservoir review meeting for KRTOP. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 13 3. PROPOSED KUPARUK RIVER-TOROK OIL POOL EXPANSION Requested Scope CPAI requests the Commission to amend CO 725 and AIO 39 to expand the Kuparuk River -Torok Oil Pool to include lands acquired by CPAI from Caelus in 2019. These lands were included in the 12" expansion of the KRU, as it pertains to the Torok, approved in August 2019 by the Alaska Department of Natural Resources (Figure 1., and Table 1.). These lands previously belonged to the Oooguruk Unit (OU) and were voluntarily contracted by Caelus. As these lands once belonged to the OU, the Oooguruk-Torok Oil Pool (OTOP) covers a portion of these lands. The OTOP will need to be contracted in order to accommodate the expansion of the Kuparuk River -Torok Oil Pool. This will allow KRU owners the ability to develop and implement enhanced oil recovery operations on these lands. Development plans are summarized in Section 4. 4. TOROK DEVELOPMENT Development Plans The expansion of the KRTOP will extend the existing pool to include the area currently covered by the OTOP. In addition, it is requested that the expansion include all acreage included in the 12th expansion of the KRU, as it pertains to the Torok reservoir. This would make the western, northern, and southern boundaries of the Kuparuk River -Torok Oil Pool consistent with the current unit boundary in the expansion area, as the Torok exists over an area larger than that covered by the existing OTOP on the lands under consideration. The expansion will allow for development of the Torok from KRU 3S pad, and the newly named KRU 3T pad (previously known as Nuna pad). The KRU owners began testing the Torok with a recompletion of the 3S-19 well in 2013. Since that time four horizontal wells (2 producers, and 2 injectors), and a vertical data collection well (Moraine 1) have been drilled to assess the Torok. To date 1.05 MMSTBO have been produced from the Torok from these we Is. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from the paleo-Brookian shelf margin to the west. The sandstones and siltstones have been interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes. Gross thickness of the Torok reaches ^300 feet but thins basin -ward to the southwest, southeast, and northeast. The Torok also pinches -out to the west against the paleo-slope. Appendix 1 is a confidential section that expounds upon the geology of the pool expansion area CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 14 S. DEVELOPMENT DRILLING PLANS Planned Wells Two additional horizontal wells (1 producer, and 1 injector) have been approved by KRU working interest owners. These wells will be drilled as part of the next rotary drilling program at 3S pad (purple dashed lines emanating from 3S pad, displayed on Figure 1.). 6. PROPOSED AMENDMENTS TO KUPARUK RIVER-TOROK CONSERVATION ORDER AND AREA INJECTION ORDER Affected Area CPAI proposes the area subject to the conservation order for the KRTOP (CO 725), and corresponding area injection order (AIO 39) be expanded, so that these orders apply to the following, restated lands: Umiat Meridian T11N, R8E - 4 all - 12 all pection35-36all T12N, R7E - 26 all T12N, R8E Section 2 - 11 all Section 13 - 36 all T13N, R7E Section 19 - 36 all T13N, R8E Section 19 - 21 all Section 28 - 34 all Table 1. Description of restated lands. 7. NO UNDERGROUND SOURCES OF DRINKING WATER No Underground Source of Drinking Water History In AIO 37, Conclusion #3, the AOGCC concluded that the Torok injection interval is not a potential source of drinking water. Finding #19 of the same order, provides supporting documentation. This documentation includes details of sampled water from the Torok from the ODST-45A being equivalent to 16,980 mg/I (which is greater than the 10,000 mg/I cut off for freshwater). Also, Finding #19 documents a ruling from the Environmental Protection Agency, authorized by Disposal Injection Order 31, that the Torok is not a source of drinking water. This is based on calculations from ten nearby wells in the Torok ranging from 17,000 to 24,000 mg/I NaCl. