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Home My WebLink About2011 Deep Creek UnitChevron March 30, 2012 Philip M. Ayer Petroleum Engineer MCA Asset Development Daniel Seamount, Chairman Alaska Oil & Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, Alaska 99501-3539 DEEP CREEK UNIT HAPPY VALLEY FIELD STATE OF ALASKA 2011 ANNUAL RESERVOIR REVIEW Dear Commissioner Seamount: Union Oil Company of California (a Chevron U.S.A. Inc. division) 1029 West 3rd Avenue, Suite 150 Anchorage, AK 99501 Tel 907 263 7600 Fax 907 263 7607 Email pmayer@chevron.com Email eodm@chevron.com RECEIVED MAR 3 0 NII Ahlike Gas Cans commission ArC"Orzjgo In accordance with Conservation Order No. 553, Union Oil Company of California ("Union"), as Operator, respectfully submits the following Annual Reservoir Review for the Happy Valley Field. This is the 7th Annual Reservoir Review and corresponds to events during the 2011 calendar year. Note that the Happy Valley Field has been on production since November 2004. Production Uudate From November 2, 2011 to November 10, 2011, wellwork was conducted in well HV A03 to isolate the existing Tyonek T-81 sand and perforate the Tyonek T-40, T-17, and T-10 sands. During the post -perforation period prior to RTP (returning to production) , there was little to no change in SITP (shut in tubing pressure) and an apparent fluid level rise as compared to pre -perforation conditions. After RTP, there was no measured gas flow. The well was shut in and remained shut in during the balance of 2011. Prior to adding perforations the well was shut in. From March 16, 2011 to March 17, 2011 work was conducted in well HV B-12 to add Tyonek T-140 sand perforations to the existing Lower Tyonek perforated Union Oil Company of California / A Chevron Company http://www.chevron.com 2011 Annual Reservoir Review Happy Valley Field March 30, 2012 completion. During the post -perforation period prior to RTP, there was some moderate SITP response and little to no apparent fluid level rise as compared to pre -perforation conditions. After RTP, the well flowed 500 to 600 MCF/D (minimal incremental gas flow rate) but the historical production decline rate on the well was reduced. Prior to adding perforations the well was producing approximately 500 MCF/D. As of December 31St, 2011, the cumulative production from the Happy Valley field was 18,325,019 Mcf of gas and 46,685 Bbl of water. Seven (7) Happy Valley wells produced during 2011. Late December 2011 well test rates were as follows: a. HV -A01 - Lower Tyonek Producer. Current rate —0.6 MMcf/d & 0 bwpd, at 253 psig FTP. b. HV -A02 - Lower Tyonek Producer. Current rate —0.2 MMcf/d & 0 bwpd, at 250 psig FTP. c. HV -A08 - Beluga and Upper Tyonek Producer. Current rate —0.4 MMcf/d & 2 bwpd, at 250 psig FTP. d. HV -A09 - Upper Tyonek Producer. Current rate —1.1 MMcf/d & 0 bwpd, at 261 psig FTP. e. HV -A10 - Upper Tyonek Producer. Current rate —2.0 MMcf/d & 0 bwpd, at 274 psig FTP. f. HV -A11 - Beluga and Upper Tyonek Producer. HV -A11 is currently shut-in. g. HV -11312 - Lower Tyonek Producer. Current rate —0.4 MMcf/d & 2 bwpd, at 262 psig FTP. h. HV -1313 - Upper Tyonek Producer. Current rate —0.2 MMcf/d & 0 bwpd, at 264 psig FTP. No individual Happy Valley well production plots were attached this year in the Appendix. Reservoir Pressure There are currently two different formations (Beluga & Tyonek) and numerous sand intervals open to production at Happy Valley. Because all of the Happy Valley wells have