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Working Nikaitchuq
Hilcorp applies to extend Milne Point Schrader Bluff pool to include unit to west
Kristen Nelson Petroleum News
Hilcorp Alaska, which acquired the Nikaitchuq unit last year, plans to use its success at increasing production from the Schrader Bluff formation at Milne Point as the model for Nikaitchuq. As part of that effort, Hilcorp has applied to the Alaska Oil and Gas Conservation Commission to extend the Milne Point Schrader Bluff oil pool to include the Schrader Bluff pool in Nikaitchuq, allowing for unified operation of Schrader Bluff in the two adjacent units.
AOGCC has tentatively scheduled a public hearing on the matter for April 3 at 10 a.m. at its Anchorage offices; call-in is 907-202-7104 conference ID: 239 074 590#. Written requests that the tentatively scheduled hearing be held are due by 4:30 p.m. March 13. If there are no timely requests filed for a hearing, the commission said it may issue an order without a hearing. To learn if a hearing will be held call 907-793-1223 after March 14.
Expansion applications Hilcorp Alaska filed two applications with the commission Feb. 4, one for expansion of Conservation Order 477a which governs production of the Schrader Bluff oil pool at Milne Point to include the Schrader Bluff oil pool at Nikaitchuq and the second for an expansion of Area Injection Order 10C which governs injection for the Schrader Bluff oil pool at Milne Point to include Schrader Bluff at Nikaitchuq.
Milne Point and Nikaitchuq share a common border -- the western boundary of Milne Point meets the eastern boundary of Nikaitchuq.
Hilcorp said it is requesting an expansion of the existing orders to include some 21,228.6 acres of land within Nikaitchuq. The Nikaitchuq Schrader Bluff oil pool has a conservation order, No. 639, and Hilcorp is requesting that conservation order be superseded in its entirety and CO 477a be amended to include the expansion area.
Hilcorp told the commission that expanding the Milne Point Schrader Bluff oil pool to cover Nikaitchuq, both now operated by Hilcorp, "would allow for further development of the Schrader Bluff reservoir from the Milne Point Raven-Pad into the Nikaitchuq Unit, beginning as soon as April 2025."
"Well data within the proposed Expansion Area shows that the Schrader Bluff is structurally continuous across the Nikaitchuq and Milne Point Units," the company said.
Area injection order In the area injection order application, Hilcorp said the Schrader Bluff oil pool correlates with the interval between 4,174 feet measured depth and 4,800 feet MD in the Conoco MPU Well No. A-1.
Hilcorp has been using polymer injection at Milne Point and proposes to use it at Nikaitchuq, noting that Eni US Operating Co., the previous Nikaitchuq operator, tested polymer injection to enhance waterflood injectivity at Nikaitchuq from October 2019 through December 2022. The results, submitted to the commission in February 2023, showed "successful outcomes in reservoir conformance, injectivity, and enhanced recovery rates," Hilcorp said.
The goal with polymer injection is to increase production and decrease water cut. Hilcorp said results on the two wells Eni tested "showed a positive effect on the oil production rate of the OP12-01 and OP17-02 producer wells and a clear change in the water cut trends," down some 4% in the OP12-01 and flattening of the WC curve in the OP17-02. Hilcorp said the results were encouraging, "especially considering that OP12-01 and OP17-02 were only half supported by a single polymer injection well."
Hilcorp cited its experience with polymer flood at Milne Point, where it began polymer injection in 2018, and said it would "utilize the operational expertise of the Milne Point Unit to effectively implement polymer injection within the Nikaitchuq Unit."
Two proposed Nikaitchuq projects would use polymer injection. An OA sands project would involve drilling extended horizontal injector and producers from R Pad at Milne that would "partially produce and inject into/from the Nikaitchuq Unit," with drilling to begin as soon as April. An N sands project would see three grassroots wells -- two injectors, one producer -- drilled on the Spy Island drill site at Nikaitchuq, with drilling to begin as early as mid-year 2025.
Polymer flood In a Feb. 10 presentation to the Alaska Legislature's House Resources Committee, Jill Fisk, Hilcorp Alaska's Milne Point senior asset team leader, reviewed the company's activities on the North Slope, presented a brief overview of Nikaitchuq and discussed the company's plan for the field.
Fisk explained the value of polymer injection -- the company now has up to 10 active polymer injection skids at Milne Point, she said, injecting up to 60,000 barrels per day, a volume the company expects to grow to some 160,000 bpd within a few years, she said, noting that the Milne Point polymer flood is the eighth largest in the world and the only one on the North Slope.
The polymer flood addresses the problem of water breakthrough, a problem with viscous oil because oil and water have very different viscosities, Fisk said, allowing water to move quickly past the oil, reducing the amount of oil in place that is recovered. The typical recovery rate with waterflood in a viscous field would be 8-10% of oil in place.
Polymer makes the water thicker, more similar to oil, Fisk said, so it moves more uniformly through the reservoir, and increases estimated recoveries to 30-35% of oil in place.
Nikaitchuq plan Hilcorp's presentation shows that Nikaitchuq had first oil in 2011 and has produced some 80 million barrels of oil from the Schrader Bluff formation, with current production of just over 14,000 bpd from the Spy Island drill site and Oliktok Point.
Fisk said Hilcorp's plan for Nikaitchuq is to repair and optimize wells and facilities and reduce operating expense; increase water injection; work toward a polymer pilot in the Oa sand; and prepare for a 2026 drilling program.
Current Nikaitchuq production is from the Oa sand, with none from the shallower N sand, a sand which Hilcorp has been very successful in developing at Milne Point, she said.
And in the Oa sand, where a lot of wells have been drilled at Nikaitchuq, the wells are spaced 1,200 feet apart. At Milne Point, Hilcorp has spaced its wells 400 feet apart, which Fisk said the company has found to be more successful with polymer flood.
She said the company sees a lot of down spacing opportunity in the Oa sand and plans to apply what it has learned at Milne Point in developing the N sands.
Success at Milne Point Hilcorp took over as operator at Milne Point in 2014, acquiring 50% working interest ownership, and acquired the other 50% when it purchased BP Exploration (Alaska)'s assets in 2020.
BP had produced primarily lighter Kuparuk formation oil at Milne Point, and the increase Hilcorp has brought about at the field since 2014 is predominately Schrader Bluff oil, increasing total field production from less than 20,000 bpd to more than 50,000 bpd over 10 years.
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