Cook Inlet Gas Resources & Activity

Transcription

1 Cmmnwealth Nrth February 13, 2015 Ck Inlet Gas Resurces & Activity Paul Decker, Acting Directr Alaska Department f Natural Resurces, Divisin f Oil and Gas Duglas River, Kamishak Bay DGGS pht

2 Outline 1. Overview f Ck Inlet petrleum systems 2. DNR Ck Inlet gas studies Resurces and reserves in existing fields (Hartz and thers, 2009) Cmmercial viability, existing fields (Gibsn and thers, 2011) 3. Recent develpment activity and reserves grwth 4. Recent gas discveries pending develpment 5. Undiscvered gas resurces USGS and BOEM assessments 6. Future Ck Inlet gas demand/interactin with AKLNG 2

3 Outline 1. Overview f Ck Inlet petrleum systems 2. DNR Ck Inlet gas studies Resurces and reserves in existing fields (Hartz and thers, 2009) Cmmercial viability, existing fields (Gibsn and thers, 2011) 3. Recent develpment activity and reserves grwth 4. Recent gas discveries pending develpment 5. Undiscvered gas resurces USGS and BOEM assessments 6. Future Ck Inlet gas demand/interactin with AKLNG 3

4 Upper Tertiary gas reservirs, Lwer Tertiary il reservirs 4

5 Base Tertiary Uncnfrmity structure Cal-surced bigenic gas in Sterling, Beluga, and Tynek Fms. A A Thermgenic il frm Jurassic surce in Hemlck and lwer Tynek Frmatins. Mst large structures have been drilled. Shellenbaum and thers, 2010 (DNR) Smaller structural traps and perhaps numerus stratigraphic traps remain t be discvered. 5

6 Tertiary bigenic gas; Meszic-surced thermgenic il A Trading Bay field McArthur River field Middle Grund Shal field Bacterial gas frm cals Swansn River field A Middle Jurassic Tuxedni surce rcks at il windw maturity 6

7 Outline 1. Overview f Ck Inlet petrleum systems 2. DNR Ck Inlet gas studies Resurces and reserves in existing fields (Hartz and thers, 2009) Cmmercial viability, existing fields (Gibsn and thers, 2011) 3. Recent develpment activity and reserves grwth 4. Recent gas discveries pending develpment 5. Undiscvered gas resurces USGS and BOEM assessments 6. Future Ck Inlet gas demand/interactin with AKLNG 7

8 Hartz and thers, 2009 (DNR study) Decline Curve and Material Balance reserves generated fr all 28 existing prducing gas fields. Gelgic vlumetrics prepared fr 4 f the 5 largest gas fields: Beluga River Nrth Ck Inlet Trading Bay/McArthur River Grayling gas sands Ninilchik (nt including nrthern area due t data limitatins at the time) These appraches identify 4 resurce categries crrespnding t certainty f prductin Ptential upside: Gelgic vlumetrics in additinal fields Undevelped leads w/ wells (green dts) Undiscvered gas in undrilled prspects, excluded frm this study 8

9 Hartz and thers, 2009 (DNR study) Decline Curve Analysis: Extraplates recent trends f prductin decline int the future Desn t accurately frecast ultimate field size until the field has been fully develped New wells r ther investments ften increase frecast reserves Underestimates reserves where prductin is limited by demand rather than reservir capacity Material Balance Analysis: Uses change in reservir pressure ver time t estimate hw much gas is cntained in the parts f the reservir that are in pressure cmmunicatin with existing wells. Often indicates mre prducible gas than evident frm Decline Curve analysis alne 9

10 Determine gas pay thickness frm well lgs Hartz and thers, 2009 (DNR study) Perfrated Cmpletin intervals 10

11 Map reservir gas pay thickness Calculate Bulk Reservir Vlume frm thickness map Sterling B Zne, Beluga River Field Calculate Original Gas-in-place (knwing several ther variables) Remaining Reserves (= Original Gas-in-place minus cumulative prductin) Hartz and thers, 2009 (DNR study) 11

12 Hartz and thers, 2009 (DNR study) Hypthetical prductin frecast fr the Ck Inlet basin shwing increments f reserves and resurces identified by engineering and gelgical analyses in 2009 DNR Ck Inlet gas study. Nte that the prductin thrugh 2010 was affected by the additinal market demand f the LNG and Agrium plants, whereas initial frecast assumed nly lcal utility market demand.