commingled production (from numerous intervals), it is difficult to obtain individual reservoir pressures and is thus difficult to calculate Gas -in-place volumes from material balance. Secondly, very few pressure data points have been taken over the past few years, due to the fact that most wells produce some water with the commingled gas. Shutting in a well that makes any appreciable amount of water puts the gas production/reserves at risk. No downhole static Happy Valley reservoir pressure information was gathered during 2011. Cumulative Production As previously mentioned the cumulative production from the Happy Valley field was Union Oil Company of California / A Chevron Company http://www.chevron.com 2011 Annual Reservoir Review Happy Valley Field March 30, 2012 18,325,019 Mcf of gas and 46,685 Bbl of water, through December 31St, 2011. The cumulative produced gas volumes, sub -divided by well and formation (through 12/31/2011) are as follows: Reservoir Summary Beluga - The Beluga formation is currently open in only the HV -A8, HVA11 and HV - B13 wellbores. The HV -A8 well is also producing from the Upper Tyonek formation, at a gas production split of 40% Beluga and 60% Tyonek (determined from downhole measurements). The HV -1313 wellbore is perforated in eight different Upper Tyonek intervals, in addition to one Beluga interval (BLG-130). The latest flowing pressure/temperature survey (12/19/09) did not show any production coming from the BLG-130 perforations. HV -11 wellbore has remained shut in, not capable of flow, since adding Beluga perforations in HV -A11 in Dec 2009. Through December, 2011, the cumulative production from the Beluga is 0.757 BCF gas and 34,613 BW. Potential uphole Beluga pay exists in the HV -A9, HV -A10, HV - B12, and HV -1313 wells and will be added as reservoir management allows. Additional offset locations may exist for future development from the Pad B. Upper Tyonek - The Upper Tyonek formation is currently open in the HV -A8, HV - A9, HV -A10, HV -A11, and HV -1313 wellbores. The cumulative production from the Upper Tyonek is 11.998 BCF gas and 12,164 BW. Additional Upper Tyonek potential pay exists in the HV -A1, HV -A10, and HV -1312 wells. Additional offset locations may exist for future development from the Pad B. Lower Tyonek - The Lower Tyonek formation is currently open in the HV -A1, HV - A2, HV -A3 and HV -1312 wellbores. The cumulative production from the Lower Tyonek is 5,569 BCF gas and 9,908 BW. The Lower Tyonek has been tested in HV - A3, HV -A4, HV -A6, HV -A7, and HV -A11. Economically producible gas in the Lower Tyonek has only been found in wells HV -A1, HV -A2 and HV -1312. Union Oil Company of California / A Chevron Company http://www.chevron.com Beluga Upper Tyonek Lower Tyonek HV -A01 4,012,290 HV -A02 933,314 HV -A08 757,328 1,135,992 HV -A09 3,303,092 HV -A10 7,028,779 HV -A11 135,554 0 HV -1312 623,263 HV -1313 395,405 Cum Gas Volume MCF 757,328 11,998,822 5,568,867 Reservoir Summary Beluga - The Beluga formation is currently open in only the HV -A8, HVA11 and HV - B13 wellbores. The HV -A8 well is also producing from the Upper Tyonek formation, at a gas production split of 40% Beluga and 60% Tyonek (determined from downhole measurements). The HV -1313 wellbore is perforated in eight different Upper Tyonek intervals, in addition to one Beluga interval (BLG-130). The latest flowing pressure/temperature survey (12/19/09) did not show any production coming from the BLG-130 perforations. HV -11 wellbore has remained shut in, not capable of flow, since adding Beluga perforations in HV -A11 in Dec 2009. Through December, 2011, the cumulative production from the Beluga is 0.757 BCF gas and 34,613 BW. Potential uphole Beluga pay exists in the HV -A9, HV -A10, HV - B12, and HV -1313 wells and will be added as reservoir management allows. Additional offset locations may exist for future development from the Pad B. Upper Tyonek - The Upper Tyonek formation is currently open in the HV -A8, HV - A9, HV -A10, HV -A11, and HV -1313 wellbores. The cumulative production from the Upper Tyonek is 11.998 BCF gas and 12,164 BW. Additional Upper Tyonek potential pay exists in the HV -A1, HV -A10, and HV -1312 wells. Additional offset locations may exist for future development from the Pad B. Lower Tyonek - The Lower Tyonek formation is currently open in the HV -A1, HV - A2, HV -A3 and HV -1312 wellbores. The cumulative production from the Lower Tyonek is 5,569 BCF gas and 9,908 BW. The Lower Tyonek has been tested in HV - A3, HV -A4, HV -A6, HV -A7, and HV -A11. Economically producible gas in the Lower Tyonek has only been found in wells HV -A1, HV -A2 and HV -1312. Union Oil Company of California / A Chevron Company http://www.chevron.com 2011 Annual Reservoir Review Happy Valley Field March 30, 2012 Pending Projects As of January 1, 2012 Hilcorp Inc. is the owner and operator of the Happy Valley Field. Capillary tubing strings (chemical injection lines) were installed in HV -A8 (2/1/11), HV -B12 (3/21/11), HV -A2 (6/2/12), and HV -B13 (12/20/11) to help unload the water that is being produced with the gas. This supplements/replaces the historical practice of dropping soap sticks which aids in "gas lift" of produced fluids (water & residual diesel from previous years fracs). Testing and Monitoring During the report period the Happy Valley wells were tested regularly (several times monthly) and allocated production numbers were reported to the state monthly. In addition to the well testing, the wellbores were routinely (daily) monitored for any casing or tubing pressure anomalies. Surface Safety Valve Testing The SSV's were tested on April 5th and September 27th 2011. These tests were witnessed by Bob Noble and Jeff Jones, respectively for the AOGCC. As of the end of the performance period , the HV SSV's are operating with approved tests on all SSV's. The SSV test results for 2011 are attached in Appendix B. Sincerely, C_. Philip M. Ayer Attachments Cc: L .Greenstein, Hilcorp Inc. Field Well Files, CVX Union Oil Company of California / A Chevron Company http://www.chevron.com 2011 Annual Reservoir Review Happy Valley Field March 30, 2012 APPENDIX A Happy Valley Field Well Production Plots ** Appendix A not included in this 2011 annual report ** Union Oil Company of California / A Chevron Company http://www.chevron.com 2011 Annual Reservoir Review Happy Valley Field March 30, 2012 APPENDIX B Happy Valley Field 2011 Safety Valve System Test Reports Union Oil Company of California / A Chevron Company http://www.chevron.com Alaska Oil and Gas Conservation Commission Safety Valve System Test Report Operator: Chevron Submitted By: Sandy McMillan Date: 4/5/2011 Operator Rep: Rick Musgrove Field/Unit/Pad: Happy Valley A -Pad AOGCC Rep: Bob Noble Separator psi: LPS 254 HPS Well Data Pilots SSV SSSV Retest/SI Date Well Type Well Pressures Gas Lift Waiver Well Number Permit Number Separ PSI Set PSI UP Trip Test Code Test Test Code Code Date Passed Retest Oil