Great Bear Pantheon spud its first production well on Alaska’s North Slope the evening of July 6 using Nabors 105AC drill rig.
The Alkaid 2, a horizontal long-term test well, marks the company’s possible transition from explorer to producer. If successful at Alkaid 2, Great Bear Pantheon will truck the produced oil to Pump Station approximately 20 miles north of Alkaid and sell the produced oil to a nearby North Slope facility.
The first horizontal wells drilled on the North Slope were drilled by BP Exploration (Alaska) starting in the 1990s, and the technology has been used ever since on the Slope.
Pantheon Resources is an AIM listed oil and gas company with 100% working interest in all of its oil projects spanning 153,000 acres adjacent and near to the Dalton Highway and Trans Alaska Pipeline System, or TAPS, which are the main transportation highway and export pipeline. Pantheon’s acreage is operated by affiliate Great Bear Pantheon.
Patrick Galvin, formerly commissioner of the Alaska Department of Revenue, is chief commercial officer and general counsel for Great Bear Pantheon.
Phased development
Because of its close proximity to the 800-mile trans-Alaska oil pipeline and the Dalton Highway, Pantheon said the Alkaid accumulation is ideal for a phased development, which would minimize upfront capital expenditure and allow for future capital needs to be partly funded through production revenues, yielding higher internal rates of return.
“As our first horizontal well, Alkaid 2 is an important operation for Pantheon. The long-term production test through the horizontal section will define the resource and aid the understanding and future development potential of Alkaid. But most importantly, if successful, it will begin generating revenue for the company,” said Jay Cheatham, CEO of Pantheon Resources.
While the company believes the best well design to exploit the Alkaid anomaly would involve 8,000-plus foot lateral sections, in this first well Great Bear Pantheon will adopt a more conservative approach with a shorter lateral to minimize operational risk.
According to a July 7 Pantheon press release the Alkaid 2 well will assess three “impactful objectives” over multiple formations:
1. Production testing a proven oil formation encountered in Alkaid 1, which is approximately 4.5 miles from Alkaid 2.
2. Exploring the deeper potential for oil in that zone.
3. Appraising an extension of oil discovered in the Shelf Margin Deltaic, or SMD, at Alkaid 1 and Talitha 1.
Resource estimates
Pantheon’s resource estimates for the Alkaid horizon are as follows:
* Oil in place 900 million barrels of oil.
* Recoverable resource: 90-135 million barrels.
Alkaid 1 tested an average of 108 barrels of oil per day via a small “through-tubing single frac,” which perforated 6 feet of the 240 foot net pay interval, Pantheon said.
Alkaid 2 will test this same zone through a long horizontal section accessing several thousand feet of oil bearing section.
Exploration potential
According to Pantheon’s July 7 release Alkaid 2 has significant exploratory potential immediately below the total depth at Alkaid 1. As part of the current drilling program Great Bear Pantheon intends to evaluate the extent of this deeper oil column.
Alkaid 1 was terminated within the oil zone at a time when regional flooding of the Dalton Highway occurred. Based on seismic and other analytical analysis, the company believes the Alkaid horizon's oil zone is substantially thicker than drilled to date, offering the potential for additional resource growth.
Appraisal of SMD
Great Bear Pantheon’s recent oil discovery at Talitha A in the Shelf Margin Deltaic formation has “upgraded the potential for the SMD to produce oil at the Greater Alkaid location, as well as at the Talitha project,” Pantheon said.
The company estimates the SMD contains 2.6 billion barrels oil in place and a contingent resource of 404 million barrels.
In a success case, the Pantheon believes a large portion of this resource could be developed from the Dalton Highway which would represent a considerable near term development opportunity, especially if combined with the deeper oil zone utilizing the same production infrastructure.
“We have discovered a lot of oil on the ANS across our Theta West, Talitha and Greater Alkaid projects which are estimated by management to contain over 23 billion barrels of oil in place and over 2.3 billion barrels of recoverable resource in those horizons that have flowed oil, and Alkaid 2 could add to these estimates,” Bob Rosenthal, technical director for Pantheon, was quoted as saying in the July 7 release.
- KAY CASHMAN
