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State reconsidering Badami unit
expansion request from late 2012
Alan Bailey Petroleum News
Alaska’s Division of Oil and Gas is reconsidering an appeal for the further expansion of Savant Alaska’s Badami unit, the division announced July 2. The unit includes the Badami oil field, to the east of the central North Slope.
The unit expansion in question dates back to late 2012, when Savant asked the state to add seven leases to the unit, including six leases held by Alaska Venture Capital Group LLC. Since that time AVCG has sold most of the interest in those six leases, with six companies now holding the leases and Caracol Petroleum being the largest leaseholder. Brooks Range Petroleum Corp. currently operates the leases. The proposed lease expansion would extend the Badami unit east, towards ExxonMobil’s Point Thomson unit. The leases straddle the Beaufort Sea coast.
The concept behind the lease expansion was to enable exploration drilling in the East Mikkelsen prospect that underlies a combination of Savant and AVCG leases. The prospect includes the site of the East Mikkelsen Bay No. 1 well, drilled by Humble Oil in 1971. That well encountered oil in the Killian sands, above the Hue shale source rock, with a tested flow rate of 700 barrels per day of 24 degree API oil.
Partial approval In March 2013 the division approved inclusion of parts of two of the leases into the Badami unit but declined to expand the unit across the remainder of the seven leases: The approved expansion included the location of the Mikkelsen well. The state argued that only those lease portions met the qualifications for a lease expansion. In April 2013 Savant appealed the state’s decision, claiming that effective exploration of the prospect required access to all seven of the leases that had been included in the unit expansion application. The matter has remained unresolved ever since, despite meetings between Savant and state officials.
On July 2 Andy Mack, commissioner of the Alaska Department of Natural Resources, sent a letter to Carl Giesler, CEO of Glacier Oil and Gas Corp., Savant’s owner company, telling Giesler the department had reviewed Savant’s appeal and was remanding the matter to the division for reconsideration.
Starfish prospect In the past winter Savant’s B1-07 exploration well succeeded in locating an oil pool in the Killian sands in the Starfish prospect, in the Badami unit to the southwest of the Badami oil field development area. That well tested production rates above 2,500 barrels of oil per day and has since gone on line at Badami.
Savant’s latest Badami plan of development, approved by the division in April, says that “if B1-07 well results are favorable, and if economic conditions warrant,” the company “intends to drill up to two additional wells in the Badami unit during the winter of 2018-2019.” The plan also says that, to fully explore and delineate the Badami unit, an additional drilling pad will likely be needed.
- ALAN BAILEY
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