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New Nicolai Creek gas well goes on line Aurora Gas has brought no. 11 well into operation and company applies for new PA and unit expansion at west Cook Inlet gas field Alan Bailey Petroleum News
Independent gas producer Aurora Gas has brought on line a new well, the Nicolai Creek No. 11, in its Nicolai Creek gas field, at the northern end of Trading Bay, on the western coast of Alaska’s Cook Inlet. The company has applied to the Alaska Department of Natural Resources to form a new west participating area for new gas pools accessed by the well, and has also applied to expand the Nicolai Creek unit to encompass the proposed new participating area. The No. 11 well and the gas pools that the well penetrates lie on the west side of the Nicolai Creek field, with the proposed participating area straddling the Trading Bay shoreline.
November startup According to the application for unit expansion, Aurora drilled and tested the new well in the fall of 2009, with the well starting to supply gas into the Cook Inlet basin gas market on the afternoon of Nov. 27. The new gas pools are in sands of the Beluga and Tyonek formations and add 2.08 billion cubic feet of proved reserves and 568 million cubic feet of probable reserves to the Nicolai Creek field, Aurora said.
Bruce Webb, Aurora Gas manager of land and regulatory affairs, told Petroleum News Jan. 5 that the well was currently producing from a completion in the Tyonek, and that Aurora had just upped the production from 1.5 million to 2 million cubic feet per day. The well could produce at a rate of 5 million to 6 million cubic feet per day, were all producing horizons to be opened up, Webb said.
Aurora has applied to the Alaska Oil and Gas Conservation Commission to comingle production from both the Beluga and Tyonek formations in the new well, to achieve maximum recovery of gas from the Tyonek. The company told the commission that the Tyonek produces at a low rate that would likely, by itself, become uneconomic quite quickly. But, when comingled with Beluga production, the Tyonek production ought to remain viable for much longer.
Formed 1968 Texaco originally formed the Nicolai Creek unit back in 1968 and produced gas from the field from 1969 to 1977. Unocal and Marathon took over the field in 1988, but Aurora subsequently acquired a 100 percent working interest in 2000, re-starting production from the field in 2001 as part of a company strategy to develop known but non-producing Cook Inlet basin gas accumulations. Aurora said that a state royalty reduction program, introduced in 1998, was a major factor in the move to re-start the field.
The 2001 re-start used one of Texaco’s original wells, but Aurora subsequently drilled and tested a sidetrack and a new well, and re-completed a second of the three original wells in the field.
In 2005, following two and a half years of negotiations with Alaska’s Division of Oil and Gas, the U.S. Bureau of Land Management and the Alaska Mental Health Trust Land Office, all of which had land and mineral rights in the Nicolai Creek area, Aurora obtained approval for unit expansion. In that expansion, the two discontinuous participating areas that the unit had originally encompassed were re-named as the north participating area and the south participating area. A third participating area, the Beluga participating area, was added to the unit. The Beluga participating area overlapped the south participating area but encompassed gas pools at shallower depths.
Transfer to state The unit expansion also involved the addition of a federal BLM lease, AA-8426, to the unit. However, in 2008 BLM transferred that lease and an adjacent lease, AA-85789, to the state, with the state taking over administration of those leases, as state leases ADL 391471 and ADL 391472, in June 2009.
The south participating area includes land within the first of those transferred leases, with the proposed new west participating area including land within the second of the leases. And the entire unit now lies within state land.
In its latest application for a further Nicolai Creek unit expansion, Aurora said that the proposed west participating area contains gas pools in a combination structural and stratigraphic trap, in which stacked sandstone units of the lower Beluga and upper Tyonek are draped over a four-way closure anticline, on the west side of a major geologic fault.
3,509 feet The Nicolai Creek No. 11 well was completed vertically to a depth of 3,509 feet, penetrating multiple gas-bearing Beluga sands at depths between 920 feet and 2,099 feet, and penetrating Tyonek sands at depths between 2,260 feet and 2,362 feet.
Seismic data and reservoir pressure data indicate that a geologic fault isolates the Beluga reservoir sands in the proposed new participating area from the equivalent reservoir sands in the adjacent, existing participating areas. And reservoir pressure data from the Tyonek sands of the proposed west participating area also indicate that these sands contain isolated gas, Aurora said.
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