Aurora bringing successful wells online

West side Cook Inlet drilling includes Three Mile Creek discovery testing 5 million cf/d; Lone Creek at 16.4 million cf/d

Kristen Nelson

Petroleum News Editor-in-Chief

Aurora Gas is in the middle of a busy drilling season on the west side of Cook Inlet.

The company said in a July 26 statement that it has completed testing an apparent discovery at Three Mile Creek and drilled successful development wells at Moquawkie and Lone Creek. Gathering lines and production facilities are nearly complete at Three Mile Creek, and that field should be ready to go into production in early August, the company’s vice president of operations and engineering, Ed Jones, told Petroleum News.

The company has four onshore gas fields developed on the west side of Cook Inlet — Nikolai Creek, Kaloa, Moquawkie and Lone Creek — but only three in production. Jones said the company has about 6 million cubic feet a day of production currently, but would have about 12 million if it could move gas from Nikolai Creek which is physically connected to CIGGS, the Cook Inlet Gas Gathering System.

Aurora President Scott Pfoff said the company has permission from the Regulatory Commission of Alaska to use CIGGS on an interim basis, but still needs “a commercial deal with one of the two owners, Unocal or Marathon, and right now we don’t have one with either one of them. We’re trying to get one and so the field is shut in,” he said.

There has been a settlement in principle on CIGGS, but the final settlement won’t be submitted until late August.

An agreement needs to be in place by Nov. 1, said Dave Boelens, Aurora’s vice president of Alaska operations, if Aurora is going to be able “to sell gas to Agrium, because they’re relying on that pool of gas that they’ve assembled from all these different companies …” to keep the plant operating.

Pfoff said the company’s other fields are tied to the Beluga pipeline, with gas flowing north to a connection with Enstar at Beluga. But Aurora wants to put gas into CIGGS from other fields as well as Nikolai, and that would require that the Beluga line, which now moves gas north, flow bi-directionally. Marathon built the Beluga line in the early 1990s to move its gas north from CIGGS to Beluga, but now, Pfoff said, there is interest in having that line also move gas south to CIGGS and then across the inlet to Agrium and the liquefied natural gas plant. That would require some mechanical changes to the Beluga line, mainly added compression, so that the gas in the Beluga line is under high enough pressure to move into the CIGGS line, Boelens said.

“Gas doesn’t really care which way it flows,” he said, and with added compression gas could flow from either end of the Beluga line at the same time, moving both north to Beluga and south to CIGGS.

Success with the drill bit

In January, Jones said, the company completed the Three Mile Creek No. 1 well. As the first part of its rig program this spring, Aurora “added more perforations” and has the well ready to go. The company used a recently acquired well testing module at Three Mile Creek, and tested several Beluga sand intervals for a combined flow rate of approximately 5 million cf/d. Aurora owns a 70 percent working interest in Three Mile Creek and is the operator; Forest Oil owns the remaining 30 percent.

The five-mile gathering line connecting to an existing gathering line from the Lone Creek field to the Beluga pipeline and facilities should be completed in early August, Jones said.

Aurora said it is evaluating the possibility of “extending the gathering system to the south where the gas could be delivered directly to CIGGS.”

From Three Mile Creek Aurora moved the rig to the Moquawkie field, Jones said, “and drilled an offset to our old re-entry No. 1 well.” The Moquawkie No. 3 was drilled to a depth of 2,560 feet and completed in the Tyonek and Beluga sands, with combined flow rates of 5.5 million cf/d. This well is on the same pad as the earlier well, and will be on production by Aug. 1, the company said.

Best well to date

“We’re real pleased with what we’ve got there,” Jones said. (See photo this page.)

Aurora said the well would be tied in with a short gathering line to the central production facility at the Lone Creek No. 1 well pad.

The rig will next move to Aurora’s Aspen prospect. Jones said there were some oil wells drilled in the area, east of Moquawkie, but this is an exploratory gas well. The well will be drilled from a new pad, and should spud by Aug. 1 he said, with an expected depth of some 4,000 feet. “It’s based on seismic plus some old wells that were drilled in the late ‘60s, early ‘70s,” Jones said.

From Aspen, the rig will go on to drill development wells, either at Kaloa or Three Mile Creek, where there are two development prospects.

Aurora expects to drill six wells this season, Jones said.

There are multiple reservoirs in almost every well. They typically drill through eight Beluga sands and six Upper Tyonek sands, he said, and this improves the chances of finding gas. The Three Mile Creek wells, he said, had Upper Tyonek targets. Those were wet, “but we found a number of nice Beluga sands that we’ve completed in and I think we’re in seven individual stringers of Beluga there.”

Kenai oil prospect

“It’s an onshore offset to the Cosmopolitan play … and we’re going to use an existing pad,” he said.

Jones said Aurora is looking for a partner on the Kenai. “No deals yet,” he said, “but we expect that we will probably drill an oil well there within the next year for sure, maybe within the next six months.”

Pfoff said Aurora is “trying to bring up an industry partner … somebody that’s probably not a current player in Alaska,” as a partner on the Kenai oil prospect.

It’s 70 miles to the Tesoro refinery, Jones said, noting this is the same problem ConocoPhillips faces at Cosmopolitan.

“We are just south (of Cosmopolitan) right at Anchor Point,” he said, “… If we should make a discovery that would certainly make a pipeline look more feasible to ConocoPhillips.”

Aurora hasn’t given up on the peninsula, Jones said, but has “plenty to do” across Cook Inlet on the west side. “Right now we can get things on stream almost immediately there, so it makes a lot more sense to develop what we’re doing there.”

Aurora has also picked up acreage a little further north on the west side.

“We’re looking at that area as well,” Jones said. “We’re interested in whatever’s on that side … Again, trying to position ourselves so that every year we’ll have work to do.” Work on newer leases to the north, he said, would be “several years away yet.”

West side advantages

There are also a lot of existing roads on the west side, he said, put in originally for oil exploration and later for logging. If a pipeline can be laid out along a road, he said, it goes pretty fast: you lay the pipe out on the road and weld it up.

The trick, Jones said, is to avoid wetlands. “… construction is easier if you avoid the wetlands, so we’ll lay 10-20 percent extra pipe to avoid some wetlands, because it makes sense to do that.”

The west side season runs from about April to November.

If you go into December, Jones said, “then on the west side of the inlet you have the ice in the inlet,” and you can’t always get barges in and out. “And we rely on barging to get in and out.” The other issue is that the rig isn’t “winterized for zero-type temperatures.”

Boelens said they can work in freezing temperatures, “but we don’t want to do 10 below.” You can get a lot of work done, he said, starting in April and running into November or December. You avoid the coldest weather in winter, Boelens said, “then you start back up in the spring and plan your work and get your program lined up … and just go from one to the other. And that is what we’re doing.”

The logistics of west side work require some planning to get equipment barged in, Jones said, and makes costs 20-25 percent higher than they would be on the Kenai Peninsula. They barge in primarily from Nikiski, sometimes from Homer or Anchorage.