CITY OF
LONG
March 22, 2022
HONORABLE MAYOR AND CITY COUNCIL
City of Long Beach
California
RECOMMENDATION:
Long Beach Energy Resources
2400 East Spring Street, Long Beach, CA 90806
(562) 570-2000
C-8
Approve and adopt the Long Beach Unit Annual Plan (July 1, 2022 to June 30, 2023). (Citywide)
DISCUSSION
In accordance with Chapter 138 of the Statutes of 1964, First Extraordinary Session, an Annual Plan of Development and Operations and Budget for the Long Beach Unit (LBU) must be adopted by the City of Long Beach (City) and approved by the State Lands Commission (SLC).
Chapter 941, California Legislature, 1991 Sessions, amended Chapter 138 and requires the City and the Field Contractor, California Resources Long Beach, Inc. (CRLBI), to prepare a one-year Annual Plan (Plan), which includes an itemized budget of intended expenditures.
The Plan provides for the further development of the LBU through the Agreement for Implementation of an Optimized Waterflood Program that was entered into in November 1991 as part of the above legislation. Preparation of the Plan is a joint effort by City staff of the City's Energy Resources Department (Unit Operator), CRLBI (Field Contractor), and THUMS Long Beach Company (Agent for Field Contractor). A copy of the Plan is attached.
This matter was reviewed by Deputy City Attorney Richard F. Anthony on February 22, 2022 and by Revenue Management Officer Geraldine Alejo on March 4, 2022.
TIMING CONSIDERATIONS
Chapter 941, California Legislature, 1991 Sessions, also requires that the City submit formal copies of the Plan to the SLC for approval no later than March 23, 2022. To meet that requirement, City Council approval is requested on March 22, 2022.
FISCAL IMPACT
There is no net fiscal impact associated with this recommendation. Expenditures related to the plan are incurred in the Tidelands Oil Revenue Fund Group in the Energy Resources Department and are fully offset by net revenues from operations. Annual expense and revenue will be based on actual realized oil prices. If needed, the
HONORABLE MAYOR AND CITY COUNCIL
March 22, 2022
department will return to City Council with a request to increase appropriation offset by revenue. This recommendation has no staffing impact beyond the normal budgeted scope of duties and is consistent with existing City Council priorities. There is no local job impact associated with this recommendation.
SUGGESTED ACTION:
Approve recommendation.
Respectfully submitted,
<j?u2)~
ROBERT M. DOWELL
DIRECTOR OF ENERGY RESOURCES
Attachment: Long Beach Unit Annual Plan
APPROVED:
THOMAS 8. MODICA
CITY MANAGER
Long Beach Unit
THUMS Long Beach Company
(Agent for Field Contractor)
ANNUAL PLAN
July 1, 2022 through June 30, 2023
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ANNUAL PLAN
July 1, 2022 through June 30, 2023
Table of Contents
Page
Part I - Introduction…………………………………………………. 2
A. Plan Basis…………………………………………….… 3
B. Economic Projections……………………………………. 7
C. Major Planning Assumptions……………………………. 8
Part II – Program Plan Schedules……………………………………. 9
A. Range of Production and Injection……………………… 9
B. Anticipated Redrill Completions…………….…………... 10
Part III – Itemized Budget of Expenditures………………………….. 11
A. Development Drilling…………………………………….. 11
B. Operating Expense ……………………………….……. 11
C. Facilities, Maintenance, and Plant………………………. 12
D. Unit Field Labor and Administrative……………………. 13
E. Taxes, Permits, and Administrative Overhead………… 13
Part IV – Definitions………………………………………………….… 14
A. Modifications ………………………………………….…. 15
B. Supplements …………………………………………….. 15
C. Final Report and Closing Statement…..………………. 16
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Part I
Introduction
This Annual Plan (“Plan”) was developed to reflect anticipated activity levels during the fiscal period from July 1, 2022 through June 30, 2023 (“FY23”). It is being submitted as required by Section 5(a) of Chapter 138, Statutes of 1964, First Extraordinary Session, and as revised by passage of Assembly Bill 227 (Chapter 941, Statutes of 1991) and the Optimized Waterflood Program Agreement executed by the State of California, the City of Long Beach, and California Resources Long Beach, Inc. (“CRC”), the Field Contractor.
