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O 119
OTHER ORDER 119 Eni US Operating Co. Inc. Docket OTH-16-022 1. -------------------- Emails 2. -------------------- Annual Reservoir Surveillance Reports 3. June 30, 2016 Notice of Proposed Enforcement Action, Failure to Submit Annual Reservoir Surveillance Report by Deadline 4. July 7, 2016 Eni's informal review request 5. -------------------- Email: Informal Review 6. July 14, 2016 Informal review sign -in sheet 7. July 21, 2016 Eni's follow-up letter: Informal Review 8. June 1, 2017 Eni's letter: Decision and Order, copy of civil penalty payment check ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to submit Nikaitchuq Schrader Bluff Oil Other Order 119 Pool Annual Reservoir Surveillance Report by Docket Number: OTH-16-022 deadline specified in Rule 12 of Conservation May 5, 2017 Order 639 DECISION AND ORDER On June 30, 2016, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to Eni US Operating Co. Inc. (Eni) regarding reporting requirements for the Nikaitchuq Schrader Bluff Oil Pool in the Nikaitchuq Unit. The Notice was based upon Eni's repeated failure to submit required annual reservoir surveillance reports by the April 1" deadline specified in Rule 12 of Conservation Order 639 (CO 639) for reports due in 2013 through 2016 inclusive. Eni requested an informal review. That review was held July 14, 2016. The AOGCC gave Eni until July 28, 2016, to submit additional information on this matter, Eni submitted the information on July 21, 2016. Summary of Proposed Enforcement Action: The Notice identified repeated violations by Eni of Rule 12 of CO 693 for failing to submit the required annual reservoir surveillance report by the April 1St deadline for four consecutive years. For these violations, the AOGCC proposed a $20,000 civil penalty on Eni. Informal Review: An informal review provides opportunity for the recipient of a proposed enforcement action to submit evidence and make written and oral statements regarding the enforcement action in advance of AOGCC issuing a final decision. Eni's request for an informal review stated it would "provide AOGCC assurance that the reoccurring overdue surveillance report submittal will not occur another time and to ask that AOGCC not exercise its right to penalize Eni Petroleum" Other Order 119 May 5, 2017 Page 2 of 3 During the informal review, Eni took responsibility for the reports being submitted late, admitted there was no excuse for them being late, acknowledged providing the reports late was unacceptable and advised it would not happen again. The AOGCC pointed out that when the issue of the late reports was previously broached with Eni on May 6, 2015, Eni had provided the same assurances that the reports would be submitted on time. Eni stated it now has a robust process in place to ensure reports are timely filed. The AOGCC asked for more detail about the new process and gave ENI until July 28, 2016, to comply. Eni provided the information about the new process to the AOGCC on July 21, 2016. The letter contained information about a formal process involving multiple steps and people within Eni designed to ensure that the annual reservoir surveillance report is completed and submitted on time. Discussion: Eni's failure to provide the required annual reservoir surveillance report for the Nikaitchuq Schrader Bluff Oil Pool by the April 1St deadline for four consecutive years violated a specific, clearly worded rule of CO 693, which defined and established pool rules for the Nikaitchuq Schrader Bluff Oil Pool and hampered the ability of the AOGCC make this information available to interested members of the public. The AOGCC has considered the factors in AS 31.05.150(g) in its assessment of the violations. Eni admits it failed to submit the required annual reservoir surveillance reports by the deadline provided for in Rule 12 of CO 693. There is nothing ambiguous about the language of Rule 12, of CO 693. Eni's history of noncompliance with this rule, even after AOGCC staff had brought the repeated violations to the attention of Eni, its failure to follow through on its prior assurance that it would meet the deadline going forward, and the need to deter similar behavior are the factors which most heavily influence this decision. Other Order 119 May 5, 2017 Page 3 of 3 Findings and Conclusions: The AOGCC finds that Eni violated Rule 12 of CO 693 by repeatedly failing to submit the required annual reservoir surveillance reports by the deadline specified in the order. Now Therefore It Is Ordered That: Eni is assessed a civil penalty in the amount of $20,000 for violating Rule 12 of CO 693. If the operator chooses not to appeal this Order the fine must be paid within 30 days of issuance. If appealed the fine will be held in abeyance until appeal process is complete. As an Operator involved in an enforcement action, you are require concerning the above action until after resolution of the proceeding. Done at Anchorage, Alaska and dated May 5, 2017. ac athy erst r T. Seamo t, Jr. hair, ommissioner ?aniel ommissioner RECONSIDERATION AND APPEAL NOTICE Hollis French Commissioner 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 tiled. 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 tiled. 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. w Domestic Mail Only Ln r- rr �Certified Mail Fee r_1 $ LJ') Extra Services & Fees (check box, add fee as appropriate) ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Mr. Robert Province Land Manager -Alaska Eni US Operating Co. Inc. 3800 Centerpoint Dr., Ste. 300 Anchorage, AK 99503 • A. Si ature X ❑ Agent ❑ Addressee R ce�eyl 4v ftiptpd Name) C. Date of Delivary DD..1lrs�delili to r �erledn►tt from item 1? �Ye E_ ©��1i�d ss below: ❑ No MAY 0 9 2017 II�'III�II�IIII�IIIII�IIIIIIIIII ❑ Return Receipt (hardcopy) $ M ❑ Return Receipt (electronic) $ Postmark IZ-3 ❑ Certified Mail Restricted Delivery $ Here 0 ❑ Adult Signature Required $ r-3 ❑ Adult Signature Restricted Delivery $ O Postage I'II'I�III _r $ El Adult Signature Restricted Delivery 13 Certified Mail® _11 Total Postage and Fees El Certified Mail Restricted Delivery I= N ArfWa , imhar (Transfer from service label) Mr. Robert Province ?015 0 6 4 0 3 518 5 5 7 5 8 $ 1:1 Signature Confirmation Restricted Delivery u] Sent To Land Manager - Alaska ri------ C3 Street and Apt No., or PO Box No. Eni US 0 eratin Co. Inc. p g ________________ 3800 Centerpoint Dr., Ste. 300 City, State, ZIP+4® Anchorage, AK 99503 ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Mr. Robert Province Land Manager -Alaska Eni US Operating Co. Inc. 3800 Centerpoint Dr., Ste. 300 Anchorage, AK 99503 • A. Si ature X ❑ Agent ❑ Addressee R ce�eyl 4v ftiptpd Name) C. Date of Delivary DD..1lrs�delili to r �erledn►tt from item 1? �Ye E_ ©��1i�d ss below: ❑ No MAY 0 9 2017 II�'III�II�IIII�IIIII�IIIIIIIIII 3 ❑ Adult Signature Elv Priority Mail Expresse I'II'I�III III El Adult Signature Restricted Delivery 13 Certified Mail® El Registered MaiITM 13 Registered Mail Restricted 9590 9402 1823 6104 6488 87 El Certified Mail Restricted Delivery Delivery 13 Return Receipt for N ArfWa , imhar (Transfer from service label) El Collect on Delivery Merchandise ❑ Collect on Delivery Restricted Delivery Cl Signature ConfirmationTM ?015 0 6 4 0 3 518 5 5 7 5 8 red Mail red Mail Restricted Delivery 1:1 Signature Confirmation Restricted Delivery PS Form 3811, July 2015 PSN 7530-02-000-9053 $500) Domestic Return Receipt 0 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to submit Nikaitchuq Schrader Bluff Oil Other Order 119 Pool Annual Reservoir Surveillance Report by Docket Number: OTH-16-022 deadline specified in Rule 12 of Conservation May 5, 2017 Order 639 DECISION AND ORDER On June 30, 2016, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to Eni US Operating Co. Inc. (Eni) regarding reporting requirements for the Nikaitchuq Schrader Bluff Oil Pool in the Nikaitchuq Unit. The Notice was based upon Eni's repeated failure to submit required annual reservoir surveillance reports by the April 1st deadline specified in Rule 12 of Conservation Order 639 (CO 639) for reports due in 2013 through 2016 inclusive. Eni requested an informal review. That review was held July 14, 2016. The AOGCC gave Eni until July 28, 2016, to submit additional information on this matter, Eni submitted the information on July 21, 2016. Summary of Proposed Enforcement Action: The Notice identified repeated violations by Eni of Rule 12 of CO 693 for failing to submit the required annual reservoir surveillance report by the April 1st deadline for four consecutive years. For these violations, the AOGCC proposed a $20,000 civil penalty on Eni. Informal Review: An informal review provides opportunity for the recipient of a proposed enforcement action to submit evidence and make written and oral statements regarding the enforcement action in advance of AOGCC issuing a final decision. Eni's request for an informal review stated it would "provide AOGCC assurance that the reoccurring overdue surveillance report submittal will not occur another time and to ask that AOGCC not exercise its right to penalize Eni Petroleum" Other Order 119 • • May 5, 2017 Page 2 of 3 During the informal review, Eni took responsibility for the reports being submitted late, admitted there was no excuse for them being late, acknowledged providing the reports late was unacceptable and advised it would not happen again. The AOGCC pointed out that when the issue of the late reports was previously broached with Eni on May 6, 2015, Eni had provided the same assurances that the reports would be submitted on time. Eni