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Seven drilling ANS exploration wells Gas target of two Anadarko’s wells; four small independents to drill; Chevron starts multi-year exploratory program in Foothills Kay Cashman Petroleum News
Seven oil and gas companies plan to drill exploration wells on Alaska’s North Slope this winter; an eighth company is moving forward with plans to re-enter an old exploration well on an undeveloped prospect. Five of the eight companies are small independents; one is a big independent; and two are majors — one returning to the Slope after a 15-year absence.
The big independent, Anadarko Petroleum, is targeting natural gas, the first explorer in northern Alaska to do so. Gas wells have been drilled on the North Slope in the past, but for local use or by mistake when companies were looking for oil, which is more valuable and can be marketed via the 800-mile trans-Alaska oil pipeline.
The two majors are returnee Chevron and ConocoPhillips, the slope’s biggest explorer historically, although this year the company is backing off wildcat exploration to drill close-in delineation wells after disappointing results and an unusually expensive exploration season last year.
Three of the small independents plan to drill their own exploration wells — Brooks Range Petroleum Corp. Group, or BRPC Group, Savant Alaska and Renaissance Umiat.
Small independent UltraStar Exploration will have BP drill its well from an existing Point McIntyre gravel pad near the end of the winter exploration season. And Alaskan Crude, a fifth small independent doing exploration work on the Slope this winter, plans to re-enter a well that was suspended in 1985.
Anadarko: two rigs under contract Anadarko has two drilling rigs under contract, Nabors 105E, new to Alaska, and Akita 63, which has just been winterized. In the west it plans two gas wells with Nabors 105E at its Gubik and Chandler prospects, which are on Arctic Slope Regional Corp. land near Umiat in the Foothills. BG Alaska and Petro-Canada are partners in those prospects.
On the other side of the slope, 10 miles southeast of Prudhoe Bay, Anadarko will go in to finish a well it began drilling last winter on its Jacob’s Ladder oil prospect. State Division of Oil and Gas geologists believe the Lisburne (Wahoo formation) structure in Jacobs Ladder could yield a range of 20-660 million barrels of oil equivalent and the Sadlerochit (Ivishak formation) structure could yield a range of 50-800 million barrels of oil equivalent. Anadarko’s partners at the prospect are ASRC and BG.
Depending on what it finds at Jacob’s Ladder this winter, Anadarko might do more drilling there or drill another nearby prospect, local spokesman Mark Hanley said in late October.
Chevron returns to northern Alaska Chevron, an oil and gas explorer and Cook Inlet producer in Alaska for decades, will begin exploration drilling this winter at its White Hills prospect in the Brooks Range Foothills. It will be the first time the company — or Union Oil Company of California, which Chevron acquired in 2005 — has explored on the North Slope since the early 1990s.
Chevron has told regulators that it hopes to drill six wells this winter, and in a recent application to the Alaska Department of Environmental Conservation said it “plans to conduct a regional, multi-year onshore oil and gas exploration drilling program during the winter months” at White Hills.
The company will be using another new rig from Nabors, Rig 106E.
Chevron officials have not been willing to talk about the target of the White Hills’ wells, but Alaska Division of Oil and Gas geologist Paul Decker told Petroleum News in 2006 that two wells on the acreage, Unocal’s 1994 Amethyst well and BP’s 1991 Malguk 1 well, penetrated thick Upper Cretaceous deepwater turbidite sands with good oil and gas shows. Decker also said Phillips Petroleum’s 2002 Heavenly 1 well just west of White Hills had the same Cretaceous interval and that the same sands may extend within the Chevron acreage.
Bowles bumps well number to 3 ConocoPhillips exploration program, with partners Anadarko and Pioneer Natural Resources, reached into far western NPR-A last winter. This winter ConocoPhillips plans to drill closer in, focusing on appraising discoveries previously announced on the eastern border of NPR-A near the Alpine oil field infrastructure in the Colville unit, where it is a partner with Anadarko.
Erec Isaacson, ConocoPhillips Alaska’s vice president of exploration and land, told Petroleum News in October that budgets for this winter’s exploration season wouldn’t be approved until December, but the company was looking at drilling a couple of wells in the “Alpine-Greater Moose’s Tooth area — really exploration-appraisal wells.” A flow test for one of the Rendezvous wells was also possible, he said.
Staging would be done using the ice road to Alpine, which is built every year to move supplies to the Colville River unit, Isaacson said.
In a Nov. 14 speech, ConocoPhillips Alaska President Jim Bowles increased the number of this winter’s exploration wells to three, one each in the Spark, Rendezvous, and Fiord West prospects.
His statement is in line with the five-year NPR-A drilling plan ConocoPhillips submitted to the U.S. Bureau of Land Management.