13 Hartz and thers, 2009 (DNR study) 2009 Study Findings: Engineering and gelgic analysis identified and quantified substantial vlumes f prducible gas that remain t be tapped in knwn Ck Inlet fields. Prved + Prbable reserves estimated at 1.14 TCF. Varius gas vlume tranches are defined by different technical methds, and have crrespndingly different levels f prductin certainty. These remaining gas vlumes culd be sufficient t meet demand thrugh 2018 r beynd. Prducing this gas will require extensive investment in infill & extensin drilling and field redevelpment. 14

14 Gibsn and thers, 2011 (DNR) Questin: What investment and assciated prducer revenue wuld be required t generate specific rates f return frm develping DNR-identified gas reserves (2009 study) t meet existing demand requirements f 90 BCF per year? Apprach: Describe & quantify dzens f detailed cnceptual develpment scenaris Lw-side, base case, high side Reserves, prductin streams, drilling, facilities Develp cst estimates and schedules Wells, wrkvers, cmpressin additins, facilities Apply study basis Assumptins, cnstraints, risks Mnte Carl simulatins and cmmercial analysis 15

15 Gibsn and thers, 2011 (DNR) 2009 Study Findings: The Ck Inlet s existing prducing fields are capable -- given sufficient cntinued investments -- f supplying the reginal natural gas needs until timeframe. Explratin success wuld extend the timeframe further ut int the future. At current and reasnably freseeable prices, many prjects t prduce this gas appear t yield attractive internal rates f return. Natural gas strage will play an increasingly imprtant rle in managing deliverability and ecnmics f the natural gas supply fr suth-central Alaska. 16

16 Legislative briefings n Ck Inlet gas ~ 1.1 TCF estimated remaining reserves in 28 fields ~ 355 BCF in undevelped gas resurces in 3 primary fields Beluga River Unit (233 BCF) TBU Grayling Gas Sands (72 BCF) Nrth Ck Inlet Unit (50 BCF)

17 Outline 1. Overview f Ck Inlet petrleum systems 2. DNR Ck Inlet gas studies Resurces and reserves in existing fields (Hartz and thers, 2009) Cmmercial viability, existing fields (Gibsn and thers, 2011) 3. Recent develpment activity and reserves grwth 4. Recent gas discveries pending develpment 5. Undiscvered gas resurces USGS and BOEM assessments 6. Future Ck Inlet gas demand/interactin with AKLNG 18

18 Since release f DNR gas study, December 2009 Hilcrp acquisitin f Marathn, Chevrn/Uncal assets has transfrmed gas develpment, prductin, utility cntracts Expanded gas strage (CINGSA) helping t stabilize prductin 75 new O&G explratin and develpment wells drilled 22 Explratin, 53 Develpment 36 cmpleted as gas wells (avg = 7.2 new gas wells per year) 23 cmpleted as il wells, 11 suspended, 5 P&A d Kenai Lp gas field discvered June 2011 Sustained prductin began January BCF Original Gas In Place 2 prducing gas wells > 20% f OGIP prduced as f mid

19 Since release f DNR gas study, December 2009 Recent gas reserve additins, allcated t prject type: 3% prductin enhancement, well wrkvers 50% cmpressin additins, etc. 25% new cmpletins f high prbability pay intervals 22% new cmpletins f ptential pay intervals Nvember 2014 DNR decline analysis f the 7 largest fields shws 440+ BCF increase in Estimated Ultimate Recvery (EUR) cmpared t 2009 figures. Sme fields are larger than previusly estimated by DNR, thers are smaller. At Ninilchik Unit, Falls Creek PA and Beluga Fm reserves were nt yet n prductin, and were nt included in 2009 vlumetric analyses; new drilling extends prducing area & depth, increasing EUR by 97 BCF (58% increase). 20

