Cook Inlet Natural Gas Reserves Study

Islin Munisteri, EITJohn Burdick, Jack Hartz PE

State of Alaska, Department of Natural Resources Division of Oil and GasDecember 10, 2015

Society of Petroleum Engineers / Alaska Geological Society / Geophysical Society of Alaska Joint Meeting

Overview

• Geological Setting of Cook Inlet• Historical Trends• Assumptions

– Decline analysis– Material balance

• Discussion

2

Stratigraphic Column

3

Cook Inlet Basin• Coal-sourced biogenic gas in

Sterling, Beluga, and Tyonek

• Thermogenic oil from Jurassic source in Hemlock and lower Tyonek Formations

• Most large structures have been drilled

• Smaller structural traps and perhaps numerous stratigraphic traps remain to be discovered

• Inaccessible lands

• Map shows base of Tertiary structure

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Shellenbaum and others, 2010 (DNR)

A’

A

5

Middle Jurassic Tuxedni source rocks at oil window maturity

A’A

Bacterial gas from coals

Cook Inlet Petroleum Systems

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Lewis River Unit

Stump Lake UnitIvan River Unit

Otter UnitPretty Creek Unit/ Gas Storage

Beluga River Unit

North Cook Inlet Unit

Lone Creek Unit

Three Mile Creek

Moquawkie Unit

Nicolai Creek Unit

Kitchen Lights Unit

Granite Point Unit

McArthur River

West McArthurRiver Unit

Redoubt Unit

MiddleGroundShoal

Birch Hill Unit

Swanson River Unit / Kenai Gas Storage 1,3

Beaver CreekUnit

Wolf Lake

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West Fork Field

Sterling Unit

Cannery Loop/CINGSA

Kenai Unit / Pool 6 Storage

Kasilof Unit

Ninilchik Unit

Deep Creek Unit

Nikolaevsk Unit

North ForkUnit

Gas Field Startups: Includes Production Tests

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Average age of fields = 30 years

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Petroleum Resources Management System

11PRMS resources classifications, as adapted from SPE et al., 2011.

Petroleum Resources Management System

12PRMS resources classifications, as adapted from SPE et al., 2011.

Breakdown of Reserves for Cook Inlet Study

• Proved Reserves (1P) = Well-Level Decline Curve Analysis for Gas + Pool-Level Decline Curve Analysis for Associated Gas

13

Petroleum Resources Management System

14PRMS resources classifications, as adapted from SPE et al., 2011.

Breakdown of Reserves for Cook Inlet Study

• Probable Reserves =Upside Well Level Decline Curve Analysis for Gas+ Material Balance

15

Petroleum Resources Management System

16PRMS resources classifications, as adapted from SPE et al., 2011.

Breakdown of Reserves for Cook Inlet Study

• Proved Reserves (1P) = Well-Level Declines for Gas + Pool-Level Decline for Associated Gas

• Probable Reserves =Upside Well Level Declines for Gas + Material Balance

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+

= 2P (Proved + Probable) Reserves

Decline Analysis: North Cook Inlet

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Material Balance: North Cook Inlet

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Decline Curve Analysis (Exponential)

• Decline = [ ln (Qi / Q) ] / t• Remaining Reserves as of 9/30/2015 onwards =

[ ( Qi – Qf ) / Decline ] *f

• T = time, months• Decline = nominal decline, gas rate / month• Qi = initial gas rate, mcfd• Qf = final gas rate = 50 mcfd

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Decline = [ ln (Qi / Q) ] / t= [ln (2000 mcfd/900 mcfd) / 4.3 years= 0.185/year

RR = [ ( Qi – Qf ) / Decline ] *f= [900 mcfd – 50 mcfd)/0.185] *365= 1,677,027 mcf= 1.6 bcf

CUM = 5.3 bcf

EUR = CUM + RR= 5.3 + 1.6= 6.9 bcf

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Solution

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25

2P Reserves

ProbableReserves

8308

681

30

711

101

371472

1183

7600

7800

8000

8200

8400

8600

8800

9000

9200

9400

9600

CumulativeProduced

Base CaseDecline Analysis

(Gas Pools)

Associated Gas(Oil Pools)

Total Proved(1P) (MaintainExisting Wells)

Upside CaseDecline Analysis(Mitigate Well

Problems)

Material Balance(Add

Compressionetc.)

