Marathon looks to expand Kenai gas pad

Three-acre expansion would support 6 new development wells at the onshore unit; pad most recently expanded in 2003, 2004

Eric Lidji

Petroleum News

The Marathon Oil Co. wants to further expand a pad at the Kenai Gas field in preparation for at least six new gas wells and new production facilities.

The Houston-based company is proposing to add nearly three acres along the southern end of Pad 41-7, located near the center of the teardrop-shaped onshore Kenai unit, west of Soldotna. The expansion will require laying down 26,375 cubic yards of gravel.

Marathon most recently expanded the pad in two phases in 2003 and 2004, but “has fully utilized the available space on the pad from the previous expansion,” the company told the U.S. Army Corps of Engineers, the federal agency responsible for permitting new development on wetlands.

Marathon believes it can fit three more wells onto the existing pad, but said developmental drilling and seismic data suggest that additional wells are needed to fully drain the field.

The proposed expansion would run in an “L” shape along the southern boundary and southwestern corner to allow the six wells to hit bottomhole targets to the south and east. The company said placing the wells to the south would “lessen the risk of downhole interference with existing wellbores that would compromise safe drilling practices.”

The new production facilities, which are not detailed in the public filings, would sit along the southwestern corner of the pad, and would not be built until after the company completes one or two of the new wells in order to let the gravel settle.

Marathon said the expansion area would include space for a future “compressor installation.”

The Salamatof Native Association Inc. owns the surface rights to the expansion area.

Before the corps can issue a permit to Marathon, the project must be reviewed for consistency with the Alaska Coastal Management Program, which is accepting comments through May 27.

Third expansion at Pad 41-7

Since going into production in 1961, the Kenai unit and its associated pools have produced 2.34 trillion cubic feet of natural gas, according to production figures from the Alaska Oil and Gas Conservation Commission.

Production peaked in the early to mid-1980s with annual production of around 116 billion cubic feet, but over the past five years the unit has produced around 22 bcf annually.

During those years of peak production in the 1980s, Unocal expanded Pad 41-7 to the north, originally asking to add around 3.6 acres, but later scaling back to 1.75 acres.

Marathon added nearly four acres in 2003 and 2004, expanding to the north, west and south to target “promising pay intervals within the structure that have not been produced previously,” according to filings with the corps at the time.

In the current filings, Marathon said all the wells on that expansion area are in production and cannot be re-drilled to hit gas reserves to the south, except one, KBU 42-7, which the company hoped to finish re-drilling in April. Marathon received an AOGCC drilling permit for that well in April.

Marathon also said, “The last remaining well location on Pad 41-7 will be drilled in August 2008” and “The first drilling project planned for Pad 41-7 is scheduled for September 2008. Additional drilling projects are currently under review and will be permitted as developed.”

Marathon filed Notices of Staking with the Bureau of Land Management in January for a proposed KBU 41-6x well, and in April for a proposed KDU 9 well, both within the boundaries of the existing Pad 41-7.

In addition to work at Pad 41-7, Marathon is also drilling at Pad 41-18 located to the south. The company received AOGCC drilling permits for the KBU 41-18x well in February and the KBU 14-8 well in April.