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Vol. 22, No. 37 Week of September 10, 2017
Providing coverage of Alaska and northern Canada's oil and gas industry

Guitar unit approved

Alliance Exploration plans 2 wells to Kuparuk, Ivishak near Prudhoe Bay boundary

Alan Bailey

Petroleum News

Alaska’s Division of Oil and Gas has approved an application by Alliance Exploration LLC to form the Guitar unit on the North Slope, adjacent the southwest side of the Prudhoe Bay unit. Alliance had originally called the proposed unit Hemi Springs but had later requested a name change to Guitar, according to the division approval document, issued on Aug. 23.

The unit consists of three state leases situated about 17.5 miles west-northwest of Deadhorse. The lease tracts had previously been part of the Hemi Springs unit that was formed in 1983 and terminated in 1992. Alliance has a 100 percent working interest in the leases, while Samuel Cade and Daniel Donkel have small overriding royalty interests. Alliance Exploration, formed in November 2016, is a wholly owned subsidiary of Linger Trust, according to Alaska corporation records. According to paperwork filed with the division, Samuel Nappi is president of Alliance.

Plan of exploration

In conjunction with the unit approval the division has also approved a plan of exploration for the Guitar unit. The exploration plan says that Alliance will drill a well in lease tract ADL 392104 into a seismic anomaly in the Kuparuk C, preferably during the winter of 2018, but no later than the winter of 2019, depending on how soon the company can secure the necessary permits. The well will penetrate to the base of the Ivishak and a lateral well will be drilled in the Kuparuk C. Depending on the results from that first well, Alliance may drill a second well in the same tract in the following year. The second well will target a structural high in the Ivishak, bounded by a fault, the plan of exploration says.

Positive results from the first well will trigger the inclusion of a delineation drilling plan in a second plan of exploration, which must be filed by July 1, 2019. And if the delineation drilling demonstrates the presence of a commercially viable hydrocarbon accumulation, Alliance will propose a full development program, the plan of exploration says.

According to division records, without unitization two of the leases would have expired at the end of June.

Hemi Springs well

The three leases in the unit together with a fourth lease, held by ConocoPhillips and partners, form a square shape, with the ConocoPhillips lease in the northwest quadrant. ConocoPhillips is holding that fourth lease because the Hemi Springs State No. 1 well, drilled by ARCO in the lease tract in 1984, was certified as capable of producing hydrocarbons in payable quantities from the Kuparuk C, according to the division approval document. The document says that the Hemi Springs well also penetrated and tested the West Sak and Ivishak formations: A test in the West Sak formation produced only water and diesel mud, while log data in the Ivishak looked promising but the well tested wet in that formation.

Storms 3-D seismic

The results from the Hemi Springs State No. 1 well coupled with interpretations of the Storms 3-D seismic survey, shot by ConocoPhillips in 2005, underpin Alliance’s unitization application and the company’s desire to test the Kuparuk C with a new well, DOG’s approval document says. The Storms survey was released to the public in late 2016 under the terms of state credits for seismic surveying.

Alliance has used an interpretation of the logs from the Hemi Springs well to infer the location of the oil-water contact at the base of the Kuparuk C oil accumulation and has used the 3-D seismic to trace that contact into the Guitar unit leases - the seismic interpretation suggests space for a potential oil accumulation up dip of the oil-water contact, the DOG approval document says. And, although Alliance’s well will target the Kuparuk C and Ivishak, oil shows have been demonstrated in the West Sak and Ugnu across the region, the document says.

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