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Repsol Makes a Ringer at Horseshoe


Armstrong Energy and Repsol’s Horseshoe discovery in May 2017 marked the largest US onshore oil discovery in 30 years. Coupled with ConocoPhillips’ recently announced Willow discovery (300 MMbbls) in the Nanushuk earlier this year, the spotlight has once again turned on the Arctic Circle acreage.

The North Slope region, situated on the northern slope of the Brooks Range and stretching along the coastline of both the Chukchi and Beaufort marginal seas, contains the National Petroleum Reserve–Alaska (NPRA), as well as the Arctic National Wildlife Refuge (ANWR).
The region has a long track record. BP discovered the Prudhoe Bay oilfield on 26 December 1967. The field, which has produced over 12.5 Bbo since 1977, celebrated 40 years of production in June 2017.

Even now, Prudhoe Bay still stands as the third-largest oil field in the US at about 282,000-plus boe/d. Only Texas’ Eagle Ford Shale and Spraberry Trend are larger.

But Alaska’s output is slated to rise in light of recent discoveries.
In mid-January 2017, ConocoPhillips indicated that a new 300 MMbo discovery (‘Willow’) has been made in the federal National Petroleum Reserve-Alaska (NPR-A), with oil encountered in both the Tinmiaq 2 and Tinmiaq 6 exploration wells. The discovery was made in the Brookian Nanushuk Formation, the same formation in which Armstrong Energy and Repsol recently began developing a discovery in the Pikka Unit, estimated to be able to produce 120,000 bbls/d.

The Tinmiaq 2 well sustained a 12-hour test rate of 3,200 bo/d. Consequently, ConocoPhillips expects the recoverable potential of the resource to be over 300 MMbo. Appraisal work began in January 2017, along with acquisition of a 3D seismic survey.

The Willow Field could produce up to 100 Mbbls/d, with commercial output potentially starting as early as 2023. Tinmiaq 2 and 6 are located in NPR-A leases AA00081807 and AA00081808 respectively, part of the GMT Unit. The GMT Unit is operated by ConocoPhillips Alaska (78% WI + Op), with Anadarko Petroleum holding 22% equity.

Following ConocoPhillips’ Willow announcement in January, Repsol indicated in March that it had made a sizeable oil discovery: Horseshoe. Horseshoe 1 NFW and the subsequent Horseshoe-1A sidetrack were both drilled on ADL 392048 during the 2016-2017 winter drilling campaign. Horseshoe-1 was drilled down to a TD of 1,829m (1,774m TVD) and encountered over 45m of net oil pay in several reservoir zones in the Nanushuk section.

The Horseshoe-1A sidetrack was then kicked off and drilled to a total depth of 2,504m (1,472m TVD), encountering more than 30m (100 feet) of net oil pay, also in the Nanushuk. The contingent resources identified in Repsol and Armstrong Energy’s blocks in the Nanushuk play in Alaska could amount to 1.2-plus barrels of recoverable light oil.

As of yet, Repsol has not revealed test results for the Horseshoe discovery, but previous wells Qugruk 8 (Q-8; ADL 393024) and Qugruk 301 (Q-301; ADL 393021)—flowed 30° API gravity crude at rates of 2,160 bo/d and 4,600 bo/d, respectively. The Horseshoe discovery has extended the Nanushuk play over 32km (20 miles) south of the existing discoveries in the same interval in Alaska North Slope’s Pikka Unit, where the Repsol-Armstrong partnership has drilled 16 exploration and appraisal wells since 2012.

Alaska Field Production of Crude Oil

These recent discoveries may help to buoy Alaska’s lagging production, which has shrunk from a peak rate of 2.017 MMbo/d in 1987, to a quarter of that by 2016 (490,000 bo/d).

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