The Oooguruk Development - Alaska Geology

1 The Oooguruk Development Four Years Drilling A Geologic Perspective Craig Knutson Pioneer Natural Resources Alaska Inc. The first oil produced by an independent on the North AGS Luncheon Slope of Alaska came from the Oooguruk field operated by Pioneer, with its 30% partner, ENI, in Date & Time: April 19th, 11:30 am 1:00 pm 2008. Pioneer managed to go from exploration wells to first production in 5 years a record for new Program: The Oooguruk Development developments on the North Slope. Three exploration wells were drilled the winter of 2002/3 by Pioneer Speaker(s): Craig Knutson Pioneer Natural Resources Alaska Inc. targeting the Kuparuk reservoir. No significant Kuparuk was found but 19-24 api oil was tested in the Place: BP Energy Center Upper Jurassic Nuiqsut formation.

2 The Development project was sanctioned in January 2006, authorizing Reservations: Please make your reservation before noon th the drilling of production wells, and the construction of Tuesday, April 17 , 2012. a 48-slot gravel island, subsea buried flowlines, and onshore ancillary facilities. Construction was Cost: Seminar only, no meal: Free completed 24 months later, and the first Development Reserve a box lunch: $15. well spud in December 2007. Since then, 23 wells have been drilled from the drillsite - 1 disposal well, 3 Reserve a hot lunch: $20. Torok wells, 6 Kuparuk wells, 12 Nuiqsut wells, and 1. Lunch with no reservation: On an as-available basis only E-mail reservations: Or phone (907) 644-4429. For more information: visit the AGS website: Kuparuk exploration well.

3 Drilling of the surface and intermediate sections above the target reservoirs has been more difficult than anticipated based upon adjacent experience. There Oooguruk Field Production Facility are Upper Cretaceous chemically reactive tuffaceous shales that are thicker than adjacent areas. In addition, the well known HRZ, Kalubik, Milluveach and Kingak shales are more mechanically stressed than in Volume 42 Number 8 April 2012 Page 1. Oooguruk Field Location Map the nearby Alpine and Kuparuk fields. Oil-based-mud siderite beds have been developed to improve drilling (OBM), managed-pressure-drilling (MPD), and re- performance. In addition, various completion design of casing programs have mitigated most strategies have been used to combat the low Kv/Kh of issues.

4 The reservoir. In general, the Kuparuk and Torok reservoirs have produced better than originally anticipated, the Nuiqsut somewhat less than anticipated, but with better quality oil and over a larger area. Drilling has been more challenging than originally estimated but solutions have been found to mitigate problems. Additional targets are being drilled and expansion of the Development is being evaluated and considered. The Torok turbidites were originally identified as low value targets defined by seismic amplitude. Closer examination of the amplitude led to a determination that it did not characterize the turbidite distribution. Well logs and cores suggested that the turbidites were hydrocarbon bearing, but much more thinly bedded than productive analog facies.

5 A three-well pilot program has been initiated to test the viability of this reservoir and preliminary results have been encouraging. An appraisal well is being drilled this winter in an effort to better understand the feasibility of an onshore (surface) Development expansion. The Kuparuk reservoir production has been better than anticipated. The reservoir limits and thickness are defined reasonably well by seismic amplitude. A. log model to resolve siderite and glauconite appears to be accurate. A facies understanding of the complex mineralogy is more problematic. A few wells show clear indications of fracturing with conduits in a N-S. orientation. Geosteering of horizontal laterals using Halliburton s azimuthal resistivity tool has been effective.

6 The Nuiqsut Development has shown mixed results. The reservoir is thicker and more laterally continuous than our pre-drill assumptions and oil quality is better in portions of the reservoir, likely due to gravity segregation. Horizontal permeability is as expected, but vertical permeability is lower than originally envisioned, primarily because of thin, extensive siderite layers that were not evident in the original Oooguruk Field Type Stratigraphic Column vertical wells. Geosteering with azimuthal density tools and strategies to effectively drill through the Volume 42 Number 8 April 2012 Page 2. About the Speaker: Craig Knutson is a Geologic Advisor with Pioneer Natural Resources and has over 34 years experience in the petroleum industry.

7 He stumbled into Geology in the early days of plate tectonics at Carleton College, graduating in 1976. He obtained his MS from the University of Michigan in 1978, concentrating on hard rocks . He worked for Mobil Oil for 20 years and has been at Pioneer for 14, the past 8 years in Alaska . Craig has worked on a variety of exploration and Development projects in the US GOM and Rockies, UK. North Sea, Argentina, Venezuela, North Africa, and Alaska . He moved to Anchorage in 2004 to work exploration in NPRA and has been involved with the Oooguruk Development since 2007. From the President s Desk The board is still looking for a volunteer to serve as Vice- President of AGS for the upcoming 2012-2013 term. The Vice-President s duties include lining up speakers for the luncheon meetings, hosting out-of-town speakers, reserving meeting rooms for upcoming luncheons, and attending monthly board meetings.

8 Anyone interested should contact one of the board members; I can be reached at or 907-269-9673. Last month AGS sponsored a Brooks Range Structural Workshop that was convened at the ConocoPhillips building. Over 35 geoscientists from industry, state and federal government attended the meeting. Rodney Graham s keynote presentation on The French Alps - classic Geology re-interpreted in the light of passive margin Geology and allocthonous salt tectonics was well received. Marwan Wartes from DGGS and Tom Homza from Shell gave stellar presentations on the regional stratigraphy and structure and of the north slope. AGS would like to thank all three for making the workshop such a success. A special thanks goes to James Buchanan of ConocoPhillips for helping organize the workshop and acting as host.

9 We should also thank Dick Garrard, yes our beloved VP, for proposing and ramrodding the concept of a workshop. The AGS Technology Conference, originally scheduled for this spring in Fairbanks, has been postponed until the fall. No date has been set but the conference will likely be scheduled for September or October in Fairbanks. AGS is looking for volunteers, especially anyone in Fairbanks, willing to help organize and host the conference. Anyone interested should contact Dick Garrard via e-mail at or by phone at 907-644-4429. This month s luncheon presentation by Craig Knutson from Pioneer Natural Resources Alaska , Inc., is entitled The Oooguruk Development : Four Years of Drilling A Geologic Perspective . Craig is a Geologic Advisor at Pioneer with over 34 years of experience in the petroleum industry, including eight years in Alaska .

10 His presentation will highlight the potential of Kuparuk, Torok, and Nuiqsut reservoirs on the north slope and promises to be enlightening, so come early to get a good seat. - Ken Volume 42 Number 8 April 2012 Page 3. Community Education Corner Science Fair 2012. By Jana Dasilva Lage The 57th Annual Alaska Science and Engineering Fair and Noble and are invited to attend our April luncheon. was held on March 24th at East High School in The Grand Prize to the top project in Geology goes to Anchorage. Special thanks go out to Kristin Elowe Sebastien Libbrecht who will receive a $100 cash who spent the day judging projects in the Earth and award. Space Science and Environmental Science categories for AGS. Projects in the High School, Middle School, Recognition to a few AGS members: Greg Durocher, and Elementary Divisions were reviewed.