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Division approves POE, PODs, POD amendment
Kristen Nelson Petroleum News
The Alaska Department of Natural Resources’ Division of Oil and Gas has approved two unit plans of development, an amendment for a third POD and a plan of exploration.
Milne Point unit On Nov. 17 the division approved Hilcorp Alaska’s 2022 POD for the Milne Point unit on the North Slope, covering Jan. 13, 2022, through Jan. 12, 2023.
The Milne Point unit was formed in 1979, the division said, and includes some 50,000 acres. It has been operated by Hilcorp since 2014. In 2020 Hilcorp acquired BP Exploration (Alaska)’s working interest and is now the sole working interest owner.
From September 2020 through August 2021, some 6,931 million cubic feet of natural gas and 12,895,000 barrels of oil were produced, an average of 35,329 bpd compared to 31,592 bpd for September 2019 through August 2020, an increase of 3,737 bpd, 12%, the division said.
Hilcorp proposed to drill as many as 17 wells and workover up to 20 wells during the 2021 POD, a plan amended in February 2021 to add five wells, 11 workovers and a coil tubing drilling program of seven wells.
“At present,” the division said, “Hilcorp has drilled 12 wells in the Schrader Bluff formation. Additional wells were deferred because of equipment availability and desire to observe production results.”
The division said 12 workovers have been completed and five coil tubing wells have been drilled. “Significant facility improvements were made to increase and maintain production.”
For the 2022 POD, the division said Hilcorp’s plans include drilling as many as 17 new wells in the Schrader Bluff formation and six coil tubing sidetracks, with workovers to be done as need to maintain production and significant facility improvements planned.
Pikka unit On Nov. 17 the division also approved Oil Search (Alaska)’s 2022 POD for its Pikka unit.
The Pikka unit was formed in 2015 and expanded in November 2016 to include a total of 77,744 acres on both state of Alaska leases and leases jointly owned by the Arctic Slope Regional Corp. and the state.
The DNR commissioner approved an extension of the Pikka unit term until June 1, 2025, in 2020. “OSA and previous operators have drilled a number of exploration and delineation wells within and around the unit area as well as constructed roads, pads, and bridges to enable future unit development,” the division said.
During the 2021 POD period, Oil Search continued to work toward future development with minor civil work, and front-end engineering and design was conducted.
The division said a final investment decision was planned for late 2021 or 2022 but had not been made when the 2022 POD was submitted.
During the 2022 POD Oil Search expects to make a final investment decision and will continued engineering and permitting for an expected 2023 drilling and construction season.
Kuparuk POD amendment The division approved an amendment to the Kuparuk River unit POD on Nov. 17.
The 2021-22 KRU POD was approved in July for Aug. 1, 2021, through July 31, 2022.
In submitting the amendment in September, ConocoPhillips said it is to satisfy requirements of the 12th expansion of the KRU in 2019. The amendment updates the company’s “understanding of the Torok (Moraine) formation and 2022 proposed drilling plans for the Nuna Expansion Area lands.”
In its amendment approval the division said the 2019 expansion was done “to include the tested but undeveloped resource within the Torok (Moraine) Formation.”
ConocoPhillips said during the plan of exploration period for the Torok (Moraine) it monitored two existing horizontal producer/injector pairs at DS-3S “to understand long-term deliverability and waterflood performance of the reservoir.” The wells have performed “at or above expectations for total liquid rate and have continued to demonstrate pressure support from water injection operations.”
Based on the performance of the existing pair, a new well pair is planned to spud in April 2022, the company said.
It said seismic data obtained in connection with its acquisition of the Nuna Expansion Area lands are in the final stages of reprocessing. “As part of this project these data have been merged and reprocessed with legacy datasets to provide a high quality, full coverage dataset over the Nuna lands and surrounding area.”
The Torok (Moraine) reservoir development plan will be included in the annual POD for Kuparuk going forward, the company said.
It also noted submission to the division of a confidential area update for the Coyote reservoir, which according to a map the company used in a presentation earlier in the year lies immediately east of Nuna on the western side of Kuparuk.
West Harrison Bay approval On Nov. 18 the division approved a 2021 plan of exploration amendment/second plan of exploration for the West Harrison Bay unit.
The unit operator is Shell Offshore Inc., and the application for an extension of the POE through December 2022 said the purpose of the extension was “to finalize commercial arrangements with other prospective project participants and designate a new Unit Operator.”
The proposed second POE would allow the new operator until the end of the 2023-24 winter drilling season to complete the first of two proposed wells required under the August 2020 unit agreement, with a new unit operator focusing on the Nanushuk formation as the primary target rather than the Torok formation as previously required, and also eliminate a requirement in the unit agreement that the unit operator acquire additional seismic over the “flex wave” area by the end of September 2022.
Upon evaluation of drilling completed in the 2023-24 and 2024-25 drilling seasons, the new operator would submit either a further POE for the West Harrison Bay unit or a POD by no later than the end of the year 2025.
The division said the approval was only for a general plan of exploration with specific field operations requiring separate approvals.
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