88 Energy snares big Alaskan oil lease near Prudhoe Bay

Alaskan authorities have awarded 88 Energy the entire 10,291-square-kilometre Project Leonis lease area, south of the giant Prudhoe Bay oil field and north of its existing Phoenix operation, where the Hickory-1 well has recently been drilled.

The leases are now wholly-owned and held by 88 Energy’s Alaskan subsidiary, Captivate Energy Alaska. Captivate was declared the highest bidder for Leonis, which comprises 10 leases offered by Alaskan authorities as part of the North Slope Areawide 2022 Oil and Gas lease sale.

In the project area, more than 60m of prospective oil zones were found in the existing Hemi Springs Unit 3 well within the USB reservoir, with good porosity and oil shows over the interval. Leonis sits near existing oil fields including the Orion, Polaris, West Sak and Milne Point operations that all successfully exploit the reservoir.

88 Energy managing director Ashley Gilbert said: “Project Leonis benefits from proximity to infrastructure and services at Prudhoe Bay and Deadhorse, as well as an historical well that indicated oil shows and calculated pay in the Upper Schrader Bluff (USB) zone of interest. Importantly, the lease area is covered by an existing 3D data suite, allowing us to undertake detailed, informed analysis to properly understand the exploration opportunity.”

The company says its new tenements provide confirmation of a further, highly-attractive Alaskan exploration proposition and it plans to employ a suite of modern analysis techniques to further advance its project. Leonis is fully covered by the Storms 3D seismic data suite and contains the historical exploration well Hemi Springs Unit 3, which was drilled by ARCO in 1985.

ARCO’s drilling targeted the deep Kuparuk and Ivishak reservoirs which were the main producing intervals in the giant northern fields at the time.

88 Energy’s initial review and interpretation of the Storms 3D seismic data reveals what the company describes as a strong seismic-well tie and a clear seismic amplitude at the USB prospect level. The company is encouraged by a potential oil trapping mechanism bounded by faults on three sides with a dip on the fourth side.

Management is conducting further analysis to determine the oil potential of the leases and to help define a possible exploration program and timeline for Leonis.

The Prudhoe Bay oil field, which is close to Leonis on the north side, is the biggest in North America and was initially estimated to contain 25 billion barrels of oil and additional gas reserves.

The Milne Point oil field, also near Leonis, has benefited from new polymer flooding technology that has significantly increased projected oil recovery. Production forecasts for Milne after application of the technology have jumped from 21,000 to 40,000 barrels per day.

Leonis’ ideal location means oil buffs will be following 88 Energy with interest while the company also tests the Hickory 1 well on its Phoenix ground.

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