stated it now has a robust process in place to ensure reports are timely filed. The AOGCC asked for more detail about the new process and gave ENI until July 28, 2016, to comply. Eni provided the information about the new process to the AOGCC on July 21, 2016. The letter contained information about a formal process involving multiple steps and people within Eni designed to ensure that the annual reservoir surveillance report is completed and submitted on time. Discussion: Eni's failure to provide the required annual reservoir surveillance report for the Nikaitchuq Schrader Bluff Oil Pool by the April 1St deadline for four consecutive years violated a specific, clearly worded rule of CO 693, which defined and established pool rules for the Nikaitchuq Schrader Bluff Oil Pool and hampered the ability of the AOGCC make this information available to interested members of the public. The AOGCC has considered the factors in AS 31.05.150(g) in its assessment of the violations. Eni admits it failed to submit the required annual reservoir surveillance reports by the deadline provided for in Rule 12 of CO 693. There is nothing ambiguous about the language of Rule 12, of CO 693. Eni's history of noncompliance with this rule, even after AOGCC staff had brought the repeated violations to the attention of Eni, its failure to follow through on its prior assurance that it would meet the deadline going forward, and the need to deter similar behavior are the factors which most heavily influence this decision. Other Order 119 • May 5, 2017 Page 3 of 3 Findings and Conclusions: The AOGCC finds that Eni violated Rule 12 of CO 693 by repeatedly failing to submit the required annual reservoir surveillance reports by the deadline specified in the order. Now Therefore It Is Ordered That: Eni is assessed a civil penalty in the amount of $20,000 for violating Rule 12 of CO 693. If the operator chooses not to appeal this Order the fine must be paid within 30 days of issuance. If appealed the fine will be held in abeyance until appeal process is complete. As an Operator involved in an enforcement action, you are required to preserve documents concerning the above action until after resolution of the proceeding. Done at Anchorage, Alaska and dated May 5, 2017. //signature on file// Cathy P. Foerster Chair, Commissioner //signature on file// Daniel T. Seamount, Jr Commissioner AND APPEAL //signature on file// Hollis French Commissioner 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 neat day that does not fall on a weekend or state holiday. • Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711-0055 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 99639-0309 • Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706-0868 • Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Friday, May 05, 2017 2:51 PM To: Robert Province Subject: Other Order 119 Attachments: otherll9.pdf Jody J. Co(ombie AOGCC SpeciaC-Assistant A(aska Oi(andGas Conservation Commission 333 West 7" Avenue .anchorage, A(aska 99501 Office: (907) 793-1221 _Fax: (907) 276-7542 • 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 Jody Colombie at 907.793.1221 or iodv.colombie@alaska.gov. Singh, Angela K (DOA) From: Colombie, Jody J (DOA) Sent: Friday, May 05, 2017 2:41 PM To: DOA AOGCC Prudhoe Bay; Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity, AKDCWellIntegrityCoordinator, Alan Bailey; Alex Demarban; Alexander Bridge; Allen Huckabay; Andrew Vanderlack; Ann Danielson; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Ben Boettger; Bill Bredar; Bob Shavelson; Brandon Viator; Brian Havelock, Bruce Webb; Caleb Conrad; Candi English; Cocklan-Vendl, Mary E; Colleen Miller; Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Darci Horner; Dave Harbour; David Boelens; David Duffy; David House; David McCaleb; David McCraine; David Tetta; ddonkel@cfl.rr.com; DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Elwood Brehmer; Evan Osborne; Evans, John R (LDZX); George Pollock, Gordon Pospisil; Greeley, Destin M (DOR); Gretchen Stoddard; gspfoff, Hunter Cox; Hurst, Rona D (DNR); Hyun, James J (DNR); Jacki Rose; Jason Brune; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Watt; Jim White; Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); John Stuart; Jon Goltz; Chmielowski, Josef (DNR); Juanita Lovett; Judy Stanek; Kari Moriarty, Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Frank, Kevin J (DNR); Kruse, Rebecca D (DNR); Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Louisiana Cutler, Luke Keller, Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Mealear Tauch; Michael Bill; Michael Calkins; Michael Moora; MJ Loveland; mkm7200; Motteram, Luke A; Mueller, Marta R (DNR); Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly; Sharon Yarawsky; Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver R, Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Ted Kramer, Teresa Imm; Thor Cutler; Tim Jones; Tim Mayers; Todd Durkee; trmjrl; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Well Integrity, Well Integrity; Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Bajsarowicz, Caroline J; Bruce Williams; Bruno, Jeff 1 (DNR); Casey Sullivan; Catie Quinn; Corey Munk, Don Shaw; Eppie Hogan; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Neusser, Heather A (DNR); Fair, Holly S (DNR); Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Joe Longo; John Martineck, Josh Kindred; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck, Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); Wayne Wooster, William Van Dyke Subject: RE: Other Order 119 Attachments: other119.pdf Ll Please disregard previously sent Order. From: Colombie, Jody J (DOA) Sent: Friday, May 05, 2017 2:20 PM To: aogcc.inspectors@alaska.gov; 'Bender, Makana K (DOA) (makana.bender@alaska.gov)' <makana.bender@alaska.gov>; 'Bettis, Patricia K (DOA) (patricia.bettis@alaska.gov)' <patricia.bettis@alaska.gov>; 'Brooks, Phoebe L (DOA) (phoebe.brooks@alaska.gov)' <phoebe. brooks@alaska.gov>; Carlisle, Samantha J (DOA) <samantha.carlisle@alaska.gov>; 'Colombie, Jody J (DOA) (jody.colombie@alaska.gov)' <jody.colombie@alaska.gov>; 'Davies, Stephen F (DOA) (steve.davies@alaska.gov)' <steve.davies@alaska.gov>; Eaton, Loraine E (DOA) <loraine.eaton@alaska.gov>;'Foerster, Catherine P (DOA) (cathy.foerster@alaska.gov)' <cathy.foerster@alaska.gov>; 'French, Hollis (DOA)' <hollis.french@alaska.gov>; 'Frystacky, Michal (michal.frystacky@alaska.gov)' <michal.frystacky@alaska.gov>; 'Guhl, Meredith (DOA sponsored) (meredith.guhl@alaska.gov)' <meredith.guhl@alaska.gov>; Kair, Michael N (DOA)<michael.kair@alaska.gov>;'Link, Liz M (DOA)' <liz.link@alaska.gov>; Loepp, Victoria T (DOA) <victoria.loepp@alaska.gov>; 'Mumm, Joseph (DOA sponsored) (joseph.mumm@alaska.gov)' <joseph.mumm@alaska.gov>; 'Paladijczuk, Tracie L (DOA) (tracie.paladijczuk@alaska.gov)' <tracie.paladijczuk@alaska.gov>; 'Pasqual, Maria (DOA) (maria.pasqual@alaska.gov)' <maria.pasqual@alaska.gov>; 'Quick, Michael (DOA sponsored)' <mike.quick@alaska.gov>; 'Regg, lames B (DOA) (jim.regg@alaska.gov)' <jim.regg@alaska.gov>; 'Roby, David S (DOA) (dave.roby@alaska.gov)' <dave.roby@alaska.gov>; 'Schwartz, Guy L (DOA) (guy.schwartz@alaska.gov)' <guy.schwartz@alaska.gov>; 'Sea mount, Dan T (DOA) (dan.seamount@alaska.gov)' <dan.seamount@alaska.gov>; Singh, Angela K (DOA)<angela.singh@alaska.gov>;'Wallace, Chris D (DOA) (ch ris.waIlace @alaska.gov)' <chris.waIlace @alaska.gov>; AK, GWO Projects Well Integrity <AKDCProjectsWelllntegrityEngineer@bp.com>; 'AKDCWelllntegrityCoordinator' <AKDCWelllntegrityCoordinator@bp.com>; 'Alan Bailey' <abailey@petroleumnews.com>; 'Alex Demarban' <alex@alaskadispatch.com>; 'Alexander Bridge' <Alexander_Bridge @xtoenergy.com>; 'Allen Huckabay' <allenhuckabay@hotmail.com>; 'Andrew VanderJack' <AMV@vnf.com>; 'Ann Danielson' <Ann.Danielson@bp.com>; Anna Raff <anna.raff@dowjones.com>; 'Barbara F Fullmer' <barbara.f.fullmer@conocophillips.com>; bbritch <bbritch@alaska.net>; Becky Bohrer <bbohrer@ap.org>; 'Ben Boettger'<benjamin.boettger@peninsulaclarion.com>; 'Bill Breda r' <william.bredar@bp.com>; Bob <bob@inletkeeper.org>; Brandon Viator <Brandon.S.Viator@conocophillips.com>;'Brian Havelock' <behavelock@gmaiLcom>;'Bruce Webb' <b.webb@furiealaska.com>; 'Caleb Conrad' <caleb.conrad@bakerhughes.com>; 'Candi English' <c.english@nsakllc.com>; Cocklan-Vendl, Mary E <mary.cocklan-vendl@bp.com>; Colleen Miller <cmiller@ciri.com>; 'Connie Downing' <cdowning@tyonek.com>; Crandall, Krissell <Krissell.Crandall@bp.com>; 'D Lawrence' <DLawrence4@slb.com>; 'Dale Hoffman' <dale.hoffman@caelusenergy.com>; 'Darci Horner' <dhorner@hilcorp.com>; 'Dave Harbour' <harbour@gci.net>; David Boelens <dboelens@aurorapower.com>;'David Duffy' <dduffy@hilcorp.com>; David House <dhouse@usgs.gov>; 'David McCaleb' <david.mccaleb@ihs.com>; 'David McCraine' <d.mccraine@furiealaska.com>; 'David Tetta' <tetta.david@epa.gov>; 'ddonkel@cfl.rr.com' <ddonkel@cfl.rr.com>; 'DNROG Units' <dog. units@alaska.gov>; 'Donna Ambruz' <dambruz@hilcorp.com>;'Ed Jones' <jejones@aurorapower.com>;'Elizabeth Harball' <eharball@alaskapublic.org>; Elowe, Kristin <Kristin. Elowe@mms.gov>; 'Elwood Brehmer' <elwood.brehmer@alaskajournal.com>;'Evan Osborne' <Osborne.Evan @epa.gov>; Evans, John R (LDZX) <John.R.Evans@conocophillips.com>; 'George Pollock' <gpollock@aurorapower.com>; Gordon Pospisi) <PospisG@BP.com>; Greeley, Destin M (DOR) <desti n.gree ley@ a laska.gov>; 'Gretchen Stoddard' <mgstodda rd @gci. net>; gspfoff <gspfoff@aurorapower.com>; 'Hunter Cox' <hcox@vnf.com>; Hurst, Rona D (DNR) <rona.hurst@alaska.gov>; Hyun, James J (DNR) <james.hyun@alaska.gov>; 'Jacki Rose' <j