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Oooguruk production rates hit new high Pioneer says oil production at the near shore unit is above 11,000 gross barrels per day and could gain 2,000 bpd per year Eric Lidji For Petroleum News
Pioneer Natural Resources is reporting its highest quarterly production rates from the Oooguruk unit since bringing the nearshore North Slope unit online two summers ago.
The Texas independent reported producing 7,000 net barrels per day in the second quarter, up 1,000 bpd from the first quarter and more than double what the unit produced in the second quarter of 2009, but about 1,000 bpd lower than forecasted rates as a result of curtailments caused by a shutdown of the trans-Alaska oil pipeline in May and pipeline repairs at the Kuparuk River unit, through which Pioneer processes Oooguruk oil, Scott D. Sheffield, chairman and CEO of Pioneer, said during a July 29 conference call.
Pioneer operates the unit in the waters of Harrison Bay and holds a 70 percent working interest in the field. The Italian major Eni Petroleum holds the remaining interest.
Sheffield said Pioneer is currently producing more than 11,000 gross bpd from Oooguruk, and expects production to increase by around 2,000 bpd each year, or perhaps more depending on the results of drilling this winter at a newer horizon at the field.
The company expects production rates to remain up through the rest of the year, projecting a 50 to 60 percent increase over 2009. That forecast is down slightly from the 60 to 70 percent year over year increase the company projected after the first quarter.
Companywide, Pioneer produced 113.5 million barrels of oil equivalent in the quarter.
At least four wells this year Pioneer expects to spend $1.2 billion this year, including $960 million for drilling. Of that, $120 million is budgeted for Alaska, where the company currently runs one rig.
That makes the North Slope the second largest expense area for Pioneer, after its assets in the Permian basin. So far this year, Pioneer has spent nearly $15 million in exploration expenses and more than $44 million in development expenses on its properties in Alaska.
Pioneer plans to spend some $580 million on its large Spraberry play in West Texas. The company is also budgeting $100 million on the Eagle Ford Shale play in south Texas, $65 million on its properties in Tunisia and $50 million for the Barnett Shale.
During the second quarter, Pioneer completed a horizontal water injector and started a dual lateral horizontal production well, both into the Nuiqsut horizon at Oooguruk. The injector well is currently producing about 600 bpd before Pioneer begins water injections.
In the second half of the year, Pioneer plans to drill four more Oooguruk wells: two into the deeper and larger Nuiqsut horizon, one into the middle Kuparuk horizon and the last into the Moraine horizon, a new and shallower target announced earlier this year.
Sheffield said Moraine testing flow rates have been steady at 600 bpd, with no decline.
“And so obviously we’re going to do some more drilling this coming winter,” he said.
One of the Nuiqsut wells will test the dual lateral is expected to come online this summer.
Flow test at Cosmo At Cosmopolitan, an oil prospect off the coast of the southern Kenai Peninsula, Pioneer is planning an extended flow test of the Hansen 1A-L1 sidetrack well for the second half of the year. Pioneer may drill another appraisal well during 2011, the company said in financial filings. Pioneer drilled the Hansen 1A-L1 well in 2007, repaired well casing during a workover in late 2009 and fracture stimulated the well earlier this year.
In the first half of the year, Pioneer drilled 193 wells across all its properties and plans to drill 440 wells altogether by the end of the year, according to Tim Dove, president and chief operating officer of Pioneer. The company is running 20 rigs, which it plans to ramp up to 30 by the end of the year in order to hit its target of drilling 700 wells next year.
Pioneer reported earning nearly $14 million in Alaska Petroleum Production Tax credits in the quarter, down from more than $87 million collected in the second quarter of 2009.
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