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Oil flows from CIE well

Posted: December 30, 2013 - 9:22pm

Cook Inlet Energy struck oil with its Sword No. 1 well located on the western side of Cook Inlet.

According to the statement of discovery received by the Division of Oil and Gas on Dec. 19, 121.7 barrels of oil flowed from the well during a three-hour test on Nov. 25.

The Sword No. 1 well is within a 240-acre structure adjacent to CIE’s West McArthur River Field. The multiple oil and natural gas pools discovered by CIE are located in a fault block that Pan American Corporation drilled from 1964 – 1965, according to a previous press release from Miller Energy Resources, which owns CIE.

According to a November release, Sword No. 1 is producing only from the Hemlock oil zone. During a 96-hour period the well averaged 883 barrels of oil.

“Initial results from the Sword No. 1 well have exceeded our expectations,” David Hall, CIE chief executive officer, said in the release.

The company expects the well continue to surpass the previously estimated 750 barrels of oil, Hall said in the release.

According to its discovery statement initial well logs identify the shallower Tyonek formation to be productive as well. In its release, the company said it planned to test the shallower Tyonek-G oil sands and Tyonek gas sands formations throughout December.

The Alaska Oil and Gas Conservation Commission has tentatively scheduled a public hearing for CIE’s application to combine the production from two reservoirs in the Sword No. 1 well for Jan. 28 in Anchorage.

Cathy Foerster, one of three commissioners with the conservation commission, said proper reservoir management includes keeping track of production from individual reservoirs, so the commission doesn’t usually allow operators to commingle — produce from two reservoirs at the same time.

However, she said, if the commission determines the best option for production is to commingle, it will relax the rule.

She said reasons for combining reservoirs could be because the operator will get the best production or the reservoirs are small and it wouldn’t be economically justified to produce separately.

“Usually when an operator makes that request, they’ve got good reasons and we grant it,” she said. “But not always.”

If nobody objects to CIE’s request to commingle and the commission’s technical staff has enough information to make a recommendation, Foerster said the hearing would likely be vacated.

CIE began its drilling at Sword No. 1 well on June 19.

Sword No. 1 is the first of two wells planned in the structure near the West McArthur River Field. Since the oil discovery, CIE has moved the drilling rig used for Sword No. 1 30 feet to drill its WMRU-8 development well.

CIE plans to begin drilling for its first Sabre well, which is adjacent to the Sword prospect with nearly three times the acreage, in the summer of 2014.

Kaylee Osowski can be reached at kaylee.osowski@peninsulaclarion.com.

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