Drill, baby, drill.
Via ADN:
A Spanish oil company working with a small explorer in Alaska announced Thursday what it’s calling the largest onshore U.S. oil discovery in three decades.
The discovery is near the northeastern edge of the National Petroleum Reserve-Alaska on leased state land.
Repsol, a minority partner in a deal with Denver-based Armstrong Oil and Gas, announced that two wildcat wells drilled this winter at a prospect known as Horseshoe discovered bands of light oil, a find that extends the already huge Nanushuk play by an additional 20 miles to the south.
Nanushuk is in the Pikka Unit, a chunk of leases held primarily by Armstrong to the north and east of the village of Nuiqsut. The prospect is believed to continue to the south of the village.
“Repsol and partner Armstrong Energy have made in Alaska the largest U.S. onshore conventional hydrocarbons discovery in 30 years,” Repsol said. “The Horseshoe-1 and 1A wells drilled during the 2016-2017 winter campaign confirm the Nanushuk play as a significant emerging play in Alaska’s North Slope.”
Because exploration drilling at Horseshoe has taken place only recently, it is extremely unlikely that estimates associated with the wells have been independently confirmed by a third-party company, said David Houseknecht, a geologist with the U.S. Geological Survey’s Energy Resources Program for Alaska.
In late 2015, the companies announced the Nanushuk discovery as a major new opportunity in Alaska, after a third-party engineering firm, DeGolyer and MacNaughton, calculated “contingent” oil reserves to range between 497 million barrels and 3.76 billion barrels. The companies have said the discovery could produce at least 120,000 barrels of oil daily, potentially providing a much-needed production boost to Alaska’s dwindling oil economy.
“The contingent resources currently identified in the Nanushuk play in Alaska amount to approximately 1.2 billion barrels of recoverable light oil,” Repsol said.
The 1.2 billion barrels includes oil in the existing Pikka unit and the Horseshoe prospect combined, said Kristian Rix, a Repsol spokesperson reached Thursday in Madrid, Repsol’s headquarters.
Rix would not say how much daily oil production might increase from the 120,000 barrels associated with Pikka, now that the size of the play is much larger.
“I wouldn’t want to put a figure on that,” he said. “We have to make sure we have our i’s dotted and our t’s crossed before we do that.”
In the coming months, the company will analyze the prospect and consider development scenarios for Horseshoe, he said.
“We’ve scored a good goal in the game, and we have to play the rest of it,” he said.
The Alaska Legislature currently is debating whether to increase North Slope oil production taxes and decrease tax credits to help the state battle a fiscal crisis brought on primarily by low oil prices. The oil industry opposes the changes.
HT: puhiawa