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Vol. 22, No. 47 Week of November 19, 2017
Providing coverage of Alaska and northern Canada's oil and gas industry

First oil at 1H NEWS

Conoco’s Bruner says 2nd CD5 expansion planned, 10 more wells, first oil in 2019

Kristen Nelson

Petroleum News

There is tremendous opportunity for ConocoPhillips on the North Slope, but there are challenges and capital is scarce, Lisa Bruner, the company’s vice president of North Slope operations and development, told the Resource Development Council’s annual conference Nov. 15 in Anchorage.

An example of both opportunity and challenge is 1H NEWS, the Northeast West Sak development at 1H pad in the Kuparuk River unit. The company took the opportunity of the conference to announce the startup, on Nov. 4, two months early, of viscous oil production from 1H NEWS.

Bruner said 1H NEWS, which involves in-fill wells in the West Sak field, was sanctioned in 2015. But in 2016, when oil dropped to $28 a barrel, the project was significantly challenged, was put on hold and teams working on it went back to the drawing board.

She said ConocoPhillips went back to work on the project early this year, with facilities installed through the last winter season and drilling beginning in August.

The 19-well development, with four producers, cost some $400 million to develop and involved a 9.3-acre expansion of the existing 1H drilling pad.

“1H NEWS is an exciting project for us,” ConocoPhillips Alaska President Joe Marushack said in a press release. “Viscous oil is more challenging to produce, but state-of-the-art technologies are allowing us to pursue projects like this that put more oil in the pipeline.” He called the project another example of what the company does well, “bringing good projects online safely with new production and revenues for Alaska.”

It is the largest investment in viscous oil at Kuparuk since 2004, ConocoPhillips said.

Horizontal multilaterals

1H NEWS will be developed with horizontal multilateral wells supported by vertical injectors.

Bruner said the first pentalateral well is online at 1H NEWS, and is the first rotary-drilled pentalateral with access to all laterals, provided through junctions installed at each lateral which give the company access with coiled tubing drilling to clean out any sand which accumulates over time. In addition to being online two months ahead of schedule it is also under budget, with the $400 million cost $60 million under the initial estimate.

The well is still cleaning up, Bruner said, but is likely to be the highest producing well out of West Sak. There were a couple of historic West Sak wells which peaked at more than 5,000 barrels per day, she said, and the new pentalateral is believed to be on its way to that, with more than 29,000 feet of horizontal section.

Estimated peak gross production at 1H NEWS will be 8,000 bpd, expected next year.

Legacy fields

At a Nov. 8 ConocoPhillips analyst and investor meeting, Al Hirshberg, ConocoPhillips executive vice president of production, drilling and projects, said the company is undergoing a renaissance in legacy assets in Alaska, with increased capital to pursue infrastructure-led programs around the company’s core position.

Bruner called the company’s legacy fields its bread and butter and said while they are not easy fields to run because of aging infrastructure, they provide needed infrastructure for infill drilling and optimization.

She said coiled tubing drilling at Kuparuk accounts for more than 22 percent of production there, some 19,000 bpd, with 130 CTD wells drilled since 2009.

The company is also seeing results from rotary drilling, with two of the longest wells at Kuparuk, more than 25,000 feet lateral, as well as the first pentalateral well at West Sak.

CD5 extension

Bruner said ConocoPhillips completed the first extension of CD5, CD5X, in the 2017 winter season, increasing from 15 to 33 wells, with 22 currently online and no footprint expansion. CD5 was expected to produce at some 16,000 bpd when it came online in October 2015, but is currently producing at 28,000 bpd, with the top two producing wells in the state.

ConocoPhillips will be doing a second expansion, CD5X2, she said, with 10 more well slots added and no footprint expansion. First oil from CD5X2 is planned for June 2019, with drilling to begin after Greater Mooses Tooth 1 is finished.

Fiord West

Fiord West was discovered more than 15 years ago, Bruner said, but development was challenged because a new drill site couldn’t pass economic muster.

But ConocoPhillips has a new extended reach drill rig being built, due to begin drilling in 2020, and with that rig the company can access Fiord West from an existing drill site. A small bit of gravel will be added to CD2 at Alpine, she said, and the Fiord West resource will be drilled from there.

First oil is planned for August 2021, with peak Fiord West production estimated at 20,000 bpd.

The company sees at least 10 years of opportunity for extended reach drilling, another billion dollars of investment around existing fields, she said.

With the current rigs wells can reach 18,000 to 28,000 feet; the ERD rig will have a reach of 33,000-plus feet.

Exploration drilling

Bruner said 2018 will be the company’s largest Alaska exploration program since 2002, with up to five exploratory wells planned, four in the National Petroleum Reserve-Alaska and one on state acreage, with as many as seven bottom hole locations. A seismic program is also planned.

The wells are all in permitting, she said, so it’s not possible to say how many will be drilled. Three are at the previously announced Willow discovery, two appraisal wells and one exploration well; there is an exploration well planned in the Colville River unit; and another south of Alpine.

Safety

Bruner also updated the RDC audience on ConocoPhillips’ safety focus, saying that when the company operates safely it operates efficiently.

In 2009-11, she said, too many people were getting hurt on the job. In 2012 the company instituted what it called an “incident-free culture” with a focus on leadership behaviors.

And there was a step change, she said, with total recordable incident rates down substantially.

But we’re not done, she said: we’re still hurting people, so it’s time for another step change.

This time around, she said, the goal is to create a learning organization. Bruner said the focus is on being less surprised by human error and spending more time learning. The goal is that everyone goes home without being hurt, she said, and the job is to learn from the people doing the work every day.

We’re not going to be error free, she said, but we can be incident free.



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