Oil prospect gets even bigger

The Icewine oil prospect on the southern North Slope keeps growing.

Australia-based 88 Energy Ltd. said in an Oct. 18 release that it has identified five conventional “leads” on its Slope leases that could hold 758 million barrels of recoverable oil.

The mean resource estimate is based on seismic data acquired this year and last, according to the company release.

88 Energy is the majority owner in the Icewine project, a continuous tract of 271,000 acres of state leases about 35 miles south of Deadhorse bisected by the Dalton Highway.

A small Houston-based independent, Burgundy Xploration, is 88’s minority partner at Icewine. The companies are operating the prospect as Accumulate Energy, a wholly owned subsidiary of 88 Energy.

Icewine’s initial target was oil in the HRZ shale zone, an unconventional Brookian play.

The partnership finished drilling the Icewine No. 1 exploration well in December 2015, focusing on unconventional plays with great success. The international reservoir appraisal firm DeGoyler and MacNaughton has assessed the Icewine unconventional oil resource at 985 million barrels.

An internal 88 Estimate put a 90 percent probability of at least 1.6 billion barrels, according to a September presentation to investors.

88 Energy Managing Director David Wall said in a release that the HRZ shale remains the partnership’s primary target, but the conventional seismic results “significantly exceeded our expectations.”

Accumulate plans to drill a second Icewine well to better delineate the unconventional prospect early in 2017.

“We expect the two recent billion-barrel discoveries in the Brookian sequence by both Armstrong Oil and Gas and Caelus Energy to be a catalyst for increased industry interest in the region,” Wall said. “Whilst not strictly analogous to the Brookian play potential at project Icewine, these discoveries highlight the significant conventional oil resource on the North Slope yet to be discovered through utilization of modern seismic technology.”

Wall referenced Caelus Energy’s Smith Bay prospect in a remote portion of the western North Slope, which Caelus recently announced as a 6 billion-barrel prospect. Armstrong is working to develop its 1.5 billion-barrel Nanushuk prospect near the Colville River delta.

Icewine is particularly attractive because of its location. Year-round access to the Dalton Highway could simplify development and ease the cost burden compared to other Slope projects.

Anchorage-based Great Bear Petroleum is also exploring shale prospects just north of Icewine.

Elwood Brehmer can be reached at [email protected].

10/26/2016 - 12:03pm