Latest Nenana Basin well is dry

Tough break for Doyon and Cook Inlet Region, partners in the latest well in the Nenana Basin, Totchaket #1. The well is 20 miles north of the city of Nenana. Drilling to 11,225 feet was completed July 5, but no commercial oil or gas was found. In its monthly newsletter to shareholders CIRI said, “While Totchaket #1 did not discover commercial quantities of gas or oil, the well encountered multiple gas shows and CIRI continues to believe the basin holds considerable natural resources,” CIRI said in a statement, trying to be upbeat. The well will be permanently plugged and abandoned. Doyon, which was operator on the project, has not made a statement. This the fourth test well drilled in the basin in recent years, with Doyon in the lead on all four.

Caelus tight on Smith Bay plans

Caelus Energy is keeping its plans for another Smith Bay appraisal well tight. State agencies say the company has filed no plans for this upcoming winter drill season in Smith Bay. Reports are Caelus is still working to raise funds. The recent sale of Caelus’ leases southeast of Prudhoe Bay to Eni Oil and Gas may help. However, another test well, hydraulic fracturing and flow test at the remote Smith Bay site will be costly, maybe in the $100 million range. Caelus did a very thorough seismic mapping of the prospect last winter so there’s more information for potential investors. We hear the Apollo group, which financed earlier work, is no longer be able to help. Meanwhile, the litigation over the state’s proposed bonding plan for unpaid tax credits, which might help Caelus, is still dragging out in court.

Oil and gas employment level

Oil and gas employment held steady in August at compared with July, at 9,400, but was 400 down from August 2017, state labor economists said. The industry is about 5,000 jobs down from its peak in 2015.

Moose Pad on track for startup

Hilcorp Energy will begin development drilling on its “Moose Pad” heavy oil project on the North Slope in November and expects to have first production by the end of December, company officials said in a briefing. The project is expected to reach 10,000 barrels per day production in 2019 and over 20,000 barrels per day in 2020. Moose Pad will triple Hilcorp’s production of the thick, viscous fluid. Hilcorp is now producing about 10,000 barrels per day of viscous oil from the Schrader Bluff formation, a part of the Milne Point field, which produces mostly conventional oil. Schrader Bluff oil is similar to West Sak oil produced in the nearby Kuparuk River field. Schrader Bluff and West Sak oil are both in the range of 19 degrees API.

Hilcorp is also experimenting with a polymer flood procedure that it hopes will loosen the thicker oil, and improving recovery from the large oil resource in place. Schrader Bluff is now expected to produce about 10 percent of the oil in place, and the company hopes the polymer can boost that to 25 percent recovery.

Liberty project producing by 2023?

Hilcorp is also continuing development planning for Liberty, a larger $1 billion nearby project in offshore Beaufort Sea waters, which will produce 60,000 barrels per day of conventional light oil when it goes into operation, which is expected in 2023. About 60 to 80 will be employed in drilling. Production will require about 30 to 50 people, Hilcorp said. Liberty is in federally-owned Outer Continental Shelf waters. The U.S. Bureau of Offshore Energy Management issued a Final Environmental Impact Statement for Liberty Aug. 31 and a federal Record of Decision is expected in mid-October. That will clear the way for final federal permits for the project. Liberty is 15 miles east of Prudhoe Bay and is six miles offshore and in 19 feet of water. The deposit is now estimated to hold 80 million to 130 million barrels of recoverable oil.

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