The third well that was to be drilled during northern Alaska’s current winter exploration season appears to have been cancelled or delayed.
Sandy Day, press secretary for the U.S. Bureau of Safety and Environmental Enforcement, or BSEE, told Petroleum New that as of March 8 Eni US Operating Co., operator of the planned Nikaitchuq North 2, or NN-02, well had not filed for a suspension of operations in the federal Beaufort Sea unit:
The “original SOO for Eni was effective for two years starting April 3. 2020. The SOO will expire on April 2, 2022, unless some other action is taken. To date, there have been no conversations with ENI regarding another SOO,” Day said.
He did not explain what he meant by “unless some other action is taken,” but those words do leave some hope for this winter, especially since the Doyon 15 rig, which was upgraded in 2018 for Nikaitchuq North’s extremely long extended reach wells, is currently drilling a Nikaitchuq state unit well from the Spy Island Drillsite, or SID, from which NN-02 was to be drilled.
As long as Eni has the drill bit turning in NN-02 by April 2, the federal lease is automatically extended until drilling operations are complete, even if drilling is suspended days after it is spud. (Total drilling time is expected to take 70-80 days.)
The company can negotiate with BSEE’s sister agency in Interior, the U.S. Bureau of Ocean Energy Management, or BOEM, to extend the lease(s). That could be the “other action” Day was referring to.
That said, drilling restrictions designed for environmental protection allow Eni only to drill during frozen ice conditions and during the open water season between July 15 and Sept. 15; but the company will only be able to drill lateral wells during frozen ice conditions.
Eni remains mum
Spy Island Drillsite is a man-made gravel island in the shallow state waters off Oliktok Point where the Nikaitchuq unit’s onshore production and processing facilities are located.
The Nikaitchuq North prospect is in the 13-lease Harrison Bay Block 6423 federal unit. Those leases lie directly north, northeast and northwest of the Nikaitchuq state unit (see map in the print and pdf versions of this issue of PN).
While winter exploration operations for 88 Energy’s Merlin 2 well and Pantheon Resources Theta West 1 well are moving right along, there is no word yet from Eni on its plans for NN-02.
In the company’s 14th plan of development for the Nikaitchuq state unit, which runs from Oct. 1 through Sept. 30, 2022, operator Eni told Alaska’s Division of Oil and Gas that facility upgrades would be completed to support a second Nikaitchuq North extended reach exploration well in second quarter 2022. But the company does not have to report its progress to the division.
Partner backs out
In its approval of the first two-year SOO, BSEE said the request submitted by Eni on March 10, 2020, was for “reasons beyond the control of Eni.”
Eni would have been prevented from spudding NN-02 prior to the expiration of the bottomhole federal lease on April 13, 2020, because Eni’s 50% non-operating partner elected to reverse its approval and go non-consent for the well, which meant that Eni’s partner Shell would not have paid its share of the costs of drilling and testing the well.
The other reason Eni listed for requesting the two-year extension in 2020 was “unforeseen weather and transportation contingencies.”
Spare processing capacity
One of the reasons Eni gave for stepping out north of the Nikaitchuq unit to test the Nikaitchuq North prospect was it wanted new oil to take advantage of significant spare capacity in the standalone Nikaitchuq unit production facility, which can handle 40,000 barrels per day and could easily be expanded to 50,000 bpd, according to Eni.
January 2022 production from the Nikaitchuq unit averaged 16,811 barrels per day.
Geological target
BOEM said Eni’s NN-02 well will be “targeting the same seismic anomaly” as the first well, NN-01.
Like the first ultra-extended reach well, NN-02 will be an S-shape wellbore into the target reservoir.
In the public portion of the paperwork Eni filed with the state and feds, geological information about the Nikaitchuq North target reservoir was not released.
However, Eni left hints elsewhere, specifically in its oil discharge prevention and contingency plan application that appeared to be based on tapping the Jurassic Alpine sands, which would certainly qualify as an anomaly in the area.
Whatever the case, the 25,957 barrels per day in the contingency plan application could not be referring to the heavy Schrader Bluff oil produced from the Nikaitchuq unit that is known to extend a long way north because that oil can’t flow unassisted.
Also, the measured depth and angle of the well suggest one of the Jurassic sands.
A previous Nikaitchuq unit operator, Kerr-McGee and partner Armstrong, talked about the possibility of testing the Jurassic Nuiqsut sandstone and the Triassic Sag River sandstone to the north.
NN-01 drilling history
Spudding of NN-01 took place in late December 2017, with the original plan to complete the extended reach well in mid-February 2018, potentially conducting flow testing between mid-February and mid-March.
The plan also envisaged the potential drilling of a sidetrack to the main well.
Eni’s plan also included the drilling of a second extended reach well, NN-02, depending on the results from the first well.
According to the plan, NN-01 was to have a vertical depth of 8,131 feet and a measured depth of 34,150 feet, although company officials soon began to talk in terms of 35,000 feet measured depth:
Although the drilling of NN-01 did progress, at some point the drilling was halted because of what Eni characterized as “unforeseen impacts to the drilling schedule.”
The anticipated completion of the well was deferred to the summer of 2018.
Drilling did get underway that summer but was suspended Aug. 23, 2018, due to impending seasonal drilling restrictions.
Whitney Grande, then-Eni US vice president, environment and quality, said Nov. 15, 2018, that Eni was making modifications to the Doyon Rig 15 to enable the rig to conduct the exceptionally long extended reach wells from Spy Island.
The new plan was to restart drilling NN-01 between early January and mid-February 2019.
Drilling was restarted in January 2019 but was suspended in April at a measured depth of 30,010 feet, shy of its 35,000-foot target because of operational limitations, Eni said.
Eni anticipated continuing the drilling of the well in early February 2020, but instead announced it would not finish drilling NN-01 or sidetrack it; rather it would try again in early 2020 with a new well, NN-02.
And then, Eni’s partner elected not to participate in the well, so Eni requested its two-year SOO, which takes us to today.
