NordAq following in footsteps of FEX

Independent planning work on state acreage in Smith Bay, also in NPR-A area where FEX reported positive drilling results in 2007

Kristen Nelson

Petroleum News

As Petroleum News reported last week, NordAq Energy Inc. has permitting under way for exploration drilling in Smith Bay off Alaska’s North Slope this winter season, and for proposed work in the National Petroleum Reserve-Alaska in following winter seasons.

These are areas where FEX worked in the 2000s, shooting seismic in Smith Bay and NPR-A and drilling in NPR-A, over what appears to be the same acreage.

In an oil discharge prevention and contingency plan filed with the Alaska Department of Environmental Conservation, NordAq said it was proposing to drill in Smith Bay, with 10 Tulimaniq wells listed, and then in NPR-A with four wells listed: Aklaq Nos. 2A and 6A, Aklaqyaaq No. 1 and Amaguq No. 2A.

The Smith Bay wells would be drilled with a land-based rig from a grounded ice island, the company said, with the first season’s drilling to begin in January 2014 and be completed by April 21.

FEX’s Aklaqyaaq the best

In a March 2007 analysts’ call by Talisman, parent company of FEX, Talisman CEO Jim Buckee and John ‘t Hart, the company’s executive vice president of exploration, described NPR-A prospects, with Aklaqyaaq said to be the biggest, with median reserve potential for the three prospects described as hundreds of millions of barrels.

In May 2007, Talisman said the three wells FEX drilled in NPR-A in 2007 all encountered hydrocarbon-bearing sandstones in several formations.

The Amaguq No. 2 was plugged and abandoned; the Aklaqyaaq No. 1 and the Aklaq No. 6 were suspended.

FEX said the “initial estimate of contingent resources present” in formations of the two 2007 suspended wells was “300-400 million barrels” net to FEX, which had an 80 percent working interest in the leases.

Talisman said that in addition to the 300-400 million barrels, “there is significant follow-up potential on many similar structures on Talisman’s acreage if commercial productivity is proven,” based on log analysis and “strong gas and oil shows, including oil staining and free oil in the drilling mud in one of the wells.” FEX said the two wells encountered more than 225 feet of net hydrocarbon-bearing sandstones.

The Amaguq No. 2 was described as “subcommercial given current infrastructure.”

Talisman had said FEX would test the rest of the wells during the 2007-08 winter drilling season, but cancelled those plans when NPR-A lease sale schedule was slowed.

The company spent three years drilling wildcats in NPR-A, beginning as a partner in the Caribou well drilled by Total in the NPR-A Northeast Planning Area. It then spent two winters operating its own wells, drilling wildcats in the Northwest Planning Area of NPR-A, onshore south of Smith Bay.

Aklaq No. 2 and a sidetrack were drilled in the winter of 2005-06; Aklaqyaaq No. 1, Amaguq No. 2 and Aklaq No. 6 were drilled in 2006-07.

FEX plugged and abandoned three NPR-A exploration wells in 2010-11 — all near the Ikpikpuk River southeast of Barrow — Aklaqyaaq No. 1, Aklaq No. 2 and Aklaq No. 6.

NordAq plans

NordAq plans to begin in Smith Bay, however, where FEX never drilled, although it did shoot 3-D seismic there.

Rig, camp and equipment will be moved overland by wide-track or low-pressure vehicles pulling sleighs or trailers, with mobilization from West Dock to Cape Simpson as soon as travel conditions allow.

Cape Simpson is owned by the North Slope Borough and operated by UIC.

Overland travel in 2013-14 from Cape Simpson, northwest of Smith Bay, to the first well site will be via ice trail via low-pressure vehicles or all-terrain vehicles, with supplies and equipment coming to Cape Simpson or the drilling location from Deadhorse. NordAq said the early season route begins at 2P Pad, crosses the Colville River at Ocean Point, and then follows alignment used by previous operators, most recently FEX.

Later in the season a route will become available along Harrison Bay and the Kogru River maximizing use of sea ice and lake ice and allowing for smoother travel.

NordAq said supply and resupply on frozen trails by low-pressure vehicles from Barrow may occur.

An airstrip will be constructed, 5,000 feet or longer, allowing landing by C-130 or similar heavy-lift aircraft.

As reported last week, NordAq proposes to drill up to eight exploration well locations during the 2013-14 and 2014-15 winter drilling seasons offshore in Smith Bay. In future years additional locations may be drilled in Smith Bay or within the Northwest NPR-A.

At the end of the winter 2013-14 season the drilling rig, camp and fuel tanks will be moved to Cape Simpson for summer storage, and equipment would be mobilized from Cape Simpson for winter 2014-15 work.

Long distances

The NPR-A wells are farther out, occupying three blocks of acreage stepping to the southwest from Smith Bay: the proposed location for the Aklaq well would be 155 miles from Drill Site 2P and 82 miles from Barrow; the Aklaq well would be 168 miles from 2P and 79 miles from Barrow; and the Aklaqyaaq wells would range from 176 to 197 miles from 2P and 73 to 104 miles from Barrow.

While there are no wells in Smith Bay, there are known oil seeps at Cape Simpson west of Smith Bay.

In 2006, after FEX acquired its Smith Bay acreage, Division of Oil and Gas geologist Paul Decker described the area as a natural oil trap where Brookian topset sands come up against shale in an ancient incised canyon, and said oil from the Cape Simpson seeps likely originates from an “oil kitchen” to the north in the lower Cretaceous source rock system known as the HRZ.

That would put the Smith Bay “area squarely in between the kitchen and the seeps,” Decker said. “So you probably have a pretty good plumbing story to be able to charge this with nice light oil.”

—A copyrighted oil and gas lease map from Mapmakers Alaska was a research tool used in preparing this story.