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Home My WebLink AboutCO 790Conservation Order 790 Whiskey Gulch 1. February 5, 2021 Hilcorp’s Application for Whiskey Gulch Spacing Exception (confidential, held in secure storage: landowner mailing list, well and track status map, track ownership schedule) 2. February 8, 2021 Email Confirming Whiskey Gulch Well No. 1 3. February 8, 2021 Notice of hearing 4. March 12, 2021 Public Comment by Cook Inlet Region, Inc. (CIRI) ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp ) Docket Number: CO-21-001 Alaska, LLC for an exception to the spacing ) Conservation Order No. 790 requirements of 20 AAC 25.055(a)(1) and ) Whiskey Gulch No. 1 (a)(2) to drill, complete, test, and produce ) Exploration Oil/Gas Well the Whiskey Gulch No. 1 exploratory well ) Kenai Peninsula Borough, Alaska within 500' and 1,500 feet property lines ) where the owner and the landowner are not ) June 10, 2021 the same on both sides of the lines. ) IT APPEARING THAT: By letter received February 5, 2021, Hilcorp Alaska, LLC, (Hilcorp) requested the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirements of 20 AAC 25.055(a)(1) and (a)(2) to allow the Whiskey Gulch No. 1 exploratory well to be drilled, completed, tested, and produced in an undefined oil pool within 500' of a property line where the owner and the landowner are not the same on both sides of the line, and to be drilled, completed, tested, and produced in an undefined gas pool within 1,500 feet of a property line where the owner and the landowner are not the same on both sides of the line. 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for March 16, 2021. On February 8, 2021, the AOGCC published notice of the opportunity for that hearing on the State of Alaska's Online Public Notices 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 February 10, 2021, the AOGCC published the notice in the Anchorage Daily News. 3. Hilcorp sent, by certified mail, notice of the application to all owners, landowners, and operators of all properties within 1,000' (Undefined Oil Pool) and 3,000 feet of the proposed Whiskey Gulch No. 1's anticipated productive interval within the Undefined Gas Pool, and provided the AOGCC proof of mailing. 4. The only comments received by the AOGCC were from Cook Wet Region, Incorporated (CIRI), stating it does not object to the spacing exception at this time and did not request a hearing. 5. The tentatively scheduled public hearing was vacated on March 15, 2021. 6. Hilcorp's application provided sufficient information upon which to make an informed decision on the spacing exception. CO-21-001 June 10,2021 Page 2 of 3 FINDINGS: 1. Hilcorp is the operator for the Whiskey Gulch No. 1 well, located within the Kenai Peninsula Borough, Alaska (KPB) and is the 100% Working Interest owner of Alaska Department of Natural Resources (DNR) State Lease Tract 001, ADL 0392666. Mineral landowners for the properties within 3,000' of Whiskey Gulch No. 1 include: a. State of Alaska, DNR b. University of Alaska c. Estate of Hazel Jeanne Howard d. Clifford and Cheryl A. Shafer e. Gary Williams/Margaret A. Parsons (50150) f. Estate of Edna M. Williams g. William Grant Hagerty h. Darcy McBride i. Terry A. Jones j. Chris L. Otta/Arleatha Suing (50150) 2. The statewide well spacing provisions of 20 AAC 25.055 govern the Undefined Whiskey Gulch Pool within the Kenai Unit. 3. The Whiskey Gulch No. 1 Pad is located on privately owned property (KPB Parcel 16508321). The surface location for Whiskey Gulch No. 1, the top of the target producing interval, and the bottom -hole location will all lie within Alaska State Lease ADL0392666: Surface Hole Location (SHL): 1374' FSL, 1557' FEL, Sec. 23, T04S, R15W, SM, AK Top Target Location (TTL): 423' FNL, 337' FWL, Sec. 25, T04S, R15W, SW, AK Bottom -Hole Location (BHL): 1083' FNL, 1021' FWL, Sec. 25, T04S, R15W, SW, AK 4. This spacing exception is necessary because Whiskey Gulch No. 1 will be: 1) open to test or regular production of oil in an Undefined Oil Pool within 500 feet of a property line where the owners or landowners are not the same on both sides of the line;' and 2) open to test or regular production of gas in the Undefined Gas Pool within 1500 feet of a property line where the owners or landowners are not the same on both sides of the line. Whiskey Gulch No. 1 will target unproven oil/gas reserves that cannot be reached by conforming to applicable statewide spacing regulations. This spacing exception allows Hilcorp to penetrate the desired sands for exploration and testing at the most prospective location on the top of the subsurface structure. This feature was previously defined by shallow stratigrapbic test boreholes, existing 2D seismic data, and a gravity survey over the area. Drilling on this larger parcel also minimizes the impact on residents within the adjacent community. 