Doyon building ERD rig for ConocoPhillips: oil giant's investment 'opens up a lot of opportunities'.

• Author: Stricker, Julie
• Position: OIL & GAS

A new drill rig commissioned by ConocoPhillips in October could open more opportunities for oil production on Alaska's North Slope.

ConocoPhillips signed a contract with Doyon Drilling Inc. to build an ERD (Extended Reach Drilling) rig. The rig will enable ConocoPhillips to nearly double the reach from its existing infrastructure without building new roads, pads, or pipelines. Doyon Drilling, a subsidiary of Fairbanks-based Doyon, Limited, will build the rig in Canada, says Lisa Bruner, vice president of North Slope operations and development for ConocoPhillips Alaska. The contract was announced during a low-key press conference at Doyon's Fairbanks headquarters.

Doyon President and CEO Aaron Schutt says the project offers a lot of promise for share holders and the Alaska oil industry in general.

"We're super-excited by this opportunity and appreciate the chance to fulfill this with ConocoPhillips," says Schutt. "For us, we've operated drilling rigs since 1982. This is a bigger rig with [greater] capacity than any rig we have in our fleet and more than any rig that's in Alaska, so it'll have new technologies, new equipment. For us, it represents a long-term opportunity to employ more Alaskans and hopefully make a profit while we're doing that."

It is expected to be completed and put into production on ConocoPhillips' West Fiord field in early 2020. West Fiord is located northwest of ConocoPhillips' Alpine field but isn't connected by any roads or other infrastructure.

"The great thing about this particular rig is it allows us to reach further without setting new gravel," Bruner says. "So we can reach the Fiord West reservoir from our existing drill sites."

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ConocoPhillips' current rigs have a reach of about 55 square miles, she says. The extended-reach rig will be able to access about 125 square miles without affecting the company's environmental footprint above-ground. It can extend 33,000 feet, a third more than its current rigs.

"So that's the best part about it," she says. "We don't lay any new gravel to drill these wells because the reach is so much further than what we can do with the current rigs that we have out there. So it opens up a lot of opportunities for satellite development around our existing infrastructure and still minimizes our environmental footprint."

In addition, the rig is mobile and can be used in fields across the Slope. ConocoPhillips estimates it has enough reserves to keep the rig operating for at least...