Vol. 26, No.38 Week of September 19, 2021
Providing coverage of Alaska and northern Canada's oil and gas industry

88E lone explorer?

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One exploration well definitely planned for Alaska North Slope this winter

Kay Cashman

Petroleum News

One oil and gas exploration well is being planned for Alaska’s North Slope this coming winter, and that is 88 Energy’s Merlin 2 well.

There is an outside chance (no confirmation yet) that Eni US Operating Co., a subsidiary of Italian multinational Eni S.p.A., will spud its second Nikaitchuq North extended reach exploration well in second quarter 2022. The Alaska Beaufort Sea prospect is in a federal OCS unit, Harrison Bay block 6423, which is approximately 6 miles from the Spy Island Drill site in the state of Alaska Nikaitchuq unit.

In its 14th plan of development for the Nikaitchuq unit, which runs from Oct. 1 through Sept. 30, 2022, operator Eni told Alaska’s Division of Oil and Gas that facility upgrades will be completed to support the planned Nikaitchuq North exploration well.

NN-02 was supposed to be drilled this coming winter unless Eni requested another extension from the feds. No word on that yet.

ConocoPhillips, the North Slope’s most consistent explorer, will not drill any exploration or appraisal wells this coming winter, including Narwhal or Harpoon wells, Rebecca Boys told Petroleum News in a Sept. 9 email. Boys is media and advertising director for ConocoPhillips Alaska.

That said, ConocoPhillips’s in-field work, including development drilling, is picking up on the North Slope.

Great Bear Pantheon will not be drilling another well this winter, but it will be re-entering its successful Talitha A exploration well in order to recover additional fluid samples.

That well was drilled and logged to the base of the Kuparuk formation, with sidewall cores taken from each potential reservoir interval (Kuparuk, Lower Basin Floor, Upper Basin Floor Fan sequences, Slope Fan and Shelf Margin Deltaic horizons). Although seasonal restrictions and operational prudence did not allow time for a flow test at all potential reservoir intervals, a flow test was conducted at the deepest of those intervals, the Kuparuk.

Merlin 2 to the east

88 Energy said Aug. 16 that although it reserves the right to re-enter the Merlin 1 exploration well in the future, next year in first quarter it will drill Merlin 2, an appraisal well to the east and closer to the shelf break where the company expects “enhanced reservoir thickness and quality.”

88 Energy also said its post well evaluation of Merlin 1, which was drilled in March to a depth of 5,267 feet in the National Petroleum Reserve-Alaska, has successfully demonstrated the presence of oil in multiple stacked sequences in the Cretaceous Nanushuk formation (N20 and N18 targets). An additional new target, the N19 sand, that was not previously mapped, also returned a strong hydrocarbon signature following geochemical analysis.

Analysis indicated 41 feet of net log pay across the three reservoir intervals, which are in the Nanushuk Grandstand sands.

These sands, 88 Energy said, show close correlation to the Lower Grandstand sands seen in 88 Energy’s nearby Umiat field and petrophysical analysis has returned 138 feet of possible net pay.

In addition, 88 Energy said geochemical analysis of the cores from Merlin 1 established the “presence of a light oil with an estimated API gravity between mid-30 to low-40 API.”

Money in hand

The company said Sept. 2 that it had raised about $17.7 million ($24M Australian) in a share placing to finance Merlin 2. 88 Energy, which is the owner of four Alaska operating subsidiaries - Emerald House, Regenerate Alaska, Accumulate Energy Alaska, Captivate Energy Alaska - also said that with the share placing it will have enough cash to fund its working capital requirements and general and administrative overheads for at least 12 months.

“Completion of this placing positions 88 Energy strongly as planning and preparations continue for drilling of the Merlin 2 appraisal well,” said chief executive Ashley Gilbert.

88 Energy said it is also looking for a farm-in partner for Project Peregrine, which holds the Merlin prospect.

Lots of oil

Incorporating Merlin 1 results into Project Peregrine’s dataset, 88 Energy revised Peregrine’s mean total prospective resource to an estimated 1.6 billion barrels.

The objective of Merlin 1 was to assess three independent Nanushuk reservoir targets - N14, N20, and N18 - identified from reprocessed seismic data. All targets came in considerably deeper than expected.

Post well analysis indicated that the N14 horizon, the primary target of Merlin 1, was not intersected, as it was believed to lie about 600 feet deeper than the well’s total depth.

The company said N14 remains a target of interest for the future.

Merlin 1 was drilled by one of 88 Energy’s four Alaska operating subsidiaries, Emerald House. All the subsidiaries are run by long-time Alaska geologist and innovator Erik Opstad.

Opstad used All-American Rig 111, a lightweight, inexpensive portable rig that did not require an ice road.

Merlin 2 pre-planning

With Merlin 1, the company was looking at proving up a gross mean prospective resource of 645 million barrels of oil. With Merlin 2, 88 Energy is targeting a net entitlement mean prospective resource of 652 million barrels (unrisked).

Three potential locations have been selected for Merlin 2 and will be permitted, the company said, with pre-planning and rig selection under way.

Merlin 2 is designed to target the thicker zones of reservoir intervals.

A potential infill 2D seismic program, consisting of 343 line miles, has been designed and costed, the company said.

Gilbert was quoted in the Aug. 16 report as saying: “We are thrilled with the results from the Merlin 1 exploration well. This is the best well we’ve drilled on the North Slope of Alaska to date, with light oil detected in the Nanushuk across three separate horizons.”

88 Energy holds a 100% interest in the Peregrine Project, which also includes the Harrier prospect.

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