Companies gearing up to drill oil exploration wells on Alaska’s North Slope during the upcoming winter drilling season are still filing permits, leaving the exact number of wells unknown. But it’s safe to say at least 13 exploration wells will be drilled, and possibly as many as 18, by six companies, including ConocoPhillips in both the Northwest and Northeast planning areas of the National Petroleum Reserve-Alaska and possibly northeast of Alpine; FEX in NW NPR-A; Eni Petroleum at its Rock Flour and Maggiore prospects near Kuparuk; Anadarko Petroleum at its Jacob’s Ladder prospect on the eastern North Slope; AVCG/Brooks Range Petroleum near Gwydyr Bay; and Savant Alaska offshore in the Beaufort Sea at its Kupcake prospect near Liberty.
Less certain, and not included in the above well count, is a well UltraStar Exploration hopes to have drilled by BP at the Dewline Deep prospect west of Point McIntyre.
Also not included in the exploration well count is the BP-operated gas hydrate stratigraphic test well east of Milne Point.
All explorers appear to be targeting oil, but of course some locations are also promising for natural gas as a secondary objective.
Crossing the Colville River
Since Petroleum News’ exploration preview in August, (Aug. 20 edition) a new challenge has arisen for Conoco in NPR-A where the company plans to drill one to three wildcats using the Kuukpik No. 5 drilling rig.
A Sept. 25 decision by U.S. District Court Judge James Singleton Jr. banning the Bureau of Land Management’s Sept. 27 NPR-A Northeast Planning Area Sale also invalidated an amended 1998 Environmental Impact Statement that would have allowed all-terrain, rubber-tracked exploration vehicles to go into the Northeast Planning Area when the ground and water bodies had “sufficient” frost and snow cover. Because of Singleton’s decision, Conoco and any other explorers drilling in or crossing the Northeast Planning Area are now subject to the original 1998 stipulations which called for 12 inches of “freeze down and six inches of snow” a BLM official told PN Oct. 17.
With 65 rolligon loads planned for the 240-mile trek to its NW NPR-A Intrepid prospect south of Barrow, the restriction could leave the Kuukpik rig and other valuable equipment waiting on NPR-A’s eastern border for several days, reducing the already short exploration season in northern Alaska.
Conoco: Intrepid and Noatak
As of Oct. 18, Conoco had filed permit applications for only one NPR-A prospect — Intrepid, which is south of Barrow and just south of the Walakpa gas field (see full story in the Oct. 15 issue of PN) in NW NPR-A.
But along with a Sept. 15 application to amend its rights of way in NPR-A, the company submitted a map titled, “ConocoPhillips 2006-07 Proposed Exploration Wells,” which identifies 15 possible well locations for permitting, three of which are in the Intrepid prospect. (See map on page 11 that was built with information supplied by Conoco’s ROW and Intrepid applications.)
Permitting agencies have been told one of three scenarios is possible:
1. Conoco will drill one Intrepid well, be disappointed with the results, and on the way back to its starting point — Meltwater drill site 2P — stop at Conoco’s Noatak prospect south of Teshekpuk Lake in NE NPR-A and drill a second well;
2. Conoco will drill a well at Intrepid, be pleased with the results, drill a second Intrepid well, and then if there is time on the way back to 2P, drill a third well at Noatak;
3. Conoco will drill a well at Intrepid, be pleased with the results, drill a second well and overwinter the drilling rig at a nearby staging area for use at Intrepid the following winter.
Conoco is looking at permitting three wells at the Noatak location, which is just north of the two Kokoda wells the company previously drilled in NE NPR-A, southeast of Teshekpuk Lake.
From west to east headed back to Meltwater, the remaining well locations on Conoco’s 2006-07 exploration map are two wells at the Nugget prospect, which is south and a little west of the Trailblazer wells drilled by BP; three wells at the Cassin prospect, north and a little west of the Moose’s Tooth C well; and four wells at the Spark prospect, just south of the Spark 1 well and west of the Rendezvous A well.
