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One expansion approved, one deferred Prudhoe Bay unit expanded by 1,000 acres; expansion of Orion participating area deferred pending well data to prove up resource Kristen Nelson Petroleum News
As drilling moves to the northwest in the Orion accumulation in the northwest corner of the Prudhoe Bay unit on Alaska’s North Slope, BP Exploration (Alaska) has applied to expand the unit, and the Orion participating area, to accommodate planned drilling close to the boundary of the expansion area.
The Alaska Division of Oil and Gas approved expansion of the unit Feb. 18 — subject to a well being spud by September — but declined to expand the participating area until BP presents well data showing that the proposed PA-expansion area is capable of producing in paying quantities.
The expansion area is 1,000 acres within ADL 390067.
Participating areas are the portions of units from which production is occurring.
The division said BP originally applied for the expansions in May 2004, but did not respond to a request for additional information.
BP submitted an updated application to expand the Orion participating area and the Prudhoe Bay unit in August 2008.
The Orion PA, formed Feb. 1, 2004, includes portions of 14 leases, a total of approximately 18,842 acres. It is being developed from L, V and Z pads. Production from Orion is commingled with Prudhoe Bay initial participating area and Borealis production and processed at Gathering Center 2.
No wells have been drilled in the expansion area.
The division said it has approved Prudhoe Bay unit expansion subject to a well being spud within ADL 390067 by Sept. 1, 2009. If a well is not spud by that date the expansion area will automatically contract out of the unit.
The division will consider expansion of the Orion PA once data from the proposed L-223i well is submitted. The portion of ADL 390067 not committed to the unit is severed and the segregated portion assigned ADL 391462, effective March 1.
ADL 390067 was issued Sept. 1, 2002, for a seven-year primary term and 16.667 percent royalty; ownership is 26.36 percent BP Exploration (Alaska), 36.08 percent ConocoPhillips Alaska Inc., 36.4 percent ExxonMobil and 1.16 percent Chevron.
In November BP advised the division that it was considering drilling an injection well on ADL 390067 prior to drilling the proposed multilateral L-203 production well adjacent to ADL 390067. It is data from the injection well that the division is requesting prior to approving expansion of the Orion PA.
Schrader Bluff accumulation The Orion PA is in the northwest corner of the Prudhoe Bay unit and the acreage being added to the unit — and potentially to the PA — is on the northern edge of the unit. Thirty-eight wells have been drilled in the Orion PA: 11 oil wells, 25 injection wells and two wells suspended as of July 2008, the division said.
Other development wells targeting the deeper Ivishak and Kuparuk formations also provide geologic data on the Orion oil pool.
BP has drilled producing wells with two-to-six multilateral completions to access more individual sands and improve recovery efficiency, the division said, with multilateral wells “performing significantly better than earlier vertical or slanted wells in the Schrader Bluff formation.”
The division said initial rates of production from multilateral wells are generally higher and the production is sustained over a longer period.
The Schrader Bluff formation at Orion, known as the West Sak formation in the adjacent Kuparuk River unit, is composed of several sandstones in the Orion PA, some of which pinch out or are truncated based on current well spacing, the division said.
At a pool rules hearing before the Alaska Oil and Gas Conservation Commission in 2004, BP estimated original oil in place at Orion to be 1.07 billion to 1.785 billion barrels. The division said production from the Orion PA to date is 14.1 million barrels of oil or about 1 percent of the original oil in place.
BP told the AOGCC that primary recovery was expected to be 5-10 percent and that waterflood could increase recovery to 20-25 percent of original oil in place. The division said estimates for recovery from miscible gas injection have not been provided. Waterflood operations began in January 2004 and miscible gas injection began in October 2006, with 12.3 million barrels of water and 3.6 billion cubic feet of miscible gas injected to date.
Stage 2 drilling The division said BP has completed stage-one drilling and is well into stage two, which consists of additional drilling from L, V and W pads in the western area at Prudhoe Bay. I pad, northwest of L pad, is still under evaluation.
The division said no wells have been drilled in ADL 390067 and limited Orion PA drilling has been done adjacent to ADL 390067, but confidential data provided by BP “is sufficient to support a finding that the expansion area encompasses the minimum area that may contain a potential hydrocarbon accumulation.”
Since available data is insufficient to support a finding that the area is capable of producing or contributing to paying quantities, Orion PA expansion is not supported. The division said BP’s commitment to spud a well in ADL 390067 by Sept. 1, 2009, supports expansion of the Prudhoe Bay unit.
“Well data from a well drilled in ADL 390067 will identify the downdip extent of hydrocarbons in the area and determine the potential extent of the PA,” the division said.
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