88 Energy said this morning that on Jan. 8 its wholly owned subsidiary Emerald House LLC acquired the Umiat oil field in the National Petroleum Reserve-Alaska from Malamute Energy Inc and Renaissance Umiat LLC. The purchase price was a 4% overriding royalty interest and the "assumption of liability of abandonment" of two Umiat wells (18 and 23H) drilled by Linc Energy in 2013/2014 at an estimated cost of US$1 million.
A Dec. 1, 2015, independent 2P reserve estimate by Ryder Scott put the gross 2P reserves at 123.7 million barrels of oil. (The Umiat-23H well was flow tested at a sustained rate of 200 barrels per day with no water in 2014 by Linc Energy with a max flow rate 800 barrels of oil per day.)
Umiat was discovered in 1945 in "shallow Brookian (Nanushuk) sandstones, located immediately adjacent to southern boundary of Project Peregrine," where 88 Energy operating subsidiary Accumulate Energy Alaska LLC will be drilling two wells, Merlin 1 and the Harrier 1, targeting the Nanushuk this winter, 88 Energy said in a Jan. 11 announcement.
Merlin is considered a direct analogy to ConocoPhillips' Willow oil discovery, while ConocoPhillips' Harpoon prospect is interpreted to lie on the same sequence boundaries as Harrier.
The Umiat oil field is covered by two federal leases comprising 17,633 acres, which are in a unit that was formed in September 2019 with an initial 10-year term. The current conditions of the unit stipulate a well commitment (exploration or appraisal) by Aug. 31, 2022.
88 Energy said it will "now undertake a full field review to determine at what oil price Umiat may be commercial as a stand-alone development and whether optimization of the previous development plan is possible. In the event of a discovery at Project Peregrine, where drilling is imminent, it is expected that Umiat would contribute significant value to any development."
- KAY CASHMAN
See story in Jan. 17 issue of Petroleum News, available online Friday, Jan. 15, at www.petroleumnews.com.
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