But with just one drilling rig, the company will be lucky to get two or three wells drilled, agency officials said.
Moose’s Tooth C, Spark 1 and Rendezvous A were all exploration wells previously drilled by Conoco in prospects with the same name.
Makua outside NPR-A
On the Conoco 2006-07 exploration map there are three proposed well locations to the east of NPR-A on state land between the Colville (Alpine) and Kuparuk River units. Those wells are the Makua 1, 2 and 3.
There has been no indication from Conoco that it intends to drill exploration wells at Makua this winter — or anywhere else outside NPR-A. But the company has two Doyon rigs available to it in the Kuparuk and Colville units that could conceivably be used to drill one or more of those wells.
The day this issue goes to press, Oct. 19, the company is expected to meet with North Slope Borough officials to discuss its 2006-07 exploration drilling plans.
In the above exploration well count, PN counted Conoco for two exploration wells minimum, and four maximum.
Talisman’s FEX: up to five wells
In early October FEX, a subsidiary of Calgary-based Talisman Energy, filed for an Alaska Coastal Management Program consistency review of its NPR-A exploration program with the Office of Project Management and Permitting.
FEX told OPMP it plans to drill as many as five wells in the winter of 2006-07, continuing last winter’s exploration program on its leases south of Cape Simpson and west of the Ikpikpuk River in NW NPR-A.
Previously FEX had said it would drill three to four NPR-A wells in the winter of 2006-07, as compared to the single well (Aklaq 2) and sidetrack it drilled in 2005-06.
This winter’s drilling will be done by two rigs — Nabors 14E rig currently stacked at Cape Simpson and the new Arctic Wolf rig, owned by the Akita-Doyon joint venture.
FEX said its winter exploration program would involve building up to five ice pads and 81 miles of ice road, as well as one 5,000-foot ice runway and several smaller airstrips.
One FEX rig has to cross Colville
Since FEX has already shipped most of its equipment and supplies to its Cape Simpson staging area via barge from West Dock, the only impact the Colville River crossing stipulation will have on its operations is the transport of the Arctic Wolf drilling rig and related supplies, which will have to come by rolligon across NE NPR-A.
Plus, after drilling operations in the Northwest Planning Area have begun, FEX plans to transport its excess drill muds and cuttings from Aklaq No. 6 on a tundra trail across NE NPR-A to Meltwater drill site 2P, which is connected to the North Slope road system. From there the muds and cuttings will be taken to an approved facility for disposal.
FEX has three rolligons under contract for its NPR-A exploration program.
The company said it “placed 50 thermistors along the travel route between Cape Simpson and Aklaqyaaq No. 1 to assess ground conditions in anticipation of obtaining BLM authorization for early tundra access,” which it defines as December.
FEX also said some equipment and supplies may be sent from Barrow on snow-packed trails.
Although FEX has nine well locations staked, it said in its plan of operations that “probable well sites will be at Aklaqyaaq No. 1 and Aklaq Nos. 3, 6, and 7” and that “two to three reservoir penetrations may be drilled at each of the locations during the 2006-07 drilling season. Well evaluations (testing) and formation interpretation testing may be performed at the well locations.”
FEX’s staked well sites are as follows:
Aklaqyaaq No. 1, section 23, township 14 north, range 14 west, Umiat Meridian;
Aklaqyaaq No. 2, section 10, T14N, R14W, U.M.;
Aklaq 3, sec. 26, T15N, R11W, U.M.;
Aklaq 4, sec. 26, T15N, R12W, U.M.;
Aklaq 5, sec. 8, T14N, R12W, U.M.;
Aklaq 6, sec. 25, T16N, R11W, U.M.;
Aklaq 7, sec. 13, T15N, R12W, U.M.;
Aklaq 7A, sec. 12, T15N, R12W, U.M.;
Uugaq 1,sec. 35, T17N, R12W, U.M.
According to BLM there is no indication the company is planning to drill a well at its Caribou prospect in the Northeast Planning Area. A PN source said in August that FEX was considering drilling a few miles from where its former partner in that prospect, Total E&P, drilled a well in 2003.
