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THE EXPLORERS 2004: Winstar continues to evaluate seismic data Independent evaluating data for leases near Point McIntyre and between Liberty and Badami Alan Bailey Petroleum News
Jim Weeks, former senior ARCO Alaska executive and president and CEO of Winstar Petroleum LLC, told Petroleum News in October 2004 that Winstar is continuing to evaluate seismic data for several of its North Slope leases. Weeks said the evaluations have not yet reached a point where company officials can decide on additional drilling.
Founded in 1997 by Petersburg fisherman John Winther and Seward businessman Dale Lindsey, Winstar spud its first North Slope well, the Oliktok Point State No. 1, in June 2003.
Although the well, drilled by ConocoPhillips for Winstar, came up dry, the company and its sister firm, UltraStar Exploration, have continued to monetize their asset base on Alaska’s North Slope and hope to be the first independent founded by Alaskans to produce oil from the slope.
The two firms hold more than 20,000 acres of state leases on the slope, including an override on a 2,000 acre lease that is part of the Pioneer Natural Resources-operated Oooguruk unit which is slated for possible production next year.
The well, which was drilled onshore from Kuparuk unit drill site 3-R to an offshore target, was “a huge disappointment,” Weeks said, but, “We paid the price we wanted to pay ($6 million). At least it didn’t cost us three times what we had planned to spend.”
Winstar’s efforts to get the Oliktok Point well drilled represented the first complete test of a 1999 charter agreement with the state of Alaska which obligates two (ConocoPhillips and BP) of the three major facility and pipeline owners on the North Slope to provide reasonable access to its infrastructure for non-owners.
Weeks didn’t just negotiate an exploration agreement with ConocoPhillips and its partners at Kuparuk. He negotiated a deal all the way through production, so that Winstar could be assured of reasonable terms if it found oil.
West of Point McIntyre The company is currently evaluating data for leases near Point McIntyre and between Liberty and Badami
Weeks said Winstar has purchased a license to use some 3-D seismic data for an area in the Prudhoe Bay unit just west of the Point McIntyre operating area. The seismic was originally shot by ARCO and is now owned by ConocoPhillips, BP and ExxonMobil.
“We were successful in obtaining a license to that data from the owners … and that data is currently being analyzed by … Petrotechnical Resources of Alaska (PRA),” Weeks said.
Winstar has two leases in the area west of Point McIntyre and has obtained enough seismic to assess whether there’s a promising-looking prospect. We already had some 2-D seismic, but you really need the 3-D data, he said.
The need to negotiate access to existing oil and gas facilities would impact the timeframe for any development in this area — 100 percent agreement from the owners of the Lisburne and Point McIntyre facilities would be essential. However, Weeks doesn’t see that agreement as a major obstacle because the same owners approved the Oliktok Point deal.
“We do have a precedent out there,” he said.
The Liberty/Badami area Winstar also has two sets of leases between BP (Exploration) Alaska’s offshore Liberty prospect and BP’s onshore/offshore Badami unit. The company has two to three prospects between the two groups of leases, Weeks said. The two Liberty leases are offshore in Foggy Island Bay southwest of Liberty, but Weeks said they can be drilled from shore.
A subsidiary of Chroma Energy of Sugar Land, Texas, has completed an analysis of some 3-D seismic data that Winstar obtained from BP for much of the Liberty and Badami areas. PRA is doing further analysis of the data.
Weeks expects that any development in this area would require access to the Badami facilities, currently in warm shutdown. There would need to be a sizable oil find for the economics of using the Badami pipeline to work, he said.
“If PRA identifies the structure or structures that justify drilling investments, we’ll start serious negotiations with BP to get access,” Weeks said.
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