Nikaitchuq unit wells to explore 3 objectives

Update on Kerr-McGee, Armstrong winter exploration plans at Northwest Milne prospect: first drilling permit issued

Kristen Nelson

Petroleum News Editor-in-Chief

Kerr-McGee Oil & Gas and Armstrong Alaska have three targets in mind for wells from their proposed North Slope Nikaitchuq unit.

The companies have applied to the Alaska Division of Oil and Gas for formation of an exploration unit (see story in Feb. 1 issue of Petroleum News) and Kerr-McGee has received a drilling permit from the Alaska Oil and Gas Conservation Commission for an exploration well on one of the leases in the unit application.

Armstrong brought in Kerr-McGee, a large Oklahoma City-based independent, as majority partner and operator at the Northwest Milne prospect — the proposed Nikaitchuq unit — in early January.

Jan. 29, the companies filed an application for the Nikaitchuq unit in the Spy Island area immediately north of both the Kuparuk River and Milne Point units off Alaska’s North Slope.

There are some 12,978 acres in the proposed unit. Five of the eight leases expire Dec. 31 unless included in a unit; two expire May 31, 2008; one was just acquired by Armstrong and would expire in 2010.

Armstrong has been planning wells on this acreage. It told the state this fall that it would drill up to three Nikaitchuq wells at two locations offshore the Milne Point unit in the Spy Island area some three miles north of Oliktok Point.

The companies said in their unit application that three wells are planned for the Nikaitchuq exploration unit: one to be drilled this winter, one to be drilled in 2006 or earlier, and the third well to be drilled in 2008 or earlier.

Both Armstrong and Kerr-McGee have said they would like to drill more than one well this winter, depending on the test results from the first well and the drilling window on the North Slope.

The drilling permit Kerr-McGee received from the Alaska Oil and Gas Conservation Commission is for the Nikaitchuq No. 1, to be drilled from a surface site in section 16, township 14 north, range 9 east, Umiat Meridian, to a bottom hole in section 9-T14N-R9E, UM, on state leases ADL 388580 and ADL 388582. The companies said in their unit application that the No. 1 well has a proposed true vertical depth of 9,150 feet.

The unit application lists the other two proposed wells as the Nikaitchuq No. 3 and No. 4. These are also deviated holes, both from the same proposed surface as the No. 1 well.

The No. 3 has a bottom hole in section 4-T14N-R9E, UM, and a proposed true vertical depth of 9,600 feet.

The No. 4 has a bottom hole in section 20-T14N-R9E, UM, and a proposed true vertical depth of 7,500 feet.

In drilling plans which Armstrong filed with the state this fall it said drilling would be with a land-based drilling rig from an ice pad and approximately four miles of ice road, access to which would be from the existing North Slope road system at Oliktok Point.

The companies said in their unit application that they plan 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 over the northwest Milne structure and within our proposed Nikaitchuq exploration unit.”

The Jurassic interval, the secondary interval of prospective interest, has been tied to three-dimensional seismic and to the Thetis Island No. 1, Ivik No. 1, Oooguruk No. 1 and Kalubik No. 1 wells, the companies said.

And the third objective, the Brookian interval, was found “with good reservoir quality and hydrocarbon shows” in wells directly to the southwest of Nikaitchuq.