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‘Tis the season for drilling Forecast for North Slope exploration drilling up slightly from last year Kay Cashman Petroleum News Publisher & Managing Editor
The forecast for oil exploration drilling on Alaska’s North Slope is slightly rosier than this time last year when Petroleum News predicted eight wells for the winter drilling season, six of which were actually drilled during the winter and one, the Winstar well, was spud closer to spring. Five of those seven wells were wildcat exploration wells; the rest were outpost wells or “develop-cats,” as Unocal refers to them — wells that are close to development, but like wildcats, often have huge upside potential and generally require their own ice roads and pads.
This year, based on pre-permitting discussions between government agencies and oil companies, it looks as though six outpost wells and as many as seven wildcats will be drilled on Alaska’s North Slope for a high end total of 13 oil exploration wells.
One company, Anadarko Petroleum, has not yet said whether it will drill any new North Slope wells this year. The company’s spokesman in Alaska, Mark Hanley, told Petroleum News recently that Anadarko plans to finish the gas hydrate well it drilled last winter, but has not yet finalized drilling plans other than its commitments with operator ConocoPhillips, its partner in the National Petroleum Reserve-Alaska and nearby Colville unit.
The agreement between Arctic Slope Regional Corp. and BP for unit and near-unit exploration and development could also produce an outpost well for this coming drilling season, something ASRC executive Conrad Bagne said last month was a “very desirable” possibility, but a “challenge” given the timeframes involved with permitting exploration activities.
EnCana has said it does not intend to drill on the North Slope this winter, but the company is still acquiring property in Alaska. In May, the Calgary-based independent was the only bidder in the state’s North Slope Foothills areawide lease sale, picking up a 5,760-acre tract adjacent to a large Anadarko-EnCana lease block west of Anadarko’s Dolly Varden prospect. (See last week’s story titled, Anadarko in Alaska: The good, the bad, the unknown.)
Exploration well tally to date Here’s the North Slope exploration well tally to date for the winter drilling season of 2003-2004:
• Armstrong Alaska: 1-3 wildcats, Northwest Milne prospect (see page 1 story)
• ConocoPhillips: 2-3 wildcats, National Petroleum Reserve-Alaska
• Total: 1 wildcat, NPR-A
• ConocoPhillips: 5 outpost wells, Kuparuk, and 1 at Titania, Colville expansion area
ConocoPhillips recently staked two more well locations in NPR-A: Scout No. 1 (lease AA081857, location SW¼NW? Sec. 20 T. 11N, R. 1E., UM) and Kokoda No. 3 (lease AA084130, location SW¼NW? Sec. 33, T. 11N., R. 5W., UM).
ConocoPhillips had tentatively planned a second well at Oberon, an expansion area of the Colville unit, but poor results from the first Oberon test well drilled last year led to its canceling plans for a second well, Alaska Division of Oil and Gas Director Mark Myers told Petroleum News. Murkowski impact just beginning Part of the reason for the increase in drilling activity is attributed to higher oil prices; part to last year’s election of Republican Gov. Frank Murkowski; part to an array of pro-oil and gas bills designed to increase economic activity that passed the Alaska Legislature last spring; part to the Bush administration’s policy of encouraging development; and part to geologic success in recent North Slope drilling inside of existing units and in frontier areas such as Northwest Kuparuk and NPR-A.
Most of the company and state officials Petroleum News interviewed think the positive impacts from the Murkowski administration and a Republican-led Legislature have barely begun.
Hanley said Anadarko was already far into the planning process for exploration worldwide by the time many of the pro-industry bills in Alaska were signed into law: “I think the legislation passed this year will have its first major impact next year, for the 2004-2005 drilling season and beyond.”
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