The leases cover approximately 14,000 acres between the Kuparuk River unit and Thetis Island. The agreement will be effective November 1, 2002.
Pioneer plans to drill up to three wells during this winter drilling season, contingent upon the receipt of required permits, to test an area that the Company believes is prospective for oil in the same sands as the offsetting Kuparuk River unit eight to ten miles to the southeast. The Kuparuk River unit was discovered in 1969 and is estimated to hold 2.5 billion barrels of recoverable oil. No wells have been drilled on the acreage covered by Pioneer's leases to date, but wells drilled just outside the perimeter of the acreage have encountered the primary target, the Kuparuk "C" sands, and were oil-bearing.
The acreage is offshore in approximately five to ten feet of water. Drilling plans call for grounded sea ice pad locations that will be accessed via ice roads from Oliktok Point dock. No tundra travel is planned. All sea ice operations are expected to be completed by the end of March.
Scott D. Sheffield, Chairman and CEO, stated, "This high-impact project is a great addition to our 2003 exploration program and will allow us to leverage our winter-drilling expertise in Canada. We are excited to be expanding our North American exploration program into Alaska and look forward to partnering with Armstrong on the project."
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