rose@ bl uecrestenergy.com>; Jason Brune <JBrune@ciri.com>; Jdarlington (jarlington@gmail.com) <jarlington@gmail.com>;'Jeanne McPherren' <jmcpherren@brenalaw.com>;'Jerry Hodgden' <geodogs@comcast.net>; Jill Simek<Jill.Simek@conocophillips.com>; 'Jim Watt'<jwatt@strongenergyresources.com>; Jim White <jimwhite@satx.rr.com>; 'Joe Lastufka' <lastufjn@bp.com>; Joe Nicks <news@radiokenai.com>; 'John Burdick' <john.burdick@alaska.gov>;'John Easton' <john.easton@alaska.gov>; John Larsen <john.larsen@alaska.gov>; 'John Stuart' <i.stuart@furiealask1Rm>; Jon Goltz <Jon.GoltzPconocoohillios�m>: Josef Chmielowski <josef.chmielowski@alaska.gov>; 'Juanita Lovett' <jlovett@hilcorp.com>; 'Judy Stanek' <jstanek@hilcorp.com>; Kari Moriarty <moriarty@aoga.org>;'Kasper Kowa Iewski'<kasper.kowalewski@cop.com>;'Kazeem Adegbola' <kazeem.a.adegbola@conocophillips.com>; 'Keith Torrance' <keith.torrance@uicumiaq.com>; Keith Wiles <kwiles@marathonoil.com>; Kelly Sperback <ksperbeck@sib.com>; Kevin Frank <kevin.frank@alaska.gov>; Kruse, Rebecca D (DNR) <rebecca.kruse@alaska.gov>; Laura Silliphant (laura.gregersen@alaska.gov) <laura.gregersen@alaska.gov>; Leslie Smith <I.smith@furiealaska.com>; Lori Nelson <Inelson@hilcorp.com>; Louisiana Cutler <louisiana.cutler@klgates.com>; 'Luke Keller' <Ikeller@hilcorp.com>; 'Marc Kovak' <yesnoak@gmaii.com>; Mark Dalton <mark.dalton@hdrinc.com>; Mark Hanley (mark.hanley@anadarko.com) <mark.hanley@anada rko.com>; 'Mark Landt' <landtman4@yahoo.com>;'Mark Wedman' <mark.wedman@pxd.com>; 'Mealear Tauch' <mzt@vnf.com>; 'Michael Bill' <billmk@acsalaska.net>; Michael Calkins <mcalkins117@yahoo.com>; 'Michael Moora' <mmoora@anvilcorp.com>; MJ Loveland <N1878@conocophillips.com>; mkm7200 <mkm7200@aol.com>; 'Motteram, Luke A' <luke.a.motteram@exxonmobil.com>; Mueller, Marta R (DNR) <marta.mueller@alaska.gov>; Munisteri, Islin W M (DNR) <islin.munisteri@alaska.gov>; nelson <knelson@petroleumnews.com>; Nichole Saunders <nsaunders@edf.org>; Nikki Martin <martin@aoga.org>; NSK Problem Well Supv <n1617@conocophillips.com>; Patty Alfaro <palfaro@yahoo.com>; 'Paul Craig' <drpaulcraig@gmail.com>; Paul Decker (paul.decker@alaska.gov) <paul.decker@alaska.gov>;'Paul Mazzolini' <pmazzolini@hilcorp.com>; Pike, Kevin W (DNR) <kevin.pike@alaska.gov>; Randall Kanady <Randall. B.Kanady@conocophiIli ps.com>; 'Renan Yanish' <renan@astercanyon.com>; 'Richard Cool' <cool.richard@epa.gov>; 'Robert Brelsford' <robert.brelsford@argusmedia.com>; 'Ryan Tunseth' <ryan_tunseth@xtoenergy.com>; Sara Leverette <saleverette@stoel.com>; 'Scott Griffith' <scott_griffith@xtoenergy.com>; Shahla Farzan <shahla@kbbi.org>; Shannon Donnelly <shannon.donnelly@conocophillips.com>;'Sharon Yarawsky' <syarawsk@blm.gov>; Skutca, Joseph E (DNR) <joseph.skutca@alaska.gov>; Smart Energy Universe <admin@smartenergyuniverse.com>; Smith, Kyle S (DNR) <kyle.smith@alaska.gov>; 'Stephanie Klemmer' <sklemmer@hilcorp.com>; 'Stephen Hennigan' <shennigan@peiinc.com>; Sternicki, Oliver R <Oliver.Sternicki@bp.com>; Steve Moothart (steve.moothart@alaska.gov) <steve.moothart@alaska.gov>; 'Steve Quinn' <smgwrite@gmail.com>; 'Suzanne Gibson' <sgibson@ciri.com>; 'Tamera Sheffield' <sheffield@aoga.org>; 'Ted Kramer' <tkramer@hilcorp.com>; 'Teresa Imm' <timm@asrc.com>; 'Thor Cutler' <Cutler.Thor@epamail.epa.gov>; 'Tim Jones' <tjones@glacieroil.com>; 'Tim Mayers' <mayers.timothy@epa.gov>; 'Todd Durkee' <todd.durkee@anadarko.com>; 'trmjrl' <trmjrl@aol.com>; 'Tyler Senden' <r.tyler.senden@conocophi Ili ps.com>; Umekwe, Maduabuchi P (DNR) <pascal.umekwe@alaska.gov>; 'Vinnie Catalano' <catalano@circac.org>;'Well Integrity' <n2549@conocophillips.com>;'Well Integrity' <n2550@conocophillips.com>; 'Weston Nash' <Weston.Nash@bp.com>; 'Whitney Pettus' <Whitney.Pettus@bp.com>; 'Aaron Gluzman' <aaron.gluzman@gmail.com>; 'Aaron Sorrell' <Aaron.Sorrell@BP.com>; Ajibola Adeyeye <Ajibola_Adeyeye@xtoenergy.com>; Alan Dennis <Alan.Dennis@bp.com>; Bajsarowicz, Caroline J <Caroline.Bajsarowicz@bp.com>; 'Bruce Williams' <bruce.williams@bp.com>; Bruno, Jeff J (DNR) <jeff.bruno@alaska.gov>; Casey Sullivan <Casey.Sullivan@pxd.com>; Catie Quinn <catiequinn@radiokenai.com>; Corey Munk <Corey.Munk@BP.com>; 'Don Shaw' <shawmanseafoods@yahoo.com>; Eppie Hogan <eppie.hogan@bp.com>; Eric Lidji <ericlidji@mac.com>; Garrett Haag <Garrett.B.Haag@conocophillips.com>; 'Graham Smith' <graham.smith@alaska.gov>; Hak Dickenson <hak.dickenson@alaska.gov>; Heusser, Heather A (DNR) <heather.heusser@alaska.gov>; Holly Fair <holly.fair@alaska.gov>; Jamie M. Long <jamie.m.long@esso.ca>; 'Jason Bergerson' <Jason.Bergerson@north-slope.org>; Jesse Chielowski <jchmielowski@blm.gov>;'Jim Magill' <jim_magill@platts.com>; Joe Longo <Joe.Longo@hxrdrillingservices.com>; John Martineck <john@bluecrestenergy.com>; Josh Kindred <kindred@aoga.org>; Laney Vazquez <LVazquez@chevron.com>; Lois Epstein <lois_epstein@tws.org>; Longan, Sara W (DNR) <sara.longan@alaska.gov>; Marc Kuck <Marc.kuck@enipetroleum.com>; Marcia Hobson <mhobson@eenews.net>; 'Marie Steele' <marie.steele@alaska.gov>; Matt Armstrong <Matt.Armstrong@bakerhughes.com>; 'Mike Franger' <mike.franger@alaska.gov>; Morgan, Kirk A (DNR) <kirk.morgan@alaska.gov>; Pascal Umekwe <pascal.umekwe@alaska.gov>; Pat Galvin <pat@greatbearpetro.com>; 'Pete Dickinson' <pdickinson@allamericanoilfield.com>; Peter Contreras <contreras.peter@epa.gov>; Richard Garrard <rgarrard@nordaqenergy.com>; Richmond, Diane M <Diane.Richmond@bp.com>; Robert Province <robert.province@enipetroleum. corn >;'Ryan Daniel' <Ryan.Daniel@bp.com>; 'Sandra Lemke' <Sandra.D.Lem ke@conocophillips.com>; 'Susan Pollard' <Susan.Pollard @alaska.gov>; Talib Syed <talibs@ecentral.com>; Tina Grovier (tmgrovier@stoel.com) <tmgrovier@stoel.com>; Tostevin, reck C (LAW) <breck.tostevin@alaska.gov> aayne Wooster' <wwooster@asrcenergy.com>;'William Van Dyke' <bvandyke@petroak.com> Subject: Other Order 119 See Attached. Re: Failure to submit Nikaitchuq Schrader Bluff Oil Pool Annual Reservoir Surveillance Report by deadline specified in Rule 12 of Conservation Order 639 Jody J. CoCombie .AOGCC SpeciaC.Assistant .Alaska OiCand Gas Conservation Commission 333 lWest 711 .Avenue .Anchorage, .Alaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 Other Order 119 Docket Number: OTH-16-022 May 5, 2017 CONFIDEN71AUTY 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 Jody Colombie at 907.793.1221 or iodv.colombie@alaska.aov. 4 0 • STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to submit Nikaitchuq Schrader Bluff Oil Other Order 119 Pool Annual Reservoir Surveillance Report by Docket Number: OTH-16-022 deadline specified in Rule 12 of Conservation May 5, 2017 Order 639 DECISION AND ORDER On December June 30, 2016, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to Eni US Operating Co. Inc. (Eni) regarding reporting requirements for the Nikaitchuq Schrader Bluff Oil Pool in the Nikaitchuq Unit. The Notice was based upon Eni's repeated failure to submit required annual reservoir surveillance reports by the April 1St deadline specified in Rule 12 of Conservation Order 639 (CO 639) for reports due in 2013 through 2016 inclusive. Eni requested an informal review. That review was held July 14, 2016. The AOGCC gave Eni until July 28, 2016, to submit additional information on this matter, Eni submitted the information on July 21, 2016. Summary of Proposed Enforcement Action: The Notice identified repeated violations by Eni of Rule 12 of CO 693 for failing to submit the required annual reservoir surveillance report by the April 1St deadline for four consecutive years. For these violations, the AOGCC proposed a $20,000 civil penalty on Eni. Informal Review: An informal review provides opportunity for the recipient of a proposed enforcement action to submit evidence and make written and oral statements regarding the enforcement action in advance of AOGCC issuing a final decision. Eni's request for an informal review stated it would "provide AOGCC assurance that the reoccurring overdue surveillance report submittal will not occur another time and to ask that AOGCC not exercise its right to penalize Eni Petroleum" Other Order 119 • • May 5, 2017 Page 2 of 3 During the informal review, Eni took responsibility for the reports being submitted late, admitted there was no excuse for them being late, acknowledged providing the reports late was unacceptable and advised it would not happen again. The AOGCC pointed out that when the issue of the late reports was previously broached with Eni on May 6, 2015, Eni had provided the same assurances that the reports would be submitted on time. Eni stated it now has a robust process in place to ensure reports are timely filed. The AOGCC asked for more detail about the new process and gave ENI until July 28, 2016, to comply. Eni provided the information about the new process to the AOGCC on July 21, 2016. The letter contained information about a formal process involving multiple steps and people within Eni designed to ensure that the annual reservoir surveillance report is completed and submitted on time. Discussion: Eni's failure to provide the required annual reservoir surveillance report for the Nikaitchuq Schrader Bluff Oil Pool by the April 1st deadline for four consecutive years violated a specific, clearly worded rule of CO 693, which defined and established pool rules for the Nikaitchuq Schrader Bluff Oil Pool and hampered the ability of the AOGCC make this information available to interested members of the public. The AOGCC has considered the factors in AS 31.05.150(g) in its assessment of the violations. Eni admits it failed to submit the required annual reservoir surveillance reports by