Phillips, Anadarko announce NPR-A discoveries; BLM to hold two more NPR-A lease sales

Petroleum News Alaska

On May 21, Phillips Alaska Inc., a wholly owned subsidiary of Phillips Petroleum Co., and Anadarko Petroleum Corp. announced the first discoveries in the National Petroleum Reserve-Alaska since the area was reopened to exploration in 1999. The announcement was made by Phillips Alaska President Kevin Meyers at the annual Alaska Oil and Gas Association and Anchorage Chamber of Commerce luncheon in Anchorage.

At the same luncheon Fran Cherry, director of the Alaska office of the U.S. Bureau of Land Management, said his agency expects to hold a second oil and gas lease sale in the northeast corner of the National Petroleum Reserve-Alaska in June 2002, and has begun planning for a 2004 sale in the northwest portion of the reserve.

The NPR-A is west of the Colville River on Alaska’s North Slope.

During the past two winter drilling seasons, six wells and a sidetrack were drilled in the NPR-A. Five wells and the sidetrack, which targeted the Alpine producing horizon, all encountered oil or gas and condensate. These wells are Spark #1 and Spark #1A, Moose’s Tooth C, Lookout #1, Rendezvous A and Rendezvous #2. A sixth well, targeting a different interval, was a dry hole.

“These discoveries mark an important milestone in the Alaska oil industry,” said Kevin Meyers, president of Phillips Alaska. “Though the results are preliminary, we’re confident the discoveries will prove to be of commercial quantities. We believe that the five successful wells have encountered three separate hydrocarbon accumulations.”

Extensive testing was completed at the Spark drilling location this winter, in addition to an unstimulated test at the Rendezvous A well. The Spark #1A well tested at 1,550 barrels per day of liquid hydrocarbons and 26.5 million cubic feet per day of gas at a flowing tubing pressure of 1,500 psig. The Rendezvous A well tested at an unstimulated rate of 360 barrels per day of liquid hydrocarbons and 6.6 million cubic feet per day of natural gas. Three other wells were temporarily suspended to allow further evaluation next season.

These discoveries are located from 15 to 25 miles southwest of the 430-million-barrel Alpine oil field. Meyers said production was expected to be about 80,000 barrels a day at Alpine, but as of two weeks ago, production at the field jumped to 90,000 barrels a day. Extensive environmental and logistical studies will be conducted in the area this summer.

Ownership in these NPR-A leases and the Alpine field are: Phillips (operator), 78 percent; and Anadarko, 22 percent.

NPR-A sales planning on fast track

BLM’s Cherry said the Bush administration has also asked the agency to fast track another NPR-A sale for 2004. That sale will be in the northwest portion of the NPR-A. He said BLM is in the early stages of land-use planning now for the northwest portion.

Cherry said that since the 2002 sale will be a re-offering of lands previously made available, BLM will not issue a call for nominations or comments.

“However,” he said, “tracts will be renumbered and minimum bids, rentals, royalties and tract sizes could change if BLM revises the tract potential or size.”