AOGCC amends Deep Creek unit Happy Valley Beluga Tyonek rules

Kristen Nelson

Petroleum News

The Alaska Oil and Gas Conservation Commission has amended its pool rules for the Happy Valley Beluga Tyonek gas pool in the Deep Creek unit to eliminate a previous 10-acre well spacing requirement. Wells still cannot be drilled within 1,500 feet of the external boundary.

Hilcorp Alaska is the working interest owner and operator at Deep Creek, one of Cook Inlet’s smaller gas fields.

In June, the most recent month for which AOGCC production data is available, Deep Creek averaged 3.2 million cubic feet per day, 1.5% of inlet natural gas production in that month. AOGCC pool statistics on Deep Creek provide background on the field, which Union Oil Company of California brought into commercial production in late 2004. Production peaked at 13.5 million cubic feet per day in early 2005. Hilcorp became owner and operator Jan. 1, 2012.

In an Aug. 2 administrative approval, the commission said current spacing in the pool is 10 acres - along with the minimum offset from the external boundary of 1,500 feet.

“The Pool is nearly 8,000 feet thick and is developed with directionally drilled wells,” the commission said. The “10-acre spacing imposes constraints on development of the field that will make it more difficult to achieve ultimate recovery.”

Because of the 8,000-foot thickness of the pool, wells could cross each other with several thousand feet of separation and “won’t be producing from the same sand lenses and won’t be impacting each other,” the commission said, but the 10-acre spacing would prevent more than one well from being completed in the same quarter-quarter-quarter section.

The thickness of the Deep Creek field and “discontinuous nature of the sand lenses” in the pool mean “the operator needs maximum flexibility when it comes to drilling and completing wells in order to maximize ultimate recovery.”

The commission said the requirement that wells be completed more than 1,500 feet from the external boundary will continue to protect correlative rights.

Another change in these pool rules is the elimination of a sunset clause.

The commission said it voted at a public meeting in 2018 to eliminate the sunset clauses that had been included in several orders issued in the proceeding couple of years, so the sunset clause in this pool rule is eliminated.

- KRISTEN NELSON