Forest Oil cuts back at Redoubt Shoal

Posted: Thursday, February 05, 2004

ANCHORAGE Forest Oil has re-evaluated Cook Inlet's Redoubt Shoal and reduced estimated proved reserves by 49 million barrels to just 8 million barrels.

Craig Clark, Forest Oil's chief executive, told analysts last week that the company is ''very disappointed'' in the reduction in proved reserves at Redoubt. He said Forest finished its detailed technical review and has results back from the independent third-party review.

Lower productivity in the mature Cook Inlet basin had become apparent earlier in 2003. Clark said lower productivity, combined with lower reserves and high drilling costs, forced the reduction in the estimate of recoverable oil.

Forest ''also reduced the total recovery factor to 18 percent,'' he said. Cook Inlet fields have been averaging in the range of 25 percent to 42 percent of the oil in place being recovered.

Redoubt Shoal development was begun by Forcenergy, which merged into Forest in 2000. Forcenergy acquired leases at the prospect and ordered a drilling platform to drill an exploration well and, if reserves were proved up, to drill production wells.

The company chose to build a platform to avoid the cost of mobilizing a jack-up rig to Cook Inlet. The platform was designed to be moved to another prospect if drilling results at Redoubt were bad. The company set the platform in place in Cook Inlet in July 2000.

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