Geologist Bill Armstrong

Independent geologist Bill Armstrong and his small Denver exploration company may have found the third largest hydrocarbon field ever discovered in the US, on Alaska’s North Slope.
This article appeared in Vol. 15, No. 6 - 2019


Discovery of the Pikka/Horseshoe Field in Texas, USA

Horseshoe well on Alaska’s North Slope. Source: Judy Patrick. “I was informed early on in our pursuit that most, if not all, of the large, onshore, conventional fields have been found,” says Bill Armstrong, founder and owner of the Denver independent that bears his name. “I was told ‘You might as well be looking for unicorns’. Well, we found one!”

What Bill is referring to was the discovery of the Pikka/Horseshoe field on Alaska’s North Slope. This field could ultimately rank near the top of US conventional oil fields, behind only the Prudhoe Bay and East Texas fields. With the more recent discovery by ConocoPhillips of the 750 MMbo Willow oil field to the west of Pikka, Bill thinks that “Unicorns not only exist but potentially run in herds!”

About Geologist Bill Armstrong

Bill Armstrong grew up an ‘oil field brat’ in Abilene, Texas. His dad was an independent working West Texas at the time, giving Bill opportunities to meet the likes of T. Boone Pickens, the late Tom Brown and others; he even caddied for some of them at the Abilene Country Club. His dad told Bill these people he met were independent oil and gas guys. Right then, Bill knew he wanted to be a part of that fun group: full of life, full of energy and fun, fun, fun. “Up today, down tomorrow but having fun all along the way.

Bill at the East Texas discovery well, Daisy Bradford #3. He loves reading about oil exploration and the discovery of large fields. Source: Liz Armstrong. “Since graduating in geology in 1982 from Southern Methodist University (SMU) in Texas, my definition of ‘making it’ has changed substantially,” says Bill. “I started Armstrong Oil and Gas in 1984 when I was 24 years old and oil prices had collapsed below $10/bbl. I had no backing, no friendly bankers, and my only partner was my wife Liz who I met in Geology 101 at SMU. All I knew was that I wanted to hunt for buried treasure.”

Bill focused those early years “crawling along deal to deal for the first decade”, chasing small prospects in Kansas, Colorado, Wyoming, North Dakota and other independent-friendly regions. At times while pitching deals, Bill met and hired some ‘awesome talent’. “This ‘band of brothers’ has been with me for the last 20 years or so,” says Bill. “We have never had a contract between us and we have drilled lots and lots of wells.”

This geological and geophysical talent allowed Armstrong Oil and Gas (AOG) to focus on internally generating, assembling, and drilling large company-impact exploration opportunities. “Most everyone told me I was crazy to have this business model,” says Bill. But the unique business model for this small independent has turned out to be very successful. AOG has been involved in the discovery of new fields with ultimate recoveries approaching five billion barrels. Their exploration activity ranges from the North Slope of Alaska down to the Gulf of Mexico. “Along with a lot of dry holes, we have found new fields in over a dozen different geologic provinces,” says Bill. “It has been mostly fun, with the wins overshadowing the losses.”

Focusing on Alaska's North Slop Hydrocarbon Province

Bill Armstrong dressed for success and having fun at the Horseshoe well with a wind chill of -57°C on Alaska’s North Slope. Source: Liz Armstrong. “I first dipped my toe into Alaska in 2001 and have been pretty busy up there since,” says Bill. “Big conventional fields are hard to find, with only 30 in the US having an EUR in excess of 500 MMbo. Seven of those were found on Alaska’s North Slope, making it a great place to find large fields. Another interesting fact is that all these fields were found by accident while actually pursuing other plays and are predominately stratigraphic traps. Compared to the other places I have worked, the Slope is wide open with opportunities and lots and lots of running room.”

AOG partnered with Pioneer in 2002/3 targeting the Kuparuk reservoir. Instead, they found oil in the Upper Jurassic Nuiqsut Formation (a secondary objective) and the Oooguruk field was discovered. A second discovery, with AOG partnered with Kerr McGee, was made in the Late Cretaceous Schrader Bluff sands at Nikaitchuq. AOG chose to sell their positions in those fields to ENI and the two fields now are producing just under 40,000 bopd.

