In 1966 Richfield was merged into Atlantic Refining Company, and at that time I was made district manager for Alaska, and as such had the responsibility for both exploration and production. We did have production in Cook Inlet, but we had two disparate groups of people with different backgrounds that I was trying to merge into one cohesive outfit. It was a little rough at the outset, but we had a lot of talented people on both sides, but by the time the Susie Well had been drilled and was dry—as I said the Kupuk Well, the Colville Well is dry.
We had the acreage up north. We had the offshore acreage, and this was under the auspices of Arco now. The Laughlin brothers’ rig that was on the Susie Well was 60 miles south of Prudhoe Bay. It’s in the late winter, early spring actually, and we knew that in order to get Prudhoe we would have to go cross country by cap train and drag that rig up that 60 miles to the location at Prudhoe Bay which we were successful in doing.
We got rigged up, put an air strip on two frozen lakes with a bladed strip on the tundra in between the lakes to give us about a 5,000 foot ice runway so we could land planes and resupply the operation.
On May the 2nd, we took a charter aircraft with Governor Hickel and his entourage up to the location. We got up there on May the 2nd and breakup had started with a vengeance.
There was probably six inches of water standing around on everything. Mud and slush. It was terrible, but at least we got to the rig.
We had lunch, and there was a contingent from Humble and a contingent from Arco and the governor plus Phil Holdsworth and Roscoe Bell. Wally greatly enjoyed that.
He thought that was something because he was a great believer in development for Alaska. Mind you the state is only at that time eight years old, and it doesn’t have much of an infrastructure.
It doesn’t have really any economic base except the U.S. Federal Government.
So anything that looked as if it would be a boon to the economic well-being of the state was going to be something that he was for.
So he really enjoyed being up there and seeing it and being able to exert his very strong personality and support, and he was, he was a real supporter.
At that time a particular quote came forth that a lot of people denigrated in years hence.
Wally said to me, “I think there’s 40 billion barrels of oil under this place.” I swear that’s exactly what he said.
I said something like, “Oh, sure, Wally—or Governor Wally.” That’s what we called him, Governor Wally. He was not very far off.
Interview: If you count the park and if you count his oil and [], he was absolutely right.
Right on. We had to shut the rig down that day.
I gave orders to Bill Condon [ph], the tool pusher. You’ve got to shut this thing down or we’re going to disappear in the muck.
Interviewer: What was drilling depth at that point?
We were just below the permafrost. We set casing through the permafrost so we were okay in that regard, but we couldn’t go any further.
We resumed drilling the following November, and just barely out of the surface casing. I think around 3,300 feet we began to get oil shows.
This is in the probably in the Sagavanirktok formation, tertiary age. And we had shows through the Sagavanirktok down into the cretaceous.
Around 6,700 or so we ran our first formation test and got some free oil in the pipe but really nothing to shout home about on the north slope.
There was sort of a rule of thumb that everybody in the industry had that said nothing on the north slope will be economic if it’s less than one billion barrels of oil—recoverable oil.
We all sort of had that in the back of our heads as a minimum goal. Well you know how many billion barrel oilfields there are around the United States.
As a matter of fact, that estimate was way too low as it turned out anyway, but that was sort of in the back of our mind as something that we would have to have.
So 1,500 feet of free oil in the drill pipe certainly doesn’t get you there.
We drilled on down seeing constantly increasing gas and oil shows on the mud log and in the pits.
We drilled down through the cretaceous section into the Jurassic and topped the Sag River sand at a little below 8,100 feet.
That was the first indication of a potential reservoir.
We cored the Sag River sand and drilled on down through the intervening shublik which is primarily a mud stone conglomerate phosphatic zone, and then topped the beginning of the 450 feet or so of the Ivishak sandstone of the Sadlerochit Formation.
That was the signal for gas shows that literally just blew out of the blender in the mud loggers shack.
They had to tone down the methods by which they analyzed the cuttings.
But at any rate we cored some of that then we ran a drill stem test.
That was our second drill stem test.
That had flow of about one and a quarter million cubic feet a day and some oil, but unfortunately when we went to pull the backer loose and retrieve the tool, we got stuck.
And this was on December of 1967.
Well we were stuck in the hole, and we couldn’t retrieve the pipe so we had to sidetrack and re-drill.
That took about a month before we got back into the zone, and we drilled on down through the Sadlerochit.
