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September 2010

Vol. 15, No. 38 Week of September 19, 2010

Final Orion expansion OK granted by state

Kristen Nelson

Petroleum News

The Alaska Division of Oil and Gas has issued a final approval of the first expansion of the Orion participating area in the Prudhoe Bay unit.

In a Sept. 13 decision, division Director Kevin Banks said Prudhoe Bay operator BP Exploration (Alaska) Inc. requested final approval June 17 on behalf of itself and other working interest owners Chevron U.S.A., ConocoPhillips Alaska and ExxonMobil Alaska Production.

The Orion participating area expansion adds lease ADL 390067, some 1,000 acres, to the PA.

Expansion approval required that a well be spud within ADL 390067; that well was spudded Oct. 1, 2009, and completed Oct. 27, 2009.

The division said there was initially insufficient data to establish whether the acreage was capable of producing or contributing to production of hydrocarbons in paying quantities, so it deferred a decision on PA expansion until all data from the proposed L-223i well was submitted to the division.

One well in expansion area

In its June 17 request for final approval, BP said it had fulfilled drilling and data submittal commitments. The division said injector well L-223i is the only well in the proposed expansion area, and will support oil production from proposed hexa-lateral well L-203 which will be drilled to four Schrader Bluff sands, “capturing moveable hydrocarbons outside of the existing Orion PA.”

The division approved the 2010 plan of development for PBU western satellites in November. Activity proposed for Orion included drilling the L-203 hexa-lateral producer; completing a production capacity expansion on the L pad to accommodate well L-203, completing installation of a continuous methanol injection system on L-pad to improve uptime on wells with hydrate problems and installing multiphase meters on the L and V pads.

Extension of Niakuk contraction

In a separate Sept. 13 action, the division agreed to a request from BP for an extension of the contraction date for the combined Niakuk participating area.

Combination of the Niakuk and West Niakuk participating areas into the combined Niakuk PA was approved in late 2007 contingent on drilling, testing and certification of a well penetrating the Kuparuk River sandstone within a specified area of lease ADL 34626 by Jan. 1, 2011.

The division said the contraction is administrative only and does not affect the Prudhoe Bay unit boundary or the expiration of ADL 34626, as a significant portion of the lease is within the Prudhoe Bay unit and is held by production.

BP requested that the well obligations and contraction date be extended to June 30, 2014, consistent with the date set for three other leases recently added to the Prudhoe Bay unit.

Banks said in extending the date that a common contraction date would allow the working interest owners to prioritize and schedule drilling from the seasonally constrained Niakuk pad to fulfill obligations on each of the leases.






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