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Home My WebLink AboutCO795Conservation Order 795 Ivan River Unit 241-01 1. September 23, 2021 Application for Spacing Exception for Ivan River Unit (IRU) 241-01 2. September 27, 2021 Notice of Public Hearing, Affidavit, and Email List 3. September 27, 2021 Emails between Hilcorp and AOGCC STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC for a spacing exception to drill, complete, test, and produce the proposed Ivan River Unit 241-01 well in the Ivan River Undefined Gas Pool within the Ivan River Field. ) ) ) ) ) ) ) ) Docket Number: CO-21-017 Conservation Order 795 Ivan River Unit 241-01 Development Gas Well Kenai Peninsula Borough, Alaska November 1, 2021 IT APPEARING THAT: 1. By letter dated September 23, 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 to drill, complete, test, and produce the proposed Ivan River Unit 241-01 (IRU 241-01) development gas well within the Ivan River Undefined Gas Pool, in the Ivan River Unit where more than one well will be drilled to and completed in the same pool in the same governmental section, and where a well will be drilled or completed closer than 3,000 feet to any well drilling to or capable of producing from the same pool. 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for October 28, 2021. On September 27, 2021, the AOGCC published notice of the opportunity for that hearing on the State of Alaska’s Online Public Notice website and on the AOGCC’s website, electronically transmitted the notice to all persons on the AOGCC’s email distribution list and mailed printed copies of the notice to all persons on the AOGCC’s mailing distribution list. On September 28, 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 properties within 3,000 feet of the IRU 241-01 well and provided the notice, addresses to which the notices were delivered, and certified mail receipts to AOGCC. 4. No comments or objections were received by the AOGCC. 5. No request for a public hearing was received. The tentatively scheduled public hearing was vacated on October 25, 2021. 6. Hilcorp’s application provided sufficient information upon which to make an informed decision on its request. CO 795 November 1, 2021 Page 2 of 3 PURPOSE AND NEED FOR THIS ORDER: Well spacing regulations protect the oil and gas rights of adjacent landowners and maximize resource recovery by establishing default limits on how close, under the land's surface, oil and gas wells can be to each other and to property lines where ownership changes hands. These limits are set forth in a regulation, 20 AAC 25.055. Operators must abide by the default well spacing limits (referred to as statewide spacing requirements) unless they apply for, and obtain, an exception to those limits. Although exceptions to the default well spacing requirements are not unusual, AOGCC carefully evaluates each application, and typically grants them only when actual geologic conditions demonstrate that the proposed subsurface location of a well is necessary to reach otherwise unreachable oil or gas and that both the rights of adjacent landowners and underground drinking water can be protected. As a general matter, AOGCC does not have extensive authority over surface impacts such as noise, emissions, or construction. FINDINGS: 1. Hilcorp is the operator for the proposed onshore IRU 241-01 well located within Kenai Peninsula Borough, Alaska. This well will be directionally drilled toward the north from a surface location in Section 1, T13N, R9W, Seward Meridian (S.M.). Surface Location: 596’ FSL, 582’ FEL, Section 01, T13N, R09W, S.M. Top of Productive Horizon: 1,689 FNL, 1,763’ FEL, Section 01, T13N, R09W, S.M. Bottom-hole Location: 32’ FNL, 404’ FEL, Section 01, T13N, R09W, S.M. 2. IRU 241-01 will lie entirely within Alaska State Lease ADL032930. The Alaska Department of Natural Resources is landowner for this lease. Hilcorp owns 100% working interest in the lease and in the Ivan River Unit. Hilcorp is operator for the lease and unit. 3. Pool Rules have not been established for Ivan River Field. 4. IRU 241-01 targets unproven gas reserves that cannot be reached by conforming to applicable statewide spacing regulations because of the narrow, discontinuous, and lenticular nature of the reservoir sands and their most prospective locations on the subsurface structure. 5. As planned, IRU 241-01 will develop untapped Sterling and Beluga reservoirs. 6. All past production from Ivan River Field has been from gas reservoirs within the Tertiary-aged Sterling, Beluga and Tyonek Formations (listed in descending stratigraphic order). Production from the Sterling and Beluga reservoirs in IRU 241-01 will be assigned to the Ivan River Undefined Gas Pool. 7. A spacing exception is required to complete, test, and produce IRU 241-01 because it will be the seventh well open to the same undefined gas pool in governmental Section 1, and it will lie within 3,000 feet of five other wells producing, or capable of producing, from the same pool. CO 795 November 1, 2021 Page 3 of 3 8. If operated as required, drilling, testing, completion, and regular production of IRU 241-01 will not cause waste or result in an increased risk of fluid movement into freshwater. CONCLUSIONS: 1. An exception to the well spacing provisions of 20 AAC 25.055 is necessary to allow drilling, testing, completion, and regular production of the Ivan River Undefined Gas Pool in the IRU 241-01 development well in order to maximize ultimate resource recovery. 