the deadline provided for in Rule 12 of CO 693. There is nothing ambiguous about the language of Rule 12, of CO 693. Eni's history of noncompliance with this rule, even after AOGCC staff had brought the repeated violations to the attention of Eni, its failure to follow through on its prior assurance that it would meet the deadline going forward, and the need to deter similar behavior are the factors which most heavily influence this decision. Other Order 119 • • May 5, 2017 Page 3 of 3 Findings and Conclusions: The AOGCC finds that Eni violated Rule 12 of CO 693 by repeatedly failing to submit the required annual reservoir surveillance reports by the deadline specified in the order. Now Therefore It Is Ordered That: Eni is assessed a civil penalty in the amount of $20,000 for violating Rule 12 of CO 693. If the operator chooses not to appeal this Order the fine must be paid within 30 days of issuance. If appealed the fine will be held in abeyance until appeal process is complete. As an Operator involved in an enforcement action, you are required to preserve documents concerning the above action until after resolution of the proceeding. Done at Anchorage, Alaska and dated May 5, 2017. //signature on file// Cathy P. Foerster Chair, Commissioner //signature on file// Daniel T. Seamount, Jr Commissioner RECONSIDERATION AND APPEAL NOTICE //signature on file// Hollis French Commissioner 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 neat day that does not fall on a weekend or state holiday. Singh. Angela K (DOA) From: Colombie, Jody J (DOA) Sent: Friday, May 05, 2017 2:20 PM To: DOA AOGCC Prudhoe Bay; Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity, AKDCWellIntegrityCoordinator, Alan Bailey, Alex Demarban; Alexander Bridge; Allen Huckabay; Andrew Vanderlack, Ann Danielson; Anna Raff; Barbara F Fullmer; bbritch; bbohrer@ap.org; Ben Boettger; Bill Bredar; Bob Shavelson; Brandon Viator, Brian Havelock; Bruce Webb; Caleb Conrad; Candi English; Cocklan-Vendl, Mary E; Colleen Miller, Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Darci Horner, Dave Harbour, David Boelens; David Duffy; David House; David McCaleb; David McCraine; David Tetta; ddonkel@cfl.rr.com; DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Elwood Brehmer; Evan Osborne; Evans, John R (LDZX); George Pollock, Gordon Pospisil; Greeley, Destin M (DOR); Gretchen Stoddard; gspfoff, Hunter Cox; Hurst, Rona D (DNR); Hyun, lames J (DNR); Jacki Rose; Jason Brune; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Watt; Jim White; Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); John Stuart; Jon Goltz; Chmielowski, Josef (DNR); Juanita Lovett; Judy Stanek; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Frank, Kevin J (DNR); Kruse, Rebecca D (DNR); Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Louisiana Cutler, Luke Keller, Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Mealear Tauch; Michael Bill; Michael Calkins; Michael Moora; MJ Loveland; mkm7200; Motteram, Luke A; Mueller, Marta R (DNR); Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly; Sharon Yarawsky; Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver R, Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; Sheffield@aoga.org; Ted Kramer, Teresa Imm; Thor Cutler, Tim Jones; Tim Mayers; Todd Durkee; trmjrl; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Well Integrity; Well Integrity, Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Bajsarowicz, Caroline J; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; Catie Quinn; Corey Munk; Don Shaw; Eppie Hogan; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Neusser, Heather A (DNR); Fair, Holly S (DNR); Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Joe Longo; John Martineck, Josh Kindred; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck, Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); Wayne Wooster, William Van Dyke Subject: Other Order 119 Attachments: other119.pdf • See Attached. Re: Failure to submit Nikaitchuq Schrader Bluff Oil Pool Annual Reservoir Surveillance Report by deadline specified in Rule 12 of Conservation Order 639 Jody J. CoCombie AOGCC SpeciaCAssistant Alaska Oil and Gas Conservation Commission 333 West 7" Avenue Anchorage, Alaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 • Other Order 119 Docket Number: OTH-16-022 May 5, 2017 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 Jody Colombie at 907.793.1221 or iodv.colombie@alaska.aov. INDEXES RECEIVED JUN 01 2017 AOGCC June 1, 2017 VIA HAND DELIVERY Alaska Oil and Gas Conservation Commission Attn: Commissioner's 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 Re: Decision and Order cn� us operrfing eni us operating co. inc. 3800 Centerpoint Dr., Suite 300 Anchorage, AK 99503 - U.S.A. Tel. 907-865-3300 Fax 907-865-3380 Docket Number: OTH-16-022 Failure to submit Annual Reservoir Surveillance Report Nikaitchuq Unit, North Slope Alaska Dear Commissioner's: Reference is made to the subject docket number and Alaska Oil and Gas Conservation Commission's (AOGCC) letter dated May 5, 2017 regarding the civil penalty assessed to Eni for failure to submit the required annual reservoir surveillance report by the deadline specified in the order. Eni chooses not to appeal the subject order and will pay the assessed fine of $20,000. Enclosed please find Eni's check number 2061010 in the amount of $20,000 payable to AOGCC. With Eni's revised formal tracking system being implemented, the annual reservoir surveillance report will be complete and submitted on time in the future. Sincerely yours, Aqi'? Whitney Grande SEQ Director and Alaska Representative Eni US Operation Co. Inc. Encl: Check #2061010 _ ENI US OPERATING CO. INC. 1200 Smith, Suite 1700 Houston, TX 77002 ���� Pis operating 713-393-6100 00002 CKS 6A 17144 - 0002061010 NNNNNNNNNNNN 1445100005503 X619A1 C ALASKA OIL AND GAS CONSERVATION COMMISSION AOGCC 333 WEST 7TH AVENUE SUITE 100 ANCHORAGE AK 99503 VENDOR NO: 0000457972 2061010 PAGE: 1 of 1 DATE: May 24, 2017 CHECK NUMBER: 2061010 AMOUNT PAID: $20,000.00 ACCOUNT NUMBER: 113344023 Eni US OperatingCo.Inc.05 DIRECT INQUIRIES TO: 713-393-6100 CIVE JUN 0AOGCC 1 2017 DATE INVOICE NUMBER DESCRIPTION GROSS AMOUNT DISCOUNT NET AMOUNT 05/18/17 CKRQST05182017 05/05 CIVIL PENALTY TOTALS $20,000.00 $0.00 $20,000.00 $20,000.00 $0.00 $20,000.00 PLEASE DETACH BEFORE DEPOSITING CHECK (9• ENI US OPERATING CO. INC. 32-61 1200 Smith, Suite 1700 CHECK - 1110 leaHoustonX 77002 NUMBER 2061010 us operating 713-393-6100 MaY 24, 2017 *** VOID AFTER 180 DAYS *** PAY ALASKA OIL AND GAS CONSERVATION TO THE COMMISSION AOGCC ORDER OF: 333 WEST 7TH AVENUE SUITE 100 CHECK AMOUNT ANCHORAGE, AK 99503 $20,000.00 EXACTLY *********20,000 DOLLARS AND 00 CENTS 81-1.o� 6 JPMorgan Chase Bank, N.A. Dallas, TX II' 206 L0 101a I: L L L0006 Loi: Authorized Signature LL334402Pv enn Roperafinng eni us operating co. inc. 3800 Centerpoint Dr., Suite 300 Anchorage, AK 99503 - U.S.A. Tel. 907-865-3300 Fax 907-865-3380 cin i July 21, 2016 JUL 2 1 2016 VIA HAND DELIVERY AOGCC Commissioner Cathy Foerster Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Re: Notice of Proposed Enforcement Action Report by deadline in Rule 12 of Conservation Order 639 Reservoir Surveillance Report Nikaitchuq Unit, North Slope Alaska Dear Commissioner Foerster: As a follow up to the informal review meeting held on July 14th regarding the proposed enforcement action, I hereby submit an effective solution to the unpunctual delivery of Eni's reservoir surveillance report (Report). The solution is to implement a new process, to be administered by Eni, comprising of a Report organization chart and associated timeline (see attachment). This process will undeniably handle and guarantee the delivery of the Report, due each year on or before April 1St in accordance with Rule 12 of Conservation Order 639. To ensure the timely submittal of the Report, Eni will implement the following process: Annually, around mid-February, a Report meeting will be scheduled involving Eni's Land Manager (LM), Office Manager (OM), Reservoir Manager (RM) and Administrator Assistant (AA) to initiate the preparation of the Report. 2. LM will set up second meeting with RM by March 15th to get update and discuss the progress of the updated Report. RM provides, by March 20th, the draft Report to LM and OM. 4. LM, with assistance of OM and AA, will edit, format and finalize the Report including the transmittal letter. 