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Home My WebLink AboutCO 786CONSERVATION ORDER 786 Docket Number: CO -20-011 1. July 7, 2020 Hilcorp Alaska, LLC application for a Spacing Exception BRU 212-26 2. July 8, 2020 Notice of hearing, affidavit of publication, email distribution, mailings STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION 333 West 7" Avenue Anchorage, Alaska 99501 Re: THE APPLICATION OF Hilcorp Alaska, LLC for an exception to the spacing requirements of 20 AAC 25.055(a) to drill, complete, test, and produce the Beluga River Unit 212-26 development gas well within 1,500 feet of a property line where owners are different on both sides of the line, and within the same governmental section as, and within 3,000 feet of, wells that are, or may be, capable of producing from the same pool. IT APPEARING THAT: Docket Number: CO -20-01 I Conservation Order 786 Beluga River Unit Beluga River Unit 212-26 Development Gas Well Kenai Peninsula Borough, Alaska August 12, 2020 By letter received July 7, 2020, Hilcorp Alaska, LLC, (Hilcorp) requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirements of 20 AAC 25.055(a)(4) to allow the Beluga River Unit 212-26 (BRU 212-26) development gas well to be drilled, completed, tested, and produced within 1,500 feet of a property line where owners are different on both sides of the line, and within the same governmental section as, and within 3,000' of, a well that is, or maybe capable of, producing from the same pool. 2. Pursuant to 20 AAC 25.540, the AOGCC tentatively scheduled a public hearing for August 11, 2020. On July 8, 2020, 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 July 8, 2020, the AOGCC published the notice in the ANCHORAGE DAILY NEWS. 3. Hilcorp sent by certified mail notice of the application to all owners, landowners, and operators of all properties within 3,000 feet of the proposed BRU 212-26 development gas well and provided the notice, addresses to which the notices were delivered, and Certified Mail receipts. 4. No comments or request for hearing were received regarding Hilcorp's application. 5. The tentatively scheduled public hearing was vacated. 6. Hilcorp's application provided sufficient information upon which to make an informed decision. FINDINGS: 1. Hilcorp is the operator for the Beluga River Unit (BRU), located within the Kenai Peninsula Borough, Alaska. Landowners for the properties that will be affected by BRU 212-26 are the US Government, the State of Alaska, and Cook Inlet Region Inc. Owners within 3,000 feet of BRU 212-26 are Hilcorp, Chugach Electric Association Inc., and Municipal Light & Power. 2. BRU 212-26 will be an onshore, "s -shaped," development gas well drilled directionally to the north-northeast from an surface location 816 feet from the south line (FSL) and 400 feet from CO 786 August 12, 2020 Page 2 of 3 the west line (FWL) of Section 26, Township 13 North (T13N), Range 10 West (R10W), Seward Meridian (S.M.). The location of the target of the well will lie about 1,661 feet from the north line (FNL) and 1,237 feet from the west line (FWL) of Section 26, T13N, R10W, S.M. The bottom -hole location will also lie about 1,661 feet FNL and 1,237 feet FWL of Section 26, TON, R10W, S.M. 3. The surface location for BRU 212-26, the top of the prospective producing interval, and the bottom -hole location will lie within Federal lease A029657. The productive interval and bottom -hole location will lie more than 1,500 feet from property lines where ownership or landownership changes. 4. BRU 212-26 targets reservoirs within undefined Sterling and Beluga gas pools. 5. Well spacing is governed by the statewide requirements of 20 AAC 25.055. 6. BRU 212-26 will be the fourth development gas well in governmental Section 26, and it will lie within 3,000 feet of three development gas wells. These wells are, or may be, capable of producing from the same pool. 7. The well path and bottom -hole location for BRU 212-26 were chosen—based on reservoir mapping and modeling results—to access reserves in discontinuous, lenticular reservoirs that cannot be reached by wells conforming to spacing requirements. 8. If constructed and operated as approved in Permit to Drill No. 220-058, BRU 212-26 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 the drilling, completion, testing, and regular production of the BRU 212-26 development gas well in order to maximize resource recovery. 