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Home My WebLink AboutCO 237 CCONSERVATION ORDER NO. 237C Beaver Creek Field Beaver Creek Unit Tyonek Gas Pool 1. November 18, 2021 Hilcorp’s request for a waiver to commingle production between the Beluga Gas Pool and Tyonek Gas Pool 2. November 18, 2021 Emails between Hilcorp, BLM, and AOGCC 3. November 23, 2021 Notice of Hearing and Affidavit of Publication CONSERVATION ORDER NO. 237C ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, ) LLC for an order under 20 AAC 25 .215(b) ) to authorize downhole commingling of ) production from the Beluga Gas Pool and ) the Tyonek Gas Pool in the Beaver Creek ) Unit 24 well ) IT APPEARING THAT: ) ) ) Docket Number: CO-21-023 Conservation Order No. 237C Beaver Creek Field Beaver Creek Unit Tyonek Gas Pool Kenai Peninsula Borough, Alaska January 20, 2022 1. By letter dated and received November 18, 2021, Hilcorp Alaska, LLC (Hilcorp) requested the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order under 20 AAC 25 .215(b) to authorize downhole commingling of production from the Beluga Gas Pool (BGP) and Tyonek Gas Pool (TGP) in the Beaver Creek Unit 24 (BCU 24) well (PTD 214-112). 2.Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for December 29, 2021. On November 23, 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 November 25, 2021, the notice was published in the Anchorage Daily News. 3.No protest to the application or request for hearing was received. 4.Hilcorp's application contained sufficient information to make a decision without the need to hold the hearing. On December 27, 2021, the hearing was vacated. FINDINGS: 1.Hilcorp is the sole owner and operator of the Beaver Creek Field and the Beaver Creek Unit (BCU), which are located in the Kenai National Wildlife Refuge, Kenai Peninsula Borough, Alaska. Cook Inlet Region, Inc. and the federal government are landowners for the BCU and for all lands adjacent to that unit. 2.The BCU 24 well was drilled in September 2014 and was initially completed in the T20 sand in the TGP, but that sand proved unsuccessful and were plugged and the well reperforated in the T19 sand, which was unable to sustain flow due to hydrates formation. Conservation Order 237C January 20, 2022 Page2 of5 Perforations were then added in the T8 sand in April 2015 and the well was able to sustain flow. In February 2018, a water shutoff was done on the T19 sand and resulted in no change to the gas production rate but a decrease in water production from ~50 BWPD to <2 BWPD and the well continued to produce regularly. Over time the well's production rate dropped to the point where starting in November 2020, it was no longer capable if flowing enough gas to prevent the well from loading up with water. 3.Hilcorp believes the remaining sands in the TGP are likely to contain water and thus would be unlikely to contribute enough gas flow to help the well unload itself. There are several sands in the BGP that have gas potential that could help the well achieve a rate that will prevent it from loading up with water. 4.Hilcorp does not believe the BGP sands would be economically viable on their own. 5.Hilcorp proposes downhole commingling of production to extend the life of the production from the TGP and maximize ultimate recovery. 6.BGP production from offset wells BCU 13 and BCU 16RD indicate that the BGP and TGP have similar pressure trends. 7.Downhole commingling of production between the BGP and TGP was previously approved in the BCU for wells BCU 23 and BCU 19RD via Conservation Order (CO) Nos. 726 and 787 respectively and have demonstrated the suitability of downhole commingling between the BGP and TGP in this field. 8.Initial production allocation between the TGP and BGP can be done by comparing well testing results before and after the BGP perforations are added. 9.Production allocation can be revised on at least an annual basis by running a production log. CONCLUSIONS: 1.Downhole commingling of production from the BGP and TGP in the BCU 24 well should maximize ultimate recovery from the well compared to produce the pools separately. 2.Basing the initial production allocation on the change in well performance after the BGP sands are perforated and then conducting annual production logs to update the allocation factors will provide adequate allocation of production between the BGP and TGP provided no rate altering (i.e., adding or plugging perforations, hydraulic fracturing or otherwise stimulating the well, etc.) work is conducted on the well. Conservation Order 237C January 20, 2022 Page 4 of5 ( d)The Beaver Creek Oil Pool is defined as the accumulation of oil that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. 