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Companies eyeing ‘billions’ onshore Three operators are pursuing exploration and development projects in the ‘billion-dollar fairway,’ home to decades of work Eric Lidji For Petroleum News
The “billion-dollar fairway” is supposedly what ARCO Alaska called the land between the Kuparuk River unit and the National Petroleum Reserve-Alaska, a long strip running from north to south that seems like it should be home to massive oil production, but isn’t.
That could be changing soon.
Over the past year, the Alaska Department of Natural Resources approved the formation of five units in that fairway, and is currently considering an application for a sixth.
Those six units, from south to north, are the Brooks Range Petroleum Corp.-operated Putu, Tofkat, Kachemach and Southern Miluveach units, the ASRC Exploration LLC-operated Placer unit and the Qugruk unit proposed by Repsol E&P USA Inc.
Those three companies could drill as many as 15 wells in just those units by mid-2014, and CGG Veritas recently announced plans for a 3-D seismic survey covering almost the entire region.
Decades of exploration wells Exploration in the fairway pre-dates the discovery of Prudhoe Bay.
The state first leased acreage in the northern portion of the fairway in December 1964, and Sinclair drilled the first wildcat in the region, the Colville No. 1, in 1965 and 1966.
In the decades since, companies have often returned to the region from the Colville Delta south, particularly as the Kuparuk River unit to the east and the Colville Rover unit to the west made the fairway perhaps the closest acreage to infrastructure on the North Slope.
Those previous wells form the basis for the six current projects.
Putu unit Starting in the south, the Putu unit is not home to any previous exploration drilling, but there have been four wells drilled nearby — ARCO’s Itkillik River Unit No. 1 in 1972, Phillips Alaska’s Atlas No. 1 and Atlas No. 1-A in 2001, and Pioneer Natural Resources Alaska’s Cronus No. 1 in 2006. All four wells encountered hydrocarbon-bearing zones in the Brookian Torok formation, but none promising enough to warrant development.
In 2008, Brooks Range Petroleum acquired 220 square miles of 3-D seismic covering almost the entire unit, identifying “numerous exploration prospects and leads,” including the Musketeer trend and Big Foot trend. The company committed to drilling four wells into the Upper Jurassic-age strata of the Kingak formation in the unit by May 31, 2013.
Tofkat unit Just a mile to the north, surrounding the village of Nuiqsut, the Tofkat unit is where Brooks Range Petroleum drilled a well and two sidetracks in 2008 — Tofkat No. 1, Tofkat No. 1-A and Tofkat No. 1-B — discovering “an oil reservoir within the C member of the Kuparuk Formation, and two reasonably defined and delineated potential hydrocarbon accumulations in the shallower Nanushuk and Torok formations.”
Brooks Range Petroleum is committed to drill a well and a sidetrack into the Kuparuk formation at the unit — Tofkat No. 2 and Tofkat No. 2-A — by May 31, 2013. Kachemach unit Beginning some two miles east of Tofkat and running north along the Colville River, the Kachemach unit is not home to any previous exploration drilling, but several companies drilled wells just outside of the unit boundaries that never led to development. Those wells include Union Oil Co. of California’s Kookpuk No. 1 in 1966 and 1967, ARCO’s Colville River No. 1 in 1993 and ConocoPhillips’ Oberon No. 1 well in 2003.
Based on those wells and seismic information acquired this year, Brooks Range Petroleum indentified potential structural closures in the Nanushuk and in the deeper Kuparuk formation. To follow up on those hunches, the company is committed to complete two wells — targeting the Caribou and Moonlight trends — by May 31, 2013.
Southern Miluveach unit The Southern Miluveach unit is some 10 miles east of Kachemach, contiguous to the Kuparuk River unit, and is home to recent exploration, in addition to older wells nearby.
After studying the previous wells in the region, particularly ConocoPhillips’ KRU-2L-03 step-out well from the Kuparuk River unit, Brooks Range Petroleum acquired seismic information in 2008 and earlier this year drilled the North Tarn No. 1 well identifying an oil reservoir in the Kuparuk C sand. The company is now committed to complete three wells/sidetracks — the North Tarn No. 1-A well, the Mustang No. 1 well and the Mustang No. 2 well or sidetrack — into the Kuparuk formation by May 31, 2012.
ASRC sees Placer potential Nestled between the Kachemach and Southern Miluveach units, the ASRC Exploration-operated Placer unit covers four leases and 1,480 acres, and two recent exploration wells.
Following an ARCO seismic survey in the region in 1997, ConocoPhillips drilled the Placer No. 1 and Placer No. 2 wells in 2004, as part of Kuparuk River unit expansion.
Arctic Slope Regional Corp., the Alaska Native corporation for the North Slope area, quietly came on as a working interest owner in late 2004, its first investment as an independent oil and gas company under its mentoring agreement with BP Exploration (Alaska). ConocoPhillips gave up the leases after its wells proved unsuccessful, but ASRC reacquired them in 2006 and later secured ownership of the Placer No. 1 wellbore.
Since then, the company formed ASRC Exploration and became a minority partner in Savant Alaska LLC’s recent efforts to restart and increase production at the Badami unit.
Now, ASRC Exploration is beginning its first solely owned exploration project. The company told state officials that Placer No. 1 well results “demonstrated that decent quality oil is present in a thin, but high quality reservoir in the Placer area,” particularly in the Kuparuk C sand that is the focus of nearby exploration and development.
Under its unit agreement, ASRC Exploration must reprocess and reinterpret newly licensed seismic data shot across the unit by the end of the year, and must drill and log a new exploratory well, or re-enter and test the Placer No. 1 well, by June 30, 2013.
Repsol going strong The proposed Qugruk unit fills in the remainder of the fairway to the north.
Repsol proposed a 98,852-acre unit covering a T-shaped area running along the coastline between the Colville River and Oooguruk units and south over the Colville River Delta.
The Spanish major is proposing the unit alongside Denver-based independent partners 70 & 148 LLC (a subsidiary of Armstrong Resources LLC) and GMT Exploration Co. LLC.
The region is home to heavy exploration work stretching back decades, and the proposed unit itself is home to six previous wells. Repsol divides the previous work in the area into four “distinct phases,” the late 1960s and early 1970s, the early to mid-1980s, the 1990s and the latter half of the 2000s. After crunching the data from those wells, Repsol and its partners are chasing “sands within the upper portion of the Jurassic Kingak Shale, the Cretaceous Kuparuk ‘C’ sand and several sands within the Cretaceous Nanushuk Group.”
Although the unit application is still pending, Repsol is already gearing up for an ambitious North Slope exploration campaign this winter that could include 15 wells and sidetracks across a large expanse of acreage, including four planned for the Qugruk unit.
—A copyrighted oil and gas lease map from Mapmakers Alaska was a research tool used in preparing this story.
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