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Unocal to start producing Happy Valley at Deep Creek in November Company applies for participating area at Kenai Peninsula unit; may add another pad Kristen Nelson Petroleum News Editor-in-Chief
Unocal has applied to the Alaska Division of Oil and Gas for creation of a Happy Valley participating area at the company’s Deep Creek unit on the Kenai Peninsula in Southcentral Alaska. The company told the division it plans to begin producing natural gas from Happy Valley in November.
Unocal is 100 percent working interest owner at Deep Creek, which is southeast of the community of Ninilchik. The state approved the unit at the end of 2001.
When Unocal announced its Happy Valley discovery in November 2003 it said average production is expected to be 20-25 million cubic feet per day and that the field contains approximately 75-100 billion cubic feet of recoverable natural gas. Development costs were expected to average around 50 cents per thousand cubic feet.
Unocal has proposed a 1,410-acre participating area at Happy Valley, including one state of Alaska tract and three Cook Inlet Region Inc. tracts. A pipeline is being built to connect the Happy Valley pad to the Kenai Kachemak Pipeline. “This installation is ongoing and is scheduled to be completed by November 2004,” Unocal told the division. Gas processing facility being installed The company said it has begun installation of a gas processing facility on the main Happy Valley pad. While facility start-up is not scheduled until November, Unocal said there will be “minor fuel gas use in October to run generators prior to start-up.”
Unocal told the division that commingled production will be required to make Happy Valley economic.
“Given the complexity and low rate of production from each individual reservoir and the lenticular and discontinuous nature of the sands, the only economically viable approach to development of these reservoirs will be to commingle production and combine the Lower and Upper Tyonek reservoirs into one participating area,” Unocal said.
It also told the division that combining the reservoirs “facilitates the seasonal deliverability of gas in the winter and storage of gas in the summer, significantly increasing the economic viability of the Deep Creek unit.” Nine wells drilled in exploration phase In the September 2004 through August 2005 plan of development for the unit, Unocal said nine wells were drilled in the Deep Creek unit under the exploration plan.
Happy Valley No. 1, drilled in 2003, reached a measured depth of 10,872 feet and a true vertical depth of 9,700 feet. It was completed in the Tyonek formation and tested 4.1 million cubic feet of gas per day.
Happy Valley No. 2, also drilled in 2003, reached a measured depth of 10,225 feet and a true vertical depth of 9,812 feet. It was completed in the Tyonek formation and tested 2.6 million cubic feet per day.
Unocal said no test rate has been established for five wells:
Happy Valley No. 3, drilled in 2004, had a measured depth of 11,345 feet and a true vertical depth of 10,772.
Happy Valley No. 4, drilled in 2004, reached 10,625 feet measured depth and 10,515 feet true vertical depth.
Unocal said Happy Valley No. 5 was “unsuccessfully” drilled in 2004 to objective.
Happy Valley No. 6 was drilled in 2004 to a measured depth of 11,798 feet and a true vertical depth of 10,400 feet.
Happy Valley No. 7 was drilled in 2004 to a measured depth of 9,118 feet and a true vertical depth of 7,140 feet.
Happy Valley No. 8 was drilled in 2004 to a measured depth of 8,900 feet and a true vertical depth of 6,743 feet. It tested 0.6 million cubic feet per day in the Tyonek formation and 1.2 million cubic feet per day in the Beluga formation.
Star No. 1 was drilled in 2004 to a measured depth of 9,130 feet and a true vertical depth of 8,640 feet. It tested 0.5 million cubic feet per day in the Tyonek formation. More development drilling Unocal said it plans to drill two or more development wells in the Happy Valley area and may drill additional development wells in the Star development area “depending on the results of the recompletion work and uphole zone testing in the Star No. 1 well.” A workover is planned for the Star No. 1.
Unocal said it may establish a new pad at Deep Creek approximately 4,000 feet west of the Happy Valley pad. “Primary gas treatment may occur on the new pad with final gas processing for sales occurring on the main Happy Valley pad.” Unocal may establish a water disposal facility adjacent to the NNA No. 1, which was tested in additional intervals with no commercial gas tests and has been converted to a disposal well. The company also said it may install gas compression facilities at the main Happy Valley pad.
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