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Five Cook Inlet wells for Conoco in ’08 Looking to fulfill contract with state, company plans its busiest drilling season in 40 years at two legacy Cook Inlet gas units Eric Lidji Petroleum News
If ConocoPhillips follows through on early permitting requests, the company will drill more wells in Cook Inlet this year than in any year in 15 years.
The Houston-based major, the leading gas producer in Alaska, is currently asking the state for permits to drill five wells in Cook Inlet this year.
The company hasn’t been that active in Cook Inlet since 1993, when ARCO permitted and drilled five wells. Phillips Petroleum bought ARCO’s Alaska assets from BP-Amoco in 2000, before merging with Conoco in 2002.
Not counting those ARCO wells, though, ConocoPhillips hasn’t been this active in Cook Inlet since 1969.
Back then, Alaska was only 10 years into statehood, Cook Inlet production had only been around for a decade as well and North Slope oil production was just an idea based around a great new discovery.
Today, the Cook Inlet region is facing production declines that have already led to the closure of a long-time area fertilizer plant, and threaten the future stability of gas supplies in Southcentral Alaska.
The five wells come directly out of state and industry attempts earlier in the year to maintain Cook Inlet production levels high enough to keep the doors open at the liquefied natural gas plant on the Kenai Peninsula.
Wells planned for well-traveled areas Those wells are planned for familiar territory.
Of the five wells ConocoPhillips is currently working through the permitting process, three would be in the North Cook Inlet Unit and the other two would be in the Beluga River Unit.
With a combined cumulative production of nearly 3 trillion cubic feet of natural gas, North Cook Inlet and Beluga River are among the most productive gas units in Cook Inlet.
They are among the oldest fields in Cook Inlet as well, both discovered in 1962 during an exploration boom that followed the discovery of the Swanson River oil field in 1957. While companies went looking for oil, they mostly found large gas fields, like North Cook Inlet and Beluga River.
The decades of historic production since then mean both of those units have been well-drilled in the past.
Now the Alaska Oil and Gas Conservation Commission plans to hold three public hearings in May to decide whether or not to issue spacing exceptions for the five wells. These exceptions would allow ConocoPhillips to bypass regulations requiring new gas wells to sit more than 3,000 feet away from existing wells capable of tapping the same gas pool.
According to filings with the state, all five wells would seek to drain the Beluga channel belt sands. ConocoPhillips said geologic analysis suggests these belts are “too narrow to yield efficient drainage based on the current spacing for gas wells.”
NCIU: the most productive Cook Inlet gas unit The North Cook Inlet Unit is responsible for nearly 1.75 tcf of natural gas from the time it went into production in 1970 until the end of 2006, the most recent data available from the state.
ConocoPhillips is the operator and sole interest owner of the offshore Unit, which is located in the waters due east of the village of Tyonek.
Although the unit is prolific, production has risen and fallen over the years.
Natural gas production peaked at nearly 56 billion cubic feet in 1996, and hit a near peak of 55.5 bcf again in 2001. But those figures have been in steady decline ever since and the field produced just 38.1 bcf in 2006, according to state figures.
All three wells planned for North Cook Inlet — NCIU A-14, NCIU A-15 and NICU A-16 — start in section 6 of township 11N and range 9W of the Seward Meridian, but fan out to bottom-hole locations to the northeast, northwest and southeast.
BRU: number two in Cook Inlet The Beluga River Unit has produced more than 1 tcf of natural gas between the time it went into production in 1968 and the end of 2006. Production peaked in 2004 with 57.6 bcf, according to state figures.
ConocoPhillips operates Beluga River, but shares ownership equally with Chevron and the Anchorage electric utility Municipal Light and Power.
The onshore unit sits on the western banks of Cook Inlet, north of the village of Tyonek and northwest of the North Cook Inlet Unit.
The two wells planned for the unit target the Beluga formation from different locations.
BRU 243-34 would be in section 34, T13N, R10W SM, and target the top of the Beluga interval at an estimated total depth of 3,553 feet. BRU 211-26 would be in section 23, T13N, R10W SM and move to the southwest to target the top of the Beluga interval at an estimated total depth of 3,588 feet.
BRU 243-34 would be in section 34, T13N, R10W SM, and target the top of the Beluga interval at an estimated total depth of 3,553 feet. BRU 211-26 would be in section 23, T13N, R10W SM and move to the southwest to target the top of the Beluga interval at an estimated total depth of 3,588 feet. Five wells satisfy settlement agreement with state The five wells stem directly from an agreement signed in January by ConocoPhillips, Marathon Oil and the state, designed as a step toward getting the federal government to extend the export license of the liquefied natural gas facility on the Kenai Peninsula.
Under the agreement, ConocoPhillips must prepare to drill two wells in the Beluga River Unit this year as well as “additional wells in the North Cook Inlet Unit” if ConocoPhillips “determines that market conditions warrant.”
The agreement also requires Marathon to prepare to drill five wells this year: two in the Ninilchik Unit and three in the Kenai gas field. Marathon announced plans for those wells earlier in the year.
ConocoPhillips and Marathon are both awaiting regulatory approval for separate five-year gas supply contracts with the Enstar Natural Gas Co.
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