|
Savant partners with Bordeaux Canada-based company assumes 40 percent of exploration well costs for Kupcake No. 1; North Slope operator expects to spud in February; True North participation still possible Eric Lidji Petroleum News
A Canadian company with prospects in France is joining Savant Alaska LLC in the search for oil at a 3-D seismic defined North Slope prospect. It’s Vancouver and Calgary-based Bordeaux Energy Inc.’s first oil and gas asset in Alaska.
Savant closed a participation agreement with Bordeaux back in December for exploration of the Kupcake prospect, adjacent to BP’s Liberty prospect in coastal waters off the North Slope.
Under the agreement, Bordeaux will pay 40 percent of the cost for an upcoming test well at Kupcake in return for a 30 percent interest in seven Savant leases in the area.
Bordeaux also agreed to pay 30 percent of the land and data costs associated with the project and made an initial payment of around $1.2 million for lease and seismic costs already undertaken by Savant.
Bordeaux also intends to pay Savant around $1.1 million for its share of the “prepaid Test Well and rig expenses,” which brings its initial Kupcake project investment to about $2.3 million.
Savant is a closely held limited liability company and an affiliate of Denver-based Savant Resources LLC.
Bordeaux new to oil and gas Bordeaux is a relatively new entrant into global oil and gas development, but comes with a long history.
First incorporated back in 1973 as Ontario Hose Specialties Inc., the company originally produced and distributed industrial hoses, fittings, nozzles and clamps through a wholly owned subsidiary called Ontario Hose Specialties Ltd. But on June 30, 2006, it sold the subsidiary for $850,000.
The following March, the company changed its name to Bordeaux Energy Inc. and became an oil and gas player, starting with a farm-in agreement on an exploration project off the coast of France.
The agreement resulted in a well this past August, although Bordeaux and the other companies involved found no hydrocarbons at the site and decided to stop drilling in September and abandon the well in October.
The companies have been reviewing data from that drill program to evaluate the future of other prospects in the area.
True North out of the picture…for now Savant Alaska President Greg Vigil told Petroleum News Jan. 22 that a lease pooling agreement with Houston-based True North Energy Corp. has automatically terminated because True North did not come up with its share of funds to drill Kupcake No. 1.
Under the agreement, the companies would pool “certain leases,” Vigil said. Savant would pay for 91.5 percent of the cost of the well, while True North would pick up the remaining 8.5 percent.
The agreement with True North anticipated Savant would spud the Kupcake No. 1 by March 15.
The parties are in ongoing discussions regarding True North’s support of the Kupcake #1 well, Vigil said.
Rig, permits ready for Kupcake Savant originally hoped to drill Kupcake No. 1 last winter, but couldn’t get the rig and permits lined up in time.
That hasn’t been a problem this year, though. Savant contracted the Kuukpik No. 5 drilling rig last summer and now the company is waiting on one final drilling permit from the Alaska Oil and Gas Conservation Commission, which it expects to get by the end of January, according to Erik Opstad, general manager of Savant Alaska.
“All other permits are in hand and in place,” Opstad said.
Currently, Savant crews are busy building an ice road and an ice island for the future home of Kupcake No. 1, located about six miles east of the Endicott satellite drilling island in the Beaufort Sea.
Opstad said the company hopes to finish construction within a few weeks and spud Kupcake No. 1 by the end of February. The well, Savant has said, will be drilled “to a depth sufficient to test the Cretaceous age Kemik formation,” estimated at around 11,000 feet.
Hoping to learn size, shape of reservoir Savant estimates the Kupcake prospect contains about 200 million barrels of recoverable oil.
An independent evaluation of Kupcake conducted on behalf of Bordeaux and released in December, gave a “best estimate” of 170 million barrels of original oil in place. Of those, about 68 million barrels were listed as “recoverable.” The Bordeaux evaluation only covered a portion of the existing Savant leases, Vigil said.
Besides nailing down the size of the reservoir, Savant is hoping to figure out where the reservoir sits, including whether or not Kupcake is in fact in pressure communication with the adjacent Liberty prospect run by BP.
Opstad said the outcome if this winter’s exploration drilling will determine whether or not Savant returns to Kupcake next winter to drill delineation wells, or moves on to other prospects.
“We kind of take things one step at a time: The obvious goal this year is to get Kupcake down and get a feel for what we have here,” Opstad said.
| 