Pioneer Natural Resources is testing rates from a second horizon at its Cook Inlet Cosmopolitan prospect, the company’s president and chief operating officer, Tim Dove, said Nov. 28.
Dove, in remarks to the FBR Capital Markets Investor Conference, said the company is drilling a two- to two-and-a-half-mile extended reach horizontal well. “And this is actually re-entering an existing wellbore and testing another horizon in this resource that has not been tested,” he said.
Pioneer Natural Resources Alaska President Ken Sheffield said in mid-November that the company was “wrapping up drilling operations” on the sidetrack Hansen 1A lL and hoped to have it “flow-tested by year end” (see story in Nov. 25 edition of Petroleum News).
The Cosmopolitan resource has been pegged at 30 million to 50 million barrels, and Pioneer has 100 percent of the working interest.
Dove said Pioneer has good information on rate from the first horizon “because it’s already been tested.”
The discovery well, the Starichkof State No. 1, was drilled by Pennzoil in 1967. The 12,112-foot vertical well was drilled from a jack-up and the company reported encountering the top of the Hemlock formation at 6,745 feet. Former Cosmopolitan operator ConocoPhillips drilled the Hansen 1 and 1A wells, a long-reach well and sidetrack, from the same onshore pad Pioneer is using.
Dove said in mid-2005 that the 2003 Hansen well and sidetrack “tested at a stabilized rate of 600 to 800 barrels a day over different intervals that lasted for three to four months.”
Second horizon the goalThe current well, the Hansen 1A 1L, targeted the Lower Tyonek sand-prone interval found in the Starichkof well, according to the third plan of exploration approved for Cosmopolitan by the Alaska Division of Oil and Gas in 2006.
“The whole objective here is to test this second horizon for its rate,” Dove said.
The purpose of the rate test is to “determine whether we can go essentially directly to a development of this project.”
With an oil refinery about 60 miles away, the Tesoro refinery at Nikiski, “we’ve got a ready market for oil.”
Pioneer expects to know something by the end of the year on the test results.
“So you should be paying attention to this — and it could be a potential new Alaska development for us,” Dove said.
Ready to drill at OoogurukAt Oooguruk, the company’s development off the North Slope near Kuparuk, Dove said the company is ready to begin drilling in December. “All the other facilities have been put in place over the last couple of years.”
The first wells to be drilled will be injection and disposal wells, with the first producing wells to be drilled in the first half of 2008, he said.
Pioneer expects first sales of oil from Oooguruk in mid-year 2008.
Drilling will be ramped up through 2010 — as will production rates, Dove said. Peak production of 15,000 to 20,000 barrels per day is expected in 2010 from the estimated 70-90 million barrels of oil. Pioneer has a 70 percent working interest at Oooguruk; its partner is Eni.
Dove said Pioneer thinks “there are other opportunities in the area that we can also reach from this island. …”
“So this will be a major growth vehicle for us, too, as we ramp up the production from this facility.”
The company has spent hundreds of millions at Oooguruk but hasn’t yet been able to book reserves because of Securities and Exchange Commission guidelines, but expects Oooguruk to contribute “substantially, without a lot more capital” going into the project since capital costs remaining are for drilling.
With Oooguruk and other projects coming online, the company’s cash flow position should improve he said, although “obviously we haven’t seen the other shoe drop in terms of what’s going to happen with costs if we really are in a 95-dollar-oil world on a sustained basis, because costs today, you’d say, are probably more oriented toward the 70-dollar plateau we seem to have reached earlier in 2007.”