5. LM will attain RM's final approval of the Report by March 30th and LM will hand deliver one original and one copy of the Report to AOGCC on or before April 1St cn� us operraCing eni Eni respectively requests that AOGCC accept Eni's solution to prevent any late Report filings going forward. Again, I apologize for the lack of punctuality and professionalism in this regard and request that AOGCC waive their right to impose a civil penalty. Contact me if you have any questions or need any additional information. Sincerely, Robert Province Land Manager — Alaska Attachments: Report Organization Chart/Timeline Organizational Chart Reservoir Surveillance Report (Due April 1St) Land Manager (LM) - Sends internal notice that Report is due - Meets with team to discuss Report - Prepares transmitted letter to AOGCC & delivers Report to AOGCC Reservoir Manager (RM) - Receives notice from LM. - Provides Report material to LM & OM - Confirms with LM that original Report is complete & delivered to AOGCC Office Manager (OM) - Sets up calendar reminder for Report - Advises LM Report Due April 1st - Checks status of draft Report. - Confirms original report is complete and final. VC Administrative Assistant (AA) - Provides needed assistance to OM - Responsible for mailing Report en us operfi nng 1 0 • Timeline RESERVOIR SURVEILLANCE REPORT DUE APRIL IST ID ask Name art Finish '17 1 Feb 5 '17 Feb l '17 Feb 19 '17 Feb P. '17 Mar 5 '17 Mx 12 '17 Ma 19 '17 Mx 26 '17 r 2 17 TFSSMT TFSSMT TFSSMT TFSSMT TFSSMT TFSS T TFSS T TFSS T TFSS T T FTsi 1 Notify LM & RM Reservoir Surveillance Report Due April 1st Draft Report Due March 15th Finalize Report& Prepare TransnittalLetter Mail Original Report Deliver Original Report to AOGCC DUE DATE APRIL 1st Wed 2/15/17 Thu 2/16117 Fri 3/17117 Thu 3/30/17 Fri 3/31117 Sat 4/1/17 Wed 2/15/17 Thu 3/16/17 Wed 3/29/17 Thu 3/30/17 Fri 3/31117 Sat 4/1/17 , ; ♦ 3%211� p 3/31 ♦d/i 2 3 4 5 6 VC en us open Hng z • • STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION SUBJECT: 0-114 I ""WN 1, pi5l�. E6,01 DATE: ( /� NAME AFFILIATION oHg 08 tv 1906a • Colombie, Jody J (DOA) • From: Roby, David S (DOA) Sent: Monday, July 18, 2016 9:46 AM To: Colombie, Jody J (DOA) Subject: FW: Request for informal review re: OTH 16-022 FYI Dave Roby (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.robv@alaska.aov. From: Roby, David S (DOA) Sent: Monday, July 11, 2016 3:37 PM To: 'Province Robert' Subject: RE: Request for informal review re: OTH 16-022 Robert, This Thursday will work. I'll throw it on our calendar and send you and invite. Regards, Dave Roby (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.roby@alaska.aov. From: Province Robert [mailto:Robert. Province(aenipetroleum.com] Sent: Monday, July 11, 2016 3:28 PM To: Roby, David S (DOA) Subject: RE: Request for informal review re: OTH 16-022 Dave, Thursday between 2:00 and 3:00 is good for me this week or we can meet next week at your convenience. Thanks, Robert A. Province Manager, Land and Public Relations - Alaska Eni US Operating Co. Inc (907) 865-3350- Office (907) 947-3793 - Cell From: Roby, David S (DOA) [mailto:dave.rob&alaska.gov] Sent: Monday, July 11, 2016 9:57 AM To: Province Robert Subject: Request for informal review re: 0TH 16-022 Robert, I received your voicemail message and also the AOGCC has received your request for an informal review on the proposed enforcement action for missing the reporting deadline for submitting the annual report for the Nikaitchuq Unit. My schedule is pretty open this week and next (the only conflicts are the rest of this morning, mid-day Wednesday and Thursday this week, all day Friday this week, and 10 AM to 1 PM on Wednesday next week), so I can meet with you to discuss this matter. Regards, Dave Roby Sr. Reservoir Engineer Alaska Oil and Gas Conservation Commission (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.robv@alaska.aov. This message may contain information that is confidential, and is being sent exclusively to the Recipient. If you are not the designated Recipient, you are prohibited from utilizing, copying or divulging the information contained in this message,or taking any action whatsoever on the basis of the information herein. If you have received this message by mistake, we ask you to kindly inform the Sender and to delete the message. It is understood that, with regard to messages sent by its network, the Company is not responsible for any statements made or opinions expressed, that are not strictly related to the Company's operations. eni * uperrfin• f� � eni us operating co. inc. 3800 Centerpoint Dr., Suite 300 Anchorage, AK 99503 - U.S.A. Tel. 907-865-3300 Fax 907-865-3380 • , n o c RECEIVED JUL 0 7 2016 July 7, 2016 AOGCC VIA HAND DELIVERY Commissioner Cathy Foerster Alaska Oil and Gas Conservation Commission 333 West 7t' Avenue, Suite 100 Anchorage, Alaska 99501 Re: Docket Number: OTH-16-022 Rule 12 of Conservation Order 639 Nikaitchuq Unit, North Slope Alaska Dear Commissioner Foerster: Reference is made to the subject docket number and AOGCC's letter dated June 30, 2016 regarding a proposed enforcement action. I respectfully request an informal review to provide AOGCC assurance that the reoccurring overdue surveillance report submittal will not occur another time and to ask that AOGCC not exercise its right to penalize.Eni Petroleum for my lack of responsibility in this regard. Please contact me should you have any questions and or require additional information. Sincerely, Robert Province Land Manager - Alaska • THE STATE GOVERNOR BILL WALKER June 30, 2016 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 0640 0003 5185 5055 Mr. Robert Province Land Manager - Alaska Eni US Operating Co. Inc. 3800 Centerpoint Dr., Suite 300 Anchorage, AK 99503 Re: Docket Number: OTH-16-022 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 Notice of Proposed Enforcement Action Failure to submit Nikaitchuq Schrader Bluff Oil Pool Annual Reservoir Surveillance Report by deadline specified in Rule 12 of Conservation Order 639. Conservation Order 639 Nikaitchuq Unit, Nikaitchuq Schrader Bluff Oil Pool Dear Mr. Province: The Alaska Oil and Gas Conservation Commission (AOGCC) hereby notifies Eni US Operating Co. Inc. (Eni) of a proposed enforcement action. Nature of the Apparent Violation or Noncompliance (20 AAC 25.535(b)(1 Eni has violated Rule 12 of Conservation Order 639 (CO 639), which requires Eni to submit an annual reservoir surveillance report for the Nikaitchuq Schrader Bluff Oil Pool no later than April 1St of each year. In 2013, 2014, 2015, and 2016 Eni did not submit the reports by the deadline given in the order. Below is a table showing when these reports were submitted. Operations Year Date Report Due Date Report Received Days Past Due Date 2012 April 1, 2013 September 10, 2013 162 2013 April 1, 2014 October 9, 2014 191 2014 April 1, 2015 April 28, 2015 27 2015 April 1, 2016 June 24, 2016 83 Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)). Rule 12 of CO 639 states : An annual reservoir surveillance report must be filed by April 1st of each yearThe report must include future development and surveillance plans, reservoir depletion plans, and surveillance information for the prior calendar year, including: Docket Number: OTH 16-020 0 June 30, 2016 Page 2 of 3 a. Voidage balance by month of produced fluids and injected fluids on a standard and reservoir volume basis with yearly and cumulative volumes; b. a reservoir pressure map at datum and a summary and analysis of the reservoir pressure surveys within the pool; c. the results and, where appropriate, an analysis of any production and injection log surveys, tracer surveys, observation well surveys, and any other special monitoring; d. a review of pool production allocation factors and issues over the prior year; e. a review of the progress of the enhanced recovery project; f. a reservoir management summary, including the results of any reservoir simulation studies; and g. updated future development plans including an estimated development schedule, progress report and basis of timeline for the complete pool development. On May 6, 2015, the AOGCC sent an email to ENI to advise that its recently submitted annual reservoir surveillance report, as well as previous years' reports, had not been received by the date required. AOGCC asked for an explanation as to why the reports were late and what Eni would due to ensure timely filing in the submittal. Later that same day you replied, apologized for the reports being submitted late and assured the AOGCC that: ... future Reservoir Surveillance Reports will be submitted by Eni on or before the April 1St deadline. I have instructed our office secretary to put a reminder on Eni's calendar of this particular deadline date. In a June 23, 2016, email to Jody Colombie of the AOGCC you stated: Hi Jody, Do you want Eni's 2015 Surveillance Report anytime soon? Robert Province. The report was submitted the next day. Eni's ongoing failure to timely provide the annual Surveillance Reports violates Rule 12. Proposed Action (20 AAC 25.535(b)(3). For this violation the AOGCC intends to impose a civil penalty on Eni in the amount of $20,0001. 1 AS 31.05.150(a) provides for not more than $100,000 for the initial violation and not more than $10,000 for each day thereafter on which the violation continues. Had each year's untimely submittal been considered a separate violation the maximum civil penalty that could be assessed to Eni would be $5,030,000, $400,000 ($100,000 each) for the four initial violations and $4,630,000 for the combined 463 days it took to cure those violations. Docket Number: OTH 16-021 June 30, 2016 Page 3 of 3 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 — Eni 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 Eni an opportunity to submit documentary material and make a written or oral statement. If Eni 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 11 th day after it was issued. If such a request is timely filed, the AOGCC will schedule a hearing. If Eni does not concur in the proposed action described herein, and the AOGCC finds that Eni has violated or failed to comply with 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 or remedial work; (ii) suspension or revocation of a permit or other approval; (iii) payment under the bond required by 20 AAC 25.025; and (iv) 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 Eni 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, Cathy . Foerster Chair, Commissioner Postal o RECLIPT CERTIFIED MAIL u1 DomesticOnly II) Ln uI c(3 Certified Mail Fee y rl $ Irl Extra Services & Fees (check box, add fee as appropriate) ❑ Return Receipt (hardcopy) $ rn ❑ Return Receipt (electronic) $ Postmark M ❑ certified Mail Restricted Delivery $ Here C3 ❑ Adult Signature Required $ C3 ❑ Adult Signature Restricted Delivery $ C3 POSM9e Mr. Robert Province ' $ JUL .D .Total C3 Postage and Fees Mr. Robert Province 111 $ Sent To Land Manager -Alaska Eni US Operating Co. Inc. C3 r- Street andApt. No., or PO Ni 3800 Centerpoint Dr., Ste. 300 Cily State, 2IP+4e Anchorage, AK 99503 ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. A. Signature 6" B. Received by (Printed (i55a. Is kA.dress dif delivery • ❑ Agent ❑ Addressee C. Date of Delivery from item 1? ❑ Yes kss below: ❑ No S -p 21 JU.