Vol. 24, No.45 Week of November 10, 2019
Providing coverage of Alaska and northern Canada's oil and gas industry

Mustang online!

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First North Slope field taken from discovery to production by small independent

Kay Cashman

Petroleum News

In response to a query from Petroleum News, Majid Jourabchi of Houston-based Thyssen Petroleum confirmed Nov. 6 that the North Slope Mustang oil field is online, utilizing an early production facility, or EPF.

Mustang is operated by Brooks Range Petroleum Corp., or BRPC, run by Bart Armfield, who has been with the project from the beginning.

It is the first oil field that a small independent has taken from discovery to production on the North Slope.

According to Jourabchi, Mustang oil was trucked from the field for the first few days.

“We trucked the oil because COP needed to certify the meters, open the blinds and have a person on location,” he said.

ConocoPhillips did that Nov. 2. Since then the oil has been flowing through Mustang’s pipeline to the Alpine pipeline and on to the trans-Alaska pipeline.

“The first few days of production was sold to Eni because we did not have enough storage capacity,” Jourabchi said.

“Work on the field is a continuing and in the next couple of months we hope to achieve more milestones,” he added.

Early production planned

BRPC drilled the Mustang discovery well, North Tarn 1A, in January 2012, and confirmed it at the Mustang 1.

Mustang, the first development in the Southern Miluveach unit, or SMU, is adjacent to the southwest edge of the Kuparuk River unit.

BRPC had planned to start the field using a permanent 15,000 barrel-per-day production facility. Following the oil price crash, the company put the project into “warm standby” before coming up with the plan to install the modestly priced EPF.

The idea was to ramp production up to 6,000 barrels per day and use the revenue to upgrade the production facilities to a larger scale, BRPC said in its Sept. 30 filing of the seventh annual plan of development for the SMU with Alaska’s Division of Oil and Gas.

Initial production, BRPC said, will be from two existing wells - North Tarn 1A and SMU M-02. Mustang 1A will be next but the suspended well “requires drilling lateral extension/possible sidetrack,” which will occur in January, BRPC said.

In the plan of development, or POD, the company said up to four new wells will be drilled in 2020 - one per quarter.

Full development plans

Longer range proposed development activities are as follows:

* Central processing facilities with a capacity to handle 15,000 bpd, 15 million standard cubic feet per day of gas, and 7,500 barrels of water per day.

* Drill site facilities.

* Non-process infrastructure including buildings and equipment.

* Up to 10 production wells and 11 injection wells.

Other activities for the first year and beyond included completion of the initial gas compression and water injection capabilities of the EPF that might continue into 2020, planning focused on bringing the modules built for the Mustang operations center, or MOC, to the North Slope during 2020, transporting and integrating MOC 1 in first quarter 2021, planning for integration and substitution of the temporary EPF with the permanent MOC process modules.

In addition to the four wells drilled in 2020, toward the end of that year and through third quarter 2021, six producer and seven injector wells will be drilled.

Kuparuk sands, EOR

Regarding plans for SMU acreage not in a participating area, BRPC continues to review all potential targets, including but not limited to the Kuparuk C and A sands, which are part of the Kuparuk oil pool, a continuation of the Kuparuk sands from the Kuparuk River unit.

In June, the Alaska Oil and Gas Conservation Commission approved an application from BRPC to inject fluids at Mustang for pressure maintenance and enhanced recovery from the Kuparuk oil pool within the SMU.

Waterflood is planned first, followed eventually by lean or miscible gas flood.

Water will be produced water from the field and seawater from the ConocoPhillips seawater pipeline, with gas from Mustang.

Per AOGCC, anticipated peak daily injection rates for individual wells would be 6,000 barrels of water and 6 million standard cubic feet of gas.

Water and water-alternating-gas injection into the Kuparuk River oil pool “will provide a substantial EOR benefit over primary recovery alone” and maximize ultimate recovery, as well as prevent waste.

BRPC told AOGCC that audited Kuparuk reserves are 21.2 million barrels of 1P (proven oil in place).

Presentation materials at an AOGCC hearing showed 2P at 32.8 million barrels 2P (probable) and 3P at 38.3 million barrels (possible) and showed primary recovery as estimated at 10-15% of original oil in place with waterflood adding 10-25%, for a total recovery after waterflood of up to 35%.

BRPC cited an average estimated recovery rate of 30% with waterflood, expected to rise to 40% with tertiary recovery.

Bringing in partners

When BRPC announced the Mustang discovery in 2012, it needed help to bring the field into production, which arrived in mid-2014, when JK E&P Group Pte. Ltd., Thyssen Petroleum North Slope Development LLC and MEP Alaska LLC acquired BRPC and a package of North Slope properties from Alaska Venture Capital Group and Ramshorn Investments Inc. for $450 million.

Additional help came from AIDEA, which partly financed two infrastructure ventures at the unit in return for an interest in unit leases.

Today, the five-lease, 8,960-acre SMU working interest owners are Caracol Petroleum LLC, TP North Slope Development LLC (Thyssen), BRPC, Nabors Drilling Technologies USA Inc., AVCG LLC, Mustang Road LLC, and MOC1 LLC.

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