The URL can be used to link to this page

Home My WebLink AboutO 188Other Order 188 Docket No: OTH-21-037 Prudhoe Bay Unit H-24A 1. October 4, 2021 AOGCC request for more information about a Defeated Safety Valve System, Safety Valve Test Report attached 2. October 26, 2021 Notification of proposed enforcement action per 20 AAC 25.535 (b)(1) and 20 AAC 25.353 (b)(2) 3. November 02, 2021 Hilcorp’s response to information request from 10/04/2021 4. November 08, 2021 Hilcorp’s request for AOGCC to reconsider levying the penalty amount 5. ---------------- Emails between AOGCC and Hilcorp 6. November 12, 2021 Civil penalty payment check to AOGCC 7. December 7, 2021 Hilcorp’s response to information request from 11/30/2021 ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Defeated Well Safety Valve System ) Other Order 188 PBU H-24A (PTD 2071330) ) Docket Number: OTH-21-037 ) November 30, 2021 DECISION AND ORDER On October 26, 2021 the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action to Hilcorp North Slope LLC (Hilcorp) for violating the provisions of 20 AAC 25.265 and 20 AAC 25.300 while performing production operations at Prudhoe Bay Unit (PBU) H-24A. The Notice proposed a specific corrective action and civil penalties1 under AS 31.05.150(a). Summary of Proposed Enforcement Action: AOGCC issued a Notice of Violation (NOV) to Hilcorp for a defeated safety valve system at PBU H-24A requesting, within 14 days after receipt, an explanation of how the event happened and what has or will be done in the future to prevent its recurrence at Hilcorp-operated fields. AOGCC followed up with a notice of proposed enforcement (Notice) that included civil penaltiesfor failing to respond. Violation – Defeated Safety Valve System and Failure to Provide Information: On September 27, 2021, an AOGCC Inspector found PBU H-24A with the safety valve system’s low-pressure detection device defeated, preventing the automatic closure of the surface safety valve. A NOV was issued on October 4, 2021 by electronic mail. When Hilcorp did not respond, AOGCC issued the Notice on October 26, 2021 sent by certified mail for failing to respond to the NOV. Hilcorp acknowledged receipt of the Notice in an email dated November 2, 2021. Hilcorp has not requested informal review or a hearing regarding the alleged violations. Mitigating Circumstances: The factors in AS 31.05.150(g) were considered in determining the appropriate penalty. Notable in establishing the penalty are the critical role of the SVS device that was defeated, Hilcorp’s substantial history of noncompliance, and need to deter similar behavior. While Hilcorp notes that it conducted an internal investigation, no details have been shared that would point to a root cause for the defeated critical well SVS at PBU H-24A and how long it was defeated before being discovered by an AOGCC Inspector. Hilcorp has not provided any information to change the initial penalty for the defeated well safety valve and states it will not contest the $10,000 initial penalty for a defeated SVS. In the November 2, 2021 response Hilcorp stated that it has “no record of the initial letter dated October 4, 2021” (NOV) and that it is looking into why it was not received. In a November 8, 2021 letter Hilcorp reiterated that it has not found the initial NOV after searching electronic and paper files. Hilcorp requested AOGCC reconsider the $2000 per-day assessment. 