The Spark DD wells (Nos. 9-12) in that plan are all in the Northeast NPR-A planning area, directly adjacent to the proposed site for CD-7, which has been evaluated as a development node with permanent road access and a pipeline to Alpine. Spark is some 15 miles southwest of Alpine.
If the Spark and nearby Lookout (CD-6) discoveries are developed, as little as two miles of pipeline would be needed to connect the Spark DD sites, BLM said.
The Spark No. 1A 2001 discovery well tested 1,550 barrels per day of liquid hydrocarbons and 26.5 million cubic feet per day of gas. Other successful wells included the Spark 1, Moose’s Tooth C, Looking 1 and Rendezvous A and 2. All encountered oil or gas and condensate in the Alpine producing horizon.
Isaacson said Doyon Rig 141, currently under contract with ConocoPhillips at Kuparuk, would likely be the rig the company uses for this winter’s exploration-delineation program.
BRPC Group most active The most active of the four small independents that plan to drill exploration wells this winter is Brooks Range Petroleum Corp. Group, or BRPC Group, which drilled two wells on two North Slope prospects last winter, and is planning a multi-year, multi-well exploration program on the North Slope.
BRPC Group consists of AVCG, its operating subsidiary Brooks Range Petroleum and three well-funded partners — TG World Energy Inc., Nabors subsidiary Ramshorn Investments Inc. and Bow Valley Alaska Corp.
Company executive Ken Thompson said in October that BRPC Group is hoping to drill as many as four wells this winter on three different North Slope prospects with Nabors Rig 27E. But first the company will go back in to complete and test its North Shore 2006-07 exploration well, one of two drilled in the Gwydyr Bay area northwest of Prudhoe Bay. Sak River No. 1 was a dry hole, but BRPC Group said the other well, North Shore No. 1, looked like an oil strike.
The partners will likely drill one or two more wells near North Shore No. 1, Thompson said, in hopes they “can discover a sufficient volume of oil to warrant a commercial development at Gwydyr Bay.”
The 2007, 3-D seismic shot over the Gwydyr Bay prospect area “has identified two small satellite prospects to North Shore No. 1 that can be reached from the North Shore No. 1 drilling pad,” TG World said in an October press release.
In a Nov. 13 press release Bow Valley said North Shore No. 1 “appears to be comparable to, the 1974 Mobil Gwydyr Bay South No. 1 well,” which is about 1,100 feet to the east and “flowed at an average rate of 2,263 barrels of oil per day on production test from the same formation.”
At the Oct. 24 Beaufort and North Slope state lease sales, the co-venturers were high bidders on several tracts adjacent to, or near, North Shore No. 1.
BRPC Group is also planning to drill the Tofkat No. 1 well this winter, which is in what the company used to refer to as the Titania prospect area, south of the Alpine field.
TG World said that if Tofkat No. 1 is a discovery, the partners “may choose to drill a sidetrack well this winter season to help delineate the reservoir extent.”
The company also said that the first North Shore satellite “prospect is expected to be drilled after Tofkat No. 1 well operations are completed.”
“We will … also drill a fourth exploration well on a prospect to be named,” spending more than $40 million on seismic and drilling in the winter of 2007-08, Thompson said.
TG World said the fourth well would be selected “from prospects in the Gwydyr Bay area covered by proprietary 3-D seismic data. Final prospect selection is awaiting delivery and interpretation of the pre-stack depth-migrated seismic volume.”
Savant drilling near Liberty Another small independent, Savant Alaska LLC, a newcomer to Alaska and an affiliate of Denver-based Shaw Resources, is set to drill its Beaufort Sea Kupcake prospect this winter.
“We have Kuukpik No. 5 under contract to drill the well and expect to spud before Feb. 15, 2008,” Savant COO and Executive Vice President Greg Vigil told Petroleum News in mid-October.
Kupcake is adjacent to BP’s Liberty prospect and is expected to hold approximately 100 million barrels of recoverable oil.
The Kupcake well site is in 14 feet of water about three miles offshore in Foggy Island Bay, approximately 8,000 feet west of the Liberty No. 1 discovery well. Savant plans to drill to a depth of 11,000 feet in order to test the Kemik formation. (BP has pegged Liberty’s recoverable oil at between 120-130 million barrels and is moving toward field development.)
In late 2006, independent True North Energy Corp., also a newcomer to Alaska, farmed 120 acres into Kupcake where Savant held 1,291 acres. No cash was involved in the deal. Vigil said in October 2007 that Savant expects the final acreage ownership in the pooled area to be 91.5 percent Savant’s, and 8.5 percent True North’s.
F.X. O’Keefe, the former head of BP’s exploration department in Alaska, is Savant’s director of business development and responsible for advancing the company’s growth platform in Alaska.
