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May 2019

Vol. 24, No.19 Week of May 12, 2019

Entek deal closes

Dougal Ferguson takes helm; next step seismic on Nanushuk North Slope leases

Kay Cashman

Petroleum News

Dougal Ferguson has officially taken the reins of Entek Energy Ltd. whose primary oil and gas assets are in the hottest new play in North America, the Nanushuk formation on Alaska’s North Slope.

Ferguson, who has more than 25 years of experience in management positions with oil and gas companies around the world has been appointed managing director of the Perth, Australia-based independent. He was the driving force behind a sister company and its subsidiary’s entry into Alaska, starting with the acquisition of three leases in the National Petroleum Reserve-Alaska from veteran Alaska investor and independent Paul Craig.

Elixir Petroleum and its subsidiary Emerald House, which has some of the same major shareholders as Entek, closed on the sale of those leases and 10 adjoining NPR-A leases in April to Entek.

Starting with a winter 2019-20 seismic shoot, Entek is moving forward with exploration on its 149,590-acre block, although a technical evaluation of available public data has been underway for about 18 months. (Intriguingly, in addition to results of Alaska’s Division of Geological and Geophysical Surveys research being public, there is high resolution 3-D seismic data associated with Nanushuk/Torok exploration available to the public from the Alaska Department of Natural Resources.)

On trend with Willow

Dubbed Project Peregrine, Entek’s acreage stretches between the Umiat oil field on the south “on trend” with ConocoPhillips’ Willow oil prospect to the north, Ferguson told Petroleum News in a May 7 interview.

ConocoPhillips has largely focused its exploration and appraisal budgets in 2018 and 2019 on Willow, its largest new discovery to the west of the Colville River in NPR-A. The company is planning a standalone production facility for the field, expecting to bring it online in 2024-25 at 100,000-140,000 barrels a day.

In a mid-March 2019 interview with Bloomberg anchor Alix Steel on Commodity in Chief, ConocoPhillips COO Matt Fox said the 1 billion barrels of newly discovered “light, sweet” crude in the area was “100 percent oil” and not oil equivalent, noting the wells all had a “high oily content,” and contained very little natural gas. The gas that was found in the wells, he said, was reinjected. (In 2018 ConocoPhillips said crude oil from Willow area wells had an API viscosity in the range of 41-44 degrees.)

Biggest clinothem in the world

In recent year several large oil discoveries have been made in the Brookian Nanushuk and Torok formations west of the central North Slope, the youngest of the major petroleum bearing rock sequences in the region.

Essentially, the sediments in the Nanushuk and Torok were laid down in what geologists term a clinothem, a system of sedimentary deposits that build out from land into a marine basin. But according to state and federal geologists this particular clinothem is the largest of its type found anywhere in the world, containing more than 1 million cubic kilometers of sediment and having a vertical relief of at least 2 kilometers. The sediments were deposited in a basin on the north side of the then-emerging Brooks Range.

A recent oil and gas assessment of NPR-A west of the Colville River where Entek has its leases dramatically boosted technically recoverable undiscovered oil reserves in the area. Conducted by the U.S. Geological Survey and based only on a re-evaluation of the resource potential of the Nanushuk and Torok, USGS increased potential undiscovered NPR-A oil reserves from a few hundred thousand barrels in 2010 to 1.7-21.8 billion barrels in late 2017, with a mean estimate of 8.8 billion barrels.

Got in on ground floor

“It’s exciting to have gotten in on the ground floor … of the Nanushuk,” Ferguson said. “The formation was pretty much overlooked.”

He admitted there is always risk in exploration.

But, Ferguson said, “you’ve got be in it to win it.”

Like other Nanushuk explorers and developers such as Bill Armstrong, Repsol and Oil Search, another ASX-listed independent, Entek will eventually be looking for a bigger partner.

“We might raise the money for the seismic program on our own, but we’ll have to bring in a larger partner for drilling,” Ferguson said.

Entek reported cash of approximately $2 million and no debt or substantial expenditure commitments in its first quarter quarterly, after having paid out essentially $2 million in leasing fees and to Elixir for the Alaska acreage.

Peter Stickland has been appointed non-executive chairman of Entek.






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