There are three general members of the Sadlerochit.
The upper Sandstone, middle conglomerate and the lower sandstone. And all of that was basically a gas cap.
The lower sixty or seventy feet of the lower sandstone was an oil leg.
We actually did test that later on through perforations and some of those flows were up to about 2,400 barrels per day from a very thin zone, twelve feet or so.
So we knew that we had the potential for a viable economic discovery on the slope but gas wasn’t worth anything and we all knew that.
Sixty feet of oil, even with those kinds of rates probably wasn’t worth anything.
So we drilled on down through the Kavik [ph] shale into the Pennsylvanian carbonate reservoir of the Lisburne formation.
The Lisburne actually was our major objective in a well. It wasn’t the Sadlerochit.
The Sadlerochit outcrop or to the east to Anwar is pretty much what we characterized as a hammer wranger, it was a quartzsite.
There are some areas in the northwestern portion of Anwar, close to the Canning River where the Ivishak sandstone member of the Sadlerochit does show some not friability but at least it’s not the tremendously hard well-cemented sandstone that you see further east.
And it does have an increasing grain size as you move north on the outcrop which signifies a northerly source of some land mass in that direction.
Of course this is before we had the benefit of knowledge of plate tectonics and if you move north from the Ivishak outcrops and Anwar you soon are in the deeps of the Beaufort Sea.
At that time, there was really no explanation for that kind of source for a sandstone.
Retracting a little bit back to the Susie Well, when we bought in the Susie Well we were in the Jurassic volchemic age and Gar Passell and Gill Maul and Ben Ryan called me and made a pitch to me to deepen that well to the Sadlerochit because of the fact that we’d seen these sandstones that offered the potential at least for development.
Unfortunately in the Susie Well we didn’t have enough casing on hand at the location to be able to deepen the well so we had to abandon it.
But the Sadlerochit was a secondary objective.
But the primary objective was the carbonates, both limestones and dolomites and Alapon and Wahoo formations of Pennsylvania and Mississippi in age.
We drilled on down through the Lisburne and finally bottomed a hole in the Pre-Mississippian argillites of the Noropoc formation.
We tested the Lisburne and actually reported publicly the results of 1,152 barrels per day as a discovery.
Everybody was quite excited about that and we got newspaper headlines, which I have copies of if you wish to see them.
Nevertheless those of us that were privy to all the information had to keep our fingers crossed, because what we had found although greatly encouraging was most certainly not a commercial discovery with that we had at that point in time. Q: So we’re talking and we wish just finished with Prudhoe Bay State Number One, and now we’ll talk about the step-out well, which I believe started – you stated it not too long after that, a month or two later?
Yeah, they actually were all simultaneous at least in part.
The Prudhoe Bay well was still testing into about May of 1968, and we knew that in order to define the extent of the oil rim at Prudhoe Bay we were going to have go down dip, and probably at some distance because the dip on Prudhoe Bay, in a southerly direction, it reads only about three degrees.
In order to drill beginning in May of that year we had to have a gravel source, and a very adequate gravel source in order to build an airstrip so that we could supply the rig throughout the summer months.
That meant that we had to get down to the only location that would be possible would be right along the banks of the Sagavanirktok River.
So in order to go down dip and to be adjacent to a gravel source on the river we set a step out location called the Sag River State Number One seven miles southeast from the discovery well.
None of us had ever experienced anything like a seven mile step out for a confirmation well.
So that was a real shocker to all of us, but it was the logical thing to do and the right thing to do.
But then we had to do something else, we had to find a rig and the only rig that was available was the rig that Union had stacked after drilling the Kukpuk well and it was over on the Colville River probably 70-77 miles west of Prudhoe Bay at a place called Pingo Beach.
We got our construction guys together and they got a contract on the rig, and they trucked that rig around or down the Colville River on the river ice, onto the sea ice, adjacent to the coast, and moved it on the sea ice all the way across to Prudhoe Bay, across Prudhoe Bay on the sea ice, and then on the river ice again, on the Sag River to the location. Rigged up and began drilling in June 1968.
And we got down to the Sadlerochit in July, we topped the zone as all oil, no gas, and got some cores, and did some testing. And the tests were truly remarkable, being in the neighborhood of 2,400 barrels a day and on a very restricted choke, and we ran I think it was three tests of that nature, and were pretty well convinced as to what we had.
