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Armstrong applies to expand North Fork Operator wants new state unit agreement for Kenai Peninsula gas field to include complete closure of each productive gas sand Alan Bailey Petroleum News
Armstrong Cook Inlet has applied to Alaska’s Division of Oil and Gas for an expansion to the North Fork unit in the southern Kenai Peninsula. Natural gas production from the North Fork field began in March 2011, feeding a much needed new gas supply into the Southcentral Alaska gas pipeline network.
The existing unit agreement for the field dates back to the time when the unit included both state and federal land, with the federal government administering the unit. In 1971 the North Fork unit was contracted to a 640-acre gas pool, Armstrong’s cover letter for its unit expansion application says.
New agreement But, with all of the federal land within the existing unit having since been transferred to the state, Armstrong wants a new state unit agreement, with the acreage within the unit expanded to include the structural closure of each reservoir sand that is either known to be or expected to be productive, according to Armstrong’s cover letter and the latest North Fork plan of development, submitted at the end of December. The proposed participating area for the field includes the lowest known elevation of gas within each of the reservoir sands.
According to the Division of Oil and Gas, the expanded unit would encompass 4,800 acres in six state leases and in three leases in land belonging to Cook Inlet Region Inc., the Southcentral Native regional corporation.
North Fork gas is sold to Enstar Natural Gas Co. under a gas supply agreement for up to 1.2 billion cubic feet of gas per year up to a total production of 10 billion cubic feet.
The field produces gas from several lenticular sand bodies within the Tyonek formation, on a major “four-way anticlinal closure” that forms part of a series of north-northeast trending folds in the Tertiary rock strata under the Kenai Peninsula, the cover letter says. A four-way anticlinal closure is an elongated dome-shaped geologic structure, a type of structure that commonly traps pools of hydrocarbons in the oil and gas fields of Alaska’s Cook Inlet basin.
Discovered in 1965 The history of the North Fork field goes back to 1965 when the Standard Oil Company of California encountered gas in two zones in the Tyonek formation when drilling the North Fork Unit No. 41-35 well as part of an oil exploration program. With no interest in natural gas development at the time, the field lay undeveloped for many years, during which time ownership of the unit changed hands several times.
Armstrong acquired the unit in 2007, subsequently re-entering the 41-35 well, conducting a 3-D seismic survey and drilling three new wells. Anchor Point Energy, the company formed by Armstrong and its partners at North Fork, subsequently built a 12-mile pipeline to Anchor Point on the coast of Kenai Peninsula, to hook up with another gas line that Enstar Natural Gas Co. constructed south from the existing pipeline infrastructure.
There are currently four North Fork wells, all producing from the Tyonek formation, Armstrong said in its cover letter for the unit extension application. One of the wells, the North Fork Unit No. 14-25, produces intermittently, the company said.
“Within the North Fork unit six separate Tyonek sands have produced gas with two additional sands indicating behind-pipe pay based on shows and log calculations,” the company wrote.
The North Fork plan of development says that Armstrong plans to drill a directional well from the existing field well pad into an untested fault block in the Tyonek on the crest of the North Fork structure.
No oil Despite the fact that the 41-35 well tested minor amounts of oil in the Hemlock formation, older and deeper than the Tyonek, subsequent wells drilled in the unit have not encountered a Hemlock oil reservoir, the cover letter says. And although sands of the Beluga formation, younger and shallower than the Tyonek, commonly reservoir natural gas in the Cook Inlet gas fields, none of the North Fork wells have shown anything more than gas shows in the Beluga. Coals, the primary source of Cook Inlet natural gas, occur as discontinuous seams within a succession of siltstones, sand channels and rocks of volcanic origin in the Beluga formation at North Fork, the cover letter says.
However, although North Fork gas currently comes from the more productive reservoir zones within the Tyonek, the testing of numerous other, poorer quality zones in the Tyonek and Beluga is a future possibility, the cover letter says.
The Sterling formation, above the Beluga and also a prolific producer of natural gas in the Cook Inlet basin, is not prospective at North Fork because, at the relatively shallow burial depth of this rock unit, there is a lack of effective seal rocks to help trap gas in reservoir sands, the cover letter says.
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