Caelus Energy Alaska LLC has made a light oil discovery of 6 billion barrels in place off Alaska’s North Slope.
Based on the outcomes of two wells drilled by Caelus earlier this year on its Smith Bay state leases, and 126 square miles of existing 3-D seismic data, this estimate was calculated, Caelus said in a press release on October 4.
Caelus-Tulimaniq No.1 and step-out Caelus-Tulimaniq No.2 well encountered Gross hydrocarbon columns of more than 1,000 feet in both the with respective net pay of 183 and 223 feet. As a result of the seasonal time constraints, the company could not run the flow tests in the well, but Caelus said that extensive sidewall coring and subsequent lab analyses confirm the existence of reservoir-quality sandstones holding light oil ranging between 40 to 45 degree API gravity.
Company also predicts that the Smith Bay fan complex might possess more than 10 billion barrels of oil in place when adjoining acreage is included. The Smith Bay evolution could prospectively provide 200,000 barrels per day of highly mobile and light oil which should raise the Trans-Alaska Pipeline System (TAPS) throughput volumes and minimize the average viscosity of oil through the pipeline, extending the long-term viability.
According to the favourable fluids the reservoir accommodates, Caelus anticipates to attain about 30 to 40 percent recovery. It also reported that the supplementary drilling and seismic should improve oil-in-place estimates via delineation of undrilled fan lobs and channel complexes imaged on the original 3D seismic.
CEO Jim Musselman quoted “the discovery has the size and scale to play a meaningful role in sustaining the Alaskan oil business over the next three to four decades.” He also expressed that the discovery is a solid proof that Alaska’s state tax credit programs are functional, adding that he was unsure that the company would have explored Alaska without these programs.
Tudor Pickering and Holt analysts were persuaded to observe the huge discovery of conventional oil in shallow waters of Alaska, but such a discovery prevails to be an exception to the rule, analysts stated in an October 5 note during their research. They will focus the market on Repsol’s exploration program at the Pikka unit on the North Slope this winter to supplement to its 1.4 billion barrels discovered hitherto, which is onshore and much closer to existing North Slope producing infrastructure, analysts added.
Analysts believe that “pertinent that this discovery was made by an E&P and not an IOC, and the CEO of Caelus has a strong exploration track record as one of the founders of Kosmos [Energy].”
Caelus is a private, Dallas-based exploration and production (E&P) firm founded in 2011 by Jim Musselman. The company is operator of the Oooguruk Unit on Alaska’s North Slope. Caelus is currently planning an appraisal program that will include drilling and the acquisition of new 3-D seismic data. The company is also studying and planning the facilities buildout which will process and transport oil to TAPS.