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The Explorers 2020: Borealis working on 2021-22 exploration plans
Drilling Castle North first west of the central North Slope in NPR-A; seeking JV partner; first taker was Armstrong for 72% WI in Castle West prospect Kay Cashman Petroleum News
Borealis Alaska Oil Inc. is continuing to progress plans for exploratory drilling at its Castle North prospect in the northeastern National Petroleum Reserve-Alaska, Richard “Dick” Garrard, Borealis chief technical officer, told Petroleum News in early July 2020. The company plans to drill in the winter of 2021-22, he said.
A June 2019 re-brand of Nordaq Energy, Borealis has been focusing its exploration interests on two areas of the North Slope - the northeastern NPR-A and the more easterly part of the Slope, to the south of the Badami oil field.
The Anchorage-based independent is also evaluating the reprocessing of some 2D seismic associated with its Grey Owl prospect trend on state land near the Arctic National Wildlife Refuge 1002 area, Garrard said. The ANWR 1002 area is 1.57 million acres in a narrow strip of coastline that was set aside because of its petroleum potential by Congress in 1980 when the 19 million-acre refuge was created.
Borealis continues to seek joint venture partners for its drilling. At the end of 2019 the company completed a joint venture deal with Armstrong Oil and Gas, in which Armstrong obtained a 72% working interest in eight leases covering the Castle West prospect area in NPR-A.
Castle prospect trend In NPR-A, the Borealis leases lie in what the company terms the Castle prospect trend, a series of six individual prospects in the lower Nanushuk formation. Southwest of Willow, the prospects are directly analogous to the geologic setting for major oil discoveries at Pikka, under development by Oil Search (Alaska), and by ConocoPhillips at Willow, Garrard said.
The Castle East prospect lies in the same sand body as the Harpoon prospect, where ConocoPhillips drilled an exploration well in the winter of 2019-20.
According to Garrard, Nordaq recognized the potential of the Castle trend and obtained leases in the area three years before ConocoPhillips announced its big Willow discovery.
Focus on Castle North Borealis is particularly focusing its attention on drilling in the Castle North prospect, where it has identified four drilling sites. A nearby large gravel pad and 6,500-foot runway developed for the drilling of the Inigok well in 1978-79 can be used as an operations base for drilling and seismic activities, thus reducing the cost of the drilling project. Access would be by a winter snow trail from the Kuparuk 2-P Pad.
In a 2019 interview Garrard said the drilling of the Inigok No. 1 well in the Castle trend area by the U.S. Geological Survey and Husky Oil points to a strong possibility of finding oil in the trend.
The USGS/Husky well was drilled very deep, to around 20,000 feet, to test for oil in the Ellesmerian sequence, the rock sequence that hosts the main oil reservoir for the Prudhoe Bay field. But the upper part of this well, down to a depth of about 4,000 feet, encountered sands with gas shows, Garrard said.
These gas shows had heavy to light gas ratios indicative of the presence of light oil in the Brookian rocks of the region.
The oil that ConocoPhillips found at Willow was light, with an API gravity of 40 to 44 API, he said.
Agile Seismic in Houston completed the reprocessing of 3D seismic data for Castle North, per Garrard. The focus of the reprocessing was the shallow rock interval down to the base of the Nanushuk. The reprocessed seismic was used in a Castle North shallow hazards assessment, conducted for Borealis by Fugro. The seismic and the associated assessment revealed a possible hydrocarbon related amplitude anomaly at a shallower depth than the planned exploration target at one of the drill sites.
Currently, Garrard said on July 22, 2020, Borealis is conducting a detailed analysis of the 3D seismic amplitudes (AVO/AVA) associated with the Castle North prospect through Agile Seismic, the results of which will become available very soon. Studies of this type can help in reservoir prediction including thickness, quality and fluid saturations, he said.
BLM maintains Inigok The Bureau of Land Management has maintained the facilities as the Inigok Operations Center, and companies exploring in the area can use the center as an operations base, thus eliminating the need to construct an ice pad or ice runway.
“It really does help, because there’s not a lot of infrastructure as you go west,” Garrard said. “That can make drilling operations and seismic operations much cheaper.”
Equipment would be transported to the Inigok Operations Center by snow road from the central North Slope, he said.
Once the equipment is at Inigok, it should be possible to drill several wells relatively quickly since testing the Brookian prospects only requires drilling to depths of no more than 4,000 feet - a single well will perhaps take around a week to drill, Garrard said.
Planning, permitting started Because of logistical issues associated with the COVID-19 pandemic, Borealis had to defer summer 2020 field studies of the drill sites until 2021. Meanwhile, the company has commissioned Owl Ridge Natural Resource Consultants in Anchorage to start the long lead permitting and planning, to meet a target 2021-22 drilling schedule, Garrard said. Because of the pandemic, BLM has agreed to temporarily suspend the primary term of NPR-A leases 100% held by Borealis, he said.
The company intends to drill one exploration well, with the possibility of a second appraisal well, depending on drilling results. If time is available, it may be possible to drill a third well, Garrard said.
Borealis thinks BLM’s preferred alternative for its new NPR-A integrated activity plan is encouraging and bodes well for the future of NPR-A oil exploration and production.
Grey Owl trend The Grey Owl trend, near the ANWR 1002 area border also involves prospects in the Brookian rock sequence, the sequence that contains the Nanushuk formation. However, the Grey Owl prospects are in the Canning formation, a rock formation that consists of layered sandstones referred to as turbidites.
Unlike the Nanushuk, which was formed on the upper edge of an ancient marine basin, the Canning turbidites were deposited on the basin floor. While the location of the turbidites in the axial region of the basin bodes well for reservoir quality, findings from the West Kavik Unit No. 1 well, drilled by Texaco in 1969, indicate the presence of over-pressured light oil in the Canning at Grey Owl, Garrard said.
The area is just 25 miles south of existing oil infrastructure at Badami.
In July 2020, WesternGeco was reprocessing some 2D seismic for the Grey Owl area on a trial basis to evaluate the possibility of better imaging the Canning reservoirs. If this trial proves successful, Borealis may consider the complete reprocessing of all the licensed 2D seismic for the area, Garrard said.
Smith Bay divested Nordaq had interests in offshore leases in Smith Bay, west of the central North Slope, where Caelus Energy Alaska said it made a major oil find in 2016. However, Borealis divested its interest in the Smith Bay assets, having determined that the logistical costs of operating in that area were too high for a relatively small company, Garrard said in the 2019 interview.
Also, although in the past Nordaq conducted exploration activities in the Cook Inlet region, Borealis is now focusing on the North Slope rather than the Cook Inlet, he said.
Garrard believes the presence of Borealis in Alaska represents a trend towards activity by smaller oil companies, typical of what is seen in many petroleum basins around the world.
“New companies with new ideas and more activity are needed to stimulate fresh exploration and hopefully new discoveries,” he said.
Alan Bailey contributed to this article.
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