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Home My WebLink About2013 Deep Creek UnitMAR 2 7 2014 9' OGCC Hilcorp Alaska, LLC April 1, 2014 Cathy Foerster, Chairman Alaska Oil & Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, Alaska 99501-3539 RE: DEEP CREEK UNIT, HAPPY VALLEY FIELD, STATE OF ALASKA, 2013 ANNUAL RESERVOIR REVIEW Dear Commissioner Foerster: Post Office Box 244027 Anchorage, AK 99524-4027 3800 Centerpoint Drive Suite 100 Anchorage, AK 99503 Phone: 907/777-8414 Fax: 907/777-8580 dduffy@hilcorp.com In accordance with Conservation Order No. 553, Hilcorp Alaska, LLC ("Hilcorp"), as Operator, hereby submits for your review the following Annual Reservoir Review for the Happy Valley Field. This is the 10th Annual Reservoir Review and corresponds to events during the 2013 calendar year. Note that the Happy Valley Field has been on production since November 2004. Production Update The following section will detail wellwork and results performed in the Happy Valley Field during the 2013 calendar year. 1. Gas development drilling: No new exploration and development wells were drilled by Hilcorp in the Happy Valley PA. 2. Workover of the existing wells: The following work was performed by Hilcorp to optimize production from the Deep Creek Unit during the 10th POD period. a. HVB-16 — Since the initial drill effort was unable to reach the targeted TD depth of 5,560', the well was unsuccessfully completed well in Beluga 40 and 45 sands (PA production). Plan is to re -drill the development targets at the end of 2014. b. HVB-15 —This well was perforated in two additional Upper Beluga (A & C) sands, adding to the existing Upper Beluga (D E & F sands) perforated completion. The well was returned to production flowing 1,000 Mcfd at 805psi FTP. Prior to adding perforations the well was producing approximately 400 Mcfd at 266psi FTP. C. HVB-13 —This well was perforated in the Beluga BLG-40, BLG-36, and BLG-29 sands, adding to the existing Beluga and Tyonek perforated completion. The well was returned to production flowing 550 Mcfd at 755psi FTP. Prior to adding perforations the well was producing approximately 250 Mcfd at 265psi FTP. The production rate and FTP dropped off significantly and began flowing water within 5 months. The well was shut in and the BLG-29 was patched due to water production identified during a flowing pressure temperature survey. The well has been unable to flow since the patch installation and remained shut-in during the balance of 2012. d. HVA -11— This well was perforated in the Tyonek T-4 & T-6 sands, adding to the existing Beluga and Tyonek perforated completion. There was little to no change in SITP or fluid level as compared to pre -perforation conditions. The well has been unable to flow gas and has remained shut in during the balance of 2013. Prior to adding perforations the well was shut in. Exploration / Seismic: During 2013, Hilcorp began processing 47.54 square miles of 3D seismic data recorded in Q1 2013 centered on the Deep Creek Unit. Demobilization and cleanup continued through the end of April 2013. Processing of the primary data set was conducted from March through October of 2013. Pre Stack Depth Migration (PSDM) processing is ongoing. Interpretation of the 3D data is in progress and will be used to establish the Deep Creek Unit's exploratory and development drilling program throughout the 2014 calendar year and beyond. As of December 31, 2013, the cumulative production from the Happy Valley field was 22,194,850 Mcf of gas and 77,284 Bbl of water. Ten (10) Happy Valley wells produced during 2013. As of late