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page ( 5 In AIO 39, Conclusion #3, the AOGCC determined that the Torok injection interval does not contain freshwater and is not a potential underground source of drinking water. Finding #19 of the same order, provides a summary of supporting documentation. This documentation includes water samples collected from Moraine 1 core measurements (21,363 mg/I of total dissolved solids) and produced water samples from KRU 35-19 and 35-620 wells ranging from 16,000 to 20,000 mg/I NaCl. Additional data related to No Underground Source of Drinking Water In addition to the above Conclusions, and Findings, CPAI has sampled additional waters from the Torok interval in several wells in the 3S area. The composition of the water is on average 18,635 mg/I, consistently above the 10,000 mg/I cut off for freshwater. A summary of the tested waters from all the 3S area wells is included in Figure 3. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 16 Figure 1. Map displaying existing boundaries and proposed amendments related to the Torok Oil Pool: current Kuparuk River -Torok Oil Pool (CO 725)/AIO 39 (blue polygon with blue diagonal lines), current Oooguruk Torok Oil Pool (CO 645)/AIO 37 (green polygon with green horizontal lines), proposed area to be amended to the Kuparuk River -Torok Oil Pool/A10 39 (blue shaded polygon), Oooguruk Torok Participating Area (red polygon), next round of approved Torok horizontal wells (purple dashed lines emanating from 3S pad). A note on the wellbore originating from the Oooguruk pad that extends into the Kuparuk River Unit: This is the ODST-47, a well which has subsequently been P&A°d. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 17 3 Kuparuk River- l'orok Oil Pool f Figure 2. The Kalubik No. 1 well serves as the type log for both the Oooguruk, and Kuparuk River -Torok Oil Pools (The above image is presented for illustration purposes. Refer to the well log measurements recorded in exploratory well Kalubik No. 1 for the precise representation of the Kuparuk-Torok Oil Pool.). See figure 1 for location of the Kalubik 1. 90 AP,----- 2it i f„mss ; Lva Pore - eq�76fSP WOR L,CCWP i -- '•0 hirci ID Figure 2. The Kalubik No. 1 well serves as the type log for both the Oooguruk, and Kuparuk River -Torok Oil Pools (The above image is presented for illustration purposes. Refer to the well log measurements recorded in exploratory well Kalubik No. 1 for the precise representation of the Kuparuk-Torok Oil Pool.). See figure 1 for location of the Kalubik 1. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 18 well Sample Date Total Cations (mg/1) Total Anions (me/1) _Total ionic composition (m /1) Comment Moraine 2/26/2015 8,128.5 13,203.7 3S-19 8/23/2013 6,969.3 21,332.2 average of2RDI samples 35-19 9/15/2013 11,414.0 18,383.3 anion Cl only 3S-19 11/4/2013 7,567.6 11,248.0 18,815.6 anion CI only 3S-19 5/21/2014 7,608.1 11,145.0 18,753.1 anion Cl only 3S-19 10 112014 / / 7,797.6 7,205.3 12,792.2 20,589.8 3S-611 11/8/2019 8,157.2 10,951.2 11,332.5 18,156.5 35-611 3/31/2020 8,158.2 19,489.7 anions Cl, and SO4 only 35-613 7/22/2016 / / 5,964.1 10,508.2 54,969.8 18,666.4 3S-613 7/28/2016 5,854.9 60,933.9 likely contaminated 3S-613 8/12/2016 9,528.4 15,383.3 likely dilluted with frac water 35-613 8/14/2016 6,014.1 9,755.4 15,769.5 likely dilluted with frac water 3S-613 8/16/2016 6,614.9 10,191.8 16,806.7 likely dilluted with frac water 3S-613 8/23/2016 6,583.3 10,150.1 16,733.4 likely dilluted with frac water 35-620 6/2/2015 7,276.4 13,615.8 10,177.2 17,453.6 35-620 6/4/2015 17,833.5 31,449.3 likely contminated; anions Cl, and SO4 only 3S-620 6/6/2015 8.828.7 13,168.4 21,997.1 cation Na, and K; anion Cl only 35-620 6/8/2015 8,398.7 10,935.3 