Explorers 2023: Bullish on Bear

ConocoPhillips returns to North Slope exploration after two-year pandemic pause

Eric Lidji

for Petroleum News

ConocoPhillips Alaska Inc. returned to exploration activities this winter after a two-year pandemic-induced lull. But the company did not exactly pick up where it had left off.

When the pandemic arrived, the local subsidiary of the multinational upstream company was planning an expansion of its North Slope exploration activities - activities that have made the company the prolific and consistent North Slope explorer of the 21st century.

The company was continuing its decades-long westward push but was also pursuing new exploration opportunities to the south of its Colville River unit and Alpine oil field.

The pandemic halted that expansion, and those projects are not part of the current plans.

ConocoPhillips planned to drill the Bear No. 1 exploration well this winter in the area south of Nuiqsut, following leads identified in a seismic program from several years ago.

In late February, the company spud Bear No. 1 from state lease ADL 393519. The lease is neither contained within any existing unit nor adjacent to any ConocoPhillips unit.

The project included a 500-foot by 500-foot ice pad at Kuparuk River unit drill site 2P, a 30-mile snow trail from 2P to the drill site, and a 700-foot by 700-foot ice pad at Bear No. 1. The company planned to build a temporary ice airstrip on frozen lake MC7908.

A project timeline proposed construction activities through the end of February, drilling activities from late February through early April, followed by demobilization. ConocoPhillips is proposing to use the Doyon Arctic Fox rig for the exploration project.

The Alaska Oil and Gas Conservation Commission issued a final permit for Bear No. 1 in early February 2023. In mid-March 2023, ConocoPhillips spokeswoman Rebecca Boys told Petroleum News, "I am told by the team that Bear is progressing as planned."

ConocoPhillips commissioned a seismic survey over the proposed Bear exploration area in 2017 and 2018. The company is expected to propose additional exploration wells in the future, based on the results of the current one-well program planned for this winter.

ConocoPhillips Alaska President Erec Isaacson previously described Bear 1 well as a Brookian topset play. Reflecting on that, veteran Alaska oilman Bill Armstrong told Petroleum News, - A Brookian topset is exactly what we drilled at Pikka, Horseshoe, Stirrup, Mitquq and- (ConocoPhillips) drilled at Willow. (ConocoPhillips) knows what they are doing. I give the Bear well a high chance of success based on what we know."

Bear No. 1 is likely geologically associated with Oil Search's Stirrup discovery from 2020. The Bear exploration project sits among a swath of Oil Search (Alaska) leases. As currently envisioned, Bear No. 1 would be some 12 miles south of the Stirrup No. 1 well.

Stirrup No. 1 penetrated the Nanushuk reservoir and encountered 75 net feet of pay. The well flowed at a stabilized rate of 3,520 barrels of oil per day, one of the highest flow rates of any Nanushuk single-stage stimulation of a vertical well on the North Slope.

Bear No. 1 is also some 11 miles south southwest of the Horseshoe discovery.

Armstrong Oil and Gas drilled the Horseshoe 1 and 1A wells during the winter of 2016 and 2017. The wells confirmed the Nanushuk play in the Pikka-Horseshoe area as one of the largest onshore conventional hydrocarbon discoveries in the United States in 30 years.

Return to exploration

The company was expanding its exploration activities in the region when the pandemic halted activities. Even when restrictions eased, the company suspended some drilling activity, pending the results of a ballot initiative to increase state oil production taxes.

After the ballot measure was defeated, ConocoPhillips resumed some development activities at the Kuparuk River, Colville River and Greater Mooses Tooth units but made no exploration plans. In late 2021, the company received an AOGCC permit for an exploratory well at drill site 3S at the Kuparuk River unit, part of a broader infrastructure-led exploration strategy. The company completed the well before the end of the year and received permits in late 2022 for three follow-up exploratory wells at drill site 3S.

As of the end of January 2023, those three wells remained uncompleted.

Coming into the pandemic shutdown of spring 2020, ConocoPhillips had eight AOGCC drilling permits approved for upcoming exploration wells: two West Willow wells, three Tinmiaq wells, and three Harpoon wells. All were associated with the Willow prospect.

The relatively large exploration program represented the culmination of nearly five years of sustained activities to prove up possibilities west of the Greater Mooses Tooth unit.

The current Greater Mooses Tooth developments largely originated with Phillips Alaska Inc.'s announcement of National Petroleum Reserve-Alaska discoveries in May 2001.