In PN’s exploration well count, FEX has a possible four wells on the low side and five wells on the high side.
Eni looking at three to four wells
Eni Petroleum plans to drill as many as four new exploration wells into state leases southeast of Kuparuk this winter. It will be the first time the major has operated on Alaska’s North Slope.
Two or three wells will be drilled in the Rock Flour prospect area, which is adjacent to the southeast corner of the Kuparuk River unit and just a few miles west of the Prudhoe Bay unit. And one well will be drilled in the Maggiore prospect area, which is about four miles south of Rock Flour.
The wells will be drilled from ice pads which will be connected to the KRU Pad MP1 by approximately 26 miles of ice road, Eni said in the plan of operations it submitted to state agencies.
The ice pads will be approximately 400 feet by 400 feet in size, or less, the company said.
Eni will be using Nabors 27E to drill the wells.
In its plan of operations Eni said ice road and pad construction could begin as early as November and drilling as soon as December.
“Current plans are to complete all new geologic penetrations on all wells prior to April 7, 2006. Well evaluations (testing) may be performed on any of the wells and may be conducted after this date, but prior to breakup,” Eni said, giving the following information on well locations by latitude and longitude:
• Rock Flour 2 70º 17.06’ N 149º 22.38’ W
• Maggiore 1 70º 0.51’ N 149º 18.15’ W
• Rock Flour 3 70º 11.50’ N 149º 23.81’ W
• Rock Flour 4 70º 15.84’ N 149º 23.61’ W
The company said the wells would be drilled in the above sequence.
“It is anticipated that the first three wells will be drilled during this coming winter season, and the final well Rock Flour Well No. 4 may or may not be drilled, depending on timing and results of previous wells,” Eni said in its plan.
Heading southwest from KRU Pad MP1 it’s about two miles to Rock Flour No. 2.
The ice road will split about one mile south of MP1 and go another three miles south to reach the Rock Flour No. 4.
From there it will continue another six miles south to the location of Rock Flour No. 3 where it’s another 15 miles to reach Maggiore No. 1.
Word on the street has it Eni, whose mega-major parent company is based in Italy, will name its Alaska oil and gas prospects after Italian lakes.
Rock Flour was named by its previous owner, Armstrong Alaska. But the Maggiore prospect was named by Eni.
Lake Maggiore is Italy’s second biggest lake, acting as a water boundary between two regions — Lombardy and Piedmont. The lake also sits in two countries as its northern tip lies in Switzerland.
In PN’s exploration well count Eni got a minimum of three wells and a maximum of four.
Anadarko to bring third Akita rig to North Slope
According to paperwork Anadarko filed with the Alaska Department of Environmental Conservation on Oct. 12, the company is moving forward with plans to drill one exploration well at its eastern North Slope Jacob’s Ladder unit this winter. The company told DEC the well would be drilled from an onshore ice pad approximately 17 miles southwest of Badami and 20 miles southeast of Deadhorse.
Anadarko is planning to use Akita/Equtak Rig 63E to drill the well, which PN sources say is in the Mackenzie Delta area of northwestern Canada. It will be the third Akita rig brought from Canada to northern Alaska in the last year.
The other two rigs — the Arctic Fox and the Arctic Wolf — are operated by Anchorage-based Doyon Drilling under a joint venture agreement between Akita and Doyon. PN was unable to confirm that Rig 63E will be under the same JV.
In order to prevent its Jacob’s Ladder leases from expiring, in 2005 Anadarko requested the leases be placed in a unit. Part of independent’s commitment to the state at that time was to drill a well by June 1, 2007, or pay a lease delay payment of just over $1 million and lose the leases.
At the time it applied for a unit Anadarko told the state it was looking for partners to help carry the risk of exploring Jacob’s Ladder, which is off the North Slope road system.
In the last year Anadarko has secured two partners — first Calgary-based Petro-Canada and then London-based BG Group.
