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Phillips Alaska applies to expand Colville River unit Proposal would add 5,871 acres which unit owners believe extend Fiord discovery to north of existing unit, extend one lease set to expire this year Kristen Nelson PNA News Editor
Colville River unit operator Phillips Alaska Inc. has applied to the state and the Arctic Slope Regional Corp. to expand the unit to include five leases (5,870.55 acres) “that are viewed as having significant exploration potential in the same or similar geologic horizons discovered in the 1999 Fiord exploration program.”
Phillips Alaska (previously ARCO Alaska Inc.), Phillips Alpine Alaska LLC (previously Union Texas Alaska LLC), Anadarko Petroleum Corp. and William Herbert Hunt Trust Estate are the only working interest owners in the expansion area, Phillips said in its application.
Phillips said that from the 1999 Fiord exploration program, it estimates gross proven and potential Fiord reserves within the current Colville River unit boundary of at least 40-50 million barrels of oil, and the working interest owners of the expansion area hope to add reserves to a Fiord development by exploration and delineation drilling in the expansion area, leases ADL-25526, ADL-380092, ADL-384215, ADL-388525 and ADL-388901.
First production from Fiord could come in 2005 with production rates between 10,000 and 15,000 barrels of oil per day. Phillips said Fiord development would likely include a standalone drill site, but would make use of existing Colville River unit infrastructure and processing capacity. 3-D acquired last season Phillips said 3-D seismic acquired in the 1999-2000 season covered the prospective Fiord area within the existing unit and the expansion area, and owners “wish to continue additional exploration activities in the prospective Fiord area by drilling exploration and delineation wells.” If final interpretation of the Fiord West 3-D seismic survey coincides with preliminary interpretation, the working interest owners will want to drill an exploratory well in the expansion area “no later than during the 2000/2001 winter season,” Phillips said.Fiord barely economic Phillips said “Fiord reserves discovered thus far are barely large enough to support the costs of one drill site and definitely will not support processing facilities.” If the expansion area is approved, and proves productive, “the economics of the potential Fiord development would be improved and more easily justified,” Philllips said.
The company said it was “highly unlikely” that the development of only the expansion area as a standalone project outside the Colville River unit would be economic. Lease expires this year One of the leases proposed for the expansion, ADL 25526, expires Nov. 11 this year. Phillips is proposing to the state that the expansion occur Nov. 1 — and that if a well is not drilled in the expansion area during the 2000-2001 drilling season, then the expansion leases would be eliminated from the unit. If the lease expires, Phillips notes, exploration drilling in the area couldn’t be done until after the lease was acquired in an areawide lease sale in 2001, delaying exploration by at least a year.
Phillips said the planed well would be drilled as a winter operation from an ice pad and would be drilled to penetrate the Nechelik formation or 7,700 feet true vertical depth, whichever is the lesser depth.
The working interest owners acquired 3-D over the Fiord West area and also acquired access to BP’s Fiord seismic data. Together, the 3-D seismic surveys cover all of the prospective Fiord area.
Philllips said that successful conceptual engineering for marginal (small and/or low permeability) fields in a near-shore environment would be required to justify exploration, delineation and development of the Fiord prospect.
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