With various agreements and plans in place, Furie Operating Alaska LLC will continue its oil and gas exploration in Cook Inlet this summer in hopes of bringing new discoveries to market.
On Wednesday, the State of Alaska Department of Natural Resources announced it granted a four-year extension of Furie’s existing Kitchen Lights Unit agreement through the end of January 2016. The decision sets in place Furie’s plans to finish drilling a well it started last summer in the unit and drill a second well this summer.
The company also announced it hopes to have a new platform built and installed on one of those two wells by the end of 2013.
Furie, previously known as Escopeta Oil of Alaska, brought the Spartan 151 jack-up rig to the Inlet last summer and spudded the Kitchen Lights Unit No. 1 well, located about 10 miles north of Nikiski, in early September at a depth of 8,805 feet. It was the first company to bring in an exploratory jack-up rig to the Inlet in more than 20 years.
The company estimates it found 46.7 billion cubic feet of natural gas from that single exploratory well and a total estimated potential of 3.5 trillion cubic feet of gas in the Sterling and Beluga formations.
Furie President Damon Kade said crews plan to have the Spartan 151 remobilized in mid-April depending on ice build-up in the Inlet.
“We got our extension yesterday and now we are getting the rig and all of our service providers lined up to kick off the season here,” he said.
The company hopes to be on location around April 25 to re-enter its first well and drill down to the Jurassic formation at a depth of 16,500 feet, Kade said.
“We think there is oil down there,” Kade said.
The company had to suspend operations on the first well after its gas find — estimated to be the largest in the Inlet in at least 25 years — due to winter ice formation. The Spartan 151 has been wintered near Port Graham where it underwent steel replenishment, which Kade said is mitigation for “normal wear and tear.”
The company hopes to drill a second well in the Kitchen Lights Unit a few thousand feet away from the old South Cook Inlet No. 3 well, which was an exploratory well drilled, but not produced, by Arco in 1993.
Kade said the area looks promising.
“The logs we have from them, the gas looks very, very optimistic from 5,000 to 12,000 feet and the oil looks very promising from 12,000 to 15,000 plus feet,” he said. “But we plan to get as deep as we can, log and suspend.”
Kade said the second well will likely be spudded in mid-July and will help the company delineate the area’s prospect and further prove out the estimations.
“We’re in that process now of figuring out where we are going to deliver the hydrocarbons,” he said.
Furie hopes to have a new platform in place with gas headed to market by the end of 2013 at the earliest barring any hang-ups in the permitting process, Kade said. It would be designed to serve at least six directionally drilled wells. Fabrication and construction of the platform would likely be scattered.
“There are different components of a platform you can fabricate in different areas so we will source the various options,” he said. “It could be Lower 48, it could be Anchorage, it could be there in Kenai.”
The company will permit for gas initially with the idea of permitting for oil down the road, Kade said.
“The plan would be to put the platform in 2013 above one of these two wells and complete one of them in 2013 depending on which well looks the best, if you will,” he said.
Kade said the company is excited by the results it has seen so far.
“It’s a significant find for sure and that’s why we’ve already kind of committed to the infrastructure plans for the following year,” he said. “It’s a pretty big step for us to commit to at this point, but we think it’s a great find and we think it is going to help out the community down there long term.”