Savant Alaska LLC: expanding operations at Badami Field unit.

If at first you don't succeed, try, try again. That seems to be the case at the Badami Field on the North Slope, where for years, BP tried to recover what was originally estimated as 120 million barrels of oil from the difficult site. In 2010, however, a relatively new company to Alaska--Savant Alaska LLC--found a way to recover some of these fallow resources, and it is now using this same technology to continue in its quest to conquer the Badami sands.

With working interest partner ASRC Exploration LLC, a wholly owned subsidiary of Arctic Slope Regional Corp., Savant is making inroads into what was once considered an extremely challenging site. Discovered by Conoco in 1990, the first well in the Badami pool had an initial drill stem test in excess of 4,000 barrels a day. BP acquired the field in 1994 and began production in 1998, only to find that it couldn't meet its estimated production numbers. The company shut the field down in 2003, reopened it from 2005 to 2007, and then halted production again until entering into a farm-out arrangement with Savant Alaska and ASRC Exploration in the summer of 2008.

FARM-OUT AGREEMENT

The farm-out agreement obligated Savant and ASRC to apply new technology to the Badami sands pool and to explore for new oil in the Badami Unit. "Savant and ASRC were the first to drill a high angle or horizontal sidetrack well in the field, which we completed in 2010," said Gregory R. Vigil, president of Savant Alaska LLC. "It was the first application of this technology in the Badami Unit, and it enabled us to connect more of the producing reservoirs in the Badami sands formation." One of the difficulties at the Badami site is that the oil and gas available is found in a series of turbidite channels, which need to be better connected in order to allow more oil to be recovered.

Utilizing one of the vertical wells drilled previously by BP, Savant and its partner were able to drill a horizontal sidetrack well to better connect discontinuous sands. Since beginning production in late 2010, the company is now producing approximately 1,200 barrels of oil per day. The next step in the evolution of the redevelopment of the Badami sands pool is to hydraulically fracture stimulate a horizontal well to further increase recovery, which the company is hoping to implement in 2013.

The Middle Ellesmerian Kekiktuk formation, where Savant drilled its B1-38 Red Wolf exploration well, is a deeper and older geologic formation than the Badami sands originally developed by BE Although Savant did not achieve its objective in the Kekiktuk formation, it did make a discovery in the Killian sands and subsequently completed the well as the first commercial Killian sands production well in the state.

On Oct. 14, 2011, Savant agreed to take over as the operator of the Badami Unit from BP, with the transition completed on Jan. 7, 2012. "It was a natural progression for our company to expand our operating capabilities and focus in Alaska," explained Vigil, "just as it was a natural progression for BP to back away from the Badami Unit as they first started to do under the farm-out arrangement."

Savant now has a 67.5 percent interest in the wells, with ASRC Exploration owning the other 32.5 percent.

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EXPANSION PLANS

Savant has plans to expand their operations even further. The company is hoping to increase output by returning the 1-21 and 1-16 wells to production this year. "We currently have a rig in the field performing two work-overs on a couple of pre-existing wells to try to return them to production," Vigil says. "We are hoping that this will boost our production rate by 40 percent or so."

Savant will be installing artificial lifts into these two wells, which were not previously completed with artificial lift mechanisms.

Vigil said Savant is also moving a rig to the remote Red Wolf2 ice pad in the Badami Unit to drill a follow-up well to the B1-38 well that was drilled in 2010. "We are drilling a second well in this structure to further test the Kekiktuk formation," he said in March. "We are looking to drill the well in April, and will ideally know what resources are available by the end of that month."

While this is not Savant's first foray into Alaska, it is its most successful. The company originally came to Alaska in 2006 after picking up Foggy Island Bay leases. Its first exploratory well, located a few miles west of the Liberty prospect and called Kupcake 1, was drilled in 2008, but failed to uncover usable resources. Savant, which currently holds nearly 11,500 acres of state onshore and offshore leases, is headquartered in Castle Rock, Colo., and employs approximately 40 to 50 staff and contractors in its Anchorage office and on the North Slope.

While not a large company, Savant is aggressive in its pursuit of oil. "We are only the fifth production operator on the North Slope of Alaska, and because we're relatively small in relation to our peers, any positive developments that we have are very impactful to a company of our size," Vigil says.

The company is looking forward to growing its business in Alaska around the Badami Unit, where they can take advantage of the facilities and plant that they already have in operation. "We are targeting additional developments to feed our existing plant," Vigil says. "We don't need to develop grassroots projects because we already have existing facilities with unused capacity giving us a competitive advantage in the area."

Savant is the contract operator of the Badami Oil Sales Pipeline, a 30-mile pipeline that connects to the Endicott Pipeline and then on to the trans-Alaska oil pipeline. Savant and its working interest partner are in the process of taking over ownership of the Badami Oil Sales Pipeline from BE As eastern North Slope and offshore federal Beaufort Sea leases are developed, this pipeline could potentially play a much larger role in meeting future developers' infrastructure needs. Possible uses for the pipeline include transportation of liquid condensate from ExxonMobil's gas cycling and condensate production project at Point Thomson, and any oil that may be discovered at Shell's Camden Bay project.