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NEWS BULLETIN

November 05, 2004 --- Vol. 10, No. 100November 2004

Gas flowing from Unocal’s Deep Creek Happy Valley pad

Gas is flowing from Unocal’s Happy Valley development at its Deep Creek unit southeast of Ninilchik on Alaska’s Kenai Peninsula.

Unocal Alaska spokeswoman Roxanne Sinz told Petroleum News that production began today at a rate of 3-4 million standard cubic feet per day. “We will ramp up production from additional wells as soon as the operation of our new facility allows,” Sinz said.

The Alaska Division of Oil and Gas approved formation of the Happy Valley participating area at Unocal’s Deep Creek unit Nov. 4.

The participating area is 1,240 acres, approximately 5.5 percent of the Deep Creek unit, the division said in its decision, and includes a portion of one state of Alaska lease and portions of three Cook Inlet Region Inc. leases.

Unocal completed its first well in the Deep Creek unit, the NNA No. 1, in January 2002, and tested several intervals which were wet or tight and subsequently converted the NNA No. 1 to a disposal well.

Unocal has since drilled eight Happy Valley wells. Two Lower Tyonek intervals in the Happy Valley No. 1 well tested at 4.1 million cubic feet per day, and Unocal continued to drill delineation wells in 2003 and 2004.

Under its first plan of development, covering Sept. 1, 2004, through Aug. 31, 2005, Unocal will develop reserves underlying the Happy Valley participating area and, the state said, “plans to explore the unit area outside of the participating area.”

Unocal has completed a pipeline connecting the Deep Creek unit to the Kenai-Kachemak Pipeline.

Two or more additional development wells are planned in the Deep Creek unit from the Happy Valley pad. The state said “Unocal may establish another pad to develop the reserves in the western portion of the Happy Valley PA.”

Planned exploration activities outside of the Happy Valley participating area “include both exploration drilling and seismic evaluation.”

The Star No. 1 well, drilled from the Star pad in the southern end of the Deep Creek unit in 2004, produced Tyonek formation gas at a rate of 500,000 cubic feet per day and the state said “Unocal plans to recomplete and test uphole zones” in that well during the first plan of development. “Further delineation of this southern accumulation may justify forming another participating area and expanding the unit area,” the state said.

Editor’s note: See full story in the Nov. 14 edition of Petroleum News.

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