|
Renaissance puts Umiat drilling on hold Later than usual tundra travel opening, funding challenges delay appraisal program at NPR-A oil field, but seismic shoot under way Kay Cashman Petroleum News
Renaissance Umiat, LLC executive Mark Landt told Petroleum News Feb. 11 that the independent has deferred its plans to drill seven or eight wells on its two leases this winter in the National Petroleum Reserve-Alaska’s undeveloped Umiat oil field, which straddles the eastern border of NPR-A on the northern edge of the Brooks Range Foothills.
“We elected to defer drilling until next winter due to a combination of factors including a shortened drilling season related to the late tundra travel in the Lower Foothills which means we would have to cut back on the number of wells and the amount of data we could collect this season,” Landt told Petroleum News. “The funding was in-place to drill the reduced program, but the decision was made to follow a lower-risk approach.”
Landt said the high fixed costs in the drilling program and “the knowledge that the 3-D would provide a firmer basis to delineate the existing reservoir, coupled with the company’s intent to explore deeper objectives next year lead to the decision.”
The company is having PGS Onshore shoot 115 square miles of 2-D and 3-D seismic over its leases, as planned.
“The surveyors are on the ground now,” Landt said.
The ‘silver lining’ “There’s a silver lining” to the news, he said. “The seven-well program was approved for a shallow zone in the field. There are deeper anomalies based on reprocessed 2-D that was driving an additional drill season. The 3-D will help us select drilling targets for it, as well as tell us more about the shallow zone. Delaying drilling one year, shooting the seismic first, means we will be able to optimize the shallow well program, as well as drill the deeper zone.”
The company will be able to spread the fixed mobilization costs over more wells and capture the key value drivers in one drilling season, Landt said.
“The prize has not gone away,” Landt said, referring to the 70 million to 100 million barrels of recoverable crude the Umiat field is expected to hold, per the U.S. Geological Survey.
Discovered in 1946 by the U.S. Navy, Umiat was never developed because of its remoteness from infrastructure, historically low oil prices and the lack of technology to unlock its shallow oil. (The reservoir is between 200 and 1,400 feet in depth, with a portion of the oil in permafrost.)
But modern technology, record high oil prices and increasingly closer infrastructure has made Umiat a desirable asset for a small independent such as Renaissance, which was formed by Renaissance Alaska, Rutter and Wilbanks and Arctic Falcon to evaluate and, if all goes well, develop the Umiat oil field.
Spill plan, permits in hand As of Jan. 17, operator Renaissance Umiat had an approved oil spill plan and all of its permits in place to commence appraisal drilling — all of which will have to be modified for next winter if the company identifies some deeper targets to drill.
But getting the permits and spill plan approved shouldn’t be challenging since the field is far from the coast and has an existing environmental footprint created by the Navy when it drilled 11 wells at Umiat in the 1940s and 1950s, and another in 1979.
Rutter out of Umiat Upon the formation of Renaissance Umiat LLC in March 2007, Renaissance Alaska, Rutter and Wilbanks and Arctic Falcon agreed to contribute their interests and Renaissance Alaska and Rutter and Wilbanks agreed to share costs on a 50-50 basis.
Toward the end of 2007, Rutter and Wilbanks, presumably occupied with its gas exploration program in Alaska’s undeveloped Copper River basin, elected out of the Umiat venture, leaving Renaissance Alaska paying 100 percent of the costs, Landt said. This “provided some funding challenges impacting the program,” Landt said, which resulted in Renaissance looking for a 30 percent partner in the Umiat program.
Since the formation of Renaissance Umiat, Renaissance Alaska has been its sole managing member.
The president and CEO of Renaissance Alaska is Jim Watt. Landt is executive vice president of land and administration; Allen Huckabay, executive vice president of exploration and production; Michael Cook, vice president of drilling and operations; Vijay Bangia, vice president of reservoir engineering; David Doherty, chief geologist; and Charles Gartmann, chief geophysicist.
| 