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February 2008

Vol. 13, No. 5 Week of February 03, 2008

ANS exploration gets late start

Brooks Range Petroleum re-drill is only well spud to date, but several companies hope to start drilling in next few days

Eric Lidji

Petroleum News

At the halfway point of one of the busiest winter exploration seasons in recent years, only one of the eight companies planning North Slope wells have actually spud.

But the week of Feb. 3-9 could be a busy one.

The 2007-08 winter drilling season promised from the start to be one full of interesting stories, as a number of small independent companies announced plans to explore the North Slope; a large independent set out on a landmark search for gas and two major companies moved in new directions.

So far, though, only Brooks Range Petroleum Corp. Group has spud an exploration well on the North Slope this year, but Chevron, ConocoPhillips and Anadarko hope to join the ranks within the next week.

Meanwhile, smaller companies like Renaissance Umiat, Savant Alaska and Alaskan Crude are setting their sights on February or March for spudding exploration wells, while UltraStar has found itself struggling to keep its exploration project viable.

BRPC group gearing up for Tofkat

The companies comprising BRPC Group set out an ambitious exploration schedule this year, and have so far progressed further than any of the other independent companies working on the North Slope this winter.

Using Nabors rig 27E, Brooks Range Petroleum Corp. re-entered the North Shore No. 1 well on Jan. 10, continuing a project the company started last winter, but suspended when it couldn’t complete work before the end of the drilling season.

This year, Brooks Range Petroleum sidetracked the original well and re-drilled the final 1,000 feet into the Ivishak formation.

“The pipe has been set, completion will happen in the next few days, and we will move on to our Tofkat location near the village of Nuiqsut,” said Hillary McIntosh, manager of business development and external affairs for Brooks Range Petroleum, in an e-mail to Petroleum News.

On Jan. 18, Brooks Range Petroleum received a drilling permit from the Alaska Oil and Gas Conservation Commission for Tofkat No. 1.

McIntosh said the projected move date for the rig is Feb. 2.

Seismic crews working for Brooks Range Petroleum began shooting on Jan. 18 on the western side of the Central North Slope. The company originally intended to shoot in the eastern side of the Central North Slope, but tundra closures forced the switch.

“Right now we have no plans to go east, but the situation is fluid,” McIntosh wrote.

BRPC, a wholly owned subsidiary of the Alaska Venture Capital Group, is running the winter exploration program on behalf of a joint venture with TG World Energy Inc., the Nabors-subsidiary Ramshorn Investments Inc. and Bow Valley Alaska Corp.

Chevron almost ready to spud Smilodon 9-4-9

Chevron hoped to spud the Smilodon 9-4-9 well in the White Hills prospect on Jan. 29, according to Roxanne Sinz, manager of public relations and communications for Chevron in Alaska, but as of Jan. 31 had not drilled a well in the area yet.

Returning to the North Slope after 15 years focused on the Cook Inlet, Chevron set out this winter on a two-year, eight-well exploration program in the White Hills, on prospects picked up during the acquisition of the Union Oil Company of California, or Unocal, in 2005.

Chevron will drill Smilodon 9-4-9 using Nabors rig 106, which arrived in the area on Jan. 11.

Smilodon 9-4-9 stands for Section 9, Township 4 North, Range 9 East, the location of the well in the Umiat Meridian. The White Hills prospect sits in the foothills of the Brooks Range, connected by snow trails to the Dalton Highway about 34 miles to the east.

Chevron plans to upgrade to ice roads and trails as the season progresses, Sinz said.

“The well site pads are in place or being prepared as appropriate for the activity planned,” Sinz wrote Petroleum News in an e-mail on Jan. 29. “There is a landing facility that has been constructed for the operation that is under way.”

Chevron will not identify the target of the White Hills exploration program.

Chevron hopes to drill three wells this winter and four or five additional wells next winter, Sinz said. The proposed well sites stretch out to the north and south of Smilodon.

On Dec. 10, the AOGCC issued a drilling permit to Unocal for the Smilodon 9-4-9 well, but as of Jan. 31 had not issued any other drilling permits for the White Hills.

Chevron named all of the proposed wells in the White Hills prospect after prehistoric animals; the smilodon was a type of saber-tooth tiger.

ConocoPhillips plans to spud Char and Spark “within the next week or so”

ConocoPhillips also believes it’s close to spudding two exploration wells and re-entering a test well on the North Slope, according to Jim Bowles, president of the company’s Alaska operations.

“We will be drilling two exploratory wells, the Char and the Spark,” Bowles said at the Meet Alaska conference on Jan. 25. “Those hopefully will spud sometime within the next week or so.”

As of Jan. 29, ConocoPhillips was still constructing an ice road and had not spud any wells.

Last winter, ConocoPhillips explored far-flung prospects located far from the existing Kuparuk unit infrastructure. Bowles called that program “not necessarily successful,” and said, as a result, ConocoPhillips decided to focus on developing “satellite fields that we build out from core infrastructure.”

Part of that core infrastructure is Alpine, which is the nexus of ConocoPhillips’ exploration activities this winter.

