ASRC speeds up unit work commitments

New drilling could come a year earlier under latest plan of exploration for proposed Placer unit west of Alaska’s Kuparuk field

Wesley Loy

For Petroleum News

Arctic Slope Regional Corp. is offering to accelerate work commitments as it seeks to win state approval for a new oil and gas unit on Alaska’s North Slope west of the Kuparuk field.

In a May 23 letter to the state Division of Oil and Gas, ASRC said it would move up exploratory work within its proposed Placer unit by a year.

ASRC also provided a revised map showing the unit would be sized down considerably.

Based in Barrow, ASRC is one of the regional Native corporations formed under the Alaska Native Claims Settlement Act of 1971. The company has extensive land holdings across the top of the state, and represents about 11,000 Inupiat shareholders.

Its subsidiary, ASRC Exploration LLC, is the applicant for the Placer unit.

After ASRC submitted its original unit application in January, the Division of Oil and Gas requested additional information and company representatives and state officials met on May 3.

As part of its original application, ASRC submitted an initial plan of exploration for the Placer unit. ASRC committed under the plan to license an existing seismic data set and reprocess and reinterpret the data by Dec. 31, 2012.

The company further pledged to either drill and log an exploratory well, or re-enter and test the Placer No. 1 well, by June 30, 2014. The Placer No. 1 is an exploratory well ConocoPhillips drilled in early 2004.

On May 23, ASRC revised its unit application and submitted an accelerated plan of exploration. The new plan essentially moves up key deadlines by a year, with ASRC pledging to either drill a new exploratory well or re-enter and test the Placer No. 1 well by June 30, 2013.

The original unit ASRC proposed took in four state leases totaling 8,769 acres. The lease numbers are ADL 391023, 391024, 391027 and 391028. The leases are on the western edge of the ConocoPhillips-operated Kuparuk unit, southwest of the Palm development.

A map of the original unit showed it would encompass not only the Placer No. 1 well, but another exploratory well to the north that ConocoPhillips drilled in 2004, the Placer No. 2 well.

A revised map ASRC submitted shows a much smaller unit centered around the Placer No. 1 well and taking in only portions of the four leases. The Placer No. 2 well is no longer within the unit boundary.

The tighter unit boundary apparently is in response to feedback from the Division of Oil and Gas that “a unit area should encompass only those lands considered necessary for the proper development of unitized resources.”

ASRC Exploration Manager Teresa Imm initially defended the original unit size.

“We feel that the size of the proposed unit area is very reasonable based on the well control in the area and the regional geology,” Imm said in a March 4 letter to the state. “The location of the Placer #1 well and the results from that well indicate that it is very likely that there are hydrocarbons present on all four leases proposed for unitization.”

The Placer No. 1 well was completed to a measured depth of 7,761 feet and its current status is listed as suspended, Alaska Oil and Gas Conservation Commission records show.

A document in the AOGCC file for Placer No. 1 says “sampling in the well recovered 26 API crude,” with indications of “high formation permeabilities and deliverabilities. Thus, the well appears fully capable of producing in paying quantities.”

ConocoPhillips, however, did not pursue a development and relinquished the land. In a March 2006 state lease sale, ASRC bid almost $131,000 for the acreage around the Placer wells.

Through its major subsidiary ASRC Energy Services, ASRC long has been heavily involved with Alaska’s oil and gas industry, providing construction, engineering and other oil field services. In recent years, the company has shown aspirations in the exploration and production arena.