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Colville River unit contraction delayed ConocoPhillips must drill on southeastern corner of unit to test Alpine sands by Jan. 1, 2011; company completing 3-D, 4-D seismic Kristen Nelson Petroleum News
ConocoPhillips Alaska has until Jan. 1, 2011, to beginning drilling to test the Alpine sands in the southeastern portion of the Colville River unit or some 18,050 acres will contract out of the unit.
Kevin Banks, director of the Alaska Department of Natural Resources’ Division of Oil and Gas, said in an April 28 letter to ConocoPhillips that the company, which is the operator for the Colville River unit, requested a delay in the contraction of some 18,050 acres along the eastern boundary of the unit.
Banks said that under state regulations, contraction of the unit is possible 10 years after commencement of sustained production from the initial participating area. Sustained production began from the IPA at Alpine Nov. 15, 2000. The 10th anniversary of approval of the IPA, May 1, 2010, is the trigger date for contraction in the unit agreement.
Well required Banks said he has approved a delay in contraction effective April 30, based on five conditions:
• ConocoPhillips will begin drilling by Jan. 1, 2011, to test the Alpine sands in the delayed contraction area;
• Certain leases in the delay area will be segregated effective April 30;
• If no well is drilled by Jan. 1, 2011, all of the 18,045 acres in the “delay area” will contract out of the unit;
• If drilling begins by Jan. 1, any of the delay area not included in a participating area on Feb. 15, 2014, will contract out of the unit; and
• ConocoPhillips is to provide a detailed progress report on all seismic operations conducted in the unit in December.
Seismic program under way Banks said ConocoPhillips is completing an Alpine 3-D and 4-D seismic program which covers the majority of the delay area except portions already covered by previous surveys. The initial Colville River unit 3-D seismic was acquired in 1996 and the new seismic will improve the initial seismic “by improving the resolution and consequently increasing the geologic understanding of the Alpine sands.” The seismic will provide 4-D “insights on fluid saturation and pressure changes over time, enabling ConocoPhillips to identify infill drilling opportunities,” Banks said.
Completion of processing and analysis of the new seismic is expected next year.
Confidential data submitted in support of the request demonstrates that the delay area Alpine C sands are not isolated from the Alpine reservoir underlying the existing Alpine participating area, Banks said.
The contraction delay is until Feb. 15, 2014, the cutoff deadline for the 2014 Alpine participating area redetermination.
He said any leases in the delay area proposed for inclusion in the Alpine or other Colville River unit participating areas must have been drilled and evaluated prior to the contraction date of Feb. 15, 2014.
The proposed lease segregation benefits the state “because upon contraction any lease no portion of which is committed to a participating area will contract in its entirety from the unit,” Banks said. Without segregation of the leases, a portion of a lease included in a participating area would extend the entire lease. With existing leases segregated into smaller leases, less acreage will be held by inclusion of a portion of a lease in a participating area.
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