December 2013, well test rates were as follows: a. HVA -01— Lower Tyonek Producer. Current rate = 0.68 MMcf/d & 1 BWPD, at 139 psig FTP. b. HVA -02 — Lower Tyonek Producer. Current rate = 0.13 MMcf/d & 1 BWPD, at 125 psig FTP. c. HVA -08 — Beluga and Upper Tyonek Producer. Current rate = 0.35 MMcf/d & 1 BWPD, at 133 psig FTP. d. HVA -09 — Upper Tyonek Producer. Current rate = 0.82 MMcf/d & 1 BWPD, at 141 psig FTP. e. HVA -10 — Upper Tyonek Producer. Current rate = 1.78 MMcf/d & 0 BWPD, at 149 psig FTP. f. HVB-12 — Upper Tyonek Producer. Current rate = 1.05 MMcf/d & 1 BWPD, at 780 psig FTP. g. HVB-14 — Sterling Producer. Current rate = 2.26 MMcf/d & 278 BWPD, at 115 psig FTP. h. HVB-15 — Upper Beluga Producer. Current rate = 4.70 MMcf/d & 19 BWPD, at 137 psig FTP. Appendix A contains the production plots for each individual Happy Valley well. Reservoir Pressure There are currently three different producing formations (Sterling, 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. The Upper Beluga and Sterling Reservoirs were curtailed in 2013 allowing some opportunities to collect downhole static reservoir pressure information. Both the Sterling A and Upper Beluga A, C, & D sands indicate depletion drive reservoirs. No other downhole reservoir data was gathered during 2013. Page 2 Cumulative Production As previously mentioned the cumulative production from the Happy Valley PA was 22,194,850 Mcf of gas and 77,284 Bbl of water, through December 31St, 2013. The cumulative produced gas volumes, sub- divided by well and formation (through 12/31/2013) are as follows: Reservoir Summary Sterling — The Sterling formation is currently open in the HVB-14 wellbore and is above the currently defined Happy Valley PA. The cumulative production from the Sterling is 1.270 BCF gas and 24,868 BW. Additional Sterling potential pay exists in the HVB-15 well that is not seen in other A or B pad wells, and additional offset locations may exist for future development from a potential C Pad. Upper Beluga — The Upper Beluga formation is currently open in the HVB-15 wellbore and is above the currently defined Happy Valley PA. The cumulative production from the Upper Beluga is 1.072 BCF gas and 2,715 BW. Additional Upper Beluga potential pay exists in the HVB-12, HVB-16, and HVB-13 wells, but producing from these wells may interfere with the nearby HVB-15 well. Additional offset locations may exist for future development from a potential C Pad. Beluga — The Beluga formation is currently open in the HVA -08, HVA -11, and HVB-13 wellbores. The HVA -08 well is also producing from the Upper Tyonek formation, at a gas production split of 25% Beluga and 75% Tyonek (determined from downhole measurements). The HVB-13 and HVA -11 wellbores are perforated in the Upper Tyonek and Beluga intervals. These wells are currently shut in, not capable of flow, since adding Beluga perforations. Through December 2013, the cumulative production from the Beluga is 0.589 BCF gas and 9,274 BW. Potential Beluga pay exists in the HVA -09, HVA -10, HVB-12, and HVB-13 wells and will be added as Page 3 Happy Valley Tract Happy Valley PA Sterling Upper Beluga _ Beluga Upper Tyonek Lower Tyonek HVA -01 4,467,521 HVA -02 1,059,529 HVA -03 10,916 HVA -08 544,674 1,634,023 HVA -09 4,015,982 HVA -10 8,628,585 HVA -11 0 135,554 0 HVB-12 422,662 779,705 HVB-13 44,774 450,925 HVB-14 1,269,832 HVB-15 1,071,979 Cum Gas Volume (MCF) 1,269,832 1,071,979 589,448 15,298,647 6,306,755 Reservoir Summary Sterling — The Sterling formation is currently open in the HVB-14 wellbore and is above the currently defined Happy Valley PA. The