Vol. 26, No.27 Week of July 03, 2022
Providing coverage of Alaska and northern Canada's oil and gas industry

Oil Search unit approved

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New 81,110-acre Quokka unit on Alaska’s North Slope contains Placer leases

Kay Cashman

Petroleum News

On June 22 the Alaska Department of Natural Resources’ Division of Oil and Gas approved Oil Search (Alaska)’s application to form the Quokka unit in the central North Slope. OSA, a subsidiary of Santos Ltd., will be the operator of the new unit.

The Quokka unit lies adjacent to the Southern Miluveach unit (Mustang), the Kuparuk River unit and the Pikka unit.

Three working interest owners are parties to the new unit: OSA, Repsol E&P USA and Finnex.

The Quokka unit covers approximately 81,110 acres of state land that includes eight Placer unit leases on 8,768 acres held by OSA (51%) and Repsol (49%).

Finnex holds four leases on 6,999 acres (100%) that fall within the newly unitized Quokka area.

The balance of the leases on 65,343 acres are owned by OSA and Repsol.

The Placer unit was terminated in conjunction with the June 22 Quokka unit approval.

In his decision to approve the new unit, division Director Derek Nottingham wrote: “A unit must encompass the minimum area required to include all or part of one or more oil or gas reservoirs, or all or part of one or more potential hydrocarbon accumulations. … OSA has submitted confidential geological, geophysical, and engineering data” that supports these requirements.”

OSA’s Dec. 30 application to form the Quokka unit, which was signed by OSA President Bruce Dingeman and was last amended June 17, includes the following: a unit operating agreement; the unit agreement form legally describing the requested unit area, its leases, and ownership interests; a map of the unit; and a plan of exploration.

The application also includes confidential economic and technical data.

No comments received

The division notified OSA by email Feb. 1 that the initial application was incomplete because it did not include all pertinent geological, geophysical, engineering and well data and interpretations of those data directly supporting the application.

Once this information was received, the division deemed the application complete on March 14.

The division then published a notice in two newspapers, which invited members of the public to submit comments by April 23. The agency also sent copies of the application and the public notice to the following interested parties: North Slope Borough, City of Utqiaġvik, City of Nuiqsut, Kuukpik Corp., Arctic Slope Regional Corp., Nuiqsut and Utqiaġvik postmasters, radio station KBRW in Utqiaġvik, Alaska Department of Environmental Conservation, Alaska Department of Fish and Game, Alaska Oil and Gas Conservation Commission and the ADF&G Division of Habitat.

The division received no comments regarding OSA’s application to form the Quokka unit.

Prior exploration

Per the division’s approval, the Quokka unit area has been part of “scattered exploration efforts since 2001 and remains lightly explored outside of the Placer unit area.”

Seven exploration wells have been drilled in the new unit’s acreage.

The area is covered by several proprietary and multi-client 3D seismic surveys. OSA obtained licenses to these surveys as well as surveys covering the Pikka and the Horseshoe units and exploration acreage.

Starting in 2018, OSA undertook a multi-stage reprocessing effort combining 15 separate surveys into one contiguous 3D survey. The resulting volume encompasses more than 1,700 square miles and more than 95% of the operator’s acreage including the Quokka unit acreage.

A crucial element of the reprocessing/merge of multiple seismic volumes covering a large geographic area is the incorporation of acoustic log data from wells. All relevant wells within the merged survey, which had the appropriate well log types, were evaluated to determine seismic phase and tie geologic formations to the seismic data.

OSA has interpreted the merged 3D volume and constructed geomodels incorporating well and seismic data. The geomodel analysis was used to develop maps of reservoir characteristics defining the unit area

Exploration from 1967-2019

The majority of the wells drilled in the Quokka unit are in the northern end of the acreage and have targeted Kuparuk or Brookian prospects.

The central part of the new unit has seen some exploration activity for Kuparuk and Brookian targets, but the southern portion of the proposed area has not been drilled.

Following are the wells that were drilled:

Kookpuk 1 well

The earliest well drilled in the Quokka acreage is the Kookpuk 1 well, which was drilled in 1967 by Union Oil Co. of California to evaluate the Ellesmerian interval.

The well was logged and both sidewall and conventional cores were taken. It was not flow tested, was plugged and abandoned.

Cirque 1 well

Atlantic Richfield Co. (ARCO) drilled the Cirque 1 in 1992. The well experienced a blowout prior to reaching the target interval (Kuparuk) due to elevated pore pressure in the K-10 sands and poor drilling methods. A relief well was drilled during the response (Cirque 1X), and the well was successfully plugged and abandoned.

Cirque 2 well

Cirque 2 was drilled by ARCO in 1992 to evaluate the Kuparuk target that Cirque 1 was unable to reach.

Atlas 1 & 1A wells

Phillips Alaska drilled the Atlas 1 and Atlas 1A wells in 2001, targeting both the Brookian section and the Kuparuk C. The Brookian was conventionally cored in Atlas 1, and sidewall cores were taken in the Brookian and Kuparuk in the Atlas 1A sidetrack. Neither Atlas 1 nor Atlas 1A were flow tested in any zone, and both have been plugged and abandoned.

Placer 1 & 2 wells

ConocoPhillips Alaska drilled the Placer 1 well, which targeted the Kuparuk in 2004. The well logged oil in the Kuparuk C, but it was not flow tested.

Placer 1 was suspended in 2004. The Placer acreage was acquired by ASRC Exploration in 2011, and the Placer 1 well was abandoned in 2016

Immediately after suspending Placer 1 in 2004, ConocoPhillips drilled the Placer 2 well, which also targeted the Kuparuk interval. This well did not find high quality reservoir and was plugged and abandoned.

Cronus 1 well

Pioneer Natural Resources drilled the Cronus 1 well in 2006, targeting Kuparuk and Brookian (Torok) prospects. The well was logged, and rotary sidewall cores were taken in the Torok and Kuparuk, but no flow tests were attempted, and the well was plugged and abandoned.

Cronus 1 is the farthest south well drilled in the Quokka unit acreage.

Placer 3 well

The Placer 3 well was drilled in 2016 by ASRC to evaluate the Kuparuk C in the Placer unit. Sidewall cores were taken in the Kuparuk, and the Kuparuk interval was successfully flow tested, reaching an average rate of 815 barrels of oil per day.

Mitquq 1 & ST1 wells

In December 2019, OSA drilled the Mitquq 1 well approximately 6 miles east of the planned Nanushuk Central Processing Facility in the Pikka unit. The primary target, the Brookian Nanushuk reservoir, had 211 feet of net oil pay, along with 24 feet of net gas pay.

The well also penetrated the Alpine C reservoir, which found 31 feet of net oil pay (39.1° API oil) and 21 feet of net gas pay. The well was logged, and fluid samples were taken.

Mitquq 1 ST1 was sidetracked from the Mitquq 1 well. It encountered 172 feet of net hydrocarbon pay including a gas cap of 29 feet. The well was logged, cored, and flow tested. The flow tests included a clean-up, flow period, and a pressure build-up prior to the final flow test to access deliverability. The well flowed at a stabilized rate of 1,730 bpd from a single stimulated zone.

Reservoirs and accumulations

Geologic, geophysical, and engineering data submitted by OSA to the division include confidential interpretations of 3D seismic data, seismic attribute analysis, structure maps, interval isopachs, net pay maps integrating seismic and well data, interpreted well logs and proprietary petrophysical analyses, well correlations, and geologic cross sections from wells within the new unit and surrounding area.

Based on non-confidential well control and other data, there are multiple reservoirs in the northern part of the new Quokka unit around the Mitquq and Placer wells, and multiple potential hydrocarbon accumulations across the rest of the Quokka acreage, the division said in its unit approval.

Alpine reservoir potential

Per the division’s Quokka unit approval, the Jurassic Alpine sands are productive in several fields across the North Slope, including the Colville River unit and Greater Mooses Tooth unit.

The Alpine sandstone has also been identified as prospective in other locations, such as the Pikka unit.

These shallow marine sandstones were shed generally southward from a northern provenance area that foundered during late Jurassic to early Cretaceous rifting and opening of the Canada basin.

The Alpine interval records the last significant sandstone pulse of Jurassic sedimentation. Alpine sandstones are Quokka unit relative to their counterparts in the Colville River unit.

Kuparuk C reservoir potential

Per the division’s Quokka unit approval the Kuparuk C sandstone is one of the major reservoirs on the North Slope with a long history of production from numerous fields, most notably within the Kuparuk River unit.

The sandstones were deposited on a shallow marine shelf in paleo-topographic lows that formed primarily as a result of late Jurassic and Cretaceous aged rift faulting.

This depositional setting results in dramatically variable sand thicknesses and aerial extent of individual sand bodies. The sandstones were deposited directly above the lower Cretaceous unconformity, or LCU, one of the major unconformities on the North Slope.

The sandstone in the Kuparuk C interval is believed to be sourced primarily from erosion of older sandstones that subcrop below the LCU.

Within the Kuparuk River unit, erosion and re-working of the underlying, aerially pervasive Kuparuk A sandstones provided much of the source sediments, though increased chert content in the Kuparuk C sandstones argues for contribution from provenance areas with Ivishak and older Ellesmerian formations exposed at the LCU, the division’s June 22 approval said.

Outside the Kuparuk River unit, Kuparuk C sandstone is distributed irregularly.

OSA integrated available subsurface control from well data with various seismic attributes to predict the presence of Kuparuk C sandstone within the Quokka unit.

Kuparuk C sandstone generally displays high impedance that may produce a strong peak amplitude anomaly above the LCU when present.

