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November 2009

Vol. 14, No. 47 Week of November 22, 2009

Cosmo change OK

DOG approves well workover and new schedule for appraisal well drilling

Alan Bailey

Petroleum News

On Nov. 10 the Alaska Division of Oil and Gas approved Pioneer Natural Resources’ proposed changes to the fourth plan of exploration for the joint state-federal Cosmopolitan unit, offshore the southern Kenai Peninsula near Anchor Point. The unit contains a known oil pool, estimated at 30 million to 50 million barrels, which Pioneer hopes to develop, with the produced oil probably being trucked north to Tesoro’s refinery at Nikiski. The approved plan changes include a workover of the Hansen 1A-L1 appraisal well and a delay in the drilling of another Cosmopolitan appraisal well.

In 2007 Pioneer drilled the Hansen 1A-L1 well as a sidetrack to an earlier Hansen well, and had planned to drill another appraisal well in 2009. But in response to the downturn of the U.S. economy in 2008 Pioneer made drastic cuts to its drilling program in the Lower 48 before deciding in late 2008 to defer the drilling of that second Cosmopolitan well.

Following a rebound in oil prices, the company’s drilling program is starting to move ahead again. And, as reported in the Oct. 25 issue of Petroleum News, the company is about to start a workover of the Hansen 1A-L1 well, using Rowan rig 68.

“The well workover work that we have planned should start here shortly,” Tadd Owens, Pioneer’s director of government and public affairs, told Petroleum News Nov. 10. The workover should be completed and the rig demobilized by the end of the year, with testing of the well taking place in January, Owens said.

Move ball forward

Pioneer staff working on the Cosmopolitan project think that the workover will “help us keep moving the ball forward and hopefully get to a full development,” Owens said. But Pioneer does not anticipate drilling another Cosmopolitan appraisal well before the end of 2010, he said.

Pioneer has said in the past that it wants to drill another appraisal well and complete some engineering design work before making a development decision for Cosmopolitan.

In its approval of the changes to the plan of exploration for Cosmopolitan, the Division of Oil and Gas said that Pioneer has met its 2009 obligations to start filing permit applications for the installation of production facilities, start a “commercial front-end engineering design” for those facilities and report on its activities to the division.

On or before Feb. 1, 2010, Pioneer will commence drilling a workover on the Hansen 1A-L1 well for well diagnostics and to enhance an evaluation of the Cosmopolitan reservoir, the division said, in reference to the workover that Pioneer is about to start. On or before Nov. 15, 2010, Pioneer will commit in writing to the division and the U.S. Minerals Management Service to drill an additional appraisal well to further delineate the Cosmopolitan unit either north or south of the existing Hansen wells: The drilling of the new well must commence on or before April 30, 2012, the division said.





Oooguruk field continues to perform well

Pioneer Natural Resources’ Oooguruk field in state Beaufort Sea waters, offshore Alaska’s North Slope, continues to perform well, said Timothy Dove, the company’s president and chief operating officer, during an investor conference call on Nov. 4. The field is producing oil at around 6,000 barrels per day, he said.

Oooguruk production will probably increase by about 10 percent between the fourth quarter of 2009 and the fourth quarter of 2010, said Scott Sheffield, chairman and chief executive officer.

During the summer Pioneer successfully completed the drilling of five horizontal wells — three producers and two injectors — in the Nuiqsut, the deeper of the two Oooguruk reservoir horizons, Dove said. And currently the company is waiting for the winter freeze up before embarking on a drilling campaign in the deeper Kuparuk horizon, he said.

In early 2010, Pioneer expects to initiate a project to provide an independent source of water for injecting into the Oooguruk reservoir, said Richard Dealy, Pioneer executive vice president and chief financial officer. Oooguruk currently obtains water from the nearby Kuparuk River unit, operated by ConocoPhillips, but in early 2009 that water supply went off line for several weeks while ConocoPhillips conducted repair work on the water line.

Pioneer currently estimates that Oooguruk should produce between 120 million and 150 million barrels of oil.

—Alan Bailey


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