Department of Natural Resources

DIVISION OF OIL AND GAS

550 W. 7th Avenue Suite 1100 Anchorage, Alaska 99501-3560

Main: 907.269.8800 Fax: 907.269.8939

January 5, 2018 Deborah Heebner, North Slope Environmental Specialist Hilcorp Alaska, LLC 3800 Centerpoint Dr. Ste. 1400 Anchorage, AK 99503 RE: LONS 88-002, Hilcorp, Milne Point Unit, L Pad Gravel Additions, Unit

Plan of Operations Amendment Decision Dear Ms. Heebner: The Alaska Department of Natural Resources, Division of Oil and Gas (Division), in accordance with Alaska Statute 38.05 and Alaska Oil and Gas Leasing Regulations (11 AAC 83) grants authorization to conduct activities on state lands as proposed in the Milne Point Unit (MPU). Plan of Operations (Plan) amendment application dated October 24, 2017 for the above referenced project. Scope: Hilcorp Alaska, LLC. (Hilcorp) proposes to add a total of 2.29 acres of additional gravel to L Pad in the MPU to install three turbine skids, associated infrastructure, and drill five additional development wells. The gravel will be added to L pad in three distinct sections, 0.2 acres (southeasterly side), 1.14 acres (southerly side), and 0.95 acres (northerly side). The purpose of this project is to increase the pad size to accommodate the turbine skids, diesel tanks, electrical equipment room, switchgear rooms and to accommodate the additional development wells. The MPU does not have any spare power for adding new production wells, so additional pad space is required for the facilities. The proposed activities are anticipated to occur between March 2018 and February 2019. Plan activities include: • Excavation of gravel from existing permitted sources • Placement of gravel on tundra by equipment working from existing gravel pad • Install vertical support members (VSMs) and pilings for turbine skids, fuel gas metering skid, fuel gas and diesel piping, electrical equipment rooms and switchgear room • Install fuel gas metering skid • Install diesel piping in existing F to L Pad water pipeline pipe rack adding up to three VSMs as required • Install fuel gas and diesel piping on VSMs on pad • Expand electrical skid at the entrance to L Pad, adding up to six VSMs • Install electrical equipment rooms and switchgear room

LONS 88-002, Hilcorp, Milne Point Unit, 1/5/2018 L Pad Gravel Additions Unit Plan of Operations Amendment Decision

Page 2 of 3

• Install Titan 130 Turbine Skids • Trench in gravel pad as required for power and communication lines • Trench in tundra for electrical and communication cables from the electrical skids at the entrance to L Pad • Install ancillary equipment as required • Drill additional development wells • Expand existing infrastructure to tie-in wells to existing production Location information: Milne Point Unit L Pad Meridian: Umiat Township: T13N Range: R10E Sections: 7 & 8 70.496717’ N, -149.63534’ W NAD83 ADL: 025509 L pad is located about 6 miles northwest of the Central Facilities Pad.

Agency review: The Division provided an Agency review and comment opportunity for the activities considered for authorization under this decision. The following government entities were notified on May 26, 2016 for comment on the Plan: Alaska Department of Fish and Game (ADFG), and DNR: Division of Mining Land and Water. The comment deadline was 4:30 pm Alaska time on November 14, 2017. No Comments were received. Public notice: Public notice of the Unit Plan of Operations Amendment and opportunity to comment, per AS 38.05.035, was published in the Alaska Dispatch News and the Arctic Sounder on December 4, 2017 with a deadline for comments on January 4, 2018 at 4:30 pm Alaska time. Additionally, a copy of the notice was posted on DNR’s web site, the Division of Oil and Gas’s website, and faxes of the public notice were sent to the Deadhorse, Barrow and Nuiqsut post offices. No comments were received. Conditions/Stipulations: In addition to the terms and conditions in the lease, this approval is subject to additional stipulations set forth by the following: 1. A certified As-Built survey of the activity shall be provided within one year of placement of the improvement. This As-Built must be both digital and hard copy. Please attach this amendment approval with the original decision. This unit operations amendment approval is issued in accordance with Alaska Statute 38.05, Alaska Administrative Codes 11 AAC 83.346 and 11 AAC 83.303. The Division reviewed this amendment under the unit regulation for the Plan, 11 AAC 83.346, and considers the factors set forth in 11 AAC 83.303(a) and (b). The amendment was also evaluated against the Milne Point Unit agreement for conformance. A person affected by this decision may appeal it, in accordance with 11 AAC 02. Any appeal must be received within 20 calendar days after issuance of the decision, as defined in

Milne Point

Shoal

Tractor Tracks

East UGNUProductionTest Pad

WestSak 17

EquipmentPad

Mine Site E(Ugnu Pit)

MPUM Pad

SimpsonLagoon

MPUN Pad

Milne Point 18-01

TexacoPrudhoe 1

WestSak 25

DS 3K

CFP

DS 3O

MPUD Pad

MPUB Pad

MPUE Pad

MPUA Pad

MPUG Pad

MPUH Pad

MPUS Pad

MPUI Pad

MPUJ Pad

MPUL Pad

MPUF Pad

MPU

Milne Point Road

C Pad

Cabin

MPU Pad-LArea of Detail

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34

252925

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13

35

15

1

36

41

26

8

34

27

36

27

3

28

32

3

26

9

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25

11

20

12

29

13

10

24

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14

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MILNE POINT UNIT

MILNE

POINT UNIT

149°24'0"W149°28'0"W149°32'0"W149°36'0"W149°40'0"W149°44'0"W70

°32'0"

