The North Slope is on pace to experience even steeper declines in development drilling this year than it did last year. But the trend can largely be traced to a single company.
The seven North Slope producer-operators drilled 54 development wells during the first half of the year, down from 76 during the same period in 2016, representing a 28 percent decline. By comparison, the 76 development wells from the first half of 2016 represented an 18 percent decline over the 93 development wells drilled during the first half of 2015.
The figures include wells labeled “development” (also known as production wells) and “service” (also known as injection wells) in the weekly well reports published by the Alaska Oil and Gas Conservation Commission. Some exploration wells are later converted to development wells. Some development wells are reported at a delay after completion. As a result, revised totals could be higher but are unlikely to be lower.
The reduced drilling activity is a steep decline over last year, but lies within historic averages. The North Slope producer-operators drilled 59 development wells in the first half of 2013. The ongoing suspension of drilling activities at the Eni-operated Nikaitchuq unit and the Caelus-operated Oooguruk unit continue to hamper overall drilling totals.
The seven North Slope producers are BP, Caelus, ConocoPhillips, Eni, Hilcorp, the North Slope Borough and Savant. Only BP, ConocoPhillips and Hilcorp have drilled this year.
Prudhoe to blame
The Prudhoe Bay unit is almost entirely responsible for the current decline.
BP Exploration (Alaska) Inc. drilled 11 development wells during the first half of the year, down from 27 drilled in the first half of 2016 and 33 in the first half of 2015.
Even though the company is cutting back considerably on development drilling, it is diversifying its work by drilling at the Lisburne and Raven fields, as well as the main Prudhoe field. And the company is undertaking some pad expansions to aid operations.
ConocoPhillips Alaska Inc. drilled 27 development wells at the Kuparuk River unit during the first half of the year, down from 32 during the first half of 2016 and 45 in the first half of 2015. The current well count is higher than first-half 2013 and 2014 totals.
The company is continuing its strategy of multilateral drilling. The program this year has included a pent-lateral well at Drill Site 1C and a quad-lateral well at Drill Site 3M.
ConocoPhillips drilled 11 development wells at the Colville River unit during the first half of the year, up from eight in the first half of 2016 and five in the first half of 2015.
The drilling activity this year has included six Alpine wells from the new CD-5 pad, four Alpine wells from the existing CD-2 pad and a Fiord well from the existing CD-3 pad.
The wells at the Prudhoe Bay and Kuparuk River units were all development wells. The drilling activity at the Colville River unit in the first half included two services wells.
Hilcorp Alaska LLC drilled five wells at the Milne Point unit in the first half of 2017, down from seven in the first half of 2016. The previous operator, BP, did not drill at Milne Point in the first half of 2015 but drilled 17 wells in the first half of 2014.
Hilcorp drilled the B-30 development well, B-32 development well, B-33 service well, B34 service well and the J-24A service well sidetrack earlier this year. Three of the wells targeted the Schrader Bluff formation, one the Kuparuk and one an undefined oil pool.
