Slope drilling steady

Large unit wells counts even in 1st quarter compared to previous 2 years

ERIC LIDJI

For Petroleum News

Even with oil prices at historic lows, and some producers reducing their workforces, development drilling on the North Slope has remained steady over the past three years.

According to Alaska Oil and Gas Conservation Commission completion reports, the operators of the six most productive North Slope units drilled 36 development wells in the first quarter of 2014, 44 development wells in the first quarter of 2015 and 47 development wells in the first quarter of this year - a slight increase in drilling activity.

Over that time, the average spot price of Alaska North Slope crude oil at West Coast markets fell from $107.90 per barrel in March 2014, to $52.27 per barrel in March 2015, to $38.10 per barrel in March 2016, according to the Alaska Department of Revenue.

The figures represent administrative filings published through May 2016. AOGCC completion reports occasionally lag behind actual drilling and are often revised. With revisions, the first quarter 2016 figures could be higher but are unlikely to be lower.

Also, the reports only measure wells, laterals and sidetracks and not “workover” activities, where operators perform maintenance to improve production at older wells.

For these purposes, reference to “wells” includes laterals and sidetracks. The well totals include both production wells and injection wells required to maintain field pressure.

Stability at big units

At Prudhoe Bay, BP Exploration (Alaska) Inc. drilled nine wells in the first quarter of 2014, 18 wells in the first quarter of 2015 and 20 wells in the first quarter of 2016.

At the Kuparuk River unit, ConocoPhillips Alaska Inc. drilled 10 wells in the first quarter of 2014, 19 wells in the first quarter of 2015 and 18 wells in the first quarter of 2016.

(In the first quarter of 2015, the company also completed the Moraine No. 1 well, which is listed as a development well but was drilled from a temporary ice pad and described in permitting documents as a delineation well and therefore excluded from these totals.)

The trends are more complicated at the Colville River unit, the Milne Point unit, the Nikaitchuq unit and the Oooguruk unit, where well counts are generally smaller.

The Colville River unit saw a spike in activities as operator ConocoPhillips began developing its CD5 pad in late 2015. The company drilled one wells in the first quarter of 2014, two wells in the first quarter of 2015 and four wells in the first quarter of 2016.

The Milne Point unit reflects a transition as BP handed control of the unit to its new partner Hilcorp Alaska LLC. BP drilled 12 wells in the first quarter of 2014 while Hilcorp drilled no wells in the first quarter of 2015 and three wells in the first quarter of 2016. While drilling declined, Hilcorp conducted a major workover campaign at the unit in 2015 and recently proposed a large drilling program for the coming year.

At the Nikaitchuq unit, Eni US Operating Co. Inc. drilled three wells in the first quarter of 2014, three wells in the first quarter of 2015 and no wells in the first quarter of 2016.

Over the past few years, the Italian company has been completing its initial development program at the unit and evaluating whether and how to expand its development activities.

At the nearby Oooguruk unit, Pioneer Natural Resources Alaska LLC drilled one well in the first quarter of 2014 and its successor Caelus Natural Resources Alaska LLC drilled two wells in the first quarter of 2015 and two wells in the first quarter of 2016.