Jade gets paperwork and drilling extension for Sourdough program
In Sept. 8 correspondence from Alaska's Division of Oil and Gas to Jade Energy LLC, the local independent was given two extensions from July 1 and Sept. 1, respectively, to March 5, 2024. At which time Jade has to file a document showing a 50% funding commitment for the overall cost to drill and complete the well Jade had hoped to drill in winter 2024. The company also has to provide the division with a signed drilling rig and services contract containing a "defined" drilling date and price for the Jade 1 well.
An operations challenge that Erik Opstad, Jade's managing member, mentioned in a June 5 interview with Petroleum News, is the "enormous strain" on the supply chain because of the "extremely elevated activity level on the North Slope." The situation includes competition for rigs.
That is combined with the 10,000 psi rig requirement for drilling near the old BP Sourdough wells in the acreage Jade operates in the eastern North Slope Point Thomson unit --Area F: Tract 32 of ADL 343112. (See map on page 6 at this link in Petroleum News' June 25 issue: https://www.petroleumnews.com/pdfarch/511457649.pdf#page=1)
The reservoir has 25 API gravity oil contained within the over-pressured sands that are found throughout the Point Thomson unit.
Jade found a suitably sized rig that had been purchased by Alaska-based Nordic Calista in June. But Rig 37 needs complete refurbishment, which is currently being done in Canada.
Opstad told Petroleum News Sept 12 that he seriously doubts the rig will be finished in time to drill a winter 2024 well. "This is something we don't have control of."
Which is why in early July, Opstad requested an extension of Jade's fifth plan of development that called for a winter 2024 well and the funding and rig paperwork that was due by July 1 and Sept. 1.
The company waited more than two months for the division to reply to its request, which came in the Sept. 8 letter. The agency said Jade's 2023 (fifth) POD was extended to March 5, 2024, and the due date for Jade's 2024 (sixth) POD was Dec. 5, 2023, 90 days prior to the expiration of Jade's 2023 (fifth) POD.
Jade 1 plansThe most recent information released about Jade's plans for the Jade 1 well was in an application the company submitted in late May to the division for a 5-year off-road travel land use permit.
According to the public notice posted by the agency the permit is for "the JADE 1 Exploration Program."
In fact, it is more of an appraisal and development program because Jade is drilling in the Sourdough prospect, where in the mid-1990s BP drilled three Sourdough wildcats, announcing in 1997 that it had discovered 100 million barrels of recoverable oil by means of two wells, Sourdough 2 and 3.
At the time there were no nearby producing oil fields and BP would have had to build a 50-plus-mile pipeline back to the trans-Alaska pipeline for its oil.
Sourdough now lies in the Point Thomson unit where Jade is owner and operator of Area F: Tract 32 of ADL 343112, which is approximately 60 air miles east of Deadhorse.
Drilling and support operations for Jade 1 will take place in the winter during the open tundra winter travel season and will be supported by using a 61.5-mile Jade snow road that will run from Deadhorse to the Point Thomson unit.
The Jade 1 ice drill pad will be accessed by a 4.2-mile Jade ice road from the Point Thomson gravel lease roads to Jade 1 and by a Jade ice airstrip which will be adjacent to the pad.
Jade said it may opt to drill additional wells and/or re-enter and test existing wells on its lease in the future. This may require revised alignments for snow roads, ice roads and airstrips, and ice pad locations.
Jade has a facility sharing agreement with ExxonMobil Alaska Production Inc. and Hilcorp North Slope LLC to use Point Thomson unit facilities and heavy equipment.
Opstad told Petroleum News June 5 that Jade 1 will be drilled to a depth of about 12,500 feet true vertical depth.
Jade's application said drilling will evaluate stacked conventional objectives within the Brookian, before plugging back and sidetracking into a horizontal production completion.
In its lease plan of operations Jade said drilling is expected to include laterals, sidetracks or additional penetrations from the same pad.