TG World Energy is showing increasing interest in the North Tarn prospect.
“North Tarn really, as far as we’re concerned, is the best prospect that we’ve seen since we went up there,” Clifford James, president and CEO, said at a June 17 annual meeting.
Calgary-based TG World holds a 20 percent working interest in the North Tarn prospect through its participation in a joint venture led by the Alaska Venture Capital Group, which operates in Alaska through its subsidiary Brooks Range Petroleum Corp.
The North Tarn prospect is a farm-in of six Eni Petroleum leases contiguous to the west side of the Kuparuk River unit, near the Colville River. The four-company joint venture announced the deal this past January and plans to drill at the prospect next year.
TG World is basing its optimistic assessment on the results of previous 3-D seismic shot over the area and a pair of nearby wells drilled at Kuparuk. The Kuparuk 2M-33 well, just east of the prospect, encountered 75 feet of low porosity sand, while the Kuparuk 2L-03 well, located within the seismic area, encountered 20 feet of more porous sands, some charged with oil. Based on modeling, TG World expects 60-foot sands in the location where the joint venture plans to drill North Tarn No. 1 early next year.
TG World said a 5,000-foot well would test both the Brookian sands and the deeper Kuparuk C sands, now known as the Serac prospect. The company estimates recoverable reserves between 21 million and 72 million barrels of oil from the Brookian, with the possibility of an additional 6 million barrels of recoverable oil from the Kuparuk C.
TG World also likes North Tarn because of its proximity to infrastructure. The Alpine Pipeline crosses through the prospect and piggybacking on that line in the future would cut down on transportation costs. However, James doesn’t seem to think the joint venture would try to rent space at the existing processing facilities at Alpine or Kuparuk.
“We’re likely to develop our own processing unit,” James said.
Still eyeing Slugger seismicThe joint venture, led by Brooks Range Petroleum Corp. and including Ramshorn Investments, holds more than 150,600 acres of leases across the North Slope.
This past winter, the group spent most of its time at the new Beechey Point unit in the Gwydyr Bay area north of the Prudhoe Bay unit. In recent winters, the group has also drilled at the Tofkat prospect, located between North Tarn and the Colville River.
The group also holds acreage in the eastern North Slope known as Slugger, or South Thomson. While there is no exploration drilling planned for the prospect, Slugger is in the eastern North Slope, a region of much activity in recent winters. Savant Alaska is drilling at the BP-operated Badami unit and ExxonMobil is drilling at Point Thomson.
TG World sees opportunity not only in being close to Point Thomson, known to contain significant natural gas reserves, but also in being close to Badami, an oil field with a decade of fitful starts and stops. Savant is drilling both vertical and horizontal wells into various reservoirs at Badami to find a way to increase production rates.
“Why is that significant for us?” James said. “Because that’s a Brookian play, and within this area we have the same type of play. So they’re actually going to test the productivity.”
The group is proposing to shoot 130 square miles of 3-D seismic over the western half of the prospect, near the Badami field and the Mikkelson Bay East No. 1 well from 1971.
Another step toward AlaskaThe public pronouncement of faith in the opportunities at North Tarn shows TG World taking a step toward Alaska after taking several steps back over the past year and a half.
After commodity prices fell in late 2008, TG World announced plans to postpone exploration drilling in Alaska, leading to a lawsuit with program operator BRPC.
The companies resolved the dispute in time to conduct an exploration program this past winter, but after results from that drilling proved less than satisfactory for TG World, the company relinquished some of its interest in the Beechey Point unit.
TG World became a producer with a well in the Philippines that came online in June 2010. The company is also a partner on a well in Niger slated for drilling in 2011.
“We finally moved from an explorer to a producer and we’re hopeful that as time goes on here we’ll have a growing production profile,” James said in opening the meeting.
Although TG World is not yet producing oil in Alaska, the company is earning income here through the tax credits offered to exploration companies. That money will come in handy this year until production revenues arrive. At the meeting, TG World announced a $7 million capital program, but said it has only between $3 million and $4 million in hand.