This Plan provides for drilling, producing, water injection, and other associated activities from offshore and onshore locations. The budget for these activities is grouped into the following five major categories:
Plan Category
Fiscal Year
2023
($ Million)
Development Drilling
$ 92.6
Operating Expense
$ 98.2
Facilities, Maintenance, and Plant
$ 62.5
Unit Field Labor and Administrative
$ 37.9
Taxes, Permits, and Administrative Overhead
$ 29.5
Total
$320.7
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A. Plan Basis
This Plan was developed based on the parameters outlined in the draft Program Plan for the period July 2021 through June 2026 and provides current and updated estimates of volumes, activity levels and expenditures for FY23.
Volumes
Oil and gas production vol umes are predicted to average 15.3 Mbopd and 5.8 MMcfpd, respectively, in FY23. Water production for the per iod is expected to average 990 Mbwpd and water injection is expected to average 1,045 Mbwpd.
Revenue and Expenses
A projected realized oil price of $60/bbl and gas price of $4.52/mcf are projected to result in revenues of $345.5 million. Budgeted expenses for FY23 total $320.7 million. Projected net profit in FY23 is $24.8 million.
Drilling
This Plan is based upon 36 producing replacement wells planned from existing cellars. The Plan sets a drilling pace equivalent to approximately 1.5 drilling rig over the fiscal year. The rig utilization could potentially change due to variations in oil price and program performance and additional funding might be required during the fiscal year. Workover rigs will perform drilling preparation and completion work.
The locations of production and injection wells are consistent with those given in the Program Plan (see attached Part II, Schedule 2B). Injection support for the drilling program will be provided through a combination of capital workovers (add pays and conversions), return to injection of idle injectors, and 4 drill injectors. As per current operational and regulatory practices, injection support will continue to maintain adequate Injection-to-Gross ( I/G) ratios to prevent subsidence and improve waterflood sweep efficiency.
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Maintenance
The majority of the facility projects anticipated during the Plan period are required to maintain current equipment capabilities or to increase efficiency of current operations. Other projects are planned to take advantage of technological and other improvement opportuni ties and to address changes in the oil field operating environment.
CRC has a Mechanical Integrity and Quality Assurance (“MIQA”) program to assess and maintain facility equipment and piping in order to ensure safety of personnel, operations, and/or the environment. The MIQA program is designed to meet internal and regulatory requirements and provide a high level of equipment integrity to reduce risk and increase reliability. Key elements include:
• Identification, evaluation, and determination of what equipment and/or process components are critical (i.e. their failure or malfunction could adversely affect the safety of personnel, operations, and/or the environment). • A process to e nsure equipment and compo nents comply with material specifications, design and construction codes or standards thus providing a measure of safety and reliability.
• Methodologies for inspecting, testing and maintaining the equipment and documenting such action.
The MIQA program is an integral piece of the overall flow of maintenance, from inspection/testing through maintenance and, when necessary, repairs or replacement. The program is supported through the use of a comprehensive database and work order system that provides control and management of all maintenance activities.
Projects will be undertaken to repair or replace equipment that is nearing its useful life. Items needing to be repaired or replaced include, but are not limited to, facilities piping, tanks, and vessels. These projects are consistent with past activities to keep the Long Beach Unit (“Unit”) facilities in safe operating condition.
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Abandonment
Wells and facilities with no further economic use will be abandoned to reduce the long-term Unit liability. This Plan provides funds for plugging wells to surface, in - zone, and conditional abandonments to maintain compliance with the CalGEM Idle Well Management Plan program (PRC 3206).
