Old oil well may spring to life

Aurora Gas hopes abandoned Anchor Point site will produce again

Posted: Thursday, March 09, 2006

Banking that an old capped well may yet give up riches in oil and natural gas, one of Cook Inlet’s relatively new players is set to begin drilling near Anchor Point later this month.

Aurora Gas LLC is planning to locate its drilling operations on Griner Road in Anchor Point on an existing pad over an abandoned well sunk in 2002 by Unocal. The pad sits on a lease held by ConocoPhillips and Aurora, which bought its interest from Anadarko in 2002 along with all of Anadarko’s Cook Inlet-area interests.

Originally, the Griner Road well was drilled to a depth of 6,800 feet, but was soon capped when it didn’t produce. Aurora plans to drill further, to a depth of 9,800 feet in search of oil said, Andy Clifford, Aurora vice president for exploration, Monday. If no oil is discovered, the company plans to search for gas deposits at a shallower depth, Clifford said.

If oil is found, the company is likely to build an oil line to Nikiski. If gas is found in commercial quantities, Aurora expects to build a gas pipeline from Anchor Point to Ninilchik to connect to the 32-mile Kenai-Kachemak Natural Gas Pipeline linking gas fields near Ninilchik to Nikiski, Clifford said.

Round-the-clock drilling operations on what is being called the Endevour Project could begin by the end of March, Clifford said. Drilling would go on for about 20 days and other work would continue for another 20 to 25 days, he said.

“We want to be done before fishing season,” he said.

The initial well could cost as much as $4 million. Subsequent wells to develop the field if oil is found might cost more, especially if horizontal drilling techniques are employed, Clifford said.

“It costs more, but you get a higher flow rate,” he said.

Major development work would cease during the summer and ramp up again in the fall with further testing, including perhaps 3-D seismic testing, he said.

The company is sensitive to environmental issues and hopes to cause minimal impact on the Anchor River and surrounding streams, Clifford said. Quarter-mile setbacks are planned and the project would use the existing pad and roads so not much would be needed in the way of new infrastructure.

If gas or oil were found, full-scale development of the site would include trees and other sound buffers, as well as a planned 12-inch berm around a lined pad. Holding tank sites also would be lined against leakage, he said.

Those things, he said, would be done “as a matter of course.”

Aurora has taken steps to develop a working relationship with the environmental community, including Cook Inlet Keeper, a nonprofit organization that monitors the Cook Inlet watershed, Clifford said.

“Aurora has been very open with their information,” said Cook Inlet Keeper Director Bob Shavelson. “They are committed to doing a good job, and we have appreciated the dialogue they have initiated.”

That approach, Shavelson said, is smart.

“For so long, development has thrust us into an adversarial role,” Shavelson said. “We can come out with more benefits on the back end of this if we are having a serious discussion now.”

Clifford said the project could mean jobs for contractors and residents of Anchor Point and the Kenai Peninsula.

The company held an informational meeting March 2 in Anchor Point. Assembly member Milli Martin, whose Diamond Ridge district includes Anchor Point, said the prospect of the oil and gas project is good news for Anchor Point.

“It’s very exciting,” Martin said. “Many people there are hoping they will find something and bring some economic benefit for the community. They feel like there might be jobs.”

Aurora is a Houston-based company formed in 2000 as an independent oil and gas exploration and production company that now operates several gas fields on the west side of Cook Inlet. It has leases on more than 120,000 acres and a large inventory of development and exploratory prospects in the Cook Inlet basin, according to the company Web site.

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