cumulative production from the Sterling is 1.270 BCF gas and 24,868 BW. Additional Sterling potential pay exists in the HVB-15 well that is not seen in other A or B pad wells, and additional offset locations may exist for future development from a potential C Pad. Upper Beluga — The Upper Beluga formation is currently open in the HVB-15 wellbore and is above the currently defined Happy Valley PA. The cumulative production from the Upper Beluga is 1.072 BCF gas and 2,715 BW. Additional Upper Beluga potential pay exists in the HVB-12, HVB-16, and HVB-13 wells, but producing from these wells may interfere with the nearby HVB-15 well. Additional offset locations may exist for future development from a potential C Pad. Beluga — The Beluga formation is currently open in the HVA -08, HVA -11, and HVB-13 wellbores. The HVA -08 well is also producing from the Upper Tyonek formation, at a gas production split of 25% Beluga and 75% Tyonek (determined from downhole measurements). The HVB-13 and HVA -11 wellbores are perforated in the Upper Tyonek and Beluga intervals. These wells are currently shut in, not capable of flow, since adding Beluga perforations. Through December 2013, the cumulative production from the Beluga is 0.589 BCF gas and 9,274 BW. Potential Beluga pay exists in the HVA -09, HVA -10, HVB-12, and HVB-13 wells and will be added as Page 3 reservoir management allows. Additional offset locations may exist for future development from the B Pad. Upper Tvonek — The Upper Tyonek formation is currently open in the HVA -03, HVA -08, HVA -09, HVA -10, HVA -11, HVB-12, and HVB-13 wellbores. The cumulative production from the Upper Tyonek is 15.299 BCF gas and 29,711 BW. The HVA -03 is perforated in the Upper Tyonek, but are currently shut in, not capable of flow. Additional Upper Tyonek potential pay exists in the HVA -01, HVA -10, and HV -1312 wells and will be added as reservoir management allows. Additional offset locations may exist for future development from the B Pad. Lower Tyonek — The Lower Tvonek formation is currently open in the HVA -01, HVA -02, and HVB-12 wellbores. The cumulative production from the Lower Tyonek is 6.307 BCF gas and 10,716 BW. The Lower Tyonek has been tested in HVA -03, HVA -04, HVA -06, HVA -07, and HVA -11. Economically producible gas in the Lower Tyonek has only been found in wells HVA -01, HVA -02 and HVB-12. Pendine Proiects 1. Drilling Program: Hilcorp plans to drill 1-3 unit development/exploration wells during the 11th POD period to maximize gas recovery.' The following drilling operations (not limited thereto) are being considered during the 2014 calendar year: Sidetrack the development drill well (B-16) to complete the drilling to the intended bottom hole location. This well was drilled from the Happy Valley B Pad, targeting the Beluga (BLG- 50) formation. b. Drilla 6,000' exploratory drill well (C-17) targeting the Sterling & Beluga formations. This well will be drilled from a new C Pad with a bottom hole location outside of the Happy Valley Participating Area within the Deep Creek Unit. The C pad is currently in the design and permitting stage with plans to build a new pad south of existing B Pad and is based upon the preliminary results of the 3D seismic survey. Drilla 5,000' exploratory drill well (C-18) targeting the Sterling & Beluga formations. This well will be drilled from a new C Pad with a bottom hole location outside of the Happy Valley Participating Area within the Deep Creek Unit. The C pad is currently in the design and permitting stage with plans to build a new pad south of existing B Pad and is based upon