2. Granting an exception to the well spacing provisions of 20 AAC 25.055 for BRU 212-26 will not result in waste or jeopardize correlative rights of adjoining or nearby owners, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater. NOW THEREFORE IT IS ORDERED: The AOGCC grants Hilcorp's July 7, 2020, application for an exception to the well spacing provisions of 20 AAC 25.055 to allow drilling, completion, testing, and regular production of the BRU 212-26 development gas well. Hilcorp may proceed and must comply with all applicable laws, and all other legal requirements. DONE at Anchorage, Alaska and dated August 12, 2020. DgiuNy sigiretl by Jeremy ,�yM P,�eJessie D19italysigned by L. e eLChmfebw kl M. Price Dab°202 12 Chmielowski Date: 2020.0.12 11:58AS V 1122:06-08=' Jeremy M. Price Jessie L. ChmielowskiCommissioner, a Chair Commissioner '�e CO 786 August 12, 2020 Page 3 of 3 AND APPEAL 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 daysafter 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 Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 INDEXES Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION Re: Docket Number: CO -20-011 The application of Hilcorp Alaska, LLC for an exception to the spacing requirements of 20 AAC 25.055(a)(2) and (a)(4) to drill, complete, test, and produce the Beluga River Unit 212-26 development gas well within 1,500' of a property line where owners are different on both sides of the line and within the same governmental section as, and within 3,000' of, a well that is, or maybe capable of, producing from the same pool.. Hilcorp Alaska, LLC, (Hilcorp) by letter received July 7, 2020, requests the Alaska Oil and Gas Conservation Commission (AOGCC) issue an order for an exception to the spacing requirements of 20 AAC 25.055(a)(2) and (a)(4) to allow the Beluga River Unit 212-26 development gas well to be drilled, completed, tested, and produced within 1,500' of a property line where owners are different on both sides of the line and within the same governmental section as, and within 3,000' of, a well that is, or maybe capable of, producing from the same pool. Beluga River Unit 212-26 Well Surface Location: 816' FSL, 400' FWL, Sec. 26, Tl 3N, RI OW, Seward Meridian Target Location: 1661' FNL, 1237' FWL, Sec. 26, TON, R10W, Seward Meridian Bottom -hole Location: 1661' FNL, 1237' FWL, Sec. 26, TI 3N, RI OW, Seward Meridian The AOGCC has tentatively scheduled a public hearing on this subject for August 11, 2020, at 1:00 p.m. at 333 West 7'" 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 July 27, 2020. If a request for a hearing is not timely filed, and the AOGCC deems the information submitted in support of Hilcorp's application sufficient to make a decision, the AOGCC may issue an order without a hearing. To learn if the AOGCC will hold the hearing, call (907) 793-1221 after July 28, 2020. If a hearing is requested, the covid-19 virus may necessitate that the hearing be held telephonically. Those desiring to participate or be present at the hearing should check with AOGCC the day before the hearing to ascertain if the hearing will be telephonic. If the hearing is telephonic, on the day of the hearing, those desiring to be present or participate should call 1-800-315-6338 and, when instructed to do so, enter the code 14331. Because the hearing will start at 10:00 a.m., the phone lines will be available starting at 9:45 a.m. Depending on call volume, those calling in may need to make repeated attempts before getting through. In addition, written comments regarding this application may be submitted to the AOGCC, at 333 West 7th Avenue, Anchorage, Alaska 99501. Written comments must be received no later than 4:30 p.m. August 10, 2020, except that if a hearing is held, comments will be accepted until the conclusion of the August 11, 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 August 10, 2020. �� Jeremy M. Price Chair, Commissioner STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO, CERTIFIEDf AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OFADVERTISMENT. ADVERTISING ORDER NUMBER 1 AO-08-21-002 FROM: Alaska Oil and Gas Conservation Commission AGENCY CONTACT: Jody Colombie/Samantha Carlisle DATE OF A.O.AGENCY 7/7/2020 PHONE: (907) 279-1433 333 West 7th Avenue Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: 907 276-7542 TO PUBLISHER: Anchorage Daily News, LLC SPECIAL INSTRUCTIONS: PO Box 140147 Anchorage Alaska 99514-0174 TYPE OF ADVERTISEMENT: +V LEGAL (— DISPLAY CLASSIFIED - OTHER (Specify below) DESCRIPTION PRICE CO-20-011 Initials of who prepared AO: Alaska Non -Taxable 92-600185 .................................. :SUBMIT INVOICE SHD WINO:ADYEkTiSING' ::bpneaxuycegrl�ea;s'FrtmAvgcoa::' :PUBytCATlt)ly WITH;A7TACH6D t:OpY;i)x':; :' AUV6RTISMBN'I`7'U:'' .: ...... ....:.. . . . . ..... ., ::::: AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 Page I of 1 Total of All Pa es $ - REF Type Number Amount Date Comments 1 PVN VCO21795 z AO AO-08-21-002 3 4 FIN AMOUNT SY Act. Template PGM LGR ObjectrnLIQ 1 21 AOGCC 3046 2 3 4 5 Purchasing Authority Name: Title: Purchasing Authority's Signature Telephone Number 1. A.O. # and receiving agency name must appear on all Invoices and documents relating to this purchase. 