Great read23 Feb 2019 10:27
Petroleum News 23rd Feb 2019
In their 2018 annual results presentation to investors and analysts on Feb. 18, Oil Search executives said the Nanushuk reservoir encountered in this winter’s Pikka B well was the thickest to date; that the company expects to invest $3 billion in Pikka development from 2019 to production in 2023; a third working interest partner will be brought into Pikka, Horseshoe and nearby leases and Oil Search will be increasing its overall stake to 30 to 35 percent. They also said new seismic acquisition is planned for the 2019-20 season; that 2020 drilling will help them decide if Horseshoe will require a standalone processing facility or will be a tie-back to Pikka; and that the next in a series of oil prospects to be explored and possibly developed might be Grizzly, south and east of Horseshoe.
This winter Oil Search is conducting a two-well appraisal program, drilling Pikka B plus a sidetrack at the southern end of the unit and Pikka C and a sidetrack in the central part of the unit. Pikka B is designed to add contingent reserves to the 120,000 barrel-per-day Pikka development around proposed drillsite 3. Pikka C is a “proof-of-concept” development well, to reduce any uncertainty regarding the production characteristics of the Nanushuk reservoir.
Pikka B drilling “has gone very well and has intersected the thickest Nanushuk reservoir seen in the field,” Peter Botten, managing director, said. (Testing is following drilling in both wells and their sidetracks.)
Information released to date by state geologists and field operators Oil Search and ConocoPhillips about Nanushuk reservoirs discovered in the region shows net thicknesses of oil-bearing sands are some 200 feet at Pikka and 40 to 70 feet at Willow.
Next winter, Oil Search is “aiming to drill up to three wells … probably some further appraisal wells in Pikka, but also looking at how we look at and appraise the Horseshoe area to the south. We’re also reviewing the Alpine reservoir targets in the Pikka unit to determine some appraisal strategies,” he said.
The $3 billion the company estimates it will spend on Pikka development from 2019 to production in 2023 represents a 35 percent equity position, per company Chief Financial Officer Stephen Gardiner.“
We view it (as a) … fairly conservative construction cost,” he said.
Little said about Grizzly
With more oil potential in the Nanushuk formation to the north and south of its Pikka development, Oil Search has said it sees Pikka as the first of a series of potential developments in the fairway between the Colville River and Kuparuk River units on the North Slope. The idea is to repeat the 120,000 barrel-per-day initial Pikka project many times over during the next 10 years, with more projects coming down behind the one that is underway, D’ Richard D’Ardenne, Oil Search senior vice president of development, said But until now no other potential prospects were named.
Unfortunately, almost nothing m
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