Vol. 25, No.19 Week of May 10, 2020
Providing coverage of Alaska and northern Canada's oil and gas industry

Hilcorp’s new development plan for Ninilchik bolsters gas output

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Kay Cashman

Petroleum News

On May 1, Hilcorp Alaska submitted its 16th plan of development for the Ninilchik unit to the Alaska Department of Natural Resources’ Division of Oil and Gas. The annual POD, which proposes more well work, some drilling but no major facility upgrades at the southern Cook Inlet unit, will be in effect Aug. 1 through July 31, 2021.

Seven fields account for 83% of Cook Inlet natural gas production, the largest being Ninilchik, which data from the Alaska Oil and Gas Conservation Commission shows averaged 38,154 thousand of cubic feet per day in March, 18% of inlet gas production, down 11.4%, 4,930 mcf per day, from a February average of 43,083 mcf per day, but up 2.4% from a March 2019 average of 37,244 mcf per day.

The Ninilchik unit straddles the Kenai Peninsula coastline for some 16 miles from near Clam Gulch to just north of Ninilchik. The unit is primarily offshore, with nine pads onshore - from north to south, they are Abalone, Falls Creek, Bartolowits, Blossom, Grassim Oskolkoff, Ninilchik State, Susan Dionne, Paxton and the new Pearl pad, which is on private land just beyond the southern boundary of the unit. (Pearl can be accessed via the road located at MP 131.2 of the Sterling Highway.)

Pearl 2A well out of mix

Since unit operator Hilcorp drilled the seven Pearl stratigraphic test wells in the summer of 2017, it has been planning to drill the Pearl 2A delineation well, incorporating findings from the vertical strat wells (one 540-foot hole and six 600-foot holes). Specifically, the company intended to drill the Pearl 2A development well in advance of mandatory unit contraction on May 31 of this year.

In its 16th POD Hilcorp said that production from Pearl 2A “will necessitate” both unit and participating area reconfigurations. In its 15th POD the company said there was a possibility the well would be drilled late in the period, but most likely would be done in the16th POD period.

In its proposed 16th POD, Hilcorp deferred drilling to an even later date - “late in the 2022 POD period, contingent on market conditions, but will most likely extend beyond the 2022 POD period.”

Kalotsa drilling anticipated

The Kalotsa 5 well is still scheduled, however. Hilcorp said it will be drilled as early as third quarter. This well will target the top of the Beluga structure and drill through to the Tyonek.

During the 15th POD period the Kalotsa 6 well, targeting the Beluga reservoir, was drilled and completed and began production at 3,100 mcf per day in October.

Wellwork projects finished during the 15th POD included the Kalotsa 3 well, where perforations were done in the Tyonek sands, which added about 1,000 mcf a day to production in August.

The same thing was done in the Tyonek sands in Kalotsa 4, adding 14,000 mcf per day in January.

Paxton well work

Paxton 2 work scheduled for July at the end of the 15th POD period includes pulling existing velocity string, setting a cast iron bridge plug, or CIBP, up to six perforations in the upper Tyonek, and rerunning velocity string.

The following work was done earlier in other Paxton wells under the 15th POD:

- Paxton 9, perforations in the Beluga BLG-53 sand, adding 200 mcf a day in. January.

- Paxton 4, perforations in the Beluga BLG-41 sand, adding 3,300 mcf in January.

- Paxton 9, additional perforations this month in the Lower Beluga sands.

Falls Creek, Frances, Abalone

In July at the end of the 15th POD a rig workover is planned for the Falls Creek 3 well to pull existing dual completion and recomplete the well to Lower Beluga sands.

In October perforations were added in the Beluga BLG-58/58A sands and reperforated the Beluga 59 sm1d, adding 100 mcf a day to Falls Creek 6.

In the 16th POD period that begins Aug. 1 a potential rig workover is planned to recomplete the Frances 1 well in the Beluga sands.

Former Ninilchik operator Marathon Petroleum identified a potential prospect, Abalone, just north of the Falls Creek participating area within the Ninilchik unit. Hilcorp drilled the Abalone 1 exploration well in 2013.

In its 16 POD Hilcorp said another Abalone well must be drilled before mandatory unit contraction, noting “it is unknown at this time when Hilcorp will complete this project due to market conditions.”

Grassim Oskolkoff, Blossom

A field study of the Ninilchik unit’s Grassim Oskolkoff participating area in early 2018 identified six potential locations and a re-evaluation of the Blossom 1 exploratory well. The results suggested that the Blossom 1 well might have missed its target due to geologic faulting. Unless market conditions change, Hilcorp does not expect to drill the six Grassim Oskolkoff wells or sidetrack Blossom 1 during the 16th POD period.

In fact, the company said, it will most likely drill the Blossom sidetrack in the 2022 POD or 2023 POD periods.

Grassim Oskolkoff workover and well work projects recently, currently and soon to be completed, include:

- GO 6, perforations in the Beluga BLG-58/58A sands and reperforation the Beluga 59 sm1d, adding 100 mcf per day starting in October.

- GO 8, due to the slugging/loading issues present in the well, Hilcorp began adding up to four perforations in the Middle Tyonek in April, followed by perforations in the Lower Beluga sands. If necessary, the installation of a velocity string in is planned for July.

Susan Dionne, Ninilchik State

Hilcorp is currently installing an additional 1480 HP compressor to add additional 6-8 million cubic feet a day capacity to allow for extra throughput from the Kalotsa and Susan Dionne pads, the company said in its 16th POD.

Hilcorp is also currently converting Susan Dionne 8 to a Class II disposal well.

Planned operations for this month at Susan Dionne 5 include installing downhole plunger lift to aid in water unloading, and pulling existing velocity string, setting CIBP, perforating Tyonek T-19, and rerunning velocity string in the Ninilchik State 1 well.

Long range plans

Hilcorp’s long-range development goal at Ninilchik is to delineate and bring all the unit’s underlying oil and/or gas reservoirs into production, thereafter maintaining and enhancing output, which is what the company has done at Ninilchik and in its other Cook Inlet and North Slope fields.

But, Hilcorp warned, additional Beluga and Tyonek well drilling is “highly dependent of the current well work results,” as well as current risked resource and economics, market demand, pipeline capacity, and competitiveness within Hilcorp’s gas project portfolio.

Note: All indications are the Alaska Department of Natural Resources will be open to relaxing unit termination deadlines given the current extraordinary circumstances.


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