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Home My WebLink AboutCO 781CONSERVATION ORDER 781 Docket Number: CO -19-022 1. November 21, 2019 Hilcorp application for spacing exception 2. November 21, 2019 Notice of public hearing, affidavit of publication, mailing list 3. ---------------------- emails INDEXES Davies, Stephen F (CED) From: Christina Twogood - (C) <ctwogood@hilcorp.com> Sent: Monday, January 27, 2020 10:31 AM To: Davies, Stephen F (CED) Cc: Ted Kramer; Schwartz, Guy L (CED); Carlisle, Samantha 1 (CED) Subject: RE: [EXTERNAL] CLU 5RD (PTD 215-160; Sundry 319-434) and CLU 1 RD (PTD 203-129; Sundry 319-581) - Spacing Question Steve, Thank you for the clarification. Hilcorp kindly requests to withdraw the Application for Spacing Exception for CLU 5RD (dated November 21, 2019) and proceed forward with the request for sundry approval (submitted September 23, 2019). Thank you, Christina Twogood Operations Engineer Kenai Asset Team, Hilcorp Alaska 3800 Centerpoint Dr., Anchorage, AK 99503 (w)907-777-8443 (c) 907-378-7323 From: Davies, Stephen F (CED) [mailto:steve.davies@alaska.gov] Sent: Friday, January 24, 2020 10:31 AM To: Christina Twogood - (C) <ctwogood@hilcorp.com> Cc: Ted Kramer <tkramer@hilcorp.com>; Schwartz, Guy L (CED) <guy.schwartz@alaska.gov>; Carlisle, Samantha 1 (CED) <samantha.carlisle@a laska.gov> Subject: RE: [EXTERNAL] CLU 5RD (PTD 215-160; Sundry 319-434) and CLU 1RD (PTD 203-129; Sundry 319-581) - Spacing Question Christina, Based upon Hilcorp's recent operations described in Sundry Report 319-581, Hilcorp's proposed Upper Tyonek (UT) 9B sand perforations in CLU SRD* will now conform to the spacing requirements of Conservation Order 231, so a spacing exception is no longer needed for before adding those proposed UT -913 perforations. If Hilcorp wishes to withdraw the Application for Spacing Exception for CLU 5 RD (dated November 21, 2019), please provide a written request to the AOGCC. Regards, 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(a)alaska.gov. Davies, Stephen F (CED) From: Davies, Stephen F (CED) Sent: Friday, January 24, 2020 10:31 AM To: Christina Twogood - (C) Cc: Ted Kramer; Schwartz, Guy L (CED); Carlisle, Samantha J (CED) Subject: RE: [EXTERNAL] CLU 5RD (PTD 215-160; Sundry 319-434) and CLU 1 RD (PTD 203-129; Sundry 319-581) - Spacing Question Christina, Based upon Hilcorp's recent operations described in Sundry Report 319-581, Hilcorp's proposed Upper Tyonek (UT) 9B sand perforations in CLU 5RD* will now conform to the spacing requirements of Conservation Order 231, so a spacing exception is no longer needed for before adding those proposed UT -96 perforations. If Hilcorp wishes to withdraw the Application for Spacing Exception for CLU 5 RD (dated November 21, 2019), please provide a written request to the AOGCC. Regards, 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.davies6�alaska.gov * See Sundry Application 319-434 Details: CO 231 Rule 3 established the Drilling Unit for the Upper Tyonek Gas Pool as a quarter -quarter subdivision of a governmental section. CLU 1RD is open to the Upper Tyonek Gas Pool in the NW/4 of NE/4 of Section 8, T5N, R11W, SM. The proposed UT -913 sand perforation operations in CLU 5RD (Sundry 319-434 ) will open the Upper Tyonek Gas Pool in the SW/4 of NE/4 of Section 8, T5N, R11W, SM. The perforation operations in CLU 5RD proposed in Sundry 319-434 will not violate Rule 3 of CO 231. From: Christina Twogood - (C) <ctwogood@hilcorp.com> Sent: Thursday, January 23, 2020 1:59 PM To: Davies, Stephen F (CED) <steve.davies@alaska.gov> Cc: