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The Explorers 2018: Glacier planning exploration projects in two basins
Company wants to test the Starfish project at Badami and wants to return to the Sabre prospect at West McArthur River Eric Lidji for Petroleum News
Having passed through a period of cautiousness following its bankruptcy reorganization, Glacier Oil & Gas Corp. is returning to the inherent uncertainty of Alaskan exploration.
The company is even using poker metaphors.
Speaking to the Alaska Support Industry Alliance in September 2017, CEO Carl Giesler likened his company’s three key plays to the three cards in a hand of Texas Hold ‘Em.
The oil development at the Redoubt unit is “face up,” so to speak. It is online and seeing results from a combination of drilling, fracturing and waterflood, according to Giesler.
The two “face down” cards are the proposed Sabre exploration well near the West McArthur River unit and the proposed Starfish exploration well at the Badami unit.
Those are the first exploration projects for Glacier since the company emerged from the bankruptcy of predecessor Miller Energy Resources Ltd. in early 2016. Through its subsidiaries Cook Inlet Energy LLC and Savant Alaska LLC, Glacier operates the West McArthur River unit and the Redoubt unit on the west side of Cook Inlet, the North Fork unit in the southern Kenai Peninsula and the Badami unit on the eastern North Slope.
Glacier currently has no exploration plans for the Redoubt unit or the North Fork unit.
Starfish at Badami Glacier believes that the Starfish project could influence its direction as a company.
The location of the prospect in the eastern North Slope creates the opportunity to expand operations without significant infrastructure demands. “If this well works close to what we think it will, it should open five to seven more prospects similar to it,” Giesler said.
The processing facilities at the Badami unit are only handling some 1,000 barrels of oil per day but could accommodate as much as 38,500 barrels per day. The discrepancy is a reminder of the failed ambitions of the original operator, BP Exploration (Alaska) Inc.
Glacier originally said that it planned to drill the Starfish well this winter using Nabors rig 27E. The project includes a 27-mile ice road connecting the Badami pad to the Endicott road. As of the start of April 2018, the company had yet to receive a drilling permit for the Starfish project from the Alaska Oil and Gas Conservation Commission.
In a plan of development from April 2017, Glacier described Starfish as one of “several new target ‘pods’ of interest” identified through a recent geologic and geophysical review of the Badami and Killian sands. The prospect is located “to the southwest of the current development area within the Badami Sands” participating area in the middle of the unit.
After his talk at the Alliance, Giesler told Petroleum News that the Starfish well would target an interval immediately above the oil source rock and below the Badami sands.
Sabre Glacier originally planned to return to exploration with the Sabre well.
Cook Inlet Energy acquired 100 working interest in the nearby Sabre and Sword prospects in 2009 through the bankruptcy proceedings of Pacific Energy Resources Ltd. and through a subsequent farm-in arrangement with Hilcorp Alaska LLC in 2012.
The company brought the Sword No. 1 well into production in November 2013 and was planning to expand its exploration efforts when it turned its attention to Sabre instead.
The Sword and the Sabre prospects continued to appear in plans for the West McArthur River unit over the next few years without ever coming to fruition. In a plan from early 2014, Cook Inlet Energy scheduled the Sabre No. 1 well for April 2016. In a plan from early 2015, the company backed away from firm dates, saying it was evaluating the well.
One complication was the location of the Sabre prospect.
Reaching the target from onshore facilities would require extended reach drilling, which would increase both the cost and difficulty. The company estimated that an extended reach well would cost between $25 million and $30 million. By late 2014, the company was “evaluating joint venture offers for participation in the project,” to defray the cost.
The target could also be reached vertically using a jack-up rig. But at the time, several other operators had spent years unsuccessfully trying to bring one to Cook Inlet.
Under a plan crafted by Miller Energy in early 2016, Cook Inlet Energy said it was postponing the Sabre well until it had finished developing proven prospects at the unit.
Glacier took over operations soon after and began permitting the Sabre well. By that time, the Cook Inlet region was home to a pair of jack-up rigs and in its application Glacier said it would use the Spartan 151 jack-up rig to drill from an offshore location.
By its next plan of development in early 2017, Glacier said it was “seeking partners in the Sabre prospect to reduce risk factors associated with drilling the Sabre No. 1 well.”
The company eventually announced plans to drill the well at the beginning of the 2017 open water season. It later deferred those plans, citing uncertainties about state fiscal policy. The company is currently planning to drill this Sabre well this coming summer.
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