The Explorers 2018: Alaska exploration activity hard to gauge in 2018

Companies have shown an eagerness to return to the field but actual work is lagging behind those plans

Petroleum News

To accommodate our production calendar, The Explorers is written during the first few months of the year, which also happens to be the period of heaviest exploration activity in Alaska. This means that we are often summarizing activities as they are occurring.

Some revisions are always inevitable, but they seemed more voluminous this year.

The Explorers uses deceptively simple criteria to determine eligibility.

We try to include every operator that either drilled an exploration well during the two preceding years or has announced plans to drill an exploration well in the coming year.

It was easy to determine who had drilled in 2016 or 2017 but wasn’t planning 2018 work.

ASRC Exploration Inc. drilled the Placer No. 3 well in early 2016 and later certified it as capable of producing in paying quantities. Accumulate Energy Alaska Inc. drilled the Icewine No. 2 well in early 2017 and commissioned a 3-D seismic program over its acreage this year in advance of more drilling in 2019. Ahtna Inc. subsidiary Tolsona Oil and Gas Exploration LLC drilled the Tolsona No. 1 well in mid-2016 and spent the following year embroiled in a regulatory debate over its suspension work. Caelus Energy Alaska LLC drilled the CT-1 and CT-2 wells in early 2016 and announced one of the largest oil discoveries in Alaska history. Hilcorp Alaska LLC expanded its focus on development activities by drilling 16 stratigraphic test wells on the Kenai Peninsula over the latter half of 2017.

But figuring out which companies were planning to explore this year proved to be a bit more difficult. Early on, we counted eight companies that had announced plans of some sort: Alliance, Armstrong, BlueCrest, ConocoPhillips, Doyon, Eni, Furie and Glacier.

We made a decision to cut Alliance from this issue when the company deferred its drilling plans at the Guitar unit to 2019. We look forward to including them next year.

Armstrong Energy LLC deferred a two-well program at the Pikka unit this winter but remained eligible for inclusion in The Explorers because of the Horseshoe No. 1 well it drilled from early 2017. In another twist, Oil Search Ltd. received approval to assume the operatorship of the Pikka program as we were putting the finishing touches on this issue.

BlueCrest Alaska Operating LLC last drilled an exploration well in 2013, with the Cosmopolitan No. 1 well led by Buccaneer. The company only made the cut this year because of its tentative plans to drill the H-16 Exploratory Lateral later in the year.

ConocoPhillips was a shoo-in for inclusion, both for its previous activities in the Greater Mooses Tooth unit and for its busy schedule for this year. The company announced plans to drill as many as eight penetrations at three prospects: Tinmiaq/Willow, Putu and Stony Hill. By the time The Explorers went to print, only one Tinmiaq well had been completed, according to the latest information available from public drilling databases.

Doyon drilled the Toghotthele No. 1 well in the Nenana basin in 2016 and plans to return to the northern end of the basin this summer to drill the Totchaket No. 1 exploration well.

Eni returned to exploration activity in Alaska this winter after a hiatus of more than a decade with the Nikaitchuq North ultra-extended reach well and sidetrack. But there had been no announcement about the status of either as The Explorers went to print.

Furie Operating Alaska LLC has proposed and deferred exploration plans for several years, focusing instead of immediate development needs. As we were putting this issue together, the company said it was evaluating the KLU No. 6 well for this summer.

Glacier Oil & Gas Corp. announced plans for two exploration ventures this year: the Starfish well at the Badami unit on the North Slope and a return to the Sabre well at the West McArthur River unit in Cook Inlet. The Sabre well was originally planned for earlier this year and now scheduled for summer. The Starfish well was planned for this winter, but the company had yet to receive final permits as The Explorers went to print.

What does all this mean?

By the time the year comes to a close, as many as 15 exploration wells and sidetracks could have been drilled in 2018. But right now, we can only conclusively count one.