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Focus on exploration Three Conoco wells under way in NPR-A; second Placer well possible Kristen Nelson Petroleum News Editor-in-Chief
ConocoPhillips Alaska has three exploration wells under way on Alaska’s North Slope, two in the National Petroleum Reserve-Alaska and one on the western edge of the Kuparuk River unit.
Rick Mott, ConocoPhillips Alaska’s vice president of exploration and land, told Petroleum News March 4 that drilling was under way at the Placer exploration well on the western edge of Kuparuk.
The company has completed its winter exploration ice roads and ice pads, he said March 4, with drilling at the Carbon well in NPR-A starting that day, and drilling at ConocoPhillips’ second NPR-A well, Scout No. 1, expected by the following Monday, March 8.
ConocoPhillips’ spokeswoman Dawn Patience confirmed March 10 that the Scout well was spud March 8.
The third NPR-A well will be spud around April 1.
Nordic rig 3 is drilling at Placer, Doyon rig 19 at Carbon and Doyon 141 at Scout. One of the rigs drilling in NPR-A will be used to drill the third NPR-A well, and Mott said right now the best guess is that it will be Doyon 19, since work started on that well first. Second well permitted at Placer ConocoPhillips had run surface casing and was below 3,000 feet at the Placer well on the western side of Kuparuk, Mott said. The company has permitted a second well at Placer and Mott said that well is a contingency.
The company “would try and expedite a development there … if we possibly could,” he said. If it has encouraging results at the first well, it could go ahead with a second well.
“We could cut a whole year off the cycle time by doing that,” Mott said.
Placer is southwest of the company’s successful Palm discovery and development on the western edge of Kuparuk. Placer is in a Kuparuk unit expansion area: ConocoPhillips, the Kuparuk River unit operator, negotiated unit expansions to include leases believed to contain oil and gas, with the proviso that wells must be drilled by certain dates, or the tracts would contract out of the unit and the state would we owed a penalty to make up for what the leases might have earned in bonus bids at a lease sale, had they not been incorporated into the unit, extending the term of the lease.
ConocoPhillips’ partners at Placer are Unocal, ChevronTexaco, ExxonMobil and Arctic Slope Regional Corp., which farmed into BP’s acreage at the prospect, assuming a portion of the cost of the well in exchange for a 35 percent working interest, leaving BP with no production from Placer, should the well be successful.
ASRC entered into a “mentoring” agreement with BP last summer, including sharing information on unit and near-unit oil and gas investment opportunities, ASRC and BP told Petroleum News in July. BP said then that the mentoring arrangement would help get unit and near-unit North Slope prospects explored and developed that might not get approved by BP’s board in London due to stiff competition in investment opportunities outside Alaska. Palm on line in 20 months ConocoPhillips’ predecessor Phillips Alaska partnered with BP Exploration (Alaska) on the Palm prospect northeast of Placer, where a well and sidetrack were drilled in the 2001 winter exploration season, the discovery of an estimated 35 million barrels of recoverable reserves announced in May and applications for a drill site at the discovery filed in August.
The new drill site 3S, came on line in November 2002, just 20 months from the spud of the discovery well to the first production.
Development drilling at 3S was completed last summer, and Patience told Petroleum News in July, “The project came in under budget and ahead of schedule.”
And production, expected to peak at 16,000 barrels per day in 2004, was producing 29,000 bpd in July, exceeding pre-development expectations. Looking for co-venturer at Cosmopolitan While the North Slope is ConocoPhillips primary exploration focus in Alaska, it also has an active oil exploration prospect at Cosmopolitan in Cook Inlet off the southern Kenai Peninsula.
In the first well at that prospect, 18,000-plus measured feet, the company “saw some things of interest, and we came back and side tracked it the following year,” Mott said, going out a similar distance, “at an angle from the original bore.”
Phillips Alaska (now ConocoPhillips Alaska) filed a unit application with state and federal agencies in 2001 to unitize nine leases, some 24,600 acres, at Cosmopolitan and drilling began at the Hansen No. 1 in October 2001; the sidetrack, the Hansen No. 1A, was drilled last year. The wells were drilled from onshore to the offshore prospect, discovered in the 1960s when Pennzoil drilled the prospect, in the lower Cook Inlet offshore north of Anchor Point, from a jack-up rig.
“We saw some things that were encouraging to us,” Mott said of the Cosmopolitan sidetrack, but he also said the prospect is “not near” a “commercial threshold” at this point.
ConocoPhillips is “carrying a 70 percent working interest (at Cosmopolitan) and considering how much we’ve already invested in the project,” the company would like to find another co-venturer before doing more work: “some additional 3-D seismic” probably needs to be shot over the feature, and possibly a second independent well.
Mott said Cosmopolitan is “an exciting but challenging project” and because the prospect is offshore, ConocoPhillips is “going to have to proceed carefully.” Other possibilities in Cook Inlet? Asked if ConocoPhillips planned to look for more natural gas in Cook Inlet, Mott said the company’s “strategy would be to … exploit opportunities near our infrastructure.” He said he doesn’t think “we’re going to be aggressively going out looking for new frontier plays or new areas that are significant distances from our infrastructure.” The company does “hold various blocks of exploration acreage down in the Cook Inlet” and so it has opportunities both there and on acreage that is currently producing.
Some of the exploration acreage holds discoveries that haven’t been developed, and some are just exploration blocks, he said.
“I see our focus now as … near infrastructure — the Cosmo area and near infrastructure,” Mott said.
The company’s Cook Inlet exploration acreage appears to be concentrated in the vicinity of the North Cook Inlet gas unit near the Tyonek platform and offshore the Beluga gas field on the west side of Cook Inlet.
Mott said the company is just finishing up processing 3-D seismic data near the Tyonek platform, “primarily … for development,” he said, “but … if there’s anything else…”
Part II of this article will appear in the March 21 issue of Petroleum News.
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