State approves APA's plan for two winter exploration wells near Badami

APA Alaska plans to drill two exploration wells on the eastern North Slope this winter after the state approved its plan Thursday. Work is set to start Dec. 1.

The wells are near Badami, an oil field east of Prudhoe Bay. In June, APA agreed to buy Badami's operator, Savant Alaska, in a deal worth roughly $70 million. Badami's processing plant is rated near 40,000 barrels a day, and a pipeline ties it into the trans-Alaska system. APA said in June the deal brings about 1,500 barrels a day of production.

The two wells, Chinook-1 and Hungry Horse-1, sit about 12 miles southwest and four miles south of the Badami dock. The plan calls for 58.3 miles of temporary ice road to reach them, running east from the Endicott Road toward Point Thomson.

The approval from the Alaska Division of Oil and Gas is one of several APA needs. It also needs drilling permits from the Alaska Oil and Gas Conservation Commission and a separate state permit for its ice roads. State records don't show whether either has been issued.

When drilling ends, the wells must be suspended or plugged and abandoned. The only comment on the plan came from the Alaska Department of Environmental Conservation, which noted that containment around fuel tanks must hold the largest tank plus room for rain and snow and said APA will need to update its spill plan to match its pad layout.

On Wednesday, the division approved a permanent Savant gravel road from Badami's main pad, about 32 miles east of Deadhorse. Its stated purpose is to reduce the risks of building ice roads to move drill rigs.

"The pending Savant acquisition in Alaska will secure critical infrastructure adjacent to our position and increase flexibility as we evaluate next steps," APA CEO John J. Christmann IV said in August. APA expects the deal to close by year-end.