2. The stale is registered for tax free transactions under Chapter 32, IRS code. Registration number 92-73-0006 K. Items am for the exclusive use of the stale and not for resale. DISTRIBUTION:. ... :.. Division Fiscal/OnglDal eiX1 :.:': . ::: .:.; :.: .:>' . :Copies P"otilisllet (fa4;oda D14isioa Fi;pa�Reeervd� Form: 02-901 Revised: 7/10/2020 DECEIVED JUL 13 2020 AOGCC July 7, 2020 Hilcorp Alaska, LLC Jeremy Price, Chair Commissioner Alaska Oil and Gas Conservation Commission 333 West 7`s Avenue, Suite 100 Anchorage, Alaska 99501 RE: Application for Spacing Exception BRU 212-26 Well Beluga River 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 Operator of the Beluga River Unit ("BRU"), requests permission to drill, complete, test, and produce the BRU 212-26 Well in the Undefined Sterling and Beluga Pools within 1,500' of a property line where the owners are different on both sides, and within the same governmental section as three (3) other BRU wells, and within 3,000' of three (3) other BRU wells, all within the same pools, in accordance with 20 AAC 25.055(a). Hilcorp has submitted a permit to drill the BRU 212-26 Well, and is pending approval. The spud date is expected to commence on August l lth, 2020. The BRU 212-26 Well will be targeting the Undefined Sterling and Beluga Pools. Prior to completing and producing the BRU 212-26 Well within the Undefined Sterling and Beluga Pools, this spacing exception will be required under 20 AAC 25.055(a)(2) and 25.055(a)(4): Per 20 AAC 25.055(a)(2), for a well drilling for gas, a wellbore may be open to test or regular production within 1,500 feet of a property line only if the owner is the same and the land owner is the same on both sides of the line; Per 20 AAC 25.055(a)(4), if gas has been discovered, the drilling unit for the pool is a governmental section; not more than one well may be drilled to and completed in that pool on any governmental section;' a well may not be drilled or completed closer than 3,000 feet to any well drilling of or capable of producing from the same pool. A spacing exception is necessary because BRU 212-26 will be the fourth well open to or producing from the Undefined Sterling and Beluga Pools located in Section 26, Township 13 North, Range 10 West. BRU 211-26, BRU 214-26, and BRU 232-26 are all located within the same governmental section as BRU 212-26 , and all are open to or capable of producing from the Undefined Sterling and Beluga Pools. BRU 212-26 is also within 3,000' of the BRU 224-23, BRU 224-23T, and BRU 244-23, all open to or capable of producing from the same pool. The BRU 212- 26 Well is located on the BRU H Pad within the BRU. The well is located on Federal Lease A029657 (see Attachment 1). The BRU 212-26 Well will be within 1,500' of State of Alaska Beluga River Unit Application for Spacing Exception July 7, 2020 Page 2 of 4 Leases ADL 21127 and ADL 17658. The surface hole, anticipated productive intervals, and bottom hole are located on Federal Lease A029657: • Surface Hole Location (SHL): 816' FSL, 400' FWL, Sec 26, TON, R10W, SM, AK • Top of Productive Horizon (TPH): 1661' FNL, 1237' FWL, Sec 26, T13N, R10W, SM, AK • Bottom Hole Location (BHL): 1661' FNL, 1237' FWL, Sec 26, TON, R10W, SM, AK Hilcorp is a 33.33% working interest owner of the affected oil and gas leases. The remaining BRU working interest owners are the Municipal Light and Power (56.67% WI) and Chugach Electirc Association (10.00% WI). The affected landowners within 3,000' of the BRU 212-26 Well are the State of Alaska, Bureau of Land Management, and Cook Inlet Region, Inc. Hilcorp believes that the correlative rights of all owners and landowners will be protected by the BRU Agreement and its corresponding Participating Areas. In accordance with 20 AAC 25.055(d), 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. 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 Ms. Trudi Hallett, Reservoir Engineer at (907) 777-8323, or you may contact the undersigned at (907) 777-8432. Sincerely, Cody T. Terrell, Landman Hilcorp Alaska, LLC Enclosures: Attachment 1 (BRU Well Map); Attachment 2 (Affidavit) CC: Jody Colombie, AOGCC (via email) Beluga River Unit Application for Spacing Exception July 7, 2020 Page 3 of 4 ATTACHMENT 1 Application for Spacing Exception BRU 212-26 Well Map Qom} ADL021126 j ! ADLO21120 mu enusza 1 1 :i liPF01P�d ADLOZ167 `y 1. I 11 1 rr/ i E_ mm" If 1 ADLO17658 1 IfftU 1 Ba S013N010w 6ELU(fA RIVER UNIT t 0 9 O s 0 8 e - e C BRU 2Y4 -M or o r � o . s r A0296578 J r o � a e Legend • eR 212.26 5NL G1twr Suf. V00 LaraGms O 1.5ppGodo, O 3,,: J Lugar — X BRU 212-26 IPH45- Har Ua41om Nolo nGG a DRU212-26 6HL ___ Viet Paft oil arrdG 11th RU 141J4 BMI_�1 `► ©aauna m lfikorP Ah4a. 1.19 Beluga River Unit BRU 212-26 wp04 920 1,840 Feet At.. Stale Plane Zone 4, NAD27 61aP Date1u1V 7.21110 Beluga River Unit Application for Spacing Exception July 7, 2020 Page 4 of 4 ATTACHMENT 2 Application for Spacing Exception Affidavit VERIFICATION OF APPLICATION FOR SPACING EXCEPTION COOK INLET, ALASKA BELUGA RIVER UNIT BRU 212-26 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 BRU 212-26 well in the Beluga River Unit, near Cook Inlet, Alaska, pursuant to 20 AAC 25.055(d)(3). 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 from the Undefined Sterling and Beluga Gas Pools in the Beluga River 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 7`h day of July 2020. Cody T. 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