Ted Kramer <tkramer@hilcorp.com>; Schwartz, Guy L (CED) <guy.schwartz@alaska.gov> Subject: RE: [EXTERNAL] CLU 5RD (PTD 215-160; Sundry 319-434) and CLU 1RD (PTD 203-129; Sundry 319-581) - Spacing Question Steve, The T-1 perforations in CLU 1RD have been successfully isolated as per Approved Sundry 319-581 (PTD 203-129). A Sundry Report demonstrating this has been submitted as of today. As such, is it now appropriate to withdraw the spacing exception and request approval of the CLU 5RD sundry to perforate the UT -96 sand? Respectfully, Christina Twogood Operations Engineer Kenai Asset Team, Hilcorp Alaska 3800 Centerpoint Dr., Anchorage, AK 99503 (w) 907-777-8443 (c) 907-378-7323 From: Christina Twogood - (C) Sent: Friday, December 20, 2019 11:20 AM To: 'Davies, Stephen F (CED)' <steve.davies@alaska.gov> Cc: Ted Kramer <tkramer@hilcorp.com>; Schwartz, Guy L (CED) <guv.schwartz@alaska.Rov> Subject: RE: [EXTERNAL] CLU 5RD (PTD 215-160; Sundry 319-434) and CLU 1RD (PTD 203-129; Sundry 319-581) - Spacing Question Thank you for the detailed explanation. We will leave the request for spacing exception in place for CLU 5RD. Thank you, Christina Twogood Operations Engineer Kenai Asset Team, Hilcorp Alaska 3800 Centerpoint Dr., Anchorage, AK 99503 (w)907-777-8443 (c) 907-378-7323 From: Davies, Stephen F (CED) [mailto:steve.davies(@alaska Rov] Sent: Thursday, December 19, 2019 4:49 PM To: Christina Twogood - (C) <ctwogood@hilcorp.com> Cc: Ted Kramer <tkramer@hilcorp.com>; Schwartz, Guy L (CED) <guy.schwartz@alaska.eov> Subject: [EXTERNAL] CLU 5RD (PTD 215-160; Sundry 319-434) and CLU 1RD (PTD 203-129; Sundry 319-581) - Spacing Question Christina, Short question, long answer CO 231 Rule 2, Definition of Pools, states in part b: "The Upper Tyonek Gas Pool is defined as the accumulation of gas occurring within the affected area in sands stratigraphically equivalent to the interval between the measured depths of 9171' and 10,831' in Cannery Loop Unit Well #1." CO 231 Rule 3, Well Spacing, states: "A Drilling Unit for the Beluga, Upper Tyonek, or Tyonek "D" Gas Pools is established as the quarter -quarter subdivision of a governmental section occurring within the affected area." Note that the well spacing requirements of CO 231 are all based on pools, not individual sands within a pool The proposed UT -5A perfs in CLU 1RD, the open T-1 perfs in CLU 1RD, the proposed UT -913 perfs in CLU 5RD, and the open 91-2 perfs in CLU 5RD all lie within the Upper Tyonek Gas Pool. The open T-1 perfs in CLU 1RD, the open 91-2 perfs in CLU 5RD, and the proposed UT -96 perfs in CLU SRD all lie within the same governmental quarter -quarter section (SW/4 of NE/4 of Section 8). According to my map, the open T-1 perfs in CLU 1RD lie very close to the quarter -quarter section boundary, but they are still inside of the SW/4 of NE/4 of Section 8. 1 missed this in the past, and a spacing exception should have been required to open the 91-2 perforations in CLU 5RD. That was my mistake. But, looking forward, Hilcorp's proposed UT -913 perfs in CLU 5RD will require a spacing exception as long as the T-1 perforations in CLU 1RD remain open. Submitting a Sundry application proposing to isolate those perforations doesn't nullify this requirement. Until AOGCC receives a Sundry Report demonstrating the T-1 perforations in CLU 1RD have been successfully isolated (are no longer open to the pool), the proposed UT -96 perfs WILL require a spacing exception. The curving wellbore trajectory of CLU 1RD places Hilcorp's proposed UT -5A perforations in a separate governmental