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Mooses Tooth processing at Alpine Five participating areas possible for NPR-A unit: Rendezvous largest, followed by Spark; Pioneer, Mitre, Lookout, all smaller Kristen Nelson Petroleum News
As many as five participating areas are possible at the Mooses Tooth unit in the National Petroleum Reserve-Alaska, indicating as many as five reservoirs in the unit, the first approved by the U.S. Department of the Interior’s Bureau of Land Management in NPR-A (see story in Feb. 3 issue of Petroleum News). The Mooses Tooth Unit is the result of discoveries made by unit operator ConocoPhillips Alaska (and predecessors ARCO Alaska and Phillips Alaska) and Anadarko Petroleum in the NPR-A northeast planning area.
Development at Mooses Tooth will focus on infrastructure needed to drill wells and get oil out of the ground; processing will be done at Alpine.
“There will be no infield development facility” on unit lands, ConocoPhillips said in its unit application. A facility sharing agreement will be negotiated with the owners of the Alpine facilities and all production from the unit will be processed at Alpine.
ConocoPhillips (78 percent) and Anadarko (22 percent) are the working interest owners at both the Colville River Unit, where the Alpine field and two satellites, Fiord and Nanuq, are in production, and at Mooses Tooth. ConocoPhillips said three to five development gravel pads would be built in the Mooses Tooth Unit; those pads will be connected by 15 miles of gravel road, “impacting approximately 150 acres of NPR-A lands, which is 0.1 percent” of the 147,456-acre unit.
There will be a 25-mile-long pipeline system between the Mooses Tooth Unit pads and the Alpine central processing facility.
“All pipelines, including the infield lines, will be built at minimum heights of at least 7 feet above ground level to ensure passage of migrating caribou and allow unobstructed snowmachine travel in winter,” the company said.
A diesel fuel line, a seawater line and a fiber optic cable from Alpine to Mooses Tooth will use the same vertical support members as the three-phase pipeline, “consolidating facilities and further minimizing impact,” ConocoPhillips said.
Gravel for facilities will come from the already permitted Clover gravel mine site on the east bank of the Mooses Tooth Unit area. Construction will occur during the winter using ice roads for access. After construction, access will be by gravel roads.
BLM said in its Jan. 30 approval of the unit agreement that the Upper Jurassic formation on the 147,456 acres at Mooses Tooth is to be unitized. The acreage is currently 100 percent federal, but 23,680 acres, 16 percent of the unit, has been selected for future subsurface conveyance to the Arctic Slope Regional Corp.
The agreement provides for the drilling of an initial obligation well within 24 months of the effective date of the unit as well as subsequent drilling, testing or sidetracking to meet initial development obligations in the unit agreement, the agency said.
Unit includes discoveries The unit includes the discoveries at Lookout, Moose Tooth, Rendezvous and Spark, as well as Anadarko’s suspended 2002 Altamura well.
The discoveries were drilled in the 1999-2000 and 2000-01 winter drilling seasons. Five wells and a sidetrack targeted the Alpine producing horizon and all encountered oil or gas and condensate: Spark No. 1 and Spark No. 1A; Moose Tooth C; Lookout No. 1; and Rendezvous A and Rendezvous No. 2.
BLM said in an environmental assessment of the Altamura prospect, drilled in the winter of 2001-02, that the purpose was to delineate the potential southern extension of the oil and gas formation discovered on nearby leases. Altamura is some four miles south of the Rendezvous discovery.
Five possible participating areas are blocked out in Mooses Tooth: Lookout in the northeast corner of the unit and closest to the Colville River unit; Mitre west of Lookout; Pioneer at the southern end of the unit; and two large participating areas, Spark and Rendezvous.
Spark runs from the middle of the eastern edge of the unit diagonally to the northwest edge. Rendezvous starts west of the Pioneer PA and runs to the western edge of the unit.
Initial development well within 24 months The operator has 24 months to drill and test an initial development obligation well in section 21, township 10 north, range 2 east, Umiat Meridian, to evaluate the Upper Jurassic sandstone.
ConocoPhillips got permit approval for the Spark DD-9 at that location Feb. 1.
Unitized substances must meet the productivity criteria specified in the agreement: at least 10 feet of net sand true vertical depth; porosities greater than or equal to 12 percent and water saturations less than 50 percent; a valid production test showing initial production rates greater than 115 stock tank barrels of oil per day or 470,000 standard cubic feet per day. For a horizontal wellbore, at least 2,000 feet of net sand section is required.
“Oil and gas subsequently discovered in any intervals other than the Upper Jurassic sandstone interval would require a modification” of the unit agreement to include productivity criteria for the additional intervals, BLM said.
The unit agreement says that if the initial development obligation well does not meet the productivity criteria the unit operator “shall continue drilling, testing or sidetracking to the primary target one or more well(s) at a time, allowing not more than two years between the completion of operations for one well and the commencement of drilling, testing or sidetracking operations for the next well, until a well meeting the productivity criteria is completed” to the agency’s satisfaction or it is demonstrated that further drilling is unwarranted or impracticable.
In lieu of the initial development obligation well, ConocoPhillips may test the Rendezvous No. 2 in section 6-T9N-R2E, UM, previously drilled but not tested to the primary target.
Continuing development obligations Continuing development obligations include, “at a minimum,” three exploratory and/or appraisal wells within the unit following the initial development obligations.
A plan must be submitted within 90 days of meeting the initial development obligations, including evaluation, describing how continuing development obligations will be accomplished. Subsequent annual plans will be due by Oct. 1 of each year.
The operator has 90 days after BLM’s approval of the continuing development obligations plan to certify to BLM and ASRC that operations to meet the plan have begun.
Upon completion of initial development obligations but no later than six months prior to sustained production, the unit operator will submit the proposed initial participating area application. Where ASRC lands are included in the proposed PA, ASRC’s “reasonable consent” will be obtained by the operator prior to submitting the proposal to BLM.
A different PA will be established for each separate reservoir.
Ten years to participating areas All legal subdivisions of land — 40 acres by government survey or its nearest lot or tract equivalent — not in a participating area on or before the 10th anniversary of the effective date of the first initial PA established under the unit agreement will be automatically eliminated unless “diligent drilling operations” are in progress on unitized lands not in a PA or the unit operator has been granted an extension. Legal subdivisions not entitled to be in a PA within 15 years after the effective date of the initial PA approved under the unit agreement will be automatically eliminated from the unit.
Unitized lands “reasonably proved productive of unitized substances in paying quantities by diligent drilling operations” after the 10-year period are entitled to be in a PA; when diligent drilling operations cease, all non-PA lands not entitled to be in a PA are automatically eliminated.
Allocation of production When a PA includes only federal lands, production will be allocated on the basis of surface acreage as long as the parties owning the initial working and royalty interest for each unit tract remain the same and the unit is not expanded to include lands owned by parties other than the original parties, unless “fewer than all lands within the PA are subject to an escrow in favor of ASRC administered under Section 1411 of the Alaska National Interest Lands Conservation Act.
If a proposed PA includes ASRC lands or an existing PA is expanded to include ASRC lands, the unit operator will propose an allocation methodology based on reservoir properties that will be based on reservoir heterogeneity and variation in producibility across diverse leasehold interests.
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