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

Vol. 14, No. 24 Week of June 14, 2009

Pioneer plans four laterals at Oooguruk

Production has been from Kuparuk formation; two fracture-stimulated producers, two injectors planned for Nuiqsut formation

By Kristen Nelson

Petroleum News

Initial results from a Nuiqsut formation well at the Pioneer Natural Resources Oooguruk project are encouraging.

Pioneer said in a June 9 release that it plans to drill four horizontal laterals in the Nuiqsut formation in the second and third quarters of the year. Two of the planned Nuiqsut laterals will be fracture-stimulated production wells and two will be water injection wells.

The first water injection well is completed and being produced temporarily to measure the unstimulated productive capability of the Nuiqsut formation. The initial test rate was 2,500 barrels per day; the well was put on production at a stabilized production rate of 1,000 bpd, the company said.

Oooguruk is being developed from a manmade gravel island drill site some six miles offshore in Harrison Bay off Alaska’s North Slope, with crude oil moving to shore via a subsea flow line and then on to Kuparuk River unit processing facilities.

Pioneer began production from the Kuparuk formation at Oooguruk in June 2008 and through the end of April production figures from the Alaska Oil and Gas Conservation Commission — the most current available — show cumulative production from the Kuparuk formation of 1,343,976 barrels and cumulative production from the Nuiqsut formation of 25,592 barrels, with the only two producing completions as of the end of April in the Kuparuk formation.

Reevaluation this year

“The initial results from this Nuiqsut well are very encouraging, with initial production exceeding our expectations,” Pioneer Chairman and Chief Executive Officer Scott Sheffield said in the June 9 statement.

He said the company’s net production from Oooguruk (Pioneer has a 70 percent working interest; Eni Petroleum US LLC holds the remaining 30 percent interest) was forecast to average 5,000 bpd this year and to increase to 10,000 to 14,000 bpd in 2011 as development drilling continues.

“Later this year, we will reevaluate our production profile to incorporate higher than expected performance from our Kuparuk wells, early waterflood results and the performance of our planned fracture-stimulated Nuiqsut wells,” Sheffield said.

After Pioneer began producing from Oooguruk last year production had to be suspended because of maintenance work at a Kuparuk River unit facility used by Pioneer, which does not have its own processing facilities but has an arrangement to process its crude oil through the ConocoPhillips Alaska-operated Kuparuk River unit.

Water difficulties

Pioneer had to scale back production at Oooguruk earlier this year because of delays in getting injection water from Kuparuk due to maintenance on the line scheduled to deliver water to Pioneer. The water supply was expected to be available within the month, but meanwhile Pioneer got approval from AOGCC to use sources of water in addition to those approved in 2008.

Pioneer told AOGCC “that delaying water injection will adversely impact reservoir pressure and the producing gas-oil ratio and this could reduce the near- and long-term recovery of hydrocarbons” from the two oil pools at the offshore unit.

At the beginning of the year Pioneer increased its estimate of the Oooguruk resource, based on six months of production and a recent 3-D seismic shoot which suggested additional opportunities were reachable from the existing island or from nearby shore acreage.

Pioneer had estimated the potential at Oooguruk to be between 70 million and 90 million barrels of oil equivalent; that estimate was raised in early February to between 120 million and 150 million boe.






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