|
Aurora Gas pursues Cook Inlet oil play Company looking for partners for southern Alaska onshore prospects Andy Clifford Special for Petroleum News
The Cook Inlet basin of Alaska has yielded almost 1.3 billion barrels of oil from eight fields since the first discovery was made at Swanson River in 1957. Most of the exploratory drilling in the basin was undertaken prior to 1968 until larger reserves were discovered on the North Slope of Alaska and industry’s attention and technology focused to the north. Nearly 90 percent of the present reserve base was discovered in that early phase of drilling. High operating costs and low gas pricing also served to dull interest in further exploration in the basin.
While Aurora Gas LLC’s primary focus to date has been, and will continue to be, finding and developing shallow, non-associated gas deposits such as Kaloa, Lone Creek, Moquawkie and Nicolai Creek, it has always had an eye on the under-explored Cook Inlet oil play. In Aurora’s opinion, there has been no true oil wildcat drilling for many years. The recent ConocoPhillips’ Cosmopolitan success was essentially an appraisal of the earlier Starichkof discovery and Forest’s Redoubt field was discovered years earlier by Amoco.
There are known prospects offshore, but these are unlikely to be drilled within the next several years because of the prohibitive cost of importing an offshore drilling vessel and not enough active operators to share the cost.
But why look offshore when there is excellent potential for large oil reserves onshore and as extensions of proven, productive trends?
Aurora has mapped five drillable prospects with unrisked expected recoverable reserves of 400 million barrels of oil and risked reserves of 140 million barrels. At today’s oil prices of $50 per barrel, that is potential gross revenue of $20 billion! Four of these oil prospects are situated less than six miles from existing oil pipelines and two of these prospects have been defined by 3-D seismic data. All of Aurora’s oil prospects have good road access and Aurora plans an aggressive drilling campaign for the next two to three years. Deeper oil poorly imaged on seismic There are a few reasons that more oil has not been discovered in recent times in Cook Inlet. One of the prime reasons is that the deeper oil play is poorly imaged on existing seismic data. There tends to be greater structural complexity at depth and the more steeply dipping flanks of many of the potential traps are not imaged because of insufficient offsets during seismic acquisition. Furthermore, the Lower Tyonek and Hemlock oil pay sections do not exhibit good reflectivity because of poor acoustic impedance compared with the overlying sections. Finally, the high percentage of interbedded coal beds within the Beluga and Tyonek formations generate interbed multiples on seismic data, which mask the underlying seismic reflectors.
Only 18 percent of reserves produced from onshore fields
In 1994, Magoon and Dow estimated Cook Inlet reserves in place of 3.37 billion barrels of oil. Assuming an average recovery factor from the existing fields of 40 percent gives 1.35 billion barrels of recoverable oil, which is clearly incorrect since the basin has yielded almost that much already. The source for the oil is believed to be Middle Jurassic Tuxedni Group marine shales. The kerogen quality and thickness of the Tuxedni, where penetrated by a few wells in the basin, appear insufficient to yield the proven volume of oil, but better quality kerogen is presumed to be present.
Aurora estimates that between 5 billion and 7 billion barrels of oil have been generated from these source rocks, based on calculations of effective source thickness, transformation ratios, generative area and hydrogen index values. Almost 80 percent of this amount is believed to have been generated prior to Plio-Pleistocene uplift.
Aurora further estimates that up to 50 percent of this volume should be located onshore, yet only 18 percent of the reserves produced to date are from onshore fields. Aurora believes that there could still be up to 1 billion barrels of undiscovered recoverable reserves in the onshore of Cook Inlet. Oil found follows three structural trends Initial oil generation began during the mid-Miocene period. Migrating oil was focused toward low relief structures in the Trading Bay area by an east plunging antiform within the Mesozoic beneath the Lower Tertiary unconformity, as well as toward the early-formed Swanson River fold through fault conduits.
The McArthur River, Trading Bay and Swanson River fields were charged with low maturity oil (25-36 degrees API) during peak generation in the late Miocene. Basin-wide compression in the Plio-Pleistocene period formed large, high relief anticlines. The latter formed Granite Point, Middle Ground Shoal and North Cook Inlet structures were charged with higher maturity oils (36-44 degree API) during these later stages of generation and migration.