Char No. 1 will be located in the Colville River unit, 12 miles north of the village of Nuiqsut and north of Alpine. The Kuukpik Corp. owns the surface land, while the subsurface rights belong to the State of Alaska and the Arctic Slope Regional Corp.

Char No. 1 is part of a larger, multi-year exploration program in the area.

ConocoPhillips got a drilling permit for Char No. 1 from AOGCC on Jan. 25.

The Spark Down Dip No. 9 well is some 15 miles west of Alpine, southeast of Teshekpuk Lake in the northeast planning area of the National Petroleum Reserve-Alaska. ConocoPhillips first permitted the well last year.

ConocoPhillips also plans to re-enter and test the Rendezvous No. 2 well, four miles due west of Spark DD9. Bowles said ConocoPhillips originally drilled Rendezvous back in 2001.

Bowles said ConocoPhillips is still working with the U.S. Army Corps of Engineers and the Village of Nuiqsut to get a permit for CD-5, the “Alpine West” satellite.

“We do plan to stay active,” Bowles said.

Anadarko gas wells “roughly on schedule”

As state lawmakers ponder gas pipeline proposals, Anadarko Petroleum is exploring specifically for natural gas to fill that hypothetical pipeline.

Along with partners BG Alaska and Petro-Canada, the Houston-based independent still plans to drill natural gas wells this winter from two pads in the foothills of the Brooks Range, but as of Jan. 28 has yet to spud on either.

Spokesman Mark Hanley said the company is “roughly on schedule” for its winter drilling program.

“We’re hoping within the next week that they’ll both spud,” Hanley said.

Using the Nabors rig 105, Anadarko plans to drill the 5,000-foot Gubik No. 3 and the 12,500-foot Chandler No. 1 on Arctic Slope Regional Corp. lands at the western edge of the foothills near the boundary of NPR-A.

Anadarko got a drilling permit for Gubik No. 3 from AOGCC on Jan. 25.

Anadarko hopes to finish building ice roads to those prospects within the next week, but has been able to mobilize most of the equipment necessary for the project using Rolligons and snow trails, Hanley said.

Concurrent to the search for gas, Anadarko is continuing its search for oil this winter at the Jacob’s Ladder prospect southeast of Prudhoe Bay on the other side of the Dalton Highway. The company started drilling Jacob’s Ladder last winter, and will re-enter it using the newly winterized Akita 63 rig.

Despite strange weather, Savant looks to spud in February

Weather swings on the North Slope kept Savant Alaska LLC from getting started on Kupcake No. 1, but the company believes it should get back on schedule in February.

“We’re expecting to spud at the end of the month,” said Erik Opstad, general manager of Savant Alaska.

Currently, Savant crews are building ice roads and an ice island out to the well site, about six miles east of the Endicott satellite drilling island in the Beaufort Sea. The company lost some time in January to weather delays, Opstad said.

“Weather has not been a friend to anybody operating on the slope this winter,” Opstad said. “It’s either been surprisingly warm or too cold.”

Savant has already secured the Kuukpik No. 5 drilling rig for the well, but still needs a drilling permit from AOGCC, which Opstad said should be coming any day.

Savant recently closed a deal with Bordeaux Energy Inc., a Canadian oil and gas company, to partner on Kupcake.

Paperwork in order for Renaissance

Renaissance Umiat LLC, the company created to explore the Umiat oil field on the eastern border of NPR-A, still has not drilled a well this winter.

But the company has its paperwork in order.

On Jan. 7, Renaissance received a permit from AOGCC to drill Umiat No. 14. Company executive Mark Landt told Petroleum News on Jan. 31 that the company also has its C-plan in order and hopes to get started on the project soon.

Renaissance has previously announced plans to permit 10 wells for Umiat and drill seven or eight this winter.

UltraStar still reassessing Dewline Deep

UltraStar Petroleum lost some momentum on its Dewline Deep prospect in the past few months after BP pulled back from a plan to operate the well.

Jim Weeks, managing member of UltraStar and its sister company Winstar Petroleum, told Petroleum News on Jan. 9 that revisions to the production tax implemented by state lawmakers in November 2007 created uncertainty for his project west of Point McIntyre.

UltraStar hopes to work out an investment deal with the Alaska Venture Capital Group, but as of Jan. 31, Weeks said nothing has been finalized.

“We’re continuing to pursue our options,” Weeks said. “We haven’t inked anything.”

Weeks said he still holds out hope of drilling this winter, but it depends on signing agreements with BP and Brooks Range Petroleum Corp, and fitting into Brooks Range Petroleum’s busy schedule.

Weeks didn’t hold out much hope of clarifying his tax uncertainties during the legislative session currently under way.

Weeks said he planned to form a new company, Dewline Petroleum LLC, to drill the project. As of Jan. 31, that company was not listed in the state of Alaska corporation database.

Alaskan Crude still hoping for two re-drills this winter

San Antonio-based Alaskan Crude still hopes to re-enter two long-suspended wells this winter, but as of Jan. 31 had not started drilling on either.

President Jim White said the company plans to start with the Amarex well on the Kenai Peninsula and move his rig north to re-drill the Burglin No. 33-1 well on the North Slope.






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