-i2016m s9 3. Service Type. ❑ Priority Mail Expresso II I'III�I I'll ('I II II I'll (II Il I II I II I II i I I ❑ Adult Signature ❑ Registered MailT ❑ Adult Signature Restricted Delivery ❑Registered Mail Restricted eCertified Mai Delivery 9590 9401 0057 5071 0128 05 El Certified Mail Restricted Delivery @ Return Receipt for ❑ Collect on Delivery _ Merchandise 2. Article Number (Transfer from service label) ❑Collect on Delivery Restricted Delivery Signature Confirmation— ed Mail ❑ Signature Confirmation 7 015 0640 0003 5185 5055 ed Mail Restricted Delivery Restricted Delivery $500) PS Form 3811, April 2015 PSN 7530-02-000-9053 OT kk _ 11i,Le—o22Domestic Return Receipt E Mr. Robert Province V Land Manager -Alaska JUL Eni US Operating Co. Inc. 3800 Centerpoint Dr., Ste. 300 �O Anchorage, AK 99503 A. Signature 6" B. Received by (Printed (i55a. Is kA.dress dif delivery • ❑ Agent ❑ Addressee C. Date of Delivery from item 1? ❑ Yes kss below: ❑ No S -p 21 JU.-i2016m s9 3. Service Type. ❑ Priority Mail Expresso II I'III�I I'll ('I II II I'll (II Il I II I II I II i I I ❑ Adult Signature ❑ Registered MailT ❑ Adult Signature Restricted Delivery ❑Registered Mail Restricted eCertified Mai Delivery 9590 9401 0057 5071 0128 05 El Certified Mail Restricted Delivery @ Return Receipt for ❑ Collect on Delivery _ Merchandise 2. Article Number (Transfer from service label) ❑Collect on Delivery Restricted Delivery Signature Confirmation— ed Mail ❑ Signature Confirmation 7 015 0640 0003 5185 5055 ed Mail Restricted Delivery Restricted Delivery $500) PS Form 3811, April 2015 PSN 7530-02-000-9053 OT kk _ 11i,Le—o22Domestic Return Receipt us opera�[Ipng 2015 Annual Reservoir Surveillance Report Schrader Bluff Pool Nikaitchuq Field Eni Petroleum—Alaska Development Page I i 0 Table of Contents • 1. 2015 Development Activity Summary...................................................................................................3 2. Reservoir Pressure Surveys at the Nikaitchuq Schrader Bluff Pool.......................................................6 3. Pool Allocation Factors and Issues over the Year 2015......................................................................10 4. Reservoir Management Summary.......................................................................................................11 4.1 2015 Fall PFO and DTS Data Acquisition Campaign............................................................................12 4.2 Voidage Balance by Month of Produced Fluids and Injected Fluids on a Standard and Reservoir Volume Basis with Yearly and Cumulative Volumes...................................................................................14 Nikaitchuq Field - Drilling Schedule as at December 2015.........................................................................16 Page I ii Eni Petroleum —Alaska Development 1. 2015 Development Activity Summary For the year 2015, the development activities were focused on drilling new wells from Spy Island. A total of ten (10) new wells were added to the current well inventory as follows: 4 oil producers, 4 Dual lateral oil producers and 2 injector wells (See Table 1 and Figure 1 below). In addition, well intervention/workover activities were conducted for five wells to maintain the production field performance (See Table 2, below). Well Name Well Type Placement Date Drilling Path SP31-W7 Oil Producer 2/1/2015 Spy Island Dual lateral Oil Date SP31-W7 L1 Producer 2/18/2015 Spy Island 5134-W6 Water Injector 3/31/2015 Spy Island SP04-SE5 Oil Producer 4/25/2015 Spy Island WW03 Dual lateral Oil 4/13/2015 Oliktok Point SP04-SE5 L1 Producer 5/16/2015 Spy Island 5107-SE4 Water Injector 6/13/2015 Spy Island SP01-SE7 Oil Producer 7/8/2015 Spy Island DSP02 Dual lateral Oil 10/14/2015 Oliktok Point SP01-SE7 L1 Producer 7/28/2015 Spy Island SP28-NW3 Oil Producer 9/15/2015 Spy Island SP28-NW3 Dual lateral Oil L1 Producer 10/16/2015 Spy Island Table 1.2015 Well Placement summary Schedule for Nikaitchuq Field Table 2. 2015 ESP replacement workover job summary for Nikaitchuq Field Page 13 Eni Petroleum — Alaska Development WO Completion Well Name Well Type Drilling Path Date OP23- WW02 Water Well 4/2/2015 Oliktok Point OP22- WW03 Water Well 4/13/2015 Oliktok Point OP16-03 Oil Producer 7/22/2015 Oliktok Point 0PO4-07 Oil Producer 8/4/2015 Oliktok Point OP26- DSP02 Disposal Well 10/14/2015 Oliktok Point Table 2. 2015 ESP replacement workover job summary for Nikaitchuq Field Page 13 Eni Petroleum — Alaska Development 0 0 Nikaitchuq Development Pattern - December 2015 Nlkeltehuk Development 0 2000 4000 6000 600MUS Dabsigrebre 031012016 Alaska De Team 1:21000 Figure 1. Nikaitchuq development Map showing the completed well paths and its reservoir units up to Dec 2015. Gi een = producer, blue = injector, = N Sand Appraisal well. Eni Petroleum —Alaska Development = Dual lateral producer, Purple Page 14 • • The well plan activity in 2009 had a total well count of 51. The well pattern and summary of the activity to the end of 2015 was 55 wells (not including the dual lateral well paths) and is summarized in Table 3 as below: OPP = Oliktok point development path (onshore) SID = Spy Island Development path (offshore) Table 3. Total planned well count for Nikaitchuq Development Oil production at Nikaitchuq field has responded positively to waterflood. The positive waterflood response to date indicates that waterflood technology chosen as the main oil recovery strategy for this field continues to be working well. Figure 2 below shows Nikaitchuq field's oil production and water injection history from January 2013 through December 2015. The drop in injection during 1Q15 is due to a water source wells ESP failure and is discussed in subsequent sections. Page 15 Eni Petroleum—Alaska Development Planned Activity (2009) Activity up to date (December 2015) OPP SID Total OPP SID Total Injector 8 12 20 8 13 21 CIL Producer 11 15 26 11 18 29 Disposal 1 1 2 1 1 2 3 Water Source 3 0 3 3 0 3 Total 23 28 51 23 32 55 Dual Lateral Well Paths 8 9 17 OPP = Oliktok point development path (onshore) SID = Spy Island Development path (offshore) Table 3. Total planned well count for Nikaitchuq Development Oil production at Nikaitchuq field has responded positively to waterflood. The positive waterflood response to date indicates that waterflood technology chosen as the main oil recovery strategy for this field continues to be working well. Figure 2 below shows Nikaitchuq field's oil production and water injection history from January 2013 through December 2015. The drop in injection during 1Q15 is due to a water source wells ESP failure and is discussed in subsequent sections. Page 15 Eni Petroleum—Alaska Development 39000 37000 35000 33000 31000 m 29000 m 27000 o 25000 23000 `w 3 21000 19000 17000 15000 13000 11000 9000 7 rL Q 7 q N O Z O ti ti Q is '> Q N O Z O LL a: Q `� '�i n q N O Z O Y ♦♦ n Figure 2. Nikaitchuq Field production and events summary 2013-2015 2. Reservoir Pressure Surveys at the Nikaitchuq Schrader Bluff Pool Similar to previous years reservoir pressure monitoring activities, during 2015 reservoir pressures were monitored by controlling intake BHPs as shown in Figures 2a & 2b for OPP and SID, respectively. These plots show how intake pressures have been gradually stepped down while monitoring signs of sand production, rising watercuts (WC) and gas -oil ratios (GOR) and balancing voidage across all sectors in the field. The spread in SID in 2015 reflects ESP lift capacity saturation as wells have responded to injection as shown in Figures 2c & 2d for OPP and SID respectively. Reservoir pressures were measured in new wells prior to placing them in service in 2015. Also, planned and unplanned downtime opportunities in 2015 made it possible to measure reservoir pressures during pressure fall off (PFO) and distributed temperature surveys (DTS) campaigns. The reservoir pressure measurements in the foregoing campaigns were used to support the Nikaitchuq reservoir model pressure map of 2015 shown in Figure 3. Page 16 Eni Petroleum —Alaska Development 39000 37000 35000 33000 31000 29000 27000 25000 23000 21000 19000 17000 15000 13000 11000 9000 950 850 750 .8 n a x m 650 550 450 BHP at the Depth of Heel —OP12-01 —OP17-02 —OP16-03 —OP05-06 —OP8-04 OP3-05 —OP4-07 —OP38-08 —OPIO-09 _. ....--.OP9-SI —OP14-S3 350 N 75 < Figure 2a. Intake BHP measurements in year 2015 for active wells at OPP 1400 1300 1200 1100 1000 a a 900 x m 800 700 600 500 400 BHP @ Heel —SPi6FN3 —SP10-FN5 —SP0&N7 - SP31-W7 SP21-NW1 SP04-SE5 SP01-SE7 SP2&NW3 SP36-WS —SP24-SEI —SP05-FN7 —SP27-N1 —SP23-N3 —SP22-FN1 —SP12-SE3 SP1&N5 SM -W3 S93 -W3 Figure 2b. Intake BHP measurements in year 2015 for active wells at SID Page 17 Eni Petroleum —Alaska Development • • On the injector side, wellhead pressures have been capped at an equivalent of 0.60 psi/ft. to avoid injection at pressures that can fracture the reservoir. 