quarter -quarter section (NW/4 of NE/4 of Section 8) from any of the Upper Tyonek Gas Pool perforations open in CLU 5RD (all located in SW/4 of NE/4 of Section 8), so those proposed UT -5A perforations in CLU 1RD will NOT require a spacing exception. Please let me know if you have any questions. Regards, 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.ddviesCtalaska gov. From: Christina Twogood - (C) <ctwoeood@hilcoro.com> Sent: Thursday, December 19, 2019 1:10 PM To: Davies, Stephen F (CED) <steve.davies@alaska gov>; Schwartz, Guy L (CED) <Kuy.schwartz@alaska ¢ov> Cc: Ted Kramer <tkramer@hilcorp.com> Subject: RE: [EXTERNAL] CLU 5RD (PTD 215-160; Sundry 319-434) - Spacing Question Steve, Since submitting the sundry to add perforations in the UT -913 in CLU 5RD, we have stopped producing from the currently open intervals in CLU iRD and have recently submitted a sundry to isolate those existing perforations and perforate the UT -5A sand. With the current non-productive status and the isolation requested in the sundry for CLU 1RD, I believe this may subsequently eliminate the requirement for a spacing exception to produce from the UT -9B in CLU SRD. If that is correct, would it be appropriate to withdraw the spacing exception and request approval of the CLU 5RD sundry? Referenced documents are attached. Thank you, STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OFADVERTISMENT. ADVERTISING ORDER NUMBER p 1 AO-08-20-OI6 FROM: AGENCY CONTACT: Jody Colombie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A.O.AGENCY PHONE: 333 West 7th Avenue 11/21/2019 907 279-1433 Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: 907 276-7542 TO PUBLISHER: SPECIAL INSTRUCTIONS: Anchorage Daily News, LLC PO Box 140147 Anchorage, Alaska 99514-0174 TYPE OF ADVERTISEMENT: W LEGAL r DISPLAY r CLASSIFIED OTHER (Specify below) DESCRIPTION PRICE CO-19-022 Initials of who re ared AO: Alaska Non -Taxable 92-600185 SIR An'1`Ii9YO10E8Fll0 W@iC:ADVER77SING ::URD441!Uf;; CP.R7IftlFD::APFDTgVfY01?:: AOGCC PU..... '1'ION WITH ATTwCHEDCdPY bl+:: 333 West 7th Avenue To[al of ABV6RTISMErvT`f(1; Anchors e, Alaska 99501 Pae I of I All Pa es $ REF Type I Number Amount Date Comments 1 PVN IVCO21795 2 AD AO-08-20-016 3 4 AMOUNT SY Act. Template PGM LCR Object FY DIST LIQ 1 20 AOGCC 3046 20 AFIN z 4 s Pumb 14 o' a Title: Purchasing Authority's Signature Telephone Number 1. A n re vi ag nam appear on all invoices and documents relating to this purchase. 2. T st is regi ed for tax free transactions under Chapter 32, IRS code. Registration number 92-73-0008 K Items are for the exclusive use of the state and not for Asa e. ...... .. .. ,.. .... . AiYlsloa Frseai Onglaa6 40 Coplee Pobtis4er (faxod PIYIss1Da Flsaal Recolndg Form: 02-901 Revised: 11/21/2019 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -19-022 The application of Hilcorp Alaska, LLC for an exception to the spacing requirements of Conservation Order No. 231 for the CLU 5RD development located in Cannery Loop Unit. Hilcorp Alaska, LLC, by letter received November 21, 2019, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirements of Conservation Order 231 to recomplete, test, and produce the CLU 5RD well in the Tyonek Gas Pool within the same governmental quarter -quarter section as one other well that is, or maybe capable of, producing from the same pool. Cannery Loop 5RD Surface Location: 171' FSL, 281' FEL, Sec. 7, T5N, RI 1W, Seward Meridian Target Location: 1921' FNL, 1609' FEL, Sec. 8, T5N, Rl l W, Seward Meridian Bottom -hole Location: 1898' FNL, 1615' FEL, Sec. 8, T5N, Rl l W, Seward Meridian The AOGCC has tentatively scheduled a public hearing on this application for January 2, 2020, at 10:00 a.m. at 333 West 7d' 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 December 12, 2019. 