Providing coverage of Alaska and northern Canada's oil and gas industry
August 2022

Vol. 27, No.34 Week of August 21, 2022

AOGCC OKs Pearl wells spacing exceptions

Kristen Nelson

Petroleum News

In an Aug. 10 order, the Alaska Oil and Gas Conservation Commission has approved Hilcorp Alaska’s application for spacing exceptions for the Pearl 8 and Pearl 9 exploration wells at Ninilchik.

The commission said the wells will be drilled, completed, tested and produced in the Pearl Undefined Gas Pool and the Ninilchik Beluga/Tyonek Gas Pool.

Ninilchik is one of Cook Inlet’s most prolific gas fields. In June, the most recent month for which AOGCC production data is available, the field averaged 33.8 million cubic feet of natural gas per day, 15.7% of inlet production which averaged 215.8 million cubic feet per day. In January 2012, when Hilcorp took over as Ninilchik operator, production from the field averaged 33.3 million cubic feet per day, 10% of Cook Inlet production which averaged 328 million cubic feet per day that month.

Hilcorp received approval from the Alaka Division of Oil and Gas July 29 for operations amendments covering work to bring the Pearl wells online, which is planned for later this year. The work includes adding a pipeline and gas production facilities to the Pearl Pad.

Spacing exceptions required

Hilcorp needed spacing exceptions from AOGCC because drilling objectives for the wells are “unproven reserves in the Beluga and Tyonek formations within the Pearl Undefined Gas Pool (outside the unit) and within the Ninilchik Beluga/Tyonek Pool,” the commission said in its order. “These drilling objectives cannot be reached by conforming to applicable statewide spacing regulations because of the narrow, discontinuous, and lenticular nature of the reservoir sands and their most prospective locations on the subsurface structure.”

The commission said an exception to regulatory well spacing provisions is necessary to allow drilling, testing, completion and production of “the Pearl Undefined Gas Pool and Ninilchik Beluga/Tyonek Gas Pool in the Pearl 8 and 9 exploration gas wells, in order to maximize ultimate resource recovery.”

AOGCC approval of allocation is required before production can begin.

The surface holes for the wells are outside the area covered by Conservation Order 701C. The bottomhole locations for both wells are within the CO 701C area and within the Ninilchik unit.

The commission said that prior to completion of the wells and prior to bringing the wells online, Hilcorp plans to apply to the Division of Oil and Gas to adjust the Ninilchik unit and the corresponding participating area to include lands “reasonably estimated to be productive,” or apply to form a separate unit and PA.

The Pearl Pad is some 4 miles northeast of Ninilchik on privately owned surface and subsurface. Hilcorp built the pad in 2017 to support a delineation program targeting an area south of the existing Susan Dionne-Paxton PA and drilled seven Pearl stratigraphic tests, two of which are being used as water supply wells, with the other five plugged and abandoned.

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