In response to comments from AGOCC on the requirement for custody transfer and associated metering before production leaves the lease, Great Bear said it would work closely with the commission to acquire the required approvals.The company will also be required to provide monthly production reports to the commission. Additional Alcor well Great Bear has also applied to drill an additional well at the Alcor drill pad. Drilling of the Alcor No. 1 began June 19; drilling of the Merak No. 1 began Aug. 22. A second well at Alcor is needed so that the Shublik formation can be tested at that location. The second well at the Alcor drill pad would be directionally drilled into the Shublik formation, Great Bear said. That well would be some 10-15 feet from the Alcor No. 1. Great Bear told the state it has identified the Shublik formation as the primary target for production testing of the North Slope's unconventional resources. The Alcor No. 1 was the first well drilled into the Shublik formation for shale oil exploration, the company said. "As such, a lot was learned about the exact locations of the formations and the rock mechanics." Why drill the Alcor No. 2? Great Bear said that due to circumstances encountered in drilling Alcor No. 1, planned 7-inch casing was "set 2,500 feet too high in order to isolate severe lost circulation zones." The well was cased to total depth with 4.5-inch casing, and Great Bear said it cannot drill out of the 4.5-inch casing into the Shublik formation. Benchmark costs needed Attempting to sidetrack from the 7-inch casing "to drill directionally into the higher pressure strata of the deeper target intervals will require higher mud weights through the same severe lost circulation zones that resulted in the 7 inch casing being set shallow," the company said, resulting in a low probability of successfully drilling into the Shublik formation.