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Vol. 13, No. 26 Week of June 29, 2008
Providing coverage of Alaska and northern Canada's oil and gas industry

Two-10tcf ‘potential’ in foothills

Anadarko: Resource figure a broad estimate, but doesn’t include data from exploration this past winter

Eric Lidji

Petroleum News

Anadarko Petroleum believes its land holdings in the foothills of the Brooks Range have the “potential” to hold between 2 trillion and 10 trillion cubic feet of natural gas.

The resource estimate comes from a series of presentations the company has been delivering at energy conferences around the country since at least late March. Anadarko most recently included the figure in a presentation on June 24 at the 18th Annual Wachovia Nantucket Equity Conference.

The preliminary estimate covers the Gubik, Chandler and Umiat prospects, all clustered around the Colville River near the village of Umiat.

Anadarko spokesman Mark Hanley said the company has been using the notably broad resource estimate for a while. He said the numbers do not include information gleaned from a recent exploration venture Anadarko conducted this past winter.

Across Alaska, Anadarko owns 4.7 million gross acres of land, mostly through partnerships with other companies. Through the end of 2007, those leases contained an estimated 58 million barrels of oil equivalent, according to the company.

First northern gas exploration

Anadarko drilled exploration wells at Gubik and Chandler earlier this year, completing the Gubik No. 3 well and suspending the deeper Chandler No. 1 well midway to the target depth. As early as April, Anadarko had been testing the well results from Gubik No. 3, but has not publicly released any information about the well.

The foothills exploration program was the first in northern Alaska to explicitly target a large deposit of natural gas, rather than oil. Most gas discoveries north of the Brooks Range have been accidental or for local use only.

Because no transportation infrastructure currently exists for marketing natural gas in northern Alaska, many saw Anadarko’s decision to explore as an endorsement of the Alaska Gasline Inducement Act, a state effort to spur construction of a natural gas pipeline built from the North Slope to markets in Canada and the Lower 48.

However, since Anadarko announced its drilling program in the foothills last fall, two developments have changed the prospects for natural gas infrastructure in Alaska.

First, BP and ConocoPhillips announced a competing proposal for a large-diameter natural gas pipeline to the Lower 48.

Second, the Enstar Natural Gas Co. announced it would begin exploring the feasibility of building a small-diameter pipeline from the Gubik gas fields to Anchorage as a way to offset looming supply shortages in the Cook Inlet. Enstar has said it would need Anadarko to find 3.5 tcf of reserves to make that pipeline viable.

Anadarko plans to return to the foothills this coming winter to continue delineating the Gubik and Chandler prospects.

Anadarko and Enstar plan to meet in mid-July to discuss early results from the exploration program this past winter, but Enstar won’t make a decision about the bullet line until next year.

USGS: 600 bcf at Gubik

The most recent resource figures for Gubik come from a joint U.S. Navy and U.S. Geological Survey expedition in the early 1950s, which estimated that Gubik contained 600 billion cubic feet of natural gas.

Anadarko acquired its land holdings around the two prospects through a deal with the Arctic Slope Regional Corp., through a partnership with Petro-Canada and finally through lease sales in the area.

Although Anadarko does not own the land associated with the oil-prone Umiat prospect, it does have partial ownership of seven tracts of land to the northwest, within the National Petroleum Reserve-Alaska.

Anadarko is partnering at Gubik and Chandler with Petro-Canada and BG Group.



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