Providing coverage of Alaska and northern Canada's oil and gas industry
August 2017

Vol. 22, No. 32 Week of August 06, 2017

Malamute files contingency plan for Umiat; no immediate drilling

Malamute Energy Inc. the new operator of the Umiat oil field, adjacent to the Colville River on the eastern side of the National Petroleum Reserve-Alaska, has filed a revised oil spill contingency plan for the potential field development. The plan envisages the possibility of drilling up to nine new wells in the field, but Malamute says that drilling would not start before the end of 2018, at the earliest.

Malamute acquired leases for the field early this year as part of the fallout from the bankruptcy of Linc Energy, a subsidiary of which previously operated the field. The revised contingency plan appears to involve relatively minor modifications to Lincís plan. Malamute will require approval from the Alaska Department of Environmental Conservation for the plan changes. DEC requires comments on the plan by Aug. 28.

The fact that Malamute has now filed a revised Umiat contingency plan for approval presumably confirms the companyís intent to drill in the field. However, clarification of what wells the company plans to drill and when the drilling may take place will presumably depend on the company filing a plan of development for the field. When Petroleum News went to press Malamute had not responded to a request for further information about the situation.

Large but remote field

Although the Umiat field was discovered by the U.S. Navy in 1946 and is one of the larger undeveloped fields in Arctic Alaska, the field has yet to be developed, primarily because of its remote location, many miles from the nearest road or oil infrastructure. About 100 miles of Arctic tundra lie between the field and the corridor of the Dalton Highway and the trans-Alaska oil pipeline.

But the field reservoir contains relatively valuable light oil. And the reservoir lies within the Nanushuk formation, a rock unit that has attracted much interest of late because of major oil finds in the formation in the Colville River Delta region. The reservoir rocks at Umiat are relatively shallow and partially within the permafrost zone, factors which, while enabling relatively shallow drilling, also present challenges in that the oil is relatively cold for production and transportation.

Over a number of years consultancy firm Ryder Scott Co. has conducted several assessments of the field. In the latest of these assessments, conducted in 2015 after the 2014 fall in oil prices, the consultancy estimated a 50 percent probability of nearly 99 million barrels of oil being economically recoverable and a 10 percent chance of more than 154 million recoverable barrels. Based on previous assessments, the total volume of oil in place in the field appears to be substantially higher than these recoverable volumes.

Linc completed two wells in the field as part of its evaluation of the fieldís potential. The second of these wells, a horizontal well completed in early 2014, achieved a sustained flow rate of 250 barrels per day of oil and a peak rate of 800 barrels per day. Linc said that the use of gas drive could push the production rate as high as 2,000 barrels per day.

Development plans

At various times Linc proposed different development plans for the field. Although one plan envisaged the drilling of approximately 150 development wells from 13 drilling pads, a more recent plan, published in October 2015, involved drilling 35 wells from five pads.


Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] --- http://www.petroleumnews.com ---

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©2013 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.