Sidebar - KLU PAs approved in part

Kay Cashman

Petroleum News

On Dec. 21, the Alaska Department of Natural Resources' Division of Oil and Gas approved in part an application for two participating areas in the Kitchen Lights unit, or KLU, from operator Furie Operating, a HEX company.

The KLU contains 30 leases encompassing 83,300 acres. Furie proposed that PA Julius R Sterling, or SPA, and PA Julius R Beluga, or BPA, should contain 12 leases covering 16,681 acres, and 13 leases covering 15,526 acres, respectively.

The participating areas as approved by the division encompass a much smaller area consisting of approximately 1,000 acres in the SPA, and 1,193 acres in the BPA.

In its decision, the agency said, "a participating area may include only the land reasonably known to be underlain by hydrocarbons and known or reasonably estimated through use of geological, geophysical, or engineering data to be capable of producing or contributing to the production of hydrocarbons in paying quantities."

In attachments to its PA application, Furie supplied both public and confidential proof of the above and asked that the private attachments be kept confidential by the division, which they were.

The KLU currently produces from four wells, all located at the Julius R platform.

The division's decision said that its technical staff evaluated all data provided by Furie to determine if the proposed boundaries were reasonably supported. Because the data provided by Furie included confidential well data and interpretations, it is not discussed in any detail in the Dec. 21 decision.

In a series of technical presentations to the division, Furie demonstrated its use of seismic-based models to predict the distribution of sands within the Beluga and Sterling formations. Furie also provided prospect leads in the area based on seismic data and the four producing wells to define their participating area. Their model as presented incorporated only the four producing wells in the area and did not include the entirety of the well data available, the division said in its decision.

The "missing wells," as reviewed by the agency, show where some of the internal Beluga and Sterling sands are wet and "indicate contradictions in the prospect maps provided by Furie."

These data from the "missing wells" illustrate the unpredictable nature of the Cook Inlet fluvial environment(s) and indicate the shortcomings in traditional seismic reservoir evaluation in the basin, the division said.

The presence of "wet" sands within the overall Beluga and Sterling formations is observed in much of the Cook Inlet basin and the assessment by the division does not diminish the overall prospectivity of the Kitchen Lights area, the agency said.

"However, these are strong indications that lateral reservoir connectivity is limited to a smaller area such as the drainage area of the individual producing wells," the division said.

As a result, the agency concluded that Furie has not met the requirement of demonstrating reasonable certainty of producible hydrocarbons within the requested participating area boundaries.

--KAY CASHMAN