2. Granting an exception to the well spacing provisions of 20 AAC 25.055 for IRU 241-01 will not result in 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. NOW THEREFORE IT IS ORDERED: The AOGCC grants Hilcorp’s September 23, 2021, application for an exception to the well spacing provisions of 20 AAC 25.055 to allow drilling, testing, completion, and regular production of the IRU 241-01 development gas well within the Ivan River Undefined Gas Pool. Hilcorp may proceed and must comply with all applicable laws and all other legal requirements. DONE at Anchorage, Alaska and dated November 1, 2021. Jeremy M. Price Daniel T. Seamount, Jr. Jessie L. Chmielowski Chair, Commissioner Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Dan Seamount Digitally signed by Dan Seamount Date: 2021.11.01 09:48:16 -08'00' Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2021.11.01 10:08:05 -08'00' Jeremy Price Digitally signed by Jeremy Price Date: 2021.11.01 10:48:37 -08'00' From:Cody Terrell To:Davies, Stephen F (CED) Cc:Salazar, Grace (CED) Subject:Re: [EXTERNAL] RE: IRU 241-01 Well Spacing Exception Application Date:Monday, September 27, 2021 10:47:03 AM This is state land, unleased so it wasn’t colored. Sent from my iPhone On Sep 27, 2021, at 10:35 AM, Davies, Stephen F (CED) <steve.davies@alaska.gov> wrote: Cody, Maybe I’ve overlooked something: Who is the landowner for the SW1/4 of the SW1/4 of Governmental Section 1 -- shown as the white square in the screen capture below – a corner of which lies just inside within the 3000’ notification area for the IRU 241-01 spacing exception application? Was this landowner sent a copy of Hilcorp’s notification via certified mail? Please let me know if I can help further. Thanks and be well, Steve Davies AOGCC CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Steve Davies at 907-793-1224 or steve.davies@alaska.gov. <image001.png> From: Cody Terrell <cterrell@hilcorp.com> Sent: Thursday, September 23, 2021 3:35 PM To: Salazar, Grace (CED) <grace.salazar@alaska.gov> Cc: Davies, Stephen F (CED) <steve.davies@alaska.gov> Subject: RE: [EXTERNAL] RE: IRU 241-01 Well Spacing Exception Application Here you go Grace! Regards, Cody T. Terrell Landman Hilcorp Alaska, LLC Direct: 907-777-8432 Cell: 713-870-4532 From: Salazar, Grace (CED) <grace.salazar@alaska.gov> Sent: Thursday, September 23, 2021 3:23 PM To: Cody Terrell <cterrell@hilcorp.com> Cc: Davies, Stephen F (CED) <steve.davies@alaska.gov> Subject: [EXTERNAL] RE: IRU 241-01 Well Spacing Exception Application Hi Cody, To ensure we have adequate record in the docket, could you please resend the certified mail receipt tracking number, showing the name and mailing address of the recipient? Grace From: Cody Terrell <cterrell@hilcorp.com> Sent: Thursday, September 23, 2021 3:04 PM To: Salazar, Grace (CED) <grace.salazar@alaska.gov> Subject: Re: IRU 241-01 Well Spacing Exception Application Grace, The certified mailing was sent with tracking number 70210950000163256342. Sent from my iPhone On Sep 23, 2021, at 2:14 PM, Cody Terrell <cterrell@hilcorp.com> wrote: Grace, Attached to this email is Hilcorp Alaska, LLC’s spacing exception application for IRU 241-01 in the Ivan River Field. Notice has been sent via certified mail to all landowners within 3,000’ of the wellbore (State of Alaska, DNR). A copy of the receipt of certified mailing will be sent to you ASAP. Regards, Cody T. Terrell | Landman | Hilcorp Alaska, LLC O: 907-777-8432 | C: 713-870-4532 | cterrell@hilcorp.com 3800 Centerpoint Dr., Suite 1400 | Anchorage | Alaska | 99503 This email may contain confidential and / or privileged information and is intended for the recipient(s) only. In the event you receive this message in error, please notify me and delete the message. <0455_001.pdf> <Ivan River Unit Ex B legals eff 5-1-2013 updated 3-1-2016.pdf> <IRU_241-01_SpacingExc.pdf> The information contained in this email message is confidential and may be legally privileged and is intended only for the use of the individual or entity named above. If you are not an intended recipient or if you have received this message in error, you are hereby notified that any dissemination, distribution, or copy of this email is strictly prohibited. If you have received this email in error, please immediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete this message. While all reasonable care has been taken to avoid the transmission of viruses, it is the responsibility of the recipient to ensure that the onward transmission, opening, or use of this message and any attachments will not adversely affect its systems or data. No responsibility is accepted by the company in this regard and the recipient should carry out such virus and other checks