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Vol. 24, No.43 Week of October 27, 2019
Providing coverage of Alaska and northern Canada's oil and gas industry

Borealis is gearing up

Company plans North Slope Brookian exploration in NPR-A and south of Badami

Alan Bailey

for Petroleum News

Borealis Alaska Oil Inc, the company that is a re-brand of NordAq Energy, has set its sights on some new exploration on Alaska’s North Slope. The company is focusing on two areas, one in the National Petroleum Reserve-Alaska and the other in the more easterly part of the Slope, to the south of the Badami oil field, Richard Garrard, Borealis chief technical officer, told Petroleum News in an Oct. 11 interview. Both areas have prospects in the Brookian sequence, the youngest of the petroleum bearing rock sequences in the region and the sequence that holds recent major oil finds in the Nanushuk and Torok formations. Findings from wells drilled quite a few years ago point to the likely existence of light oil in the prospects, Garrard said.

NordAq had previously formed a joint venture with Golden Eagle Petroleum Ltd. for ownership of both sets of leases, with NordAq having a 30% interest. Following a negotiated settlement, Borealis now holds a 100% interest in 70 leases covering 280,633 net acres in federal land in the NPR-A and in state land to the east. However, the company is seeking joint ventures, to share the cost and risk of the proposed exploration work.

“We’re actively talking to a number of companies right now that are interested,” Garrard said.

Borealis, rebranded from NordAq in June, is based in Anchorage, Alaska.

Castle Prospect Trend

The NPR-A leases lie on what Borealis refers to as the Castle Prospect Trend, a series of six individual prospects in the lower Nanushuk, directly analogous to the geologic setting for major recent oil discoveries at Pikka and at ConocoPhillips’ Willow discovery. The Castle leases lie directly southwest of Willow. Borealis is now the second largest lease owner in the NPR-A, after ConocoPhillips, Garrard said.

The Nanushuk finds lie in deltaic sands deposited on the shelf edge of an ancient marine basin. With the influx of massive quantities of sediment into the basin, the basin edge moved west to east over time, leaving a series of distinct sigmoidal sand bodies, each of which has the capability to form an oil reservoir. The Castle Prospect Trend contains sand bodies of this type. Moreover, seismic data indicate that the more easterly of these bodies, referred to as the Castle East prospect, lies in the same major sand body as the Harpoon prospect that ConocoPhillips has recognized to the north of the Borealis leases, Garrard said.

“We own a number of leases within that opportunity: one in the middle and three down at the southern end,” he said.

Garrard commented that NordAq had recognized the potential of the trend and had obtained leases in the area three years before ConocoPhillips announced the Willow discovery.

Modern 3D seismic data are key to identifying these new exploration opportunities, with analysis of the data enabling the mapping of subsurface details while also enabling assessments of reservoir quality and possible fluid types in the reservoir, Garrard emphasized.

Inigok well

The drilling of the Inigok No.1 well in the Castle trend area many years ago by the U.S. Geological Survey and Husky Oil points to a strong possibility of finding oil in the trend. The well was drilled very deep, to around 20,000 feet, to test for oil in the Ellesmerian sequence, the rock sequence that hosts the main oil reservoir for the Prudhoe Bay field. But the upper part of this well, down to a depth of about 4,000 feet, encountered sands with gas shows, Garrard said. These gas shows had heavy to light gas ratios indicative of the presence of light oil in the Brookian rocks of the region. The oil that ConocoPhillips found at Willow was light, with an API gravity of 40 to 44 API, Garrard said.

The presence of the Inigok well provides another benefit for exploration of the Castle trend: The drillers back in 1978-79 built a large gravel pad and a 6,500 foot runway to support their operations. The Bureau of Land Management has subsequently maintained these facilities as the Inigok Operations Center. And companies exploring in the area can use this center as an operations base, thus obviating the need to construct an ice pad or ice runway.

“It really does help, because there’s not a lot of infrastructure as you go west,” Garrard said. “That can make drilling operations and seismic operations much cheaper.”

