Providing coverage of Alaska and northern Canada's oil and gas industry
May 2023

Vol. 28, No.22 Week of May 28, 2023

Hilcorp request vertical pool expansion at Kenai gas field

Kristen Nelson

Hilcorp Alaska has applied to the Alaska Oil and Gas Conservation Commission to expand Sterling gas pool 3 within the Kenai field.

As currently defined in the conservation order for the field, Kenai Sterling gas pool 3 is the accumulation of gas common to and correlating with that found from 4,175 feet to 4,412 feet measured depth in the KU 21-6 well.

Hilcorp is requesting a vertical expansion of the pool, with the definition changed to the interval from 3,715 feet to 4,412 feet MD.

In its request the company said it plans to perforate and produce various sands above Sterling gas pool 3 as currently defined and told the commission various wells have already been perforated in the proposed expansion area, the undefined Sterling, work which required spacing exceptions.

"Any additional perforations in the Undefined Sterling will also require individual spacing exceptions from AOGCC," Hilcorp said.

Hilcorp said sands in the Sterling undefined do not appear to be abnormally pressured compared to sands which already fall in the area defined as Sterling gas pool 3, and said it expects to see a similar result in other wells.

Hilcorp is 100% working interest owner and operator of the Kenai field and said its "objective is to maximize the recovery of remaining hydrocarbons from the field," something it cannot efficiently do under the current conservation order rules for the field "without strenuous and lengthy administrative requests" and approval by AOGCC.

Change to facilitate production

While the current rules and procedures for the Kenai field "may have adequately protected correlative rights and prevented waste during the field's initial discovery and following development, they are not applicable to the effort necessary to explore, produce and develop the remaining hydrocarbon reserves at this time," Hilcorp said.

The company said that with the requested expansion of the Sterling 3 gas pool it "can target smaller, un-drained portions of heterogeneous sand bodies that lie above the current Sterling Gas Pool 3," areas that cannot be produced currently without a spacing exception.

It said the request would allow it to produce Kenai "gas pools which otherwise could be bypassed. If AOGCC does not grant approval Hilcorp will be unable to evaluate potential Sterling pay within various KU wells, without strenuous and lengthy administrative procedures by both Hilcorp and AOGCC. Hilcorp could bypass potential pay, resulting in the premature plugging and abandonment of various KU wells after sand depletion, thus reducing the ultimate recovery."

AOGCC production data for April, the most recent available, show one well producing from the Sterling 3 gas pool, with production for the month of 15,372 thousand cubic feet, mcf. Cumulative production from the Sterling 3 gas pool, which began producing in 1965, is 335,651,418 mcf.

AOGCC has tentatively scheduled a public hearing on the request for 10 a.m. July 18 at its Anchorage offices, but said if it does not receive a request for the hearing by 4:30 p.m. June 8, it may issue an order without a hearing.


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