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Home My WebLink About2014 Deep Creek UnitHilcorp Alaska, LLC June 29, 2015 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, 2014 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 IU1. 0 1 201`-, CC 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 11th Annual Reservoir Review and corresponds to events during the 2014 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 2014 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 11th POD period. a. HVB-12 — Perforations were added to two sands in the Middle and Upper Tyonek without any change in the performance of the well. b. HVB-14 — A 2-3/8" velocity string was run in this Sterling completion to keep it unloaded once water hit. C. HVB-15 — A PLT was run to try and determine which zone was wet and a plug was later set to isolate the lower most Upper Beluga sands. The water was successfully shut off and the gas rate was unaffected. Exploration / Seismic: During 2014, the PSDM data was received and interpretation of the data began. Working maps are expected to be generated by Q3 of 2015 to finalize the MHV well location for a Q4 2015 or Q12016 exploration drill well. As of December 31, 2014, the cumulative production from the Happy Valley field was 27,898,954 Mcf of gas and 171,201 Bbl of water. Eight (8) Happy Valley wells produced during 2014. As of late December 2014, well test rates were as follows: a. HVA -01— Lower Tyonek Producer. Current rate = 0.55 MMcf/d & 1 BWPD, at 128 psig FTP. b. HVA -02 — Lower Tyonek Producer. Current rate = 0.30 MMcf/d & 1 BWPD, at 128 psig FTP. c. HVA -08 — Beluga and Upper Tyonek Producer. Current rate = 0.37 MMcf/d & 1 BWPD, at 128 psig FTP. d. HVA -09 — Upper Tyonek Producer. Current rate = 0.61 MMcf/d & 1 BWPD, at 130 psig FTP. e. HVA -10 — Upper Tyonek Producer. Current rate = 1.33 MMcf/d & 0 BWPD, at 137 psig FTP. f. HVB-12 — Upper Tyonek Producer. Current rate = 0.76 MMcf/d & 1 BWPD, at 819 psig FTP. g. HVB-14 — Sterling Producer. Current rate = 0.57 MMcf/d & 268 BWPD, at 59 psig FTP. h. HVB-15 — Upper Beluga Producer. Current rate = 2.56 MMcf/d & 0 BWPD, at 68 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. No static downhole reservoir data was gathered during 2014. Cumulative Production As previously stated, the cumulative production from the Happy Valley PA was 27,898,954 Mcf of gas and 171,201 Bbl of water through December 31St, 2014. The cumulative produced gas volumes, sub- divided by well and formation (through 12/31/2014) are as follows: Page 2 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 1.66 BCF gas and 107,847 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 2.29 BCF gas and 11,570 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 2014, the cumulative production from the Beluga is 0.62 BCF gas and 9,304 BW. Potential Beluga pay exists in the HVA -09, HVA -10, HVB-12, and HVB-13 wells and will be added as reservoir management allows. Additional offset locations may exist for future development from the B Pad. Upper Tyonek — 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 16.39 BCF gas and 30,712 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 -B12 wells Page 3 Happy Valley Tract Happy Valley PA Sterling Upper Beluga Beluga Upper Tyonek lower Tyonek HVA -01 4,689,385 HVA -02 1,154,408 HVA -03 10,916 HVA -08 576,121 1,728,363 HVA -09 4,275,694 HVA -10 9,161,596 HVA -11 0 135,554 0 HVB-12 623,740 913,757 HVB-13 44,774 450,925 HVB-14 1,660,518 HVB-15 2,289,418 Cum Gas Volume (MCF) 1 1,660,5181 2,289,4181 620,8951 16,386,788 1 6,757,550 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 1.66 BCF gas and 107,847 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 2.29 BCF gas and 11,570 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 2014, the cumulative production from the Beluga is 0.62 BCF gas and 9,304 BW. Potential Beluga pay exists in the HVA -09, HVA -10, HVB-12, and HVB-13 wells and will be added as reservoir management allows. Additional offset locations may exist for future development from the B Pad. Upper Tyonek — 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 16.39 BCF gas and 30,712 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 -B12 wells Page 3 and will be added as reservoir management allows. Additional offset locations may exist for future development from the B Pad. Lower Tyonek — The Lower Tyonek formation is currently open in the HVA -01, HVA -02, and HVB-12 wellbores. The cumulative production from the Lower Tyonek is 6.76 BCF gas and 12,094 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 1-2 unit development/exploration wells during the 12th POD period to maximize gas recovery.' The following drilling operations (not limited thereto) are being considered during the 2015 calendar year: a. Drilla 9,000' development drill well (HVB-17) targeting the Sterling, Beluga, and Tyonek formations on the western side of the structure. This well will be drilled from the B Pad. b. 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. If successful, Hilcorp's exploratory drilling program will require expansion of the Deep Creek 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 2015 calendar year to optimize production from the Deep Creek Unit.Z Possible well workovers may include, but are not limited to: a. Additional stim tube or acid treatments to wells with perforations that show indications of high skin damage. b. Adding additional perforations to existing completions and/or recompleting wells into shallower horizons. c. Installing capillary tubing or velocity strings in existing wellbores, to help unload liquid production. 2. Exploration / Seismic: Interpretation of the 3D data is in progress as of June 2015 and will be used to establish the Deep Creek Unit's exploratory and development drilling program throughout the 2015 calendar year and beyond. 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 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 17th, October 29th, and October 30th 2014. These tests were witnessed by Jeff Turkington and Bob Noble from the AOGCC. The HV wells are currently operating with approved tests on all SSV's. The SSV test results for 2014 are attached in Appendix B. Sincerely, eff Allen Page 5 APPENDIX A Happy Valley Field Well Production Plots Page 6 to+ to I HVA -01 On sve :10N1ROW acWaerryo"k 0 HVA -02 �:.., on St--i1*1 rim B"lQWryomk u' Page 7 On Stream: 0IM12013 HVA43 4,, HVA -W On sue-1010U20B/ ci m Page 8 f u 0 HVA -O9 16 On Strum: ilolrA01 BekgklTyonek t. HVA -10 On Street 1119U2001 Be1ugaff j nek Page 9 HVA -11 + . on Stream: 12 rot1N106 Belug&Tyonek If HVB-12 Bekg.gy k 1� Page 10 tw tw On Weam:04:01/2M 10` 1a tw HVB-13 BekggaRyo k 10+ HVB-14 On stream: mw1Y1012 S7,41LOG 10 i + I i I i tw I 1w i 103 lep I go 1w .I 1.0 - 1.0 —____ _—_ -- 01 02 03 04 06 06 07 - 08 09 10 11 12 O1 02 , 03 04 06 00 07 08 09 f0 11 /2 01 X02 02 01 05 06 07 OB 09 10 11 12 2012 2013 2014 Page 11 cx U-1' 2640 2400 2200 ,200 1000 2008 2009 2010 2011 HVB-14 On stream: mw1Y1012 S7,41LOG 10 i + I i I i tw I 1w i 103 lep I go 1w .I 1.0 - 1.0 —____ _—_ -- 01 02 03 04 06 06 07 - 08 09 10 11 12 O1 02 , 03 04 06 00 07 08 09 f0 11 /2 01 X02 02 01 05 06 07 OB 09 10 11 12 2012 2013 2014 Page 11 cx U-1' 2640 2400 2200 ,200 1000 to, to, ,o 3 00 0 0' 102 ,.0 Page 12 HVB-15 L On Stream: 10,262012 UDVer Beluga ISS 112186 � zoo6 1880 r rr 16oe ,o 1 1100 9 1200 to ,000 eo0 to, I /► 1 am 100 200 ( 0, 02 07 01 OS 06 07 06 09 10 11 12 01 ''02 03 01 06 06 07 06 09 10 11 12 01 02 03 01 06 06 07 06 69 16 1! tI (y, 1 2012 2013 2014 APPENDIX B Happy Valley Field 2014 Safety Valve System Test Reports Page 13 Alaska Oil and Gas Comes ation Commission Safety Mahe System Test Report Opemtor: llikorp _ Submitted By Rick Musgrow pate: 4: 17.2014 Operator Rep: Jason Yantmn Field UnitPad: Happy Vallev