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May 2018

Vol. 23, No.19 Week of May 13, 2018

Malamute de-risking Umiat; Hendrix signs on with NANA

Kay Cashman

Petroleum News

Malamute Energy, new operator of the 1 billion-barrel Umiat oil field on the eastern side of NPR-A, is working with researchers and technical experts to develop solutions to the challenges of producing light oil from the very shallow permafrost-hosted reservoir.

Umiat’s reservoir lies within the Nanushuk formation, a rock unit that has attracted much interest of late because of major oil discoveries in the formation north of Umiat by partners Armstrong/Repsol and ConocoPhillips.

Company President Leonard Sojka told Petroleum News May 8 that in late 2017, “Malamute convened a multi-disciplinary technical workshop to evaluate the past work, technical assumptions, and open questions concerning production of the Umiat oil field. As a result … Malamute is now working with University of Alaska researchers and third party technical specialists to develop solutions” to Umiat’s “specific challenges.”

Among other things, the independent is “fully defining the controls on seal and compartmentalization, determining the best drive mechanism required to produce from the low-energy shallow reservoir, and optimal orientation and configuration of production and injection wells are all part of Malamute’s current work to de-risk and advance the Umiat field toward production,” Sojka said.

One of the individuals involved in the company is Corri Feige, former director of the state of Alaska’s Division of Oil and Gas.

Petroleum News sources say once the work to re-risk and advance Umiat is completed, Malamute will look for investors or a buyer for the prospect.

In Dec. 11 correspondence with the Alaska Department of Environmental Conservation in response to its request for additional information regarding a revised oil discharge prevention and contingency plan filed mid-2017, Sojka wrote that Malamute “expects to remain non-operational with no plans for drilling-related exploration or disturbance activity on the Umiat leases through the end of 2018 or 2019.”

The contingency plan was filed after Malamute took over from previous operator Linc Energy. The plan envisaged the possibility of drilling up to nine new wells in the field.

Although the Umiat field was discovered by the U.S. Navy in 1946, it has yet to be developed, primarily because of its remote location, although infrastructure has been drawing closer with Armstrong/Repsol and ConocoPhillips discoveries to the north.

Consultancy firm Ryder Scott conducted several Umiat field assessments, the latest in 2015. The consultancy estimated a 50 percent probability of nearly 99 million barrels of oil being economically recoverable and a 10 percent chance of more than 154 million recoverable barrels. Based on previous assessments, the total volume of oil in place in the field appears to be substantially higher than these recoverable volumes - as much as 1 billion barrels.

Linc completed two wells at Umiat as part of its evaluation of the field’s potential. The second of these wells, a horizontal well completed in early 2014, achieved a sustained flow rate of 250 barrels per day of oil and a peak rate of 800 barrels per day. Linc said that the use of gas drive could push the production rate as high as 2,000 barrels per day.

At various times Linc proposed different development plans for the field, the latest published in October 2015, involving 35 wells from five pads.

Editor’s note: Leonard Sojka email is leonard@malamuteenergy.com

Hendrix NANA’s new Commercial Group president

NANA, an Alaska regional corporation, said May 8 that John Hendrix will join NANA as president of its growing Commercial Group, which is made up of subsidiaries that support resource development projects, as well as other industries throughout Alaska and in the Lower 48.

Hendrix brings almost four decades of experience in the energy industry - in Alaska, the Lower 48 and internationally. Currently, he is on Gov. Bill Walker’s cabinet as chief oil and gas advisor. Before that he was general manager of Apache Oil in the state.

“I am pleased to welcome John to our team at NANA. He is a respected voice in the energy industry and committed to Alaska’s future,” said Wayne Westlake, NANA president and CEO. “John … sees opportunities for NANA and believes in our mission to provide opportunities for shareholders, the region and Alaska.”

Hendrix, who told Petroleum News May 8 that he is very excited about his new job, will step into his new role on May 21. His energy background includes leadership roles at Apache and BP. He has also consulted for energy executives, corporate boards and government leaders, including the U.S. Interior Secretary.

“I have the deepest respect for the work done by NANA to advocate for shareholders and economic development in the region and the state,” Hendrix said. “NANA leads the way in representing and advocating for opportunities in the Arctic, and this is an opportunity to help further that mission, and to grow the Commercial Group’s presence in Alaska and beyond.” The Commercial Group employs more than 2,500 Alaskans.

- KAY CASHMAN






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