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State approves Badami expansion Approval adds portions of two AVCG leases overlying East Mikkelsen prospect, but leaves five additional leases out of expansion Eric Lidji For Petroleum News
The Alaska Department of Natural Resources has agreed to expand the Badami unit to include portions of two leases overlying the East Mikkelsen oil prospect, but will not include an additional five leases also requested for expansion by two leaseholders.
The expansion adds some 2,204 acres from ADL 391001 and ADL 390825 along the eastern edge of the unit, which is currently the easternmost producing field on the North Slope. The leases overlie a known Brookian reservoir in the Killian sands tested by Humble Oil & Refining Co. on ADL 390825 in 1971 with its East Mikkelsen No. 1 well.
With the ruling, Badami-operator Savant Alaska LLC must drill an exploration well in the expansion area next winter. The directional well would target the Hue Shale, allowing Savant to test the entire Canning Formation, including the Badami and Killian intervals.
The two leases are held by the Alaska Venture Capital Group.
If successful, East Mikkelsen would be developed jointly with the existing unit.
Humble Oil drilled East Mikkelsen No. 1 to a total depth of 15,205 feet and encountered hydrocarbons in the Killian sandstone interval of the Canning formation between 11,516 feet and 11,572 feet, measured depth. A five-hour test collected 39 barrels of 24 degree API oil from the well bore, correlating to approximately 180 barrels of oil per day.
A smaller expansion Savant originally asked the state to add seven leases to Badami — one it held with partner ASRC Exploration LLC and six others held by the Alaska Venture Capital Group — but the state ultimately determined that only a portion of two leases met the criteria.
In its application last November, Savant said the seven leases would “connect subsurface potential and surface infrastructure” for the two companies. By combining the leases into a single unit, “drilling targets could be reached more easily and development could occur more efficiently and safely with less environmental impact on the area,” Savant wrote.
But the state determined that only portions of two leases met the criteria for unitization.
ADL 391001 and ADL 390825 were set to expire on Jan. 31 and Feb. 29, 2012, respectively, but were extended by unitization proceedings. Now, the un-unitized portion of ADL 391001 is called ADL 392392 and extended to Jan. 31, 2014, and the un-unitized portion of ADL 390825 is called ADL 392393 and extended to March 1, 2014.
All six Alaska Venture Capital Group leases are also still pending to be included in the proposed Telemark unit, which the state said it plans to address in a separate decision.
A new phase for Badami Badami came online in August 1998, but geologic troubles have kept the unit from producing as its owners once hoped. The field reached peak production of 7,450 barrels per day in September 1998, but former operator BP suspended production from February to May 1999, again from 2003 until 2005 and a third time starting in September 2007.
Savant Alaska and ASRC Exploration joined the project in late 2008, eventually bringing the field back into sustained production by drilling and hydraulically fracturing additional horizontal wells in an effort to boost production. Savant became the operator in late 2011.
As of January 2013, the Badami unit had produced slightly more than 6 million barrels of oil and 30 billion cubic feet of natural gas. The five wells in the Badami field were producing 214 barrels of oil and 27,000 cubic feet of natural gas as of January 2013.
Among those was the Badami B1-38 well Savant drilled in 2009, completed in early 2010 and brought online in late 2010. The well discovered the first hydrocarbon-bearing sandstone in the Brookian Killian interval shown to be capable of sustained production.
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