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Vol. 14, No. 32 Week of August 09, 2009
Providing coverage of Alaska and northern Canada's oil and gas industry

Savant aims to finish Badami well

Denver independent also hopes to drill sidetrack this winter as part of BP farmout agreement

Wesley Loy

For Petroleum News

Savant Alaska will resume drilling this winter in the difficult Badami unit on Alaska’s North Slope, the company’s general manager confirmed.

Deteriorating weather conditions cut short the last winter drilling season, forcing Savant to shut down operations in late April and move its rig off a well targeting a Kekiktuk formation in its Red Wolf prospect within the Badami unit. The nearby Endicott field produces from a Kekiktuk formation, which is found beneath and southwest of the Brookian turbidite sands previously developed and produced at Badami.

BP’s nearby Endicott field produces from a Kekiktuk formation, and is considered a highly efficient reservoir because oil is recovered quickly. Unlike the Brookian, oil from a Kekiktuk formation does not contain much paraffin, a waxy substance that makes development more challenging.

Savant intends to return to Red Wolf and finish the drilling, Savant Alaska General Manager Erik Opstad told Petroleum News on Aug. 5.

Afterward, time permitting, the company hopes to drill a sidetrack off one of Badami’s existing vertical wells, Opstad said.

The sidetrack will penetrate horizontally into the Brookian sands and should yield much better information and productivity than did Badami’s “somewhat challenged” vertical wells, he said.

Savant hasn’t yet decided which Badami well it will sidetrack.

“We’re looking at a couple of different wells,” Opstad said. “We’ll make a decision in the next couple of weeks.”

Different road and rig

Warming weather last spring caused early breakup along the Sagavanirktok River, over which Savant’s ice road to Badami ran. Badami is located along the Beaufort Sea coast roughly 30 miles east of Prudhoe Bay.

The breakup forced Savant to suspend drilling and withdraw Doyon’s rig 16, which returned to Prudhoe under contract to BP.

This coming season, Savant is changing its road tactics, Opstad said.

Beginning probably in late November, construction will start on a tundra road to Badami, he said.

The road, roughly following the Badami pipeline corridor, will be farther inland and thus less vulnerable to the storm surges that tear up coastal roads, Opstad said.

The road also will be farther away from polar bear dens that likewise can complicate operations.

Building a tundra road involves using tracked vehicles to pack down snow, which is then sprayed with a little water to form something like “ice-crete,” Opstad said.

Permits for a tundra road are required from the state as well as the North Slope Borough.

“We have all of those in hand,” Opstad said.

Savant expects to use a different rig for its drilling this year, he added. Contract negotiations were still ongoing, but Savant expects to use Doyon rig 141.

BP relies on Savant

Savant Alaska is a subsidiary of Savant Resources, a small Denver-based independent oil and gas company. The firm has had a presence in Alaska since 2006, and this spring occupied new digs in the Anchorage Business Park.

The company leased North Slope acreage in a March 2006 sale and later drilled the Kupcake No. 1 exploration well from an ice island some 20 miles west of Badami.

Savant is aiming to squeeze more oil out of the troublesome Badami unit, which belongs to BP.

The London-based oil and gas giant put Badami on stream in August 1998 with hopes of producing 30,000 barrels a day. BP employees celebrated the field startup with a fireworks show in the parking lot of the company’s Anchorage office tower.

But while production ramped up as planned, Badami soon fizzled, making only about 1,400 barrels a day in 2003 when BP mothballed the field. It had six production wells at the time on a compact gravel pad.

BP later restarted Badami, then idled it again in 2007.

Badami’s problem is reservoir compartmentalization — the oil doesn’t flow through producing zones. That’s why the field’s initial production tailed off very quickly.

Savant has a farmout agreement with BP and under terms of a plan of development filed with the state, BP is relying on Savant to further explore and develop the Badami unit.

According to a July 25, 2008, approval letter from the state Division of Oil and Gas, BP, through Savant, “will drill, sidetrack, or recomplete two wells” in the unit.

New approach

Division Director Kevin Banks wrote that Savant “is a capable third party based on its experience drilling an Alaskan exploration well and applying new fracturing technology in low permeability shales.”

Savant plans to combine horizontal drilling with hydraulic fracturing — pumping large volumes of fluid into the ground to crack the formation — to try to improve Badami’s oil flow.

Hydraulic fracturing has been tried before at Badami, but only on traditional vertical wells.

Opstad declined to say how much its two-well drilling program will cost. The company is optimistic, taking on the challenge “in reasonably digestible bites,” he said.

BP might soon have more to say about Badami.

The 2008 state approval letter says BP, by Aug. 15, must submit a report with engineering and other information on a possible Badami plant restart, and the results of any exploration drilling.

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