19,334.0 cation NA only; anion Cl only 3S-620 7/4/2015 11,518.0 10,359.5 21,877.5 cation NA only; anion Cl only 3S-620 9/11/2015 6,780.9 12,085.9 18,866.8 3S-620 12/20/2015 7,398.4 8,772.2 16,170.6 anion Cl only 3S-620 1/26/2017 6,681.3 7,053.6 11,024.8 17, 706.1 3S-620 10/22/2017 / 8,081.7 11,501.5 12,421.7 18,555.1 20,503.4 7,556.0 11,079.4 18,635.4 Average Unless otherwise noted, cations include Ca, Mg, Na, and K Unless otherwise noted, anions include Cl, CO3, HCO3, and SO4 Samples noted as 'likely contaminated" ore not included in averages Figure 3. Summary of Torok water composition from samples collected from 3S area wells. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 19 Additional Geologic Information To expand on the information included in the non -confidential portion of the application, the following is provided for additional context for the Torok. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from gullies associated with the paleo-Brookian shelf margin to the west. The sandstones and siltstones are interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes (see Figure 6 for a well log cross-section demonstrating the lateral extent of the Torok, see Figures 4 and 5 for section location). Gross thickness of the Torok reaches —300 feet but thins basin -ward to the southwest, southeast, and northeast. To the west it pinches -out against the paleo-slope. The exact location of the westward pinch -out of the Torok comes with a degree of uncertainty. Figure 4 contains the Torok gross interval isochore. The western pinch -out in this interpretation shows the western limit of the Torok extending well past the western boundary of the current Oooguruk-Torok Oil Pool (CO 645)/AIO 37. The western pinch -out has the potential to extend farther up the paleo-slope for the entire western margin, as it does in the northwest corner of the Kuparuk River Unit (seismic section in Figure 7 shows this interpreted extent, see Figures 4 and 5 for seismic line location). It is due to this uncertainty, that the western boundary of the KRTOP be extended to be equivalent to the western margin of the Kuparuk River Unit. Fluid contacts within the Torok are uncertain. Both Pioneer and CPAI, as part of their applications for establishing Pool Rules from the AOGCC, addressed that a distinct oil -water contact (OWC) had not been identified within the Torok. Figure 5 contains a Top Torok depth structure map. It shows that the area is defined by a southeast plunging anticline. The Colville Delta No. 3 exploration well tested oil down to a true vertical depth subsea (TVDSS) of -5,150 feet. The highest -known water is established in the Ivik No. 1 exploration well within the Oooguruk Unit at -5,212 feet TVDSS. In establishing the Kuparuk River - Torok Oil Pool Rules, CPAI observed that mobile water is present in the Torok beginning at a depth of - 5,190 to -5,275 feet TVDSS. It is undetermined whether this represents a single OWC or multiple OWC's. In either case, there appears to be a wide transition zone where oil and water will be produced together at varying percentages, driven by capillary effects within the reservoir. All the wells produced to date, even those above -5,190 feet TVDSS have produced some level of formation water from the start. Initial water -cuts range from approximately 10-75%, generally depending on depth. Given the high variability in water -cuts in the wells produced to date, the expected produced water -cut within the expansion area can only be estimated with production from additional wells. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 1 10 Kalubil 1 A 000guruk Unit ConocoPhillips Torok Reservoir Administrative Boundaries and Proposals with Gross Isochore �... f/Legend Bottom Hole Location .� �..:........ <.. Well Spider ter% KRU Torok oil Pool Oooguruk Torok oil Pool prof, t Torokj;4 . Coastline /V 4 Gravel Footprint Proposed Weil Plan OAF 7 Figure 4. Reap from Figure 1 with addition of Torok gross interval isochore color overlay, location of well log cross-section A -A', and location of seismic line B -B'. