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Vol. 17, No. 48 Week of November 25, 2012
Providing coverage of Alaska and northern Canada's oil and gas industry

Four to first oil

Brooks Range aims to bring Mustang, 3 other fields, online 2014-16

Kay Cashman

Petroleum News

Brooks Range Petroleum Corp., the operations arm of partners Alaska Venture Capital Group and Nabors subsidiary Ramshorn Investments, is pushing ahead this winter with construction and drilling at its North Slope Mustang discovery, in order to bring the oil field online in the second quarter of 2014. In the South Miluveach unit, Mustang is adjacent to the southwestern corner of the ConocoPhillips-operated Kuparuk River unit and is Brooks Range’s anchor development on the slope.

The small independent is also planning a second well and sidetrack in the upcoming winter exploration season in its Tofkat unit, with the goal of bringing first oil onstream in 2015.

Mustang and Tofkat are both on the western North Slope and are two of four development projects that Brooks Range has in the permitting/conceptual engineering stage, per a Nov. 15 presentation by Jack Laasch, business development manager for the company, at the Alaska Resource Development Council’s 33rd annual conference in Anchorage.

Laasch said Mustang’s schedule was “kind of … aggressive,” but nonetheless, “that’s our line in the sand.”

The other two units are scheduled for first oil production in 2016. They are Beechey Point, adjacent to the Prudhoe Bay and Midnight Sun fields in the central North Slope, and the proposed Badami unit expansion between Badami and Point Thomson on the eastern slope.

Recoverable oil from Mustang is pegged at 44 million barrels of oil from the Kuparuk C sands, along with 37 million barrels from the Appaloosa extension to the northwest, between Mustang and the Placer unit.

Brooks Range estimates Tofkat holds about 40 million barrels of recoverable oil in the Kuparuk C sands and another 20 million in the Jurassic sands, with the Tofkat discovery offsetting the Alpine and Nanuq fields in the ConocoPhillips-operated Colville River unit directly to the north.

Laasch said the Beechey Point unit holds 26 million barrels of oil in the Kuparuk C and the Ivishak sands and the proposed Badami unit extension has 16 million barrels of oil in the Flaxman sands.

Among the “quick facts” about Brooks Range that Laasch noted in his presentation were that its wells “account for 28 percent of the exploration activity on state lands over the last 6 years”; it has some 107,000 onshore acres under lease across the Slope; it tries to get near to infrastructure; to date it has spent $190 million in Alaska; and it has six discovery wells, three of which have been drilled by Brooks Range.

AIDEA discussions ‘pretty far along’

Brooks Range is planning to build a 4.5-mile gravel road and a production facility for Mustang, beginning this winter.

As previously reported, funding will likely come in part from a state-owned corporation.

“We’ve been talking to the Alaska Industrial Development and Export Authority … which has expressed an interest,” Laasch said.

“We’re pretty well far along in discussions with them and we’re excited about their participation.”

AIDEA is currently conducting due diligence to determine whether it should build, own and operate the access road connecting the existing Tarn road to Mustang.

Through its investment, AIDEA would fund more than 80 percent of the $24 million road and possibly a chunk of the $180 million standalone Mustang production facilities.

Starting at KRU 2M pad, up to 38 wells

“Plans are to start this December — whenever we can get onto the tundra,” Laasch said of Mustang.

“We’re going to build an ice road … starting at the 2M gravel pad.

“We’re going to build a four and a half mile ice road over to our (42-acre gravel) mine site,” he said, noting the gravel contract will be awarded “very shortly,” in mid-November, and that “procurement of the long lead items” will also begin “very shortly, in December.”

“We’ll start at the mine site. ... We’ll build the (gravel) road south, back to the (19-acre) production pad. … After construction of the pad we’ll continue … parallel our ice road … building the gravel road with a five-foot thick minimum cover and 32 feet at the surface road back to where we came off the ice pad, just south of 2M pad,” Laasch said.

That construction is scheduled for late winter or early spring 2013.

“We will take the summer months to void gravel, allow it to cure, in preparation for bringing our infrastructure over for the production pad,” he said.

Basically, it’s “a 15,000 barrel of oil a day facility. Initially … 23 wells — 12 producers and 11 injectors … on 30-foot centers. And then future plans are to have up to 38 wells. … on 15-foot centers,” Laasch said.

He pointed out the close proximity of Mustang to the common carrier Alpine Pipeline, 700 feet from Mustang’s proposed three-phase processing facility.

“Once we start producing oil it will be a very short tie-in to get sales quality oil into it,” he said.

“Plans are to fabricate, construct and install, starting first quarter 2014. … We’ll install during the summer; functional checkout; and then if all things go as scheduled, we’ll have first oil in the second quarter of 2014,” Laasch said.

Exploration at Tofkat

Brooks Range’s other area of activity this winter is at Tofkat.

The company’s only hitch has been access to ConocoPhillips’ ice road across the Nechelik Channel of the Colville River.

“Plans are to drill one well and one sidetrack. … It’s about a half mile access road into the pad. We’ll build the ice access road and then an ice pad once the Alpine access road is complete,” Laasch said.

“A significant challenge is getting a rig over there. We’ve been restricted crossing the Nechelik Channel. … The maximum load is a million pounds. Our first rig was over that, so we’re currently negotiating a second rig,” he said.

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