Renaissance Umiat 7 or 8 shallow wells this winter Renaissance Umiat LLC executive Mark Landt told Petroleum News in October that the company was in the process of permitting 10 wells in the Umiat oil field, which straddles the eastern border of NPR-A.
Because the Umiat reservoir, which holds very light oil, is just 200 to 1,400 feet deep, Landt expects to get seven or eight wells drilled this winter using the Doyon-Akita Arctic Wolf rig, which Renaissance contracted after Talisman Energy subsidiary FEX released the rig.
Renaissance Umiat, Landt said, would likely be sharing some ice road and logistical costs with big independent Anadarko Petroleum, which plans a well at the nearby, undeveloped Gubik gas field.
The U.S. Geological Survey estimates Umiat holds 70 million barrels of recoverable oil, but Renaissance has put estimates closer to 100 million barrels.
Landt said the U.S. Navy drilled 11 wells in the Umiat field in the 1940s and 1950s, plus a deeper test well, the No. 1 Seabee, in 1979. The reason the field has not been developed is “generally due to the remoteness from infrastructure and pipelines and due to historically low oil prices,” he said.
One challenge the field poses is that some of the oil is in permafrost, he said.
Renaissance Alaska LLC is the sole managing member of Renaissance Umiat.
UltraStar targets April UltraStar LLC managing member Jim Weeks told Petroleum News Oct. 31 that the Petersburg, Alaska-based company expects its Dewline Deep No. 1 well to be drilled from BP’s Point McIntyre 1 drill pad “in the early April (2008) timeframe.”
Weeks said, “BP will manage the operation, but we will have an onsite geologist to make necessary decisions.”
If the well is successful, Dewline Deep oil would be processed at the nearby BP-operated Lisburne facilities in the Prudhoe Bay unit where Point McIntyre oil is processed.
The plan, Weeks said, is to petition the state Division of Oil and Gas to expand the Prudhoe Bay unit to include the UltraStar lease with the Dewline Deep No. 1 well location, rather than keeping it independent.
BP has agreed to it, and thinks the other Prudhoe owners will also agree, Weeks said.
The expansion has to be applied for prior to drilling in April.
“We’ve just finalized a document that has to be filed with the expansion papers … called a joinder. It establishes the terms and conditions under which UltraStar joins the PBU,” Weeks said.
But don’t expect another major oil field. Although the prospect shows good potential, the oil accumulations are likely to be modest in size — the drilling isn’t going to find 100 million barrels, Weeks said. “At Gwydyr Bay the Ivishak has notoriously small fault traps.”
But what’s considered a very small field on Alaska’s North Slope — 5 million to 20 million barrel range — is a big coup anywhere else in the country, he said.
Alaskan Crude: Kenai first, then North Slope Following an Oct. 29 decision by the Alaska Oil and Gas Conservation Commission to further reduce the potential unassisted oil flow from the North Slope Burglin No. 33-1 well, San Antonio-based Alaskan Crude says it will proceed with plans to re-enter the well in the winter of 2008. But first, the small independent will re-enter a well on Southcentral Alaska’s Kenai Peninsula.
“We’ll drill Amarex well first, then send our rig to the North Slope to re-enter the Burglin 33-1 well in the Arctic Fortitude unit,” Jim White, president of Alaskan Crude, told Petroleum News Oct. 30. “… Our first plan (for Burglin) is to test the Ugnu, and then evaluate what we have and make a decision as to the next step. ... The area is oil and gas prone.”
One and a half miles southeast of the Deadhorse airport, the 6,363-acre Arctic Fortitude unit sits on the south side of the Prudhoe Bay unit, immediately east of the NE Storms unit, on three state leases.
Alaskan Crude’s drilling rig has a top drive and is similar in size to Aurora Gas’s AWS 1 rig, White said. “Nice little pony — actually, it’s a race horse,” he said.
Alaskan Crude will use a snow road to truck its lightweight drilling equipment three miles from the Haul Road to the Burglin well, White said.
The original Alaskan Crude Corp. drilled the Burglin well down to Ivishak formation in 1984-85, and suspended it. The original company went bankrupt. Jim White bought the company and acquired the Burglin leases in a state lease sale.
A key issue in the delayed drilling at Burglin has been the need for an oil spill contingency plan. Under state statutes and regulations, a company drilling an oil well needs a contingency plan for responding to an oil spill up to a maximum potential rate of unassisted flow for the well.
Going back and forth with AOGCC over a period of months, Alaskan Crude eventually amended its drilling plan to re-enter only the Ugnu formation. As a result, AOGCC reduced the unassisted oil flow potential for the well to 115 barrels per day, for an Ugnu test.
White, a long-time Alaska oil and gas investor and explorer, said he drilled his first well in Alaska in 1977.
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