1 $10,000 for the defeated safety valve system and $2000 per day until the requested information in the October 4, 2021 notice of violation is received by AOGCC. Other Order 188 November 30, 2021 Page 2 of 2 Findings and Conclusions: The AOGCC finds that Hilcorp violated 20 AAC 25.265 at PBU H-24A by failing to maintain a functional well safety valve system. Hilcorp’s request to reconsider the per-day assessment is accepted. AOGCC notes Hilcorp’s claim that an internal investigation was performed is unsupported by anydetails, including a root cause analysis that identifiesthe cause for the defeated critical well SVS. AOGCC questions the effectiveness of Hilcorp’s reliance on disciplinary action against those involved with the PBU H-24A SVS maintenance as a means to prevent a recurrence of this violation, especially in light of corrective actions that Hilcorp claimed it would implement in response to previous SVS-related violations. Further, Hilcorp has not adequately addressed AOGCC’s request for information about what has or will be done in the future to prevent its recurrence. Now Therefore It Is Ordered That: Hilcorp is assessed a civil penalty in the amount of $10,000 for violating 20 AAC 25.265. Within 10 days of the date of AOGCC’s final decision, Hilcorp shall provide a written investigation report (length of time the safety valve system component was defeated and the root cause for violation), and a detailed written explanation that describes how it intends to prevent recurrence of this violation as requested in the October 4, 2021 NOV. As an Operator involved in an enforcement action, Hilcorp is required to preserve documents concerning the above action until after resolution of the proceeding. Done at Anchorage, Alaska and Dated November 30, 2021. Jessie L. Chmielowski Daniel T. Seamount, Jr. Commissioner Commissioner cc: AOGCC Inspectors Phoebe Brooks (AOGCC) 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. Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2021.11.30 15:06:33 -09'00' Dan Seamount Digitally signed by Dan Seamount Date: 2021.11.30 15:12:14 -09'00' 1 Carlisle, Samantha J (OGC) From:Carlisle, Samantha J (OGC) Sent:Tuesday, November 30, 2021 3:17 PM To:AOGCC_Public_Notices Subject:Other Order 188 (Defeated Well SVS, PBU, Hilcorp) Attachments:other188.pdf Re: Defeated Well Safety Valve System, PBU H-24A (PTD 2071330) Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 Mailed 11/30/21 SJC INDEXES 7 Hilcorp North Slope, LLC Stan Golis, PBW Operations Manager 3800 Centerpoint Dr, Suite 1400 Anchorage, Alaska 99503 12/07/2021 Jeremy M. Price, Chair Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, Alaska 99501 Subject: Other Order 188: Docket OTH-21-037: Defeated Safety Valve System for PBU H-24A (PTD# 207133), Hilcorp North Slope, LLC. Dear Chairman Price, Please see below for information requested per Other Order 188 dated 11/30/2021 in regards to Docket OTH-21-037 for PBU H-24A (PTD# 207133) defeated safety valve system incident on 9/27/2021. Event Summary: Well H-24A was POP’d on 9/20/2021, the well reached stabilized production and the Safety Valve System (SVS) was tested on 9/27/2021. During SVS testing on 9/27/2021, H-24A was found to have the low-pressure pilot blocked, defeating the SVS. The operator initially attempted to trip the pilot, but the SSV would not cycle closed. Upon investigation the pilot bypass switch on the wellhouse wall was found to be in bypass. The switch was returned to normal service and the system was successfully tested. Investigation Details: Length of time device was defeated: Recent timeline of events leading to discovery of bypassed pilot on H-24A on 9/27/2021: o 3/14/2021: Routine SVS test passed. Well is online. o 7/10/2021: DHD performed warm TIFL. Well remained online for test. o 7/31/2021: DHD performed warm TIFL. Well was shut-in for this work. SVS system was not manipulated by DHD. o 7/31/2021: Operations placed well on production (POP’d) well after DHD work was complete. Flowline pressure did not drop below 980 psi, therefore the pilot did not trip. SVS was not placed in bypass to bring the well back online. o 8/10/2021: Well shut-in. Slickline rigged up on the well for interventions operations. Well remained shut-in after the work was completed. SVS bypassed for remote panel used by slickline during operations. Well left shut-in. o 9/20/2021: Well POP'd. SVS system bypassed for initial POP to LP header. o Flowline at 240 psi. o 9/27/2021: SVS system tested and pilot found bypassed. During the warm TIFL on 7/31/2021, DHD would