If Anadarko Petroleum drills the undeveloped Gubik gas field this winter it will be the first explorer in northern Alaska to target natural gas instead of oil, betting a gas pipeline from Prudhoe Bay to Lower 48 markets will be built. Gas wells have been drilled on the North Slope, but only for local use or by mistake when companies were looking for oil, which is more valuable — and which can be sold to Outside markets via the 800-mile trans-Alaska oil pipeline.
Another operator might also be drilling gas-rich wells this winter — ConocoPhillips, Anadarko’s partner in the National Petroleum Reserve-Alaska and in the Colville River unit, which holds the Alpine field. But ConocoPhillips and Anadarko’s risk there will be cushioned by the fact that the NPR-A Alpine satellite discovery ConocoPhillips might be drilling next to — Spark (CD-7) — also holds a great deal of oil whereas Gubik is viewed as strictly a gas field.
Neither company has publicly confirmed plans for the coming winter drilling season, but both have drilling rigs under contract that can do the work and Petroleum News industry sources say Gubik and Spark DD are at the top of the list pending board and partner approval.
In the case of the Gubik field, Mark Hanley, Anadarko’s top official in Alaska, told Petroleum News in February that the company and its Brooks Range Foothills partners, BG Group and Petro-Canada, had ordered a lightweight drilling rig and remote camp from Nabors Alaska Drilling. Both are still scheduled to arrive in December.
Nabors Rig 105 and the camp, he said, would be owned and operated by Nabors, but were being built at the request of the operator of the partnership, Anadarko, “for a multi-year drilling program with extensions options” in the Brooks Range Foothills. Gubik is in the Foothills, just a few miles east of the southeast boundary of NPR-A.
Rig 105, which is being built in Alberta, is a “mobile rig, not a wheeled rig, so it can be broken down and transported on rolligons,” Hanley said.
Wanted assurance of access to gas line
Over the past few years Anadarko has talked about drilling a gas well, but before making the investment company officials wanted to be certain a gas pipeline would be built — and would accept gas from outside the giant Prudhoe Bay oil field. Ninety-nine percent owned by North Slope oil producers BP, ConocoPhillips and ExxonMobil, Prudhoe Bay contains 24.5 trillion cubic feet of gas and could conceivably keep the gas line full for its first 10 years of operation at 4.5 billion cubic feet a day, even if one-third of Prudhoe’s natural gas was reinjected back into the field to boost oil recovery. (The gas at Prudhoe was discovered while its owners were exploring for oil.)
Under the 2007 Alaska Gasline Inducement Act — i.e. AGIA — builders of a gas line from the North Slope have to treat all gas sellers fairly, even if fellow gas producers BP, ConocoPhillips and ExxonMobil, competitors of companies such as Anadarko, win state approval under AGIA to build the line. Because simply having a pipeline would not encourage nonowners of the line to spend hundreds of millions of dollars on gas exploration and development, Hanley told Alaska legislators in 2006 when a contract with the big three producers was in front of the Legislature for approval. Nonowners, Hanley told them, had to have access to the pipeline and know that the line would be expanded if they discovered new gas fields. (The U.S. Geological Survey puts undiscovered, technically recoverable natural gas onshore and offshore Alaska’s North Slope at more than 200 tcf, and discovered gas outside Prudhoe Bay at about 11 tcf, 8 tcf of which is in the undeveloped Point Thomson field.)
After the proposed gas line contract was nixed in 2006 by the Legislature and a new governor had been elected, Anadarko’s Alaska Exploration Manager Doug Wilson said the Houston-based independent was gearing up for a 3-D seismic survey in the gas-prone Brooks Range Foothills with the intention of drilling a gas exploration well in the winter of 2007-08.
Anadarko, BG and Petro-Canada hold approximately 2.2 million acres between the Canning and Colville rivers along the southern boundary of the North Slope, an area referred to as both the Brooks Range Foothills and the North Slope Foothills. The Gubik leases (see adjacent map), which Hanley said are part of that partnership, sit primarily on Native land, the surface of which is owned by Arctic Slope Regional Corp. A few leases are on state land, most of which have been purchased in recent lease sales by Anadarko and included in the Foothills partnership, Hanley said.
According to USGS, the Gubik field holds approximately 600 billion cubic feet of recoverable gas, and was discovered by the U.S. Navy more than 50 years ago while exploring for oil in the petroleum reserve.
Anadarko has drilling permits in place for Gubik and several other gas-prone prospects in the Foothills that expire in a year, a state official told Petroleum News.
