ANCHORAGE, Alaska. Aug. 26, 1999 (PRIMEZONE) -- ARCO Alaska, Inc. and Anadarko Petroleum Corporation today announced that the two companies approved a revised development plan that will increase production rates and reserve estimates for the Alpine oil field. Upon full development, projected recovery from the field is expected to be 429 million barrels of oil. Earlier estimates, made in 1997, estimated 365 million barrels of recoverable oil.
Estimates of peak production have been increased to 80,000 barrels per day by 2001, up 10,000 barrels per day from the previous estimate. The field is expected to be operational by mid-2000, with initial production of 40,000 barrels per day.
The expanded development plan, pending final approval from regulators, will increase the total number of wells to 112 horizontal penetrations. Originally planned as a 94-well program, with both horizontal and conventional wells, the project grew after further study of the field. Upon completion, there will be more than 60 miles of reservoir penetrations.
The companies plan to implement enhanced oil recovery (EOR) at start-up of the field, and will use miscible injectant (MI) generated from the existing gas in the field. The EOR project, combined with the additional horizontal wells, will account for the increase in production and reserves.
"This has been a landmark year for development of the Alpine oil field. As we gather more information about the reservoir, it continues to exceed our expectations," said ARCO Alaska President Kevin Meyers. "Start-up of the field in mid-2000 will help to offset the decline of North Slope oil production. We look forward to seeing Alpine be the first Alaska oil field on line in the new millennium."
"Alpine represents another Alaska oil industry success story and is a model for technological advances and environmental sensitivity," said John Seitz, President of Anadarko Petroleum Corporation. "It has provided Alaskans many jobs, along with a significant economic boost to the State, from the North Slope to Nikiski. We hope that similar development programs can be repeated elsewhere on the Slope."
Upon completion of the Alpine project, ARCO and Anadarko will have invested more than $1 billion, with approximately $750 million spent in the State of Alaska. Alpine project employment peaked this winter, with an Alaska work force of approximately 1,600 throughout the communities of Fairbanks, Anchorage, Nikiski, the Mat-Su and the North Slope.
"Work on the Alpine field is continuing," said ARCO Alaska Western North Slope Vice President Ryan Lance. "Alpine's recently completed, Alaska built production facilities arrived on the North Slope in early August. The modules will be stored at Kuparuk until early-2000 when they will be moved via ice road to the field."
Because of Alpine's small footprint design, the field's surface development will encompass only about 97 acres, about two-tenths of one percent of the 40,000-acre field. To minimize impact, Alpine was developed without permanent roads. Temporary ice roads, constructed during winter, are used to move construction equipment, production facilities, drilling rigs and drilling supplies to the site; access the rest of the year is limited from the air.
Alpine, located 34 miles west of the ARCO-operated Kuparuk River oil field, is 78 percent owned by ARCO Alaska, Inc., a subsidiary of Los Angeles-based ARCO (NYSE:ARC), and 22 percent owned by Anadarko Petroleum Corp. (NYSE:APC).
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Cautionary Note to Investors-The Securities and Exchange Commission (SEC) only permits oil and gas companies to disclose in their filings with the SEC those reserves classified as proved, i.e., reserves that are economically and legally producible under existing economic and operating conditions. In this press release we use the term "estimated" reserves, which SEC guidelines strictly prohibit us from using in our SEC filings. Investors are urged to consider the reserve disclosure in our 1998 report on Form 10-K. Some of the matters discussed in this news release are forward-looking statements that involve risks and uncertainties. Actual results could differ materially based on numerous factors, including the realized level of crude oil and natural gas production and other risks detailed from time to time in the company's reports to the SEC, including the 1998 report on Form 10-K.]