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Alaska Venture Capital Group files for unit at Gwydyr Bay, south of Northstar unit
Petroleum News Alaska
On June 1, the Alaska Venture Capital Group applied to the Alaska Department of Natural Resources Division of Oil and Gas for approval of the Sakonowyak River unit in Gwydyr Bay at the mouth of the Sakonowyak River, south of the Northstar unit and north of the Prudhoe Bay unit.
The state said the application was filed June 1 by AVCG LLC on behalf of BP Exploration (Alaska) Inc., the designated unit operator. BP has 62 percent working interest and AVCG has 38 percent working interest in the unit.
The proposed unit includes five leases and covers approximately 11,520 acres. The applicants have requested a three-year term. If approved by the state, exploration and development would occur in accordance with a unit plan of exploration and development accepted by DNR. First well by May 1, 2003 John Jay (“Bo”) Darrah Jr. of AVCG told PNA in early May that AVCG “had some lease interests near Alpine that we traded with Phillips for their working interests in five leases in Gwydyr Bay … our interest varies from one-quarter interest in most leases — in one lease we own 75 percent.”
AVCG is in the process of purchasing a partial interest in one of the leases from ExxonMobil. BP holds 75 percent interest in four of the leases and AVCG 25 percent; in one lease BP holds 16.67 percent and AVCG will hold 83.33 percent once the transfer from ExxonMobil is complete.
Darrah and Bart Armfield of Kansas are the main principals in AVCG.
“We wanted to drill a well at Gwydyr Bay — that’s what started all this,” Darrah said.
The unit application includes an initial plan of exploration that calls for drilling two wells – the first before May 1, 2003.
The first well, 1 Sak River, would be drilled in block A on the eastern side of the unit: leases ADL 385198, ADL 377051 and ADL 385202.
The plan of exploration requires the working interest owners to notify the state on or before May 1, 2002, whether or not they will permit, drill and complete an exploration in the Sakonowyak River unit and have tested it to TD by May 1, 2003.
The proposed well would be drilled as a winter operation from an ice pad to depths sufficient to penetrate the Kuparuk formation or 8,600 feet TVD.
If the leaseholders fail to make a decision to drill by May 1, 2002, the unit will automatically be terminated and its leases surrendered.
ADL 377051 in block A has an expiration date of July 31, 2001. The other leases in the proposed unit expire in January or March of 2003.
If the working interest owners elect to drill and fail to complete the 1 Sak River by May 1, 2003, they will pay the state $15,000. Second well by May 1, 2004 The plan of exploration proposes that a second well be completed by May 1, 2004, in block B, leases ADL 385199 and 385201, on the west side of the unit. The well would be a winter operation from an ice pad or, if from gravel, could be a year-round operation.
The drilling obligation for block B and the 2 Sak River well could be satisfied with a side track from the 1 Sak River if the bottom hole of the second well is a minimum of1,500 feet from the bottom hole of the first well — and is in a different fault block.
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