Ayak also a possibility for Anadarko
But Anadarko has more going on next winter than possibly drilling Gubik or one of its other Foothills gas prospects. The company will have two drilling rigs under contract in the upcoming winter drilling season — Nabors 105 and Akita 63.
The Akita rig will be used on the other side of the North Slope at the company’s Jacob’s Ladder oil prospect, which Anadarko started drilling this past winter. The company told state officials it plans to go back this coming winter with a newly winterized Akita 63 to finish drilling.
Once Anadarko has finished drilling Jacob’s Ladder, Petroleum News sources say it will likely drill another eastern North Slope prospect near Jacob’s Ladder — a rumor not confirmed by Anadarko. But two years ago company officials did tell the state that they hoped to drill Anadarko’s Ayak prospect in the expired Slugger unit, which is near Jacob’s Ladder and south of Badami.
ConocoPhillips: Delineation wells near Spark
ConocoPhillips has said very little to permitting agencies about its plans for the coming year except that it would likely be doing only infield drilling and exploration or delineation drilling near existing fields. One area that company officials have mentioned is next to a proposed Alpine satellite, CD-7, which is the Spark discovery in NPR-A (see adjacent Alpine satellite map). That information is in line with the five-year NPR-A drilling plan for 11 wells that ConocoPhillips submitted to the U.S. Bureau of Land Management (see related story and map on page 9 of this issue).
The Spark DD wells (Nos. 9-12) in that plan are in sections 21, 21, 28 and 21, respectively, of T10N-R2E, UM. All are in the Northeast NPR-A planning area, directly adjacent to the proposed site for CD-7, which has been evaluated as a development node with permanent road access and a pipeline to Alpine. Spark is about 15 miles southwest of the Alpine oil field.
If the Spark and nearby Lookout (CD-6) discoveries are developed, as little as two miles of pipeline would be needed to connect the Spark DD sites, the agency said.
The Spark No. 1A discovery well tested 1,550 barrels per day of liquid hydrocarbons and 26.5 million cubic feet per day of gas.
There is no indication that ConocoPhillips has secured additional drilling rigs for the upcoming winter exploration season. But the company has two good exploration rigs under contract that could easily be moved to the Spark DD well sites — Doyon Rig 141 at Kuparuk, currently undergoing summer maintenance, and Doyon Rig 19, currently drilling at Alpine satellite CD-4.
Five companies, max of 20 wells, including Chevron at White Hills
At least five other companies are looking at drilling exploration wells on Alaska’s North Slope this winter, including Chevron (as many as six wells), the Brooks Range Petroleum Corporation Group (two to three wells), Pioneer Natural Resources (two wells), Renaissance Umiat (seven or eight wells) and Savant Alaska (one well).
Chevron recently began the permitting process to drill up to six wells in its first exploration drilling season at the White Hills prospect, with the potential for additional wells in subsequent years.
Chevron told the Alaska Department of Environmental Conservation in a recent application that it “plans to conduct a regional, multiyear onshore oil and gas exploration drilling program during the winter months on the North Slope” at its White Hills prospect in the Brooks Range Foothills, west of the Sagavanirktok River and east of the Colville River. (See Petroleum News July 29 story at www.petroleumnews.com/pnads/681052678.shtml.)
The company will be using another new rig from Nabors, Rig 106. It and Rig 105 will be the first “purpose-built AC rigs for the North Slope,” Dave Hebert, Nabors’ Alaska general manager, told Petroleum News earlier this year.
Rig 106 will be used first at Chevron’s Happy Valley field on the Kenai Peninsula and then taken to the North Slope before the end of the year.
BRPC Group: Possibility of 2-3 wells
BRPC Group, which completed a 130 square mile North Shore 3-D seismic survey this past spring, is going back in to finish drilling and testing its North Shore exploration well, state officials told Petroleum News. Brooks Range confirmed this information. The joint venture partners said in April that they had discovered oil at their North Shore No. 1, north of Prudhoe Bay in the central North Slope. The offshore well was drilled from onshore to its target under the Kuparuk River delta, encountering “approximately 70 feet of oil-charged Ivishak sandstone formation,” BRPC Group said.
The joint venture partners have Nabors Rig 27E under contract for the upcoming winter and have told state officials they are hoping to move forward in the near future on a North Shore development, and that they are looking at drilling two to three new wells in the upcoming winter season. At least one of those wells will likely be another North Shore well, plus a well in the Titania area onshore immediately south of ConocoPhillips’ Colville River unit.
The BRPC Group consists of AVCG LLC, its operating subsidiary Brooks Range Petroleum Corp. and its co-ventures TG World Energy Inc., Ramshorn Investments Inc. and Bow Valley Alaska Corp.
