|
Phillips applies to expand Colville unit from 80,000 acres to 140,000
Kristen Nelson, PNA Editor-in-Chief
The western North Slope Colville River unit will increase in size by more than half if the Department of Natural Resources and Arctic Slope Regional Corp. accept an expansion application submitted in August by unit operator Phillips Alaska Inc.
A sizeable portion of that expansion will be for two new exploration areas, Titania and Oberon, south and southeast of the existing unit.
The expansion proposal, some 60,000 acres, also includes a Fiord expansion area to the northwest and a Nanuq expansion area to the southwest.
The state approved a first expansion of the unit, some 5,800 acres, in 2000, bringing the unit to more than 86,000 acres.
Anadarko partner in Alpine Phillips and partner Anadarko Petroleum Corp. began producing the Alpine field at the Colville River unit in November 2000.
To hold onto the expansion acreage the working interest owners must meet requirements for the four expansion areas which include approval of participating areas and — in the undrilled areas — exploration drilling.
Phillips Alaska, Phillips Alpine Alaska, Anadarko and Petro-Hunt LLC are the only working interest owners in the expansion areas, Phillips said in its application.
The working interest owners plan to form participating areas at Fiord and Nanuq, where production may begin as early as 2006, “depending on permitting success and economic conditions,” Phillips said. Nanuq and Fiord may have standalone drill sites, but will make use of existing Colville River unit infrastructure and processing capacity.
There are no wells yet in the Titania and Oberon areas, Phillips said, but the working interest owners have acquired three-dimensional seismic in those areas.
Phillips said that nine wells have been drilled in the Fiord area. Sohio drilled the Nechelik 1 in 1982 and ARCO began drilling in the area with the Fiord 1 in 1992. Other wells include the Temptation 1 and 1A in 1996, the Fiord 4 and Fiord 5 in 1999 and the Nigliq 1 and 1A in 2001. The working interest owners also acquired a 3-D seismic survey of some 70 square miles in the Fiord area in the winter of 1999-2000.
ARCO began drilling at Nanuq in 1996 and drilled a second well in 2000. Phillips drilled three additional wells at the prospect, two in 2001 and one in 2002. The working interest owners acquired 3-D seismic at Nanuq in the 2000-2001 winter season which also covered most of the Oberon and Titania areas, some 80 square miles total.
Participating areas envisioned Two development areas are proposed in the northwest expansion area: Fiord and Nigliq. Phillips said the working interest owners must have an approved Fiord participating area within four years from the effective date of the second expansion — Nov. 8 is the requested effective date — or all of the Fiord expansion area will contract out of the unit.
Within five years from the effective date of the second unit expansion, the working interest owners must have approved expansion of the Fiord participating area to include the Nigliq development area or all of the Fiord expansion area not in an approved participating area will contract out of the unit.
The Nanuq expansion area is divided into the 15,000-foot Nanuq development area and the 20,000-foot Nanuq development area. Participating area requirements for Nanuq are that the 15,000-foot Nanuq development area must have n approved participating area within four years of the effective date of unit expansion or all of the Nanuq expansion area will contract out of the unit.
Within five years of approval of the expansion the working interest owners must have an approved expansion of the Nanuq participating area to include the 20,000-foot Nanuq development area or all of the Nanuq expansion not in a participating area shall contract out of the unit.
Phillips said that working interest owners drilled the Nanuq 5 during the winter of 2002 to a bottomhole location on lands within the boundaries of the Nanuq expansion area.
Oberon well by June 2003 For the Oberon expansion area, Phillips said the working interest owners must drill a test well by June 1, 2003, to a bottomhole location in the Oberon expansion area or all of the acreage within the Oberon expansion area will contract out of the unit.
A second test well must be drilled by June 1, 2004, or all of the acreage within the Oberon expansion will contract out of the unit and the Colville River unit working interest owners must make a payment to the state and ASRC, proportionately, of $340,000. If, however, the working interest owners notify the state and ASRC by June 1, 2003, that they have elected not to drill the second Oberon well, then the acreage will contract out of the unit but the $340,000 payment will not be required.
If both Oberon wells are drilled, then the working interest owners must have an approved participating area including any portion of the Oberon expansion area within five years of the expansion or the expansion area will be contracted out of the unit.
Titania well by 2004 In the Titania expansion area, the working interest owners must commit in writing by June 1, 2003, to drill a test well and must drill the test well by June 1, 2004, or all of the acreage within the Titania expansion area will contract out of the unit and the working interest owners must make a payment of $122,000 proportionately to the state and ASRC. If the working interest owners give written notice by June 1, 2003, that they elect not to drill the first Titania test well, then the Titania acreage contracts out of the unit but the payment is not due.
A second Titan well must be drilled at least one mile from the bottomhole of the first Titania well by June 1, 2005, or all of the Titania acreage will contract out of the unit and a payment of $244,000 is due. If written notice is given by June 1, 2004, that the second Titania well will not be drilled, then the acreage within the Titania expansion area will contract out of the unit but the payment will not be due.
If both wells are drilled, then working interest owners must have a participating area approved including any portion of the Titania expansion within five years of the second expansion or the Titania acreage will contract out of the unit.
| 