NEWS BULLETIN

September 20, 2000 --- Vol. 6, No. 46September 2000

Phillips begins permitting for Meltwater development

Phillips Alaska Inc. plans to begin construction this year of a new drill site and access road to develop the Meltwater discovery in the southwest corner of the Kuparuk River unit west of Prudhoe Bay. The company said in applications to the state that it is also preparing an application to extend the Kuparuk River unit boundaries south to include the entire Meltwater reservoir.

The 50 million barrel Meltwater discovery was announced May 2. Phillips Alaska and BP Exploration (Alaska) Inc. said the 1 Meltwater North well about 10 miles south of the Tarn oil field tested at 4,000 barrels per day of 37 degree API gravity oil. A second well and sidetrack, 2 and 2A Meltwater North, confirmed a northern portion of the reservoir.

In addition to the new drill site, designated 2P, the development will include pipelines, a power line, a mine site, an access road and associated facilities. Phillips said it plans to begin construction in mid-December with the drill site and access road, both of which will be within the existing Kuparuk River unit.

The drill site will be about 10.1 miles from drill site 2N. The drill site and access road will require an estimated 641,650 cubic yards of gravel and will cover 77.9 acres.

Construction of the drill site and road are slated to be completed in January 2001, with pipelines and power lines to be constructed in the first and second quarters of 2001. Drilling is slated to begin in the second or third quarter of 2001. Construction is expected to be complete by the fourth quarter 2001 and drilling will be complete by the second quarter of 2002.

BP sets NPR-A exploration plans

BP Exploration (Alaska) Inc. has begun the permitting process for a five-year National Petroleum Reserve-Alaska exploration program slated to begin this winter. BP staked locations last year, but did no exploratory drilling.

The company's Trailblazer prospect, with as many as eight possible well pad locations, adds two locations to those staked last year.

The five-year program, BP said, is in conjunction with partners Chevron and Phillips and drilling is contingent on permits, partner consensus and funding -- and could shift from the winter of 2000-2001 to the future.

The prospect will be reached by a 54 mile grounded sea ice road on the Beaufort Sea from Oliktok Point to the Kalikpik River and by a 16 mile ice road over tundra from the mouth of the river to A pad, the company's first planned location. BP said it may be able to use the Phillips Alaska Inc. Alpine ice road if sharing agreements can be negotiated. Ice construction would take place from December to February; a rig would be mobilized in February; the first well would be spud about mid-February and if significant hydrocarbons were found, wells may be tested.

BP said its initial ice pad would be in sections 13 and 14 of township 12N, range 3W, Umiat Meridian. This is on a tract for which partners BP (50 percent), Chevron (30 percent) and Phillips (20) percent paid $608.28 an acre at the 1999 federal NPR-A lease sale.


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