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"The Oil's There"

Stocks in this article: ROYL

"To date, at least, the outcome has been very, very, very good," Duncan said.

Accelerate program

Given the results of the testing, Duncan said that his permitting team is now working with the state on a change in plan, to potentially proceed with some long-term production testing of the wells, in hopes of accelerating the shale oil development program.

There is still much work to do "but we're working hard to bring the decision forward, for ourselves and for the state of Alaska, for regional development by as much as a year," Duncan said.

That would move a decision on whether to proceed with a full-scale shale oil development from 2014 to the middle of 2013.

Great Bear has previously said that, if the testing of source rock cores proves successful, it would conduct production tests by drilling and fracturing horizontal lateral wells through the source rocks from the initial vertical wells used for source-rock coring.

Second well

Great Bear is currently drilling its second test well, the Merak No. 1 well, next to the North Slope Haul Road. That well has reached the bottom of the GRZ/HRZ, the shallowest of the North Slope source rock horizons, and on Sept. 19 the drillers took a core sample from that horizon at a depth of about 9,100 feet, Duncan said.

"We'll drill the rest of the section over the coming few weeks," he said.

The Alcor well penetrated all three of the major North Slope source rocks.

Petroleum system model

Duncan said that he had determined what leases to purchase and where to drill test wells using a model of the North Slope petroleum system developed by Schlumberger, based on science done by the U.S. Geological Survey and Stanford University. That model had proved very successful in explaining the mix of oils found in the North Slope oil fields. The model had predicted the locations of "liquids fairways" in the source rocks, and the results so far of Great Bear's drilling have substantiated those predictions, Duncan said, adding that Great Bear is testing all three of the source rock units.

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