20 Outline 1. Overview f Ck Inlet petrleum systems 2. DNR Ck Inlet gas studies Resurces and reserves in existing fields (Hartz and thers, 2009) Cmmercial viability, existing fields (Gibsn and thers, 2011) 3. Recent develpment activity and reserves grwth 4. Recent gas discveries pending develpment 5. Undiscvered gas resurces USGS and BOEM assessments 6. Future Ck Inlet gas demand/interactin with AKLNG 21

21 Kitchen Lights gas discvery, 2011 Operatr: Escpeta Furie Discvery Well: KLU #1; drilled n Crsair blck using Spartan 151 jack-up rig Gas Reservirs: Sterling and Beluga Frmatins Tests: KLU #3 delineatin well, 2013 Evaluated 29 hrizns 3,732-7,622 MD 6 flw tests, 23 MDTs Reserve Estimates: Initially annunced 3.5 TCF discvery Reduced reserves estimate by 80% t 750 BCF Cnfidential 3 rd party reserve estimates Develpment Plans: Offshre gas develpment 1 small mnpd, t be set in 2015, up t 6 wells Expected prductin f 30 BCF/yr = 80 MMCF/D

22 Csmplitan gas discvery, 2013 Operatr: Buccaneer Blue Crest Discvery Well: Csmplitan State #1; vertical hle drilled frm KOV Endeavr jack-up rig; higher n structure than previus wells Gas Reservir: Tynek Frmatin Tests: Flw tested gas in 2 f up t 18 znes 4,300 MD: 7.3 MMCF/D n chke, 16 MMCF/D AOFP 5,500 MD: 7.2 MMCF/D n chke, 9.4 MMCF/D AOFP Reserve Estimates: Cnfidential Develpment Plans: Phase 1 il develpment frm nshre, up t 33 wells Future gas develpment ffshre 2 small mnpds, up t 12 wells Expected prductin f 22 BCF/yr (unknwn duratin) 23

23 Outline 1. Overview f Ck Inlet petrleum systems 2. DNR Ck Inlet gas studies Resurces and reserves in existing fields (Hartz and thers, 2009) Cmmercial viability, existing fields (Gibsn and thers, 2011) 3. Recent develpment activity and reserves grwth 4. Recent gas discveries pending develpment 5. Undiscvered gas resurces USGS and BOEM assessments 6. Future Ck Inlet gas demand/interactin with AKLNG 24

24 USGS resurce assessment, 2011 Undiscvered, Technically Recverable Oil and Gas Nte: 1.2 TCF additinal mean resurce assessed in OCS waters (BOEM, 2011) 25

25 Outline 1. Overview f Ck Inlet petrleum systems 2. DNR Ck Inlet gas studies Resurces and reserves in existing fields (Hartz and thers, 2009) Cmmercial viability, existing fields (Gibsn and thers, 2011) 3. Recent develpment activity and reserves grwth 4. Recent gas discveries pending develpment 5. Undiscvered gas resurces USGS and BOEM assessments 6. Future Ck Inlet gas demand/interactin with AKLNG 26

26 Interactin with AKLNG? Several ndes f prpsed future demand: Which can/shuld Ck Inlet gas supply when AKLNG is nline? Status qu utility use Agrium plant restart CncPhillips legacy LNG exprt REI LNG exprt WestPac Interir LNG Dnlin Gld Others? Ttal ~ 90 BCF/yr < 55 BCF/yr < 88 BCF/yr 49 BCF/yr 8 BCF/yr 27 BCF/yr 273 BCF/yr

27 DNR wrk n Ck Inlet gas indicates significant additinal ptential t be ecnmically pursued in existing fields, nt t mentin undiscvered resurces assessed by USGS Recent resurgence in industry investment and activity bth redevelpment and explratin bdes well fr lcal gas supplies and ecnmic develpment in the mid-term Lng-term big picture still cming int fcus: Numerus ptential ndes f future demand; majr explratin investment and success wuld be needed fr Ck Inlet t supply them all Interactin with AKLNG prject Need t strike a balance between the benefits f bringing in Nrth Slpe gas and value f cntinued investment in full develpment f remaining Ck Inlet gas

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