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UltraStar to drill second Dewline well Alaska independent sees Ivishak target in first well; plugs and abandons it, forms state unit, plans to drill next well in 2011 Kay Cashman Petroleum News
Jim Weeks is still not sharing the detailed results of UltraStar’s first Dewline exploration well, drilled this past winter in the independent oil and gas company’s new unit north of Prudhoe Bay, but he did tell Petroleum News in August that, “it was a good well but we abandoned it.”
Weeks, a former ARCO Alaska senior vice president who is a managing member of Alaska-based UltraStar, said “We did see the target,” referring to the geologic target for Dewline No. 1, which was the Ivishak, the main reservoir at the nearby Prudhoe Bay oil field.
Dewline No. 1 was “a typical exploration well,” Weeks said. “Not a train wreck. We came pretty close to the operational amount we expected to spend.”
Most of the investors, he said, were satisfied: “It was much better than not seeing the target at all.”
First quarter 2011 UltraStar is planning to drill a second well in first-quarter 2011, Weeks said, on State of Alaska lease 390419, one of three leases in the 3,253-acre Dewline unit that lies north and west of the BP operated Prudhoe Bay unit, and south of BP’s offshore Northstar unit.
Dewline No. 1, which was on ADL 390944, was drilled vertically to 9,900 feet and required an ice pad and a two-mile ice road to connect back to the existing gravel road to Point McIntyre.
The 2011 well will be a directional well, drilled from an ice pad onshore to an offshore target, totaling 14,000 to 15,000 feet. It will also require an ice road, Weeks said.
“We originally planned to drill the second well in 2010, but we need a license to additional 3-D seismic and velocity data from BP, ConocoPhillips and ExxonMobil. It shouldn’t be a problem to get that from them, because we have an existing license and the commercial licensing terms have already been agreed to. These data will enable us to perfect our project by giving us a better understanding of the geological risk,” Weeks said.
“We’ve probably got a 90 percent-evaluated project now but there’s no sense going forward without 100 percent of the data. The owners of the data have been very cooperative in the past and I don’t see any reason they will not continue to be so,” he said.
BP, ConocoPhillips and ExxonMobil “hold offsetting leases and any wells we drill will enhance their understanding of the geology of their leases as well.”
Looking for additional investors The small delay from the second half of 2010 to first quarter of 2011 will help the company bring in additional investors and get a drilling rig lined up, Weeks said.
Under the June 4, State of Alaska Division of Oil and Gas decision to approve the formation of the Dewline unit, which effectively extended the terms of all three UltraStar leases, the company agreed to drill two exploratory wells to test the hydrocarbon potential of the Ivishak formation in the unit by May 31, 2013.
With the first well drilled and the second planned for early 2011, UltraStar is well ahead of schedule.
Eligible for exploration credits The Dewline exploration expenses are eligible for tax credits from the State of Alaska. Without those credits, Weeks said, “the well wouldn’t have been drilled.”
If UltraStar finds commercial amounts of recoverable oil, say 5 million to 10 million barrels, it will enter into an agreement with BP and the other Prudhoe Bay unit owners to process Dewline hydrocarbons through the nearby Lisburne facilities within the Prudhoe unit. The crude would then be sold at Pump Station 1 of the trans-Alaska oil pipeline, Weeks told Petroleum News in June.
Several exploratory wells dating back to 1969 have been drilled in the vicinity of the Dewline unit, some testing for oil, the state’s unit decision says.
Fairweather E&P Services has been the drilling project manager for UltraStar at Dewline.
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