88 Energy started drilling its Merlin 1 exploration well in the National Petroleum Reserve-Alaska on March 10, but because of delays caused by a Biden executive order, the second Peregrine project well, Harrier 1, is “unlikely” to be drilled this winter, the company said in an operations update.
Merlin 1, which is being drilled with Rig 111 by one of the company’s Alaska subsidiaries that is headed by Alaska geologist Erik Opstad, will initially be drilled to 1,500 feet, then surface casing will be installed and the blow out preventer system tested, all of which is expected to take approximately one week.
“The well will then be deepened through the target horizons in the Nanushuk formation to a maximum total depth of 6,000 feet,” the company said. “Logging while drilling and mudlogging will provide initial indications as to the prospectivity of the well during this part of the operation, which is expected take three to five days.”
Next, “a sophisticated wireline logging suite” will be run, including sidewall cores and downhole sampling, which will take three to five days.
“If the results from the wireline logging are encouraging, then the well will be completed with casing and a flow test conducted,” the company said.
“As part of a standard cost review, 88E’s share of the cost of Merlin 1 has been revised to US$4m (increased from US$1.4m). The main contributing factors to the cost increase are delays associated with the Executive Order regarding the issuance of the Permit to Drill; costs associated with shutdown and re-start whilst clarification was attained regarding the Executive Order; delays associated with cold weather and the subsequent knock on to mobilization costs as a result of expediting activities to meet the operational timetable. The company’s current cash position is US$13m, which more than funds its share of the drilling of Merlin 1 and the company’s other planned activities,” 88 Energy said.
In its 2020 annual report, 88 Energy’s non-executive Chairman Michael Evans said March 9 that Merlin 1 is “targeting 645 million barrels of gross mean prospective resource” and Harrier 1 would target a gross mean prospective resource of 417 million barrels.
In the chairman’s letter, Evans praised Alaska’s North Slope, saying its source rocks “have been described as unbelievably rich and prolific, having generated and expulsed about 1.5 trillion barrels of oil. Yet only a small fraction of that 1.5 trillion barrels has been found, leaving vast potential remaining to be discovered.”
“Access to existing infrastructure, a very supportive and stable state government and significant exploration upside,” are three of the things 88 Energy likes about the state, Evans said, noting 88 Energy operates 444,517 net acres on the North Slope.
“Our prospective land holding is now of a size one would normally associate with the big end of town and provides continued scope to attract partners,” he said.
12 states sue Biden on climate change order
A coalition of 12 states is suing President Joe Biden’s administration over a climate change executive order that they say has the potential to have serious economic impacts across the country through the expansion of federal regulatory power.
The lawsuit, which is being led by Missouri Attorney General Eric Schmitt, was filed on March 8 in federal court in the Eastern District of Missouri.
State attorneys general from Arkansas, Arizona, Indiana, Kansas, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Tennessee and Utah also joined the action. As of 4 p.m., March 10 there was no response from a March 9 query as to whether the State of Alaska would be joining the legal action.
The lawsuit claims Biden’s Executive Order 13990, dubbed “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis” and signed hours after his inauguration on Jan. 20, does not have the authority to establish amounts for the “social cost of greenhouse gases” to be used in federal regulations.
According to a March 8 report in The Epoch Times, the lawsuit argues that “Biden’s order could inflict trillions of dollars of damage to the U.S. economy, while saying that the executive order threatens the Constitution’s separation of powers doctrine.”
“In practice, this enormous figure will be used to justify an equally enormous expansion of federal regulatory power that will intrude into every aspect of Americans’ lives - from their cars, to their refrigerators and homes, to their grocery and electric bills,” the lawsuit reads.
According to the White House, Biden’s Jan. 20 order is, among other things, designed to “conserve our national treasures and monuments.”
“Where the federal government has failed to meet that commitment in the past, it must advance environmental justice,” the order said.
The order directs all federal agencies and departments to review and “take action” to address the Trump administration’s climate-related executive orders, the Times reported.
Alaska Department of Natural Resources Commissioner Corri Feige expressed concern about the potential impacts of EO 13990 on Alaska’s oil and gas industry when addressing the Senate Resources Committee on Jan. 27 (see story in the Feb. 14 issue of Petroleum News titled “Sucking all the air out”).
One directive in the order is to listen to “the science,” Feige noted. “Largely those policy initiatives in the Biden administration are focused on climate change and climate crisis,” she told committee members.
“For me, I think where we’re going to see the greatest amount of discussion - and this is certainly something that the state is going to be paying extremely close attention to - is this discussion of listening to the science. The question is, who gets to decide what is the science, and what science is robust enough?”
Feige said a lot of questions exist around climate change science.
- KAY CASHMAN