120 AAC 25.055(a)(1) 220 AAC 25.055(a)(2) CO-21-001 June 10, 2021 Page 3 of 3 5. If operated as approved in Permit to Drill (PTD), Whiskey Gulch No. 1 will not cause waste or result in an increased risk of fluid movement into freshwater. CONCLUSIONS: An exception to the well spacing provisions of 20 AAC 25.055 is necessary to allow the drilling, testing, and production of the Whiskey Gulch Undefined Oil/Gas Pool in the Whiskey Gulch No. 1 exploration potential oil and gas well in order to maximize ultimate resource recovery. 2. Granting an exception to the well spacing provisions of 20 AAC 25.055 for Whiskey Gulch No. I will not result in waste or jeopardize correlative rights of adjoining or nearby owners, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. NOW THEREFORE IT IS ORDERED: The AOGCC grants Hilcorp's February 5, 2021, application for an exception to the well spacing provisions of 20 AAC 25.055 to allow the drilling, testing, and production of the Whiskey Gulch No. 1 exploratory oil and gas well within the Whiskey Gulch Undefined Oil/Gas Pools. Hilcorp may proceed and must comply with all applicable laws and all other legal requirements. DONE at Anchorage, Alaska, and dated June 10, 2021. Jeremy Digitally signed by Jeremy Pdce Date:2021.06.10 Price 09:19n9-06'00 Jeremy M. Price Chair, Commissioner Jessie L. Digitally signed by Jessie L Oimlelomki Chmielowski Date:2021.06.10 1121:57-08'W Jessie L. Chmielowski Commissioner Daniel Digitally signed by Daniel Seamount Seamount Date:2121.06.10 1249:0a-09000' Daniel T. Seamount, Jr. 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 reconsidemtion 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 nuns until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Salazar, Grace (CED) From: Salazar, Grace (CED) <grace.salazar@alaska.gov> Sent: Thursday, June 10, 2021 1:20 PM To: AOGCC Public Notices Subject: [AOGCC_Public_Notices] AOGCC Conservation Order No. 790 Attachments: CO790.pdf Please see attached. Re: THE APPLICATION OF Hilcorp Alaska, LLC for an exception to the spacing requirements of 20 AAC 25.055(a)(1) and (a)(2) to drill, complete, test, and produce the Whiskey Gulch No. 1 exploratory well within 500' and 1,500 feet property lines where the owner and the landowner are not the same on both sides of the lines. Respectfully, M. Grace Salazar, Special Assistant Alaska Oil and Gas Conservation Commission 333 West 71h Avenue Anchorage, AK 99501 Direct: (907) 793-1221 Email: Rrace.salazar@alaska.gov https://www.commerce.alaska.goy/web/aogcc/ Docket Number: CO-21-001 Conservation Order No. 790 Whiskey Gulch No. 1 Exploration Oil/Gas Well Kenai Peninsula Borough, Alaska June 10, 2021 List Name: AOGCC_Public_Notices@list.state.ak.us You subscribed as: grace.salazar@alaska.gov Unsubscribe at: http://list.state.ak.us/mailman/options/aogcc_Public_notices/grace.salazar%40alaska.gov 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 March 12, 2021 Jeremy M. Price, Chair Alaska Oil and Gas Conservation Commission 333 West 71h Avenue, Suite 100 Anchorage, AK 99501 RE: Docket Number CO-21-001 Hilcorp Alaska, LLC Spacing Exception request for Whiskey Gulch No. 1 Dear Chairperson Price This letter is submitted to notify the Alaska Oil and Gas Conservation Commission (Commission) that Cook Inlet Region, Inc. (CIRI) owns oil and gas interest within Section 36 of T4S R 15W SM, as depicted in the enclosed map. CIRI's oil and gas ownership interests in Section 36 are not under lease to Hilcorp Alaska LLC (Hilcorp), nor are they leased to any third party at this time. In Hilcorp's February 5th application to the Commission, Hilcorp proposes to drill Whiskey Gulch No. 1 well with a bottom hole location approximately one-half mile from CIRI's property line. CIRI understands the proposed well will be drilled on State of Alaska Lease ADL 392666 within Section 25 of T4S, R15W SM, and that CIRI property is currently outside of the 1,500' regulatory spacing requirement for a gas well. However, should geologic or geophysical evidence suggest the pool extends further south than that proposed within the application, CIRI could be and affected landowner. Regulation 20 AAC 25.055 specifically disallows production without pooling, and while Hilcorp does not appear to violate the regulation under the current application, the pool as identified within the application may vary once the well is drilled to depth. CIRI is not objecting to the spacing exception at this time but has an interest in protecting its correlative