New wells at Ninilchik
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Hilcorp increasing natural gas production at inlet’s most productive field
Kristen Nelson Petroleum News
Hilcorp Alaska continues to develop its Kenai Peninsula Ninilchik gas field, currently the inlet’s largest producer, on Feb. 1 applying to the Alaska Division of Oil and Gas and to the Alaska Oil and Gas Conservation Commission to drill three new wells at the field.
Hilcorp’s work at Ninilchik shows up in gas production numbers. The most recent AOGCC production data available, for December, shows that from November to December this year, gas production at Ninilchik was up 29.4%, and from December 2021 to December 2022, production was up 56.2%.
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The company told the division its proposed amendment to the Ninilchik plan of development and operation “is in response to results from a recent gas discovery in the Pearl Structure within the Ninilchik Unit,” with sufficient gas reserves identified in Beluga and/or Tyonek formations to support three additional wells in the 2022 POD period.
Hilcorp identified the wells as the Paxton 12, Pearl 10 and Pearl 11 and said they would be drilled during the second quarter of 2022, with drilling from the Paxton and Pearl pads.
AOGCC application Hilcorp applied to AOGCC for drilling permits for the wells, which require spacing exceptions because of the wells’ locations. The company said it planned to spud the first well on or around March 1.
The Paxton 12, Pearl 10 and Pearl 11 “are delineation wells targeting unproven reserves in the Beluga and Tyonek Formations within the Undefined Gas Pool and within the Beluga/Tyonek Pool” defined in conservation order 701C, the company told the commission.
Hilcorp said the wells are some 2.5 miles north of Ninilchik in the Pearl structure located partially in the Ninilchik unit/field.
Paxton 12 will be drilled from the Paxton pad within the Pearl structure and inside the Ninilchik unit/field, the company said. Pearl 10 and Pearl 11 will be drilled from the Pearl pad, also within the Pearl structure, but outside the current Ninilchik unit/field, although the bottomhole of each well will be within the Ninilchik unit/field.
Pearl is the newest producing pad at Ninilchik.
AOGCC data show three wells at Pearl came online in December - Pearl 2A, Pearl 8 and Pearl 9 - accounting for 26.4% of Ninilchik natural gas production in that month. Ninilchik was the most productive Cook Inlet gas field in December, with 21.4% of inlet production.
Discontinuous channel sands Hilcorp told the commission it anticipates that productive sands in the Paxton 12, Pearl 10 and Pearl 11 “will be discontinuous channel sands in the Beluga and Tyonek Formations within both the Undefined Gas Pool and the Beluga/Tyonek Pool” and said spacing exceptions are required because production would not be possible from wells conforming to applicable spacing exceptions.
Production, the company said, would be from “a series of thin, discontinuous, stacked channel sands with a low net-to gross ratio. The channel belt widths are too narrow to yield efficient drainage based on the current spacing for gas wells.”
Hilcorp owns 100% working interest in the affected oil and gas leases and is the Ninilchik unit operator. The state owns 100% of the mineral interest in ADL 384372, the offshore lease in which the bottomhole of Pearl 11 is located. The other two wells have 100% privately owned onshore subsurface, Hilcorp said in its application to the commission. Pearl 10 has a bottomhole northeast of the Pearl pad and Paxton 12 has a bottomhole south, southwest of the Paxton pad. Other Paxton wells have bottomholes offshore north of the pad.
Hilcorp said that with successful completion of the three wells, production will be allocated to the Pearl participating area, once that PA is approved.
Hilcorp told the commission it proposes to allocate royalties to all lease owners/landowners based on tract allocation percentage, mineral ownership and lease royalty, and said it would establish and maintain an interest-bearing escrow account for non-participating owners/landowners.
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