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State OKs revision of West Sak participating area Five western leases will be dropped from participating area; four leases on eastern, southern edge will be added, says Alaska Division of Oil and Gas Kristen Nelson Petroleum News Editor-in-Chief
The Alaska Department of Natural Resources Division of Oil and Gas has approved an application by ConocoPhillips Alaska to revise the existing West Sak participating area, contracting out areas ConocoPhillips does not plan to develop in the foreseeable future and including leases to the east and south which the company has committed to develop.
The division’s mid-December approval is effective Nov. 1.
The Kuparuk River unit owners began collecting West Sak reservoir data in the 1980s, the division said. There was a West Sak pilot program in the mid-1980s, but West Sak wells were shut in from January 1987 through December 1997. In April 1989 the WS1-01, a dedicated West Sak well, was drilled, completed and tested in the drill site 1D area. By 1989, the division said, there had been some 21 delineation wells and 13 production tests to evaluate the West Sak reservoir.
The Kuparuk River owners made a decision to continue development of West Sak in the late 1990s, and in 1997 applied to form a participating area, with a development plan calling for a phased approach.
Some 50 wells, 31 producers and 19 injectors, were planned from drill sites 1C and 1D in phase I, which was estimated to recover 51 million barrels of oil. Because subsequent phases would depend on results from phase I, they were not defined.
The division approved the West Sak participating area in 1997, and production began in December, but by early 1999, the division said, “it was clear that Phase I was not progressing as planned.” There were only 12 wells on production, not the 31 planned, “but much was being learned and many new ideas were being investigated in order to make this resource economic,” the division said. Four leases added to West Sak in 2002 An expansion application was submitted in 2002 to bring four leases into the unit, leases whose primary terms were due to expire in January 2003. “The operator believed the area could be developed economically using long multilateral horizontal producers with alternating rows of long undulating horizontal injectors,” the division said. The expansion was approved in October 2002. In May 2003, Kuparuk River-operator ConocoPhillips committed in writing to fulfill expansion drilling commitments by June 1, 2004, but in November 2003 ConocoPhillips began discussing with the division deferral of the drilling commitments to June 1, 2006.
The division said that in exchange for the two-year extension, ConocoPhillips “offered to increase the bid-deferral payments, continue to pursue sanction of the proposed Drillsite 1J project, and segregate the four leases into eight smaller leases.” The division accepted the revised proposal in May 2004 and approved deferral of expansion drilling commitments.
ConocoPhillips notified the division in August that the Kuparuk River unit working interest owners had approved the 1J West Sak development project. Revision application filed in October ConocoPhillips filed a complete application to revise the West Sak participating area in October 2004. The current West Sak participating area includes 12 leases, with production allocated to six of the 12. “The application proposes to contract five leases, along the western edge, out of the WSPA and add four leases, along the southern and eastern edges, into the WSPA,” the division said.
The West Sak sands in the eastern Kuparuk River unit “are part of the much larger shallow Upper Cretaceous reservoirs now undergoing development for production of North Slope ‘heavy oil’ in the KRU and the adjacent Milne Point and Prudhoe Bay units,” the division said. West Sak reservoir depth in the southwestern Kuparuk River field area is some 2,700 feet true vertical depth, dipping to some 3,800 feet true vertical depth in the northeast, and two major intersecting fault systems, one trending north and the other east, exert primary structural control of the area. “These faults, rapid facies changes, disconformities, a heavy oil/tar mat and permafrost all provide barriers to oil migration, resulting in a segmented reservoir with variable in-field rock and fluid properties,” the division said.
The West Sak consists of individual unconsolidated sand bodies ranging from a few feet to about 40 feet in thickness, with reservoir temperatures ranging from 60 degrees Fahrenheit in the shallower western area to 80 degrees F in the deeper eastern area, and API gravity varying in a similar manner from 10 degrees in the west to 22 degrees API in the east.
The division said first-year average production rates were a few hundred barrels per day in 1997, when West Sak commercial production began. “With horizontal multilaterals, some of the recently drilled West Sak wells have come on at initial production rates as high as 7,000 BOPD. These wells generally taper off to sustained production rates of 1,500 or 2,000 BOPD after several months of production.”
ConocoPhillips said in August that new drilling in the West Sak is expected to increase production to some 45,000 bpd by 2007, with development at existing drill site 1E and at a new drill pad, drill site 1J. The expansion at 1E is expected to add some 10,000 bpd, with first production in the latter half of 2004. Development of the 1J drill site will add some 30,000 bpd, with first production in late 2005 and peak production in 2007.
Thirteen wells are planned at drill site 1E and 31 wells at drill site 1J.
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