This month in history: Unocal drilling 5th Happy Valley gas well
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20 years ago this month: Production from field in Deep Creek unit expected in November; company may also drill step-out at field
Kristen Nelson Petroleum News
Editor's note: This story first appeared in the April 25, 2004, issue of Petroleum News.
Unocal Alaska is drilling a fifth natural gas well at its Happy Valley pad in the Deep Creek unit southeast of Ninilchik on the Kenai Peninsula and will connect the field by pipeline to the Kenai Kachemak Pipeline at Ninilchik this fall.
Unocal Alaska's onshore gas exploration and development is focused at the Deep Creek and Nikolaevsk units, Chuck Pierce, vice president of Unocal Alaska, told Petroleum News April 19, 2004, and the company continues to "invest at Ninilchik with our partner Marathon as well, and we're drilling two to three wells there this year" as development continues.
Two wells were drilled at the Happy Valley pad in the Deep Creek unit last year, two more have been completed this year and a fifth is underway. One more well will probably be drilled there this year, Pierce said, bringing the total to six wells at that field.
"By the time we're finished, we'll have five to six development wells on the pad. Then we'll have facilities and a pipeline, and the pipeline will come right back down Oilwell Road, essentially using a DOT right of way that goes beside the road."
Nov. 1 is the scheduled startup for gas delivery from Happy Valley, and Pierce said Unocal is "on schedule to get started on or before Nov. 1 right now, and that way we'll have gas before the winter ... which we need to meet our Enstar contract requirements."
Three units on same trend The three units, Ninilchik, Deep Creek and Nikolaevsk, are all on the same geologic trend, Pierce said.
"The Nikolaevsk unit is just the next step to the south, same trend," he said. At Nikolaevsk Unocal has permitted an exploration well called Red, which the company plans to spud in June.
And Unocal is "evaluating drilling another exploration well in the Deep Creek unit to the south of Happy Valley," he said, depending on how other work goes, "so in the second half we might do a step-out away from Happy Valley inside the Deep Creek unit."
The Ninilchik, Deep Creek and Nikolaevsk developments are all targeted to providing gas under Unocal's contract with Enstar, he said.
Traditional gas business The company's older gas fields are dedicated to supplying gas to the Agrium fertilizer plant.
There is ongoing work at Swanson River, Pierce said, "and we're looking at drilling two new wells there."
These are infield wells, he said, part of ongoing development. The field was discovered in the late 1950s, and so this is just getting "the last bit of the development done there," he said.
On the west side of Cook Inlet Unocal has two small gas fields, Lewis River and Stump Lake. "All the gas from the west side properties, and from Swanson, and from Steelhead (in Cook Inlet)," goes to the Agrium fertilizer plant.
As at Swanson River, Unocal is doing work at Steelhead. "We're looking at some compressor work there," just typical on-going work, he said. "And we may drill another well out there ... that's under evaluation."
The oil piece The oil piece of Unocal's Cook Inlet business is primarily offshore, although Pierce said "we have a little bit of oil production from Swanson River." The oil comes from the McArthur River field and the Granite Point field on the west side, and that oil goes to the Drift River terminal and then across the inlet to the Tesoro refinery.
Unocal's oil business is "fully developed and what we're focused on there is optimization," he said: projects to optimize the wells, de-bottleneck the facilities. "So we really aren't looking at new wells, we're focused on optimization."
North Slope and Foothills On the North Slope Unocal has about a 5% interest at ConocoPhillips-operated Kuparuk and about a 10.5% interest at BP-operated Endicott.
The company has exploration acreage in the Foothills area, "we took it back in May of 2001, and it's more gas-oriented than oil and it doesn't make sense to drill any exploration wells until such time as there's a pipeline so we can get the gas to market," Pierce said.
While the company isn't interested in frontier exploration in areas such as the National Petroleum Reserve-Alaska, "we are interested in what I'd call close-in exploration, step outs from the existing field structure. ... So we are looking for satellite-type opportunities adjacent to the existing infrastructure and fields."
And, of course, he said, Unocal continues to participate in exploration within the Kuparuk unit.
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