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The Explorers 2018: ConocoPhillips advancing on three exploration fronts
Company planning delineation program at its Willow discovery, plus plans for Putu south of Alpine and Stony Hill near Nuiqsut
Eric Lidji for Petroleum News
North Slope progress was defined for decades by the westward advance of exploration activity. And no company moved west more vigorously than ConocoPhillips Alaska Inc.
Today, the greatest advance of North Slope exploration is geologic, not geographic, as companies are targeting the Nanushuk formation, often on leases near infrastructure.
ConocoPhillips is pursuing that opportunity as well, creating a winter program where the company could drill as many as eight penetrations across three distinct prospects.
The company planned to use Doyon Rig 141 to drill as many as four penetrations at the Willow prospect, the Arctic Fox rig to drill as many as two penetrations at the Stony Hill prospect and the Kuukpik 5 rig to drill as many as two penetrations at the Putu prospect.
The company also commissioned a 3-D seismic survey over approximately 250 square mile of state acreage acquired in a lease sale in December 2016. Before announcing its discovery at the Willow prospect, the company acquired 65 tracts covering 594,972 acres in a federal lease sale and 74 tracts covering 142,280 acres in a nearby state lease sale.
Altogether, the program is the busiest for ConocoPhillips since 2002, in the early years of the current phase of exploration activity in the National Petroleum Reserve-Alaska.
Tinmiaq and West Willow The Willow discovery emerged from ongoing work at the Greater Mooses Tooth unit.
The step-out strategy ConocoPhillips has employed at the Colville River unit also applies to Greater Mooses Tooth, even though the two units are administratively distinct. The idea is to gradually expand existing developments by exploring close to existing infrastructure and by managing new developments against existing processing capacity.
This strategy has divided Greater Mooses Tooth into three potential developments to date. The GMT-1 project is in the east of the unit. The GMT-2 project is central.
ConocoPhillips drilled the Tinmiaq No. 2 and Tinmiaq No. 6 exploration wells in the western end of the unit in early 2016. A test of Tinmiaq No. 2 produced 3,200 barrels per day of light 44 degree API oil over a 12-hour period, according to the company.
In mid-January 2017, ConocoPhillips announced a discovery at the newly named Willow prospect totaling some 300 million barrels of recoverable oil. At issue now is how to develop the massive prospect, either as another Alpine satellite or as a standalone project with independent facilities. A satellite would likely produce no more than 40,000 to 50,000 barrels per day while an independent field could reach 100,000 barrels per day.
One goal of the Willow program this year is to help ConocoPhillips decide which strategy to take. The Alaska Oil and Gas Conservation Commission issued permits on Jan. 4 for ConocoPhillips to drill the Tinmiaq No. 7, Tinmiaq No. 8 and Tinmiaq No. 9 wells and a permit on Jan. 10 for the company to drill the West Willow No. 1 well.
ConocoPhillips completed the 4,035-foot Tinmiaq No. 7 well on Feb. 22, according to the AOGCC. The status of the other wells was unknown as The Explorers went to print.
ConocoPhillips previously expressed its hopes of bringing the three Greater Mooses Tooth developments online within the next five years. The company expects to bring GMT-1 online later this year. GMT-2, if sanctioned, could come online in late 2020. Willow could come online as soon as 2023, barring permitting and regulatory delays.
Putu The Putu program is targeting two prospects south of the Alpine field.
The Putu No. 2 well will “evaluate the reservoir and hydrocarbon potential of the western prospect, provide control for picking core point for the Putu No. 2A well, if needed, and increase the accuracy of the velocity model for depth prediction,” the company wrote in an amended plan of development submitted to the state Division of Oil and Gas in late November. The company would also drill the Putu No. 2A sidetrack to evaluate “the eastern prospect,” although information gained from the first well could prove sufficient.
ConocoPhillips cancelled the Putu No. 1 well last winter after meeting with local leaders in Nuiqsut, according to the company. The company said it “actively engaged the Nuiqsut community ahead of the exploration season to ensure that the Putu drilling project is well understood, and questions from the community are addressed.” The AOGCC issued permits on Jan. 4 for ConocoPhillips to drill Putu No. 2 and No. 2A and had yet to report on the status of either well by the time The Explorers went to print.
Under the terms of an agreement with the Alaska Department of Natural Resources, ConocoPhillips must drill one well this year and a second well by 2020 at the Putu prospect to retain the leases. The agreement resolved a longstanding dispute between the company and the state over the status of the leases south of the Colville River unit.
ConocoPhillips first asked the state to expand the Colville River unit to include acreage to the south in 2002. The state agreed to the expansion but eventually contracted the acreage out of the unit in 2004 after ConocoPhillips failed to meet a drilling commitment.
The company referred to the expansion acreage at the time as the Titania prospect. A joint venture operated by Brooks Range Petroleum Corp. subsequently acquired the acreage through a lease sale and began referring to the leases as the Tofkat prospect.
Brooks Range Petroleum encountered hydrocarbons on the leases in early 2008 with the Tofkat No. 1 well and two sidetracks and later formed the Tofkat unit in October 2011.
The state terminated the unit in late March 2016, after the company missed work commitments. The termination proceedings came as ConocoPhillips was acquiring the acreage and eventually asking the state to incorporate it into the Colville River unit.
The state was hesitant to approve the expansion, first because of the atypical status of the leases and then because of ConocoPhillips’ previous failure to explore the acreage.
The state ultimately agreed to approve the expansion if ConocoPhillips provided an unusually large series of guarantees including a $2.5 million performance bond for an exploration well, a $10 million performance bond to guarantee oil production from the area within the next five years and a $1.5 million “bonus bid replacement payment” to compensate the state for theoretical loses it might incur by not re-leasing the acreage.
The state ultimately agreed to reconsider the ruling, leading to the current deal.
Stony Hill ConocoPhillips announced its exploration programs at Willow and Putu well in advance of the season. The third program, at the Stony Hill prospect, emerged later in the year.
The company planned to drill the Stony Hill well some six miles south of Nuiqsut, almost directly across the Colville River from the Horseshoe well drilled by Armstrong in 2017.
The AOGCC issued permits on Jan. 18 for ConocoPhillips to drill the Stony Hill No. 1 well and Stony Hill No. 1A sidetrack on federal lease AA-00093131 and had yet to report on the status of those wells when The Explorers went to print. ConocoPhillips had previously staked a Stony Hill No. 1 well on AA-081775 in the summer of 2007.
In November 2017, ConocoPhillips executive Matt Fox said the company had identified “a lot” of Willow lookalikes in the Nanushuk and “every one of them we’ve drilled so far has had oil in it, so we’re hopeful that several of these Willow lookalikes will deliver.”
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