Doing it again!

Bill Armstrong repeating on eastern North Slope what he did to west

Kay Cashman

Petroleum News

Lagniappe is a Cajun word that loosely translates into "a good unexpected surprise" -- apropos for the Nanushuk play west of Prudhoe Bay on the North Slope, which Bill Armstrong and a partner first drilled and identified as a huge oil reservoir in 2013 (Qugruk 3 well).

The discovery led to the 2-plus billion barrel Pikka oil field, today operated and being developed by Santos.

Since that discovery, the oil industry on the North Slope has been on a tear, drilling at Horseshoe, Putu, Mitquq, Stirrup, Willow and elsewhere.

Now Armstrong is leading the charge to find Pikka-look-alikes east of Prudhoe Bay. All reports say the play concept in Armstrong's Lagniappe's acreage is very similar: Multiple zones, onshore, good gravity oil, reasonably close to infrastructure.

The targeted objectives are slightly younger than what Santos has at Pikka et al but with better reservoir qualities --porosity and permeability --even though they are somewhat deeper.

Discovery announced

The Sockeye-2 well, approximately 8 miles southeast of Badami, was drilled to a depth of some 10,500 feet and successfully encountered a high-quality reservoir with approximately 25 feet of net oil pay in one blocky, Paleocene-aged sand with an average porosity of 20%. As compared to recent regional field analogues in the Brookian play, the porosity and permeability are both better than expected, with the permeability to be confirmed through an upcoming flow test, which will be done by the first of May.

Additional zones of potential pay were also encountered in the shallower Staines Tongue formation.

In a March 18 interview with Petroleum News, Bill Armstrong described the discovery as "Alaska-like" in that it appears to stretch under "some 30,000 acres of the 350,000 Lagniappe block but be relatively thin at 25 feet unlike big discoveries elsewhere in the world which can be hundreds of feet thick but be substantially smaller in aerial extent."

The Sockeye prospect is AVO supported across 30,000 acres, and confirms the partners' geologic and geophysical models, de-risking numerous additional prospects in the area.

Wireline logging is complete and additional data collection is underway.

"The Sockeye-2 test is the second successful exploratory well drilled by the partnership on the Lagniappe position on state lands. The first well, King Street-1, was a new field discovery with oil in two separate Brookian zones. The Sockeye-2 well further demonstrates the potential of the play, presenting an exciting opportunity in an active area of the North Slope with significant existing infrastructure," said Bill Armstrong, who is CEO of Armstrong Oil & Gas and owner and CEO of Lagniappe.

"We are very encouraged by the results at the Sockeye-2 well, which further proves our geologic and geophysical models and confirms a working hydrocarbon system. We look forward to the results of the flow test and sharing more information about the broader opportunity in Alaska," said John J. Christmann, APA Corp. CEO.

There have been very few wells drilled in and near Lagniappe's South Badami area -- and most of those wells were drilled in the 1970s trying to find another Prudhoe Bay, but almost all the wells had good oil shows, Armstrong said.

Prior to finding all that oil in the Nanushuk formation west of Prudhoe Bay most people were saying Alaska's North Slope had very little remaining potential. The Nanushuk at Pikka changed all that.

Armstrong interview

The ultimate size of the field still needs to be appraised, he said, "but as currently mapped it appears to be around 30,000 acres. The Sockeye field, if that's what we call it, is very Alaska-like. A good/very good oil saturated sand that covers a big area. Due to the North Slope's structural quiescence -- a lack of faults, anticlines, etc. --fields can be and are commonly large in aerial extent such as Pikka, Prudhoe Bay, Kuparuk River, Milne Point, Willow and Alpine."

The Sockeye pay, Armstrong said, "looks very similar to the pay sands at Willow and Alpine, except the permeabilities at Sockeye appear to be substantially better --maybe 10-times better. The oil is medium gravity, low viscosity, sweet oil."

Last year, Armstrong said, was a rough year for all the operators on the North Slope due to a late start to winter and then all the operational shutdowns due to high winds.

"We intended to drill three wells last year: King Street, Sockeye and Chinook (formerly known as Voodoo). Only the King Street well was drilled to TD. That well found oil in two zones.

"This year's Sockeye well replaced last year's well which didn't get through a difficult shallow drilling issue --an issue that we were able to solve this year with a few drilling adjustments.

"Our primary objective came in as mapped. We also have additional pay shallower in the well. Seismic indicates that there are multiple look-alike anomalies nearby to Sockeye. Again, very Alaska-like.

"Our biggest prospect on our Lagniappe block, Chinook, will be located and drilled once we have finalized our seismic processing," he said, referring to a new seismic shoot by SAE.

What else?

An Armstrong affiliate was recently awarded a 100% stake in a 3.5 million acre area for offshore exploration in Aruba, amidst the hot Latin America oil plays (Guyana, Suriname, Columbia).

"We are really enthusiastic about Aruba's opportunities. It is truly exciting," Armstrong said in a text to Petroleum News.

"We have two to three world class prospects that could hold super-giant reserves for oil and gas. We're finalizing the reprocessing of a 3500 square kilometer 3D seismic shoot, and the data is showing very clear DHIs," he said.