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Discovery yields not just oil, but high-quality oil Kerr-McGee finds oil at Northwest Milne Point prospect on Alaska’s North Slope Kristen Nelson Petroleum News Editor-in-Chief
Kerr-McGee said March 24 that it encountered “high-quality hydrocarbons” at its first Nikaitchuq exploration well in the Spy Island area in shallow waters of the Beaufort Sea off Alaska’s North Slope.
This is the Northwest Milne Point prospect assembled by Denver, Colo.-based Armstrong Oil and Gas, which last year brought in Oklahoma City-based Kerr-McGee as 70 percent working interest owner and operator.
Rick Buterbaugh, Kerr-McGee’s vice president of investor relations, said in an interim first-quarter conference call that the company “encountered high-quality hydrocarbons from the initial Nikaitchuq well.
“We are currently testing this well, which is expected to finish this week,” he said.
Buterbaugh said the company was “encouraged by these results, which confirm hydrocarbons nearly five miles to the northwest of a well that encountered pay from the same intervals on this prospect.”
The company is currently drilling the Nikaitchuq No. 2, he said, with an expected bottom hole some 9,000 feet from the initial well.
“This well,” he said, “may test the down-dip limit of the reservoir.”
Drilling at the No. 2 well is expected to be finished “within the week.”
The Nikaitchuq No. 1 was permitted from a surface in section 16-township 14 north-range 9 east, Umiat Meridian, to a bottom hole in section 9-T14N-R9E, UM.
The No. 2 was permitted from a surface in 22-T14N-R9E, UM, to a bottom hole in 15-T14N-R9E, UM. Wells in proposed unit The wells are in the proposed Nikaitchuq exploration unit, applied for in January by Armstrong Alaska on behalf of itself and proposed unit operator Kerr-McGee. The unit covers some almost 13,000 acres in eight oil and gas leases. In their unit application the companies told the Alaska Division of Oil and Gas that they planned to test prospective intervals in the Cretaceous Brookian sandstone, the Jurassic Nuiqsut sandstone and the Triassic Sag River sandstone.
They said exploration and development drilling in the area of the Nikaitchuq unit “establishes an overall prospective trend for improved Sag River sand quality and thickness to the north/northwest of the Milne structure and within our proposed Nikaitchuq exploration unit.”
The companies said the Jurassic interval, the secondary interval of interest, has been tied to 3-D seismic and to the Thetis Island No. 1, Ivik No. 1, Oooguruk No. 1 and Kalubik No. 1 wells.
The third objective, the Brookian interval, was found “with good reservoir quality and hydrocarbon shows” in wells directly to the southwest of Nikaitchuq, Armstrong said in the unit application.
The companies said the Nikaitchuq No. 1 had a proposed true vertical depth of 9,150 feet. What’s next? The wells are being drilled with a land-based drilling rig from an ice pad and required approximately four miles of ice road, with access from the existing North Slope road system at Oliktok Point.
The companies said in their unit application that three wells were planned, one each in 2004, 2006 and 2008, but both the companies have said they would like to drill more than one well this winter, depending on results of the first well and the North Slope drilling window.
Buterbaugh said that “data collected from these wells will be the foundation for better calibrating the 3-D seismic that we have over this area. The 3-D will be reprocessed this summer in preparation for the next drilling season.”
Kerr-McGee has a 70 percent interest in the prospect, he said, owns 12,000 acres in the area and has an option to acquire an additional 54,000 acres.
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