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Marathon finds gas in West Fork Tyonek Kenai Peninsula field formerly in production from Sterling; after shooting seismic Marathon drills deeper, tests 5-7 million cf/d Kristen Nelson Petroleum News Editor-in-Chief
Marathon Oil Co. continues to explore for natural gas on the Kenai Peninsula in Southcentral Alaska, where it operates a number of gas fields.
The company’s most recent exploration-type well in the Cook Inlet basin was drilled last year at West Fork, with Marathon’s Glacier No. 1 rig, Ben Schoffmann told Petroleum News March 29. In late 2004 the company tested 5-7 million cubic feet a day from the West Fork No. 3 well, said Schoffmann, who is operations superintendent for Marathon’s Alaska asset team.
“We perforated five sands in the Tyonek,” he said.
Cook Inlet Regional Corp. formerly produced gas at West Fork, but from the shallower Sterling formation. The Marathon well is a deeper extension or discovery, Schoffmann said.
State records show gas was discovered at the West Fork field in the Sterling formation in 1960. Production began in 1978 and continued through the early 1990s. More than 4.2 billion cubic feet of gas were produced from the Sterling A and B sands. West Fork needs to be tied in Schoffmann said most of Marathon’s Cook Inlet drilling is development wells at its Kenai, Ninilchik, Cannery Loop and Beaver Creek fields, and new wells at those existing fields typically average in the neighborhood of 5 million cubic feet a day.
The difference between wells at those fields and the West Fork well, he said, is that wells at producing fields “are pretty easy to tie in because there’s a significant amount of infrastructure already in place.”
At West Fork, he said, there is some older infrastructure, but the field is not currently able to produce without facility modifications and additions. One of the most significant remaining pieces of infrastructure, he said, is a small pipeline “that extends about seven miles from the West Fork area into the Enstar system.”
But there really isn’t much left in the way of production facilities, and that equipment would have to be installed.
The pad is there, and the road, and some remaining equipment, but a lot of the old equipment has either been dismantled or is inadequate, he said.
Schoffmann said Marathon shot seismic in the area in 2003, which helped identify potential. “This well was the first well drilled” based on that seismic information.
Asked if Marathon might do additional drilling at West Fork, he said Marathon wants to get the No. 3 well on production. “Experience with smaller type accumulations basically says that to really get a good handle on the size it’s best to put wells on production and watch the decline rate.” Based on the decline rate, he said, you can start “making some more firm estimates” of the size of the accumulation.
After the well is put on production, he said, it would then be possible to determine if any additional wells are needed.
The next step, he said, is to find a cost-effective way to bring the well on production. A fair amount of production equipment will be required, “so we’re trying to find the best model to do what we need to do to get it on production relatively quickly.”
The hope, he said, is to have the well online before this winter.
The gas would go into the Enstar system, he said, and would be odorized. “Off the Enstar system there are a number of customers,” he said. Other issues at Kasilof Marathon announced its gas discovery at Kasilof in August 2004. That discovery was made in early 2004, Schoffmann said. The discovery is a couple of miles offshore and Marathon drilled a dual-lateral well from an onshore location to test the potential.
“The difficulty with Kasilof is it is four miles away from the KKPL pipeline,” he said, so the Kenai Kachemak Pipeline would have to be extended, or another pipeline built, and “the permitting aspect of that pipeline significantly complicates matters.”
Marathon and partner Unocal own the Kenai Kachemak Pipeline. “We’ve been involved now for over three years trying to get the tariff finalized on that and have spent a lot of time, effort and money.” That experience, he said, doesn’t make you anxious “to jump into something else, especially where you question the ultimate recovery of gas that might be there.”
With the uncertainties and obstacles at Kasilof, Marathon is still trying to decide “whether or not it is worth the trouble of commercializing.”
Like West Fork, the size of the accumulation wouldn’t be known until a well is put on production, and the Kasilof wells “are significantly more costly because of the directional program — having to drill so far offshore.”
“There are more obstacles to sanctioning commercial development at Kasilof than there are at West Fork,” Schoffmann said. RCA looking at procedures The Regulatory Commission of Alaska, which regulates pipeline tariffs in the state, has been discussing revising its procedures.
Asked if proposed changes could have a positive impact for Kasilof, Schoffmann said he thought the commission has “identified some good issues and we’re certainly supportive” of steps the commission or the state can take “to look at simplifying and bringing more certainty to the process.” What isn’t known, he said, “is how long it will take to accomplish those reforms. And of course what the end result is no one knows.”
Marathon is “hopeful”, he said, “yet uncertain in the outcome.”
Schoffmann said from what he’s seen the reforms probably wouldn’t be complete this year, so while there may be longer-term impacts, “it’s difficult to imagine that they’re going to significantly change the landscape in the next few months.” EIS completed for East Swanson River The environmental impact statement has been completed for the East Swanson River prospect, “and the challenge there is basically there is no infrastructure whatsoever: no facilities or pipelines or anything,” Schoffmann said.
“What we’ve been doing is spending time evaluating what the right first step would be.”
At one time, he said, the inclination was to drill a well, but instead the company has decided to shoot seismic over the prospect, and permitting for that has now begun. When seismic would be shot, he said, depends on how long permitting takes.
Marathon has drilled 46 wells in the Cook Inlet basin since 1998 including about a dozen exploration wells and is drilling its 47th now. In 2003-04 the company shot 120 miles of 3-D seismic on the Kenai Peninsula.
The company’s Glacier drilling rig is what has made that drilling possible, Schoffmann said. In April the rig celebrates its fifth anniversary. It has drilled more than 320,000 feet. In the past couple of years the company has averaged 80,000 to 100,000 feet of drilling a year, including drilling by rigs other than the Glacier.
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