the preliminary results of the 3D seismic survey. Drilla 9,000' exploratory drill well (Happy Valley Middle) targeting the Sterling, Beluga, and Tyonek formations. This well will be drilled from a new Pad with a bottom hole location outside of the Happy Valley Participating Area within the Deep Creek Unit. Location of the proposed pad is dependent on results of the pending 3D seismic survey. If successful, Hilcorp's exploratory drilling program will require expansion of the Deep Creek 1 All proposed drilling activities are discretionary. Hilcorp reserves the right to implement changes to the timing, sequence and scope of its proposed drilling program as economic or geologic factors warrant. z Hilcorp reserves the right to implement changes to the timing, sequence and scope of its proposed workover as economic or geologic factors warrant. Page 4 Unit's sole Production Area, the Happy Valley PA, as well as establishment of a new Production Area(s) for shallow gas. Until such time as Hilcorp gains sufficient information to reasonably know or estimate the land capable of producing or contributing to exploratory formations, all proposed drilling prospects will be drilled, tested and produced on a tract basis. 1. Workover Program: Hilcorp plans to continue operating the Happy Valley wells during the 2014 calendar year to optimize production from the Deep Creek Unit.2 Possible well workovers may include, but are not limited to: a. HVB-14 run velocity string, to help unload liquid production. b. HVB-12 Adding additional Tyonek perforations to existing completion. c. HVB-13 stim tube treatment of open Beluga perforations. d. Additional stim tube or acid treatments to wells with perforations that show indications of high skin damage. e. Adding additional perforations to existing completions and/or recompleting wells into shallower horizons. f. Installing capillary tubing or velocity strings in existing wellbores, to help unload liquid production. 2. Exploration / Seismic: Data processing and analysis is ongoing in 2014. The Pre Stack Depth Migration (PSDM) processing is ongoing. Interpretation of the 3D data is in progress and will be used to establish the Deep Creek Unit's exploratory and development drilling program throughout the 2014 calendar year and beyond. 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 February 5th, April 29th, and October 17th 2013. These tests were witnessed by Bob Noble, from 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 2013 are attached in Appendix B. Sincerely, yx� Chris Kanyer Attachments Cc: Field Well Files, Hilcorp Page 5 APPENDIX A Happy Valley Field Well Production Plots Page 6 Tubing Pmssu (psi(a)) 0 0 0 0 0 o e e e o 0 0 o e o a a a a y a o U O (pps") n"m -0 do O (PfW) sWd JaWM do Page 7 7 Tubing Pnssun (psi(a)) e e e e e e e o o e Page 8 q. (PPIW) -XH seq dd (P741s) Wki lopm d0 1 E Page 8 q. (PPIW) -XH seq dd (P741s) Wki lopm d0 Tubinu Prossum (psi(a)) a a Q gggy� o Q g G V (PP+W) We j Se E) d0 Page 9 Tubing Pressure (psi(a)) Y g Q 8 OQ N S E 0 o x (PJ*sW) Weil se0 d0 b (Pf43s) Wet! JqeM dO Page 10 Tubing Prossun (psi(a)) .o- .� 'E n w a n n � •- �n a .