Tangiers Petroleum wins bid for Alaskan oil acreage
Tangiers Petroleum (ASX: TPT) has switched from offshore Morocco to onshore Alaska with a winning bid for Project Icewine in the US.
TPT has negotiated an 87.5% interest in Project Icewine, which is located in the heart of Alaska’s North Slope region. TPT will control over 80,000 acres of 100,000 contiguous acres bought at a ground floor price of $30 an acre – a large working interest for the $4M explorer.
The project has two main resource targets – an unconventional liquids rich shale play and a shallower conventional opportunity within a high porosity deep-water sand complex. TPT will work with its project partners to develop multiple targets on the play, with intentions to drill them as soon as possible.
TPT’s Moroccan exploration well TAO-1 was abandoned in mid-2014 after failing to find oil. The company then spent the remainder of the year rebuilding and Project Icewine is its new focus moving forward in 2015.
The next major goal for TPT is to negotiate a farm out at Project Icewine to assist in funding exploration costs of the acreage.
Neighbour’s drilling highlights potential
The North Slope is dominated by the huge oil field of Prudhoe Bay, estimated to hold 13BN barrels of recoverable resources. The source rocks that feed this large play in the north are part of the same shale formation that forms the primary exploration target of TPT’s Project Icewine in the south.
The company is focussing on exploring the HRZ band of the Hue shale formation, which is estimated to hold over two billion barrels of recoverable resources but is yet to be explored.
These rocks are going to be drilled in the coming months by TPT’s immediate neighbour at Project Icewine, Great Bear (supported by US energy services giant Halliburton), which has three exploration wells scheduled for this year – one just four miles from TPT’s northern project boundary.
The results of this imminent exploration could have an impact on TPT’s farm out negotiations – clear results may re-rate the value of TPT’s acreage here.
The results may also point the way for a drilling programme at Project Icewine and may give indications as to the potential size and quality of any oil resource in the area.
Alaska – hot oil in a cold climate
Project Icewine is located within easy access distance of the Dalton Highway, a key arterial road on the North Slope that will allow TPT operate all year round. Also, the TransAlaska pipeline runs directly through the acreage.
In addition, TPT appears to have timed its entry in the Alaskan oil industry just right – coming as the state’s legislators passed new tax laws, dropping the price of doing oil business in the state.
TPT’s Managing Director Dave Wall says Project Icewine offers TPT a chance to rebuild and grow.
“Icewine ticks three of our key boxes for a start-up project: funding flexibility, ground floor entry and huge upside potential,” he says.