not have manipulated the SVS as part of their work. The flowline pressure never dropped below 980 psi during the TIFL nor when the well was brought back online afterwards. Due to this the pilot would not have tripped due to the pilot set point being at 550 psi. This provides evidence that the SVS would not have been bypassed on 7/31/2021. By Samantha Carlisle at 3:45 pm, Dec 07, 2021 The SVS would have been defeated when slickline was rigged up on the well on 8/10/2021 as part of the standard downhole work process. After the work on 8/10/2021 was completed the well was shut-in and remained offline until it was POP’d on 9/20/2021. It is likely that the SVS remained in the bypassed state after the 8/10/2021 work as the well was shut-in and this is permissible under AOGCC regulations and common practice. The well was then brought online again on 9/20/2021 at which time the SVS would have been left in a bypassed state during the initial POP to the ~200psi LP header for kickoff. Once the well had built pressure above the LPS set point of 550 psi, we failed to normalize the SVS. The well then flowed until 9/27/2021. Probable timeframe the SVS was defeated: 8/10-9/27/2021= 48 days- Total time SVS was defeated 9/20-9/27/2021= 7 days- SVS defeated while the well was flowing Root cause of the violation: When H-24A SVS was found to be bypassed on 9/27/2021 the lead operator noted that the custody seal on the bypass switch was not present as it should have been if it was in the normalized position (Section 6 of the Hilcorp PBU Well Integrity Practice). It was also noted at the time that the red light on the panel indicating that the system was in bypass was not functioning (Figure 1, 2, 3). For the pilot to be left in this state the well must not have been correctly normalized during the most recent POP on 9/20/21. In the seven days after POP, the defeated system was not recognized in part due to the non-functioning bypass indicator light. Based on a 5-Whys (Appendix 1) review of the incident the root causes of the violation were found to be: Inadequate training / Lack of focus: - Lack of understanding of SVS function and inspection requirements by the night operator. - Lack of awareness of missing custody seal on bypass by night operator. Inadequate implementation of procedure: - Lack of verification of normalized SVS once well was placed on production by day operator. - Bypass indicator light was left not functioning as a false visual queue Actions to prevent recurrence: x Safety Bulletin about incident and non-functioning bypass light to be distributed across the Hilcorp North Slope fields and reviewed with pad operators by 1/7/2022. x Implement increased SVS training frequency from every 2 years to annually. x Update WOA well POP and SVS defeat procedures and redistribute to the field. x Field-wide P-Pilot bypass light function check to be completed by 12/17/2021. x Field-wide SVS custody seal inspection to be completed by 12/17/2021. If you have any questions, please call me at 907-777-8356 or Oliver Sternicki at 907-564-4891. Sincerely, Stan Golis PBW Operations Manager Digitally signed by Stan Golis (880) DN: cn=Stan Golis (880), ou=Users Date: 2021.12.07 15:25:09 -09'00' Stan Golis (880) Figure 1: Bypass switch as found on 9/27/2021. Switch in "Bypass", indicator light not functioning, custody seal not in place. Figure 2: Bypass switch indicator light functioning normally after bulb was replaced. Figure 3: Bypass switch normalized condition with custody seal in place. Appendix 1: 5-Why Tree Diagram Uj Hilcorp North Slope, LLC P.O.Box 61529 Houston TX 77208-1529 Owner: 40012563 Check Date: 11109/2021 1 Check Number: 44006607 D00 A . p' D Invas t;e l to Dl t it "ht f%tet Arrlb t; 1900032788 11/08/2021 110821 EI NOV 12 2021 A®GCC wc $10,000.00 THIS CHECK IS PRINTED ON CHEMICALLY REACTIVE PAPER THAT HAS VISIBLE FIBERS AND A WATERMARK -HOLDTO LIGHTTO VIEW AMEGY BANK 35-1058 1131 Hilcorp North Slope, LLC P.O.Box 61529 Houston TX 77208-1529 PAY Ten