In two separate but similar projects, ConocoPhillips Alaska Inc. has sanctioned a new drill site and is permitting an appraisal well at opposite ends of the Kuparuk River unit.
The Houston-based independent recently received partner approval for the Drill Site 2S project in the southwest corner of the North Slope unit and intends to drill the Drill Site 3S-620 Moraine exploration well in the northwest corner of the unit this coming winter.
The $500 million Drill Site 2S project includes a pad, a new gravel road and associated power lines, pipelines and surface facilities. With preliminary gravel work completed earlier this year, ConocoPhillips can build the pad over the winter, start drilling by the middle of next year and bring the pad online by late 2015, according to a company timeline. The drill site is expected to produce some 8,000 barrels per day at its peak.
In addition to operator ConocoPhillips, the Kuparuk River unit owners include BP Exploration (Alaska) Inc., Chevron USA Inc. and ExxonMobil Alaska Production Inc.
To the north, ConocoPhillips wants to drill the DS3S-620 Moraine well to gain "additional reservoir information in this area and narrow uncertainty around reservoir description parameters including oil-water contact, sand quality and thickness, and oil viscosity," according to recent filings with the state Division of Oil and Gas. "This information is critical for any future development of this part of the Kuparuk reservoir."
Drill Site 2S
ARCO discovered an oil accumulation in the Kuparuk reservoir in the southwest corner of the unit in the late 1980s with the KRU 21-10-08 well but never pursued development.
ConocoPhillips appraised the discovery in early 2012 with the Shark Tooth No. 1 well, which the company drilled from an ice pad located some four miles from Drill Site 2K.
At the time, the company told regulators that the well was "critical for any future development of this part of the Kuparuk reservoir" because it would "provide additional reservoir information in this area and narrow uncertainty around reservoir description parameters including oil-water contact, sand quality and thickness, and oil viscosity," language identical to how the company is currently describing the Drill Site 3S well.
Toward the end of 2012, ConocoPhillips said the well had "discovered hydrocarbons in the Kuparuk sands, in accordance with expectations, and confirmed mapped volumes."
The southwest corner of Kuparuk was already home to three drill sites -- 2L, 2M and 2K -- but developing Shark Tooth from any of those facilities would have pushed the limits of existing drilling technology, according to ConocoPhillips. Therefore, the company decided to commission a new drill site, the first at Kuparuk in nearly 12 years.
Drill Site 3S
That last pad was Drill Site 3S, which ConocoPhillips built to support the Palm satellite.
Phillips Alaska Inc. discovered the Palm satellite at the western edge of Kuparuk in 2001.
The Palm No. 1 well encountered 30 feet of oil-saturated Kuparuk sandstone. An un-stimulated test of the associated Palm No. 1A sidetrack flowed at some 2,500 barrels per day. The company estimated recoverable reserves in the range of 35 million barrels.
ConocoPhillips brought the satellite online in November 2003 from Drill Site 3S. The accumulation is in a Kuparuk C4 interval now known to be in communication with the main Kuparuk reservoir. Palm is generally managed as part of the main Kuparuk field.
In the winter of 2012-13, ConocoPhillips conducted a pilot test on DS 3S-19, one of the original development wells drilled at Palm in 2003. The test involved adding a perforation to the well and performing hydraulic fracturing operations to gauge the potential of developing the overlying Cretaceous Brookian Moraine interval. "Any development would, of course, require adequate appraisal and study to prove commerciality," the company told state officials in its 2013 plan of development, a sentiment the company reiterated in its 2014 plan of development this past June.
The current project aims to appraise the commerciality of the Moraine interval.
ConocoPhillips plans to drill the DS3S-620 Moraine well from an ice pad on ADL 025528. The pad would connect back to Drill Site 3S using a 2.5-mile ice road.
The state is taking comments on the plan through Nov. 24.
Both projects resulted from increased seismic activity over the past decade.
The Kuparuk West Sak 3-D seismic survey in 2005 gave ConocoPhillips "a significant number of leads for infill or sidetrack drilling," as the company explained in its 2014 plan of development. ConocoPhillips commissioned a custom built coiled-tubing drilling rig, which has been steadily working through those drilling candidates since May 2009.
ConocoPhillips launched the Western Kuparuk 3-D seismic survey in 2011. The results of the program led to an "infrastructure-led exploration strategy," which focuses on opportunities near existing infrastructure, as opposed to the wildcats ConocoPhillips drilled in the far reaches of the National Petroleum Reserve-Alaska in the early 2000s.
A crowded region
As the westernmost pad in the northern half of the Kuparuk River unit, Drill Site 3S has been an important staging area for other exploration companies exploring to the west.
Pioneer Natural Resources intended to build a gravel road connecting DS-3S to its Nuna development, a scheme that successor Caelus Natural Resources may bring to fruition.
Repsol built an ice road from DS-3S to support exploration activities in early 2012. The company is currently preparing development strategies based upon that exploration work.
DS-3S is just northeast of the ASRC Exploration-operated Placer unit. The exploration arm of Arctic Slope Regional Corp. formed the unit to explore a prospect that was contracted from the Kuparuk River unit. The Placer unit is under administrative appeal.