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The Explorers 2024: Glacier returns to exploration this year with Badami well New ownership allows for project; Cook Inlet exploration pending derisking
Eric Lidji for Petroleum News
After a full year under new ownership, Glacier Oil & Gas is planning its next exploration campaign, focusing on the Badami unit in the eastern North Slope.
Through its subsidiary Cook Inlet Energy LLC, the small independent permitted two wells at the unit -- the Badami B1-33 well and an associated pilot hole. Cook Inlet Energy received final Alaska Oil and Gas Conservation Commission permits in late January 2024 but neither well was reported as completed when The Explorers went to press in April.
Savant Alaska LLC operates the Badami exploration program on behalf of a string of independent owners. Savant is a wholly owned subsidiary of Cook Inlet Energy, which is a wholly owned subsidiary of Glacier Oil & Gas, which in turn is a subsidiary of SEP Alaska LLC, Smith Bay Company Alaska Inc. and JPD Family Holdings LLC.
Pontem Energy and Sweat Equity Partners acquired Glacier Oil & Gas in January 2023, taking over the West McArthur River unit, Redoubt unit and associated Kustatan Production Facility in Cook Inlet and the Badami unit on the eastern North Slope.
The new ownership provided Glacier Oil & Gas with an improved economic outlook for exploration, allowing it to pursue a Killian well at Badami after years of deferrals.
Additionally, the state awarded royalty modification for seven Badami leases. 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.
In permitting documents from December 2023, Savant proposed drilling the Kennicott B1-33 well using the Doyon 19 drilling rig from the existing Badami Main pad.
The company planned to build a 26.6-mile-long ice road from the Endicott/Duck Island Unit Road to the Badami Main pad and to build a temporary 50-man camp on the pad to support operations. Drilling would occur between January and late April 2024.
B1-33 would be the first exploration well at the unit since Badami B1-07 in early 2018.
In addition to drilling a Killian exploration well this year, Savant proposed several maintenance projects as part of its current plan of development running through May 2024. These include working over Badami B1-07 to restore production, continuing its ongoing study of the potential of commingling reservoirs in the B1-38 well and continuing its ongoing evaluation of acreage outside the participating area and the unit boundary.
The Badami B1-07 well was an important driver of production for the unit until its 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.
History BP Exploration (Alaska) Inc. brought Badami online in 1998, eager to close the 70-mile stretch of undeveloped acreage between Prudhoe Bay and the ANWR 1002 Area.
The compartmentalized reservoir at Badami complicated operations, forcing BP to frequently suspend work to allow reservoir pressure recharge. By the mid-2000s, some 876 barrels of oil per day were passing through a 38,500-bpd processing facility.
Taking a different approach, BP partnered with the small independent Savant Alaska in 2008 and then sold the field. Savant later became a subsidiary of Glacier Oil & Gas.
Savant stabilized production at around 1,100 barrels per day with the B1-38 and B1-07 Starfish wells and has regularly floated the possibility of exploring around the unit.
Badami East In recent years, Savant has identified several exploration and development prospects in the Badami and Killian sands at the Badami unit, including three within reach of the existing pad. The others would require construction of the Badami East pad, a satellite connected by an 8-inch three-phase production pipeline and a 2-inch gas supply pipeline.
A plan to advance the project as part of a multi-well drilling program in the Lion and Rhino Killian prospects was deferred during the uncertainty of economic conditions in 2020 and 2021. The company now says that the project "will depend on securing approval for a multi-well program that will house the surface locations on the East pad."
West McArthur River The project at Badami is the primary exploration focus for Glacier Oil & Gas this year, although the company continues to pursue maintenance projects in Cook Inlet.
Through its subsidiary Cook Inlet Energy LLC, Glacier Oil & Gas owns the West McArthur River unit, the Redoubt unit, and the associated Kustatan Production Facility in Cook Inlet. All exploration opportunities at those units are currently on hold.
One of those exploration projects is the Sabre well at the West McArthur River unit.
Former operators Union Oil Company of California, Marathon Oil Co., Forcenergy Inc. and its successor Forest Oil Corp., and Pacific Energy Resources Ltd. all pursued the Sabre project. Cook Inlet Energy considered a Sabre exploration well as early as late 2013 but ultimately delayed the project due to its complicated logistics and high cost.
With the new ownership change, Glacier said it will focus on Badami but "plans to keep its options open for the high-risk Sabre prospect" and work to reduce project risks.
In the meantime, the company is focusing on maintenance activities.
Cook Inlet Energy completed the free water knock out project at the West McArthur River unit in September 2023, repurposing existing equipment. The WMRU-4D is now being used for produced water disposal and similar work is underway at WMRU-8.
The project allows Cook Inlet Energy to "intercept three-phase fluids from West McArthur River unit prior to leaving the pad to Kustatan Production Facility and collect a portion of produced water from the stream for disposal operations on the West McArthur River unit pad," rather than injecting the fluids at the nearby Redoubt unit after processing at the Kustatan Production Facility, as had previously been done.
Cook Inlet Energy replaced failed electric submersible pumps at the WMRU-2B and the Sword No. 1 wells in May and June 2023 and a separate project at WMRU-2B in September 2023 to replace a failed penetrator that jeopardized the newly replaced ESP.
Redoubt As with West McArthur River, expansion plans at the Redoubt unit remain on hold.
Cook Inlet Energy has perennially included the Northern and Southern fault blocks at the unit on its wish list but deferred both due to financial and geologic limitations.
The company performed an unsuccessful workover at the RU-2A well in July 2023.
The company had intended to replace an electric submersible pump but abandoned the project "after discovering that a major portion of the tubing and ESP assembly had parted in the hole, which will require special intervention in the future." The complications prevented the company from fully vetting the results of a post-acid treatment at the well.
The company successfully replaced failed electric submersible pumps at the RU-5B well and the RU-7B well in August 2023 with weak acid stimulations, results pending.
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