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AEX may produce Placer in ’19-’20 using SMU early production facility AEX looks to produce crude from Placer using SMU early production facility Kristen Nelson Petroleum News
ASRC Exploration LLC, AEX, has submitted a third plan of development for its North Slope Placer unit, and told the Alaska Division of Oil and Gas in the June 11 submittal that its 2018-19 plan includes analysis of Brooks Range Petroleum Corp.’s proposed Southern Miluveach unit early production facility for potentially putting Placer into production in 2019-20.
Placer and the Southern Miluveach unit are not adjacent but are close, both on the western edge of the Kuparuk River unit.
In May the division approved a plan filed by Southern Miluveach unit operator BRPC to install a temporary production facility at the Mustang field to allow some early oil production to begin, potentially in October of this year, prior to permanent production facilities going into operation (see story in May 20 issue of Petroleum News).
AEX told the division in its June filing that part of its proposed POD is to progress a memorandum of understanding “with adjacent operators for joint Kuparuk C development and facility access.”
BRPC’s SMU North Tarn No. 1A sidetrack, drilled in 2011, was certified by the division as capable of producing in paying quantities last year after the company returned to the well and conducted fracture stimulation and an associated flow test. The division said flow rates from the well “indicate high flow-capacity typical for Kuparuk C-sand with clear evidence of the fracture stimulation.”
Kuparuk C There are three wells at Placer, two drilled by previous operator ConocoPhillips and one drilled by AEX in January 2016 under the company’s initial unit plan of exploration. The Placer No. 3 well, which was drilled and suspended, was certified by the state as being capable of producing in paying quantities in December 2016.
The Placer No. 3 was AEX’s first operated exploration well.
AEX said in its POD that Kuparuk C is the only production interval identified at Placer but said long-range proposed development activities “include plans to delineate all underlying oil or gas reservoirs” and bring them into production.
The company said it is analyzing use of an early production facility for potentially early production in 2019-20 and during early production facility production would work toward negotiation with adjacent operators.
No participating area is currently proposed, and AEX said it will be defining the initial participating area through detailed mapping, reservoir analysis and engineering. It will also continue to evaluate the Moraine interval encountered in the Placer No. 3 well.
In the third POD, Sept. 9 through Sept. 8, 2019, AES will evaluate early production using ice road and Southern Miluveach unit early production facility starting in the winter of 2019-20. The company will complete the reservoir description using 3-D interpretations. Results of the reservoir mapping and seismic data analysis will be used to generate a 3-D geologic model. An integrated reservoir hydraulic fracture model will be constructed to access the full Kuparuk C vertical potential.
Well design will include evaluating electric subservice pumps vs. use of gas lift and will also model hydraulic fracture stimulation.
Facilities In AEX’s letter to division Director Chantal Walsh, AEX President Teresa Imm discussed the facility access issue, calling it “an important factor for economic development on the North Slope,” and noting that it has traditionally been accomplished by unitizing leases and construction of facilities by “a single operator or working interest group.”
Imm said the Colville River unit is an example of sharing facilities across multiple participating areas within a unit, resulting in minimizing production costs and maximizing economics for the state.
“Access into these units is difficult to obtain due to restrictions and backouts of unitized substances for which the facilities were built,” Imm said.
(The Caelus Alaska Oooguruk unit is an example of a North Slope development where processing is done at another unit, in that case the ConocoPhillips Alaska-operated Kuparuk River unit.)
Paradigm shift needed Imm said the way production facilities have been developed needs to shift for smaller accumulations outside the large units.
“Placer is an ideal candidate to explore alternative facility access approaches; its size does not warrant single owner facilities, however its location with respect to other developments is perfectly situated for a non-traditional facility access approach.”
Imm said AEX is investigating ways that Placer, and other nearly developments, could benefit from facility sharing and access. “Current discussions with adjacent operators indicate that this approach to development is in the public interest, conserves natural resources, and prevents economical, physical and environmental waste,” she said.
- KRISTEN NELSON
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