Independents propose Badami expansion

Savant and Alaska Venture Capital Group ask state to expand eastern North Slope unit to include East Mikkelsen prospect

Eric Lidji

For Petroleum News

Savant Alaska LLC is asking the state to add seven leases to its Badami unit, including six held by Alaska Venture Capital Group LLC, bordering the eastern North Slope unit.

The leases would add some 10,121 acres by bringing the East Mikkelsen prospect into the unit, expanding the total area of the Badami unit to some 33,702 acres and 16 leases.

Through its operating arm Brooks Range Petroleum Corp., AVCG originally included its six leases in the Telemark unit, a nine-lease unit the small independent proposed for the fairway between the Badami and Point Thomson units. Because the East Mikkelsen prospect underlay both Brooks Range Petroleum and Savant acreage, the companies decided the best way to development the prospect would be to expand the existing unit, Brooks Range Petroleum Chief Operating Office Bart Armfield told Petroleum News.

With the expansion, Savant would drill an exploration well in the expansion area in the 2014 winter drilling season. The directional well would test an equivalent of the hydrocarbon-bearing Killian sand that Humble Oil encountered in the East Mikkelsen Bay No. 1 well in 1971. The well flowed at a rate of 700 barrels of 24 API oil per day.

The project “would be structured to allow the well to test a shared prospect between Savant and BRPC, as well as allow for a sidetrack well to test a prospect which was formerly within the existing Badami Unit controlled by Savant,” Armfield wrote.

Savant believes the expansion leases “connect subsurface potential and surface infrastructure” for the two companies in the region. 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,” according to Savant.

The Alaska Venture Capital Group leases are ADL 390825, ADL 391284, ADL 391285, ADL 391001, ADL 391376 and ADL 391378. The Savant lease is ADL 391431.

With approval of the expansion, the three additional leases Brooks Range Petroleum proposed for the Telemark unit, northeast of Badami, would retroactively expire.

The state is taking comments on the proposal through Jan. 14.

In the summer of 2011, Brooks Range Petroleum applied to form the 200,058-acre Greater Bullen unit over 68 state leases in a similar area of the eastern North Slope, but withdrew the application and relinquished some 100,000 acres a few months later.

The proposal included plans for six wells between 2012 and 2020 with production expected to begin in mid-2015, plus a 300 square mile 3-D seismic survey by early 2012.

The proposed unit included the Friezen and Red Dog prospect. Friezen was the main prospect of the former BP-operated Slugger. BP estimated the unit contained some 280 million barrels of oil, but never publically estimated the recoverable reserves for the unit. Estimates for Red Dog range from 45 million to 85 million barrels of recoverable oil.

In early 2012, Brooks Range Petroleum proposed the Telemark unit from the nine leases included in the “N” block, one of six exploration blocks proposed for Greater Bullen.

In its Telemark proposal, Brooks Range Petroleum planned to shoot a 3-D seismic survey by the end of 2012, choose a drilling location in 2013 and drill a well by March 2014.