The fate of the Nikaitchuq North Beaufort Sea prospect quietly became evident on July 6 when operator Eni US Operating Co. and leaseholder Eni Petroleum US filed the 15th plan of development for the central North Slope’s Nikaitchuq unit, which is on state leases.
According to the POD filed with the state of Alaska’s Division of Oil and Gas, the federal Nikaitchuq North prospect leases, which lie outside the Nikaitchuq unit, have terminated.
Prior to drilling its first Nikaitchuq North exploration well, Eni had acquired ADL 393175 in a state of Alaska Beaufort Sea lease sale in late 2016. Sandwiched between the state unit and the federal unit, it provided “some protection acreage, should there be any future development opportunities involving the Nikaitchuq North Exploration Project,” the company explained in a development plan.
The company’s proposed 15th POD for the Nikaitchuq unit that runs from Oct. 1 to Sept. 30, 2023, contained a brief plan of exploration for Nikaitchuq North.
First well spud
Eni spud the first Nikaitchuq North exploration well, NN-01, in late December 2017 from Spy Island Drillsite into the Harrison Bay Block 6423 OCS unit. The distance between the Spy Island Drillsite, or SID, and the federal unit is approximately 6 miles.
SID is a man-made gravel island in shallow state waters off Oliktok Point where the Nikaitchuq unit’s onshore production and processing facilities are located.
ENI’s plan in 2017 was to drill two ultra-extended reach wells over a two-year period. Drilling restrictions designed to protect the environment allowed Eni to drill vertically only during frozen ice conditions and the open water season (between July 15 and Sept. 15); the lateral portion of a well could only be drilled during frozen ice conditions.
After some stops and restarts due to restricted drilling periods and drilling problems, NN-01 reached a vertical depth of 8,131 feet and a measured depth of 30,010 feet, shy of its 35,000-foot MD target.
The well was officially suspended by Eni because of drilling “complications.”
Shell won’t participate
Eni anticipated continuing the drilling of the NN-01 well in early February 2020, but instead announced it would not finish drilling NN-01 or sidetrack it; rather it would try again in second quarter 2020 with a new well, NN-02.
However, Eni’s 50% working interest partner (Shell) elected to go non-consent, meaning it would not participate and pay its share of the cost of drilling and testing the NN-02 well.
Eni applied for and received from the U.S. Bureau of Safety and Environmental Enforcement a suspension of operations, or SOO, for two years until April 2, 2022.
“Due to Shell’s decision to not participate in the drilling of the NN-02 well, Management decided to allow the SOO to expire in April 2022,” Eni said in its proposed Nikaitchuq unit POD. “As a result of the SOO expiry the Federal Unit (Harrison Bay Block 6423 Unit) and corresponding leases have terminated.”
NN-02 would have had a vertical depth of 8,329 feet and a measured depth of 38,173 feet. Proposed sidetracks would measure about 1,000 feet, Eni said in 2020.
Spare processing capacity
One of the reasons Eni gave for stepping out north of the Nikaitchuq unit to test the Nikaitchuq North prospect was it wanted new oil to take advantage of significant spare capacity in the standalone Nikaitchuq unit production facility, which can handle 40,000 barrels per day and could easily be expanded to 50,000 bpd, according to Eni.
May production from the Nikaitchuq unit averaged 18,574 bpd in May, up 540 bpd, 3%, from an April average of 18,034 and up 7.7% from a May 2021 average of 17,250 bpd.
Geological target
Prior to Eni allowing its federal leases and unit to terminate, the U.S. Bureau of Ocean Energy Management, or BOEM, said Eni’s NN-02 well would be “targeting the same seismic anomaly” as the first well, NN-01.
Like the first ultra-extended reach well, NN-02 was to be an S-shape wellbore into the target reservoir.
In the public portion of the paperwork Eni filed with the state and feds, geological information about the Nikaitchuq North target reservoir was not released.
However, Eni left hints elsewhere, specifically in its oil discharge prevention and contingency plan application that appeared to be based on tapping the Jurassic Alpine sands, which would certainly qualify as an anomaly in the area.
Whatever the case, the 25,957 barrels per day in the contingency plan application could not be referring to the heavy Schrader Bluff oil produced from the Nikaitchuq unit that is known to extend north because that oil can’t flow unassisted.
Also, the measured depth and angle of the well suggest one of the Jurassic sands.
A previous Nikaitchuq unit operator, Kerr-McGee and partner Armstrong, talked about the possibility of testing the Jurassic Nuiqsut sandstone and the Triassic Sag River sandstone to the north.
