NEWS BULLETIN

October 25, 2006 --- Vol. 12, No. 74October 2006

Shell plans four Beaufort Sea wells in 2007

At the National Marine Fisheries Service’s annual Arctic Open Water Peer Review Meeting on Oct. 24 Shell Operations Manager Paul Smith said that Shell plans to drill four wells in the U.S. Beaufort Sea during the 2007 open water season.

“The new thing we’re doing in 2007 will be drilling activities,” Smith said. “We have four wells planned for the Camden Bay area.”

Smith said that two of the wells will be at the Siv Ullig field (previously known as Hammerhead) and two of the wells will be some distance to the east of Siv Ullig, at a location named Olympia.

The drillship Kulluk that Shell purchased in 2006 will drill two of the wells. And Shell is bringing in another drillship, the Discoverer, to drill the other two wells. Apparently the Discoverer has not operated in Arctic waters before and is being refurbished with a reinforced hull. The Discoverer will enter the Beaufort Sea at the beginning of the drilling season and will leave the region again at the end of the season, Smith said. The drilling season will likely last from early July to early November, depending on the ice conditions.

Two icebreakers, the Vladimir Ignatyuk and the Kilabuk, will support the drillships.

State Beaufort Sea, North Slope sales draw 8 bidders, $3.2 million

The state’s areawide Beaufort Sea and North Slope oil and gas lease sales brought in $3.2 million from eight bidders or bidding groups when bids were read Oct. 25 in Anchorage.

AVCG, the only bidder in both sales, had a total for the day of $836,800 in apparent high bids, 26 percent of the $3.2 million bid at both sales.

AVCG, with high bids of $630,400, dominated the Beaufort Sea sale, which had high bids totaling $684,723.20.

Bill Van Dyke, acting director of the Alaska Division of Oil and Gas, said the division received 15 bids on 13 tracts, some 33,280 acres, in the Beaufort Sea sale.

AVCG took 12 tracts and lost one to UltraStar Exploration which took a single tract in the sale for $54,323.20.

The North Slope areawide sale had apparent high bids of $2,530,534.40. Van Dyke said the state received 53 bids on 44 tracts, some 177,280 acres.

Seven bidders or bidding groups participated in the North Slope sale: Chevron USA bid $636,883.20 for five tracts; J. Andrew Bachner, 85 percent, Keith C. Forsgren 10 percent and David G. Feddersen 5 percent, took 12 tracts for $486,092.80; Anadarko Petroleum took nine tracts for $413,804.80; FEX LP took seven tracts for $410,054.40; AVCG took six tracts for $206,400; Samuel H. Cade 75 percent and Daniel K. Donkel 25 percent took four tracts for $202,368; and ConocoPhillips Alaska took a single tract for $174,931.20.

Note: See fully stories in Oct. 29 issue of Petroleum News, available online at noon Friday Oct. 27.


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