Caelus claims Arctic oil discovery that could rank among Alaska’s biggest ever

alaska dispatch newsAlaska Dispatch News | October 8, 2016 |Alex DeMarban

Caelus Energy Alaska said Tuesday it has made a "world-class" oil discovery that, if estimates prove true, could be one of the largest finds ever in Alaska.

The Smith Bay site, in shallow waters about 50 miles southeast of Barrow, could "provide 200,000 barrels per day of light, highly mobile oil," the company said in a press release Tuesday.

If correct, that production level would make the field more prolific than ConocoPhillips' Alpine unit, which began production in 2000 and reached a production peak of 139,000 barrels in 2007.

The statement from Caelus does not indicate analysis by a third-party engineering firm. The estimates are the company's internal numbers, a spokesperson said Tuesday morning.

The statement also notes that flow-tests, a step in verifying a well's capabilities, were not conducted "due to seasonal time constraints."

It said, however, "extensive sidewall coring and subsequent lab analyses confirm the presence of reservoir-quality sandstones containing light oil."

David Houseknecht, one of the region's foremost geologists and project chief for the U.S. Geological Survey's Energy Resources Program for Alaska, said Caelus' announcement comes in a little-explored rock formation with potential to support large oil deposits.

He said the company could certainly be sitting on a large find, based on the work done so far, including seismic mapping showing the extent of the reservoir, and two wells drilled about 5 miles apart that show the thickness of pay zones containing oil.

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