� �^, ' n m c ca r� (P;OIW) WItI se0 do (Pmp) wBa+OUmdo Page 11 Tubing Pmsuro (psl(a)) _ is (pyasw) ales se0 d0 (pica*) WU lqeM d0 Page 12 Tubing Pnssun (Psi(a)) Page 13 v (PPM)OWU seg d0 o K (Pf41s) WA8 Js4sM d0 a i 3 � 8 v (PPM)OWU seg d0 o K (Pf41s) WA8 Js4sM d0 a Tubing Possum (ps((a)) (p,pmW) .4�M =p0 do (p/W=) D:WU AWAN do Page 14 M I Tubing Prossum (psi(a)) O n � h m � V M tV � rv. fD m V H �v ' h v •' ^ 'y➢J (Pl»W)+AV no d0 c r � (DlgV) NR! SWM d0 Page 15 Tuning Pmaaum (Psl(a)) P Q N C S V E � L4i a u (P3*4N) ayes sV5 do (P,,W) aW8 JWaM do Page 16 Page 17 Tubing Pressure (psi(s)) b A g b b ��fl 11 Y I H 7) N A i:, 8 c E j 11 J (PJ»4M) 113M1 mil se`) tri (P147s) OWU iQsM d0 ! c (PJ»4M) 113M1 mil se`) tri (P147s) OWU iQsM d0 Happy Valley Field 2013 Safety Valve System Test Reports Page 18 Alaska Oil and Gas Conservation Commission Safety Valva System Test Report Operator: Hilcmp StbmittedB}r Sandy, ,kMllan Date: 2,52013 Operate Rep RickNSagrove FieldUritPad: Ham-ValleyAPad AOGCC Rep. Bob Noble Separatorps: LPS 202 HPS WellDda Pilots SSV SSSV Rdesll&[Date WkHType ReuPrasures GasLp Wainer Well Permit Separ Number Number PSI Set UP PSI Trip Test Test Test Code Code Code Date Passed Retest Ou�nAc cn.r, Or Date Sbvnln G;.SCTc1.FSx Inner Outer Tubing YesiVo Yes/No PSI PSI PSI A3 2032220 165 110 P P 212013 GAS 166 No No Date Passed Retest ch4wAG,cw, Or Date Shut In C.ts,eretE,s Inner Outer Tubing PSI PSI PSI Yes1No YesJNo AI 2030720 160 Ito 110 P P GAS 155 No No A2 2031130 160 110 110 Wet2s: 1 Components: 2 Failure 0 Failure Pate: 0.00%%] snot' Remarks: plasia OI and Gas Conserv atfon Commission Safety Valve System Test Rep ort Operator: Hilcorp SibmittedBy. DeanGardner Date 4292013 Operate Rep Steve Tressler FieidUritPad HappyValleyA Pad AOGCC Rep Bob Noble Sepamtorpsi: LPS 160 HPS WeR Data Pilots SSV SSSV RetesVV Date Well Ttpe Weil Pressures Gas Lp Wahw Well Number Permit Number Separ PSI Set PSI UP T rip Test Test Test Code Code Code Date Passed Retest ch4wAG,cw, Or Date Shut In C.ts,eretE,s Inner Outer Tubing PSI PSI PSI Yes1No YesJNo AI 2030720 160 Ito 110 P P GAS 155 No No A2 2031130 160 110 110 P P GAS 153 No No A3 2032220 3/12004 SI IN, No A4 2032230 312004 SI No No A6 2040440 6'12004 SI No No A7 2041060 942004 SI No No AS 2031140 160 110 110 P P GAS 155 No No A9 2041700 160 110 110 P P GAS 160 No No AIO 2041860 160 1t0 110 P P GAS 175 No No At l 2042070 1222010 Sl No No Rails: 5 Components: 10 Failure 0 FalurePas: 0.00%0 -OY Remarks: Page 19 Alaska Oil and Gas Conservation Commission Safety Yah a System Test Rep on Operator:Hdcoip Submitted By.DeanGardner Date: 5292013 Operator Rep: Steve Tressle FieldUnitPad HappgV leyB-Pad AOGCC Rep: Bob Noble Separatorpsi: LPS 162 HPS 770 Wells: 3 Conyoonmts: 6 Fa7uras: FaAareRme: 0.00%0 -ml Remarim HVB-12 in HigbPressore sepaator flat is pipeline pressure (no compression) Alaska Oil and Gas Consent' ation Commission Safety Yah a System Test Rep ort Operator: Ht7corp Submitted By. DeanGardner Date: 10%172013 Operator Rep: Stere Tressler FieldUritPad HappyValleyA-Pad AOGCCRep Ilob Noble Separatorpsi: LPS 139 HPSN'A Wdl Data Phots SSV I SSSV Rdtst/SI Date Weil Type Weil Pressures Gas LP watuer Well Number Permit Number Separ PSI Set UP PSI Trip Test Test Test Code Code Code Date Passed Retest nit wAG,GLyd Or Date Shaun GAS,cvc1P,S Inner Outer Tubing PSI PSI PSI Yes/No Yes/No Al 2030720 139 100 P P GAS 133 No No A2 2031130 139 90 P P GAS 127 No No A3 2032220 312004 SI No No A4 2032230 3.'12004 SI No No A6 2040440 6'12004 SI No No A7 2041060 S'12004 SI No No AS 2041140 139 100 P P GAS 129 No No A9 2041700 139 103 P P GAS 133 N0 No A10 2041560 139 101 P P GAS 145 No No At l 2042070 17222010 SI No No Wills: 5 Componatb: 10 FaAura 0 Failure Rate: 0.00%0 -DW Rematlm Page 20 Alaslm Oil and Gas Conservation Commission Safety Valy a System Test Rep ort Operator:Hdearp StfimittedilycDeanGardner Date 10'17,2013 Operator Rep: Steve Tresster FieldUrit?ad Hapin, alleyB-Pad AOGCC Rep: Bob Noble Separatorpsi: LPS 142 HPS 762 "'#IIS: 4 Contponatw S Falun 0 FariureRate: 0.00% 1] -n-V Remario: Page 21