|
Hilcorp requests Granite Point changes
Company asks AOGCC to amend pool rules, removing spacing requirements and allowing commingling of Middle Kenai, Hemlock production
Kristen Nelson Petroleum News
Hilcorp Alaska LLC has applied to the Alaska Oil and Gas Conservation Commission for amendments to the conservation order governing production at the Granite Point field in Cook Inlet.
The requested changes include a revision in the description of the Middle Kenai oil pool, definition of a Hemlock oil pool, a revision of the rule on well spacing and authorization for downhole commingling of production.
The most recent production numbers for the field, from AOGCC data for December, show an average of 2,702 barrels per day.
Hilcorp told the commission it proposes to align the affected area of the Granite Point field with the geographic boundary of the recently expanded Granite Point unit, which now consists of six state oil and gas leases, 15,411 acres, with operations at the Anna, Baker and Granite Point platforms.
Hilcorp is the 100 percent working interest owner.
Crude oil and natural gas produced from the Anna, Bruce and Granite Point platforms is processed, metered and shipped from the Granite Point Tank Farm, a 73-acre facility which is the primary service and operation center for the three platforms.
Hilcorp owns 100 percent of the surface estate and infrastructure at the GPTF.
Oil and gas produced from Anna runs via subsea pipelines to a riser on the Bruce platform and is transported from there to shore at the GPTF. Another subsea pipeline system carries oil and gas from the Granite Point platform to the GPTF.
Oil is shipped from the GPTF via the newly modified subsystem pipeline system to the Kenai Pipeline.
Discovery in 1960s Hilcorp said Pan American Petroleum Corp. acquired three oil and gas leases within the Granite Point field in 1962; a single lease at the field was acquired by Union Oil Company of California and Socony Mobil Oil Co.
Oil was discovered in the Granite Point field in 1965 and the Anna, Bruce and Granite Point platforms were built in 1966.
The field has produced oil and gas from the Tyonek and Hemlock formations since the mid-1960s.
AOGCC granted the first spacing exception at the field in 1967 and has issued 17 additional spacing orders since then.
By 1991 Union had 100 percent interest in the three Pan American leases and became the lease operator of the four Granite Point field leases and the three platforms; the company acquired two additional oil and gas leases in 1991.
In 1995 75 percent working interest was transferred to Mobil Rocky Mountain Inc., later ExxonMobil Alaska Production Inc.; and the three leases owned by Union, 25 percent, and Exxon, 75 percent, were unitized in 1998, becoming the South Granite Point unit, with Union as operator; the unit had 5,889 acres.
Hilcorp acquired the assets of Chevron, successor to Union, in 2012, and became operator of both the Granite Point and South Granite Point units. Later that year, Hilcorp became 100 percent WIO of the leases in the South Granite Point unit.
In 2014 the Department of Natural Resources approved expansion of the South Granite Point unit to include three non-unitized operations associated with the Anna and Bruce platforms, and the proposed unit, approved in 2015, became the Granite Point unit.
Rules changes requested AOGCC granted a request from Hilcorp in 2014 to commingle production between the Hemlock and Middle Kenai pools in the GP 11-13RD well, an approval which extended the economic life of the well and reduced waste.
Hilcorp noted that the commission concluded production from the Hemlock in the GP 11-13RD was “very near its economic limit” and would have been abandoned so that the Middle Kenai could be produced. AOGCC said allowing commingling of production would allow some of the remaining 164,000 barrels of reserves in the Hemlock to be recovered.
In its current request, Hilcorp said what it is proposing would “prevent waste, protect correlative rights and improve the ultimate recovery of remaining hydrocarbons throughout the Granite Point Field,” while also reducing administrative burdens on both the company and commission staff.
“By eliminating the spacing restrictions at the Granite Point Field horizontal wells can be drilled in the stacked sands of the Middle Kenai Oil Pool,” Hilcorp said.
“Historical drilling of horizontal wells at the Granite Point Field have proven to improve the ultimate recovery of the field,” the company said, in support of its request that spacing restrictions be removed, allowing for “the decreasing of well spacing through the drilling of horizontal wells that will improve the ultimate recovery.”
Hilcorp’s said its request to allow commingling of production from the Middle Kenai and Hemlock oil pools “will allow single zone Hemlock and/or Middle Kenai Oil Pool wells that are at or near their economic limit to continue to be produced, therefore improving ultimate recovery of the Granite Point Field.”
Field in decline Hilcorp also said there have been no significant changes in pool rules for the Granite Point field for nearly 45 years. “Since that time, production from the field, and in particular the Middle Kenai Oil Pool, has been continuous, but in steady decline,” the company said.
“While existing rules may have adequately protected correlative rights of this legacy field’s original owners, and prevented waste during the field’s initial development, they are not appropriate to the enhanced recovery effort necessary to produce remaining hydrocarbon reserves,” Hilcorp told the commission.
The company said it purchased the legacy assets with the intent of maximizing recovery of remaining hydrocarbons, requiring “a comprehensive capital workover program” to repair broken injection wells; return shut-in production wells to service; optimize existing well completions; increase water injection and reservoir throughput; pursue stimulation opportunities; and identify and then execute new drilling projects.
Hilcorp said the amendments it is proposing would give it “more development options to improve the ultimate recovery of the field.”
The commission has tentatively scheduled a public hearing on the application for April 4 at 9 a.m. but said if there are no timely requests for a hearing filed, it may consider issuing an order without a hearing.
| 