Jacob’s Ladder is considered an oil prospect in the Wahoo formation of the Lisburne group, with a potential reservoir in eroded cavities in Lisburne carbonate rocks. The play resembles the huge Yates field in Texas (see “New Lisburne play at Jacob’s Ladder” in the Nov. 13, 2005, edition of PN). The unit also includes a sizable prospect in the Ivishak formation of the Sadlerochit, equivalent rocks to the reservoir of the Prudhoe Bay field, 10 miles southeast.
According to Alaska Division of Oil and Gas paperwork, the Lisburne prospect in Jacob’s Ladder “represents a previously unrecognized play type on the North Slope.”
The division said “it has been proposed that the Lisburne (Wahoo formation) prospect may yield a range of 20-660 million barrels of oil equivalent and the Sadlerochit (Ivishak formation) prospect may yield a range of 50-800 million barrels of oil equivalent.”
Brooks Range looking at three wells
TG World Energy, a joint venture partner with Brooks Range Petroleum and Ramshorn Investments in Brooks Range-operated leases on the North Slope, said in September that the joint venture now hoped to drill a third exploration well in the upcoming winter drilling season. Brooks Range had previously said it would drill two wells in the Gwydyr Bay area, north of the Prudhoe Bay unit using Nabors Rig 16E.
The mention of the third well came as part of a TG World announcement about its approval of the budget for 2006-07 North Slope exploration.
“The current budget also allows for the drilling of a third well during the 2006/07 winter drilling season,” the company said, which Ken Thompson confirmed Oct. 17. Thompson is chair — i.e. managing director — of Brooks Range’s parent, Alaska Venture Capital Group.
“Management of TG World is confident that technical work currently under way will lead to the identification of a third well location for addition to the 2006/07 drilling program,” TG World said in its announcement.
The company said that drilling prospects are being identified from the mapping of 3-D seismic data and that “negotiations are ongoing for the purchase of several trade 2-D and 3-D seismic data sets covering JV prospect areas.”
The joint venture also plans to shoot some new 3-D seismic in the 2006-07 winter season on JV lands, TG World said. “That seismic data is expected to be used to generate a prospect inventory for exploration drilling during the 2007/08 winter season.”
TG World said it will fund 50 percent of the cost of the Gwydyr Bay drilling to earn a 35 percent interest in the Gwydyr Bay prospect area.
The two previously planned Gwydyr Bay wells will be directionally drilled from the same onshore surface location to offshore subsurface targets, TG World said. Access to the drill site will be by ice road and permitting for the drilling activities is well under way.
In PN’s exploration well count for 2006-07, Brooks Range got two wells on the low side and three on the high side.
Savant hopes to spud Kupcake No. 1 in February
Savant Alaska President Patterson Shaw told Petroleum News in April that he hoped to begin exploration drilling on the company’s Beaufort Sea leases near BP’s Liberty oil prospect this winter. Shaw said Savant Alaska, a closely held limited liability company that is an affiliate of Denver-based Shaw Resources, was “fully capitalized to go forward” with exploration.
In correspondence to PN on Oct. 18, Greg Vigil, Savant’s executive vice president and chief operating officer, said the company “is moving forward with its intent to spud Kupcake No. 1 in February 2007.”
Shaw, who won the Beaufort Sea leases at the March 1 state areawide sale and transferred them to Savant Alaska LLC, bid a total of $1.465 million for the seven leases, his bids ranging from $10.17 to $207.35 per acre. The tracts are east of Prudhoe Bay, adjacent to Liberty, and extend east towards BP’s offshore/onshore Badami oil field along the Mikkelsen Bay fault zone.
On Sept. 27, Savant offered a pre-permit application overview of the company’s Beaufort Sea “Kupcake project” to a joint gathering of North Slope Borough, State of Alaska and federal officials, Vigil said.
At that meeting Savant characterized the proposed drilling prospect as “a conventional exploration well targeting several hundred feet of Beaufortian-age sediments located at a depth of approximately -10,600 feet.”
The proposed exploration site, Savant said, is approximately 8,000 feet west of the Liberty No. 1 discovery well.
“Based on interpretation of licensed 3-D seismic data, Savant suggests that Beaufortian sediments have filled an accommodation space between the NW-SE trending Mikkelsen Bay and Tigvariak faults adjacent to the discovery at Liberty,” Vigil said.
Exploration drilling during the 2006-07 winter season is intended to prove or disprove the prospect, he said.
Vigil, who is based in Denver, is one of two former BP Exploration (Alaska) employees working for Savant — Anchorage-based Erik Opstad is the other.
Opstad, a consultant, was tasked with finding a suitable drilling rig and putting together a group of contractors for Savant’s exploration program, Shaw said in April.
In its Oct. 18 correspondence to PN, Savant declined to comment regarding its consideration of rigs to test the Kupcake prospect.
PN included one Savant well in its exploration well count for the upcoming winter.
UltraStar still working on facility access
UltraStar was not counted in this winter’s exploration well count, although on Oct. 17 Jim Weeks told PN that BP has since said it has UltraStar’s exploration well “slotted in to their drilling schedule, but I have no additional information.”
And there is “still no more news on the access agreements,” Weeks said.
Weeks is the managing member of sister companies Winstar and UltraStar. He told PN Aug. 15 that UltraStar was getting closer to drilling its Dewline Deep prospect west of Point McIntyre.
The company plans to drill Dewline Deep from the Point McIntyre No. 1 drill pad.
But the small, Alaska-based independent wants an access agreement in place for the use of BP’s processing facilities at the nearby Lisburne field before it drills a well.
Negotiations over facility access have proved very slow, although Weeks emphasized in August that everyone was cooperating and that an access agreement was close.
The Point McIntyre pad is on the coast and BP has a self-imposed restriction to only drill from the pad during the winter, when the Beaufort Sea is frozen over.
“We’ve got a window from (approximately) Nov. 1 to June 1,” Weeks said.
Last but not least, BP’s gas hydrate well
The last North Slope exploration well on PN’s radar for this winter is the gas hydrate stratigraphic test well BP plans to drill as part of a team effort that includes government, academic and private partners such as ASRC Energy Services and Ryder Scott Co.
The well is not included in PN’s exploration well count.
BP said the hydrate test well will be drilled into the Mount Elbert prospect one-half mile east of the Milne Point unit E-pad in the northern part of the Eileen gas hydrate trend. Eileen is one of two known, large gas hydrate trends in the central North Slope.
The test well will require an ice pad and a short ice road from the existing road infrastructure, according to the plan of operations BP filed with the state last year.
In that plan BP said it expects the bottom hole true vertical depth to be less than 4,000 feet below sea level.
Gas hydrates concentrate natural gas by combining methane with water to form a solid crystalline substance under certain temperature and pressure conditions. The hydrates have enormous gas carrying capacity, because when they break down or disassociate they can yield 164 to 180 times their volume of free gas.
There is a gas hydrate stability zone under wide areas of the North Slope and researchers have assessed the possibility of as much as 519 trillion cubic feet of natural gas in the form of gas hydrates in the region.
The Northwest Eileen State No. 2 well drilled above the Prudhoe Bay field in 1972 discovered the Eileen trend and oil wells drilled in the central North Slope have encountered gas hydrates in the two known trends. The U.S. Geological Survey has estimated that the trends contain as much as 100 trillion cubic feet of natural gas.
Development of gas hydrates under North Slope permafrost faces some daunting challenges: there are known ways of extracting gas from the hydrates but no one has yet proved an economically viable way of achieving the extraction.
The team investigating the central North Slope deposits did some reservoir modeling of possible extraction techniques in the first phase of its project. The results of that modeling looked encouraging and the data from the test well that BP plans to drill should shed more light on the economic feasibility of gas hydrate production.
A future step could be a field test of gas extraction, but that type of test still looks some way off and would involve additional drilling, USGS said.
