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Providing coverage of Alaska and northern Canada's oil and gas industry
May 2019

Vol. 24, No.19 Week of May 12, 2019

Hilcorp plans little work in gas fields

Plans of development for 4 Kenai Peninsula fields focused primarily on maintaining production; Ninilchik may see new wells next year

Kristen Nelson

Petroleum News

Hilcorp Alaska produced some 193 million cubic feet per day of natural gas from Cook Inlet last year, 85% of the total of 228 million cubic feet per day produced from the Cook Inlet basin in 2018.

Four of its Kenai Peninsula gas fields - Cannery Loop, Deep Creek, Nikolaevsk and Ninilchik - account for just 22% of Hilcorp’s Cook Inlet gas production, and in plans of development submitted to the Alaska Department of Natural Resources’ Division of Oil and Gas on May 1, the company’s focus at the three smaller of those fields was on maintenance of production, with one new well planned at Cannery Loop, while at the largest, Ninilchik, the company indicated that new drilling would probably be put off at least a year.

All the plans are for Aug. 1, 2019, through July 31, 2020.

Cannery Loop

The POD for Cannery Loop is the 40th for that field.

In its 39th plan Hilcorp said it would continue to evaluate oil and gas reservoirs at Cannery Loop for long-term development but did not plan any long-range development during the 2018-19 plan period.

The company said it anticipated that production at Cannery Loop would likely remain steady, although a slight decline was possible.

Hilcorp said in the 40th POD it did maintain steady production at an average of 8 million cubic feet per day at the field during the 2018 calendar year.

For the 2019 plan, Hilcorp said it is evaluating drilling the CLU No. 14 in August, a well which would primarily target the Middle Beluga with secondary targets in the Sterling sands. Hilcorp said the well would “explore farther east in the Lower Beluga and Tyonek sands than any previously drilled well at CLU,” providing “more insight of the eastern flank of the Cannery Look structure,” information which might “lead to additional prospects to the north of the field.”

Deep Creek

This is the 16th POD for Deep Creek, which produced an average of 5.1 million cubic feet per day in 2018.

In the 15th plan Hilcorp said it planned to continue a stratigraphic test well program with two to four stratigraphic test wells, with an exploratory drilling program in 2019 based on results of the stratigraphic test wells and likely targeting the Sterling and Beluga formations.

Production from the Happy Valley participating area averaged 5.1 million cubic feet per day in 2018, the company said, with no production from Happy Valley tract operations. Hilcorp said there were no wells currently producing on a tract basis.

Hilcorp said it has completed evaluation on drilling a new HVB No. 18 well primarily targeting the Middle/Deep Tyonek sands with secondary targets in the Middle to Upper Beluga sands. The well was originally planned to be drilled in December, but is likely to be delayed, “due to bottlenecks in the KBPL gas pipeline.”

A new exploratory drilling program is still planned for 2020, based on results of stratigraphic test wells, and likely targeting the Sterling and Beluga formations.

Current production at Deep Creek will be “maintained and improved throughout the 2019 POD period, primarily through implementation of efficiencies and optimization projects,” the company said.

Nikolaevsk

Nikolaevsk is the smallest of the fields in this group of PODs, with production from a single well averaging 500,000 cubic feet per day in 2018. This is the 12th POD for the field.

Hilcorp said its plan for 2018 was maintenance of production from the Red Well No. 1. There were no development projects at Nikolaevsk in the 2018 POD period, the company said.

Hilcorp said in its 2019 POD that it did not have any planned exploration or delineation project at the field and plans to continue production from the Red Well No. 1

Ninilchik

Ninilchik is the largest field in this group, averaging 27.9 million cubic feet per day in calendar year 2018. This is the 15th POD for the field.

In reviewing the previous plan, Hilcorp said it has identified six drilling prospects in the Grassim Oskolkoff participating area but did not expect that those wells would be drilled under the 2018 plan unless market conditions changed.

The company said it planned to drill the Pearl No. 2A from a new pad on private land outside of the unit. The well, which would be drilled into the unit, is classified as a delineation well and the company said it anticipates that production from that well would necessitate reconfiguration of both the unit and the participating area. Drilling of the 2A had been planned for 2017, but was deferred for other opportunities, the company said, and contingent on market conditions would most likely extend beyond the 2018 POD period.

Hilcorp said that based on market demand and conditions it would also consider sidetracking the existing Blossom exploratory well.

In its 2019 POD Hilcorp said that the six identified prospects in the Grassim Oskolkoff PA will not likely be drilled in the 2019 POD period unless market conditions change but will most likely be drilled in the 2020 or 2021 POD periods.

Hilcorp said the Pearl No. 2A may be drilled in the late 2019 POD period, “contingent on market conditions, but will most likely extend beyond the 2019 POD period.”

The Blossom No. 1 may be sidetracked, based on market demand and economic conditions, but will most likely be drilled in the 2020 or 2021 POD periods.

March data from the Alaska Oil and Gas Conservation Commission show 26 producing wells at Ninilchik. Hilcorp said that during 2019 it would evaluate adding “velocity strings and/or other artificial lift options in various wellbores to enhance production.”

The company has a workover program planned during the 2019 POD for several wells and plans to install an additional high-pressure heater-separator unit at the Paxton Pad to allow for additional throughput from the Paxton No. 8 wells. It may also install additional dehydration facilities on the Susan Dionne Pad to allow for additional throughput from Kalotsa Pad. It plans to add a water injection module at Susan Dionne Pad for produced water disposal.






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