NOW READ OUR ARTICLES IN 40 DIFFERENT LANGUAGES.
HOME PAGE All ADVERTISING OPTIONS SUBSCRIPTIONS - Print Edition, News Bulletin Service PRODUCTS - Special Publications SEARCHABLE ARCHIVES Free Trial Subscription

SEARCH our ARCHIVES of over 14,000 articles
Vol. 17, No. 14 Week of April 01, 2012
Providing coverage of Alaska and northern Canada's oil and gas industry

Arctic Oil & Gas Directory: Placer unit on North Slope wins approval

ASRC Exploration commits to drill new exploratory well or test existing well by mid-2013; unit area contains known oil reservoir

Wesley Loy

For Petroleum News

Alaska’s oil and gas director has approved formation of the Placer unit on the North Slope.

Bill Barron, director of the state Division of Oil and Gas, signed the approval on Sept. 9, wrapping up a nearly eight-month application process for the unit.

The sole working interest owner in the Placer unit is ASRC Exploration LLC, a subsidiary of the Arctic Slope Regional Corp.

The unit approval includes an exploration commitment on the part of ASRC Exploration, and describes a number of oil developments in Placer’s neighborhood.

Barron found that the application met all the state’s unit criteria. Unitization binds together a group of leases, which often have multiple owners, to encourage orderly and thorough exploration and production with minimal waste of dollars or resources.

In exchange for a unit designation, the state typically expects a significant work commitment from the company acting as unit operator.

ASRC, based in Barrow, is one of the regional Native corporations formed under the Alaska Native Claims Settlement Act of 1971. The company has vast land holdings across the top of the state, and represents about 11,000 Inupiat shareholders.

ASRC long has been involved in Alaska oil field services, and recently has shown interest in the exploration and production sector.

The Placer unit ties together parts of four state oil and gas leases southwest of the ConocoPhillips-operated Kuparuk River unit, one of the nation’s biggest oil fields. The unit covers a total of 1,480 acres.

Unitization carries the benefit of extending the life of the leases, which otherwise were set to expire on Jan. 31, 2012.

The state can bid out expired acreage again and collect sale proceeds. To offset the loss of this revenue, the state is increasing the rental rate for the four Placer leases from $3 per acre to $4.50.

Unitization will give ASRC Exploration time to determine whether the reservoir within Placer can be commercially developed, Barron’s decision says.

As part of its unit application, ASRC Exploration submitted confidential and public information demonstrating that the unit includes all or part of an oil reservoir, the unit decision says. The submitted material included geologic cross sections; analyses of well log, core and fluid data; and regional structure maps. No interpreted seismic data was provided.

The primary reservoir in the Placer unit is the Kuparuk C sandstone within the Kuparuk River formation. The formation is subdivided into four members designated by letters, with A the oldest and D the youngest.

The Kuparuk River formation is the main producing reservoir in the Kuparuk River unit, adjacent to the Placer unit.

The Placer unit is located about six miles southwest of a developed, Kuparuk C sandstone accumulation known as Palm.

In addition to the Palm development, which came on production in 2002, a number of other discovered, isolated, local accumulations of thin Kuparuk C sand have been developed in recent years in the area surrounding Placer, the state’s unit decision says. For example, about 10 to 13 miles west of Placer, both the Fiord-Kuparuk and Nanuq-Kuparuk pools within the Colville River unit came on production in 2006, and about nine miles north of Placer the Oooguruk-Kuparuk pool came on production in 2008.

The area encompassing the discovered Placer accumulation is covered by a 3-D seismic survey ARCO Alaska, which became part of ConocoPhillips, shot in 1997.

ConocoPhillips drilled the Placer No. 1 and Placer No. 2 exploration wells in 2004 as work commitments for expansion of the Kuparuk River unit following the discovery and successful development of Palm.

BP, Unocal, ChevronTexaco, ExxonMobil and ConocoPhillips were the original partners in the Placer area. ASRC farmed into BP’s acreage, assuming a portion of the well cost in exchange for a 35 percent working interest in the project.

The Placer No. 1 well was spud in February 2004 and suspended in March of that year after reaching a total depth of 7,761 feet. About 17 feet of hydrocarbon-bearing sands were encountered within the Kuparuk formation.

The Placer No. 2 well was drilled to delineate the Kuparuk C at a bottom hole location about 1.5 miles northeast of the Placer No. 1 bottom hole location. The Placer No. 2 well was plugged and abandoned.

“Although no production test was attempted at the time the Placer #1 well was drilled, the well bore was suspended rather than plugged and abandoned to preserve the ability to test the well at a later date,” the state’s Placer unit decision says. “Ultimately, after drilling the Placer #2 well, the partnership decided, without testing, that the reservoir discovered in Placer #1 was not economic to develop and the leases were subsequently dropped.”

ASRC Exploration reacquired the leases in a 2006 lease sale, and later secured ownership of the Placer No. 1 wellbore from ConocoPhillips.

The new unit takes in the Placer No. 1 well, but not Placer No. 2, which failed to find a producible reservoir.

“The Placer #1 well demonstrated that decent quality oil is present in a thin, but high quality reservoir in the Placer area,” the unit decision says.

ASRC Exploration made a number of work commitments to the state under a two-year plan of exploration.

The company has until Dec. 31 to reprocess and reinterpret newly licensed seismic data shot across the unit acreage. By June 30, 2013, the company must drill and log a new exploratory well, or re-enter and test the Placer No. 1 well.

If ASRC Exploration fails to either drill the new well or re-enter the Placer No. 1, the Placer unit will automatically terminate, the unit decision says.



Did you find this article interesting?
Tweet it
TwitThis
Digg it
Digg

Submit it to another favorite Social Site or Article Directory.

del.icio.us Facebook Furl Mixx NewsVine Reddit StumbleUpon YahooMyWeb Google LinkedIn Live MySpace Sphinn Technorati Yahoo! Buzz
Email it to an associate.
Print this story

Click here to subscribe to Petroleum News for as low as $59 per year.


Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
circulation@PetroleumNews.com --- http://www.petroleumnews.com ---
S U B S C R I B E

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©2011 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.