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Repsol looks at development scenarios Results of initial phase of studies with ASRC and Michael Baker Jr illustrate need for Alaska tax reform, says Bill Hardham Kay Cashman Petroleum News
While moving ahead with its second winter exploration season on Alaska’s North Slope, Repsol E&P USA Inc. has finished the first phase of its development studies for its northern Alaska prospects, Bill Hardham told attendees of the Resource Development Council’s annual conference in Anchorage.
Hardham, Alaska operations manager for Repsol, said Nov. 15 that concurrent with its multi-year drilling effort on the North Slope, the company was “studying development scenarios” for its acreage, which consists of almost 500,000 acres on the “western North Slope, roughly between Kuparuk River and the Alpine field, extending to the south almost to the (Brooks Range) foothills, south of Kuparuk (River unit), and then to the north, across the crown of the Colville River Delta,” where Repsol has “expanded (its) presence in 2011 and 2012 leases sales” since it entered Alaska “in March 2011 in a deal with Armstrong Oil & Gas.”
Initial phase of studies In regard to development studies, Hardham said, Repsol “just completed an initial phase” with ASRC and Michael Baker Jr. Inc.
“In those studies we are focusing on identifying our different development concepts and trying to characterize them the best we can in terms of cost, schedule, risks and the like.”
As a result of those studies, Hardham sees a need for tax breaks from the State of Alaska.
“I must say, as we’ve completed that work, I see the challenges we have more than ever — and the need for production tax reform here because we do have some challenges ahead of us,” Hardham said.
At the same time, “Repsol remains very excited about this project here in Alaska. It’s a key area for the company. And we’re looking forward to a successful program this winter — and hopefully a long-term presence here with long-term relationships.”
Hardham, who moved to Alaska from Texas in August, said Repsol’s Alaska office was up to 15 employees, with an expansion move planned in January, from downtown to the new JL Tower in midtown Anchorage.
Completing last winter’s plan This winter the company plans to essentially complete last winter’s drilling program, drilling from three ice pads in the Colville River Delta area, using Nabors rigs 7ES, 105AC and its sister, 99AC.
In “excess of 300 positions” from Alaska contractors will execute the program, Hardham said. In addition to building the ice pads and 30 miles of ice road, those contractors will also build an ice air strip, from which the company will be flying a charter in and out multiple times per week, with flights originating in Anchorage and making stops in Fairbanks.
Repsol plans to drill at least one vertical well from each of the ice pads on un-unitized leases near its Qugruk unit this winter, but could also drill as many as two sidetracks at each well, company officials told state officials in October.
Repsol was permitting four drilling locations in the fairway between the Oooguruk and Colville River units: Qugruk No. 1, No. 3 and No. 6, and the alternate Q No. 5, but Hardham did not mention the alternative as a possibility on Nov. 15.
Repsol first permitted two of the locations — Q No. 1 and Q No. 3 — in 2011, and a third, Q No. 6, is a new well planned for the location where Repsol began drilling the Q No. 2 well last winter, before a shallow gas kick compromised operations.
Last winter the company completed two wells; one from Q4 offshore and south Kachemach No. 1.
Per state records, Q No. 1 would be on ADL 391460; Q No. 6 on ADL 391456; and Q No. 3 on ADL 391445.
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