The annual winter exploratory drilling season will open soon on Alaska's North Slope with Arco Alaska Inc. and BP Exploration (Alaska) Inc. once again the main players.
The search will be played out against a backdrop of sharply declining production. During the first eight months of this year, production dropped 12.9%, or by an amount substantially greater than the daily production of the Lower 48's largest field.
WILDCAT OFF ANWR
The wildcat that could play for the largest stakes is a directional 9,000 ft vertical hole Arco plans to drill as operator for itself and Phillips Petroleum Co. to test the Warthog prospect on state leases in Camden Bay. The well will be drilled from a manmade ice island two miles offshore from the Arctic National Wildlife Refuge.
If successful, the well could strengthen the claim that large reserves lie beneath ANWR. If a duster, Warthog could weaken the case for opening ANWR.
The ice island will be grounded in 12 ft of water about 35 miles west of Kaktovik and 80 miles east of Deadhorse in Prudhoe Bay field. Arco's plans call for an ice road from Point Thomson to access the drill site, plus an ice airstrip.
A C-130 Hercules aircraft will transport drilling equipment to the ice airstrip, from where the rig will be trucked to the ice island. The timetable calls for mobilization of construction equipment to begin early in December with completion of the ice island by Feb. 1 and the rig ready to spud by mid-February.
Depending on what the well finds and time left before operations cease by Apr. 1, Arco may drill a sidetrack from the original hole to further evaluate the prospect.
OTHER WILDCATTING
Arco also plans to drill at least two exploratory wells and maybe as many as five this winter to further evaluate the Colville River Delta west of Kuparuk River field. Drill sites for the Neve, Bergschrund, Nanuk, Alpine, and Temptation wells lie within a 4 mile radius of the 1 Alpine, which Arco drilled last winter and plans to production test this winter. The company took the wildcat to 7,500 ft in the original hole and drilled two sidetracks.
Wells proposed for this winter lie no farther than 35 miles from the 2M pad in the Kuparuk River Unit, from which well sites will be accessed by an ice road.
Results of wells drilled this winter are expected to spur a final decision by Arco and its partners, Union Texas Petroleum and Anadarko Petroleum Corp., on whether to develop the Colville prospect. The outlook looks promising inasmuch as the companies already have begun studies and initiated work on engineering design and permitting aimed at developing the field.
BP Exploration plans to drill an offshore well to further define the northern portion of Milne Point field. The well will be drilled from an ice pad on Pingok Island. A 4- to 5-mile ice road will access the island drill site across sea ice from the onshore Milne Point road system.
The timetable calls for construction of the ice road and pad in mid-December with mobilization of a rig in late January to spud the North Milne test well in February, with completion of the operation in April.
BP Exploration also applied for permits to drill two wells to further evaluate the Badami prospect 35 miles east of Prudhoe Bay field. With estimated reserves of 100 million bbl of oil, Badami by North Slope standards is a marginal field, depending on significant cost cuts to make development commercial.
SLOPE PRODUCTION FALLING
Meanwhile, the North Slope decline continues. In August, production totaled 1.387 million b/d, compared with 1.592 million b/d at the beginning of the year, a drop of about 205,000 b/d. This drop is 25% more than the daily production of 163,900 b/d of California's Midway-Sunset field, the top producing field in the Lower 48 states.
In August, here is how North Slope fields fared compared with production at the start of the year: Prudhoe Bay 858,229 b/d down from 1,016,144 b/d, Kuparuk River 283,013 b/d down from 317,595 b/d, Point Mcintyre 137,325 b/d up from 134,078 b/d, Endicott 84,447 b/d down from 103,102 b/d, and Milne Point 24,241 b/d up from 21,418 b/d.
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