Providing coverage of Alaska and northern Canada's oil and gas industry
December 2015

Vol. 20, No. 49 Week of December 06, 2015

Drilling rig back to work at Icewine No. 1

Accumulate Energy Alaska-Burgundy Xploration well being drilled from gravel pad at Franklin Bluffs; goal to de-risk HRZ shale play


Petroleum News

A joint venture of Accumulate Energy Alaska and Burgundy Xploration is drilling the Icewine No. 1 exploration well from an existing gravel pad at Franklin Bluffs some 35 miles south of Prudhoe Bay.

The Perth, Australia-based parent of AEA, 88 Energy, said in a November presentation that the primary objective is to “better quantify risk so that a farm-out can be achieved in 2016.” The company listed objectives as de-risking the HRZ shale play by cutting core and providing first insight into conventional reservoir potential in the Brookian and Kuparuk sands.

Drilling began at Icewine Oct. 22, and 88 Energy said the well is planned to a total depth of 11,600 feet with the primary objective the HRZ shale formation. The company said conventional potential may also exist in the shallower Brookian and deeper Kuparuk horizons, and said the well has been designed so that those horizons could be tested if warranted.

North Slope acreage

Acreage at the prospect was acquired by Burgundy Xploration beginning in 2012 and 88 Energy struck a deal with Burgundy in late 2014 to acquire a majority working interest on the large acreage position Burgundy held. Burgundy, bidding with AEA, added substantially to that acreage in the November 2015 state North Slope areawide lease sale (see story in Nov. 20 issue).

In releases on the exploration well 88 Energy said internal analysis and modeling indicates Icewine is in a high liquids vapor phase sweet spot “analogous to those encountered in other Tier 1 shale plays e.g. the Eagle Ford” in Texas.

In its Nov. 13 update 88 Energy said there had been “minor delays” in drilling due to replacement of faulty equipment associated with the blowout preventer. A replacement mud pump was also required.

Repairs to the drawworks system on Kuukpik Rig No. 5 were required in mid-November, and drilling was halted at 8,773 feet measured depth. Repairs to the drawworks were finished Nov. 25 and 88 Energy said in a Nov. 30 update that the rig was running back in hole with drilling expected to recommence within a few hours.

The plan was to drill the remaining Brookian section before setting casing above the primary HRZ shale target.


Paul Basinski, founder and president of Houston-based Burgundy Xploration, said after the Nov. 18 lease sale that the companies hoped to get enough information from one well to determine if the prospect was possible.

Basinski said he had been with Burlington Resources, and then with ConocoPhillips after that company acquired Burlington in 2005. He said he’d been working on shale since the mid-1980s and saw there might be a resource in Texas. Only a few wells in a couple hundred miles in the middle of the most drilled place in Texas had ever penetrated the shale, he said.

The issue was how to find the sweet spot and get it out of the ground. He said the idea in Texas was that if you could drill into the kitchen, the source of the oil, it could be possible to put together a play.

Basinski said the situation is similar in Alaska where there is the largest field complex in North America - Prudhoe Bay - and none of the source rocks have ever been effectively drilled and stimulated with a horizontal well.

A little different idea

Basinski said it’s similar to what Ed Duncan (formerly president of Great Bear Petroleum) was looking at north of the AEA/Burgundy acreage, but also a slightly different idea.

Rather than chasing oil, he said, AEA/Burgundy is chasing a vapor phase, where “you get a little bit deeper and where the oil is no longer oil in the reservoir, it’s actually a gas. But when you get it to the surface it becomes rich in liquids.” Basinski compared the Icewine target to Eagle Ford and said he’s using the same toolbox they used in looking at the Eagle Ford.

But a play on Alaska’s North Slope would have to be “significantly better” because it has “to be able to support the costs associated with it,” he said.

As for Icewine, Basinski said “there’s not a play like it in the world” because of the porosity; it’s almost a conventional reservoir, he said.

It’s not really shale, “it’s a volcanic rock and there’s not a productive play like this in the world yet,” he said.

Basinski said he didn’t know if it would work, but he thinks the companies have “a darned good shot because ... all the pieces are there.”

The play is big enough and it’s a major play, he said.

“The question is can it be drilled? Can it be fracked?”

There are all kinds of technical issues, he said, and for the play to be commercial you have to be able to get it out of the ground at a good rate and “until we drill a horizontal well we’re not going to know.”

If there are issues that “categorically kill the project ... then you don’t have to do anymore.”

He said the question now isn’t can it work; the question is, are there reasons why it won’t work.

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