AOGCC issues permit for Smith Bay well

A subsidiary of Caelus Energy LLC has received a drilling permit for Smith Bay.

The Alaska Oil and Gas Conversation Commission issued a permit on Dec. 22 for Caelus Energy Alaska Smith Bay LLC to drill the CT No. 1 exploration well.

The proposed well would be on ADL 392275, at the Ikpikpuk River delta. It would deviate to the southeast, although the bottom-hole location stayed on ADL 392275.

The independent NordAq Energy Inc. revived interest in the Smith Bay region after acquiring leases in recent years and sold a 75 percent interest in the project to Caelus in June 2015. Toward the end of the year, Caelus proposed a two-well-exploration program for this winter. A proposed Tulimaniq CT-2 well would be farther west in Smith Bay.

Nearby oil seeps and proximity to the prolific Barrow Arch make the Smith Bay region highly prospective for oil. But the region remains remote, even by the standards of the North Slope. Any oil discovery would need to be large to justify development costs.

- ERIC LIDJI

—A copyrighted oil and gas lease map from Mapmakers Alaska was a research tool used in preparing this story.