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Dead in the water

After 8 months, Apache's seismic work still stalled by permit delays

Posted: May 11, 2013 - 9:09pm  |  Updated: May 11, 2013 - 9:51pm

After launching one of the largest and fastest 3D seismic data gathering campaigns in Cook Inlet’s history, Apache Oil Corporation’s work in the area has paused — victim to slow permitting processes in key areas.

The company made headlines when the work it planned to complete halted in mid-September 2012. Previously, Apache had gathered more than 300 square miles of seismic data spread across the west side of the inlet from the east Forelands area north including portions of Nikiski and up into Tyonek.

Since then Apache has played the waiting game.

John Hendrix, Apache Alaska general manager, told a crowd of industry representatives in February that the company has about $200 million worth of seismic work it would like to do in the area. Hendrix said the company has been frustrated by the lack of progress getting permits, which he said would ultimately push back any sort of drilling or production the company has in mind.

Apache Government Relations Manager Lisa Parker said the company is still waiting on two major federal permits.

“We are a ways out on those,” she said.

The company also needs to ink a handful of smaller land permits from property owners.

“For every single property owner where we could be potentially placing receivers, we have to have permission from all those property owners and we are working on all those as well,” she said.

In February, the company received an Incidental Harassment Authorization permit from National Marine Fisheries Service to restart its marine seismic data gathering operations in the middle of Cook Inlet.

However, Parker said its contracting crews won’t go back to work until Apache gets permits for work onshore in Nikiski from the Army Corps of Engineers and a special use permit for seismic work on Cook Inlet Region, Inc. land within the Kenai National Wildlife Refuge.

The reason, Parker said, is that Apache’s seismic doesn’t look directly below the surface, but extends for miles around any given area, meaning that offshore and onshore seismic data must be gathered at the same time.

“Getting everything together so that you can start seismic in one area and continue into the other area, having those permits lined up systematically so that you work continuously is a challenging process,” she said. “I can get permits to operate in one area, but I still need the permits to operate immediately adjacent.”

Parker said Apache has permits for onshore seismic work on its southern Peninsula lease holdings, but has determined its priority is the northern Peninsula where the company sees “higher prospects.”

“We will be going back to the southern Peninsula, but we haven’t determined the time when we will return to do seismic in that area,” she said.

Apache does the majority of its seismic work in the winter, and the company has eyes on this winter to restart operations.

“No guarantees, but that’s the goal,” Parker said.

But, Apache will not authorize its contractor, SAExploration, to go back to work until it has all its permits so that its seismic can be “seamless,” Parker said.

Work related to Apache’s first Cook Inlet well — the Kaldachabuna No. 2 near Tyonek — has stopped as well, Parker said.

The explorer hoped to drill the Kaldachabuna well to a total depth of 12,000 feet by mid-February using a Patterson-UTI drilling rig shipped north from North Dakota’s Bakken formation.

Parker said that drilling has been suspended and was unsure if the company was able to reach the depth it wanted. Apache is currently looking at core logs from the Kaldachabuna drilling in Houston, Parker said.

“We’ll be determining our next steps,” Parker said.

Despite being stalled in both phases of work, Parker said Apache hasn’t abandoned its large Cook Inlet plans, but at the same time realizes permitting takes time, especially in areas where the land ownership is complex.

“Apache is still very, very committed to Cook Inlet and we’re looking to find oil and gas to get into production,” she said.

 

Brian Smith can be reached at brian.smith@peninsulaclarion.com.

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