Cook Inlet won't see a jack-up rig brought in by Houston-based Escopeta Oil and Gas this summer, despite the governor signing a bill that offers incentives to drill deeper in the Inlet for oil and natural gas.
Escopeta President Danny Davis said on Tuesday that the equipment would not be ready by July, as he had indicated earlier this year in legislative hearings.
Davis said that three companies he approached to use rigs declined to contract the equipment, with several concerned about the harsh winter climate.
Additionally, Davis said that to drill to the required depths, below 17,000 feet, would require more than 90 days and that he would not have enough time to do that if the rig didn't arrive until July.
Davis said however, that he did believe he could work out a deal and have a rig here by April 2011.
Davis added that while the incentives offered in the legislative package will be helpful, the costs will fall most heavily upon the company that first brings a rig to the Inlet as they will also have to pay a transport fee. For that reason he said he'll likely need to work with other companies to make this more feasible.
Time is not on Davis' side either.
According to Kevin Banks, director of the Department of Natural Resources Division of Oil and Natural Gas, under the unit agreement, Davis has to have a rig under contract by June 30 of this year and have it on the way by Dec. 30.
"If there's going to be a change in that we'll have to have a conversation with Danny Davis," Banks said.
The company is targeting a number of prospects in its Kitchen Unit, a group of offshore leases south of ConocoPhillips' Tyonek gas platform.
Exploration wells were drilled in the area in earlier phases of Inlet exploration, but while oil and gas was found, it was considered to be uneconomic to develop at the time.
With modern exploration tools like 3D seismic, Escopeta believes it has mapped the prospects more thoroughly than was done earlier. The company also believes there are deep oil and gas prospects that have not been tested.
Dante Petri can be reached at email@example.com.
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