N70

°30'0"

N 70°30

'0"N

70°28

'0"N 70°28

'0"N

70°26

'0"N 70°26

'0"N

Map Date: 10/24/2017

Milne Point UnitMPU PAD-L

Gravel Expansion for Power and Development Wells

Vicinity MapF

0 1 2Miles

0 1 2Kilometers

Alaska StatePlane Zone 4 NAD 1983 (Feet)

LegendExisting Pipeline (Above Ground)Gravel FootprintOil and Gas Unit Boundary

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Juneau

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Project LocationProject Location: Milne Point Unit - L PadLatitude (Decimal Degrees): 70.496717, NAD 1983Longitude (Decimal Degrees): -149.63534, NAD 1983Alaska State Plane Zone 4, NAD 1983 X = 1685008.82Y = 6031280.49Sec. 7-8, T13N, R10E, Umiat MeridianADL#: 025509Adjacent Property Owner: State of Alaska

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116 '

41 '

16 '

16 '

110 '

108 '

154 '

200 '

410 '

93 '

30 '30 '

A

A'

B'

B

D

D'

CC'

E'

E

FF

F'

L-01

L-02

L-03

L-06

L-07

L-04

L-08

L-09

L-10

L-12

L-13

L-11

L-17

L-29

L-24

L-16

L-25

L-32

L-33

L-37

L-45

L-49

L-47

L-46L-50

L-48

L-43

L-42

L-28

L-40

L-36

L-20

L-39

L-35

L-34

L-21

L-14

L-15 L-05MPU F-L PAD WI 8

ExistingElectrical Skid

Locations

L-53L-52L-51

L-56L-57

L-54

Additional Development

Wells

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149°37'55"W149°38'0"W149°38'5"W149°38'10"W149°38'15"W149°38'20"W149°38'25"W70

°29'56

"N

70°29

'56"N

70°29

'54"N

70°29

'54"N

70°29

'52"N

70°29

'52"N

70°29

'50"N

70°29

'50"N

70°29

'48"N

70°29

'48"N

70°29

'46"N

70°29

'46"N

70°29

'44"N

70°29

'44"N

70°29

'42"N

70°29

'42"N

Map Date: 10/24/2017

Milne Point UnitMPU PAD-L

Gravel Expansion for Power and Development Wells F0 100 200 300

Feet

0 10 20 30 40 50Meters

Alaska StatePlane Zone 4 NAD 1983 (Feet)

Legend

!(Well As-Built Conductor Locations(Bell Survey Oct. 6, 2017)

!( Additonal Development Wells! Surface Hole Locations (Existing)

Pipeline: MPU F-L PAD WI 8Existing Electrical SkidsProposed Pad Working SurfaceProposed Pad Shoulder

1 inch = 167 feet

This figure is conceptual and intendedfor permitting consideration only.Not to be used for engineering.

DATE:October 2017

SCALE:N/A

FIGURE:3

GRAVEL EXPANSION A-A’

ALL DIMENSIONS ARE APPROXIMATE

Not to Scale

TUNDRA

21

EXISTING GRAVEL

16’ 127’

143’

NEW GRAVEL8’

MILNE POINT UNITL PAD

GRAVEL EXPANSION FOR POWERCROSS-SECTIONS

HILCORP ALASKA, LLC

MPU-L_RigGravel_Fig3-XS AA' BB'.ai

GRAVEL EXPANSION B-B’Not to Scale

TUNDRA

21

16’ 16’308’

340’

NEW GRAVEL8’

DATE:October 2017

SCALE:N/A

GRAVEL EXPANSION C-C’

ALL DIMENSIONS ARE APPROXIMATE

Not to Scale

TUNDRA

21

EXISTING GRAVEL

16’ 30’

46’

NEW GRAVEL8’

MILNE POINT UNIT L PADRIG ACCESS GRAVEL EXPANSION

FOR POWERCROSS-SECTIONS

HILCORP ALASKA, LLC

MPU-L_RigGravel_Fig3-XS AA' BB'

MPU-L_RigGravel_Fig3-XS CC' DD'.ai

GRAVEL EXPANSION D-D’Not to Scale

TUNDRA

21

EXISTING GRAVEL

16’ 100’

116’

NEW GRAVEL8’

FIGURE:

DATE:October 2017

SCALE:N/A

GRAVEL EXPANSION E-E’

ALL DIMENSIONS ARE APPROXIMATE

Not to Scale

TUNDRA

21

EXISTING GRAVEL

14’ 93’

107’

NEW GRAVEL7’

MILNE POINT UNITL PAD

GRAVEL EXPANSION FOR POWER AND WELLS CROSS-SECTIONS

HILCORP ALASKA, LLC

MPU-L_RigGravel_Fig3-XS EE' FF'.ai

GRAVEL EXPANSION F-F’Not to Scale

TUNDRA

21

14’ 14’410’

438’

NEW GRAVEL7’

FIGURE: