NOW READ OUR ARTICLES IN 40 DIFFERENT LANGUAGES.
HOME PAGE SUBSCRIPTIONS, Print Editions, Newsletter PRODUCTS READ THE PETROLEUM NEWS ARCHIVE! ADVERTISING INFORMATION EVENTS

Vol. 25, No.07 Week of February 16, 2020
Providing coverage of Alaska and northern Canada's oil and gas industry

State OKs Placer POD

Click here to go to the full PDF version of this issue, with any maps, photos or other artwork that appears in some of the articles.

First production still 2022; road and pad permits filed, ‘back on track’

Steve Sutherlin

Petroleum News

The dispute over the Placer unit, between the Alaska Department of Natural Resources’ Division of Oil and Gas and ASRC Exploration, has been resolved, DNR Commissioner Corri Feige told Petroleum News Feb. 10.

The Placer unit had been terminated by the division in July. Placer was discovered in 2004 by former operator ConocoPhillips and it was unitized in 2011 by AEX.

Feige said AEX came forward with a new plan of development and the division approved it, adding, “there is a performance attached to it and they updated their timelines.”

“If memory serves, first production by late 2022, taking it though Brooks Range (Mustang) facilities,” Feige said. “So yes, they are back on track and moving forward.”

AEX is working very closely with the U.S. Army Corps of Engineers to get an environmental assessment done, and the company is working on ground studies this winter she said.

In mid-December AEX applied for a permit with the Corps of Engineers for work in waters of the United States, specifically involving the Miluveach River, with the possible result of connecting Placer to the nearby Mustang field.

In its 30-day public notice, AEX described a project near the village of Nuiqsut, proposing a gravel road to a drilling pad.

The road would originate from the existing gravel road between the Mustang pad and the Mustang gravel pit. Located 45 miles west of Deadhorse, Mustang is road accessible via the Spine Road.

The company plans to “develop oil within the Kuparuk C reservoir, contained within the Placer unit,” the public notice said.

AEX would discharge approximately 68,000 cubic yards of gravel for a five-foot high seven-acre gravel pad. The top width is variable between 250 and 400 feet, the bottom width is 270 to 420 feet, and overall length is 1,000 feet.

The total footprint of the single-pad Placer project would be 45.5 acres.

Approximately 325,000 cubic yards of gravel will go into the 24-foot wide seven-mile access road.

The road will have a 37-acre footprint.

The crux of the problem

According to AEX’s filings with the division: The Placer unit cannot support its own standalone processing facility and is 100% owned by AEX, whereas most North Slope oil fields are explored and developed with partners that help shoulder the costs and risks.

For the division, the issue was the length of time it was taking AEX to get its state leases into production.

The parties have been in negotiations for some time.

The Placer unit had been terminated by the division in July, but in a subsequent emailed statement Feige said “ASRC Exploration LLC and the Department of Natural Resources continue to work closely together to move the Placer unit forward into development and, ultimately, production. We are hopeful to resolve soon.”

Placer put up for sale in 2019

AEX President Teresa Imm told Petroleum News in a May 28 interview that the company is open to selling all or part of the field.

It’s possible a transaction has taken place, which could account for revived activity on the project, but the company has not announced whether it has made a deal or not.

The 8,768-acre unit could have 110 million barrels of original oil in place, with between 35 million and 45 million barrels of oil recoverable across all horizons, according to an offering by Detring Energy Advisors of Houston, Texas.

Detring said that of three wells drilled to date in the Placer unit, two are usable for future development.

According to Petroleum News records, AEX drilled the Placer No. 3 well in 2016, which the state certified as being capable of producing in paying quantities in December of the same year. Placer No. 1 and Placer No. 2 were drilled in 2004 by former field operator ConocoPhillips, with Placer No. 1 dubbed the discovery well. Placer No. 2 was never tested and dubbed a dry hole.

According to Detring, the Placer unit offsets multiple prolific oil fields and includes a development-ready project with the Kuparuk C reservoir and the potential for additional stacked pays in the Alpine and Nanushuk intervals.

Placer is a neighbor of ConocoPhillips’ Kuparuk River oil field on the east, and it borders the Oil Search-operated Pikka unit on the west. Pikka is scheduled to come online in 2022 with 30,000 barrels of oil processed in a neighboring company’s facility and then in 2024 with its own 120,000 barrel a day facility.

The Kuparuk C sand is a proven and delineated reservoir with more than 3.5 billion barrels of oil produced to date on the North Slope, Detring said.

The giant Nanushuk topset discovery in the Pikka unit is the newest North Slope discovery with more than 1.5 billion barrels of oil potential, Detring said.



Print this story | Email it to an associate.






Petroleum News - Phone: 1-907 522-9469
[email protected] --- https://www.petroleumnews.com ---
S U B S C R I B E

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©1999-2019 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.

This story has 71 lines. and it is 2336 pixels high.
ERROR ERROR