4 between the measured depths of 14,518 and 15,874 feet. Rule 3 Well Spacing (Source: CO 237B) (a)There shall be no restrictions as to well spacing in the Sterling, Beluga, and Tyonek Gas Pools except that no pay shall be opened in a well within 1,500 feet from the exterior boundary of the Beaver Creek Unit where owners and landowners are not the same on both sides of the line. (b)Well spacing in the Beaver Creek Oil Pool shall be 40 acres. No wellbore may be opened nearer than 660 feet from the nearest open wellbore in the same pool. No wellbore may be opened nearer than 500 feet from the exterior boundary of the Beaver Creek Unit where owners and landowners are not the same on both sides of the line. Rule 4 Administrative Action (Superseded by 20 AAC 25.556(d)) Rule 5 Downhole Commingling (Source CO 726, CO 787, and New This Order) 1)The downhole commingling of production between the Beluga and Tyonek Gas Pools in the Beaver Creek Unit 19RD well is authorized with the following conditions: a.Initial production allocation shall be based on the difference between the current Tyonek-only production rate and the stabilized (after initial testing is completed) combined Beluga and Tyonek rate, with any increase in production assigned to the Beluga. b.Thereafter, a well test of each individual producing reservoir interval shall be conducted at least once every 12 months, or as deviations in well performance dictate, to determine new production allocation factors for the pools in that well. c.Other allocation methodologies may be approved administratively by the AOGCC should circumstances warrant. d.Copies of all data used to determine the allocation factors shall be submitted to the AOGCC within 30 days of being of being collected. 2)The downhole commingling of production between the Beluga and Tyonek Gas Pools in the Beaver Creek Unit 23 well is authorized with the following conditions: a.For the first year, production may be allocated based on the difference between the well's production pre- and post-perforating the Tyonek. b.Thereafter, a production log must be run at least once every 12 months to determine a new production allocation factor for the well. c.Copies of all tests and logs used for determining allocation of production shall be submitted to the AOGCC within 30 days of being run. AOGCC 333 W 7th Avenue, Anchorage, AK 99501 TO: BERNIE KARL K&K RECLYCLING, INC. PO BOX 58055 FAIRBANKS, AK 99711 Mailed 1/20/22gs STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 7th Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC for an order under 20 AAC 25.215(b) to authorize downhole commingling of production from the Beluga Gas Pool and the Tyonek Gas Pool in the Beaver Creek Unit 24 well ) ) ) ) ) ) ) ) ) Docket Number: CO-21-023 Conservation Order No. 237C Errata Beaver Creek Field Beaver Creek Unit Tyonek Gas Pool Kenai Peninsula Borough, Alaska April 12, 2022 IT APPEARING THAT: 1. By letter dated and received November 18, 2021, Hilcorp Alaska, LLC (Hilcorp) requested the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order under 20 AAC 25.215(b) to authorize downhole commingling of production from the Beluga Gas Pool (BGP) and Tyonek Gas Pool (TGP) in the Beaver Creek Unit 24 (BCU 24) well (PTD 214-112). 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for December 29, 2021. On November 23, 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 November 25, 2021, the notice was published in the Anchorage Daily News. 3. No protest to the application or request for hearing was received. 4. Hilcorp’s application contained sufficient information to make a decision without the need to hold the hearing. On December 27, 2021, the hearing was vacated. FINDINGS: 1. Hilcorp is the sole owner and operator of the Beaver Creek Field and the Beaver Creek Unit (BCU), which are located in the Kenai National Wildlife Refuge, Kenai Peninsula Borough, Alaska. Cook Inlet Region, Inc. and the federal government are landowners for the BCU and for all lands adjacent to that unit. 2. The BCU 24 well was drilled in September 2014 and was initially completed in the T20 sand in the TGP, but that sand proved unsuccessful and were plugged and the well reperforated in the T19 sand, which was unable to sustain flow due to hydrates formation. Conservation Order 237C (Errata) April 12, 2022 Page 2 of 5 Perforations were then added in the T8 sand in April 2015 and the well was able to sustain flow. In February 2018, a water shutoff was done on the T19 sand and resulted in no change to the gas production rate but a decrease in water production from ~50 BWPD to <2 BWPD and the well continued to produce regularly. Over time the well’s production rate dropped to the point where starting in November 2020, it was no longer capable if flowing enough gas to prevent the well from loading up with water. 3. Hilcorp believes the remaining sands in the TGP are likely to contain water and thus would be unlikely to contribute enough gas flow to help the well unload itself. There are several sands in the BGP that have gas potential that could help the well achieve a rate that will prevent it from loading up with water. 