THE EXPLORERS 2006 - Sun-West sees potential north of ANWR

Petroleum News

Sun-West Oil & Gas is at least one company that is undeterred by the State of Alaska’s recent decision to drop plans to drill a stratigraphic test well in the Beaufort Sea offshore from the Arctic National Wildlife Refuge.

The oil and gas investment company is managed by the Spear family of Midland, Texas. It successfully bid for a single tract next to the shore on the east side of the Arctic National Wildlife Refuge in the state’s Beaufort Sea areawide lease sale in March 2006. The lease is in the area where the state proposed a stratigraphic test well and is adjacent to the Angun Point oil seep.

Dubbed the Alaska Triple Play, the lease covers 2,645 acres just north of ANWR, according to a Web site for Spear Brothers Group. Sun-West is one of 12 companies, including other oil and gas investment firms, owned by the Spear brothers, Rex, Shane and Nelson.

“At this point, we have no plans for the lease,” Sun-West President Shane Spear said Oct. 18. “We bought it to put in our lease inventory.” That inventory, according to the Web site, reflects a sizable portfolio with leases all over the western United States and the Gulf States region.

The Web site tells potential investors that the Alaska lease offers an opportunity to drill one well and get three potential producing zones — Franklinian, Thrust-Belt and Niguanak-Aurora. It also urges interested parties to contact Spear Brothers for maps, reservoir data, and more information.

Stratigraphic test wells are done by a consortium of companies that hold the drilling results confidential until after a lease sale has been held in the area.

The state’s proposed ANWR test well was based on the federal COST well program in which a consortium gathers information on a basin by drilling in an area representative of the geologic structure being tested, but drilling off-structure with the specific intention of NOT hitting oil or gas because if significant amounts of hydrocarbons are encountered “it opens up a Pandora’s Box, trying to figure out who owns them,” Jim Cowan told Petroleum News Oct. 30. Cowan, now retired, headed up the Alaska Division of Oil and Gas’ ANWR strat test well program.

The tract Sun-West picked up in the 2006 lease sale was number 024 (ADL 390822), which is to the southwest of tract 025, one of two locations chosen by the division for an ANWR test well.

According to division geologist Paul Decker there would be a better chance of hitting hydrocarbons on the Sun-West tract because it “is in a high structural position with respect to a mapped closure published by the U.S. Geological Survey. It’s more of a prospect … where the strat well test location is in a structural low — a syncline.

The closest well to the two tracts is Tenneco’s 1987-88 Aurora well, which is about 17 miles from the proposed strat well location. “The Aurora was drilled down to 18,325 feet,” Decker said. The reservoir quality in that was “overall fairly disappointing. … The Kuparuk C equivalent sandstone was 178 feet thick but relatively tight. There were just some minor gas shows in a lower Brookian sandstone, but all the interesting sands ... were pretty deep.

Sun-West picked up another lease west of Kaktovik in 2000 (ADL 389710) in the vicinity of the alternative strat test location, and in the spot preferred by former division director Mark Myers, who now heads up the USGS.