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ASRC Exploration wants to expand Placer Applies to Division of Oil and Gas, says sand appears to merge with Brooks Range Petroleum Corp. Appaloosa prospect to south Kristen Nelson Petroleum News
After failing to win approval of a proposed 8,769-acre Placer unit last year, Arctic Slope Regional Corp.’s ASRC Exploration LLC has applied to increase the size of the 1,480-acre unit approved Sept. 8, 2011, by the Alaska Department of Natural Resources, Division of Oil and Gas.
Teresa Imm, president of ASRC Exploration, told the division in the Aug. 20 application that “interpretation of the sand indicates that the Kuparuk sand at Placer extends well beyond the current unit boundaries.”
Placer is west of the Kuparuk River unit.
She cited “seismic attributes” indicating the Kuparuk sand is present in each section of the four Placer leases.
“Based on the modeling and analysis of the re-processed seismic data,” the company is requesting that the Placer unit be expanded to include all of the acreage in the four leases: ADLs 391023, 391024, 391027 and 391028.
ASRC Exploration owns 100 percent of the working interest in the leases and portions are already committed to the Placer unit under the September 2011 division decision.
The company’s earlier application had included all of the acreage in the leases, but the division only approved a small portion
The Appaloosa connection Imm told the division the Placer sand “is, at best, only marginally large enough to develop,” so placing a single pad development at the most advantageous location “is critically important.”
She also said the Kuparuk sand at Placer “appears to merge with the BRPC Appaloosa prospect to the south,” referring to a prospect lying between Placer and Mustang.
BRPC, Brooks Range Petroleum Corp., plans to bring its Mustang project into production by 2014, and has said it wants to explore a potential Kuparuk formation extension of Mustang to the northwest called Appaloosa that could add reserves and field life to a Mustang development.
Imm said that because of BRPC’s interest in Appaloosa, it may be prudent to involve BRPC in unit expansion discussions “and in the locating of the delineation well so that the area from Placer to Mustang can be developed in an optimal manner in order to maximize the economic recovery of these thin sands.”
She said ASRC Exploration believes it is in the state’s best interest for ASRC Exploration and BRPC to work together in determining delineation well positions “so that the region from Placer to Mustang can be developed efficiently. The two companies are currently working toward that goal,” Imm said.
ASRC Exploration is also requesting a one-year deferral of the Placer well obligation — currently set for 2013 — to further the company’s evaluation of the Placer unit and to allow it “to work with BRPC on developing the most efficient plan for delineating and developing this area.”
E&P business Arctic Slope Regional Corp. got into the exploration business in March 2003 when it entered into a “mentoring” agreement with BP Exploration Alaska, allowing “for sharing data and technical knowledge” between the two companies, including information on unit and near-unit oil and gas investment opportunities.
ASRC, the Native corporation that represents the business interests of Inupiat Eskimos in Arctic Alaska, bought into its first prospect — Placer — in 2004, farming into BP’s acreage and assuming a portion of the cost of the Placer No. 1 well in exchange for a 35 percent working interest.
When Placer was drilled, it was in a Kuparuk River unit expansion area. In addition to Kuparuk operator ConocoPhillips, BP, Unocal, ChevronTexaco and ExxonMobil were partners in the Placer area. The Placer No. 1 well was a requirement of the unit expansion. ConocoPhillips had until 2007 to either relinquish the Placer leases or get them into a participating area and submit a plan of development.
The Placer No. 1 well was suspended; a second well, Placer No. 2, was drilled, but, the state said, the partnership ultimately decided the reservoir discovered in Placer No. 1 was not economic and the leases were dropped.
ASRC Exploration acquired the leases in a 2006 lease sale with a five-year primary term, and subsequently acquired ownership of the Placer No. 1 well bore from ConocoPhillips to maintain the option for testing. The state said in 2011 that ASRC Exploration has also pursued acquiring 3-D seismic over the area.
The division said in its 2011 decision that the Placer No. 1 “demonstrated that decent quality oil is present in a thin, but high quality reservoir in the Placer area. Additional work and delineation is required to determine if this reservoir has sufficient volume to be commercially viable.”
The 2011 decision required reprocessing and reinterpretation of newly licensed seismic data by Dec. 31, 2011, and drilling of an exploratory well or re-entry and testing of the Placer No. 1 by June 30, 2013.
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