|
THE EXPLORERS 2005: XTO continues to work Middle Ground Shoal Company maintains production rates by drilling more sidetracks, platforms getting upgrades Alan Bailey Petroleum News
XTO Energy, operator of the Middle Ground Shoal field in Alaska’s Cook Inlet, sets a great example for what an independent oil company can achieve in prolonging the life of an aging oil field. Although Middle Ground Shoal first produced back in 1967 XTO has achieved almost constant production from the field since buying two state leases and the field’s A and C platforms from Shell in 1998.
In March 2002 Doug Schultze, XTO’s then vice president of operations for the Permian Basin and Alaska XTO development efforts, told Petroleum News that XTO had increased field reserves by 42 percent and that reserves had “easily 10 and probably 15 years of economic life left.” For the third quarter of 2005 XTO reported an average daily field production rate of 3,650 barrels of oil. That production rate compares with 3,600 barrels per day when XTO purchased the field.
XTO’s activities in the Cook Inlet dovetail right into the company’s low-risk, high-return corporate strategy that the company’s web site describes as applying “new technology, operational innovations and old-fashioned hard work to discover untapped reserves” in “the best reservoir rock.” And a company spokesperson in an investor web cast referred to XTO’s operations as a “low cost, manufacturing approach to drilling … of well after well,” in the company’s acquired low-risk oil and gas properties.
“A good acquisition company must be a great development company,” and XTO tries to double reserves at the properties that it buys, Kyle Hammond, XTO’s top executive for Alaska, told an Alaska legislative committee in April 2004.
Started with west flank The Middle Ground Shoal field consists of a shallow dipping east flank and a steeply dipping west flank separated by a faulted crest. Production comes from multiple zones within the Tertiary Tyonek formation.
The relative complexity of the field presents the kind of challenge that XTO likes to turn into an opportunity.
If “it’s very simple, anybody can find it,” but “in geologically complex reservoirs, the probability that the previous operator missed something goes up dramatically,” Hammond said.
So XTO initially focused on developing the more difficult west flank of the field — Shell, the previous owner, had worked the east flank. In 2002, Schultze said that the west flank “is really the big opportunity we’ve been working on for the last three or four years.” The company had embarked on a program of drilling horizontal sidetrack wells. XTO had been getting reserves of 500,000 to 1 million barrels of oil per well, Schultze said.
On the west flank, where the strata are essentially tipped on end, XTO drills directionally through the formation and then goes back and penetrates the formation again on the bottom side of the well, Hammond said.
In addition to developing the west flank the company has since drilled into the east flank.
The company’s published operations reviews for the third quarter of 2004 and for the first three quarters of 2005 show that the company has now drilled a total of 11 sidetrack wells, with average reserves of 750,000 barrels per well. The company drilled two sidetracks in 2004 and one sidetrack in 2005.
Although the company had planned to drill a second sidetrack in 2005, a Petroleum News source said that further drilling will not now occur until at least the spring of 2006.
Bill Popp, oil, gas and mining liaison for Kenai Peninsula Borough, told Petroleum News in October 2005 that new drilling from A platform is under consideration for 2006, but not yet sanctioned. Popp also said that XTO is in the process of upgrading its crew quarters on C platform and plans to make significant upgrades to safety and fire equipment on both A and C platforms during the winter of 2005-06.
XTO has also converted four wells to injectors for water flood since it purchased the field. Jurassic possibilities There could be additional opportunities in the Jurassic strata deep under the field’s Tertiary reservoir. The oil found in the Cook Inlet basin originated from a mid-Jurassic source rock and geologists have long speculated about the possibility of oil remaining within a Jurassic reservoir.
A well was drilled into the Jurassic in the McArthur River field, but while it came on with a very high production it dropped off very quickly, Schultze told Petroleum News in November 2002.
“And we believe that with some different techniques, different completion methods, that maybe you can get something that will produce long term,” Schultze said. If the company can get a good test, it will then look at whether it could move into full development.
But deep drilling into the Jurassic is likely to prove an expensive proposition.
“We’re having a little trouble justifying that project — going into the Jurassic — but we’re still hopeful we can do it at some point,” Schultze said.
Meantime, XTO continues to follow its strategy for developing the Tertiary reservoir at Middle Ground Shoal. And in an Oct. 20 webcast a company spokesperson described XTO’s Alaska operations as being “on track.”
| 