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August 22, 2008 --- Vol. 14, No. 85August 2008

Aurora Gas to restart Cook Inlet drilling

Aurora Gas announced today that it is going to recommence its drilling program around Alaska’s Cook Inlet. The company had put its drilling operations on hold in October 2006 in part because of litigation with Enstar Natural Gas over Aurora’s suspension of gas supplies to Enstar and in part because of reluctance by Kaiser Francis Oil Co., Aurora’s primary owner, to invest more money in the Cook Inlet.

The lawsuit with Enstar was settled in May of this year.

Aurora Gas President G. Scott Pfoff said today that, following the settlement of the litigation and with more favorable market conditions in the Cook Inlet, Aurora Gas is now resuming its field development activities.

“The marketing of gas for a small company in Alaska remains quite challenging. However, we believe we can place all of this incremental deliverability at prices that will generate an acceptable return on our investment.” Pfoff said, “We are committing approximately $7.2 million in this renewed effort to find and develop more gas in Cook Inlet.”

Aurora’s new drilling program consists of converting the unsuccessful Aspen No. 1 exploration well to an injection well, the recompletion of Three Mile Creek No. 2 and the drilling of two new development wells in the Moquawkie and Lone Creek fields. All of this activity will take place on the west side of the Cook Inlet. The company’s AWS No. 1 rig has been mobilized to the Aspen well.

The drilling program should add at least 10 million to 15 million cubic feet per day of gas deliverability to the Cook Inlet gas network in time for the 2008-2009 winter season, Aurora Gas says.

See full story in Aug. 31 issue of Petroleum News, available to subscribers online at noon, Friday, Aug. 29 at www.PetroleumNews.com

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