Aurora Exploration LLC is tentatively planning a one-well development program at the Nicolai Creek unit this coming year, should its acquisition attempts succeed as planned.
The local company could potentially drill the Nicolai Creek No. 12 well in the Nicolai Creek North prospect to access deeper sands that are beyond the reach of existing wells.
As described in an annual plan of development submitted to the state Division of Oil and Gas on Dec. 8, Nicolai Creek No. 12 would be a directional well starting from a location south of the Nicolai Creek No. 10 and Nicolai Creek No. 3 wells and heading west-northwest to target the producing Beluga and Upper Tyonek intervals of those wells.
Previous work at the unit on the west side of the Cook Inlet basin suggested the Nicolai Creek No. 10 well is fault separated from the Nicolai Creek No. 3 well, which creates the opportunity to access additional reserves in the known producing formations. The company plans to review existing data to determine the economics of the project.
Aurora Exploration is in the process of acquiring the Nicolai Creek unit from Aurora Gas LLC out of bankruptcy and expects to resolve all outstanding administrative issues for the purchase in January 2018. (The two companies have similar origins but are not affiliated.) The Nicolai Creek unit was the most prolific unit in the Aurora Gas portfolio.
The current plan of development is the first submitted by Aurora Exploration.
Aurora Exploration also acknowledged that it “is currently in discussions with several entities that could result in a sale of partial working interest” in the Nicolai Creek unit.
The five currently producing wells at the unit produced 213 million cubic feet of natural gas between Nov. 1, 2016, and Oct. 31, 2017, according to the company. The most productive of the five was the Nicolai Creek No. 9 well at 113.4 million cubic feet and the least productive was the Nicolai Creek No. 2 well at 3.5 million cubic feet.
Workover program
In addition to the proposed development well, Aurora Exploration is also evaluating a workover program that would include several producing wells at the Nicolai Creek units.
The company would like to clean sand from the shut-in Nicolai Creek No. 3 well. But the proper coiled tubing tool “is not readily available in the Cook Inlet area at this time.”
The company is evaluating the merits of performing coil tubing cleanouts of the Nicolai Creek No. 9, Nicolai Creek No. 10 and Nicolai Creek No. 11 wells in the first quarter of 2018. All three wells have sand fill but not enough to significantly restrict production.
Aurora Exploration is also evaluating a plan to add gas storage to the unit.
If the company can acquire the appropriate lease, it would consider converting the Nicolai Creek No. 2 and Nicolai Creek No. 9 wells to storage. The project would have 2.5 billion to 3 billion cubic feet of estimated storage capacity and potentially a new well.
According to the company, “feasibility studies, leasing, permitting, and implementation are all possible” during the coming year but have not yet started and are not planned.
Aurora Exploration is also not planning any exploration activity at the Nicolai Creek unit in the coming year but told the state it remains “interested in acquiring and/or accessing this new seismic with plans to interpret and evaluate; and along with other geologic data, determine possible exploration, development, and extension drilling targets at all depths.”
In its plan, Aurora Exploration reiterated statements by Aurora Gas that the Nicolai Creek unit will become uneconomic by 2022 without new drilling or gas storage investment