WAG GINJ Or Date Shut In GAS, CYCLE, S1 Inner Outer Tubing PSI PSI PSI Yes/No Yes/No Al 2030720 254 200 202 P P 4/5/2011 GAS 260 No No A2 2031130 254 200 202 P P 4/5/2011 GAS 265 No No A3 2032220 254 3/1/2004 SI No No A4 2032230 254 3/1/2004 S1 No No A6 2040440 254 6/1/2004 SI No No A7 2041060 254 8/1/2004 SI No No A8 2041140 254 200 200 P P 4/5/2011 GAS 262 No No A9 2041700 254 200 202 P P 4/5/2011 GAS 261 No No A10 2041860 254 200 200 P P 4/5/2011 GAS 283 No No All 2042070 254 1/22/2010 SI No No Wells: 5 Components: 10 Failure 0 Failure Rate: 0.00% ❑ 90 Day Remarks: PLB 01/26/11 Page I of 1 Happy Vally A -Pad SSV Report.xls Alaska Oil and Gas Conservation Commission Safety Valve System Test Report Operator: Chevron Submitted By: Sandy McMillan Date: 4/5/2011 Operator Rep: Rick Musgrove Field/Unit/Pad: Happy Valley B -Pad AOGCC Rep: Bob Noble Separator psi: LPS 275 HPS Well Data Pilots SSV SSSV RetestlSI Date Well Type Well Pressures Gas Lift Waiver Well Permit Number Number Separ PSI Set UP PSI Tri Test Code Test Test Code Code Date Passed Retest Oil, WAG, GINJ, Or Date Shut In GAS, CYCLE, SI Inner Outer Tubing Ves/No PSI PSI PSI Ves/No B12 2071230 275 200 195 P P 4/5/2011 GAS 284 No No B13 2071510 275 200 200 P P 4/5/2011 GAS 277 No No Wells: 2 Components: Remarks: 4 Failure 0 Failure Rate: 0.00% ❑ 90 Day PLB 01/26/11 Page 1 of 1 Happy Vally B -Pad SSV Report.xls Alaska Oil and Gas Conservation Commission Safety Valve System Test Report Operator: Chevron Submitted By: Sandy McMillan Date: 9/27/2011 Operator Rep: Rick Musgrove Field/Unit/Pad: Happy Valley A -Pad AOGCC Rep: Jeff Jones Separator psi: LPS 250 HPS Well Data Pilots SSV SSSV RetestlSl Date Well Type Well Pressures Gas Lift Waiver Well Number Al Permit Number 2030720 Separ PSI 250 Set PSI 200 UP Trip 200 Test Code P Test Test Code Code P Date Passed Retest Oil, WAG, GINJ, Or Date Shut In GAS, CYCLE, sI 9/27/2011 GAS Inner Outer Tubing PSI PSI PSI 256 Yes/No No Yes/No No A2 2031130 250 200 199 P P 9/27/2011 GAS 266 No No A3 2032220 250 3/l/2004 SI No No A4 2032230 250 3/1/2004 SI No No A6 2040440 250 6/1/2004 SI No No A7 2041060 250 8/1/2004 SI No No A8 2041140 250 200 200 P P 9/27/2011 GAS 263 No No A9 2041700 250 200 200 P P 9/27/2011 GAS 267 No No A10 2041860 2501 200 200 P P 9/27/2011 GAS 282 No No All 2042070 250 1/22/2010 SI No No Wells: 5 Components: 10 Failure 0 Failure Rate: 0.00% ❑ 90 oay Remarks: PLB 01/26/11 Page 1 of 1 Happy Vally A -Pad SSV Report 9-27-11.xls Alaska Oil and Gas Conservation Commission Safety Valve System Test Report Operator: Chevron Submitted By: Sandy McMillan Date: 9/27/2011 Operator Rep: Rick Musgrove Field/Unit/Pad: Happy Valley B -Pad AOGCC Rep: Jeff Jones Separator psi: LPS 259 HPS Well Data Pilots SSV SSSV RetesIISI Date Well Type Well Pressures Gas Lift Waiver Well Permit Number Number B 12 2071230 Separ PSI 259 Set UP PSI rip 200 196 Test ode P Test Test Code Code P Date Passed Retest Oil, WAG, GINJ, Or Date Shut In GAS, CYCLE, S1 9/27/2011 GAS Inner Outer Tubing Yes/No PSI PSI PSI 254 No Yes/No No B13 2071510 259 200 198 P P 9/27/2011 GAS 259 No No Wells: 2 Components: 4 Failure 0 Failure Rate: 0.00% ❑ 90 Day Remarks: PLB 01/26/11 Page 1 of 1 Happy Vally B -Pad SSV Report 9-27-1 l.xls 2011 Annual Reservoir Review Happy Valley Field March 30, 2012 APPENDIX C Happy Valley Field Reservoir P/Z versus Cumulative Gas Plots ** Appendix C not included in this 2011 annual report ** Union Oil Company of California / A Chevron Company http://www.chevron.com