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State approves Oooguruk Pioneer has already met three-well drilling obligation in unit plan Kristen Nelson Petroleum News Editor-in-Chief
The state of Alaska approved formation of the Oooguruk unit effective July 11.
The 20,394 acre unit includes all of 11 leases and a portion of a 12th lease in Harrison Bay offshore Alaska’s North Slope, north and west of and contiguous with the Kuparuk River unit. Unit operator Pioneer Natural Resources Alaska owns 70 percent of the working interest in the unit and Armstrong Alaska owns 30 percent.
The Alaska Department of Natural Resources’ Division of Oil and Gas said it received only one comment on the application, that from Anadarko Petroleum, which holds an adjoining lease. Anadarko told the state it did not oppose formation of the unit, but reserved the right to apply to join the unit in the future.
Three of the tracts in the unit were won in the state’s November 1997 lease sale, two by Union Texas Alaska (now part of ConocoPhillips Alaska) and one by John Winter. The primary term of those leases expires Dec. 31, 2004. Armstrong won the other nine leases in October 2001. Those leases expire June 31, 2009. Union Texas bid $3.2 million for its two leases, Winter bid just under $205,000, and Armstrong bid $2.5 million, for a total of $5.84 million in bonus bids. Armstrong assigned Pioneer a 70 percent working interest in their nine leases in late 2002, and in March 2003, leases acquired by Union Texas and John Winther were assigned to Pioneer with the original leaseholders retaining overriding royalty interests.
Pioneer announced plans to drill up to three wells in the 2002-03 winter season, with the Kuparuk C sands as the primary target. Those sands, the division said, have been encountered in the Kuparuk River unit southeast of Oooguruk. The exploration program looked at a range of intervals, including the Cretaceous Middle Brookian, Cretaceous Torok, Kuparuk A, Kuparuk C and Jurassic Nuiqsut/ Nechelik. Nuiqsut tested in Colville Delta Three wells were drilled: the Ivik No. 1 was spud Feb. 24, 2003, followed by the Oooguruk No. 1 and the Natchiq No. 1. On March 31, Pioneer said it had a 1,3000 barrel per day oil discovery from the Jurassic formation, not the primary Kuparuk C target.
The division said there are three oil-bearing Jurassic sands southwest of the Oooguruk unit: the Nechelik, Nuiqsut and Alpine sandstones. The Alpine sandstone from the Alpine field discovery well, the Bergschrund No. 1, is not present in the northern Colville Delta area.
“The key to unlocking the reserves within the Jurassic sands is producing the low API gravity oil without damaging the formation with drilling fluids,” the division said. Nuiqsut sands were tested in several Colville Delta exploration wells: the Texaco Colville Delta No. 1 (1,075 bpd of 25 degree API oil); the Texaco Colville Delta No. 2 (409 bpd of 24-40 degree API oil); the Texaco Colville Delta No. 3 (374 bpd of 27.7 degree API oil); and the ARCO Kalubik No. 1 (410 bpd of 21 degree API oil). Pioneer finds Jurassic-aged oil Pioneer drilled all three of its proposed wells this past winter in the Northwest Kuparuk prospect it had identified from 2-D and 3-D seismic data integrated with surrounding well data. The Oooguruk vertical hole was completed March 29 to a depth of 6,900 feet; the Natchiq was completed March 31 to a measured depth of 7,500 feet and a true vertical depth of 6,740 feet; the Ivik was completed April 9 to a measured depth of 6,943 feet and a true vertical depth of 6,942 feet.
Pioneer said it did not find commercial quantities of oil in its main target, the Kuparuk C sand, but found oil in two Jurassic-aged sands, which the company described as “very similar in geologic age, permeability, and porosity to those in the prolific, onshore Alpine field to the southwest.”
Pioneer fractured the Ivik and got a sustained rate of about 1,300 bpd. Pioneer spokeswoman Susan Spratlen told Petroleum News in April: “The issue is determining the permeability, how much oil there is and what the recovery factor will be.”
The division said there are eight wells within a few mile radius of the Oooguruk unit which have been certified as capable of producing in paying quantities: the Exxon Thetis Island No. 1 to the northeast; the Kalubik No. 1 to the southwest; the Kuukpik No. 3 to the west; and five Colville Delta wells (Texaco Colville No. 1, No. 1A, No. 2 and No. 3; and Amerada Hess Colville 25-13-6) south of the Oooguruk unit. Exxon Thetis Island No. 1 and ARCO Kalubik No. 1 are closest to Oooguruk. Wells, geologic and engineering studies proposed When Pioneer applied for the unit, it proposed drilling three wells within five years and conducting geologic and engineering studies to evaluate a fast-tract production start-up in 2004-05. The division said the three wells Pioneer drilled satisfy the drilling obligation. The company is still working on the geologic and engineering studies.
The three leases that have a primary term ending Dec. 31, 2004, are along the northern edge of the unit and, the division said, “were included in order to capture the upside potential of the prospect and will contract out of the unit” if not included in a participating area by June 1, 2008, or are not included in the next plan of exploration or the first plan of development.
The division also said that Pioneer will “evaluate and consider the reprocessing of the seismic data to improve the understanding of the prospective reservoir characteristics and parameters.” The company plans geologic studies to “identify and refine a possible fast track development scenario for initial production from the unit” and will complete engineering work currently under way. Pioneer is also identifying “possible production synergies” with the adjacent ConocoPhillips Alaska-operated Kuparuk River unit.
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