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North Fork unit POD approved with mods
Kay Cashman Petroleum News
On March 5, the Alaska Department of Natural Resources' Division of Oil and Gas approved with modifications the North Fork unit 2024 plan of development.
The POD was filed by unit operator Vision Operating LLC, a fully owned subsidiary of Gardes Holdings Inc. The North Fork unit, or NFU, is on the southern Kenai Peninsula. The approval letter was sent to Gardes and Vision executive Mark Landt by division Director Derek Nottingham.
In its 2024 POD Vision proposed to enhance production from existing wells, convert a well to water disposal and drill additional wells; however, all operations are contingent on favorable market conditions and the ability to raise capital and secure a drilling rig.
The division approved Vision's POD with these conditions: "Vision will begin drilling a well in the NFU by the end of the calendar year 2025 and maintain operations to bring that well into production. Based on these conditions, the NFU 59th POD is approved through the end of 2025. Updates to this POD are due July 1, 2024, Jan. 1, 2025, and July 1, 2025. Failure to begin drilling and maintain operations to bring the well into production by end of calendar year 2025, may result in default of the NFU."
Natural gas production from the NFU has averaged 2,432 thousand cubic feet of gas, or mcf, per day from Dec. 1, 2022, through Nov. 30, 2023, representing a 23% year over year decrease.
Contraction is required after a unit has been in production for 10 years, at which point it is contracted to areas that are producing. The division has the right to delay contraction.
Unit history NFU was formed as a federal unit on May 27, 1965. The U.S. Department of Interior's Bureau of Land Management, or BLM, and the state of Alaska co-managed the NFU, which was comprised of two state and two federal oil and gas leases totaling 58,113.40 acres, originally. In 2006 BLM waived its administration rights and transferred its NFU leases to the state.
Currently, the NFU is comprised of five state oil and gas leases totaling 2,601.84 acres, and one participating area, or PA, the NFU Gas Pool #1 PA, or GPA.
Effective May 1, 2021, Vision took over as operator. The company has not drilled a well in the unit since then.
During the 2023 POD period, Vision planned to maintain production and evaluate opportunities to increase production, including well workovers, additional perforations, or drilling new wells. Any new wells would be dependent on favorable economic conditions. Additionally, Vision planned to apply to expand the GPA.
Actual operations consisted of a well workover, which attempted to add perforations and increase production. However, the workover was unsuccessful. Further, no new wells were drilled due to a lack of available capital. Vision requested and was granted a delay in unit contraction until Oct. 6, 2024, and did not apply for a GPA expansion.
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