|
Search for untapped NS sands moves east
Five to seven more prospects expected to follow with further exploration in and near Badami unit on Alaska’s eastern North Slope Kay Cashman Petroleum News
While exploration and development are booming west of Kuparuk on Alaska’s North Slope due to new major oil discoveries in previously untested formations, something similar is occurring in sands east of the central Slope in the Badami unit.
Through its subsidiary Savant Alaska LLC, Glacier Oil & Gas Corp. drilled the B1-07 Badami exploration well with Nabors Rig 27E in early 2018 and has since announced the discovery of the Starfish prospect in the previously undeveloped Killian sands southwest of the Badami development area. The well’s production rate tested above 2,500 barrels of oil per day and has since gone on line. (The exploration project included a 27-mile ice road connecting the Badami pad to the Endicott road.)
The well into Killian sands, a reservoir interval immediately above the oil source rock and below the Badami sands that form the reservoir for the Badami field, has proven the geologic and commercial viability of the new reservoir, Glacier CEO Carl Giesler said. The B1-07 is the first well brought into production in the Badami unit since 2010 and the first to produce from the Killian sands.
Giesler has said the discovery will act as a fulcrum for future development in the Badami area.
Badami is uniquely positioned to accommodate new development. Until the Starfish discovery, the 38,500-barrel-per-day processing facilities at the unit handled approximately 1,000 bpd, a reminder of the ambitions of the original operator, major BP.
The Starfish project is the first new drilling at Badami since Savant completed the Badami Unit Red Wolf No. 2 well in April 2012, according to Alaska Oil and Gas Conservation Commission well reports. In the intervening years, Savant devoted its resources to workover projects and was stalled by a bankruptcy proceeding involving its former owner Miller Energy Resources Inc.
Through those proceedings, Glacier assumed control of Savant in early 2016. Company officials initially took a cautious approach to its new properties by focusing on low-risk development projects but began talking about potential exploration work in the summer of 2017.
Five to seven more prospects The Badami pipeline transports oil from the region to the trans-Alaska oil pipeline. “If this well works close to what we think it will, it should open five to seven more prospects similar to it,” Giesler told the Alaska Support Industry Alliance in September 2017.
The latest Badami plan of development, approved by Alaska’s Division of Oil and Gas and which covers July 16, 2018, through July 15, 2019, described Starfish as one of “several new target ‘pods’ of interest” identified through a recent geologic and geophysical review of the Badami and Killian sands.
The plan said “if B1-07 well results are favorable, and if economic conditions warrant,” the company “intends to drill up to two additional wells in the Badami unit during the winter of 2018-2019.”
The plan of development also said that to fully explore and delineate the Badami unit, an additional drilling pad will likely be needed.
The company also completed well and facility maintenance to manage natural field production in decline, including replacement of one of its two power generation turbines and maintenance-workover operations on a disposal well, the B1-01, the plan said, noting that through the end of 2017, 8.06 million barrels have been produced from the Badami unit.
Expanding Badami unit The division is reconsidering an appeal for the further expansion of the Badami unit, the state agency that’s part of the Department of Natural Resources said July 2, 2018. As is, the unit includes the Badami oil field, which is just west of Point Thomson, between it and Prudhoe Bay.
The unit expansion in question dates back to late 2012, when Savant asked the state to add seven leases to the Badami unit, including six leases held by Alaska Venture Capital Group LLC. Since that time AVCG has sold most of its interest in those six leases, with six companies now holding them, Caracol Petroleum being the largest leaseholder. Brooks Range Petroleum Corp. currently operates the leases.
The proposed lease expansion, which straddles the Beaufort Sea coast, would extend the Badami unit east, closer to ExxonMobil’s Point Thomson producing unit. Point Thomson is the eastern-most unit on the North Slope, just to the west of the Arctic National Wildlife Reserve, or ANWR.
The concept behind the lease expansion was to enable exploration drilling in the East Mikkelsen prospect that underlies a combination of Savant and AVCG leases. The prospect includes the site of the East Mikkelsen Bay No. 1 well, drilled by Humble Oil in 1971. That well encountered oil in the Killian sands, above the Hue shale source rock, with a tested flow rate of 700 bpd of 24 degree API oil.
In March 2013 the division approved inclusion of parts of two of the leases into the Badami unit but declined to expand the unit across the remainder of the seven leases: The approved expansion included the location of the Mikkelsen well. The state argued that only those lease portions met the qualifications for a lease expansion.
In April 2013 Savant appealed the state’s decision, claiming that effective exploration of the prospect required access to all seven of the leases that had been included in the unit expansion application. The matter has remained unresolved ever since, despite meetings between Savant and state officials.
On July 2, 2018, DNR Commissioner Andy Mack sent a letter to Giesler, at Savant’s owner company, telling Giesler the department had reviewed Savant’s appeal and was remanding the matter to the division for reconsideration.
Editor’s note: See full story in Inside Alaska Exploration, a special publication of Petroleum News being released in August 2018.
| 