Independents lead resurgence of drilling in Alaska's Cook Inlet

Sept. 7, 1998
Unocal's Pioneer Prospect [191,676 bytes] While most of Alaska's exploratory interest focuses on the North Slope, the state's original commercial producing area, Cook Inlet basin, still holds significant exploratory and development interest for oil and gas companies. Leading a resurgence of drilling activity in the region are independents, once deemed a rare breed in Alaska's E&D scene. Forcenergy Inc., Miami, is setting the stage for an exploratory well that might put a
Forcenergy Inc. operates Grayling platform in Alaska's Cook Inlet, where the Miami independent is concentrating much of its expansion strategy. Photo courtesy of Forcenergy, copyrightKen Graham/Accent Alaska.
While most of Alaska's exploratory interest focuses on the North Slope, the state's original commercial producing area, Cook Inlet basin, still holds significant exploratory and development interest for oil and gas companies.

Leading a resurgence of drilling activity in the region are independents, once deemed a rare breed in Alaska's E&D scene.

Redoubt Shoal

Forcenergy Inc., Miami, is setting the stage for an exploratory well that might put a long-denied Cook Inlet oil field in the producing column for the first time, more than 30 years after its discovery.

The field is Redoubt Shoal, 5 miles southwest of Middle Ground Shoal field and 70 miles southwest of Anchorage.

Pan American Petroleum Corp. discovered Redoubt Shoal field in September 1968, with Redoubt Shoal State 2690 No. 1, in 13s-7n-14w. The well flowed 1,400 b/d of 28.2° gravity oil through a 2-in. choke from Oligocene Hemlock conglomerate at 13,260-845 ft.

Spudded on Aug. 26, 1967, the well was suspended on Dec. 13, 1967, at 13,991 ft. The hole was redrilled and deepened to 14,060 ft. The directional drilling job by Penrod Drilling Co.'s No. 66 jack up put the bottom of the well in the northeast corner of the northwest quarter of 19s-7n-13w. The well has been shut in since 1968. Forcenergy entered the scene in October 1996 with acquisition from Danco Exploration, Houston, of eight leases-five of which comprise the five-lease unit of the Redoubt project.

The program now calls for construction of a portable drilling platform to be built at Ulsan, South Korea, and delivered in April l999. The platform will come over on a submersible heavy-lift vessel and be installed for use as an offshore drilling platform. The cost of the platform and ancillaries, including quarters and cranes designed to be able to pick up the drilling rig, is expected to reach $35-40 million before everything is ready to hire a drilling rig, pick it up, and begin drilling. The goal is to begin drilling by Oct. 1, 1999.

If exploration of the Redoubt Shoal prospect proves successful, the platform may be left in place as a production platform. If exploration does not prove up commercial production, the platform may be used to test other prospects identified by extensive 3D seismic in the Cook Inlet.

Other Forcenergy projects

Forcenergy has completed two wells this year in the West McArthur River field on the west side of Cook Inlet, boosting the field's production from 1,470 b/d at the beginning of the year to the current 4,000 b/d of oil.

The most recent of the completions was the company's West McArthur River Field Unit No. 5, in 16s-8n-14w, which was drilled to a measured depth of 14,450 ft and encountered the targeted Hemlock formation about 100 ft structurally high to previous wells drilled in the field. The well cut about 225 ft of measured-depth (175 ft TVD) net oil pay. In early June, the well was producing more than 2,000 b/d, of which 1,500 b/d was net to Forcenergy's 100% working interest position (75% net revenue interest).

As a result of the well's success, proved reserves assigned to the West McArthur River field are expected to increase by about 2 million bbl of oil, or 1.5 million bbl net. An earlier completion was the redrilled West McArthur River Field Unit No. 3, which is producing about 600 b/d gross.

In a 50-50 operation with Unocal Corp., Forcenergy drilled Coffee Creek No. 1, in 19s-14n-10w, on the west side of Cook Inlet about 7 miles northwest of Beluga River gas field and 40 miles west of Anchorage. The exploratory gas well was drilled to total depth of 9,700 ft and plugged back to 7,200 ft. At last report, in June, testing was still under way.

Anadarko's entry

A relative newcomer to Cook Inlet is Anadarko Petroleum Corp., a Houston independent that shares interests with ARCO Alaska Inc. in the North Slope's Alpine field.

ARCO screened several companies for a potential strategic alliance and chose Anadarko in September 1996 to jointly explore the Upper Cook Inlet.

Under the agreement, Anadarko manages an Anchorage-based exploration team consisting of geoscientists from both companies. Anadarko serves as operator to earn a 50% share of ARCO's working interest in Cook Inlet leases by conducting new seismic surveys, completing other geological and geophysical studies, and drilling exploratory wells.

The 2-year agreement covers 127,000 acres of ARCO's Upper Cook Inlet leasehold but does not include Beluga River gas field. Anadarko and ARCO added to the alliance's leasehold at Alaska's Cook Inlet Exempt Sale 85A in December 1996, when the two companies teamed up to win 10 tracts covering 38,763 acres for high bids totaling $832,596.

