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Aurora Gas aims to be niche player in Cook Inlet gas Company plans to bring shut-in wells at Nicolai Creek back on line, drill existing wells there, explore elsewhere in inlet area Kristen Nelson PNA News Editor
Aurora Gas LLC is in the permitting process to bring the Nicolai Creek gas field on the west side of Cook Inlet back on line. Ed Jones, Aurora Gas executive vice president, told PNA in Anchorage Sept. 8 that Aurora Gas acquired the 50 percent working interest it didn't have in the field from Unocal effective June 1.
Aurora Power Resources Inc. acquired Marathon Oil Co.’s 50 percent interest in Nicolai Creek in a land swap effective Jan. 1 and is a 50 percent partner in Aurora Gas LLC.
Jones said that subject to completing permitting, Aurora could have access to a rig as early as October to begin reworking the first of three suspended wells at Nicolai Creek.
Scott Pfoff, president of Aurora Power, said in a Jan. 7 statement that Aurora Power traded its working interests in the Kenai and Cannery Loop Gas fields in exchange for Marathon’s ownership in the Nicolai Creek unit.
Pfoff said the companies also reached agreement on a seismic data licensing agreement and a natural gas purchase and sale agreement.
Pfoff also said that all of Aurora Power’s exploration and production holdings were being placed in Aurora Gas LLC, a 50 percent joint venture between Aurora Power Resources and Orion Resources LLC, a company headed by Andrew Clifford and Jones, both formerly with BHP Petroleum, Clifford as vice president of exploration and Jones as vice president of production. Exploration, developing shut-in fields in plans “We’re really looking forward to developing a little niche here in the Cook Inlet area and hopefully we can grow considerably here,” Jones said.
The company, he said, is looking at two ways to grow its gas holdings.
“We are interested in exploration, ourselves, and that’s one reason we picked up some of the leases we picked up (in the state’s areawide Cook Inlet oil and gas lease sale),” Jones said.
“My partner is an explorationist, geologist, geophysicist, and he is looking at a number of prospects so we’ve got some acreage in the area, we’ve got some access to look at some seismic and we’re looking around the area.”
Jones said Aurora Gas isn’t looking at rank wildcat drilling, “because we believe there’s a lot of discovered fields that haven’t really been developed and there’s some close in prospects that are very similar to nearby wells, so it will be low-risk type exploration that we’re looking at.”
In addition to exploration, Jones said the company is also looking at other shut-in gas fields in the area which could be brought back on stream.
“Part of it’s just getting this first one done,” he said. Once Nicolai Creek is back on stream, Jones said, “then I think that it will be easier to do other things.” Nicolai Creek once produced gas There are three suspended wells at the Nicolai Creek field. The field produced gas between 1968 and 1977, most of it from the No. 3 well, which, Jones said, was capable of production until September 1991 when Unocal killed the well with drilling mud. When the well produced in the 1960s and 1970s, there was no pipeline to market — the gas was used as fuel on offshore platforms.
Aurora Gas plans to circulate the drilling mud out, clean out some fill that’s in the well, re-perforate and put the well back on stream, Jones said.
The field is broken into several fault blocks.
“We believe that three of them have been tested and produced and each fault block is a separate reservoir.” There are several other fault blocks, he said. “One we think almost certainly is productive and two or three others may well be.
“So it will take some drilling to fully develop the field,” Jones said, in addition to the restoration or redrilling of the two other suspended wells.
The other suspended wells are in different reservoirs than the No. 3 well, and Jones said the wells aren’t necessarily well placed within their reservoirs because they were drilled for deeper horizons — specifically, they were drilled as oil wells. The second and third wells were completed as gas wells, and one in particular made some water, Jones said.
“We believe it’s because it’s pretty low in the reservoir so we would look to either sidetrack those wells or re-drill them to a little more optimum position in those reservoirs.” Gas will go to Granite Point There will be a minimum amount of production equipment at the wellhead, Jones said, and the gas will probably be metered at Unocal’s Granite Point tank farm. That facility is manned 24 hours a day, and he said Aurora will arrange for Unocal to operate the well for them. It won’t necessitate daily checking, he said, and by checking the meter at the tank farm the Unocal operators will be able to tell that the Aurora well is flowing.
Unocal’s leases came with a commitment to the Agrium chemical plant, so 50 percent of the gas will be delivered to Unocal. The other 50 percent is not committed and the plan is for Aurora Power to sell that gas.
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