|
Explorers 2011: Pioneer expanding Oooguruk efforts Dropped Cosmopolitan, but expanding Oooguruk, gearing up for Torok exploration program Eric Lidji For Petroleum News
Pioneer Natural Resources Alaska Inc. is expanding and contracting at the same time.
While the local subsidiary of the Texas independent continued to relinquish assets across Alaska this year, it also redoubled its efforts at its signature development in the state.
As one of the large independents brought to Alaska by Armstrong Oil and Gas over the past decade, Pioneer arrived in the early 2000s looking to shorten the amount of time it took for companies to bring new fields into production in the state. Pioneer bought a majority stake in the offshore Northwest Kuparuk prospect — now known as Oooguruk — and quickly racked up other leases across the state, but after unpromising drilling efforts, the company shifted its focus away from exploration in favor of developing two areas: the Oooguruk unit off the North Slope and the Cosmopolitan unit in Cook Inlet.
After dropping Cosmopolitan earlier this year, Pioneer is now focused entirely on Oooguruk, where it plans to continue developing three horizons in the coming year.
After building a gravel island in the state waters of the Beaufort Sea north of the Kuparuk River unit, Pioneer brought the Oooguruk unit online in June 2008, becoming the first independent and the fourth overall operator to produce on the North Slope. The company owns 70 percent of the unit and Eni Petroleum owns the remaining 30 percent.
Moraine/Torok/Nuna Although Pioneer initially seemed bullish about exploring and developing overlooked prospects across Alaska, it quickly settled into a more narrow approach in the state.
The company drilled five exploration wells in northern Alaska — both operated and non-operated — but stopped its exploration program in late 2007 because of discouraging results and relinquished some 300,000 acres of federal leases in the National Petroleum Reserve-Alaska held in partnership with ConocoPhillips and Anadarko Petroleum.
Over the following years, though, Pioneer expanded its operations at Oooguruk.
In early 2009 Pioneer increased its resource estimate for the unit by 40 percent based on initial drilling results that exceeded expectations, and in 2010 it announced plans to target an additional horizon at the unit that it said would increase production even further.
Torok now targeted When Pioneer sanctioned Oooguruk it began developing two distinct pools, the Kuparuk pool and the deeper and larger Nuiqsut pool, but early exploration drilling at the unit, including the Cronus No. 1 well in 2006, also targeted a shallower Torok formation.
After years of drilling wells through Torok to get to deeper pools, Pioneer accumulated enough information to justify developing the formation, calling it the Moraine prospect.
According to Pioneer, the Torok formation at Oooguruk consists of 200 to 250 feet of thinly laminated sands and shales located some 1,000 feet above the Kuparuk formation.
Existing data on Torok dates back to the Sinclair Colville River No. 1 well from 1965, the Texaco Colville Delta No. 2 and No. 3 wells from the 1980s, the ARCO Kalubik No. 1 and No. 2 wells from the 1990s and 18 wells Pioneer drilled through the formation over the years, including the 3,000-foot ODST-45A drilled from the offshore island directly into the formation in 2010 and produced at an initial rate of 1,100 barrels per day.
Because the Torok reservoir extended past the southern boundary of Oooguruk, and a considerable distance from the existing gravel island, Pioneer proposed the Nuna Development Project in late 2010. The project would include two new onshore drill sites on the east side of the Colville River to allow Pioneer to approach the reservoir from the opposite direction. A system of gravel roads would connect the new drill sites to the existing North Slope infrastructure grid in the region around the Kuparuk River unit.
The plans currently call for processing that oil through existing facilities, but Pioneer also held out of the possibility of building standalone processing facilities at the location.
Pioneer currently rents space on facilities operated by ConocoPhillips in the Kuparuk River unit, but is facing problems in that arrangement. In addition to being at the whim of the maintenance schedule of the larger and older field, Pioneer recently said it lost some 2,500 and 3,000 barrels of oil per day of production in 2011 because of water shortages and is looking for an independent supply source to avoid that problem in the future.
The Alaska Department of Natural Resources formed the Torok participating area in July and added four leases to the unit in September to bring the entire reservoir into the unit boundaries. Pioneer believes Torok holds 690 million barrels of oil in place and estimated that it can produce up to 25 percent through primary and secondary recovery methods.
Torok pilot wells Under the most recent plan of exploration running through 2014, Pioneer must drill three Torok pilot wells from the existing gravel island. The first, T-45A, is currently in production. The second, T-46i, is an injection well scheduled to be completed by the end of September. The third, T-39, is a producer that must be completed by March 31, 2012.
The state also gave Pioneer until June 30, 2014, to sanction the Nuna development.
Should Pioneer move ahead, it said it plans to build the gravel roads and the first Nuna drill site pad, DS-1, by June 30, 2015, in order to begin drilling in the expansion area by 2016. Pioneer is also proposing to build a second onshore Nuna drill site in the future.
This winter it plans to drill two wells as part of that program.
The offshore Sikumi No. 1 well would be a vertical well starting on ADL 355037, some two miles southwest of the existing Oooguruk Island, but still within the Oooguruk unit boundaries. The onshore Nuna No. 1 well would be a directional well starting on ADL 25528, some 2.5 miles northwest of KRU drill site 3S within the Kuparuk River unit.
Pioneer hopes to begin drilling Nuna No. 1 in early January, and Sikumi No. 1 in mid-February, and continue hydraulic fracturing and flow testing operations through the end of April. Produced fluids would be taken to existing production facilities in the region.
While Sikumi No. 1 would be plugged and abandoned after completion, Pioneer said it plans to preserve Nuna No. 1 as a development well for future work in the region.
Leaving Cosmopolitan For years, Pioneer supplemented its efforts at Oooguruk through its work at the Cosmopolitan unit located off the southern Kenai Peninsula in the Cook Inlet basin.
The prospect dates back to the Pennzoil Starichkof State No. 1 discovery well in 1967 and the Hansen No. 1 and Hansen No. 1-A well and sidetrack ConocoPhillips drilled in 2002 and 2003. Pioneer acquired a 50 percent stake in the 25,000-acre state and federal unit in 2005 and picked up the remaining half and the title of operator the following year.
In 2007, Pioneer drilled the Hansen 1A 1L sidetrack from the same onshore pad used by ConocoPhillips and later announced that the three wells together produced at about 1,000 barrels per day, enough to encourage the company to keep evaluating the prospect.
The sudden drop in oil prices in late 2008 delayed further drilling at Cosmopolitan but the company eventually completed a workover of Hansen 1A-L1 in early 2010 and even laid out a development plan that involved trucking oil to the Tesoro refinery in Nikiski.
In January 2011, though, Pioneer gave up on Cosmopolitan, saying that the results of a recent flow test led the company to reduce its estimate of the size of the offshore field.
DNR subsequently leased the prospect under special terms to Apache Corp.
Alaska is increasingly competing with Texas in the Pioneer portfolio.
While Pioneer expands its operations at Oooguruk, it is also expanding its operations in the Lower 48, particularly in the Eagle Ford shale and Permian basin of Texas. Of its $2.1 billion budget for 2011, about $100 million is dedicated for Alaska while nearly $1.3 billion is slated for the Spraberry field in the Midland-Odessa area of West Texas.
Asked in August whether Pioneer is still interested in international and frontier plays like South Africa and Alaska, Sheffield said “it’s always an option in regard to whether or not to look at divesting those two assets,” but added that the company sees South Africa as “running out” and sees Alaska as “growing significantly over the next several years.”
| 