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Goal: more North Slope wells per season Pioneer Natural Resources drops out of Tuvaaq unit; says new drilling rig will be specially designed for North Slope exploration Kristen Nelson Petroleum News Editor-in-Chief
The new rig Pioneer Natural Resources is having built for North Slope drilling will maximize the number of wells the company can drill in a winter season.
Pioneer said March 21 that its Alaska subsidiary has executed a multi-year contract with Doyon Drilling to build and operate a new drilling rig designed for exploration drilling on the North Slope. Pioneer said Akita Drilling will join Doyon in the construction of the rig. (See story in March 20 edition of Petroleum News.)
Pioneer also said it has assigned its 40 percent working interest in the Tuvaaq exploration unit on the North Slope to Kerr-McGee.
The new drilling rig will be built in Canada this summer and begin operations later this year, the company said. The rig will be “lightweight and highly mobile” and designed to maximize the number of wells that can be drilled over the Alaska winter drilling season. “This fit-for-purpose rig will significantly reduce drilling costs and increase productivity by reducing ice road and mobilization costs,” Pioneer said.
“We are very pleased to be working with two of the most experienced and efficient drilling contractors in the Arctic, Doyon and Akita,” said Ken Sheffield, president of Pioneer’s Alaska subsidiary. “The new rig is an example of the entrepreneurial approach Pioneer brings to the North Slope and underscores Pioneer’s strategy of providing strong returns and production growth through high-impact exploration in Alaska.” Tuvaaq: Ivishak sands wet Pioneer said in January that it planned a $50 million exploration program in Alaska in 2005, with activities in the National Petroleum Reserve-Alaska on “1.4 million acres in an under-explored area with various leads and prospects” where the company has a 20 percent to 30 percent working interest. The company said work would also be done in the Storms Lead area, a 130,000 acre position south of the Prudhoe Bay and Kuparuk River units where the company has a 50 percent working interest and is the operator.
The third area where Pioneer planned 2005 winter season work at Tuvaaq, operated by Kerr-McGee, a 14,000 acre block northeast of Pioneer’s Oooguruk unit “with a primary objective in the Ivishak sands and a secondary objective in the Schrader Bluff sands encountered in the adjacent Nikaitchuq unit.”
Pioneer said March 21 that it has assigned its 40 percent working interest in the Tuvaaq exploration well to Kerr-McGee.
The Tuvaaq well, Pioneer said, “encountered wet sands in the primary Ivishak objection and hydrocarbon-bearing sands in the Schrader Bluff interval.” The company said it decided to “assign its interest to Kerr-McGee rather than participate with a small working interest in the eventual development of the Schrader Bluff resource, most of which is found in the adjacent Nikaitchuq unit operated by Kerr-McGee.” As a result of this decision, Pioneer said, it will not have any capital expenses for the Tuvaaq exploration well.
Tuvaaq is the middle exploration unit in the Oooguruk-Tuvaaq-Nikaitchuq group, which forms an arc offshore the Kuparuk River and Milne Point units in the shallow waters of Harrison Bay. 1.6 million gross Alaska acres Pioneer drilled the discovery wells at Oooguruk in 2003, where it is operator and has a 70 percent working interest in 53,000 acres. Armstrong Alaska, which assembled the Oooguruk-Tuvaaq-Nikaitchuq acreage, holds the remaining 30 percent. Pioneer is spending $5 million in 2005 for front-end engineering and permitting at Oooguruk, and said that if a decision is made to develop Oooguruk, it would target first oil production in 2008.
Pioneer also holds some 6,000 acres at Gwydyr Bay north of the Prudhoe Bay field where there are several small discoveries the company plans to drill and tie into Prudhoe Bay infrastructure.
In January Pioneer said it had expanded its position in NPR-A by signing an exploration agreement with ConocoPhillips and Anadarko to acquire a 20 percent interest in approximately 452,000 additional acres as well as gaining rights to extensive seismic and geologic data in the NPR-A northeast planning area. In 2004, Pioneer said, it acquired a 20 percent interest in 167,000 acres in the NPR-A northeast planning area and in adjacent federal offshore waters in an agreement with the same companies. Pioneer also acquired 20 percent to 30 percent interests in approximately 808,000 acres in the northwest NPR-A planning area sale in 2004.
Pioneer said a 2005 winter 3-D seismic survey Pioneer and partner ConocoPhillips shot over the Storms area has been concluded, and said the companies “may drill the first exploratory well on the acreage as early as 2006.”
Pioneer said it is also participating with ConocoPhillips and Anadarko Petroleum Corp. in two to three wells in the National Petroleum Reserve-Alaska.
Doyon Drilling Inc. is a wholly owned subsidiary of Doyon Ltd., has five rigs operating on the North Slope and some 290 employees.
Akita Drilling is headquartered in Calgary, Alberta, has some 37 drilling rigs in all depth ranges and at full operations employs some 750 people. Akita has operations throughout Western Canada and the northern territories.
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