rights should the Commission find there is geological shift in the pool. CIRI appreciates the opportunity to make comments on this matter. If you have any questions, please contact Colleen Miller at (907) 263-5117. Sincerely, COOK INLET REGION, INC. Suzanne Settle Vice President, Energy, Land & Resources Enclosures 2 [II Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION Re: Docket Number: CO-21 -001 The application of Hilcorp Alaska, LLC for an exception to the spacing requirements of 20 AAC 25.055(a)(1) and (a)(2) to drill, complete, test, and produce the Whiskey Gulch No. 1 exploratory well within 500' and 1,500' of property lines where the owner and the landowner are not the same on both sides of the lines. Hilcorp Alaska, LLC, (Hilcorp) by letter dated February 5, 2021, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirements of 20 AAC 25.055(a)(1) and (a)(2) to allow the Whiskey Gulch No. I exploratory well to be drilled, completed, tested, and produced in an undefined oil pool within 500' of a property line where the owner and the landowner are not the same on both sides of the line, and to be drilled, completed, tested, and produced in an undefined gas pool within 1,500' of a property line where the owner and the landowner are not the same on both sides of the line. Whiskey Gulch No. 1 Well Surface Location: 1374' FSL, 1557' FEL, Sec. 23, T04S, R15W, Seward Meridian Target Location: 423' FNL, 337' FWL, Sec. 25, T04S, R15W, Seward Meridian Bottom -hole Location: 1083' FNL, 1021' FWL, Sec. 25, T04S, R15W, Seward Meridian The AOGCC has tentatively scheduled a public hearing on this subject for March 16, 2021, at 10:00 a.m. at 333 West 71 Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written request must be filed with the AOGCC no later than 4:30 p.m. on March 1, 2021. If a request for a hearing is not timely filed, and the AOGCC deems the information submitted in support of Hilcorp's application sufficient to make a decision, the AOGCC may issue an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after March 3, 2021. 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. 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. Written comments must be received no later than 4:30 p.m. March 12, 2021, except that if a hearing is held, comments will be accepted until the conclusion of the March 16, 2021 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than March 5, 2021. //signature on file// Jeremy M. Price Chair, Commissioner STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO, CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENT. ADVERTISING ORDER NUMBER AO-OS-21-015 FROM: Alaska Oil and Gas Conservation Commission AGENCY CONTACT: Jody Colombie/Samantha Carlisle DATE OF A.O. 2/82021 AGENCY PHONE: 907 279-1433 333 West 7th Avenue Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: 907 276-7542 TO PUBLISHER: Anchorage Daily News, LLC SPECIAL INSTRUCTIONS: PO Box 140147 Anchorage, Alaska 99514-0174 TYPE OF ADVERTISEMENT: ;V LEGAL DISPLAY CLASSIFIED r OTHER (Specify below) DESCRIPTION PRICE CO-21-001 Initials of who prepared AO: Alaska Non -Taxable 92-600185 SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATIOMMIVATTACNED COPY OF ADVERnsnleNr ro: AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 Page 1 of 1 Total of All Pages $ REF Type Number Amount Date Comments I PVN VCO21795 2 AO AO-08-21-015 4 FIN AMOUNT I SY Act Test late PGM LGR Object FY DIST LIQ i 21 AOGCC 3046 21 2 3 4 5 Pur sing A [ho ' amr. Title: Purchasing Authority's Signature Telephone Number i .0. # rec ng agencyname must appear on all Invoices and documents relating to this purchase. . Thest em staretl for tax free transactions under Chapter32, IRS code. Registratlonnumber92-73-0006 K. Items are for the exclusive use of the stale and not for resale. DISTRIBUTION: Division Fiscal/Original AO Copies: Publisher (faxed), Division Fiscal, Receiving Form: 02-901 Revised: 2/8/2021 Colombie, Jody J (CED) From: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Sent: Monday, February 8, 2021 4:01 PM To: AOGCC Public Notices Subject: [AOGCC_Public_Notices] CO-21-001 Public Notice Attachments: CO-21-001 Public_Hearing_Notice.pdf Re: Docket Number: CO-21-001 The application of Hilcorp Alaska, LLC for an exception to the spacing requirements of 20 AAC 25.055(a)(1) and (a)(2) to drill, complete, test, and produce the Whiskey Gulch No. 1 exploratory well within 500' and 1,500' of property lines where the owner and the landowner are not the same on both sides of the lines. Jody Colombie AOGCC Special Assistant Alaska Oil and Gas Conservation Commission State of Alaska 333 West 7" Avenue Anchorage, AK 99501 Phone Number: 907-793-1221 