Icewine well wins DNR approval

The Alaska Department of Natural Resources, Division of Oil and Gas, has approved an amended and modified lease plan of operations by Accumulate Energy Alaska for the Icewine No. 1 exploration well.

The well will be drilled from the Franklin Bluffs gravel pad adjacent to the Dalton Highway some 30 miles south of Deadhorse.

The Sept. 16 decision lists a number of conditions of approval, including status reports on activity to be filed May 1 and Nov. 1 of each year until a final completion report is filed and provision of a certified as-built survey of all improvements within one year of placement.

Accumulate Energy is a wholly owned subsidiary of Australian-based 88 Energy, which said in a Sept. 17 statement that two key permits remain to be closed out for the project, an oil discharge prevention and contingency plan and a permit to drill.

This will be the first well in the state for Accumulate Energy.

The well will be drilled on a tract acquired at a state oil and gas lease sale by Burgundy Xploration, with joint venture partner Accumulate Energy Alaska as operator. Burgundy acquired 98,182 contiguous acres of state oil and gas leases near White Hills in 2013 and 2014, an area where Unocal drilled five wells beginning in 2008.

Burgundy took two tracts in the state’s 2013 North Slope areawide lease sale, was assigned four other While Hills leases in late 2013 and took 90,720 acres in the state’s 2014 North Slope areawide sale.

Current state lease records show Accumulate Energy Alaska as working interest owner of 85,909 acres and Burgundy as WIO of 12,273 acres.

The company said in its application that it would use Nabors rig 105AC or a rig with similar specifications, but 88 Energy said in a Sept. 10 statement that it had executed a rig contract with Kuukpik Drilling for the well.

The company said in an August statement that “definitive binding documentation has been executed with Bank of America” for funding the Icewine project up to $50 million.

The division said in its decision that the dates in Accumulate Energy’s application are approximate and may change due to weather, logistics requirements or regulatory decisions, but said it expects that while earlier dates may change, dates for finishing drilling, demobilization and cleanup would remain the same.

Accumulate’s schedule listed pre-season reconnaissance in July; permitting from February through mid-September; potential maintenance of pad and access roads in the second half of August; mobilization of camp and drilling rig in the second half of September; exploration drilling from mid-October through mid-December, and demobilization in the second half of December.

The Division of Oil and Gas said the plan of operations for the project describes one vertical well “to core potentially petroliferous zones in both unconventional and conventional reservoirs,” with the goal of the pilot drilling program “to analyze the potential productivity, deliverability, and commerciality of the greater Icewine project area.”

The division also said that depending on results from initial drilling and time remaining in the season, Accumulate “may drill a lateral well, sidetracks, or additional penetrations from the same exploration pad.”

The division said Accumulate plans to use the existing Franklin Bluffs pad and White Hills staging area, but that the final location of the Icewine No. 1 well will ensure that it does not intersect with the drill path of the Franklin Bluffs No. 1, a shallow well drilled in 2005 by the federal Bureau of Land Management.

The division said the well is planned “as a single vertical well drilled into an unconventional shale oil zone and potential liquid conventional hydrocarbon zones.”

- KRISTEN NELSON