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Vol. 13, No. 41 Week of October 12, 2008
Providing coverage of Alaska and northern Canada's oil and gas industry

Trekking for gas

Expanding foothills search, Anadarko mobilizing two rigs for three wells

Eric Lidji

Petroleum News

Anadarko will expand its search for natural gas in the Brooks Range foothills this winter, using two rigs to complete up to three wells on state and federal lands in northern Alaska.

Using the Nabors rig 105-E already on site, the company plans to finish drilling the deep Chandler No. 1 well about 12 miles due east of Umiat and then move the rig about 7.5 miles to the northeast to drill the shallower Gubik No. 4 well.

Both wells sit on Arctic Slope Regional Corp. land east of the Colville River.

At the same time Anadarko works on those two wells, the company plans to use the Doyon Arctic Fox rig to drill the Wolf Creek No. 4 well in the National Petroleum Reserve-Alaska, about 40 miles west of Umiat on the other side of the Colville River.

Anadarko staked three possible Wolf Creek well locations in early September with the Bureau of Land Management, the agency within the U.S. Department of the Interior responsible for managing the preservation and development of federal lands.

Anadarko expects Wolf Creek No. 4, in federal lease AA-086604, to be a shallower well, testing the Nanushuk formation at around 4,000 feet.

“This is our plan. It’s pretty solid. … We don’t see any show stoppers right now,” said company spokesman Mark Hanley.

Insulated pads save time

Anadarko started searching for natural gas in the foothills of the Brooks Range this past winter, completing and testing the Gubik No. 3 well and drilling halfway to target depth at Chandler No. 1. Both wells targeted gas, but from different formations.

Using Nabors rig 105-E, Anadarko drilled Gubik No. 3 to around 4,300 feet in January and “encountered natural gas in two zones.” The company moved the rig to the south in late March and started work on Chandler No. 1, planning to drill to about 10,200 feet.

“We knew it was pretty unlikely we’d get the whole thing done. So we did an insulated ice pad and that Nabors rig is sitting there on the insulated ice pad,” Hanley said.

The insulated pad allowed Anadarko to avoid the time consuming process of taking down the rig at the end of last season and putting it back up at the start of this season. Anadarko hopes to use the extra time to complete the three wells this season, an ambitious program.

“We’d like to finish it, but… the plan right now is that the rig will stay there at Gubik 4 over the next summer on an insulated ice pad,” Hanley said.

Program dates back to 1950s

The current Anadarko program in the foothills dates back to the vast exploration efforts of the U.S. Navy and the U.S. Geological Survey in the late 1940s and early 1950s.

During that time, crews working for the two federal agencies drilled dozens of test wells throughout NPR-A, known at the time as Naval Petroleum Reserve No. 4. Those wells included Gubik No. 1, Gubik. No 2 and the first three Wolf Creek wells.

The Navy drilled Wolf Creek No. 1 in the spring of 1951, finding gas in the Chandler formation at 1,500 feet. The well flowed at a rate of 881,000 cubic feet per day of gas, but the Navy never quantified the resource potential of the prospect.

Some geologists believe the extensive gas resources in the foothills are most likely spread over many relatively smaller fields, rather than focused in a few big giants like the oil fields on the North Slope. If that assessment proves correct, Anadarko would need to craft a strategy for tying fields together, or phasing in development, to justify the project.

The Wolf Creek well would expand Anadarko’s efforts into NPR-A.

At a federal lease sale in September, the company picked up additional acreage west of Umiat in NPR-A between the Wolf Creek and Gubik leases.

Pipeline projects multiplying

Anadarko’s exploration program in the foothills, the first explicit attempt to find natural gas in northern Alaska, comes as several companies and a state agency have crews conducting fieldwork related to possible natural gas pipeline projects.

TransCanada and the BP-ConocoPhillips joint venture Denali both hope to gather enough information to hold separate open seasons on competing proposals to build a large overland pipeline to Canada and the Lower 48.

Meanwhile, both Enstar Natural Gas and the Alaska Natural Gas Development Authority are conducting fieldwork related to in-state pipelines or spur line projects.

This confluence of pipeline activity, though still far from actual construction, could create numerous transportation options for Anadarko over the next 10 years.

“We see both of those as potential options for gas, if we find it in commercial quantities,” Hanley said about the in-state and overland options. “And … the sooner we can delineate this thing and figure out what we have, the better off we’ll be for taking advantage of whatever the scenario is that makes the most sense.”

Hanley said Anadarko believes it needs 500 million cubic feet a day to make the foothills economic, but the project might be able to work with daily volumes as low as 250 million cubic feet.

“It depends on timing. It depends on a lot of things. It depends on what we find and how we need to develop the field,” Hanley said.

In announcing its exploration program several years ago, Anadarko said proving up the resources in the foothills would probably take two or three field seasons.

The program is now entering its second winter, and Hanley believes “it’s probably going to be a couple more winters before we have a feel for what we’ve got.”

Which means Anadarko “probably wouldn’t be ready for” the first open season on either a TransCanada or Denali pipeline, both currently scheduled for the second half of 2010.

“By 2010, we’re hoping to understand what we’ve got a lot better and be able to make some commercial decisions. … So, yeah, it’s going to take us a couple more seasons. You can always hit a home run in one season, or strike out, you know?” Hanley said.

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