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Aurora Gas begins re-entry at Nicolai Creek gas well Pipeline planned for early 2001; up to two additional wells could be drilled at field next year Kristen Nelson PNA News Editor
Aurora Gas LLC has begun re-entry work on a suspended gas well at Nicolai Creek on the west side of Cook Inlet. If gas production tests are as expected, two new wells could be drilled this summer.
Aurora Gas started mobilizing a rig to its Nicolai Creek gas field Dec. 1 and by Dec. 11 work was well under way on the existing well, the Nicolai Creek No. 3.
The goal, Scott Pfoff told PNA Dec. 11, is to re-work that existing well, re-perforate five gas intervals, and test the gas production.
Assuming a successful test, a mile of gas pipeline will be put in early next year to connect the well site to an existing gas pipeline. And successful production from the existing well will be followed by as many as four more wells, two as early as this summer.
The Nicolai Creek field is owned by Aurora Gas LLC, a 50-50 joint venture of Aurora Power — of which Pfoff is president — and Orion Resources. Ed Jones, one of the partners in Orion Resources, and executive vice president of Aurora Gas, is the project manager at Nicolai Creek. Mud, sand, removed from old well Pfoff said that the Nicolai Creek No. 3 well was one of six wells drilled at the field by Texaco in the late 1960s, looking for oil.
“They didn’t find oil in commercial quantities. They did, however, find gas. And in fact completed it as a fuel gas well from five different zones and produced it for almost 10 years,” he said.
In time the natural pressure in the Nicolai Creek well “declined to a point at which it could no longer buck the system pressure of the platform where the gas was going.” Compression facilities would have been required to continue producing the gas to the platform. The well was killed by pumping it full of drilling mud. Pfoff said the well was still capable of production when it was killed.
“The interesting thing, and what we find real encouraging, is that at the time — two years after they produced this well, they went back in and determined that the lower three zones weren’t even producing. They had fill in the well bore that had covered up those perforations.”
So for the last seven or eight years of production, the well was probably only producing from the top two sets of perforations.
“So now, we’re coming back in 20 years later and we’re going to clean the whole thing out.”
On Dec. 11, Pfoff said, the drilling mud that was pumped into the well had been circulated out and the fill was being cleaned out of the hole.
“There is a drill bit at the end of the tubing, we’re rotating to clean that stuff out, but we’re not making new hole, this is all inside casing.” Re-perforation after cleaning After the fill is cleaned out of the tubing, all five of the zones will be re-perforated. In addition to the areas perforated in the past, Pfoff said Aurora will be opening up a few more feet not originally perforated “that look productive to us on the logs.”
A total of about 150 net feet over a gross interval of about 500 feet will be perforated, with the top set of perforations at about 1,900 feet and the bottom set at almost 2,400 feet.
Once the well is perforated, Aurora is going to do a gravel pack. Pfoff said this is a new completion technology that prevents sand production into the well bore. The field has a history of sand production problems: “In fact, we suspect this is what covered up the lower perfs,” he said.
Pfoff said the gravel pack is actually very fine sand, with only enough space between the grains of sand for gas. “There’s not enough room for the larger sand particles that would otherwise try to come in from the formation.”
This technique has been used successfully by Unocal and Phillips in Cook Inlet, Pfoff said.
“So we felt it was worth the extra money to go ahead and do this kind of a completion to give us the highest probability for success. Then we’ll be ready to test.” Production testing was expected to take place Dec. 16-17. Pipeline equipment will be barged in After the well is tested the rig will be released, Pfoff said, and after the first of the year, equipment needed for the pipeline and for gas production will be barged across the inlet from the Kenai Peninsula. A compressor, production equipment and pipe are all on order, “and the goal will be to get all that stuff moved across the inlet before the ice prevents us from doing so.”
The gas pipeline will be a buried 4 to 4 1/2 inch line, with half of the gas — the portion of the field Aurora acquired from Unocal — already contracted to the fertilizer plant which Unocal sold to Agrium.
Pfoff said Aurora is working on several possible contracts for the other half.
“But even if we’re not successful in getting a quote new contract for this gas, Aurora Power, the marketing company, will be able to market it under our contracts,” he said.
Aurora expects the well to produce at 3 million to 5 million cubic feet a day, 3,000 to 5,000 MCF. New wells planned for summer The reason Aurora is anxious to get production started from the Nicolai Creek No. 3 well, Pfoff said, “is that with a successful Nicolai Creek 3 re-entry under out belts, we will then want to drill at least two new wells next summer. And to drill those wells would probably require some sort of financing, which would be very difficult to get without having this successful re-entry under our belts.
“If we’ve got a well that’s on and generating revenue and producing and proving that we can do it, then our chances of getting the financing that we need for the two wells that we want to drill go way up.”
He said the cost of a new well is projected in the $2 million range, which is pretty cheap by Cook Inlet standards, “because we’re onshore, we’re drilling shallow, we’re close to infrastructure.”
The Nicolai Creek No. 3 well is inland. There is a landing strip closer to shore with a well pad at either end, two of the original Texaco drill sites. Pfoff said that the plan is to drill at least one of the new wells from one of the pads adjacent to the runway.
Aurora had to get innovative on the project more than once. A plan to activate an old camp at Shirleyville fell through, for example, so a landing craft was pulled up on shore to use as a camp, he said. The landing craft can sleep 16 or 18, Pfoff said, has a galley and a cook on board, and includes a hot tub. Fairweather E&P Services is running the project for Aurora and their marine division owns the landing craft, the Arctic Wolf.
Aurora started in Alaska in 1994, Pfoff said, and began acquiring oil and gas lease acreage soon after.
Nicolai Creek is the first property that Aurora has operated.
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