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 111 Figure S. Map from Figure 1 with addition of Top Torok depth structure overlay, location of well log cross-section AW, location of seismic tine B -B', and key wells mentioned in text. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 112 Figure 6. Well log cross-section A -A' demonstrating lateral extent and continuity of the Torok (wells included are Placer 3, Moraine 1, Nuna 1 P131, Colv Delta 2, Kalubik 2, and Kalubik 1). Torok Oil Pool CPA|Application for KupanukRiver-Torok Oil Pool Expansion July 2020 Page 1l3 B . GK Amemezu17ozoue uack Time) n Ki ' - Figure7. Seismic cross-section B'B'demonstrating lateral extent and continuity ofthe Torok (Green horizon is —equivalent to top of the Torok Oil Pool, Yellow horizon is —equivalent to the base of the CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page I 1 ap ;i Alask s July 24, 2020 Outline 1. Introduction 2. Kuparuk River -Torok Oil Pool History 3. Proposed Kuparuk River -Torok Oil Pool Expansion 4. Torok Development 5. Development Drilling Plans 6. Proposed Amendments to the Kuparuk River -Torok Conservation, and Area Injection Orders 7. No Underground Sources of Drinking Water List of Figures 1. Location Map 2. Torok Oil Pool Type Log 3. Chemistry of Sampled/Produced Water, 3S area 4. Confidential: Torok Oil Pool, Gross Interval Isochore 5. Confidential: Torok Oil Pool, Top Depth Structure 6. Confidential: Well Log Cross -Section A -A' 7. Confidential: Seismic Cross -Section B -B' Confidential materials are submitted in Appendix 1. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 12 I. INTRODUCTION Document Scope This application is submitted for approval by the Alaska Oil and Gas Conservation Commission ("Commission") to expand the Kuparuk River -Torok Oil Pool (KRTOP) under Conservation Order (CO) 725, and Area Injection Order (AIO) 39. The proposed expansion area includes all lands acquired by ConocoPhillips Alaska, Inc. (CPAI) from Caelus Natural Resources Alaska, LLC (Caelus) in 2019. These lands were subsequently included in the 12th expansion of the Kuparuk River Unit (KRU), as it pertains to the Torok (Figure 1). This expansion would make the western, northern, and southern boundaries of the KRTOP equivalent to the current KRU boundary in the expansion area, to allow for development of the Torok over this area. OIL POOL • Original KRTOP CO 725 & AIO 39 CO 725, issued in July 2016, includes the accumulation of hydrocarbons common to and correlating with the interval between the measured depths of 4,991 and 5,272 feet in the Kalubik No. 1 well (Figures 1 & 2). This accumulation stratigraphically defines the Kuparuk River -Torok Oil Pool. AIO 39 authorizing injection of fluids for enhanced oil recovery from the KRTOP was also issued in July 2016. CO 725.001 In September 2016, the Commission modified the original order in the following ways: ® Finding 10: Removal of the term "Regular production", due to the potential tax implications of this language. ® Conclusion 12: Removal of language related to pre -production from injectors. ® Expiration clause replaced by Rule 13 related to expiration date. CO 725.002 In May 2017, the Commission modified the original order to administratively remove the requirement for an annual reservoir review meeting for KRTOP. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 13 - 3. PROPOSED KUPARUK RIVER-TOROK OIL POOL EXPANSION Requested Scope CPAI requests the Commission to amend CO 725 and AIO 39 to expand the Kuparuk River -Torok Oil Pool to include lands acquired by CPAI from Caelus in 2019. These lands were included in the 12th expansion of the KRU, as it pertains to the Torok, approved in August 2019 by the Alaska Department of Natural Resources (Figure 1., and Table 1.). These lands previously belonged to the Oooguruk Unit (OU) and were voluntarily contracted by Caelus. As these lands once belonged to the OU, the Oooguruk-Torok Oil Pool (OTOP) covers a portion of these lands. The OTOP will need to be contracted in order to accommodate the expansion of the Kuparuk River -Torok Oil Pool. This will allow KRU owners the ability to develop and implement enhanced oil recovery operations on these lands. Development plans are summarized in Section 4. 4. TOROK DEVELOPMENT Development Plans The expansion of the KRTOP will extend the existing pool to include the area currently covered by the OTOP. In addition, it is requested that the expansion include all acreage included in the 121h expansion of the KRU, as it pertains to the Torok reservoir. This would make the western, northern, and southern boundaries of the Kuparuk River -Torok Oil Pool consistent with the current unit boundary in the expansion area, as the Torok exists over an area larger than that covered by the existing OTOP on the lands under consideration. The expansion will allow for development of the Torok from KRU 3S pad, and the newly named KRU 3T pad (previously known as Nuna pad). The KRU owners began testing the Torok with a recompletion of the 3S-19 well in 2013. Since that time four horizontal wells (2 producers, and 2 injectors), and a vertical data collection well (Moraine 1) have been drilled to assess the Torok. To date 1.05 MMSTBO have been produced from the Torok from these wells. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from the paleo-Brookian shelf margin to the west. The sandstones and siltstones have been interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes. Gross thickness of the Torok reaches —300 feet but thins basin -ward to the southwest, southeast, and northeast. The Torok also pinches -out to the west against the paleo-slope. Appendix 1 is a confidential section that expounds upon the geology of the pool expansion area CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 14 S. DEVELOPMENT _ PLANS Planned Wells Two additional horizontal wells (1 producer, and 1 injector) have been approved by KRU working interest owners. These wells will be drilled as part of the next rotary drilling program at 3S pad (purple dashed lines emanating from 3S pad, displayed on Figure 1.). CONSERVATION6. PROPOSED AMENDMENTS TO KUPARUK RIVER-TOROK _ _ ORDER AREA Affected Area CPAI proposes the area subject to the conservation order for the KRTOP (CO 725), and corresponding area injection order (AIO 39) be expanded, so that these orders apply to the following, restated lands: Umiat Meridian T11N, R8E Section 1- 4 all Section 9 - 12 all T12N, R7E Section 1 - 26 all Section 35 - 36 all T12N, R8E Section 2 - 11 all Section 13 - 36 all T13N, R7E Section 19 - 36 all T13N, R8E Section 19 - 21 all Section 28 - 34 all Table 1. Description of restated lands. 7. NO UNDERGROUND SOURCES OF DRINKING WATER No Underground Source of Drinking Water History In AIO 37, Conclusion #3, the AOGCC concluded that the Torok injection interval is not a potential source of drinking water. Finding #19 of the same order, provides supporting documentation. This documentation includes details of sampled water from the Torok from the ODST-45A being equivalent to 16,980 mg/I (which is greater than the 10,000 mg/I cut off for freshwater). Also, Finding #19 documents a ruling from the Environmental Protection Agency, authorized by Disposal Injection Order 31, that the Torok is not a source of drinking water. This is based on calculations from ten nearby wells in the Torok ranging from 17,000 to 24,000 mg/I NaCl. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 15 In AIO 39, Conclusion #3, the AOGCC determined that the Torok injection interval does not contain freshwater and is not a potential underground source of drinking water. Finding 419 of the same order, provides a summary of supporting documentation. This documentation includes water samples collected from Loraine 1 core measurements (21,363 mg/I of total dissolved solids) and produced water samples from KRU 35-19 and 35-620 wells ranging from 16,000 to 20,000 mg/I NaCL Additional data related to No Underground Source of Drinking Water In addition to the above Conclusions, and Findings, CPAI has sampled additional waters from the Torok interval in several wells in the 3S area. The composition of the water is on average 18,635 mg/I, consistently above the 10,000 mg/I cut off for freshwater. A summary of the tested waters from all the 3S area wells is included in Figure 3. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 16 Figure 1. Map displaying existing boundaries and proposed amendments related to the Torok Oil Pool: current Kuparuk River -Torok Oil Pool (CO 725)/A1O 39 (blue polygon with blue diagonal lines), current Oooguruk Torok Oil Pool (CO 645)/AIO 37 (green polygon with green horizontal lines), proposed area to be amended to the Kuparuk River -Torok Oil Pool/A1O 39 (blue shaded polygon), Oooguruk Torok Participating Area (red polygon), next round of approved Torok horizontal wells (purple dashed lines emanating from 3S pad). A note on the wellbore originating from the Oooguruk pad that extends into the Kuparuk River Unit: This is the ODST-47, a well which has subsequently been P&A'd. ConocoPhillips Torok Administrative Boundaries an/ Proposals Legend Bottom Hole • • re 1 Well Spider Torok Oil Pool dw+r •� Oooguruk Torok •il • . m BYpAIt • •A W Torok Unit Outline Coastline avel Footprint ►' OAF j 1 2Miles C Figure 1. Map displaying existing boundaries and proposed amendments related to the Torok Oil Pool: current Kuparuk River -Torok Oil Pool (CO 725)/A1O 39 (blue polygon with blue diagonal lines), current Oooguruk Torok Oil Pool (CO 645)/AIO 37 (green polygon with green horizontal lines), proposed area to be amended to the Kuparuk River -Torok Oil Pool/A1O 39 (blue shaded polygon), Oooguruk Torok Participating Area (red polygon), next round of approved Torok horizontal wells (purple dashed lines emanating from 3S pad). A note on the wellbore originating from the Oooguruk pad that extends into the Kuparuk River Unit: This is the ODST-47, a well which has subsequently been P&A'd. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 17 i �E F Kuparuk IRjver- Torok Oil Paul cc? :Ole r CEf?, Fd7E Gaso_o, 6k yql, e:G k L!i F.tR?c 10 C"V �0, i ES-- - -- C-t~ife.0 ----- _S$. P-5 - SBJ he J RPr k9 ..- P"SlRtfdx) UPOR 1M, kIV ' C a DTCPMI ) mirr 70 Figure 2. The Kalubik No. 1 well serves as the type log for both the Oooguruk, and Kuparuk River -Torok Oil Pools (The above image is presented for illustration purposes. Refer to the well log measurements recorded in exploratory well Kalubik No. 1 for the precise representation of the Kuparuk-Torok Oil Pool.). See figure 1 for location of the Kalubik 1. CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 18 well Sample Date Total Cations (mg/1) Total Anions (mg/1) _Total ionic composition (mg/1) Comment Moraine 1 2/26/2015 8,128.5 13,203.7 21,332.2 average of 2 RDT samples 3S-19 8/23/2013 6,969.3 11,414.0 18,383.3 anion Cl only 3S-19 9/15/2013 7,567.6 11,248.0 18,815.6 anion Cl only 3S-19 11/4/2013 7,608.1 11,145.0 18,753.1 anion Cl only 3S-19 5/21/2014 7,797.6 12,792.2 20,589.8 3S-19 10/11/2014 7,205.3 10,951.2 18,156.5 35-611 11/8/2019 8,157.2 11,332.5 19,489.7 anions Cl, and 504 only 3S-611 3/31/2020 8,158.2 10,508.2 18,666.4 35-613 7/22/2016 5,964.1 54,969.8 60,933.9 likely contaminated 3S-613 7/28/2016 5,854.9 9,528.4 15,383.3 likely dilluted with frac water 3S-613 8/12/2016 6,014.1 9,755.4 15,769.5 likely dilluted with frac water 3S-613 8/14/2016 6,614.9 10,191.8 16,806.7 likely dilluted with frac water 35-613 8/16/2016 6,583.3 10,150.1 16,733.4 likely dilluted with fracwater 35-613 8/23/2016 7,276.4 10,177.2 17,453.6 35-620 6/2/2015 13,615.8 17,833.5 31,449.3 likely