Santos announces oil discovery east of Prudhoe Bay on Alaska's North Slope

Armstrong Oil and Gas has made an oil discovery at its Sockeye 2 exploration well east of Prudhoe Bay, Santos, a 25% partner with Armstrong, said in a press release March 18. In addition to Santos, Armstrong subsidiary Lagniappe holds a 25% interest and is operator, and Apache Corp. owns 50%.

Armstrong has been exploring the area for three years and drilled test wells last winter but had to cut the program short because of bad weather. The company returned to the area this winter to resume testing.

Santos, based in Australia, said the Sockeye 2 well was drilled to a depth of 10,500 feet and encountered high quality oil in a 25-foot section of net oil pay in rock with an average porosity of 20%.

"We are pleased with the Sockeye 2 exploration discovery and its confirmation of resource potential over our Lagniappe leasehold," Bruce Dingeman, Santos Executive Vice President and Alaska President said in a statement.

The Lagniappe leasehold, a large acreage area of state of Alaska leases, was assembled over several years by Armstrong Oil and Gas CEO Bill Armstrong, a veteran North Slope explorer who led the exploration leading to discovery of the Pikka field in the western slope now being developed by Santos and Repsol, a partner.

No other information is available yet on the Sockeye discovery, but Armstrong said the prospect and others like it nearby hold similarities to geology where the Pikka find was made.

Further drilling and flow tests will be needed to determine commercial viability. However, the find is a few miles south of existing pipeline infrastructure that connects the producing Point Thomson condensate and small Badami oil field to the Trans Alaska Pipeline System at Prudhoe Bay.

Companies have explored for years in the general area where Armstrong is drilling but have been unsuccessful. ConocoPhillips acquired leases in the area but subsequently dropped them to shift its attention farther west to the National Petroleum Reserve-Alaska, where it subsequently made its Willow find, which is now under construction.

The Sockeye 2 discovery is the latest of several oil and gas finds along a geologic trend east of Prudhoe Bay toward the boundary of the Arctic National Wildlife Refuge at the Canning River.

Over several years ExxonMobil made the Point Thomson discovery, a large gas and condensate deposit; BP made the Sourdough find farther east, virtually on the border with ANWR and that is undeveloped; and Savant, a Denver-based independent, found the small Badami field near the Beaufort Sea coast midway between Point Thomson and Prudhoe Bay, which is now producing.