Pioneer gives Alaska top billing

NW Kuparuk’s geologic age, permeability and porosity similar to Alpine

Kristen Nelson

Petroleum News Editor-in-Chief

Alaska is number one on Pioneer Natural Resources' “pipeline of opportunities” list for 2004-2006, the company told analysts April 29.

Alaska made the list because preliminary well results from the independent’s Northwest Kuparuk prospect off Alaska's North Slope show oil-bearing Jurassic-aged sands very similar in geologic age, permeability and porosity to those in the prolific, onshore Alpine field to the southwest.

In the area from north of the Kuparuk River unit, including Northwest Kuparuk in Harrison Bay, going south and west through the Alpine field and into the National Petroleum Reserve-Alaska there are a series of three upper Jurassic-aged sandstones that are known to contain what Alaska Division of Oil and Gas Director Mark Myers refers to as “staggering amounts of oil.”

Pioneer drilled three exploration wells at Northwest Kuparuk this winter, saying March 31 that it had encountered two thick, oil-bearing, Jurassic-aged sand sections.

In late March, Myers did not know which Jurassic sands Pioneer had encountered, but said the issue would be finding reservoir quality, not finding oil. If the sands were similar in age, permeability and porosity to those at the Alpine field, he said, that would be “good news” because other upper Jurassic sands could be more difficult to produce.

At the April 29 meeting with analysts, in which Pioneer officials talked about first-quarter results (see related story in this issue’s Finance & Economy section), company Chairman and CEO Scott Sheffield said the Jurassic formation tested at the Northwest Kuparuk prospect was very similar in geologic age to the Alpine field and had “very similar permeability and porosities” to Alpine.

Sheffield also said the well test looked good; that he was “encouraged by the early evaluation work we've done to establish commerciality” at Northwest Kuparuk.

Pioneer, which elected to test just one of the three wells because the wells were similar, will be releasing results in three or four weeks, he said.

Opportunity for growth

Of nine projects listed, Sheffield said a lot of the potential is in the 2005-2006 timeframe, although “some of these will come on in 2004.”

Pioneer has applied to the state of Alaska to establish the Oooguruk unit covering its Northwest Kuparuk prospect and in that application the company said its plan of exploration “incorporates current engineering work under way to meet a possible winter 2004/2005 fast-track production start-up.” (See story in April 13 edition of Petroleum News.)

“What's positive here is the fact that we are only six miles away from unused capacity at Kuparuk,” Sheffield said, referring to the ConocoPhillips Alaska-operated Kuparuk River unit.

The Kuparuk field is the second largest oil field in North America behind the North Slope’s Prudhoe Bay field. It is produced largely from the Kuparuk C sands, which had been Pioneer’s number one target at Northwest Kuparuk. The company said March 31 that although it had found Kuparuk C sands filled with oil, those sands “were too thin to be considered commercial.”

Depths also reported

The wells were drilled from ice islands in shallow water northwest of the Kuparuk River unit.

Pioneer has a 70 percent working interest in the Northwest Kuparuk prospect and is the operator. Armstrong Resources, which assembled the acreage, holds the remaining 30 percent.