Those prospects became the center of the Greater Mooses Tooth unit and accommodated exploration to the south and the east. Willow pushed exploration activities to the west, becoming part of the Bear Tooth unit immediately adjacent to Greater Mooses Tooth.

After staking its first Tinmiaq wells in late 2015, ConocoPhillips completed a two-well exploration program in early 2016. Toward the end of that year, the company expanded its leasehold in the region by acquiring 737,252 acres through federal and state sales. In early 2017, the company announced a major discovery in the Nanushuk formation.

Willow was initially estimated to contain some 300 million barrels of recoverable oil and to have the potential to produce as much as 100,000 barrels per day at its peak. In subsequent documents, the company increased the resource estimate to 600 million barrels of recoverable oil and the peak production estimate to 180,000 barrels per day.

A four-well program in 2018 and a five-well program in 2019 helped delineate the Willow prospect. The company planned a six-well program in 2020 but only completed the Tinmiaq No. 18 and Tinmiaq No. 20 wells before coronavirus restrictions interceded.

Following a two-year halt to exploration, ConocoPhillips is proceeding with construction activities based on its existing data, rather than returning to complete those halted wells.

Following legal, regulatory and political disputes, Willow advanced in mid-March 2023 when the Biden administration issued a record of decision for the project. The decision denied two of the five drill sites proposed by ConocoPhillips Alaska and dropped the option to consider future development of one of the dropped drill sites. ConocoPhillips relinquished leases on some 68,000 acres in the National Petroleum Reserve-Alaska north and south of Bear Tooth - about a third of its area leasehold.

With favorable rulings, preliminary construction could begin as soon as the winter of 2023-2024, and first oil could come as early as 2029, according to project timelines.

Harpoon

The company had identified 10 locations for a seven-well program and also planned to complete four "rank exploration" wells at Harpoon during the drilling season in 2020.

The Harpoon well locations were about 20 miles southwest of the Bear Tooth unit.

The company completed the Harpoon No. 2 well that winter but was forced to cancel plans for the three remaining wells - Harpoon No. 1, Harpoon No. 3 and Harpoon No. 4.

Harpoon No. 2 proved to be a dry hole, but the company remained optimistic.

ConocoPhillips Executive Vice President of Exploration and Production Matt Fox later described a "Harpoon Complex" containing Harpoon, Lower Harpoon and West Harpoon. He said that the company remained interested in the opportunity. As of early 2023, the company had not yet announced any plans to return to the Harpoon prospect.

In the fall of 2022, North Slope Energy LLC executive Bill Armstrong announced the multiyear West Castle exploration program on leases immediately west of Harpoon in the National Petroleum Reserve-Alaska. Armstrong described the prospect as "a perfect look-alike to Willow and Pikka," meaning a reservoir in the Nanushuk formation.

Harpoon has also been discussed in conjunction with other prospects in the region, such as the nearby Harrier prospect being promoted by XCD Energy Ltd. in early 2020.

Narwhal

One intriguing aspect of the curtailed 2020 program was activity extending in multiple directions. In recent years, and especially with the move away from offshore exploration, the company had been increasingly focused to the west: the Kuparuk River unit, leading to the Colville River unit, leading to Alpine satellites, leading to the Greater Mooses Tooth Unit in the National Petroleum Reserve-Alaska, leading to the Bear Tooth unit.

This was part of ConocoPhillips' larger infrastructure-led exploration strategy that favored nearby, lower-risk opportunities over the expensive wildcats of previous decades.

The push to the south was also part of that infrastructure-led exploration strategy.

Through a series of acquisitions, followed by negotiations with the state, ConocoPhillips returned to an old prospect located at the southeast corner of the Colville River unit.

The Narwhal participating area is the current name of the prospect. ConocoPhillips called the prospect Titania in the early 2000s and Brooks Range Petroleum Corp. called it Tofkat in the mid-2000s. ConocoPhillips called the prospect Putu in the late 2010s and later announced a 100 million to 350 million barrel Nanushuk discovery at Narwhal.

ConocoPhillips initially developed the Narwhal prospect from the existing CD4 pad at the Colville River unit, bringing the participating area online in early 2022.

Longer-term development plans include a new drilling pad, called CD8. The current timeline calls for sustained production by 2028 with a peak of 32,000 barrels per day.

Through several decisions in early 2022, the state Division of Oil and Gas approved the Narwhal Phase II geophysical exploration program proposed by SAExploration. The permit allowed the company to conduct a land-based seismic survey on 85 square miles of state lands and waters within the Colville Delta region around the village of Nuiqsut.

