Elk Hills ready for new horizontal drilling chapter

Horizontal Wells Completed in Elk Hills Field [26,244 bytes]

The first chapter of horizontal drilling at supergiant Elk Hills oil and gas field ended in May with impending sale of the U.S. Department of Energy's 78% interest in the field.

Occidental Petroleum Corp., the high bidder, has already expressed interest in a second chapter (OGJ, Oct. 13, 1997, p. 35).

Nine years ago, co-owners of the field, DOE 78% and Chevron USA Inc. 22%, with Bechtel Petroleum Operations Inc. as contract operator, moved out to the cutting edge of horizontal drilling in California with the state's first large hole horizontal wells.

The well chosen to point the way was No. 372-35R, in 35-30s-23e, Kern County. The 7,171 ft well had been drilled in 1951 as a conventional Stevens sand producer high on the structure of the 26R pool. Initial production had been 1,400 b/d of 34° gravity oil through a 20/64 in. choke from an overall interval between 6,400 ft and 7,100 ft. By 1988, the well had produced 4.236 million bbl of oil. Production had dropped to 180 b/d. DOE and Chevron decided to recast the well as a horizontal hole.

26R program

George McJannet, then chief geologist for DOE in Naval Petroleum Reserve No. 1 and since retired, said, "The horizontal well program began in an attempt to slow production decline of the 26R pool and to perhaps increase the production rate, decrease gas production, and extend the life of the reservoir.

"The concept was to take advantage of the reservoir configuration/geometry, the gravity drainage mechanism associated with steep structural dips, and the highly layered nature of the reservoir," McJannet said.

The 26R pool is in the approximate center of Elk Hills field. The Stevens sand pool consists of a high quality, sand-rich turbidite channel system encapsulated within Miocene Monterey siliceous shales, mudstones, and associated sediments. The pool is approximately 3 miles long by 3/4 mile wide.

At the time the decision was made to initiate horizontal drilling the technology, while commonplace in the Austin chalk in Texas, had not yet become an important part of production in California. It was something of a novelty, surrounded by secrecy reminiscent of beginning days of thermally enhanced oil recovery by steam injection in the 1960s.

The redrill of No. 372-35R began on Aug. 30, 1988. By Oct. 4, a window had been cut in 73/4 in. casing at 6,938 ft and the well, redesignated 372H-35R, had been kicked off to build angle at 18°/100 ft until the hole was horizontal. Drilling continued to 8,310 ft measured depth, cutting approximately 800 ft of horizontal hole. A string of 41/2 in. liner was cemented at 8,271 ft MD.

The well came in flowing at an initial rate of 876 b/d of oil, 6 b/d of water, and 576 Mcfd of gas through 210 ft of perforated interval in the horizontal section. The production rate climbed as high as 1,176 b/d of oil. Production was cut back to 1,000 b/d and maintained at that rate.

The redrilled well was hailed as the well that brought back the days of 1,000 b/d wells that had long been thought gone forever from the California scene. By September 1997, the horizontal well had produced 2.26 million bbl of oil and was producing 262 b/d.

Success of the well led to drilling of a "grassroots" follow-up 1/2 mile to the southeast. The well, 316H-36R, in 36-30s-23e, was spudded Aug. 26, 1989, and drilled to 9,054 ft MD, including a 1,400 ft horizontal section. Build angle was about 12°/100 ft. along an arc with radius of 650 ft. To avoid a kit fox den, the arc radius was increased over the original plan.

A string of 51/2 in. blank liner with two external casing packers was cemented at 9,028 ft. The well was completed from 916 ft of perforated interval flowing 1,091 b/d, 1 b/d of water, and 646 Mcfd of gas.

Despite success of the first two wells, the ongoing program still faced challenges. The third horizontal well, No. 354H-35R, was another "grassroots" hole. The program called for two minus 10° lateral doglegs to avoid existing wells. The program also called for holding the entire horizontal section approximately 25 ft above the oil-water contact. Drilling began on May 12, 1991. Mechanical problems intervened, including stuck drill pipe and directional problems. The result was three unsuccessful redrill attempts. The fourth redrill succeeded.

The well was completed in October 1991, within 75 ft of the original well bore and approximately 38 ft above the oil-water contact. TD was 9,485 ft MD with a horizontal section of 1,775 ft. Completion was from a 763 ft interval. Initial production was 1,010 b/d of oil, 98 b/d of water, and 930 Mcfd of gas. The well was cut back to approximately 1,000 b/d to meet field production limits.

Stevens downdip

The fourth horizontal well was a redrill named 314H-26R, a high GOR well near the middle of the 26R pool.