4. Hilcorp does not believe the BGP sands would be economically viable on their own. 5. Hilcorp proposes downhole commingling of production to extend the life of the production from the TGP and maximize ultimate recovery. 6. BGP production from offset wells BCU 13 and BCU 16RD indicate that the BGP and TGP have similar pressure trends. 7. Downhole commingling of production between the BGP and TGP was previously approved in the BCU for wells BCU 23 and BCU 19RD via Conservation Order (CO) Nos. 726 and 787 respectively and have demonstrated the suitability of downhole commingling between the BGP and TGP in this field. 8. Initial production allocation between the TGP and BGP can be done by comparing well testing results before and after the BGP perforations are added. 9. Production allocation can be revised on at least an annual basis by running a production log. CONCLUSIONS: 1. Downhole commingling of production from the BGP and TGP in the BCU 24 well should maximize ultimate recovery from the well compared to produce the pools separately. 2. Basing the initial production allocation on the change in well performance after the BGP sands are perforated and then conducting annual production logs to update the allocation factors will provide adequate allocation of production between the BGP and TGP provided no rate altering (i.e., adding or plugging perforations, hydraulic fracturing or otherwise stimulating the well, etc.) work is conducted on the well. Conservation Order 237C (Errata) April 12, 2022 Page 3 of 5 NOW THEREFORE IT IS ORDERED: This order supersedes Conservation Orders 237, 237A, 237B, 726, and 787. The spacing exception approved within Conservation Order 237.001 for well Beaver Creek Unit No. 14A remains in effect. Development of the Beaver Creek Unit is subject to the statewide requirements of 20 AAC 25 to the extent not superseded by the following rules: Affected Area: Seward Meridian (Source: CO 237A) Township, Range Description T6N, R10W Section 3: NE¼, W½ , W½ SE¼ Section 4: All Section 5: E½ NE¼, SE¼ Section 8: NE¼ Section 9: NE¼, W½ NE¼, NW¼ Section 10: N½ NW¼ T7N, R10W Section 26: SW¼ NW¼ , W½ SW¼, SE¼ SW¼ Section 27: All Section 28: NE¼ NE¼, S½ NE¼, SE¼ NW¼, SW¼, SE¼ Section 32: E½ E½ Section 33 & 34: All Section 35: NW¼, W½, SW¼, NE¼ SW¼ Rule 1 Field Name (Source: CO 237A) The Field is named the Beaver Creek Unit. Rule 2 Pool Definition (Source: CO 237B) (a) The Sterling Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. 1A between the measured depths of 5,188 and 6,370 feet. (b) The Beluga Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. 1A between the measured depths of 6,370 and 9,650 feet. (c) The Tyonek Gas Pool is defined as the accumulation of gas that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. 4 well between the measured depths of 8,886 feet and 14,518 feet. Conservation Order 237C (Errata) April 12, 2022 Page 4 of 5 (d) The Beaver Creek Oil Pool is defined as the accumulation of oil that is common to and correlates with the accumulation present in the Beaver Creek Unit Well No. 4 between the measured depths of 14,518 and 15,874 feet. Rule 3 Well Spacing (Source: CO 237B) (a) There shall be no restrictions as to well spacing in the Sterling, Beluga, and Tyonek Gas Pools except that no pay shall be opened in a well within 1,500 feet from the exterior boundary of the Beaver Creek Unit where owners and landowners are not the same on both sides of the line. (b) Well spacing in the Beaver Creek Oil Pool shall be 40 acres. No wellbore may be opened nearer than 660 feet from the nearest open wellbore in the same pool. No wellbore may be opened nearer than 500 feet from the exterior boundary of the Beaver Creek Unit where owners and landowners are not the same on both sides of the line. Rule 4 Administrative Action (Superseded by 20 AAC 25.556(d)) Rule 5 Downhole Commingling (Source CO 726, CO 787, and New This Order) 1) The downhole commingling of production between the Beluga and Tyonek Gas Pools in the Beaver Creek Unit 19RD well is authorized with the following conditions: a. Initial production allocation shall be based on the difference between the current Tyonek-only production rate and the stabilized (after initial testing is completed) combined Beluga and Tyonek rate, with any increase in production assigned to the Beluga. b. Thereafter, a well test of each individual producing reservoir interval shall be conducted at least once every 12 months, or as deviations in well performance dictate, to determine new production allocation factors for the pools in that well. c. Other allocation methodologies may be approved administratively by the AOGCC should circumstances warrant. d. Copies of all data used to determine the allocation factors shall be submitted to the AOGCC within 30 days of being of being collected. 