Email: jody.colombie@alaska.gov List Name: AOGCC—Public—Notices@list.state.ak.us You subscribed as: iody.colombie@alaska.gov Unsubscribe at: http:Hlist.state.ak.us/mailman/options/aogcc_public_notices/jody.colombie%40alaska.gov Colombie, Jody 1 (CED) From: Castro, Marlo N (CED) Sent: Monday, February 8, 2021 4:28 PM To: Colombie, Jody J (CED) Subject: RE: CO-21-001 Public Notice Hi Jody, this has been posted on the site Events page Marlo Castro AOGCC From: Colombie, Jody J (CED) <jody.colombie@alaska.gov> Sent: Monday, February 8, 20214:01 PM To: AOGCC—Public—Notices <AOGCC_Public_Notices@list.state.ak.us> Subject: [AOGCC_Public_Notices] CO-21-001 Public Notice Re: Docket Number: CO-21-001 The application of Hilcorp Alaska, LLC for an exception to the spacing requirements of 20 AAC 25.055(a)(1) and (a)(2) to drill, complete, test, and produce the Whiskey Gulch No. 1 exploratory well within 500' and 1,500' of property lines where the owner and the landowner are not the same on both sides of the lines. Jody J. Colombie AOGCC Special Assistant Alaska Oil and Gas Conservation Commission State of Alaska 333 West 7`4 Avenue Anchorage, AK 99501 Phone Number: 907-793-1221 Email: jo y.colombieAalaska.gov List Name: AOGCC Public Notices@list.state.ak.us You subscribed as: marlo.castro@alaska.eov Unsubscribe at: http://list.state.ak.us/mailman/options/aogcc public notices/marlo.castro%40alaska.gov Colombie, Jody J (CED) From: ANC Legal Ads <legalads@adn.com> Sent: Tuesday, February 9, 2021 11:52 AM To: Colombie, Jody J (CED) Subject: Re: Please Publish Thanks — Jada Nowling, Manager. Lisi Misa Legal Advertising legalads(uladn.com 1 907-257-4286 Anchorage Daily News I adn.com 300 W. 31st Ave. Anchorage, AK 99503 y f 'As of July 8th, we will be charging for affidavits. The standard affidavit charge is $5. This charge will automatically be included in all cost/quotes unless requested otherwise. Please keep all correspondence for legal advertising addressed to legalads(a)adn.com, to assure best service and tracking ATTENTION: AFFIDAVITS ARE MAILED OUT ON TUESDAYS/FRIDAYS I*' On Tue, Feb 9, 2021 at 11:35 AM Colombie, Jody J (CED) <iody.colombie@alaska.aov> wrote: Approved Sent from my iPhone On Feb 9, 2021, at 11:18 AM, ANC Legal Ads <legalads@adn.com> wrote: Jody, Please approve the quote and ad below by 3 pm today as to run in tomorrow's ADN. <image.png> Lis! Misa Legal Advertising Ieoalads(o)adn.com 1 907-257-4286 Anchorage Daily News I adn.com 1 300 W. 31st Ave. Anchorage, AK 99503 coo *" As of July 8th, we will be charging for affidavits. The standard affidavit charge is $5. This charge will automatically be included in all costlquotes unless requested otherwise. Please keep all correspondence for legal advertising addressed to legaladsO-adn.com, to assure best service and tracking. " ATTENTION: AFFIDAVITS ARE MAILED OUT ON TUESDAYS/FRIDAYS *** On Mon, Feb 8, 2021 at 3:59 PM Colombie, Jody 1 (CED) <lodv.colombie@alaska.aov> wrote: Jody J. Colombie AOGCC Special Assistant Alaska Oil and Gas Conservation Commission State of Alaska 333 West 7" Avenue Anchorage, AK 99501 Phone Number: 907-793-1221 Email: iody.colombie(d),alaska.jov ANCHORAGE DAILY NEWS AFFIDAVIT OF PUBLICATION D GAS CONSERVATION R E C E I V'E t #: 100333 W. TTH AVE STTE 10AK/AK OIL 0, ANCHORAGE, AK 99501COMMISSION APR 15 2021 AOGCC OGCC Order #: W0020529 STATE OF ALASKA THIRD JUDICIAL DISTRICT Lisi Misa being first duly sworn on oath deposes and says that she is a representative of the An- chorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the afore- said 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 02/10/2021 and that such newspaper was regularly distrib- uted 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. - 6 � r�Vwu1� Subscribed and sworn to beforc_Tme this 1 lth day of February 2021. DZ O tary Public in and for o M D y e State of Alaska. �� Z Third Division s D O -0 Anchorage, Alaska * C r EYPIRES MYC`JMlvqI/0r4C/" �y �OoI Cost: $393.46 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number. CO-21-001 The application of Hilcorp Alaska, LLC for an exception to the spacing requirements of 20 AAC 25.055(a)(1) and (a)(2) to drill, complete, test olnd produce the Whiskey Gulch No. 1 exploratory well within 50antl 1,500' of property lines where the owner and the landowner are not the same on both sides of the lines. Hilcorp Alaska, LLC, (Hilcorp) by letter dated February 5, 2021, requests theAlaska oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirements of 20 AAC 25.055(a)(1) and (a)(7) to allow the Whiskey Gulch No. 1 exploratory well to be drilled, completed, tested, and produced in an undefined oil pool within 500'ofa proper line where the