BCC state this Kenai Loop #1 well has a 70% chance of being commercial. Perhaps that will prove correct? However, when will commerciality be definitive? One month? 3 months? 6 months?
If holders think they are going to get a sustainable 3MMCFD within even one month after total depth is reached, they are in dream land.
The geology is complex. Just like Lee County is complex.
http://www.dggs.alaska.gov/webpubs/usgs/of...81-0615pt08.PDF
http://www.dggs.alaska.gov/webpubs/usgs/of...81-0615pt11.PDF
Beluga Formation: The Beluga Formation reservoirs vary in depth from approximately 3,070' TVD to 5,800' TVD. Porosity ranges from 10-18%. The reservoir pressure varies from a 0.44 to a 0.46 psi/ft gradient. Obtaining measurable gas flow from the Beluga Formation has required multiple intervals to be open simultaneously. Nodal analysis has been used to estimate reservoir quality in the 0.05-0.5 millidarcy (md) range for the Beluga Formation. Intervals exist that have a lower permeability but intervals have not been encountered where a higher permeability has been calculated.
It is generally accepted that the
Beluga Formation reservoirs have high clay content. Based on the reservoir quality of this rock, liquid flow is inefficient at best. Water production has not been observed and it is expected that a wet interval will produce as an unconsolidated sand-providing fill into the tubing.
Tyonek Formation: The Tyonek Formation reservoirs vary in depth from approximately 5,800' TVD to 10,108' TVD. The reservoir pressure has an approximate 0.44 psi/ft gradient. Porosity ranges from 10-18%.
The lowest relative permeability to gas measured with gas flow has been 0.025 md while the highest relative permeability to gas measured has been 1.8 md. The majority of the Tyonek Formation reservoirs encountered have permeabilities less than 1.0 md.
It is generally accepted that the Tyonek Formation reservoirs have a high clay content including mobile clays. Consequently, intervals deemed wet have been done so based on a fluid level rise over an extended period of time. Based on the reservoir quality of this rock liquid flow is inefficient at best.
"The middle and lower Beluga sands in the Kenai Gas Field are a normally-pressured 1,700' (520M) section characterized by stacked pay with highly variable pay quality. These fluvial sandstones are 5 to 30 foot (1.5M - 9M) thick. Permeability ranges from 0.01 to 3 millidarcies. Mineralogy is complex, including a high percentage of clays, volcanics, coals, and fines as described in Table 1. The framework grains for the Beluga sandstones are metamorphic rock fragments. The sandstones are bounded by discontinuous shale, siltstone, and coal beds."
Note the permeability readings. 0.01 to 3 millidarcies is terrible. This is complex geology and I doubt we will have any answer as to sustainable flow rates for months.
http://www.akrdc.org/membership/events/spe...s/prareport.PDF
"
Challenges facing Cook Inlet gas business
- Formation damage due to sensitive clay cements
- Drilling and seismic costs are very high
- Fines migration and unconsolidated sands cause production problems in
some reservoirs
- Gas is difficult to identify on wire line logs (difficult petrophysical
analysis) Rwa & Sw varies throughout the stratigraphic section.
- Low resistivity pay can be overlooked or by-passed. Careful
petrophysical analysis and re-examination of mud logs and wire line logs
can identify such missed pay.
- Tight gas sands can be overlooked on the initial drilling.
- Sands are discontinuous and disconnected (especially Beluga & some
Tyonek). Pay can be mis-characterized without additional infill drilling,
especially in Beluga reservoirs.
- Correlations are difficult.
- Structures are difficult to image seismically due to steep dips.
- Coal beds in the Sterling, Beluga and upper Tyonek form prominent
reflectors on seismic data, absorbing seismic energy, and causing poor
imaging of the deeper formations with the only prominent deep reflector
often being the unconformity at the Tertiary/Mesozoic boundary.
- 3D seismic improves interpretation of structural complexity significantly
over 2-D data.
- Dominance of coals and poorly consolidated sands cause drilling
problems."
Now you know why Chevron have decided it's not worth it and are exiting the Cook Inlet. Sure, the smaller spoils may be there for smaller companies like BCC but I am predicting another Lee County. Highly promising gas shows, even initial flow rates but then?.......... problems.
I'll sell and then re-enter after the debacle unfolds over the next six months and then await the one offshore well I am bullish on. The Pan Am step out. Who knows how cheap I'll get BCC stock? Time will tell.