NEWS BULLETIN

August 07, 2003 --- Vol. 9, No. 78August 2003

Unocal drilling second Happy Valley well; plans a third well this year

In late June Unocal had just spud its Happy Valley No. 1 well and was in the process of permitting a gas development well, the Happy Valley No. 2, in its Deep Creek unit on the southern part of Alaskaís Kenai Peninsula.

On Aug. 4, Alaska Division of Oil and Gas Director Mark Myers told Petroleum News that Unocal was drilling the second well and was in the process of permitting a third well that it hoped to drill yet this year.

Myers offered no other information on the companyís plans for the Deep Creek unit and Unocal isnít talking, but good news from the unit will be welcome news for Unocal, which is scheduled to begin delivering natural gas at a lucrative price to Enstar on Jan. 1.

Deep Creek gas would be delivered to Enstar via the newly constructed Kenai-Kachemak Pipeline, owned by subsidiaries of Unocal and Marathon Oil.

Editor's note: See story in Aug. 10 issue of Petroleum News.

Forest may revise Redoubt Shoal reserve estimates down

Forest Oil said Aug. 6, in its second quarter earnings report, that recent results from its Redoubt Shoal field in Cook Inlet, Alaska, were below the company's expectations.

Overall company production of some 400 million cubic feet a day equivalent in the quarter continues "to be below our expectations, due to poor performance in our Alaska business unit," Dave Keyte, the company's executive vice president and CFO, said in an Aug. 7 conference call.

Craig Clark, Forest's president and CEO, noted the company has failed to show incremental production growth and "Alaska oil sales disappointed us, even though we did make some progress in reducing our down time" at Redoubt.

The company said it has completed drilling the Redoubt Unit 4A well, which was drilled to a depth of 18,082 feet and is being tested. It said production results from the recently completed Redoubt Unit 6 well, and drilling results from the Redoubt Unit 4A, "are below our original expectations and will result in a change to our existing geologic model of the Redoubt Shoal field." Forest said it will "undertake an integrated study on the field and develop geologic and reservoir models that appropriately reflect the apparent reservoir complexity and heterogeneity."

The company hopes to have "a better picture of the reservoir and the reserves by year end," Clark said.

Editor's note: See story in Aug. 10 issue of Petroleum News.


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