The Putu exploration program of 2018 also included exploration of the nearby Stony Hill prospect in the NPR-A, south of the village of Nuiqsut. The company conducted a two-hole program - one well and one sidetrack - on federal lease AA-00093131. The program encountered oil in two zones. But the prospect required additional appraisal and ultimately lost out to Putu/Narwhal, which was closer to existing infrastructure.

ConocoPhillips described Stony Hill as a prospect similar to Willow and estimated that it contained at least 300 million barrels of recoverable oil in the Nanushuk formation. In November 2017, ConocoPhillips executive Matt Fox said the company had identified "a lot" of Willow lookalikes in the Nanushuk and "every one of them we've drilled so far has had oil in it, so we- re hopeful that several of these Willow lookalikes will deliver."

Nuna

ConocoPhillips acquired the Nuna prospect from Caelus Natural Resources Alaska LLC in 2019. The prospect was originally associated with the Oooguruk project but could be accessed from existing facilities at Oliktok Point, located within the Kuparuk River unit.

Based on an initial exploration program at Nuna in 2012, Pioneer Natural Resources had estimated ultimate oil recovery between 75 million and 100 million barrels of oil from the Torok formation of the Brookian sequence at Nuna. Caelus Natural Resources later estimated that Nuna could produce 25,000 barrels of oil per day over 20-30 years. It sanctioned a $1.4 billion development in 2015, underpinned by royalty modification from the state. But the company postponed the project over economic concerns and ultimately sold the Oooguruk unit to minority partner Eni and the Nuna satellite to ConocoPhillips.

In mid-2021, ConocoPhillips announced the Coyote discovery east of Nuna. At the time, ConocoPhillips Alaska President Erec Isaacson said Coyote was in the Brookian topset above the Nuna Torok discovery, describing Coyote as shallow, i.e. a Nanushuk play.

ConocoPhillips initially identified the Coyote prospect after reviewing a 3D seismic survey from 2015. The company drilled a test well from Kuparuk River unit drill site 3S in 2021 and returned with a sidetrack in early May 2022. The appraisal sidetrack was "very successful," according to ConocoPhillips, exceeding company expectations and providing "key data" to help them better understand the Coyote reservoir interval.

ConocoPhillips said it planned to drill a producer and injector pair at Coyote in late 2022 that would enable it "to gather other critical data" to aid future development of Coyote.

In October and December 2022, the company received final Alaska Oil and Gas Conservation Commission permits for two exploration wells and an associated sidetrack from drill site 3S - KRU 3S-701, KRU 3S-701A and KRU 3S-704. The company had yet to complete any of those wells by early February 2023, according to AOGCC records.

Earlier this year, the AOGCC approved a three-year enhanced oil recovery pilot project at Coyote. The project includes a central horizontal producer with at least one and possibly two offsetting horizontal injectors. The drilling would occur at drill site 3S and would target a lease within the Kuparuk River unit and a non-unitized lease ADL 392374.

As part of the application, ConocoPhillips estimated 31 million barrels of oil within the proposed pilot area, with primary recovery at 5-10%, waterflood recovery at 20-30% and an additional 1-5% recovery from potential injection of enriched gas.

ConocoPhillips officials have been including Coyote, Nuna and Northeast West Sak in a slate of Greater Kuparuk Area projects. The company has said that Coyote and Nuna would be developed from Kuparuk River unit drill sites 3S and 3T. Drill site 3T is the new name for the expanded Nuna pad, which Pioneer Natural Resources built to support its Nuna work back in 2012 and 2013, when the project was still an Oooguruk satellite.

ConocoPhillips has yet to announce detailed Nuna plans, but the prospect fits within the company's stated goals. It can be pursued using existing infrastructure, and it sits within a formation where ConocoPhillips has been accumulating information for nearly a decade.

"We continue to progress the project planning and approvals for the development at 3T, a planned future drill site where we plan to locate the Nuna development," the company said last May. "It will be sited on the existing gravel pad within the Nuna acreage we acquired from Caelus. We plan to drill some wells in the same reservoir in the 3S area in Q3 2022 that will provide key learnings to help us further optimize the 3T development plans."

The state approved the drill site 3T expansion project in February 2023.

The project includes expanding the existing drilling pad, a 2.9-mile access road and access road intersection near drill site 3S. Expansions will accommodate a single production module and a larger drilling rig for directional extended reach drilling. The project calls for 29 wells from the expanded 3T pad. The expansion project also includes some 3 miles of new pipelines from drill site 3T to drill site 3S, as well as associated infrastructure.

Construction activities could begin as early as August 2023 and continue through September 2024 with drilling running from October 2024 through December 2027.