Providing coverage of Alaska and northern Canada's oil and gas industry
May 2018

Vol. 23, No.21 Week of May 27, 2018

The Explorers 2018: Accumulate shooting seismic in advance of drilling

88 Energy subsidiary commissioned the Icewine 3-D survey to provide information and induce partners for 2019 drilling program

Eric Lidji

for Petroleum News

Accumulate Energy Alaska Inc. is stepping out at its Icewine project.

The subsidiary of Australian independent 88 Energy Ltd. is following two seasons of drilling near the Dalton Highway with a series of permitting efforts this year designed to extend its exploration operations in the central North Slope a little farther to the west.

Through a joint venture with Burgundy Xploration LLC, Accumulate began permitting two exploration wells and commissioned a 3-D seismic survey west of the haul road.

The joint venture began preliminary permitting on the Bravo No. 1 and Charlie No. 1 wells in mid-2017. The wells would be approximately 25 miles west of Franklin Bluffs. The company said it would drill the approximately 11,000-foot vertical wells “to test stacked conventional objectives” within the Seabee formation using the Arctic Fox 1 rig or a similar mobile land drilling rig. The target, according to the company, is the same target identified in surrounding exploration wells and produced at the Meltwater satellite.

Bravo No. 1 was proposed for ADL 393048, ADL 393049, ADL 393058 and ADL 393059. Charlie No. 1 was proposed for ADL 393043, ADL 393044, ADL 393052 and ADL 393054. The nearest previous exploration wells are the Malguk No. 1 well that BP Exploration (Alaska) Inc. drilled in 1991 and the Smilodon 9-4-9 and Mastodon 6-3-9 wells that Chevron drilled as part of its White Hills exploration program in early 2008.

Chevron called its program “tight” at the time and declined to provide results, but the well files have since passed into the public record. The Smilodon 9-4-9 and Mastodon 6-3-9 wells were approximately 5,000 feet deep and both targeted Brookian natural gas.

Accumulate initially planned to drill Bravo and Charlie in early 2018 and began permitting ice roads in late 2017. But the company later postponed the wells until 2019 and has described Bravo and Charlie as part of a multiyear exploration campaign.

The current seismic program is the start of that campaign. Accumulate commissioned Geokinetics Inc. to conduct the Icewine 3-D survey covering some 200 square miles in an area of the central North Slope some 40 miles southwest of Deadhorse and 12 miles west of the haul road. According to permitting documents, Geokinetics would mobilize equipment from its Deadhorse facility and would mostly use existing roads and tundra travel, but might build a temporary ice pad and use the nearby Franklin Bluffs pad.

The goal of the seismic program, according to 88 Energy, is to determine drilling locations for the first half of 2019 and also to begin farming out acreage. The Icewine 3-D survey program began on Feb. 7 and was expected to last approximately 45 days.

Reducing risk

88 Energy and Burgundy Xploration formed their joint venture in November 2014.

Accumulate drilled the 11,600-foot Icewine No. 1 vertical well in the Franklin Bluffs region in late 2015 and acquired 2-D seismic information over its leasehold in early 2016.

Icewine No. 1 tested the potential of the HRZ shale and also conventional targets. The company initially planned to return to the well to drill a lateral with multistage fracturing but later abandoned that project in favor of drilling the 11,200-foot Icewine No. 2 well.

The vertical well would be cheaper and simpler than a lateral and would provide a wider array of rig options, saving some $5 million in operating costs, according to the company.

Accumulate began drilling Icewine No. 2 in early 2017, reaching a target depth of 11,450 feet in mid-May. A completion program was designed to determine whether complex artificial fracture systems could be created within the HRZ. “These complex fracture systems are evident in the best performing shale plays as they result in maximized stimulation rock volume, which directly impacts potential flow rates,” the company said.

A flow-test began in late August. By the time the company shut-in the well for winter in mid-September, Icewine No. 2 had produced an average of 1.85 thousand cubic feet per day of gas. The results were “not considered representative of potential flow rate or composition of hydrocarbon in the reservoir,” according to 88 Energy. The company said it hoped to optimize and re-initiate flow testing sometime this spring using artificial lift.

After processing its 420-mile 2-D seismic acquisition over the Icewine area, 88 Energy identified some 20 conventional oil prospects in the Brookian sequence, according to 88 Energy. The company estimated that five of these prospects - Alpha, Bravo, Golf, India and Juliet - might hold a combined mean volume of 758 million barrels of oil.

The company narrowed its immediate focus at the time to Alpha and Bravo, although permitting applications from mid-2017 suggest that the company later swapped Charlie for the Alpha prospect. The Bravo prospect was the largest of initial five prospects, with a mean estimate of 273 million barrels of oil, according to internal company estimates.

The swap also suggested that the joint venture was localizing its efforts. 88 Energy has divided Icewine into three fairways: Eastern, Central and Western. The Alpha prospect is in the Eastern region. The Bravo, Charlie West and Charlie 4 Way are in the Western.

According to 88 Energy estimates released in November 2017, after reprocessing the 2-D seismic information, Bravo could contain a gross mean of 232 million barrels, and the two Charlie prospects could contain a combined gross mean of 44 million barrels. The upcoming seismic program could potential provide the company with new priorities.

All told, the estimate counted gross mean resources of 1.891 billion barrels at Icewine.

Following acquisitions in the latter half of 2017, the joint venture held approximately 460,000 acres in Alaska. In its annual report, 88 Energy praised the nature of these leases by writing, “Unlike the lower 48 States, these leases have an attractive 10-year term with no mandatory relinquishment and a low 16.5 percent base royalty. Our prospective land holding is now of a size one would normally associate with the big end of town and provides scope to introduce drilling partners once prospects have been defined.”

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