Vol. 25, No.44 Week of November 01, 2020
Providing coverage of Alaska and northern Canada's oil and gas industry

Jade advances Sourdough

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Independent on track to drill BP’s 1990s eastern North Slope oil discovery

Kay Cashman

Petroleum News

Alaska independent Jade Energy LLC is moving steadily forward with its plans to evaluate and possibly develop BP’s Sourdough oil discovery, having completed its scheduled summer work and obtained several federal and state permits and authorizations.

“Despite the COVID-19 situation and challenges imposed by a less than robust commercial environment in the Alaska oil industry we are largely on schedule with plans outlined in the 2nd Jade POD,” or Plan of Development, Erik Opstad told Petroleum News Oct. 27.

Opstad, who oversees Jade’s operations in Alaska and is a 50% owner, is a state of Alaska certified professional geologist who has worked the North Slope for 35 years, including a stint with BP in various roles and as a principal and general manager of Savant Alaska. He currently heads up operating subsidiaries of 88 Energy in Alaska.

A couple of days after it was filed on March 17, the Alaska Department of Natural Resource’s Division of Oil and Gas approved Jade’s second POD for the undeveloped Sourdough prospect on the southeastern edge of the Point Thomson unit, or PTU. The first new well is scheduled to be drilled in the winter of 2021-22.

Adjacent to ANWR 1002 area

The Sourdough prospect runs along the western edge of the 1002 area of the Arctic National Wildlife Refuge, which is a 1.57 million-acre strip of coastline that was set aside because of its petroleum potential by Congress in 1980 when the 19 million-acre wildlife refuge was created.

Jade is both the majority owner and operator of PTU Tract 32 in Area F of state lease ADL 343112.

Tract 32 holds two of the mid-1990’s oil discovery wells, Sourdough 2 and 3. In 1997 BP estimated the prospect held 100 million barrels of recoverable oil.

Jade worked closely on the second POD with the division in order to come up with a plan that maintained the economic viability of the project, which is the farthest east of all North Slope developments.

“The next Plan of Development is due December 31st, but I’ll file the draft with the Division November 1st. We’re also focused on getting the Plan of Operations filed before year end and we expect a 5-year permit for dredging to be issued by the US Army Corps of Engineers any day now,” Opstad said in an Oct. 27 email to PN.

More well locations

Area F of the PTU was created by the terms of the Point Thomson Unit Settlement Agreement between unit operator ExxonMobil and the other owners. Area F consists of 7,647 non-adjacent acres in the northeastern and southeastern corners of the PTU.

Jade became majority owner and operator of PTU Tract 32, ADL 343112, in the southeastern portion of Area F, by agreement with ExxonMobil Alaska Production Inc. in mid-2018.

Some of the work in the second POD was to focus on selecting additional delineation and development well locations particularly in any “expansion” areas that may be added to ADL 343112 resources through negotiations with the other PTU working interest owners.

Various 3D seismic surveys have been acquired and interpreted over Area F.

One of these was new compressive sensing imaging, or CSI, seismic 3D data from the area during the 2017-18 winter season with parameters optimized to characterize Brookian strata. The CSI 3D survey was the first of three field studies.

“On the basis of CSI 3D seismic data we have evaluated a location for Jade 2 sited considerably to the west of Jade 1 and adjacent to the PTU airport to prove up additional resources in ADL 343112,” Opstad said Oct. 27.

“We also have focused on working up additional delineation/development well locations in ‘expansion’ areas that may be added to ADL 343112 resources. Although ongoing conversation with other PTU working interest owners aimed at capitalizing on such opportunities are being pursued, I really don’t expect that we can advance those discussions until sometime after the November election results are posted,” he said.

Nordic Rig-3

Jade’s plans to mobilize a drilling rig to Point Thomson by barge from the Deadhorse area presents a “unique opportunity to capture significant savings versus what would typically be spent on a traditional ice road focused rig mobilization scenario,” the company said in its second POD.

“Capturing such savings is key to the economic viability of the project. However, given seasonality drivers, many important tasks are limited to being executed only during very specific calendar windows; barging requires open water, ice road construction requires -20°F temperatures and getting men and equipment to the Jade 1 drillsite requires both conditions,” per the second POD.

When asked which rig Jade was considering using, on Oct. 27 Opstad said, “We have been very pleased with the performance and safety record of Nordic Calista personnel and equipment on several recent drilling projects and we certainly hope to be able to deploy Nordic Rig 3 to drill Jade 1.”

Through Nov. 1

Opstad provided PN with the following “permits, authorizations and completed investigations advanced Jan. 1 through Nov. 1 of this year.”

1. U.S. Fish and Wildlife Service Letters of Authorization; LOA 20-INT-08 issued for the incidental take of polar bears during winter operations and LOA 20-INT-06 for the intentional take of polar bears during fall barging operations. Both valid Sept. 1, 2020 through Aug. 5, 2021.

2. ADNR/OHA-SHPO State Cultural Resource Investigation Permit (SCRIP) for historic, prehistoric, and archaeological investigations (surveys) on state lands issued on Sept. 8.

3. Request for POD Submittal Extension; Point Thomson Area-F ADL 343112, approved Sept. 17.

4. Jade Energy Oil Discharge Prevention & Contingency Plan; Alaska Department of Environmental Conservation Plan #19-CP-5253, approved July 15.

5. Certificate of Reasonable Assurance; ADEC for placement of dredged and/or fill material in waters of the U.S., issued Sept. 11.

6. Public notice of application for permit; US Army Corps of Engineers #POA-2020-00347, Aug. 7.

7. Jade 1 Ice Road and Ice Pad Cultural and Archaeological Resources Survey; field survey completed on Aug. 26 by Chuck Mobley and Associates (CMMA). Report submitted to ADNR/OHA-SHPO on Oct. 23.

8. Second Bathymetric Survey of the PTU Service Pier Approach; first helicopter based offshore bathymetric survey conducted in Alaska, Aug. 26.

Delineated by 5 wells

Potential Brookian reservoirs have been encountered by numerous wells that have been drilled in and near the Point Thomson unit since the 1970s. Sourdough 2 was drilled to a true vertical depth of 12,562 feet and was plugged and abandoned. Sourdough 3 was drilled to 12,425 feet TVD and suspended. Both wells were granted extended confidentiality by the Alaska Oil and Gas Conservation Commission, or AOGCC.

But a total of five wells were of particular importance, Jade told the division.

The other three wells were in the northeast corner of the unit and were summarized by Jade as follows:

* Alaska State A-1 on ADL 047556 was drilled by Exxon and reached a 14,206-feet TVD in September 1975 and was plugged and abandoned. That data is available to the public from AOGCC.

* Alaska State A-2 is immediately adjacent to Alaska State A-1 and was drilled as a cutting’s disposal well by Exxon in 1995 to 2,364-feet TVD and was plugged and abandoned in March 2002.

* Exxon spud Alaska State G-2 from ADL 343110 and directionally drilled the well north to reach a bottom-hole at 14,340-feet TVD within ADL 343109 in August 1983. The well was subsequently plugged and abandoned, but AOGCC granted the well extended confidentiality.

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