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Marathon spuds Kenai gas exploration well Just-completed 3-D survey will drive Ninilchik development drilling Kristen Nelson Petroleum News Editor-in-Chief
Despite the company name, Marathon Oil’s Alaska operations are all natural gas. The company sold its Alaska crude oil interests in the 1990s, and has since focused on natural gas exploration, development and production on the Kenai Peninsula.
Currently that work includes continuing development at the Marathon-Unocal Ninilchik unit, where first natural gas was produced to the companies’ jointly owned Kenai Kachemak Pipeline in early September, development drilling at other Marathon natural gas fields and exploration work at its Kasilof exploration unit, where the company has just spud a high-angle exploration well.
“Startup is going well at Ninilchik,” John Barnes, Marathon’s Alaska asset team leader, told Petroleum News in mid-October. The Kenai Peninsula Ninilchik field began producing at 15 million cubic feet a day in early September, and Barnes said Oct. 15 that production had reached 25 million cubic feet a day.
Five wells have been drilled at Ninilchik. Three are producing, and Marathon is in the process of hooking up the other two. The companies expect to do additional drilling at Ninilchik — both development and exploration.
“We have just completed a 3-D seismic shoot which will be used to specifically plan our 2004 program (at Ninilchik),” Barnes said. The 88 square mile 3-D seismic shoot was completed Oct. 7. Actual budgets for next year are not yet set, but Barnes said he expects to see two to three wells drilled at Ninilchik in 2004. ‘Excape’ technology designed in Alaska In addition to the work at Ninilchik, Marathon is drilling a development well in the Cannery Loop field, and expects to drill one additional well there this year, Barnes said.
The company also plans a second ‘Excape’ well at Beaver Creek this year.
“Excape continues to provide a significant impact to Marathon’s Alaska business,” Barnes said. “The ability to perforate and fracture stimulate up to 15 separate intervals in one day is tremendous. We expect to use Excape on several wells next year.”
The Excape technology was conceived in Kenai for the Kenai gas field, Barnes said, and enables the company to fracture stimulate multiple gas reservoirs quickly, and do in a day work that would take weeks with conventional methods.
But it is a product designed for the geology the company finds on the Kenai.
“It’s like everything else, there’s no one fit for everything. You have to have the right geologic targets to make it work and we just have some of those up here.”
The technology can be used where similar geology is found, and recently has been used in Canada and in Colorado. “So it’s getting greater industry use.” Kasilof exploration well spud In 2004, Marathon expects to do development drilling in its Kenai, Cannery Loop and Beaver Creek fields, Barnes said.
On the exploration side, Barnes said Marathon planned to spud the Kasilof South No. 1 exploration well Oct. 15. The well “is being drilled from onshore to the offshore Kasilof structure using the Nabors 273 drilling rig,” he said.
The high-angle well will have a true vertical depth of about 9,000 feet, and a measured depth of 17,000 feet. The state approved the Kasilof exploration unit Oct. 25, 2002, and the initial plan of exploration called for an exploration well — or a 3-D seismic program — with drilling to begin before the first anniversary of plan approval to test the Tyonek sandstone. The plan calls for drilling of a second exploration well at the unit to begin before the third anniversary of unit approval; that well may be a sidetrack as long as the bottomhole is at least 3,000 horizontal feet from the bottomhole of the mother well bore.
The state said in the unit decision that Marathon plans to develop Tyonek formation natural gas reserves in the unit, which is in Cook Inlet just offshore and south from the mouth of the Kasilof River. The state said the industry recognized the Kasilof anticline as a potential exploration target in the mid-1960s, and five wells were drilled looking for oil between 1964 and 1975. Additional work planned Barnes said Marathon is also evaluating onshore 3-D seismic shot this spring near Sterling. “This may lead to other exploration drilling next year,” he said.
At Ninilchik, up to two additional drilling pads may be added. There are three pads in the unit now.
“We’ll look at the 3-D seismic, validate where we think we’re going to drill the wells, build the pads, then drill the wells,” Barnes said.
Marathon had a truck-mounted drilling rig designed for work in its Kenai Peninsula gas fields and Barnes said that rig, the Glacier No. 1, “is performing at or above our design expectations.”
The rig spud its first well April 7, 2000.
“During December we expect to reach another milestone, 200,000 feet drilled with the rig.”
The Glacier has “beat all our performance expectations to date. We’re drilling deeper and farther than we thought we could with it, so it’s worked out well,” Barnes said. Permitting still an issue Marathon has solved some Kenai Peninsula drilling and development issues with technology, but it still struggles with permitting, Barnes said, in spite of the state of Alaska’s efforts to streamline the process.
Between all of the governments and agencies involved, it can take 35 to 53 permits to drill an onshore gas well on the Kenai Peninsula, he said, and that is in areas where the company has drilled and produced before. There are federal agencies, state agencies, city and borough governments, he said, and the list of items required can include permits, permissions, plans and reports.
You always have to ask, he said: do I need this? “This report? This permission? This permit? A plan that I have to submit?”
You hear the word permit, Barnes said, “but when we look at it, it’s really just more than that particular permit.”
And it’s not just a particular agency that’s the issue, he said: “It’s that overall combination.” The number of items required depends on the land ownership and type of well, he said, but it is not just a permit, “it’s that overall package. And it’s a tough nut to crack,” with all of the agencies involved.
Barnes said he thinks progress has been made by the state, but the state is only one entity.
“The state alone can’t solve it, it requires a comprehensive plan,” he said.
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