XCD IDs first lead in Peregrine project; Ferguson’s take on BP-Hilcorp deal
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Kay Cashman Petroleum News
Alaska-focused oil junior XCD Energy said Sept. 10 that it has identified the first lead within its wholly owned Peregrine project, which is west of the central North Slope on 149,590 acres.
The acreage is on the same Nanushuk oil trend as ConocoPhillips’ big Willow discoveries about 22 miles to the north.
An “internal estimate,” for its Merlin prospect lead “calculating a best-estimate unrisked recoverable prospective resource” is 255 million barrels of oil, Perth, Australia independent XCD says.
According to the ASX-listed company, Merlin is the first of many leads mapped within XCD’s National Petroleum Reserve-Alaska lease area south of Willow.
This best estimate is “based on a calculated 1.112 billion barrels of original oil-in-place with a 23% recovery factor,” the company says.
The low to high recoverable resource estimates range from 59 million barrels to 1.2 billion barrels, XCD says.
The “chance of discovery for the Merlin lead has been estimated at 13% with a 50% chance of development.”
The company says it expects to complete the Integrated Nanushuk Technical Regional Overview, or intro study, at the Peregrine project later in September.
The intro study involves the integration of reprocessed data with other regional seismic and well data to provide an improved understanding of the Nanushuk oil play.
Immediately following completion of the study, an independent prospective resource report covering all the project’s leads is due to commence, XCD says.
“We look forward to now completing the intro project and delineating the additional leads already identified and having them independently verified to further add to the overall prospective resources in our acreage in Alaska,” XCD managing director Dougal Ferguson was quoted as saying in the Sept. 10 release.
Exploration plans According to XCD, additional exploration activities to further delineate Merlin and other leads within the Peregrine project could include 3D seismic acquisition.
The company also intends to drill an exploration well in early 2021, “subject to farmout or additional fundraising.”
XCD took over the 13 leases making up Peregrine at the start of this year when it acquired Elixir Petroleum subsidiary Emerald House. At the time, XCD was named Entek Energy Ltd, the new name being part of a re-branding as XCD began a new chapter in its history as an active oil explorer in Alaska.
Ferguson was the driving force behind entering Alaska, starting with the acquisition of three leases in NPR-A from veteran Alaska investor and independent Paul Craig.
Elixir and Emerald House, which had some of the same major shareholders as Entek, closed on the sale of those leases and 10 adjoining NPR-A leases in April, giving XCD a total of 14 leases.
Ferguson’s take on BP-Hilcorp deal On Sept. 5, Smallcaps.com.au writer Danica Cullinane interviewed Ferguson to get his reaction to the $5.6 billion acquisition of BP Exploration (Alaska) and its assets by Hilcorp, a privately owned independent.
Ferguson said Hilcorp’s acquisition would create “positive flow-on effects” in local industry because it points to “increased activity and additional expenditure on the North Slope.”
Hilcorp, he added, would likely be looking at cutting costs and increasing returns by adopting more innovative exploitation techniques.
“He said this is good news for companies such as XCD, which is also trying to find new and different methods than the majors’ traditional ‘gold-plated’ ways,” Smallcaps.com.au reported.
“None of this is negative. The fact that BP is selling for $5.6 billion means it’s not selling a late life asset. BP has taken the cream and now the new guys will come in, no doubt cut costs and extend the life of these fields with new and innovative thinking,” Ferguson told Cullinane.
Ferguson also reportedly told him the Bureau of Land Management’s recently issued draft environmental impact statement was good news for XCD, bringing infrastructure closer to its Peregrine project.
“If a discovery is made at Project Peregrine, where we are chasing the same Nanushuk shallow oil play as the Willow field, this new infrastructure shows there is a roadmap to development,” Ferguson said.
“It is arctic, and it is a remote area, but as Willow is developed over the next few years, the Conoco operated half billion barrel resource will commence production and that can only be positive for XCD given our proximity to the Willow field,” he said.
“This shows that our lease area can be developed economically, and the regulators and local communities are supportive of development in this region,” Ferguson added.
- KAY CASHMAN
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