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Badami's latest development plan approved, includes exploration wells
Kay Cashman Petroleum News
On June 20, the Alaska Department of Natural Resources' Division of Oil and Gas approved the proposed annual Badami unit plan of development, or POD, from operator Savant Alaska LLC. Among other things, Savant committed to continue exploration and development of the new Badami and Killian sand prospects, drill two Badami sand wells from the Badami Main Pad and evaluate targets for a third Killian exploration well.
The POD is referred to throughout the approval as the 2024 POD, although it runs from July 16, 2024, through July 15, 2025. in the eastern North Slope unit. It is the 21st plan of development for the Badami unit.
In addition to those listed above, the company committed to the following operations in the 2024 POD period.
* Evaluating Killian sand prospects for acreage outside the participating area and Badami unit boundary;
* Evaluating an additional well workover on the B1-01 Class 1 injection well to expand injection zones;
* Exploring options to convert existing Badami wells to Class I or II injection wells;
* Continuing the evaluation of newly acquired acreage (possibly referring to Grey Owl leases which consist of roughly 75,000 acres that are approximately 25 miles south of the Badami unit and/or acreage acquired in state lease sales);
* Evaluating B1-14 and B1-21 wells for gas injection/storage and retrieval;
* Continuing well and facility maintenance and optimization;
* Upgrading the control system for the two Badami turbines; and
* Exploring options for restarting the shut-in Grind & Inject, or G&I, facility.
The Badami unit is located approximately 25 miles west of the Point Thomson unit and 30 miles east of Deadhorse on the Beaufort Sea Coast.
Average daily oil production from Badami between April 1, 2023, and March 31, 2024, was 859 barrels of oil. This was a 34% increase from the 640 bpd produced daily in the prior 12-month period, the increase mainly driven by restoring production in the Badami Killian sands B1-07 Starfish well and the Killian B1-33 exploration well (also known as the Kennicott B1-33.)
B1-33, drilled in the 2023 POD period (early in 2024), was the first exploration well in the Badami unit since the B1-07 Starfish well in early 2018.
The Badami reservoir has always been challenging to develop and has historically shown very steep declines. Increases in production always followed optimization events such as adding perforations, gas lift installations or the addition of new wells, such as the B1-07 well.
The B1-07 well was an important driver of production for the unit until it was taken offline in July 2022 following a stuck fish. Savant restored production in late May 2023. Badami oil production increased 79.5% between May and June 2023.
Additionally, the state awarded royalty modification for seven Badami leases in July 2023. The rates are "based on a sliding scale incorporating both oil price and production," according to the decision from Department of Natural Resources Commissioner John Boyle. The sliding scale would never dip below 3% and would remain in place through 2030.
2023 POD period The 2023 POD period ran from July 16, 2023, to July 15, 2024.
In its proposed 2023 Badami unit POD, Savant committed to accomplish the following:
* Continuing the exploration and development activities for the new Badami and Killian sand prospects;
* Evaluating Killian sand prospects for acreage outside the PA and unit boundary;
* Continuing the evaluation of newly acquired acreage;
* Drilling a Killian exploration well;
* Conducting a workover of the B1-07 to restore production;
* Continuing to evaluate adding perforations in the B1-38 well;
* Continuing to evaluate the potential of commingling reservoirs in the B1-38 well;
* Drilling two Badami sand wells from the Badami Main Pad; and
* Continuing well and facility maintenance and optimization.
Although Savant committed to drilling two Badami sand wells from the Badami Main Pad in the 2023 POD period, Savant deferred this project because it drilled the Killian B1-33 exploration well.
During a May 16, 2024, technical meeting with Alaska's Division of Oil and Gas, however, Savant confirmed that the Badami wells remain integral to its multi-well development strategy, and yet it is possible that Savant could prioritize Killian-related projects depending on both the results from the Killian B1-33 well and prospectivity of the Killian play.
Savant successfully completed all other proposed 2023 POD period commitments, the division said.
East Pad paused In its application for the 2024 POD, Savant said it has temporarily paused expansion efforts for its new East Pad at Badami, pending the results of the B1-33 exploration well.
But Savant said it is "also evaluating the risk and execution of drilling extended reach wells from the Badami Main pad along with economics that help with the case of tie-in into existing production facilities on the Badami main pad."
Division's approval In its approval of the 2024 Badami unit POD, Division of Oil and Gas Director Derek Nottingham wrote: "The public has an interest in diligent exploration and development of the State's resources. The plans set forth in the 2024 POD protect this public interest by maintaining production, drilling two Badami sand wells, evaluating targets for a third Killian exploration well, optimizing current wells for water or gas injection, and continuing well and facility maintenance, optimization, and upgrades."
The 2024 POD "therefore is necessary and advisable to protect the public interest."
--KAY CASHMAN
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