|
Colville River unit expansion approved Two areas created as unit expanded to northwest: a well must be drilled in 2005, another in 2006 Kristen Nelson Petroleum News Editor-in-Chief
A new prospect — Iapetus — will see exploration drilling on the west side of Alaska’s North Slope before next June by terms of an expansion of the Colville River unit approved by the Alaska Division of Oil and Gas. The division said in an April 22 decision that it approved a proposed northwest expansion of the unit, “subject to the work program, bid deferment payments, changes in lease agreement terms and automatic contraction provisions” in the decision.
The Colville River unit includes significant Arctic Slope Regional Corp. acreage, and of the 34,176 acres in the expansion, 16,578 acres belong to ASRC, 15,681 acres belong to the state and 1,920 acres are jointly held.
The division said that Colville River unit operator ConocoPhillips Alaska revised its exploration plan at the request of the state and ASRC. The expansion area is now divided into A and B areas, “A” being the portion adjacent to the existing Colville River unit and “B” being the portion farther to the west.
ConocoPhillips “plans to drill a number of exploration wells within the proposed CRU expansion area,” the division said, with proposed surface locations on either state of Alaska or Kuukpik Village Corp. lands. Seismic shot over area No wells have been drilled in the expansion area, but wells have been drilled west and east-southeast.
The state said the 1976-77 South Harrison Bay No. 1 just west of the expansion area had “significant hydrocarbon shows on the mud log within the Torok section” between 5,680 and 7,290 feet, although no hydrocarbons were recovered from any of the three drill stem tests. Targets in the 11,290 foot vertical hole were the Sadlerochit and Lisburne formations, both of which “appeared wet on the logs.” Secondary targets were the Kuparuk River formation, the Sag River sandstones and the basal sand in the Torok formation. The division said the Torok formation “appears to lie directly on top of the Lower Cretaceous Unconformity… as a result of the Fish Creek slide,” and the Pebble Shale formation was absent in this well.
To the east-southeast of the expansion area there have been five wells, but the division said none of them were tested and all were plugged and abandoned. All five have “some sand development above the Gamma Ray Shale within the Torok,” the division said, and all five have some 10 feet of Kuparuk C sandstone above the Lower Cretaceous Unconformity.
The 1998 Nuiqsut reached a total vertical depth of 7,583 feet in the top of the Nuiqsut sandstone, and “contained approximately 22 feet of Alpine C sandstone and 37 feet of Alpine A sandstone,” the division said.
The 1996 ARCO Temptation 1 and the sidetrack, the 1A, contained no Alpine sandstone interval, but did contain eight to 10 feet of Kuparuk C sandstone and “a silty Nuiqsut section, and bottomed in the Nechelik interval at 7,750 feet tvd and 7,252 tvd, respectively.
The division said the Nigliq No. 1 and 1A wells “bottom in the Jurassic Kingak formation, just below the base of the Nechelik interval” at 7,875 feet tvd and 7,195 feet tvd. The Alpine interval was absent in the Nigliq wells.
The division said ConocoPhillips mapped the Iapetus exploration prospect with 2003 3-D seismic, and data from the nearby wells “help define the prospect.”
The combination of seismic and well data “provide evidence that the proposed Third CRU expansion area encompasses the minimum area required to include all or part of one or more potential hydrocarbon accumulations,” the division said. Well in 2005 The requirements for work in the expansion area begin with a commitment, by Dec. 31, to drill the Iapetus No. 1 well to a bottom hole within either area A or B by June 1, 2005. If the commitment to drill is not made, the expansion area leases will contract out of the unit Dec. 31.
The Iapetus No. 1 must be drilled by June 1, 2005, or the expansion area will contract out of the unit.
By June 1, 2005, the companies must commit to drill a second well, the Iapetus No. 1, by June 1, 2006, to a bottom hole in either area “A” or “B”, but not the same area selected for the Iapetus No. 1, and to a bottom hole separated by at least a mile from the Iapetus No. 1 bottom hole. If the companies do not commit to drill the second well, acreage in the area where the first well was drilled would remain in the unit and acreage in the area not drilled would contract out.
If the second well is not drilled by June 1, 2006, the acreage within the area selected for the No. 2 well would contract out of the unit, and a payment of $211,200 would be due (proportionately) to the state and ASRC if area A contracted out, or a payment of $107,800 if area B contracted out.
The final requirement is that expansion area lands be included in an approved participating area within five years of the decision, and any expansion area lands not in a participating area within five years shall contract out of the unit. If a participating area is not proposed and approved within five years, all of the expansion acres will contract out of the unit.
| 