However, due to interference effects of different underlying subcropping strata and the limits of seismic data to resolve both the top and the base of the sandstone when the interval is thin, the amplitude patterns can be complex and sometimes misleading. This can be further complicated by the common presence of dense secondary siderite cement, either in the Kuparuk sandstone or in a thin transgressive lag deposited at the unconformity, which can give a strong amplitude signature, but have significantly diminished reservoir quality.

Siderite cementation and glauconite content are the primary controls on reservoir quality in the Kuparuk River unit causing great variability in porosity and permeability.

Core data reveal that porosity can range from 8 to 30%; permeability can range from less than 0.1 mD to over 3,000 mD.

In areas with little cementation, the Kuparuk C sandstone has demonstrated the capability to produce at very high rates from relatively thin sandstones.

The Kuparuk C sandstone is in production in the Kuparuk River unit, including the 3S drillsite, north of the Quokka unit acreage. Numerous smaller accumulations of Kuparuk C have been discovered and developed outside the unit.

Currently, Kuparuk C sandstone is in production at the Oooguruk unit, three accumulations at the Prudhoe Bay unit (Aurora, Borealis and Midnight Sun), the Milne Point unit, and two separate accumulations in the Colville River unit (Fiord-Kuparuk and Nanuq-Kuparuk participating areas).

The Kuparuk C reservoir is the main target of the Mustang project in the Southern Miluveach unit.

The Kuparuk C is also prospective in the Pikka unit.

This interval was a key objective for the formation of the Placer unit.

As previously mentioned, Placer 3 well in the northern end of the Quokka was tested in the Kuparuk C and determined by the division to be capable of producing in paying quantities.

Brookian reservoir potential

The Brookian sequence has become the focus of much of the exploration activity on the North Slope in recent years. The sections of the Brookian that have drawn the most interest from explorers have been the shelf edge deposits (e.g. Nanushuk formation) and the time-equivalent slope and basin floor fans (e.g. Torok formation), both of which can be distinguished at the seismic scale.

The sandstones consist chiefly of quartz, chert, sedimentary and metamorphic lithic grains (rock fragments), with varying amounts of clay matrix and accessory minerals. Soft lithic components make these Brookian sands susceptible to compactional porosity reduction upon deep burial.

However, this is not a major issue near the Barrow Arch, where potential Torok and Nanushuk reservoirs lie mostly about 4,000 feet and 6,000 feet and were never buried to dramatically greater depths by younger Brookian strata.

In areas where the sandstones are buried deeper, reservoir quality, particularly permeability suffers.

Brookian deep water sandstones are compositionally like their equivalents on the shelf edge but the deposition is controlled more by sediment gravity processes and turbidity flows, rather than deltaic or shelf processes.

For this reason, deposits of basin floor fan sandstones may consist of thinner individual sandstones interbedded with finer-grained siltstone and shale, depending on sediment supply, local basin floor topography, and other factors.

The hydrocarbon potential of the Brookian interval across the North Slope basin cannot be ignored. Within the Colville River unit, one zone of the Nanushuk group, the informally designated Qannik sandstone, is currently being developed with seven producing wells and three injection wells, the division said in its approval of the Quokka unit.

Based on interpretation of available seismic data, regional subsurface mapping, and multiple flow tests, OSA believes that several Nanushuk sandstones are prospective within the Pikka unit, which is currently in the early development stage.

The Colville River unit Nanuq-Nanuq PA and the modest development of the Oooguruk unit Torok PA represent the only long term Torok formation production to date.

ConocoPhillips’ Moraine program at the Kuparuk River unit also produces from the Torok formation but it is still early in development.

OSA drilled the Mitquq 1 and ST1 to test the Nanushuk shelf edge play in the acreage that would become the Quokka unit.

The successful Mitquq ST1 well test demonstrates the potential of the Nanushuk to be an important reservoir in the development of the new unit.

Plan of exploration

Per the non-confidential part of the June 22 Quokka unit approval, OSA submitted a broad outline of a plan of exploration as part of its application.

In its proposed plan, OSA lists several “non-drilling” activities that it intends to undertake, including interpretation of newly merged seismic data, addition of legacy seismic data into a new merged volume, refining static reservoir models and creation of a dynamic model for the Nanushuk 9 in the Mitquq area, a petrography study, and summer field studies to support drilling activities and ice roads.

The plan of exploration includes drilling two appraisal or exploration wells in the Quokka unit. One well will be drilled by second quarter 2026, and the other well by second quarter 2027.

One well will be located within one of the following townships: T10N., 7E., U.M.; or T10N., 6E., U.M. The other well will be located within one of these townships: T9N., 7E., U.M.; T9N., 6E., U.M.; T8N., 7E., U.M.; or T8N., 6E., U.M.

Each of the wells will be drilled to a depth sufficient to fully test the Nanushuk section 9 (5,500 feet true vertical depth subsea).

Exact location for the wells will be determined from results of previously detailed “non-drilling” activity, third party exploration results on adjacent leases, and data gathered from the first well.

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