Thousand Dollars And Zero Cents Void After 90 Days Check No Check Date Check Amount 44006607 11/09/2021 *****$10,000.00 To STATE OF ALASKA THE AOGCC ORDER 333 WEST 7TH AVE OF ANCHORAGE AK 99501-3539 Authorized Signature 11'4400660711' 0:113 L LO5861: 04444 1339311' 1 Carlisle, Samantha J (OGC) From:Davie Kelley <dkelley@hilcorp.com> Sent:Wednesday, November 3, 2021 11:13 AM To:Carlisle, Samantha J (CED) Subject:RE: [EXTERNAL] RE: Documentation Request PBU H-24A Samantha, Thank you so much for the information. From: Carlisle, Samantha J (CED) <samantha.carlisle@alaska.gov> Sent: Wednesday, November 3, 2021 10:44 AM To: Davie Kelley <dkelley@hilcorp.com> Subject: RE: [EXTERNAL] RE: Documentation Request PBU H‐24A No, regular USPS mail. From: Davie Kelley <dkelley@hilcorp.com> Sent: Wednesday, November 3, 2021 10:41 AM To: Carlisle, Samantha J (CED) <samantha.carlisle@alaska.gov> Subject: Re: [EXTERNAL] RE: Documentation Request PBU H‐24A But not certifed? Get Outlook for iOS From: Carlisle, Samantha J (CED) <samantha.carlisle@alaska.gov> Sent: Wednesday, November 3, 2021 10:23:09 AM To: Davie Kelley <dkelley@hilcorp.com> Subject: RE: [EXTERNAL] RE: Documentation Request PBU H‐24A A hard copy was sent regular USPS mail as well. From: Davie Kelley <dkelley@hilcorp.com> Sent: Wednesday, November 3, 2021 10:21 AM To: Carlisle, Samantha J (CED) <samantha.carlisle@alaska.gov> Subject: RE: [EXTERNAL] RE: Documentation Request PBU H‐24A There was no physical letter sent to the office just an email? From: Carlisle, Samantha J (CED) <samantha.carlisle@alaska.gov> Sent: Wednesday, November 3, 2021 10:17 AM To: Davie Kelley <dkelley@hilcorp.com> Subject: [EXTERNAL] RE: Documentation Request PBU H‐24A Hi Davie, Attached is the delivery message from Outlook, as that is how the first letter was sent. Please let me know if you need anything else. 2 Thank you, Samantha Carlisle Executive Secretary III Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 (907) 793-1223 From: Davie Kelley <dkelley@hilcorp.com> Sent: Wednesday, November 3, 2021 10:12 AM To: Paladijczuk, Tracie L (CED) <tracie.paladijczuk@alaska.gov> Subject: FW: Documentation Request PBU H‐24A Hi Tracie, Here is the documentation we received on October 28th. In this letter it states that AOGCC tried to notify Hilcorp on October 4th of the violation. Do you have the certified tracking number for that notice? Thank you, Davie Kelley | Office Coordinator | Hilcorp Alaska, LLC O: 907-777-8553 | C: 907-538-5576 | dkelley@hilcorp.com 3800 Centerpoint Dr., Ste 1400 | Anchorage | AK | 99503 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, By Samantha Carlisle at 10:46 am, Nov 08, 2021 1 Carlisle, Samantha J (OGC) From:Price, Jeremy M (CED) Sent:Monday, November 8, 2021 10:41 AM To:Carlisle, Samantha J (CED); Chmielowski, Jessie L C (CED); Seamount, Dan T (CED); Ballantine, Tab A (LAW); Regg, James B (CED) Subject:FW: AOGCC letter re Docket Number: OTH-21-037 Attachments:0654_001.pdf From: Stan Golis <sgolis@hilcorp.com> Sent: Monday, November 8, 2021 10:20 AM To: Price, Jeremy M (CED) <jeremy.price@alaska.gov> Cc: Denali Kemppel <dkemppel@hilcorp.com> Subject: AOGCC letter re Docket Number: OTH‐21‐037 Commissioner Price, Please find attached a letter re Docket Number OTH‐21‐037. Hilcorp respectfully submits this letter to the AOGCC with some additional facts surrounding the delivery and receipt of the original Notice of Violation. We plan to pay the $10,000 civil penalty. Please let me know AOGCC’s thoughts on the civil penalty due for failure to provide the requested information. I am happy to discuss anything related to this matter at your convenience. Best regards, Stan 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. By Samantha Carlisle at 3:36 pm, Nov 02, 2021 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov October 26, 2021 CERTIFIED MAIL – RETURN RECEIPT REQUESTED 7015 0640 0003 5185 6830 Mr. Stan Golis Senior Operations Manager Hilcorp North Slope, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Docket Number: OTH-21-037 Notice of Proposed Enforcement Defeated Safety Valve System PBU H-24A (PTD 2071330) Dear Mr. Golis: Pursuant to 20 AAC 25.535, the Alaska Oil and Gas Conservation Commission (AOGCC) hereby notifies Hilcorp North Slope LLC (Hilcorp) of a proposed enforcement action. Nature of the Apparent Violation or Noncompliance (20 AAC 25.535(b)(1)). Hilcorp has violated the provisions of 20 AAC 25.265 and 20 AAC 25.300 while performing production operations at Prudhoe Bay Unit (PBU) H-24A. Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)). The AOGCC witnessed performance testing of well safety valve systems at PBU H-pad on September 27, 2021. Well H-24A was found with the safety valve system’s low-pressure detection device defeated, preventing the automatic closure of the surface safety valve. AOGCC regulation 20 AAC 25.265 requires a completed well to be equipped with a functional safety valve system. Paragraph (m) establishes tagging procedures for a well safety valve system component that is inoperable, removed or blocked. There was no tag observed on Prudhoe Bay Unit H-24A that would indicate an inoperable low-pressure pilot. Per 20 AAC 25.300, if AOGCC requests information or documentation regarding a matter within the its jurisdiction, that person must provide the requested information and documentation within the AOGCC-specified timeframe. AOGCC records indicate Hilcorp received the notice of Docket Number: OTH-21-037 Notice of Proposed Enforcement October 26, 2021 Page 2 of 2 violation on October 4, 2021 which included a request to provide – within 14 days of receipt of the notice of violation – an explanation of how the event happened and what has or will be done in the future to prevent its recurrence at Hilcorp-operated fields. The due date for Hilcorp’s response was October 18, 2021. Hilcorp failed to respond to AOGCC’s request. Proposed Action (20 AAC 25.535(b)(3)). For violating 20 AAC 25.265 (failing to maintain a functional safety valve system) the AOGCC intends to impose a civil penalty on Hilcorp under AS 31.05.150(a) in the amount of $10,000. For violating 20 AAC 25.300 (failing to provide the requested information) the AOGCC intends to impose a civil penalty on Hilcorp under AS 31.05.150(a) in the amount of $2,000 per day until the requested information in the October 4, 2021 notice of violation is received by AOGCC. Rights and Liabilities (20 AAC 25.535(b)(4)) Within 15 days after receipt of this notification – unless the AOGCC, in its discretion, grants an extension for good cause shown – Hilcorp may file with the AOGCC a written response that concurs in whole or in part with the proposed action described herein, requests informal review, or requests a hearing under 20 AAC 25.540. If a timely response is not filed, the proposed action will be deemed accepted by default. If informal review is requested, the AOGCC will provide Hilcorp an opportunity to submit documentary material and make a written or oral statement. If Hilcorp disagrees with the AOGCC’s proposed decision or order after that review, it may file a written request for a hearing within 10 days after the proposed decision or order is issued. If such a request is not filed within that 10-day period, the proposed decision or order will become final on the 11th day after it was issued. If such a request is timely filed, the AOGCC will hold its decision in abeyance and schedule a hearing. If Hilcorp does not concur with the proposed action described herein, and the AOGCC finds that Hilcorp violated a provision of AS 31.05, 20 AAC 25, or an AOGCC order, permit or other approval, then the AOGCC may take any action authorized by the applicable law including ordering one or more of the following: (i) corrective action; (ii) suspension or revocation of a permit or other approval; and (iii) imposition of penalties under AS 31.05.150. In taking action after an informal review or hearing, the AOGCC is not limited to