ALASKA
Geologist whose 2013 discovery 'revolutionized' North Slope oil exploration lays plans to drill again this winter

Alex DeMarban,
Anchorage Daily News, Alaska
Sun, October 2, 2022

Oct. 2—Bill Armstrong

The risk-taking geologist who discovered a giant Alaska oil field in 2013 that companies had long overlooked is taking another stab at exploration drilling on the North Slope, this time on federal land west of existing development.

Bill Armstrong, owner of Colorado-based North Slope Energy, in August filed a plan with state environmental regulators, spelling out his intention to drill two wells into a prospect known as West Castle.

The site is located in the northeastern section of the National Petroleum Reserve-Alaska, more than 50 miles southwest of the village of Nuiqsut.

Armstrong said the prospect's characteristics look similar to the giant Pikka oil field that he discovered on state land nearly a decade ago, and similar to ConocoPhillips' huge Willow prospect, found after the company followed in the footsteps of Armstrong's discovery.

Oil from Pikka and Willow, if the fields are developed, is expected to significantly boost Alaska oil production and revenues. The federal government is currently weighing approval of the Willow prospect. As for Pikka, two major oil companies announced this summer that they would commit $2.6 billion to begin developing it.

Armstrong said in an interview on Thursday there is no guarantee that West Castle, located southwest of Pikka and Willow, also holds a colossal cache of oil.

"We know what we're looking for and we know it looks like Pikka and Willow, but at the end of day, these are wildcat wells," he said, referring to drilling outside existing fields. "Even though the likelihood is better than just a random wildcat, it's still a wildcat, so it's not a sure thing."

At West Castle, Armstrong will target the Nanushuk geologic formation, the same formation containing the oil at Pikka and Willow.

Previous explorers had not expected the Nanushuk formation would contain such massive amounts of oil, until Armstrong's discovery, said Dave Houseknecht, senior research geologist with the U.S. Geological Survey.

But explorers are now targeting that formation, which has become the hottest conventional onshore prospect in the world, Houseknecht said.

[Alaska congressional delegation pushes for quick approval of big North Slope drilling project]

That geologic formation has yielded multiple discoveries and "revolutionized everyone's perspective of oil potential in Alaska," Houseknecht said.

At West Castle, Armstrong will have limited data to rely on, Houseknecht said. The federal government drilled a test well there decades ago, the only well in the vicinity.

But there is three-dimensional seismic data showing underground features, and Armstrong knows how to read it, Houseknecht said.

"It's certainly a bold move, one that looks promising," Houseknecht said.

West Castle drilling prospects

Houseknecht said there are many other oil prospects in the Nanushuk formation across the North Slope, based on seismic data.

The formation presents an unusual opportunity for oil companies because most big prospects today exist offshore, and in deep water, Houseknecht said. Also, the crude oil in the Nanushuk is known as "light" and "sweet," requiring limited processing compared to other types of oil, he said.

"It's the oil everyone wants unless you are making tar, so it's kind of the best you can wish for," Houseknecht said.

Mark Myers, former head of the U.S. Geological Survey under President George W. Bush, said Armstrong is skilled at "geological detective work" and has a track record indicating he'll be successful at West Castle.

[Oil falls below $80 a barrel en route to biggest run of weekly losses this year]

But while seismic data can bear the fingerprints of a large pool of oil, it's possible that oil previously trapped there dissipated to other areas. And that's just one of the challenges facing explorers, he said.

"You don't know (what's there) until you drill it," said Myers, a former senior staff geologist for Arco Alaska, which later became part of ConocoPhillips.

Drilling could take place this upcoming winter, according to Armstrong's plan.

But Armstrong said in an interview it's possible the drilling may need to be pushed until next winter.

There are no permanent roads nearby to help access the project, making logistics difficult, though the state and North Slope Borough in 2020 took a preliminary look at a road concept in the area.

Instead, the plan calls for access using 100 miles of ice and snow roads that support drilling rigs in winter.

Despite the challenges, Armstrong said it's a good time to drill.

Oil prices are strong and the trans-Alaska pipeline has the capacity to transport a lot more oil. And, he said, oil will be important globally for decades to come, even as electric vehicle use grows.

"I'm for an all-of-the-above strategy when it comes to energy, whether it's solar or wind, and now they're talking about hydrogen, and there's nuclear," he said. "The world is energy starved."