Kerr-McGee Oil & Gas Corp. on Tuesday said an appraisal well on
Alaska's North Slope tested at rates of up to 1,200 barrels of oil
Kerr-McGee Oil and Gas, a subsidiary of Kerr-McGee Corp. of
Oklahoma City, has a 70 percent interest in the Nikaitchuq #4, a
horizontal appraisal well.
Armstrong Alaska Inc. holds the remaining 30 percent.
The Nikaitchuq well and Kerr-McGee's Tuvaaq exploration well
about three miles to the west both encountered the same interval in
the Schrader Bluff reservoir.
Kerr-McGee said it is drilling a sidetrack, the Kigun well, to
earn additional acreage. Kerr-McGee will operate Kigun with a 55
percent working interest.
The company also increased its stake in Tuvaaq by acquiring an
additional 40 percent working interest from Pioneer Natural
Resources. Kerr-McGee now holds an 82 percent working interest in
Tuvaaq and is the operator.
We are encouraged with the results we've seen thus far in Alaska,
said Dave Hager, Kerr-McGee senior vice president responsible for
oil and gas exploration and production. Although we still need to
complete the appraisal program, based on initial evaluations, it
appears the Schrader Bluff interval might be developed throughout
much of our 36,000 acres in the Nikaitchuq and Tuvaaq area.
Kerr-McGee's announcement of its success in Alaska came while the
energy company is in a legal battle with billionaire investor Carl
Icahn and his associates. Icahn has been critical of Kerr-McGee's
drilling program and said the company should end its exploratory
deepwater drilling program.
We believe KMG can spend its money much more judiciously than to
continue spending money on high-risk exploration, Icahn said in a
letter to Kerr-McGee Chairman and Chief Executive Luke Corbett.
The Oklahoma City-based energy company has defended its drilling
program, saying its strategy has been historically successful.
Kerr-McGee's crude oil production in the fourth quarter totaled
184,700 barrels per day, up 32 percent from a year earlier. Domestic
offshore production for the fourth quarter totaled 63,100 barrels
per day, up 16 percent from a year earlier.
Red Hawk, Kerr-McGee's deepest development, is in 5,300 feet of
water in the Gulf of Mexico and uses the world's first cell spar
facility, technology that Kerr-McGee developed. The cell spar, a
floating production facility, is the third generation of the spar
systems, all of which Kerr-McGee pioneered. The technology reduces
the reserve threshold for economical development of deepwater
Kerr-McGee's Alaska program this year includes two appraisal
wells at Nikaitchuq and the exploration well at the Tuvaaq prospect.
The Nikaitchuq #4 horizontal appraisal well tested the Schrader
Bluff interval, while the Nikaitchuq #3 horizontal appraisal well
currently is being drilled to test the Sag River formation.
In 2004, Kerr-McGee announced successful exploration and
appraisal wells on the Nikaitchuq prospect.
The Nikaitchuq #1 vertical well tested at rates more than 960
barrels of oil per day from the Sag River Formation. …