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Vol. 10, No. 49 Week of December 04, 2005
Providing coverage of Alaska and northern Canada's oil and gas industry

Five’s the likely number

One major, two independents plan North Slope exploration wells this winter

Kay Cashman

Petroleum News Executive Editor

Three oil companies are planning to drill a total of five exploration wells on Alaska’s North Slope this winter, two of them wildcats and three closer to infrastructure.

FEX, a subsidiary of Calgary-based independent Talisman Energy, is drilling the wildcats in the National Petroleum Reserve-Alaska. Independent Pioneer Natural Resources is looking at two wells — one in its NE Storms unit and one in the Cronus unit where AVCG and ConocoPhillips are also owners. And ConocoPhillips filed a lease exploration plan Nov. 29 for one well at its Antigua prospect.

Traditionally one of the most active explorers on the North Slope, ConocoPhillips is spending very little money on Alaska exploration compared to previous years as its Antigua well is close to infrastructure. But the Houston-based major is expending funds on a number of other North Slope projects this winter, including bringing Colville unit satellites CD3 and CD4 online by fall 2006 and drilling five Northeast West Sak viscous appraisal wells in the Kuparuk unit south of Milne Point. (Two of the wells will be from gravel pads and three from ice pads.)

Lots of in-field work

And ConocoPhillips and BP, the only two companies that operate producing oil fields on the North Slope, are keeping drilling companies busy with in-field work. According to executives from the state’s two largest drilling companies activity in producing units is up appreciably from last year.

Dave Hebert of Nabors Alaska Drilling and Ron Wilson, Doyon Drilling, told Petroleum News in late November that oil companies seem more willing to enter into long-term contracts for rigs than in previous years.

Hebert, Wilson and Phil Snisarenko, top executive at the state’s third largest drilling company, Nordic Calista, expect exploration drilling to increase substantially next winter.

ConocoPhillips to drill Antigua

ConocoPhillips is permitting four wells at Antigua (see map), but according to the lease plan of operations it just filed with the state Division of Oil and Gas the company expects to drill just one of those wells this year. (See related Whiskey Gulch story in this issue.)

The four well locations being permitted are as follows: Antigua 1, section 35-T10N-R10E, UM; Antigua 2, 9-T9N-R11E, UM; Antigua 3, 1-T9N-R10E, UM; and Antigua 4, 11-T9N-R10E, UM.

ConocoPhillips told the state it hopes to start ice road and pad construction Jan. 15 and initiate drilling in March using the new Arctic Fox No. 1 rig, designed at Pioneer’s request by JV partners Doyon Drilling and Akita Drilling.

The main ice road system will begin near Kuparuk Drill Site 1J which is north of Antigua.

After Pioneer has finished drilling at NE Storms and Cronus the Arctic Fox will be moved to Antigua. But if Pioneer elects to drill additional wells at NE Storms or Cronus this winter because of what it finds in the first wells, then Antigua would likely be bumped to next winter.

The Antigua prospect leases are owned by ConocoPhillips, Pioneer, Unocal (now Chevron) and ExxonMobil.

Since August ConocoPhillips has held public meetings to get input from permitting agencies and local residents and keep them informed of Antigua drilling plans, including meetings at Barrow and the villages of Atqasuk, Nuiqsut, Anaktuvuk Pass and Wainwright.

New player drills in NPR-A

A first-time operator in Alaska, FEX (formerly called Fortuna Energy) is looking at an aggressive wildcat exploration program in NPR-A, starting with two wells this winter.

The wells will be drilled by Nabors Rig 14E south of Cape Simpson and west of the Ikpikpuk River near the eastern border of the Northwest Planning Area, 64 miles southeast of Barrow and 154 miles west of Prudhoe Bay.

The Calgary based independent is looking at drilling approximately eight NPR-A wells (from seven ice pads) in the next two years, which would require adding at least one more rig for next year’s winter drilling season.

The seven drill site locations are as follows: Lease AA-085574, ice road origin, 15-T15N-R11W, UM (Aklaq 1); AA-085503, two miles, 34-T15N-R12W, UM (Aklaq 2B); AA-085574, one mile, 15-T15N-R11W, UM (Aklaq 1A); AA-085494, 10 miles, 23-T14N-R14W, UM (Aklaqyaaq 1); AA-085503, seven miles, 29-T15N-R12W, UM (Aklaq 2); AA-085486, seven miles, 7-T13N-R14W, UM (Amaguq 1); and AA-085503, two miles, 31-T15N-R12W, UM (Aklaq 2A).

Four additional drill sites (Uugaq, Kanayuq, Siulik and Agviq) were identified by FEX as possible future drill locations.

