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

Vol. 27, No.46 Week of November 13, 2022

Producers 2022: Gardes’ Vision’s takes over North Fork pipeline

Plans to inject produced water to grow CI field’s natural gas production

Kay Cashman

Petroleum News

Bob Gardes of Lafayette, Louisiana, entered Alaska in September 2020 with the purpose of becoming a natural gas producer by acquiring bypassed and/or underdeveloped gas deposits in the Cook Inlet basin.

At that time Gardes purchased the southern Kenai Peninsula North Fork unit from Cook Inlet Energy, or CIE, a Glacier Oil and Gas company. The 2,602-acre unit produces from a single participating area and is one of Cook Inlet’s smaller gas fields.

Gardes is first and foremost looking for natural gas, not oil. He told Petroleum News that he views the Cook Inlet basin as one of four top gas regions in the world.

“We think the future in the U.S. is gas. It burns 98% cleaner than oil and coal. It is a transformational resource,” Gardes said. “There is a lot of bypassed gas here because the deposits weren’t big enough” for companies to bother with them.

On May 1, 2021, Gardes-owned Vision Operating took over as operator of the North Fork unit, which consists of five state leases that are held by another Gardes company, Vision Resources.

While Gardes, per its website, is “currently negotiating” additional “potential acquisitions in the Cook Inlet region,” its operations crew on the ground, led by Mark Landt, has had its attention focused on enhancing production from the company’s North Fork unit.

RCA issues final order

Recent news from Gardes is that effective July 27, 2022, the Regulatory Commission of Alaska issued a final order transferring CIE’s controlling interest in Anchor Point Energy, owner of the North Fork unit’s 16-mile pipeline, to Gardes Holdings.

North Fork was first brought online in 2011 by a Bill Armstrong joint venture, even though the field was first unitized by Standard Oil Co. of California in 1965.

In February 2021 Vision Resources entered into a five-year natural gas sales and purchase contract with Alaska Pipeline Co. that resulted in APC’s utility affiliate Enstar Natural Gas continuing to distribute gas from North Fork after CIE’s contract expired on May 10, 2021.

Could be largest CI producer

On Dec. 21, 2021, Vision Operating applied to the Alaska Oil and Gas Conservation Commission, or AOGCC, for a Class 2 underground injection control well permit at its North Fork unit.

The application indicated that Vision has plans to expand natural gas production from North Fork.

The application, signed by Vision Operating President Stephen Hennigan, said there are eight existing North Fork unit wells, with as many as 22 producing and pressure maintenance wells possible, up to two disposal wells and ancillary equipment and production processing and handling facilities for oil, gas and water.

Vision said at the time that the unit averaged some 3 million cubic feet per day of natural gas, and production with their planned activities could be as much as 60 million cubic feet per day, a volume which would make the field the largest current producer in the Cook Inlet basin.

With the larger volume of gas, water production was projected at 5,000 barrels of water per day.

Lots of untapped gas

North Fork is accessed by a 12-mile road from Anchor Point, at the end of which is a 5-acre gravel pad bounded by fencing and gates. North Fork gas is transported through two fiberglass pipelines to Anchor Point where it ties into the Enstar line.

Hennigan also told AOGCC he had been involved at the field since Armstrong brought North Fork online in 2011. He said a lot of zones were left because they started to produce water. There was significant gas in those zones, he said, and if the water could be disposed of, the company could go back and produce the gas.

Hennigan also said the company has identified as many as 23 natural gas prospects in the area.

At that hearing, Vision told AOGCC that produced water from gas production would be an estimated 73.1% of the total injected, with well workover fluids some 21.4%, other exempt fluids some 2.3% and drill cuttings, mud and completion fluids some 1.1%.

Vision said it has plans for additional production at the field and plans to drill over the next 7 years.

Plan of development

Alaska’s Division of Oil and Gas signed off Feb. 24, 2022, on the 2022 plan of development for the North Fork unit, or NFU. The POD, the 57th for the unit, covers March 31, 2022, through March 30, 2023.

On Feb. 24, Landt explained, the division approved Vision’s proposed 57th POD because Vision was “committed to enhancing and extending existing NFU production” by drilling additional wells in the existing participating area and “also outside of the current PA boundaries.”

The NFU Gas Pool No.1 PA, or GPA, consists of some 800 acres.

Since Vision Operating took over as North Fork operator May 1, 2021, the division said the unit averaged 3,058 thousand cubic feet per day of gas production through November 2021. More recent AOGCC data for June 2022 shows the NFU averaged 3,058 mcf per day.

In April 2022 the company got AOGCC approval to use an existing, but non-producing well, for Class II oil field waste fluids underground disposal.

Aquifer exemption

In a July 20, 2022, order approving an aquifer exemption for North Fork, AOGCC said the well proposed for injection, NFU 23-25, is perforated in two sands within the deeper planned injection zone, Zone 1.

“Vision will perforate and inject wastes into the Zone 1 sands until capacity is reached,” and after that overlying sands in Zone 2 will be perforated and used for further injection, the commission said.

Vision estimates the maximum radius for injection is 1,200 feet from the injection point, with the capacity in Zone 1 of 12.5 million barrels and the combined capacity of Zones 1 and 2 some 47 million barrels.

AOGCC disagreed with the size of the aquifer exemption Vision requested, saying it was some 3 square miles or about 1,920 acres. The 3 square mile area “is not warranted,” the commission said, approving instead an area with a radius of 2,000 feet from the NFU 23-25 wellbore, saying the extent of the affected area can be re-evaluated and amended in the future, if necessary.

Drilling expensive

But drilling for new pockets of gas requires more money, generally bank financing.

In more than one filing with the division since acquiring the North Fork unit and its assets, Vision has inserted a qualifying statement about drilling depending on favorable economic and/or market conditions in its work plans for exploration and development drilling in the North Fork unit.

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