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Grey Owl expansion
Glacier applies to expand Savant-operated Eastern North Slope unit
Kay Cashman Petroleum News
On Nov. 10, the Alaska Department of Natural Resources' Division of Oil and Gas posted a public notice about an application to expand the Grey Owl unit on the Eastern North Slope by 24,164 acres. The application was signed by Glacier Oil & Gas COO David Pascal.
The proposed expansion area, consisting of 17 tracts, is approximately 20 miles south-southwest of Glacier subsidiary Savant Alaska's Badami Unit.
The division said that approval of the Grey Owl unit expansion would not limit or diminish access to public lands or public or navigable waters beyond any limitations already contained in the individual oil and gas leases in the unit.
Exploration and development of the proposed expansion area will occur in accordance with an approved unit plan of exploration and development, the division added.
The initial Plan of Exploration for Grey Owl is for a term of five years and provides for the drilling of one exploration appraisal well and the evaluation of all available geologic and geophysical data that relates to the unit area. The owners are expecting to drill an exploration appraisal well during the winter of 2026-27.
On March 13, 2024, Balcony Natural Resources Inc. assigned all Grey Owl leases to Savant Alaska parent Glacier Oil & Gas Corp. which applied for both the unit expansion and removal of a $2.5 million performance bond requirement.
Today Savant is the operator of Grey Owl and the expansion area.
Going back Going back in time to May 2023, then-operator Balcony applied to form the Grey Owl unit, encompassing 52 leases on 74,677 acres.
Balcony had submitted confidential geological, geophysical, and engineering data which demonstrated that the area proposed for unit formation included all or part of an oil reservoir and potential hydrocarbon accumulations, as required by state statute.
"Exploration efforts within the proposed unit and immediately surrounding area have been extremely limited and include only three wells, all drilled between 1969 and 1990. The primary exploration targets for the proposed unit were stacked turbidite sandstones in the Late Cretaceous and Early Tertiary Brookian interval of the Canning formation. Secondary targets included the Brookian Sagavanirktok formation topset sandstones. The first 2D regional seismic data was acquired in this area during the mid to late 1960s at the time of the Prudhoe Bay discovery. In the early 1990s, an additional 2D seismic survey was acquired covering the eastern part of the North Slope coastal plain. The only 3D regional seismic survey (the proprietary Shaviovik 3D) overlapping the proposed GOU was acquired in the early 2000s," the division said in its partial unit approval.
"The hydrocarbon potential of the Brookian across the North Slope Basin cannot be ignored. Within the Grey Owl Unit, Balcony has interpreted that slope sands deposited by turbidity currents in the Canning formation have been drilled by the West Kavik Unit 1 well, which recovered a minimal amount of light oil in DST 4. The Gyr 1 and Alaska St J 1 wells were interpreted to have had oil shows in the Canning formation interval. Balcony also interprets seismic anomalies from the seismic data located within the proposed Grey Owl Unit that correlate to the base of the Sagavanirktok formation," the division said in its unit approval.
The division approved a modified Grey Owl boundary encompassing only Brookian potential hydrocarbon accumulations.
Exploration tail The carbon-rich rocks of the Shublik formation are "widely regarded as a prolific source rock critical to the petroleum system of the North Slope of Alaska. Balcony describes the Shublik formation underlying the proposed Grey Owl Unit as a possible source rock resource play" but said that the Shublik resource play is not a primary target and might be evaluated at some later time as an exploration tail to an appraisal well.
The division said the application and confidential data submission do not include "maps or interpretations typically associated with development of resource plays."
Therefore, the "proposed Grey Owl Unit boundary has been modified and approved for only the identified Brookian potential hydrocarbon accumulations, ... while excluding the Shublik formation acreage."
The division said in its September 2023 partial unit approval that this satisfies the regulation for a unit to encompass the minimum area required to include all or part of one or more oil or gas reservoirs and all or part of one or more potential hydrocarbon accumulations.
Expansion area description The 17 tracts in the recent unit expansion request from Glacier were not included in the Grey Owl unit approval.
The proposed expansion area covers 24,164 acres and includes all or portions of the following:
Umiat Meridian, Alaska
T. 05N., R.018 E., Secs. 4, 5, 8, 9 T. 05N., R.020 E., Secs. 22, 23, 25 thru 29, & 32 thru 36 T. 05N., R.021 E., Secs. 4 thru 9,16 thru 20, and 29 & 30 T. 06N., R.018 E., Secs. 22 thru 24, and 26 & 27 T. 06N., R.019 E., Secs. 19 thru 30.
The division said that Savant has provided additional G&G data to support a finding that the 17 expansion tracts should be included in the unit boundary per state statue and criteria.
Bonding discussion Removing the performance bond requirement for Glacier's Savant in Grey Owl will enable the redirection of financial resources toward drilling new wells, acquiring additional leases, and maximizing investment in Alaska resources to significantly increase the economic benefits for the state, Glacier said in its unit expansion application.
In contrast, requiring Savant to post a $2.5 million performance bond will detract from Savant's ability to develop the unit and other leases, which will negatively impact the state's financial resources, Glacier said.
When the performance bond was imposed Balcony did not have a track record of exploration or development in the area, whereas Savant has an established track record.
As a Glacier company, Savant has "demonstrated over a decade of successful, safe, and compliant operations in Alaska, including ventures in and around the Badami Unit," Glacier said.
Badami facilities The Badami facilities were designed by original owner BP to provide process and export capabilities for a production rate of 35,000 barrels of oil per day, in addition to processing 22.5 million standard cubic feet per day of produced gas.
This makes Badami's infrastructure especially important to the companies exploring the eastern North Slope with development and production in mind.
Written comments Any person may file written comments on the unit expansion application. Comments must be received by 4:30 p.m., Dec.10. Contact the division in Anchorage for details.
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