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Vol. 11, No. 34 Week of August 20, 2006
Providing coverage of Alaska and northern Canada's oil and gas industry

Slope heating up

On the low side, 10 North Slope exploration wells planned; 19 on high side

By Kay Cashman & Alan Bailey

Petroleum News

The upcoming North Slope winter exploration season is shaping up to be one of the busiest in at least a decade with 10 to 19 wells possible.

All but one of the drilling rigs that can be used for exploration have been spoken for, which would produce a shortage in itself if it weren’t for the fact the real shortage appears to be of support equipment such as camps and rolligons.

Operators planning exploration drilling this year include: ConocoPhillips in the National Petroleum Reserve-Alaska; Eni Petroleum at Rock Flour; Anadarko Petroleum at Jacob’s Ladder and maybe in the gas-prone Brooks Range Foothills; AVCG and Brooks Range Petroleum near Gwydyr Bay; and FEX, a subsidiary of Calgary-based independent Talisman Energy, in NPR-A.

BP also plans to drill the gas hydrate stratigraphic test well it was hoping to drill last year. The well will be drilled into the Mount Elbert prospect one half mile east of the Milne Point unit E-pad, BP said.

A Kerr-McGee spokesman told Petroleum News in early August that the company was moving ahead with exploration plans, but that it was too early (following the Aug. 10 merger with Anadarko) to talk about specifics. Industry sources told PN the company is actually planning three development wells off Oliktok Point that would be part of Kerr-McGee’s proposed Nikaitchuq oil field development.

Sister companies Winstar Exploration and Ultrastar Exploration continue to edge towards drilling at the Dewline Deep prospect, west of Point McIntyre, but drilling this winter is not yet a certainty.

Newcomer Savant Resources is also looking at North Slope exploration, but nothing has been confirmed.

Pioneer Natural Resources (see related story on page 9,) Chevron and Shell have no North Slope (on or offshore) drilling plans for the coming winter.

Excluding development drilling by Kerr-McGee, BP’s gas hydrate well, and anything that Winstar/Ultrastar or Savant might do, there are as few as 10 and as many as 19 North Slope exploration wells in mid-to-advanced stages of planning for this coming winter.

Rigs and more rigs

New rigs on the North Slope this year will be Kuukpik Drilling’s rig 5, which ConocoPhillips is having refurbished for drilling in NPR-A, and the Akita-Doyon JV’s Arctic Wolf rig.

The Arctic Wolf is “coming out of the construction yard at Nisku, Alberta,” Akita said Aug. 16, and will drill two to three wells in Alberta, then be trucked to Alaska by late November. FEX said it will then be shipped to Cape Simpson for NPR-A drilling.

A PN source said an Akita rig built about four years ago for exploration drilling in Canada’s Mackenzie Delta might also be coming to Alaska to drill wells for Anadarko or ConocoPhillips.

Since ConocoPhillips has reportedly locked up several rolligons, expectations are it’s looking at bringing in at least the Kuukpik rig, and maybe another, to do remote work, perhaps at Kokoda and/or Puviaq in NPR-A, but so far the company has not said anything publicly about its exploration plans.

A reliable PN source said ConocoPhillips is hoping to drill seven wells in NPR-A this coming winter — three or four of those with Kuukpik Rig 5, but he also said plans for a second rig were “in flux” and that it would take “optimal conditions” for the Kuukpik rig to drill that many wells in the North Slope’s short winter drilling season.

Nabors Alaska Drilling still has rigs that can be refurbished, but how long it will take to get them ready for the slope depends on the rig and where it would be drilling, company officials said.

The one exploration rig that does not appear to be under contract is the Akita-Doyon JV’s Arctic Fox, which is under contract to Pioneer. Company officials said they are in negotiations now with other explorers who are interested in using the rig this winter.

Eni looking at three wells

Eni will be using Nabors 27E to drill up to three wells in its Rock Flour exploration unit along the southeast corner of the Kuparuk River unit and just a few miles west of the Prudhoe Bay unit. (See story and map on page 19 of the Aug. 28, 2005 issue.)

