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Providing coverage of Alaska and northern Canada's oil and gas industry
November 2018

Vol. 23, No.45 Week of November 11, 2018

Exploration’s in view

The Alaska winter will see some new drilling and seismic surveying operations

Alan Bailey

Petroleum News

As temperatures drop in Alaska, and the ground freezes up, companies are preparing for this winter’s exploration season.

Top of the anticipated well count comes ConocoPhillips - the company is following up on last winter’s bumper count of six wells with a plan for this winter involving six to eight wells. The final count will depend on how quickly the drilling projects progress, and on the weather conditions.

In fact, the company should already be gearing up for its first two wells, planned to be drilled in November from existing gravel drill pads. One of these will test the Cairn prospect in the southwestern corner of the Kuparuk River unit. The other involves the Putu prospect, near the village of Nuiqsut, in what ConocoPhillips terms the Narwhal trend, to the east of the Colville River. This is the same trend as the Pikka/Horseshoe trend, where Oil Search and its partners are planning the development of a major oil field primarily involving a reservoir in the Nanushuk formation. ConocoPhillips will drill the new Putu well directionally from the CD-4 pad in the Colville River unit.

ConocoPhillips discovered oil associated with two distinct seismic anomalies in the Putu prospect during last winter’s exploration drilling season. The company now wants to test a third seismic anomaly in the prospect.

The remaining four to six wells to be drilled this winter will further test the Willow discovery in the Bear Tooth unit, in the northeastern National Petroleum Reserve-Alaska. Willow is a major oil discovery that ConocoPhillips plans to develop as a standalone oil field. ConocoPhillips has said that it wants to drill some horizontal wells, to better understand the potential productivity from the field, and some vertical wells to test inter-well communication. The company wants to further delineate the field and to conduct further well tests.

Oil Search

Oil Search, the company planning to develop the huge Nanushuk oil field in the Pikka unit, to the east of the Colville River, is also operating in field appraisal mode. It plans to drill two wells, each with a sidetrack, at Pikka this winter. One well, the Pikka B, will be in the southwestern portion of the unit and the other, the Pikka C, will be in more of a central location. Oil Search has said that it anticipates starting construction of an ice road and two ice pads in early December for the drilling. The company expects to mobilize two drilling rigs from Deadhorse in mid-January, with drilling expected to start at the beginning of February.

Oil Search has said that it needs the two wells for the further appraisal of the field reservoir, prior to the start of front-end engineering and design for the field development. The Pikka B is planned to reach a vertical depth of 6,513 feet, with a sidetrack to a depth of about 4,923 feet. The Pikka C is planned to reach a vertical depth of about 4,919 feet, with a sidetrack to a depth of about 4,175 feet.

The Nanushuk play involves reservoirs in relatively shallow sand bodies, deposited by river systems on the upper margin of an ancient marine basin. The copious quantities of relatively light oil in the play had been missed or overlooked during earlier North Slope exploration.

Great Bear

In a new initiative to leverage this same play, Great Bear is planning the Winx No. 1 well, targeting a Nanushuk prospect in a block of four leases to the east of the Horseshoe wells, where Armstrong Energy found oil in the Nanushuk in 2017. Three Australian companies - 88 Energy Ltd., Otto Energy Ltd. and Red Emperor Ltd. - have acquired a collective 90 percent interest in the leases from Great Bear. 88 Energy has said that its wholly owned subsidiary Captivate Energy Alaska has contracted the Nordic-Calista Services rig 3 to drill the Winx prospect.

The project is expected to require 11 miles of ice and snow roads and the construction of an ice pad.

Apparently Otto Energy used seismic data acquired from the Alaska Department of Natural Resources to identify the prospect at a depth of about 5,000 feet in the Nanushuk, and has said that the prospect has a mean estimated gross resource of 400 million barrels of oil, with a chance of success in the range of 25 to 30 percent.

Eni

As reported elsewhere in this issue of Petroleum News, Eni US Operating Co., in a wildcat exploration venture in a different geologic setting offshore the central North Slope, plans to continue its Nikaitchuq North project, restarting the drilling of its NN01 extended reach well early in 2019. The company is testing a prospect on the federal outer continental shelf of the Beaufort Sea, hoping to add new oil reserves for development in association with the Nikaitchuq field.

Further east, at Badami, last winter Glacier Oil and Gas Corp. saw exploration success with its Starfish well - the results from that well pointed to further exploration potential, However, the company is still figuring out its next steps, Phil Elliott, Glacier president and CEO, has told Petroleum News (see sidebar).

While not technically exploring on the North Slope, BP is seeking new development opportunities in the Prudhoe Bay unit through the conducting of a new 3-D seismic survey in the unit this winter. The idea is to use high resolution seismic data to locate subsurface features where further oil may be developed.

Hilcorp

In Southcentral Alaska, Hilcorp Alaska has filed plans with federal regulators, indicating an interest in exploration of the federal outer continental shelf of the lower Cook Inlet. As previously reported in Petroleum News, the company plans to conduct a 3-D seismic survey in the lower Cook Inlet between April and June of 2019, to be followed at some point by a geohazard survey. That could all lead to exploratory drilling in subsequent years.

Hilcorp has also indicated that it plans an exploration program on the Iniskin Peninsula on the west side of the Cook Inlet, with operations conducted between April and October, starting in 2019.

The lower Cook Inlet and the Iniskin Peninsula area have known oil potential but as yet no commercial discoveries - the region has an active petroleum system, including excellent oil source rocks, but has been only very sparsely explored. Hilcorp acquired 14 lease blocks in the Bureau of Ocean Energy Management’s 2017 lower Cook Inlet lease sale.

In the upper Cook Inlet basin, in which all of the current Cook Inlet oil and gas fields are located, Hilcorp has been planning to drill two new exploration wells, the Seaview No. 8 and Seaview No. 9 wells, from a pad near Anchor Point in the southern Kenai Peninsula. There is no word yet on the status of that drilling program. Each well would be drilled directionally to measured depths of around 10,000 feet. The No. 8 well will test oil and gas prospects, while the No. 9 well will seek gas.





Glacier in planning mode for next steps

Phil Elliott, president of Glacier Oil and Gas Corp., told Petroleum News in a Nov. 6 email that his company is currently evaluating its Alaska drilling opportunities and has not yet set its 2019 budget. The company operates the Badami oil field, on the Beaufort Sea coast, to the east of the central North Slope. Elliott said that he does not anticipate his company completing its funding assessment until January.

Last winter the company saw success with the drilling of its Starfish exploration well in the Badami unit.

Elliott said that his company had an exceptional year, both operationally and financially, in 2018, and that the company is focusing on maintenance projects and a multi-well drilling program at Badami. The company is also seeking to accelerate oil production in its Cook Inlet interests, Elliott wrote. The company operates the West McArthur River and Redoubt units on the west side of Cook Inlet and the North Fork field on the Kenai Peninsula. The company has also been planning the drilling of the Sabre exploration well near the West McArthur River unit.

—ALAN BAILEY


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