ordering the proposed action described herein, as long as Hilcorp received reasonable notice and opportunity to be heard with respect to the AOGCC’s action. Any action described herein or taken after an informal review or hearing does not limit the action the AOGCC may take under AS 31.05.160. Sincerely, Jeremy M. Price Chair, Commissioner cc: Phoebe Brooks Jeremy Price Digitally signed by Jeremy Price Date: 2021.10.26 14:16:30 -08'00' Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.govOctober 4, 2021 Mr. Stan Golis Senior Operations Manager Hilcorp North Slope, LLC 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Re: Docket Number: OTH-21-037 Defeated Safety Valve System PBU H-24A (PTD 2071330) Dear Mr. Golis: On September 27, 2021 an Alaska Oil and Gas Conservation Commission (AOGCC) Inspector witnessed safety valve system tests performed by Hilcorp North Slope LLC (Hilcorp) at the Prudhoe Bay Unit H-pad. The low-pressure pilot on Prudhoe Bay Unit H-24A was found defeated at the time of performance testing. A copy of the inspection report is attached. The facts reported by the AOGCC Inspector indicate a failure to maintain an operable safety valve system, which would be a violation of State regulations. Within 14 days of receipt of this letter, you are requested to provide the AOGCC with an explanation of how this event happened and what has or will be done in the future to prevent its recurrence at Hilcorp-operated fields. Inspection revealed Prudhoe Bay Unit H-24A was producing prior to the performance test but the low-pressure pilot was rendered inoperable; the pilot was placed back in service during the inspection. You are reminded that 20 AAC 25.265 requires a completed well to be equipped with a functional safety valve system. Paragraph (m) establishes tagging procedures for a well safety valve system component that is inoperable, removed or blocked. There was no tag observed on Prudhoe Bay Unit H-24A that would indicate an inoperable low-pressure pilot. Sincerely, Jeremy M. Price Chair, Commissioner Attachment cc: P. Brooks AOGCC Inspectors Jeremy Price Digitally signed by Jeremy Price Date: 2021.10.04 13:16:15 -08'00' Safety Valve & Well Pressures Test Report Reviewed By:P.I. Suprv ________Comm ________Well NumberPermit NumberInner PSIOuter PSITubing PSITest Code Date SISepar PSISet PSIL/P TripTest Code Test Code Oil,WAG,GINJ, GAS,CYCLE, SIYes/NoYes/NoWell DataPilotsSSVSSSVShutIn DtWell TypeWell PressuresGas LiftWaiverCommentsPBU_HMatt Herrera9/27/2021Pad:IntervalInspected by InspDt:InspNosvsMFH210928125210OperatorHilcorp North Slope, LLCOperator RepDavid Kindred180-DayReasonField NamePRUDHOE BAYInspectorSrc:Related Insp:H-01A1951100980550505P41-OIL05501338YesNo SSV Failed to hold Dp; will service and retest.NAH-061770020153125126PP1-OIL600500222NoNoNAH-081770230680550502PP1-OIL2751801838NoNoNAH-111800680153125110PP1-OIL65050285YesNoNAH-14B2071160680550536PP1-OIL001200NoNoNAH-16B2000650680550535PP1-OIL58001134YesNoNAH-17A1971520680550544PP1-OIL6403001779YesNoNAH-181822100680550521PP1-OIL175251400NoNoNAH-19C2140550203125117PP1-OIL1200150214YesNoNAH-201830070680550510PP1-OIL132501790NoNoNAH-211860710980550530PP1-OIL12005501099YesNoNAH-23A1950850980550512PP1-OIL8602001365YesNoNAH-24A207133068055053643P1-OIL13502001050YesNo LPP was in defeated position and could not trip on low pressure. LPP was reset and well tested.NAH-28A2140040203125114PP1-OIL3400200NoNoNAH-29A1980380680550535PP1-OIL7502001758YesNoNAH-301880350980550525PP1-OIL5001501232NoNoNAH-32194025015312595PP1-OIL16250325YesNoNAH-331940380680550530PP1-OIL3801501291YesNoNAH-382081670980550523PP1-OIL350751080YesNoNAH-4021505606805501P1-OIL150501309YesNo LPP failed to trip intially and every susbsequent attempt unless bled to 0 PSI. SSV tested good. Well was left shut in pending repairs.NA204037.5%CommentsWellsComponentsFailuresFailure RatePerformanceTuesday, September 28, 2021Page 1 of 1-%5James B. ReggDigitally signed by James B. Regg Date: 2021.09.30 12:54:57 -08'00'