Anadarko, with ARCO sharing an interest, this year has applied for a permit to drill an exploratory well in the Moquawkie area on the west side of Cook Inlet, about 50 miles southwest of Anchorage. The well is the Lone Creek No. 1, in 18s-12n-11w. It will be a straight hole about 3 miles northeast of Moquawkie gas field, a November 1965 discovery by Socony Mobil Oil Co. Inc.'s Mobil-Atlantic Moquawkie No. 1, in 1s-11n-12w, which found gas in the Tyonek formation but has not been produced. Two wells have been completed but remain shut-in.

North Cook Inlet

In North Cook Inlet, Phillips Petroleum Co., with its completion of a well drilled from Platform Tyonek, stirred new interest in what has now become the Tyonek Deep prospect and once was called Sunfish by former operator ARCO.

The first well, North Cook Inlet Unit B-01, was unsuccessful, as was a later redrill. Phillips's North Cook Inlet Unit B-02, the second try in an effort to develop deep production, found pay with tests of two zones. One zone was the Sunfish, which flowed 2,000 b/d through a 45/64-in. choke from a depth of 13,110-170 ft. Another zone successfully tested was the North Forelands, which flowed 1,125 b/d through a 30/64- in. choke at a depth of 13,652-966 ft. Gravity of oil was 39-43°. Phillips used Pool Arctic's Rig No. 429 to drill the well to a measured depth of 14,537 ft in 100 ft of water.

Estimates of possible reserves have run as high as 70 million bbl. Phillips in June was drilling a fourth exploratory well on the Tyonek Deep prospect, while hoping to develop and bring the field on production by next summer.

Elsewhere in the northern portion of Cook Inlet's west side, ARCO Alaska Inc. plans to drill a pair of directional wells to further develop Beluga River gas field. The wells are Beluga River Unit No. 212-35, in 35s-13n-10w, and Beluga River Unit No. 242-27, in 27s-13n-10w. ARCO is operator of the field, which is about 36 miles west of Anchorage. The field was a December 1962 discovery by Standard Oil Co. of California, predecessor of Chevron Corp. The discovery well was Beluga River Unit No. 1, in 35s-13n-10w. Cumulative production from the field stands at 606.2 bcf of gas. Production from the field in March was 3 bcf of gas from 14 wells.

Coalbed methane

In a new search for gas in Alaska, Unocal has turned attention to coalbed methane (CBM) in the Matanuska Valley about 40 miles north of Anchorage. The company has turned to the Pioneer Coal Bed Methane Project, targeting high-BTU gas.

Despite Alaska's tremendous coal resource, there has been no development of potential CBM there. The Pioneer Unit encompasses a substantial CBM prospect in the lower Matanuska Valley on the northern end of Cook Inlet (see map, p. 28). Unocal is seeking partners to appraise and, if successful, develop these potentially large reserves.

While the possibility of conventional sandstone and conglomerate hydrocarbon reservoirs exists in the prospect area, the testing of CBM potential is the project's primary objective. Abundant coal has been recognized in the stratigraphic section throughout the Cook Inlet basin, with estimates of up to 245 tcf of total gas in place. Success in the project could lead to expanding the play into the rest of Cook Inlet.

The area of highest potential is included in the 72,000-acre Pioneer Unit. Examinations of drill cuttings and core, wire line log, and mud log data from the area indicate a substantial coal volume with encouraging coal maturity and gas content. Additional supporting evidence includes gas flows from shallow-water wells that are open to coal seams and signficant methane shows from coal seams in deeper wells exploring for conventional oil and gas reservoirs. Uncertainties regarding the CBM potential are due to scarcity of data both from low-well density and direct measurements, such as gas and water production rates, adsorption/ desorption isotherms, and formation pressures and permeabilities.

Unocal has leased over 52,000 acres at 87.5% net revenue interest within the unit. Unit requirements consist of the drilling of three CBM exploration wells and the reentry of one abandoned well by the end of l999.

A 20-in. pipeline lies within 5 miles of the prospect and extends throughout an area (Anchorage, the Matanuska Valley, and Kenai Peninsula) of more than 300,000 people and industrial users, including fertilizer and liquefied natural gas export facilities.

The total gas in place for the 72,000-acre area of highest potential could be as much as 3.6 tcf, Unocal estimates.

CBM test program

Unocal's CBM test program consists of three phases:
  • Phase I, Preproduction, calls for drilling three or four test wells in depths ranging from 2,500 ft to 4,500 ft to recover core samples and to production-test wells. It is believed fracture stimulation will probably be necessary. Reentry of a well on the edge of the unit will involve a well completion and testing of promising coal and conventional reservoirs.
  • After Phase I has established perimeters of the area, Phase II, Pilot, will involve drilling five to 10 wells and tying in into local markets to evaluate the project for commercial development.
  • If the project appears commercial, Phase III, Development, will involve tie-in into the 20-in. pipeline and drilling of up to 400 wells. Five years after the project has been started, in 2003, the project will be reevaluated by the state. If the project is successful, the state could extend the operation for 5 more years.

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