The oil found to date largely follows three distinct SSW-NNE structural trends, namely the Trading Bay trend, the Middle Ground Shoal/Granite Point trend and the Swanson River trend. Aurora believes the best place to find new oil reserves is to follow extensions of these same trends. Hemlock Conglomerate predominant reservoir Oil reservoirs are in alluvial fan sandstones of the Eocene-Oligocene-aged Tyonek, Hemlock and West Foreland formations.
The Hemlock Conglomerate is the predominant reservoir with 77 percent of these reserves from eight fields, followed by Lower Tyonek sandstones with 21 percent of oil produced to date from four fields. The Granite Point and Middle Ground Shoal fields have 2,500-foot and 2,000-foot oil columns respectively. McArthur River field has an oil column of 1,000 feet.
Reservoir quality varies greatly due to original sorting. Net pay counts for the existing fields vary greatly from 100 feet for Lower Tyonek reservoirs at McArthur River and Trading Bay, to more than 500 feet at Middle Ground Shoal and Granite Point.
Porosities range from 10-22 percent for the Hemlock reservoirs with permeabilities of 5-360 millidarcies. The Lower Tyonek reservoirs exhibit porosities of 14-20 percent and permeabilities of 10-250 millidarcies.
For both reservoirs, original water saturations are in the range of 30-45 percent and recovery efficiencies seem to be between 150-275 barrels of oil per acre-foot. Trapping styles vary from four-way rollover anticlines such as Granite Point, McArthur River, Middle Ground Shoal and North Trading Bay to faulted anticlines such as Swanson River to footwall buttress traps and three-way fault traps such as at Trading Bay. Prospects have productive analogs Aurora’s oil prospects each have productive analogs and are extensions of proven trends.
As an example, one of Aurora’s prospects could contain up to 1 billion barrels of oil in place. Light oil with API gravities of 38-42 degrees has already been produced on test by at least one well at the prospect, but the tight Hemlock reservoir will need to be stimulated to commercially yield its reserves.
Aurora recently acquired new 2D seismic data over this prospect and there is a very high probability of proving up shallower gas reserves within the overlying Beluga and Tyonek formations as well.
The Trading Bay trend extends northwards onto the west side of Cook Inlet, and Aurora has at least two prospects along that trend, each updip from oil shows with additional shallower gas potential. The Nicolai Footwall and Congahbuna Lake prospects are look-alikes to the north-west side of McArthur River field where oil is trapped in the Hemlock reservoir up against the Trading Bay fault.
The Nicolai Creek 3-D dataset, acquired by Aurora in early 2003, covers the former prospect, and newly acquired 2-D data helps delineate the latter prospect.
Other prospects include the Aluminum Prospect, which Aurora believes is an analog to ConocoPhillips’ Cosmopolitan discovery, and the Forest Lake Prospect, which could be a southerly extension of the giant Swanson River field. Aurora also has an inventory of other less mature oil prospects and leads which will continue to be matured during the course of the next year. Fourth gas field on stream Elsewhere in Cook Inlet, Aurora has recently brought its fourth gas field on stream with the successful tie-in of the Kaloa-2 well.
Negotiations are under way for a drilling rig to drill two deep gas wells on the Three Mile Creek and Aspen prospects, each of which could contain recoverable reserves of as much as 400 billion to 1 trillion cubic feet of gas.
Forest Oil has joined Aurora as a 30 percent working interest partner for the Three Mile Creek Prospect, where the first well, Three Mile Creek Unit-1 is expected to spud in early November 2004. Aurora is also pursuing an intriguing basin-edge alluvial fan play that has significant gas potential. Aurora will be offering prospects Aurora will be offering this package of oil prospects to industry within the coming months on attractive terms with a view to getting drilling under way as early as the spring of 2005. Interested parties should contact either Andy Clifford (vice president exploration) or Randall Jones (manager land/negotiations) in Aurora Gas’ Houston office at 713-977-5799 (fax 713-977-1347).
| 