700 600 500 400 CL S 3 300 200 100 0 J-15 F -ISM -15 A-15 M-15 J-15 J-15 A-15 S-15 0-15 N-15 D-15 0106-05 0107-04 0111-01 0113-03 0115-S4 - 0120-07 0124-08 01-12 Figure 2c. Wellhead pressure measurements in year 2015 for injectors at OPP 700 600 500 400 a. S 3 300 200 100 0 J-15 F-15 M-15 A-15 M-15 J-15 J-15 A-15 S-15 0-15 N-15 D-15 5107-SE4 5111-FN6 5113-FN4 5114-N6 _S117-SE2 5119-FN2 6120-N4 5125-N2 5126-NW2 5129-S2 S132 -W2 — S134 -W6 5135-W4 Figure 2d. Wellhead pressure measurements in year 2015 for injectors at SID Page 18 Eni Petroleum —Alaska Development Injection deficit, due to an ESP failure on a source water well, is reflected in the declining THPs of the first quarter. Starting April, after the workover on the source well, injection THPs are stabilized. Figure 3. Pressure map of Nikaitchuq Field for 2015 Page 19 Eni Petroleum — Alaska Development 3. Pool Allocation Factors and Issues over the Year 2015 Production from all wells producing from the Schrader Bluff pool is commingled at the surface into a common production line. Theoretical production for individual wells from the pool is calculated on a daily basis by using well test allocation. Wells are tested, at least, twice per month for a total of 24 times per year per well. During 2015, 1,065 welltests were performed. Measurements are performed on a multiphase meter. Daily theoretical production for a well was calculated using the last valid well test and the amount of time a well was on production for a given day. For example, if there was a valid well test on the first of the month and another on the fifth of the month, the allocation factor for that well would be calculated on the first through the fourth of the month using the test on the first of the month. Subsequently, the allocation factor will be recalculated on the fifth of the month using the new valid test measured on the fifth. On the monthly level, our AVOCET Manager Production software sums up the allocated volumes from each time period between valid well tests. (Minutes on production/1440 minutes/day)*Daily Rate (stb/d) well test=Theoretical Daily Production The daily allocation factor for the field is calculated by dividing the actual total production for the day by the sum of the theoretical daily production for each individual well. Daily allocated production is assigned to each well by multiplying its theoretical daily production by the daily allocation factor. 1.140 1.120 1.100 1.080 1.060 -_ 1040 - 1.020 1.000 Ja�� �bA a�¢r 4 Qc� av Jc¢ ,JCA 009 January 1.0602 February 1.0463 March 1.0529 April 1.0708 May 1.0771 June 1.0681 July 1.0927 August 1.0730 September 1.0971 October 1.1154 November 1.1049 December 1.1066 Figure 4. Average field allocation factor trend for 2015 Page 1 10 Eni Petroleum —Alaska Development The average allocation factor for 2015 has been 1.08. During 2015 the allocation factor has crept up, due mainly to the associated back pressure increase on the meter in the test header loop as production volumes increased. Shown in Figure 4 above. 4. Reservoir Management Summary The Nikaitchuq OA reservoir development has focused on two major areas; replenishing reservoir energy by replacing the voidage created by fluid production with water injection, (productivity improvement through workover activities) and adding a second lateral to wells with single laterals. Reservoir energy is monitored by monitoring surface and bottom -hole pressures. In addition to surface meters measuring tubing pressures, Nikaitchuq oil producers are equipped with downhole gauges which allow real-time bottom -hole pressures to be monitored. Additionally, Resman tracer system pairs (oil and water tracers) are deployed in two OPP producers (OP17-02 & OP05-06) and six SID producers (SP10-FN5, SP16-FN3, SP21-NW1, SP31- W7, SP33-W3, SP36-W5), to help assess oil flow distribution along the wellbores and determine locations of water production. Only SP21-NW1 and SP31-W7 retain useful life. Eight injector wells (Figure 5), four in Spy Island (5111-FN6, 5119-FN2, 5113-FN4, S125 -N2) and four in Oliktok Point (0111-01, OP -12, 0113-03, 0124-08) have been also treated with unique Tracerco tracers in order to evaluate the water flow patterns, the breakthrough time and the sweep efficiency of the water injection. Three OPP injectors (0106-05, 0107-04 & 0111-01) and two SID injectors (5114-N6 & S120 -N4) are equipped with DTS fiber optics which determines the level of injectivity along the horizontal injection intervals of the injectors. Figure 5 below, shows the Nikaitchuq field map with Resman, Tracerco tracers and the wells injector with DTS fiber optic. Page 1 11 Eni Petroleum —Alaska Development Nikaitchucl Development Pattern ' December 2015 .mXC Figure S. Nikaitchuq map showing wells with Resrnan tracers and DTS Fibers 4'12016Fall PFO and 0TSData Acquisition Campaign Pressure and temperature data acquisition campaigns were conducted during the 3015 fall-off acquisition. During these campaigns, pressure fall-off (PFO) data collected. The Table 4 below summarized the acquisition dates for injector vveUsvvithDTSfibernpticinstaUed. A second opportunity to acquire shut-in reservoir pressures was during a planned shutdown in August 2015. With the exception of S132 -W2 which had a longer PFO duration due to the earlier Page | 1% Eni Petroleum —Alaska Development shut in for anti -collision concerns while drilling nearby SP28-NW3, the rest of the PFOB happened for approximately 37 hours from 08/21/2015 at 05:30:00 to 08/22/2015 at 18:30:00. Well PFO Start & End Dates Duration WH Pressure (PSI) Injector Start End Hours Start End 0111-01 03/19/2015 03/21/2015 96 139.2 0 0107-04 03/11/2015 03/14/2015 72 225.1 0 0106-05 03/11/2015 03/14/2015 72 287.0 203.0 S114 -N6 03/14/2015 03/19/2015 108 348.5 106.3 S120 -N4 03/11/2015 03/14/2015 72 208.5 79.8 Table 4.PFO/DTS Survey Date and Time during Fall 2015 Campaign A DTS analysis, based on temperature profiles was performed for 0111-01. The DTS acquisition has been carried out in March 2015 (Qiz2,625 bbls/d) during the periodical Fall-off activity (Figure 6 below) executed on the well. 1400 c r 1700 D a u 1800 rr v 1500 1100 e v goo 400 300 0111-01: injection data ,,,, 11 I��f., uV.' tel oll my d., gan I.' I,1. nfY apf In)«clad Walef aala(bbl,/d) WbmgVf s„ (O+i) lnlake P, r(,-) ) Figure 6. Rate&Tubing pressure plot from June 2014 to April 2015, and FO periods acquired by DTS ion coo 800 Q 400 � 300 w r, 700 100 The analysis has been focused on the detection of the possible differences from previous situation by means of a time lapse analysis. The preferential injectivity behaviour, already found in previous interpretations (2014), is still present and it could be mainly located at the heel and especially at the toe of the well. However, the comparison highlights that in March 2015 the injection profile reached a more balanced shape than before. This effect is due to an increase of injectivity in the middle zone of the reservoir, providing a more homogeneous distribution of the overall injection profile (Figure 6). Page 1 13 Eni Petroleum —Alaska Development L • Figure 7. 0111-01 Inflow zones contributions from 2015 DTS Transient model 4.2 Voidage Balance by Month of Produced Fluids and Injected Fluids on a Standard and Reservoir Volume Basis with Yearly and Cumulative Volumes A total of approximately 9.0 million barrels of oil was produced from the Nikaitchuq field during the year 2015 at an average daily production of 24700 bopd. Injected volumes of water during year 2014 were about 12.3 million barrels at an average daily rate of 33600 bwpd. During the first three months of the year there was an injection deficit, due to a source water well ESP failure, which is normalized starting April. Table 5 below summarizes the entire voidage replacement for the Nikaitchuq field in 2015. The spikes in the graph are typically associated with Alyeska proration days. Page 1 14 Eni Petroleum —Alaska Development Reservoir Interval water Rate Zone Color Water Rate Thermal Zone (% / total) (ft) (STB/d) (olo) Surface 0 ft - 0 ft 2623.747 STB/d 100.00 % 1 6000 ft - 6137 ft 59.637 STB!d 2.27 Po 2 6137 ft - 6250 ft 173.885 STB/d 2.82 % 3 6250 ft - 6470 ft 183.189 STB/d 6.98 % 4 6470 ft - 6630 ft 100.793 STB!d 3.84 °b 6 6630 ft - 67140 ft 154.827 STB!d 2.09 °b 7 6740 ft - 6985 ft 1139,382 STB/d 5.31 % 8 6985 ft - 7075 ft 39.455 STB.!d -1.50 °o 9 7075 ft - 7220 ft 86.639 STB! d 3.30 40 10 7220 ft - 7360 ft 164.987 STBld 2.48 °o 1 I 7360 ft - 7525 ft 196.707 STBA 3.69 °b 12 7525 ft - 7635 ft 67.660 STB/d 2.58 Qo 13 7635 ft - 7760 ft 20.566 STB/d 0.780/6 14 7760 ft - 7970 ft 1113.554 STBId 4.33 % 15 7970 ft - 8060 ft 31.909 STB/d 122 % 16 8060 ft - 8250 ft 56.040 STB/d 2.14 90 18 8250 ft - 8400 ft 175.158 STB!d 2_86% 19 8400 ft - 8480 ft 130.698 STB!d 1.17 °o 20 8480 ft - 8750 It 1162.685 STB/d 6.20% 21 8750 ft - 9070 ft 1254.147 STB! d 9.69% 22 9070 ft - 9350 ft 182.720 STB!d 3.15 °b 23 9350 ft - 9550 ft 1146.748 STB+d 559% 24 9550 ft - 9781 ft 168.219 STB/d 260% 259781 ft - 10104 ft 331.784 STB/d 12.65% 26 10104 ft - 10239 ft 1119.890 STB/d 457% 27 10239 ft - 10378 ft 162.466 STBd 6.19 °o Figure 7. 0111-01 Inflow zones contributions from 2015 DTS Transient model 4.2 Voidage Balance by Month of Produced Fluids and Injected Fluids on a Standard and Reservoir Volume Basis with Yearly and Cumulative Volumes A total of approximately 9.0 million barrels of oil was produced from the Nikaitchuq field during the year 2015 at an average daily production of 24700 bopd. Injected volumes of water during year 2014 were about 12.3 million barrels at an average daily rate of 33600 bwpd. During the first three months of the year there was an injection deficit, due to a source water well ESP failure, which is normalized starting April. Table 5 below summarizes the entire voidage replacement for the Nikaitchuq field in 2015. The spikes in the graph are typically associated with Alyeska proration days. Page 1 14 Eni Petroleum —Alaska Development C • 2 __.. 