Alaska-based independent Cook Inlet Energy has restarted a second shut-in oil well on the Osprey platform on the west side of Cook Inlet.
With the new well on line, Cook Inlet is now producing about 1,200 to 1,300 barrels per day of crude oil from two producing wells on the Osprey in addition to the two wells in the nearby onshore West McArthur River field, also owned and operated by Cook Inlet, company CEO David Hall said.
The two wells were restarted by replacing submerged pumps installed by original field developer, Forest Oil Corp. Cook Inlet acquired the Redoubt Shoal offshore field and West McArthur River onshore field two years ago following the bankruptcy of Pacific Energy Corp., which had purchased the assets from Forest Oil.
“The Osprey wells are doing well, and are performing better than they did prior to the shutdown of the platform,” when Pacific Energy filed for bankruptcy, Hall said.
Cook Inlet now plans to install a drilling rig on the platform this fall and has identified candidates for sidetracks at four other shut-in wells on the Osprey, which can be drilled once the rig is installed.
“We purchased a rig in Houston valued at about $18 million. It is now undergoing modifications and will be shipped to Alaska in the next three weeks,” Hall said.
The company also has a smaller rig at the West McArthur field intended for working over oil wells at that field and drilling shallow gas prospects in the area, Hall said.
That rig, owned by Cook Inlet’s parent company, Miller Energy of Tennessee, was brought to Alaska last year and is undergoing modifications for winter operations, he said.
Hall said there are good prospects for additional oil discoveries on Cook Inlet’s west side, and the plans by other companies to bring two jack-up rigs to the Inlet could add momentum.
Cook Inlet is also engaged in a study of a possible cross-Inlet oil pipeline that would lower the cost of shipping crude from the west side to Tesoro Petroleum’s refinery near Kenai.
Shipments of crude produced by Cook Inlet and Chevron on the west side are now shipped by tanker across the Inlet, which costs about $5 per barrel, Hall said. It costs Cook Inlet a total of about $14 per barrel to get its crude to Tesoro including the tanker charge and a pipeline tariff to a loading terminal south of the producing fields.
The additional Cook Inlet production helps Tesoro because its plant was originally designed for light Cook Inlet crude. With the decline in Cook Inlet production over the years Tesoro has had to purchase North Slope crude, which is more sour than Cook Inlet oil, and to import oil from overseas.