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 December 13, 2019. In addition, written comments regarding this application may be submitted to the AOGCC at 333 West 7' Avenue, Anchorage, Alaska 99501. Comments must be received no later than 4:30 p.m. on December 26, 2019, except that, if a hearing is held, comments must be received no later than the conclusion of the January 2, 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 December 27, 2019. i Je sie L. Chmielowski Commissioner Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 George Vaught, Jr. Darwin Waldsmith Richard Wagner P.O. Box 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639 Fairbanks, AK 99706 jq°:-' l I -a l -O mAff RECEIVLD NOV 21 2019 A.®GCC November 21, 2019 I fl Hilcorp Alaska, LLC Jeremy Price, Chair Commissioner Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 RE: Application for Spacing Exception CLU 5RD Gas Well Cannery Loop Unit, Alaska Dear Commissioner Price: Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 1400 Anchorage, AK 99503 Phone: 907/777-8432 Fax: 907/777-8301 Email: cterrell@hilcorp.com Hilcorp Alaska, LLC ("Hilcorp"), as sole working interest owner of the Cannery Loop Unit ("CLU"), requests permission to recomplete, test, and produce the CLU 5RD well in the Tyonek Gas Pool, as defined in Conservation Order 231 ("CO 231"), within the same quarter -quarter section as one (1) other Cannery Loop well producing from the same pool. In accordance with 20 AAC 25.005, Hilcorp submitted an application for a Permit to Drill the CLU 5RD well to AOGCC which was approved. Recompletion operations for CLU 5RD are expected to commence roughly on January 15`h, 2020. The CLU 5RD well recompletion will be targeting the Tyonek Gas Pool. Prior to recompletion of the CLU 5RD well within the Tyonek Gas Pool, this spacing exception will be required under CO 231, Rule 3: Rule 3. Well Spacing: A Drilling Unit for the Beluga, Tyonek, or Tyonek "D" Gas Pool is established as the quarter -quarter subdivision of a governmental section occurring within the affected area. A spacing exception is necessary because CLU 5RD will be the second well open to or producing from the Tyonek Gas Pool located in the S W4 NE4, Section 8, Township 5 North, Range 11 West. CLU 1RD is also located within the SW4 NE4, Section 8, Township 5 North, Range 11 West, and is producing or capable of producing from the Tyonek Gas Pool. The CLU 5RD well is located on the CLU No. 1 Pad within the Cannery Loop Unit. The well is located on a Hilcorp own lease, a private lease, and State lease ADL 324602 (see Attachment 1). The anticipated productive intervals are located on State lease ADL 324602. Surface Hole Location (SHL): 171' FSL, 281' FEL, Sec 7, T5N, RI 1W, SM, AK Top of Productive Horizon (TPH): 1921' FNL, 1609' FEL, Sec 8, T5N, RI 1W, SM, AK Bottom Hole Location (BHL): 1898' FNL, 1615' FEL, Sec 8, T5N, Rl l W, SM, AK The CLU 5 well was originally drilled in 1996 and completed as a dual string gas producer. The long string produced a large amount of gas from the Upper Tyonek 9B [UT -9B] sand, while the Cannery Loop Unit CLU 5RD Application for Spacing Exception November 21, 2019 Page 2 of 4 short string produced various Middle and Upper Beluga sands. The well eventually watered out in both strings. CLU 5 was sidetracked in 2015, now the CLU 5RD, with a strong