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This month in history: Happy New Year, Alaska
20 years ago this month: Armstrong brings new player, independent Kerr-McGee, to North Slope, for Northwest Milne prospect
Kay Cashman Petroleum News
Editor's note: This story first appeared in the Jan. 11, 2004, issue of Petroleum News.
Alaska Gov. Frank Murkowski has made bringing new players to the oil rich North Slope a priority for his administration. Last year, Bill Armstrong brought Pioneer Natural Resources to the Slope as operator and majority owner of Armstrong Alaska's Northwest Kuparuk prospect. On Jan. 8, 2004, Armstrong snagged big independent Kerr-McGee Oil & Gas as operator and majority partner in its Northwest Milne prospect northwest of Prudhoe Bay where Armstrong has said it would drill one to three wildcats this winter.
Oklahoma-based Kerr-McGee Oil & Gas said it has signed a deal with Armstrong to acquire a 70% working interest in the 12,000 acre Northwest Milne prospect, which is located in shallow waters offshore BP's Milne Point unit some 3 miles north of Oliktok Point. The agreement includes the right to acquire interest in 13 additional leases in the area, totaling 54,000 acres.
"The governor wants more players on the North Slope. Opportunities are opening up in Alaska. The state has been great to work with. It's good to be able to bring a company to the Slope that hasn't been there before. Kerr-McGee is the kind of company we need up there. They are big enough to operate on the North Slope and they're great operators," Bill Armstrong, president of Armstrong Alaska and its affiliate, Denver-based Armstrong Oil & Gas and Armstrong Resources, told Petroleum News Jan. 8, 2004.
Gustafson has POA, Stockinger not new to Slope Armstrong and Kerr-McGee are in the process of getting Northwest Milne drilling and operational permits transferred to Kerr-McGee.
Alaska Interstate Construction has already begun ice road construction to the prospect.
To ensure a smooth transition between the two operators, Kerr-McGee has given Armstrong Vice President Stu Gustafson power of attorney to direct this winter's exploration operations at Northwest Milne, Michael Stockinger told Petroleum News Jan. 8. Stockinger, vice president of drilling for Kerr-McGee, worked as drilling manager for Conoco in 1991 at the Milne Point unit on Alaska's North Slope.
Kerr-McGee office in ASRC building Kerr-McGee has set up an Alaska office in suite 702 of Arctic Slope Regional Corp.'s office building at 3900 C Street in Anchorage. Two Kerr-McGee employees will be working rotation shifts from that office -- Charles Summers and Todd Durkee.
In its press release Kerr-McGee said it would drill at least one well during the first quarter. Stockinger said the exploration plan with the state "requires one well but we can farm into additional acreage to drill additional wells. We'll likely sit two wells this winter unless we're totally disappointed with the results from the first well. There is a possibility of drilling three but it's fairly unlikely because of our start up time."
Drilling from Spy Island The wells will be drilled by Nabors Alaska Drilling Rig 27E from ice pads at two locations on Spy Island -- one near the middle of the island and the other at the east end of the island.
Gustafson said in August that the proposed wells -- Nikaitchuq No. 1, No. 2 and No. 3 -- "will target multiple objectives. One of the primary objectives is an attempt to extend the favorable productive Jurassic sand fairway," which tested commercial at Pioneer and Armstrong's Northwest Kuparuk prospect in the North Slope's Oooguruk unit.
ASRC Energy Services is project manager ASRC Energy Services is the engineering support operations service company that will oversee drilling at Northwest Milne for Kerr-McGee. Skip Coyner, the ASRC drilling superintendent who oversaw Pioneer's exploration program at Oooguruk last winter, is the project manager, Gustafson said.
Alaska Chadux was selected as the spill response contractor.
The initial Northwest Milne acreage was acquired by Armstrong from BP earlier this year. Armstrong has also picked up other leases in the area from "other entities and lease sales," Armstrong's vice president of land, Ed Kerr, told Petroleum News Jan. 8.
Kerr-McGee Oil & Gas is an upstream affiliate of Oklahoma City-based Kerr-McGee Corp., an energy and inorganic chemical company with global operations and assets in the neighborhood of $10 billion.
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