Forest Oil hoping to build on successes in 2001

Posted: Saturday, March 02, 2002

Forest Oil announced success in the first of its five exploratory wells off the Osprey Platform in the Redoubt Shoal site in February 2001. The company's good fortune at the beginning of the year carried over to the remaining months.

"We are currently drilling the fourth exploration well, out of the five permitted," said Gary Carlson, senior vice president for Alaska operations.

The first exploratory well, drilled to a depth of 15,323 feet, struck a pool of oil 450 feet deep and tested at a stabilized flow of 1,010 barrels of oil per day at its $35 million Osprey Platform, installed in the summer of 2000 near West Foreland.

Oil from this and the second well was tested at different rates and measured pressure to determine whether the sites were going to produce satisfactory results. Electrical well logs reflected strong production rates that promise to hold out into the future.

Forest Oil at a glance

Corporate headquarters: Denver, Colo.

Alaska manger: Gary E. Carlson, senior vice president

Contact number: 258-8600

2001 capital expenditures: $100,000 million in Alaska

Production in 2001: 3.5 million barrels

Company outlook: Forest Oil, upon receiving additional permits, will continue to develop its Redoubt Shoal field including support facilities and future wells.

"The zone that we were interested in was full. Number three also found a full column of oil -- the zone of interest was oil saturated," Carlson said.

Because production from the first two wells, which tested the first and second fault blocks, exceeded expectations, future wells will not be tested to the extent that their predecessors were, he said. The fourth well, which was expected to be completed last month, is already 20,000 feet deep and still in exploratory stages.

The Denver-based company only has permits to drill five wells, but Carlson said once all five have proven themselves the company may look into further exploration.

"We hope to continue drilling until we have a field fully developed. We built the platform with the potential of 28 wells."

Along with a 28-well field comes support equipment and facilities. Forest will build two undersea pipelines to carry the oil and gas roughly 1.5 miles to West Foreland on the inlet's west shore and pipelines on land to cover the remaining 2 miles to Kustatan. There, it will build a power plant and facilities to remove the "produced water" that comes out of the ground with the oil and gas. A third pipeline will carry produced water back to Osprey for disposal through the injection well.

Forest also plans two 7.8-mile pipelines to carry natural gas and crude oil from Kustatan to Trading Bay. From there, it could sell gas through existing Cook Inlet gas lines, and oil through the existing pipeline to the tanker terminal at Drift River.

The company submitted its plans for public comment in January, and Carlson said he hopes to be permitted by March for construction throughout the spring and summer. All the facilities will be built with the capacity of processing the 20,000 barrels a day that Forest Oil predicts its wells will produce.

"We are hoping to have it all pretty well in place before the end of the year."

Company officials say the Osprey Platform daily production would nearly double the inlet's present production of 29,000 barrels per day.

A find like that also would be a big boost to Forest, which projects 2002 production of 25,000 to 30,000 barrels per day, not including projected production from the Redoubt Shoal field.

Beyond Cook Inlet, Forest Oil is also active with Unocal in production at the McArthur River field. Forest holds roughly a 46 percent interest in the McArthur River field, tapped through the Dolly Varden, King Salmon, Steelhead and Grayling platforms. Unocal, which holds a 54 percent interest, is the operator.

Additionally, the company is undertaking geological and geophysical exploration of nearly 400,000 acres of state land in the Copper River Basin in order to determine possible exploratory potential in that region. Forest Oil also has holdings in some operations on the North Slope.

Closer to home, Forest Oil has holdings in the Phillips-operated site dubbed Cosmopolitan near Anchor Point. However, Carlson said, his company turned to Phillips for the release of any information regarding the exploration in that area.

Phillips officials also declined to comment on the Cosmopolitan findings.

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