Explorers 2012:Using exploration to boost Badami

Savant is first small independent to operate oil field on North Slope; looks deeper to bump output

Kay Cashman

Petroleum News

Savant Alaska LLC, an affiliate of Colorado-based Savant Resources LLC, first entered Alaska in 2006, when one of its founders, founder Pat Shaw, picked up leases in Foggy Island Bay some 20 miles west of the BP-operated Badami field, later transferring the leases to Savant’s Alaska arm.

Savant drilled an exploration well from an ice island located in 16 feet of water in the Beaufort Sea into the Kupcake oil prospect in early 2008.

Kupcake No. 1 failed to uncover hydrocarbon resources worth pursuing. A partner on the program said the target interval in the Kemik formation “was thinner than anticipated” and the porous Cretaceous sandstone proved to be “water wet.”

Savant re-emerged at Badami, taking on an even more formidable challenge in mid-2008 when it and partner ASRC Exploration signed a deal with BP to drill two wells in the unit, an exploration well and new horizontal sidetrack to improve production at a known reservoir in exchange for the right to earn certain additional working interest in the unit.

When BP first put Badami online in 1998, it expected the field to produce 30,000 to 35,000 barrels of oil per day, but the first wells proved to be disappointing. The Brookian turbidite formation at the field was a series of channels, like fingers on a hand. The trouble was getting them to “communicate” so that oil moves from one to the next.

A series of starts and stops followed, with production dropping off after a few months each time.

In September 2007 the field was taken off line for the last time by BP.

The 2008 deal with Savant and its partner led to the unit going back online in November 2010 with Savant as the operator, and BP transferring all but 4 percent of its revenue interest in several of its Badami leases to Savant Alaska and ASRC Exploration.

In early 2010, Savant drilled the B1-38 well into the Red Wolf prospect and found oil in two horizons. The first was the deeper Kekiktuk formation that also contains the oil reservoir for the Endicott field to the west. The second was the shallower late Cretaceous Killian sands interval that Savant used when it brought Badami back online later that year.

Savant has been able to keep production relative steady over the last two years, averaging about 1,400 barrels of oil per day in first eight months of 2012, versus an average of about 1,300 bpd in 2011.

Savant Alaska President Greg Vigil said in a September 2011 interview with Petroleum News, “We just want to increase production, period. We don’t have a production target, if you will.”

The company’s attack on the production problems in the Badami sands has involved advanced technology, but it has also included exploring for oil in deeper horizons, such as Savant’s first Red Wolf well.

In early 2012 Savant drilled the Red Wolf No. 2 exploration well, about two miles northwest of the bottom hole for B1-38, again targeting the Kekiktuk formation, which is deeper that the Brookian, where previous Badami development occurred.

“The well was a dry hole. … Our target zone was wet (contained water),” Vigil said.

Will Savant continue to pursue the Red Wolf prospect?

Vigil said no.

Yukon Gold next?

In the December 2011 State of Alaska North Slope areawide oil and gas lease sale Savant fended off competing bids for two tracts, paying $212,096 for 5,120 acres. One tract was adjacent to three existing Savant tracts on the edge of the 1002 area of the Arctic National Wildlife Refuge, and the second tract was to the north on the ANWR border.

Those existing tracts are ADL 391511, which contains BP’s 1993 Yukon Gold 1 discovery well; ADL 391512 which is straight west of ADL 391511, bordering ANWR; and ADL 391513, directly south of ADL 391512 along the ANWR border.

Per the State of Alaska, Yukon Gold’s recoverable reserves are 120 million barrels of oil.

Why did Savant choose Yukon Gold, and what are its plans for the prospect?

“We like the area and feel like we understand the Brookian,” Vigil told Petroleum News in mid-September 2012. “The biggest impediment is lack of infrastructure — i.e. roads.”

When asked if Savant would like to comment on the State of Alaska’s current production tax regime, Vigil said, “The regime encourages companies not to invest in new developments but rather harvest their existing production.”