Conoco planning Putu program

ConocoPhillips Alaska Inc. is permitting an exploration program near the village of Nuiqsut, although the program is complicated by an appeal over leases in the area.

The local subsidiary of the international Houston-based independent plans to drill one well and one sidetrack in the area south of the Colville River unit over this coming winter. According to a schedule included in permitting papers, the proposed Putu exploration project would begin this coming November and run through March 2017.

ConocoPhillips currently envisions drilling Putu No. 1 as a directional well and Putu No. 1A as a vertical sidetrack. “The Putu 1 well will provide additional reservoir information in the area and narrow uncertainty around reservoir description parameters including oil-water contact, sand quality and thickness, and oil viscosity,” the company wrote in filings. The company plans to use the Doyon 141 rig or a similar rig for the program.

The proposed surface location of the wells is on Kuukpik Corp. land. ConocoPhillips said it intends to work closely with the Native corporation throughout the project. The relevant subsurface lands are jointly owned by the state and Arctic Slope Regional Corp.

ConocoPhillips believes that construction of a proposed 1-mile ice road starting at the Alpine Resupply Road at the Colville River unit and an 800-foot-square ice pad accompanying the project should be included under previously acquired permits. The ice pad would include a 60-man drilling camp for mobilization, demobilization and support and a second 60-man testing camp for further activities after drilling is completed.

‘Tofkat’ appeal

Earlier this year, a joint venture operated by Brooks Range Petroleum Corp. asked the state for permission to transfer 22 leases of the former Tofkat unit to ConocoPhillips.

After the Tofkat unit was terminated in early April 2016, its leases reverted to their original terms. The state Division of Oil and Gas allowed the joint venture to transfer seven leases that were set to expire at the end of their primary terms in June 2017 but denied transfer of the remaining 15 leases that entered their secondary terms when the unit expired. The parties quickly appealed the ruling. The matter remains unresolved.

In its permitting filings, ConocoPhillips proposed building the road and drilling pad on ADL 390674, which is one of the leases currently under appeal. The proposed pad is adjacent to a Native allotment, AKFF 011723, to the south. Although ConocoPhillips intends to maintain a buffer from the allotment, the company has applied for a Revocable Use Permit with the Inupiat Community of the Arctic Slope, “as a contingency.”

The naming convention for the exploration program is slightly confusing.

Back in mid-2011, BRPC originally proposed a “Putu unit” covering some 39,994 acres over 28 leases in the area south of the Colville River unit. The state split the request into two units - a nine-lease Putu unit to the south and a 21-lease Tofkat unit to the north.

BRPC relinquished the Putu unit in mid-2012 but retained the Tofkat unit until the proceedings earlier this year. Although ConocoPhillips is intending to explore on the leases of the former Tofkat unit, it is using “Putu” for its program and its well names.

To make matters more confusing, some of the leases in the Tofkat/Putu region were once included in the Colville River unit and were known, at that time, as the Titania prospect.

In the original ruling to deny the transfer, then-Division of Oil and Gas Director Corri Feige noted the value of the acreage. “Anecdotal evidence suggests the acreage which encompasses the Tofkat unit lands is valuable exploration acreage and is likely to attract a wide range of potential bidders and substantial competitive bonus bids for the state,” she noted in her ruling. Feige resigned her position with the state in September 2016.

- ERIC LIDJI