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Vol. 15, No. 4 Week of January 24, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Farm-in at North Tarn

Brooks Range Petroleum to operate exploration program on Eni US lease

Kristen Nelson

Petroleum News

Brooks Range Petroleum Corp. has added another exploration prospect to its North Slope agenda.

BRPC, the operating company for Alaska Venture Capital Group, has applied for operations approval for an exploration program at North Tarn, west of the Kuparuk River unit, on a lease owned by Eni US Operating Co.

The farm-in, which requires drilling the North Tarn No. 1 well, will earn a 24 percent interest in the lease for AVCG, 20 percent for TG World, 20 percent for Ramshorn and 16 percent for Bow Valley, BRPC told Alaska’s Division of Oil and Gas. Those interests total 80 percent so Eni will retain a 20 percent interest in the lease.

Jim Winegarner, BRPC’s vice president of land and external affairs, told Petroleum News in a Jan. 21 e-mail that the North Tarn No. 1 is the third well on the drilling schedule this winter, and would be drilled with Nabors Rig 16E after the Beechey Point unit Sak River No. 1A and the North Shore No. 3 wells are drilled.

“Given the short winter exploration drilling season, drilling a third well this winter will be challenging. If we do not drill the North Tarn No. 1 well this season, we will plan to drill it in 2011,” Winegarner said.

Armstrong Alaska paid $181.17 per acre, a total of $463,795.20 for the 2,560-acre tract, ADL 390680, in the state’s 2004 North Slope areawide oil and gas lease sale. Eni acquired the lease from Armstrong in the summer of 2005 when it bought Armstrong Alaska’s assets on the North Slope. The lease has a fixed royalty rate of 16.67 percent and expires in 2012.

Winegarner said ADL 390680 is one mile west of the western Kuparuk River unit boundary.

It is north of the Kuparuk Tarn development, discovered in 1991 by ARCO Alaska at its Bermuda No. 1 well in 1991.

Multiyear program possible

BRPC told the state that North Tarn exploration operations are expected to begin in February with completion at the end of the winter tundra travel season.

The program includes a 4-mile ice road from existing Kuparuk River unit gravel roads to the North Tarn ice pad location.

An ice drill pad will be constructed at the North Tarn site and work may include a short-term production flow test. “If significant hydrocarbons are found during drilling, the well may be tested to confirm flow rates and reservoir characteristics,” the company told the state.

The drill pad will be no larger than 500 feet by 500 feet with facility layouts similar to previous BRPC exploration programs at the Sak River prospect.

The company said a comprehensive evaluation of the surface use area was completed in August 2009 and the proposed ice road route and pad location were surveyed by foot, helicopter and aerial photography to determine cultural resources present in the area and to select rig transport suitability.

BRPC said the ice pad site was selected to minimize the number of exploration or appraisal wells needed prior to development.

A modular camp, supplied with the drilling rig, houses some 60 people and will be used to support exploration activities.

The proposed schedule shows 14 days of pre-pack ice road alignment beginning in February and 30 days of ice road construction in February and March. Mobilization of the camp and drill rig is estimated to take 10 days in March with 45 days in March and April scheduled for drilling, followed by 10 days to demobilize the camp and rig in April and May.

Beechey Point unit

BRPC is the operator for a multiyear program near infrastructure on the central North Slope, and that program is its focus this winter.

The company drilled the North Shore No. 1 and Sak River No. 1 wells in the Gwydyr Bay area north of the Prudhoe Bay unit in 2006-07. It sidetracked and tested the North Shore at more than 2,000 barrels per day the following year.

Alaska’s Division of Oil and Gas approved the formation of the Beechey Point unit at North Shore in August. BRPC has said it wants to fast track development at the find, perhaps using trucks to transfer North Shore oil to a tie-in with the Kuparuk pipeline. The company told the state that development of several small oil accumulations in the area is a possibility.

BRPC received drilling permits in late December from the Alaska Oil and Gas Conservation Commission for two sidetracks from the Sak River well, Sak River 1A and Sak River 1B.

Winegarner said BRPC is Alaska’s most active oil explorer.

“The current tax credit system in Alaska is sustaining our current level of exploration,” he said. “However, increasing exploration tax credits and/or allowing explorers to cash earned credits sooner would allow the BRPC Group to conduct a higher level of exploration activity in Alaska in future winters.”

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