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Back to the field Great Bear Petroleum plans to continue shale oil drilling program this winter Alan Bailey Petroleum News
Great Bear Petroleum plans to continue its Alaska North Slope shale-oil drilling program this winter, Ed Duncan, the company’s president and CEO, told Petroleum News Sept. 30.
“The next tranche of wells is going to be stepping west of the Haul Road, so we’re going to be looking at ice (pad) locations in the winter of 2015,” Duncan said.
Duncan said that his company has secured the use of a drilling rig for the winter drilling season but that drilling may continue after the winter, using year-round drill sites near the North Slope Haul Road.
The company is working on the required permitting for the drilling and anticipates filing a plan of operations with the Alaska Department of Natural Resources shortly.
Great Bear last drilled in the fall of 2012, when it completed two vertical test wells, the Alcor No. 1 and the Merak No.1, at sites near the northern section of the North Slope Haul Road. The company subsequently suspended its drilling operations while it tested rock samples and analyzed the drilling results. The company has since continued with extensive 3-D seismic and LIDAR survey programs in its North Slope acreage, as well as commissioning a regional aquifer study and coordinating the compilation of a major dataset of North Slope geologic information.
And with all of this data now coming together, the company has identified potential drilling locations and is ready to start turning the drill bit again, Duncan said.
Bought leases 2010 Great Bear created something of a stir in Alaska in October 2010, when it took more than 500,000 acres in a state North Slope lease sale, saying that it was embarking on a program of shale-oil exploration and development, akin to the style of development that has proved so successful in plays such as the Eagle Ford and the Bakken in the Lower 48 states. The company’s acreage, with some additions in 2011, covers a fairway south of the producing North Slope oil fields, in an area where the major North Slope oil source rocks are thought to have generated oil.
The concept was to drill into the source rocks in areas where they would have been most productive and then, using horizontal drilling and hydraulic fracturing techniques, produce oil directly from the sources. Great Bear was particularly interested in seeking oil in the Shublik, a prolific North Slope source rock that bears striking similarities to productive rocks in the Eagle Ford play. However, the company also wanted to investigate two other source rock horizons: the lower Kingak and the Hue shale/HRZ.
The company permitted six drill sites along the Haul Road with the intention of drilling through the source horizons, logging the wells and testing source rock samples from the wells. Should the source rocks have exhibited appropriate properties, there was the possibility of drilling horizontal lateral wells, to test oil production from the rocks.
Drilling suspended But, after drilling the two most northerly of the wells, Great Bear suspended its drilling operation, continuing instead with a lengthy program of surveying, testing, data collection and evaluation.
Duncan told Petroleum News that, at the start of the drilling, Great Bear had just three very widely separated data points for the Shublik, from previous wells in the region. The idea of the wells along the Haul Road was to obtain a north-south transect of data characterizing the geochemical and mechanical properties of the source rocks, to help verify the way in which the oil generating thermal history of the source rocks has varied across the region.
Under current thinking for unconventional oil development, shale-oil drilling best targets oil source rocks in the “volatile oil window,” the zone in which the rocks have been heated sufficiently to generate both oil and some solution gas, with the solution gas providing the drive for the flow of oil into production wells, Duncan said.
Analysis & data acquisition With Great Bear’s drilling rig contract expiring at the end of 2012, it was not possible to continue drilling that winter, Duncan said. And, although Great Bear logged and collected rock cores from those two initial wells, the geochemical testing of the well samples took nearly a year to complete, he said. Meantime, the company decided on a major program of surveying, data acquisition and data analysis, to identify “sweet spots,” the locations with the highest likelihood of successful shale-oil production. The idea was that, rather than drilling large numbers of wells to try to find productive locations, the company would use state-of-the-art data acquisition and analysis techniques to identify potential drill sites, Duncan explained.
And the results from those first two wells had proved promising, with the source rock penetrated by the wells being in the volatile oil window, Duncan said. “It was absolutely spot-on with our pre-drill prediction of thermal maturity and source richness,” he said.
Seismic surveys As part of its program of data acquisition, Great Bear has conducted three 3-D surveys in its acreage, in the winters of 2012, 2013 and 2014, and the company plans to conduct another survey during the coming winter. Duncan sees the seismic data as a key to finding those sweet spots, enabling insights into the orientations and intensities of fractures in the subsurface, for example. The seismic is also revealing a number of conventional oil prospects, thus providing the enticing possibility of drilling at locations with multiple conventional and unconventional targets, Duncan said.
However, Great Bear’s continued drilling will primarily target source-rock oil, with wells planned to penetrate to depths 150 feet below the base of the Shublik, he said.
Great Bear has now conducted two summers of LIDAR surveying in its acreage. LIDAR - Light Detection And Ranging - uses a laser beam to map surface topography with incredible precision and has enabled Great Bear to develop highly detailed and accurate surface maps of its acreage, and to obtain information about the water depths of lakes. The result is an ability to conduct regional drilling and development planning at a pace unachievable by other surface mapping techniques, enabling potential land access and usage problems to be anticipated rather than be dealt with re-actively, Duncan explained.
Great Bear also commissioned a study that involved using well and seismic data to assess the quality and extent of subsurface aquifers. That study identified the presence of large volumes of subsurface water, which, being brackish, is unsuitable for human consumption but is usable for the hydraulic fracturing of wells, Duncan said.
Massive database At the core of Great Bear’s search for source-oil sweet spots, the company has been working with a team of geoscientists, including prominent North Slope geologists Ken Bird and Les Magoon, to assemble a massive database of source-rock-related geologic data from existing wells across the whole of the central North Slope, from the eastern National Petroleum Reserve-Alaska to the western side of Point Thomson, and down to the southern end of the Slope. In addition to compiling available data from the wells, in some cases the scientists have tested rock samples from archived well cores in the Alaska Geologic Materials Center, Duncan said. The results of the data compilation exercise have now been incorporated into Great Bear’s continuing work program, he said.
Asked about the potential economics of Alaska shale-oil development, given the high cost of drilling on the North Slope, Duncan said that the state’s fiscal system, the combination of tax credits and tax rates, has tilted the economic playing field in Alaska’s direction, making the state competitive with other regions of the United States. The possibility of testing multiple oil plays with a single well is also a huge factor in the appeal of the North Slope’s prolific oil province, he said.
“The conventional plays can provide a good mechanism for driving infrastructure development across our leases, while the unconventional is developing,” Duncan said.
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