owner and the landowner are not the same on both sides of the line, and to be drilled, completed, tested, and produced in an undefined ggas ppool within 1,500' of a property line where the owner and the landowner are not the same on both sides of the line. Whiskey Gulch No. 1 Well Surface Location: 1374' FSL, 1557' FEL, Sec. 23, T04S, R15W, Seward Meridian Target Location: 423' FNL, 337' FWL, Sec. 25, T04S, R15W, Seward Meridian Bottom -hole Location: 1083' FNL, 1021' FWL, Sec. 25, T04S, R15W, Seward Meridian The AOGCC has tentatively scheduled a public hearing on this subject for March 16, 2021, at 10:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. To request that the tentatively scheduled hearing be held, a written reuest must be filed with the AOGCC no later than 4:30 p.m. on March 1, 2021. If a request for a hearinS Is not timely filed, and the AOGCC deems the information submitted in support of Hilcorp's application sufficient to make a decision, the AOGCC may Issue an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after March 3, 2021. 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 hearingshould check with AOGCC the day before the hearing to ascertain if the hearing will be telephonic. If the hearing is telephonic, on the day of the hearing, those desiring to be present or participate should call 1-800-315-6338 and, when instructed to do so, enter the code 14331. Because the hearing will start at 10:00 a.m., the phone lines will be available starting at 9:45 a.m. Depending on call volume, those calling in may need to make repeated attempts before getting through. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 p.m. March 12, 2021, except that if a hearing is held, comments will be accepted until the conclusion of the March 16, 2021 hearing. if, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant Jody Colombia, at (907) 793-1221, no later than March 5, 2021. //signature on file// Jeremy M. Price Chair, commissioner PUBLISHED: February 10, 2021 17ilombie, Jody J (CED) From: Davies, Stephen F (CED) Sent: Monday, February 8, 2021 2:02 PM To: Colombie, Jody J (CED) Subject: FW: [EXTERNAL] Whiskey Gulch Exploratory Well Categories: Yellow Category For the record. From: Benjamin Siks <bsiks@hilcorp.com> Sent: Monday, February 8, 2021 1:52 PM To: Davies, Stephen F (CED) <steve.davies@alaska.gov>; Cody Terrell <cterrell@hilcorp.com> Subject: RE: [EXTERNAL) Whiskey Gulch Exploratory Well Hey Steve, The first well will be Whiskey Gulch No. 1, sorry for the confusion, it has been endless on our side as well. If we have a follow up appraisal well, that will be Whiskey Gulch No. 14. Hope that helps! All the best, Ben Siks Ben Siks Senior Geologist — Kenai Asset Team Office — 907-777-8388 Cell----907-229-0865 bsiks(d)hilcorp.com From: Davies, Stephen F (CED) [mailto:steve.davies@alaska.gov] Sent: Monday, February 8, 2021 1:49 PM To: Cody Terrell <cterrell@hilcorp.com>; Benjamin Siks <bsiks@hilcoro.com> Subject: [EXTERNAL] Whiskey Gulch Exploratory Well Cody, Ben: I am reviewing Hilcorp's application for spacing exception for this proposed exploratory well. I would like to confirm the number of this proposed well. The title of Hilcorp's application letter to Commissioner Price refers to "Whiskey Gunch No. 14" as does the introductory paragraph of the letter, whereas the remainder of the letter refers to the well as "Whiskey Gulch No. 1." The numbers of the existing Whiskey Gulch stratigraphic test wells range from "Whiskey Gulch 1B" to "Whiskey Gulch 13" so either 1 or 14 would work, but assigning the number of 1 to this exploratory well may result in a bit confusion since there is already a 1B stratigraphic test well. Thanks and stay safe, Steve Davies Alaska Oil and Gas Conservation Commission (AOGCC) 1fl Hilcorp Alaska, LLC February 5, 2021 Jeremy Price, Chair Commissioner Alaska Oil and Gas Conservation Commission 333 West 7" Avenue, Suite 100 Anchorage, Alaska 99501 RE: Application for Spacing Exception Whiskey Gulch No. 14 Exploration Well Whiskey Gulch Prospect near Anchor Point, Alaska Dear Commissioner Price: Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpolnt Drive Suite 1400 Anchorage, AK 99503 Phone: 907/777-8432 Fax: 907/777-8301 Email: cterrellfhllcoro.com RECEIVED FEB 0 5 202, aoGCC Hilcorp Alaska, LLC ("Hilcorp"), as sole working interest owner of the affected oil and gas leases, requests permission to drill, test, and produce the Whiskey Gulch No. 14 Well in the Undefined Oil Pool within 500 feet of a property line where the owners and landowners are not the same on both sides of the line, and in the Undefined Gas Pool within 1,500 feet of a property line where the owners and landowners are not