2) The downhole commingling of production between the Beluga and Tyonek Gas Pools in the Beaver Creek Unit 23 well is authorized with the following conditions: a. For the first year, production may be allocated based on the difference between the well’s production pre- and post-perforating the Tyonek. b. Thereafter, a production log must be run at least once every 12 months to determine a new production allocation factor for the well. c. Copies of all tests and logs used for determining allocation of production shall be submitted to the AOGCC within 30 days of being run. Conservation Order 237C (Errata) April 12, 2022 Page 5 of 5 3) The downhole commingling of production between the Beluga and Tyonek Gas Pools in the Beaver Creek Unit 24 well is authorized with the following conditions: a. Initial production allocation shall be based on the difference between the current Tyonek-only production rate and the stabilized (after initial testing is completed) combined Beluga and Tyonek rate, with any increase in production assigned to the Beluga. b. Thereafter, a production log must be run at least once every 12 months to determine a new production allocation factor for the well. c. As long as the well remains in downhole commingled production service, a production log must be run within 30 days after obtaining stabilized flow after any performance altering work is conducted on the well. Performance altering work includes but is not limited to: i. Adding perforations, ii. Plugging perforations, iii. Hydraulically fracturing the well, and iv. Other forms of well stimulation. d. Copies of all tests and logs used for determining allocation of production shall be submitted to the AOGCC within 30 days of being run. DONE at Anchorage, Alaska and dated April 12, 2022. 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. Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2022.04.12 15:04:49 -08'00'Jeremy Price Digitally signed by Jeremy Price Date: 2022.04.12 15:12:09 -08'00' Dan Seamount Digitally signed by Dan Seamount Date: 2022.04.12 15:28:44 -08'00' INDEXES Notice of Public Hearing and Comment Period STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION RE: Docket No. CO 21-023 By application dated November 18, 2021, Hilcorp Alaska, LLC (Hilcorp) requests that the Alaska Oil and Gas Conservation Commission (AOGCC) approve the commingling of production from the Beluga and Tyonek Gas Pools in the Beaver Creek Unit 24 well in the Beaver Creek Field. Downhole commingling regulations (20 AAC 25.215) are in place to prevent waste and to protect correlative rights. Operators are prohibited from producing from, or injecting into, more than one pool (a rock formation where oil and/or gas has accumulated) in the same wellbore without the AOGCC approving the downhole commingling of two or more pools. It is not uncommon for a well to encounter multiple pools. In these situations, normally an operator will first produce from the deepest pool in the well until it is depleted, then plug off that pool and move up to the next pool and repeat the process until all the pools have been depleted. Sometimes one or more of these pools is not large enough to warrant production/injection operations on its own, or there are other reasons to allow commingled production/injection. In these instances, an operator will apply to the AOGCC for an order approving the downhole commingling of two or more pools. The AOGCC reviews the application to assure waste will not occur and all owners receive their share of the production. 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 tentatively scheduled a virtual public hearing on this matter for Wednesday, December 29, 2021, at 10:00 a.m. via MS Teams. The audio call-in information is (907) 202-7104, conference ID no. 286 721 309#. 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., December 23, 2021. 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 December 23, 2021. To comment on Hilcorp’s filing, please submit your comments by 4:30 p.m., December 27, 2021, to the AOGCC at 333 West 7th Avenue, Anchorage, AK 99501, 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 attend the hearing should notify the AOGCC no later than December 27, 2021. Jessie L. Chmielowski Commissioner Jessie L. Chmielowski Digitally signed by Jessie L. Chmielowski Date: 2021.11.23 10:47:26 -09'00' From:Cody Terrell To:Svejnoha, Wayne Cc:Robert Brumbaugh (rbumbau@blm.gov); Salazar, Grace (CED); Chaitanya Borade; Meredyth Richards Subject:BCU 24 Commingling Request - BLM Date:Thursday, November 18, 2021 11:08:00 AM Attachments:BCU 24 BLM Commingling Application 11-18-21.pdf BCU 24 Commingling Map Overview.pdf Hi Mr. Svejnoha, See the attached request from Hilcorp Alaska, LLC to commingle production from the Beluga PA and Tyonek Gas PA within the Beaver Creek Unit. The signed request has been sent to your office today via mail. 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. 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By Grace Salazar at 8:48 am, Nov 18, 2021