Providing coverage of Alaska and northern Canada's oil and gas industry
September 2018

Vol. 23, No.35 Week of September 02, 2018

Eni buys Caelus blocks

Italian major confirms acquisition of 350,000 acres on eastern North Slope

Kay Cashman

Petroleum News

As reported in Oil Patch Insider in Petroleum News’ Aug. 19 issue, Eni has acquired Caelus Alaska’s eastern North Slope acreage, which consists of 350,000 onshore acres between the Prudhoe Bay and Point Thomson units (see adjacent map).

At that time a formal announcement had not been made, but the Italian major confirmed the purchase of the 124 state oil and gas leases in an Aug. 29 press release.

Eni previously held some 35,120 acres on the North Slope, bringing its new total to more than 385,000 acres.

Eni said the eastern exploration acreage "is considered a prime area with high potential and multiple proven plays.” The company plans to “apply its business model and experience,” involving “fast-track exploration” and “a short time to market” for the “potential new discoveries.”

A price was not disclosed. (See this edition’s Oil Patch Insider for speculation on how Caelus might intend to use the funds for another North Slope project.)

Eni also said the 350,000 acres is close to existing infrastructure and to the trans-Alaska oil pipeline and approximately 20 miles southeast of Deadhorse, which is an unincorporated community consisting mainly of facilities for oilfield workers and firms that have contracts with the nearby oil fields, including Prudhoe. Deadhorse is accessible via the Dalton Highway and the Deadhorse Airport.

To the west of Prudhoe Bay, Eni owns and operates the Nikaitchuq oil field and is a minority owner in the adjacent Caelus-operated Oooguruk oil field, with a total net production of approximately 20,000 barrels of oil equivalent a day. Oooguruk is adjacent to the Pikka unit where the huge Pikka and Horseshoe oil discoveries were made in 2016 by Armstrong and Repsol and are under plans for development by their partner Oil Search.

Multiple play types revealed on seismic

Shortly after acquiring the eastern North Slope leases in 2015, which are in two blocks, Caelus acquired 175 square miles of new 3-D seismic data and reprocessed another 275 square miles of existing 3-D to image prospects on the acreage.

“Adjacent infrastructure with available capacity reduces threshold volumes required for developing discoveries in the sub-100 MMBO recoverable range,” Caelus said. “Multiple play types within proven stratigraphic horizons provide significant upside potential in previously poorly-imaged structural trends and/or subtle stratigraphic traps.”

Surrounding legacy wells “confirm deeper petroleum system elements and de-risked shallower Brookian reservoirs and hydrocarbon charge and phase within the area,” Caelus said, much of which has been previously reported in PN.

Nikaitchuq North wildcat and unit drilling

Eni’s plan to resume oil drilling at Nikaitchuq and indications of positive results from the company’s Nikaitchuq North wildcat well preceded Eni’s Aug. 29 announcement.

Eni CEO Claudio Descalzi said at a recent 2018-21 strategy meeting that the company was “doing well” in Alaska and had plans for “increased investment” in the state (see Oil Patch Insider, April 22 issue of PN).

In its 11th plan of development for the Nikaitchuq unit, Eni announced plans to drill as many as three new wells and to add laterals to as many as eight existing single lateral wells at its Spy Island Drillsite as soon as October, depending on “the results and scope of exploration work” at Nikaitchuq North, which involved drilling an ultra-extended reach well from the Spy Island Drillsite into federal waters north of the Nikaitchuq unit.

The rig that was used for the wildcat, Doyon 15, required considerable modification and will also be used for drilling the unit wells.

From the beginning, the purpose of the wildcat was to add reserves to Nikaitchuq and to increase production from the unit.

Note: For more information on Eni’s plan of development see this article in the July 29 issue of PN: “Eni says drilling at Nikaitchuq could resume as early as this fall.”

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