Booming Interest in Nanushuk: Major players explore the formation's production potential.

Author:Simonelli, Isaac Stone
Position:OIL & GAS

Both ConocoPhillips and Oil Search are optimistic about the potential of the Nanushuk Formation on the North Slope following the combined drilling of nine delineation wells over the winter in the Greater Willow and Pikka-Horseshoe units.

"Since taking on operatorship of the Alaska assets in early March 2018, we have gone from 3 to over 130 full-time team members and undertaken a two-rig, four-well exploration appraisal drilling program while continuing to advance the Pikka Development project," Oil Search Alaska President Keiran Wulff says.

History and USGS Data

Although oil was discovered at the formation by the Navy in the 1940s, activity in the Nanushuk Formation has been limited.

Prior to 2015, about 150 exploration wells had penetrated the Nanushuk Formation and Torok Formation (which lies 2,000 to 3,000 feet below the Nanushuk), yet oil production was established in just one oil pool with less than 10 million barrels of recoverable oil in each formation, according to USGS.

There was really nothing of significance found, and I know the oil companies kept tabs on the Nanushuk," USGS Senior Research Geologist Dave Houseknecht says. "I know a number of companies, when they got 3D seismic data in the NPR-A [National Petroleum Reserve-Alaska], they were mapping amplitudes that are seismic indications that there may be oil or gas saturated rocks there.

"But the leadership of the companies never had enough faith in these anomalies because there had never been economically viable discoveries made in the formation."

However, when Armstrong and Repsol announced the Pikka discovery following successful exploration during 2014-2015, the industry's attention returned to the shallow formation. In 2017 the Horseshoe wells extended the pool by more than twenty miles, making it the largest US onshore conventional oil discovery in thirty years.

Together, the Nanushuk and Torok Formations form a huge wedge of sediment deposited in a deep water basin. While the Torok Formation was deposited on the floor of the deep basin, the younger Nanushuk Formation was deposited in shallow water and includes potential reservoirs in deltaic, shoreface, and fluvial sandstones. The new discoveries in both formations involve oil pools in stratigraphie traps concentrated along ancient shelf margins, according to a USGS release.

Much of the oil within the formation has been missed in the past for two primary reasons beyond the now-outdated thought within the industry that older rocks are more prospective, says Houseknecht.

One was the industry's desire to avoid drilling hazards; the Nanushuk Formation is so shallow that it can have permafrost in its upper layers, which commonly traps gas at the base.

To counter this particular formation's characteristic, and to access the potential in deeper formations, companies used drilling mud containing high-density minerals to create...

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