Providing coverage of Alaska and northern Canada's oil and gas industry
June 2019

Vol. 24, No.22 Week of June 02, 2019

Not much drilling action yet from Eni at Nikaitchuq or Oooguruk

Kay Cashman

Petroleum News

Eni US Operating spud its first Alaska exploration well in 11 years in 2017, purchased 350,000 undeveloped acres on the eastern North Slope in mid-2018, and acquired operatorship and full ownership of the Oooguruk oil field in January; its actions in line with CEO Claudio Descalzi declaration at a 2018-21 strategy meeting that Eni was doing well in Alaska and had plans for increased investment in the state.

After announcing it had acquired Oooguruk, Eni said it planned to drill more production wells at both Oooguruk and its nearby Nikaitchuq unit, with a target to increase its total Alaska oil production to more than 30,000 bpd.

Given the Milan-based major had suspended drilling at Nikaitchuq in May 2015, this was welcome news in Alaska’s oil patch.

The question is, when will the new drilling begin?

The most recent (and only) action was the approval of an April 12 drilling permit for an offshore development well (lateral), Nikaitchuq SP33-W03L1, involving leases ADL0388574 and ADL0391283. It will be drilled from the unit’s production pad at Spy Island.

In its 11th Nikaitchuq plan of development, which runs through September and was approved by the Alaska Department of Natural Resources and the U.S. Bureau of Ocean Energy Management, Eni committed to drilling three new wells at Spy Island, as well as converting eight existing wells into multilaterals.

According to a schedule in the plan, the new Spy Island wells are SP03-FN9, SP06 and SI02-SE6, planned for October 2018 through late February 2019. (In a different part of the plan, Eni listed SP03-FN9, SI02-SE5 and SI06-FN8.) The eight new laterals are SP33-W3, SP30-W1L1, SP16-FN3L1, SP27-N1L1, SP23-N3L1, SP10-FN5L1, SP18-N5L1 and SP05-FN7L1, planned for late February through mid-September. (Wells beginning with “SP” are production wells; those with “SI” are injection wells.)

Per Alaska Oil and Gas Conservation records none of the wells have been drilled as of May 27.

Status of Nikaitchuq North

In regard to the Nikaitchuq North prospect’s exploration well, Eni’s initial plan was to complete the well in mid-February 2018, potentially conducting flow testing between mid-February and mid-March, but completion of the well was deferred to mid-summer.

Later that year an Eni official told Petroleum News, “the NN-01 exploration well was not completed in 2018 and as such no flow test was performed. Drilling was suspended on Aug. 23 due to impending seasonal drilling restrictions (per regulation, drilling can only take place during frozen ice conditions and summer open water season).”

He said Eni intended to “restart drilling in early 2019,” which PN industry sources say did occur.

No testing results were available as of May 27.

One of the reasons the company had given for stepping out north of the Nikaitchuq unit to test the Nikaitchuq North prospect - and why it acquired operatorship and full ownership of nearby Oooguruk - was because Eni wanted new oil to take advantage of significant spare capacity in the standalone Nikaitchuq production facility, which had a capacity of 40,000 barrels per day and could be expanded to 50,000 bpd, according to Eni Alaska Vice President Whitney Grande.

Production was declining at both Nikaitchuq and Oooguruk, with March output from Nikaitchuq averaging 16,527 bpd in March, down 12.9% from a March 2018 average of 18,966 bpd, and 7,912 bpd in March from Oooguruk, down 33% from a March 2018 average of 11,815 bpd.

Farther east still quiet

Whereas Nikaitchuq and Oooguruk are west of the BP-operated Prudhoe Bay unit, the 350,000 acres Eni purchased from Caelus are on the eastern North Slope between Prudhoe and ExxonMobil’s Point Thomson unit.

Eni said in August that it planned to “apply its business model and experience,” to the new acreage, involving “fast-track exploration” and “a short time to market” for “potential new discoveries.”

The relatively unexplored acreage consists of 124 state leases in two blocks and is close to existing infrastructure and to the trans-Alaska oil pipeline.

Shortly after acquiring the leases in 2015, Caelus acquired 175 square miles of new 3-D seismic data and reprocessed another 275 square miles of existing 3-D to image prospects in the acreage.

“Adjacent infrastructure with available capacity reduces threshold volumes required for developing discoveries in the sub-100 Mmbo recoverable range,” Caelus said. “Multiple play types within proven stratigraphic horizons provide significant upside potential in previously poorly-imaged structural trends and/or subtle stratigraphic traps.”

Surrounding legacy wells “confirm deeper petroleum system elements and de-risked shallower Brookian reservoirs and hydrocarbon charge and phase within the area,” Caelus said, much of which was mostly ignored in drilling until Armstrong and Repsol discovered big oil finds in the shallow Brookian Nanushuk at Pikka and Horseshoe west of the central North Slope.

Eni hasn’t said anything further about its plans for the eastern North Slope acreage.

Both Oooguruk and Nikaitchuq were originally identified and pursued by Eni’s former partner, Armstrong Energy, with Oooguruk coming online in 2008 and Nikaitchuq in 2011.


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