On April 12, Petroleum News talked with Bill Armstrong about his plans for exploration in Alaska.
When he first arrived in Alaska more than 20 years ago, Armstrong predicted the “best days of Alaska oil and gas were yet to come” - a bold statement considering North Slope oil production was in decline, with the 800-mile trans-Alaska oil pipeline carrying half the oil it had at peak production in 1988.
Armstrong has since made believers of many Alaskans. He was responsible for the discovery of the North Slope Oooguruk field, Nikaitchuq field and the still expanding Pikka field complex which includes the Pikka, Horseshoe, Stirrup and Mitquq discoveries.
Through these exploration efforts Armstrong partnered up with multiple new entrants to the North Slope - Eni, Pioneer, Kerr McGee, Repsol and Oil Search (now part of Santos).
“The Nanushuk discoveries at Pikka were a big surprise to the industry as it was a shallow horizon in and amongst deeper developments in the Alpine and Kuparuk River field areas,” Armstrong said.
“The size of the Nanushuk fields was the biggest surprise with several of the new fields estimated to be in excess of 1 billion barrels of recoverable oil.”
Armstrong said the Nanushuk play is still in its infancy and Pikka-size oil discoveries are likely repeatable across Alaska’s North Slope, stretching 350-miles from the western edge of the state near the Chukchi Sea, through the bourgeoning Pikka/Willow complex, all the way to the eastern edge of Alaska state lands.
Focused on two areas
Currently, Armstrong told PN, his Alaska companies are focused on two areas of the North Slope:
1. Going west from Pikka into the federal lands of the National Petroleum Reserve-Alaska, or NPR-A.
2. Extending the play to the east, Armstrong’s Lagniappe Alaska controls a 340,000-acre position southeast of Prudhoe Bay, south of Badami and southwest of Point Thomson - see map in the pdf and print versions of this story. Lagniappe first began acquiring leases in November 2018 and now holds the 340,000-acre Lagniappe block 50-50 with Santos-owned Oil Search (Alaska).
Going west
Armstrong through his companies North Slope Exploration and North Slope Energy has acquired a million+ acre land position west of Conoco Phillip’s Willow field in the NPR-A (all the leases are shared 50-50 with Oil Search).
“All of these lands were acquired on seismic leads that are Nanushuk look-alikes to what has been found at Pikka and Willow. We have a high amount of confidence in what these large traps look like on seismic. The NPR-A is a huge area (roughly the size of the state of Indiana) with very little well control and not a lot of 3D seismic coverage;” something Armstrong feels is crucial in finding these fields.
“I would not be confident drilling a Nanushuk wildcat without 3D. But what we have seen on what little 3D data is available is extremely encouraging.”
Armstrong is working on a yet to be announced project on a portion of his NPR-A acreage and is hopeful for drilling to begin next winter.
Expanding Pikka fairway eastward
Going east, Armstrong intends to drill the first wells in the Lagniappe block next winter or, at the latest, in the following winter.
“Our Lagniappe block is really exciting. The eastern play is also an extension of our Pikka play and, like moving west into the NPR-A, it is one of the most underexplored areas on the North Slope,” Armstrong said.
“We have some 340,000 acres under lease, but the actual play is about 1,750 square miles and there is virtually no well control with only one well per 200 miles or so,” he said. “None of these wells were targeting the Nanushuk as they were mostly drilled decades ago chasing Prudhoe Bay type ideas, but they all had indications of oil and gas in samples and, in some cases bypassed pay on logs. In a nutshell, it is wide fricking open,” he said.
The limited well control along with high quality 3D seismic data is key to understanding the potential in the area.
The 850 square miles of recently reprocessed 3D seismic licensed over Lagniappe have helped Armstrong to identify multiple high potential targets with a similar seismic response to discoveries in the Pikka area. (The 3D seismic at Lagniappe is only a small portion of the greater than 5,000 square miles of 3D Armstrong currently owns or has licensed across the North Slope).
“The geologic and seismic play concepts in our eastern acreage are very similar to Pikka;” he said, “onshore, large, aerially extensive stratigraphic traps, multiple potential pay zones, good gravity oil, reasonably close to underutilized existing infrastructure, no communities nearby, and no problems with road access. The targeted objectives are slightly younger than what we have near Pikka but with better porosity and permeability, even though they are slightly deeper.”
North Slope best in world
The Nanushuk play on the North Slope is “undeniably the greatest onshore conventional oil play in the entire world,” Armstrong said.
The only oil plays globally that can compete with the North Slope’s Nanushuk play in size “are in offshore deepwater plays, such as Guyana (ExxonMobil, Hess, CNOOC), Suriname (Apache, Total) and the new Namibia discoveries (Shell, Total) and all of those plays are super expensive and some are technically challenged, whereas Alaska’s North Slope shallow oil is onshore, near pipelines, and in the midst of infrastructure,” Armstrong said, noting it is just a few miles from the Lagniappe block to the underused Badami processing facilities, which can handle some 35,000 barrels of oil per day.
“Alaska should be on every oil company’s top burner as a place to be working,” he said.
