Amaroq's Nicolai Creek 51st POD approved by state of Alaska
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Kay Cashman Petroleum News
On Nov. 26, G. Scott Pfoff, president of Amaroq Resources, received a certified letter from Derek Nottingham, director of Alaska's Division of Oil and Gas, saying that the Nicolai Creek Unit's 51st plan of development, or POD, has been approved for the period of Dec. 29, 2024, through Dec. 29, 2025. During that time Amaroq commits to drilling up to three wells in the Nicolai Creek unit, an onshore field on the west side of Cook Inlet.
These wells are to target the seismic anomalies identified in the previous POD period.
In its Nov. 26 approval letter the division described the history of the Nicolai Creek unit, or NCU, saying that the NCU commenced natural gas production in 1968. The field was shut in from 1977 until 2001 when production was restarted following Aurora Gas succeeding Union Oil of California as operator and sole working interest owner. After Aurora Gas filed a reorganization plan with the federal bankruptcy court, Aurora Exploration acquired the NCU from Aurora Gas, effective Jan. 1, 2018.
Aurora Exploration later changed its name to Amaroq Resources and became the designated operator of the NCU.
During the period beginning Sept. 1, 2023, through Aug. 31, 2024, the NCU produced a cumulative total of 76,312 thousand cubic feet, mcf, an average of 209 mcf per day. This production represented a 32% decrease from the prior 12-month period, the division said in its unit history.
50th POD During the 50th POD period, Amaroq committed to progressing work to install a booster compressor at the south production facility. The compressor installation would allow additional gas production from wells No. 2 and No. 11, while maintaining production from well No. 9, and was anticipated to occur in the first half of 2024.
Additionally, Amaroq committed to searching for funding and interpretation of newly licensed 3D seismic data focusing on identifying natural gas bearing formations as opposed to the deeper, potentially oil-bearing formations.
Following discussions between Amaroq and the division, the agency imposed the following conditions on the 50th POD:
*Amaroq will commit to the complete preparation of plans for workover of the NCU No. 3 well to restore production by year end 2025; or
*Because Amaroq has identified 1 bcf (billion cubic feet) of proven undeveloped gas reserves in the NCU No. 10 well, Amaroq will commit to conducting a workover or re-drilling of the NCU No. 10 well before the end of 2025.
At the time of a technical meeting with the division on Nov. 14, 2024, Amaroq commenced transportation of the booster compressor to the NCU and anticipates installation of the compressor upon its arrival at the south production facility. Additionally, Amaroq hired Petrotechnical Resources of Alaska, or PRA, to interpret the newly licensed 3D seismic data. PRA identified two shallow seismic anomalies that represent natural gas prospects. When the anomalies are tied to existing well data, they represent proven undeveloped resources and thus are considered exploration rather than exploration targets.
51st POD During the 51st POD period, Amaroq commits to drilling three wells. These wells target the seismic anomalies identified by PRA.
These seismic anomalies represent potentially significantly greater reserves of natural gas than a workover on NCU No. 3 or NCU No. 10 would bring and could result in a superior way to access the proven resources associated with NCU No. 10.
Therefore, Amaroq is requesting that the division replace, or at a minimum defer, the conditions placed on the 50th POD. The division, through analysis of information provided by PRA and discussions with Amaroq agrees and approves the replacement of the conditions. If, however, Amaroq decides to workover the NCU No. 3 or No. 10, then this activity also would satisfy the conditions of the POD, which are set forth in the finding and decision.
Finding and decision When considering a POD, the division must consider the criteria in 11 AAC 83.303(a) and (b).
Accordingly, Nottingham wrote in his decision, the agency "considered the public interest, conservation of natural resources, prevention of economic and physical waste, protection of all interested parties including the state, environmental costs and benefits, geological and engineering characteristics of reservoirs or potential hydrocarbon accumulations, prior exploration activities, plans for exploration or development, economic costs and benefits to the state, and any other relevant factors, including mitigation measures. 11 AAC 83.303(a),(b)."
The division may impose conditions as proposed modifications to a POD under 11 AAC 83.343(b), he said.
"Based upon the foregoing, the Division imposes the following conditions:
"*Amaroq will drill at least one of the three proposed wells during the 51st POD period; or
"*Amaroq will work over NCU #3 or NCU #10, which were previously proposed."
This approval is only for a general plan of development. Specific field operations require separate approval under 11 AAC 83.346, Unit Plan of Operations.
Under 11 AAC 83.343, the 52nd POD is due Sept. 30, 2025, 90 days before the 51st POD expires.
--KAY CASHMAN
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