“We took some time away from Alaska to look into all of the hoopla around the unconventional ‘mania’ but kept coming back to the North Slope,” says Bill. “This time we wanted to stay onshore, close to infrastructure and drill from 3D seismic. We acquired or shot a lot of 3D seismic data and eventually, based on this data integrated with well control, we assembled leases totalling about 344,000 hectares. We invited Repsol to help us explore and over the last five years have drilled 19 wells, all successes.”

Pikka vs East Texas Hydrocarbon Fields

Bill Armstrong really likes to compare the Pikka and East Texas fields. The latter was discovered in 1930 by the independent ‘wildcat driller’ Dan Joiner against all odds and ‘smart money’ (see The Great Black Giant; GEO ExPro Vol. 12, No. 2). The field was a stratigraphic trap on the west flank of the Sabine uplift that would ultimately be found to be 64 km long by 8 km wide and produce more than 5.4 Bbo.

In North Slope, Alaska, some 83 years later, Repsol and AOG drilled the Q3 well. They had a great prospect with multiple play objectives hitting oil in a shallow zone (Cretaceous Nanushuk Formation) that did not show up clearly seismically and turned out much thicker than anyone suspected. Like the East Texas field, Pikka was a stratigraphic trap but a mirror image of East Texas, pinching out east to west.

“We followed the discovery well with an extension 8 km north (Q7), then another 6.4 km further north (Q6), then went 4.8 km south (Q8),” says Bill. “Just this past year, we started really believing in our geologic model and seismic and stepped out an additional 34 km to the south at our Horseshoe well – and found over 30m of pay in the same huge tank, same sand, same oil water contact, same pressures… so, kinda fun.”

As it turns out, both the Pikka and East Texas fields are roughly the same length and width, both are stratigraphic traps, both are Cretaceous-aged deltaic sands draped over the flanks of a high, have similar type crude oils, same depth, same original bottom hole pressures, same gas to oil ratios. But Pikka holds about 14 Bb original oil in place, being three times thicker than East Texas; however, recovery at Pikka will be less because the Woodbine Sand at East Texas has much better permeability. Bill thinks this field will eventually become the third largest conventional field in US history.

Hydrocarbon Exploration in Alaska

“Alaska is not easy and it is not always fun,” says Bill. “Things up north happen way slower than I think they should; it’s very expensive, and even some of the seemingly most mundane things are somehow more complicated. But unlike most conventional areas there is still lots of grass on the playground. I had plenty of sleepless nights trying to figure out how I was going to pay for all of this development until I sold a large chunk of the discovery to Oil Search.” (Oil Search is a multinational oil and gas exploration and development company founded in 1929 and incorporated in Papua New Guinea. They currently operate all of Papua New Guinea’s oil fields and have operations in Yemen, Egypt, Libya, Iraq, and most recently on the North Slope of Alaska.)

“What this is about is that there are still big fields to be found, and the best way of not finding them is not drilling wells. The East Texas discovery was a sure-fire dry hole pre-drill and everyone knew it. But, thank God, it was drilled and against all odds it worked. It created amazing wealth for our country, the people involved with it, and immeasurable good things for north-east Texas. What that means for today is to keep swinging the bat, hoping for a home run, whether it is a new Cretaceous strat trap on the North Slope which looks like something that should be in the piney woods of East Texas, or some new zone in the Delaware Basin that has yet to be recognised.”

Further Reading on Hydrocarbon Exploration in Alaska

Some recommending reading on GEO ExPro articles relating to, or similar in content to, oil and gas exploration in Alaska.

Alaska North Slope: Source Rocks Hold Promise
Thomas Smith
The US Geological Survey’s recently completed assessment of three North Slope shale plays indicates a potential of two billion barrels of recoverable oil and eighty trillion feet of gas.
This article appeared in Vol. 10, No. 3 - 2013

Start of Something Big
Thomas Smith
An oil discovery in the Moose Range wilderness on Alaska’s Kenai Peninsula would bring a momentous change to the territory and have oil exploration implications far to the north.
This article appeared in Vol. 8, No. 2 - 2011


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