Exploratory Shale Wells Coming Within a Month

Great Bear Petroleum this morning announced it is within a month of  drilling up to six exploratory shale oil wells this summer on its holdings along the Dalton Highway.

The company’s President Ed Duncan told the Senate Resources Committee that the goal is to gather data the company will use to begin a pilot production operation next year.

The plan of operation’s on file.  Well plans have been designed, redesigned, edited, improved, refined.  We  believe the technical work program we have today is as good as we could have hoped for.

Duncan said Great Bear now has a venture agreement with Halliburton Oilfield Services Company for testing and analysis of the test wells in exchange for a quarter interest in the project.

Preliminary geological studies indicate that success is likely.   However, he said the tests could find an Air Ball – nothing to produce.  But Duncan said the tests could prove the resource potential is “Beyond Game Changing.”

The numbers are staggering. We won’t go into the details, but it’s fair to say the retained hydrocarbons in the source rock is significant.  It certainly could be on par with … well in excess of the hydrocarbons actually contained in the known tracts.

Great Bear plans to be getting into full production by 2015.   Duncan anticipates having as many as two hundred wells a year – not seasonal, but year-round.  The biggest problem Duncan sees right now is finding the tens of thousands of people to work in the new shale industry – as well as training them and finding accommodations for them to live.  He says too many are finding jobs in North Dakota.

It’s not  a challenge we can solve on our own.  It’s a giant challenge for the state of Alaska.  We all may be willing to do everything we can from a technical perspective,  but if we don’t have people in the field to run the rigs, drill the well, lay the pipe, weld the pipe,  we’re stuck.

The Resources Committee is currently studying Governor Parnell’s plan to change the state’ oil tax regime to encourage new production.   Co-Chair Joe Paskvan says other big shale developments were done without any change in those state’s tax structures.

I think that he is accurate in his conclusion that the uptick in production in Texas and the uptick in production in North Dakota is a result of technology and pricing and not as a consequence of any tax change.

Duncan updated legislators on one other change in Great Bear since his last report to them.  Former Revenue Commissioner Pat Galvin has gone to work for them.  Galvin was the individual often credited as most responsible for creating the state’s current oil tax system.

Download Audio