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Smaller Rock Flour exploration unit OK’d Eni-operated unit trimmed by three leases as Conoco, Pioneer drop out; seismic will be acquired this year, first well in 2006-07 Kristen Nelson Petroleum News Editor-in-Chief
The Alaska Division of Oil and Gas has approved the Rock Flour unit, but it’s a slightly different unit than Eni Petroleum Exploration Co. Inc. applied for in September. That was an eight-lease unit, some 15,803 acres, and included, in addition to five leases held 100 percent by Eni, three leases held jointly by ConocoPhillips Alaska and Pioneer Natural Resources Alaska. Those three leases, at the southeast corner of the proposed unit, were dropped when Eni amended the application in October, the state said in a decision issued Nov. 22.
Eni still plans to drill its first well in the winter of 2006-07, but instead of spending 2006 evaluating data, the company now has to complete acquisition of data in 2006, so ConocoPhillips and Pioneer must have been bringing seismic data to the original unit, data which Eni must presumably now acquire from its former partners.
The approved five-lease 10,843-acre Rock Flour unit is adjacent to the eastern boundary of the Kuparuk River unit on the North Slope. Two of the leases would expire Nov. 30 without formation of a unit; the other three expire in 2012. The three ConocoPhillips-Pioneer leases expire in 2011. Eni entered the state in August when it acquired the Alaska assets of Armstrong Oil and Gas, 104 North Slope and Beaufort Sea leases. First well in 2007 The original exploration plan submitted in September proposed three wells, the first in 2007 (winter of 2006-07), the second in 2009 (2008-09) and the third in 2010 (2009-10). “The timing of the first proposed exploration well is driven by necessary planning needed to ensure operational integrity for our first wildcat drilled on the North Slope of Alaska,” Eni said in its September application.
The division said in its decision that it modified Eni’s plan of exploration, modifications which Eni accepted in October.
The plan of exploration now requires that by June 1, 2006, Eni “shall complete seismic purchase and processing and commit to drill a well prior to June 1, 2007,” or the unit will terminate and Eni will make a lease delay payment of $10,814 on June 1, 2006.
The first well, to be completed by June 1, 2007, will penetrate the West Sak/Schrader, Ugnu or Kuparuk formation, or the unit will terminate and a lease delay payment of $21,953 will be due.
By June 1, 2008, Eni will complete “additional seismic, reservoir, and geologic studies,” or the unit will terminate and a lease delay payment of $11,473 will be due.
A second exploration well, with the same formation objectives, will be completed by June 1, 2009, or the unit will terminate and a lease delay payment of $23,289 will be due.
A third exploratory well will be completed by June 1, 2010, or the unit will terminate and a lease delay payment of $12,171 will be due.
The plan of exploration runs through June 1, 2010. Viscous easier to produce Eni told the state in its unit application that it will evaluate whether higher temperatures found in an exploration well in the area will make West Sak/Schrader Bluff oil in the unit easier to produce than colder reservoirs currently under production.
Eni plans three 7,000-foot wells, targeting a range of reservoirs, but with the primary objective being the West Sak/Schrader Bluff. Eni said that based on previous drilling in the area it believes there is “an overall prospective trend for continued West Sak Sand reservoir quality and thickness to the south/southeast over our proposed Rock Flour exploration unit.”
The Rock Flour exploration well, drilled in 1991 in the area of the proposed unit, had a bottomhole temperature (at 9,132 feet) of 99 degrees Fahrenheit, Eni said, a temperature which “could significantly improve the viscosity/mobility characteristics of the crude within the West Sak reservoir interval” at Rock Flour, compared to Kuparuk West Sak field average reservoir temperatures of 65-70 degrees F.
Eni also believes the Ugnu reservoir in the unit is deeper and hence warmer, with the potential for “significantly” improved “viscosity and resultant mobility” of Ugnu crude. Eni expects to encounter Ugnu sands “at roughly the equivalent subsea depth and temperature to the up-dip producing West Sak ‘D’ sandstones,” and plans to production test the Ugnu to evaluate commercial production.
The Kuparuk C sandstone is a secondary objective at Rock Flour, where it is limited to the western part of the unit.
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