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Nuna, Oooguruk lease transfers in June
State, feds move leases into Fiord West Kuparuk PA; Hickel overriding royalties in Cook Inlet tracts go to Institute of the North Kay Cashman Petroleum News
The June leasing report from the Alaska Department of Natural Resources’ Division of Oil and Gas shows working and royalty interests in Nuna prospect leases being transferred from Caelus Natural Resources to ConocoPhillips, as well as other notifications that all or parts of these leases were also being contracted out of the Oooguruk unit.
The terms of those same leases were extended to Sept. 1.
West of the central North Slope, Nuna lies immediately south of Oooguruk, now operated by Eni and also acquired from Caelus, immediately east of the Oil Search-operated Pikka unit and immediately west of the Kuparuk River unit, operated by ConocoPhillips.
As previously reported, Caelus had sold Oooguruk to Eni, operator of the nearby Nikaitchuq unit, and Nuna to ConocoPhillips.
Similarly, on July 26 the U.S. Army Corps of Engineers posted notices of intent to transfer ownership and maintenance (operatorship) of both Oooguruk and Nuna to Eni and ConocoPhillips, respectively.
Fiord West Kuparuk PA The division’s lease report also includes a transfer of all or parts of 14 state leases into the Fiord West Kuparuk participating area.
The formation of the participating area in the Colville River unit had previously been approved by the three landowners in the area - Arctic Slope Regional Corp., the federal Bureau of Land Management and the division.
A participating area defines the portion of a unit from which production is expected to occur; approval of a PA is required before production begins.
The 12,015-acre Fiord West Kuparuk PA contains 7,692 acres on state leases, 4,083 acres on ASRC leases and 240 acres on a single federal lease, which was included in the seventh expansion of the Colville River unit in 2017.
In its May decision the division said the proposed Fiord West Kuparuk participating area is about a mile west of the current Fiord Nechelik PA in a region ConocoPhillips has referred to as the Fiord West development area. There are seven exploration wells in the vicinity of the new PA: Nechelik 1, Temptation 1, Temptation 1A, Nigliq 1, Nigliq 1A, Iapetus 2 and Char 1.
“Six of these wells encountered the Lower Cretaceous Kuparuk River formation,” the division said, noting the Kuparuk A sandstone was not present in the area.
ConocoPhillips’ revised plan of development for the Colville River unit included an initial well into the Fiord West Kuparuk PA in first quarter 2019 “to gather data and support planning reservoir development.”
In its 21st annual update to the Colville River unit agreement, dated March 15, the company said the Fiord West Kuparuk pilot hole in the first quarter of 2019 would be “a slant pilot hole well targeting the Fiord West Kuparuk reservoir near where future extended reach laterals are planned to be drilled” with the extended reach drilling rig the company is bringing in.
In its approval letter ASRC said ConocoPhillips planned to drill seven wells for the Fiord West Kuparuk PA, with production from the first well expected in the second quarter of this year, and the other six wells to be drilled by the extended reach drilling rig due onsite in the second quarter of 2020.
Hickel transfers royalties The unexpected transfers in the division’s June lease report were several overriding royalties on Cook Inlet basin leases transferred from the Walter J Hickel Marital Trust to the Institute of the North Trust.
Hickel, who founded the Institute, served as governor of Alaska from 1966-69, 1990-94, and as U.S. Secretary of the Interior from 1969-70.
Per its website, the organization’s mission is: “The Institute of the North informs strategic public policy and cultivates an engaged citizenry focused on socio-economic development in the Arctic. We support responsible development and collaborative management of commonly owned resources for individual and community prosperity. We strive to understand and communicate the reality and richness of the Arctic and the responsibility of those who live and work there.”
The overriding royalties were transferred from the Hickel trust to the Institute of the North Trust on five state leases, including three in the Hilcorp-operated Nikolaevsk unit (one lease still shows as being held by Union Oil of California) and two in the Cook Inlet Energy-operated North Fork unit. Cook Inlet Energy is a Glacier Oil and Gas company.
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