The overall ice pad dimensions will be approximately 500 by 500 feet. The pads for construction camps will be approximately 300 by 300 feet. One of the camps will be at the airstrip near Aklaq 1; additional camps will be located at the pads on the well sites.

Up to 31 miles of ice road — typically 40 feet wide and 6 inches thick, with ice pullouts or widened areas to facilitate equipment — will be constructed in a new right of way connecting the drill sites and water sources.

FEX plans to construct ice airstrips to transport fuel, supplies and personnel each year. They will be approximately 5,000 feet long by 200 feet wide to accommodate large aircraft such as C-130s.

No action is only alternative

FEX is up against time constraints to finish two wells this season, partly because not all of the equipment was barged to the staging area at Cape Simpson during the 2005 open water season.

Also pushing the timing envelope was the environmental assessment which BLM public noticed on Nov. 21, announcing the completion of an EA and Proposed Finding of No Significant Impact for FEX’s exploration program. It was prepared to assess and document the environmental impacts FEX’s drilling proposal.

The public review started on Nov. 22 with comments due by Dec. 12.

“Based on limitations imposed by lease stipulations and staging at Cape Simpson that has already occurred, only one alternative warrants further consideration at this time” and that is “no action,” the finding said.

Under the no-action alternative, exploratory drilling on FEX’s oil and gas leases would not be allowed: “FEX permit applications to BLM would be denied, and no access, drilling or drilling support activities would occur on federal lands in the NW NPR-A and no access via the NE NPR-A would occur,” the finding said.

FEX met with local communities to get input on its plans, hosting open houses in Barrow, Wainwright, Atqasuk, Nuiqsut and Point Lay and meeting with local groups such as the NPR-A Subsistence Advisory Panel and Iñupiat Community of the Arctic Slope, among others.

Arctic Fox to arrive in early December

Pioneer is planning to drill its two North Slope exploration wells using the soon-to-be-delivered Arctic Fox No. 1, a new, innovative Arctic rig (see Antigua map for Cronus well permits).

The Dallas-based independent filed a plan of operations with the Division of Oil and Gas in November to drill the Cronus 1 well this winter in the newly approved 11,343-acre Cronus exploration unit.

Unit operatorship is being transferred from ConocoPhillips to Pioneer, which is farming into the unit.

In August when ConocoPhillips filed its unit application it was the sole owner of the leases, but the company subsequently entered into the deal with Pioneer and assigned 30 percent of its working interest to AVCG. The leases were originally part of the larger Southeast Delta exploration unit, dissolved in 2003 when ConocoPhillips elected not to drill a Cronus well.

The Cronus target is Albian-aged submarine fan turbidite sands in the Torok formation, correlative to the section in the Nanuk 1 well 16 miles to the northwest. Cronus 1 will be drilled on state leases east of the Colville River about 30 miles south of the Beaufort Sea.

Access to the ice pad will be via an 8-10 mile ice road that travels west from existing facilities at Kuparuk, Drill Site 2P (Meltwater).

Hailstorm well at NE Storms

Pioneer also plans to drill one of the prospects in its newly approved NE Storms exploration unit south of Prudhoe Bay.

Pioneer and ConocoPhillips each have a 50 percent working interest in the leases.

The unit plan calls for drilling operations on the Hailstorm prospect well to be complete by June 1, 2006, and by Sept. 1, 2007 to commit in writing to drill a Thunderhead prospect well; and to drill that well by June 1, 2008.

“The primary exploration target is the Ivishak sandstone, with the possibility of encountering other hydrocarbon-bearing sandstones,” the division said.

No wells have been drilled in the unit to date.Prospects consist of structural closures in the Ellesmerian that have been defined by 3-D seismic mapping, from a 3-D program shot by BP.

No Ayak well this year

Anadarko Petroleum told state officials in a September pre-application meeting that it was considering drilling its Ayak oil prospect in the old Slugger unit south of the eastern North Slope’s Badami unit this winter. The drilling would depend on a partnership deal coming together in time for the short North Slope winter drilling season.

The latest word from state officials was that an Ayak well would not be drilled this winter.

No drilling in NPR-A for ConocoPhillips

ConocoPhillips, to date the most active driller in NPR-A, has staked locations for four wells near the Kokoda prospect it drilled in NPR-A last winter — Nugget 2, Noatak 2, Hornet 1 and 2. And it also filed a notice of staking for the Aviullaavik 1 and 2, which lie between the areas staked by FEX for Aklaq 2 and Aklakyaaq 1.

Although the company has not officially said it will not drill in NPR-A this winter, ConocoPhillips does not have a rig under contract for NPR-A and has told government officials it won’t drill this season.



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