|
Hilcorp applies for Ninilchik pool rules Company asks AOGCC for changes to allow gas development flexibility within unit, also requests Beluga, Tyonek formation commingling Kristen Nelson Petroleum News
In a July 22 hearing representatives of Hilcorp Alaska told the Alaska Oil and Gas Conservation Commission that establishing pool rules for the Ninilchik gas field would allow the company to develop gas resources with less administrative work than is now required. The commission would still have to issue spacing exceptions for gas wells drilled within 1,500 feet of a unit boundary where ownership changed.
Hilcorp also requested permission to commingle natural gas from the Beluga and Tyonek formations, which, the company said, would allow for more complete production of the resource at the field.
The pool rules request is the result of work Hilcorp has been doing at the Ninilchik gas field on the Kenai Peninsula. The field, largely offshore but also with some onshore acreage, was unitized by Marathon Oil and Union Oil Company of California in 2001, with Marathon as operator.
Hilcorp Alaska landman David Duffy told the commission Hilcorp acquired Chevron’s working interest Jan. 1, 2012 (Chevron had earlier acquired Union Oil), and Marathon’s share Feb. 1, 2013, and now holds 100 percent of the working interest at Ninilchik.
Complex ownership Alaska Division of Oil and Gas geologist Julie Houle told the commission that the division requested a hearing on the pool rules request because of “diverse mineral ownership of the Ninilchik unit and the surrounding acreage to the east of the unit.” She said the reservoir is also complex making Ninilchik “one of the more complex units in Alaska” from both reservoir and mineral ownership perspectives.
Duffy told the commission the Ninilchik unit includes some 25,819 acres, 9 percent of which is federal, 77.5 percent state, 2.56 University of Alaska, 5.88 percent Cook Inlet Region Inc. and 13.12 patented fee lands. The fee lands are onshore on either side of the Sterling Highway, Duffy said, and are the result of early homesteads on the Kenai Peninsula which included mineral rights. As those homestead lands have been subdivided some of the mineral rights were sold with the lands. Patented fee lands include tracts as small as an acre, Duffy said.
Three participating areas Hilcorp senior geologist David Buthman said the requirement for spacing exceptions for so many of the Ninilchik wells has been an administrative headache.
The requested pool rules would permit Hilcorp to drill closer than 1,500 feet to another well within the unit, without having to request a spacing exception. In its application to the commission Hilcorp said it “cannot efficiently produce remaining reserves under AOGCC’s current well spacing rules. While existing rules and procedures may have adequately protected correlative rights and prevented waste (two of the commission’s charges) during the field’s initial development, they are not applicable to the effort necessary to explore and produce remaining hydrocarbon reserves.”
The company said the spacing exception requests “are administratively burdensome and are unnecessary to protect correlative rights, particularly ... in cases where a well is simply being optimized or reactivated within the same pool.”
Hilcorp said that by eliminating intra-pool spacing rules it will be able “to target smaller, un-drained portions of isolated fault blocks that cannot be reached by wells conforming to current spacing restrictions,” helping maximize recovery from bypassed pay while allowing continued production from established wells.
Recent drilling; new wells planned Buthman said five wells were drilled in 2013-14 and four wells recompleted or perforated. Six wells are in the planning stages.
With every well drilled Hilcorp learns more, he said, and data indicate the reservoir extends to the east beyond existing boundaries. That is true both in the Falls Creek participating area in the north and in the Susan Dionne-Paxton participating area in the south.
The company’s materials for the hearing noted that some of the 3,000-foot radii around gas productive or recognized potential gas zones extend beyond the participating areas and unit border, and said it plans to reconfigure the participating areas and unit after the 2014-15 drilling season.
Hilcorp hasn’t concentrated on the middle participating area, Grassim Oskolkoff, and doesn’t have new wells there, Buthman said.
On the issue of commingling Beluga and Tyonek production, Hilcorp Alaska reservoir engineer Christopher Kanyer said Hilcorp has seen good results from commingling in the nearby Deep Creek unit.
Hilcorp doesn’t want to leave resources unproduced, he said, and wants to commingle Beluga and Tyonek production so they don’t “abandon the Tyonek reservoir prematurely leaving reserves” from small accumulations behind in order to move onto Beluga production.
“We’re asking for the commingling so we can keep the wells flowing ... and add to ultimate recovery of the reserves,” he said.
In its application to the commission Hilcorp said there are 28 wells at the Ninilchik field, 21 currently online and seven shut-in. The company’s plans include returning shut-in wells to service; optimizing existing wells completions; pursuing stimulation opportunities; and identifying and then executing new drilling project.
| 