Vol. 27, No.20 Week of May 15, 2022
Providing coverage of Alaska and northern Canada's oil and gas industry

AOGCC OKs pool rules for Beluga River; Hilcorp plans more drilling

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Kristen Nelson

Petroleum News

The Beluga River gas field on the west side of Cook Inlet has been in production since 1968 under various operators, none of whom, until this year, requested that the Alaska Oil and Gas Conservation Commission establish pool rules.

Hilcorp Alaska, the current operator at Beluga, requested in March that the commission define a new gas pool, the Sterling-Beluga gas pool, within the Beluga River unit and requested rules for development and operation of that pool. (See stories in March 20 and April 17 issues of Petroleum News.)

In its May 5 order, establishing the Sterling-Beluga gas pool at the Beluga River unit, and setting out pool rules, the commission said some two-thirds of the 8,227.1 acres covered in the order are onshore with the remainder offshore along the western side of the Cook Inlet basin.

Owners of the Beluga River unit and the area covered by the order are Hilcorp and Chugach Electric Association, while landowners are the Alaska Department of Natural Resources, the U.S. Bureau of Land Management, Cook Inlet Region Inc., Chugach Electric and S&E Foster Properties LLC.

The commission said ownership at the unit changes with depth. From the surface down to 7,000 feet, Hilcorp owns one-third working interest and Chugach Electric two-thirds working interest, while below 7,000 feet, Chugach owns 100 percent working interest.

“The proposed pool only includes lands above the 7,000-foot depth,” the commission said.

Beluga discovery

The commission said the Sterling-Beluga gas pool “was unexpectedly discovered by Standard Oil Company of California’s” Beluga River 1 exploratory well (renamed BRU 212-35), drilled to 16,429 feet measured and true vertical depth. That company was searching for oil in a deeper objective near the center of the present-day unit, and that well “provided the first indication that large quantities of gas had accumulated in the area,” the commission said. On April 28, 1962, while circulating at 3,249 feet MD after drilling a portion of the upper Sterling, “the well blew out, spewing mud, sand, rocks, water, and methane gas at an estimated rate of about 50 million cubic feet per day for more than nine hours.”

In December of 1962, after the company had drilled, completed and tested the well, “Standard Oil announced a ‘significant gas discovery’ in the BRU and reported that BR 1 tested 4.3 million cubic feet per day from about 4,800 feet MD.” In December 1962 the well was completed and shut in.

Four additional wells were drilled between 1962 and 1964 to delineate the field, and between December 1963 and May 1964, one of the four, BRU 212-25, “flowed a reported cumulative total of nearly 150.5 million cubic feet of gas from upper Sterling perforations between 3,437 and 4,111 feet MD,” the commission said.

Regular gas production began at Beluga River in 1968 and for February 2022, “production totaled slightly more than 950 million cubic feet of gas from 15 wells, an average daily rate of about 34.1 million cubic feet,” with cumulative production from the field through February 1.39 trillion cubic feet, the commission said.

In addition to the 15 producing wells, two disposal wells are active, one Class I and one Class II.

Sterling-Beluga gas pool

The Sterling-Beluga gas pool as defined in the order is the accumulation correlating with the interval in BRU 224-13 from 3,345 feet MD to 7,000 feet MD.

The commission said this is some 3,650 “true vertical feet of Tertiary-aged sediments deposited by braided and meandering rivers and streams that are assigned to the Sterling and Beluga Formarions (in descending stratigraphic order).”

The Sterling reservoir sands are up to 200 feet thick, with broad lateral continuity and typically with excellent reservoir quality, 20% to 30% porosity, 100 to 2,000 millidarcy permeability and little cementation.

The underlying Beluga sands are generally much thinner, 3 feet to 50 feet thick, “laterally discontinuous, isolated, lens-shaped bodies deposited by smaller reivers and streams,” with generally lower reservoir quality - 10% to 20% porosity, 1 to 200 millidarcy permeability and often moderate cementation.

“To date,” the commission said, “much of the production from the field has come from Sterling sands. The generally thinner, less continuous, and more isolated overall nature of the remaining untapped Sterling and Beluga reservoirs is the basis for Hilcorp’s request for unrestricted well spacing in those portions of the proposed SBGP that lie more than 1,500 feet from the exterior boundary of the Affected Area” - the area covered by the order.

There are more than 100 individual sands within the proposed Sterling-Beluga gas pool “with various drive mechanisms and gas and water contacts (or lowest known gas when a water contact has not been detected),” the commission said.

Development plans

The commission said Hilcorp is proposing to drill four additional wells. The company drilled three wells at Beluga in 2020, requiring spacing exceptions because of the lack of pool rules.

Hilcorp ran repeat formation testers on two of the three 2020 wells, the commission said, and found sand bodies at original reservoir pressure within 1,000 feet of active wells, demonstrating “that there is still significant potential for finding untapped gas accumulations which cannot be produced from existing wells due to the discontinuous nature of the sands.”

The commission said that in addition to the new wells, Hilcorp plans to workover existing wells to extend the life of the field and increase ultimate recovery. :As is typical for gas field developments in the Cook Inlet Basin, Hilcorp plans to develop from the bottom up in the wells, opening and isolating sands as necessary to achieve economically viable production,” with may involving having multiple sand bodies open at the same time to achieve adequate production rates.

“The proposed pool is nearly 4,000 feet thick and a pore pressure fracture gradient chart provided by Hilcorp indicates that the potential exists for pressure from deeper sands to cause fractures to form in shallower sands if too thick of an interval is open for production at the same time in the same well.”

In its conclusions the commission said that because of the risk of fracture, limitations are necessary on the thickness of intervals that can be open for production at the same time “to ensure that shallower zones are not fractured by production from deeper formations should the well be shut in and crossflow occur.”

Pool rules appropriate

The commission said pool rules are appropriate, noting that Beluga River “is a very mature field that has been successfully developed in accordance with statewide relations, other than a plethora of spacing exceptions, for nearly 40 years. As such, the proposed SBGP will benefit from pool rules in order to ensure continued successful development.”

Well spacing not restricted by internal property boundaries or minimum distances between wells “will increase flexibility in placing wells, facilitate more efficient resource recovery” and will not promote waste, jeopardize correlative rights nor be an increased risk to freshwater aquifers.

The commission said there are some 45 shallow water wells within and near the Beluga River unit, with reported depths from 20 to 295 feet. Since surfacing casing is set and cemented at Beluga River unit wells at depths from 1,982 to 3,386 feet, shallow drinking water wells and shallow aquifers are protected.


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