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A winning package Armstrong Resources believes it has the right geology, people, timing and engineering to make its Kuparuk-Thetis exploration program a success Kay Cashman PNA Publisher
Armstrong Resources LLC has put together what it says is a very attractive prospect covering its 10 Kuparuk-Thetis state leases northwest of the Kuparuk River on the North Slope. (See map on page 11.)
The Denver-based independent, which bought its first Alaska oil and gas leases in October, filed its permits July 19 to drill three wells between Kuparuk and Thetis Island, Stu Gustafson, vice president of operations for Armstrong, told PNA.
The geology Bill Armstrong, company president, majority owner and a geologist by training, told PNA July 16 that “Alaska has a phenomenal petroleum system and great opportunities geologically.
“Armstrong has made its reputation exploring for large impact resources in previously considered mature basins. We have established the deepest production in several geologic provinces in the Lower 48,” he said.
The company picked up what is considered a prime group of leases in and near Exxon’s former Thetis Island unit where Exxon drilled a 8,460 foot vertical exploration well in 1993 that was certified by the state of Alaska as capable of producing in paying quantities in February 1995.
Armstrong’s three wells will target “multiple horizons down to and through the Jurassic … (and) have a high chance of encountering oil bearing sands,” Gustafson said. The people Gustafson, with Exxon exploration from 1979 until the company closed its Alaska exploration office in 1995, went to work for Armstrong last year.
Armstrong has contracted with Natchiq Technical Services to handle exploration operations for the Kuparuk-Thetis Island project. Natchiq Technical will oversee planning, engineering and implementation of Armstrong’s 2002-2003 exploration plan, including well testing and selection of a company to build 10 miles of ice road. Why Natchiq Technical? “David Johnston, John Lewis, Jim Abel and their staff at Natchiq Technical have a firm grasp of operational and environmental hurdles for exploration and production operations in the Arctic,” Gustafson told PNA. “As part of a large family of companies under Arctic Slope Regional Corp., a resident stakeholder company, its parent company Natchiq also has an excellent Native hire record, which is important to us.”
Although no subcontractors have been chosen for the project to date, Nabors Alaska Drilling’s 27E was listed in Armstrong Resources’ permit applications. A final decision to use either a Nabors or a Doyon Drilling rig will be made by Natchiq Technical and Armstrong, Gustafson said. Jacob Adams names wells Jacob Adams, president of ASRC, has selected names for the three wells.
The first well, the Ivik, means walrus in Inupiaq; the second well, the Ooguruk means bearded seal; and the third well, the Natchiq, means seal. All are sea mammals that are eaten by the Native residents of the North Slope and which contain oil — albeit the edible kind.
Armstrong held one public meeting in Barrow about the Kuparuk-Thetis Island exploration program. The villages of Nuiqsit and Kaktovik participated by teleconference. A second meeting will be held later this summer in Nuiqsit. The timing “Our plan is to begin building ice roads as early as Dec. 1, weather permitting,” Gustafson said.
Ice roads from the Oliktok Point dock will provide Armstrong access to the three grounded ice pad locations in Harrison Bay within the Barrier Islands. No tundra travel is planned.
The company told the state in its plan of operations that drilling is expected to begin on or before Jan. 20 at the first location and be completed by March 15. Well evaluations (testing) may be performed at any of the well locations. All sea ice operations are expected to be complete by March 22.
“We have designed our program to complete operations on all three wells before the end of March. Off the ice in March … 60 days before breakup starts … is the driver on this issue,” Gustafson said. The engineering The project’s main ice road construction will begin at the Oliktok Point dock, heading southwest along the shore for approximately three miles and then turn due west three miles to drill site 3, Natchiq (NW/4 section 16, township 13 N, range 8 E), continuing northwest two miles to drill site 1, Ivik (SW/4 section 7, township 13 N, range 8 E) and finally straight north to site 2, Ooguruk (NW/4 section 31, township 14 N, range 8 E).
The road and drill pads will be built up using seawater “until grounded ice is obtained,” Armstrong said in its plan of operations. The overall pad will be approximately 400 feet by 400 feet.
Camp facilities will have the capacity to accommodate up to 70 people and approximately 50,000 gallons of diesel fuel will be stored at each well site in lined, bermed fuel storage areas.
Gustafson said Natchiq’s new well test module is expected to “significantly reduce the amount of time needed to evaluate a well. Reducing time is key to reduction of environmental and subsistence impacts. It appears to be a logical approach.” No partners – yet Within Armstrong’s Kuparuk-Thetis Island exploration area are several other leases, including one that belongs to Anchorage-based independent Winstar LLC and three leases owned by Anadarko Petroleum Corp. (see map).
One of the Anadarko leases contains Exxon’s 1993 Thetis Island No. 1 well and the other two are leases that Armstrong bid on in the October Beaufort Sea sale but lost to Anadarko.
“Although we’re initially approaching the Kuparuk-Thetis Island program on our own, we’ve talked with other companies about possible partnerships,” Bill Armstrong said.
“We have partnered with almost all the major North Slope players in the Lower 48 at one time or another,” he said. “We have always worked well together. … Right now we’re planning on doing this project alone. However, we may take on a partner like most wells drilled on the slope.”
Editor's note: Next week PNA will carry a feature story on Natchiq Technical Services.
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