Safety, Environmental, and Regulatory Compliance
CRC is committed to conducting all aspects of its business in a manner that provides for the safety and health of employees, contractors and the public, and safeguards the environment in which it operates. In 2020, the National Safety Council awarded CRC THUMS Operations with an Occupational Excellence Achievement Award for achieving a lost workday case incident rate better than 50 percent of the industry average.
The National Safety Council also awarded CRC THUMS the Perfect Record Award which recognizes an operating area completing at least 12 consecutive months without a company employee receiving an occupational injury or illness that resulted in days away from work. These achievements are further demonstrated in the key safety programs, which include incident reporting and investigation, safety meetings and training, Management of Change (MOC), Process Hazard Reviews (PHR’s), emergency response planning and drills, and a behavior -based safety observation program.
Key aspects of the environmental program include compliance with applicable laws and regulations, including South Coast Air Quality Management District (“SCAQMD”) requirements, waste management and minimization, spill prevention plans and Business Emergency Plans (BEP’s).
The ef fectiveness and compliance of the above programs are ass essed through various internal audit programs. In addition, numerous agencies conduct periodic audits, including the CA State Lands Commission, Department of Transportation, State Fire Marshal, South Coast AQMD, Environmental Protection Agency, Long Beach Fire and Health Departments, Port of Long Beach and City of Long Beach Energy Resources Department. CRC THUMS participated in the re-occurring 5-year Safety and Oil Spill Audit, the main objective of which is to ensure that oil and gas
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production facilities are operated in a safe and environmentally sound manner. The audit, which started in 2017, was completed July 15, 2020 and showed that CRC THUMS has had continuous improvement in reducing findings a nd risk from previous audits and embraces the responsibility to provide and maintain a safe and healthy work environment for all employees, and the community.
Emergency response planning and preparedness is bolstered by partnering with Marine Spill Response Corporation (MSRC). MSRC is an independent, non -profit, national spill response company dedicated to rapid response to environmental incidents. MSRC has a major west coast base of operations in the Port of Long Beach and its equipment and expertis e are readily available for emergencies and are incorporated in onsite training exercises. The training exercises also involve a close working relationship with the United States Coast Guard and the California Department of Fish and Wildlife.
Environmental and community outreach is also a fundamental part of operations and each of the Islands received a Conservation Certification in 202 1 by the Wildlife Habitat Council (“WHC”). This certification is awarded to facilities that provide for public education a nd involvement through wildlife related projects and learning opportunities on the facilities. The certifications received by the WHC demonstrate the Unit’s continuing commitment to environmental stewardship and habitat conservation.
Projects relating to safety, environmental issues, or other situations necessary for meeting compliance with code, permit, or regulatory requirements will continue to be implemented under this Plan in accordance with all Unit agreements. In addition, CRC places additional emph asis on risk and system reviews and operational safeguards to assure reliable and compliant environmental performance.
Economic Review
Project expenditures during the Plan period are subject to economic review through the Determination and Authority for Expenditure (“AFE”) processes. All existing wells are frequently reviewed in light of changing crude prices to determine if they are economic to operate. Well servicing work is justified on economics and other conditions consistent with good engineering, business, and operating practices.
CRC remains committed to careful prevention of subsidence through strict adherence to existing regulations and voidage-driven injection requirements.
