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Unocal plans three pads at Nikolaevsk unit Red pad first of three planned gas exploration sites; company will also test for oil in deeper horizons Kristen Nelson Petroleum News Editor-in-Chief
Unocal is in the permitting stage for the first exploration pad at its “Red Gas Exploration Project” near Ninilchik on the lower Kenai Peninsula in Southcentral Alaska. The Red well is part of the company’s 2004 south Kenai gas exploration program and will be the company’s first exploration well in the Nikolaevsk unit.
Cook Inlet Region Inc. is the surface owner at the site of the Red pad and the state of Alaska is the subsurface owner, Unocal told the state in early March.
“While this is essentially a gas exploration program,” Unocal said, “the Nikolaevsk Unit Agreement requires Unocal to test at potential oil-producing intervals, which may include the Hemlock, West Forelands and Upper Cretaceous formations.” The company said the formations lie below the gas target zone at the Red No. 1 well.
Unocal said it has acquired oil and gas leases on the lower Kenai Peninsula from the state of Alaska, Cook Inlet Region Inc. (an Alaska Native corporation) and from a number of private subsurface owners.
The Red pad is the first in an exploration program that “includes up to three new exploration drilling sites for drilling up to four new subsurface targets,” Unocal said, with the Red No. 1 the first well planned.
Unocal said other possible wells in its 2004 south Kenai gas exploration program include: the Middle Happy Valley No. 1 and the Happy Valley Saddle No. 1 from the Happy Valley MID pad and the Blue No. 1 from Blue pad. Happy Valley is Unocal’s discovery in the Deep Creek unit northwest of the Nikolaevsk unit. Unocal said it may drill these additional delineation, appraisal and/or development wells based on drilling results at Red pad. The Blue pad would be the second pad at the Nikolaevsk unit. More than one well possible from Red pad The company also said that it is possible that more than one exploration well might be drilled from Red pad, although only the Red No. 1 is currently planned.
Unocal said it will begin site preparation in March, “with drilling planned to begin in early June 2004, depending upon road restrictions.” Drilling is expected to take up to three months.
The Red pad, in section 8, township 4 south, range 13 west, Seward Meridian, is approximately 14 miles southeast of Ninilchik and four miles northeast of the community of Nikolaevsk in an upland logged area, and is accessed by Tall Tree Road, then east along the Ninilchik Native Association 7000 logging road and then by approximately 0.8 miles of new access road on private property. Blue pad would be to the northeast in section 22-T3S-R13W, SM.
Red pad will be approximately 250 feet by 350 feet, two acres, but may be increased to up to 300 feet by 400 feet, 2.8 acres, “depending on results of drilling and well testing,” Unocal said.
Following drilling this summer, testing of the well is expected to run from September to November, but Unocal said it could last up to 18 months. If a second well is drilled, that would extend work at the site.
Unocal said it plans subsurface disposal of drilling wastes and is seeking to permit a Class II injection well, the NNA No. 1, on the Kenai Peninsula. In the interim, the company said, there is annular disposal capacity available at the NNA No. 1 site, and the NNA pad has an Alaska Department of Environmental Conservation-approved waste treatment plan for grind and inject.
If commercial reserves are not found, the well will be plugged and abandoned and the site cleaned and reclaimed to the satisfaction of the surface landowner.
A plan of development will be submitted if commercial reserves are discovered and a commercial field is defined.
The Red pad would be in the southwest corner of the Nikolaevsk unit, approved by the state at the end of January, extending lease terms in exchange for a drilling commitment. Two exploration wells and seismic are required over the next three years, with the first well required in the first year of the unit plan, i.e. before the end of January 2005.
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