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Onward for North Slope
Feige shares excitement over what’s happening, renewed oil company interest
Kay Cashman Petroleum News
Corri Feige presented the May 30 Alaska Oil & Gas Association conference in Anchorage a summary of what Gov. Mike Dunleavy’s administration is doing to keep Alaska’s oil industry “on the map,” including the efforts of her department.
The Alaska Department of Natural Resources, the commissioner said, is using the recent major North Slope Brookian oil discoveries by explorers such as Armstrong, Repsol, Oil Search and ConocoPhillips to attract other oil companies to the region. Among other things, DNR is adding large blocks of land with complete seismic and well datasets to the upcoming areawide lease sales and working to decrease the timeline to bring a field online from seven to five years.
“The world is watching Alaska and we heard that loud and clear in the last several months as we traveled,” Feige said, specifically mentioning time she, Dunleavy and staff spent at CERAWeek in March, and the mid-May Tudor Pickering & Holt Hotter ’N Hell Conference on May 14 that she and fellow DNR employees participated in.
“At CERAWeek we had four intensive days of back-to-back meetings with companies, with regulators that were our counterparts from other places in the world and with the investment community. We told Alaska’s story to everyone and, likewise, two weeks ago at the Tudor Pickering & Holt conference in Houston we had a 45-minute session dedicated solely to Alaska.”
Just from that conference, she said, DNR had callbacks from three companies who had not previously operated in Alaska but were “very keen on finding out how they can come and work here,” Feige said.
String of pearls Whereas the expression “string of pearls” has been used to depict the oil fields and prospects east from Prudhoe Bay to the border of the ANWR 1002 area, the commissioner used it in an entirely different context.
“We have what I call the string of pearls,” Feige said. “We have great rocks. We have a lot of oil in the ground. We have large, continuous geologic trends with high potential for discovery success. And, we have large acreage positions that are available for acquisition.”
This list of attributes has put Alaska’s North Slope “further ahead of a lot of other basins … because it has those key elements that companies wanting to take a material position in a basin can achieve,” she said.
Some of the oil companies the state is attracting are new players, some are “old friends” showing renewed interest in Alaska, and some are existing North Slope players bringing in new investors.
One of the “key factors DNR looks at to predict trends” in industry activity, Feige said, is the number and size of transactions DNR’s Division of Oil and Gas handles each year - and those started growing last year: In 2018 the division “processed 929 working interest transactions … indicative of interest owners bringing interest-owner partners in with new money. ... That’s a good indication Alaska is on the map and that leads to record exploration.”
This past winter drilling season on the North Slope, she said, was the busiest in 15 years.
The 2018 areawide Beaufort Sea and North Slope oil and gas sales, Feige noted, were “the most lucrative lease sales in Alaska since 1998, bringing in just over $29 million in bonus bids and we saw the highest ever per acre bid ($586). … What I found most compelling about this lease sale was … the large acreage blacks” that were taken - “that is something that Alaska enjoys that the rest of the world and the Lower 48 … do not. We have the space, the physical space, for companies to still come and put together a large acreage position to build a large exploration program. We’re definitely on the map.”
SALSA offering hot The division will be conducting an areawide lease sale this year, Feige said, targeted for December and which she hopes can be coordinated to be held on the same day as the federal ANWR 1002 and National Petroleum Reserve-Alaska lease sales.
“If the stars align” she said, they will either be on the same day or scheduled within a day or two of each other.
The SALSA - Special Alaska Lease Sale Area - lease offering is a new concept.
DNR has an “oil and gas leasing team, an evaluation team, that put this concept into play last year, just before the North Slope sale,” Feige said.
In talking to oil companies after the sale, DNR learned “there wasn’t enough lead time for companies to really wrap their heads around what … the SALSA is. … These are bundled land and data packages designed to help them jumpstart exploration,” she said.
The three blocks offered last year will essentially be the same as those being offered in December - Harrison Bay (some 66,420 acres), Gwydyr Bay North Shore (some 23,040 acres) and Storms (some 30,720 acres).
The SALSA tracts are “strategically placed around existing and producing” North Slope units, Feige said. And each resides within a 3-D seismic survey that was acquired under the state of Alaska Tax Credit Program, available through DNR for a modest fee.
The leasing team has put together an impressive set of data that go with the SALSA blocks, such as well history, including exploration targets, well logs, mud logs, test reports, core analyses, 2-D seismic, paly slides, paleo analyses, geochem, maps, well cuttings, lease bidding history on tracts within each area, and references to previous partnering that companies have done in the area.
“This kind of availability of data is catching industry’s attention,” Feige said.
Touting recent, big seismic surveys The commissioner pointed to maps showing permitted and large 3-D seismic surveys, some of which were shot recently, and others scheduled for next winter.
The Great Prudhoe Bay survey “sets the tone for what is possible,” Feige said. “This is Prudhoe Bay. We have been producing there for more than 45 years and now today … we’re applying new seismic technology and we’re going to produce pools of undeveloped oil. And this tells the world that our conventional resources endure for the long haul.”
The Kuukpik 3-D survey just east of the Armstrong/Repsol Horseshoe discovery and this year’s successful drilling by their new area operator Oil Search, “is showing the world what Alaska’s North Slope can do … defining what the Nanushuk play type, those Brookian discoveries, can actually become.”
She also referenced the “massive” offshore Barrow Arch 3-D survey, the Staines 3-D survey abutting the ANWR 1002 area and the large 1002 area survey SAExploration is looking to shoot next winter.
These are the “application of new technology on a grand scale,” Feige said. “You don’t make these kinds of multi, multi-million-dollar investments if Alaska isn’t on the map.”
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