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Providing coverage of Alaska and northern Canada's oil and gas industry
February 2009

Vol. 14, No. 6 Week of February 08, 2009

Anadarko gives up Jacob’s Ladder unit

Following an unsuccessful well, the independent oil company and its partners relinquish leases and terminate North Slope unit

Eric Lidji

Petroleum News

Anadarko Petroleum is done with the Jacob’s Ladder unit.

The Texas-based company told the state in October 2008 that it didn’t plan to continue looking for oil and gas in Jacob’s Ladder. Anadarko and its partners relinquished 16 of their 18 leases at Jacob’s Ladder in November, and terminated the unit on Dec. 31, 2008.

The companies also allowed 15 leases outside the unit to expire at the end of November.

Jacob’s Ladder sat some 10 miles southeast of the Prudhoe Bay unit on the North Slope.

Indications of unique geology in the region led to hopes of a new type of prospect on the North Slope, one capable of containing hundreds of millions of barrels of oil equivalent.

Jacob’s Ladder was also a significant investment for Anadarko. According to filings with the state, the company spent more than $30 million drilling a well there over two winters.

Anadarko picked up the leases at Jacob’s Ladder over three lease sales during the late 1990s and early 2000s. The company eventually brought BG Group and Arctic Slope Regional Corp. on board as minority partners before starting a drilling program.

Using the newly winterized Akita 63 rig, Anadarko began drilling the Jacob’s Ladder C well in early 2007, but suspended the well once seasonal drilling restrictions kicked in.

Anadarko returned to the unit last winter to finish the well with a sidetrack, but in May 2008, the company said it found “no commercial hydrocarbons” after reviewing logs.

Jacob’s Ladder C was the second exploration well Anadarko drilled in Alaska as an operator. The first, the Altamura No. 1 well drilled in 2002 in the northeastern portion of the National Petroleum Reserve Alaska, also failed to lead to commercial production.

Anadarko is currently focusing its exploration efforts on a far-reaching and multiyear search for natural gas in the Brooks Range foothills. The company plans to use two rigs this winter to complete three exploration wells on Native and federal land in the area.

Unique geology drew interest

Oil companies first ventured to the area that became Jacob’s Ladder in the years just after the discovery of Prudhoe Bay in 1968. Mobil, Shell and Texaco separately drilled in the area between 1969 and 1970, but none of those wells led to commercial discoveries.

Interest in Jacob’s Ladder began to renew as some geologists believed the prospect contained Karst topography, a type of terrain where water erodes shallow limestone deposits to form underground caves that can become good vessels for holding oil or gas.

The state in 2005 put estimates of a prospect in the Wahoo formation at between 20 million and 660 million barrels of oil equivalent, while a estimating that a separate prospect in the Ivishak formation in the region could hold between 50 million and 800 million boe.

Anadarko ultimately drilled Jacob’s Ladder C to around 14,400 feet.

Anadarko did not relinquish two leases in the unit, ADL 389164 and ADL 389165, which sit directly east of Jacob’s Ladder C. Those leases are set to expire on March 31.

Anadarko still holds acreage outside the unit, with leases expiring in 2009, 2011 and 2012. Anadarko holds 50 percent working interest in the leases, with BG Group holding 40 percent interest and Arctic Slope Regional Corp. holding the remaining 10 percent.






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