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State approves Sakonowyak unit near Northstar; exploration plans include two wells AVCG behind effort to pull leases into a unit, Kansas independent filed unit application and exploration plan on behalf of field operator BP Kay Cashman PNA Publisher
The state Division of Oil and Gas has approved an application from Alaska Venture Capital Group LLC on behalf of unit operator BP Exploration (Alaska) Inc. to form the Sakonowyak River unit.
The new 11,520 acre unit includes five state oil and gas leases at the mouth of the Sakonowyak Rive in Gwydyr Bay. It abuts the western border of the Northstar unit and is three miles north of the Prudhoe Bay unit boundary.
Without unitization four of the leases, purchased by BP in state oil and gas lease sale 80 held in 1995, would expire Jan. 31; the fifth lease, purchased by BP in a 1991 sale, would expire July 31.
AVCG, a Kansas-based independent, initially submitted the unit application on June 1 and paid the $5,000 unit fee. The company also submitted the initial proposed plan of exploration.
Upon approval of pending assignments from ExxonMobil and Philips Petroleum Co. to AVCG, BP and AVCG will have 62 percent and 38 percent working interests in the unit, respectively.
The units five leases encompass all or part of a potentially oil bearing reservoir in the Kuparuk River formation. AVCG behind effort John Jay Bo Darrah Jr. of AVCG told PNA in early May, We wanted to drill a well at Gwydyr Bay thats what started all this.
Darrah and Bart Armfield of Kansas are the main principals in AVCG.
The three-year exploration plan calls for drilling two wells.
The first well, Sak River #1, would be drilled in block A on the eastern side of the unit in leases ADL 385198, ADL 377051 and ADL 385202 on or before May 1, 2003. The working interest owners have to notify the state on or before May 1, 2002, whether or not they will permit, drill and complete an exploration well in the Sakonowyak River unit and have tested it by May 1, 2003. If the leaseholders fail to make a decision to drill by that date, the working interest owners will have to pay the state a $15,000 fee and the unit will automatically be terminated and its leases surrendered.
The Sak River #2, in Block B in leases ADL 385199 and 385201, must be drilled and completed by May 1, 2004. This second well can be a side track from the Sak River #1 in Block A or Block B if its bottom hole is a minimum of 1,500 feet from the bottom hole of the first well and is in a different fault block.
The drilling obligation for block B and the Sak River #2 well could be satisfied with a side track from the Sak River #1 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. Lease stipulations The wells will be drilled either directionally from a land location or from on offshore ice pad in Gwydyr Bay. They would be drilled to depths sufficient to penetrate the Kuparuk formation or 8,600 feet TVD.
The following lease stipulations for the four tracts purchased in lease sale 80 involved seasonal drilling restrictions and were standard for all of sale 80s leases: A. Subject to
conditions involving drilling in broken ice
exploratory drilling operations and other downhole operations from bottom-founded drilling structures and natural and gravel islands are allowed year-round in the central subsistence whaling zone. B. Exploratory drilling operations from floating drilling structures subject to
conditions involving drilling in broken ice
exploratory drilling below a predetermined threshold depth and other downhole operations from floating drilling structures is prohibited throughout the Beaufort Sea upon commencement of the fall bowhead whale migration until the whale migration mid-point.
Different stipulations, the state said, may be imposed during the permitting process.
Kuparuk formation production started 1988 The Northstar unit is scheduled to commence production in October from the Ivishak formation.
Production from the Kuparuk River formation began in 1988 at the Point McIntyre field approximately six miles east of the Sakonowyak unit.
Shut-in Kuparuk production has been established at the Gwydyr Bay field a two-well accumulation about three miles southeast of the Sakonowyak unit.
Two wells have been drilled in the Sakonowyak unit: the Cities Service Gwydyr Bay A-1 was completed in 1974 and demonstrated untested shows of oil in the Kuparuk River formation. The other, the Sohio Long Island #1, was drilled in 1984 and proved unproductive.
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