Equipment would be transported to the Inigok Operations Center by snow road from the central North Slope, he said.

Drilling potential

But, once the equipment is located at Inigok, it should be possible to drill several wells relatively quickly. Testing the Brookian prospects only requires drilling to depths of around 4,000 feet, with a single well perhaps taking around a week to drill, Garrard said.

So, Borealis has planned and is in the process of staking four Castle trend drilling sites, in what it refers to as its Castle North prospect. Drilling would start in the more northerly of the sites in the prospect. The tentative plan is to drill this first well and potentially a second well to depths of about 4,000 feet at Castle North in the winter of 2020 to 2021, once permitting and preparations for the drilling have been completed, Garrard said.

The intent is then to drill the Castle East and Castle Central lower Nanushuk prospects in the winter of 2021-22. These wells would need to be drilled to depths of around 4,800 feet.

Great Owl Prospect Trend

Borealis refers to the area of its leases to the south of Badami, to the west of the western border of the coastal plain of the Arctic National Wildlife Refuge, as the Great Owl Prospect Trend. Prospects in this trend, while also Brookian in age, are geologically different from those in the Castle trend. The Great Owl prospects lie in layered sandstones, referred to as turbidites, in the Canning formation. The turbidites, laid down on the floor of a deepwater basin, are analogous to the reservoir rocks at Badami.

And, as in the Castle trend, there is evidence from a previous well, the West Kavik Unit No. 1 well, drilled by Texaco in 1969, that there is light oil in the Canning formation at Great Owl. That well was again targeting deep rocks in the Ellesmerian but encountered significant shows of light oil in the Canning.

Advantageous location

The potential reservoir rock at Great Owl is directly analogous to the Badami field reservoir. But, whereas oil production at Badami has proven challenging, the location of possible Great Owl reservoirs, more in the axial region of the marine basin in which the potential reservoir sands were deposited, is advantageous: There should be bigger basin-floor rock sequences, with more stacked reservoirs, Garrard said.

“That’s exactly what you see from the West Kavik Unit No. 1,” he said.

Moreover, not only did the Kavik well encounter plentiful quantities of light oil, but the reservoir section was over-pressured. This suggests that there would be pressure to help drive oil from a reservoir rock to the surface, Garrard said.

And the low density of the oil should aid production, even if reservoir rocks are compartmentalized. Elsewhere on the North Slope people have found that if a challenged reservoir holds light oil, modern drilling and completion technologies can enable oil production at commercial rates, Garrard said. He said that reservoir modeling for the Great Owl trend supports the likelihood of commercial flow rates from production wells.

Following a comprehensive petrophysical analysis of data, including information from well logs, well test results and geologic samples, Borealis has identified a number of subsurface zones where commercial oil production looks possible, Garrard said.

And the area is just 25 miles south of existing oil infrastructure at Badami.

Garrard said that Borealis has licensed all of the available 2D seismic data for the Great Owl area and would like to acquire 3D seismic. TGS and SAE conducted field studies this summer, looking at archaeological sites, as a precursor to possible 3D surveying operations next winter, he said.

Smith Bay divested

NordAq had interests in leases in Smith Bay, off the western end of the North Slope, where Caelus Energy Alaska made a major oil find in 2016. However, Borealis has divested of its Smith Bay assets, having determined that the logistical costs of operating in that area are too high for a relatively small company, Garrard said. Also, although NordAq had conducted exploration activities in the Cook Inlet region, Borealis is now focusing on the North Slope rather than the Cook Inlet, he said.

Garrard commented that the presence of NordAq, now Borealis, in the Alaska oil industry represents a trend towards activity by smaller oil companies seen in a number of petroleum basins around the world.

“New companies with new ideas and more activity are needed to stimulate fresh exploration and hopefully new discoveries,” Garrard commented, while also reflecting on the success of tax incentives in encouraging wildcat exploration in regions faced with declining oil production.

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