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Vol. 22, No. 21 Week of May 21, 2017
Providing coverage of Alaska and northern Canada's oil and gas industry

1Q drilling down

North Slope development drilling down sharply in first quarter of 2017

Eric Lidji

For Petroleum News

North Slope development drilling dropped sharply in the first quarter from a year earlier, driven largely by the steep reduction in activities at the Prudhoe Bay unit as well as the continued suspension of development activities at the Oooguruk and Nikaitchuq units.

BP, ConocoPhillips and Hilcorp, the three most active of the seven producer-operators on the North Slope, drilled 28 development wells in the first three months of the year. Those figures represent the lowest first quarter development drilling totals for the North Slope in at least five years - down from 47 in 2016, 46 in 2015, 36 in 2014 and 32 in 2013.

The figures only include wells labeled “development” in weekly well reports published by the Alaska Oil and Gas Conservation Commission. Some exploration wells are later converted to development wells. Some development wells are reported at a delay after completion. As a result, revised totals could be higher but are unlikely to be lower.

Prudhoe Bay

BP Exploration Alaska Inc. drilled just three development wells at Prudhoe Bay in the first quarter, the lowest first quarter activity in at least a decade and probably longer.

By comparison, BP drilled 18 development wells in the first quarter of 2016, 18 in the first quarter of 2015, nine in the first quarter of 2014 and 17 in the first quarter of 2013.

The sharp reduction is not a total surprise, given that the company had previously announced plans to significantly reduce drilling at the largest oil field in the state.

Through various efficiencies, BP was able to maintain relatively steady production at Prudhoe Bay in 2016, despite fewer new wells. In a recent plan of development for the Initial participating Areas - the largest producing segment at the unit - the company said it expected to again reducing drilling rates this year without a major hit to production.

Kuparuk and Colville

ConocoPhillips Alaska Inc. also reduced drilling activities at the Kuparuk River unit. But those losses were mostly offset by an increase in drilling work at the Colville River unit.

The company drilled 14 development wells at Kuparuk during the first quarter of this year, down from 20 development wells in both 2016 and 2015 but up from the 10 development wells the company drilled during the first quarters of both 2014 and 2013.

A widespread campaign of multilateral drilling continues to be a major component of the development program at the Kuparuk River unit. In the first quarter, ConocoPhillips drilled a sidetrack and associated lateral at 1H, a dual lateral well at 2T, a trilateral well at 3H and a quad-lateral well at 3M, plus two single wells at 2M and a single well at 3R.

The company also drilled nine development wells at the Colville River unit during the first quarter, up from four in 2016, two in 2015, one in 2014 and two in 2013. The sharp increase reflects the impact of the initial development program at the new CD-5 pad.

Milne Point

Hilcorp Alaska LLC slightly reduced drilling activity at the Milne Point unit, although the results are largely a quirk of the calendar. The company drilled two development wells at the unit in the first quarter but completed two more in the first week of April.

By comparison, the company drilled three development wells at Milne Point in the first quarter of 2016 and none in the first quarter of 2015, shortly after taking over control of the unit. The previous unit operator BP drilled 12 in the first quarter of 2014 as it completed an atypically large development at F pad, and none in the first quarter of 2013.

Hilcorp is in the early stages of redeveloping the Milne Point unit and recently announced a major drilling program for the remainder of this year. The company also plans to begin drilling activities at the Duck Island unit, which has not had any new drilling since 2009.

Oooguruk and Nikaitchuq

The first three months of the year saw no new development drilling at either the Oooguruk unit or the Nikaitchuq unit, which have both been suspended for nearly a year.

Eni recently announced plans to resume development activities at the Nikaitchuq unit this year, although the lack of first quarter activities falls short of company timelines.

Caelus has announced no timetable for resuming drilling at Oooguruk.

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