We drove – drilled all the way through the [], excuse me, the Sadlerochit into the Kavik shale and determined that we had an approximate 400 foot oil rim below the 400 foot gas cap.
released to the public their estimate that the Prudhoe Bay structure was capable of producing between five and ten billion barrels of recoverable oil.
That’s when the top blew off of everything.
When we finished drilling Sag River State Well and we had the announcement from DeGoyler and MacNaughton that was the Eureka moment for me and for my organization, particularly those in Alaska, because we knew that we had a volume of recoverable oil sufficient for economic development.
Because by all accounts then we knew we had enough oil that it could be produced, and the conventional thinking was that you could lay a pipeline from the North Slope down to nice free port like Anchorage or Valdez, and our Dick Delaney, our pipeline expert in Dallas did a back of the envelope calculation that would be about $900 million in order to do that. Of course that was in the days before environmental concerns, and the pipeline would have all been on the surface, there was no consideration of damage by major fault crossings, and the effects on wildlife or the damages that could occur by oil spills. So to jump ahead a few years the pipeline was eventually completed for $7.7 billion so it gives you the idea of the escalation that occurred in those few years.
A little while ago I mentioned the various zones in the Ivishak sandstone of the Sadlerochit formation, and I pointed out the upper sand, the middle conglomerate in the lower sandstone intervals. Let me give you some numbers that illustrate the quality of that reservoir or those reservoirs within the Ivishak sandstone. The upper sand thickness is about 200 feet, the porosity ranges from 25 to 30 percent, and the permeability from 500 millidarcies to 4000 millidarcies. As I like to say four darcies, because we hardly ever get to say something like that.
This is a section of a core from the Discovery Well at Prudhoe Bay in the Ivashak sandstone of the Sadlerochit formation and it’s embedded in plastic. I don’t know if it’s possible to see, but this is oil stain and actually some of the oil has migrated from the rim into the plastic.
But you can see this stain down through here that sort of a light brown stain and this is pebbly sandstone almost a conglomerate and this is some of the section that would be 25 to 30 percent porosity with permeabilities I would guess in the order of 2,000 to 3,000 millidarcies.
The conglomerate zone about 40 to 140 feet thick; porosity’s quite a bit lower; 10 to 20 percent, but the permeability’s are still pretty good, especially for a conglomerate – 500 to 1000 millidarcies.
I have another half section of a core. This is more obviously oil stained and the oil has very definitely migrated into the plastic from the perimeter of the core. Now this is more characteristic of the conglomerate section which has a little bit lower porosity, but still has permeabilities up to 1,000 millidarcies and this is from the middle section of the Ivashak sandstone of the Sadlerochit formation.
The lower zone, which is 300 feet thick and has numerous shale interbeds in it, the sands are very porous; 25-30 percent again, and the permeability’s are also excellent – 250-3000 millidarcies.
So this is a world class reservoir no matter where you would find it. It’s a fan delta deposit that has a northerly source, once again at that time we didn’t have any idea where the northerly source could have come from, and the thinking today generally would lead you to believe that with the opening of the Beaufort Sea, with a counter clockwise motion of Alaska would separate from the western Arctic Islands and that the original source is in that region of Canada.
There’s been some recent evidence that I just read that there’s some megafauna correlations that would indicate affinities between eastern Siberia and the megafauna of both the Lisburne and the Triassic formations, which is contrary to what I just said about the possible opening of the Beaufort Sea.
But be that as it may, someday somebody will undoubtedly figure all of that out.
The other thing I wanted to emphasize about the Prudhoe Bay Reservoir is the – as I mentioned earlier the combination trap of folded structure of – faulted structure on the north with a truncation on the east, and these cross sections very well demonstrate those facts.
The north/south section indicates the lower cretaceous unconformity cutting down into the Jurassic Kingak Shale and partially into the Sadlerochit, and that section also shows those down to the north faults on the north side of the structural feature.
The other section, which runs east/west, very graphically shows the west Sack sands dipping from west to east, and would therefore indicate the plunge of the Beaufort Arch from west to east, and the tilting that occurs between the structure at Prudhoe and the structure at Colville with the Colville being much higher than that at Prudhoe.
Also this section running from west to east graphically depicts the truncation by the LCU cutting through the gas sand in the Sadlerochit thus forming one aspect of the trap.
As you go further east the truncation continues on down section to eventually it truncates into the argillites.