contminated; anions Cl, and SO4 only 3S-620 6/4/2015 8,828.7 13,168.4 21,997.1 cation Na, and K; anion Cl only 35-620 6/6/2015 8,398.7 10,935.3 19,334.0 cation NA only; anion Cl only 35-620 6/8/2015 11,518.0 10,359.5 21,877.5 cation NA only; anion Cl only 35-620 7/4/2015 6,780.9 12,085.9 18,866.8 3S-620 9/11/2015 7,398.4 8,772.2 16,170.6 anion Cl only 35-620 12/20/2015 6,681.3 11,024.8 17,706.1 3S-620 1/26/2017 7,053.6 11,501.5 18,555.1 3S-620 10/22/2017 8,081.7 12,421.7 20,503.4 7,556.0 11,079.4 18,635.4 Average Unless otherwise noted, cations include Ca, Mg, Na, and K Unless otherwise noted, anions include Cl, CO3, HCO3, and SO4 Samples noted as 'likely contaminated" are not included in overages Figure 3. Summary of Torok water composition from samples collected from 3S area wells CPAI Application for Kuparuk River -Torok Oil Pool Expansion July 2020 Page 19 Additional Geologic Information To expand on the information included in the non -confidential portion of the application, the following is provided for additional context for the Torok. The Torok consists of lower Cretaceous -aged, Brookian lower slope -to -basin floor turbidite deposits comprised of thinly laminated mudstones, siltstones, and very fine to fine-grained sandstones sourced from gullies associated with the paleo-Brookian shelf margin to the west. The sandstones and siltstones are interpreted to be locally continuous, sheet-like deposits within turbidite lobe complexes (see Figure 6 for a well log cross-section demonstrating the lateral extent of the Torok, see Figures 4 and 5 for section location). Gross thickness of the Torok reaches —300 feet but thins basin -ward to the southwest, southeast, and northeast. To the west it pinches -out against the paleo-slope. The exact location of the westward pinch -out of the Torok comes with a degree of uncertainty. Figure 4 contains the Torok gross interval isochore. The western pinch -out in this interpretation shows the western limit of the Torok extending well past the western boundary of the current Oooguruk-Torok Oil Pool (CO 645)/AIO 37. The western pinch -out has the potential to extend farther up the paleo-slope for the entire western margin, as it does in the northwest corner of the Kuparuk River Unit (seismic section in Figure 7 shows this interpreted extent, see Figures 4 and 5 for seismic line location). It is due to this uncertainty, that the western boundary of the KRTOP be extended to be equivalent to the western margin of the Kuparuk River Unit. Fluid contacts within the Torok are uncertain. Both Pioneer and CPAI, as part of their applications for establishing Pool Rules from the AOGCC, addressed that a distinct oil -water contact (OWC) had not been identified within the Torok. Figure 5 contains a Top Torok depth structure map. It shows that the area is defined by a southeast plunging anticline. The Colville Delta No. 3 exploration well tested oil down to a true vertical depth subsea (TVDSS) of -5,150 feet. The highest -known water is established in the Ivik No. 1 exploration well within the Oooguruk Unit at -5,212 feet TVDSS. In establishing the Kuparuk River - Torok Oil Pool Rules, CPAI observed that mobile water is present in the Torok beginning at a depth of - 5,190 to -5,275 feet TVDSS. It is undetermined whether this represents a single OWC or multiple OWC's. In either case, there appears to be a wide transition zone where oil and water will be produced together at varying percentages, driven by capillary effects within the reservoir. All the wells produced to date, even those above -5,190 feet TVDSS have produced some level of formation water from the start. Initial water -cuts range from approximately 10-75%, generally depending on depth. Given the high variability in water -cuts in the wells produced to date, the expected produced water -cut within the expansion area can only be estimated with production from additional wells. PAGES 10-13 CONFIDENTIAL