Great Bear drilling first North Slope shale test wells

Great Bear Petroleum is now drilling its first North Slope test well to assess potential for production of oil from shale formations in the region, similar to the way oil is being produced in the Bakken and Eagleford shale formations of the Lower 48 states.

The company’s first well is now being drilled about 15 miles south of the Prudhoe Bay field on the North Slope, said Ed Duncan, Great Bear’s president. The first core samples were taken July 1.

“We intend to take cores from three shale formations the well will penetrate,” Duncan said.

Duncan said it will take about three more weeks for the well to reach its planned target depth of about 10,500 feet. Great Bear will then move its rig, Nabors 105, operated by Nabors Alaska Drilling Co., to a second location about three miles farther south. Drilling will continue to move farther south, Duncan said.

“Our plan is to drill four wells this year and we believe we can achieve at least three,” he said.

The company will also do a multi-stage fracturing of the shale to test the flow of oil, Duncan said.

Normally, North Slope exploration wells are drilled in winter on ice pads but Great Bear is working this summer using previously-built gravel pads adjacent to the Dalton Highway, a road connecting oil fields in the area to Interior Alaska.

Halliburton, the oil services giant, has joined Great Bear as a partner in the North Slope shale test but Duncan declined to describe the natural of the companies’ relationship.

He did say Halliburton is “participating” in the current tests but that Great Bear, an Alaska-based independent company, is the operator of the project.

The shale formations being tested by Great Bear are the source rocks for the large conventional oil fields a few miles north, including the giant Prudhoe Bay, Kuparuk, Alpine and other fields that are now producing. Great Bear’s belief is that there is a substantial amount oil left in the rocks.

If the 2012 tests of the shale are successful, Duncan said the plan for 2013 is to drill several wells in a production pad along with a pilot processing facility. Oil produced would be shipped to Prudhoe Bay by truck and injected into the Trans Alaska Pipeline System.

Bob Swenson, Alaska’s state geologist and director of the Division of Geophysical and Geological Survey, said he believes substantial amounts of oil remain in the source rocks.

Paul Decker, chief of the resource evaluation section in the state Division of Oil and Gas, said in a recent presentation that Great Bear must test the brittleness of the North Slope shale to see whether it will fracture like shales in the Bakken and Eagleford, and also test the permeability of the rock, and how easy fluids can flow.

There are high hopes for Great Bear and its experiments with shale oil. If it works, it could lead to a major shale oil development across an east-west “fairway” of lands across the central North Slope, through an area south of the Prudhoe Bay and Kuparuk fields.

Conceptually, what Great Bear is planning, if the tests are successful, are gravel pads with several producing wells on each pad spaced several miles away and connected with roads and pipelines. Potentially the development could be very large, requiring several pads and roads.

One unknown is whether the traditional high costs of the North Slope will make shale oil development uneconomic, however.

11/08/2016 - 4:24pm