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Explorers 2011: Aurora Gas keeps up field production Drilling wells, using state-of-the-art fracking to push up flow rates from Cook Inlet gas fields Alan Bailey Petroleum News
Aurora Gas, the small independent producer that specializes in Cook Inlet natural gas, has been busy recently, continuing to work its gas fields on the west side of the inlet to maintain gas production levels. The company operates five modest-sized fields and has been trying some novel techniques to drive up production from some of its wells.
In the fall of 2010 the company used hydraulic fracturing in one of the wells in its Three Mile Creek field to boost production. That exercise having proved fairly successful, the company anticipates using the same technique in a new well planned for that same field, Ed Jones, Aurora Gas executive vice president, oil and gas, told Petroleum News in early September.
Multiple pays The fracturing involves identical techniques to those used for the development of shale gas wells in the Lower 48 except that, unlike typical shale gas wells, Aurora’s wells are not horizontal, Jones said. The target for the “fracking,” by the pumping of high pressure fluid into the well, is the Beluga formation, which contains between 12 and 15 separate sand pay zones in the Three Mile Creek field, with each zone being anywhere from about 10 to 30 feet thick, he said. The Beluga sands tend to contain quite a bit of silt and clay, making it difficult for gas to flow through them and rendering gas production from some of the deeper sands rather ineffective, Jones said. Hydraulic fracturing of the sand bodies opens up channels for gas to flow to the well.
In a procedure exactly analogous to what is termed “multistage fracking” in shale gas wells, Aurora Gas separately fracked five separate zones in the Three Mile Creek well. With some sand units being quite closely spaced, some frac zones straddled more than one unit — there were eight sand layers in total involved in the fracking exercise, Jones said.
“That seemed to work quite well and the results were encouraging,” he said.
The new well to be drilled at Three Mile Creek will involve a step out from the existing productive area of the field, bringing more pay into production. Another new well, the Nikolai Creek No. 10 in the Nikolai Creek field, was being completed in mid-September — that well penetrated some deeper pay sands in that field. The deeper zone had been identified from a 3-D seismic survey that Aurora Gas shot about six years ago. The deeper pays are already producing in some parts of the field, but represent a new development in the section of the field where the new well is located, Jones said.
Although Aurora Gas’s fields are now pretty much developed, a further well, stepping out into a new area of reservoir, is possible at either Nikolai Creek or Three Mile Creek, Jones said.
Removing sand In another initiative to boost production, Aurora Gas has been using coiled tubing to flush sand from some of its wells in the Nikolai Creek and Moquawkie fields. Over time, loose sand from the poorly consolidated Cook Inlet basin sandstones tends to flow into gas production wells. In fact one of Aurora Gas’s well had become so plugged with sand that production had all but stopped, Jones said.
“So we ran in coiled tubing to clean it out and restored production to that well. We’ve done that on a couple of wells,” he said.
Coiled tubing consists of a continuous length of relatively small diameter steel tubing, normally used to drill sidetrack wells out from the sides of conventional well bores.
Recently, production from Aurora Gas’s five fields has been running at 5 million to 6 million cubic feet per day, supplying fuel gas to a couple of Cook Inlet oil producers and supplying utility gas to Fairbanks Natural Gas, for shipping as liquefied natural gas to Fairbanks. Jones said that he hopes that the two new development wells will boost production to around 10 million cubic feet per day. Typically a new well gives a sharp boost to production before fading off a bit, he said.
Aurora Gas recently signed a new gas supply agreement with Enstar Natural Gas Co., the main Southcentral Alaska gas utility. However, this contract, which has been submitted to the Regulatory Commission of Alaska for approval, simply enables Aurora to bid to meet any of Enstar’s unmet needs during peak winter demand if Aurora has gas available.
Gas storage For the past couple of years or so Aurora Gas has been pursuing the possibility of using part of its Nicolai Creek field as a gas storage facility, to help bolster utility gas deliverability during peak winter demand. The company wants to operate the facility for third party use, renting out storage capacity to utilities or other businesses that need to warehouse gas. The facility would be particularly suitable for the support of brief periods of especially high gas demand, with the facility having a fairly modest storage capacity but the ability to deliver gas rapidly.
Aurora Gas conducted an open season for the facility in the summer of 2009, and in May 2010 the Alaska Oil and Gas Conservation Commission approved the use of the facility for storage. However, Aurora Gas has yet to sign up any gas storage customers.
Aurora has some ideas for perhaps expanding the storage capacity somewhat, but for now the project is on hold, waiting for customers, Jones said.
“It’s still a good project and it’s not going away,” he said.
Exploration prospects In addition to its operational gas fields, Aurora Gas has several exploration prospects under lease, both on the west side of the Cook Inlet and on the Kenai Peninsula. And, although the company is currently fully focused on development activities in its fields, it hopes at some time to find an industry partner for some new exploration. The company has been looking to shoot a new 3-D seismic survey and re-enter an old well in the Cohoe prospect, near Kasilof on the Kenai Peninsula, but Alaska’s Division of Oil and Gas has recently turned down Aurora’s application to form a Cohoe unit, thus allowing the Cohoe leases to expire. Aurora may appeal the division’s decision.
Aurora Gas is 90 percent owned by Kaiser Francis Oil Co., a company whose interest in investing in the Cook Inlet oil and gas industry, especially in new exploration, has tended to wax and wane over the years. Kaiser has on occasion tried to sell its Aurora Gas interests, with recent rumors of negotiations with Apache Corp. However, although Kaiser would be willing to sell Aurora at what it considers to be a reasonable price, Kaiser has not been actively pushing to sell, Jones said.
“There are some interested parties and we hope to get back to them some more,” he said, commenting that the Aurora Gas staff has not had time recently to focus on selling the company.
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