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Providing coverage of Alaska and northern Canada's oil and gas industry
May 2008

Vol. 13, No. 19 Week of May 11, 2008

Future uncertain

Anadarko finds ‘no commercial hydrocarbons’ at Jacob’s Ladder well

Eric Lidji

Petroleum News

After reviewing logs and finding “no commercial hydrocarbons,” Anadarko Petroleum plugged its Jacob’s Ladder well this winter, according to a first quarter operations report released on May 6.

The oil prospect sits 10 miles southeast of Prudhoe Bay on Alaska’s eastern North Slope and for years geologists have considered the unique structure of Jacob’s Ladder to be a sign of potentially large reserves.

But with the disappointing news, Anadarko and its partners of the project now plan to use the rest of spring to decide the future of Jacob’s Ladder.

“We’re having meetings trying to decide what we’re doing next year,” said company spokesman Mark Hanley.

Unique geography piqued interest

The interest in Jacob’s Ladder stems from the Wahoo formation of the Lisburne Group, a prospect believed to hold between 20 million and 660 million barrels of oil equivalent.

While knowledge of the Lisburne field dates back to the discovery of Prudhoe Bay, the geology at Jacob’s Ladder piqued some interest because of the presence of Karst topography, a type of terrain where near-surface limestone gets eroded by water to form extensive underground caves.

These caves can be excellent for trapping oil and gas, as proven by the similar features within the Yates field in west Texas, one of the most prolific reservoirs in the epic Permian Basin.

The state recognized this back in 2005 upon formation of the Jacob’s Ladder unit, saying a drilling program would help evaluate “a previously unrecognized play type on the North Slope of Alaska.”

At that time, Anadarko publicly spoke of its strategy to “anchor” its operations in Alaska in large oil and gas accumulations.

Jacob’s Ladder also includes a prospect in the Ivishak formation of the Sadlerochit structure that could possibly hold between 50 million and 800 million boe.

On top of those estimated reserves, the field sits just east of the trans-Alaska oil pipeline and the production facilities of Prudhoe Bay, closer to infrastructure than some of the company’s other prospects across northern Alaska.

Anadarko maintains a 50 percent interest in Jacob’s Ladder, with the remaining 50 percent shared by BG Group (40 percent) and the Arctic Slope Regional Corp. (10 percent).

After bringing on those partners in 2006, Anadarko began drilling the Jacob’s Ladder exploration well last year, but didn’t finish by the end of the season and returned this year with a newly winterized Akita 63 rig.

The company started drilling in February and achieved a total depth of 14,416 feet.

The Akita 63 rig is now headed to Canada, after a brief stint in Deadhorse.





Anadarko plans return for foothills gas

Anadarko is planning its strategy for returning to gas prospects on the western North Slope near the edge of the National Petroleum Reserve-Alaska.

The company drilled two wells, Gubik No. 3 and Chandler No. 1, in the foothills of the Brooks Range this winter as part of a two- or three-year program to prove up gas accumulations discovered back in the early 1950s by the U.S. Navy and the U.S. Geological Survey, and to test deeper formations.

The drilling program was the first to deliberately target gas in northern Alaska.

Anadarko said it “encountered natural gas in two zones” at the Gubik No. 3 well just east of the Colville River, northeast of the village of Umiat.

Anadarko suspended the Chandler No. 1 well just to the south, and left the Nabors rig 105 at the ice pad. Spokesman Mark Hanley said the expectation is to return next year to finish the deep gas well.

Other plans for next year could include one or more of the five other wells proposed at Gubik. Anadarko’s partners in the Brooks Range Foothills are BG Group and PetroCanada.

By announcing a gas exploration program in the foothills, Anadarko expressed some faith in the ongoing process to build a large-diameter natural gas pipeline from Alaska’s North Slope to markets outside the state.

Since starting the drilling program, however, the options for Gubik gas have increased as Enstar Natural Gas recently renewed discussions of a $3.3 billion bullet line from Gubik to Southcentral Alaska.

$31 million spent in Alaska this year

In addition to its majority-owned prospects, Anadarko also maintains a minority position in the ConocoPhillips-operated Colville River unit.

In first-quarter filings, Anadarko said gross production at Colville River was around 110,000 barrels of oil per day.

Work there this winter included “several” development wells in the Fiord area using a rig eventually headed for work at Qannik in the later part of the year.

“In addition, construction continues for various modules in connection with the Qannik development at CD2 with initial production from this reservoir anticipated to begin in late 2008,” the filings said.

Anadarko and ConocoPhillips also brought a rig to the Nanuq area at the end of the quarter “to drill and complete up to two development wells.”

Anadarko spent $31 million in capital expenses in Alaska in the first quarter of the year. Companywide, the mega-independent has spent $1.056 billion in capital expense so far this year.

— Eric Lidji


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