August 14, 2002 --- Vol. 8, No. 83August 2002

Phillips looking at one to four exploration wells this winter

Phillips Alaska Inc. has told regulators that it plans to drill one to four exploration wells this winter and is looking at sites ranging from the western side of Teshekpuk Lake in the National Petroleum Reserve-Alaska to state lands east of Nuiqsut.

Bruce Webb, natural resource officer with the Division of Oil and Gas, told PNA Aug. 14 that Phillips told agency representatives that it is looking at drilling sites in four areas.

One area is at Puviag west of Teshekpuk Lake in NPR-A some 67 miles southeast of Barrow where the company has Nabors Alaska Drilling rig 16-E stacked on an insulated ice pad in section 35 township 16N range 10 west, Umiat Meridian. The Bureau of Land Management told PNA in July that Phillips staked two wells in the area: the Puviag No. 1, NWNW 35-16N-10W, UM, and the Puviag No. 2, SESW 9-15N-10W, UM.

Other possible NPR-A well locations include Summit, Grand View, Power Line and Carbon.

On state lands Phillips has prospects at Cronus, Oberon and Placer, all in the area between the Colville River unit (Alpine) and the Kuparuk River unit. Webb said the Oberon prospect is in a group of leases where Phillips has a work commitment and will start losing acreage if they don't drill.

Phillips is also looking at drill sites at Sunrise No. 3 and Titania, Webb said. Sunrise is northwest of Nuiqsut and Titania is directly east of Nuiqsut across the Colville River.

Phillips' plans will be finalized much closer to the start of tundra travel, Phillips Alaska spokeswoman Dawn Patience told PNA. She said that this was just a preview.

Mackenzie pipeline open season attracts 20 producers

The Mackenzie Delta Producers Group has been swamped with responses from natural gas companies who answered an invitation to register their interest in obtaining space on a Mackenzie Valley pipeline.

A one-month open season designed to get an estimate on the number of potential shippers yielded expressions of interest from 20 companies, said a spokesman for Imperial Oil Ltd., the lead partner in the MDPG.

Because of qualifications in the non-binding expressions of interest, he said Imperial will have to meet with all of the producers to get a more reliable fix on the total volumes nominated.

But he said the exercise will help the MDPG to develop flexible plans for handling discoveries over and above the 800 million to 1 billion cubic feet per day expected to come from the Taglu, Parsons Lake and Niglintgak, where proven reserves are currently 5.8 trillion cubic feet.

The 20 companies include the partners in the MDPG Imperial, Shell Canada Ltd., Conoco Canada Ltd. and ExxonMobil Canada.

Although the others were not identified, they would likely include the Mackenzie Delta Explorers Group, consisting of Petro-Canada, Devon Canada Corp., EnCana Corp., Chevron Canada Resources, Anadarko Canada Corp., Burlington Resources Canada Energy Ltd. and BP Canada Energy Co., who have pledged to spend C$900 million over five years to explore the Delta.

The Mackenzie Valley Aboriginal Pipeline Corp. has a memorandum of understanding with the MDPG that could see the Native group obtain a one-third equity stake in the pipeline by negotiating incremental initial supplies of 400 million to 500 million cubic feet per day.

The MDPG has indicated that it could move from the current project definition phase by mid-2003 and enter the regulatory and approval phase a process that could take up to four years.

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