BRPC plans eastern North Slope development

Brooks Range joint venture planning Telemark development at proposed Greater Bullen unit west of ANWR, could produce by 2015

Eric Lidji

For Petroleum News

A joint venture led by Brooks Range Petroleum Corp. is proposing an exploration and development program on the eastern North Slope that could yield production by 2015.

The local operating arm of Kansas-based Alaska Venture Capital Group LLC and Brooks Range Development Corp. wants to form the 200,058-acre Greater Bullen unit over 68 State of Alaska leases of the eastern North Slope. The proposed unit would sit just west of the Arctic National Wildlife Refuge, between the Badami and Point Thomson units.

Similar to its strategy for developing the proposed Southern Miluveach unit on the western end of the central North Slope, Brooks Range wants to develop a potential reservoir at Greater Bullen to justify construction of standalone production facilities that would in turn improve the economics of other potential accumulations in the region.

The proposed Telemark Development Project would target a Brookian-age reservoir in the Flaxman sand and potentially use the proposed common carrier Point Thomson Pipeline. The Greater Bullen unit would also be near the existing Badami unit facilities.

The development project is contingent on confirmation of the reservoir by a seismic program and an exploration well, and sanctioning by the working interest owners, Jim Winegarner, vice president of land and external affairs for BRPC, told Petroleum News. The state is taking comments on the proposal through Aug. 4.

The working interest owners for the proposed unit include AVCG, TG World Energy Inc., Ramshorn Investments Inc. and BRDC. Those companies have not conducted as much exploration work in the Greater Bullen area as they have at their other North Slope properties, such as the Beechey Point unit or the proposed Southern Miluveach unit, and most of the $4 million spent to date has been in preparation for a 3-D seismic program.

The joint venture acquired its first leases in the area at a 2003 lease sale, and acquired additional acreage through lease sales and private deals in the years that followed.

Brooks Range is making a business of figuring out how to exploit marginal fields.

In filings for the unit application, the company told the Alaska Department of Natural Resources “the other potential hydrocarbon accumulations are currently believed to be high risk, which then calculates as marginally economic, and would not be developed without existing infrastructure and processing facilities within” the proposed unit, adding that future development would in turn extend the life of Telemark infrastructure.

Under a proposed development plan, Brooks Range must have all its permits in place for the Telemark project by the end of 2013, apply for a Telemark participating area by the end of 2014 and begin production from the development as soon as July 1, 2015.

Concurrently, Brooks Range would also start an exploration program. According to Brooks Range, the proposed unit “encompasses a large number of prospects.” As previously reported in Petroleum News, those include Friezen and Red Dog.

Friezen was the main prospect in the former 79,508-acre Slugger unit that BP formed over 14 leases in the region before it ended its Alaska exploration program in 2001. BP estimated that Slugger contained some 280 million barrels of oil, but never publically estimated the recoverable reserves for the unit. Depending on the source, Red Dog is estimated to contain between 45 million and 85 million (P-50) barrels of recoverable oil.

Under a proposed plan of exploration, Brooks Range would acquire 3-D seismic over the unit — aiming to cover around 300 square miles — by March 31, 2012, or lose the unit.

The company would then kick-off a six-well exploration program, drilling a well by March 31 of 2012, 2013, 2014, 2016, 2018 and 2020 in each of the six blocks of the unit. The initial unit agreement runs through March 31, 2016.

Brooks Range is proposing to break the unit into six blocks — North, North East, North West, South, South East and South West, prioritized: N, SW, S, SE, NE and NW.

The proposed Greater Bullen unit increases the activity on the eastern North Slope.

ExxonMobil is still pursuing its development project at Point Thomson, although ongoing legal and permitting issues continue to be a drag on the venture. ExxonMobil is aiming to produce 10,000 barrels per day of condensate, cycle natural gas and delineate other hydrocarbon resources including oil and natural gas in the coastal area west of ANWR.

Denver-based independent Savant Alaska is working on applying horizontal well technology and possibly advanced hydraulic fracturing techniques at the BP-operated Badami unit to the west of Point Thomson. Savant and its minority partner, ASRC Exploration, joined the project in 2008, drilling two wells and bringing the unit back online in November 2010.

Savant and Donkel Oil & Gas each hold leases on separate prospects in the eastern North Slope — Yukon Gold and Stinson, respectively — that could move forward in the coming years, and Shell wants to drill up to two offshore Beaufort Sea wells in 2012 in the region, and could theoretically expand its operations to other prospects if successful.