Texas firm's exploratory wells yield mixed results

Wells drilled near Kuparuk 'too thin' for commercial use

Posted: Wednesday, April 02, 2003

ANCHORAGE - The first round of exploratory drilling on the North Slope by a Dallas-based oil company has yielded mixed results.

Pioneer Natural Resources Co. said Monday all three wells it drilled in shallow water northwest of the Kuparuk oil field struck sandstone filled with oil but the sands were "too thin to be considered commercial."

But the company found Jurassic rocks, which are deeper and older, and one well flowed at a sustained rate of 1,300 barrels of oil per day. The well will undergo a pressure buildup test to determine whether the find is worth developing, the company said.

The drilling is part of an emerging trend of smaller outfits like Pioneer looking for oil on the North Slope.

These smaller companies, known as independents, are expected to play an increasing role on Alaska's maturing oil patch as larger companies shift their focus to richer prospects around the globe.

Pioneer holds 70 percent of the northwest Kuparuk drilling venture, and partner Armstrong Oil & Gas Inc. of Denver holds the remaining 30 percent.

The three wells were drilled from ice islands in the shallow waters of Harrison Bay.

Oil giant Exxon once held leases there, but the state took away the acreage several years ago because Exxon hadn't begun drilling it, said Ken Boyd, a former director of the Alaska Division of Oil and Gas who now works as an industry consultant.

Boyd said 1,300 barrels a day from one of the Pioneer wildcats "is not a bad well, but it's not a barn burner either." But further testing could yield a brighter conclusion.

The bigger point, Boyd said, is that independents like Pioneer and Armstrong are going to work on the North Slope, drilling prospects like Thetis Island that "really need to be drilled."

"It's our future," he told the Anchorage Daily News. "In a maturing province, the smaller companies come in and take the place of the majors, who are always looking for elephants, the giant accumulations. Right now, the book on Alaska is the accumulations are fewer and farther between, but there's still plenty of oil."

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