Linc Energy Ltd. recently spud the first well at the Umiat prospect in 34 years, but weather delays have forced the company to cut back on its previous plans for this season.
The Australian independent spud the Umiat No. 18 well on a federal lease in the foothills of the Brooks Range some 100 miles west of Pump Station 2 using Kuukpik No. 5 rig.
Linc originally outlined a four-to-six well program at Umiat this winter, but following a period of light snowfall early in the season combined with extreme cold snaps, the company is now planning to drill just two wells this winter and cold-stack its rig on location to get a head start on mobilization for the 2013-14 winter exploration season.
Among the work being deferred is Umiat DSP No. 1, a Class II disposal well. Now, Linc plans to dispose of cuttings and drilling fluids using existing North Slope infrastructure.
Other previously mentioned well locations being deferred include the side-by-side Umiat No. 16 vertical and Umiat No. 16H horizontal wells, and the Umiat No. 19 vertical well.
Two wells this winterThe two wells now planned for this winter — Umiat No. 18 and Umiat No. 23H — would still allow Linc to meet “key objectives” for the season, according to the company.
The Umiat No. 18 well will be drilled vertically into the Lower Grandstand formation to collect five 60-foot sections and then continued down below the Lower Grandstand “to assess the deeper resource potential,” according to the company. After reaching its target depth, Linc plans to plug the well back to the Lower Grandstand to conduct a flow test.
Later in the season, Linc plans to drill the Umiat No. 23H well directionally into the same Lower Grandstand interval to provide “comparative flow testing” for economic purposes.
Linc already has a drilling permit from the U.S. Bureau of Land Management for Umiat 23H, but still needs a permit from the Alaska Oil and Gas Conservation Commission.
“It has been a huge team effort to get this first well spudded and I thank all of my team in Alaska and our contractors for the incredible effort it has taken,” Linc Energy CEO Peter Bond said in a statement. “With the first Linc Energy well spudded at Umiat, I am now eagerly awaiting the results from the horizontal well, as that oil flow result will effectively confirm the 50,000-plus barrel per day plan Linc Energy has for the Umiat field.”
The contracted program is a continuation of delays Linc experienced last winter, but could be seen as a mere blip when considered against the entire history of the prospect.
Even though the U.S. Navy discovered the Umiat oil field in 1946 and drilled 12 wells altogether in the vicinity, the field has remained undeveloped because of its remoteness and because the reservoir is shallow, partially frozen in permafrost and of low pressure.
With increasing oil prices and improved technologies, a string of independents eyed the prospect in the 2000s, but none of the companies were able to put a drill bit in the ground.
After Linc acquired Umiat from the small independent Renaissance Umiat LLC in mid-2011, it immediately planned a five-well program for the coming winter, but ultimately delayed the entire program by one year because of “logistical and weather issues.”
First Umiat well since 1979Still, Umiat No. 18 is the first well at Umiat since the U.S. Navy drilled the Seabee No. 1 deep test in the region in 1979, and the first exploration well in the National Petroleum Reserve-Alaska since 2009, when Anadarko Petroleum Corp. drilled Wolf Creek No. 4 to the west and ConocoPhillips drilled Pioneer No. 1 and Grandview No. 1 to the north.
The Umiat field is generally believed to have around 1 billion barrels of oil in place.
The consulting firm Ryder Scott Co. LP recently estimated that the field contains reserves of 154.5 million barrels of proved and probable (P2) oil equivalent and 194 million barrels of proved, probable and possible (P3) oil equivalent. For the purposes of the report, “probable” means there is at least a 50 percent chance of the actual recovered volumes meeting or exceeding the P2 estimate, and “possible” means there is at least a 10 percent chance of the actual recovered volumes meeting or exceeding the P3 estimate.
“It’s not every day that one is able to tap into a billion barrel oil field and we have now done just that,” Scott Broussard, head of Linc’s oil and gas division, said. “The next significant milestone will be the results of the flow tests and the evaluation of the deep well. We are all very excited about the first step in a world class oil development.”