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AOGCC approves Cannery Loop order changes
Kristen Nelson Petroleum News
On Sept. 9 the Alaska Oil and Gas Conservation Commission approved changes to the conservation order governing Cannery Loop field operations to allow production closer than 1,500 feet below the base of a gas storage pool.
The producing natural gas field, with leases owned 100% by Hilcorp Alaska, underlies the gas storage reservoir operated by Cook Inlet Natural Gas Storage Alaska.
“The Cannery Loop Field contains one gas storage pool and three actively producing natural gas pools,” the commission said. In descending order the pools are: Sterling C gas storage pool, Beluga gas pool, Upper Tyonek gas pool and Tyonek “D” gas pool.
The commission said that in the absence of an order to the contrary, its regulations allow testing or production within 1,500 feet of a property line only if the owner and landowner are the same on both sides of the line.
Hilcorp had applied to AOGCC for a spacing exception to allow it to perforate two Cannery Loop Unit wells, CLU 13 and CLU 15, within 1,500 feet of the vertical property line of the gas storage pool.
Hearing At an Aug. 27 hearing Hilcorp and CINGSA presented materials including a diagram showing that 1,500 feet true vertical depth below the Sterling C, the gas storage pool, would encompass all of the Upper Beluga and most of the Middle Beluga, estimated to represent “a P10 to P90 range of remaining reserves to 20 to 80 BCF,” effectively eliminating production of that resource.
“Hilcorp and CINGSA have jointly established a list of best protocols - including ongoing exchange of applications, reports, well and cement evaluation logs, flow and pressure data, and material balance analyses - as well as criteria for well-design and cementing to ensure integrity of both productive and storage reservoirs. Hilcorp testified that Hilcorp and CINGSA agree not to perforate within 50 true vertical feet of the base of the Sterling C gas reservoir,” the commission said in its order.
As revised, the well spacing in the Cannery Loop unit order now specifies: “No hydrocarbon-bearing interval may be opened to a well within 50 true vertical feet of the Sterling C Gas Storage Pool,” and no zone may be opened between 50 and 100 true vertical feet of the storage pool “without advance approval from the AOGCC.”
There are also requirements for information submittals with applications for approvals and a requirement that for newly drilled wells, “an intermediate casing string must be set more than 50 feet below the base of the Sterling C Gas Storage Pool and continuously cemented to a minimum of 250 vertical feet above the top of that pool.”
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