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Whiskey Gulch unit approved Brooks Range Petroleum is operator of 12-lease, 30,651-acre unit south of Kuparuk unit Kristen Nelson & Kay Cashman Petroleum News editors
The Alaska Division of Oil and Gas has approved an October application from Brooks Range Petroleum Corp. for formation of the Whiskey Gulch unit south of Kuparuk. Brooks Range acquired the 12-lease, 30,651-acre prospect from Anadarko Petroleum Corp. in an acquisition of 31 leases this summer.
The Anchorage-based independent told the state it is looking at a Kuparuk sand reservoir at the prospect.
Brooks Range is the North Slope operating firm for Wichita, Kan.-based Alaska Venture Capital Group. Brooks Range holds 100 percent working interest in the Whiskey Gulch leases; Anadarko retains a 2 percent overriding royalty interest.
Ken Thompson, a managing partner and chairman of Brooks Range, told Petroleum News in October that the company does not yet have a partner to help fund Whiskey Gulch drilling, but is “awaiting the results of the Antigua exploration well this winter. ... Dependent on a future deal structure, we may or may not operate.”
Seven of the leases are from a 1998 lease sale and would have expired Nov. 30 without formation of a unit; the remaining five leases are from a 2000 sale and expire Nov. 30, 2008. All of the leases have a 12.5 percent state royalty. Bids for the acreage at state lease sales ranged from $7.85 per acre to $251.68 per acre. First year’s work: define prospect Brooks Range told the state in its application that it would define a prospect area and re-define the unit by Nov. 1, 2006, and pay the state a deferral fee for any leases not in that re-defined unit which the state could have included in its February 2006 lease sale (North Slope and Beaufort Sea areawide sales were deferred from October 2005 to February 2006).
The exploration drilling plan was to commit by Nov. 1, 2006, to drill a Whiskey Gulch unit well by June 1, 2007, and if the commitment was not made, the unit would terminate.
If the well was not drilled by June 1, 2007, the working interest owners would pay the state $234,119.
Brooks Range told the state that Whiskey Gulch is a Kuparuk play based on “amplitude anomalies” in a 365 square mile seismic survey shot by Anadarko and ConocoPhillips Alaska.
The division said that when it discussed the proposed Whiskey Gulch unit boundary and potential hydrocarbon accumulations there were confidentiality issues surrounding the Anadarko-ConocoPhillips Alaska interpretation of the 3-D seismic from the Resolution survey because Brooks Range does not have a license to the 3-D data “and has not produced its own, independent interpretation” of the data “to determine the prospective accumulations in the area proposed for unitization.” This situation, the state said, has made it difficult to determine what lands should be included in the unit.
The Division of Oil and Gas said it and Brooks Range have agreed that as part of the initial plan of exploration for Whiskey Gulch, Brooks Range will secure the Resolution 3-D data and provide its own interpretation of the data to the division by Nov. 30, 2006. Kuparuk play the target Brooks Range told the state the Whiskey Gulch prospect is “a Kuparuk play based on amplitude anomalies” in a seismic survey shot by Anadarko and ConocoPhillips Alaska. The prospect “is expected to find Kuparuk Sand below the known oil-water contact of the Kuparuk River field,” which is at 6,530 to 6,570 feet at the southwest corner of the Kuparuk field.
The company said 40-foot to 60-foot Kuparuk sands were encountered in nearby wells, the Hemi Springs State No. 1, Rock Flour and Silvertip.
The company said there is a 90 percent probability the reservoir contains 15 million barrels; a 50 percent probability it contains 67 million barrels; and a 10 percent probability that it contains 91 million barrels.
“The major risk is reservoir presence,” Brooks Range told the state. The prospect would be “the southernmost Kuparuk sand in the system” and is “surrounded by wells with no significant Kuparuk sand development.”
“For Whiskey Gulch to be hydrocarbon-charged, it must be stratigraphically separate from the Kuparuk River field,” the company said, otherwise “any reservoir encountered would only be a pathway for hydrocarbon charging to the up-dip Kuparuk River field.”
Kuparuk field oil ranges from 22-27 degrees API, but “highly viscous” 12 degree API oil “has been encountered at places along the southern margin” of the field.
Brooks Range said the Hemi Springs test wells found 24 degree to 33 degree API oil “well down dip to the Kuparuk River unit as well as testing gas which argues for good quality oil south of the field.”
The company said that based on exploration wells drilled in similar circumstances the prospect has a 1 in 5 chance of commercial success. Anadarko permitted wells in area According to Anadarko paperwork filed in 2001 with permit applications to drill two exploration wells, Whiskey Gulch is an old prospect which ARCO had “drilled in and around.” Anadarko shot seismic at the prospect in 2000.
Anadarko got its permits to drill Whiskey Gulch A in section 30-8N-9E, UM, and Whiskey Gulch B in section 22-9N-9E, UM, but did not drill them. The wells were permitted as a back-up to drilling the company was doing in the National Petroleum Reserve-Alaska in the winter of 2001-2002. In the event Anadarko had unexpected permitting problems for its NPR-A well or difficulty getting across the Colville River because of weather delays, it wanted a contingency drilling program in place.
After the winter of 2001-2002, Anadarko held off operating any more of its own conventional wells on the North Slope for a number of reasons; none of which, company officials said, had anything to do with the prospectivity of Whiskey Gulch. Early exploration The state said exploration began in the area in 1969, with both Kuparuk and West Sak/Schrader Bluff targets, although the Lower Cretaceous Kuparuk formation is the principle reservoir target at Whiskey Gulch.
Based on surrounding well control both Kuparuk C sandstones and Kuparuk A sandstones are “present but relatively thin in this area,” the state said. While seismic data generally cannot differentiate between the two Kuparuk intervals, the state said it has “routinely been used to predict whether the Kuparuk interval is present or absent, and, in some cases, when the total Kuparuk interval is thin” defined as less than 200 feet.
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