as it considers appropriate. The information contained in this email message is confidential and may be legally privileged and is intended only for the use of the individual or entity named above. If you are not an intended recipient or if you have received this message in error, you are hereby notified that any dissemination, distribution, or copy of this email is strictly prohibited. If you have received this email in error, please immediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete this message. While all reasonable care has been taken to avoid the transmission of viruses, it is the responsibility of the recipient to ensure that the onward transmission, opening, or use of this message and any attachments will not adversely affect its systems or data. No responsibility is accepted by the company in this regard and the recipient should carry out such virus and other checks as it considers appropriate. The information contained in this email message is confidential and may be legally privileged and is intended only for the use of the individual or entity named above. If you are not an intended recipient or if you have received this message in error, you are hereby notified that any dissemination, distribution, or copy of this email is strictly prohibited. If you have received this email in error, please immediately notify us by return email or telephone if the sender's phone number is listed above, then promptly and permanently delete this message. While all reasonable care has been taken to avoid the transmission of viruses, it is the responsibility of the recipient to ensure that the onward transmission, opening, or use of this message and any attachments will not adversely affect its systems or data. No responsibility is accepted by the company in this regard and the recipient should carry out such virus and other checks as it considers appropriate. Notice of Public Hearing and Comment Period STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION RE: Docket No. CO 21-017 The application of Hilcorp Alaska, LLC for a spacing exception to drill the Ivan River Unit 241-01 well in the Ivan River Undefined Gas Pool within the Ivan River Field, Cook Inlet Basin. Hilcorp Alaska, LLC (Hilcorp), by letter dated September 23, 2021, requested the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order approving an exception to Regulation 20 AAC 25.055(a)(4) to allow drilling, testing, completing, and regular production of the Ivan River Unit 241-01 development gas well within the Ivan River Undefined Gas Pool, Ivan River Unit, Ivan River Field, Cook Inlet Basin. Well spacing regulations protect the oil and gas rights of adjacent landowners and maximize resource recovery by establishing default limits on how close, under the land's surface, oil and gas wells can be to each other and to property lines where ownership changes hands. These limits are set forth in a regulation, 20 AAC 25.055. Operators must abide by the default well spacing limits (referred to as statewide spacing requirements) unless they apply for, and obtain, an exception to those limits. Although exceptions to the default well spacing requirements are not unusual, AOGCC carefully evaluates each application, and typically grants them only when actual geologic conditions demonstrate that the proposed subsurface location of a well is necessary to reach otherwise unreachable oil or gas and that both the rights of adjacent landowners and underground drinking water can be protected. As a general matter, AOGCC does not have extensive authority over surface impacts such as noise, emissions, or construction. This notice does not contain all the information filed by Hilcorp. You may obtain more information about this filing by contacting the AOGCC’s Special Assistant, Grace Salazar, at (907) 793-1221 or grace.salazar@alaska.gov. The AOGCC has scheduled a virtual public hearing on this matter for Thursday, October 28, 2021, at 11:00 a.m. via MS Teams. The audio call-in information is (907) 202-7104, conference ID no. 194 041 278#. Anyone who wishes to participate remotely using MS Teams video conference should contact Ms. Salazar at least two business days before the scheduled public hearing to request an invitation for the MS Teams. Please note, the hearing will be held if AOGCC receives written request by 4:30 p.m., October 21, 2021, indicating a significant degree of public interest. 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 or visit the AOGCC Events webpage after October 21, 2021. To comment on Hilcorp’s application, please file your comments by the conclusion of the October 28th hearing at the AOGCC address given above or via: Email: aogcc.customer.svc@alaska.gov Fax: (907) 276-7542 Online: State of Alaska Public Notices System (use the “comment” link). Individuals or groups of people with disabilities who require special accommodations to comment or participate in the hearing should contact Ms. Salazar at (907) 793-1221, no later than October 25, 2021. Jeremy M. Price Chair, Commissioner Jeremy Price Digitally signed by Jeremy Price Date: 2021.09.27 12:55:46 -08'00'