In its permitting paperwork Eni said it would drill the wells from three ice pads with access via a nine and a half mile ice road from Kuparuk River MP1.

It will be the first time the major has operated on Alaska’s North Slope.

Anadarko to drill at Jacob's Ladder

Anadarko’s Alaska spokesman Mark Hanley told Petroleum News Aug. 16 that the company was almost certainly going to drill a well at its eastern North Slope Jacob’s Ladder prospect, but two wells in the gas-prone Brooks Range Foothills were a less likely possibility because of equipment availability.

Anadarko has held pre-application meetings with the state Division of Oil and Gas. A division official told PN that the company has an interest in eventually drilling four prospects south of Pump Station 2 and well west of the Haul Road. The possible southern prospects are Snow Goose, Arctic Char, Humpy and Gubik.

The state official also confirmed what Anadarko said last year, which is that it would also like to drill a well at its Ayak prospect in the expired Slugger unit near Jacob’s Ladder and south of Badami.

AVCG drilling near Gwydyr Bay

Nabors Rig 16E is under contract to AVCG/Brooks Range Petroleum, with its partners TG World Energy Co. and Ramshorn Exploration, a subsidiary of Nabors Industries.

Ken Thompson, president of Brooks Range, the operating arm of AVCG, said the company hopes to drill two wells in the Gwydyr Bay area north of the Prudhoe Bay unit this winter. The company is also looking at seismic acquisition over its North Slope acreage this winter.

In the past AVCG has described Gwydyr Bay as a single Kuparuk sands prospect, but the company has now identified two prospects in the area, with different surface and bottom hole locations, Thompson said.

“Initially we were just going to drill in one prospect,” Thompson said. “We then acquired seismic and reviewed well records and identified a second prospect.”

Plans should be firmed up by the end of August, he said.

Talisman’s FEX looking at 3-4 wildcats

FEX is moving ahead with plans to drill three to four wildcat exploration wells in NPR-A this winter, Barry Nelson, spokesman for Talisman, told PN Aug. 1. Nelson declined to say which prospects the company would target, but industry sources say FEX is hoping to drill at least one well in its Caribou prospect, a few miles from where its former partner in that prospect, Total E&P, drilled a well in 2003.

The company has three rolligons under contract for its exploration program.

In the winter of 2005-06 FEX completed the Aklaq 2 well, south of Cape Simpson and west of the Ikpikpuk River, and drilled a sidetrack to that well. However, weather problems interfered with drilling, so the well was never tested, Nelson said.

The company will use two drilling rigs in NPR-A for the 2006/2007 drilling season — Nabors 14E rig currently stacked at Cape Simpson and Akita-Doyon JV’s Arctic Wolf.

Ultrastar working on facility access, rig

Jim Weeks, managing member of sister companies Winstar and Ultrastar, told PN Aug. 15 that Ultrastar is getting closer to drilling its Dewline Deep prospect west of Point McIntyre.

Ultrastar needs an access agreement for the use of the processing facilities at the BP-operated Lisburne field and a suitable drilling rig before it can drill a well.

Negotiations over facility access have proved very slow, although Weeks emphasized that everyone was cooperating and that an access agreement was close.

“It’s like molasses in January in Fairbanks,” Weeks said. “… Nobody’s being uncooperative — we’re just at the bottom of the stack.”

Weeks said that he has asked BP about the potential to use the two drilling rigs that it has in the Prudhoe Bay eastern operation area, given that the eastern operating area is closed down because of the transit line corrosion issue.

Ultrastar plans to drill Dewline Deep from the Point McIntyre No. 1 drill pad. The company had considered sidetracking a well that ARCO drilled in 1991 but now thinks that it will drill a dedicated well.

The Point McIntyre pad is on the coast and BP has a self-imposed restriction to only drill from the pad during the winter, when the Beaufort Sea is frozen over.

“We’ve got a window from (approximately) Nov. 1 to June 1,” Weeks said.

Last year Ultrastar dropped its leases on the eastern side of the North Slope, near BP’s Badami and Liberty fields. Weeks said that the potential development costs for any oil find in those leases looked too high to be feasible for the small, Alaska-based independent.

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