AOGCC Rep: Jeff Turkington Separator psi- LPS 122 HIPS wra Dam ��'ell Pertdt \umber Number -pat psi PAps SetIJP PSI Trt Test Cale SSV SM Test Test Code Cade Rade tslOak Well ijpe Date Passed Retest On. N'.iG GW, Or Date Shut in GAS"cLLst well Prunng" rMl* wAiVw faster Outer Tubing Yes/No NWNo PSI PSI PSI A -0I 2030720 122 90 8 P - P GAS 123 A-02 2031130 122 RO P P cAs 122 A-03 2032220 Oct 2013 SI 3H;20(ki SI is AlM 2032230 p GAS 63 B-)5 2121320 55 31;2 SI P Adki 2040340 &16 2121330 6'112061 SI Jan 2013,S] A-07 2041060 1 8.'1,2061 SI A-08 2041140 122 100 100 P P GAS A-09 2041700 irl 901 90 P P GAS 1'S A-10 2041860 1221 1001 99 P I P GAS 135 A -II 20x2070 1!21201 SI owls: 5 Composenrs: 10 F■ilures: 0 Failure (Pate: 0 W ❑ eomr Remarks: Alaska 00 sad Gas Conservation Comodesfon Safeh� valve System Ten Report Opemtor: Nikorp Submitted By: Rick Mmgrove Date 417,2014 Operator Rcp: Jason Yeoman Field'Unitfad: Happy Vallev AOWC Rep: JelTTurkinuton Separator rw LPS 55 "PS 750 RCNDrme I Puors Mvisssyl RtOasVS BNE Well ijpe I waffAwsspllesGnL¢f RdNer "Ven Persalt Separ Set UP Ten Test Test Date Passed Retest 04w.iG.q.W Ismer Outer Tubing YesiNo YeVNo Number Number PSI PSI T Code Code Cade Or Date Shut In G.%s, cALt.t'; n PSI PSI P51 8-12 2071230 750 _ d50 444 P P GAS 757 �— B-1i 2071510 Oct 2013 SI &14 2120540 is 35 34 P p GAS 63 B-)5 2121320 55 30 2R P P GAS 73 &16 2121330 Jan 2013,S] Rd/Js: 3 Componeah: 6 Failures: 0 Failure Rats 0.ON ❑ eoow Remarks: Page 14 Alaska OB and Gas Conservation Commission safety %-a1Ye System Test Report Operator: Hihorp Submitted By: Jason Yeoman Date 10292011 Operator Rep-. Jason Yeoman Field'UnitiPad: Happy Valley AOGCC Rep: Bob Moble Separator psi: LPS 109 lips— Went Awe P$ WentAwe I Mob SSV STTV RdESOMDa11r WeNrAw wempr�rres GULP Watfter ISSYISSSVI RetatwDaile Wd/ Type wet PrMillyrs 6- Lo Watwn %Yell Persalt Separl Set LIP I Test Test Test Date Passed Retest to WAC civ, Inner Outer Tubing Y'esMo YesrlNo Number Number PSI PSI TrI Code Code Code Or Date Shut In GASB C%Y'LE, Sl PSI PSI P51 BIS 2121320 44 A-01 2030720 109 80 R P 4 GAS A-02 2031130 109 80 R2 P P GAS 113 NO NO .A-03 2032220 -2032-130,---t--i3,%12004 3'1'2003 SI 112 NO NO A -it -1 SI .A06 20404106,112 SI A-07 2041060 R'12004 SI A -0R 2011140 109 RO R P P GAS A-09 2041700 109 80 81 P P GAS 111 NO NO .A-10 2041860 109 RO 82 P P G.AS 113 NO NO -A-11 _'042070 1,'22,2010 St 124 NO NO HWIS: _ 5 Camponewfs: 10 Faihrrcs: I Faiwre Rate: t0.D0C 900y Remarks: Alaska Oa and Gas Conserysoon Commission Safety Valve System Test Report Operator: Hikap Submitted By: Jason Yeoman Date: 10,29.,2014 Operator Rep: Jason Yeons FieldUnit/Pad: Happy Valley AOGC:C R p Bob Noble Separator psi- LPS 44 "PS- 786 WlRDtllta I Pilau SSV STTV RdESOMDa11r WeNrAw wempr�rres GULP Watfter Well Permit Set IJP Test Test Test Date Passed Retest W..{c cl, Inner Outer Tubing Ves/No VeV No Number Number PSI P51 TripCode Code Code Or Date Shut In G%,l CACL&SI PSI PSI PSI &12 2071230 786 450 P P GAS 8-13 2071510 791 -W2013 SI 8-14 2120 -VO 44 35 P P GAS 50 BIS 2121320 44 35 34 P P GAS 8-16 X121330 95 tan 2013 SI Wens: 3 fompauemts: 6 Failures: 0 Fai/an Rate: 0.0094 (7 so oy Remarks: Page 15 ,Uasks OHI and Gas Conservation Commission Safety Valve System Test Report Operator: Hiltorp Submitted By: Jason Yeoman Date: 10302014 Operator Rep: Undmy Griffin Field'UnitPad: Happy Vallev AOGCC Rep: Bob Noble Separator psi LPS 113 "PS Well Data I miSepor \yell ;10 Number PSI A-01 2030720 113 A-02 203113D p0oft ISSVISSSVIReMO Set IJP Test Test Test PSI T Code Code Code 80 BO p P S/D de Well Type WeU presswes Gas L}<Jl Wath - Date Passed Retest lane 1711, WAG. GINA r Outer Tubing Yes/No Yes/NoNnmber Or Dale Shut In GAS, C\CLE, SI PSl P5t PSI GAS 113 NO NO A-03 2032220 .A4W _ 2032230 A-06 2040440 A-07 2041060 A-08 2041140 A-09 2041700 A -w 2041860 ;\-II '042070 _rM W dts: 1 Components: 2 Failures: 0 Failure Rate: 0.00°k ❑ sa ar Remarks: Page 16