The well was a conventional Stevens sand producer that had been drilled in 1953. Cumulative production prior to the redrill was 1.718 million bbl.

The program varied from the first three wells. Instead of drilling updip, the well was to be redrilled to the southwest, downdip and then up stratigraphic section in the horizontal leg and into shales overlying the 26R pool.

The well path was planned for approximately 35 ft above the oil-water contact but ended a minimum of 29 ft above the contact. After drillpipe conveyed logs were run to TD of 9,050 ft, a string of 41/2 in. blank liner was cemented at 9,050 ft without external casing packers. In November 1991, the well was completed flowing 955 b/d, 2 b/d of water, and 541 Mcfd of gas from an 832 ft perforated interval.

Sustained production rates of approximately 1,000 b/d of oil at the first four horizontal wells set a bright example. While the first well was building up cumulative production of 2.26 million bbl by September 1997, the three follow-ups had produced more than 1 million bbl each.

Shallow Oil Zone

The oil zone that gave Elk Hills field its first commercial oil production in January 1919 came into focus again in October 1995 as a potential target for horizontal wells.

The field had been discovered by Standard Oil Co of California's 1 Hay, a wildcat 9 miles north of Taft and supergiant Midway-Sunset field. The well had flowed at a rate of 200 b/d of oil from what would later be known as the Shallow Oil Zone, or more familiarly the SOZ.

Standard, now Chevron, had drilled the discovery well to TD 2,480 ft. In October 1995, DOE-Chevron-Bechtel began preparation to target the SOZ with a well that would cut more than twice as much footage as crews cut 75 years before in the discovery well. Vertical depth of the new well would be about 1,300 ft deeper than the discovery well.

On Oct. 24, 1995, Bechtel spudded No. 27H-11G, in 11-31s-24e, Kern County, on the southeast flank of Elk Hills field. The well was programmed to bottom almost 1/2 mile southwest from where drilling began.

The SOZ includes 25 different sand layers in SS-1, SS-2, Mulinia, and Sub-Mulinia zones. The horizontal well targeted the SS-1, which contains multiple sublayers. The top 4 contain oil. The bottom 3 contain high pressure water. The challenge was to hit the 4 top layers. If the hole went deeper, it would get water.

If successful, the well geologically would be the lowest producing well in the southeastern portion of the field. At stake was addition to SOZ reserves along flanks of the SOZ, tapping oil that could not be produced economically by vertical wells.

Before the drilling rig was released on Nov. 16, the horizontal well had gone to total drilled depth of 5,648 ft, bottoming approximately 1/2 mile southwest of the surface location at a true vertical depth of 3,998 ft. Pipe in the well included 95/8 in. casing at 4,534 ft and 7 in. liner from 3,281-5,466 ft.

In late December 1995, the well tested an interval from 5,210-5,480 ft for 347 b/d of 21° gravity oil, 1 b/d of water, and 5 Mcfd of gas. The production rate compared with the 40 to 100 b/d of oil produced by offset vertical wells.

Successful completion of the first SOZ horizontal well led to drilling four more SOZ horizontal wells before the end of May 1997.

In the meantime, 18 more horizontal wells were drilled in the 26R pool, where the first four horizontal wells had been completed.

The Stevens sand program also had expanded to the Northwest Area of the Elk Hills field, where five wells were completed between May 1996 and May 1997 in 7-30s-23e, Kern County.

The scorecard

From the time horizontal drilling began at Elk Hills in August 1988 until it ended in May 1997, in the face of impending sale of DOE's 78% interest in the field, the DOE and Chevron with Bechtel as contract operator drilled and completed 32 horizontal wells in the field.

The wells include 22 in the 26R pool's Stevens zone, 5 in the Northwest area's Stevens zone, and 5 in the SOZ.

Production from the horizontal wells in September 1997 averaged 9,589 b/d of oil, including 6,899 b/d from the 26R pool, 1,849 b/d from the Northwest area, and 845 b/d from the SOZ. Horizontal wells produced almost 1 b/d out of every 5 b/d of the field's 56,032 b/d, or 17.1%.

Production of 6,899 b/d by the 22 horizontal wells in the 26R pool represents 3 bbl out of every 4 bbl of oil produced by the pool or 76% of the pool's production of 9,075 b/d.

Cumulative production from horizontal wells is 17,175,280 bbl of oil, including 16,170,400 bbl from the 26R pool, 564,000 bbl from the Northwest area, and 440,880 bbl from the SOZ. Drilling costs per horizontal well averaged $2,339,000 in fiscal 1991 and have been reduced each year since to $1.1 million in 1997.