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Badami not 4/sale Good time to hang onto acreage with Armstrong, Eni strong on E. North Slope Kay Cashman Petroleum News
On Aug. 23, Stephen Ratcliff, president of Glacier Oil and Gas, told Petroleum News that the Badami oil field is no longer for sale.
The eastern North Slope unit is operated by Savant Alaska, a Glacier company.
In November, Badami was posted for sale with BMO Capital Markets Energy Group, but a few months later it was taken down.
The next place Badami was listed was on Datasite.com under the site name Grizzly. It disappeared from that website at least two months ago.
One PN source said in his “humble opinion” Glacier needed to “chill out” on a Badami sale as they were selling into a “super bad market. Oil could be $100 a barrel a year from now.”
Not to mention that Badami’s 38,500 barrel-a-day processing plant, pipelines, airstrip and multiple access points could serve as a hub for the area.
Badami problematic for BP BP brought the Badami oil field into production in August 1998. It was first in a “string of pearls,” or new pipelines between undeveloped oil discoveries on Alaska’s North Slope, to make their way east from Pump Station 1 of the trans-Alaska oil pipeline at Prudhoe Bay to the border of the ANWR 1002 area, a total of about 70 miles as a goose flies.
From nearly the beginning, the Badami sands reservoir’s complex geology - compartmentalized into multiple, discrete sand bodies - rendered the Badami unit challenging to produce.
Starting early in the field’s life, oil output declined so severely that BP suspended production on several occasions, with one suspension lasting for two years. Field suspension allowed the Badami sands reservoir pressure to recharge, as subsurface oil slowly migrated between the various sand units.
By August 2007 production had fallen to 876 barrels a day.
Badami was a big disappointment for BP, which had built a 38,500 barrel-a-day capacity processing plant for the field.
In mid-2008, BP brought in Savant as a partner and operator, eventually selling out to the small independent.
While Savant has been more successful with oil production from the Badami sands with only one multi-month shutdown (due to the 2020 oil price crash), the company has also looked outside the Badami participating area for new sources of oil.
Savant’s first discovery was in early 2010 with the B1-38 well, followed by the Starfish prospect’s B1-07 well which was drilled after Savant became part of Glacier. Both the discoveries were in the shallow Cretaceous Killian sands, a Brookian interval, although B1-38 in the Red Wolf prospect also had oil in the deeper Kekiktuk formation that contains the oil reservoir for the Endicott field to the west.
As a result of these successes and well work, Savant was able to keep Badami oil production relatively steady. In May, output averaged 1,143 barrels per day.
E. North Slope hot spot And if the company can hold out, the future of the eastern North Slope looks promising.
Eni is rumored to be planning an eastern Slope exploration project on its 350,000 undeveloped acres.
When Eni purchased the acreage from Caelus in 2018, it said it planned to “apply its business model and experience,” involving “fast-track exploration” and “a short time to market” for the “potential new discoveries.”
Containing 124 state leases in two blocks, the acreage is relatively unexplored and close to Badami.
Bill Armstrong’s company, Lagniappe Alaska, and 50-50 partner Oil Search, hold some 275,000 acres south of Badami, which they expect to be drilling in the next year or two.
That alone will increase Badami’s value, especially if they find what they expect to. And so far, their track record for finding oil on the North Slope has been excellent.
But a potential merger between Oil Search and Santos could slow things down.
Still, a few months ago Armstrong told Petroleum News in a series of texts that he was very excited “about our Lagniappe play … We are essentially taking our learnings from the Pikka/Horseshoe/Mitquq/Stirrup play (all significant discoveries) in the west to east of Prudhoe Bay.”
The play concept “is very similar. Multiple zones, onshore, good gravity oil, reasonably close to infrastructure,” he said.
“The targeted objectives are slightly younger than what we have at Pikka et al but with better reservoir qualities - porosity and permeability - even though they are slightly deeper,” Armstrong said.
There have been very few wells drilled in the Lagniappe area, he continued, “and the few wells that have been drilled were not pursuing the zones that we are. Yet almost all wells had good oil and gas shows. We are using 3D seismic. We know what we are looking for due to our big success to the west.”
Armstrong said Lagniappe and its partner “are pursuing stratigraphic traps, which are subtle, but now that we know what they look like, they are identifiable on 3D seismic. Real big targets.”
Plus, all the Lagniappe acreage is on state leases, he noted more than once.
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