AOGCC fines Hilcorp for Beluga River shallow well perforations

Kristen Nelson

Petroleum News

The Alaska Oil and Gas Conservation Commission is proposing to fine Hilcorp Alaska $88,000 for perforating two Beluga River wells, BRU 241-23 and BRU 211-35, at shallower depths than those approved. The agency said in its June 26 decision that the fine is 10% above past fines because of similar unauthorized changes to approved programs.

Hilcorp requested an informal review and acknowledged the unauthorized perforating. The company said in a March 12 letter to the commission that it could find no record of correspondence with the agency approving perforating outside the zones originally approved.

The company said one of the wells, BRU 211-35, produces from a U.S. Bureau of Land Management lease and it submitted separate requests to AOGCC and BLM for the work, with the BLM request including shallower perforations than those included in the AOGCC request.

Hilcorp said that in the future it will maintain a single request procedure for both agencies to ensure consistency.

In a May 14 notice of proposed enforcement action AOGCC told Hilcorp that it "requires that perforations be limited to approved depth ranges to ensure the protection of shallow formations from fracturing by higher pressure deeper formations."

AOGCC said factors considered in determining the penalty include the company's "awareness that the perforated depths were outside the sundry approved depths, the potential threat to shallow formations, Hilcorp's track record of regulatory non-compliance, the need to deter similar behavior in future operations, and Hilcorp's lack of effort in correcting (discovering or communicating) the violations."

The commission said it discovered the violations in reviewing operations forms submitted by Hilcorp for the two wells.

--KRISTEN NELSON