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Oil Search provided an update on Alaska North Slope Assets, reporting ice road construction ahead of schedule. In todayâs market release, Oil Search Limited (ASX:OSH) stated that 2018/19 two well appraisal drilling activity had been started at the Pikka Unit in November. Moreover, weather conditions on the North Slope have been an added advantage for Oil Search to undertake the ice road preparation slightly faster than planned.
Oil Search intends to commence drilling at Pikka B in early January 2019 which would possibly see the drills reaching the depths of 6,513 feet in the southern portion of the Pikka Unit. Whereas, the drilling at another recently acquired well, Pikka C, is expected to start in mid-late January, targeting 4,923 ft deep drilling. Both the wells aim at penetrating four reservoirs to confirm the thickness, quality, and presence of the Nanushuk reservoir at their locations.
If the drilling goes successful, the wells could return approximately 250 million barrels of oil resources from the 3C to 2C category. This will take the Oil Searchâs total Nanushuk and satellite fieldsâ 2C oil resources from 500 million barrels to circa 750 million barrels. Moreover, the testing would allow the company to select the wellâs design for Pikka development.
Managing Director of Oil Search, Peter Botten stated that as per the assessment of the United States Geological Survey, Nanushuk has the potential to contain approximately 8 billion barrels of oil. He added the Company is positioned at the forefront of the re-emergence of Alaska as a major world-class petroleum province, driven by the development of the exciting Nanushuk play.
Oil player has also bagged the Final Environmental Impact Statement (FEIS) from the primary permitting authority for the Pikka development, the US Army Corp of Engineers (USACE). It took four years for the Oil Search to achieve this approval. The company stated that the period for final community comments on FEIS have closed on 3 December 2018, and the authority is now under process of preparing its Record of Decision, expected to be granted late in the Q1 2019.
Mr. Botten stated that the granting of Record of Decision would pave the for Pikka Unit JV to move into FEED, targeted in mid-2019, followed by final investment decision anticipated to take place in 2020. Further, the company informed that the preparations for exercising Oil Searchâs option with Armstrong and a partial divestment of the acquired lease interests are progressing well on track.
On the geographical development front, the company has also been successful in acquiring leases for 3,575 acres, near the northern boundary of Pikka Unit. Following these 2018 Alaska Lease bids, Oil Search In conjunction with its partner Repsol expanded its acreage position acquiring interests in prospective acreage close and adjacent to the Pikka Unit.
In todayâs trading session, Oil Searchâs stock plunged 1.168% to last trade at $6.770 as at 20 December 2018. Moreover, in the past 12 months, OSH has fallen 8.42%.
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