the same on both sides of the line, pursuant to 20 AAC 25.055(d). In accordance with 20 AAC 25.005, Hilcorp plans to submit an application for a Permit to Drill to AOGCC for approval, prior to the commencement of drilling Whiskey Gulch No. 1. This well will be drilled from the a pad site ("Whiskey Gulch Pad No. I") located on privately owned property (KPB Parcel 16508321), within the Whiskey Gulch Prospect area located in Anchor Point, Alaska. The land use authorization for the Whiskey Gulch Pad No. 1 was granted by the private surface owner, under a certain Rights -of -Way and Option to Purchase Agreement recorded in the Homer Recording District. Drilling operations for Whiskey Gulch No.1 are expected to commence approximately June I", 2021. To date, no pool rules have been established within the Whiskey Gulch Prospect area. Therefore, statewide spacing regulation 20 AAC 25.055(a) is controlling. In relevant part, subsections (a)(1) and (a)(2) provide: • (a)(1) For a well drilling for oil, a wellbore may be open to test or regular production within 500 feet of a property line only if the owner is the same and the landowner is the same on both sides of the line. • (a)(2) For a well drilling for gas, a wellbore may be open to test or regular production within 1,500 feet of a property line only if the owner is the same and the landowner is the same on both sides of the line. Whiskey Gulch Prospect Whiskey Gulch No. 1 Application for Spacing Exception Page 2 of 11 The proposed Whiskey Gulch No. 1 well is an exploration well located approximately 2.5 miles north of Anchor Point, Alaska, within an exploration area referred to as the Whiskey Gulch Prospect. The Whiskey Gulch Prospect is located directly north of the Seaview Unit. Whiskey Gulch No. 1 will be the first exploration well drilled by Hilcorp in the Whiskey Gulch Prospect; being in an area with no established unit or participating areas. The Seaview No. 8 well is the closest well capable of production and is located approximately 3.9 miles south of the proposed Whiskey Gulch No. 1 Well. There are currently no productive wells, or wells capable of production, within the Whiskey Gulch Prospect. This spacing exception is necessary because (i) Whiskey Gulch No. 1 will be open to test or regular production of oil in the Undefined Oil Pool within 500 feet of a property line where the owners or landowners are not the same on both sides of the line (20 AAC 25.055(a)(1)), and (ii) this well will be open to test or regular production of gas in the Undefined Gas Pool within 1,500 feet of a property line where the owners or landowners are not the same on both sides of the line (20 AAC 25.055(a)(2)). Whiskey Gulch No. 1 will target unproven oil and/or gas reserves that cannot be reached by conforming to applicable statewide spacing restrictions. Hilcorp is the sole working interest owner of the affected oil and gas leases. Hilcorp has made, and is continuing to make attempts to lease all landowner owners within Whiskey Gulch Prospect. However, for a number of landowners, Hiloorp cannot locate or find heirs for, or are unwilling to participate in our exploration efforts. Hilcorp is committed to locating and contacting all landowners within the Whiskey Gulch Prospect, and offer an option to participate in Hilcorp's exploration plans. In addition to the previous attempts made by Hilcorp, a cover letter was sent along with the application notices, as required under 20 AAC 25.055(d)(1). Said cover letter restates the landowner's option to participate in Hilcorp's exploration plans (see Exhibit A). Following successful completion of Whiskey Gulch No. 1, and prior to bringing the well online, Hilcorp plans to submit to the Department of Natural Resources, Division of Oil and Gas (" DNR'), an application to form the Whiskey Gulch Unit and Initial Participating Area (" PA" ). Hilcorp understands there are complex ownerships involved in the Whiskey Gulch Field, and AOGCC is tasked with protecting all parties' correlative rights. With this in mind, Hilcorp commits to allocating production in accordance with DNB's decision regarding the Whiskey Gulch Unit and PA. Production from Whiskey Gulch No. 1 will commence only when an approved PA is in place. A copy of the decision and PA allocation schedule will be provided to AOGCC prior to production. Hilcorp also commits that all leased owners / landowners will be allocated royalties based on their tract allocation percentage, mineral ownership, and lease royalty shown on the approved PA allocation schedule. Hilcorp will establish and maintain —without cost to the non -participating owners / landowners —a single, interest -bearing escrow account (Escrow