“The bottom line is Repsol and Armstrong found Pikka with the Qugruk 3 well drilled nine years ago. It was a big Nanushuk oil discovery. We knew that right away, but many people said, ‘no way something of that size could be sitting undiscovered on the North Slope,’” he said.
“We took a lot of slings and arrows, with people saying it couldn’t be that big.”
“We knew it was going to be big because we had the data, but people wanted proof, so we successfully stepped out to the north, and then to the south and then farther south and it kept getting bigger and bigger,” Bill Armstrong said in the April 12 interview.
As time went by Armstrong and Repsol’s doubters changed their tune as more wells were drilled. “When we drilled Horseshoe people started realizing what we knew from the start - that our Pikka field was huge. People looked at Horseshoe as a wildcat, but we knew it was ‘just’ a 20-mile, an almost unheard of extension, to what we’d found at Pikka,” he said.
The Pikka Nanushuk find is now recognized as a continuous field that is 3.5 miles wide and 40 miles long.
“It is almost exactly the same size as the giant East Texas field (the second largest field ever discovered in the U.S. with an EUR of 5.4 billion barrels). East Texas is also a stratigraphic sandstone trap that pinches out from west to east - ours is a mirror image pinching out east to west and they’re almost the same age. Oil field twins separated at birth,” Armstrong said, describing the comparison as “geeky geologist talk.”
Nanushuk has 94% success rate
“Ironically, the first oil field ever discovered in Alaska was a Nanushuk discovery at Umiat in 1946, but the field wasn’t large enough to support such a large project in those days on the North Slope,” Armstrong said.
“What we have found on Alaska’s North Slope doesn’t happen very often and that is a new play in an old province.”
After finding the Prudhoe Bay field, “explorers looked for more big structures, Prudhoe lookalikes which they were unable to duplicate, and then they stumbled into the Kuparuk sands, and then they started looking for more Kuparuk fields. Next, they discovered Alpine field in the older Jurassic, and everyone then chased after Alpine,” he said.
“Now, most of us are chasing the shallower Brookian plays, in particular the Nanushuk. Since we found Pikka, there have been 33 wells drilled that we know of that have targeted the Nanushuk topset play. Of those, 31 have been discoveries. That’s a 94% success rate. There is not a play on the planet that has that high of a wildcat success rate,” Armstrong said.
And those discoveries have tallied some 5-7 billion barrels of recoverable oil, he said, naming some of the largest discoveries: Pikka, Willow, Mitquq, Stirrup, Horseshoe and West Willow.
AVO technology
“The North Slope of Alaska is a huge sedimentary basin, yet it is very quiescent structurally. There is not a lot of faulting and not a lot of four-way closures - yet, it has these incredibly rich source rocks which have generated massive amounts of petroleum. The Prudhoe Bay field and to some degree the Kuparuk field are gentle structures, but most of the fields on the North Slope are stratigraphic traps,” Armstrong said.
“Historically, chasing stratigraphic traps has not been easy,” but a major factor in recent drilling successes, he said, is “the use of geophysical AVO technology which sees the change in seismic amplitude with offset. It is a version of bright spot technology that has been used successfully all over the world. Oil Search, Repsol, Armstrong and ConocoPhillips have recognized its value in targeting the Nanushuk across the North Slope.”
“The proof is in the pudding,” Armstrong said, “in the 31 out of 33 successful wells that have targeted the play.”
Largest clinoform system on earth
Last year geoscientists from Armstrong Oil & Gas and Repsol USA published a paper in the American Association of Petroleum Geologists, or AAPG, “Giant Field of the Decade: 2010-2020” with comprehensive information about the discovery and the geologic and geophysical characteristics of the Pikka field.
The authors of the paper point out that several exploratory wells near Pikka happened to be drilled at locations that just missed the huge Nanushuk oil pool. In addition, the Pikka discovery lies below the Colville River flood plain, a factor that renders seismic surveying in the area especially challenging.
The paper said seismic data, in combination with existing well data, demonstrated that sands of the Nanushuk had been laid down as a series of bodies across and down the upper edge of the shelf of an ancient marine basin. The flow of sediments from the west into the basin caused the shelf margin to progressively move towards the east, leaving in its wake a series of sigmoidal “clinoforms,” consisting of sand bodies dipping towards the east and elongated in a north-south direction.
“The system of clinoforms that stretch from the Chukchi on the west to the eastern boundary of the state is the largest on the planet. The only geologic analog for this system is the West Siberian Basin, which is one of the largest and most prolific hydrocarbon basins in the world and has more than 100 giant fields,” Armstrong said.
Per the U.S. Geological Survey, discovered hydrocarbons in the West Siberian Basin are 144 billion barrels of oil and more than 1,300 trillion cubic feet of natural gas. The assessed mean undiscovered resources are 55.2 billion barrels of oil, 642.9 trillion cubic feet of gas, and 20.5 billion barrels of natural gas liquids.
“The comparison bodes well for the future of North Slope exploration,” he said. “There is no conventional onshore oil play in the world that has the type of potential that still exists on the North Slope. These massive shallow oil targets more than offset the Alaska challenges of weather, infrastructure access, funding issues.”
Also, Armstrong noted, “the North Slope is one of the cleanest, most environmentally friendly, lowest carbon intensive oil production provinces in the world. A lot to like.”