1.75 1.5 1.25 1 0.75 0.5 _---_- 0.25 0 1 -Jan -15 1 -Feb -15 1 -Mar -15 1 -Apr -15 1 -May -15 1 -Jun -15 1 -Jul -15 1 -Aug -15 1 -Sep -15 1 -Oct -15 1 -Nov -15 1 -Dec -15 Table 5.2014 Nikaitchuq field monthly production/injection volumes and voidage replacement ratios Page 1 15 Eni Petroleum —Alaska Development Monthly Subsurface Production Voidage Monthly Subsurface Injection Voidage Voidage Replacement Ratio Oil Water Total Water Injection Monthly Jan -15 802 210 1012 784 0.78 Feb -15 732 191 923 705 0.76 Mar -15 823 218 1040 658 0.63 Apr -15 759 221 980 907 0.93 May -15 724 233 957 1088 1.14 Jun -15 731 249 980 1098 1.12 Jul -15 798 288 1085 1165 1.07 Aug -15 753 310 1063 1100 1.04 Sep -15 810 332 1142 1154 1.01 Oct -15 840 374 1213 1218 1.00 Nov -15 816 363 1180 1190 1.01 Dec -15 833 370 1203 1216 1.01 2 __.. 1.75 1.5 1.25 1 0.75 0.5 _---_- 0.25 0 1 -Jan -15 1 -Feb -15 1 -Mar -15 1 -Apr -15 1 -May -15 1 -Jun -15 1 -Jul -15 1 -Aug -15 1 -Sep -15 1 -Oct -15 1 -Nov -15 1 -Dec -15 Table 5.2014 Nikaitchuq field monthly production/injection volumes and voidage replacement ratios Page 1 15 Eni Petroleum —Alaska Development ,� �yeie�6ci.OUM M SPl1-Witt R 5151-W6 M SFO 1 I SPO4SEYf Y YV-M4 5'. SGOI-SE] 5. SP61SE]LI 5? Rey 4Yhtmru Sa �➢:3Nw� 5. 5P.6lM'3 L, Rro cod mr, s] F%ceM saa • • Nikaitchuq Field - Drilling Schedule as at December 2015 fi16M lYn 1MLIe 9un:'., MBM bun b,lf5 Wk 2;tis M��11\ 66sM w.e a,afs T.. Yrns � BOOM Tue 9TSll15 9W YEI15 � SOIM gete2Y�5 SY Yffin S. � ' 6RM Set Sn YiS Stl WY,6 �� BOOM 9H 4111s WY ]f1,5 MOM WW IfbfS Tue 11iM15 i � ObM TUTllbfS SV SMS � B11M 9tl MYf5 Tue WfY,S ', , ]MM Tue&1Y15 Fn tblbl5 „ � S16M Fn ID'tY15 Fn 1- 1@ Fn 1— Sunt, 7 , rw Pm♦seon SWI ..... .. .....,., E]Ams Mimaw ♦ Du♦6onbw PmOreee W, LHeq S>W+� aYern tl1,eOa♦ ♦ M<Ta TM —____� NwW SumvY Fl a Oeed�ne B LTenw♦ ... ...... ... ... IMe,wMY ^^ Inuilve MNNM6 i. SVenl Sunm♦Y �1 IMO �._..._.....s. Pq Suzy Page 1 16 Eni Petroleum —Alaska Development Carlisle, Samantha J (DOA) From: Province Robert <Robert.Province@enipetroleum.com> Sent: Friday, June 24, 2016 10:02 AM To: Carlisle, Samantha J (DOA) Subject: RE: Surveillance Report Ok, thanks Sam. I will drop off original and copy today ... I am tardy in providing this to AOGCC. Dave is not happy with me. Also, I will email report to whom? Robert A. Province Manager, Land and Public Relations - Alaska Eni US Operating Co. Inc (907) 865-3350- Office (907) 947-3793 - Cell From: Carlisle, Samantha J (DOA)[ma iIto: samantha.carlisle@alaska.gov] Sent: Friday, June 24, 2016 9:58 AM To: Province Robert Subject: RE: Surveillance Report It's going good, how about you? Please send two copies, one original and one duplicate. Also, it would be really great if we could have a digital copy. Thanks! AOGCC Executive Secretary III (907)793-1223 -------- Original message -------- From: Province Robert <Robert.Provincenenipetroleum.com> Date: 6/24/16 9:48 AM (GMT -09:00) To: "Carlisle, Samantha J (DOA)" <samantha.carlislegalaska.gov> Subject: Surveillance Report Hi Sam, How goes it? How many copies of the surveillance report does AOGCC want? Thanks, Robert A. Province Manager, Land and Public Relations - Alaska Eni US Operating Co. Inc (907) 865-3350- Office • (907) 947-3793 - Cell • This message may contain information that is confidential, and is being sent exclusively to the Recipient. If you are not the designated Recipient, you are prohibited from utilizing, copying or divulging the information contained in this message,or taking any action whatsoever on the basis of the information herein. If you have received this message by mistake, we ask you to kindly inform the Sender and to delete the message. It is understood that, with regard to messages sent by its network, the Company is not responsible for any statements made or opinions expressed, that are not strictly related to the Company's operations. This message may contain information that is confidential, and is being sent exclusively to the Recipient. If you are not the designated Recipient, you are prohibited from utilizing, copying or divulging the information contained in this message,or taking any action whatsoever on the basis of the information herein. If you have received this message by mistake, we ask you to kindly inform the Sender and to delete the message. It is understood that, with regard to messages sent by its network, the Company is not responsible for any statements made or opinions expressed, that are not strictly related to the Company's operations. Carlisle, Samantha J (DOA) From: Roby, David S (DOA) Sent: Friday, May 15, 2015 2:36 PM To: Carlisle, Samantha J (DOA) Subject: FW: Confidentiality of 2014 Annual Reservoir Surveillance Report FYI Dave Roby (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.roby@alaska.gov. From: Province Robert [mailto:Robert.Province@enipetroleum.com] Sent: Wednesday, May 06, 2015 4:56 PM To: Roby, David S (DOA) Subject: RE: Confidentiality of 2014 Annual Reservoir Surveillance Report Dave, I take full responsibility for Eni's late submittal these past few years and have no excuse for the tardiness. I act as Eni's liaison with the State agencies and Eni's reservoir department relies on me to notice them on our deadlines. Since you asked for an explanation here are some reasons for the late submittals: This year's late submittal is due to my slip-up, I did not allow, in advance, enough time for Eni's reservoir group to prepare the report. Last year Eni's reservoir manager was out of the country most of March on leave of absence which delayed a timely submittal. And in 2013, I was away on bereavement in early March which resulted in me overlooking the April 1St deadline. Going forward, I can assure you that future Reservoir Surveillance Reports will be submitted by Eni on or before the April 1St deadline. I have instructed our office secretary to put a reminder on Eni's calendar of this particular deadline date. Thanks, Robert A. Province Manager, Land and Public Relations - Alaska Eni US Operating Co. Inc (907) 865-3350- Office (907) 947-3793 - Cell From: Roby, David S (DOA) [mailto:dave.roby(�balaska.gov] Sent: Wednesday, May 06, 2015 1:45 PM To: Province Robert Subject: RE: Confidentiality of 2014 Annual Reservoir Surveillance Report Robert, This report was not submitted by the April 15` deadline contained in Rule 12 of CO 639, and when I checked, I found out submittals from previous years have also missed this deadline. This needs some attention. Can you please explain why the reports are late and what Eni will do to ensure timely submittal of this report in the future? Thank you, Dave Roby (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.robv@alaska.gov. From: Province Robert [mailto: Robert. Province@enipetroleum.coml Sent: Tuesday, May 05, 2015 5:11 PM To: Roby, David S (DOA) Subject: RE: Confidentiality of 2014 Annual Reservoir Surveillance Report Dave, My apologies for putting confidential on Eni's reservoir surveillance report. That was a complete oversight and error of mine. For some reason, I confused the report with another report due the DNR and assumed it to be confidential. Please accept this email as Eni's request for the AOGCC to consider the 2014 Reservior Surveillance Report as public information and not confidential. Let me know if you need anything else from Eni. Thanks, Robert A. Province Manager, Land and Public Relations - Alaska Eni US Operating Co. Inc (907) 865-3350- Office (907) 947-3793 - Cell From: Roby, David S (DOA) [mailto:dave.roby(&alaska.gov] Sent: Monday, May 04, 2015 5:47 PM To: Province Robert Subject: Confidentiality of 2014 Annual Reservoir Surveillance Report Mr. Province, In looking back at the annual reservoir surveillance reports submitted for the Nikaitchuq Schrader Bluff Oil Pool Eni has not previously requested that any portion of the report be held confidential by the AOGCC, but for the recently submitted report covering 2014 operations you've requested that the entire report be held confidential. Can you please explain why you wish for this report to be held confidential? Thank you, Dave Roby Sr. Reservoir Engineer Alaska Oil and Gas Conservation Commission (907) 793-1232 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 Dave Roby at (907)793-1232 or dave.robv@alaska.aov. This message may contain information that is confidential, and is being sent exclusively to the Recipient. If you are not the designated Recipient, you are prohibited from utilizing, copying or divulging the information contained in this message,or taking any action whatsoever on the basis of the information herein. If you have received this message by mistake, we ask you to kindly inform the Sender and to delete the message. It is understood that, with regard to messages sent by its network, the Company is not responsible for any statements made or opinions expressed, that are not strictly related to the Company's operations. This message may contain information that is confidential, and is being sent exclusively to the Recipient. If you are not the designated Recipient, you are prohibited from utilizing, copying or divulging the information contained in this message,or taking any action whatsoever on the basis of the information herein. If you have received this message by mistake, we ask you to kindly inform the Sender and to delete the message. It is understood that, with regard to messages sent by its network, the Company is not responsible for any statements made or opinions expressed, that are not strictly related to the Company's operations.
