AIX planning Kenai Loop improvements

Small independent evaluating options for compression, produced water disposal at natural gas field; no new wells likely at field

ERIC LIDJI

For Petroleum News

AIX Energy LLC is anticipating a range of projects over the next year and a half to improve the operation and production profile of its Kenai Loop natural gas field.

But those plans likely will not include any new wells at the Cook Inlet area field.

According to a plan of development filed in early May, the Texas-based independent expects to install gas compression in order to meet contractual requirements and maximize reserve recovery, and is considering plans to re-perforate an existing well and return a suspended well to production in order to improve deliverability at the Cook Inlet field.

The company expects the gas compression to be required within the next 12 to 18 months and is currently considering whether to lease or buy a system and whether to use gas-powered or electric power compression. As part of those evaluations, the company is also considering whether or not to return the existing Kenai Loop No. 1-4 well to production “to provide increased deliverability, to provide redundancy to meet firm gas sales obligations and to possibly increase ultimate recovery,” according to the company.

A previous operator drilled Kenai Loop No. 1-4 in October 2013. The well tested at 2.5 million cubic feet per day but later proved to be producing from the same reservoir as the Kenai Loop No. 1-1 well. Kenai Loop No. 1-4 currently monitors reservoir pressure.

Along similar lines, AIX Energy is considering whether to re-perforate the existing Kenai Loop No. 1-3 well to improve deliverability and the company believes there is a “high probability” it will undertake the project sometime during the next 12 to 18 months.

AIX Energy is also evaluating alternatives for disposing of water produced during drilling operations. According to the company, water disposal is currently the second highest lease operating expense at the field, after personnel. In 2015, the company made a cost-benefit analysis of installing an onsite evaporator. Although the project seemed to promise some “modest benefits,” the company is now considering third-party services.

Despite the various efforts AIX Energy expects to undertake over the coming year and a half to improve deliverability and reduce operating costs, the company currently has no plans to drill additional wells at the field. A recent third-party evaluation by geophysicist Scott Daniels identified no development drilling opportunities, according to the company.

Through March 2016, the Kenai Loop field produced 12.724 billion cubic feet of gas, 1,408 barrels of condensate and 5,087 barrels of water. The field is currently producing more than 10 million cubic feet per day, down from a high above 11 million cubic feet per day in February, according to the Alaska Oil and Gas Conservation Commission. l