emphasis on the Tyonek sands. The first successful Tyonek production in the new sidetrack was from the Deep Tyonek-5 [DT -5]. The sand produced at very high rates until watering out in May 2016. In March 2017, CLU 5RD began production in the Upper Tyonek 12 [UT -12]. The sand produced very well until production began to sharply decline in 2018 & 2019. While water rates slightly increased, the decline appears to be more a function of volumetric decline, rather than due to the water production. The next prospective gas show in CLU 5RD is the aforementioned UT -913. The new bottomhole location of the UT -913 is updip from the original CLU 5 wellbore (thus farther from the gas -water contact), as well as updip from CLU 1RD (which very recently watered out in the UT -913). No well at Cannery Loop is currently producing from the UT -913. Hilcorp would like to produce this sand in CLU-5RD to capture any remaining recoverable reserves. Hilcorp is the sole working interest owner of the affected oil and gas leases and the Cannery Loop Unit. The only affected landowners within the applicable quarter -quarter sections of CLU 5RD's anticipated productive interval is the State of Alaska. Hilcorp believes that the correlative rights of all owners and landowners within the Tyonek Gas Pool will be protected by the Cannery Loop Unit Agreement and its corresponding Participating Areas. At the date of this mailing, a copy of this proposed spacing exception was sent by certified mail to the potentially affected (within 3000') owners, landowners and operators. The only affected parties are the State of Alaska and Hilcorp Alaska, LLC. Also, enclosed is an affidavit stating the undersigned is acquainted with the facts and verifying that all facts asserted herein are true (see Attachment 2). Should you have any technical questions, please contact Mr. Anthony McConkey, Reservoir Engineer at (907) 777-8460, or you may contact the undersigned at (907) 777-8432. Sincerely, Cody T. Terrell, LZ an� Hilcorp Alaska, LLC Enclosures: Attachment 1 (CLU 5RD Well Map); Attachment 2 (Affidavit) CC: Jody Colombie, AOGCC (via email) Cannery Loop Unit CLU 5RD Application for Spacing Exception November 21, 2019 Page 3 of 4 ATTACHMENT 1 Application for Spacing Exception CLU 5RD Well Map 0 1.000 2.000 Cannery Loop Unit Feet CLU-5RD Well aasw,State alz�z�a MD27 A �aG,.i_rr Definitive Survey utapo�:nanrzme Cannery Loop Unit CLU 5RD Application for Spacing Exception November 21, 2019 Page 4 of 4 ATTACHMENT Application for Spacing Exception Affidavit VERIFICATION OF APPLICATION FOR SPACING EXCEPTION COOK INLET, ALASKA CANNERY LOOP UNIT CLU 5RD Well I, 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 CLU 5RD well in the Cannery Loop Unit, near Cook Inlet, Alaska, pursuant to 20 AAC 25.055(d). I assert all facts outlined in the above -referenced application are true. I further assert the requested spacing exception is necessary to drill and develop existing production of natural gas from the Tyonek Gas Pool in the Cannery Loop Unit. 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 2151 day of November 2019. Cody T. Terrell, Landman Hilcorp Alaska, LLC STATE OF ALAKSA ) ) ss THIRD JUDICIAL DISTRICT ) SUBSCRIBED TO AND SWORN before me this 21" day of November, 2019. STATE OF ALASKA NOTARY PUBLIC Michael W Schoetz My Commission Expires Feb 28, 2022 �li�/� 5; z NOTARY PUBLIC IN AND FOR THE STATE OF ALSKA My Commission expires: �;",g ze,2o� Reseipt(h"Wpy) $ {ixNPt (electronic) $ Postmark tl Mal Resta dD IWN $ Ignamm RWMd $ Hem ,,,/// � ' / dge tm Rmestr delivery $ ` f