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B. Economic Projections
(Data in Millions of Dollars)
BUDGET
TOTAL
FY23
ESTIMATED REVENUE
Oil Revenue $82.3 $83.8 $83.8 $86.1 $336.0
Gas Revenue $2.6 $2.6 $2.5 $1.9 $9.5
TOTAL REVENUE $84.8 $86.4 $86.3 $88.0 $345.5
ESTIMATED EXPENDITURES
Development Drilling $16.5 $14.9 $31.8 $29.3 $92.6
Operating Expense $24.7 $22.6 $26.4 $24.6 $98.3
Facilities & Maintenance $16.4 $15.4 $15.9 $14.8 $62.5
Unit Field Labor & Administration $8.8 $9.0 $10.4 $9.7 $37.9 Taxes, Permits & Overhead $8.2 $5.9 $8.8 $6.5 $29.5
TOTAL EXPENDITURES $74.6 $67.9 $93.4 $84.9 $320.7
NET PROFIT $10.3 $18.5 ($7.1) $3.1 $24.8
BUDGET
FOURTH
QUARTER
FY23
BUDGET
FIRST
QUARTER
FY23
BUDGET
SECOND
QUARTER
FY23
BUDGET
THIRD
QUARTER
FY23
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BUDGET BUDGET BUDGET BUDGET
FIRST SECOND THIRD FOURTH BUDGET
QUARTER QUARTER QUARTER QUARTER TOTAL
FY23 FY23 FY23 FY23 FY23
OIL PRODUCTION
PRODUCED (1000 BBL) 1,371 1,397 1,397 1,436 5,600
(AVERAGE B/D) 14,901 15,184 15,518 15,776 15,342
GAS PRODUCTION
PRODUCED (1000 MCF) 535 536 520 511 2,102
(AVERAGE MCF/D) 5,819 5,821 5,775 5,617 5,758
WATER PRODUCTION
PRODUCED (1000 BBL) 89,543 89,654 89,347 92,785 361,330 (AVERAGE B/D) 973,298 974,503 992,747 1,019,614 989,945
WATER INJECTION
INJECTED (1000 BBL) 94,551 94,693 94,374 97,989 381,607 (AVERAGE B/D) 1,027,727 1,029,275 1,048,596 1,076,805 1,045,499 OIL PRICE ($/BBL) $60.00 $60.00 $60.00 $60.00 $60.00
GAS PRICE ($/MCF) $4.80 $4.80 $4.80 $3.66 $4.52
C. MAJOR PLANNING ASSUMPTIONS
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Part II
Program Plan Schedules
Schedule 2A
Range of Production and Injection
Fiscal Year 23
Long Beach Unit Program Plan, July 2021-June 2026
2023 13.1 - 14.8 808 - 912 5.8 - 6.5 852 - 962
FISCAL
YEAR
RANGE OF PRODUCTION AND INJECTION RATES
OIL MBOPD WATER MBWPD GAS MMCFPD INJECTION MBWPD
TAR PSI RANGE R PSI TE RMINAL PSI U. P./FORD PSI
2023 1500 2500 2500 2500
FISCAL YE AR
RANGE OF INJE CTION PRE SSURE S
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Schedule 2 B
Anticipated New Completions & Redrills
Fiscal Year 23
Long Beach Unit Program Plan, July 2021-June 2026
SG
Tar 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 Ranger West 1 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 2 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 3 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 4 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 5 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 6 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 7 0 - 0 0 - 0 0 - 0 0 - 2 0 - 0 0 - 0 0 - 0 0 - 0 0 - 1 0 - 0 8 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 9 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 10 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 11 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 12 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 13 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 36 0 - 0 0 - 0 0 - 0 0 - 1 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 37 0 - 0 0 - 0 0 - 0 0 - 1 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 Ranger East 14 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 15 0 - 0 0 - 0 0 - 0 0 - 2 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 16 0 - 0 0 - 1 0 - 0 0 - 3 0 - 0 0 - 0 0 - 0 0 - 1 0 - 0 0 - 0 17 0 - 0 0 - 0 0 - 11 0 - 0 0 - 0 0 - 0 0 - 0 0 - 2 0 - 0 0 - 0 18 0 - 0 0 - 0 0 - 2 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 20 0 - 0 0 - 0 0 - 2 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 21 0 - 0 0 - 0 0 - 4 0 - 4 0 - 0 0 - 0 0 - 0 0 - 1 0 - 1 0 - 0 22 0 - 0 0 - 0 0 - 0 0 - 2 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 33 0 - 0 0 - 0 0 - 3 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 Terminal 24 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 38 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 39 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 40 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 41 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 42 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 43 0 - 0 0 - 0 0 - 0 0 - 1 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 47 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 UP Ford 26 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 27 0 - 0 0 - 0 0 - 1 0 - 2 0 - 0 0 - 0 0 - 0 0 - 1 0 - 0 0 - 0 30 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 31 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 44 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 45 0 - 0 0 - 1 0 - 1 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 46 0 - 0 0 - 0 0 - 6 0 - 1 0 - 0 0 - 0 0 - 0 0 - 1 0 - 0 0 - 0 237 30 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 0 0 - 51 0 - 8
