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Vol. 11, No. 51 Week of December 17, 2006
Providing coverage of Alaska and northern Canada's oil and gas industry

Brooks Range files drilling plan

Two wells and a sidetrack will test three North Slope prospects in the Gwydyr Bay area; possibility of an additional well

Alan Bailey & Kay Cashman

Petroleum News

Brooks Range Petroleum Corp. has submitted its plan of operations to the Alaska Department of Natural Resources for the company’s North Slope winter 2006-07 exploration drilling program. That program consists of two wells and a sidetrack targeting three oil prospects north of the Prudhoe Bay unit. The company may also drill an additional well if time permits and if the results from the other wells look promising.

Brooks Range Petroleum, a wholly owned subsidiary of Alaska Venture Capital Group, has formed a joint venture with TG World Energy Inc., Ramshorn Investments and Bow Valley Alaska Corp. for the exploration and development of AVCG-operated North Slope oil and gas leases. Brooks Range Petroleum was formed in 2004 to deal with AVCG’s operations, technical services and administrative services.

On Nov. 15 at the Resource Development Council annual conference in Anchorage Ken Thompson, managing director of AVCG, said that in addition to drilling exploration wells AVCG/Brooks Range is planning an extensive 3-D seismic survey at Gwydyr Bay this winter. And, if time permits, the company will also acquire 3-D seismic in the Titania area onshore immediately south of the Colville River unit. The company is also negotiating with the major oil producers for access to existing seismic data, Thompson said.

“Our company is playing a key role in discovering new reserves in the main central part of the North Slope,” Thompson said. “As the fields become smaller and smaller in that area, we’ll be looking for 25 million to 50 million-barrel fields, hoping we’ll also stumble into a 100 million or 200 million barrel field that still may be left.”

Ice road and ice pad

The winter exploration schedule anticipates constructing an ice road to ice pads once the tundra travel season has opened in December. The first well, the North Shore No. 1, will then be drilled from an ice pad at section 12, township 12 north, range 12 east of the Umiat Meridian. The second well and its sidetrack, Sak River No. 1 and Sak River No. 1A, will be drilled from an ice pad at section 1, T12N, R12E, UM. Both of the ice pads are onshore: the North Shore well will use directional drilling to target a prospect under the Kuparuk River Delta, while the Sak River well and sidetrack will use directional drilling to target offshore prospects under state waters of the Beaufort Sea.

The main ice road will start at the S-Pad in the Prudhoe Bay field and extend approximately six miles north to the Sak River pad, the more northerly of the two ice pads. A short spur ice road will extend east from the main ice road to the North Shore pad. Generally the ice roads will be 35 feet wide and six inches thick. The ice pads will be no larger than 600 feet square and will have maximum depths of two feet under the locations of the drilling rig. An on-site camp will support most of the personnel involved in the exploration activities.

Brooks Range has contracted with Nabors Drilling Alaska to use the Nabors rig 16E for the drilling. Baker Energy, a subsidiary of Michael Baker Corp., will provide oversight of drilling operations and, in the event of an oil discovery, will provide engineering, facility design and operations management services, Thompson said.

Jim Winegarner, vice president of land and external affairs for Brooks Range Petroleum, told Petroleum News that the North Shore No. 1 well will target a structural high, updip of a prospect where the Mobil Gwydyr Bay South No. 1 well tested oil in 1974. The target prospect lies in an Exxon, Chevron and ConocoPhillips lease — the lease owners have expressed support for a farm-out for the prospect, Winegarner said.

The Sak River well and sidetrack will target offshore Gwydyr Bay prospects in AVCG acreage.

“Our Sak River No. 1 and No. 1A well will first drill a leg to test what we can see on seismic as a thick upper Kuparuk sand,” Winegarner said. “We’ll come back and sidetrack the well to a structural closure that we see in the lower Kuparuk.”

The Sak River prospects used to be in the BP-operated Sak River unit. BP had planned to drill in the unit in the winter of 2002-03, with AVCG holding a 38 percent working interest in the well. But that well was never drilled and the Sak River unit was later terminated.

Environmentally responsible

Winegarner emphasized the efforts AVCG/Brooks Range has made to support environmentally responsible exploration and development. According to the plan of operations “the proposed ice road and pads were sited to minimize the number of future exploration/appraisal wells needed prior to future development. … In order to use the exploration wells in a development/production effort, the surface locations will be selected to maintain the Beaufort Sea coastline and the Kuparuk River main channel setback distance of 500 feet and one-half mile, respectively.”

And the use of directional drilling from onshore well pads will eliminate the need to drill from offshore locations.

“BRPC’s proposed exploration activities were well received by both the North Slope Borough Planning Commission and the Alaska Eskimo Whaling Commission,” the plan of operations says. “Both groups recognize and appreciate the selection of onshore directional drilling, which is the environmentally preferred alternative for field development, for exploration phase activities.”

Thompson also emphasized the critical importance of safety and the environment in AVCG/Brooks Range’s business strategy.

He also said that the company is a niche independent, exploring in the central North Slope, onshore near the existing pipeline infrastructure, and also building a portfolio of satellite exploration prospects. Since 1999 the company’s North Slope acreage has grown from a little less than 5,000 acres to about 180,000 acres, he said.

Focus on ‘billion-dollar fairway’

The company is particularly focusing on what is known as the “billion-dollar fairway,” an area that Thompson has described to Petroleum News as “a north-south trending long rectangle” with a western edge a few miles inside NPR-A and an eastern boundary reaching the Kuparuk and Tarn oil fields. The fairway extends north to south from the near-shore Beaufort Sea to an area several miles south of Tarn. The Alpine oil field and its satellites lie inside the fairway.

“We think this is a rich area still, not fully explored,” Thompson said.

AVCG/Brooks Range had an interest in the Cronus unit that Pioneer drilled in the winter of 2005-06; Cronus lies south of the Colville River unit. The Cronus well encountered a vertical oil section but the reservoir quality was too poor to produce, Thompson said, adding that his company is looking at areas where it thinks that the reservoir quality is better.

The company also holds a small acreage position in the Slugger unit, in the eastern North Slope, southwest of Point Thompson and immediately west of the Arctic National Wildlife Refuge.

Thompson said that AVCG/Brooks Range has a more than $60 million exploration budget for land acquisition, seismic acquisition and drilling. Plans include two wells per winter drilling season in 2007-08 and 2008-09.

“Keep your eye on us because we’re going to grow from here,” Thompson said.



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