Total Probable(Additional

Investment)

Total Proved +Probable

Remaining (2P)

Gas

Pro

duce

d an

d R

emai

ning

, BC

F

Remaining Reserves in the Cook Inlet Basin

1P 2P

1PProved

Reserves

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27

28

0

50

100

150

200

250

300

350

Nor

th C

ook

Inle

t

Belu

ga R

iver

Kena

i

Nin

ilchi

k

McA

rthu

r Ri

ver

Trad

ing

Bay

Nor

th F

ork

Kena

i C.L

.U.

Kena

i Loo

p

Beav

er C

reek

Mid

dle

Gro

und

Shoa

l

Swan

son

Riv

er

Gra

nite

Poi

nt

Lew

is R

iver

Lone

Cre

ek

Ivan

Riv

er

Pret

ty C

reek

Stum

p La

ke

Dee

p Cr

eek

Moq

uaw

kie

Nic

olai

Cre

ek

Ster

ling

Kasi

lof

Red

oubt

Sho

al

Wes

t Fo

rk

Wes

t Fo

rela

nd

Wol

f La

ke

Thre

e M

ile C

reek

Nik

olae

vsk

Wes

t M

cArt

hur

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r

Kust

atan

Albe

rt K

aloa

Han

sen

Birc

h H

ill

Rem

aini

ng R

eser

ves,

BC

F

Remaining Reserves - All Cook Inlet Fields

Base Case Decline Analysis Upside Case Decline Analysis Material Balance Associated Gas

29

0

10

20

30

40

50

60

70

80

McA

rthu

r Ri

ver

Trad

ing

Bay

Nor

th F

ork

Kena

i C.L

.U.

Kena

i Loo

pBe

aver

Cre

ekM

iddl

e G

roun

d Sh

oal

Swan

son

Riv

erG

rani

te P

oint

Lew

is R

iver

Lone

Cre

ekIv

an R

iver

Pret

ty C

reek

Stum

p La

keD

eep

Cree

kM

oqua

wki

eN

icol

ai C

reek

Ster

ling

Kasi

lof

Red

oubt

Sho

alW

est

Fork

Wes

t Fo

rela

ndW

olf

Lake

Thre

e M

ile C

reek

Nik

olae

vsk

Wes

t M

cArt

hur

Rive

rKu

stat

anAl

bert

Kal

oaH

anse

nBi

rch

Hill

Rem

aini

ng R

eser

ves,

BC

F

Remaining Reserves - Cook Inlet Fields < 100 BCF Reserves

Base Case Decline Analysis Upside Case Decline Analysis Material Balance Associated Gas

30

2P Reserves

ProbableReserves

8308

681

30

711

101

371472

1183

7600

7800

8000

8200

8400

8600

8800

9000

9200

9400

9600

CumulativeProduced

Base CaseDecline Analysis

(Gas Pools)

Associated Gas(Oil Pools)

Total Proved(1P) (MaintainExisting Wells)

Upside CaseDecline Analysis(Mitigate Well

Problems)

Material Balance(Add

Compressionetc.)

Total Probable(Additional

Investment)

Total Proved +Probable

Remaining (2P)

Gas

Pro

duce

d an

d R

emai

ning

, BC

F

Remaining Reserves in the Cook Inlet Basin

1P 2P

1PProved

Reserves

Thank you!

• John Burdick• Jack Hartz (retired)• Paul Decker• Laura Gregersen• Becca Hulme• Family

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P/z

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Pipelines

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