Total Total
Freeman
Min - Max
Pier J
Min - Max
Reservoir CRB Grissom
Min - Max
White
Min - Max
Chaffee
Min - Max
Freeman
Min - Max
Producers Injectors
Pier J
Min - Max
Grissom
Min - Max
White
Min - Max
Chaffee
Min - Max
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Part III
Itemized Budget of Expenditures
A. Development Drilling $92.6MM
The Development Drilling category of expenditures encompasses all replacement well drilling activity, as well as maintenance and replacement of drilling equipment within the Unit. Funds for development drilling are based on the assumption that 36 wells wil l be developed during the Plan year using a drilling pace equivalent to approximately 1.5 drilling rig. Additional funding might be required during the year for any incremental drilling activity.
Drilling and completing wells account for majority of the funding provided in this Category. Included in these activities is funding for rig move -in, drilling and casing, completion activities, drilling rig in -zone plugs and conditional abandonments, and unscheduled activity (fishing operations, cement squeezing, special logging, contract drilling services).
Exact specifications regarding the distribution of wells, bottom hole locations, and completion intervals will be determined by CRC. These decisions will be influenced by contributions from reservoir engineering personnel, results from ongoing engineering studies, and well performance. This information will be reviewed and approved in accordance with the various unit agreements during regularly scheduled meetings.
B. Operating Expense $98.2MM
The Operating Expense category of expenditures encompasses the ongoing costs of day -to-day well production and injection operations necessary for producing,
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processing, and delivering crude oil and gas, and for all electric power charges.
Expenses for this category are based on estimated oil production of 15.3 Mbopd, estimated gas production of 5.8 MMcfpd, water injection requirement of 1,045 Mbwpd, and water production of 990 Mbwpd. Anticipated operating expenses were based on operating seven workover rigs per month for servicing an average active well count o f 600 producers and 370 injectors. These rigs will also be used for the completion of approximately 21 investment wellwork projects . Funding for idle well testing is also included under this category.
The day -to-day costs for production and injection well subsurface operations represent approximately 22 percent of the funding provided in this category.
Included are funds for recompletions, routine well work, well conversions, in -zone plugs, conditional abandonments, and other charges incurred for well maintenance.
Electricity makes up 67 percent of the funds in this Category. Cost for electric power is based on estimated kilowatt usage of 616,000,000 KWh at an average rate of $0.1029/KWh. This cost includes all sources of Unit electrical power, including costs associated with the power plant and electric utility purchases.
C. Facilities, Maintenance, and Plant $62.5MM
The Facilities, Maintenance, and Plant category of expenditures encompasses costs for maintenance, repairs, upgrades, additions of surface facilities and pipelines, and costs for general field services.
Approximately 25 percent of the funding in this category is for general field and operating costs. This includes, but is no t limited to, charges for general labor, equipment rentals, and materials for general maintenance (painting, welding, electrical, etc.) of all Unit systems, such as oil gathering, treating, storage, and transfer; gas gathering and treating; scale and corro sion control; produced water handling; waste disposal; leasehold improvements; electrical system; fresh water system; fire protection and safety; marine operations; and automotive equipment.
Funds are also provided for chemical purchases and laboratory-related charges for chemical treatment of produced and injected fluids; gas processing charges; make- up water; security; transportation; small tools; and other miscellaneous field activities.
