Providing coverage of Alaska and northern Canada's oil and gas industry
January 2018

Vol. 23, No. 2 Week of January 14, 2018

Exploration underway

Armstrong defers Pikka 2 wells, other operators drilling up to 10 wells

Kay Cashman

Petroleum News

The first exploration well has been spud and ice road construction is underway for as many as nine additional penetrations on Alaska’s North Slope. Warmer-than-usual weather has prevented access to the tundra until recently.

Two wells planned for this winter’s North Slope exploration drilling season were postponed until next winter by Armstrong Energy - the Pikka 2 and Pikka 2A sidetrack.

Last winter ConocoPhillips, which is drilling as many as seven penetrations this year, cancelled its Putu 1 drilling program after meeting with leaders from the village of Nuiqsut. The company decided that due to delays in Alaska Department of Natural Resources permitting they “would not have adequate time to engage with the local community as part of the standard local permitting process,” a ConocoPhillips spokesperson told Petroleum News. Postponing the exploration program allowed the company to work with the local community of Nuiqsut and “to address their concerns over drilling within three miles.”

In the interim ConocoPhillips “actively engaged the Nuiqsut community ahead of the exploration season to ensure that the Putu drilling project is well understood, and questions from the community are addressed,” a company spokesperson told Petroleum News Jan. 9. “With that in mind, we have developed a robust mitigation plan related to the drilling program (see sidebar to this story for details).

Armstrong on track for development

Armstrong has an information sharing agreement with ConocoPhillips for Putu, a short distance from Pikka 2, and according to a company official continues to move ahead with its plans for the Nanushuk development in the Pikka unit.

The Pikka 2 and 2A well locations are in the southern tip of the Pikka unit, immediately north of the Pikka No. 1 well that Armstrong cancelled last year at the request of the village. The purpose of the delineation program was to obtain more subsurface information about the southern half of the proposed Nanushuk development area, which has been explored less than the northern half. (See more about Armstrong and partner Oil Search in this edition’s page 1 Oil Patch Insider.)

Company-by-company drilling plans

Following is the status of the seven to 10 exploration wells (including three possible sidetracks) being drilled on the North Slope this winter:

* ConocoPhillips (5-7 wells, 3 rigs)

With ice road construction underway, the major says it is drilling five exploration wells this winter, with a potential of seven separate bottomhole targets that include sidetracks.

Doyon Rig 141 is being used for drilling ConocoPhillips Alaska’s Willow wells (three penetrations), Arctic Fox will be at Stony Hill (two penetrations) and Kuukpik 5 is being used at Putu 2 (two penetrations). All but the Putu 2 well and possible sidetrack are in the National Petroleum Reserve-Alaska.

The Stony Hill prospect, a Willow lookalike which holds some 300 million barrels of recoverable oil in the Nanushuk formation, is almost directly across the Colville River in NPR-A from Armstrong’s successful 2017 wildcat, Horseshoe, which was drilled on state land.

ConocoPhillips is also conducting a 250 square mile, 3-D seismic program on the state acreage they picked up in the December 2016 lease sale.

* Eni (1-2 wells, 1 rig)

Eni US Operating Co. spud its Nikaitchuq North 1 well on Beaufort Sea outer continental shelf leases in late December. The federal Bureau of Safety and Environmental Enforcement said in a Dec. 27 statement that its inspectors were on site Dec. 25 and that the well had been spud.

Whitney Grande, Eni U.S. vice president, environment and quality, said Nov. 15 that Eni was making modifications to the Doyon Rig 15 that the company uses in its Nikaitchuq field to enable the rig to conduct the exceptionally long extended reach wells from Spy Island needed for the exploration well.

The Alaska Oil and Gas Conservation Commission drilling permit issued Dec. 8 covers the directional exploration well heading north and involving four state leases - ADL 388571, ADL 388574, ADL 388583 and ADL 391283 - plus the federally managed waters of the Arctic outer continental shelf. The federal Nikaitchuq North leases lie in the Harrison Bay Block 6423 to the north.

The 35,000-foot extended-reach well being drilled from the existing drill site on Spy Island is expected to take between 70 and 80 days to drill.

The results of the Nikaitchuq North No. 1 well will determine whether Eni proceeds with a sidetrack this winter and a second well next winter, according to company officials.

The Nikaitchuq North prospect lies immediately north of the state leases in Eni’s producing Nikaitchuq field, offshore the central North Slope, and west of Prudhoe Bay.

* Glacier/Savant (1 well, 1 rig)

Glacier Oil & Gas (Savant) plans to drill the Starfish exploration well on undeveloped leases near the Badami field, exploring a formation behind a fault block that hasn’t been drilled before, and using Nabors Rig 27E. (That’s the same rig ExxonMobil used at Point Thompson.)

Glacier is waiting on its final drilling permit and building a 27-mile ice road from the Endicott road to the Badami pad in support of Starfish drilling, the company’s new drilling manager, Steven Ratcliff, told Petroleum News Jan. 8. (Conrad Perry has left to re-open his consulting firm, The Perry Group.)

On Feb. 1, the company plans to move 27E onto the ice road.

This year’s North Slope winter exploration drilling season is the busiest since 2014. ConocoPhillips Alaska President Joe Marushack said Oct. 12 this winter will be the biggest exploration drilling program that ConocoPhillips, formerly Alaska’s top explorer, has conducted on the North Slope since 2002.

- KAY CASHMAN, publisher

Putu 2 mitigation

Per the Putu 2 drilling program this winter on the North Slope outlined in this issue’s page 1 exploration story, operator ConocoPhillips Alaska has actively engaged the village of Nuiqsut ahead of the winter exploration season to ensure that the Putu project was well understood and questions from the community were addressed.

As a result of this process, ConocoPhillips has developed a “robust mitigation plan related to the drilling program,” a company spokesperson told Petroleum News Jan. 9 and Kuukpik Corp. official Lanston Chinn confirmed. (Established in 1973 as an Alaska Native village corporation, Kuukpik is the village corporation for Nuiqsut.)

ConocoPhillips’ new well location is farther from Nuiqsut than the Putu 1 well planned and then cancelled early in 2017 — 2.5 miles from the village versus 3.5 miles.

The new Putu drilling program will have a single surface location with two subsurface targets (one primary well and one sidetrack well.)

Mitigation measures include, but are not limited to, the following:

* The rig will run off electrical power which will be generated about one mile away from the drilling location (and farther from the village) using state of the art, low emission generators.

* Numerous light and noise mitigation measures are being implemented.

* Air, water and noise monitoring has been expanded.

—KAY CASHMAN, publisher

Note: Learn more details in subsequent January editions of Petroleum News.

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