The BRPC Group did not confirm its drilling plans with Petroleum News because the partners had not yet finalized their plans, but a representative did say two to three wells was probable.
Talk of Pioneer drilling Gwydyr Bay leases
Pioneer has told companies interested in leasing the Doyon-Akita Arctic Fox drilling rig that it’s hoping to use the rig to drill its Gwydyr Bay leases north of Prudhoe Bay this coming winter.
Pioneer did not confirm the information, but it makes sense since no other company has come forth to say it has a contract for the Arctic Fox — and Pioneer was initially going to drill and put its Gwydyr Bay leases into production before its Oooguruk unit.
In January 2005 the company said it planned to drill two wells during the winter of 2005-06 at its Gwydyr Bay acreage just north of the BP-operated Prudhoe Bay unit as part of its plan to “commercialize several small oil discoveries” that would tie into Prudhoe infrastructure.
The previous fall Pioneer applied to the State of Alaska for exploration and production permits that included a four-acre gravel pad and a 2.8-mile gravel access road to a site three miles north of Prudhoe’s T Pad, which is in the vicinity of BP’s Pete’s Wicked No. 1 exploration well.
“The Gwydyr Bay area contains relatively small isolated hydrocarbon accumulations” discovered during exploration by BP and ARCO, Pioneer said in its applications. “These oil fields have not previously been developed due to their relative isolation and size.”
The company “proposes to utilize a simple design and cost structure to develop these outlying fields.” A six- to 12-month drilling program is planned with a conventional diesel-powered drilling rig, a coiled-tubing workover rig, waterflood and gas lift facilities, Pioneer said at the time.
When Petroleum News asked Pioneer about Gwydyr Bay, the company’s director of government and public affairs, Tadd Owens, said Aug. 15, “At this time we are focused almost entirely on our Oooguruk and Cosmopolitan projects. We continue to evaluate other business opportunities in Alaska however our plans beyond Oooguruk and Cosmopolitan for the 2008 season have not been finalized.”
Renaissance plans to drill at Umiat
One company very willing to talk about its plans for the upcoming drilling season was Renaissance Umiat LLC. (Renaissance Alaska LLC is the managing member of Renaissance Umiat.)
Company executive Mark Landt told Petroleum News Aug. 14 that Renaissance is in the process of permitting “11 or 12 well locations” in the NPR-A oil field, which straddles the eastern border of the reserve and was discovered by the U.S. Navy in the same time period as the nearby Gubik gas field. (See related story in the March 11 issue of Petroleum News at www.petroleumnews.com/pnads/112551196.shtml.)
Because the reservoir, which holds very light oil, is shallow — 200 to 1,400 feet deep — Landt expects to get seven or eight wells drilled this winter using either the Doyon-Akita Arctic Wolf rig or a rig it would bring in from Canada.
The company, he said, would likely be sharing some ice road and logistical costs with Anadarko if it drilled at Gubik.
Landt said Renaissance is in the process of re-staking some of its well locations, which are all in NPR-A, and expected to start filing permit applications in the third or fourth week of August.
USGS estimates Umiat holds 70 million barrels of recoverable oil, but Renaissance has put estimates closer to 100 million barrels.
Landt said the U.S. Navy drilled 11 wells in the Umiat field in the 1940s and 1950s, plus a deeper test well, the No. 1 Seabee, in 1979. The reason the field has not been developed is “generally due to the remoteness from infrastructure and pipelines and due to historically low oil prices,” he told Petroleum News in March.
One challenge the field poses is that some of the oil is in permafrost.
Savant plans Beaufort well near Liberty
Independent Savant Alaska is still on track to drill its Beaufort Sea Kupcake prospect in the first quarter of 2008 with Kuukpik Rig 5, Savant COO and Executive Vice President Greg Vigil told Petroleum News. (See related articles in the July 8 and July 15 issues of Petroleum News.)
Kupcake is adjacent to BP’s Liberty prospect and is expected to hold approximately 100 million barrels of recoverable oil.
The Kupcake well site is in 14 feet of water about three miles offshore in Foggy Island Bay, approximately 8,000 feet west of the Liberty No. 1 discovery well. BP has pegged Liberty’s recoverable oil at between 120-130 million barrels and is currently moving toward field development.
The Kupcake project has an approved oil spill plan and is completely permitted except for the “APD permit from AOGCC,” which the company can’t get until it becomes “a signatory on Prudhoe Bay unit ballot 201 for waste disposal,” Vigil said.
“Once we have that document … become a signatory, we can get our APD,” he said.
Independent True North Energy Corp. is a partner in Kupcake.