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Approximately 54 percent of the funding in this Category is for facility repair and minor projects. The majority of the facility repair and project investment is on the Tank and Vessel maintenance program and the remaining investment is focused on inspection, maintenance and repair in support of the MIQA program. This work includes regulated pipeline inspection surveys and evaluation, inspection and repair of cathodic protection systems , and infrastructure piping integrity inspections not covered by regulatory control. Projects include expenditures related to replacement, relocation, or minor expansion of existing injection piping, oil and water pumps and other infrastructure related investments.
D. Unit Field Labor and Administrative $37.9MM
The Unit Field Labor and Administrative category of expenditures encompasses costs for Unit personnel and other Unit support activities.
Funding for Unit personnel includes costs of salaries, wages, benefits, training, and expenses of CRC employees. These costs represent approximately 89 percent of the Category total.
Funding for Unit support activities includes, but is not limited to, costs for professional and temporary services necessary for the completion of support activities; charges for data processing; computer hardware and software; communications; office rent; general office equipment and materials; drafting and reprographic services; DOT drug and alcohol testing; special management projects; and other miscellaneous support charges.
E. Taxes, Permits, and Administrative Overhead $29.5 MM
The Taxes, Permits, and Administrative Overhead category of expenditures includes funds for specific taxes, permits, licenses, land leases, and all administrative overhead costs for the Unit.
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Funding is provided for taxes levied on personal property, mini ng rights, and oil production; for the Petroleum and Gas Fund Assessment; annual well permits and renewals; Conservation Committee of California Oil and Gas Producers Assessment; California Oil Spill Response, Prevention, and Administration fee; land leases; and pipeline right -of-way costs. These costs represent approximately 60 percent of the Category total.
Funding is also provided in this Category for all Administrative Overhead (including Unit Operator billable costs and CRC billable costs) as called for in Exhibit F of the Unit Operating Agreement.
PART IV
Definitions
This Annual Plan may be Modified or Supplemented after review by the State Lands Commission for consistency with the current Program Plan. All Modifications and Supplements to this plan will be presented by the Long Beach Energy Resources Department, City of Long Beach, acting with the consent of CRC, to the State Lands Commission in accordance with Article 2.06 of the Optimized Waterflood Program Agreement.
In addition, on or before October 1, 2023 the City of Long Beach shall present to the State Lands C ommission a final report and closing statement of the FY23 Annual Plan, in accordance with the provision in Section 10 of Chapter 138.
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A. Modifications
The City of Long Beach, acting with the consent of CRC, has the authority to cause the expenditures of funds for Unit Operations in excess of the amount set forth in the budget included in the Annual Plan, provided, however, that no such expenditure shall be incurred that would result in any category of expenditures set forth in the budget to exceed 120 percent of the budgeted amount for that category. A budget modification would be required for any expenditures which would cause a budget category to exceed its budgeted amount by 120 percent.
Any transfer of funds between budget categories or an augmentation or decrease of the entire budget may be accomplished by a budget modification in accordance with section 5(g) of Chapter 138 and Article 2.06 of the Op timized Waterflood Program Agreement.
Investment, facilities, and management expense projects commenced in prior budget periods, which are to be continued during the current budget period, may be added to this budget by a modification in accordance with Article 2.06 of the Optimized Waterflood Program Agreement.
B. Supplements
This Annual Plan contains all the investment and expense projects reasonably anticipated at the time the Plan was drafted and for which adequate detailed studies existed. Any significant and uncommon expenses not originally contemplated may be added to this budget or transferred by a supplement in accordance with Article
2.06 of the Optimized Waterflood Program Agreement. The amount of the supplement shall include sufficient funds to complete the projects.
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C. Final Report and Closing Statement
The final report and closing statement for FY23 shall contain a reconciliation by category as finally modified and the actual accomplishments, including:
1. Redrill completions by zone.
2. Facilities and capital projects.
3. Production by zone.
4. Injection by zone.