Account) for the non -participating owners / landowners. Hilcorp will provide AOGCC with documentation sufficient to show that the Escrow Account has been established and maintained in accordance with this spacing exception. For each non -participating owner / Whiskey Gulch Prospect Whiskey Gulch No. 1 Application for Spacing Exception Page 3 of 1 I landowner in a given parcel within the productive area, Hilcorp will deposit in that Escrow Account an amount equal to the total of that non -participating owner's / landowner's interest percentage (allocation percentage) for those parcels multiplied by the production attributed to those parcels for the previous month multiplied by 0.125 (royalty rate) multiplied by the prevailing value for Cook Inlet gas published for that quarter by the Alaska Department of Revenue under 15 AAC 55.173(b). As a result, the correlative rights of all affected owners, landowners and operators will be protected by approval of this spacing exception. In accordance with 20 AAC 25.055(d)(1), a copy of this application was sent via certified mail to the all affected owners and landowners within 1,000' of Whiskey Gulch No. 1's anticipated productive interval within the Undefined Oil Pool, and 3,000' of Whiskey Gulch No. 1's anticipated productive interval within the Undefined Gas Pool (see Exhibit B-1 and B-2). Copies of the certified mail receipts have also been enclosed. Hilcorp requests that Exhibit B-2 and the copies of the certified mail receipts are held confidential by AOGCC. No other affected operators or working interest owners exist. The well path of Whiskey Gulch No. 1 is located entirely on a DNR State Lease (Tract 001, ADL 392666). In accordance with 20 AAC 25.055(d)(2), a map of the location of Whiskey Gulch No. 1 and its relationship to adjoining properties, along with a tract ownership schedule, are attached to this application (see Exhibits C-1 and C-2). Hilcorp requests that Exhibits C-1 and C-2 are held confidential by AOGCC. The well's location is further indicated as follows: Surface Location • Tract 001 (100% State Mineral Ownership — ADL 392666). 0 100% Hilcorp Working Interest. 0 1,374' FSL, 1,557 FEL. o Section 23, T04S, R15W, S.M., AK. Well Path • Tract 001 (100% State Mineral Ownership — ADL 392666). 0 100% Hilcorp Working Interest. o Top Productive Horizon: • 423' FNL, 337 FWL. • Section 25, T04S, R15W, S.M., AK. o Sections 23, 25, & 26, T04S, R15W, S.M., AK. Bottom Hole Location • Tract 001 (100% State Mineral Ownership —ADL 392666). 0 100% Hilcorp Working Interest. 0 1,083' FNL, 1,021 FWL. o Section 25, T04S, R15W, S.M., AK. In accordance with 20 AAC 25.055(d)(3), an affidavit is attached to this application stating the undersigned is acquainted with the facts and verifying that all facts asserted herein are Whiskey Gulch Prospect Whiskey Gulch No. I Application for Spacing Exception Page 4 of I I true (see Exhibit D). A map of the location of Whiskey Gulch No. 1's productive horizons, showing Hilcorp's current leasehold position is shown on the attached Exhibit C-1. Hilcorp requests that Exhibit C-1 is held confidential by AOGCC. Should you have any technical questions, please contact Mr. Ben Siks, Senior Geologist, at (907) 777-8388, or you may contact the undersigned at (907) 777-8432. Sincerely, Cody T. Terrell, Landmat� Hilcorp Alaska, LLC Enclosures: Exhibit A: Copy of Cover Letter Exhibit B-1: Whiskey Gulch No. 1 Notice Areas Map Exhibit B-2: Certified Mailing List — CONFIDENTIAL Exhibit C-1: Whiskey Gulch No. 1 Well & Tract Status Map— CONFIDENTIAL Exhibit C-2: Tract Ownership Schedule — CONFIDENTIAL Exhibit D: Affidavit CC: Owners & Landowners within 1,000' (oil) and 3,000' (gas) of subject well Whiskey Gulch Prospect Whiskey Gulch No. 1 Application for Spacing Exception Page 5 of 11 EXHIBIT A Application for Spacing Exception Copy of Cover Letter Pest Boa 9 ftsLOffice 211027 AnChGaye, 240Z] 3ao0 cenlerpoint pdve Suite 1400 Mleorp Alaska, LLC An baage, AK -MO3 Rh.ne: 90Z/?]1-E132 Fax: 90]Jl]i-Ga01 Email denell$ )11!0rp.rom February 5, 2021 NOTICE OF APPLICATION AND OPTION TO PARTICIPATE STATE OF ALASKA WHISKEY GULCH PROSPECT RE: Spacing Exception and Option to Participate Whiskey Gulch No. 1 Exploration Well Wbiskey Gulch Prospect in Anchor Point Alaska DearLandowmer. Hilcorp Alaska, LLC (" Hilcorp'), as sole working interest owner of oil and gas leases covering portions of the Whiskey Gulch Prospect located in Anchor Point Alaska, by application submitted February 5, 2021, requested the Alaska Oil and Gas Conservation Commission ("AOGCC'� grant a spacing exception to drill, test, and produce the Whiskey Gulch No. 1 well in the Undefined Oil Pool within 500 feet of a property