Petroleum

Petroleum

Prudhoe output dips 10,000 b/d
Prudhoe Bay field production dipped in 2018 but overall North Slope production held generally stable, state officials told legislators in briefings. Total slope production averaged 501,569 barrels per day for the July-through-November period down slightly from 502,8995 barrels/day that had been forecast. For the previous 12 months of Fiscal Year 2018, production averaged 520,037 b/d, down from 527,912 b/d for the previous 12-month period of Fiscal Year 2017.

Prudhoe Bay experienced a 10,000 barrels/day reduction in 2018, averaging 270,000 barrels/day for the year. That’s down from a 280,000 barrels/day average the field maintained the previous three years, from 2015 through 2017. BP is the operator at the Prudhoe field. Increases in other fields on the slope, such as the Kuparuk River field and the Alpine field, offset the Prudhoe decline so that overall slope output was stable. Production at the Kuparuk River and Alpine fields was stable, or even increased in the case of Alpine, because of new projects in those fields brought on line in 2017 and 2018.

State officials give BP credit in sustaining production by repairing wells, doing aggressive maintenance, and maximizing the efficiency of processing plants the field. The company held production steady for three years despite falling oil prices. The drop at Prudhoe appeared to result from the completion of short-term efficiency and well optimization work BP launched to maintain production as oil prices dropped in 2016. From this point on, the state said, BP will have to resume drilling of new production wells, which had been halted to sustain Prudhoe output. BP said new drilling is now underway in the field, with two drill rigs put back to work in
December and January. Despite the lower production at Prudhoe BP still beat its target in 2018, which was in the low 260,000 barrels/day range.

Mustang field to start up in April
Brooks Range Petroleum plans to begin drilling at its small Mustang field this month and is set for initial production in April. It has been a long haul for Brooks Range, with Mustang under development for six years and the company experiencing financial setbacks due to nonpayment of state incentive tax credits owed and the 2015 drop in oil prices.

Two wells have been drilled at Mustang. A new 6,000-foot horizontal well will give the project three wells for initial production. Four more wells are planned later in 2019. Initial production is expected to be 2,000 barrels per day but a modular “Early Production Facility” will have capacity to handle up to 6,000 barrels per day. It will process oil until permanent facilities can be built. Peak production is expected to reach 11,000 barrels per day.

Mustang’s proven reserves are estimated at 22 mil- lion barrels but that may grow as the field is developed. A key advantage is Mustang is only 1,100 feet from an existing pipeline.

Great Bear, partners, set to drill
Great Bear Petroleum and three Australian partners are preparing to drill the $15 million Winx-1 exploration well near the Colville River five miles east of where Armstrong Oil and Gas made a major discovery in its Horseshoe well in 2017. The state Division of Oil and Gas gave final approval for the well. Ice road and pad construction were underway in January with drilling set to start in February. The well will be drilled to 12,000 feet from a location near the Horsehoe well drilled by Armstrong, which found oil in the Nanushuk formation at 5,000 feet. Great Bear’s partners are 88 Energy, Otto Energy and Red Emperor Resources. Oil Search, of New Guinea, has since acquired Armstrong’ holdings and hopes to develop the Horseshoe leases as part of its Pikka project.

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