Santos likely to deliver first oil from Pikka near end of 2025

Kay Cashman

Petroleum News

On March 17, APA Corp. announced an oil discovery on Alaska's North Slope from the Sockeye-2 exploration well in the Lagniappe area east of Prudhoe Bay.

Santos has a 25% stake in the joint venture with Apache holding 50% and Bill Armstrong's Lagniappe holding 25%.

The Sockeye-2 well was drilled to a depth of approximately 10,500 feet, successfully reaching a high-quality reservoir containing around 25 feet of net oil pay within a single, blocky, Paleocene-aged sand formation with an average porosity of 20%. Additionally, potential pay zones were identified in the shallower Staines Tongue formation.

Santos Executive Vice President and President Alaska Bruce Dingeman expressed excitement about the discovery and confirmed that strong progress has been made at the Pikka phase project.

"We are pleased with the Sockeye-2 well exploration discovery and its confirmation of resource potential over our Lagniappe leasehold. In addition, we are now 80% complete at our Pikka phase 1 project. Pipeline installation is progressing well and set to be completed in two winter seasons, putting us in a good position to pursue acceleration to first oil around the end of 2025. This will be dependent on logistics and weather allowing for the mobilization of key production models by barge up the Hay River."

Until the company has more certainty, guidance remains unchanged with first oil in mid-2026, Dingeman said.

Pikka phase 1 is expected to deliver 80,000 barrels of oil per day at full production shortly after start-up.

Santos said it remains committed to disciplined investment in the Alaska assets to deliver value for shareholders, delivering safe and efficient operations while advancing key development milestones.

--KAY CASHMAN