line where the landowners are not the same on both sides of the line, and in the Undefined Gas Pool within 1,500 feet of a property line where the landowners are not the same on both sides of the line, pursuant to 20 AAC 25.055(d). In accordance with 20 AAC 25.055(d)(1), Hilcorp is required to send a notice of application via certified mail to the owners, landowners, and operators within 1,000 feet of a well drilling for oil or within 3,000 feet of a well drilling for gas for which the spacing exception is sought. This letter, along with the enclosed copy of Hilcorp's application, senses as notice that your property is within 1,000 feet of Whiskey Gulch No.1's potential oil horizon, or 3,000 feet of Whiskey Gulch No. 1's potential gas horizon. Drilling operations for Whiskey Gulch No. I are expected to commence around June ln, 2021. but possibly later in the year depending on pad construction. Please see the enclosed copy of Hilcorp's application submitted to AOGCC, along with a map showing the well location in relation to your property (Exhibit B-1 of the application), for additional details. If you are receiving this letter and you have chosen to lease your property and participate in ' c 's exploration plans, no additional action is necessary. This letter is simply a notice required by the AOGCC. liil= is excited to begin its exploration program in the area. We are happy you have chosen to include your property and be a part of the evaluation effort. If you are receiving this letter and you have not yet chosen to participate in Hilcorp's exploration plans, this letter serves, yet again, as additional notice of your right and option to participate. Hilcorp has made multiple attempts to afford you the option to participate. Our attempts to contact you have either been unsuccessful, or you have chosen not to participate. Hilcorp believes your property may have productive potential. Hilcorp is Whiskey Gulch Prospect Whiskev Gulch No. I Application for Spacing Exception Page 6 of I I moving forward with plans to explore for oil and natural gas in the Whiskey Gulch Prospect area, and would appreciate the opportunity to include your property in this evaluation. If you are interested in participating in Hilcorp's exploration plans, please contact the following Hilcorp representative: Cods- T. Terrell Landman Hilcorp Alaska, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Phone: (907) 777-8432 Email: cterrell@,hilcorp.com Should you have any questions, please do not hesitate to contact me (907-777-8432) or my colleague Kevin Tabler, Land Manager, at (907) 777-8379. We would be pleased to set up a mutually convenient time to discuss the details of our plans to evaluate your property in Alaska - Sincerely, Hilcorp Alaska, LLC Enclosures: Copy of Application � U O U = L dB 33a Whiskey Gulch No. 1 SHL �aay _w Vdhiskey G ich No. 1 BHL ty :�►}��}• '. ii-'2�i �. .>_ >�.�_ uti Fes. ii a. yC7t EXHIBIT B-1 Application for Spacing Exception Whiskey Gulch No. 1 Notice Area L-O a QTo 'Np awNa Gove .O.IW SW. Lms KPB Palwl gwuM *s La�Wa+raw T.ati Boundary L J oil Zan* Nou Aroa 11000111 LJ Gas Zara Nance Ar*a i3000N1 Feet a+t 0 750 1,500 3,000 Alaska State Plane, Zone 4. NAD'7 Map Date: 2'i: 21121 Whiskey Gulch Prospect Whiskey Gulch No. I Application for Spacing Exception Page I I of I 1 EXHIBIT D Application for Spacing Exception Affidavit VERIFICATION OF APPLICATION FOR SPACING EXCEPTION COOK INLET, ALASKA WHISKEY GULCH PROSPECT Whiskey Gulch No. 1 Well 1, CODY T. TERRELL, Landman, Hilcorp Alaska, LLC ("Hilcorp"), do hereby verify the following: I am acquainted with Hilcorp's application for a spacing exception submitted to the Alaska Oil and Gas Conservation Commision for the drilling of the Whiskey Gulch No. I Well in the Whiskey Gulch Prospect, near Anchor Point, Alaska, pursuant to 20 AAC 25.055, subsections (a)(1) and (a)(2) I assert all facts outlined in the above -referenced application are true. I further assert the requested spacing exception is necessary to explore, drill, and establish new production of natural gas from undefined oil and/or gas pools in the Whiskey Gulch Prospect. I have reviewed the mailing list and plat attached to said application and it correctly portrays the pertinent and required data for the Commission to take action on this request. DATED at Anchorage. Alaska this 5th day of February 2021. STATE OF ALASKA NOTARY PUBUC Michael W. Schoetz W Corrmsslon Expires reb 28, 2022 STATE OF ALAKSA THIRD JUDICIAL DISTRICT Cody T. Terrell, Landman Hilcorp Alaska, LLC ) ss SUBSCRIBED TO AND SWORN before the this 5th day of February, 2021. �,�'// '� NOTARY PUBLIC IN AN FOR THE STATE OF ALSKA My Commission expires:csweg 2$,tcar—